Knobias Clip Report (10-27-2008) DLA
Submitted By Knobias ClipReport
DLA: Management Comments on Positive Q1 Results; Expects Growth to Continue
Monday , October 27, 2008 11:04ET
By Fain Hughes, fhughes@knobias.com
Shares of Delta Apparel, Inc. (DLA) moved higher during Monday’s session after the Company reported financial results for its first quarter ended September 27, 2008.
Net sales for the three months ended September 27, 2008, were $91.4 million, an increase of $18.9 million, or 26.0%, from the prior year’s first quarter. Net income for the first quarter was $0.7 million, or $0.08 per diluted share compared to the prior year’s first quarter net loss of ($1.5 million), or ($0.18) per diluted share.
For the fiscal year ending June 27, 2009, the Company reiterated its expectation for net sales to be in the range of $340 to $360 million and earnings to be in the range of $0.70 to $0.90 per diluted share.
Robert W. Humphreys, President and CEO of Delta Apparel, commented in a conference call today, “We achieved sales growth across all of our business units. Demand for our apparel products remained healthy during the quarter and resulted in record revenues. Our two business segments now have two consecutive quarters of sales growth over the prior year, and we they are well positioned to continue their growth over the next several quarters.”
He continued, “Operational improvements were also made during the quarter, but some of these were offset by higher energy costs. We remain focused on improving our manufacturing efficiencies. We have started several new initiatives that will result in lower manufacturing costs over time.”
Deborah H. Merrill, CFO of Delta Apparel, added, “We believe that our inventories are well balanced to sustain growth in Q2. Our balance sheet improved nicely during the quarter. We are taking a very conservative approach to out capital spending in fiscal 2009 and expect capital spending of $4 million. If, however, we decide to further expand our Honduran textile facility, this could increase our capital spending by an additional $2-$3 million. We will not make this decision until further into the year, as we see how consumer spending holds up and what production levels are needed to support our business.”
Mr. Humphreys concluded, “Despite concerns about consumer demand for apparel, we are looking forward to meeting our objectives for 2009. Our operating divisions have implemented strategies designed to utilize their assets to sustain the internal growth that we have enjoyed over the past two quarters.”
“We remain cautious about our short term business prospects due to heightened risks in the apparel marketplace and the economy in general. Raw materials and energy prices remain volatile and could further impact our costs and consumer demand. Th overall retail environment is difficult for apparel. While the overall economic environment is tough, our short term indicators point us to successfully increasing our top line and profitability in 2009.”
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