**UNITED
      STATES 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 September 29, 2007**





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**


(Registrant's
      telephone number, including area code)





**154
      Avenue E, Bayonne, NJ 07002**


(Former
      name, former address and former fiscal year, if changed since last
      report.)





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 is a large accelerated filer, an
      accelerated filer or a non-accelerated filer. See definition of “accelerated
      filer and large accelerated filer” in Rule 12b-2 of the Exchange Act.





Large
      accelerated filer o    Accelerated
      filer x    Non-accelerated
      filer o





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





As
      of
      November 2, 2007, there were 22,423,567 shares of the registrant’s common stock,
      par value $0.01 per share, outstanding.







**INDEX**





**PAGE****PART
                I - FINANCIAL INFORMATION**Item
                1. Financial Statements (Unaudited)Condensed
                Consolidated Balance Sheets at September 29, 2007 and December 30,
                2006
            
            2Condensed
                Consolidated Statements of Income for the Three and Nine Months Ended
                September 29, 2007 and September 30, 2006
            
            3Condensed
                Consolidated Statements of Cash Flows for the Nine Months Ended September
                29, 2007 and September 30, 2006
            
            4Notes
                to the Condensed Consolidated Financial Statements
            
            5Item
                2. Management’s Discussion and Analysis of Financial Condition and Results
                of Operations
            
            12Item
                3. Quantitative and Qualitative Disclosures About Market
                Risk
            
            22Item
                4. Controls and Procedures
            
            23**PART
                II - OTHER INFORMATION**Item1.
                Legal Proceedings
            
            24Item1A.
                Risk Factors
            
            24Item
                2. Unregistered Sales of Equity Securities and Use of
                Proceeds
            
            24Item
                3. Defaults Upon Senior Securities
            
            24Item
                4. Submission of Matters to a Vote of Security Holders
            
            24Item
                5. Other Information
            
            25Item
                6. Exhibits
            
            25








**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)***


**September
                  29,2007**
              
              **December
                  30,2006****Assets**Current
                  assetsCash
                  and cash equivalents
              
              $
              15,079
              
              $
              14,617Accounts
                  receivable, net
              
              
              47,839
              
              
              39,142Inventories
              
              
              57,598
              
              
              46,911Deferred
                  income taxes
              
              
              9,703
              
              
              9,459Prepaid
                  expenses and other current assets
              
              
              6,258
              
              
              6,203Total
                  current assets
              
              
              136,477
              
              
              116,332Property,
                  plant and equipment, net
              
              
              21,211
              
              
              18,454Goodwill
              
              
              7,884
              
              
              7,884Intangible
                  assets, net
              
              
              98,807
              
              
              99,678Other
                  non-current assets
              
              
              2,453
              
              
              2,505Total
                  assets
              
              $
              266,832
              
              $
              244,853**Liabilities
                  and stockholders’ equity**Current
                  liabilitiesCurrent
                  portion of long-term debt
              
              $
              1,100
              
              $
              -Accounts
                  payable
              
              
              28,172
              
              
              13,195Accrued
                  expenses and other current liabilities
              
              
              21,304
              
              
              21,176Total
                  current liabilities
              
              
              50,576
              
              
              34,371Long-term
                  debt
              
              
              88,625
              
              
              110,000Deferred
                  income taxes
              
              
              21,314
              
              
              16,223Other
                  non-current liabilities
              
              
              9,528
              
              
              9,358Total
                  liabilities
              
              
              170,043
              
              
              169,952Commitments
                  and contingencies (Note 9)Stockholders’
                  equityPreferred
                  stock - $0.01 par value; 10,000,000 shares
                  authorizedand
                  none issued and outstanding
              
              
              -
              
              
              -Common
                  stock - $0.01 par value; 100,000,000 shares
                  authorized;23,488,357
                  shares issued and 22,636,817 outstanding at September 29,
                  2007and
                  23,488,357 issued and 22,964,826 outstanding at December 30,
                  2006
              
              
              235
              
              
              235Additional
                  paid-in capital
              
              
              61,088
              
              
              59,478Retained
                  earnings
              
              
              47,175
              
              
              20,953Accumulated
                  other comprehensive income
              
              
              168
              
              
              158Treasury
                  stock, at cost (851,540 shares at September 29, 2007 and 523,531
                  sharesat
                  December 30, 2006)
              
              
              (11,877
              )
              
              (5,923
              )Total
                  stockholders’ equity
              
              
              96,789
              
              
              74,901Total
                  liabilities and stockholders’ equity
              
              $
              266,832
              
              $
              244,853




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




2


**MAIDENFORM
        BRANDS, INC. AND SUBSIDIARIES**


**CONDENSED
        CONSOLIDATED STATEMENTS OF INCOME**
 ***(in
        thousands, except share and per share amounts)***
 ***(unaudited)***


**Three
                months ended**
            
            **Nine
                months ended****September
                29,2007**
            
            **September
                30,2006**
            
            **September
                29,2007**
            
            **September
                30,2006**Net
                sales
            
            $
            100,189
            
            $
            113,833
            
            $
            326,382
            
            $
            331,816Cost
                of sales
            
            
            59,784
            
            
            71,079
            
            
            199,539
            
            
            206,867Gross
                profit
            
            
            40,405
            
            
            42,754
            
            
            126,843
            
            
            124,949Selling,
                general andadministrative
                expenses
            
            
            25,788
            
            
            25,676
            
            
            71,527
            
            
            77,119Operating
                income
            
            
            14,617
            
            
            17,078
            
            
            55,316
            
            
            47,830Interest
                expense, net
            
            
            1,454
            
            
            2,177
            
            
            7,721
            
            
            6,446Income
                before provisionfor
                income taxes
            
            
            13,163
            
            
            14,901
            
            
            47,595
            
            
            41,384Income
                tax expense
            
            
            5,384
            
            
            6,027
            
            
            19,742
            
            
            16,845Net
                income
            
            $
            7,779
            
            $
            8,874
            
            $
            27,853
            
            $
            24,539Basic
                earnings per common share
            
            $
            0.34
            
            $
            0.39
            
            $
            1.21
            
            $
            1.06Diluted
                earnings per common share
            
            $
            0.32
            
            $
            0.37
            
            $
            1.15
            
            $
            1.01Basic
                weighted average number ofshares
                outstanding
            
            
            22,886,961
            
            
            22,884,957
            
            
            22,959,770
            
            
            23,066,698Diluted
                weighted average number ofshares
                outstanding
            
            
            24,023,720
            
            
            24,101,601
            
            
            24,121,711
            
            
            24,217,570





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




3


**MAIDENFORM
        BRANDS, INC. AND SUBSIDIARIES**
 **CONDENSED
        CONSOLIDATED STATEMENTS OF CASH FLOWS**
 ***(in
        thousands)***
 ***(unaudited)***
  **Nine
                  months ended****September
                  29,2007**
              
              **September
                  30,2006****Cash
                  flows from operating activities**Net
                  income
              
              $
              27,853
              
              $
              24,539Adjustments
                  to reconcile net income to net cashfrom
                  operating activitiesDepreciation
                  and amortization
              
              
              2,212
              
              
              2,106Amortization
                  of intangible assets
              
              
              871
              
              
              871Amortization
                  of deferred financing costs
              
              
              2,852
              
              
              671Stock-based
                  compensation
              
              
              1,783
              
              
              1,536Deferred
                  income taxes
              
              
              5,666
              
              
              3,887Excess
                  tax benefits related to stock-based compensation
              
              
              (536
              )
              
              -Pension
                  plan curtailment gain
              
              
              (6,099
              )
              
              -Net
                  changes in operating assets and liabilitiesAccounts
                  receivable
              
              
              (8,697
              )
              
              (22,639
              )Inventories
              
              
              (10,687
              )
              
              (14,878
              )Prepaid
                  expenses and other current andnon-current
                  assets
              
              
              (535
              )
              
              1,530Accounts
                  payable
              
              
              14,977
              
              
              7,297Accrued
                  expenses and other current andnon-current
                  liabilities
              
              
              3,085
              
              
              2,411Income
                  taxes payable
              
              
              (466
              )
              
              5,116Net
                  cash from operating activities
              
              
              32,279
              
              
              12,447**Cash
                  flows from investing activities**Capital
                  expenditures
              
              
              (4,499
              )
              
              (1,668
              )Net
                  cash from investing activities
              
              
              (4,499
              )
              
              (1,668
              )**Cash
                  flows from financing activities**Term
                  loan borrowings
              
              
              100,000
              
              
              -Term
                  loan repayments
              
              
              (120,275
              )
              
              (17,500
              )Borrowings
                  under revolving loan
              
              
              5,000
              
              
              -Repayments
                  under revolving loan
              
              
              (5,000
              )
              
              -Deferred
                  financing costs
              
              
              (1,078
              )
              
