Delta Apparel Reports Record Earnings on Increased Sales for Fiscal Year 2001
DULUTH, Ga.--(BUSINESS WIRE)--Aug. 16, 2001--Delta Apparel, Inc. (AMEX:DLA) today announced that its net sales for the twelve months ended June 30, 2001 were $120.4 million, a 5.2% increase from the prior year.
Fully diluted earnings per share for fiscal year 2001 were $4.03, up $2.03 per share from $2.00 earnings per share in fiscal year 2000.
For the fourth fiscal quarter ended June 30, 2001, the Company recorded sales of $35.4 million, down $1.5 million or 4.2% from the fourth fiscal quarter of last year. Decreased sales were the result of lower unit prices, partially offset by increased unit volume. Operating earnings were $2.7 million, down $3.6 million from the prior year fourth fiscal quarter. Lower operating earnings were the result of manufacturing shutdowns required to maintain inventory levels. EBITDA for the quarter was $4.3 million, down $3.7 million from the fourth fiscal quarter of last year.
Interest expense was $0.4 million for the quarter, compared to $1.0 million in the prior year quarter. This reduction was primarily a result of the contribution to equity of intercompany debt in connection with the spin-off from Delta Woodside Industries, Inc. on June 30, 2000.
The effective income tax rate on pretax income for the three months ended June 30, 2001 was (24.7%), compared to 1.3% for the fiscal year ended July 1, 2000. Because of lower than expected fourth quarter results, the Company's annualized effective income tax rate for the year ended June 30, 2001 is 9.0%, down from the 18.0% expected through the first three quarters of the year. This resulted in the income tax benefit in the fourth fiscal quarter.
Net earnings for the quarter were $2.9 million, down $2.3 million from the fourth fiscal quarter of last year. Net earnings were 8.1% of sales, compared with 14.1% of sales in the prior year quarter.
Basic and diluted earnings per share in the quarter ended June 30, 2001 were $1.20 and $1.16 per share, respectively, down from the $2.22 earnings per share for the same quarter in fiscal year 2000.
Sales for the year ended June 30, 2001 were $120.4 million, up $5.9 million, or 5.2% from the prior year. Operating earnings for fiscal year 2001 were $12.3 million, up $0.1 million, or 0.8%, from fiscal year 2000. EBITDA for the year ended June 30, 2001 was $18.6 million, down $0.2 million from the year ended July 1, 2000.
Interest expense for the twelve months ended June 30, 2001 was $1.3 million, a decrease of $6.1 million from the prior year. This reduction was primarily a result of the contribution to equity of intercompany debt in connection with the spin-off from Delta Woodside Industries, Inc. on June 30, 2000.
Net earnings for the year ended June 30, 2001 were $10.0 million, up $5.2 million, or 111.0%, from the previous year. Basic and diluted earnings per share for the twelve months ended June 30, 2001 were $4.15 and $4.03 per share, respectively, up from $2.00 per share for the twelve months ended July 1, 2000.
During the three months and the twelve months ended June 30, 2001, the Company purchased 18,700 and 34,700 shares, respectively, of its stock through its Stock Repurchase Program. The stock was purchased at an average cost of $17.49 per share.
Robert W. Humphreys, President and CEO, commented on the year's performance, "We are excited by the results for the 2001 fiscal year, especially considering the challenging retail conditions in recent months. Our unit volume increased from the prior year by just over 10%. Price promotions in the activewear market, however, drove our prices slightly lower than in the previous year."
"Although we are disappointed in the lower than expected results for the fourth quarter, we believe our Company can continue to grow profitably during the upcoming year. While the first half of fiscal 2002 will also experience depressed margins, we expect that the balance of the year should benefit from lower cotton prices and the cost savings related to the closing of the Washington, Georgia sewing facility, as well as improved operating cost in our new facility in Mexico. We are excited about our Sales and Distribution Center in Southern California that opened the first week in June. This new center allows us to provide immediate delivery to our West Coast customers."
