Delta Apparel, Inc. (NYSE American: DLA), a leading provider of
core activewear and lifestyle apparel products, today announced
financial results for its third quarter and nine months ended June
27, 2020.
Robert W. Humphreys, the Company’s Chairman and
Chief Executive Officer, commented, “We are thrilled with the
momentum experienced across our business segments as the U.S.
economy and our customers re-opened for business. With net sales in
June tracking at nearly 90% of prior year levels and with further
acceleration in July, we are very encouraged by the steep recovery
in recent weeks that exceeded our internal expectations. Our DTG2Go
business onboarded several new customers and received additional
digital print volume from existing customers to deliver over 30%
net sales growth for the quarter compared to prior year. In
addition, our Catalog and Salt Life businesses returned to growth
in June.”
The Company recorded $23.1 million of
non-recurring expense associated with impacts from the COVID-19
pandemic during the June 2020 quarter. These costs primarily
related to the curtailment of manufacturing operations, incremental
costs to right size production to new forecasted demand, and
increased accounts receivable and inventory reserves related to the
heightened risks in the market as the U.S. continues its recovery.
These costs, of which approximately $11 million are non-cash
charges, primarily impacted operating income in the Delta Group
segment.
Mr. Humphreys continued, “As we previously
communicated, sales and liquidity improved each month as the
quarter progressed, enabling us to end the period in a much
stronger position than originally anticipated. During the quarter,
we generated over $32 million of operating cash flows and improved
our liquidity to $46 million, which is a nearly 50% increase from
the March levels.”
For the third quarter ended June 27, 2020:
- Net sales were $71.8 million, or approximately 60% of prior
year net sales of $119.3 million. Monthly sales performance
sequentially accelerated throughout the third quarter from April
sales at 33% of prior year levels to June sales at nearly 90% of
prior year levels. Net sales in the Delta Group segment and Salt
Life Group segment decreased 39.0% and 47.2%, respectively, from
the prior year period.
- Gross profit was $3.0 million, or 4.2% of net sales, compared
to $24.8 million, or 20.8% of net sales, in the prior year third
quarter. Adjusted gross margins in the current quarter were 21.6%,
an 80 basis point improvement over the prior year and attributable
to continued efficiencies and process improvements within the Delta
Group segment’s integrated vertical manufacturing
platform.
- Selling, general and administrative ("SG&A") expenses
declined 15.2% to $15.2 million compared to $17.9 million in the
prior year third quarter. As a percentage of sales, SG&A was
21.2%, compared to 15.0% in the prior year third quarter.
- The strong growth in the DTG2Go business drove an increase in
the fair value of the contingent earnout liability, resulting in an
additional $1.2 million expense within other income/loss.
- Operating loss was $21.6 million compared to operating profit
of $8.3 million in the prior year third quarter. Adjusted operating
income in the current fiscal year quarter was $1.5 million compared
to adjusted operating income of $7.0 million in the prior
year.
- The majority of the $23.1 million of COVID-19 related expenses
in the current quarter were incurred by the Delta Group segment
which reported a year over year decline in operating profit of
$26.7 million. Salt Life Group segment operating profit fell $1.9
million compared to the prior year third quarter, which was
adjusted for the discrete gain from the settlement of a commercial
litigation matter.
- Net loss for the quarter was $17.8 million, or $2.58 per share,
compared to net income of $4.9 million, or $0.70 per diluted share,
in the prior year period. Adjusted net loss per diluted share for
the third quarter fiscal 2020 was $0.01 compared to $0.60 of
adjusted net income per diluted share in the prior year.
Total inventory at June declined over 11% to
$158.0 million compared with $177.8 million a year ago primarily
driven by the curtailment of manufacturing operations and higher
than anticipated third quarter sales. Total net debt, including
capital lease financing and cash on hand, as of June 2020 was
$127.5 million, down $7.0 million from September 2019 and down
$21.5 million from a year ago. As previously announced, on
April 27, 2020, the Company secured a bridge amendment to its U.S.
revolving credit facility with its lenders. The amendment provides
additional flexibility to tap into the availability provided under
the Company’s asset-based lending arrangement.
Mr. Humphreys concluded, “I am very proud of our
teams and the resiliency Delta Apparel has shown over the past
months. With all of our manufacturing plants having resumed
production and brick and mortar stores returning to more normalized
operating hours, we continue to see positive trends that should
allow us to return to profitability in the fourth quarter.”
