Quarterly report pursuant to Section 13 or 15(d)

Business Segments

v2.4.0.8
Business Segments
 9 Months Ended
Jun. 28, 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 nine months ended June 28, 2014, and June 29, 2013, by operating segment, is as follows (in thousands):
 
Basics
 
Branded
 
Consolidated
Three months ended June 28, 2014
 
 
 
 
 
Net sales
$
73,532

 
$
50,002

 
$
123,534

Segment operating earnings (loss)
2,159

 
(567
)
 
1,592

Segment assets *
176,524

 
182,106

 
358,630

 
 
 
 
 
 
Three months ended June 29, 2013
 
 
 
 
 
Net sales
$
78,047

 
$
55,520

 
$
133,567

Segment operating earnings (loss)
5,308

 
(651
)
 
4,657

Segment assets *
161,716

 
150,194

 
311,910

*
 
All goodwill and intangibles on our balance sheet are included in the branded segment.
 
Basics
 
Branded
 
Consolidated
Nine months ended June 28, 2014
 
 
 
 
 
Net sales
$
196,244

 
$
141,760

 
$
338,004

Segment operating earnings (loss)
5,705

 
(3,954
)
 
1,751

 
 
 
 
 
 
Nine months ended June 28. 2013
 
 
 
 
 
Net sales
$
204,294

 
$
156,115

 
$
360,409

Segment operating earnings (loss)
12,604

 
(4,538
)
 
8,066


The following reconciles the segment operating earnings to the Company's consolidated income (loss) before benefit from income taxes (in thousands):
 
Three Months Ended
 
Nine Months Ended
 
June 28,
2014
 
June 29,
2013
 
June 28,
2014
 
June 29,
2013
Segment operating earnings
$
1,592

 
$
4,657

 
$
1,751

 
$
8,066

Unallocated interest expense
1,471

 
1,019

 
4,384

 
2,921

Consolidated income (loss) before benefit from income taxes
$
121

 
$
3,638

 
$
(2,633
)
 
$
5,145