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þ
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For The Fiscal Year Ended September 27, 2014
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Georgia
(State or other jurisdiction of
incorporation or organization)
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58-2508794
(I.R.S. Employer Identification No.)
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Title of Each Class
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Name of Each Exchange on Which Registered
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Common Stock, par value $0.01
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NYSE MKT LLC
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Large accelerated filer
o
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Accelerated filer
þ
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Non-accelerated filer
o
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Smaller reporting company
o
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(Do not check if a smaller reporting company)
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EX-10.1
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EX-21
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EX-23.1
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EX-31.1
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EX-31.2
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EX-32.1
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EX-32.2
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•
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the volatility and uncertainty of cotton and other raw material prices;
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•
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the general U.S. and international economic conditions;
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•
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the competitive conditions in the apparel industry;
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•
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restrictions on our ability to borrow capital or service our indebtedness;
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•
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the inability to successfully implement strategic initiatives;
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•
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deterioration in the financial condition of our customers and suppliers and changes in the operations and strategies of our customers and suppliers;
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•
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our ability to predict or react to changing consumer preferences or trends;
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•
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pricing pressures and the implementation of cost reduction strategies;
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•
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changes in economic, political or social stability at our offshore locations;
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•
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our ability to attract and retain key management;
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•
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the effect of unseasonable weather conditions on purchases of our products;
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•
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significant changes in our effective tax rate;
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•
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interest rate fluctuations increasing our obligations under our variable rate indebtedness;
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•
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the ability to raise additional capital;
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•
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the ability to grow, achieve synergies and realize the expected profitability of recent acquisitions;
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•
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the volatility and uncertainty of energy and fuel prices;
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•
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material disruptions in our information systems related to our business operations;
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•
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data security or privacy breaches;
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•
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significant interruptions within our manufacturing or distribution operations;
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•
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changes in or our ability to comply with safety, health and environmental regulations;
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•
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significant litigation in either domestic or international jurisdictions:
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•
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the ability to protect our trademarks and other intellectual property;
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•
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the ability to obtain and renew our significant license agreements;
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•
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the impairment of acquired intangible assets;
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•
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changes in e-commerce laws and regulations;
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•
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changes in international trade regulations;
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•
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changes in employment laws or regulations or our relationship with employees;
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•
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cost increases and reduction in future profitability due to recent healthcare legislation;
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•
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foreign currency exchange rate fluctuations;
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•
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violations of manufacturing standards or labor laws or unethical business practices by our suppliers and independent contractors;
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•
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the illiquidity of our shares;
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•
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price volatility in our shares and the general volatility of the stock market; and
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•
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the costs required to comply with the regulatory landscape regarding public company governance and disclosure.
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ITEM 1.
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BUSINESS
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Business
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Date of Acquisition
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Business Segment
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Salt Life
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August 27, 2013
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Branded
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The Cotton Exchange
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July 12, 2010
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Branded
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Art Gun
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December 28, 2009
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Basics
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To The Game
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March 29, 2009
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Branded
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FunTees
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October 2, 2006
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Basics
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Intensity Athletics
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October 3, 2005
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Branded
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Junkfood Clothing
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August 22, 2005
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Branded
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M.J. Soffe
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October 3, 2003
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Branded
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ITEM 1A.
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RISK FACTORS
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ITEM 1B.
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UNRESOLVED STAFF COMMENTS
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ITEM 2.
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PROPERTIES
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Location
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Utilization
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Segment
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Maiden Plant, Maiden, NC
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Knit/dye/finish/cut
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Basics and branded
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Ceiba Textiles, Honduras*
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Knit/dye/finish/cut
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Basics and branded
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Honduras Plant, San Pedro Sula, Honduras*
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Sew
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Basics and branded
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Cortes Plant, San Pedro Sula, Honduras*
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Sew
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Basics and branded
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Mexico Plant, Campeche, Mexico*
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Cut/sew
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Basics and branded
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Textiles LaPaz, La Paz, El Salvador*
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Cut/sew/decoration
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Basics and branded
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Campeche Sportswear, Campeche, Mexico*
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Sew/decoration
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Basics and branded
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Fayetteville Plant, Fayetteville, NC
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Sew/decoration
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Branded
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Rowland Plant, Rowland, NC
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Sew
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Basics and branded
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Art Gun, Miami, FL*
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Decoration/distribution
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Branded
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Downing Drive, Phenix City, AL*
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Decoration/distribution
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Branded
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Warehouse, Louisville, KY*
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Distribution
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Branded
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Distribution Center, Clinton, TN
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Distribution
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Basics
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Distribution Center, Santa Fe Springs, CA*
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Distribution
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Basics and branded
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Distribution Center, Miami, FL*
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Distribution
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Basics and branded
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Distribution Center, Cranbury, NJ*
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Distribution
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Basics and branded
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Distribution Center, Dallas, TX**
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Distribution
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Basics
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DC Annex, Fayetteville, NC*
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Distribution
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Branded
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*
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Denotes leased location
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ITEM 3.
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LEGAL PROCEEDINGS
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ITEM 5.
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MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.
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High
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Low
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Sale Price
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Sale Price
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Fiscal Year 2014:
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September Quarter
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$16.62
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$8.21
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June Quarter
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$17.60
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$13.25
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March Quarter
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$18.15
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$14.37
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December Quarter
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$19.23
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$15.23
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Transition Period:
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September Quarter
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$17.97
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$14.07
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Fiscal Year 2013:
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June Quarter
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$16.95
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$12.80
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March Quarter
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$17.84
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$13.50
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December Quarter
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$15.78
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$13.75
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September Quarter
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$14.96
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$12.65
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2009
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2010
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2011
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2012
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2013
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2014
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Delta Apparel, Inc.
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$
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100.00
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$
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203.50
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$
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252.12
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$
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199.42
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$
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205.84
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$
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128.47
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CRSP NYSE MKT Index (US)
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$
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100.00
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$
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116.11
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$
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146.63
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$
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141.51
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$
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141.57
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$
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182.53
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CRSP NYSE MKT Wholesale & Retail Trade Index
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$
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100.00
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$
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144.48
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$
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155.58
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$
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158.77
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$
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210.75
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$
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218.70
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ITEM 6.
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SELECTED FINANCIAL DATA
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Period Ended
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September 27,
2014 |
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September 28,
2013 |
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June 29,
2013 |
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June 30,
2012 |
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July 2,
2011 |
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July 3,
2010 |
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(In thousands, except per share amounts)
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Statement of Operations Data:
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Net sales
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$
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452,901
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$
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122,559
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$
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490,523
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$
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489,923
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$
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475,236
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$
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424,411
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Cost of goods sold
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(367,160
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)
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(95,439
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)
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(381,014
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)
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(406,200
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)
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(359,001
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)
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(323,628
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)
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Selling, general and administrative expenses
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(86,275
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)
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(26,588
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)
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(94,944
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)
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(89,973
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)
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(91,512
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)
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(80,695
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)
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Valuation adjustment, net
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—
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—
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—
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—
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918
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—
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Change in fair value of contingent consideration
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(200
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)
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—
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—
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—
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—
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—
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Other (expense) income, net
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(927
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)
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24
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(662
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)
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28
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(345
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)
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74
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Operating (loss) income
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(1,661
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)
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556
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13,903
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(6,222
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)
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25,296
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20,162
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Interest expense, net
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5,792
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1,033
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3,997
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4,132
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2,616
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3,509
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Loss (earnings) before income taxes
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(7,453
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)
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(477
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)
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9,906
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(10,354
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)
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22,680
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16,653
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(Benefit from) provision for income taxes
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(6,493
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)
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(1,045
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)
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722
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(7,907
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)
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5,353
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4,466
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Net (loss) earnings
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$
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(960
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)
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$
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568
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$
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9,184
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$
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(2,447
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)
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$
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17,327
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$
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12,187
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Basic (loss) earnings per common share:
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$
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(0.12
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)
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$
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0.07
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$
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1.12
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$
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(0.29
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)
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$
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2.04
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$
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1.43
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Diluted (loss) earnings per common share:
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$
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(0.12
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)
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$
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0.07
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$
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1.08
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$
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(0.29
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)
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$
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1.98
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$
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1.40
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Dividends declared per common share
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$
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—
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$
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—
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$
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—
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$
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—
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$
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—
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$
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—
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Balance Sheet Data (at year end):
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Working capital
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$
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156,695
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$
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171,681
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$
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173,435
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$
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187,029
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$
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160,646
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$
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125,163
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Total assets
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355,015
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351,762
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311,910
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320,394
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311,865
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251,333
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Total long-term debt, less current maturities
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114,469
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131,030
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94,763
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110,949
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83,974
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62,355
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||||||
Shareholders’ equity
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138,207
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138,872
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141,066
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138,967
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141,965
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|
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125,714
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ITEM 7.
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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
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Year Ended
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||||||
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September 27,
2014 |
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September 28,
2013 |
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Net (loss) income
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$
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(960
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)
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$
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6,188
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Adjustments for:
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Costs associated with strategic initiatives
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4,021
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—
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Income tax recovery on strategic initiative-related costs
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(1,548
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)
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—
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Adjusted net income
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$
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1,513
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$
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6,188
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Basic (loss) earnings per share
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$
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(0.12
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)
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$
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0.76
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Diluted (loss) earnings per share
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$
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(0.12
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)
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$
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0.74
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Adjusted diluted earnings per share
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$
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0.19
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$
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0.74
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Payments Due by Period (in thousands)
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||||||||||||||||||
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Total
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Less than
1 year
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1 - 3
years
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3 – 5
years
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After 5
years
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||||||||||
Contractual Obligations:
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||||||||||
Long-term debt (a)
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$
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133,593
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$
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16,734
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$
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103,776
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|
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$
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12,356
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$
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727
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Operating leases
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25,742
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|
|
7,993
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|
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11,761
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4,805
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1,183
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|||||
Capital leases
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855
|
|
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171
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|
|
342
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|
|
342
|
|
|
—
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|||||
Minimum royalty payments
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4,376
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|
|
1,606
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|
|
2,766
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|
4
|
|
|
—
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|
|||||
Purchase obligations
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37,827
|
|
|
37,827
|
|
|
—
|
|
|
—
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|
|
—
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|
|||||
Total (b)
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$
|
202,393
|
|
|
$
|
64,331
|
|
|
$
|
118,645
|
|
|
$
|
17,507
|
|
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$
|
1,910
|
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(a)
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We include interest on our fixed rate debt as a component of our future obligations. However, we exclude interest payments on our floating rate debt since the majority is under a revolving credit facility and the cash outlay for the interest is unknown and cannot be reliably estimated. Interest payments will be determined based upon the daily outstanding balance of the revolving credit facility and the prevailing interest rate during that time.
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(b)
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We excluded deferred income tax liabilities of $7.7 million from the contractual cash obligations table because we believe inclusion would not be meaningful. Refer to Note 9 - Income Taxes to our Consolidated Financial Statements for more information on our deferred income tax liabilities. Deferred income tax liabilities are calculated based on temporary differences between tax bases of assets and liabilities and their respective book bases, which will result in taxable amounts in future years when the liabilities are settled at their reported financial statement amounts. The results of these calculations do not have a direct connection with the amount of cash taxes to be paid in any future periods and therefore would not relate to liquidity needs. As a result, including deferred income tax liabilities as payments due by period in the schedule could be misleading.
