-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, EnNvzcu1VZJ8dz+JnlZKnG97UrXa5P7Hye3qEiY8hv8ylGWbvIfE7JwTr8ofvFG/ 2zQFD4L7YOYQPKeMajg5vg== 0001170918-07-000673.txt : 20070814 0001170918-07-000673.hdr.sgml : 20070814 20070814161018 ACCESSION NUMBER: 0001170918-07-000673 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20070814 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20070814 DATE AS OF CHANGE: 20070814 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TALON INTERNATIONAL, INC. CENTRAL INDEX KEY: 0001047881 STANDARD INDUSTRIAL CLASSIFICATION: WHOLESALE-APPAREL, PIECE GOODS & NOTIONS [5130] IRS NUMBER: 954654481 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-13669 FILM NUMBER: 071055261 BUSINESS ADDRESS: STREET 1: 21900 BURBANK BLVD. STREET 2: SUITE 270 CITY: WOODLAND HILLS STATE: CA ZIP: 91367 BUSINESS PHONE: 8184444100 MAIL ADDRESS: STREET 1: 21900 BURBANK BLVD. STREET 2: SUITE 270 CITY: WOODLAND HILLS STATE: CA ZIP: 91367 FORMER COMPANY: FORMER CONFORMED NAME: TAG IT PACIFIC INC DATE OF NAME CHANGE: 19971015 8-K 1 fm8k-081407.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of Earliest Event Reported): August 14, 2007 TALON INTERNATIONAL, INC. (Exact Name of Registrant as Specified in Charter) DELAWARE 1-13669 95-4654481 (State or Other Jurisdiction (Commission (I.R.S. Employer of Incorporation) File Number) Identification No.) 21900 BURBANK BLVD., SUITE 270 WOODLAND HILLS, CALIFORNIA 91367 (Address of Principal Executive Offices) (Zip Code) (818) 444-4100 (Registrant's Telephone Number, Including Area Code) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): [_] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [_] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [_] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [_] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION. On August 14, 2007, Talon International, Inc. issued a press release regarding its financial results for the quarter and six months ended June 30, 2007. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by this reference. The information in this report shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except as shall be expressly set forth by specific reference in such a filing. ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS. (a) FINANCIAL STATEMENTS OF BUSINESS ACQUIRED. None. (b) PRO FORMA FINANCIAL INFORMATION. None. (c) SHELL COMPANY TRANSACTIONS. None. (d) EXHIBITS. 99.1 Press Release dated August 14, 2007, published by the Registrant.* * This exhibit is furnished, not filed. 2 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. TALON INTERNATIONAL, INC. Date: August 14, 2007 By: /S/ LONNIE D. SCHNELL --------------------------------------------- Lonnie D. Schnell, Chief Financial Officer 3 EX-99 2 pressrelease-081407.txt EX-99.1 EXHIBIT 99.1 FOR IMMEDIATE RELEASE TALON INTERNATIONAL, INC REPORTS SECOND QUARTER 2007 NET EARNINGS OF $0.02 PER SHARE TALON ZIPPER SALES INCREASE 41% FOR THE FIRST HALF OF 2007 LOS ANGELES, CALIF. -- AUGUST 14, 2007 -- Talon International, Inc. (AMEX: TLN), formerly Tag-It Pacific, Inc., a leading global supplier of zippers, apparel fasteners, trim and interlining products, reported financial results for the second quarter and six months ended June 30, 2007. Sales for the three months ended June 30, 2007 were $13.6 million, reflecting a decline of approximately 4.8% from the same period of 2006. Sales for the six months ended June 30, 2007 were $22.7 million, a decline from the same period in 2006 by 8.9%. The sales decrease for both the quarter and year to date from the prior year reflects a sharp decline in waistband product sales as a result of the expiration of an exclusive sales contract in October 2006. Sales of waistband products were $0.2 million for the three months ended June 30, 2007 as compared to $2.5 million for the same period in 2006, and waistband product sales for the six months ended June 30, 2007 were $0.6 million as compared to $4.4 million for the same six month period in 2006. Sales of the waistband products are expected to be minimal for the balance of 2007 as new customer programs are developed for future production. Sales of waistband products for all of 2006 were approximately $9.5 million. Talon zipper sales for the three months ended June 30, 2007 were $8.4 million, reflecting an increase of more than 55% over the same period in 2006. Sales of Talon zippers for the six months ended June 30, 2007 were $13.2 million, for an increase of over 41% from the same six-month period in 2006. "Although our overall revenues for the periods declined slightly from the prior year, we were very pleased with the results within our zipper products, and the decline from the business transition of the waistband products was consistent with our expectations," stated Stephen Forte, chief executive officer of Talon International. "The dramatic sales growth of our Talon zipper products and the adoption the name of the Talon brand as our corporate name reflects our core marketing strategy to capitalize on the huge opportunities we see for the Talon brand in the $7 billion international zipper market. As the numbers show, we are realizing significant favorable results as we rapidly expand into new markets and team with apparel makers who are anxious