Net Income Increased 300% to $12.0
Million
Total Sales Increased 2%, Demonstrating the
Strength of Delta’s Brands as well as the Value and Offerings the
Company Provides its Private Label Partners
Gross Margin Increased to a First Quarter
Record of 42.3%
First-Quarter EBIT Increased 80% to $26.0
Million, and EBIT Before Non-Core Items Increased 48% to $29.4
Million
First-Quarter Net-profit Before Non-Core
Items Increased 86% to $14.5 Million
Operating Cash Flow, Excluding IFRS 16,
Increased 114% to a First Quarter record of $23.5 Million
Strong Balance Sheet with Equity of $764.6
Million and Net Debt to EBITDA, Excluding IFRS 16, of 0.7x
Doubles the declared divided to $8.0 Million
for First Quarter 2024, compared to $4.0 Million for First Quarter
2023
Management Updates 2024 Guidance, and with
the Strong Start to the Year, Expects 2024’s Annual Financial
Results to be in the Mid to Upper-Range of its original
Guidance
Delta Galil Industries, Ltd. (DELG/Tel Aviv Stock Exchange), the
global manufacturer and marketer of branded and private label
intimate, activewear, loungewear and denim apparel for ladies, men,
and children, today reported financial results for the first
quarter ended March 31, 2024.
- First-quarter sales increased 2% to $450.8 million, driven by
growth across most of the Company’s segments
- First-quarter online sales of the Company’s own brands
increased 18%
- Gross margin improved 320 basis points to a first-quarter
record of 42.3%
- First quarter EBIT before non-core items increased by 48% to
$29.4 million, or 6.5% of sales compared to $19.8 million, or 4.5%
of sales, for the same period last year
- First quarter net-income before non-core items increased by 86%
to $14.5 million, or 3.2% of sales compared to $7.8 million, or
1.8% of sales, for the same period last year
- First-quarter diluted earnings per share before non-core items
increased 88% to $0.49
- Operating cash flow, for the three months ended March 31, 2024,
excluding IFRS 16, improved 114% to a record Quarter one level of
$23.5 million
- Strong balance sheet with $187.4 million in cash and
shareholders’ equity of $764.6 million at March 31, 2024
- Net debt, excluding IFRS 16, declined 38% to $139.0 million,
compared to $224.0 million at March 31, 2023
- Doubles the declared divided to $8.0 million for first quarter
2024, compared to $4.0 million for first quarter 2023
Isaac Dabah, CEO of Delta Galil, stated, “Delta’s solid
first-quarter results demonstrate the strength of our brands, the
remarkable value and offerings we provide to our Private Label
partners, and the successful implementation of the strategies we
are pursuing to deliver strong revenue and earnings growth. Our
performance during the first quarter is especially encouraging as
we returned to year-over-year growth in sales with strong
profitability and record first quarter operating cash flow. This is
a testament to the hard work and dedication of our global teams,
and the success of recent initiatives aimed at driving sales,
improving operating efficiencies and realigning our manufacturing
capabilities.”
Mr. Dabah concluded, “Our strong balance sheet and capital
position provide us with additional flexibility to execute our
growth oriented strategic plan. During the first quarter we
successfully completed the previously announced acquisition of
Passionata, which adds a complementary intimate brand with a strong
global and millennial following to our portfolio. In addition, we
continue to pursue opportunities for both our owned and licensed
brands that we believe will drive growth and profitability in 2024
and beyond.”
Sales
The Company reported first-quarter 2024 sales of $450.8 million,
a 2% increase from $442.5 million in the first quarter of 2023,
driven by growth across most of the Company’s segments.
Gross Margin
Gross margin in the first quarter of 2024 increased to a first
quarter record of 42.3%, compared to 39.1% for the same period last
year. The 320-basis point expansion was due primarily to a better
customer and channel mix, improved profitability of our factories
due to higher volume, and lower freight costs.
EBIT
EBIT in the first quarter of 2024 increased by 80% to $26.0
million, or 5.8% of sales compared to $14.4 million, or 3.3% of
sales in the prior-year period. EBIT before non-core items
increased by 48% to $29.4 million, or 6.5% of sales, compared to
$19.8 million, or 4.5% of sales, in the first quarter of 2023.