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ITEM 7A.
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QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
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ITEM 8.
|
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
|
ITEM 9.
|
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
|
ITEM 9A.
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CONTROLS AND PROCEDURES
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ITEM 9B.
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OTHER INFORMATION
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ITEM 10.
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DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
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ITEM 11.
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EXECUTIVE COMPENSATION
|
ITEM 12.
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
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Plan Category
|
|
Number of securities to
be issued upon exercise of outstanding options, warrants and rights |
|
Weighted-average
exercise price of outstanding options, warrants and rights |
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Number of securities
remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) |
||||
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(a)
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(b)
|
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(c)
|
||||
Equity compensation plans approved by security holders
|
|
265,352
|
|
|
$
|
2.54
|
|
|
562,939
|
|
Equity compensation plans not approved by security holders
|
|
502,000
|
|
|
$
|
12.27
|
|
|
—
|
|
Total
|
|
767,352
|
|
|
$
|
10.29
|
|
|
562,939
|
|
ITEM 13.
|
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
|
ITEM 14.
|
PRINCIPAL ACCOUNTANT FEES AND SERVICES
|
ITEM 15.
|
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
|
2.1
|
Amended and Restated Stock Purchase Agreement dated as of October 3, 2003, among Delta Apparel, Inc., MJS Acquisition Company, M. J. Soffe Co., James F. Soffe, John D. Soffe, and Anthony M. Cimaglia (excluding schedules and exhibits): Incorporated by reference to Exhibit 2.1 to the Company’s Form 8-K/A filed on October 17, 2003.
|
2.1.1
|
First Amendment to Amended and Restated Stock Purchase Agreement dated as of November 10, 2004, among Delta Apparel, Inc., M. J. Soffe Co., James F. Soffe, John D. Soffe, and Anthony M. Cimaglia: Incorporated by reference to Exhibit 2.2.1 to the Company’s Form 10-Q filed on February 9, 2005.
|
2.2
|
Asset Purchase Agreement dated as of August 22, 2005, among Delta Apparel, Inc., Junkfood Clothing Company, Liquid Blaino Designs, Inc. d/b/a Junkfood Clothing, Natalie Grof, and Blaine Halvorson (excluding schedules and exhibits): Incorporated by reference to Exhibit 2.1 to the Company’s Form 8-K filed on August 26, 2005.
|
2.3
|
Asset Purchase Agreement dated as of August 17, 2006, among Delta Apparel, Inc., Fun-Tees, Inc., Henry T. Howe, James C. Poag, Jr., Beverly H. Poag, Lewis G. Reid, Jr., Kurt R. Rawald, Larry L. Martin, Jr., Julius D. Cline and Marcus F. Weibel: Incorporated by reference to Exhibit 2.1 to the Company’s Form 8-K filed on August 21, 2006.
|
2.4
|
Asset Purchase Agreement dated as of November 18, 2004, among Delta Apparel, Inc. and Parkdale America LLC: Incorporated by reference to Exhibit 2.3 to the Company's Form 10-Q filed on February 9, 2005.
|
2.4.1
|
First Amendment to Asset Purchase Agreement dated as of December 31, 2004, among Delta Apparel, Inc. and Parkdale America LLC: Incorporated by reference to Exhibit 2.3.1 to the Company's Form 10-Q filed on February 9, 2005.
|
2.5
|
Asset Purchase Agreement dated as of August 27, 2013, among To The Game, LLC, Salt Life Holdings, LLC, Roger L. Combs, Sr., Donald R. Combs, Richard Thompson, and Michael T. Hutto (excluding schedules and exhibits): Incorporated by reference to Exhibit 2.1 to the Company’s Form 8-K filed on August 29, 2013.
|
3.1.1
|
Articles of Incorporation of the Company: Incorporated by reference to Exhibit 3.1 to the Company’s Form 10-12B filed on December 30, 1999.
|
3.1.2
|
Amendment to Articles of Incorporation of the Company dated September 18, 2003: Incorporated by reference to Exhibit 3.1.2 to the Company’s Form 10-Q filed on November 5, 2003.
|
3.1.3
|
Amendment to Articles of Incorporation of the Company dated April 28, 2005: Incorporated by reference to Exhibit 3.1.3 to the Company’s Form 8-K filed on April 29, 2005.
|
3.1.4
|
Amendment to Articles of Incorporation of the Company dated November 8, 2007: Incorporated by reference to Exhibit 3.1.4 to the Company’s Form 10-K filed on August 28, 2009.
|
3.2.1
|
Bylaws of the Company: Incorporated by reference to Exhibit 3.2.1 to the Company’s Form 10-K filed on August 28, 2009.
|
3.2.2
|
Amendment to Bylaws of the Company adopted January 20, 2000: Incorporated by reference to Exhibit 3.2.2 to the Company’s Form 10-K filed on August 28, 2009.
|
3.2.3
|
Amendment to Bylaws of the Company adopted February 17, 2000: Incorporated by reference to Exhibit 3.2.3 to the Company’s Form 10-K filed on August 28, 2009.
|
3.2.4
|
Amendment to Bylaws of the Company adopted June 6, 2000: Incorporated by reference to Exhibit 3.2.4 to the Company’s Form 10-K filed on August 28, 2009.
|
3.2.5
|
Amendment to Bylaws dated August 17, 2006: Incorporated by reference to Exhibit 3.2.5 to the Company’s Form 10-K filed on August 28, 2009.
|
3.2.6
|
Amendment to Bylaws dated August 12, 2009: Incorporated by reference to Exhibit 3.2.6 to the Company’s Form 10-K filed on August 28, 2009.
|
4.1
|
See Exhibits 3.1.1, 3.1.2, 3.1.3, 3.1.4, 3.2.1, 3.2.2, 3.2.3, 3.2.4, 3.2.5, and 3.2.6.
|
4.2
|
Specimen certificate for common stock, par value $0.01 per share, of the Company: Incorporated by reference to Exhibit 4.2 to the Company’s Form 10-12 B/A filed on May 3, 2000.
|
10.1
|
See Exhibits 2.1, 2.1.1, 2.2, 2.3, 2.4, 2.4.1 and 2.5.
|
10.2
|
Fourth Amended and Restated Loan and Security Agreement, dated May 27, 2011, among Delta Apparel, Inc., M.J. Soffe, LLC (successor by merger to TCX, LLC), Junkfood Clothing Company, To The Game, LLC, and Art Gun, LLC, the financial institutions named therein as Lenders, Wells Fargo Bank, National Association, as Administrative Agent, Bank of America, N.A., as Syndication Agent, Wells Fargo Capital Finance, LLC, as Sole Lead Arranger, and Wells Fargo Capital Finance, LLC and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as Joint Bookrunners: Incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K filed on June 3, 2011.
|
10.2.1
|
Consent and First Amendment to Fourth Amended and Restated Loan and Security Agreement, dated August 27, 2013, among Delta Apparel, Inc., M.J. Soffe, LLC (successor by merger to TCX, LLC), Junkfood Clothing Company, To The Game, LLC, and Art Gun, LLC, the financial institutions named therein as Lenders, Wells Fargo Bank, National Association, as Administrative Agent, Bank of America, N.A., as Syndication Agent, Wells Fargo Capital Finance, LLC, as Sole Lead Arranger, and Wells Fargo Capital Finance, LLC and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as Joint Bookrunners: Incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K filed on August 29, 2013.
|
10.2.2
|
Third Amendment to Fourth Amended and Restated Loan and Security Agreement, dated September 26, 2014, among Delta Apparel, Inc., M.J. Soffe, LLC (successor by merger to TCX, LLC), Junkfood Clothing Company, To The Game, LLC, and Art Gun, LLC, the financial institutions named therein as Lenders, Wells Fargo Bank, National Association, as Administrative Agent, Bank of America, N.A., as Syndication Agent, Wells Fargo Capital Finance, LLC, as Sole Lead Arranger, and Wells Fargo Capital Finance, LLC and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as Joint Bookrunners: Incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K filed on October 1, 2014.
|
10.3
|
Delta Apparel, Inc. 2000 Stock Option Plan, Effective as of February 15, 2000, Amended & Restated March 15, 2000: Incorporated by reference to Exhibit 10.4 to the Company’s Form 10-12B/A filed on March 31, 2000.***
|
10.4
|
Delta Apparel, Inc. Incentive Stock Award Plan, Effective February 15, 2000, Amended & Restated March 15, 2000: Incorporated by reference to Exhibit 10.5 to the Company’s Form 10-12B/A filed on March 31, 2000.***
|
10.5
|
Delta Apparel, Inc. 2010 Stock Plan: Incorporated by reference to Exhibit 99.2 to the Company’s Form 8-K filed on November 4, 2010.***
|
10.6
|
Yarn Supply Agreement dated as of January 5, 2005, between Delta Apparel, Inc. and Parkdale Mills, LLC and Parkdale America, LLC: Incorporated by reference to Exhibit 10.29 to the Company’s Form 10-Q filed on February 9, 2005.**
|
10.6.1
|
First Amendment to Yarn Supply Agreement dated as of June 26, 2009 between Delta Apparel, Inc. and Parkdale Mills, LLC, and Parkdale America, LLC.: Incorporated by reference to Exhibit 10.7.1 to the Company’s Form 10-K filed on August 28, 2009.**
|
10.6.2
|
Second Amendment to Yarn Supply Agreement dated as of October 21, 2011 between Delta Apparel, Inc. and Parkdale Mills, LLC, and Parkdale America, LLC.: Incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K filed on October 25, 2011.**
|
10.6.3
|
Third Amendment to Yarn Supply Agreement dated as of March 11, 2013, between Delta Apparel, Inc. and Parkdale Mills, LLC, and Parkdale America, LLC.: Incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K filed on March 14, 2013.**
|
10.7
|
Employment Agreement between Delta Apparel, Inc. and Deborah H. Merrill dated December 31, 2012: Incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K filed on January 3, 2013.***
|
10.8
|
Employment Agreement between Delta Apparel, Inc. and Martha M. Watson dated December 31, 2012: Incorporated by reference to Exhibit 10.3 to the Company’s Form 8-K filed on January 3, 2013.***
|
10.9
|
Employment Agreement between Delta Apparel, Inc. and Steven E. Cochran dated December 31, 2012: Incorporated by reference to Exhibit 10.2 to the Company's Form 8-K filed on January 3, 2013.***
|
10.9.1
|
Amendment to Employment Agreement between Delta Apparel, Inc. and Steven E. Cochran dated January 28, 2013: Incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K filed on January 29, 2013.***
|
10.11
|
Employment Agreement between Delta Apparel, Inc. and Robert W. Humphreys dated June 10, 2009: Incorporated by reference to Exhibit 10.11 to the Company’s Form 10-K filed on August 28, 2009.***
|
10.11.1
|
First Amendment to Employment Agreement between Delta Apparel, Inc. and Robert W. Humphreys dated August 17, 2011: Incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K filed on August 19, 2011.***
|
10.11.2
|
Second Amendment to Employment Agreement between Delta Apparel, Inc. and Robert W. Humphreys dated June 6, 2012: Incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K filed on June 8, 2012.***
|
10.11.3
|
Third Amendment to Employment Agreement between Delta Apparel, Inc. and Robert W. Humphreys dated December 5, 2014: Incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K filed on December 8, 2014:.***
|
10.12
|
Form of Restricted Stock Unit and Performance Unit Award Agreement: Incorporated by reference to Exhibit 10.1 to the Company's Form 10-Q filed on November 3, 2011.***
|
10.13
|
Delta Apparel Short-Term Incentive Compensation Plan: Incorporated by reference to Exhibit A to the Company's Proxy Statement filed on September 28, 2011.***
|
10.14
|
Form of Restricted Stock Unit and Performance Unit Award Agreement: Incorporated by reference to Exhibit 10.14 to the Company's Form 10-K filed on August 29, 2013.***
|
10.15
|
Agreement between Delta Apparel, Inc. and IMG Worldwide, Inc. dated December 6, 2013: Incorporated by reference to Exhibit 10.1 to the Company's Form 8-K filed on December 6, 2013.
