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) 569-4271 |
TANDY BRANDS ACCESSORIES REPORTS
THIRD QUARTER 2005 RESULTS
-Announces Eighth Consecutive Quarterly Dividend-
ARLINGTON, TX, April 22, 2005 – Tandy Brands Accessories, Inc. (Nasdaq NM:TBAC)today announced financial results for the third quarter ended March 31, 2005.
For the third quarter of fiscal 2005, net sales increased 3.2% to $43.9 million compared to $42.6 million for the same period last year. The company reported a net loss for the third quarter of $997,000 or $0.16 per diluted share compared to net income of $132,000 or $0.02 per share in the prior year’s third quarter. These results are in line with the financial results previously announced on April 15th.
For the nine months ended March 31, 2005, net sales were $178.4 million compared to $171.0 million for the same period in the prior year. Net income for the nine-month period totaled $6.1 million, or $0.93 per diluted share, compared to net income of $6.9 million, or $1.08 per diluted share, for the same period last year.
J. S. B. Jenkins, President and Chief Executive Officer, commented, “As we previously announced on April 15th, we did not meet our plan for the third quarter of fiscal 2005. The net loss we experienced in the third quarter was a result of softer than expected sales during March, particularly in our women’s mass merchant accessory business. Our results were also impacted by increased selling, general and administrative expenses and higher than anticipated return experience related to the ETON gift accessory business. While the gift accessory business did not meet our expectations due to returns in the third quarter, demand by the retail community remains strong. The number of gift programs recently established among key department stores and mass merchandise customers for Father’s Day and the holiday season is already better than we anticipated.”
Mr. Jenkins continued, “In order to improve the performance in our women’s segment, the company will be restructuring and consolidating its sales, merchandising, and administrative efforts related to the women’s mass merchant and department store business units. These activities are expected to result in one-time, non-operational charges related to severance of approximately $0.02 per share that will impact reported results for the fourth quarter.”
The company anticipates fourth quarter net sales to be in the range of $41 million to $44 million and a net loss to be in the range of $0.12 to $0.17 per diluted share. The net loss for the fourth quarter excludes any potential non-cash charge related to goodwill impairment in connection with the company’s women’s mass merchant accessory business unit that may result as part of the company’s annual goodwill assessment. For the 2005 fiscal year, the company anticipates net sales to be in the range of $219 to $223 million and earnings to be within a range of $0.75 to $0.80 per diluted share.
The company also announced today that the Board of Directors approved a quarterly dividend of $0.0275 per common share that will be payable July 20, 2005, to shareholders of record at the close of business on June 30, 2005.
Mr. Jenkins concluded, “We believe very strongly in the market opportunities for our core business segments. Our men’s business continues to perform beyond expectations and we continue to gain ground with many of our new initiatives. These efforts have enhanced our product offering and have allowed us to increase our penetration in the department store and mass merchant channels. The opportunities associated with our gift business are excellent and our financial performance remains above plan. We are taking the appropriate steps to improve the performance in our women’s business and believe that our planned initiatives will better position the company for the future. We are proud to be paying our eighth consecutive quarterly dividend and remain committed to building value for our shareholders.”
