TEL AVIV, Israel--(BUSINESS WIRE)--Delta Galil Industries, Ltd. (DELT/Tel Aviv Stock Exchange), 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 record financial results for the fourth quarter and full year ended December 31, 2021.
Isaac Dabah, CEO of Delta Galil, stated: “We are very pleased to have completed 2021 with an exceptional quarter, reflecting the successful execution of our growth strategy. Throughout the year, we consistently delivered higher sales and better profitability, as demonstrated by Q4 representing our fourth consecutive quarter of record revenues and sixth consecutive quarter of record operating margin. We concluded the year with strong growth in all channels, geographies and segments, and expect momentum to continue in 2022. With a solid foundation in place and enhanced performance of our growth engines, we will continue to invest in our technology, manufacturing and distribution infrastructure to support our growth needs.”
Highlights
- Q4 sales rose 26% to a record $578.0 million, compared to $459.7 million in Q4 2020.
- Q4 EBIT increased 49% to a record $64.7 million, from $43.4 million in Q4 2020.
- Q4 net profit increased 92% to a record $45.5 million, compared to $23.7 million in Q4 2020.
- Q4 EBITDA excluding IFRS 16 increased to a record $75.0 million, compared to $55.6 million in Q4 2020.
- Q4 earnings per share (EPS) excluding one-time items increased to a record $1.60, compared to $1.08 in Q4 2020.
- Operating cash flow excluding IFRS 16 was a strong $121 million, while the balance sheet was highlighted by $649.2 million in equity as of December 31, 2021.
- Net financial debt excluding IFRS 16 declined to the lowest level since the end of 2015, at $95.2 million as of December 31, 2021, compared to $236.3 million as of December 31, 2020.
- The Company declared a dividend of $10 million, or $0.39 per share, to be distributed on March 8, 2022. The determining and “ex-dividend” date will be February 23, 2022.
Sales
The Company reported sales of $578.0 million for the fourth quarter of 2021, a 26% increase compared to $459.7 million for the fourth quarter of 2020. Sales for the 2021 full year were $1,951.0 million, a 35% increase from $1,446.2 million for the same period last year. Effective as of the second quarter of 2021, Delta Galil reorganized its business segments to better reflect and align with its strategic focus. The new segments – Brands (owned and licensed), Private Label, Delta Israel, 7 for All Mankind and Online Retailer – all contributed to the recent sales growth. Growth was also seen across all geographic regions and sales channels.
Digital Sales
E-commerce own website sales were increased by 149% and amounted to $66.9 million for the fourth quarter of 2021, compared $26.9 million in the fourth quarter of 2019, but reduced by 12% compared to $76.1 million in the fourth quarter of 2020. E-commerce own website sales for the 2021 full year increased 282% and amounted to $253.6, compared to $66.3 million in 2019, and by 66% compared to $152.5 million in 2020
EBIT
EBIT excluding one-time items for the fourth quarter of 2021 was an all-time high of $64.7 million, a 36% increase compared to $47.7 million for the same period last year. The record-breaking EBIT was driven by higher sales of all segments and improved SG&A leverage of fixed costs.
EBIT for the 2021 full year excluding one-time items was $188.1 million, a 282% increase from $49.3 million in the comparable 2020 full year.
Net Income
Net income for the fourth quarter of 2021 increased 92% to $45.5 million, from $23.7 million in the fourth quarter last year. Excluding one-time items, net income was $45.5 million for the fourth quarter of 2021, a 67% increase compared to $27.3 million for the fourth quarter of 2020.
For the 2021 full year, net income was $120.3 million, compared to a net loss of $40.5 million for the same period last year. Excluding one-time items, net income for the 2021 full year was $124.2 million, compared to $3.8 million for the 2020 full year.
Diluted Earnings Per Share
Diluted earnings per share for the fourth quarter of 2021 were $1.60, compared to $0.94 fourth quarter of 2020. Excluding one-time items, diluted earnings per share were $1.60, compared to $1.08 for the fourth quarter of 2020.
For the 2021 full year, diluted earnings per share were $4.29 compared to diluted loss per share of $1.56 in the 2020 full year. Excluding one-time items, diluted earnings per share amounted to $4.44 for the 2021 full year, compared to $0.18 for same period last year.
EBITDA, Cash Flow, Net Debt and Equity and Dividend
EBITDA excluding IFRS 16 increased to $75.0 million for the fourth quarter of 2021, from $55.6 million in the comparable fourth quarter of 2020.
For the 2021 full year, EBITDA excluding IFRS 16 increased to $223.1 million, from $81.1 million in the 2020 full year.
