Full Year Net Sales Rise 11%, Full year DilutedEPS of $2.80
DULUTH, Ga. November 17, 2022–(BUSINESS WIRED)–Delta Apparel, Inc. (NYSE American : DLA), a leader in lifestyle and activewear products, and direct-to garment digital printing, announced today financial results for its 2022 fiscal fourth and full year.
Robert W. Humphreys, the Company’s Chairman and Chief Executive Officer, commented, “We are pleased to announce results marking our second consecutive year of strong organic growth. Our diversified approach to market strategies and our vertically integrated manufacturing and services platforms enabled us to navigate an economic and business environment that is constantly changing. In fiscal 2022, all five of our market channels, Delta Direct, Global Brands Retail Direct, DTG2Go and Salt Life, saw year-over-year growth in sales.
Our Delta Group segment saw solid growth in regional screen printing and ad specialty business, as well as increasing interest in supply chain solutions in Global Brands channels and Retail Direct channels. With a strong double-digit increase in sales for the year, DTG2Go’s print-on-demand business is growing, and our order flow for digital first strategy far exceeds our capacity, our DTG2Go business continues to grow. We will continue to focus on increasing production to meet this critical growth area.
Salt Life achieved record sales and operating results in another year, surpassing 21% the previous year. The Salt Life brand’s ability to connect with consumers across its many marketing touchpoints led to organic growth in all three Salt Life omni-channel markets – wholesale, retail and eCommerce – in the fourth quarter. Ending the year, 21 Salt Life retail doors were open across the U.S. from Southern California up to Key West, and along the eastern seaboard to Rehoboth Beach.
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 concluded that he was proud to say, “I am incredibly proud to our associates as we continue to respond to changing needs of the business.” Their hard work and dedication enabled us to enter our new fiscal year with an extremely resilient and diverse business model, ready to face the challenges and seize opportunities.
The fourth quarter ended October 1, 2022
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The net sales for the year were $115.5 Million, a slight rise over $114.7 Million in the prior year. Net sales in Salt Life Group increased 15.6% compared to the previous year, while net Sales in Delta Group decreased 1.1%
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Gross profit was $21.6million compared to $26.5million in the previous year period. Gross margins decreased 440 basis points to 18.7%. A gross margin improvement in Salt Life Group helped offset a decrease in the Delta Group segment due to higher input cost in Activewear and DTG2Go and unabsorbed fixed production costs. In the September quarter, we began reducing production of basic T-shirts. This resulted in $1.1million in unabsorbed fixed costs.
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Selling, general and administrative (“SG&A”) expenses were $19.8 million, compared to $17.7 million in 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.
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Operating income fell by 78.0% to $2.2 million from the previous year. The net loss for the quarter was $0.3million, or $0.04 per dilute share. This compares with net income of $6.9million, or $0.96, in the prior-year period.
Here’s the complete year ending October 1, 2022
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From $436.8million in the previous year, net sales rose 11.0% to $484.9million. The net sales of the Delta Group and Salt Life Group segments grew by 9.8% and 20%, respectively, over last year.
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Gross profit rose 6.8% to $108.8million, an increase of $101.9 million over the previous year. Gross margins fell 90 basis points to 22.4% from the previous year, partially due to a decrease in the Delta Group segment. However, there was an improvement in the Salt Life Group segment.
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Selling, general and administrative (“SG&A”) expenses were $79.5 million, compared to $70.7 million in the prior year, driven by selling costs associated with expansion of Salt Life’s retail footprint and higher distribution labor costs. SG&A expenses as a percentage of sales were relatively flat at 16.4%, compared to 16.2% in the prior year.
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Operating income was $31.8million. This resulted in an operating profit of 6.6% compared with operating income of 32.7 million and 7.5% respectively in the previous year.
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Net income was $19.7million or $2.80 per dilute share, compared with net income of $20.3million or $2.86 in the preceding year.
At year-end, total net inventory was $248.5 million. This compares to $161.7 million one year ago. The year-overyear inventory growth is due to increased input costs that impact materials, transportation and labour as well an increase in units.
The total amount of net debt at year-end (capital lease financing, cash, and capital finance) was $170.6million compared to $121.7million a year earlier.
Conference Call
At 4:30 p.m. today, the Company will host a conference call with its senior management to discuss financial results. ET. You may join the call by dialing: 877-704 4453. For international calls, dial 201-389-920. A live webcast of the conference call will be available at www.deltaapparelinc.com. To register for the teleconference webcast, please visit the website at minimum 15 minutes before the call to download any software. The replay of the call can be accessed until December 17, 2022. Participants can access the replay by dialing toll-free at 844-512-2921. International callers may dial 412-317-66671. Access code 13733708 is the replay access code
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®, Soffe®, and Delta. The Company is a market leader within the direct-to garment digital printing and fulfillment industry. It brings its DTG2Go technology to customers’ supply chains and innovations. The Company sells casual and athletic products through many distribution channels, including independent and specialty shops, higher-end department stores, mid-tier retailers, mass retailers and e-retailers, as well as through its business to-business ecommerce sites. The Company’s products are also made available direct-to-consumer on its websites at www.saltlife.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 Concerning Forward-Looking Statements
These statements may be forward-looking and could involve risks. A number of factors can cause actual results to differ materially to those anticipated or forecasted, including but not limited to: the general U.S. economy and social actions taken by the government to contain the COVID-19 pandemic; the impact on our operations of the COVID-19 pandemic on the U.S., international and local economies; the availability of raw material prices and their volatility; our ability and ability to open new retail stores quickly and cost-effectively; our ability and ability to raise capital; interest rate fluctuations Delta Apparel, Inc. does not assume any obligation to make forward-looking statements. These statements are only made to reflect changes in circumstances or events that occur after the date of the press release.
