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þ
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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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
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58-2508794
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(State or Other Jurisdiction of
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(I.R.S. Employer
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Incorporation or Organization)
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Identification No.)
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322 South Main Street
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Greenville, SC
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29601
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(Address of principal executive offices)
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(Zip Code)
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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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Emerging growth company
o
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(Do not check if a smaller reporting company)
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Page
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Exhibits
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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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PART 1.
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FINANCIAL INFORMATION
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Item 1.
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Financial Statements
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March 31,
2018 |
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September 30,
2017 |
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Assets
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Current assets:
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Cash and cash equivalents
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$
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434
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$
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572
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Accounts receivable, less allowances of $1,447 and $1,433, respectively
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60,083
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47,557
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Income tax receivable
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—
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352
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Inventories, net
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172,213
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174,551
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Note receivable
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200
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2,016
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Prepaid expenses and other current assets
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3,985
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2,646
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Total current assets
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236,915
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227,694
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Property, plant and equipment, net of accumulated depreciation of $71,477 and $67,780, respectively
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50,093
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42,706
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Goodwill
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29,717
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19,917
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Intangibles, net
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20,885
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16,151
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Deferred income taxes
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1,996
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5,002
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Other assets
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6,288
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6,332
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Total assets
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$
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345,894
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$
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317,802
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Liabilities and Shareholders’ Equity
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Current liabilities:
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Accounts payable
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$
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50,315
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$
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46,335
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Accrued expenses
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13,669
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17,704
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Income tax payable
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256
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—
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Current portion of capital lease financing
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2,336
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848
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Current portion of long-term debt
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6,356
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7,548
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Total current liabilities
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72,932
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72,435
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Long-term taxes payable
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7,414
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—
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Long-term capital lease financing, less current maturities
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8,402
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2,519
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Long-term debt, less current maturities
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105,798
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85,306
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Other liabilities
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—
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55
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Contingent consideration
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5,850
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1,600
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Total liabilities
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$
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200,396
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$
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161,915
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Shareholders’ equity:
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Preferred stock—$0.01 par value, 2,000,000 shares authorized, none issued and outstanding
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—
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—
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Common stock —$0.01 par value, 15,000,000 shares authorized, 9,646,972 shares issued, and 7,152,440 and 7,300,297 shares outstanding as of March 31, 2018, and September 30, 2017, respectively
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96
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96
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Additional paid-in capital
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60,561
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61,065
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Retained earnings
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121,032
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127,358
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Accumulated other comprehensive income (loss)
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167
