- Net sales increased 14.3% - Wholesale segment net sales increased
17.9% - Shapewear net sales increased 14.5% - GAAP Earnings per
share increased 86.1% - Non-GAAP Earnings per share increased 16.7%
ISELIN, N.J., Nov. 10 /PRNewswire-FirstCall/ -- Maidenform Brands,
Inc. (NYSE:MFB), a global branded marketer of intimate apparel,
today reported third quarter 2009 net sales of $128.7 million, an
increase of 14.3% over the third quarter of 2008, driven by
continued strength in its core bra and shapewear businesses,
replenishment of its Donna Karan® and DKNY® licensed brands, the
introduction of new programs with off-price retailers and sales to
a specialty retailer. Reported earnings per share (EPS) of $0.67
for the third quarter of 2009 were up 86.1% as compared to EPS of
$0.36 in the third quarter of 2008. During the third quarter, the
Company recorded a non-cash, one-time benefit of $0.25 per share
primarily associated with the recognition of additional net
deferred tax assets described later in this press release.
Excluding this gain, non-GAAP earnings per share increased 16.7% to
$0.42 per share versus $0.36 per share in the third quarter of
2008. Maurice S. Reznik, Chief Executive Officer, stated, "Our
strong results reflect the company's relentless focus on
innovation, product leadership and brand building. We are executing
our strategies and continue to gain share in the bra and shapewear
categories across all of our channels of distribution while
simultaneously controlling costs and investing in our business for
the future." Financial Results for Third Quarter 2009 versus Third
Quarter 2008 Net sales for the third quarter of 2009 increased
$16.1 million, or 14.3%, to $128.7 million. Wholesale segment net
sales in the third quarter of 2009 increased $17.0 million, or
17.9%, to $111.9 million. Retail segment net sales decreased $0.9
million, or 5.1%, to $16.8 million in the third quarter of 2009.
The Company's net sales performance by channel of distribution is
highlighted in Exhibit 1 to this press release. Wholesale Segment
Department Stores and National Chain Stores Net sales for the
department stores and national chain stores channel decreased $0.6
million, or 1.0%, to $56.7 million in the third quarter of 2009.
This decrease was largely a result of lost sales associated with
customer bankruptcies filed in the third quarter of 2008. Partially
offsetting this decrease were sales from the Company's licensed
brands Donna Karan® and DKNY® that the Company launched in the
first quarter of 2009 and the continued strength of its shapewear
business. Mass Merchants Mass merchant channel net sales increased
$5.4 million, or 19.0%, to $33.8 million in the third quarter of
2009. This increase was primarily a result of strong sales growth
in the shapewear and bra categories. Other Net sales in the other
channel increased $12.2 million, or 132.6%, to $21.4 million in the
third quarter of 2009 primarily from the replenishment of products
based on the Company's patent-pending Total Solution(TM) technology
with a specialty retailer and higher sales to off-price retailers.
Total international net sales, which are included in the wholesale
segment, decreased $1.7 million, or 14.7%, to $9.9 million.
International sales were adversely affected by currency exchange
rates and lower sales in Canada and Russia, which were partially
offset by increased sales in the Benelux countries. Retail Segment
Total retail segment net sales decreased $0.9 million, or 5.1%, to
$16.8 million in the third quarter of 2009 with same store sales
down 3.0% at Maidenform's retail outlet stores. Internet sales
decreased $0.1 million in the third quarter of 2009. Maidenform had
76 retail outlet stores as of the end of the third quarter of 2009
and 2008. As a percentage of net sales, consolidated gross margins
were 34.7% in the third quarter of 2009 versus 38.2% in the third
quarter of 2008. The majority of the decrease was a result of the
mix of customers and products, including a higher percentage of net
sales from the Company's lower margin other channel. Consolidated
selling, general and administrative expenses (SG&A) increased
$0.3 million, or 1.1%, to $28.1 million in the third quarter of
2009 largely due to higher compensation costs, the majority of
which were associated with incentive compensation. Partially
offsetting this increase was a decrease in bad debt expense
associated with customer bankruptcies, which occurred in the third
quarter of 2008, along with other cost reductions as the Company
continues to manage its expenses. As a percentage of net sales,
SG&A declined 290 basis points to 21.8% in the third quarter of
2009 compared to 24.7% in the third quarter of 2008. Due to all of
the factors described above, operating income in the third quarter
of 2009 was $16.6 million, or 12.9% of net sales, compared to $15.2
million, or 13.5% of net sales, in the third quarter of 2008. Net
interest expense in the third quarter of 2009 was $0.5 million
compared to $1.0 million in the third quarter of 2008 as the
Company benefited primarily from a lower average interest rate for
the third quarter of 2009 when compared to the same period in 2008.
