Date: Monday, November 19, 2007 Time: 4:30 pm Eastern (1:30 pm Pacific) Domestic callers: 1-800-322-9079 International callers: 1-973-582-2717 Conference ID#: 9483352 Internet Simulcast: http://viavid.net/dce.aspx?sid=00004903If 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 December 3, 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 # 9483352. 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® 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.
TALON INTERNATIONAL, INC.
(Formerly Tag-It Pacific, Inc.)
Condensed Consolidated Statements of Operations
(unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
-------------------------- --------------------------
2007 2006 2007 2006
============ ============= ============ =============
Net sales $ 9,013,135 $ 13,366,945 $ 31,670,234 $ 38,251,248
Cost of goods sold 6,486,659 9,218,539 22,422,412 27,132,880
------------ ------------- ------------ -------------
Gross profit 2,526,476 4,148,406 9,247,822 11,118,368
Selling expenses 722,447 910,996 2,161,666 2,131,515
General and
administrative
expenses 2,731,665 2,606,936 7,749,445 7,903,435
Reserve for
impairment of
note receivable 2,127,653 - 2,127,653 -
------------ ------------- ------------ -------------
Total operating
expenses 5,581,765 3,517,932 12,038,764 10,034,950
Income (loss) from
operations (3,055,289) 630,474 (2,790,942) 1,083,418
Interest expense,
net 647,514 236,500 1,138,088 752,705
------------ ------------- ------------ -------------
Income (loss)
before income
taxes (3,702,803) 393,974 (3,929,030) 330,713
Provision for
income taxes (20,972) 54,857 57,652 66,357
------------ ------------- ------------ -------------
Net income
(loss) $ (3,681,831) $ 339,117 $ (3,986,682) $ 264,356
============ ============= ============ =============
Basic income
(loss) per share $ (0.18) $ 0.02 $ (0.21) $ 0.01
============ ============= ============ =============
Diluted income
(loss) per share $ (0.18) $ 0.02 $ (0.21) $ 0.01
============ ============= ============ =============
Weighted average
number of common
shares outstanding:
Basic 20,041,433 18,440,927 19,060,664 18,347,509
============ ============= ============ =============
Diluted 20,041,433 19,279,648 19,060,664 18,719,531
============ ============= ============ =============
TALON INTERNATIONAL, INC.
(Formerly Tag-It Pacific, Inc.)
Condensed Consolidated Balance Sheets
(unaudited)
September 30, December 31,
2007 2006
-------------- --------------
Assets
Current assets:
Cash and cash equivalents $ 2,318,712 $ 2,934,673
Accounts receivable, net 3,866,355 4,664,766
Note receivable, net - 1,378,491
Inventories, net 2,710,051 3,051,220
Prepaid expenses and other current assets 449,743 541,034
-------------- --------------
Total current assets 9,344,861 12,570,184
Property and equipment, net 5,418,095 5,623,040
Fixed assets held for sale 826,904 826,904
Note receivable, less current portion - 1,420,969
Due from related party 736,557 675,137
Intangible assets, net 4,110,751 4,139,625
Other assets, net 592,971 437,569
-------------- --------------
Total assets $ 21,030,139 $ 25,693,428
============== ==============
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable $ 5,363,432 $ 4,533,145
Accrued legal costs 226,507 427,917
Other accrued expenses 2,246,344 2,832,363
Demand notes payable to related parties 85,176 664,970
Current portion of capital lease
obligations 383,090 432,728
Current portion of notes payable 294,259 1,107,207
Secured convertible promissory notes - 12,472,622
-------------- --------------
Total current liabilities 8,598,808 22,470,952
Capital lease obligations, less current
portion 247,763 474,733
Notes payable, less current portion 925,104 1,061,514
Revolver note payable 3,807,806 -
Term note payable, net of discount 7,289,480 -
Other long term liabilities 83,651 -
-------------- --------------
Total liabilities 20,952,612 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 September 30, 2007;
18,466,433 at December 31, 2006 20,041 18,466
Additional paid-in capital 54,394,342 51,792,502
Accumulated deficit (54,357,221) (50,124,739)
Accumulated other comprehensive
income-foreign currency 20,365 -
-------------- --------------
Total stockholders’ equity 77,527 1,686,229
-------------- --------------
Total liabilities and stockholders’ equity $ 21,030,139 $ 25,693,428
============== ==============
Contact Information: Company Contact Talon International, Inc. Rayna Long Tel (818) 444-4128 Investor Relations Scott Liolios or Scott Kitcher Liolios Group, Inc. Tel (949) 574-3860