-- Sales for the 3rd Quarter 2009 totaled $10.4 million, vs. $12.8
million in 2008.
-- Net loss for the 3rd Quarter totaled $647,000 in 2009, vs. a net loss
of $2,440,000 in 2008.
-- Net loss year-to-date totaled $1.8 million in 2009, vs. a net loss of
$3.7 million in 2008.
Financial Results
Sales for the third quarter of 2009 totaled $10.4 million, a decrease of
$2.4 million or 18% from the third quarter of 2008. The decline in sales
for the quarter from the same period in 2008 was a direct result of the
global decline in the apparel industry. For the third quarter of 2009 the
Company reported Talon® zipper sales of $5.8 million as compared to $7.2
million for the same period in 2008. Trim product sales for the third
quarter of 2009 were $4.6 million, as compared to $5.5 million for the same
period in 2008, and Tekfit product sales for the third quarter were $10,000
compared to $95,000 in 2008.
Sales for the nine months ended September 30, 2009 were $29.5 million as
compared to $39.8 million for the same period in 2008, a decrease of $10.3
million or 26%. Talon® zipper sales for the first nine months of 2009
totaled $16.9 million as compared to $24.3 million in the prior year. Trim
product sales for the first nine months of 2009 were $12.6 million, a
decrease of $2.8 million from the same period in 2008. Tekfit product
sales for the first nine months of 2009 were $47,000 compared to $139,000
for the first nine months of 2008.
"Despite the severe impact the global recession has had on the apparel
industry in 2009 we are beginning to see signs of improvement," said Lonnie
Schnell, Talon's CEO. "Our third quarter year-to-year revenue comparisons
were slightly better than the second quarter and the second quarter was
improved over the first. In our view, the initial panic and elimination of
retail inventories at the end of 2008 has passed, and we believe demand at
the retail and wholesale levels is beginning to build as consumer
confidence improves."
For the third quarter of 2009, the Company reported a net loss of $647,000
or $0.03 per share, as compared to net loss of $2,440,000 or $0.12 per
share for the third quarter in 2008. For the nine months ended September
30, 2009 the Company reported a net loss of $1.8 million or $0.09 per
share, as compared to a net loss of $3.7 million or $0.18 per share for the
nine months ended September 30, 2008.
"In anticipation of the economic decline in 2009 we took sharp measures
early in the year to reduce our costs and position our company for improved
earnings as the recession drew to an end. We are seeing the benefit of
these actions now, as our year-to-date income from operations exceeds the
results in 2008 by nearly $2.0 million despite the decreased revenues,"
said Schnell.
Selling expenses for the third quarter of 2009 were $430,000 reflecting a
reduction of $447,000 compared to the same period in 2008. Selling expenses
for the nine months ended September 30, 2009 were $1,477,000 compared to
$2,365,000 for the same period in 2008, for a reduction of $888,000.
General and administrative expenses for the third quarter of 2009 were
$2,320,000 reflecting a decrease of $198,000 compared to the third quarter
in 2008. General and administrative expenses for the nine months ended
September 30, 2009 were $6,521,000 as compared to $8,948,000 for the same
period in 2008, representing a year-to-date reduction of $2,427,000. The
reductions in selling and general and administrative expenses are
principally attributable to reductions in our global workforce and
associated costs to align our costs with current sales levels. In addition
to those savings, operating expenses in the third quarter of 2008 included
$1,540,000 in charges associated with losses on marketable securities and
the impairment of idle equipment while no such charges were required in
2009.
The net loss for the third quarter and first nine months of 2009 includes
net interest expense of $684,000 and $1,982,000, respectively. The
interest expense for 2009 reflects an increase of $59,000 and $164,000 for
the third quarter and nine months ended September 30, 2009, respectively,
as compared to net interest expense for the same periods in 2008. The net
loss for the quarter and the nine months includes income tax expense of
$164,000 for the third quarter of 2009 and $267,000 for the nine months
ended September 30, 2009. The income tax expense is associated with
foreign operations. For the three months ended September 30, 2008 the
foreign income tax expense was $99,000 and there was a net tax benefit of
$112,000 for the nine months ended September 30, 2008.
Conference Call
Talon International will hold a conference call on Monday, November 16,
2009, to discuss its third 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, November 16, 2009 Time: 4:30 p.m. Eastern Time (1:30 p.m. Pacific Time) Domestic callers: 1-800-895-0231 International callers: 1-785-424-1054 Conference ID#: 7TALONA replay of the call will be available after 7:30 p.m. Eastern Time on the same day and until December 16, 2009:
Toll-free replay number: 1-800-283-5758 International replay number: 1-402-220-0863Pass 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 and 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 Bangladesh.
