MISGAV, Israel, June 16 /PRNewswire-FirstCall/ -- Tefron Ltd. (OTC:TFRFF; TASE:TFRN), a leading producer of seamless intimate apparel and engineered-for-performance (EFPTM) active wear, announced that it is currently in advanced negotiations with a number of third parties to establish a joint venture in Egypt ("JV") to manufacture products on behalf of the Company's customers. The JV would be established through an Egyptian company ("Tefron Egypt") in which the Company will hold a 50% interest and the remaining interests would be held by three other partners.

Under the proposed arrangement, Tefron would transfer to Tefron Egypt equipment with a value of approximately US $1 million and the other partners would invest in Tefron Egypt approximately US $1 million in cash that would be used for investments and working capital required to commence the activities of Tefron Egypt. In addition, Tefron Egypt would acquire additional services from the company.

It should be emphasized that there is no guarantee that the JV will be established or that the negotiations among the parties will lead to a binding agreement for the establishment of the JV.

About Tefron

Tefron manufactures boutique-quality everyday seamless intimate apparel, active wear and swimwear sold throughout the world by such name-brand marketers as Victoria's Secret, Nike, Target, The Gap, J.C. Penney, Maidenform, lululemon Athletica, Warnaco/Calvin Klein, Patagonia, Reebok, Swimwear Anywhere, Abercombie&Fitch, and El Corte Englese, 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, swimwear, 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.

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 failure of any of our principal customers to satisfy its payment
      obligations to us;

    - 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;

    - the fluctuations 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
    +972-4-990-0803
    reran@tefron.com

SOURCE Tefron Ltd