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Duluth-based Delta Apparel expects profit in second quarter

13
Jan '09
Delta Apparel Inc announced preliminary financial results for the second quarter ended December 27, 2008 and updated its business outlook. The Company currently expects second quarter revenues to be approximately $73 million, which would be an increase of approximately $4 million, or 6.0%, from the prior year's second quarter.

Earnings for the quarter ended December 27, 2008 are expected to be approximately $0.05 to $0.06 per diluted share. The Company reversed a portion of its tax valuation allowance on its state operating loss carryforwards, which will contribute approximately $0.04 per diluted share to its earnings for the quarter.

Robert W. Humphreys, the Company's President and Chief Executive Officer, commented, “Although market conditions are less than ideal, our diversified channels of distribution and broad product offerings are resulting in sales and earnings growth for our Company over the prior year."

"Demand for undecorated basic tees slowed as the quarter progressed and this trend could continue into the second half of the year. We remain cautious about the retail conditions in the marketplace, but believe we are still positioned to achieve our sales and earnings goals for fiscal 2009.”

For the fiscal year ending June 27, 2009, the Company reiterates its expectation for net sales to be in the range of $340 million to $360 million and earnings to be in the range of $0.70 to $0.90 per diluted share. This compares to fiscal year 2008 sales of $322.0 million and a loss of ($0.06) per diluted share, inclusive of ($0.39) of costs associated with the textile restructuring plan.

The Company remains concerned about the general slowdown of the U.S. economy and consumer demand for apparel. The difficult retail climate has led to higher than normal bankruptcy rates by apparel retailers. This, coupled with weaker consumer demand, is an ongoing concern for the Company. In determining its expectations for fiscal year 2009, the Company believes it has taken into consideration these heightened risk factors; however, significant further deterioration in the economy may negatively impact the Company's ability to achieve its expectations.

Mr. Humphreys concluded, “Despite the near-term economic challenges, we remain confident that we are building a strong platform for growth in each of our business segments and believe the competitive position and operational capabilities of our business remain healthy for the future.”

The Company plans to report fiscal 2009 second quarter results on Friday, January 30, 2009 before the market opens.

Delta Apparel Inc, along with its wholly-owned subsidiaries, M. J. Soffe, LLC and Junkfood Clothing Company, is an international apparel design, manufacturing, sourcing and marketing company that features a diverse portfolio of high quality branded and private label activewear apparel.

Delta Apparel Inc


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