HRSH Hirsch International (MM)

Hirsch International Corp. (NASDAQ: HRSH, http://www.hirschinternational.com) today announced financial results for the second quarter ended June 30, 2009.

For the second quarter of 2009, net sales were $6.2 million, compared to $10.2 million in the second quarter of 2008. Net loss in the second quarter of 2009 was $2.2 million or $0.23 a diluted share (including $0.08 a share from discontinued operations) as compared to net loss of $1.0 million or $0.11 per diluted share in the second quarter of 2008. For the six months, net sales were $12.0 million, compared to $21.9 million for the six months ended June 30, 2008. Net loss for the six months of 2009 was $4.9 million or $0.52 a diluted share (including $0.21 a share from discontinued operations) as compared to $1.6 million or $0.17 a diluted share for 2008.

Gross profit for the second quarter of 2009 was $2.0 million, or 32% of net sales, compared to $3.4 million, or 33% of net sales, in the second quarter of 2008. Gross profit for the six months of 2009 was $3.7 million or 31% as compared to $7.3 million or 34%. Selling, general and administrative expenses for the second quarter of 2009 decreased by $1.2 million to $3.2 million from $4.4 million in 2008 primarily from the overall reduction in compensation, travel and auto expenses. Selling, general and administrative expenses for the six months of 2009 were $6.4 million a decrease of $2.7 million as compared to $9.1 million for the six months of 2008. Operating expenses for the six months of 2009 were $6.7 million as compared to $9.1 million for the six months of 2008. Included in operating expenses for the three and six months of 2009 was $300,000 in transaction costs related to the go private transaction which was announced on July 2, 2009.

During the second quarter of 2009, the Company determined that U.S. Graphic Arts, Inc. could not continue as a going concern and discontinued its operations. Accordingly, the Company reported its operations as discontinued operations in accordance with SFAS 144.

Management Comment

Paul Gallagher, President and CEO of the Company, stated, “Our six month results reflect the continued reluctance by our customers to buy capital equipment worsened by tightened credit markets and a high level of late model used equipment availability. As business conditions continue at these depressed levels we have accelerated our cost and expense reduction programs in an effort to at least partially offset the devastating effects of this depressed economy. Meanwhile, we will continue to provide the industry with the most innovative and highest quality products and the most advanced customer education and support systems available in the decorated apparel marketplace.”

Income Summary (Unaudited)

(in thousands, except EPS)

  Three Months Ended   Six Months Ended June 30, June 30, 2009   2008 2009   2008   Revenues $6,235 $10,188 $12,031 $21,880   Gross Profit 2,018 3,393 3,714 7,341 % of Revenues 32% 33% 31% 34%   Operating Expenses: Selling General and Administrative 3,159 4,436 6,400 9,123 Transaction Costs 298 - 298 - Operating Expenses 3,457 4,436 6,698 9,123   Loss from continuing operations (1,439) (1,043) (2,984) (1,782)   Other Expense (Income) 14 (38)

(8)

(144)   Loss from continuing operations before taxes (1,453) (1,005)

(2,976)

(1,638)   Income Tax Provision (Benefit) (30) 9

(17)

9   Net Loss from continuing operations (1,423) (1,014) (2,959) (1,647)   Loss from discontinued operations (764) - (1,968) -   Net Loss $(2,187) $(1,014) $(4,927) $(1,647)   Loss Per Share Basic and Diluted:   Loss from continuing operations $(0.15) $(0.11) $(0.31) $(0.17) Loss from discontinued operations (0.08) - (0.21) - Basic and diluted Loss per Share

$(0.23)

$(0.11) $(0.52) $(0.17)

Balance Sheet

(in thousands)

  June 30, 2009 December 31, 2008 (unaudited) Cash $3,629 $4,729 Accounts Receivable, net 3,311 4,732 Inventories, net 5,102 7,835 Other Current Assets 399 223 Property, Plant & Equipment, net 1,495 1,553 Assets of discontinued operations - 1,922 Other Assets 56 36 Total Assets $13,992 $21,030   Accounts Payable & Accrued Expenses $3,862 $5,671 Customer Deposits 319 737 Liabilities of discontinued operations 1,617 1,515 Other Liabilities - 48 Total Liabilities 5,865 7,971   Stockholders’ Equity 8,194 13,059   Total Liabilities and Stockholders’ Equity $13,992 $21,030

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 Kornit and Mimaki digital garment printers and full line of screenprint and digital print support products. 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 was founded in 1968 and is headquartered in Hauppauge, N.Y.

Safe Harbor Statement

This press release contains forward-looking statements which are made pursuant to the safe harbor provisions 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 2008, which may be updated by our subsequent periodic reports, 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.