Delta Galil Reports Strong First Quarter 2021 Results Reflecting Record Sales, Profits and Cash Flow
Delta Galil Industries (DELTY.PK) reported a successful first quarter for 2021, with sales rising 25% to $416.1 million. E-commerce sales surged 272% to $70.8 million. Gross margin improved by 400 basis points to 38.2%, and net income rebounded to $15.1 million from a loss of $30.5 million in Q1 2020. Operating cash flow grew significantly to $31.3 million. The company declared a dividend of $3.5 million, with full-year 2021 sales projected between $1,780 million and $1,820 million, indicating continued growth momentum.
- Sales increased by 25% to $416.1 million.
- E-commerce sales rose 272% to $70.8 million.
- Gross margin improved to 38.2%, up 400 basis points.
- Net income of $15.1 million, compared to a previous loss.
- Operating cash flow improved to $31.3 million.
- Dividend of $3.5 million declared.
- None.
Delta Galil Industries, Ltd. (DELT/Tel Aviv Stock Exchange, DELTY.PK), the global manufacturer and marketer of branded and private label apparel products for men, women and children, as well as leisurewear, activewear and denim, today reported its financial results for the first quarter ended March 31, 2021.
Highlights
-
Q1 sales increased
25% to$416.1 million , versus$332.7 million last year. -
E-commerce own website sales rose
272% for the first quarter of 2021 to$70.8 million , compared to$19.0 million for the first quarter of 2020. -
Gross margin increased by 400 basis points to a record Q1 level of
38.2% , versus34.2% in Q1 2020. -
Operating margin increased to a record Q1 level of
6.7% , versus negative4.8% in Q1 2020. -
Net income was
$15.1 million , compared to net loss of$30.5 million in the first quarter last year. -
Q1 earnings per share (EPS) amounted to
$0.57 , versus a loss per share of$1.19 in Q1 2020. -
Operating cash flow improved
$26.5 million to$31.3 million in the first quarter of 2021, from$4.8 million in the first quarter of 2020. Operating cash flow excluding IFRS 16 increased to$21.4 million from negative$7.8 million in Q1 2020. -
Delta Galil received
$77 million in cash as a result of the successful Delta Israel IPO completion during Q1. This, along with the strong free cash flow for the period of$21.4 million , supported further reduction the Company’s net financial debt to its lowest level since January 2018. -
Strong balance sheet highlighted by
$313 million in cash and$558.6 million in equity as of March 31, 2021. -
Net financial debt declined by
59% to$150.2 million , versus$366.4 million as of March 31, 2020. -
Delta Galil declared a dividend of
$3.5 million , or$0.13 7 per share, to be distributed on June 1, 2021. The determining and "ex-dividend" date will be May 23, 2021.
Isaac Dabah, CEO of Delta Galil, stated: “We are very pleased with our growth momentum and strong first quarter results, which reflect three consecutive quarters of record operating margin. Our operating profit increased significantly, driven by higher sales across all segments, with particular strength in our online sales, our gross margin improvement, and the effective implementation of the efficiency measures we started to put in place at the middle of last year. Our operating cash flow continues to be strong, enabling us to reduce our debt to the lowest level in the last three years. With our strong balance sheet, we have the necessary resources to deliver continued innovation and growth, and we look forward to a strong year.
We congratulate Delta Israel Brands for joining the TASE during the quarter. Delta Israel reports reflect the strong trend of growth in sales and profitability, while promoting its growth engines, expansion of the Company’s brands and its diversified product mix.”
Sales
The Company reported sales of
Online Sales
E-commerce own website sales rose
EBIT
EBIT for the first quarter of 2021 increased
Net Income
Net income for the first quarter of 2021 was
Diluted Earnings Per Share
Diluted earnings per share for the first quarter of 2021 rose to
EBITDA, Cash Flow, Net Debt and Equity
EBITDA was
Operating cash flow improved
Net financial debt as of March 31, 2021 was down to
Equity on March 31, 2021 was
Delta Galil declared a dividend of
2021 Financial Guidance
Delta Galil provided initial 2021 financial guidance, excluding one-time items and based on IFRS 16, and on current market conditions.
