Quarterly report pursuant to Section 13 or 15(d)

Segment Reporting

v2.4.0.6
Segment Reporting
 9 Months Ended
Mar. 31, 2012
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 printers and to advertising specialty companies. Additionally, they are sold to companies that design and distribute licensed and other graphic Tees to retail. 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 nine months ended March 31, 2012 and April 2, 2011, by operating segment, is as follows (in thousands):
 
Basics
 
Branded
 
Consolidated
Three months ended March 31, 2012:
 
 
 
 
 
Net sales
$
67,048

 
$
58,493

 
$
125,541

Segment operating income
1,516

 
1,340

 
2,856

Segment assets*
180,332

 
157,546

 
337,878

 
 
 
 
 
 
Three months ended April 2, 2011:
 
 
 
 
 
Net sales
$
70,632

 
$
54,322

 
$
124,954

Segment operating income
6,593

 
1,534

 
8,127

Segment assets*
149,086

 
151,440

 
300,526

 
 
 
 
 
 
* All goodwill and intangibles on our balance sheet are included in the branded segment.
 
Basics
 
Branded
 
Consolidated
Nine months ended March 31, 2012:
 
 
 
 
 
Net sales
$
177,200

 
$
177,350

 
$
354,550

Segment operating (loss) income
(15,592
)
 
5,159

 
(10,433
)
 
 
 
 
 
 
Nine months ended April 2, 2011:
 
 
 
 
 
Net sales
$
176,400

 
$
161,192

 
$
337,592

Segment operating income
8,116

 
5,595

 
13,711

The following table reconciles the segment operating income (loss) to the consolidated income (loss) before provision or benefit for income taxes (in thousands):
 
Three Months Ended
 
Nine Months Ended
 
March 31,
2012
 
April 2,
2011
 
March 31,
2012
 
April 2,
2011
Segment operating income (loss)
$
2,856

 
$
8,127

 
$
(10,433
)
 
$
13,711

Unallocated interest expense
1,017

 
627

 
2,901

 
1,828

Consolidated income (loss) before taxes
$
1,839

 
$
7,500

 
$
(13,334
)
 
$
11,883