10-Q

UNITED STATES 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 Quarterly Period Ended September 30, 2012

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 incorporation or organization)	(I.R.S. Employer Identification No.)

3631 West Davis, Suite A, Dallas, Texas 75211

 (Address of principal executive offices and zip code)

214-519-5200

 (Registrant's telephone number, including area code)

Former name, former address and former fiscal year, if changed since last report:

Not Applicable

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.

[ x ] Yes     [  ] No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

[ x ] Yes     [  ] No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	[  ]	Accelerated filer	[  ]
Non-accelerated filer	[  ] (Do not check if a smaller reporting company)	Small reporting company	[x]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

[  ] 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 November 12, 2012
Common stock, $1.00 par value	7,133,970

TABLE OF CONTENTS

PART I - FINANCIAL INFORMATION
Item 1	Financial Statements	4 - 10
Item 2	Management's Discussion And Analysis Of Financial Condition And Results Of Operations	10 - 12
Item 4	Controls And Procedures	12
PART II - OTHER INFORMATION
Item 1A	Risk Factors	13
Item 6	Exhibits	13
SIGNATURES		14

2

References in this Quarterly Report on Form 10-Q to “we,” “our,” “us,” or the “Company” refer to Tandy Brands Accessories, Inc. and its subsidiaries unless the context requires otherwise.

This Form 10-Q contains forward-looking statements regarding future events and our future results that are subject to the safe harbors created under the Securities Act of 1933 and the Securities Exchange Act of 1934.  Words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “continues,” “may,” variations of such words, and similar expressions are intended to identify forward-looking statements.  In addition, any statements that refer to projections of our future financial performance, our anticipated growth and trends in our business, and other characterizations of future events or circumstances are forward-looking statements.  We have based these forward-looking statements on our current expectations about future events, estimates and projections about the industry in which we operate.  These statements are not guarantees of future performance.  Our actual results may differ materially from those suggested by these forward-looking statements as a result of a number of known and unknown risks and uncertainties that are difficult to predict including, without limitation, general economic and business conditions, competition in the accessories and gifts markets, acceptance of our product offerings and designs, issues relating to distribution, the termination or non-renewal of our material licenses, our ability to maintain proper inventory levels, a significant decrease in business from or loss of any of our major customers or programs, and others identified under “Risk Factors” included in our 2012 Annual Report on Form 10-K.  Given these risks and uncertainties, you are cautioned not to place undue reliance on forward-looking statements.  The forward-looking statements included in this report are made only as of the date hereof.  Except as required under federal securities laws and the rules and regulations of the United States Securities and Exchange Commission, we do not undertake, and specifically decline, any obligation to update any of these statements or to publicly announce the results of any revisions to any forward-looking statements after the distribution of this report, whether as a result of new information, future events, changes in assumptions, or otherwise.

3

PART I - FINANCIAL INFORMATION

ITEM 1 - FINANCIAL STATEMENTS

Tandy Brands Accessories, Inc. And Subsidiaries

Unaudited Consolidated Statements Of Operations and Comprehensive Loss

(in thousands except per share amounts)

	Three Months Ended
	September 30
	2012			2011
Net sales	$	25,871		$	26,743
Cost of goods sold		17,692			17,611
Gross margin		8,179			9,132
Selling, general and administrative expenses		8,854			9,120
Depreciation and amortization		483			583
Total operating expenses		9,337			9,703
Operating loss		(1,158	)		(571	)
Interest expense		(292	)		(367	)
Other income (expense)		36			(38	)
Loss before income taxes		(1,414	)		(976	)
Income tax (benefit) expense		(129	)		99
Net loss	$	(1,285	)	$	(1,075	)
Other comprehensive income (loss):
Currency translation adjustments		229			(404	)
Total comprehensive loss	$	(1,056	)	$	(1,479	)
Loss per share:
Basic	$	(0.18	)	$	(0.15	)
Diluted	$	(0.18	)	$	(0.15	)
Weighted average common shares outstanding:
Basic		7,134			7,080
Diluted		7,134			7,080

The accompanying notes are an integral part of these unaudited consolidated financial statements.

4

Tandy Brands Accessories, Inc. And Subsidiaries

Unaudited Consolidated Balance Sheets

(in thousands)

	September 30 2012			June 30 2012			September 30 2011
Assets
Current assets:
Cash and cash equivalents	$	176		$	217		$	229
Accounts receivable, net		11,703			7,042			12,501
Inventories, net		49,943			28,743			41,947
Inventory deposits		1,029			7,107			1,623
Other current assets		3,093			2,824			4,491
Total current assets		65,944			45,933			60,791
Property and equipment, net		5,439			5,474			6,321
Other assets:
Intangibles		3,936			4,115			4,728
Other assets		893			934			963
Total other assets		4,829			5,049			5,691
	$	76,212		$	56,456		$	72,803
Liabilities And Stockholders' Equity
Current liabilities:
Accounts payable	$	18,907		$	10,548		$	12,330
Accrued compensation		1,174			1,309			1,431
Accrued expenses		1,623			1,584			1,737
Credit facility		24,380			11,810			23,604
Total current liabilities		46,084			25,251			39,102
Other liabilities		4,218			4,290			4,261
Stockholders' equity:
Preferred stock, $1.00 par value, 1,000 shares authorized, none issued		-			-			-
Common stock, $1.00 par value, 10,000 shares authorized, 7,134 shares, 7,102 shares and 7,062 shares issued and outstanding, respectively		7,134			7,102			7,062
Additional paid-in capital		34,148			34,129			34,121
Accumulated deficit		(17,255	)		(15,970	)		(13,393	)
Other comprehensive income		1,883			1,654			1,650
Total stockholders' equity		25,910			26,915			29,440
	$	76,212		$	56,456		$	72,803

The accompanying notes are an integral part of these unaudited consolidated financial statements.

5

Tandy Brands Accessories, Inc. And Subsidiaries

Unaudited Consolidated Statements Of Cash Flows

(in thousands)

	Three Months Ended
	September 30
	2012			2011
Cash flows used for operating activities:
Net loss	$	(1,285	)	$	(1,075	)
Adjustments to reconcile net loss to net cash used for operating activities:
Deferred income taxes		(21	)		5
Doubtful accounts receivable provision		10			10
Depreciation and amortization		547			645
Stock compensation expense		51			10
Amortization of debt costs		31			117
Other		(37	)		-
Changes in assets and liabilities:
Accounts receivable		(4,626	)		1,685
Inventories		(21,075	)		(13,280	)
Other assets		(381	)		(955	)
Inventory deposits		6,078			2,578
Accounts payable		7,958			4,714
Accrued expenses		(196	)		(970	)
Net cash used for operating activities		(12,946	)		(6,516	)
Cash flows used for investing activities:
Purchases of property and equipment		(325	)		(308	)
Sales of property and equipment		208			-
Net cash used for investing activities		(117	)		(308	)
Cash flows provided by financing activities:
Change in cash overdrafts		374			(489	)
Change in restricted cash		-			1,416
Net borrowings under credit facility		12,570			5,694
Net cash provided by financing activities		12,944			6,621
Effect of exchange-rate changes on cash and cash equivalents		78			18
Net decrease in cash and cash equivalents		(41	)		(185	)
Cash and cash equivalents beginning of year		217			414
Cash and cash equivalents end of period	$	176		$	229

The accompanying notes are an integral part of these unaudited consolidated financial statements.

