Isaac Dabah, CEO of Delta Galil, commented: “The Company is off to a strong start for 2014. We delivered our 18th consecutive quarter of organic sales increases and generated record earnings, driven by diverse growth engines such as branded products, activewear and our retail business.”

“Our top-line performance was highlighted by rising sales in Germany and rest of Europe, and stable results in North America. We are enthusiastic about our prospects for the balance 2014, which is expected to be our first year of sales in the $1 billion-plus range, and we are increasing our financial guidance.”

Income

Operating income amounted $14.8 million for first quarter 2014, up 28% from $11.6 million in the same period of 2013. A key contributor to the higher operating income was an expanding gross profit margin, which rose to 30.4% in the 2014 first quarter from 28.4% a year ago.

Net income attributable to shareholders was $8.7 million in the 2014 first quarter, compared to $6.6 million in the same quarter of 2013, resulting in a 32% increase.

Key figures

EBITDA was $19.0 million or 8% of sales in the 2014 first quarter, increasing by 21% compared with $15.8 million or 6.9% of sales in the same quarter of 2013.

Operating cash flow was negative $6.6 million in the 2014 first quarter, versus negative $13.3 million in the same period of 2013. The improvement in operating cash flow in Q1 2014 compared to Q1 2013 was mainly due to higher net income and lower increase in working capital versus the comparable period of last year.

Net financial debt as of 31 March 2014 was $83.2 million compared to $109.1 million as of 31 March 2013 and $63.3 million as of 31 December 2013. The financial debt to EBITDA ratio improved significantly to 0.9 for Q1 2014, 44% lower compared to Q1 2013.

Raising guidance for 2014

The company has increased 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 (prior forecast was $1,035 million-$1,065 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 (prior forecast was $75 million-$81 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 (prior forecast was $93 million-$99 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 (prior forecast was $49 million-$54 million), representing an increase of 13%-24% from 2013 net income of $44.3 million.
• Full-year 2014 diluted EPS is expected to range between $1.95-$2.14 (prior forecast was $1.93-$2.11), representing an increase of 11%-22% from 2013 EPS of $1.75.

www.deltagalil.com