UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended July 27, 2013

 

OR

 

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from_____________to___________.

 

Commission File Number 1 – 9482

 

HANCOCK FABRICS, INC.

(Exact name of registrant as specified in its charter)

 

Delaware		64-0740905
(State or other jurisdiction		(I.R.S. Employer
of incorporation or organization)		Identification No.)
One Fashion Way, Baldwyn, MS		38824
(Address of principal executive offices)		(Zip Code)

 

(662) 365-6000

Registrant’s telephone number, including area code

 

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X]     No [ ]

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).          Yes [X]     No [ ]

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definition of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer [ ] Accelerated filer [ ] Non-accelerated filer (Do not check if a smaller reporting company) [ ] Smaller reporting company [ X ]

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes [  ]     No [X]

 

 

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.  Yes [X]     No [ ]

 

As of August 30, 2013, there were 21,548,638, shares of Hancock Fabrics, Inc. $.01 par value common stock outstanding.

 

 

Table of Contents

Hancock Fabrics, Inc.,

INDEX TO FORM 10-Q

 

Part I. Financial Information	Page
Item 1. Condensed Financial Statements (unaudited)
Consolidated Balance Sheets as of July 27, 2013, July 28, 2012, and January 26, 2013	4
Consolidated Statements of Operations and Comprehensive Loss for the Thirteen and Twenty-six Weeks Ended July 27, 2013 and July 28, 2012	5
Consolidated Statement of Shareholders’ Equity (Deficit) for the Twenty-six Weeks Ended July 27, 2013	6
Consolidated Statements of Cash Flows for the Twenty-six Weeks Ended July 27, 2013 and July 28, 2012	7
Notes to Consolidated Financial Statements	8
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	11
Item 3. Quantitative and Qualitative Disclosures about Market Risks	20
Item 4. Controls and Procedures	20
Part II. Other Information
Item 1. Legal Proceedings	21
Item 1A. Risk Factors	21
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	21
Item 3. Defaults Upon Senior Securities	21
Item 4. Mine Safety Disclosures	21
Item 5. Other Information	21
Item 6. Exhibits	22
Signatures	23

 

 

PART I. FINANCIAL INFORMATION

 

ITEM 1. CONDENSED FINANCIAL STATEMENTS

 

HANCOCK FABRICS, INC.

CONSOLIDATED BALANCE SHEETS

 

		(unaudited)
(in thousands, except for share amounts)		July 27, 2013				July 28, 2012				January 26, 2013 (1)
Assets
Current assets:
Cash and cash equivalents		$	2,163			$	2,415			$	4,062
Receivables, less allowance for doubtful accounts			3,693				3,742				3,817
Inventories, net			108,174				106,106				101,245
Prepaid expenses			2,902				3,295				2,552
Total current assets			116,932				115,558				111,676
Property and equipment, net			33,099				34,751				33,571
Goodwill			2,880				2,880				2,880
Other assets			2,500				1,456				2,405
Total assets		$	155,411			$	154,645			$	150,532
Liabilities and Shareholders' Equity (Deficit)
Current liabilities:
Accounts payable		$	23,358			$	20,993			$	18,702
Accrued liabilities			13,488				15,068				13,995
Total current liabilities			36,846				36,061				32,697
Long-term debt obligations, net			75,041				65,357				69,374
Capital lease obligations			2,697				2,866				2,807
Postretirement benefits other than pensions			2,375				2,373				2,481
Pension and SERP liabilities			33,031				33,222				35,115
Other liabilities			5,484				6,048				5,567
Total liabilities			155,474				145,927				148,041
Commitments and contingencies
Shareholders' equity (deficit):
Common stock, $.01 par value; 80,000,000 shares authorized; 34,926,325, 34,827,211 and 34,978,210 issued and 21,488,940, 21,421,631 and 21,570,797 outstanding, respectively			350				348				350
Additional paid-in capital			90,996				90,377				90,720
Retained earnings			93,333				99,219				96,426
Treasury stock, at cost, 13,437,385, 13,405,580 and 13,407,413 shares held, respectively			(153,755	)			(153,739	)			(153,740	)
Accumulated other comprehensive loss			(30,987	)			(27,487	)			(31,265	)
Total shareholders' equity (deficit)			(63	)			8,718				2,491
Total liabilities and shareholders' equity (deficit)		$	155,411			$	154,645			$	150,532

 

See accompanying notes to consolidated financial statements.

 

⁽¹⁾ From audited balance sheet included in our annual report on Form 10-K for the fiscal year ended January 26, 2013.

 

 

HANCOCK FABRICS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(unaudited)

---

  

		Thirteen Weeks Ended								Twenty-six Weeks Ended
(in thousands, except per share amounts)		July 27, 2013				July 28, 2012				July 27, 2013				July 28, 2012
Net sales		$	59,134			$	60,455			$	122,875			$	124,399
Cost of goods sold			32,593				34,530				67,357				72,373
Gross profit			26,541				25,925				55,518				52,026
Selling, general and administrative expenses			26,911				27,010				53,710				53,361
Depreciation and amortization			887				936				1,776				1,873
Operating (loss) income			(1,257	)			(2,021	)			32				(3,208	)
Interest expense, net			1,369				1,286				3,125				2,509
Loss before income taxes			(2,626	)			(3,307	)			(3,093	)			(5,717	)
Income taxes			-				-				-				-
Net loss		$	(2,626	)		$	(3,307	)		$	(3,093	)		$	(5,717	)
Other comprehensive income
Minimum pension, SERP and OPEB liabilities, net of taxes $0			139				97				278				193
Comprehensive loss		$	(2,487	)		$	(3,210	)		$	(2,815	)		$	(5,524	)
Net loss per share, basic and diluted		$	(0.13	)		$	(0.17	)		$	(0.15	)		$	(0.29	)
Weighted average shares outstanding:
Basic and diluted			20,466				19,925				20,453				19,919

 

See accompanying notes to consolidated financial statements.

