-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, HIeJ7Zu9jaJyYPBTN/prPPOCAmLsJADX19BGcH/XypRafsRoFd6h+zgRmQS+06JX XLDePU4WjCOl9rrgcRPwmw== 0000869487-96-000012.txt : 19961118 0000869487-96-000012.hdr.sgml : 19961118 ACCESSION NUMBER: 0000869487-96-000012 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960930 FILED AS OF DATE: 19961114 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: TANDY BRANDS ACCESSORIES INC CENTRAL INDEX KEY: 0000869487 STANDARD INDUSTRIAL CLASSIFICATION: APPAREL & OTHER FINISHED PRODS OF FABRICS & SIMILAR MATERIAL [2300] IRS NUMBER: 752349915 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-18927 FILM NUMBER: 96666363 BUSINESS ADDRESS: STREET 1: 690 E LAMAR BLVD STE 200 CITY: ARLINGTON STATE: TX ZIP: 76011 BUSINESS PHONE: 8175480090 MAIL ADDRESS: STREET 1: 690 E LAMAR BLVD CITY: ARLINGTON STATE: TX ZIP: 76011 10-Q 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ______________________ FORM 10-Q Quarterly Report Pursuant To Section 13 or 15 (d) of the Securities Exchange Act of 1934 _________________________ For the Period Ended September 30, 1996 Commission File Number 0-18927 TANDY BRANDS ACCESSORIES, INC. - ------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Delaware 75-2349915 (State or other jurisdiction of (I.R.S. Employer incorporation or organization Identification No.) 690 East Lamar Boulevard, Suite 200, Arlington, TX 76011 - ------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (817) 548-0090 _______________________________________________________________________________ Former name, former address and former fiscal year, if changed since last report Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No ----- ----- Indicate the number of shares outstanding of each of the issuer's classes of common stock as of the latest practicable date. Class Number of shares outstanding at September 30, 1996 - -------------------------- ---------------------------------------------- Common stock, $1 par value 5,417,198 TANDY BRANDS ACCESSORIES, INC. Form 10-Q Quarter Ended September 30, 1996 TABLE OF CONTENTS PART I -- FINANCIAL INFORMATION Item Page No. 1. Financial Statements 3 - 6 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 7 PART II -- OTHER INFORMATION Item 4. Submission of Matters to a Vote of Security Holders 8 6. Exhibits and Reports on Form 8-K 8 SIGNATURES 9 INDEX TO EXHIBITS AND EXHIBITS 10 - 13 2 Tandy Brands Accessories, Inc. and Subsidiaries File Number 0-18927 Form 10-Q Condensed Consolidated Statements of Income (In thousands, except per share amounts) (Unaudited) Three Months Ended September 30, 1996 ------------------ 1996 1995 ------- ------- Gross sales, less discounts, returns and allowances $23,661 $22,703 Royalty, interest and other income 2 65 ------ ------ Total revenues 23,663 22,768 ------ ------ Costs and expenses: Cost of goods sold 14,728 14,101 Selling, general and administrative 6,522 6,515 Depreciation and amortization 446 517 Interest 286 323 ------ ------ Total costs and expenses 21,982 21,456 ------ ------ Income before income taxes 1,681 1,312 Provision for income taxes (618) (466) ------ ------ Net Income $1,063 $846 ====== ====== Average common shares and common share equivalents 5,436 5,322 ===== ===== Earnings per average common share and common share equivalent $0.20 $0.16 ===== ===== Cash dividends per common share None None The accompanying notes are an integral part of these condensed financial statements. 3 Tandy Brands Accessories, Inc. and Subsidiaries File Number 0-18927 Form 10-Q Condensed Consolidated Balance Sheets (Dollars in thousands) September 30, June 30, 1996 1996 --------------- ---------- (Unaudited) ASSETS Current assets: Cash and cash equivalents $ 361 $ 88 Accounts receivable, net 16,951 13,746 Inventories: Raw materials and work in process 6,714 6,046 Finished goods 25,559 20,564 Other current assets 1,797 2,505 ------ ------ Total current assets 51,382 42,949 ------ ------ Property and equipment, at cost 9,461 9,326 Accumulated depreciation (4,517) (4,246) ------ ------ Net property and equipment 4,944 5,080 ------ ------ Other assets: Goodwill, less amortization 8,384 8,526 Other assets, less amortization 1,783 1,856 ------ ------ Total other assets 10,167 10,382 ------ ------ TOTAL ASSETS $ 66,493 $ 58,411 ====== ====== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Notes payable $ 6,250 $ 2,200 Accounts payable 2,427 4,624 Accrued expenses 2,545 2,043 ------ ------ Total current liabilities 11,222 8,867 ------ ------ Other liabilities: Notes