Talon zipper sales drop in first quarter
Talon International Inc, a leading global supplier of zippers, apparel fasteners, trim and interlining products, reported financial results for the first quarter ended March 31, 2009.
• Sales for the 1st Quarter 2009 totaled $6.5 million vs. $10.0 million in 2008.
• Net loss totaled $1.2 million in 2009 vs. $1.8 million in 2008. Financial Results
Sales for the first quarter of 2009 totaled $6.5 million, a decrease of $3.5 million (or 35%) from 2008. The decrease in sales for the quarter was a direct result of the impact of the economic decline on the apparel industry and the corresponding lower demand for apparel trim products that their suppliers purchase from the Company.
For the first quarter of 2009 the Company reported Talon zipper sales of $3.3 million as compared to $5.6 million for the same period in 2008. Trim product sales for the first quarter of 2009 were $3.2 million, as compared to $4.4 million for the same period in 2008, and TekFit product sales for the first quarter were $14,000 compared to $8,000 in 2008.
"The severe global economic decline late in 2008 continued its impact on consumer spending well into the first quarter of 2009 and this translated into much lower demand for our zipper and trim products," said Lonnie Schnell, Talon's CEO. "As consumers restricted their spending at the retail level, the retail brands restricted their buying even more as they sought to liquidate as much inventory at retail as possible."
The apparel industry is expected to be adversely impacted by this recession for most of 2009, and into early 2010, depending upon the global economic trends. "The effect of this recession on sales of our products will correlate with the overall impact of the retail sales results of our customers," continued Schnell.
For the first quarter of 2009 a net loss of $1.2 million or ($0.06) per share was reported by the Company, as compared to a net loss of $1.8 million or ($0.09) per share for the first quarter in 2008.
"In response to the economic decline the Company has taken steps to significantly reduce its operating costs, and curtail capital and discretionary spending," said Schnell. "We have also implemented increased sales incentives and worked to secure preferred supplier status with our core customers."
Selling expenses for the first quarter of 2009 were $515,000, reflecting a reduction of $204,000 compared to the same period in 2008. General and administrative expenses for the first quarter of 2009 were $2.0 million, as compared to $3.3 million for the first quarter of 2008. The decrease of $1.3 million in general and administrative expenses is partially attributable to $724,000 of severance charges associated with former officers recorded in the first quarter of 2008. The remaining decrease from the first quarter of 2008, approximately $576,000, principally represents reductions in employees and associated costs that were made in late 2008 and early in the first quarter of 2009.
Net interest expense for the first quarter of 2009 was $637,000, as compared to $550,000 for the first quarter of 2008. The increased interest cost in 2009 over 2008 was primarily the result of increased borrowings under the debt facility with CVC California, LLC (formerly Bluefin Capital, LLC).
Talon International Inc