HANCOCK FABRICS INC - FORM 10-Q

Attached files

file	filename
EXCEL - IDEA: XBRL DOCUMENT - HANCOCK FABRICS INC	Financial_Report.xls
EX-31.1 - EXHIBIT 31.1 - HANCOCK FABRICS INC	ex31-1.htm
EX-32.1 - EXHIBIT 32.1 - HANCOCK FABRICS INC	ex32-1.htm
EX-31.2 - EXHIBIT 31.2 - HANCOCK FABRICS INC	ex31-2.htm

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 28, 2012

[ ] 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 the definitions 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 [ ] Smaller Reporting Company [X]

(do not check if a smaller reporting company)

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 25, 2012, there were 21,481,488 shares of Hancock Fabrics, Inc. $.01 par value common stock outstanding.

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 28, 2012, July 30, 2011, and January 28, 2012	3

Consolidated Statements of Operations and Comprehensive Income (Loss) for the Thirteen and Twenty-six Weeks Ended July 28, 2012 and July 30, 2011	4

Consolidated Statement of Shareholders’ Equity for the Twenty-six Weeks Ended July 28, 2012	5

Consolidated Statements of Cash Flows for the Twenty-six Weeks Ended July 28, 2012 and July 30, 2011	6

Notes to Consolidated Financial Statements	7

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	22

PART I. FINANCIAL INFORMATION

ITEM 1. CONDENSED FINANCIAL STATEMENTS

HANCOCK FABRICS, INC.

CONSOLIDATED BALANCE SHEETS

	(unaudited)
(in thousands, except for share amounts)	July 28, 2012			July 30, 2011			January 28, 2012 (1)
Assets
Current assets:
Cash and cash equivalents	$	2,415		$	2,873		$	2,648
Receivables, less allowance for doubtful accounts		3,742			3,239			3,993
Inventories, net		106,106			98,087			95,925
Prepaid expenses		3,295			2,784			3,069
Total current assets		115,558			106,983			105,635

Property and equipment, net		34,751			39,355			36,275
Goodwill		2,880			3,139			2,880
Other assets		1,456			1,973			1,597
Total assets	$	154,645		$	151,450		$	146,387

Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable	$	20,993		$	23,205		$	19,350
Accrued liabilities		15,068			14,068			16,306
Pre-petition obligations		-			725			-
Total current liabilities		36,061			37,998			35,656

Long-term debt obligations, net		65,357			43,233			49,373
Capital lease obligations		2,866			3,007			2,947
Postretirement benefits other than pensions		2,373			2,458			2,429
Pension and SERP liabilities		33,222			28,566			35,683
Other liabilities		6,048			7,304			6,428
Total liabilities		145,927			122,566			132,516

Commitments and contingencies

Shareholders' equity:
Common stock, $.01 par value; 80,000,000 shares authorized; 34,827,211, 33,491,788 and 33,914,711 issued and 21,421,631, 20,089,380 and 20,511,123 outstanding, respectively		348			335			339
Additional paid-in capital		90,377			89,850			90,013
Retained earnings		99,219			110,156			104,936
Treasury stock, at cost, 13,405,580, 13,402,408 and 13,403,588 shares held, respectively		(153,739	)		(153,736	)		(153,737	)
Accumulated other comprehensive loss		(27,487	)		(17,721	)		(27,680	)
Total shareholders' equity		8,718			28,884			13,871
Total liabilities and shareholders' equity	$	154,645		$	151,450		$	146,387

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 28, 2012.

HANCOCK FABRICS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(unaudited)

	Thirteen Weeks Ended						Twenty-six Weeks Ended
(in thousands, except per share amounts)	July 28, 2012			July 30, 2011			July 28, 2012			July 30, 2011

Sales	$	60,455		$	57,789		$	124,399		$	119,766
Cost of goods sold		34,530			32,418			72,373			67,023

Gross profit		25,925			25,371			52,026			52,743

Selling, general and administrative expense		27,010			27,084			53,361			54,424
Depreciation and amortization		936			1,029			1,873			2,066

Operating loss		(2,021	)		(2,742	)		(3,208	)		(3,747	)

Interest expense, net		1,286			1,184			2,509			2,331

Loss before income taxes		(3,307	)		(3,926	)		(5,717	)		(6,078	)
Income taxes		-			-			-			-

Net loss	$	(3,307	)	$	(3,926	)	$	(5,717	)	$	(6,078	)

Other comprehensive income (loss)
Minimum pension, SERP and OPEB liabilities, net of taxes		97			(25	)		193			(49	)
Comprehensive loss	$	(3,210	)	$	(3,951	)	$	(5,524	)	$	(6,127	)

Net loss per share, basic and diluted	$	(0.17	)	$	(0.20	)	$	(0.29	)	$	(0.31	)

Weighted average shares outstanding:
Basic and diluted		19,925			19,804			19,919			19,792

See accompanying notes to consolidated financial statements.