 

 

HANCOCK FABRICS, INC.

CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY (DEFICIT)

(unaudited)

---

 

(in thousands, except for		Common Stock								Additional Paid-in				Retained				Treasury Stock								Accumulated Other Comprehensive Income				Total Shareholders' Equity
number of shares)		Shares				Amount				Capital				Earnings				Shares				Amount				(Loss)				(Deficit)
Balance January 26, 2013			34,978,210			$	350			$	90,720			$	96,426				(13,407,413	)		$	(153,740	)		$	(31,265	)		$	2,491
Net loss															(3,093	)															(3,093	)
Minimum pension, SERP and OPEB liabilities, net of taxes of $0																											278				278
Issuance of restricted stock			76,000				1				(1	)																			-
Cancellation of restricted stock			(127,885	)			(1	)			1																				-
Stock-based compensation											276																				276
Purchase of treasury stock																			(29,972	)			(15	)							(15	)
Balance July 27, 2013			34,926,325			$	350			$	90,996			$	93,333				(13,437,385	)		$	(153,755	)		$	(30,987	)		$	(63	)

 

See accompanying notes to consolidated financial statements.

 

 

HANCOCK FABRICS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

---

		Twenty-six Weeks Ended
(in thousands)		July 27, 2013				July 28, 2012
Cash flows from operating activities:
Net loss		$	(3,093	)		$	(5,717	)
Adjustments to reconcile net loss to cash flows used in operating activities
Depreciation and amortization, including cost of goods sold			2,389				2,692
Amortization of deferred loan costs			361				123
Amortization of discount on notes			379				1,165
Stock-based compensation			276				373
Inventory valuation reserve			576				(658	)
Other			114				189
Change in assets and liabilities:
Receivables and prepaid expenses			(226	)			25
Inventories			(7,684	)			(9,546	)
Other assets			(534	)			(111	)
Accounts payable			4,656				1,643
Accrued liabilities			(484	)			(1,257	)
Postretirement benefits other than pensions			(562	)			(521	)
Pension and SERP liabilities			(1,350	)			(1,803	)
Other liabilities			(126	)			(395	)
Net cash used in operating activities			(5,308	)			(13,798	)
Cash flows from investing activities:
Purchase of property and equipment			(1,803	)			(1,429	)
Proceeds from the disposition of property and equipment			13				241
Net cash used in investing activities			(1,790	)			(1,188	)
Cash flows from financing activities:
Net borrowings on revolving credit facility			5,288				14,819
Other			(89	)			(66	)
Net cash provided by financing activities			5,199				14,753
Decrease in cash and cash equivalents			(1,899	)			(233	)
Cash and cash equivalents:
Beginning of period			4,062				2,648
End of period		$	2,163			$	2,415
Supplemental disclosures:
Cash paid during the period for:
Interest		$	2,770			$	1,338
Income taxes			-				-
Non-cash activities:
Noncash change in funded status of benefit plans			278				193

 

See accompanying notes to consolidated financial statements.

 

 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

 

NOTE 1 – BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Organization

 

Hancock Fabrics, Inc. (“Hancock” or the “Company”) is a specialty retailer committed to nurturing creativity through a complete selection of fashion and home decorating textiles, crafts, sewing accessories, needlecraft supplies and sewing machines. As of July 27, 2013, Hancock operated 261 stores in 37 states and an internet store under the domain name hancockfabrics.com. Hancock conducts business in one operating business segment.

 

References herein to “Hancock,” the “Company,” “Registrant,” “we,” “our” or “us” refer to Hancock Fabrics, Inc. and its subsidiaries unless the context specifically indicates otherwise. References herein to second quarter 2013 and second quarter 2012 are for the 13 week periods ended July 27, 2013 and July 28, 2012, respectively. References to twenty-six weeks 2013, first half 2013 or 2013, and twenty-six weeks 2012, first half 2012 or 2012 are for the 26 week periods ended July 27, 2013 and July 28, 2012, respectively.

 

 

Basis of Presentation

 

We maintain our financial records on a 52-53 week fiscal year ending on the last Saturday in January with each new fiscal year commencing on the Sunday thereafter. All quarters consist of 13 weeks except for one 14-week period in 53-week years.

 

The accompanying unaudited Consolidated Financial Statements should be read in conjunction with our audited Consolidated Financial Statements and accompanying notes in our Annual Report on Form 10-K for the year ended January 26, 2013 filed with the U.S. Securities and Exchange Commission (“SEC”) on April 26, 2013. The accompanying (a) consolidated balance sheet as of January 26, 2013, has been derived from audited financial statements, and (b) the unaudited consolidated interim financial statements have been prepared pursuant to SEC Rule 10-01 of Regulation S-X. Accordingly, certain information and note disclosures normally included in annual financial statements prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) have been condensed or omitted pursuant to those rules and regulations from the interim financial statements, although we believe that the disclosures made are adequate to make the information not misleading.

 

The unaudited results of operations for the interim periods shown in these financial statements are not necessarily indicative of operating results for the entire year. In the opinion of management, the accompanying unaudited Consolidated Financial Statements recognize all adjustments of a normal recurring nature considered necessary to fairly state our consolidated financial position as of July 27, 2013 and July 28, 2012, and our consolidated results of operations and cash flows for the twenty-six weeks ended July 27, 2013, and July 28, 2012.

 

The unaudited Consolidated Financial Statements have been prepared in accordance with GAAP applicable to a going concern. Except as otherwise disclosed, these principles assume that assets will be realized and liabilities will be discharged in the ordinary course of business.

