Inflation in apparel prices drive Broder's inventory level
09 May '11
4 min read
Borrowings under the revolving credit facility were $126.1 million at March 2011 compared to $115.3 million at December 2010 and $121.0 million at March 2010. The increase in revolver debt was mainly due to higher levels of working capital at March 2011. Borrowing base availability at March 2011, December 2010 and March 2010 was $29.1 million, $40.0 million and $10.8 million, respectively.
At March 2011, December 2010, and March 2010, the 2013 Notes were recorded on the balance sheets at $160.3 million, which represents the total future cash payments under the terms of the 2013 Notes, including both principal and interest payments, as required under the guidance provided by the FASB. As a result, the Company does not anticipate recognizing any interest expense on the 2013 Notes through their maturity. The face value of the 2013 Notes outstanding was $117.9 million at March 2011, December 2010 and March 2010. The Company paid $7.1 million in semi-annual cash interest in April 2011.
The Company's inventory and accounts receivable balances at March 2011 increased by $34.7 million and $12.5 million, respectively, over March 2010 levels. These increases were driven by improved sales and inflation in apparel prices. The sales growth and price increases have combined to require the Company to maintain a higher inventory level to meet its customers' need for product availability, at an increased price per unit, as well as higher accounts receivable to fund customers' needs for credit.
Broder Bros., Co. is one of the nation's largest distributors of trade, private label and retail apparel brands to the imprinting, embroidery and promotional product industries.
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