Tefron continues to achieve improvements in operational results
Tefron Ltd, a leading producer of seamless intimate apparel and engineered-for-performance active wear, announced financial results for the third quarter of 2010.
EBITDA improved to negative $0.6 million in the third quarter of 2010, an improvement of $6.4 million compared with negative EBITDA of $7.0 million in the third quarter of 2009.
Operating loss for the third quarter of 2010 improved by $6.2 million to $3.1 million, compared with an operating loss of $9.3 million in the third quarter of 2009.
Loss for the third quarter of 2010 totaled $3.1 million, compared with a loss of $8.3 million for the third quarter of 2009.
Operating loss for the first nine months of 2010 totaled $8.9 million, compared to an operating loss of $15.3 million in the first nine months of 2009.
The loss for the first nine months of 2010 amounted to $8.3 million compared with a loss of $12.7 million in the corresponding period of 2009.
Tefron CEO Amit Meridor: "Tefron's adherence to its turnaround program has enabled the Company to significantly improve operating performance this quarter, reducing operating losses and improving EBITDA, and to better balance the effects of seasonality on swimwear sales typical in the third quarter. These improvements reflect the company's enhanced cost structure, in particular, improvements on lead time delivery to customers, the reduction of production waste, lower labor costs, and increase in manufacturing efficiency. "
Mr. Meridor continued, "Our recent transaction to acquire the Seamless activities of the Canadian apparel manufacturer, Nouvelle Seamless, has far-reaching implications for our success in regaining our leading position in Seamless and performance apparel. Nouvelle's activities with its strong product offering to the mass market and its customer portfolio, complement Tefron's activity in the market and will strengthen Tefron's sales and marketing network in the US. At the same time, Nouvelle has developed low-cost production channels, as well as other distribution channels in the Far East which will enable us to continue to improve Tefron's offering and geographical reach."
Tefron's Chairman of the Board of Directors, Arnon Tiberg: "The third quarter results reflect the success of Tefron's management in meeting targets for streamlining the manufacturing process which were set in the turnaround program and included a systematic restructuring of the organization and the production floor to increase efficiency, as well as processes to improve other operational components.
“The recently signed deal includes, as well, an investment of $5.8 million in Tefron, and will contribute to further improvements in the cost structure of Tefron, as well as expanding our marketing and distribution activities, particularly in the US. We are currently working on the preparations for the merger of the Nouvelle's Seamless activities into Tefron's operation so that immediately upon closing and approval by the Tefron's shareholders committee we can move ahead to integrate the businesses. In addition, Tefron is expected to sign a modified agreement with its financing banks approving the deal and extending Tefron's credit and debt line by at least $5m."
Mr. Tiberg summarizes, "The combined effect of Tefron's improved cost structure, funding sources of $10.8m, and intensive marketing activity in North America gives Tefron strong potential for profitable growth."
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