Delta Apparel Reports First Quarter Fiscal 2019 Results
05 February 2019 - 8:05AM
Delta Apparel, Inc. (NYSE American: DLA), a leading provider of
core activewear and lifestyle apparel products, today announced
financial results for its fiscal year 2019 first quarter ended
December 29, 2018.
Robert W. Humphreys, the Company’s Chairman and
Chief Executive Officer, commented, “Our team delivered a strong
start to the new fiscal year and we are pleased with the
wide-ranging performance we saw across our business during the
first quarter, including double-digit sales growth in both our
Delta Group and Salt Life Group segments. The continuing
expansion of our digital print business, DTG2Go, which grew over
250% during the quarter, and double-digit sales growth in our Salt
Life lifestyle brand were key drivers in our results.”
Mr. Humphreys continued, “We believe we are
well-positioned for more growth as we look to further capitalize on
our industry-leading position in the digital print space, leverage
our vertical manufacturing platform and increase consumer awareness
of our Salt Life lifestyle brand through new product categories as
well as growth with national and regional retailers and our own
direct-to-consumer channels. This is an exciting time for
Delta Apparel and we are extremely optimistic about our prospects
going forward.”
For the first quarter ended December 29, 2018:
- Net sales were $101.7 million, up 12.5% from $90.3 million in
the prior year first quarter. Net sales in the Delta Group, which
is comprised of the Company’s DTG2Go digital print business, Delta
Activewear business and Soffe brand, increased 12.5%. Net sales in
the Salt Life Group, which is comprised of the Company’s Salt Life
and Coast lifestyle brands, increased 13.5%.
- Gross profit was $18.6 million, up 13% from $16.4 million in
the prior year first quarter. Gross margin improved 20 basis points
to 18.3% compared to 18.1% in the prior year period.
- Selling, general and administrative ("SG&A") expenses as a
percentage of overall sales was 16.5%, generally flat with the
prior year first quarter.
- Operating income was $117 thousand compared to $1.7 million in
the prior year first quarter, with the decrease attributable to a
discrete expense of $2.5 million taken during the quarter in
connection with the resolution of litigation stemming from The
Sports Authority's March 2016 bankruptcy. Excluding that
expense, operating income was $2.6 million, up 49% from $1.7
million in the prior year. Delta Group segment operating
income was impacted by the litigation expense and came in at $2.8
million, compared to $4.4 million in the prior year first
quarter. Excluding that expense, Delta Group operating income
improved $0.8 million, or 18.5%, over the prior year. Salt Life
Group segment operating income was $0.4 million, up 58% from $0.2
million in the prior year first quarter.
- The Company experienced a net loss for the quarter of $1.1
million, or $0.17 per diluted share, an improvement over the prior
year first quarter’s loss of $10 million, or $1.37 per diluted
share. Excluding the above-referenced $2.5 million litigation
expense, the Company achieved earnings per diluted share of $0.14,
a 75% increase over prior year earnings per share of $0.08 after
excluding a discrete provisional tax expense of $10.6 million
associated with United States tax reform legislation.
During the quarter, the Company spent $1.8
million on capital expenditures, $12 million on the acquisition of
SSI Digital Print Services, and $1.7 million to repurchase 92,000
shares of Company stock. Total debt, including capital lease
financing, at quarter-end was $134 million, up $22 million from the
end of the prior year first quarter due principally to the
Company’s recent digital print acquisitions. Total inventory at
quarter-end was $187.7 million compared with $174.5 million a year
ago due to more units on hand from the recent digital print
acquisitions as well as higher per unit cost inventory due to
inflationary cost increases.
Conference CallThe Company will
hold a conference call with senior management to discuss its
financial results today at 4:30 PM ET. The Company invites
you to join the call by dialing 866-575-6539. If calling from
outside the United States, please dial 323-794-2423. A live
webcast of the conference call will be available at
www.deltaapparelinc.com. Please visit the website at least 15
minutes early to register for the teleconference webcast and
download any necessary software. A replay of the call will be
available through March 4, 2019. To access the telephone
replay, participants should dial toll-free 844-512-2921.
International callers can dial 412-317-6671. The access code
for the replay is 7993355.
About Delta Apparel, Inc.
Delta Apparel, Inc., along with its operating
subsidiaries, Salt Life, LLC, M. J. Soffe,
LLC, and DTG2Go, LLC, is an international design,
marketing, manufacturing, and sourcing company that features a
diverse portfolio of core activewear and lifestyle apparel and
related accessory products. The Company specializes in
selling casual and athletic products through a variety of
distribution channels and distribution tiers, including department
stores, mid and mass channels, e-retailers, sporting goods and
outdoor retailers, independent and specialty stores, and the U.S.
military. The Company’s products are also made
available direct-to-consumer at its branded retail stores and on
its websites at www.saltlife.com, www.coastapparel.com,
www.soffe.com and www.deltaapparel.com. The Company’s
operations are located throughout the United
States, Honduras, El Salvador, and Mexico, and it
employs approximately 7,800 people worldwide. Additional
information about the Company is available
at www.deltaapparelinc.com.