Conference CallThe 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 800-430-8332. If calling from
outside the United States, please dial 323-289-6581. 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 August 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 1181871.
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 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 8,700 people worldwide. Additional information about
the Company is available at www.deltaapparelinc.com.
Non-GAAP Financial MeasuresWe
provide all information required in accordance with U.S. GAAP, but
we believe that evaluating our ongoing operating results may be
difficult if limited to reviewing only U.S. GAAP financial
measures. In an effort to provide investors with additional
information regarding our results, we also provide non-GAAP
information that management believes is useful to investors. We
discuss gross margin, SG&A expenses, operating income, net
income and earnings per diluted share performance measures that
are, for comparison purposes, adjusted to eliminate items or
results stemming from discrete events. We do this because
management uses these measures in evaluating our underlying
performance on a consistent basis across periods. We also believe
these measures are frequently used by securities analysts,
investors and other interested parties in the evaluation of our
ongoing performance. These non-GAAP measures have limitations as
analytical tools, and securities analysts, investors and other
interested parties should not consider any of these non-GAAP
measures in isolation or as a substitute for analysis of our
results as reported under U.S. GAAP. These non-GAAP measures may
not be comparable to similarly titled measures used by other
companies.
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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|
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|
|
|
|
|
|
|
|
|
|
SELECTED FINANCIAL DATA: |
|
|
|
|
|
|
|
(In thousands, except per share amounts) |
|
|
|
|
|
|
|
|
|
Three Months
Ended |
|
Nine Months
Ended |
|
|
Jun 27, 2020 |
|
Jun 29, 2019 |
|
Jun 27, 2020 |
|
Jun 29, 2019 |
|
|
|
|
|
|
|
|
|
Net Sales |
$ |
71,801 |
|
|
$ |
119,260 |
|
|
$ |
264,351 |
|
|
$ |
323,773 |
|
Cost of Goods Sold |
|
68,819 |
|
|
|
94,470 |
|
|
|
220,893 |
|
|
|
261,505 |
|
Gross Profit |
|
2,982 |
|
|
|
24,790 |
|
|
|
43,458 |
|
|
|
62,268 |
|
|
|
|
|
|
|
|
|
|
Selling, General and Administrative Expenses |
|
15,206 |
|
|
|
17,931 |
|
|
|
51,130 |
|
|
|
51,771 |
|
Other (Income) Loss, Net |
|
9,364 |
|
|
|
(1,477 |
) |
|
|
7,724 |
|
|
|
(574 |
) |
Operating Income |
|
(21,588 |
) |
|
|
8,336 |
|
|
|
(15,396 |
) |
|
|
11,071 |
|
|
|
|
|
|
|
|
|
|
Interest Expense, Net |
|
1,710 |
|
|
|
1,989 |
|
|
|
5,320 |
|
|
|
5,739 |
|
|
|
|
|
|
|
|
|
|
Earnings (Loss) Before Provision For (Benefit From) Income
Taxes |
|
(23,298 |
) |
|
|
6,347 |
|
|
|
(20,716 |
) |
|
|
5,332 |
|
|
|
|
|
|
|
|
|
|
Provision For (Benefit From) Income Taxes |
|
(5,454 |
) |
|
|
1,510 |
|
|
|
(4,884 |
) |
|
|
896 |
|
|
|
|
|
|
|
|
|
|
Consolidated Net Earnings (Loss) |
|
(17,844 |
) |
|
|
4,837 |
|
|
|
(15,832 |
) |
|
|
4,436 |
|
|
|
|
|
|
|
|
|
|
Net Loss Attributable to Non-Controlling
Interest |
|
63 |
|
|
|
89 |
|
|
|
286 |
|
|
|
283 |
|
|
|
|
|
|
|
|
|
|
Net Earnings (Loss) Attributable to
Shareholders |
$ |
(17,781 |
) |
|
$ |
4,926 |
|
|
$ |
(15,546 |
) |
|
$ |
4,719 |
|
|
