6th consecutive year of sales growth
First year to cross the $1 billion mark, with improved
profitability
Mr. Isaac Dabah, Delta Galil CEO: "We summarize today six years of
growth and increased profitability. With $167 million cash on hand, a
strong balance sheet and strengthened management, we are ready to rise
to the next level."
2014 Fourth Quarter Highlights
-
Sales increased to $277.4 million in the 2014 fourth quarter, up 8%
from the same period of 2013, sales in original currency increased by
12%.
-
2014 sales crossed $1 billion and amounted to $1,031.9 million, for a
6th consecutive year of growth.
-
Operating income was $22.3 million in the 2014 fourth quarter before
one-time items, up 6% from a year ago.
-
EBITDA was $28.0 million or 10.1% of sales in the 2014 fourth quarter,
increasing 4% compared to the 2013 fourth quarter.
-
Net income excluding non-recurring items rose to $15.3 million in the
2014 fourth quarter, increasing 6% from the comparable amount a year
ago.
-
Diluted earnings per share attributed to shareholders rose to $0.60
for the 2014 fourth quarter, excluding non-recurring items, rising 5%
from a year ago.
-
Operating cash flow in 2014 amounted to $53.3 million compared to
$46.2 million in 2013.
-
Strong balance sheet was highlighted by $332.6 million in equity as of
December 31, 2014, and $167.4 million in cash and equivalents
-
Initial 2015 financial guidance: Full-year 2015 sales are expected to
range between $1,065 million-$1,085 million, representing an increase
of 3%-5%, equivalent to 7% to 9% in constant currency. Full-year 2015
diluted EPS is expected to range between $1.88-$2.00.
-
The Board of Directors declared a dividend of $3.5 million or $0.139
per share, to be distributed on March 24, 2015. The determining and
"ex-dividend" date will be March 9, 2015, per the Tel Aviv Stock
Exchange.
-
Isaac Dabah, CEO of Delta Galil, stated: “Our performance in 2014 set
records in many key areas, including our first full year of sales over
$1 billion, and meaningful increases in operating income, cash flow
and net income. As a global enterprise, we are capitalizing on the
growth potential of diverse markets around the world. Delta Galil is
relentless in seeking new opportunities to innovate, grow and enhance
our shareholder value.”
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, children, Leisurewear and
Activewear, today reported its financial results for the fourth quarter
and full year ended December 31, 2014.
Delta Galil reported sales of $277.4 million for the fourth quarter of
2014, an increase of 8% from $255.9 million for the same quarter of 2013
and 12% increase in original currency. Sales for the full year 2014 were
$1,031.9 million, an increase of 6% from $974.7 million in 2013.
Representing the Company’s first full year of sales over $1 billion, the
annual increase reflected top-line growth in all key geographic regions,
as well as the positive impact of Delta Galil’s diverse customer mix and
growing sales of branded products.
Operating income was $22.3 million for fourth quarter of 2014 before
one-time items, up 6% from $21.1 million in the same quarter of 2013.
For the full year 2014, operating income before one-time items rose 9%,
to $74.4 million from $67.9 million a year earlier.
The growth in full year operating income reflected the Company’s growing
sales and higher gross profit margin, partly offset by increased selling
and marketing expenses as it invested in the growth of its business.
Gross profit was 30.7% of sales for the fourth quarter and 30.8% for the
full year 2014, compared with 32.1% of sales for the fourth quarter and
30.2% for the full year 2013.
Net income excluding non-recurring items was $15.3 million in the 2014
fourth quarter, a 6% increase compared with $14.5 million a year
earlier. Diluted earnings per share attributed to shareholders,
excluding non-recurring items, rose to $0.60 for the 2014 fourth
quarter, from $0.57 for the 2013 period. For the full year 2014, net
income excluding non-recurring items was $48.4 million or $1.86 per
diluted share, compared to $44.3 million or $1.75 per diluted share for
2013.
Management Comment
Isaac Dabah, CEO of Delta Galil, stated: “Our performance in 2014 set
records in many key areas, including our first full year of sales over
$1 billion, and meaningful increases in operating income, cash flow and
net income. As a global enterprise, we are capitalizing on the growth
potential of diverse markets around the world. In the past year, our
progress included double-digit top-line growth and improved
profitability for Delta USA, higher sales and EBIT at Delta Israel, and
solid sales growth and higher EBIT in our Schiesser business in Europe.
We also continued to add or expand several lines, including the
introduction of Avia branded sports products in Walmart, and new joint
ventures in socks and seamless products. And we have added significant
management talent in areas that will drive our future growth.”
