Gross profit margin improves to 37.3% at Hirsch
Hirsch International Corp, the leading provider of advanced embroidery, screen-printing, textile laser systems, and digital printing and services to the North American graphic and decorated apparel marketplace, reports its financial results for the second quarter ended June 30, 2008.
Hirsch's net loss for the quarter ended June 30, 2008 was $1.0 million or $0.11 per diluted share. This compares to net income of $0.76 million or $0.08 per diluted share for the prior year quarter.
“It is evident that we are operating in a difficult economic environment with declining consumer confidence. Beginning in 2007 and continuing in 2008 we have seen overall weakness in capital expenditures throughout the graphic and decorated apparel industry.
During the first half of 2008, we experienced a 31% decrease in revenue in our legacy embroidery segment over last year's first half,” said Paul Gallagher, President and Chief Executive Officer of Hirsch International.
“On a more positive note, sales of textile laser, screen printing, and digital printing equipment, all new products added over the past two years, have increased 30% over the same six months compared to last year.”
“Additional pressure has resulted from the continued weakness in the US dollar as compared to the currencies in the countries where our equipment is produced, on both market prices and profit margins.
The overall effect to our bottom-line results is disappointing and unacceptable and while our results do reflect overall industry pressures and weaker economic conditions, our Company is addressing the challenges head-on and adjusting our near-term strategic direction.”
“Subsequent to the second quarter, on August 4th, 2008, Hirsch acquired 80% of the outstanding equity interest in U.S. Screen Print and Inkjet Technology (“U. S. Screen”). U.S. Screen has a global presence with revenues of approximately $18 million in 2007 and is headquartered in Tempe, AZ.
For twenty-nine years, U. S. Screen has provided the decorated and graphic apparel industry with a wide range of educational services, software and supplies and over the past four years designed and produced the worldwide industry leading digital inkjet garment printer.
As part of the acquisition, a wholly owned subsidiary of Hirsch will also provide working capital for the expansion of U.S. Screen Print and Inkjet Technology's business.”
Mr. Gallagher concluded, “Our balance sheet and liquidity position are solid, and we are committed to keeping them that way. We will continue to stay focused on this mission with the best interests of our shareholders always at the forefront of our efforts.”
Revenues for the three months ended June 30, 2008, were $10.2 million, a decrease of $2.0 million, or 16.4%, compared to revenue of $12.2 million for the three months ended June 30, 2007.
The decrease in sales for the three months ended June 30, 2008, is primarily attributable to a $2.6 million decrease in new embroidery equipment, a $0.1 million decrease in software sales, offset by an increase of $0.2 million from laser equipment, $0.1 million from screen printing equipment, and an increase of $0.4 million from digital printing equipment.