EXHIBIT 99
Tandy Brands Accessories, Inc. | Investor Relations: | |
J.S.B. Jenkins | Integrated Corporate Relations | |
President/Chief Executive Officer | Bill Zima (203) 222-9013 | |
(817) 548-0090 | Media Relations: | |
britt_jenkins@tandybrands.com | Monarch Communications, Inc. | |
Jeff Siegel (516) 569-6144 |
TANDY BRANDS ACCESSORIES REPORTS
THIRD QUARTER 2004 RESULTS
ARLINGTON, TX, April 21, 2004 — Tandy Brands Accessories, Inc. (Nasdaq NM:TBAC) today announced financial results for the third quarter ended March 31, 2004.
For the third quarter of fiscal 2004, net sales totaled $42.6 million compared to $47.0 million for the same period last year. Net income for the third quarter of fiscal 2004 totaled $0.1 million, or $0.02 per diluted share, compared to net income of $1.0 million, or $0.17 per diluted share, for the same period last year.
For the nine months ended March 31, 2004, net sales were $171.0 million compared to $173.3 million for the same period in the prior year. Net income for the nine-month period totaled $6.9 million, or $1.08 per diluted share, compared to net income of $6.5 million, or $1.08 per diluted share, for the same period last year.
J. S. B. Jenkins, President and Chief Executive Officer, commented, “As anticipated and discussed in our last conference call, the downward pressure on retail inventory levels by major retailers and a challenging market for women’s mass merchant fashion accessories impacted our results during the quarter. Even so, we exceeded our latest earnings guidance for the third quarter and significantly exceeded expectations in balance sheet and cash flow performance. Our men’s accessories net sales for the quarter were up over 9% reflecting strong performance in our men’s and boy’s product categories. Unfortunately, our strong third quarter men’s sales performance was offset by lower than expected sales of women’s accessories, primarily to mass market retailers. Due to competitive market pressures and fewer item-driven trends, we anticipate that this situation will continue during the fourth quarter.”
The company now anticipates that fourth quarter net sales are likely to range between $39 and $44 million and earnings are likely to be within a range of $(0.03) loss to $0.02 per diluted share, compared to prior guidance for net sales of $44 to $46 million and for earnings of between $0.10 and $0.12 per diluted share.
Mr. Jenkins concluded, “Our balance sheet performance was above expectation during the third quarter, with improved positions in accounts receivable and inventory driving strong cash flow. On April 20, 2004, we paid our 3rd quarterly dividend of $0.025 per share to our shareholders.
We remain encouraged by our portfolio of brands and private label programs as well as with our growth initiatives for each of these businesses. Our leading position in several product classifications makes us a supplier and licensee of choice across a variety of distribution channels and we anticipate a return to normalized sales and earnings growth during the course of the upcoming fiscal year.”
Conference Call Information
Investors and interested parties will have the opportunity to listen to management’s discussion of Tandy Brands’ third quarter results in a conference call to be held today, Wednesday, April 21, 2004, at 10:00 a.m. ET. The dial-in number for the call is (888) 802-7345. For those who are unable to listen to the live broadcast, an audio replay of the call will be available through Tuesday, April 27, 2004, and can be accessed by dialing (877) 519-4471, passcode #4693033. A live webcast of the conference call will also be broadcast at: www.viavid.net.
About Tandy Brands Accessories, Inc.
Tandy Brands Accessories, Inc. designs, manufactures and markets fashion accessories for men, women and children. Key product categories include belts, wallets, handbags, suspenders, socks, scarves, sporting goods, and cold weather and hair accessories. Merchandise is sold under various national brand names as well as private labels to all major levels of retail distribution, including the ROLFS e-commerce web site at www.rolfs.net.
Safe Harbor Language
Except for historical information contained herein, the statements in this release are forward-looking and made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve known and unknown risks and uncertainties, which may cause the Company’s actual results in future periods to differ materially from forecasted or expected results. Those risks include, among other things, the competitive environment in the industry in general and in the Company’s specific market areas, inflation, changes in costs of goods and services and economic conditions in general and in the Company’s specific market area. Those and other risks are more fully described in the Company’s filings with the Securities and Exchange Commission.
(Tables to follow)
TANDY BRANDS ACCESSORIES, INC.
