(Amounts in thousands, except share amounts and per share data)

(Unaudited)

	*June 2022*			*September 2021*
Assets
Cash and cash equivalents	$	542		$	9,376
Accounts receivable, less allowances of $91 and $251, respectively		68,435			66,973
Other receivables		1,433			761
Income tax receivable		0			356
Inventories, net		227,671			161,703
Prepaid expenses and other current assets		3,798			3,794
Total current assets		301,879			242,963

Property, plant and equipment, net of accumulated depreciation of $105,998 and $99,225, respectively		75,144			67,564
Goodwill		37,897			37,897
Intangibles, net		24,627			26,291
Deferred income taxes		1,164			1,854
Operating lease assets		47,570			45,279
Equity method investment		10,277			10,433
Other assets		2,893			2,007
Total assets	$	501,451		$	434,288

Liabilities and Equity
Liabilities:
Accounts payable	$	76,244		$	52,936
Accrued expenses		25,936			29,949
Income taxes payable		666			379
Current portion of finance leases		8,265			6,621
Current portion of operating leases		8,044			8,509
Current portion of long-term debt		7,615			7,067
Current portion of contingent consideration		563			0
Total current liabilities		127,333			105,461

Long-term income taxes payable		2,841			3,220
Long-term finance leases		18,802			15,669
Long-term operating leases		40,940			38,546
Long-term debt		128,230			101,680
Long-term contingent consideration		0			1,897
Other non-current liabilities		1,591			3,621
Total liabilities	$	319,737		$	270,094

Shareholder's 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 authorized, 9,646,972 shares issued, and 6,914,939 and 6,974,660 shares outstanding as of June 2022 and September 2021, respectively		96			96
Additional paid-in capital		60,822			60,831
Retained earnings		166,882			146,860
Accumulated other comprehensive loss		(7	)		(786	)
Treasury stock - 2,732,033 and 2,672,312 shares as of June 2022 and September 2021, respectively		(45,432	)		(42,149	)
Equity attributable to Delta Apparel, Inc.		182,361			164,852
Equity attributable to non-controlling interest		(647	)		(658	)
Total equity		181,714			164,194
Total liabilities and equity	$	501,451		$	434,288

~~(Unaudited)~~

December 30,
2017 September 30,
2017
Assets
Current assets:

  Cash and cash equivalents $ 603
$ 572
  Accounts receivable, less allowances of $1,502 and $1,433, respectively 51,010
47,557
  Income tax receivable 404
352
  Inventories, net 174,505
174,551
  Note receivable 1,031
2,016
  Prepaid expenses and other current assets 3,885
2,646
Total current assets 231,438
227,694

Property, plant and equipment, net of accumulated depreciation of $69,320 and $67,780, respectively 45,449
42,706
  Goodwill 19,917
19,917
  Intangibles, net 15,925
16,151
  Deferred income taxes 2,656
5,002
  Other assets 6,277
6,332
Total assets $ 321,662
$ 317,802

Liabilities and Shareholders’ Equity
Current liabilities:

Accounts payable $ 45,597
$ 47,183
Accrued expenses 13,503
17,704
Current portion of long-term debt 6,600
7,548
Total current liabilities 65,700
72,435

Long-term debt, less current maturities 99,360
85,306
Income tax payable 8,058
—
Other liabilities 4,734
2,574
Contingent consideration 1,300
1,600
Total liabilities $ 179,152
$ 161,915

Shareholders’ equity:
Preferred stock—$0.01 par value, 2,000,000 shares authorized, none issued and outstanding —
—
Common stock —$0.01 par value, 15,000,000 shares authorized, 9,646,972 shares issued, and 7,227,374 and 7,300,297 shares outstanding as of December 30, 2017, and September 30, 2017, respectively 96
96
Additional paid-in capital 59,856
61,065
Retained earnings 117,402
127,358
Accumulated other comprehensive income (loss) 51
(35 )
Treasury stock —2,419,598 and 2,346,675 shares as of December 30, 2017, and September 30, 2016, respectively (34,895 ) (32,597 )
Total shareholders’ equity 142,510
155,887
Total liabilities and shareholders' equity $ 321,662
$ 317,802

See accompanying Notes to Condensed Consolidated Financial Statements.

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Delta Apparel, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations

(Amounts in thousands, except per share data)

(Unaudited)

	Three Months Ended						Nine Months Ended
	June 2022			June 2021			June 2022			June 2021

Net sales	$	126,875		$	118,666		$	369,319		$	322,015
Cost of goods sold		96,182			88,427			282,100			246,677
Gross profit		30,693			30,239			87,219			75,338

Selling, general and administrative expenses		22,416			19,914			59,613			53,005
Other (income), net		(1,018	)		(1,578	)		(1,947	)		(218	)
Operating income		9,295			11,903			29,553			22,551

Interest expense, net		1,971			1,735			5,370			5,225
Earnings before provision for income taxes		7,324			10,168			24,183			17,326
Provision for income taxes		1,087			2,019			4,149			4,032
Consolidated net earnings		6,237			8,149			20,034			13,294
Net (loss) income attributable to non-controlling interest		(3	)		(12	)		11			(149	)
Net earnings attributable to shareholders	$	6,240		$	8,161		$	20,023		$	13,443

Basic earnings per share	$	0.90		$	1.17		$	2.87		$	1.93
Diluted earnings per share	$	0.88		$	1.14		$	2.84		$	1.90

Weighted average number of shares outstanding		6,946			6,975			6,966			6,956
Dilutive effect of stock awards		119			153			95			121
Weighted average number of shares assuming dilution		7,065			7,128			7,061			7,077

~~(Unaudited)~~

Three Months Ended
December 30,
2017 December 31,
2016
Net sales $ 90,342
$ 85,335
Cost of goods sold 73,972
67,777
Gross profit 16,370
17,558

Selling, general and administrative expenses 14,979
17,311
Change in fair value of contingent consideration (300 ) (100 )
Other income, net (47 ) (122 )
Operating income 1,738
469

Interest expense, net 1,334
1,301
Income (loss) before provision for income taxes 404
(832 )
Provision for (benefit from) income taxes 10,356
(225 )
Net loss $ (9,952 ) $ (607 )

Basic loss per share $ (1.37 ) $ (0.08 )
Diluted loss per share $ (1.37 ) $ (0.08 )

Weighted average number of shares outstanding 7,268
7,598
Dilutive effect of stock options and awards —
—
Weighted average number of shares assuming dilution 7,268
7,598

See accompanying Notes to Condensed Consolidated Financial Statements.

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Delta Apparel, Inc. and Subsidiaries

Condensed Consolidated Statements of Comprehensive ~~Loss~~

Income

(Amounts in thousands)

(Unaudited)

	Three Months Ended				Nine Months Ended
	June 2022		June 2021		June 2022		June 2021

Net earnings attributable to shareholders	$	6,240	$	8,161	$	20,023	$	13,443
Other comprehensive income related to unrealized gain on derivatives, net of income tax		186		105		779		429
Consolidated comprehensive income	$	6,426	$	8,266	$	20,802	$	13,872

~~(Unaudited)~~

Three Months Ended
December 30,
2017 December 31,
2016
Net loss $ (9,952 ) $ (607 )
Other comprehensive income related to unrealized gain on derivatives, net of income tax 85
49
Comprehensive loss $ (9,867 ) $ (558 )

See accompanying Notes to Condensed Consolidated Financial Statements.

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Delta Apparel, Inc. and Subsidiaries

Condensed Consolidated Statements of ~~Cash Flows~~

Shareholders’ Equity

(Amounts in ~~thousands)~~thousands, except share amounts)

(Unaudited)

										*Accumulated*
					*Additional*					*Other*									*Non-*
	*Common Stock*				*Paid-In*			*Retained*		*Comprehensive*			*Treasury Stock*						*Controlling*
	*Shares*		*Amount*		*Capital*			*Earnings*		*Income (Loss)*			*Shares*			*Amount*			*Interest*			*Total*
Balance as of September 2020		9,646,972	$	96	$	61,005		$	126,564	$	(1,322	)		2,756,854		$	(43,133	)	$	(524	)	$	142,686

Net earnings		-		0		0			883		0			-			0			0			883
Other comprehensive income		-		0		0			0		125			-			0			0			125
Net loss attributable to non-controlling interest		-		0		0			0		0			-			0			(40	)		(40	)
Vested stock awards		0		0		(2,117	)		0		0			(84,542	)		984			0			(1,133	)
Stock based compensation		-		0		676			0		0			-			0			0			676
Balance as of December 2020		9,646,972	$	96	$	59,564		$	127,447	$	(1,197	)		2,672,312		$	(42,149	)	$	(564	)	$	143,197

Net earnings		-		0		0			4,398		0			-			0			0			4,398
Other comprehensive income		-		0		0			0		199			-			0			0			199
Net loss attributable to non-controlling interest		-		0		0			0		0			-			0			(97	)		(97	)
Vested stock awards		-		0		0			0		0			-			0			0			0
Purchase of common stock		-		0		0			0		0			-			0			0			0
Stock based compensation		-		0		278			0		0			-			0			0			278
Balance as of March 2021		9,646,972	$	96	$	59,842		$	131,845	$	(998	)		2,672,312		$	(42,149	)	$	(661	)	$	147,975

Net earnings		-		0		0			8,161		0			-			0			0			8,161
Other comprehensive income		-		0		0			0		105			-			0			0			105
Net loss attributable to non-controlling interest		-		0		0			0		0			-			0			(12	)		(12	)
Stock based compensation		-		0		442			0		0			-			0			0			442
Balance as of June 2021		9,646,972	$	96	$	60,284		$	140,006	$	(893	)		2,672,312		$	(42,149	)	$	(673	)	$	156,671

~~(Unaudited)~~

Three Months Ended
December 30,
2017 December 31,
2016
Operating activities:
Net loss $ (9,952 ) $ (607 )
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization 2,433
2,415
Amortization of deferred financing fees 76
78
Provision for deferred income taxes 2,346
(194 )
Non-cash stock compensation 437
369
Change in the fair value of contingent consideration (300 ) (100 )
Loss on disposal of equipment —
5
Changes in operating assets and liabilities:
Accounts receivable, net (3,453 ) 15,448
Inventories, net 46
(14,791 )
Prepaid expenses and other assets (1,252 ) (770 )
Other non-current assets 61
—
Accounts payable (1,902 ) 3,063
Accrued expenses (4,290 ) (5,264 )
Income taxes 8,007
(150 )
Other liabilities (71 ) 44
Net cash used in operating activities (7,814 ) (454 )

Investing activities:
Purchases of property and equipment, net (2,162 ) (1,883 )
Proceeds from sale of Junkfood assets 1,000
—
Proceeds from sale of fixed assets 1
—
Net cash used in investing activities (1,161 ) (1,883 )

Financing activities:
Proceeds from long-term debt 119,529
115,707
Repayment of long-term debt (106,424 ) (111,749 )
Repayment of capital financing (257 ) (101 )
Repurchase of common stock (2,897 ) (965 )
Payment of withholding taxes on stock awards (945 ) (542 )
Net cash provided by financing activities 9,006
2,350
Net increase in cash and cash equivalents 31
13
Cash and cash equivalents at beginning of period 572
397
Cash and cash equivalents at end of period $ 603
$ 410

Supplemental cash flow information:
Cash paid during the period for interest $ 1,094
$ 1,209
Cash paid during the period for income taxes $ 19
$ 94
Non-cash financing activity - capital lease agreements $ 3,050
$ 1,619

										*Accumulated*
					*Additional*					*Other*									*Non-*
	*Common Stock*				*Paid-In*			*Retained*		*Comprehensive*			*Treasury Stock*						*Controlling*
	*Shares*		*Amount*		*Capital*			*Earnings*		*Income (Loss)*			*Shares*			*Amount*			*Interest*			*Total*
Balance as of September 2021		9,646,972	$	96	$	60,831		$	146,860	$	(786	)		2,672,312		$	(42,149	)	$	(658	)	$	164,194

Net earnings		-		0		0			3,645		0			-			0			0			3,645
Other comprehensive income		-		0		0			0		212			-			0			0			212
Net income attributable to non-controlling interest		-		0		0			0		0			-			0			25			25
Purchase of common stock		0		0		0			0		0			74,232			(2,143	)		0			(2,143	)
Vested stock awards		0		0		(1,766	)		0		0			(76,460	)		674			0			(1,092	)
Stock based compensation		-		0		140			0		0			-			0			0			140
Balance as of December 2021		9,646,972	$	96	$	59,205		$	150,505	$	(574	)		2,670,084		$	(43,618	)	$	(633	)	$	164,981

Net earnings		-		0		0			10,137		0			-			0			0			10,137
Other comprehensive income		-		0		0			0		381			-			0			0			381
Net loss attributable to non-controlling interest		-		0		0			0		0			-			0			(11	)		(11	)
Purchase of common stock		0		0		0			0		0			28,015			(846	)		0			(846	)
Stock based compensation		-		0		714			0		0			-			0			0			714
Balance as of March 2022		9,646,972	$	96	$	59,919		$	160,642	$	(193	)		2,698,099		$	(44,464	)	$	(644	)	$	175,356

Net earnings		-		0		0			6,240		0			-			0			0			6,240
Other comprehensive income		-		0		0			0		186			-			0			0			186
Net loss attributable to non-controlling interest		-		0		0			0		0			-			0			(3	)		(3	)
Purchase of common stock		0		0		0			0		0			33,934			(968	)		0			(968	)
Stock based compensation		-		0		903			0		0			-			0			0			903
Balance as of June 2022		9,646,972	$	96	$	60,822		$	166,882	$	(7	)		2,732,033		$	(45,432	)	$	(647	)	$	181,714

See accompanying Notes to Condensed Consolidated Financial Statements.

