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 29, 2013

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

(Registrant’s 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 issuer’s classes of common stock, as of the latest practicable date.

Class		Outstanding at August 2, 2013
Common Stock, $0.01 par value per share		23,301,078 shares

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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 29,			December 29,
	2013			2012
Assets
Current assets
Cash and cash equivalents	$	54,521		$	83,747
Accounts receivable, net	84,551			72,538
Inventories	125,137			119,015
Deferred income taxes	15,081			15,081
Prepaid expenses and other current assets	21,548			15,089
Total current assets	300,838			305,470
Property and equipment, net	30,538			31,347
Goodwill	7,162			7,162
Intangible assets, net	91,235			91,789
Other non-current assets	138			183
Total assets	$	429,911		$	435,951

Liabilities and stockholders’ equity
Current liabilities
Current portion of long-term debt	$	67,400		$	1,100
Accounts payable	39,788			53,050
Accrued expenses and other current liabilities	21,439			21,882
Total current liabilities	128,627			76,032
Long-term debt	—			67,125
Deferred income taxes	28,530			26,927
Other non-current liabilities	11,020			11,583
Total liabilities	168,177			181,667

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 22,910,581 outstanding at June 29, 2013 and 24,399,732 shares issued and 22,754,212 outstanding at December 29, 2012	244			244
Additional paid-in capital	79,552			80,628
Retained earnings	218,865			213,423
Accumulated other comprehensive loss	(8,609		)	(8,647		)
Treasury stock, at cost (1,489,151 shares at June 29, 2013 and 1,645,520 shares at December 29, 2012)	(28,318		)	(31,364		)
Total stockholders’ equity	261,734			254,284
Total liabilities and stockholders’ equity	$	429,911		$	435,951

The accompanying notes are an integral part of these condensed consolidated financial statements.

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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 29,		June 30,		June 29,		June 30,
	2013		2012		2013		2012

Net sales	$	145,450	$	157,485	$	276,606	$	315,031
Cost of sales	98,908		103,927		199,502		218,566
Gross profit	46,542		53,558		77,104		96,465
Selling, general and administrative expenses	33,335		34,570		65,790		67,638
Operating income	13,207		18,988		11,314		28,827

Interest expense, net	277		296		548		549
Income before provision for income taxes	12,930		18,692		10,766		28,278
Income tax expense	4,960		7,308		4,030		11,049
Net income	$	7,970	$	11,384	$	6,736	$	17,229
Basic earnings per common share	$	0.35	$	0.49	$	0.29	$	0.75
Diluted earnings per common share	$	0.34	$	0.49	$	0.29	$	0.74
Basic weighted average number of shares outstanding	22,902,895		23,052,429		22,842,848		22,995,539
Diluted weighted average number of shares outstanding	23,102,664		23,399,367		23,115,724		23,389,694

The accompanying notes are an integral part of these condensed consolidated financial statements.

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MAIDENFORM BRANDS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(in thousands)

(unaudited)

	Three Months Ended					Six Months Ended
	June 29,		June 30,			June 29,			June 30,
	2013		2012			2013			2012

Net income	$	7,970	$	11,384		$	6,736		$	17,229
Other comprehensive income (loss), before tax:
Foreign currency translation adjustments	115		(724		)	(151		)	(219		)
Adjustments to benefit plans	158		137			316			274
Other comprehensive income (loss), before tax	273		(587		)	165			55
Income tax expense related to items of other comprehensive income (loss) (1)	63		55			127			110
Other comprehensive income (loss), net of tax	210		(642		)	38			(55		)
Comprehensive income	$	8,180	$	10,742		$	6,774		$	17,174

(1) Tax expense provided relates to benefit plan deferrals.

The accompanying notes are an integral part of these condensed consolidated financial statements.

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MAIDENFORM BRANDS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)

	Six Months Ended
	June 29,			June 30,
	2013			2012
Cash flows from operating activities
Net income	$	6,736		$	17,229
Adjustments to reconcile net income to net cash used in operating activities
Depreciation and amortization	2,978			2,560
Amortization of intangible assets	554			546
Amortization of deferred financing costs	87			94
Stock-based compensation	1,929			2,301
Deferred income taxes	1,475			1,396
Excess tax benefits related to stock-based compensation	(495		)	(843		)
Bad debt expense	340			277
Other non-cash items	101			411
Net changes in operating assets and liabilities
Accounts receivable	(12,443		)	(33,928		)
Inventories	(6,252		)	4,251
Prepaid expenses and other current and non-current assets	(3,068		)	(454		)
Accounts payable	(13,250		)	686
Accrued expenses and other current and non-current liabilities	(680		)	1,188
Income taxes payable	(3,173		)	(778		)
Net cash used in operating activities	(25,161		)	(5,064		)
Cash flows from investing activities
Capital expenditures	(2,178		)	(2,835		)
Net cash used in investing activities	(2,178		)	(2,835		)
Cash flows from financing activities
Term loan repayments	(825		)	(550		)
Proceeds from stock options exercised	56			636
Excess tax benefits related to stock-based compensation	495			843
Payments of employee withholding taxes related to equity awards	(1,578		)	(1,566		)
Payments of capital lease obligations	(110		)	(152		)
Financing fees paid	—			(250		)
Net cash used in financing activities	(1,962		)	(1,039		)
Effects of exchange rate changes on cash and cash equivalents	75			(35		)
Net decrease in cash and cash equivalents	(29,226		)	(8,973		)
Cash and cash equivalents
Beginning of period	83,747			68,041
End of period	$	54,521		$	59,068

Supplementary disclosure of cash flow information
Cash paid during the period
Interest	$	588		$	510
Income taxes	$	5,752		$	10,310

Supplemental schedule of non-cash financing activities
Treasury stock issued related to equity award activity	$	4,624		$	4,483

The accompanying notes are an integral part of these condensed consolidated financial statements.

