Delta Apparel Reports Fiscal 2016 Fourth Quarter And Year-End Results

GREENVILLE, S.C., Nov. 29, 2016 (GLOBE NEWSWIRE) -- Delta Apparel, Inc. (NYSE MKT:DLA) today reported that all of its businesses, with the exception of Junkfood, experienced sales growth during the fourth quarter ended October 1, 2016. For comparison purposes, the 2016 fourth quarter comprised 13 weeks while the prior year fourth quarter included an additional 14 th week because fiscal year 2015 was a 53-week year.  Net sales for the 13-week fiscal 2016 fourth quarter were $114.4 million, compared to $120.2 million in the prior year's 14-week fourth quarter.  Removing the additional week in the prior year, net sales in the fiscal 2016 fourth quarter exceeded those in the comparable 2015 period by 2.5%.

While 2016 fourth quarter operating margins were on par with the prior year quarter, earnings were impacted by costs associated with the recently completed manufacturing realignment that reduced 2016 fourth quarter earnings by $0.11 per diluted share, to the reported $0.29 per diluted share.  Excluding these costs, fourth quarter 2016 earnings were $0.40 per diluted share.  In comparison to the prior year quarter's reported earnings of $0.53 per diluted share, current quarter earnings are hindered by the approximately $0.15 impact of this quarter's shorter sales period and tax expense versus the prior year quarter's additional week of sales and tax benefit. 

Gross margins for the fourth quarter were 20.9% compared to 21.9% in the prior year quarter; however, the current year includes costs associated with the Company's manufacturing realignment, which lowered gross margins by 80 basis points.  Gross margins, excluding the $0.9 million in manufacturing realignment costs included in cost of goods sold, expanded in both the Company's basics and branded segments.  A shift to a higher mix of basics sales resulted in the slight decline in margins overall for the quarter.  The Company achieved gross margin expansion throughout fiscal year 2016 and anticipates this trend to continue and strengthen in fiscal year 2017, as the benefits from the completed manufacturing realignment are realized.    

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