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Delta Apparel, Inc (DLA) SEC Filing 10-K Annual report for the fiscal year ending Saturday, September 28, 2019

Delta Apparel, Inc

CIK: 1101396 Ticker: DLA

Exhibit 99.1

 

 

Company Contact:

Deborah Merrill

 

 

(864)232-5200 x 6620

 

investor.relations@deltaapparel.com

 

 

Investor Relations and Media Contact: ICR, Inc.

Tom Filandro/Caitlin Morahan

 

(203)682-8200

Investors:

Tom.Filandro@icrinc.com Caitlin.Morahan@icrinc.com

Media:

Jessica Liddell

 

(203)682-8208

 

DLAPR@irinc.com

 

Delta Apparel Reports Fourth Quarter and Full Year Fiscal 2019 Results

Overall sales up 16% for quarter, including double-digit growth across all segments

 

GREENVILLE, S.C., November 21, 2019 -- Delta Apparel, Inc. (NYSE American: DLA), a leading provider of core activewear and lifestyle apparel products, today announced financial results for its fiscal 2019 fourth quarter and full year ended September 28, 2019.

 

Robert W. Humphreys, the Company’s Chairman and Chief Executive Officer, commented, “We are thrilled with our overall performance for the fourth quarter and full year.  Both our Delta Group and Salt Life Group segments achieved double-digit sales growth for the quarter and drove results exceeding our expectations.  We were also able to expand gross margins in the back half of the year, maintain our cost discipline, and finish the year with increasing profitability.”

 

Mr. Humphreys continued, “As we look ahead to fiscal 2020, we are excited to see positive momentum across our business segments. In our Delta Group, we continue to diversify our customer base across multiple channels of distribution, and our Activewear business’s entry into the full-service distributor channel in 2020 should only enhance our versatility.  Our DTG2Go business turned in another extremely strong year, more than doubling its revenue, and we continue to be in a prime position to capitalize on what we see as the still largely untapped growth potential of digital printing. Our Salt Life lifestyle brand also enters the new year with good things happening in a variety of areas, and we remain very focused on expanding the brand’s direct-to-consumer strategies and partnerships with national and regional retailers.” 

 

For the fourth quarter ended September 28, 2019:

 

Net sales were $108.0 million, up 16.2% from $92.9 million in the prior year fourth quarter. Net sales in the Delta Group segment increased 16.6% over the prior year period, and net sales in the Salt Life Group segment increased 12.5% from the prior year period.

 

Gross profit was $22.9 million, an increase of 19.5% compared to $19.2 million in the prior year fourth quarter. Gross margin was 21.2% compared to 20.6% in the prior year fourth quarter driven by year-over-year improvement in both the Delta Group and Salt Life Group segments.

 

Selling, general and administrative ("SG&A") expenses as a percentage of sales improved 150 basis points to 17.1%, compared to 18.6% in the prior year fourth quarter.

 

Operating income for the quarter was $4.8 million compared to $3.5 million in the prior year fourth quarter, with the increase driven primarily by an increase of $1.6 million in the Delta Group segment.

 

Net income for the quarter was $3.5 million, or $0.50 per diluted share, compared to $3.1 million, or $0.43 per diluted share, in the prior year period.

 

For the full year ended September 28, 2019:

 

Net sales were $431.7 million, up 9.2% from $395.5 million last year. Net sales in the Delta Group segment increased 9.3% over the prior year and net sales in the Salt Life Group segment increased 8.1% over the prior year.

 

Gross profit was $85.2 million, up 3.8% from $82.0 million last year. Gross margin was 19.7% compared to 20.7% in the prior year period, but as expected, gross margins expanded sequentially each quarter through the year.

 

SG&A expenses as a percentage of sales improved 60 basis points to 16.3%, compared to 16.9% in the prior year period.

