MISGAV, Israel, May 15, 2011 /PRNewswire-FirstCall/ -- Tefron
Ltd. (OTC:TFRFF; TASE:TFRN), a leading producer of seamless
intimate apparel and engineered-for-performance (EFPTM) athletic
wear, today announced financial results for the first quarter of
2011.
Commenting on the results, Amit Meridor, Tefron's CEO said: "In
the first quarter of 2011, Tefron succeeded in achieving a
significant increase in the number of customers in the athletic
wear and intimate apparel sectors, in both the branded and mass
market segments. In our core seamless segment, sales rose to
20 million dollars, an increase of
approximately 80% compared to the equivalent quarter in 2010, thus
returning Tefron to the position of global leader in seamless
apparel. Tefron has long maintained technological leadership in the
seamless segment which focuses on intimate apparel and athletic
wear, and we will continue to invest significant efforts in the
technology and the development of new products to maintain the
sales leadership position we now have regained."
Regarding other financial results, Meridor continued, "In the
first quarter of 2011, Tefron achieved positive EBITDA-and we have
yet to realize the full potential of the Nouvelle acquisition. I
can report that Tefron has continued to sustain the very good
operational performance we reached in 2010, and it is our focus now
to increase sales while maintaining that high operational
performance. I am also very pleased to reveal that our customers
are reporting a high level of satisfaction regarding our services,
including our main customer, Victoria's Secret."
Tefron's Chairman, Arnon Tieberg,
commented: "The Company's results during the first quarter were
directly and positively influenced by the successful implementation
of the turnaround plan, together with the acquisition of Nouvelle's
operations, and the support and confidence of the new and present
investors. These factors clearly contributed to the positive EBITDA
and an impressive increase in the level of sales that we are
reporting today. We are particularly pleased that Tefron's
customers are again showing a high level of confidence and
satisfaction with the Company's performance, including with our On
Time Performance and new product developments."
Financial Highlights:
The Company's sales in the first quarter of 2011 amounted to
27.9 million dollars, an increase of
8.4% compared to 25.8 million dollars
during the first quarter of 2010, and an increase of 61% in sales
compared to 17.3 million dollars in
fourth quarter of 2010.
A positive EBITDA of 269 thousand
dollars, compared to a negative EBITDA of 1.2 million dollars in the equivalent quarter
last year.
Cash flows during the first quarter of 2011 amounted to
7.7 million dollars and were
allocated to investments in working capital required for the
increased operations.
Loss in the first quarter of 2011 amounted to 2.3 million dollars, a decrease of 30% compared
to the loss during the first quarter of 2010.
First quarter financial results:
The Company's sales in the first quarter of 2011 amounted to
27.9 million dollars, an increase of
8.4% compared to 25.8 million dollars
during the equivalent period last year, and an increase of 61% in
sales compared to 17.3 million
dollars sales in the fourth quarter of 2010. The main
increase in sales compared to the equivalent quarter in 2010
relates to an increase in sales of intimate apparel and athletic
wear in the seamless segment resulting mainly from initial sales to
new customers following the acquisition of Nouvelle business.
Gross profit in the first quarter of 2011 amounted to
3.9 million dollars (13.8% of sales
of 27.9 million dollars) compared to
0.9 million dollars (3.7% of sales of
25.8 million dollars) during the
equivalent period in the previous year. The increase in gross
profit and in the rate of gross profit is a result of the
successful implementation of the turnaround plan, and from a
decrease in the Company's expenses.
The operating loss in the first quarter of 2011 was 1.9 million dollars compared to operating loss of
3.6 million dollars during the
equivalent period in the previous year.
EBITDA (Earnings Before Finance, Tax, Depreciation and
Amortization costs) amounted to a positive 269 thousand dollars compared to a negative
EBITDA of 1.2 million dollars in the
equivalent period in the previous year.
Cash flow used for operating activities for the first quarter of
2011 totaled 7.7 million dollars,
compared to cash flow used for operating activities of 2.5 million dollars during the equivalent period
in the previous year. The increase in cash flow for operating
activities is a result of the Company's investment in working
capital for the financing of its increase in operation during the
quarter.
The loss in the first quarter of 2011 was 2.3 million dollars, compared to a loss of
3.3 million dollars during the
equivalent period in the previous year.
About Tefron
Tefron is a market leader in the field of apparel, serving
customers in the U.S. and Europe.
Tefron focuses on developing, producing, marketing and selling
undergarments, athletic wear, beach and swimwear. Tefron activities
are divided into two business sectors: "Seamless" design,
development, production and sale of undergarments and athletic
apparel; and "Cut & Sew" design, development, production and
sale of undergarments, swimsuits and athletic apparel. The design
and production are mainly performed in Israel, Jordan and the Far East, while the finished
goods are sold mainly in the U.S. and Europe. Company customers include leading
international players, such as: Victoria's Secret, Hanes Brands
Industries, Reebok, Patagonia, Lululemon Athletica, GAP,
Calvin Klein and Wal-Mart.
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
reran@tefron.com
SOURCE Tefron Ltd