-
Full-year 2021 sales are expected to range between
$1,780 million -$1,820 million , representing an increase of5% -8% from 2019 actual sales of$1,690.2 million . -
Full-year 2021 EBIT is expected to range between
$140 million -$150 million , representing an increase of32% -41% from 2019 actual EBIT of$106.0 million . -
Full-year 2021 EBITDA is expected to range between
$240 million -$250 million , representing an increase of23% -28% from 2019 actual EBITDA of$195.6 million . -
Full-year 2021 net income is expected to range between
$81.5 million -$89.5 million , representing an increase of35% -49% from 2019 actual net income of$60.2 million . -
Full-year 2021 diluted EPS is expected to range between
$2.95 -$3.25 , representing an increase of25% -38% from 2019 actual EPS of$2.36 .
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 and branded Men’s underwear including the brands Schiesser, Eminence, Athena & Liabel; babywear, activewear, sleepwear such as the PJ Salvage brand, and leisurewear. Delta Galil also designs, develops markets and sells branded denim and apparel under the brand 7 For All Mankind®, and ladies apparel under the brands Splendid® and others. In addition, it sells its products under brand names licensed to the company, including Wilson, Spalding, 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, 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.
DELTA GALIL INDUSTRIES LTD. |
|||||
Concise Consolidated Balance Sheets |
|||||
As of March 31, 2021 |
|||||
|
March 31 |
|
December 31 |
||
|
2021 |
|
2020 |
|
2020 |
|
(Unaudited) |
|
(Audited) |
||
|
Thousands of Dollars |
||||
|
|
|
|
|
|
|
|
|
|
|
|
Assets |
|
|
|
|
|
Current assets: |
|
|
|
|
|
Cash and cash equivalents |
311,979 |
|
143,134 |
|
230,843 |
Restricted Cash |
874 |
|
922 |
|
898 |
Other accounts receivable: |
|
|
|
|
|
Trade receivables |
187,370 |
|
149,337 |
|
200,201 |
Taxes on income receivable |
11,723 |
|
2,103 |
|
18,305 |
Others |
43,703 |
|
39,768 |
|
38,255 |
Financial derivative |
828 |
|
649 |
|
2,020 |
Inventory |
315,170 |
|
323,068 |
|
291,703 |
Total current assets |
871,647 |
|
658,981 |
|
782,225 |
|
|
|
|
|
|
Non-current assets: |
|
|
|
|
|
Investments in associated companies
|
|
|
|
|
|
the equity method and long-term receivables |
11,969 |
|
14,140 |
|
14,668 |
Investment property |
3,209 |
|
3,114 |
|
3,389 |
Fixed assets, net of accumulated depreciation |
207,456 |
|
210,109 |
|
209,465 |
Goodwill |
148,859 |
|
144,941 |
|
150,657 |
Intangible assets, net of accumulated amortization |
270,011 |
|
264,031 |
|
266,967 |
Assets in respect of usage rights |
207,871 |
|
200,110 |
|
217,777 |
Deferred tax assets |
19,465 |
|
27,201 |
|
15,590 |
Financial derivative |
21,152 |
|
8,777 |
|
31,593 |
Total non-current assets |
889,992 |
|
872,423 |
|
910,106 |
Total assets |
1,761,639 |
|
1,531,404 |
|
1,692,331 |
|
|
|
|
|
|
DELTA GALIL INDUSTRIES LTD. |
||||||||
Concise Consolidated Balance Sheets |
||||||||
As of March 31, 2021 |
||||||||
|
March 31 |
|
December 31 |
|||||
|
2021 |
|
2020 |
|
2020 |
|||
|
(Unaudited) |
|
(Audited) |
|||||
|
Thousands of Dollars |
|||||||
Liabilities and Equity |
|
|
|
|
|
|||
Current liabilities: |
|
|
|
|
|
|||
Short-term bank loans |
14,013 |
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