Hancock Fabrics Announces Extension of CEO And President Employment Agreement Into 2018
July 21 2014 - 4:38PM
Business Wire
Hancock Fabrics, Inc. (OTC symbol: HKFI) today announced that
the Company has extended the employment agreement with Steve
Morgan, the Company’s current President and Chief Executive Officer
and a member of the Company’s Board of Directors. Additionally,
Morgan will continue to serve as a member of the Company’s Board of
Directors.
Morgan was appointed President and Chief Executive Officer in
October 2011 after having served in that role on an interim basis
since January 2011. The extension is for a four year period until
October 17, 2018, on terms that are similar to the current
contract, except with additional equity grants and different
severance terms. Per Morgan’s request, there are no changes to
salary or bonus structure.
Steven D. Scheiwe Chairman of the Board commented, “The last
three years have seen a lot of positive changes at Hancock and we
as the Board look forward to the next four years as the Company
continues to drive the operating results. Steve has devoted a lot
of time to building the management team and having consistency at
the top will help us to expand upon the improvements made thus far.
I am confident in the direction the Company is heading and am
excited for the future as Steve helps the Company forge ahead.”
Hancock Fabrics, Inc. is committed to being the inspirational
authority in fabric and sewing, serving creative enthusiasts with a
complete selection of fashion and home decorating textiles, sewing
accessories, needlecraft supplies and sewing machines. The Company
currently operates 261 retail stores in 37 states and an Internet
store at www.hancockfabrics.com.
Statements in this news release that are not historical facts
are forward-looking statements that involve risks and uncertainties
which could cause actual results to differ materially from those
contained in the forward looking statements. These risks and
uncertainties include, but are not limited to the following: our
business and operating results may be adversely affected by the
general economic conditions and the ongoing slow economic recovery;
intense competition and adverse discounting actions taken by
competitors, which could have a material effect on our operations;
our merchandising initiatives and marketing emphasis may not
provide expected results; changes in customer demands and failure
to manage inventory effectively could adversely affect our
operating results; our inability to effectively implement our
growth strategy and access funds for future growth may have an
adverse effect on sales growth; our ability to attract and retain
skilled people is important to our success; we have significant
indebtedness and interest rate increases could negatively impact
profitability; our business is dependent on the ability to
successfully access funds through capital markets and financial
institutions and any inability to access funds may limit our
ability to execute our business plan and restrict operations we
rely on for future growth; significant changes in discount rates,
mortality rates, actual investment return on pension assets,
changes in consumer demand or purchase patterns and other factors
could affect our earnings, equity, and pension contributions in
future periods; business matters encountered by our suppliers may
adversely impact our ability to meet our customers’ needs;
tightening of purchase terms by suppliers and their factories may
have a negative impact on our business; we are vulnerable to risks
associated with obtaining merchandise from foreign suppliers;
transportation industry challenges and rising fuel costs may
negatively impact our operating results; delays or interruptions in
the flow of merchandise between our suppliers and/or our
distribution center and our stores could adversely impact our
operating results; changes in the labor market and in federal,
state, or local regulations could have a negative impact on our
business; taxing authorities could disagree with our tax treatment
of certain deductions or transactions, resulting in unexpected tax
assessments; our current cash resources might not be sufficient to
meet our expected near-term cash needs; a disruption in our
information systems would negatively impact our business; a failure
to adequately maintain the security of confidential information
could have an adverse effect on our business; failure to comply
with various laws and regulations as well as litigation
developments could adversely affect our business operations and
financial performance; we may not be able to maintain or negotiate
favorable lease terms for our retail stores; changes in accounting
principles may have a negative impact on our reported results; our
results may be adversely affected by serious disruptions or
catastrophic events, including geo-political events and weather;
changes in newspaper subscription rates may result in reduced
exposure to our circular advertisement; the proposed going private
transaction may not necessarily result in the anticipated cost
savings and benefits; unexpected or unfavorable consumer responses
to our promotional or merchandising programs could materially
adversely affect our sales, results of operations, cash flow and
financial condition; new regulations related to “conflict minerals”
may force us to incur additional expenses, may make our supply
chain more complex and may result in damage to our reputation with
customers; there are risks associated with our common stock trading
on the OTC Markets, formerly known as the “Pink Sheets”; our stock
price has been volatile and could decrease in value; future sales
of our common stock could adversely affect the market price and our
future capital-raising activities could involve the issuance of
equity securities, which could result in a decline in the trading
price of shares of our common stock; we are currently contemplating
a potential reverse stock split and deregistration under the
Exchange Act which could affect the trading and liquidity of our
common stock and the availability of information about the Company
if consummated; we do not expect to pay cash dividends on shares of
our common stock for the foreseeable future and other risks and
uncertainties discussed in the Company’s Securities and Exchange
Commission (“SEC”) filings, including the risk factors set forth in
Item 1A of the Company's Annual Report on Form 10-K for the year
ended January 25, 2014 and the Company’s other reports with the
SEC. The Company undertakes no obligation to revise these
forward-looking statements to reflect events or circumstances after
the date hereof or to reflect the occurrence of unforeseen
events.
Hancock Fabrics, Inc.James B. Brown, 662-365-6112Executive Vice
President andChief Financial Officer