Eroding prices impact Delta Galil's Q4 sales result
16 Mar '06
4 min read
Operating loss in the fourth quarter of 2005 was $2.9 million, compared to an operating income of $0.4 million in the fourth quarter of 2004.
Excluding reorganization expenses, impairment of fixed assets and goodwill and capital loss from realization of assets, operating loss in 2005 reached $6.1 million, compared to an operating profit of $22.6 million in 2004.
The primary reason for the deterioration in the operating results in the fourth quarter and in 2005 compared to the same periods in 2004 is the erosion in selling prices to the Company's customers, particularly to Marks & Spencer in the UK and in the European market.
Operating cash flow in the fourth quarter of 2005 was positive $11.2 million compared to $34.3 million in the fourth quarter of 2004.
In 2005, operating cash flow was positive $11.6 million compared to $23.0 million in 2004.
"2005 was a difficult year for Delta Galil and its investors," stated Dov Lautman, Chairman and CEO.
"The changes in the business environment were greater than they expected, as evidenced by the results issued today.
They completed the closure of their production facilities in Honduras and in Canada, as outlined in the reorganization plan that the Company announced in the third quarter of 2005.
They believe that the plan will be completed during the third quarter of 2006.
In parallel with the execution of this reorganization plan, they are nearing the conclusion of a survey of their organizational structure in order to better harmonize it with the current business environment.
-Ltd..jpg?tr=w-120,h-60,c-at_max,cm-pad_resize,bg-ffffff "Thermore (Far East) Ltd.")
.jpg?tr=w-120,h-60,c-at_max,cm-pad_resize,bg-ffffff "Telangana State Industrial Infrastructure Corporation Limited (TSllC Ltd)")
.jpg?tr=w-120,h-60,c-at_max,cm-pad_resize,bg-ffffff "Taiwan Textile Federation (TTF)")