HANCOCK FABRICS, INC.

CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY

(unaudited)

	Common Stock					Additional Paid-in			Retained			Treasury Stock						Accumulated Other Comprehensive			Total Shareholders'
(in thousands, except for number of shares)	Shares			Amount		Capital			Earnings			Shares			Amount			Loss			Equity
Balance January 28, 2012		33,914,711		$	339	$	90,013		$	104,936			(13,403,588	)	$	(153,737	)	$	(27,680	)	$	13,871
Net loss										(5,717	)											(5,717	)
Minimum pension, SERP and OPEB liabilities, net of taxes of $0																			193			193
Issuance of restricted stock		928,900			9		(9	)														-
Cancellation of restricted stock		(16,400	)																			-
Stock compensation expense							373															373
Purchase of treasury stock													(1,992	)		(2	)					(2	)
Balance July 28, 2012		34,827,211		$	348	$	90,377		$	99,219			(13,405,580	)	$	(153,739	)	$	(27,487	)	$	8,718

See accompanying notes to consolidated financial statements.

HANCOCK FABRICS, INC.

CONSOLIDATED STATEMENT OF CASH FLOWS

(unaudited)
	Twenty-six Weeks Ended
(in thousands)	July 28, 2012			July 30, 2011
Cash flows from operating activities:
Net loss	$	(5,717	)	$	(6,078	)
Adjustments to reconcile net loss to cash flows from operating activities
Depreciation and amortization, including cost of goods sold		2,692			2,948
Amortization of deferred loan costs		123			123
Amortization of discount on notes		1,165			1,165
Stock compensation expense		373			178
Inventory valuation reserve		(658	)		(3,578	)
Other		189			150
Change in assets and liabilities
Receivables and prepaid expenses		25			283
Inventory		(9,546	)		(6,625	)
Other assets		(111	)		(234	)
Accounts payable		1,643			5,363
Accrued liabilities		(1,257	)		(851	)
Postretirement benefits other than pensions		(521	)		(373	)
Long-term pension and SERP liabilities		(1,803	)		(1,495	)
Other liabilities		(395	)		(604	)
Net cash used in operating activities		(13,798	)		(9,628	)
Cash flows from investing activities:
Additions to property and equipment		(1,429	)		(3,420	)
Proceeds from the disposition of property and equipment		241			323
Net cash used in investing activities		(1,188	)		(3,097	)
Cash flows from financing activities:
Net borrowings on revolving credit facility		14,819			13,284
Other		(66	)		(58	)
Net cash provided by financing activities		14,753			13,226
Increase in cash and cash equivalents		(233	)		501
Cash and cash equivalents:
Beginning of period		2,648			2,372
End of period	$	2,415		$	2,873
Supplemental disclosures:
Cash paid during the period for:
Interest	$	1,338		$	938
Income taxes		-			35
Non-cash activities:
Noncash change in funded status of benefit plans		193			(49	)

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 28, 2012, Hancock operated 263 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 2012 and second quarter 2011 are for the 13 week periods ended July 28, 2012 and July 30, 2011, respectively. References to twenty-six weeks 2012, first half 2012 or 2012, and twenty-six weeks 2011, first half 2011 or 2011 are for the 26 week periods ended July 28, 2012 and July 30, 2011, respectively.

Basis of Presentation

We maintain our financial records on a 52-53 week fiscal year ending on the Saturday closest to January 31.

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 28, 2012 filed with the U.S. Securities and Exchange Commission (“SEC”) on April 20, 2012. The accompanying (a) consolidated balance sheet as of January 28, 2012, which has been derived from audited financial statements, and (b) unaudited consolidated financial statements have been prepared pursuant to SEC Rule 10-01 of Regulation S-X. 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, 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 28, 2012, and July 30, 2011, and our consolidated results of operations and cash flows for the twenty-six weeks ended July 28, 2012 and July 30, 2011.

The Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States 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.

In June 2011, the Financial Accounting Standards Board (“FASB”) issued an update to Accounting Standards Codification (“ASC”) Topic 220, “Comprehensive Income,” (“ASC 220”) that eliminates the option to present components of other comprehensive income as part of the Statements of Changes in Shareholders’ Equity. This update requires that all nonowner changes in shareholders’ equity be presented either in a single continuous statement of comprehensive income or in two separate but consecutive statements. In a single continuous statement, the entity is required to present the components of net income and total net income, the components of other comprehensive income and a total for other comprehensive income, along with the total of comprehensive income in that statement. In the two-statement approach, the first statement should present total net income and its components followed consecutively by a second statement that should present total other comprehensive income, the components of other comprehensive income, and the total of comprehensive income. Regardless of whether an entity chooses to present comprehensive income in a single continuous statement or in two separate but consecutive statements, the entity is required to present on the face of the financial statements reclassification adjustments for items that are reclassified from other comprehensive income to net income in the statement(s) where the components of net income and the components of other comprehensive income are presented. In December 2011, FASB issued an update to defer the effective date for those changes related to the presentation of reclassifications of items out of accumulated other comprehensive income. While FASB continues to redeliberate whether the reclassification adjustments should be presented on the face of the financial statements, reclassifications out of accumulated other comprehensive income should be reported in accordance with presentation requirements in effect prior to FASB’s update. These updates to ASC 220 became effective for the Company on January 29, 2012. Please refer to the Consolidated Statements of Operations and Comprehensive Loss which reflects the Company’s adoption of these updates.

NOTE 2 – PROCEEDINGS UNDER CHAPTER 11 AND RELATED FINANCINGS

On March 21, 2007, the Company filed a voluntary petition for reorganization under Chapter 11 of the United States Bankruptcy Code, in the United States Bankruptcy Court for the District of Delaware. On August 1, 2008 (the “Effective Date”), the Company’s Plan of Reorganization (the “Plan”) became effective and the Company emerged from bankruptcy protection. On August 17, 2010 the Final Decree was approved by the United States Bankruptcy Court closing the bankruptcy case of the Company. On October 17, 2011 the bankruptcy case of the Company was reopened, in order to settle the one remaining prepetition claim, and closed on November 14, 2011.

As of the Effective Date, in general and except as otherwise provided under the Plan, the Company was discharged and released from all claims and interests in accordance with the Plan. The Plan provides for payment in full in cash plus interest, as applicable, or reinstatement of allowed administrative, secured, priority, and general unsecured claims in addition to the retention of ownership by holders of equity interest in the Company. Therefore, there were no impaired classes of creditors or stockholders.

FASB ASC 852, “Reorganizations” (“ASC 852”), provides financial reporting guidance for entities that are reorganizing under the United States Bankruptcy Code. The Company implemented this guidance for all periods presented. Pursuant to ASC 852, estimated claims were presented as Liabilities Subject to Compromise due to the uncertainty of the eventual settlement amount. Due to the Plan becoming effective and the claims reconciliation process being substantially complete, there is little uncertainty as to the total amount to be distributed under the Plan. Therefore, after the Effective Date, pre-petition liabilities are no longer presented as Liabilities Subject to Compromise.

There are no known unresolved prepetition obligations as of July 28, 2012 or January 28, 2012. As of July 30, 2011, there were $0.7 million of pre-petition obligations related to a professional fee claim.

NOTE 3 – EMPLOYEE BENEFIT PLANS

Retirement Plans. The determination of the obligation and expense for Hancock’s defined benefit pension retirement plan and postretirement health care benefit plan is dependent on the Company’s selection of assumptions used by actuaries in calculating those amounts. Those assumptions are described in the Company’s Annual Report on Form 10-K for the year ended January 28, 2012 and include the discount rate, the expected long-term rate of return on plan assets, and the rates of increase in compensation and health care costs, in addition to other disclosures. Actual results that differ from the assumptions are accumulated and amortized over future periods and, therefore, generally affect the recognized expense and recorded obligation in such future periods. While the Company believes that the assumptions are appropriate, significant differences in actual experience or significant changes in assumptions may materially affect the pension and other postretirement obligations and future expense.

