Delta Apparel Reports Fiscal 2013 First Quarter Results
Greenville, South Carolina-based Delta Apparel Inc. achieved record revenue for its fiscal 2013 first quarter ended Sept. 30, 2012.
Net sales for the fiscal 2013 first quarter were $130.1 million, a 5.3 percent increase over 2012 first quarter sales of $123.5 million. Net income for the 2013 first quarter was $3.6 million, or $0.41 per diluted share, compared with $4.4 million, or $0.50 per diluted share, in the prior year quarter. Net income for the fiscal 2013 first quarter was affected by a one-time charge of $1.2 million related to the previously disclosed internal investigation completed by the company's Audit Committee in September, which reduced first quarter earnings per share by $0.10. Excluding this one-time charge, net income would have been a first quarter record.
Delta’s first quarter performance was primarily driven by strong organic growth and improved margins in the basics segment as well as in the branded segment’s Art Gun business. The higher revenues were offset somewhat by lower average selling prices resulting from cotton price declines and product mix changes.
Basics Segment Review
Fiscal 2013 first-quarter net sales for Delta’s basics segment rose 26.6 percent to $66.5 million, compared with $52.6 million in the prior year period. The increase was led by the company’s FunTees business, which enjoyed a 48 percent rise in unit volume and 41.5 percent net sales growth during the quarter. The Delta Catalog business experienced a 35 percent increase in unit volume and 20 percent net sales growth. The higher unit volumes leveraged against fixed manufacturing costs, coupled with lower cotton costs in inventory, enabled Delta to reduce pricing while maintaining acceptable margins in its basics segment. In addition, the market for undecorated t-shirts was stable during the first quarter, with overall market demand keeping pace with inventories.