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Delta Galil Reports Record Financial Results for 2012

  Delta Galil Reports Record Financial Results for 2012

All-Time High Sales, Operating Income and EPS Distinguish 4th Quarter and Full
                               Year Performance

                          Increase Guidance for 2013

  *Sales reached $246.6 million in the 2012 fourth quarter, up 40% from the
    same period of 2011.
  *Income was $13.9 million in the 2012 fourth quarter, a 66% increase from a
    year ago.
  *Diluted earnings per share attributed to shareholders, excluding capital
    gains and non-recurring items, was $0.55 for the 2012 fourth quarter and
    $1.37 for the full year, up from $0.36 and $1.15, respectively, for the
    2011 periods.
  *Delta Galil achieved its 13^th consecutive quarter of year-over-year sales
    growth.
  *Operating cash flow was $72.9 million for 2012, up 101% from $36.3 million
    in the prior year.
  *The Board of Directors declared a dividend of approximately $2.5 million,
    or $0.1034 per share, to be distributed on March 12, 2013. The determining
    and "ex-dividend" date will be February 27, 2013.
  *The Company completed the repurchase of approximately $1.3 million in
    Delta Galil common stock.
  *Financial guidance for 2013 calls for diluted EPS of $1.51-1.59 on sales
    of $910 million to $920 million.
  *Isaac Dabah, CEO of Delta Galil, noted: “We are very proud to achieve a
    consistent 4 years growth delivering exceptional top-line and bottom-line
    performance and made great strides in executing Delta Galil’s long-term
    strategies to transform the Company into a leading, diversified global
    competitor in branded and private label apparel.”

Business Wire

TEL AVIV, Israel -- February 20, 2013

Delta Galil Industries, Ltd. (DELT/Tel Aviv Stock Exchange, DELTY.PK/OTCQX),
the global manufacturer and marketer of branded and private label apparel
products for men, women and children, today reported its financial results for
the fourth quarter and full year 2012.

Delta Galil reported record quarterly sales of $246.6 million for the three
months ended December 31, 2012, up from $176.4 million for the same quarter
last year, an increase of 40%. For the full year 2012, sales reached a record
$817.8 million, a 20% increase over sales of $678.8 million in 2011.

The strong top-line growth in 2012 reflected Delta Galil’s acquisition of
Schiesser Group, completed in July 2012, as well as a sharp increase in sales
in Europe, mainly in Germany, positive momentum in the U.S. mass market
channel.

Operating income was $19.7 million in the fourth quarter of 2012, rising 73%
from the $11.4 million reported in the same quarter of 2011. For the full year
2012, operating income excluding capital gains and non-recurring items was
$50.7 million, compared to $39.7 million in 2011, a 28% increase.

Net income attributed to shareholders was $13.8 million in the fourth quarter
of 2012, compared to $8.3 million in the same quarter of 2011, a 66% increase.
For the full year 2012, income attributed to shareholders excluding capital
gains and non-recurring items was $33.8 million, rising 23% from $23.4 million
in 2011.

Diluted earnings per share attributed to shareholders excluding capital gains
and non-recurring items was $0.55 for the 2012 fourth quarter and $1.37 for
the year. In the respective 2011 periods, the comparable amounts were $0.36
and $1.15, respectively.

Net income for the year attributed to shareholders was $56.9 million compared
to $27.4 million in 2011, an increase of 107%.

Results for the full year 2012 included a capital gain of $19.9 million from
the sale of real estate, expenses of $1.2 million from the Schiesser
acquisition, a net gain of $12.2 million due to negative goodwill attributed
to Schiesser acquisition, partially offset by a write-down of unused fixed
assets of $1.3 million, and restructuring expenses of $5.4 million.

Management Comment: Strategic Transformation and Growth

Isaac Dabah, CEO of Delta Galil, stated: “In 2012 we delivered exceptional
top-line and bottom-line performance and made great strides in executing Delta
Galil’s long-term strategies to transform the Company into a leading,
diversified global competitor in branded and private label intimate apparel.
We increased our branded business and our European footprint through the
Schiesser acquisition, further penetrated the U.S. mass market channel, and
expanded our socks category and U.S. kids business, through our recent
acquisition of Little Miss Matched.

