TEL AVIV, Israel— May 16, 2016 — Delta Galil Industries Ltd. — a manufacturer and marketer of branded and private label apparel products for ladies, men and kids, as well as leisurewear and activewear — today reported its financial results for the first quarter ended March 31, 2016.
The Company reported sales of $256.7 million for the first quarter of 2016, an increase of 2 percent from $252.8 million for the same quarter last year. The growth in sales primarily reflected a significant improvement in Europe and in Israel.
Operating income was $14.8 million for first quarter 2016, versus $15.3 million for the first quarter last year, representing a 3-percent decrease. The decline in operating income was primarily a result of the impact of mark to market valuation on hedging transactions, which resulted in a loss of $1.5 million in this quarter, versus a profit of $1.4 million in the first quarter of last year. Excluding the mark to market valuation mentioned above, the operating income in the first quarter of 2016 amounted to $16.3 million, compared to $13.9 million in the first quarter of 2015, an increase of 17 percent.
Net income attributable to shareholders was $7.9 million in the first quarter of 2016, compared to $8.9 million in the same quarter of 2015. Excluding the mark to market valuation mentioned above net of tax effect, the net income in the first quarter of 2016 amounted to $9.0 million compared to $ 7.9 million in the first quarter of 2015, an increase of 13 percent.
Diluted earnings per share attributed to shareholders were $0.31 for the 2016 first quarter, compared to $0.35 for the 2015 first quarter. Excluding the mark to market valuation mentioned above, net of tax effect, the diluted earnings per share in the first quarter of 2016 amounted to $0.35, compared to $0.31 in the first quarter of 2015, an increase of 13 percent.
Isaac Dabah, CEO of Delta Galil, stated: “Our 2016 first quarter results were in line with expectations, reflecting a moderate top-line growth and a double-digit increase in operating profit before the effect of hedging. During the quarter, we began to benefit from investments made in 2015 to improve our business, as we saw a significant increase in Delta USA’s operating profit and meaningful improvements in our global upper market performance resulting from efficiencies in our owned factories.”
“Our diverse blend of business segments, product categories and an expanded global presence, along with our strategic efforts to grow in areas such as branded products, continue to drive both growth momentum and balance,” Dabah continued. “We were pleased with the successful launch of the Puma brand license in Israel during the quarter, and will continue to expand our prominent portfolio of licensed brands by pursuing additional strategic acquisitions.”
“Looking ahead, we are focused on attaining double digit EBIT growth in 2017. We remain committed to investing in new products and resources to drive sustained profitable growth and long-term shareholder value, and with a strong balance sheet and cash position, we have the necessary financial resources to continue to invest, innovate and grow,” Dabah concluded.
EBITDA, Net Debt, Equity, Dividend and Shares Buyback
EBITDA was $20.2 million, or 7.9-percent of sales in the 2016 first quarter, increasing 3-percent compared with $19.6 million, or 7.8-percent of sales in the same quarter of 2015. EBITDA increased 18 percent excluding the effect of mark to market effect of hedging transactions in both Q1 2016 and Q1 2015.
Operating cash flow was negative $23.6 million in the 2016 first quarter, versus negative $19.8 million in the same period of 2015. The increase in negative operating cash flow was due to a $36.8 million increase in working capital, compared with a working capital increase of $33.5 million in the same quarter of 2015, reflecting the seasonality of the business. Operating cash flow for the twelve-month period ending March 31, 2016 was $66.7 million, compared to $40.1 million for the same period last year.
Net financial debt as of March 31, 2016 was $112.4 million, compared to $83.7 million as of March 31, 2015, and $74.5 million as of December 31, 2015.
Equity as of March 31, 2016 was $368.9 million, compared to $328.2 million a year earlier.
Delta Galil declared a dividend of $3.5 million, or $0.139 per share, to be distributed on June 7, 2016. The determining and “ex-dividend” date will be May 25th 2016, per the Tel Aviv Stock Exchange.
The Company has repurchased 163,216 shares since February 25th and until May 15th 2016 under its share buyback plan, representing approximately 59 percent of the $7.5 million plan approved by the board.
Reaffirming Guidance for 2016
The Company is reiterating its 2016 financial guidance, excluding non-recurring items, which is based on current market conditions and current exchange rates of $1.12 per euro and 3.80 NIS per US$. Full-year sales expected to range between $1,090 million-$1,110 million, rising 1 to 3 percent from 2015 actual sales. Full-year 2016 diluted EPS is expected to range between $1.93-$2.02, representing an increase of 2 to 7 percent from 2015 actual EPS of $1.88.
Posted May 16, 2016
Source: Delta Galil