MIRA
INFORM REPORT
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Report Date : |
13.02.2007 |
IDENTIFICATION
DETAILS
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Name : |
DELTA - GALIL INDUSTRIES LTD. |
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Registered Office : |
P.O. Box 10265 (61112), 2 Kaufman Street,
Textile House, Tel Aviv 68012 |
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Country : |
Israel |
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Date of Incorporation : |
09.06.1975 |
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Legal Form : |
Private
Limited Company |
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Line of Business : |
Manufacturers,
marketers, retailers and exporters of private label women’s intimate apparel,
men’s underwear, T-shirts, stockings, socks, baby wear bleachers,
mercerization, seamless underwear, etc. |
RATING & COMMENTS
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MIRA’s Rating : |
Aaa |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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>86 |
Aaa |
Possesses an extremely sound financial
base with the strongest capability for timely payment of interest and
principal sums |
Unlimited |
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Status : |
Good |
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Payment Behaviour : |
Regular |
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Litigation : |
Clear |
name & address
DELTA -
GALIL INDUSTRIES LTD.
P.O. Box 10265 (61112)
2 Kaufman Street
Textile House
TEL AVIV 68012 ISRAEL
Telephone 972 3 519 36 36
Fax 972 3 519 37 05
HISTORY
Originally incorporated as a
private limited company under the name of DELTA TEXTILE LTD. and registered as
such as per file No. 51-086339-2 on the 9.6.1975.
On the 30.8.1983 merged with
GALIL INDUSTRIES AND DEVELOPMENT (NAHARIA) LTD., originally incorporated as a
public limited company as per file No. 52-002560-2 on the 20.3.1961, under the
name MULLER TEXTILE LTD.
Name changed to the present one
on 21.2.1999.
In August 1982 published a
prospectus, offering shares to the public on the Tel Aviv Stock Exchange.
In March 1999 published a
prospectus, offering shares to the public on the NASDAQ Stock Exchange.
SHARE CAPITAL
Authorized share capital NIS
26,000,000.00, divided into - 26,000,000 ordinary shares of NIS 1.00 each,
of which shares amounting to NIS
19,947,849.00 were issued.
SHAREHOLDERS
1.
GMM CAPITAL LLC., 28.5%, controlled by Isaac Dabah, of the USA,
2.
Dov Lautman, 24.8%,
3.
MENORAH HOLDINGS LTD, 5.3%,
4.
Arnon Tiberg, 3.6%,
5.
Amior Vinocourt, Aharon Dovrat, Harvey Krueger (holding each less than 1%),
6.
Shares are also traded on the NASDAQ Stock Exchange (symbol DELT) and the Tel
Aviv Stock Exchange.
In August 2005, Isaac Dabah
acquired SARA LEE shares (23%) in subject, for a sum of US$ 27.7 million.
DIRECTORS
1. Dov Lautman, Chairman and CEO, also founder of subject,
2. Giora Morag,
3. Dan Proper,
4. Noam Lautman,
5. Israel Baum,
6. Harvey M. Krueger,
7. Amior Vinocourt,
8. Amnon Neubach,
9. Aharon Dovrat,
10. Isaac Dabah,
11. Gideon Chitiyat,
12. Arnon Tiberg.
GENERAL MANAGER
Aviram Lahav.
BUSINESS
Subject, directly and through its
subsidiaries, operates as designers, manufacturers, marketers, retailers and
exporters of private label women’s intimate apparel, men’s underwear, T-shirts,
stockings, socks, baby wear bleachers, mercerization, seamless underwear, etc.
Also (through a fully owned
subsidiary) operates a retail chain store (over 50 shops) of undergarment and
additional products all over Israel, under the name DELTA PLUS.
Main customer: MARKS &
SPENCER of the U.K., comprising 23% of sales in 2005.
Other customers: WAL-MART, KMART,
TARGET, MARVYN'S, HUGO BOSS, J C PENNY, NIKE, VICTORIA’S SECRET, HEMA (of the Netherlands), CALVIN KLEIN,
PIERRE CARDIN, etc.
Among local suppliers: AVCO
CHEMICALS, NILIT,
SALINA INDS., GROFIT PLASTICS, ARYOS MARKETING, B & E INTERNATIONAL, A.
SHITZER, etc.
Operating from:
1.
headquarters,
on an area of 1,200 sq. meters in 2 Kaufman Street, Textile House, Tel Aviv,
2.
a
plant, on an area of 67,000 sq. meters in Carmiel (including the International
Intimate Apparel Division),
3.
a
plant and warehouse, on an area of 4,200 sq. meters in Daliat El Carmel,
4.
Offices
and a logistics center, on an area of 7,000 sq. meters in Rosh Ha'ayin,
5.