payable 16,800 12,400 Other noncurrent liabilities 316 297 ------ ------ Total other liabilities 17,116 12,697 ------ ------ Stockholders' equity: Preferred stock, $1 par value, 1,000,000 shares authorized, non-issued Common stock, $1 par value, 10,000,000 shares authorized, 5,417,198 shares and 5,382,267 shares issued and outstanding as of September 30, 1996, and June 30, 1996, respectively 5,417 5,382 Additional paid-in capital 18,244 18,038 Retained Earnings 14,494 13,427 ------ ------ Total stockholders' equity 38,155 36,847 ------ ------ TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 66,493 $ 58,411 ====== ====== The accompanying notes are an integral part of these condensed financial statements. 4 Tandy Brands Accessories, Inc. and Subsidiaries File Number 0-18927 Form 10-Q Condensed Consolidated Statement of Cash Flows (Dollars in thousands) (Unaudited) Three Months Ended September 30, -------------------------- 1996 1995 ---------- ---------- Cash Flows from operating activities: Net income $ 1,063 $ 846 Adjustments to reconcile net income to net cash provided by (used for) continuing activities: Depreciation 231 260 Amortization 195 299 Other 40 193 Change in assets and liabilities, net of effects from acquisitions: Accounts Receivable (3,205) (3,816) Inventories (5,663) 1,462 Other assets 770 (267) Accounts payable (2,197) (2,097) Accrued expenses 502 300 ------- ------- Net cash used for operating activities (8,264) (2,820) ------- ------- Cash flows from investing activities: Purchases of property and equipment (154) (151) ------- ------- Net cash used for investing activities (154) (151) ------- ------- Cash flows from financing activities: Exercise of employee stock options, net of purchase of treasury stock -- 15 Sale of stock to stock purchase program 241 300 Proceeds from borrowings 14,300 9,670 Payments under borrowings (5,850) (8,450) ------- ------- Net cash provided by financing activities 8,691 1,535 ------- ------- Net increase (decrease) in cash and cash equivalents 273 (1,436) Cash and cash equivalents at beginning of period 88 1,488 ------- ------- Cash and cash equivalents at end of period $ 361 $ 52 ======= ======= Supplemental disclosures of cash flow information: Cash paid during the period for: Interest $ 280 $ 367 Income Taxes 32 10 Noncash activities: None. The accompanying notes are an integral part of these condensed financial statements. 5 Tandy Brands Accessories, Inc. and Subsidiaries Notes to Condensed Financial Statements (Unaudited) Note 1 - Accounting Principles. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three month period ended September 30, 1996, are not necessarily indicative of the results that may be expected for the year ended June 30, 1997. For further information, refer to the consolidated financial statements and footnotes thereto included in the Tandy Brands Accessories, Inc. and Subsidiaries Annual Report on Form 10-K for the year ended June 30, 1996. 6 MANAGEMENT'S DISCUSSION AND ANALYSIS OF CONSOLIDATED FINANCIAL CONDITION AND RESULTS OF OPERATIONS TANDY BRANDS ACCESSORIES, INC. AND SUBSIDIARIES GENERAL Tandy Brands Accessories, Inc. (the "Company") manufactures and markets men's, women's and children's accessories. The Company's business is conducted primarily in the United States. Historically, the Company's sales and operating results are generally consistent throughout the fiscal year, but there is normally a seasonal increase during the second quarter. Although the Company's operations are affected by general economic trends, the Company does not believe that inflation has had a material effect on the results of operations. RESULTS OF OPERATIONS Three Months Ended September 30, 1996, Compared to the Three Months Ended September 30, 1995. First quarter results for Tandy Brands Accessories, Inc. reflected growing sales and profitability. Net sales for the three month period ended September 30, 1996, were $23,661,000. This represents a 4.2% increase when compared to last year's first quarter sales of $22,703,000. More importantly, while net sales were up only 4.2%, net income for the quarter ended September 30, 1996, was $1,063,000, or $0.20 a share, up 25% when compared to net income of $846,000, or $0.16 a share, for the same period last year. The increase in net income and earnings per share reflects the effect of strategic initiatives executed by Tandy Brands over the last 18 months. One of those initiatives included a detailed review and subsequent curtailment of many variable selling, general and administrative