Sales Increase 13% in Original Currency
Operating Income Rises 3% Compared to 2014 First Quarter
Reaffirms 2015 Guidance; Sales Expected to Reach $1,065
Million-$1,085 Million and Full-Year EPS Expected to Reach $1.88-2.00
2015 First Quarter Highlights
-
Sales increased to $252.8 million in the 2015 first quarter, an
increase of 13% in original currency (or 6% after the effect of
currency translation).
-
Operating income was $15.3 million in the 2015 first quarter, growing
3% from the comparable period a year ago.
-
EBITDA was $19.6 million in the 2015 first quarter, increasing 3%
compared with the same quarter of 2014.
-
Net income attributed to shareholders rose to $8.9 million in the 2015
first quarter, increasing 2% from the year-ago period.
-
Diluted earnings per share attributed to shareholders increased to
$0.35 for the 2015 first quarter, up 3% from $0.34 a year ago.
-
Financial guidance for 2015 was reaffirmed: full-year sales expected
to be a record $1,065 million-$1,085 million, rising 7%-9% in constant
currency. Full-year 2015 diluted EPS is expected to be $1.88- $2.00.
-
The Board of Directors declared a dividend of $3.5 million or $0.139
per share, to be distributed on May 28, 2015. The determining and
"ex-dividend" date will be May 19, 2015, per the Tel Aviv Stock
Exchange.
-
Strong balance sheet was highlighted by $328.2 million in equity and
$145.3 million in cash as of March 31, 2015.
-
Isaac Dabah, CEO of Delta Galil, stated: “Our balanced and diversified
mix of businesses, products and markets – along with our strategic
efforts to grow in areas such as branded products and activewear –
drove solid momentum in sales and earnings in the 2015 first quarter..
And we are investing in new products and resources to drive sustained
profitable growth and long-term 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 and children, as well as
leisurewear and activewear, today reported its financial results for the
first quarter ended March 31, 2015.
The Company reported sales of $252.8 million for the first quarter of
2015, up from $238.1 million for the same quarter last year, an increase
of 6% after the effect of currency translation, and a 13% increase in
original currency. The growth in sales reflected increases in several
geographic markets.
Operating income was $15.3 million for first quarter 2015, up 3% from
$14.8 million in the same quarter of 2014. The growth in operating
income was driven primarily by higher sales.
Net income attributable to shareholders was $8.9 million in the 2015
first quarter, compared to $8.7 million in the same quarter of 2014, a
2% increase. Diluted earnings per share attributed to shareholders were
$0.35 for the 2015 first quarter, up from $0.34 for the 2014 first
quarter.
Management Comment
Isaac Dabah, CEO of Delta Galil, stated: “Our balanced and diversified
mix of businesses, products and markets – along with our strategic
efforts to grow in areas such as branded products and activewear – drove
solid momentum in sales and earnings in the 2015 first quarter.. And we
are investing in new products and resources to drive sustained
profitable growth and long-term shareholder value.”
“The strongest contributors to our sales growth globally have been North
America, Germany and Israel. Branded products continue to contribute a
larger proportion of our sales, reflecting our strategy to grow this
aspect of our business in recent years. We also are benefitting from our
focus on activewear, which is one of the fastest growing segments of the
apparel industry, and where our strengths in seamless products and
innovative fabrics provide Delta Galil with a sharp competitive edge.”
“Delta Galil’s performance in 2015 will benefit from new products and
licensing relationships with leading brands that we have launched during
the first quarter of 2015, such as Lacoste and Marc O'Polo. In
Activewear, we have licenses with Avia and Kenneth Cole, and a design
and manufacturing agreement with Asics, among others. We also are
continuing to invest in additional manufacturing capacity, as well as in
our retail stores in Europe and Israel. And, with a solid cash position
of $145.3 million, we have the financial resources to support our
investments in innovation, growth and progress.”
EBITDA, Cash Flow, Net Debt, Equity and Dividend
EBITDA was $19.6 million or 7.8% of sales in the 2015 first quarter,
increasing 3% compared with $19.0 million or 8.0 % of sales in the same
quarter of 2014.
