Delta Galil Reports Record Financial Results for 2012

Before you go, we thought you'd like these...
Before you go close icon

Delta Galil Reports Record Financial Results for 2012

All-Time High Sales, Operating Income and EPS Distinguish 4th Quarter and Full Year Performance

Increase Guidance for 2013

  • Sales reached $246.6 million in the 2012 fourth quarter, up 40% from the same period of 2011.
  • Income was $13.9 million in the 2012 fourth quarter, a 66% increase from a year ago.
  • Diluted earnings per share attributed to shareholders, excluding capital gains and non-recurring items, was $0.55 for the 2012 fourth quarter and $1.37 for the full year, up from $0.36 and $1.15, respectively, for the 2011 periods.
  • Delta Galil achieved its 13th consecutive quarter of year-over-year sales growth.
  • Operating cash flow was $72.9 million for 2012, up 101% from $36.3 million in the prior year.
  • The Board of Directors declared a dividend of approximately $2.5 million, or $0.1034 per share, to be distributed on March 12, 2013. The determining and "ex-dividend" date will be February 27, 2013.
  • The Company completed the repurchase of approximately $1.3 million in Delta Galil common stock.
  • Financial guidance for 2013 calls for diluted EPS of $1.51-1.59 on sales of $910 million to $920 million.
  • Isaac Dabah, CEO of Delta Galil, noted: "We are very proud to achieve a consistent 4 years growth delivering exceptional top-line and bottom-line performance and made great strides in executing Delta Galil's long-term strategies to transform the Company into a leading, diversified global competitor in branded and private label apparel."

TEL AVIV, Israel--(BUSINESS WIRE)-- Delta Galil Industries, Ltd. (DELT/Tel Aviv Stock Exchange, DELTY.PK/OTCQX), the global manufacturer and marketer of branded and private label apparel products for men, women and children, today reported its financial results for the fourth quarter and full year 2012.

Delta Galil reported record quarterly sales of $246.6 million for the three months ended December 31, 2012, up from $176.4 million for the same quarter last year, an increase of 40%. For the full year 2012, sales reached a record $817.8 million, a 20% increase over sales of $678.8 million in 2011.

The strong top-line growth in 2012 reflected Delta Galil's acquisition of Schiesser Group, completed in July 2012, as well as a sharp increase in sales in Europe, mainly in Germany, positive momentum in the U.S. mass market channel.

Operating income was $19.7 million in the fourth quarter of 2012, rising 73% from the $11.4 million reported in the same quarter of 2011. For the full year 2012, operating income excluding capital gains and non-recurring items was $50.7 million, compared to $39.7 million in 2011, a 28% increase.

Net income attributed to shareholders was $13.8 million in the fourth quarter of 2012, compared to $8.3 million in the same quarter of 2011, a 66% increase. For the full year 2012, income attributed to shareholders excluding capital gains and non-recurring items was $33.8 million, rising 23% from $23.4 million in 2011.

Diluted earnings per share attributed to shareholders excluding capital gains and non-recurring items was $0.55 for the 2012 fourth quarter and $1.37 for the year. In the respective 2011 periods, the comparable amounts were $0.36 and $1.15, respectively.

Net income for the year attributed to shareholders was $56.9 million compared to $27.4 million in 2011, an increase of 107%.

Results for the full year 2012 included a capital gain of $19.9 million from the sale of real estate, expenses of $1.2 million from the Schiesser acquisition, a net gain of $12.2 million due to negative goodwill attributed to Schiesser acquisition, partially offset by a write-down of unused fixed assets of $1.3 million, and restructuring expenses of $5.4 million.

Management Comment: Strategic Transformation and Growth

Isaac Dabah, CEO of Delta Galil, stated: "In 2012 we delivered exceptional top-line and bottom-line performance and made great strides in executing Delta Galil's long-term strategies to transform the Company into a leading, diversified global competitor in branded and private label intimate apparel. We increased our branded business and our European footprint through the Schiesser acquisition, further penetrated the U.S. mass market channel, and expanded our socks category and U.S. kids business, through our recent acquisition of Little Miss Matched.

