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. HumphreysChairman of the Company and Chief Executive Officer commented that results for the second consecutive year have shown strong organic growth. Combining our diverse go-to market strategies with our vertically-integrated manufacturing and service platforms helped us navigate a dynamic economic and business environment. Delta Direct is one of five market channels we offer. Global BrandsRetail Direct DTG2GoSalt Life and, both delivered year-over–year sales growth in fiscal 2022.
In our Delta Group Segment, we saw solid growth in our regional ad specialty and screen printing businesses. We also noticed an increase in interest in our supply chain solutions. 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’s segment had another record year in terms of operating and sales results. Overall sales surpassed the previous year by 21%. 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. The year ended with 21 Salt Life-branded retail doors available for business in the United States. U.S. Coastline starting at Southern California To Key West And up the eastern coast to Rehoboth Beach in 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 are currently planning to operate some facilities at a reduced capacity in the first quarter of fiscal 2023 so that inventories can better match 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 prior-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 in Salt Life Group Segment helped offset a decline in gross margins Delta Group Segment driven by higher input cost in Activewear DTG2Go Businesses and unabsorbed fixed manufacturing cost. In the September quarter, we began to reduce production of basic tees. $1.1 Million of unabsorbed fixed cost.
Selling, general and administrative (‘SG&A’) expenses were $19.8 MillionCompared to $17.7 Million In the previous 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. This was due to an increase in selling costs as a result of the Salt Life retail outlet expansion and higher distribution labor cost.
Operating income was $2.2 millionA decrease of 78.0% over the previous year period. The net loss was 78.0% $0.3 millionYou can also call it: $0.04 Per diluted share for quarter compared with net income $6.9 MillionYou can also call it: $0.96 In the preceding year, per diluted share.
For the complete year October 1, 2022:
Net sales rose 11.0% $484.9 Million Starting at $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.
To 6.8%, gross profit rose $108.8 Million Starting at $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 The increase in distribution labor costs and selling costs associated to expanding Salt Life’s retail footprint drove the sales growth in the previous year. 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 resulted in an operating profit of 6.6% compared to operating income. $32.7 Million Operating margin of 7.5% in previous year
Net income was $19.7 MillionYou can also call it: $2.80 Per diluted share, as compared to 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 millionCompared to $161.7 million A year ago. An increase in inventory over the past year is due to increased input costs, which impact transportation and labor as a whole.
At year-end, total net debt (capital lease financing, cash on hand) 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 us for a conference call today 4:30 p.m. ET. You can join the call by dialing (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. 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 should dial toll free 844-512-2911, or international callers 412-317-6671, to access the replay. 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. Military, as well as through its business to-business ecommerce sites. Products from the Company are also available directly-to-consumer through its websites www.saltlife.com/www.soffe.com/www.deltaapparel.com and its retail stores. The Company has operations all across the country. 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
This press release may contain forward-looking statements, which can be subject to risks and uncertainties. There are many factors that could cause actual results not to be as expected or predicted. 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 in manufacturing, distribution, and other operations; deterioration and changes to the financial conditions of our customers, suppliers, and customers; our ability predict and react to changes in consumer preferences and trends; our capacity to attract and keep key management; our ability of to operate new retail locations in a timely manner and with cost-effectiveness; restrictions on our ability borrow capital or service our debt; fluctuations 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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