TALON INTERNATIONAL, INC.
Consolidated Statements of Operations
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
-------------------------- --------------------------
2009 2008 2009 2008
============ ============ ============ ============
Net sales $ 10,426,764 $ 12,772,021 $ 29,526,283 $ 39,778,139
Cost of goods sold 7,476,061 9,552,669 21,029,966 28,899,918
------------ ------------ ------------ ------------
Gross profit 2,950,703 3,219,352 8,496,317 10,878,221
Selling expenses 430,203 877,593 1,477,112 2,365,421
General and
administrative
expenses 2,319,592 2,518,048 6,521,422 8,948,448
Loss on marketable
securities - 1,040,000 - 1,040,000
Impairment loss on
idle equipment - 500,000 - 500,000
------------ ------------ ------------ ------------
Total operating
expenses 2,749,795 4,935,641 7,998,534 12,853,869
Income (loss) from
operations 200,908 (1,716,289) 497,783 (1,975,648)
Interest expense,
net 683,501 624,716 1,981,539 1,817,360
------------ ------------ ------------ ------------
Loss before
provision for
(benefit from)
income taxes (482,593) (2,341,005) (1,483,756) (3,793,008)
Provision for
(benefit from)
income taxes 164,563 99,150 267,073 (112,266)
------------ ------------ ------------ ------------
Net loss $ (647,156) $ (2,440,155) $ (1,750,829) $ (3,680,742)
============ ============ ============ ============
Basic net loss per
share $ (0.03) $ (0.12) $ (0.09) $ (0.18)
============ ============ ============ ============
Diluted net loss
per share $ (0.03) $ (0.12) $ (0.09) $ (0.18)
============ ============ ============ ============
Weighted average
number of common
shares outstanding:
Basic 20,291,433 20,291,433 20,291,433 20,291,433
============ ============ ============ ============
Diluted 20,291,433 20,291,433 20,291,433 20,291,433
============ ============ ============ ============
TALON INTERNATIONAL, INC.
Consolidated Balance Sheets
September 30, December 31,
2009 2008
------------- -------------
Assets (Unaudited)
Current Assets:
Cash and cash equivalents $ 1,785,750 $ 2,399,717
Accounts receivable, net 3,752,368 3,856,613
Inventories, net 1,633,895 1,669,149
Prepaid expenses and other current assets 601,377 473,955
------------- -------------
Total current assets 7,773,390 8,399,434
Property and equipment, net 2,090,798 2,084,244
Equipment held for sale 349,767 407,655
Due from related parties 200,000 200,000
Intangible assets, net 4,110,751 4,110,751
Other assets 230,097 400,494
------------- -------------
Total assets $ 14,754,803 $ 15,602,578
============= =============
Liabilities and Stockholders' Deficit
Current liabilities:
Accounts payable $ 6,645,002 $ 7,674,768
Accrued legal costs 454,706 383,075
Other accrued expenses 2,314,143 2,292,681
Revolver note payable 4,988,988 -
Term notes payable, net of discounts 9,485,008 -
Demand notes payable to related parties 227,582 222,264
Current portion of capital lease
obligations 76,404 182,444
Current portion of notes payable 60,480 144,064
------------- -------------
Total current liabilities 24,252,313 10,899,296
Capital lease obligations, net of current
portion 24,835 1,910
Note payable to related party, net of current
portion 35,967 -
Revolver note payable, net of current portion - 4,638,988
Term notes payable, net of discounts and
current portion - 8,067,428
Other long term liabilities 722,900 756,888
------------- -------------
Total liabilities 25,036,015 24,364,510
------------- -------------
Commitments and contingencies
Stockholders' Deficit:
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 September 30, 2009 and December 31, 2008 20,291 20,291
Additional paid-in capital 55,018,775 54,769,072
Accumulated deficit (65,401,861) (63,651,032)
Accumulated other comprehensive income 81,583 99,737
------------- -------------
Total stockholders' deficit (10,281,212) (8,761,932)
------------- -------------
Total liabilities and stockholders' deficit $ 14,754,803 $ 15,602,578
============= =============
Contact Information: Company Contact Talon International, Inc. Rayna Hernandez Tel (818) 444-4128