Attached files
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EXCEL - IDEA: XBRL DOCUMENT - Maidenform Brands, Inc. | Financial_Report.xls |
EX-31.1 - EX-31.1 - Maidenform Brands, Inc. | a12-13938_1ex31d1.htm |
EX-31.2 - EX-31.2 - Maidenform Brands, Inc. | a12-13938_1ex31d2.htm |
EX-32.2 - EX-32.2 - Maidenform Brands, Inc. | a12-13938_1ex32d2.htm |
EX-32.1 - EX-32.1 - Maidenform Brands, Inc. | a12-13938_1ex32d1.htm |
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
x |
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended June 30, 2012
OR
o |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission file number: 001-32568
MAIDENFORM BRANDS, INC.
(Exact name of registrant as specified in its charter)
Delaware |
|
06-1724014 |
(State or other jurisdiction of incorporation or organization) |
|
(I.R.S. Employer Identification No.) |
|
|
|
485F US Hwy 1 South, Iselin, NJ |
|
08830 |
(Address of principal executive offices) |
|
(Zip Code) |
(732) 621-2500
(Registrants telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of large accelerated filer, accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange Act.
Large accelerated filer o |
|
Accelerated filer x |
|
|
|
Non-accelerated filer o |
|
Smaller reporting company o |
(Do not check if smaller reporting company) |
|
|
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x
Indicate the number of shares outstanding of each of the issuers classes of common stock, as of the latest practicable date.
Class |
|
Outstanding at August 3, 2012 |
Common Stock, $0.01 par value per share |
|
23,574,554 shares |
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
MAIDENFORM BRANDS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share amounts)
(unaudited)
|
|
June 30, |
|
December 31, |
| ||
|
|
2012 |
|
2011 |
| ||
Assets |
|
|
|
|
| ||
Current assets |
|
|
|
|
| ||
Cash and cash equivalents |
|
$ |
59,068 |
|
$ |
68,041 |
|
Accounts receivable, net |
|
88,051 |
|
54,517 |
| ||
Inventories |
|
108,805 |
|
113,200 |
| ||
Deferred income taxes |
|
15,357 |
|
15,357 |
| ||
Prepaid expenses and other current assets |
|
16,478 |
|
14,310 |
| ||
Total current assets |
|
287,759 |
|
265,425 |
| ||
Property, plant and equipment, net |
|
29,643 |
|
29,497 |
| ||
Goodwill |
|
7,162 |
|
7,162 |
| ||
Intangible assets, net |
|
92,344 |
|
92,765 |
| ||
Other non-current assets |
|
451 |
|
386 |
| ||
Total assets |
|
$ |
417,359 |
|
$ |
395,235 |
|
|
|
|
|
|
| ||
Liabilities and stockholders equity |
|
|
|
|
| ||
Current liabilities |
|
|
|
|
| ||
Current portion of long-term debt |
|
$ |
1,100 |
|
$ |
1,100 |
|
Accounts payable |
|
39,104 |
|
38,425 |
| ||
Accrued expenses and other current liabilities |
|
26,881 |
|
24,967 |
| ||
Total current liabilities |
|
67,085 |
|
64,492 |
| ||
Long-term debt |
|
67,400 |
|
67,950 |
| ||
Deferred income taxes |
|
26,600 |
|
25,108 |
| ||
Other non-current liabilities |
|
13,827 |
|
14,497 |
| ||
Total liabilities |
|
174,912 |
|
172,047 |
| ||
|
|
|
|
|
| ||
Commitments and contingencies (Note 8) |
|
|
|
|
| ||
|
|
|
|
|
| ||
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; 24,399,732 shares issued and 23,086,912 outstanding at June 30, 2012 and 24,399,732 shares issued and 22,922,969 outstanding at December 31, 2011 |
|
244 |
|
244 |
| ||
Additional paid-in capital |
|
78,683 |
|
78,362 |
| ||
Retained earnings |
|
197,303 |
|
181,227 |
| ||
Accumulated other comprehensive loss |
|
(8,356 |
) |
(8,301 |
) | ||
Treasury stock, at cost (1,312,820 shares at June 30, 2012 and 1,476,763 shares at December 31, 2011) |
|
(25,427 |
) |
(28,344 |
) | ||
Total stockholders equity |
|
242,447 |
|
223,188 |
| ||
Total liabilities and stockholders equity |
|
$ |
417,359 |
|
$ |
395,235 |
|
The accompanying notes are an integral part of these condensed consolidated financial statements.
MAIDENFORM BRANDS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except share and per share amounts)
(unaudited)
|
|
Three Months Ended |
|
Six Months Ended |
| ||||||||
|
|
June 30, |
|
July 2, |
|
June 30, |
|
July 2, |
| ||||
|
|
2012 |
|
2011 |
|
2012 |
|
2011 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Net sales |
|
$ |
157,485 |
|
$ |
170,026 |
|
$ |
315,031 |
|
$ |
333,587 |
|
Cost of sales |
|
103,927 |
|
110,922 |
|
218,566 |
|
218,789 |
| ||||
Gross profit |
|
53,558 |
|
59,104 |
|
96,465 |
|
114,798 |
| ||||
Selling, general and administrative expenses |
|
34,570 |
|
34,415 |
|
67,638 |
|
66,594 |
| ||||
Litigation settlement |
|
|
|
6,750 |
|
|
|
6,750 |
| ||||
Operating income |
|
18,988 |
|
17,939 |
|
28,827 |
|
41,454 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Interest expense, net |
|
296 |
|
238 |
|
549 |
|
462 |
| ||||
Income before provision for income taxes |
|
18,692 |
|
17,701 |
|
28,278 |
|
40,992 |
| ||||
Income tax expense |
|
7,308 |
|
6,137 |
|
11,049 |
|
14,915 |
| ||||
Net income |
|
$ |
11,384 |
|
$ |
11,564 |
|
$ |
17,229 |
|
$ |
26,077 |
|
Basic earnings per common share |
|
$ |
0.49 |
|
$ |
0.51 |
|
$ |
0.75 |
|
$ |
1.14 |
|
Diluted earnings per common share |
|
$ |
0.49 |
|
$ |
0.50 |
|
$ |
0.74 |
|
$ |
1.12 |
|
Basic weighted average number of shares outstanding |
|
23,052,429 |
|
22,810,905 |
|
22,995,539 |
|
22,799,378 |
| ||||
Diluted weighted average number of shares outstanding |
|
23,399,367 |
|
23,322,223 |
|
23,389,694 |
|
23,312,676 |
|
The accompanying notes are an integral part of these condensed consolidated financial statements.
MAIDENFORM BRANDS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in thousands)
(unaudited)
|
|
Three Months Ended |
|
Six Months Ended |
| ||||||||
|
|
June 30, |
|
July 2, |
|
June 30, |
|
July 2, |
| ||||
|
|
2012 |
|
2011 |
|
2012 |
|
2011 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Net income |
|
$ |
11,384 |
|
$ |
11,564 |
|
$ |
17,229 |
|
$ |
26,077 |
|
Other comprehensive (loss) income, before tax: |
|
|
|
|
|
|
|
|
| ||||
Foreign currency translation adjustments |
|
(724 |
) |
294 |
|
(219 |
) |
890 |
| ||||
Net gain on defined benefit pension plan |
|
137 |
|
55 |
|
274 |
|
112 |
| ||||
Other comprehensive (loss) income, before tax |
|
(587 |
) |
349 |
|
55 |
|
1,002 |
| ||||
Income tax expense related to items of other comprehensive (loss) income |
|
55 |
|
22 |
|
110 |
|
45 |
| ||||
Other comprehensive (loss) income, net of tax |
|
(642 |
) |
327 |
|
(55 |
) |
957 |
| ||||
Comprehensive income |
|
$ |
10,742 |
|
$ |
11,891 |
|
$ |
17,174 |
|
$ |
27,034 |
|
The accompanying notes are an integral part of these condensed consolidated financial statements.
