EXHIBIT 99.1
TALON INTERNATIONAL REPORTS FIRST QUARTER 2008 FINANCIAL RESULTS
ZIPPER SALES UP 19%; NET SALES UP 10% TO $10 MILLION
LOS ANGELES, CALIF. -- MAY 15, 2008 -- Talon International, Inc. (OTCBB:TALN), a
leading global supplier of zippers, apparel fasteners, trim and interlining
products, reported financial results for the first quarter ended March 31, 2008.
FIRST QUARTER 2008 HIGHLIGHTS
o Zipper product sales up 19% vs. Q1 2007
o Net sales totaled $10.0 million, up 10% vs. Q1 2007
o Net loss of $1.8 million, including severance charges of
$724,000, vs. net loss of $795,000 in Q1 2007
FIRST QUARTER 2008 FINANCIAL RESULTS
Net sales for the first quarter of 2008 were $10.0 million, an increase of 10%
from $9.1 million in the first quarter of 2007. The increase in revenue reflects
continuous improvements in the sales of Talon Zipper and Trim products. Talon
Zipper sales increased $0.9 million, or 19%, to $5.6 million in the quarter, as
compared to the same period a year ago. Talon Trim sales increased $0.4 million,
or 10%, to $4.4 million as compared to the same period a year ago.
The increase in Talon Zipper and Trim sales were partly offset by an anticipated
decline in Tekfit sales of $0.4 million from the same period in 2007. The
decline in Tekfit product sales is due to the termination in October 2006 of an
exclusive contract for this product.
"Our improvement in sales this quarter, which were also up 12% over the previous
quarter, is in line with expectations and is the result of our expanded
footprint throughout Southeast Asia and having won new nominations from major
brand retailers for our Zipper and Trim products," said Lonnie Schnell, Talon's
CEO. "As also anticipated, the decline in Tekfit revenue shows that the sales
cycle for this product to new customers continues to be long. Overall, we
continued to effectively build upon our strengths and are looking forward to
sustained growth through 2008."
Gross profit for the first quarter of 2008 totaled $2.8 million or 27% of sales,
as compared to $2.7 million or 30% of sales in same quarter in 2007. Gross
profit attributable to the sales increase was mainly offset by higher product
costs and additional charges associated with product deliveries and customer
accommodations.
Said Schnell: "Product cost pressures were significant in the first quarter, as
we introduced a substantial new retail brand to our zipper customer list and
dealt with challenging delivery schedules. Despite the cost pressures, we
believe cost reduction opportunities exist that will allow us to achieve margin
improvements in the future."
Operating expenses for the first quarter were $4.1 million, as compared to $3.3
million for the same period in 2007. Operating expenses in the first quarter
2008 include $724,000 of costs associated with executive severances. Increases
in employee costs generally associated with the company's growth and expansion
were principally offset by reductions in legal, administrative and professional
fees.
The net loss for the first quarter of 2008 also includes net interest expense of
$550,000, an increase of $368,000 as compared to net interest expense for the
same period in 2007 of $182,000. Approximately $166,000 of the increase
represents non-cash interest charges associated with the stock and warrants
issued in connection with the new debt facility entered into in June 2007 with
Bluefin Capital. The remainder of the increase is attributable to the higher
interest cost on the Bluefin facility as compared to the promissory notes in
place during the first half of 2007.
CONFERENCE CALL
Talon International will hold a conference call on Thursday, May 15, 2008, to
discuss these first quarter 2008 financial results. Talon CEO Lonnie D. Schnell
will host the call starting at 4:30 p.m. Eastern Time. A question and answer
session will follow the 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, May 15, 2008
Time: 4:30 p.m. Eastern (1:30 p.m. 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=000050f6
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 after 7:30 p.m. Eastern Time and until
June 15, 2008:
Toll-free replay number: 1-800-839-3011
International replay number: 1-402-220-7231
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.
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, our ability to
reduce costs, 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
(UNAUDITED)
Three Months Ended March 31,
------------------------------
2008 2007
------------ ------------
Net sales .................................. $ 9,985,489 $ 9,090,117
Cost of goods sold ......................... 7,227,524 6,386,502
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Gross profit ............................... 2,757,965 2,703,615
Selling expenses ........................... 719,963 706,235
General and administrative expenses ........ 3,348,236 2,611,042
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Total operating expenses ................... 4,068,199 3,317,277
------------ ------------
Loss from operations ....................... (1,310,234) (613,662)
Interest expense, net ...................... 549,514 181,682
------------ ------------
Loss before income taxes ................... (1,859,748) (795,344)
Provision (benefit) for income taxes ....... (21,004) --
------------ ------------
Net loss ................................... $ (1,838,744) $ (795,344)
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Basic loss per share ....................... $ (0.09) $ (0.04)
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Diluted loss per share ..................... $ (0.09) $ (0.04)
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Weighted average number of common
shares outstanding:
Basic ................................. 20,291,433 18,533,100
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Diluted ............................... 20,291,433 18,533,100
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TALON INTERNATIONAL, INC.
CONSOLIDATED BALANCE SHEETS
March 31, 2008 December 31,
(Unaudited) 2007
------------ ------------
Assets
Current Assets:
Cash and cash equivalents ................... $ 1,774,819 $ 2,918,858
Marketable Securities ....................... 380,000 1,040,000
Accounts receivable, net .................... 4,939,373 3,504,351
Inventories, net ............................ 2,866,212 2,487,427
Prepaid expenses and other current assets ... 359,587 945,566
------------ ------------
Total current assets ........................... 10,319,991 10,896,202
Property and equipment, net .................... 5,039,564 5,210,446
Fixed assets held for sale ..................... 700,000 700,000
Due from related parties ....................... 637,255 625,454
Other intangible assets, net ................... 4,110,751 4,110,751
Other assets ................................... 545,048 551,054
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Total assets ................................... $ 21,352,609 $ 22,093,907
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Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable ............................. $ 7,958,249 $ 6,603,929
Accrued legal costs .......................... 161,757 498,846
Other accrued expenses ....................... 2,739,076 2,646,662
Demand notes payable to related parties ...... 85,176 85,176
Current portion of capital lease obligations . 290,071 323,317
Current portion of notes payable ............. 281,631 299,108
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Total current liabilities ...................... 11,515,960 10,457,038
Capital lease obligations, less current portion 118,227 189,705
Notes payable, less current portion ............ 793,007 848,484
Revolver note payable .......................... 4,507,806 3,807,806
Term note payable, net of discount ............. 7,393,282 7,424,573
Other long term liabilities .................... 83,651 83,651
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Total liabilities .............................. 24,411,933 22,811,257
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Stockholders' Equity:
Common stock, $0.001 par value, 100,000,000
shares authorized; 20,291,433 shares issued
and outstanding at March 31, 2008 and
at December 31, 2007 ...................... 20,291 20,291
Additional paid-in capital ................... 54,655,511 54,510,161
Accumulated deficit .......................... (57,130,990) (55,292,246)
Accumulated other comprehensive (loss) income (604,136) 44,444
------------ ------------
Total stockholders' deficit .................... (3,059,324) (717,350)
------------ ------------
Total liabilities and stockholders' equity ..... $ 21,352,609 $ 22,093,907
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