Tefron losses widen

4 December 2009, Misgav, Israel - Tefron Ltd., a leading producer of seamless intimate apparel and performance active wear, has announced its financial results for the third quarter of 2009, which show significantly widening losses when compared with the same period in 2008.

Third quarter revenues were $21.0 million, representing a 45.1% decrease from the third quarter of 2008 revenues of $38.3 million. The decrease in revenues in the quarter was due to a decrease in sales in all of the company's product lines, primarily due to the worldwide economic slowdown.

The company reported a gross loss in the quarter of $5.5 million, compared with a gross loss of $1.9 million in the third quarter of 2008. Operating loss for the quarter was $9.3 million, as compared with an operating loss of $7.1 million in the third quarter of 2008. Net loss for the quarter was $8.3 million, or $3.9 loss per diluted share, as compared with net loss of $5.8 million, or $2.7 per diluted share, in the third quarter of 2008.

The decline in gross and operating margins in the quarter compared with the third quarter of 2008 was primarily due to the significant decline in revenues which exceeded the corresponding decline in the company’s fixed expenses that resulted from the implementation of its efficiency plan and the devaluation of the US Dollar versus the New Israeli Shekel.

Revenues in the nine months of 2009 were $93.3 million, representing a 32.4% decrease from nine months of 2008 revenues of $137.9 million. The decrease in revenues was due to a decrease in sales of both the active-wear and intimate apparel product lines.

The 2009 nine months period gross loss was $1.6 million compared to a gross margin of $8.7 in the nine months period of 2008. Operating loss was $15.3 million compared to an operating loss of $8.4 million in the nine months of 2008. Net loss was $12.7 million, or $6.0 loss per diluted share, compared with net loss of $8.6 million, or $4.0 per diluted share, in the nine months of 2008. These decreases in margins were due to the significant decline in sales, which exceeded the corresponding decline in the company’s fixed expenses that resulted from the implementation of its efficiency plan and due to maintenance costs associated with new sales offices that it opened in 2009.

Tefron manufactures seamless intimate apparel, active wear and swimwear sold throughout the world by such name-brand marketers as Victoria's Secret, Nike, Target, The Gap, J.C. Penney, Maidenform, lululemon Athletica, Warnaco/Calvin Klein, Patagonia, Reebok, Swimwear Anywhere, and El Corte Englese, as well as other well known retailers and designer labels. The company's product line includes knitted briefs, bras, tank tops, boxers, leggings, crop, T-shirts, nightwear, bodysuits, swimwear, beach wear and active-wear.