Business Wire | Nov 4, 2021 07:16AM EDT

Delta Galil Reports Record Third Quarter 2021 Results

Nov. 04, 2021

TEL AVIV, Israel--(BUSINESS WIRE)--Nov. 04, 2021--Delta Galil Industries, Ltd. (DELT/Tel Aviv Stock Exchange), the global manufacturer and marketer of branded and private label apparel products for men, women and children, as well as leisurewear, activewear and denim, today reported strong financial results for the third quarter ended September 30, 2021.

Isaac Dabah, CEO of Delta Galil, stated: "We are very pleased with the strong growth in sales and margins in the quarter reflected in all of our operating segments and geographic regions."

Third Quarter 2021 Highlights

* Sales were $501.1 million, a 31% increase from $382.9 million in the same quarter last year. * Organic sales, excluding Bare Necessities, which was acquired in October of 2020, increased by 23% in the third quarter. * Company's own websites' sales increased 102% to $52.4 million. * Gross margin increased by 150 basis points to a quarter high of 39.6%. * Operating margin increased to an all-time high of 10.6%, versus 8.8% in Q3 2020. * Net income attributed to shareholders and excluding Non-core items was a Q3 record $34.5 million, a 76% increase from $19.6 million for the third quarter of 2020. * Q3 diluted earnings per share excluding non-core items, rose to $1.31, compared to $0.77 per share in the third quarter of 2020. * Strong balance sheet highlighted by $210.8 million in cash and $609.9 million in equity as of September 30, 2021. * Net financial debt was $134.8 million, down by $151.6 million versus September 30, 2020. * Declared a dividend of $7 million, or $0.274 per share, to be distributed on November 23, 2021. The determining and "ex-dividend" date will be November 11, 2021. * Company signs long-term global licensing agreement for Polo Ralph Lauren women's intimates and sleepwear collection.

Isaac Dabah, CEO of Delta Galil, stated: "We are very pleased with our performance this quarter, which represents a strong trend of three consecutive quarters of record revenues, four consecutive quarters of record gross margin and five consecutive quarters of record operating margin. We saw a significant increase in EBIT, driven by higher sales in all segments and geographic areas with improved products, customers and channels mix, and saw the benefits of operational and financial efficiencies we implemented over the last 15 months.

"As part of our strategy to enhance our branded portfolio, we have signed a long-term global licensing agreement with Polo Ralph Lauren for women's intimates and sleepwear. This partnership represents a significant addition to our licensing portfolio, and we're thrilled to be working with such an iconic and timeless brand. It marks another significant step in our growth strategy of partnering with leading global brands and comes on the heels of our recent global licensing agreements with Adidas and Wolford.

"During the quarter, we continued our focus on digital innovation. With our merged Bare Necessities and Brayola platform, we are now in the process of introducing our own brands through our digital channel. We have exciting plans to grow this area, which we expect to increase sales and profitability overtime.

"We have solid plans in place, a strong balance sheet and operating cash flow, all of which position us well to continue on the growth trajectory we enjoyed this quarter," Mr. Dabah concluded.

Sales

The Company reported sales of $501.1 million for the third quarter of 2021, a 31% increase from $382.9 million for the third quarter of 2020. Sales for the first nine months of 2021 were $1,373.0 million, up 39% from $986.5 million in the comparable period last year. Excluding the sales of Bare Necessities, which was acquired in October 2020, sales increased by 23% and 30% in the third quarter and the first nine months of the year, respectively, compared to the same periods last year. Effective as of the second quarter of 2021, Delta Galil reorganized its business segments to better reflect and align with its strategic focus. The new segments - Brands (owned and licensed), Private Label, Delta Israel, 7 for All Mankind and Online Retailer - all contributed to the recent sales growth. Growth also was seen across all geographic regions.

Digital Sales

E-commerce sales on the Company's own website for the third quarter and first nine months of 2021 rose 102% and 141% to $52.4 million and $186.4 million, respectively, compared to comparable periods in 2020. Excluding Bare Necessities, own website e-commerce sales declined 8% in the third quarter of 2021, compared to the same quarter in 2020, but increased 28% in the first nine months of the year compared to the same period last year.

