Delta Apparel, Inc. Investor Presentation October 2019
Forward Looking Statements This presentation contains “Forward Looking” statements which reflect the Company's ▲ current expectations regarding future events and which involve risks and uncertainties. Although we believe that our expectations are based on reasonable assumptions, actual results could differ materially from those projected in this presentation. Please refer to the written materials made available to you in connection with this ▲ presentation as well as the Company’s most recent Form 10-K and other SEC filings for a more detailed discussion of some of the risks facing the Company that could affect the forward looking statements in this presentation. Finally, please note that any “Forward Looking” statements are made only as of the ▲ date of this presentation and the Company does not commit to update or revise these statements even if it becomes apparent that any projected results will not be realized. Delta Apparel, Inc. Investor Presentation | 2
Delta Apparel, Inc. SSI Acquired October 2018 Public Company June 2000 Coast Apparel The Cotton Exchange Salt Life Acquired Exclusive License Acquired August 2016 July 2010 December 2010 Offshore Textiles FunTees The Game DTG2GO Acquired Ceiba Textile Divestiture Acquired August 2006 October 2006 March 2015 March 2018 M. J. Soffe Acquired October 2003 2000 | 2001 | 2002 | 2003 | 2004 | 2005 | 2006 | 2007 | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 STRATEGIC INITIATIVES MANUFACTURING Intensity Athletics Salt Life REALIGNMENT Acquired Acquired October 2005 .biz August 2013 Launch of Junkfood Clothing Co. Art Gun, LLC The Game Salt Life Acquired Acquired Junkfood Clothing Co. Acquired Beer Divestiture August 2005 December 2009 March 2009 June 2018 March 2017 Delta Apparel, Inc. Investor Presentation | 3
Delta Apparel, Inc. DELTA GROUP SALT LIFE GROUP ~$385M * ~$45M * A CTIVEWEAR MANUFACTURING PLATFORM * Approximate for FY19 Delta Apparel, Inc. Investor Presentation | 4
Delta Apparel, Inc. – Sales Growth ~$428 - $430 $396 $119 $370 $112 $104 - $106 $104 $103 $102 $100 $98 $93 $91 $90 $76 Qtr 1 Qtr 2 Qtr 3 Qtr 4 Annual FY17 * FY18 FY19 (in millions) * Excludes $9.4 million of sales from the since-divested Junkfood Clothing Company business Delta Apparel, Inc. Investor Presentation | 5
Growth Initiatives ▲ Strong core business, Delta Activewear, continues to gain market share and expand customer base ▲ DTG2Go’s cutting edge technology is revolutionizing the changing retail platform with digital print and fulfillment capabilities ▲ Significant growth potential with lifestyle brand, Salt Life ▲ Double-digit growth across our eCommerce sites; remains our most profitable sales channel Delta Apparel, Inc. Investor Presentation | 6
Delta Activewear C ATALOG C ORE B ASICS C ATALOG F ASHION B ASICS F UN T EES P RIVATE L ABEL 7
Strong Core Business, Delta Activewear ▲ Consistent 5% Sales CAGR over eighteen years ▲ Generating ~ 10% EBITDA margins ~ $284 ~ $180 $115 FY00 FY08 FY18 Sales (in millions) Delta Apparel, Inc. Investor Presentation | 8
Strong Core Business, Delta Activewear Strategically Expanding Margins Lowest margins Highest margins (4%) CAGR +6% CAGR ( 2yr ) +52% CAGR +1% CAGR (3yr) $150 $137 $134 $109 $102 $98 $49 $37 $14 FY16 FY18 FY19 FY16 FY18 FY19 FY16 FY18 FY19 CORE BASICS PRIVATE LABEL FASHION BASICS Sales (in millions) Delta Apparel, Inc. Investor Presentation | 9
Strong Core Business, Delta Activewear DISTRIBUTION § Clinton, TN § Columbus, OH § Cranbury, NJ Cranbury, NJ § Fayetteville, NC Columbus, OH § Lewisville, TX § Miami, FL Fayetteville, NC Clinton, TN § Opelika, AL Rowland, NC Los Angeles, CA § Los Angeles, CA Opelika, AL Lewisville, TX MANUFACTURING § Fayetteville, NC Miami, FL § Rowland, NC 1 day § Ceiba Textiles, Honduras Campeche, MX 2 day Campeche, Mexico § La Paz, El Salvador § 3-4 day San Pedro Sula, HN § San Pedro Sula, Honduras Ceiba, HN La Paz, ES Delta Apparel, Inc. Investor Presentation | 10
