Projections or other forward-looking statements may be made by Delta Apparel's executives. Such projections and statements suggest prediction and involve risks and uncertainty, and actual results may differ materially. Please refer to the periodic reports filed with the Securities and Exchange Commission, including the company's most recent Form 10-K and Form 10-Qs. These documents identify important factors that could cause actual results to differ materially from those contained in the projections or forward-looking statements. Please note that any forward-looking statements are made only as of today, and except as required by law, the company does not commit to update or revise any forward-looking statements, even if it becomes apparent that any projected results will not be realized. I'll now turn the call over to Delta's Chairman and Chief Executive Officer, Bob Humphreys.
Thank you. Good afternoon, and thank you for your interest in Delta Apparel. I'd like to start our call today by welcoming and introducing you to Simone Walsh, our new Vice President, Chief Financial Officer, and Treasurer. Simone joins Delta Apparel from Novelis Inc, where she served as Vice President, Deputy Controller. Previously, Simone served as Chief Accounting Officer for PRGX Global, Inc, and held senior finance roles at several other publicly traded retail and manufacturing companies, including Sony Corporation, Coca-Cola Enterprises, and The Home Depot in London and in Atlanta. Simone started her career at Ernst & Young and is both Australian and British, a chartered accountant. She's also a U.S. citizen.
We are extremely pleased today to tell you about our outstanding start to fiscal 2022, and strong first quarter performance, which outpaced our expectations and put us in place to meet, if not exceed, our revenue and earnings goals for fiscal 2022. Before we get to the financial results, I want to take a minute to recognize and thank our nearly 9,000 employees across the United States, Mexico, Honduras, and El Salvador. The last two years have been challenging on so many fronts, but our teams have remained focused on moving our company forward by executing our business plans and providing outstanding products and innovative services to our thousands of customers across many channels of distribution. We have a long and proven track record of success navigating challenging industry dynamics.
Over the past several quarters, we have been faced with inflationary pressures, supply chain disruptions, and labor shortages, which our teams have tackled head on with tremendous agility, flexibility and innovation resulting in outstanding operating results for the many constituent groups we consider a part of our business purpose. As you saw in our press release, sales for our first quarter ended July 1, 2022, were $110.7 million, an all-time record for the December quarter, and represented organic growth of approximately 17% from the prior year December quarter. Our net income of $3.6 million was also a record for the December quarter and equates to $0.51 per diluted share ahead of our internal expectations. This was another quarter represented by broad-based performance with shareholder value creation in both segments of our business.
Salt Life Group achieved sales of $8.8 million, up 24% from the prior year, and ended the quarter with strong orders for our wholesale channel, while at the same time continuing to build direct consumer engagement on our social media platforms, which should continue to drive strong growth in our higher margin, direct-to-consumer channels of distribution. We opened one new Salt Life retail store during the first quarter in Texas City, Texas, and have already opened a new store in Sarasota, Florida, this quarter, and are planning to complete store openings in Fort Lauderdale, Florida, Foley, Alabama, Hilton Head, South Carolina, and Boca Raton, Florida, over the next several months. We are in continuing discussions for several additional leases and are planning to end this fiscal year with approximately 20 Salt Life retail stores in operation.
For stores open five quarters or longer, we registered same-store sales growth of 18% from the prior year December quarter. Consumer demand and engagement on our Salt Life e-commerce site has been strong despite going into the quarter with a limited inventory position that became more constrained as the holiday season progressed, limiting our revenue through this channel of distribution. To better service this important channel and more directly interact with our consumers, we have recently strategically reconfigured space within our existing distribution center in Fayetteville, North Carolina, designed to reserve and manage inventory dedicated for availability and servicing our consumers shopping on saltlife.com. Salt Life continues on its journey of strong organic growth and the broad demand that our products has accelerated over the last six quarters.
