Tag-It Pacific, Inc. (AMEX:TAG), the world's leading single-source provider of trim to the apparel industry, is pleased to report record sales and earnings for the first quarter of 2000.

Financial Highlights of the First Quarter:

Net sales increased 45% to $8.2 million versus 1999 results of
$5.6 million.

Operating income increased 76% to $0.44 million versus 1999
results of $0.25 million,

Operating margin increased 90 basis points to 5.3% versus the
1999 level of 4.4%.

Year-over-year EPS increased 33% to $0.04 from $0.03.
TAG's 1Q00 net sales increased 45% to $8.2 million versus 1Q99 net sales of $5.6 million. Revenue growth resulted from the company's business-to-business e-commerce system, Tag-It Turnkey (TM), and its Mexican operations that supply the denim and twill apparel industries. This system enables the company's customers to increase efficiency, reduce infrastructure, and reduce the occurrence of trim-related disruptions to the sourcing process.

Colin Dyne, Chief Executive Officer of Tag-It Pacific said, "This quarter, we are very pleased, as we announced on April 17, to have entered into an agreement which will bring us the Talon, Inc. business and brand name. Talon is one of the finest brands in the trim industry, known for its high-quality zippers. This deal brings a substantial turn-key business, plus cross-selling opportunities to the existing Talon base, additional avenues for growth, and strong relationships in the U.S., Mexican, and Asian business communities to Tag-it Pacific."

Mr. Dyne continued, "We are also pleased that during first quarter, we continued to achieve near-term financial and operating goals while positioning our business platform aggressively for future growth. Our continuing success with Tag-It Turnkey (TM) should enable our company to experience strong sales and earnings growth in our core business through the remainder of fiscal 2000 and beyond."

The 90 basis point improvement in operating profitability for 1Q00 was driven by leverage against fixed infrastructure costs. The 510 basis point decrease in gross margin for 1Q00 resulted largely from the continued hiring of additional operational personnel to manage the Tag-It Turnkey system. However, this reduction was offset by a lower need for selling expenses. Additionally, a mix-shift toward selling complete trim packages, a strategy which greatly accelerates revenue growth, also brought average gross margin somewhat lower. The cumulative effect on gross margin was more than offset by a 600 basis point improvement in SG&A margin for the quarter.

The company was also pleased to announce today that Sanwa Bank has increased the company's line of credit from $5.5 million to $10 million. This new line demonstrates that Sanwa Bank remains committed to supporting Tag-It Pacific as the company pursues an aggressive growth strategy.

About Tag-It Pacific

Tag-It Pacific is a single-source provider of complete brand identity programs and products as well as Web-based distribution and logistics systems to manufacturers of fashion driven apparel and to the licensed consumer products industries. The Company designs, produces and distributes woven and leather labels, paper hanging and bar-coded tags, metal jeans buttons and sewing thread, and zippers and injection-molded boxes. Tag-It Pacific also designs and/or manufactures products for a variety of major brand and private label oriented companies including Calvin Klein, Guess?, Tarrant Apparel, Tommy Hilfiger, Sony Signatures, Warner Bros. and Carole Little, among others.

Forward-Looking Statement Disclosure

With the exception of the historical information, the matters discussed above include forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Act of 1934, as amended. All forward looking statements, are subject to a number of risks and uncertainties including the risk of a softening of customer acceptance of the Company's products, risks of introduction by competitors of the Customer of systems with similar or better functionality to Tag-It Turnkey, pricing pressures and other competitive factors, the unanticipated loss of one or more major customers, unpredictability of future revenues and cash flow requirements, potential fluctuations in quarterly operating results, seasonality, risks associated with system development in connection with Tag-It Turnkey, management of potential growth, and risks of new business areas, business combinations, and strategic alliances. These and other risks are more fully described in the Company's filings with the Securities and Exchange Commission including the Company's most recently filed Annual Report on Form 10-KSB and Quarterly Report on Form 10-QSB, which should be read in conjunction herewith and may be obtained from Tag-It Pacific's Investor Relations Department. The Company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any statement herein or to reflect any change in the Company's expectations or any change in events, conditions or circumstances on which any such statement is based.


Tag-It Pacific, Inc.
Consolidated Income Statement
All numbers (excluding EPS) in 000's

First Quarter
Ended 3/31

1Q00 1Q99

Net Sales $8,191 $5,633
Cost of Sales 5,683 3,623
------------------------------------------------------------------
Gross Profit 2,508 2,010

Selling Expenses 361 526
G&A Expenses 1,711 1,236
------------------------------------------------------------------
TOTAL SG&A 2,072 1,762

Operating Income 436 248

Other Expense 103 24
Pretax Income 333 225
Income Tax 71 37
Net Income 262 187

Basic Shares 6,778 6,727
Basic EPS $0.04 $0.03

Diluted Shares 7,288 7,300
Diluted EPS $0.04 $0.03


Tag-It Pacific, Inc.
Selected Balance Sheet Items
All numbers in $000's

March 31, 2000 December 31, 1999

Accounts Receivable 2,938 2,906
Inventories 10,061 10,102
Total Current Assets 16,256 16,820
----------------------------------------------------------------------
Total Assets 19,518 19,855

Line of Credit 5,014 5,067
Accounts Payable 3,947 4,226
Total Current Liabilities 10,045 10,598
----------------------------------------------------------------------
Total Liabilities 10,394 10,994

Total Stockholder's Equity 9,124 8,861

Total Liabilities and Equity 19,518 19,855