LOS ANGELES, CA — (Marketwire) — 08/11/11 — Talon International, Inc. (OTCQB: TALN), a leading global supplier of zippers, apparel fasteners, trim and interlining products, reported financial results for the quarter and six months ended June 30, 2011.
Net Income for the six months of $255,000 – an increase of $456,000 over the same period in 2010.
Sales for the six months of $22.0 million – 5.3% below sales for the same period in 2010
Sales totaled $12.8 million for the quarter ended June 30, 2011 as compared to $15.0 million during the second quarter of 2010. Zipper sales for the second quarter of 2011 were $7.3 million as compared to $9.7 million for the same quarter in 2010, and Trim product sales for the quarter ended June 30, 2011 totaled $5.5 million, reflecting an increase of 4.4% compared to the same quarter in 2010. Sales for the six months ended June 30, 2011 were $22.0 million, which was 5.3% below the same period in 2010. Zipper sales for the first six months of 2011 were $12.8 million, compared to $14.7 million for the same period in 2010. Trim product sales for the six months ended June 30, 2011 totaled $9.2 million, reflecting an increase of 7.9% compared to the same period last year. “The sales decline for the second quarter and first half of this year was disappointing,” noted Lonnie Schnell, Talon-s CEO. “Our customers trimmed their unit purchases this quarter directly impacting our peak season sales, reflecting their caution about consumer demand in the fall and holiday season.” Retailers have recently seen substantial increases in the cost of their raw materials and labor, and anticipate passing these costs to the consumer. “While our specialty retail higher-end customers remain cautious, the mass merchandising and discount retailers aggressively pushed for lower prices while expanding their approved supplier list to local China and Bangladesh factories. Our second quarter zipper sales from mass merchandisers declined approximately 50% during the quarter as their business shifted to the local manufacturers,” Mr. Schnell continued. “Despite the revenue decline from mass merchandisers we were highly encouraged with nearly $3.0 million gained in deliveries to new customers during the first half of 2011, evidencing our success in expanding our customer base and market participation,” noted Mr. Schnell.
The gross profit for the quarter ended June 30, 2011 was $4.1 million or 31.9% of sales, as compared to $4.3 million or 29.0% of sales for the same quarter in 2010. Total gross profit for the six months ended June 30, 2011 was $7.0 million or 31.6% of sales, as compared to $6.8 million or 29.2% of sales for the same period in 2010. The gross profit improvement of 2.9 percentage points for the quarter and 2.4 percentage points for the first six months of 2011 as compared to the prior periods substantially offset the decline in gross profit due to lower sales, and was principally attributable to higher margins on new brand sales, an improved product mix of Trim and Zipper sales, and lower costs for freight, manufacturing support and inventory.
Operating expenses for the second quarter of 2011 were $3.1 million as compared to $2.6 million for the same quarter in 2010. Operating expenses for the first half of 2011 were $6.2 million as compared to $5.3 million for the same period in 2010. The increase in operating spending is associated with the expansion of the sales and marketing teams in the U.S. and Asia. Additionally, operating expenses in the second quarter and first six months of 2010 benefited by $275,000 from the sale of a note receivable that had previously been written-off as a bad debt. Operating expenses for 2011 also included non-cash compensation cost increases associated with the recapitalization transaction completed in July 2010. Sales and marketing expenses for the quarter ended June 30, 2011 were $1.1 million as compared to $788,000 for the same quarter in 2010. Sales and marketing expenses for the six months ended June 30, 2011 were $2.0 million as compared to $1.4 million for the same period in 2010. General and administrative expenses for the quarter ended June 30, 2011 were $2.0 million as compared to $1.9 million for the same quarter in 2010. General and administrative expenses for the six months ended June 30, 2011 were $4.3 million as compared to $3.8 million for the same period in 2010.
Interest expense for the quarter ended June 30, 2011 was $23,000 as compared to $885,000 the same quarter in 2010. Interest expense for the six months ended June 30, 2011 was $42,000 as compared to $1.6 million for the same period in 2010. The interest expense decline in 2011 was directly associated with the full extinguishment of our debt and notes payable to CVC Capital, LLC on July 30, 2010.
The net income for the quarter ended June 30, 2011 was $656,000 as compared to a net income of $647,000 for the same quarter in 2010. The net income for the six months ended June 30, 2011 was $255,000 as compared to a net loss of $201,000 for the same period in 2010.
Talon International will hold a conference call on Thursday, August 11, 2011, to discuss its second quarter 2011 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 the presentation.
To participate, 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, August 11, 2011
Time: 4:30 pm Eastern (1:30 pm Pacific)
Domestic callers: 1-877-317-6789
International callers: 1-412-317-6789
A replay of the call will be available later that evening and will be accessible until September 11, 2011. The replay call-in number is 1-877-870-5176 for domestic callers and 1-858-384-5517 for international. Pin number 10003048.
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® 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 major apparel brands and manufacturers including Kohl-s, J.C. Penney, Wal-Mart, Abercrombie and Fitch, V.F. Corporation, Express, Tom Tailor, Polo Ralph Lauren, Eddie Bauer, Fat Face, et al. The Company has offices and facilities in the United States, United Kingdom, Hong Kong, China, India and Bangladesh.
Talon International, Inc.
Rayna Hernandez
Tel (818) 444-4128