'For the balance of the year, they will focus on debt reduction. At the end of the third quarter, their debt was at $62 million under their $110 million credit facility.
From an operational standpoint, they will reduce operating costs and manage their year-end inventory levels.
They have begun the expense reduction process and will continue to refine and right-size their operating expense structure.'
'They expect to complete sale/leasebacks of two more store properties in November and have a letter of intent to sell their former distribution center and corporate offices in Tupelo, MS.
Assuming no delays in the scheduled process, they believe that the sale of the Tupelo property will be finalized prior to fiscal year end and, when combined with the store sale/leasebacks, will yield approximately $7 million.
One more store property remains, to sell and leaseback, which could raise another $2 million in early 2006.
In addition, the suspension of the dividend will add approximately $4.5 million to Hancock's annualized cash flow.'
'In looking forward to 2006, they will focus their efforts primarily on improving productivity in all areas of the Company.
As one result, they will not be opening new stores, except in relocation circumstances,' Aggers concluded.
The Company also noted that the determination of insurance deductible levels related to Hurricanes Katrina and Rita is ongoing between Hancock and its insurer.
Based on available facts, a loss of approximately $230,000 has been recorded in the third quarter for the expected insurance deductible.
Hancock Fabrics Inc is a specialty retailer of fabric and related home sewing and decorating accessories.
The Company operates 446 retail fabric stores in 43 states and operates an internet store.
marketing@alchempro.com
