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Talon International, Inc. Reports 2017 First Quarter Financial Results


Talon International, Inc. Reports 2017 First Quarter Financial Results

Talon International, Inc. Reports 2017 First Quarter Financial Results

LOS ANGELES, CA--(Marketwired - May 11, 2017) -  Talon International, Inc. (OTCQB: TALN), a leading global supplier of zippers, apparel fasteners, trim and stretch technology products, reported financial results for the first quarter ended March 31, 2017.

Financial Highlights

  • Overall revenues decreased 1.3 % from the prior year as Trim sales continued to increase while Zipper sales declined.
  • Trim revenues posted a 4.7% increase versus the prior year.

Financial Results

Revenues for the three months ended March 31, 2017 were $11.1 million, reflecting a decrease of $147,000 or -1.3% as compared to the same period in 2016. Talon Zipper sales were $476,000 lower than the same period in 2016 due to decreased sales to mass merchandising brand customers and specialty retail brands customers. Talon Trim products, which consist primarily of sales to specialty retail branded customers, increased by $329,000 compared to the same period in 2016, mainly due to new stretch technology programs and customers.

"Our year-over-year increase in the Trim business was a highlight this quarter, as we gained traction with customers and products," stated Larry Dyne, Talon's Chief Executive Officer. "As we focus on offering Fit for Purpose Zipper products to the market, we held two significant zipper marketing events in the first quarter, building awareness of Talon's influential history and current breadth of zipper offerings. As we look ahead to the remainder of 2017, our team will continue its customer-centric approach as we focus our sales efforts on those manufacturers and retailers who meet our standards of profitability and product innovation."

Gross profit for the quarter ended March 31, 2017 was $4.1 million, or 36.8% of sales, compared to $4.2 million, or 37.0% of sales, in the first quarter of 2016. The gross profit decrease is largely attributable to an inventory write down of certain zipper stock and a change in product mix, offset by lower freight and duty costs and higher sales volumes for Talon Trim products. Operating expenses for the quarter ended March 31, 2017 were essentially flat from the prior year at $3.9 million. Sales and marketing expenses totaled $1.6 million, an increase of $105,000 as compared to the same period in 2016, mainly due to additional compensation costs, increased travel and entertainment expenses and additional administrative costs, offset by reduced facilities and related expenses.

General and administrative expenses for the three months ended March 31, 2017 totaled $2.3 million, or 20.7% of sales, compared to the prior year of $2.4 million, or 21.6% of sales. Expenses were lower by $127,000 compared to the same period in 2016, mainly due to reduced professional and legal costs, offset by additional IT support costs.

Income before income taxes for the quarter ended March 31, 2017 was $28,000 compared to $85,000 for the same period in 2016. Net income for the quarter ended March 31, 2017 was $5,500 or $0.00 per share as compared to $49,000 or $0.00 per share for the quarter ended March 31, 2016. 

About Talon International, Inc.

Talon International, Inc. is a major supplier of custom zippers and complete trim solutions including Tekfit® stretch technology products to manufacturers of fashion apparel, specialty retailers, mass merchandisers, brand licensees and major retailers worldwide. Talon develops, manufactures and distributes custom zippers exclusively under its Talon® brand ("The World's Original Zipper Since 1893"); designs, develops, manufactures, and distributes complete apparel trim solutions and products including stretch technology products for specialty waistbands, shirt collars, and other items all under its trademark and world renowned brands, Talon® and Tekfit® to major apparel brands and retailers. Leading retailers worldwide recognize and use Talon products including VF Corporation, American Eagle, Abercrombie and Fitch, Polo Ralph Lauren, Kohl's, JC Penney, FatFace, Victoria's Secret, Wal-Mart, Phillips-Van Heusen, Levi Strauss & Co., Express and many others. The company is headquartered in the greater Los Angeles area, and has offices and facilities throughout the United States, United Kingdom, Hong Kong, China, India, Indonesia and Bangladesh.

Forward-Looking Statements

This release contains forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include, but are not limited to, the Company's views on market growth, changing trends in apparel retailing, new product introductions, expansion into new geographic markets, and the Company's ability to execute on its sales strategies, and are generally identified by phrases such as "thinks," "anticipates," "believes," "estimates," "expects," "intends," "plans," and similar words. Forward-looking statements are not guarantees of future performance and are inherently subject to uncertainties and other factors which could cause actual results to differ materially from the forward-looking statement. These statements are based upon, among other things, assumptions made by, and information currently available to, management, including management's own knowledge and assessment of the Company's industry, competition and capital requirements. These and other risks are more fully described in the Company's filings with the Securities and Exchange Commission including the Company's most recently filed Annual Report on Form 10-K and Quarterly Report on Form 10-Q, which should be read in conjunction herewith for a further discussion of important factors that could cause actual results to differ materially from those in the forward-looking statements. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

    Three Months Ended  
March 31,  
    2017   2016  
Net sales   $ 11,117,534   $ 11,264,632  
Cost of goods sold     7,029,158     7,100,373  
  Gross profit     4,088,376     4,164,259  
Sales and marketing expenses     1,607,566     1,502,886  
General and administrative expenses     2,298,951     2,425,958  
  Total operating expenses     3,906,517     3,928,844  
Income from operations     181,859     235,415  
Interest expense, net     153,926     150,647  
Income before provision for income taxes     27,933     84,768  
Provision for income taxes     22,395     35,651  
Net income   $ 5,538   $ 49,117  
Basic and diluted net income per share   $ 0.00   $ 0.00  
Weighted average number of common shares outstanding - Basic     92,274,255     92,267,831  
Weighted average number of common shares outstanding - Diluted     92,931,260     93,473,691  
Net income   $ 5,538  
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