Exited Businesses: As previously disclosed, the Company determined in May 2007 to cease domestic activities of Marisa Christina and on November 2, 2007 sold the David Brooks' trademarks and all associated inventory and the Marisa Christina trademarks rights in all countries other than Japan. The Company estimates that the total net loss from the sale of these assets will be approximately $0.5 million.
David Brooks' and Marisa Christina's aggregate net sales, SG&A expenses, and operating losses for fiscal year 2006 were $18.0 million, $8.5 million, and $1.3 million, respectively. For the nine months ended September 29, 2007, their aggregate net sales, SG&A expenses, and operating losses were $11.0 million, $6.4 million, and $3.4 million, respectively.
Other Information: As of December 6, 2007, Hampshire had cash on hand of approximately $9.9 million, $34.4 million in letters of credit, and no borrowings outstanding under its credit facility. On the same date of the prior year, the Company had cash on hand of approximately $36.9 million, $32.8 million in letters of credit, and no borrowings outstanding under its credit facility.
This reduction in cash is due in large part to the delay in shipments. Based on its most recent borrowing base calculation as of November 3, 2007, Hampshire has a net availability of $53.6 million including outstanding borrowings and letters of credit. Michael Culang, interim Chief Executive Officer, stated: “The third quarter of 2007 was adversely impacted by the numerous requests received from our retail partners, due to prevailing business conditions, to delay shipments scheduled to be released in the third quarter. By agreeing to these delays, third quarter sales were pushed into the fourth quarter. Concurrently, the discontinuance of certain lower margin products, plus the losses incurred in the exited businesses of David Brooks and Marisa Christina, impacted our results as well.
We believe that our brand strategies, our commitment to creating compelling product with value and quality as primary ingredients, reliable delivery execution, as well as a strong financial position, will be primary catalysts to market share growth and the continuing strategic position we hold with our customers in a very challenging retail environment.”