|
10.16
|
Form of Restricted Stock Unit Award Agreement.***
|
10.17
|
Form of Performance Unit Award Agreement.***
|
16
|
February 13, 2014, Correspondence from Ernst & Young LLP to SEC: Incorporated by reference to Exhibit 16.1 to the Company's Form 8-K filed on February 13, 2014.
|
21
|
Subsidiaries of the Company.
|
23.1
|
Consent of Independent Registered Public Accounting Firm.
|
23.2
|
Consent of Independent Registered Public Accounting Firm.
|
31.1
|
Certification of the Chief Executive Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
31.2
|
Certification of the Chief Financial Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
32.1
|
Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
32.2
|
Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
*
|
|
All reports previously filed by the Company with the Commission pursuant to the Securities Exchange Act, and the rules and regulations promulgated thereunder, exhibits of which are incorporated to this Report by reference thereto, were filed under Commission File Number 1-15583.
|
**
|
|
Portions of this exhibit have been omitted pursuant to a request for confidential treatment and have been filed separately with the Securities and Exchange Commission.
|
***
|
|
This is a management contract or compensatory plan or arrangement.
|
|
|
DELTA APPAREL, INC.
|
|
|
(Registrant)
|
|
|
|
December 10, 2014
|
|
By: /s/ Deborah H. Merrill
|
Date
|
|
Deborah H. Merrill
|
|
|
Vice President, Chief Financial
Officer and Treasurer
|
|
|
(principal financial and accounting officer)
|
|
||||
|
|
|
|
|
|
|
|
|
|
/s/ James A. Cochran
|
12/9/2014
|
|
/s/ Deborah H. Merrill
|
12/10/2014
|
James A. Cochran
|
Date
|
|
Deborah H. Merrill
|
Date
|
Director
|
|
|
Vice President, Chief Financial Officer and
|
|
|
|
|
Treasurer (principal financial and accounting officer)
|
|
|
|
|
|
|
/s/ Sam P. Cortez
|
12/9/2014
|
|
/s/ David Peterson
|
12/6/2014
|
Sam P. Cortez
|
Date
|
|
David Peterson
|
Date
|
Director
|
|
|
Director
|
|
|
|
|
|
|
/s/ Elizabeth J. Gatewood
|
12/9/2014
|
|
/s/ Suzanne B. Rudy
|
12/9/2014
|
Elizabeth J. Gatewood
|
Date
|
|
Suzanne B. Rudy
|
Date
|
Director
|
|
|
Director
|
|
|
|
|
|
|
/s/ G. Jay Gogue
|
12/9/2014
|
|
/s/ Robert E. Staton, Sr
|
12/8/2014
|
G. Jay Gogue
|
Date
|
|
Robert E. Staton, Sr.
|
Date
|
Director
|
|
|
Director
|
|
|
|
|
|
|
/s/ Robert W. Humphreys
|
12/10/2014
|
|
|
|
Robert W. Humphreys
|
Date
|
|
|
|
Chairman and Chief Executive Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 27, 2014
|
|
September 28, 2013
|
|
June 29, 2013
|
||||||
Assets
|
|
|
|
|
|
||||||
Cash and cash equivalents
|
$
|
612
|
|
|
$
|
829
|
|
|
$
|
598
|
|
Accounts receivable, net
|
68,181
|
|
|
68,028
|
|
|
74,415
|
|
|||
Other receivables
|
621
|
|
|
679
|
|
|
412
|
|
|||
Income tax receivable
|
1,360
|
|
|
1,232
|
|
|
2,238
|
|
|||
Inventories, net
|
162,188
|
|
|
165,190
|
|
|
159,514
|
|
|||
Prepaid expenses and other current assets
|
4,534
|
|
|
3,786
|
|
|
4,129
|
|
|||
Deferred income taxes
|
12,152
|
|
|
5,981
|
|
|
4,556
|
|
|||
Total current assets
|
249,648
|
|
|
245,725
|
|
|
245,862
|
|
|||
|
|
|
|
|
|
||||||
Property, plant and equipment, net
|
41,005
|
|
|
40,600
|
|
|
39,446
|
|
|||
Goodwill
|
36,729
|
|
|
36,729
|
|
|
16,812
|
|
|||
Intangibles, net
|
23,500
|
|
|
24,837
|
|
|
6,190
|
|
|||
Other assets
|
3,696
|
|
|
3,871
|
|
|
3,600
|
|
|||
Total assets
|
$
|
354,578
|
|
|
$
|
351,762
|
|
|
$
|
311,910
|
|
|
|
|
|
|
|
||||||
Liabilities and Shareholders’ Equity
|
|
|
|
|
|
||||||
Liabilities:
|
|
|
|
|
|
||||||
Accounts payable
|
$
|
57,719
|
|
|
$
|
52,877
|
|
|
$
|
50,472
|
|
Accrued expenses
|
20,167
|
|
|
17,463
|
|
|
18,426
|
|
|||
Current portion of long-term debt
|
15,504
|
|
|
3,704
|
|
|
3,529
|
|
|||
Total current liabilities
|
93,390
|
|
|
74,044
|
|
|
72,427
|
|
|||
|
|
|
|
|
|
||||||
Long-term debt, less current maturities
|
114,469
|
|
|
131,030
|
|
|
94,763
|
|
|||
Deferred income taxes
|
3,399
|
|
|
3,610
|
|
|
3,571
|
|
|||
Other liabilities
|
1,513
|
|
|
806
|
|
|
83
|
|
|||
Contingent Consideration
|
3,600
|
|
|
3,400
|
|
|
—
|
|
|||
Total liabilities
|
$
|
216,371
|
|
|
$
|
212,890
|
|
|
$
|
170,844
|
|
|
|
|
|
|
|
||||||
Commitments and contingencies
|
|
|
|
|
|
||||||
|
|
|
|
|
|
||||||
Shareholders’ equity:
|
|
|
|
|
|
||||||
Preferred stock—$0.01 par value, 2,000,000 shares authorized, none issued and outstanding
|
—
|
|
|
—
|
|
|
—
|
|
|||
Common stock —$0.01 par value, 15,000,000 shares authorized, 9,646,972 shares issued, and 7,877,674 and 7,873,848 and 7,922,784 shares outstanding as of September 27, 2014, September 28, 2013 and June 29, 2013, respectively
|
96
|
|
|
96
|
|
|
96
|
|
|||
Additional paid-in capital
|
59,649
|
|
|
59,425
|
|
|
60,598
|
|
|||
Retained earnings
|
99,622
|
|
|
100,582
|
|
|
100,014
|
|
|||
Accumulated other comprehensive loss
|
(269
|
)
|
|
(557
|
)
|
|
(82
|
)
|
|||
Treasury stock —1,769,298 and 1,773,124 and 1,724,188 shares as of September 27, 2014, September 28, 2013 and June 29, 2013, respectively
|
(20,891
|
)
|
|
(20,674
|
)
|
|
(19,560
|
)
|
|||
Total shareholders’ equity
|
138,207
|
|
|
138,872
|
|
|
141,066
|
|
|||
Total liabilities and shareholders’ equity
|
$
|
354,578
|
|
|
$
|
351,762
|
|
|
$
|
311,910
|
|
|
Fiscal Year Ended
|
|
13-Week Transition Period Ended
|
|
Fiscal Year Ended
|
|
Fiscal Year Ended
|
||||||||
|
September 27, 2014
|
|
September 28, 2013
|
|
June 29, 2013
|
|
June 30, 2012
|
||||||||
Net sales
|
$
|
452,901
|
|
|
$
|
122,559
|
|
|
$
|
490,523
|
|
|
$
|
489,923
|
|
Cost of goods sold
|
367,160
|
|
|
95,439
|
|
|
381,014
|
|
|
406,200
|
|
||||
Gross profit
|
85,741
|
|
|
27,120
|
|
|
109,509
|
|
|
83,723
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Selling, general and administrative expenses
|
86,275
|
|
|
26,588
|
|
|
94,944
|
|
|
89,973
|
|
||||
Change in fair value of contingent consideration
|
200
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Other expense (income), net
|
927
|
|
|
(24
|
)
|
|
662
|
|
|
(28
|
)
|
||||
Operating (loss) income
|
(1,661
|
)
|
|
556
|
|
|
13,903
|
|
|
(6,222
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Interest expense
|
5,792
|
|
|
1,033
|
|
|
3,997
|
|
|
4,132
|
|
||||
(Loss) earnings before (benefit from) provision for income taxes
|
(7,453
|
)
|
|
(477
|
)
|
|
9,906
|
|
|
(10,354
|
)
|
||||
(Benefit from) provision for income taxes
|
(6,493
|
)
|
|
(1,045
|
)
|
|
722
|
|
|
(7,907
|
)
|
||||
Net (loss) earnings
|
$
|
(960
|
)
|
|
$
|
568
|
|
|
$
|
9,184
|
|
|
$
|
(2,447
|
)
|
|
|
|
|
|
|
|
|
||||||||
Basic (loss) earnings per share
|
$
|
(0.12
|
)
|
|
$
|
0.07
|
|
|
$
|
1.12
|
|
|
$
|
(0.29
|
)
|
Diluted (loss) earnings per share
|
$
|
(0.12
|
)
|
|
$
|
0.07
|
|
|
$
|
1.08
|
|
|
$
|
(0.29
|
)
|
|
|
|
|
|
|
|
|
||||||||
Weighted average number of shares outstanding
|
7,901
|
|
|
7,848
|
|
|
8,234
|
|
|
8,453
|
|
||||
Dilutive effect of stock options and awards
|
—
|
|
|
227
|
|
|
252
|
|
|
—
|
|
||||
Weighted average number of shares assuming dilution
|
7,901
|
|
|
8,075
|
|
|
8,486
|
|
|
8,453
|
|
|
Fiscal Year Ended
|
|
13-Week Transition Period Ended
|
|
Fiscal Year Ended
|
|
Fiscal Year Ended
|
||||||||
|
September 27,
2014 |
|
September 28,
2013 |
|
June 29,
2013 |
|
June 30,
2012 |
||||||||
Net (loss) earnings
|
$
|
(960
|
)
|
|
$
|
568
|
|
|
$
|
9,184
|
|
|
$
|
(2,447
|
)
|
Other comprehensive income (loss) related to unrealized gain (loss) on derivatives, net of income tax
|
288
|
|
|
(475
|
)
|
|
47
|
|
|
(115
|
)
|
||||
Comprehensive (loss) income
|
$
|
(672
|
)
|
|
$
|
93
|
|
|
$
|
9,231
|
|
|
$
|
(2,562
|
)
|
|
|
|
|
|
|
|
|
|
Accumulated
|
|
|
|
|
||||||||||||||||
|
|
|
|
|
Additional
|
|
|
|
Other
|
|
|
|
|
||||||||||||||||
|