A
warehouse, on an area of 5,500 sq. meters in Yodfat,
6.
Plants
in Jordan, Egypt, Thailand, India, USA, and Bulgaria; also having manufacturing
subcontractors in Egypt, Bulgaria, Turkey, Central America and the Far East,
7.
Offices
and logistics centers in England (London and Northhampton), Central America,
China, the USA and Far East.
6 facilities/plants are owned and
9 leased.
Having 13,325 employees, serving
the whole Group (2,357 in Israel).
MEANS
Consolidated B/S shows:
US$ (thousands)
31.12.2005 30.09.2006
ASSETS
Current assets:
Cash
and cash equivalents 14,595 9,060
Customers 104,424 115,637
Other
debtors 13,244 12,038
Stock 147,142 131,201
Assets
for realization 7,420 4,532
Deferred
income taxes __4,726 __4,845
291,551 277,313
Investments and long-term debits 7,436 9,140
Fixed assets 109,131 100,879
Other assets and deferred expenses 53,956 55,266
Intangible assets _14,499 _13,820
476,573 456,418
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LIABILITIES
Current liabilities 210,602 220,184
Long term liabilities 78,794 45,715
Minority rights 2,863 2,850
Equity 184,314 187,669
476,573 456,418
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Current market value US$ 148
million
In March
1999 subject raised US$ 20 million in a public offering of shares on the NASDAQ
Stock Exchange.
Subject is an “Approved
Enterprise” and as such entitled for State support and tax relieves.
In July 2003, the Investment
Center Administration approved a US$ 1 million investment plan in the expansion
of subject's plant in Daliyat El Carmel.
There are 21 charges for
unlimited amounts registered on the company’s assets.
ANNUAL SALES
Consolidated Statement of Income
US$ (thousands)
Year ended 31.12
2003 2004 2005
Sales 580,130 654,269 684,481
Gross profit 113,752 121,233 101,682
Operating income
(loss) 36,816 22,409 (28,204)
Pre-tax income (loss) 31,431 17,136 (38,122)
Net income (loss) 23,352 12,685 (36,347)
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Consolidated first 3 quarters of 2006 sales US$
532,571,000 (3.5% increase compared to the parallel period in 2005), making a
gross profit of US$ 100,749,000, an operating income of US$ 17,207,000, making
a net profit of US$ 2,735,000 (compared to a net loss of US$ 28,743,000 in the
parallel period in 2005 and a net loss of US$ 510,000 in the first half of
2006).
OTHER COMPANIES
Main subsidiaries:
DELTA ELASTIC TAPES INDUSTRIES LTD.,
90%, manufacturers and marketers of elastic ribbons, etc for underwear,
DELTA TEXTILE MARKETING LTD.,
100%, operate the DELTA PLUS retail chain,
DELTA TEXTILE (NEW YORK), USA,
100%,
SPORT SOCKS CO. LTD., 100%,
Ireland,
DELTA GALIL HOLLAND B.V., 100%,
DELTA TEXTILE (EGYPT) FREE ZONE
S.A.E., 100%,
DOMINION HOSIERY INC., Canada,
100%,
DELTA GALIL USA INC., USA, 100%,
DELTA GALIL EUROPE LTD., UK,
100%,
CENTURY WEAR CORPORATION (WLL),
Jordan, 50%,
AUBURN HOSIERY MILLS INC., 100%,
USA,
BURLEN CORP., 100%, USA,
THAI PROGRESS GARMENT CO. LTD.,
100%, Thailand.
BANKERS
Bank Hapoalim Ltd., Central Branch (No.
600), Tel Aviv.
Bank Leumi LeIsrael Ltd., Central Branch
(No. 800), Tel Aviv.
CHARACTER AND
REPUTATION
Nothing unfavorable learnt.
Subject
is the largest textile company in Israel.
At the end of 1999 subject opened
2 new plants, one for baby wear and the other for manufacturing bras.
On the 19.1.2000, subject,
through a wholly owned subsidiary, purchased all of assets of DOMINION HOSIERY
MILLS INC., a Canadian socks manufacturer, in consideration of US$ 8.3 million.
In September 2000 subject
announced it completed the acquisition of WUNDIES INDUSTRIES INC., of the USA.
In consideration of the
acquisition, WUNDIES received 6.8% of subject’s shares.
In January 2001, as part of its
strategy of increasing its sales to North America, subject, via its new
subsidiary WUNDYES INDUSTRIES INC., acquired the entire shares of INNER
SECRETS, in consideration of US$ 55 million (85% in cash and 15% in shares). INNER
SECRETS, a New Jersey based company, are manufacturers and marketers of private
label bras and other ladies intimate apparel.