The Company's effective income tax rate for the third quarter of
2009 was 0.6% compared to 40.4% in the third quarter of 2008. The
lower effective income tax rate resulted from additional net
deferred tax assets, principally related to net operating losses
that were recorded after the conclusion of an Internal Revenue
Service audit during the period. The Company's effective income tax
rate, excluding this non-cash, one-time benefit of $6.1 million,
was 38.2%. This decrease in the effective income tax rate in the
third quarter was from a reduction in taxes on income from foreign
operations when compared to the third quarter of 2008. Net income
for the third quarter of 2009 and 2008 was $16.0 million and $8.5
million, respectively, and EPS was $0.67 and $0.36, respectively.
Excluding the non-cash, one-time benefit mentioned above, net
income for the third quarter of 2009 was $9.9 million and EPS was
$0.42. Financial Results for Year-To-Date 2009 versus Year-To-Date
2008 Net sales for the first nine months of 2009 increased $38.3
million, or 12.0%, to $357.1 million as increased sales in the mass
merchant and other channels more than offset lower sales in the
department stores and national chain stores channel. Wholesale
segment net sales, on a year-to-date basis, increased $39.8
million, or 14.5%, to $314.9 million. Total international net sales
decreased $4.8 million, or 15.9%, to $25.4 million. Retail segment
net sales for the first nine months of 2009 decreased $1.5 million,
or 3.4%, to $42.2 million. Same store sales for Maidenform's retail
outlet stores decreased 5.6%. Internet sales remained unchanged at
$3.9 million on a year-to-date basis. The Company's net sales
performance by channel of distribution is highlighted in Exhibit 1
to this press release. Consolidated gross margins, on a
year-to-date basis were 34.2% versus 38.5% for the same period in
2008. This decrease is a result of customer and product mix which
included continued strong sales in the mass merchant and other
channels, and the effect of promotional activity to drive inventory
productivity. Year-to-date operating income for 2009 was $40.3
million, or 11.3% of net sales, versus $41.3 million, or 13.0% of
net sales, for the first nine months of 2008. Net income for the
first nine months of 2009 was $29.3 million and EPS was $1.24. Net
income for the nine months of 2008 was $22.3 million and EPS was
$0.95. Excluding the non-cash, one-time benefit of $6.1 million
mentioned above, net income for the first nine months of 2009 was
$23.2 million and EPS was $0.98. Total cash and cash equivalents at
the end of the third quarter of 2009 were $62.1 million compared to
$37.0 million at the end of the third quarter of 2008. The
Company's outstanding debt was $87.5 million as of October 3, 2009
versus $88.9 million as of September 27, 2008. Net debt totaled
$25.4 million at the end of the third quarter of 2009, with no
material maturities until 2014. Financial Performance Guidance for
2009: Fourth Quarter Outlook: -- Net sales for the fourth quarter
are expected to increase 3% to 6% over last year with roughly flat
sales at department stores and chains, mid single digit increases
in the mass channel, double digit increases in the other channel,
and sales down in the upper single digits in the retail segment. --
Gross margin rates are anticipated to be in the mid 30's percent
range. -- SG&A is expected to increase in low single digits
percentage range over 2008. -- EPS is expected to be in the range
of $0.17 to $0.21 versus $0.10 last year. -- Full year net sales
are expected to increase by roughly 10% over full year 2008. --
Non-GAAP EPS for the full year (excluding the one-time tax benefit
recorded in the third quarter 2009) is expected to be in the range
of $1.16 to $1.20 versus $1.05 last year. -- GAAP EPS for the full
year (including the one-time tax benefit recorded in the third
quarter 2009) is expected to be in the range of $1.41 to $1.45
versus $1.05 last year. Conference Call Information Maidenform will
host a conference call and webcast on Wednesday, November 11, 2009