MAIDENFORM BRANDS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
|
|
Six Months Ended |
| ||||
|
|
June 30, |
|
July 2, |
| ||
|
|
2012 |
|
2011 |
| ||
Cash flows from operating activities |
|
|
|
|
| ||
Net income |
|
$ |
17,229 |
|
$ |
26,077 |
|
Adjustments to reconcile net income to net cash used in operating activities |
|
|
|
|
| ||
Depreciation and amortization |
|
2,560 |
|
2,231 |
| ||
Amortization of intangible assets |
|
546 |
|
545 |
| ||
Amortization of deferred financing costs |
|
94 |
|
89 |
| ||
Stock-based compensation |
|
2,301 |
|
1,940 |
| ||
Deferred income taxes |
|
1,396 |
|
1,783 |
| ||
Excess tax benefits related to stock-based compensation |
|
(843 |
) |
(983 |
) | ||
Bad debt expense |
|
277 |
|
263 |
| ||
Other non-cash items |
|
411 |
|
221 |
| ||
Net changes in operating assets and liabilities |
|
|
|
|
| ||
Accounts receivable |
|
(33,928 |
) |
(49,977 |
) | ||
Inventories |
|
4,251 |
|
(19,939 |
) | ||
Prepaid expenses and other current and non-current assets |
|
(454 |
) |
(3,574 |
) | ||
Accounts payable |
|
686 |
|
14,965 |
| ||
Accrued expenses and other current and non-current liabilities |
|
1,188 |
|
6,417 |
| ||
Income taxes payable |
|
(778 |
) |
(2,402 |
) | ||
Net cash used in operating activities |
|
(5,064 |
) |
(22,344 |
) | ||
Cash flows from investing activities |
|
|
|
|
| ||
Capital expenditures |
|
(2,835 |
) |
(3,197 |
) | ||
Net cash used in investing activities |
|
(2,835 |
) |
(3,197 |
) | ||
Cash flows from financing activities |
|
|
|
|
| ||
Term loan repayments |
|
(550 |
) |
(550 |
) | ||
Proceeds from stock options exercised |
|
636 |
|
1,504 |
| ||
Excess tax benefits related to stock-based compensation |
|
843 |
|
983 |
| ||
Payments of employee withholding taxes related to equity awards |
|
(1,566 |
) |
(1,130 |
) | ||
Purchase of common stock for treasury |
|
|
|
(1,961 |
) | ||
Payments of capital lease obligations |
|
(152 |
) |
(132 |
) | ||
Financing fees paid |
|
(250 |
) |
|
| ||
Net cash used in financing activities |
|
(1,039 |
) |
(1,286 |
) | ||
Effects of exchange rate changes on cash and cash equivalents |
|
(35 |
) |
(111 |
) | ||
Net decrease in cash and cash equivalents |
|
(8,973 |
) |
(26,938 |
) | ||
Cash and cash equivalents |
|
|
|
|
| ||
Beginning of period |
|
68,041 |
|
73,221 |
| ||
End of period |
|
$ |
59,068 |
|
$ |
46,283 |
|
|
|
|
|
|
| ||
Supplementary disclosure of cash flow information |
|
|
|
|
| ||
Cash paid during the period |
|
|
|
|
| ||
Interest |
|
$ |
510 |
|
$ |
500 |
|
Income taxes |
|
$ |
10,310 |
|
$ |
15,479 |
|
|
|
|
|
|
| ||
Supplemental schedule of non-cash financing activities |
|
|
|
|
| ||
Treasury stock issued related to equity award activity |
|
$ |
4,483 |
|
$ |
4,324 |
|
The accompanying notes are an integral part of these condensed consolidated financial statements.
MAIDENFORM BRANDS, INC. AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts)
(unaudited)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
Maidenform Brands, Inc. and its subsidiaries (the Company, we, us or our) design, source and market an extensive range of intimate apparel products, including bras, panties and shapewear. We sell our products through multiple distribution channels, including department stores and national chain stores (including third party distributors and independent stores), mass merchants (including warehouse clubs), and other (including specialty retailers, off-price retailers and licensees). In addition, we operated 75 retail outlet stores as of June 30, 2012 and 74 retail outlet stores as of July 2, 2011, and sold products on our websites.
In our opinion, the accompanying unaudited condensed consolidated financial statements contain all adjustments necessary to state fairly our financial position at June 30, 2012, the results of our operations for the three and six-month periods ended June 30, 2012 and July 2, 2011, and cash flows for the six months ended June 30, 2012 and July 2, 2011. These adjustments consist of normal recurring adjustments. Operating results for the three and six-month periods ended June 30, 2012 are not necessarily indicative of the results that may be expected for any other future interim period or for a full fiscal year. The condensed consolidated balance sheet at December 31, 2011 has been derived from our audited consolidated financial statements at that date, but does not include all disclosures required by accounting principles generally accepted in the United States of America (GAAP).
These condensed consolidated financial statements have been prepared in accordance with Article 10 of Regulation S-X promulgated by the Securities and Exchange Commission (SEC). Accordingly, certain information and disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to the rules and regulations of the SEC. The financial statements included herein should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2011.
2. DEBT
|
|
June 30, |
|
December 31, |
| ||
|
|
2012 |
|
2011 |
| ||
Long-term debt |
|
|
|
|
| ||
Term loan facility |
|
$ |
68,500 |
|
$ |
69,050 |
|
Current maturities of long-term debt |
|
1,100 |
|
1,100 |
| ||
Non-current portion of long-term debt |
|
$ |
67,400 |
|
$ |
67,950 |
|
On March 28, 2012, we entered into the Sixth Amendment and Modification Agreement to our credit agreement pursuant to which among other things, we extended the maturity date of our revolving loan by two years to June 15, 2014.
At June 30, 2012, we had $68,500 outstanding under our term loan, and $0 outstanding under our revolving loan with approximately $49,325 available for borrowings, after giving effect to $675 of outstanding letters of credit. We use the letters of credit as collateral for our workers compensation insurance programs and bonds issued on our behalf to secure our obligation to pay customs duties. Principal payments on the term loan are payable in quarterly installments of $275 with all remaining amounts due in 2014. We are permitted to voluntarily prepay all or part of the principal balance of the term loan with such prepayments applied to scheduled principal payments in inverse order of their maturity. In addition, subject to specified exceptions and limitations and reinvesting options, partial prepayments of outstanding loans may be required with the proceeds of asset sales, sales of equity and debt securities, and with certain insurance and condemnation proceeds.
MAIDENFORM BRANDS, INC. AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(in thousands, except share and per share amounts)
(unaudited)
Payments due on long-term debt during each of the five years subsequent to June 30, 2012, are as follows:
Balance of fiscal 2012 |
|
$ |
550 |
|
In fiscal 2013 |
|
1,100 |
| |
In fiscal 2014 |
|
66,850 |
| |
In fiscal 2015 |
|
|
| |
In fiscal 2016 |
|
|
| |
Thereafter |
|
|
|
3. STOCKHOLDERS EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated |
|
|
| ||||||
|
|
Common |
|
Treasury |
|
Additional |
|
|
|
Other |
|
Total |
| ||||||||||
|
|
Stock |
|
Stock |
|
Paid-in |
|
Retained |
|
Comprehensive |
|
Stockholders |
| ||||||||||
|
|
Shares |
|
$ |
|
Shares |
|
$ |
|
Capital |
|
Earnings |
|
Loss |
|
Equity |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Balance at December 31, 2011 |
|
24,399,732 |
|
$ |
244 |
|
(1,476,763 |
) |
$ |
(28,344 |
) |
$ |
78,362 |
|
$ |
181,227 |
|
$ |
(8,301 |
) |
$ |
223,188 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Stock-based compensation |
|
|
|
|
|
|
|
|
|
2,301 |
|
|
|
|
|
2,301 |
| ||||||
Equity award activity |
|
|
|
|
|
163,943 |
|
2,917 |
|
(1,980 |
) |
(1,153 |
) |
|
|
(216 |
) | ||||||
Comprehensive income |
|
|
|
|
|
|
|
|
|
|
|
17,229 |
|
(55 |
) |
17,174 |
| ||||||
Balance at June 30, 2012 |
|
24,399,732 |
|
$ |
244 |
|
(1,312,820 |
) |
$ |
(25,427 |
) |
$ |
78,683 |
|
$ |
197,303 |
|
$ |
(8,356 |
) |
$ |
242,447 |
|
4. STOCK REPURCHASE PROGRAM
Our stock repurchase program allows us to repurchase our shares from time to time pursuant to existing rules and regulations and other parameters approved by the board of directors. We did not repurchase any shares of our common stock during the six-month period ended June 30, 2012 and repurchased $1,961 of our common stock at an average price per share of $26.72 during the six-month period ended July 2, 2011. At June 30, 2012, we had $15,687 remaining available under our stock repurchase program.
5. INCOME TAXES
We review our annual effective tax rate on a quarterly basis and we make necessary changes if information or events warrant such changes. The annual effective tax rate is forecasted quarterly using actual historical information and forward-looking estimates. The estimated annual effective tax rate may fluctuate due to changes in forecasted annual operating income and changes to actual or forecasted permanent book to tax differences. The annual effective tax rate could also be impacted by discrete events that may occur on a quarterly basis. Examples of such discrete events are changes in valuation allowances, future tax settlements with state, federal or foreign tax authorities or impacts from state, federal or foreign tax law changes.
