Top 40 supplier Delta Apparel (asi/49172) has reported a net loss of $209,000 for the first six months of its fiscal year 2019 – an improvement from the $6.3 million loss incurred during the same period the prior year.

Reported late Monday, the Greenville, SC-based supplier’s financial results showed that net loss per share for this year’s first six months was $0.03 – better than the $0.87 per-share loss last year. Gross profit was $37.5 million, down 2.9%.

A $2.5 million litigation expense tied to The Sports Authority’s March 2016 bankruptcy was the primary factor in the net loss for Delta Apparel’s first two fiscal quarters, which ended March 30.

Excluding the litigation expense, the supplier achieved net income of $1.9 million, or $0.27 per diluted share.

For the fiscal year’s first six months, Delta Apparel’s net sales improved 7.4% to $204.5 million. Net revenue in the company’s Delta Group segment, which includes sales to the imprinted apparel market, increased 8.2% over the previous year. Net sales in the company’s Salt Life Group division rose 1.5%.

“Our fast-growing digital print business, DTG2Go, was once again a bright spot, with sales growth of 177%,” said Delta Apparel CEO Robert W. Humphreys.

On Monday, Delta Apparel also reported that its fiscal second quarter total company sales rose 2.8% year-over-year to $102.8 million, but noted that earnings dropped 74% to $942,000.

The Q2 performance included basic earnings per share of $0.14, down from $0.50 during the same period the prior year. Diluted EPS for this fiscal year’s second quarter was $0.13, a decline from $0.48. Gross profit eroded from $22.2 million in Q2 2018 to $18.9 million.

“Anticipated transition costs from changes in the private label product mix and higher-cost raw materials in the Delta Group segment, coupled with higher than expected digital print acquisition integration expenses and delayed spring sales in the Salt Life Group segment, drove a decline in gross profit,” Delta Apparel said in a statement.

Delta added that it expects “profitability to increase in the second half of the year as we enter our traditionally strong selling season with an expanding product mix and better balance between selling prices and raw material costs.”

With reported 2017 North American promotional product revenue of $46.2 million, Delta Apparel ranked 35th on Counselor’s latest list of the largest suppliers in the industry. The new list debuts in July.