Broder Bros. Co. Announced Third Quarter Results
Third quarter 2010 net sales were $210.7 million compared to $193 million for the third quarter 2009. Income from operations for the third quarter 2010 was $12.9 million compared to a loss of $1.7 million for the third quarter 2009. Net income for the third quarter 2010 was $6 million compared to a net loss of ($1.4) million for the third quarter 2009.
For the third quarter 2010, the company reported earnings before interest, taxes, depreciation and amortization ("EBITDA") of $16.3 million compared to EBITDA of $6.0 million for the third quarter 2009.
Excluding these highlighted charges, EBITDA was $16.5 million for the third quarter 2010 compared to EBITDA of $7.0 million for the third quarter 2009. The improvement in EBITDA was driven by higher gross margins and higher unit volumes.
Third quarter 2010 gross profit was $41.1 million compared to $31 million for the third quarter 2009. The increase in gross profit was due to higher gross margins, which mostly resulted from selling products in the third quarter 2010 that had been acquired in prior quarters when their costs were lower and due to increased unit volumes. Third quarter 2010 gross margin was 19.5 percent compared to 16.1 percent in the third quarter 2009 and was aided by cost increases imposed by major suppliers in July 2010 and September 2010. In addition, the company grew unit volumes by 5 percent during the third quarter 2010 compared to the same period in the prior year.
The company regained lost market share during the third quarter 2010. As reported by STARS, the market grew 3 percent in units sold. Approximately half of the increase in the company's unit volume for the third quarter 2010 was due to the growth in the market. The remainder of the increase in the company's unit volume was due to the company's three-part guarantee instituted in July 2009 as well as sales and marketing efforts to grow revenues and gross profit. The three-part guarantee consists of promises that the company would be in stock in key styles and colors, that it would fulfill orders accurately and that the company would not be undersold.