Expanding Product Range and Retail Business Drive Sales
Growth and Higher Profitability
Quarterly Highlights
-
Sales were $168.1 million in the 2012 first quarter, up 7% from the
same period of 2011.
-
Operating income before capital gains was $6.4 million, a 60% increase
over the first quarter of 2011.
-
Net income before capital gains (net of tax) was $3.9 million in the
2012 first quarter, compared to $3.0 million a year earlier, an
increase of 30%.
-
Net diluted EPS before capital gains attributable to shareholders was
$0.16 in the 2012 first quarter, up from $0.12 in the 2011 first
quarter.
-
Net financial debt at March 31, 2012 was $40.8 million, decreasing
from $79.9 million at March 31, 2011 and $53.8 million at December 31,
2011.
-
Delta Galil declared a dividend totaling $1.9 million, or $0.0807 per
share, to be distributed on June 20, 2012. The determining and
"ex-dividend" date for this distribution will be June 6, 2012.
-
Isaac Dabah, CEO of Delta Galil, noted: “Delta Galil continues to
successfully pursue strategies to grow our branded business,
geographic presence and product breadth.”
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 of 2012.
Delta Galil reported sales of $168.1 million for the 2012 first quarter,
compared to $157.4 million for the same period last year, an increase of
7%. The sales growth was primarily driven by strong performance of the
Company’s business in North America and Israel.
Net income for the 2012 first quarter was $3.9 million before capital
gains (net of tax), increasing 30% from $3.0 million for the year-ago
quarter. Diluted earnings per share before capital gains (net of tax)
attributable to shareholders was $0.16 in Q1 2012, up from $0.12 in Q1
2011. Including capital gains, net income for the first quarter of 2011
(net of tax) was $5.8 million, or $0.24 per diluted share.
Growth in Global Markets, Continued Expansion
Isaac Dabah, CEO of Delta Galil, stated: “We have started 2012 on a
strong footing, delivering a solid performance in the first quarter. Our
sales increase primarily reflected our growth in North America, where we
have gained share in the higher end of the market, and in Israel, where
our retail business including the Delta Kids chain continues to expand.
Overall, we have continued to focus on innovation, inspired by our
‘body-before-fabric’ philosophy, with the goal of creating an expanding
portfolio of products that are differentiated in the marketplace and
have a strong consumer appeal.”
“Delta Galil continues to successfully pursue strategies to grow our
branded business, geographic presence and product breadth. In this
regard, we recently announced an agreement to acquire Schiesser AG, the
leading underwear manufacturer and marketer in Germany, in a deal that
is expected to close in July 2012. The Schiesser transaction will
significantly increase our sales of branded products, add depth in
Europe’s strongest market, and increase the Men’s component of our
business – while being solidly accretive to earnings this year.”
Increasing Gross Profit and Operating Profit
The gross profit of Delta Galil was $31.3 million in the first quarter
of 2012, an increase of 8% over the gross profit of $29.0 million for
the first quarter of 2011. Gross margin increased to 18.6% of sales for
the 2012 first quarter, from 18.4% of sales in the 2011 period.
Operating income was $6.4 million for the 2012 first quarter. This
represents an increase of 60% over the comparable operating income of
$4.0 million (before $3.6 million of capital gains from asset and
franchise agreement sales) in the 2011 first quarter. In addition to the
growth in sales, the trend in recurring operating income reflected lower
general, administrative and other expenses, largely due to favorable
currency exchange rates. The operating margin increased to 3.8% in the
recent quarter from 2.5% a year ago, excluding the effect of the capital
gains in the 2011 period.
Strengthening Financial Position
Delta Galil had $75.1 million in cash and cash equivalents on March 31,
2012, an increase from $46.8 million on March 31, 2011 and $65.8 million
on December 31, 2011, primarily as a result of a positive cash flow from
current operations. Cash flow from current operations in Q1 2012
amounted to $19.4 million, compared to a negative cash flow of $3.1
million in Q1 2011.
