Benzinga | Oct 27, 2021 08:14AM EDT

Delta Apparel Sees Q4 2021 GAAP EPS $0.91-$0.94

Delta Apparel, Inc. (NYSE:DLA), a leading provider of core activewear and lifestyle apparel products, today announced preliminary results for its 2021 fiscal fourth quarter (the "September quarter").

The Company expects overall net sales for the 2021 September quarter to be approximately $114 million, an increase of about 6% over last year's fourth quarter sales calculated on a comparable 13-week basis. Earnings for the 2021 September quarter are anticipated to be in range of $0.91 to $0.94 per diluted share. Excluding a valuation gain on contingent consideration, the Company expects fourth quarter diluted EPS growth of over 20% compared to the prior year quarter.

Robert W. Humphreys, the Company's Chairman and Chief Executive Officer, commented, "In what remained a highly fluid period for our industry with many cross currents, we are extraordinarily proud of the strong finish to our 2021 fiscal year. The fourth quarter performance is a testament to the strength of our strategic model to service diversified sales channels utilizing our unique and flexible integrated manufacturing platform and broad geographic distribution network."

Humphreys continued, "Our Delta Group sales increased 5% as the custom and retail-direct business remained strong with brands and retailers alike seeing the advantages of our supply-chain partnership, with our near-shore, fully-integrated manufacturing platform and sourcing network. While our Delta catalog growth was constrained, particularly at the beginning of the quarter, from suboptimal inventory levels, our record-level manufacturing output allowed us to rebuild inventory as the quarter progressed. We expect this will continue through the first half of fiscal year 2022, positioning us for a strong spring selling season.

The powerful emotional connection consumers have with the Salt Life brand fueled strong, double-digit growth during our fourth quarter in our Salt Life retail doors, as well as through our wholesale channel. We recently announced the opening of five new Salt Life retail stores in Florida, South Carolina, and Alabama. The store openings are expected early next year as we gear up to meet the continued strong demand for the brand."

Humphreys concluded, "I remain extremely proud of the hard work and dedication of our personnel across all of our business units. Their unwavering focus on servicing our customers during these extraordinary times has enabled us to deliver powerful fourth quarter and full year fiscal 2021 results."

The Company expects net sales for fiscal 2021 to be approximately $436 million, an increase of about 14% from the prior year. Earnings for the fiscal 2021 are anticipated to be in range of $2.81 to $2.84 per diluted share. Total net debt, including capital lease financing and cash on hand, was about $121 million as of September 2021, a decrease of about $11 million from June 2021 and a decrease of about $1 million from net debt levels a year ago. Cash on hand and availability under the Company's U.S. revolving credit facility totaled about $45 million as of September 2021.

The Company remains optimistic about the broad-based opportunities for continued top-line growth and expanded profitability for the business in fiscal 2022 and beyond. The Company believes its future free cash flow, cash on hand, and availability under its credit facilities is sufficient to support the Company's growth initiatives while also providing liquidity for the Company to repurchase its common stock pursuant to its previously announced Share Repurchase Program or take other actions as the Board of Directors may deem appropriate to increase shareholder value.