Sales Increased 16% to Record $1,368.1 Million;
EBITDA Increased 8% to $115.9 Million
Q4 Net Income Increased 8% to $20.1 Million;
Diluted Earnings Per Share Increased 7% to $0.79 in Q4
Initial 2018 Earnings Guidance:
Sales
Expected to Reach $1,400 Million-$1,440 Million and
Full-Year EPS Expected to grow by 7% to 16% and reach $2.11-$2.30
2017 Fourth Quarter Highlights
-
Net income increased 8% and amounted to $20.1 million in the fourth
quarter of 2017, compared to $18.5 million in the fourth quarter of
2016.
-
Diluted earnings per share increased 7% and totaled $0.79 in the 2017
fourth quarter, compared to $0.73 in the fourth quarter of 2016.
-
EBITDA in the fourth quarter of 2017 increased 2% to $40.0 million,
from $39.2 million in the fourth quarter of 2016.
-
Operating profit was $32.5 million in the fourth quarter of 2017,
compared to $32.3 million in the fourth quarter last year, a 1%
increase.
-
A strong balance sheet post-acquisition, highlighted by $451.3 million
in equity as of December 31, 2017, and $138.9 million in cash and cash
equivalents.
-
The Board of Directors declared a dividend of $3.5 million, or $0.139
per share, to be distributed on March 13, 2018. The determining and
"ex-dividend" date will be February 28, 2018.
-
Isaac Dabah, CEO of Delta Galil, stated: “We are extremely pleased
with our 2017 annual results, which were highlighted by record sales,
EBITDA, net income and EPS excluding one-time items. The results
reflect the strength in our Global Upper Market and Schiesser business
and the positive contribution of our recently acquired business (Delta
Galil Premium Brands)– all demonstrating the strength of our
diversified portfolio. We continue to focus on driving both organic
growth and accretive acquisitions, and seek new opportunities to apply
our competitive and financial strengths to deliver 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, activewear and denim, today reported its financial results
for the fourth quarter and full year ended December 31, 2017.
“As always, 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, we have the necessary financial
resources to continue to innovate and grow -- both through organic means
and strategic acquisitions.”
Sales
The Company reported sales of $371.6 million for the fourth quarter of
2017, compared with $376.3 million for the same quarter last year,
representing a 1% decrease. Sales for the 2017 full year increased 16%
to a record $1,368.1 million, from $1,179.2 million for the 2016 full
year. The year-over-year increase reflected the annualization of Delta
Galil Premium Brands, which was acquired on August 2016, as well as
continued strength of Delta’s Global Upper Market and Schiesser business
segments, along with improvements in Delta Israel.
Operating Profit
Operating profit was $32.5 million in the fourth quarter of 2017,
compared to $32.3 million in the fourth quarter last year, representing
a 1% increase. Operating profit excluding one-time items increased 5%
for the 2017 full year and amounted to $87.4 million, compared to $83.2
million for the full year 2016.
For the 2017 full year, operating profit was $84.6 million, compared to
$85.3 for the 2016 full year, representing a 1% decrease.
Net Income
Net income increased 8% to $20.1 million in the fourth quarter of 2017,
compared to $18.5 million in the same quarter last year.
Net income excluding one-time items net of tax increased 7% for the 2017
full year and amounted to a record $50.7 million, compared to $47.2
million for the 2016 full year.
Net income for the 2017 full year was $49.0 million, compared to $51.9
million for the 2016 full year, representing a 6% decrease.
Diluted Earnings Per Share
Diluted earnings per share increased 7% in the 2017 fourth quarter to
$0.79, compared to $0.73 for the same quarter last year.
Diluted earnings per share excluding one-time items increased 7% and
amounted to $1.98 for the 2017 full year, compared to $1.85 for the 2016
full year.
For the 2017 full year, diluted earnings per share amounted to $1.91,
compared to $2.03 for the 2016 full year, a 6% decrease.
