ISRAEL: Tefron swings to Q2 loss on Hi-Tex costs
Seamless intimate apparel, active wear maker Tefron Ltd today (14 August) has swung to a second quarter loss, despite higher revenues across all product lines, as it continues to be hampered by high costs in its Hi-Tex division.
Net loss for the quarter was $2.3m or $0.12 per share, compared with a net income of $0.8m, or $0.04 per share, in the same period last year.
Quarterly revenues climbed 19.7% to $48.6m from $40.6m, driven by strong demand for active-wear, swimwear and intimate apparel, the company said.
But the devaluation the US dollar against the New Israeli shekel meant that gross margin dropped to 7.6% from 14.0%, with an operating loss of $1.9m against an operating income of $1.0m last time.
The company also blamed "manufacturing challenges" in its Hi-Tex division for an increase in costs.
In the first half of 2008, net loss was $3.2m, or $0.15 per share, versus a net income of $4.6m, or $0.21 per share, in the prior year period. Revenues in the first six months rose 11.4% to $99.6m from $89.4m.
Mr Yos Shiran, chief executive officer of Tefron, said production and sales in the Hi-Tex division is starting to improve, and that the company has added new customers including Eddie Bauer, The North-Face and Wacoal.
He added that revenues in the third quarter are likely to be around 25% higher than the same period last year, "with year-on-year growth across all product lines."
The company also named Mr Eran Rotem as its chief financial officer, replacing Mr Asaf Alperovitz said he was resigning after three years in the post.
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