Record Fourth Quarter Sales Increased 18% Driven by Growth Across All Segments and Channels

Record Fourth Quarter Gross Profit Expanded 14% to $250.1 Million

Fourth Quarter EBIT Before Non-Core Items Increased 15% to $64.7 Million

Fourth Quarter Net Profit Before Non-Core Items Increased 8% to $41.0 Million

Strong Balance Sheet with Record Equity of $803.6 Million and
Net Debt to EBITDA, Excluding IFRS 16, of 0.6x

Record Dividend for the Full Year of $33 Million Dividend declared of $10 Million for the Fourth Quarter 2024

CAESAREA, Israel, February 11, 2025--(BUSINESS WIRE)--Delta Galil Industries, Ltd. (DELG/Tel Aviv Stock Exchange), the global designer, manufacturer and marketer of branded and private label intimate, activewear, loungewear and denim apparel for ladies, men, and children, today reported financial results for the fourth quarter and year ended December 31, 2024.

Fourth quarter sales increased 18% to $599.2 million, driven by growth in all segments, channels and geographics Full year sales increased 10% to a record $2,045.7 million Fourth quarter and full year online sales of the Company’s brands increased 22% and 21%, respectively Full year gross margin improved 100 basis points for an annual record of 41.9% Fourth quarter EBIT before non-core items increased 15% and reached $64.7 million, compared to $56.2 million, for the fourth quarter last year Full year EBIT before non-core items was $184.1 million, or 9.0% of sales compared to $153.0 million, or 8.2% of sales, last year Net Debt to EBITDA, excluding IFRS 16, was 0.6x for the year ended December 31, 2024, compared to 0.7x last year Strong Balance sheet with $121.8 million in cash and record shareholders’ equity of $803.6 million at December 31, 2024 Declares a $10 million dividend for the fourth quarter 2024, compared to $9 million for the fourth quarter last year

Isaac Dabah, CEO of Delta Galil, stated, "Delta’s strong fourth quarter financial results produced a record year of sales and robust profitability, reflecting our team’s resilience, creativity, and dedication inachieving excellent results. For the full year, I am proud to report that we exceeded our 2024 sales and EBITDA guidance, as we grew sales by 10% to over $2.0 billion, produced a record gross margin of 41.9% and expanded net income by 18% to $109 million. This performance generated strong operating cash flow excluding IFRS 16 of $153 million for the full year 2024. Strong profitability and operating cash flow also allowed us to return a record $33 million of dividends back to our shareholders, a 24% increase over the prior year."

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Mr. Dabah added, "We expect continued growth in sales and profitability in 2025. Our positive outlook demonstrates the success of the multi-year growth strategies we are pursuing with our strategic partners, as well with our brands, the investments we have made to enhance profitability and drive efficiencies in our factories, and the actions we have taken to improve our balance sheet. Looking ahead, our near-term priorities include increasing sales and profitability with our global licenses and new brands, implementing further realignment plans to improve the efficiency and profitability of our factories, and developing new categories with our main customers. We believe this positive momentum will support our business in 2025, as we look to increase sales, expand margins, and enhance our position as a leader in the global intimates and activewear market."

Sales

The Company reported record fourth quarter 2024 sales of $599.2 million, an 18% increase from $508.6 million in the fourth quarter of 2023.

Sales for the 2024 full year were $2,045.7 million, a 10% increase from $1,857.7 million in the prior-year period.

Gross Margin Gross profit in the fourth quarter amounted to $250.1 million compared to $219.1 million in Q4 2023.

Gross profit in 2024 amounted to $856.3 million compared to $760.6 million in 2023.

Gross margin in the fourth quarter of 2024 was 41.7% compared to 43.1% for the same period last year. The year-over-year reduction in the fourth quarter gross margin was due primarily to higher freight costs, lower tax rebates in our Egyptian operations and segment mix.

Gross margin for the 2024 full year increased by 100-basis points to a record 41.9%, compared to 40.9% in the prior-year period. The year-over-year gross margin increase was due primarily to higher volume production in the Company’s factories due to an increase in Private Label segment sales, and an increase in more profitable DTC sales, partially offset by higher freight costs.

EBIT

EBIT before non-core items in the fourth quarter of 2024 was $64.7 million, or 10.8% of sales, compared to $56.2 million, or 11.0% of sales, in the same period last year.

EBIT in the fourth quarter of 2024 was $53.1 million, compared to $56.2 million, in the fourth quarter last year.

EBIT before non-core items in the full year 2024 was $184.1 million, or 9.0% of sales, compared to $153.0 million, or 8.2% of sales, in the full year 2023.

