8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): November 10, 2010

TANDY BRANDS ACCESSORIES, INC.

(Exact name of registrant as specified in its charter)

Delaware	0-18927	75-2349915
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

3631 West Davis, Suite A Dallas, Texas	75211
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (214) 519-5200

N/A

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02 Results of Operations and Financial Condition

On November 10, 2010, the Company issued a press release announcing its financial results for the first quarter ended September 30, 2010. A copy of the press release is furnished herewith as Exhibit 99.1 and is incorporated herein by reference.

Pursuant to the rules and regulations of the Securities and Exchange Commission, the press release attached hereto as Exhibit 99.1 is deemed to be furnished and shall not be deemed to be “filed” under the Securities Exchange Act of 1934.

Item 9.01(d) Exhibits

Exhibit 99.1      Press Release, dated November 10, 2010.

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 hereunto duly authorized.

	TANDY BRANDS ACCESSORIES, INC.
Date: November 10, 2010	By:	/s/ M.C. Mackey
		M.C. Mackey
		Chief Financial Officer

EX-99.1

Exhibit 99.1

TandyBrands Accessories, Inc.	Halliburton Investor Relations
Rod McGeachy	Hala Elsherbini
President and Chief Executive Officer	Sr. Vice President and COO
214-519-5200	972-458-8000

Tandy Brands Reports Fiscal 2011 First Quarter Earnings Results

Dallas, Texas (November 10, 2010) — Tandy Brands Accessories, Inc. (NASDAQ: TBAC) today reported financial results for its first quarter ended September 30, 2010.

Net sales for the first quarter were $29.2 million, a decrease of $8.0 million, compared to $37.2 million reported in the prior year first quarter. First quarter net sales were impacted by reduced belt assortments and curtailed levels of replenishment orders by a significant customer and the timing of certain shipments to other customers being delayed until later in the current fiscal year. Net sales of $2.9 million for the gifts segment decreased $2.5 million over the prior year first quarter due to retailers delaying in-store dates.

“Although the first quarter presented challenges from a top-line perspective, we remain optimistic about our medium-term prospects. Due to a recent arrangement with a significant customer, we expect to regain lost belt market share on an annualized basis. Additionally, our gifts sales are occurring later this year, but we expect strong second quarter selling and fiscal year 2011 gifts net sales to be consistent with fiscal year 2010,” said Rod McGeachy, President and Chief Executive Officer of Tandy Brands.

Primarily as a result of lower net sales, first quarter 2011 adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) declined $2.9 million to an adjusted EBITDA loss of $1.7 million. First quarter 2010 adjusted EBITDA was $1.2 million and excluded charges for restructuring and certain acquisition-related items, including a one-time, bargain purchase gain of $1.4 million associated with the acquisition of certain assets of the Chambers Belt Company in July 2009. For the fiscal 2011 first quarter, the company reported a net loss of $2.7 million, or ($0.39) per diluted share, compared to net income of $1.1 million, or $0.15 per diluted share, in the first quarter 2010.

First quarter 2011 gross margin percentage was 34.9 percent, compared to 38.3 percent in the 2010 first quarter. The decline was attributable to lower sales of previously written-down inventory, higher freight costs and promotional pressures from our retail partners.

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Total selling, general and administrative (SG&A) expenses for the first quarter of fiscal 2011 were reduced $1.3 million to $11.9 million, as a result of decreases in facilities expenses, compensation costs, bad debt provisions, royalties and professional services expenses.

Financial Position

The company ended the 2011 first quarter with $31.7 million in working capital, including $19.7 million of receivables, $49.0 million of inventories, and borrowings of $21.6 million. At September 30, 2010, $5.6 million of borrowing capacity was available under the U.S. credit facility.

Inventories increased $12.9 million from September 30, 2009 primarily due to the timing of sales between the current year’s first and second quarters. “Fiscal 2011 shipments are occurring later than in fiscal 2010 based on the desired in-store dates from our retail partners. Our customers are building holiday inventory levels later this year than last year,” said McGeachy.

Outlook

“For fiscal year 2011, we expect net sales to decline by mid-single digits, gross margins to decline slightly, and our SG&A expenses to be between $44 and $46 million,” said McGeachy.

During the quarter, the company entered into a new licensing agreement to sell products under the Wolverine label. “Our new license agreement with Wolverine is proving to be an excellent addition to our brand portfolio, and we continue to pursue similar license agreements to further expand our product offerings,” said McGeachy.

“Furthermore, we continue to seek acquisitions of branded companies in order to achieve our long-term growth objectives,” said McGeachy.

Conference Call

Tandy Brands has scheduled a conference call for 11:00 a.m. Eastern Time (10:00 a.m. Central) on November 11, 2010 to discuss the first quarter 2011 results. To participate in the teleconference, investors should dial 877-317-6789 a few minutes before the start time and reference the Tandy Brands conference call. International callers should dial 1-412-317-6789. The conference call can also be accessed by visiting the investor relations section of the company’s Web site, www.tandybrands.com.

