EXHIBIT 99
Tandy Brands Accessories, Inc. | Investor Relations: | |
J.S.B. Jenkins | Integrated Corporate Relations | |
President/Chief Executive Officer | Bill Zima (203) 682-8200 | |
(817) 548-0090 | Media Relations: | |
britt_jenkins@tandybrands.com | Monarch Communications, Inc. | |
Jeff Siegel (516) 569-6144 |
TANDY BRANDS ACCESSORIES REPORTS
SECOND QUARTER 2005 RESULTS
Second Quarter Sales and Net Income Increase 15.3% and 9.8%.
ARLINGTON, TX, January 25, 2005 — Tandy Brands Accessories, Inc. (Nasdaq NM:TBAC)today announced financial results for the second quarter ended December 31, 2004.
For the second quarter of fiscal 2005, net sales increased 15.3% to $74.0 million compared to $64.2 million for the same period last year. Net income for the second quarter increased 9.8% to $4.3 million compared to the year ago level of $3.9 million. Earnings per diluted share for the second quarter increased 6.6% to $0.65 compared to $0.61 per diluted share in the year ago quarter.
During the second quarter of fiscal 2005, the company incurred a charge included in selling, general and administrative expense, which reduced earnings by $0.06 per diluted share in the second quarter. The charge related to a liability incurred to settle a pending legal dispute. Excluding this charge, earnings per diluted share for the quarter would have increased 16.4% to $0.71. This non-GAAP measure may not be comparable to similar measures used by other entities and should not be considered as an alternative to net income, which is determined in accordance in GAAP.
For the six months ended December 31, 2004, net sales were $134.5 million compared to $128.4 million for the same period in the prior year. Net income for the six-month period totaled $7.1 million, or $1.09 per diluted share, compared to net income of $6.8 million, or $1.07 per diluted share, for the same period last year.
J. S. B. Jenkins, President and Chief Executive Officer, commented, “We were very pleased with our sales and gross margin increases for the second quarter which exceeded the prior year. These results were driven by strong performance in our core men’s business as well as better-than-expected performance from our Eton gift accessory business. Our women’s mass merchant accessories business stabilized in the second quarter in which sales and gross margin exceeded the same period in the prior year. Although our selling, general and administrative expense was above the prior year due in part to the legal expense discussed above, we are pleased with the 6.6% increase in earnings per diluted share over the same quarter last year.”
The company anticipates that third quarter net sales are likely be in the range of $43 million to $46 million and earnings to be within a range of $0.05 to $0.09 per diluted share. For the full 2005 fiscal year, the company anticipates net sales to be in the range of $220 to $227 million and earnings to be within a range of $1.25 to $1.30 per diluted share.
Conference Call Information
Investors and interested parties will have the opportunity to listen to management’s discussion of Tandy Brands’ second quarter results in a conference call to be held today, Tuesday, January 25, 2005, at 10:00 a.m. ET. The dial-in number for the call is (913) 981-5522. For those who are unable to listen to the live broadcast, an audio replay of the call will be available through Tuesday, February 1, 2005, and can be accessed by dialing (719) 457-0820, passcode #4672422. 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, neckwear, gifts, 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 atwww.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 | Six Months Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2004 | 2003 | 2004 | 2003 | |||||||||||||
Net sales | $ | 73,990 | $ | 64,159 | $ | 134,463 | $ | 128,391 | ||||||||
Cost of goods sold | 45,958 | 42,078 | 84,372 | 84,680 | ||||||||||||
Gross margin | 28,032 | 22,081 | 50,091 | 43,711 | ||||||||||||
Selling, general and administrative expenses | 19,486 | 14,055 | 35,720 | 29,265 | ||||||||||||
Depreciation and amortization | 1,222 | 1,020 | 2,320 | 2,058 | ||||||||||||
Total operating expenses | 20,708 | 15,075 | 38,040 | 31,323 | ||||||||||||
Operating income | 7,324 | 7,006 | 12,051 | 12,388 | ||||||||||||
Interest expense | (402 | ) | (677 | ) | (658 | ) | (1,370 | ) | ||||||||
Royalty, interest and other income | 76 | 29 | 167 | 31 | ||||||||||||
Income before provision for income taxes | 6,998 | 6,358 | 11,560 | 11,049 | ||||||||||||
Provision for income taxes | 2,707 | 2,449 | 4,455 | 4,295 | ||||||||||||
Net income | $ | 4,291 | $ | 3,909 | $ | 7,105 | $ | 6,754 | ||||||||
Earnings per common share: | $ | 0.68 | $ | 0.63 | $ | 1.13 | $ | 1.10 | ||||||||
Earnings per common share-assuming dilution: | $ | 0.65 | $ | 0.61 | $ | 1.09 | $ | 1.07 | ||||||||
Dividends declared per share | $ | 0.0275 | $ | .0250 | $ | 0.0550 | $ | .0500 | ||||||||
Common shares outstanding | 6,315 | 6,207 | 6,289 | 6,157 | ||||||||||||
Common shares outstanding shares-assuming dilution | 6,585 | 6,399 | 6,537 | 6,336 | ||||||||||||
TANDY BRANDS ACCESSORIES, INC.