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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 68 retail outlet stores as of June 29, 2013 and 75 retail outlet stores as of June 30, 2012, 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 29, 2013, the results of our operations for the three and six-month periods ended June 29, 2013 and June 30, 2012, and cash flows for the six months ended June 29, 2013 and June 30, 2012. These adjustments consist of normal recurring adjustments. Operating results for the three and six-month periods ended June 29, 2013 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 29, 2012 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 29, 2012.

2. DEBT

	June 29,		December 29,
	2013		2012
Long-term debt
Term loan facility	$	67,400	$	68,225
Current maturities of long-term debt	67,400		1,100
Non-current portion of long-term debt	$	—	$	67,125

In March 2012, we entered into an amendment and modification agreement to our credit facility pursuant to which among other things, we extended the maturity date of our revolving loan by two years to June 2014.

At June 29, 2013, we had $67,400 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.

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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 our long-term debt during each of the five years subsequent to June 29, 2013, are as follows:

Balance of fiscal 2013		$	275
In fiscal 2014		67,125

3. STOCKHOLDERS’ EQUITY

										Accumulated
	Common			Additional						Other			Treasury					Total
	Stock			Paid-in			Retained			Comprehensive			Stock					Stockholders’
	Shares	$		Capital			Earnings			Loss			Shares		$			Equity

Balance at December 29, 2012	24,399,732	$	244	$	80,628		$	213,423		$	(8,647	)	(1,645,520	)	$	(31,364	)	$	254,284

Stock-based compensation expense	—	—		1,929			—			—			—		—			1,929
Stock option activity	—	—		(30		)	(9		)	—			5,000		95			56
Restricted stock activity	—	—		(1,666		)	(1,285		)	—			237,564		4,529			1,578
Withholdings from vesting of restricted stock	—	—		(1,578		)	—			—			(86,195	)	(1,578		)	(3,156		)
Income tax benefit from stock-based compensation	—	—		269			—			—			—		—			269
Comprehensive income	—	—		—			6,736			38			—		—			6,774
Balance at June 29, 2013	24,399,732	$	244	$	79,552		$	218,865		$	(8,609	)	(1,489,151	)	$	(28,318	)	$	261,734

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 three and six-month periods ended June 29, 2013 and June 30, 2012. At June 29, 2013, we had $9,153 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 29, 2013 was 38.4% and 37.4%, respectively, as compared to an effective income tax rate of 39.1% for the three and six-month periods ended June 30, 2012.

6. SEGMENT INFORMATION

We operate two segments, 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 results of operations, assets and liabilities. Each segment’s results include the costs directly related to the segment’s net sales and all other costs allocated based on the relationship to consolidated net sales to support each segment’s net sales. Intersegment sales and transfers are recorded at cost and treated as a transfer of inventory.

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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 29,			June 30,			June 29,		June 30,
	2013			2012			2013		2012

Net sales
Wholesale	$		129,849	$		141,368	$	248,493	$	286,244
Retail	15,601			16,117			28,113		28,787
Total	$		145,450	$		157,485	$	276,606	$	315,031

Operating income
Wholesale	$		11,756	$		17,934	$	10,814	$	28,815
Retail	1,451			1,054			500		12
Operating income	13,207			18,988			11,314		28,827
Interest expense, net	277			296			548		549
Income before provision for income taxes	$		12,930	$		18,692	$	10,766	$	28,278

Depreciation and amortization
Wholesale	$		1,097	$		973	$	2,192	$	1,977
Retail	399			292			786		583
Total	$		1,496	$		1,265	$	2,978	$	2,560

Amortization of intangible assets
Wholesale	$		260	$		257	$	520	$	512
Retail	17			17			34		34
Total	$		277	$		274	$	554	$	546

Capital expenditures
Wholesale	$		412	$		942	$	1,219	$	1,222
Retail	444			1,076			959		1,613
Total	$		856	$		2,018	$	2,178	$	2,835
Net sales by geographic area
United States	$		130,174	$		142,714	$	245,848	$	283,776
International (1)	15,276			14,771			30,758		31,255
Total	$		145,450	$		157,485	$	276,606	$	315,031

Intersegment sales from wholesale to retail	$		3,270	$		3,499	$	6,198	$	6,167

	June 29,			December 29,
	2013			2012
Total assets
Wholesale	$	411,035		$	412,187
Retail	18,876			23,764
Total	$	429,911		$	435,951

(1) International net sales are identified as international based on the location of the customer.