6

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Note 1 - Accounting Principles

The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 8-03 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 our opinion, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included.

The preparation of our consolidated financial statements requires the use of estimates that affect the reported value of assets, liabilities, revenues, and expenses.  These estimates are based on historical experience and various other factors that we believe to be reasonable under the circumstances, the results of which form the basis for our conclusions.  We continually evaluate the information used to make these estimates as the business and economic environment change, including evaluation of events subsequent to the end of the quarter through the financial statements issuance date.  Actual results may differ from these estimates under different assumptions or conditions.  Such differences could have a material impact on our future financial position, results of operations, and cash flows.

The consolidated balance sheet at June 30, 2012 has been derived from the audited consolidated financial statements at that date, but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.  These interim unaudited consolidated financial statements should be read in conjunction with the financial statements and the notes thereto included in our 2012 Annual Report on Form 10-K filed with the Securities and Exchange Commission.

Historically, our first and second quarter sales and operating results reflect a seasonal increase compared to the third and fourth quarters of our fiscal year.  Sales and operating results for the first three months of fiscal 2013 are not necessarily indicative of the results that may be expected for the fiscal year ending June 30, 2013.

Note 2 - Fair Value Measurements

We measure fair values using unadjusted quoted prices in active markets (Level 1 inputs), quoted prices for similar instruments in active or inactive markets, or other directly-observable factors (Level 2 inputs), or inputs that are unobservable and significant to the fair value measurement (Level 3 inputs).  Our financial instruments consist primarily of cash, trade receivables and payables, and our credit facility.  The carrying values of cash and trade receivables and payables are considered to be representative of their respective fair values.  Our credit facility, which was entered into effective August 25, 2011 (and most recently amended August 29, 2012 and November 12, 2012), bears interest at floating market interest rates; therefore, we believe the fair value of amounts borrowed approximates the carrying value.  At September 30, 2012, June 30, 2012 and September 30, 2011, no other material assets or liabilities were measured at fair value.

Note 3 - Business Segment Information

We sell our products through all major retail distribution channels throughout North America, including, without limitation, mass merchants, national chain stores, department stores, specialty stores, catalog retailers, golf pro shops, sporting goods stores, and the retail exchange operations of the United States military.  Our business segments are based on product categories: (1) accessories, which include belts, small leather goods and bags, and (2) gifts.  Each segment is measured by management based on income consisting of net sales less cost of goods sold, product distribution expenses, and royalties utilizing accounting policies consistent in all material respects with those described in Note 2 of the notes to consolidated financial statements included in our 2012 Annual Report on Form 10-K filed with the Securities and Exchange Commission.  No inter-segment revenue is recorded.  Assets, related depreciation and amortization, and selling, general and administrative expenses are not allocated to the segments.

7

The following table presents operating information by segment and reconciliation of segment operating income to our consolidated operating loss (in thousands):

	Three Months Ended September 30
	2012			2011
Net sales:
Accessories	$	19,988		$	21,512
Gifts		5,883			5,231
	$	25,871		$	26,743
Segment operating income:
Accessories	$	4,266		$	4,524
Gifts		121			815
		4,387			5,339
Selling, general and administrative expenses		(5,062	)		(5,327	)
Depreciation and amortization		(483	)		(583	)
Operating loss	$	(1,158	)	$	(571	)

Note 4 - Credit Arrangements

We have a $35 million credit facility, which expires in August 2015.  On November 12, 2012, we, along with our Canadian subsidiary, and our lender entered into a Sixth Amendment to Credit and Security Agreement (the “Amendment”).  Pursuant to the Amendment, our lender formally waived our failure to satisfy a fixed charge coverage ratio covenant for the fiscal month ending September 30, 2012.  In addition, the Amendment contains amendments to the Credit Agreement, including, but not limited to:  (1) increasing the percentage used in the calculation to determine the interest rate for borrowings and letters of credit; (2) adding a fee if a specified fixed charge coverage ratio is not achieved by the end of fiscal year 2013; (3) monthly requirements for fixed charge coverage ratios; (4) fixing the minimum excess availability under the Credit Agreement; and (5) lowering the maximum capital expenditures (in the aggregate for any fiscal year).  At September 30, 2012, we had $1.0 million borrowing availability based on our accounts receivable and inventory levels, outstanding letters of credit totaling $794,000, and $24.4 million outstanding borrowings under the facility.  Borrowings and letters of credit bear interest at either the daily three-month LIBOR rate plus 4.25% (which percentage may be adjusted downward to 3.75% at the end of fiscal year 2013 upon achievement of fixed charge coverage ratio) or a fixed LIBOR rate for three months plus 4.25% (which percentage may be adjusted downward to 3.75% at the end of fiscal year 2013 upon achievement of fixed charge coverage ratio).

The credit facility is guaranteed by substantially all of our subsidiaries and is secured by substantially all of our assets and those of our subsidiaries.  The credit facility contains certain negative covenants and it requires the maintenance of a fixed charge coverage and minimum availability covenant, which, if not met, could adversely impact our liquidity.  The facility also limits our ability to engage in certain actions without the lender’s consent, including, repurchasing our common stock, entering into certain mergers or consolidations, guaranteeing or incurring certain debt, engaging in certain stock or asset acquisitions, paying dividends, making certain investments in other entities, prepaying debt, and making certain property transfers.  In addition, the facility contains customary representations and warranties and we have agreed to certain affirmative covenants, including reporting requirements.

The maximum line of credit under the credit facility, which includes the revolver and letters of credit, is $35 million.  The credit facility is asset-based and the available line of credit may be limited pursuant to certain borrowing base limitations, including (1) the amount of certain of our eligible accounts, (2) the amount of our eligible accounts with our largest customer, (3) the value of our eligible inventory, which is more specifically determined in part based on specific periods during our fiscal year, and (4) the amount of our borrowing base reserve.

On November 12, 2012, we obtained a waiver from our lender for violation of the fixed charge coverage covenant under our credit facility.  This violation was due to changes in the timing of customer orders, which ultimately impacted our ability to meet forecasts as established under the credit facility.  Excluding this lender waived covenant violation, we were in compliance with all covenants as of September 30, 2012.

