-- Sales for the 1st Quarter 2009 totaled $6.5 million vs. $10.0 million
in 2008.
-- Net loss totaled $1.2 million in 2009 vs. $1.8 million in 2008.
Financial Results
Sales for the first quarter of 2009 totaled $6.5 million, a decrease of
$3.5 million (or 35%) from 2008. The decrease in sales for the quarter was
a direct result of the impact of the economic decline on the apparel
industry and the corresponding lower demand for apparel trim products that
their suppliers purchase from the Company. For the first quarter of 2009
the Company reported Talon® zipper sales of $3.3 million as compared to
$5.6 million for the same period in 2008. Trim product sales for the first
quarter of 2009 were $3.2 million, as compared to $4.4 million for the same
period in 2008, and TekFit product sales for the first quarter were $14,000
compared to $8,000 in 2008.
"The severe global economic decline late in 2008 continued its impact on
consumer spending well into the first quarter of 2009 and this translated
into much lower demand for our zipper and trim products," said Lonnie
Schnell, Talon's CEO. "As consumers restricted their spending at the
retail level, the retail brands restricted their buying even more as they
sought to liquidate as much inventory at retail as possible."
The apparel industry is expected to be adversely impacted by this recession
for most of 2009, and into early 2010, depending upon the global economic
trends. "The effect of this recession on sales of our products will
correlate with the overall impact of the retail sales results of our
customers," continued Schnell.
For the first quarter of 2009 a net loss of $1.2 million or ($0.06) per
share was reported by the Company, as compared to a net loss of $1.8
million or ($0.09) per share for the first quarter in 2008.
"In response to the economic decline the Company has taken steps to
significantly reduce its operating costs, and curtail capital and
discretionary spending," said Schnell. "We have also implemented increased
sales incentives and worked to secure preferred supplier status with our
core customers."
Selling expenses for the first quarter of 2009 were $515,000, reflecting a
reduction of $204,000 compared to the same period in 2008. General and
administrative expenses for the first quarter of 2009 were $2.0 million, as
compared to $3.3 million for the first quarter of 2008. The decrease of
$1.3 million in general and administrative expenses is partially
attributable to $724,000 of severance charges associated with former
officers recorded in the first quarter of 2008. The remaining decrease
from the first quarter of 2008, approximately $576,000, principally
represents reductions in employees and associated costs that were made in
late 2008 and early in the first quarter of 2009.
Net interest expense for the first quarter of 2009 was $637,000, as
compared to $550,000 for the first quarter of 2008. The increased interest
cost in 2009 over 2008 was primarily the result of increased borrowings
under the debt facility with CVC California, LLC (formerly Bluefin Capital,
LLC).
Conference Call
Talon International will hold a conference call on Monday, May 18, 2009, to
discuss its first quarter financial results. Talon's CEO Lonnie D. Schnell
will host the call starting at 4:30 P.M. Eastern Time. A question and
answer session will follow the presentation.
To participate in the call, dial the appropriate number 5-10 minutes prior
to the start time, request the Talon International conference call and
provide the conference ID.
Date: Monday, May 18, 2009 Time: 4:30 pm Eastern (1:30 pm Pacific) Domestic callers: 1-800-862-9098 International callers: 1-785-424-1051 Conference ID#: 7TALONA replay of the call will be available later that evening and will be accessible until June 15, 2009. The replay call-in number is 1-800-688-7945 for domestic callers and 1-402-220-1370 for international. Pass code not required. Forward-Looking Statements This news release contains forward-looking statements made in reliance upon the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not guarantees of future performance and are inherently subject to uncertainties and other factors which could cause actual results to differ materially from the forward-looking statement. These statements are based upon, among other things, assumptions made by, and information currently available to, management, including management's own knowledge and assessment of the company's industry, competition and capital requirements, and the potential for growth in zipper sales and other products. Factors which could cause actual results to differ materially from these forward-looking statements include global economic conditions, pricing pressures and other competitive factors, our ability to reduce costs, and the unanticipated loss of major customers, and the level of acceptance of the company's products by retailers and consumers. These and other risks are more fully described in the company's filings with the Securities and Exchange Commission, including the Company's most recently filed Annual Report on Form 10-K and Quarterly Report on Form 10-Q, which should be read in conjunction herewith for a further discussion of important factors that could cause actual results to differ materially from those in the forward-looking statements. The company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. About Talon International, Inc. Talon International, Inc. is a global supplier of apparel fasteners, trim and interlining products to manufacturers of fashion apparel, specialty retailers, mass merchandisers, brand licensees and major retailers. Talon manufactures and distributes zippers and other fasteners under its Talon® brand, known as the original American zipper invented in 1893. Talon also designs, manufactures, engineers, and distributes apparel trim products and specialty waistbands under its trademark names, Talon, Tag-It and TekFit, to more than 60 apparel brands and manufacturers including Wal-Mart, J.C. Penney, Abercrombie & Fitch, Juicy Couture, Ralph Lauren, Victoria's Secret, Target Stores, and Express. The company has offices and facilities in the United States, Hong Kong, China, India and the Dominican Republic.