expenses. LIQUIDITY AND CAPITAL RESOURCES The Company's primary sources of liquidity are cash flows from operations and the Company's lines of credit. The Company has three unsecured bank credit lines aggregating $45,000,000 which can be used for seasonal borrowings and letters of credit. The Company also has an unsecured line of credit of $750,000 with a Canadian bank for seasonal borrowings, letters of credit and foreign exchange forward contract requirements of H.A. Sheldon. As of September 30, 1996, the Company had borrowings under its lines of credit of $23,050,000. This represents a 6.7% reduction when compared to debt outstanding as of September 30, 1995. For the three months ended September 30, 1996, the Company used cash of $8,264,000 for operating activities compared to $2,820,000 used for operating activities for the same period in the prior year. The use of cash for operating activities is primarily attributable to a seasonal increase in accounts receivable and inventories. Capital expenditures were $154,000 for the three months ended September 30, 1996, compared to $151,000 for the same period of the prior year. These expenditures remain at low levels in response to a static retail market and the fact that there are no significant capital expenditures projects under way. The Company believes that it has adequate financial resources and sufficient credit facilities to satisfy its future working capital needs. 7 TANDY BRANDS ACCESSORIES, INC. PART II - OTHER INFORMATION ITEM 4. Submission of Matters to a Vote of Security Holders. (a) No matters were submitted to the Security Holders for a vote during the quarter ended September 30, 1996. ITEM 6. Exhibits and Reports on Form 8-K. No reports on Form 8-K were filed during the quarter ended September 30, 1996. The exhibits filed as a part of this report are listed below. Exhibit No. Description 11 Statement Regarding Computation of Per Share Earnings 27 Financial Data Schedule 8 TANDY BRANDS ACCESSORIES, INC. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. TANDY BRANDS ACCESSORIES, INC. (Registrant) s/s J.S.B. Jenkins ------------------------------------- J.S.B. Jenkins President and Chief Executive Officer s/s R. Bruce Cole ------------------------------------- R. Bruce Cole Vice President and Treasurer (Principal Financial Officer) Date: November 14, 1996 9 TANDY BRANDS ACCESSORIES, INC. EXHIBIT INDEX Sequen- tially Incorporated by Reference Numbered (If applicable) Exhibit Number and Description Page Form Date File No. Exhibit - ------------------------------ -------- ---- --------- -------- ------- (4) Instruments defining the rights of security holders, including indentures 4.1 Certificate of N/A S-1 11/02/90 33-37588 4.1 Designations, Powers, Preferences and Rights of Series A Junior Participating Cumulative Preferred Stock of Tandy Brands Accessories, Inc. 4.2 Form of Common N/A S-1 11/02/90 33-37588 4.2 Stock Certificate of Tandy Brands Accessories, Inc. 4.3 Form of Preferred N/A S-1 11/02/90 33-37588 4.3 Share Purchase Rights Certificate of Tandy Brands Accessories, Inc. 4.4 Rights agreement N/A S-1 11/02/90 33-37588 10.5 dated November 7, 1990, between Tandy Brands Accessories, Inc. and First National Bank of Boston (11) Statement re: Computation of per share earnings 11.1 Earnings per share 11 N/A N/A N/A N/A statement (27) Financial Statement Schedule 27.1 Financial statement schedule 12 N/A N/A N/A N/A 10 TANDY BRANDS ACCESSORIES, INC. Exhibit 11. Statement Regarding Computation of Per Share Earnings. Earnings per Share - Earnings per share is determined by dividing net income by the average number of common shares outstanding plus common stock equivalents. Common stock equivalents consist of shares issuable under outstanding stock options reduced by shares assumed to be purchased from the proceeds of such options. Earnings per share, as presented, is both primary and fully diluted. Three Months Ended September 30, ----------------------- 1996 1995 ---------- ---------- Weighted average common shares outstanding 5,403,000 5,285,000 Common share equivalents 33,000 37,000 ---------- ---------- Average common shares and common share equivalents 5,436,000 5,322,000 ========== ========== 11 TANDY BRANDS ACCESSORIES, INC. Exhibit 27. Financial Data Schedule EX-27 2
5 1,000 3-MOS JUN-30-1997 SEP-30-1996 361 0 16,951 1,003 26,412 1,797 9,461 4,517 66,493 11,222 0 0 0 5,417 0 66,493 23,661 23,663 14,728 21,982 0 0 286 1,681 681 1,063 0 0 0 1,063 .200 .200
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