“Delta Galil is relentless in seeking new opportunities to innovate,
grow and enhance our shareholder value. In 2015, we expect to benefit
from our newer relationships, such as Lacoste and Marc O’Polo, our first
full year with Avia, and continued expansion of our Activewear business.
At the same time, we are driving improvements in the production area,
and will invest in a new facility in Vietnam to support growth in the
coming years. In addition to organic growth, we remain open to strategic
acquisitions that would leverage our expertise in design, production,
marketing and our financial strength.”
EBITDA, Cash Flow, Net Debt and Equity
EBITDA was $28.0 million in the 2014 fourth quarter, increasing 4%
compared with $26.9 million in the same period of 2013. As a percentage
of sales, EBITDA was 10.1% in the 2014 fourth quarter and 10.5% a year
earlier. For the full year 2014, EBITDA rose 8% to $93.0 million or 9.0%
of sales, compared to $86.2 million or 8.8% of sales in 2013.
Operating cash flow was $34.9 million in the fourth quarter and $53.3
million in the full year 2014. In the respective periods of 2013,
operating cash flow was $22.1 million and $46.2 million.
Net financial debt held relatively steady at $64.5 million at December
31, 2014 versus $63.3 million a year earlier.
The net financial debt to EBITDA ratio remained unchanged at 0.7 at
December 31, 2014 and December 31, 2013.
Equity on December 31, 2014 was $332.6 million, up from $321.9 million a
year earlier.
2015 Financial Guidance
Delta Galil provided its 2015 financial guidance, excluding
non-recurring items which is based on current market conditions and
current exchange rate of $1.14 per euro and 3.9NIS per US$.
The Company estimates that the impact of the changes in 2015 expected
rates compared to the average exchange rates in 2014, on the operating
income and EBITDA are approximately $8.0 million, on net income is
approximately $ 5.8 million and approximately $ 0.22 on diluted earnings
per share. The above effect is included in the forecasts presented below.
-
Full-year 2015 sales are expected to range between $1,065
million-$1,085 million, representing an increase of 3%-5% (equivalent
to 7% to 9% in constant currency) from 2014 actual sales of $1,031.9
million.
-
Full-year 2015 EBIT is expected to range between $75 million-$79
million, representing an increase of 1%-6% from 2014 actual EBIT of
$74.4 million, excluding the exchange rate impact the increase is
between 12%-17%.
-
Full-year 2015 EBITDA is expected to range between $94 million-$99
million, representing an increase of 1%-6% from 2014 actual EBITDA of
$93 million, excluding the exchange rate impact the increase is
between 10%-15%.
-
Full-year 2015 net income is expected to range between $48.5
million-$51.5 million, representing an increase of 0%-6% from 2014
actual net income of $48.4 million, excluding the exchange rate impact
the increase is between 12%-18%.
-
Full-year 2015 diluted EPS is expected to range between $1.88-$2.00,
representing an increase of 1%-8% from 2014 actual EPS of $1.86,
excluding the exchange rate impact the increase is between 13%-19%.
Dividend
Delta Galil declared a dividend of $3.5 million or $0.139 per share, to
be distributed on March 24, 2015. The determining and "ex-dividend" date
will be March 9, 2015, per the Tel Aviv Stock Exchange.
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.
|
|
|
DELTA GALIL INDUSTRIES LTD.
