Based on the information above, the Company believes that its previously issued financial statements for the first three quarters of 2005, each of the four quarters of 2004 and 2003 and each of the fiscal years ended February 2, 2003 through January 30, 2005 need to be restated and should no longer be relied upon. The preparation of the Company's 2005 financial statements and the 2005 Annual Report on Form 10-K will be completed upon the resolution of the inventory issues previously described on a Form 8-K dated June 8, 2006.
While the Company currently does not believe the inventory errors will impact years prior to 2005, its procedures are not complete and it is unable to conclude on the impact, if any, to prior years. Accordingly, the Company will correct the prior year errors for the pension accounting in its 2005 Annual Report on Form 10-K through the restatement of the 2004 and 2003 financial statements. The Company is unable to estimate when the inventory procedures will be completed.
Hancock Fabrics Inc - America's Fabric Store - is committed to serving creative enthusiasts with a complete selection of fashion and home decorating fabrics, sewing accessories, needlecraft supplies and sewing machines. The Company operates 442 retail stores in 43 states.
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