“Our results for the 2015 second quarter demonstrate the strength of the company’s business model, which is built on a diverse blend of branded and private label products, an expanding global presence, and a range of market segments that, together, provide both growth momentum and balance,” commented Isaac Dabah, CEO of Delta Galil.

“Thus, while the volatile currency exchange environment posed headwinds to profit growth, we still delivered our second-highest quarter for sales and increased our cash flow substantially.”

Sales and earnings

Sales in the first six months of 2015 were US 508.4 million, an increase of 4% from US 487.2 million in the same period of 2014. Sales growth over the past six months benefitted from Delta Galil’s focus on increasing the diversity of its geographic base and customer mix, as well as an increase in sales of branded products.

Operating income was US 14.5 million for second quarter of 2015, down by 7% from US 15.5 million in 2014. For the first six months of 2015, operating income was down 2%, to US 29.8 million from US 30.4 million a year earlier. The decrease in operating income was driven primarily by currency translation.

Diluted earnings per share attributed to shareholders were US 0.36 for the 2015 second quarter, compared to US 0.38 for the 2014 period. For the first six months of 2015, net income attributable to shareholders was US 18.2 million, compared to US 18.5 million for the same period of 2014.

Strategic growth initiatives

“This also has been an important year for strategic growth initiatives,” said Mr Dabah. “We recently announced the acquisition of the PJ Salvage brand, which will add to our branded business, increase our penetration of the upper market segment, and broaden our international footprint.”

“The opening of our seamless R&D center at Nike HQ in Oregon, and our men’s and ladies’ underwear license with Columbia reflect the growth of these two important customer relationships. And, we are adding capacity with a factory in Vietnam and a dye house in Egypt, to support our continued global expansion.”

Guidance for 2015

The company has reiterated its 2015 financial guidance, excluding non-recurring items, reflecting a strong outlook for sales and profitability. Full-year 2015 sales are expected to range between US 1,065 million-US 1,085 million, representing an increase of 3%-5% from 2014 actual sales of US 1,031.9 million.

Full-year 2015 EBIT is expected to range between US 75 million-US 79 million, representing an increase of 1%-6% from 2014 actual EBIT of US 74.4 million. Full-year 2015 EBITDA is expected to range between US 94 million-US 99 million.

Full-year 2015 net income is expected to range between US 48.5 million-US 51.5 million, representing an increase of 0%-6% from 2014 actual net income of US 48.4 million.

Key senior management appointments  

Separately, Delta Galil also announced several key appointments to its senior management team, in a move designed to continue and accelerate the company’s growth. Yossi Hajaj, currently the Company’s CFO, will be appointed Deputy CEO, EVP and Head of Global Operations. In this capacity, he will be responsible for Delta's growing global production and other key operations.

 Jacob Heen will join Delta's senior management team and will succeed Mr Hajaj as CFO, effective in October 2015. Mr Heen comes with deep financial management experience, having served as CFO of Tnuva, Israel's leading food products group, and Cellcom, Israel’s largest telecommunications company.

“We are pleased to announce significant senior management appointments that will enable us to continue Delta Galil’s transformation as a major global apparel company and support our increased scale, global reach and operation diversification,” explained Mr Dabah.

www.deltagalil.com