DELTA GALIL http://www.deltagalil.com/ Delta provides innovative fashion and basic apparel of the highest quality to address a wide range of price points for a wide range of customers. We provide our customers with customized vertical solutions, which encompass every stage of production, from initial design and development through manufacture of fabrics, accessories and garments to logistics, distribution and replenishment. Our product offering encompass intimate apparel, underwear, socks, leisurewear, nightwear and active-wear for men, ladies, and children. We supply private label garments for prominent global retailers, produce branded garments for leading brands and manufacture and distribute licensed products. Our major markets are the US, the UK, Continental Europe and Israel. Our customer list encompasses famous global brands such as Ralph Lauren, Calvin Klein, Hugo Boss, Nike, Puma and others, as well as leading retailers such as Marks & Spencer (UK), Wal-Mart, J.C.Penney, Target, Victoria's Secret (US), Hema (The Netherlands), Carrefour (France) and others. The Company is a licensee of prominent brands such as Wilson, Converse, Maidenform, Jeffrey Fulvimari, Barbie, Petit Bebe, Pierre Cardin and others. In addition, Delta sells garments under the Delta ® brand name in Israel, along with Fox, Disney and other licenses. Mission Delta Galil's mission is to be a global leader in high quality apparel, while promoting universal ideals of community and service: We create a Body Touch, making people feel special, stylish and comfortable from birth to maturity. We offer a comprehensive package that integrates knowledge of lifestyle, innovation and advanced technologies. We are committed to supporting our customers, fulfilling and exceeding their expectations, and enabling them to be more competitive in the market place. We are a multi-cultural global firm: We believe in mutual respect and co-existence, among ourselves and with the communities and the environment in which we live. We provide a warm, safe and healthy home for our employees and a place for growth and satisfaction. We are determined to continue growth and maintain leadership. HISTORY 1975 1976 Hired hundreds of workers in Israel Acquired state-of-the-art equipment Sales volume: $3.2 million 1977 Initiated sales activities in Israel Became largest underwear company in the country 1978 Acquired spinning factory in Nahariya Cultivated relationship with Marks & Spencer, soon to become our largest customer Sales volume: $8.5 million Delta Galil Industries Ltd. founded First sewing plants established in Carmiel and Nazareth, Israel First shipment sent to Hema in the Netherlands Sales volume: $10,000 1979 Relocated fabric plant to current location (over 20,000 square meters) Activated state-of-the-art dye house for knitted fabrics Established additional sewing plants in Israel Sales volume: $14.5 million 1980 Established an affiliated company in London to promote exports to the UK Started penetrating the French market Sales volume: $20 million 1981 Established sock plant in Carmiel Became partners in Magavot Arad (towels) Contracted Pierre Cardin to manufacture and distribute branded garments to the European community, Switzerland, Austria and Israel 1982 IPO on Tel-Aviv Stock Exchange 1983 Became a major partner in establishing the Carmiel Municipal Library Established leisurewear factory in Scotland 1984 Initial penetration of US market Opened a sales office in the US US sales volume: $400,000 1985 Expanded activities in US market Celebrated 10 years anniversary Sales volume: $55 million 1988 Sara-Lee acquired 25% of Delta shares (6 years later increased its share to 42%) Sales volume: $117 million 1989 Established Ladies Intimate Apparel division Established Leisurewear Division in Israel 1991 Developed Cotton-Lycra fabric that became primary fabric for ladies intimate apparel Sales volume: $155 million 1993 Acquired Babygro (Scotland) and increased production three times in two years Began sourcing activities in Turkey 1994 Achieved sales volume of $200 million 1995 Established sewing plant in Egypt Acquired Sabrigum, an elastic-tape factory in Israel Initiated strategic shift to low labor-cost countries Sales volume: $270 million 1996 Established manufacturing activities in Jordan through joint venture with CIG 1997 Reorganization to business unit structure Expanded activities in Bra category 1998 Began seamless apparel operation 1999 IPO on NASDAQ Began manufacturing activities in Eastern Europe Sales volume: $355 million 2000 Acquired Dominion, a Canadian sock manufacturer Acquired Wundies, a US mass-market underwear manufacturer 2001 Acquired Inner-Secrets, a US ladies intimate apparel manufacturer Merged Inner-Secrets and Wundies to form Delta Galil USA Sales volume: $559 million 2003 Acquired Auburn hosiery mills, expanding sock market in the US and Europe Acquired the Wilson hosiery license for the US and Europe 2004 Acquired Burlen Corporation Bolsters Position in Ladies’ Intimate Apparel and in the US Mass-Market. Strategy and Growth Acquisitions - Delta seeks to expand its activities through acquisitions of complementary companies having strong synergies with our existing business. These strategic acquisitions increase our span of activities with existing and new customers. Organic Growth in Existing Markets - Delta seeks to expand its activities in existing markets by increasing market share within current product categories, adding new product categories and enlarging its customer base Expansion to the Far East - One of the Company's goals is to expand its manufacturing facilities in the Far East to complement overall global manufacturing spread. Supply Chain Efficiencies - Delta is focused on constant improvement of its development and manufacturing response time in order to increase