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 LTD Reports Second Quarter 2006 Results
Strong growth in
revenues and profitability
Second Quarter 2006
Highlights
·Revenues reached $49.7 million during the
quarter, up 21.7% over Q2 2005.
·Strong gross and operating margins of 21.7%
and 13.4%, respectively.
·Income from continuing operations, which
excludes the recently sold AlbaHealth business, was $4.5 million (9.1% of
revenues), or fully diluted EPS of $0.21 in the quarter.
·EBITDA for the quarter was $8.9
million.
·Operating cash flow for the quarter was
$9.2 million.
Misgav, Israel, August 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 second quarter of 2006.
As announced
on April 27, 2006, Tefron closed the sale of its ownership interest in
AlbaHealth. Accordingly, the financial statements of AlbaHealth are accounted
for as discontinued operations. Tefron ceased to consolidate the financial
statements of AlbaHealth from April 27, 2006 onward.
Second
Quarter 2006 Results
Second
quarter revenues reached $49.7 million, representing a 21.7% increase over the
revenues generated during the second quarter of 2005. The growth in revenues
over the second quarter of 2005 was across all of the Company’s product lines.
Second
quarter gross margin increased to 21.7% from 14.1% in the second quarter of
2005. Operating income grew to $6.7 million (13.4% of revenues) compared with an
operating income of $2.3 million (5.6% of revenues) in the second quarter of
2005. Income from continuing operations, which excludes the recently sold
AlbaHealth business, was $4.5 million (9.1% of revenues), or $0.21 per diluted
share in the second quarter of 2006, compared with an income from continuing
operations of $1.1 million (2.7% of
revenues), or $0.06 per diluted share, in the second quarter of 2005.
The improvement in profitability was due to continued
improved operating efficiencies in all of the Company’s divisions. The
efficiency measures included amongst others: increased production and quality
performance and further transfer of sewing capacity toJordan
with lower labor costs.
Total cash
and cash equivalents at June 30, 2006 were at $20.1 million, compared to total
cash and cash equivalents at March 31, 2006 of $11.5 million. The significant
increase in the quarter was primarily due to cash flow of $9.2 million provided
by continuing operating activities.
First Half 2006
Results
Revenues in
the first half of 2006 reached $99.1 million, representing a 16.1% increase over
revenues generated during the first half of 2005. The growth in revenues over
the first half of 2005 was across all of the Company’s product
lines.
The 2006
first half gross margin increased to 23.0% from 13.4% in the first half of 2005.
Operating income grew to $14.1 million (14.3% of revenues) compared to an
operating income of $4.3 million (5.0% of revenues) in the first half of 2005.
Income from continuing operations, which excludes the recently sold AlbaHealth
business, reached $9.8 million (9.9% of
revenues), or $0.47 per diluted share in the first half of 2006, compared
with an income from continuing operations of $1.9 million (2.2% of revenues), or
$0.11 per diluted share, in the first half of 2005.
Management
comment
Mr. Yosef
Shiran, Chief Executive Officer of Tefron, commented, “Following on from our
strong results of the first quarter this year, we are pleased to announce
another successful quarter for Tefron. Most significantly, the increase in our
revenues compared with the comparable period of last year was across all of our
product lines and was accompanied by an improvement in both our gross and
operating margins.”
Mr
Yos
Shiran continued “Our swimwear
product line performed stronger than we had expected in the first half of the
year. As we move beyond the summer, we expect sales of swimwear to significantly
subside in the third quarter and to increase again in the fourth quarter of
2006, due to the seasonality of the swimwear business.”
Mr. Shiran
commented on the conflict situation in which the State of Israel is currently
engaged, “To date, the conflict, which has mainly affected the northern part of
the country, has had a limited effect on our ongoing business and operations
which are primarily located in northern Israel. However, there is a
possibility that the ongoing conflict will not allow us to fully increase
production to meet the growing demand we are seeing in our active-wear product
line, which is beyond our original plans for the third quarter. We believe that
we will achieve our previously announced target for 2006 of mid-teen percentage
growth in revenues and profitability levels higher than those of 2005, at around
the levels seen in the fourth quarter of 2005.”
Dividend
Distribution
The
Company’s Board of Directors declared a dividend of $5 million payable to
shareholders of record as of August 31, 2006.The dividend is scheduled for payment on
September 14, 2006.
Mr. Shiran
commented, “Over the last few quarters, and due to the sale of Alba Health in
the second quarter, our cash reserves have grown considerably. The Board’s
decision to issue this dividend is to share the rewards of our performance with
our shareholders. We still maintain sufficient cash for working capital and
developing our business.”
Conference Call
The Company
will be hosting a conference call today, August 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 0600
INTERNATIONAL Dial-in
Number:+972 3 918
0600
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.
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