 

 

 

NOTE 2 – EMPLOYEE BENEFIT PLANS

 

Retirement Plans. The following summarizes the net periodic benefit cost for Hancock’s defined benefit pension retirement plan and its postretirement health care benefit plan for the thirteen and twenty-six weeks ended July 27, 2013 and July 28, 2012 (in thousands):

 

		Retirement Plan								Postretirement Benefit Plan								Retirement Plan								Postretirement Benefit Plan
		Thirteen Weeks Ended																Twenty-six Weeks Ended
		July 27, 2013				July 28, 2012				July 27, 2013				July 28, 2012				July 27, 2013				July 28, 2012				July 27, 2013				July 28, 2012
Service costs		$	153			$	155			$	17			$	18			$	306			$	310			$	35			$	37
Interest cost			1,009				1,052				28				29				2,017				2,104				56				59
Expected return on assets			(1,010	)			(1,044	)			-				-				(2,020	)			(2,088	)			-				-
Amortization of prior service costs			-				-				(181	)			(178	)			-				-				(361	)			(355	)
Recognized net actuarial (gain) loss			367				329				(47	)			(55	)			734				657				(95	)			(110	)
Net periodic benefit cost (gain)		$	519			$	492			$	(183	)		$	(186	)		$	1,037			$	983			$	(365	)		$	(369	)

 

At July 27, 2013, the fair value of the assets held by the pension plan was $62.0 million reflecting a $0.8 million increase from January 26, 2013. Cash contributions to the pension plan of $2.4 million are included in that increase. Service costs consist of administrative expenses paid out of the pension trust.

 

 

NOTE 3 – EARNINGS (LOSS) PER SHARE

 

Earnings (loss) per share is presented for basic and diluted earnings per share. Basic earnings per share excludes dilution and is computed by dividing income available to holders of common stock by the weighted-average number of common shares outstanding for the period. Diluted earnings per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the Company.

 

As of July 27, 2013, there were outstanding warrants for 2,100,400 shares with an exercise price of $1.12, which expired on August 1, 2013 and warrants for 9,838,000 shares with an exercise price of $0.59, which will expire on November 20, 2019. In addition, there were stock options for 1,912,696 shares with a weighted average exercise price of $1.13, and approximately 1,503,000 restricted stock units and restricted shares. Each of these would be included in the computation as common stock equivalents for diluted earnings per share, if the impact was not anti-dilutive.

 

 

 

COMPUTATION OF LOSS PER SHARE

 

(in thousands, except for share and per share amounts)		Thirteen Weeks Ended								Twenty-six Weeks Ended
		July 27, 2013				July 28, 2012				July 27, 2013				July 28, 2012
Basic and diluted loss per share:
Net loss		$	(2,626	)		$	(3,307	)		$	(3,093	)		$	(5,717	)
Weighted average number of common shares outstanding during period			20,466,236				19,925,222				20,452,890				19,919,052
Basic and diluted loss per share		$	(0.13	)		$	(0.17	)		$	(0.15	)		$	(0.29	)

 

Using the Treasury Stock method, the number of shares excluded from the diluted loss per share calculation totaled approximately 15.3 and 13.7 million for the second quarters and 15.3 and 12.6 million for the twenty-six weeks of 2013 and 2012, respectively.

 

 

NOTE 4 – LONG-TERM DEBT OBLIGATIONS

 

On November 15, 2012, the Company entered into an amended and restated loan and security agreement with its direct and indirect subsidiaries, General Electric Capital Corporation, as working capital agent, GA Capital, LLC, as term loan agent, and the lenders party thereto, which expires on November 15, 2016. The amended and restated loan and security agreement amends and restates the Company’s loan and security agreement dated as of August 1, 2008, and provides senior secured financing of $115 million, consisting of (a) an up to $100 million revolving credit facility (the "Revolver"), which includes a letter of credit sub-facility of up to $20.0 million, and (b) an up to $15.0 million term loan facility (the "Term Loan"). The level of borrowings available is subject to a borrowing base computation, as defined in the amended and restated loan and security agreement, which includes credit card receivables, inventory, and real property. Principal amounts outstanding under both the Revolver and the Term Loan bear interest at a rate equal to, at the option of the borrowers, either (a) a LIBOR rate determined by reference to the offered rate for deposits in dollars for the interest period relevant to such borrowing (the “Eurodollar Rate”), or (b) a prime rate, in each case plus an applicable margin and adjusted for certain additional costs and fees. The applicable margin for borrowings under the Revolver is 2.25% with respect to the Eurodollar Rate and 1.25% with respect to the prime rate loans and under the Term Loan is 10.0% with respect to the Eurodollar Rate and 9.0 % with respect to the prime rate loans.

 

The Revolver and Term Loan are collateralized by a fully perfected first priority security interest in all of the existing and after acquired real and personal tangible and intangible assets of the Company.

 

As of July 27, 2013, the Company had outstanding borrowings under the Revolver of $51.8 million and $15.0 million under the Term Loan, and amounts available to borrow of $19.6 million.

 

At July 27, 2013, Hancock had commitments under the above credit facility of $2.0 million, under documentary letters of credit, which support purchase orders for merchandise. Hancock also has standby letters of credit to guarantee payment of potential insurance claims. These letters of credit amounted to $6.3 million as of July 27, 2013.

 

On November 20, 2012, the Company exchanged approximately $16.4 million aggregate principal amount of the Company’s outstanding $21.6 million of Floating Rate Series A Secured Notes (the “Existing Notes”) originally issued pursuant to an Indenture dated as of June 17, 2008 (the “2008 Indenture”) between the Company and Deutsche Bank National Trust Company (“DBNTC”), as trustee thereunder, for (a) the Company’s Floating Rate Series A Secured Notes Due 2017 in an aggregate principal amount of approximately $8.2 million (the “New Notes”) issued pursuant to an indenture dated as of November 20, 2012 between the Company and DBNTC, as trustee thereunder (the “New Indenture”), and (b) cash consideration in the aggregate amount of approximately $8.2 million. After completion of the exchange, approximately $5.1 million aggregate principal amount of Existing Notes remained outstanding.

 

 

 

On January 31, 2013, the Company retired the remaining $5.1 million of Existing Notes outstanding, with funds from the Revolver, and wrote off the related unamortized discount of $379,000.

