Delta Apparel’s Q4 Profit Climbs 52 Percent on 9 Percent Revenue Gain

Gross margins improved 340 basis points to 27.3 percent

Basics Segment Review

The basics segment had sales of $77.1 million for the quarter ended July 2, 2011, an increase of 6.5 percent compared to the prior year fourth quarter, driven by sales growth in catalog products, partially offset by declines in the private label programs. The revenue growth resulted from a 22.2 percent increase in average selling prices partially offset by lower unit sales. For the twelve months ended July 2, 2011, the basics segment had sales of $253.5 million, an 11.9 percent increase from sales of $226.6 million in the prior year driven from higher average selling prices offset by a slight decline in units sold. Higher selling prices, coupled with strong manufacturing results and the ability to leverage selling, general and administrative expenses, resulted in operating income of $8.8 million for the fourth fiscal quarter and $16.9 million for fiscal year 2011. This compares to operating income of $3.0 million in the fourth quarter of the prior year, and $2.9 million for fiscal year 2010.

Stock Repurchases

On August 17, 2011, the company�€�s Board of Directors approved a $5 million increase in the company�€�s Stock Repurchase Program, bringing the total authorization to $20 million. This marked the fourth increase since the program began in November 2000. Since inception, the company has spent approximately $12.1 million under the Stock Repurchase Program, buying back approximately 1.2 million shares at an average price of $9.81. In fiscal year 2011, the company spent $2.5 million repurchasing 177 thousand shares at an average of $14.18 per share. Approximately $8.0 million remains available for future stock repurchases pursuant to the Stock Repurchase Program.

Fiscal 2012 Guidance

The company is maintaining its fiscal year 2012 outlook for sales and earnings. For the fiscal year ending June 30, 2012, the company still expects net sales to be in the range of $500 to $520 million and earnings to be in the range of $2.00 to $2.15 per diluted share.

In fiscal year 2012 the company faces challenging market conditions as a result of the volatile cotton market, inflationary pressures and general economic conditions which continue to impact discretionary spending. Although the company believes it has taken these risks, as well as other factors, into consideration in determining the guidance for fiscal year 2012, the significance of the challenges, many of which are outside of the company�€�s control, creates heightened risk to the volatility of earnings in the upcoming fiscal year.

Humphreys concluded, “Over the past few years, through organic growth and acquisitions, we have built a strong portfolio of exciting brands. While we are currently operating in a macroeconomic environment that is not particularly conducive to consumer spending and could pose some near-term challenges, we believe our collection of brands provides Delta Apparel, Inc. with compelling long-term growth opportunities through further diversification of products and distribution channels. In addition, the strength of our balance sheet gives us the flexibility to continue to make prudent strategic investments for growth in the future. The recent increase in authorization for our Stock Repurchase Program also gives us the flexibility to invest in our own shares if we believe market conditions have caused our stock to be undervalued. We remain committed to building significant and sustained value for our shareholders.”