Press Releases Details

Operating Income Rises 35% from Prior Year Excluding Non-Recurring Items on a Sales Increase of 10%

Strong Growth Driven by Branded Business, Retail, and Expanded Global Presence

Raising 2013 Guidance; Full-Year EPS Now Expected to Reach $1.71-1.75 before Non-Recurring Items

Quarterly Highlights

• Sales increased to $257.2 million in the 2013 third quarter, up 10% from the same period of 2012.
• Delta Galil delivered its 16^th consecutive quarter of year-over-year organic sales growth.
• Operating income before non-recurring items was $21.3 million in the 2013 third quarter, growing 35% from the comparable amount a year ago.
• EBITDA before non-recurring items was $25.2 million or 9.8% of sales in the 2013 third quarter, increasing 28% compared with $19.7 million before non-recurring items or 8.4% of sales in the same quarter of 2012.
• Net income attributed to shareholders before non-recurring items rose to $14.2 million in the 2013 third quarter, increasing 43% from the comparable amount in 2012.
• Diluted earnings per share attributed to shareholders before non-recurring items increased to $0.56 for the 2013 third quarter, up 37% from the comparable amount of $0.41 a year ago.
• Operating cash flow was positive $19.4 million in the 2013 third quarter, versus $4.8 million in the same period of 2012.
• The Board of Directors declared a dividend of $3 million (an increase from $2.5 million per quarter), or $0.1215 per share, to be distributed on November 20, 2013. The determining and "ex-dividend" date will be November 7, 2013, per the Tel Aviv Stock Exchange.
• Strong balance sheet was highlighted by $85.5 million in cash and a record $305.7 million in equity as of September 30, 2013.
• 2013 full-year guidance increased: sales are now expected to be $965-975 million, up from prior forecast of $940-950 million. Full-year 2013 diluted EPS before non-recurring items is now expected to be $1.71-$1.75, up from prior forecast of $1.59-$1.67.
• Isaac Dabah, CEO of Delta Galil, noted: “The Company has continued to set records for sales, net profit and EPS throughout 2013. The main growth engines driving our higher top-line and increasing profitability include our branded business, retail operations, the Schiesser acquisition and the Delta USA mass market segment. We are confident in Delta Galil’s bright future based on our dynamic growth, diversified portfolio, financial resources, strong management team and track record of meeting the needs of many of the world’s leading brands and retailers.”

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 third quarter and nine months ended September 30, 2013.

The Company reported sales of $257.2 million for the third quarter of 2013, up from $234.0 million for the same quarter last year, an increase of 10%. Sales in the first nine months of 2013 were $718.8 million, compared to $571.2 million in the same period of 2012, an increase of 26%, representing an organic sales growth of 11%.

Operating income excluding non-recurring items was $21.3 million for third quarter 2013, up 35% from $15.8 million in the same quarter of 2012. In the first nine months of 2013, operating income excluding non-recurring items was $46.8 million, compared to $31.0 million in the same period of 2012, a 51% increase. In the year-ago nine month period, total non-recurring items included a net gain of $24.2 million pre-tax, relating to a capital gain from a real estate sale and negative goodwill relating to the Schiesser acquisition, net of Schiesser acquisition costs, fixed asset impairment and restructuring expenses. In 2013, non-recurring items included a restructuring expense of $3.5 million relating to the consolidation of 6 manufacturing sites into 4 sites in Egypt, offset by restructuring income of $2.0 million from the reversal of a prior year restructuring accrual.

A key contributor to the higher operating income was an expanding gross profit margin, which rose to 27.4% in the 2013 third quarter from 24.3% a year ago. This was partly offset by higher selling, marketing, general and administrative expenses as Delta Galil invested in the growth of its business.

