2014

Tefron Achieves Continued Improvements in Sales with a 67% Growth in Revenue in the Third Quarter of 2011 Sales for First Nine-Months of 2011 Reach $86.9 Million Equivalent to an Annualized Rate of $115 Million

MISGAV, Israel, November 23, 2011 /PRNewswire/ --

Tefron Ltd. (OTC:TFRFF; TASE:TFRN), a leading producer of seamless intimate apparel and engineered-for-performance (EFPTM) active wear, today announced financial results for the third quarter of 2011.  

Commenting on the results, Amit Meridor, Tefron's CEO, said: "I am pleased to report a significant increase in the strength of sales at Tefron in the third quarter.  We saw very good strength in sales in the intimate apparel and active wear however, of particularly note was the steep 75% rise in sales in "seamless" apparel in the third quarter where we have reestablished ourselves as global leaders in the sector. We also achieved significant results in bringing in new Mass-Market customers for the retail sector in North America. We are continuing to invest significantly in developing technologies. During the third quarter we deepened development of four groundbreaking new technologies, which will serve as a basis for continued growth of the company in the coming years."

Commenting on the sales growth, Arnon Tiberg, Tefron's Chairman, said, "Success in significantly increasing the number of new customers for Tefron worldwide, catapulted our sales volume in the third quarter over the equivalent period last year. In addition to the rise in Mass Market sales in the North American market, we have had a strong growth in sales supplied from the Far East. Among the many factors contributing to the important broadening of our customer base are the improvements over the past year in the structure of our global sales operation, the introduction this year of new products in active wear and intimate apparel, and the development of new sales channels, including Home Shop Networking on TV channels and websites on the Internet."

Financial highlights for the nine month period ended September 30, 2011

•    Gross profit increased by $9.1 million to $13.8 million (15.9% of sales) in the first nine months of 2011 versos $4.7 million (6.9% of sales) in the first nine months of 2010.

•    EBITDA grew $3.4 million to a positive EBITDA of $1.7 million in the nine months of 2010 versos a negative EBITDA of $1.7 million in the nine months of 2010.

•    Operating loss was reduced by 58.2% to $3.7 million in the first nine months of 2010 from $8.9 million in the first 9 months of 2011.

Nine-month period ended September 30 2011

Sales in the first nine-months of 2011 totaled $86.9 million, an increase of 26.5% compared with $68.7 million during the same period last year.   Sales in the "seamless" sector jumped 78% compared to the same period last year.  The nine-month sales reflect an annual sales rate of more than $115 million, compared to total sales of $86 million in 2010.

Gross profit for first nine-months of 2011 totaled $13.8 million (15.9% of sales) compared with gross profit amounting to $4.7 million (6.9% of sales) in the same period last year. The significant improvement in gross profit and gross profit margin in the first nine-months of 2011 was attributed to the strong increase in sales and the success of the turnaround plan in reducing the cost of sales.

Operating loss for the first nine-months of 2011 declined by 58.2% and totaled $3.7 million, compared to an operating loss of $8.9 million in the same period last year. The strong decline in the operating loss was attributed to the achieved results of the turnaround plan and the increase in sales, as well as a significant decrease in depreciation expenses.

EBITDA during the first nine months of 2011 rose by $3.4 million dollars turning a negative $1.7 million EBITDA for the first nine-months of 2010 into a positive EBITDA of $1.7 million for the first nine months of 2011.  The improvement in EBITDA is also a result of the improvement in sales and the successful implementation of the turnaround plan which directly contributed to greater efficiencies and less wastage in production, a resulting shortening of the manufacturing process and a fall in manufacturing costs, as well as reduced the lead time to customers. This improvement was achieved despite the increase in cost of part of the raw materials used by the company.

Cash flow - In the first nine months, Tefron had cash used for operating activities of $7.1 million, in the first nine-months of 2011 compared to cash flow used for operating activities of $3.4 million in the same period last year. The increase in cash flow used in operating activities is primarily a result of the investment in working capital, mainly increased customers and inventory, in order to finance the increased activity of the company.

Net loss in the first nine-months of 2011 was reduced to $4.6 million, compared with a net loss of $8.3 million during the same period last year.

