Quarterly report pursuant to Section 13 or 15(d)

Note J - Business Segments

v3.22.2
Note J - Business Segments
 9 Months Ended
Jul. 02, 2022
Notes to Financial Statements  
Segment Reporting Disclosure [Text Block]

Note J—Business Segments

 

Our operations are managed and reported in two segments, Delta Group and Salt Life Group, which reflect the manner in which the business is managed and results are reviewed by the Chief Executive Officer, who is our chief operating decision maker. 

 

The Delta Group is comprised of our business units primarily focused on core activewear styles, and includes our DTG2Go and Delta Activewear business units. We are a market leader in the on-demand, direct-to-garment digital print and fulfillment industry, bringing technology and innovation to the supply chain of our many customers.  We use highly-automated factory processes and our proprietary software to deliver on-demand, digitally printed apparel direct to consumers on behalf of our customers. Our Activewear business is organized around key customer channels and how they source their various apparel needs. Delta Activewear is a preferred supplier of activewear apparel to regional and global brands, direct to retail and through wholesale markets. We offer a broad portfolio of apparel and accessories under the Delta, Delta Platinum, Soffe, and sourced-branded products that we distribute utilizing our network of fulfillment centers. Delta Direct services key channels, such as the screen print, promotional, and eRetailer channels as well as the retail licensing channel, whose customers sell through to many mid-tier and mass market retailers.  In our Global Brands & Retail Direct business we serve our customers as their supply chain partner, from product development to shipment of their branded products, with the majority of products being sold with value-added services including embellishment, hangtags, and ticketing. We also serve retailers by providing our portfolio of products directly to their retail stores and through their ecommerce channels.  We sell our products to a diversified audience, including sporting goods and outdoor retailers, specialty and resort shops, farm and fleet stores, department stores, and mid-tier retailers. We also service custom apparel to major branded sportswear companies, trendy regional brands, and all branches of the United States armed forces. We also offer our Soffe products direct to consumers at www.soffe.com.

 

The Salt Life Group is comprised of our lifestyle brand focused on a broad range of apparel garments, headwear and related accessories to meet consumer preferences and fashion trends, and includes our Salt Life business unit. These products are sold through specialty and boutique shops, traditional department stores, and outdoor retailers, as well as direct-to-consumer through branded ecommerce sites and branded retail stores. Products in this segment are marketed under our lifestyle brand of Salt Life®.

 

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"). Our segment operating earnings  may not be comparable to similarly titled measures used by other companies. The accounting policies of our reportable segments are the same as those described in Note 2 in our Annual Report on Form 10-K for fiscal 2021, filed with the SEC. Intercompany transfers between operating segments are transacted at cost and have been eliminated within the segment amounts shown in the following table (in thousands).

 

   

Three Months Ended

    

Nine Months Ended

  
   

June 2022

    

June 2021

    

June 2022

    

June 2021

  

Segment net sales:

                                

Delta Group

   $ 106,020     $ 102,562     $ 323,276     $ 284,404  

Salt Life Group

     20,855       16,104       46,043       37,611  

Total net sales

   $ 126,875     $ 118,666     $ 369,319     $ 322,015  
                                 

Segment operating earnings:

                                

Delta Group (1)

   $ 10,701     $ 13,869     $ 33,557     $ 28,394  

Salt Life Group

     3,574       2,916       7,037       4,726  

Total segment operating earnings

   $ 14,275     $ 16,785     $ 40,594     $ 33,120  

 

(1) In fiscal 2021, the Delta Group operating earnings included $1.3 million of expense, reported within "Other loss (income), net", related to two catastrophic hurricanes that disrupted operations during the December 2020 quarter.

 

The following table reconciles the segment operating earnings to the consolidated earnings before provision for income taxes (in thousands):

 

   

Three Months Ended

    

Nine Months Ended

  
   

June 2022

    

June 2021

    

June 2022

    

June 2021

  

Segment operating earnings

   $ 14,275     $ 16,785     $ 40,594     $ 33,120  

Unallocated corporate expenses

     4,980       4,882       11,041       10,569  

Unallocated interest expense

     1,971       1,735       5,370       5,225  

Consolidated earnings before provision for income taxes

   $ 7,324     $ 10,168     $ 24,183     $ 17,326