Operating cash flow was negative $19.8 million in the 2015 first
quarter, versus negative $6.6 million in the same period of 2014. The
increase in the negative operating cash flow in the 2015 first quarter
was due to a $33.5 million increase in working capital, compared with a
moderate working capital increase of $18.7 million in the same quarter
of 2014, reflecting the seasonality of the business.
Net financial debt as of March 31, 2015 was $83.7 million, compared to
$83.2 million as of March 31, 2014 and $64.5 million as of December 31,
2014. The increase in the net financial debt as of March 31, 2015
compared to December 31, 2014 is attributed mainly to the negative
operating cash flow.
The net financial debt to EBITDA ratio remained unchanged at 0.9 for
both the first quarter of 2015 and 2014.
Equity on March 31, 2015 was $328.2 million, compared to $328.6 million
a year earlier.
Delta Galil declared a dividend of $3.5 million, or $0.139 per share, to
be distributed on May 28, 2015. The determining and "ex-dividend" date
will be May 19, 2015, per the Tel Aviv Stock Exchange.
Reaffirming Guidance for 2015
The Company today reiterated its 2015 financial guidance, excluding
non-recurring items, which is based on current market conditions and
current exchange rates of $1.12 per Euro and 3.90NIS per US$, reflecting
a strong outlook for sales and profitability.
-
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%.
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 March 31, 2015
|
|
|
|
|
|
|
|
|
|
|
|
March 31
|
|
December 31
|
|
|
|
|
2015
|
|
2014
|
|
2014
|
|
|
|
|
(Unaudited)
|
|
(Audited)
|
|
|
|
|
Thousands of Dollars
|
|
Assets
|
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
145,341
|
|
51,228
|
|
166,958
|
|
Restricted Cash
|
|
|
409
|
|
1,561
|
|
369
|
|
Other accounts receivable:
|
|
|
|
|
|
|
|
|
Trade receivables
|
|
|
110,292
|
|
107,384
|
|
108,559
|
|
Taxes on income receivable
|
|
|
5,704
|
|
4,632
|
|
6,096
|
|
Others
|
|
|
16,845
|
|
11,416
|
|
26,202
|
|
Financial derivative
|
|
|
107
|
|
2,817
|
|
329
|
|
Inventory
|
|
|
185,136
|
|
178,912
|
|
181,687
|
|
Assets classified as held for sale
|
|
|
1,000
|
|
1,000
|
|
1,000
|
|
Total current assets
|
|
|
464,834
|
|
358,950
|
|
491,200
|
|
|
|
|
|
|
|
|
|
|
Non-current assets:
|
|
|
|
|
|
|
|
|
Long-term receivables
|
|
|
6,626
|
|
18,174
|
|
8,013
|
|
Investment property
|
|
|
3,621
|
|
4,817
|
|
4,132
|
|
Fixed assets, net of accumulated depreciation
|
|
|
104,360
|
|
94,793
|
|
98,861
|
|
Intangible assets, net of accumulated amortization
|
|
|
117,872
|
|
127,482
|
|
118,506
|
|
Deferred tax assets
|
|
|
10,770
|
|
10,028
|
|
11,348
|
|
Financial derivative
|
|
|
1,014
|
|
11,976
|
|
1,254
|
|
Total non-current assets
|
|
|
244,263
|
|
267,270
|
|
242,114
|
|
Total assets
|
|
|
709,097
|
|
626,220
|
|
733,314
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31
|
|
December 31
|
|
|
|
|
2015
|
|
2014
|
|
2014
|
|
|
|
|
(Unaudited)
|
|
(Audited)
|
|
|
|
|
Thousands of Dollars
|
|
Liabilities and Equity
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
Short-term bank loans
|
|
|
390
|
|
|
2,165
|
|
|
931
|
|
|
Current maturities of debentures
|
|
|
22,882
|
|
|
18,080
|
|
|
23,054
|
|
|
Financial derivative
|
|
|
