Tefron 6-K 2011
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Report of Foreign Private Issuer Pursuant to Rule 13a-16 or 15d-16 of
The Securities Exchange Act of 1934
For the month of August, 2011
(Translation of registrant's name into English)
Ind. Center Teradyon, P.O. Box 1365, Misgav 20179, Israel
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.
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Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ____
Indicate by check mark whether the registrant by furnishing the information contained in this form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
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If "Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82- N/A
Attached hereto and incorporated by reference herein is the Registrant's press release announcing its second quarter results issued on August 17, 2011.
This Form 6-K is hereby incorporated by reference into Tefron Ltd.’s Registration Statement on Form F-3 (Registration No. 333-128847) and it's Registration Statements on Form S-8 (Registration Nos. 333-139021 and 333-111932).
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Date: August 17, 2011
Tefron announces strong improvement in sales and gross profit in
the first half of 2011 and consistent positive EBITDA for a six
Revenues grow 12% year-on-year in the first six months of 2011 to $56.8M,
representing $110M annual sales
Misgav, Israel, August 16, 2011 - Tefron Ltd. (OTC:TFRFF; TASE:TFRN), a leading producer of seamless intimate apparel and engineered-for-performance (EFPT) active wear, today announced financial results for the first half and second quarter of 2011.
Commenting on the results, Amit Meridor, Tefron’s CEO said: "Tefron’s strong sales and operational improvements provide a clear indication that we are growing in accord with our turnaround plan. The increase in sales to $56.8 million from $50.7 million in the first half last year, represents an annualized sales rate of approximately $110 million for 2011. I am very pleased to report that the strong sales reflect both higher sales to existing customers, as well as an important broadening of the customer base.”
Meridor continued, “These first half results do not yet reflect the full potential of the acquisition of the seamless assets of Nouvelle Inc. of Canada. Not only is the organic improvement in performance seen in the first half of 2011 expected to continue, but we expect a greater contribution to growth in the second half of the year from the Nouvelle acquisition, with an important increase in sales to the mass market in the USA, as well as in European markets. Looking further forward, Tefron has been focusing much of our development expenditure and investment in new technology toward the launch of new products in the sports market for 2012. We believe that these products will enable us to return to our global leadership position in seamless technology and the preliminary indications regarding the new products are very positive.”
Arnon Tiberg, Tefron's Chairman confirmed that "Tefron is continuing to improve its major financial and operational parameters in line with the strategic objectives of the Turnaround plan introduced by management a year and a half ago. This half year financial report noticeably demonstrates the results of our efforts to increase the efficiency of our operational processes, which had been a major bottleneck in growth. The expansion of sales in the first half of the year is a result of both the enlistment of new large retail customers and higher sales to existing strategic customers. These two factors are a direct result of the steps taken to increase marketing and sales activity in targeted markets in Europe and North America, investment in new product development to regain our position of technological leadership, and our strenuous efforts to improve customer service, timeliness of delivery and quality control. Finally, I would add that we are pleased how management has begun to exploit the synergies and benefits of the merger with Nouvelle, although there are clearly more gains to exploit going forward. “
Financial highlights for the first half of 2011
Results First Half of 2011
Sales in the first half of 2011 totaled $56.8 million, an increase of 11.9% compared with $50.7 million during the same period last year and an increase of 60.7% compared with $35.3 million in the second half of 2010. Most of the increase in sales compared to last year and compared to the prior reporting period can be attributed to the growth in sales of Intimate and Active wear apparel in the "seamless" sector. Higher sales in this segment are mainly due to the successful incorporation of activities acquired from Nouvelle. In addition, first half sales, compared with the prior reporting period, were boosted by due to the above and due to seasonal increase in swimwear sales which totaled $7.8 million in the first six months of 2011.
Gross profit for first half 2011 totaled $9.2 million (16.3% of sales) compared with gross profit amounting to about $4.1 million (8.0% of sales) in the same period last year and a negative $1.9 million in the second half of 2010. The significant improvement in gross profit and gross profit margin in the second half of 2010 can be largely attributed to improved efficiency in the sales cycle, as well as the successful application of the Turnaround plan which has among other benefits, helped to reduce cost of sales.
Operating loss for the first half of 2011 declined by about 46% and totaled $3.2 million, compared to an operating loss of $5.8 million in the same period last year, and an operating loss of $17.0 million in the second half of 2010.
EBITDA during the first six months of 2011 turned positive and amounted to approximately $777,000. The positive EBITDA for the first half of 2011, compares with a negative EBITDA of $1.2 million in the same six-month period last year and a negative EBITDA of $5.5 million in the second half of 2010.
Cash flow used in operating activities totaled $9.2 million, in the first half of 2011 compared to cash flows used in operating activities of $4.2 million in the same period last year.
Net loss in the first half of 2011 was reduced to $4.0 million, compared with a net loss of $5.2 million during the same period last year and a net loss of $17.4 million dollars in the second half of 2010.
Second quarter results for 2011
Sales in the second quarter of 2011 totaled $28.8 million, an increase of 15.6% compared with sales of $24.9 million in the second quarter of 2010. Gross profit for the second quarter of 2011 totaled $4.3 million (14.7% of sales), compared to gross profit of $2.3 million (9.2% of sales) last year.
Second quarter operating loss for 2011 declined by about 43% and totaled $1.3 million, compared to an operating loss of $2.3 million in the same period last year.
EBITDA totaled $507,000 for the second quarter of 2011, compared with EBITDA of $12,000 dollars for the same period last year.
Cash flows used in operating activities for the second quarter of 2011 totaled $1.5 million, compared to cash used in operating activities of $1.7 million in the same period last year.
The second quarter net loss for 2011 amounted to $1.7 million, compared with a net loss of $2.0 million in the three months between April and June last year.
Tefron manufactures boutique-quality everyday seamless intimate apparel, active wear and swim wear sold throughout the world by such name-brand marketers as Victoria's Secret, Warnaco/Calvin Klein , Wal-Mart Stores Inc, The Gap, J. C. Penney, Patagonia, Reebok, TJMaxx, TMGTV, and El Corte Ingles, 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, swim wear, beach wear and active-wear.
This press release contains certain forward-looking statements, within the meaning of Section 27A of the US Securities Act of 1933, as amended, Section 21E of the US Securities Exchange Act of 1934, as amended, and the safe harbor provisions of the US Private Securities Litigation Reform Act of 1995, with respect to the Company’s business, financial condition and results of operations. We have based these forward-looking statements on our current expectations and projections about future events.
Words such as "believe," "anticipate," "expect," "intend," "will," "plan," "could," "may," "project," "goal," "target," and similar expressions often identify forward-looking statements but are not the only way we identify these statements. Except for statements of historical fact contained herein, the matters set forth in this press release regarding our future performance, plans to increase revenues or margins and any statements regarding other future events or future prospects are forward-looking statements.
These forward looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those contemplated in such forward-looking statements, including, but not limited to:
as well as certain other risks detailed from time to time in the Company’s filings with the Securities and Exchange Commission. The Company undertakes no obligation to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.
Chief Financial Officer
+972 4 990 0881
Consolidated balance sheets
Consolidated balance sheets
Consolidated statements of income