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MAIDENFORM BRANDS, INC. AND SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(in thousands, except share and per share amounts)

(unaudited)

For the three and six-month periods ended June 29, 2013 and June 30, 2012, we had two customers, Wal-Mart and Kohl’s, that each accounted for more than 10% of our consolidated net sales.

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 29,		June 30,		June 29,		June 30,
	2013		2012		2013		2012

Net income	$	7,970	$	11,384	$	6,736	$	17,229
Weighted average number of common and common equivalent shares outstanding:
Basic number of common shares outstanding	22,902,895		23,052,429		22,842,848		22,995,539

Impact of dilutive securities	199,769		346,938		272,876		394,155

Dilutive number of common and common equivalent shares outstanding	23,102,664		23,399,367		23,115,724		23,389,694

Basic earnings per common share	$	0.35	$	0.49	$	0.29	$	0.75
Diluted earnings per common share	$	0.34	$	0.49	$	0.29	$	0.74

For the three-month periods ended June 29, 2013 and June 30, 2012, approximately 167,000 and 260,000 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 29, 2013 and June 30, 2012, approximately 243,000 and 210,000 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 29, 2013, we had purchase commitments of $125,058 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.

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MAIDENFORM BRANDS, INC. AND SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(in thousands, except share and per share amounts)

(unaudited)

Beginning on or around July 26, 2013, two putative class action complaints challenging the merger and the Merger Agreement were filed in the Court of Chancery of the State of Delaware against Maidenform and the individual members of the Maidenform board of directors. The complaints are captioned Bonnie Federman as Custodian for Shira Federman UTMA NJ v. Maidenform Brands, Inc., Case No. 8750 and Crescente v. Maidenform Brands, Inc., Case No. 8760. The complaints generally allege, among other things, that the members of the Maidenform board of directors breached their fiduciary duties to Maidenform’s shareholders by entering into the Merger Agreement, approving the proposed merger and failing to take steps to maximize Maidenform’s value to its shareholders. In addition, the complaints allege, among other things, that the proposed merger improperly favors Hanesbrands and that certain provisions of the Merger Agreement unduly restrict Maidenform’s ability to negotiate with other potential bidders. One of the complaints also alleges that Maidenform, Hanes, and the Hanes acquisition vehicle aided and abetted these alleged fiduciary breaches. The complaints generally seek, among other things, declaratory and injunctive relief, preliminary injunctive relief prohibiting or delaying the defendants from consummating the merger, other forms of equitable relief and unspecified amounts of damages. The defendants believe the litigation is entirely without merit and intend to defend it vigorously. There can be no assurance that Maidenform or any of the other defendants will be successful in the outcome of the pending or any potential future lawsuits. An adverse judgment for monetary damages could have a material adverse effect on the operations and liquidity of Maidenform. A preliminary injunction could delay or jeopardize the completion of the merger, and an adverse judgment granting permanent injunctive relief could indefinitely enjoin completion of the merger.

On November 9, 2012, Klauber Brothers, Inc. brought an action against us in the United States District Court, Southern District of New York, asserting claims for copyright infringement under the U.S. Copyright Act of 1976 related to the lace fabric designs incorporated into two of our products. We are being indemnified by the supplier of one of these products. Klauber has also filed similar actions against two of our customers, for which we are indemnifying them. On July 22, 2013, Klauber and Maidenform jointly moved to suspend the litigation pending a decision on appeal from dismissal of a case Klauber filed against one of Maidenform’s customers. We believe that the ultimate outcome of this pending lawsuit and claim will not have a material adverse effect on our consolidated financial position, results of operations or cash flows taken as a whole. Due to the inherent uncertainty of litigation, however, there can be no assurance of the ultimate outcome of this or future litigations, proceedings, investigations, or claims or their effect.

9. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

	June 29,		December 29,
	2013		2012

Payroll and related benefits (including incentive compensation, vacation, and medical insurance)	$	5,912	$	7,842
Accrued other	15,527		14,040
	$	21,439	$	21,882

Other accrued expenses and current liabilities include, among other items, sourcing commitments, freight, professional fees, trade promotions, accrued severance and inventory return accruals.

10. RECENTLY ISSUED ACCOUNTING STANDARDS

In March 2013, the Financial Accounting Standards Board (“FASB”) issued updated guidance to resolve diversity in practice concerning the release of the cumulative foreign currency translation adjustment into net income when a parent sells a part or all of its investment in a foreign entity or no longer holds a controlling financial interest in a subsidiary or group of assets within a foreign entity. When a company ceases to have a controlling financial interest in a subsidiary within a foreign entity, the company should recognize any related cumulative translation adjustment into net income only if the sale or transfer results in the complete or substantially complete liquidation of the foreign entity in which the subsidiary had resided. Upon the partial sale of an equity method investment that is a foreign entity, the company should release into earnings a pro rata portion of the cumulative translation adjustment. Upon the partial sale of an equity method investment that is not a foreign entity, the company should release into earnings the cumulative translation adjustment if the partial sale represents a complete or substantially complete liquidation of the foreign entity that holds the equity method investment. This updated guidance is effective for fiscal years, and interim periods within those years,

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Item 2. Management’s 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

On July 23, 2013, Maidenform entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Hanesbrands Inc. (“Hanesbrands”) and General Merger Sub Inc. (“Merger Subsidiary”), pursuant to which, and subject to the terms and conditions therein, Merger Subsidiary will merge with and into us and we will become the surviving corporation and a wholly owned subsidiary of Hanesbrands. At the effective time of the merger, each outstanding share of our common stock, other than shares held by us, Hanesbrands or their respective subsidiaries, will be converted into the right to receive $23.50 in cash.