Third quarter results 2011

Sales in the third quarter of 2011 totaled $30.1 million, a 67.4% increase compared with sales of $18.0 million in the third quarter of 2010. Most notably, the company recorded an increase of 75% in sales of "seamless" apparel, compared with same quarter last year.  Most of the increase in sales was attributed to higher sales in the intimate apparel and active wear product lines.  

Gross profit for the third quarter of 2011 totaled $4.6 million (15.2% of sales), compared to gross profit of $0.6 million (3.6% of sales) in the third quarter of 2010.

Third quarter operating loss for 2011 declined by 82% and totaled $0.5 million, compared to an operating loss of $3.1 million in the same period last year.

EBITDA for the third quarter improved by $1.5 million to $883 thousand, compared with negative EBITDA of $589 thousand dollars for the same period last year.

In the third quarter of 2011, Tefron recorded positive cash flow derived from operating activities of $2.1 million, compared to $0.8 million in the same period last year.  The significant improvement in cash flow in the third quarter of 2011 was mainly due to the reduction in losses.

The third quarter net loss for 2011 amounted to $0.5 million, compared with a net loss of $3.1 million in the equivalent quarter of 2010.

About Tefron

Tefron manufactures boutique-quality everyday seamless intimate apparel, active wear and swim wear sold throughout the world by such name-brand marketers as Victoria's Secret, Warnaco/Calvin Klein, Wal-Mart Stores Inc, The Gap, Hanes Brands Industries, J. C. Penney, TJMaxx, Patagonia, Reebok, and TMGTV, as well as other well known retailers and designer labels.  The company's product line includes knitted briefs, bras, tank tops, boxers, leggings, crop, T-shirts, nightwear, bodysuits, swim wear, beach wear and active-wear.

This press release contains certain forward-looking statements, within the meaning of Section 27A of the US Securities Act of 1933, as amended, Section 21E of the US Securities Exchange Act of 1934, as amended, and the safe harbor provisions of the US Private Securities Litigation Reform Act of 1995, with respect to the Company's business, financial condition and results of operations. We have based these forward-looking statements on our current expectations and projections about future events.  

Words such as "believe," "anticipate," "expect," "intend," "will," "plan," "could," "may," "project," "goal," "target," and similar expressions often identify forward-looking statements but are not the only way we identify these statements.  Except for statements of historical fact contained herein, the matters set forth in this press release regarding our future performance, plans to increase revenues or margins and any statements regarding other future events or future prospects are forward-looking statements.

These forward looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those contemplated in such forward-looking statements, including, but not limited to:

•    the effect of the worldwide recession on our sales to our customers in the United States and in Europe and on our ability to finance our operations;

•    our customers' continued purchase of our products in the same volumes or on the same terms;

•    the cyclical nature of the clothing retail industry and the ongoing changes in fashion preferences;

•    the competitive nature of the markets in which we operate, including  the ability of our competitors  to enter into and compete in the  seamless market in which we operate;

•    the potential adverse effect on our business resulting from our international operations, including increased custom duties and import quotas (e.g. in China, where we manufacture for our swimwear division).

•    fluctuations in inflation and currency rates;

•    the potential adverse effect on our future operating efficiency resulting from our expansion into new product lines with more complicated products, different raw materials and changes in market trends;

•    the purchase of new equipment that may be necessary as a result of our expansion into new product lines;

•    our dependence on our suppliers for our machinery  and the maintenance of our machinery;

•    fluctuations in the costs of raw materials;

•    our dependence on subcontractors in connection with our manufacturing process;

•    our failure to generate sufficient cash from our operations to pay our debt;

•    political, economic, social, climatic risks, associated with international business and relating  to operations in Israel;

as well as certain other risks detailed from time to time in the Company's filings with the Securities and Exchange Commission. The Company undertakes no obligation to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

Tefron Ltd.

