LOS ANGELES, CA -- (Marketwired) -- 05/12/14 --
- Sales in Q1 2014 were $11.3 million -- an 11.9% increase over Q1 2013.
- Trim sales rise 28.1% over same sales in Q1 2013.
- Q1 2014 Gross profit of $3.7 million -- an increase of 17.6% over Q1 2013.
"Once again we are pleased to see continued growth and improvement throughout our business, even during our historically slowest quarter of the year," said Lonnie Schnell, Talon's Chief Executive Officer. "We saw solid performance across our product lines, especially in Trim, as our positions with core customers continued to grow and we concentrated on adding new global brand nominations to our marquee list of customers. We ended the first quarter strongly, achieving profitability strictly from operations," Schnell continued.
Total sales for the quarter ended March 31, 2014 were $11.3 million reflecting an 11.9% year-over-year increase compared to the first quarter of 2013. Zipper sales were $5.8 million for the quarter, virtually even with zipper sales in the same period in 2013. Zipper sales reflected some softness in sales within mass merchandizing brand customers, but this was mostly offset by increased sales within our strategically focused specialty retail brand customers. Trim sales of $5.5 million in the first quarter of 2014 reflected a strong increase of 28.1% from the first quarter of 2013, as specialty customers continued to grow their core programs with the Company at an increased rate. Sales for the quarter included $5,945 of Tekfit patented stretchable waistbands, a slight decline from Q1 2013, but evidenced the continuation of test marketing programs with several major retailers who are considering the adoption of this product into their core product categories.
Gross profit for the three months ended March 31, 2014 was $3.7 million or 32.9% of sales, as compared to $3.2 million for the first quarter of 2013; an increase of 17.6%. The gross profit increase for the quarter as compared to the same period in 2013 was principally attributable to greater overall sales volumes in the Trim segment and improved product mix of sales to specialty retailers as opposed to discount mass merchandisers, partially offset by higher manufacturing support, freight and duty costs.
Operating expenses for the three months ended March 31, 2014 were $3.6 million, reflecting an increase of $0.6 million as compared to the same period in 2013. Sales and marketing expenses totaled $1.4 million for the first quarter of 2014, an increase of $152,000 as compared to the same period in 2013 mainly due to higher compensation costs associated with the higher sales volumes. General and administrative expenses for the first quarter of 2014 totaled $2.2 million, or 19.1% of sales, compared to general and administrative expenses in the prior year of $1.7 million. The $474,000 increase in general and administrative expenses for the first quarter of 2014 is mainly attributed to a one-time receipt in 2013 of $350,000 from a settlement in a legal dispute regarding intellectual property rights, in addition to higher net compensation costs of $120,000.
"We again achieved net profitability in the first quarter (which is historically a loss quarter) of 2014, as a result of our double-digit revenue growth and keen focus on costs. We were profitable in the first quarter of 2013 as well, but that was aided by a one-time litigation settlement. In 2014, our profitability in the first quarter is strictly attributed to operations," noted Schnell. "We expect to carry this sales and earnings momentum into the second quarter, traditionally our strongest quarter of the year, as well as throughout the full ye