EBIT

EBIT for the third quarter increased 58% to $53.0 million compared to $33.6 million in the third quarter of 2020. EBIT for the first nine months of 2021 increased to $123.4 million, compared to a negative EBIT of $50.5 million for the first nine months of 2020. Excluding non-core items, EBIT for the first nine months of 2021 was $123.4 million, compared to EBIT of $1.5 million for the same period last year.

Net Income

Net income for the third quarter was $32.5 million, compared to net income of $19.5 million for the third quarter of 2020. Excluding non-core items, net of tax, which included a loss from early redemption of bonds, net income for the third quarter was $36.4 million, compared to net income of $19.5 million for the third quarter of 2020.

Net income attributed to shareholders excluding non-core items increased by 76% to $34.5 million, compared to $19.6 million in Q3 2020.

Net income for the first nine months of 2021 was $74.8 million, compared to a net loss of $64.3 million for the same period last year. Excluding non-core items, net of tax, net income for the first nine months of 2021 was $78.7 million, compared to a net loss of $23.5 million for the same period last year.

Net income attributed to shareholders excluding Non-core items in the first nine months of 2021 amounted to $ 74.2 million compared to a loss of $23.1 million in the first nine months of 2020.

Diluted Earnings Per Share

Diluted earnings per share rose to $1.16 for the third quarter of 2021, compared to $0.77 in the third quarter of 2020. Diluted earnings per share before non-core items amounted to $1.31 for the 2021 third quarter, compared to $0.77 for the third quarter of 2020.

Diluted earnings per share for the first nine months of 2021 were $2.70, compared to a diluted loss per share of $2.50 for the same period of 2020. Diluted earnings per share excluding non-core items were $2.85 for the first nine months of 2021, compared to a loss per share of $0.90 for the comparable period last year.

EBITDA, Cash Flow, Net Debt, Equity and Dividend

EBITDA excluding the IFRS 16 impact, was $60.7 million in the third quarter of 2021, compared to $41.4 million in the third quarter of 2020. For the first nine months of 2021, EBITDA was $148.1 million, compared to $25.4 million in the same period last year.

Operating cash flow for the third quarter of 2021 was $12.9 million, compared with $41.6 million in the third quarter of 2020. Excluding IFRS 16 and non-core items, operating cash flow was $4.7 million, compared to $27.8 million in the third quarter of 2020. The decrease compared with the year-ago period was primarily due to increase in operational working capital attributed mainly to increase in inventory towards the expected continuance increase in sales and the increased lead time.

Operating cash flow totaled $94.5 million for the first nine months of 2021, compared to $124.9 million for the first nine months last year. Excluding IFRS 16 and non-core items, operating cash flow was $63.0 million for the first nine months of 2021, compared to $85.9 million for the same period last year.

Net financial debt as of September 30, 2021 was $134.8 million, compared to $286.4 million as of September 30, 2020, and $236.3 million as of December 31, 2020.

In order to flatten the debt payment curve and extend the duration of the loan embedded in the bonds series, the Company fully redeemed its debentures series B on August 23, 2021, in a total amount of approximately $115 million, using bank term loans and available cash.

Equity on September 30, 2021, was $609.9 million or 34.9% of the total balance sheet, compared to $436.4 million or 26.8% of the total balance sheet a year earlier.

Delta Galil declared a dividend of $7 million, or $0.274 per share, to be distributed on November 23, 2021. The determining and "ex-dividend" date will be November 11, 2021.