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Delta Apparel, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(Amounts in thousands)

(Unaudited)

	*Nine Months Ended*
	*June 2022*			*June 2021*
Operating activities:
Consolidated net earnings	$	20,034		$	13,294
Adjustments to reconcile net earnings to net cash used in operating activities:
Depreciation and amortization		11,272			10,212
Amortization of deferred financing fees		244			244
Provision for inventory market reserves		1,484			1,447
Change in reserves for allowances on accounts receivable, net		(160	)		(511	)
Provision for deferred income taxes		488			912
Non-cash stock compensation		1,756			1,396
Loss (gain) on disposal of equipment		348			(2	)
Other, net		(2,263	)		(1,672	)
Changes in operating assets and liabilities:
Accounts receivable, net		(1,251	)		(5,458	)
Inventories, net		(67,452	)		(8,244	)
Prepaid expenses and other current assets		602			(2,136	)
Other non-current assets		199			1,264
Accounts payable		23,390			(5,191	)
Accrued expenses		(1,737	)		3,592
Net operating lease liabilities		409			543
Income taxes		264			1,939
Other liabilities		(1,049	)		(626	)
Net cash (used in) provided by operating activities		(13,422	)		11,003
Investing activities:
Purchases of property and equipment		(10,931	)		(1,676	)
Proceeds from equipment purchased under finance leases		0			2,312
Proceeds from sale of equipment		33			422
Cash paid for intangible asset		(132	)		(6,655	)
Cash paid for business		(583	)		(2,527	)
Net cash used in investing activities		(11,613	)		(8,124	)
Financing activities:
Proceeds from long-term debt		411,600			346,841
Repayment of long-term debt		(383,919	)		(346,131	)
Repayment of finance lease obligations		(5,604	)		(5,415	)
Payment of contingent consideration		0			(2,110	)
Payment of deferred financing cost		(850	)		0
Repurchase of common stock		(3,934	)		0
Payment of withholding taxes on stock awards		(1,092	)		(1,133	)
Net cash provided by (used in) financing activities		16,201			(7,948	)
Net decrease in cash and cash equivalents		(8,834	)		(5,069	)
Cash and cash equivalents at beginning of period		9,376			16,458
Cash and cash equivalents at end of period	$	542		$	11,389

Supplemental cash flow information
Finance lease assets exchanged for finance lease liabilities	$	10,381		$	12,290
Operating lease assets exchanged for operating lease liabilities	$	6,869		$	1,032

See accompanying Notes to Condensed Consolidated Financial Statements.

Table of Contents

Delta Apparel, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited)

Note A— Description of Business and Basis of Presentation

Delta Apparel, Inc. (collectively with DTG2Go, LLC, Salt Life, LLC, M.J. Soffe, LLC, and ~~Description~~other subsidiaries, "Delta Apparel," "we," "us," "our," or the "Company") is a vertically-integrated, international apparel company. With approximately 9,100 employees worldwide, we design, manufacture, source, and market a diverse portfolio of ~~Business~~

core activewear and lifestyle apparel products under our primary brands of Salt Life®, Soffe®, and Delta. We are a market leader in the on-demand, digital print and fulfillment industry, bringing DTG2Go's proprietary technology and innovation to the supply chain of our customers. We specialize in selling casual and athletic products through a variety of distribution channels and tiers, including outdoor and sporting goods retailers, independent and specialty stores, better department stores and mid-tier retailers, mass merchants and e-retailers, the U.S. military, and through our business-to-business digital platform. Our products are also made available direct-to-consumer on our ecommerce sites and in our branded retail stores. Our diversified distribution model allows us to capitalize on our strengths to provide our activewear and lifestyle apparel products to a broad and evolving customer base whose shopping preferences may span multiple retail channels.

We design and internally manufacture the majority of our products. More than 90% of the apparel units that we sell are sewn in our owned or leased facilities. This allows us to offer a high degree of consistency and quality, leverage scale efficiencies, and react quickly to changes in trends within the marketplace. We have manufacturing operations located in the United States, El Salvador, Honduras, and Mexico, and we 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 in Duluth, Georgia. Our common stock trades on the NYSE American under the symbol “DLA."

We operate on a 52-53 week fiscal year ending on the Saturday closest to September 30. Our 2022 fiscal year is a 52-week year and will end on October 1, 2022 ("fiscal 2022"). Accordingly, this Form 10-Q presents our third quarter of fiscal 2022. Our 2021 fiscal year was a 52-week year and ended on October 2, 2021 ("fiscal 2021").

For presentation purposes herein, all references to period ended relate to the following fiscal years and dates:

Period Ended	Fiscal Year	Date Ended
June 2021	Fiscal 2021	July 3, 2021
September 2021	Fiscal 2021	October 2, 2021
December 2021	Fiscal 2022	January 1, 2022
March 2022	Fiscal 2022	April 2, 2022
June 2022	Fiscal 2022	July 2, 2022

We prepared the accompanying interim ~~condensed consolidated financial statements~~Condensed Consolidated Financial Statements in accordance with the instructions for Form ~~10-Q~~10-Q and Article 10 of Regulation ~~S-X.~~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 include all normal recurring adjustments considered necessary for a fair presentation. Operating results for the ~~three-month period~~three-month and nine-month periods ended ~~December 30, 2017~~,June 2022 are not necessarily indicative of the results that may be expected for our fiscal ~~year ending September 29, 2018.~~2022. 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~~These Condensed Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements and footnotes included in our Annual Report on Form ~~10-K~~10-K for our fiscal ~~year ended September 30, 2017,~~2021, filed with the United States Securities and Exchange Commission (“SEC”).

~~“Delta Apparel”,~~

Our Condensed Consolidated Financial Statements include the ~~“Company”, “we”, “us” and “our” are used interchangeably to refer to~~accounts of Delta Apparel ~~Inc. together with our domestic~~and its wholly-owned ~~subsidiaries, including M.J. Soffe, LLC (“Soffe”), Culver City Clothing Company (f/k/a Junkfood Clothing Company) (“Junkfood”), Salt Life, LLC (“Salt Life”),~~ and Art Gun, LLC (“Art Gun”), and other international subsidiaries, as appropriate to the context. On March 31, 2017, we sold substantially all of the assets comprising our Junkfood business to JMJD Ventures, LLC. See Note D—Divestitures, for further information on this transaction.

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, headwear and related accessory products. We specialize 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. Our products are also made available direct-to-consumer on our websites and in our branded retail stores. 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 usemajority-owned domestic and foreign ~~contractors~~subsidiaries. We apply the equity method of accounting for our investment in 31% of the outstanding capital stock of a Honduran company. During the nine-months ended June 2022 and June 2021, we received dividends from the investment of $1.1 million and $0.9 million, respectively. Our Ceiba Textiles manufacturing facility is leased under an operating lease arrangement with this Honduran company. During the nine-months ended June 2022, we paid approximately $1.3 million under this arrangement. Payments of approximately $1.8 million were made during the nine-months ended June 2021, which included payment of rent deferrals related to the June 2020 quarter as ~~additional sources~~a result of ~~production. Our distribution facilities are strategically located throughout~~ the ~~United States~~COVID pandemic.

We make available copies of materials we file with, or furnish to, ~~better serve our customers with same-day shipping~~the SEC free of charge at https://ir.deltaapparelinc.com. The information found on our ~~catalog products~~website is not part of this, or any other, report that we file with, or furnish to, the SEC. In addition, we will provide upon request, at no cost, paper or electronic copies of our reports and ~~weekly replenishments~~other filings made with the SEC. Requests should be directed to: Investor Relations Department, Delta Apparel, Inc., 2750 Premiere Parkway, Suite 100, Duluth, Georgia 30097. Requests can also be made by telephone to ~~retailers.~~864-232-5200, or via email at investor.relations@deltaapparel.com.

Table of Contents

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 American exchange under the symbol “DLA”. We operate on a 52-53 week fiscal year ending on the Saturday closest to September 30. Our 2018 fiscal year is a 52-week year and will end on September 29, 2018. Our 2017 fiscal year was a 52-week year and ended on September 30, 2017.

Note B—Accounting Policies

Our accounting policies are consistent with those described in our Significant Accounting Policies in our Annual Report on Form ~~10-K~~10-K for ~~the~~our fiscal ~~year ended September 30, 2017,~~2021, filed with the SEC. See Note C for consideration of recently issued accounting standards.

Note C—New Accounting Standards

Recently Adopted Standards

In ~~July 2015,~~ December 2019, the ~~Financial~~FASB issued ASU No.2019-12,Simplifying the Accounting for Income Taxes (“ASU 2019-12”), which simplifies the accounting for income taxes, eliminates certain exceptions within Accounting Standards ~~Board~~Codification ("~~FASB"~~ASC") 740, Income Taxes, and clarifies certain aspects of the current guidance to promote consistency among reporting entities. ASU 2019-12 is effective as of the beginning of our fiscal year 2022. Most amendments within the standard are required to be applied on a prospective basis, while certain amendments must be applied on a retrospective or modified retrospective basis. The impact of the adoption of provision of ASU 2019-12 did not have a material impact to our financial condition, results of operations, cash flows, and disclosures.

Standards Not Yet Adopted

In June 2016, the FASB issued ~~Accounting Standards Update ("ASU"~~ASU No.2016-13,Financial Instruments - Credit Losses (Topic 326) ~~No. 2015-11,~~ ~~Simplifying the~~: Measurement of ~~Inventory~~Credit Losses on Financial Instruments (“ASU 2016-13”), ~~("ASU 2015-11"). This new guidance~~which requires an entity to ~~measure inventory at~~assess impairment of its financial instruments based on the ~~lower~~entity's estimate of ~~cost~~expected credit losses. Since the issuance of ASU 2016-13, the FASB released several amendments to improve and ~~net realizable value. Currently, entities measure inventory at~~clarify the ~~lower~~implementation guidance. These standards have been collectively codified within ASC Topic 326, Credit Losses (“ASC 326”). As a smaller reporting company as defined by the SEC, the provisions of ~~cost or market. ASU 2015-11 replaces market with net realizable value. Net realizable value is~~ASC 326 are effective as of the ~~estimated selling price in the ordinary course~~beginning 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 was adopted in our fiscal year ~~beginning October 1, 2017. The adoption~~2024. We are currently evaluating the impacts of ~~this standard did not have a material impact~~the provisions of ASC 326 on our ~~consolidated~~ financial ~~statements~~

~~Standards Not Yet Adopted~~

condition, results of operations, cash flows, and disclosures.

In ~~May 2014,~~ March 2020, the FASB issued ASU ~~No. 2014-09,~~ ~~Revenue~~2020-04,Reference Rate Reform (Topic 848) Facilitation of the Effects of Reference Rate Reform on Financial Reporting. ASU 2020-04provides optional guidance for a limited period of time to ease potential accounting and financial reporting impacts of reference rate reform, including the expected transition from ~~Contracts with Customers, ("ASU 2014-09").~~the London Interbank Offered Rate (LIBOR) and other interbank offered rates to alternative reference rates. This new guidance ~~requires an entity~~includes temporary optional practical expedients and exceptions for applying U.S. GAAP to ~~recognize~~transactions affected by reference rate reform if certain criteria are met. These transactions include contract modifications, hedging relationships and the ~~amount of revenue to which it expects to be entitled for the~~sale or 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 permitsdebt securities classified as held-to-maturity. Entities may apply the ~~use~~provisions of ~~either~~ the ~~retrospective~~

or cumulative effect transition method. Early application is permitted only for annual reporting periods beginning after December 15, 2016. ASU 2014-09 will therefore be effective in our fiscal year beginning September 30, 2018. Although we have not yet determined our adoption method, we have identified a committee, agreed on a methodology for review of our revenue arrangements and initiated the review process for adoption of this ASU, and are evaluating the effect that ASU 2014-09 will have on our Consolidated Financial Statements and related disclosures.

~~In February 2016, the FASB issued ASU No. 2016-02,~~ ~~Leases,~~ ("ASU 2016-02"). ASU 2016-02 requires lessees to recognize assets and liabilities for most leases. All leases will be required to be recorded on the balance sheet with the exception of short-term leases. Early application is permitted. The guidance must be adopted using a modified retrospective approach for leases that exist or are entered into afternew standard at the beginning of the ~~earliest comparative~~reporting period inwhen the ~~financial statements. ASU 2016-02~~election is ~~effective for~~made. This guidance may be applied through December 31, 2022. The Company is currently evaluating the impact of this standard on its consolidated financial statements ~~issued for annual periods beginning after December 15, 2018,~~ and ~~interim periods within those annual periods. ASU 2016-02 will therefore be effective in~~related disclosures and does not currently intend to early adopt the new rules.

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Note D—Revenue Recognition

Our Condensed Consolidated Statements of Operations include revenue streams from retail sales at our ~~fiscal year beginning September 29, 2019. We are evaluating the effect that ASU 2016-02 will have~~branded retail stores; direct-to-consumer ecommerce sales on our ~~Consolidated Financial Statements~~consumer-facing web sites; and ~~related disclosures.~~sales from wholesale channels, which includes our business-to-business ecommerce and DTG2Go sales. The table below identifies the amount and percentage of net sales by distribution channel (in thousands):

	*Three Months Ended*
	*June 2022*				*June 2021*
Retail	$	4,412	3	%	$	3,543	3	%
Direct-to-consumer ecommerce		1,145	1	%		2,105	2	%
Wholesale		121,318	96	%		113,018	95	%
Net sales	$	126,875	100	%	$	118,666	100	%

	*Nine Months Ended*
	*June 2022*				*June 2021*
Retail	$	9,685	3	%	$	8,429	3	%
Direct-to-consumer ecommerce		3,199	1	%		5,393	2	%
Wholesale		356,435	96	%		308,193	95	%
Net sales	$	369,319	100	%	$	322,015	100	%

The table below provides net sales by reportable segment and the percentage of net sales by distribution channel for each reportable segment (in thousands):

	*Three Months Ended June 2022*
	*Net Sales*		*Retail*			*Direct-to-consumer ecommerce*			*Wholesale*
Delta Group	$	106,020		0.1	%		0.4	%		99.5	%
Salt Life Group		20,855		20.8	%		3.4	%		75.8	%
Total	$	126,875

	*Three Months Ended June 2021*
	*Net Sales*		*Retail*			*Direct-to-consumer ecommerce*			*Wholesale*
Delta Group	$	102,562		0.2	%		0.3	%		99.5	%
Salt Life Group		16,104		20.6	%		11.1	%		68.3	%
Total	$	118,666

	*Nine Months Ended June 2022*
	*Net Sales*		*Retail*			*Direct-to-consumer ecommerce*			*Wholesale*
Delta Group	$	323,276		0.1	%		0.3	%		99.6	%
Salt Life Group		46,043		20.3	%		5.0	%		74.7	%
Total	$	369,319

	*Nine Months Ended June 2021*
	*Net Sales*		*Retail*			*Direct-to-consumer ecommerce*			*Wholesale*
Delta Group	$	284,404		0.3	%		0.3	%		99.4	%
Salt Life Group		37,611		20.6	%		12.1	%		67.3	%
Total	$	322,015

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~~Note D—Divestitures~~

~~On March 31, 2017, we completed the sale of substantially all of the assets comprising our Junkfood business to JMJD Ventures, LLC for $27.9 million. The business sold consisted of vintage-inspired~~ ~~Junk Food~~ branded and private label products sold in the United States and internationally. We received cash at closing of $25.0 million and recorded a $2.9 million note receivable with payments due between June 30, 2017, and March 30, 2018. The note receivable was amended on June 29, 2017, to revise the repayment schedule for payments to be made between September 29, 2017, and March 30, 2018.

