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
FOURTH QUARTER 2005 RESULTS
-Announces Ninth Consecutive Quarterly Dividend-
ARLINGTON, TX, August 22, 2005 – Tandy Brands Accessories, Inc. (Nasdaq NM:TBAC)today announced financial results for the fourth quarter ended June 30, 2005.
For the fourth quarter of fiscal 2005, net sales decreased 3.6% to $42.9 million compared to $44.5 million for the same period last year. The company reported a net loss for the fourth quarter of $2.1 million, or ($0.33) per diluted share compared to net income of $129,000 or $0.02 per share in the prior year’s fourth quarter. These results are in-line with the financial results previously announced on August 12th. The fourth quarter net loss includes a non-cash charge net of tax of $0.08 per diluted share related to goodwill impairment associated with the women’s department store business.
For the fiscal year ended June 30, 2005, net sales were $221.2 million compared to $215.4 million for the same period in the prior year. Net income for the twelve-month period totaled $4.0 million, or $0.61 per diluted share, compared to net income of $7.0 million, or $1.09 per diluted share, for the same period last year.
J. S. B. Jenkins, President and Chief Executive Officer, commented, “As we previously announced on August 12th, we did not meet our plan for the fiscal 2005 fourth quarter. Our sales decrease and net loss were the result of a delayed shipment of women’s mass merchant accessories to a large customer from the fourth quarter 2005 to the first quarter 2006 and ongoing restructuring activities related to the consolidation of our women’s mass merchant and department store business units. We are taking the right steps to improve the management, distribution, and infrastructure in our women’s business and believe our initiatives will better position the business for growth ahead.”
Mr. Jenkins continued, “Our balance sheet showed improvement in the fourth quarter. The Company’s cash flows were solid and we were able to reduce our debt position during the fourth quarter by $4.5 million. Going forward, we plan to continue to reduce our debt position which will allow us greater operating flexibility.”
As a result of the Company’s annual audit, an adjustment related to a deferred tax asset associated with our Canadian operations was identified that will require restatement of the fiscal 2004 and prior financial statements. This restatement will reduce 2004 reported earnings per diluted share by $0.01. Additionally, beginning stockholders’ equity for fiscal 2004 will be reduced by approximately $866,000. This deferred tax adjustment had no impact on the Company’s fiscal 2005 financial results.
For the 2006 fiscal year, the company anticipates net sales to be in the range of $226 to $230 million and earnings to be within a range of $1.05 to $1.11 per diluted share. In the first fiscal quarter, the Company anticipates net sales to be in the range of $60 to $63 million and earnings to be in the range of $0.37 to $0.41 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 October 20, 2005, to shareholders of record at the close of business on September 30, 2005.
Mr. Jenkins concluded, “As we enter the 2006 fiscal year, we are confident in our ability to grow the key components to both business segments. On the men’s side, opening new doors and increasing our product penetration in existing doors is our top priority. The first quarter is trending well for our core small leather goods and belt businesses, as well as from our newer gift accessories and neckwear businesses. We expect the performance in our women’s business to improve as we continue to achieve cost savings, and identify synergies that will enhance our margins and sales performance in the fiscal year ahead.”