Certain costs related to the proposed merger, such as legal and accounting fees, are payable by us whether or not the proposed acquisition is completed, and in certain circumstances, we could be required to pay a termination fee of $16.6 million if the merger does not occur. The merger is subject to the approval of our stockholders, regulatory approvals and other customary closing conditions. For a more detailed description of the Merger Agreement, please refer to the Current Report on Form 8-K filed by us on July 24, 2013.

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 and Lilyette 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. We also sell the Donna Karan and DKNY licensed brands, 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 women’s 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 and increased global competition, particularly in shapewear, that may adversely affect 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,

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continued growth of the mass merchant channel, increases in the cost of the raw materials used in intimate apparel products and uncertainty surrounding import restrictions.

Although we believe we are well positioned to address some of these trends, we believe the competitive and retail environment and our brand awareness require us to invest in the Maidenform brand. We will therefore be making investments in marketing and branding in 2013 and 2014 to add to our growth beginning in 2014.

During 2013, we are focusing on reducing styles and SKU’s with an emphasis on reducing color and fashion in our product assortment. We believe this initiative will reduce markdowns and improve the quality of our inventory. We are also focused on exiting unproductive businesses, like we did with our Maidenform’s Charmed business in 2012.

While we focus on these actions, we will continue to introduce new and innovative products. In 2013, we will expand upon our well received Comfort Devotion collection by offering an expanded shapewear assortment. In addition, we will be introducing a Maidenform full figure collection at department and chain stores in the fourth quarter of 2013, which will incorporate many of the signature elements of the Comfort Devotion collection. We have not previously competed in a meaningful way in the full figure category, which represents approximately 40% of the total intimate apparel market.

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 have historically sold the Maidenform, Control It!, Flexees and Lilyette brands. We plan to continue to increase our branding and marketing investments which we believe will increase our net sales with department store and national chain store customers. As part of these branding and marketing investments, we will be consolidating our Flexees and Control It! shapewear lines under the Maidenform brand. 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 and Lilyette 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. 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 women’s intimate apparel products.

Mass merchants. The mass merchant channel includes both mass merchants and warehouse clubs. We expect that the increased investments in the Maidenform brand will result in increased awareness of our Maidenform endorsed mass brands; Bodymates, Inspirations, Self Expressions and Sweet Nothings brands. While we have grown our sales in the past several years in this channel, we expect the rate of our future net sales growth to be moderate, both domestically and internationally. 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 channel that are located outside the United States are included in this channel.

Other. Net sales from this channel include sales to specialty retailers, off-price retailers and royalty income from licensees. We currently supply a specialty retailer with product, 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. We expect net sales in this channel to decline 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 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.

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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 segment’s 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 68 retail outlet stores as of June 29, 2013 compared to 75 retail outlet stores as of June 30, 2012.

Results of Operations

	Three Months Ended						Six Months Ended
	June 29,			June 30,			June 29,			June 30,
	2013			2012			2013			2012
OPERATING DATA: (in millions)
Wholesale sales	$	129.8		$	141.4		$	248.5		$	286.2
Retail sales	15.6			16.1			28.1			28.8
Net sales	145.4			157.5			276.6			315.0
Cost of sales	98.9			103.9			199.5			218.5
Gross profit	46.5			53.6			77.1			96.5
Selling, general and administrative expenses	33.3			34.6			65.8			67.7
Operating income	$	13.2		$	19.0		$	11.3		$	28.8

	As a Percentage of Net Sales
	Three Months Ended						Six Months Ended
	June 29,			June 30,			June 29,			June 30,
	2013			2012			2013			2012
OPERATING DATA:
Wholesale sales	89.3		%	89.8		%	89.8		%	90.9		%
Retail sales	10.7			10.2			10.2			9.1
Net sales	100.0			100.0			100.0			100.0
Cost of sales	68.0			66.0			72.1			69.4
Gross profit	32.0			34.0			27.9			30.6
Selling, general and administrative expenses	22.9			21.9			23.8			21.5
Operating income	9.1		%	12.1		%	4.1		%	9.1		%

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Our net sales performance by channel of distribution:

	Three Months Ended									Six Months Ended
	June 29,		June 30,		$			%		June 29,		June 30,		$			%
	2013		2012		change			change		2013		2012		change			change
	(in millions)									(in millions)
Department stores and national chain stores	$	62.5	$	70.4	$	(7.9	)	(11.2	)%	$	116.2	$	129.0	$	(12.8	)	(9.9	)%
Mass merchants	47.7		48.2		(0.5		)	(1.0	)	91.2		107.2		(16.0		)	(14.9	)
Other	19.6		22.8		(3.2		)	(14.0	)	41.1		50.0		(8.9		)	(17.8	)
Total wholesale	129.8		141.4		(11.6		)	(8.2	)	248.5		286.2		(37.7		)	(13.2	)