2021 Financial Guidance

Delta Galil raised its 2021 financial guidance, excluding non-core items and based on IFRS 16 and current market conditions and assuming there is no resurgence of the COVID-19 pandemic that leads to quarantines and/or lockdowns in any countries in which the company sells or manufactures its products:

$ in millions

% % INCREASE INCREASE 2021 2021 CURRENT CURRENT CURRENT 2019 ACTUAL PREVIOUS ** GUIDANCE GUIDANCE GUIDANCE GUIDANCE VS. VS. 2019 PREVIOUS ACTUAL GUIDANCE 1,825- 1,900-1,940 4 % 14 %Sales 1,690.2 1,875

160 - 180 - 186 11 % 73 %EBIT* 106.0 170

260 - 280 - 286 7 % 45 %EBITDA* 195.6 270

96 - 104 113 - 117 15 % 91 %Net Income* 60.2

Diluted 3.40 - 4.00 - 4.15 15 % 73 %EPS* ($) 2.36 3.70

*Before one time items, includes IFRS 16 impact

**Current guidance assuming there is no severe resurgence of the COVID-19pandemic that leads to quarantines and/or lockdowns in any countries in whichthe company sells or manufactures its products.

* Full-year 2021 sales are expected to range between $1,900 million and $1,940 million, representing an increase of 4%, compared to mid-point of prior guidance and up 14% from 2019 sales of $1,690.2 million. * Full-year 2021 EBIT is expected to range between $180 million and $186 million, representing an increase of 11%, compared to mid-point of prior guidance and up 73% from 2019 EBIT of $106.0 million. * Full-year 2021 EBITDA is expected to range between $280 million and $286 million, representing an increase of 7%, compared to mid-point of prior guidance and up 45% from 2019 EBITDA of $195.6 million. * Full-year 2021 net income is expected to range between $113 million and $117 million, representing an increase of 15%, compared to mid-point of prior guidance and up 91% from 2019 net income of $60.2 million. * Full-year 2021 diluted EPS is expected to range between $4.00 and $4.15, representing an increase of 15%, compared to mid-point of prior guidance and up 73% from 2019 EPS of $2.36.

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 and branded Men's underwear including the brands Schiesser, Eminence, Athena & Liabel; babywear, activewear, sleepwear such as the PJ Salvage brand, and leisurewear. Delta Galil also designs, develops markets and sells branded denim and apparel under the brand 7 For All Mankind(r), and ladies apparel under the brands Splendid(r) and Ella Moss(r), among others. In addition, it sells its products under brand names licensed to the company, including Wilson, Spalding, Tommy Hilfiger 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, 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 September 30, 2021

September 30 December 31

2021 2020 2020

(Unaudited) (Audited)

Thousands of Dollars





Assets

Current assets:

Cash and cash equivalents 210,813 215,520 230,843

Restricted Cash 816 2,450 898

Other accounts receivable:

Trade receivables 189,354 184,100 200,201

Taxes on income receivable 11,890 7,905 18,305

Others 48,758 35,008 38,255

Financial derivative 2,140 1,074 2,020

Inventory 409,316 306,964 291,703

Total current assets 873,087 753,021 782,225



Non-current assets:

Investments in associated companies accounted using

the equity method and long-term receivables 11,004 27,105 14,668

Investment property 3,097 3,264 3,389

Fixed assets, net of accumulated depreciation 207,531 199,438 209,465

Goodwill 148,299 147,506 150,657

Intangible assets, net of accumulated 281,192 259,974 266,967amortization

Assets in respect of usage rights 195,683 211,474 217,777

Deferred tax assets 15,447 9,016 15,590

Financial derivative 11,021 15,143 31,593

Total non-current assets 873,274 872,920 910,106

Total assets 1,746,361 1,625,941 1,692,331



DELTA GALIL INDUSTRIES LTD.