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 28, 2012 and July 30, 2011 (in thousands):

	Retirement Plan						Postretirement Benefit Plan						Retirement Plan						Postretirement Benefit Plan
	Thirteen Weeks Ended												Twenty-six Weeks Ended
	July 28, 2012			July 30, 2011			July 28, 2012			July 30, 2011			July 28, 2012			July 30, 2011			July 28, 2012			July 30, 2011
Service costs	$	155		$	127		$	18		$	21		$	310		$	253		$	37		$	43
Interest cost		1,052			1,138			29			34			2,104			2,277			59			68
Expected return on assets		(1,044	)		(1,012	)		-			-			(2,088	)		(2,025	)		-			-
Amortization of prior service costs		-			-			(178	)		(181	)		-			-			(355	)		(362	)
Recognized net actuarial (gain) loss		329			254			(55	)		(66	)		657			507			(110	)		(132	)
Net periodic benefit cost (gain)	$	492		$	507		$	(186	)	$	(192	)	$	983		$	1,012		$	(369	)	$	(383	)

At July 28, 2012, the fair value of the assets held by the pension plan was $58.8 million reflecting a $1.4 million increase from January 28, 2012. The plan assets at July 28, 2012 include a cash contribution of $2.8 million made during 2012. Service costs consist of administrative expenses paid out of the pension trust.

NOTE 4 – 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 28, 2012, there were outstanding warrants for 9,485,600 shares with an exercise price of $1.12, stock options for 2,004,448 shares with a weighted average exercise price of $1.62 and approximately 2,245,000 restricted stock units and restricted shares which would be included in the computation of 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 28, 2012			July 30, 2011			July 28, 2012			July 30, 2011
Basic and diluted loss per share:
Net loss	$	(3,307	)	$	(3,926	)	$	(5,717	)	$	(6,078	)

Weighted average number of common shares outstanding during period		19,925,222			19,803,648			19,919,052			19,792,464

Basic and diluted loss per share	$	(0.17	)	$	(0.20	)	$	(0.29	)	$	(0.31	)

Using the Treasury Stock method, the number of shares excluded from the diluted loss per share calculation totaled approximately 13.7 and 10.9 million for the second quarters and 12.6 and 11.0 million for the twenty-six weeks of 2012 and 2011, respectively.

NOTE 5 – FAIR VALUE MEASUREMENTS AND FINANCIAL INSTRUMENTS

FASB ASC 820, Fair Value Measurements and Disclosures, defines fair value, establishes a three-level valuation hierarchy for disclosures of fair value measurement and enhances disclosure requirements for fair value measures. The three levels are defined as follows:

Level 1 - inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

Level 2 - inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instruments.

Level 3 - inputs to the valuation methodology are unobservable and significant to the fair value.

The carrying amounts of certain of the Company’s financial instruments, which are not required to be valued at fair value on a recurring basis, including cash and cash equivalents, accounts receivable, accounts payable, accrued liabilities and debt, approximate fair value due to their short maturities or the nature and terms of the obligation.

NOTE 6 – LONG-TERM DEBT OBLIGATIONS

At July 28, 2012, the Company had outstanding borrowings of $46.2 million under its revolving credit facility (the “Revolver”) with General Electric Capital Corporation, which has a maturity date of August 1, 2013. Outstanding standby letters of credit were $5.3 million, outstanding documentary letters of credit were $1.4 million and availability was $22.9 million at July 28, 2012. The Revolver is collateralized by a fully perfected first priority security interest in all real and personal, tangible and intangible assets of the Company. The Company is not subject to any financial covenants pursuant to the Revolver. The Company is, however, precluded from incurring significant debt obligations.

At the Company’s option, any portion of the outstanding borrowings under the Revolver can bear interest at LIBOR - based rates plus an applicable margin, or a floating interest rate plus the applicable margins. At July 28, 2012, the Company had $45.0 million of its outstanding borrowings at a LIBOR-based interest rate of 2.12%

In addition to the Revolver, the Company has $21.6 million of Floating Rate Secured Notes (the “Notes”) outstanding at July 28, 2012. The Notes mature on August 1, 2013, are subordinated to the Revolver, and are secured by a junior lien on all of the Company’s assets. Interest on the Notes is payable quarterly at a rate of LIBOR plus 4.5%. An additional $1.2 million of interest expense was recorded for both the first half of 2012 and 2011 related to the amortization of the discount recorded at the time of issuance of the Notes. As of July 28, 2012 the balance of the unamortized discount was $2.4 million.

