Delta Apparel Reports Fourth Quarter and Full Year Fiscal 2019 Results
November 21 2019 - 4:05PM
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 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 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
StatementsThis 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.
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 |
|
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 |
|
|
|
|
|
|
|
|
|
|
|
|
Delta Apparel (AMEX:DLA)
Historical Stock Chart
From Aug 2024 to Sep 2024
Delta Apparel (AMEX:DLA)
Historical Stock Chart
From Sep 2023 to Sep 2024