Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Jun. 27, 2015 | Jul. 23, 2015 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | DELTA APPAREL, INC | |
Entity Central Index Key | 1,101,396 | |
Current Fiscal Year End Date | --10-03 | |
Entity Filer Category | Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Jun. 27, 2015 | |
Document Fiscal Year Focus | 2,015 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 7,849,188 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 27, 2015 | Sep. 27, 2014 |
Current assets: | ||
Cash and cash equivalents | $ 360 | $ 612 |
Accounts receivable, less allowances of $3,487 and $3,159 respectively | 66,496 | 68,802 |
Income tax receivable | 0 | 1,360 |
Inventories, net | 149,399 | 162,188 |
Prepaid expenses and other current assets | 5,010 | 4,534 |
Deferred income taxes | 6,665 | 12,152 |
Total current assets | 227,930 | 249,648 |
Property, plant and equipment, net of accumulated depreciation of $79,176 and $75,801 respectively | 38,121 | 41,005 |
Goodwill | 36,729 | 36,729 |
Intangibles, net | 22,503 | 23,500 |
Noncurrent deferred income taxes | 166 | 0 |
Other assets | 3,578 | 3,696 |
Total assets | 329,027 | 354,578 |
Current liabilities: | ||
Accounts payable | 50,103 | 57,719 |
Accrued expenses | 20,654 | 20,167 |
Income tax payable | 184 | 0 |
Current portion of long-term debt | 7,590 | 15,504 |
Total current liabilities | 78,531 | 93,390 |
Long-term debt, less current maturities | 104,585 | 114,469 |
Deferred income taxes | 0 | 3,399 |
Other liabilities | 1,056 | 1,513 |
Contingent consideration | 3,100 | 3,600 |
Total liabilities | 187,272 | 216,371 |
Shareholders’ equity: | ||
Preferred stock—$0.01 par value, 2,000,000 shares authorized, none issued and outstanding | 0 | 0 |
Common stock —$0.01 par value, 15,000,000 shares authorized, 9,646,972 shares issued, and 7,877,683 and 7,877,674 shares outstanding as of June 27, 2015 and September 27, 2014, respectively | 96 | 96 |
Additional paid-in capital | 59,485 | 59,649 |
Retained earnings | 103,473 | 99,622 |
Accumulated other comprehensive loss | (331) | (269) |
Treasury stock —1,769,289 and 1,769,298 shares as of June 27, 2015 and September 27, 2014, respectively | (20,968) | (20,891) |
Total shareholders’ equity | 141,755 | 138,207 |
Total liabilities and shareholders' equity | $ 329,027 | $ 354,578 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Jun. 27, 2015 | Sep. 27, 2014 |
Statement of Financial Position [Abstract] | ||
Allowances for accounts receivable | $ 3,487 | $ 3,159 |
Accumulated Depreciation | $ 79,176 | $ 75,801 |
Shareholders' equity: | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 2,000,000 | 2,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 15,000,000 | 15,000,000 |
Common stock, shares issued | 9,646,972 | 9,646,972 |
Common stock, shares outstanding | 7,877,683 | 7,877,674 |
Treasury stock, shares | 1,769,289 | 1,769,298 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 27, 2015 | Jun. 28, 2014 | Jun. 27, 2015 | Jun. 28, 2014 | |
Income Statement [Abstract] | ||||
Net sales | $ 120,525 | $ 123,534 | $ 328,947 | $ 338,004 |
Cost of goods sold | 95,041 | 100,796 | 266,902 | 273,945 |
Gross profit | 25,484 | 22,738 | 62,045 | 64,059 |
Selling, general and administrative expenses | 19,641 | 21,063 | 59,821 | 62,199 |
Change in fair value of contingent consideration | (630) | 75 | (500) | 200 |
Gain on sale of business | 0 | 0 | (7,704) | 0 |
Other (income) expense, net | (424) | 8 | (579) | (91) |
Operating income | 6,897 | 1,592 | 11,007 | 1,751 |
Interest expense, net | 1,528 | 1,471 | 4,547 | 4,384 |
Income (loss) before provision (benefit) from income taxes | 5,369 | 121 | 6,460 | (2,633) |
Provision (benefit) from income taxes | 951 | (2,045) | 2,607 | (2,438) |
Net income (loss) | $ 4,418 | $ 2,166 | $ 3,853 | $ (195) |
Basic earnings (loss) per share (in dollars per share) | $ 0.56 | $ 0.27 | $ 0.49 | $ (0.02) |
Diluted earnings (loss) per share (in dollars per share) | $ 0.55 | $ 0.27 | $ 0.48 | $ (0.02) |
Weighted average number of shares outstanding | 7,889 | 7,903 | 7,887 | 7,909 |
Dilutive effect of stock options and awards (in shares) | 210 | 202 | 202 | 0 |
Weighted average number of shares assuming dilution (shares) | 8,099 | 8,105 | 8,089 | 7,909 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 27, 2015 | Jun. 28, 2014 | Jun. 27, 2015 | Jun. 28, 2014 | |
Comprehensive income (loss): | ||||
Net income (loss) | $ 4,418 | $ 2,166 | $ 3,853 | $ (195) |
Net unrealized gain (loss) on cash flow hedges | 67 | (76) | (61) | 87 |
Comprehensive income (loss) | $ 4,485 | $ 2,090 | $ 3,792 | $ (108) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Jun. 27, 2015 | Jun. 28, 2014 | |
Operating activities: | ||
Net income (loss) | $ 3,853 | $ (195) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 7,199 | 7,043 |
Amortization of deferred financing fees | 375 | 263 |
Excess tax benefits from exercise of stock options | (2) | (27) |
Provision for (benefit from) deferred income taxes | 1,249 | (3,600) |
Gain on sale of The Game assets before transaction costs | (8,114) | 0 |
Non-cash stock compensation | 965 | 365 |
Change in fair value of contingent consideration | (500) | 200 |
Loss on disposal or impairment of property and equipment | 20 | 25 |
Release of cash held in escrow | 0 | 3,000 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 2,306 | (1,422) |
Inventories | 6,703 | (569) |
Prepaid expenses and other assets | (511) | (1,465) |
Other non-current assets | (233) | (11) |
Accounts payable | (7,616) | 2,210 |
Accrued expenses | 126 | (4,702) |
Income tax receivable | 1,544 | 1,090 |
Other liabilities | (405) | 827 |
Net cash provided by operating activities | 6,959 | 3,032 |
Investing activities: | ||
Purchases of property and equipment, net | (4,230) | (7,696) |
Proceeds from sale of The Game assets | 14,913 | 0 |
Proceeds from sale of fixed assets | 470 | 71 |
Net cash provided by (used in) investing activities | 11,153 | (7,625) |
Financing activities: | ||
Proceeds from long-term debt | 371,184 | 375,738 |
Repayment of long-term debt | (388,982) | (371,252) |
Repayment of capital financing | (114) | 0 |
Payment of deferred financing fees | (25) | 0 |
Repurchase of common stock | (440) | (1,180) |
Proceeds from exercise of stock options | 21 | 931 |
Payment of withholding taxes on exercise of stock options | (10) | 0 |
Excess tax benefits from exercise of stock options | 2 | 27 |
Net cash (used in) provided by financing activities | (18,364) | 4,264 |
Net decrease in cash and cash equivalents | (252) | (329) |
Cash and cash equivalents at beginning of period | 612 | 829 |
Cash and cash equivalents at end of period | 360 | 500 |
Supplemental cash flow information: | ||
Cash paid during the period for interest | 3,639 | 3,435 |
Cash (received) paid during the period for income taxes, net of refunds received | (218) | 225 |
Non-cash financing activity - Shortfall to excess tax benefit pool | 673 | 0 |
Non-cash financing activity - Taxes accrued but not paid on exercise of stock options | $ 105 | $ 0 |
Basis of Presentation and Descr
Basis of Presentation and Description of Business | 9 Months Ended |
Jun. 27, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation and Description of Business | Basis of Presentation and Description of Business We prepared the accompanying interim condensed consolidated financial statements in accordance with the instructions for Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. generally accepted accounting principles ("U.S. GAAP") for complete financial statements. We believe these Condensed Consolidated Financial Statements consist of normal recurring adjustments considered necessary for a fair presentation. Operating results for the nine months ended June 27, 2015 , are not necessarily indicative of the results that may be expected for our fiscal year ending October 3, 2015. Although our various product lines are sold on a year-round basis, the demand for specific products or styles reflects some seasonality, with sales in our June quarter generally being the highest and sales in our December quarter generally being the lowest. For more information regarding our results of operations and financial position, refer to the Consolidated Financial Statements and footnotes included in our Form 10-K for our fiscal year ended September 27, 2014, filed with the United States Securities and Exchange Commission (“SEC”). “Delta Apparel”, the “Company”, and “we”, “us” and “our” are used interchangeably to refer to Delta Apparel, Inc. together with our domestic wholly-owned subsidiaries, including M.J. Soffe, LLC (“Soffe”), Junkfood Clothing Company (“Junkfood”), Salt Life, LLC (f/k/a To The Game, LLC) ("Salt Life"), Art Gun, LLC (“Art Gun”), and other international subsidiaries, as appropriate to the context. Delta Apparel, Inc. is an international apparel design, marketing, manufacturing and sourcing company that features a diverse portfolio of lifestyle basics and branded activewear apparel and headwear. We specialize in selling casual and athletic products through a variety of distribution channels and distribution tiers, including specialty stores, boutiques, department stores, mid and mass channels, e-retailers, and the U.S. military. Our products are also made available direct-to-consumer on our websites at www.soffe.com, www.junkfoodclothing.com, www.saltlife.com and www.deltaapparel.com. We believe this diversified distribution allows us to capitalize on our strengths to provide casual activewear to consumers purchasing from most types of retailers. We design and internally manufacture the majority of our products, which allows us to offer a high degree of consistency and quality controls as well as leverage scale efficiencies. One of our strengths is the speed with which we can reach the market from design to delivery. We have manufacturing operations located in the United States, El Salvador, Honduras and Mexico, and use domestic and foreign contractors as additional sources of production. Our distribution facilities are strategically located throughout the United States to better serve our customers with same-day shipping on our catalog products and weekly replenishments to retailers. We were incorporated in Georgia in 1999 and our headquarters is located at 322 South Main Street, Greenville, South Carolina 29601 (telephone number: 864-232-5200). Our common stock trades on the NYSE MKT under the symbol “DLA”. We operate on a 52-53 week fiscal year ending on the Saturday closest to September 30. Our 2015 fiscal year is a 53-week year and will end on October 3, 2015. Our 2014 fiscal year was a 52-week year and ended on September 27, 2014. |