at 8:30 am ET to discuss its third quarter 2009 results, in
addition to providing an update on its business. The conference
call telephone number is (866) 578-5784 and the passcode is
"Maidenform." The conference call will be simultaneously webcasted
and can be accessed via the investor relations page of Maidenform's
website at http://www.maidenformbrands.com/. A dial-in replay of
this event will be available through November 25, 2009 and will be
hosted on the Company's website for a limited time. The replay
telephone numbers are (888) 286-8010 or (617) 801-6888. The replay
passcode is 57843375. 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 86-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®, Flexees®, Lilyette®,
Control It!®, Luleh®, Sweet Nothings®, Rendezvous®, Subtract®,
Bodymates®, Self Expressions® and Inspirations®. Maidenform
products are currently distributed in approximately 60 countries
and territories outside the United States. 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, we assume no obligation to update or revise publicly
any forward-looking statements whether as a result of new
information, future events or otherwise. 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 worldwide
apparel industry may continue to be harmed by the current global
economic downturn, the unprecedented conditions in the financial
and credit markets may affect the availability and cost of our
funding, 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 credit agreement could limit growth
opportunities; 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; and
the sufficiency of cash to fund operations and capital
expenditures. 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) October 3, 2009
January 3, 2009 --------------- --------------- Assets Current
assets Cash and cash equivalents $62,113 $43,463 Accounts
receivable, net 63,608 38,974 Inventories 59,376 65,039 Deferred
income taxes 11,654 11,837 Prepaid expenses and other current
assets 11,801 13,852 ------ ------ Total current assets 208,552
173,165 Property, plant and equipment, net 19,699 19,577 Goodwill
7,162 7,162 Intangible assets, net 96,487 97,358 Other non-current
assets 793 982 --- --- Total assets $332,693 $298,244 ========
======== Liabilities and stockholders' equity Current liabilities
Current portion of long-term debt $1,100 $1,100 Accounts payable
33,714 31,667 Accrued expenses and other current liabilities 22,992
19,476 ------ ------ Total current liabilities 57,806 52,243
Long-term debt 86,425 87,250 Deferred income taxes 21,128 24,252
Other non-current liabilities 11,847 14,841 ------ ------ Total
liabilities 177,206 178,586 ------- ------- 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; 23,725,225 shares issued and
23,082,341 outstanding at October 3, 2009 and 23,488,357 issued and
22,496,003 outstanding at January 3, 2009 237 235 Additional
paid-in capital 61,392 60,567 Retained earnings 107,553 78,246
Accumulated other comprehensive loss (4,635) (5,408) Treasury
stock, at cost (642,884 shares at October 3, 2009 and 992,354
shares at January 3, 2009) (9,060) (13,982) ------ ------- Total
stockholders' equity 155,487 119,658 ------- ------- Total
liabilities and stockholders' equity $332,693 $298,244 ========
======== MAIDENFORM BRANDS, INC. AND SUBSIDIARIES CONDENSED
CONSOLIDATED STATEMENTS OF INCOME (in thousands, except share and
per share amounts) (unaudited) Three months ended Nine months ended
------------------------ ------------------------ October 3,
September 27, October 3, September 27, 2009 2008 2009 2008
---------- ------------ --------- ------------ Net sales $128,685
$112,586 $357,123 $318,755 Cost of sales 84,050 69,513 234,845
195,906 ------ ------ ------- ------- Gross profit 44,635 43,073
122,278 122,849 Selling, general and administrative expenses 28,011
27,880 81,944 81,575 ------ ------ ------ ------ Operating income
16,624 15,193 40,334 41,274 Interest expense, net 494 1,014 1,794
3,326 --- ----- ----- ----- Income before provision for income
taxes 16,130 14,179 38,540 37,948 Income tax expense 94 5,734 9,233
15,657 -- ----- ----- ------ Net income $16,036 $8,445 $29,307
