Tefron Ltd. — Interim / Quarterly Report 2007

Oct 23, 2007

10kWIZARD

Form 6-K

TEFRON LTD - TFR

Filed: October 22, 2007 (period: October 22, 2007)

Report of foreign issuer rules 13a-16 and 15d-16 of the Securities Exchange Act

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SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 6-K

Report of Foreign Private Issuer Pursuant to Rule 13a-16 or 15d-16 of The Securities Exchange Act of 1934

For the month of October, 2007

TEFRON LTD. (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.

Form 20-F [X] Form 40-F [_]

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.

Yes [_] No [X]

If "Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82- N/A

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Attached hereto and incorporated by reference herein are the consolidated financial statements of Tefron Ltd. for the six month period ended June 30, 2007, prepared in accordance with generally accepted accounting principles in the United States. These financial statements are in addition to the second quarter 2007 results that were contained in a press release, dated August 9, 2007, and were submitted via Form 6-K.

This Form 6-K is hereby incorporated by reference into Tefron Ltd.'s Registration Statement on Form F-3 (Registration No. 333-128847) and its Registration Statements on Form S-8 (Registration Nos. 333-139021 and 333-111932).

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SIGNATURES

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.

TEFRON LTD. (Registrant)

By: /s/ Asaf Alperovitz

Asaf Alperovitz Chief Financial Officer

By: /s/ Hanoch Zlotnik

Hanoch Zlotnik Treasurer

Date: October 22, 2007

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TEFRON LTD. AND ITS SUBSIDIARIES

INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF JUNE 30, 2007

U.S. DOLLARS IN THOUSANDS

UNAUDITED

INDEX

	PAGE
INTERIM CONSOLIDATED BALANCE SHEETS	2 - 3
INTERIM CONSOLIDATED STATEMENTS OF INCOME	4
INTERIM STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY	5
INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS	6 - 7
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS	8 - 13

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TEFRON LTD. AND ITS SUBSIDIARIES

INTERIM CONSOLIDATED BALANCE SHEETS

U.S. DOLLARS IN THOUSANDS

	JUNE 30, 2007	DECEMBER 31, 2006
	UNAUDITED	AUDITED
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$ 5,181	$ 3,966
Short-term deposit	11,402	10,089
Marketable securities - available for sale	9,868	4,975
Trade receivables (net of allowances of $183 at June 30, 2007 and December 31, 2006)	28,234	30,655
Other accounts receivable and prepaid expenses	3,736	4,166
Inventories	24,609	28,912
TOTAL current assets	83,030	82,763
LONG-TERM INVESTMENTS:
Bank deposit	-	1,029
Severance pay fund	854	778
Subordinated note	3,000	3,000
TOTAL long-term investments	3,854	4,807
PROPERTY, PLANT AND EQUIPMENT, NET	76,043	77,086
TOTAL assets	$162,927	$164,656

The accompanying notes are an integral part of the consolidated financial statements.

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TEPRON LTD. AND ITS SUBSIDIARIES

INTERIM CONSOLIDATED BALANCE SHEETS

U.S. DOLLARS IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA

	JUNE 30, 2007	DECEMBER 31, 2006
	UNAUDITED	AUDITED
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Current maturities of long-term bank loans	$ 5,948	$ 5,948
Trade payables	22,903	31,143
Other accounts payable and accrued expenses	10,633	10,402
TOTAL current liabilities	39,484	47,493
LONG-TERM LIABILITIES:
Long-term loans from banks (net of current maturities)	16,348	19,322
Deferred taxes	12,220	12,313
Accrued severance pay	3,427	3,298
TOTAL long-term liabilities	31,995	34,933
SHAREHOLDERS' EQUITY:
Ordinary shares of NIS 1 par value - Authorized:
49,995,500 shares; Issued: 22,198,386 and 21,747,568 shares at June 30, 2007 and December 31, 2006, respectively; Outstanding:21,200,986 and 20,750,168 shares at June 30, 2007 and December 31, 2006, respectively	7,518	7,411
Additional paid-in capital	106,138	101,684
Less - 997,400 Ordinary shares in treasury, at cost	(7,408)	(7,408)
Cumulative other comprehensive income	130	55
Accumulated deficit	(14,930)	(19,512)
TOTAL shareholders' equity	91,448	82,230
TOTAL liabilities and shareholders' equity	$ 162,927	$ 164,656

The accompanying notes are an integral part of the consolidated financial statements.

