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Maidenform Brands' BOD approves $20m share repurchase program

09 Feb '06

4 min read

In the fourth quarter, net sales were affected by unusually large reserves for markdowns and returns, particularly for the Full Support line. This product has been redesigned with an improved alternative, Flex-to-Fit, that has patent pending technology and will be delivered to customers in the spring of 2006. Maidenform was also affected by certain retail customers in this channel cautiously driving down inventories toward year-end.

Maidenform's Board of Directors has approved a share repurchase program in an amount up to $20 million. The company's current credit facility was amended to permit share repurchases under the plan, subject to certain restrictions and limitations set forth in the amendment to the credit facility.

The share repurchase program, which is open-ended, will allow Maidenform to repurchase its shares on the open market from available cash flow and borrowings under the revolver, depending on market conditions and other corporate considerations.

The company projects that its net sales for 2006 will increase 5 percent to 7 percent from original net sales expectations of 7 percent to 10 percent reflecting a more cautious position primarily due to a currently strong promotional climate and more aggressive retail store consolidation.

Net sales for the first quarter of 2006 will reflect a more challenging year-over-year comparison as a result of a $21.6 million net sales increase in 2005, or 28 percent net sales growthfrom 2004, significantly driven by $10 million in a rollout to all stores for one mass merchant customer and a launch of a panty program with a chain store customer.

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