              (300
              )Proceeds
                  from stock options exercised
              
              
              347
              
              
              195Excess
                  tax benefits related to stock-based compensation
              
              
              536
              
              
              -Payments
                  of capital lease obligations
              
              
              (76
              )
              
              -Purchase
                  of common stock for treasury
              
              
              (7,010
              )
              
              (7,563
              )Net
                  cash from financing activities
              
              
              (27,556
              )
              
              (25,168
              )Effects
                  of exchange rate changes on cash
              
              
              238
              
              
              (98
              )Net
                  increase (decrease) in cash
              
              
              462
              
              
              (14,487
              )**Cash
                  and cash equivalents**Beginning
                  of period
              
              
              14,617
              
              
              30,978End
                  of period
              
              $
              15,079
              
              $
              16,491**Supplementary
                  disclosure of cash flow information**Cash
                  paid during the periodInterest
              
              $
              5,962
              
              $
              7,082Income
                  taxes
              
              $
              13,376
              
              $
              7,418**Supplemental
                  schedule of non-cash investing and financing
                  activities**Equipment
                  acquired with capital lease obligations
              
              $
              470
              
              $
              -




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




4


**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 through multiple
      distribution channels including department stores and national chain stores,
      mass merchants (including warehouse clubs), and other (including specialty
      retailers, off-price retailers and licensing income). In addition, we also
      operated 78 and 77 retail outlet stores as of September 29, 2007 and September
      30, 2006, respectively, and sell 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
      September 29, 2007, the results of our operations for the three and nine-month
      periods ended September 29, 2007 and September 30, 2006, and cash flows for
      the
      nine months ended September 29, 2007 and September 30, 2006. These adjustments
      consist of normal recurring adjustments. Operating results for the three and
      nine-month periods ended September 29, 2007 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 30,
      2006
      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.





These
      condensed consolidated financial statements have been prepared in accordance
      with Article 10 of Regulation S-X promulgated by the Securities and Exchange
      Commission. Accordingly, certain information and disclosures normally included
      in financial statements prepared in accordance with accounting principles
      generally accepted in the United States of America have been condensed or
      omitted pursuant to the rules and regulations of the Securities and Exchange
      Commission. The financial statements included herein should be read in
      conjunction with our Annual Report on Form 10-K for the year ended December
      30,
      2006.





**2.** **DEBT**


**September
                  29,2007**
              
              **December
                  30,2006**Long-term
                  debt
              
              $
              89,725
              
              $
              110,000Current
                  maturities of long-term debt
              
              
              1,100
              
              
              -Non-current
                  portion of long-term debt
              
              $
              88,625
              
              $
              110,000





On
      June
      15, 2007, we entered into a credit agreement, consisting of a 7-year, $100,000
      amortizing first lien term loan (the “Term Loan”) and a 5-year, $50,000
      revolving loan facility (the “Revolving Loan,” and together with the Term Loan,
      the “Credit Facility”). The Revolving Loan provides for direct borrowings and
      issuance of stand-by letters of credit on our behalf. 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. Borrowings
      are limited by the borrowing base, which consists of 85.0% of eligible accounts
      receivable and 50.0% of eligible inventory. We used the proceeds from the
      borrowings, together with available cash on hand, to repay all amounts due
      under
      our existing credit facility.





At
      September 29, 2007, borrowings under the Term Loan bear interest, at our option,
      at the London Interbank Offered Rate (“LIBOR”) plus 1.25%, or at the base rate
      plus 0.25%. Borrowings under the Revolving Loan bear interest at 25 basis points
      below the rates available under the Term Loan. The LIBOR margin and the base
      rate margin will be determined quarterly based on our leverage ratio for the
      preceding four fiscal quarters.





Additional
      fees are payable under the Credit Facility including (i) a fee on outstanding
      letters of credit equal to the margin over LIBOR applicable to the Revolving
      Loan, (ii) a letter of credit fronting fee equal to 0.25% per annum on the
      daily
      amount available to be drawn under outstanding letters of credit and (iii)
      an
      unused line fee on the maximum principle amount undrawn under the Revolving
      Loan
      ranging from 0.15% to 0.35% determined quarterly based on our leverage ratio
      for
      the preceding four fiscal quarters.





5


**MAIDENFORM
      BRANDS, INC. AND SUBSIDIARIES**


**NOTES
      TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
      (continued)**


***(in
      thousands, except share and per share amounts)***


***(unaudited)***




The
      Credit Facility contains affirmative and restrictive covenants, including:
      (a) maintenance of a minimum fixed charge coverage ratio,
      (b) maintenance of a maximum leverage ratio, (c) limitations on
      consolidated capital expenditures,  (d) limitations
      on the incurrence of indebtedness and liens, (e) limitations on
      investments/acquisitions and (f) restrictions on payments between
      Maidenform Brands, Inc. and its subsidiaries.  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.





At
      September 29, 2007, we had $89,725 outstanding under our Term Loan, $0
      outstanding under our Revolving Loan with $47,709 available for borrowings
      under
      the Revolving Loan, after giving effect to $2,291 of outstanding letters of
      credit. Principal payments on the Term Loan are payable in quarterly
      installments of $275 commencing on September 28, 2007, with all remaining
      amounts due on the maturity date. We are permitted to voluntarily prepay all
      or
      part of the principal balance of the Term Loan with such payments applied to
      scheduled principal payments in inverse order of their maturity. The borrowings
      and other obligations under the Credit Facility and the guarantees are
      collateralized by a first priority perfected lien, subject to certain permitted
      liens, on substantially all of the personal property assets and certain real
      property of the borrower and guarantors.





In
      connection with the Credit Facility, we paid fees of $1,078. For the three
      and
      nine-month periods ended September 29, 2007, amortization of financing costs
      included in interest expense was $65 and $2,852, respectively, which included
      the write-off of deferred financing costs of $2,375 as a result of refinancing
      our Credit Facility.





Payments
      due on long-term debt during each of the five years subsequent to September
      29,
      2007, are as follows:


Balance
                  of fiscal 2007
              
              $
              275In
                  fiscal 2008
              
              
              1,100In
                  fiscal 2009
              
              
              1,100In
                  fiscal 2010
              
              
              1,100In
                  fiscal 2011
              
              
              1,100In
                  fiscal 2012 and thereafter
              
              
              85,050





**3.** **BENEFIT
      PLANS AND POSTRETIREMENT PLANS**




We
      sponsor a defined benefit pension plan covering substantially all eligible
      employees not covered by the union plans. Effective January 1, 2007, the defined
      benefit pension plan was frozen for current participants and closed to new
      entrants. In connection with the freeze, we recorded a $6,099 non-cash
      curtailment benefit in accordance with Statement
      of Financial Accounting Standards (SFAS) No. 88, “Employer’s Accounting for
      Settlements and Curtailments of Defined Benefit Pension Plans and for
      Termination Benefits,” using actuarial assumptions consistent with those we used
      at December 30, 2006. The standard requires curtailment accounting if an event
      eliminates, for a significant number of employees, the accrual of defined
      benefits for some or all of their future service. If we choose to terminate
      the
      pension plan, we will recognize a one-time settlement loss or gain depending
      on
      the funded status at the time of termination. There is no requirement to
      terminate the plan. We
      also
      maintain postretirement medical benefit plans for certain eligible retirees
      for
      which postretirement benefit expense on a quarterly basis is
      insignificant.


6
 **MAIDENFORM
        BRANDS, INC. AND SUBSIDIARIES**
 **NOTES
        TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
        (continued)**
 ***(in
        thousands, except share and per share amounts)***
 ***(unaudited)***


The
      components of pension benefit (income) expense charged to operations are as
      follows:


**Three
                  months ended**
              
              **Nine
                  months ended****September
                  29,2007**
              
              **September
                  30,2006**
              
              **September
                  29,2007**
              
              **September
                  30,2006**Service
                  cost
              
              $
              -
              
              $
              481
              
              $
              -
              
              $
              1,443Interest
                  cost
              
              
              272
              
              
              348
              
              
              816
              
              
              1,042Expected
                  return on plan assets
              
              
              (381
              )
              
              (318
              )
              
              (1,143
              )
              
              (950
              )Recognized
                  net actuarial loss
              
              
              -
              
              
              34
              
              
              -
              
              
              100Net
                  periodic benefit (income) expense
              
              
              (109
              )
              
              545
              
              
              (327
              )
              
              1,635Curtailment
                  gain
              
              
              -
              
              
              -
              
              
              (6,099
              )
              
              -Total
              
              $
              (109
              )
              $
              545
              
              $
              (6,426
              )
              $
              1,635




**4.** **STOCKHOLDERS’
      EQUITY**


**Accumulated****Common**
              
              **Treasury**
              
              **Additional**
              
              
              
