TEFRON LTD. 
By MISGAV,
First Quarter 2010 Results
Tefron reported revenues for the first quarter of 2010 of
Commenting on the results, CEO
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, The Gap,
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 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.
TABLE 1: SALES BY SEGMENTS
Three months ended Three months ended Year ended December
March 31, 2010 March 31, 2009 31, 2009
USD USD USD
Segment Thousands % of total Thousands % of total Thousands % of total
Cut & sew 14,349 55.7% 25,334 53.9% 53,232 46.1%
Seamless 11,424 44.3% 21,651 46.1% 62,306 53.9%
Total 25,773 100.0% 46,985 100.0% 115,538 100.0%
TABLE 2: SALES BY PRODUCT LINE
Three months Three months Year ended
ended March ended March December
31, 2010 31, 2009 31, 2009
Product line USD % of USD % of USD % of
Thousands total Thousands total Thousands total
Intimate Apparel 13,014 50.5% 20,017 42.6% 64,143 55.5%
Active wear 2,329 9.0% 8,743 18.6% 21,533 18.6%
Swimwear 10,430 40.5% 18,225 38.8% 29,862 25.8%
Total 25,773 100.0% 46,985 100.0% 115,538 100.0%
Swimwear growth -42.8%
Intimate Apparel growth -35.0%
Active wear -73.4%
CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands
March 31, December 31,
2010 2009 2009
Unaudited Audited
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 326 $ 211 $ 1,904
Short-term investments 737 1,149 737
Trade receivables, net 14,974 30,595 14,597
Other accounts receivable and
prepaid expenses 2,971 4,312 2,892
Inventories 21,348 26,026 19,778
Total current assets 40,356 62,293 39,908
NON- CURRENT ASSETS:
Subordinated note - 2,400 -
Deferred taxes, net 1,220 - 1,409
Property, plant and equipment,
net 54,706 62,613 56,920
Intangible assets, net 857 1,921 960
56,783 66,934 59,289
Total assets $ 97,139 $ 129,227 $ 99,197
CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands (except share and per share data)
March 31, December 31,
2010 2009 2009
Unaudited Audited
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Short-term bank credit $ 2,971 $ 24,262 $ 25,847
Trade payables 18,215 24,769 15,042
Other accounts payable and accrued
expenses 4,346 6,970 5,666
Total current liabilities 25,532 56,001 46,555
LONG-TERM LIABILITIES:
Long term loans from banks (net of
current maturities) 19,790 - -
Other accounts payable 1,454 1,432 1,838
Accrued severance pay, net 648 1,413 729
Deferred taxes, net 1,906 6,688 3,080
Total long-term liabilities 23,798 9,533 5,647
SHAREHOLDERS' EQUITY:
Share capital -
Ordinary shares 10,351 7,518 7,518
Additional paid-in capital 108,782 107,161 107,522
Accumulated deficit (63,920) (43,594) (60,666)
Less - 99,740 Ordinary shares in
treasury, at cost (7,408) (7,408) (7,408)
Other capital reserve 4 (231) 29
47,809 63,446 46,995
Employee stock options in subsidiary - 247 -
Total shareholders' equity 47,809 63,693 46,995
Total liabilities and shareholders'
equity $ 97,139 $ 129,227 $ 99,197
CONSOLIDATED STATEMENTS OF OPERATIONS
U.S. dollars in thousands (except share and per share data)
Year
Three months ended ended
December
March 31, 31,
2010 2009 2009
Unaudited Audited
Sales $ 25,773 $ 46,985 $ 115,538
Cost of sales 24,829 41,520 119,339
Gross profit (loss) 944 5,465 (3,801)
Selling, general and administrative
expenses 4,519 5,798 17,621
Other income - - (496)
Operating loss (3,575) (333) (20,926)
Loss from early repayment of
subordinated note receivable - - (1,285)
Financial expenses (income), net 538 (494) 512
Income (loss) before taxes on income (4,113) 161 (22,723)
Taxes on income (tax benefit) (859) 16 (5,330)
Net income (loss) $ (3,254) $ 145 (17,579)
Basic and diluted net earnings
(losses) per share:
Basic net earnings (losses) per share $ (1.5) $ 0.1 $ (8.1)
Diluted net earnings (losses) per
share $ (1.5) $ 0.1 $ (8.1)
Weighted average number of shares used
for computing basic earnings (losses)
per share 2,178,746 2,137,178 2,137,178
Weighted average number of shares used
for computing diluted earnings
(losses) per share 2,178,746 2,137,178 2,137,178
CONSOLIDATED STATEMENTS OF CASH FLOWS
U.S. dollars in thousands
Year
Three months ended ended
December
March 31, 31,
2010 2009 2009
Unaudited Audited
Cash flows from operating activities
Net income (loss) $ (3,254) $ 145 $ (17,393)
Adjustments to reconcile net income
(loss) to net cash provided by (used in)
operating activities:
Depreciation of property, plant and
equipment and intangible assets 2,340 2,213 9,256
Compensation related to options granted
to employees 70 57 171
Impairment reversal of property, plant
and equipment and intangible assets - - (496)
Inventory write-off 297 480 2,808
Extinguishment of contingent
consideration against profit or loss - - (399)
Change in employee benefit liabilities,
net (81) (756) (850)
Loss from early repayment of subordinated
note receivable - - (75)
Deferred taxes, net (985) (209) (5,364)
Loss (gain) on disposal of property,
plant and equipment - - 1,285
Decrease (increase) in trade receivables,
net (377) (7,149) 8,849
Decrease (increase) in other accounts
receivable and prepaid expenses (294) 499 1,497
Decrease (increase) in inventories (1,867) 5,619 9,730
Increase (decrease) in trade payables 3,173 (398) (10,125)
Decrease in other accounts payable and
accrued expenses (1,514) (1,052) (428)
Net cash used in operating activities (2,496) (568) (1,476)
Cash flows from investing activities
Purchase of property, plant and equipment (22) (232) (611)
Purchase of intangible assets (1) (26) (75)
Contingent consideration paid - - (271)
Proceeds from sale of property, plant and
equipment 4 18 18
Proceeds from early repayment loss from
subordinated note receivable - - 1,715
Net cash provided by (used in) investing
activities (19) (240) 776
CONSOLIDATED STATEMENTS OF CASH FLOWS
U.S. dollars in thousands
Year
Three months ended ended
December
March 31, 31,
2010 2009 2009
Unaudited Audited
Cash flows from financing activities
Short-term bank credit, net $ (11,275) $ 491 $ 4,923
Repayment of long-term bank loans (11,601) (1,038) (3,885)
Proceeds from long-term bank loans 20,000 - -
Issue of shares (net of issue
expenses) 3,813 - -
Net cash provided by (used
in)financing activities 937 (547) 1,038
Increase (decrease) in cash and cash
equivalents (1,578) (1,355) 338
Cash and cash equivalents at the
beginning of the period 1,904 1,566 1,566
Cash and cash equivalents at the end
of the period $ 326 $ 211 $ 1,904
Contacts
Company Contact:
Eran Rotem
Chief Financial Officer
+972-4-990-0881
reran@tefron.com
SOURCE Tefron Ltd