Condensed Consolidated Statements of Income
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended | Nine Months Ended | |||||||||||||||
March 31, | March 31, | |||||||||||||||
2004 | 2003 | 2004 | 2003 | |||||||||||||
Net sales | $ | 42,560 | $ | 47,011 | $ | 170,951 | $ | 173,261 | ||||||||
Cost of goods sold | 27,177 | 30,499 | 111,857 | 112,735 | ||||||||||||
Gross margin | 15,383 | 16,512 | 59,094 | 60,526 | ||||||||||||
Selling, general and administrative expenses | 13,594 | 13,092 | 42,859 | 43,620 | ||||||||||||
Depreciation and amortization | 992 | 1,071 | 3,050 | 3,229 | ||||||||||||
Total operating expenses | 14,586 | 14,163 | 45,909 | 46,849 | ||||||||||||
Operating income | 797 | 2,349 | 13,185 | 13,677 | ||||||||||||
Interest expense | (596 | ) | (670 | ) | (1,966 | ) | (2,187 | ) | ||||||||
Royalty, interest and other income | 24 | 15 | 55 | 61 | ||||||||||||
Income before provision for income taxes and cumulative effect of accounting change | 225 | 1,694 | 11,274 | 11,551 | ||||||||||||
Provision for income taxes | 93 | 662 | 4,388 | 4,497 | ||||||||||||
Net income before cumulative effect of accounting change | 132 | 1,032 | 6,886 | 7,054 | ||||||||||||
Cumulative effect of accounting change for SFAS No. 142, net of income taxes | — | — | — | (581 | ) | |||||||||||
Net income | $ | 132 | $ | 1,032 | $ | 6,886 | $ | 6,473 | ||||||||
Earnings per common share: | ||||||||||||||||
Before accounting change | $ | 0.02 | $ | 0.17 | $ | 1.11 | $ | 1.19 | ||||||||
Cumulative effect of accounting change | 0.00 | 0.00 | 0.00 | (0.10 | ) | |||||||||||
$ | 0.02 | $ | 0.17 | $ | 1.11 | $ | 1.09 | |||||||||
Earnings per common share-assuming dilution: | ||||||||||||||||
Before accounting change | $ | 0.02 | $ | 0.17 | $ | 1.08 | $ | 1.18 | ||||||||
Cumulative effect of accounting change | 0.00 | 0.00 | 0.00 | (0.10 | ) | |||||||||||
$ | 0.02 | $ | 0.17 | $ | 1.08 | $ | 1.08 | |||||||||
Dividends declared per share | $ | 0.025 | $ | 0.00 | $ | 0.075 | $ | 0.00 | ||||||||
Common shares outstanding | 6,283 | 5,976 | 6,199 | 5,930 | ||||||||||||
Common shares outstanding shares-assuming dilution | 6,430 | 6,069 | 6,367 | 6,020 | ||||||||||||
TANDY BRANDS ACCESSORIES, INC.
Condensed Consolidated Balance Sheets
(In thousands)
March 31, | June 30, | |||||||
2004 | 2003 | |||||||
ASSETS | (Unaudited) | (Unaudited) | ||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 23,013 | $ | 3,814 | ||||
Accounts receivable, net | 35,214 | 41,672 | ||||||
Inventories | 50,378 | 62,156 | ||||||
Deferred income taxes | 4,316 | 4,757 | ||||||
Other current assets | 1,159 | 1,250 | ||||||
Total current assets | 114,080 | 113,649 | ||||||
Property, plant and equipment, at cost: | ||||||||
Property and equipment, at cost | 34,085 | 31,885 | ||||||
Accumulated depreciation | (19,463 | ) | (17,261 | ) | ||||
Net property, plant and equipment | 14,622 | 14,624 | ||||||
Goodwill, net of accumulated amortization | 11,682 | 11,641 | ||||||
Other intangibles, less amortization | 4,625 | 4,900 | ||||||
Other noncurrent assets | 1,303 | 1,716 | ||||||
TOTAL ASSETS | $ | 146,312 | $ | 146,530 | ||||
LIABILITIES & STOCKHOLDERS’ EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 6,139 | $ | 14,522 | ||||
Accrued expenses | 7,748 | 9,996 | ||||||
Total current liabilities | 13,887 | 24,518 | ||||||
Notes payable | 30,000 | 30,000 | ||||||
Deferred income taxes | 2,074 | 1,776 | ||||||
Other noncurrent liabilities | 206 | 182 | ||||||
Total liabilities | 46,167 | 56,476 | ||||||
Stockholders’ equity: | ||||||||
Common stock | 6,281 | 6,019 | ||||||
Additional paid-in capital | 26,564 | 23,802 | ||||||
Cumulative other comprehensive income and unearned compensation on restricted stock | (550 | ) | (1,196 | ) | ||||
Retained earnings | 67,850 | 61,429 | ||||||
Total stockholders’ equity | 100,145 | 90,054 | ||||||
TOTAL LIABILITIES & STOCKHOLDERS’ EQUITY | $ | 146,312 | $ | 146,530 | ||||