Broder Bros., Co. reported that revenues and earnings declined
in Q2 of 2012 on lower gross margins and lower average selling prices, despite
an increase in units sold in the U.S. imprintable activewear market. Net sales for the second quarter ended June
30 were $221.9 million compared to $227.1 million for the second quarter of 2011. Net income for the second quarter was $3.2
million, or 31 cents per diluted share, compared to $16.0 million, or $1.54 per
diluted share, for the year-ago quarter.
Gross margin in the second quarter was 15.5 percent
compared to 21.3 percent a year ago. The decrease in gross margin was due
to lower gross profit per unit. Gross profit for Q2 was $34.3 million
compared to $48.4 million for the second quarter 2011. The company's unit volume improved 3 percent
versus the second quarter 2011 on a 5 percent decrease in average selling
prices.
The company reported EBITDA of $8.9 million in Q2 compared
to EBITDA of $25.9 million for the second quarter 2011, with results including the
impact of certain restructuring and other highlighted charges. Excluding the
highlighted charges, EBITDA was $10.5 million for the second quarter compared
to $23.8 million for the comparable period last year. Lower gross margins
were responsible for the year-over-year reduction in EBITDA of $17.0
million.
According to data provided by CREST, the U.S.
imprintable activewear market grew 4 percent in units sold during the second
quarter 2012. Meanwhile, Broder’s units sold grew by 2 percent during the
period when using the CREST-defined comparable period, which was April 1
through June 30, 2012.
Broder Bros., Co. anticipates improved performance in
the second half of the year as a result of initiatives put into action since
the end of the second quarter that are designed to improve overall gross margin.
The company now expects 2012 adjusted EBITDA of approximately $43 million.