|
|
|
|
|
|
|
|
Weighted Average Shares Outstanding |
|
|
|
|
|
|
|
|
Basic |
|
6,890 |
|
|
|
6,928 |
|
|
|
6,932 |
|
|
|
6,931 |
|
|
Diluted |
|
6,890 |
|
|
|
7,080 |
|
|
|
6,932 |
|
|
|
7,065 |
|
|
|
|
|
|
|
|
|
|
Net Earnings (Loss) per Common Share |
|
|
|
|
|
|
|
|
Basic |
$ |
(2.58 |
) |
|
$ |
0.71 |
|
|
$ |
(2.24 |
) |
|
$ |
0.68 |
|
|
Diluted |
$ |
(2.58 |
) |
|
$ |
0.70 |
|
|
$ |
(2.24 |
) |
|
$ |
0.67 |
|
|
|
Jun 27,
2020 |
|
Sep 28,
2019 |
|
Jun 29,
2019 |
|
|
(Unaudited) |
|
(Audited) |
|
(Unaudited) |
|
|
|
|
|
|
|
Current Assets |
|
|
|
|
|
|
Cash |
$ |
14,520 |
|
|
$ |
605 |
|
|
$ |
371 |
|
|
Receivables, Net |
|
51,867 |
|
|
|
60,887 |
|
|
|
68,763 |
|
|
Inventories, Net |
|
158,015 |
|
|
|
179,107 |
|
|
|
177,779 |
|
|
Prepaids and Other Assets |
|
3,785 |
|
|
|
2,999 |
|
|
|
3,384 |
|
Total Current Assets |
|
228,187 |
|
|
|
243,598 |
|
|
|
250,297 |
|
|
|
|
|
|
|
|
Noncurrent Assets |
|
|
|
|
|
|
Property, Plant & Equipment, Net |
|
61,273 |
|
|
|
61,404 |
|
|
|
58,422 |
|
|
Goodwill and Other Intangibles, Net |
|
58,238 |
|
|
|
59,504 |
|
|
|
59,957 |
|
|
Deferred Income Taxes |
|
7,143 |
|
|
|
1,514 |
|
|
|
1,053 |
|
|
Operating Lease Assets |
|
42,920 |
|
|
|
- |
|
|
|
- |
|
|
Investment in Joint Venture |
|
10,273 |
|
|
|
10,388 |
|
|
|
10,038 |
|
|
Other Noncurrent Assets |
|
2,398 |
|
|
|
1,580 |
|
|
|
1,658 |
|
Total Noncurrent Assets |
|
182,245 |
|
|
|
134,390 |
|
|
|
131,128 |
|
|
|
|
|
|
|
|
Total Assets |
$ |
410,432 |
|
|
$ |
377,988 |
|
|
$ |
381,425 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current Liabilities |
|
|
|
|
|
|
Accounts Payable and Accrued Expenses |
$ |
73,931 |
|
|
$ |
73,111 |
|
|
$ |
65,662 |
|
|
Current Portion of Contingent Consideration |
|
2,685 |
|
|
|
2,790 |
|
|
|
2,790 |
|
|
Current Portion of Finance Leases |
|
7,099 |
|
|
|
6,434 |
|
|
|
6,084 |
|
|
Current Portion of Operating Leases |
|
8,720 |
|
|
|
- |
|
|
|
- |
|
|
Current Portion of Long-Term Debt |
|
8,046 |
|
|
|
6,540 |
|
|
|
7,040 |
|
Total Current Liabilities |
|
100,481 |
|
|
|
88,875 |
|
|
|
81,576 |
|
|
|
|
|
|
|
|
Noncurrent Liabilities |
|
|
|
|
|
|
Long-Term Taxes Payable |
|
3,585 |
|
|
|
3,977 |
|
|
|
3,492 |
|
|
Long-Term Contingent Consideration |
|
4,096 |
|
|
|
6,304 |
|
|
|
6,604 |
|
|
Long-Term Finance Leases |
|
12,934 |
|
|
|
12,836 |
|
|
|
13,012 |
|
|
Long-Term Operating Leases |
|
35,152 |
|
|
|
- |
|
|
|
- |
|
|
Long-Term Debt |
|
113,939 |
|
|
|
109,296 |
|
|
|
123,236 |
|
|
Deferred Income Taxes |
|
1,356 |
|
|
|
1,519 |
|
|
|
2,036 |
|
|
Other Noncurrent Liabilities |
|
2,379 |
|
|
|
1,293 |
|
|
|
1,184 |
|
Total Noncurrent Liabilities |
|
173,441 |
|
|
|
135,225 |
|
|
|
149,564 |
|
|
|
|
|
|
|
|
|
Common Stock |
|
96 |
|
|
|
96 |
|
|
|
96 |
|
|
Additional Paid-In Capital |
|
60,154 |
|
|
|
59,855 |
|
|
|
59,602 |
|
|
Equity Attributable to Non-Controlling
Interest |
|
(567 |
) |
|
|
(281 |
) |
|
|
(190 |
) |
|
Retained Earnings |
|
121,390 |
|
|
|
136,937 |
|
|
|
133,414 |
|
|
Accumulated Other Comprehensive (Loss) Income |
|
(1,430 |
) |
|
|
(969 |
) |
|
|
(887 |
) |
|
Treasury Stock |
|
(43,133 |
) |
|
|
(41,750 |
) |
|
|
(41,750 |
) |
Total Equity |
|
136,510 |
|
|
|
153,888 |
|
|
|
150,285 |
|
|
|
|
|
|
|
|
Total Liabilities and Equity |
$ |
410,432 |
|
|
$ |
377,988 |
|
|
$ |
381,425 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SELECTED FINANCIAL DATA: |
|
|
|
|
|
|
|
|
|
|
|
(In thousands, except per share amounts) |
