Tefron forms joint venture with Chinese textile company

08 May '06

4 min read

Tefron Ltd, a leading producer of seamless intimate apparel and engineered-for-performance (EFPTM) active wear, announced financial results for the first quarter of 2006.

As announced on April 27th 2006, Tefron closed the sale of its ownership interest in AlbaHealth. Accordingly, it will cease to consolidate the financial statements of AlbaHealth from the closing date onward. To enable a clearer picture of Tefron's financial results, Tefron provides its financial results below both on a pro-forma basis, excluding the results of AlbaHealth, as well as on a GAAP basis. Reconciliation between the results on a GAAP and pro-forma basis is provided in a table immediately following the Consolidated Statement of Operations.

Tefron also informed that it had signed an agreement to form a joint venture in China with Langsha Knitting Co Ltd, a leading Chinese textile brand name company, and Itochu Corporation, a Japanese Fortune-500 company with significant business interests and vast experience managing multinational joint ventures in China.

The joint venture was formed to manufacture seamless underwear for the Asian market using Santoni knitting machines contributed by Tefron USA. Tefron will hold 50.1 percent of the equity of the joint-venture. The parties expect the joint venture to become operational within the next few months.

First quarter revenues reached $56.8 million, representing an 8.0 percent increase over the first quarter of 2005. On a pro-forma basis excluding AlbaHealth, revenues for the quarter reached $49.4 million, representing an 11.0 percent increase over the first quarter of 2005.

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