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 one of five market channels we offer. Global BrandsRetail Direct DTG2GoSalt Life and, delivered year-overyear sales growth for fiscal 2022.
In our Delta Group segment. We saw steady growth in regional screen printing and ad specialties businesses, as well as increasing interest in supply chain solutions in our Global Brands Retail Direct channels. Our DTG2Go The print-on-demand business is growing strongly with strong double-digit sales growth over the year. Our digital first strategy order flow exceeds our current capacity. We are determined to increase output in order to meet the demand in this crucial growth area.
Salt Life achieved record sales and operating results in another year, surpassing 21% the previous 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. Coaste starting from Southern California To Key West To the east, continue on to the eastern seaboard Rehoboth Beach Delaware.
Our near-shore, vertical manufacturing platform allowed us to respond quickly to market fluctuations and adjust production levels to manage inventory costs and reduce 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 concluded that I am incredibly proud to say that our associates continue to meet the changing needs of our company. Their hard work and dedication enabled us to move into the new fiscal year with a highly resilient business model, ready to face any challenges.
Fourth quarter concluded October 1, 2022:
Net sales reached $2.5 billion $115.5 MillionThis is a slight increase in net sales over the previous year. $114.7 million. Net sales Salt Life Group Segment sales increased 15.6% compared to the previous year period. Net sales in the segment increased by the same amount. Delta Group Segment decreased 1.1%
Gross profit was $21.6 millionCompared to $26.5 Million Gross margins declined by 440 basis points to 18.7% in the previous year. Gross margin improvement Salt Life Group Segment helped offset a decline in gross margins Delta Group Segment driven mainly by its Activewear segment and higher input costs DTG2Go Businesses and unabsorbed fixed manufacturing cost. We began reducing the production of basic Tees in September quarter. $1.1 million Fixed costs that are not absorbed.
Selling, general and administrative (‘SG&A’) expenses were $19.8 millionsComparatively 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. The net loss was 78.0% $0.3 millionYou can also call it: $0.04 Comparable to net income, per diluted share $6.9 MillionYou can also call it: $0.96 Per diluted share for the previous year period.
The complete year ended October 1, 2022:
Net sales rose 11.0% $484.9 Million From $436.8 Million In the previous year. In the previous year, net sales Delta Group And Salt Life Group Segments grew by 9.8% and 20%, respectively, in the past year.
Gross profit rose 6.8% $108.8 Million From $101.9 Million In the previous year. Gross margins fell by 90 basis points to 22.4% in the previous year due to a decrease in the Delta Group Improvements in the Salt Life Group segment.
Selling, general and administrative (‘SG&A’) expenses were $79.5 MillionCompared to $70.7 Million In the preceding year, this was due to higher distribution labor and selling costs related to Salt Life’s expansion. 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 Operating margin of 7.5% in previous year
Net income was $19.7 millionsYou can also call it: $2.80 Per diluted share compared with net income $20.3 millionYou can also call it: $2.86 Per diluted share in the previous year.
The year-end total inventory was $248.5 millionComparable to $161.7 million The same year before. Year-over-year inventory growth is due to higher input costs that impact materials, transportation, and labor as well an increase in units.
At the year-end, total debt including capital lease financing and cash was $170.6 millionCompared to $121.7 million A year ago.
Conference Call
To discuss the Company’s financial results, senior management will be joining the company for a conference call today 4:30 p.m. ET. The Company invites all to join the call at 877-704-453 If you are calling from abroad The United StatesTo reach us, 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. You can replay the call 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, 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, Soffe, and Delta. The Company is a market leader within the direct-to garment digital printing and fulfillment industry. DTG2Go Innovation and technology are essential to the customer supply chain. The Company is a specialist in selling casual and sports products through a variety distribution channels and tiers including independent and specialty shops, sporting goods retailers, higher-end department stores and mid-tier retailers as well as mass merchants and online retailers. U.S. The military and via its business-to–business e-commerce websites. You can also find the products of the Company on its websites: www.saltlife.com or www.soffe.com. They are also available through its retail stores. The Company’s operations can be found all over the globe. The United States, Honduras, El Salvador?, MexicoIt employs around 8,600 people in the world. Additional information about the Company is available at www.deltaapparelinc.com.
Cautionary Note regarding 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; the financial condition of customers and suppliers, as well as changes in their strategies and operations; the volatility, uncertainty, and profitability of our retail operations; our ability and ability to attract and keep key management; our ability and ability to operate new retail stores; the ability and ability to manage our data security; restrictions on how we can borrow capital and service our indebtedness. Interest rate fluctuations increase our obligations under our variable. Securities and Exchange Commission As updated in our Quarterly Reports on Form 10Q. Except where otherwise 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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