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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
ANNUAL REPORT PURSUANT TO
SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the Fiscal Year Ended June 30, 2000
Commission File Number 0-18927
TANDY BRANDS ACCESSORIES, INC.
EMPLOYEES INVESTMENT PLAN
(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.)
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CONTENTS
Page
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TABLE OF CONTENTS .............................................................. 1
REPORT OF INDEPENDENT AUDITORS ................................................. 4
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS ................................ 5
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS ..................... 6
NOTES TO FINANCIAL STATEMENTS .................................................. 7-11
SUPPLEMENTAL SCHEDULES ......................................................... 12-14
SIGNATURE PAGE ................................................................. 15
CONSENT OF INDEPENDENT ACCOUNTANTS ............................................. 16
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TANDY BRANDS ACCESSORIES, INC.
EMPLOYEES INVESTMENT PLAN
FINANCIAL STATEMENTS
FOR THE YEARS ENDED JUNE 30, 2000 AND 1999
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TANDY BRANDS ACCESSORIES, INC.
EMPLOYEES INVESTMENT PLAN
FINANCIAL STATEMENTS
FOR THE YEARS ENDED JUNE 30, 2000 AND 1999
TABLE OF CONTENTS
Report of Independent Auditors ................................................................. 4
Financial Statements:
Statements of Net Assets Available for Benefits ........................................... 5
Statements of Changes in Net Assets Available for Benefits ................................ 6
Notes to Financial Statements .................................................................. 7
Supplemental Schedules:
Form 5500, Schedule H, Line 4i - Schedule of Assets Held
for Investment Purposes at End of Year .............................................. 13
Form 5500, Schedule H, Line 4j - Schedule of Reportable Transactions ...................... 14
NOTE: All other schedules required by the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974 have been omitted since they are either not applicable or
the information required therein has not been included in the financial
statements or notes thereto.
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[WHITLEY PENN LETTERHEAD]
REPORT OF INDEPENDENT AUDITORS
To the Administrative Committee and Participants of
Tandy Brands Accessories, Inc. Employees Investment Plan
We have audited the accompanying statements of net assets available for benefits
of Tandy Brands Accessories Inc. Employees Investment Plan (the "Plan") as of
June 30, 2000 and 1999 and the related statement 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 audit.
We conducted our audits in accordance with generally accepted auditing
standards. 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 examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
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, based on our audits, the financial statements referred to above
present fairly, in all material respects, the net assets available for benefits
of the Tandy Brands Accessories, Inc. Employees Investment Plan as of June 30,
2000 and 1999, and the changes in its net assets available for benefits for the
years then ended in conformity with generally accepted accounting principles.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of assets held
for investment purposes and reportable transactions are presented for the
purpose of additional analysis and are not a required part of the basic
financial statements but are supplementary information required by the
Department of Labor's Rules and Regulations for Reporting and Disclosure under
the Employee Retirement Security Act of 1974. The supplemental schedules have
been subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, are fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
/s/ WHITLEY PENN
Fort Worth, Texas
March 1, 2001
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TANDY BRANDS ACCESSORIES, INC.
EMPLOYEE INVESTMENT PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
JUNE 30,
2000 1999
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ASSETS
Investments, at fair value:
Tandy Brands Accessories, Inc. common stock $ 7,345,753 $ 16,396,468
The Bombay Company, Inc. common stock -- 592
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7,345,753 16,397,060
Receivables:
Employee contributions 39,186 31,903
Employer contributions 201,918 154,413
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241,104 186,316
Cash and cash equivalents 172 724
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Total assets 7,587,029 16,584,100
LIABILITIES
Accounts payable - Merrill Lynch Trust Company 26,615 --
Excess contributions payable 296,936 205,894
Line of credit -- 1,367,898
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323,551 1,573,792
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Net assets available for benefits $ 7,263,478 $ 15,010,308
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See accompanying notes.
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TANDY BRANDS ACCESSORIES, INC.
