EX-99 2 d86495ex99.txt PRESS RELEASE 1 EXHIBIT 99 [TANDY BRANDS 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 harriet@lhai.com or www.lhai.com TANDY BRANDS ACCESSORIES, INC. REPORTS THIRD QUARTER 2001 RESULTS ARLINGTON, TX, JANUARY 18, 2001 -- TANDY BRANDS ACCESSORIES, INC. (NASDAQ NM: TBAC) today announced financial results for the third fiscal quarter ended March 31, 2001. For the third quarter of fiscal 2001, net sales totaled $42.4 million, as compared to net sales of $39.7 million for the same period in fiscal 2000. Net income for the third quarter of fiscal 2001 totaled $388,000, or $0.07 per diluted share, versus $671,000, or $0.12 per diluted share, for the same period last year. In March of 2000, the company negotiated an early termination of its small leather goods licensing agreement with Jones New York. The prior year three-month results included a one-time pre-tax benefit, including related costs, of $600,000 from the termination of this licensing agreement. Excluding the benefit of the early license termination, net income for the prior year third quarter was $304,000, or $.05 per diluted share. For the nine months ended March 31, 2001, net sales totaled $153.4 million as compared to net sales of $150.5 million for the same period in the prior year. Net income for the nine months in fiscal 2001 totaled $5.3 million, or $0.94 per diluted share, versus net income of $8.3 million, or $1.42 per diluted share, for the comparable nine-month period in fiscal 2000. Excluding the benefit of the early license termination, realized during the second and third fiscal quarters, net income for the prior year nine-month period was $7.4 million, or $1.26 per diluted share. J.S.B. Jenkins, President and Chief Executive Officer, stated, "Although our third quarter earnings per share exceeded last year's results after adjusting for a one-time benefit from a license agreement termination, the company's performance during the third fiscal quarter was below our internal expectations due to a difficult retail environment. The soft economy particularly affected our department store and chain retail customers, resulting in lower than anticipated replenishment orders, causing pressure on our gross margins and increasing customer allowances. As a result, our sales mix was skewed to lower margin products targeted to mass merchants, producing lower gross profit even though our total sales rose. Unfortunately, unless the retail economy improves, we anticipate similar sales and margin pressures in our fourth quarter." Mr. Jenkins further commented, "We are continuing to aggressively pursue many business opportunities designed to help Tandy Brands achieve both sales and earnings growth. The recent launch of our new women's line of Dockers(R) handbags, belts, and personal leather accessories has 2 been very successful, with orders exceeding our original expectations during the spring booking season. Based on the strong demand we have seen to date, we anticipate Dockers(R) sales in fiscal year 2002 to be more than double our original expectations and to provide important sales momentum. We are on track to begin delivering these popular new products to our customers in July 2001." "In addition," Mr. Jenkins noted, "we recently announced the acquisition of certain assets of Torel, Inc., a Texas-based manufacturer and distributor of men's belts and sporting goods accessories. This acquisition opens up new sporting goods product opportunities as well as a new channel of distribution for Tandy Brands." Investors and interested parties will have the opportunity to listen to management's discussion of Tandy Brands' third quarter results in a conference call to be held today, Wednesday, April 25, at 10:00 a.m. EDT. The dial-in number for the call is (888) 243-1745. For those who are unable to listen to the live broadcast, an audio replay of the call will be available beginning at 12:00 p.m. EDT on April 25 through 12:00 p.m. on Wednesday, May 2, via telephone at (800) 633-8284 or (858) 812-6440, reservation code #18629445. 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, 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 FOLLOW) 3 TANDY BRANDS ACCESSORIES, INC. Condensed Consolidated Statements of Income (In thousands, except per share amounts) (Unaudited)
Three Months Ended Nine Months Ended March 31, March 31, ------------------------ ------------------------ 2001 2000 2001 2000 ---------- ---------- ---------- ---------- Net sales $ 42,444 $ 39,686 $ 153,385 $ 150,508 Cost of goods sold 27,575 25,665 99,430 95,938 ---------- ---------- ---------- ---------- Gross margin 14,869 14,021 53,955 54,570 Selling, general and administrative expenses 12,035 11,887 38,789 37,335 Depreciation and amortization 1,450 958 3,831 2,796 ---------- ---------- ---------- ---------- Total operating expenses 13,485 12,845 42,620 40,131 ---------- ---------- ---------- ---------- Operating Income 1,384 1,176 11,335 14,439 Interest expense (779) (726) (2,800) (2,541) Royalty income and early termination of license agreement 28 646 62 1,720 ---------- ---------- ---------- ---------- Income before provision for income taxes 633 1,096 8,597 13,618 Provision for income taxes 245 425 3,326 5,286 ---------- ---------- ---------- ---------- Net income $ 388 $ 671 $ 5,271 $ 8,332 ========== ========== ========== ========== Earnings per share $ 0.07 $ 0.12 $ 0.94 $ 1.44 Earnings per share--assuming dilution $ 0.07 $ 0.12 $ 0.94 $ 1.42 Common shares outstanding 5,571 5,763 5,587 5,786 Common shares outstanding--assuming dilution 5,572 5,808 5,594 5,849
4 TANDY BRANDS ACCESSORIES, INC. Condensed Consolidated Balance Sheets (In thousands)
March 31, June 30, 2001 2000 ---------- ---------- ASSETS (Unaudited) Current assets: Cash and short-term investments $ 345 $ 661 Accounts receivable, net 33,946 31,105 Inventories 63,541 55,340 Other current assets 2,614 2,371 ---------- ---------- Total current assets 100,446 89,477 ---------- ---------- Fixed assets: Property, plant and equipment, at cost 25,922 22,317 Accumulated depreciation (11,376) (9,305) ---------- ---------- Net property, plant and equipment 14,546 13,012 ---------- ---------- Goodwill, less amortization 13,089 11,410 Other noncurrent assets 8,188 7,785 ---------- ---------- Total other assets 21,277 19,195 ---------- ---------- TOTAL ASSETS $ 136,269 $ 121,684 ========== ========== LIABILITIES & STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 5,456 $ 6,547 Accrued expenses 5,514 4,004 Notes payable 849 -- ---------- ---------- Total current liabilities 11,819 10,551 ---------- ---------- Notes payable 50,000 41,075 Other noncurrent liabilities 347 184 ---------- ---------- Total liabilities 62,166 51,810 ---------- ---------- Stockholders' equity: Common stock, $1 par value; 10,000,000 shares authorized; 5,828,606 shares and 5,808,968 shares issued as of March 31, 2001 and June 30, 2000, respectively 5,829 5,809 Additional paid-in capital 22,343 22,426 Cumulative other comprehensive income (952) (479) Retained earnings 48,831 43,560 Treasury stock, at cost (1,948) (1,442) ---------- ---------- Total stockholders' equity 74,103 69,874 ---------- ---------- TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $ 136,269 $ 121,684 ========== ==========