Robert W. Humphreys has resigned from his position as chief executive officer of Delta Apparel (asi/49172) at the request of the board of directors following what’s been a dismal run of financial results for the publicly traded apparel maker.
Humphreys submitted his resignation on May 16, according to a May 22 filing with the Securities and Exchange Commission. His final day in the C-Suite will be June 29. He’s also resigned as chairman of the board.
Delta Apparel didn’t name a direct CEO replacement, but has appointed Tim Pruban of Focus Management Group as chief restructuring officer. Pruban will be advising the board on succession planning, according to the SEC filing.
Earlier this month, Delta Apparel reported that its fiscal half-year total company revenue was about $158.9 million – a 27% year-over-year decrease. For the six-month period, Delta Apparel suffered a loss of about $44.8 million, or -$6.38 per share.
In the 2023 fiscal year, which ended September 30, Delta Apparel had a $33.2 million annual loss and sales fell 14%. Based on estimated 2022 North American promotional product revenue of $49.6 million, Delta Apparel ranked 37 on Counselor’s most recent list of the largest suppliers in the industry.
Founded by Pruban, Focus Management Group is a financial advisory and management consulting group. Pruban’s particular specialty is serving financially distressed companies.
Pruban’s biography on the company website says he has facilitated the sale of more than $5 billion in assets and led the collection of more than $1 billion in accounts receivable. His expertise includes business restructuring, asset recovery, liquidation management and asset sales.
Holding an MBA from DePaul University, Pruban has “managed, overseen and worked directly on specific liquidation and asset recovery engagements for a range of leading financial institutions,” including American Capital Strategies, Bank of America, BMO/Harris Bank, Capital One and others.
Humphreys’ time with the business that’s become Delta Apparel goes back to at least 1987, when he began serving as a division president for a subsidiary, according to a company bio. He’s been president/CEO for nearly 25 years, and chairman since 2009.
Potential Salt Life Sale, Bankruptcy Considerations & Board Changes
Pruban’s time with Delta Apparel begins as the firm is experiencing struggles and as it reportedly considers possible bankruptcy and the sale of Salt Life – a sun-and-sea lifestyle brand.
Last October, an unidentified entity made an unsolicited offer to buy the Salt Life business unit from Delta Apparel. The supplier, who operates in various other business channels beyond the promo products market, including retail sales of Salt Life, has engaged Baird as its financial advisor on a possible sale.
Delta Apparel is continuing to consider the sale of Salt Life as it deals with financial turmoil. The firm said in a recent filing that it’s out of compliance with a covenant within its revolving credit facility. While Delta Apparel is trying to work through the situation with lenders, it indicated in a filing that if it can not adequately address covenant concerns than the company “may seek relief under applicable bankruptcy laws.”
Since January, Delta Apparel has been finding it harder to obtain raw materials, a result of some vendors reducing credit extended to the supplier. That’s led to Delta Apparel being unable to obtain enough materials to manufacture at desired levels, according to the company.
Meanwhile, the firm’s DTG2Go digital print-on-demand business learned in May that it’s losing its largest customer – a blow that will lead to an impairment charge in the firm’s fiscal third quarter. An impairment charge is essentially a process used to write off an asset or report a reduction in the value of an asset.
In a May 14 filing, Delta Apparel shared that Alexander Taylor II had resigned from the board. A board member since 2018, Anita Britt was reassigned from the Audit Committee to the Corporate Governance Committee of the board and appointed to serve as its chair.