EMPLOYEE INVESTMENT PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
YEAR ENDED JUNE 30,
2000 1999
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ADDITIONS TO NET ASSETS:
Investment income:
Net realized and unrealized losses on investments $ (8,744,667) $ (1,552,936)
Interest and dividends 2,493 6,433
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(8,742,174) (1,546,503)
Contributions:
Employee contributions 565,764 482,529
Employer contributions 1,008,494 723,516
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1,574,258 1,206,045
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Total deductions from net assets (7,167,916) (340,458)
DEDUCTIONS FROM NET ASSETS:
Benefit distributions 237,815 1,354,232
Interest expense 44,163 102,398
Administrative expenses -- (1,310)
Contribution refunds 296,936 205,894
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Total deductions to net assets 578,914 1,661,214
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Net decrease (7,746,830) (2,001,672)
Net assets available for benefits, beginning of year 15,010,308 17,011,980
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Net assets available for benefits, end of year $ 7,263,478 $ 15,010,308
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See accompanying notes
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TANDY BRANDS ACCESSORIES, INC. EMPLOYEES INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2000
A. DESCRIPTION OF PLAN
The following description of the Tandy Brands Accessories Inc. Employees
Investment Plan (the "Plan") provides only general information. Participants
should refer to the Plan agreement for a more complete description of the Plan's
provisions.
GENERAL
Tandy Brands Accessories, Inc. (the "Company") established the Plan effective as
of January 1, 1991. The Plan is a defined contribution plan covering employees
of the Company who have completed two years of service, of not less than 1,000
hours per year. The Plan is subject to Titles I and II of the Employees
Retirement Income Security Act of 1974 (ERISA) relating to the protection of
employee benefit rights and amendments to the Internal Revenue Code,
respectively, but is not subject to Title IV, relating to plan termination
insurance coverage, such insurance will not be extended to participants in the
Plan in the future.
CONTRIBUTIONS
A participant contributes to the Plan 5% of their qualifying compensation and,
for participants who are employed on the last day of the calendar quarter, such
contribution is matched by a quarterly Company contribution equal to 7 1/2% of
the participants' qualifying compensation for the applicable quarter.
A participant is not subject to federal income tax on Company contributions to
the Plan, or other accumulations, until he makes a withdrawal from the Plan.
PARTICIPANT ACCOUNTS
Effective April 1, 1999, the Plan converted from unit accounting to share
accounting for the participant's accounts, further discussed in Note J. Each
participant's account is credited with the participant's contribution monthly
and the Company's contribution for each calendar quarter. The valuation date for
participant contributions is the day the contribution is received or the
following day. For each calendar quarter the Company's contribution will be
allocated as of the last day of the quarter.
VESTING
Participants are immediately vested (at all times) in all contributions plus
actual earnings thereon.
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TANDY BRANDS ACCESSORIES, INC. EMPLOYEES INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
A. DESCRIPTION OF PLAN - CONTINUED
PAYMENT OF BENEFITS
On termination of service due to death or retirement, or in instances of
disability, financial hardship or attainment of age 59 1/2, a participant may
elect to receive (a) lump-sum payment in cash, (b) monthly installments over any
designated period of years, not to exceed ten years, or (c) a combination of
lump-sum payment in cash and Company stock.
B. SUMMARY OF SIGNIFICANT ACCOUNT POLICIES
BASIS OF ACCOUNTING
The financial statements of the Plan are prepared using the accrual method of
accounting.
ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires the plan administrator to make estimates and
assumptions that affect certain reported amounts and disclosures. Accordingly,
actual results may differ from those estimates.
INVESTMENT VALUATION AND INCOME RECOGNITION
The Plan's investments, primarily stock of the Company, are stated at fair
value. The Company stock is valued at its quoted market price. This investment
is subject to market or credit risks customarily associated with equity
investments.
Purchases and sales of securities are recorded on a trade-date basis. Interest
income is recorded on the accrual basis.
