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Tefron reports Q1 2007 results
07 May '07
4 min read
Tefron Ltd announced financial results for the first quarter of 2007.
As announced on April 27, 2006, Tefron closed the sale of its ownership interest in AlbaHealth. Accordingly, the financial statements of AlbaHealth are accounted for as discontinued operations, and the financial results described below therefore do not include the financial results of AlbaHealth. Tefron ceased to consolidate the financial statements of AlbaHealth commencing April 27, 2006.
First Quarter 2007 Results:
First quarter revenues were $48.8 million, representing a 1.2% decrease from first quarter 2006 revenues of $49.4 million. The slight decrease in revenues in the quarter was due to an anticipated reduction in sales of active-wear during the first half of 2007. This reduction was partly offset by an increase in sales of swimwear and a slight increase in sales of intimate apparel products.
First quarter gross margin was 19.1%, compared with a gross margin 24.3% in the first quarter of 2006. Operating income totaled $5.0 million (10.2% of revenues), compared with $7.5 million (15.2% of revenues) in the first quarter of 2006.
The decline in gross and operating margins in the first quarter was primarily due to the significant weakening of the US dollar versus the Israeli shekel and the previously identified pricing pressure in older collections of our intimate apparel product line.
Income from continuing operations was $3.8 million (7.8% of revenues),or $0.17 per diluted share in the first quarter of 2007, compared to $5.2 million (10.6% of revenues), or $0.25 per diluted share, in the first quarter of 2006.
In an unrelated matter, Tefron has determined that no additional payment is due from Norfet, Limited Partnership, its major shareholder, pursuant to their 2004 Share Purchase Agreement. Tefron would have been entitled to an additional payment if, during the three-year period following closing of their share purchase transaction, Norfet had sold, at an adjusted average price per share of at least $9.22, at least 20% of the shares that it had acquired from Tefron at the closing.
As announced on April 27, 2006, Tefron closed the sale of its ownership interest in AlbaHealth. Accordingly, the financial statements of AlbaHealth are accounted for as discontinued operations, and the financial results described below therefore do not include the financial results of AlbaHealth. Tefron ceased to consolidate the financial statements of AlbaHealth commencing April 27, 2006.
First Quarter 2007 Results:
First quarter revenues were $48.8 million, representing a 1.2% decrease from first quarter 2006 revenues of $49.4 million. The slight decrease in revenues in the quarter was due to an anticipated reduction in sales of active-wear during the first half of 2007. This reduction was partly offset by an increase in sales of swimwear and a slight increase in sales of intimate apparel products.
First quarter gross margin was 19.1%, compared with a gross margin 24.3% in the first quarter of 2006. Operating income totaled $5.0 million (10.2% of revenues), compared with $7.5 million (15.2% of revenues) in the first quarter of 2006.
The decline in gross and operating margins in the first quarter was primarily due to the significant weakening of the US dollar versus the Israeli shekel and the previously identified pricing pressure in older collections of our intimate apparel product line.
Income from continuing operations was $3.8 million (7.8% of revenues),or $0.17 per diluted share in the first quarter of 2007, compared to $5.2 million (10.6% of revenues), or $0.25 per diluted share, in the first quarter of 2006.
In an unrelated matter, Tefron has determined that no additional payment is due from Norfet, Limited Partnership, its major shareholder, pursuant to their 2004 Share Purchase Agreement. Tefron would have been entitled to an additional payment if, during the three-year period following closing of their share purchase transaction, Norfet had sold, at an adjusted average price per share of at least $9.22, at least 20% of the shares that it had acquired from Tefron at the closing.
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