Broder Bros., Co. saw first quarter net sales decrease 4.3% to $200.6 million from $209.6 million for the first quarter last year. Loss from operations for the first quarter 2007 was $7.8 million compared to a loss of $0.4 million for the first quarter 2006. First quarter 2007 net loss was $11.1 million, widening from a loss of $5.3 million for the first quarter 2006.

The company's Broder division, which includes results from the Amtex business acquired in September 2006, recorded a 2.8% increase in first quarter net sales to $81.6 million from $79.4 million last year. First quarter revenues at the the Alpha division decreased 9.2% to $95.3 million from $105.0 million in the first quarter 2006. The NES division also posted a sales decrease for the quarter, down 6.0% to $23.7 million from $25.2 million in the first quarter 2006.

First quarter 2007 gross margin of 18.0% was relatively flat to gross margin of 18.1% in the prior period. Unit volumes decreased during the first quarter 2007 compared to the first quarter 2006. Commodity trade brand product units declined on lower volume and higher margin products as the company continued to sell fewer low margin white tee shirts. Insufficient private label inventory levels in key styles during the second and third quarters of 2006 contributed to volume declines during the first quarter 2007 relative to the prior period. Sufficient inventory in private label brand products was on hand during the first quarter 2007.


Business Outlook

The company continues to execute its strategy to create multi-branded distribution centers both to improve inventory availability to customers and to reduce overall inventory levels. Improved inventory availability is expected to generate increased revenue volume and profitability, as well as operational savings realized through higher volume leveraging fixed costs.

The company operated 13 major distribution centers as of March 31, 2007. The distribution center strategy will lead to eight larger, multi-branded, distribution centers yielding essentially equivalent UPS ground service coverage. In addition, the Company operated four “Express” locations in the Los Angeles, CA; Louisville, KY; Detroit, MI; and Chicago, IL markets as of March 31, 2007. The Express locations are expected to maintain and grow the company’s market position in rationalized locations by offering products customized to meet the needs and preferences of each local market including serving as customer pick-up locations. The company expects the distribution center consolidation to be substantially completed by the end of fiscal year 2007.