“Our outlook for 2013 calls for Delta Galil to approach $1 billion in sales,
accompanied by further growth in profitability. We plan to get there through
continued organic growth in areas such as in Delta USA, Socks business and
Delta Israel retail operations. We have increased our guidance to 2013 from
$55-$60 million EBIT to $57-$62 million.”

Cash Flow, Equity, Dividend Declaration

Operating cash flow increased to $32.7 million for the 2012 fourth quarter and
$72.9 million for the full year, up from $21.1 million and $36.3 million for
the respective 2011 periods.

EBITDA rose by 66% to $24.1 million in the 2012 fourth quarter from $14.5
million in the same period of 2011. For the full year 2012, EBITDA grew by 26%
to $64.8 million, from $51.5 million in 2011.

Equity on December 31, 2012 was a record $277.8 million, or 50% of the total
balance sheet, compared to $217.2 million, or 49% of the balance sheet a year
earlier.

Delta Galil declared a dividend of $2.5 million, or $0.1034 per share, to be
distributed on March 12, 2013. The determining and "ex-dividend" date will be
February 27, 2013. This brings total dividend declared for 2012 to $8.5
million or $0.3566 per share.

Strong Outlook for 2013

Delta Galil increasing its financial guidance for 2013, calling for higher
EBIT and net profit than originally estimated, The following forecast excludes
the effect of any one-time items, net of tax:

  *Full-year 2013 sales are estimated to range from $910 million to $920
    million, which would constitute an average increase of 12% compared to
    2012 actual.
  *Full-year 2013 EBIT is estimated to range between $57 million and $62
    million, which would constitute an average increase of 17% compared to
    2012 actual.
  *Full-year 2013 net profit is estimated to range between $38 million and
    $40 million, which would constitute an average increase of 15% compared to
    2012 actual.
  *Full-year 2013 diluted EPS is estimated to range between $1.51 and $1.59,
    which would constitute an average increase of 13% compared to the 2012
    actual.



DELTA GALIL INDUSTRIES LTD.
Concise Consolidated Balance Sheets
As of December 31, 2012
                                                               
                                                       December 31
                                                       2012         2011
                                                       Thousands of Dollars
Assets
Current assets:
Cash and cash equivalents                              45,475       65,760
Restricted cash                                        2,822        -
Other accounts receivable:
Trade receivables                                      108,735      103,444
Taxes on income receivable                             125          1,434
Others                                                 12,124       9,770
Financial Derivative                                   719          -
Inventories                                            150,309      110,824
Assets classified as held for sale                     6,456        1,766
Total current assets                                   326,765      292,998
Non-current assets:
Long-term pre-paid expenses                            562          322
Investment property                                    4,795        -
Long-term receivables                                  12,710       1,202
Fixed assets, net of accumulated depreciation          93,019       64,184
Intangible assets, net of accumulated amortization     111,482      77,390
Deferred tax assets                                    8,833        7,014
Financial Derivative                                   1,045        -
Total non-current assets                               232,446      150,112
Total assets                                           559,211      443,110

                                                        December 31
                                                          2012       2011
                                                          Thousands of Dollars
Liabilities and Equity
Current liabilities:
Short-term bank loans                                     40,175       62,053
Current maturities of long-term loans from banking        1,357        2,110
corporations
Current maturities of Debentures                          15,965       12,367
Financial Derivative                                      -            297
Other accounts payable:
Trade payables                                            72,351       55,920
Taxes on income – payable                                 5,029        1,770
Others                                                    47,479       39,096
Total current liabilities                                 182,356      173,613
                                                                       
Non-current liabilities:
Loans from financial institutions, less current           150          1,504
maturities
Severance pay over liabilities from termination of        2,679        1,183
employer – employee relations less plan assets
Other non-current liabilities                             13,543       3,900
Debentures                                                79,323       41,506
Financial Derivative                                      -            2,978
Reserve for deferred taxes                                3,361        1,182
Total non-current liabilities                             99,056       52,253
Total liabilities                                         281,412      225,866
                                                                       
Equity:
Equity attributable equity holders of the

parent company:
Share capital                                             23,311       23,106
Share premium                                             124,220      121,216
Other capital reserves                                    8,736        (633)
Retained earnings                                         130,364      81,084
Treasury shares                                           (10,996)     (9,700)
                                                          275,635      215,073
Minority interests                                        2,164        2,171
Total equity                                              277,799      217,244
Total liabilities and equity                              559,211      443,100

