Company Will Take a One-Time Earnings Adjustment in Second Quarter
GREENVILLE, S.C.--(BUSINESS WIRE)--Jan. 10, 2012--
Delta Apparel, Inc. (NYSE Amex: DLA) announced today that, due to record
high cotton prices combined with selling price discounts, the Company
will take a one-time markdown of inventory of approximately $16 million
in its fiscal 2012 second quarter, which will be reported on January 26,
2012. The action affects only the Company's inventory of basic
undecorated t-shirts and will negatively impact second quarter earnings
by approximately $1.20 per share.
Second quarter 2012 results also have been negatively affected by lower
sales volume in branded products due to price increases to retailers
that resulted in somewhat reduced demand. Revenue for the second quarter
is expected to be approximately $105 million versus $104.6 million for
the prior year's second quarter. Due to the above mentioned factors, the
Company anticipates a loss in the 2012 second quarter in the range of
$1.58 to $1.62 per share versus earnings in the comparable prior year
quarter of $0.16 per share.
Robert W. Humphreys, Delta Apparel's Chairman and Chief Executive
Officer, said "The Company is taking the entire amount of the markdown
in the second quarter to put it cleanly behind us, giving us the rest of
the year to focus on our goals for 2012 and 2013. This action, along
with the effect of lower selling prices in the second quarter, will
reduce our guidance for our full 2012 fiscal year. We now anticipate
that 2012 revenue will be in the $480 million to $500 million range and
that earnings will be in the range of $0.50 to $0.60 per diluted share
for the year."
"While we continue to view the volatile cotton market as a risk, we
believe we have taken the appropriate action for the immediate term. We
will continue to work on ways to leverage our costs and adjust our price
structure to best benefit the Company in the long term," Mr. Humphreys
said.
Further information about this announcement and Delta Apparel's growth
strategy going forward will be provided at the ICR investor conference
held tomorrow at 11:30 a.m. Eastern Time. A webcast of the conference
presentation will be available on the Company's website at www.deltaapparelinc.com.
About Delta Apparel, Inc.
Delta Apparel, Inc., along with its operating subsidiaries, M. J. Soffe,
LLC, Junkfood Clothing Company, To The Game, LLC and Art Gun, LLC, is an
international design, marketing, manufacturing, and sourcing company
that features a diverse portfolio of lifestyle branded activewear
apparel and headwear, and produces high quality private label programs.
The Company specializes in selling casual and athletic products across
distribution tiers and in most store types, including specialty stores,
boutiques, department stores, mid-tier and mass chains. From a niche
distribution standpoint, the Company also has strong distribution at
college bookstores and the U.S. military. The Company's products are
made available direct-to-consumer on its websites at www.soffe.com,
www.junkfoodclothing.com,
www.saltlife.com
and www.deltaapparel.com.
Additional products can be viewed at www.2thegame.com
and www.thecottonexchange.com.
The Company's operations are located throughoutthe United States,
Honduras, El Salvador, and Mexico, and it employs approximately 7,200
people worldwide. Additional information about the Company is available
at www.deltaapparelinc.com.
Statements and other information in this press release that are not
reported financial results or other historical information are
forward-looking statements subject to the safe harbor created by the
Private Securities Litigation Reform Act of 1995. These are based on our
expectations and are necessarily dependent upon assumptions, estimates
and data that we believe 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. The risks and
uncertainties include, among others, the general U.S and international
economic conditions; the ability to grow, achieve synergies and realize
the expected profitability of recent acquisitions; the volatility and
uncertainty of raw material, transportation and energy prices and the
availability of these products and services; changes in consumer
confidence, consumer spending, and demand for apparel products; the
ability of our brands and products to meet consumer preferences within
the prevailing retail environment; significant interruptions in our
distribution network or information systems; the financial difficulties
encountered by our customers and higher credit risk exposure; the
competitive conditions in the apparel and textile industries; changes in
environmental, tax, trade, employment and other laws and regulations;
changes in the economic, political and social stability of our offshore
locations; significant litigation in either domestic or international
jurisdictions, the relative strength of the United States dollar as
against other currencies; and other risks described from time to time in
our reports filed with the Securities and Exchange Commission. Accordingly,
any forward-looking statements do not purport to be predictions of
future events or circumstances and may not be realized. Further,
any forward-looking statements are made only as of the date of this
press release and we do not undertake publicly to update or revise the
forward-looking statements even if it becomes clear that any projected
results will not be realized.
Source: Delta Apparel, Inc.
Company Contact:
Delta Apparel, Inc.
Deborah Merrill, Chief
Financial Officer
864-232-5200, ext. 6620
or
Investor
Relations Contact:
ICR, Inc.
Brendon Frey, 203-682-8200