Delta Galil Industries Ltd. (Nasdaq: DELT), the global provider of private label intimate apparel, men's underwear, socks, baby wear and leisurewear, today reported that its first quarter revenues gained 23.8 percent to $94.3 million compared with $76.2 million for the first quarter of 1999.

Delta's first quarter operating profit climbed 38.5 percent to $8.2 million from $5.9 million. Profit before taxes rose 22.3 percent to $6.8 million from $5.5 million last year.

Net profit rose 19.5 percent to $5.5 million, while earnings per share were $0.31, down a penny from the first quarter of last year due to the larger number of shares outstanding from the Company's initial public offering in March of 1999. Delta Galil Chairman Dov Lautman said the Company will pay a quarterly dividend of $1.7 million or $0.10 per share to holders of record on May 17, 2000, continuing the practice of quarterly dividends.

Mr. Lautman said of the strong first quarter results: "Our numbers quarter on quarter continue to exceed expectations and set new records. We are once again pleased to let our shareholders know that we are successfully achieving our strategic objectives and working hard to maintain our momentum."

Except for EPS, Delta's numbers for the first quarter were all on the upside. Sales of seam-free garments reached $8.8 million against $2.3 million last year. Ladies intimates was again the fastest growing product line, accounting for 40 percent of total first quarter sales compared with 34 percent in first quarter 1999.

The gross profit gained 20.5 percent to $21.1 million compared with $17.5 million for the first quarter of 1999. Arnon Tiberg, Delta's President and CEO said the growth in gross profit was due to increased sales of higher-margin ladies intimates, enhanced production efficiencies, and the Company's strategy of shifting production to low-labor-cost countries. Low-labor-cost production accounted for 41 percent of first quarter sales as compared with 30 percent in the first quarter of last year.

The Company's North American sales gained 41 percent to $ 22.5 million, accounting for 24 percent of total sales as compared with 21.0 percent in the first quarter of 1999.

The first quarter sales of Dominion Hosiery Inc., the Canadian sock manufacturer that Delta acquired in January, came to $2.9 million, or 3.1 percent of total sales. The strategy behind the acquisition was to accelerate the penetration of Delta's sock category in the North American market. Dominion's customers include GAP, The Limited, J.C. Penney, Kohl's and Talbot's in the US, and Winners, Wal-Mart, Sears, Moores, Dylex and Northern Elements in Canada. Dominion also is licensed to market under the Jones New York label.

"The policy has contributed to Delta's consistently strong growth, especially with top customers such as Victoria's Secret and Calvin Klein," he noted. "In addition, our focus on higher-margin ladies intimates and seam free apparel steadily enlarges our bottom line numbers."

Delta's capital expenditures during the first quarter more than doubled, reaching $13.3 million versus $6.4 million during the first quarter of last year. Mr. Tiberg said a substantial portion of the invested funds went into purchases of seam-free machines, which add to the Company's capacity to produce ladies intimates.

UK chain Marks & Spencer, Delta's largest single customer, accounted for roughly 46 percent of total sales for the first quarter. Sales to the chain increased 18 percent to $43.0 million compared with sales of $36.5 million for the first quarter of 1999.

Management will conduct a teleconference today at 10:00 a.m. Eastern Time. To participate, please dial: from the US: 719-457-2637, from Israel: 03-925-5910 several minutes prior to start.

Delta Galil is a leading global manufacturer of boutique-quality apparel for the mass market sold under brands such as Ralph Lauren, Donna Karan, Calvin Klein, Hugo Boss and Nike and sold worldwide through leading retailers including Marks & Spencer, Victoria's Secret, GAP, Banana Republic, and others. Recognized for product innovation and development, Delta is committed to growth through higher margin products, expanding market share and operational efficiencies. For more information, please visit Delta's website at

(This press release contains forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. Such statements are based on the current expectations of the management of DELTA Galil Industries Ltd. (the Company) only, and are subject to a number of risk factors and uncertainties, including but not limited to changes in technology and market requirements, decline in demand for the company's products, inability to timely develop and introduce new technologies, products and applications, loss of market share, pressure on pricing resulting from competition, inability to maintain certain marketing and distribution arrangements, which could cause the actual results or performance of the company to differ materially from those described therein. For a more detailed description of the risk factors and uncertainties affecting the company, refer to the Company's reports filed from time to time with the Securities and Exchange Commission.)

(An Israeli corporation)

December 31 March 31
1999 2000 1999
In thousands U.S. $ (except per share data)

Revenues 355,237 94,309 76,192
Cost of revenues 273,277 73,226 58,689
Gross profit 81,960 21,083 17,503
Selling & MAP expenses 35,653 9,606 8,505
General & administrative
expenses 12,033 3,274 3,075
Operating profit 34,274 8,203 5,923
Financial expenses - net 2,007 1,545 635
Other income - net 1,671 101 237
Income before taxes on income 33,938 6,759 5,525
Taxes on income 9,387 1,286 1,086
Income after taxes on income 24,551 5,473 4,439
Share in profits of investee
company - net 480 150 220
Minority interest in profits
of subsidiaries - net (968) (113) (48)
Net income 24,063 5,510 4,611
Earnings per share 1.41 0.31 0.32
Average number of shares 17,043 17,780 14,536

(An Israeli corporation)

December 31 March 31
1999 2000 1999
In thousands U.S. $

Cash and cash equivalents $4,977 $3,575 $1,844
Accounts receivable:
Trade 53,723 52,983 45,084
Other 15,819 19,030 15,675
Inventories 80,967 92,028 64,431

Total current assets 155,486 167,616 127,034


Associated company and
other investments 5,773 6,333 5,513
Long-term receivables, net of
current maturities 1,421 413 4,561
7,194 6,746 10,074

Net of accumulated depreciation 95,699 105,518 79,446

Net of amortization 3,008 6,322 1,776

Total assets $261,387 $286,202 $218,330

December 31 March 31
1999 2000 1999
In thousands U.S. $

Liabilities and shareholders' equity
Short-term bank credit and
current maturities of
long-term loans and
other liabilities $21,316 $39,604 $21,231
Current maturities of debentures 1,390 1,373 1,387
Accounts payable and accruals:
Trade 51,974 47,143 34,359
Other 25,533 28,342 21,194
Dividend declared 2,343 1,694 1,447

Total current liabilities 102,556 118,156 79,618

Deferred income taxes 9,483 9,281 8,102
Liability for employee rights
upon retirement, net of
amount funded 1,235 1,245 1,089
Loans and other liabilities,
net of current Maturities:
Bank loans and other liabilities 3,270 9,528 2,185
Debentures 2,086 1,373 2,776

Total long-term liabilities 16,074 21,427 14,152

Total liabilities 118,630 139,583 93,770

MINORITY INTERESTS 3,017 3,130 2,095
SHAREHOLDERS' EQUITY: 139,740 143,489 122,465

Total liabilities and
shareholders' equity $261,387 $286,202 $218,330