Quarterly report pursuant to Section 13 or 15(d)

Segment Reporting

v2.4.0.6
Segment Reporting
 6 Months Ended
Dec. 31, 2011
Segment Reporting [Abstract]  
Segment Reporting Disclosure [Text Block]
Segment Reporting
We operate our business in two distinct segments: branded and basics. Although the two segments are similar in their production processes and regulatory environment, they are distinct in their economic characteristics, products and distribution methods.
The branded segment is comprised of our business units focused on specialized apparel garments and headwear to meet consumer preferences and fashion trends, and includes Soffe (which includes The Cotton Exchange as the bookstore division of Soffe), Junkfood, To The Game and Art Gun. These branded embellished and unembellished products are sold through specialty and boutique shops, upscale and traditional department stores, mid-tier retailers, sporting goods stores, college bookstores and the U.S. military. Products in this segment are marketed under our primary brands of Soffe®, Intensity Athletics®, The Cotton Exchange®, Junk Food®, and The Game®, licensed brands of Salt Life® and Realtree Outfitters®, as well as other labels. The results of The Cotton Exchange have been included in the branded segment since its acquisition on July 12, 2010.
The basics segment is comprised of our business units primarily focused on garment styles that are characterized by low fashion risk, and includes our Delta Catalog and FunTees businesses. Within the Delta Catalog business, we market, distribute and manufacture unembellished knit apparel under the brands of Delta Pro Weight®, Delta Magnum Weight®, Quail Hollow®, Healthknit® and FunTees®. These products are primarily sold to screen printing and advertising specialty companies. We also manufacture private label products for major branded sportswear companies, retailers, corporate industry programs, and sports licensed apparel marketers. Typically these products are sold with value-added services such as hangtags, ticketing, hangers, and embellishment so that they are fully ready for retail. The majority of the private label products are sold through the FunTees business.
Our Chief Operating Decision Maker ("CODM"), Robert W. Humphreys, and management evaluate performance and allocate resources based on profit or loss from operations before interest, income taxes and special charges (“Segment Operating Income”). Our Segment Operating Income may not be comparable to similarly titled measures used by other companies. Intercompany transfers between operating segments are transacted at cost and have been eliminated within the segment amounts shown in the following table.
Information about our operations as of and for the three and six months ended December 31, 2011 and January 1, 2011, by operating segment, is as follows (in thousands):
 
Basics
 
Branded
 
Consolidated
Three months ended December 31, 2011:
 
 
 
 
 
Net sales
$
57,555

 
$
47,931

 
$
105,486

Segment operating loss
(18,692
)
 
(1,297
)
 
(19,989
)
Segment assets*
171,336

 
146,992

 
318,328

 
 
 
 
 
 
Three months ended January 1, 2011:
 
 
 
 
 
Net sales
$
56,228

 
$
48,494

 
$
104,722

Segment operating income
1,370

 
1,255

 
2,625

Segment assets*
138,121

 
135,438

 
273,559

 
 
 
 
 
 
* All goodwill and intangibles on our balance sheet are included in the branded segment.
 
Basics
 
Branded
 
Consolidated
Six months ended December 31, 2011
 
 
 
 
 
Net sales
$
110,152

 
$
118,857

 
$
229,009

Segment operating (loss) income
(17,108
)
 
3,819

 
(13,289
)
 
 
 
 
 
 
Six months ended January 1, 2011
 
 
 
 
 
Net sales
$
105,769

 
$
106,870

 
$
212,639

Segment operating income
1,521

 
4,062

 
5,583

The following table reconciles the segment operating income to the consolidated income before provision for income taxes (in thousands):
 
Three Months Ended
 
Six Months Ended
 
December 31,
2011
 
January 1,
2011
 
December 31,
2011
 
January 1,
2011
Segment operating (loss) income
$
(19,989
)
 
$
2,625

 
$
(13,289
)
 
$
5,583

Unallocated interest expense
992

 
601

 
1,885

 
1,202

Consolidated (loss) income before taxes
$
(20,981
)
 
$
2,024

 
$
(15,174
)
 
$
4,381