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Delta Apparel registers strong double digit sales growth
28
Jan '10
Delta Apparel, Inc. reported sales growth of 24.3% and a $0.04 increase in diluted earnings per share for its second quarter ended December 26, 2009 compared to the prior year second quarter.

Second Quarter Results

Net sales for the three months ended December 26, 2009 were a record $91.2 million, an increase of 24.3% from the prior year second quarter. The sales expansion was driven by organic growth of 16.6% and the net sales contributed by its headwear business. Gross margins increased 200 basis points to 23.9% compared to 21.9% in the prior year second quarter. The Company continues to improve the gross margins in its activewear segment, which increased 330 basis points, through more effective merchandising strategies and lower manufacturing costs.

Net income for the quarter ended December 26, 2009 was $1.0 million, or $0.11 per diluted share. This includes a charge of $0.03 per diluted share relating to the mediated settlement of the lawsuit filed against the Company by the bankruptcy trustee for National Gas Distributors, LLC, which was settled in December 2009. The prior year second quarter earnings were $0.07 per diluted share, which included a favorable tax adjustment of $0.04 per diluted share.

Fiscal 2010 Year to Date Results

Net sales for the six months ended December 26, 2009, were $190.3 million, an increase of $25.5 million, or 15.5%, from the prior year six month period. The sales increase was driven by organic growth of 8.4% and the net sales contributed by To The Game, LLC, which was acquired during the fourth quarter of fiscal year 2009. Net income for the six months ended December 26, 2009 was $3.6 million, or $0.42 per diluted share, a 180.0% increase from the $0.15 per diluted share in the first six months of fiscal year 2009.

Robert W. Humphreys, Chairman and Chief Executive Officer, commented, “We are very pleased with our strong double digit sales growth during the second quarter which comes on top of 7% sales growth in the year ago quarter and amidst a challenging consumer environment. We believe our ability to grow our business and gain market share in all operating divisions is a validation of our powerful brands, creative graphic talent, robust consumer appeal, and strong customer relationships. At the same time, the manufacturing initiatives we undertook a few years ago combined with our continued focus on manufacturing performance is enabling us to meet our fiscal 2010 gross margin target of 24% despite the pricing pressures in our activewear segment. As the spring selling season approaches, we believe our competitive position will allow further growth and improvement in profitability.”

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Delta Apparel Inc

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