While we continue to navigate supply chain issues that face many in this current environment, as you can see from our sales results, our team has executed magnificently to allow us to deliver strong revenue growth despite these industry challenges. We are shipping our spring wholesale business as we speak and are expecting continued growth and the associated margin expansion with our direct-to-consumer channels growth. Our Delta Group also delivered strong sales growth across all channels of distribution and on a consolidated basis in this segment, we grew 16% for the quarter to a first quarter record of $101.9 million. We are now seeing channels of distribution that have been more heavily impacted by COVID start to normalize, and all channels are now in a growth mode, which will ultimately help us ship our targeted product mix.
Moreover, we continue to see additional retailers and global brands seek increased production from the vertically integrated supply chain that Delta Apparel has to offer. We're currently installing additional equipment in our textile sewing and screen print locations in Central America, which will allow us to continue to increase our output as the year progresses. The Delta Group, like many in our industry, continues to be impacted by limited supplies of raw materials, transportation services, and other supply chain bottlenecks. However, to date, we've been able to manage through these challenges, further building output by utilizing our vertically integrated manufacturing network. Our ability to meet customer demand has not only resulted in strong top-line performance, but allowed us to broaden our services and offering with both existing and new customers.
Over the last year, we have increased selling prices on the majority of our products to mitigate most of the inflationary pressures impacting our supply chain. In addition, we are now providing more value-adding services such as screen or digital printing and retail ready services than any time in our history, which further increases our average selling prices, resulting in increased consolidated revenues. Our increased unit growth, along with a richer mix of services delivered, is allowing us to also increase our operating profits by leveraging our fixed cost in our manufacturing and SG&A areas. During the December quarter, we also reached a number of significant milestones in our DTG2Go business. Our revenue was a new quarterly record with growth of approximately 17% over the prior year.
We were able to move from a beta test mode to a production environment on our new printing equipment while we continued to take delivery of and install additional production equipment through the holiday season. As previously announced, we onboarded several new customers on the DTG2Go platform during the quarter. This will provide the foundation for growth as the year progresses. Our digital first methodology, which we developed in conjunction with a number of key market participants, was implemented in the quarter. We have made significant investments in DTG2Go's digital first retail model, ensuring digital graphic prints meet the high quality standards required for brands, retailers, and intellectual property holders. We believe the quality, look, and feel of the garments created through this process will continue to differentiate us in the marketplace and will be a key driver of the growth we are expecting in this business.
In addition, 55% of the DTG2Go units we produced in the December quarter were printed on Delta garments, creating a more efficient operation, reduced garment costs for our customers, and lower working capital needs in the business. Now let me turn the call over to Simone, who will review our first quarter business highlights and financial results, and then I'll join the call prior to our opening for questions. Simone?
Thank you, Bob. I'm delighted to have joined Delta Apparel at this exciting time for the company. Let me echo Bob's comments for both our Delta Group and Salt Life Group. First quarter fiscal 2022 results were outstanding and we are progressing with strong positive momentum. Over the past year, the company completed the integration of our Soffe brand into our activewear business, consolidated and modernized certain distribution operations, and achieved record levels of manufacturing output. In addition, extensive investments in research and development at DTG2Go developed into our digital first strategy, which has already resulted in the onboarding of several new key customer relationships. The extraordinary growth we saw in Salt Life in fiscal 2021 has continued to accelerate, and we have the foundation in place for further organic growth.
Our multi-year strategic initiatives, many of which were put in place pre-pandemic, are maturing nicely, and our first quarter results are reflective of our ability to capitalize on market opportunities to drive broad-based organic growth in our business. Now I'll go through a more detailed review of our first quarter financial results. Net sales were $110.7 million compared to $94.7 million in the prior year, with Delta Group segment growth of 16.3% and 24.3% growth in the Salt Life Group segment. We saw growth across the Delta Group segment in Delta Direct and Global Brands and Retail Direct, with strong demand across the channels of distribution we serve.