… Achieving 20%+ Sales CAGR Only vertical digital print supplier in the world § - Seamless fulfillment integrated with Delta garments o Fashion and core basics, fleece, shorts and athletic uniforms Industry leader in digital print and fulfillment capabilities § - Innovative technology - Polyester printing - Ability to produce over 90,000 unique prints per day State-of-the-art equipment § World class quality assurance § Speed-to-market § - Orders shipped in 24-48 hours - Worldwide shipping to over 100 countries Delta Apparel, Inc. Investor Presentation | 11
…Achieving 20%+ Sales CAGR Reaching 99% of US population in 1-2 day ship with ~ 50% in 1 day Cranbury, NJ * Storm Lake, IA Reno, NV Fayetteville, NC 1 day Lewisville, TX * 2 day 3-4 day Clearwater, FL Miami, FL * * DTG facility integrated with Delta Activewear distribution Delta Apparel, Inc. Investor Presentation | 12
…Achieving 20%+ Sales CAGR Transition Customers to Delta Products 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Non-Delta Delta Non-Delta Delta Non-Delta Delta FY18 FY19 Projected FY20 Delta Apparel, Inc. Investor Presentation | 13
D ELTA D IGITAL D ECORATION powered by: www.DeltaApparel.com/DigitalDecoration 14
…Achieving 20%+ Sales CAGR How large is the potential digital print market? Digital Impressions < 5% of total Graphic Impressions Delta Apparel, Inc. Investor Presentation | 15
…Achieving 20%+ Sales CAGR Screen eCommerce Promotional Traditional Printers Retail 100% FY17 1% 99% FY18 1% FY19 98% 1% 2% 86% 10% 2% FY20 Delta Apparel, Inc. Investor Presentation | 16
… Achieving 20%+ Sales CAGR Acquired DTG2Go Acquired Art Gun Built proprietary Acquired SSI Digital Print March 2018 ~ $100m technology and December 2009 October 2018 grew business ~ $60m ~ $27m ~ $15m $10m $0m FY10 FY14 FY17 FY18 FY19E 3 Year Outlook DTG2Go achieving double-digit operating profits with 20%+ EBITDA margins Delta Apparel, Inc. Investor Presentation | 17
…Positioned for Double-Digit Growth Delta Apparel, Inc. Investor Presentation | 18
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Over 2 Million Decals Sold Delta Apparel, Inc. Investor Presentation | 20
Salt Life Decals Cumulative Decals Sold 1 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,00 9,000 10,000 Delta Apparel, Inc. Investor Presentation | 21
SALT LIFE SLX – THUNDER JACKET AND PANTS Delta Apparel, Inc. Investor Presentation | 22
Optics Delta Apparel, Inc. Investor Presentation | 23
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Swim Delta Apparel, Inc. Investor Presentation | 25
Salt Life Beverage FUTURE June 2019 SC May 2019 AL & TN March 2019 GA June 2018 FL Delta Apparel, Inc. Investor Presentation | 26
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Salt Life Retail Salt Life Retail EXISTING EXISTING Orlando, Florida - NEW Orlando, Florida - NEW Tampa, Florida Tampa, Florida Daytona Beach, Florida Jacksonville Beach, Florida Daytona Beach, Florida Huntington Beach, California Jacksonville Beach, Florida San Clemente, California Columbus, Georgia Huntington Beach, California COMING SOON COMING SOON San Clemente, California Key West, Florida Destin, Florida Columbus, Georgia Key West, Florida North Palm Beach, Florida Destin, Florida North Palm Beach, Florida Delta Apparel, Inc. Investor Presentation | 28
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eCommerce – Sales Growth B to B B to C Salt Life and Soffe Delta Activewear and Soffe +8% CAGR +21% CAGR $5.4 $25.1 $5.1 $4.6 $20.8 $17.1 FY17 FY18 FY19 FY17 FY18 FY19 (in millions) Delta Apparel, Inc. Investor Presentation | 30
Uniquely Positioned….Tariffs ▲ Western hemisphere vertical manufacturing platform servicing both Delta Group and Salt Life Group ▲ Less than 5% of total sales are sourced from China Opportunity to internally produce certain of these garments o ▲ Expanding manufacturing capacities to support anticipated private label growth Delta Apparel, Inc. Investor Presentation | 31
Growth Initiatives ▲ Strong core business, Delta Activewear, continues to gain market share and expand customer base ▲ DTG2Go’s cutting edge technology is revolutionizing the changing retail platform with digital print and fulfillment capabilities ▲ Significant growth potential with lifestyle brand, Salt Life ▲ Double-digit growth across our eCommerce sites; remains our most profitable sales channel Delta Apparel, Inc. Investor Presentation | 32
Q & A Delta Apparel, Inc. Investor Presentation | 33
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