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Delta Apparel Reports FY12 Third Quarter And YTD Results

Fiscal 2012 Guidance

Due to the effect of the lower than anticipated revenue as well as the additional costs incurred, the Company has further adjusted its outlook for sales and earnings. For the fiscal year ending June 30, 2012, the Company anticipates net sales to be in the $475 to $485 million range and a loss for the year of $0.15 to $0.20 per diluted share. While fiscal year 2012 results have been hindered by the turmoil in the marketplace resulting from the unprecedented high cost cotton in 2011, the Company anticipates performance trends in fiscal year 2013 similar to those experienced prior to fiscal year 2012.

Conference Call

The Company will hold a conference call with senior management to discuss the financial results at 4:30 p.m. ET today. The Company invites you to join the call by dialing 888-481-2862. If calling from outside the United States, dial 719-325-2354. Use confirmation number 8430390. 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 26, 2012. To access the telephone replay, participants should dial toll-free 877-870-5176. International callers can dial 858-384-5517. The access code for the replay is 8430390.

About Delta Apparel, Inc.

Delta Apparel, Inc., along with its operating subsidiaries, M. J. Soffe, LLC, Junkfood Clothing Company, To The Game, LLC and Art Gun, LLC, is an international design, marketing, manufacturing, and sourcing company that features a diverse portfolio of lifestyle branded activewear apparel and headwear, and produces high quality private label programs. The Company specializes in selling casual and athletic products across distribution tiers and in most store types, including specialty stores, boutiques, department stores, mid-tier and mass chains. From a niche distribution standpoint, the Company also has strong distribution at college bookstores and the U.S. military. The Company’s products are made available direct-to-consumer on its websites at www.soffe.com, www.junkfoodclothing.com, www.saltlife.com and www.deltaapparel.com. Additional products can be viewed at www.2thegame.com and www.thecottonexchange.com. The Company's operations are located throughout the United States, Honduras, El Salvador, and Mexico, and it employs approximately 7,200 people worldwide. Additional information about the Company is available at www.deltaapparelinc.com.

Statements and other information in this press release that are not reported financial results or other historical information are forward-looking statements subject to the safe harbor created by the Private Securities Litigation Reform Act of 1995. These are based on our expectations and are necessarily dependent upon assumptions, estimates and data that we believe are reasonable and accurate but may be incorrect, incomplete or imprecise. Forward-looking statements are also subject to a number of business risks and uncertainties, any of which could cause actual results to differ materially from those set forth in or implied by the forward-looking statements. The risks and uncertainties include, among others, the general U.S. and international economic conditions; the ability to grow, achieve synergies and realize the expected profitability of recent acquisitions; the volatility and uncertainty of raw material, transportation and energy prices and the availability of these products and services; changes in consumer confidence, consumer spending, and demand for apparel products; the ability of our brands and products to meet consumer preferences within the prevailing retail environment; significant interruptions in our distribution network or information systems; the financial difficulties encountered by our customers and higher credit risk exposure; the competitive conditions in the apparel and textile industries; changes in environmental, tax, trade, employment and other laws and regulations; changes in the economic, political and social stability of our offshore locations; significant litigation in either domestic or international jurisdictions, the relative strength of the United States dollar as against other currencies; and other risks described from time to time in our reports filed with the Securities and Exchange Commission. Accordingly, any forward-looking statements do not purport to be predictions of future events or circumstances and may not be realized. Further, any forward-looking statements are made only as of the date of this press release and we do not undertake publicly to update or revise the forward-looking statements even if it becomes clear that any projected results will not be realized.

Selected Financial Data To Follow

Consolidated Income Statements:
(In thousands, except per share amounts)
  Three Months Ended   Nine Months Ended
March 31, 2012   April 2, 2011 March 31, 2012   April 2, 2011
 
Net Sales $ 125,541 $ 124,954 $ 354,550 $ 337,592
Cost of Goods Sold   100,350     94,092   297,963     258,943  
Gross Profit 25,191 30,862 56,587 78,649
 
Selling, General and Administrative 22,256 22,706 67,001 65,676
Change in Fair Value of Contingent Consideration - - - (1,530 )
Goodwill Impairment Charge - - - 612
Other Expense, Net   79     29   19     180  
Operating Income 2,856 8,127 (10,433 ) 13,711
 
Interest Expense, Net   1,017     627   2,901     1,828  
 
Income (Loss) Before Provision for Income Taxes 1,839 7,500 (13,334 ) 11,883
 
(Benefit) Provision for Income Taxes   (80 )   1,775   (6,076 )   3,089  
 
Net Income (Loss) $ 1,919   $ 5,725 $ (7,258 ) $ 8,794  
 
Weighted Average Shares Outstanding
Basic 8,450 8,490 8,455 8,505
Diluted 8,786 8,739 8,455 8,752
 
Net Income (Loss) per Common Share
Basic $ 0.23 $ 0.67 $ (0.86 ) $ 1.03
Diluted $ 0.22 $ 0.65 $ (0.86 ) $ 1.00

Consolidated Balance Sheets:

(In thousands)        
 
March 31, 2012 July 2, 2011 April 2, 2011
 
Current Assets
Cash $ 565 $ 656 $ 632
Receivables, Net 73,704 76,821 72,877
Inventories, Net 180,007 159,209 152,340
Income Taxes Receivable 2,678 - -
Deferred Income Taxes 8,973 2,931 3,247
Other Assets   4,545   4,059   4,530
Total Current Assets 270,472 243,676 233,626
 
Noncurrent Assets
Property, Plant & Equipment, Net 39,811 39,756 39,516
Goodwill and Other Intangibles, Net 23,761 24,217 24,369
Other Noncurrent Assets   3,834   4,216   3,015
Total Noncurrent Assets 67,406 68,189 66,900
     
Total Assets $ 337,878 $ 311,865 $ 300,526
 
 
Current Liabilities
Accounts Payable and Accrued Expenses $ 67,468 $ 79,262 $ 67,690
Income Tax Payable - 969 517
Current Portion of Long-Term Debt   3,529   2,799   2,333
Total Current Liabilities 70,997 83,030 70,540
 
Noncurrent Liabilities
Long-Term Debt 129,085 83,974 93,426
Deferred Income Taxes 3,547 2,877 2,504
Other Noncurrent Liabilities   219   19   29
Total Noncurrent Liabilities 132,851 86,870 95,959
 
Shareholders' Equity 134,030 141,965 134,027
     
Total Liabilities and Shareholders' Equity $ 337,878 $ 311,865 $ 300,526




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