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SECURITIES AND EXCHANGE COMMISSION
FORM 11-K
ANNUAL REPORT PURSUANT TO
SECTION 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the Calendar Year Ended December 31, 2004
Commission File Number 0-18927
TANDY BRANDS ACCESSORIES, INC.
(full title of Plan)
TANDY BRANDS ACCESSORIES, INC.
690 East Lamar Blvd., Suite 200
Arlington, Texas 76011
(Name of issuer of the securities held pursuant to the Plan and
address of its principal executive office.)
CONTENTS
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Consent of Independent Registered Public Accounting Firm |
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Administrative Committee and Participants of the
Tandy Brands Accessories, Inc. Stock Purchase Program
We have audited the accompanying statements of net assets available for benefits of the Tandy Brands Accessories, Inc. Stock Purchase Program as of December 31, 2004 and 2003, and the related statements of changes in net assets available for benefits for the years then ended. These financial statements are the responsibility of the Plan’s management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Plan’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the Tandy Brands Accessories, Inc. Stock Purchase Program as of December 31, 2004 and 2003, and the changes in its net assets available for benefits for the years then ended in conformity with accounting principles generally accepted in the United States of America.
/s/ Whitley Penn
Fort Worth, Texas
March 18, 2005
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TANDY BRANDS ACCESSORIES, INC.
STOCK PURCHASE PROGRAM
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
December 31, | ||||||||
2004 | 2003 | |||||||
Assets | ||||||||
Receivables: | ||||||||
Employee | $ | 1,065,863 | $ | 1,040,431 | ||||
Employer | 528,619 | 513,525 | ||||||
Total assets | 1,594,482 | 1,553,956 | ||||||
Liabilities | — | — | ||||||
Net Assets Available for Benefits | $ | 1,594,482 | $ | 1,553,956 | ||||
See accompanying notes to financial statements.
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TANDY BRANDS ACCESSORIES, INC.
STOCK PURCHASE PROGRAM
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
Year Ended December 31, | ||||||||
2004 | 2003 | |||||||
Additions to Net Assets | ||||||||
Contributions: | ||||||||
Employee | $ | 1,065,863 | $ | 1,040,431 | ||||
Employer | 528,619 | 513,525 | ||||||
Total additions to net assets | 1,594,482 | 1,553,956 | ||||||
Deductions from Net Assets | ||||||||
Benefit distributions | 1,553,956 | 1,295,986 | ||||||
Net increase in net assets available for benefits | 40,526 | 257,970 | ||||||
Net assets available for benefits at beginning of year | 1,553,956 | 1,295,986 | ||||||
Net assets available for benefits at end of year | $ | 1,594,482 | $ | 1,553,956 | ||||
See accompanying notes to financial statements
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TANDY BRANDS ACCESSORIES, INC. STOCK PURCHASE PROGRAM
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2004 and 2003
A. Description of Plan
The following description of the Tandy Brands Accessories, Inc. Stock Purchase Program (the “Plan”) sponsored by Tandy Brands Accessories, Inc. (the “Company”) provides only general information. Participants should refer to the Plan document for a more complete description of the Plan’s provisions.
General
The purpose of the Plan is to assist the employees of the Company in building personal net worth and to encourage ownership in the Company by providing a Plan for regular investment in the Company’s common stock.
Employees who are of legal age, continuously employed for six months or more, and work a minimum of twenty hours per week are eligible to participate in the Plan. Once an eligible employee reaches two years of continuous service, participation in the Tandy Brands Accessories, Inc. Employees Investment Plan is required to continue participation in the Plan.
Contributions
A participant may contribute to the Plan through authorized payroll deduction of 5% or 10% of their qualifying compensation.
The Company matches 25% of the participant contributions for eligible employees with less than two years of continuous employment with the Company. Eligible employees with two years of continuous employment that participate in the Tandy Brands Accessories, Inc. Employees Investment Plan receive a 50% matching contribution from the Company.
The employee payroll deduction is accumulated and the Company contribution is determined and accrued monthly. The total contributions for each month are credited to the participants’ accounts as stock on the basis of a price equal to the average of the closing market price of the stock for the month.
Participant Accounts
Each participant’s account is credited with the participant’s contribution and the Company’s contribution for each month. Participant accounts are valued on a monthly basis in accordance with the Plan’s provisions.
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TANDY BRANDS ACCESSORIES, INC. STOCK PURCHASE PROGRAM
NOTES TO FINANCIAL STATEMENTS (continued)
A. Description of Plan — continued
Vesting
Participants are immediately vested in all contributions plus actual earnings thereon.
Payment of Benefits
Each participant’s account is distributed by approximately February 15 following the end of each calendar year. Fractional shares are retained, however; fractional shares pertaining to former employees may be paid in cash in accordance with the Plan’s provisions.
B. Summary of Significant Accounting Policies
Basis of Accounting
The financial statements of the Plan are presented on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America.
Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires the Plan Administrator to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results may differ from these estimates.
Contributions
Contributions from the participants and the employer are accrued in the period in which they are deducted in accordance with salary deferral agreements and as they become obligations of the Company as determined by the Plan’s administrator.
Receivables
As of December 31, 2004 and 2003, 100% of the Plan’s assets are receivables from the Company related to employer and employee contributions. Such contributions in a given year are settled in the following year via distributions of Company stock, which is valued at its quoted market price and is subject to market risk customarily associated with equity investments.
Payment of Benefits
Benefits are recorded when paid. Benefits payable at December 31, 2004 and 2003, were $1,594,000 and $1,554,000, respectively.
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TANDY BRANDS ACCESSORIES, INC. STOCK PURCHASE PROGRAM
NOTES TO FINANCIAL STATEMENTS (continued)
C. Administration of Plan Assets
The Company holds and manages the Plan’s assets, which are principally receivables.
Officers and employees of the Company perform certain administrative functions for the Plan with no compensation from the Plan. Administrative expenses related to the Plan are paid directly by the Company.
D. Average Share Price
The average closing share prices by month for the Company’s common stock for the years ended December 31, were as follows:
Average Share Price | ||||||||
Month | 2004 | 2003 | ||||||
January | $ | 14.6440 | $ | 9.7042 | ||||
February | 13.2779 | 10.0831 | ||||||
March | 13.2330 | 10.0560 | ||||||
April | 13.2342 | 10.1591 | ||||||
May | 13.2380 | 10.6012 | ||||||
June | 13.4680 | 11.7321 | ||||||
July | 13.5682 | 12.4925 | ||||||
August | 13.7245 | 13.8006 | ||||||
September | 13.7896 | 14.7228 | ||||||
October | 14.3942 | 15.1657 | ||||||
November | 14.1386 | 15.0537 | ||||||
December | 14.2623 | 15.4577 |
E. Tax Status
The Plan is not a qualified plan as determined by the Internal Revenue Code.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Administrative Committee has duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized.
TANDY BRANDS ACCESSORIES, INC. STOCK PURCHASE PROGRAM | ||
/s/ J.S.B. Jenkins | ||
J.S.B. Jenkins | ||
Administrative Committee Member |
Date: May 19, 2005
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Index to Exhibits
Exhibit | ||
No. | Description | |
23 | Consent of Independent Registered Public Accounting Firm |
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