              **other**
              
              **Total****stock**
              
              **stock**
              
              **paid-in**
              
              **Retained**
              
              **comprehensive**
              
              **stockholders'****Shares**
              
              **$**
              
              **Shares**
              
              **$**
              
              **capital**
              
              **earnings**
              
              **income**
              
              **equity****Balance
                  at December 30, 2006**
              
              
              23,488,357
              
              $
              235
              
              
              (523,531
              )
              $
              (5,923
              )
              $
              59,478
              
              $
              20,953
              
              $
              158
              
              $
              74,901Stock-based
                  compensation
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              1,783
              
              
              
              
              
              
              
              
              1,783Purchase
                  of common stock fortreasury
              
              
              
              
              
              
              
              
              (420,600
              )
              
              (7,010
              )
              
              
              
              
              
              
              
              
              
              
              (7,010
              )Stock
                  options exercised
              
              
              
              
              
              
              
              
              92,591
              
              
              1,056
              
              
              (173
              )
              
              
              
              
              
              
              
              883Adoption
                  of FIN No. 48 (see Note 6)
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              (1,631
              )
              
              
              
              
              (1,631
              )**Comprehensive
                  income**Net
                  income
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              27,853
              
              
              
              
              
              27,853Changes
                  during the period
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              10
              
              
              10Total
                  comprehensive income
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              27,863**Balance
                  at September 29, 2007**
              
              
              23,488,357
              
              $
              235
              
              
              (851,540
              )
              $
              (11,877
              )
              $
              61,088
              
              $
              47,175
              
              $
              168
              
              $
              96,789




**5** **.** **COMPREHENSIVE
      INCOME**




The
      changes in comprehensive income are as follows:


**Nine
                  months ended****September
                  29,2007**
              
              **September
                  30,2006**Net
                  income
              
              $
              27,853
              
              $
              24,539Foreign
                  currency translation adjustments (a)
              
              
              238
              
              
              (98
              )Pension
                  plan curtailment, net of tax
              
              
              146
              
              
              -Interest
                  rate swaps, net of tax
              
              
              (374
              )
              
              (14
              )Comprehensive
                  income
              
              $
              27,863
              
              $
              24,427




(a)
              No
                  tax benefit has been provided associated with the foreign currency
                  translation adjustment due to management’s intention to permanently
                  reinvest the earnings of our foreign
                  subsidiaries.


7
 **MAIDENFORM
        BRANDS, INC. AND SUBSIDIARIES**
 **NOTES
        TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
        (continued)**
 ***(in
        thousands, except share and per share amounts)***
 ***(unaudited)***
   **6.** **INCOME
      TAXES**





Effective
      at the beginning of the first quarter of 2007, we adopted Financial Accounting
      Standards Board (FASB) Interpretation No. 48 (FIN No. 48), “Accounting for
      Uncertainty in Income Taxes,” which clarifies the accounting and disclosure for
      uncertainty in income taxes. As a result of the adoption, we recorded a decrease
      to beginning retained earnings of $1,631 and increased our accruals for
      uncertain tax positions and related interest and penalties by a corresponding
      amount. As of the adoption date and September 29, 2007, the total unrecognized
      tax benefits were $4,711 and $5,710, respectively, (net of federal and, if
      applicable, state effect) and would impact our effective tax rate, if
      recognized.




We
      recognize interest and, if applicable, penalties which could be assessed related
      to unrecognized tax benefits in income tax expense. As of the adoption date,
      the
      total amount of accrued interest and penalties, before federal and, if
      applicable, state effect, is $698. For the three and nine-month periods ended
      September 29, 2007, we recorded $103 and $275, respectively, in interest before
      federal and, if applicable, state effect.





We
      file
      income tax returns in the U.S. federal jurisdiction and various states and
      foreign jurisdictions. For federal income tax purposes, our 2004 through 2006
      tax years remain open for examination by the tax authorities under the normal
      three year statute of limitations. For state tax purposes, our 2002 through
      2006
      tax years remain open for examination by the tax authorities under a four year
      statute of limitations, however, certain states may keep their statute open
      for
      nine to ten years.




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; changes to the valuation allowance for
      deferred tax assets (such changes would be recorded discretely in the quarter
      in
      which they occurred); changes to actual or forecasted permanent book to tax
      differences (non-deductible expenses); impacts from future tax settlements
      with
      state, federal or foreign tax authorities (such changes would be recorded
      discretely in the quarter in which they occurred); or impacts from tax law
      changes (to the extent such changes effect our deferred tax assets/liabilities,
      these changes would generally be recorded discretely in the quarter in which
      they occurred). Our effective income tax rate for the three and nine-month
      periods ended September 29, 2007 was 40.9% and 41.5%, respectively, as compared
      to an effective income tax rate for the three and nine-month periods ended
      September 30, 2006 of 40.4% and 40.7%, respectively. The increase in the
      effective income tax rate was primarily the result of FIN No. 48.





**7.** **SEGMENT
      INFORMATION**




We
      report
      segment information in accordance with the provisions of SFAS No. 131,
‘‘Disclosures about Segments of an Enterprise and Related Information,’’ which
      requires segment information to be disclosed based on a ‘‘management approach.’’
The management approach refers to the internal reporting that we use for making
      operating decisions and assessing the performance of reportable segments. SFAS
      No. 131 also requires disclosure about products and services, geographic areas
      and major customers. For purposes of complying with SFAS No. 131, 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 servicing similar customers in foreign countries while our Retail
      segment reflects our operations from our retail stores and internet operations.
      Licensing income is also included in our Wholesale segment. Within our
      reportable segments, Wholesale includes corporate-related assets. 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 or
      units produced to support each segment’s net sales. Intersegment sales and
      transfers are recorded at cost and treated as a transfer of
      inventory.


8
 **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**
              
              **Nine
                  months ended****September
                  29,2007**
              
              **September
                  30,2006**
              
              **September
                  29,2007**
              
              **September
                  30,2006**Net
                  salesWholesale
              
              $
              82,476
              
              $
              96,457
              
              $
              284,634
              
              $
              289,479Retail
              
              
              17,713
              
              
              17,376
              
              
              41,748
              
              
              42,337Total
              
              $
              100,189
              
              $
              113,833
              
              $
              326,382
              
              $
              331,816Operating
                  incomeWholesale
              
              $
              11,899
              
              $
              14,546
              
              $
              52,615
              
              $
              44,312Retail
              
              
              2,718
              
              
              2,532
              
              
              2,701
              
              
              3,518Operating
                  income
              
              
              14,617
              
              
              17,078
              
              
              55,316
              
              
              47,830Interest
                  expense, net
              
              
              1,454
              
              
              2,177
              
              
              7,721
              
              
              6,446Income
                  before provisionfor
                  income taxes
              
              $
              13,163
              
              $
              14,901
              
              $
              47,595
              
              $
              41,384Depreciation
                  and amortizationWholesale
              
              $
              703
              
              $
              625
              
              $
              2,018
              
              $
              1,854Retail
              
              
              346
              
              
              377
              
              
              1,065
              
              
              1,123Total
              
              $
              1,049
              
              $
              1,002
              
              $
              3,083
              
              $
              2,977Net
                  sales by geographic areaUnited
                  States
              
              $
              90,354
              
              $
              105,997
              
              $
              299,024
              
              $
              309,767International
                  (a)
              
              
              9,835
              
              
              7,836
              
              
              27,358
              
              
              22,049Total
              
              $
              100,189
              
              $
              113,833
              
              $
              326,382
              
              $
              331,816Intercompany
                  sales from wholesaleto
                  retail
              
              $
              4,193
              
              $
              4,336
              
              $
              10,333
              
              $
              10,956**September
                  29,2007**
              
              
              **December
                  30,2006**Identifiable
                  assetsWholesale
              
              $
              240,614
              
              $
              218,636Retail
              
              
              26,218
              
              
              26,217Total
              
              $
              266,832
              
              $
              244,853




(a)
      International net sales are identified based on the location of the customer.





At
      September 29, 2007 and December 30, 2006, our five largest uncollaterized
      receivables represented approximately 64% and 57% of total accounts receivable,
      respectively. For the three-month periods ended September 29, 2007 and September
      30, 2006, two customers in the Wholesale segment each accounted for more than
      10% of our consolidated net sales. For the nine-month period ended September
      29,
      2007, three customers in the Wholesale segment each accounted for more than
      10%
      of our consolidated net sales as compared to two customers in the Wholesale
      segment for the nine-month period ended September 30, 2006.


