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Hirsch International to reduce operating expenses
04
Apr '09
Hirsch International Corp. announced financial results for the fourth quarter and year ended December 31, 2008.

For the fourth quarter of 2008, net sales were $10.1 million, compared to $14.5 million in the fourth quarter of 2007. Net loss in the fourth quarter of 2008 was $3.3 million compared to a net income of $0.6 million in the prior year.

Gross profit for the fourth quarter of 2008 was $2.3 million, or 23% of net sales, compared to $5.2 million, or 36% of net sales, in the fourth quarter of 2007 and selling, general and administrative expenses were $4.7 million for both 2008 and 2007. Overall operating expenses for the fourth quarter of 2008 were $5.6 million as compared to $4.7 million in 2007 which, in 2008, included a non-cash impairment charge of $845,000 in U. S. Graphic Arts Inc.'s customer list.

For 2008, net sales were $42.5 million, compared to $52.6 million in 2007. The Company reported a net loss of $6.9 million, or $0.73 per diluted share, for 2008, as compared to net income for 2007 of $2.1 million, or $0.22 per diluted share. The twelve month results include sales of U.S. Graphic's of $4.2 million with a net loss of $2.3 million or $0.24 per diluted share. U.S. Graphics was acquired on August 4, 2008.

Management Comment:
Paul Gallagher, President and CEO of the Company, stated, "The fourth quarter was extraordinarily difficult as our order flow continued to deteriorate. The weakness was most evident in core embroidery product sales which decreased $14 million this year or 38%. This decrease was partially offset by continued market penetration of screen and digital print products, however in addition to the overall market weakness, we also saw severe price and margin pressure resulting from the continued weakness in the U.S. dollar as compared to the Japanese Yen.”

Mr. Gallagher continued, "As business conditions continued to deteriorate during the fourth quarter and into 2009, we have accelerated our cost and expense reduction programs. To date, the Company has initiated actions which it expects will result in annualized cost savings of almost $6 million.

Without a doubt, 2009 will be a very tough year during which we will continue to take actions necessary to return the Company to profitability while continuing to provide the industry with the most innovative and highest quality products and the most advanced customer education and support systems, while taking whatever steps necessary to maintain our position as market leader.”

Hirsch International Corp.

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