Broder Bros. Co. Announces Second Quarter 2009 Results
The company has three operating segments: “Broder,” “Alpha” and “NES.” The Broder division generated second quarter 2009 net sales of $71.8 million compared to $98.8 million in the second quarter 2008. The Alpha division generated second quarter 2009 revenue of $80.9 million compared to $124.3 million in the second quarter 2008. The NES division generated net sales of $25.0 million in the second quarter 2009 compared to $34.5 million in the second quarter 2008.
Having successfully completed the financial restructuring, management is refocusing its attention on marketing and selling initiatives. Management believes that the company can outgrow its competition by having high-quality inventory, high-quality operations and competitive pricing.
After the successful completion of the exchange offer, management worked with suppliers to obtain the trade credit necessary for restocking its depleted inventory. Even prior to the conclusion of the exchange offer, Broder developed purchase orders for what was required to return depleted inventory to appropriate levels of inventory based on market conditions. Once the exchange offer was successful, suppliers began to ship the large quantities of goods so that Broder would be in-stock.
As soon as inventory levels reached target levels, Broder communicated to customers that it was in-stock through a series of promotions. Since then Broder has begun to restate its value proposition to its customers with “three promises.” The first of the three promises is that Broder will be in-stock in the most popular products. The second is that Broder will ship the order accurately. The third is that Broder will not be under-sold. During the first three weeks since restating Broder’s value proposition, Broder’s strong product availability, high-quality operations and competitive pricing have resulted in few service failures, minimal claims expense and an encouraging improvement in sales performance relative to second quarter 2009 performance.