Concise Consolidated Balance Sheets

As of September 30, 2021

September 30

December 31

2021

2020

2020

(Unaudited)

(Audited)

Thousands of Dollars

Liabilities and Equity

Current liabilities:

Short-term bank loans

13

30,025

11,013

Current maturities of bank loan

7,622

15,340

20,295

Current maturities of debentures

39,129

37,645

39,029

Financial derivative

-

1,352

170

Current maturities of liabilities in respect of leases

53,722

57,584

60,363

Other accounts payable:

Trade payables

249,077

187,505

186,903

Taxes on income payable

24,691

17,935

26,294

Provision for restructuring plan

13,678

28,122

26,825

Others

157,213

125,100

150,737

Total current liabilities

545,145

500,608

521,629

Non-current liabilities:

Bank loan

119,781

105,488

104,096

Severance pay liabilities less plan assets

8,828

10,464

9,499

Liabilities in respect of leases

165,043

177,033

182,408

Other non-current liabilities

70,770

36,364

43,030

Debentures

187,276

323,515

316,764

Deferred taxes liabilities

39,604

34,725

38,513

Financial derivative

-

1,325

-

Total non-current liabilities

591,302

688,914

694,310

Total liabilities

1,136,447

1,189,522

1,215,939

Equity:

Equity attributable to equity holders of the parent company:

Share capital

23,714

23,714

23,714

Share premium

129,721

130,262

130,260

Other capital reserves

50,623

(8,530

)

6,604

Retained earning

396,451

307,125

332,268

Treasury shares

(15,528

)

(16,093

)

(16,067

)

584,981

436,478

476,779

Minority interests

24,933

(59

)

(387

)

Total equity

609,914

436,419

476,392

Total liabilities and equity

1,746,361

1,625,941

1,692,331

DELTA GALIL INDUSTRIES LTD.

Concise Consolidated Balance Sheets

As of September 30, 2021

September 30 December 31

2021 2020 2020

(Unaudited) (Audited)

Thousands of Dollars



Liabilities and Equity

Current liabilities:

Short-term bank loans 13 30,025 11,013

Current maturities of bank loan 7,622 15,340 20,295

Current maturities of debentures 39,129 37,645 39,029

Financial derivative - 1,352 170

Current maturities of liabilities in 53,722 57,584 60,363 respect of leases

Other accounts payable:

Trade payables 249,077 187,505 186,903

Taxes on income payable 24,691 17,935 26,294

Provision for restructuring plan 13,678 28,122 26,825

Others 157,213 125,100 150,737

Total current liabilities 545,145 500,608 521,629



Non-current liabilities:

Bank loan 119,781 105,488 104,096

Severance pay liabilities less plan 8,828 10,464 9,499 assets

Liabilities in respect of leases 165,043 177,033 182,408

Other non-current liabilities 70,770 36,364 43,030

Debentures 187,276 323,515 316,764

Deferred taxes liabilities 39,604 34,725 38,513

Financial derivative - 1,325 -

Total non-current liabilities 591,302 688,914 694,310

Total liabilities 1,136,447 1,189,522 1,215,939



Equity:

Equity attributable to equity holders of the parent company:

Share capital 23,714 23,714 23,714

Share premium 129,721 130,262 130,260

Other capital reserves 50,623 (8,530 ) 6,604

Retained earning 396,451 307,125 332,268

Treasury shares (15,528 ) (16,093 ) (16,067 )

584,981 436,478 476,779

Minority interests 24,933 (59 ) (387 )

Total equity 609,914 436,419 476,392

Total liabilities and equity 1,746,361 1,625,941 1,692,331

DELTA GALIL INDUSTRIES LTD.

Concise Consolidated Statement of Income

For the 3-month and 9-month periods ending September 30, 2021

Nine months ended September 30

Three months ended September 30

2021

2020

2021

2020

(Unaudited)

Thousands of Dollars

Sales

1,372,972

986,508

501,066

382,878

Cost of sales

828,167

647,250

302,562

236,839

Gross profit

544,805

339,258

198,504

146,039

% of sales

39.7

%

34.4

%

39.6

%

38.1

%

Selling and marketing expenses

351,971

271,711

121,133

93,551

% of sales

25.65

%

27.5

%

24.2

%

24.4

%

General and administrative expenses

70,385

55,976

25,320

17,318

Impairment loss on trade receivables

-

8,744

-

799

Other expenses (income), net and share in profit of associated company accounted for using the equity method

(946

)

1,302

(948

)