9
 **MAIDENFORM
        BRANDS, INC. AND SUBSIDIARIES**
 **NOTES
        TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
        (continued)**
 ***(in
        thousands, except share and per share amounts)***
 ***(unaudited)***
   **8.** **EARNINGS
      PER SHARE**




The
      following is a reconciliation of basic number of common shares outstanding
      to
      diluted common and common equivalent shares outstanding:


**Three
                  months ended**
              
              **Nine
                  months ended****September
                  29,2007**
              
              **September
                  30,2006**
              
              **September
                  29,2007**
              
              **September
                  30,2006**Net
                  income
              
              $
              7,779
              
              $
              8,874
              
              $
              27,853
              
              $
              24,539Weighted
                  average number of common andcommon
                  equivalent shares outstanding:Basic
                  number of common sharesoutstanding
              
              
              22,886,961
              
              
              22,884,957
              
              
              22,959,770
              
              
              23,066,698Impact
                  of dilutive securities
              
              
              1,136,759
              
              
              1,216,644
              
              
              1,161,941
              
              
              1,150,872Dilutive
                  number of common and commonequivalent
                  shares outstanding
              
              
              24,023,720
              
              
              24,101,601
              
              
              24,121,711
              
              
              24,217,570Basic
                  earnings per common share
              
              $
              0.34
              
              $
              0.39
              
              $
              1.21
              
              $
              1.06Diluted
                  earnings per common share
              
              $
              0.32
              
              $
              0.37
              
              $
              1.15
              
              $
              1.01




For
      the
      three and nine-month periods ended September 29, 2007, approximately 186,000
      and
      62,000 equity awards, respectively, were not included in the computation of
      diluted earnings per share because the exercise prices of the awards were
      greater than the average market price of the shares of common
      stock.





For
      the
      three and nine-month periods ended September 29, 2007, approximately 429,000
      and
      168,000 equity awards, respectively, were not included in the computation of
      diluted earnings per share because of their anti-dilutive effect.





Options
      to purchase approximately 447,000 and 478,000 shares of common stock outstanding
      during the three and nine-month periods ended September 30, 2006, respectively,
      were not included in the computation of diluted earnings per share because
      the
      option exercise prices were greater than the average market price of the shares
      of common stock.





**9.** **COMMITMENTS
      AND CONTINGENCIES**




**Purchase
      commitments**




In
      the
      normal course of business, we enter into purchase commitments for both finished
      goods and raw materials. At September 29, 2007, we had purchase commitments
      of
      $74,100 and believe that we have adequate reserves for expected losses arising
      from all purchase commitments.





**Litigation**





We
      are
      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. While it is possible
      that our cash flows and results of operations in a particular quarter or year
      could be materially affected, it is our opinion that these matters will not
      have
      a material impact on our consolidated financial position, or ongoing results
      of
      operations and cash flows.


10
 **MAIDENFORM
        BRANDS, INC. AND SUBSIDIARIES**
 **NOTES
        TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
        (continued)**
 ***(in
        thousands, except share and per share amounts)***
 ***(unaudited)***
   **10.** **ACCRUED
      EXPENSES AND OTHER CURRENT LIABILITIES**


**September
                  29,2007**
              
              **December
                  30,2006**Accrued
                  wages, incentive compensation and payroll taxes
              
              $
              7,403
              
              $
              8,457Accrued
                  trade promotions
              
              
              3,243
              
              
              1,796Accrued
                  professional fees
              
              
              1,083
              
              
              1,604Federal,
                  state and local income taxes payable
              
              
              -
              
              
              4,295Accrued
                  other
              
              
              9,575
              
              
              5,024$
              21,304
              
              $
              21,176





Other
      accrued expenses and current liabilities include, among other items, accrued
      interest, accrued medical insurance, and accrued advertising.


11


**Item
      2. Management’s Discussion and Analysis of Financial Conditions 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 are under no obligation
      to inform you if they do.  Actual events or results may differ materially
      from those contained in the projections or forward-looking statements. 
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 through multiple distribution channels, including
      department stores and national chain stores, mass merchants (including warehouse
      clubs), other (including specialty retailers, off-price retailers and licensing
      income), our company-operated outlet stores and our websites.





We
      sell
      our products under some of the most recognized brands in the intimate apparel
      industry, including Maidenform ® ,
      Flexees ® ,
      Lilyette ® ,
      Sweet
      Nothings ® ,
      Rendezvous ® ,
      Subtract ® ,
      Bodymates ® and Self
      Expressions ® .
      Our
      Maidenform ® *,* Flexees ® and
      Lilyette ® brands
      are broadly sold in department stores and national chain stores. Our other
      brands are distributed through national chain stores and selected mass
      merchants. These other brands carry our corporate endorsement and leverage
      our
      product technology, but are separate brands with distinctly different logos.
      In
      addition to our owned brands, we also supply private brand products to selected
      retailers.





**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 many near-term opportunities for growth and operational improvements,
      as well as challenges to 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
      product innovation and leading brands, sourcing and supply chain efficiencies,
      continued growth of the mass merchant channel, pressure from retailers caused
      by
      the ongoing 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:





•
            increasing
                consumer identification with our brands through further marketing
                investments;


•
            continuing
                to launch innovative products;


•
            increasing
                our presence in department stores and national chain stores through
                the
                use of Maidenform®,
                Flexees®and Lilyette®;


•
            increasing
                our presence in the mass merchant channel through the use of our
                Sweet
                Nothings®,
                Bodymates®,
                Self Expressions®and private brands;


•
            expanding
                our international presence;


•
            marketing
                our brands of intimate apparel;


•
            making
                selective acquisitions, entering into licenses, and developing products
                and marketing that will complement our existing products or distribution
                channels; and


•
            merchandising,
                marketing and selling private brand products to selected
                retailers.





12


*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 ® ,
      Flexees ® and
      Lilyette ® brands.
      We plan to continue to invest in increasing our net sales with department store
      customers, which we believe is important to our long-term positioning in the
      channel. There has been a growing trend toward consolidation of department
      stores. We expect the rate of our future net sales growth with department stores
      to be moderated by the reduction in both the number of department store
      customers and the number of doors (distinct locations operated by a particular
      retailer) operated by those customers. We have grown both our market share
      and
      our net sales significantly in the past several years with national chain
      stores. We expect to see continued growth with national chain stores in the
      future as consumers continue to seek out value alternatives and as our customers
      in this channel continue to open new doors. We have customers located outside
      the United States that purchase our Maidenform ® ,
      Flexees ® and
      Lilyette ® brands.
      The majority of the net sales to these customers are included in the department
      stores and national chain stores channel.





*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 brands Sweet
      Nothings ® ,
      Bodymates ® ,
      and
      Self Expressions ® as well
      as private brands. We have experienced significant growth in this channel over
      the past several years and expect to achieve growth in the future as we are
      able
      to increase both the floor space and number of doors in which our products
      are
      sold. 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 is likely to increase over
      time. The volume and mix of net sales of our brands and of private label 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.* Our
      net
      sales from this channel, which include sales to specialty retailers and to
      off-price retailers, have historically been a relatively small component of
      our
      overall net sales. We participate in private brands in the specialty retailer
      area as opportunities present themselves. We continually evaluate this channel
      for opportunities. Licensing income, as well as sales to foreign distributors,
      are included in this channel.





We
      will
      selectively target strategic acquisitions or a brand start-up to grow our
      consumer base and would utilize the acquired companies to complement the
      products, channels and geographic reach of our existing portfolio. We believe
      that acquisitions could enhance our product offerings to retailers and provide
      potential growth. 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. The opportunity to license
      designer brands is also a potential opportunity for us.





*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 economic
      conditions, such as the general retail environment, that can affect our
      consumers and ultimately their levels of overall spending. 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 location
      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. Historically, we have primarily sold excess
      and, to a lesser extent, obsolete inventories through our outlet stores at
      a
      higher margin than that achieved through other liquidation
      alternatives.





13


***Definitions***





In
      reviewing our operating performance, we evaluate both the wholesale and retail
      segments by focusing on each segment’s operating income, cash flows from
      operations and inventory turns.





*Net
      Sales* .
      Our net
      sales are derived from two operating segments, wholesale and retail. Our net
      sales in the wholesale segment are recorded net of cooperative advertising
      allowances, sales returns, sales discounts, and markdown allowances provided
      to
      our customers. Net sales in our retail segment are recognized at the time the
      customer takes possession of the merchandise at the point-of-sale in our stores
      and for our internet sales, net sales are recognized when the products are
      shipped and title passes to the customer.





*Cost
      of Sales* .
      We
      outsource all manufacturing of the products we sell and, therefore the principal
      elements of our cost of sales are for finished goods inventories purchased
      from
      our sourced vendors. Included in cost of sales and affecting our overall gross
      margins are freight expenses from the manufacturers to our distribution centers
      and duty and related expenses in situations where such expenses are charged
      separately. Also included in cost of sales is the cost of warehousing, labor
      and
      overhead related to receiving and warehousing at our distribution centers,
      and
      depreciation of assets related to our receiving and warehousing in our
      distribution centers. Direct labor, cost of fabrics, as well as raw materials
      for fabrics, are the primary components driving the overall cost of our sourced
      finished goods inventories from our sourcing vendors.





