Tefron Ltd, the producer of seamless intimate apparel, today posted a third quarter net income of $ 1.1 million or $0.09 per share (diluted), compared to a net loss of $0.9 million or $(0.07) per share (diluted) for the same period last year. The company also announced one of the first results of its market diversification programme - its first order from Wal-Mart.

Sales for the third quarter ended 30 September 2002 increased 3.6 per cent to $50.1 million, against $48.3 million in 2001. Gross profit for the quarter rose 88.0 per cent to $10.5 million (21 per cent of turnover) compared to a $5.6 million (11.6 per cent of turnover) for the third quarter of 2001.

Operating income for the third quarter was $6.0 million (12 per cent of turnover) compared to an operating income of $800,000 (1.7 per cent of turnover) for the same period last year.

In the third quarter of 2002 the company incurred capital loss of $1.8 million, most of which were attributed to costs and accounting fees associated with the sale of 52 per cent of the Health Products Division of its wholly owned subsidiary, Alba Waldensian Inc.

Yos Shiran, chief executive officer of Tefron said: "We estimate that the company's sales and operating results for the fourth quarter will be in line with the third quarter.

"Also looking further ahead into 2003, while our market is characterised by a short visibility, based upon what we are hearing from our customers in the United States considering the possibility of a war in Iraq, we currently expect to report lower sales for the first quarter. We do, however, expect to continue the current levels of sales and operating performance through the rest of 2003.