Foccini International Inc.
TSX VENTURE : FOI

November 29, 2007 17:44 ET

Foccini Management Expects First Annual Profit Despite Q3 Loss

TORONTO, ONTARIO--(Marketwire - Nov. 29, 2007) - Foccini International Inc. (TSX VENTURE:FOI) (the "Company"), 100% owner of Austrian merchandising and design subsidiary Foccini Trade GmbH ("FT"), today reported fiscal 2007 third quarter results for the period ending September 30, 2007.

The Company reported a net loss for the quarter of $55,639 or $0.002 loss per share based on 27,321,179 weighted average shares outstanding versus a loss of $59,171 or $0.0023 loss per share based on the same amount of shares outstanding in the same quarter last year.

Despite the third quarter loss, management expects a boost to total revenue and net income in the fourth quarter as a result of the following reasons:

i) FT completed a contract with Osterreichischen Bundesbahnen (Austrian National Railway or "OBB") to deliver outdoor clothing and safety accessories for its employees. A total of 25,000 pieces were manufactured during the second and third quarters of 2007 and revenue was realized when these goods were shipped to OBB in the beginning of the fourth quarter.

ii) FT continues to focus on its overall efficiencies and continues to benefit from cost sharing initiatives with related parties.

iii) FT is starting to see the benefits of focusing on higher margin customized sales rather than the increasingly competitive generic merchandising sales that made up more of the sales mix in previous years.

iv) FT has benefited from the devaluation of the US dollar versus the Euro and Canadian dollar during 2007. Many of FT's products are manufactured in China where billing is based in US dollars. The revenue of FT is predominantly based in Euros. The net effect has been an increasing gross margin percentage in recent quarters, enhancing FT's bottom line.

As a result of these factors, FT expects net income for both the fourth quarter and the year ending Dec 31, 2007 to be its best result since the Company went public in November, 2003.

Reduction of Bank Debt Expected in Fourth Quarter

The Company's working capital deficiency as at September 30, 2007, was $1,258,986 as current liabilities totalled $2,056,574. FT management expects to significantly reduce this working capital deficiency during the fourth quarter as a result of the following:

- In the fourth quarter of 2007, Mr. Christian Jagerhofer, CEO of the Company, repaid 177,000EURO to eliminate a balance owing to FT (Approx. $250,420 CAD). This amount was allocated toward reducing FT's outstanding bank debt and is shown as a "subsequent event" in the Q3 financial statements.

- In addition, FT management expects to pay approximately 300,000 EURO (approx. $424,440 CAD) of the outstanding bank debt as a result of the improved revenues expected in the fourth quarter. The exact amount will be confirmed at the end of the fourth quarter.

Recent Strategic Developments

In addition to planned debt reduction within FT, management of the Company continues to seek new opportunities to increase shareholder value, whether these opportunities are within the existing framework of the Company, or if they require a new business entity such as the one proposed in the Change of Business transaction disclosed to the market on October 31, 2006.

Management of the Company has filed financial statements and Management Discussion and Analysis for the quarter ending September 30, 2007. These statements and MD&A, along with additional information including past press releases regarding the Company, can be accessed at www.sedar.com.

Foccini International has 27,321,179 common shares issued and outstanding.

WARNING: The statements made in this news release contain forward-looking statements that include risks and uncertainties, which reflect management's current views of future events and financial performance. Actual events or results could differ materially from expectations and projections set out herein. The Company undertakes no obligation to update forward-looking statements, whether as a result of new information, future events, or otherwise; however, these risks may be detailed from time to time in Foccini International Inc.'s public disclosures.

The TSX Venture Exchange has not reviewed and does not accept responsibility for the accuracy or adequacy of this release.

Contact Information

  • Foccini International Inc.
    Richard Muruve
    Director
    (647) 428-7031
    (647) 428-7032 (FAX)