A replay of the call will be available through November 18, 2010 and can be accessed by dialing 877-344-7529 and entering confirmation code 445781. International callers may dial 1-412-317-0088.

About Tandy Brands

Tandy Brands is a leading designer and marketer of branded men’s, women’s and children’s accessories, including belts, gifts, small leather goods, eyewear, neckwear, and sporting goods. Merchandise is marketed under various national as well as private brand names through all major retail distribution channels.

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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, 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.

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Tandy Brands Accessories, Inc. And Subsidiaries
Unaudited Consolidated Statements Of Operations
(in thousands except per share amounts)

	Three Months Ended
	September 30
	2010			2009
Net sales	$	29,248		$	37,193
Cost of goods sold		19,037			22,964
Gross margin		10,211			14,229
Selling, general and administrative expenses		11,865			13,194
Depreciation and amortization		645			677
Acquisition related costs		30			289
Total operating expenses		12,540			14,160
Operating income (loss)		(2,329	)		69
Interest expense		(186	)		(268	)
Other income		43			36
Acquisition bargain purchase gain		—			1,379
Income (loss) before income taxes		(2,472	)		1,216
Income taxes		216			113
Net income (loss)	$	(2,688	)	$	1,103
Income (loss) per common share	$	(0.39	)	$	0.16
Income (loss) per common share assuming dilution	$	(0.39	)	$	0.15
Common shares outstanding		6,970			6,930
Common shares outstanding assuming dilution		6,970			7,115

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Tandy Brands Accessories, Inc. And Subsidiaries
Unaudited Consolidated Balance Sheets
(in thousands)

	September 30			June 30
	2010			2010
Assets
Current assets:
Cash and cash equivalents	$	489		$	830
Restricted cash		1,358			1,333
Accounts receivable		19,681			18,630
Inventories		48,997			31,371
Other current assets		6,024			8,114
Total current assets		76,549			60,278
Property and equipment, net		7,057			8,658
Other assets:
Intangibles		5,493			5,717
Other assets		774			879
Total other assets		6,267			6,596
	$	89,873		$	75,532
Liabilities And Stockholders’ Equity
Current liabilities:
Accounts payable	$	19,734		$	13,497
Accrued compensation		1,698			3,202
Accrued expenses		1,797			1,795
Note payable		21,601			9,425
Total current liabilities		44,830			27,919
Other liabilities		3,650			3,793
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $1.00 par value, 1,000 shares authorized, none issued		—			—
Common stock, $1.00 par value, 10,000 shares authorized, 6,972 shares and 6,933 shares issued and outstanding, respectively		6,972			6,933
Additional paid-in capital		34,308			34,172
Retained earnings (deficit)		(1,530	)		1,158
Other comprehensive income		1,643			1,557
Total stockholders’ equity		41,393			43,820
	$	89,873		$	75,532

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Tandy Brands Accessories, Inc. And Subsidiaries
Unaudited Non-GAAP Disclosures
(in thousands except per share amounts)

Our adjusted EBITDA, a non-GAAP measurement, is defined as net income (loss) before interest, taxes, depreciation and amortization, and certain acquisition-related items. Adjusted EBITDA is presented because we believe it provides useful information about our business activities and also is frequently used by securities analysts, investors, and other interested parties in evaluating a company’s performance. Not all companies utilize identical calculations; therefore, our presentation of adjusted EBITDA may not be comparable to other identically titled measures of other companies. EBITDA and adjusted EBITDA have limitations as analytical tools and you should not consider them in isolation, or as substitutes for analysis of our results of operations as reported under U.S. generally accepted accounting principles (“GAAP”). The following table reconciles our GAAP net income (loss) to the adjusted EBITDA disclosures.

	Three Months Ended
	September 30
	2010			2009
Net (loss) income	$	(2,688	)	$	1,103
Income taxes		216			113
Interest expense		186			268
Depreciation and amortization		645			677
Acquisition bargain purchase gain		—			(1,379	)
Acquisition related costs		30			289
Other income		(43	)		(36	)
Restructuring		—			169
Adjusted EBITDA (loss)	$	(1,654	)	$	1,204

We have provided our adjusted net income (loss) disclosure, a non-GAAP measurement, as we believe it is important for our stakeholders to understand the impact of certain items on our statements of operations. The following table reconciles our GAAP net income (loss) to the adjusted net income (loss) disclosure.

	Three Months Ended
	September 30
	2010			2009
Net (loss) income	$	(2,688	)	$	1,103
Acquisition bargain purchase gain		—			(1,379	)
Acquisition related costs		30			289
Restructuring		—			169
Adjusted net (loss) income	$	(2,658	)	$	182
Common shares outstanding assuming dilution		6,970			7,115
Adjusted net (loss) income per common share assuming dilution	$	(0.38	)	$	0.03

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