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TEFRON LTD. AND ITS SUBSIDIARIES

INTERIM CONSOLIDATED STATEMENTS OF INCOME

U.S. DOLLARS IN THOUSANDS (EXCEPT SHARE AND PER SHARE DATA)

	SIX MONTHS ENDED JUNE 30,
	2007	2006
	UNAUDITED
Sales	$ 89,374	$ 99,096
Cost of sales	74,381	76,334
Gross profit	14,993	22,762
Selling, general and administrative expenses	8,998	8,632
Operating income	5,995	14,130
Financial expenses, net	457	1,016
Income before taxes on income	5,538	13,114
Taxes on income	956	3,335
Income from continuing operations	4,582	9,779
Income (loss) from discontinued operations	-	62
Net income	$ 4,582	$ 9,841
Basic and diluted net earnings per share from continuing operations:
Basic net earnings per share	$ 0.22	$ 0.49
Diluted net earnings per share	$ 0.21	$ 0.47
Basic and diluted net earnings per share :
Basic net earnings per share	$ 0.22	$ 0.49
Diluted net earnings per share	$ 0.21	$ 0.47
Weighted average number of shares used for computing
basic earning per share	21,174,775	19,906,775
Weighted average number of shares used for computing
diluted earnings per share	21,843,126	20,919,799

The accompanying notes are an integral part of the consolidated financial statements.

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TEFRON LTD. AND ITS SUBSIDIARIES

INTERIM STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

U.S. DOLLARS IN THOUSANDS

TOTAL			ADDITIONAL	DEFERRED	CUMULATIVE OTHER
COMPREHENSIVE	TREASURY	ORDINARY	PAID-IN	STOCK-BASED	COMPREHENSIVE	ACCUMULATED
INCOME	SHARES	TOTAL	SHARES	CAPITAL	COMPENSATION	GAIN
---	---	---	---	---	---	---
$ Balance as of December 31, 2006 (audited)			$ 7,411	$101,684	$ -	$ 55
$ (7,408)	$ 82,230
Exercise of stock options related to employees and others			5	80	-	-
-	85
Exercise of tradable options issued at the secondary offering			102	4,188	-	-
-	4,290
Compensation related to options granted to employees			-	186	-	-
-	186
Tax benefit related to exercise of stock options			-	-	-	-
-	-
Comprehensive income:
Realized gain on hedging derivative			-	-	(52)	-
(52)	-	(52)
Realized gain on marketable securities			-	-	(3)	-
(3)	-	(3)
Unrealized gain on hedging derivative			-	-	128	-
128	-	128
Unrealized gain on marketable securities			-	-	2	-
2	-	2
Net income			-	-	-	4,582
4,582	-	4,582
---	---	---	---	---	---	---
Total comprehensive income
4,657
= = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = =			$ 7,518	$106,138	$ -	$ 130
Balance as of June 30, 2007 (unaudited)			$ 7,518	$106,138	$ -	$ 130
$ (7,408)	$ 91,448

The accompanying notes are an integral part of the consolidated financial statements.

