Sales Rise to $256.7 Million;
Net Income to
Shareholders is $7.9 Million
Reaffirms 2016 Guidance; Sales Expected to Reach $1,090
Million-$1,110 Million and
Full-Year EPS Expected to
Reach $1.93-$2.02
2016 First Quarter Highlights
-
Sales grew to $256.7 million in the 2016 first quarter, an increase of
2% from last year.
-
Operating income increased by 17% to $16.3 million, excluding mark to
market effect of hedging transactions in both Q1 2016 and Q1 2015.
-
EBITDA increased 18% excluding the effect of mark to market effect of
hedging transactions in both Q1 2016 and Q1 2015.
-
Financial guidance for 2016 was reaffirmed: full-year sales expected
to range between $1,090 million-$1,110 million, rising 1%-3% from 2015
actual sales. Full-year 2016 diluted EPS is expected to range between
$1.93-$2.02, representing an increase of 2%-7% from 2015 actual EPS of
$1.88.
-
The Board of Directors declared a dividend of $3.5 million or $0.139
per share, to be distributed on June 7, 2016. The determining and
"ex-dividend" date will be May 25, 2016, per the Tel Aviv Stock
Exchange.
-
The Company has repurchased 163,216 shares since February 25th till
May 15th 2016 under its share buyback plan, representing
approximately 59% of the $7.5 million plan approved by the board.
-
Strong balance sheet was highlighted by $368.9 million in equity and
$130.3 million in cash as of March 31, 2016.
-
Isaac Dabah, CEO of Delta Galil, stated: “Our 2016 first quarter
results were in line with expectations, reflecting a moderate top-line
growth and a double-digit increase in operating profit before the
effect of hedging. During the quarter, we began to benefit from
investments made in 2015 to improve our business. We remain committed
to 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 ladies, men and kids, as well as
leisurewear and activewear, today reported its financial results for the
first quarter ended March 31, 2016.
“Our diverse blend of business segments, product categories and an
expanded global presence, along with our strategic efforts to grow in
areas such as branded products, continue to drive both growth momentum
and balance”
The Company reported sales of $256.7 million for the first quarter of
2016, an increase of 2% from $252.8 million for the same quarter last
year. The growth in sales primarily reflected a significant improvement
in Europe and in Israel.
Operating income was $14.8 million for first quarter 2016, versus $15.3
million for the first quarter last year, representing a 3% decrease. The
decline in operating income was primarily a result of the impact of mark
to market valuation on hedging transactions which resulted in a loss of
$1.5 million in this quarter, versus a profit of $1.4 million in the
first quarter of last year.
Excluding the mark to market valuation mentioned above, the operating
income in the first quarter of 2016 amounted to $16.3 million, compared
to $13.9 million in the first quarter of 2015, an increase of 17%.
Net income attributable to shareholders was $7.9 million in the first
quarter of 2016, compared to $8.9 million in the same quarter of 2015.
Excluding the mark to market valuation mentioned above net of tax
effect, the net income in the first quarter of 2016 amounted to $9.0
million compared to $ 7.9 million in the first quarter of 2015, an
increase of 13%.
Diluted earnings per share attributed to shareholders were $0.31 for the
2016 first quarter, compared to $0.35 for the 2015 first quarter.
Excluding the mark to market valuation mentioned above, net of tax
effect, the diluted earnings per share in the first quarter of 2016
amounted to $0.35, compared to $0.31 in the first quarter of 2015, an
increase of 13%.
Management Comment
Isaac Dabah, CEO of Delta Galil, stated: “Our 2016 first quarter results
were in line with expectations, reflecting a moderate top-line growth
and a double-digit increase in operating profit before the effect of
hedging. During the quarter, we began to benefit from investments made
in 2015 to improve our business, as we saw a significant increase in
Delta USA’s operating profit and meaningful improvements in our global
upper market performance resulting from efficiencies in our owned
factories.”
“Our diverse blend of business segments, product categories and an
expanded global presence, along with our strategic efforts to grow in
areas such as branded products, continue to drive both growth momentum
and balance,” Mr. Dabah continued. “We were pleased with the successful
launch of the Puma brand license in Israel during the quarter, and will
continue to expand our prominent portfolio of licensed brands by
pursuing additional strategic acquisitions.”