Delta Apparel, Inc. is a vertically integrated supplier of knit apparel, particularly T-shirts. The Company sells its products as blanks, which are then screen printed or embroidered with designs and logos for sales to consumers. Delta Apparel was spun-off on June 30, 2000 as an independent business when Delta Woodside Industries, Inc. separated into three businesses. Delta Apparel has operations in five states, two company-operated sewing facilities in Honduras and one company-operated sewing facility in Mexico. The Company employs about 2,500 worldwide.
Statements and other information in this press release that are not reported financial results or other historical information are forward-looking statements. These are based on Delta Apparel's expectations and are necessarily dependent upon assumptions, estimates and data that the Company believes are reasonable and accurate but may be incorrect, incomplete or imprecise. Forward-looking statements are also subject to a number of business risks and uncertainties, any of which could cause actual results to differ materially from those set forth in or implied by the forward-looking statements. These risks and uncertainties include, among others, changes in the retail demand for apparel products, the cost of raw materials, competitive conditions in the apparel and textile industries, the relative strength of the United States dollar as against other currencies, changes in United States trade regulations and the discovery of unknown conditions (such as with respect to environmental matters and similar items). Accordingly, any forward-looking statements do not purport to be predictions of future events or circumstances and may not be realized. The Company does not undertake to publicly update or revise the forward-looking statements even if it becomes clear that any projected results will not be realized.
SELECTED FINANCIAL DATA:
(In thousands, except per share amounts)
Three Months Ended Twelve Months Ended
June 30, July 1, June 30, July 1,
2001 2000 2001 2000
----------- ------------ ------------ ------------
Net Sales $ 35,406 36,953 $ 120,400 114,466
Cost of Goods Sold 29,854 28,297 97,101 94,144
---------- ---------- ---------- ----------
Gross Margin 5,552 8,656 23,299 20,322
SG&A 2,857 2,399 11,024 8,099
Other Income/(Expense) 11 4 28 (17)
---------- ---------- ---------- ----------
Operating Income 2,706 6,261 12,303 12,206
Interest Expense 397 986 1,339 7,417
Taxes (571) 73 987 60
---------- ---------- ---------- ----------
Net Income $ 2,880 $ 5,202 $ 9,977 $ 4,729
========== ========== ========== ==========
Weighted Average Shares Outstanding
Basic 2,392,393 2,342,200 2,403,069 2,365,100
Diluted 2,480,251 2,342,200 2,473,971 2,365,100
Net Income per Common Share
Basic $ 1.20 $ 2.22 $ 4.15 $ 2.00
Diluted $ 1.16 $ 2.22 $ 4.03 $ 2.00
June 30, 2001 July 1, 2000
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Current Assets
Cash $ 165 $ 415
Receivables, Net 22,042 22,115
Income Tax Receivable 1,086 -
Inventories 41,619 28,207
Deferred Income Taxes 925 -
Other Assets 1,597 1,186
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Total Current Assets 67,434 51,923
Noncurrent Assets
Property, Plant & Equipment, Net 23,750 26,871
Other Noncurrent Assets 139 313
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Total Noncurrent Assets 23,889 27,184
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Total Assets $ 91,323 $ 79,107
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Current Liabilities
Current Portion of Long Term Debt $ 8,435 $ 2,000
Other Current Liabilities 12,627 15,116
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Total Current Liabilities 21,062 17,116
Noncurrent Liabilities
Long-Term Debt 5,667 7,667
Deferred Income Taxes 375 -
Other Noncurrent Liabilities 736 522
-------- --------
Total Noncurrent Liabilities 6,778 8,189
Stockholders' Equity 63,483 53,802
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Total Liabilities and Stockholders'
Equity $ 91,323 $ 79,107
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| CONTACT: | Delta Apparel, Inc. |
|---|---|
| Herb Mueller, 678/775-6948 |
Released August 16, 2001