Operational efficiency up from 60% to 85%, Tefron
Tefron Reports a Positive EBITDA for the Second Quarter of 2010
Second Quarter Highlights:br>
• Tefron reports a positive EBITDA for the second quarter of 2010, as compared to a negative EBITDA of about $3.3M for the corresponding quarter last year.
• Net loss of approximately $2M as compared with net loss of approximately $4.6M for the corresponding quarter last year.
• Decrease of $3.4M in operating loss for Q2/10 as compared with second quarter last year. This decrease was achieved primarily due to significant improvements in key operational measures;`On Time Delivery` to customers and reduction in production waste, which led to increased efficiency and yield. In addition, significant savings were achieved in fixed costs.
• Operational efficiency increased from 60% to 85%, while increasing the Company's production capacity.
• The Company began receiving orders from new strategic customers in the U.S.
Commenting on the results, CEO Amit Meridor, said: "During the first quarter of the year, Tefron began implementation of its Turnaround Plan, for an immediate improvement of the operating results and returning to a momentum of growth. Tefron exceed the Turnaround plan goals set for the second quarter. The Company demonstrated substantial operational improvements, which led to a reduction in losses and to a positive EBITDA for the quarter, as compared to a negative EBITDA of approximately $12M in 2009.
“While enhancing collaboration with current customers, the Company has recently begun to supply to new customers and is also operating toward extending its swimwear development and production activities to the American and European markets."
Meridor further added that: "We are investing great efforts in regaining customer confidence in Tefron and our operational improvements enable us to be both efficient and competitive. Second quarter results demonstrate Tefron's ability to introduce changes in the Company's cost structure within a short period of time, improve customer service and create a healthy company. We expect the significant changes implemented during the first half of the year and those to be applied in the second half, shall enable Tefron to regain and expand its customer base."
Incoming Tefron Chairman, Arnon Tiberg, commented: "Tefron took on the challenge of regaining a major position in the global textile industry as a leading player in its field, while implementing an aggressive long term recovery and growth plan. The Company continues to operate toward improving all of the parameters identified with its production floor, such as improving On Time Delivery to customers and reduction in production waste. In addition, the Company continues cutting down cost structure in terms of personnel, rent and transportation expenses."
Tiberg further added that: "In recent months, we have strengthened our top management with leading textile and fashion managers and the results were forthcoming. The Company board has complete confidence in management and its ability to achieve improvements in framework of the Turnaround plan."