Quarterly report pursuant to Section 13 or 15(d)

Business Segments

v2.4.0.8
Business Segments
 3 Months Ended
Dec. 28, 2013
Segment Reporting [Abstract]  
Business Segments
Business Segments
We operate our business in two distinct segments: branded and basics. Although the two segments are similar in their production processes and regulatory environments, 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, 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 lifestyle brands of Soffe®, Intensity Athletics®, Junk Food®, The Game®, American Threads by The Game, and Salt Life®, as well as other labels.
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 Activewear undecorated catalog tees and private label products. We market, distribute and manufacture unembellished knit apparel under the main brands of 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, retailers, corporate industry programs, and sports licensed apparel marketers. Typically these products are sold with value-added services such as embellishment, hangtags, ticketing, and hangers so that they are fully ready for retail.
Robert W. Humphreys, 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 (loss)”). Our segment operating earnings (loss) 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 months ended December 28, 2013, and December 29, 2012, by operating segment, is as follows (in thousands):
 
Basics
 
Branded
 
Consolidated
Three months ended December 28, 2013
 
 
 
 
 
Net sales
$
58,578

 
$
41,434

 
$
100,012

Segment operating earnings (loss)
2,447

 
(3,121
)
 
(674
)
Segment assets *
163,084

 
182,311

 
345,395

 
 
 
 
 
 
Three months ended December 29, 2012
 
 
 
 
 
Net sales
$
58,802

 
$
47,948

 
$
106,750

Segment operating earnings (loss)
3,641

 
(2,795
)
 
846

Segment assets *
164,992

 
144,947

 
309,939

*
 
All goodwill and intangibles on our balance sheet are included in the branded segment.

The following reconciles the segment operating (loss) earnings to the Company's consolidated loss before benefit from income taxes before income taxes (in thousands):
 
Three Months Ended
 
December 28,
2013
 
December 29,
2012
Segment operating (loss) earnings
$
(674
)
 
$
846

Unallocated interest expense
1,458

 
887

Consolidated loss before benefit from income taxes
$
(2,132
)
 
$
(41
)