 

The New Notes bear interest at a variable rate, adjusted quarterly, equal to a LIBOR rate plus 12% per annum until maturity on November 20, 2017. The New Notes and the related guarantees provided by certain subsidiaries of the Company are secured by a lien on substantially all of the Company’s and the subsidiary guarantors’ assets, in each case, subject to certain prior liens and other exceptions, but the New Notes are subordinated in right of payment in certain circumstances to all of the Company’s existing and future senior indebtedness, including the Company’s Amended and Restated Loan and Security Agreement, dated as of November 15, 2012.

 

As of July 27, 2013, the Company had an outstanding balance of $8.2 million on the New Notes.

 

NOTE 5 – SUBSEQUENT EVENTS

 

The Company has evaluated subsequent events through the date on which this report was issued and determined there were no subsequent events that required adjustment or disclosure in connection with the financial statements for the period ended July 27, 2013.

 

 

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

The following discussion should be read in conjunction with the consolidated financial statements as of and for the thirteen and twenty-six weeks ended July 27, 2013, including the notes to those statements, appearing elsewhere in this report. We also suggest that management’s discussion and analysis appearing in this report be read in conjunction with the management’s discussion and analysis and consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended January 26, 2013. Our fiscal year ends on the last Saturday in January and refers to the calendar year ended immediately prior to such date, which contained the substantial majority of the fiscal period (e.g., “fiscal 2012” or “2012” refers to the fiscal year ended January 26, 2013). Fiscal years consist of 52 weeks, comprised of four 13-week fiscal quarters, unless noted otherwise. References herein to second quarter 2013 and second quarter 2012 are for the 13 week periods ended July 27, 2013 and July 28, 2012, respectively. References to twenty-six weeks 2013, first half 2013 or 2013, and twenty-six weeks 2012, first half 2012 or 2012 are for the 26 week periods ended July 27, 2013 and July 28, 2012, respectively.

 

Forward Looking Statements

 

 

This Quarterly Report on Form 10-Q (“Quarterly Report”) contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended (the Exchange Act). Such statements are not historical facts and reflect our current views regarding matters such as operations and financial performance. In general, forward-looking statements are identified by such words or phrases as “anticipates,” “believes,” “approximates,” “estimates,” “expects,” “intends” or “plans” or the negative of those words or other terminology. Forward-looking statements involve inherent risks and uncertainties; our actual results could differ materially from those expressed in our forward-looking statements.

 

 

 

The risks and uncertainties, either alone or in combination, that could cause our actual results to differ from those expressed in our forward-looking statements include, but are not limited to, those that are discussed in our Annual Report on Form 10-K filed with the SEC on April 26, 2013 under Item 1A. Risk Factors. Forward-looking statements speak only as of the date made, and neither Hancock nor its management undertakes any obligation to update or revise any forward-looking statement.

 

Our Business

 

Hancock Fabrics, Inc. is a specialty retailer committed to nurturing creativity through a complete selection of fashion and home decorating textiles, sewing accessories, needlecraft supplies and sewing machines. We are one of the largest fabric retailers in the United States, operating as of July 27, 2013, 261 stores in 37 states and an internet store under the domain name hancockfabrics.com. Our stores present a broad selection of fabrics and notions used in apparel sewing, home decorating and quilting projects. None of the information on the website referenced above is incorporated by reference into our reports filed with, or furnished to, the Securities and Exchange Commission.

 

 

Overview

 

Financial Summary:

 

●

Sales for the second quarter of 2013 were $59.1 million compared to $60.5 million for the second quarter of 2012, and comparable store sales declined 1.7% in the second quarter of 2013 following an increase of 5.0% in the second quarter of 2012. Sales for the first half of 2013 were $122.9 million compared to $124.4 million for the first half of 2012 and comparable store sales decreased 0.8% following an increase of 4.3% in the first half of 2012.

 

●

Our online sales for the second quarter of 2013, which are included in the sales number and comparable sales percentage above, decreased 6.3% to $0.8 million compared to $0.9 million for the second quarter of 2012 and declined by 7.2% to $1.7 million in the first half of 2013 compared to $1.9 million in the first half of 2012.

 

●

Gross profit for the second quarter and first half of 2013 was 44.9% and 45.2%, respectively, compared with 42.9% and 41.8% for the second quarter and first half of 2012, respectively.

 

●

Operating loss was $1.3 million for the second quarter of 2013 compared to a loss of $2.0 million in the second quarter of 2012. For the first half of 2013, operating income was $32 thousand compared to a loss of $3.2 million for the first half of 2012.

 

●

Net loss was $2.6 million, or $0.13 per basic share, in the second quarter of 2013 compared to a net loss of $3.3 million, or $0.17 per basic share in the second quarter of 2012. Net loss was $3.1 million or $0.15 per basic share in the first half of 2013 compared to a net loss of $5.7 million or $0.29 per basic share in the first half of 2012.

 

●

The amount of cash used in operating activities was $5.3 million during the first half of 2013 compared to $13.8 million of cash used in operating activities for the first half of 2012.

 

 

 

We use a number of key performance measures to evaluate our financial performance, including the following:

 

		Thirteen Weeks Ended								Twenty-six Weeks Ended
		July 27,				July 28,				July 27,				July 28,
		2013				2012				2013				2012
Net sales (in thousands)		$	59,134			$	60,455			$	122,875			$	124,399
Gross margin percentage			44.9	%			42.9	%			45.2	%			41.8	%
Number of stores
Open at end of period (1)			261				263				261				263
Comparable stores at period end (2)			259				263				259				263
Sales growth
All retail outlets			(2.2	)%			4.6	%			(1.2	)%			3.9	%
Comparable retail outlets (3)			(1.7	)%			5.0	%			(0.8	)%			4.3	%
Total store square footage at period end (in thousands)			3,692				3,747				3,692				3,747
Net sales per total square footage		$	16.02			$	16.13			$	33.28			$	33.20

 

 

(1)	Open store count does not include the internet store.