Retail	15.6		16.1		(0.5		)	(3.1	)	28.1		28.8		(0.7		)	(2.4	)

Total net sales	$	145.4	$	157.5	$	(12.1	)	(7.7	)%	$	276.6	$	315.0	$	(38.4	)	(12.2	)%

In addition, our mix of products sold worldwide between bras, shapewear and panties for the three and six-month periods ended June 29, 2013 and June 30, 2012, respectively, is summarized below:

	Three Months Ended				Six Months Ended
	June 29,		June 30,		June 29,		June 30,
	2013		2012		2013		2012
Bras	58	%	59	%	59	%	57	%
Shapewear	34		34		33		36
Panties	8		7		8		7
	100	%	100	%	100	%	100	%

Net sales

Consolidated net sales decreased by $12.1 million, or 7.7%, from $157.5 million for the three months ended June 30, 2012 to $145.4 million for the three months ended June 29, 2013. Consolidated net sales decreased by $38.4 million, or 12.2%, from $315.0 million for the six months ended June 30, 2012 to $276.6 million for the six months ended June 29, 2013.

Wholesale segment net sales decreased by $11.6 million, or 8.2%, from $141.4 million for the three months ended June 30, 2012 to $129.8 million for the three months ended June 29, 2013. Total international net sales, which are included in our wholesale segment, increased by $0.5 million, or 3.4%, from $14.8 million for the three months ended June 30, 2012 to $15.3 million for the three months ended June 29, 2013. This increase in international sales was a result of growth in significant markets, most notably Canada, Germany and Mexico. Partially offsetting this increase were sales decreases in other markets, such as the United Kingdom and Russia. Our department stores and national chain stores channel net sales decreased by $7.9 million, or 11.2%, from $70.4 million for the three months ended June 30, 2012 to $62.5 million for the three months ended June 29, 2013 from softness in the bra and shapewear categories resulting from lower replenishment orders, increased shapewear competition at a chain customer as well as a decrease resulting from the initial shipments for the Jennifer Lopez brand which occurred in 2012. Somewhat offsetting this decline was improved replenishment at a mid-tier department store customer. Our mass merchant channel net sales remained relatively flat, decreasing $0.5 million, or 1.0%, from $48.2 million for the three months ended June 30, 2012 to $47.7 million for the three months ended June 29, 2013. This is a result of lower strapless bra replenishment orders and lower replenishment orders on new introductions. This decrease was predominately offset by increased sales in the bra and shapewear categories at our other mass customers, including shapewear rebranding initiatives at a warehouse club customer. Other channel net sales, which include sales to specialty retailers, off-price retailers and licensing income, decreased by $3.2 million, or 14.0%, from $22.8 million for the three months ended June 30, 2012 to $19.6 million for the three months ended June 29, 2013. This decrease was due to sales declines to a specialty retailer, decreased program sales to off-price retailers and lower liquidation sales.

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Wholesale segment net sales decreased by $37.7 million, or 13.2%, from $286.2 million for the six months ended June 30, 2012 to $248.5 million for the six months ended June 29, 2013. Total international net sales decreased by $0.5 million, or 1.6%, from $31.3 million for the six months ended June 30, 2012 to $30.8 million for the six months ended June 29, 2013, resulting from decreased sales in the United Kingdom and Russia. Partially offsetting these decreases were sales increases in other markets, such as Mexico and South Korea. Our department stores and national chain stores channel net sales decreased by $12.8 million, or 9.9%, from $129.0 million for the six months ended June 30, 2012 to $116.2 million for the six months ended June 29, 2013. Our mass merchant channel net sales decreased by $16.0 million, or 14.9%, from $107.2 million for the six months ended June 30, 2012 to $91.2 million for the six months ended June 29, 2013. In addition to the second quarter reasons, we had lower sales to a global warehouse club as a shapewear event in 2012 did not repeat in 2013. Other channel net sales decreased by $8.9 million, or 17.8%, from $50.0 million for the six months ended June 30, 2012 to $41.1 million for the six months ended June 29, 2013 resulting from sales declines to a specialty retailer and decreased program sales to off-price retailers.

Net sales in our retail segment decreased by $0.5 million, or 3.1%, from $16.1 million for the three months ended June 30, 2012 to $15.6 million for the three months ended June 29, 2013 and decreased by $0.7 million, or 2.4%, from $28.8 million for the six months ended June 30, 2012 to $28.1 million for the six months ended June 29, 2013. Same store sales, defined as sales from stores open more than one year, for the three and six-month periods ended June 29, 2013 increased 1.5% and 2.7%, respectively. Our internet sales were unchanged at $2.3 million for the three months ended June 29, 2013 when compared to the same period in 2012 and decreased by $0.2 million, or 4.3%, from $4.6 million for the six months ended June 30, 2012 to $4.4 million for the six months ended June 29, 2013.