We realized a $1.3 million pre-tax gain on the sale of the Junkfood business resulting from the proceeds of $27.9 million less the costs of assets sold and other expenses, and less direct selling costs associated with the transaction. The pre-tax gain was recorded in the Condensed Consolidated Statement of Operations as a Gain on sale of business in our 2017 second fiscal quarter as a Gain on sale of business.

Note E—Inventories

Inventories, net of ~~$9.9~~reserves of $17.4 million and ~~$9.8~~$15.9 million ~~in reserves,~~ as of ~~December 30, 2017,~~ June 2022 and September ~~30, 2017,~~ 2021, respectively, consisted of the following (in thousands):

December 30,
2017 September 30,
2017
Raw materials $ 8,639
$ 8,973
Work in process 16,179
18,543
Finished goods 149,687
147,035
$ 174,505
$ 174,551

	*June 2022*		*September 2021*
Raw materials	$	23,660	$	17,204
Work in process		23,005		20,954
Finished goods		181,006		123,545
	$	227,671	$	161,703

Raw materials include finished yarn and direct materials for the Delta Group, undecorated garments for the DTG2Go business, and direct embellishment materials for the Salt Life Group.

Note F—Debt

Credit Facility

On May 10, 2016, we entered into a Fifth Amended and Restated Credit Agreement ~~(the~~(as further amended, the “Amended Credit Agreement”) with Wells Fargo Bank, National Association (“Wells Fargo”), as Administrative Agent, the Sole Lead Arranger and the Sole Book Runner, and the financial institutions named therein as Lenders, which are Wells Fargo, PNC Bank, ~~National Association~~ and Regions Bank. Our subsidiaries M.J. Soffe, LLC, Culver City Clothing Company, ~~(f/k/a Junkfood Clothing Company),~~ Salt Life, LLC, and ~~Art Gun,~~DTG2Go, LLC ~~(together with~~(collectively, the ~~Company, the “Companies”~~"Borrowers"), are co-borrowers under the Amended Credit Agreement.

On The Borrowers entered into amendments to the Amended Credit Agreement with Wells Fargo and the other lenders on November 27, 2017, ~~Delta Apparel, Soffe, Junkfood, Salt Life,~~ March 9, 2018, October 8, 2018, November 19, 2019, April 27, 2020, and ~~Art Gun (collectively,~~ August 28, 2020.

On June 2, 2022, the ~~“Borrowers”)~~Borrowers entered into a ~~First~~Seventh Amendment to the Fifth Amended and Restated Credit Agreement with Wells Fargo Bank (the “Agent”) and the other lenders set forth therein (the ~~“First~~“Seventh Amendment”).

The ~~First~~Seventh Amendment, (i) removes LIBOR based borrowing and utilizes SOFR (Secured Overnight Financing Rate) as the primary pricing structure, (ii) amends the ~~definition~~pricing structure based on SOFR plus a CSA (Credit Spread Adjustment) defined as 10 bps for 1 month and 15 bps for 3-month tenors, (iii) sets the SOFR floor to 0 bps, (iv) reloads the fair market value of real estate and intellectual property within the borrowing base calculation and resets their respective amortization schedules, (v) sets the maturity date to 5 years from the closing date, and (vi) updates the requirement for our Fixed Charge Coverage Ratio ~~within~~(“FCCR”) for the ~~Amended Credit Agreement to permit up to $10 million of the proceeds received from the March 31, 2017, sale of certain assets of the Junkfood business to~~preceding 12-month period must not be used towards share repurchases for up to one year from the date of that transaction. In addition, the definition of Permitted Purchase Money Indebtedness is amended to extend the time period within which the Borrowers may enter into capital leases and to increase the aggregate principal amount of such leases into which the Borrowers may enter to up to $15 million. The definition of Permitted Investments is also amended to permit the Borrowers to make investments in entities that are not a party to the Amended Credit Agreement in an aggregate amount of up to $2 million. The First Amendment also allows the change in the name of our Junkfood Clothing Company subsidiary to Culver City Clothing Company. There were no changes to the Agreement related to interest rate, borrowing capacity, or maturity.

less than 1.0 (previously 1.1).

The Amended Credit Agreement allows us to borrow up to ~~$145~~$170 million (subject to borrowing base limitations), including a maximum of $25 million in letters of credit. Provided that no event of default exists, we have the option to increase the maximum credit to $200

million (subject to borrowing base limitations), conditioned upon the Administrative Agent's ability to secure additional commitments and customary closing conditions. The ~~credit facility matures on May 10, 2021. In fiscal year 2016, we paid $1.0 million in financing costs associated with the Amended Credit Agreement.~~

~~As of December 30, 2017, there was $90.1 million outstanding under our U.S. revolving credit facility at an average interest rate of 3.3% and additional borrowing availability of $26.6 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 Credit Agreement, our Fixed Charge Coverage Ratio (“FCCR”) (as defined in the Amended Credit 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 ~~December 30, 2017, because our availability was above the minimum required under the Amended Credit Agreement, and we would have satisfied our financial covenant had we been subject to it.~~ ~~At December 30, 2017, and September 30, 2017, there was $9.0 million and $7.7 million, respectively, of retained earnings free of restrictions to make cash dividends or stock repurchases.~~

~~The~~ Amended Credit Agreement contains a subjective acceleration clause and a “springing” lockbox arrangement (as defined in ~~FASB Codification No.~~ ASC 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~~We classify borrowings under the Amended Credit Agreement as long-term ~~debt.~~

~~In August 2013,~~ debt with consideration of current maturities.

As of June 2022, we had $122.8 million outstanding under our U.S. revolving credit facility at an average interest rate of 3.4%. Our cash on hand combined with the availability under the U.S. credit facility totaled $30.8 million. At June 2022 and September 2021 there was $25.0 million and $19.0 million, respectively, of retained earnings free of restrictions to make cash dividends or stock repurchases.

Promissory Note

On October 8, 2018, we acquired ~~Salt Life and~~substantially all of the assets of Silk Screen Ink, Ltd. d/b/a SSI Digital Print Services. In conjunction with the acquisition, we issued ~~two~~a promissory ~~notes~~note in the ~~aggregate~~ principal amount 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~~$7.0 million. The promissory note beared interest at 6% with quarterly installments, ~~commencing on March 31, 2015,~~ which began January 2, 2019, with the final installment due ~~on June 30, 2019.~~ October 1, 2021. 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 imputed interest at 1.92% on~~final payment, in accordance with the promissory note ~~that matured June 30, 2016, and~~agreement, was ~~paid in full as required. We impute interest at 3.62% on~~made during the ~~promissory note that matures on June 30, 2019. At~~ three-months ended December ~~30, 2017, the discounted value of the promissory note outstanding was $3.9 million.~~

2021.

Honduran Debt

Since March 2011, we have entered into term loans and a revolving credit facility with Banco Ficohsa, a Honduran bank, to finance both the operations and capital expansion of our Honduran facilities. In December 2020, we entered into a new term loan and revolving credit facility with Banco Ficohsa, both with five-year terms, and simultaneously settled the prior term loans and revolving credit facility with outstanding balances at the time of settlement of $1.1 million and $9.5 million, respectively. Additionally, in May 2022, we entered into a new term loan with a five-year term with a principal amount of $3.7 million. Each of these loans isare secured by a ~~first-priority~~first-priority lien on the assets of our Honduran operations and is not guaranteed by our U.S. entities. These loans are denominated in U.S. dollars, and the carrying value of the debt approximates its fair value. ~~The~~As the revolving credit facility requires minimum payments during each six-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 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 those covenants, the amounts have been classified as long-term debt.

Additional information about these loans and the outstanding balances as of ~~December 30, 2017,~~ June 2022 is as follows (in thousands):

	*June 2022*
Revolving credit facility established December 2020, interest at 7.25%, due August 2025	$	2,000
Term loan established December 2020, interest at 7.5%, quarterly installments beginning September 2021 through December 2025		7,100
Term loan established May 2022, interest at 7.5%, quarterly installments beginning March 2023 through May 2027		3,656

December 30,
2017
Revolving credit facility established March 2011, interest at 8.0% due March 2019 $ 4,804
Term loan established March 2011, interest at 7.0%, payable monthly with a seven-year term 243
Term loan established November 2014, interest at 7.5%, payable monthly with a six-year term 1,850
Term loan established June 2016, interest at 8.0%, payable monthly with a six-year term 1,286
Term loan established September 2017, interest at 8.0%, payable monthly with a six-year term 3,817

Note G—Selling, General and Administrative Expense

We include in selling, general and administrative ("SG&A") expenses the 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 ~~$3.9~~$5.6 million and ~~$3.5~~$5.2 million for the ~~three-month periods~~June 2022 and 2021 quarters, respectively. Distribution costs included in SG&A expenses totaled $16.8 million and $15.6 million for the nine-months ended ~~December 30, 2017,~~ June 2022 and ~~December 31, 2016,~~2021, 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.

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Note H—Stock-Based Compensation

On February ~~4, 2015,~~ 6, 2020, our shareholders ~~re-approved~~approved the Delta Apparel, Inc. ~~2010~~2020 Stock Plan ~~("2010~~("2020 Stock Plan") ~~that~~to replace the 2010 Stock Plan, which was ~~originally approved~~previously re-approved by our shareholders on ~~November 11, 2010.~~ ~~Since November 2010, no additional awards have been or will be granted under either~~February 4, 2015 and was scheduled to expire by its terms on September 14, 2020. The 2020 Stock Plan is substantially similar in both form and substance to the ~~Delta Apparel~~2010 Stock ~~Option~~Plan. The purpose of the 2020 Stock Plan ~~("Option Plan") or the Delta Apparel Incentive Stock Award Plan ("Award Plan") and, instead, all stock awards have been and will~~is to continue to ~~be granted under~~give our Board of Directors and its Compensation Committee the ~~2010 Stock Plan.~~

~~We account for these plans pursuant~~ability to ~~ASC 718, SAB 107, SAB 110,~~offer a variety of compensatory awards designed to enhance the Company’s long-term success by encouraging stock ownership among its executives, key employees and ~~ASU 2016-09. Shares are generally issued from treasury stock upon exercise of the options or the vesting of the restricted stock units and performance units.~~

~~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-month periods ended December 30, 2017, and December 31, 2016, we recognized $0.5 million and $0.6 million, respectively, in stock-based compensation expense.

~~2010 Stock Plan~~

directors. Under the ~~2010~~2020 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 under the plan consist of stock options, stock appreciation rights, restricted stock, restricted stock units, performance stock, stock performance units, and other stock and cash awards. Unvested awards, while employed by the Company or servings as a director, become fully vested under certain circumstances as defined in the 2020 Stock Plan. Such circumstances include, but are not limited to, the participant’s death or becoming disabled. The ~~aggregate number~~Compensation Committee is authorized to establish the terms and conditions of ~~shares of common stock that may be delivered~~awards granted under the ~~2010~~2020 Stock Plan, ~~is 500,000 plus~~to establish, amend and rescind any ~~shares of common stock subject~~rules and regulations relating to ~~outstanding awards under~~ the ~~Option~~2020 Stock Plan, ~~or Award~~and to make any other determinations that it deems necessary. Similar to the 2010 Stock Plan, ~~that are subsequently forfeited or terminated for any reason before being exercised. The 2010~~the 2020 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 a given calendar year. ~~If a participant dies or becomes disabled (as defined in~~Shares are generally issued from treasury stock upon the ~~2010 Stock Plan) while employed by~~vesting of the Company 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.

~~During the three-month period ended December 30, 2017,~~ restricted stock units, ~~and~~ performance units or other awards under the 2020 Stock Plan.

Compensation expense is recorded within SG&A in our Condensed Consolidated Statements of Operations over the vesting periods. During the June 2022 and 2021 quarters, we recognized $1.1 million and $0.5 million in stock-based compensation expense, respectively. Associated with the compensation cost are income tax benefits recognized of $0.2 million and $0.1 million, respectively, for each of the three-month periods ended June 2022 and June 2021, respectively. During the nine-months ended June 2022 and June 2021, we recognized $2.4 million and $2.0 million, respectively, in stock-based compensation expense. Associated with the compensation cost are income tax benefits recognized of $0.4 million and $0.5 million, respectively, for each of the nine-months periods ended June 2022 and June 2021.

During the December 2021 quarter, performance stock units and restricted stock units representing ~~54,602~~47,700 and ~~92,068~~95,000 shares of our common stock, respectively, vested ~~upon~~with the filing of our Annual Report on Form ~~10-K~~10-K for ~~the~~ fiscal ~~year ended September 30, 2017,~~2021, and were issued in accordance with their respective agreements. ~~One-half of the restricted stock units~~Of these vested awards, 96,350 were payable in common stock and ~~one-half~~46,350 were payable in cash. ~~Of the performance units, 72,138 were payable in common stock and 19,930 were payable in cash.~~

During the ~~three-month period ended~~ December ~~30, 2017,~~2021 quarter, restricted stock units ~~and performance stock units, each consisting of 55,750~~representing 5,000 shares of our common stock were ~~issued~~granted and are eligible to vest upon the filing of our Annual Report on Form ~~10-K~~10-K for fiscal 2022 and are payable in common stock.

During the ~~fiscal year ended September 28, 2019. One-half of the~~December 2021 quarter, performance stock units and restricted stock units representing 59,625 and ~~one-half~~59,625 shares of our common stock, respectively, were granted and are eligible to vest upon the ~~performance units~~filing of our Annual Report for fiscal 2023. Of these shares, 64,625 are payable in common stock and ~~one-half~~54,625 are payable in cash.

During the ~~three-month period ended~~ December ~~31, 2016,~~2021 quarter, restricted stock units ~~and performance units~~ representing ~~8,438 and 53,248~~13,000 shares of our common stock ~~respectively, vested~~were granted and are eligible to vest upon the filing of our Annual Report on Form ~~10-K~~10-K for fiscal 2024 and are payable in common stock.