Accounting Policies
Accounting Policies | 9 Months Ended |
Jun. 27, 2015 | |
Accounting Policies [Abstract] | |
Accounting Policies | Accounting Policies Our accounting policies are consistent with those described in our Significant Accounting Policies in our Form 10-K for the fiscal year ended September 27, 2014 , filed with the SEC. |
New Accounting Standards
New Accounting Standards | 9 Months Ended |
Jun. 27, 2015 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
New Accounting Standards | New Accounting Standards Recently Adopted Standards In July 2013, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2013-11, Income Taxes (Topic 740), Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists , ("ASU 2013-11"). This new guidance requires entities to present unrecognized tax benefits as a decrease in a net operating loss, similar tax loss or tax credit carryforward if said losses are expected to be utilized in offsetting liabilities accrued as the result of uncertain tax position(s) under certain other criteria. The determination of whether a deferred tax asset is available is based on the unrecognized tax benefit and the deferred tax asset that exists as of the reporting date and presumes disallowance of the tax position at the reporting date. This amendment is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2013. ASU 2013-11 is therefore effective for our fiscal year beginning September 28, 2014. However, as we have no liabilities related to uncertain tax positions, there is no effect on our current financial statements. Standards Not Yet Adopted In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers , ("ASU 2014-09"). This new guidance requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. ASU 2014-09 will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. ASU 2014-09 is effective for annual periods beginning after December 15, 2017, for public business entities and permits the use of either the retrospective or cumulative effect transition method. Early application is not permitted. ASU 2014-09 is therefore effective for our fiscal year beginning September 30, 2018. We are evaluating the effect that ASU 2014-09 will have on our Consolidated Financial Statements and related disclosures. In July 2015, the FASB issued ASU No. 2015-11, Simplifying the Measurement of Inventory , ("ASU 2015-11"). This new guidance requires an entity to measure inventory at the lower of cost and net realizable value. Currently, entities measure inventory at the lower of cost and market. ASU 2015-11 replaces market with net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. Subsequent measurement is unchanged for inventory measured under last-in, first-out or the retail inventory method. ASU 2015-11 requires prospective adoption for inventory measurements for fiscal years beginning after December 15, 2016, and interim periods within those years for public business entities. Early application is permitted. ASU 2015-11 is therefore effective in our fiscal year beginning October 1, 2017. We are evaluating the effect that ASU 2015-11 will have on our Consolidated Financial Statements and related disclosures. |
Sale of The Game
Sale of The Game | 9 Months Ended |
Jun. 27, 2015 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Sale of The Game | Sale of The Game On March 2, 2015, we completed the sale of our The Game branded collegiate headwear and apparel business to David Peyser Sportswear, Inc., owner of MV Sport, Inc. for $14.9 million . The business sold consisted of The Game branded products sold nationally in college bookstores and through team dealers. This transaction further strengthens our balance sheet and enables us to focus on areas of our business that are more strategic to our long-term goals. Our Salt Life business and corporate business, Kudzu, previously operated within To The Game, LLC (now Salt Life, LLC) were not included in the sale of the collegiate part of the business. The sale included finished goods inventory of $6.0 million , $0.4 million in fixed assets, and $0.1 million in other assets, along with the requirement that we indemnify up to $0.3 million of legal costs associated with a particular litigation matter. The transaction did not include accounts receivable and certain undecorated apparel inventory, from which we anticipate receiving approximately $6.0 million from the collection or sale of these assets in the normal course of our operations. We incurred $0.4 million in direct selling expenses associated with the transaction. In addition, we incurred certain indirect costs associated with the transaction, including a $0.8 million devaluation of the inventory not included in the sale and $1.4 million in indirect incentive-based expenses. The pre-tax gain on the sale of The Game assets, inclusive of the direct and indirect expenses, was $5.6 million . The transaction and associated indirect expenses were recorded in our Condensed Consolidated Statements of Operations for the nine months ended June 27, 2015 as follows: (i) proceeds of $14.9 million less costs of assets sold and direct selling costs resulting in a gain of $7.7 million recorded as a gain on sale of business; (ii) $1.4 million in indirect expenses recorded in our selling, general and administrative expense; and (iii) $0.8 million of indirect expenses recorded in our cost of goods sold. For income tax purposes, this gain and associated indirect expenses were treated as a discrete item and resulted in $2.2 million in income tax expense being recorded in our 2015 second quarter. |
Salt Life Acquisition
Salt Life Acquisition | 9 Months Ended |
Jun. 27, 2015 | |
Business Combinations [Abstract] | |
Salt Life Acquisition | Salt Life Acquisition On August 27, 2013, Salt Life, LLC (f/k/a To The Game, LLC) purchased substantially all of the assets of Salt Life Holdings, LLC ("Salt Life Holdings"), including all of its domestic and international trademark rights in the Salt Life brand (the "Salt Life Acquisition"). The purchase price for the Salt Life Acquisition consisted of: (i) a cash payment at closing of $12,000,000, (ii) a deposit at closing of $3,000,000 into an escrow account to be held to secure indemnification obligations of the seller under the asset purchase agreement and to be held for a period of up to fifty-four months following the closing, and (iii) delivery of two promissory notes in the aggregate principal amount of $22,000,000. An additional amount may be payable in cash after the end of calendar year 2019 if financial performance targets involving the sale of Salt Life-branded products are met during the 2019 calendar year. At acquisition, we recorded an accrual of $3.4 million for the fair value of the contingent consideration associated with the Salt Life Acquisition. We financed the cash portion of the purchase price through our Fourth Amended and Restated Loan and Security Agreement, as amended on August 27, 2013, September 4, 2013, September 26, 2014, and February 27, 2015. We expensed all acquisition-related costs, which totaled $0.3 million , in the selling, general and administrative expense line item of our Condensed Consolidated Statements of Operations in the quarter ended September 28, 2013. On December 6, 2013, we entered into an agreement (the "IMG Agreement") with IMG Worldwide, Inc. ("IMG") that provides for the termination of the Salt Life brand license agreements entered into between Delta Apparel and IMG (as agent on behalf of Salt Life Holdings) prior to the Salt Life Acquisition as well as the agency agreement entered into between Salt Life Holdings and IMG prior to the Salt Life Acquisition. In addition, the IMG Agreement provides that Delta Apparel and Salt Life Holdings are released from all obligations and liabilities under those agreements or relating to the Salt Life Acquisition. Pursuant to the IMG Agreement, Salt Life and IMG entered into a new, multi-year agency agreement, which has since been terminated, whereby IMG represented Salt Life with respect to the licensing of the Salt Life brand in connection with certain product and service categories. Salt Life agreed to pay IMG installments totaling $3,500,000 to terminate these contractual arrangements. As a result, the above-referenced $3,000,000 indemnification asset was released from escrow during the quarter ended December 28, 2013, and applied towards these payment obligations, along with additional amounts previously accrued for royalty obligations under the above-referenced Salt Life brand license agreements. During the twelve months ended September 27, 2014, and the nine months ended June 27, 2015, we made payments of $2.1 million and $0.6 million , respectively in accordance with the terms of the agreement. As of June 27, 2015, there were 4 quarterly installments of $195 thousand remaining. We have recorded the fair value of the liability as of June 27, 2015, on our financial statements, with $0.8 million in accrued expenses. The Salt Life Acquisition continues our strategy of building lifestyle brands that take advantage of our creative capabilities, vertical manufacturing platform and international sourcing competencies. Prior to the Salt Life Acquisition, Salt Life, LLC (f/k/a To The Game, LLC) sold Salt Life-branded products under exclusive license agreements which began in January 2011. As such, the results of Salt Life sales have been included in our Condensed Consolidated Financial Statements since that time. We accounted for the Salt Life Acquisition pursuant to ASC 805, Business Combinations, with the purchase price allocated based upon fair value. We have identified certain intangible assets associated with Salt Life, including tradenames and trademarks, license agreements, non-compete agreements and goodwill. The total amount of goodwill is expected to be deductible for tax purposes. Components of the intangible assets recorded at acquisition are as follows (in thousands, except economic life data): Economic Life Goodwill $ 19,917 N/A Intangibles: Tradename/trademarks 16,000 30 yrs License agreements 2,100 15 – 30 yrs Non-compete agreements 770 6.6 yrs Total intangibles 18,870 Total goodwill and intangibles $ 38,787 |
Inventories
Inventories | 9 Months Ended |
Jun. 27, 2015 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories Inventories, net of reserves of $8.1 million and $7.1 million as of June 27, 2015 , and September 27, 2014 , respectively, consist of the following (in thousands): June 27, September 27, Raw materials $ 12,886 $ 9,609 Work in process 19,387 15,859 Finished goods 117,126 136,720 $ 149,399 $ 162,188 |
Debt
Debt | 9 Months Ended |
