Note J—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 the following business
units, which are primarily focused on core activewear styles:
DTG2Go and Delta Activewear.
DTG2Go is a
market leader in the
on-demand, direct-to-garment digital print
and fulfillment industry,
bringing technology and innovation
to the supply
chains of our
many customers. Our ‘On-Demand DC’ digital solution provides retailers
and brands with immediate access to utilize DTG2Go’s broad network of print and fulfillment
facilities, while offering
the scalability to integrate
digital fulfillment within the
customer's own distribution facilities.
We use
highly-automated factory processes and
our proprietary software to deliver on-demand,
digitally printed apparel direct to
consumers on behalf of our customers.
Via our multi-facility fulfillment footprint across
the United States, DTG2Go offers
a robust digital supply chain
shipping custom graphic products
within 24 to 48 hours
to consumers in the United
States and to over
100
countries worldwide. DTG2Go has made significant investments in its “digital first” retail model providing digital graphic prints that meet the high-quality standards of
brands, retailers and intellectual property holders.
Through integration with Delta Activewear, DTG2Go also services
the eRetailer, ad-specialty, promotional and screen
print marketplaces, among others.
Delta Activewear is a preferred supplier of
activewear apparel to regional and global
brands as well as direct to retail and
wholesale markets. The Activewear business
is
organized around three key customer
channels – Delta Direct, Global
Brands, and Retail Direct –
that are distinct in their
go-to-market strategies and how
their respective
customer bases
source their
various apparel
needs. Our
Delta Direct
channel services
the screen
print, promotional,
and eRetailer
markets as
well as
retail licensing
customers that sell through to many mid-tier and mass market retailers. Delta Direct products include a broad portfolio of apparel and accessories under the Delta, Delta
Platinum, and Soffe
brands as well
as sourced
items from
select third
party brands.
Our fashion
basics line
includes our Platinum
Collection, which
offers fresh, fashionable
silhouettes with a luxurious look and feel,
as well as versatile fleece offerings.
We offer innovative
apparel products, including the Delta Dri line of
performance shirts
built with moisture-wicking material
to keep athletes dry
and comfortable; ringspun
garments with superior
comfort, style and durability;
and Delta Soft, a
collection with
an incredible feel and price. We also offer our heritage, mid-
and heavier-weight Delta Pro Weight® and Magnum Weight® tee shirts.
The iconic Soffe brand offers activewear for spirit
makers and record breakers and
is widely known for the original "cheer
short" with the signature roll-down waistband.
Soffe carries a wide range of activewear for the entire family. Soffe's heritage is anchored in the military, and we continue to be a proud supplier to both active duty and
veteran United States
military personnel worldwide.
The Soffe men's assortment
features the tagline
"anchored in the military, grounded
in training" and
offers everything
from physical training
gear certified by
the respective branches of
the military,
classic base layers
that include the
favored 3-pack tees,
and the iconic
"ranger panty."
Complementing the Delta and Soffe
brand apparel, we offer
customers a broad range of
nationally recognized branded products including polos,
outerwear, headwear,
bags and other accessories. Our Soffe products are also available
direct to consumers at
www.soffe.com
Our Global
Brands channel
serves as a
key supply chain
partner to
large multi-national
brands, major branded
sportswear companies, trendy
regional brands, and
all
branches of the United States armed forces,
providing services ranging from custom product development
to the shipment of branded products with “retail-ready”
value-
added services including embellishment, hangtags, and
ticketing.
Our Retail Direct
channel serves brick
and mortar and
online retailers by
providing our portfolio
of Delta, Delta
Platinum, and
Soffe products directly
to the retail
locations
and
ecommerce fulfillment
centers of
a
diversified customer
base including
sporting goods
and
outdoor retailers,
specialty and
resort shops,
farm and
fleet
stores,
department stores, and
mid-tier and mass
retailers. As a
key element of
the integrated Delta
Group segment, each
of Activewear’s
primary channels offer
a seamless
solution for replenishment strategies, small-run decoration
needs, and quick reaction programs with on-demand digital
print services, powered by DTG2Go.
The Salt Life Group is
comprised of our Salt Life business, which
is built on the authentic, aspirational Salt Life
lifestyle brand that represents a passion for
the ocean,
the salt air, and, more importantly, a way of life and all it offers, from surfing, fishing, and diving to beach fun and sun-soaked relaxation. The Salt Life brand combines
function and fashion with a tailored fit for the active lifestyles of those that “live the Salt Life.” With increased worldwide appeal, Salt Life has continued to provide the
cotton graphic tees and logo decals that originally
drove awareness for the brand, and expanded
into performance apparel, swimwear, board shorts, sunglasses, bags,
and
accessories. Consumers can also seamlessly experience the Salt Life
brand through retail partners including surf shops, specialty stores,
department stores, and outdoor
merchants or by accessing our Salt Life ecommerce site
at
www.saltlife.com
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 in
our Annual
Report on
Form 10-K
for fiscal
2022, filed
with the
SEC.
Intercompany transfers
between operating
segments are
transacted
at
cost and
have been
eliminated within
the
segment amounts
shown in
the
following table
(in
thousands).
Three Months Ended
December 2022
December 2021
Segment operating earnings
$
341
$
8,594
Unallocated corporate expenses
2,967
2,678
Unallocated interest expense
2,890
1,598
Consolidated (loss) income before provision for income taxes
$
(5,516)
$
4,318