Net financial debt as of March 31, 2012 amounted to $40.8 million, down
from $79.9 million on March 31, 2011 and $53.8 million on December 31,
2011. The reduction in debt also was a result of the positive cash flow
from operations in the recent quarter.
Equity as of March 31, 2012 amounted to $220.0 million or 50.9% of the
total balance sheet, as compared with approximately $201.4 million or
47.9% of total balance sheet on March 31, 2011.
The Company declared a dividend totaling $1.9 million, or $0.0807 per
share, to be distributed on June 20, 2012. The determining and
"ex-dividend" date for this distribution will be June 6, 2012.
Outlook for 2012 Results
Delta Galil reconfirmed its previous estimate for 2012 business results,
as provided in the 2011 annual report (this estimate excludes any
one-time income items).
|
DELTA GALIL INDUSTRIES LTD.
Concise Consolidated Balance Sheets
As of March 31, 2012
|
|
|
|
|
|
|
|
|
|
March 31
|
|
December 31
|
|
|
|
2012
|
|
2011
|
|
2011
|
|
|
|
(Unaudited)
|
|
(Audited)
|
|
|
|
Thousands of Dollars
|
|
Assets
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
75,054
|
|
46,794
|
|
65,760
|
|
Other accounts receivable:
|
|
|
|
|
|
|
|
Trade receivables
|
|
94,038
|
|
99,826
|
|
103,444
|
|
Taxes on income receivable
|
|
1,229
|
|
30
|
|
1,434
|
|
Others
|
|
7,303
|
|
11,731
|
|
9,770
|
|
Inventory
|
|
98,690
|
|
111,070
|
|
110,824
|
|
Financial derivative
|
|
92
|
|
-
|
|
-
|
|
Assets classified as held for sale
|
|
1,766
|
|
1,766
|
|
1,766
|
|
Total current assets
|
|
278,172
|
|
271,217
|
|
292,998
|
|
|
|
|
|
|
|
|
|
Non-current assets:
|
|
|
|
|
|
|
|
Long-term pre-paid expenses
|
|
376
|
|
197
|
|
322
|
|
Long-term receivables
|
|
1,494
|
|
883
|
|
1,202
|
|
Fixed assets, net of accumulated depreciation
|
|
65,682
|
|
63,362
|
|
64,184
|
|
Intangible assets, net of accumulated amortization
|
|
79,457
|
|
76,886
|
|
77,390
|
|
Deferred tax assets
|
|
7,002
|
|
6,495
|
|
7,014
|
|
Financial derivative
|
|
-
|
|
1,629
|
|
-
|
|
Total non-current assets
|
|
154,011
|
|
149,452
|
|
150,112
|
|
Total assets
|
|
432,183
|
|
420,669
|
|
443,110
|
|
|
|
March 31
|
|
December 31
|
|
|
|
2012
|
|
2011
|
|
2011
|
|
|
|
(Unaudited)
|
|
(Audited)
|
|
|
|
Thousands of Dollars
|
|
Liabilities and Equity
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
Short-term bank loans
|
|
57,024
|
|
61,969
|
|
62,053
|
|
Current maturities of long-term loans
|
|
|
|
|
|
|
|
from banking corporations
|
|
2,110
|
|
2,110
|
|
2,110
|
|
Current maturities of debentures
|
|
14,021
|
|
-
|
|
12,367
|
|
Financial derivative
|
|
-
|
|
-
|
|
297
|
|
Other accounts payable:
|
|
|
|
|
|
|
|
Trade payables
|
|
51,161
|
|
48,681
|
|
55,920
|
|
Taxes on income payable
|
|
1,232
|
|
1,951
|
|
1,770
|
|
Others
|
|
33,684
|
|
34,730
|
|
39,096
|
|