During the ~~fiscal year ended October 1, 2016, and were issued in accordance with their respective agreements. The~~March 2022 quarter, restricted stock units representing 42,000 shares of our common stock were granted and ~~performance units~~are eligible to vest upon the filing of our Annual Report for fiscal 2023. Of these shares, 21,000 are payable ~~one-half~~ in common stock and ~~one-half~~21,000 are payable in cash.

During the March 2022 quarter, restricted stock units representing 42,000 shares of our common stock were granted and are eligible to vest upon the filing of our Annual Report for fiscal 2024. Of these shares, 21,000 are payable in common stock and 21,000 are payable in cash.

During the June 2022 quarter, restricted stock units representing 10,000 shares of our common stock were granted and are eligible to vest upon the filing of our Annual Report on Form 10-K for fiscal 2022 and are payable in common stock. Additionally, restricted stock units representing 10,000 shares of our common stock were granted and are eligible to vest upon the filing of our Annual Report for fiscal 2023. Of these shares, 5,000 are payable in common stock and 5,000 are payable in cash. Additionally, restricted stock units representing 10,000 shares of our common stock were granted and are eligible to vest upon the filing of our Annual Report for fiscal 2024. Of these shares, 5,000 are payable in common stock and 5,000 are payable in cash.

During the June 2022 quarter, performance stock units representing 10,000 were granted and are eligible to vest upon the filing of our Annual Report on Form 10-K for fiscal 2023. Of these shares, 5,000 are payable in common stock and 5,000 are payable in cash. Additionally, performance stock units representing 10,000 were granted and are eligible to vest upon the filing of our Annual Report on Form 10-K for fiscal 2024. Of these shares, 5,000 are payable in common stock and 5,000 are payable in cash.

As of ~~December 30, 2017,~~ June 2022, there was ~~$4.1 million~~$4.9 million of total unrecognized compensation cost related to unvested awards granted under the ~~2010~~2020 Stock Plan. This cost is expected to be recognized over a period of 32.4 years.

~~Option Plan~~

~~All options granted under the Option Plan vested prior to October 3, 2015. As such,~~ no ~~expense was recognized during each of the three-month periods ended December 30, 2017, and December 31, 2016. No options were exercised during the three-month period ended December 30, 2017.~~

Note I—Purchase Contracts

We have entered into agreements, and have fixed prices, to purchase yarn, finished fabric, and finished apparel and headwear products. At ~~December 30, 2017,~~June 2022, minimum payments under these contracts were as follows (in thousands):

Yarn	$	30,480
Finished fabric		7,620
Finished products		11,059
	$	49,159

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Yarn $ 3,252
Finished fabric 2,271
Finished products 21,995
$ 27,518

Note J—Business Segments

~~We operate~~

Our operations are managed and reported in two segments, Delta Group and Salt Life Group, which reflect the manner in which the business is managed and results are reviewed by the Chief Executive Officer, who is 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.~~

chief operating decision maker.

The ~~basics segment~~Delta Group is comprised of our business units primarily focused on ~~garment~~core activewear styles, ~~characterized by low fashion risk,~~ and includes our DTG2Go and Delta Activewear ~~(which includes Delta Catalog and FunTees) and Art Gun~~ business units. We are a market ~~distribute~~leader in the on-demand, direct-to-garment digital print and ~~manufacture unembellished knit~~fulfillment industry, bringing technology and innovation to the supply chain of our many customers. We use highly-automated factory processes and our proprietary software to deliver on-demand, digitally printed apparel direct to consumers on behalf of our customers. Our Activewear business is organized around key customer channels and how they source their various apparel needs. Delta Activewear is a preferred supplier of activewear apparel to regional and global brands, direct to retail and through wholesale markets. We offer a broad portfolio of apparel and accessories under the ~~main brands~~Delta, Delta Platinum, Soffe, and sourced-branded products that we distribute utilizing our network of fulfillment centers. Delta ~~Platinum™, Delta Dri®, Delta Magnum Weight®,~~Direct services key channels, such as the screen print, promotional, and ~~Delta Pro Weight® for sale~~eRetailer channels as well as the retail licensing channel, whose customers sell through to many mid-tier and mass market retailers. In our Global Brands & Retail Direct business we serve our customers as their supply chain partner, from product development to shipment of their branded products, with the majority of products being sold with value-added services including embellishment, hangtags, and ticketing. We also serve retailers by providing our portfolio of products directly to their retail stores and through their ecommerce channels. We sell our products to a diversified audience, ~~ranging from large licensed screen printers to small independent businesses.~~including sporting goods and outdoor retailers, specialty and resort shops, farm and fleet stores, department stores, and mid-tier retailers. We also ~~manufacture private label products for~~service custom apparel to major branded sportswear companies, trendy regional brands, ~~retailers,~~ and ~~sports-licensed apparel marketers. Typically~~all branches of the United States armed forces. We also offer our ~~private label~~Soffe products ~~are sold with value-added services such as hangtags, ticketing, hangers, and embellishment so that~~

~~they are fully ready for retail. Using digital print equipment and proprietary technology, Art Gun embellishes garments~~direct to ~~create private label, custom-decorated apparel servicing the fast-growing e-retailer channels as well as the ad-specialty, promotional products and retail marketplaces.~~

consumers at www.soffe.com.

The ~~branded segment~~Salt Life Group is comprised of our ~~business units~~lifestyle brand focused on ~~specialized~~a broad range of apparel garments, headwear and related accessories to meet consumer preferences and fashion trends, and includes our Salt Life ~~Soffe, and Coast~~ business ~~units. Our branded segment also included our Junkfood business unit prior to its disposition on March 31, 2017.~~unit. These ~~branded~~ products are sold through specialty and boutique shops, traditional department stores, and ~~mid-tier~~outdoor retailers, ~~sporting goods stores, e-retailers and the U.S. military,~~ as well as direct-to-consumer through branded ecommerce sites and ~~"brick and mortar"~~branded retail stores. Products in this segment are marketed under our lifestyle ~~brands~~brand of Salt Life®~~, Soffe®, and COAST®, as well as other labels.~~

Our Chief Operating Decision Maker and management evaluate performance and allocate resources based on profit or loss from operations before interest, ~~and~~ income taxes and special charges ("segment operating earnings"). Our segment operating earnings may not be comparable to similarly titled measures used by other companies. The accounting policies of our reportable segments are the same as those described in Note 2 in our Annual Report on Form ~~10-K~~10-K for ~~the~~ fiscal ~~year ended September 30, 2017,~~2021, filed with the SEC.

Intercompany transfers between operating segments are transacted at cost and have been eliminated within the segment amounts shown in the following table (in thousands).

Three Months Ended
December 30, 2017 December 31, 2016
Segment net sales:
Basics $ 73,176
$ 60,838
Branded 17,166
24,497
Total net sales $ 90,342
$ 85,335

Segment operating income (loss):
Basics $ 4,189
$ 4,684
Branded 458
(1,000 )
Total segment operating income $ 4,647
$ 3,684

	*Three Months Ended*				*Nine Months Ended*
	*June 2022*		*June 2021*		*June 2022*		*June 2021*
Segment net sales:
Delta Group	$	106,020	$	102,562	$	323,276	$	284,404
Salt Life Group		20,855		16,104		46,043		37,611
Total net sales	$	126,875	$	118,666	$	369,319	$	322,015

Segment operating earnings:
Delta Group ⁽¹⁾	$	10,701	$	13,869	$	33,557	$	28,394
Salt Life Group		3,574		2,916		7,037		4,726
Total segment operating earnings	$	14,275	$	16,785	$	40,594	$	33,120

⁽¹⁾In fiscal 2021, the Delta Group operating earnings included $1.3 million of expense, reported within "Other loss (income), net", related to two catastrophic hurricanes that disrupted operations during the December 2020 quarter.

The following table reconciles the segment operating ~~income~~earnings to the consolidated ~~income (loss)~~earnings before provision for ~~(benefit from)~~ income taxes (in thousands):

	*Three Months Ended*				*Nine Months Ended*
	*June 2022*		*June 2021*		*June 2022*		*June 2021*
Segment operating earnings	$	14,275	$	16,785	$	40,594	$	33,120
Unallocated corporate expenses		4,980		4,882		11,041		10,569
Unallocated interest expense		1,971		1,735		5,370		5,225
Consolidated earnings before provision for income taxes	$	7,324	$	10,168	$	24,183	$	17,326

Three Months Ended
December 30, 2017 December 31, 2016
Segment operating income $ 4,647
$ 3,684
Unallocated corporate expenses 2,909
3,215
Unallocated interest expense 1,334
1,301
Consolidated income (loss) before provision for (benefit from) income taxes $ 404
$ (832 )

Table of Contents

Note K—Income Taxes

~~On December 22, 2017, the~~

The Tax Cuts and Jobs Act of 2017 (the “New Tax Legislation”) was ~~enacted. The New Tax Legislation~~enacted on December 22, 2017, which significantly revised the U.S. corporate income tax code by, among other things, lowering federal corporate income tax rates, implementing a modified territorial tax system and imposing a repatriation tax ("transition tax") on deemed repatriated cumulative earnings of foreign ~~subsidiaries. During~~subsidiaries which will be paid over eight years. In addition, new taxes were imposed related to foreign income, including a tax on global intangible low-taxed income (“GILTI”) as well as a limitation on the ~~three-month period ended December 30, 2017, we recognized provisional amounts totaling $10.6 million~~deduction for business interest expense (“Section 163(j)"). GILTI is the excess of ~~tax expense.~~the shareholder’s net controlled foreign corporations ("CFC") net tested income over the net deemed tangible income. GILTI income is eligible for a deduction of up to 50% of the income inclusion, but the deduction is limited to the amount of U.S. adjusted taxable income. The Section 163(j) limitation does not allow the amount of deductible interest to exceed the sum of the taxpayer's business interest income and 30% of the taxpayer’s adjusted taxable income. We have ~~made reasonable estimates~~included in our calculation of our effective tax rate the ~~effects~~estimated impact of GILTI and Section 163(j). We have elected to account for the tax on GILTI as a period cost and, therefore, do not record deferred taxes related to GILTI on our existing deferred tax balances and the one-time transition tax; however, these amounts may change as more information becomes available. We accounted for the $10.6 million provisional amount as a discrete item for tax provision purposes, recording tax expense on our best estimate of the effect of the New Tax Legislation. Excluding the effect of this discrete item, theforeign subsidiaries.

Our effective income tax rate on operations for the ~~three-month period~~nine-months ended ~~December 30, 2017,~~ June 2022 was ~~(46.4%). This tax benefit relates~~17.2% compared to ~~stock option excess benefits as~~ a ~~result from our adoption of ASU 2016-09. This compares to an effective income tax~~ rate of ~~27.0% for~~23.1% in the same period inof the prior year, and ~~5.9%~~an effective rate of 21.9% for ~~the~~ fiscal ~~year ended September 30, 2017.~~

2021.We generally benefit from having income in foreign jurisdictions that are either exempt from income taxes or have tax rates that are lower than those in the United States. ~~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 September 29, 2018, excluding the discrete tax expense associated with the New Tax Legislation, is currently expected to be approximately 12%-13%. The change in the federal statutory rate from 34% to 21% as a result of the New Tax Legislation is effective at the beginning of our fiscal year. As such, ~~the blended federal statutory tax rate for the fiscal year is anticipated to be approximately 24.3%. However,~~ changes in the mix of U.S. taxable income compared to profits in tax-free or lower-tax jurisdictions can have a significant impact on our overall effective tax rate. In addition, the impact of the New Tax Legislation may differ from our initial provisional estimates, possibly materially, due to, among other things, changes in interpretations and assumptions made regarding the New Tax Legislation, guidance that may be issued and actions we may take as a result of the New Tax Legislation.

~~Provisional amounts~~

~~As noted above we consider the estimate of the effects on our existing deferred tax balances and the one-time transition tax to be provisional.~~

Deferred tax assets and liabilities: We remeasured our deferred tax assets and liabilities based on an estimated scheduling of when we anticipate these amounts will reverse and by applying estimated rates based on the period we believe they will reverse. However, we are still analyzing certain aspects of the New Tax Legislation and refining our scheduling and calculations, which could potentially affect the remeasurement of these balances. The provisional amount of expense related to the remeasurement of our deferred tax balance was approximately $1.1 million which was recognized during the quarter.

Transition tax: Our current estimate of the one-time transition tax is based on an estimate of our total earnings and profits (E&P) from our foreign subsidiaries which were previously deferred from US income taxes. A deferred tax liability for such undistributed earnings was not previously recognized since the earnings are considered to be permanently reinvested. We recorded a provisional amount related to this one-time transition tax of $9.5 million during the quarter which will be paid over eight years. We anticipate that the benefit resulting from the reduction of the federal tax rate from 34% to 21% will offset the future payments of the transition tax, resulting in minimal cash flow impact. We have not completed our analysis of the total E&P or the split between liquid and illiquid assets for our foreign subsidiaries. As such this amount may change when we finalize our analysis.

State tax effect: We continued to apply ASC 740 based on the provisions of the state tax laws that were in effect immediately prior to the New Tax Legislation being enacted. It is currently impractical to determine the changes to our state provision resulting from the New Tax Legislation; however, we believe the impact will not be material.

We file income tax returns in the U.S. federal jurisdiction and various state, local and foreign jurisdictions. Tax years 2014, 2015 and 2016, according to statute and with few exceptions, remain open to examination by various federal, state, local and foreign jurisdictions.

Note L—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. We have designated our interest rate swap contracts as cash flow hedges of our future interest payments. As a result, the gains and losses on the swap contracts are reported as a component of other comprehensive income and are reclassified into interest expense as the related interest payments are made. As of June 2022, all of our other comprehensive income was attributable to shareholders; none related to the non-controlling interest. Outstanding instruments as of ~~December 30, 2017,~~ June 2022 are as follows:


		*Notional*
	*Effective Date*	~~Notational~~ *Amount*		*Fixed LIBOR Rate*		*Maturity Date*
Interest Rate Swap	July ~~19, 2017~~25, 2018	$1020.0 million	~~1.74%~~	3.18%		July ~~19, 2019~~25, 2023
~~Interest Rate Swap~~	~~July 19, 2017~~	~~$10 million~~	~~1.99%~~		~~May 10, 2021~~

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 2022 and September 2021 (in thousands):

	June 2022			September 2021
Deferred tax assets	$	1		$	266
Other non-current liabilities		(8	)		(1,052	)
Accumulated other comprehensive loss	$	(7	)	$	(786	)

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 realized and unrealized gains and losses associated with them are recorded within cost of goods sold on the Condensed Consolidated Statement of Operations.