8

Note 5 - Long-Term Incentive Awards

During the first quarter of fiscal 2013, we issued 950,000 performance units comprised 50% of cash and 50% of phantom shares of our common stock, to certain employees.  Each unit has a $1.00 assigned value and the number of phantom shares of common stock attributable to each award was determined based on the fair market value of our common stock on the date of grant, which was $1.40 per share at the close of trading on that day.  The units earned during the performance cycle (July 1, 2012 through June 30, 2014) vary from 0% to 200% of the units awarded based on our basic earnings per share for each of the two fiscal years ending June 30, 2014, excluding the effects of accounting principles changes, extraordinary items, recognized capital gains and losses and, as determined by our board of directors, one-time, non-operating items.  Assuming continued employment, if, at the end of the two-year performance cycle, at least the threshold performance level has been achieved, the performance units will cliff vest and, to the extent earned, will generally be settled in cash (if shares are available under our benefit plans, the Board may, in its discretion, settle the phantom shares attributable to an award in shares of our common stock).  Notwithstanding the foregoing, employees vest in a portion of units earned based on the number of fiscal years employed during the cycle upon death, disability, or normal (age 65) or early (age 55 and 15 years service) retirement and, upon a change of control, employees vest in 100% of the units awarded.  As of September 30, 2012, we expect 765,000 of the 950,000 units granted to vest (100,000 units were forfeited), which, based on the market price of our common stock on September 30, 2012, would be payable in cash equal to $744,000.

Note 6 - Income Taxes

The following presents components of our income tax (benefit) expense (in thousands):

	Three Months Ended September 30
	2012			2011
Federal and state	$	5		$	65
Deferred federal and state		(491	)		(349	)
Foreign		2			76
Uncertain tax positions		(161	)		(48	)
Deferred tax valuation allowance		516			355
	$	(129	)	$	99

The federal statutory income tax rate reconciles to our effective income tax rate as follows:

	Three Months Ended September 30
	2012			2011
Statutory rate		(34.0	)%		(34.0	)%
Deferred tax valuation allowance		36.6			36.4
State and foreign taxes net of federal tax benefit		(3.0	)		12.6
Uncertain tax positions		(11.4	)		(4.9	)
Repatriation of foreign earnings		0.7			-
Other, net		2.0			-
		(9.1	)%		10.1	%

At September 30, 2012 we had federal income tax net operating loss carryovers of approximately $52.7 million expiring in 2029 through 2031.  Our deferred tax valuation allowance was approximately $24.7 million.

During the first quarter of fiscal 2013, $161,000 of the liability previously recorded for uncertain state tax positions was released from the reserve as it no longer failed to meet the more-likely-than-not threshold.

9

Note 7 - Loss Per Share

Our basic and diluted losses per common share are computed as follows (in thousands except per share amounts):

	Three Months Ended September 30
	2012			2011
Numerator for basic and diluted earnings per share:
Net loss	$	(1,285	)	$	(1,075	)
Denominator for basic and diluted earnings per share		7,134			7,080
Loss per common share	$	(0.18	)	$	(0.15	)
Loss per common share assuming dilution	$	(0.18	)	$	(0.15	)

Potentially dilutive securities which could have had an antidilutive effect on our per share results of operations were (in thousands except per share amounts):

	September 30
	2012		2011
Stock options (exercise prices per share: 2012 - $1.40 to $15.60; 2011 - $1.98 to $15.60)		155		308

ITEM 2 - MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This Item 2 should be read in the context of the information included in our 2012 Annual Report on Form 10-K filed with the Securities and Exchange Commission and elsewhere in this Quarterly Report, including our unaudited consolidated financial statements and accompanying notes in Item 1 of this Quarterly Report.

BUSINESS

We are a leading designer and marketer of branded men’s, women’s and children’s accessories, including belts, gifts, small leather goods and bags.  Our merchandise is marketed under a broad portfolio of nationally recognized licensed and proprietary brand names, including SPERRY TOP-SIDER®, ELIE TAHARI®, EDDIE BAUER®, TOTES®, MISS ME®, THE SHARPER IMAGE®, WOLVERINE®, HAGGAR®, ARNOLD PALMER®, DOCKERS®, EILEEN WEST®, BONE COLLECTOR®, KODIAK®, TERRA®, ROLFS®, AMITY®, CANTERBURY®, PRINCE GARDNER®, PRINCESS GARDNER®, CHAMBERS BELT COMPANY®, ABSOLUTELY FRESH®, SURPLUS®, as well as private brands for major retail customers.  We sell our products through all major retail distribution channels throughout North America, including, without limitation, mass merchants, national chain stores, department stores, specialty stores, catalog retailers, golf pro shops, sporting goods stores, and the retail exchange operations of the United States military.  We were incorporated as a Delaware corporation on November 1, 1990.

10

FISCAL 2013 COMPARED TO FISCAL 2012

Business Segments

The following presents sales, gross margins, and operating expenses for our business segments (in thousands of dollars):

	Three Months Ended September 30
	2012			2011
Net sales:
Accessories	$	19,988		$	21,512
Gifts		5,883			5,231
	$	25,871		$	26,743
Gross margin:
Accessories	$	6,768		$	7,283
Gifts		1,411			1,849
	$	8,179		$	9,132
Gross margin percent of sales:
Accessories		33.9	%		33.9	%
Gifts		24.0	%		35.3	%
Total		31.6	%		34.1	%
Operating expenses:
Accessories	$	2,502		$	2,759
Gifts		1,290			1,034
	$	3,792		$	3,793

Net Sales and Gross Margins

Our fiscal 2013 first quarter net sales were $25.9 million, which was $872,000, or 3%, lower than the prior year.  Net sales for our accessories segment were $20.0 million for the first quarter of fiscal 2013, which was $1.5 million, or 7%, lower than the first quarter of fiscal 2012 primarily due to higher sales of exited product categories in the prior year, offset slightly by higher levels of replenishment orders by one of our largest customers during the current year.  Gifts segment net sales of $5.9 million for the first quarter of fiscal 2013 were $652,000, or 12% higher than in the prior year primarily due to increased holiday shipments resulting from new programs acquired in fiscal 2012.

Gross margins were 31.6% and 34.1% for the first quarter of fiscal 2013 and 2012, respectively.  Accessories segment margins were flat to the prior year.  The gifts segment margin was 1130 basis points lower in the fiscal 2013 first quarter compared to the same quarter last year as a result of higher freight costs and higher customer deductions.  Gross margins were also affected by more customer-direct shipments in the first quarter of fiscal 2013 compared to the first quarter of fiscal 2012, since these shipments carry lower gross margins due to being shipped directly from our suppliers to our customers (and not handled in our distribution centers), reducing the associated selling, general and administrative costs.

Operating Expenses

Total segment operating expenses of $3.8 million were flat compared to the prior year, and higher as a percentage of net sales, primarily due to increases in facilities costs to support growth in the gifts segment.  Additional temporary distribution center space was procured during the current year period to support the increase in gifts inventory orders that will ship during the fiscal 2013 second quarter.

Total selling, general and administrative expenses of $8.9 million for the first quarter of fiscal 2013 were $266,000, or 3%, lower than the first quarter of fiscal 2012.  The reductions were primarily due to decreased expenses such as compensation costs and variable distribution costs.