Common Stock
|
|
Paid-In
|
|
Retained
|
|
Comprehensive
|
|
Treasury Stock
|
|
|
||||||||||||||||||
|
Shares
|
|
Amount
|
|
Capital
|
|
Earnings
|
|
Income (Loss)
|
|
Shares
|
|
Amount
|
|
Total
|
||||||||||||||
Balance at July 2, 2011
|
9,646,972
|
|
|
$
|
96
|
|
|
$
|
59,750
|
|
|
$
|
93,277
|
|
|
$
|
(14
|
)
|
|
1,225,109
|
|
|
$
|
(11,144
|
)
|
|
$
|
141,965
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Net loss and other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,447
|
)
|
|
(115
|
)
|
|
—
|
|
|
—
|
|
|
(2,562
|
)
|
||||||
Stock grant
|
—
|
|
|
—
|
|
|
(83
|
)
|
|
—
|
|
|
—
|
|
|
(9,000
|
)
|
|
83
|
|
|
—
|
|
||||||
Stock options exercised
|
—
|
|
|
—
|
|
|
(1,559
|
)
|
|
—
|
|
|
—
|
|
|
(161,966
|
)
|
|
1,506
|
|
|
(53
|
)
|
||||||
Excess tax benefits from option exercises
|
—
|
|
|
—
|
|
|
529
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
529
|
|
||||||
Purchase of common stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
168,120
|
|
|
(2,642
|
)
|
|
(2,642
|
)
|
||||||
Employee stock based compensation
|
—
|
|
|
—
|
|
|
1,730
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,730
|
|
||||||
Balance at June 30, 2012
|
9,646,972
|
|
|
96
|
|
|
60,367
|
|
|
90,830
|
|
|
(129
|
)
|
|
1,222,263
|
|
|
(12,197
|
)
|
|
138,967
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Net earnings and other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
9,184
|
|
|
47
|
|
|
—
|
|
|
—
|
|
|
9,231
|
|
||||||
Stock grant
|
—
|
|
|
—
|
|
|
(115
|
)
|
|
—
|
|
|
—
|
|
|
(11,250
|
)
|
|
115
|
|
|
—
|
|
||||||
Stock options exercised
|
—
|
|
|
—
|
|
|
(553
|
)
|
|
—
|
|
|
—
|
|
|
(31,401
|
)
|
|
339
|
|
|
(214
|
)
|
||||||
Excess tax benefits from option exercises
|
—
|
|
|
—
|
|
|
34
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
34
|
|
||||||
Purchase of common stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
544,576
|
|
|
(7,817
|
)
|
|
(7,817
|
)
|
||||||
Employee stock based compensation
|
—
|
|
|
—
|
|
|
865
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
865
|
|
||||||
Balance at June 29, 2013
|
9,646,972
|
|
|
96
|
|
|
60,598
|
|
|
100,014
|
|
|
(82
|
)
|
|
1,724,188
|
|
|
(19,560
|
)
|
|
141,066
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Net earnings and other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
568
|
|
|
(475
|
)
|
|
—
|
|
|
—
|
|
|
93
|
|
||||||
Stock grant
|
—
|
|
|
—
|
|
|
(1,501
|
)
|
|
—
|
|
|
—
|
|
|
(77,000
|
)
|
|
898
|
|
|
(603
|
)
|
||||||
Stock options exercised
|
—
|
|
|
—
|
|
|
(69
|
)
|
|
—
|
|
|
—
|
|
|
(3,412
|
)
|
|
39
|
|
|
(30
|
)
|
||||||
Excess tax benefits from option exercises
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
||||||
Purchase of common stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
129,348
|
|
|
(2,051
|
)
|
|
(2,051
|
)
|
||||||
Employee stock based compensation
|
—
|
|
|
—
|
|
|
398
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
398
|
|
||||||
Balance at September 28, 2013
|
9,646,972
|
|
|
$
|
96
|
|
|
$
|
59,425
|
|
|
$
|
100,582
|
|
|
$
|
(557
|
)
|
|
1,773,124
|
|
|
$
|
(20,674
|
)
|
|
$
|
138,872
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Net loss and other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
(960
|
)
|
|
288
|
|
|
—
|
|
|
—
|
|
|
(672
|
)
|
||||||
Stock grant
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Stock options exercised
|
—
|
|
|
—
|
|
|
(32
|
)
|
|
—
|
|
|
—
|
|
|
(82,500
|
)
|
|
963
|
|
|
931
|
|
||||||
Excess tax benefits from option exercises
|
—
|
|
|
—
|
|
|
27
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
27
|
|
||||||
Purchase of common stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
78,674
|
|
|
(1,180
|
)
|
|
(1,180
|
)
|
||||||
Employee stock based compensation
|
—
|
|
|
—
|
|
|
229
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
229
|
|
||||||
Balance at September 27, 2014
|
9,646,972
|
|
|
$
|
96
|
|
|
$
|
59,649
|
|
|
$
|
99,622
|
|
|
$
|
(269
|
)
|
|
1,769,298
|
|
|
$
|
(20,891
|
)
|
|
$
|
138,207
|
|
|
Fiscal Year Ended
|
|
13-Week Transition Period Ended
|
|
Fiscal Year Ended
|
|
Fiscal Year Ended
|
||||||||
|
September 27, 2014
|
|
September 28, 2013
|
|
June 29, 2013
|
|
June 30, 2012
|
||||||||
Operating activities:
|
|
|
|
|
|
|
|
||||||||
Net (loss) earnings
|
$
|
(960
|
)
|
|
$
|
568
|
|
|
$
|
9,184
|
|
|
$
|
(2,447
|
)
|
Adjustments to reconcile net (loss) earnings to net cash provided by (used in) operating activities:
|
|
|
|
|
|
|
|
||||||||
Depreciation
|
8,156
|
|
|
1,847
|
|
|
7,407
|
|
|
6,884
|
|
||||
Amortization of intangibles
|
1,337
|
|
|
223
|
|
|
607
|
|
|
608
|
|
||||
Amortization of deferred financing fees
|
362
|
|
|
89
|
|
|
363
|
|
|
361
|
|
||||
Excess tax benefits from exercise of stock options
|
(27
|
)
|
|
1
|
|
|
(34
|
)
|
|
(529
|
)
|
||||
(Benefit from) provision for deferred income taxes
|
(6,382
|
)
|
|
(1,386
|
)
|
|
176
|
|
|
(1,107
|
)
|
||||
Provision for (benefit from) allowances on accounts receivable, net
|
201
|
|
|
1,159
|
|
|
(513
|
)
|
|
530
|
|
||||
Non-cash stock compensation
|
229
|
|
|
398
|
|
|
865
|
|
|
1,730
|
|
||||
Change in the fair value of contingent consideration
|
200
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Loss (gain) on disposal of property and equipment
|
126
|
|
|
(15
|
)
|
|
93
|
|
|
73
|
|
||||
Fixed asset impairment charge
|
913
|
|
|
—
|
|
|
328
|
|
|
—
|
|
||||
Inventory write down
|
—
|
|
|
—
|
|
|
—
|
|
|
16,195
|
|
||||
Changes in operating assets and liabilities, net of effect of acquisitions:
|
|
|
|
|
|
|
|
||||||||
Accounts receivable
|
(296
|
)
|
|
4,961
|
|
|
(458
|
)
|
|
2,435
|
|
||||
Inventories
|
3,002
|
|
|
(5,676
|
)
|
|
2,119
|
|
|
(18,619
|
)
|
||||
Prepaid expenses and other current assets
|
(747
|
)
|
|
343
|
|
|
(358
|
)
|
|
289
|
|
||||
Other non-current assets
|
198
|
|
|
(41
|
)
|
|
(90
|
)
|
|
(19
|
)
|
||||
Accounts payable
|
4,698
|
|
|
2,405
|
|
|
4,152
|
|
|
(9,234
|
)
|
||||
Accrued expenses
|
2,503
|
|
|
(965
|
)
|
|
1,819
|
|
|
(7,100
|
)
|
||||
Income taxes
|
(101
|
)
|
|
1,006
|
|
|
6,592
|
|
|
(9,236
|
)
|
||||
Other liabilities
|
561
|
|
|
248
|
|
|
(88
|
)
|
|
84
|
|
||||
Net cash provided by (used in) operating activities
|
13,973
|
|
|
5,165
|
|
|
32,164
|
|
|
(19,102
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Investing activities:
|
|
|
|
|
|
|
|
||||||||
Purchases of property and equipment
|
(8,894
|
)
|
|
(2,992
|
)
|
|
(7,922
|
)
|
|
(6,626
|
)
|
||||
Proceeds from sale of equipment
|
71
|
|
|
7
|
|
|
72
|
|
|
—
|
|
||||
Cash paid for businesses, net of cash acquired
|
—
|
|
|
(15,000
|
)
|
|
—
|
|
|
—
|
|
||||
Net cash used in investing activities
|
(8,823
|
)
|
|
(17,985
|
)
|
|
(7,850
|
)
|
|
(6,626
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Financing activities:
|
|
|
|
|
|
|
|
||||||||
Proceeds from long-term debt
|
493,360
|
|
|
156,751
|
|
|
486,908
|
|
|
544,295
|
|
||||
Repayment of long-term debt
|
(498,121
|
)
|
|
(140,696
|
)
|
|
(503,094
|
)
|
|
(516,590
|
)
|
||||
Payment of financing fees
|
(384
|
)
|
|
(319
|
)
|
|
—
|
|
|
—
|
|
||||
Repurchase of common stock
|
(1,180
|
)
|
|
(2,051
|
)
|
|
(7,817
|
)
|
|
(2,642
|
)
|
||||
Proceeds from exercise of stock options
|
931
|
|
|
—
|
|
|
23
|
|
|
18
|
|
||||
Payment of withholding taxes on exercise of stock options
|
—
|
|
|
(633
|
)
|
|
(237
|
)
|
|
(71
|
)
|
||||
Excess tax benefits from exercise of stock options
|
27
|
|
|
(1
|
)
|
|
34
|
|
|
529
|
|
||||
Net cash (used in) provided by financing activities
|
(5,367
|
)
|
|
13,051
|
|
|
(24,183
|
)
|
|
25,539
|
|
||||
Net (decrease) increase in cash and cash equivalents
|
(217
|
)
|
|
231
|
|
|
131
|
|
|
(189
|
)
|
||||
Cash and cash equivalents at beginning of period
|
829
|
|
|
