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Subsequent Events
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12 Months Ended |
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Jun. 29, 2013
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| Subsequent Events [Abstract] | |
| Subsequent Events |
SUBSEQUENT EVENTS
Acquisition of Salt Life Assets
On August 27, 2013, To The Game, LLC, our wholly-owned subsidiary, purchased substantially all of the assets of Salt Life Holdings, LLC, including all of its domestic and international trademark rights in the Salt Life brand (the "Salt Life Acquisition"), pursuant to an agreement entered into as of the same date (the "Asset Purchase Agreement"). The Salt Life Acquisition continues our strategy of building lifestyle brands. The purchase price for the Salt Life Transaction consists of $15.0 million in cash, $3.0 million of which was deposited into an escrow account to be held to secure indemnification obligations under the Asset Purchase Agreement, two promissory notes in the aggregate principal amount of $22 million, and a payment contingent on certain performance targets being met with respect to the sale of Salt Life products in calendar 2019. Due to the timing of the acquisition and the issuance of financial statements, management is still in the process of gathering information for the completion of the valuation of the acquired assets for the purchase price allocation and related disclosures. The next quarterly report will have all relevant information. We financed the cash portion of the purchase price through the below-referenced Amended Loan Agreement.
The foregoing summary of the Salt Life Acquisition is qualified in its entirety by reference to the text of the Asset Purchase Agreement, which was filed as Exhibit 2.1 to the Current Report on Form 8-K filed on August 29, 2013.
Amended Loan Agreement
On August 27, 2013, Delta Apparel, To The Game, Junkfood, Soffe, and Art Gun entered into a Consent and First Amendment to the Fourth Amended and Restated Loan and Security Agreement with Wells Fargo Bank, National Association and the other lenders set forth therein (the “Amended Loan Agreement”). The Fourth Amended and Restated Loan and Security Agreement dated as of May 27, 2011, which was amended by the Amended Loan Agreement, was filed as Exhibit 10.1 to a Current Report on Form 8-K filed with the SEC on June 3, 2011.
Pursuant to the Amended Loan Agreement, in general and among other things, (1) the lenders and agent parties consented to the Salt Life Acquisition, (2) the maturity of the loans (other than the FILO Tranche B, as defined below) under the Amended Loan Agreement was extended one year to May 27, 2017, (3) the lenders consented to Delta Apparel's Honduran subsidiaries borrowing up to $10,000,000 from a certain Honduran bank in connection with the purchase of certain equipment, and (4) a first in last out Tranche B (“FILO Tranche B”) was added to provide Delta Apparel and its affiliate parties to the Amended Loan Agreement an additional 5% borrowing availability with respect to eligible accounts receivable and eligible inventory. The FILO Tranche B, and only the FILO Tranche B, will terminate by August 27, 2015 (subject to earlier cancellation by Delta Apparel), has a maximum borrowing amount of $10,000,000, and includes interest rates between 150 and 200 basis points higher than the rates applicable to the other loans available under the Amended Loan Agreement.
The foregoing summary of the Amended Loan Agreement is qualified in its entirety by reference to the text of the Amended Loan Agreement, which was filed as Exhibit 10.1 to the Current Report on Form 8-K filed on August 29, 2013.
Change in Fiscal Year End
On August 26, 2013, our Board of Directors determined that the Company's fiscal year will begin on the Sunday closest to September 30th of each year and end on the Saturday closest to September 30th of each year. The change is intended to better align our planning, financial and reporting functions with the seasonality of our business. Under the applicable rules of the Securities and Exchange Commission, we intend to file a transition report on Form 10-QT for the quarter ended September 28, 2013.
Wendell Closing
During the fourth quarter of fiscal year 2013, the decision was made to consolidate our domestic screen print operations, resulting in the closure of the Wendell, North Carolina decorating facility operated by our Soffe business unit and the consolidation of those operations with Soffe's Fayetteville, North Carolina facility. This closure is expected to take place in September 2013, with associated costs of approximately $1.1 million recorded in the three-month period ending September 28, 2013.
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