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TEFRON LTD. AND ITS SUBSIDIARIES

INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS

U.S. DOLLARS IN THOUSANDS

| | SIX MONTHS ENDED JUNE 30, | | | --- | --- | --- | | | 2007 | 2006 | | | UNAUDITED | | | CASH FLOWS FROM OPERATING ACTIVITIES: | | | | Net income | $ 4,582 | $ 9,841 | | Adjustments to reconcile net income to net cash provided by operating activities: | | | | Depreciation of property, plant and equipment | 4,335 | 4,151 | | Compensation related to options granted to employees | 186 | 336 | | Increase in accrued severance pay, net | 53 | 204 | | Accrual of interest on short and long-term deposits and marketable securities | (328) | - | | Gain on sale of and accretion of discount on marketable securities | (65) | - | | Increase in deferred income taxes | 60 | 3,979 | | Loss (gain) on disposal of property, plant and equipment, net | (395) | 8 | | Decrease (increase) in trade receivables, net | 2,421 | (859) | | Decrease (increase) in other accounts receivable and prepaid expenses | 271 | (224) | | Decrease in inventories | 4,303 | 3,962 | | Decrease in trade payables | (8,240) | (5,624) | | Increase (decrease) in other accounts payable and accrued expenses | 385 | (1,529) | | Net cash provided by continuing operating activities | 7,568 | 14,245 | | Net cash provided by discontinuing operating activities | - | 445 | | Net cash provided by operating activities | 7,568 | 14,690 | | CASH FLOWS FROM INVESTING ACTIVITIES: | | | | Purchase of property, plant and equipment | (3,102) | (1,164) | | Investment grants received | - | 1,218 | | Proceeds from sale of property, plant and equipment | 681 | 265 | | Dividend received from discontinued operation | - | 140 | | Investment in short and long-term deposits and marketable securities | (16,961) | - | | Proceeds from sale of marketable securities | 12,179 | - | | Proceeds from sale of subsidiary, net | - | 10,250 | | Net cash provided by (used in) continuing investing activities | (7,203) | 10,709 | | Net cash used in discontinued investing activities | - | (172) | | Net cash provided by (used in) investing activities | (7,203) | 10,537 |

The accompanying notes are an integral part of the consolidated financial statements.

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TEFRON LTD. AND ITS SUBSIDIARIES

INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS

U.S. DOLLARS IN THOUSANDS

| | SIX MONTHS ENDED JUNE 30, | | | --- | --- | --- | | | 2007 | 2006 | | | UNAUDITED | | | CASH FLOWS FROM FINANCING ACTIVITIES: | | | | Repayment of long-term bank loans | (2,974) | (18,214) | | Proceeds from long-term bank loans | - | 5,000 | | Decrease in short-term bank credit, net | - | (14,713) | | Excess tax benefit from exercise of stock options related to employees and directors | - | - | | Proceeds from exercise of stock options related to employees and directors | 85 | 1,622 | | Proceeds from exercise of tradable options issued at the secondary offering | 4,290 | - | | Proceeds from secondary offering of shares and options, net | - | 13,834 | | Dividend paid to shareholders | (551) | - | | Net cash provided by (used in) continuing financing activities | 850 | (12,471) | | Net cash used in discontinued financing activities | - | (544) | | Net cash provided by (used in) financing activities | 850 | (13,015) | | Total increase in cash and cash equivalents | 1,215 | 12,212 | | Decrease in cash and cash equivalents attributed to discontinued operations | - | 209 | | Increase in cash and cash equivalents attributed to continued operations | 1,215 | 12,421 | | Cash and cash equivalents at beginning of period | 3,966 | 7,652 | | Cash and cash equivalents at end of period | $ 5,181 | $ 20,073 | | CASH PAID DURING THE PERIOD FOR: | | | | Interest | $ 987 | $ 1,331 | | Income taxes, net of refunds received | $ 450 | $ 780 | | Dividend paid in cash | $ 551 | $ - | | SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITY: | | | | Purchase of property, plant and equipment by credit, net of investment grants receivable | $ 397 | $ (1,982) |

The accompanying notes are an integral part of the consolidated financial statements.

