SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
August 10, 2006
Date of Report (Date of earliest event reported)
HIRSCH INTERNATIONAL CORP.
(Exact name of Registrant as specified in its charter)
Delaware 0-23434 11-2230715
(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification Number)
200 Wireless Boulevard
Hauppauge, New York 11788
(631) 436-7100
(Registrant's telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
[ ] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17CFR240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Section 2 FINANCIAL INFORMATION
Item 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION
On August 10, 2006, Hirsch International Corp. announced its financial
results for the fiscal quarter ended June 30, 2006. A copy of the press release
is furnished with this report following the signature page and is incorporated
in this Item 2.02 by reference. The information in this report and the attached
press release shall not be deemed filed for purposes of Section 18 of the
Securities Exchange Act of 1934, nor shall it be deemed incorporated by
reference in any filing under the Securities Act of 1933, except as shall be
expressly stated by specific reference in such filing.
Item 9.01. FINANCIAL STATEMENTS AND EXHIBITS
(c) EXHIBITS
99.1 Press Release dated August 10, 2006
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 hereunto duly authorized.
HIRSCH INTERNATIONAL CORP.
By: /s/ Beverly Eichel
----------------------------------------
Beverly Eichel
Executive Vice President - Finance,
Chief Financial Officer and Secretary
Dated: August 11, 2006
Exhibit 99.1
Hirsch Reports Continued Improvement In 2nd Quarter 2006
Increases in Net Sales, Gross Profit, Net Income Drive Growth
HAUPPAUGE, N.Y. - August 10, 2006 - Hirsch International Corp. (NASDAQ: HRSH),
the leading provider of advanced embroidery systems and related support services
in the United States, reported its financial results for the second quarter and
five months ended June 30, 2006. Highlights of those results are as follows:
o Net sales were $13.7 million for the quarter ended June 30, 2006, an
improvement of $1.1 million or 8.7% over net sales of $12.6 million
for last year's fiscal second quarter which ended July 30, 2005. For
the five months ended June 30, 2006, net sales were $22.3 million
versus $26.3 million for the prior six-month period which ended July
30, 2005.
o For the quarter ended June 30, 2006, gross profit increased $0.2
million to $4.6 million from $4.4 million for the quarter ended July
30, 2005. For the five months ended June 30, 2006, gross profit was
$7.6 million or 34.2% of net sales as compared to $8.6 million for the
six months ended July 30, 2005 or 32.7% of net sales.
o Selling, general and administrative expenses and overall operating
expense increased $0.2 million from $3.8 million to $4.0 million for
the quarter ended June 30, 2006 as compared to the fiscal quarter
ended July 30, 2005 and decreased $1.2 million for five months ended
June 30, 2006 as compared to the six months ended July 30, 2005.
Included in the six months ended July 30, 2005, was a $147,000 charge
for severance costs associated with the Company's continuing
reorganization.
o For the quarter ended June 30, 2006 the Company reported net income of
$0.6 million, an improvement of $0.1 million from net income of $0.5
million for the quarter ended July 30, 2005. For the five months ended
June 30, 2006, the Company reported net income of $0.9 million, an
increase of $0.3 million from the net income of $0.6 million for the
six months ended July 30, 2005.
"I am very proud of the entire Hirsch team and their continued dedication and
focus on serving our customers, resulting in yet another positive quarter for
the Company," said Paul Gallagher, President and Chief Executive Officer of
Hirsch. "The Company continues to experience growth at both the top and bottom
lines. In addition, the signing of our recent distribution agreement with MHM
adds to our capacity, making us the exclusive distributor of the world's finest
screen printing equipment throughout the U.S and Canada. Our reach has now been
expanded into a new, yet synergistic industry and we look forward to continue
building value for the Company and our stockholders."
About Hirsch International Corporation
Hirsch is the leading provider of advanced computerized commercial embroidery
systems and support services in the United States. The Company offers single and
multi-head embroidery machines; proprietary application software; embroidery
parts, supplies and accessories; and technical service and support. Hirsch's
customers include contract embroiderers, manufacturers of apparel and fashion
accessories, retail stores, and embroidery entrepreneurs. The Company is the
country's leading single source provider of Tajima embroidery systems, marketing
under the name "Tajima USA Sales & Support by Hirsch."