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SELECTED FINANCIAL DATA |
|||||||||||||||
|
(In thousands, but not per share amounts) |
|||||||||||||||
|
Three Months End |
Twelve Months End |
||||||||||||||
|
September 2022 |
September 2021 |
September 2022 |
September 2021 |
||||||||||||
|
Net Sales |
$ |
115,539 |
$ |
114,735 |
$ |
484,859 |
$ |
436,750 |
|||||||
|
Price of goods sold |
93,914 |
88,192 |
376,016 |
334,870 |
|||||||||||
|
Gross Profit |
21,625 |
26,543 |
108,843 |
101,880 |
|||||||||||
|
Selling, general and administrative expenses |
19,845 |
17,737 |
79,455 |
70,743 |
|||||||||||
|
Other (Income), Net |
(448 |
) |
(1,355 |
) |
(2,393 |
) |
(1,574 |
) |
|||||||
|
Operating Income |
2,228 |
10,161 |
31,781 |
32,711 |
|||||||||||
|
Interest expense, net |
2,361 |
1,619 |
7,732 |
6,844 |
|||||||||||
|
(Loss), Earnings Prior to Provision For Income Taxes |
(133 |
) |
8,542 |
24,049 |
25,867 |
||||||||||
|
Provision for Income Taxes |
157 |
1,672 |
4,307 |
5,705 |
|||||||||||
|
Consolidated Net Loss Earnings |
(290 |
) |
6,870 |
19,742 |
20,162 |
||||||||||
|
Net Loss (Income), Attributable To Non-Controlling Interest |
9 |
(14 |
) |
(2 |
) |
134 |
|||||||||
|
Net (Loss Earnings) Attributable To Shareholders |
$ |
(281 |
) |
$ |
6,856 |
$ |
19,740 |
$ |
20,296 |
||||||
|
Weighted Average Shares Outstanding |
|||||||||||||||
|
Basic |
6,915 |
6,975 |
6,953 |
6,961 |
|||||||||||
|
Diluted |
6,915 |
7,142 |
7,047 |
7,093 |
|||||||||||
|
Net (Loss), Earnings Per Common Share |
|||||||||||||||
|
Basic |
$ |
(0.04 |
) |
$ |
0.98 |
$ |
2.84 |
$ |
2.92 |
||||||
|
Diluted |
$ |
(0.04 |
) |
$ |
0.96 |
$ |
2.80 |
$ |
2.86 |
||||||
|
September 2022 |
September 2021 |
||||||||||||||
|
Current Assets |
|||||||||||||||
|
Cash |
$ |
300 |
$ |
9,376 |
|||||||||||
|
Receivables net |
71,586 |
68,090 |
|||||||||||||
|
Inventories, Net |
248,538 |
161,703 |
|||||||||||||
|
Prepaids and Other Assets |
2,755 |
3,794 |
|||||||||||||
|
Total Current Assets |
323,179 |
242,963 |
|||||||||||||
|
Noncurrent Assets |
|||||||||||||||
|
Property, Plant & Equipment, Net |
74,109 |
67,564 |
|||||||||||||
|
Goodwill and other intangibles net |
61,923 |
64,188 |
|||||||||||||
|
Deferred Income Taxes |
1,342 |
1,854 |
|||||||||||||
|
Operating Lease Assets |
50,275 |
45,279 |
|||||||||||||
|
Joint Venture Investment |
9,886 |
10,433 |
|||||||||||||
|
Other noncurrent assets |
2,967 |
2,007 |
|||||||||||||
|
Total noncurrent assets |
200,502 |
191,325 |
|||||||||||||
|
Total assets |
$ |
523,681 |
$ |
434,288 |
|||||||||||
|
Current Liabilities |
|||||||||||||||
|
Accounts Payable and Accrued Costs |
$ |
110,967 |
$ |
82,885 |
|||||||||||
|
Income Tax Payable |
379 |
379 |
|||||||||||||
|
Current Portion Finance Leases |
8,163 |
6,621 |
|||||||||||||
|
Current Portion Of Operating Leases |
8,876 |
8,509 |
|||||||||||||
|
Current Part of Long-Term Debt |
9,176 |
7,067 |
|||||||||||||
|
Total Current Liabilities |
137,561 |
105,461 |
|||||||||||||
|
Noncurrent Liabilities |
|||||||||||||||
|
Long-Term taxes payable |
2,841 |
3,220 |
|||||||||||||
|
Leases for long-term finance |
16,776 |
15,669 |
|||||||||||||
|
Long-Term Operating Leases |
42,721 |
38,546 |
|||||||||||||
|
Long-Term Debt |
136,750 |
101,680 |
|||||||||||||
|
Long-Term Contingent Consideration |
– |
1,897 |
|||||||||||||
|
Deferred Income Taxes |
4,310 |
1,520 |
|||||||||||||
|
Other non-current liabilities |
– |
2,101 |
|||||||||||||
|
Total noncurrent liabilities |
203,398 |
164,633 |
|||||||||||||
|
Common Stock |
96 |
96 |
|||||||||||||
|
Additional Paid In Capital |
61,961 |
60,831 |
|||||||||||||
|
Equity attributable to non-controlling interest |
(656 |
) |
(658 |
) |
|||||||||||
|
Retained earnings |
166,600 |
146,860 |
|||||||||||||
|
Accumulated Other Comprehensive Loss (Loss). |
141 |
(786 |
) |
||||||||||||
|
Treasury Stock |
(45,420 |
) |
(42,149 |
) |
|||||||||||
|
Total Equity |
182,722 |
164,194 |
|||||||||||||
|
Total Liabilities & Equity |
$ |
523,681 |
$ |
434,288 |
|||||||||||
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Contacts
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