As a reminder, in our Global Brands and Retail Direct sales channels, we're a supply chain partner to global brands from development of custom garments to shipment of their branded products, with the majority of the products being sold with value-added services. We also serve retailers by providing our portfolio of Delta Platinum, and Soffe products directly to both their retail stores and through their e-commerce channels. During the quarter, we also saw increased sales in DTG2Go with the onboarding of several customers and a strong holiday showing. The growth in Salt Life resulted from both strength in our wholesale business together with continued growth in our retail store sales, with same-store sales growing 18% over the first fiscal quarter of fiscal 2021. Gross margins contracted 60 basis points from the prior year to 20.8% of sales. Gross margin contracted in both business segments.
This was in line with expectation as we continue to see inflationary pressure in our manufacturing and sourcing platforms. Selling, general, and administrative expenses increased $1.5 million, representing 15.8% of sales as compared to 16.9% of sales in the first quarter of fiscal 2021. We are seeing the benefit of the previously mentioned integration of our Soffe brand into our activewear business, while also leveraging our fixed costs against increased sales. Operating income for the quarter increased 90% to $5.9 million or 5.3% of sales, compared to $3.1 million or 3.3% of sales in the prior year first quarter.
Net income for the December quarter was $3.6 million or $0.51 per diluted share, an increase of 313% compared to $900,000 or $0.13 per diluted share for the same period in the prior year, driven by higher operating profits and a lower tax rate. Our balance sheet is solid. Net debt, including capital lease financing and cash on hand, was $139.6 million. While our debt increased from September 2021, this was in line with expectations as we continued to build inventory to meet demand. Our inventory was $183 million at the end of the first quarter, an increase of $21 million from September, but below our target for the spring shipping season.
This is both an increase in the number of units on hand and a reflection of higher inventory value resulting from increases in raw materials, transportation, and labor cost. We expect to remain inventory constrained as we manage through the remainder of fiscal 2022. We continued to invest in the business, spending $1.8 million on CapEx in the first quarter of fiscal 2022. This amount is lower than we had planned for the quarter as we experienced supply chain delays in receiving some machinery. We still anticipate spending approximately $20 million on CapEx in the fiscal year as we continue to invest in new retail doors at Salt Life, production processes in our Central American manufacturing facilities, and the continued investments in the infrastructure at DTG2Go. Additionally, we'll continue to invest in IT infrastructure projects that support our vertically integrated supply chain platform.
In the first quarter of fiscal 2022, under the previously announced share repurchase program, the company repurchased 74,232 shares for $2.1 million, bringing the total amount repurchased to $54.6 million. At the end of the first quarter, the company had $5.4 million remaining to repurchase under the existing authorization. Now I'll turn the call back over to Bob for his closing comments prior to Q&A. Bob?
Thanks, Simone. We know what most of you are interested in is how we see fiscal 2022 progressing and how we will deal with labor shortages in the United States, supply chain disruptions, and high cotton prices. Well, I'll start by saying that without these headwinds, our fiscal 2021 full year and our first quarter of fiscal 2022 results would have been even better. We know that we will have further challenges as we progress through fiscal 2022, both known and unknown. We also know that we successfully navigated many economic cycles, trade law changes, consumer behavior and fashion changes, inflationary spikes in raw materials, alongside many other challenges in our 21 years as a public company.
That history and experience gives us confidence as we sit here today with the highest revenues and profits in our history as being well prepared for continued challenges as we manage through the remainder of fiscal 2022 and beyond. The opportunities Delta has to grow its top line and further expand profitability are probably the strongest we have seen in our history. While the current economic conditions present challenges for us, the changing global dynamics are providing many opportunities.
Our key go-to-market strategies, Salt Life, Delta Direct, Retail Direct, Global Brands, and DTG2Go, combined with our vertical supply chain network, provides us with a powerful business platform which is in strong demand and provides us with many avenues for further growth. On our last earnings call, when we reviewed our full year fiscal 2021 results, we reported that we expected top line growth and operating profit expansion across fiscal 2022 quarters, resulting in all-time record revenue and earnings per share. Subsequently, we reported that we expect double-digit revenue growth for the full year. Our first quarter results reflect the building momentum that we have in our business and positions us well to reach our full year objectives that we've previously announced. Now operator, you can open up the call for any questions we may have.
