HRSH 3.35 Hirsch International Corp. Reports Second Quarter 2007 Results Business Wire "US Press Releases "
HAUPPAUGE, N.Y.--(BUSINESS WIRE)--
Hirsch International Corp. (NASDAQ: HRSH), a leading provider of advanced embroidery, screen-printing, and laser systems, as well as related support services to the North American decorated apparel marketplace, reported its financial results for the three and six months ended June 30, 2007 . Hirsch has changed its fiscal year end from January 28th to December 31st , thus the six months ended June 30, 2007 are compared with the five months ended June 30, 2006 .
Highlights for the three and six months ended June 30, 2007 , and for the three and five months ended June 30, 2006 , are as follows:
-- Net sales were $12.2 million for the three months ended June
30, 2007 , as compared to $13.6 million for the three months
ended June 30, 2006 . Net sales increased to $26.2 million for
the six months ended June 30, 2007 , as compared to $22.3
million for the five months ended June 30, 2006 .
-- Gross profit margin improved to 37.3% for the three months
ended June 30, 2007 , as compared to 33.4% for the three months
ended June 30, 2006 . Gross profit margin also improved for the
current six-month period, to 37.8% as compared to 34.2% for
the five months ended June 30, 2006 .
-- Gross profit remained constant at $4.6 million for the three
months ended June 30, 2007 , as compared to the three months
ended June 30, 2006 . Gross profit increased to $9.9 million
for the six months ended June 30, 2007 , as compared to $7.6
million for the five months ended June 30, 2006 .
-- Operating expenses decreased to $3.8 million for the three
months ended June 30, 2007 , as compared to $4.0 million for
the three months ended June 30, 2006 . Operating expenses
increased to $8.4 million for the six months ended June 30,
2007 , as compared to $6.8 million for the five months ended
June 30, 2006 .
-- Operating income increased to $732,000 for the three months
ended June 30, 2007 , as compared to $547,000 for the three
months ended June 30, 2006 . Operating income also increased to
$1.5 million for the six months ended June 30, 2007 , as
compared to $828,000 for the five months ended June 30, 2006 .
Included in operating income for both the three-month and
six-month periods ended June 30, 2007 is the recognition of a
litigation settlement of $450,000 with Sheridan Square
Entertainment which was entered into at the end of June
2007and paid after the end of the quarter.
-- Net income increased to $761,000 for the three months ended
June 30, 2007 , as compared to $581,000 for the three months
ended June 30, 2006 . Net income also increased to $1.6 million
for the six months ended June 30, 2007 , as compared to
$873,000 for the five months ended June 30, 2006 . Net income
for both the three-month and six-month periods ended June 30,
2007 includes the aforementioned settlement with Sheridan
Square Entertainment .
-- Earnings per diluted share increased to $0.08 for the three
months ended June 30, 2007 , as compared to $0.06 for the three
months ended June 30, 2006 . Earnings per diluted share also
increased to $0.17 for the six months ended June 30, 2007 , as
compared to $0.09 for the five months ended June 30, 2006 .
Paul Gallagher, Hirsch's President and CEO commented, "In the first half of the year we saw a drop in overall demand for equipment purchases industry wide. The first six months of the year tend to be less predictable and while our customers appear to be generally busy, we saw sales off about 2% from last year's first half run rate - mostly impacted by our second quarter performance. I suspect the slowdown in capital spending is reflective of overall concerns about the economy and a general cautiousness in expansion and replacement spending decisions. On the more positive side, we were able to deliver gross margin dollars on par with last year's second quarter and a first half increase of over $2.2 million ."
"Regarding the future, our 2007 operating plan includes initiatives to significantly expand market presence and penetration. To date, we are half way through a thirty percent staff expansion in critical customer support functions; well into a "next generation" web-based systems development project; and progressing on-plan to build the infrastructure base for our new screenprinting and laser product lines. And while we are not expecting substantial short-term profit contribution from these initiatives or new product introductions this year, we are expecting each to add nicely to profits in the future."
Mr. Gallagher concluded, "This is a building year for Hirsch and we will be entering 2008 much stronger and better positioned in the marketplace. We are also continuing to aggressively look for and pursue potential acquisition and strategic partnership opportunities primarily in and tangent to the $6 billion decorated apparel industry. I am very optimistic about our future. Our great position in the industry, strong capital structure, and outstanding team provide us with a great platform for future growth."
