2017 06-12 DLA Investor Presentation
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This presentation by Delta Apparel provides an overview of the company for investors. Key points include: - Delta Apparel is an international apparel company with brands like Salt Life, Soffe, and Art Gun. - The company has pursued strategic acquisitions and initiatives since 2001 that have increased shareholder value, including the recent acquisition of Salt Life. - Delta Apparel has focused on growing its eCommerce platform and lifestyle brands like Salt Life to drive profitable sales growth. - The presentation highlights growth opportunities in areas like Art Gun's digital print and fulfillment capabilities and the potential for Salt Life to continue its strong growth trajectory.
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2017 06-12 DLA Investor Presentation
- 2. 2 This presenta-on contains “Forward Looking” statements which reflect the Company's current expecta-ons regarding future events and which involve risks and uncertain-es. Although we believe that our expecta-ons are based on reasonable assump-ons, actual results could differ materially from those projected in this presenta-on. Please refer to the wriKen materials made available to you in connec-on with this presenta-on as well as the Company’s most recent Form 10-K and other SEC filings for a more detailed discussion of some of the risks facing the Company that could affect the forward looking statements in this presenta-on. Finally, please note that any “Forward Looking” statements are made only as of the date of this presenta-on and the Company does not commit to update or revise these statements even if it becomes apparent that any projected results will not be realized. Delta Apparel, Inc. – June 2017 FFoorrwwaarrdd LLooookkiinngg SSttaatteemmeennttss
- 3. 3 . . . an international design, marketing, manufacturing and sourcing company that features a diverse portfolio of lifestyle basic and branded activewear apparel and headwear. .biz DDeellttaa AAppppaarreell,, IInncc.. Delta Apparel, Inc. – June 2017
- 4. 4 • Stock trading below book value, with additional $3.00 per share of real estate with no book value • Completed FY15 & FY16 cost initiatives as planned, further improving 2H17 and FY18 margins • Art Gun is ahead of the curve in servicing the changing retail platform with digital print and fulfillment capabilities • eCommerce platform driving profitable sales growth • Strong growth potential with high-profile lifestyle brand, Salt Life Why Invest in DLA? SShhaarreehhoollddeerr VVaalluuee Delta Apparel, Inc. – June 2017
- 5. 5 $0 $5 $10 $15 $20 $25 $30 Stock Price Book Value As of June 6, 2017 2000 2002 2004 2006 2008 2010 2012 2014 2016 2017 Q2 Reached Record Stock Price of $25.52 on July 13, 2016 SShhaarreehhoollddeerr VVaalluuee Delta Apparel, Inc. – June 2017
- 6. 6 MANUFACTURING REALIGNMENT SShhaarreehhoollddeerr VVaalluuee 2000 | 2001 | 2002 | 2003 | 2004 | 2005 | 2006 | 2007 | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 . . 2003 . 2005 2005 2006 2006 2009 , 2009 2010 2010 2016 STRATEGIC INITIATIVES2013 2015 .biz 2000 . 2017 Delta Apparel, Inc. – June 2017
