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)

October 25, 2006

____________________________

TANDY BRANDS ACCESSORIES, INC.

(Exact name of registrant as specified in charter)

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

690 East Lamar Blvd., Suite 200
Arlington, Texas 76011
(Address of principal executive offices and zip code)

(817) 265-4113
(Registrant’s telephone
number, including area code)

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 (see General Instruction A.2. below):

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.

     Pursuant to Item 2.02 of Form 8-K, the information contained in Item 9.01(d) and this Item 2.02 is furnished to, but not filed with, the Securities and Exchange Commission for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and, therefore, shall not be incorporated by reference in any filing under the Securities Act of 1933, as amended.

     On October 25, 2006, the Company issued a press release announcing its financial results for the first quarter ended September 30, 2006. A copy of the press release is furnished herewith as Exhibit 99.1 and is incorporated herein by reference.

Item 8.01 Other Events.

     The Board of Directors declared a quarterly dividend of $0.0275 per common share that will be payable January 19, 2007, to shareholders of record at the close of business on December 29, 2006. A copy of a press release announcing the dividend is attached hereto as Exhibit 99.1.

Item 9.01(d)Exhibits.

 Exhibit 99.1 Press Release, dated October 25, 2006.

2

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: October 25, 2006	By:	/s/ J.S.B. Jenkins
		J.S.B. Jenkins
		President and Chief Executive Officer

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EX-99.1

Exhibit 99.1

Tandy Brands Accessories, Inc.	Investor Relations:
J.S.B. Jenkins	Integrated Corporate Relations
President/Chief Executive Officer	Bill Zima (203) 682-8200
(817) 548-0090	Media Relations:
britt_jenkins@tandybrands.com	Monarch Communications, Inc.
	Jeff Siegel (516) 569-4271

TANDY BRANDS ACCESSORIES REPORTS FIRST QUARTER
FISCAL 2007 RESULTS

— Declares 14^th Consecutive Quarterly Dividend —

ARLINGTON, TX, October 25, 2006 — Tandy Brands Accessories, Inc. (Nasdaq NM:TBAC) today announced financial results for the first quarter ended September 30, 2006.

For the first quarter of fiscal 2007, net sales decreased 6.2% to $57.2 million compared to $60.9 million for the same period last year. The Company reported an increase in net income to $2.8 million, or $0.41 per diluted share, compared to net income of $1.5 million, or $0.22 per diluted share, in the prior year’s first quarter.

The decrease in net sales was a result of the Company’s exit from several lower-margin women’s categories, which resulted in a 350 basis point improvement in first quarter fiscal 2007 gross margins to 36.8% compared to 33.3% in the prior year period. Selling, general and administrative expenses decreased $1.4 million, or 8.4%, to $14.8 million, compared to $16.2 million for the prior year period, primarily due to the Company’s restructuring efforts.

J.S.B. Jenkins, President and Chief Executive Officer commented, “We believe we made strong progress in our overall performance in the first quarter. While total revenues were down due to our exit from several lower-margin women’s categories, sales from remaining categories in the women’s segment exceeded our internal projections. Sales in our men’s segment increased 7.9% for the first quarter due to increased demand for belts and gift accessories in most of our major channels of distribution.”

Mr. Jenkins continued, “We have worked very hard over the past year to improve the operational and financial performance in our business and believe our efforts are beginning to pay off. In addition to our exit from certain underperforming women’s categories, we have improved our shipping efficiencies, hired key senior personnel, consolidated our two women’s divisions, reduced our workforce and maintained a cautious position on spending.”

“We have also made significant improvements to our balance sheet compared to the first quarter last year. Our debt position continues to decrease, our cash flow is strong, and our inventory levels are much improved. We are also proud to be paying our 14^th consecutive dividend.”

Mr. Jenkins concluded, “Many of our initiatives are having a positive impact on our financial performance. We remain focused on improving our prospects for growth and believe we are off to a good start in fiscal 2007.”

The Company anticipates full year fiscal 2007 sales to be in the range of $177 to $182 million and fiscal 2007 earnings per share to be in the range of $0.67 to $0.72 per diluted share.

The Company also reported that the Board of Directors approved a quarterly dividend of $0.0275 per common share that will be payable January 19, 2007, to shareholders of record at the close of business on December 29, 2006.

Conference Call Information

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, Wednesday, October 25, 2006, at 10:00 a.m. ET. The dial-in number for the call is (706) 679-3799; conference code: 9437492. A live webcast of the conference call will also be broadcast at: www.viavid.net. For those who are unable to listen to the live broadcast, an audio replay of the call will be available through Wednesday, November 1, 2006, and can be accessed by dialing (706) 645-9291; conference code: 9437492.

About Tandy Brands Accessories, Inc.
Tandy Brands Accessories, Inc. designs, manufactures and markets fashion accessories for men, women and children. Key product categories include belts, wallets, handbags, suspenders, neckwear, gifts and sporting goods. 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.

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, 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 Operations
(in thousands except per share amounts)
(unaudited)

	Three Months Ended
	September 30
	2006			2005
Net sales	$	57,199		$	60,948
Cost of goods sold		36,172			40,668
Gross margin		21,027			20,280
Selling, general and administrative expenses		14,795			16,151
Depreciation and amortization		1,221			1,292
Total operating expenses		16,016			17,443
Operating income		5,011			2,837
Interest expense		(436	)		(408	)
Royalty and other income		55			10
Income before income taxes		4,630			2,439
Income taxes		1,801			972
Net income	$	2,829		$	1,467
Earnings per common share	$	0.42		$	0.22
Earnings per common share assuming dilution	$	0.41		$	0.22
Common shares outstanding		6,698			6,547
Common shares outstanding assuming dilution		6,887			6,683
Cash dividends declared per common share	$	0.0275		$	0.0275

TANDY BRANDS ACCESSORIES, INC.
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)

	September 30			June 30
	2006			2006
ASSETS
Current assets:
Cash and cash equivalents	$	3,544		$	4,182
Accounts receivable		39,918			27,322
Inventories		69,763			61,770
Deferred income taxes		3,371			3,792
Other current assets		3,023			5,784
Total current assets		119,619			102,850
Property and equipment		37,945			37,119
Accumulated depreciation		(25,605	)		(24,689	)
Net property and equipment		12,340			12,430
Goodwill		16,292			16,292
Other intangibles		5,475			5,653
Other assets		1,763			1,719
	$	155,489		$	138,944
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	19,119		$	10,106
Accrued expenses		6,918			6,214
Total current liabilities		26,037			16,320
Other liabilities:
Notes payable		18,000			14,000
Deferred income taxes		1,219			1,640
Supplemental executive retirement obligation		1,242			1,133
Other liabilities		1,087			1,012
Total other liabilities		21,548			17,785
Stockholders’ equity:
Common stock		6,829			6,795
Additional paid-in capital		32,358			31,911
Retained earnings		68,600			65,960
Accumulated other comprehensive income		965			988
Shares held by Benefit Restoration Plan Trust		(848	)		(815	)
Total stockholders’ equity		107,904			104,839
	$	155,489		$	138,944