Jun. 27, 2015 | |
Debt Disclosure [Abstract] | |
Debt | Debt Delta Apparel, Soffe, Junkfood, Salt Life (f/k/a To The Game, LLC) and Art Gun are borrowers under the May 27, 2011, Fourth Amended and Restated Loan and Security Agreement (as subsequently amended, the "Amended Loan Agreement"), with the financial institutions named in the Amended Loan Agreement as Lenders, Wells Fargo Bank, National Association, as Administrative Agent, Bank of America, N.A., as Syndication Agent, Wells Fargo Capital Finance, LLC, as Sole Lead Arranger, and Wells Fargo Capital Finance, LLC and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as Joint Bookrunners. On September 26, 2014, Delta Apparel, Salt Life, Junkfood, Soffe and Art Gun entered into a Third Amendment to the Amended Loan Agreement with Wells Fargo Bank, National Association and the other lenders set forth therein (the "Third Amendment"). The Third Amendment amends certain definitions within the Amended Loan Agreement and eases borrowing base availability thresholds relating to a financial testing covenant during the period from September 28, 2014, through October 31, 2015. In addition, the definition of Fixed Charge Coverage Ratio was amended to adjust for expenses that may be incurred in connection with strategic initiatives and to exclude the $9 million payment that was due on September 30, 2014, in connection with the Salt Life Acquisition. On February 27, 2015, Delta Apparel, Salt Life, Junkfood, Soffe and Art Gun entered into a Consent and Fourth Amendment to the Amended Loan Agreement with Wells Fargo Bank, National Association and the other lenders set forth therein (the "Fourth Amendment"). Pursuant to the Fourth Amendment, the lenders consented to the sale by To The Game, LLC (now Salt Life, LLC) of certain of its assets related to its apparel and headwear business conducted under The Game brand and released those assets from the lenders' liens. The Fourth Amendment also adds certain definitions to the Amended Loan Agreement, including new definitions for an Adjusted Fixed Charge Coverage Ratio and a FCCR Reserve. In addition, the Fourth Amendment removed certain items from the Tranche A Borrowing Base. Pursuant to the Amended Loan Agreement, the maximum line of credit under our U.S. revolving credit facility is $145 million (subject to borrowing base limitations), and matures on May 27, 2017. Provided that no event of default exists, we have the option to increase the maximum credit available under the facility to $200 million (subject to borrowing base limitations), conditioned upon the Administrative Agent's ability to secure additional commitments and customary closing conditions. In fiscal year 2014, we paid $0.4 million in financing costs in conjunction with the Third Amendment. No financing costs were paid in conjunction with the Fourth Amendment. As of June 27, 2015, there was $87.7 million outstanding under our U.S. revolving credit facility at an average interest rate of 2.5%, and additional borrowing availability of $29.5 million. This credit facility includes a financial covenant requiring that if the amount of availability falls below the threshold amounts set forth in the Amended Loan Agreement, our Fixed Charge Coverage Ratio (“FCCR”) (as defined in the Amended Loan Agreement) for the preceding 12 -month period must not be less than 1.1 to 1.0 . We were not subject to the FCCR covenant at June 27, 2015 , because our availability was above the minimum required under the Amended Loan Agreement. At June 27, 2015, our FCCR was above the required 1.1 to 1.0 ratio and therefore we would have passed our financial covenant had we been subject to it. At June 27, 2015, and September 27, 2014, there was $6.9 million and $8.2 million, respectively, of retained earnings free of restrictions to make cash dividends or stock repurchases. The Amended Loan Agreement contains a subjective acceleration clause and a “springing” lockbox arrangement (as defined in FASB Codification No. 470, Debt ("ASC 470")), whereby remittances from customers will be forwarded to our general bank account and will not reduce the outstanding debt until and unless a specified event or an event of default occurs. Pursuant to ASC 470, we classify borrowings under the Amended Loan Agreement as long-term debt. In conjunction with the Salt Life Acquisition, we issued two promissory notes in the aggregate principal of $22.0 million , which included a one-time installment of $9.0 million that was due and paid as required on September 30, 2014, and quarterly installments commencing on March 31, 2015, with the final installment due on June 30, 2019. The promissory notes are zero-interest notes and state that interest will be imputed as required under Section 1274 of the Internal Revenue Code. We have imputed interest at 1.92% and 3.62% on the promissory notes that mature on June 30, 2016, and June 30, 2019, respectively. At June 27, 2015 , the discounted value of the promissory notes was $11.5 million . We also maintain a credit facility with Banco Ficohsa, a Honduran bank. This credit facility is secured by a first-priority lien on the assets of our Honduran operations and the loan is not guaranteed by our U.S. entities. The installment portion of the credit facility carries a fixed interest rate of 7% for a term of seven years and is denominated in U.S. dollars. As of June 27, 2015 , there was $2.7 million outstanding on the installment portion of this loan. The revolving credit portion of the loan has an average interest rate of 8.0% with an ongoing 18 -month term (expiring March 2019) and is denominated in U.S. dollars. The revolving credit portion of the loan requires minimum payments during each 6 -month period of the 18 -month term; however, the loan agreement permits additional drawdowns to the extent payments are made and certain objective covenants are met. The current revolving Honduran debt, by its nature, is not long-term, as it requires scheduled payments each six months. However, as the loan agreement permits us to re-borrow funds up to the amount repaid, subject to certain objective covenants, and we intend to re-borrow funds, subject to the objective covenants, the amounts have been classified as long-term debt. As of June 27, 2015 , there was $5.0 million outstanding under the revolving portion of the credit facility. In October 2013, we entered into two new term loan agreements with Banco Ficohsa to finance our Honduran manufacturing expansion project. These loans are also not guaranteed by our U.S. entities and are secured by a first-priority lien on the assets of our Honduran operations. The first loan, an eighteen -month agreement for $1.8 million , with a 7% fixed interest rate, is denominated in U.S. dollars, and has ratable monthly principal and interest payments due through the end of the term. As of June 27, 2015, this loan had been extinguished. The second loan, a seven -year agreement for $4.2 million with a 7% fixed interest rate, is denominated in U.S. dollars and has ratable monthly principal and interest payments due through the end of the term. As of June 27, 2015 , there was $3.4 million outstanding under this loan agreement. The carrying value of these term loans approximates the fair value. In April 2015, we entered into a new term loan agreement with Banco Ficohsa to finance further capital expansion at our Honduran facilities. This loan is not guaranteed by our U.S. entities and is secured by a first-priority lien on the assets of our Honduran operations. The loan is a seven -year agreement for $2.0 million with an 8% fixed interest rate, is denominated in U.S. dollars, and has ratable monthly principal and interest payments due through the end of the term. The first payment was due in June, 2015. As of June 27, 2015, there was $2.0 million outstanding under this loan agreement. The carrying value of this loan approximates the fair value. |
Selling, General and Administra
Selling, General and Administrative Expense | 9 Months Ended |
Jun. 27, 2015 | |
Selling, General and Administrative Expense [Abstract] | |
Selling, General and Administrative Expense | Selling, General and Administrative Expense We include in selling, general and administrative ("SG&A") expenses costs incurred subsequent to the receipt of finished goods at our distribution facilities, such as the cost of stocking, warehousing, picking, packing, and shipping goods for delivery to our customers. Distribution costs included in SG&A expenses totaled $4.3 million and $4.2 million for the three months ended June 27, 2015, and June 28, 2014, respectively. Distribution costs included in SG&A expenses for the nine months ended June 27, 2015, and June 28, 2014, were $12.1 million and $12.6 million , respectively. In addition, SG&A expenses include costs related to sales associates, administrative personnel, advertising and marketing expenses, royalty payments on licensed products and other general and administrative expenses. In the second quarter of fiscal 2015, we also incurred $ 1.4 million of indirect expenses associated with the sale of The Game which were recorded in SG&A. See Note D—Sale of The Game, for more information on this transaction. During the fourth quarter of fiscal year 2014, certain strategic initiatives were implemented to improve net profitability. This effort included streamlining our administrative workforce, delayering our management structure and streamlining decision-making and information flow, as well as reducing duplicative and excess fixed cost. During the fourth quarter of fiscal year 2014, we recorded a total of $4.0 million in SG&A expense associated with these strategic initiatives. As of September 27, 2014, approximately $1.8 million of these expenses were accrued and reported on our Condensed Consolidated Balance Sheets . During the first nine months of fiscal year 2015, no additional expense was incurred in association with our strategic initiatives and $1.1 million was disbursed during the first nine months of fiscal year 2015, leaving approximately $0.7 million remaining accrued on our June 27, 2015, Condensed Consolidated Balance Sheets . |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Jun. 27, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation On February 4, 2015, our shareholders re-approved the Delta Apparel, Inc. 2010 Stock Plan ("2010 Stock Plan") that was originally approved by our shareholders on November 11, 2010. The re-approval of the 2010 Stock Plan, including the material terms of the performance goals included in the 2010 Stock Plan, enables us to continue to grant equity incentive compensation awards