-- Income from Operations was $289,000 in 2009, vs. a Loss from Operations
of ($6.0) million in 2008.
-- Sales for the full year 2009 totaled $38.7 million, vs. $48.2 million
in 2008.
-- Sales increased 9% in Q4 2009 vs. Q4 2008.
Financial Results
Sales of Zipper and Trim products declined for the year 2009 as compared to
2008 by approximately 20% mainly due to the impact of the global recession
on the apparel industry and the related lower demand for Talon products.
"Given the severe sales challenges to our industry and to our company, we
were nevertheless pleased by our financial results overall, as we began
realizing the benefits of emphasizing new customer and product developments
along with the expense reduction actions we took at the beginning of 2009,"
said Lonnie Schnell, Talon's Chief Executive Officer.
Sales for 2009 totaled $38.7 million, representing a decline of $9.5
million or 20% from 2008. Sales for the fourth quarter of 2009 totaled $9.1
million, which was an increase of $757,000 or 9% from the same period in
2008. Zipper product sales were $21.3 million in 2009 compared to $28.4
million in 2008. For 2009 the Company reported Trim product sales of $17.3
million compared to $19.5 million for 2008. Tekfit product sales for 2009
were $61,000, reflecting a decline of $144,000 from 2008.
Sales for the quarter ended December 31, 2009 reflected an increase in
Zipper product sales of $320,000 or 8% over the same period in 2008, and an
increase in Trim product sales of $489,000 or 12% over the fourth quarter
of 2008. The sales increases were partially offset by a decline in Tekfit
product sales of $52,000. The fourth quarter 2009 sales increase reflects
modest improvements in the industry buying trends as retailers restocked
for early spring, and as orders began to emerge from new customers and
program nominations gained during 2009.
Gross margin for 2009 were 29.2% of sales as compared to 26.2% of sales for
2008. The Talon Zipper group for 2009 reflected gross margins of 22.3% of
sales as compared to 19.9% for the year in 2008. Gross margin in the Trim
product group for 2009 was 37.8% of sales compared to 35.2% of sales for
2008. For the fourth quarter of 2009 total gross margin was 30.8% of
sales, compared with 20.7% of sales for 2008. The gross margin increases
as a percent of sales are the result of improved sales mix by product
group, lower inventory obsolescence costs, and improved purchase and
delivery costs throughout.
Sales and marketing expenses for 2009 decreased $1.3 million as compared to
2008 and decreased as a percentage of sales by 1.3% to 7.0%. General and
administrative expenses for 2009 were $8.3 million, or 21.5% of sales, as
compared to $11.1 million, or 23.1% of sales, in 2008. The reduction in
Sales and Marketing and General and Administrative expenses was principally
the result of reduced staffing, lower sales volume, and reduced facility
and professional service costs. Total operating expenses for the year 2009
were $11.0 million, or $7.6 million lower than operating expenses for the
year 2008. Operating expenses in 2008 included impairment charges against
marketable securities and property and equipment of $3.5 million. There
were no impairment charges in calendar year 2009.
"While 2009 was a challenging year for virtually all businesses, it also
presented opportunities to sharpen our focus and deepen our relationships
with many select customers and suppliers. Consequently, not only were we
able to weather the severe economic storm of 2009, we strengthened our core
business and improved overall operating results despite the sharp revenue
decline," stated Mr. Schnell.
For 2009 income from operations was $289,000 as compared to a loss from
operations in 2008 of $5,962,000. The fourth quarter ended December 31,
2009 reflected a loss from operations of $209,000 as compared to a loss
from operations for the same period in 2008 of $3,986,000. The loss from
operations in 2008 included impairment charges for the year and the quarter
ended December 31, 2008 of $3,470,000 and $1,930,000, respectively.
A net loss of $2.7 million or ($0.13) per share was reported for the year
2009, as compared to a net loss of $8.4 million or ($0.41) per share in
2008. For the fourth quarter of 2009, a net loss of $0.9 million was
reported, as compared to a net loss of $4.7 million in the same period of
2008.