Management Comment
Isaac Dabah, CEO of Delta Galil, stated: “We are extremely pleased with
our 2017 annual results, which were highlighted by record sales, EBITDA,
net income and EPS excluding one-time items. The results reflect the
strength in our Global Upper Market and Schiesser business segments
which demonstrate the strength of our diversified portfolio. We continue
to focus on driving both organic growth and accretive acquisitions, and
seek new opportunities to apply our competitive and financial strengths
to deliver shareholder value.”
“Our recently acquired Delta Galil Premium Brands (DGPB) segment
continued to be a strong contributor to sales throughout 2017, and
remains an exciting growth opportunity looking ahead. We have several
strategic initiatives and category expansions in place for 2018 that are
intended to maximize growth opportunities within that segment.”
“Throughout the year, we focused on making meaningful changes to the
company that will improve our efficiency and production capacity and
best position us to develop the most innovative, high quality products
for our customers worldwide. We also enhanced our focus on e-commerce,
and increased top-line growth to key customers, as well as our
proprietary brands.”
“As always, 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, we have the necessary financial
resources to continue to innovate and grow -- both through organic means
and strategic acquisitions.”
EBITDA, Cash Flow, Net Debt, Equity and Dividend
EBITDA was $40.0 million, or 10.8% of sales in the fourth quarter of
2017, compared to $39.2 million, or 10.4% of sales in the same quarter
last year. For the 2017 full year, EBITDA was $115.9 million, or 8.5% of
sales, compared to $107.0 million, or 9.1% of sales last year.
Operating cash flow was $55.0 million in the fourth quarter of 2017,
compared with $61.1 million in the fourth quarter of 2016. For the 2017
full year, operating cash flow was $74.7 million, compared to $76.6
million last year.
Net financial debt as of December 31, 2017 was $125.6 million, compared
to $164.8 million as of September 30, 2017, and $181.2 million as of
December 31, 2016.
Equity on December 31, 2017 was $451.3 million, up from $390.6 million a
year earlier.
Delta Galil declared a dividend of $3.5 million, or $0.139 per share, to
be distributed on March 13, 2018. The determining and "ex-dividend" date
will be February 28, 2018.
2018 Financial Guidance
Delta Galil provided its initial 2018 financial guidance, excluding
one-time items, which is based on current market conditions and current
exchange rates of: Euro/USD 1.20 and USD / NIS 3.50.
-
Full-year 2018 sales are expected to range between $1,400
million-$1,440 million, representing an increase of 2%-5% from 2017
actual sales of $1,368.1 million.
-
Full-year 2018 EBIT is expected to range between $91 million-$96
million, representing an increase of 4%-10% from 2017 actual EBIT of
$87.4 million.
-
Full-year 2018 EBITDA is expected to range between $119 million-$125
million, representing an increase of 3%-8% from 2017 actual EBITDA of
$115.9 million.
-
Full-year 2018 net income is expected to range between $54 million-$59
million, representing an increase of 7%-16% from 2017 actual net
income of $50.7 million.
-
Full-year 2018 diluted EPS is expected to range between $2.11-$2.30,
representing an increase of 7%-16% from 2017 actual EPS of $1.98.