Our effective income tax rate for the three and six-month periods ended June 30, 2012 was 39.1%, as compared to an effective income tax rate for the three and six-month periods ended July 2, 2011 of 34.7% and 36.4%, respectively. The lower effective income tax rate in the three and six-month periods ended July 2, 2011 was primarily due to a discrete income tax benefit related to a New Jersey tax law change.
6. SEGMENT INFORMATION
We identified our two reportable segments as wholesale and retail. Our wholesale sales are to department stores, national chain stores, mass merchants (including warehouse clubs), specialty retailers, off-price retailers, and third-party distributors serving similar customers in foreign countries while our retail segment reflects our operations from our retail outlet stores and internet operations. Royalty income is also included in our wholesale segment. Within our reportable segments, wholesale includes corporate-related assets. Each segments results include the costs directly related to the segments net sales and all other costs allocated based on the relationship to consolidated net sales to support each segments net sales. Intersegment sales and transfers are recorded at cost and treated as a transfer of inventory.
MAIDENFORM BRANDS, INC. AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(in thousands, except share and per share amounts)
(unaudited)
Information on segments and reconciliation to income before provision for income taxes, are as follows:
|
|
Three Months Ended |
|
Six Months Ended |
| ||||||||
|
|
June 30, |
|
July 2, |
|
June 30, |
|
July 2, |
| ||||
|
|
2012 |
|
2011 |
|
2012 |
|
2011 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Net sales |
|
|
|
|
|
|
|
|
| ||||
Wholesale |
|
$ |
141,368 |
|
$ |
153,759 |
|
$ |
286,244 |
|
$ |
305,744 |
|
Retail |
|
16,117 |
|
16,267 |
|
28,787 |
|
27,843 |
| ||||
Total |
|
$ |
157,485 |
|
$ |
170,026 |
|
$ |
315,031 |
|
$ |
333,587 |
|
|
|
|
|
|
|
|
|
|
| ||||
Operating income |
|
|
|
|
|
|
|
|
| ||||
Wholesale (a) |
|
$ |
17,934 |
|
$ |
16,538 |
|
$ |
28,815 |
|
$ |
41,231 |
|
Retail |
|
1,054 |
|
1,401 |
|
12 |
|
223 |
| ||||
Operating income |
|
18,988 |
|
17,939 |
|
28,827 |
|
41,454 |
| ||||
Interest expense, net |
|
296 |
|
238 |
|
549 |
|
462 |
| ||||
Income before provision for income taxes |
|
$ |
18,692 |
|
$ |
17,701 |
|
$ |
28,278 |
|
$ |
40,992 |
|
|
|
|
|
|
|
|
|
|
| ||||
Depreciation and amortization |
|
|
|
|
|
|
|
|
| ||||
Wholesale |
|
$ |
973 |
|
$ |
642 |
|
$ |
1,977 |
|
$ |
1,512 |
|
Retail |
|
292 |
|
352 |
|
583 |
|
719 |
| ||||
Total |
|
$ |
1,265 |
|
$ |
994 |
|
$ |
2,560 |
|
$ |
2,231 |
|
|
|
|
|
|
|
|
|
|
| ||||
Amortization of intangible assets |
|
|
|
|
|
|
|
|
| ||||
Wholesale |
|
$ |
257 |
|
$ |
255 |
|
$ |
512 |
|
$ |
511 |
|
Retail |
|
17 |
|
17 |
|
34 |
|
34 |
| ||||
Total |
|
$ |
274 |
|
$ |
272 |
|
$ |
546 |
|
$ |
545 |
|
|
|
|
|
|
|
|
|
|
| ||||
Net sales by geographic area |
|
|
|
|
|
|
|
|
| ||||
United States |
|
$ |
142,714 |
|
$ |
153,313 |
|
$ |
283,776 |
|
$ |
303,558 |
|
International (b) |
|
14,771 |
|
16,713 |
|
31,255 |
|
30,029 |
| ||||
Total |
|
$ |
157,485 |
|
$ |
170,026 |
|
$ |
315,031 |
|
$ |
333,587 |
|
|
|
|
|
|
|
|
|
|
| ||||
Intersegment sales from wholesale to retail |
|
$ |
3,499 |
|
$ |
4,280 |
|
$ |
6,167 |
|
$ |
7,173 |
|
|
|
June 30, |
|
December 31, |
|
|
|
|
| ||
|
|
2012 |
|
2011 |
|
|
|
|
| ||
Total assets |
|
|
|
|
|
|
|
|
| ||
Wholesale |
|
$ |
390,872 |
|
$ |
366,037 |
|
|
|
|
|
Retail |
|
26,487 |
|
29,198 |
|
|
|
|
| ||
Total |
|
$ |
417,359 |
|
$ |
395,235 |
|
|
|
|
|
(a) Includes a litigation settlement of $6,750 expense recorded in the second quarter of 2011.
(b) International net sales are identified as international based on the location of the customer.
For the three and six-month periods ended June 30, 2012 and July 2, 2011, we had two customers, Wal-Mart and Kohls, that each accounted for more than 10% of our consolidated net sales.
MAIDENFORM BRANDS, INC. AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(in thousands, except share and per share amounts)
(unaudited)
7. EARNINGS PER SHARE
The following is a reconciliation of the basic number of common shares outstanding to diluted common and common equivalent shares outstanding:
|
|
Three Months Ended |
|
Six Months Ended |
| ||||||||
|
|
June 30, |
|
July 2, |
|
June 30, |
|
July 2, |
| ||||
|
|
2012 |
|
2011 |
|
2012 |
|
2011 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Net income |
|
$ |
11,384 |
|
$ |
11,564 |
|
$ |
17,229 |
|
$ |
26,077 |
|
Weighted average number of common and common equivalent shares outstanding: |
|
|
|
|
|
|
|
|
| ||||
Basic number of common shares outstanding |
|
23,052,429 |
|
22,810,905 |
|
22,995,539 |
|
22,799,378 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Impact of dilutive securities |
|
346,938 |
|
511,318 |
|
394,155 |
|
513,298 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Dilutive number of common and common equivalent shares outstanding |
|
23,399,367 |
|
23,322,223 |
|
23,389,694 |
|
23,312,676 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Basic earnings per common share |
|
$ |
0.49 |
|
$ |
0.51 |
|
$ |
0.75 |
|
$ |
1.14 |
|
Diluted earnings per common share |
|
$ |
0.49 |
|
$ |
0.50 |
|
$ |
0.74 |
|
$ |
1.12 |
|
For the three-month periods ended June 30, 2012 and July 2, 2011, approximately 260,000 and 13,000 shares, respectively, were not included in the computation of diluted earnings per share because of their anti-dilutive effect. For the six-month periods ended June 30, 2012 and July 2, 2011, approximately 210,000 and 8,000 shares, respectively, were not included in the computation of diluted earnings per share because of their anti-dilutive effect.
8. COMMITMENTS AND CONTINGENCIES
Purchase commitments
In the normal course of business, we enter into purchase commitments for both finished goods inventory and raw materials. At June 30, 2012, we had purchase commitments of $150,584 and believe that we have adequate reserves for any expected losses arising from all purchase commitments.
Litigation
We are a party to various legal actions arising in the ordinary course of business. Based on information presently available to us, we believe that we have adequate legal defenses, reserves or insurance coverage for these actions and that the ultimate outcome of these actions will not have a material adverse effect on our consolidated statements of financial position, results of operations or cash flows.
MAIDENFORM BRANDS, INC. AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(in thousands, except share and per share amounts)
(unaudited)
9. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES
|
|
June 30, |
|
December 31, |
| ||
|
|
2012 |
|
2011 |
| ||
|
|
|
|
|
| ||
Payroll and related benefits (including incentive compensation, vacation, and medical insurance) |
|
$ |
9,281 |
|
$ |
9,183 |
|
Accrued other |
|
17,600 |
|
15,784 |
| ||
|
|
$ |
26,881 |
|
$ |
24,967 |
|
Other accrued expenses and current liabilities include, among other items, sourcing commitments, customs duty, freight, trade promotions, professional fees, inventory return accrual and accrued severance.
10. RECENTLY ISSUED ACCOUNTING STANDARDS
In July 2012, the Financial Accounting Standards Board (FASB) issued guidance related to testing indefinite-lived intangible assets for impairment. The guidance permits an entity to perform a qualitative, rather than quantitative, assessment to determine whether or not it is more likely than not indefinite-lived intangible assets are impaired. The guidance is effective for annual and interim indefinite-lived intangible asset impairment tests performed for fiscal years beginning after September 15, 2012. Early adoption is permitted. The adoption of this guidance is not expected to have an impact on our financial position or results of operations.