that are structured in a manner intended to qualify as tax deductible, performance-based compensation under Section 162(m) of the Internal Revenue Code of 1986. Since November 2010, no additional awards have been or will be granted under either the Delta Apparel Stock Option Plan ("Option Plan") or the Delta Apparel Incentive Stock Award Plan ("Award Plan"); instead, all stock awards have been and will continue to be granted under the 2010 Stock Plan. Under the 2010 Stock Plan, the Compensation Committee of our Board of Directors has the authority to determine the employees and directors to whom awards may be granted and the size and type of each award and manner in which such awards will vest. The awards available consist of stock options, stock appreciation rights, restricted stock, restricted stock units, performance stock, performance units, and other stock and cash awards. The aggregate number of shares of common stock that may be delivered under the 2010 Stock Plan is 500,000 plus any shares of common stock subject to outstanding awards under the Option Plan or Award Plan that are subsequently forfeited or terminated for any reason before being exercised. The 2010 Stock Plan limits the number of shares that may be covered by awards to any participant in a given calendar year and also limits the aggregate awards of restricted stock, restricted stock units and performance stock granted in any given calendar year. If a participant dies or becomes disabled (as defined in the 2010 Stock Plan) while employed by or serving as a director, all unvested awards become fully vested. The Compensation Committee is authorized to establish the terms and conditions of awards granted under the 2010 Stock Plan, to establish, amend and rescind any rules and regulations relating to the 2010 Stock Plan, and to make any other determinations that it deems necessary. Compensation expense is recorded on the SG&A expense line item in our Condensed Consolidated Statements of Operations over the vesting periods. During the three months ended June 27, 2015 , we recognized $0.5 million in stock-based compensation expenses. During the three months ended June 28, 2014, we recognized a reduction in stock-based compensation expense of $0.2 million resulting from an adjustment of the number of shares expected to be awarded under certain performance based awards. During the nine months ended June 27, 2015, and June 28, 2014, we recognized $0.9 million and $0.2 million , respectively, in stock-based compensation expenses. 2010 Stock Plan As of June 27, 2015 , there was $3.9 million of total unrecognized compensation cost related to non-vested awards granted under the 2010 Stock Plan. This cost is expected to be recognized over a period of 3.5 years . No awards were granted under the 2010 Stock Plan during the quarter ended June 27, 2015. During the first nine months of fiscal year 2015, performance units and restricted stock units representing 169,000 and 355,000 shares, respectively, of our common stock were granted. Option Plan All options granted under the Option Plan have vested. As such, no expense was recognized during the nine months ended June 27, 2015, or for the nine months ended June 28, 2014. During the three months ended June 27, 2015, vested options representing 336,000 shares of our common stock were exercised, and the shares issued, in accordance with their respective agreements. During the nine months ended June 27, 2015 , vested options representing 350,000 shares of our common stock were exercised, and the shares issued, in accordance with their respective agreements. Award Plan All awards granted under the Award Plan have vested and been exercised, and no awards remain outstanding. |
Purchase Contracts
Purchase Contracts | 9 Months Ended |
Jun. 27, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Purchase Contracts | Purchase Contracts We have entered into agreements, and have fixed prices, to purchase yarn, natural gas, finished fabric, and finished apparel products. At June 27, 2015 , minimum payments under these contracts were as follows (in thousands): Yarn $ 22,651 Natural gas 81 Finished fabric 2,206 Finished products 20,900 $ 45,838 |
Business Segments
Business Segments | 9 Months Ended |
Jun. 27, 2015 | |
Segment Reporting [Abstract] | |
Business Segments | Business Segments We operate our business in two distinct segments: branded and basics. Although the two segments are similar in their production processes and regulatory environments, they are distinct in their economic characteristics, products, marketing, and distribution methods. In fiscal year 2014, we reclassified our Art Gun business from the branded segment to the basics segment to better reflect that business's current operating characteristics. The branded segment is comprised of our business units focused on specialized apparel to meet consumer preferences and fashion trends, and includes Soffe, Junkfood, and Salt Life. These branded embellished and unembellished products are sold primarily through specialty and boutique shops, upscale and traditional department stores, mid-tier retailers, sporting goods stores, and the U.S. military. Products in this segment are marketed under our lifestyle brands of Salt Life®, Soffe®, Intensity Athletics®, and Junk Food® as well as other labels. Until the sale of The Game collegiate and team dealer business on March 2, 2015, The Game® and American Threads labels were reported in this segment. The basics segment is comprised of our business units primarily focused on garment styles characterized by low fashion risk, and includes our Activewear and Art Gun businesses. We market, distribute and manufacture knit apparel under the main brands of Delta Pro Weight® and Delta Magnum Weight® for sale to a diversified audience ranging from large licensing businesses to regional screen printers and small independent businesses. These products are primarily sold unembellished, but may be sold decorated through our screen print operations or through Art Gun, our digital print and fulfillment business servicing the ecommerce marketplace. We also manufacture private label products for major branded sportswear companies, retailers, corporate industry programs, e-retailers, and sports-licensed apparel marketers. Typically, these products are sold with value-added services such as hangtags, ticketing, hangers, and embellishment so that they are fully ready for retail. Robert W. Humphreys, our chief operating decision maker, along with management, evaluate performance and allocate resources based on profit or loss from operations before interest, income taxes and special charges (“segment operating earnings (loss)”). Our segment operating earnings (loss) may not be comparable to similarly titled measures used by other companies. Intercompany transfers between operating segments are transacted at cost and have been eliminated within the segment amounts shown in the following table. Information about our operations as of and for the three and nine months ended June 27, 2015 , and June 28, 2014 , by operating segment, is as follows (in thousands): Basics Branded Consolidated Three months ended June 27, 2015 Net sales $ 79,034 $ 41,491 $ 120,525 Segment operating income 5,532 1,365 6,897 Segment assets 169,017 160,010 329,027 Three months ended June 28, 2014 Net sales $ 75,818 $ 47,716 $ 123,534 Segment operating income (loss) 1,861 (269 ) 1,592 Segment assets 180,248 178,382 358,630 Basics Branded Consolidated Nine months ended June 27, 2015 Net sales $ 208,102 $ 120,845 $ 328,947 Segment operating income 5,130 5,877 11,007 Nine months ended June 28, 2014 Net sales $ 204,465 $ 133,539 $ 338,004 Segment operating income (loss) 5,358 (3,607 ) 1,751 The following reconciles the segment operating earnings to the Company's consolidated income (loss) before provision (benefit) from income taxes (in thousands): Three Months Ended Nine Months Ended June 27, June 28, June 27, June 28, Segment operating income $ 6,897 $ 1,592 $ 11,007 $ 1,751 Unallocated interest expense 1,528 1,471 4,547 4,384 Consolidated income (loss) before provision (benefit) from income taxes $ 5,369 $ 121 $ 6,460 $ (2,633 ) |
Income Taxes
Income Taxes | 9 Months Ended |
Jun. 27, 2015 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Our effective income tax provision for the nine months ended June 27, 2015, was 40.4% , compared to an effective tax benefit of 92.6% for the same period in the prior year and an effective tax benefit of 87.1% for the fiscal year ended September 27, 2014. During the second quarter of fiscal year 2015, we recognized a $5.6 million pre-tax gain, including associated indirect expenses, on the sale of The Game assets. We accounted for this event as a discrete item for tax provision purposes, recording tax expense on the pre-tax gain, including associated indirect expenses, at the full applicable statutory rate. See Note D—Sale of The Game, for further information on this transaction. In addition, during the third quarter of fiscal year 2015, employee stock options were exercised and depleted our excess tax benefit pool, which resulted in $0.3 million in income tax expense recorded in the quarter. Excluding the effect of these discrete items, the effective tax provision on normal operations for the nine months ended June 27, 2015, was 4.2% . Based on our current projected pre-tax income and the anticipated amount of U.S. taxable income compared to profits in the offshore taxable and tax-free jurisdictions in which we operate, our estimated annual income tax rate for the fiscal year ending October 3, 2015, is expected to be approximately 20% , including the effect of the aforementioned discrete items. However, changes in the mix of U.S. taxable income compared to profits in tax-free jurisdictions can have a significant impact on our overall effective tax rate. We file income tax returns in the U.S. federal jurisdiction and various state, local and foreign jurisdictions. Tax years 2011 through 2013, according to statute and with few exceptions, remain open to examination by various state, local and foreign jurisdictions. Tax years 2012 through 2013 remain open to examination by the Internal Revenue Service. |
Derivatives and Fair Value Meas
Derivatives and Fair Value Measurements | 9 Months Ended |
Jun. 27, 2015 | |
Fair Value Disclosures [Abstract] | |
