Delta Galil Reports Strong Growth for 2013 First Quarter

Delta Galil Reports Strong Growth for 2013 First Quarter

Performance Distinguished by Sharply Rising Sales and Profits

Company Expects Sales, EBIT, Net Income and EPS for 2013 to be at "Higher End of the Forecast Range"

  • Sales reached $227.3 million in the 2013 first quarter, up 35% from the same period of 2012.
  • Delta Galil achieved its 14th consecutive quarter of year-over-year sales growth.
  • Operating income was $11.6 million in the 2013 first quarter, an 81% increase from a year ago.
  • Net income attributed to shareholders was $6.6 million in the 2013 first quarter, up 70% from the same 2012 period.
  • Diluted earnings per share attributed to shareholders rose to $0.26 for the 2013 first quarter, a 63% increase from $0.16 a year ago.
  • The Board of Directors declared a dividend of approximately $2.5 million, or $0.1019 per share, to be distributed on June 11, 2013. The determining and "ex-dividend" date will be May 29, 2013.
  • Isaac Dabah, CEO of Delta Galil, noted: "The Company began 2013 on an extremely strong footing, delivering the highest first quarter sales in our history. We will continue to invest in product innovation, expanding our successful Schiesser acquisition and enhancing our capacity for continued profitable growth. We estimate that our 2013 results will be at the higher end of the forecast range."

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 first quarter ended March 31, 2013.

Delta Galil reported quarterly sales of $227.3 million for the first quarter of 2013, up from $168.1 million for the same quarter last year, an increase of 35%. The continuation of the Company's strong top-line trend reflected its acquisition of Schiesser Group in July 2012, increasing sales across all geographic regions, and higher sales to major customers in a broad range of categories.

Operating income was $11.6 million for the first quarter of 2013, increasing 81% from $6.4 million in the same quarter of 2012. A key contributor to higher operating income was the expansion of the gross profit margin to 25.0% from 18.6% comparing the first quarter of 2012. This was partly offset by higher selling, marketing, general and administrative expenses.

Net income attributable to shareholders was $6.6 million in the first quarter of 2013, compared to $3.9 million in the same quarter of 2012, a 70% increase. Diluted earnings per share attributed to shareholders increased by 63% and amounted to $0.26 for the 2013 first quarter, compared to $0.16 for the 2012 first quarter.

Management Comment:
Record First Quarter Sales Driven by Diverse Customers and Regions

Isaac Dabah, CEO of Delta Galil, stated: "The Company began 2013 on an extremely strong footing, delivering the highest first quarter sales in our history. Our top-line performance benefitted from organic growth mainly in the North American and the Israeli markets, as well as from the Schiesser acquisition. Based on our excellent first quarter results, we expect that sales, EBIT, net income and EPS for 2013 will be at the higher end of the forecast ranges. At the same time, we will continue to invest in product innovation, expanding our successful Schiesser acquisition and enhancing our capacity for continued profitable growth."

EBITDA, Equity, Dividend Declaration

EBITDA was $15.8 million or 6.9% of sales in the 2013 first quarter, increasing 73% compared with $9.1 million or 5.4% of sales in the same period of 2012.

EBITDA for the twelve trailing months ending March 31, 2013 reached $71.4 million.

Equity on March 31, 2013 was a record $282.6 million, compared to $220.0 million a year earlier.

Delta Galil declared a dividend of $2.5 million, or $0.1019 per share, to be distributed on June 11, 2013. The determining and "ex-dividend" date will be May 29, 2013.

Continued Strong Outlook for 2013

The Company reiterates its 2013 forecast and expects that the results will be at the higher end of the forecast range.

 

DELTA GALIL INDUSTRIES LTD.