*Selling,
      General and Administrative Expenses (SG&A).* Our
      SG&A includes all of our marketing, selling, distribution and general and
      administrative expenses for both the wholesale and retail segments (which
      include our retail outlet store payroll and related benefits), and rent expense.
      General and administrative expenses include management payroll, benefits,
      travel, information systems, accounting, insurance and legal. Additionally,
      depreciation related to the shipping function in our distribution centers and
      our corporate office assets such as furniture, fixtures, and equipment, as
      well
      as amortization of intellectual property, is included in SG&A.





*Income
      Taxes.* We
      account for income taxes using the liability method, which recognizes the amount
      of income tax payable or refundable for the current year and recognizes deferred
      tax liabilities and assets for the future tax consequences of the events that
      have been recognized in the financial statements or tax returns. We routinely
      evaluate all deferred tax assets to determine the likelihood of their
      realization and record a valuation allowance if it is more likely than not
      that
      a deferred tax asset will not be realized. For more information, see notes
      to
      the condensed consolidated financial statements included elsewhere in this
      Quarterly Report on Form 10-Q.





Net
      operating loss carryforwards (NOLs) enable a company to apply net operating
      losses incurred during a current period against a future period's profits in
      order to reduce cash tax liabilities in those future periods. In periods when
      a
      company is generating operating losses, its NOLs will increase. The tax effect
      of the NOLs is recorded as a deferred tax asset. If the company does not believe
      that it is more likely than not that it will be able to utilize the NOLs, it
      records a valuation allowance against the deferred tax asset. Additionally,
      Section 382 of the Internal Revenue Code ("Section 382") imposes
      limitations on a corporation's ability to utilize its NOLs if it experiences
      an
      "ownership change." In general terms, an ownership change results from
      transactions increasing the ownership of certain existing stockholders and,
      or,
      new stockholders in the stock of a corporation by more than 50 percentage
      points during a three year testing period. Any unused annual limitation may
      be
      carried over to later years, and the amount of the limitation may, under certain
      circumstances, be increased to reflect both recognized and deemed recognized
      "built-in gains" that occur during the 60-month period after the ownership
      change. Upon emergence from bankruptcy in 1999, our NOLs were subject to
      Section 382 limitations. As a result of the acquisition in 2004, we
      experienced a change in control as defined by Section 382. As a result of
      this ownership change, the utilization of our NOLs were subject to a new annual
      limitation under Section 382. Subsequent to the acquisition, sales of our
      shares have resulted in additional changes in control for the purpose of Section
      382; however, the annual limitation of our NOLs has not changed. At December
      30,
      2006, we had approximately $62.8 million of book NOLs available for
      utilization in the years from 2007 through 2023.





14


**Results
      of Operations**


**Three
                  months ended**
              
              **Nine
                  months ended****September
                  29,2007**
              
              **September
                  30,2006**
              
              **September
                  29,2007**
              
              **September
                  30,2006****OPERATING
                  DATA: (in millions)**Wholesale
                  sales
              
              $
              82.5
              
              $
              96.5
              
              $
              284.7
              
              $
              289.5Retail
                  sales
              
              
              17.7
              
              
              17.3
              
              
              41.7
              
              
              42.3Net
                  sales
              
              
              100.2
              
              
              113.8
              
              
              326.4
              
              
              331.8Cost
                  of sales
              
              
              59.8
              
              
              71.0
              
              
              199.6
              
              
              206.9Gross
                  profit
              
              
              40.4
              
              
              42.8
              
              
              126.8
              
              
              124.9Selling,
                  general and administrative expenses
              
              
              25.8
              
              
              25.7
              
              
              71.5
              
              
              77.1Operating
                  income
              
              $
              14.6
              
              $
              17.1
              
              $
              55.3
              
              $
              47.8
  **As
                  a percentage of net sales****Three
                  months ended**
              
              **Nine
                  months ended****September
                  29, 2007**
              
              **September
                  30,2006**
              
              **September
                  29,2007**
              
              **September
                  30,2006****OPERATING
                  DATA:**Wholesale
                  sales
              
              
              82.3
              %
              
              84.8
              %
              
              87.2
              %
              
              87.3
              %Retail
                  sales
              
              
              17.7
              
              
              15.2
              
              
              12.8
              
              
              12.7Net
                  sales
              
              
              100.0
              
              
              100.0
              
              
              100.0
              
              
              100.0Cost
                  of sales
              
              
              59.7
              
              
              62.4
              
              
              61.2
              
              
              62.4Gross
                  profit
              
              
              40.3
              
              
              37.6
              
              
              38.8
              
              
              37.6Selling,
                  general and administrative expenses
              
              
              25.7
              
              
              22.6
              
              
              21.9
              
              
              23.2Operating
                  income
              
              
              14.6
              %
              
              15.0
              %
              
              16.9
              %
              
              14.4
              %





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 we sell them to, as follows: (1) department stores and
      national chain stores, (2) mass merchants and (3) other.





Our
      department stores and national chain stores channel primarily consists of sales
      of our Maidenform ® ,
      Flexees ® ,
      Lilyette ® ,
      and
      private brands on a worldwide basis to customers within this category.
 Within the mass merchant channel, we sell brands such as Sweet
      Nothings ® ,
      Bodymates ® ,
      Self
      Expressions ® and
      private brands 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. In addition, licensing
      income is included in our other channel.




15


**Three
                  months ended**
              
              **Nine
                  months ended****September
                  29,**
              
              **September
                  30,**
              
              **$**
              
              **%**
              
              **September
                  29,**
              
              **September
                  30,**
              
              **$**
              
              **%****2007**
              
              **2006**
              
              **change**
              
              **change**
              
              **2007**
              
              **2006**
              
              **change**
              
              **change****(in
                  millions)**
              
              **(in
                  millions)**Department
                  Stores andNational
                  Chain Stores
              
              $
              51.8
              
              $
              58.3
              
              $
              (6.5
              )
              
              (11.1
              %)
              $
              173.5
              
              $
              177.2
              
              $
              (3.7
              )
              
              (2.1
              %)Mass
                  Merchants
              
              
              20.4
              
              
              25.4
              
              
              (5.0
              )
              
              (19.7
              )
              
              74.5
              
              
              75.5
              
              
              (1.0
              )
              
              (1.3
              )Other
              
              
              10.3
              
              
              12.8
              
              
              (2.5
              )
              
              (19.5
              )
              
              36.7
              
              
              36.8
              
              
              (0.1
              )
              
              (0.3
              )Total
                  Wholesale
              
              
              82.5
              
              
              96.5
              
              
              (14.0
              )
              
              (14.5
              )
              
              284.7
              
              
              289.5
              
              
              (4.8
              )
              
              (1.7
              )Retail
              
              
              17.7
              
              
              17.3
              
              
              0.4
              
              
              2.3
              
              
              41.7
              
              
              42.3
              
              
              (0.6
              )
              
              (1.4
              )Total
                  Consolidated Net Sales
              
              $
              100.2
              
              $
              113.8
              
              $
              (13.6
              )
              
              (12.0
              %)
              $
              326.4
              
              $
              331.8
              
              $
              (5.4
              )
              
              (1.6
              %)





Our
      retail segment consists of outlet stores and internet sales. We had 78 outlet
      stores as of September 29, 2007 compared to 77 stores as of September 30, 2006.





In
      addition, our mix of products sold between bras, shapewear, and panties in
      the
      wholesale segment for the three and nine-month periods ended September 29,
      2007
      and September 30, 2006, respectively, is summarized below:


**Three
                  months ended**
              
              **Nine
                  months ended****September
                  29,2007**
              
              **September
                  30,2006**
              
              **September
                  29,2007**
              
              **September
                  30,2006**Bras
              
              
              64%
              
              
              68%
              
              
              70%
              
              
              68%Shapewear
              
              
              25
              
              
              20
              
              
              20
              
              
              21Panties
              
              
              11
              
              
              12
              
              
              10
              
              
              11100%
              
              
              100%
              
              
              100%
              
              
              100%




***Net
      Sales***




Consolidated
      net sales decreased by $13.6 million, or 12.0%, from $113.8 million for the
      three months ended September 30, 2006 to $100.2 million for the three months
      ended September 29, 2007. Consolidated net sales decreased by $5.4 million,
      or
      1.6%, from $331.8 million for the nine months ended September 30, 2006 to $326.4
      million for the nine months ended September 29, 2007.





