EXHIBIT 99.1
FOR IMMEDIATE RELEASE
TALON INTERNATIONAL REPORTS FOURTH QUARTER AND
YEAR-END 2007 FINANCIAL RESULTS
LOS ANGELES, CALIF. -- APRIL 15, 2008 -- Talon International, Inc. (OTCBB:TALN),
a leading global supplier of zippers, apparel fasteners, trim and interlining
products, reported financial results for the fourth quarter and year ended
December 31, 2007.
HIGHLIGHTS
o Sales for the full year 2007 totaled $40.5 million, vs. $48.8 million in
2006
o Net loss totaled $4.9 million in 2007, vs. net income of $309,000 in 2006
o $1.8 million in non-recurring charges in 2007
o Zipper product sales up 4% in Q4 2007 vs. Q4 2006; up 25% in FY2007 vs.
FY2006
FINANCIAL RESULTS
Sales for the full year 2007 totaled $40.5 million, a decline of $8.3 million
from 2006. Sales for the fourth quarter 2007 were $8.9 million, a decrease of
$1.6 million from the same period in 2006. The decline in sales for both the
quarter and the year was primarily attributable to a decrease in waistband
product sales following the expiration in late 2006 of an exclusive sales
contract. Waistband product sales for the full year 2007 were $682,000, as
compared to $9.3 million in 2006. There were no sales of waistband products in
the fourth quarter 2007, as compared to $1.4 million for the same period in
2006.
For the full year 2007 a net loss of $4.9 million or ($0.24) per share was
reported, as compared to net income of $309,000 or $0.02 per share in 2006. For
the fourth quarter, net loss of $0.9 million was reported, as compared to net
income of $45,000 in 2006.
"Fiscal year 2007 was a year of significant change and challenges for the
company," said Lonnie Schnell, who was appointed Talon's CEO in February 2008.
"The overall financial results for the year were disappointing, as several
aspects of our business did not develop at the rate anticipated. We also
absorbed several unexpected non-recurring charges. However, our overall business
strategy remains sound; our products are superior; and our long-term growth
opportunities are substantial."
"The loss of sales from the Tekfit product line had a significant impact on the
company in 2007," said Schnell. "While we anticipated a sharp decline in this
business in 2007 following the end of our exclusive contract in 2006, the sales
cycle for this product to new customers has been much longer than expected. We
remain confident and optimistic about the long-term potential for this product,
although we remain cautious about its potential contribution in 2008."
Talon zipper product sales for the fourth quarter and year ended December 31,
2007 increased 4% and 25%, respectively, as compared to of the fourth quarter
and full year of 2006. The improvement is attributable to the company's
expansion of its global footprint throughout Southeast Asia and winning new
nominations from major brand retailers. Said Schnell, "We are pleased with the
growth in our Talon zipper products for 2007, and believe there is strong growth
potential for these products as apparel makers welcome Talon as a global
supplier with a reputation for superior quality."
Sales of Talon Trim products declined for the fourth quarter and year ended
December 31, 2007 by 9% and 17%, respectively, as compared to the fourth quarter
and full year of 2006. This was primarily attributable to fewer and reduced
customer programs initiated by the brands throughout the year.
Operating expenses for the full year 2007 were $15.3 million, an increase of
$2.1 million over 2006. The increase in operating expenses included $1.8 million
in non-recurring charges, including a reserve for the impairment of a note
receivable of $1.1 million, an impairment charge for the building held for sale
of $0.1 million, and professional service costs associated with inactive
contracts of $0.6 million.
Operating expenses in the fourth quarter of 2007 were $3.2 million, as compared
to $3.1 million for the same period in 2006. Operating expenses for the fourth
quarter included a net benefit from non-recurring items of $0.4 million, which
was offset by a cost increase of $0.5 million principally associated with
increased sales staffing worldwide.
Net interest expense for the fourth quarter and full year ended December 31,
2007 was $542,000 and $1,680,000, respectively, as compared to $236,000 and
$988,000, respectively, for the fourth quarter and full year of 2006.
The increased interest cost in 2007 over 2006 was a result of the new debt
facility with Bluefin Capital entered into in June 2007, as well as the non-cash
interest charges associated with the stock and warrants issued in connection
with this debt.
CONFERENCE CALL
Talon International will hold a conference call on Thursday, April 17, 2008, to
discuss its fourth quarter and year-end 2007 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 their 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, April 17, 2008
Time: 4:30 pm Eastern (1:30 pm Pacific)
Domestic callers: 1-800-895-1085
International callers: 1-785-424-1055
Conference ID#: 7TALON
Internet Simulcast and replay: http://viavid.net/dce.aspx?sid=00004EF6
If you have any difficulty connecting with the conference call or webcast,
please contact the Liolios Group at 949-574-3860.
A replay of the call will be available later that evening and will be accessible
until May 15, 2008. The replay call-in number is 1-800-753-8546 for domestic
callers and 1-402-220-0685 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(R) 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 Levi Strauss & Co., Juicy Couture, Ralph Lauren,
Victoria's Secret, Target Stores, Wal-Mart, and Express. The company has offices
and facilities in the United States, Hong Kong, China, India and the Dominican
Republic and is expanding into Eastern Europe, Indonesia and Vietnam.
