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16th August 2016, Tel Aviv

Delta Galil poised for long term profitable growth

Delta Galil Industries, Ltd. the global manufacturer and marketer of branded and private label apparel products, leisurewear and active wear, today reported its financial results for the second quarter ended June 30, 2016.

The company reported sales of $249.5 million for the second quarter of 2016, compared to $255.5 million for the same quarter last year, reflecting softer topline performance in the U.S market, offset by stronger sales in regions such as Europe and Israel. Sales for the first six months of 2016 were $506.2 million, versus $508.4 million in the same period of 2015.

(c) Delta Galil Industries.Operating income for the second quarter of 2016 was $13.5 million, down 7% from $14.5 million in the second quarter of 2015. For the first six months of 2016, operating income was $28.4 million, down 5% from $29.8 million a year earlier. The decrease in operating income was mainly due to higher depreciation expenses derived from investments for future growth.

Net income attributable to shareholders was $7.8 million in the second quarter of 2016, compared to $9.3 million in the same quarter of 2015, representing a 16% decrease. Diluted earnings per share attributed to shareholders were $0.30 for the 2016 second quarter, compared to $0.36 for the same quarter last year.

For the first six months of 2016, net income attributable to shareholders was $15.6 million, or $0.61 per diluted share, compared to $18.2 million or $0.71 per diluted share for the same period of 2015. The decrease for the second quarter and the first half of 2016 derives mainly from higher depreciation expenses and an increase in tax on income expenses compared to the same periods a year ago.

Isaac Dabah, CEO of Delta Galil, stated: “While we experienced a challenging U.S. retail environment in the second quarter, which is expected to continue into the third quarter, this was partially offset by improvements in all of our other business segments and regions, reflecting the strength of our diversified business model. Through our balanced blend of branded and private label products, an expanding global presence, and a range of market segments, we are positioned for long-term profitable growth.”

“As part of our growth strategy, we announced during the quarter the acquisition of contemporary premium brands, including the businesses and brands of 7 For All Mankind, Splendid and Ella Moss from VF Corporation. We are now working to maximize the benefits these brands bring to Delta, as they further diversify our product offering and distribution channels, while adding significant strength to our structure.”

“We are on track to launch our new factories in Vietnam, with Seamfree and Cut & Sew factories opening in the fourth quarter of 2016, and our Socks factory in the first quarter of 2017, which will contribute to our growth in 2017 and 2018. With a strong balance sheet to support our long-term growth and acquisition strategy, we are focused on growing our e-commerce business, and are working to attain double digit EBIT growth in 2017 and 2018.”

Delta Galil Industries is a global manufacturer and marketer of branded and private label apparel products for men, women and children. Since its inception in 1975, the company has continually strived to create products that follow a body-before-fabric philosophy, placing equal emphasis on comfort, aesthetics and quality. Delta Galil develops innovative seamless apparel including bras, shapewear and socks; intimate apparel for women; extensive lines of underwear for men; babywear, activewear, sleepwear, and leisurewear.

www.deltagalil.com

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