##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
  þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended June 28, 2008
 OR
 o
    
    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: 000-20201
 HAMPSHIRE GROUP, LIMITED
 (Exact name of registrant as specified in its charter)
 Delaware
    
    06-0967107(State or other jurisdiction of
    
    (I.R.S. Employerincorporation or organization)
    
    Identification No.)1924 Pearman Dairy Road, Anderson, SC
    
    29625-1303(Address of principal executive offices)
    
    (Zip Code)
 (864) 231-1200
(Registrants telephone number, including area code)
 þ o
  Large accelerated filer o
    
    Accelerated filer þ
    
    Non-accelerated filer o
    
    Smaller reporting company o(Do not check if smaller reporting company)
 o þ




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##### 



HAMPSHIRE GROUP, LIMITED
 QUARTERLY REPORT ON FORM 10-Q
 For the Quarterly Period Ended June 28, 2008
 SAFE HARBOR STATEMENT
    
    
    iiPART I-FINANICIAL INFORMATION
    
    
    1Item 1. Financial Statements
    
    
    1Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    12Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    21Item 4. Controls and Procedures
    
    
    21PART II-OTHER INFORMATION
    
    
    22Item 1. Legal Proceedings
    
    
    22Item 1A. Risk Factors
    
    
    22Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    22Item 6. Exhibits
    
    
    23Exhibit 31.1Exhibit 31.2Exhibit 32.1Exhibit 32.2
   i




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SAFE HARBOR STATEMENT
UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
  Risk
Factors
    ii




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##### Table of Contents



PART I-FINANICIAL INFORMATION
 
 Item 1. Financial Statements.
 Hampshire Group, Limited and Subsidiaries
Unaudited Condensed Consolidated Balance Sheets
 (In thousands, except par value and shares)
    
    June 28, 2008
    
    
    December 31, 2007Current assets:Cash and cash equivalents
    
    $
    48,270
    
    
    $
    48,431Accounts receivable, net
    
    
    16,172
    
    
    
    26,535Other receivables
    
    
    3,961
    
    
    
    7,384Inventories, net
    
    
    28,556
    
    
    
    17,462Deferred tax assets, net
    
    
    12,006
    
    
    
    9,485Other current assets
    
    
    2,657
    
    
    
    2,144Assets of discontinued operations
    
    
    66
    
    
    
    20,408Total current assets
    
    
    111,688
    
    
    
    131,849Fixed assets, net
    
    
    13,693
    
    
    
    8,060Goodwill
    
    
    8,162
    
    
    
    8,162Deferred tax assets, net
    
    
    6,014
    
    
    
    4,231Other assets
    
    
    4,965
    
    
    
    4,166Total assets
    
    $
    144,522
    
    
    $
    156,468Current liabilities:Current portion of long-term debt
    
    $
    29
    
    
    $
    41Accounts payable
    
    
    17,044
    
    
    
    15,062Accrued expenses and other liabilities
    
    
    12,766
    
    
    
    14,871Liabilities of discontinued operations
    
    
    1,919
    
    
    
    6,418Total current liabilities
    
    
    31,758
    
    
    
    36,392Long-term debt less current portion
    
    
    19
    
    
    
    33Other long-term liabilities
    
    
    14,912
    
    
    
    13,499Total liabilities
    
    
    46,689
    
    
    
    49,924Commitments and contingencies (Notes 5 and 9)
    
    
    
    
    
    
    Stockholders equity:Preferred
stock, $0.10 par value, 1,000,000 shares authorized; none issued
    
    
    
    
    
    
    Common stock, $0.10 par value, 10,000,000 shares authorized; 8,243,784
shares issued at June 28, 2008 and December 31, 2007
    
    
    824
    
    
    
    824Additional paid-in capital
    
    
    36,062
    
    
    
    35,977Retained earnings
    
    
    69,393
    
    
    
    78,189Treasury
stock, 384,279 shares at cost at June 28, 2008 and December 31, 2007
    
    
    (8,446
    )
    
    
    (8,446
    )Total stockholders equity
    
    
    97,833
    
    
    