“Looking ahead, we are focused on attaining double digit EBIT growth in
2017. We remain committed to investing in new products and resources to
drive sustained profitable growth and long-term shareholder value, and
with a strong balance sheet and cash position, we have the necessary
financial resources to continue to invest, innovate and grow,” Mr. Dabah
concluded.
EBITDA, Net Debt, Equity, Dividend and Shares
Buyback
EBITDA was $20.2 million, or 7.9% of sales in the 2016 first quarter,
increasing 3% compared with $19.6 million, or 7.8% of sales in the same
quarter of 2015. EBITDA increased 18% excluding the effect of mark to
market effect of hedging transactions in both Q1 2016 and Q1 2015.
Operating cash flow was negative $23.6 million in the 2016 first
quarter, versus negative $19.8 million in the same period of 2015. The
increase in negative operating cash flow was due to a $36.8 million
increase in working capital, compared with a working capital increase of
$33.5 million in the same quarter of 2015, reflecting the seasonality of
the business. Operating cash flow for the twelve-month period ending
March 31, 2016 was $66.7 million, compared to $40.1 million for the same
period last year.
Net financial debt as of March 31, 2016 was $112.4 million, compared to
$83.7 million as of March 31, 2015, and $74.5 million as of December 31,
2015.
Equity as of March 31, 2016 was $368.9 million, compared to $328.2
million a year earlier.
Delta Galil declared a dividend of $3.5 million, or $0.139 per share, to
be distributed on June 7, 2016. The determining and "ex-dividend" date
will be May 25th 2016, per the Tel Aviv Stock Exchange.
The Company has repurchased 163,216 shares since February 25th and
until May 15th 2016 under its share buyback plan,
representing approximately 59% of the $7.5 million plan approved by the
board.
Reaffirming Guidance for 2016
The Company reiterated its 2016 financial guidance, excluding
non-recurring items, which is based on current market conditions and
current exchange rates of $1.12 per euro and 3.80 NIS per US$. Full-year
sales expected to range between $1,090 million-$1,110 million, rising
1%-3% from 2015 actual sales. Full-year 2016 diluted EPS is expected to
range between $1.93-$2.02, representing an increase of 2% -7% from 2015
actual EPS of $1.88.
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, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31
|
|
December 31
|
|
|
|
|
2016
|
|
2015
|
|
2015
|
|
|
|
|
(Unaudited)
|
|
(Audited)
|
|
|
|
|
Thousands of Dollars
|
|
|
|
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
129,717
|
|
145,341
|
|
167,532
|
|
Restricted Cash
|
|
|
535
|
|
409
|
|
532
|
|
Other accounts receivable:
|
|
|
|
|
|
|
|
|
Trade receivables
|
|
|
117,920
|
|
110,292
|
|
105,630
|
|
Taxes on income receivable
|
|
|
8,533
|
|
5,704
|
|
8,963
|
|
Others
|
|
|
16,186
|
|
16,845
|
|