The increase in EBIT was due to higher sales and gross margin,
partially offset by higher SG&A expenses.
Non-Core Items
For the first quarter of 2024, expenses associated with the
Company’s previously disclosed realignment plan for Bare
Necessities were $3.4 million, compared to $5.4 million related to
the realignment plan of the first quarter of 2023.
Net Income
Net income in the first quarter of 2024 increased 300% to $12.0
million, compared to $3.0 million in the first quarter last year.
Net income, excluding non-core items, net of tax, increased by 86%
to $14.5 million, compared to $7.8 million in the first quarter of
2023.
Diluted Earnings Per
Share
Diluted earnings per share in the first quarter of 2024 were
$0.39, compared to $0.08 in the first quarter of 2023. Diluted
earnings per share, excluding non-core items, net of tax, were
$0.49 compared to $0.26 in the first quarter of 2023.
EBITDA, Cash Flow, Net Debt, Equity,
and Dividend
EBITDA excluding IFRS 16 impact in the first quarter of 2024 was
$37.7 million, compared to $28.5 million in the first quarter of
2023.
Cash flow generated from operating activities, excluding IFRS
16, was a first quarter record of $23.5 million, compared to $11.0
million in the first quarter of 2023. The significant
year-over-year improvement in operating cash flow was primarily
attributed to the higher EBITDA.
Net financial debt, excluding IFRS 16, at March 31, 2024, was
$139.0 million, compared to $224.0 million at March 31, 2023. The
year-over-year reduction in net debt is primarily due to the strong
operating cash flow, partially offset by growth-oriented capital
expenditures and dividend payments.
Equity on March 31, 2024, was a first quarter record of $764.6
million, up 8.7% from $703.1 million on March 31, 2023.
Delta Galil declared a dividend of $8.0 million, or $0.31 per
share, which will be distributed on June 10, 2024. The record and
“ex-dividend” date will be May 30, 2024.
2024 Financial
Guidance
Based on the strong start to the year, and current outlook,
management expects 2024’s financial results to be in the mid to
upper part of its original guidance range. The Company’s guidance
excludes non-core items, including IFRS 16, is based on ex-rates of
$1.05 to 1 Euro and NIS 3.74 to 1$, and is based on current tax
rates, which include 2024 first quarter implementation of the
Organization for Economic Co-operation and Development (OECD)
Pillar Two minimum effective corporate tax.
These forward-looking statements are based largely on the
expectations of the Company and are subject to uncertainties
including macroeconomic trends. Actual results may differ
materially from those included in the guidance as result of risks
and uncertainties which cannot be fully predicted. There is no
certainty that the aforementioned conditions will occur, and actual
results may be significantly different from those forecasted or
implied below.
Full Year 2024
Updated Guidance
(in millions, except per share
amount)
Full Year 2024
Original Guidance
(in millions, except per share
amount)
2023
Results
(in millions, except per share
amount)
Sales
$1,991.0 – 2,031.0
$1,951.0 – 2,031.0
$1,857.7
EBIT
$173.0 – 183.0
$163.0 – 183.0
$153.0
EBITDA
$266.3 – 276.3
$256.3 – 276.3
$246.8
Net income
$106.9 – 114.7
$99.1 – 114.7
$91.6
Diluted EPS ($)
$3.82 – 4.11
$3.52 – 4.11
$3.25
Based on the Company's order book and projections, the Company
expects growth in 2024 to materialize mostly in the second half of
the year.
The Company's expectations depend, among others, on the
following: returning to normalized inventory levels at our main
customers driving higher demand and improving profitability,
expanding into new categories, launching new global collections,
increasing production levels in our new factories in Vietnam and
Egypt, implementing realignment plans including the new plan for
Bare Necessities in the first quarter of 2024, improving backlog of
innovative products and launching new brands and license
agreements.
