EXHIBIT 99.5
FOR IMMEDIATE RELEASE
Tag-It Pacific, Inc.
Jonathan Markiles, VP Marketing
818-444-4100
info@tagitpacific.com
TAG-IT PACIFIC, INC. RAISES $25 MILLION IN PRIVATE PLACEMENT TRANSACTION
GIVES 2004 GUIDANCE, HIGHER THAN PUBLISHED ESTIMATES
FINANCING IS EXPECTED TO FULLY FUND FORCASTED REVENUE GROWTH
LOS ANGELES, CA - December 18, 2003 --- Tag-It Pacific, Inc.
(AMEX:TAG), a leading provider of trim products and services to the apparel
industry, today announced that it has closed a sale of 572,818 shares of
non-voting Series D Convertible Preferred Stock, at $44.00 per share, to
institutional investors and individual accredited investors. The offering raised
aggregate net proceeds to the company of approximately $23.2 million, after
payment of commissions and expenses. The offering was managed by Houston-based
investment bank, Sanders Morris Harris Inc.
In connection with the equity financing, Tag-It filed a preliminary
proxy statement with the Securities and Exchange Commission for a special
stockholders' meeting to be held in February 2004, at which the Company will
seek stockholder approval, in compliance with the listing requirements of the
American Stock Exchange, of the issuance of 10 shares of common stock upon
conversion of each share of preferred stock. Stockholders, including members of
management, holding approximately 51% of the company's outstanding voting
securities, have agreed with Sanders Morris Harris to vote their shares in favor
of the conversion of the preferred stock into common stock at the stockholders'
meeting.
Colin Dyne, CEO of Tag-It commented, "We are extremely pleased to have
been able to complete this transaction. This financing puts us in a position to
continue to aggressively pursue our strategic initiatives in all three of
Tag-It's operating divisions. These initiatives include our global partnership
with Coats thread, the global launch of TALON brand zippers, the launch and
expansion of TEKFIT waistband products, and lastly, the upcoming launch of
TRIMNET, our Oracle based e-sourcing system. This new Oracle based e-sourcing
system will allow Tag-It to seamlessly supply complete trim packages to apparel
brands, retailers and manufacturers around the world, greatly expanding upon the
Company's success in offering complete trim packages to customers in Mexico over
the past several years. This financing has provided us with the needed funds to
invest in each of these initiatives."
GUIDANCE FOR 2004
Tag-It is providing guidance for 2004. We estimate that sales for 2004
will represent significant year-over-year growth. We expect to generate revenues
of between $85-$93 million. Net income is estimated to be between $6-$8 million.
We expect revenues for 2003 to remain flat or slightly above 2002 levels. We
also anticipate write-downs in the fourth quarter of 2003 of approximately $3-$4
million resulting from discontinued operations in Mexico, including a write-down
of inventory.
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. 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,
VFCorp., Jones Apparel, Hurley, 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, Walmart, Tommy Hilfiger,
and 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. TALON is promoted both
within Tag-It's 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. Tag-It markets these
products to the same customers targeted by its MANAGED TRIM SOLUTION and TALON
zipper divisions.
ABOUT SANDERS MORRIS HARRIS: Headquartered in Houston with major
offices in Los Angeles and New York, Sanders Morris Harris Inc. is the
investment banking subsidiary of publicly traded Sanders Morris Group Inc., a
financial services firm. More information is available at the company's web
site: www.smhhou.com. For further information, please contact Dean Oakey,
Managing Director (Los Angeles Office), 213.253.2282, or Jonah Sulak (Houston
Office), 713.250.4291.
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.
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