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Hirsch Reports First Quarter Results

HAUPPAUGE, NY – May 12, 2008, Hirsch International Corp. (NASDAQ: HRSH, http://www.hirschinternational.com), the leading provider of advanced embroidery, screen-printing, textile laser systems, and digital printing and services to the North American graphic and decorated apparel marketplace, today reported its financial results for the first quarter ended March 31, 2008. Hirsch’s net loss for the quarter ended March 31, 2008 was $0.6 million or $0.07 per diluted share. This compares to net income of $0.8 million or $0.09 per diluted share for the prior year quarter.

Management Comment
"Results for the quarter reflect a continued challenging economic and retail environment. The general economic slowdown has impacted our customers’ buying decisions, as they are reluctant to upgrade machines and/or purchase new machines. With significant strategic moves made in fiscal 2007 and continuing into 2008 to both add and enhance business opportunities and growth, we believe Hirsch is well prepared for the challenges yet to come. We have built a strong infrastructure, have an agile team in place, and a strong balance sheet from which to grow.  We have weathered many economic downturns during our forty-year history, and, although we certainly do not enjoy experiencing these downturns, I am confident we are in a position of strength to seize every opportunity as the market improves,” said Paul Gallagher, Hirsch’s President and Chief Executive Officer.

First Quarter
Revenues for the three months ended March 31, 2008 were $11.7 million, a decrease of $2.3 million, or 16.4%, compared to $14.0 million for the three months ended March 31, 2007. The decrease in sales for the three months ended March 31, 2008 is primarily attributable to a $2.5 million decrease in new embroidery equipment, a $0.4 million decrease in screenprinting equipment, offset by an increase of $0.6 million from textile lasers, $0.4 million from digital printing and a decrease of $0.4 million in all other products combined.

Gross Margin as a percentage of sales decreased to 33.8% for the three months ended March 31, 2008 as compared to 38.1% for the three months ended March 31, 2007.  The Company’s grossprofit decreased for the three months ended March 31, 2008 by $1.4 million or 26.4% to $3.9 million from $5.3 million at March 31, 2007.  The fluctuation of the dollar against the yen, which is the currency the Company’s embroidery machines are priced in, has affected and is likely to continue to affect the Company’s machine sales pricing competitiveness.  Embroidery machine prices have changed in US dollars due to these exchange rate fluctuations. 
Operating Expenses were $4.7 million, an increase of $0.2 million, primarily due to additional expenses associated with marketing the new screenprinting, textile laser and digital printing equipment.

About Hirsch International Corp.
Hirsch is a leading provider of equipment and education and support services to the graphic and decorated apparel industry.  The Company exclusively represents the decorated apparel industry's leading brands including Tajima embroidery equipment, MHM screen printing equipment, SEIT textile bridge lasers, Pulse Microsystems digitizing and design software and now Kornit digital garment printers. Hirsch also offers a broad line of consumable supplies, accessories and machine parts as well as factory certified technical support services.  Hirsch’s customer groups include: a wide range of contract manufacturers that outsource their embellishment requirements; manufacturers who use embroidery, screenprinting, laser etching or digital printing to embellish their  apparel and fashion accessories; promotional products, uniform, and sportswear companies; retail stores; and graphic and decorated apparel entrepreneurs servicing the athletic apparel, corporate logo-wear, and advertising specialties markets.

The Company is led by a strong and experienced management team 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 1968 and is headquartered in Hauppauge, N.Y.

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.  Readers should note 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 2007, 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.

Contacts:
Hirsch International Corp.:
Paul Gallagher
President and Chief Executive Officer
631-701-2211
pgallagher@hirschintl.com

Beverly Eichel
Executive Vice President and Chief Financial Officer
631-701-2169
beichel@hirschintl.com

The Investor Relations Group:
Investor Relations
Michael Crawford / Emily Hanan
mcrawford@investorrelationsgroup.com / ehanan@investorrelationsgroup.com
Media Relations
Susan Morgenbesser
smorgenbesser@investorrelationsgroup.com
212-825-3210

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