 

(2)

A new store is included in the comparable sales computation immediately upon reaching its one-year anniversary. Comparable sales computation also includes net sales derived from e-commerce. In those rare instances where stores are either expanded or down-sized, the store is not treated as a new store and, therefore, remains in the computation of comparable sales.

 

(3)	Comparable sales growth computation also includes net sales derived from e-commerce.

 

Results of Operations

 

The following table sets forth, for the periods indicated selected statement of operations data expressed as a percentage of sales. This table should be read in conjunction with the following discussion and with our Consolidated Financial Statements, including the related notes.

 

		Thirteen Weeks Ended								Twenty-six Weeks Ended
		July 27,				July 28,				July 27,				July 28,
		2013				2012				2013				2012
Net sales			100.0	%			100.0	%			100.0	%			100.0	%
Cost of goods sold			55.1				57.1				54.8				58.2
Gross profit			44.9				42.9				45.2				41.8
Selling, general and administrative expense			45.5				44.7				43.7				42.9
Depreciation and amortization			1.5				1.6				1.5				1.5
Operating (loss) income			(2.1	)			(3.4	)			0.0				(2.6	)
Interest expense, net			2.3				2.1				2.5				2.0
Loss before income taxes			(4.4	)			(5.5	)			(2.5	)			(4.6	)
Income taxes			0.0				0.0				0.0				0.0
Net loss			(4.4	)%			(5.5	)%			(2.5	)%			(4.6	)%

 

 

 

Net Sales

  

		Thirteen Weeks Ended								Twenty-six Weeks Ended
(in thousands)		July 27,				July 28,				July 27,				July 28,
		2013				2012				2013				2012
Retail comparable store base		$	57,869			$	58,836			$	120,343			$	121,245
E-Commerce			828				884				1,734				1,869
Comparable sales			58,697				59,720				122,077				123,114
New stores			437				-				798				-
Closed stores			-				735				-				1,285
Total net sales		$	59,134			$	60,455			$	122,875			$	124,399

 

The retail comparable store base above consists of the stores which were included in the comparable sales computation for the current period. The second quarter 2013 comparable sales (excluding e-commerce) decrease of 1.6% was the result of a 7.8% decrease in transaction count partially offset by a 6.2% improvement in average ticket evidencing higher sales volumes for each individual transaction. The first half 2013 retail comparable sales decline of 0.7% resulted from a 6.8% decline in transaction count partially offset by a 6.1% increase in average ticket.

 

Sales provided by our e-commerce channel decreased 6.3% and 7.2% in the second quarter and first twenty-six weeks of fiscal 2013, respectively. The sales decline can be primarily attributed to year over year adjustments to our pricing strategy.

 

Two new stores opened and four stores, where we chose not to stay in the market, have closed since the second quarter of 2012. The sales from these locations are included in net sales. During the current quarter, the Company relocated two stores and ended the quarter with 261 stores.

 

Our merchandise mix has had minimal change year over year, as reflected in the table below. 

 

		Thirteen Weeks Ended								Twenty-six Weeks Ended
		July 27,				July 28,				July 27,				July 28,
		2013				2012				2013				2012
Apparel and Craft Fabrics			42	%			40	%			42	%			40	%
Home Decorating Fabrics			14	%			14	%			13	%			14	%
Sewing Accessories			32	%			33	%			33	%			33	%
Non-Sewing Products			12	%			13	%			12	%			13	%
			100	%			100	%			100	%			100	%

 

 

 

Gross Margin

 

Costs of goods sold include:

 

●

the cost of merchandise

 

●

inventory rebates and allowances including term discounts

 

●

inventory shrinkage and valuation adjustments

 

●

freight charges

 

●

costs associated with our sourcing operations, including payroll and related benefits

 

●

costs associated with receiving, processing, and warehousing merchandise

 

The classification of these expenses varies across the retail industry.

 

Specific components of cost of goods sold for the second quarters and first twenty-six weeks of fiscal 2013 and 2012 are as follows:

 

		Thirteen Weeks Ended																Twenty-six Weeks Ended
		July 27,				% of				July 28,				% of				July 27,				% of				July 28,				% of
(dollars in thousands)		2013				Sales				2012				Sales				2013				Sales				2012				Sales
Total net sales		$	59,134				100.0	%		$	60,455				100.0	%		$	122,875				100.0	%		$	124,399				100.0	%
Merchandise cost			27,368				46.3	%			29,482				48.8	%			57,489				46.8	%			62,010				49.9	%
Freight			2,035				3.4	%			2,265				3.7	%			3,991				3.2	%			4,357				3.5	%
Sourcing and warehousing			3,190				5.4	%			2,783				4.6	%			5,877				4.8	%			6,006				4.8	%
Gross Profit		$	26,541				44.9	%		$	25,925				42.9	%		$	55,518				45.2	%		$	52,026				41.8	%

 

 

Merchandise cost declined as a percentage of sales for the second quarter of 2013 as compared to the same period of 2012 by 250 basis points. For the first twenty-six weeks of 2013 compared to the first twenty-six weeks of 2012, merchandise cost decreased by 310 basis points. This improvement resulted primarily from adjustments to our pricing strategy which we believe will allow us to be more competitive while maintaining acceptable margin levels. The other factor influencing merchandise cost for the periods discussed above is the inventory valuation reserve. Excluding the impact of the reserve merchandise cost decreased by 460 basis points and 410 basis points for the quarter and twenty-six week of 2013 as compared to 2012, respectively.

 

Freight expense is 30 basis points lower as a percentage of sales for the second quarter and twenty-six weeks of 2013 as compared to the same periods of 2012. This decrease was the result of a shift in the freight capitalized into inventory, which is affected by inventory turns and a reduction in overall freight expense.

