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Delta Apparel, Inc (DLA) SEC Filing 10-Q Quarterly Report for the period ending Saturday, April 3, 2021

Delta Apparel, Inc

CIK: 1101396 Ticker: DLA

Exhibit 99.1

 

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Delta Apparel Fiscal 2021 Second Quarter Results Surpass Expectations

 

Net earnings for the quarter grow over 200% to $0.62 per diluted share

 

GREENVILLE, S.C., May 6, 2021 -- Delta Apparel, Inc. (NYSE American: DLA), a leading provider of core activewear and lifestyle apparel products, today announced stronger than expected financial results for its second quarter ended April 3, 2021.

 

Robert W. Humphreys, the Company’s Chairman and Chief Executive Officer, commented, “In every aspect, our March quarter results showcase the positive trajectory of the Company. With double-digit sales growth and significant profitability expansion in both business segments, we have proven the benefits of our broad customer base and diversified channels of distribution. We believe the momentum is just beginning, and we are excited by the many opportunities we see for continued growth. Consumers are demonstrating their deep emotional connection to the Salt Life brand, resulting in strong growth in all channels of distribution.”

 

Humphreys continued, “Our innovative technology in the on-demand, digital print market is transforming the retail and ecommerce supply chain for decorated apparel.  Through our new, exclusive partnership with Autoscale.ai, DTG2Go will provide automated solutions for design creation, art and licensing management, and marketing spend, along with seamless connectivity with various online marketplaces, further solidifying our leadership position in this market segment.  Supported by our vertically-integrated, flexible manufacturing platform, broad distribution and fulfillment network, and strong business systems with unique proprietary technology, we believe we are well-positioned to continue to deliver compelling top and bottom line results for our shareholders.”

 

For the second quarter ended March 2021:

 

 

Net sales were $108.6 million, an increase of 12% from $96.7 million in the prior year second quarter. Net sales in the Delta Group segment grew 12% driven by the demand in the market for activewear apparel, particularly in our direct-to-retail and brand-direct channels, which grew over 40% compared to prior year. Net sales in the Salt Life Group segment increased 16% with notable performance in our direct-to-consumer channels, with sales growth of over 175% and 40% at our branded retail stores and saltlife.com site, respectively.

 

 

Gross profit was $24.8 million, a 21% increase from $20.6 million in the prior year second quarter. Gross margin improved 150 basis points to 22.8% versus 21.3% in the prior year and 21.4% in the December 2020 quarter driven by favorable product mix, selling price increases, and manufacturing efficiencies and process improvements.

 

 

Selling, general and administrative ("SG&A") expenses were $17.1 million, or 15.7% of sales, in the March 2021 quarter compared to $17.9 million, or 18.5% of sales, in the prior year second quarter. The improved results are from spending and cost controls, as well as integration efficiencies in the Delta Group segment, which more than offset the additional costs incurred in the consolidation of Soffe products into our new Phoenix distribution facility.

 

 

Operating income in the March 2021 quarter was $7.6 million, which was more than double the prior year second quarter income of $3.6 million. The expanded operating profit was driven by the sales growth, favorable gross margins, continuing cost controls, and $1.9 million of plant curtailment costs in the prior year.

 

 

Net earnings for the quarter were $4.4 million, or $0.62 per diluted share, compared to $1.3 million, or $0.19 per diluted share, in the prior year period. Excluding the $1.9 million pre-tax, or $0.20 per diluted share, of plant curtailment expenses in the prior year quarter, adjusted net earnings per diluted share for the second quarter fiscal 2020 were $0.39.

 

Total inventory as of March 2021 was $148.5 million, down $49 million, or approximately 25% from a year ago. The strong sales in the first six months, along with the temporary hurricane disruptions during the December 2020 quarter, slowed the normal seasonal build of inventory during the quarter. The Company has increased production during the March 2021 quarter and is now producing at all-time record levels to support demand in the marketplace for its products.

Total net debt, including capital lease financing and cash on hand, increased $5 million from December 2020 to $135.2 million as of March 2021, representing a $23 million decrease from net debt levels a year ago. Cash on hand and availability under the Company’s U.S. revolving credit facility totaled $44.2 million as of March 2021, a $0.5 million increase from December 2020 and a $14 million, or approximately 50% increase, from March 2020.

 

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 800-430-8332. If calling from outside the United States, please dial 323-289-6581. 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 June 6, 2021. 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 3070922.

 

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 on-demand, digital print and fulfillment industry, bringing DTG2Go’s proprietary 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 digital platform. The Company’s products are also made available direct-to-consumer on its ecommerce sites 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 7,900 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 general U.S. and international economic conditions; the COVID-19 pandemic impact on our operations, financial condition, liquidity, and capital investments; significant interruptions within our manufacturing or distribution facilities or other operations; deterioration in the financial condition of our customers and suppliers and changes in the operations and strategies of our customers and suppliers; the volatility and uncertainty of cotton and other raw material prices and availability; competitive conditions in the apparel industry; restrictions on our ability to borrow capital or service our indebtedness; 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; 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.

 

 

Company Contact:

 

Deborah Merrill, 864-232-5200 x6620
investor.relations@deltaapparel.com

 

Investor Relations and Media Contact:
ICR, Inc.

 

Investors:
Tom Filandro, 646-277-1235

 

Media:
Jessica Liddell, 203-682-8208
DLAPR@icrinc.com

 

 

The following information was filed by Delta Apparel, Inc (DLA) on Thursday, May 6, 2021 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-Q Quarterly 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-Q Quarterly Report:

Financial Statements, Disclosures and Schedules

Inside this 10-Q Quarterly Report

Document And Entity Information
Condensed Consolidated Balance Sheets (Current Period Unaudited)
Condensed Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals)
Condensed Consolidated Statements Of Cash Flows (Unaudited)
Condensed Consolidated Statements Of Comprehensive Income (Unaudited)
Condensed Consolidated Statements Of Operations (Unaudited)
Condensed Consolidated Statements Of Shareholders' Equity (Unaudited)
Note A - Description Of Business And Basis Of Presentation
Note A - Description Of Business And Basis Of Presentation (Details Textual)
Note B - Accounting Policies
Note C - New Accounting Standards
Note D - Revenue Recognition
Note D - Revenue Recognition (Tables)
Note D - Revenue Recognition - Disaggregation Of Revenue (Details)
Note E - Inventories
Note E - Inventories (Details Textual)
Note E - Inventories (Tables)
Note E - Inventories - Inventories (Details)
Note F - Debt
Note F - Debt (Details Textual)
Note F - Debt (Tables)
Note F - Debt - Long-Term Debt (Details)
Note F - Debt - Long-Term Debt (Details) (Parentheticals)
Note G - Selling, General And Administrative Expense
Note G - Selling, General And Administrative Expense (Details Textual)
Note H - Stock-Based Compensation
Note H - Stock-Based Compensation (Details Textual)
Note I - Purchase Contracts
Note I - Purchase Contracts (Tables)
Note I - Purchase Contracts - Minimum Payments Under Contracts (Details)
Note J - Business Segments
Note J - Business Segments (Details Textual)
Note J - Business Segments (Tables)
Note J - Business Segments - Schedule Of Segment Information (Details)
Note J - Business Segments - Segment Operating Income To The Consolidated Income Before Provision For Income Taxes (Details)
Note K - Income Taxes
Note K - Income Taxes (Details Textual)
Note L - Derivatives And Fair Value Measurements
Note L - Derivatives And Fair Value Measurements (Details Textual)
Note L - Derivatives And Fair Value Measurements (Tables)
Note L - Derivatives And Fair Value Measurements - Fair Value Of Derivative Instruments (Details)
Note L - Derivatives And Fair Value Measurements - Financial Assets (Liabilities) Measured At Fair Value (Details)
Note L - Derivatives And Fair Value Measurements - Outstanding Instruments (Details)
Note M - Legal Proceedings
Note N - Repurchase Of Common Stock
Note N - Repurchase Of Common Stock (Details Textual)
Note O - Goodwill And Intangible Assets
Note O - Goodwill And Intangible Assets (Details Textual)
Note O - Goodwill And Intangible Assets (Tables)
Note O - Goodwill And Intangible Assets - Goodwill And Components Of Intangible Assets (Details)
Note P - Subsequent Events
Significant Accounting Policies (Policies)

Material Contracts, Statements, Certifications & more

Delta Apparel, Inc provided additional information to their SEC Filing as exhibits

Ticker: DLA
CIK: 1101396
Form Type: 10-Q Quarterly Report
Accession Number: 0001437749-21-011152
Submitted to the SEC: Thu May 06 2021 4:19:24 PM EST
Accepted by the SEC: Thu May 06 2021
Period: Saturday, April 3, 2021
Industry: Wholesale Apparel Piece Goods And Notions

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