In September 2011, the FASB issued guidance related to testing goodwill for impairment. The guidance permits an entity to first assess qualitative factors to determine if it is more likely than not that the fair value of a reporting unit is less than its carrying value. If it is concluded that this is the case, it is necessary to perform the two-step goodwill impairment test prescribed under current accounting requirements. Otherwise, the two-step goodwill impairment test is not required. We adopted the guidance effective January 1, 2012. We do not expect the adoption of this guidance to have an impact on our consolidated financial position or results of operations.
In June 2011, the FASB issued guidance on the presentation of comprehensive income. This guidance eliminates the current option to report other comprehensive income and its components in the statement of changes in equity. The guidance allows two presentation alternatives: (1) present items of net income and other comprehensive income in one continuous statement, referred to as the statement of comprehensive income; or (2) in two separate, but consecutive, statements of net income and other comprehensive income. In December 2011, the FASB issued guidance to defer the effective date of the specific requirement to present items that are reclassified out of accumulated other comprehensive income to net income alongside their respective components of net income and other comprehensive income. All other provisions of this update, which are to be applied retrospectively, are effective for fiscal years and interim periods within those years, beginning after December 15, 2011. We have included such disclosures within this quarterly report.
Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
You should read the following discussion and analysis in conjunction with our financial statements and related notes included elsewhere in this report. This report contains forward-looking statements relating to future events and our 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 report are based on information available to us on the date hereof. It is routine for our 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 we base our 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. Factors that could cause or contribute to such differences include those discussed below and elsewhere in this report, particularly in the section captioned PART II OTHER INFORMATION, Item 1A Risk Factors.
Management Overview
We are a global intimate apparel company with a portfolio of established, well-known brands, top-selling products and an iconic heritage. We design, source and market an extensive range of intimate apparel products, including bras, panties and shapewear. We sell our products through multiple distribution channels, including department stores and national chain stores (including third party distributors and independent stores), mass merchants (including warehouse clubs), other (including specialty retailers, off-price retailers and licensees), our company-operated outlet stores and our websites.
We sell our products under some of the most recognized brands in the intimate apparel industry. Our Maidenform, Control It!, Flexees, Lilyette and Maidenforms Charmed brands are sold in department stores and national chain stores. Our Bodymates, Inspirations, Self Expressions and Sweet Nothings brands are distributed through mass merchants. These mass merchant brands leverage our product technology, but are separate brands with distinctly different logos. In addition to our owned brands, we also supply private brands to certain retailers, including the Jennifer Lopez brand that launched at Kohls during the third quarter of 2012. We also sell the Donna Karan and DKNY licensed brands in the department stores and chains channel, domestically and internationally, as a result of our license agreement. This agreement grants us the rights to design, source and market a full collection of Donna Karan and DKNY womens intimate apparel products.
Trends in our business
We operate in two segments, wholesale and retail. Our wholesale segment includes both our domestic and international wholesale markets. Our retail segment includes our company-operated outlet stores and our websites.
We have identified near-term opportunities for growth and operational improvements, as well as challenges, including general macro-economic conditions that may affect our customers and our business. In particular, management believes that there are many factors influencing the intimate apparel industry, including but not limited to: consistent demand for foundation garments, consumer demand for innovative and leading brands, sourcing and supply chain efficiencies, continued growth of the mass merchant channel, pressure from retailers brought about by the consolidation in the retail industry, increases in the cost of the raw materials used in intimate apparel products and uncertainty surrounding import restrictions.
We believe we are well-positioned to capitalize on or address these trends by, among other things:
· continuing to launch innovative products and new brands;
· increasing our presence in department stores and national chain stores through the use of Maidenform, Control It!, Flexees, Lilyette and Maidenforms Charmed brands;
· expanding distribution of our Donna Karan and DKNY licensed brands;
· expanding shapewear awareness;
· increasing our presence in the mass merchant channel through the use of Bodymates, Inspirations, Self Expressions and Sweet Nothings brands;
· expanding our international presence;
· increasing consumer identification with our brands through further marketing investments;
· marketing, rather than manufacturing our brands, including the introduction of a new brand architecture that will redefine Maidenform as a womens bodywear company;
· making selective acquisitions, entering into license agreements, and developing and marketing new products that will complement our existing products or distribution channels; and
· merchandising, marketing and selling private brand products to selected retailers.
Wholesale segment
The following trends are among the key variables that will affect our wholesale segment:
Department stores and national chain stores. The department stores and national chain stores are where we generally sell the Maidenform, Control It!, Flexees, Lilyette and Maidenforms Charmed brands. We plan to continue to invest in increasing our net sales with department store and national chain store customers, which we believe is important to our long-term positioning in the channel. While we have grown our sales in the past several years with department stores and national chain stores, we expect the rate of our future net sales growth to be moderate. We have customers located outside the United States that purchase our Maidenform, Control It!, Flexees, Lilyette and Maidenforms Charmed brands. The majority of these net sales are included in the department stores and national chain stores channel. In addition to our owned brands, we also supply private brands to certain retailers, including the Jennifer Lopez brand to Kohls. We also sell the Donna Karan and DKNY brands in this channel, domestically and internationally, as a result of our license agreement. This agreement grants us the rights to design, source and market a full collection of Donna Karan and DKNY womens intimate apparel products.
Mass merchants. The mass merchant channel includes both mass merchants and warehouse clubs. We intend to improve our penetration with mass merchants through the use of our Bodymates, Inspirations, Self Expressions and Sweet Nothings brands. We have experienced meaningful growth in this channel over the past several years and expect to continue to achieve modest growth in the future as we are able to increase both the floor space and number of doors in which our products are sold, both domestically and internationally. We expect that both our net sales to this channel and our net sales to this channel as a percentage of our total net sales are likely to increase over time. The volume and mix of net sales of our brands in the mass merchant channel can vary from period to period based upon strategic changes that our customers may implement from time to time. Net sales to customers in the mass merchant channel that are located outside the United States are included in this channel.
Other. Net sales from the other channel, include sales to specialty retailers, off-price retailers and royalty income from licensees. We supply private brands to specialty retailers as opportunities present themselves and we continually evaluate this channel for new opportunities. The volume and mix of net sales of private label in the other channel can vary significantly from period to period based upon new product introductions. We expect net sales to decline in this channel in the near future. Net sales to customers in the other channel that are located outside the United States are included in this channel.
We selectively target strategic acquisitions, licensing opportunities or brand start-ups to grow our consumer base and would utilize any acquired companies and licenses to complement our current products, channels and geographic scope. We believe that acquisitions and licenses can enhance our product offerings to retailers and provide growth opportunities. We believe we can leverage our core competencies such as product development, brand management, logistics and marketing to create significant value from the acquired businesses and licenses as we did with the intimate apparel license agreement for the Donna Karan and DKNY brands.
We also generate net sales from licensing our brand names to qualified partners for natural line extensions in the intimate apparel market such as girls bras, swimwear and bra accessories. Licensing royalties account for less than 1% of our total net sales. Our licensed products are sold at department stores, at national chains and mass merchants, at our company-operated outlet stores and through our websites. We believe that we can potentially expand our licensing activities beyond our current offerings.
Retail segment
We believe our retail sales volume is driven by our ability to service our existing consumers and obtain new consumers, as well as overall general macro-economic conditions that can affect our consumers and ultimately their levels of overall spending and choice of retail channel for their purchases. Additionally, identifying optimal retail outlet locations, favorable leasing arrangements, and improving our store productivity are factors important to growing our retail segments net sales. We also sell our products through our websites, www.maidenform.com and www.maidenform.co.uk. Although we currently do not generate a significant amount of net sales through these sites, we do expect it to continue to grow.
Our objectives in our retail segment are to continue to increase the productivity of our portfolio of stores through effective merchandising and focused advertising, as well as selectively closing less productive locations and potentially opening new stores in more productive locations. Even in those situations where we selectively close less productive outlet stores and do not open a new store in that region, we believe those consumers still purchase many of our Maidenform brands from our other outlet stores, our websites or our wholesale segment customers that carry these brands. Our company-operated outlet stores reduce our dependence on off-price retailers and increase brand awareness through direct-to-consumer sale of our products. We had 75 retail outlet stores as of June 30, 2012 compared to 74 retail outlet stores as of July 2, 2011.
