Sales up 6% at Delta Galil Industries in H1

Delta Galil increased its previous estimate for 2012 business results, to include the results of Schiesser Group starting in the third quarter of this year. The following forecast excludes the effect of any one-time items, net of tax:

• Full-year 2012 sales are estimated to range from $810 million to $820 million, which would constitute an increase of 19% to 21% compared to reported 2011 sales of approximately $679 million.
• Full-year 2012 operating income is estimated to range between $50 million and $52 million, which would constitute an increase of 26% to 31% compared to reported 2011 operating profit of approximately $40 million.
• Full-year 2012 net income is estimated to range between $33 million and $34.5 million, which would constitute an increase of 20% to 26% compared to reported 2011 net profit of approximately $27.4 million.
• Full-year 2012 diluted EPS is estimated to range between $1.37 and $1.44, which would constitute an increase of 19% to 25% compared to reported 2011 diluted EPS of $1.15 per share.

Strong Cash Flow

Delta derived positive cash flow from current operations in the second quarter of 2012 of $16.1 million, compared to $5.9 million in the same quarter last year, an increase of 174%. Cash flow from current operations in the first half of 2012 was $35.5 million, compared to $2.8 million in the same period last year.

The improved cash flow from current operations in the second quarter and first half of 2012 compared to the corresponding periods last year was due to the increase in net income, as well as a decrease in working capital in the first half of 2012, compared to an increase in working capital in the first half of 2011.

Net Financial Debt Reduced; Capital Increased

The net financial debt of Delta Galil amounted to $22.7 million at June 30, 2012, a sharp decrease from $84.0 million at June 30, 2011 and $53.8 million on December 31, 2011. The decrease in financial debt derives from the positive cash flow from current operations in the last 12 months, which amounted to $69 million.

The capital of the Group as of June 30, 2012 amounted to $237.3 million, representing 51.1% of the total balance sheet, compared to approximately $205.4 million, representing 46.9% of the total balance sheet as of June 30, 2011 and $217.2 million, or 49.0% of the total balance sheet, as of December 31, 2011. The increase in capital derives from total income for the first half of 2012, which amounted to approximately $22.3 million, less distributed dividend in the amount of $3.9 million.

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 emphasison comfort, aesthetics and quality.

Delta Galil Industries Ltd.