EBIT in the full year 2024 was $169.2 million, compared to $144.9 million in 2023.

The year-over-year increase in annual EBIT was due to higher sales and improved gross margin.

Non-Core Items

For the fourth quarter of 2024, the Company recorded non-core expenses associated with realignment plans of $6.2 million and expenses related to impairment of non-financial assets of $5.3 million. The Company recorded no non-core items in the fourth quarter of 2023.

In 2024, expenses associated with realignment plans were $9.6 million and expenses related to impairment of non-financial assets were $5.3 million, compared to $11.4 million of expenses related to realignment plans, a $4.0 benefit from the change in the fair value of an earn-out liability, and $0.7 million of deal costs in 2023.

Net Income

Net income excluding non-core items, net of tax in the fourth quarter of 2024, increased 8% to $41.0 million, compared to $37.8 million in the fourth quarter of 2023.

Net income in the fourth quarter of 2024 was $29.5 million, compared to $37.8 million in the same period last year.

Net income excluding non-core items, net of tax, in the full year 2024 increased 18% to $108.5 million, compared to $91.6 million in 2023.

Net income in the full year 2024 increased 11% to $94.6 million, compared to $85.3 million in 2023.

Diluted Earnings Per Share

Diluted earnings per share, excluding non-core items, net of tax, increased 9% to $1.43 in the fourth quarter of 2024 compared to $1.31 in the fourth quarter of 2023.

Diluted earnings per share in the fourth quarter of 2024 were $1.00, compared to $1.31 in the fourth quarter last year.

Diluted earnings per share, excluding non-core items, net of tax, increased 18% to $3.82 in the full year 2024 compared to $3.25 in the same period of 2023.

Diluted earnings per share in full year 2024 were $3.29 compared to $3.02 in 2023.

EBITDA, Cash Flow, Net Debt, Equity, and Dividend

EBITDA, excluding IFRS 16, in the fourth quarter of 2024 increased 15% to $72.4 million, compared to $62.9 million in the fourth quarter of 2023. In the full year 2024, EBITDA, excluding IFRS 16, increased 19% to $217.1 million, compared to $182.6 million in the full year 2023.

Cash flow generated from operating activities, excluding IFRS 16, was $64.3 million, compared to $82.3 million in the fourth quarter of 2023. Cash flow generated from operating activities, excluding IFRS 16, was $153.1 million in the full year 2024, compared to $181.9 million in the full year 2023. The year-over-year reduction in full-year operating cash flow was primarily attributable to changes in working capital, mainly inventory, to support expected sales growth and new product launches, compared to a deliberate decrease in inventory last year, which resulted from a slowdown in the acquisition of new inventory and the sale of inventory from previous seasons.

Net financial debt, excluding IFRS 16, at December 31, 2024, remained at a similar level at $126.5 million, compared to $123.4 million at December 31, 2023.

Equity on December 31, 2024, was a record of $803.6 million, up 5% from $768.4 million on December 31, 2023.

Delta Galil declared a dividend of $10 million, or $0.384 per share, which will be distributed on February 26, 2025, with a record and "ex-dividend" date of February 19, 2025.

2025 Financial Guidance

2024
Results
(in millions, except
per share amount)  Full Year 2025
Guidance
(in millions, except
per share amount)  Increase in
2025 vs 2024  Sales $2,045.7  $2,118 – 2,165  4%-6% EBIT $184.1  $192 – 200  4%-9% EBITDA $279.9  $293 – 301  5%-8% Net income $108.5  $112 – 118  4%-9% Diluted EPS ($) $3.82  $3.92 – 4.15  3%-9%

The Company’s guidance excludes non-core items, includes IFRS 16, and is based on 1.05 US $ per 1 Euro and 3.60 NIS per 1 US $.

These forward-looking statements are based largely on the expectations of the Company and are subject to uncertainties including macroeconomic trends. Actual results may differ materially from those included in the guidance as a result of risks and uncertainties which cannot be fully predicted. There is no certainty that the aforementioned conditions will occur, and actual results may be significantly different from those forecasted or implied above.

Constant Currency - Excluding the Impact of Foreign Currency This release refers to "reported" amounts in accordance with IFRS accounting principles ("GAAP"), which include translation and transactional impacts from foreign currency exchange rates. The release also refers to "constant dollar" amounts, which exclude the impact of translating foreign currencies into U.S. dollars, and are considered a non-GAAP financial measure. These constant currency performance measures should be viewed in addition to, and not in lieu of, or superior to, Delta Galil’s operating performance measures calculated in accordance with GAAP.

