Lingerie and sportswear maker Tefron Ltd. (Bulletin Board: TFRFF; TASE:TFR) had a tough year in 2009, but hopes for better times in 2010. These include a rights issue completed just before Passover. The company also published its financial report for the fourth quarter and full year of 2009.
Tefron CEO Amit Meridor said, "If we do what we have to do in improving production, Nike and Victoria's Secret will happy to increase sales. Their ability to boost sales depends solely on us."
In the rights issue, Tefron issued 754,000 new shares at $3.80 per share, to raise a gross total of $4 million. Controlling shareholder Norfet LP, owned by First Israel Mezzanine Investors Fund (FIMI) and Mivtach Shamir Holdings Ltd. (TASE:MISH), invested $1.1 million and now owns 24% of the company.
Meridor said today, "The issue was very successful as far as we're concerned. Almost 60% of the shareholders exercised their rights, indicating their confidence in the company and in our turnaround plan."
Meridor added that Tefron plans to improve production efficiency. "We are shortening delivery times and improving customer service. These were points where Tefron wasn’t good enough," he said.
The streamlining measures included the firing of 15% of the company's workforce last year, with dozens more layoffs in the offing. Most of the cutbacks were by reducing outsourcing work to subcontractors in Jordan.
As for the financial report, it will bear Meridor's signature even though he did not run the company last year; he was appointed CEO in January.
Tefron's revenue fell 33.5% to $115.5 million in 2009 from $173.8 million in 2008. The company attributed most of the decline to the global economic slowdown, which caused lower sales by its two major customers, Nike Inc. (NYSE: NKE) and Victoria's Secret.
2009 sales to Nike fell by $25.7 million and sales to Victoria's Secret fell by 29.5 million, mainly because the lingerie company moved a project to India.
Net loss was $17.4 million ($8.20 per share) in 2009, compared with a net loss of $17.6 million in 2008.
Fourth quarter revenue fell 38% to $22.3 million from $36 million for the corresponding quarter of 2008. Net loss was narrowed to $4.7 million ($2.20 per share) from $8.8 million for the corresponding quarter.
Tefron's share rose 5% at the opening in New York today to $4.00. The share rose 4.3% on the TASE today to NIS 15.09.
Published by Globes [online], Israel business news - www.globes-online.com - on April 1, 2010
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