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 Fourth Quarter and Full Year 2005 Results
Strong growth in
revenues and profitability
2005 Highlights
Revenues reached $205.6 million during
2005, up 12.5% over 2004. On a pro-forma basis excluding AlbaHealth and the
effects of its sale by Tefron, revenues reached $171.3 million, up 15.3% over
2004.
Gross margins reached 19.1% and operating
margins reached 6.5% in 2005. On a pro-forma basis, excluding AlbaHealth and
the effects of its sale by Tefron, gross margins reached 17.3% and operating
margins reached 9.1% in 2005.
Fully diluted EPS was $0.18 in 2005
compared with ($0.44) in 2004.On
a pro-forma basis excluding AlbaHealth and the effects of its sale by Tefron,
fully diluted EPS reached $0.47 in 2005 compared with $(0.56) in 2004.
EBITDA in 2005 was $29.9 million compared
with $11.8 million in 2004. On a pro-forma basis excluding AlbaHealth and the
effects of its sale by Tefron, EBITDA in 2005 was $25.9 million compared with
$6.1 million in 2004.
Fourth Quarter
Highlights
Revenues reached $55.1 million during the
quarter, up 23.4% over the same period in 2004. On a pro-forma basis,
excluding AlbaHealth and the effects of its sale by Tefron, fourth quarter
revenues reached $46 million, up 26.7% over the same period in
2004.
Gross margins reached 23.3% and operating
margins reached 3.4% in the quarter. On a pro-forma basis excluding AlbaHealth
and the effects of its sale by Tefron, gross margins reached 22.8% and
operating margins reached 15.3% in the quarter.
Fully diluted EPS was ($0.12) in the
quarter compared with ($0.24) in the same period in 2004.On a pro-forma basis excluding
AlbaHealth and the effects of its sale by Tefron, fully diluted EPS reached
$0.21 in the quarter compared with ($0.26) in the same period in 2004.
EBITDA for the quarter was $10.8 million
compared with $0.2 million in the same period in 2004. On a pro-forma basis
excluding AlbaHealth and the effects of its sale by Tefron, EBITDA was $10.2
million in the quarter compared with ($1.0) in the same period in 2004.
Misgav, Israel, March 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 fourth quarter and full year 2005.
As announced on December 22, 2005, Tefron’s
management has authorized the exercise by Tefron of its option to require
AlbaHealth to purchase Tefron’s ownership interest in AlbaHealth. Management
currently expects that the transaction will close by the end of the first
quarter of 2006, although there can be no assurance that the transaction will be
completed within that time period, or at all. Upon completion of the
transaction, Tefron will cease to consolidate the financial results of
AlbaHealth.
The pro-forma results exclude the results of
AlbaHealth, as well as and an additional $5.6 million, almost all of which in
non-cash expenses and $1.0 million of tax liability, that were recorded in the
fourth quarter of 2005 as a result of the anticipated AlbaHealth transaction.
Reconciliation between the results on a GAAP and pro-forma basis is provided in
a table immediately following the Consolidated Statement of Operations.
Fourth
Quarter 2005 Results
Fourth
quarter sales reached $55.1 million, representing a 23.4% growth over the same
period of last year.On a pro-forma
basis, sales for the quarter reached $46.0 million representing a 26.7% increase
over the fourth quarter of 2004.
Pro-forma gross margin in the fourth quarter
increased to 22.8% from 2.7% in the fourth quarter of 2004. Pro-forma operating
income grew to $7.0 million (15.3% of revenues) compared to an operating loss of
$3.1 million in the fourth quarter of 2004.
The improvement in profitability was due to the
increased contribution of higher margin products and the continuous improved
operating efficiencies in all of the Company’s divisions. These efficiency
measures included amongst others: increased production and quality performance
and further transfer of sewing capacity to Jordan with lower labor costs.
On a pro-forma basis, net income reached $4.1
million (or $0.21 per diluted share) which represented 8.8% of fourth quarter
revenues, compared with a net loss of $4.5 million (or ($0.26) per diluted
share) in the fourth quarter of 2004.
On a GAAP basis, 2005 fourth quarter gross
margin increased to 23.3% from 7.6% in the fourth quarter of last year.
Operating income grew to $1.9 million (3.4% of revenues) compared with an
operating loss of $2.1 million in the fourth quarter of 2004. Net loss for the
quarter was $2.2 million (or ($0.12) per diluted share) compared with a net loss
of $4.1 million (or ($0.24) per diluted share) in the fourth quarter in 2004.
2005
Full Year Results
Revenues in 2005 reached
$205.6 million, representing a 12.5% increase over revenues of $182.8 million in
2004. On a pro forma basis, revenues were $171.3 million representing a 15.3%
increase over pro forma revenues of $148.6 million in 2004. The growth in sales
over the year was due mainly to the significant growth in sales of active-wear,
and in particular sales to Nike for their Nike Pro category.
Gross
margin on a pro-forma basis was 17.3% in 2005 compared with 8.2% in 2004.
Pro-forma operating profit for 2005 was $15.7 million (9.1% of revenues)
compared with $4.7 million in 2004. On a pro-forma basis, net income for the
year was $8.6 million ($0.47 per diluted share) compared with a pro-forma net
loss of $8.7 million (or ($0.56) per diluted share) in 2004.
On a
GAAP basis, gross margin for the year was 19.1% compared with 12.5% in 2004.
Operating profit for 2005 was $13.5 million (or 6.5% of revenues) compared with
$0.5 million (0.3% of revenues) in 2004. Net income for the year was $3.3
million ($0.18 per diluted share) compared with a net loss of $6.9 million (or
($0.44) per diluted share) in 2004.
Mr. Yos Shiran, Chief Executive Officer of
Tefron, commented, “2005 was a successful year for us, in which our efforts over
the past few years have begun to pay off. We continued executing on our
strategic plan, surpassed our targets of growth and increased our profitability.
Tefron today is in a stronger position to capitalize on growth opportunities and
market trends, while enjoying a strong and growing demand for its products.”
Mr.
Shiran continued, “Our cooperation with and sales to Nike grew substantially in
2005.Our relationship with Nike
strengthening is an example of how our loyalty, commitment and dedication to our
customers can be realized.We see
great potential in this strengthening relationship, and this year we expect
increased sales to Nike, as well as to our other customers.”
Mr.
Shiran concluded, “Moving into 2006, we are well positioned to build on our
growth strategy. We intend to continue expanding our relationships with our
existing customers and reach new value driven customers. We intend to expand our
product lines while entering into new categories and increase the visibility of
our (EFPTM) technology. Based on our plan for 2006, we
are aiming for our top-line growth rate for 2006 to be in the mid-teens. In
addition, we hope that over the year our profitability levels will remain
significantly higher than those of 2005 at around the levels seen in the fourth
quarter of 2005.”
Conference Call
The Company will be hosting a conference call today, Wednesday, March 8,
2006 at 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
866 229 7198
UK Dial-in Number: 0
800 917 5108
ISRAEL Dial-in
Number: 03 918 0610
INTERNATIONAL
Dial-in Number:+972 3 918
0610
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