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 equivalents

41,227

75,054

45,475

Restricted Cash

2,134

-

2,882

Other accounts receivable:

Trade receivables

110,320

94,038

108,735

Taxes on income receivable

1,780

1,229

125

Others

17,719

7,303

12,124

Financial derivative

983

92

719

Inventory

154,366

98,690

150,309

Assets classified as held for sale

6,358

1,766

6,456

Total current assets

334,887

278,172

326,765

Non-current assets:

Long-term pre-paid expenses

508

376

562

Investment property

4,610

-

4,795

Long-term receivables

10,075

1,494

12,710

Fixed assets, net of accumulated depreciation

93,910

65,682

93,019

Intangible assets, net of accumulated amortization

112,805

79,457

111,482

Deferred tax assets

9,052

7,002

8,833

Financial derivative

3,495

-

1,045

Total non-current assets

234,455

154,011

232,446

Total assets

569,342

432,183

559,211

March 31

December 31
2012

2013

2012

(Unaudited)

(Audited)

Thousands of Dollars

Liabilities and Equity

Current liabilities:

Short-term bank loans

55,028

57,024

40,175

Current maturities of long-term loans
from banking corporations

1,357

2,110

1,357

Current maturities of debentures

15,980

14,021

15,965

Other accounts payable:

Trade payables

58,606

51,161

72,351

Taxes on income payable

5,084

1,232

5,029

Others

48,847

33,684

47,479

Total current liabilities

184,902

159,232

182,356

Non-current liabilities:

Loans from financial institutions, less
current maturities

-

1,355

150

Severance pay liabilities less plan assets

2,820

1,289

2,679

Other non-current liabilities

13,576

5,927

13,543

Debentures

81,526

41,382

79,323

Financial derivative

-

1,984

-

Reserve for deferred taxes

3,881

1,005

3,361

Total non-current liabilities

101,803

52,942

99,056

Total liabilities

286,705

212,174

281,412

Equity:

Equity attributable to equity holders of the
parent company:

Share capital

23,339

23,117

23,311

Share premium

124,653

121,408

124,220

Other capital reserves

8,833

(290)

8,736

Unassigned income balance

134,614

83,273

130,364

Treasury shares

(10,996)

(9,700)

(10,996)

280,443

217,808

275,635

Minority interests

2,194

2,201

2,164

Total equity

282,637

220,009

277,799

Total liabilities and equity

569,342

432,183

559,211

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

227,255

168,067

35%

Cost of sales

170,378

136,773

Gross profit

56,877

31,294

82%

% of sales

25.0%

18.6%

Selling and marketing expenses

36,819

18,567

98%

% of sales

16.2%

11.1%

General and administrative expenses

9,417

5,991

57%

% of sales

4.1%

3.6%

Other income (expenses), net

926

(346)

Operating income

11,567

6,390

81%

% of sales

5.1%

3.8%

Finance expenses, net

2,601

2,121

23%

Income before taxes on income

8,966

4,269

110%

Taxes on income

2,310

338

Net income for the period

6,656

3,931

69%

Attribution of net earnings for the period

6,626

3,901

70%

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%

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 period

6,656

3,931

56,977

Adjustments required to reflect cash flows deriving from
operating activities

(14,794)

18,642

31,807

Interest paid in cash

(1,950)

(2,561)

(8,475)

Interest received in cash

30

320

604

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 deposit

621

-

(2,822)

Proceeds from realization of assets held for sale

348

41

41

Proceeds from the sale of fixed assets

58

500

765

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 employees

9

16

155

Others