Delta Apparel Inc reported financial results for its fiscal first quarter ended September 30, 2006. The Company's results are in line with the preliminary results announced on October 16, 2006.
Net sales for the three months ended September 30, 2006 increased 3.5 percent to a first quarter record of $62.7 million compared to $60.6 million in the prior year's first quarter.
The increase was primarily driven by strong sales in the Soffe business, offset slightly by lower sales in the Junkfood business.
Gross margins declined 320 basis points to 27.7 percent compared to 30.9 percent in the prior year first quarter primarily as a result of lower sales in the Junkfood business and higher raw material prices.
Net income for the first quarter was $2.2 million, or $0.26 per diluted share, compared to the prior year's level of $3.4 million, or $0.39 per diluted share.
During the first quarter of 2007, the Company recorded an extraordinary gain associated with the final earn-out payment made to the former M. J. Soffe shareholders. This extraordinary gain, net of taxes, was $0.7 million, or $0.08 per diluted share.
On October 2, 2006, the Company completed the acquisition of FunTees, Inc. for a total purchase price of $20 million in cash, subject to certain post-closing adjustments, including an adjustment based on the actual working capital purchased. The Company funded the acquisition through draws under its revolving credit facility.
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