PAYMENT OF BENEFITS
Benefits are recorded when paid.
C. TAX STATUS
The Internal Revenue Service has determined and informed the Company by a letter
dated November 28, 1994, that the Plan and related trust are designed in
accordance with applicable sections of the Internal Revenue Code ("IRC"). The
Plan has been amended since receiving the determination letter. However, the
Plan administrator believes that the Plan is currently designed and being
operated in compliance with the applicable requirements of the IRC. Therefore,
they believe that the Plan was qualified and the related trust was tax-exempt as
of the financial statement date.
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TANDY BRANDS ACCESSORIES, INC. EMPLOYEES INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
D. PLAN TERMINATION
Although it has not expressed any intent to do so, the Company has the right
under the Plan to discontinue its contributions at any time and to terminate the
Plan subject to the provisions of ERISA.
E. ADMINISTRATION OF PLAN ASSETS
The Plan's assets consist principally of Tandy Brands Accessories, Inc. common
shares held by the trustee of the Plan.
Contributions are held and managed by the trustee, which invests cash received,
interest income and makes distributions to participants.
Certain administrative functions are performed by officers and employees of the
Company with no compensation from the Plan. Administrative expenses related to
the Plan are paid directly by the Company and are not reflected in the
accompanying financial statements.
F. INVESTMENTS
The Plan's investments are held by a brokerage-administered trust. During the
years ended June 30, 2000 and 1999, the Plan's investments (including
investments bought, sold, as well as held during the year) had realized and
unrealized gains and (losses) of $(8,744,667) and $(l,552,936) respectively, as
follows:
NET REALIZED AND
UNREALIZED GAINS
AND (LOSSES) FAIR VALUE AT
DURING YEAR END OF YEAR
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Year Ended June 30, 2000:
Fair value as determined by quoted
market price:
Common stock:
Tandy Brands Accessories, Inc. $ (8,744,536) $ 7,345,753
The Bombay Company, Inc. (131) --
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$ (8,744,667) $ 7,345,753
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Year Ended June 30, 1999:
Fair value as determined by quoted
market price:
Common stock:
Tandy Brands Accessories, Inc. $ (1,553,153) $ 16,396,468
The Bombay Company, Inc. 217 592
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$ (1,552,936) $ 16,397,060
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TANDY BRANDS ACCESSORIES, INC. EMPLOYEES INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
F. INVESTMENTS - CONTINUED
The fair value of individual investments that represent 5% or more of the Plan's
net assets are as follows:
2000 1999
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Tandy Brands Accessories, Inc. Common Stock
(932,794 and 957,458 shares, respectively) $ 7,345,753 $ 16,396,468
G. BENEFITS PAYABLE
No amount was included in net assets available for benefits at June 30, 2000 for
participants who had elected to withdraw from the Plan but had not been paid. As
of June 30, 1999, $326,705 was included in net assets available for benefits for
participants who have elected to withdraw from the Plan but had not been paid.
H. LINE OF CREDIT
On February 13, 1998, the Plan entered into a revolving line of credit agreement
with NationsBank of Texas, N.A. (the "Bank") in the amount of $1,500,000, or
such lesser aggregate amount of advances. The line of credit bears interest at
the lesser of (a) the sum of the eurodollar rate for the applicable interest
period, plus three quarter percent (.75%) or (b) the highest nonusurious rate of
interest permitted by applicable law on such day. Interest payments are due
monthly. On August 13, 1998, the Plan amended their revolving line of credit to
increase the available amount to $2,500,000. The unpaid principal amount and all
accrued-but-unpaid interest thereon, was due and payable on February 12, 2000.
As security for the payment and performance of the line of credit, the Plan has
pledged and granted a security interest in and to three hundred fifty-seven
thousand one hundred forty-three (357,143) shares of common stock of Tandy
Brands Accessories, Inc. When the line of credit has been paid and performed in
full and all commitments to lend under the agreement have terminated, the pledge
agreement shall terminate and be of no further force or effect.