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. Delta Galil also
designs, develops, markets and sells branded denim apparel under the
brand 7 For All Mankind®, and ladies apparel under the brands
Splendid® and Ella Moss®. 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, 2017
|
|
|
|
|
|
|
|
|
December 31
|
|
|
2017
|
|
|
2016
|
|
|
Thousands of Dollars
|
|
Assets
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
Cash and cash equivalents
|
137,470
|
|
|
81,947
|
|
Restricted Cash
|
1,430
|
|
|
1,767
|
|
Other accounts receivable:
|
|
|
|
|
|
Trade receivables
|
148,806
|
|
|
153,044
|
|
Taxes on income receivable
|
2,915
|
|
|
2,264
|
|
Others
|
20,632
|
|
|
16,980
|
|
Financial derivative
|
1,191
|
|
|
286
|
|
Inventory
|
269,877
|
|
|
233,114
|
|
Assets classified as held for sale
|
-
|
|
|
1,000
|
|
Total current assets
|
582,321
|
|
|
490,402
|
|
|
|
|
|
|
|
Non-current assets:
|
|
|
|
|
|
Investments in associated companies accounted using the equity
method and long-term receivables
|
11,142
|
|
|
11,341
|
|
Investment property
|
3,718
|
|
|
3,389
|
|
Fixed assets, net of accumulated depreciation
|
160,018
|
|
|
171,954
|
|
Goodwill
|
70,101
|
|
|
70,101
|
|
Intangible assets, net of accumulated amortization
|
158,768
|
|
|
147,990
|
|
Deferred tax assets
|
11,654
|
|
|
14,269
|
|
Financial derivative
|
22,800
|
|
|
4,096
|
|
Total non-current assets
|
438,201
|
|
|
423,140
|
|
Total assets
|
1,020,522
|
|
|
913,542
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DELTA GALIL INDUSTRIES LTD.
Concise Consolidated Balance Sheets
As of December 31, 2017
|
|
|
|
|
|
|
|
|
|
|
December 31
|
|
|
|
2017
|
|
|
2016
|
|
|
|
Thousands of Dollars
|
|
|
|
|
|
|
|
|
Liabilities and Equity
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
Short-term bank loans
|
|
28
|
|
|
44,988
|
|
Current maturities of debentures
|
|
20,596
|
|
|
13,479
|
|
Financial derivative
|
|
1,432
|
|
|
2,383
|
|
Other accounts payable:
|
|
|
|
|
|
|
Trade payables
|
|
112,028
|
|
|
104,797
|
|
Taxes on income payable
|
|
6,373
|
|
|
3,478
|
|
Others
|
|
117,804
|
|
|
95,767
|
|
Total current liabilities
|
|
258,261
|
|
|
264,892
|
|
|
|
|
|
|
|
|
Non-current liabilities:
|
|
|
|
|
|
|
Severance pay liabilities less plan assets
|
|
4,057
|
|
|
3,213
|
|
Other non-current liabilities
|
|
40,212
|
|
|
42,040
|
|
Debentures
|
|
258,945
|
|
|
207,024
|
|
Reserve for deferred taxes
|
|
7,724
|
|
|
4,353
|
|
Financial derivative
|
|
-
|
|
|
1,388
|
|
Total non-current liabilities
|
|
310,938
|
|
|
258,018
|
|
Total liabilities
|
|
569,199
|
|
|
522,910
|
|
|
|
|
|
|
|
|
Equity:
|
|
|
|
|
|
|
Equity attributable equity holders of the parent company:
|
|
|
|
|
|
|
Share capital
|
|
23,708
|
|
|
23,696
|
|
Share premium
|
|
130,791
|
|
|
130,901
|
|
Other capital reserves
|
|
7,834
|
|
|
(15,824)
|
|
Retained earning
|
|
304,788