Total current liabilities
|
|
159,232
|
|
149,441
|
|
173,613
|
|
|
|
|
|
|
|
|
|
Non-current liabilities:
|
|
|
|
|
|
|
|
Loans from financial institutions, less
|
|
|
|
|
|
|
|
current maturities
|
|
1,355
|
|
3,465
|
|
1,504
|
|
Severance pay liabilities less plan assets
|
|
1,289
|
|
461
|
|
1,183
|
|
Other non-current liabilities
|
|
5,927
|
|
6,780
|
|
3,900
|
|
Debentures
|
|
41,382
|
|
59,141
|
|
41,506
|
|
Financial derivative
|
|
1,984
|
|
|
|
2,978
|
|
Reserve for deferred taxes
|
|
1,005
|
|
|
|
1,182
|
|
Total non-current liabilities
|
|
52,942
|
|
69,847
|
|
52,253
|
|
Total liabilities
|
|
212,174
|
|
219,288
|
|
225,866
|
|
|
|
|
|
|
|
|
|
Equity:
|
|
|
|
|
|
|
|
Equity attributable to equity holders of the parent company:
|
|
|
|
|
|
|
|
Share capital
|
|
23,117
|
|
23,097
|
|
23,106
|
|
Share premium
|
|
121,408
|
|
121,121
|
|
121,216
|
|
Other capital reserves
|
|
(290)
|
|
1,198
|
|
(633)
|
|
Unassigned income balance
|
|
83,273
|
|
63,086
|
|
81,084
|
|
Treasury shares
|
|
(9,700)
|
|
(9,700)
|
|
(9,700)
|
|
|
|
217,808
|
|
198,802
|
|
215,073
|
|
Minority interests
|
|
2,201
|
|
2,579
|
|
2,171
|
|
Total equity
|
|
220,009
|
|
201,381
|
|
217,244
|
|
Total liabilities and equity
|
|
432,183
|
|
420,669
|
|
443,110
|
|
DELTA GALIL INDUSTRIES LTD.
Consolidated Statement of Comprehensive Income
For the 3-month period ending March 31, 2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
First Quarter
|
|
First Quarter
|
|
% Increase
|
|
|
|
|
2012
|
|
2011
|
|
(Decrease)
|
|
|
|
|
|
|
|
|
|
|
Sales
|
|
|
168,067
|
|
157,424
|
|
7%
|
|
Cost of sales
|
|
|
136,773
|
|
128,446
|
|
|
|
Gross profit
|
|
|
31,294
|
|
28,978
|
|
8%
|
|
% of sales
|
|
|
18.6%
|
|
18.4%
|
|
|
|
Sale and marketing expenses
|
|
|
18,567
|
|
17,544
|
|
6%
|
|
% of sales
|
|
|
11.1%
|
|
11.1%
|
|
|
|
General and administrative expenses
|
|
|
5,991
|
|
6,414
|
|
(6%)
|
|
% of sales
|
|
|
3.6%
|
|
4.1%
|
|
|
|
Other expenses
|
|
|
346
|
|
1,024
|
|
|
|
Operating income before of capital gains
|
|
|
6,390
|
|
3,996
|
|
60%
|
|
% of sales
|
|
|
3.8%
|
|
2.5%
|
|
|
|
Capital gains from realization of fixed asset and from sale of
franchise agreement
|
|
|
-
|
|
3,597
|
|
|
|
Operating income
|
|
|
6,390
|
|
7,593
|
|
(16%)
|
|
Finance expenses, net
|
|
|
2,121
|
|
1,035
|
|
105%
|
|
Income before taxes on income
|
|
|
4,269
|
|
6,558
|
|
|
|
Taxes on income
|
|
|
338
|
|
712
|
|
|
|
Net income for the period
|
|
|
3,931
|
|
5,846
|
|
(33%)
|
|
Net income before of capital gains net of tax for the period
|
|
|
3,931
|
|
3,016
|
|
30%
|
|
Net diluted earnings per share attributable to Company
shareholders:
|
|
|
0.16
|
|
0.24
|
|
(33%)
|
|
Net diluted earnings per share before capital gains net of tax,
attributable to Company shareholders
|
|
|
0.16
|
|
0.12
|
|
33%
|
|
DELTA GALIL INDUSTRIES LTD.