Net income attributable to shareholders excluding non-recurring items was $14.2 million in the 2013 third quarter, compared to $10.0 million excluding non-recurring items in the same quarter of 2012, a 43% increase. Diluted earnings per share attributed to shareholders excluding non-recurring items were $0.56 for the 2013 third quarter, up from $0.41 for the 2012 third quarter excluding non-recurring items. For the first nine months of 2013, net income attributable to shareholders excluding non-recurring items was $29.6 million or $1.18 per diluted share, compared to $20.0 million or $0.81 per diluted share excluding non-recurring items for the same period of 2012.

Management Comment

Isaac Dabah, CEO of Delta Galil, stated: “The Company has continued to set records for sales, net profit and EPS throughout 2013. The main growth engines driving our higher top-line and increasing profitability include our branded business, retail operations, the Schiesser acquisition and the Delta USA mass market segment. As a result of the powerful forward momentum in our business, we are pleased to be able to raise our financial guidance and reward our shareholders with a higher dividend payout. Credit for our solid accomplishments goes to our senior management team, which is sharply focused on driving innovation, excellence and shareholder value.”

“Looking ahead, we are continuing to invest in innovation and a world-class supply chain. For example, we are shifting some production from Egypt to Southeast Asia to satisfy our customers’ requirements for dependable, timely and cost-efficient manufacturing processes. We are confident in Delta Galil’s bright future based on our dynamic growth, diversified portfolio, solid financial resources, strong management team and track record of meeting the needs of many of the world’s leading brands and retailers.”

EBITDA, Cash Flow, Net Debt , Equity and Dividend Declaration

EBITDA before non-recurring items was $25.2 million or 9.8% of sales in the 2013 third quarter, increasing 28% compared with $19.7 million before non-recurring items or 8.4% of sales in the same quarter of 2012. For the first nine months of 2013, EBITDA before non-recurring items was $59.3 million or 8.2% of sales, rising 46% compared with $40.7 million before non-recurring items or 7.1% of sales in the same 2012 period.

Operating cash flow was positive $19.4 million in the 2013 third quarter, versus $4.8 million in the same period of 2012.

Net financial debt decreased substantially, to $85.4 million at September 30, 2013 from $109.4 million a year earlier.

Equity on September 30, 2013 was a record $305.7 million, compared to $259.0 million a year earlier.

Delta Galil declared a dividend of $3.0 million (an increase from $2.5 million per quarter), or $0.1215 per share, to be distributed on November 20, 2013. The determining and "ex-dividend" date will be November 7, 2013, per the Tel Aviv Stock Exchange.

Raising Guidance for 2013

The Company today increased its 2013 financial guidance, reflecting a strong outlook for sales and profitability:

• Full-year 2013 sales are expected to range between $965 million-$975 million, representing an average increase of over 18.6% from 2012 sales of $817.8 million. (Prior forecast was $940 million-$950 million).
• Full-year 2013 EBIT before non-recurring items is expected to range between $66.5 million-$68.5 million, representing an average increase of over 33.2% from 2012 EBIT before capital gains and one-time items of $50.7 million. (Prior forecast was $61 million-$65 million).
• Full-year 2013 EBITDA before non-recurring items is expected to range between $83.4 million-$85.4 million, representing an average increase of over 30.2% from 2012 EBITDA (2012 EBITDA was $64.8 million).
• Full-year 2013 net income before non-recurring items is expected to range between $43.0 million-$44.5 million, representing an average increase of over 29.5% from 2012 net income before one-time items of $33.8 million. (Prior forecast was $40 million-$42 million).
• Full-year 2013 diluted EPS before non-recurring items is expected to range between $1.71-$1.75, representing an average increase of nearly 26.2% from 2012 EPS before capital gains and one-time items of $1.37. (Prior forecast was $1.59-$1.67).

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 Delta Galil Industries, Ltd.
Nissim Douek, +972-54-5201178
Nissim@unik.co.il
or
U.S. Media:
Berns Communications Group
Stacy Berns/Melissa Jaffin
+1-212-994-4660
sberns@bcg-pr.com