Gross profit

Consolidated gross profit decreased by $7.1 million, or 13.2%, from $53.6 million for the three months ended June 30, 2012 to $46.5 million for the three months ended June 29, 2013. As a percentage of net sales, consolidated gross margins decreased by 200 basis points from 34.0% for the three months ended June 30, 2012 to 32.0% for the three months ended June 29, 2013. Consolidated gross profit decreased by $19.4 million, or 20.1%, from $96.5 million for the six months ended June 30, 2012 to $77.1 million for the six months ended June 29, 2013. As a percentage of net sales, gross profit decreased by 270 basis points from 30.6% for the six months ended June 30, 2012 to 27.9% for the six months ended June 29, 2013.

Gross profit as a percentage of net sales for our wholesale segment decreased by 310 basis points from 30.9% for the three months ended June 30, 2012 to 27.8% for the three months ended June 29, 2013. The decrease in gross margin was primarily driven by increased promotional activity to drive inventory productivity and increased inventory clearing costs. Gross profit as a percentage of net sales for our wholesale segment was 23.8% for the six months ended June 29, 2013 as compared to 27.6% for the six months ended June 30, 2012. This decrease of 380 basis points is mainly due to the same drivers in the second quarter; slightly offsetting this decrease was a favorable mix in sales.

Gross profit as a percentage of net sales for our retail segment increased by 520 basis points from 61.5% for the three months ended June 30, 2012 to 66.7% for the three months ended June 29, 2013, and increased 290 basis points from 60.8% for the six months ended June 30, 2012 to 63.7% for the six months ended June 29, 2013. These increases in gross profit as a percentage of sales are a result of favorable product mix.

Selling, general and administrative expenses (“SG&A”)

Consolidated SG&A decreased by $1.3 million, or 3.8%, from $34.6 million for the three months ended June 30, 2012 to $33.3 million for the three months ended June 29, 2013. As a percentage of net sales, SG&A increased from 21.9% for the three months ended June 30, 2012 to 22.9% for the three months ended June 29, 2013. Consolidated SG&A decreased by $1.9 million, or 2.8%, from $67.7 million for the six months ended June 30, 2012 to $65.8 million for the six months ended June 29, 2013. As a percentage of net sales, SG&A increased from 21.5% for the six months ended June 30, 2012 to 23.8% for the six months ended June 29, 2013.

SG&A for our wholesale segment, which includes corporate-related expenses, decreased by $1.3 million, or 5.1%, from $25.7 million for the three months ended June 30, 2012 to $24.4 million for the three months ended June 29, 2013. As a percentage of net sales, wholesale segment SG&A increased from 18.2% for the three months ended June 30, 2012 to 18.8% for the three months ended June 29, 2013. The lower SG&A was primarily due to decreased payroll and related benefits, including lower incentive compensation and lower variable compensation at our North Carolina distribution center, somewhat offset by increased costs associated with our West Coast distribution initiative and professional fees associated with the definitive agreement with Hanesbrands.

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SG&A for our wholesale segment decreased by $1.8 million, or 3.6%, from $50.2 million for the six months ended June 30, 2012 to $48.4 million for the six months ended June 29, 2013. The decrease of $1.8 million was a result of the reasons mentioned above. As a percentage of net sales, wholesale segment SG&A increased from 17.5% for the six months ended June 30, 2012 to 19.5% for the six months ended June 29, 2013.

Retail SG&A remained unchanged at $8.9 million for the quarter when compared to the same quarter in 2012 and decreased by $0.1 million, or 0.6%, from $17.5 million for the six months ended June 30, 2012 to $17.4 million for the six months ended June 29, 2013.

Operating income

Our consolidated operating income, decreased by $5.8 million, or 30.5%, from $19.0 million for the three months ended June 30, 2012 to $13.2 million for the three months ended June 29, 2013 and decreased by $17.5 million, or 60.8%, from $28.8 million for the six months ended June 30, 2012 to $11.3 million for the six months ended June 29, 2013.

For the foregoing reasons, operating income for our wholesale segment decreased by $6.3 million, or 35.0%, from $18.0 million for the three months ended June 30, 2012 to $11.7 million for the three months ended June 29, 2013 and decreased by $18.0 million, or 62.5%, from $28.8 million during the six months ended June 30, 2012 to $10.8 million during the six months ended June 29, 2013.

Also, for the reasons discussed above, operating income for our retail segment increased by $0.5 million, or 50.0%, from $1.0 million for the three months ended June 30, 2012 to $1.5 million for the three months ended June 29, 2013 and increased by $0.5 million, or 100%, from breakeven during the six months ended June 30, 2012 to $0.5 million during the six months ended June 29, 2013.

Interest expense, net

Interest expense, net, remained unchanged at $0.2 million and $0.5 million for the three and six-month periods ended June 29, 2013, respectively, when compared to the same periods in 2012.

Income tax expense

Our effective income tax rate for the three and six-month periods ended June 29, 2013 was 38.4% and 37.4%, respectively, as compared to an effective income tax rate for the three and six-month periods ended June 30, 2012 of 39.1%.

Net income

For the foregoing reasons, our net income decreased by $3.5 million, or 30.7%, from $11.4 million for the three months ended June 30, 2012 to $7.9 million for the three months ended June 29, 2013. Our net income decreased by $10.5 million, or 61.0%, from $17.2 million for the six months ended June 30, 2012 to $6.7 million for the six months ended June 29, 2013.