- 7. 7 Soffe Acquisi-on Junkfood/Intensity Acquisi-ons Fun Tees Acquisi-on Coast Acquisi-on The Game Acquisi-on Art Gun Acquisi-on Salt Life Acquisi-on CoKon Exchange Acquisi-on SShhaarreehhoollddeerr VVaalluuee –– Investments $0 $10 $20 $30 $40 $50 $60 $70 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 Capex - $125m Acquisi/ons - $175m Stock Buyback - $40m (in millions) Invested Over $340 Million Since 2001 Delta Apparel, Inc. – June 2017
- 8. 8 SShhaarreehhoollddeerr VVaalluuee • Streamlined Decision-Making and Informa-on Flow • Increased Produc-on in Lower Cost Facili-es • Ra-onalized Non-Strategic Areas – Closed Canada Distribu-on – Sold The Game Business • De-Levered the Balance Sheet • Focused Management on Strategic Areas FY15 Strategic Ini/a/ves Completed Reduced Fixed Costs by over $8 million Delta Apparel, Inc. – June 2017
- 9. 9 SShhaarreehhoollddeerr VVaalluuee • Tex-le, Sew and Screenprint Expansion in Central America – Capital Investment of $7 million – Con-nue USA-Made Programs • Source domes-c fabric for USA sewing and screenprint – Aligned Resources in Campeche, Mexico • Source fabric in-country • Consolidated sew opera-ons • Provide quick-turn print and packaging programs FY16 Manufacturing Realignment Completed Reduced Manufacturing Costs by $8 million Delta Apparel, Inc. – June 2017
- 10. 10 SSuuppppoorrttiinngg CCoommmmuunniittiieess –– Mfg Wages $0 $5 $10 $15 $20 $25 $30 FY12 FY13 FY14 FY15 FY16 US Honduras Mexico El Salvador (in millions) DLA Supports Nearly $5 Million Per Year in U.S. Manufacturing Wages Delta Apparel, Inc. – June 2017
- 11. 11 SSuuppppoorrttiinngg CCoommmmuunniittiieess - Taxes $0 $1 $2 $3 $4 $5 $6 $7 $8 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 Taxes (in millions) DLA Paid $35 Million to Support United States Infrastructure Since 2001 Delta Apparel, Inc. – June 2017
- 12. 12 • Divested Junkfood Business – Recognized $1.3 million Gain on Sale – Use $28 million Proceeds for Investments • Share buyback • Organic growth strategies • Acquisi-on growth opportuni-es • eCommerce and Retail Expansion – Expansion of Art Gun Footprint – B2C and B2B Plalorms • Growth of Soffe and Salt Life Brands – Consumer Touch Points Focus on Key Growth Areas SShhaarreehhoollddeerr VVaalluuee FY17 Ini/a/ves Delta Apparel, Inc. – June 2017
- 13. 13 GGrroowwtthh IInniittiiaattiivveess –– Art Gun § Innova-ve Technology § State of the Art Equipment - Kornit AVKs 1000s § Mass Customiza-on Capacity - Capacity to print over 20,000 unique garments per day § Quality Assurance § Speed to Market - Geographic expansion eCommerce Digital Print & Fulfillment Delta Apparel, Inc. – June 2017
- 14. 14 AArrtt GGuunn –– Sales Growth 2010 2011 2012 2013 2014 2015 2016 (in millions) $5 $10 $15 Five Year CAGR = 65% Delta Apparel, Inc. – June 2017
- 15. 15 26% Growth B2B B2C GGrroowwtthh IInniittiiaattiivveess -- eCommerce 12% Growth Goal Goal FY15 FY16 FY17 FY15 FY16 FY17 $4,000 $5,032 $6,000 $13,140 $14,770 $17,000 Delta Apparel, Inc. – June 2017 +20% +15%
- 16. 16 B2B B2C eeCCoommmmeerrccee SSaalleess GGrroowwtthh FY16 FY17 FY16 FY17 FY16 FY17 Total $2,349 $2,957 $6,009 $7,538 $8,358 $10,495 +26% +25% +26%FY17 YTD Q2 (in thousands) Delta Apparel, Inc. – June 2017
- 17. 17 eCommerce Sales GGrroowwtthh IInniittiiaattiivveess -- Soffe $281 $228 $509 $216 $165 $381 Q1 Q2 YTD +30% +38% +34%• Gaining Market Share in Emerging Sales Channels - eCommerce - Strategic Spor-ng Goods - Independents • Strength with Made-in-USA Products - Military - Other • Improving Profitability FY16 FY17 (in thousands) Delta Apparel, Inc. – June 2017