Conference Call Information
Investors and interested parties will have the opportunity to listen to management’s discussion of Tandy Brands’ fourth quarter results in a conference call to be held today, Monday, August 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 Monday, August 29, 2005, and can be accessed by dialing (719) 457-0820, passcode #7920794. 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 Operations
(In thousands, except per share amounts)
(Unaudited)
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended | Year Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2005 | 2004 | 2005 | 2004 | |||||||||||||
(As Restated) | (As Restated) | |||||||||||||||
Net sales | $ | 42,864 | $ | 44,469 | $ | 221,232 | $ | 215,420 | ||||||||
Cost of goods sold | 27,788 | 28,278 | 139,999 | 140,135 | ||||||||||||
Gross margin | 15,076 | 16,191 | 81,233 | 75,285 | ||||||||||||
Selling, general and administrative expenses | 16,143 | 14,660 | 67,975 | 57,519 | ||||||||||||
Goodwill impairment | 847 | — | 847 | — | ||||||||||||
Depreciation and amortization | 1,312 | 1,005 | 5,025 | 4,055 | ||||||||||||
Total operating expenses | 18,302 | 15,665 | 73,847 | 61,574 | ||||||||||||
Operating income (loss) | (3,226 | ) | 526 | 7,386 | 13,711 | |||||||||||
Interest expense | (251 | ) | (391 | ) | (1,222 | ) | (2,357 | ) | ||||||||
Royalty and other income | 38 | 73 | 246 | 128 | ||||||||||||
Income (loss) before provision for income taxes | (3,439 | ) | 208 | 6,410 | 11,482 | |||||||||||
Provision (benefit) for income taxes | (1,318 | ) | 79 | 2,423 | 4,530 | |||||||||||
Net income (loss) | $ | (2,121 | ) | $ | 129 | $ | 3,987 | $ | 6,952 | |||||||
Earnings (loss) per common share: | $ | (0.33 | ) | $ | 0.02 | $ | 0.63 | $ | 1.12 | |||||||
Earnings (loss) per common share-assuming dilution: | $ | (0.33 | ) | $ | 0.02 | $ | 0.61 | $ | 1.09 | |||||||
Dividends declared per share | $ | 0.0275 | $ | 0.025 | $ | 0.11 | $ | 0.10 | ||||||||
Common shares outstanding | 6,444 | 6,319 | 6,349 | 6,229 | ||||||||||||
Common shares outstanding shares-assuming dilution | 6,444 | 6,457 | 6,588 | 6,389 | ||||||||||||
TANDY BRANDS ACCESSORIES, INC.
Condensed Consolidated Balance Sheets
(In thousands)
(Unaudited)
(In thousands)
(Unaudited)
June 30, | June 30, | |||||||
2005 | 2004 | |||||||
(As Restated) | ||||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 3,429 | $ | 6,086 | ||||
Accounts receivable, net | 31,437 | 33,427 | ||||||
Inventories | 67,584 | 57,086 | ||||||
Deferred income taxes | 4,229 | 3,058 | ||||||
Other current assets | 2,359 | 1,613 | ||||||
Total current assets | 109,038 | 101,270 | ||||||
Property, plant and equipment, at cost: | ||||||||
Property and equipment, at cost | 37,742 | 34,581 | ||||||
Accumulated depreciation | (23,896 | ) | (20,206 | ) | ||||
Net property, plant and equipment | 13,846 | 14,375 | ||||||
Goodwill, net of accumulated amortization | 17,047 | 11,655 | ||||||
Other intangibles, net of accumulated amortization | 6,403 | 4,534 | ||||||
Supplemental Executive Retirement Plan assets | 2,552 | 1,255 | ||||||
Other noncurrent assets | 1,425 | 1,534 | ||||||
TOTAL ASSETS | $ | 150,311 | $ | 134,623 | ||||
LIABILITIES & STOCKHOLDERS’ EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 15,510 | $ | 14,224 | ||||
Accrued expenses | 6,849 | 6,362 | ||||||
Total current liabilities | 22,359 | 20,586 | ||||||
Notes payable | 16,055 | 10,000 | ||||||
Deferred income taxes | 2,244 | 2,066 | ||||||
Supplemental Executive Retirement Plan liability | 2,926 | 1,721 | ||||||
Other noncurrent liabilities | 1,297 | 1,302 | ||||||
Total liabilities | 44,881 | 35,675 | ||||||
Stockholders’ equity: | ||||||||
Common stock | 6,573 | 6,306 | ||||||
Additional paid-in capital | 29,597 | 26,765 | ||||||
Cumulative other comprehensive income (loss) | 77 | (121 | ) | |||||
Shares held by Benefit Restoration Plan Trust | (981 | ) | (894 | ) | ||||
Retained earnings | 70,164 | 66,892 | ||||||
Total stockholders’ equity | 105,430 | 98,948 | ||||||
TOTAL LIABILITIES & STOCKHOLDERS’ EQUITY | $ | 150,311 | $ | 134,623 | ||||