USA: Delta Galil's First Quarter Sales Up 42 Per Cent
Delta Galil Industries Ltd, the global provider of private label intimate apparel, men's underwear, socks, baby wear and leisurewear, yesterday reported first quarter sales of $134.3m, an increase of 42 per cent over the comparable quarter of 2000.
North America accounted for 55 per cent of total fourth quarter sales, the UK for 27 per cent, Israel for nine per cent and Europe for nine per cent. New acquisitions - Wundies, which was acquired in September 2000, and Inner Secrets, which was acquired in January 2001 - accounted for $43.9m of first quarter sales.
Delta's sales in North America jumped 226 per cent for the quarter totaling $73.5m compared to $22.5m in 1Q of 2000. Excluding sales of Wundies and Inner Secrets, Delta's North American sales grew 31 per cent in the first quarter.
Dov Lautman, Delta's chairman noted that the increase in sales to North America was consistent with the company's strategy of expansion into the US market.
Delta's sales to its largest customer, UK chain Marks & Spencer, dropped 16 per cent for the quarter to $35.9m, representing 27 per cent of Delta's total, compared to $43m in Q1 2000, which represented 46 per cent of total sales.
Arnon Tiberg, Delta's president and CEO, noted that in dollar terms, selling prices to Marks & Spencer decreased by approximately 20 per cent in the first quarter of 2001 as compared to Q1 of 2000, representing a decrease of 10 per cent in selling prices in UK Sterling and a devaluation of approximately 10 per cent in sterling versus the dollar. Mr. Tiberg explained that the reduction was a reflection of decreases in Marks & Spencer's sales to its customers in general.
Operating profit in the first quarter decreased 12 per cent to $7.3m compared to $8.2m in the first quarter of last year.
The decrease in sales to M&S and the erosion of selling prices caused a decrease in the gross and operating margins in the first quarter of 2001 compared to the corresponding period in 2000.
Net income for the first quarter, before non recurring items, was $4.6m or $0.24 per share, a decrease of 16 per cent and 23 per cent respectively to the same period last year. Net income, after deduction of non-recurring items, amounted to $4.2m or $0.22 per share, compared with $5.5m and $0.31 per share in Q1 2000, a decrease of 24 per cent and 29 per cent respectively.
Ladies' intimate apparel reached 56 per cent of sales in the first quarter of 2001, compared to 40 per cent in the corresponding quarter of 2000.
Sales to Victoria's Secret rose 20 per cent for Q1 2001 to $10.5m compared to $8.7m in Q1 2000.
Operating cash flow for the first quarter grew significantly, totaling $21.7m compared to a negative cash flow of $1m in the first quarter last year. The increase in operating cash flow during the period is attributed mainly to the decrease in inventory in Q1 2001 compared to an increase in inventory during Q1 2000 and to the sharp decrease in accounts receivable in Q1 2001 compared to the decrease in Q1 2000.
The board announced the distribution of a dividend of $1.6m, approximately $0.08 per share, for the first quarter of 2001, payable to shareholders of record on May 22, 2001.
Companies: Delta Galil Industries Ltd
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