Delta Apparel, Inc. · OTC:DLAPQ
Delta Apparel — Investor Presentation (March 2011)
40 slides from Delta Apparel's investor presentation, March 2011
Slide 1: Delta Apparel, Inc.
Delta Apparel, Inc. _ - —_ «~~ NYSE Amex: DLA March 2011
Slide 2: Contact Information
Contact Information !"#$%&'((%)"#*&+,-.& /)"0",$")01& #!!"$%&'(")*+,"$'-..'" @%A.-'"BC"D&EF(-.GH" /-..,0+11.2"$3""!4567" !"#$%&#'(#')(!*+( 859:!#!:;!66" 859:!#!:;744"<=*>?" I.A%-*("DC").--+11" ,-.(!/+(#')(0%1#23%1%( I.1'*"JFF*-.12"K,LC" !" !" )*-L("!677"
Slide 3: Forward-looking statements
Statements and other information in this presentation that are not reported financial results or other historical information are forward-looking statements. These are based on our expectations and are necessarily dependent upon assumptions, estimates and data that we believe are reasonable and accu
Slide 4: Diverse Product Offerings with Broad Distribution
a Diverse Product Offerings with Broad Distribution a Meaningful Growth Opportunities a Streamlined - Flexible Supply Chain a Compelling Margin and EPS Expansion Potential a Strong Track Record of Financial Success a March 2011
Slide 5: Branded, Licensed and Basics
Branded: Proprietary Licensed Basics: pune Licenses: Colleges and Universities, Disney, NFL, Warner Bros. Manufacturing: Vertically-Integrated and aa.” Flexible Supply Chain ® Employees: 7,400 Worldwide March 2011
Slide 6: Public Company and Acquisitions Timeline
Public Company = Acquisition Offshore Textiles June 2000 Ceiba Textiles August 2006 2000 Acquisition Junkfood Clothing August 2005 TEXTILES Acquisition Acquisition Intensity Athletics The Game October 2005 March 2009 uF Acquisition Exclusive License FunTees Realtree Outfitters October 2006 October 2
Slide 7: Branded and Basics Distribution Channels
Branded Basics -— WUSofe | Junkfood }| ToThe Game | At Gun i | ee L _ Activewear ae ry &A 5 Powe By Bo W PS The iftlife, <= He Gam Regional ange -— Regional Screen — Retail me |S Boutiques r~ College e-Commerce Pree - Bookstores - 7 jeer Goods — Specialty Chains Sui Retail -— Licensed Apparel -— Out
Slide 8: Cute clothes for active kids
cute clothes for active kids e ) - ANS
Slide 9: The Cotton Exchange
Slide 10: Intensity Athletics
Slide 11: Junkfood Clothing Co.
Slide 12: To The Game
Slide 13: Realtree Outfitters Exclusive License
Slide 14: Mi tel Fe»
Mi tel Fe» 3) Ras
Slide 15: e-commerce
e-commerce Personalized Apparel
Slide 16: Delta Catalog
Slide 17: A Division of Delta Apparel
A DIVISION OF DELTA APPAREL RY TARY}
Slide 18: Growth Strategy
Growth Strategy
Slide 19: Sales growth strategy and FY13 goal
| | T | T T Sales {in millions) $455 to $465 $500 | 1 FY10 FY11 Guidance FY13 Goal Grow Distribution Channels — Existing Markets — New Channels Focus on Market Synergies Expand Decorated, Licensed and Branded Products The Cotton Exchange Salt Life March 2011
Slide 20: $225 to $230 Million Target FY11 Revenue
a $225 to $230 Million Target FY11 Revenue — Up 15% From Prior Year a Four Proprietary Brands with Minimal Market Overlap a Two Licensed Brands a Global Sports and Entertainment Licenses a Diverse Distribution Channels a Acquisition Opportunities — Acquired Cotton Exchange in Summer 2010 — Salt Life
Slide 21: $230 to $235 Million Target FY11 Revenue
a $230 to $235 Million Target FY11 Revenue — Up 2% From Prior Year — Fifth Consecutive Year of Organic Growth a Broad Customer Base — Strong Private Label Relationships with Global Brands — Regional Screenprinters — Mass Merchant Support a Gross Margin Improvements — Manufacturing Platform Driving M
Slide 22: Strategic Opportunities
a Strategic Opportunities — College Bookstore Market Share The ® ef — Leverage Cotton Exchange Cotton “i f Exchange « Strengths ‘ o Delivery o Service o USA Made — Coast Guard Relationship — Domestic Screen Print Capacity [Delta Apparel ine 2 March 2011
Slide 23: Salt Life
