Delta Galil swings to Q3 loss on reorganization

The results include charges of $20.6m. for reorganization expenses and the impairment of fixed assets and goodwill.

delta galil logo 88 (photo credit:)
delta galil logo 88
(photo credit: )
Delta Galil Industries posted a third-quarter net loss of $22.8m. compared with a net profit of $5m. in the same period a year earlier, due to reorganization costs and falling selling prices. Delta, which manufactures apparel for brands such as Calvin Klein, Hugo Boss, Nike, and Ralph Lauren, said on Wednesday that in the three months ended September 30, its losses per share were $1.22 compared with earnings per share of 27 cents, while revenues slipped to $172m. from $176.5m. The results include charges of $20.6m. for reorganization expenses and the impairment of fixed assets and goodwill. Excluding those charges, the net loss for the third quarter was $2.2m., or 12 cents per diluted share. Delta chief executive Arnon Tiberg said the main reason for the worsening performance was the fall in selling prices to customers in Europe and the US. "This erosion reduced Delta's sales and operating profit by approximately $40m. this year, compared to 2004 on an annual basis," he said. In August, the company said it was cutting 1,300 jobs in Central America and 500 in Israel as part of worldwide reorganization plan designed to reverse its losses. Delta expects the restructuring to end in next year's third quarter.