 The enclosed notes constitute an integral part of these Financial Statements

                                                                 
                                                                      
                                                                      
DELTA GALIL INDUSTRIES LTD.
Concise Consolidated Statement of Comprehensive Income –(Non GAAP)
For the 3-month and 12-month periods ending December 31, 2012
                                                                      
                  For the year ended              Three months
                  December31                     ended December31
                  2012      2011      %          2012     2011      %
                  Thousands of         Increase   Thousands of        Increase
                  Dollars                         Dollars
Sales             817,782   678,819   20%        246,570  176,388   40%
Cost of sales     633,945    542,496              182,864   139,006
Gross profit      183,837    136,323              63,706    37,382
% of sales        22.5%      20.1%                25.8%     21.2%
Selling and
marketing         107,059    73,815    45%        36,632    19,110    92%
expenses
% of sales        13.1%      10.9%                14.9%     10.8%
Administrative
and general       26,691     25,705    4%         7,497     6,936     8%
expenses
% of sales        3.3%       3.8%                 3.0%      3.9%
Other income      571        2,858                103       70
(expenses), net
Operating
income
excluding
capital gains     50,658     39,661    28%        19,680    11,406    72%
and
non-recurring
items
% of sales        6.2%       5.8%                 8.0%      6.5%
Capital gain
from selling of   19,910                          -         -
asset held for
sale
Schiesser
acquisition       1,160      -                    -         -
cost
Net income
derived from
adjustments due
to Purchase       12,163     -                    -         -
Price
Allocation of
Schiesser*
Impairment of     1,309      -                    -         -
fixed assets
Restructuring     5,424      -                    -         -
expenses
Operating         74,838     39,661    89%        19,680    11,406    72%
income
Finance           8,925      7,077     26%        2,120     1,090     94%
expenses, net
Profit before     65,913     32,584               17,560    10,316
tax on income
Taxes on income   9,029      5,009                3,691     1,945
Equity income     93         -                    -         -
Income for the    56,977     27,575               13,869    8,371
period
Income for
period
excluding
capital gain      33,920     27,575    37%        13,869    8,371     66%
and
non-recurring
items, net for
period
Attribution of
net earnings
for the period
To shareholders
of the parent     56,857     27,441               13,839    8,330
company
To minority       120        134                  30        41
interests
                  56,977     27,575               13,869    8,371
Diluted
earnings per
share             2.30       1.15                 0.55      0.36
attributed to
shareholders of
the company
Diluted
earnings per
share
attributed to
shareholders of
the company       1.37       1.15                 0.55      0.36
excluding
capital gains
and
non-recurring
items

* Net Income includes, Lucky Buy of $12.6 million offset by inventory Step-Up
of $0.4 million which is included in the GAAP financials among Cost of Sales.

                                             
                                                
                                                
DELTA GALIL INDUSTRIES LTD.
Concise Consolidated Cash Flow Reports
                                                
                                                For the year ended December 31
                                                2012              2011
                                                Thousands of Dollars
Cash flows from operating activities:
Net profit for the period                       56,977             27,575
Adjustments required to reflect cash flows      31,807             18,135
deriving from operating activities
Interest paid in cash                           (8,475)            (5,720)
Interest received in cash                       604                750
Taxes on income paid in cash, net               (8,009)            (4,419)
Net cash generated from operating               72,904             36,321
activities
Cash flows from investment activities:
Cash added from purchased subsidiary            12,258             -
Purchase of subsidiary                          (86,052)           -
Acquisition of activity                         -                  (4,000)
Acquisition of fixed assets and intangible      (21,550)           (12,490)
assets
Restricted cash deposit                         (2,822)            -
Receiving grant for the purchase of fixed       -                  178
assets
Proceeds from sale of assets held for sale      41                 4,489
Proceeds from selling of fixed asset            765                218
Proceeds from a given option exercised as       -                  -
held for sale
Proceeds from sale of real estate in            2,010              -
Naharia, net of related expense
Loans to subcontractor                          (400)              (888)
Repayment of long-term receivables balances     -                  -
Loans granted to employees                      (144)              (37)
Employees' loans return                         155                31
Others                                          (98)               (208)
Net cash used for Investing activities          (95,837)           (12,707)
Cash flows from financing activities:
Dividends paid holders of minority rights
in consolidated subsidiary                      (127)              (133)
Debentures repayment                            (11,285)           -
Dividend paid                                   (7,995)            (6,000)
Repurchase of shares                            (1,296)            -
Repayment of loans and other long-term          (2,875)            (2,229)
liabilities
Short-term credit from banking                  (29,253)           4,194
corporations, net
Issuance of debentures                          50,987             -
Proceeds from exercise of employee options      3,209              265
Net cash generated from financing
activities                                      1,365              (3,903)
(used for financing activities)
Net increase (decrease) in cash and cash
                                                (21,568)           19,711
equivalents
Profit (Loss) due to exchange rate              1,283              (166)
differentials on cash and cash equivalents
Balance of cash and cash equivalents at the     65,760             46,215
beginning of the period
Balance of cash and cash equivalents at the     45,475             65,760
end of the Period