About Hirsch International Corp.
Hirsch is the leading provider of advanced commercial embroidery systems and support services in the United States . The Company offers single and multi-head embroidery machines, proprietary application software, embroidery parts, supplies and accessories, and technical service and support. Hirsch's customers include contract embroiderers, manufacturers of apparel and fashion accessories, retail stores, and embroidery entrepreneurs. The Company is the country's leading single source provider of Tajima embroidery systems, marketed under the name "Tajima USA Sales & Support by Hirsch."
Additionally, on August 2, 2006 Hirsch announced that it had entered into an exclusive ten-year distribution agreement with MHM Siebdruckmaschinen GmbH for the distribution and support of MHM screen-printing equipment in North America . Hirsch markets its MHM's product line under the name " MHM North America by Hirsch." On January 25, 2007 , the Company announced an exclusive ten-year distribution agreement with SEIT Elettronica SRL based in Italy . Hirsch provides sales and support services for the SEIT line of laser application equipment throughout the U.S.
Hirsch, lead by a strong and experienced management team, is focused on continuing to grow its core business through sound acquisitions of products and processes, as well as through related business ventures in which the Company can build and maximize stockholder value. The Company was founded in 1970 and is headquartered in Hauppauge, NY.
Safe Harbor Statement
This press release contains forward-looking statements set within the meaning of the Private Securities Litigation Reform Act of 1995. Except for historical information contained herein, the matters set forth in this news release are forward-looking statements. The Company noted that forward-looking statements set forth above involve a number of risks and uncertainties that could cause actual results to differ materially from any such statement, including, without limitation, the risks and uncertainties discussed under the caption "Risk Factors" in the Company's Form 10-K for calendar 2006, which discussion is incorporated herein by reference. Readers are also urged to read the periodic filings and current reports on Form 8-K of the Company.
HIRSCH INTERNATIONAL CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
June 30, December 31,
------------- -------------
2007 2006
------------- -------------
ASSETS (unaudited)
Cash and cash equivalents $13,850 $14,498
Accounts receivable, net 5,811 5,756
Inventories, net 5,711 5,710
Other current assets 1,016 367
Property, plant and equipment, net 262 319
Other assets 47 538
------------- -------------
TOTAL ASSETS $26,697 $27,188
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Accounts payable and accrued expenses $7,502 $10,058
Customer deposits 381 457
Other current liabilities 157 140
Other long term liabilities - less
current maturities 60 120
------------- -------------
TOTAL LIABILITIES 8,100 10,775
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TOTAL STOCKHOLDERS' EQUITY 18,597 16,413
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $26,697 $27,188
============= =============
HIRSCH INTERNATIONAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(All amounts in thousands, except per share data)
(unaudited)
Three Months Ended Six Five
Months Months
Ended Ended
June 30, June 30, June 30, June 30,
2007 2006 2007 2006
------------ -------- -------- --------
NET SALES $12,200 $13,660 $26,234 $22,305
COST OF SALES 7,642 9,093 16,327 14,669
------------ -------- -------- --------
GROSS PROFIT 4,558 4,567 9,907 7,636
OPERATING EXPENSES 3,826 4,020 8,364 6,808
------------ -------- -------- --------
OPERATING INCOME 732 547 1,543 828
------------ -------- -------- --------
OTHER INCOME 53 48 109 59
------------ -------- -------- --------
INCOME BEFORE PROVISION FOR
INCOME TAXES 785 595 1,652 887
INCOME TAX PROVISION 24 14 74 14
------------ -------- -------- --------
NET INCOME $761 $581 $1,578 $873
============ ======== ======== ========
INCOME PER SHARE:
Basic $0.08 $0.07 $0.18 $0.10
------------ -------- -------- --------
Diluted $0.08 $0.06 $0.17 $0.09
------------ -------- -------- --------
WEIGHTED AVERAGE NUMBER OF
SHARES IN THE CALCULATION OF
INCOME PER SHARE:
Basic 9,071 8,487 8,912 8,487
Diluted 9,496 9,649 9,284 9,649
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Source: Hirsch International Corp.
