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Tefron reports Q4 & annual 2009 results
05
Apr '10
Tefron Ltd a leading producer of seamless intimate apparel and engineered-for-performance active wear announced financial results for the fourth quarter and for the year 2009.

Fourth Quarter 2009 Results

Fourth quarter revenues were $22.3 million, representing 38.1% decrease from the fourth quarter of 2008 revenues of $36.0 million. The decrease in revenues in the quarter was due to a decrease in sales in all the Company's product lines, primarily due to the worldwide economic slowdown.

The company reported a gross loss in the fourth quarter of $2.16 million, compared with $2.16 million in the fourth quarter of 2008. Operating loss for the quarter was $5.6 million, as compared with an operating loss of $10.6 million in the fourth quarter of 2008. The Company's decrease in gross and operating losses during 2009 in relation to the 2008 losses reflects the implementation of the Company's efficiency plan during 2009. Net loss for the quarter was $4.7 million, or $2.2 per diluted share, as compared with a net loss of $8.8 million, or $4.2 per share, in the fourth quarter of 2008.

Results for Annual 2009

Year 2009 revenues were $115.5 million, representing a 33.5% decrease from 2008 revenues of $173.8 million. The decrease in revenues was across all the Company's product lines, primarily due to the worldwide economic slowdown, which led to more conservative inventory management policies among some of the company's customers and a decline in sales to our two major customers.

Gross loss for the year 2009 was $3.8 million compared with gross margin of $ 6.3 million in 2008. Operating loss was $20.9 million compared with an operating loss of $19.2 million as reported in 2008. Net loss was $17.4 million, or $8.2 per diluted share, compared with a net loss of $17.6 million or $8.3 per share, as reported in 2008.

Gross and operating losses in 2009 were primarily due to the manufacturing challenges faced in the Hi-Tex division which continued to bear heavy costs. As discussed during 2009, these challenges are mainly due to the learning curve required for the manufacture of various new and technologically advanced products, which have been ordered in short production runs for a larger number of apparel categories. The relatively high cost of sales, as a percentage of sales, was primarily due to the significant decline in sales volumes, which exceeded the corresponding decline in our fixed expenses that resulted from the implementation of our 2009 efficiency plan, and due to maintenance costs associated with new sales offices that we opened in 2009.

Commenting on the 2009 results, Tefron new CEO, Amit Meridor, said, "The efficiency plan implemented in 2009 laid the groundwork for the more aggressive restructuring of Tefron in which we are now actively engaged to restore financial and operational strength to Tefron. We have secured a more solid financial position following the success of the bank refinancing last month and the fund raising programs completed last week and it is now the focus of the management team to implement operational changes to manufacturing and to raise the level of customer service to restore Tefron's leadership position in the industry."

Tefron Ltd


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