Tefron's shareholders may obtain, free of charge, a printed copy of Tefron's complete audited financial statements for the year 2007 by sending a request to the Company's General Counsel, Michal Baumwald Oron (email: bomichal@tefron.com), or by calling 972-3-9230215.
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Tefron Reports First Quarter 2006 Results
Strong growth in
profitability
First Quarter 2006
Highlights
Revenues
reached $56.8 million during the quarter, up 8.0% over the same period in
2005. On a pro-forma basis, excluding the recently sold AlbaHealth business,
first quarter revenues reached $49.4 million, up 11.0% over the same period in
2005.
Gross
margins reached 24.5% and operating margins reached 14.1% in the quarter. On a
pro-forma basis excluding AlbaHealth, gross margins reached 24.3% and
operating margins reached 15.1% in the quarter.
Net
income reached $5.4 million (9.5% of revenues). On a pro-forma basis excluding
AlbaHealth, net income reached $5.2 million (10.6% of revenues).
Fully
diluted EPS was $0.26 in the quarter compared with $0.07 in the same period in
2005.On a pro-forma basis
excluding AlbaHealth, fully diluted EPS reached $0.25 in the quarter compared
with $0.05 in the same period in 2005.
EBITDA
for the quarter was $10.5 million compared with $5.6 million in the same
period in 2005. On a pro-forma basis excluding AlbaHealth, EBITDA was $9.8
million in the quarter compared with $4.3 million in the same period in 2005.
Misgav, Israel,
May 8, 2006-- Tefron Ltd.
(NYSE:TFR; TASE:TFRN), a leading producer of seamless intimate apparel and
engineered-for-performance (EFPTM) active wear, today announced
financial results for the first quarter of 2006.
As
announced on April 27, 2006, Tefron closed the sale of its ownership interest in
AlbaHealth. Accordingly, Tefron will cease to consolidate the financial
statements of AlbaHealth from the closing date onward. To enable a clearer
picture of Tefron’s financial results, Tefron provides its financial results
below both on a pro-forma basis, excluding the results of AlbaHealth, as well as
on a GAAP basis.Reconciliation
between the results on a GAAP and pro-forma basis is provided in a table
immediately following the Consolidated Statement of Operations.
Tefron also announced
today that it had signed an agreement to form a joint venture in China with Langsha Knitting
Co., Ltd., a leading Chinese textile brand name company, and Itochu
Corporation, a Japanese Fortune-500 company with significant business
interests and vast experience managing multinational joint ventures in
China.The joint venture was formed to
manufacture seamless underwear for the Asian market using Santoni knitting
machines contributed by Tefron USA. Tefron will hold 50.1% of the equity of the
joint-venture. The parties expect the joint venture to become operational within
the next few months.
First Quarter
2006 Results
First
quarter revenues reached $56.8 million, representing an 8.0% increase over the
first quarter of 2005.On a
pro-forma basis excluding AlbaHealth, revenues for the quarter reached $49.4
million, representing an 11.0% increase over the first quarter of 2005. The
growth in revenues over the first quarter of 2005 were mainly due to the growth
in sales of the Company’s active-wear product line, and in particular sales to
Nike for their Nike Pro category, as well as due to the growth in sales of the
Company’s swimwear product line. Revenues from the swimwear product line are
typically the strongest in the first quarter of the year due to the seasonality
of the swimwear business.
On a
GAAP basis, the 2006 first quarter gross margin increased to 24.5% from 15.8% in
the first quarter of 2005. Operating income grew to $8.0 million (14.1% of
revenues) compared with an operating income of $3.2 million (6.1% of revenues)
in the first quarter of 2005. Net income for the quarter reached $5.4 million or
$0.26 per diluted share (9.5% of revenues) compared with a net income of $1.2
million or $0.07 per diluted share (2.3% of revenues) in the first quarter in 2005.
Pro-forma gross margin
in the first quarter of 2006 increased to 24.3% from 12.8% in the first quarter
of 2005. Pro-forma operating income grew to $7.5 million (15.1% of revenues)
compared to a pro forma operating income of $2.0 million (4.5% of revenues) in
the first quarter of 2005. Pro-forma net income reached $5.2 million or $0.25
per diluted share (10.6% of
revenues) compared with a pro-forma net income of $0.8 million or $0.05
per diluted share (1.8% of revenues) in the first quarter of 2005.
The improvement in profitability was due
to continuous improved operating efficiencies in all of the Company's divisions
and due to a significant reduction in the Company's financial expenses. The
efficiency measures include amongst others: increased production and quality
performance, and further transfer of sewing capacity to Jordan
with lower labor costs. Financial expenses dropped mainly due to the reduction
of short term bank debt following the public offering performed on the Tel-Aviv
Stock Exchange during the first quarter of 2006".
Mr.
Yos Shiran, Chief Executive Officer
of Tefron, commented, “We have demonstrated a solid start to 2006, continuing on
our growth strategy from last year. Most significantly, the increase in our
revenues was accompanied by an improvement in both our gross and operating
margins.”
Mr.
Shiran, continued, “Our first quarter results reflect strength in our
active-wear and swimwear product lines in accordance with our strategic
plan.We are looking for a
significant increase in our active-wear revenues in the second half of the year
as we work to further expand our product lines while entering into new
categories and increase the visibility of our EFP™ technology.”
Mr.
Shiran commented on the Chinese joint venture, “This marks our entrance into the
Asian market, and in particular, the fast growing Chinese market. The joint
venture provides us with facilities, manpower, management and infrastructure in
China. It also provides us with an
existing sales and distribution channel through a leading brand. We see
significant long-term potential in this joint venture.”
Conference Call
The
Company will be hosting a conference call today, May 8, 2006 at 10:00am EDT. On
the call, management will review and discuss the results, and will be available
to answer investor questions.
To
participate, please call one of the following teleconferencing numbers.Please begin placing your calls at least
5 minutes before the conference call commences. If you are unable to connect
using the toll-free numbers, please try the international dial-in
number.
US Dial-in Number: 1 866 860
9642
UK Dial-in Number: 0 800 917
9141
ISRAEL Dial-in Number: 03
918 0609
INTERNATIONAL Dial-in
Number:+972 3 918
0609
For
those unable to listen to the live call, a replay of the call will be available
for three months from the day after the call in the investor relations section
of Tefron’s website, at: www.tefron.com
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, Nike, The Gap, Banana
Republic, Target, Warnaco/Calvin Klein, Patagonia, Reebok 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, swim wear, beach
wear and active-wear.The Company’s
Healthcare Division manufactures and sells a range of textile healthcare
products.
This
press release contains certain forward-looking statements with respect to the
Company's business, financial condition and results of operations. 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, fluctuations in
product demand, changing economic conditions, lower prices 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.
2006 Tefron All Rights Reserved