Operating cash flow for the fourth quarter of 2021 was $72.0 million, compared to $83.7 million in the fourth quarter of 2020. Excluding IFRS 16 and loss from early redemption of bonds, operating cash flow was $57.9 million in the 2021 fourth quarter, compared to $75.6 million in the same period last year. The decrease compared with the year-ago period was primarily due to higher operational working capital to accommodate additional inventory to support our anticipated sales growth and due to longer lead times.
Operating cash flow excluding IFRS 16 and loss from early redemption of bonds for the year ended December 31, 2021 was $120.8 million, compared to $161.6 million for the year ended December 31, 2020.
Net financial debt excluding IFRS 16 as of December 31, 2021 was $95.2 million, compared to $236.4 million as of December 31, 2020, the lowest level since 2015.
Equity on December 31, 2021 was $649.2 million, compared with $476.4 million a year earlier.
Delta Galil declared a dividend of $10 million, or $0.39 per share, to be distributed on March 8, 2022. The determining and “ex-dividend” date will be February 23, 2022.
2022 Financial Guidance
As a result of the Company’s exceeded 2021 guidance, combined with current market conditions, Delta Galil increased the lower end of its 2022 financial guidance. This guidance excludes non-core items and is based on IFRS 16 assuming there is no major resurgence of the COVID-19 pandemic that leads to quarantines and/or lockdowns in any countries in which the company sells or manufactures its products:
$ in millions |
|||||
| 2021 ACTUAL | 2022 PREVIOUS GUIDANCE |
2022 PREVIOUS GUIDANCE VS. 2021 |
2022 UPDATED GUIDANCE |
2022 UPDATED GUIDANCE VS. 2021 |
|
Sales |
1,951.0 |
2,082 - 2,135 |
7% - 9% |
2,082 - 2,135 |
7% - 9% |
EBIT* |
188.1 |
204 - 220 |
8% - 17% |
210 - 220 |
12% - 17% |
EBITDA* |
286.8 |
306 - 322 |
7% - 12% |
312 - 322 |
9% - 12% |
Net Income* |
124.2 |
133 - 145 |
7% - 17% |
138 - 145 |
11% - 17% |
Diluted EPS* ($) |
4.44 |
4.63 - 5.09 |
4% - 15% |
4.80 - 5.09 |
8% - 15% |
*Before one time items, includes IFRS 16 impact |
|||||
• Full-year 2022 sales are expected to range between $2,082 million and $2,135 million, representing an increase of 7%-9%, compared to 2021 sales of $1,951 million.
• Full-year 2022 EBIT is expected to range between $210 million and $220 million, representing an increase of 12%-17%, compared to 2021 EBIT of $188.1 million.
• Full-year 2022 EBITDA is expected to range between $312 million and $322 million, representing an increase of 9%-12% from 2021 EBITDA of $286.8 million.
• Full-year 2022 net income is expected to range between $138 million and $145 million, representing an increase of 11%-17% from 2021 net income of $124.2 million.
• Full-year 2022 diluted EPS is expected to range between $4.80 and $5.09, representing an increase of 8%-15% from 2021 EPS of $4.44.
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 brand Splendid®. 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.
Source: Delta Galil Industries, Ltd.
DELTA GALIL INDUSTRIES LTD. Concise Consolidated Balance Sheets As of December 31, 2021 |
|||
|
December 31 |
||
|
2021 |
|
2020 |
|
(audited) |
||
Thousands of Dollars |
|||
Assets |
|
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
230,129 |
|
230,843 |
Restricted Cash |
5,845 |
|
898 |
Other accounts receivable: |
|
|
|
Trade receivables |
202,140 |
|
200,201 |
Taxes on income receivable |
11,272 |
|
18,305 |
Others |
43,511 |
|
38,255 |
Financial derivative |
1,615 |
|
2,020 |
Inventory |
395,158 |
|
291,703 |
Total current assets |
889,670 |
|
782,225 |
|
|
|
|
|
|
|
|
Non-current assets: |
|
|
|
Investments in associated companies accounted using the equity method and long-term receivables |
12,593 |
|
14,668 |
Investment property |
2,997 |
|
3,389 |
Fixed assets, net of accumulated depreciation |
212,999 |
|
209,465 |
Goodwill |
147,447 |
|
150,657 |
Intangible assets, net of accumulated amortization |
287,109 |
|
266,967 |
Assets in respect of usage rights |