Liquidity and Capital Resources

Operating activities. Cash flows used in operating activities were $25.2 million for the six months ended June 29, 2013 compared to cash flows used in operating activities of $5.1 million for the six months ended June 30, 2012. This change was primarily driven by the decrease in net income in addition to changes in working capital. Working capital changes for the first half of 2013 included cash outflows of $12.4 million related to accounts receivable resulting from sales declines in the first half of 2013 compared to the same period in 2012 in addition to the timing of cash collections, $6.3 million related to inventory to support new product launches and $13.3 million related to accounts payable primarily due to the timing of cash payments.

Investing activities. Cash flows used in investing activities were $2.2 million for the six months ended June 29, 2013 compared to $2.8 million for the six months ended June 30, 2012. Cash flows used in investing activities for the six months ended June 29, 2013 primarily related to store remodeling and information technology upgrades, and for the six months ended June 30, 2012 related to information technology upgrades.

Financing activities. Cash flows used in financing activities were $2.0 million for the six months ended June 29, 2013 compared to cash flows used in financing activities of $1.0 million for the six months ended June 30, 2012.

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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 29, 2013, we had $9.1 million remaining available under our stock repurchase program. We did not repurchase any of our common stock during the six-month periods ended June 29, 2013 and June 30, 2012.

In March 2012, we entered into an amendment and modification agreement to our credit facility pursuant to which among other things, we extended the maturity of our revolving loan by two years to June 2014.

At June 29, 2013 we had $67.4 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. At the maturity date, we expect that we will either refinance our term loan or repay our term loan with cash available from operations. 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 29, 2013.

Based on our current outlook, we believe that cash generated from operations and available cash, together with amounts available under our revolving loan, will be adequate to meet our working capital needs and capital expenditure requirements for the foreseeable future, although no assurance can be given in this regard.

Below is a summary of our actual performance under these financial covenants:

	June 29, 2013 Covenant	December 29, 2012 Covenant

Actual fixed charge coverage ratio (1)	1.58 : 1.00	1.94 : 1.00
Minimum ratio required	1.25 : 1.00	1.25 : 1.00

Actual leverage ratio (2)	0.31 : 1.00	(0.24) : 1.00
Maximum ratio permitted	3.25 : 1.00	3.25 : 1.00

Actual leverage ratio (3)	1.54 : 1.00	1.11 : 1.00
Maximum ratio permitted	3.25 : 1.00	3.25 : 1.00

Actual consolidated capital expenditures	$2,178	$7,307
Maximum permitted	$12,693	$11,415

(1) Coverage ratio is 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.

(2) Leverage ratio is computed as the ratio of total net debt to consolidated EBITDA and certain non-cash charges. Total net debt is defined as total debt (long-term debt and outstanding letters of credit) less total cash and cash equivalents.

(3) Leverage ratio is 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.

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The following table summarizes our significant contractual obligations and commercial commitments at June 29, 2013 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.

	Balance of
	fiscal		In fiscal		In fiscal		In fiscal		In fiscal
(in millions)	2013		2014		2015		2016		2017		Thereafter		Total
Long-term debt	$	0.3	$	67.1	$	—	$	—	$	—	$	—	$	67.4
Interest on long-term debt (1)	0.2		0.6		—		—		—		—		0.8
Obligations under capital lease (2)	0.1		—		—		—		—		—		0.1
Operating leases (3)	4.5		7.0		5.6		4.4		3.4		11.7		36.6
Total financial obligations	5.1		74.7		5.6		4.4		3.4		11.7		104.9
Other contractual obligations (4)	2.9		8.2		7.0		5.3		7.8		25.6		56.8
Purchase obligations (5)	104.5		20.6		—		—		—		—		125.1
Total financial obligations and commitments	$	112.5	$	103.5	$	12.6	$	9.7	$	11.2	$	37.3	$	286.8

(1) The interest rate assumed was the rate in effect at June 29, 2013.

(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 finished goods 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.

We currently have no tax liabilities accrued for uncertain tax positions. We also have pension and postretirement benefit obligations included in other non-current liabilities of $8.7 million and $0.6 million, respectively. These liabilities for 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 29, 2013 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 Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the year ended December 29, 2012.

Recently Issued Accounting Standards

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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 29, 2013, $10.2 million and $18.9 million, respectively, of our total net sales were in currencies other than the U.S. dollar and during the same three and six-month periods, our net sales were favorably impacted by $0.2 million 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 29, 2013, 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 29, 2013 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 29, 2013, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART II - OTHER INFORMATION

Item 1. Legal Proceedings

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.

Item 1A. Risk Factors

Please refer to Item 1A. Risk Factors in our Annual Report on Form 10-K for Fiscal 2012, filed with the SEC on March 8, 2013 for a description of certain significant risks and uncertainties to which our business, operations and financial condition are subject. We have identified the following additional risk factors:

The proposed acquisition of us by Hanesbrands pursuant to the Merger Agreement is subject to a number of conditions that must be satisfied prior to the closing of the merger and may not occur, even with stockholder approval.