767

Operating income excluding non-recurring items

123,395

1,525

52,999

33,604

% of sales

9.0

%

0.2

%

10.6

%

8.8

%

Non-recurring items

-

52,060

-

-

Operating income (loss)

123,395

(50,535

)

52,999

33,604

Finance expenses

24,586

-

7,288

-

Loss from early redemption of bonds

5,056

-

5,056

-

Total finance expenses

29,642

27,713

12,344

8,663

Income (loss) before tax on income

93,753

(78,248

)

40,655

24,941

Taxes on income (tax savings)

18,915

(13,987

)

8,168

5,399

Net income (loss) for the period

74,838

(64,261

)

32,487

19,542

Net income (loss) for the period excluding one-time items, net of tax

78,731

(23,458

)

36,381

19,542

Attribution of net earnings for the period:

Attributed to company's shareholders

70,274

(63,918

)

30,615

19,637

Attributed to non-controlling interests

4,564

(343

)

1,872

(95

)

74,838

64,261

32,487

19,542

Net diluted earnings (loss) per share attributed to company's shareholders

2.70

(2.50

)

1.16

0.77

Net diluted earnings (loss) per share, before non-recurring items net of tax attributable to company's shareholders

2.85

(0.90

)

1.31

0.77

DELTA GALIL INDUSTRIES LTD.

Concise Consolidated Statement of Income

For the 3-month and 9-month periods ending September 30, 2021

Nine months ended Three months ended September 30 September 30

2021 2020 2021 2020

(Unaudited)

Thousands of Dollars





Sales 1,372,972 986,508 501,066 382,878

Cost of sales 828,167 647,250 302,562 236,839

Gross profit 544,805 339,258 198,504 146,039

% of sales 39.7 % 34.4 % 39.6 % 38.1 %

Selling and marketing expenses 351,971 271,711 121,133 93,551

% of sales 25.65 % 27.5 % 24.2 % 24.4 %

General and administrative 70,385 55,976 25,320 17,318 expenses

Impairment loss on trade - 8,744 - 799 receivables

Other expenses (income), netand share in profit ofassociated (946 ) 1,302 (948 ) 767 company accounted for using theequity method

Operating income excluding 123,395 1,525 52,999 33,604 non-recurring items

% of sales 9.0 % 0.2 % 10.6 % 8.8 %

Non-recurring items - 52,060 - -

Operating income (loss) 123,395 (50,535 ) 52,999 33,604

Finance expenses 24,586 - 7,288 -

Loss from early redemption of 5,056 - 5,056 - bonds

Total finance expenses 29,642 27,713 12,344 8,663

Income (loss) before tax on 93,753 (78,248 ) 40,655 24,941 income

Taxes on income (tax savings) 18,915 (13,987 ) 8,168 5,399

Net income (loss) for the 74,838 (64,261 ) 32,487 19,542 period

Net income (loss) for theperiod excluding one-time 78,731 (23,458 ) 36,381 19,542 items, net of tax



Attribution of net earnings for the period:

Attributed to company's 70,274 (63,918 ) 30,615 19,637 shareholders

Attributed to non-controlling 4,564 (343 ) 1,872 (95 )interests

74,838 64,261 32,487 19,542



Net diluted earnings (loss) pershare 2.70 (2.50 ) 1.16 0.77 attributed to company'sshareholders



Net diluted earnings (loss) pershare, before non-recurringitems 2.85 (0.90 ) 1.31 0.77 net of tax attributable tocompany's shareholders

DELTA GALIL INDUSTRIES LTD.