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TEFRON LTD. AND ITS SUBSIDIARIES

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS

U.S. DOLLAR IN THOUSANDS (EXCEPT SHARE AND PER SHARE DATA)

NOTE 1:- GENERAL

a. Tefron Ltd, a company organized under the laws of the State of Israel ("the Company") and its subsidiaries are engaged in the design, manufacture and sale of knitted intimate apparel, active wear and swimwear, which are manufactured using two different techniques (seamless and cut and sew) (see also Note 8). The Company's principal markets are the United States and Europe.

The Company's significant subsidiaries are Hi-Tex, founded by the Company ("Hi-Tex"), which commenced operations in 1997, Tefron USA, Inc., Tefron U.K, El-Masira Textile Company Ltd. and Macro Clothing Ltd. ("Macro") which was purchased in April 2003.

b. During the period ended June 30, 2007 and 2006 74.6% and 77.8% from the revenues, respectively, were derived from sales to the three largest customers, all located in the United States. The Company's arrangements with its customers do not contain minimum purchase requirements and there can be no assurance that the principal customers will continue to purchase the Company's products in the same volumes or on the same terms as they have done in the past. A material decrease of purchases made by the major customers or a material adverse change in the terms of such purchases could have a material adverse effect on the Company's results of operations.

NOTE 2:- UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

The accompanying unaudited interim consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information. Accordingly, they do not include all the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the six-month period ended June 30, 2007 are not necessarily indicative of the results that may be expected for the year ended December 31, 2007.

The unaudited interim financial statements should be read in conjunction with the Company's annual financial statement and accompanying notes as of December 31, 2006 included in the Company's Annual Reports on form 20-F.

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TEFRON LTD. AND ITS SUBSIDIARIES

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS

U.S. DOLLAR IN THOUSANDS (EXCEPT SHARE AND PER SHARE DATA)

NOTE 3: - SIGNIFICANT ACCOUNTING POLICIES

a. The significant accounting policies applied in the financial statements of the Company as of December 31, 2006, are applied consistently in these financial statements, except as described in Note 4.

b. Impact of recently issued accounting standards:

1. SFAS No. 157:

In September 2006, the FASB issued Statement of Financial Accounting Standard No. 157, "Fair Value Measurements" ("SFAS No. 157"), which defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. SFAS No. 157 applies to other accounting pronouncements that require or permit fair value measurements. SFAS No. 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007 and interim periods thereafter. The Company is currently assessing the impact of SFAS No. 157 on its consolidated financial position and results of operations.

1. SFAS No. 159

In February 2007, the FASB issued SFAS No. 159, "The Fair Value Option for Financial Assets and Financial Liabilities" ("SFAS No. 159"). SFAS No. 159 permits entities to choose to measure many financial assets and financial liabilities at fair value. Unrealized gains and losses on items for which the fair value option has been elected are reported in earnings. SFAS No. 159 is effective for fiscal years beginning after November 15, 2007. The Company is currently assessing the impact of SFAS No. 159 on its consolidated financial position and results of operations.

NOTE 4: - TAXES ON INCOME

Adoption of new accounting pronouncement

In July 2006, the FASB issued FASB Interpretation 48, "Accounting for Uncertainty in Income Taxes - an Interpretation of FASB statement No. 109" ("FIN 48"). FIN 48 defines the threshold for recognizing the benefits of tax return positions in the financial statements as "more-likely-than-not" to be sustained by the taxing authority. The recently issued literature also provides guidance on derecognition, measurement and classification of income tax uncertainties, along with any related interest and penalties. FIN 48 also includes guidance concerning accounting for income tax uncertainties in interim periods and increases the level of disclosures associated with any income tax uncertainties.

Pursuant to the provisions of FIN48, the differences between the amounts recognized in the statements of financial position prior to the adoption of FIN 48 and the amounts reported after adoption would be accounted for as a cumulative-effective adjustments recorded to the beginning balance of retained earnings. FIN 48 is effective for fiscal years beginning after December 15, 2006.