 

 

Operating income was $15.9 million compared to $17.4 million last year, with the majority of the decrease attributable to a discrete expense of $2.5 million taken during the first quarter of 2019 in connection with the resolution of litigation surrounding a 2016 customer bankruptcy. Delta Group segment operating income, which was impacted by the above-referenced litigation expense, declined $2.3 million over the prior year, while Salt Life Group segment operating income increased $1.4 million compared to the prior year due in part to the favorable settlement of a commercial litigation matter in the third quarter.

 

Net income was $8.2 million, or $1.17 per diluted share, compared to prior year net income of $1.3 million, or $0.18 per diluted share. Adjusting for the $0.31 per diluted share expense impact of the above-referenced bankruptcy litigation matter and the benefit of $0.10 per diluted share arising from the above-referenced commercial litigation settlement, net income was $1.38 per diluted share. In fiscal year 2018, after adjusting for the $1.44 per diluted share expense due to tax reform legislation, our net income was $1.62 per diluted share.

 

During the year, the Company spent approximately $16.2 million on capital expenditures and $2.7 million to repurchase 141,501 shares of its stock. Total debt, including capital lease financing, as of the end of fiscal year 2019 was $135.1 million, up about 20% from the end of the prior year due principally to the Company’s recent digital print acquisitions and distribution expansions. Total inventory at the end of fiscal year 2019 was $179.1 million compared with $175.0 million a year ago due primarily to recent product expansions in both the Delta Group and Salt Life Group segments.

 

Conference Call

The 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 800-458-4121. If calling from outside the United States, please dial 323-794-2093. 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 December 21, 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 6600025.

 

About Delta Apparel, Inc.

Delta Apparel, Inc., along with its operating subsidiaries, DTG2Go, LLC, Salt Life, LLC, and M.J. Soffe, LLC, is a vertically-integrated, international apparel company that designs, manufactures, sources, and markets a diverse portfolio of core activewear and lifestyle apparel products under the primary brands of Salt Life®, COAST®, Soffe®, and Delta. The Company is a market leader in the direct-to-garment digital print and fulfillment industry, bringing DTG2Go technology and innovation to the supply chain of its customers. The Company specializes in selling casual and athletic products through a variety of distribution channels and tiers, including outdoor and sporting goods retailers, independent and specialty stores, better department stores and mid-tier retailers, mass merchants and e-retailers, the U.S. military, and through its business-to-business e-commerce sites. 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 as well as through its branded retail stores. The Company’s operations are located throughout the United States, Honduras, El Salvador, and Mexico, and it employs approximately 8,500 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 and availability; 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 and as updated in our subsequently filed Quarterly Reports on Form 10-Q. 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.

 

See Financials

 

 

SELECTED FINANCIAL DATA:

                               

(In thousands, except per share amounts)

                               
   

Three Months Ended

   

Twelve Months Ended

 
   

Sep 28, 2019

   

Sep 29, 2018

   

Sep 28, 2019

   

Sep 29, 2018

 
                                 

Net Sales

  $ 107,957     $ 92,922     $ 431,730     $ 395,450  

Cost of Goods Sold

    85,073       73,769       346,578       313,429  

Gross Profit

    22,884       19,153       85,152       82,021  
                                 

Selling, General and Administrative

    18,449       17,317       70,220       66,969  

Other Income, Net

    (389 )     (1,622 )     (963 )     (2,351 )

Operating Income

    4,824       3,458       15,895       17,403  
                                 

Interest Expense, Net

    1,811       1,507       7,550       5,713  
                                 

Income Before (Benefit From) Provision for Income Taxes

    3,013       1,951       8,345       11,690  
                                 

(Benefit From) Provision for Income Taxes

    (419 )     (1,124 )     477       10,460  
                                 

Consolidated Net Earnings

    3,432       3,075       7,868       1,230  
                                 

Net Loss Attributable to Non-Controlling Interest

    (91 )     (32 )     (374 )     (107 )
                                 

Net Earnings Attributable to Shareholders

  $ 3,523     $ 3,107     $ 8,242     $ 1,337  
                                 

Weighted Average Shares Outstanding

                               

