Delta Galil Reports Record 2016 Results

Operating Profit Increased 24% to All-Time Record of $85.3
Million, on Sales of $1,179.2 Million;
Operating Cash
Flow Increased to $76.6 Million

Sales in the 4^th Quarter
Increased 31% to $376.3 Million
Operating Profit in
the 4^th Quarter Increased 80% to
$32.3 Million

Initial 2017 Earnings Guidance:
Sales Expected
to Reach $1,330 Million-$1,370 Million, and
Full-Year
EPS Expected to Reach $1.95-$2.02

2016 Fourth Quarter Highlights

• Sales grew 31% to $376.3 million in the fourth quarter of 2016, from
  $287.1 million in the 2015 fourth quarter.
• Operating profit increased 80% to $32.3 million in the fourth quarter
  of 2016, compared to $17.9 million in the fourth quarter of 2015.
• Operating profit before one-time items increased 36% in the fourth
  quarter of 2016 and amounted to $32.3 million, compared to $23.7
  million in the fourth quarter of 2015.
• EBITDA in the fourth quarter of 2016 increased 33% to $39.2 million,
  from $29.5 million in the fourth quarter of 2015.
• Diluted earnings per share increased 52% and amounted to $0.73 in the
  2016 fourth quarter, compared to $0.48 in the fourth quarter of 2015.
• A strong balance sheet post-acquisition, highlighted by $390.6 million
  in equity as of December 31, 2016, and $81.9 million in cash and cash
  equivalents.
• Operating cash flow totaled $76.6 million for the 2016 full year,
  compared to $70.5 million last year.
• The Board of Directors declared a dividend of $3.5 million, or $0.139
  per share, to be distributed on March 14^th 2017. The
  determining and “ex-dividend” date will be March 2^nd 2017.
• Isaac Dabah, CEO of Delta Galil, stated: “We are very pleased with our
  results for 2016, which concluded with a particularly strong fourth
  quarter and reflected all-time high sales, operating profit and cash
  flow. Our diverse blend of business segments, product categories and
  an expanded global presence, along with our strategic efforts to grow
  in areas such as branded products, continue to drive both growth
  momentum and balance. We remain committed to investing in new products
  and resources to drive sustained profitable growth and long-term
  shareholder value, and are focused on attaining overall double digit
  EBITDA growth in 2017 and beyond.”

TEL AVIV, Israel–(BUSINESS WIRE)–Delta Galil Industries, Ltd. (DELT/Tel Aviv Stock Exchange,
DELTY.PK/OTCQX), the global manufacturer and marketer of branded and
private label apparel products for men, women and children, as well as
leisurewear, jeans and activewear, today reported its financial results
for the fourth quarter and full year ended December 31, 2016.

Sales

The Company reported sales of $376.3 million for the fourth quarter of
2016, a 31% increase compared to $287.1 million for the same quarter
last year. Sales for the 2016 full year were $1,179.2 million, a 9%
increase from $1,080.0 million for the 2015 full year. The
year-over-year increase reflected top-line growth in all key geographic
regions, as well as the positive impact of Delta Galil’s diversified
portfolio. This includes a significant increase in its branded activity,
new businesses with strong global reach, and expansion of its retail
activity in Israel and Germany.

Operating profit

Operating profit increased 80% to $32.3 million in the fourth quarter of
2016, compared to $17.9 million in the fourth quarter last year. For the
2016 full year, operating profit grew 23% to $85.3 million, compared to
$69.0 for the 2015 full year.

Operating profit excluding one-time items increased 36% in the fourth
quarter of 2016, and amounted to $32.3 million, compared to $23.7
million last year. For the 2016 full year, operating profit excluding
one-time items amounted to $83.2 million, compared to $75.5 million last
year, representing a 10% increase.

Net income

Net income increased 51% to $18.5 million in the fourth quarter of 2016,
compared to $12.3 million in the same quarter last year. Net income
excluding one-time items totaled $18.5 million, compared to $16.0
million for the same period last year, representing a 16% increase.
Diluted earnings per share increased 52% in the 2016 fourth quarter to
$0.73, compared to $0.48 for the same quarter last year. For the 2016
full year, net income was $51.9 million, or $2.03 per diluted share,
compared to $43.8 million or $1.71 per diluted share for the same period
of 2015, representing a 18% increase.

Management Comment

Isaac Dabah, CEO of Delta Galil, stated: “We are very pleased with our
results for 2016, which concluded with a particularly strong fourth
quarter and reflected all-time high sales, operating profit and cash
flow. Throughout the year, we remained focused on a number of
operational and growth initiatives that improved our business segments
and helped make us a more efficient company. Further, our diverse blend
of business segments, product categories and an expanded global presence
continue to drive both growth momentum and balance.