for an alterative global supplier of zipper products and with a reputation for superior quality." For the second quarter ended June 30, 2007, the company reported net income of $490,500 or $0.02 per diluted share on 20.0 million fully diluted shares, as compared to net income of $654,600 or $0.04 per diluted share on 18.6 million fully diluted shares for the same period in 2006. For the six months ended June 30, 2007 the company reported a net loss of $305,000 or $0.02 per share on 18.6 million shares outstanding, as compared to a net loss of $75,000 or $0.00 per share for the same period in 2006. The increase in the net loss for the six months ended June 30, 2007 as compared with the same period in 2006 is principally attributable to the decline in overall revenues, substantially offset by improvements in other components of gross margin and a reduction in general and administrative costs. Operating expenses for the six months ended June 30, 2007 were $6.5 million, approximately equal to the operating expenses for same period in 2006. "Our operating expenses remain under close control, and while our operating expenses from year-to-year did not reflect a net reduction, we nevertheless were able to expand our operations globally, adding substantially to our sales presence within Asia, while offsetting these strategic investments with cost reductions in the U.S. in service and administrative fees" explained Mr. Forte. Net cash provided by operating activities for the six months ended June 30, 2007 was $1.8 million despite the year to date net loss, and unrestricted cash for the six months increased from December 31, 2006 by $887,000 to $3.8 million at June 30, 2007. Net cash of $10.5 million was also generated during the six months ended June 30, 2007 in connection with the Company's $14.5 million credit facility, which was principally designed to retire the convertible notes scheduled to mature in November 2007. At June 30, 2007, $9.5 million of the initial proceeds of the new credit facility were held in a cash escrow account and $1.0 million was used to retire a related party note. Subsequent to June 30, 2007, an additional $3.0 million in funds were borrowed under this credit facility, and together with the escrow funds, these funds were used to pay-off in full all of the convertible promissory notes. Mr. Forte concluded, "With the completion of this debt refinancing we have put the restructuring of the company behind us and we can now look ahead and focus on introducing new products and new innovative manufacturing processes and capabilities. We believe we have reestablished our momentum, and intend to use this to increase sales, expand our margins, and develop new relationships worldwide." CONFERENCE CALL Talon International will hold a conference call later today to discuss its second quarter financial results. Talon's CEO Stephen P. Forte and CFO Lonnie D. Schnell will host the call starting at 4:30 P.M. Eastern Time. A question and answer session will follow their presentation. To participate in the call, dial the appropriate number 5-10 minutes prior to the start time, request the Talon International conference call and provide the conference ID. Date: Tuesday, August 14, 2007 Time: 4:30 pm Eastern (1:30 pm Pacific) Domestic callers: 1-800-322-9079 International callers: 1-973-582-2717 Conference ID#: 9086533 Internet Simulcast: http://viavid.net/dce.aspx?sid=0000430E 2 If you have any difficulty connecting with the conference call or webcast, please contact the Liolios Group at 949-574-3860. A replay of the call will be available later that evening and will be accessible until September 28, 2007. The replay call-in number is 1-877-519-4471 for domestic callers and 1-973-341-3080 for international. The conference ID is # 9086533. ABOUT TALON INTERNATIONAL, INC. Talon International, Inc. is a global supplier of apparel fasteners, trim and interlining products to manufacturers of fashion apparel, specialty retailers, mass merchandisers, brand licensees and major retailers. Talon manufactures and distributes zippers and other fasteners under its Talon(R) brand, known as the original American zipper invented in 1893. Talon also designs, manufactures, engineers, and distributes apparel trim products and specialty waist-bands under its trademark names, Talon, Tag-It and TekFit, to more than 60 apparel brands and manufacturers including Levi Strauss & Co., Juicy Couture, Ralph Lauren, Victoria's Secret, Target Stores, Wal-Mart, and Express. The company has offices and facilities in the United States, Hong Kong, China, India and the Dominican Republic and is expanding into Eastern Europe, Indonesia and Vietnam. FORWARD LOOKING STATEMENTS This news release contains forward-looking statements made in reliance upon the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. 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, and the potential for growth in zipper sales. Factors which could cause actual results to differ materially from these forward-looking statements include our ability to manage an international expansion, the level of acceptance of the company's products by retailers and consumers, pricing pressures and other competitive factors and the unanticipated loss of major customers. 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. COMPANY CONTACT Talon International, Inc. Rayna Long Tel (818) 444-4128 rlong@talonzippers.com INVESTOR RELATIONS Scott Liolios or Scott Kitcher Liolios Group, Inc. Tel (949) 574-3860 3 TALON INTERNATIONAL, INC. (FORMERLY TAG-IT PACIFIC, INC.) CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