    106,544Total liabilities and stockholders equity
    
    $
    144,522
    
    
    $
    156,468
   1




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##### Table of Contents



Hampshire Group, Limited and Subsidiaries
Unaudited Condensed Consolidated Statements of Operations
 Three Months Ended
    
    
    Six Months Ended(In thousands, except per share data)
    
    June 28, 2008
    
    
    June 30, 2007
    
    
    June 28, 2008
    
    
    June 30, 2007Net sales
    
    $
    32,897
    
    
    $
    32,709
    
    
    $
    72,660
    
    
    $
    73,277Cost of goods sold
    
    
    23,912
    
    
    
    24,499
    
    
    
    54,340
    
    
    
    54,701Gross profit
    
    
    8,985
    
    
    
    8,210
    
    
    
    18,320
    
    
    
    18,576Selling, general, and administrative expenses
    
    
    13,807
    
    
    
    11,872
    
    
    
    28,513
    
    
    
    25,964Special costs
    
    
    490
    
    
    
    1,746
    
    
    
    968
    
    
    
    3,847Loss from operations
    
    
    (5,312
    )
    
    
    (5,408
    )
    
    
    (11,161
    )
    
    
    (11,235
    )Other income (expense):Interest income
    
    
    309
    
    
    
    662
    
    
    
    766
    
    
    
    1,476Interest expense
    
    
    (38
    )
    
    
    (10
    )
    
    
    (76
    )
    
    
    (19
    )Other, net
    
    
    18
    
    
    
    102
    
    
    
    (7
    )
    
    
    180Loss from continuing operations before income taxes
    
    
    (5,023
    )
    
    
    (4,654
    )
    
    
    (10,478
    )
    
    
    (9,598
    )Income tax benefit
    
    
    1,902
    
    
    
    3,256
    
    
    
    4,023
    
    
    
    5,246Loss from continuing operations
    
    
    (3,121
    )
    
    
    (1,398
    )
    
    
    (6,455
    )
    
    
    (4,352
    )Loss from discontinued operations, net of taxes
    
    
    (1,898
    )
    
    
    (856
    )
    
    
    (2,341
    )
    
    
    (1,669
    )Net loss
    
    $
    (5,019
    )
    
    $
    (2,254
    )
    
    $
    (8,796
    )
    
    $
    (6,021
    )Basic loss per share:Loss from continuing operations
    
    $
    (0.40
    )
    
    $
    (0.18
    )
    
    $
    (0.82
    )
    
    $
    (0.56
    )Loss from discontinued operations, net of taxes
    
    
    (0.24
    )
    
    
    (0.11
    )
    
    
    (0.30
    )
    
    
    (0.21
    )Net loss
    
    $
    (0.64
    )
    
    $
    (0.29
    )
    
    $
    (1.12
    )
    
    $
    (0.77
    )Diluted loss per share:Loss from continuing operations
    
    $
    (0.40
    )
    
    $
    (0.18
    )
    
    $
    (0.82
    )
    
    $
    (0.56
    )Loss from discontinued operations, net of taxes
    
    
    (0.24
    )
    
    
    (0.11
    )
    
    
    (0.30
    )
    
    
    (0.21
    )Net loss
    
    $
    (0.64
    )
    
    $
    (0.29
    )
    
    $
    (1.12
    )
    
    $
    (0.77
    )Weighted average number of shares outstanding:Basic weighted average number of common shares outstanding
    
    
    7,860
    
    
    
    7,860
    
    
    
    7,860
    
    
    
    7,860Diluted weighted average number of common shares outstanding
    
    
    7,860
    
    
    
    7,860
    
    
    
    7,860
    
    
    
    7,860
   2




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##### Table of Contents



Hampshire Group, Limited and Subsidiaries
Unaudited Condensed Consolidated Statement of Stockholders Equity
 Additional
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    TotalCommon Stock
    
    
    Paid-In
    
    
    Retained
    
    
    Treasury Stock
    
    
    Stockholders(In thousands, except shares)
    
    Shares
    
    
    Amount
    
    
    Capital
    
    
    Earnings
    
    
    Shares
    
    
    Amount
    
    
    EquityBalance at December 31, 2007
    
    
    8,243,784
    
    
    $
    824
    
    
    $
    35,977
    
    
    $
    78,189
    
    
    
