Maidenform Brands, Inc. News
Maidenform Brands, Inc. Reports First Quarter 2008 Results
As stated in Maidenform's fourth quarter and full year 2007 press release on
First quarter 2008 highlights versus first quarter 2007: - Mass merchant channel net sales increased 5.9% to $30.3 million. - Retail segment net sales increased 12.7% to $11.5 million. Same store sales increased 9.4%. - International sales increased 11.1% to $8.0 million. - Consolidated gross margins increased 240 basis points to 38.7%.
Financial Results for First Quarter 2008 versus First Quarter 2007
Consistent with Maidenform's previously stated projection of lower net sales for the first quarter of 2008, net sales for the first quarter of 2008 decreased
Wholesale Segment
Department Stores and National Chain Stores
Net sales for the Department Stores and National Chain Stores channel decreased
Mass Merchants
The Mass Merchants channel net sales increased
Other
Net sales in the Other channel was down
Retail Segment
Same store sales in the first quarter for Maidenform's retail outlet stores increased 9.4%. Internet sales increased 33.3% to
As a percentage of net sales, consolidated gross margins improved 240 basis points to 38.7%. The Company's consolidated gross margins were favorably affected by both customer and product mix, higher retail segment sales, lower Other channel sales and sourcing initiatives such as product cost re-engineering actions and inbound freight initiatives.
Consolidated selling, general and administrative expenses (SG&A) increased
Due to the factors described above, operating income in the first quarter of 2008 was
Net interest expense for the first quarter of 2008 was
Maidenform's effective income tax rate for the first quarter of 2008 was 41.8% compared to 41.7% for the first quarter of 2007.
Net income for the first quarter of 2008 was
Total cash and cash equivalents at the end of the first quarter of 2008 was
Financial Performance Guidance for 2008
Based on specific initiatives that the Company is undertaking in 2008, Maidenform continues to reiterate its financial performance expectations for the full year of 2008 which are highlighted in the chart below. These projections exclude anticipated start-up costs of approximately
The Company currently expects a mid to upper-teen net sales growth rate for the third and fourth quarters of 2008 compared to the same year ago periods due to the following factors:
- a sizeable assortment expansion with a current mass customer; - the introduction of a new brand with an existing department store customer as well as a new brand with a new mass customer; - additional product introductions in the Department Stores and National Chain Stores channel; - a new program with a current warehouse customer; - the launch of the Company's Flexees(R) brand with a specialty retailer; and - the launch of a new program with a specialty retailer.
Maidenform expects net sales to be lower in the second quarter of 2008 from the prior year reflecting the timing of certain shipments to the Department Stores and National Chain Stores channel of approximately
Maidenform's consolidated gross margins continue to be projected at approximately 39% for 2008, with margins of approximately 37% in the second quarter due to customer and product mix, primarily from solid sales performance expected in the Company's mass merchants business. For the second half of 2008, margins are then expected to be comparable to the second half of 2007 due to customer and product mix, in addition to sourcing initiatives.
The following chart highlights Maidenform's financial performance guidance for the full year of 2008, excluding anticipated start-up costs of approximately
Financial Measure 2008 Guidance Net sales Approximately 4% Consolidated gross margins Approximately 39% EPS Approximately 10%
Conference Call Information
Maidenform will host a conference call and webcast on
About Maidenform Brands, Inc.
Maidenform Brands, Inc. is a global intimate apparel company with a portfolio of established and well-known brands, top-selling products and an iconic heritage. Maidenform designs, sources and markets an extensive range of intimate apparel products, including bras, panties and shapewear. During its 85-year history, Maidenform has built strong equity for its brands and established a solid growth platform through a combination of innovative, first-to-market designs and creative advertising campaigns focused on increasing brand awareness with generations of women. Maidenform sells its products under some of the most recognized brands in the intimate apparel industry, including Maidenform(R), Flexees(R), Lilyette(R), Control It(TM), Sweet Nothings(R), Rendezvous(R), Subtract(R), Bodymates(R) and Self Expressions(R). Maidenform products are currently distributed in approximately 60 countries and territories outside
Forward Looking Statement: This press release contains forward-looking statements relating to future events and the Company's future performance within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including, without limitation, statements regarding our expectations, beliefs, intentions or future strategies that are signified by the words "anticipates," "believes," "estimates," "expects," "intends," "plans," "potential," "predicts," "projects" or similar words or phrases, although not all forward-looking statements contain such identifying words. All forward-looking statements included in this press release are based on information available to the Company on the date hereof. It is routine for the Company's internal projections and expectations to change as the year or each quarter in the year progress, and therefore it should be clearly understood that the internal projections and beliefs upon which the Company bases its expectations may change prior to the end of each quarter or the year. Although these expectations may change, the Company is under no obligation to inform you if they do. Actual events or results may differ materially from those contained in the projections or forward-looking statements.
The following factors, among others, could cause the Company's actual results to differ materially from those expressed in any forward-looking statements: the Company's growth cannot be assured and any growth may be unprofitable; potential fluctuations in our results of operations or rate of growth; our dependence on a limited number of customers; the Company has larger competitors with greater resources; retail trends in the intimate apparel industry, including consolidation and continued growth in the development of private brands, resulting in downward pressure on prices, reduced floor space and other harmful changes; failure to anticipate, identify or promptly react to changing trends, styles, or consumer preferences; the Company's leverage could adversely affect its financial condition; external events that disrupt the Company's supply chain, result in increased cost of goods or an inability to deliver its products; events which result in difficulty in procuring or producing products on a cost-effective basis; increases in the prices of raw materials; changing international trade regulation, including as it relates to the imposition or elimination of quotas on imports of textiles and apparel; foreign currency exposure; the sufficiency of cash to fund operations and capital expenditures; and the influence of adverse changes in general economic conditions.
