Tefron Announces Completion of Shareholder Rights Issue Success of Fund Raising Demonstrates Shareholder Confidence in Management's Turnaround Program
MISGAV, Israel, March 29, 2010 /PRNewswire-FirstCall/ -- Tefron (OTC: TFRFF.OB, TASE: TFRLF), a manufacturer of boutique-quality seamless intimate apparel, active wear and swim wear today announced that it had completed its two stage fund raising program, raising gross proceeds of approximately $4 million. In the first stage, the rights offering yielded gross proceeds of $2.9 million. Tefron issued the subscribing shareholders 754,384 ordinary shares at a per share price of $3.8. In the second stage of the fund raising, Tefron's major shareholder, Norfet, Limited Partnership, has agreed that it or its designee(s) would purchase shares from Tefron in a private placement following the rights offering at a price per share identical to the price per share in the rights offering. Based on the amount raised by Tefron in the rights offering, the amount invested by Norfet's designees was approximately $1.1 million. Tefron intends to use the net proceeds from the fund raising program towards financing of general corporate purposes, including working capital, labor, energy and raw material costs in accordance with Tefron's needs and in accordance with resolutions of Tefron's board of directors from time to time.
Commenting on the rights issue, CEO Amit Meridor said, "We are pleased with the outcome of the rights issue indicating shareholder trust in our turnaround program. In addition, I am pleased to announce that we have been able to renegotiate the terms of our main facilities leasing contract. The new agreement will achieve significant savings in rental and related costs per year. The proceeds from the fund raising, combined with the bank refinancing program which was signed earlier this month, and the new facilities lease will contribute to an important strengthening of Tefron's financial position starting in 2010."
Mr. Meridor continued, "Now that the financial restructuring is in place, our focus in 2010 will be on aggressively restructuring our manufacturing processes to ensure strict quality control, shortened lead times, and on-time delivery. In order to achieve these objectives, we are in the process of rebuilding all our manufacturing activities to be more cost efficient and responsive to customer needs and time requirements. We also plan to further strengthen our management team with the appointment of several industry specialists with extensive sector and managerial expertise.
Looking forward, Mr. Meridor projected that "as the implementation of more efficient manufacturing processes soon begins to yield greater customer satisfaction and higher sales, our next goal will be better management of Tefron's innovation process, focusing on closer coordination between the R&D and manufacturing requirements and on understanding the markets of our customers. Tefron has an exceptionally strong base of international name-brand customers and through the focused efforts of our teams to improve the efficiency and profitability of the R&D and manufacturing functions, our customers will enjoy higher quality and more innovative products, as well as more consistent, dependable customer service which will both serve to re-establish Tefron's leadership position in the industry."
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, Nike, lululemon athletica, Warnaco/Calvin Klein, Walmart Stores Inc, The Gap, J. C. Penney, Maidenform, Patagonia, Reebok, and El Corte Ingles, 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.
Contacts Company Contact: Eran Rotem Chief Financial Officer +972-4-990-0881 email@example.com
SOURCE Tefron Ltd