Delta Apparel, Inc. (NYSE American: DLA), a leading provider of
core activewear and lifestyle apparel products, today provided
preliminary results for its 2020 second quarter and announced that
it will host a business update conference call today, Friday, April
17, 2020 at 8:30 a.m. ET.
Robert W. Humphreys, the Company’s Chairman and
Chief Executive Officer, commented, “All businesses are currently
operating in an unprecedented and difficult environment. It
is during times like now that we are especially proud of the
strategic advantages within Delta Apparel, including our
diversification of sales channels and our broad geographic
footprint. Through the disruptions that have taken place
worldwide, we have been able to stay open and operate our business
with current inventory levels sufficient to service customers in
the near-term. Although sales in many of our distribution
channels, including traditional retailers and our own branded
stores, are considerably lower or even curtailed, we are seeing
positive results in other areas of our business. About 25% of our
business is generated through sales channels that have not been
significantly impacted by COVID-19, including our e-Commerce sites,
DTG2Go, and our military businesses. In fact, in April we are
actually seeing meaningful acceleration in our branded
direct-to-consumer e-commerce sites and in our DTG2Go on-demand
business. Customers are clearly seeing the benefits and the
uniqueness of our fully-integrated and diversified geographic
digital printing model, and we are gaining share in this
market.”
The Company anticipates net sales for the second
quarter of its 2020 fiscal year to be $96.7 million, which
represents a 6.0% decrease compared to $102.8 million in the prior
year period. Prior to the March impact of COVID-19, the
Company was on pace to achieve sales growth of approximately 9% for
the quarter. The Company anticipates second quarter earnings
per diluted share to be within a range of $0.16 to $0.18 compared
to $0.13 in the prior year period.
Mr. Humphreys continued, “Following the trend of
our first fiscal quarter, our gross margins meaningfully expanded
during our second fiscal quarter, despite some discrete costs that
we took in March related to the temporary closure of certain
manufacturing operations in countries where the government mandated
country-wide shutdowns. During the March quarter, we expensed
approximately $2 million in costs associated with these plant
curtailments, reducing our earnings by approximately $0.20 per
diluted share. Adjusting for these discrete expenses, our
earnings would have been in the range of $0.36 to $0.38 per diluted
share.”
The Company announced that it has taken
aggressive actions to strengthen its financial position, preserve
cash, and improve liquidity beyond its current levels. At the
end of March, Delta Apparel had approximately $30 million of
availability under its U.S. revolving credit facility and has
reached an agreement in principal with these lenders to secure
additional flexibility under the credit facility that should
support the business over the next six months.
Business Update Conference Call Details
– Today, April 17, 2020 at 8:30 a.m. ET Delta Apparel,
Inc. will hold a conference call with senior management today,
April 17, 2020 at 8:30 a.m. to provide additional information on
the business. The Company invites you to join the call by
dialing 888-220-8451. If calling from outside the United
States, please dial 323-794-2588. A live webcast of the
conference call will be available at www.deltaapparelinc.com.
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 April 30,
2020. 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 4776909.
Second Quarter Fiscal 2020 Earnings
Conference CallDelta Apparel, Inc. will release the
financial results for its fiscal 2020 second quarter ended March
28, 2020, after the market close on April 30, 2020. At 4:30
p.m. ET on that day, the Company will also hold a conference call
with senior management to discuss its financial results and
business outlook. The Company invites you to join the call by
dialing 800-458-4148. If calling from outside the United
States, please dial 323-794-2597. A live webcast of the
conference call will be available at www.deltaapparelinc.com.
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 May 30,
2020. 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 7621307.
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 www.saltlife.com, www.coastapparel.com,
www.soffe.com and www.deltaapparel.com 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 8,400 people worldwide. Additional
information about the Company is available at
www.deltaapparelinc.com.
Cautionary Note Regarding
Forward-Looking StatementsThis 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; the COVID-19 pandemic impact on
our operations, financial condition, liquidity, and capital
investments; 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;
the impairment of intangible assets; changes in international trade
regulations; our ability to comply with trade regulations; changes
in employment laws or regulations or our relationship with
employees; foreign currency exchange rate fluctuations; negative
publicity resulting from violations of manufacturing standards or
labor laws or unethical business practices by our suppliers and
independent contractors; the illiquidity of our shares; price
volatility in our shares and the general volatility of the stock
market; 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
x6620investor.relations@deltaapparel.com
Investor Relations and Media Contact: ICR, Inc.
Investors:Tom Filandro, 646-277-1235
Media:Jessica Liddell, 203-682-8208DLAPR@icrinc.com
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