2,784
|
|
|
-
|
|
|
2,235
|
|
|
Other accounts payable:
|
|
|
|
|
|
|
|
|
Trade payables
|
|
|
65,238
|
|
|
61,418
|
|
|
80,648
|
|
|
Taxes on income payable
|
|
|
5,535
|
|
|
5,241
|
|
|
4,961
|
|
|
Others
|
|
|
58,290
|
|
|
54,754
|
|
|
57,548
|
|
|
Total current liabilities
|
|
|
155,119
|
|
|
141,658
|
|
|
169,377
|
|
|
|
|
|
|
|
|
|
|
|
Non-current liabilities:
|
|
|
|
|
|
|
|
|
Severance pay liabilities less plan assets
|
|
|
2,296
|
|
|
2,238
|
|
|
2,339
|
|
|
Other non-current liabilities
|
|
|
17,031
|
|
|
20,822
|
|
|
19,999
|
|
|
Debentures
|
|
|
192,378
|
|
|
128,817
|
|
|
197,262
|
|
|
Reserve for deferred taxes
|
|
|
2,863
|
|
|
4,105
|
|
|
2,954
|
|
|
Financial derivative
|
|
|
11,181
|
|
|
-
|
|
|
8,784
|
|
|
Total non-current liabilities
|
|
|
225,749
|
|
|
155,982
|
|
|
231,338
|
|
|
Total liabilities
|
|
|
380,868
|
|
|
297,640
|
|
|
400,715
|
|
|
|
|
|
|
|
|
|
|
|
Equity:
|
|
|
|
|
|
|
|
|
Equity attributable to equity holders of the parent company:
|
|
|
|
|
|
|
|
|
Share capital
|
|
|
23,610
|
|
|
23,510
|
|
|
23,579
|
|
|
Share premium
|
|
|
128,864
|
|
|
127,194
|
|
|
128,274
|
|
|
Other capital reserves
|
|
|
(17,421
|
)
|
|
17,790
|
|
|
(6,598
|
)
|
|
Retained earning
|
|
|
202,965
|
|
|
169,915
|
|
|
197,135
|
|
|
Treasury shares
|
|
|
(10,933
|
)
|
|
(10,996
|
)
|
|
(10,933
|
)
|
|
|
|
|
327,085
|
|
|
327,413
|
|
|
331,457
|
|
|
Minority interests
|
|
|
1,144
|
|
|
1,167
|
|
|
1,142
|
|
|
Total equity
|
|
|
328,229
|
|
|
328,580
|
|
|
332,599
|
|
|
Total liabilities and equity
|
|
|
709,097
|
|
|
626,220
|
|
|
733,314
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DELTA GALIL INDUSTRIES LTD.
Concise Consolidated Statement of Income
For the 3-month period ending March 31, 2015
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended on
|
|
|
|
|
|
|
March 31
|
|
% Increase
|
|
|
|
|
2015
|
|
2014
|
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
Thousands of dollars
|
|
|
|
Sales
|
|
|
252,838
|
|
|
238,074
|
|
6
|
%
|
|
Cost of sales
|
|
|
179,972
|
|
|
165,635
|
|
|
|
Gross profit
|
|
|
72,866
|
|
|
72,439
|
|
1
|
%
|
|
% of sales
|
|
|
28.8
|
%
|
|
%30.4
|
|
|
|
Selling and marketing expenses
|
|
|
49,859
|
|
|
49,950
|
|
|
|
% of sales
|
|
|
19.7
|
%
|
|
%21.0
|
|
|
|
General and administrative expenses
|
|
|
9,280
|
|
|
8,786
|
|
6
|
%
|
|
% of sales
|
|
|
3.7
|
%
|
|
%3.7
|
|
|
|
Other income, net
|
|
|
1,423
|
|
|
1,135
|
|
|
|
Share in profit of associated companies accounted for using the
equity method
|
|
|
179
|
|
|
-
|
|
|
|
Operating income
|
|
|
15,329
|
|
|
14,838
|
|
3
|
%
|
|
% of sales
|
|
|
6.1
|
%
|
|
%6.2
|
|
|
|
Finance expenses, net
|
|
|
4,199
|
|
|
3,047
|
|
38
|
%
|
|
Income before taxes on income
|
|
|
11,130
|
|
|
11,791
|
|
|
|
Taxes on income
|
|
|
2,211
|
|
|
2,461
|
|
|
|
Net income for the period
|
|
|
8,919
|
|
|
9,330
|
|
|
|
Attribution of net earnings for the period:
|
|
|
|
|
|
|
|
|
Attributed to company's shareholders
|
|
|
8,889
|
|
|
8,749
|
|
2
|
%
|
|
Attributed to non-controlling interests
|
|
|
30
|
|
|
581
|
|
|
|
|
|
|
8,919
|
|
|
9,330
|
|
|
|
Net diluted earnings per share attributable to Company's
shareholders
|
|
|
0.35
|
|
|
0.34
|
|
3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DELTA GALIL INDUSTRIES LTD.