Derivatives and Fair Value Measurements | Derivatives and Fair Value Measurements From time to time, we may use interest rate swaps or other instruments to manage our interest rate exposure and reduce the impact of future interest rate changes. These financial instruments are not used for trading or speculative purposes. Outstanding instruments as of June 27, 2015, are noted below: Effective Date Notational Amount Fixed LIBOR Rate Maturity Date Interest Rate Swap September 9, 2013 $15 million 1.1700 % September 9, 2016 Interest Rate Swap September 9, 2013 $15 million 1.6480 % September 11, 2017 Interest Rate Swap September 19, 2013 $15 million 1.0030 % September 19, 2016 Interest Rate Swap September 19, 2013 $15 million 1.4490 % September 19, 2017 From time to time, we may purchase cotton option contracts to economically hedge the risk related to market fluctuations in the cost of cotton used in our operations. We do not receive hedge accounting treatment for these derivatives. As such, the associated realized and unrealized gains and losses would be recorded within cost of goods sold on the Condensed Consolidated Statements of Operations and the fair value of the cotton option contracts would be recorded in the prepaid and other current assets line item on our Condensed Consolidated Balance Sheets . We did not own any cotton option contracts as of June 27, 2015 , or as of September 27, 2014. FASB Codification No. 820, Fair Value Measurements and Disclosures (“ASC 820”), defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. Assets and liabilities measured at fair value are grouped in three levels. The levels prioritize the inputs used to measure the fair value of the assets or liabilities. These levels are: ◦ Level 1 – Quoted prices (unadjusted) in active markets for identical assets or liabilities. ◦ Level 2 – Inputs other than quoted prices that are observable for assets and liabilities, either directly or indirectly. These inputs include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are less active. ◦ Level 3 – Unobservable inputs that are supported by little or no market activity for assets or liabilities and includes certain pricing models, discounted cash flow methodologies and similar techniques. The following financial assets (liabilities) are measured at fair value on a recurring basis (in thousands): Fair Value Measurements Using Period Ended Total Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Interest Rate Swaps June 27, 2015 $ (538 ) — $ (538 ) — September 27, 2014 $ (437 ) — $ (437 ) — Contingent Consideration June 27, 2015 $ (3,100 ) — — $ (3,100 ) September 27, 2014 $ (3,600 ) — — $ (3,600 ) The fair value of the interest rate swap agreements were derived from discounted cash flow analysis based on the terms of the contract and the forward interest rate curves adjusted for our credit risk, which fall in Level 2 of the fair value hierarchy. The Salt Life Acquisition includes contingent consideration payable in cash after the end of calendar year 2019 if financial performance targets involving the sale of Salt Life-branded products are met during the 2019 calendar year. We used the historical results and projected cash flows based on the contractually defined terms, discounted as necessary, to estimate the fair value of the contingent consideration for Salt Life at acquisition, as well as to remeasure the contingent consideration related to the acquisitions of Salt Life and Art Gun at each reporting period. Accordingly, the fair value measurement for contingent consideration falls in Level 3 of the fair value hierarchy. At June 27, 2015 , we had $3.1 million accrued in contingent consideration related to the Salt Life Acquisition. This is a $0.6 million reduction from the accrual at the end of the second quarter of fiscal year 2015, and a $0.5 million reduction from the accrual at September 27, 2014. The reduction in the fair value of contingent consideration resulted from our current sales levels being lower than we originally anticipated and the reduced remaining time to the measurement period. We still expect sales in calendar year 2019 to approximate the expectations for calendar 2019 sales used in the valuation of contingent consideration at acquisition. Contingent consideration related to the acquisition of Art Gun remains de minimis. The following table summarizes the fair value and presentation in the Condensed Consolidated Balance Sheets for derivatives related to our interest swap agreements as of June 27, 2015 , and September 27, 2014 : June 27, September 27, Deferred tax assets 207 — Deferred tax liabilities — 168 Other liabilities (538 ) (437 ) Accumulated other comprehensive loss $ (331 ) $ (269 ) Assets Measured at Fair Value on a Non-Recurring Basis Intangible assets acquired in connection with the Salt Life Acquisition are identified by type in Note E—Salt Life Acquisition. These valuations included significant unobservable inputs (Level 3). |
Legal Proceedings
Legal Proceedings | 9 Months Ended |
Jun. 27, 2015 | |
Legal Proceedings [Abstract] | |
Legal Proceedings | Legal Proceedings Consumer Product Safety Commission We previously received an inquiry from the U.S. Consumer Product Safety Commission (“Commission”) regarding a children's drawstring hoodie product sourced, distributed and sold by Junkfood, and its compliance with applicable product safety standards. The Commission subsequently investigated the matter, including whether Junkfood complied with the reporting requirements of the Consumer Product Safety Act (“CPSA”), and the garments in question were ultimately recalled. On or about July 25, 2012, Junkfood received notification from the Commission staff alleging that Junkfood knowingly violated CPSA Section 15(b) and that the staff will recommend to the Commission a $900,000 civil penalty. We dispute the Commission's allegations. On August 27, 2012, Junkfood responded to the Commission staff regarding its recommended penalty, setting forth a number of defenses and mitigating factors that could result in a much lower penalty, if any, ultimately imposed by a court should the matter proceed to litigation. While we will continue to defend against these allegations, we believe a risk of loss is probable. Based upon current information, including the terms of previously published Commission settlements and related product recall notices, should the Commission seek enforcement of the recommended civil penalty and ultimately prevail on its claims at trial we believe there is a range of likely outcomes between $25,000 and an amount exceeding $900,000 , along with interest and the Commission's costs and fees. During the quarter ended June 30, 2012, we recorded a liability for what we believe to be the most likely outcome within this range, and this liability remains recorded as of June 27, 2015 . California Wage and Hour Litigation We were served with a complaint in the Superior Court of the State of California, County of Los Angeles, on or about March 13, 2013, by a former employee of our Delta Activewear business unit at our Santa Fe Springs, California distribution facility alleging violations of California wage and hour laws and unfair business practices with respect to meal and rest periods, compensation and wage statements, and related claims (the "Complaint"). The Complaint is brought as a class action and seeks to include all of our Delta Activewear business unit's current and certain former employees within California who are or were non-exempt under applicable wage and hour laws. The Complaint seeks injunctive and declaratory relief, monetary damages and compensation, penalties, attorneys' fees and costs, and pre-judgment interest. The discovery process in this matter is ongoing and the issue of class certification remains pending. On or about August 22, 2014, we were served with an additional complaint in the Superior Court of the State of California, County of Los Angeles, by a former employee of Junkfood and two former employees of Soffe at our Santa Fe Springs, California distribution facility alleging violations of California wage and hour laws and unfair business practices the same or substantially similar to those alleged in the Complaint and seeking the same or substantially similar relief as sought in the Complaint. This complaint is brought as a class action and seeks to include all current and certain former employees of Junkfood, Soffe and a Soffe independent contractor within California who are or were non-exempt under applicable wage and hour laws. The discovery process in this matter is ongoing and the issue of class certification remains pending. While we will continue to vigorously defend these actions and believe we have a number of meritorious defenses to the claims alleged, we believe a risk of loss is probable. Based upon current information, we believe there is a range of likely outcomes between approximately $15,000 and $775,000 . During the transition period ended September 28, 2013, we recorded a liability for the most likely outcome within this range, and this liability remained recorded as of June 27, 2015. However, depending upon the scope and size of any certified class and whether any of the claims alleged ultimately prevail at trial, we could be required to pay amounts exceeding $775,000 . Other In addition, at times we are party to various legal claims, actions and complaints. We believe that, as a result of legal defenses, insurance arrangements, and indemnification provisions with parties believed to be financially capable, such actions should not have a material effect on our operations, financial condition, or liquidity. |
Repurchase of Common Stock
Repurchase of Common Stock | 9 Months Ended |
Jun. 27, 2015 | |
Equity [Abstract] | |
Repurchase of Common Stock | Repurchase of Common Stock As of January 23, 2013, our Board of Directors authorized management to use up to $30.0 million to repurchase stock in open market transactions under our Stock Repurchase Program. During the June quarter of fiscal years 2015 and 2014, we purchased 30,700 shares and 66,556 shares, respectively, of our common stock for a total cost of $0.4 million and $1.0 million, respectively. Through June 27, 2015, we have purchased 2,152,946 shares of our common stock for an aggregate of $25.7 million since the inception of our Stock Repurchase Program. All purchases were made at the discretion of management and pursuant to the safe harbor provisions of SEC Rule 10b-18. As of June 27, 2015, $4.3 million remained available for future purchases under our Stock Repurchase Program, which does not have an expiration date. The following table summarizes the purchases of our common stock for the quarter ended June 27, 2015: Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans Dollar Value of Shares that May Yet Be Purchased Under the Plans March 29, 2015 to May 2, 2015 — $ — — $4.7 million May 3, 2015 to May 30, 2015 — $ — — $4.7 million May 31, 2015 to June 27, 2015 30,700 $ 14.35 30,700 $4.3 million Total 30,700 $ 14.35 30,700 $4.3 million |
