By  on February 20, 2013

A swift swing toward branded products, helped by the July acquisition of Germany’s Schiesser, lifted Delta Galil Industries Ltd. to hefty bottom- and top-line increases for both the fourth quarter of last year and all of 2012.In the three months ended Dec. 31, the Tel Aviv-based marketer of innerwear and performance apparel registered a 65.7 percent increase in net income to $13.9 million, or 55 cents a diluted share, from $8.4 million, or 36 cents, in the prior-year period. Operating income spiked 72.5 percent to $19.7 million.

Revenues rose 39.8 percent to $246.6 million from $176.4 million while gross margin advanced to 25.8 percent of sales from 21.2 percent in the 2011 period. Schiesser contributed $51 million to quarterly sales, without which revenues would have risen 11 percent.Europe’s sales penetration rose to 40 percent in the fourth quarter, up from 26 percent in the prior-year period.Delta closed its purchase of underwear maker Schiesser, for 68 million euros, or $85 million, in July after acquiring KN Karen Neuberger from CIT for $4 million in June. It purchased LittleMissMatched, a children’s hosiery and apparel firm, for an undisclosed sum in December. Last month it signed a global license with Columbia Sportswear Co. for men’s and women’s socks under the Columbia brand. The firm continued to strengthen its branded presence through licenses with Tommy Hilfiger and Kenneth Cole, as well as the Nearly Nude shapewear brand, acquired in 2011.“We set out to grow the branded portion of the business through licensing and acquisition,” said Isaac Dabah, chief executive officer of the company. “We ended the year with about 48 percent of our business in branded products versus 15 percent just a few years ago. Schiesser helped.”He noted that the company will boast of stronger direct-to-consumer penetration in 2013 through its purchase of LittleMissMatched, which operates seven stores in the U.S. and also reaches out to its preteen female constituency through its e-commerce site.“It’s our first foray into U.S. retail, and the online component is just tremendous,” Dabah said, adding that expansion in branded business in the U.S., socks and its Israeli retail network will help it “approach” $1 billion in sales in 2013.RELATED CONTENT: Click Here for More Earnings Coverage >>Guidance for 2013 includes revenues of between $910 million and $920 million, 11.3 to 12.5 percent above 2012 levels. Operating income, earlier projected to reach between $55 million and $60 million, is now expected to be between $57 million and $62 million, 12.5 to 22.4 percent above 2012 marks.For the full year, net income more than doubled to $57 million, or $2.30 a diluted share, from $27.6 million, or $1.15. Excluding a series of nonrecurring items which in total lifted 2012 profits, income would have risen 23 percent. Sales were up 20.5 percent to $817.8 million from $678.8 million.In trading in Tel Aviv following the disclosure of financial results Wednesday, shares of Delta Galil rose 3.9 percent to 5,278 Israeli new shekels, or $14.30 at current exchange.

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