Concise Consolidated Cash Flow Reports
For the 3-month period ending March 31, 2015
|
|
|
|
|
|
|
Year Ending
|
|
|
|
|
Three months ended on March 31
|
|
December 31
|
|
|
|
|
2015
|
|
2014
|
|
2014
|
|
|
|
|
(Unaudited)
|
|
(Audited)
|
|
|
|
|
Thousands of Dollars
|
|
Cash flows from operating activities
|
|
|
|
|
|
|
|
|
Net profit for the period
|
|
|
8,919
|
|
|
9,330
|
|
|
47,431
|
|
|
Adjustments required to reflect cash flows deriving from
|
|
|
|
|
|
|
|
|
operating activities
|
|
|
(24,713
|
)
|
|
(12,051
|
)
|
|
28,352
|
|
|
Interest paid in cash
|
|
|
(3,786
|
)
|
|
(2,978
|
)
|
|
(11,693
|
)
|
|
Interest received in cash
|
|
|
1,211
|
|
|
102
|
|
|
895
|
|
|
Taxes on income paid in cash, net
|
|
|
(1,461
|
)
|
|
(1,017
|
)
|
|
(11,652
|
)
|
|
Net cash generated from (used in) operating activities
|
|
|
(19,830
|
)
|
|
(6,614
|
)
|
|
53,333
|
|
|
Cash flows from investment activities:
|
|
|
|
|
|
|
|
|
Acquisition of fixed assets and intangible assets
|
|
|
(6,714
|
)
|
|
(6,182
|
)
|
|
(26,913
|
)
|
|
Acquisition of a subsidiary
|
|
|
(2,000
|
)
|
|
-
|
|
|
(1,500
|
)
|
|
Restricted cash release (deposit)
|
|
|
(86
|
)
|
|
(110
|
)
|
|
1,037
|
|
|
Investments in associated companies
|
|
|
-
|
|
|
(2,798
|
)
|
|
(5,000
|
)
|
|
Proceeds from the sale of fixed assets
|
|
|
86
|
|
|
1,454
|
|
|
1,914
|
|
|
Payments related to realization of asset held for sale (Tax payment
related to the realization)
|
|
|
10,879
|
|
|
(1,989
|
)
|
|
(1,989
|
)
|
|
Others
|
|
|
(18
|
)
|
|
15
|
|
|
68
|
|
|
Net cash generated from (used in) investment activities
|
|
|
2,147
|
|
|
(9,610
|
)
|
|
(32,383
|
)
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
Dividends paid to non-controlling interest holders in consolidated
subsidiary
|
|
|
(28
|
)
|
|
(1,575
|
)
|
|
(1,690
|
)
|
|
Long term payables credit for fixed assets purchase
|
|
|
(1,650
|
)
|
|
(1,068
|
)
|
|
(2,459
|
)
|
|
Debentures repayment
|
|
|
-
|
|
|
-
|
|
|
(17,699
|
)
|
|
Dividend paid
|
|
|
(3,500
|
)
|
|
(3,000
|
)
|
|
(13,500
|
)
|
|
Repayment of loans and other long-term liabilities
|
|
|
(156
|
)
|
|
(239
|
)
|
|
(696
|
)
|
|
Short-term credit from banking corporations, net
|
|
|
(450
|
)
|
|
(24,245
|
)
|
|
(25,173
|
)
|
|
Debentures issuance return, excluding issuance expenses
|
|
|
-
|
|
|
-
|
|
|
115,689
|
|
Bank deposit used as security with respect of the SWAP
transaction
|
|
|
2,708
|
|
|
|
|
(4,950
|
)
|
|
Proceeds from exercise of employee options
|
|
|
621
|
|
|
181
|
|
|
1,115
|
|
|
Net cash generated from (used in) financing activities
|
|
|
(2,455
|
)
|
|
(29,946
|
)
|
|
50,637
|
|
|
Net increase (decrease) in cash and cash equivalents
|
|
|
(20,138
|
)
|
|
(46,170
|
)
|
|
71,587
|
|
|
Exchange rate differences and revaluation of cash and cash
equivalents, net
|
|
|
(1,479
|
)
|
|
52
|
|
|
(1,975
|
)
|
|
Balance of cash and cash equivalents at the beginning of the
period
|
|
|
166,958
|
|
|
97,346
|
|
|
97,346
|
|
|
Balance of cash and cash equivalents at the end of the period
|
|
|
145,341
|
|
|
51,228
|
|
|
166,958
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DELTA GALIL INDUSTRIES LTD.