~~FASB Codification No.~~ No such cotton contracts were outstanding at June 2022 and September 2021.

ASC 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 ornomarket activity for assets or liabilities and includes certain pricing models, discounted cash flow methodologies and similar techniques.

Table of Contents

The following financial ~~assets (liabilities)~~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
December 30, 2017 $ 83
—
$ 83
—
September 30, 2017 (56 ) —
(56 ) —

Cotton Options

December 30, 2017 $ (1 ) $ (1 ) —
—
September 30, 2017 (125 ) (125 ) —
—

Contingent Consideration
December 30, 2017 $ (1,300 ) —
—
$ (1,300 )
September 30, 2017 (1,600 ) —
—
(1,600 )

				*Fair Value Measurements Using*
				*Quoted Prices in*		*Significant Other*			*Significant*
				*Active Markets for*		*Observable*			*Unobservable*
				*Identical Assets*		*Inputs*			*Inputs*
Period Ended	*Total*			*(Level 1)*		*(Level 2)*			*(Level 3)*
Interest Rate Swaps
June 2022	$	(8	)		0	$	(8	)		0
September 2021	$	(1,052	)		0	$	(1,052	)		0

Contingent Consideration
June 2022	$	(563	)		0		0		$	(563	)
September 2021	$	(1,897	)		0		0		$	(1,897	)

The fair value of the interest rate swap agreements was derived from a 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. At ~~December 31, 2017,~~June 2022 and September 2021, book value for fixed rate debt approximates fair value based on quoted market prices for the same or similar issues or on the current rates offered to us for debt of the same remaining maturities (a Level 2 fair value measurement).

The ~~following table summarizes~~DTG2Go acquisition purchase price consisted of additional payments contingent on the ~~fair value and presentation in the~~ ~~Condensed Consolidated Balance Sheets~~ ~~for derivatives~~combined business’s achievement of certain performance targets related to sales and earnings before interest, taxes, depreciation and amortization ("EBITDA") for the period from April 1, 2018, through September 29, 2018, as well as for our ~~interest swap agreements as~~fiscal years 2019,2020,2021 and 2022. The valuation of ~~December 30, 2017, and September 30, 2017 (in thousands):~~

December 30,
2017 September 30,
2017
Other assets $ 83
$ —
Deferred tax assets —
21
Accrued expenses —
(56 )
Deferred tax liabilities (32 ) —
Accumulated other comprehensive income (loss) $ 51
$ (35 )

In August 2013, we acquired Salt Life and issued 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 a Monte Carlo model utilizing 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 the acquisition date as well as to remeasure~~is based upon projected results. The fair value of the contingent consideration ~~related~~is sensitive to ~~the acquisition~~changes in our projected results and discount rates. As of ~~Salt Life at each reporting period. Accordingly, the fair value measurement for contingent consideration falls in Level 3 of the fair value hierarchy.~~

~~At December 30, 2017,~~ June 2022, we ~~had $1.3 million accrued in contingent consideration related to the Salt Life acquisition, a $0.3 million reduction from the accrual at September 30, 2017. The reduction in~~estimate the fair value of contingent consideration ~~is based on the inputs into the Monte Carlo model, including the time remaining in the measurement period. The sales expectations for calendar year 2019 have been reduced~~to be $0.6 million, a $1.3 million decrease from ~~the sales expectations used in the valuation of contingent consideration at acquisition~~ September 2021 due to ~~our current view of the retail environment. Our expectations are consistent with those at September 30, 2017.~~a change in projected results resulting in decreased estimated future earnout payments.

Note M—Legal Proceedings

~~The Sports Authority Bankruptcy Litigation~~

Soffe is involved in several related litigation matters stemming from The Sports Authority's ("TSA") March 2, 2016, filing of a voluntary petition(s) for relief under Chapter 11 of the United States Bankruptcy Code (the "TSA Bankruptcy"). Prior to such filing, Soffe provided TSA with products to be sold on a consignment basis pursuant to a "pay by scan" agreement and the litigation matters relate to Soffe's interest in the products it provided TSA on a consignment basis (the "Products") and the proceeds derived from the sale of such products (the "Proceeds").

TSA Stores, Inc. and related entities TSA Ponce, Inc. and TSA Caribe, Inc. filed an action against Soffe on March 16, 2016, in the United States Bankruptcy Court for the District of Delaware (the "TSA Action") essentially seeking a declaratory judgment that: (i) Soffe does not own the Products but rather has a security interest that is not perfected or senior and is avoidable; (ii) Soffe only has an unsecured claim against TSA; (iii) TSA and TSA's secured creditors have valid, unavoidable and senior rights in the Products and the Products are

the property of TSA’s estate; (iv) Soffe does not have a perfected purchase money security interest in the Products; (v) Soffe is not entitled to a return of the Products; and (vi) TSA can continue to sell the Products and Soffe is not entitled to any proceeds from such sales other than as an unsecured creditor. The TSA Action also contains claims seeking to avoid Soffe's filing of a financing statement related to the Products as a preference and recover the value of that transfer as well as to disallow Soffe's claims until it has returned preferential transfers or their associated value. TSA also brings a claim for a permanent injunction barring Soffe from taking certain actions. We believe that many of the claims in the TSA Action, including TSA’s claim for injunction, are now moot as a result of Soffe’s agreement to permit TSA to continue selling the Products in TSA’s going-out-of-business sale.

On May 16, 2016, TSA lender Wilmington Savings Fund Society, FSB, as Successor Administrative and Collateral Agent ("WSFS"), intervened in the TSA Action seeking a declaratory judgment that: (i) WSFS has a perfected interest in the Products and Proceeds that is senior to Soffe's interest; and (ii) the Proceeds paid to Soffe must be disgorged pursuant to an order previously issued by the court. WSFS's intervening complaint also contains a separate claim seeking the disgorgement of all Proceeds paid to Soffe along with accrued and unpaid interest.

Soffe has asserted counterclaims against WSFS in the TSA Action essentially seeking a declaratory judgment that: (i) WSFS is not perfected in the Products; and (ii) WSFS's interest in the Products is subordinate to Soffe's interest.

On May 24, 2016, Soffe joined an appeal filed by a number of TSA consignment vendors in the United States District Court for the District of Delaware challenging an order issued in the TSA Bankruptcy that, should WSFS or TSA succeed in the TSA Action, granted TSA and/or WSFS a lien on all Proceeds received by Soffe and requiring the automatic disgorgement of such Proceeds. Soffe and another entity are the remaining consignment vendors pursuing this appeal.

Although we will continue to vigorously defend against the TSA Action and pursue the above-referenced counterclaims and appeal, should TSA and/or WSFS ultimately prevail on their claims, we could be forced to disgorge all Proceeds received and forfeit our ownership rights in any Products that remain in TSA's possession. We believe the range of possible loss in this matter is currently $0 to $3.3 million; however, it is too early to determine the probable outcome and, therefore, no amount has been accrued related to this matter.

~~In addition, at~~

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 adverse effect on our operations, financial condition, or liquidity.

Note N—Repurchase of Common Stock

As of ~~December 30, 2017,~~ September 28, 2019, our Board of Directors authorized management to use up to ~~$50.0~~$60.0 million to repurchase stock in open market transactions under our Stock Repurchase Program.

During the ~~December~~ June 2022 quarter, ~~of fiscal year 2018,~~ we purchased ~~145,124 shares of our common stock for a total cost of $3.0 million. Through December 30, 2017, we have purchased 3,038,611~~33,934 shares of our common stock for an aggregate of ~~$41.7~~$1.0 million. Through June 2022, we have purchased 3,735,114 shares of our common stock for an aggregate of $56.4 million ~~since the inception of~~under our Stock Repurchase ~~Program.~~Program since its inception. All purchases were made at the discretion of management and pursuant to the safe harbor provisions of SEC Rule ~~10b-18.~~10b-18. As of ~~December 30, 2017, $8.3~~June 2022, $3.6 million remained available for future purchases under our Stock Repurchase Program, which does not have an expiration date.

~~The following table summarizes the purchases~~

Table of ~~our common stock for the quarter ended December 30, 2017:~~

Contents

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
October 1, 2017 to November 4, 2017 29,081
$21.04 29,081

$10.7 million
November 5, 2017 to December 2, 2017 46,444
20.67 46,444
9.7 million
December 3, 2017 to December 30, 2017 69,599
20.56 69,599
8.3 million
Total 145,124
$20.69 145,124

$8.3 million

Note O—Goodwill and Intangible Assets

Components of intangible assets consist of the following (in thousands):

December 30, 2017 September 30, 2017
Cost Accumulated Amortization Net Value Cost Accumulated Amortization Net Value Economic Life

Goodwill $ 19,917
$ —
$ 19,917
$ 19,917
$ —
$ 19,917
N/A

Intangibles:
Tradename/trademarks $ 16,090
$ (2,329 ) $ 13,761
$ 16,090
$ (2,193 ) $ 13,897
20 – 30 yrs
Technology 1,220
(978 ) 242
1,220
(947 ) 273
10 yrs
License agreements 2,100
(449 ) 1,651
2,100
(423 ) 1,677
15 – 30 yrs
Non-compete agreements 1,037
(766 ) 271
1,037
(733 ) 304
4 – 8.5 yrs
Total intangibles $ 20,447
$ (4,522 ) $ 15,925
$ 20,447
$ (4,296 ) $ 16,151

	June 2022							September 2021
	Cost		Accumulated Amortization			Net Value		Cost		Accumulated Amortization			Net Value		Economic Life

Goodwill	$	37,897	$	—		$	37,897	$	37,897	$	—		$	37,897	N/A

Intangibles:
Tradename/trademarks	$	16,000	$	(4,717	)	$	11,283	$	16,000	$	(4,317	)	$	11,683	20 – 30 yrs
Customer relationships		7,400		(3,028	)		4,372		7,400		(2,473	)		4,927	20 yrs
Technology		10,083		(2,385	)		7,698		9,952		(1,715	)		8237	10 yrs
License agreements		2,100		(914	)		1,186		2,100		(837	)		1,263	15 – 30 yrs
Non-compete agreements		1,657		(1,569	)		88		1,657		(1,476	)		181	4 – 8.5 yrs
Total intangibles	$	37,240	$	(12,613	)	$	24,627	$	37,109	$	(10,818	)	$	26,291

Goodwill represents the acquired goodwill net of the ~~cumulative~~$0.6 million impairment losses recorded in fiscal year ~~2011~~2011. As of ~~$0.6~~June 2022, the Delta Group segment assets include $18.0 million of goodwill, and the Salt Life segment assets include $19.9 million. ~~The goodwill~~

Depending on the type of intangible asset, amortization is recorded ~~on our financial statements is included in the branded segment.~~

under cost of goods sold or selling, general and administrative expenses. Amortization expense for intangible assets ~~was $0.2 million~~ for the ~~three-month period ended December 30, 2017,~~ June 2022 and ~~$0.3~~June 2021 quarters was $0.6 million and $0.5 million, respectively. Amortization for the ~~three-month period~~nine-months ended ~~December 31, 2016.~~June 2022 and June 2021 was $1.8 million and 1.2 million, respectively. Amortization expense is estimated to be approximately ~~$0.9~~$2.3 million for ~~each~~the year ended September 2022, approximately $2.2 million for the year ended September 2023, and approximately $2.2 million for the years ended September 2024, 2025 and 2026.

On June 1, 2021, DTG2Go, LLC acquired specified net assets of Fan Print Inc., which primarily included its Autoscale.ai technology as well as immaterial net working capital. The costs to acquire the net assets were $8.0 million, of which $6.6 million was paid at closing through our existing U.S. credit facility and $1.4 million will be paid in three installments, one installment in our third quarter of fiscal 2022 and two installments remaining. The acquisition qualified as an asset acquisition in accordance with ASU 2017-01,Clarifying the Definition of a Business, as substantially all of the fair value of the net assets acquired or $8.1 million were assigned to the technology intangible asset with an estimated economic life of 10 years. The acquisition cost also consists of additional payments contingent on the adjusted operating profits resulting from the Autoscale.ai technology for the period from June 1, 2021 through October 2, 2021, as well as for our fiscal years ~~2018~~2022 through 2026. These contingent earnout liabilities are recognized when the contingency is probable and ~~2019, approximately $0.7 million for~~reasonably estimable, which generally results in recognition, if earned, during the fourth quarter of each fiscal year ~~2020,~~ and ~~approximately $0.6 million for each~~which would increase the value of ~~fiscal years 2021 and 2022.~~the technology intangible asset.

Note P—Subsequent Events

None.

Table of Contents

~~None~~

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

Cautionary Note Regarding Forward-Looking Statements

The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking statements made by or on behalf of the Company. We may from time to time make written or oral statements that are “forward-looking,” including statements contained in this report and other filings with the SEC, in our press releases, and in other reports to our shareholders. All statements, other than statements of historical fact, which address activities, events or developments that we expect or anticipate will or may occur in the future are forward-looking statements. The words “plan”, “estimate”, “project”, “forecast”, “outlook”, “anticipate”, “expect”, “intend”, ~~“seek’~~“remain”, “seek", “believe”, “may”, “should” and similar expressions, and discussions of strategy or intentions, are intended to identify forward-looking statements.

Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based on our current expectations and are necessarily dependent upon assumptions, estimates and data that we believe are reasonable and accurate but may be incorrect, incomplete or imprecise. Forward-looking statements are subject to a number of business risks and inherent uncertainties, any of which could cause actual results to differ materially from those set forth in or implied by the forward-looking statements. Therefore, you should not rely on any of these forward-looking statements. Important factors that could cause our actual results and financial condition to differ materially from those indicated in forward-looking statements include, among others, the following:

~~the volatility and uncertainty of cotton and other raw material prices;~~

~~the general U.S. and international economic conditions;~~

~~the competitive conditions in the apparel industry;~~

~~restrictions on our ability to borrow capital or service our indebtedness;~~

~~deterioration in the financial condition of our customers and suppliers and changes in the operations and strategies of our customers and suppliers;~~

~~our ability to predict or react to changing consumer preferences or trends;~~

~~our ability to successfully open and operate new retail stores in a timely and cost-effective manner;~~

~~pricing pressures and the implementation of cost reduction strategies;~~

~~changes in economic, political or social stability at our offshore locations;~~

~~disruptions at our manufacturing and other facilities;~~

~~our ability to attract and retain key management;~~

~~the effect of unseasonable or significant weather conditions on purchases of our products;~~

~~significant changes in our effective tax rate;~~

~~interest rate fluctuations increasing our obligations under our variable rate indebtedness;~~

~~the ability to raise additional capital;~~

~~the ability to grow, achieve synergies and realize the expected profitability of acquisitions;~~

~~the volatility and uncertainty of energy and fuel prices;~~

~~material disruptions in our information systems related to our business operations;~~

~~data security or privacy breaches;~~

~~significant interruptions within our manufacturing or distribution operations;~~

~~changes in or our ability to comply with safety, health and environmental regulations;~~

~~significant litigation in either domestic or international jurisdictions:~~

~~the ability to protect our trademarks and other intellectual property;~~

~~the ability to obtain and renew our significant license agreements;~~

~~the impairment of acquired intangible assets;~~

~~changes in ecommerce laws and regulations;~~

~~changes in international trade regulations;~~

~~our ability to comply with trade regulations;~~

~~changes in employment laws or regulations or our relationship with employees;~~

~~cost increases and reduction in future profitability due to the effects of healthcare legislation;~~

~~foreign currency exchange rate fluctuations;~~

~~violations of manufacturing standards or labor laws or unethical business practices by our suppliers and independent contractors;~~

~~the illiquidity of our shares;~~

~~price volatility in our shares and the general volatility of the stock market; and~~

~~the costs required to comply with the regulatory landscape regarding public company governance and disclosure.~~

	●	the general U.S. and international economic conditions;
	●	the impact of the COVID-19 pandemic and government/social actions taken to contain its spread on our operations, financial condition, liquidity, and capital investments, including recent labor shortages, inventory constraints, and supply chain disruptions;

●

significant interruptions or disruptions within our manufacturing, distribution or other operations;

●

deterioration in the financial condition of our customers and suppliers and changes in the operations and strategies of our customers and suppliers;

●

the volatility and uncertainty of cotton and other raw material prices and availability;

●

the competitive conditions in the apparel industry;

●

our ability to predict or react to changing consumer preferences or trends;

●

our ability to successfully open and operate new retail stores in a timely and cost-effective manner;

●

the ability to grow, achieve synergies and realize the expected profitability of acquisitions;

●

changes in economic, political or social stability at our offshore locations in areas in which we, or our suppliers or vendors, operate;

●

our ability to attract and retain key management;

●

the volatility and uncertainty of energy, fuel and related costs;

●

material disruptions in our information systems related to our business operations;

●

compromises of our data security;

●

significant changes in our effective tax rate;

●

significant litigation in either domestic or international jurisdictions;

●

recalls, claims and negative publicity associated with product liability issues;

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the ability to protect our trademarks and other intellectual property;

●

changes in international trade regulations;

●

our ability to comply with trade regulations;

●

changes in employment laws or regulations or our relationship with employees;

●

negative publicity resulting from violations of manufacturing standards or labor laws or unethical business practices by our suppliers and independent contractors;

	●	the inability of suppliers or other third-parties, including those related to transportation, to fulfill the terms of their contracts with us;
	●	restrictions on our ability to borrow capital or service our indebtedness;

●

interest rate fluctuations increasing our obligations under our variable rate indebtedness;

●

the ability to raise additional capital;

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the impairment of acquired intangible assets;

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foreign currency exchange rate fluctuations;

●

the illiquidity of our shares; and

●

price volatility in our shares and the general volatility of the stock market.

A detailed discussion of significant risk factors that have the potential to cause actual results to differ materially from our expectations is ~~described~~set forth in Part 1 under the subheading "Risk Factors" in our Annual Report on Form 10-K for ~~our~~ fiscal ~~year ended September 30, 2017,~~2021, filed with the SEC. Any forward-looking statements in this Quarterly Report on Form 10-Q do not purport to be predictions of future events or circumstances and may not be realized. Further, any forward-looking statements are made only as of the date of this Quarterly Report on Form 10-Q, and we do not undertake to publicly update or revise the forward-looking statements, except as required by the federal securities laws.

Table of Contents

Business Outlook

The results of our third quarter fiscal 2022 reflect a continuation of the solid performance we achieved in the first half of fiscal 2022, which we believe ~~that~~has been driven by strong consumer demand for our ~~strong first quarter~~products. While sales continue to grow year over year, our operating margin was negatively impacted by inflationary pressures, resulting in higher variable selling and distribution costs and lower operating margins. Our bottom line results ~~including double-digit sales~~achieved diluted earnings per share of $0.88 for the third quarter.

Our five focused go-to-market strategies and our vertical manufacturing supply chain are driving growth across all ~~of our businesses and pre-tax profitability in what is seasonally our most challenging period, provide solid momentum as~~the channels we move further into our fiscal year 2018. That momentum, coupled with our recent efforts to rationalize our business, should have us well-positioned to take advantage of opportunities wherever and whenever they may arise.

Art Gun’s customer service focus and execution during the quarter facilitated both a return to its traditional high-growth trajectory as well as record sales and profitability. Its new production facility, which fully integrates with our Activewear business’s vertical manufacturing platform, should serve as a valuable differentiator for Art Gun in the digital print and fulfillment marketplace. We believe that the flexibility provided by the new facility, along with capacity expansions and new business opportunities, will enable Art Gun to continue to gain market share and further increase profitability as the year unfolds.

We are highly encouraged by the double-digit sales growth seen on both sides of our Activewear business during the quarter. The improving conditions in the retail licensing channel are a welcome contrast to last year's customer de-stocking activity. We expect the market penetration of Catalog's higher-marginserve. Our Delta Platinum line and other fashion basics products to continue at its rapid pace as the year progresses. Moreover, we are optimistic that the successes our FunTees business has achieved in diversifying its customer base and leveraging its design and manufacturing sophistication will continue.

Sales in our Salt Life business accelerated during the quarter through product expansions and additional doors. Sales on the www.saltlife.com ecommerce site continue to grow significantly and Salt Life's new retail store in Daytona Beach, Florida, is performing extremely well. The brand is expanding geographically both through its own direct-to-consumer strategies as well as additional doors with new retail accounts, giving Salt Life strong momentum heading into the latter half of the fiscal year.

~~Soffe’s strong~~Group segment saw 3% sales growth over the prior year across our diversified channels of distribution and as a result of providing additional value-added services. Driven in large part by increased customer demand, our Activewear business, comprised of Delta Direct and Global Brands & Retail Direct business, saw sales increase over the prior year third quarter. Our digital print business, DTG2Go, also saw sales growth during the third quarter of fiscal 2022.

The Salt Life segment exceeded the prior year third quarter with ~~successes in~~sales increasing by 30%. Our wholesale channel continued to demonstrate strength, and the military and strategic sporting goods channels provides good velocity in that business moving forward. Soffe’s growth was augmented by significant gross margin expansion and profitability improvement during the quarter. Soffe has many ongoing initiatives to continue its growth and further bolster its top and bottom-line performance in the coming quarters. In addition, Soffe's latestSalt Life branded retail ~~location, recently opened~~footprint was further expanded with the opening of new locations in ~~Jacksonville, North Carolina,~~

~~should resonate well with military consumers in that market~~Foley, Alabama; Hilton Head, South Carolina; Boca Raton, Florida; and ~~serve as another valuable consumer touch-point in its omni-channel~~Rehoboth Beach, Delaware, bringing the number of retail doors to 20 locations across seven states. Our recent Salt Life retail store openings have continued to validate the strength of the Salt Life brand and our go-to-market strategy.

The increases in demand for apparel during the quarter and the successes we are seeing from our sales and marketing efforts, operational improvements and cost-control initiatives are very encouraging. While we expect the markets to generally remain challenging, particularly for traditional retailers, we are pleased with what we are seeing across our businesses as we move through the year.

Results of Operations

Financial results included herein have been presented on a generally accepted accounting principles ("GAAP") basis and, in certain limited instances, we have presented our financial results on a GAAP and non-GAAP (“adjusted”) basis, which is further described in the sections entitled “Non-GAAP Financial Measures.”

Net sales were $126.9 million in the third quarter of fiscal 2022, an increase of 7% compared to the prior year third quarter net sales of $118.7 million.

Net sales in the Delta Group segment grew 3% to $106.0 million in the third quarter of fiscal 2022 compared to $102.6 million in the prior year third quarter. Delta Direct, Retail Direct and Global Brands grew 3% from prior year. Net sales for the first nine months of 2022 were $323.3 million, a 14% increase over the prior year.

The Salt Life Group segment third quarter of fiscal ~~year 2018 were $90.3~~2022 revenue grew 30% to $20.9 million compared to ~~$85.3~~$16.1 million in the prior year ~~period. After adjusting for~~third quarter. The segment’s growth was primarily driven by growth in our wholesale channel and retail stores. For the ~~$9.4~~first nine months of 2022, net sales were $46.0 million, ~~of sales~~up over $8.4 million from ~~the since-divested Junkfood business in~~ the prior year ~~quarter, first quarter sales grew 19% year-over-year. Each business unit achieved double-digit sales growth over the prior year quarter.~~

Our direct-to-consumer retail and ecommerce sales represented 7.1% of total revenues for the first quarter of 2018. Overall growth in our direct-to-consumer retail and ecommerce sales for the quarter was only 1.1%, as the prior year sales included ecommerce and retailnet sales of the since-divested Junkfood business. Excluding these sales from the since-divested Junkfood business in the prior year quarter, sales growth in our direct-to-consumer retail and ecommerce channels was 9.7% year-over-year driven from increased sales on our Salt Life, Soffe, and Coast consumer ecommerce sites and in our new retail stores.

$37.6 million.

Gross margins were ~~18.1%~~24.2% for the ~~first~~third quarter ~~compared with 20.6% in the prior year period. Basics segment gross margins declined 270~~of fiscal 2022, declining 130 basis points from the prior year third quarter ~~primarily from higher cost raw materials partially offset by the benefits~~gross margin of ~~the manufacturing realignment. Branded~~25.5%.

The Delta Group segment gross margins were 19.1% for the third quarter of fiscal 2022, a decline of 260 basis points from the prior year third quarter margins of 21.7%. Gross margins were primarily impacted by increased input costs. Margins for the first nine months of fiscal 2022 declined from 20.2% in prior year to 19.6% of sales in the current year.

The Salt Life Group segment gross margins improved to ~~37.2%~~50.2% in the third quarter of fiscal 2022, an improvement of 50 basis points compared to ~~31.1%~~49.7% in the prior year ~~period.~~

third quarter resulting from a favorable mix of sales, including increased Salt Life branded retail store sales. For the first nine months of fiscal year 2022, gross margins grew to 51.6% of sales from 47.9% in prior year.

Selling, general, and administrative expenses ("SG&A") were ~~$15.0~~$22.4 million in the third quarter of fiscal 2022, or ~~16.6%~~17.7% of sales, ~~for the quarter ended December 30, 2017,~~ compared to ~~17.3~~$19.9 million, ~~or 20.3%~~16.8% of sales, in the prior year ~~period. When adjusted~~third quarter. The increase in SG&A expenses of $2.5 million compared to ~~exclude results~~prior year third quarter was primarily driven by higher variable selling and distribution costs. SG&A expenses for the first nine months of 2022 were $59.6 million, or 16.1% of sales, compared to $53.0 million, or 16.5% of sales, in the ~~since-divested Junkfood business~~prior year.

Other income for the 2022 and 2021 third fiscal quarters includes profits related to our Green Valley Industrial Park equity method investment. Other income for the third fiscal quarter of 2022 also includes a valuation change in our contingent consideration liabilities of $0.8 million. The first nine months of 2022 other income was $1.9 million, including profits related to our Green Valley Industrial Park equity method investment and a valuation adjustment to our contingent consideration. Other expense in the first nine months of 2021 include $1.9 million of expenses related to the impact of two hurricanes that disrupted our Honduran manufacturing facilities in the December 2020 quarter in addition to $0.4 million of long-lived asset impairment charges as the result of a strategic decision in the June 2021 quarter to exit branded Soffe retail stores.

Operating profit in the third quarter of fiscal 2022 was $9.3 million. This is a decrease of 22% over the prior year third fiscal quarter of $11.9 million of operating profit. For the first nine months of fiscal year 2022, operating income was $29.5 million.

The Delta Group segment had operating income of $10.7 million in the third fiscal quarter of 2022, or 10.1% of net sales, compared to $13.9 million, or 13.5% of net sales, in the prior year ~~quarter, such expenses were $14.2~~third quarter. The decrease in operating profit was driven by declining gross margins. Operating income was $33.6 million, or ~~18.7%~~10.4% of sales, ~~with~~for the ~~quarter's increase~~first nine months of ~~$0.8 million primarily due to variable selling costs on significantly higher sales volumes.~~

The change in fair value of contingent consideration was associated with the Salt Life acquisition. Based upon our updated analysis, the fair value of this liability decreased $0.3 million in the 2018 first quarterfiscal 2022, compared to ~~a decrease~~$28.4 million, or 10.0% of ~~$0.1 million~~sales, in the prior year ~~period.~~ adjusted for $1.3 million of hurricane-related disruption costs.

The ~~change is principally due to the reduced remaining time~~Salt Life Group segment had operating income of $3.6 million in the ~~measurement period. The~~third fiscal quarter of 2022, or 17.1% of net sales, expectations for calendar year 2019 have been reduced from the sales expectations used in the valuation of contingent consideration at acquisition due to our current view of the retail environment. Our expectations are consistent with those at September 30, 2017.

~~During the first quarter we recorded $47 thousand in other income~~ compared to ~~$0.1~~$2.9 million, or 18.1% of sales, in the prior year ~~period.~~third quarter. The increase in operating profit was driven by higher sales volume and increased gross margins offset by higher selling and distribution costs. For the first nine months, operating income improved by $2.3 million to $7.0 million.

Net interest expense for the third quarters of fiscal year 2022 and 2021 was $2.0 million and $1.7 million, respectively. Net interest expense for the first ~~quarter~~nine months of ~~each~~2022 was $5.4 million compared to $5.2 million in the prior year first nine months.