customers' competitive edge in the marketplace Delta's extensive product lines are designed with the full understanding of market trends and a focus on the needs of our customers in terms of innovation, quality, price points and time to market. Our experienced design, marketing and commercial teams work closely with each of our customers to ensure that we fulfill the needs of consumers. Delta's range of product categories covers every age group from birth to maturity, and includes ladies and teens Intimate Apparel, men's underwear and sleepwear, socks, childrenwear and leisurewear. They include basic garments for every day use, sexy garments, fashionable garments and active-wear. Delta's superior variety, state-of-the-art fabrics, technology and design enable us to maximize opportunities in new markets and product categories and ensure our market leadership. CUSTOMERS Delta provides its customers with customized vertical solutions, which encompass every stage of production, from initial design and development through manufacture of fabrics, accessories and garments to logistics, distribution and replenishment, giving them the highest quality garments at the best price. We bring our customers the latest innovations, state-of-theart technologies, a wide variety of product offerings, highly qualified professionals, global know-how and advanced logistics. Local Market Israel, Delta is a leading brand distributed through major retailers, our owned outlet stores and our new exclusive retail chain. We sell our garments through the DELTA brand name as well as through TAGA and YODFAT brands.Our brand activities include brand advertising campaigns, promotions and distributors conventions in addition to product design, development and manufacturing. We own two retail chains: 1. Delta Plus outlets (includes 80 stores located all over the country) distribute a wide collection of Delta's garments. Recently we opened a new higher positioned, retail chain located in malls Retailers Delta sells its collections to the leading retailers and specialty stores in the world. We offer tailored designs to suit our customers' needs and positioning, which enable them to effectively target their consumers. Our customer list includes Marks & Spencer (www.marksandspencer.com), Target (www.target.com), Wal-Mart (www.walmart.com), Victoria's Secret (www.limited.com/about/vs), JC Penney (www.jcpenney.com), Hema (www.hema.nl) and others Brands Delta works with a long list of globally recognized brands. We design and develop our collections according to each brand's nature, position, style and spirit. We work with Hugo Boss (www.hugoboss.com), Calvin Klein (www.calvinklein.com), Nike (www.nike.com), Dim (www.dim.fr), Ralph Lauren (www.polo.com), Puma (www.puma.com), Dockers (www.dockers.com), Wilson (socks) (www.wilson.com) Lovepats (www.lovepats.com) and others Licensees Recently, Delta expanded its channels and obtained licenses from several leading brands including Barbie, Danskin, Maidenform, Jeffrey Fulvimari, Lovepats, Wilson, Converse (in the US), Diadora, Disney, Barbie, Fox (in Israel), Pierre Cardin (In the UK) and more. Added Value Delta provides its customers with customized vertical solutions, which encompass every stage of production, from initial design and development through manufacture of fabrics, accessories and garments to logistics, distribution and replenishment, giving them the highest quality garments at the best price. We bring our customers the latest innovations, state-of-the- art technologies, a wide variety of product offerings, highly qualified professionals, global know-how and advanced logistics Innovation Delta owns in-house state-of-the-art technologies in knitting, dyeing, finishing, cutting, sewing, seamless, moulding, and more. Our professionals spend a great deal of their time identifying, exploring and developing new technologies. We also provide our customers with the latest in market trends and collaborate closely with them in product design and development Design Delta employs highly creative designers and the most advanced designing tools in its processes. Our designers attend external industry trade shows as well as internal creative workshops, in order to foresee the coming trends and provide our customers with fresh, creative and feasible ideas. Our designs are tailored for each age category and consumer sector. Our design centers are based in the UK, the US and Israel and our Global Development and Marketing department creates synergy among them all. Development Delta's development facilities are located near our design centers so that new ideas may be transformed into viable realities quickly. Our development professionals are highly skilled and experienced and are well connected to global trade research and suppliers in order to provide the best creative solutions Manufacturing Delta is one of very few global vertical manufacturers that develop and produce their own raw materials and finished garments. This ensures quality from beginning to end in the process. Delta manufactures its garments around the globe. Our operations include Company-owned facilities for manufacturing as well as joint ventures. Our manufacturing centers include huge and progressive facilities equipped with the state-ofthe-art cutting and sewing machines. We provide a lot of know-how and experience to our joint venture partners and our package offering is complemented by out-sourcing capabilities Our manufacturing centers include huge and progressive facilities equipped with the state-ofthe-art cutting and sewing machines. We provide a lot of know-how and experience to our joint venture partners and our package offering is complemented by out-sourcing capabilities We manufacture garments in the following countries: Israel, Jordan, Egypt, Turkey, Romania, Bulgaria, Ukraine, Bangladesh, Indonesia, Thailand, China, Macao, Canada, The US, Mexico, Honduras, El-Salvador, Haiti, Guyana, and Colombia. This global manufacturing spread enables us to be flexible in production. We own the most advanced state-of-the-art fabric plants in Israel and Egypt, providing knitted fabrics to the European and US markets. Our fabric plants has knitting facilities with circular knitting machines (overall capacity of 650 tons per month), including small diameters for side seam-free garments. We develop and manufacture fabrics from cotton and synthetic fibers. We have a state-of-the-art knitting department equipped with advanced Swiss and Italian machinery, enabling a 3 million meters per month capacity. We have Jacquard and nonJacquard weaving machines able to produce illion meters per month of woven tapes. We also manufacture bra strips in a wide variety of widths. Our Israeli plant also includes a state-of-the-art dye house with atmospheric/high pressure jet dyeing machines connected by electronic controlling systems. We have a finishing department for open width, tubular and body size fabrics' equipment. We also have a state-ofthe-art dyeing laboratory involving color identification machines (datacolor, colorite), a dispenser for automatic weighting, lab dyeing machines (to provide fit and preciseness), a color lab operated by a controlling system for accurate weighting of colors and chemicals, and a quality assurance laboratory approved by our customers Delta develops modern and unique fabrics from all available yarns in the market, getting input from our customers, designers, exhibitions and professional literature. Delta shares ownership in an elastic factory with the leading elastic-tape manufacturer. The elastic plant works closely with our customers, meeting their requirements and reducing leadtime. The plant is equipped with highly sophisticated systems and machinery to assure high quality levels, productivity and efficiency. We manufacture knitted and woven elastic tapes along with bra straps. Delta is a top supplier of seamless apparel to the leading retailers and brands worldwide. Delta was one of the first to establish a state-of-the-art seamless operation, providing onepiece ultimate comfort garments with unique designs. Our seamless factory includes a large capacity of knitting machines (28 gage 11-17" machines), to cover the full size range of garments from 11" for size S, to 17" for size XL. We operate an advanced dye house and finishing house with a full range of dryers, boarding machines and a heat setting machines. We use 3D shaping along with design through knitting for extra comfort and a superior fit Delta's multiple sock manufacturing operations enable us to provide our customers with competitive prices. We operate Company-owned facilities, joint ventures and out-sourcing operations, which utilize cutting-edge equipment for knitting, toe seaming and finishing processes. Our sock manufacturing capabilities include a state-of-the-art operation in Israel, joint ventures and out-sourcing activities in Turkey, a large facility in Bulgaria (together with local business partners) and joint ventures, two manufacturing centers in Canada and the US (through acquired companies along with joint ventures in the US and in Central America) and out-sourcing activities in the Far-East The Company's sock knitting equipment includes 84-200 needle single and double cylinder machines for a wide range of sock types and fabrications Delta owns a yarn-dyeing factory in Israel that dyes yarns for internal and external use Logistics Delta's service includes logistical support for our customers. We provide our customers with direct links to their computers, EDI, inventory management and replenishment. We have logistic and distribution centers in Israel, Egypt, Hungary, the UK and the US. We control this extensive operation with advanced information technologies and computerized systems through an in-house IT department, which enables Delta to deliver around 30 million pieces a month. Customer Focus Every aspect of Delta's services is tailored for our customers' individual needs: We employ dedicated business teams to provide quick response and strong collaboration. We design manufacturing packages suited to individual price points and product specialties. Our design and development teams are assigned to each customer, according to their particular requirements, markets and specialties. We have located our marketing centers near our customers in order to better understand their markets. Quality Delta is deeply committed to quality and our corporate culture emphasizes, supports and strives to achieve the highest levels of quality at every step of the production process. We monitor suppliers and check the standards of all incoming materials. We have in-line quality control teams for every production line, end-of-line quality check, and finished goods sampling and standards. In addition, we periodically perform audits, including customer's social compliance, AQL standards and quality management systems such as ISO 2000 and LRQA. Finally, our in-house laboratories implement product safety policies, which have been approved by our leading customers HR Delta employs more then 12,000 people around the globe across many different occupations, cultures and religions. Our human resources include highly trained production staff, sophisticated development and marketing professionals, the most innovative and creative designers and an experienced management team. Our manpower is our most precious resource. We invest significant resources to maintain the highest levels of education and training, as well as social support systems and activities and incentivizing options plans in order to provide our workers with a safe, warm and challenging working environment