Kornit Digital Ltd. (NASDAQ: KRNT), a company that develops, designs and markets innovative digital printing solutions for the global printed textile industry, today announced it has received an order from DTG2Go, a Delta Apparel, Inc (NYSE American: DLA) company and leader in the direct-to-garment printing and fulfilment marketplace.
The order follows several months of beta-testing of the recently released Kornit Atlas system by DTG2Go, during which Kornit was able to showcase the enhanced features of the most advanced industrial direct-to-garment solution available on the market. Key features of the Atlas include high volume throughput, attractive cost of ownership and featuring the new NeoPigment™ Eco-Rapid inkset specifically designed for sustainability and retail-quality digital textile printing. Per the agreement, DTG2Go will take delivery of 10 Atlas systems in 2019, along with a significant number of HD upgrades for DTG2Go’s existing Kornit Avalanche systems.
Kornit’s Chief Executive Officer, Ronen Samuel commented, “We are honored to expand our partnership with Delta Apparel as a key technology supplier as they expand their reach with digital printing. Delta’s unique platform strikes at the core of the changing needs in the retail supply chain, by offering a vertically-integrated digital print fulfillment model with quick delivery at an affordable price. The inclusion of the Atlas will greatly enhance the options and capabilities that Delta will be able to offer its customers. The all-new industrial Atlas has leading-edge technology with annual production capacity of over 350,000 impressions and optimizes production efficiency at the best cost of ownership available. We look forward to working collaboratively with Delta to deliver on this order and expand on this important relationship.”
“We are excited about the order with Kornit Digital. This marks another milestone in Delta and Kornit’s strategic partnership and we look forward to continuing our close collaboration in 2019,” commented Deborah Merrill, Delta Apparel Inc.’s CFO and President, Delta Group. Ms. Merrill continued, “Many of the new, innovative capabilities of the Kornit Atlas, including the wrinkle detection and pallet ergonomics, present clear productivity benefits. The new NeoPigment™ Eco-Rapid ink used in the Atlas provides impressive brilliance and color gamut, meeting all wash test standards with no discernible scent. We are glad we had the opportunity to beta-test the Kornit Atlas and look forward to it serving as a key component within DTG2Go’s production line.
Our recent decision to upgrade our Avalanche printers to the HD technology will allow us to use Eco-Rapid ink on these systems and enjoy its benefits. We see the Eco-Rapid ink as a strategic enabler that should help us increase our market share in digital print.
Lastly, we look forward to testing Kornit’s new polyester printing technology in the coming weeks. The ability to digitally print on 100% polyester fabric and other poly-blends is key to our strategy and should create significant growth opportunities for DTG2Go. We see a strong demand for digital printing on polyester, and are thrilled to be the first to introduce to the market high-end polyester products with unmatched print quality.”
Kornit Digital (NASDAQ:KRNT) develops, manufactures and markets industrial digital printing technologies for the garment, apparel and textile industries. Kornit delivers complete solutions, including digital printing systems, inks, consumables, software and after-sales support. Leading the digital direct-to-garment printing market with its exclusive eco-friendly NeoPigmentTM printing process, Kornit caters directly to the changing needs of the textile printing value chain. Kornit’s technology enables innovative business models based on web-to-print, on-demand and mass customization concepts. With its immense experience in the direct-to-garment market, Kornit also offers a revolutionary approach to the roll-to-roll textile printing industry: Digitally printing with a single ink set onto multiple types of fabric with no additional finishing processes. Founded in 2003, Kornit Digital is a global company, headquartered in Israel with offices in the USA, Europe and Asia Pacific, and serves customers in more than 100 countries worldwide.
Delta Apparel, Inc., along with its operating subsidiaries, Salt Life, LLC, M. J. Soffe, LLC, and DTG2Go, LLC, is an international design, marketing, manufacturing, and sourcing company that features a diverse portfolio of core activewear and lifestyle apparel and related accessory products. The Company specializes in selling casual and athletic products through a variety of distribution channels and distribution tiers, including department stores, mid and mass channels, e-retailers, sporting goods and outdoor retailers, independent and specialty stores, and the U.S. military. The Company’s products are also made available direct-to-consumer at its branded retail stores and on its websites at www.saltlife.com, www.coastapparel.com, www.soffe.com and www.deltaapparel.com. The Company’s operations are located throughout the United States, Honduras, El Salvador, and Mexico, and it employs approximately 7,800 people worldwide.