Table of ~~fiscal years 2018 and 2017 was $1.3 million.~~Contents

On December 22, 2017, the Tax Cuts and Jobs Act of 2017 (the “New Tax Legislation”) was enacted. The New Tax Legislation significantly revised the U.S. corporate income tax code by, among other things, lowering federal corporate income tax rates, implementing a modified territorial tax system and imposing a repatriation tax on deemed repatriated cumulative earnings of foreign subsidiaries. During the three-month period ended December 30, 2017, we recognized provisional amounts totaling $10.6 million of tax expense. We have made reasonable estimates of the effects on our existing deferred tax balances and the one-time transition tax; however, these amounts may change as more information becomes available. We accounted for the $10.6 million provisional amount as a discrete item for tax provision purposes, recording tax expense on our best estimate of the effect of the New Tax Legislation. Excluding the effect of this discrete item, the

Our effective tax rate on operations for the ~~three-month~~nine-month period ended ~~December 30, 2017,~~June 2022 was ~~(46.4%)~~17.2%. ~~This tax benefit relates to stock option excess benefits as a result from our adoption of ASU 2016-09.~~ This compares to an effective ~~income~~ tax rate of ~~27.0%~~23.1% for the same period in the prior year and ~~5.9%~~21.9 % for the full fiscal year ~~ended September 30, 2017.~~

We benefit from having income in foreign jurisdictions that are either exempt from income taxes or have tax rates that are lower than those in the United States. 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 September 29, 2018, excluding the discrete tax expense associated with the New Tax Legislation, is currently expected to be approximately 12-13%. The change in the federal statutory rate from 34% to 21% as a result of the New Tax Legislation is effective at the beginning of our fiscal year. As such, the blended federal statutory tax rate for the fiscal year is anticipated to be approximately 24.3%. However, changes2021. Changes in the mix of U.S. taxable income compared to profits in tax-free or lower-tax jurisdictions ~~can~~ have ~~a significant impact on~~driven this change in our ~~overall~~ effective tax rate. ~~In addition, the impact of the New Tax Legislation may differ from our initial provisional estimates, possibly materially, due~~

Net income attributable to ~~among other things, changes in interpretations and assumptions made regarding the New Tax Legislation, guidance that may be issued and actions we may take as a result of the New Tax Legislation.~~

~~Largely impacted by the New Tax Legislation, we experienced a net loss~~shareholders for the third fiscal quarter of ~~$10.0~~2022 were $6.2 million, or ~~$1.37~~$0.88 per diluted share, compared to ~~a prior year net loss of $0.6~~$8.2 million, or ~~$0.08~~$1.14 per diluted ~~share. Adjusting~~share, in the prior year. Net income attributable to shareholders for the ~~discrete impact~~first nine months of ~~the new tax legislation, our net income~~2022 was ~~approximately $0.08~~$20.0 million, or $2.84 per diluted ~~share.~~

~~At December 30, 2017, accounts~~share, compared to $13.4 million, or $1.90 per diluted share, in the prior year.

Accounts receivable were ~~$51.0~~$68.4 million at June 2022, compared to ~~$48.2 million at December 31, 2016, and $47.6~~$67.0 million as of September ~~30, 2017.~~2021. Days sales outstanding ("DSO") ~~decreased from 53~~as of June 2022 were 49 days ~~in the prior year~~compared to ~~48 days, and was in line with the 49~~

47 days at September ~~30, 2017.~~2021.

Net inventory as of June 2022 was $227.7 million, an increase of $66.0 million from September 2021 and $75.4 million from June 2021. The ~~improvement in DSO from~~inventory value is higher than both the prior third quarter and the fiscal year ~~results~~end as a result of higher input costs impacting materials, transportation and labor combined with an increase in units on hand.

Total net debt, including capital lease financing and cash on hand, was $162.4 million at June 2022, an increase of $40.6 million from ~~the since-divested Junkfood business, which carried higher DSO than~~September 2021. Cash on hand and availability under our ~~other business units.~~

~~Inventory levels remained flat with those~~U.S. revolving credit facility totaled $30.8 million at June 2022, a $14.6 million decrease from September ~~30, 2017, at $174.5 million as of December 30, 2017. Strong sales~~2021 principally driven by investments in the ~~quarter offset the normal seasonal build in inventory that occurs in the December quarter.~~

~~Capital expenditures were $4.9 million during the first quarter of fiscal year 2018. Capital expenditures primarily related~~business to ~~machinery~~support working capital needs and equipment as well as investments in our direct-to-consumer business, including our retail stores, and enhancements to our information technology systems. Depreciation and amortization expense, including non-cash compensation, was $2.9 million for the first quarter of fiscal year 2018.

~~Total debt at December 30, 2017, was $106.0 million compared with $119.8 million at December 31, 2016. The decrease from the prior year was primarily~~increased input costs due to the $27.0 million in proceeds received on the sale of the Junkfood business partially offset by borrowings to fund increased stock repurchases and improvement in the timing of payments made to suppliers.

~~Branded Segment~~

Sales in the branded segment were $17.2 million compared to $24.5 million in the prior year quarter, which included $9.4 million of sales in the since-divested Junkfood business. Excluding Junkfood sales in the prior year quarter, branded segment sales increased 14% year-over-year. Salt Life continued its growth trend with 12% sales growth primarily due to expanded product categories. Soffe achieved 28% sales growth over the prior year with a strong increase in military sales and success with strategic sporting goods retailers.

Operating income in the branded segment for the first quarter was $0.5 million, an improvement of $1.5 million compared to the prior year quarter. When adjusted for the since-divested Junkfood business, operating income increased by $1.1 million.

~~Basics Segment~~

Net sales in our basics segment grew 20.3% in the first quarter, to $73.2 million from $60.8 million in the prior year period. Activewear achieved strong sales growth of 20% over the prior year period, with growth in both Delta Catalog products and FunTees private label products. In our Catalog business, sales increased due to increased demand in the retail licensing channel coupled with 73% growth in our fashion basics products. FunTees also continued its strong growth, with customers requesting earlier delivery of products. Sales at Art Gun grew 26% over the prior year quarter primarily from increased volume with existing customers as well as new customer launches .

Basics segment operating income decreased to $4.2 million in the first quarter of 2018 from $4.7 million in the prior year quarter, driven from higher cost inventory being sold due to the higher raw material prices, partially offset by the benefits of the manufacturing realignment.

inflationary pressures.

Non-GAAP Financial Measures

We provide all information required in accordance with U.S. GAAP, but we believe that evaluating our ongoing operating results may be difficult if limited to reviewing only U.S. GAAP financial measures. In an effort to provide investors with additional information regarding ~~the Company's~~our results, we also provide non-GAAP information that management believes is useful to investors. We discuss ~~adjusted~~operating income, ~~adjusted~~net income and earnings per diluted share ~~adjusted gross margin, adjusted selling general and administrative expenses~~ performance measures that are, for comparison purposes, adjusted to eliminate items or results stemming from discrete events. We do this because management uses these measures in evaluating ~~the Company's~~our underlying performance on a consistent basis across periods. We also believe these measures are frequently used by securities analysts, investors and other interested parties in the evaluation of ~~the Company's~~our ongoing performance. These non-GAAP measures have ~~limitations~~imitations as analytical tools, and securities analysts, investors and other interested parties should not consider any of these non-GAAP measures in isolation or as a substitute for analysis ~~of the Company's~~or our results as reported under U.S. GAAP. These non-GAAP measures may not be comparable to similarly titled measures used by other companies.

Liquidity and Capital Resources

~~Our current primary cash needs are for working capital, capital expenditures, and debt service, as well as to fund share repurchases under our Stock Repurchase Program.~~

Operating Cash Flows

Operating activities ~~used $7.8~~resulted in a cash usage of $13.4 million ~~and $0.5~~for the nine months ended June 2022 compared to $11.0 million of cash provided in the prior year. The decrease in cash provided in operating cash flows in the ~~first three months of fiscal years 2018 and 2017, respectively. The increased use of cash from the prior~~current year isare due to a build in inventory as a result of increased input costs and manufacturing output. This was partially offset by increased earnings in the business and change in timing of payments to suppliers ~~to improve timing of payments and higher receivables from our customers from~~in the ~~higher sales compared to the prior year. This is offset partially by the prior year having a larger seasonal inventory build.~~

current period.

Investing Cash Flows

~~Capital~~

Cash outflows for capital expenditures were $10.9 million during the first ~~three~~nine months of ~~fiscal year 2018 were $2.2 million~~2022 compared to ~~$1.9~~$1.7 million in the same period ~~last~~in the prior year. ~~Capital expenditures in both periods primarily related to machinery and equipment, along with investments in our direct-to-consumer initiatives and information technology systems. There~~During the nine-months ended June 2022, there were ~~$3.1~~$10.4 million inof capital expenditures financed under a capital lease ~~arrangement and~~

$0.1 million in unpaid expenditures in the first three months of fiscal 2018. During the first three months of fiscal year 2018, investing cash flows also included $1.0 million in proceeds received from the promissory note related to the sale of our Junkfood business. See Note D—Divestitures, for further information on this transaction.

arrangement. We anticipate our fiscal ~~year 2018~~2022 capital expenditures, including those financed under capital leases, to be approximately ~~$13~~$20 million for fiscal 2022 and to be focused primarily on our distribution expansion, digital print equipment, manufacturing equipment, ~~along with~~ information technology, and direct-to-consumer ~~enhancements .~~

investments, including additional Salt Life retail store openings.

Financing Activities

During the ~~three~~nine months ended ~~December 30, 2017,~~June 2022, cash provided by financing activities was ~~$9.0~~$16.2 million compared to $2.4 million provided by financing activities for the three months ended December 31, 2016. The cash provided by our financing activities during the first three months of fiscal year 2018 was usedand primarily related to fund our operating activities, ~~as well as share repurchases.~~

~~Based on our current expectations, we believe that our credit facility should be sufficient to satisfy our foreseeable~~ working capital needs, and ~~that cash flow generated~~certain capital investments offset by scheduled loan principal payments.

Future Liquidity and Capital Resources

See Note F – Debt to the Condensed Consolidated Financial Statements for discussion of our ~~operations and funds available under~~various financing arrangements, including the terms of our revolving U.S. credit facility.

Our credit facility, ~~should be sufficient~~as well as cash flows from operations, are intended to ~~service our debt payment requirements, to satisfy~~fund our day-to-day working capital needs, and along with capital lease financing arrangements, to fund our planned capital expenditures. ~~Any~~However, any material deterioration in our results of operations, ~~however,~~ may result in the loss of our ability to borrow under our U.S. revolving credit facility and to issue letters of credit to suppliers, or may cause the borrowing availability under that facility to be insufficient for our needs. Availability under our credit facility is primarily a function of the levels of our accounts receivable and inventory. A significant deterioration in our accounts receivable or inventory levels could restrict our ability to borrow additional funds or service our indebtedness. Additionally, a significant deterioration in our business results could cause our availability to fall below minimum thresholds, thereby requiring us to maintain the minimum FCCR specified in our credit agreement, which we may not be able to maintain. Moreover, our credit facility includes a financial covenant that if the availability under our credit facility falls below the amounts specified in our U.S. credit agreement, our fixed charge coverage ratio (FCCR) for the preceding 12-month period must not be less than ~~1.1 to~~ 1.0. While our availability at ~~December 30, 2017,~~June 2022 was above the minimum thresholds specified in our credit agreement, a significant deterioration in our business could cause our availability to fall below such thresholds, thereby requiring us to maintain the minimum FCCR specified in our credit agreement.

~~Purchases By Delta Apparel Of Its Own Shares~~

~~During~~

Share Repurchase Program

In the ~~three months ended December 30, 2017, we~~third quarter of fiscal 2022 under the previously announced share repurchase program, the Company purchased ~~145,124~~33,934 shares for $1.0 million, bringing the total amount repurchased to $56.4 million during the life of ~~our common stock for an aggregate amount~~the program. At the end of ~~$3.0 million (see Note N-Repurchase~~the third quarter of ~~Common Stock). As of December 30, 2017, there was $8.3~~fiscal 2022, the Company had $3.6 million of remaining repurchase ~~authorization remaining~~capacity under our Stock Repurchase Program. We evaluate current leverage, working capital requirements, our free cash flow outlook, stock valuation and future business opportunities to determine when we believe the repurchaseits existing authorization.

Table of ~~our stock is a sound investment opportunity that we can pursue without sacrificing future growth plans.~~

Contents

Critical Accounting Policies

Our discussion and analysis of our financial condition and results of operations are based upon our Condensed Consolidated Financial Statements, which were prepared in accordance with U.S. GAAP. The preparation of our Condensed Consolidated Financial Statements requires us to make estimates and judgments that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. We base our estimates and judgments on historical experience and various other factors that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. The most significant estimates and assumptions relate to revenue recognition, accounts receivable and related reserves, inventory and related reserves, the carrying value of goodwill, and the accounting for income taxes.

A detailed discussion of critical accounting policies is contained in the Significant Accounting Policies included in Note 2 to the Audited Consolidated Financial Statements included in our Annual Report on Form 10-K for ~~the~~ fiscal ~~year ended September 30, 2017,~~2021, and there have been no changes in those policies since the filing of that Annual Report on Form 10-K with the ~~SEC.~~

SEC, except as disclosed in Note C—New Accounting Standards related to the adoption of the cloud computing standard.

Environmental and Other Regulatory Matters

We are subject to various federal, state and local environmental laws and regulations concerning, among other things, wastewater discharges, storm water flows, air emissions and solid waste disposal. The labeling, distribution, importation, marketing, and sale of our products are subject to extensive regulation by various federal agencies, including the Federal Trade Commission, Consumer Product Safety Commission and state attorneys general in the United States. Our ~~plants generate small quantities of hazardous waste, which~~international operations are ~~either recycled or disposed of off-site.~~

also subject to compliance with the U.S. Foreign Corrupt Practices Act (the “FCPA”) and other anti-bribery laws applicable to our operations.

The environmental and other regulations applicable to our business are becoming increasingly stringent, and we incur capital and other expenditures annually to achieve compliance with these environmental ~~standards.~~standards and regulations. We currently do not expect that the amount of expenditures required to comply with these environmental ~~laws~~standards or other regulatory matters will have a material adverse ~~affect~~effect on our operations, financial condition or liquidity. There can be no assurance, however, that future changes in federal, state, or local regulations, interpretations of existing regulations or the discovery of currently unknown problems or conditions will not require substantial additional expenditures. Similarly, while we believe that we are currently in ~~material~~ compliance with all applicable environmental and other regulatory requirements, the extent of our liability, if any, for past failures to

comply with laws, regulations and permits applicable to our operations cannot be determined and could have a material adverse effect on our operations, financial condition and liquidity.