Results of Operations
Included in this presentation are discussions and reconciliations of operating income and net income in accordance with generally accepted accounting principles (GAAP) to operating income and net income excluding a litigation settlement. Each of these adjustments was selected because our management uses these non-GAAP measures in discussing and analyzing our results of operations and because we believe the non-GAAP measures provide investors with greater transparency by helping to illustrate the underlying financial and business trends relating to our results of operations, financial condition and comparability between current and prior periods.
|
|
Three Months Ended |
|
Six Months Ended |
| |||||||||||||||
|
|
June 30, |
|
July 2, |
|
June 30, |
|
July 2, |
| |||||||||||
|
|
2012 |
|
2011 |
|
2012 |
|
2011 |
| |||||||||||
OPERATING DATA: (in millions) |
|
|
|
|
|
|
|
|
| |||||||||||
Wholesale sales |
|
$ |
141.4 |
|
$ |
153.8 |
|
$ |
286.2 |
|
$ |
305.8 |
| |||||||
Retail sales |
|
16.1 |
|
16.2 |
|
28.8 |
|
27.8 |
| |||||||||||
Net sales |
|
157.5 |
|
170.0 |
|
315.0 |
|
333.6 |
| |||||||||||
Cost of sales |
|
103.9 |
|
110.9 |
|
218.5 |
|
218.8 |
| |||||||||||
Gross profit |
|
53.6 |
|
59.1 |
|
96.5 |
|
114.8 |
| |||||||||||
Selling, general and administrative expenses |
|
34.6 |
|
34.3 |
|
67.7 |
|
66.5 |
| |||||||||||
Litigation settlement |
|
|
|
6.8 |
|
|
|
6.8 |
| |||||||||||
Operating income |
|
$ |
19.0 |
|
$ |
18.0 |
|
$ |
28.8 |
|
$ |
41.5 |
| |||||||
|
|
|
| |||||||||||||||||
|
|
As a Percentage of Net Sales |
| |||||||||||||||||
|
|
Three Months Ended |
|
Six Months Ended |
| |||||||||||||||
|
|
June 30, |
|
July 2, |
|
June 30, |
|
July 2, |
| |||||||||||
|
|
2012 |
|
2011 |
|
2012 |
|
2011 |
| |||||||||||
OPERATING DATA: |
|
|
|
|
|
|
|
|
| |||||||||||
Wholesale sales |
|
89.8 |
% |
90.5 |
% |
90.9 |
% |
91.7 |
% | |||||||||||
Retail sales |
|
10.2 |
|
9.5 |
|
9.1 |
|
8.3 |
| |||||||||||
Net sales |
|
100.0 |
|
100.0 |
|
100.0 |
|
100.0 |
| |||||||||||
Cost of sales |
|
66.0 |
|
65.2 |
|
69.4 |
|
65.6 |
| |||||||||||
Gross profit |
|
34.0 |
|
34.8 |
|
30.6 |
|
34.4 |
| |||||||||||
Selling, general and administrative expenses |
|
21.9 |
|
20.2 |
|
21.5 |
|
19.9 |
| |||||||||||
Litigation settlement |
|
|
|
4.0 |
|
|
|
2.1 |
| |||||||||||
Operating income |
|
12.1 |
% |
10.6 |
% |
9.1 |
% |
12.4 |
% | |||||||||||
Our net sales are derived from two segments, wholesale and retail. Our net sales within the wholesale segment are grouped by channel, based upon the brands we sell and the customers to whom we sell, as follows: (1) department stores and national chain stores (including third party distributors and independent stores), (2) mass merchants (including warehouse clubs) and (3) other.
Our department stores and national chain stores channel (including third party distributors and independent stores) primarily consists of sales of our Maidenform, Control It!, Flexees, Lilyette and Maidenforms Charmed brands on a worldwide basis to customers within this category. Within the mass merchant channel (including warehouse clubs), we sell brands such as Bodymates, Inspirations, Self Expressions and Sweet Nothings that are primarily dedicated to specific customers. These brands are all sold on a worldwide basis to mass merchants and, to a lesser degree, warehouse clubs. Our remaining sales are grouped within a channel designated as other and include private brand products sold to specialty retailers and all brand sales to off-price retail stores on a worldwide basis. In addition, we include licensing income in our other channel.
|
|
Three Months Ended |
|
Six Months Ended |
| ||||||||||||||||||
|
|
June 30, |
|
July 2, |
|
$ |
|
% |
|
June 30, |
|
July 2, |
|
$ |
|
% |
| ||||||
|
|
2012 |
|
2011 |
|
change |
|
change |
|
2012 |
|
2011 |
|
change |
|
change |
| ||||||
|
|
(in millions) |
|
(in millions) |
| ||||||||||||||||||
Department stores and national chain stores |
|
$ |
70.4 |
|
$ |
69.7 |
|
$ |
0.7 |
|
1.0 |
% |
$ |
129.0 |
|
$ |
133.4 |
|
$ |
(4.4 |
) |
(3.3 |
)% |
Mass merchants |
|
48.2 |
|
56.8 |
|
(8.6 |
) |
(15.1 |
) |
107.2 |
|
114.8 |
|
(7.6 |
) |
(6.6 |
) | ||||||
Other |
|
22.8 |
|
27.3 |
|
(4.5 |
) |
(16.5 |
) |
50.0 |
|
57.6 |
|
(7.6 |
) |
(13.2 |
) | ||||||
Total wholesale |
|
141.4 |
|
153.8 |
|
(12.4 |
) |
(8.1 |
) |
286.2 |
|
305.8 |
|
(19.6 |
) |
(6.4 |
) | ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Retail |
|
16.1 |
|
16.2 |
|
(0.1 |
) |
(0.6 |
) |
28.8 |
|
27.8 |
|
1.0 |
|
3.6 |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Total consolidated net sales |
|
$ |
157.5 |
|
$ |
170.0 |
|
$ |
(12.5 |
) |
(7.4 |
)% |
$ |
315.0 |
|
$ |
333.6 |
|
$ |
(18.6 |
) |
(5.6 |
)% |
In addition, our mix of products sold worldwide between bras, shapewear and panties for the three and six-month periods ended June 30, 2012 and July 2, 2011, respectively, is summarized below:
|
|
Three Months Ended |
|
Six Months Ended |
| ||||
|
|
June 30, |
|
July 2, |
|
June 30, |
|
July 2, |
|
|
|
2012 |
|
2011 |
|
2012 |
|
2011 |
|
Bras |
|
59 |
% |
57 |
% |
57 |
% |
57 |
% |
Shapewear |
|
34 |
|
37 |
|
36 |
|
37 |
|
Panties |
|
7 |
|
6 |
|
7 |
|
6 |
|
|
|
100 |
% |
100 |
% |
100 |
% |
100 |
% |
Net sales
Consolidated net sales decreased by $12.5 million, or 7.4%, from $170.0 million for the three months ended July 2, 2011 to $157.5 million for the three months ended June 30, 2012. Consolidated net sales decreased by $18.6 million, or 5.6%, from $333.6 million for the six months ended July 2, 2011 to $315.0 million for the six months ended June 30, 2012.
Wholesale segment net sales decreased by $12.4 million, or 8.1%, from $153.8 million for the three months ended July 2, 2011 to $141.4 million for the three months ended June 30, 2012. Total international net sales, which are included in our wholesale segment, decreased by $1.9 million, or 11.4%, from $16.7 million for the three months ended July 2, 2011 to $14.8 million for the three months ended June 30, 2012. The international sales decrease was driven by lower sales in our major European markets, such as the United Kingdom and the Benelux countries that was partially offset by increases in Canada and Mexico, along with unfavorable currency exchange rates. Our department stores and national chain stores channel net sales increased by $0.7 million, or 1.0%, from $69.7 million for the three months ended July 2, 2011 to $70.4 million for the three months ended June 30, 2012. During the second quarter of 2012, we shipped the Jennifer Lopez brand for the first time to a chain store customer which was partially offset by declines at a
mid-tier department store as it transitions to a new pricing and merchandising strategy. Our mass merchant channel net sales decreased by $8.6 million, or 15.1%, from $56.8 million for the three months ended July 2, 2011 to $48.2 million for the three months ended June 30, 2012. This decrease was a result of a program shift at a warehouse club which will take place July of 2012 compared to June of 2011 and varying results with other mass merchant customers. Other channel net sales, which include sales to specialty retailers, off-price retailers and licensing income, decreased by $4.5 million, or 16.5%, from $27.3 million for the three months ended July 2, 2011 to $22.8 million for the three months ended June 30, 2012. This decrease was due primarily from lower anticipated sales to a specialty retailer that was somewhat offset by increased sales to off-price retailers.
