SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 6-K
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16 of
The Securities Exchange Act of 1934
For the month of May 2004
DELTA GALIL INDUSTRIES LTD.
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(Translation of registrant's name into English)
TEXTILE BUILDING, 2 KAUFMAN STREET, TEL AVIV 68012, ISRAEL
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(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports
under cover Form 20-F or Form 40-F.
Form 20-F X Form 40-F
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Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes No X
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If "Yes" is marked, indicate below the file number assigned to the registrant in
connection with Rule 12g3-2(b): 82- N/A
-----
Attached hereto and incorporated by reference are copies of a press release
dated May 10, 2004, relating to the Registrant's earnings.
This Form 6-K, other than the tenth paragraph of the attached press release, is
hereby incorporated by reference into (i) the Registration Statement of F-3
(Registration No. 333-12984) and (ii) three Registration Statements on Form S-8
of Delta Galil Industries Ltd. (Registration Nos. 333-12608, 333-13716 and
333-102247).
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Delta Galil Industries Ltd.
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(Registrant)
By: /s/ Miki Laxer
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Name: Miki Laxer
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Title: Controller
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Date: May 12, 2004
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DELTA
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GALIL INDUSTRIES LTD.
EARNINGS RELEASE
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DELTA GALIL REPORTS FIRST QUARTER 2004 RESULTS
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TEL AVIV, ISRAEL - MAY 10, 2004 - DELTA GALIL INDUSTRIES LTD. (NASDAQ:
DELT), the global provider of private label ladies' intimate apparel, socks,
men's underwear, baby-wear and leisurewear, today reported an 11% increase in
first quarter sales to $152.1 million, compared to $136.9 million in the
comparable quarter of 2003. North America accounted for 50% of total first
quarter sales, Europe for 42% and Israel for 8%. 2003 first quarter sales to
North America, Europe and Israel accounted for 60%, 34% and 6% respectively.
Net income and diluted earnings per share for the first quarter were $4.1
million or $0.22 per share, compared to $7.3 million or $0.40 per share in the
same period last year, a decrease of 44% and 45%, respectively. Net income and
diluted earnings per share in the first quarter of 2003 included $3.1 million,
or $0.17 per share, of capital gains, net of restructuring expenses, while net
income and diluted earnings per share in the first quarter of 2004 included
capital gains of only $0.7 million or $0.04 per share.
The increase in sales in the first quarter of 2004 compared to the first
quarter of 2003 is attributed to an increase in sales to the European market,
Marks & Spencer, and the Israeli market, in addition to the consolidation of
Auburn Hosiery Mills, which was acquired in the fourth quarter of 2003. This
increase was partly offset by a decrease in sales to the US mass market.
Delta's sales in North America decreased 7% for the first quarter, totaling
$75.8 million, compared to $81.8 million in the first quarter of 2003.
Sales to the US mass market decreased 14% to $52.7 million in the first
quarter of 2004 compared to $61.0 million in the first quarter last year. Sales
to the US mass market in the first quarter of 2004 included $9.8 million due the
consolidation of Auburn. In the first half of 2003, the Company reported
intensive sales to this market, which moderated in the second half of 2003.
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Delta foresees that the total sales to this market ,excluding Auburn , in 2004
will be similar to the sales in 2003.
Delta's North American sales to Specialty and Department stores increased
11% in the first quarter, totaling $23.1 million compared to $20.8 million in
the first quarter of 2003.
Delta's sales to the European market (including Marks & Spencer) increased
37% in the first quarter totaling $64.0 million compared to $46.8 million in the
first quarter of 2003. Delta's sales to Marks & Spencer, increased 23% in the
first quarter totaling $41.3 million, compared to $33.5 million in the first
quarter of 2003. Delta's sales to the European market (excluding Marks &
Spencer) increased 71% totaling $22.7 million compared to $13.3 million in the
first quarter of 2003.
Delta's sales to the Israeli market increased 49% totaling $12.3 million,
compared to $8.3 million in the first quarter of 2003.
Arnon Tiberg, Delta's CEO, stated, "The increase in sales to Specialty and
Department stores in North America is in line with our expectation and we
foresee further improvement throughout the year. The growth in sales to Marks &
Spencer is attributed mainly to increases in most categories and the
strengthening of the Pound Sterling versus the US dollar. The increase in sales
to the European market is being driven by new customers, the consolidation of
Auburn and the strengthening of the Euro versus the US dollar. The comparative
decrease in sales to the US mass market in the first quarter reflects
intensified sales to Wal-Mart and Target in the prior year's period. We expect
total annual sales in 2004 to the US mass market , excluding Auburn , to be
similar to sales levels in 2003."
Operating profit in the first quarter decreased 39% to $6.6 million,
compared to $10.7 million in the first quarter of 2003. Operating profit in the
first quarter of 2003 included a capital gain, net of restructuring expenses,
which amounted to $3.1 million. Excluding this capital gain and restructuring
expenses, operating profit decreased by 15%. This decrease is mainly
attributable to the overall decrease in sales to the US mass market.