Interest and Taxes

Interest expense in the first quarter of fiscal 2013 was $75,000 lower than in the same quarter last year.  The decrease was primarily attributable to non-recurrence of a $98,000 write-off of costs capitalized in connection with our previous credit facility.  This decline was offset partially by higher borrowings in the first quarter of the current year.

11

Information about our income taxes is incorporated herein by reference to Note 6 of the notes to unaudited consolidated financial statements in Item 1 of this Quarterly Report.

SEASONALITY

Historically, our first and second quarter sales and operating results reflect a seasonal increase compared to the third and fourth quarters of our fiscal year.  Sales and operating results for the first three months of fiscal 2013 are not necessarily indicative of the results that may be expected for the fiscal year ending June 30, 2013.

LIQUIDITY AND CAPITAL RESOURCES

Our primary sources of liquidity, which we believe will provide adequate financial resources for our short-term working capital needs, are cash flows from operating activities and our credit facilities ($1.0 million borrowing availability at September 30, 2012).  We believe several sources of working capital are available which could be utilized at our senior lender’s consent to fund longer-term needs, if necessaary.  Information about our credit facilities is incorporated herein by reference to Note 4 of the notes to unaudited consolidated financial statements included in Item 1 of this Quarterly Report.

First quarter fiscal 2013 net cash used for operating activities was $6.4 million higher than in the prior year, primarily driven by the following:  an increase in the net loss; $6.3 million higher current year accounts receivable due to a large one-time reduction in receivables as a result of the commencement of a factoring facility entered into with our largest customer during the prior year; $3.7 million higher current year inventory and other assets due to higher gift inventory; and $4.0 million higher accounts payable and accrued expenses due to higher gift inventory purchases to fulfill increased customer orders that will ship in the second quarter of fiscal 2013.

Investing activities for the first quarter of fiscal 2013 primarily consisted of purchases of software to improve fill-rates with our largest customer and operating equipment to improve efficiency in our distribution facilities.  Investing activities for the prior year primarily related to the purchases of operating equipment for our distribution facilities.

Financing activities included credit facility net borrowings of $12.6 million and $5.7 million in the first quarters of fiscal 2013 and 2012, respectively, used to fund our operating activities.  This $6.9 million increase from the prior year was primarily due to higher inventory purchases in the first quarter of fiscal 2013 over the first quarter of fiscal 2012 and not having the one-time cash inflows generated in the prior year from (1) the commencement of a factoring facility (entered into with our largest customer) and (2) the elimination of the requirement to maintain compensation balances with our Canadian subsidiary’s lender (which occurred upon the termination of the Canadian subsidiary’s credit facility) and the use of previously restricted cash to pay down our outstanding balance.

CRITICAL ACCOUNTING POLICIES

There have been no significant changes in the critical accounting policies disclosed in our Annual Report on Form 10-K for the year ended June 30, 2012.

ITEM 4 - CONTROLS AND PROCEDURES

Disclosure Controls And Procedures

Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we have evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934) as of the end of the period covered by this report.  Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were effective as of September 30, 2012.

Changes in Internal Control Over Financial Reporting

There has been no change in our internal control over financial reporting during the first quarter of fiscal 2013 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

12

PART II - OTHER INFORMATION

ITEM 1A - RISK FACTORS

In addition to the information in this Quarterly Report on Form 10-Q, consideration should be given to the risk factors in Part I, Item 1A - Risk Factors in our Annual Report on Form 10-K for the year ended June 30, 2012 which could materially and adversely affect our business, results of operations, and financial condition.  There have been no significant changes in the risk factors disclosed in our 2012 Annual Report on Form 10-K filed with the Securities and Exchange Commission.

ITEM 6 - EXHIBITS

The Exhibit Index immediately preceding the exhibits required to be filed is incorporated herein by reference.

13

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)
November 14, 2012	/s/ N. Roderick McGeachy, III
	N. Roderick McGeachy, III
	President and Chief Executive Officer
	(Principal Executive Officer)
	/s/ Joseph C. Talley
	Joseph C. Talley
	Chief Financial Officer
	(Principal Financial and
	Accounting Officer)

14

TANDY BRANDS ACCESSORIES, INC. AND SUBSIDIARIES

EXHIBIT INDEX

			Incorporated by Reference
			(if applicable)
	Exhibit Number and Description		Form		Date	File No.		Exhibit
(3)	Articles of Incorporation and Bylaws
	3.1	Certificate of Incorporation of Tandy Brands Accessories, Inc.		S-1	11/02/90		33-37588		3.1
	3.2	Certificate of Amendment of the Certificate of Incorporation of Tandy Brands Accessories, Inc.		8-K	11/02/07		0-18927		3.1
	3.3	Amended and Restated Bylaws of Tandy Brands Accessories, Inc., effective July 2007		8-K	7/13/07		0-18927		3.01
	3.4	Amendment No. 1 to Amended and Restated Bylaws of Tandy Brands Accessories, Inc.		8-K	11/02/07		0-18927		3.2
(4)	Instruments Defining the Rights of Security Holders, Including Indentures
	4.1	Form of Common Stock Certificate of Tandy Brands Accessories, Inc.		S-1	12/17/90		33-37588		4.2
	4.2	Certificate of Elimination of Series A Junior Participating Cumulative Preferred Stock of Tandy Brands Accessories, Inc.		8-K	10/24/07		0-18927		3.1
	4.3	Credit Agreement by and between Tandy Brands Accessories, Inc. and Wells Fargo Bank dated as of August 25, 2011		10-K/A	4/19/12		0-18927		4.8
	4.4	Amendment No. 1 to Credit Agreement dated as of August 25, 2011 by and between Tandy Brands Accessories, Inc. and Wells Fargo Bank dated as of January 20, 2012		10-Q	2/10/12		0-18927		4.9
	4.5	Amendment No. 2 to Credit and Security Agreement dated as of August 25, 2011 and Waiver by and between Tandy Brands Accessories, Inc. and Wells Fargo Bank dated as of May 11, 2012		10-Q	5/14/12		0-18927		4.5
	4.6	Amendment No. 3 to Credit and Security Agreement dated as of August 25, 2011 by and between Tandy Brands Accessories, Inc. and Wells Fargo Bank dated as of June 5, 2012		10-K	9/4/12		0-18927		4.11
	4.7	Amendment No. 4 to Credit and Security Agreement dated as of August 25, 2011 by and between Tandy Brands Accessories, Inc. and Wells Fargo Bank dated as of August 9, 2012		10-K	9/4/12		0-18927		4.12