Cautionary Note Regarding
Forward-Looking Statements
This press release may contain “forward-looking”
statements that involve risks and uncertainties. Any number
of factors could cause actual results to differ materially from
anticipated or forecasted results, including, but not limited to,
the volatility and uncertainty of cotton and other raw material
prices; the general U.S. and international economic conditions;
competitive conditions in the apparel industry; restrictions on our
ability to borrow capital or service our indebtedness;
deterioration in the financial condition of our customers and
suppliers and changes in the operations and strategies of our
customers and suppliers; changing consumer preferences or trends;
our ability to successfully open and operate new retail stores;
changes in economic, political or social stability at our offshore
locations; significant interruptions within our manufacturing or
distribution facilities or other operations; our ability to attract
and retain key management; significant changes in our effective tax
rate; interest rate fluctuations increasing our obligations under
our variable rate indebtedness; the ability to raise additional
capital; the ability to grow, achieve synergies and realize the
expected profitability of acquisitions; the volatility and
uncertainty of energy, fuel and other costs; material disruptions
in our information systems; compromises of our data security;
significant litigation in either domestic or international
jurisdictions; recalls, claims and negative publicity associated
with product liability issues; the ability to protect our
trademarks and other intellectual property; and the other factors
set forth in the "Risk Factors" contained in our most recent Annual
Report on Form 10-K filed with the Securities and
Exchange Commission. Except as may be required by
law, Delta Apparel, Inc. expressly disclaims any
obligation to update these forward-looking statements to reflect
events or circumstances after the date of this press release or to
reflect the occurrence of unanticipated events.
Company Contact: Deborah Merrill, 864-232-5200
x6620investor.relations@deltaapparel.com
Investor Relations and Media Contact: ICR, Inc.
Investors: Tom Filandro, 646-277-1235
Media: Jessica Liddell, 203-682-8208DLAPR@icrinc.com
SELECTED FINANCIAL DATA: |
|
|
|
|
|
|
(In thousands, except per share amounts) |
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
|
|
Dec 29, 2018 |
|
Dec 30, 2017 |
|
|
|
|
|
|
|
|
|
|
|
Net
Sales |
$ |
101,675 |
|
|
$ |
90,342 |
|
|
|
|
Cost of Goods Sold |
|
83,105 |
|
|
|
73,972 |
|
|
|
|
Gross Profit |
|
18,570 |
|
|
|
16,370 |
|
|
|
|
|
|
|
|
|
|
|
|
Selling, General and Administrative |
|
16,784 |
|
|
|
14,979 |
|
|
|
|
Other Expense (Income), Net |
|
1,745 |
|
|
|
(347 |
) |
|
|
|
Operating Income |
|
41 |
|
|
|
1,738 |
|
|
|
|
|
|
|
|
|
|
|
|
Interest Expense, Net |
|
1,765 |
|
|
|
1,334 |
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) Income Before Provision for Income
Taxes |
|
(1,724 |
) |
|
|
404 |
|
|
|
|
|
|
|
|
|
|
|
|
(Benefit From) Provision for Income Taxes |
|
(499 |
) |
|
|
10,356 |
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated Net Loss |
|
(1,225 |
) |
|
|
(9,952 |
) |
|
|
|
|
|
|
|
|
|
|
|
Net
Loss Attributable to Non-Controlling Interest |
|
(76 |
) |
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
Net Loss Attributable to Shareholders |
