“Our strong results for the first half of 2014 were distinguished by record sales and profitability, sustained organic growth across nearly all of our business segments, and a solid financial base that will support Delta Galil’s future expansion and success,” explained Isaac Dabah, CEO of Delta Galil.

“We are well on the way to our first $1 billion sales year, and in fact have already reached that milestone during the four quarters ended June 30, 2014.”

Figures

The company reported sales of $249.2 million for the second quarter of 2014, an increase of 6% from the same period of 2013. Sales in the first six months of 2014 were $487.2 million, also an increase of 6% from the last year.

Operating income was $15.5 million for second quarter of 2014, up 11% from $14 million in the same quarter of 2013.  For the first six months of 2014, operating income grew by 19%.

The increase in operating income reflected both the rising sales and an expanding gross profit margin. Gross profit increased to 31.2% of sales in the second quarter and 30.8% in the first half of 2014, up from 29.5% and 29% in the respective periods a year ago. This was partly offset by higher selling and marketing expenses as Delta Galil invested in the growth of its business. 

Future growth

“The solid performance of Delta Galil is the product of sharply focused strategies to diversify our portfolio, invest in innovation, and strengthen our financial resources. As a result, we have delivered 19 straight quarters of organic sales growth, driven by such diverse engines as brands, activewear and retail,” commented Isaac Dabah.

“By broadening our global presence, we are positioned to grow in markets as diverse as Israel, Germany and North America. Our decision to expand the branded business has also led to meaningful margin improvement.”

“We are continuing to invest in Delta Galil’s future growth, including manufacturing capacity, retail store enhancements and other areas that will reinforce our reputation for innovation, quality and customer service,” Mr Dabah concluded.

EBITDA and cash flow

EBITDA was $19.9 million or 8% of sales in the 2014 second quarter, increasing by 9% compared with $18.3 million in the 2013 second quarter.  For the first six months of 2014, EBITDA rose by 14% to $38.9 million. 

Operating cash flow decreased, amounting to $10.2 million in the second quarter and $3.6 million in the first six months of 2014. In the respective second quarter and six month periods of 2013, operating cash flow was $18.0 million and $4.7 million. Operating cash flow for the last four quarters increased to $45.1 million from $42.2 million.

Reaffirming guidance

The company has reiterated its 2014 financial guidance, reflecting a strong outlook for sales and profitability.

• Full-year 2014 sales are expected to range between $1,045 million-$1,075 million, representing an increase of 7%-10% from 2013 sales of $974.7 million.
• Full-year 2014 EBIT is expected to range between $77 million-$83 million, representing an increase of 13%-22% from 2013 EBIT of $67.9 million.
• Full-year 2014 EBITDA is expected to range between $95 million-$101 million, representing an increase of 10%-17% from 2013 EBITDA of $86.2 million.
• Full-year 2014 net income is expected to range between $50 million-$55 million, representing an increase of 13%-24% from 2013 net income of $44.3 million.

www.deltagalil.com