# EDGAR Filing Document

**Accession Number:** 0001101396
**File Stem:** 0001437749-23-002687
**Filing Date:** 2023-2
**Character Count:** 20055
**Document Hash:** c5ae0bd419721e219120f8fd16213f46
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001437749-23-002687.hdr.sgml**: 20230207

**ACCESSION NUMBER**: 0001437749-23-002687

**CONFORMED SUBMISSION TYPE**: 8-K

**PUBLIC DOCUMENT COUNT**: 15

**CONFORMED PERIOD OF REPORT**: 20230207

**ITEM INFORMATION**: Results of Operations and Financial Condition

**ITEM INFORMATION**: Regulation FD Disclosure

**ITEM INFORMATION**: Financial Statements and Exhibits

**FILED AS OF DATE**: 20230207

**DATE AS OF CHANGE**: 20230207

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** DELTA APPAREL, INC
- **CENTRAL INDEX KEY:** 0001101396
- **STANDARD INDUSTRIAL CLASSIFICATION:** WHOLESALE-APPAREL, PIECE GOODS & NOTIONS [5130]
- **IRS NUMBER:** 582508794
- **STATE OF INCORPORATION:** GA
- **FISCAL YEAR END:** 0930

**FILING VALUES:**
- **FORM TYPE:** 8-K
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-15583
- **FILM NUMBER:** 23595191

**BUSINESS ADDRESS:**
- **STREET 1:** 2750 PREMIER PKWY.
- **STREET 2:** SUITE 100
- **CITY:** DULUTH
- **STATE:** GA
- **ZIP:** 30097
- **BUSINESS PHONE:** 678-775-6900

**MAIL ADDRESS:**
- **STREET 1:** 2750 PREMIER PKWY.
- **STREET 2:** SUITE 100
- **CITY:** DULUTH
- **STATE:** GA
- **ZIP:** 30097

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** DELTA APPAREL INC
- **DATE OF NAME CHANGE:** 19991221

dla20230206_8k.htm

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**WASHINGTON, D.C. 20549**

**FORM **8-K**

**CURRENT REPORT PURSUANT**

**TO SECTION 13 or 15(d) OF THE**

**SECURITIES EXCHANGE ACT OF 1934**

DATE OF REPORT (Date of earliest event reported): February 7, 2023

**DELTA APPAREL, INC.**

(Exact name of registrant as specified in its charter)

---

| | | |
|:---|:---|:---|
|  | Georgia |  |
|  | (State or Other Jurisdiction of Incorporation) |  |
| 1-15583 |  | 58-2508794 |
| (Commission File Number) |  | (IRS Employer Identification No.) |

---

---

| | |
|:---|:---|
| 2750 Premiere Pkwy., Suite 100,<br> Duluth, Georgia 30097 | 30097 |
| (Address of principal executive offices) | (Zip Code) |

---

---

| |
|:---|
| (678) 775-6900 |
| (Registrant's Telephone Number Including Area Code) |

---

<u>Not Applicable</u>

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below)

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

---

| | | | | |
|:---|:---|:---|:---|:---|
| Large accelerated filer | Accelerated filer | Non-accelerated filer | Smaller reporting company | Emerging growth company |
| ☐ | ☒ | ☐ | ☒ | ☐ |

---

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Securities registered pursuant to Section 12(b) of the Act:

---

| | | |
|:---|:---|:---|
| <u>Title of each class</u> | <u>Trading Symbol(s)</u> | <u>Name of each exchange on which registered</u> |
| Common | DLA | NYSE American |

---

------

**Item 2.02 Results of Operations and Financial Condition.**

On February 7, 2023, Delta Apparel, Inc. (the "Company") issued a press release announcing its financial results for the quarter ended December 31, 2022.

A copy of the press release is attached as Exhibit 99.1 hereto, incorporated herein by reference, and also made available through the Company's website at www.deltaapparelinc.com.

**Item 7.01. Regulation FD Disclosure.**

Robert W. Humphreys, Chairman and Chief Executive Officer, and senior management will hold a conference call on Tuesday, February 7, 2023, at 4:30 p.m. Eastern Time, to discuss financial results and provide a business update. The conference call will be broadcast through the Company's website at www.deltaapparelinc.com. Investors may listen to the call by selecting the webcast link on the homepage of the website. A replay of the webcast will be available within one hour of the call and accessible on the above website through March 7, 2023.

The information in this Current Report on Form 8-K, including the exhibit, is being furnished and shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934 (the "Exchange Act") or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act.