    384,279
    
    
    $
    (8,446
    )
    
    $
    106,544Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (8,796
    )
    
    
    
    
    
    
    
    
    
    
    (8,796
    )Tax benefits from
share-based payment
arrangements
    
    
    
    
    
    
    
    
    
    
    85
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    85Balance at June 28, 2008
    
    
    8,243,784
    
    
    $
    824
    
    
    $
    36,062
    
    
    $
    69,393
    
    
    
    384,279
    
    
    $
    (8,446
    )
    
    $
    97,833
   3




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##### Table of Contents



Hampshire Group, Limited and Subsidiaries
Unaudited Condensed Consolidated Statements of Cash Flows
 Six Months Ended(In thousands)
    
    June 28, 2008
    
    
    June 30, 2007Cash flows from operating activities:Net loss
    
    $
    (8,796
    )
    
    $
    (6,021
    )Less: Loss from discontinued operations, net of taxes
    
    
    (2,341
    )
    
    
    (1,669
    )Loss from continuing operations
    
    
    (6,455
    )
    
    
    (4,352
    )Adjustments to reconcile loss from continuing operations to net
cash provided by (used in) operating activities:Depreciation and amortization
    
    
    832
    
    
    
    416Loss (gain) on sale of fixed assets
    
    
    127
    
    
    
    (75
    )Deferred income tax provision (benefit)
    
    
    (4,305
    )
    
    
    (721
    )Deferred compensation expense, net
    
    
    100
    
    
    
    8Excess tax benefits from share-based payment arrangements
    
    
    (85
    )
    
    
    (227
    )Changes in operating assets and liabilities:Receivables, net
    
    
    13,765
    
    
    
    4,748Inventories, net
    
    
    (11,095
    )
    
    
    (30,214
    )Other assets
    
    
    (845
    )
    
    
    74Liabilities
    
    
    3,852
    
    
    
    1,968Net cash provided by (used in) continuing operating activities
    
    
    (4,109
    )
    
    
    (28,375
    )Net cash provided by (used in) discontinued operations
    
    
    9,758
    
    
    
    (3,226
    )Net cash provided by (used in) operating activities
    
    
    5,649
    
    
    
    (31,601
    )Cash flows from investing activities:Capital expenditures
    
    
    (9,101
    )
    
    
    (661
    )Proceeds from sales of fixed assets
    
    
    
    
    
    
    123Net cash provided by (used in) continuing investing activities
    
    
    (9,101
    )
    
    
    (538
    )Net cash provided by (used in) discontinued operations
    
    
    3,724
    
    
    
    (272
    )Net cash provided by (used in) investing activities
    
    
    (5,377
    )
    
    
    (810
    )Cash flows from financing activities:Repayment of long-term debt
    
    
    (26
    )
    
    
    (34
    )Excess tax benefits from share-based payment arrangements
    
    
    85
    
    
    
    227Capitalized credit facility costs
    
    
    (492
    )
    
    
    Net cash provided by (used in) financing activities
    
    
    (433
    )
    
    
    193Net increase (decrease) in cash and cash equivalents
    
    
    (161
    )
    
    
    (32,218
    )Cash and cash equivalents at beginning of period
    
    
    48,431
    
    
    
    70,210Cash and cash equivalents at end of period
    
    $
    48,270
    
    
    $
    37,992
   4




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Note 1  Basis of Presentation
   Special Costs
   Commitments and
Contingencies Subsequent Events
  Stock Options
  Presentation of Prior Years Data
   5




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##### Table of Contents



Recent Accounting Standards
    Level 1
 Level 2
 Level 3
  Fair Value Measurements at Reporting Date UsingQuoted Pricesin Active
    
    
    SignificantMarkets for
    
    
    Other
    
    
    SignificantIdentical
    
    
    Observable
    
    
    Unobservable(In thousands)
    
    Assets
    
    
    Inputs
    
    
    InputsDescription
    
    (Level 1)
    
    
    (Level 2)
    
    
    (Level 3)
    
    
    June 28, 2008Cash and cash equivalents
    
    $
    48,270
    
    
    $
    
    
    
    $
    
    
    
    $
    48,270
    6




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Note 2  Inventories
  (In thousands)
    