Concise Consolidated Balance Sheets

As of March 31, 2013

    

March 31

December 31
2012

2013

2012

(Unaudited)

(Audited)

Thousands of Dollars

 
Assets
Current assets:
Cash and cash equivalents41,22775,05445,475
Restricted Cash2,134-2,882
Other accounts receivable:
Trade receivables110,32094,038108,735
Taxes on income receivable1,7801,229125
Others17,7197,30312,124
Financial derivative98392719
Inventory154,36698,690150,309
Assets classified as held for sale6,3581,7666,456
Total current assets334,887278,172326,765
 
Non-current assets:
Long-term pre-paid expenses508376562
Investment property4,610-4,795
Long-term receivables10,0751,49412,710
Fixed assets, net of accumulated depreciation93,91065,68293,019
Intangible assets, net of accumulated amortization112,80579,457111,482
Deferred tax assets9,0527,0028,833
Financial derivative3,495-1,045
Total non-current assets234,455154,011232,446
Total assets569,342432,183559,211
 
 
  

March 31

 

December 31
2012

2013

 

2012

(Unaudited)

(Audited)

Thousands of Dollars

 
Liabilities and Equity
Current liabilities:
Short-term bank loans55,02857,02440,175

Current maturities of long-term loans
 from banking corporations

 

1,3572,1101,357
Current maturities of debentures15,98014,02115,965
Other accounts payable:
Trade payables58,60651,16172,351
Taxes on income payable5,0841,2325,029
Others48,84733,68447,479
Total current liabilities184,902159,232182,356
 
Non-current liabilities:

Loans from financial institutions, less
 current maturities

-1,355150
Severance pay liabilities less plan assets2,8201,2892,679
Other non-current liabilities13,5765,92713,543
Debentures81,52641,38279,323
Financial derivative-1,984-
Reserve for deferred taxes3,8811,0053,361
Total non-current liabilities101,80352,94299,056

 

Total liabilities286,705212,174281,412
 
Equity:

Equity attributable to equity holders of the
parent company:

Share capital23,33923,11723,311
Share premium124,653121,408124,220
Other capital reserves8,833(290)8,736
Unassigned income balance134,61483,273130,364
Treasury shares(10,996)(9,700)(10,996)
280,443217,808275,635
Minority interests2,1942,2012,164
Total equity282,637220,009277,799
Total liabilities and equity569,342432,183559,211
 
   

DELTA GALIL INDUSTRIES LTD.

Consolidated Statement of Comprehensive Income

For the 3-month period ending March 31, 2013

 
 Three months ended on 
March 31% Increase
 2013 2012
 Thousands of dollars 
Sales 227,255168,06735%
Cost of sales 170,378  136,773 
Gross profit 56,87731,29482%
% of sales25.0%18.6%
Selling and marketing expenses36,81918,56798%
% of sales16.2%11.1%
General and administrative expenses9,4175,99157%
% of sales4.1%3.6%
Other income (expenses), net  926  (346) 
Operating income11,5676,39081%
% of sales5.1%3.8%
Finance expenses, net  2,601  2,121 23%
Income before taxes on income8,9664,269110%
Taxes on income  2,310  338 
Net income for the period  6,656  3,931 69%
Attribution of net earnings for the period6,6263,90170%
Attributed to company's shareholders  30  30 
Attributed to non-controlling interests  6,656  3,931 

Net diluted earnings per share attributable to Company
shareholders

  0.26 

 

 0.16 63%
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DELTA GALIL INDUSTRIES LTD.

Consolidated Cash Flow Reports

For the 3-month period ending March 31, 2013

 
  

Year Ending

 

Three months ended March 31

December 31

2013

 

2012

2012

(Unaudited)

(Audited)

Thousands of Dollars

     
Cash flows from operating activities
Net income for the period6,6563,93156,977

Adjustments required to reflect cash flows deriving from
 operating activities

(14,794)18,64231,807
Interest paid in cash(1,950)(2,561)(8,475)
Interest received in cash30320604
Taxes on income paid in cash, net  (3,215)   (939)  (8,009) 
Net cash generated from (used in) operating activities  (13,273)   19,393  72,904 
Cash flows from investment activities:
Cash added from purchased subsidiary--12,258
Purchase of subsidiary--(86,052)
Acquisition of fixed assets and intangible assets(4,586)(2,190)(21,550)
Restricted cash deposit621-(2,822)
Proceeds from realization of assets held for sale3484141
Proceeds from the sale of fixed assets58500765
Payments related to realization of asset held for sale-(461)2,010
Loan to subcontractors, net(173)(400)(400)
Loans granted to employees(7)(13)(144)
Repayment of loans from employees916155
Others