Wholesale
      segment net sales decreased by $14.0 million, or 14.5%, from $96.5 million
      for
      the three months ended September 30, 2006 to $82.5 million for the three months
      ended September 29, 2007. Total international sales, which are included in
      the
      wholesale segment, increased by $2.1 million, or 26.9%, from $7.8 million for
      the three months ended September 30, 2006 to $9.9 million for the three months
      ended September 29, 2007, primarily from product assortment expansion in
      countries such as Mexico, Canada and Germany. Our department stores and national
      chain stores channel net sales decreased by $6.5 million, or 11.1%, from $58.3
      million for the three months ended September 30, 2006 to $51.8 million for
      the
      three months ended September 29, 2007. Solid performance in our new shapewear
      brand, Control It TM ,
      did not
      offset the unfavorable sales environment which affected certain product
      replenishment orders from customers in this channel. Our mass merchant channel
      net sales decreased by $5.0 million, or 19.7%, from $25.4 million for the three
      months ended September 30, 2006 to $20.4 million for the three months ended
      September 29, 2007 reflecting the continued transition throughout 2007 of
      re-intensifying our Self Expressions ® brand
      from a private brand with one mass customer. Additionally, we had fewer sales
      from a warehouse club customer in the third quarter of 2007, largely reflecting
      the timing of a program launch that occurred in the comparable year-ago period.
      Partially offsetting the net decrease in the mass merchant channel was continued
      expansion of our Sweet Nothings ® brand
      with one mass customer both domestically and internationally, particularly
      in
      full-figure bras and shapewear. Other channel net sales, which include sales
      to
      specialty retailers, off-price retailers and licensing income, decreased by
      $2.5
      million, or 19.5%, from $12.8 million for the three months ended September
      30,
      2006 to $10.3 million for the three months ended September 29, 2007. This
      decrease was due to a non-recurring private brand program with a specialty
      retailer in the year-ago period, although partially offset by an increase in
      licensing income and liquidation sales.





16




Net
      sales
      in our wholesale segment decreased by $4.8 million, or 1.7%, from $289.5 million
      for the nine months ended September 30, 2006 to $284.7 million for the nine
      months ended September 29, 2007. International sales increased $5.4 million,
      or
      24.5%, from $22.0 million for the nine months ended September 30, 2006 to $27.4
      million for the nine months ended September 29, 2007. The growth in
      international sales was largely driven by strong sales in countries such as
      Mexico, Canada and the U.K. Of the $4.8 million decrease in wholesale segment
      net sales during the nine months ended September 29, 2007, $3.7 million was
      from
      decreased sales in the department stores and national chain stores channel
      driven by the unfavorable sales environment that affected certain product
      replenishment orders from customers, partially offset by solid performance
      from
      our Lilyette ® brand
      and our new shapewear brand, Control It TM .
      An
      additional $1.0 million decrease came from mass merchants, primarily
      as a result of lower sales of private label with the re-intensification of
      our
      Self Expressions ® brand. Additionally, we had fewer sales from a warehouse club customer in the third
      quarter of 2007, largely reflecting the timing of a program launch that occurred
      during the third quarter 2006. Partially offsetting the decrease is the
      continued expansion of our Sweet Nothings ® brand
      with one customer, particularly in full-figure bras and shapewear.




Net
      sales
      in our retail segment increased $0.4 million, or 2.3%, from $17.3 million for
      the three months ended September 30, 2006 to $17.7 million for the three months
      ended September 29, 2007. Net sales in our retail segment decreased $0.6
      million, or 1.4%, from $42.3 million for the nine months ended September 30,
      2006 to $41.7 million for the nine months ended September 29, 2007. We had 78
      outlet stores as of September 29, 2007 compared to 77 outlet stores as of
      September 30, 2006.  Same stores sales, defined as sales from stores
      open for more than one year, for the three-month period ended September 29,
      2007
      increased 2.2% due to higher sales in Lilyette ® and
      Maidenform ® bras, in
      addition to focused product promotions. For the nine-month period ended
      September 29, 2007, same stores sales decreased 2.2%. Our internet sales
      decreased by $0.1 million from $1.1 million for the three months ended September
      30, 2006 to $1.0 million for the three months ended September 29, 2007. Our
      internet sales increased by $0.3 million from $2.6 million for the nine months
      ended September 30, 2006 to $2.9 million for the nine months ended September
      29,
      2007.





***Gross
      Profit***




Consolidated
      gross profit decreased by $2.4 million, or 5.6%, from $42.8 million for the
      three months ended September 30, 2006 to $40.4 million for the three months
      ended September 29, 2007. However, as a percentage of net sales, consolidated
      gross margins increased by 270 basis points from 37.6% for the three months
      ended September 30, 2006 to 40.3% for the three months ended September 29,
      2007.
      Consolidated gross profit increased by $1.9 million, or 1.5%, from $124.9
      million during the nine months ended September 30, 2006 to $126.8 million for
      the nine months ended September 29, 2007. As a percentage of net sales, gross
      profit increased by 120 basis points from 37.6% for the nine months ended
      September 30, 2006 to 38.8% for the nine months ended September 29, 2007.




Gross
      profit as a percentage of net sales for the wholesale segment increased 260
      basis points from 34.1% for the three months ended September 30, 2006 to 36.7%
      for the three months ended September 29, 2007. This increase was a result of
      both customer and product mix, including a higher percentage of net sales from
      our department stores and national chain stores channel, as well as cost
      improvements in gross margin from our sourcing initiatives. Gross profit as
      a
      percentage of net sales for the wholesale segment was 34.8% for the nine months
      ended September 30, 2006 as compared to 36.2% for the nine months ended
      September 29, 2007. This increase of 140 basis points is primarily a result
      of
      the reasons mentioned above.




Gross
      profit for the retail segment was 57.2% for the three months ended September
      30,
      2006 as compared to 57.1% for the three months ended September 29, 2007, and
      57.0% for the nine months ended September 30, 2006 as compared to 56.6% for
      the
      nine months ended September 29, 2007. This decrease for the nine months ended
      September 29, 2007 was largely driven by a change in the overall product mix
      and
      was partially offset by cost improvements from our sourcing initiatives.





***Selling,
      General and Administrative Expenses (SG&A)***




Consolidated
      SG&A increased by $0.1 million, or 0.4%, from $25.7 million for the three
      months ended September 30, 2006 to $25.8 million for the three months ended
      September 29, 2007. As a percentage of net sales, SG&A increased from 22.6%
      for the three months ended September 30, 2006 to 25.7% for the three months
      ended September 29, 2007.





SG&A
      for our wholesale segment, which includes corporate-related expenses, increased
      by $0.1 million, or 0.5%, from $18.3 million for the three months ended
      September 30, 2006 to $18.4 million for the three months ended September 29,
      2007. As a percentage of net sales, wholesale segment SG&A increased from
      19.0% for the three months ended September 30, 2006 to 22.3% for the three
      months ended September 29, 2007. The increase of $0.1 million is a result of
      increased workers’ compensation and medical expenses of $0.9 million associated
      with increased claims in 2007 and increased other expenses of $0.6 million.
      Partially offsetting these increases were a decrease in advertising expense
      of
      $0.7 million due to decreased media spending in the period as we retained a
      new
      advertising agency and will launch a new campaign scheduled for spring 2008,
      and
      decreased pension expense of $0.7 million associated with the pension plan
      freeze. Retail SG&A for the three months ended September 29, 2007 remained
      unchanged when compared to the same period last year.





17


Consolidated
      SG&A decreased by $5.6 million, or 7.3%, from $77.1 million for the nine
      months ended September 30, 2006 to $71.5 million for the nine months ended
      September 29, 2007. As a percentage of net sales, SG&A decreased from 23.2%
      for the nine months ended September 30, 2006 to 21.9% for the nine months ended
      September 29, 2007. Consolidated SG&A for the nine months ended September
      29, 2007 included a non-cash pension curtailment gain of $6.1 million as
      discussed below.





SG&A
      for our wholesale segment, which includes corporate-related expenses and the
      pension curtailment gain, decreased by $5.9 million, or 10.4%, from $56.5
      million for the nine months ended September 30, 2006 to $50.6 million for the
      nine months ended September 29, 2007. Our
      pension plan was frozen effective January 1, 2007 for current employee
      participants and closed to new entrants. In connection with this freeze, we
      recognized a non-cash curtailment gain of $6.1 million and reported in our
      wholesale segment SG&A. Wholesale segment SG&A, excluding this
      curtailment gain, increased slightly by $0.2 million, or 0.4%, to $56.7 million
      for the nine months ended September 29, 2007. A s
      a percentage of net sales, excluding this curtailment gain, wholesale segment
      SG&A increased from 19.5% for the nine months ended September 30, 2006 to
      19.9% for the nine months ended September 29, 2007. The
      increase of $0.2 million is a result of increased workers’ compensation and
      medical expenses of $2.6 million associated with increased claims in 2007 and
      increased other expenses of $1.1 million. Partially offsetting these increases
      were decreased pension expense of $1.8 million associated with the pension
      plan
      freeze, decreased advertising expense of $1.1 million due to decreased media
      spending as discussed above, and decreased fees of $0.6 million associated
      with
      Sarbanes-Oxley compliance. Retail SG&A increased by $0.3 million, or 1.5%, from $20.6 million for the
      nine months ended September 30, 2006 to $20.9 million for the three months
      ended
      September 29, 2007 as a result of one additional outlet store.