    June 28, 2008
    
    
    December 31, 2007Total finished goods at cost
    
    $
    32,302
    
    
    $
    20,427Less: reserves
    
    
    (3,746
    )
    
    
    (2,965
    )Inventories, net
    
    $
    28,556
    
    
    $
    17,462
 Note 3  Revolving Credit Facility
      Dispositions and Discontinued
Operations
  Subsequent Events
  7




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##### Table of Contents



Note 4  Loss Per Share
  Numerator
    
    
    Denominator
    
    
    Per Share(In thousands, except per share data)
    
    Income (Loss)
    
    
    Shares
    
    
    AmountThree months ended June 28, 2008:Basic loss from continuing operations
    
    $
    (3,121
    )
    
    
    7,860
    
    
    $
    (0.40
    )Effect of dilutive securities:Stock options
    
    
    
    
    
    
    
    
    
    
    Diluted loss from continuing operations
    
    $
    (3,121
    )
    
    
    7,860
    
    
    $
    (0.40
    )Three months ended June 30, 2007:Basic loss from continuing operations
    
    $
    (1,398
    )
    
    
    7,860
    
    
    $
    (0.18
    )Effect of dilutive securities:Stock options
    
    
    
    
    
    
    
    
    
    
    Diluted loss from continuing operations
    
    $
    (1,398
    )
    
    
    7,860
    
    
    $
    (0.18
    )Six months ended June 28, 2008:Basic loss from continuing operations
    
    $
    (6,455
    )
    
    
    7,860
    
    
    $
    (0.82
    )Effect of dilutive securities:Stock options
    
    
    
    
    
    
    
    
    
    
    Diluted loss from continuing operations
    
    $
    (6,455
    )
    
    
    7,860
    
    
    $
    (0.82
    )Six months ended June 30, 2007:Basic loss from continuing operations
    
    $
    (4,352
    )
    
    
    7,860
    
    
    $
    (0.56
    )Effect of dilutive securities:Stock options
    
    
    
    
    
    
    
    
    
    
    Diluted loss from continuing operations
    
    $
    (4,352
    )
    
    
    7,860
    
    
    $
    (0.56
    )
  Note 5  Commitments and Contingencies
     8




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##### Table of Contents



Subsequent
Events
 Note 6  Taxes
    Note 7  Dispositions and Discontinued Operations
         9




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##### Table of Contents



(In thousands)
    
    June 28, 2008
    
    
    December 31, 2007Accounts receivable, net
    
    $
    
    
    
    $
    13,504Other receivables
    
    
    12
    
    
    
    264Inventories, net
    
    
    
    
    
    
    4,664Other current assets
    
    
    14
    
    
    
    377Fixed assets, net
    
    
    15
    
    
    
    284Intangible assets, net
    
    
    
    
    
    
    1,270Other assets
    
    
    25
    
    
    
    45Assets of discontinued operations
    
    $
    66
    
    
    $
    20,408Accounts payable
    
    $
    1,308
    
    
    $
    3,166Accrued expenses and other liabilities
    
    
    299
    
    
    
    3,198Other long-term liabilities
    
    
    312
    
    
    
    54Liabilities of discontinued operations
    
    $
    1,919
    
    
    $
    6,418
  Three Months Ended
    
    
    Six Months EndedJune 28,
    
    
    June 30,
    
    
    June 28,
    
    
    June 30,(In thousands)
    
    2008
    
    
    2007
    
    
    2008
    
    
    2007Net sales
    
    $
    1,531
    
    
    $
    16,649
    
    
    $
    16,607
    
    
    $
    26,959Gross profit
    
    $
    350
    
    
    $
    2,932
    
    
    $
    4,077
    
    
    $
    6,455Loss on discontinued
operations before
income taxes
    
    $
    (950
    )
    
    $
    (1,523
    )
    
    $
    (312
    )
    
    $
    (2,969
    )Loss on sale of business
    
    
    (2,252
    )
    
    
    
    
    
    
    (3,652
    )
    
    
    Income tax benefit
    
    
    1,304
    
    
    
    667
    
    
    
    1,623
    
    
    
    1,300Loss from discontinued
operations, net of taxes
    
    $
    (1,898
    )
    
