Delta Apparel Inc. has been added to the Russell 2000 Index. The Russell 2000® Index measures the performance of the small-cap segment of the U.S. equity market. Each June, Russell realigns its equity indexes to reflect market changes in the largest U.S. listed stocks by market capitalization. Russell indexes are widely used by investment managers and institutional investors for index funds and as benchmarks for active investment strategies.
Delta Apparel’s inclusion in the Russell 2000 index follows a year of solid performance. During the 12 months ended April 2, 2016, the company’s operating profit increased to $20.2 million or 4.6 percent of net sales from $2.3 million or 0.5 percent of net sales in the prior 12 months and diluted earnings increased to $1.60 per share from $0.10 per share in the prior 12 months. The quarter ended April 2, 2016, marked the fourth consecutive quarter in which Delta Apparel reported margin expansion and improved profitability.
Delta Apparel’s strong operating performance was driven in part by the successful implementation of strategic initiatives announced in the past 18 months. These initiatives include streamlining the company’s administrative workforce; rationalizing its business units, product lines and sales channels to better focus on areas most strategic to the business; and enhancing its manufacturing platform to increase capacity and improve product flexibility. The result has been higher demand for Delta Apparel products, lower manufacturing costs, significant margin expansion and increased profitability.
The implementation of margin and profit improvement initiatives has continued into fiscal 2016. During the first half of the year, Delta Apparel expanded its production capabilities into open-width fabrics, which should reduce reliance on purchased fabric, enhance customer service, expand product offerings, and leverage fixed cost of internal production. In addition, Delta Apparel recently announced a further manufacturing realignment aimed at maximizing production at the Company’s lower-cost Honduras facility and eliminating duplicative fixed costs. Once completed, the realignment is expected to significantly lower production costs, improve gross margins and increase earnings by up to $0.70 per diluted share.
Robert W. Humphreys, Delta Apparel, Inc.’s chairman and chief executive officer, commented, “The company’s recent strong performance is a testament to the impact of the strategic initiatives we announced 18 months ago and our team’s ability to execute on them. While conditions in the retail apparel marketplace remain difficult, we have improved our business both financially and operationally. Although there is a lot of work to be done in the coming months to complete the newly announced manufacturing initiatives, we are excited about the positive impact it should have on our results for fiscal year 2017 and beyond.”
Delta Apparel, Inc., along with its operating subsidiaries, M. J. Soffe, LLC, Junkfood Clothing Company, Salt Life, LLC and Art Gun, LLC, has a diverse portfolio of lifestyle basic and branded activewear apparel and headwear.