Thank you. If you'd like to ask a question, please signal by pressing star one on your telephone keypad. If you're using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. Again, press star one to ask a question. We'll pause for just a moment to allow everyone an opportunity to signal for questions. We will go first to Dana Telsey of Telsey Group.
Hi, good afternoon, everyone, and congratulations on the results. Couple things. Can you unpack inflation? What type of price increases are you passing on? How it's changed, how you expect it to change going forward? With supply chain, how are you thinking about your inventory levels in order to meet demand as we go through the upcoming quarters with the double-digit revenue growth assumptions?
Dana, if you look at overall our prices, our average selling prices, particularly on, you know, basic products, are up about 20% over the last five quarters. I would say about 15% of that is probably driven by just price increases where we're passing along cost, and maybe about 5% of that is due to increased services that we're providing and changes in mix. You know, there's more price increases that are going into effect in the basic apparel business. As we speak, that you know, it seems like people are rolling them out in the calendar first quarter.
We've seen price increases along other areas of our business, you know, in our Global Brands and Retail Direct businesses where we price them on a, you know, a more forward-looking when delivered process and partner with our, you know, end customers on cotton pricing and those other raw material prices that have to be moved along. I think, you know, a bit more to come and, certainly wage rates have not abated, energy rates have not abated. Cotton, you know, is still volatile right now. It's just something that we have to look at and manage through really, you know, almost on a daily basis. We talk and think about what increases we have and how we're gonna manage through that. You know, I'd say so far so good, but continue to work ahead of us.
Got it. On the supply chain constraints, in any way, how do you see it at all normalizing or what are you looking at over the next few quarters? Is this at all hindering your ability to get new customers for DTG2Go? Because it certainly sounds like you are getting new customers.
Yeah. I'd say a couple of different things. The thing that's been really interesting is you've had, from what we see, and I think, you know, other apparel manufacturers and probably other types of business are seeing these supply chain problems be bubbles that move through the system. You know, as soon as we get it fixed in one area, then suddenly, you know, there's another shipping issue somewhere else or a labor issue somewhere else or, you know, equipment failure or a plant down. It's kind of been almost laughable if it wasn't so serious, and we didn't have to spend so much time on it, you know, where it's gonna pop up next. That's where, you know, I really just call out our manufacturing and planning teams that have worked tirelessly through this.
You know, even in the depths of the pandemic, the amount of products we were able to get out of El Salvador to service our global brands, you know, how we were able to start up our manufacturing facilities and keep our people safe. Just a lot of workarounds. You know, our distribution centers in the U.S. kept operating, our DTG2Go print operations kept operating, you know, on limited schedules or with you know different groups of people. All that added together has allowed us to keep operating and, you know, have sequential quarters of nice growth, which each time we get to the end of one, we kinda think, "Well, how are we gonna do that next quarter?" Our folks have been figuring that out. The, you know, demand is there for our products.
You know, we'll just have to continue down those paths. As far as DTG2Go goes, we were successful in onboarding, you know, several key strategic customers, during the holiday period. We had, you know, all hands on deck to get that done and great partnerships with equipment providers and these customers working hand in hand to get it done, develop new techniques, new levels of quality, shipment expectations. Still a work in process. We've opened up additional facilities this quarter already that are certified in our digital first process for customers. We have one more facility that we'll be adding equipment to, later this quarter that will, you know, do the same thing.
You know, all you got to do is look at the weather patterns in the U.S. over the last few weeks and different parts of the country shutting down. You know, we have facilities that we could transfer production to and continue to print. It's just, I think, a great testament of you know, our ability in having nine different print locations where we can continue to operate. You know, it's just a great example, I think, of what in a new economy our customers and consumers are looking for you know, to keep things moving forward. We are in good shape with the customers we have onboarded. There's a couple of others that we believe will grow significantly as they reevaluate their own current supply chain during the quarter.