**Item 9.01. Financial Statements and Exhibits.**

---

| | |
|:---|:---|
| <u>Exhibit Number</u> | <u>Description</u> |
| 99.1 | [Press release issued by Delta Apparel, Inc. on February 7, 2023.](ex_471756.htm) |
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL). |

---

**SIGNATURES**

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

---

| | | |
|:---|:---|:---|
|  |  | DELTA APPAREL, INC. |
| Date: | February 7, 2023 | /s/ Robert W. Humphreys |
|  |  | Robert W. Humphreys |
|  |  | Chairman and Chief Executive Officer |

---

## Exhibit 99.1

**Exhibit 99.1**

![logo.jpg](logo.jpg)

**Delta Apparel Reports First Quarter Fiscal 2023 Results**

*Record First Quarter Sales at Salt Life and DTG2Go*

*Double-Digit Growth Across Four of Five Go-To-Market Channels* 

February 7, 2023, DULUTH, GA --(BUSINESS WIRE)-- Delta Apparel, Inc. (NYSE American: DLA), a leading provider of core activewear, lifestyle apparel, and on-demand digital print strategies, today announced financial results for its fiscal year 2023 first quarter ended December 31, 2022.

Chairman and Chief Executive Officer Robert W. Humphreys commented, "We were pleased to deliver double-digit sales growth across four of our five main go-to-market channels and overall sales of $107 million for the quarter. Our Salt Life Group segment hit on all cylinders, delivering record first quarter sales fueled by 17% growth over last year and strong acceleration across direct-to-consumer and wholesale channels. The Salt Life team continues to do an excellent job of expanding the brand's retail and digital footprints to remain accessible to its loyal and growing consumer following across the country.

Our DTG2Go business also posted record first quarter sales with growth of nearly 20% over last year. We continue to see high demand for DTG2Go's 'Digital First' offering and many opportunities to grow sales and improve profitability as we increase output on recently adopted technology and leverage competitive advantages from 'hyper local' fulfillment strategies and the Delta Direct vertical blank tee platform. Our Activewear business's Global Brands and Retail Direct channels also registered double-digit sales growth for the quarter and continue to seize opportunities generated by the increasing industry focus on nearshore sourcing solutions like those we offer in Central America.

As expected, our results for the quarter were heavily impacted by reduced demand in the mass retail supply chain served by our Delta Direct channel and the inflationary cotton and other input costs evident across the industry. The manufacturing shutdowns that we, like many of our competitors, initiated during the quarter to recalibrate production output also impacted the bottom line.

Mr. Humphreys concluded, "We've been very intentional over the years in building agility and market diversity into our business, and our topline performance nearing last year's record first quarter sales in a much lower demand environment for basic tees this time around highlights our team's ability to execute on that strategy. Moving forward, we look for another record year at Salt Life, continued sales growth at DTG2Go, and improving profitability at Activewear in the second half of our fiscal year."

For the first quarter ended December 31, 2022:

● Net sales were $107.3 million in the first quarter compared to prior year first quarter net sales of $110.7 million. Net sales in the Delta Group segment were $97.0 million compared to $101.9 million in the prior year first quarter. Salt Life Group segment net sales grew 17% to $10.3 million from prior year first quarter net sales of $8.8 million.

● Gross margins were 12.7% compared to 20.8% in the prior year, largely driven by inflationary raw material costs and production curtailment expenses.

● Selling, general, and administrative expenses (SG&A) were $18.9 million, or 17.6% of sales, compared to $17.5 million, or 15.8% of sales, in the prior year first quarter. The year-over-year increase in SG&A was driven primarily by higher selling costs in our Salt Life Group segment from the opening of additional retail stores as well as increased distribution labor and supply costs in our Delta Group segment.

● Operating income declined year-over-year from $5.9 million, or 5.3% of sales, to an operating loss of $2.59 million, or (2.4%) of sales.

● Net income declined from $3.6 million, or $0.51 per diluted share, to a loss of $3.6 million, or ($0.51) per diluted share, and included a one-time $2.5 million benefit from the settlement of a litigation matter.

● Net inventory as of December 31, 2022, was $258.8 million, an increase of $10.4 million from September 2022 and $75.8 million from December 2021. The increase from September 2022 stemmed primarily from timely Salt Life first quarter inventory deliveries compared to last year's supply chain delays pushing scheduled deliveries into the second quarter.

● Total net debt, including capital lease financing and cash on hand, was $185 million as of December 31, 2022, an increase of $14.6 million from September 2022 and $46 million from December 2021. Cash on hand and availability under the Company's U.S. revolving credit facility totaled $27.2 million as of December 31, 2022, a decrease of $7.5 million from September 2022 and $5.8 million from December 2021, with the decrease from September 2022 principally driven by investments in the business to support working capital needs.