Concise Consolidated Cash Flow Reports

For the 3-month and 9-month periods ending September 30, 2021

Nine months ended September 30

Three months ended September 30

2021

2020

2021

2020

(Unaudited)

Thousands of Dollars

Cash flows from operating activities:

Net income (loss) for the period

74,838

(64,261

)

32,487

19,542

Adjustments required to present cash flows

from operating activities

45,216

214,415

(6,362

)

30,373

Interest paid in cash

(28,049

)

(24,634

)

(12,994

)

(8,298

)

Interest received in cash

471

722

310

399

Taxes on income received (paid) in cash, net

2,012

(1,338

)

(547

)

(375

)

Net cash provided by operating activities

94,488

124,904

12,894

41,641

Cash flows from investment activities:

Acquisition of property, plant and equipment

(16,595

)

(11,188

)

(5,881

)

(3,595

)

Acquisition of intangible assets

(2,937

)

(2,398

)

(1,255

)

(820

)

Loan given to a business partner

(1,750

)

-

-

-

Deposit release for cash flow hedge transaction

(1,770

)

-

-

-

Payments for acquisition of subsidiaries

-

(1,469

)

-

-

Proceeds from sale of property, plant and equipment

658

398

15

86

Others

(346

)

-

-

-

Net cash used in Investing activities

(22,740

)

(14,657

)

(7,121

)

(4,329

)

Cash flows from financing activities:

Dividends paid to non-controlling interest holders

in consolidated subsidiary

(863

)

-

(643

)

-

Payment of long term payable in connection with acquisition of property, plant and equipment

(3,525

)

(2,886

)

(1,034

)

(850

)

Principal elements of lease payments

(36,532

)

(38,992

)

(13,239

)

(13,819

)

Early redemption of bonds

(94,313

)

-

(94,313

)

-

Repayment of bonds

(15,940

)

(15,940

)

(15,940

)

(15,940

)

Dividend paid

(8,531

)

(6,506

)

(5,017

)

-

Receipt of long-term loans from banks

74,950

44,464

74,950

-

Repayment of long-term loans from banks

(66,061

)

(7,348

)

(19,757

)

3,085

Short-term credit from banking corporations, net

(10,949

)

30,025

50

(48,901

)

Repayment of bank loan used to acquisition of a subsidiary

(4,504

)

(6,913

)

(1,503

)

(1,501

)

Net proceeds from issuance of a subsidiary

77,156

-

-

-

Net cash generated from ( used in) financing activities

(89,112

)

(4,096

)

(76,446

)

(77,926

)

Net increase (decrease) in cash and cash equivalents

(17,364

)

106,151

(70,673

)

(40,614

)

Exchange rate differences and revaluation of cash

and cash equivalents, net

(2,666

)

2,943

1,605

3,084

Balance of cash and cash equivalents

at the beginning of the period, net

230,843

106,426

279,881

253,050

Balance of cash and cash equivalents at the end of the Period, net

210,813

215,520

210,813

215,520

DELTA GALIL INDUSTRIES LTD.

Concise Consolidated Cash Flow Reports

For the 3-month and 9-month periods ending September 30, 2021

Nine months ended Three months ended September 30 September 30

2021 2020 2021 2020

(Unaudited)

Thousands of Dollars



Cash flows from operating activities:

Net income (loss) for the period 74,838 (64,261 ) 32,487 19,542

Adjustments required to present cash flows

from operating activities 45,216 214,415 (6,362 ) 30,373

Interest paid in cash (28,049 ) (24,634 ) (12,994 ) (8,298 )

Interest received in cash 471 722 310 399

Taxes on income received (paid) 2,012 (1,338 ) (547 ) (375 )in cash, net

Net cash provided by operating 94,488 124,904 12,894 41,641 activities

Cash flows from investment activities:

Acquisition of property, plant (16,595 ) (11,188 ) (5,881 ) (3,595 )and equipment

Acquisition of intangible assets (2,937 ) (2,398 ) (1,255 ) (820 )

Loan given to a business partner (1,750 ) - - -

Deposit release for cash flow (1,770 ) - - - hedge transaction

Payments for acquisition of - (1,469 ) - - subsidiaries

Proceeds from sale of property, 658 398 15 86 plant and equipment

Others (346 ) - - -

Net cash used in Investing (22,740 ) (14,657 ) (7,121 ) (4,329 )activities

Cash flows from financing activities:

Dividends paid to non-controlling interest holders

in consolidated subsidiary (863 ) - (643 ) -

Payment of long term payable inconnection with acquisition of (3,525 ) (2,886 ) (1,034 ) (850 )property, plant and equipment