Additionally, on August 2, 2006 Hirsch announced that it has entered into a ten
year distribution agreement with MHM Siebdruckmaschinen GmbH for exclusive
distribution and support of MHM screen printing equipment throughout North
America. MHM's product line will now be marketed under the name "MHM North
America by Hirsch".
Hirsch, lead by a strong and experienced management team, is focused on
continuing to grow its core business through sound acquisitions of products and
processes, as well as through related business ventures in which the Company can
build and maximize stockholder value. The Company was founded in 1970 and is
headquartered in Hauppauge, NY.
Safe Harbor Statement
Safe Harbor Statement
Except for historical information contained herein, the matters set forth in
this news release are forward-looking statements. The Company noted that
forward-looking statements set forth above involve a number of risks and
uncertainties that could cause actual results to differ materially from any such
statement, including, without limitation, the risks and uncertainties discussed
under the caption "Risk Factors" in the Company's Form 10-K for fiscal 2006,
which discussion is incorporated herein by reference.
Contacts:
Hirsch International Corp.
Investor Relations
631.701.2345
The Investor Relations Group
Investors:
Kevin Murphy/Adam Holdsworth
212.825.3210
kmurphy@investorrelationsgroup.com
aholdsworth@investrelationsgroup.com
HIRSCH INTERNATIONAL CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
June 30, January 28,
---------------------- --------------------
2006 2006
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ASSETS (unaudited)
Cash and cash equivalents (includes restricted cash) $ 13,269 $13,676
Accounts receivable, net 5,159 4,929
Inventories, net 4,814 4,128
Other current assets 475 513
Property, plant and equipment, net 326 1,574
Other assets 1,536 1,534
---------------------- --------------------
TOTAL ASSETS $25,579 $26,354
====================== ====================
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Accounts payable and accrued expenses $ 9,316 $9,428
Customer deposits and other 436 430
Other current liabilities 60 1,270
Other long term liabilities - less current maturities 210 -
Deferred gain on sale of building - 608
---------------------- --------------------
TOTAL LIABILITIES 10,022 11,736
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TOTAL STOCKHOLDERS' EQUITY 15,557 14,618
---------------------- --------------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $25,579 $26,354
====================== ====================
HIRSCH INTERNATIONAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(All amounts in thousands, except per share data)
(unaudited)
Three Three Five Six
Months Months Months Months
Ended Ended Ended Ended
June 30, July 30, June 30, July 30,
2006 2005 2006 2005
-------------- ------------- ------------- -----------
NET SALES $13,660 $12,586 $22,305 $26,310
COST OF SALES 9,093 8,220 14,669 17,712
-------------- ------------- ------------- -----------
GROSS PROFIT 4,567 4,366 7,636 8,598
OPERATING EXPENSES
Selling, general and administrative expenses 4,020 3,845 6,828 7,809
Severance costs - - - 147
-------------- ------------- ------------- -----------
Total operating expenses 4,020 3,845 6,828 7,956
-------------- ------------- ------------- -----------
OPERATING INCOME 547 521 808 642
-------------- ------------- ------------- -----------
OTHER EXPENSE (INCOME) (48) 11 (79) 19
-------------- ------------- ------------- -----------
INCOME BEFORE PROVISION FOR INCOME 595 510 887 623
TAXES
INCOME TAX PROVISION 14 19 14 30
-------------- ------------- ------------- -----------
NET INCOME $581 $ 491 $873 $593
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EARNINGS PER SHARE:
Basic $0.07 $0.06 $0.10 $0.07
============== ============= ============= ===========
Diluted $0.06 $0.05 $0.09 $0.06
============== ============= ============= ===========
WEIGHTED AVERAGE NUMBER OF SHARES IN THE CALCULATION OF INCOME PER
SHARE
Basic 8,487 8,462 8,487 8,455
============== ============= ============= ===========
Diluted 9,649 9,408 9,649 9,401
============== ============= ============= ===========