The completion of the pending merger with Hanesbrands is subject to a number of closing conditions under the Merger Agreement, including, among others:

· adoption of the Merger Agreement by an affirmative majority vote of our outstanding shares of common stock;

· the receipt of certain governmental clearances or approvals, including the expiration or termination of the applicable waiting period, or under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended; and

· the absence of law or order by any governmental entity that prevents, makes illegal or prohibits the Merger.

The obligation of Hanesbrands to close is also subject to there not having occurred any material adverse effect on our financial condition, business or results of operations between the date of the Merger Agreement and the effective time of the merger. In addition, we face stockholder litigation challenging the merger. As a result of the above mentioned conditions and the other conditions set forth in the Merger Agreement, we cannot provide assurance that the merger will be completed, even if stockholder approval of the merger is obtained. Should the merger fail to close for any reason, our business, financial condition, results of operations and cash flows may be materially and adversely affected.

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The pendency of the merger, and potential failure to complete the merger, could materially and adversely affect our operations and financial results.

Our pending merger with Hanesbrands has the potential to adversely impact our operations and financial results. Uncertainty in the future of our business between the execution of the Merger Agreement and the closing of the transaction may affect our ability to retain and motivate existing employees, and may adversely impact our ability to recruit new employees. Efforts to complete the merger may also divert attention from the daily activities of our existing employees, adversely impacting our operations and results thereof. Additionally, the uncertainty in the future of our business may adversely impact our business relationships with our customers and vendors. Certain costs related to the proposed merger, such as legal and accounting fees, are payable by us whether or not the proposed acquisition is completed, and in certain circumstances, we could be required to pay a termination fee of $16.6 million if the merger does not occur. In addition, we face stockholder litigation challenging the merger. Failure to complete the merger could result in a decrease in the market price of our shares of common stock to the extent that the current market price of those shares reflects a market assumption that the proposed acquisition will be completed, which could result in damage to our reputation and business relationships. In addition, any of these events could have a material negative impact on our results of operations and financial condition and could adversely affect the price of our common stock.

Under the terms of the Merger Agreement, we are subject to certain restrictions on our business activities.

The Merger Agreement generally requires us to operate our business in the ordinary course pending consummation of the proposed merger, and it restricts us from taking certain specified actions until the merger is completed or the Merger Agreement is terminated. These restrictions may prevent us from pursuing otherwise attractive business opportunities and making other changes to our business prior to completion of the merger or termination of the Merger Agreement.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

(a) None.

(b) None.

				Total number	Maximum
				of shares	dollar
	Total			purchased	value of shares
	number	Average		as part of publicly	that may yet be
	of shares	price paid		announced	repurchased under
Period	purchased (1)	per share		program	the program

March 31, 2013 - May 4, 2013	762	$	17.75	—	$	9.1
May 5, 2013 - June 1, 2013	23	18.65		—	9.1
June 2, 2013 - June 29, 2013	—	—		—	9.1

Total	785	$	17.78	—

(1) All of the shares were surrendered by our employees to satisfy required tax withholding upon the vesting of restricted stock awards.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

N/A

Item 5. Other Information

None.

Item 6. Exhibits

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

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 29, 2013 and December 29, 2012, (ii) Condensed Consolidated Statements of Income for the Three and Six Months Ended June 29, 2013 and June 30, 2012, (iii) Condensed Consolidated Statement of Comprehensive Income (Loss) for the Three and Six Months Ended June 29, 2013 and June 30, 2012, (iv) Condensed Consolidated Statement of Cash Flows for the Six Months Ended June 29, 2013 and June 30, 2012 and (v) Notes to the Condensed Consolidated Financial Statements.


	MAIDENFORM BRANDS, INC. (Registrant)


Date: August 7, 2013	By:	/s/ Christopher W. Vieth
		Name: Christopher W. Vieth
		Title: Executive Vice President, Chief Operating Officer and Chief Financial Officer (principal financial officer)

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 29, 2013 and December 29, 2012, (ii) Condensed Consolidated Statements of Income for the Three and Six Months Ended June 29, 2013 and June 30, 2012, (iii) Condensed Consolidated Statement of Comprehensive Income (Loss) for the Three and Six Months Ended June 29, 2013 and June 30, 2012, (iv) Condensed Consolidated Statement of Cash Flows for the Six Months Ended June 29, 2013 and June 30, 2012 and (iv) Notes to the Condensed Consolidated Financial Statements.

	PAGE
PART I - FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited)

Condensed Consolidated Balance Sheets at June 29, 2013 and December 29, 2012	2

Condensed Consolidated Statements of Income for the Three and Six Months Ended June 29, 2013 and June 30, 2012	3

Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three and Six Months Ended June 29, 2013 and June 30, 2012	4

Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 29, 2013 and June 30, 2012	5

Notes to the Condensed Consolidated Financial Statements	6

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	12

Item 3. Quantitative and Qualitative Disclosures About Market Risk	21

Item 4. Controls and Procedures	21

PART II - OTHER INFORMATION

Item1. Legal Proceedings	22

Item1A. Risk Factors	22

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	23

Item 3. Defaults Upon Senior Securities	23

Item 4. Mine Safety Disclosures	23

Item 5. Other Information	23

Item 6. Exhibits	23