Delta Galil Industries Ltd. is taking advantage of a hot IPO market in the U.S., confidentially filing an F-1 form with the Securities and Exchange Commission (SEC) to prepare its return to the public market.
The global manufacturer and distributor of branded and private label apparel products for men, women and children already is a public company in its home country of Israel, going public on the Tel Aviv Stock Exchange (TASE) under the symbol “DELT” in March this year. With the U.S. application, Delta Galil plans to list on the Nasdaq under the ticker “DLTG.”
The apparel firm previously traded on the Nasdaq through 2008, but was delisted in March that year.
Delta Galil hasn’t determined the number of ordinary shares it will offer, or the price for the proposed offering, which is expected to commence after the SEC completes its review process, subject to market and other conditions.
Bloomberg previously reported earlier this month that the company, which owns brands such as 7 for All Mankind, Splendid and Bare Necessities, is seeking a market capitalization of approximately $2 billion. This would value Delta Galil well above its current $1.3 billion total on the TASE. The report said the apparel licensor was working with Bank of America on the listing.
Despite tough global supply chain headwinds that have dominated 2021, the manufacturer raised its 2021 guidance in August, now expecting full-year sales to range between $1.83 billion and $1.88 billion, and anticipating net income to end up between $96 million and $104 million.
The estimates came in after a bounce back in the second quarter, when sales jumped 68 percent to $455.8 million. Excluding the sales of Bare Necessities, which was acquired in October 2020, sales still increased by 56 percent on a year-over-year basis. Net income for the quarter was $27.3 million, compared to a net loss of $53.3 million for the second quarter of 2020.
The brand manufacturer said that it generated its third-straight quarter of record gross margins, with the most recent period ending June 30 yielding Delta Galil’s highest-ever gross margin of 41.1 percent. This is even more notable given the increase in raw material and logistics expenses reported in the period. As of June 30, the firm has a cash balance of $280.8 million, and slashed its debt year over year from $306.6 million to $124.6 million.
Founded in 1975, Delta Galil makes and licenses products sold under major brands including Calvin Klein, Columbia, Spalding, Tommy Hilfiger and Wilson, among others. The company produces branded apparel across categories, including underwear, jeans, intimates, sportswear, activewear and socks.
At its second quarter investor presentation, Delta Galil revealed it had reshuffled its business segments to better align with consumer trends. The company now operates five segments: owned and licensed intimate apparel and activewear brands; private label brands; 7 for All Mankind; flagship underwear and activewear brand Delta Israel; and an online segment for the e-commerce sites of Bare Necessities and Brayola.
In June, Delta Galil got a big win in inking a global licensing deal with Adidas. Under the partnership, Delta will design, manufacture and distribute men’s and women’s underwear collections under Adidas’ Badge of Sport and Originals labels. That month, the company also signed a licensing agreement with Austrian label Wolford, a seller of tights, lingerie and swimwear. These categories will launch next spring in Wolford’s owned boutiques, as well as an array of global department stores including Neiman Marcus, Harvey Nichols, and Galeria Karstadt Kaufhof, as well as on popular e-commerce platforms such as Mytheresa, MatchesFashion, Net-A-Porter and Farfetch.
Despite this being the second time Delta Galil will be available on a public market, the apparel company is still a relative newcomer when it comes to operating U.S.-based brands. The manufacturer’s first two plays in the American market came in 2001 when it acquired two American underwear brands, Inner Secrets and Wundies. By 2004, these two companies merged to form Delta Galil USA.