Delta Apparel Reports Fourth Quarter and Full Year Fiscal 2019 Results

Overall sales up 16% for quarter, including double-digit growth across all segments

Greenville, South Carolina, UNITED STATES

GREENVILLE, S.C., Nov. 21, 2019 (GLOBE NEWSWIRE) -- Delta Apparel, Inc. (NYSE American: DLA), a leading provider of core activewear and lifestyle apparel products, today announced financial results for its fiscal 2019 fourth quarter and full year ended September 28, 2019.

Robert W. Humphreys, the Company’s Chairman and Chief Executive Officer, commented, “We are thrilled with our overall performance for the fourth quarter and full year.  Both our Delta Group and Salt Life Group segments achieved double-digit sales growth for the quarter and drove results exceeding our expectations.  We were also able to expand gross margins in the back half of the year, maintain our cost discipline, and finish the year with increasing profitability.”

Mr. Humphreys continued, “As we look ahead to fiscal 2020, we are excited to see positive momentum across our business segments. In our Delta Group, we continue to diversify our customer base across multiple channels of distribution, and our Activewear business’s entry into the full-service distributor channel in 2020 should only enhance our versatility.  Our DTG2Go business turned in another extremely strong year, more than doubling its revenue, and we continue to be in a prime position to capitalize on what we see as the still largely untapped growth potential of digital printing. Our Salt Life lifestyle brand also enters the new year with good things happening in a variety of areas, and we remain very focused on expanding the brand’s direct-to-consumer strategies and partnerships with national and regional retailers.” 

For the fourth quarter ended September 28, 2019:

  • Net sales were $108.0 million, up 16.2% from $92.9 million in the prior year fourth quarter. Net sales in the Delta Group segment increased 16.6% over the prior year period, and net sales in the Salt Life Group segment increased 12.5% from the prior year period.
  • Gross profit was $22.9 million, an increase of 19.5% compared to $19.2 million in the prior year fourth quarter. Gross margin was 21.2% compared to 20.6% in the prior year fourth quarter driven by year-over-year improvement in both the Delta Group and Salt Life Group segments.
  • Selling, general and administrative ("SG&A") expenses as a percentage of sales improved 150 basis points to 17.1%, compared to 18.6% in the prior year fourth quarter.
  • Operating income for the quarter was $4.8 million compared to $3.5 million in the prior year fourth quarter, with the increase driven primarily by an increase of $1.6 million in the Delta Group segment.
  • Net income for the quarter was $3.5 million, or $0.50 per diluted share, compared to $3.1 million, or $0.43 per diluted share, in the prior year period.

For the full year ended September 28, 2019:

  • Net sales were $431.7 million, up 9.2% from $395.5 million last year. Net sales in the Delta Group segment increased 9.3% over the prior year and net sales in the Salt Life Group segment increased 8.1% over the prior year.
  • Gross profit was $85.2 million, up 3.8% from $82.0 million last year. Gross margin was 19.7% compared to 20.7% in the prior year period, but as expected, gross margins expanded sequentially each quarter through the year.
  • SG&A expenses as a percentage of sales improved 60 basis points to 16.3%, compared to 16.9% in the prior year period.
  • Operating income was $15.9 million compared to $17.4 million last year, with the majority of the decrease attributable to a discrete expense of $2.5 million taken during the first quarter of 2019 in connection with the resolution of litigation surrounding a 2016 customer bankruptcy. Delta Group segment operating income, which was impacted by the above-referenced litigation expense, declined $2.3 million over the prior year, while Salt Life Group segment operating income increased $1.4 million compared to the prior year due in part to the favorable settlement of a commercial litigation matter in the third quarter.
  • Net income was $8.2 million, or $1.17 per diluted share, compared to prior year net income of $1.3 million, or $0.18 per diluted share. Adjusting for the $0.31 per diluted share expense impact of the above-referenced bankruptcy litigation matter and the benefit of $0.10 per diluted share arising from the above-referenced commercial litigation settlement, net income was $1.38 per diluted share. In fiscal year 2018, after adjusting for the $1.44 per diluted share expense due to tax reform legislation, our net income was $1.62 per diluted share.

During the year, the Company spent approximately $16.2 million on capital expenditures and $2.7 million to repurchase 141,501 shares of its stock. Total debt, including capital lease financing, as of the end of fiscal year 2019 was $135.1 million, up about 20% from the end of the prior year due principally to the Company’s recent digital print acquisitions and distribution expansions.  Total inventory at the end of fiscal year 2019 was $179.1 million compared with $175.0 million a year ago due primarily to recent product expansions in both the Delta Group and Salt Life Group segments.

