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Delta to close NC Textile Operation

29
Jan '09
Delta Apparel Inc announced its plans to close its textile manufacturing facility in Fayetteville, North Carolina. In continuing the Company's manufacturing improvement strategy, the Company is consolidating the textile production for its M. J. Soffe business, currently produced in the Fayetteville, North Carolina facility, into its operations in Maiden, North Carolina and its Ceiba Textiles facility in Honduras.

Bob Humphreys, President and Chief Executive Officer, commented, “These decisions are never easy especially when they affect associates who have been dedicated and loyal to our Company. However, as our business becomes increasingly competitive, we can no longer justify the additional cost associated with operating two US textile facilities. We believe this economic decision is in the best long-term interest of Delta Apparel and our shareholders.”

The movement of production will begin in the Company's third fiscal quarter and is scheduled to be complete in June 2009. The cost of this transition is not expected to be material. The closing of the Fayetteville Plant is expected to save the Company approximately $1 million annually once the transition of the fabric production is complete. The Company anticipates this favorable financial impact will be realized in its results of operations in the second half of fiscal 2010.

The movement of textiles out of the Fayetteville facility will impact the employment of 107 associates. The M. J. Soffe Fayetteville campus will continue to employ approximately 550 associates in other capacities including sewing, screen printing, retail packaging, distribution, and product and art development, along with all sales and administrative functions for M. J. Soffe. Associates impacted by the closing will be considered for open positions in these areas as well as transfers to other Delta Apparel facilities.

Delta Apparel Inc


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