1

TANDY BRANDS ACCESSORIES, INC. AND SUBSIDIARIES

EXHIBIT INDEX

			Incorporated by Reference
			(if applicable)
	Exhibit Number and Description		Form	Date		File No.	Exhibit
	4.8	Amendment No. 5 to Credit and Security Agreement dated as of August 25, 2011 by and between Tandy Brands Accessories, Inc. and Wells Fargo Bank dated as of August 29, 2012	10-K	9/4/12		0-18927	4.13
	4.9	Amendment No. 6 to Credit and Security Agreement dated as of August 25, 2011 by and between Tandy Brands Accessories, Inc. and Wells Fargo Bank dated as of November 12, 2012**	N/A		N/A	N/A	N/A
(10)	Material Contracts
	10.1	Form of Tandy Brands Accessories, Inc. Fiscal 2013 Performance Unit Award Agreement*	10-K	9/4/12		0-18927	10.36
(31)	Rule 13a-14(a)/15d-14(a) Certifications
	31.1	Certification Pursuant to Rule 13a-14(a)/15d-14(a) (Chief Executive Officer)**	N/A		N/A	N/A	N/A
	31.2	Certification Pursuant to Rule 13a-14(a)/15d-14(a) (Chief Financial Officer)**	N/A		N/A	N/A	N/A
(32)	Section 1350 Certifications
	32.1	Section 1350 Certifications (Chief Executive Officer and Chief Financial Officer)**	N/A		N/A	N/A	N/A
(101)	Interactive Data Files***
	101.INS	XBRL Instance**
	101.SCH	XBRL Taxonomy Extension Schema**
	101.CAL	XBRL Taxonomy Extension Calculation**
	101.LAB	XBRL Taxonomy Extension Labels**
	101.PRE	XBRL Taxonomy Extension Presentation**
	101.DEF	XBRL Taxonomy Extension Definition**

__________________

*      Management contract or compensatory plan

**    Filed herewith

*** In accordance with Rule 406T of Regulation S-T, the information in these exhibits is furnished and deemed not filed or a part of registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections and shall not be incorporated by reference into any registration statement or document filed under the Securities Act of 1933, as amended, except as expressly set forth by specific reference in such filing

 2

EX-4.9

EXHIBIT 4.9

SIXTH AMENDMENT TO CREDIT AND

SECURITY AGREEMENT

THIS SIXTH AMENDMENT TO CREDIT AND SECURITY AGREEMENT (this "Amendment") executed on November 12, 2012, is by and among Tandy Brands Accessories, Inc., a Delaware corporation ("Parent"), H.A. Sheldon Canada Ltd., an Ontario corporation ("HA Sheldon"; Parent and HA Sheldon are herein collectively called "Company"), Wells Fargo Bank, National Association ("Wells Fargo"), acting through its Wells Fargo Business Credit operating division, and TBAC Investment Trust, a Pennsylvania business trust, and TBAC-TOREL, Inc., a Delaware corporation, consenting to this Amendment and ratifying their respective Guaranties (as defined in the Credit Agreement) each dated of even date with the Credit Agreement (defined below).

W I T N E S S E T H:

WHEREAS, Company and Wells Fargo entered into that certain Credit and Security Agreement dated as of August 25, 2011 (as heretofore amended, supplemented or otherwise modified, the "Original Credit Agreement", and as amended hereby, the "Credit Agreement"; capitalized terms used but not defined herein shall have the meanings specified for such terms in the Credit Agreement), for  the purposes and consideration therein expressed, pursuant to which Wells Fargo became obligated to make loans to the Company as therein provided;

WHEREAS, the Company has failed to satisfy the Fixed Charge Coverage Ratio covenant in Section 5.2(a) of the Original Credit Agreement for the fiscal month of Parent ending September 30, 2012, which failure constitutes an Event of Default under Section 6.1(b)(ii) of the Original Credit Agreement (the "Specified Event of Default"); and

WHEREAS, the Company and Wells Fargo desire to grant the waiver set forth below and to amend the Original Credit Agreement as provided herein.

NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements contained herein and in the Credit Agreement, in consideration of the loans made and which may hereafter be made by Wells Fargo to Company, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

ARTICLE I

DEFINITIONS

Section 1.1Terms Defined in the Original Credit Agreement.  Unless the context otherwise requires or unless otherwise expressly defined herein, the terms defined in the Credit Agreement shall have the same meanings whenever used in this Amendment.

SIXTH AMENDMENT TO CREDIT AND SECURITY AGREEMENT - Page 1

ARTICLE II

WAIVER

Section 2.1Waiver of Specified Event of Default.  Subject to the terms and conditions hereof, Wells Fargo hereby waives the Specified Event of Default.

Section 2.2Limited Waiver; Reservation of Rights and Remedies.  The execution, delivery and effectiveness of this Amendment shall not, except as expressly provided herein, operate as a waiver of any right, power or remedy of Wells Fargo under the Credit Agreement or any other Loan Document nor constitute a waiver of any provision of the Credit Agreement or any other Loan Document. Without limiting the generality of the foregoing, Wells Fargo, on the one hand, and the Company, on the other hand, agree that nothing in this Amendment constitutes or shall be deemed to constitute a waiver of (x) any breach, default or event of default that may exist or hereafter occur under the Loan Documents other than the Specified Event of Default, (y) compliance with Section 5.2 of the Credit Agreement except for the covenant and time period specified in the definition herein of Specified Event of Default, or (z) except as expressly set forth herein, any of Wells Fargo's rights or remedies under the terms of the Credit Agreement, any other Loan Document or applicable law, all of which are hereby reserved.

ARTICLE III

AMENDMENTS TO ORIGINAL CREDIT AGREEMENT

Section 3.1Interest Rate.  Effective as of November 1, 2012, the percentage “three and three-quarters of one percent (3.75%)” set forth in clause (i) of Section 1.7(a) of the Original Credit Agreement is hereby amended to read “the Applicable Percentage”.

Section 3.2Letter of Credit Fees.  Effective as of November 1, 2012, the percentage “three and three-quarters of one percent (3.75%)” set forth in Section 1.8(f) of the Original Credit Agreement is hereby amended to read “the Applicable Percentage”.

Section 3.3Applicable Percentage.  Effective as of the date hereof, Exhibit A to the Original Credit Agreement is hereby amended to add the following definition of “Applicable Percentage”, which definition shall appear in alphabetical order in such exhibit and shall read as follows:

“Applicable Percentage” means four and one-quarter of one percent (4.25%), provided that if the financial statements and Compliance Certificate delivered to Wells Fargo for Parent’s fiscal year ending June 30, 2013 demonstrate that the Fixed Charge Coverage Ratio of Parent and its consolidated Subsidiaries is at least 1.10 to 1.00 for such fiscal year, then effective as of the first day of the month following delivery of such financial statements and Compliance Certificate, and at all times thereafter, the Applicable Percentage shall be three and three-quarters of one percent (3.75%).

SIXTH AMENDMENT TO CREDIT AND SECURITY AGREEMENT - Page 2

Section 3.4Covenant Fees; Collateral Monitoring Fee.  Parent and HA Sheldon acknowledge and agree that a fee in the amount of $37,405.15 is due and payable pursuant to Section 1.8(j) of the Original Credit Agreement.  As of the Effective Date, Section 1.8 of the Original Credit Agreement is hereby amended to add subsections (k) and (l) to the end thereof, which subsections shall read as follows:

(k)           Additional Covenant Fee.  In the event the Fixed Charge Coverage Ratio of Parent and its consolidated Subsidiaries is not at least 1.10 to 1.00 for the fiscal year of Parent ending June 30, 2013, Company shall pay Wells Fargo a fee in the amount of $30,000 on or before October 28, 2013.