15,882
|
|
Financial derivative
|
|
|
559
|
|
107
|
|
209
|
|
Inventory
|
|
|
199,058
|
|
185,136
|
|
196,172
|
|
Assets classified as held for sale
|
|
|
1,000
|
|
1,000
|
|
1,000
|
|
Total current assets
|
|
|
473,508
|
|
464,834
|
|
495,920
|
|
|
|
|
|
|
|
|
|
|
Non-current assets:
|
|
|
|
|
|
|
|
|
Investments in associated companies accounted using
the
equity method and long-term receivables
|
|
|
7,276
|
|
6,626
|
|
5,421
|
|
Investment property
|
|
|
3,742
|
|
3,621
|
|
3,573
|
|
Fixed assets, net of accumulated depreciation
|
|
|
130,809
|
|
104,360
|
|
122,129
|
|
Goodwill
|
|
|
70,101
|
|
51,338
|
|
70,101
|
|
Intangible assets, net of accumulated amortization
|
|
|
89,582
|
|
66,534
|
|
89,734
|
|
Deferred tax assets
|
|
|
9,910
|
|
10,770
|
|
9,877
|
|
Financial derivative
|
|
|
3,937
|
|
1,014
|
|
1,439
|
|
Total non-current assets
|
|
|
315,357
|
|
244,263
|
|
302,274
|
|
Total assets
|
|
|
788,865
|
|
709,097
|
|
798,194
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31
|
|
December 31
|
|
|
|
|
2016
|
|
2015
|
|
2015
|
|
|
|
|
(Unaudited)
|
|
(Audited)
|
|
|
|
|
Thousands of Dollars
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Equity
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
Short-term bank loans
|
|
|
183
|
|
390
|
|
52
|
|
Current maturities of debentures
|
|
|
24,432
|
|
22,882
|
|
23,365
|
|
Financial derivative
|
|
|
1,972
|
|
2,784
|
|
3,049
|
|
Other accounts payable:
|
|
|
|
|
|
|
|
|
Trade payables
|
|
|
83,947
|
|
65,238
|
|
100,956
|
|
Taxes on income payable
|
|
|
4,874
|
|
5,535
|
|
2,690
|
|
Others
|
|
|
55,211
|
|
58,290
|
|
65,807
|
|
Total current liabilities
|
|
|
170,619
|
|
155,119
|
|
195,919
|
|
|
|
|
|
|
|
|
|
|
Non-current liabilities:
|
|
|
|
|
|
|
|
|
Severance pay liabilities less plan assets
|
|
|
2,761
|
|
2,296
|
|
2,696
|
|
Other non-current liabilities
|
|
|
23,763
|
|
17,031
|
|
22,533
|
|
Debentures
|
|
|
219,160
|
|
192,378
|
|
211,728
|
|
Reserve for deferred taxes
|
|
|
2,170
|
|
2,863
|
|
2,528
|
|
Financial derivative
|
|
|
1,451
|
|
11,181
|
|
5,311
|
|
Total non-current liabilities
|
|
|
249,305
|
|
225,749
|
|
244,796
|
|
Total liabilities
|
|
|
419,924
|
|
380,868
|
|
440,715
|
|
|
|
|
|
|
|
|
|
|
Equity:
|
|
|
|
|
|
|
|
|
Equity attributable to equity holders of the
parent company:
|
|
|
|
|
|
|
|
|
Share capital
|
|
|
23,670
|
|
23,610
|
|
23,666
|
|
Share premium
|
|
|
130,387
|
|
128,864
|
|
130,421
|
|
Other capital reserves
|
|
|
(8,571)
|
|
(17,411)
|
|
(15,692)
|
|
Retained earning
|
|
|
233,624
|
|
202,955
|
|
228,817
|
|
Treasury shares
|
|
|
(11,315)
|
|
(10,933)
|
|
(10,849)
|
|
|
|
|
367,795
|
|
327,085
|
|
356,363
|
|
Minority interests
|
|
|
1,146
|
|
1,144
|
|
1,116
|
|
Total equity
|
|
|
368,941
|
|
328,229
|
|
357,479
|
|
Total liabilities and equity
|
|
|
788,865
|
|
709,097
|
|
798,194
|
|
|
|
|
|
|
|
|
|
|
|
|
DELTA GALIL INDUSTRIES LTD.