Salt Life Cee a Compelling Lifestyle Brand a Expand Product Offerings a New Distribution Channels a Leverage Manufacturing and Sourcing Platforms st (He, 23 March 2011
Slide 24: Flexible Supply Chain
Flexible Supply Chain
Slide 25: Streamlined - Flexible Supply Chain
Streamlined - Flexible Supply C eee a Vertical Manufacturing Platform — Speed to Market — Low Cost Production — Consistent Quality — Expansion Capabilities — Western Hemisphere an Advantage a International Sourcing Capabilities — Depth of Product Offerings — Long Standing Relationships | betta Appar
Slide 26: US and International Locations
. US Locations 7 + Wendell, NC — Decorating — * Rowland, NC - Sewing ss + Fayetteville, NC - Sewing and Decorating —___ Maiden, NC - Textiles International Locations ~ Sewing and Decorating - Campeche, MX « Sewing and Decorating - El Salvador * Sewing - San Pedro Sula, HN * ——————_ Textiles - Nueva,
Slide 27: Gross Margin Expansion
Gross Margin Expansion
Slide 28: Gross Margin Drivers and Targets
a Growth of Branded Products a Expansion of Value Added Services — Decorating — Retail Packaging a Manufacturing Cost Savings a Acquisitions in Niché Markets a Risk - Cotton Prices Gross Margins 24% 22% : FYO9 FY10 FY11 = FY13 Target Goal 30% 26% March 2011
Slide 29: Revenue
Revenue $260 $225 to $250 $230 aan $198 $156 $150 $133 $134 aa $100 $85 $72 “ ] | $0 $- FYO3. FYO4 FYOS FYO6 FYO7 FYO8 FYO9 FY10 FY11 = FY13 Target Goal {in millions) ie) March 2011
Slide 30: Licensed and Decorated Percent of Sales
Licensed Decorated % of Sales % of Sales 60% 50% 46% a 44% 40% 39% 34% 30% 30% 27% 28% 24% 22% 20% 14% 15% “ li | ll 0% FYO7, FYO8 FYO9 FY10 FY11 = FY13 FyO6 FYO7 FYO8 FYO9 FY10 FY11 = FY13 Target Goal Target Goal Mbenarnppareyin a March 2011
Slide 31: Ceiba Textiles Production Pounds
Ceiba Textiles Production Pounds Average Pounds per Week 1,400k 800k Savings —_——> ane $7.0 million Opportunity A J $4.0 million (incremental) Current FY12 Target Future Expansion [Delta Apparel, ine 31 March 2011
Slide 32: Supply vs. Demand Driven Bull Market
a Supply vs. Demand Driven Bull Market a Low Stocks-to-Use Ratio a Current Trading at All Time High a Raised Product Pricing to Retailers — Future Increases to Cover Replacement Cost of Inventory — Potential Demand Destruction with Higher Prices $2.00 $0.50 2006 2007 2008 2009 2010 2011 imibararappa
Slide 33: Financial Results
Financial Results
Slide 34: FY09 FY10 FY11 Target Growth
FYO9 FY10 FY11 Target Revenue Growth 10% 20% ~10% Operating Income Growth 148% 66% ~25% EBITDA (in millions) $20.2 ) $28.7 ~$33.0 iperampparebine Moreh 2011
Slide 35: Sales Growth
Sales Growth 15% CAGR FYO1 FY02 FY03 FY04 FYOS FY06 FYO7 FY08 FYO9 FY10 FY11 Guidance (in millions) petampparehing 35 March 2011
Slide 36: EBITDA
EBITDA $13* FYO1 FYO2 FYO3 FYO4 FYOS FYO6 FYO7 FYO8 FYO9 FY10 FY11 * Impacted by restructuring activities Target {in miltions) Ppetampparting 36 March 2011
Slide 37: Diluted EPS
a Diluted EPS 07 Be $(0.06)* = FYOl FYO2 FYO3 FYO4 FYOS FYO6 FYO7 FYO8 FYO9 FY1O0- FY11 * impacted by restructuring activities Guidance [pettampparehing 37 March 2011
Slide 38: Working Capital, Debt and Equity
A/R Net DSO Inventory Net Inventory Turns AIP & Accruals Debt Equity June 2008 $62,012 50.0 $124,746 2.1 $53,111 $102,322 $104,893 June 2009 $57,884 49.5 $125,887 2.3 $51,955 $91,654 $112,145 June 2010 $59,916 50.2 $116,599 2.7 $53,321 $68,073 $125,714 March 2011
Slide 39: Sales, Gross Margins, Diluted EPS Goals
Sales Gross Margins Diluted EPS $3.00 (in millions) 30% 26% $1.55 24% to $1.70 22% $1.40 ! $0.76 FYO9 FV10 FY21 FY13 FYO9 FY10 FY11 FY13 Fyo9 FY10 FY11 FY13 Guidance Goal Target Goal Guidance Goal [Delta Apparel ne 39 March 2011
Slide 40: Diverse Product Offerings with Broad Distribution
a Diverse Product Offerings with Broad Distribution a Meaningful Growth Opportunities a Streamlined - Flexible Supply Chain a Compelling Margin and EPS Expansion Potential a Strong Track Record of Financial Success ibararappareyimen March 2011