Constant Currency - Excluding the
Impact of Foreign Currency
This release refers to “reported” amounts in accordance with
IFRS accounting principles (“GAAP”), which include translation and
transactional impacts from foreign currency exchange rates. The
release also refers to “constant dollar” amounts, which exclude the
impact of translating foreign currencies into U.S. dollars, and are
considered a non-GAAP financial measure. These constant currency
performance measures should be viewed in addition to, and not in
lieu of, or superior to, Delta Galil’s operating performance
measures calculated in accordance with GAAP.
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
endeavored 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; underwear
for men including under its owned brands Schiesser, Eminence, and
Athena; babywear, activewear, sleepwear, and loungewear including
under its owned P.J. Salvage and Delta brands. Delta Galil also
designs, develops markets and sells branded denim and apparel under
the brand 7 For All Mankind®, and ladies’ and kids’ apparel under
the brand Splendid®. In addition, it sells its products under brand
names licensed to the company, including adidas, Wolford, Wilson,
Columbia, Tommy Hilfiger and others. 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, tax rates in the various countries the
company operates in, 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.
March 31
December 31
2024
2023
2023
(Unaudited)
(Audited)
Thousands of Dollars
Assets
Current assets:
Cash and cash equivalents
187,369
118,267
174,463
Restricted Cash
1,859
2,916
2,950
Short-term deposits
-
63,147
-
Trade receivables
204,655
194,875
241,216
Taxes on income receivable
1,436
11,848
77
Others
50,177
40,802
48,920
Financial derivative
76
251
228
Inventory
394,283
476,186
361,416
Asset held for sale
1,773
-
1,773
Total current assets
841,628
908,292
831,043
Non-current assets:
Investments in associated companies
accounted using
the equity method and long-term
receivables
15,068
12,372
14,897
Investment property
2,585
2,726
2,679
Fixed assets, net of accumulated
depreciation
253,698
236,436
250,343
Goodwill
144,730
144,959
145,577
Intangible assets, net of accumulated
amortization
292,567
273,158
277,952
Assets in respect of usage rights
237,880
199,457
237,177
Deferred tax assets
30,967
24,939
28,016
Financial derivative
714
1,114
903
Total non-current assets
978,209
895,161
957,544
Total assets
1,819,837
1,803,453
1,788,587
March 31
December 31
2024
2023
2023
(Unaudited)
(Audited)
Thousands of Dollars
Liabilities and Equity
Current liabilities:
Short-term bank loans
38,102
67,219
822
Current maturities of bank loans
24,965
45,441
24,105
Current maturities of bonds
29,662
29,935
29,597
Financial derivative
1,143
1,457
1,380
Current maturities of leases
liabilities
51,908
49,717
52,583
Trade payables
203,982
189,469
168,637
Taxes on income payable
29,729
33,155
35,182
Provision for restructuring plan
3,563
3,715
3,574
Others accounts payable
142,261
148,372
165,791
Total current liabilities
525,315
568,480
481,671
Non-current liabilities:
bank loans
133,471
128,744
140,790
Severance pay liabilities, net
5,434
5,901
5,327
Liabilities in respect of leases
206,311
170,377
204,746
Other non-current liabilities
53,441
59,769
53,241
Bonds
94,996
127,812
96,496
Deferred taxes liabilities
33,521
36,611
35,812
Financial derivative
2,746
2,642
2,122
Total non-current liabilities
529,920
531,856
538,534
Total liabilities
1,055,235
1,100,336
1,020,205
Equity:
Equity attributable to equity holders of
the parent company:
Share capital
23,714
23,714
23,714
Share premium
126,219
128,070
127,861
Other capital reserves
23,168
25,494
28,133
Retained earning
573,560
512,316
571,846
Treasury shares
(12,026
)
(13,877
)
(13,668
)
734,635
675,717
737,886
Minority interests
29,967
27,400
30,496
Total equity
764,602
703,117
768,382
Total liabilities and equity
1,819,837
1,803,453
1,788,587
Three months ended March
31
2024
2023
(Unaudited)
Thousands of Dollars
Except for Earning Per Share
data