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TEFRON LTD. AND ITS SUBSIDIARIES

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS

U.S. DOLLAR IN THOUSANDS (EXCEPT SHARE AND PER SHARE DATA)

NOTE 4: - TAXES ON INCOME (CONT.)

The Company and its subsidiaries file income tax returns in the U.S. federal jurisdiction, and various states in the U.S. and Israel jurisdiction. Tefron Ltd., Hi-Tex and Macro (the Israeli Companies) may be subject to examination by the Israel tax authorities for fiscal years 2001 through 2006. Tefron USA (the U.S. subsidiary) may be subject to examination by the U.S. Internal Revenue Service ("IRS"). El-Masira file income tax returns to the tax authorities in Jordan.

The Company adopted the provisions of FIN 48 effective January 1, 2007. The adoption did not have a significant impact on the results of operations or financial position.

NOTE 5: - LIENS, CONTINGENCIES AND COMMITMENTS

a. All bank debt is collateralized by a floating charge (a continuing charge on the Company's present and future assets but permitting the Company to dispose of such assets in the ordinary course of business) on all of the assets of the Company and its subsidiaries.

b. In accordance with the provisions of the Law for the Encouragement of Capital Investments, 1959, the Company and its subsidiaries in Israel received grants from the State of Israel in respect of investments in their plants. The conditions in the letters of approval extending the grants from the State of Israel primarily include, among others, the requirements that the investments be made according to the approved plan and that at least 30% of the investments be financed by outstanding share capital. Non-fulfillment of these conditions would require the refund of the grants to be linked to the Consumer Price Index in Israel from the date of receipt plus interest. To guarantee fulfillment of the conditions for receipt of the grants, the Company and its subsidiaries have recorded floating charges on all of their assets in favor of the State of Israel.

c. Legal proceedings:

A former employee of the Company has filed lawsuits against the Company and three of its former or current officers, with the Israeli District Court and the Israeli Labor Law Court, seeking damages in the amount of approximately $1,700, in connection with damages allegedly incurred by him as a result of his imprisonment in Egypt. The matter is at a preliminary stage and the Company's management believes that the claim is without merit and should be dismissed, and thus no accrual was made in the financial statements.

Except as provided above, there are no material pending legal proceedings, other than litigation incidental in the ordinary course of business to which the Company or any of its subsidiaries are subject.

NOTE 6: - STOCK-BASED COMPENSATION

The Company recognized share-based compensation expense of $186 and $336 in the six month period ended June 30, 2007 and 2006, respectively. The Company determines fair value of such awards using the Black-Scholes option pricing model.

No options were granted by the Company during the six month period ended June 30, 2007.

The following weighted average assumptions were used to value Tefron's grants through the six month period ended June 30, 2006: 4 years expected life; expected stock volatility of 37%; risk-free interest rate of 4.9%; and 0 expected dividend yield during the expected term.

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TEFRON LTD. AND ITS SUBSIDIARIES

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS

U.S. DOLLAR IN THOUSANDS (EXCEPT SHARE AND PER SHARE DATA)

NOTE 6:- STOCK-BASED COMPENSATION (CONT.)

A summary of the Company's share option activity is as follows:

| | SIX MONTHS ENDED JUNE 30, | | | --- | --- | --- | | | 2007 | | | | NUMBER OF OPTIONS | WEIGHTED AVERAGE EXERCISE PRICE | | Options outstanding at beginning of period | 1,830,875 | $ 5.24 | | Changes during the period: | | | | Granted | - | $ - | | Forfeited or cancelled | (391,512) | $ 5.03 | | Exercised | (20,333) | $ 4.35 | | Options outstanding at end of period | 1,419,030 | $ 5.31 | | Options exercisable at the end of the period | 1,152,304 | $ 4.80 |

NOTE 7:- INVENTORIES

	JUNE 30,
	2007
	UNAUDITED
Raw materials, accessories and packaging materials	$ 9,543
Work-in progress	9,173
Finished products	5,893
	$24,609

NOTE 8:- SEGMENT REPORTING

a. General information:

The Company has two production lines: knitted apparel ("Cut and Sew") and seamless apparel ("Seamless"). Unlike the Cut and Sew process, the Seamless process includes the utilization of a single machine that transforms yarn directly into a nearly complete garment.

