Investments in innovation driving growth at Delta Galil
Delta Galil Industries Ltd reported its financial results for the fourth quarter of 2011. Delta Galil reported sales of $176.4 million for the 2011 fourth quarter, compared to $153.2 million for the same quarter last year, an increase of 15%. For the 2011 full year, sales reached $678.8 million, a 9% increase over sales of $620.1 million in 2010.
Net income attributed to the company's shareholders for the 2011 fourth quarter was $8.3 million, rising 34% from $6.2 million for the year-ago quarter, while fully diluted earnings per share increased to $0.35 from $0.26. Full year 2011 net income attributed to the company's shareholders was $27.4 million, an increase of 30% from $21.1 million in 2010, while fully diluted earnings per share rose to $1.15 from $0.87 comparing the same periods.
The Company attributed the sharp growth in sales and profits to its continued investment in innovative products, including seamless shapewear, a successful sock program with Nike, and bra programs developed for leading global brands.
Isaac Dabah, CEO of Delta Galil, stated: “In 2011, we continued to deliver a broader range of products to meet the needs of many of our industry's best-known brands, leading to strong growth in both top-line and profitability. This is the 11th consecutive quarter of increased profits, and the 9th consecutive quarter of steady sales growth.” Mr. Dabah added that the improvement in results was accomplished despite increases in the price of cotton and cost of the finished products.
“The growth and expansion strategy of Delta Galil proved itself again in 2011,” Mr. Dabah continued. “Delta invested significant resources in research and development, in cooperation with the leading global brands, to grow sales to existing and new customers by developing innovative products and expanding the portfolio of products in the categories of shapewear, sportswear, bras and activewear."
"Our state-of-the-art technology, development expertise and 'body-before-fabric' philosophy allow us to deliver product advances that appeal to consumers and stand out in the market. We also continue to grow in the Israeli market through our new chain of Delta Kids, and continue to invest in expanding the retail business. In addition, we recently signed an international license agreement with the prestigious Kenneth Cole brands in the categories of intimate apparel and socks for men and women.”
The gross profit of Delta Galil amounted to $37.4 million in the fourth quarter of 2011, an increase of 24% over the fourth quarter of 2010, which had gross profit of $30.2 million. Gross margin increased to 21.2% of sales for the 2011 fourth quarter, from 19.7% of sales in the 2010 period. In 2011, gross profit reached $136.3 million, a 12% increase over 2010 gross profit of $121.3 million, with the gross margin increasing to 20.1% of sales from 19.6% of sales.
Operating profit in the fourth quarter of 2011 was$11.4 million, a 40% increase over the $8.1 million reported in the same quarter last year. Operating profit in the fourth quarter of 2011 included a one-time expense of $1 million in connection with the unconsummated Jones Group acquisition and a loss from flooding in the Thailand facility estimated at $0.9 million. For the year, operating profit grew by 28% to $39.7 million in 2011 from $31.1 million in 2010.