License Agreements
License Agreements | 9 Months Ended |
Jun. 27, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
License Agreements | License Agreements We have entered into license agreements that provide for royalty payments on net sales of licensed products as set forth in the agreements. These license agreements are within our branded segment. We have incurred royalty expense (included in SG&A expenses) of approximately $2.2 million and $2.7 million in the June quarter of fiscal years 2015 and 2014, respectively. We incurred royalty expense of $6.6 million and $7.1 million for the nine months ended June 27, 2015, and June 28, 2014, respectively. The decline in royalty expense for the three and nine months ended June 27, 2015 compared to prior year is due to the sale of The Game branded collegiate headwear and apparel business to David Peyser Sportswear, in the March quarter. See Note D—Sale of The Game, for further information on this transaction. At June 27, 2015 , based on minimum sales requirements, future minimum royalty payments required under these license agreements were as follows (in thousands): Fiscal Year Amount 2015 $ 340 2016 2,644 2017 93 2018 — $ 3,077 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 9 Months Ended |
Jun. 27, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Components of intangible assets consist of the following (in thousands): June 27, 2015 September 27, 2014 Cost Accumulated Amortization Net Value Cost Accumulated Amortization Net Value Economic Life Goodwill $ 36,729 $ — $ 36,729 $ 36,729 $ — $ 36,729 N/A Intangibles: Tradename/trademarks $ 17,530 $ (1,741 ) $ 15,789 $ 17,530 $ (1,281 ) $ 16,249 20 – 30 yrs Customer relationships 7,220 (3,567 ) 3,653 7,220 (3,298 ) 3,922 20 yrs Technology 1,220 (674 ) 546 1,220 (582 ) 638 10 yrs License agreements 2,100 (191 ) 1,909 2,100 (113 ) 1,987 15 – 30 yrs Non-compete agreements 1,287 (681 ) 606 1,287 (583 ) 704 4 – 8.5 yrs Total intangibles $ 29,357 $ (6,854 ) $ 22,503 $ 29,357 $ (5,857 ) $ 23,500 Amortization expense for intangible assets was $0.3 million for the three months ended June 27, 2015 , and $0.4 million for the three months ended June 28, 2014 . Amortization expense for intangible assets was $1.0 million for the nine months ended June 27, 2015, and $1.1 million for the nine months ended June 28, 2014. Amortization expense is estimated to be approximately $1.4 million for fiscal year 2015 and $1.3 million for each of fiscal years 2016, 2017, 2018 and 2019. |
Selling, General and Administ24
Selling, General and Administrative Expense (Policies) | 9 Months Ended |
Jun. 27, 2015 | |
Selling, General and Administrative Expense [Abstract] | |
Selling, General and Administrative Expenses | We include in selling, general and administrative ("SG&A") expenses costs incurred subsequent to the receipt of finished goods at our distribution facilities, such as the cost of stocking, warehousing, picking, packing, and shipping goods for delivery to our customers. |
Salt Life Acquisition (Tables)
Salt Life Acquisition (Tables) | 9 Months Ended |
Jun. 27, 2015 | |
Business Combinations [Abstract] | |
Schedule of Finite-Lived Intangible Assets Acquired as Part of Business Combination | We have identified certain intangible assets associated with Salt Life, including tradenames and trademarks, license agreements, non-compete agreements and goodwill. The total amount of goodwill is expected to be deductible for tax purposes. Components of the intangible assets recorded at acquisition are as follows (in thousands, except economic life data): Economic Life Goodwill $ 19,917 N/A Intangibles: Tradename/trademarks 16,000 30 yrs License agreements 2,100 15 – 30 yrs Non-compete agreements 770 6.6 yrs Total intangibles 18,870 Total goodwill and intangibles $ 38,787 |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Jun. 27, 2015 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories, Net of Reserves | Inventories, net of reserves of $8.1 million and $7.1 million as of June 27, 2015 , and September 27, 2014 , respectively, consist of the following (in thousands): June 27, September 27, Raw materials $ 12,886 $ 9,609 Work in process 19,387 15,859 Finished goods 117,126 136,720 $ 149,399 $ 162,188 |
Purchase Contracts (Tables)
Purchase Contracts (Tables) | 9 Months Ended |
Jun. 27, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Purchase contracts minimum payments | At June 27, 2015 , minimum payments under these contracts were as follows (in thousands): Yarn $ 22,651 Natural gas 81 Finished fabric 2,206 Finished products 20,900 $ 45,838 |
Business Segments (Tables)
Business Segments (Tables) | 9 Months Ended |
Jun. 27, 2015 | |
Segment Reporting [Abstract] | |
Segment reporting information by segment | Information about our operations as of and for the three and nine months ended June 27, 2015 , and June 28, 2014 , by operating segment, is as follows (in thousands): Basics Branded Consolidated Three months ended June 27, 2015 Net sales $ 79,034 $ 41,491 $ 120,525 Segment operating income 5,532 1,365 6,897 Segment assets 169,017 160,010 329,027 Three months ended June 28, 2014 Net sales $ 75,818 $ 47,716 $ 123,534 Segment operating income (loss) 1,861 (269 ) 1,592 Segment assets 180,248 178,382 358,630 Basics Branded Consolidated Nine months ended June 27, 2015 Net sales $ 208,102 $ 120,845 $ 328,947 Segment operating income 5,130 5,877 11,007 Nine months ended June 28, 2014 Net sales $ 204,465 $ 133,539 $ 338,004 Segment operating income (loss) 5,358 (3,607 ) 1,751 |
Reconciliation of segment operating income to consolidated income before income taxes | The following reconciles the segment operating earnings to the Company's consolidated income (loss) before provision (benefit) from income taxes (in thousands): Three Months Ended Nine Months Ended June 27, June 28, June 27, June 28, Segment operating income $ 6,897 $ 1,592 $ 11,007 $ 1,751 Unallocated interest expense 1,528 1,471 4,547 4,384 Consolidated income (loss) before provision (benefit) from income taxes $ 5,369 $ 121 $ 6,460 $ (2,633 ) |
Derivatives and Fair Value Me29
Derivatives and Fair Value Measurements (Tables) | 9 Months Ended |
Jun. 27, 2015 | |
Fair Value Disclosures [Abstract] | |
Outstanding financial instruments | These financial instruments are not used for trading or speculative purposes. Outstanding instruments as of June 27, 2015, are noted below: Effective Date Notational Amount Fixed LIBOR Rate Maturity Date Interest Rate Swap September 9, 2013 $15 million 1.1700 % September 9, 2016 Interest Rate Swap September 9, 2013 $15 million 1.6480 % September 11, 2017 Interest Rate Swap September 19, 2013 $15 million 1.0030 % September 19, 2016 Interest Rate Swap September 19, 2013 $15 million 1.4490 % September 19, 2017 |
Financial liabilities measure at fair value on a recurring basis | The following financial assets (liabilities) are measured at fair value on a recurring basis (in thousands): Fair Value Measurements Using Period Ended Total Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Interest Rate Swaps June 27, 2015 $ (538 ) — $ (538 ) — September 27, 2014 $ (437 ) — $ (437 ) — Contingent Consideration June 27, 2015 $ (3,100 ) — — $ (3,100 ) September 27, 2014 $ (3,600 ) — — $ (3,600 ) |
Summary of fair value and presentation in the consolidated balance sheets for derivatives | The following table summarizes the fair value and presentation in the Condensed Consolidated Balance Sheets for derivatives related to our interest swap agreements as of June 27, 2015 , and September 27, 2014 : June 27, September 27, Deferred tax assets 207 — Deferred tax liabilities — 168 Other liabilities (538 ) (437 ) Accumulated other comprehensive loss $ (331 ) $ (269 ) |
Repurchase of Common Stock Repu
Repurchase of Common Stock Repurchase (Tables) | 9 Months Ended |
Jun. 27, 2015 | |
Equity [Abstract] | |
Summary of purchases | The following table summarizes the purchases of our common stock for the quarter ended June 27, 2015: Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans Dollar Value of Shares that May Yet Be Purchased Under the Plans March 29, 2015 to May 2, 2015 — $ — — $4.7 million May 3, 2015 to May 30, 2015 — $ — — $4.7 million May 31, 2015 to June 27, 2015 30,700 $ 14.35 30,700 $4.3 million Total 30,700 $ 14.35 30,700 $4.3 million |
License Agreements (Tables)
License Agreements (Tables) | 9 Months Ended |
Jun. 27, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of future minimum royalty payments | At June 27, 2015 , based on minimum sales requirements, future minimum royalty payments required under these license agreements were as follows (in thousands): Fiscal Year Amount 2015 $ 340 2016 2,644 2017 93 2018 — $ 3,077 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 9 Months Ended |
Jun. 27, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Components of Intangible Assets | Components of intangible assets consist of the following (in thousands): June 27, 2015 September 27, 2014 Cost Accumulated Amortization Net Value Cost Accumulated Amortization Net Value Economic Life Goodwill $ 36,729 $ — $ 36,729 $ 36,729 $ — $ 36,729 N/A Intangibles: Tradename/trademarks $ 17,530 $ (1,741 ) $ 15,789 $ 17,530 $ (1,281 ) $ 16,249 20 – 30 yrs Customer relationships 7,220 (3,567 ) 3,653 7,220 (3,298 ) 3,922 20 yrs Technology 1,220 (674 ) 546 1,220 (582 ) 638 10 yrs License agreements 2,100 (191 ) 1,909 2,100 (113 ) 1,987 15 – 30 yrs Non-compete agreements 1,287 (681 ) 606 1,287 (583 ) 704 4 – 8.5 yrs Total intangibles $ 29,357 $ (6,854 ) $ 22,503 $ 29,357 $ (5,857 ) $ 23,500 |
Sale of The Game (Details)
Sale of The Game (Details) - USD ($) $ in Thousands | Mar. 02, 2015 | Jun. 27, 2015 | Mar. 28, 2015 | Jun. 28, 2014 | Jun. 27, 2015 | Jun. 28, 2014 |
Disposal Group, Including Discontinued Operation, Income Statement Disclosures [Abstract] | ||||||
Gain on sale of asset | $ 7,700 | |||||
Income tax expense (benefit) | $ 951 | $ (2,045) | 2,607 | $ (2,438) | ||
Discontinued Operations, Disposed of by Sale [Member] | The Game [Member] | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Sale of business | $ 14,900 | |||||
Disposal Group, Including Discontinued Operation, Balance Sheet Disclosures [Abstract] | ||||||
Inventory | 6,000 | |||||
Fixed assets | 400 | |||||
Other assets | 100 | |||||
Disposal Group, Including Discontinued Operation, Income Statement Disclosures [Abstract] | ||||||
Legal Fees | 300 | |||||
Estimated realization from sale of asset | 6,000 | |||||
Inventory devaluation | 800 | |||||
Selling costs | 400 | |||||