$ |
(1,149 |
) |
|
$ |
(9,952 |
) |
|
|
|
|
|
|
|
|
|
|
|
Weighted Average Shares
Outstanding |
|
|
|
|
|
|
|
Basic |
|
6,924 |
|
|
|
7,268 |
|
|
|
|
|
Diluted |
|
6,924 |
|
|
|
7,268 |
|
|
|
|
|
|
|
|
|
|
|
|
Net Loss per Common Share |
|
|
|
|
|
|
|
Basic |
$ |
(0.17 |
) |
|
$ |
(1.37 |
) |
|
|
|
|
Diluted |
$ |
(0.17 |
) |
|
$ |
(1.37 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dec 29, 2018 |
|
Sep 29, 2018 |
|
Dec 30, 2017 |
|
|
|
(Unaudited) |
|
(Audited) |
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
Current Assets |
|
|
|
|
|
|
|
Cash |
$ |
558 |
|
|
$ |
460 |
|
|
$ |
603 |
|
|
|
Receivables, Net |
|
56,857 |
|
|
|
46,879 |
|
|
|
51,010 |
|
|
|
Income Tax Receivable |
|
18 |
|
|
|
38 |
|
|
|
404 |
|
|
|
Inventories, Net |
|
187,653 |
|
|
|
174,983 |
|
|
|
174,505 |
|
|
|
Prepaids and Other Assets |
|
3,652 |
|
|
|
3,062 |
|
|
|
4,916 |
|
|
Total Current Assets |
|
248,738 |
|
|
|
225,422 |
|
|
|
231,438 |
|
|
|
|
|
|
|
|
|
|
Noncurrent Assets |
|
|
|
|
|
|
|
Property, Plant & Equipment, Net |
|
54,883 |
|
|
|
52,114 |
|
|
|
45,449 |
|
|
|
Goodwill and Other Intangibles, Net |
|
60,625 |
|
|
|
53,715 |
|
|
|
35,842 |
|
|
|
Deferred Income Taxes |
|
1,924 |
|
|
|
1,374 |
|
|
|
2,656 |
|
|
|
Investment in Joint Venture |
|
9,399 |
|
|
|
8,980 |
|
|
|
4,140 |
|
|
|
Other Noncurrent Assets |
|
1,760 |
|
|
|
2,004 |
|
|
|
2,137 |
|
|
Total Noncurrent Assets |
|
128,591 |
|
|
|
118,187 |
|
|
|
90,224 |
|
|
|
|
|
|
|
|
|
|
Total Assets |
$ |
377,329 |
|
|
$ |
343,609 |
|
|
$ |
321,662 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current Liabilities |
|
|
|
|
|
|
|
Accounts Payable and Accrued Expenses |
$ |
80,995 |
|
|
$ |
64,750 |
|
|
$ |
57,676 |
|
|
|
Current Portion of Contingent Consideration |
|
638 |
|
|
|
638 |
|
|
|
- |
|
|
|
Current Portion of Capital Lease Financing |
|
5,106 |
|
|
|
3,846 |
|
|
|
1,424 |
|
|
|
Current Portion of Long-Term Debt |
|
8,176 |
|
|
|
6,577 |
|
|
|
6,600 |
|
|
Total Current Liabilities |
|
94,915 |
|
|
|
75,811 |
|
|
|
65,700 |
|
|
|
|
|
|
|
|
|
|
Noncurrent Liabilities |
|
|
|
|
|
|
|
Long-Term Taxes Payable |
|
3,862 |
|
|
|
4,259 |
|
|
|
8,058 |
|
|
|
Long-Term Contingent Consideration |
|
9,644 |
|
|
|
9,904 |
|
|
|
1,300 |
|
|
|
Long-Term Capital Lease Financing |
|
11,512 |
|
|
|
9,302 |
|
|
|
4,734 |
|
|
|
Long-Term Debt |
|
109,322 |
|
|
|
92,083 |
|
|
|
99,360 |
|
|
|
Deferred Income Taxes |
|
2,404 |
|
|
|
2,132 |
|
|
|
- |
|
|
|
Other Noncurrent Liabilities |
|
315 |
|
|
|
- |
|
|
|
- |
|
|
Total Noncurrent Liabilities |
|
137,059 |
|
|
|
117,680 |
|
|
|
113,452 |
|
|
|
|
|
|
|
|
|
|
|
Common Stock |
|
96 |
|
|
|
96 |
|
|
|
96 |
|
|
|
Additional Paid-In Capital |
|
58,663 |
|
|
|
61,979 |
|
|
|
59,856 |
|
|
|
Equity Attributable to Non-Controlling
Interest |
|
17 |
|
|
|
93 |
|
|
|
- |
|
|
|
Retained Earnings |
|
127,539 |
|
|
|
128,695 |
|
|
|
117,401 |
|
|
|
Accumulated Other Comprehensive (Loss) Income |
|
(236 |
) |
|
|
136 |
|
|
|
51 |
|
|
|
Treasury Stock |
|
(40,724 |
) |
|
|
(40,881 |
) |
|
|
(34,894 |
) |
|
Equity Attributable to Delta Apparel,
Inc. |
|
145,355 |
|
|
|
150,118 |
|
|
|
142,510 |
|
|
|
|
|
|
|
|
|
|
Total Liabilities and Equity |
$ |
377,329 |
|
|
$ |
343,609 |
|
|
$ |
321,662 |
|
|
|
|
|
|
|
|
|
|
Delta Apparel (AMEX:DLA)
Historical Stock Chart
From Apr 2024 to May 2024
Delta Apparel (AMEX:DLA)
Historical Stock Chart
From May 2023 to May 2024