“Our balanced and diversified mix of businesses, products and markets – along with our strategic efforts to grow in areas, such as branded products and activewear – drove solid momentum in sales and earnings in the 2015 first quarter,” commented Isaac Dabah, CEO of Delta Galil.

Sales growth

The company reported sales of US 252.8 million for the first quarter of 2015, up from US 238.1 million for the same quarter last year, an increase of 6%, after the effect of currency translation, and a 13% increase in original currency. The growth in sales reflected increases in several geographic markets.

Operating income was US 15.3 million for first quarter 2015, up by 3% from US 14.8 million in the same quarter of 2014. The growth in operating income was driven primarily by higher sales, the company reports.

“The strongest contributors to our sales growth globally have been North America, Germany and Israel.  Branded products continue to contribute a larger proportion of our sales, reflecting our strategy to grow this aspect of our business in recent years,” explained Isaac Dabah.

New products and relationships

“Delta Galil’s performance in 2015 will benefit from new products and licensing relationships with leading brands that we have launched during the first quarter of 2015, such as Lacoste and Marc O'Polo,” said Isaac Dabah.

“In Activewear, we have licenses with Avia and Kenneth Cole, and a design and manufacturing agreement with Asics, among others. We also are continuing to invest in additional manufacturing capacity, as well as in our retail stores in Europe and Israel. And, with a solid cash position of US 145.3 million, we have the financial resources to support our investments in innovation, growth and progress.”

Other figures

EBITDA was US 19.6 million or 7.8% of sales in the 2015 first quarter, increasing by 3% compared with US 19.0 million or 8% of sales in the same quarter of 2014.

Operating cash flow was negative US 19.8 million in the 2015 first quarter, versus negative US 6.6 million in the same period of 2014. The increase in the negative operating cash flow in the 2015 first quarter was due to a US 33.5 million increase in working capital, compared with a moderate working capital increase of US 18.7 million in the same quarter of 2014, reflecting the seasonality of the business.

Net financial debt as of 31 March 2015 was US 83.7 million, compared to US 83.2 million as of 31 March 2014 and US 64.5 million as of 31 December 2014. The increase in the net financial debt as of 31 March 2015 compared to 31 December 2014 is attributed mainly to the negative operating cash flow.

Guidance for 2015

The company has reiterated its 2015 financial guidance, excluding non-recurring items, which is based on current market conditions and current exchange rates of US 1.12 per Euro and 3.90NIS per US dollar, 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, representing an increase of 1%-6% from 2014 actual EBITDA of US 93 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.

www.deltagalil.com