Delta Apparel Inc. said it expects earnings to range between $1.37 per share and $1.39 per share in its fiscal year ended July 3, up from 76 cents a year ago. The apparel maker's revenues reached $424 million up from $355.2 million a year ago.
Delta Apparel said the sales increase was driven by organic growth in each of the company's four business units as well as full year sales from To The Game, which was acquired in the fourth quarter of the prior year.
In April, the company had reiterated its guidance of earnings of $1.20 to $1.30 per share in fiscal 2010. The company's forecast was for full-year sales of $400 million to $405 million.
The company plans to report fiscal 2010 full year results on Thursday, August 19, 2010 before the market opens.
Robert W. Humphreys, Chairman and Chief Executive Officer, commented, “Our fourth quarter performance was better than anticipated and represents a strong finish to another solid year of growth for Delta Apparel, Inc. In fiscal 2010 we achieved organic sales growth of 14% on top of 8% organic growth in fiscal 2009 which allowed us to exceed our full year expectations. This was particularly rewarding given the tough economic environment during the past several years.”
The Cotton Exchange
The company also announced that it completed the previously announced acquisition of substantially all of the net assets of HPM Apparel, Inc. d/b/a The Cotton Exchange on Monday, July 12, 2010. The Cotton Exchange designs and markets decorated casual apparel to college bookstores, the U.S. military and other retail accounts. The Cotton Exchange has a strong reputation selling USA made collegiate apparel to college bookstores under “The Cotton Exchange” brand. It also sells products under the brands of “TCX” and “Just for Us”.
The company will continue to operate The Cotton Exchange in its current location in Wendell, North Carolina. This facility includes screen print and embroidery decoration capacity and retail packaging services, providing customers a high-level of service with quick turn-around times. The Cotton Exchange was formed in 1984 and is recognized in the industry for the quality of its garments, graphic designs, and most importantly its service to customers.
Commenting on the company's most recent acquisition, Humphreys said, “Marking our seventh acquisition since 2003 and the third acquisition completed in the last fifteen months, The Cotton Exchange gives us another consumer recognized brand and further builds on our college licensed business. Built on its superior service, The Cotton Exchange brings new customer relationships that should allow us to further expand revenue and earnings in our retail ready segment. Having additional domestic screen print capacity should also allow us to service more quick turn programs through our other business units. We look forward to working with the experienced management team at The Cotton Exchange as we execute our growth strategy.”
Fiscal 2011 Guidance
For the 2011 fiscal year ending July 2, 2011, the Company expects net sales to be in the range of $455 to $465 million and earnings to be in the range of $1.55 to $1.70 per diluted share. The sales outlook for fiscal 2011 includes anticipated organic growth of approximately 5% after adjusting for one less week in fiscal 2011, and approximately $25 million in additional revenues from The Cotton Exchange.
The company remains concerned about the challenging economic conditions which continue to impact consumer demand for apparel. In addition, global yarn shortages and limited capacities in cargo freight have created further short-term challenges in the apparel marketplace. In determining its expectations for the upcoming year, the company believes it has taken into consideration these heightened risk factors.
Humphreys added, “In fiscal year 2010 we were successful in growing market share and improving our bottom line, despite less than ideal conditions. While there is still uncertainty and risk regarding the recovery of the general economy, we believe we are well positioned for continued sales growth and earnings expansion.”
