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Broder Bros increases fiscal 2011 EBITDA guidance
08
Aug '11
Broder Bros., Co. announced record second quarter results for its quarter ended June 25, 2011. The Company also increased its Fiscal 2011 EBITDA guidance and announced that it has begun a series of initiatives in an effort to increase the liquidity in the Company's common stock, commencing with a registration statement on Form 10 filed with the Securities and Exchange Commission ("SEC") on August 2, 2011.

Second Quarter 2011 Results Compared to Second Quarter 2010 Results

Second quarter 2011 net sales were $227.1 million compared to $211.6 million for the second quarter 2010. Income from operations for the second quarter 2011 was $23.3 million compared to $9.1 million for the second quarter 2010. Net income for the second quarter 2011 was $16.0 million, or $1.54 per diluted share, compared to $5.0 million, or $0.50 per diluted share, for the second quarter 2010.

For the second quarter 2011, the Company reported earnings before interest, taxes, depreciation and amortization ("EBITDA") of $25.9 million compared to EBITDA of $12.7 million for the second quarter 2010. A reconciliation of EBITDA to net income (loss) is set forth at the end of this earnings release.

Results include the impact of certain restructuring and other highlighted charges discussed below. Excluding these highlighted charges, EBITDA was $23.8 million for the second quarter 2011 compared to $12.4 million for the second quarter 2010. The improvement in EBITDA was driven by higher gross margins and reduced operating expenses.

Second quarter 2011 gross profit was $48.4 million compared to $38.3 million for the second quarter 2010. Second quarter 2011 gross margin was 21.3% compared to 18.1% one year prior. The increase in gross profit was attributable to management's continued focus on improved pricing and purchasing activities.

The Company's major suppliers announced price increases in January 2011 and again in late March 2011 or early April 2011 following three price increases announced from July 2010 through December 2010. Second quarter 2011 gross profit included no benefit resulting from apparel price increases. The Company increased its selling prices in response to each of the price increases from manufacturers. However, due to competitive factors, the Company did not raise selling prices on a per unit basis more than the Company's costs rose.

According to data provided by CREST, the U.S. imprintable activewear market shrank 9% in units sold during the second quarter 2011. The Company's units sold shrank by 11% during the period when using the comparable period used by CREST, which was April 1, 2011 through June 30, 2011. The Company's second quarter 2011 began March 27, 2011 and ended June 25, 2011.

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Broder Bros Co

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