 

Sourcing and warehousing costs for the Company vary based on both the volume of inventory received during any period and the rate at which inventory is shipped out, or inventory turns. The cost difference for the second quarter and twenty-six weeks of 2013 compared to the same periods in 2012 is primarily due to changes in inventory turns during those periods, which influence the amount of sourcing and warehousing costs capitalized into inventory.

 

In total, gross margin increased by 200 basis points in the second quarter 2013 from second quarter 2012 levels and by 340 basis points for the first twenty-six weeks of 2013 as compared to the same period of 2012.

 

 

 

 

Selling, General and Administrative Expenses

 

Selling, general and administrative expenses include:

 

●

payroll and related benefits (for our store operations, field management, and corporate functions)

 

●

advertising

 

●

general and administrative expenses

 

●

occupancy including rent, common area maintenance, taxes and insurance for our retail locations

 

●

operating costs of our headquarter facilities

 

●

other expense (income)

 

Specific components of selling, general and administrative expenses (SG&A) include:

 

		Thirteen Weeks Ended																Twenty-six Weeks Ended
		July 27,				% of				July 28,				% of				July 27,				% of				July 28,				% of
(dollars in thousands)		2013				Sales				2012				Sales				2013				Sales				2012				Sales
Retail store labor costs		$	9,376				15.9	%		$	9,218				15.2	%		$	19,072				15.5	%		$	18,830				15.1	%
Advertising			2,608				4.4	%			2,561				4.2	%			4,952				4.0	%			4,684				3.8	%
Store occupancy			7,506				12.7	%			7,549				12.5	%			15,015				12.2	%			15,045				12.1	%
Retail SG&A			4,859				8.2	%			5,520				9.1	%			9,365				7.7	%			10,240				8.2	%
Corp SG&A			2,562				4.3	%			2,162				3.7	%			5,306				4.3	%			4,562				3.7	%
Total SG&A		$	26,911				45.5	%		$	27,010				44.7	%		$	53,710				43.7	%		$	53,361				42.9	%

 

 

Retail Store Labor Costs – The Company store labor costs increased slightly during the second quarter of 2013 as compared to the same period in 2012. The increase was the result of increased benefit costs for medical claims as compared to 2012 and addition store payroll costs. For the twenty-six weeks of 2013, labor costs increased due to medical claims, partially offset by reductions in labor related taxes and payroll costs.

 

Advertising – The variance in advertising expense for the second quarter of 2013 compared to the same period of 2012 is related to additional advertising incurred for the online store. For the first twenty-six weeks of 2013 compared to the same period in 2012 the increase in advertising cost is primarily due to a postage rate increase, an expanded circulation test which affected the cost of an inserted promotional piece and additional advertising for the online store.

 

Store Occupancy – The Company’s store occupancy expense was basically unchanged as compared to the same period of the prior year for both the second quarter and twenty-six weeks of 2013. Reductions in occupancy related expenses were primarily offset by increased maintenance and repair expense.

 

Retail SG&A – The reductions in retail selling, general and administrative for the second quarter and first twenty-six weeks of 2013 compared to same periods of 2012 decreased primarily due to reductions in insurance cost, which are claims driven and reduced expenditures for store supplies.

 

 

 

Corporate SG&A – The variance in corporate selling, general and administrative expense for both periods of 2013 presented above as compared to those periods of 2012, reflect higher corporate overhead partially offset by lower capitalizable cost related to warehousing and distribution. In addition, both periods of 2012 presented included the benefit of a real estate settlement gain of $156,000 and the twenty-six week comparison includes a 2012 gain from the settlement of an insurance claim of $238,000.

 

Interest Expense

 

		Thirteen Weeks Ended																Twenty-six Weeks Ended
(dollars in thousands)		July 27,				% of				July 28,				% of				July 27,				% of				July 28,				% of
		2013				Sales				2012				Sales				2013				Sales				2012				Sales
Interest expense, net		$	1,369				2.3	%		$	1,286				2.1	%		$	3,125				2.5	%		$	2,509				2.0	%

 

 

The Company’s interest costs are driven by borrowings on our credit facilities and a small number of capital leases. Interest expense for the second quarter of 2012 includes $0.6 million of non-cash expense for note discount amortization and the twenty-six week amounts for 2013 and 2012 include $379,000 and $1.2 million, respectively. Excluding these non-cash items, interest expense was $1.4 million for the first quarter of 2013, $0.7 million for the second quarter of 2012, and $2.7 million and $1.3 million for the twenty-six weeks of 2013 and 2012, respectively.

 

Income Taxes

 

The Company did not recognize any income tax benefit during the periods of fiscal 2013 or 2012 presented in this report given the uncertainty in realizing the future benefit. As of July 27, 2013, January 26, 2013, and July 28, 2012 the Company has established a 100% valuation allowance to offset the net deferred tax assets related to net operating loss carryforwards and other book-tax timing differences.

 

Liquidity and Capital Resources

 

Hancock's primary capital requirements are for the financing of inventories and, to a lesser extent, for capital expenditures relating to store locations and its distribution facility. Funds for such purposes have historically been generated from Hancock's operations, short-term trade credit in the form of extended payment terms from suppliers for inventory purchases, and long-term borrowings from commercial lenders.

 

We anticipate that we will be able to satisfy our working capital requirements, planned capital expenditures, required cash contributions to retirement plans, and debt service requirements through the next twelve months with available cash, proceeds from cash flows from operations, short-term trade credit, borrowings under our revolving credit facility and other sources of financing.