    $
    (856
    )
    
    $
    (2,341
    )
    
    $
    (1,669
    )
 Note 8  Restructuring and Cost Reduction Plan
   Three Months Ended(In thousands)
    
    June 28, 2008Personnel reductions
    
    $
    432Other costs
    
    
    9Total
    
    $
    441
  10




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##### Table of Contents



Three Months Ended June 28, 2008Personnel
    
    
    Other(In thousands)
    
    Reductions
    
    
    Costs
    
    
    TotalBeginning of period
    
    $
    
    
    
    $
    
    
    
    $
    Costs charged to expense
    
    
    432
    
    
    
    9
    
    
    
    441Costs paid or settled
    
    
    (298
    )
    
    
    (9
    )
    
    
    (307
    )End of period
    
    $
    134
    
    
    $
    
    
    
    $
    134
  Note 9  Subsequent Events
   Credit Agreement Amendment
   11




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##### Table of Contents



Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations.
 The following discussion contains statements that are forward looking. These statements are based
on expectations and assumptions that are subject to risks and uncertainties. Actual results could
differ materially because of factors discussed elsewhere in this report. This discussion should be
read in conjunction with the discussion of forward-looking statements, the financial statements,
and the related notes and the other statistical information included in this report.
 DISCUSSION OF FORWARD-LOOKING STATEMENTS
 Risk
Factors
 
    
    Decreases in business from or the loss of any one of our key customers;
 
    
    Financial instability experienced by our customers;
 
    
    Loss of or inability to renew certain licenses;
 
    
    Change in consumer preferences and fashion trends, which could negatively affect
acceptance of our products by retailers and consumers;
 
    
    Use of foreign suppliers for raw materials and manufacture of our products;
 
    
    Failure of our manufacturers to use acceptable ethical business practices;
 
    
    Failure to deliver quality products in a timely manner;
 
    
    Problems with our distribution system and our ability to deliver products;
 
    
    Labor disruptions at port, our suppliers, manufacturers, or distribution facilities;
 
    
    Chargebacks and margin support payments;
 
    
    Failure, inadequacy, interruption, or security lapse of our information technology;
 
    
    Failure to compete successfully in a highly competitive and fragmented industry;
 
    
    Challenges integrating any business we may acquire;
 
    
    Unanticipated expenses beyond the amount reserved on our balance sheet or
unanticipated cash payments related to the ultimate resolution of income and other
possible tax liabilities;
 
    
    Future defaults under our credit facility;
 
    
    Loss of certain key personnel which could negatively impact our ability to manage
our business;
 
    
    Investigations by the SEC and the United States Attorney of the Southern District of
New York (U.S. Attorneys Office) related to prior managements actions; and
 
    
    Potential future restatements of our prior financial statements.
   12




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OVERVIEW
        Legal and Compliance Matters
     13




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##### Table of Contents



Special Costs
  Legal and Compliance Matters
  Amended and Restated Revolving Credit Facility
    14




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##### Table of Contents



Dispositions, Discontinued Operations, and
Related Matters
  Dispositions, Discontinued Operations, and Related Matters
       15




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##### Table of Contents



(In thousands)
    
    June 28, 2008
    
    
    December 31, 2007Accounts receivable, net
    
    $
    
    
    
    $
    13,504Other receivables
    
    
    12
    
    
    
    264Inventories, net
    
    
    
    
    
    
    4,664Other current assets
    
    
    14
    
    
    
    377Fixed assets, net
    
    
    15
    
    
    
    284Intangible assets, net
    
    
    
    
    
    
    1,270Other assets
    
    
    25
    
    
    
    45Assets of discontinued operations
    
    $
    66
    
    
    $
    20,408Accounts payable
    
    $
    1,308
    
    
    $
    3,166Accrued expenses and other liabilities
    
    
    299
    
    
    
    3,198Other long-term liabilities
    
    
    312
    
    
    
    54Liabilities of discontinued
operations
    
    $
    1,919
    
    
    $
    6,418
  Three Months Ended
    
    
    Six Months EndedJune 28,
    
    
    June 30,
    
    
    June 28,
    
    
    June 30,(In thousands)
    