Consolidated balance sheets

                                                      As of            As of
                                                   September 30, December 31,
                                                  2011      2010        2010
                                                    Unaudited        Audited
                                                        Dollars thousands
    Current assets
 
    Cash                                          5,652    1,948       9,361
    Investment in securities available for sale     686      700         731
    Trade receivables                            13,671    9,430       9,339
    Other receivables                             2,072    2,080       1,878
    Inventory                                    17,475   15,625      16,664
 
                                                 39,556   29,783      37,973
 
    Non current assets held for sale              5,226      176       2,088
 
                                                 44,782   29,959      40,061
 
    Non current assets
 
    Deferred taxes, net                           1,149    1,488         972
    Property, plant and equipment, net           32,072   50,997      38,936
    Software                                        191  (*) 243     (*) 280
    Goodwill, backlog and other 
    intangible assets                             1,778  (*) 417   (*) 2,503
 
                                                 35,190   53,145      42,691
 
                                               $ 79,972 $ 83,104    $ 82,752
 
    * Reclassified
 


                                                                      
                                                   As of               As of
                                                September 30,    December 31,
                                            2011            2010        2010
                                                 Unaudited           Audited
                                                   Dollars thousands
    Current liabilities
 
    Credit from banks                      7,197          25,260       6,194
    Trade payables                        13,615           8,981      11,864
    Other payables                         4,695           3,454       8,450
 
                                          25,507          37,695      26,508
 
    Non current liabilities
 
    Long-term bank loans                  22,094               -      19,818
    Employees benefits, net                  445             486         516
    Long-term institutions payable             -           1,473           -
    Deferred taxes, net                        -             635           -
 
                                          22,539           2,594      20,334
 
    Equity attributable to the
    equity holders of the Company
 
    Share capital                         19,818          10,351      19,818
    Additional paid-in capital           107,948         108,942     107,204
    Accumulated deficit                  (88,486)        (69,138)    (83,803)
    Treasury shares                       (7,408)         (7,408)     (7,408)
    Capital reserve for financial
    assets available for sale                (57)           (122)        (91)
    Capital reserve for hedging
    transactions                             (79)              -           -
    Capital reserve for
    transactions with a controlling
    shareholder                              190             190         190
 
    Total capital                         31,926          42,815      35,910
 
                                        $ 79,972        $ 83,104    $ 82,752
 


                               For the nine        For the three       Year
                               months ended         months ended      ended
                                                                   December
                                 September 30,      September 30,        31
                                2011      2010     2011      2010      2010
                                           Unaudited                Audited
                                          In dollars thousands
 
    Sales                    $86,885   $68,709  $30,119   $17,990  $ 86,044
                                                                  
    Cost of sales, net*       73,088 (*)63,981   25,541 (*)17,341 (*)83,990
 
    Gross profit              13,797     4,728    4,578       649     2,054
 
    Development expenses,                                               
    net (*)                    2,782  (*)1,946      731    (*)427  (*)2,869
    Selling and marketing
    expenses                  12,154     9,123    3,636     2,527    11,850
    General and
    administrative expenses    2,583     2,440      756       642     4,050
    Other expenses                 -       133        -       133     6,091
 
    Operating loss            (3,722)   (8,914)    (545)   (3,080)  (20,806)
 
    Financial income             498       271      484         7        30
    Financial expenses        (1,523)   (2,048)    (557)     (876)   (2,379)
 
    Financial expenses, net   (1,025)   (1,777)     (73)     (869)   (2,349)
 
    Loss before taxes on
    income                    (4,747)  (10,691)    (618)   (3,949)  (25,155)
    Tax benefit                   18     2,365       89        87     2,469
 
    Loss                     $(4,558)  $(8,326)   $(529)  $(3,077) $(22,686)
 
    Loss per share attribute 
    to the Company's 
    shareholders (in dollars)
 
    Basic and diluted loss
    per share                  $(0.7)    $(2.9)   $(0.1)    $(1.0)    $(7.7)
     
    EBITDA                   $ 1,658   $(1,743)    $883     $(589)  $(6,630)


    
    * Reclassified

Contacts
Company Contact:            
Eran Rotem                
Chief Financial Officer                
+972-4-990-0881        
reran@tefron.com     


SOURCE Tefron Ltd




Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

 

PR Newswire Membership

Fill out a PR Newswire membership form or contact us at (888) 776-0942.

Learn about PR Newswire services

Request more information about PR Newswire products and services or call us at (888) 776-0942.