Selling and marketing expenses were $19.9 million, or 13% of sales, in the
first quarter of 2004 compared to $15.2 million, or 11% of sales, in the first
quarter of 2003. This increase is
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mainly attributed to increases in freight expenses and expansion in the Israeli
market with increased chain stores and related advertising expenses.
Operating cash flow in the first quarter of 2004 was negative and amounted
to $1.1 million compared to a positive operating cash flow of $17.7 million in
the first quarter of 2003. The decrease in the operating cash flow is mainly
attributed to an increase in inventory in the current quarter and a decrease in
accounts receivable in the prior year's quarter.
The board of directors of the Company announced the distribution of a
dividend of approximately $2.0 million, or $0.11 per share, for the first
quarter of 2004, payable to shareholders of record on May 18, 2004.
DELTA GALIL IS A LEADING GLOBAL MANUFACTURER OF QUALITY APPAREL SOLD UNDER
BRANDS SUCH AS CALVIN KLEIN, HUGO BOSS, NIKE, RALPH LAUREN, AND DONNA KARAN.
RECOGNIZED FOR PRODUCT INNOVATION AND DEVELOPMENT, DELTA'S PRODUCTS ARE SOLD
WORLDWIDE THROUGH RETAILERS INCLUDING MARKS & SPENCER, TARGET, WAL-MART,
VICTORIA'S SECRET, JC PENNEY, HEMA, J. CREW, CARREFOUR, GAP, AND OTHERS.
HEADQUARTERED IN ISRAEL, DELTA OPERATES MANUFACTURING FACILITIES IN ISRAEL,
JORDAN, EGYPT, TURKEY, EASTERN EUROPE, NORTH AND CENTRAL AMERICA, THE CARIBBEAN
AND THE FAR EAST. FOR MORE INFORMATION, PLEASE VISIT OUR WEBSITE:
WWW.DELTAGALIL.COM
(THIS PRESS RELEASE CONTAINS FORWARD-LOOKING STATEMENTS AS THAT TERM IS DEFINED
IN THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. SUCH STATEMENTS ARE
BASED ON THE CURRENT EXPECTATIONS OF THE MANAGEMENT OF DELTA GALIL INDUSTRIES
LTD. (THE "COMPANY") ONLY, AND ARE SUBJECT TO A NUMBER OF RISK FACTORS AND
UNCERTAINTIES, INCLUDING BUT NOT LIMITED TO OUR DEPENDENCE ON A FEW SIGNIFICANT
CUSTOMERS; OUR ANTICIPATED GROWTH STRATEGIES; OUR INTENTION TO INTRODUCE NEW
PRODUCTS; ANTICIPATED TRENDS IN OUR BUSINESS; FUTURE EXPENDITURES FOR CAPITAL
PROJECTS; AND OUR ABILITY TO CONTINUE TO CONTROL COSTS AND MAINTAIN QUALITY,
WHICH COULD CAUSE THE ACTUAL RESULTS OR PERFORMANCE OF THE COMPANY TO DIFFER
MATERIALLY FROM THOSE DESCRIBED THEREIN. FOR A MORE DETAILED DESCRIPTION OF THE
RISK FACTORS AND UNCERTAINTIES AFFECTING THE COMPANY, REFER TO THE COMPANY'S
REPORTS FILED FROM TIME TO TIME WITH THE SECURITIES AND EXCHANGE COMMISSION.)
CONTACTS:
YOSSI HAJAJ DELTA GALIL INDUSTRIES LTD. TEL: +972-3-519-3744
RACHEL LEVINE THE ANNE MCBRIDE COMPANY TEL: +212-983-1702 X207
FINANCIAL TABLES FOLLOW
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DELTA
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GALIL INDUSTRIES LTD.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
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THREE MONTHS ENDED YEAR ENDED
MARCH 31 DECEMBER 31
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2004 2003 2003
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In US $ thousand (except per share data)
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REVENUES 152,108 136,903 580,130
COST OF REVENUES 121,628 109,503 466,378
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GROSS PROFIT 30,480 27,400 113,752
SELLING, MARKETING, GENERAL AND ADMINISTRATIVE EXPENSES:
SELLING AND MARKETING EXPENSES 19,870 15,219 62,856
GENERAL AND ADMINISTRATIVE 4,111 4,570 16,718
CAPITAL GAIN FROM THE SALES OF ASSETS 53 4,057 3,645
RE STRUCTURING EXPENSES 1,007 1,007
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OPERATING INCOME 6,552 10,661 36,816
FINANCIAL EXPENSES - NET 1,661 1,364 5,637
OTHER INCOME - NET 958 252 252
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INCOME BEFORE TAXES ON INCOME 5,849 9,549 31,431
TAXES ON INCOME 1,392 1,912 7,340
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INCOME AFTER TAXES ON INCOME 4,457 7,637 24,091
SHARE IN LOSSES OF AN ASSOCIATED COMPANY (50) (120) (300)
MINORITY INTEREST - NET (303) (178) (439)
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NET INCOME FOR THE PERIOD 4,104 7,339 23,352
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EARNINGS PER SHARE - BASIC 0.22 0.40 1.28
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EARNINGS PER SHARE - DILUTED 0.22 0.40 1.24
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WEIGHTED AVERAGE NUMBER OF SHARES - IN THOUSANDS:
BASIC 18,441 18,258 18,313
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DILUTED 19,080 18,478 18,763
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DELTA
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GALIL INDUSTRIES LTD.