Incentive related costs | $ 1,400 | $ 1,400 | 1,400 | |||
Other Expenses | 800 | |||||
Gain on sale of asset | $ 5,600 | |||||
Income tax expense (benefit) | 2,200 | |||||
David Peyser Sportswear [Member] | Discontinued Operations, Disposed of by Sale [Member] | The Game [Member] | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Sale of business | $ 14,900 |
Salt Life Acquisition (Details)
Salt Life Acquisition (Details) | Aug. 27, 2013USD ($)debt_instrument | Sep. 28, 2013USD ($) | Jun. 27, 2015USD ($)installment | Sep. 27, 2014USD ($) | Dec. 06, 2013USD ($) |
Business Acquisition [Line Items] | |||||
Contingent consideration | $ 3,100,000 | $ 3,600,000 | |||
Goodwill | $ 36,729,000 | 36,729,000 | |||
Tradename/Trademarks [Member] | Minimum [Member] | |||||
Business Acquisition [Line Items] | |||||
Intangibles, economic life | 20 years | ||||
Tradename/Trademarks [Member] | Maximum [Member] | |||||
Business Acquisition [Line Items] | |||||
Intangibles, economic life | 30 years | ||||
License Agreements [Member] | Minimum [Member] | |||||
Business Acquisition [Line Items] | |||||
Intangibles, economic life | 15 years | ||||
License Agreements [Member] | Maximum [Member] | |||||
Business Acquisition [Line Items] | |||||
Intangibles, economic life | 30 years | ||||
Non-compete Agreements [Member] | Minimum [Member] | |||||
Business Acquisition [Line Items] | |||||
Intangibles, economic life | 4 years | ||||
Non-compete Agreements [Member] | Maximum [Member] | |||||
Business Acquisition [Line Items] | |||||
Intangibles, economic life | 8 years 6 months | ||||
Salt Life Acquisition [Member] | |||||
Business Acquisition [Line Items] | |||||
Cash payment at closing | $ 12,000,000 | ||||
Deposit at closing | $ 3,000,000 | ||||
Duration of cash held in escrow | 54 months | ||||
Contingent consideration | $ 3,400,000 | ||||
Acquisition related costs | $ 300,000 | ||||
Contractual agreements | $ 3,500,000 | ||||
Payments during the period | $ 600,000 | $ 2,100,000 | |||
Quarterly installment | $ 195,000 | ||||
Number of quarterly installments | installment | 4 | ||||
Goodwill | 19,917,000 | ||||
Total intangibles | 18,870,000 | ||||
Total goodwill and intangibles | 38,787,000 | ||||
Salt Life Acquisition [Member] | Tradename/Trademarks [Member] | |||||
Business Acquisition [Line Items] | |||||
Total intangibles | $ 16,000,000 | ||||
Intangibles, economic life | 30 years | ||||
Salt Life Acquisition [Member] | License Agreements [Member] | |||||
Business Acquisition [Line Items] | |||||
Total intangibles | $ 2,100,000 | ||||
Salt Life Acquisition [Member] | License Agreements [Member] | Minimum [Member] | |||||
Business Acquisition [Line Items] | |||||
Intangibles, economic life | 15 years | ||||
Salt Life Acquisition [Member] | License Agreements [Member] | Maximum [Member] | |||||
Business Acquisition [Line Items] | |||||
Intangibles, economic life | 30 years | ||||
Salt Life Acquisition [Member] | Non-compete Agreements [Member] | |||||
Business Acquisition [Line Items] | |||||
Total intangibles | $ 770,000 | ||||
Intangibles, economic life | 6 years 7 months 6 days | ||||
Salt Life Acquisition [Member] | Accrued Liabilities [Member] | |||||
Business Acquisition [Line Items] | |||||
Contingent liability | $ 800,000 | ||||
Salt Life Acquisition [Member] | Promissory Note [Member] | |||||
Business Acquisition [Line Items] | |||||
Number of promissory notes delivered (debt instruments) | debt_instrument | 2 | ||||
Aggregate principal of promissory notes | $ 22,000,000 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Jun. 27, 2015 | Sep. 27, 2014 | Sep. 28, 2013 |
Inventory Disclosure [Abstract] | |||
Inventory valuation reserves | $ 8,100 | $ 7,100 | |
Inventories, net of reserves: | |||
Raw materials | 12,886 | 9,609 | |
Work in process | 19,387 | 15,859 | |
Finished goods | 117,126 | 136,720 | |
Inventories, net | $ 149,399 | $ 162,188 | $ 162,188 |
Debt (Narrative) (Details)
Debt (Narrative) (Details) | Aug. 27, 2013USD ($)debt_instrument | Apr. 30, 2015USD ($) | Oct. 31, 2013USD ($)debt_instrument | Mar. 31, 2011 | Jun. 27, 2015USD ($) | Jun. 28, 2014USD ($) | Sep. 27, 2014USD ($) | Feb. 27, 2015USD ($) | Sep. 30, 2014USD ($) |
Debt Instrument [Line Items] | |||||||||
Retained earnings free of restrictions | $ 6,900,000 | $ 8,200,000 | |||||||
Discounted value of promissory notes | 11,500,000 | ||||||||
Payments of deferred financing fees | 25,000 | $ 0 | |||||||
Payment excluded due to amendment | $ 9,000,000 | ||||||||
Term Loan [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Number of promissory notes issued (debt instruments) | debt_instrument | 2 | ||||||||
Revolving Credit Facility, due May 2016 [Member] | Revolving Credit Facility [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Outstanding under credit facility | $ 87,700,000 | ||||||||
Fixed charge coverage ratio, duration | 12 months | ||||||||
Fixed charge coverage ratio | 1.1 | ||||||||
Unused borrowing capacity | $ 29,500,000 | ||||||||
Payments of deferred financing fees | 0 | 400,000 | |||||||
Promissory Note, Maturity Date June 30, 2016 [Member] | Promissory Note [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Imputed interest (percent) | 1.92% | ||||||||
Promissory Note, Maturity Date June 30, 2019 [Member] | Promissory Note [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Imputed interest (percent) | 3.62% | ||||||||
Term Loan [Member] | Revolving Credit Facility [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Outstanding under credit facility | 5,000,000 | ||||||||
Debt instrument, term | 18 months | ||||||||
Periodic payment duration | 6 months | ||||||||
Term Loan [Member] | Loans Payable [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Stated interest rate (percent) | 7.00% | ||||||||
Long-term debt | $ 2,700,000 | ||||||||
Weighted average interest rate | 8.00% | ||||||||
Debt instrument, term | 7 years | ||||||||
Banco Ficohsa, Loan 1 [Member] | Term Loan [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Aggregate principal of promissory notes | $ 1,800,000 | ||||||||
Stated interest rate (percent) | 7.00% | ||||||||
Debt instrument, term | 18 months | ||||||||
Banco Ficohsa, Loan 2 [Member] | Term Loan [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Aggregate principal of promissory notes | $ 4,200,000 | ||||||||
Stated interest rate (percent) | 7.00% | ||||||||
Long-term debt | $ 3,400,000 | ||||||||
Debt instrument, term | 7 years | ||||||||
Banco Ficohsa, Loan 3 [Member] | Term Loan [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Aggregate principal of promissory notes | $ 2,000,000 | ||||||||
Stated interest rate (percent) | 8.00% | ||||||||
Long-term debt | $ 2,000,000 | ||||||||
Debt instrument, term | 7 years | ||||||||
Salt Life Acquisition [Member] | Promissory Note [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Number of promissory notes issued (debt instruments) | debt_instrument | 2 | ||||||||
Aggregate principal of promissory notes | $ 22,000,000 | ||||||||
Amount of one-time installment payment | $ 9,000,000 | ||||||||
Revolving Credit Facility [Member] | Line of Credit [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Maximum borrowing capacity | $ 200,000,000 | ||||||||
Line of credit after increase pursuant to amended loan agreement | $ 145,000,000 | ||||||||
Interest rate during period (percent) | 2.50% | ||||||||
Unused borrowing capacity | $ 29,500,000 |
Selling, General and Administ37
Selling, General and Administrative Expense (Details) - USD ($) | Mar. 02, 2015 | Jun. 27, 2015 | Mar. 28, 2015 | Sep. 27, 2014 | Jun. 28, 2014 | Jun. 27, 2015 | Jun. 28, 2014 |
Selling, General and Administrative Expense [Abstract] | |||||||
Distribution costs | $ 4,300,000 | $ 4,200,000 | $ 12,100,000 | $ 12,600,000 | |||
Strategic Initiative [Member] | |||||||
Restructuring Reserve [Roll Forward] | |||||||
Accrued strategic initiative charge, opening balance | 1,800,000 | ||||||
Strategic initiative charge | $ 4,000,000 | 0 | |||||
Disbursements during the period | 1,100,000 | ||||||
Accrued strategic initiative charge, ending balance | $ 700,000 | $ 1,800,000 | 700,000 | ||||
Discontinued Operations, Disposed of by Sale [Member] | The Game [Member] | |||||||
Selling, General and Administrative Expense [Abstract] | |||||||
Incentive related costs | $ 1,400,000 | $ 1,400,000 | $ 1,400,000 |
Stock-Based Compensation (Narra
Stock-Based Compensation (Narrative) (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Jun. 27, 2015 | Jun. 28, 2014 | Jun. 27, 2015 | Jun. 28, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Allocated share-based compensation expense | $ 500,000 | $ 200,000 | $ 900,000 | $ 200,000 |
Performance shares [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Grants in the period (shares) | 169,000 | |||
Restricted Stock Units (RSUs) [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Grants in the period (shares) | 355,000 | |||
2010 Stock Plan [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total compensation cost not yet recognized | $ 3,900,000 | $ 3,900,000 | ||
Period for recognition | 3 years 6 months | |||
Aggregate number of shares that may be delivered (shares) | 500,000 | 500,000 | ||
Option Plan [Member] | Stock Options [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Allocated share-based compensation expense | $ 0 | $ 0 | ||
Exercises in period (shares) | 336,000 | 350,000 |
Purchase Contracts (Details)
Purchase Contracts (Details) $ in Thousands | Jun. 27, 2015USD ($) |
Long-term Purchase Commitment [Line Items] | |
Outstanding minimum payments | $ 45,838 |
Yarn [Member] | |
Long-term Purchase Commitment [Line Items] | |
Outstanding minimum payments | 22,651 |
Natural Gas [Member] | |
Long-term Purchase Commitment [Line Items] | |
Outstanding minimum payments | 81 |
Finished Fabric [Member] | |
Long-term Purchase Commitment [Line Items] | |
Outstanding minimum payments | 2,206 |
Finished Products [Member] | |
Long-term Purchase Commitment [Line Items] | |
Outstanding minimum payments | $ 20,900 |
Business Segments (Details)
Business Segments (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Jun. 27, 2015USD ($) | Jun. 28, 2014USD ($) | Jun. 27, 2015USD ($)segment | Jun. 28, 2014USD ($) | Sep. 27, 2014USD ($) | |
Segment Reporting Information [Line Items] | |||||
Number of business segments | segment | 2 | ||||
Net sales | $ 120,525 | $ 123,534 | $ 328,947 | $ 338,004 | |
Segment operating income | 6,897 | 1,592 | 11,007 | 1,751 | |
Segment assets | 329,027 | 358,630 | 329,027 | 358,630 | $ 354,578 |
Reconciliation of Operating Profit (Loss) from Segments to Consolidated [Abstract] | |||||