598
|
|
|
467
|
|
|
656
|
|
||||
Cash and cash equivalents at end of period
|
$
|
612
|
|
|
$
|
829
|
|
|
$
|
598
|
|
|
$
|
467
|
|
|
|
|
|
|
|
|
|
||||||||
Supplemental cash flow information:
|
|
|
|
|
|
|
|
||||||||
Cash paid during the period for interest
|
$
|
4,698
|
|
|
$
|
899
|
|
|
$
|
3,458
|
|
|
$
|
3,532
|
|
Cash paid (received) during the period for income taxes, net of refunds received
|
$
|
255
|
|
|
$
|
(956
|
)
|
|
$
|
(6,013
|
)
|
|
$
|
2,370
|
|
Non-cash financing activity—issuance of promissory notes in connection with an acquisition
|
$
|
—
|
|
|
$
|
20,387
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Non-cash financing activity—capital lease agreement
|
$
|
778
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Effective Date
|
|
Notational
Amount
|
|
LIBOR Rate
|
|
Maturity Date
|
|
Interest Rate Swap
|
9/9/2013
|
|
$15 million
|
|
1.1700
|
%
|
|
9/9/2016
|
Interest Rate Swap
|
9/9/2013
|
|
$15 million
|
|
1.6480
|
%
|
|
9/11/2017
|
Interest Rate Swap
|
9/19/2013
|
|
$15 million
|
|
1.0030
|
%
|
|
9/19/2016
|
Interest Rate Swap
|
9/19/2013
|
|
$15 million
|
|
1.4490
|
%
|
|
9/19/2017
|
|
|
|
Economic Life
|
||
Goodwill
|
|
$
|
19,917
|
|
N/A
|
|
|
|
|
||
Intangibles:
|
|
|
|
||
Tradename/trademarks
|
|
16,000
|
|
30 yrs
|
|
License agreements
|
|
2,100
|
|
15 – 30 yrs
|
|
Non-compete agreements
|
|
770
|
|
6.6 yrs
|
|
Total intangibles
|
|
18,870
|
|
|
|
|
|
|
|
||
Total goodwill and intangibles
|
|
$
|
38,787
|
|
|
|
September 27,
2014 |
|
September 28,
2013 |
|
June 29,
2013 |
||||||
Raw materials
|
$
|
9,609
|
|
|
$
|
11,917
|
|
|
$
|
12,443
|
|
Work in process
|
15,859
|
|
|
15,121
|
|
|
16,407
|
|
|||
Finished goods
|
136,720
|
|
|
138,152
|
|
|
130,664
|
|
|||
|
$
|
162,188
|
|
|
$
|
165,190
|
|
|
$
|
159,514
|
|
|
Estimated
Useful Life
|
|
September 27,
2014 |
|
September 28,
2013 |
|
June 29,
2013 |
||||||
Land and land improvements
|
25 years
|
|
$
|
996
|
|
|
$
|
993
|
|
|
$
|
993
|
|
Buildings
|
20 years
|
|
8,769
|
|
|
7,882
|
|
|
7,882
|
|
|||
Machinery and equipment
|
10 years
|
|
73,877
|
|
|
69,570
|
|
|
69,094
|
|
|||
Computers and software
|
3-10 years
|
|
20,207
|
|
|
20,842
|
|
|
20,386
|
|
|||
Furniture and fixtures
|
7 years
|
|
5,342
|
|
|
5,301
|
|
|
5,290
|
|
|||
Leasehold improvements
|
3-10 years
|
|
2,776
|
|
|
2,335
|
|
|
2,335
|
|
|||
Automobiles
|
5 years
|
|
932
|
|
|
796
|
|
|
797
|
|
|||
Construction in progress
|
N/A
|
|
2,922
|
|
|
4,590
|
|
|
2,430
|
|
|||
|
|
|
115,821
|
|
|
112,309
|
|
|
109,207
|
|
|||
Less accumulated depreciation and amortization
|
|
|
(74,816
|
)
|
|
(71,709
|
)
|
|
(69,761
|
)
|
|||
|
|
|
$
|
41,005
|
|
|
$
|
40,600
|
|
|
$
|
39,446
|
|
|
September 27, 2014
|
|
September 28, 2013
|
|
June 29, 2013
|
|
|
||||||||||||||||||||||||
|
Cost
|
Accumulated Amortization
|
Net Value
|
|
Cost
|
Accumulated Amortization
|
Net Value
|
|
Cost
|
Accumulated Amortization
|
Net Value
|
|
Economic Life
|
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Goodwill
|
$
|
36,729
|
|
$
|
—
|
|
$
|
36,729
|
|
|
$
|
36,729
|
|
$
|
—
|
|
$
|
36,729
|
|
|
$
|
16,812
|
|
$
|
—
|
|
$
|
16,812
|
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Intangibles:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Tradename/trademarks
|
$
|
17,530
|
|
$
|
(1,281
|
)
|
$
|
16,249
|
|
|
$
|
17,530
|
|
$
|
(672
|
)
|
$
|
16,858
|
|
|
$
|
1,530
|
|
$
|
(603
|
)
|
$
|
927
|
|
|
20 - 30 yrs
|
Customer relationships
|
7,220
|
|
(3,298
|
)
|
3,922
|
|
|
7,220
|
|
(2,937
|
)
|
4,283
|
|
|
7,220
|
|
(2,847
|
)
|
4,373
|
|
|
20 yrs
|
|||||||||
Technology
|
1,220
|
|
(582
|
)
|
638
|
|
|
1,220
|
|
(459
|
)
|
761
|
|
|
1,220
|
|
(428
|
)
|
792
|
|
|
10 yrs
|
|||||||||
License Agreements
|
2,100
|
|
(113
|
)
|
1,987
|
|
|
2,100
|
|
(10
|
)
|
2,090
|
|
|
—
|
|
—
|
|
—
|
|
|
15 - 30 yrs
|
|||||||||
Non-compete agreements
|
1,287
|
|
(583
|
)
|
704
|
|
|
1,287
|
|
(442
|
)
|
845
|
|
|
517
|
|
(419
|
)
|
98
|
|
|
4 – 8.5 yrs
|
|||||||||
Total intangibles
|
$
|
29,357
|
|
$
|
(5,857
|
)
|
$
|
23,500
|
|
|
$
|
29,357
|
|
$
|
(4,520
|
)
|
$
|
24,837
|
|
|
$
|
10,487
|
|
$
|
(4,297
|
)
|
$
|
6,190
|
|
|
|
|
September 27,
2014 |
|
September 28,
2013 |
|
June 29,
2013 |
||||||
Accrued employee compensation and benefits
|
$
|
10,505
|
|
|
$
|
8,916
|
|
|
$
|
9,762
|
|
Taxes accrued and withheld
|
1,173
|
|
|
742
|
|
|
1,199
|
|
|||
Accrued insurance
|
728
|
|
|
557
|
|
|
568
|
|
|||
Accrued advertising
|
411
|
|
|
397
|
|
|
363
|
|
|||
Accrued royalties
|
2,878
|
|
|
3,198
|
|
|
3,001
|
|
|||
Accrued commissions
|
564
|
|
|
650
|
|
|
677
|
|
|||
Derivative liability
|
—
|
|
|
100
|
|
|
49
|
|
|||
Other
|
3,908
|
|
|
2,903
|
|
|
2,807
|
|
|||
|
$
|
20,167
|
|
|
$
|
17,463
|
|
|
$
|
18,426
|
|
|
September 27,
2014 |
||
Severance expense
|
$
|
2,169
|
|
Reduced manufacturing production
|
868
|
|
|
Fixed asset impairment
|
984
|
|
|
|
$
|
4,021
|
|
|
September 27,
2014 |
||
Cost of goods sold
|
$
|
868
|
|
Selling, general and administrative expenses
|
2,169
|
|
|
Other expense
|
984
|
|
|
|
$
|
4,021
|
|
|
September 27,
2014 |
|
September 28,
2013 |
|
June 29,
2013 |
||||||
Revolving U.S. credit facility, interest at base rate or adjusted LIBOR rate plus an applicable margin (interest at 2.6% on September 27, 2014) due May 2017
|
$
|
96,231
|
|
|
$
|
105,746
|
|
|
$
|
88,753
|
|
Revolving credit facility with Banco Ficohsa, a Honduran bank, interest at 7% due March 2019 (denominated in U.S. dollars)
|
4,984
|
|
|
4,258
|
|
|
5,000
|
|
|||
Term loan with Banco Ficohsa, a Honduran bank, interest at 7%, interest only payments thru March 2012, principal payments begin April 2012, payable monthly with a seven-year term (denominated in U.S. dollars)
|
3,405
|
|
|
4,297
|
|
|
4,539
|
|
|||
Term loan with Banco Ficohsa, a Honduran bank, interest at 7%, payable monthly with a eighteen-month term (denominated in U.S. dollars)
|
700
|
|
|
—
|
|
|
—
|
|
|||
Term loan with Banco Ficohsa, a Honduran bank, interest at 7%, payable monthly with a seven-year term (denominated in U.S. dollars)
|
3,700
|
|
|
—
|
|
|
—
|
|
|||
Salt Life acquisition promissory note, imputed interest at 1.92%, one-time installment due September 30, 2014, quarterly installments beginning April 2015 through June 2016
|
13,404
|
|
|
13,150
|
|
|
—
|
|
|||
Salt Life acquisition promissory note, imputed interest at 3.62%, quarterly payments beginning September 2016 through June 2019
|
7,549
|
|
|
7,283
|
|
|
—
|
|
|||
|
129,973
|
|
|
134,734
|
|
|
98,292
|
|
|||
Less current installments
|
(15,504
|
)
|
|
(3,704
|
)
|
|
(3,529
|
)
|
|||
Long-term debt, excluding current installments
|
$
|
114,469
|
|
|
$
|
131,030
|
|
|
$
|
94,763
|
|
Fiscal Year
|
Amount
|
|
|
2015
|
$
|
15,504
|
|
2016
|
7,889
|
|
|
2017
|
95,342
|
|
|
2018
|
9,070
|
|
|
2019
|
1,468
|
|
|
Thereafter
|
700
|
|
|
|
$
|
129,973
|
|
|
Period ended
|
||||||||||||||
|
September 27,
2014 |
|
September 28,
2013 |
|
June 29,
2013 |
|
June 30,
2012 |
||||||||
Current:
|
|
|
|
|
|
|
|
||||||||
Federal
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
40
|
|
|
$
|
(6,795
|
)
|
State
|
79
|
|
|
—
|
|
|
35
|
|
|
—
|
|
||||
Foreign
|
158
|
|
|
44
|
|
|
145
|
|
|
157
|
|
||||
Total current
|
$
|
237
|
|
|
$
|
44
|
|
|
$
|
220
|
|
|
$
|
(6,638
|
)
|
Deferred:
|
|
|
|
|
|
|
|
||||||||
Federal
|
$
|
(5,807
|
)
|
|
$
|
(933
|
)
|
|
$
|
499
|
|
|
$
|
(284
|
)
|
State
|
(923
|
)
|
|
(156
|
)
|
|
3
|
|
|
(985
|
)
|
||||
Total deferred
|
(6,730
|
)
|
|
(1,089
|
)
|
|
502
|
|
|
(1,269
|
)
|
||||
(Benefit from) provision for income taxes
|
$
|
(6,493
|
)
|
|
$
|
(1,045
|
)
|
|
$
|
722
|
|
|
$
|
(7,907
|
)
|
|
Period ended
|
||||||||||||||
|
September 27,
2014 |
|
September 28,
2013 |
|
June 29,
2013 |
|
June 30,
2012 |