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 800-458-4121. If calling from outside the United States, please dial 323-794-2093. A live webcast of the conference call will be available at 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 21, 2019. 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 6600025.

About Delta Apparel, Inc.
Delta Apparel, Inc., along with its operating subsidiaries, DTG2Go, LLC, Salt Life, LLC, and 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®, COAST®, Soffe®, and Delta.  The Company is a market leader in the direct-to-garment digital print and fulfillment industry, bringing DTG2Go technology and innovation to the supply chain of its customers. The Company specializes in selling casual and athletic products through a variety of distribution channels and tiers, including outdoor and sporting goods retailers, independent and specialty stores, better department stores and mid-tier retailers, mass merchants and e-retailers, the U.S. military, and through its business-to-business e-commerce sites. The Company’s products are also made available direct-to-consumer at its branded retail stores and on its websites at,, and as well as through its branded retail stores. The Company’s operations are located throughout the United States, Honduras, El Salvador, and Mexico, and it employs approximately 8,500 people worldwide. Additional information about the Company is available at

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 and availability; 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 and as updated in our subsequently filed Quarterly Reports on Form 10-Q. 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.

Company Contact:

Deborah Merrill, 864-232-5200 x6620

Investor Relations and Media Contact:
ICR, Inc.

Tom Filandro, 646-277-1235

Jessica Liddell, 203-682-8208 

(In thousands, except per share amounts)       
  Three Months Ended Twelve Months Ended
 Sep 28, 2019 Sep 29, 2018 Sep 28, 2019 Sep 29, 2018
Net Sales$107,957  $92,922  $431,730  $395,450 
Cost of Goods Sold 85,073   73,769   346,578   313,429 
Gross Profit 22,884   19,153   85,152   82,021 
Selling, General and Administrative 18,449   17,317   70,220   66,969 
Other Income, Net (389)  (1,622)  (963)  (2,351)
Operating Income 4,824   3,458   15,895   17,403 
Interest Expense, Net 1,811   1,507   7,550   5,713 
Income Before (Benefit From) Provision for Income Taxes 3,013   1,951   8,345   11,690 
(Benefit From) Provision for Income Taxes (419)  (1,124)  477   10,460 
Consolidated Net Earnings 3,432   3,075   7,868   1,230 
Net Loss Attributable to Non-Controlling Interest (91)  (32)  (374)  (107)
Net Earnings Attributable to Shareholders$3,523  $3,107  $8,242  $1,337 
Weighted Average Shares Outstanding                
 Basic 6,921   7,018   6,929   7,149 
 Diluted 7,089   7,304   7,064   7,425 
Net Income per Common Share               
 Basic$0.51  $0.44  $1.19  $0.19 
 Diluted$0.50  $0.43  $1.17  $0.18 
    Sep 28, 2019 Sep 29, 2018  
Current Assets       
 Cash  $605  $460   
 Receivables, Net   60,887   46,879   
 Inventories, Net   179,107   174,983   
 Prepaids and Other Assets   2,999   3,100   
Total Current Assets   243,598   225,422   
Noncurrent Assets       
 Property, Plant & Equipment, Net   61,404   52,114   
 Goodwill and Other Intangibles, Net   59,504   53,715   
 Deferred Income Taxes   1,514   1,374   
 Investment in Joint Venture   10,388   8,980   
 Other Noncurrent Assets   1,580   2,004   
Total Noncurrent Assets   134,390   118,187   
Total Assets  $377,988  $343,609   
Current Liabilities       
 Accounts Payable and Accrued Expenses  $73,111  $64,750   
 Current Portion of Contingent Consideration   2,790   638   
 Current Portion of Capital Lease Financing   6,434   3,846   
 Current Portion of Long-Term Debt   6,540   6,577   
Total Current Liabilities   88,875   75,811   
Noncurrent Liabilities       
 Long-Term Taxes Payable   3,977   4,259   
 Long-Term Contingent Consideration   6,304   9,904   
 Long-Term Capital Lease Financing   12,836   9,302   
 Long-Term Debt   109,296   92,083   
 Deferred Income Taxes   1,519   2,132   
 Other Noncurrent Liabilities   1,293   -   
Total Noncurrent Liabilities   135,225   117,680   
 Common Stock   96   96   
 Additional Paid-In Capital   59,855   61,979   
 Equity Attributable to Non-Controlling Interest   (281)  93   
 Retained Earnings   136,937   128,695   
 Accumulated Other Comprehensive (Loss) Income   (969)  136   
 Treasury Stock   (41,750)  (40,881)  
Equity Attributable to Delta Apparel, Inc.   153,888   150,118   
Total Liabilities and Equity  $377,988  $343,609