|
|
Concise Consolidated Statement of Income
|
|
For the 3-month period ending March 31, 2016
|
|
|
|
|
|
|
Three months ended on
|
|
|
|
|
|
|
March 31
|
|
% Increase
(Decrease)
|
|
|
|
|
2016
|
|
2015
|
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
Thousands of dollars
|
|
|
|
Sales
|
|
|
256,687
|
|
252,838
|
|
2%
|
|
Cost of sales
|
|
|
177,873
|
|
179,972
|
|
|
|
Gross profit
|
|
|
78,814
|
|
72,866
|
|
8%
|
|
% of sales
|
|
|
30.7%
|
|
28.8%
|
|
|
|
Selling and marketing expenses
|
|
|
52,468
|
|
49,859
|
|
5%
|
|
% of sales
|
|
|
20.4%
|
|
19.7%
|
|
|
|
General and administrative expenses
|
|
|
10,028
|
|
9,280
|
|
8%
|
|
% of sales
|
|
|
3.9%
|
|
3.7%
|
|
|
|
Other income (expense), net
|
|
|
(1,494)
|
|
1,423
|
|
|
|
Share in profit of associated companies accounted for using the
equity method
|
|
|
27
|
|
179
|
|
|
|
Operating income
|
|
|
14,851
|
|
15,329
|
|
(3%)
|
|
% of sales
|
|
|
5.8%
|
|
6.1%
|
|
|
|
Finance expenses, net
|
|
|
3,619
|
|
4,199
|
|
(14%)
|
|
Income before taxes on income
|
|
|
11,232
|
|
11,130
|
|
1%
|
|
Taxes on income
|
|
|
3,343
|
|
2,211
|
|
|
|
Net income for the period
|
|
|
7,889
|
|
8,919
|
|
(12%)
|
|
Attribution of net earnings for the period:
|
|
|
|
|
|
|
|
|
Attributed to company's shareholders
|
|
|
7,859
|
|
8,889
|
|
|
|
Attributed to non-controlling interests
|
|
|
30
|
|
30
|
|
|
|
|
|
|
7,889
|
|
8,919
|
|
|
|
Net diluted earnings per share attributable to Company's
shareholders
|
|
|
0.31
|
|
0.35
|
|
(11%)
|
|
|
|
|
|
|
|
|
|
|
|
|
DELTA GALIL INDUSTRIES LTD.
Concise Consolidated Cash Flow Reports
For the 3-month period ending March 31, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ending
|
|
|
|
|
Three months ended on March 31
|
|
December 31
|
|
|
|
|
2016
|
|
2015
|
|
2015
|
|
|
|
|
(Unaudited)
|
|
(Audited)
|
|
|
|
|
Thousands of Dollars
|
|
Cash flows from operating activities
|
|
|
|
|
|
|
|
|
Net profit for the period
|
|
|
7,889
|
|
8,919
|
|
43,948
|
|
Adjustments required to reflect cash flows deriving from
|
|
|
|
|
|
|
|
|
operating activities
|
|
|
(28,088)
|
|
(24,713)
|
|
49,811
|
|
Interest paid in cash
|
|
|
(3,047)
|
|
(3,786)
|
|
(13,573)
|
|
Interest received in cash
|
|
|
323
|
|
1,211
|
|
1,697
|
|
Taxes on income paid in cash, net
|
|
|
(633)
|
|
(1,461)
|
|
(11,421)
|
|
Net cash generated from (used in) operating activities
|
|
|
(23,556)
|
|
(19,830)
|
|
70,462
|
|
Cash flows from investment activities:
|
|
|
|
|
|
|
|
|
Acquisition of fixed assets and intangible assets
|
|
|
(8,917)
|
|
(6,714)
|
|
(38,077)
|
|
Acquisition of a subsidiary
|
|
|
-
|
|
(2,000)
|
|
(2,000)
|
|
Restricted cash release (deposit)
|
|
|
7
|
|
(86)
|
|
(184)
|
|
Acquisition of activity
|
|
|
-
|
|
-
|
|
(37,368)
|
|
Acquisition of subsidiary, net of cash in the acquired company
|
|
|
-
|
|
-
|
|
673
|
|
Proceeds from the sale of fixed assets
|
|
|
17
|
|
86
|
|
291
|
|
Payments related to realization of asset held for sale
|
|
|
-
|
|
10,879
|
|
10,879
|
|
Others
|
|
|
(403)
|
|
(18)
|
|
(8)
|
|
Net cash generated from (used in) investment activities
|
|
|
(9,296)
|
|
2,147
|
|
(65,794)
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
Dividends paid to non-controlling interest holders in consolidated
subsidiary