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(35
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)
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Treasury stock —2,494,532 and 2,346,675 shares as of March 31, 2018, and September 30, 2017, respectively
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(36,358
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)
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(32,597
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)
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Total shareholders’ equity
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145,498
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155,887
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Total liabilities and shareholders' equity
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$
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345,894
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$
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317,802
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Three Months Ended
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Six Months Ended
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March 31,
2018 |
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April 1,
2017 |
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March 31,
2018 |
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April 1,
2017 |
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Net sales
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$
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100,004
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$
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104,138
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$
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190,346
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$
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189,473
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Cost of goods sold
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77,769
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79,908
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151,741
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147,685
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Gross profit
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22,235
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24,230
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38,605
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41,788
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Selling, general and administrative expenses
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16,737
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18,250
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31,717
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35,559
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Change in fair value of contingent consideration
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(100
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)
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(100
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)
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(400
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)
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(200
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)
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Gain on sale of business
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—
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(1,295
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)
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—
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(1,295
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)
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Other income, net
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(16
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(145
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)
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(64
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)
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(267
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)
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Operating income
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5,614
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7,520
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7,352
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7,991
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Interest expense, net
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1,350
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1,312
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2,685
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2,613
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Income before provision for income taxes
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4,264
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6,208
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4,667
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5,378
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Provision for income taxes
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632
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1,661
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10,988
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1,436
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Net income (loss)
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$
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3,632
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$
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4,547
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$
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(6,321
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)
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$
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3,942
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Basic earnings (loss) per share
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$
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0.50
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$
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0.60
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$
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(0.87
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)
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$
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0.52
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Diluted earnings (loss) per share
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$
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0.48
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$
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0.58
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$
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(0.87
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)
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$
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0.50
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Weighted average number of shares outstanding
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7,195
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7,600
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7,231
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7,599
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Dilutive effect of stock options and awards
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301
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245
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—
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271
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Weighted average number of shares assuming dilution
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7,496
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7,845
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7,231
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7,870
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Three Months Ended
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Six Months Ended
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March 31,
2018 |
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April 1,
2017 |
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March 31,
2018 |
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April 1,
2017 |
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Net income (loss)
