Quarterly report pursuant to Section 13 or 15(d)

Business Segments

v2.4.0.8
Business Segments
 6 Months Ended
Mar. 29, 2014
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 business which sells 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 and six months ended March 29, 2014, and March 30, 2013, by operating segment, is as follows (in thousands):
 
Basics
 
Branded
 
Consolidated
Three months ended March 29, 2014
 
 
 
 
 
Net sales
$
64,134

 
$
50,324

 
$
114,458

Segment operating earnings (loss)
1,098

 
(264
)
 
834

Segment assets *
171,223

 
187,035

 
358,258

 
 
 
 
 
 
Three months ended March 30, 2013
 
 
 
 
 
Net sales
$
67,445

 
$
52,647

 
$
120,092

Segment operating earnings (loss)
3,655

 
(1,091
)
 
2,564

Segment assets *
166,771

 
153,327

 
320,098

*
 
All goodwill and intangibles on our balance sheet are included in the branded segment.
 
Basics
 
Branded
 
Consolidated
Six months ended March 29, 2014
 
 
 
 
 
Net sales
$
122,712

 
$
91,758

 
$
214,470

Segment operating earnings (loss)
3,546

 
(3,387
)
 
159

 
 
 
 
 
 
Six months ended March 30. 2013
 
 
 
 
 
Net sales
$
126,247

 
$
100,595

 
$
226,842

Segment operating earnings (loss)
7,296

 
(3,886
)
 
3,410


The following reconciles the segment operating earnings to the Company's consolidated (loss) income before provision for (benefit from) income taxes (in thousands):
 
Three Months Ended
 
Six Months Ended
 
March 29,
2014
 
March 30,
2013
 
March 29,
2014
 
March 30,
2013
Segment operating earnings
$
834

 
$
2,564

 
$
159

 
$
3,410

Unallocated interest expense
1,455

 
1,015

 
2,913

 
1,902

Consolidated (loss) income before provision for (benefit from) income taxes
$
(621
)
 
$
1,549

 
$
(2,754
)
 
$
1,508