Quarterly report pursuant to Section 13 or 15(d)

Description of Business and Basis of Presentation

v3.23.1
Description of Business and Basis of Presentation
6 Months Ended
Apr. 01, 2023
Business Description and Basis of Presentation [Abstract]  
Description of Business and Basis of Presentation
Note A— Description of Business and Basis of Presentation
 
Delta Apparel, Inc. (collectively with DTG2Go, LLC, Salt Life, LLC, M.J. Soffe, LLC, and other subsidiaries, "Delta Apparel," "we," "us," "our," or the "Company") is
a vertically-integrated, international apparel company with approximately
7,000
 
employees worldwide. We design, manufacture,
 
source, and market a diverse portfolio
of core activewear and lifestyle apparel products under our primary brands of Salt Life®, Soffe®, and Delta. We are a
 
market leader in the on-demand, digital print and
fulfillment industry,
 
bringing DTG2Go's proprietary
 
technology and innovation
 
to our customers'
 
supply chains. We
 
specialize in selling
 
casual and
 
athletic products
through a variety of distribution
 
channels and tiers, including outdoor
 
and sporting goods retailers,
 
independent and specialty stores,
 
better department stores and mid-tier
retailers, mass merchants, eRetailers, the U.S.
 
military, and through our
 
business-to-business digital platform. Our products are also
 
made available direct-to-consumer
on our ecommerce sites
 
and in our
 
branded retail stores.
 
Our diversified go-to-market
 
strategy allows us
 
to capitalize on
 
our strengths in
 
providing activewear and
 
lifestyle
apparel products to a broad and evolving customer base whose
 
shopping preferences may span multiple
 
retail channels.
 
We design and internally manufacture the majority
 
of our products, with more
 
than
90
% of the apparel
 
units that we sell sewn
 
in our own facilities.
 
This allows us to
 
offer
a high degree of
 
consistency and quality, leverage
 
scale efficiencies, and react quickly
 
to changes in trends within the
 
marketplace. We have
 
manufacturing operations
located in
 
the United
 
States, El
 
Salvador, Honduras,
 
and Mexico,
 
and we
 
use domestic
 
and foreign
 
contractors as
 
additional sources
 
of production.
 
Our distribution
facilities are strategically located throughout the United States to better serve our customers with same-day shipping on our catalog products and weekly
 
replenishments
to retailers. We
 
were incorporated in Georgia in 1999, and
 
our headquarters is located in Duluth, Georgia.
 
Our common stock trades on the NYSE
 
American under the
symbol “DLA."
 
We operate on a
 
52-53 week
 
fiscal year
 
ending on
 
the Saturday
 
closest to
 
September 30.
 
Our 2023 fiscal
 
year is
 
a 52-week
 
year and
 
will end
 
on September
 
30, 2023 ("fiscal
2023"). Accordingly, this Quarterly Report on Form 10-Q presents our results for our second quarter of fiscal 2023. Our 2022 fiscal year was a 52-week year and ended
on October 1, 2022 ("fiscal 2022").
 
For presentation purposes herein, all references to period
 
ended relate to the following fiscal years and dates:
We prepared the accompanying interim Condensed Consolidated
 
Financial Statements in accordance
 
with the instructions for Form
 
10-Q and Article 10 of Regulation S-
X. Accordingly, they do not include all of
 
the information and footnotes required
 
by U.S. generally accepted accounting
 
principles ("U.S. GAAP") for complete
 
financial
statements.
 
We
 
believe
 
these
 
Condensed
 
Consolidated
 
Financial
 
Statements include
 
all
 
normal
 
recurring
 
adjustments considered
 
necessary
 
for
 
a
 
fair
 
presentation.
Operating results
 
for the
 
three and six months ended March 2023 are
 
not necessarily
 
indicative of
 
the results
 
that may
 
be expected
 
for our
 
fiscal 2023.
 
Although our
various product lines are
 
sold on a year-round
 
basis, the demand for
 
specific products or styles
 
reflects some seasonality.
 
By diversifying our product
 
lines and go-to-
market strategies over the years, we have reduced the overall seasonality of our business. Consumer demand for apparel is cyclical and dependent upon the overall level
of demand for soft
 
goods, which may or
 
may not coincide with
 
the overall level of
 
discretionary consumer spending.
 
These levels of demand
 
change as regional,
 
domestic
and international economic conditions
 
change. Therefore, the distribution
 
of sales by quarter in fiscal
 
2023 may not be indicative
 
of the distribution in future
 
years. These
Condensed Consolidated Financial Statements should be
 
read in conjunction with the
 
audited Consolidated Financial Statements and
 
footnotes included in our Annual
Report on Form 10-K for our fiscal 2022, filed with the United
 
States Securities and Exchange Commission (“SEC”).
 
Our Condensed Consolidated Financial Statements include the accounts of Delta
 
Apparel and its wholly-owned and majority-owned domestic and foreign subsidiaries.
We
 
apply the
 
equity method of
 
accounting for
 
our investment in
31
% of
 
the outstanding
 
capital stock
 
of a
 
Honduran company.
 
During the
 
six months
 
ended March
2023 and March 2022,
 
we received dividends
 
from this investment
 
of $
1.2
 
million and $
1.1
 
million, respectively.
 
Our Ceiba Textiles
 
manufacturing facility is
 
leased
under an operating lease
 
arrangement with this Honduran
 
company. During the six months
 
ended March 2023
 
and March 2022, we
 
paid approximately $
0.9
 
million under
this arrangement.
 
 
We make
 
available copies of materials we file
 
with, or furnish to, the SEC free
 
of charge at https://ir.deltaapparelinc.com.
 
The information found on our website is not
part of this, or any
 
other, report that we
 
file with, or furnish to,
 
the SEC. In addition, we
 
will provide upon request, at no
 
cost, paper or electronic copies of our
 
reports
and other filings
 
made with the
 
SEC. Requests should be
 
directed to: Investor
 
Relations Department, Delta
 
Apparel, Inc., 2750 Premiere
 
Parkway, Suite
 
100, Duluth,
Georgia 30097. Requests can also be made by telephone to 864-232-5200,
 
or via email at investor.relations@deltaapparel.com.
Period Ended
Fiscal Year
Date Ended
March 2022
Fiscal 2022
April 2, 2022
June 2022
Fiscal 2022
July 2, 2022
September 2022
Fiscal 2022
October 1, 2022
December 2022
Fiscal 2023
December 31, 2022
March 2023
Fiscal 2023
April 1, 2023