DULUTH Ga – Delta Apparel, Inc. (NYSE American: DLA), a leader in lifestyle and activewear products, and direct-to garment digital printing, today announced financial results from its fiscal fourth quarter and year 2022. October 1, 2022.
Robert W. HumphreysThe Chairman and Chief Executive Officer of the Company, stated that results for the second consecutive year have shown strong organic growth. Combining our diverse go-to market strategies with our vertically-integrated manufacturing and service platforms helped us navigate a dynamic economic and business environment. Delta Direct is the fifth of our market channels. Global BrandsRetail Direct DTG2GoSalt Life and, both delivered year-over–year sales growth in fiscal 2022.
In our Delta Group segment. We saw steady growth in our regional print and ad specialties businesses, as well as increasing interest in our supply chain solutions. Global Brands Retail Direct channels. Our DTG2Go The print-on-demand business is growing strongly with strong double-digit sales growth over the year. Our digital first strategy order flow exceeds our current capacity. We are determined to increase output in order to meet the demand in this crucial growth area.
Salt Life’s segment had another record year in terms of operating and sales results. Overall sales surpassed the previous year by 21%. Salt Life’s ability to connect consumers through its various marketing touchpoints resulted in organic growth in all three Salt Life markets – wholesale and retail – during the fourth quarter. The year ended with 21 Salt Life-branded retail doors available for business in the United States. U.S. Coastline from Southern California To Key West To the east, continue on to the eastern seaboard Rehoboth Beach Delaware.
Our near-shore, vertical manufacturing platform allowed us to respond quickly to market fluctuations and adjust production levels to manage inventory costs and reduce input costs. We plan to keep some of our facilities operating at less than their full capacity during the first half fiscal 2023, until inventory levels are better aligned with overall demand.
Mr. Humphreys “I am still incredibly proud of my associates, as they continue responding to the ever-changing demands of our business,” concluded I. We enter our new fiscal year with a highly resilient, diversified business model that is ready to take on the challenges and capitalize on them.
The fourth quarter was concluded October 1, 2022:
Net sales reached $2.5 billion $115.5 millionA slight increase in net sales compared to the prior year period $114.7 million. The net sales Salt Life Group Segment sales in the segment rose 15.6% compared to the prior-year period. Net sales in the segment were up 15.6%. Delta Group Segment fell 1.1%
Gross profit was $21.6 millionComparable to $26.5 million Gross margins declined by 440 basis points to 18.7% in the previous year. Gross margin improvement Salt Life Group Gross margin declines in the segment were offset by segments Delta Group Segment driven by higher input cost in Activewear DTG2Go Businesses and unabsorbed fixed manufacturing cost. We began reducing the production of basic Tees in September quarter. $1.1 Million Unabsorbed fixed costs
Selling, general and administrative (‘SG&A’) expenses were $19.8 MillionCompared to $17.7 millions The prior year period. SG&A expenses as a percentage of sales increased 170 basis points to 17.2%, compared to 15.5% in the prior year period. The increase was primarily due to higher labor costs and selling costs related to the Salt Life retail store expansion.
Operating income was $2.2 millionA decrease of 78.0% over the previous year period. This led to a net loss in the amount of $0.3 MillionYou can also call it: $0.04 Comparable to net income, per diluted share $6.9 MioYou can also call it: $0.96 In the preceding year, per diluted share.
The complete year ended October 1, 2022:
Net sales rose 11.0% $484.9 Million Starting at $436.8 millions The previous year. In the previous year, net sales Delta Group Salt Life Group Segments saw an increase of 9.8% and 20.8% over the previous year.
Gross profit increased 6.8% $108.8 million Starting at $101.9 Million The previous year. Gross margins fell by 90 basis points to 22.4% in the previous year due to a decrease in the Delta Group Segment partially offset by improvements in the Salt Life Group segment.
Selling, general and administrative (‘SG&A’) expenses were $79.5 MillionCompared to $70.7 Million In the preceding year, this was due to higher distribution labor and selling costs related to Salt Life’s expansion. SG&A expenses as a percentage of sales were relatively flat at 16.4%, compared to 16.2% in the prior year.
Operating income was $31.8 millionThis results in an operating margin at 6.6%, which is lower than the operating income. $32.7 Million Operating margin of 7.5% in previous year
Net income was $19.7 MillionYou can also call it: $2.80 Per diluted share, as compared to net Income $20.3 millionYou can also call it: $2.86 per diluted share for the preceding year
At year-end, total net inventory was $248.5 MillionComparable to $161.7 million A year ago. Year-over-year inventory growth is due to higher input costs that impact materials, transportation, and labor as well an increase in units.
At year-end, total net debt (capital lease financing, cash on hand) was $170.6 MillionCompared to $121.7 million A year ago.
Conference Call
To discuss the Company’s financial results, senior management will be joining the company for a conference call today 4:30 p.m. ET. The Company invites all to join the call at 877-704-453 Call from an outside number The United StatesTo reach us, dial 201-389-920. A live webcast of the conference call will be available at www.deltaapparelinc.com. Register for the teleconference webcast by visiting the website at least fifteen minutes before the call to download the software and register. You can replay the call through December 17, 2022. To access the replay telephone callers should dial toll free 844-512-2911. International callers should dial 412-317-6671. The replay access code is 13733708.
About Delta Apparel, Inc.
Delta Apparel, Inc.Together with its operating subsidiaries, DTG2Go, LLC, Salt Life, LLCAnd 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, Soffe, and Delta. The Company is a market leader within the direct-to garment digital printing and fulfillment industry. DTG2Go Technology and innovation are key to improving customer supply chains. The Company sells casual and athletic products through various distribution channels and levels, including specialty and independent stores, mid-tier and better department stores, mass merchants, and e-retailers. U.S. The military and via its business-to–business e-commerce websites. You can also find the products of the Company on its websites: www.saltlife.com or www.soffe.com. They are also available through its retail stores. The Company has operations all across the country. The United States, Honduras, El SalvadorAnd MexicoIt employs around 8,600 people in the world. 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, which can be subject to risks and uncertainties. A variety of factors can cause actual results to differ materially to those anticipated or forecasted, including but not limited to the general U.S. International economic conditions, the impact on our operations, financial position, liquidity, capital investments and government/social measures taken to limit it; significant disruptions or disruptions in manufacturing, distribution, and other operations; deterioration and changes in the financial conditions of our customers, suppliers, and customers; our ability or ability, to open and manage new retail stores in a timely manner and with cost-effective strategies; our ability or failure to attract and retain key managers; restrictions on our ability borrow capital or service our debt; interest rate fluctuations increasing the obligations; ability to raise additional capital; volatility; stock market volatility; foreign exchange rate fluctuations Securities and Exchange Commission As updated in our Quarterly Reports on Form 10Q. Except as required by law Delta Apparel, Inc. This press release expressly disclaims any obligation or obligation to revise forward-looking statements in order to reflect circumstances or events that occur after this date or the occurrence unanticipated.
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