||||||||
United States
|
$
|
(16,832
|
)
|
|
$
|
(2,827
|
)
|
|
$
|
1,468
|
|
|
$
|
(21,660
|
)
|
Foreign
|
9,379
|
|
|
2,350
|
|
|
8,438
|
|
|
11,306
|
|
||||
|
$
|
(7,453
|
)
|
|
$
|
(477
|
)
|
|
$
|
9,906
|
|
|
$
|
(10,354
|
)
|
|
Period ended
|
||||||||||||||
|
September 27,
2014 |
|
September 28,
2013 |
|
June 29,
2013 |
|
June 30,
2012 |
||||||||
Income tax expense at the statutory rate
|
$
|
(2,533
|
)
|
|
$
|
(162
|
)
|
|
$
|
3,371
|
|
|
$
|
(3,520
|
)
|
State income tax expense, net of federal income tax effect
|
(893
|
)
|
|
(147
|
)
|
|
(11
|
)
|
|
(975
|
)
|
||||
Rate difference and nondeductible items in foreign jurisdictions
|
(55
|
)
|
|
(15
|
)
|
|
(16
|
)
|
|
(47
|
)
|
||||
Impact of foreign earnings in tax-free zone
|
(3,098
|
)
|
|
(756
|
)
|
|
(2,754
|
)
|
|
(3,683
|
)
|
||||
Valuation allowance adjustments
|
4
|
|
|
—
|
|
|
75
|
|
|
14
|
|
||||
Nondeductible compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
193
|
|
||||
Nondeductible amortization and other permanent differences
|
76
|
|
|
25
|
|
|
100
|
|
|
91
|
|
||||
Other
|
6
|
|
|
10
|
|
|
(43
|
)
|
|
20
|
|
||||
(Benefit from) provision for income taxes
|
$
|
(6,493
|
)
|
|
$
|
(1,045
|
)
|
|
$
|
722
|
|
|
$
|
(7,907
|
)
|
|
September 27,
2014 |
|
September 28,
2013 |
|
June 29,
2013 |
||||||
Deferred tax assets:
|
|
|
|
|
|
||||||
Federal net operating loss carryforwards
|
$
|
7,219
|
|
|
$
|
834
|
|
|
$
|
—
|
|
State net operating loss carryforwards
|
2,445
|
|
|
1,558
|
|
|
1,416
|
|
|||
Charitable donation carryforward
|
28
|
|
|
66
|
|
|
50
|
|
|||
Derivative — interest rate contracts
|
168
|
|
|
349
|
|
|
51
|
|
|||
Alternative minimum tax credit carryforward
|
49
|
|
|
49
|
|
|
49
|
|
|||
Currently nondeductible accruals
|
6,747
|
|
|
6,597
|
|
|
6,665
|
|
|||
Gross deferred tax assets
|
16,656
|
|
|
9,453
|
|
|
8,231
|
|
|||
Less valuation allowance — state net operating loss
|
(201
|
)
|
|
(197
|
)
|
|
(197
|
)
|
|||
Net deferred tax assets
|
16,455
|
|
|
9,256
|
|
|
8,034
|
|
|||
|
|
|
|
|
|
||||||
Deferred tax liabilities:
|
|
|
|
|
|
||||||
Depreciation
|
(2,792
|
)
|
|
(2,889
|
)
|
|
(3,164
|
)
|
|||
Goodwill and intangibles
|
(4,793
|
)
|
|
(3,931
|
)
|
|
(3,762
|
)
|
|||
Other
|
(117
|
)
|
|
(65
|
)
|
|
(123
|
)
|
|||
Gross deferred tax liabilities
|
(7,702
|
)
|
|
(6,885
|
)
|
|
(7,049
|
)
|
|||
Net deferred tax asset
|
8,753
|
|
|
2,371
|
|
|
985
|
|
|||
Less non-current net deferred tax liabilities
|
3,399
|
|
|
3,610
|
|
|
3,571
|
|
|||
Current deferred tax asset
|
$
|
12,152
|
|
|
$
|
5,981
|
|
|
$
|
4,556
|
|
Fiscal Year
|
Amount
|
|
|
2015
|
$
|
7,993
|
|
2016
|
6,901
|
|
|
2017
|
4,860
|
|
|
2018
|
3,197
|
|
|
2019
|
1,608
|
|
|
Thereafter
|
1,183
|
|
|
|
$
|
25,742
|
|
|
September 27,
2014 |
|
September 28,
2013 |
|
June 29,
2013 |
||||||
Balance at beginning of year
|
$
|
465
|
|
|
$
|
471
|
|
|
$
|
526
|
|
Interest expense
|
6
|
|
|
—
|
|
|
6
|
|
|||
Benefits paid
|
(29
|
)
|
|
(6
|
)
|
|
(62
|
)
|
|||
Actuarial adjustment
|
1
|
|
|
—
|
|
|
1
|
|
|||
Balance at end of year
|
$
|
443
|
|
|
$
|
465
|
|
|
$
|
471
|
|
|
September 27, 2014
|
|
September 28, 2013
|
|
June 29, 2013
|
|
June 30. 2012
|
||||||||||||||||
|
Shares
|
Weighted Average Exercise Price
|
|
Shares
|
Weighted Average Exercise Price
|
|
Shares
|
Weighted Average Exercise Price
|
|
Shares
|
Weighted Average Exercise Price
|
||||||||||||
Stock options outstanding, beginning of fiscal year
|
50,000
|
|
$
|
13.47
|
|
|
50,000
|
|
$
|
13.47
|
|
|
50,000
|
|
$
|
13.47
|
|
|
50,000
|
|
$
|
13.47
|
|
Stock options granted
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
||||
Stock options exercised
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
||||
Stock options forfeited
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
||||
Stock options outstanding, end of fiscal year
|
50,000
|
|
$
|
13.47
|
|
|
50,000
|
|
$
|
13.47
|
|
|
50,000
|
|
$
|
13.47
|
|
|
50,000
|
|
$
|
13.47
|
|
Stock options outstanding and exercisable, end of fiscal year
|
50,000
|
|
$
|
13.47
|
|
|
50,000
|
|
$
|
13.47
|
|
|
50,000
|
|
$
|
13.47
|
|
|
50,000
|
|
$
|
13.47
|
|
Date of Option Grant
|
Number of Options Outstanding and Exercisable
|
Exercise Price
|
Grant-Date Fair Value
|
Expiration Date
|
|||||
February 2, 2011
|
25,000
|
|
$
|
13.86
|
|
$
|
6.15
|
|
February 18, 2018
|
February 2, 2011
|
25,000
|
|
$
|
13.07
|
|
$
|
6.35
|
|
February 18, 2018
|
|
50,000
|
|
|
|
|
|
September 27, 2014
|
|
September 28, 2013
|
|
June 29, 2013
|
|
June 30. 2012
|
||||||||||||||||
|
Number of Units
|
Weighted average grant date fair value
|
|
Number of Units
|
Weighted average grant date fair value
|
|
Number of Units
|
Weighted average grant date fair value
|
|
Number of Units
|
Weighted average grant date fair value
|
||||||||||||
Units outstanding, beginning of fiscal year
|
348,852
|
|
$
|
14.25
|
|
|
224,870
|
|
$
|
15.37
|
|
|
337,700
|
|
$
|
16.05
|
|
|
—
|
|
$
|
—
|
|
Units granted
|
—
|
|
$
|
—
|
|
|
244,852
|
|
$
|
14.25
|
|
|
10,000
|
|
$
|
13.66
|
|
|
390,900
|
|
$
|
16.04
|
|
Units issued
|
—
|
|
$
|
—
|
|
|
(120,870
|
)
|
$
|
16.34
|
|
|
—
|
|
$
|
—
|
|
|
—
|
|
$
|
—
|
|
Units forfeited
|
(133,500
|
)
|
$
|
14.16
|
|
|
—
|
|
$
|
—
|
|
|
(122,830
|
)
|
$
|
17.10
|
|
|
(53,200
|
)
|
$
|
(16.00
|
)
|
Units outstanding, end of fiscal year
|
215,352
|
|
$
|
14.31
|
|
|
348,852
|
|
$
|
14.25
|
|
|
224,870
|
|
$
|
15.37
|
|
|
337,700
|
|
$
|
16.05
|
|
Restricted Stock Units/Performance Units
|
Number of Units
|
Average Market Price on Date of Grant
|
Vesting Date
|
||
Fiscal year 2012 Performance Units
|
52,000
|
|
|
$14.25
|
August 2015
|
Transition period Performance Units
|
74,176
|
|
|
$14.10
|
August 2015
|
Transition period Restricted Stock Units
|
74,176
|
|
|
$14.10
|
August 2015
|
Transition period Performance Units
|
7,500
|
|
|
$16.61
|
August 2015
|
Transition period Restricted Stock Units
|
7,500
|
|
|
$16.61
|
August 2015
|
|
215,352
|
|
|
|
|
|
Fiscal Year 2014
|
|
Transition Period
|
|
Fiscal Year 2013
|
|
Fiscal Year 2012
|
||||||||||||||||
|
Shares
|
Weighted Average Exercise Price
|
|
Shares
|
Weighted Average Exercise Price
|
|
Shares
|
Weighted Average Exercise Price
|
|
Shares
|
Weighted Average Exercise Price
|
||||||||||||
Stock options outstanding, beginning of fiscal year
|
584,500
|
|
$
|
12.13
|
|
|
600,500
|
|
$
|
12.09
|
|
|
799,834
|
|
$
|
12.22
|
|
|
851,167
|
|
$
|
12.16
|
|
Stock options exercised
|
(82,500
|
)
|
$
|
11.28
|
|
|
(16,000
|
)
|
$
|
10.83
|
|
|
(139,334
|
)
|
$
|
11.14
|
|
|
(25,333
|
)
|
$
|
8.11
|
|
Stock options forfeited
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
(60,000
|
)
|
$
|
15.91
|
|
|
(26,000
|
)
|
$
|
14.48
|
|
||
Stock options outstanding, end of fiscal year
|
502,000
|
|
$
|
12.27
|
|
|
584,500
|
|
$
|
12.13
|
|
|
600,500
|
|
$
|
12.09
|
|
|
799,834
|
|
$
|
12.22
|
|
Stock options outstanding and exercisable, end of fiscal year
|
502,000
|
|
$
|
12.27
|
|
|
584,500
|
|
$
|
12.13
|
|
|
600,500
|
|
$
|
12.09
|
|
|
799,834
|
|
$
|
12.22
|
|
Date of Option Grant
|
Number of Options Outstanding and Exercisable
|
Exercise Price
|
Grant-Date Fair Value
|
Expiration Date
|
|||||
July 4, 2005
|
350,000
|
|
$
|
13.35
|
|
$
|
5.18
|
|
July 4, 2015
|
July 27, 2006
|
30,000
|
|
$
|
17.24
|
|
$
|
6.20
|
|
July 27, 2016
|
February 8, 2008
|
112,000
|
|
$
|
8.30
|
|
$
|
2.95
|
|
February 8, 2018
|
March 16, 2009
|
10,000
|
|
$
|
4.01
|
|
$
|
2.00
|
|
February 18, 2018
|
|
502,000
|
|
|
|
|
|
Basics
|
|
Branded
|
|
Consolidated
|
||||||
Fiscal Year 2014:
|
|
|
|
|
|
||||||
Net sales
|
$
|
265,882
|
|
|
$
|
187,019
|
|
|
$
|
452,901
|
|
Segment operating income (loss)
|
3,448
|
|
|
(5,109
|
)
|
|
(1,661
|
)
|
|||
Segment assets
|
174,814
|
|
|
179,764
|
|