 

Hancock’s cash flow related information as of the first twenty-six weeks of fiscal 2013 and 2012 follows:

 

		Twenty-six Weeks Ended
		July 27,				July 28,
		2013				2012
Net cash flows provided by (used in):
Operating activites		$	(5,308	)		$	(13,798	)
Investing activities			(1,790	)			(1,188	)
Financing activites			5,199				14,753

 

 

 

Operating Activities

 

Net cash from operating activities, before changes in assets and liabilities, improved by $2.8 million during the first twenty-six weeks of 2013 compared to the first twenty-six weeks of 2012. This can be primarily attributed to an improvement in gross profit which reduced the net loss as compared to the prior year. An inventory increase of $7.7 million less accounts payable support of $4.7 million and a $1.4 million decrease in pension related liabilities primarily resulted in the $5.3 million of net cash used in operating activities for 2013.

 

Investing Activities

 

Cash used for investing activities consists primarily of purchases of property and equipment. Capital expenditures during the first twenty-six weeks of 2013 consisted primarily of store fixtures for one new store, three relocated units, and maintenance capital expenditures for the Corporate headquarters and distribution center. Capital expenditures in the prior year consisted primarily of store fixtures related to five relocations reduced by the proceeds from a sale of surplus property.

 

Financing Activities

 

During the first twenty-six weeks of 2013, the seasonal build up of inventory and fixtures for four units drove up net debt obligations by $5.3 million, excluding the remainder of the discount on notes of $379 thousand, which has been fully amortized. This change in debt obligations and a reduction in the amount outstanding for capital leases produced a net increase in cash provided by financing activities of $5.2 million.

 

Long-Term Debt Obligations

 

The following should be read in conjunction with Note 4 to the Consolidated Financial Statements included in this report and Note 7 to the Company’s Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K filed with the SEC on April 26, 2013.

 

As of July 27, 2013, the Company had outstanding borrowings under the Revolver of $51.8 million and $15.0 million under the Term Loan, and amounts available to borrow of $19.6 million.

 

At July 27, 2013, Hancock had commitments under the above credit facility of $2.0 million, under documentary letters of credit, which support purchase orders for merchandise. Hancock also has standby letters of credit to guarantee payment of potential insurance claims. These letters of credit amounted to $6.3 million as of July 27, 2013.

 

As of July 27, 2013, the Company had an outstanding balance of $8.2 million on the New Notes.

 

Off-Balance Sheet Arrangements

 

Hancock has no off-balance sheet financing arrangements. Hancock leases its retail fabric store locations mainly under non-cancelable operating leases. Four of the Company’s store leases qualified for capital lease treatment and are reflected on the Company’s balance sheet. Future payments under the operating leases are excluded from the Company’s balance sheet.

 

Contractual Obligations and Commercial Commitments

 

Hancock has an arrangement within its Revolver that provides up to $20.0 million in letters of credit. At July 27, 2013, Hancock had commitments of $2.0 million on documentary letters of credit under the facility, which support purchase orders for merchandise. Hancock also has $6.3 million on standby letters of credit to guarantee payment of potential insurance claims. Hancock leases its retail fabric store locations under operating leases expiring at various dates through 2024.

 

 

 

The Company has no standby repurchase obligations or guarantees of other entities' debt.

 

For further information on our contractual obligations, please refer to Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Contractual Obligations and Commercial Commitments” as presented in our Annual Report on Form 10-K for the fiscal year ended January 26, 2013.

 

Critical Accounting Policies and Estimates

 

The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires management to adopt accounting policies and make significant judgments and estimates to develop amounts reflected and disclosed in the financial statements. In many cases, there are alternative policies or estimation techniques that could be used. We maintain a process to review the application of our accounting policies and to evaluate the appropriateness of the many estimates that are required to prepare the financial statements of a large corporation. However, even under optimal circumstances, estimates routinely require adjustment based on changing circumstances and the receipt of new or better information. There have been no significant changes to our accounting policies and estimates as discussed under Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Critical Accounting Policies and Estimates” in our Annual Report on Form 10-K for the fiscal year ended January 26, 2013.

 

Related Party Transactions

 

See Note 16 to the Company’s Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended January 26, 2013 filed with the SEC on April 26, 2013, for details regarding the related party transactions that the Company has entered into.

 

The Company has no other balances with related parties, nor has it had any other material transactions with related parties during the twenty-six week period ended July 27, 2013.

 

Effects of Inflation

 

Inflation in labor and occupancy costs could significantly affect Hancock's operations. Many of Hancock's employees are paid hourly rates related to federal and state minimum wage requirements; accordingly, any increases in those requirements will affect Hancock. In addition, payroll taxes, employee benefits, and other employee costs continue to increase, and the full impact of the recently enacted health care reform legislation will not be known for several years. Health insurance costs, in particular, continue to rise at a high rate in the United States each year, and higher employer contributions to Hancock’s pension plan could be necessary if investment returns are weak. Costs of leases for new store locations remain stable, but renewal costs of older leases continue to increase. Hancock believes the practice of maintaining adequate operating margins through a combination of price adjustments and cost controls, careful evaluation of occupancy needs, and efficient purchasing practices are the most effective tools for coping with increased costs and expenses.

 

Seasonality

 

Hancock's business is seasonal. Peak sales periods occur during the fall and early spring weeks, while the lowest sales periods occur during the summer. Working capital requirements needed to finance our operations fluctuate during the year and reach their highest levels during the second and third fiscal quarters as we increase our inventory in preparation for our peak selling season during the fourth quarter.

 

 

 

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS

 

Hancock did not hold derivative financial or commodity instruments at July 27, 2013.

 

Interest Rate Risk

 

We are exposed to financial market risks, including changes in interest rates. At our option, all loans under the Revolver and the Term Loan bear interest at either (a) a floating interest rate plus the applicable margins or (b) absent a default, a fixed interest rate for periods of one, two or three months equal to the reserve adjusted London Interbank Offered Rate, or LIBOR, plus the applicable margins. As of July 27, 2013, we had borrowings outstanding of approximately $51.8 million under the Revolver and $15.0 million under the Term Loan. If interest rates increased 100 basis points, our annual interest expense would increase approximately $668,000, assuming borrowings under the Revolver and Term Loan as existed at July 27, 2013.