FORWARD LOOKING STATEMENTS
This news release contains forward-looking statements made in reliance upon the
safe harbor provisions of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements are not guarantees of future performance and are
inherently subject to uncertainties and other factors which could cause actual
results to differ materially from the forward-looking statement. These
statements are based upon, among other things, assumptions made by, and
information currently available to, management, including management's own
knowledge and assessment of the company's industry, competition and capital
requirements, and the potential for growth in zipper sales and other products.
Factors which could cause actual results to differ materially from these
forward-looking statements include our ability to manage an international
expansion, the level of acceptance of the company's products by retailers and
consumers, pricing pressures and other competitive factors and the unanticipated
loss of major customers. 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.
COMPANY CONTACT INVESTOR RELATIONS
Talon International, Inc. Scott Liolios or Scott Kitcher
Rayna Long Liolios Group, Inc.
Tel (818) 444-4128 Tel (949) 574-3860
rlong@talonzippers.com
TALON INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
Quarter Ended December 31, Year Ended December 31,
---------------------------- ----------------------------
2007 2006 2007 2006
------------ ------------ ------------ ------------
Net sales ............................... $ 8,859,321 $ 10,573,755 $ 40,529,555 $ 48,825,002
Cost of goods sold ...................... 6,000,408 7,223,155 28,422,820 34,356,034
------------ ------------ ------------ ------------
Gross profit ......................... 2,858,913 3,350,600 12,106,735 14,468,968
Selling expenses ........................ 963,968 646,257 3,125,634 2,777,772
General and administrative expenses ..... 3,307,721 2,962,826 10,877,374 10,872,887
Bad debt expenses (recoveries) .......... 6,961 (506,660) 186,753 (513,347)
Reserve for impairment of note receivable (1,040,000) -- 1,087,653 --
------------ ------------ ------------ ------------
Total operating expenses ............. 3,238,650 3,102,423 15,277,414 13,137,312
Income (loss) from operations ........... (379,737) 248,177 (3,170,679) 1,331,656
Interest expense, net ................... 541,991 235,748 1,680,079 988,453
------------ ------------ ------------ ------------
Income (loss) before income taxes ....... (921,728) 12,429 (4,850,758) 343,203
Provision for income taxes .............. 13,297 (32,521) 70,949 33,900
------------ ------------ ------------ ------------
Net Income (loss) .................... $ (935,025) $ 44,950 $ (4,921,707) $ 309,303
============ ============ ============ ============
Basic income (loss) per share ........... $ (0.05) $ 0.00 $ (0.24) $ 0.02
============ ============ ============ ============
Diluted income (loss) per share ......... $ (0.05) $ 0.00 $ (0.24) $ 0.02
============ ============ ============ ============
Weighted average number of common
shares outstanding:
Basic ................................ 19,336,638 18,377,484 20,155,563 18,377,484
============ ============ ============ ============
Diluted .............................. 19,336,638 18,955,796 20,155,563 18,955,796
============ ============ ============ ============
TALON INTERNATIONAL, INC.
CONSOLIDATED BALANCE SHEETS
December 31, December 31,
2007 2006
------------ ------------
Assets
Current Assets:
Cash and cash equivalents ................... $ 2,918,858 $ 2,934,673
Marketable Securities available for sale .... 1,040,000 --
Accounts receivable ......................... 3,504,351 4,664,766
Note receivable ............................. -- 1,378,491
Inventories, net ............................ 2,487,427 3,051,220
Prepaid expenses and other current assets ... 945,566 541,034
------------ ------------
Total current assets ........................... 10,896,202 12,570,184
Property and equipment, net .................... 5,210,446 5,623,040
Fixed Assets held for sale ..................... 700,000 826,904
Note receivable, less current portion .......... -- 1,420,969
Due from related parties ....................... 625,454 675,137
Other intangible assets, net ................... 4,110,751 4,139,625
Other assets ................................... 551,054 437,569
------------ ------------
Total assets ................................... $ 22,093,907 $ 25,693,428
============ ============
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable ............................. $ 6,603,929 $ 4,006,241
Accrued legal costs .......................... 498,846 427,917
Other accrued expenses ....................... 2,646,662 3,359,267
Demand notes payable to related parties ...... 85,176 664,970
Current portion of capital lease obligations . 323,317 432,728
Current portion of notes payable ............. 299,108 1,107,207
Current portion of secured convertible
promissory notes .......................... -- 12,472,622
------------ ------------
Total current liabilities ...................... 10,457,038 22,470,952
Capital lease obligations, less current portion 189,705 474,733
Notes payable, less current portion ............ 848,484 1,061,514
Revolver note payable .......................... 3,807,806 --
Term note payable, net of discount of
$2,075,500 .................................. 7,424,573 --
Other long term liabilities .................... 83,651 --
Total liabilities .............................. 22,811,257 24,007,199
------------ ------------
Commitments and contingencies (Note 13)
Stockholders' Equity:
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 December 31,
2007; 18,466,433 at December 31, 2006 .... 20,291 18,466
Additional paid-in capital .................. 54,510,161 51,792,502
Accumulated deficit ......................... (55,292,246) (50,124,739)
Accumulated other comprehensive income-
foreign currency ........................ 44,444 --
------------ ------------
Total stockholders' equity (deficit) ........... (717,350) 1,686,229
------------ ------------
Total liabilities and stockholders' equity ..... $ 22,093,907 $ 25,693,428
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