About Delta Galil Industries Delta Galil Industries is a global designer, manufacturer and marketer of branded and private label apparel products for men, women and children. Since its inception in 1975, the Company has continually endeavored 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; underwear for men including under its owned brands Schiesser, Eminence, Organic Basics, and Athena; babywear, activewear, sleepwear, and loungewear including under its owned P.J. Salvage and Delta brands. Delta Galil also designs, develops markets and sells branded denim and apparel under the brand 7 For All Mankind®, and ladies’ and kids’ apparel under the brand Splendid®. In addition, it sells its products under brand names licensed to the company, including adidas, Wolford, Wilson, Columbia, Tommy Hilfiger, Polo Ralph Lauren and others. 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, tax rates in the various countries the company operates in, 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.

DELTA GALIL INDUSTRIES LTD.

Concise Consolidated Balance Sheets

As of December 31, 2024  December 31 2024    2023  (Audited) Thousands of Dollars   Assets  Current assets:  Cash and cash equivalents  120,509    174,463  Restricted Cash  1,305    2,950  Trade receivables  271,873    241,216  Taxes on income receivable  1,927    77  Others  56,998    48,920  Financial derivative  160    228  Inventory  400,533    361,416  Asset held for sale  1,773    1,773  Total current assets  855,078    831,043   Non-current assets:  Investments in associated companies accounted using the equity method and long-term receivables  12,824    14,897  Investment property  2,401    2,679  Fixed assets, net of accumulated depreciation  288,346    250,343  Goodwill  138,033    145,577  Intangible assets, net of accumulated amortization  294,899    277,952  Assets in respect of usage rights  257,629    237,177  Deferred tax assets  30,537    28,016  Financial derivative  511    903  Total non-current assets  1,025,180    957,544  Total assets  1,880,258    1,788,587

DELTA GALIL INDUSTRIES LTD.

Concise Consolidated Balance Sheets

As of December 31, 2024  December 31 2024    2023  (Audited) Thousands of Dollars  Liabilities and Equity  Current liabilities:  Short-term bank loans  2,335    822  Current maturities of bank loans  20,939    24,105  Current maturities of bonds  29,476    29,597  Financial derivative  1,314    1,380  Current maturities of leases liabilities  53,663    52,583  Trade payables  237,371    168,637  Taxes on income payable  23,805    35,182  Provision for realignment plan  8,142    3,574  Others accounts payable  194,900    165,791  Total current liabilities  571,945    481,671   Non-current liabilities:  Bank loans  124,163    140,790  Severance pay liabilities, net  5,810    5,327  Liabilities in respect of leases  225,802    204,746  Other non-current liabilities  49,105    53,241  Bonds  64,712    96,496  Deferred taxes liabilities  33,394    35,812  Financial derivative  1,765    2,122  Total non-current liabilities  504,751    538,534  Total liabilities  1,076,696    1,020,205   Equity:  Equity attributable to equity holders of the parent company:  Share capital  23,714    23,714  Share premium  124,025    127,861  Other capital reserves  15,590    28,133  Retained earning  625,912    571,846  Treasury shares  (9,832 )   (13,668 ) 779,409    737,886  Minority interests  24,153    30,496  Total equity  803,562    768,382  Total liabilities and equity  1,880,258    1,788,587

DELTA GALIL INDUSTRIES LTD.

Consolidated Statement of Comprehensive Income

For the year and three month periods ending December 31, 2024  Year ended December 31  % Increase/(Decrease)  Three months ended December 31  % Increase/(Decrease) 2024  2023    2024  2023  Thousands of Dollars (Excluding earning per share figures) Sales 2,045,666  1,857,682  10%  599,227  508,603  18% Cost of sales 1,189,374  1,097,084    349,099  289,468  Gross profit 856,292  760,598  13%  250,128  219,135  14% % of sales 41.9%  40.9%    41.7%  43.1%  Selling and marketing expenses 568,151  522,214  9%  156,674  141,364  11% % of sales 27.8%  28.1%    26.1%  27.8%  General and administrative expenses 105,222  93,334  13%  29,593  25,048  18% % of sales 5.1%  5.0%    4.9%  4.9%  Other income, net and share in profit of associated company (1,167)  (7,970)    (812)  (3,433)  Operating income excluding non-core items 184,086  153,020  20%  64,673  56,156  15% % of sales 9.0%  8.2%    10.8%  11.0%  Non-core items 14,922  8,087    11,562  -  Operating income 169,164  144,933  17%  53,111  56,156  (5%) Finance expenses, net 44,779  37,932  18%  13,244  8,635  53% Income before taxes on income 124,385  107,001    39,867  47,521  Taxes on income 29,747  21,660    10,344  9,741  Net income 94,638  85,341  11%  29,523  37,780  (22%) Net income excluding non-core items, net of tax 108,509  91,600  18%  40,957  37,780  8%  Net income attributed to the company's shareholders excluding non-core items, net of tax 100,281  85,407    37,693  34,366   Attribution of net earnings:  Attributed to company's shareholders 86,410  79,210    26,259  34,366  Attributed to non-controlling interests 8,228  6,131    3,264  3,414  94,638  85,341    29,523  37,780  Net diluted earnings per share attributed to company's shareholders 3.29  3.02    1.00  1.31  Net diluted earnings per share, before non-core items, net of tax, attributable to Company's shareholders 3.82  3.25  18%  1.43  1.31  9%