(l)           Collateral Monitoring Fee.  Company shall pay Wells Fargo a collateral monitoring fee in the amount of $1,500 per month, due and payable monthly in advance on the first day of each month, commencing December 1, 2013.

Section 3.5Amendment to Fixed Charge Coverage Ratio Covenant Requirement.  As of the Effective Date, Subsection (a) of Section 5.2 of the Original Credit Agreement is hereby amended in its entirety to read as follows:

(a)           Parent and its consolidated Subsidiaries shall maintain, as of the end of each fiscal month specified below, a Fixed Charge Coverage Ratio of not less than the applicable ratio set forth below in accordance with GAAP on a rolling twelve-month basis ending as of the end of such fiscal month:

Fiscal Month	Minimum Fixed Charge Coverage Ratio
October 2012	(1.71) to 1.00
November 2012	(1.72) to 1.00
December 2012	(1.18) to 1.00
January 2013	(0.25) to 1.00
February 2013	0.55 to 1.00
March 2013	(0.25) to 1.00
April 2013	(0.33) to 1.00
May 2013	(0.36) to 1.00
June 2013	0.59 to 1.00
July 2013 and each fiscal month thereafter	1.10 to 1.0

SIXTH AMENDMENT TO CREDIT AND SECURITY AGREEMENT - Page 3

Section 3.6Amendment to Minimum Excess Availability.  As of the Effective Date, Subsection (b) of Section 5.2 of the Original Credit Agreement is hereby amended in its entirety to read as follows:

(b)           Minimum Excess Availability.  Excess Availability shall at all times exceed $2,700,000.

Section 3.7Amendment to Maximum Capital Expenditures Covenant.  As of the Effective Date, Subsection (c) of Section 5.2 of the Original Credit Agreement is hereby amended in its entirety to read as follows:

(c)           Maximum Capital Expenditures.  Company shall not incur or contract to incur Capital Expenditures of more than $1,000,000 in the aggregate during any fiscal year.

Section 3.8Third Party Review.  As of the Effective Date, Section 5.30 of the Original Credit Agreement is hereby amended in its entirety to read as follows:

5.30 Third Party Review.  On or before December 15, 2012, the Company shall engage a third party acceptable to Wells Fargo to review the Company’s projections, business plan, financial condition and business operations.  The services of such third party shall continue in a manner acceptable to Wells Fargo until Wells Fargo has approved in writing the termination of such third party’s services.

ARTICLE IV

CONDITIONS OF EFFECTIVENESS

Section 4.1Effective Date.  This Amendment shall become effective as of the date first written above (the "Effective Date") when and only when each of the following conditions precedent shall have been satisfied in full:

(a)Wells Fargo shall have received, at Wells Fargo's office a duly executed counterpart by each of Parent and HA Sheldon of this Amendment and a duly executed counterpart of the attached acknowledgement and consent by TBAC Investment Trust and TBAC-TOREL, Inc.;

(b)Company shall have paid to Wells Fargo the fee in the amount of $37,405.15 due pursuant to Section 1.8(j) of the Original Credit Agreement.

SIXTH AMENDMENT TO CREDIT AND SECURITY AGREEMENT - Page 4

(c)Company shall have paid to Wells Fargo all outstanding fees and expenses owing to Wells Fargo under the Loan Documents as of such date;

(d)The representations and warranties contained herein and in the Credit Agreement and other Loan Documents are true and correct with the same effect as though such representations and warranties had been made on and as of the date hereof and after giving effect to the amendments and waiver contemplated hereby, except to the extent such representations and warranties expressly relate solely to an earlier date (in which case such representations and warranties shall have been true and accurate on and as of such earlier date) or changes resulting from transactions expressly permitted under the Credit Agreement or other Loan Documents; and

(e)No Event of Default or other event which with the giving of notice or passing of time, or both, would constitute an Event of Default, shall have occurred and be continuing, other than the Specified Event of Default.

ARTICLE V

REPRESENTATIONS AND WARRANTIES

Section 5.1Representations and Warranties of Company.  In order to induce Wells Fargo to enter into this Amendment, each of Parent and HA Sheldon hereby represents and warrants to Wells Fargo that:

(a)After giving effect to this Amendment, the representations and warranties contained in the Original Credit Agreement are true and correct in all material respects with the same effect as though such representations and warranties had been made on and as of the date hereof and after giving effect to the amendments contemplated hereby, except to the extent such representations and warranties expressly relate solely to an earlier date (in which case such representations and warranties shall have been true and accurate in all material respects on and as of such earlier date) or changes resulting from transactions expressly permitted under the Credit Agreement or other Loan Documents.

(b)Each such Person is duly authorized to execute and deliver this Amendment and is and will continue to be duly authorized to perform its obligations under the Credit Agreement and the other Loan Documents to which it is a party and such Person is and will continue to be duly authorized to borrow under the Credit Agreement.  Each such Person has duly taken all corporate action necessary to authorize the execution and delivery of this Amendment and to authorize the performance of their respective obligations hereunder.

(c)The execution and delivery by such Person of this Amendment, the performance by it of its obligations hereunder and the consummation of the transactions contemplated hereby do not and will not conflict with any provision of law, statute, rule or regulation or of its articles of incorporation or bylaws, or of any agreement, judgment, license, order or permit applicable to or binding upon it.  Except for those which have been duly obtained and are in full force and effect, no consent, approval, authorization or order of any court or governmental authority or third party is required in connection with the execution and delivery by such Person of this Amendment or to consummate the transactions contemplated hereby.

SIXTH AMENDMENT TO CREDIT AND SECURITY AGREEMENT - Page 5

(d)When duly executed and delivered, this Amendment will be a legal and binding instrument and agreement of Company, enforceable in accordance with its terms, except as limited by bankruptcy, insolvency and similar laws applying to creditors' rights generally and by principles of equity applying to creditors' rights generally.

ARTICLE VI

MISCELLANEOUS

Section 6.1Ratification of Agreement.  The Original Credit Agreement as hereby amended is hereby ratified and confirmed in all respects.  This Amendment shall constitute a "Loan Document" under and as defined in the Credit Agreement in all respects and for all purposes.  Any reference to the Credit Agreement in any Loan Document shall be deemed to refer to the Original Credit Agreement as amended by this Amendment also.  The execution, delivery and effectiveness of this Amendment shall not, except as expressly provided herein, operate as a waiver of any right, power or remedy of Wells Fargo under the Credit Agreement or any other Loan Document nor constitute a waiver of any provision of the Credit Agreement or any other Loan Document.

