GREENVILLE, S.C., Nov. 15, 2018 (GLOBE NEWSWIRE) Delta Apparel, Inc. (NYSE American: DLA), a leading provider of core activewear and lifestyle apparel and related accessories, today announced financial results for its fourth quarter and full fiscal year 2018 ended September 29, 2018.
Robert W. Humphreys, Delta Apparel, Inc.’s Chairman and Chief Executive Officer, commented, “We are pleased to have delivered fourth quarter sales growth of 2% along with solid bottom line performance despite significant weather interruptions at two of our major distribution centers. Our DTG2Go digital print business and our Activewear business drove strong top and bottom-line performance in our re-aligned Delta Group segment. While our Salt Life business was impacted by the hurricanes this quarter, the Salt Life brand continues to grow its lifestyle presence and expand its market reach. We remain extremely optimistic about that business going forward.”
Mr. Humphreys continued, “Fiscal 2018 was an important year for Delta Apparel. We grew our sales year-over-year and, excluding the impacts of the recent tax reform legislation, significantly increased our profitability. We also made important strides in building our DTG2Go business with an acquisition in March and a follow-on acquisition in October, solidifying our industry-leading position in the digital print and fulfillment space. Finally, we continued to increase consumer awareness of our Salt Life brand through our expansion into additional product categories, and growth with national and regional retailers and in our own direct-to-consumer channels. We believe that the strategic actions we have taken over the past year position us well to capitalize on the many growth opportunities we see ahead for our Company.”
To better reflect Delta Apparel, Inc.’s current operating model, the Company has re-aligned its reporting segments and now refers to them as the Delta Group and the Salt Life Group. The Delta Group is comprised of the Company’s DTG2Go digital print business as well as its Delta Activewear business and Soffe brand. The Salt Life Group is comprised of the Salt Life and Coast lifestyle brands. The fourth quarter and full year results reflect these changes to the Company's reporting segments.
For the fourth quarter ended September 29, 2018:
For the full year ended September 29, 2018:
The Company improved its operating cash flow by nearly $7 million to $20.9 million in fiscal year 2018. Total inventory at the end of fiscal year 2018 remained relatively flat with a year ago at $175 million, with lower units on hand partially being offset by higher cost per unit inventory resulting from inflationary increases. During fiscal year 2018, the Company spent $13.3 million on capital expenditures, $16.4 million on the digital print acquisition, and $9.0 million on share repurchases. Total debt, including capital lease financing, at the end of fiscal year 2018 was $111.8 million compared to $96.2 million at the end of the prior year.
Conference Call
The 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 888-224-1121. If calling from outside the United States, please dial 323-994-2082. 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 15, 2018. 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 8037708.
Use of Non-GAAP Measures
In an effort to provide investors with additional information regarding the Company's results as determined by United States generally accepted accounting principles (GAAP), the Company also provides non-GAAP information that management believes is useful to investors. The Company discusses adjusted net sales, adjusted net income, and adjusted earnings per diluted share as performance measures because management uses these measures in evaluating the Company's underlying performance on a consistent basis across periods. Management also believes these measures are frequently used by securities analysts, investors and other interested parties in the evaluation of the Company's recurring performance. These non-GAAP measures can be calculated using the information in this press release. These non-GAAP measures have limitations as analytical tools, and securities analysts, investors and other interested parties should not consider any of these non-GAAP measures in isolation or as a substitute for analysis of the Company's results as reported under GAAP. These non-GAAP measures may not be comparable to similarly titled measures used by other companies.
About Delta Apparel, Inc.
Delta Apparel, Inc., along with its operating subsidiaries, Salt Life, LLC, M. J. Soffe, LLC, and DTG2Go, LLC, is an international design, marketing, manufacturing, and sourcing company that features a diverse portfolio of core activewear and lifestyle apparel and related accessory products. The Company specializes in selling casual and athletic products through a variety of distribution channels and distribution tiers, including department stores, mid and mass channels, e-retailers, sporting goods and outdoor retailers, independent and specialty stores, and the U.S. military. 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. The Company’s operations are located throughout the United States, Honduras, El Salvador, and Mexico, and it employs approximately 7,700 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; 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. 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.
SELECTED FINANCIAL DATA: | |||||||||||||||||
(In thousands, except per share amounts) | |||||||||||||||||
Three Months Ended | Twelve Months Ended | ||||||||||||||||
Sep 29, 2018 | Sep 30, 2017 | Sep 29, 2018 | Sep 30, 2017 | ||||||||||||||
Net Sales | $ | 92,922 | $ | 91,327 | $ | 395,450 | $ | 385,082 | |||||||||
Cost of Goods Sold | 73,769 | 74,663 | 313,429 | 304,360 | |||||||||||||
Gross Profit | 19,153 | 16,664 | 82,021 | 80,722 | |||||||||||||
Selling, General and Administrative | 17,317 | 14,884 | 66,969 | 67,408 | |||||||||||||
Other Income, Net | (1,622 | ) | (557 | ) | (2,351 | ) | (2,865 | ) | |||||||||
Operating Income | 3,458 | 2,337 | 17,403 | 16,179 | |||||||||||||
Interest Expense, Net | 1,507 | 1,143 | 5,713 | 5,011 | |||||||||||||
Income Before Provision for Income Taxes | 1,951 | 1,194 | 11,690 | 11,168 | |||||||||||||
(Benefit From) Provision for Income Taxes | (1,124 | ) | (905 | ) | 10,460 | 657 | |||||||||||
Consolidated Net Earnings | 3,075 | 2,099 | 1,230 | 10,511 | |||||||||||||
Net Loss Attributable to Non-Controlling Interest | (32 | ) | - | (107 | ) | - | |||||||||||
Net Earnings Attributable to Shareholders | $ | 3,107 | $ | 2,099 | $ | 1,337 | $ | 10,511 | |||||||||
Weighted Average Shares Outstanding | |||||||||||||||||
Basic | 7,018 | 7,387 | 7,149 | 7,531 | |||||||||||||
Diluted | 7,304 | 7,713 | 7,425 | 7,882 | |||||||||||||
Net Income per Common Share | |||||||||||||||||
Basic | $ | 0.44 | $ | 0.28 | $ | 0.19 | $ | 1.40 | |||||||||