(Filed Under Financial and General Interest News). Despite a revenue drop during this year’s third quarter, Tefron Ltd. posted an improvement in its earnings before interest, taxes, depreciation and amortization (EBITDA).
The Israel-based manufacturer of seamless intimate apparel and engineered-for-performance activewear said its EBITDA improved to negative $0.6 million from negative $7 million during last year’s third quarter, representing a $6.4 million, or 8.57 percent, improvement. Operating loss was also down: to $3.1 million from a loss of $9.3 million.
The company pulled in a minor gross profit of $0.2 million compared to a gross loss of $5.5 million last year. Revenues dropped to $18 million from $21 million.
Despite the lower sales turnover, Tefron said it lowered its operating loss by cutting production wastes and losses, lowering labor costs, increasing operating efficiency and improving lead-time to customers. “Tefron’s adherence to its turnaround program has enabled the company to significantly improve operating performance this quarter, reducing operating losses and improving EBITDA, and to better balance the effects of seasonality on swimwear sales typical in the third quarter,” said Amit Meridor, C.E.O of Tefron.
Meridor also believes the company has potential to once again be a worldwide leader. “Our recent transaction to acquire the seamless activities of the Canadian apparel manufacturer, Nouvelle Seamless [announced on November 17] has far-reaching implications for our success in regaining our leading position in seamless and performance apparel,” he said. “Nouvelle's activities with its strong product offering to the mass market and its customer portfolio, complement Tefron's activity in the market and will strengthen Tefron's sales and marketing network in the U.S.
“At the same time, Nouvelle has developed low-cost production channels, as well as other distribution channels in the Far East which will enable us to continue to improve Tefron's offering and geographical reach.”
Tefron manufacturers products for name-brand marketers, including Victoria’s Secret; Wal-Mart Stores; The gap; Maidenform; Reebok, and others.
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