Delta Apparel, Inc. (NYSE MKT: DLA) today announced plans to consolidate its domestic screen print operations as part of its continued focus on more efficient manufacturing and distribution strategies. The consolidation will result in the closing of the Wendell, North Carolina decoration facility operated by the Company's Soffe business unit and the consolidation of those operations within Soffe's Fayetteville, North Carolina facility.
Bob Humphreys, Chairman and Chief Executive Officer, commented, “These decisions are never easy, especially when they affect associates who have been dedicated and loyal to our Company. However, as our business becomes increasingly competitive, we can no longer justify the additional cost associated with operating two U.S. decoration facilities. We believe this economic decision is in the best long-term interest of Delta Apparel and our shareholders.”
The consolidation will begin immediately and is scheduled to be completed in the first quarter of fiscal year 2014. The Company expects to realize annual savings of approximately $1.5 million once the consolidation is complete. The aggregate costs associated with this transition are expected to be approximately $1.5 million, of which $0.4 million is being expensed in the Company’s fiscal year 2013 fourth quarter and the remainder in the fiscal year 2014 first quarter.
The closing of the Wendell facility will impact the employment of 135 associates. Soffe's Fayetteville facility will continue to employ approximately 500 associates in various capacities including sewing, screen printing, retail packaging, distribution, and product and art development, and will continue to house Soffe's sales and administrative functions. Associates impacted by the closing will be considered for open positions in these areas as well as transfer opportunities to other Delta Apparel facilities.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. 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.
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