***Operating
      Income***




Our
      consolidated operating income decreased by $2.5 million, or 14.6%, from $17.1
      million for the three months ended September 30, 2006 to $14.6 million for
      the
      three months ended September 29, 2007. Our consolidated operating income
      increased by $7.5 million, or 15.7%, from $47.8 million for the nine months
      ended September 30, 2006 to $55.3 million for the nine months ended September
      29, 2007. Excluding the curtailment gain mentioned above, operating income
      for
      the nine months ended September 29, 2007 increased $1.4 million, or 2.9%, to
      $49.2 million.





For
      the
      foregoing reasons, operating income for the wholesale segment decreased by
      $2.7
      million, or 18.5%, from $14.6 million for the three months ended September
      30,
      2006 to $11.9 million for the three months ended September 29, 2007. Operating
      income for the wholesale segment increased by $8.3 million, or 18.7%, from
      $44.3
      million during the nine months ended September 30, 2006 to $52.6 million during
      the nine months ended September 29, 2007. Excluding the curtailment gain
      mentioned above, operating income for the nine months ended September 29, 2007
      increased $2.2 million, or 5.0%, to $46.5 million.





Also,
      for
      the reasons discussed above, operating income for the retail segment increased
      by $0.2 million, or 8.0%, from $2.5 million for the three months ended September
      30, 2006 to $2.7 million for the three months ended September 29, 2007. The
      retail segment’s operating income decreased by $0.8 million from $3.5 million
      during the nine months ended September 30, 2006 to $2.7 million for the nine
      months ended September 29, 2007.




***Interest
      Expense, Net***




Interest
      expense, net, decreased by $0.8 million, or 36.4%, from $2.2 million for the
      three months ended September 30, 2006 to $1.4 million for the three months
      ended
      September 29, 2007 reflecting the benefit of lower average debt outstanding
      and
      a lower average interest rate for the current quarter when compared to the
      same
      period last year. The average balance of total debt outstanding decreased from
      $122.9 million for the three months ended September 30, 2006 to $92.1 million
      for the three months ended September 29, 2007, and the average interest rate
      during the three months ended September 30, 2006 was 6.8% as compared to an
      average interest rate of 6.6% during the three months ended September 29,
      2007.





Interest
      expense, net, increased $1.3 million, or 20.3%, from $6.4 million for the nine
      months ended September 30, 2006 to $7.7 million for the nine months ended
      September 29, 2007. The increase was a result of expensing deferred financing
      costs of $2.4 million as a result of refinancing our credit facility on June
      15,
      2007, as discussed below. This increase was partially offset by reduced interest
      expense resulting from lower average debt outstanding for the nine-month period
      ending September 29, 2007 compared to the nine-month period ending September
      30,
      2006. The average balance of total debt outstanding decreased from $130.1
      million for the nine months ended September 30, 2006 to $103.2 million for
      the
      nine months ended September 29, 2007. The average interest rate during the
      nine
      months ended September 30, 2006 was 6.4% as compared to a an average interest
      rate of 6.7% during the nine months ended September 29, 2007.





18





***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; changes to the valuation allowance for
      deferred tax assets (such changes would be recorded discretely in the quarter
      in
      which they occurred); changes to actual or forecasted permanent book to tax
      differences; impacts from future tax settlements with state, federal or foreign
      tax authorities (such changes would be recorded discretely in the quarter in
      which they occurred); or impacts from tax law changes (to the extent such
      changes affect our deferred tax assets/liabilities, these changes would
      generally be recorded discretely in the quarter in which they occurred). Our
      effective income tax rate for the three and nine-month periods ended September
      29, 2007 was 40.9% and 41.5%, respectively, as compared to an effective income
      tax rate for the three and nine-month periods ended September 30, 2006 of 40.4%
      and 40.7%, respectively. This increase in the effective income tax rate was
      primarily the result of Financial Accounting Standards Board (FASB)
      Interpretation No. 48 (FIN No. 48), “Accounting for Uncertainty in Income
      Taxes.”





Because
      of significant net operating loss carryforwards (NOLs) available to offset
      income taxes payable, our cash income taxes to be paid will be at a rate lower
      than our effective income tax rate.





***Net
      Income***




For
      the
      foregoing reasons, our net income decreased by $1.1 million from $8.9 million
      for the three months ended September 30, 2006 to $7.8 million for the three
      months ended September 29, 2007. Our net income increased by $3.4 million from
      $24.5 million for the nine months ended September 30, 2006 to $27.9 million
      for
      the nine months ended September 29, 2007. Excluding the curtailment gain and
      the
      expensing of the deferred financing costs mentioned above, net income for the
      nine-month period ended September 29, 2007 increased $1.2 million, or 4.9%,
      when
      compared to the same period last year.




**Liquidity
      and Capital Resources**




*Operating
      activities.* Cash flows provided by operating activities were $32.3 million
      for the nine months ended September 29, 2007 compared to $12.4 million for
      the
      nine months ended September 30, 2006. This increase was primarily driven by
      changes in working capital. Accounts receivable for the nine months ended
      September 29, 2007 increased $8.7 million compared to an increase of $22.6
      million for the nine months ended September 30, 2006, the change of which was
      a
      result of the timing of cash collections and lower wholesale net sales during
      the third quarter of 2007. Accounts payable for the nine months ended September
      29, 2007 increased $15.0 million compared to an increase of $7.3 million for
      the
      nine months ended September 30, 2006 and was primarily a result of supply chain
      and sourcing initiatives. Income tax payable for the nine months ended September
      29, 2007 decreased $0.5 million compared to an increase of $5.1 million for
      the
      nine months ended September 30, 2006, and was primarily due to higher required
      estimated tax payments in the current year.




*Investing
      activities.* Cash
      flows used in investing activities were $4.5 million for the nine months ended
      September 29, 2007 compared to $1.7 million for the nine months ended September
      30, 2006. Capital expenditures for the nine months ended September 29, 2007
      increased by $2.8 million when compared to the nine months ended September
      30,
      2006 due primarily to information technology upgrades and construction
      expenditures related to the relocation of our company headquarters.





*Financing
      activities.* Cash
      flows used in financing activities were $27.6 million for the nine months ended
      September 29, 2007 compared to $25.2 million for the nine months ended September
      30, 2006. The increase in cash flows used in financing activities was primarily
      due to the prepayments on our long term debt.





On
      June
      15, 2007, we entered into a credit agreement, consisting of a 7-year, $100.0
      million amortizing first lien term loan (the “Term Loan”) and a 5-year, $50.0
      million revolving loan facility (the “Revolving Loan,” and together with the
      Term Loan, the “Credit Facility”). The Revolving Loan provides for direct
      borrowings and issuance of stand-by letters of credit on our behalf. 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.
      Borrowings are limited by the borrowing base, which consists of 85.0% of
      eligible accounts receivable and 50.0% of eligible inventory. We used the
      proceeds from the borrowings, together with available cash on hand, to repay
      all
      amounts due under our existing credit facility.





19


Additional
      fees are payable under the Credit Facility including (i) a fee on outstanding
      letters of credit equal to the margin over LIBOR applicable to the Revolving
      Loan, (ii) a letter of credit fronting fee equal to 0.25% per annum on the
      daily
      amount available to be drawn under outstanding letters of credit and (iii)
      an
      unused line fee on the maximum principle amount undrawn under the Revolving
      Loan
      ranging from 0.15% to 0.35% determined quarterly based on our leverage ratio
      for
      the preceding four fiscal quarters.





At
      September 29, 2007, we had $89.7 million outstanding under our Term Loan, and
      $0
      outstanding under our Revolving Loan with $47.7 million available for borrowings
      under the Revolving Loan, after giving effect to $2.3 million of outstanding
      letters of credit. Principal payments on the Term Loan are payable in quarterly
      installments of $0.3 million commencing on September 28, 2007, with all
      remaining amounts due on the maturity date. 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. The borrowings and other obligations under the Credit Facility and
      the
      guarantees are collateralized by a first priority perfected lien, subject to
      certain permitted liens, on substantially all of the personal property assets
      and certain real property of the borrower and guarantors. We were in compliance
      with all debt covenants at September 29, 2007.





In
      connection with the Credit Facility, we paid fees of $1.1 million. For the
      three
      and nine-month periods ended September 29, 2007, amortization of financing
      costs
      included in interest expense was $0.1 million and $2.9 million, respectively,
      which includes the write-off of deferred financing costs of $2.4 million as
      a
      result of refinancing our Credit Facility.