Wholesale segment net sales decreased by $19.6 million, or 6.4%, from $305.8 million for the six months ended July 2, 2011 to $286.2 million for the six months ended June 30, 2012. Total international net sales increased by $1.3 million, or 4.3%, from $30.0 million for the six months ended July 2, 2011 to $31.3 million for the six months ended June 30, 2012, resulting from increased sales to major markets, such as Canada and the United Kingdom. Partially offsetting these increases were sales decreases in other major markets, such as the Benelux countries, and the impact of unfavorable currency exchange rates. Our department stores and national chain stores channel net sales decreased by $4.4 million, or 3.3%, from $133.4 million for the six months ended July 2, 2011 to $129.0 million for the six months ended June 30, 2012. The decrease was primarily due to a reduction in replenishment sales, as well as sales declines at a mid-tier department store as it transitions to a new pricing and merchandising strategy, and an assortment expansion in 2011 at one of our chain store customers that did not repeat in 2012. During the second quarter of 2012, we shipped the Jennifer Lopez brand for the first time to Kohls which partially offset the sales decline. Our mass merchant channel net sales decreased by $7.6 million, or 6.6%, from $114.8 million for the six months ended July 2, 2011 to $107.2 million for the six months ended June 30, 2012 primarily resulting from the reasons mentioned above. Other channel net sales decreased by $7.6 million, or 13.2%, from $57.6 million for the six months ended July 2, 2011 to $50.0 million for the six months ended June 30, 2012 resulting primarily from lower anticipated sales to a specialty retailer.
Net sales in our retail segment decreased by $0.1 million, or 0.6%, from $16.2 million for the three months ended July 2, 2011 to $16.1 million for the three months ended June 30, 2012. Net sales in our retail segment increased by $1.0 million, or 3.6%, from $27.8 million for the six months ended July 2, 2011 to $28.8 million for the six months ended June 30, 2012. This increase of $1.0 million is a result of our e-commerce growth, partially offset by decreased customer traffic in our outlet stores. Same store sales, defined as sales from stores open more than one year, decreased 3.6% for the three months ended June 30, 2012, and remained flat for the six months ended June 30, 2012. Our internet sales increased by $0.5 million, or 27.8%, from $1.8 million for the three months ended July 2, 2011 to $2.3 million for the three months ended June 30, 2012 and increased by $1.3 million, or 39.4%, from $3.3 million for the six months ended July 2, 2011 to $4.6 million for the six months ended June 30, 2012.
Gross profit
Consolidated gross profit decreased by $5.5 million, or 9.3%, from $59.1 million for the three months ended July 2, 2011 to $53.6 million for the three months ended June 30, 2012. As a percentage of net sales, consolidated gross margins decreased by 80 basis points from 34.8% for the three months ended July 2, 2011 to 34.0% for the three months ended June 30, 2012. Consolidated gross profit decreased by $18.3 million, or 15.9%, from $114.8 million for the six months ended July 2, 2011 to $96.5 million for the six months ended June 30, 2012. As a percentage of net sales, gross profit decreased by 380 basis points from 34.4% for the six months ended July 2, 2011 to 30.6% for the six months ended June 30, 2012.
Gross profit as a percentage of net sales for our wholesale segment decreased by 110 basis points from 32.0% for the three months ended July 2, 2011 to 30.9% for the three months ended June 30, 2012. This decrease was primarily driven by increased promotional and off-price activity to drive inventory productivity. Partially offsetting this decrease was a favorable mix of sales by channel. Gross profit as a percentage of net sales for our wholesale segment was 27.6% for the six months ended June 30, 2012 as compared to 32.1% for the six months ended July 2, 2011. This decrease of 450 basis points is mainly a result of the reasons mentioned above.
Gross profit as a percentage of net sales for our retail segment increased by 40 basis points from 61.1% for the three months ended July 2, 2011 to 61.5% for the three months ended June 30, 2012, and increased 70 basis points from 60.1% for the six months ended July 2, 2011 to 60.8% for the six months ended June 30, 2012.
Selling, general and administrative expenses (SG&A)
Consolidated SG&A increased by $0.3 million, or 0.9%, from $34.3 million for the three months ended July 2, 2011 to $34.6 million for the three months ended June 30, 2012. As a percentage of net sales, SG&A increased from 20.2% for the three months ended July 2, 2011 to 21.9% for the three months ended June 30, 2012. Consolidated SG&A increased by $1.2 million, or 1.8%, from $66.5 million for the six months ended July 2, 2011 to $67.7 million for the six months ended June 30, 2012. As a percentage of net sales, SG&A increased from 19.9% for the six months ended July 2, 2011 to 21.5% for the six months ended June 30, 2012.
SG&A for our wholesale segment, which includes corporate-related expenses, decreased by $0.1 million, or 0.4%, from $25.8 million for the three months ended July 2, 2011 to $25.7 million for the three months ended June 30, 2012. As a percentage of net sales, wholesale segment SG&A increased from 16.8% for the three months ended July 2, 2011 to 18.2% for the three months ended June 30, 2012. The decrease of $0.1 million was primarily a result of lower professional fees of $0.8 million in addition to other department savings. Partially offsetting these decreases was an increase in payroll and related benefits of $0.9 million.
SG&A for our wholesale segment increased by $0.2 million, or 0.4%, from $50.0 million for the six months ended July 2, 2011 to $50.2 million for the six months ended June 30, 2012. The increase of $0.2 million was a result of the reasons mentioned above. As a percentage of net sales, wholesale segment SG&A increased from 16.4% for the six months ended July 2, 2011 to 17.5% for the six months ended June 30, 2012.
Retail SG&A increased by $0.4 million, or 4.7%, from $8.5 million for the three months ended July 2, 2011 to $8.9 million for the three months ended June 30, 2012. Retail SG&A increased by $1.0 million, or 6.1%, from $16.5 million for the six months ended July 2, 2011 to $17.5 million for the six months ended June 30, 2012. These increases were primarily the result of increased operating expenses, including costs associated with our e-commerce strategies, as well as store lease renewals.
Litigation settlement
We entered into a litigation settlement agreement in August 2011. In connection with the settlement, we paid $6.8 million ($4.1 million after tax).
Operating income
Our consolidated operating income, increased by $1.0 million, or 5.6%, from $18.0 million for the three months ended July 2, 2011 to $19.0 million for the three months ended June 30, 2012 and decreased by $12.7 million, or 30.6%, from $41.5 million for the six months ended July 2, 2011 to $28.8 million for the six months ended June 30, 2012.
Continued consolidated operating income for the second quarter and six months ended June 30, 2012, which excludes the litigation settlement of $6.8 million in the second quarter of last year, decreased $5.8 million, or 23.4%, to $19.0 million and decreased $19.5 million, or 40.4%, to $28.8 million, respectively.
For the foregoing reasons, operating income for our wholesale segment, increased by $1.4 million, or 8.4%, from $16.6 million for the three months ended July 2, 2011 to $18.0 million for the three months ended June 30, 2012 and decreased by $12.5 million, or 30.3%, from $41.3 million during the six months ended July 2, 2011 to $28.8 million during the six months ended June 30, 2012.
Continued operating income for our wholesale segment for the second quarter and six months ended June 30, 2012, which excludes the litigation settlement of $6.8 million in the second quarter of last year, decreased by $5.4 million, or 23.1%, to $18.0 million and decreased by $19.3 million, or 40.1%, to $28.8 million, respectively.
Also, for the reasons discussed above, operating income for our retail segment decreased by $0.4 million, or 28.6%, from $1.4 million for the three months ended July 2, 2011 to $1.0 million for the three months ended June 30, 2012 and decreased by $0.2 million, or 100%, from $0.2 million during the six months ended July 2, 2011 to breakeven during the six months ended June 30, 2012.
Interest expense, net
Interest expense, net, for the three months ended June 30, 2012 was $0.2 million compared to $0.3 million for the three months ended July 2, 2011. The average balance of total debt outstanding decreased from $69.9 million for the three months ended July 2, 2011 to $68.8 million for the three months ended June 30, 2012, and the average interest rate during the three months ended July 2, 2011 was 1.2% as compared to an average interest rate of 1.3% during the three months ended June 30, 2012.
Interest expense, net, remained unchanged at $0.5 million for the six-month periods ended June 30, 2012 and July 2, 2011. The average balance of total debt outstanding decreased from $70.0 million for the six months ended July 2, 2011 to $68.9 million for the six months ended June 30, 2012. The average interest rate during the six-month periods ended June 30, 2012 and July 2, 2011 remained unchanged at 1.3%.
Income tax expense
We review our annual effective tax rate on a quarterly basis and we make necessary changes if information or events warrant such changes. The annual effective tax rate is forecasted quarterly using actual historical information and forward-looking estimates. The estimated annual effective tax rate may fluctuate due to changes in forecasted annual operating income and changes to actual or forecasted permanent book to tax differences. The annual effective tax rate could also be impacted by discrete events that may occur on a quarterly basis. Examples of such discrete events are changes in valuation allowances, future tax settlements with state, federal or foreign tax authorities or impacts from state, federal or foreign tax law changes.
Our effective income tax rate for the three and six-month periods ended June 30, 2012 was 39.1%, as compared to an effective income tax rate for the three and six-month periods ended July 2, 2011 of 34.7% and 36.4%, respectively. The lower effective income tax rate in the three and six-month periods ended July 2, 2011 was primarily due to a discrete income tax benefit related to a New Jersey tax law change.
