EXHIBIT 99
[TANDY BRANDS ACCESSORIES, INC. LOGO]
TANDY BRANDS ACCESSORIES, INC. LIPPERT/HEILSHORN & ASSOC., INC.
J.S.B. Jenkins Harriet C. Fried
President/Chief Executive Officer Assistant Vice President
(817) 548-0090 (212) 838-3777
britt_jenkins@tandybrands.com hfried@lhai.com or www.lhai.com
TANDY BRANDS ACCESSORIES' FIRST QUARTER 2003 SALES
SURPASS LAST YEAR'S SALES AND CURRENT MARKET GUIDANCE
ARLINGTON, TX, OCTOBER 17, 2002 - TANDY BRANDS ACCESSORIES, INC. (NASDAQ NM:
TBAC) today announced financial results for the first quarter ended September
30, 2002. For the first quarter of fiscal 2003, net sales totaled $60.0 million
compared to $54.1 million for the same period in fiscal 2002. Net income for the
first quarter of fiscal 2003, before the accounting change for SFAS No. 142,
totaled $2.4 million, or $0.40 per diluted share, compared to net income of $2.2
million, or $0.38 per diluted share, for the same period last year.
Consistent with previous company estimates and disclosure in the company's 2002
annual report, the net income results for the first quarter of fiscal 2003
include a non-cash charge, net of income taxes, related to the cumulative effect
of the accounting change for the adoption of Statement of Financial Accounting
Standards No. 142 ("SFAS No. 142"), totaling $(581,000), or $(0.10) loss per
diluted share. Net income after the cumulative effect of adoption of SFAS No.
142 for the first quarter ended September 30, 2002 totaled $1.8 million, or
$0.30 per diluted share.
The required adoption of SFAS No. 142 is considered a change in accounting
principle and the cumulative effect of adopting this standard resulted in a
non-cash after-tax charge in the first quarter of fiscal 2003. No further
quarterly adjustments are required for the initial adoption of this accounting
pronouncement. This amount does not affect the company's on-going operations.
The adoption of the new accounting standard will result in a reduction in annual
amortization expense of approximately $1 million.
J.S.B. Jenkins, president and chief executive officer, commented, "Tandy Brands
got off to an excellent start in the first quarter of 2003 despite the difficult
economic environment that continued to impact the retail industry. We are
especially pleased by the strong performance of our women's department store
product line, whose sales were substantially above internal expectations. Our
DOCKERS(R) branded women accessories continue to be well received, and the
launch of our LEVI'S(R) branded women's belts and small leather goods this fall
also performed above our initial estimates. Although we anticipate higher
freight costs due to issues associated with the West Coast dock labor situation
and continued pressure for customer allowances due to the retail economy, we
have implemented actions that we believe will enable us to maintain our earnings
estimates for the year. We continue to expect 2003 to be a very successful year
for Tandy Brands Accessories."
Separately, the company announced that Stanley T. Ninemire, who previously
served as Tandy Brands' chief financial officer, has been appointed executive
vice president of operations, and Mark J. Flaherty, who previously served as
corporate controller, has been appointed chief financial officer.
Investors and interested parties will have the opportunity to listen to
management's discussion of Tandy Brands' first quarter results in a conference
call to be held today, Thursday, October 17, at 10:00 a.m. ET. The dial-in
number for the call is (800) 305-1078. For those who are unable to listen to the
live broadcast, an audio replay of the call will be available through Thursday,
October 24, and can be accessed by dialing (703) 925-2533 or (888) 266-2081,
passcode #6246258. A live webcast of the conference call will also be broadcast
on www.vcall.com.
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, 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.
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)
<Table>
<Caption>
Three Months Ended
September 30,
------------------------------
2002 2001
------------- -------------
Net sales $ 60,028 $ 54,106
Cost of goods sold 39,243 35,073
------------- -------------
Gross margin 20,785 19,033
------------- -------------
Selling, general and administrative expenses 15,126 13,310
Depreciation and amortization 1,080 1,387
------------- -------------
Total operating expenses 16,206 14,697
------------- -------------
Operating income 4,579 4,336
Interest expense (658) (778)
Royalty, interest and other income 1 9
------------- -------------
Income before provision for income taxes and
cumulative effect of accounting change 3,922 3,567
Provision for income taxes 1,527 1,385
------------- -------------
Net income before cumulative effect of accounting
change 2,395 2,182
Cumulative effect of accounting change for
SFAS No. 142, net of income taxes (581) --
------------- -------------
Net income $ 1,814 $ 2,182
============= =============
Earnings per common share:
Before accounting change $ 0.41 $ 0.38
Cumulative effect of accounting change (0.10) 0.00
------------- -------------
$ 0.31 $ 0.38
============= =============
Earnings per common share-assuming dilution:
Before accounting change $ 0.40 $ 0.38
Cumulative effect of accounting change (0.10) 0.00
------------- -------------
$ 0.30 $ 0.38
============= =============
Common shares outstanding 5,888 5,718
============= =============
Common shares outstanding shares-assuming dilution 5,984 5,725
============= =============
</Table>
TANDY BRANDS ACCESSORIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
<Table>
<Caption>
September 30, June 30,
2002 2002
------------- -------------
ASSETS (Unaudited)
Current assets:
Cash and cash equivalents $ 1,440 $ 6,506
Accounts receivable, net 45,437 33,699
Inventories 53,452 52,818
Other current assets 4,830 4,806
------------- -------------
Total current assets 105,159 97,829
------------- -------------
Property, plant and equipment, at cost:
Property and equipment, at cost 30,132 29,441
Accumulated depreciation (15,146) (14,373)
------------- -------------
Net property, plant and equipment 14,986 15,068
------------- -------------
Goodwill, net of accumulated amortization 11,471 12,467
Other noncurrent assets 7,879 8,073
------------- -------------
TOTAL ASSETS $ 139,495 $ 133,437
============= =============
LIABILITIES & STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 7,174 $ 12,755
Accrued expenses 7,814 6,857
------------- -------------
Total current liabilities 14,988 19,612
------------- -------------
Notes payable 38,352 30,000
Other noncurrent liabilities 3,650 3,161
------------- -------------
Total liabilities 56,990 52,773
------------- -------------
Stockholders' equity:
Common stock 5,911 5,899
Additional paid-in capital 22,866 22,690
Cumulative other comprehensive income (2,272) (1,706)
Retained earnings 56,107 54,293
Treasury stock, at cost (107) (512)
------------- -------------
Total stockholders' equity 82,505 80,664
------------- -------------
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $ 139,495 $ 133,437
============= =============
</Table>