EXHIBIT 99.1
PRESS RELEASE
TAG-IT PACIFIC, INC. ANNOUNCES FISCAL 2003 RESULTS
LOS ANGELES--March 30, 2004--Tag-It Pacific, Inc. (AMEX: TAG) is pleased to
report that for the fiscal year ended December 31, 2003 net sales increased
approximately $4.4 million or 7% to $64.4 million compared to $60.1 million for
fiscal 2002. The Company reported a loss per share of ($0.46) versus earnings of
$0.14 per share for FY 2002. Restructuring charges of $7.7 million, or
approximately $0.72 per share were recorded for the year.
Colin Dyne, CEO of Tag-It commented, "Fiscal year ended 2003 was an important
year for Tag-It as we made significant strides in assembling the key components
for the successful implementation of our business model. Most significantly in
2003, we implemented our new ERP system from Oracle, expanding our Managed Trim
Solution with the addition of a new E-Commerce application called TrimNet(TM),
entered into a full-package supply arrangement with a large jeans manufacturer,
completed two private placement transactions that contributed approximately $29
million to equity, implemented our restructuring plan in the fourth quarter of
2003 and successfully diversified our customer base to decrease our reliance on
our larger Mexico customers.
"Our new TrimNet system is a state-of-the-art, Internet based trim management
system that includes product development, online catalogs, trim
bill-of-materials and order management. TrimNet is unlike anything offered by
our competitors. TrimNet allows Tag-It to deliver enhanced global trim
management to large customers, controlling all aspects of our clients' trim
supply chain. We have already entered into an agreement with a major retailer to
utilize all aspects of TrimNet and to migrate their business from item by item
purchases to purchases of complete trim kits including logo trim, Talon zippers
and thread.
"During the fourth quarter of 2003, we implemented a plan to restructure certain
business operations. In accordance with the restructuring plan, we incurred
costs related to the reduction of our Mexico operations, including the
relocation of our Florida operations to North Carolina and the downsizing of our
corporate operations by eliminating certain corporate expenses related to
operations, sales and marketing and general and administrative expenses. We
reduced our operations in Mexico in response to an anticipated reduction in
sales volume from our larger Mexico customers, our efforts to decrease our
reliance on our larger Mexico customers and our difficulty in obtaining
financing for assets located outside the U.S. We believe these restructuring
efforts will reduce our working capital requirements and improve our cash flow."
About Tag-It Pacific, Inc.
Tag-It specializes in the distribution of a full range of trim items to
manufacturers of fashion apparel, specialty retailers and mass merchandisers.
Tag-It acts as a full service outsourced trim management department for
manufacturers of fashion apparel such as Abercrombie & Fitch, Tarrant Apparel
Group, Kentucky Apparel 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. In addition, Tag-It
distributes zippers under its Talon brand name to manufacturers for apparel
brands and retailers such as Levi Strauss & Co., Wal-Mart, JC Penny and Tropical
Sportswear, among others. 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. These
products are marketed 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. Examples of forward-looking statements in this
press release include the benefits of our new TrimNet system, and the
anticipated reduction in our working capital requirements and improvements in
cash flow resulting from our restructuring efforts. 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 31,
2003 2002
------- -------
Cash ................................................... $14,443 $ 285
Accounts Receivable .................................... $19,262 $20,512
Inventories ............................................ $17,097 $23,105
Total Current Assets ................................... $55,726 $44,805
Total Assets ........................................... $67,770 $54,055
Line of Credit ......................................... $ 7,096 $15,934
Accounts Payable and Accrued Expenses .................. $ 9,552 $10,401
Total Current Liabilities .............................. $19,260 $29,985
Total Liabilities ...................................... $21,312 $32,693
Convertible Redeemable preferred stock Series C ........ $ 2,895 $ 2,895
Total Stockholders' Equity ............................. $43,564 $18,467
Total Liabilities and Equity ........................... $67,770 $54,055
TAG-IT PACIFIC, INC.
Consolidated Statements of Operations
(all numbers (excluding EPS) in $000's)
Year Ended
December 31,
2003 2002
-------- --------
Net sales ........................................ $ 64,443 $ 60,073
Cost of goods sold ............................... 47,890 44,633
-------- --------
Gross profit ................................. 16,553 15,440
Selling expenses ................................. 3,706 2,126
General and administrative expenses .............. 11,028 10,270
Restructuring charges ............................ 7,700 --
-------- --------
Total operating expenses ..................... 22,434 12,396
(Loss) income from operations .................... (5,881) 3,044
Interest expense, net ............................ 1,196 1,269
-------- --------
(Loss) income before income taxes ................ (7,077) 1,775
(Benefit) provision for income taxes ............. (2,332) 279
-------- --------
Net (loss) income ................................ $ (4,745) $ 1,496
-------- --------
Less: Preferred stock dividends .................. (194) (184)
-------- --------
Net (loss) income to common shareholders ......... $ (4,939) $ 1,312
-------- --------
Basic (loss) earnings per share .................. $ (0.46) $ 0.14
-------- --------
Diluted (loss) earnings per share ................ $ (0.46) $ 0.14
-------- --------
Weighted average number of common
shares outstanding:
Basic ........................................ 10,651 9,232
-------- --------
Diluted ...................................... 10,651 9,531
-------- --------
- --------------------
CONTACT:
Tag-It Pacific, Inc.
Jonathan Markiles, 818-444-4100
info@tagitpacific.com