Lower rate of sales increase in the trim sales, Talon

16 Aug '10

5 min read

Talon International, Inc., a leading global supplier of zippers, apparel fasteners, trim and interlining products, reported financial results for the second quarter ended June 30, 2010.

Highlights

• Zipper Sales increase 27% for the quarter over 2009, and increase 33% year-to-date.
• Operating Income for the quarter totaled $1.7 million -- highest in more than seven years.

Financial Results
"The significant sales increase over 2009 is of course reflective of improved worldwide economic conditions," noted Lonnie Schnell, Talon's CEO, "but more importantly demonstrates our growth in excess of the gains reported in the industry overall, reflecting success in expanding our share of the production from existing customers, and attracting new customers with the value solution we offer."

Total sales for quarter ended June 30, 2010 totaled $15.0 million, representing an increase of $2.4 million or 19.0% from the same period in 2009. Total sales for the six months ended June 30, 2010 were $23.2 million, an increase of 21.5% over the same period in 2009. Talon zipper sales were $9.8 million for the quarter ended June 30, 2010, reflecting an increase of 26.7% from the same period in 2009, and zipper sales for the six months ended June 30, 2010 were $14.7 million, an increase of more than 33% over the first six months in 2009.

For the quarter ended June 30, 2010 the Company reported Trim product sales of $5.2 million compared to $4.9 million for quarter ended June 30, 2009, an increase of 7.3%. Trim product sales for the six months ended June 30, 2010 were $8.5 million, or 6.1% greater than the same period in 2009.

The lower rate of sales increase in the trim sales, as compared to the increase in zipper sales, is a consequence of lower cost choices made by retailers in their trim packages and the postponement of new program offerings. The Tekfit product did not reflect any sales for the quarter or six months ended June 30, 2010. Certain manufacturing trial programs are under evaluation by customers, although production plans have not been finalized to incorporate the product.

The gross profit for the quarter ended June 30, 2010 was $4.3 million or 29.0% of sales as compared to 28.3% for the same period in 2009. Gross profit for the six months ended June 30, 2010 was $6.8 million or 29.2% of sales as compared to 29.0% for the same period in 2009. The increase in gross profit for the three and six months ended June 30, 2010 as compared to the same period in 2009 was principally attributable to higher overall sales volumes. Improvements in the product mix between zipper and trim sales principally accounted for the improvements in gross profit as a percent of sales.

Sales and marketing expenses for three months ended June 30, 2010 were $0.8 million, or 5.3% of sales, as compared to $0.7 million, or 5.7% of sales for the same period in 2009. Sales expenses decreased asa percentage of sales primarily due to lower sales force expenses in Asia. Sales and marketing expenses for the six months ended June 30, 2010 were $1.4 million; the same as for the same period in 2009.

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