|
354,578
|
|
|||
Equity investment in joint venture
|
2,879
|
|
|
—
|
|
|
2,879
|
|
|||
Purchases of property and equipment
|
6,435
|
|
|
2,459
|
|
|
8,894
|
|
|||
Depreciation and amortization
|
6,261
|
|
|
3,232
|
|
|
9,493
|
|
|||
|
|
|
|
|
|
||||||
Transition Period:
|
|
|
|
|
|
||||||
Net sales
|
$
|
64,996
|
|
|
$
|
57,563
|
|
|
$
|
122,559
|
|
Segment operating income
|
359
|
|
|
197
|
|
|
556
|
|
|||
Segment assets
|
162,505
|
|
|
189,257
|
|
|
351,762
|
|
|||
Equity investment in joint venture
|
2,938
|
|
|
—
|
|
|
2,938
|
|
|||
Purchases of property and equipment
|
2,509
|
|
|
483
|
|
|
2,992
|
|
|||
Depreciation and amortization
|
1,451
|
|
|
619
|
|
|
2,070
|
|
|||
|
|
|
|
|
|
||||||
Fiscal Year 2013:
|
|
|
|
|
|
||||||
Net sales
|
$
|
278,020
|
|
|
$
|
212,503
|
|
|
$
|
490,523
|
|
Segment operating income (loss)
|
15,831
|
|
|
(1,928
|
)
|
|
13,903
|
|
|||
Segment assets
|
166,570
|
|
|
145,340
|
|
|
311,910
|
|
|||
Equity investment in joint venture
|
2,909
|
|
|
—
|
|
|
2,909
|
|
|||
Purchases of property and equipment
|
3,978
|
|
|
3,944
|
|
|
7,922
|
|
|||
Depreciation and amortization
|
5,794
|
|
|
2,221
|
|
|
8,015
|
|
|||
|
|
|
|
|
|
||||||
Fiscal Year 2012:
|
|
|
|
|
|
||||||
Net sales
|
$
|
258,400
|
|
|
$
|
231,523
|
|
|
$
|
489,923
|
|
Segment operating (loss) income
|
(13,020
|
)
|
|
6,798
|
|
|
(6,222
|
)
|
|||
Segment assets
|
172,646
|
|
|
147,748
|
|
|
320,394
|
|
|||
Equity investment in joint venture
|
2,818
|
|
|
—
|
|
|
2,818
|
|
|||
Purchases of property and equipment
|
3,821
|
|
|
2,805
|
|
|
6,626
|
|
|||
Depreciation and amortization
|
6,135
|
|
|
1,357
|
|
|
7,492
|
|
|
Period Ended
|
||||||||||||||
|
September 27,
2014 |
|
September 28,
2013 |
|
June 29,
2013 |
|
June 30,
2012 |
||||||||
Segment operating (loss) income
|
$
|
(1,661
|
)
|
|
$
|
556
|
|
|
$
|
13,903
|
|
|
$
|
(6,222
|
)
|
Unallocated interest expense
|
5,792
|
|
|
1,033
|
|
|
3,997
|
|
|
4,132
|
|
||||
Consolidated (loss) income before (benefit from) provision for income taxes
|
$
|
(7,453
|
)
|
|
$
|
(477
|
)
|
|
$
|
9,906
|
|
|
$
|
(10,354
|
)
|
|
Period Ended
|
||||||||||||||
|
September 27,
2014 |
|
September 28,
2013 |
|
June 29,
2013
|
|
June 30,
2012
|
||||||||
United States
|
$
|
442,062
|
|
|
$
|
117,813
|
|
|
$
|
480,981
|
|
|
$
|
484,419
|
|
Foreign
|
10,839
|
|
|
4,746
|
|
|
9,542
|
|
|
5,504
|
|
||||
Total net sales
|
$
|
452,901
|
|
|
$
|
122,559
|
|
|
$
|
490,523
|
|
|
$
|
489,923
|
|
|
As Of
|
||||||||||
|
September 27,
2014 |
|
September 28,
2013 |
|
June 29,
2013
|
||||||
United States
|
$
|
22,919
|
|
|
$
|
22,929
|
|
|
$
|
23,011
|
|
|
|
|
|
|
|
||||||
Honduras
|
14,234
|
|
|
13,525
|
|
|
12,144
|
|
|||
El Salvador
|
2,689
|
|
|
3,055
|
|
|
3,163
|
|
|||
Mexico
|
1,163
|
|
|
1,091
|
|
|
1,128
|
|
|||
All foreign countries
|
18,086
|
|
|
17,671
|
|
|
16,435
|
|
|||
|
|
|
|
|
|
||||||
Total long-lived assets, excluding goodwill and intangibles
|
$
|
41,005
|
|
|
$
|
40,600
|
|
|
$
|
39,446
|
|
Yarn
|
$
|
12,555
|
|
Natural Gas
|
14
|
|
|
Finished fabric
|
2,880
|
|
|
Finished products
|
22,378
|
|
|
|
$
|
37,827
|
|
|
Effective Date
|
|
Notational
Amount
|
|
LIBOR Rate
|
|
Maturity Date
|
|
Interest Rate Swap
|
9/9/2013
|
|
$15 million
|
|
1.1700
|
%
|
|
9/9/2016
|
Interest Rate Swap
|
9/9/2013
|
|
$15 million
|
|
1.6480
|
%
|
|
9/11/2017
|
Interest Rate Swap
|
9/19/2013
|
|
$15 million
|
|
1.0030
|
%
|
|
9/19/2016
|
Interest Rate Swap
|
9/19/2013
|
|
$15 million
|
|
1.4490
|
%
|
|
9/19/2017
|
◦
|
Level 1
– Quoted prices (unadjusted) in active markets for identical assets or liabilities.
|
◦
|
Level 2
– Inputs other than quoted prices that are observable for assets and liabilities, either directly or indirectly. These inputs include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in market that are less active.
|
◦
|
Level 3
– Unobservable inputs that are supported by little or
no
market activity for assets or liabilities and includes certain pricing models, discounted cash flow methodologies and similar techniques.
|
|
Fair Value Measurements Using
|
|||||||||||||
Period Ended
|
Total
|
|
Quoted Prices in
Active Markets for
Identical Assets
(Level 1)
|
|
Significant Other
Observable Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|||||||
Interest Rate Swap
|
|
|
|
|
|
|
|
|||||||
September 27, 2014
|
$
|
(438
|
)
|
|
—
|
|
|
$
|
(438
|
)
|
|
—
|
|
|
September 28, 2013
|
$
|
(906
|
)
|
|
—
|
|
|
$
|
(906
|
)
|
|
—
|
|
|
June 29, 2013
|
$
|
(133
|
)
|
|
—
|
|
|
$
|
(133
|
)
|
|
—
|
|
|
June 30, 2012
|
$
|
(209
|
)
|
|
—
|
|
|
$
|
(209
|
)
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|||||||
Contingent Consideration
|
|
|
|
|
|
|
|
|||||||
September 27, 2014
|
$
|
(3,600
|
)
|
|
—
|
|
|
—
|
|
|
$
|
(3,600
|
)
|
|
September 28, 2013
|
$
|
(3,400
|
)
|
|
—
|
|
|
—
|
|
|
$
|
(3,400
|
)
|
|
September 27,
2014 |
|
September 28,
2013 |
|
June 29,
2013 |
||||||
Accrued expenses
|
$
|
—
|
|
|
$
|
(100
|
)
|
|
$
|
(49
|
)
|
Deferred tax liabilities
|
168
|
|
|
349
|
|
|
51
|
|
|||
Other liabilities
|
(437
|
)
|
|
(806
|
)
|
|
(84
|
)
|
|||
Accumulated other comprehensive loss
|
$
|
(269
|
)
|
|
$
|
(557
|
)
|
|
$
|
(82
|
)
|
Fiscal Year
|
Amount
|
|
|
2015
|
$
|
1,606
|
|
2016
|
2,645
|
|
|
2017
|
121
|
|
|
2018
|
4
|
|
|
2019 and thereafter
|
—
|
|
|
|
$
|
4,376
|
|
|
2014 Quarter Ended
|
|
2013 Quarter Ended
|
||||||||||||||||||||||||||||
|
December 28
|
|
March 29
|
|
June 28
|
|
September 27
|
|
September 29
|
|
December 29
|
|
March 30
|
|
June 29
|
||||||||||||||||
Net sales
|
$
|
100,012
|
|
|
$
|
114,458
|
|
|
$
|
123,534
|
|
|
$
|
114,897
|
|
|
$
|
130,114
|
|
|
$
|
106,750
|
|
|
$
|
120,092
|
|
|
$
|
133,567
|
|
Gross profit
|
19,042
|
|
|
22,279
|
|
|
22,738
|
|
|
21,682
|
|
|
31,853
|
|
|
22,755
|
|
|
26,415
|
|
|
28,486
|
|
||||||||
Operating (loss) income
|
(674
|
)
|
|
834
|
|
|
1,592
|
|
|
(3,412
|
)
|
|
5,836
|
|
|
846
|
|
|
2,564
|
|
|
4,657
|
|
||||||||
Net (loss) earnings
|
(1,597
|
)
|
|
(763
|
)
|
|
2,166
|
|
|
(765
|
)
|
|
3,564
|
|
|
46
|
|
|
1,608
|
|
|
3,966
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Basic EPS
|
$
|
(0.20
|
)
|
|
$
|
(0.10
|
)
|
|
$
|
0.27
|
|
|
$
|
(0.10
|
)
|
|
$
|
0.42
|
|
|
$
|
0.01
|
|
|
$
|
0.20
|
|
|
$
|
0.49
|
|
Diluted EPS
|
$
|
(0.20
|
)
|
|
$
|
(0.10
|
)
|
|
$
|
0.27
|
|
|
$
|
(0.10
|
)
|
|
$
|
0.41
|
|
|
$
|
0.01
|
|
|
$
|
0.19
|
|
|
$
|
0.48
|
|
|
Beginning
Balance
|
|
Acquisition
Accounting
|
|
Expense
|
|
Write-Offs/
Credits Issued
|
|
Ending
Balance
|
||||||||||
2014
|
$
|
851
|
|
|
$
|
—
|
|
|
$
|
467
|
|
|
$
|
(271
|
)
|
|
$
|
1,047
|
|
Transition Period
|
656
|
|
|
—
|
|
|
1,082
|
|
|
(887
|
)
|
|
851
|
|
|||||
2013
|
750
|
|
|
—
|
|
|
62
|
|
|
(156
|
)
|
|
656
|
|
|||||
2012
|
658
|
|
|
—
|
|
|
280
|
|
|
(188
|
)
|
|
750
|
|
|
Beginning
Balance
|
|
Acquisition
Accounting
|
|
Expense
|
|
Write-Offs/
Credits Issued
|
|
Ending
Balance
|
||||||||||
2014
|
$
|
2,108
|
|
|
$
|
—
|
|
|
$
|
12,425
|
|
|
$
|
(12,420
|
)
|
|
$
|
2,113
|
|
Transition Period
|
1,143
|
|
|
—
|
|
|
3,015
|
|
|
(2,050
|
)
|
|
2,108
|
|
|||||
2013
|
1,562
|
|
|
—
|
|
|
8,154
|
|
|
(8,573
|
)
|
|
1,143
|
|
|||||
2012
|
1,124
|
|
|
—
|
|
|
9,864
|
|
|
(9,426
|
)
|
|
1,562
|
|
|
Beginning
Balance
|
|
Acquisition
Accounting
|
|
Expense
|
|
Write-Offs/
Credits Issued
|
|
Ending
Balance
|
||||||||||
2014
|
$
|
2,959
|
|
|
$
|
—
|
|
|
$
|
12,892
|
|
|
$
|
(12,691
|
)
|
|
$
|
3,160
|
|
Transition Period
|
1,799
|
|
|
—
|
|
|
4,097
|
|
|
(2,937
|
)
|
|
2,959
|
|
|||||
2013
|
2,312
|
|
|
—
|
|
|
8,216
|
|
|
(8,729
|
)
|
|
1,799
|
|
|||||
2012
|
1,782
|
|
|
—
|
|
|
10,144
|
|
|
(9,614
|
)
|
|
2,312
|
|
(a)
|
The death of the Participant;
|
(b)
|
Disability of the Participant;
|
(c)
|
A Change in Control.