Condensed Consolidated Balance Sheets
(In thousands)
December 31, | June 30, | |||||||
2004 | 2004 | |||||||
ASSETS | (Unaudited) | (Unaudited) | ||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 3,129 | $ | 6,086 | ||||
Accounts receivable, net | 47,715 | 33,427 | ||||||
Inventories | 60,050 | 57,086 | ||||||
Deferred income taxes | 5,209 | 4,009 | ||||||
Other current assets | 1,685 | 1,613 | ||||||
Total current assets | 117,788 | 102,221 | ||||||
Property, plant and equipment, at cost: | ||||||||
Property and equipment, at cost | 36,566 | 34,581 | ||||||
Accumulated depreciation | (21,982 | ) | (20,206 | ) | ||||
Net property, plant and equipment | 14,584 | 14,375 | ||||||
Goodwill, net of accumulated amortization | 18,398 | 11,655 | ||||||
Other intangibles, less amortization | 6,280 | 4,534 | ||||||
Supplemental Executive Retirement Plan intangible asset | 1,255 | 1,255 | ||||||
Other noncurrent assets | 1,710 | 1,534 | ||||||
TOTAL ASSETS | $ | 160,015 | $ | 135,574 | ||||
LIABILITIES & STOCKHOLDERS’ EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 10,349 | $ | 14,224 | ||||
Accrued expenses | 10,425 | 6,362 | ||||||
Total current liabilities | 20,774 | 20,586 | ||||||
Notes payable | 24,482 | 10,000 | ||||||
Deferred income taxes | 2,916 | 2,066 | ||||||
Supplemental Executive Retirement Plan liability | 1,378 | 1,721 | ||||||
Other noncurrent liabilities | 1,784 | 1,302 | ||||||
Total liabilities | 51,334 | 35,675 | ||||||
Stockholders’ equity: | ||||||||
Common stock | 6,459 | 6,306 | ||||||
Additional paid-in capital | 28,194 | 26,765 | ||||||
Cumulative other comprehensive income (loss) | 471 | (121 | ) | |||||
Shares held by Benefit Restoration Plan Trust | (1,036 | ) | (894 | ) | ||||
Retained earnings | 74,593 | 67,843 | ||||||
Total stockholders’ equity | 108,681 | 99,899 | ||||||
TOTAL LIABILITIES & STOCKHOLDERS’ EQUITY | $ | 160,015 | $ | 135,574 | ||||
TANDY BRANDS ACCESSORIES, INC.
Reconciliation of Adjusted Earnings
(In thousands, except per share amounts)
(Unaudited)
Three Months | Six Months | |||||||
Ended | Ended | |||||||
December 31, | December 31, | |||||||
2004 | 2004 | |||||||
Net income, as reported | $ | 4,291 | $ | 7,105 | ||||
Adjustments, net of tax: | ||||||||
Pending settlement of legal matter | 417 | 417 | ||||||
Adjusted earnings | $ | 4,708 | $ | 7,522 | ||||
Adjusted earnings per share assuming dilution | $ | 0.71 | $ | 1.15 | ||||