DULUTH Ga – Delta Apparel, Inc. (NYSE American: DLA), the leading supplier of lifestyle and activewear products, and digital printing direct-to-garment for core apparel and other clothing items, announced today financial results for its fiscal fourth quarter (2022) and entire year. October 1, 2022.
Robert W. HumphreysThe Chairman of the Company and Chief Executive Officer commented that results for this year’s second consecutive year of organic growth were a joy. Our diversified approach to market combined with vertically integrated manufacturing, service and platform platforms enabled us to navigate an economic and business environment that is constantly changing. Delta Direct is one of five market channels we offer. Global BrandsRetail Direct DTG2GoSalt Life and, both delivered year-over–year sales growth for fiscal 2022.
Our website is Delta Group segment. We saw solid growth in both our local screen printing and ad specialty business, as well as increasing interest for the supply chain options offered by our Global Brands Retail Direct Channels. Our DTG2Go The print-on demand business is growing strongly with strong sales growth of double digits for the year. Our digital first strategy order flow exceeds our capacity. This important area of growth is still a priority for us. We are determined to increase output.
Salt Life achieved record sales and operational results in another year, surpassing 21% the year before. Salt Life’s ability connect with customers across all marketing touchpoints resulted to organic growth within the third quarter of each Salt Life omnichannel market – wholesaler, retailer and eCommerce. The year ended with 21 Salt Life-branded retail doors available for business in the United States. U.S. Coastline starting at Southern California You can find more information here Key West And up to the eastern coast Rehoboth Beach Delaware.
Our near-shore, vertical manufacturing platform allowed us to respond quickly to market fluctuations and adjust production levels in order to control inventory costs and manage inputs. We are currently planning to run some of our facilities below full capacity for the first half 2023 in order to better match overall demand.
Mr. Humphreys I concluded that I am incredibly proud to say, “I continue to be incredibly proud to our associates as we respond to ever-changing requirements of our company.” We enter our fiscal year equipped with a flexible and resilient business model that is ready for the future.
Fourth quarter concluded October 1, 2022:
The net sales reached $2.5 billion $115.5 millionsThis is a slightly higher net sales than the previous year. $114.7million. Sales net in Salt Life Group Segment sales increased by 15.6% in comparison to the previous year, and net sales rose by the Delta Group Segment fell 1.1%
Gross profit $21.6 MillionComparable to $26.5 Million Gross margins declined by 440 basis points, to 18.7% in the previous year. The gross margin improvement was in Salt Life Group Gross margins declined in this segment was offset by the Segment Delta Group Segment driven by its Activewear segment and higher input costs DTG2Go Businesses and fixed costs of manufacturing that are not absorbed by the business. In the September quarter we began to reduce production of basic Tees. $1.1 Million Fixed costs that are not absorbed.
Selling, general and administrative (‘SG&A’) expenses were $19.8 millionsComparable to $17.7 millions The prior-year period. SG&A expenses as a percentage of sales increased 170 basis points to 17.2%, compared to 15.5% in the prior year period. The increase was mainly due to higher labor costs and selling costs related to the Salt Life retail store expansion.
The operating income was $2.2 MillionThis is a decrease of 78.0% compared to the previous year. This resulted is a net loss in the amount of 0.3 MillionOr $0.04 Per diluted share for quarter, compared with net income $6.9 MioOr $0.96 In the preceding year, per diluted share.
The complete year was October 1, 2022:
The net sales rose 11.0% $484,9 Million Starting at $436.8 millions The previous year. Sales net in Delta Group Salt Life Group The segments grew 9.8% and 28% respectively over the previous year.
The gross profit rose 6.8% $108.8 millions Starting at $101.9 Million The previous year. The gross margins fell by 90 basis points to 22.4% in 2016, mainly due to a decrease in the Delta Group Segment partially compensated by improvements in the Salt Life Group segment.
Selling, general and administrative (‘SG&A’) expenses were $79.5millionComparable to $70.7 Million The increase in distribution labor and selling costs due to Salt Life’s expansion has led to a decrease in sales volume. SG&A expenses as a percentage of sales were relatively flat at 16.4%, compared to 16.2% in the prior year.
The operating income was $31.8millionThis resulted in an operating profit of 6.6% compared with operating income of $32.7million an operating margin of 7.5% from the preceding year.
The net income was $19.7 millionsOr $2.80 Per diluted share, as compared with net income $20.3 MillionOr $2.86 Per diluted share in the previous year.
At year’s end, total net inventory was $248.5 millionsComparable to $161.7million A year ago. Year-over-year inventory growth is due to higher input costs that impact materials, transport and labor. There has also been an increase in the number of units.
The total amount of net debt at the year’s end, which includes capital lease financing and cash available, was $170.6 MillionComparable to $121.7 Million A year ago.
Conference Call
A conference call will be held by the Company with its senior management today to review financial results. 4:30 p.m. ET. To join this call, dial 877-704-4453. Call from an outside number The United StatesTo reach us, dial 201-389-920. A live webcast of the conference call will be available at www.deltaapparelinc.com. To register for the webcast, and to download any software required, please visit the website no later than 15 minutes prior. The replay will be accessible through December 17, 2022. Access to the telephone replay is available by calling toll free 844-512-2921. International callers should dial 412-317-6671. For replay access, dial 13733708.
About Delta Apparel, Inc.
Delta Apparel, Inc.Together with their operating subsidiaries, DTG2Go, LLC, Salt Life, LLCAnd M.J. Soffe, LLC, is a vertically-integrated, international apparel company that designs, manufactures, sources, and markets a diverse portfolio of core activewear and lifestyle apparel products under the primary brands of Salt Life, Soffe, and Delta. It is the market leader in direct-to-garment digital printing and fulfillment. DTG2Go Technology and innovation are key to improving customer supply chain processes. The Company is a specialist in the sale of casual and athletic goods through various distribution channels, tiers including independent and specialty shops, superior department stores and mid-tier retail stores, mass merchants, and e-retailers. U.S. Military, as well through the company’s business-to-business online e-commerce websites. Products from the Company are available directly-to-consumer through their websites www.saltlife.com/www.soffe.com/www.deltaapparel.com. They also sell products in its retail shops. All over the world, operations of the Company are conducted. The United States, Honduras, El SalvadorAnd MexicoThe company employs about 8,600 people around the globe. Additional information about the Company is available at www.deltaapparelinc.com.
A Cautionary Note Concerning Forward-Looking Statements
Forward-looking statements in this press release could contain risks and uncertainties. A variety of factors can cause actual results not to be as expected or anticipated. U.S. International economic and political conditions. The impact of the COVID-19 Pandemic on our operations, financial situation, liquidity and capital investments. Changes in customer and supplier financial conditions. Our ability and ability of customers to pay their bills on time. Information security. Securities and Exchange Commission As updated in the subsequently filed Quarterly Reports, Form 10-Q. Except where otherwise required by law Delta Apparel, Inc. This press release expressly disclaims all obligation to revise forward-looking statements in order to reflect new events, circumstances or the occurrence unanticipated.
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