Broder Bros., Co. announced results for its third quarter and year-to-date period ended September 27, 2003. Broder operates on a 52/53 week calendar ending on the last Saturday in December. On September 22, 2003, Broder merged with Alpha Shirt Holdings, Inc., the parent of Alpha Shirt Company.
The pro forma information presented below reflects the operations of Broder, T-Shirts & More, Inc., Alpha and Kay's Enterprises, Inc., for the full periods presented. Broder acquired TSM in June 2003 and Alpha acquired Kay's in May 2002.
For the third quarter 2003, pro forma net sales were $211.6 million compared to $237.2 million in the 2002 quarter. Pro forma income from operations was $4.5 million for the third quarter 2003 compared to $10.3 million in the 2002 quarter. Pro forma earnings before interest, taxes, depreciation and amortization (EBITDA) was $8.8 million for the third quarter 2003 compared to $15.2 million in the 2002 quarter.
For the first nine months of 2003, pro forma net sales were $597.5 million
compared to $655.1 million in the 2002 period. Pro forma income from
operations for the first nine months of 2003 was $12.8 million compared to
$18.2 million in the prior-year period. Pro forma earnings before interest,
taxes, depreciation and amortization (EBITDA) was $26.6 million for the first
nine months of 2003 compared to $33.1 million in the prior-year period.
Broder Results (Actual Historical)
Set forth below is selected financial information with respect to the
actual operating results of Broder for the three month and year-to-date
periods. Actual results of Broder include only 6 days of Alpha operations for
the quarter and year-to-date periods, and also include the results of
operations for Broder's acquisition of TSM from the June 16, 2003 date of
acquisition.
For the third quarter 2003, Broder division sales were $111.9 million
compared to $118.0 million for the 2002 quarter. Loss from operations for the
third quarter of 2003 was $(1.5) million compared to operating income of
$4.2 million for the 2002 quarter. Earnings before interest, taxes,
depreciation and amortization (EBITDA) was $0.8 million for the third quarter
2003 compared to $6.3 million in the 2002 quarter.
For the first nine months of 2003, Broder division sales were
$285.9 million compared to $324.4 million for the 2002 quarter. Loss from
operations for the first nine months of 2003 was $(0.2) million compared to
operating income of $6.3 million for the 2002 period. Earnings before
interest, taxes, depreciation and amortization (EBITDA) was $5.4 million for
the first nine months of 2003 compared to $12.2 million in the 2002 period.
Alpha Division Results
Set forth below is selected financial information with respect to the
operating results of Alpha for three month and year-to-date periods. All
information provided below for 2002 is pro forma for the acquisition of Kay's,
which was acquired by Alpha in May 2002. This information is being provided
to enable the reader to understand the operating results of Alpha for the
third quarter and year-to-date 2003. We do not expect to provide this type of
information in the future as the operations of the two companies become
integrated.
The 2003 third quarter and year-to-date periods contain two less days than
the comparable periods of the prior year due to the adoption of the Broder
fiscal calendar.
For the third quarter 2003, Alpha division sales were $108.7 million
compared to $116.2 million for the 2002 quarter. Pro forma income from
operations was $7.5 million for the third quarter 2003 compared to $7.9
million for the 2002 quarter. Earnings before interest, taxes, depreciation
and amortization (EBITDA) was $8.2 million for the third quarter 2003 compared
to $8.7 million in the 2002 quarter.
For the first nine months of 2003, Alpha division sales were
$316.4 million compared to $321.2 million for the 2002 period. Income from
operations was $18.9 million for the third quarter of 2003 compared to
$17.4 million for the 2002 period. Earnings before interest, taxes,
depreciation and amortization (EBITDA) was $21.2 million for the third quarter
2003 compared to $19.8 million in the 2002 period.
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED SEPTEMBER 27, 2003
(dollars in thousands)
Broder Bros., Alpha Shirt
Co. Holdings, Inc.
Q3 2003 July 1 - Pro Forma
Sept. 21, Transaction Consolidated
2003 Adjustments Q3 2003 (1)
Statement of Operations Data:
Net sales $111,879 $99,758 $- $211,637
Cost of sales 95,863 80,462 (200) (4) 176,125
Gross profit 16,016 19,296 200 35,512
Warehousing, selling
and administrative
expenses 15,273 10,782 - 26,055
Management fee 196 200 (396) (6) 0
Depreciation and
amortization 2,021 672 2,234 (7) 4,927
Operating expenses 17,490 11,654 1,839 30,983
Income (loss) from
operations (1,474) 7,642 (1,638) 4,530
Interest expense 3,032 1,108 2,490 (8) 6,630
Loss (Gain) on debt
conversion/
retirement (1,591) - (1,591)
Other expense (income) (47) 672 - 626
Total other expense 1,394 1,780 2,490 5,665
Income (loss) before
provision for income
taxes (2,868) 5,862 (4,128) (1,135)
Income tax provision
(benefit) (1,751) 2,233 (1,666) (9) (1,184)
Net income (loss)
from continuing
operations $(1,117) $3,629 $(2,462) $50
PRO FORMA EBITDA (10) $8,832
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED SEPTEMBER 28, 2002
(dollars in thousands)
Broder Bros., T-Shirts Alpha Shirt Pro Forma
Co. & More, Holdings, Transaction Consolidated
Q3 2002 Inc. Inc. Adjustments Q3 2002 (1)
Q3 2002 Q3 2002
(2)
Statement of Operations Data:
Net sales $117,989 $3,054 $116,166 $- $237,209
Cost of
sales 97,519 2,464 95,678 - 195,661
Gross
profit 20,470 590 20,488 - 41,548
Warehousing,
selling and
administrative
expenses 14,268 527 11,512 (78) (5) 26,229
Management
fee 220 - 200 (420) (6) -
Depreciation and
amortizat-
ion 1,791 13 768 2,398 (7) 4,970
Operating
expenses 16,279 540 12,480 1,900 31,199
Income (loss)
from
operations 4,191 50 8,008 (1,900) 10,349
Interest 3,756 57 1,398 1,401 (8) 6,612
Loss (Gain) on
debt conversion/
retirement - - - - -
Other expense
(income) (75) - 151 - 76
Total other
expense 3,681 57 1,549 1,401 6,688
Income (loss)
before provision
for income
taxes 510 (7) 6,459 (3,301) 3,661
Income tax
provision
(benefit) 168 - 2,341 (1,249) (9) 1,260
Net income (loss)
from continuing
operations $342 $(7) $4,118 $(2,052) $2,401
PRO FORMA
EBITDA (10) $15,243