CONDENSED CONSOLIDATED BALANCE SHEETS
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MARCH 31 DECEMBER 31
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2004 2003 2003
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In US $ thousands
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ASSETS:
CURRENT ASSETS:
CASH AND CASH EQUIVALENTS 10,392 11,445 17,699
ACCOUNTS RECEIVABLE:
TRADE 86,047 71,036 85,723
OTHER 14,681 24,046 10,662
INVENTORIES 155,673 138,181 142,984
DEFERRED INCOME TAXES 5,325 5,464
ASSOCIATED COMPANY 1,682 1,682
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TOTAL CURRENT ASSETS 272,118 246,390 264,214
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INVESTMENTS AND LONG-TERM RECEIVABLES 7,122 7,504 7,241
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PROPERTY, PLANT AND EQUIPMENT 125,137 120,113 124,877
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OTHER ASSETS AND DEFERRED CHARGES 54,502 46,544 54,552
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TOTAL ASSETS 458,879 420,551 450,884
========= ========= =========
LIABILITIES AND SHAREHOLDER'S EQUITY:
CURRENT LIABILITIES:
SHORT-TERM BANK CREDIT 102,910 89,359 104,996
ACCOUNTS PAYABLE :TRADE 62,184 49,554 54,464
OTHER 47,886 29,640 48,142
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TOTAL CURRENT LIABILITIES 212,980 168,553 207,602
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LONG-TERM LIABILITIES:
DEFERRED INCOME TAXES 6,253 14,262 6,300
LIABILITY FOR EMPLOYEES RIGHTS UPON RETIREMENT 6,693 6,414 6,732
BANK LOANS AND OTHER LIABILITIES 11,963 21,940 14,709
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TOTAL LONG-TERM LIABILITIES 24,909 42,616 27,741
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TOTAL LIABILITIES 237,889 211,169 235,343
MINORITY INTEREST 3,147 3,722 3,207
SHAREHOLDERS' EQUITY 217,843 205,660 212,334
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TOTAL LIABILITIES AND SHAREHOLDERS EQUITY 458,879 420,551 450,884
========= ========= =========
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DELTA
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GALIL INDUSTRIES LTD.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
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THREE MONTHS ENDED
MARCH 31
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2004 2003
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In US $ thousands
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CASH FLOWS FROM OPERATING ACTIVITIES:
NET INCOME FOR THE PERIOD 4,104 7,339
ADJUSTMENT REQUIRED TO REFLECT THE CASH FLOWS FROM OPERATING ACTIVITIES (5,160) 10,401
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NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES (1,056) 17,740
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CASH FLOWS FROM INVESTING ACTIVITIES:
PURCHASE OF FIXED ASSETS, NET OF INVESTMENT GRANTS (3,859) (4,295)
PROCEEDS FROM REALIZATION OF FIXED ASSETS 108 787
PROCEEDS FROM REALIZATION OF INVESTMENT IN AN ASSOCIATED COMPANIES 2,640 2,817
OTHER (273) (176)
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NET CASH USED IN INVESTING ACTIVITIES (1,384) (867)
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CASH FLOWS FROM FINANCING ACTIVITIES:
LONG-TERM BANK LOANS, NET (2,584) (2,548)
SHORT-TERM BANK CREDIT - NET (2,086) (17,368)
OTHER (197) (3)
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NET CASH USED IN FINANCING ACTIVITIES (4,867) (19,919)
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DECREASE IN CASH AND CASH EQUIVALENTS (7,307) (3,046)
BALANCE OF CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 17,699 14,491
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BALANCE OF CASH AND CASH EQUIVALENTS AT END OF PERIOD 10,392 11,445
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DELTA
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GALIL INDUSTRIES LTD.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
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THREE MONTHS ENDED
MARCH 31
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2004 2003
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In US $ thousands
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ADJUSTMENT REQUIRED TO REFLECT THE CASH FLOWS FROM OPERATING ACTIVITIES:
INCOME AND EXPENSES NOT INVOLVING CASH FLOWS:
DEPRECIATION AND AMORTIZATION 3,987 3,615
DEFERRED INCOME TAXES - NET (446) (809)
CAPITAL GAIN FROM REALIZATION OF AN INVESTMENT IN ASSOCIATED COMPANIES (958) (994)
CAPITAL GAINS ON SALE OF FIXED ASSETS (53) (3,949)
RESTRUCTURING EXPENSES 968
OTHER 285 1,598
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2,815 429
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CHANGES IN OPERATING ASSETS AND LIABILITIES ITEMS:
DECREASE (INCREASE) IN ACCOUNTS RECEIVABLE AND ACCRUALS (3,975) 23,535
INCREASE (DECREASE) IN ACCOUNTS PAYABLE AND ACCRUALS 8,689 (8,745)
INCREASE IN INVENTORIES (12,689) (4,818)
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(7,975) 9,972
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(5,160) 10,401
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