Conference Call
Talon International will hold a conference call on Monday, March 29, 2010,
to discuss its fourth quarter and year-end 2009 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 their 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, March 29, 2010 Time: 4:30 pm Eastern (1:30 pm Pacific) Domestic callers: 1-800-895-0231 International callers: 1-785-424-1054 Conference ID#: 7TALONA replay of the call will be available later that evening and will be accessible until May 15, 2010. The replay call-in number is 1-800-677-7320 for domestic callers and 1-402-220-0666 for international. Passcode 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, Kohl's, J.C. Penney, Victoria's Secret, Tom Tailor, Abercrombie and Fitch, Polo Ralph Lauren, Phillips-Van Heusen, American Eagle and Juicy Couture. The company has offices and facilities in the United States, Hong Kong, China, and Bangladesh.
TALON INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended Twelve Months Ended
December 31, December 31,
-------------------------- --------------------------
(Unaudited) (Audited)
-------------------------- --------------------------
2009 2008 2009 2008
------------ ------------ ------------ ------------
Net sales $ 9,149,507 $ 8,392,841 $ 38,675,790 $ 48,170,980
Cost of goods sold 6,333,250 6,653,939 27,363,216 35,553,857
------------ ------------ ------------ ------------
Gross profit 2,816,257 1,738,902 11,312,574 12,617,123
Sales and marketing
expenses 678,000 918,000 2,712,814 3,982,124
General and
administrative
expenses 2,346,964 2,877,631 8,310,684 11,127,376
Impairment loss on
marketable
securities and
related note
receivable - - - 1,040,000
Impairment loss on
property and
equipment - 1,929,506 - 2,429,506
------------ ------------ ------------ ------------
Total operating
expenses 3,024,964 5,725,137 11,023,498 18,579,006
------------ ------------ ------------ ------------
Income (loss) from
operations (208,707) (3,986,235) 289,076 (5,961,883)
Interest expense,
net 746,380 619,315 2,727,919 2,436,675
------------ ------------ ------------ ------------
Net loss before
provision for
(benefit from)
income taxes (955,087) (4,605,550) (2,438,843) (8,398,558)
Provision for
(benefit from)
income taxes (12,939) 72,494 254,134 (39,772)
------------ ------------ ------------ ------------
Net loss $ (942,148) $ (4,678,044) $ (2,692,977) $ (8,358,786)
============ ============ ============ ============
Basic and diluted
net loss per
share $ (0.05) $ (0.23) $ (0.13) $ (0.41)
============ ============ ============ ============
Weighted average
number of common
shares Outstanding
- Basic and
diluted 20,291,433 20,291,433 20,291,433 20,291,433
============ ============ ============ ============
TALON INTERNATIONAL, INC.
CONSOLIDATED BALANCE SHEETS
(AUDITED)
December 31, December 31,
2009 2008
------------ ------------
Assets
Current Assets:
Cash and cash equivalents $ 2,264,606 $ 2,399,717
Accounts receivable, net 3,021,642 3,856,613
Inventories, net 1,679,302 1,669,149
Prepaid expenses and other current assets 240,554 473,955
------------ ------------
Total current assets 7,206,104 8,399,434
Property and equipment, net 2,280,586 2,491,899
Note receivable from related party, net - 200,000
Intangible assets, net 4,110,751 4,110,751
Other assets 236,386 400,494
------------ ------------
Total assets $ 13,833,827 $ 15,602,578
============ ============
Liabilities and Stockholders' Deficit
Current liabilities:
Accounts payable $ 6,337,368 $ 7,674,768
Accrued expenses 2,678,659 2,617,166
Revolver note payable 4,988,988 -
Term notes payable, net of discounts 9,876,114 -
Notes payable to related parties 265,871 222,264
Current portion of long term obligations 115,336 385,098
------------ ------------
Total current liabilities 24,262,336 10,899,296
Revolver note payable, net of current portion - 4,638,988
Term notes payable, net of discounts and
current portion - 8,067,428
Capital lease obligations, net of current
portion 23,477 1,910
Other liabilities 726,875 756,888
------------ ------------
Total liabilities 25,012,688 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 December 31, 2009
and 2008 20,291 20,291
Additional paid-in capital 55,070,568 54,769,072
Accumulated deficit (66,344,009) (63,651,032)
Accumulated other comprehensive income 74,289 99,737
------------ ------------
Total stockholders' deficit (11,178,861) (8,761,932)
------------ ------------
Total liabilities and stockholders' deficit $ 13,833,827 $ 15,602,578
============ ============
Contact Information: Company Contact Talon International, Inc. Rayna Hernandez Tel (818) 444-4128