TALON INTERNATIONAL, INC.
Consolidated Statements of Operations
(Unaudited)
Three Months Ended
March 31,
--------------------------
2009 2008
------------ ------------
Net sales $ 6,515,754 $ 9,985,489
Cost of goods sold 4,531,587 7,227,524
------------ ------------
Gross profit 1,984,167 2,757,965
Selling expenses 515,544 719,963
General and administrative expenses 2,003,793 3,348,236
------------ ------------
Total operating expenses 2,519,337 4,068,199
------------ ------------
Loss from operations (535,170) (1,310,234)
Interest expense, net 636,951 549,514
------------ ------------
Loss before income taxes (1,172,121) (1,859,748)
Provision (benefit) for income taxes 6,407 (21,004)
------------ ------------
Net loss $ (1,178,528) $ (1,838,744)
============ ============
Basic loss per share $ (0.06) $ (0.09)
============ ============
Diluted loss per share $ (0.06) $ (0.09)
============ ============
Weighted average number of common shares
outstanding:
Basic 20,291,433 20,291,433
============ ============
Diluted 20,291,433 20,291,433
============ ============
TALON INTERNATIONAL, INC.
Consolidated Balance Sheets
March 31, December 31,
2009 2008
------------ ------------
(Unaudited)
Assets
Current Assets:
Cash and cash equivalents $ 1,123,027 $ 2,399,717
Accounts receivable, net 3,825,569 3,856,613
Inventories, net 2,019,580 1,669,149
Prepaid expenses and other current assets 644,075 473,955
------------ ------------
Total current assets 7,612,251 8,399,434
Property and equipment, net 2,240,047 2,084,244
Fixed assets held for sale 407,009 407,655
Due from related parties 200,000 200,000
Other intangible assets, net 4,110,751 4,110,751
Other assets 380,564 400,494
------------ ------------
Total assets $ 14,950,622 $ 15,602,578
============ ============
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 7,886,301 $ 7,674,768
Accrued legal costs 620,876 383,075
Other accrued expenses 2,117,416 2,292,681
Demand notes payable to related parties 224,037 222,264
Current portion of capital lease obligations 107,692 182,444
Current portion of notes payable 71,037 144,064
------------ ------------
Total current liabilities 11,027,359 10,899,296
Capital lease obligations, less current portion 16,601 1,910
Revolver note payable 4,638,988 4,638,988
Term note payable, net of discount 8,407,486 8,067,428
Other long term liabilities 762,907 756,888
------------ ------------
Total liabilities 24,853,341 24,364,510
------------ ------------
Stockholders' Equity:
Preferred stock Series A, $0.001 par value;
250,000 shares authorized; no shares issued
or outstanding - -
Common stock, $0.001 par value, 100,000,000
shares authorized; 20,291,433 shares issued
and outstanding at March 31, 2009 and at
December 31, 2008 20,291 20,291
Additional paid-in capital 54,809,898 54,769,072
Accumulated deficit (64,829,560) (63,651,032)
Accumulated other comprehensive income 96,652 99,737
------------ ------------
Total stockholders' equity (deficit) (9,902,719) (8,761,932)
------------ ------------
Total liabilities and stockholders' equity $ 14,950,622 $ 15,602,578
============ ============
Contact Information: Company Contact Talon International, Inc. Rayna Hernandez Tel (818) 444-4128