Broder Bros. Co., the Trevose, Pennsylvania-based apparel supplier, today announced results for its fourth quarter and fiscal year ended December 31, 2011. Results were in line with the company’s fiscal 2011 guidance.
Fourth quarter 2011 net sales were $226.7 million compared to $215.7 million for the fourth quarter 2010. Income from operations was $12.8 million for the fourth quarter 2011 compared to $12.5 million for the fourth quarter 2010. Net income for the fourth quarter 2011 was $17.0 million, or $1.65 per diluted share, compared to $10.1 million, or $0.99 per diluted share, for the fourth quarter 2010.
For the fourth quarter 2011, the company reported earnings before interest, taxes, depreciation and amortization (“EBITDA”) of $14.9 million compared to EBITDA of $16.0 million for the fourth quarter 2010. Results include the impact of certain restructuring and other highlighted charges discussed below. Excluding these highlighted charges, EBITDA was $15.0 million for the fourth quarter 2011 compared to $15.8 million for the fourth quarter 2010. A reconciliation of EBITDA to net income is set forth at the end of this earnings release.
Fourth quarter 2011 gross profit was $37.9 million compared to $40.9 million for the fourth quarter 2010. Fourth quarter 2011 gross margin was 16.7 percent compared to 19.0 percent for the fourth quarter 2010. The decline in gross profit was due to lower unit volume and a reduction in gross profit per unit. Higher average selling prices weakened demand. The company’s unit volume decreased 2 percent relative to the fourth quarter 2010 on a 7 percent increase in average selling prices. The decline in gross profit per unit was due to the Company’s inability to increase selling prices on a per unit basis as much as its cost of goods rose. In addition, promotional activity offered by major suppliers was high during the fourth quarter 2011, which reduced the company’s gross profit per unit. Fourth quarter 2010 gross profit included the recognition of a $6.5 million inventory gain resulting from the increase in cotton apparel prices and a $6.5 million increase to inventory reserves. The inventory charge was recorded due to an anticipated reduction in selling prices for some of the company’s private label products that were discontinued as of December 2010 and in prior years. The selling price reductions on these products increased the rate of sales for these products during 2011.
According to data provided by CREST, the U.S. imprintable activewear market shrank 4 percent in units sold during the fourth quarter 2011. The company’s units sold also declined by 4 percent during the period when using the comparable period used by CREST, which was October 1, 2011 through December 31, 2011. The Company’s fourth quarter 2011 began September 25, 2011 and ended December 31, 2011.
Fiscal 2011 net sales were $848.2 million compared to $791.3 million for fiscal 2010. Income from operations was $55.7 million compared to $31.2 million for fiscal 2010. Fiscal 2011 net income was $45.7 million compared to $16.7 million for fiscal 2010.
EBITDA for fiscal 2011 was $65.4 million compared to $45.8 million for fiscal 2010. Excluding the impact of highlighted charges discussed below, Adjusted EBITDA for fiscal 2011 was $63.5 million compared to $46.1 million for fiscal 2010. Adjusted EBITDA for fiscal 2011 was in line with the Company’s guidance of $62 million to $65 million.
Fiscal 2011 gross profit was $160.6 million compared to $147.1 million for fiscal 2010. Fiscal 2011 gross margin was 18.9 percent compared to 18.6 percent for fiscal 2010. The increase in gross profit was due to higher gross profit per unit and 5 percent fewer units sold. The increase in gross profit per unit is attributable to management’s continued focus on improved pricing and purchasing activities which led to a 15 percent increase in gross profit per unit compared to fiscal 2010. Fiscal 2010 gross profit included the recognition of approximately $13.0 million for inventory gains resulting from the rising cotton apparel prices partially offset by the $6.5 million increase to inventory reserves previously noted.
According to data provided by CREST, the U.S. imprintable activewear market shrank 5 percent in units sold during 2011. The company’s units sold also declined by 5 percent during the period when using the comparable period used by CREST, which was January 1, 2011 through December 31, 2011. The company’s fiscal 2011 began December 26, 2011 and ended December 31, 2011.
For more information, visit www.broderbrosco.com.
