Delta Apparel, Inc. (NYSE Amex: DLA) today reported financial results for its fourth quarter and fiscal year ended July 2, 2011.
Fourth Quarter Highlights
Fiscal 2011 Highlights
- Net sales increased 9.1% to a record $137.6 million from $126.2 in the prior year period
- Gross margins improved 340 basis points to 27.3%
- Net income increased 50.6% to $8.5 million from $5.7 million in the prior year
- Diluted EPS increased 51.6% to $0.97 from $0.64 in the prior year period
- Net sales increased 12.0% to a record $475.2 million from $424.4 million in the prior year
- Gross margins improved 80 basis points to 24.5%
- Net income increased 42.2% to $17.3 million from $12.2 million in fiscal year 2010
- Diluted EPS increased 41.4% to $1.98 compared to $1.40 last fiscal year
Robert W. Humphreys, Chairman and Chief Executive Officer, commented, “Fiscal year 2011 was exciting for us at Delta Apparel, Inc. and we are proud of our many accomplishments. Despite less than ideal market conditions, we achieved our eighth consecutive year of record sales, driven by organic sales growth, the acquisition of The Cotton Exchange and new license agreements. We continued to penetrate new markets and reach more consumers with our lifestyle branded activewear apparel and headwear. Having a vertically integrated, flexible manufacturing platform allows us to leverage our scale efficiencies while providing consistently high-quality products and reliable service to our customers.”
Branded Segment Review
Branded segment sales for the fourth quarter were $60.6 million, a 12.6% increase from the prior year fourth quarter sales of $53.8 million. Additional revenue from The Cotton Exchange, the college bookstore of division of Soffe, contributed to the sales growth, along with strong sales from the Salt Life® collection and higher sales of vintage inspired Junk Food® products. For the full year, sales of branded products grew 12.1% to $221.7 million, representing approximately 47% of total revenues. The segment had organic sales growth of 1.6% driven by mid-single digit sales growth in our activewear apparel and headwear brands, partially offset by sales declines of Junk Food® products. After achieving sales growth of over 40% in the prior year, revenue declined approximately 20% in the Junkfood business in fiscal year 2011 as it cycled the rollout of significant programs from the prior year. This decline, coupled with additional marketing and operational expenses associated with Salt Life® and the digital printing business, drove a decrease in operating income to $2.8 million in the fourth quarter of fiscal year 2011 compared to $5.5 million for the same period last year, and operating income of $8.4 million for the full fiscal year compared to $17.3 million in the fiscal year 2010.