For the Three Months Ended June 27, 2020 |
|
For the Three Months Ended June 29, 2019 |
|
|
GAAP Measure |
|
|
|
Non-GAAP Measure |
|
GAAP Measure |
|
|
|
Non-GAAP Measure |
|
|
Reported |
|
COVID-related expenses (1) |
|
Adjusted * |
|
Reported |
|
Ligitation Settlements (2) |
|
Adjusted * |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Sales |
$ |
71,801 |
|
|
$ |
500 |
|
|
$ |
72,301 |
|
|
$ |
119,260 |
|
|
$ |
- |
|
|
$ |
119,260 |
|
Cost of Goods Sold |
|
68,819 |
|
|
|
(12,100 |
) |
|
|
56,719 |
|
|
|
94,470 |
|
|
|
- |
|
|
|
94,470 |
|
Gross Profit |
|
2,982 |
|
|
|
12,600 |
|
|
|
15,582 |
|
|
|
24,790 |
|
|
|
- |
|
|
|
24,790 |
|
Gross Margins |
|
4.2 |
% |
|
|
17.5 |
% |
|
|
21.6 |
% |
|
|
20.8 |
% |
|
|
|
|
20.8 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, General and Administrative Expenses |
|
15,206 |
|
|
|
(2,400 |
) |
|
|
12,806 |
|
|
|
17,931 |
|
|
|
- |
|
|
|
17,931 |
|
Other (Income) Loss, Net |
|
9,364 |
|
|
|
(8,100 |
) |
|
|
1,264 |
|
|
|
(1,477 |
) |
|
|
1,306 |
|
|
|
(171 |
) |
Operating Income |
|
(21,588 |
) |
|
|
23,100 |
|
|
|
1,512 |
|
|
|
8,336 |
|
|
|
(1,306 |
) |
|
|
7,030 |
|
Operating Income Margins |
|
(30.1 |
%) |
|
|
32.2 |
% |
|
|
2.1 |
% |
|
|
7.0 |
% |
|
|
(1.1 |
%) |
|
|
5.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest Expense, Net |
|
1,710 |
|
|
|
- |
|
|
$ |
1,710 |
|
|
|
1,989 |
|
|
|
- |
|
|
|
1,989 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (Loss) Before Provision For (Benefit From) Income
Taxes |
|
(23,298 |
) |
|
|
23,100 |
|
|
|
(198 |
) |
|
|
6,347 |
|
|
|
(1,306 |
) |
|
|
5,041 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision For (Benefit From) Income Taxes |
|
(5,454 |
) |
|
|
5,378 |
|
|
$ |
(76 |
) |
|
|
1,510 |
|
|
|
(653 |
) |
|
|
857 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated Net Earnings (Loss) |
|
(17,844 |
) |
|
|
17,722 |
|
|
|
(122 |
) |
|
|
4,837 |
|
|
|
(653 |
) |
|
|
4,184 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Loss Attributable to Non-Controlling Interest |
|
63 |
|
|
|
- |
|
|
$ |
63 |
|
|
|
89 |
|
|
|
- |
|
|
|
89 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Earnings (Loss) Attributable to
Shareholders |
$ |
(17,781 |
) |
|
$ |
17,722 |
|
|
$ |
(59 |
) |
|
$ |
4,926 |
|
|
$ |
(653 |
) |
|
$ |
4,273 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted Net Earnings (Loss) per Common Share
** |
$ |
(2.58 |
) |
|
$ |
2.57 |
|
|
$ |
(0.01 |
) |
|
$ |
0.70 |
|
|
$ |
(0.10 |
) |
|
$ |
0.60 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Adjusted results are
financial measures that are not in accordance with GAAP and exclude
the above normalized adjustments. See below for a discussion of
each of these adjustments. |
** Adjustments and
adjusted earnings per share are calculated based on diluted
weighted average shares of 6,890 thousand shares for the three
months ended June 27, 2020 and 7,080 thousand shares for the three
months ended June 29, 2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Approximately
$23.1 million of expenses associated with the impacts from the
COVID-19 pandemic and primarily related to the curtailment of
manufacturing operations ($9.8 million), incremental costs to right
size production to new forecasted demand ($2.6 million), increased
accounts receivable and inventory reserves related to the
heightened risks in the market as the U.S. continues its recovery
($6.6 million), and other expenses ($4.1 million). |
