Quarterly report pursuant to Section 13 or 15(d)

Business Segments

v2.4.1.9
Business Segments
 3 Months Ended
Dec. 27, 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, marketing, and distribution methods. In fiscal year 2014, we reclassified our Art Gun business from the branded segment to the basics segment to better reflect that business's current operating characteristics. This change is included within our 2015 results and corresponding comparisons to the prior year.
The branded segment is comprised of our business units which are focused on specialized apparel garments and headwear to meet consumer preferences and fashion trends, and includes Soffe, Junkfood, and To The Game. 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 Salt Life®, Soffe®, Intensity Athletics®, Junk Food®, The Game®, and American Threads™ 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 Activewear and Art Gun businesses. We market, distribute and manufacture for sale 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, e-retailers, 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. Art Gun produces custom private label garments through digital printing.
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 27, 2014, and December 28, 2013, by operating segment, is as follows (in thousands):
 
Basics
 
Branded
 
Consolidated
Three months ended December 27, 2014
 
 
 
 
 
Net sales
$
57,681

 
$
35,700

 
$
93,381

Segment operating loss
(1,226
)
 
(1,991
)
 
(3,217
)
Segment assets
181,445

 
170,884

 
352,329

 
 
 
 
 
 
Three months ended December 28, 2013
 
 
 
 
 
Net sales
$
62,518

 
$
37,494

 
$
100,012

Segment operating earnings (loss)
2,711

 
(3,385
)
 
(674
)
Segment assets
169,764

 
175,631

 
345,395


The following reconciles the segment operating earnings to the Company's consolidated loss before benefit from income taxes (in thousands):
 
Three Months Ended
 
December 27,
2014
 
December 28,
2013
Segment operating loss
$
(3,217
)
 
$
(674
)
Unallocated interest expense
1,528

 
1,458

Consolidated loss before benefit from income taxes
$
(4,745
)
 
$
(2,132
)