|
|
Concise Consolidated Balance Sheets
|
|
As of December 31, 2014
|
|
|
December 31
|
|
|
2014
|
|
|
2013
|
|
|
Thousands of Dollars
|
|
Assets
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
Cash and cash equivalents
|
166,958
|
|
|
97,346
|
|
Restricted Cash
|
369
|
|
|
1,448
|
|
Other accounts receivable:
|
|
|
|
|
|
Trade receivables
|
108,559
|
|
|
112,293
|
|
Taxes on income receivable
|
6,096
|
|
|
2,427
|
|
Others
|
26,202
|
|
|
9,522
|
|
Financial derivative
|
329
|
|
|
2,955
|
|
Inventory
|
181,687
|
|
|
169,303
|
|
Assets classified as held for sale
|
1,000
|
|
|
1,000
|
|
Total current assets
|
491,200
|
|
|
396,294
|
|
|
|
|
|
|
|
Non-current assets:
|
|
|
|
|
|
Long-term receivables
|
8,013
|
|
|
15,520
|
|
Investment property
|
4,132
|
|
|
4,850
|
|
Fixed assets, net of accumulated depreciation
|
98,861
|
|
|
95,797
|
|
Intangible assets, net of accumulated amortization
|
118,506
|
|
|
118,135
|
|
Deferred tax assets
|
11,348
|
|
|
9,560
|
|
Financial derivative
|
1,254
|
|
|
10,942
|
|
Total non-current assets
|
242,114
|
|
|
254,804
|
|
Total assets
|
733,314
|
|
|
651,098
|
|
|
|
|
|
December 31
|
|
|
2014
|
|
2013
|
|
|
Thousands of Dollars
|
|
|
|
|
|
Liabilities and Equity
|
|
|
|
Current liabilities:
|
|
|
|
Short-term bank loans
|
931
|
|
26,438
|
|
|
Current maturities of long-term loans
|
|
|
|
from banking corporations
|
-
|
|
150
|
|
|
Current maturities of debentures
|
23,054
|
|
17,847
|
|
|
Financial derivative
|
2,235
|
|
-
|
|
|
Other accounts payable:
|
|
|
|
Trade payables
|
80,648
|
|
71,283
|
|
|
Taxes on income payable
|
4,961
|
|
4,401
|
|
|
Others
|
57,548
|
|
56,441
|
|
|
Total current liabilities
|
169,377
|
|
176,560
|
|
|
|
|
|
|
Non-current liabilities:
|
|
|
|
Severance pay liabilities less plan assets
|
2,339
|
|
2,105
|
|
|
Other non-current liabilities
|
19,999
|
|
17,196
|
|
|
Debentures
|
197,262
|
|
129,717
|
|
|
Reserve for deferred taxes
|
2,954
|
|
3,630
|
|
|
Financial derivative
|
8,784
|
|
-
|
|
|
Total non-current liabilities
|
231,338
|
|
152,648
|
|
|
Total liabilities
|
400,715
|
|
329,208
|
|
|
|
|
|
|
Equity:
|
|
|
|
Equity attributable equity holders of the parent company:
|
|
|
|
Share capital
|
23,579
|
|
23,499
|
|
|
Share premium
|
128,274
|
|
127,024
|
|
|
Other capital reserves
|
(6,598
|
)
|
16,212
|
|
|
Retained earning
|
197,135
|
|
163,990
|
|
|
Treasury shares
|
(10,933
|
)
|
(10,996
|
)
|
|
|
331,457
|
|
319,729
|
|
|
Minority interests
|
1,142
|
|
2,161
|
|
|
Total equity
|
332,599
|
|
321,890
|
|
|
Total liabilities and equity
|
733,314
|
|
651,098
|
|
The enclosed notes constitute an integral part of these Financial
Statements
|
|
|
DELTA GALIL INDUSTRIES LTD.
|
|
Concise Consolidated Statement of Comprehensive Income
|
|
For the 3-month and 12-month periods ending December 31, 2014
|
|
|
|
|
|
|
|
|
|
|
|
For the year ended December 31
|
|
|
|
Three months ended December 31
|
|
|
|
|
2014
|
|
|
2013
|
|
|
|
|
2014
|
|
|
2013
|
|
|
|
|
Thousands of Dollars
|
|
% Increase/(Decrease)
|
|
Thousands of Dollars
|
|
% Increase/(Decrease)
|
|
Sales
|
1,031,861
|
|
|
974,719
|
|
|
6
|
%
|
|
277,398
|
|
|
255,897
|
|
|
8
|
%
|
|
Cost of sales
|
713,798
|
|
|
680,426
|
|
|
|
|
192,178
|
|
|
173,730
|
|
|
|
|
Gross profit
|
318,063
|
|
|
294,293
|
|
|
|
|
85,220
|
|
|
82,167
|
|
|
|
|
% of sales
|
30.8
|
%
|