In August 2001 subject closed
down its sewing plant in Horafish Village (northern Israel) and retrenched 120
employees.
Subject decided to transfer the
activities of the Horafish plant abroad, where labor is cheaper.
In July 2002, it was reported
that subject was granted a concession to manufacture and market undergarment
textile products under the brand name “Diadora”.
In August 2002, subject reported
that STRETCHLINE, a UK based global leader in the elastic tapes field, acquired
10% of subject’s subsidiary, DELTA ELASTIC TAPES INDUSTRIES LTD., for a sum of
US$ 250,000.
In August 2002, it was reported
that following the deal between DELTA and STRETCHLINE, the companies intend to
increase DELTA ELASTIC TAPES INDUSTRIES LTD’s scope of customers outside the
DELTA Group, and to erect an elastic tapes plant in Egypt.
In February 2003, it was reported
that subject, through DELTA TEXTILE, received the franchise to market the FOX
underwear brand.
In May 2003, it was reported that
subject sold a plot in London to the ARSENAL football team, for a sum of US$
5.5 million.
In November 2003, it was reported
that subject acquired full ownership in AUBURN HOSIERY MILLS, an American socks
manufacturer, for a sum of
US$ 17 million.
In December 2004, subject
acquired BURLEN CORP., an American lingerie company, for a sum of US$ 50
million.
In January 2005, it was reported
that subject will close one of its plants in Carmiel and retrench 137
employees.
In July 2005, it was reported
that subject will retrench further 500 employees.
In August 2005, it was reported
that subject intends to close its plant in Nahariya.
Also in August 2005, it was
reported that subject announced a restructuring plan, according to which it
will retrench 2,000 employees (in Israel, Canada and Honduras), in order to cut
down costs.
In December 2005, it was reported
that MAALOT, a local bonds rating company, lowered the rating for subject’s
bonds from A+ to A-.
In February 2006 Arnon Tiberg,
subject’s General Manager, retired and was replaced by Aviram Lahav.
In March 2006, it was reported
that KAL AUTO, a local leasing firm, would lease 160 vehicles to subject.
The worsening financial
performance of subject emanated mainly from the 25-30% fall in selling prices
to subject's main customer, Marks & Spencer.
During 2005 and 2006 subject went
through re-organization process, taking streamlining measures which included,
among others, the closure of the sewing plant in China, Honduras, Canada and
the dying plant in Nahariya. The later plant lies on a plot, which subject
plans to sell (estimated value of US$ 37 million).
The measures taken already gave
results and subject ended the 2nd quarter of 2006 with a net profit
of NIS 487,000.
According
to the Chairman of the Textile and Fashion division of the Industrialists’
Association, the sales of the textile industry in 2006 were expected to reach
US$ 2.165 billion, a 6% rise comparing to 2005.
The Israel Export and
International Cooperation Institute published that the
export by theTextile, Footwear and Leather industries in 2006 grew by 1% and
reached US$ 1.085 billion.
Most exports were the the North
American markets (49%).
1,500
workers were fired in the textile industry during 2005 (due to closure of 12
sewing workshops) and 1,700 more expected to be fired in 2006. There are 18,700
total employed in the textile sector.
The local
industry is also in the midst of a crisis, forcing streamlining process, the
shift of textile manufacturing to low labor cost countries. According to the
Industrialists’ Association, 12 large plants moved abroad in recent years,
while dozens plants and workshops were closed down.
SUMMARY
Good for trade engagements.
Maximum
unsecured credit recommended up to several US$ million.
RATING EXPLANATIONS
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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>86 |
Aaa |
Possesses an extremely sound financial
base with the strongest capability for timely payment of interest and
principal sums |
Unlimited |
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71-85 |
Aa |
Possesses adequate working capital. No
caution needed for credit transaction. It has above average (strong)
capability for payment of interest and principal sums |
Large |
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56-70 |
A |
Financial & operational base are
regarded healthy. General unfavourable factors will not cause fatal effect.
Satisfactory capability for payment of interest and principal sums |
Fairly Large |
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41-55 |
Ba |
Overall operation is considered normal.
Capable to meet normal commitments. |
Satisfactory |
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26-40 |
B |
Unfavourable & favourable factors
carry similar weight in credit consideration. Capability to overcome
financial difficulties seems comparatively below average/normal. |
Small |
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11-25 |
Ca |
Adverse factors are apparent. Repayment of
interest and principal sums in default or expected to be in default upon
maturity |
Limited with full security |
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<10 |
C |
Absolute credit risk exists. Caution
needed to be exercised |
Credit not recommended |
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NR |
In view of the lack of information, we
have no basis upon which to recommend credit dealings |
No Rating |
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