    2008
    
    
    2007
    
    
    2008
    
    
    2007Net sales
    
    $
    1,531
    
    
    $
    16,649
    
    
    $
    16,607
    
    
    $
    26,959Gross profit
    
    $
    350
    
    
    $
    2,932
    
    
    $
    4,077
    
    
    $
    6,455Loss on discontinued operations before income
taxes
    
    $
    (950
    )
    
    $
    (1,523
    )
    
    $
    (312
    )
    
    $
    (2,969
    )Loss on sale of business
    
    
    (2,252
    )
    
    
    
    
    
    
    (3,652
    )
    
    
    Income tax benefit
    
    
    1,304
    
    
    
    667
    
    
    
    1,623
    
    
    
    1,300Loss from discontinued operations, net of taxes
    
    $
    (1,898
    )
    
    $
    (856
    )
    
    $
    (2,341
    )
    
    $
    (1,669
    )
 Restructuring and Cost Reduction Plan
   16




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##### Table of Contents



Three Months Ended(In thousands)
    
    June 28, 2008Personnel reductions
    
    $
    432Other costs
    
    
    9Total
    
    $
    441
  Three Months Ended June 28, 2008Personnel
    
    
    Other(In thousands)
    
    Reductions
    
    
    Costs
    
    
    TotalBeginning of period
    
    $
    
    
    
    $
    
    
    
    $
    Costs charged to expense
    
    
    432
    
    
    
    9
    
    
    
    441Costs paid or settled
    
    
    (298
    )
    
    
    (9
    )
    
    
    (307
    )End of period
    
    $
    134
    
    
    $
    
    
    
    $
    134
  RESULTS OF CONTINUING OPERATIONS
 Quarterly Comparison  Three Months Ended June 28, 2008 and June 30, 2007
 Net Sales
  Quarterly Rate/VolumePercentage(In thousands)
    
    Dollars
    
    
    of 2007Net sales quarter ended June 30, 2007
    
    $
    32,709
    
    
    
    100.0
    %Volume
    
    
    (355
    )
    
    
    (1.1
    %)Average selling prices
    
    
    543
    
    
    
    1.7
    %Net sales quarter ended June 28, 2008
    
    $
    32,897
    
    
    
    100.6
    %
  Gross Profit
   17




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##### Table of Contents



Selling, General, and Administrative Expenses
  Special Costs
  Income Taxes
  Year-to-Date Comparison  Six Months Ended June 28, 2008 and June 30, 2007
 Net Sales
  Year To Date Rate/VolumePercentage(In thousands)
    
    Dollars
    
    
    of 2007Net sales six months ended June 30, 2007
    
    $
    73,277
    
    
    
    100.0
    %Volume
    
    
    (1,589
    )
    
    
    (2.2
    %)Average selling prices
    
    
    972
    
    
    
    1.3
    %Net sales six months ended June 28, 2008
    
    $
    72,660
    
    
    
    99.1
    %
  Gross Profit
  Selling, General, and Administrative Expenses
   18




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##### Table of Contents



Special Costs
  Income Taxes
  LIQUIDITY AND CAPITAL RESOURCES
      Amended
and Restated Revolving Credit Facility
 Amended and Restated Revolving Credit Facility
 Legal and Compliance Matters
   19




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##### Table of Contents



OFF-BALANCE SHEET ARRANGEMENTS
  CRITICAL ACCOUNTING POLICIES AND ESTIMATES
  RECENT ACCOUNTING PRONOUNCEMENTS
    Level 1
 Level 2
 Level 3
  Fair Value Measurements at Reporting Date UsingQuoted Pricesin Active
    
    
    SignificantMarkets for
    
    
    Other
    
    
    SignificantIdentical
    
    
    Observable
    
    
    Unobservable(In thousands)
    
    Assets
    
    
    Inputs
    
    
    InputsDescription
    
    (Level 1)
    
    
    (Level 2)
    
    
    (Level 3)
    
    
    June 28, 2008Cash and cash equivalents
    
    $
    48,270
    
    
    $
    
    
    
    $
    
    
    
    $
    48,270
  20




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##### Table of Contents



Item 3. Quantitative and Qualitative Disclosures About Market Risk.
  
