DULUTH Ga – Delta Apparel, Inc. (NYSE American: DLA), a leader in lifestyle and activewear products, and direct-to garment digital printing, today announced financial results from its fiscal fourth quarter and year 2022. October 1, 2022.
Robert W. HumphreysThe Chairman and Chief Executive Officer of the Company, stated that results for the second consecutive year have shown strong organic growth. Our diversified approach to market combined with our vertically integrated manufacturing, service and platform platforms enabled us to navigate an economic and business environment that is constantly changing. Delta Direct is the fifth of our market channels. Global BrandsRetail Direct DTG2GoSalt Life and, delivered year-overyear sales growth for fiscal 2022.
In our Delta Group Segment. We saw steady growth in our regional print and ad specialties businesses, as well as increasing interest in the supply chains solutions offered in our Global Brands Retail Direct channels. Our DTG2Go Print-on-demand continues to grow with a strong double digit sales increase over the previous year. The order flow for our digital-first strategy is exceeding our current capacity. We will continue to focus on increasing production to meet this critical growth area.
Salt Life achieved record sales and operating results in another year, surpassing 21% the prior year. Salt Life’s ability to connect consumers through its various marketing touchpoints resulted in organic growth in all three Salt Life markets – wholesale and retail – during the fourth quarter. We closed the year with 21 Salt Life retail doors across the country. U.S. Coast from Southern California To Key West To the east, continue on to the eastern seaboard Rehoboth Beach Delaware.
Our vertical, near-shore manufacturing platform allows us to react quickly to market changes and adjust production levels in order to manage inventory and lower input costs. We plan to keep some of our facilities operating at less than their full capacity during the first half fiscal 2023, until inventory levels are better aligned with overall demand.
Mr. Humphreys “I am still incredibly proud of my associates, as they continue responding to the ever-changing demands of our business,” concluded I. We enter our new fiscal year with a highly resilient, diversified business model that is ready to take on the challenges and capitalize on them.
Fourth quarter concluded October 1, 2022:
Net sales were $115.5 MillionA slight increase in net sales compared to the prior year period $114.7 Million. The net sales Salt Life Group Segment sales increased 15.6% compared to the prior-year period. Net sales in the segment increased by 15%. Delta Group Segment decreased 1.1%
Gross profit was $21.6 millionComparable to $26.5 million Gross margins declined by 440 basis points to 18.7% in the previous year. Gross margin improvement Salt Life Group Gross margin declines in the segment were offset by segments Delta Group Segment driven mainly by its Activewear segment and higher input costs DTG2Go Businesses and unabsorbed fixed manufacturing cost. In the September quarter, we began to reduce production of basic tees. $1.1 Million Intangible fixed costs.
Selling, general and administrative (‘SG&A’) expenses were $19.8 millionsComparable to $17.7 Million 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 primarily due to higher labor costs and selling costs related to the Salt Life retail store expansion.
Operating income was $2.2 millionThis is a decrease of 78.0% compared to the previous year. This resulted in a net loss. $0.3 millionOr $0.04 Comparable to net income, per diluted share $6.9 MillionOr $0.96 In the preceding year, per diluted share.
For the complete year October 1, 2022:
Net sales increased 11.0% $484.9 Million Starting at $436.8 Million The previous year. Net sales Delta Group And Salt Life Group Segments saw an increase of 9.8% and 20.8% over the previous year.
Gross profit rose 6.8% $108.8 million Starting at $101.9 Million The previous year. The gross margins in 2008 were 22.4%. This was a 90 basis point decrease from the previous year. Delta Group Segment partially offset by improvements in the Salt Life Group segment.
Selling, general and administrative (‘SG&A’) expenses were $79.5 MillionComparable to $70.7 Million In the preceding year, this was due to higher distribution labor and selling costs. SG&A expenses as a percentage of sales were relatively flat at 16.4%, compared to 16.2% in the prior year.
Operating income was $31.8 MillionThis results in an operating margin at 6.6%, which is lower than the operating income. $32.7 million an operating margin of 7.5% for the previous year.
Net income was $19.7 MillionOr $2.80 Per diluted share, as compared to net Income $20.3 MillionOr $2.86 Per diluted share in the previous year.
At year-end, total net inventory was $248.5 MillionComparable to $161.7 Million A year ago. Year-over-year inventory growth is due to higher input costs that impact materials, transportation, and labor, as well as an increase of units on hand.
Total net debt at year-end included capital lease financing and cash available $170.6 MillionComparable to $121.7 Million A year ago.
Conference Call
The Company will host a conference phone call with its senior management today to discuss its financial results. 4:30 p.m. ET. You can join the call by dialing (877) 704-4453. If you are calling from abroad The United StatesFor more information, dial 201-389-920. A live webcast of the conference call will be available at www.deltaapparelinc.com. Register for the teleconference webcast by visiting the website at least fifteen minutes before the call to download the software and register. The replay of the call can be accessed through December 17, 2022. Participants can access the replay by dialing toll-free at 844-512-2921. International callers may dial 412-317-66671. The replay access code is 13733708.
About Delta Apparel, Inc.
Delta Apparel, Inc.together with its 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. The Company is a market-leader in direct-to-garment digital printing and fulfillment. DTG2Go Technology and innovation are key to improving customer supply chains. The Company sells casual and athletic products through various distribution channels and levels, including specialty and independent stores, mid-tier and better department stores, mass merchants, and e-retailers. U.S. The military and via its business-to–business e-commerce websites. Products from the Company are also available directly-to-consumer through its websites www.saltlife.com/www.soffe.com/www.deltaapparel.com, as well as its retail stores. The Company’s operations can be found all over the globe. The United States, Honduras, El SalvadorAnd MexicoThe company employs approximately 8,600 people around the globe. Additional information about the Company is available at www.deltaapparelinc.com.
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 to differ materially to those anticipated or forecasted, including but not limited to the general U.S. International economic conditions, the impact on our operations, financial position, liquidity, capital investments and government/social measures taken to limit it; significant disruptions or disruptions within our manufacturing and distribution operations; deterioration and changes to the financial conditions of our customers, suppliers, and customers; our ability or ability, to open and manage new retail stores in a timely manner and with cost-effective strategies; our ability or failure to attract and retain key managers; restrictions on how we can borrow capital or service indebtedness; interest rates fluctuations increasing our liabilities; volatility; and stock market volatility; and general volatility; and the illiquidity; and the volatility; and the stock exchange rate fluctuation; Securities and Exchange Commission As amended in our subsequently filed Quarterly Reports, Form 10-Q. Except as required by law Delta Apparel, Inc. These forward-looking statements are expressly disclaimed as being subject to any obligation to be updated to reflect changes in circumstances or events after the date of the press release, or to reflect unanticipated events.
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