Net income was US$ 17.7 million in the third quarter of 2016, compared to US$ 13.4 million in the same quarter last year. For the first nine months of 2016, net income was US$ 33.3 million, compared to US$ 31.7 million for the same period of 2015.

“Our third quarter results demonstrate the strength of our business model, which is built on a diverse portfolio of branded and private label products, an expanding global presence, and a range of market segments that, together, provide both growth momentum and balance. We saw a strong contribution from our recent addition of DG Premium Brands, which includes 7 For All Mankind, Splendid and Ella Moss, and despite the expected soft US market, we experienced strong growth in Europe and Israel,” commented Isaac Dabah, CEO of Delta Galil.

Sales and operating profit

The company reported sales of US$ 296.6 million for the third quarter of 2016, compared to US$ 284.6 million for the same quarter last year, an increase of 4%. Sales for the first nine months of 2016 were US$ 802.8 million, compared to US$ 792.9 million in the same period of 2015.

Operating profit increased by 16% to US$ 24.6 million in the third quarter of 2016, compared to US$ 21.2 million in the third quarter last year. For the first nine months of 2016, operating income was US$ 53.0 million, compared to US$ 51.0 for the same period last year, representing a 4% increase.

Operating profit before one-time items in the third quarter of 2016 amounted to US$ 22.5 million, compared to US$ 22.1 million last year.  Operating profit before one-time items in the first nine months of 2016 amounted to US$ 50.9 million, compared to US$ 51.9 million last year, a decrease of 2%.

Consolidation and growth

“During the quarter, we focused on consolidating Premium Brands into our business, while taking important measures and implementing the necessary efficiencies to both streamline and strengthen the brands to best position them for growth. Also during the quarter, we appointed retail and fashion leader Paula Schneider, who is renowned for building profitable businesses and improving efficiencies for contemporary brands, to oversee this business and execute our ambitious goals for these brands,” said Isaac Dabah.

“Importantly, through this new business segment, we are growing our product offering and entering new categories, which is enabling us to reach new customers as well as strengthen our relations with existing ones – all while expanding our global reach.”

“Looking ahead, in addition to maximizing the benefits of this new acquisition, we expect our new Vietnamese factory to contribute to our growth beginning in 2017, and we are on track to open our new Seamfree and Cut & Sew factories in the fourth quarter. With a strong balance sheet to support our long-term growth and acquisition strategy, we are also focused on growing our e-commerce business, and we are working to attain double digit EBIT growth in 2017 and beyond.”

Other results

EBITDA was US$ 28.7 million, or 9.7% of sales in the third quarter of 2016, compared to US$ 27.1 million, or 9.5% of sales in the same quarter last year. For the first nine months of 2016, EBITDA was US$ 67.8 million, or 8.4% of sales, compared to US$ 65.8 million, or 8.3% of sales in the same period of 2015. 

Operating cash flow was US$ 12.6 million in the third quarter of 2016, compared with US$ 5.9 million in the third quarter of 2015. Operating cash flow for the nine months ended on 30 September 2016, and on 30 September 2015, was US$ 15.5 million, and US$ 10.2 million, respectively. Operating cash flow in the last 12 months amounted to US$ 75.8 million, compared to US$ 45.1 million last year.

Net financial debt as of 30 September 2016 was US$ 223.8 million, compared to US$ 123.5 million as of 30 September 2015, and US$ 74.5 million as of 31 December 2015. The increase in net finance debt derives mainly from the Premium Brands activity acquisition, the company reports.

www.deltagalil.com