Section 6.2Survival of Agreements.  All representations, warranties, covenants and agreements of Company herein shall survive the execution and delivery of this Amendment and the performance hereof, and shall further survive until all of the Indebtedness is paid in full.  All statements and agreements contained in any certificate or instrument delivered by Company and any Guarantors hereunder or under the Credit Agreement to Wells Fargo shall be deemed to constitute representations and warranties by, or agreements and covenants of, such Person or any such Guarantor, as applicable, under this Amendment and under the Credit Agreement.

Section 6.3Severability.  Any provision of this Amendment held by a court of competent jurisdiction to be invalid or unenforceable shall not impair or invalidate the remainder of this Amendment and the effect thereof shall be confined to the provision so held to be invalid or unenforceable; provided that the parties hereto shall endeavor in good faith to promptly replace any such invalid or unenforceable provisions with substantially similar provisions that are enforceable.

Section 6.4Further Assurances.  Each of Parent and HA Sheldon hereby agrees to establish, make, prepare, execute, deliver, file, amend, authorize, ratify, affirm and/or approve any and all agreements, instruments, notes, waivers, consents, licenses, accounts and other documents, and take any and all other actions and do all other things necessary or desirable to consummate or otherwise give effect to the transactions and grant of security contemplated by this Amendment and the Credit Agreement.

SIXTH AMENDMENT TO CREDIT AND SECURITY AGREEMENT - Page 6

Section 6.5GOVERNING LAW; JURISDICTION, VENUE; WAIVER OF JURY TRIAL.  THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE SUBSTANTIVE LAWS (OTHER THAN CONFLICT LAWS) OF THE STATE OF TEXAS.  THE PARTIES TO THIS AMENDMENT (A) CONSENT TO THE PERSONAL JURISDICTION OF THE STATE AND FEDERAL COURTS LOCATED IN THE STATE OF TEXAS IN CONNECTION WITH ANY CONTROVERSY RELATED TO THIS AMENDMENT; (B) WAIVE ANY ARGUMENT THAT VENUE IN ANY SUCH FORUM IS NOT CONVENIENT; (C) AGREE THAT ANY LITIGATION INITIATED BY WELLS FARGO OR COMPANY IN CONNECTION WITH THIS AMENDMENT OR THE OTHER LOAN DOCUMENTS MAY BE VENUED IN EITHER THE STATE OR FEDERAL COURTS LOCATED IN THE COUNTY OF DALLAS, STATE OF TEXAS; AND (D) AGREE THAT A FINAL JUDGMENT IN ANY SUCH SUIT, ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. THE PARTIES HERETO WAIVE ANY RIGHT TO TRIAL BY JURY IN ANY ACTION AT LAW OR IN EQUITY OR IN ANY OTHER PROCEEDING BASED ON OR PERTAINING TO THIS AMENDMENT.

Section 6.6Counterparts; Fax.  This Amendment may be separately executed in counterparts and by the different parties hereto in separate counterparts, each of which when so executed shall be deemed to constitute one and the same Amendment.  This Amendment may be duly executed and delivered by facsimile transmission, electronic mail or other electronic means.

Section 6.7FINAL AGREEMENT.  THIS AMENDMENT TOGETHER WITH THE OTHER LOAN DOCUMENTS COMPRISES THE COMPLETE AND INTEGRATED AGREEMENT OF THE PARTIES ON THE SUBJECT MATTER OF THIS AMENDMENT AND SUPERSEDES ALL PRIOR AGREEMENTS, WHETHER ORAL OR EVIDENCED IN A RECORD.

THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

[The remainder of this page is intentionally left blank.]

SIXTH AMENDMENT TO CREDIT AND SECURITY AGREEMENT - Page 7

IN WITNESS WHEREOF, the undersigned by their respective duly authorized officers thereunto have executed and delivered this Amendment as of the date first above written.

TANDY BRANDS ACCESSORIES, INC.
By:
	Name: Title:
H.A. SHELDON CANADA, LTD.
By:
	Name: Title:
WELLS FARGO BANK, NATIONAL ASSOCIATION
By:
	Name: Title:

SIXTH AMENDMENT TO CREDIT AND SECURITY AGREEMENT - Signature Page

Each of the undersigned by their respective signatures hereunto acknowledges its receipt and review of this Amendment and hereby consents to the execution and delivery of, and the terms of, this Amendment and hereby ratifies and confirms their respective Guaranty and the obligations guarantied thereunder in all respects and for all purposes.

TBAC INVESTMENT TRUST
By:
	not in his/her individual capacity, but solely as Trustee
TBAC-TOREL, INC.
By:
	Name:	N. Roderick McGeachy, III
	Title:	President and Chief Executive Officer

SIXTH AMENDMENT TO CREDIT AND SECURITY AGREEMENT - Signature Page

EX-31.1

EXHIBIT 31.1

CERTIFICATION PURSUANT TO

RULE 13a-14(a)/15d-14(a)

(CHIEF EXECUTIVE OFFICER)

CERTIFICATION BY CHIEF EXECUTIVE OFFICER

I, N. Roderick McGeachy, III, certify that:

1.I have reviewed this quarterly report on Form 10-Q of Tandy Brands Accessories, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.   Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.   Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.   Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.   Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a.   All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b.   Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

November 14, 2012                                                                                     

/s/ N. Roderick McGeachy, III                

N. Roderick McGeachy, III

Chief Executive Officer

(Principal Executive Officer)

EX-31.2

EXHIBIT 31.2

CERTIFICATION PURSUANT TO

RULE 13a-14(a)/15d-14(a)

(PRINCIPAL FINANCIAL OFFICER)

CERTIFICATION BY CHIEF FINANCIAL OFFICER

I, Joseph C. Talley, certify that:

1.I have reviewed this quarterly report on Form 10-Q of Tandy Brands Accessories, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.   Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.   Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.   Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.   Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a.   All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b.   Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

November 14, 2012                                                                                                   

/s/ Joseph C. Talley                                

Joseph C. Talley

Chief Financial Officer

(Principal Financial Officer)

EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2012 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), we, N. Roderick McGeachy, III and Joseph C. Talley, Chief Executive Officer and Chief Financial Officer, respectively, of Tandy Brands Accessories, Inc. (the “Company”), certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1.The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

November 14, 2012                                                                                     

/s/ N. Roderick McGeachy, III                 

N. Roderick McGeachy, III

Chief Executive Officer

(Principal Executive Officer)

/s/ Joseph C. Talley                                  

Joseph C. Talley

Chief Financial Officer

(Principal Financial Officer)

XML

Note 7 - Earnings Per Share (Detail) - Potentially dilutive securities which could have had an antidilutive effect on our per share results (Parentheticals) (USD $)	3 Months Ended
	Sep. 30, 2012	Sep. 30, 2011
Minimum [Member]
Stock options price range	$ 1.40	$ 1.98
Maximum [Member]
Stock options price range	$ 15.60	$ 15.60

XML

Note 4 - Credit Arrangements

3 Months Ended

Sep. 30, 2012

Debt Disclosure [Text Block]