I'd say our you know our vision for the rest of this fiscal year in DTG2Go, you know, we're not needing to go recruit a lot of new customers. There's growth on the table for us to execute against and manage together, and they're expecting that promise.
Thank you.
We'll move next to Bill Fogle of DV Advisors.
Hello. Can you hear me?
Yes, Bill. How you doing?
I'm doing okay. How's it going, Bob? Great quarter. Really spectacular performance. Still amazes me that you guys are trading like a value company, putting up these growth sort of numbers. Just a couple of questions. First, are you still capacity constrained? How can we look towards that capacity coming online as we go throughout the year? I think kind of a related question is, you kind of talked about, you know, double-digit growth this year in revenues, and you're on target for that. Can you give us a little more linearity, clarity on that? I mean, clearly this quarter you're at 17%. Do you expect these sorts of numbers or, you know, is it going to moderate?
Finally, just on margins, how do we expect the progression of margins to be as we go throughout the year? Thank you.
Sure. As far as capacity, we, you know, as we've been talking about for a couple of quarters, we have some new equipment on order that will go into our Central American facilities, that will, what we call debottleneck, you know, remove bottleneck processes in our textile facility there that will add about 10% output. That equipment is a little bit late, but it's on a boat and moving towards us, we expect that to affect our back half of this year with more production capability. I will say, our leaders and employees in that area continue to come up with innovative ways to produce more product, along the way. We have done that in producing a little bit more now than we were expecting.
Again, there's some constraints around raw material delivery and, you know, that sort of thing. We do expect to continue to, you know, increase our output as we go there. We have additional screen print equipment on order for, El Salvador and Mexico. It's been kind of interesting to us. You know, when we first started in digital print, we thought it would, you know, one day maybe eliminate screen printing and, you know, it's amazing how it's evolved, but we are now screen printing more units than any time in our history and see stronger demand for that. We, you know, we love having the additional value-adding services. We'll be screen printing over 1 million impressions a week, in this quarter. Maybe not every week, but we're building to that.
You know, we expect as we sit here today, you know, setting aside a shock to the supply system where something, you know, is shut down and really hurts our production, that, you know, we can achieve, you know, low double-digit growth rate in totality for the full year. My general expectation is that we're gonna have gross margins for the year at a similar level to what we had in the first quarter. There might be some ups and downs through that. There's some more pricing increases that are rolling out in some areas of the marketplace, but obviously, that's a dynamic that a lot of participants ultimately, you know, influence. You know, too soon to tell there. Obviously, if we can hold gross margins and leverage our fixed costs, then that, you know, helps our bottom line results, and that's what we're shooting for and planning on achieving.
Yeah. Operating margins throughout the year, because you had some good control of those expenses this quarter. How should we expect those to trend?
Yeah. You know, I think our operating margins are gonna be, again, in a full year, similar to last year, but over, you know, higher revenue.
Okay. Maybe I'll just try to corner you a little bit before I let you go.
Mm-hmm. Sure.
These double digit low double digits. I mean, that kinda is a big kinda range. Is low double digits 10%-15% or 15%-20%, 10%-20%. Could you bracket that at all?
Yeah, I can narrow that range for you. Again, we would be proud of anything north of 10%, you know, for an organic revenue growth at this stage of where we are in our capacity constraints. We can't sustain the 17% that we had in this quarter, based on what we see today is not possible with our manufacturing. Although it appears that the demand would be there. We are telling customers no to business, you know, particularly the ones that are looking for a place on our vertical supply chain, you know, manufacturing and service platform. You know, major customers are asking us to provide more production, you know, in the back half of this year.
At this point, we're having to tell them we can't do that. Demand is strong. Again, I think a lot of changing world dynamics, a lot of relationships that we've built, a lot of confidence that companies have in our people's ability to deliver. I think it just bodes well for, you know, our ability to organically grow Delta Apparel in totality.
