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17th May 2017, Tel Aviv

Delta Galil records net income decline in Q1 2017

Delta Galil Industries is a leading manufacturer and marketer of branded and private label apparel products for men, women and children. Delta Galil Industries, a leading manufacturer and marketer of branded and private label apparel products for men, women and children, has reported net income of US$ 5.6 million in the first quarter of 2017, compared to US$ 7.9 million in the first quarter last year, representing a 29% decrease.

The company reported net income excluding one-time items of US$ 7.2 million for the 2017 first quarter, representing an 8% decrease from US$ 7.9 million in the first quarter last year. Sales were US$ 315.7 million for the first quarter of 2017, a 23% increase compared to US$ 256.7 million for the same quarter last year. The increase was primarily driven by the addition of Delta Premium Brands.

Operating profit excluding one-time items amounted to US$ 12.9 million for the first quarter of 2017, compared to US$ 14.8 million for the first quarter last year, a 13% decrease. Operating profit was US$ 10.2 million for the first quarter of 2017, versus US$ 14.8 million in the same period last year, representing a 31% decrease. EBITDA was US$ 19.1 million, or 6% of sales in the first quarter of 2017, compared to US$ 20.2 million, or 7.9% of sales in the same quarter last year.

Ongoing strategy

“We are pleased with the continued strength of our diversified business model. Our first quarter results were in line with our plan, and consistent with Delta’s historical performance of generating higher profits in the second half of the year,” commented Isaac Dabah, CEO of Delta Galil.

“During the quarter, we made meaningful changes in our company that will improve our efficiency and production capacity. We started to run our Vietnamese factory with 750 new employees, and are on track to have our first orders shipped in April 2017. We expect the facility to reach full operational status in 2018.”

“Also during the quarter, we signed a licensing deal with Calvin Klein Inc. to develop, produce and distribute boys’ and girls’ underwear, sleepwear and socks for the brand. This represented an important step in our ongoing strategy of enhancing our branded portfolio and broadening our presence in the premium sector.”

2017 financial guidance

Delta Galil reaffirmed its 2017 financial guidance, excluding non-recurring items. Full-year 2017 sales are expected to range between US$ 1,330 million-US$ 1,370 million, representing an increase of 13%-16% from 2016 actual sales. Full-year 2017 EBIT is expected to range between US$ 86 million-US$ 91 million. Full-year 2017 EBITDA is expected to range between US$ 113.0 million-US$ 118.0 million, representing an increase of 6%-10% from 2016 actual EBITDA of US$ 107.0 million.

Full-year 2017 net income is expected to range between US$ 50.0 million-US$ 52.0 million, representing an increase of 6%-10% from 2016 actual net income of US$ 47.2 million.

“We continue to have a strong balance sheet to support our acquisition strategy, and we remain focused on growing our global business segment, while attaining strong EBITDA growth in 2017 and beyond,” said Isaac Dabah.

www.deltagalil.com

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