Delta Apparel reports First Quarter Fiscal 2019 Results
Company achieves sales growth of 12.5% and increases profitability
Delta Apparel, Inc. (NYSE American: DLA), a leading provider of core activewear and lifestyle apparel products, today announced financial results for its fiscal year 2019 first quarter ended December 29, 2018.
Robert W. Humphreys, the Company’s Chairman and Chief Executive Officer, commented, “Our team delivered a strong start to the new fiscal year and we are pleased with the wide-ranging performance we saw across our business during the first quarter, including double-digit sales growth in both our Delta Group and Salt Life Group segments. The continuing expansion of our digital print business, DTG2Go, which grew over 250 % during the quarter, and double-digit sales growth in our Salt Life lifestyle brand were key drivers in our results.”
Mr. Humphreys continued, “We believe we are well-positioned for more growth as we look to further capitalize on our industry-leading position in the digital print space, leverage our vertical manufacturing platform and increase consumer awareness of our Salt Life lifestyle brand through new product categories as well as growth with national and regional retailers and our own direct-to-consumer channels. This is an exciting time for Delta Apparel and we are extremely optimistic about our prospects going forward.”
For the first quarter ended December 29, 2018:
- Net sales were USD 101.7 million, up 12.5 % from USD 90.3 million in the prior year first quarter. Net sales in the Delta Group, which is comprised of the Company’s DTG2Go digital print business, Delta Activewear business and Soffe brand, increased 12.5%. Net sales in the Salt Life Group, which is comprised of the Company’s Salt Life and Coast lifestyle brands, increased 13.5%.
- Gross profit was USD 18.6 million, up 13 % from USD 16.4 million in the prior year first quarter. Gross margin improved 20 basis points to 18.3 % compared to 18.1 % in the prior year period.
- Selling, general and administrative (“SG&A”) expenses as a percentage of overall sales was 16.5 %, generally flat with the prior year first quarter.
- Operating income was USD 117 thousand compared to USD 1.7 million in the prior year first quarter, with the decrease attributable to a discrete expense of USD 2.5 million taken during the quarter in connection with the resolution of litigation stemming from The Sports Authority’s March 2016 bankruptcy. Excluding that expense, operating income was USD 2.6 million, up 49 % from USD 1.7 million in the prior year. Delta Group segment operating income was impacted by the litigation expense and came in at USD 2.8 million, compared to USD 4.4 million in the prior year first quarter. Excluding that expense, Delta Group operating income improved USD 0.8 million, or 18.5 %, over the prior year. Salt Life Group segment operating income was USD 0.4 million, up 58 % from USD 0.2 million in the prior year first quarter.
- The Company experienced a net loss for the quarter of USD 1.1 million, or USD 0.17 per diluted share, an improvement over the prior year first quarter’s loss of USD 10 million, or USD 1.37 per diluted share. Excluding the above-referenced USD 2.5 million litigation expense, the Company achieved earnings per diluted share of USD 0.14, a 75% increase over prior year earnings per share of USD 0.08 after excluding a discrete provisional tax expense of USD 10.6 million associated with United States tax reform legislation.
During the quarter, the Company spent USD 1.8 million on capital expenditures, USD 12 million on the acquisition of SSI Digital Print Services, and USD 1.7 million to repurchase 92000 shares of Company stock. Total debt, including capital lease financing, at quarter-end was USD 134 million, up USD 22 million from the end of the prior year first quarter due principally to the Company’s recent digital print acquisitions. Total inventory at quarter-end was USD 187.7 million compared with USD 174.5 million a year ago due to more units on hand from the recent digital print acquisitions as well as higher per unit cost inventory due to inflationary cost increases.