Delta Apparel, Inc. along with their wholly-owned subsidiaries, M. J. Soffe, LLC, Junkfood Clothing Company and To The Game, LLC, is an international design, manufacturing, sourcing and marketing company that features a diverse portfolio of high quality branded and private label activewear apparel and headwear. They specialize in selling a variety of casual and athletic products through almost every distribution channel for these types of apparel. Their products are sold to specialty and boutique shops, upscale and traditional department stores, mid-tier retailers, sporting goods stores, screen printers, and private label accounts. In addition, they sell certain products to college bookstores and to the US military. Their products are also available direct to consumers through their websites at www.soffe.com, www.junkfoodclothing.com, and www.deltaapparel.com.  They believe this diversified distribution allows them to capitalize on their strengths to provide casual activewear to consumers purchasing from all types of retailers.

They were incorporated in Georgia in 1999 and their principal executive offices are located at 322 South Main Street, Greenville, SC 29601 (telephone number: 864-232-5200). Their common stock trades on the NYSE Alternext US under the symbol "DLA".

Business Developments

On March 29, 2009, their wholly-owned subsidiary, To The Game, LLC, purchased substantially all of the assets of Gekko Brands, LLC, a premier supplier of licensed and decorated headwear sold under the brands of The Game™ and Kudzu™. The Game™ and Kudzu™ have extensive license agreements including most major colleges and universities, motorsports properties, Churchill Downs, and various resort properties. The Game™ was founded in 1986 as a premier headwear supplier to colleges and universities. Its founder, Neil Stillwell, remains a vital and active leader in the business. The Kudzu™ brand was formed in 1993 to design, import and sell headwear and jackets to NASCAR teams just as The Game™ had done for colleges. To The Game will continue to be headquartered in Phenix City, Alabama and all current operations will remain in place. The purchase of this business is in keeping with their strategy of acquiring brands, licensed properties and operating companies that expand our channels of distribution. They believe these brands, combined with the sourcing, marketing, art, and distribution skills of To The Game management, will provide significant growth opportunities.

The acquisition was financed through their asset-based secured revolving credit facility. In conjunction with the acquisition, they exercised their $10 million accordion feature under their existing credit facility, bringing their total line of credit to $110 million, subject to borrowing base limitations. No goodwill or intangibles are expected to be recorded on their financial statements in connection with the acquisition.

In fiscal year 2008, they began production at Ceiba Textiles, a state-of-the-art offshore textile manufacturing facility. This facility is located in the Green Valley Industrial Park near San Pedro Sula, Honduras and knits, dyes, finishes and cuts fabric into apparel, primarily for the activewear segment of their business. They reached their first production goal of 500,000 pounds of production per week in their fourth quarter of fiscal year 2008. In their second quarter of fiscal year 2009, they achieved their next production goal of 700,000 pounds of production per week, its current capacity with the equipment in place. They have the ability to increase production at this facility to one million pounds per week with an additional capital expenditure of $2 to $3 million. They expect to add this capacity as demand for their products will support this additional production.

On October 2, 2006, they completed the acquisition of Fun-Tees, Inc. Founded in 1972, FunTees is in the business of designing, manufacturing, marketing, and selling private labeled custom knit t-shirts primarily to branded sportswear companies. They believe that the strength of FunTees is its flexibility to custom-manufacture products in a variety of garment styles, fabrics and colors and its ability to decorate and package products for retail in its offshore facilities. The integration of its textile operations into their manufacturing platform is expected to result in improved manufacturing efficiencies and cost savings in their combined business.

Business Segments

They operate their business in two distinct segments: Activewear and Retail-Ready. The Activewear segment comprises their business units primarily focused on garment styles that are characterized by low fashion risk. They market, distribute and manufacture unembellished knit apparel under the brands of "Delta Pro Weight®”, "Delta Magnum Weight™” and "Quail Hollow™”. The products are primarily sold to screen printing companies. In addition, they manufacture products under private labels for retailers, branded sportswear companies, corporate industry programs and sports licensed apparel marketers. The custom knit unembellished and embellished private label apparel products in the FunTees business are included in the Activewear segment since the FunTees acquisition on October 2, 2006.

The Retail-Ready segment consists of their business units primarily focused on more specialized apparel garments and headwear to meet consumer preferences and fashion trends. They sell these embellished and unembellished products through specialty and boutique stores, upscale and traditional department stores, mid-tier retailers and sporting goods stores. In addition to these retail channels, they also supply college bookstores and produce products for the U.S. Military. Their products in this segment are marketed under the brands of “Soffe®”, “Intensity Athletics®”, “Junk Food®”, “Junk Mail®” and “Sweet and Sour®”. Their newest headwear products under The Game™ and Kudzu™ are included in the Retail-Ready segment beginning on March 29, 2009.