|
|
|
268,217
|
|
Treasury shares
|
|
(16,914)
|
|
|
(17,474)
|
|
|
|
450,207
|
|
|
389,516
|
|
Minority interests
|
|
1,116
|
|
|
1,116
|
|
Total equity
|
|
451,323
|
|
|
390,632
|
|
Total liabilities and equity
|
|
1,020,522
|
|
|
913,542
|
|
|
|
|
|
|
|
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, 2017
|
|
|
|
|
|
|
|
|
|
|
|
For the year ended December 31
|
|
|
|
Three months ended December 31
|
|
|
|
|
2017
|
|
2016
|
|
|
|
2017
|
|
2016
|
|
|
|
|
Thousands of Dollars
|
|
% change
|
|
Thousands of Dollars
|
|
% change
|
|
Sales
|
1,368,080
|
|
1,179,167
|
|
16%
|
|
371,637
|
|
376,315
|
|
(1%)
|
|
Cost of sales
|
855,268
|
|
787,650
|
|
|
|
225,952
|
|
239,499
|
|
|
|
Gross profit
|
512,812
|
|
391,517
|
|
31%
|
|
145,685
|
|
136,816
|
|
6%
|
|
% of sales
|
37.5%
|
|
33.2%
|
|
|
|
39.2%
|
|
36.4%
|
|
|
|
Selling and marketing expenses
|
360,506
|
|
262,527
|
|
37%
|
|
98,366
|
|
90,405
|
|
9 %
|
|
% of sales
|
26.4%
|
|
22.3%
|
|
|
|
26.5%
|
|
24.0%
|
|
|
|
Administrative and general expenses
|
65,393
|
|
46,967
|
|
39%
|
|
15,098
|
|
16,031
|
|
(6%)
|
|
% of sales
|
4.8%
|
|
4.0%
|
|
|
|
4.1%%
|
|
4.3%
|
|
|
|
Other income, net
|
50
|
|
832
|
|
|
|
272
|
|
1,885
|
|
|
|
Share in profit (loss) of associated companies accounted for using
the equity method
|
427
|
|
351
|
|
|
|
(5)
|
|
46
|
|
|
|
Operating income excluding non-recurring items
|
87,390
|
|
83,206
|
|
5%
|
|
32,488
|
|
32,311
|
|
1%
|
|
% of sales
|
6.4%
|
|
7.1%
|
|
|
|
8.7%
|
|
8.6%
|
|
|
|
Restructuring expenses
|
2,832
|
|
6,895
|
|
|
|
-
|
|
-
|
|
|
|
Bargain purchase
|
-
|
|
10,420
|
|
|
|
-
|
|
-
|
|
|
|
Cost associated with acquisition of activity
|
-
|
|
1,456
|
|
|
|
-
|
|
-
|
|
|
|
Operating income
|
84,558
|
|
85,275
|
|
|
|
32,488
|
|
32,311
|
|
|
|
Finance expenses, net
|
18,848
|
|
17,420
|
|
8%
|
|
4,330
|
|
6,634
|
|
(35%)
|
|
Profit before tax on income
|
65,710
|
|
67,855
|
|
|
|
28,158
|
|
25,677
|
|
|
|
Taxes on income
|
16,751
|
|
15,953
|
|
|
|
8,087
|
|
7,130
|
|
|
|
Net income for the period
|
48,959
|
|
51,902
|
|
|
|
20,071
|
|
18,547
|
|
|
|
Net income for period excluding non-recurring items, net of tax
|
50,715
|
|
47,217
|
|
7%
|
|
20,071
|
|
18,547
|
|
8%
|
|
Attribution of net earnings for the period
|
|
|
|
|
|
|
|
|
|
|
|
|
Attributed to company's shareholders
|
48,839
|
|
51,782
|
|
|
|
20,041
|
|
18,517
|
|
|
|
Attributed to non-controlling interests
|
120
|
|
120
|
|
|
|
30
|
|
30
|
|
|
|
|
48,959
|
|
51,902
|
|
|
|
20,071
|
|
18,547
|
|
|
|
Net diluted earnings per share attributed to shareholders of the
company
|
1.91
|
|
2.03
|
|
|
|
0.79
|
|
0.73
|
|
|
|
Net diluted earnings per share excluding non-recurring items net
of tax, attributed to shareholders of the company
|
1.98
|
|
1.85
|
|
7%
|
|
0.79
|
|
0.73
|
|
7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DELTA GALIL INDUSTRIES LTD.