"Our outlook for 2013 calls for Delta Galil to approach $1 billion in sales, accompanied by further growth in profitability. We plan to get there through continued organic growth in areas such as in Delta USA, Socks business and Delta Israel retail operations. We have increased our guidance to 2013 from $55-$60 million EBIT to $57-$62 million."

Cash Flow, Equity, Dividend Declaration

Operating cash flow increased to $32.7 million for the 2012 fourth quarter and $72.9 million for the full year, up from $21.1 million and $36.3 million for the respective 2011 periods.

EBITDA rose by 66% to $24.1 million in the 2012 fourth quarter from $14.5 million in the same period of 2011. For the full year 2012, EBITDA grew by 26% to $64.8 million, from $51.5 million in 2011.

Equity on December 31, 2012 was a record $277.8 million, or 50% of the total balance sheet, compared to $217.2 million, or 49% of the balance sheet a year earlier.

Delta Galil declared a dividend of $2.5 million, or $0.1034 per share, to be distributed on March 12, 2013. The determining and "ex-dividend" date will be February 27, 2013. This brings total dividend declared for 2012 to $8.5 million or $0.3566 per share.

Strong Outlook for 2013

Delta Galil increasing its financial guidance for 2013, calling for higher EBIT and net profit than originally estimated, The following forecast excludes the effect of any one-time items, net of tax:

  • Full-year 2013 sales are estimated to range from $910 million to $920 million, which would constitute an average increase of 12% compared to 2012 actual.
  • Full-year 2013 EBIT is estimated to range between $57 million and $62 million, which would constitute an average increase of 17% compared to 2012 actual.
  • Full-year 2013 net profit is estimated to range between $38 million and $40 million, which would constitute an average increase of 15% compared to 2012 actual.
  • Full-year 2013 diluted EPS is estimated to range between $1.51 and $1.59, which would constitute an average increase of 13% compared to the 2012 actual.
 
 

DELTA GALIL INDUSTRIES LTD.
Concise Consolidated Balance Sheets
As of December 31, 2012

    

December 31

2012

2011

Thousands of Dollars

Assets
Current assets:
Cash and cash equivalents45,47565,760
Restricted cash2,822-
Other accounts receivable:
Trade receivables108,735103,444
Taxes on income receivable1251,434
Others12,1249,770
Financial Derivative719-
Inventories150,309110,824
Assets classified as held for sale6,4561,766
Total current assets326,765292,998
Non-current assets:
Long-term pre-paid expenses562322
Investment property4,795-
Long-term receivables12,7101,202
Fixed assets, net of accumulated depreciation93,01964,184
Intangible assets, net of accumulated amortization111,48277,390
Deferred tax assets8,8337,014
Financial Derivative1,045-
Total non-current assets232,446150,112
Total assets559,211443,110
  

December 31

2012

  

2011

Thousands of Dollars

Liabilities and Equity
Current liabilities:
Short-term bank loans40,17562,053

Current maturities of long-term loans from banking corporations

1,3572,110
Current maturities of Debentures15,96512,367
Financial Derivative-297
Other accounts payable:
Trade payables72,35155,920
Taxes on income - payable5,0291,770
Others47,47939,096
Total current liabilities182,356173,613
 
Non-current liabilities:

Loans from financial institutions, less current maturities

1501,504

Severance pay over liabilities from termination of employer - employee relations less plan assets

2,6791,183
Other non-current liabilities13,5433,900
Debentures79,32341,506
Financial Derivative-2,978
Reserve for deferred taxes3,3611,182
Total non-current liabilities99,05652,253
Total liabilities281,412225,866
 
Equity:
Equity attributable equity holders of the

parent company:

Share capital23,31123,106
Share premium124,220121,216
Other capital reserves8,736(633)
Retained earnings130,36481,084
Treasury shares(10,996)(9,700)
275,635215,073
Minority interests2,1642,171
Total equity277,799217,244
Total liabilities and equity559,211443,100

The enclosed notes constitute an integral part of these Financial Statements

    
 
 

DELTA GALIL INDUSTRIES LTD.
Concise Consolidated Statement of Comprehensive Income -(Non GAAP)
For the 3-month and 12-month periods ending December 31, 2012

 

For the year ended December 31

Three months ended December 31

2012 2011% Increase2012 2011% Increase
Thousands of DollarsThousands of Dollars
Sales817,782 678,81920%246,570 176,38840%
Cost of sales633,945542,496182,864139,006
Gross profit183,837136,32363,70637,382
% of sales22.5%20.1%25.8%21.2%
Selling and marketing expenses107,05973,81545%36,63219,11092%
% of sales13.1%10.9%14.9%10.8%
Administrative and general expenses26,69125,7054%7,4976,9368%
% of sales3.3%3.8%3.0%3.9%
Other income (expenses), net5712,85810370
Operating income excludingcapital gains and non-recurring items50,65839,66128%19,68011,40672%
% of sales6.2%5.8%8.0%6.5%
Capital gain from selling of asset held for sale19,910--
Schiesser acquisition cost1,160---

Net income derived from adjustments due to Purchase Price Allocation of Schiesser*

12,163---
Impairment of fixed assets1,309---
Restructuring expenses5,424---
Operating income74,83839,66189%19,68011,40672%
Finance expenses, net8,9257,07726%2,1201,09094%
Profit before tax on income65,91332,58417,56010,316
Taxes on income9,0295,0093,6911,945
Equity income93---
Income for the period56,97727,57513,8698,371
Income for period excluding capital gain and non-recurring items, net for period33,92027,57537%13,8698,37166%
Attribution of net earnings for the period
To shareholders of the parent company56,85727,44113,8398,330
To minority interests1201343041
56,97727,57513,8698,371
Diluted earnings per share attributed to shareholders of the company2.301.150.550.36
Diluted earnings per share attributed to shareholders of the company excluding capital gains and non-recurring items1.371.150.550.36

* Net Income includes, Lucky Buy of $12.6 million offset by inventory Step-Up of $0.4 million which is included in the GAAP financials among Cost of Sales.

  
 
 

DELTA GALIL INDUSTRIES LTD.
Concise Consolidated Cash Flow Reports

 

For the year ended December 31

2012

 

2011

Thousands of Dollars

Cash flows from operating activities:
Net profit for the period56,97727,575

Adjustments required to reflect cash flows deriving from operating activities

31,80718,135
Interest paid in cash(8,475)(5,720)
Interest received in cash604750
Taxes on income paid in cash, net(8,009)(4,419)
Net cash generated from operating activities72,90436,321
Cash flows from investment activities:
Cash added from purchased subsidiary12,258-
Purchase of subsidiary(86,052)-
Acquisition of activity-(4,000)
Acquisition of fixed assets and intangible assets(21,550)(12,490)
Restricted cash deposit(2,822)-
Receiving grant for the purchase of fixed assets-178
Proceeds from sale of assets held for sale414,489
Proceeds from selling of fixed asset765218
Proceeds from a given option exercised as held for sale--
Proceeds from sale of real estate in Naharia, net of related expense2,010-
Loans to subcontractor(400)(888)
Repayment of long-term receivables balances--
Loans granted to employees(144)(37)
Employees' loans return15531
Others Read Full Story

Want more news like this?

Sign up for Finance Report by AOL and get everything from business news to personal finance tips delivered directly to your inbox daily!

Subscribe to our other newsletters

Emails may offer personalized content or ads. Learn more. You may unsubscribe any time.

From Our Partners

Gift Finder Promo
More to Explore
Sat, Dec 10
Set Your Location
City, State, or Zip