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8th November 2017, Tel Aviv

Delta Galil reports net income decrease

Delta Galil Industries is a manufacturer and marketer of branded and private label apparel products for men, women and children. Delta Galil Industries, a manufacturer and marketer of branded and private label apparel products for men, women and children, as well as leisurewear and activewear, has reported net income of US$ 14.4 million in the third quarter of 2017, compared to US$ 17.7 million in the same quarter of 2016, representing an 18% decrease.

Net income excluding one-time items attributable to shareholders for the third quarter of 2017 increased 12% to US$ 14.5 million, compared to US$ 13.0 million in the same quarter last year.

For the first nine months of 2017, net income attributable to shareholders was US$ 28.8 million, compared to US$ 33.3 million last year, representing a 13% decrease. Net income excluding one-time items attributable to shareholders for the first nine months of 2017 increased 7% to US$ 30.6 million, compared to US$ 28.6 million in the same period of 2016.

Sales

The company reported sales of US$ 340.3 million for the third quarter of 2017, a 15% increase from US$ 296.6 million for the third quarter of 2016. The sales increase reflected a full period of results from Delta Galil Premium Brands (DGPB), as well as strength in the Global Upper Market, Schiesser and Delta Israel, while sales of Delta USA were impacted by hurricanes.

Excluding DGPB, sales increased by 2% compared to the third quarter of 2016. For the first nine months of 2017, sales rose 24% to US$ 996.4 million, compared to US$ 802.8 million in the first nine months of 2016. Excluding DGPB, sales for the nine-month period increased by 3% compared to the first nine months of 2016.

Strong quarter

“We are very pleased with our third quarter results, which reflect our balanced and diversified mix of businesses, products and markets. We delivered a strong quarter in our global upper market, Schiesser and recently acquired, Delta Galil Premium Brands, segments,” commented Isaac Dabah, CEO of Delta Galil.

“During the quarter, we did see softer sales in the US resulting from the hurricane’s impact and port closures, as well as big launches of club programmes, which were not anniversaried from last year. However, we remained focused on centralising and consolidating several manufacturing capabilities and store locations to promote greater efficiency, teamwork and more agile decision-making.”

“And we expect to begin benefiting from these efforts, as well as expansion into Asian and Latin American markets, and initiatives to enhance the performance of Delta Galil Premium Brands beginning in 2018 and beyond.”

Operating profit

Operating profit for the third quarter of 2017 was US$ 24.2 million, compared to US$ 24.6 million in the third quarter of 2016, representing a 2% decrease. Operating profit before one-time items for the third quarter increased 8% to US$ 24.3 million, from US$ 22.5 million for the comparable period last year.

For the first nine months of 2017, operating profit before one-time items was US$ 54.9 million, an 8% increase from US$ 50.9 million a year earlier. Operating profit in the first nine months was US$ 52.1 million, down 2% from US$ 53.0 million in the same period of 2016.

Financial guidance

“Looking ahead, we will continue to grow organically, with a focus on our international and ecommerce businesses, while we will also continue to pursue the right strategic acquisition opportunities. We currently have a strong balance sheet, and we remain committed to investing in new products and resources to drive sustained profitable growth and long-term shareholder value,” said Mr Dabah.

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 of US$ 1,179 million. Full-year 2017 EBIT is expected to range between US$ 86 million-US$ 91 million, representing an increase of 3%-9% from 2016 actual EBIT of US$ 83.2 million. Full-year 2017 EBITDA is expected to range between US$ 113.0 million-US$ 118.0 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.

www.deltagalil.com

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