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$
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3,632
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$
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4,547
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$
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(6,321
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)
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$
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3,942
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Other comprehensive income related to unrealized gain on derivatives, net of income tax
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116
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33
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202
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82
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Comprehensive income (loss)
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$
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3,748
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$
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4,580
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$
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(6,119
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)
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$
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4,024
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Six Months Ended
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March 31,
2018 |
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April 1,
2017 |
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Operating activities:
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Net (loss) income
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$
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(6,321
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)
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$
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3,942
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Adjustments to reconcile net loss to net cash used in operating activities:
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Depreciation and amortization
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4,759
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4,866
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Amortization of deferred financing fees
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153
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170
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|
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Excess tax benefits from stock awards
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—
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(106
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)
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Provision for deferred income taxes
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3,006
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1,446
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Gain on sale of Junkfood assets
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—
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(1,295
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)
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Non-cash stock compensation
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1,142
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768
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Change in the fair value of contingent consideration
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(400
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)
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(200
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)
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Loss on disposal of equipment
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10
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1
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Changes in operating assets and liabilities, net of effect of acquisition:
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Accounts receivable, net
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(11,704
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)
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4,011
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Inventories, net
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3,497
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(19,930
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)
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Prepaid expenses and other assets
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(1,469
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)
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(421
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)
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Other non-current assets
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88
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(165
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)
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Accounts payable
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(2,081
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)
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12,447
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Accrued expenses
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(4,128
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)
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(5,622
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)
|
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Income taxes
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8,022
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(136
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)
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Other liabilities
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(111
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)
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69
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Net cash used in operating activities
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(5,537
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)
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(155
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)
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Investing activities:
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Purchases of property and equipment, net
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(3,543
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)
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(3,712
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)
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Proceeds from sale of Junkfood assets
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1,946
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25,000
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Proceeds from sale of fixed assets
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5,001
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—
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Cash paid for business
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(11,350
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)
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—
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Net cash (used in) provided by investing activities
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(7,946
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)
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21,288
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Financing activities:
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Proceeds from long-term debt
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235,117
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221,510
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Repayment of long-term debt
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(215,816
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)
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(239,930
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)
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Repayment of capital financing
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(678
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)