Great. Thanks so much for your time. I guess given that you're completely capacity constrained and seemingly sold out, maybe, you know, you might think about, I'm sure you are thinking about being more aggressive on the pricing side. You know, because if you have people you're turning away, you know, maybe if you raise the price a little bit, you know, it might help. Anyway, thank you so much. Great quarter. We'll be in touch. Bye now.
Thanks.
We'll go next to Jimmy Wilen of Wilen Management.
Impressive results, fellas. Three different questions. First, could you tell us about the Central American operations, El Salvador and Honduras? Do you have the same difficulty that we have in the States with the availability of labor and the cost of labor?
We don't have the problem with availability of labor. There, you know, I think I hate to quote a number because I don't keep up with it obviously every day, but I think unemployment rates in those countries are still in the you know, 25%-40%, probably still haven't recovered from you know, pre-COVID production rates. You know, we have a growing group of educated leaders in those countries. Almost all of our leadership from you know, management, our VP of manufacturing, plant managers, engineers, what have you, are you know, from the region anyway, and or else have lived there and worked for long periods of time.
My point of this is it's just really comforting and encouraging to see the work ethic and the enthusiasm they have, you know, for our company and their country and how to make all of that better. You know, we don't have that problem. You know, the infrastructure is not as good. You can have transportation problems, you can have electricity problems, you know, and other things in a less developed country, but labor is not one of them.
Got you. On the Salt Life side, your same-store sales growth was 18%. How does that, you know, how do you look at that with the maturity of stores? Does most of that growth happen early on as you open up new stores from year one to year two? Or do they trend similarly throughout all your stores? Secondly, within Salt Life, gross margins of 53% sound rather impressive. Is that a number that you can still achieve? Then the last on Salt Life is, you still mentioned availability of product even with getting same-store sales up 18%. Could they have been even better?
Yeah. I'd say two, three things on that. You know, where we really suffered the worst on not having product was in our e-commerce business because our stores were sucking out the merchandise. Our wholesale customers were coming in and dropping orders that sucked up that merchandise. That was the reason that, you know, our management team down there said, "Hey, we got to do something better than this." We will have merchandise specifically, you know, being for support of our e-commerce business. We don't want that to be inventory constrained. I would say particularly accessories and things that we can't make, so, you know, headwear is a good example, bags. We were inventory light, very light during the quarter. I think, yes, we could have had higher revenue.
As far as same-store sales goes, really interesting, you know, if you dig in by store, there's kind of a story behind each one. Basically what we do just as a measurement is try to go look at, hey, for stores that were already open before our measuring period started, what was their growth for the quarter? We do that. You know, stores come into that as we open new stores. I think Daytona Beach is a great example that, you know, we opened, I don't know, maybe two and a half years ago now. It was a new outlet, you know, at an exit that was being developed. The same-store sales growth there is really outstanding.
If you go right by that exit now, there's a lot of stuff that has been added to it. You know, what we're seeing is these destination areas where people are going there, we're going to get our fair share of business. The more people who do stop in those areas, the more, you know, opportunity we have to sell them something. You know, I'd say, you know, our only thing with our stores is getting them open quickly and efficiently, and our team's doing a good job of that. Usually, our longest hold up is getting a building permit to do whatever we need to do. Then having, you know, enough product in there to, you know, service our customers.
Our planning teams are being more aggressive to make sure we have those kinds of products available for our consumers when they shop there.
Okay. Also on the Salt Life, what's the outlook on the wholesale channel as you see your orders in line for the season?
Unbelievable.
Okay.
The demand for Salt Life product, very strong and, you know, our wholesale customers want more and more of it. I'd say one of our-
Is it geographical expansion, number of doors, or where's most of that coming from?
