The company reported sales of US 284.6 million for the third quarter of 2015, up from US 267.2 million for the same quarter last year, an increase of 6%.

“The 2015 third quarter was consistent with our expectations. Sales in the third quarter and the first nine months of 2015 increased at a double digit rate, led by an increase in activewear products. Growth in sales, in terms of constant currency, was reflected in all of our geographic markets,” commented Isaac Dabah, CEO of Delta Galil.

Operating income

Operating income before one-time items was US 22.1 million for third quarter of 2015, up by 2% from US 21.7 million in the same quarter of 2014. For the first nine months of 2015, operating income before one-time items was US 51.9 million, virtually unchanged from US 52.0 million a year earlier.

“Looking at the key drivers of our profitable growth this quarter, we saw an increase in sales in Delta USA and in the Global Upper Market segments, while both our Schiesser business in Europe and Delta Israel increased sales in original currency. A rising proportion of our sales now comes from branded products, which has been another of our major strategic initiatives,” said Isaac Dabah.

Long-term growth initiatives

“We have continued to invest in long-term growth initiatives. Earlier this year, we acquired the PJ Salvage brand, providing an opportunity to expand our presence in sleepwear and loungewear, attract a millennial customer base, and strengthen our position in the upper market,” said Isaac Dabah.

“We are also excited about our license agreement with Columbia for men’s and ladies’ underwear, launching in 2016; our new seamless R&D centre at Nike HQ in Oregon; and a new factory in Vietnam set to open in the 2016 first half.”       

Other figures

Operating cash flow was US 5.9 million in the third quarter and US 10.2 million in the first nine months of 2015. In the respective third quarter and nine month periods of 2014, operating cash flow was US 14.8 million and US 18.4 million.

EBITDA before one-time items was US 27.1 million or 9.5% of sales in the 2015 third quarter, an increase of 4% compared to the 2014 period. For the first nine months of 2015, EBITDA was US 65.8 million or 8.3% of sales, compared to US 65.0 million in the same period of 2014.

Net financial debt as of 30 September 2015 was US 123.5 million, compared to US 77.3 million as of 30 September 2014 and US 64.5 million as of 31 December 2014. The increase in the net financial debt was driven primarily by the PJ Salvage acquisition in the third quarter of 2015.

Financial guidance for 2015

The company reiterated its 2015 financial guidance, excluding non-recurring items. Full-year 2015 sales are expected to range between US 1,080 million-US 1,095 million, representing an organic increase of 4%-6%. The expected sales level includes the contribution from the PJ Salvage brand, acquired in the 2015 third quarter.  

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