NOTE 7 – 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 28, 2012.

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 28, 2012, 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 28, 2012. Our fiscal year ends on the Saturday closest to January 31 and refers to the calendar year ended immediately prior to such date, which contained the substantial majority of the fiscal period (e.g., “fiscal 2011” or “2011” refers to the fiscal year ended January 28, 2012). Fiscal years consist of 52 weeks, comprised of four 13-week fiscal quarters, unless noted otherwise. References herein to second quarter 2012 and second quarter 2011 are for the 13 week periods ended July 28, 2012 and July 30, 2011, respectively. References to twenty-six weeks 2012, first half 2012 or 2012, and twenty-six weeks 2011, first half 2011 or 2011 are for the 26 week periods ended July 28, 2012 and July 30, 2011, respectively.

Forward Looking Statements

This Quarterly Report on Form 10-Q (“Quarterly Report”) contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. 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 20, 2012 under Item 1A. Risk Factors. Other risks not presently known to us, or that we currently believe are immaterial, could also adversely affect our business, financial condition or results of operations. 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 28, 2012, 263 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 2012 were $60.5 million compared to $57.8 million for the second quarter of 2011, and comparable store sales increased 5.0% in the second quarter of 2012 following a decrease of 4.1% in the second quarter of 2011. Sales for the first half of 2012 were $124.4 million compared to $119.8 million for the first half of 2011 and comparable store sales increased 4.3% following a decrease of 2.7% in the first half of 2011.

Our online sales for the second quarter of 2012, which are included in the sales number and comparable sales percentage above, increased 8.2% to $0.9 million compared to $0.8 million for the second quarter of 2011 and increased by 1.4% to $1.9 million in the first half of 2012 compared to $1.8 million in the first half of 2011.

·	Gross margin for the second quarter and first half of 2012 was 42.9% and 41.8%, respectively, compared with 43.9% and 44.0% for the second quarter and first half of 2011, respectively.

·	Operating loss was $2.0 million and $3.2 million in the second quarter and first half of 2012, respectively compared to $2.7 million and $3.7 million in the second quarter and first half of 2011, respectively.

Net loss was $3.3 million, or $0.17 per basic share, in the second quarter of 2012 compared to a net loss of $3.9 million, or $0.20 per basic share in the second quarter of 2011. Net loss was $5.7 million or $0.29 per basic share in the first half of 2012 compared to a net loss of $6.1 million or $0.31 per basic share in the first half of 2011.

·	The amount of cash used in operating activities was $13.8 million during the first half of 2012 compared to $9.6 million of cash used in operating activities for the first half of 2011.

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

	Thirteen Weeks Ended						Twenty-six Weeks Ended
	July 28,			July 30,			July 28,			July 30,
	2012			2011			2012			2011

Sales (in thousands)	$	60,455		$	57,789		$	124,399		$	119,766

Gross margin percentage		42.9	%		43.9	%		41.8	%		44.0	%

Number of stores
Open at end of period (1)		263			265			263			265
Comparable stores at period end (2)		263			264			263			264

Sales growth
All retail outlets		4.6	%		(4.4	) %		3.9	%		(3.1	) %
Comparable retail outlets (3)		5.0	%		(4.1	) %		4.3	%		(2.7	) %

Total store square footage at period end (in thousands)		3,747			3,775			3,747			3,775

Sales per total square footage	$	16.13		$	15.31		$	33.20		$	31.73

(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. 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 28,			July 30,			July 28,			July 30,
	2012			2011			2012			2011
Sales		100.0	%		100.0	%		100.0	%		100.0	%
Cost of goods sold		57.1			56.1			58.2			56.0
Gross profit		42.9			43.9			41.8			44.0
Selling, general and administrative expense		44.7			46.9			42.9			45.4
Depreciation and amortization		1.6			1.8			1.5			1.7
Operating loss		(3.4	)		(4.8	)		(2.6	)		(3.1	)
Interest expense, net		2.1			2.0			2.0			2.0
Loss before income taxes		(5.5	)		(6.8	)		(4.6	)		(5.1	)
Income taxes		0.0			0.0			0.0			0.0
Net loss		(5.5	) %		(6.8	) %		(4.6	) %		(5.1	) %