$22,291 ======= ====== ======= ======= Basic earnings per common
share $0.70 $0.38 $1.29 $1.00 ===== ===== ===== ===== Diluted
earnings per common share $0.67 $0.36 $1.24 $0.95 ===== ===== =====
===== Basic weighted average number of shares outstanding
22,861,486 22,428,698 22,640,594 22,386,561 ========== ==========
========== ========== Diluted weighted average number of shares
outstanding 23,826,097 23,461,633 23,593,985 23,443,488 ==========
========== ========== ========== MAIDENFORM BRANDS, INC. AND
SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in
thousands) (unaudited) Nine months ended
----------------------------------- October 3, 2009 September 27,
2008 --------------- ------------------ Cash flows from operating
activities Net income $29,307 $22,291 Adjustments to reconcile net
income to net cash from operating activities Depreciation and
amortization 2,651 2,690 Amortization of intangible assets 871 871
Amortization of deferred financing costs 138 142 Stock-based
compensation 1,774 1,117 Deferred income taxes (3,191) 3,874 Excess
tax benefits related to stock-based compensation (2,349) (60) Bad
debt expense 214 1,102 Other non-cash items (2,478) - Net changes
in operating assets and liabilities Accounts receivable (24,599)
(7,454) Inventories 5,807 5,923 Prepaid expenses and other current
and non-current assets 929 (235) Accounts payable 2,034 (3,812)
Accrued expenses and other current and non-current liabilities
3,962 (976) Income taxes payable 3,201 (2,160) ----- ------ Net
cash from operating activities 18,271 23,313 ------ ------ Cash
flows from investing activities Capital expenditures (2,692)
(1,358) ------ ------ Net cash from investing activities (2,692)
(1,358) ------ ------ Cash flows from financing activities Term
loan repayments (825) (825) Proceeds from stock options exercised
1,877 151 Excess tax benefits related to stock-based compensation
2,349 60 Payments of employee withholding taxes related to equity
awards (162) (73) Payments of capital lease obligations (151) (135)
---- ---- Net cash from financing activities 3,088 (822) Effects of
exchange rate changes on cash (17) (725) --- ---- Net increase in
cash 18,650 20,408 Cash and cash equivalents Beginning of period
43,463 16,602 ------ ------ End of period $62,113 $37,010 =======
======= Supplementary disclosure of cash flow information Cash paid
during the period Interest $2,043 $3,760 ====== ====== Income taxes
$11,288 $13,402 ======= ======= Exhibit 1 MAIDENFORM BRANDS, INC.
AND SUBSIDIARIES SALES BY CHANNEL OF DISTRIBUTION AND PRODUCT MIX
(in millions) (unaudited) Three months ended
------------------------------------------------- October 3,
September 27, $ % 2009 2008 change change ---- ---- ------ ------
(in millions) Department stores and national chain stores $56.7
$57.3 $(0.6) (1.0%) Mass merchants 33.8 28.4 5.4 19.0 Other 21.4
9.2 12.2 132.6 ---- --- ---- ----- Total wholesale 111.9 94.9 17.0
17.9 ----- ---- ---- ---- Retail 16.8 17.7 (0.9) (5.1) ---- ----
---- ---- Total consolidated net sales $128.7 $112.6 $16.1 14.3%
====== ====== ===== ==== Nine months ended
-------------------------------------------------- October 3,
September 27, $ % 2009 2008 change change ---- ---- ------ ------
(in millions) Department stores and national chain stores $157.2
$163.1 $(5.9) (3.6%) Mass merchants 99.5 87.2 12.3 14.1 Other 58.2
24.8 33.4 134.7 ---- ---- ---- ----- Total wholesale 314.9 275.1
39.8 14.5 ----- ----- ---- ---- Retail 42.2 43.7 (1.5) (3.4) ----
---- ---- ---- Total consolidated net sales $357.1 $318.8 $38.3
12.0% ====== ====== ===== ==== Three months ended Nine months ended
------------------------ ------------------------ October 3,
September 27, October 3, September 27, 2009 2008 2009 2008 ----
---- ---- ---- Bras 62% 58% 64% 64% Shapewear 33 33 30 29 Panties 5
9 6 7 -- -- -- -- 100% 100% 100% 100% === === === === DATASOURCE:
Maidenform Brands, Inc. CONTACT: Chris Vieth, Chief Operating
Officer & Chief Financial Officer, Maidenform Brands, Inc.,
+1-732-621-2101, Web Site: http://www.maidenformbrands.com/
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