● The Company spent approximately $2.1 million on capital expenditures during the first quarter compared to $1.8 million during the prior year first quarter, with the expenditures focused on Salt Life retail store build-outs, additional equipment, and information technology and manufacturing enhancements.

**Conference Call** 

After the market close on February 7, 2023, financial results for the Company's fiscal year 2023 first quarter ended December 31 2022, will be released and, at 4:30 p.m. ET, the Company's senior management will hold a conference call to discuss its financial results and business outlook. The Company invites you to join the call by dialing 877-704-4453. If calling from outside the United States, please dial 201-389-0920. A live webcast of the conference call will be available at www.deltaapparelinc.com. Please visit the website at least 15 minutes early to register for the teleconference webcast and download any necessary software. A replay of the call will be available through March 7, 2023. To access the telephone replay, participants should dial toll-free 844-512-2921. International callers can dial 412-317-6671. The access code for the replay is 13735669.

**About Delta Apparel, Inc.**

Delta Apparel, Inc., along with its operating subsidiaries DTG2Go, LLC, Salt Life, LLC, and M.J. Soffe, LLC, is a vertically-integrated, international apparel company that designs, manufactures, sources, and markets a diverse portfolio of core activewear and lifestyle apparel products under the primary brands of Salt Life®, Soffe®, and Delta. The Company is a market leader in the direct-to-garment digital print and fulfillment industry, bringing proprietary DTG2Go technology and innovation to customer supply chains. The Company specializes 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 and e-retailers, the U.S. military, and through its business-to-business e-commerce sites. The Company's products are also made available direct-to-consumer on its websites at www.saltlife.com, www.soffe.com and www.deltaapparel.com as well as through its branded retail stores. The Company's operations are located throughout the United States, Honduras, El Salvador, and Mexico, and it employs approximately 8,500 people worldwide. Additional information about the Company is available at www.deltaapparelinc.com.

**Cautionary Note Regarding Forward-Looking Statements**

This press release may contain "forward-looking" statements that involve risks and uncertainties. Any number of factors could cause actual results to differ materially from anticipated or forecasted results, including, but not limited to, the general U.S. and international economic conditions; the impact of the COVID-19 pandemic and government/social actions taken to contain its spread on our operations, financial condition, liquidity, and capital investments, including recent labor shortages, inventory constraints, and supply chain disruptions; significant interruptions or disruptions within our manufacturing, distribution or other operations; deterioration in the financial condition of our customers and suppliers and changes in the operations and strategies of our customers and suppliers; the volatility and uncertainty of cotton and other raw material prices and availability; the competitive conditions in the apparel industry; our ability to predict or react to changing consumer preferences or trends; our ability to successfully open and operate new retail stores in a timely and cost-effective manner; the ability to grow, achieve synergies and realize the expected profitability of acquisitions; changes in economic, political or social stability at our offshore locations or in areas in which we, or our suppliers or vendors, operate; our ability to attract and retain key management; the volatility and uncertainty of energy, fuel and related costs; material disruptions in our information systems related to our business operations; compromises of our data security; significant changes in our effective tax rate; significant litigation in either domestic or international jurisdictions; recalls, claims and negative publicity associated with product liability issues; the ability to protect our trademarks and other intellectual property; changes in international trade regulations; our ability to comply with trade regulations; changes in employment laws or regulations or our relationship with employees; negative publicity resulting from violations of manufacturing standards or labor laws or unethical business practices by our suppliers and independent contractors; the inability of suppliers or other third-parties, including those related to transportation, to fulfill the terms of their contracts with us; restrictions on our ability to borrow capital or service our indebtedness; interest rate fluctuations increasing our obligations under our variable rate indebtedness; the ability to raise additional capital; the impairment of acquired intangible assets; foreign currency exchange rate fluctuations; the illiquidity of our shares; price volatility in our shares and the general volatility of the stock market; and the other factors set forth in the "Risk Factors" contained in our most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission and as updated in our subsequently filed Quarterly Reports on Form 10-Q. Except as may be required by law, Delta Apparel, Inc. expressly disclaims any obligation to update these forward-looking statements to reflect events or circumstances after the date of this press release or to reflect the occurrence of unanticipated events.