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(274
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)
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Payment of deferred financing fees
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2
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—
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Repurchase of common stock
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(4,335
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)
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(1,714
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)
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Payment of withholding taxes on stock awards
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(945
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)
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(542
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)
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Excess tax benefits from stock awards
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—
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106
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Net cash provided by (used in) financing activities
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13,345
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(20,844
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)
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Net (decrease) increase in cash and cash equivalents
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(138
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)
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289
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Cash and cash equivalents at beginning of period
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572
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|
397
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Cash and cash equivalents at end of period
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$
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434
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$
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686
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Supplemental cash flow information:
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Cash paid during the period for interest
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$
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2,459
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$
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2,379
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Cash paid during the period for income taxes
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$
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19
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$
|
140
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Non-cash financing activity - seller financing
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$
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5,000
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$
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—
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Non-cash financing activity - capital lease agreements
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$
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3,050
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$
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1,619
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Non-cash financing activity - note receivable
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$
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—
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$
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2,850
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Cash
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$
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11,350
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Deferred consideration
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5,000
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Contingent consideration
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4,650
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Provisional working capital adjustment
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95
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Total consideration
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$
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21,095
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Accounts receivable
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$
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822
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Inventory, net of reserves
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1,159
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Assets held for sale
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5,000
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Goodwill
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9,800
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Intangible assets
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5,200
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Accounts payable, including payable to sellers
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(5,981
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)
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Contingent consideration
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(4,650
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)
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Consideration paid
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$
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11,350
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March 31,
2018 |
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September 30,
2017 |
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Raw materials
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$
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10,681
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$
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8,973
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Work in process
|
14,058
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18,543
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Finished goods
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147,474
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147,035
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$
|
172,213
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$
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174,551
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|
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March 31,
2018 |
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Revolving credit facility established March 2011, interest at 8.0% due March 2019
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$
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4,977
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Term loan established November 2014, interest at 7.5%, payable monthly with a six-year term
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1,700
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Term loan established June 2016, interest at 8.0%, payable monthly with a six-year term
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1,213
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Term loan established September 2017, interest at 8.0%, payable monthly with a six-year term
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3,551
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Yarn
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$
|
9,954
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Finished fabric
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4,324
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Finished products
|
17,258
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|
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$
|
31,536
|
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Three Months Ended
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Six Months Ended
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||||||||||||
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March 31, 2018
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April 1, 2017
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March 31, 2018
|
|
April 1, 2017
|
||||||||
Segment net sales:
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||||||||