The Company has two reportable segments:

• Intimate apparel and active wear manufactured using the Seamless process.
• Intimate apparel, active wear and swim wear manufactured using the Cut and Sew Process, mainly performed in Israel and through the purchase of finished products in China and Cambodia.

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TEFRON LTD. AND ITS SUBSIDIARIES

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS

U.S. DOLLAR IN THOUSANDS (EXCEPT SHARE AND PER SHARE DATA)

NOTE 8:- SEGMENT REPORTING (CONT.)

b. Reportable segments:

| | SIX MONTHS ENDED JUNE 30, 2007 (UNAUDITED) | | | | --- | --- | --- | --- | | | CUT & SEW

• ISRAEL | SEAMLESS | CONSOLIDATED | | Sales to unaffiliated customers | $ 42,052 | $ 47,322 | $ 89,374 | | Operating income | $ 2,683 | $ 3,312 | $ 5,995 | | Financial expenses, net | | | 457 | | Income before taxes on income | | | $ 5,538 | | Depreciation and amortization | $ 1,309 | $ 3,026 | $ 4,335 | | Identifiable and total assets at June 30, 2007 | $ 42,884 | $ 86,002 | $ 128,886 | | Corporate assets | | | 34,041 | | Total assets | | | $ 162,927 | | | SIX MONTHS ENDED JUNE 30, 2006 (UNAUDITED) | | | | | CUT & SEW
• ISRAEL | SEAMLESS | CONSOLIDATED | | Sales to unaffiliated customers | $ 45,753 | $ 53,343 | $ 99,096 | | Operating income | $ 5,985 | $ 8,145 | $ 14,130 | | Financial expenses, net | | | 1,016 | | Income before taxes on income | | | $ 13,114 | | Depreciation and amortization | $ 1,082 | $ 3,069 | $ 4,151 | | Identifiable and total assets at June 30, 2006 | $ 36,724 | $ 90,896 | $127,620 | | Corporate assets | | | 28,349 | | Total assets | | | $155,969 |

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TEFRON LTD. AND ITS SUBSIDIARIES

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS

U.S. DOLLAR IN THOUSANDS (EXCEPT SHARE AND PER SHARE DATA)

NOTE 8:- SEGMENT REPORTING (CONT.)

c. The Company's sales by geographic area are as follows:

| | SIX MONTHS ENDED JUNE 30, | | | --- | --- | --- | | | 2007 | 2006 | | | UNAUDITED | | | North America | $74,601 | $72,319 | | Europe | 8,848 | 20,833 | | Israel | 3,253 | 3,792 | | Other | 2,672 | 2,152 | | | $89,374 | $99,096 |

d. Sales to major customers:

A	39.3%	37.6%
B	22.1%	28.9%
C	13.2%	11.3%
	74.6%	77.8%

As of June 30, 2007 and 2006, major customer's balances were $20,846 and $19,771, respectively.

e. The Company's long-lived assets by geographic area are as follows:

| | SIX MONTHS ENDED JUNE 30, | | | --- | --- | --- | | | 2007 | 2006 | | | UNAUDITED | | | Israel | $69,325 | $71,765 | | Other countries | 6,718 | 6,598 | | | $76,043 | $78,363 |

f. Revenues are generated by the following products:

| | SIX MONTHS ENDED JUNE 30, | | | --- | --- | --- | | | 2007 | 2006 | | | UNAUDITED | | | Intimate apparel | $49,266 | $50,693 | | Active wear | 21,114 | 31,324 | | Swimwear | 18,994 | 17,079 | | | $89,374 | $99,096 |

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Created by 10KWizard www.10KWizard.comSource: TEFRON LTD, 6-K, October 22, 2007