- 18. 18 SSaalltt LLiiffee • Strong Sales Growth – Product Extension – Gender Expansion – Door Growth – Geographic Development • Double-Digit Opera-ng Profit Delta Apparel, Inc. – June 2017
- 19. 19 eCommerce Sales up 46% in 1H17 Delta Apparel, Inc. – June 2017
- 23. 23 SSaalltt LLiiffee DDoooorr CCoouunntt FY16 Door Count ~2,200 Delta Apparel, Inc. – June 2017
- 24. 24 Salt Life – Huntington Beach, CA Delta Apparel, Inc. – June 2017
- 25. 25 St.Augustine Beach, FL Jacksonville Beach, FL SSaalltt LLiiffee RReessttaauurraannttss Operated through Licensee Delta Apparel, Inc. – June 2017
- 26. 26 Outlook $100 million 20% CAGR $60 million 10% CAGR 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 $13 $20 $27 42% CAGR $29 $35 $6 Sales (in millions) SSaalltt LLiiffee GGrroowwtthh PPootteennttiiaall Delta Apparel, Inc. – June 2017
- 27. 27 -200% 0% 200% 400% 600% 800% 1000% Stock Price S&P 500 As of June 6, 2017 2000 2002 2004 2006 2008 2010 2012 2014 2016 2017 SShhaarreehhoollddeerr VVaalluuee 795% 75% Reached Record Stock Price of $25.52 on July 13, 2016 Delta Apparel, Inc. – June 2017
- 29. 29 SSaalleess HHiissttoorryy $114.5 $120.4 $131.6 $129.5 $208.1 $228.1 $270.1 $312.4 $322.0 $355.2 $424.4 $475.2 $489.9 $490.5 $452.9 $449.1 $425.2 FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 Note: FY00 through FY13 are June FYE; FY14 begins a September FYE. (in millions) Por-on represen-ng sales of The Game $428.8 $439.0 Delta Apparel, Inc. – June 2017
- 30. 30 OOppeerraattiinngg PPrrooffiitt HHiissttoorryy $12 $12 $10 $11 $17 $20 $27 $12 $5 $12 $20 $25 ($6) $14 ($2) $16 $16 (in millions) * * ** * Impacted by restructuring ac-vi-es ** Impacted by coKon costs Gain on the sale of The Game FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 Note: FY00 through FY13 are June FYE; FY14 begins a September FYE. Delta Apparel, Inc. – June 2017
- 32. 32 • Improved Debt Leverage – Total Debt of $115.8 million at FYE16 – Expect Leverage Under 3x EBITDA at FYE17 • Executed U.S. Credit Facility – Extended Agreement to May 2021 – Lowered Interest Expense by 50 Basis Points • Capital Spending in FY16 of $14.7 million – Depr & Amort, including Non-Cash Comp, of $11.9 million in FY16 – Expect Capital Spending in FY17 of $10 million • Stock Repurchases in FY16 of $3.5 million – Repurchased Nearly 3 million Shares Since FY01 – Continuing Repurchases in FY17 • Renewed Universal Shelf Filing – Increased to $150 million SSoolliidd BBaallaannccee SShheeeett Delta Apparel, Inc. – June 2017
- 33. 33 Department Stores Mid-Tier Retailers Mass Strategic Spor/ng Goods Outdoor Retailers Independents Team Dealers Resorts/Des/na/ons Specialty Retailers Military Interna/onal Branded Private Label Retail Licensing Screenprinters eRetailers Branded Web Sites Retail Stores Flash Sites Sell to Nearly 11,500 Customers .biz DDeellttaa AAppppaarreell,, IInncc.. Delta Apparel, Inc. – June 2017
- 39. 39 EXECUTIVE OFFICES Delta Apparel, Inc. 322 S. Main Street Greenville, SC 29601 Office: (864) 232-5200 Fax: (864) 232-5199 Robert W. Humphrey Chairman & CEO Deborah H. Merrill CFO and President, Delta Basics CONTACTS Delta Apparel, Inc. – June 2017