Basics
|
$
|
73,712
|
|
|
$
|
70,811
|
|
|
$
|
146,889
|
|
|
$
|
131,647
|
|
Branded
|
26,292
|
|
|
33,327
|
|
|
43,457
|
|
|
57,826
|
|
||||
Total net sales
|
$
|
100,004
|
|
|
$
|
104,138
|
|
|
$
|
190,346
|
|
|
$
|
189,473
|
|
|
|
|
|
|
|
|
|
||||||||
Segment operating income:
|
|
|
|
|
|
|
|
||||||||
Basics
|
$
|
6,209
|
|
|
$
|
7,560
|
|
|
$
|
10,401
|
|
|
$
|
12,248
|
|
Branded
|
2,554
|
|
|
2,780
|
|
|
3,010
|
|
|
1,776
|
|
||||
Total segment operating income
|
$
|
8,763
|
|
|
$
|
10,340
|
|
|
$
|
13,411
|
|
|
$
|
14,024
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
March 31, 2018
|
|
April 1, 2017
|
|
March 31, 2018
|
|
April 1, 2017
|
||||||||
Segment operating income
|
$
|
8,763
|
|
|
$
|
10,340
|
|
|
$
|
13,411
|
|
|
$
|
14,024
|
|
Unallocated corporate expenses
|
3,149
|
|
|
2,820
|
|
|
6,059
|
|
|
6,033
|
|
||||
Unallocated interest expense
|
1,350
|
|
|
1,312
|
|
|
2,685
|
|
|
2,613
|
|
||||
Consolidated income before provision for income taxes
|
$
|
4,264
|
|
|
$
|
6,208
|
|
|
$
|
4,667
|
|
|
$
|
5,378
|
|
|
Effective Date
|
|
Notational
Amount
|
|
Fixed LIBOR Rate
|
|
Maturity Date
|
Interest Rate Swap
|
July 19, 2017
|
|
$10.0 million
|
|
1.74%
|
|
July 19, 2019
|
Interest Rate Swap
|
July 19, 2017
|
|
$10.0 million
|
|
1.99%
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|
May 10, 2021
|
◦
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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 markets 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 Swaps
|
|
|
|
|
|
|
|
||||||||
March 31, 2018
|
$
|
272
|
|
|
—
|
|
|
$
|
272
|
|
|
—
|
|
||
September 30, 2017
|
(56
|
)
|
|
—
|
|
|
(56
|
)
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Cotton Options
|
|
|
|
|
|
|
|
|
|||||||
March 31, 2018
|
$
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
—
|
|
||
September 30, 2017
|
(125
|
)
|
|
(125
|
)
|
|
—
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Contingent Consideration
|
|
|
|
|
|
|
|
||||||||
March 31, 2018
|
$
|
(5,850
|
)
|
|
—
|
|
|
—
|
|
|
$
|
(5,850
|
)
|
||
September 30, 2017
|
(1,600
|
)
|
|
—
|
|
|
—
|
|
|
(1,600
|
)
|
|
March 31,
2018 |
|
September 30,
2017 |
||||
Other assets
|
$
|
272
|
|
|
$
|
—
|
|
Deferred tax assets
|
—
|
|
|
21
|
|
||
Accrued expenses
|
—
|
|
|
(56
|
)
|
||
Deferred tax liabilities
|
(105
|
)
|
|
—
|
|
||
Accumulated other comprehensive income (loss)
|
$
|
167
|
|
|
$
|
(35
|
)
|
Period
|
|
Total Number of Shares Purchased
|
|
Average Price Paid per Share
|
|
Total Number of Shares Purchased as Part of Publicly Announced Plans
|
|
Dollar Value of Shares that May Yet Be Purchased Under the Plans
|
||||
December 31, 2017 to February 3, 2018
|
|
23,070
|
|
|
$20.46
|
|
23,070
|
|
|
|
$7.8
|
million
|
February 4, 2018 to March 3, 2018
|
|
22,000
|
|
|
19.09
|
|
22,000
|
|
|
7.4
|
million
|
|
March 4, 2018 to March 31, 2018
|
|
29,864
|
|
|
19.12
|
|
29,864
|
|
|
6.8
|
million
|
|
Total
|
|
74,934
|
|
|
$19.52
|
|
74,934
|
|
|
|
$6.8
|
million
|
|
March 31, 2018
|
|
September 30, 2017
|
|
|
||||||||||||||||
|
Cost
|
Accumulated Amortization
|
Net Value
|
|
Cost
|
Accumulated Amortization
|
Net Value
|
|
Economic Life
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||||
Goodwill
|
$
|
29,717
|
|
$
|
—
|
|
$
|
29,717
|
|
|
$
|
19,917
|
|
$
|
—
|
|
$
|
19,917
|
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Intangibles:
|
|
|
|
|
|
|
|
|
|
||||||||||||
Tradename/trademarks
|
$
|
16,090
|
|
$
|
(2,465
|
)
|
$
|
13,625
|
|
|
$
|
16,090
|
|
$
|
(2,193
|
)
|
$
|
13,897
|
|
|
20 – 30 yrs
|
Customer relationships
|
5,200
|
|
—
|
|
5,200
|
|
|
—
|
|
—
|
|
—
|
|
|
8 – 10 yrs
|
||||||
Technology
|
1,220
|
|
(1,009
|
)
|
211
|
|
|
1,220
|
|
(947
|
)
|
273
|
|
|
10 yrs
|
||||||
License agreements
|
2,100
|
|
(474
|
)
|
1,626
|
|
|
2,100
|
|
(423
|
)
|
1,677
|
|
|
15 – 30 yrs
|
||||||
Non-compete agreements
|
1,037
|
|
(814
|
)
|
223
|
|
|
1,037
|
|
(733
|
)
|
304
|
|
|
4 – 8.5 yrs
|
||||||
Total intangibles
|
$
|
25,647
|
|
$
|
(4,762
|
)
|
$
|
20,885
|
|
|
$
|
20,447
|
|
$
|
(4,296
|
)
|
$
|
16,151
|
|
|
|
•
|
the volatility and uncertainty of cotton and other raw material prices;
|
•
|
the general U.S. and international economic conditions;
|
•
|
the competitive conditions in the apparel industry;
|
•
|
restrictions on our ability to borrow capital or service our indebtedness;
|
•
|
deterioration in the financial condition of our customers and suppliers and changes in the operations and strategies of our customers and suppliers;
|
•
|
our ability to predict or react to changing consumer preferences or trends;
|
•
|
our ability to successfully open and operate new retail stores in a timely and cost-effective manner;
|
•
|
pricing pressures and the implementation of cost reduction strategies;
|
•
|
changes in economic, political or social stability at our offshore locations;
|
•
|
disruptions at our manufacturing and other facilities;
|
•
|
our ability to attract and retain key management;
|
•
|
the effect of unseasonable or significant weather conditions on purchases of our products;
|
•
|
significant changes in our effective tax rate;
|
•
|
interest rate fluctuations increasing our obligations under our variable rate indebtedness;
|
•
|
the ability to raise additional capital;
|
•
|
the ability to grow, achieve synergies and realize the expected profitability of acquisitions;
|
•
|
the volatility and uncertainty of energy and fuel prices;
|
•
|
material disruptions in our information systems related to our business operations;
|
•
|
data security or privacy breaches;
|
•
|
significant interruptions within our manufacturing or distribution operations;
|
•
|
changes in or our ability to comply with safety, health and environmental regulations;
|
•
|
significant litigation in either domestic or international jurisdictions:
|
•
|
the ability to protect our trademarks and other intellectual property;
|
•
|
the ability to obtain and renew our significant license agreements;
|
•
|
the impairment of acquired intangible assets;
|
•
|
changes in ecommerce laws and regulations;
|
•
|
changes in international trade regulations;
|
•
|
our ability to comply with trade regulations;
|
•
|
changes in employment laws or regulations or our relationship with employees;
|
•
|
cost increases and reduction in future profitability due to the effects of healthcare legislation;
|
•
|
foreign currency exchange rate fluctuations;
|
•
|
violations of manufacturing standards or labor laws or unethical business practices by our suppliers and independent contractors;
|
•
|
the illiquidity of our shares;
|
•
|
price volatility in our shares and the general volatility of the stock market; and
|
•
|
the costs required to comply with the regulatory landscape regarding public company governance and disclosure.
|
Item 4.
|
Controls and Procedures
|
PART II.
|
OTHER INFORMATION
|
Item 1.
|
Legal Proceedings
|
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
Item 6.
|
Exhibits
|
10.23
|
|
|
|
|
|
31.1
|
|
|
|
|
|
31.2
|
|
|
|
|
|
32.1
|
|
|
|
|
|
32.2
|
|
|
|
|
|
101.INS
|
|
XBRL Instance Document
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema
|
|
|
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase
|
|
|
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase
|
|
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase
|
|
|
|
DELTA APPAREL, INC.
(Registrant)
|
Date
|
May 7, 2018
|
By:
|
/s/ Deborah H. Merrill
|
|
|
|
Deborah H. Merrill
Chief Financial Officer and President, Delta Basics |
|
|
(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 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.
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q 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 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 the 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:
|
May 7, 2018
|
/s/ Robert W. Humphreys
|
|
|
|
Chairman and Chief Executive Officer
|
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q 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;
|
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 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 the 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:
|
May 7, 2018
|
/s/ Deborah H. Merrill
|
|
|
|
Chief Financial Officer and President, Delta Basics
|
|
1.
|
The Quarterly Report on Form 10-Q for the quarterly period ended
March 31, 2018
, 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:
|
May 7, 2018
|
|
|
|
|
/s/ Robert W. Humphreys
|
|
|
|
Robert W. Humphreys
|
|
|
|
Chairman and Chief Executive Officer
|
|
1.
|
The Quarterly Report on Form 10-Q for the quarterly period ended
March 31, 2018
, 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:
|
May 7, 2018
|
|
|
|
|
/s/ Deborah H. Merrill
|
|
|
|
Deborah H. Merrill
Chief Financial Officer and President, Delta Basics |
|