|
|
|
|
|
|
|
|
|
|
|
|
|
(2) Approximately $1.3
million in other income as the result of a favorable litigation
settlement in the Salt Life Group segment in the third quarter
fiscal year 2019. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SELECTED FINANCIAL DATA: |
Delta Group segment |
|
Salt Life Group segment |
(In thousands, except per share amounts) |
For the Three Months Ended June 27, 2020 |
|
For the Three Months Ended June 27, 2020 |
|
|
GAAP Measure |
|
|
|
Non-GAAP Measure |
|
GAAP Measure |
|
|
|
Non-GAAP Measure |
|
|
Reported |
|
COVID-related expenses (1) |
|
Adjusted * |
|
Reported |
|
COVID-related expenses (1) |
|
Adjusted * |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Sales |
$ |
65,543 |
|
|
$ |
500 |
|
|
$ |
66,043 |
|
|
$ |
6,258 |
|
|
$ |
- |
|
|
$ |
6,258 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Profit |
|
432 |
|
|
|
12,600 |
|
|
|
13,032 |
|
|
|
2,552 |
|
|
|
- |
|
|
|
2,552 |
|
Gross Margins |
|
0.7 |
% |
|
|
19.2 |
% |
|
|
19.7 |
% |
|
|
40.8 |
% |
|
|
|
|
40.8 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income |
|
(17,468 |
) |
|
|
23,100 |
|
|
|
5,632 |
|
|
|
(628 |
) |
|
|
- |
|
|
|
(628 |
) |
Operating Income Margins |
|
(26.7 |
%) |
|
|
35.2 |
% |
|
|
8.5 |
% |
|
|
(10.0 |
%) |
|
|
|
|
(10.0 |
%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended June 29, 2019 |
|
For the Three Months Ended June 29, 2019 |
|
|
GAAP
Measure |
|
|
|
Non-GAAP
Measure |
|
GAAP
Measure |
|
|
|
Non-GAAP
Measure |
|
|
Reported |
|
Ligitation Settlements (2) |
|
Adjusted * |
|
Reported |
|
Ligitation Settlements (2) |
|
Adjusted * |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Sales |
$ |
107,409 |
|
|
$ |
- |
|
|
$ |
107,409 |
|
|
$ |
11,851 |
|
|
$ |
- |
|
|
$ |
11,851 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Profit |
|
19,181 |
|
|
|
- |
|
|
|
19,181 |
|
|
|
5,611 |
|
|
|
- |
|
|
|
5,611 |
|
Gross Margins |
|
17.9 |
% |
|
|
|
|
17.9 |
% |
|
|
47.3 |
% |
|
|
|
|
47.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income |
|
9,247 |
|
|
|
- |
|
|
|
9,247 |
|
|
|
2,597 |
|
|
|
(1,306 |
) |
|
|
1,291 |
|
Operating Income Margins |
|
8.6 |
% |
|
|
|
|
8.6 |
% |
|
|
21.9 |
% |
|
|
(11.0 |
%) |
|
|
10.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Adjusted results are
financial measures that are not in accordance with GAAP and exclude
the above normalized adjustments. See below for a discussion of
each of these adjustments. |
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Approximately
$23.1 million of expenses associated with the impacts from the
COVID-19 pandemic and primarily related to the curtailment of
manufacturing operations ($9.8 million), incremental costs to right
size production to new forecasted demand ($2.6 million), increased
accounts receivable and inventory reserves related to the
heightened risks in the market as the U.S. continues its recovery
($6.6 million), and other expenses ($4.1 million). |
|
|
|
|
|
|
|
|
|
|
|
|
|
(2) Approximately $1.3
million in other income as the result of a favorable litigation
settlement in the Salt Life Group segment in the third quarter
fiscal year 2019. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SELECTED FINANCIAL DATA: |
|
|
|
|
|
|
|
|
|
|
|
(In thousands, except per share amounts) |
For the Nine Months Ended June 27, 2020 |
|
For the Nine Months Ended June 29, 2019 |
|
|
GAAP Measure |
|
|
|
Non-GAAP Measure |
|
GAAP Measure |
|
|
|