Products and Marketing

Their Activewear segment markets high quality knit apparel garments for the entire family. These garments are marketed under the Delta Pro Weight®, Delta Magnum Weight™, and Quail Hollow™ brand names. The Pro Weight line represents a diverse selection of mid-weight, 100% cotton silhouettes. Short sleeve and long sleeve tees are available in youth and adult sizes in a variety of colors. Specialty items that are also available for adults include pocket tees and ringer tees in a wide variety of colors. The Magnum Weight line is designed to give their customers a variety of silhouettes in a heavier-weight, 100% cotton fabric. Products in this category include short sleeve and long sleeve silhouettes in a wide range of colors, available from the size 2-Toddler to adult sizes up to 5X. Specialty items are also available within this segment, including the popular Tall Tee in sizes to 5XLT for young men and toddler and juvenile styles for the younger child. The Quail Hollow™ line includes polo shirts, ladies and junior tees. The ladies and juniors programs feature an assortment of styles developed specifically for misses, plus sizes and young juniors. Quail Hollow also offers a trendy slim fitting tee for all adults. Through the acquisition of FunTees, they have increased their business of designing, manufacturing, marketing, and selling private label custom knit t-shirts, including embellished products, primarily to major branded sportswear companies. Also in connection with the FunTees acquisition, they have added the ability to provide their customers with products that they can direct ship to the retailer without further packaging enhancements (hangers, tags, wrappings).

Delta Apparel's Retail-Ready segment designs and produces shorts, t-shirts, jersey and fleece apparel that are available in a wide variety of colors and sizes, including toddlers, boys, girls, mens, womens and big & tall. With the acquisition of The Game™ and Kudzu™, their retail-ready segment also includes licensed and decorated headwear. They believe that the shorts that are branded with the Soffe® label enjoy a very loyal following among teenage and adolescent girls, many of whom are involved in cheerleading and dance teams. During the 2006 fiscal year, they also added sports team uniforms to their product line, under the Intensity Athletics® label. With the addition of Junkfood Clothing Company in fiscal year 2006, their Retail-Ready segment includes vintage licensed apparel for juniors, men, boys and children. The Junk Food® product line, including Junk Mail® and Sweet and Sour®, has distinct and innovative designs and styles. They believe their Retail-Ready segment is also a leader in product innovation as demonstrated by their Dri-release™ offerings. Dri-release™ is a microblend performance fiber that is engineered to offer cotton-like comfort with quick dry properties to wick perspiration away from the skin. Their recent additions to this line include the Soffe performance apparel line offering WicAway fabrics, a new fabric with quick-drying properties.

Their marketing is performed by both employed sales personnel and independent sales representatives located throughout the country. They currently service over 18,000 customers. Part of their strategy is not to become dependent on any single customer. As such, no single customer accounts for more than 10% of their sales in any year.

Manufacturing

They manufacture the majority of the products they sell utilizing company-owned and leased facilities. When demand exceeds production capacity or when it is cost effective to do so, they source products from third party producers and use outside contractors and general suppliers for textile and sewing production.

They knit, dye, and finish their fabric in a company-owned plant located in Maiden, North Carolina. Additionally, they knit, dye, finish and cut their fabric at Ceiba Textiles, a state-of-the-art leased facility near San Pedro Sula, Honduras. Their garments are primarily sewn in their company-owned plants in Fayetteville, North Carolina, and Rowland, North Carolina, and in leased facilities in La Paz, El Salvador, in Campeche, Mexico and in San Pedro Sula, Honduras. In addition to their leased sewing facilities, they use outside contractors, primarily located in the Caribbean basin, to sew their products. Along with their internal manufacturing, they also source undecorated products and full-package products through independent sources.

Their products are distributed from their facilities strategically located throughout the United States. They offer same-day shipping in their activewear segment and both segments use third party carriers to ship products to their customers. In order to better serve their customers, they allow their customer to order products by the piece, by the dozen, or in full case quantities.

Employees

As of 2009, they employed approximately 6,500 full time employees located in the United States, Honduras, El Salvador and Mexico. Approximately 950 employees in Honduras are covered by a collective bargaining agreement. They have never had a strike or legal work stoppage and believe that their relations with their employees are good. They have invested significant time and resources in ensuring that the working conditions in all of their facilities meet or exceed the standards imposed by the governing laws. They have obtained WRAP (Worldwide Responsible Apparel Production) certification for all of their existing sewing plants that they operate in Honduras, El Salvador and Mexico. They also obligate their third party manufacturing contractors to follow their employment policies.

Learn more about Delta Apparel at their website.

Note: Delta Apparel is NOT the same company as Delta Galil.