Note 1 - Basis of Presentation | 9 Months Ended |
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Oct. 01, 2011 | |
| Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block] |
Note
1 – Basis of Presentation
The
accompanying unaudited condensed consolidated financial
statements of Hampshire Group, Limited and its subsidiaries
(the “Company” or “Hampshire”) have
been prepared in accordance with accounting principles
generally accepted in the United States of America
(“GAAP”) for interim financial information and
according to instructions from the United States Securities
and Exchange Commission (“SEC”) for Form 10-Q and
Article 10 of Regulation S-X. Accordingly, they do
not include all of the information and notes required by GAAP
for complete financial statements and should be read in
conjunction with the audited financial statements included in
the Company’s Annual Report on Form 10-K (“Form
10-K”) for the fiscal year ended December 31,
2010.
The
information included herein is not necessarily indicative of
the annual results that may be expected for the year ending
December 31, 2011, but does reflect all adjustments
(which are of a normal and recurring nature) considered, in
the opinion of management, necessary for a fair presentation
of the results for the interim periods presented. The
preparation of financial statements in accordance with GAAP
requires management to make estimates and assumptions that
affect the amounts reported in the financial statements.
Actual results may differ from these estimates and
assumptions. In addition, the Company’s revenues are
highly seasonal, causing significant fluctuations in
financial results for interim periods. The Company sells
apparel throughout the year but more than 90% of its annual
sales historically occur in the third and fourth quarters,
primarily due to the large concentration of sweaters in the
product mix and seasonality of the apparel industry in
general.
In
May 2011, the Company sold certain assets of its
women’s businesses, Hampshire Designers, Inc.
(“Hampshire Designers”) and Item-Eyes, Inc.
(“Item-Eyes”), in two separate transactions. In
accordance with GAAP, the financial position and results from
operations for the women’s businesses have been
presented as discontinued operations. Certain
reclassifications have been made to prior period amounts to
conform to the current period financial statement
presentation. Continuing operations presented for the three
and nine-month periods ended October 1, 2011 consists of
wholly-owned subsidiaries, Hampshire Brands, Inc and Rio
Garment S.A. (“Rio”). See Note 2 – Acquisitions
and Note 8 – Dispositions and
Discontinued Operations.
The
Company has evaluated subsequent events from the date of the
unaudited condensed consolidated balance sheet through the
date the financial statements were issued. During this
period, no material recognizable subsequent events were
identified, except as disclosed in Note 6 – Commitments and
Contingencies and the amendment to the Company’s
Certificate of Incorporation filed October 18, 2011 to
increase the authorized shares of the
Company's common stock from 10,000,000 to
13,333,333.
Special
Costs
In
2006, the Audit Committee (the “Audit Committee”)
of the Board of Directors (the “Board”) commenced
an investigation related to members of the Company’s
former management (the “Audit Committee
Investigation”). The Company reported certain costs as
Special
Costs including, but not limited to, the costs
associated with the Audit Committee Investigation. All
litigation related to the Audit Committee Investigation was
resolved, and thus, the Company has not incurred significant
expenses associated with the Audit Committee Investigation
since August 2010 and does not expect to do so going
forward.
Accounting
Standard Updates
The
following accounting pronouncements have been issued and will
be effective for the Company in or after fiscal year
2011:
In
September 2011, the FASB issued ASU 2011-08, Intangibles-Goodwill
and Other (Topic 350) Testing Goodwill for
Impairment (“ASU 2011-08”). ASU 2011-08
gives entities testing goodwill for impairment the option
of performing a qualitative assessment before calculating
the fair value of a reporting unit in step 1 of the
goodwill impairment test. For those entities that
determine, on the basis of qualitative factors, that the
fair value of a reporting unit is more likely than not less
than the carrying amount, an entity is required to perform
step 2 of the goodwill impairment test. ASU 2011-08 is
effective for fiscal years, and interim periods within
those years, beginning after December 15, 2011. ASU
2011-08 will be effective for the Company’s fiscal
year ending December 31, 2012 and the Company is currently
evaluating the impact, if any, to the Company’s
consolidated financial statements.
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