Segment operating income | 6,897 | 1,592 | 11,007 | 1,751 | |
Unallocated interest expense | 1,528 | 1,471 | 4,547 | 4,384 | |
Income (loss) before provision (benefit) from income taxes | 5,369 | 121 | 6,460 | (2,633) | |
Basics [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 79,034 | 75,818 | 208,102 | 204,465 | |
Segment operating income | 5,532 | 1,861 | 5,130 | 5,358 | |
Segment assets | 169,017 | 180,248 | 169,017 | 180,248 | |
Reconciliation of Operating Profit (Loss) from Segments to Consolidated [Abstract] | |||||
Segment operating income | 5,532 | 1,861 | 5,130 | 5,358 | |
Branded [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 41,491 | 47,716 | 120,845 | 133,539 | |
Segment operating income | 1,365 | (269) | 5,877 | (3,607) | |
Segment assets | 160,010 | 178,382 | 160,010 | 178,382 | |
Reconciliation of Operating Profit (Loss) from Segments to Consolidated [Abstract] | |||||
Segment operating income | $ 1,365 | $ (269) | $ 5,877 | $ (3,607) |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Jun. 27, 2015 | Mar. 28, 2015 | Jun. 28, 2014 | Jun. 27, 2015 | Jun. 28, 2014 | Oct. 03, 2015 | Sep. 27, 2014 | |
Income Tax Contingency [Line Items] | |||||||
Effective income tax rate (percent) | 40.40% | 92.60% | 87.10% | ||||
Effective income tax rate, excluding gain on sale of business, percentage | 4.20% | ||||||
Gain on sale of asset | $ 0 | $ 5,600 | $ 0 | $ 7,704 | $ 0 | ||
Payment of Taxes on Exercise of Stock Options | $ 300 | $ 10 | $ 0 | ||||
Forecast [Member] | |||||||
Income Tax Contingency [Line Items] | |||||||
Effective income tax rate, excluding gain on sale of business, percentage | 20.00% |
Derivatives and Fair Value Me42
Derivatives and Fair Value Measurements (Details) - USD ($) | Jun. 27, 2015 | Sep. 27, 2014 |
Deferred Tax Assets [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Abstract] | ||
Derivatives related to interest rate swap agreements | $ 207,000 | $ 0 |
Deferred Tax Liabilities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Abstract] | ||
Derivatives related to interest rate swap agreements | 0 | 168,000 |
Other Liabilities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Abstract] | ||
Derivatives related to interest rate swap agreements | 538,000 | 437,000 |
Accumulated Other Comprehensive Loss [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Abstract] | ||
Derivatives related to interest rate swap agreements | 331,000 | 269,000 |
Maturity Date 9/9/2016 [Member] | ||
Interest Rate Derivatives [Abstract] | ||
Notational Amount | $ 15,000,000 | |
Fixed LIBOR Rate | 1.17% | |
Maturity Date 9/11/2017 [Member] | ||
Interest Rate Derivatives [Abstract] | ||
Notational Amount | $ 15,000,000 | |
Fixed LIBOR Rate | 1.648% | |
Maturity Date 9/19/2016 [Member] | ||
Interest Rate Derivatives [Abstract] | ||
Notational Amount | $ 15,000,000 | |
Fixed LIBOR Rate | 1.003% | |
Maturity Date 9/19/2017 [Member] | ||
Interest Rate Derivatives [Abstract] | ||
Notational Amount | $ 15,000,000 | |
Fixed LIBOR Rate | 1.449% | |
Fair Value, Measurements, Recurring [Member] | Interest Rate Swaps [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Abstract] | ||
Financial derivative liabilities, fair value | $ (538,000) | (437,000) |
Fair Value, Measurements, Recurring [Member] | Contingent Consideration Contract [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Abstract] | ||
Financial derivative liabilities, fair value | (3,100,000) | (3,600,000) |
Fair Value, Measurements, Recurring [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Interest Rate Swaps [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Abstract] | ||
Financial derivative liabilities, fair value | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Contingent Consideration Contract [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Abstract] | ||
Financial derivative liabilities, fair value | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Significant Other Observable Inputs (Level 2) [Member] | Interest Rate Swaps [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Abstract] | ||
Financial derivative liabilities, fair value | (538,000) | (437,000) |
Fair Value, Measurements, Recurring [Member] | Significant Other Observable Inputs (Level 2) [Member] | Contingent Consideration Contract [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Abstract] | ||
Financial derivative liabilities, fair value | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Significant Unobservable Inputs (Level 3) [Member] | Interest Rate Swaps [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Abstract] | ||
Financial derivative liabilities, fair value | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Significant Unobservable Inputs (Level 3) [Member] | Contingent Consideration Contract [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Abstract] | ||
Financial derivative liabilities, fair value | (3,100,000) | $ (3,600,000) |
Salt Life Acquisition [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Abstract] | ||
Accrued contingent consideration | $ 3,100,000 |
Legal Proceedings (Details)
Legal Proceedings (Details) - USD ($) | Jun. 27, 2015 | Sep. 28, 2013 | Jul. 25, 2012 |
Pending Litigation [Member] | |||
Loss Contingencies [Line Items] | |||
Recommended civil penalty | $ 900,000 | ||
California Wage and Hour Litigation [Member] | |||
Loss Contingencies [Line Items] | |||
Minimum estimated loss | $ 15,000 | ||
Maximum estimated loss | 775,000 | $ 775,000 | |
California Wage and Hour Litigation [Member] | Pending Litigation [Member] | |||
Loss Contingencies [Line Items] | |||
Minimum estimated loss | 25,000 | ||
Maximum estimated loss | $ 900,000 |
Repurchase of Common Stock (Det
Repurchase of Common Stock (Details) - USD ($) | 1 Months Ended | 3 Months Ended | ||||
Jun. 27, 2015 | Jun. 27, 2015 | Jun. 28, 2014 | May. 30, 2015 | May. 02, 2015 | Jan. 23, 2013 | |
Class of Stock [Line Items] | ||||||
Authorized amount | $ 30,000,000 | |||||
Aggregated number of shares repurchased, shares | 2,152,946 | 2,152,946 | ||||
Aggregated shares repurchased, value | $ 400,000 | $ 400,000 | $ 1,000,000 | |||
Total Number of Shares Purchased | 30,700 | 66,556 | ||||
Dollar Value of Shares that May Yet Be Purchased Under the Plans | $ 4,300,000 | $ 4,300,000 | ||||
Common Stock [Member] | ||||||
Class of Stock [Line Items] | ||||||
Total Number of Shares Purchased | 30,700 | 30,700 | ||||
Average Price Paid per Share | $ 14.35 | $ 14.35 | ||||
Dollar Value of Shares that May Yet Be Purchased Under the Plans | $ 4,300,000 | $ 4,300,000 | $ 4,700,000 | $ 4,700,000 | ||
Publicly Announced Plan [Member] | Common Stock [Member] | ||||||
Class of Stock [Line Items] | ||||||
Total Number of Shares Purchased | 30,700 | 30,700 |
License Agreements (Details)
License Agreements (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 27, 2015 | Jun. 28, 2014 | Jun. 27, 2015 | Jun. 28, 2014 | |
Commitments and Contingencies Disclosure [Abstract] | ||||
Royalty expense | $ 2,200 | $ 2,700 | $ 6,600 | $ 7,100 |
License Agreements, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | ||||
2,015 | 340 | 340 | ||
2,016 | 2,644 | 2,644 | ||
2,017 | 93 | 93 | ||
2,018 | 0 | 0 | ||
Total due | $ 3,077 | $ 3,077 |
Goodwill and Intangible Asset46
Goodwill and Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Jun. 27, 2015 | Jun. 28, 2014 | Jun. 27, 2015 | Jun. 28, 2014 | Sep. 27, 2014 | |
Goodwill and Finite-Lived Intangible Assets [Line Items] | |||||
Goodwill, Cost | $ 36,729 | $ 36,729 | $ 36,729 | ||
Goodwill, Accumulated Amortization | 0 | 0 | 0 | ||
Goodwill, Net Value | 36,729 | 36,729 | 36,729 | ||
Intangibles, Cost | 29,357 | 29,357 | 29,357 | ||
Intangibles, Accumulated Amortization | (6,854) | (6,854) | (5,857) | ||
Intangibles, Net Value | 22,503 | 22,503 | 23,500 | ||
Amortization of intangible assets | 300 | $ 400 | 1,000 | $ 1,100 | |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | |||||
Amortization expense estimate for 2015 | 1,400 | 1,400 | |||
Amortization expense estimate for 2016 | 1,300 | 1,300 | |||
Amortization expense estimate for 2017 | 1,300 | 1,300 | |||
Amortization expense estimate for 2018 | 1,300 | 1,300 | |||
Amortization expense estimate for 2019 | 1,300 | 1,300 | |||
Tradename/Trademarks [Member] | |||||
Goodwill and Finite-Lived Intangible Assets [Line Items] | |||||
Intangibles, Cost | 17,530 | 17,530 | 17,530 | ||
Intangibles, Accumulated Amortization | (1,741) | (1,741) | (1,281) | ||
Intangibles, Net Value | 15,789 | $ 15,789 | 16,249 | ||
Tradename/Trademarks [Member] | Minimum [Member] | |||||
Goodwill and Finite-Lived Intangible Assets [Line Items] | |||||
Intangibles, economic life | 20 years | ||||
Tradename/Trademarks [Member] | Maximum [Member] | |||||
Goodwill and Finite-Lived Intangible Assets [Line Items] | |||||
Intangibles, economic life | 30 years | ||||
Customer Relationships [Member] | |||||
Goodwill and Finite-Lived Intangible Assets [Line Items] | |||||
Intangibles, Cost | 7,220 | $ 7,220 | 7,220 | ||
Intangibles, Accumulated Amortization | (3,567) | (3,567) | (3,298) | ||
Intangibles, Net Value | 3,653 | $ 3,653 | 3,922 | ||
Intangibles, economic life | 20 years | ||||
Technology [Member] | |||||
Goodwill and Finite-Lived Intangible Assets [Line Items] | |||||
Intangibles, Cost | 1,220 | $ 1,220 | 1,220 | ||
Intangibles, Accumulated Amortization | (674) | (674) | (582) | ||
Intangibles, Net Value | 546 | $ 546 | 638 | ||
Intangibles, economic life | 10 years | ||||
License Agreements [Member] | |||||
Goodwill and Finite-Lived Intangible Assets [Line Items] | |||||
Intangibles, Cost | 2,100 | $ 2,100 | 2,100 | ||
Intangibles, Accumulated Amortization | (191) | (191) | (113) | ||
Intangibles, Net Value | 1,909 | $ 1,909 | 1,987 | ||
License Agreements [Member] | Minimum [Member] | |||||
Goodwill and Finite-Lived Intangible Assets [Line Items] | |||||
Intangibles, economic life | 15 years | ||||
License Agreements [Member] | Maximum [Member] | |||||
Goodwill and Finite-Lived Intangible Assets [Line Items] | |||||
Intangibles, economic life | 30 years | ||||
Non-compete Agreements [Member] | |||||
Goodwill and Finite-Lived Intangible Assets [Line Items] | |||||
Intangibles, Cost | 1,287 | $ 1,287 | 1,287 | ||
Intangibles, Accumulated Amortization | (681) | (681) | (583) | ||
Intangibles, Net Value | $ 606 | $ 606 | $ 704 | ||
Non-compete Agreements [Member] | Minimum [Member] | |||||
Goodwill and Finite-Lived Intangible Assets [Line Items] | |||||
Intangibles, economic life | 4 years | ||||
Non-compete Agreements [Member] | Maximum [Member] | |||||
Goodwill and Finite-Lived Intangible Assets [Line Items] | |||||
Intangibles, economic life | 8 years 6 months |