Non-GAAP Measure |
|
|
Reported |
|
COVID-related expenses (1) |
|
Adjusted * |
|
Reported |
|
Ligitation Settlements (2) |
|
Adjusted * |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Sales |
$ |
264,351 |
|
|
$ |
500 |
|
|
$ |
264,851 |
|
|
$ |
323,773 |
|
|
$ |
- |
|
|
$ |
323,773 |
|
Cost of Goods Sold |
|
220,893 |
|
|
|
(14,000 |
) |
|
|
206,893 |
|
|
|
261,505 |
|
|
|
- |
|
|
|
261,505 |
|
Gross Profit |
|
43,458 |
|
|
|
14,500 |
|
|
|
57,958 |
|
|
|
62,268 |
|
|
|
- |
|
|
|
62,268 |
|
Gross Margins |
|
16.4 |
% |
|
|
5.5 |
% |
|
|
21.9 |
% |
|
|
19.2 |
% |
|
|
|
|
19.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, General and Administrative Expenses |
|
51,130 |
|
|
|
(2,400 |
) |
|
|
48,730 |
|
|
|
51,771 |
|
|
|
- |
|
|
|
51,771 |
|
Other (Income) Loss, Net |
|
7,724 |
|
|
|
(8,100 |
) |
|
|
(376 |
) |
|
|
(574 |
) |
|
|
(1,158 |
) |
|
|
(1,732 |
) |
Operating Income |
|
(15,396 |
) |
|
|
25,000 |
|
|
|
9,604 |
|
|
|
11,071 |
|
|
|
1,158 |
|
|
|
12,229 |
|
Operating Income Margins |
|
(5.8 |
%) |
|
|
9.5 |
% |
|
|
3.6 |
% |
|
|
3.4 |
% |
|
|
0.4 |
% |
|
|
3.8 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest Expense, Net |
|
5,320 |
|
|
|
- |
|
|
|
5,320 |
|
|
|
5,739 |
|
|
|
- |
|
|
|
5,739 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (Loss) Before Provision For (Benefit From) Income
Taxes |
|
(20,716 |
) |
|
|
25,000 |
|
|
|
4,284 |
|
|
|
5,332 |
|
|
|
1,158 |
|
|
|
6,490 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision For (Benefit From) Income Taxes |
|
(4,884 |
) |
|
|
5,820 |
|
|
|
936 |
|
|
|
896 |
|
|
|
294 |
|
|
|
1,190 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated Net Earnings (Loss) |
|
(15,832 |
) |
|
|
19,180 |
|
|
|
3,348 |
|
|
|
4,436 |
|
|
|
864 |
|
|
|
5,300 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Loss Attributable to Non-Controlling Interest |
|
286 |
|
|
|
- |
|
|
|
286 |
|
|
|
283 |
|
|
|
- |
|
|
|
283 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Earnings (Loss) Attributable to
Shareholders |
$ |
(15,546 |
) |
|
$ |
19,180 |
|
|
$ |
3,634 |
|
|
$ |
4,719 |
|
|
$ |
864 |
|
|
$ |
5,583 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted Net Earnings (Loss) per Common Share
** |
$ |
(2.24 |
) |
|
$ |
2.77 |
|
|
$ |
0.52 |
|
|
$ |
0.67 |
|
|
$ |
0.12 |
|
|
$ |
0.79 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Adjusted results are
financial measures that are not in accordance with GAAP and exclude
the above normalized adjustments. See below for a discussion of
each of these adjustments. |
** Adjustments and
adjusted earnings per share are calculated based on diluted
weighted average shares of 6,932 thousand shares for the nine
months ended June 27, 2020 and 7,065 thousand shares for the nine
months ended June 29, 2019. |
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Approximately
$25.0 million of expenses associated with the impacts from the
COVID-19 pandemic and primarily related to the curtailment of
manufacturing operations ($11.7 million), incremental costs to
right size production to new forecasted demand ($2.6 million),
increased accounts receivable and inventory reserves related to the
heightened risks in the market as the U.S. continues its recovery
($6.6 million), and other expenses ($4.1 million). |
(2) Approximately $2.5
million of unfavorable litigation settlement due to the bankruptcy
of a customer in the Delta Group segment in the first quarter