Sales

	Thirteen Weeks Ended				Twenty-six Weeks Ended
(in thousands)	July 28,		July 30,		July 28,		July 30,
	2012		2011		2012		2011
Retail comparable store base	$	59,394	$	56,614	$	122,187	$	117,152
E-Commerce		884		817		1,869		1,843
Comparable sales		60,278		57,431		124,056		118,995
New stores		177		-		343		-
Closed stores		-		358		-		771

Total sales	$	60,455	$	57,789	$	124,399	$	119,766

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 2012 retail comparable sales increase of 4.9% resulted from a 7.1% increase in average ticket less a 2.0% decline in transaction count. Improvement in sales of home decorating fabrics offset a decline in sales of apparel and craft fabrics for the second quarter of 2012 compared to second quarter 2011. The first half 2012 retail comparable sales increase of 4.3% resulted from a 5.9% increase in average ticket less a 1.5% decline in transaction count.

Sales provided by our e-commerce channel increased 8.2% in the second quarter of 2012 compared to the same period last year and have increased 1.4% in the first half of 2012 compared to the first half of 2011.

New stores include the sales for one location prior to its 53rd week anniversary which opened during the second quarter of 2011. Since the second quarter of 2011, we closed two stores, due to lease expirations in declining markets where we chose not to extend or relocate. The sales from these locations are included in total sales.

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

	Thirteen Weeks Ended						Twenty-six Weeks Ended
	July 28,			July 30,			July 28,			July 30,
	2012			2011			2012			2011

Apparel and Craft Fabrics		40	%		41	%		40	%		42	%
Home Decorating Fabrics		14	%		13	%		14	%		14	%
Sewing Accessories		32	%		32	%		32	%		32	%
Non-Sewing Products		14	%		14	%		14	%		12	%
		100	%		100	%		100	%		100	%

Gross Profit

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 quarter and first twenty-six weeks of fiscal 2012 and 2011 are as follows:

	Thirteen Weeks Ended										Twenty-six Weeks Ended
	July 28,		% of			July 30,		% of			July 28,		% of			July 30,		% of
(dollars in thousands)	2012		Sales			2011		Sales			2012		Sales			2011		Sales

Total sales	$	60,455		100.0	%	$	57,789		100.0	%	$	124,399		100.0	%	$	119,766		100.0	%

Merchandise cost		29,482		48.8	%		27,449		47.5	%		62,010		49.9	%		56,467		47.1	%
Freight		2,265		3.7	%		2,253		3.9	%		4,357		3.5	%		4,366		3.7	%
Sourcing and warehousing		2,783		4.6	%		2,716		4.7	%		6,006		4.8	%		6,190		5.2	%

Gross Profit	$	25,925		42.9	%	$	25,371		43.9	%	$	52,026		41.8	%	$	52,743		44.0	%

Merchandise cost as a percentage of sales increased 130 basis points in the second quarter of 2012 compared to the same period of 2011 due to fluctuations in the inventory valuation reserve. Excluding the inventory valuation reserve, merchandise cost is 180 basis points less for the second quarter of 2012 than 2011. For the first half of 2012 as compared to 2011 merchandise cost increased by 270 basis points primarily due to fluctuations in the inventory valuation reserve. Excluding the change in inventory reserve for the first half of 2012 and 2011, merchandise cost increased by 30 basis points primarily as a result of sales discounting necessary to match competitor promotional activity.

Freight expense decreased 20 basis points in the second quarter 2012 compared to the second quarter 2011. Freight expense for the second quarter of 2011 included additional charges for the expanded craft assortment rollout. Freight expense declined 20 basis points for the first twenty-six weeks of 2012 as compared to the same period of 2011.

Sourcing and warehousing costs for the Company vary based on the volume of inventory received and the rate at which inventory is shipped out during any period, and inventory turns. The cost difference for the second quarter and first twenty-six weeks of 2012 compared to the same periods in 2011 is primarily due to the change in inventory turns during those periods, which influence the amount of sourcing and warehousing costs capitalized into inventory.

In total, gross margin declined by 100 basis points in the second quarter 2012 from second quarter 2011, and by 220 basis points for the first twenty-six weeks of 2012 over the first twenty-six weeks of 2011.