Net income
For the foregoing reasons, our net income decreased by $0.2 million, or 1.7%, from $11.6 million for the three months ended July 2, 2011 to $11.4 million for the three months ended June 30, 2012. Excluding the aforementioned litigation settlement of $4.1 million after tax, or $0.17 EPS, net income decreased by $4.3 million, or 27.4%, from $15.7 million for the three months ended July 2, 2011 to $11.4 million for the three months ended June 30, 2012.
Our net income decreased by $8.9 million, or 34.1%, from $26.1 million for the six months ended July 2, 2011 to $17.2 million for the six months ended June 30, 2012. Excluding the aforementioned litigation settlement of $4.1 million after tax, or $0.17 EPS, net income decreased by $13.0 million, or 43.0%, from $30.2 million for the six months ended July 2, 2011 to $17.2 million for the six months ended June 30, 2012.
Liquidity and Capital Resources
Operating activities. Cash flows used in operating activities were $5.1 million for the six months ended June 30, 2012 compared to cash flows used in operating activities of $22.3 million for the six months ended July 2, 2011. This change was primarily driven by uses in cash resulting from reduced working capital needs partially offset by a decrease in net income. The decrease in inventory and accounts payable when compared to the prior year change was the result of supply chain management and controlling the inventory flow from our suppliers. The decrease in accounts receivable when compared to the prior year change is primarily due to lower sales.
Investing activities. Cash flows used in investing activities were $2.8 million for the six months ended June 30, 2012 compared to $3.2 million for the six months ended July 2, 2011. Cash flows used in investing activities for the six months ended June 30, 2012 and July 2, 2011 primarily related to information technology upgrades, including the implementation of an enterprise resource planning system which started in 2009 and is being phased in and the implementation of retail systems which are expected to be placed into service during the second half of 2012.
Financing activities. Cash flows used in financing activities were $1.0 million for the six months ended June 30, 2012 compared to cash flows used in financing activities of $1.3 million for the six months ended July 2, 2011. The decrease in cash flows used in financing activities was primarily due to the $2.0 million repurchase of our common stock under our stock repurchase program during the first half of 2011 that did not repeat during the first half of 2012 partially offset by lower proceeds from the exercise of equity awards by our employees.
Our stock repurchase program allows us to repurchase our shares from time to time pursuant to existing rules and regulations and other parameters approved by the board of directors. At June 30, 2012, we had $15.6 million remaining available under our stock repurchase program. During the first six months of 2011, we repurchased $2.0 million of common stock at an average price per share of $26.72.
On March 28, 2012, we entered into the Sixth Amendment and Modification Agreement to our credit agreement pursuant to which, among other things, we extended the maturity of our revolving loan by two years to June 15, 2014.
At June 30, 2012 we had $68.5 million outstanding under our term loan, and $0 outstanding under our revolving loan with approximately $49.3 million available for borrowings, after giving effect to $0.7 million of outstanding letters of credit. Principal payments on the term loan are payable in quarterly installments of $0.3 million with all remaining amounts due in 2014. We are permitted to voluntarily prepay all or part of the principal balance of the term loan with such prepayments applied to scheduled principal payments in inverse order of their maturity. We were in compliance with all debt covenants at June 30, 2012.
Below is a summary of our actual performance under these financial covenants:
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|
June 30, 2012 |
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December 31, |
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|
|
|
|
|
|
Actual fixed charge coverage ratio (a) |
|
2.62 : 1.00 |
|
2.32 : 1.00 |
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Minimum fixed charge coverage ratio required |
|
1.25 : 1.00 |
|
1.25 : 1.00 |
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|
|
|
|
|
|
Actual fixed charge coverage ratio (b) |
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N/A |
|
1.51 : 1.00 |
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Minimum fixed charge coverage ratio required |
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N/A |
|
0.85 : 1.00 |
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|
|
|
|
|
|
Actual leverage ratio (c) |
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0.20 : 1.00 |
|
0.03 : 1.00 |
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Maximum leverage ratio permitted |
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3.25 : 1.00 |
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4.00 : 1.00 |
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|
|
|
|
|
|
Actual leverage ratio (d) |
|
1.37 : 1.00 |
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N/A |
|
Maximum leverage ratio permitted |
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3.25 : 1.00 |
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N/A |
|
|
|
|
|
|
|
Actual consolidated capital expenditures |
|
$2,835 |
|
$8,585 |
|
Maximum consolidated capital expenditures permitted |
|
$11,415 |
|
$13,116 |
|
(a) Coverage ratio computed as the ratio of earnings available for fixed charges to fixed charges. Earnings available for fixed charges consist of consolidated earnings before interest, taxes, depreciation and amortization (EBITDA) and certain non-cash charges less capital expenditures. Fixed charges consist of consolidated interest expense, scheduled principal payments on our long-term debt, cash taxes paid and permitted restricted junior payments including certain adjustments allowed under our credit facility.
(b) Coverage ratio computed as the ratio of earnings available for fixed charges to fixed charges. Fixed charges consist of consolidated interest expense, scheduled principal payments on our long-term debt, cash taxes paid and permitted restricted junior payments excluding certain adjustments allowed under our credit facility.
(c) Leverage ratio computed as the ratio of total net debt to consolidated EBITDA and certain non-cash charges. Total net debt is defined as total long-term debt less total cash and cash equivalents.
(d) Leverage ratio computed as the ratio of total debt to consolidated EBITDA and certain non-cash charges.
Contractual Obligations, Commitments and Off-Balance Sheet Arrangements
We have various contractual obligations which are recorded as liabilities in our condensed consolidated financial statements. Other items, such as certain purchase commitments and other executory contracts, are not recognized as liabilities in our condensed consolidated financial statements but are required to be disclosed. For example, we are contractually committed to make certain minimum lease payments for the use of property under operating lease agreements.
The following table summarizes our significant contractual obligations and commercial commitments at June 30, 2012 and the future periods in which such obligations are expected to be settled in cash. In addition, the table below reflects the timing of principal and interest payments on outstanding borrowings.
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Balance of |
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|
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|
fiscal |
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In fiscal |
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In fiscal |
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In fiscal |
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In fiscal |
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(in millions) |
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2012 |
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2013 |
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2014 |
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2015 |
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2016 |
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Thereafter |
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Total |
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|
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|
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|
|
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| |||||||
Long-term debt |
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$ |
0.6 |
|
$ |
1.1 |
|
$ |
66.8 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
68.5 |
|
Interest on long-term debt (1) |
|
0.4 |
|
0.9 |
|
0.4 |
|
|
|
|
|
|
|
1.7 |
| |||||||
Obligations under capital lease (2) |
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0.2 |
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0.2 |
|
|
|
|
|
|
|
|
|
0.4 |
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Operating leases (3) |
|
4.7 |
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6.6 |
|
5.1 |
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3.7 |
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2.7 |
|
7.8 |
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30.6 |
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Total financial obligations |
|
5.9 |
|
8.8 |
|
72.3 |
|
3.7 |
|
2.7 |
|
7.8 |
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101.2 |
| |||||||
Other contractual obligations (4) |
|
3.1 |
|
5.8 |
|
8.2 |
|
7.0 |
|
5.3 |
|
33.3 |
|
62.7 |
| |||||||
Purchase obligations (5) |
|
147.6 |
|
3.0 |
|
|
|
|
|
|
|
|
|
150.6 |
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Total financial obligations and commitments |
|
$ |
156.6 |
|
$ |
17.6 |
|
$ |
80.5 |
|
$ |
10.7 |
|
$ |
8.0 |
|
$ |
41.1 |
|
$ |
314.5 |
|
(1) The interest rate assumed was the rate in effect at June 30, 2012.
(2) Includes amounts classified as interest expense under capital leases.
(3) The operating leases included in the above table consist of minimum rent payments and do not include contingent rent based upon sales volume, or variable costs such as maintenance, insurance or taxes.
(4) Includes amounts classified as royalties, advertising and marketing obligations.
(5) Unconditional purchase obligations are defined as agreements to purchase goods that are enforceable and legally binding on us and that specify all significant terms, including fixed or minimum quantities to be purchased; fixed, minimum, or variable price provisions; and the approximate timing of the transaction. The purchase obligations category above relates to commitments for inventory and raw material purchases. Amounts reflected in our condensed consolidated balance sheets in accounts payable or other current liabilities are excluded from the table above.
At June 30, 2012, our total liabilities for unrecognized tax benefits and related interest and penalties amounted to $3.3 million (before federal and, if applicable, state effect). At June 30, 2012, we also had pension and post-retirement benefit obligations included in other non-current liabilities of $8.1 million and $0.6 million, respectively. These liabilities for unrecognized tax benefits and pension and postretirement benefit obligations have not been included in the schedule of cash contractual obligations above because we cannot make a reasonably reliable estimate of the amount and period of related future payments of these liabilities.
