Quarterly report pursuant to Section 13 or 15(d)

Business Segments

v3.2.0.727
Business Segments
 9 Months Ended
Jun. 27, 2015
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.
The branded segment is comprised of our business units focused on specialized apparel to meet consumer preferences and fashion trends, and includes Soffe, Junkfood, and Salt Life. These branded embellished and unembellished products are sold primarily through specialty and boutique shops, upscale and traditional department stores, mid-tier retailers, sporting goods stores, and the U.S. military. Products in this segment are marketed under our lifestyle brands of Salt Life®, Soffe®, Intensity Athletics®, and Junk Food® as well as other labels. Until the sale of The Game collegiate and team dealer business on March 2, 2015, The Game® and American Threads labels were reported in this segment.
The basics segment is comprised of our business units primarily focused on garment styles characterized by low fashion risk, and includes our Activewear and Art Gun businesses. We market, distribute and manufacture knit apparel under the main brands of Delta Pro Weight® and Delta Magnum Weight® for sale to a diversified audience ranging from large licensing businesses to regional screen printers and small independent businesses. These products are primarily sold unembellished, but may be sold decorated through our screen print operations or through Art Gun, our digital print and fulfillment business servicing the ecommerce marketplace. 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.
Robert W. Humphreys, our chief operating decision maker, along with 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 27, 2015, and June 28, 2014, by operating segment, is as follows (in thousands):
 
Basics
 
Branded
 
Consolidated
Three months ended June 27, 2015
 
 
 
 
 
Net sales
$
79,034

 
$
41,491

 
$
120,525

Segment operating income
5,532

 
1,365

 
6,897

Segment assets
169,017

 
160,010

 
329,027

 
 
 
 
 
 
Three months ended June 28, 2014
 
 
 
 
 
Net sales
$
75,818

 
$
47,716

 
$
123,534

Segment operating income (loss)
1,861

 
(269
)
 
1,592

Segment assets
180,248

 
178,382

 
358,630


 
Basics
 
Branded
 
Consolidated
Nine months ended June 27, 2015
 
 
 
 
 
Net sales
$
208,102

 
$
120,845

 
$
328,947

Segment operating income
5,130

 
5,877

 
11,007

 
 
 
 
 
 
Nine months ended June 28, 2014
 
 
 
 
 
Net sales
$
204,465

 
$
133,539

 
$
338,004

Segment operating income (loss)
5,358

 
(3,607
)
 
1,751


The following reconciles the segment operating earnings to the Company's consolidated income (loss) before provision (benefit) from income taxes (in thousands):
 
Three Months Ended
 
Nine Months Ended
 
June 27,
2015
 
June 28,
2014
 
June 27,
2015
 
June 28,
2014
Segment operating income
$
6,897

 
$
1,592

 
$
11,007

 
$
1,751

Unallocated interest expense
1,528

 
1,471

 
4,547

 
4,384

Consolidated income (loss) before provision (benefit) from income taxes
$
5,369

 
$
121

 
$
6,460

 
$
(2,633
)