News Flash

Talon Zipper & Trim products sales up

17 May '08

3 min read

"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.

Talon International Inc

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