Concise Consolidated Cash Flow Reports
For the 3-month period ending March 31, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ending
|
|
|
|
|
Three months ended on March 31
|
|
December 31
|
|
|
|
|
2015
|
|
2014
|
|
2014
|
|
|
|
|
(Unaudited)
|
|
(Audited)
|
|
|
|
|
Thousands of Dollars
|
|
Adjustments required to reflect cash flows
|
|
|
|
|
|
|
|
|
from operating activities:
|
|
|
|
|
|
|
|
|
Revenues and expenses not involving cash flow:
|
|
|
|
|
|
|
|
|
Depreciation
|
|
|
3,674
|
|
|
3,541
|
|
|
15,851
|
|
|
Amortization
|
|
|
643
|
|
|
647
|
|
|
2,751
|
|
|
Cash erosion (revaluation), net
|
|
|
289
|
|
|
(2
|
)
|
|
652
|
|
|
Interest paid in cash
|
|
|
3,786
|
|
|
2,978
|
|
|
11,693
|
|
|
Interest received in cash
|
|
|
(1,211
|
)
|
|
(102
|
)
|
|
(895
|
)
|
|
Taxes on income paid in cash, net
|
|
|
1,461
|
|
|
1,017
|
|
|
11,652
|
|
|
Deferred taxes, net
|
|
|
444
|
|
|
156
|
|
|
(2,124
|
)
|
|
Severance pay liability, net
|
|
|
154
|
|
|
121
|
|
|
124
|
|
|
Restructuring expenses
|
|
|
(217
|
)
|
|
-
|
|
|
(77
|
)
|
|
Capital gain (loss) from sale of fixed assets and asset held for sale
|
|
|
10
|
|
|
(1,055
|
)
|
|
(1,257
|
)
|
|
Change in benefit component of options and restricted share unit
granted to Employees
|
|
|
431
|
|
|
176
|
|
|
716
|
|
|
Change to the fair value of financial derivatives
|
|
|
(79
|
)
|
|
(443
|
)
|
|
(705
|
)
|
|
Share in losses of associated companies accounted for using the
equity method
|
|
|
(179
|
)
|
|
-
|
|
|
178
|
|
|
Increase in liabilities of Long-term employee bonuses
|
|
|
-
|
|
|
166
|
|
|
608
|
|
|
Changes in long term balances
|
|
|
(91
|
)
|
|
(371
|
)
|
|
1,451
|
|
|
Others
|
|
|
(301
|
)
|
|
(149
|
)
|
|
1,552
|
|
|
|
|
|
8,814
|
|
|
6,680
|
|
|
42,170
|
|
|
Changes to operating assets and liabilities:
|
|
|
|
|
|
|
|
|
Decrease (increase) in trade receivables
|
|
|
(2,864
|
)
|
|
5,404
|
|
|
(538
|
)
|
|
Increase in other receivable
|
|
|
(1,837
|
)
|
|
(3,268
|
)
|
|
(8,002
|
)
|
|
Decrease (increase) in trade payables
|
|
|
(15,788
|
)
|
|
(8,598
|
)
|
|
11,816
|
|
|
Increase (decrease) in other payables
|
|
|
(3,142
|
)
|
|
(2,992
|
)
|
|
4,600
|
|
|
Increase in inventory
|
|
|
(9,896
|
)
|
|
(9,277
|
)
|
|
(21,694
|
)
|
|
|
|
|
(33,527
|
)
|
|
(18,731
|
)
|
|
(13,818
|
)
|
|
|
|
|
(24,713
|
)
|
|
(12,051
|
)
|
|
28,352
|
|
Contacts
For more information:
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