Three Months Ended June 30, Six Months Ended June 30, --------------------------- ---------------------------- 2007 2006 2007 2006 ------------ ------------ ------------ ------------ Net sales ......................... $ 13,566,981 $ 14,246,087 $ 22,657,099 $ 24,884,303 Cost of goods sold ................ 9,484,488 10,118,850 15,827,411 17,914,341 ------------ ------------ ------------ ------------ Gross profit ................... 4,082,493 4,127,237 6,829,688 6,969,962 Selling expenses .................. 841,326 674,894 1,547,561 1,220,519 General and administrative expenses 2,406,192 2,557,062 5,017,780 5,296,499 ------------ ------------ ------------ ------------ Total operating expenses ....... 3,247,518 3,231,956 6,565,341 6,517,018 Income from operations ............ 834,975 895,281 264,347 452,944 Interest expense, net ............. 265,858 229,139 490,574 516,205 ------------ ------------ ------------ ------------ Income (loss) before income taxes . 569,117 666,142 (226,227) (63,261) Provision for income taxes ........ 78,624 11,500 78,624 11,500 ------------ ------------ ------------ ------------ Net Income (loss) .............. $ 490,493 $ 654,642 $ (304,851) $ (74,761) ============ ============ ============ ============ Basic income (loss) per share ..... $ 0.03 $ 0.04 $ (0.02) $ (0.00) ============ ============ ============ ============ Diluted income (loss) per share ... $ 0.02 $ 0.04 $ (0.02) $ (0.00) ============ ============ ============ ============ Weighted average number of common shares outstanding: Basic .......................... 18,590,884 18,358,360 18,562,151 18,300,027 ============ ============ ============ ============ Diluted ........................ 20,058,682 18,598,442 18,562,151 18,300,027 ============ ============ ============ ============
4 TALON INTERNATIONAL, INC. (FORMERLY TAG-IT PACIFIC, INC.) CONSOLIDATED BALANCE SHEETS June 30, December 31, 2007 2006 ------------ ------------ Assets Current Assets: Cash and cash equivalents ..................... $ 3,822,264 $ 2,934,673 Restricted cash ............................... 9,500,000 -- Accounts receivable, net ...................... 6,040,757 4,664,766 Note receivable ............................... 1,450,051 1,378,491 Inventories, net .............................. 2,555,072 3,051,220 Recoverable legal costs ....................... 1,180,748 107,108 Prepaid expenses and other current assets ..... 675,063 433,926 ------------ ------------ Total current assets ............................. 25,223,955 12,570,184 Property and equipment, net ...................... 5,575,712 5,623,040 Fixed assets held for sale ....................... 826,904 826,904 Note receivable, less current portion ............ 677,601 1,420,969 Due from related party ........................... 722,918 675,137 Other intangible assets, net ..................... 4,110,751 4,139,625 Other assets ..................................... 720,546 437,569 ------------ ------------ Total assets ..................................... $ 37,858,387 $ 25,693,428 ============ ============ Liabilities and Stockholders' Equity Current liabilities: Accounts payable ............................... $ 6,391,504 $ 4,006,241 Accrued legal costs ............................ 1,267,167 427,917 Other accrued expenses ......................... 3,289,601 3,359,267 Demand notes payable to related parties ........ 85,176 664,970 Current portion of capital lease obligations .................................. 395,294 432,728 Current portion of notes payable ............... 405,878 1,107,207 Secured convertible promissory notes ........... 12,488,490 12,472,622 ------------ ------------ Total current liabilities ........................ 24,323,110 22,470,952 Capital lease obligations, less current portion ........................................ 351,292 474,733 Notes payable, less current portion .............. 1,000,482 1,061,514 Revolver note payable ............................ 1,307,806 -- Term note payable ................................ 7,106,260 -- Other long term liabilities ...................... 83,651 -- ------------ ------------ Total liabilities ................................ 34,172,601 24,007,199 ------------ ------------ Commitments and contingencies Stockholders' Equity: Preferred stock Series A, $0.001 par value; 250,000 shares authorized; no shares issued or outstanding ................ -- -- Common stock, $0.001 par value, 100,000,000 shares authorized; 20,041,433 shares issued and outstanding at June 30, 2007; 18,466,433 at December 31, 2006 ....... 20,041 18,466 Additional paid-in capital ..................... 54,341,135 51,792,502 Accumulated deficit ............................ (50,675,390) (50,124,739) ------------ ------------ Total stockholders' equity ....................... 3,685,786 1,686,229 ------------ ------------ Total liabilities and stockholders' equity ....... $ 37,858,387 $ 25,693,428 ============ ============ 5 -----END PRIVACY-ENHANCED MESSAGE-----