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9th August 2017, Tel Aviv

Delta Galil reports strong income growth

Delta Galil Industries is a leading manufacturer and marketer of branded and private label apparel products for men, women and children, as well as leisurewear and activewear. Delta Galil Industries, a leading manufacturer and marketer of branded and private label apparel products for men, women and children, as well as leisurewear and activewear, has reported its financial results for the second quarter that ended on 30 June 2017.

Net income in the second quarter of 2017 was US$ 8.9 million, a 14% increase from US$ 7.8 million in the comparable period last year. Sales increased by 36% and totalled US$ 340.5 million in the 2017 second quarter, compared to US$ 249.5 million in the same quarter last year. EBITDA rose by 35% in the second quarter of 2017 and amounted to US$ 25.5 million, compared to US$ 18.9 million.

“Delta Galil delivered an exceptionally strong performance in the second quarter, reflecting double-digit growth on the top- and bottom-line. Our results were driven by well-defined strategies to build our premium and branded business, expand our market reach, extend our manufacturing resources, and be an ever-increasing source of innovative, high quality, differentiated products for our customers and consumers worldwide,” commented Isaac Dabah, CEO of Delta Galil.

Sales

The company reported sales of US$ 340.5 million for the second quarter of 2017, a 36% increase from US$ 249.5 million for the second quarter of 2016. Excluding Delta Galil Premium Brands (DGPB), sales increased by 9% compared to the second quarter of 2016.

Sales for the first six months of 2017 were US$ 656.1 million, up 30% from US$ 506.2 million in the same six-month period of 2016. Excluding DGPB, sales increased by 3% compared to the first six months of 2016.

Operating profit

Operating profit for the second quarter of 2017 was US$ 17.7 million, a 31% increase from US$ 13.5 million in the second quarter of 2016. For the first six months of 2017, operating profit before one-time items was US$ 30.6 million, an 8% increase from US$ 28.4 million a year earlier.

Operating profit in the first six months was US$ 27.9 million, down 2% from US$ 28.4 million in the same period of 2016. The decline was driven preliminary by restructuring expenses included in the first quarter for the DGPB segment.

Net income

Net income attributable to shareholders was US$ 8.9 million in the second quarter of 2017, compared to US$ 7.8 million in the same quarter of 2016, representing a 14% increase.

For the first six months of 2017, net income attributable to shareholders was US$ 14.5 million, compared to US$ 15.7 million last year, representing an 8% decrease. Net income excluding one-time items attributable to shareholders for the first six months of 2017 increased 3% to US$ 16.1 million, compared to US$ 15.6 million in the same period of 2016.

EBITDA was US$ 25.5 million, or 7.5% of sales in the second quarter of 2017, compared to US$ 18.9 million, or 7.6% of sales in the same quarter last year. For the first six months of 2017, EBITDA was US$ 44.6 million, compared to US$ 39.1 million in the same period of 2016. 

Significant growth

“During the quarter, we saw significant growth in Delta Galil USA, mainly kids and activewear categories and in the global upper market. Importantly, the gross margin in Delta Galil USA increased across all business units. Delta Premium Brands, our recent acquisition, continued to exceed the plan,” said Isaac Dabah.

“Throughout the quarter we continued to invest in growing our production capacity, and are currently running our Vietnamese factory with 850 employees. We expect to reach full operational status in the facility in the second half of 2018.”

“Looking ahead, we are focused on growing our international and e-commerce businesses, while continuing to pursue strategic acquisition opportunities.”

2017 financial guidance

Delta Galil reaffirmed its 2017 financial guidance, excluding non-recurring items. Full-year 2017 sales are expected to range between US$ 1,330 million-US$ 1,370 million, representing an increase of 13%-16% from 2016 actual sales of US$ 1,179 million.

Full-year 2017 net income is expected to range between US$ 50.0 million-US$ 52.0 million, representing an increase of 6%-10% from 2016 actual net income of US$ 47.2 million. Full-year 2017 diluted EPS is expected to range between US$ 1.95-US$ 2.02, representing an increase of 5%-9% from 2016 actual EPS of US$ 1.85.

www.deltagalil.com

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