This list is intended to identify only certain of the principal factors that could cause actual results to differ from those discussed in the forward-looking statements. Readers are referred to the reports and documents filed from time to time by the Company with the Securities and Exchange Commission for a discussion of these and other important risk factors that could cause actual results to differ from those discussed in forward-looking statements.
MAIDENFORM BRANDS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except share and per share amounts) (unaudited) March 29, 2008 December 29, 2007 Assets Current assets Cash and cash equivalents $10,731 $16,602 Accounts receivable, net 54,760 45,775 Inventories 62,938 69,041 Deferred income taxes 11,225 11,015 Prepaid expenses and other current assets 7,422 7,497 Total current assets 147,076 149,930 Property, plant and equipment, net 19,400 19,992 Goodwill 7,884 7,884 Intangible assets, net 98,228 98,518 Other non-current assets 3,412 3,327 Total assets $276,000 $279,651 Liabilities and stockholders' equity Current liabilities Current portion of long-term debt $1,100 $1,100 Accounts payable 26,070 36,022 Accrued expenses and other current liabilities 21,801 21,620 Total current liabilities 48,971 58,742 Long-term debt 88,350 88,625 Deferred income taxes 22,222 21,718 Other non-current liabilities 11,060 10,949 Total liabilities 170,603 180,034 Stockholders' equity Preferred stock - $0.01 par value; 10,000,000 shares authorized and none issued and outstanding - - Common stock - $0.01 par value; 100,000,000 shares authorized; 23,488,357 shares issued and 22,361,061 outstanding at March 29, 2008 and 23,488,357 shares issued and 22,357,292 outstanding at December 29, 2007 235 235 Additional paid-in capital 61,210 60,919 Retained earnings 59,565 53,526 Accumulated other comprehensive income 269 872 Treasury stock, at cost (1,127,296 shares at March 29, 2008 and 1,131,065 shares at December 29, 2007) (15,882) (15,935) Total stockholders' equity 105,397 99,617 Total liabilities and stockholders' equity $276,000 $279,651 MAIDENFORM BRANDS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME (in thousands, except share and per share amounts) (unaudited) Three months ended March 29, 2008 March 31, 2007 Net sales $98,106 $107,233 Cost of sales 60,140 68,361 Gross profit 37,966 38,872 Selling, general and administrative expenses 26,403 18,676 Operating income 11,563 20,196 Interest expense, net 1,181 2,021 Income before provision for income taxes 10,382 18,175 Income tax expense 4,343 7,583 Net income $6,039 $10,592 Basic earnings per common share $0.27 $0.46 Diluted earnings per common share $0.26 $0.44 Basic weighted average number of shares outstanding 22,358,220 22,977,456 Diluted weighted average number of shares outstanding 23,422,197 24,145,056 MAIDENFORM BRANDS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) (unaudited) Three months ended March 29, 2008 March 31, 2007 Cash flows from operating activities Net income $6,039 $10,592 Adjustments to reconcile net income to net cash from operating activities Depreciation and amortization 933 717 Amortization of intangible assets 290 290 Amortization of deferred financing costs 47 210 Stock-based compensation 321 456 Deferred income taxes 504 1,725 Excess tax benefits related to stock-based compensation (16) (102) Pension plan curtailment gain - (6,099) Net changes in operating assets and liabilities Accounts receivable (8,985) (18,964) Inventories 6,103 (8,850) Prepaid expenses and other current and non-current assets 79 219 Accounts payable (9,952) 9,230 Accrued expenses and other current and non-current liabilities (3,212) (1,901) Income taxes payable 2,886 5,065 Net cash from operating activities (4,963) (7,412) Cash flows from investing activities Capital expenditures (341) (952) Net cash from investing activities (341) (952) Cash flows from financing activities Term loan repayments (275) - Proceeds from stock options exercised 7 34 Excess tax benefits related to stock-based compensation 16 102 Payments of capital lease obligations (27) (25) Net cash from financing activities (279) 111 Effects of exchange rate changes on cash (288) 65 Net decrease in cash (5,871) (8,188) Cash and cash equivalents Beginning of period 16,602 14,617 End of period $10,731 $6,429 Supplementary disclosure of cash flow information Cash paid during the period Interest $1,412 $2,086 Income taxes $816 $22 MAIDENFORM BRANDS, INC. AND SUBSIDIARIES SALES BY CHANNEL OF DISTRIBUTION AND PRODUCT MIX (in millions) (unaudited) Three months ended March 29, March 31, $ % 2008 2007 change change Department stores and national chain stores $48.4 $ 53.5 $(5.1) (9.5%) Mass merchant 30.3 28.6 1.7 5.9 Other 7.9 14.9 (7.0) (47.0) Total wholesale 86.6 97.0 (10.4) (10.7) Retail 11.5 10.2 1.3 12.7 Total consolidated net sales $98.1 $107.2 $(9.1) (8.5%) Three months ended March 29, March 31, 2008 2007 Bras 66% 75% Shapewear 22 15 Panties 12 10 100% 100%
SOURCE Maidenform Brands, Inc.
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