Yeah, it's very broad-based. I mean, you know, still strong in the Southeast, but it continues to grow more with retailers who have opened up in, I'll say, nontraditional areas. You know, the amount that we're shipping to California continues to increase, you know, up the East Coast, you know, Midwest. Our retail customers, you know, want Salt Life product in there. I think it's probably a pretty good example of this whole omni-channel model that has worked for a number of people and, you know, is working for us, and it's resonating with the Salt Life consumer. You know, right now, all of our channels, you know, are growing with only e-commerce being limited by our lack of product to get out there to consumers.
Gotcha. On the DTG2Go side, two questions. You talked about new facilities in digital. I thought you had already done your footprint. Does that mean new facilities within a Hot Topic distribution center, or I'm not sure what that is. Also, could you talk about the onboarding of the several new customers? Are they different in nature than your existing customers? Unto themselves, what percentage of revenue growth can these new customers achieve for you who didn't exist last year that exist today?
Yeah. I probably was not clear about new facilities. It is our new digital-first equipment in existing facilities. We have that equipment in 3 now, 1 to go. It was in 2 at holiday, and the third one has birthed, and we have people who've already certified that production. That's in our Dallas facility. This is, I think, key when you think about this business and really understand it and the go-to-market strategies. These customers are different in that they are not just e-retailers or primarily e-retailers, but you know, are larger customers who either have extensive license agreements or extensive IP that they own or retailers or global brands all onboarding on that. I think the thing that you know, really sets the stage is the digital-first quality.
It's not just a quality, it's aesthetics, where even industry experts cannot really differentiate between how this garment is printed, whether it's digitally or some combination or screen printed. You know, when you get to that level, first of all, you have the quality comfort if you own a brand or, you know, an IP that you want that level of quality and, the consistency and, you know, the acceptance of the customer that that's what they're expecting. We can make very high quality, and we still do and will for, you know, a long, long, long time on, you know, the digital equipment that we previously had. Then it's a matter of, I might like it better, and you might not like it as well versus having a standard that's really indistinguishable from how it's produced.
Lots of good stuff there. I think, these customers will, you know, no doubt there's, you know, three already onboarded that will be the majority of our growth this year, and over time will help reduce the seasonality further for that business, which is also key.
Excellent. Thanks, Bob.
Mm-hmm.
We'll hear next from Chris Reynolds of Neuberger Berman.
Yes. Thank you, Bob, for taking my question. Quick 2 questions. One, you know, what exactly does it mean when you say you have to put some equipment into new facilities and, you know, what kind of equipment is that and how expensive is it? The second question is on the buyback, and I like the buyback a great deal. You've had a consistent record of doing that. What's the philosophy for stock repurchase? Because obviously the growth rate of your company has gone up a lot and but your multiple is low, so I assume you'll keep buying your shares. You know, things have changed, you know, over the last 3-5 years in terms of how your company's positioned. Thank you.
Yeah. Yeah. You know, this new equipment is new technology. You know, there's some confidentiality agreements, and I'm not familiar exactly where they start and stop off the top of my head. I'll just say it's new equipment. We were the beta test sites. We've got basically first right of refusal for most of their production for, you know, some significant period of time. They are gearing up beyond that, so there will be other people that have the equipment. But as we've talked about in digital printing for a decade now, it's not just the equipment, it's understanding the R&D, it's understanding apparel, it's having the technology to, for the equipment to then know what type of garment is on the machine and how to adjust everything automatically.
It's the technology to manage the art and how that's gonna be applied to the garment, and then managing where that garment is, and ultimately into the final delivery to the customer. There's a lot that goes into it. A significant part of what we have that differentiates us from competitors, one is our technology and systems that we've developed, you know, over 12 years now. Then secondly, having, you know, right now 9 different print locations where we can electronically move garments to where we have the garment to print on or what's closest to the end consumer, you know, which lowers the shipping cost, and it's the speed to the consumer.
There's a lot of components here that we've been working on that really, I think, separates us from the majority of the players out there and create huge barriers to entry. Then you add to that a number of them are sitting in our DCs, so we've got garments there for them to use and print on. We eliminate an extra shipping cost to get garments to where the printers are.