DELTA GALIL INDUSTRIES LTD.

Consolidated Cash Flow Reports  Year ended December 31 2024    2023  (Audited) Thousands of Dollars  Cash flows from operating activities:  Net income  94,638    85,341  Adjustments required to reflect cash flows generated from operating activities  182,506    185,301  Interest paid in cash  (31,222 )   (31,184 ) Interest received in cash  3,511    4,014  Taxes on income refund (paid) in cash, net  (46,410 )   (12,658 ) Net cash generated from operating activities  203,023    230,814   Cash flows from investment activities:  Change in short-term deposit, net  -    60,422  Purchase of fixed assets and assets under construction  (73,994 )   (45,363 ) Purchase of intangible assets  (32,807 )   (7,624 ) Repayment (providing) of a loan from (to) a business partner  981    (1,089 ) Proceeds from selling of fixed asset  600    1,121  Others  1,207    1,083  Net cash generated from (used in) Investing activities  (104,013 )   8,550   Cash flows from financing activities:  Dividends paid to non-controlling interest holders in consolidated subsidiary  (14,488 )   (2,362 ) Long term payables credit for fixed assets purchase  (5,051 )   (6,684 ) Lease principle repayment  (49,932 )   (48,891 ) Repayment of bonds  (31,202 )   (46,255 ) Dividend paid  (32,972 )   (26,510 ) Receipt of a long-term loans from banking corporations  6,616    32,694  Repayment of long-term loans from banking corporations  (24,146 )   (44,457 ) Short-term credit from banking corporations, net  1,929    (50,663 ) Others  394    (1,383 ) Net cash used in financing activities  (148,852 )   (194,511 ) Net increase (decrease) in cash and cash equivalents  (49,842 )   44,853   Exchange rate differences and revaluation of cash and cash equivalents, net  (4,112 )   2,961   Balance of cash and cash equivalents at the beginning of the period, net  174,463    126,649  Balance of cash and cash equivalents at the end of the Period, net  120,509    174,463

DELTA GALIL INDUSTRIES LTD.

Consolidated Cash Flow Reports  Year ended December 31 2024    2023  (Audited) Thousands of Dollars  Adjustments required to reflect cash flows from operating activities:  Revenues and expenses not involving cash flow:  Depreciation  33,024    34,033  Amortization  65,731    61,961  Impairment of non-financial assets  5,344  Exchange rate (gains) losses  415    (124 ) Interest on loans and bonds  19,351    21,933  Interest received in cash  (3,511 )   (4,014 ) Taxes on income paid in cash, net  46,410    12,658  Deferred taxes on income, net  (2,738 )   (7,089 ) Interest due to lease agreements  11,871    9,251  Severance pay liability, net  (557 )   (1,599 ) Change in realignment accrual  4,568    941  Income from decrease of earn-out liability  -    (4,000 ) Capital gain  (512 )   (1,482 ) Change to the benefit component of options granted to employees  2,188    2,128  Share in profits of associated company accounted for using the equity method  (342 )   (846 ) Others  314    2,463  181,556    126,214  Changes to operating assets and liabilities:  Increase in trade receivables  (37,762 )   (3,868 ) Increase in other receivable and balances  (7,822 )   (5,083 ) Increase (decrease) in trade payables  76,460    (46,251 ) Increase (decrease) in other payables  18,294    (15,274 ) Decrease (Increase) in inventory  (48,220 )   129,563  950    59,087  182,506    185,301

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Contacts

For more information:
Nissim Douek
+972-54-5201178
[email protected]

U.S. Media Contact:
Stacy Berns
Berns Communications Group
+1-212-994-4660
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