 

 

In addition to the Revolver and Term Loan, as of July 27, 2013 the Company has outstanding New Notes for $8.2 million on which interest is payable quarterly on the anniversary of the issuance date of November 20, 2012. The quarterly interest is payable at LIBOR plus 12.0% on the New Notes. If interest rates increased 100 basis points, our annual interest expense would increase $82,000, assuming borrowings under the New Notes as existed at July 27, 2013.

 

Foreign Currency Risk

 

All of the Company’s business is transacted in U.S. dollars and, accordingly, devaluation of the dollar against other currencies can increase product costs although this did not significantly impact the twenty-six week period ended July 27, 2013. As of July 27, 2013, the Company had no financial instruments outstanding that were sensitive to changes in foreign currency exchange rates.

 

 

ITEM 4. CONTROLS AND PROCEDURES

 

Disclosure Controls and Procedures

 

The Company maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in the reports filed or submitted under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms and that such information is accumulated and communicated to the Company’s management, including our President and Chief Executive Officer (principal executive officer) and Executive Vice President and Chief Financial Officer (principal financial officer), as appropriate, to allow timely decisions regarding the required disclosures.

 

In connection with the preparation of this Quarterly Report on Form 10-Q as of July 27, 2013, the Company’s management, under the supervision and with the participation of the Company’s President and Chief Executive Officer and Executive Vice President and Chief Financial Officer, performed an evaluation of the effectiveness of our disclosure controls and procedures (as such term is defined in the Rules 13a-15(e) and 15d-15(e) under the Exchange Act).  Based upon this evaluation, the Company’s principal executive officer and principal financial officer concluded that the Company’s disclosure controls and procedures were effective as of July 27, 2013.

 

 

 

Changes in Internal Control Over Financial Reporting

 

There have been no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) within the fiscal quarter to which this report relates that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

 

PART II. OTHER INFORMATION

 

ITEM 1. LEGAL PROCEEDINGS

 

“Item 3. Legal Proceedings” of our Form 10-K for the fiscal year ended January 26, 2013 includes a discussion of other legal proceedings. There have been no material changes from the legal proceedings described in our Form 10-K.

 

 

ITEM 1A. RISK FACTORS

 

The risk factors listed in Part I “Item 1A. Risk Factors” in the Company’s Annual Report on Form 10-K for the fiscal year ended January 26, 2013, should be considered with the information provided elsewhere in this Quarterly Report on Form 10-Q, which could materially adversely affect the Company’s business, financial condition or results of operations.  There are no material changes to the risk factors disclosed in the Company’s Annual Report on Form 10-K for the fiscal year ended January 26, 2013.

 

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

 

In June of 2000 the Board of Directors authorized the repurchase of up to 2,000,000 shares of the Company’s Common Stock from time to time when warranted by market conditions. There have been 1,756,673 shares purchased under this authorization through July 27, 2013, and the number of shares that may yet be purchased under this authorization is 243,327. The Company did not repurchase any shares in the market during the period covered by this Quarterly Report, but did accept shares in settlement of tax withholding obligations on restricted shares.

 

The Company did not sell any unregistered equity securities during the period covered by this Quarterly Report.

 

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

 

None.

 

ITEM 4. MINE SAFETY DISCLOSURES

 

Not Applicable

 

ITEM 5. OTHER INFORMATION

 

None.

 

 

 

ITEM 6. EXHIBITS

 

3.1	Amended and Restated Certificate of Incorporation (incorporated by reference to Exhibit 99.1 to the Company’s Current Report on Form 8-K filed on July 31, 2008)

 

3.2	Amended and Restated By-Laws (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on June 8, 2012)

 

31.1	Certification of Chief Executive Officer Pursuant to Rule 13a-14(a) Under The Securities Exchange Act of 1934

 

31.2	Certification of Chief Financial Officer Pursuant to Rule 13a-14(a) Under The Securities Exchange Act of 1934

 

32.1	Certification of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant To Section 906 of The Sarbanes-Oxley Act of 2002

 

101.INS*

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101.SCH*

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101.CAL*

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101.DEF*

XBRL Taxonomy Extension Definition Linkbase Document

 

101.LAB*

XBRL Taxonomy Extension Label Linkbase Document

 

101.PRE*

XBRL Taxonomy Extension Presentation Linkbase Document

 

 

*Pursuant to Rule 406T of Regulation S-T, the Interactive Data Files on Exhibit 101 hereto are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections.

 

 

 

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

	HANCOCK FABRICS, INC.
		(Registrant)
	By:	/s/ James Brown
		James Brown
		Executive Vice President and
		Chief Financial Officer
		(Principal Financial Officer)

                      

Date: September 10, 2013

 

 

 

 

EXHIBIT INDEX

 

 

Exhibit No.

Description

 

3.1	Amended and Restated Certificate of Incorporation (incorporated by reference to Exhibit 99.1 to the Company’s Current Report on Form 8-K filed on July 31, 2008)

3.2	Amended and Restated By-Laws (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on June 8, 2012)

 

31.1	Certification of Chief Executive Officer Pursuant to Rule 13a-14(a) Under The Securities Exchange Act of 1934

 

31.2	Certification of Chief Financial Officer Pursuant to Rule 13a-14(a) Under The Securities Exchange Act of 1934

 

32.1	Certification of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant To Section 906 of The Sarbanes-Oxley Act of 2002

 

101.INS*

XBRLInstance Document

 

101.SCH*

XBRLTaxonomy Extension Schema Document

 

101.CAL*

XBRL Taxonomy Extension Calculation Linkbase Document

 

101.DEF*

XBRL Taxonomy Extension Definition Linkbase Document

 

101.LAB*

XBRL Taxonomy Extension Label Linkbase Document

 

101.PRE*

XBRL Taxonomy Extension Presentation Linkbase Document

 

 

*Pursuant to Rule 406T of Regulation S-T, the Interactive Data Files on Exhibit 101 hereto are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections.

 

 

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