                                             
                                                
DELTA GALIL INDUSTRIES LTD.
Concise Consolidated Cash Flow Reports
                                                
                                                For the year ended December31
                                                2012              2011
                                                Thousands of Dollars
Adjustments required to reflect cash flows
from operating activities:
Revenues and expenses not involving cash
flow:
Depreciation                                    11,709             9,660
Amortization                                    2,386              2,182
Impairment of fixed assets                      1,309              -
Revaluation of cash, net                        (556)              166
Interest paid in cash                           8,475              5,720
Interest received in cash                       (604)              (750)
Taxes on income paid in cash, net               8,009              4,419
Deferred taxes on income, net                   1,287              (392)
Liabilities from termination of employer–      395                157
employee relations, net
Restructuring expenses                          2,485              -
Capital gain from sale of fixed assets          (137)              (128)
Capital gain from realization of asset          (19,910)           (2,330)
classified as held for sale
Change in benefit component of options          903                924
granted to employees
Change in fair value of financial               77                 1,034
instruments
Long-term pre-paid expenses                     220                -
Income adjustments due to Purchase Price        (12,619)           -
Allocation
Others                                          443                1,116
                                                3,872              21,778
Changes to operating assets and
liabilities:
Increase in trade receivables                   1,401              (16,352)
Decrease (increase) in other receivable and     4,037              (877)
balances
Increase in trade payables                      9,246              3,354
Decrease in other payables                      (4,051)            (2,122)
Decrease (increase) in inventory                17,302             12,354
                                                27,935             (3,643)
                                                31,807             18,135

About Delta Galil Industries

Delta Galil Industries is a global manufacturer and marketer of branded and
private label apparel products for men, women and children. Since its
inception in 1975, the Company has continually strived to create products that
follow a body-before-fabric philosophy, placing equal emphasis on comfort,
aesthetics and quality. Delta Galil develops innovative seamless apparel
including bras, shapewear and socks; intimate apparel for women; extensive
lines of underwear for men; babywear, activewear, sleepwear, and leisurewear.
For more information, visit www.deltagalil.com.

Safe Harbor Statement

Matters discussed in this press release contain forward-looking statements
within the meaning of the Private Securities Litigation Reform Act of 1995.
When used in this press release, the words "anticipate," "believe,"
"estimate," "may," "intend," "expect" and similar expressions identify such
forward-looking statements. Actual results, performance or achievements could
differ materially from those contemplated, expressed or implied by the
forward-looking statements contained herein, and while expected, there is no
guarantee that we will attain the aforementioned anticipated developmental
milestones. These forward-looking statements are based largely on the
expectations of the Company and are subject to a number of risks and
uncertainties. These include, but are not limited to, risks and uncertainties
associated with: the impact of economic, competitive and other factors
affecting the Company and its operations, markets, product, and distributor
performance, the impact on the national and local economies resulting from
terrorist actions, and U.S. actions subsequently; and other factors detailed
in reports filed by the Company.

Contact:

Delta Galil Industries, Ltd.
For more information:
Nissim Douek, +972-54-5201178
Nissim@unik.co.il
or
U.S. Media Contact:
Berns Communications Group
Stacy Berns/Jessica Liddell, +1-212-994-4660
sberns@bcg-pr.com