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.
Tefron LTD Reports 4th Quarter and Full Year 2009 Resul... (28/03/10) Read
Tefron Reports First Quarter 2006 Results... (08/05/06) Read
Tefron Reports Fourth Quarter and Full Year 2005 Result... (08/03/06) Read
Tefron LTD. Reports Third Quarter 2005 Results... (07/03/06) Read
Tefron LTD. Reports 2005 Second Quarter and Six Month... (09/08/05) Read
Tefron LTD. Reports First Quarter 2005 Results... (09/05/05) Read
Tefron LTD Reports Fourth Quarter and full year 2006 Results
2006
Represents a Year of Record Revenue and Strong Profitability
---
Full Year
2006 Highlights
·Record annual revenues from continuing
operations of $188.1 million, up 9.8% from 2005.
·Increase in gross, operating and income
from continuing operations margins to 22.8%, 13.8% and 9.7%,
respectively.
·EBITDA for 2006 reached $35.1 million,
representing a 35.8% increase over 2005.
·Fully
diluted EPS from continuing operations was $0.88 in 2006 compared with $0.47 in
2005.
·2006
year-end net bank debt of $5.2 million, compared with $49.0 million at year-end
2005.
·A
total of $10 million in dividends during 2006.
Fourth Quarter Highlights
·Quarterly revenues from continuing
operations of $50.0 million, up 8.7% from the fourth quarter of 2005 and the
highest quarterly revenue in over six years.
·Gross, operating and income from continuing
operations margins for the quarter were 22.2%, 12.9% and 9.3%,
respectively.
·Quarterly income from continuing operations
of $4.7 million, up 14.9% from the fourth quarter of
2005.
·Fully diluted EPS from
continuing operations was $0.22 in the quarter compared with $0.23 in the fourth
quarter of 2005.
Misgav, Israel, February 20, 2007 - 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 fourth quarter and full year 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, and the financial results described below
therefore do not include the financial results of AlbaHealth. Tefron ceased to
consolidate the financial statements of AlbaHealth commencing April 27,
2006.
Fourth Quarter 2006
Results
Fourth
quarter revenue reached $50.0 million, representing an 8.7% increase over fourth
quarter 2005 revenues of $46.0 million. The increase in revenues over the fourth
quarter of 2005 was driven by a growth in sales of the active-wear and swimwear
product lines, which was partly offset by a decrease in sales of our intimate
apparel products.
Fourth
quarter gross margin was 22.2% compared with 22.8% in the fourth quarter of
2005. Operating income totaled $6.4 million (12.9% of revenues), compared with
$7.0 million (15.3% of revenues) in the fourth quarter of 2005, a decrease of
8.7%.
The decline in operating margin during the fourth quarter
was primarily due to the effect of the significant strengthening of the Israeli
Shekel versus the US Dollar, and extraordinary shipping expenses following a
delay in deliveries caused primarily by the impact of the hostilities in the
northern part ofIsrael during
the third quarter of 2006.
Full year
2006 revenue was $188.1 million, representing a 9.8% increase over 2005 revenues
of $171.3 million. The increase in revenues over 2005 was driven by a growth in
sales in the active wear and swimwear product lines.
Full year
2006 gross margin increased to 22.8%, compared with 17.3% as reported in 2005.
Operating income grew to $25.9 million (13.8% of revenues) compared with an
operating income of $16.1 million (9.4% of revenues) as reported in 2005, an
increase of 60.4%.Income from continuing operations in 2006 was $18.3
million (9.7% of revenues) or
$0.88 per diluted share, an increase of 111.1% from $8.7 million (5.0% of
revenues) or $0.47 per diluted share in 2005.
The increase
in profitability follows continued improvements in operating efficiencies and
cost controls in all of the Company’s divisions. Improved operating efficiencies
resulted from increased production and quality performance and further transfer
of sewing capacity to Jordan
.
Management
comment
Mr.
Yos Shiran, Chief Executive Officer
of Tefron, commented, “2006 was a very successful year for us in which our
efforts over the past few years paid off. We achieved record revenue from
continuing operations and strong profitability while generating significant cash
flow. We began 2007 with a strong position which should allow us to capitalize
on market trends and growth opportunities that may arise.”
Mr. Shiran
continued, “Our active-wear and swimwear product lines continued to grow both
during the fourth quarter and during the year. Our intimate apparel business
maintained steady revenues during the year, in line with our
expectations.”
Mr. Shiran
added, “Active-wear sales were below our initial expectations for 2006 due to a
shift in timing of product flows by Nike. We anticipate a temporary decline in
active-wear sales in the first half of 2007, and a strengthening of active-wear
sales in the second half of 2007 as Nike introduces its next generation of
performance apparel. We believe our relationship with Nike is strong, and it
remains a central part of our strategy driving our long-term growth in the
active wear.”
Mr. Shiran
added, “Overall, in the first half of 2007 we expect to see a slight decline in
revenue as compared to the first half of last year due to the anticipated
decline in active-wear revenue. Additionally, we expect a temporary reduction in
operating margins in the first half of the year as compared with the first half
of last year, given the ongoing weakness of the dollar versus the Israeli
shekel, as well as pricing pressure in older collections of our intimate apparel
product line. We expect this will be followed by increased sales and improved
operating margins in the second half of the year. Overall, we expect a higher
revenue level in 2007 compared with 2006.”
Mr. Shiran concluded, “We believe that we have
built a solid business with strong growth drivers, and in 2006 we saw the fruits
of our strategy. This year, we intend to continue to build on those strengths
and are actively considering new growth drivers to propel our business in the
coming years.”
Conference Call
The Company
will be hosting a conference call today, February 20, 2007at 10:00am
EST. 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: 1 888 668
9141
UK Dial-in Number: 0 800 917
5108
ISRAEL Dial-in Number: 03 918 0687
INTERNATIONAL Dial-in Number:+972 3 918
0687
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, Target, The Gap, Banana Republic, J.
C. Penney, lululemon, 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, 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:
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).
the
potential adverse effect on our future operating efficiency resulting from our
expansion into new product lines with more complicated products and
different raw materials;
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;
fluctuations in
inflation and currency; and
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.
2006 Tefron All Rights Reserved