Selling, General & Administrative Expenses

Selling, general & administrative expenses (SG&A) 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 & administrative expenses include:

	Thirteen Weeks Ended										Twenty-six Weeks Ended
	July 28,		% of			July 30,		% of			July 28,		% of			July 30,		% of
(dollars in thousands)	2012		Sales			2011		Sales			2012		Sales			2011		Sales

Retail store labor costs	$	9,218		15.2	%	$	9,921		17.2	%	$	18,830		15.1	%	$	19,959		16.7	%
Advertising		2,561		4.2	%		2,057		3.6	%		4,684		3.8	%		3,942		3.3	%
Store occupancy		7,549		12.5	%		7,656		13.2	%		15,045		12.1	%		15,287		12.8	%
Retail SG&A		5,520		9.1	%		5,396		9.3	%		10,240		8.2	%		10,524		8.8	%
Corp SG&A		2,162		3.7	%		2,054		3.6	%		4,562		3.7	%		4,712		3.8	%

Total SG&A	$	27,010		44.7	%	$	27,084		46.9	%	$	53,361		42.9	%	$	54,424		45.4	%

Retail Store Labor Costs – The retail store labor costs were lower during the second quarter and the first twenty-six weeks of 2012, benefiting from reductions in wages and health insurance cost, and leverage from sales growth.

Advertising – The variances in advertising expense for the second quarter and first half of 2012 compared to the same periods in 2011 are attributable to a planned shift in marketing expenditures to the first half of the year. Advertising expenditures for the full year of 2012 are projected to be in line with the prior year.

Store Occupancy – The decrease in occupancy cost for the second quarter of 2012 and the first half of 2012 compared to the same periods of 2011 is related to additional maintenance expenditures incurred in 2011 to improve the appearance and operating standard for the retail store units. Real estate related costs have remained constant year over year as we’ve made significant efforts to restructure rents as a result of the current commercial real estate market. These efforts in some cases resulted in rent reductions, concessions on future escalations, and term extensions.

Retail SG&A – Insurance claims and inventory service costs drove the expense increase over 2011 for the second quarter of 2012, offsetting a reduction in housekeeping. For the first half of 2012, retail SG&A decreased due to reductions in housekeeping, credit card fees and travel cost, partially offset by increased insurance and inventory service costs.

Corporate SG&A –Corporate overhead increased over the second quarter of 2011 due to increased stock compensation expense, compensation related accruals, and corporate office expenses. Corporate SG&A decreased due to legal settlements which offset increased stock compensation expense and compensation accruals for the first half of 2012 compared to the first half of 2011.

Interest Expense, Net

	Thirteen Weeks Ended										Twenty-six Weeks Ended
(dollars in thousands)	July 28,		% of			July 30,		% of			July 28,		% of			July 30,		% of
	2012		Sales			2011		Sales			2012		Sales			2011		Sales
Interest expense, net	$	1,286		2.1	%	$	1,184		2.0	%	$	2,509		2.0	%	$	2,331		2.0	%

The Company’s interest costs are driven by borrowings on our credit facilities and a small number of capital leases. Our current credit facilities consist of both an asset-based facility and a subordinated-debt facility. Interest expense for each of the second quarters and the first twenty-six weeks of 2012 and 2011 included note discount amortization of $0.6 million and $1.2 million, respectively. Excluding this non-cash item, interest expense was 1.2% of sales for the second quarter and 1.1% of sales for the first half of 2012.

Income Taxes

The Company did not recognize any income tax benefit during the second quarter of 2012 or 2011 or the first half of 2012 or 2011 given the uncertainty in realizing the future benefit. As of July 28, 2012, January 28, 2012 and July 30, 2011 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 the Company’s 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 borrowings from commercial lenders.

We anticipate that we will be able to satisfy our working capital requirements, required cash contributions to the pension retirement plan, planned capital expenditures 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. We expect to generate adequate cash flow from operating activities to sustain current levels of operations.

Hancock’s cash flow related information for the first twenty-six weeks of fiscal 2012 and 2011 follows (in thousands):

	Twenty-six Weeks Ended
	July 28,			July 30,
	2012			2011

Net cash flows provided by (used in):
Operating activites	$	(13,798	)	$	(9,628	)
Investing activities		(1,188	)		(3,097	)
Financing activites		14,753			13,226

Operating Activities

Net cash from operating activities, before changes in assets and liabilities, improved by $3.3 million during the first twenty-six weeks of 2012 compared to the first twenty-six weeks of 2011. This improvement can be primarily attributed to the change in the inventory valuation reserve estimate which reduces slow-moving or obsolete inventory to its net realizable value. The age of the inventory in conjunction with the anticipated sell through is utilized to determine the reserve amount. An increase in inventory of $2.9 million and reduction in accounts payable support of $3.7 million drove the $4.2 million increase in net cash used in operating activities for 2012 over 2011.