On
      August
      7, 2007, the Board of Directors increased our stock repurchase program by an
      additional $12.6 million. As a result of this increase, we are currently
      authorized to repurchase up to $25.0 million of common stock. Through September
      29, 2007, we repurchased $7.0 million of common stock at an average price per
      share of $16.67, and subsequent to that date we repurchased an additional $3.3
      million of common stock leaving $14.7 million of common stock authorized to
      be
      repurchased. The stock repurchase program, which is open ended, will allow
      us to
      repurchase our shares on the open market, depending on market conditions and
      other corporate considerations, from available cash flow and borrowings under
      the Revolving Loan. All shares will be purchased at prevailing market prices.
      Prior to the new authorization on August 7, 2007, we had purchased a total
      of
      $7.6 million of our common stock under the stock repurchase
      program.





We
      believe that our existing cash balances and available borrowings under our
      Revolving Loan, along with our future cash flow from operations, will enable
      us
      to meet our liquidity needs and capital expenditure requirements for at least
      the next 12 months.





**Contractual
      Obligations, Commitments and Off-Balance Sheet
      Arrangements**




We
      have
      various contractual obligations which are recorded as liabilities in our
      consolidated financial statements. Other items, such as certain purchase
      commitments and other executory contracts are not recognized as liabilities
      in
      our consolidated financial statements. For example, we are contractually
      committed to make certain minimum lease payments for the use of property under
      operating lease agreements.





20


The
      following table summarizes our significant contractual obligations and
      commercial commitments at September 29, 2007 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 payments on outstanding borrowings.


**Balance
                  of****fiscal**
              
              **In
                  fiscal**
              
              **In
                  fiscal**
              
              **In
                  fiscal**
              
              **In
                  fiscal****(in
                  millions)**
              
              **2007**
              
              **2008**
              
              **2009**
              
              **2010**
              
              **2011**
              
              **Thereafter**
              
              **Total**Long-term
                  debt
              
              $
              0.3
              
              $
              1.1
              
              $
              1.1
              
              $
              1.1
              
              $
              1.1
              
              $
              85.0
              
              $
              89.7Interest
                  on long-term debt (1)
              
              
              1.4
              
              
              5.8
              
              
              5.6
              
              
              5.6
              
              
              5.5
              
              
              13.2
              
              
              37.1Obligations
                  under capital lease (2)
              
              
              -
              
              
              0.3
              
              
              0.3
              
              
              0.2
              
              
              0.1
              
              
              0.1
              
              
              1.0Operating
                  leases
              
              
              1.4
              
              
              6.5
              
              
              4.8
              
              
              3.8
              
              
              3.1
              
              
              11.1
              
              
              30.7Total
                  financial obligations
              
              
              3.1
              
              
              13.7
              
              
              11.8
              
              
              10.7
              
              
              9.8
              
              
              109.4
              
              
              158.5Purchase
                  obligations (3)
              
              
              34.7
              
              
              39.4
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              74.1Total
                  financial obligations and commitments
              
              $
              37.8
              
              $
              53.1
              
              $
              11.8
              
              $
              10.7
              
              $
              9.8
              
              $
              109.4
              
              $
              232.6




*(1)*
            *The
                interest rate assumed for the variable portion of long-term debt
                was the
                rate in effect at September 29,
                2007.*


*(2)*
            *Includes
                amounts classified as interest expense and
                SG&A.*


*(3)*
            *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 purchases. Amounts reflected in our condensed
                consolidated balance sheets in accounts payable or other current
                liabilities are excluded from the table
                above.*





In
      addition to the total contractual obligations and commitments included in the
      table above, we have postretirement benefit obligations included in other
      non-current liabilities.





Effective
      at the beginning of the first quarter of 2007, we adopted FIN No. 48 as
      described in Note 6 to the condensed consolidated financial statements. As
      of
      September 29, 2007 and December 31, 2006, our total liabilities for unrecognized
      tax benefits and related interest and penalties amounted to $6.9 million and
      $5.4 million, respectively. We do not believe that our adoption of FIN No.
      48
      had a material effect on the schedule of cash contractual obligations included
      in our most recent Annual Report on Form 10-K because we cannot make a
      reasonably reliable estimate of the amount and period of related future payments
      of our FIN No. 48 liabilities.




*Off-Balance
      Sheet Arrangements.* Our
      most
      significant off-balance sheet financing arrangements as of September 29, 2007
      are non-cancelable operating lease agreements, primarily for
      our
      company-operated outlet stores, our new company headquarters and our leased
      distribution centers located in 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.




21


**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 Conditions and Results of Operations included in
      our
      Annual Report on Form 10-K for the year ended December 30, 2006.





**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 nine-month periods ended September 29, 2007, $8.7 million and
      $23.9 million, respectively, of our total net sales were in currencies other
      than the U.S. dollar. During the three and nine-month periods ended September
      29, 2007, our net sales were favorably impacted by $0.5 million and $1.2
      million, respectively, due to foreign exchange rates. Total sourcing is largely
      concentrated in three foreign countries, China, Indonesia and Thailand. 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.* ** Interest
      rate risk is managed through a combination of variable and fixed rate debt
      composed of long-term instruments. Our objective is to maintain a cost-effective
      mix which we deem appropriate and we have entered into an interest rate swap
      agreement to maintain that balance. At September 29, 2007, our debt portfolio
      was composed of variable-rate debt of which we hedge approximately 50% to a
      fixed rate. As a result, 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 to us. During the past five
      years, we have not experienced any significant impact from commodity price
      fluctuations, nor do we currently use derivative instruments in the management
      of the risk of any such fluctuations. On a prospective basis, fluctuations
      in
      petroleum prices may also influence the prices of the related items such as
      chemicals, dyestuffs, man-made fibers and foam. Any raw material price increase,
      as well as any increase in transportation costs, would 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 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. We do not believe that inflation risk is material
      to
      our business or our consolidated financial position, results of operations
      or
      cash flows.





*Seasonality.* We
      have
      not experienced any significant seasonal fluctuations in our net sales or our
      profitability.





22


**Item
      4. Controls and Procedures**





*(a) Evaluation
      of Disclosure Controls and Procedures.*





Our
      management, with the participation of our Chief Executive Officer and Chief
      Financial Officer, has 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 September
      29, 2007 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) of the Exchange Act) during our fiscal
      quarter ending September 29, 2007 that has materially affected, or is reasonably
      likely to materially affect, our internal control over financial reporting.




23


**PART
      II - OTHER INFORMATION**





**Item
      1. Legal Proceedings**




We
      are
      not currently a party to any material legal proceedings. We are subject to
      various claims and legal actions arising from time to time in the ordinary
      course of business. While it is possible that our cash flows and results of
      operations in a particular quarter or year could be materially affected, it
      is
      our opinion that these matters will not have a material impact on our
      consolidated financial position or ongoing results of operations and cash flows.





**Item
      1A. Risk Factors**




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; our history of losses; 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
      substantial leverage could adversely affect our financial condition; 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; increases in the
      prices of raw materials; changing international trade regulation, including
      as
      it relates to the imposition or elimination of quotas on imports of textiles
      and
      apparel; foreign currency exposure; and the sufficiency of cash to fund
      operations and capital expenditures. This list is intended to identify only
      certain of the principal factors that could 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 13, 2007.




There
      are
      no material changes to the risk factors described in the Form 10-K, filed on
      March 13, 2007.




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





(a)
      None.


(b)
      None.


(c)
      Issuer purchases of equity securities:


**Total
                  number**
              
              **Maximum****of
                  shares**
              
              **dollar****Total**
              
              
              
              **repurchased**
              
              **value
                  of shares****number**
              
              **Average**
              
              **as
                  part of publicly**
              
              **that
                  may yet be****of
                  shares**
              
              **price
                  paid**
              
              **announced**
              
              **repurchased
                  under****Period**
              
              **repurchased**
              
              **per
                  share**
              
              **program****(1)**
              
              **the
                  program****(1)**August
                  5 - September 1, 2007
              
              
              324,700
              
              $
              16.75
              
              
              324,700
              
              $
              19,562,348September
                  2 - September 29, 2007
              
              
              95,900
              
              
              16.40
              
              
              95,900
              
              
              17,989,890Total
              
              
              420,600
              
              $
              16.67
              
              
              420,600





(1)
            In
                August 2007, the Board of Directors increased our stock repurchase
                program
                by an additional $12.6 million. As a result of this increase, we
                are
                currently authorized to repurchase up the $25.0 million of common
                stock.
                We are authorized to make repurchases from time to time in the open
                market
                as market conditions warrant and pursuant to other parameters set
                by our
                Board of Directors.





**Item
      3. Defaults Upon Senior Securities**




None.





**Item
      4. Submission of Matters to a Vote of Security Holders**




None




24


**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




25


**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.




MAIDENFORM
              BRANDS,
              INC.(Registrant)Date:
                November 7, 2007
            By:
            /s/ Dorvin
              D.
              LivelyName:
                Dorvin D. LivelyTitle:
                Executive Vice President and Chief Financial Officer(principal
                financial and accounting officer)




26


**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




27