Delta Galil's Net Flat in Fourth Quarter
Women's Wear Daily
1 March 2015

wwd

Women’s Wear Daily
By Arnold Karr
February 26, 2015

Delta Galil Industries Ltd. saw its fourth-quarter profits rise a fraction as currency headwinds reduced its sales increase by about 4 percentage points.

For the three months ended Jan. 31, the Tel Aviv-based activewear and underwear producer reported net income of $14.53 million, or 56 cents a diluted share, less than 0.1 percent above the $14.52 million, or 57 cents, reported in the comparable quarter of 2013.

Excluding a $1.1 million expense incurred in its pursuit of an acquisition that it didn’t succeed in executing, adjusted earnings rose 5.6 percent to $15.3 million, or 60 cents, from the prior-year figure.

Sales in the quarter were sufficient to elevate the company above the $1 billion mark for the year, rising 8.4 percent to $277.4 million from $255.9 million. Eliminating the effect of currency translation, sales moved ahead 12 percent.

Delta Galil registered improvement in operating profit in all four of its business units — U.S., Global Upper market, Germany-based Schiesser and Delta Israel — and sales growth in all but Schiesser, which weathered a sales decline of 3 percent as conditions in Germany proved challenging.

However, sales in the U.S., the largest of the four segments, grew fastest, jumping 19 percent to $123 million.

Isaac Dabah, chief executive officer of the firm, commented that the full year brought increases in operating income, cash flow and net income.

“We also continued to add or expand several lines, including the introduction of Avia branded sports products in Wal-Mart and new joint ventures in socks and seamless products,” he said. “And we have added significant management talent in areas that will drive our future growth.”

Maurice Reznik, the former ceo of Maidenform Brands, joined Delta Galil as ceo of intimate apparel for the U.S. and U.K. and president of the U.S. business on Jan. 5.

For the full year, net income, including the acquisition expense and prior-year non-recurring items, increased 11.3 percent to $47.4 million, or $1.82, from $42.7 million, or $1.69, in the prior year.

Sales grew 5.9 percent to $1.03 billion from $974.7 million.

Assuming exchange rates of $1.14 per euro and 3.9 New Israeli shekels per dollar, Delta expects sales to rise 3 to 5 percent, or 7 to 9 percent in constant currency. Full-year earnings are expected to be flat to up 6 percent, or 12 to 18 percent without the impact of currency translation.

post_banner_14_q4