Sales
450,779
442,457
Cost of sales
260,280
269,546
Gross profit
190,499
172,911
% of sales
42.3
%
39.1
%
Selling and marketing expenses
134,811
129,639
% of sales
29.9
%
29.3
%
General and administrative expenses
26,407
23,330
% of sales
5.9
%
5.3
%
Other Expenses (income), net and share in
profits of associated company
(69
)
101
Operating income excluding non-core
items
29,350
19,841
% of sales
6.5
%
4.5
%
Non-core items
3,360
5,421
Operating income
25,990
14,420
Finance expenses, net
10,938
10,582
Income before tax on income
15,052
3,838
Taxes on income
3,003
823
Net income for the period
12,049
3,015
Net income for the period excluding
non-core items, net of tax
14,486
7,772
Attribution of net earnings for the
period:
Attributed to Company's
shareholders
10,339
2,117
Attributed to non-controlling
interests
1,710
898
12,049
3,015
Net diluted earnings per share
attributed to company's shareholders
0.39
0.08
Net diluted earnings per share, before
non-core items, net of tax, attributable to Company's
shareholders
0.49
0.26
Three months ended March
31
2024
2023
(Unaudited)
Thousands of Dollars
Cash flows from operating
activities:
Net income for the period
12,049
3,015
Adjustments required to reflect cash flows
deriving from operating activities
43,337
40,338
Interest paid in cash
(8,522
)
(12,431
)
Interest received in cash
1,234
1,099
Taxes on income paid in cash, net
(12,524
)
(8,253
)
Net cash generated from operating
activities
35,574
23,768
Cash flows from investment
activities:
Change in short-term deposits, net
-
(602
)
Purchase of fixed assets
(12,295
)
(5,228
)
Purchase of intangible assets
(17,364
)
(1,276
)
Proceeds from selling of fixed assets
220
143
Others
416
1,076
Net cash used in Investing activities
(29,023
)
(5,887
)
Cash flows from financing
activities:
Dividends paid to non-controlling interest
holders in consolidated subsidiary
(1,800
)
(996
)
Long term payables credit for fixed assets
purchases
(1,406
)
(3,231
)
Lease principal repayment
(12,087
)
(12,819
)
Repayment of bonds
-
(15,140
)
Dividend paid
(9,021
)
(8,018
)
Receipt of a long-term loans from banking
corporations
543
-
Repayment of long-term loans from banking
corporations
(6,154
)
(1,905
)
Short-term credit from banking
corporations, net
37,282
15,737
Others
1,734
-
Net cash generated from (used in)
financing activities
9,091
(26,372
)
Net increase (decrease) in cash and
cash equivalents
15,642
(8,491
)
Exchange rate differences and
revaluation of cash and cash equivalents, net
(2,736
)
109
Balance of cash and cash equivalents at
the beginning of the period, net
174,463
126,649
Balance of cash and cash equivalents at
the end of the Period, net
187,369
118,267
Three months ended March
31
2024
2023
(Unaudited)
Thousands of Dollars
Adjustments required to reflect cash
flows from operating activities:
Revenues and expenses not involving cash
flow:
Depreciation
8,331
9,366
Amortization
17,610
16,127
Exchange rate losses
410
67
Interest paid in cash
5,798
10,200
Interest received in cash
(1,234
)
(1,099
)
Taxes on income paid in cash, net
12,524
8,253
Deferred taxes on income, net
(4,545
)
(2,611
)
Interest due to lease agreements
2,724
2,231
Severance pay liability, net
187
(449
)
Change in restructuring accrual
(11
)
874
Capital gain from sale of fixed assets
(76
)
(2
)
Change to the benefit component of options
granted to employees
401
809
Share in profits of associated company
accounted for using the equity method
(60
)
(64
)
Others
(1,241
)
4,116
40,818
47,818
Changes to operating assets and
liabilities:
Decrease in trade receivables
33,480
39,034
Increase in other receivable
(1,777
)
(8,306
)
Increase (decrease) in trade payables
35,460
(22,213
)
Increase in other payables
(28,330
)
(28,755
)
Decrease (Increase) in inventory
(36,313
)
12,760
2,519
(7,480
)
43,337
40,338
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240522288626/en/
For more information: Nissim Douek +972-54-5201178
Nissim@unik.co.il
U.S. Media Contact: Stacy Berns Berns Communications
Group +1-212-994-4660 sberns@bcg-pr.com