fiscal year 2019, partially offset by approximately $1.3 million in
other income as the result of a favorable litigation settlement in
the Salt Life Group segment in the third quarter fiscal year
2019. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SELECTED FINANCIAL DATA: |
Delta Group segment |
|
Salt Life Group segment |
(In thousands, except per share amounts) |
For the Nine Months Ended June 27, 2020 |
|
For the Nine Months Ended June 27, 2020 |
|
|
GAAP Measure |
|
|
|
Non-GAAP Measure |
|
GAAP Measure |
|
|
|
Non-GAAP Measure |
|
|
Reported |
|
COVID-related expenses (1) |
|
Adjusted * |
|
Reported |
|
COVID-related expenses (1) |
|
Adjusted * |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Sales |
$ |
238,685 |
|
|
$ |
500 |
|
|
$ |
239,185 |
|
|
$ |
25,666 |
|
|
$ |
- |
|
|
$ |
25,666 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Profit |
|
31,948 |
|
|
|
14,500 |
|
|
|
46,448 |
|
|
|
11,517 |
|
|
|
- |
|
|
|
11,517 |
|
Gross Margins |
|
13.4 |
% |
|
|
6.1 |
% |
|
|
19.4 |
% |
|
|
44.9 |
% |
|
|
|
|
44.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating (loss) Income |
|
(5,133 |
) |
|
|
25,000 |
|
|
|
19,867 |
|
|
|
175 |
|
|
|
- |
|
|
|
175 |
|
Operating Income Margins |
|
(2.2 |
%) |
|
|
10.5 |
% |
|
|
8.3 |
% |
|
|
0.7 |
% |
|
|
|
|
0.7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Delta Group segment |
|
Salt Life Group segment |
|
|
For the Nine Months Ended June 29, 2019 |
|
For the Nine Months Ended June 29, 2019 |
|
|
GAAP Measure |
|
|
|
Non-GAAP Measure |
|
GAAP Measure |
|
|
|
Non-GAAP Measure |
|
|
Reported |
|
Ligitation Settlements (2) |
|
Adjusted * |
|
Reported |
|
Ligitation Settlements (2) |
|
Adjusted * |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Sales |
$ |
291,325 |
|
|
$ |
- |
|
|
$ |
291,325 |
|
|
$ |
32,448 |
|
|
$ |
- |
|
|
$ |
32,448 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Profit |
|
46,696 |
|
|
|
- |
|
|
|
46,696 |
|
|
|
15,579 |
|
|
|
- |
|
|
|
15,579 |
|
Gross Margins |
|
16.0 |
% |
|
|
|
|
16.0 |
% |
|
|
48.0 |
% |
|
|
|
|
48.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income |
|
15,392 |
|
|
|
2,464 |
|
|
|
17,856 |
|
|
|
5,609 |
|
|
|
(1,306 |
) |
|
|
4,303 |
|
Operating Income Margins |
|
5.3 |
% |
|
|
0.8 |
% |
|
|
6.1 |
% |
|
|
17.3 |
% |
|
|
(4.0 |
%) |
|
|
13.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Adjusted results are
financial measures that are not in accordance with GAAP and exclude
the above normalized adjustments. See below for a discussion of
each of these adjustments. |
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Approximately
$25.0 million of expenses associated with the impacts from the
COVID-19 pandemic and primarily related to the curtailment of
manufacturing operations ($11.7 million), incremental costs to
right size production to new forecasted demand ($2.6 million),
increased accounts receivable and inventory reserves related to the
heightened risks in the market as the U.S. continues its recovery
($6.6 million), and other expenses ($4.1 million). |
(2) Approximately $2.5
million of unfavorable litigation settlement due to the bankruptcy
of a customer in the Delta Group segment in the first quarter
fiscal year 2019, partially offset by approximately $1.3 million in
other income as the result of a favorable litigation settlement in
the Salt Life Group segment in the third quarter fiscal year
2019. |
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