|
30.2
|
%
|
|
|
|
30.7
|
%
|
|
32.1
|
%
|
|
|
|
Selling and marketing expenses
|
211,507
|
|
|
190,593
|
|
|
11
|
%
|
|
54,735
|
|
|
52,053
|
|
|
5
|
%
|
|
% of sales
|
20.5
|
%
|
|
19.6
|
%
|
|
|
|
19.7
|
%
|
|
20.3
|
%
|
|
|
|
Administrative and general expenses
|
34,698
|
|
|
36,250
|
|
|
(4
|
)%
|
|
8,297
|
|
|
8,459
|
|
|
(2
|
)%
|
|
% of sales
|
3.4
|
%
|
|
3.7
|
%
|
|
|
|
3.0
|
%
|
|
3.3
|
%
|
|
|
|
Other income (expenses), net
|
2,674
|
|
|
472
|
|
|
|
|
(29
|
)
|
|
(565
|
)
|
|
|
|
Share in losses (profit) of associated companies accounted for using
the equity method
|
178
|
|
|
-
|
|
|
|
|
(146
|
)
|
|
-
|
|
|
|
|
Operating income excluding non-recurring items
|
74,354
|
|
|
67,922
|
|
|
9
|
%
|
|
22,305
|
|
|
21,090
|
|
|
6
|
%
|
|
% of sales
|
7.2
|
%
|
|
7.0
|
%
|
|
|
|
8.0
|
%
|
|
8.2
|
%
|
|
|
|
Acquisition examination cost
|
1,082
|
|
|
-
|
|
|
|
|
1,082
|
|
|
-
|
|
|
|
|
Restructuring expenses
|
182
|
|
|
1,529
|
|
|
|
|
-
|
|
|
-
|
|
|
|
|
Operating income
|
73,090
|
|
|
66,393
|
|
|
|
|
21,223
|
|
|
21,090
|
|
|
|
|
Finance expenses, net
|
15,806
|
|
|
10,981
|
|
|
44
|
%
|
|
5,054
|
|
|
3,463
|
|
|
46
|
%
|
|
Profit before tax on income
|
57,284
|
|
|
55,412
|
|
|
|
|
16,169
|
|
|
17,627
|
|
|
|
|
Taxes on income
|
9,853
|
|
|
12,732
|
|
|
|
|
1,639
|
|
|
3,110
|
|
|
|
|
Net income for the period
|
47,431
|
|
|
42,680
|
|
|
11
|
%
|
|
14,530
|
|
|
14,517
|
|
|
-
|
|
|
Net income for period excluding non-recurring items, net of tax
|
48,389
|
|
|
44,254
|
|
|
9
|
%
|
|
15,325
|
|
|
14,517
|
|
|
6
|
%
|
|
Attribution of net earnings for the period
|
|
|
|
|
|
|
|
|
|
|
|
|
Attributed to company's shareholders
|
46,760
|
|
|
42,560
|
|
|
|
|
14,500
|
|
|
14,487
|
|
|
|
|
Attributed to non-controlling interests
|
671
|
|
|
120
|
|
|
|
|
30
|
|
|
30
|
|
|
|
|
|
47,431
|
|
|
42,680
|
|
|
|
|
14,530
|
|
|
14,517
|
|
|
|
|
Net diluted earnings per share attributed to shareholders of the
company
|
1.82
|
|
|
1.69
|
|
|
|
|
0.56
|
|
|
0.57
|
|
|
|
|
Net diluted earnings per share excluding non-recurring items net
of tax, attributed to shareholders of the company
|
1.86
|
|
|
1.75
|
|
|
6
|
%
|
|
0.60
|
|
|
0.57
|
|
|
5
|
%
|
|
|
|
DELTA GALIL INDUSTRIES LTD.
|
|
Concise Consolidated Cash Flow Reports
|
|
|
|
|
|
|
|
For the year ended December 31
|
|
|
2014
|
|
2013
|
|
|
Thousands of Dollars
|
|
|
|
|
|
|
Cash flows from operating activities:
|
|
|
|
|
Net profit for the period
|
47,431
|
|
|
42,680
|
|
|
Adjustments required to reflect cash flows deriving from operating
activities
|
28,352
|
|
|
28,910
|
|
|
Interest paid in cash
|
(11,693
|
)
|
|
(10,001
|
)
|
|
Interest received in cash
|
895
|
|
|
471
|
|
|
Taxes on income paid in cash, net
|
(11,652
|
)
|
|
(15,820
|
)
|
|
Net cash generated from operating activities
|
53,333
|
|
|
46,240
|
|
|
Cash flows from investment activities:
|
|
|
|
|
Acquisition of fixed assets and intangible assets
|
(26,913
|
)
|
|
(20,649
|
)
|
|
Restricted cash deposit
|
1,037
|
|
|
1,448
|
|
|
Investments in associated companies
|
(6,500
|
)
|
|
-
|
|
|
Proceeds from realization of assets held for sale, net of tax
|
-
|
|
|
6,233
|
|
|
Proceeds from sale of fixed asset
|
1,914
|
|
|
632
|
|
|
Payments related to realization of asset held for sale (Tax payment
related to the realization)
|
(1,989
|
)
|
|
3,161
|
|
|
Loans from (to) subcontractor