On September 10, 1999, the Plan reduced their revolving line of credit from
$2,500,000 to $1,500,000. The Plan paid off the revolving line of credit on June
16, 2000, which in turn released all the shares of common stock of Tandy Brands
Accessories, Inc. which had previously been pledged.
I. CONTRIBUTION REFUNDS
For the years ended June 30, 2000 and 1999, the excess contribution refunds were
$296,936 and $205,894, respectively. The plan's sponsor paid all taxes related
to these refunds.
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TANDY BRANDS ACCESSORIES, INC. EMPLOYEES INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
J. Plan Amendments
2000:
On February 3, 2000, the Plan's sponsor approved amendments to the Plan
effective July 1, 2000. Morgan Stanley Dean Witter will replace Merrill Lynch as
trustee and the 401(k) feature will be activated with increased investment
options available to the participants.
1999:
On February 4, 1999, the Plan's sponsor approved several Plan amendments
effective April 1, 1999. The more significant provisions approved include the
adoption of a 401(k) feature to allow participant salary deferrals with multiple
investment options; removal of Frost National Bank as trustee and appointment of
Merrill Lynch as successor trustee; and the removal of Deloitte & Touche as the
Plan's recordkeeper and the appointment of Benefit Management Pro Systems, Inc.
as the Plan's successor recordkeeper.
As a part of the amendment, the valuation of accounts will no longer be
expressed in units, but will be converted into shares of Tandy Brands
Accessories, Inc. common stock. As of June 30, 1999, participant accounts will
be expressed in actual number of shares of Tandy Brands stock plus the value of
any cash or other investments. This will enable the accounts to be valued on a
daily basis instead of quarterly, as it has been done in the past. This new
feature also allows terminating participants the freedom to request withdrawals
from the plan on a daily basis instead of waiting to the end of the calendar
quarter to withdraw account balances.
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SUPPLEMENTAL
SCHEDULES
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TANDY BRANDS ACCESSORIES, INC. EMPLOYEE INVESTMENT PLAN
FORM 5500, SCHEDULE H, LINE 4i-SCHEDULE OF ASSETS HELD FOR INVESTMENT
PURPOSES AT END OF YEAR
AS OF JUNE 30, 2000
EIN: 75-2349915
PLAN: 001
DESCRIPTION NUMBER CURRENT
IDENTITY OF ISSUE OF INVESTMENTS OF SHARES (d) COST VALUE
- ----------------- -------------------------------- --------- ----------- -----------
Tandy Brands Tandy Brands Accessories, Inc.
Accessories, Inc.* Common Stock Non-Participant
Directed 932,794 $ 7,324,387 $ 7,345,753
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$ 7,345,753
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* Indicates a party-in-interest to the Plan.
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TANDY BRANDS ACCESSORIES, INC. EMPLOYEE INVESTMENT PLAN
FORM 5500, SCHEDULE H, LINE 4j - SCHEDULE OF REPORTABLE TRANSACTIONS
YEAR ENDED JUNE 30, 2000
EIN: 75-2349915
PLAN: 001
(h) CURRENT
VALUE OF
ASSET ON (i) NET
(a) IDENTITY OF (c) PURCHASE (g) COST OF TRANSACTION GAIN OR
PARTY INVOLVED (b) DESCRIPTION OF ASSET PRICE (d) SELLING PRICE ASSET DATE (LOSS)
- --------------- ------------------------ ------------ ----------------- ----------- ----------- -------
Category (iii) - Series of securities transactions in excess of 5% of Plan assets
*MLTC CMA Money Fund $ 1,520,986 $ 1,521,032 $ -- $ -- $ --
There was no category (i), (ii) or (iv) reportable transactions during the year
ended June 30, 2000.
*Indicates a party-in-interest to the Plan
Columns (e) and (f) are not applicable.
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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 PLAN
/s/ J.S.B. JENKINS
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J.S.B. Jenkins
Administrative Committee Member
Date: March 31, 2001
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