Delta Q1 net sales up 5.3 percent

Delta Apparel reported that it achieved record revenue for its fiscal 2013

first quarter ended September 30, 2012. Net sales for the fiscal 2013 first quarter were 130.1 million dollars (Rs 696 crores), a 5.3 percent increase over 2012 first quarter sales of 123.5 million dollars (Rs 661 crores). Net income for the 2013 first quarter was 3.6 million dollars (Rs 19 crores), or 0.41 dollars (Rs 21.9) per diluted share, compared with 4.4 million dollars (Rs 23 crores), or 0.50 dollars (Rs 26.7) per diluted share, in the prior year quarter.

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.

Fiscal 2013 first-quarter net sales for Delta’s basics segment rose 26.6 percent to 66.5 million dollars (Rs 356 crores), compared with 52.6 million dollars (Rs 281 crores) 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.

Robert W. Humphreys, Delta Apparel’s Chairman and Chief Executive Officer, said that Delta’s solid first quarter put the Company in position to meet its full year financial goals. “We are now on the downside of the cotton price spike that hampered business during the previous fiscal year and can currently offer more competitive pricing while simultaneously improving margins. The market share gains realized in our basics segment during the first quarter are encouraging and our expectation is to build on this large base as the year progresses. We anticipate revenue growth at Junkfood, The Game and Art Gun during the remainder of the year, offset to some degree by sales declines in Soffe branded product at department stores.” Humphreys concluded, “We consider our fiscal 2013 first quarter an important start to meet our goals for the year. While there is a lot yet to be accomplished, we believe we are well positioned for further revenue growth and improved earnings.”

The company believes that the guidance previously provided for fiscal 2013, inclusive of the previously mentioned 1.2 million dollars (Rs 6 crore) first quarter charge, can be achieved. Based on anticipated net sales growth and higher unit volume leveraging fixed costs, the company expects to reach record revenues in the range of 500 to 510 million dollars (Rs 2,677 to 2, 731 crores) for fiscal 2013, or about a three percent increase over 2012.