|
71
|
|
|
(826
|
)
|
|
Others
|
(3
|
)
|
|
(85
|
)
|
|
Net cash used for Investing activities
|
(32,383
|
)
|
|
(10,086
|
)
|
|
Cash flows from financing activities:
|
|
|
|
|
Dividends paid to non-controlling interest holders in consolidated
subsidiary
|
|
|
|
|
(1,690
|
)
|
|
(123
|
)
|
|
Long term payables credit for fixed assets purchase
|
(2,459
|
)
|
|
(1,867
|
)
|
|
Debentures principle pay down
|
(17,699
|
)
|
|
(11,285
|
)
|
|
Dividend paid
|
(13,500
|
)
|
|
(10,500
|
)
|
|
Repayment of loans and other long-term liabilities
|
(696
|
)
|
|
(3,155
|
)
|
|
Short-term credit from banking corporations, net
|
(25,173
|
)
|
|
(14,716
|
)
|
|
Debentures issuance return, excluding issuance expenses
|
115,689
|
|
|
55,704
|
|
|
Bank deposit used as security with respect of the SWAP transaction
|
(4,950
|
)
|
|
-
|
|
|
Proceeds from exercise of option by employees
|
1,115
|
|
|
2,542
|
|
|
Net cash generated from financing activities
|
50,637
|
|
|
16,600
|
|
|
Net increase in cash and cash equivalents
|
71,587
|
|
|
52,754
|
|
|
Exchange rate differences and revaluation of cash and cash
equivalents, net
|
(1,975
|
)
|
|
(883
|
)
|
|
Balance of cash and cash equivalents at the
beginning of the period
|
97,346
|
|
|
45,475
|
|
|
Balance of cash and cash equivalents at the end
of the Period
|
166,958
|
|
|
97,346
|
|
|
|
|
DELTA GALIL INDUSTRIES LTD.
|
|
Concise Consolidated Cash Flow Reports
|
|
|
|
|
|
|
For the year ended December 31
|
|
|
2014
|
|
2013
|
|
|
Thousands of Dollars
|
|
Adjustments required to reflect cash flows from operating
activities:
|
|
|
|
|
|
Revenues and expenses not involving cash flow:
|
|
|
|
|
|
Depreciation
|
|
15,851
|
|
|
15,722
|
|
|
Amortization
|
|
2,751
|
|
|
2,528
|
|
|
Cash erosion, net
|
|
652
|
|
|
1,155
|
|
|
Interest paid in cash
|
|
11,693
|
|
|
10,001
|
|
|
Interest received in cash
|
|
(895
|
)
|
|
(471
|
)
|
|
Taxes on income paid in cash, net
|
|
11,652
|
|
|
15,820
|
|
|
Deferred taxes on income, net
|
|
(2,124
|
)
|
|
(694
|
)
|
|
Severance pay liability, net
|
|
124
|
|
|
(159
|
)
|
|
Restructuring expenses ,net
|
|
(77
|
)
|
|
1,328
|
|
|
Capital gain from sale of fixed assets and asset held for Sale, net
|
|
(1,257
|
)
|
|
(1,121
|
)
|
|
Change in benefit component of options and restricted shares granted
to Employees
|
|
716
|
|
|
563
|
|
|
Change to the fair value of financial derivatives
|
|
(705
|
)
|
|
707
|
|
|
Share in losses of associated companies accounted for using the
equity method
|
|
178
|
|
|
-
|
|
|
Increase in liabilities of Long-term employee bonuses
|
|
608
|
|
|
1,266
|
|
|
Changes in long term balances
|
|
1,451
|
|
|
-
|
|
|
Others
|
|
1,552
|
|
|
(482
|
)
|
|
|
|
42,170
|
|
|
46,163
|
|
|
Changes to operating assets and liabilities:
|
|
|
|
|
|
Increase in trade receivables
|
|
(538
|
)
|
|
(2,528
|
)
|
|
Increase in other receivable and balances
|
|
(8,002
|
)
|
|
(1,302
|
)
|
|
Increase (decrease) in trade payables
|
|
11,816
|
|
|
(729
|
)
|
|
Increase in other payables
|
|
4,600
|
|
|
3,989
|
|
|
Increase in inventory
|
|
(21,694
|
)
|
|
(16,683
|
)
|
|
|
|
(13,818
|
)
|
|
(17,253
|
)
|
|
|
|
28,352
|
|
|
28,910
|
|
Contacts
Delta Galil Industries, Ltd.
Nissim Douek, +972-54-5201178
Nissim@unik.co.il
or
U.S.
Media:
Berns Communications Group
Stacy Berns/Danielle
Poggi, +1-212-994-4660
sberns@bcg-pr.com