Broder Bros. Co. Announces Second Quarter 2009 Results
Results include the impact of certain restructuring and other highlighted charges discussed below. Excluding these highlighted charges, EBITDA was $5.8 million for the second quarter 2009 and $14.8 million for the second quarter 2008.
Second quarter 2009 gross profit was $30.2 million compared to $45.4 million for the second quarter 2008. Second quarter 2009 gross margin was 17.0 percent compared to gross margin of 17.6 percent in the prior period. The decrease in gross profit primarily resulted from lower unit volume due to weak demand in the market, insufficient vendor financing during the first half of the quarter and customer concerns about Broder’s future. Volumes were impacted by soft demand for the products the company sells due to weakened U.S. economic conditions and were reflected in a 17 percent decline in overall industry unit shipments as reported by STARS. The decline in the market was an improvement over the first quarter 2009, in which industry unit volumes were 18 percent lower than the first quarter 2008. Volumes were also impacted by insufficient vendor financing through mid-May 2009 when the company announced that it had successfully completed its exchange offer for 95 percent of its $225.0 million in aggregate principal amount of 11 ¼ percent senior notes due 2010. Despite having increased credit limits from key suppliers restored to sufficient levels immediately following the exchange offer, the company’s inventory quality had not improved until June 2009 due to inventory lead times.
- Companies:
- Alpha Industries
- Broder Bros.