EXHIBIT 99.1
FOR IMMEDIATE RELEASE
Tag-It Pacific, Inc.
Jonathan Markiles
818-444-4100
info@tagitpacific.com
TAG-IT PACIFIC, INC. REPORTS 2ND QUARTER FY 2003 RESULTS - RECORDS CONTINUED
IMPROVED SALES
Los Angeles, Ca. August 14, 2003 --Tag-It Pacific, Inc. (AMEX: TAG) today
reports that for the second quarter of fiscal 2003, net sales increased
$939,000, a 4.7% increase over 2nd quarter sales for 2002. Gross profit
increased to 26.4% from 25.1% for the same period last year. Net income for the
quarter was $701,000 with earnings per share equal to 7 cents.
Colin Dyne, CEO of Tag-It Pacific, Inc., commented: "Overall, we are very
pleased with the results of our second quarter. Most importantly, our efforts to
diversify our customer base has started to show results. Sales growth for the
quarter came from new business to new customers, and our sales concentration is
decreasing. Our new product mix is also resulting in improved gross margins.."
The results of our TEKFIT division were very positive, with sales to Levi
Strauss & Co., our exclusive customer in this division, being well ahead of
plan. Last quarter included the consumer launch of the "Individual FitTM"
waistband by Levi Dockers(R) brand, which utilizes our TEKFIT technology, and
the reception of the consumer to the product has been excellent. We have several
exciting additional products in the pipeline with Levis Strauss & Co. which we
expect to be in stores this year.
Our TALON division also continues to grow, particularly in Asia. During the 2nd
quarter, we achieved an increase in sales for TALON zippers in Asia. We also
experienced an increase in expenses relating to this expansion, including the
establishment of a stand-alone office facility in Hong Kong to serve as TALON'S
Asian headquarters, and experienced an increase in marketing expenses related to
the promotion of our new Oracle bases B2B e-commerce system. This new system is
expected to completed in early 2004"
ABOUT TAG-IT PACIFIC: Tag-It specializes in the distribution of a full
range of trim items to manufacturers of fashion apparel and licensed consumer
products, and specialty retailers and mass merchandiser brands. Tag-It acts as a
full service outsourced trim management department for manufacturers of fashion
apparel such as Tarrant Apparel Group and Azteca Production International.
Tag-it also serves as a specified supplier of trim items to specific brands,
brand licensees and retailers, including Levi Strauss & Co., Abercrombie &
Fitch, Express, The Limited, Miller's Outpost and Lerner, among others. Tag-It
has positioned itself as a fully integrated single-source supplier of a full
range of trim items for manufacturers of fashion apparel. The Company's business
focuses on servicing all of the trim requirements of its customers at the
manufacturing and retail brand level of the fashion apparel industry. Tag-It
offers customers its MANAGED TRIM SOLUTION(TM), an Internet-based, virtual trim
department, covering the complete management of ordering, production, inventory
management and just-in-time distribution of their trim and packaging
requirements.
ABOUT TALON INTERNATIONAL: Talon International, a wholly-owned
subsidiary of Tag-it Pacific, distributes zippers under its TALON brand name to
apparel brands and manufacturers such as VF Corporation, Tropical Sportswear,
Levi Strauss & Co., Abercrombie & Fitch, Target Stores, Wal-Mart, Express, among
others. In December 2001, Tag-it purchased the TALON trademark and trade names.
TALON is a 100-year-old brand, which is well known for quality and product
innovation. TALON was the original pioneer of the formed wire metal zipper for
the jeans industry and is a specified zipper brand for manufacturers in the
sportswear and outerwear markets. We have introduced a completely revised high
quality line of zippers, broadened distribution to Asia, Mexico and Central
America, negotiated with new distributors and initiated a new sales and
marketing effort for this brand. TALON is promoted both within our trim
packages, as well as a stand-alone product line. TALON enjoys tremendous brand
recognition and brand equity in the apparel industry worldwide.
ABOUT TEKFIT: In 2002, Tag-it created a new division under the TEKFIT
brand name. This division develops and sells apparel components that utilize the
patented Pro-Fit technology, including a stretch waistband. We market these
products to the same customers targeted by our MANAGED TRIM SOLUTION and TALON
zipper divisions.
FORWARD LOOKING STATEMENTS:
With the exception of the historical information, this press release contains
forward-looking statements, as referenced in the Private Securities Litigation
Reform Act. Forward-looking statements are inherently unreliable and actual
results may differ materially. Factors which could cause actual results to
differ materially from these forward-looking statements include the
unanticipated loss of one or more major customers, economic conditions, the
availability and cost of financing, the risk of a softening of customer
acceptance of the Company's products, risks of introduction by competitors of
trim management systems with similar or better functionality than our Managed
Trim Solution, pricing pressures and other competitive factors, potential
fluctuations in quarterly operating results, our management of potential growth
and the risks of expansion into new business areas. 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.
TAG-IT PACIFIC, INC.
Selected Balance Sheet Items
(all numbers in $000's)
December
June 30, 31,
2003 2002
------- -------
Accounts Receivable .................................... $25,107 $20,760
Inventories ............................................ $24,586 $23,105
Total Current Assets ................................... $52,718 $45,053
Total Assets ........................................... $63,838 $54,303
Line of Credit ......................................... $15,496 $16,182
Accounts Payable and Accrued Expenses .................. $12,786 $10,401
Total Current Liabilities .............................. $31,921 $30,233
Total Liabilities ...................................... $34,842 $32,940
Convertible Redeemable preferred stock Series C ........ $ 2,895 $ 2,895
Total Stockholders' Equity ............................. $26,101 $18,467
Total Liabilities and Equity ........................... $63,838 $54,303
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TAG-IT PACIFIC, INC.
Consolidated Statements of Income
(all numbers (excluding EPS) in $000's)
Three Months Ended Six Months Ended
June 30, June 30,
-------------------- --------------------
2003 2002 2003 2002
-------- -------- -------- --------
Net sales ...................... $ 20,732 $ 19,793 $ 35,090 $ 29,118
Cost of goods sold ............. 15,267 14,816 25,326 21,507
-------- -------- -------- --------
Gross profit ................ 5,465 4,977 9,764 7,611
Selling expenses ............... 1,246 578 2,075 973
General and administrative
expenses .................... 2,940 2,692 5,638 4,597
-------- -------- -------- --------
Total operating expenses .... 4,186 3,270 7,713 5,570
-------- -------- -------- --------
Income from operations ......... 1,279 1,707 2,051 2,041
Interest expense, net .......... 343 306 664 568
-------- -------- -------- --------
Income before income taxes ..... 936 1,401 1,387 1,473
Provision for income taxes ..... 187 355 277 373
-------- -------- -------- --------
Net income ..................... $ 749 $ 1,046 $ 1,110 $ 1,100
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Less: Preferred stock dividends (47) (45) (94) (90)
-------- -------- -------- --------
Net income to common
shareholders ................ $ 702 $ 1,001 $ 1,016 $ 1,010
======== ======== ======== ========
Basic earnings per share ....... $ 0.07 $ 0.11 $ 0.10 $ 0.11
======== ======== ======== ========
Diluted earnings per share ..... $ 0.07 $ 0.10 $ 0.10 $ 0.11
======== ======== ======== ========
Weighted average number of
common shares outstanding:
Basic ....................... 10,209 9,282 9,818 9,149
======== ======== ======== ========
Diluted ..................... 10,737 9,592 10,169 9,448
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