Fivefold increase in income from Talon operations for 2010

30 Mar '11

3 min read

Talon International Inc, a leading global supplier of zippers, apparel fasteners, trim and interlining products, reported financial results for the fourth quarter and year ended December 31, 2010.

2010 Financial Highlights

• A fivefold increase in Income from Operations for 2010 over 2009
• Total sales for 2010 up 7% over 2009 -- Zipper sales increase 15% over 2009

Financial Results

"Despite continued worldwide economic and industry challenges throughout 2010, Talon made extraordinary progress in growing and improving its business," said Lonnie Schnell, Talon's Chief Executive Officer. "The sales increase of 15% in our core zipper product was a significant accomplishment in a difficult and volatile industry environment during 2010, and emphasizes the continued strength and acceptance of our brand. Our sales growth, together with almost a full percentage point increase in our margin, and tight controls over our operating costs resulted in income from operations of $1.5 million for 2010 -- an increase by more than five times over 2009."

Total sales for the year ended December 31, 2010 were $41.5 million, an increase of $2.8 million or 7.2% compared to the same period in 2009. Talon zipper sales included in the 2010 full year results were $24.5 million, an increase of 15% over the same period in 2009. Trim product sales included in the 2010 full year results were $16.9 million or 2.0% below the same period in 2009.

Total sales for the fourth quarter ended December 31, 2010 totaled $9.0 million or 1.9% below the same period in 2009. Talon zipper sales for the fourth quarter of 2010 were $4.3 million, a decline of 4.4% from the same quarter in 2009, and Trim product sales for the quarter ended December 31, 2010 totaled $4.7 million, reflecting a slight increase of 0.7% compared to the same quarter in 2009.

The sales increase for the full year 2010 reflected the replenishment of inventories by major retailers in the first half of 2010 in anticipation of higher retail buying, followed by reductions in the retail inventory levels during the third and fourth quarters of the year driven by fears of slower economic growth. Talon's sales volatility resulting from these purchase decisions were partly offset by new nominations, programs and customers employing our products.

Gross profit for the year ended December 31, 2010 was $12.5 million or 30.1% of sales as compared to $11.3 million or 29.2% of sales for the same period in 2009. The gross profit for the quarter ended December 31, 2010 was $3.0 million or 33.1% of sales as compared to $2.8 million or 30.8% of sales for the same quarter in 2009. The gross profit improvements for the year and the quarter were due mainly to increased volume, a more favorable product mix and improved inventory control.

Sales and marketing expenses for year ended December 31, 2010 were $3.0 million or 7.3% of sales as compared to$2.7 million or 7.0% of sales for the same period in 2009. Sales and marketing expenses for the quarter ended December 31, 2010 were $750,000 or 8.4% of sales as compared to $678,000 or 7.4% of sales for the same period in 2009. Sales and marketing costs increased for the year and quarter ended December 31, 2010 as compared to the same periods in 2009 principally due to the expansion of our sales teams in the U.S. during the third quarter of 2010, partially offset by lower selling expenses in China and Southeast Asia.

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Talon International Inc

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