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Delta Apparel Reports Profit in Q2

Delta Apparel Inc. reported a second-quarter profit, reversing a year-ago loss.

Elevated by higher prices and manufacturing efficiency, Delta Apparel Inc. reported a second-quarter profit, reversing a year-ago loss.

For the quarter ended Dec. 27, the Duluth, Ga.-based vendor said it recorded net income of $595,000, or 7 cents a diluted share, versus a net loss of $2.8 million, or 33 cents a share, a year ago. Stripping out special items in both periods, the company had earnings per share of 3 cents compared with a net loss of 18 cents a share in last year’s quarter.

Net sales were up 6.7 percent to $73.4 million from $68.8 million.

The company said retail sales from its Soffe and Junkfood businesses jumped 17 percent to $32.4 million from $27.7 million. The activewear segment, comprised of the Delta and FunTees businesses, reported sales of $41 million, which was consistent with last year’s revenue of $41.1 million.

Gross margins increased 610 basis points to 21.9 percent of sales versus 15.8 percent in the prior-year period. Delta said the second quarter of 2007 included $2 million of restructuring expenses, which lowered gross margin by about 290 basis points.

For the six months, the athletic and casual clothing maker had a profit of $1.3 million, or 15 cents a share, versus a net loss of $4.4 million, or 52 cents a share, which is inclusive of a 31-cent loss a share from restructuring costs, a year before. Revenue rose 16.6 percent to $164.8 million, from $141.3 million.