|
(a)
|
No shares will be payable upon the vesting of a Restricted Stock Unit unless and until the Participant satisfies any Federal, state or local withholding tax obligation required by law to be withheld in respect of this Award. The Participant acknowledges and agrees that to satisfy any such tax obligation the Company may deduct and retain from the Shares payable upon vesting of the Restricted Stock Units such number of shares as is equal in value to the Company's minimum statutory withholding obligations with respect to the income recognized by the Participant upon such vesting (based on minimum statutory withholding rates for Federal and state tax purposes, including payroll taxes, that are applicable to such income). The number of such shares to be deducted and retained shall be based on the closing price of the shares on the day prior to the applicable RSU Vesting Date.
|
(b)
|
The Participant acknowledges that in the event an election under Section 83(b) of the Internal Revenue Code of 1986 is filed with respect to this Award, Participant must give a copy of the election to the Company within ten days after filing with the Internal Revenue Service.
|
(a)
|
No Representations or Warranties
. Neither the Company nor the Committee or any of their representatives or agents has made any representations or warranties to the Participant with respect to the income tax or other consequences of the transactions contemplated by this Agreement, and the Participant is in no manner relying on the Company, the Committee or any of their representatives or agents for an assessment of such tax or other consequences.
|
(b)
|
Employment
. Nothing in this Agreement or in the Plan or in the making of the Award shall confer on the Participant any right to or guarantee of continued employment with the Company or any of its Subsidiaries or in any way limit the right of the Company or any of its Subsidiaries to terminate the employment of the Participant at any time.
|
(c)
|
Investment
. The Participant hereby agrees and represents that any shares payable upon vesting of the Restricted Stock Units shall be held for the Participant's own account for investment purposes only and not with a view of resale or distribution unless the shares are registered under the Securities Act of 1933, as amended.
|
(d)
|
Necessary Acts
. The Participant and the Company hereby agree to perform any further acts and to execute and deliver any documents which may be reasonably necessary to carry out the provisions of this Agreement.
|
(e)
|
Severability
. The provisions of this Agreement are severable and if any one or more provisions may be determined to be illegal or otherwise unenforceable, in whole or in part, the remaining provisions, and any
|
(f)
|
Waiver
. The waiver by the Company of a breach of any provision of this Agreement by the Participant shall not operate or be construed as a waiver of any subsequent breach by the Participant.
|
(g)
|
Binding Effect; Applicable Law
. This Agreement shall bind and inure to the benefit of the Company and its successors and assigns, and the Participant and any heir, legatee, or legal representative of the Participant. This Agreement shall be construed, administered and enforced in accordance with and subject to the terms of the Plan and the laws of the State of Georgia.
|
(h)
|
Administration
. The authority to manage and control the operation and administration of this Agreement shall be vested in the Committee, and the Committee shall have all powers with respect to this Agreement as it has with respect to the Plan. Any interpretation of the Agreement by the Committee and any decision made by it with respect to the Agreement is final and binding.
|
(i)
|
Amendment
. This Agreement may be amended by written agreement of the Participant and the Company, without the consent of any other person.
|
Section 1.
|
AWARD OF PERFORMANCE UNITS
|
Section 2.
|
VESTING OF UNITS BASED ON PERFORMANCE REQUIREMENTS
|
Fiscal Years 2015, 2016 and 2017 Return on Capital Employed Requirement
|
Granted Units Earned Based on Average Return on Capital Employed
|
Less than 3%
|
0%
|
3%
|
Minimum 20%
|
7%
|
Par 100%
|
12%
|
Maximum 120%
|
Greater Than 12%
|
Maximum 120%
|
(a)
|
The death of the Participant; or
|
(b)
|
Disability of the Participant.
|
(a)
|
No shares will be payable upon the vesting of a Performance Unit unless and until the Participant satisfies any Federal, state or local withholding tax obligation required by law to be withheld in respect of this Award. The Participant acknowledges and agrees that to satisfy any such tax obligation the Company may deduct and retain from the shares payable upon vesting of the Performance Units such number of Shares as is equal in value to the Company’s minimum statutory withholding obligations with respect to the income recognized by the Participant upon such vesting (based on minimum statutory withholding rates for Federal and state tax purposes, including payroll taxes, that are applicable to such income). The number of such shares to be deducted and retained shall be based on the closing price of the shares on the day prior to the PSU Vesting Date.
|
(b)
|
The Participant acknowledges that in the event an election under Section 83(b) of the Internal Revenue Code of 1986 is filed with respect to this Award, Participant must give a copy of the election to the Company within ten days after filing with the Internal Revenue Service.
|
(a)
|
No Representations or Warranties
. Neither the Company nor the Committee or any of their representatives or agents has made any representations or warranties to the Participant with respect to the income tax or other consequences of the transactions contemplated by this Agreement, and the Participant is in no manner relying on the Company, the Committee or any of their representatives or agents for an assessment of such tax or other consequences.
|
(b)
|
Employment
. Nothing in this Agreement or in the Plan or in the making of the Award shall confer on the Participant any right to or guarantee of continued employment with the Company or any of its Subsidiaries or in any way limit the right of the Company or any of its Subsidiaries to terminate the employment of the Participant at any time.
|
(c)
|
Investment
. The Participant hereby agrees and represents that any shares payable upon vesting of the Performance Units shall be held for the Participant’s own account for investment purposes only and not with a view of resale or distribution unless the shares are registered under the Securities Act of 1933, as amended.
|
(d)
|
Necessary Acts
. The Participant and the Company hereby agree to perform any further acts and to execute and deliver any documents which may be reasonably necessary to carry out the provisions of this Agreement.
|
(e)
|
Severability
. The provisions of this Agreement are severable and if any one or more provisions may be determined to be illegal or otherwise unenforceable, in whole or in part, the remaining provisions, and any partially enforceable provision to the extent enforceable in any jurisdiction, shall nevertheless be binding and enforceable.
|
(f)
|
Waiver
. The waiver by the Company of a breach of any provision of this Agreement by the Participant shall not operate or be construed as a waiver of any subsequent breach by the Participant.
|
(g)
|
Binding Effect; Applicable Law
. This Agreement shall bind and inure to the benefit of the Company and its successors and assigns, and the Participant and any heir, legatee, or legal representative of the Participant. This Agreement shall be construed, administered and enforced in accordance with and subject to the terms of the Plan and the laws of the State of Georgia.
|
(h)
|
Administration
. The authority to manage and control the operation and administration of this Agreement shall be vested in the Committee, and the Committee shall have all powers with respect to this Agreement as it has with respect to the Plan. Any interpretation of the Agreement by the Committee and any decision made by it with respect to the Agreement is final and binding.
|
(i)
|
Amendment
. This Agreement may be amended by written agreement of the Participant and the Company, without the consent of any other person.
|
DELTA APPAREL, INC.
|
|
|
|
By:
|
|
|
Martha M. Watson
|
|
Vice President & Chief Human Resources Officer
|
|
|
PARTICIPANT
|
|
|
|
|
|
|
|
|
|
(1)
|
M. J. Soffe, LLC, a North Carolina limited liability company.
|
(2)
|
Junkfood Clothing Company, a Georgia corporation.
|
(3)
|
To The Game, LLC, a Georgia limited liability company.
|
(4)
|
Art Gun, LLC, a Georgia limited liability company.
|
(5)
|
Delta Apparel Honduras, S.A., a Honduran sociedad anónima.
|
(6)
|
Delta Campeche, S.A. de C.V., a Mexican sociedad anónima de capital variable.
|
(7)
|
Delta Cortes, S.A., a Honduran sociedad anónima.
|
(8)
|
Campeche Sportswear, S. de R.L. de C.V., a Mexican sociedad de responsabilidad de capital variable.
|
(9)
|
Textiles La Paz, LLC, a North Carolina limited liability company.
|
1.
|
I have reviewed this annual report on Form 10-K of Delta Apparel, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Date:
|
December 10, 2014
|
/s/ Robert W. Humphreys
|
|
|
Chairman and Chief Executive Officer
|
1.
|
I have reviewed this annual report on Form 10-K of Delta Apparel, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Date:
|
December 10, 2014
|
/s/ Deborah H. Merrill
|
|
|
Vice President, Chief Financial Officer and Treasurer
|
1.
|
The Annual Report on Form 10-K for the fiscal year ended
September 27, 2014
of the Company, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date:
|
December 10, 2014
|
|
|
|
|
|
|
/s/ Robert W. Humphreys
|
|
|
Robert W. Humphreys
|
|
|
Chairman and Chief Executive Officer
|
1.
|
The Annual Report on Form 10-K for the fiscal year ended
September 27, 2014
of the Company, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date:
|
December 10, 2014
|
|
|
|
|
|
|
/s/ Deborah H. Merrill
|
|
|
Deborah H. Merrill
|
|
|
Vice President, Chief Financial Officer and Treasurer
|