Annual report pursuant to Section 13 and 15(d)

Note 13 - Business Segments

v3.19.3
Note 13 - Business Segments
12 Months Ended
Sep. 28, 2019
Notes to Financial Statements  
Segment Reporting Disclosure [Text Block]
Note 
13—Business
Segments
 
Our operations are managed and reported in
two
segments, Delta Group and Salt Life Group, which reflect the manner in which the business is managed and results are reviewed by the Chief Executive Officer, who is our chief operating decision maker. 
 
The Delta Group is comprised of our business units primarily focused on core activewear styles, and includes our Delta Activewear (encompassing our core Delta Catalog business and FunTees private label business), Soffe, and
DTG2Go
business units. We market, distribute and manufacture unembellished knit apparel under the main brands of Soffe®, Delta Platinum, Delta Pro Weight
®
, and Delta Magnum Weight
®
for sale to a diversified audience ranging from large licensed screen printers to small independent businesses. We also manufacture private label products for major branded sportswear companies, trendy regional brands, retailers, and sports licensed apparel marketers. Typically, our private label products are sold with value-added services such as hangtags, ticketing, hangers, and embellishment so that they are fully ready for retail. Using digital print equipment and its proprietary technology,
DTG2Go
embellishes garments to create private label, custom decorated apparel servicing the fast-growing e-retailer channels, as well as the ad-specialty, promotional products and retail marketplaces
 
The Salt Life Group is comprised of our lifestyle brands focused on a broad range of apparel garments, headwear and related accessories to meet consumer preferences and fashion trends, and includes our Salt Life and Coast business units.  These products are sold through specialty and boutique shops, traditional department stores, and outdoor retailers, as well as direct-to-consumer through branded ecommerce sites and branded retail stores. Products in this segment are marketed under our lifestyle brands of Salt Life® and COAST®, as well as other labels. 
 
Our Chief Operating Decision Maker and management evaluate performance and allocate resources based on profit or loss from operations before interest, income taxes and special charges ("segment operating earnings"). Our segment operating earnings
may
not
be comparable to similarly titled measures used by other companies. The accounting policies of our reportable segments are the same as those described in Note
2.
  Intercompany transfers between operating segments are transacted at cost and have been eliminated within the segment amounts shown in the following table (in thousands).
 
   
Fiscal Year Ended
 
   
September 28, 2019
   
September 29, 2018
 
Segment net sales:
     
 
     
 
Delta Group
  $
389,075
    $
356,009
 
Salt Life Group
   
42,655
     
39,441
 
Total net sales
  $
431,730
    $
395,450
 
                 
Segment operating income:
     
 
     
 
Delta Group
  $
23,780
    $
26,091
 
Salt Life Group
   
6,160
     
4,747
 
Total segment operating income
  $
29,940
    $
30,838
 
                 
Purchases of property, plant and equipment:
     
 
     
 
Delta Group
  $
4,861
    $
4,341
 
Salt Life Group
   
1,202
     
917
 
Corporate
   
     
511
 
Total purchases of property, plant and equipment
  $
6,063
    $
5,769
 
                 
Depreciation and amortization:
     
 
     
 
Delta Group
  $
9,889
    $
8,090
 
Salt Life Group
   
1,522
     
1,456
 
Corporate
   
353
     
442
 
Total depreciation and amortization
  $
11,764
    $
9,988
 
 
The following reconciles the segment operating income to the consolidated income before provision for income taxes (in thousands):
 
   
Fiscal Year Ended
 
   
September 28, 2019
   
September 29, 2018
 
Segment operating income
  $
29,940
    $
30,838
 
Loss attributable to non-controlling interest
   
374
     
107
 
Unallocated corporate expenses
   
13,671
     
13,328
 
Unallocated interest expense
   
7,550
     
5,713
 
Consolidated income before provision for income taxes
  $
8,345
    $
11,690
 
 
Our revenues include sales to domestic and foreign customers.  Foreign customers are composed of companies whose headquarters are located outside of the United States.  Supplemental information regarding our revenues by geographic area based on the location of the customer is as follows (in thousands):
 
   
Fiscal Year Ended
 
   
September 28, 2019
   
September 29, 2018
 
United States
  $
431,082
    $
394,252
 
Foreign
   
648
     
1,198
 
Total net sales
  $
431,730
    $
395,450
 
 
Our total assets and equity investment by segment are as follows (in thousands):
 
   
As of
 
   
September 28, 2019
   
September 29, 2018
 
Total assets by segment:
     
 
     
 
Delta Group
  $
315,653
    $
283,811
 
Salt Life Group
   
57,574
     
55,032
 
Corporate
   
4,761
     
4,766
 
Total assets
  $
377,988
    $
343,609
 
                 
Equity investment in joint venture:
     
 
     
 
Delta Group
  $
10,388
    $
8,980
 
Salt Life Group
   
     
 
Total equity investment in joint venture
  $
10,388
    $
8,980
 
 
We attribute our property, plant and equipment to a particular country based on the location of these assets.  Summarized financial information by geographic area is as follows (in thousands):
 
   
As of
 
   
September 28, 2019
   
September 29, 2018
 
                 
United States
  $
41,620
    $
30,768
 
                 
Honduras
   
15,326
     
16,823
 
El Salvador
   
3,209
     
3,476
 
Mexico
   
1,249
     
1,047
 
All foreign countries
   
19,784
     
21,346
 
                 
Total property, plant and equipment, net
  $
61,404
    $
52,114