Basic

    6,921       7,018       6,929       7,149  

Diluted

    7,089       7,304       7,064       7,425  
                                 

Net Income per Common Share

                               

Basic

  $ 0.51     $ 0.44     $ 1.19     $ 0.19  

Diluted

  $ 0.50     $ 0.43     $ 1.17     $ 0.18  

 

 

   

Sep 28, 2019

   

Sep 29, 2018

 
                 

Current Assets

               

Cash

  $ 605     $ 460  

Receivables, Net

    60,887       46,879  

Inventories, Net

    179,107       174,983  

Prepaids and Other Assets

    2,999       3,100  

Total Current Assets

    243,598       225,422  
                 

Noncurrent Assets

               

Property, Plant & Equipment, Net

    61,404       52,114  

Goodwill and Other Intangibles, Net

    59,504       53,715  

Deferred Income Taxes

    1,514       1,374  

Investment in Joint Venture

    10,388       8,980  

Other Noncurrent Assets

    1,580       2,004  

Total Noncurrent Assets

    134,390       118,187  
                 

Total Assets

  $ 377,988     $ 343,609  
                 
                 

Current Liabilities

               

Accounts Payable and Accrued Expenses

  $ 73,111     $ 64,750  

Current Portion of Contingent Consideration

    2,790       638  

Current Portion of Capital Lease Financing

    6,434       3,846  

Current Portion of Long-Term Debt

    6,540       6,577  

Total Current Liabilities

    88,875       75,811  
                 

Noncurrent Liabilities

               

Long-Term Taxes Payable

    3,977       4,259  

Long-Term Contingent Consideration

    6,304       9,904  

Long-Term Capital Lease Financing

    12,836       9,302  

Long-Term Debt

    109,296       92,083  

Deferred Income Taxes

    1,519       2,132  

Other Noncurrent Liabilities

    1,293       -  

Total Noncurrent Liabilities

    135,225       117,680  
                 

Common Stock

    96       96  

Additional Paid-In Capital

    59,855       61,979  

Equity Attributable to Non-Controlling Interest

    (281 )     93  

Retained Earnings

    136,937       128,695  

Accumulated Other Comprehensive (Loss) Income

    (969 )     136  

Treasury Stock

    (41,750 )     (40,881 )

Equity Attributable to Delta Apparel, Inc.

    153,888       150,118  
                 

Total Liabilities and Equity

  $ 377,988     $ 343,609  

 


The following information was filed by Delta Apparel, Inc (DLA) on Thursday, November 21, 2019 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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Inside Delta Apparel, Inc's 10-K Annual Report:

Financial Statements, Disclosures and Schedules

Inside this 10-K Annual Report

Document And Entity Information
Consolidated Balance Sheets
Consolidated Balance Sheets (Parentheticals)
Consolidated Statements Of Cash Flows
Consolidated Statements Of Comprehensive Income
Consolidated Statements Of Operations
Consolidated Statements Of Shareholders' Equity
Note 1 - The Company
Note 1 - The Company (Details Textual)
Note 10 - Leases
Note 10 - Leases (Details Textual)
Note 10 - Leases (Tables)
Note 10 - Leases - Future Minimum Lease Payments Under Non-Cancelable Leases (Details)
Note 11 - Employee Benefit Plans
Note 11 - Employee Benefit Plans (Details Textual)
Note 11 - Employee Benefit Plans (Tables)
Note 11 - Employee Benefit Plans - Benefit Obligation (Details)
Note 12 - Stock-Based Compensation
Note 12 - Stock-Based Compensation (Details Textual)
Note 12 - Stock-Based Compensation (Tables)
Note 12 - Stock-Based Compensation - Summary Of Restricted Stock Unit And Performance Unit Award Activity (Details)
Note 12 - Stock-Based Compensation - Unvested Restricted Stock Units And Performance Units (Details)
Note 13 - Business Segments
Note 13 - Business Segments (Details Textual)
Note 13 - Business Segments (Tables)
Note 13 - Business Segments - Long-Lived Assets By Geographical Area (Details)
Note 13 - Business Segments - Revenues By Geographic Areas (Details)
Note 13 - Business Segments - Schedule Of Segment Information (Details)
Note 13 - Business Segments - Segment Operating Income To The Consolidated Income Before Provision For Income Taxes (Details)
Note 14 - Repurchase Of Common Stock
Note 14 - Repurchase Of Common Stock (Details Textual)
Note 15 - Commitments And Contingencies
Note 15 - Commitments And Contingencies (Details Textual)
Note 15 - Commitments And Contingencies (Tables)
Note 15 - Commitments And Contingencies - Fair Value Of Derivative Instruments (Details)
Note 15 - Commitments And Contingencies - Financial Assets (Liabilities) Measured At Fair Value (Details)
Note 15 - Commitments And Contingencies - Minimum Payments Under Contracts (Details)
Note 15 - Commitments And Contingencies - Outstanding Instruments (Details)
Note 16 - Subsequent Events
Note 16 - Subsequent Events (Details Textual)
Note 2 - Significant Accounting Policies
Note 2 - Significant Accounting Policies (Details Textual)
Note 2 - Significant Accounting Policies (Tables)
Note 2 - Significant Accounting Policies - Adoption Of New Accounting Standard (Details)
Note 2 - Significant Accounting Policies - Disaggregation Of Revenue (Details)
Note 2 - Significant Accounting Policies - Interest Rate Swap Agreements (Details)
Note 3 - Acquisitions
Note 3 - Acquisitions (Tables)
Note 3 - Acquisitions - Purchase Price (Details)
Note 3 - Acquisitions - Purchase Price Allocation (Details)
Note 4 - Inventories
Note 4 - Inventories (Details Textual)
Note 4 - Inventories (Tables)
Note 4 - Inventories - Inventories (Details)
Note 5 - Property, Plant And Equipment
Note 5 - Property, Plant And Equipment (Details Textual)
Note 5 - Property, Plant And Equipment (Tables)
Note 5 - Property, Plant And Equipment - Property, Plant And Equipment (Details)
Note 6 - Goodwill And Intangible Assets
Note 6 - Goodwill And Intangible Assets (Details Textual)
Note 6 - Goodwill And Intangible Assets (Tables)
Note 6 - Goodwill And Intangible Assets - Goodwill And Components Of Intangible Assets (Details)
Note 7 - Accrued Expenses
Note 7 - Accrued Expenses (Tables)
Note 7 - Accrued Expenses - Accrued Expenses (Details)
Note 8 - Long-Term Debt
Note 8 - Long-Term Debt (Details Textual)
Note 8 - Long-Term Debt (Tables)
Note 8 - Long-Term Debt - Aggregate Maturities Of Debt (Details)
Note 8 - Long-Term Debt - Long-Term Debt (Details)
Note 8 - Long-Term Debt - Long-Term Debt (Details) (Parentheticals)
Note 9 - Income Taxes
Note 9 - Income Taxes (Details Textual)
Note 9 - Income Taxes (Tables)
Note 9 - Income Taxes - Deferred Tax Assets And Liabilities (Details)
Note 9 - Income Taxes - Income Before Provision For Income Taxes (Details)
Note 9 - Income Taxes - Provision For Income Taxes (Details)
Note 9 - Income Taxes - Reconciliation Of Provision For Income Taxes (Details)
Note 9 - Income Taxes - Reconciliation Of Provision For Income Taxes (Details) (Parentheticals)
Significant Accounting Policies (Policies)
Ticker: DLA
CIK: 1101396
Form Type: 10-K Annual Report
Accession Number: 0001437749-19-023361
Submitted to the SEC: Thu Nov 21 2019 11:35:18 AM EST
Accepted by the SEC: Thu Nov 21 2019
Period: Saturday, September 28, 2019
Industry: Wholesale Apparel Piece Goods And Notions

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