191,213 |
|
217,777 |
Deferred tax assets |
18,705 |
|
15,590 |
Financial derivative |
12,098 |
|
31,593 |
Total non-current assets |
885,161 |
|
910,106 |
Total assets |
1,774,831 |
|
1,692,331 |
DELTA GALIL INDUSTRIES LTD. Concise Consolidated Balance Sheets As of December 31, 2021 |
|||
December 31 |
|||
2021 |
2020 |
||
(audited) |
|||
|
Thousands of Dollars |
||
Liabilities and Equity |
|
|
|
Current liabilities: |
|
|
|
Short-term bank loans |
- |
|
11,013 |
Current maturities of bank loans |
7,501 |
|
20,295 |
Current maturities of debentures |
32,102 |
|
39,029 |
Financial derivative |
- |
|
170 |
Current maturities of leases liabilities |
51,776 |
|
60,363 |
Other accounts payable: |
|
|
|
Trade payables |
247,662 |
|
186,903 |
Taxes on income payable |
27,070 |
|
26,294 |
Provision for restructuring plan |
8,879 |
|
26,825 |
Others |
172,607 |
|
150,737 |
Total current liabilities |
547,597 |
|
521,629 |
|
|
|
|
Non-current liabilities: |
|
|
|
Bank loan |
117,122 |
|
104,096 |
Severance pay liabilities less plan assets |
7,075 |
|
9,499 |
Liabilities in respect of leases |
158,851 |
|
182,408 |
Other non-current liabilities |
78,891 |
|
43,030 |
Debentures |
176,316 |
|
316,764 |
Deferred taxes liabilities |
39,797 |
|
38,513 |
Total non-current liabilities |
578,052 |
|
694,310 |
Total liabilities |
1,125,649 |
|
1,215,939 |
|
|
|
|
Equity: |
|
|
|
Equity attributable to equity holders of the parent company: |
|
|
|
Share capital |
23,714 |
|
23,714 |
Share premium |
129,500 |
|
130,260 |
Other capital reserves |
53,335 |
|
6,604 |
Retained earning |
432,189 |
|
332,268 |
Treasury shares |
(15,307) |
|
(16,067) |
|
623,431 |
|
476,779 |
Minority interests |
25,751 |
|
(387) |
Total equity |
649,182 |
|
476,392 |
Total liabilities and equity |
1,774,831 |
|
1,692,331 |
DELTA GALIL INDUSTRIES LTD. Consolidated Statement of Comprehensive Income For the 3 month and year ending December 31, 2021 |
||||||||
|
Year ended December 31 |
|
Three months ended December 31 |
|||||
|
2021 |
|
2020 |
|
2021 |
|
2020 |
|
|
(audited) |
|||||||
|
Thousands of Dollars |
|||||||
|
Except for Earnings per Share Data |
|||||||
Sales |
1,950,958 |
1,446,187 |
577,986 |
459,679 |
||||
Cost of sales |
1,174,247 |
922,502 |
346,080 |
275,252 |
||||
Gross profit |
776,711 |
523,685 |
231,906 |
184,427 |
||||
% of sales |
39.8% |
36.2% |
40.1% |
40.1% |
||||
Selling and marketing expenses |
491,604 |
385,507 |
139,633 |
113,796 |
||||
% of sales |
25.2% |
26.7% |
24.2% |
24.8% |
||||
General and administrative expenses |
95,391 |
77,011 |
25,052 |
21,035 |
||||
% of sales |
4.9% |
5.3% |
4.3% |
4.6% |
||||
Impairment loss on trade receivable |
1,334 |
9,671 |
1,288 |
927 |
||||
Other expenses (income), net and share in profits of associated company accounted for using the equity method |
284 |
2,237 |
1,230 |
935 |
||||
Operating income excluding non-core items |
188,098 |
49,259 |
64,703 |
47,734 |
||||
% of sales |
9.6% |
3.4% |
11.2% |
10.4% |
||||
Restructuring expenses |
- |
39,154 |
- |
- |
||||
Impairment of non-financial assets |
- |
16,811 |
- |
4,031 |
||||
Deal cost |
- |
435 |
- |
309 |
||||
Operating income (loss) |
188,098 |
(7,141) |
64,703 |
43,394 |
||||
Finance expenses, net |
37,397 |
37,475 |
7,755 |
9,762 |
||||
Income (loss) before tax on income |
150,701 |
(44,616) |
56,948 |
33,632 |
||||
Taxes on income (Tax savings) |
30,395 |
(4,095) |
11,480 |
9,892 |
||||
Net income (loss) for the period |
120,306 |
(40,521) |
45,468 |
23,740 |
||||
Net income (loss) for the period excluding non-core items, net of tax |
124,199 |
3,811 |
45,468 |
27,270 |
||||
|
|
|
|
|
||||
Attribution of net earnings (loss) for the period: |
|
|
|
|
||||
Attributed to company's shareholders |
112,781 |
(39,850) |
42,507 |
24,068 |
||||
Attributed to non-controlling interests |
7,525 |
(671) |
2,961 |
(328) |
||||
|
120,306 |
(40,521) |
45,468 |
23,740 |
||||
Net diluted earnings (loss) per share attributed to company's Shareholders |
4.29 |
(1.56) |
1.60 |
0.94 |
||||