Concise Consolidated Cash Flow Reports
|
|
|
|
|
|
For the year ended December 31
|
|
|
2017
|
|
2016
|
|
|
Thousands of Dollars
|
|
|
|
|
|
|
Cash flows from operating activities:
|
|
|
|
|
Net profit for the year
|
48,959
|
|
51,902
|
|
Adjustments required to reflect cash flows deriving from operating
activities
|
47,876
|
|
42,758
|
|
Interest paid in cash
|
(14,144)
|
|
(11,971)
|
|
Interest received in cash
|
292
|
|
1,284
|
|
Taxes on income paid in cash, net
|
(8,315)
|
|
(7,368)
|
|
Net cash generated from operating activities
|
74,668
|
|
76,605
|
|
Cash flows from investment activities:
|
|
|
|
|
Acquisition of fixed assets and intangible assets
|
(30,754)
|
|
(42,604)
|
|
Restricted cash deposit
|
337
|
|
(1,224)
|
|
Acquisition of activity
|
-
|
|
(118,885)
|
|
Earn-out payment for acquisition of an activity
|
(1,500)
|
|
-
|
|
Proceeds from sale of fixed asset
|
28,696
|
|
258
|
|
Others
|
(1,431)
|
|
(919)
|
|
Net cash used in Investing activities
|
(4,652)
|
|
(163,374)
|
|
Cash flows from financing activities:
|
|
|
|
|
Dividends paid to non-controlling interest holders in consolidated
subsidiary
|
(120)
|
|
(120)
|
|
Long term payables credit for fixed assets purchase
|
(3,308)
|
|
(3,308)
|
|
Shares Buy-Back
|
-
|
|
(6,895)
|
|
Debentures principle repayment
|
(20,919)
|
|
(19,379)
|
|
Liability to financial institution
|
6,413
|
|
-
|
|
Dividend paid
|
(14,055)
|
|
(14,094)
|
|
Repayment of loans and other long-term liabilities
|
-
|
|
(755)
|
|
Short-term credit from banking corporations, net
|
(44,960)
|
|
44,165
|
|
Debentures issuance net of issuance expenses
|
57,152
|
|
-
|
|
A deposit with a banking corporation as security in respect of the
SWAP transaction
|
1,545
|
|
1,745
|
|
Proceeds from exercise of employee options
|
451
|
|
618
|
|
Net cash generated (used in) from financing activities
|
(17,801)
|
|
1,977
|
|
Net increase ( decreased) in cash and cash equivalents
|
52,215
|
|
(84,792)
|
|
Exchange rate differences of cash and cash equivalents, net
|
3,308
|
|
(793)
|
|
Balance of cash and cash equivalents at the beginning of the
period
|
81,947
|
|
167,532
|
|
Balance of cash and cash equivalents at the end of the Period
|
137,470
|
|
81,947
|
|
|
|
|
|
|
|
|
|
DELTA GALIL INDUSTRIES LTD.
Concise Consolidated Cash Flow Reports
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For the year ended December 31
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2017
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2016
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Thousands of Dollars
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Adjustments required to reflect cash flows from operating
activities:
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Revenues and expenses not involving cash flow:
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Depreciation
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23,918
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21,420
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Amortization
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4,582
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3,029
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Cash erosion, net
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(598)
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50
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Interest paid in cash
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14,144
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11,971
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Interest received in cash
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(292)
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(1,284)
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Taxes on income paid in cash, net
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8,315
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7,368
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Deferred taxes on income, net
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5,112
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932
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Severance pay liability, net
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381
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62
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Restructuring expenses, net
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2,832
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3,984
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Capital gain from sale of fixed assets and assets held for sale
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(4,332)
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(54)
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Change in benefit component of options and restricted shares granted
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2,074
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2,130
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Bargain purchase
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-
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(10,420)
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Share in losses of associated companies accounted for using the
equity method
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(427)
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(351)
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Others
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1,313
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577
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57,022
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39,414
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Changes to operating assets and liabilities:
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Decrease (increase) in trade receivables
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10,336
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(26,054)
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Decrease in other receivable and balances
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2,164
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8,404
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Decrease in trade payables
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(219)
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(6,339)
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Increase in other payables
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2,056
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5,757
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Decrease (increase) in inventory
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(23,483)
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21,576
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(9,146)
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3,344
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47,876
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42,758
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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