Delta Galil Q2 revenues zooms 39%

The Company reported sales of $234.4 million for the second quarter of 2013, up from $169.1 million for the same quarter last year, an increase of 39%. Sales in the first six months of 2013 were $461.6 million, compared to $337.2 million in the same period of 2012, an increase of 37%.

Delta Galil’s continued top-line growth in 2013 demonstrated the Company’s strong position across a range of products, channels, customers and regions, reflected in an 18% organic increase in sales from its traditional businesses, excluding the acquired Schiesser Group.

Operating income excluding non-recurring items was $14.0 million for second quarter 2013, up 59% from $8.8 million in the same quarter of 2012. In the first six months of 2013, operating income excluding non-recurring items was $25.5 million, compared to $15.2 million in the same period of 2012, a 68% increase.

In the year-ago periods, non-recurring items included a net gain of $14.5 million pre-tax, relating to a capital gain on asset sales, net of Schiesser acquisition costs, fixed asset impairment and restructuring expenses; there were no such items in the 2013 periods.

A key contributor to the higher operating income was an expanding gross profit margin, which rose to 26.1% in the 2013 second quarter from 18.9% a year ago. This was partly offset by higher selling, marketing, general and administrative expenses as Delta Galil invested in the growth of its business.

Net income attributable to shareholders was $8.8 million in the 2013 second quarter, compared to $6.1 million (excluding non-recurring items) in the same quarter of 2012, a 44% increase. Diluted earnings per share attributed to shareholders were $0.35 for the 2013 second quarter, up from $0.25 for the 2012 second quarter. For the first six months of 2013, net income attributable to shareholders was $15.4 million or $0.61 per diluted share, compared to $10.0 million or $0.41 per diluted share (excluding non-recurring items) for the same period of 2012.

Management Comment

Isaac Dabah, CEO of Delta Galil, stated: “Our strategies to expand the Company’s retail operations, build our branded business, create innovative products and diversify our regional markets led to strong performance in the first half of 2013. We delivered record quarterly sales and operating income for the second quarter, and we anticipate continued profitable growth through the rest of this year, as reflected in our increased financial guidance.

“Our increasing top-line reflects both organic growth and our Schiesser acquisition. We performed well in key regions such as the US, Germany and Israel, and in product channels including mass merchants, department stores and specialty stores.

Today we are announcing an increase in our sales, EBIT, net income and EPS guidance for 2013, and have rewarded shareholders with dividends totaling $5 million year-to-date. We are confident that Delta Galil has great potential for continued organic growth, while also focusing on identifying select acquisition opportunities that build on our platform of product innovation and operational effectiveness.”

Delta Galil