“During the year, we made the successful acquisition of 7 For All Mankind®,
Splendid® and Ella Moss®, reflecting our strategic
efforts to grow Delta Galil’s branded business and expand our global
footprint. These brands further diversify our product offering and
distribution channels, while adding significant strength to our
structure.

“We’ve upgraded our digital platform and increased our ecommerce market
share by selling to wholesale customers such as Amazon, Zalando, and
Otto, while elevating sales on our proprietary Schiesser and Delta
Israel websites. We also launched a new advanced digital platform for
the 7 For All Mankind, Splendid and Ella Moss brands.

“Looking ahead, we remain committed to investing in new products and
resources to drive sustained profitable growth and long-term shareholder
value and, with a strong balance sheet and cash position, we have the
necessary financial resources to continue to invest, innovate and grow.

“We are very proud of Delta’s achievements in the past year, and would
like to express our gratitude to our associates and customers for their
cooperation and support. Hopefully, this collaboration will lead Delta
to significant achievements in the future.”

EBITDA, Cash Flow, Net Debt, Equity and Dividend

EBITDA was $39.2 million, or 10.4% of sales in the fourth quarter of
2016, compared to $29.5 million, or 10.3% of sales in the same quarter
last year. For the 2016 full year, EBITDA was $107.0 million, or 9.1% of
sales, compared to $95.3 million, or 8.8% of sales last year.

Operating cash flow was $61.1 million in the fourth quarter of 2016,
compared with $60.3 million in the fourth quarter of 2015. For the 2016
full year, operating cash flow was $76.6 million, compared to $70.5
million last year.

Net financial debt as of December 31, 2016 was $181.2 million, compared
to $223.8 million as of September 30, 2016, and $74.5 million as of
December 31, 2015. The increase in net finance debt derives mainly from
the Premium Brands activity acquisition, offset by the positive
cash-flow generated in the fourth quarter.

Equity on December 31, 2016 was $390.6 million, up from $357.5 million a
year earlier.

Delta Galil declared a dividend of $3.5 million, or $0.139 per share, to
be distributed on March 14^th 2017. The determining and
“ex-dividend” date will be March 2^nd 2017.

2017 Financial Guidance

Delta Galil provided its 2017 financial guidance, excluding
non-recurring items which is based on current market conditions and
current exchange rate of $1.06 per euro and 3.8 NIS per US$.

• Full-year 2017 sales are expected to range between $1,330
  million-$1,370 million, representing an increase of 13%-16% from 2016
  actual sales of $1,179 million.
• Full-year 2017 EBIT is expected to range between $86 million-$91
  million, representing an increase of 3%-9% from 2016 actual EBIT of
  $83.2 million.
• Full-year 2017 EBITDA is expected to range between $113.0
  million-$118.0 million, representing an increase of 6%-10% from 2016
  actual EBITDA of $107.0 million.
• Full-year 2017 net income is expected to range between $50.0
  million-$52.0 million, representing an increase of 6%-10% from 2016
  actual net income of $47.2 million.
• Full-year 2017 diluted EPS is expected to range between $1.95-$2.02,
  representing an increase of 5%-9% from 2016 actual EPS of $1.85.

About Delta Galil Industries

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. For more information,
visit www.deltagalil.com.

Safe Harbor Statement

Matters discussed in this press release contain forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995. When used in this press release, the words
“anticipate,” “believe,” “estimate,” “may,” “intend,” “expect” and
similar expressions identify such forward-looking statements. Actual
results, performance or achievements could differ materially from those
contemplated, expressed or implied by the forward-looking statements
contained herein, and while expected, there is no guarantee that we will
attain the aforementioned anticipated developmental milestones. These
forward-looking statements are based largely on the expectations of the
Company and are subject to a number of risks and uncertainties. These
include, but are not limited to, risks and uncertainties associated
with: the impact of economic, competitive and other factors affecting
the Company and its operations, markets, product, and distributor
performance, the impact on the national and local economies resulting
from terrorist actions, and U.S. actions subsequently; and other factors
detailed in reports filed by the Company.

The enclosed notes constitute an integral part of these Financial
Statements

Contacts

Delta Galil Industries Ltd.
Nissim Douek, +972-54-5201178
Nissim@unik.co.il
or
U.S.
Media:
Berns Communications Group
Stacy Berns/Melissa
Jaffin
+1-212-994-4660
sberns@bcg-pr.com