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Operating Income Rises 59% from Prior Year on a Sales Increase of 39%, as Retail, Brand and Regional Expansion Drive Profitable Growth

Increased 2013 Full-Year Guidance Raises Expectations for Growth in Sales, EBIT, Net Income and EPS

Quarterly Highlights

· Sales rose to $234.4 million in the 2013 second quarter, up 39% from the same period of 2012.

· Organic sales growth was 18%, excluding the Schiesser Group acquisition.

· Delta Galil delivered its 15th consecutive quarter of year-over-year sales growth.

· Operating income was $14.0 million in the 2013 second quarter, growing 59% compared to operating income a year ago, before non-recurring items.

· Net income attributed to shareholders rose to $8.8 million in the 2013 second quarter, increasing 44% from the same 2012 period, before non-recurring items.

· Diluted earnings per share attributed to shareholders increased to $0.35 for the 2013 second quarter, up 40% from $0.25 a year ago, before non-recurring items.

· The Board of Directors declared a dividend of $2.5 million, or $0.1015 per share, to be distributed on August 22, 2013. The determining and "ex-dividend" date will be August 8, 2013.

· Strong balance sheet was highlighted by $34.8 million in cash and a record $290.8 million in equity as of June 30, 2013.

· 2013 full-year guidance increased: sales are now expected to be $940-950 million, up from prior forecast of $910-920 million. Full-year 2013 diluted EPS is now expected to be $1.59-$1.67, up from prior forecast of $1.51-$1.59.

· Isaac Dabah, CEO of Delta Galil, noted: “Our strategies to expand the Company’s retail operations, build our branded business, create innovative products and diversify our regional markets led to strong performance in the first half of 2013. We anticipate continued profitable growth through the rest of this year, as reflected in our increased financial guidance.”

Tel Aviv, July 31, 2013 – 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, today reported its financial results for the second quarter and six months ended June 30, 2013.

The Company reported sales of $234.4 million for the second quarter of 2013, up from $169.1 million for the same quarter last year, an increase of 39%. Sales in the first six months of 2013 were $461.6 million, compared to $337.2 million in the same period of 2012, an increase of 37%.

Delta Galil’s continued top-line growth in 2013 demonstrated the Company’s strong position across a range of products, channels, customers and regions, reflected in an 18% organic increase in sales from its traditional businesses, excluding the acquired Schiesser Group.

Operating income excluding non-recurring items was $14.0 million for second quarter 2013, up 59% from $8.8 million in the same quarter of 2012. In the first six months of 2013, operating income excluding non-recurring items was $25.5 million, compared to $15.2 million in the same period of 2012, a 68% increase. In the year-ago periods, non-recurring items included a net gain of $14.5 million pre-tax, relating to a capital gain on asset sales, net of Schiesser acquisition costs, fixed asset impairment and restructuring expenses; there were no such items in the 2013 periods.

A key contributor to the higher operating income was an expanding gross profit margin, which rose to 26.1% in the 2013 second quarter from 18.9% a year ago. This was partly offset by higher selling, marketing, general and administrative expenses as Delta Galil invested in the growth of its business.

Net income attributable to shareholders was $8.8 million in the 2013 second quarter, compared to $6.1 million (excluding non-recurring items) in the same quarter of 2012, a 44% increase. Diluted earnings per share attributed to shareholders were $0.35 for the 2013 second quarter, up from $0.25 for the 2012 second quarter. For the first six months of 2013, net income attributable to shareholders was $15.4 million or $0.61 per diluted share, compared to $10.0 million or $0.41 per diluted share (excluding non-recurring items) for the same period of 2012.

Management Comment

Isaac Dabah, CEO of Delta Galil, stated: “Our strategies to expand the Company’s retail operations, build our branded business, create innovative products and diversify our regional markets led to strong performance in the first half of 2013. We delivered record quarterly sales and operating income for the second quarter, and we anticipate continued profitable growth through the rest of this year, as reflected in our increased financial guidance. Our increasing top-line reflects both organic growth and our Schiesser acquisition. We performed well in key regions such as the US, Germany and Israel, and in product channels including mass merchants, department stores and specialty stores. Today we are announcing an increase in our sales, EBIT, net income and EPS guidance for 2013, and have rewarded shareholders with dividends totaling $5 million year-to-date. We are confident that Delta Galil has great potential for continued organic growth, while also focusing on identifying select acquisition opportunities that build on our platform of product innovation and operational effectiveness.”

EBITDA, Equity, Dividend Declaration

EBITDA was $18.3 million or 7.8% of sales in the 2013 second quarter, increasing 55% compared with $11.8 million (before non-recurring items) or 7.0% of sales in the same quarter of 2012. For the first six months of 2013, EBITDA was $34.0 million or 7.4% of sales, rising 63% compared with $20.9 million (before non-recurring items) or 6.2% of sales in the same 2012 period.

Operating cash flow was positive $18.0 million in the 2013 second quarter, versus $16.1 million in the same period of 2012.

Equity on June 30, 2013 was a record $290.8 million, compared to $237.3 million a year earlier.

Delta Galil declared a dividend of $2.5 million, or $0.1015 per share, to be distributed on August 22, 2013. The determining and "ex-dividend" date will be August 8, 2013.

Raising Guidance for 2013

The Company today increased its 2013 financial guidance, reflecting a strong outlook for sales and profitability:

· Full-year 2013 sales are expected to range between $940 million-$950 million, representing an average increase of over 15% from 2012 sales of $818.8 million. (Prior forecast was $910 million-$920 million).

· Full-year 2013 EBIT is expected to range between $61 million-$65 million, representing an average increase of over 24% from 2012 EBIT before capital gains and one-time items of $50.7 million. (Prior forecast was $57 million-$62 million.)

· Full-year 2013 net income is expected to range between $40 million-$42 million, representing an average increase of over 21% from 2012 net income before one-time items of $33.8 million. (Prior forecast was $38 million-$40 million.)

· Full-year 2013 diluted EPS is expected to range between $1.59-$1.67, representing an average increase of nearly 19% from 2012 EPS before capital gains and one-time items of $1.37. (Prior forecast was $1.51-$1.59.)

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.

For more information:

Nissim Douek

+972-54-5201178

Nissim@unik.co.il

U.S. Media Contact:

Stacy Berns/Melissa Jaffin

Berns Communications Group

+1-212-994-4660

sberns@bcg-pr.com