Off-Balance Sheet Arrangements. Our most significant off-balance sheet financing arrangements as of June 30, 2012 are non-cancelable operating lease agreements, primarily for our company-operated outlet stores, our company headquarters and our leased distribution centers located in Shannon, Ireland and Fayetteville, North Carolina. We do not participate in any off-balance sheet arrangements involving unconsolidated subsidiaries that provide financing or potentially expose us to unrecorded financial obligations.
Critical Accounting Policies and Estimates
Our discussion and analysis of our financial condition and results of operations is based upon our condensed consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues, expenses, and related disclosure of contingent assets and liabilities. We base our estimates on historical experience and on various other assumptions that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. A summary of our significant accounting policies and a description of accounting policies that we believe are most critical may be found in the Managements Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the year ended December 31, 2011.
Recently Issued Accounting Standards
In July 2012, the Financial Accounting Standards Board (FASB) issued guidance related to testing indefinite-lived intangible assets for impairment. The guidance permits an entity to perform a qualitative, rather than quantitative, assessment to determine whether or not it is more likely than not indefinite-lived intangible assets are impaired. The guidance is effective for annual and interim indefinite-lived intangible asset impairment tests performed for fiscal years beginning after September 15, 2012. Early adoption is permitted. The adoption of this guidance is not expected to have an impact on our financial position or results of operations.
In September 2011, the FASB issued guidance related to testing goodwill for impairment. The guidance permits an entity to first assess qualitative factors to determine if it is more likely than not that the fair value of a reporting unit is less than its carrying value. If it is concluded that this is the case, it is necessary to perform the two-step goodwill impairment test prescribed under current accounting requirements. Otherwise, the two-step goodwill impairment test is not required. We adopted the guidance effective January 1, 2012. We do not expect the adoption of this guidance to have an impact on our consolidated financial position or results of operations.
In June 2011, the FASB issued guidance on the presentation of comprehensive income. This guidance eliminates the current option to report other comprehensive income and its components in the statement of changes in equity. The guidance allows two presentation alternatives: (1) present items of net income and other comprehensive income in one continuous statement, referred to as the statement of comprehensive income; or (2) in two separate, but consecutive, statements of net income and other comprehensive income. In December 2011, the FASB issued guidance to defer the effective date of the specific requirement to present items that are reclassified out of accumulated other comprehensive income to net income alongside their respective components of net income and other comprehensive income. All other provisions of this update, which are to be applied retrospectively, are effective for fiscal years and interim periods within those years, beginning after December 15, 2011. We have included such disclosures within this quarterly report.
Item 3. Quantitative and Qualitative Disclosures about Market Risk
Foreign Currency Risk. We do not believe that we have significant foreign currency transactional exposures. For the three and six-month periods ended June 30, 2012, $9.9 million and $17.9 million, respectively, of our total net sales were in currencies other than the U.S. dollar. During the three and six-month periods ended June 30, 2012, our net sales were unfavorably impacted by $0.9 million and $1.2 million, respectively, due to fluctuations in foreign currency exchange rates. Most of our purchases are denominated in U.S. dollars. The impact of a 10% unfavorable change in the exchange rate of the U.S. dollar against the prevailing market rates of the foreign currencies in which we have transactional exposures would be immaterial.
Interest Rate Risk. From time to time, we manage our interest rate risk through the use of interest rate swaps. At June 30, 2012, our debt portfolio was composed of variable-rate debt, with no portion hedged. With respect to our variable-rate debt, a 1% change in interest rates would be immaterial.
Commodity Price Risk. We are subject primarily to commodity price risk arising from fluctuations in the market prices of raw materials used in the garments purchased from our sourcing vendors, if they pass along these increased costs. During the past five years, there has been no significant impact from commodity price fluctuations, and we do not currently use derivative instruments in the management of these risks. On a going-forward basis, fluctuations in crude oil prices or petroleum based product prices may also influence the prices of the related items such as chemicals, dyestuffs, man-made fibers and foam, and transportation costs. Raw material price increases could increase our cost of sales and decrease our profitability unless we are able to pass our higher costs on to our customers.
Inflation Risk. We are affected by inflation and changing prices from our suppliers primarily through the cost of raw materials, increased operating costs and expenses, and fluctuations in interest rates. The effects of inflation on our net sales and operations have not been material in recent years. Although, we do not believe that inflation risk is material to our business or our consolidated financial position, results of operations or cash flows, we cannot assure that changes in inflation will not have an impact. In the future, volatile crude oil and gasoline prices may impact our product and freight costs, consumer confidence and disposable income.
Seasonality. We have not experienced any significant seasonal fluctuations in our net sales or our profitability.
Item 4. Controls and Procedures
(a) Evaluation of Disclosure Controls and Procedures.
Our management, including the Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures, (as defined in Rules 13a-15(e) and 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended (the Exchange Act)), as of the end of the period covered by this report. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of such date, our disclosure controls and procedures were effective as of June 30, 2012 to ensure that the information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and to ensure that information is accumulated and communicated to our management, including the Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.
(b) Changes in Internal Controls over Financial Reporting.
There was no change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) promulgated under the Exchange Act) during our fiscal quarter ended June 30, 2012, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
We are a party to various legal actions arising in the ordinary course of business. Based on information presently available to us, we believe that we have adequate legal defenses, reserves and/or insurance coverage for these actions and that the ultimate outcome of these actions will not have a material adverse effect on our consolidated statements of financial position, results of operations or cash flows.
Risks that could have a negative impact on our business, results of operations and financial condition include: our 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; we have 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; our credit agreement could limit our ability to obtain additional financing and restrict our growth opportunities; external events may disrupt our supply chain, result in increased cost of goods or an inability to deliver our products; events which result in difficulty in procuring or producing products on a cost-effective basis; disputes with third parties for infringement or misappropriation of their proprietary rights; 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 have a material and adverse impact on our business, results of operations and financial condition. A more detailed description of each of these and other important risk factors can be found under the caption Risk Factors in our most recent Form 10-K, filed with the Securities and Exchange Commission on March 9, 2012.
There are no material changes to the risk factors described in the Form 10-K filed on March 9, 2012.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
(a) None.
(b) None.
(c) None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
N/A
None.
The following exhibits are filed as part of this Quarterly Report on Form 10-Q:
31.1 |
|
Certification by Chief Executive Officer pursuant to Exchange Act Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
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|
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31.2 |
|
Certification by Chief Financial Officer pursuant to Exchange Act Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
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|
|
32.1 |
|
Certification by Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
|
|
|
32.2 |
|
Certification by Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
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|
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101* |
|
Interactive data files: (i) Condensed Consolidated Balance Sheets at June 30, 2012 and December 31, 2011, (ii) Condensed Consolidated Statements of Income for the Three and Six Months Ended June 30, 2012 and July 2, 2011, (iii) Condensed Consolidated Statement of Comprehensive Income for the Three and Six Months Ended June 30, 2012 and July 2, 2011, (iv) |
|
|
Condensed Consolidated Statement of Cash Flows for the Six Months Ended June 30, 2012 and July 2, 2011 and (v) Notes to the Condensed Consolidated Financial Statements. |
* - Pursuant to Rule 406T of Regulation S-T, the interactive data files on Exhibit 101 hereto are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
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MAIDENFORM BRANDS, INC. | |
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Date: August 8, 2012 |
By: |
/s/ Christopher W. Vieth |
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Name: Christopher W. Vieth |
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Title: Executive Vice President, Chief Operating Officer and Chief Financial Officer (principal financial officer) |
EXHIBIT INDEX
31.1 |
|
Certification by Chief Executive Officer pursuant to Exchange Act Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
|
|
|
31.2 |
|
Certification by Chief Financial Officer pursuant to Exchange Act Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
|
|
|
32.1 |
|
Certification by Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
|
|
|
32.2 |
|
Certification by Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
|
|
|
101* |
|
Interactive data files: (i) Condensed Consolidated Balance Sheets at June 30, 2012 and December 31, 2011, (ii) Condensed Consolidated Statements of Income for the Three and Six Months Ended June 30, 2012 and July 2, 2011, (iii) Condensed Consolidated Statement of Comprehensive Income for the Three and Six Months Ended June 30, 2012 and July 2, 2011, (iv) Condensed Consolidated Statement of Cash Flows for the Six Months Ended June 30, 2012 and July 2, 2011 and (iv) Notes to the Condensed Consolidated Financial Statements. |
* - Pursuant to Rule 406T of Regulation S-T, the interactive data files on Exhibit 101 hereto are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections.