Delta Apparel, Inc. (NYSE American: DLA), a leading provider of
core activewear and lifestyle apparel, today announced preliminary
results for its 2020 fiscal first quarter ended December 28, 2019.
The Company expects overall net sales for the
first quarter of its 2020 fiscal year to be approximately $95
million compared to $101.7 million in the prior year period. The
Delta Group and Salt Life Group businesses were impacted by the
shorter holiday calendar combined with an earlier shipping cut-off
for in-hands holiday receipts. The Salt Life direct-to-consumer
channels saw strength both online and in its branded retail
stores.
Despite the decline in overall sales, the
Company expects to deliver strong gross margin performance as the
business benefitted from improved process efficiencies while
further leveraging its integrated vertical manufacturing platform.
The improved gross margin performance is expected to offset the
impact of the decline in sales, resulting in operating income and
positive earnings per share in the fiscal 2020 first quarter.
Robert W. Humphreys, Delta Apparel, Inc.’s
Chairman and Chief Executive Officer, stated, “Although the
shortened holiday calendar hurt our first quarter results, we
remain confident in the underlying strength of our business model.
Within our Delta Group, we saw significant growth with FunTees, as
our expanded customer base and broader product capabilities drove
strong results. Our expansion of manufacturing capacity is ahead of
schedule to support anticipated growth in our Activewear business,
including additional FunTees volume, in upcoming quarters. Within
our digital print business, DTG2Go, we have also made great strides
in migrating customers to use Delta catalog blanks, which further
increases the efficiencies within our three Activewear-integrated
facilities. We are excited about the pipeline of new accounts and
additional non-holiday sales volume that we anticipate bringing on
board with DTG2Go in the upcoming quarters. Within our Salt Life
business, we see good momentum in the placement of Salt Life
products in retail, with positive results from test doors with new
national and regional retailers, and existing accounts expanding
into additional product categories.”
Mr. Humphreys concluded, “Given the strength in
our underlying business, we believe we are well positioned to
deliver against our goals for the full year including double-digit
topline growth in our DTG2Go and Salt Life businesses and
mid-single digit growth collectively in our other business units,
along with overall improving profitability.”
As previously announced, the Company is
scheduled to present today at 10:00 a.m. eastern time at the ICR
Conference in Orlando, Florida. The presentation will be webcast
live on Delta Apparel's website at www.deltaapparelinc.com. An
archived replay will be available shortly after the conclusion of
the event. Real Player or Windows Media Player is required to
listen to the webcast.
First Quarter Fiscal 2020 Conference
Call
Final and complete financial results for the
fiscal year 2020 first quarter ended December 28, 2019, will be
released after the market close on February 3, 2020. At 4:30
p.m. ET on that day, the Company will also hold a conference call
with senior management to discuss its financial results and
business outlook. The Company invites you to join the call by
dialing 888-394-8218. If calling from outside the United States,
please dial 323-794-2588. 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 3, 2020. 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 6108016.
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 8,600 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.
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
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