Consolidated Cash Flow Reports
For the 3-month period ending March 31, 2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ending
|
|
|
|
Three months ended March 31
|
|
December 31
|
|
|
|
2012
|
|
2011
|
|
2011
|
|
|
|
(Unaudited)
|
|
(Audited)
|
|
|
|
Thousands of Dollars
|
|
Cash flows from operating activities
|
|
|
|
|
|
|
|
Net profit for the period
|
|
3,931
|
|
5,846
|
|
27,575
|
|
Adjustments required to reflect cash flows deriving from
|
|
|
|
|
|
|
|
operating activities
|
|
18,642
|
|
(7,414)
|
|
18,135
|
|
Interest paid in cash
|
|
(2,561)
|
|
(1,707)
|
|
(5,720)
|
|
Interest received in cash
|
|
320
|
|
159
|
|
750
|
|
Taxes on income refunded (paid) in cash, net
|
|
(939)
|
|
3
|
|
(4,419)
|
|
Net cash generated (used) in operating activities
|
|
19,393
|
|
(3,113)
|
|
36,321
|
|
Cash flows from investment activities:
|
|
|
|
|
|
|
|
Acquisition of operation
|
|
-
|
|
-
|
|
(4,000)
|
|
Acquisition of fixed assets and intangible assets
|
|
(2,190)
|
|
(2,588)
|
|
(12,490)
|
|
Grant received for acquisition of fixed assets
|
|
-
|
|
-
|
|
178
|
|
Proceeds from realization of assets held for sale
|
|
41
|
|
3,767
|
|
4,489
|
|
Payments related to realization of asset held for sale
|
|
(461)
|
|
-
|
|
-
|
|
Proceeds from amortization of fixed assets
|
|
500
|
|
70
|
|
218
|
|
Loan to subcontractor
|
|
(400)
|
|
-
|
|
(888)
|
|
Loans granted to employees
|
|
(13)
|
|
(2)
|
|
(37)
|
|
Repayment of loans from employees
|
|
16
|
|
15
|
|
31
|
|
Others
|
|
(222)
|
|
-
|
|
(208)
|
|
Net cash from (used in) investment activities
|
|
(2,729)
|
|
1,262
|
|
(12,707)
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
Dividends paid to non-controlling interest holders in consolidated
subsidiary
|
|
-
|
|
-
|
|
(133)
|
|
Dividend paid
|
|
(2,000)
|
|
(2,000)
|
|
(6,000)
|
|
Repayment of loans and other long-term liabilities
|
|
(150)
|
|
(150)
|
|
(2,229)
|
|
Short-term credit from banking corporations, net
|
|
(5,162)
|
|
4,159
|
|
4,194
|
|
Proceeds from exercise of employee options
|
|
203
|
|
161
|
|
265
|
|
Net cash deriving from (used in) financing activities
|
|
(7,109)
|
|
2,170
|
|
(3,903)
|
|
Net increase in cash and cash equivalents
|
|
9,555
|
|
319
|
|
19,711
|
|
Exchange rate differences and revaluation of cash and cash
equivalents, net
|
|
(261)
|
|
260
|
|
(166)
|
|
Balance of cash and cash equivalents at the beginning of the
period
|
|
65,760
|
|
46,215
|
|
42,215
|
|
Balance of cash and cash equivalents at the end of the period
|
|
75,054
|
|
46,794
|
|
65,760
|
|
DELTA GALIL INDUSTRIES LTD.