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, Friday, April 22, 2005, at 10:00 a.m. ET. The dial-in number for the call is (913) 981-4911. For those who are unable to listen to the live broadcast, an audio replay of the call will be available through Friday, April 29, 2005, and can be accessed by dialing (719) 457-0820, passcode #5497798. 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 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 Operations
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended | Nine Months Ended | |||||||||||||||
March 31, | March 31, | |||||||||||||||
2005 | 2004 | 2005 | 2004 | |||||||||||||
Net sales | $ | 43,905 | $ | 42,560 | $ | 178,368 | $ | 170,951 | ||||||||
Cost of goods sold | 27,839 | 27,177 | 112,211 | 111,857 | ||||||||||||
Gross margin | 16,066 | 15,383 | 66,157 | 59,094 | ||||||||||||
Selling, general and administrative expenses | 16,112 | 13,594 | 51,832 | 42,859 | ||||||||||||
Depreciation and amortization | 1,393 | 992 | 3,713 | 3,050 | ||||||||||||
Total operating expenses | 17,505 | 14,586 | 55,545 | 45,909 | ||||||||||||
Operating income (loss) | (1,439 | ) | 797 | 10,612 | 13,185 | |||||||||||
Interest expense | (313 | ) | (596 | ) | (971 | ) | (1,966 | ) | ||||||||
Royalty, interest and other income | 40 | 24 | 208 | 55 | ||||||||||||
Income (loss) before provision for income taxes | (1,712 | ) | 225 | 9,849 | 11,274 | |||||||||||
Provision (benefit) for income taxes | (715 | ) | 93 | 3,741 | 4,388 | |||||||||||
Net income (loss) | $ | (997 | ) | $ | 132 | $ | 6,108 | $ | 6,886 | |||||||
Earnings (loss) per common share: | $ | (0.16 | ) | $ | 0.02 | $ | .97 | $ | 1.11 | |||||||
Earnings (loss) per common share-assuming dilution: | $ | (0.16 | ) | $ | 0.02 | $ | .93 | $ | 1.08 | |||||||
Dividends declared per share | $ | 0.0275 | $ | .0250 | $ | 0.0825 | $ | .0750 | ||||||||
Common shares outstanding | 6,374 | 6,283 | 6,317 | 6,199 | ||||||||||||
Common shares outstanding shares-assuming dilution | 6,374 | 6,430 | 6,570 | 6,367 | ||||||||||||
TANDY BRANDS ACCESSORIES, INC.
Condensed Consolidated Balance Sheets
(In thousands)
March 31, | June 30, | |||||||
2005 | 2004 | |||||||
(Unaudited) | (Unaudited) | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 2,196 | $ | 6,086 | ||||
Accounts receivable, net | 39,067 | 33,427 | ||||||
Inventories | 63,524 | 57,086 | ||||||
Deferred income taxes | 4,882 | 4,009 | ||||||
Other current assets | 1,796 | 1,613 | ||||||
Total current assets | 111,465 | 102,221 | ||||||
Property, plant and equipment, at cost: | ||||||||
Property and equipment, at cost | 37,213 | 34,581 | ||||||
Accumulated depreciation | (22,923 | ) | (20,206 | ) | ||||
Net property, plant and equipment | 14,290 | 14,375 | ||||||
Goodwill, net of accumulated amortization | 18,148 | 11,655 | ||||||
Other intangibles, less amortization | 6,590 | 4,534 | ||||||
Supplemental Executive Retirement Plan intangible asset | 1,255 | 1,255 | ||||||
Other noncurrent assets | 1,396 | 1,534 | ||||||
TOTAL ASSETS | $ | 153,144 | $ | 135,574 | ||||
LIABILITIES & STOCKHOLDERS’ EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 11,462 | $ | 14,224 | ||||
Accrued expenses | 6,488 | 6,362 | ||||||
Total current liabilities | 17,950 | 20,586 | ||||||
Notes payable | 20,571 | 10,000 | ||||||
Deferred income taxes | 3,199 | 2,066 | ||||||
Supplemental Executive Retirement Plan liability | 1,456 | 1,721 | ||||||
Other noncurrent liabilities | 1,727 | 1,302 | ||||||
Total liabilities | 44,903 | 35,675 | ||||||
Stockholders’ equity: | ||||||||
Common stock | 6,512 | 6,306 | ||||||
Additional paid-in capital | 28,872 | 26,765 | ||||||
Cumulative other comprehensive income (loss) | 419 | (121 | ) | |||||
Shares held by Benefit Restoration Plan Trust | (980 | ) | (894 | ) | ||||
Retained earnings | 73,418 | 67,843 | ||||||
Total stockholders’ equity | 108,241 | 99,899 | ||||||
TOTAL LIABILITIES & STOCKHOLDERS’ EQUITY | $ | 153,144 | $ | 135,574 | ||||