Principal elements of lease (36,532 ) (38,992 ) (13,239 ) (13,819 )payments

Early redemption of bonds (94,313 ) - (94,313 ) -

Repayment of bonds (15,940 ) (15,940 ) (15,940 ) (15,940 )

Dividend paid (8,531 ) (6,506 ) (5,017 ) -

Receipt of long-term loans from 74,950 44,464 74,950 - banks

Repayment of long-term loans from (66,061 ) (7,348 ) (19,757 ) 3,085 banks

Short-term credit from banking (10,949 ) 30,025 50 (48,901 )corporations, net

Repayment of bank loan used to (4,504 ) (6,913 ) (1,503 ) (1,501 )acquisition of a subsidiary

Net proceeds from issuance of a 77,156 - - - subsidiary



Net cash generated from ( used (89,112 ) (4,096 ) (76,446 ) (77,926 )in) financing activities

Net increase (decrease) in cash (17,364 ) 106,151 (70,673 ) (40,614 )and cash equivalents



Exchange rate differences and revaluation of cash

and cash equivalents, net (2,666 ) 2,943 1,605 3,084

Balance of cash and cash equivalents

at the beginning of the period, 230,843 106,426 279,881 253,050 net

Balance of cash and cashequivalents 210,813 215,520 210,813 215,520 at the end of the Period, net

DELTA GALIL INDUSTRIES LTD.

Concise Consolidated Cash Flow Reports

For the 3-month and 9-month periods ending September 30, 2021

Nine months ended September 30

Three months ended September 30

2021

2020

2021

2020

(Unaudited)

Thousands of Dollars

Adjustments required to reflect cash flows

from operating activities:

Revenues and expenses not involving cash flow:

Depreciation

25,632

28,174

8,121

8,461

Amortization

46,814

45,885

15,038

15,751

Impairment of intangible assets

-

12,780

-

-

Cash erosion, net

60

96

1,938

(195

)

Interest paid in cash

15,325

17,091

5,861

5,839

Interest received in cash

(471

)

(722

)

(310

)

(399

)

Taxes on income paid (received) in cash, net

(2,012

)

1,338

547

375

Deferred taxes on income, net

852

6,522

(5,015

)

11,428

Interest due to lease agreements

7,668

7,543

2,077

2,459

Severance pay liability, net

(237

)

13

(477

)

(77

)

Restructuring (payments) provision

(13,147

)

26,063

(4,111

)

(3,534

)

Decrease in liabilities in respect of leases due to rent payments relief

(3,502

)

(2,845

)

(111

)

(681

)

Capital gain from sale of fixed assets

(328

)

(180

)

(88

)

(65

)

Loss from early redemption of bonds

5,056

-

5,056

-

Change to the benefit component of options granted to employees

2,440

786

820

239

Impairment loss on trade receivables

-

8,744

-

799

Share in profits of associated company accounted for using the equity method

(144

)

(203

)

(106

)

(128

)

Others

(2,801

)

3,967

(3,532

)

1,859

81,205

155,052

25,708

42,132

Changes to operating assets and liabilities:

Decrease (increase) in trade receivables

7,672

20,115

(16,019

)

(30,685

)

Decrease (Increase) in other receivable and balances

595

(4,747

)

(8,497

)

(4,795

)

Decrease in trade payables

60,733

44,075

34,558

35,634

Decrease (increase) in other payables

17,861

(24,510

)

6,158

1,376

Decrease (increase) in inventory

(122,850

)

24,430

(48,270

)

(13,289

)

(35,989

)

59,363

(32,070

)

(11,759

)

45,216

214,415

(6,362

)

30,373

View source version on businesswire.com: https://www.businesswire.com/news/home/20211104005627/en/

CONTACT: For more information: Nissim Douek +972-54-5201178 Nissim@unik.co.il

CONTACT: U.S. Media: Stacy Berns Berns Communications Group +1-212-994-4660 sberns@bcg-pr.com