 Item 4. Controls and Procedures.
 Disclosure Controls and Procedures
  Changes in Internal Control Over Financial Reporting
   21




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##### Table of Contents



PART II-OTHER INFORMATION
 
 Item 1. Legal Proceedings.
 Commitments and Contingencies Legal and Compliance Matters
  
 Item 1A. Risk Factors.
 Legal and Compliance Matters
 
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
 ISSUER PURCHASES OF EQUITY SECURITIES
COMMON STOCK, $0.10 PAR VALUE
 MaximumTotal Number of
    
    
    Number of SharesTotal
    
    
    
    
    
    
    Shares Purchased
    
    
    that May Yet beNumber of
    
    
    Average
    
    
    as Part of Publicly
    
    
    Purchased UnderShares
    
    
    Price Paid
    
    
    Announced Plans
    
    
    Such Plans orPeriod
    
    Purchased
    
    
    per Share
    
    
    or Programs
    
    
    ProgramsMar. 30  May 3, 2008
    
    
    
    
    
    $
    
    
    
    
    May 4   May 31, 2008
    
    
    
    
    
    
    
    
    
    
    Jun. 1  Jun. 28, 2008
    
    
    
    
    
    
    
    
    
    
    Total
    
    
    
    
    
    $
    
    
    
    
    
    
    
    
    1,036,490
   22




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##### Table of Contents



Item 6. Exhibits.
 (a)
    
    The following exhibits are filed as part of this Report:
 10.1
    
    
    Amendment No. 1, dated as of April 15, 2008, to that certain Amended and Restated
Credit Agreement and Guaranty, dated as of February 15, 2008, by and among Hampshire Group,
Limited, Hampshire Designers, Inc., Item-Eyes, Inc., SB Corporation, and Shane Hunter,
Inc.; HSBC Bank USA, National Association (HSBC), JPMorgan Chase Bank, N.A., Israel
Discount Bank of New York, Wachovia Bank, National Association, Bank Leumi USA and
Sovereign Bank, as Banks; and HSBC, as Letter of Credit Issuing Bank and as Agent for the
Banks. (incorporated by reference to Exhibit 10.1 to the Companys Current Report (File No.
000-20201) on Form 8-K filed on April 22, 2008).10.2
    
    
    Asset Purchase Agreement, dated as of April 15, 2008, by and among Hampshire Group,
Limited Company), Shane Hunter, Inc., and Shane Hunter, LLC. (incorporated by reference
to Exhibit 2.1 to the Companys Current Report (File No. 000-20201) on Form 8-K filed on
April 22, 2008).10.3
    
    
    Indemnification Agreement, dated as of April 29, 2008, by and between Richard Mandell
and Hampshire Group, Limited (incorporated by reference to Exhibit 10.1 to the Companys
Current Report (File No. 000-20201) on Form 8-K filed on May 5, 2008).10.4
    
    
    Indemnification Agreement, dated as of April 29, 2008, by and between Herbert Elish and
Hampshire Group, Limited (incorporated by reference to Exhibit 10.2 to the Companys
Current Report (File No. 000-20201) on Form 8-K filed on May 5, 2008).31.1
    
    
    Certification of Chief Executive Officer pursuant to Item 601(b) (31) of Regulation
S-K as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 200231.2
    
    
    Certification of Chief Financial Officer pursuant to Item 601(b) (31) of Regulation
S-K as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 200232.1
    
    
    Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 200232.2
    
    
    Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
 
  23




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##### Table of Contents



SIGNATURES
 Hampshire Group, LimitedDate: August 6, 2008
    By:
    /s/ Michael S. CulangMichael S. CulangChief Executive Officer and President
(Principal Executive Officer)/s/ Jonathan W. NorwoodJonathan W. NorwoodVice President and Chief Financial Officer
(Principal Financial and Accounting Officer)  24




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##### Table of Contents



INDEX TO EXHIBITS
 EXHIBITNUMBER
    
    DESCRIPTION31.1
    
    
    Certification of Chief Executive Officer pursuant to Item 601(b) (31) of Regulation S-K
as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 200231.2
    
    
    Certification of Chief Financial Officer pursuant to Item 601(b) (31) of Regulation S-K
as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 200232.1
    
    
    Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 200232.2
    
    
    Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002