Delta Apparel, Inc. (AMEX: news) today announced that its net sales for the twelve months ended June 30, 2001 were $120.4m, a 5.2% increase from the prior year.

Fully diluted earnings per share for fiscal year 2001 were $4.03, up $2.03 per share from $2.00 earnings per share in fiscal year 2000.

For the fourth fiscal quarter ended June 30, 2001, the Company recorded sales of $35.4m, down $1.5m or 4.2% from the fourth fiscal quarter of last year. Decreased sales were the result of lower unit prices, partially offset by increased unit volume. Operating earnings were $2.7m, down $3.6m from the prior year fourth fiscal quarter. Lower operating earnings were the result of manufacturing shutdowns required to maintain inventory levels. EBITDA for the quarter was $4.3m, down $3.7m from the fourth fiscal quarter of last year.

Interest expense was $0.4m for the quarter, compared to $1.0m in the prior year quarter. This reduction was primarily a result of the contribution to equity of intercompany debt in connection with the spin-off from Delta Woodside Industries, Inc. on June 30, 2000.

The effective income tax rate on pretax income for the three months ended June 30, 2001 was (24.7%), compared to 1.3% for the fiscal year ended July 1, 2000. Because of lower than expected fourth quarter results, the Company's annualized effective income tax rate for the year ended June 30, 2001 is 9.0%, down from the 18.0% expected through the first three quarters of the year. This resulted in the income tax benefit in the fourth fiscal quarter.

Net earnings for the quarter were $2.9m, down $2.3m from the fourth fiscal quarter of last year. Net earnings were 8.1% of sales, compared with 14.1% of sales in the prior year quarter.

Basic and diluted earnings per share in the quarter ended June 30, 2001 were $1.20 and $1.16 per share, respectively, down from the $2.22 earnings per share for the same quarter in fiscal year 2000.

Sales for the year ended June 30, 2001 were $120.4m, up $5.9m, or 5.2% from the prior year. Operating earnings for fiscal year 2001 were $12.3m, up $0.1m, or 0.8%, from fiscal year 2000. EBITDA for the year ended June 30, 2001 was $18.6m, down $0.2m from the year ended July 1, 2000.

Interest expense for the twelve months ended June 30, 2001 was $1.3m, a decrease of $6.1m from the prior year. This reduction was primarily a result of the contribution to equity of intercompany debt in connection with the spin-off from Delta Woodside Industries, Inc. on June 30, 2000.

Net earnings for the year ended June 30, 2001 were $10.0m, up $5.2m, or 111.0%, from the previous year. Basic and diluted earnings per share for the twelve months ended June 30, 2001 were $4.15 and $4.03 per share, respectively, up from $2.00 per share for the twelve months ended July 1, 2000.

During the three months and the twelve months ended June 30, 2001, the Company purchased 18,700 and 34,700 shares, respectively, of its stock through its Stock Repurchase Program. The stock was purchased at an average cost of $17.49 per share.

Robert W. Humphreys, President and CEO, commented on the year's performance, "We are excited by the results for the 2001 fiscal year, especially considering the challenging retail conditions in recent months. Our unit volume increased from the prior year by just over 10%. Price promotions in the activewear market, however, drove our prices slightly lower than in the previous year."

"Although we are disappointed in the lower than expected results for the fourth quarter, we believe our Company can continue to grow profitably during the upcoming year. While the first half of fiscal 2002 will also experience depressed margins, we expect that the balance of the year should benefit from lower cotton prices and the cost savings related to the closing of the Washington, Georgia sewing facility, as well as improved operating cost in our new facility in Mexico. We are excited about our Sales and Distribution Center in Southern California that opened the first week in June. This new center allows us to provide immediate delivery to our West Coast customers."

Delta Apparel, Inc. is a vertically integrated supplier of knit apparel, particularly T-shirts. The Company sells its products as blanks, which are then screen printed or embroidered with designs and logos for sales to consumers. Delta Apparel was spun-off on June 30, 2000 as an independent business when Delta Woodside Industries, Inc. separated into three businesses. Delta Apparel has operations in five states, two company-operated sewing facilities in Honduras and one company-operated sewing facility in Mexico. The Company employs about 2,500 worldwide.


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