The only way you can really compete with that is to get in the apparel business, which is pretty daunting for most people who are digital, you know, printers to say, "I'm gonna be a vertical T-shirt producer so I can compete with Delta Apparel." You know, those are the things that, you know, make that work for us and, you know, we expect that to continue. Was there a second part of your question? I'm sorry, all that rambling, I forgot.
Oh, that was very helpful. It sounds like you've almost, you know, made your plants, you know, mobile in many senses. You're able to ship the production to where the demand is. That's very helpful for me.
Mm-hmm.
Your stock repurchase program, you've been opportunistic over the years and bought stock, and that's been terrific, you know. It seems like the growth trajectory of your company has changed. I'm wondering, you know, what's the philosophy of stock repurchase? Has that changed at all?
It certainly, you know, has evolved over time. You know, back in the day when we, you know, were doing a lot of acquisitions, I mean, it was an easy kinda, and fun math to do. Well, we can buy ourselves or we can buy somebody else. It pretty much told you what you could pay for, you know, an acquisition and no need to get too excited 'cause you got our little joke internally was to do acquisitions, you gotta work weekends, and you can buy your stock back during the week. You know, if in doubt, do that. I just happened to see something today for a different reason, but I think it was 2014, we had about 8 million shares outstanding, and today we have about 7 million shares outstanding.
I don't know off the top of my head exactly what our average price of share repurchases are, but probably about, you know, probably less than half of our current trading value. I believe for shareholders, that works out pretty good. Our philosophy on that is really, you know, use the capital in return for our shareholders. I would say, you know, we see where the stock is trading versus where we think the intrinsic value of the company is, and then look at that versus opportunities, you know, for our organic growth, particularly. You all know as well as I do the value of what organic growth can do for per share earnings when we can leverage other costs.
If we continue to see, you know, demand for production and all, then we'll put that into our formula of how much we can expand and, you know, buy back our shares versus, you know, expand our manufacturing output. I will say, you know, at quarter end, I think our debt to EBITDA was really the lowest that it's been in modern history, about two and a half times debt. I think we have good flexibility to, you know, organically grow our business. Our stock is still thinly traded, more thinly than we think it should be. You know, we like to have programs out there to buy shares when there's more selling pressure than buying pressure.
Thank you.
We have a follow-up question from Bill Fogle of DV Advisors.
Yes, just one follow-up. Given where the stock is, I mean, obviously, you know, the pieces, you know, Salt Life and DTG2Go, you know, are probably worth, you know, a lot more than the current market cap of the company is. Would you consider at some point a sale or spin of either of those entities? Maybe it's not the right time because they're still growing so quickly, but just wondering what your thoughts on that are.
You know, we always consider all those things. You know, and again, you look back over our history, we've done, I think, three divestitures. We've consolidated some things. You know, when we feel like either we don't have a future view of success, but maybe someone else does, you know, we'll sell the business and take that capital. That's how we got capital for DTG2Go and Salt Life is by selling businesses that had been good. We sold them above, you know, our carrying value and had made money over the years, and it allowed us to harvest those profits to redeploy them somewhere else. I think looking back now at Salt Life and DTG2Go, that worked out, you know, well for all of us.
I would also point out, you know, there is significant tax consequences to selling, you know, businesses that are valued much over their carrying value. You gotta take that into account, too. We're still a relatively small public company, and you got, you know, some amount of fixed being public costs, and suddenly you might be spreading that over, you know, a smaller remaining business. You know, that's, you know, normal conversations around here, you know, whether it's in the boardroom or the water fountain.
Thank you very much.
Mm-hmm.
With no other questions in the queue, I will now turn the call back over to Bob Humphreys for any additional or closing remarks.
Well, thank you all for your interest and questions, and we look forward to meeting with you telephonically in a few months and talking about second quarter results. Hope you have a good one.
This concludes today's call. Thank you for your participation. You may now disconnect.