Talon International (TALN) 8-K Talon International, Inc. Reports

EXHIBIT 99.1

Talon International, Inc. Reports

First Quarter 2010 Financial Results

LOS ANGELES, Calif. — May 13, 2010 — Talon International, Inc. (OTCBB:TALN), a leading global supplier of zippers, apparel fasteners, trim and interlining products, reported financial results for the first quarter ended March 31, 2010.

Highlights

· Total Sales for the first quarter of 2010 increase 26% over the first quarter of 2009.

· Zipper Sales for the first quarter of 2010 increase 48% over the same period in 2009.

Financial Results

Sales for quarter ended March 31, 2010 totaled $8.2 million, representing an increase of $1.7 million or 26.4% from the same period in 2009. Zipper product sales were $4.9 million in the quarter ended March 31, 2010, an increase of 48.1% from the same period in 2009. For the quarter ended March 31, 2010 the Company reported Trim product sales of $3.3 million compared to $3.2 million for quarter ended March 31, 2009.  The Tekfit product line generated no sales for the quarter ended March 31, 2010, reflecting a decline of $14,000 from the quarter ended March 31, 2009.

The sales increase in the first quarter 2010 reflects improved worldwide economic conditions for Talon’s customers in the apparel industry, higher demand for our Talon zipper products, successful introductions of new products at existing customers, and the addition of new customers.

The gross margin for the quarter ended March 31, 2010 was 29.6% of sales as compared to 30.5% for the same period in 2009.  The Talon Zipper group for the quarter ended March 31, 2010 reflected a gross margin of 26.6% of sales as compared to 24.3% for the same period in 2009.  Gross margin in the Trim product group for quarter ended March 31, 2010 was 34.7% of sales compared to 36.9% of the same period in 2009.

Sales and marketing expenses for quarter ended March 31, 2010 were $0.7 million, or 8.0% of sales, as compared to $0.7 million, or 10.8% of sales, for the same period in 2009.  Sales expenses decreased as a percentage of sales primarily due to lower related expenses in mainland China and a reduction in regional support staffing.  General and administrative expenses for the quarter ended March 31, 2010 were $2.0 million or 23.7% of sales, as compared to $1.8 million or 27.9% of sales for the same period in 2009.  The increase in general and administrative expenses mainly reflected higher personnel expenses.

For quarter ended March 31, 2010 the loss from operations was $176,000 as compared to $535,000 for the same period in 2009.  The improvement of $359,000 or 67.2% resulted from higher gross margins of $452,000 partially offset by slightly higher operating expenses of $93,000.

The net loss of $0.8 million or ($0.04) per share for the quarter ended March 31, 2010 compared favorably to a net loss of $1.2 million or ($0.06) per share for the same period in 2009.

Conference Call

Talon International will hold a conference call on Thursday, May 13, 2010, to discuss its first quarter 2010 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: Thursday, May 13, 2010

Time: 4:30 pm Eastern (1:30 pm Pacific)

Domestic callers: 1-800-895-1241

International callers: 1-785-424-1056

Conference ID#: 7TALON

A replay of the call will be available later that evening and will be accessible until June 11, 2010. The replay call-in number is 1-800-753-4606 for domestic callers and 1-402-220-2103 for international. Passcode not required.

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 Ban gladesh.

Company Contact

Talon International, Inc.

Rayna Hernandez

Tel (818) 444-4128

raynah@talonzippers.com

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TALON INTERNATIONAL, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	Three Months Ended March 31,
	2010			2009
Net sales	$	8,235,260		$	6,515,754
Cost of goods sold		5,798,567			4,531,587
Gross profit		2,436,693			1,984,167
Sales and marketing expenses		656,822			701,814
General and administrative expenses		1,955,573			1,817,523
Total operating expenses		2,612,395			2,519,337
Loss from operations		(175,702	)		(535,170	)
Interest expense, net		707,197			636,951
Net loss before provision for (benefit from) income taxes		(882,899	)		(1,172,121	)
Provision for (benefit from) income taxes		(35,256	)		6,407
Net loss	$	(847,643	)	$	(1,178,528	)
Basic and diluted net loss per share	$	(0.04	)	$	(0.06	)
Weighted average number of common shares
Outstanding - Basic and diluted		20,291,433			20,291,433

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TALON INTERNATIONAL, INC.

CONSOLIDATED BALANCE SHEETS

	March 31, 2010			December 31, 2009
	(Unaudited)
Assets
Current Assets:
Cash and cash equivalents	$	1,757,772		$	2,264,606
Accounts receivable, net		3,501,645			3,021,642
Inventories, net		1,549,533			1,679,302
Prepaid expenses and other current assets		115,061			240,554
Total current assets		6,924,011			7,206,104
Property and equipment, net		2,066,825			2,280,586
Intangible assets, net		4,110,751			4,110,751
Other assets		282,824			236,386
Total assets	$	13,384,411		$	13,833,827
Liabilities and Stockholders’ Deficit
Current liabilities:
Accounts payable	$	6,392,357		$	6,337,368
Accrued expenses		2,632,518			2,678,659
Revolver note payable		4,988,988			4,988,988
Term notes payable, net of discounts		10,288,595			9,876,114
Notes payable to related parties		268,195			265,871
Current portion of long term obligations		93,968			115,336
Total current liabilities		24,664,621			24,262,336
Capital lease obligations, net of current portion		22,036			23,477
Other liabilities		689,565			726,875
Total liabilities		25,376,222			25,012,688
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 March 31, 2010 and December 31, 2009		20,291			20,291
Additional paid-in capital		55,115,597			55,070,568
Accumulated deficit		(67,191,652	)		(66,344,009	)
Accumulated other comprehensive income		63,953			74,289
Total stockholders’ deficit		(11,991,811	)		(11,178,861	)
Total liabilities and stockholders’ deficit	$	13,384,411		$	13,833,827

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