|
|
|
-
|
|
(28)
|
|
(146)
|
|
Long term payables credit for fixed assets purchase
|
|
|
(1,315)
|
|
(1,650)
|
|
(2,347)
|
|
Debentures repayment
|
|
|
|
|
-
|
|
(25,792)
|
|
Dividend paid
|
|
|
(3,540)
|
|
(3,500)
|
|
(14,073)
|
|
Shares Buy-Back
|
|
|
(578)
|
|
-
|
|
-
|
|
Repayment of loans and other long-term liabilities
|
|
|
(755)
|
|
(156)
|
|
(916)
|
|
Short-term credit from banking corporations, net
|
|
|
125
|
|
(450)
|
|
(3,212)
|
|
Debentures issuance return, excluding issuance expenses
|
|
|
-
|
|
-
|
|
40,006
|
|
A deposit with a banking corporation as security in respect of the
SWAP transaction
|
|
|
415
|
|
2,708
|
|
1,660
|
|
Proceeds from exercise of employee options
|
|
|
82
|
|
621
|
|
2,044
|
|
Net cash used in financing activities
|
|
|
(5,566)
|
|
(2,455)
|
|
(2,776)
|
|
Net increase (decrease) in cash and cash equivalents
|
|
|
(38,418)
|
|
(20,138)
|
|
1,892
|
|
Exchange rate differences and revaluation of cash and cash
equivalents,
net
|
|
|
603
|
|
(1,479)
|
|
(1,318)
|
|
Balance of cash and cash equivalents at the beginning of the
period
|
|
|
167,532
|
|
166,958
|
|
166,958
|
|
Balance of cash and cash equivalents at the end of the
period
|
|
|
129,717
|
|
145,341
|
|
167,532
|
|
|
|
|
|
|
|
|
|
|
|
|
DELTA GALIL INDUSTRIES LTD.
Concise Consolidated Cash Flow Reports
For the 3-month period ending March 31, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ending
|
|
|
|
|
Three months ended on March 31
|
|
December 31
|
|
|
|
|
2016
|
|
2015
|
|
2015
|
|
|
|
|
(Unaudited)
|
|
(Audited)
|
|
|
|
|
Thousands of Dollars
|
|
Adjustments required to reflect cash flows
|
|
|
|
|
|
|
|
|
from operating activities:
|
|
|
|
|
|
|
|
|
Revenues and expenses not involving cash flow:
|
|
|
|
|
|
|
|
|
Depreciation
|
|
|
4,544
|
|
3,674
|
|
17,091
|
|
Amortization
|
|
|
791
|
|
643
|
|
2,678
|
|
Cash erosion, net
|
|
|
(157)
|
|
289
|
|
443
|
|
Interest paid in cash
|
|
|
3,047
|
|
3,786
|
|
13,573
|
|
Interest received in cash
|
|
|
(323)
|
|
(1,211)
|
|
(1,697)
|
|
Taxes on income paid in cash, net
|
|
|
633
|
|
1,461
|
|
11,421
|
|
Deferred taxes, net
|
|
|
(427)
|
|
444
|
|
1,075
|
|
Severance pay liability, net
|
|
|
(20)
|
|
154
|
|
86
|
|
Restructuring expenses
|
|
|
-
|
|
(217)
|
|
5,320
|
|
Capital gain from sale of fixed assets
|
|
|
(9)
|
|
10
|
|
203
|
|
Change in benefit component of options and restricted shares
granted
to Employees
|
|
|
514
|
|
431
|
|
2,240
|
|
Share in losses of associated companies accounted for using the
equity
method
|
|
|
(27)
|
|
(179)
|
|
(710)
|
|
Others
|
|
|
180
|
|
(471)
|
|
(2,195)
|
|
|
|
|
8,746
|
|
8,814
|
|
49,528
|
|
Changes to operating assets and liabilities:
|
|
|
|
|
|
|
|
|
Decrease (increase) in trade receivables
|
|
|
(11,574)
|
|
(2,864)
|
|
3,518
|
|
Decrease (increase) in other receivable
|
|
|
342
|
|
(1,837)
|
|
(4,970)
|
|
Increase (decrease )in trade payables
|
|
|
(18,925)
|
|
(15,788)
|
|
19,092
|
|
Decrease in other payables
|
|
|
(7,696)
|
|
(3,142)
|
|
(1,326)
|
|
Decrease (increase) in inventory
|
|
|
1,019
|
|
(9,896)
|
|
(16,031)
|
|
|
|
|
(36,834)
|
|
(33,527)
|
|
283
|
|
|
|
|
(28,088)
|
|
(24,713)
|
|
49,811
|
|
|
|
|
|
|
|
|
|
Contacts
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