Net diluted earnings per share, before non-core items, net of tax attributable to Company's shareholders |
4.44 |
0.18 |
1.60 |
1.08 |
||||
DELTA GALIL INDUSTRIES LTD. Consolidated Cash Flow Reports |
|||
|
Year ended |
||
|
December 31 |
||
|
2021 |
|
2020 |
|
(audited) |
||
|
Thousands of Dollars |
||
Cash flows from operating activities: |
|
|
|
Net income (loss) for the period |
120,306 |
|
(40,521) |
Adjustments required to reflect cash flows deriving from operating activities |
93,803 |
|
282,916 |
Interest paid in cash |
(33,040) |
|
(23,185) |
Interest received in cash |
1,091 |
|
1,062 |
Taxes on income paid in cash, net |
(15,634) |
|
(1,867) |
Net cash generated from operating activities |
166,526 |
|
218,405 |
Cash flows from investment activities: |
|
|
|
Acquisition of fixed assets |
(25,316) |
|
(17,970) |
Acquisition of intangible assets |
(4,839) |
|
(3,478) |
Providing a loan to a business partner |
(1,750) |
|
(2,500) |
Acquisition of subsidiaries net of cash of the acquired subsidiaries |
- |
|
(13,469) |
Proceeds from selling of fixed asset |
944 |
|
568 |
Others |
(2,000) |
|
2,705 |
Net cash used in Investing activities |
(32,961) |
|
(34,774) |
Cash flows from financing activities: |
|
|
|
Dividends paid to non-controlling interest holders in consolidated subsidiary |
(1,592) |
|
- |
Long term payables credit for fixed assets purchases |
(4,373) |
|
(3,787) |
Lease principle repayments |
(50,762 |
|
(47,022) |
Early redemption of Debentures |
(94,313) |
|
- |
Repayment of Debentures |
(37,650) |
|
(37,568) |
Dividend paid |
(15,489) |
|
(6,506) |
Receipt of a long-term loans from banking corporations |
74,950 |
|
44,464 |
Repayment of long-term loans from banks |
(68,201) |
|
(9,778) |
Short-term credit from banking corporations, net |
(10,962) |
|
11,013 |
Repayment of bank loan used to acquisition of a subsidiary |
(6,006) |
|
(8,855) |
Net proceeds from issuance of a subsidiary |
77,156 |
|
- |
Others |
2,940 |
|
49 |
Net cash used in financing activities |
(134,302) |
|
(58,039) |
Net increase (decrease) in cash and cash equivalents |
(737) |
|
8,661 |
Balance of cash and cash equivalents less bank overdraft at the beginning of the period, net |
230,843 |
|
106,426 |
Balance of cash and cash equivalents less bank overdraft at the end of the Period, net |
230,129 |
|
230,843 |
|
|
|
|
DELTA GALIL INDUSTRIES LTD. Consolidated Cash Flow Reports |
|||
Year ended |
|||
December 31 |
|||
2021 |
2020 |
||
(audited) |
|||
Thousands of Dollars |
|||
Adjustments required to reflect cash flows |
|
|
|
from operating activities: |
|
|
|
Revenues and expenses not involving cash flow: |
|
|
|
Depreciation |
33,329 |
|
36,353 |
Amortization |
64,345 |
|
62,063 |
Impairment of non-financial assets |
- |
|
16,811 |
Cash erosion, net |
(2,940) |
|
1,082 |
Interest paid in cash |
18,375 |
|
23,185 |
Interest received in cash |
(1,091) |
|
(1,062) |
Taxes on income paid in cash, net |
15,634 |
|
1,867 |
Deferred taxes on income, net |
(1,007) |
|
522 |
Interest due to lease agreements |
9,609 |
|
9,836 |
Severance pay liability, net |
(1,833) |
|
(579) |
Restructuring (payments) provision |
(17,946) |
|
25,390 |
Decrease in liabilities in respect of leases due to rent payments relief |
(3,502) |
|
(6,026) |
Capital loss from sale of fixed assets |
(272) |
|
(314) |
Loss from early redemption of Debentures |
5,056 |
|
- |
Change to the benefit component of options granted to employees |
2,630 |
|
1,291 |
Impairment loss on trade receivables |
1,334 |
|
9,671 |
Share in profits of associated company accounted for using the equity method |
(285) |
|
(397) |
Others |
405 |
|
2,702 |
|
121,841 |
|
182,395 |
Changes to operating assets and liabilities: |
|
|
|
Decrease (increase) in trade receivables |
(10,450) |
|
6,408 |
Increase in other receivable and balances |
(2,544) |
|
(15,967) |
Decrease (increase) in trade payables |
55,304 |
|
39,024 |
Decrease in other payables |
38,704 |
|
7,405 |
Decrease (increase) in inventory |
(109,052) |
|
63,651 |
|
(28,038) |
|
100,521 |
|
93,803 |
|
282,916 |