Concise Consolidated Cash Flow Reports
For the 3-month period ending March 31, 2012
|
|
|
|
|
|
|
|
|
|
|
|
Year Ending
|
|
|
|
Three months ended March 31
|
|
December 31
|
|
|
|
2012
|
|
2011
|
|
2011
|
|
|
|
(Unaudited)
|
|
(Audited)
|
|
|
|
Thousands of Dollars
|
|
Adjustments required to reflect cash flows
|
|
|
|
|
|
|
|
from operating activities:
|
|
|
|
|
|
|
|
Revenues and expenses not involving cash flow:
|
|
|
|
|
|
|
|
Depreciation
|
|
2,192
|
|
2,368
|
|
9,660
|
|
Amortization
|
|
547
|
|
464
|
|
2,182
|
|
Cash erosion (revaluation), net
|
|
261
|
|
(260)
|
|
166
|
|
Interest paid in cash
|
|
2,561
|
|
1,707
|
|
5,720
|
|
Interest received in cash
|
|
(320)
|
|
(159)
|
|
(750)
|
|
Taxes on income paid (returned) in cash, net
|
|
939
|
|
(3)
|
|
4,419
|
|
Deferred taxes on income, net
|
|
(165)
|
|
(1,051)
|
|
(392)
|
|
Severance pay liability, net
|
|
104
|
|
(11)
|
|
157
|
|
Capital gain from sale of fixed assets
|
|
-
|
|
7
|
|
(128)
|
|
Capital gain from realization of assets classified as held for sale
|
|
-
|
|
(2,330)
|
|
(2,330)
|
|
Change to the benefit component of options granted to employees
|
|
288
|
|
303
|
|
924
|
|
Change to the fair value of financial derivatives
|
|
322
|
|
757
|
|
1,034
|
|
Others
|
|
116
|
|
374
|
|
1,116
|
|
|
|
6,845
|
|
2,166
|
|
21,778
|
|
Changes to operating assets and liabilities:
|
|
|
|
|
|
|
|
Decrease (increase) in trade receivables
|
|
9,406
|
|
(9,603)
|
|
(16,352)
|
|
Increase (decrease) in other receivables
|
|
969
|
|
-
|
|
(877)
|
|
Increase (decrease) in trade payables
|
|
(5,063)
|
|
(4,834)
|
|
3,354
|
|
Decrease in other payables
|
|
(5,416)
|
|
(6,022)
|
|
(2,122)
|
|
Decrease in inventory
|
|
11,901
|
|
10,879
|
|
12,354
|
|
|
|
11,797
|
|
(9,580)
|
|
(3,643)
|
|
|
|
18,642
|
|
(7,414)
|
|
18,135
|
About Delta Galil Industries
Delta Galil Industries is a global manufacturer and marketer of branded
and private label apparel products for men, women and children. Since
its inception in 1975, the Company has continually strived to create
products that follow a body-before-fabric philosophy, placing equal
emphasis on comfort, aesthetics and quality. Delta Galil develops
innovative seamless apparel including bras, shapewear and socks;
intimate apparel for women; extensive lines of underwear for men;
babywear, activewear, sleepwear, and leisurewear. For more information,
visit www.deltagalil.com.
Safe Harbor Statement
Matters discussed in this press release contain forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995. When used in this press release, the words
"anticipate," "believe," "estimate," "may," "intend," "expect" and
similar expressions identify such forward-looking statements. Actual
results, performance or achievements could differ materially from those
contemplated, expressed or implied by the forward-looking statements
contained herein, and while expected, there is no guarantee that we will
attain the aforementioned anticipated developmental milestones. These
forward-looking statements are based largely on the expectations of the
Company and are subject to a number of risks and uncertainties. These
include, but are not limited to, risks and uncertainties associated
with: the impact of economic, competitive and other factors affecting
the Company and its operations, markets, product, and distributor
performance, the impact on the national and local economies resulting
from terrorist actions, and U.S. actions subsequently; and other factors
detailed in reports filed by the Company.
Contacts
For more information:
Nissim Duek
Meital Levi Tal
054-7739677
meitall@unik.co.il
or
UNIK
U.S.
Media:
Stacy Berns/Jessica Liddell
Berns Communications
Group
+1-212-994-4660
sberns@bcg-pr.com