Company Contact:<br> Justin Grow, 864-232-5200 x6604<br> investor.relations@deltaapparel.com<br>Investor Relations and Media Contact:<br> ICR, Inc.<br>Investors:<br> Tom Filandro, 646-277-1235<br>Media:<br> Jessica Liddell, 203-682-8208<br> DLAPR@icrinc.com

------

---

| |
|:---|
| **SELECTED FINANCIAL DATA:** |
| (In thousands, except per share amounts) |

---

---

| | | |
|:---|:---|:---|
|  | **Three Months Ended** | **Three Months Ended** |
|  | **December 2022** | **December 2021** |
| **Net Sales** | $107295 | $110746 |
| **Cost of Goods Sold** | 93672 | 87743 |
| **Gross Profit** | 13623 | 23003 |
| **Selling, General and Administrative Expenses** | 18870 | 17482 |
| **Other Income, Net** | (2621) | (395) |
| **Operating (Loss) Income** | (2626) | 5916 |
| **Interest Expense, Net** | 2890 | 1598 |
| **(Loss) Earnings Before (Benefit From) Provision For Income Taxes** | (5516) | 4318 |
| **(Benefit From) Provision For Income Taxes** | (1917) | 648 |
| **Consolidated Net (Loss) Earnings** | (3599) | 3670 |
| **Net Loss (Income) Attributable to Non-Controlling Interest** | 34 | (25) |
| **Net (Loss) Earnings Attributable to Shareholders** | $(3565) | $3645 |
| **Weighted Average Shares Outstanding** |  |  |
| **Basic** | 6954 | 6999 |
| **Diluted** | 6954 | 7085 |
| **Net (Loss) Earnings per Common Share** |  |  |
| **Basic** | $(0.51) | $0.52 |
| **Diluted** | $(0.51) | $0.51 |

---

------

---

| | | | |
|:---|:---|:---|:---|
|  | **December 2022** | **September 2022** | **December 2021** |
| **Current Assets** |  |  |  |
| **Cash** | $327 | $300 | $6379 |
| **Receivables, Net** | 61514 | 71586 | 66180 |
| **Inventories, Net** | 258891 | 248538 | 183058 |
| **Prepaids and Other Assets** | 4114 | 2755 | 5162 |
| **Total Current Assets** | 324846 | 323179 | 260779 |
| **Noncurrent Assets** |  |  |  |
| **Property, Plant & Equipment, Net** | 72771 | 74109 | 66350 |
| **Goodwill and Other Intangibles, Net** | 61324 | 61923 | 63663 |
| **Deferred Income Taxes** | 1342 | 1342 | 1030 |
| **Operating Lease Assets** | 49313 | 50275 | 43423 |
| **Investment in Joint Venture** | 9045 | 9886 | 10202 |
| **Other Noncurrent Assets** | 2800 | 2967 | 1929 |
| **Total Noncurrent Assets** | 196595 | 200502 | 186597 |
| **Total Assets** | $521441 | $523681 | $447376 |
| **Current Liabilities** |  |  |  |
| **Accounts Payable and Accrued Expenses** | $100652 | $110967 | $83321 |
| **Income Taxes Payable** | 321 | 379 | 356 |
| **Current Portion of Contingent Consideration** |  |  | 1897 |
| **Current Portion of Finance Leases** | 8603 | 8163 | 6581 |
| **Current Portion of Operating Leases** | 8585 | 8876 | 8197 |
| **Current Portion of Long-Term Debt** | 9514 | 9176 | 7265 |
| **Total Current Liabilities** | 127675 | 137561 | 107617 |
| **Noncurrent Liabilities** |  |  |  |
| **Long-Term Taxes Payable** | 2841 | 2841 | 3186 |
| **Deferred Income Taxes** | 2232 | 4310 | 1520 |
| **Long-Term Finance Leases** | 18465 | 16776 | 13946 |
| **Long-Term Operating Leases** | 42015 | 42721 | 37208 |
| **Long-Term Debt** | 148899 | 136750 | 118149 |
| **Other Noncurrent Liabilities** |  |  | 769 |
| **Total Noncurrent Liabilities** | 214452 | 203398 | 174778 |
| **Common Stock** | 96 | 96 | 96 |
| **Additional Paid-In Capital** | 60559 | 61961 | 59205 |
| **Equity Attributable to Non-Controlling Interest** | (690) | (656) | (633) |
| **Retained Earnings** | 163035 | 166600 | 150505 |
| **Accumulated Other Comprehensive Gain (Loss)** | 210 | 141 | (574) |
| **Treasury Stock** | (43896) | (45420) | (43618) |
| **Total Equity** | 179314 | 182722 | 164981 |
| **Total Liabilities and Equity** | $521441 | $523681 | $447376 |

---