~~Item 3. Quantitative and Qualitative Disclosures About Market Risk~~

~~Commodity Risk Sensitivity~~

We have a supply agreement with Parkdale Mills, Inc. and Parkdale America, LLC (collectively "Parkdale") to supply our yarn requirements until December 31, 2018. Under the supply agreement, we purchase from Parkdale all of our yarn requirements for use in our manufacturing operations, excluding yarns that Parkdale does not manufacture or cannot manufacture due to temporary capacity constraints. The purchase price of yarn is based upon the cost of cotton plus a fixed conversion cost.Thus, we are subject to the commodity risk of cotton prices and cotton price movements, which could result in unfavorable yarn pricing for us. We fix the cotton prices as a component of the purchase price of yarn, pursuant to the supply agreement, in advance of the shipment of finished yarn from Parkdale. Prices are set according to prevailing prices, as reported by the New York Cotton Exchange, at the time we elect to fix specific cotton prices.

~~Yarn with respect to which we have fixed cotton prices at~~ ~~December 30, 2017, was valued at $3.3 million, and is scheduled for delivery between January 2018 and March 2018. At~~ ~~December 30, 2017~~, a 10% decline in the market price of the cotton covered by our fixed price yarn would have had a negative impact of approximately $0.2 million on the value of the yarn. This compares to what would have been a negative impact of $0.5 million at our 2017 fiscal year-end based on the yarn with fixed cotton prices at September 30, 2017. The impact of a 10% decline in the market price of the cotton covered by our fixed price yarn would have been lower at ~~December 30, 2017, than at September 30, 2017, due to lower commitments at~~ ~~December 30, 2017, compared to September 30, 2017, combined with lower cotton costs.~~

We may use derivatives, including cotton option contracts, to manage our exposure to movements in commodity prices. We do not designate our options as hedge instruments upon inception. Accordingly, we mark to market changes in the fair market value of the options in cost of goods sold in our Condensed Consolidated Statements of Operations. See Note L—Derivatives and Fair Value Measurements, for further discussion on derivatives and fair value measurements.

If Parkdale’s operations are disrupted and it is not able to provide us with our yarn requirements, we may need to obtain yarn from alternative sources. Although alternative sources are presently available, we may not be able to enter into short-term arrangements with substitute suppliers on terms as favorable as our current terms with Parkdale. ~~In addition, the cotton futures we have fixed with Parkdale may not be transferable to alternative yarn suppliers.~~ ~~Because there can be no assurance that we would be able to pass along the higher cost of yarn to our customers, this could have a material adverse effect on our results of operations.~~

~~Interest Rate Sensitivity~~

~~Our U.S. revolving credit facility provides that the outstanding amounts owed shall bear interest at variable rates. If the amount of outstanding floating rate indebtedness at~~ ~~December 30, 2017, under our U.S. revolving credit facility had been outstanding during the entire three-month period ended~~ ~~December 30, 2017~~, and the interest rate on this outstanding indebtedness was increased by 100 basis points, our expense would have increased by approximately $0.2 million, or 13.1% of actual interest expense, during the quarter. This compares to an increase of $0.5 million, or 10.9%, for the 2017 fiscal year based on the outstanding floating rate indebtedness at September 30, 2017, or an average of $0.1 million per quarter. The dollar amount, as well as the percentage, of the increase in interest expense is higher as of December 30, 2017, primarily due to the higher floating rate debt level as of December 30, 2017, compared to September 30, 2017. The actual increase in interest expense resulting from a change in interest rates would depend on the magnitude of the increase in rates and the average principal balance of floating rate indebtedness.

~~Derivatives~~

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 as described in Note L—Derivatives and Fair Value Measurements.

~~Tax Reform~~

We are subject to income taxes in both the United States and various foreign jurisdictions. Governments in the jurisdictions in which we operate implement changes to tax laws and regulations from time to time. Any changes in corporate income tax laws, such as the recently-enacted tax reform legislation in the United States, changes relating to transfer pricing or further changes regarding the repatriation of capital, and any changes in the interpretation of existing tax laws and regulations could lead to increases in overall tax liability and adversely affect our financial position and results of operations. See Note K—Income Taxes, for further discussion on the New Tax Legislation that was enacted on December 22, 2017.


Item 4.	Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Disclosure controls and procedures are controls and other procedures that are designed to reasonably assure that information required to be disclosed in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s requirements. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information we are required to disclose in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures as of ~~December 30, 2017~~,the end of period covered by this quarterly report ("the Evaluation Date") and, based on their evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that these controls and procedures were effective atas of the ~~evaluation date.~~

Evaluation Date.
Changes in Internal Control Over Financial Reporting

There ~~was~~were no ~~change~~changes during the ~~first~~June 2022 quarter ~~of fiscal year 2018~~ that ~~has~~have materially affected, or isare reasonably likely to materially affect, our internal control over financial reporting.

PART II.
OTHER INFORMATION

Item 1.
Legal Proceedings

See Note M—Legal Proceedings, in Part I, Item 1, which is incorporated herein by reference.

Item 1A.

Risk Factors

None

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

(c) Repurchases of Common Stock

See Note N—Repurchase of Common Stock, Part I, in Item 1, which is incorporated herein by reference.

Item 5.

Other Information

None

Table of Contents

Item 6.

Exhibits

Exhibits

10.1		Employment Agreement between Delta Apparel, Inc and Matthew J. Miller dated April 4, 2022: Incorporated by reference to Exhibit 10.1 to the Company's 10-Q filed on April 2, 2022.
~~Item 2.~~	~~Unregistered Sales of Equity Securities and Use of Proceeds~~

~~(c) Repurchases of Common Stock~~

~~See Note N—Repurchase of Common Stock, and Note F—Debt, in Item 1, which are incorporated herein by reference.~~


~~Item 6.~~10.2	~~Exhibits~~

~~Exhibits~~

Employment Agreement between Delta Apparel, Inc and Jeffrey N. Stillwell dated January 1, 2022.

31.1		Certification of the Chief Executive Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2		Certification of the Chief Financial Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1		Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2		Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS		Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

101.SCH		Inline XBRL Taxonomy Extension Schema

101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase

101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase

101.LAB		Inline XBRL Taxonomy Extension Label Linkbase

101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase

104		Cover Page Interactive Data File - (formatted as Inline XBRL and contained in Exhibit 101)

Table of Contents

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


			DELTA APPAREL, INC. (Registrant)
			~~DELTA APPAREL, INC.~~ ~~(Registrant)~~
Date	~~February 5, 2018~~ August 4, 2022	By:	/s/ ~~Deborah H. Merrill~~ Simone Walsh
			~~Deborah H. Merrill~~ Simone Walsh Chief Financial Officer ~~and President, Delta Basics~~

Georgia		58-2508794

~~GEORGIA~~		~~58-2508794~~
(State or Other Jurisdiction of		(I.R.S. Employer
Incorporation or Organization)		Identification No.)

~~322 South Main Street~~ 2750 Premier Parkway, Suite 100
~~Greenville, SC~~ Duluth, Georgia		~~29601~~ 30097
(Address of principal executive offices)		(Zip Code)

Title of each class		Trading Symbol		Name of each exchange on which registered
Common Stock, par value $0.01		DLA		NYSE American



Large accelerated filer o ☐	Accelerated filer þ ☑	Non-accelerated filer o ☐	Smaller reporting company o ☑	Emerging growth company o ☐
		~~(Do not check if a smaller reporting company)~~

		Page
PART I.	Financial Information

Item 1.	Financial Statements (unaudited):

	Condensed Consolidated Balance Sheets — June 2022 and September 2021	3

	Condensed Consolidated Statements of Operations — Three and Nine months ended June 2022 and June 2021	4

	Condensed Consolidated Statements of Comprehensive Income — Three and Nine months ended June 2022 and June 2021	5

	Condensed Consolidated Statements of Shareholders' Equity — Three and Nine months ended June 2022 and June 2021	6

	Condensed Consolidated Statements of Cash Flows — Nine months ended June 2022 and June 2021	7

	Notes to Condensed Consolidated Financial Statements (unaudited)	8
	Note A—Basis of Presentation and Description of Business	8
	Note B—Accounting Policies

~~Exhibits~~
~~EX-31.1~~
~~EX-31.2~~
~~EX-32.1~~
~~EX-32.2~~


☑
þ	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


		9
	Note C—New Accounting Standards	~~Page~~9
~~PART I.~~	~~Financial Information~~Note D—Revenue Recognition	10
	Note E—Inventories	11
	Note F—Debt	11
	Note G—Selling, General and Administrative Expense	11
	Note H—Stock-Based Compensation	12
	Note I—Purchase Contracts	12
	Note J—Business Segments	13
	Note K—Income Taxes	14
	Note L—Derivatives and Fair Value Measurements	14
	Note M—Legal Proceedings	15
	Note N—Repurchase of Common Stock	15
	Note O—Goodwill and Intangible Assets	16
	Note P—Subsequent Events	16

~~Item 1.~~	~~Financial Statements:~~

	~~Condensed Consolidated Balance Sheets — December 30, 2017, and September 30, 2017 (unaudited)~~	3

	~~Condensed Consolidated Statements of Operations — Three months ended December 30, 2017, and December 31, 2016 (unaudited)~~	4

	~~Condensed Consolidated Statements of Comprehensive Loss — Three months ended December 30, 2017, and December 31, 2016 (unaudited)~~	5

	~~Condensed Consolidated Statements of Cash Flows — Three months ended December 30, 2017, and December 31, 2016 (unaudited)~~	6

	~~Notes to Condensed Consolidated Financial Statements (unaudited)~~	7

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	1517

Item 3. 4.	~~Quantitative~~Controls and ~~Qualitative Disclosures About Market Risk~~Procedures	20

PART II.	Other Information

Item 1.	Legal Proceedings	20

Item 1A.	Risk Factors	20

~~Item 4.~~	~~Controls and Procedures~~	21

~~PART II.~~	~~Other Information~~

~~Item 1.~~	~~Legal Proceedings~~	21

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	2120

Item 5.	Other Information	20

Item 6.	Exhibits	21

Signatures		22

Exhibits
EX-10.1
~~Item 6.~~ EX-31.1		~~Exhibits~~	21
EX-31.2
~~Signatures~~ EX-32.1			21
EX-32.2



	December 30, 2017			September 30, 2017
Assets
Current assets:
Cash and cash equivalents	$	603		$	572
Accounts receivable, less allowances of $1,502 and $1,433, respectively	51,010			47,557
Income tax receivable	404			352
Inventories, net	174,505			174,551
Note receivable	1,031			2,016
Prepaid expenses and other current assets	3,885			2,646
Total current assets	231,438			227,694

Property, plant and equipment, net of accumulated depreciation of $69,320 and $67,780, respectively	45,449			42,706
Goodwill	19,917			19,917
Intangibles, net	15,925			16,151
Deferred income taxes	2,656			5,002
Other assets	6,277			6,332
Total assets	$	321,662		$	317,802

Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable	$	45,597		$	47,183
Accrued expenses	13,503			17,704
Current portion of long-term debt	6,600			7,548
Total current liabilities	65,700			72,435

Long-term debt, less current maturities	99,360			85,306
Income tax payable	8,058			—
Other liabilities	4,734			2,574
Contingent consideration	1,300			1,600
Total liabilities	$	179,152		$	161,915

Shareholders’ equity:
Preferred stock—$0.01 par value, 2,000,000 shares authorized, none issued and outstanding	—			—
Common stock —$0.01 par value, 15,000,000 shares authorized, 9,646,972 shares issued, and 7,227,374 and 7,300,297 shares outstanding as of December 30, 2017, and September 30, 2017, respectively	96			96
Additional paid-in capital	59,856			61,065
Retained earnings	117,402			127,358
Accumulated other comprehensive income (loss)	51			(35		)
Treasury stock —2,419,598 and 2,346,675 shares as of December 30, 2017, and September 30, 2016, respectively	(34,895		)	(32,597		)
Total shareholders’ equity	142,510			155,887
Total liabilities and shareholders' equity	$	321,662		$	317,802



	Three Months Ended
	December 30, 2017			December 31, 2016
Net sales	$	90,342		$	85,335
Cost of goods sold	73,972			67,777
Gross profit	16,370			17,558

Selling, general and administrative expenses	14,979			17,311
Change in fair value of contingent consideration	(300		)	(100		)
Other income, net	(47		)	(122		)
Operating income	1,738			469

Interest expense, net	1,334			1,301
Income (loss) before provision for income taxes	404			(832		)
Provision for (benefit from) income taxes	10,356			(225		)
Net loss	$	(9,952	)	$	(607	)

Basic loss per share	$	(1.37	)	$	(0.08	)
Diluted loss per share	$	(1.37	)	$	(0.08	)

Weighted average number of shares outstanding	7,268			7,598
Dilutive effect of stock options and awards	—			—
Weighted average number of shares assuming dilution	7,268			7,598



	December 30, 2017
Revolving credit facility established March 2011, interest at 8.0% due March 2019	$	4,804
Term loan established March 2011, interest at 7.0%, payable monthly with a seven-year term	243
Term loan established November 2014, interest at 7.5%, payable monthly with a six-year term	1,850
Term loan established June 2016, interest at 8.0%, payable monthly with a six-year term	1,286
Term loan established September 2017, interest at 8.0%, payable monthly with a six-year term	3,817



Yarn	$	3,252
Finished fabric	2,271
Finished products	21,995
	$	27,518



	Three Months Ended
	December 30, 2017		December 31, 2016
Segment net sales:
Basics	$	73,176	$	60,838
Branded	17,166		24,497
Total net sales	$	90,342	$	85,335

Segment operating income (loss):
Basics	$	4,189	$	4,684
Branded	458		(1,000		)
Total segment operating income	$	4,647	$	3,684



	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
December 30, 2017	$	83		—			$	83		—
September 30, 2017	(56		)	—			(56		)	—

Cotton Options
December 30, 2017	$	(1	)	$	(1	)	—			—
September 30, 2017	(125		)	(125		)	—			—

Contingent Consideration
December 30, 2017	$	(1,300	)	—			—			$	(1,300	)
September 30, 2017	(1,600		)	—			—			(1,600		)



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
October 1, 2017 to November 4, 2017	29,081	$21.04	29,081		$10.7	million
November 5, 2017 to December 2, 2017	46,444	20.67	46,444	9.7		million
December 3, 2017 to December 30, 2017	69,599	20.56	69,599	8.3		million
Total	145,124	$20.69	145,124		$8.3	million


PART 1.	FINANCIAL INFORMATION