Delta Apparel, Inc. Announces Fiscal Year 2001 Projected Sales and Earnings
DULUTH, Ga.--(BUSINESS WIRE)--Nov. 2, 2000--Delta Apparel, Inc. (AMEX-DLA) announced today its forecast of results for the remainder of fiscal year 2001.
This forecast is being made public due to the request of a number of shareholders and due to the Company's belief that having a public forecast would be beneficial to all shareholders of Delta Apparel stock.
The forecast announced today is based on the Company's goals for the current fiscal year, the general parameters of which have previously been made public. In addition to operational objectives, these goals include a sales growth rate of approximately ten percent and an operating profit growth rate of approximately twenty percent over the prior fiscal year. This forecast assumes a tax rate for fiscal 2001 that includes full use of the Company's federal income tax loss carryforward. The Company expects its federal income tax rate in future fiscal years will approximate the statutory rate.
Delta Apparel further announced that, in a meeting held today, its Board of Directors authorized the repurchase by the Company in open market transactions of up to $3 million of Delta Apparel common stock. Any such purchases will be made at the discretion of management in accordance with IRS guidelines for share repurchases after a spin-off. The Company has authorization to spend up to $3 million under its bank credit agreement for share repurchases.
The Company also announced that, in further action taken at the November 1, 2000 meeting, its Board of Directors voted to redeem all rights issued under the Company's shareholder rights plan or "poison pill." These rights will be redeemed for cash of $0.001 per right, in accordance with the terms of the rights plan. The rights plan was adopted prior to the spin-off from Delta Woodside Industries, Inc. to protect the Company's shareholders during the initial trading period of the Company's stock. In response to discussions with its shareholder base, the Board concluded that the rights plan was no longer needed. Set forth below is certain information about the redemption:
-- The Declaration Date is today, November 1, 2000. -- The Record Date is Thursday, November 16, 2000 (at the close of trading). -- The Payment Date is Thursday, November 30, 2000. -- The Redemption Price is $0.001 per Shareholder Right.
As provided in the rights plan, effective immediately, the rights can no longer become exercisable and henceforth only represent the right to receive the redemption price. The Company expects that the American Stock Exchange (AMEX), on which its common stock is traded, will treat the redemption like a $0.001 per share cash dividend on the Company's common stock. Since one right is attached to each outstanding share of common stock, each shareholder will receive $0.001 on the Payment Date for every share of common stock held on the Record Date.
In commenting on these actions, Robert W. Humphreys, President and CEO, said "While we are encouraged by the appreciation of Delta Apparel stock by approximately 90 percent since our spin-off from Delta Woodside Industries, Inc. in June of this year, we still believe our stock to be an excellent buy. I believe the actions taken today will better inform the investing public concerning the value inherent in Delta Apparel. The redemption of the rights under the shareholder rights plan, along with the authorization of the stock repurchase plan, should be strong evidence that we are working hard to benefit all shareholders."
The preceding discussion and projections below contain forward-looking statements. These statements are based on the Company'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 also are subject to a number of business risks and uncertainties. Any of these factors could cause actual results to differ materially from those set forth in or implied by the forward-looking statements. These risk and uncertainties include among others: Changes in the retail or wholesale demand for apparel products which could influence the number of units sold or the average selling price per unit. The cost of raw materials has a material impact on the Company's gross margin. Cost increases not passed on to the customer could have a material negative impact on actual results. The Company operates in a very competitive environment. Pricing or production output changes by competitors could have a material negative impact on actual results. Changes in trade regulations with countries where the Company produces garments could have a material impact on the Company's actual results, as could changes in the currency exchange rates between these countries and the United States. The discovery of unknown conditions such as environmental matters and other similar items could have a material impact on actual results. Accordingly, any forward-looking statements do not purport to be predictions of future events or circumstances and may not be realized. The Company disclaims any obligation to update or revise the forward-looking statements even if it becomes clear that any suggested results will not be realized.
FY01 PROJECTED SALES AND EARNINGS (In thousands, except per share amounts) Quarter 1 Actual FY 00 Act FY 01 Act Inc/(Dec) --------- --------- --------- Net Sales $ 28,659 30,649 1,990 EBIT 1,777 4,586 2,809 E.P.S. (0.19) 1.46 1.65 EBITDA 3,418 6,235 2,817 Annual Projections Low Range FY 00 Act FY 01 Fcst Inc/(Dec) % Chg --------- ---------- --------- ----- Net Sales $ 114,466 118,500 4,034 3.5% EBIT 12,206 15,000 2,794 22.9% E.P.S. 2.00 4.88 2.88 144.0% EBITDA 18,805 21,524 2,719 14.5% Annual Projections High Range FY 00 Act FY 01 Fcst Inc/(Dec) % Chg --------- ---------- --------- ----- Net Sales $ 114,466 132,900 18,434 16.1% EBIT 12,206 18,600 6,394 52.4% E.P.S. 2.00 5.79 3.79 189.4% EBITDA 18,805 25,124 6,319 33.6%
|CONTACT:||Delta Apparel, Inc.|
|Herb Mueller, 678-775-6948|
Released November 1, 2000