EX-99 3 d00471exv99.txt PRESS RELEASE DATED OCTOBER 17, 2002 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)
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 ============= =============
TANDY BRANDS ACCESSORIES, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands)
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 ============= =============