Delta Apparel(DLA) - 2021 Q2 - Quarterly Report

Financial Performance - Net sales for the March quarter were $108.6 million, a 12% increase compared to $96.7 million in the prior year[89]. - Operating income for the second quarter increased to $7.6 million, more than double the $3.6 million in the prior year[98]. - The Delta Group segment net sales grew 12% to $94.2 million, driven by over 40% growth in direct-to-retail and brand-direct sales channels[90]. - The Salt Life Group segment revenue grew 16% to $14.4 million, with branded retail store sales increasing over 175% year-over-year[92]. - Direct-to-consumer sales channels increased 92% in the current quarter compared to the prior year quarter[89]. - The company achieved net earnings of $4.4 million, or $0.62 per diluted share, compared to $1.3 million, or $0.19 per diluted share, in the prior year[102]. Financial Position - Accounts receivable were $66.1 million at March 2021, compared to $60.1 million as of September 2020[103]. - Net inventory as of March 2021 was $148.5 million, down approximately 25% from a year ago[104]. - Total net debt was $135.2 million at March 2021, an increase of $13.0 million from September 2020[105]. Cash Flow and Expenditures - Operating cash flows improved to $0.7 million for the six months ended March 2021, compared to a cash outflow of $10.2 million in the prior year, driven by operating income expansion and lower inventory build[107]. - Total capital expenditures for the six months ended March 2021 were $8.4 million, primarily for digital printing capacity and a new distribution center in Phoenix, Arizona[108]. - Fiscal 2021 capital expenditures are anticipated to be approximately $20 million, focusing on distribution expansion, digital print equipment, and additional retail store openings[109]. - Cash used by financing activities was $4.3 million during the six months ended March 2021, mainly for scheduled loan principal payments and contingent earnout payments[110]. Stock and Financing - As of March 2021, there was $7.5 million of repurchase authorization remaining under the Stock Repurchase Program, with no shares purchased during the March 2021 quarter[114]. - The company’s credit facility and cash flows from operations are intended to fund day-to-day working capital needs and planned capital expenditures[113]. - The company is currently in compliance with the financial covenants of its U.S. revolving credit facility, with availability above minimum thresholds as of March 2021[112]. Regulatory and Compliance - The company incurred capital and other expenditures annually to comply with environmental regulations, but does not expect these to materially affect operations or liquidity[119]. Non-GAAP Measures - Non-GAAP financial measures are provided to give investors additional insights into ongoing performance, but should not be considered in isolation from U.S. GAAP results[106]. - The company’s financial condition and results are based on estimates and judgments that may differ from actual results under different assumptions[115].