Investing Activities

Cash used for investing activities consists primarily of purchases and sales of property and equipment. Capital expenditures during the first twenty-six weeks 2012 were $1.2 million compared to $3.1 million for the first twenty-six weeks of 2011. Expenditures for 2012 consist primarily of fixtures for five relocations to our new prototype store, compared to fixtures for one new store, three relocations and the expanded craft assortment introduced in 42 locations during the first twenty-six weeks of 2011.

Financing Activities

Borrowings from the Revolver of $14.8 million were used to provide working capital and fund capital expenditures during the first twenty-six weeks of 2012 compared to borrowings from the Revolver of $13.3 million during the first twenty-six weeks of 2011.

Credit Facilities

The following should be read in conjunction with Note 6 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 20, 2012.

As of July 28, 2012, the Company had outstanding borrowings under the Revolver of $46.2 million and outstanding letters of credit of $6.7 million. Additional amounts available to borrow at that time were $22.9 million.

As of July 28, 2012, the balance of the Company’s Floating Rate Secured Notes was $21.6 million and the unamortized discount on Notes Payable related to warrants issued was $2.4 million.

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. Future payments under the operating leases are appropriately excluded from the Company’s balance sheet. Capital lease obligations are, however, reflected on 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 28, 2012, Hancock had commitments of $1.4 million on documentary letters of credit under the facility, which support purchase orders for merchandise. Hancock also has $5.3 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 28, 2012.

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 in our Annual Report on Form 10-K for the fiscal year ended January 28, 2012.

Related Party Transactions

See Note 16 to the Company’s Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K filed with the SEC on April 20, 2012, for details regarding the sole related party transaction 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 either of the twenty-six week periods ended July 28, 2012 and July 30, 2011.

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 product 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 28, 2012.

Interest Rate Risk

The Company is exposed to financial market risks, including changes in interest rates. At the Company's option, all loans under the Revolver 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 28, 2012, the Company had borrowings outstanding of approximately $46.2 million under the Revolver. If interest rates increased 100 basis points, the Company’s annual interest expense would increase approximately $462,000, assuming borrowings under the Revolver of $46.2 million as existed at July 28, 2012.

In addition to the Revolver, the Company issued $20.0 million of Floating Rate Secured Notes (the “Notes”) on August 1, 2008. Interest on the Notes is payable quarterly at LIBOR plus 4.50%. Interest for the first four quarters was paid by the issuance of additional notes at a rate equal to LIBOR plus 5.50%, which resulted in the capitalization of $1.6 million into the balance.

The Company will pay the subsequent interest payments on the Notes in cash, the next payment date being November 1, 2012. If interest rates increased 100 basis points, the Company’s annual interest expense would increase $216,000, based on balance of the Notes of $21.6 million at July 28, 2012.

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 risk did not significantly impact the twenty-six week period ended July 28, 2012. As of July 28, 2012 the Company had no financial instruments outstanding that were sensitive to changes in foreign currency 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 Securities Exchange Act of 1934, as amended (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 28, 2012, 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 28, 2012.

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 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 28, 2012, should be considered with the information provided elsewhere in this Quarterly Report on Form 10-Q, which could materially adversely affect the business, financial condition or results of operations. There have been no material changes to the risk factors as previously disclosed in such Annual Report on Form 10-K.

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 1,756,579 shares purchased under this authorization through July 28, 2012, and the number of shares that may yet be purchased under this authorization is 243,421. 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

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 Report on Form 8-K filed 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

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, 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/ Robert W. Driskell

Robert W. Driskell

Executive Vice President and

Chief Financial Officer

(Principal Financial Officer)

Date: September 7, 2012

EXHIBIT INDEX

Exhibit No.		Description

3.1		Amended and Restated Certificate of Incorporation (incorporated by reference to Exhibit 99.1 to the Company’s Report on Form 8-K filed 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		XBRL Instance Document

101 SCH		XBRL Taxonomy 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.

Attached files

HANCOCK FABRICS INC Reports

Also read