Note 4 - Credit Arrangements

We have a $35 million credit facility, which expires in August 2015.  On November 12, 2012, we, along with our Canadian subsidiary, and our lender entered into a Sixth Amendment to Credit and Security Agreement (the “Amendment”).  Pursuant to the Amendment, our lender formally waived our failure to satisfy a fixed charge coverage ratio covenant for the fiscal month ending September 30, 2012.  In addition, the Amendment contains amendments to the Credit Agreement, including, but not limited to:  (1) increasing the percentage used in the calculation to determine the interest rate for borrowings and letters of credit; (2) adding a fee if a specified fixed charge coverage ratio is not achieved by the end of fiscal year 2013; (3) monthly requirements for fixed charge coverage ratios; (4) fixing the minimum excess availability under the Credit Agreement; and (5) lowering the maximum capital expenditures (in the aggregate for any fiscal year).  At September 30, 2012, we had $1.0 million borrowing availability based on our accounts receivable and inventory levels, outstanding letters of credit totaling $794,000, and $24.4 million outstanding borrowings under the facility.  Borrowings and letters of credit bear interest at either the daily three-month LIBOR rate plus 4.25% (which percentage may be adjusted downward to 3.75% at the end of fiscal year 2013 upon achievement of fixed charge coverage ratio) or a fixed LIBOR rate for three months plus 4.25% (which percentage may be adjusted downward to 3.75% at the end of fiscal year 2013 upon achievement of fixed charge coverage ratio).

The credit facility is guaranteed by substantially all of our subsidiaries and is secured by substantially all of our assets and those of our subsidiaries.  The credit facility contains certain negative covenants and it requires the maintenance of a fixed charge coverage and minimum availability covenant, which, if not met, could adversely impact our liquidity.  The facility also limits our ability to engage in certain actions without the lender’s consent, including, repurchasing our common stock, entering into certain mergers or consolidations, guaranteeing or incurring certain debt, engaging in certain stock or asset acquisitions, paying dividends, making certain investments in other entities, prepaying debt, and making certain property transfers.  In addition, the facility contains customary representations and warranties and we have agreed to certain affirmative covenants, including reporting requirements.

The maximum line of credit under the credit facility, which includes the revolver and letters of credit, is $35 million.  The credit facility is asset-based and the available line of credit may be limited pursuant to certain borrowing base limitations, including (1) the amount of certain of our eligible accounts, (2) the amount of our eligible accounts with our largest customer, (3) the value of our eligible inventory, which is more specifically determined in part based on specific periods during our fiscal year, and (4) the amount of our borrowing base reserve.

On November 12, 2012, we obtained a waiver from our lender for violation of the fixed charge coverage covenant under our credit facility.  This violation was due to changes in the timing of customer orders, which ultimately impacted our ability to meet forecasts as established under the credit facility.  Excluding this lender waived covenant violation, we were in compliance with all covenants as of September 30, 2012.

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Note 3 - Business Segment Information

3 Months Ended

Sep. 30, 2012

Segment Reporting Disclosure [Text Block]

Note 3 - Business Segment Information

We sell our products through all major retail distribution channels throughout North America, including, without limitation, mass merchants, national chain stores, department stores, specialty stores, catalog retailers, golf pro shops, sporting goods stores, and the retail exchange operations of the United States military.  Our business segments are based on product categories: (1) accessories, which include belts, small leather goods and bags, and (2) gifts.  Each segment is measured by management based on income consisting of net sales less cost of goods sold, product distribution expenses, and royalties utilizing accounting policies consistent in all material respects with those described in Note 2 of the notes to consolidated financial statements included in our 2012 Annual Report on Form 10-K filed with the Securities and Exchange Commission.  No inter-segment revenue is recorded.  Assets, related depreciation and amortization, and selling, general and administrative expenses are not allocated to the segments.

The following table presents operating information by segment and reconciliation of segment operating income to our consolidated operating loss (in thousands):

	Three Months Ended September 30
	2012			2011
Net sales:
Accessories	$	19,988		$	21,512
Gifts		5,883			5,231
	$	25,871		$	26,743
Segment operating income:
Accessories	$	4,266		$	4,524
Gifts		121			815
		4,387			5,339
Selling, general and administrative expenses		(5,062	)		(5,327	)
Depreciation and amortization		(483	)		(583	)
Operating loss	$	(1,158	)	$	(571	)

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Unaudited Consolidated Statements of Operations and Comprehensive Loss (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended
	Sep. 30, 2012	Sep. 30, 2011
Net sales	$ 25,871	$ 26,743
Cost of goods sold	17,692	17,611
Gross margin	8,179	9,132
Selling, general and administrative expenses	8,854	9,120
Depreciation and amortization	483	583
Total operating expenses	9,337	9,703
Operating loss	(1,158)	(571)
Interest expense	(292)	(367)
Other income (expense)	36	(38)
Loss before income taxes	(1,414)	(976)
Income tax (benefit) expense	(129)	99
Net loss	(1,285)	(1,075)
Other comprehensive income (loss):
Currency translation adjustments	229	(404)
Total comprehensive loss	$ (1,056)	$ (1,479)
Loss per share:
Basic (in Dollars per share)	$ (0.18)	$ (0.15)
Diluted (in Dollars per share)	$ (0.18)	$ (0.15)
Weighted average common shares outstanding:
Basic (in Shares)	7,134	7,080
Diluted (in Shares)	7,134	7,080

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Note 1 - Accounting Principles

3 Months Ended

Sep. 30, 2012

Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block]

Note 1 - Accounting Principles

The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 8-03 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 our opinion, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included.

The preparation of our consolidated financial statements requires the use of estimates that affect the reported value of assets, liabilities, revenues, and expenses.  These estimates are based on historical experience and various other factors that we believe to be reasonable under the circumstances, the results of which form the basis for our conclusions.  We continually evaluate the information used to make these estimates as the business and economic environment change, including evaluation of events subsequent to the end of the quarter through the financial statements issuance date.  Actual results may differ from these estimates under different assumptions or conditions.  Such differences could have a material impact on our future financial position, results of operations, and cash flows.

The consolidated balance sheet at June 30, 2012 has been derived from the audited consolidated financial statements at that date, but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.  These interim unaudited consolidated financial statements should be read in conjunction with the financial statements and the notes thereto included in our 2012 Annual Report on Form 10-K filed with the Securities and Exchange Commission.

Historically, our first and second quarter sales and operating results reflect a seasonal increase compared to the third and fourth quarters of our fiscal year.  Sales and operating results for the first three months of fiscal 2013 are not necessarily indicative of the results that may be expected for the fiscal year ending June 30, 2013.

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Note 6 - Income Taxes (Detail) - The federal statutory income tax rate reconciles to our effective income tax rate as follows:	3 Months Ended
	Sep. 30, 2012	Sep. 30, 2011
Statutory rate	(34.00%)	(34.00%)
Deferred tax valuation allowance	36.60%	36.40%
Uncertain tax positions	(11.40%)	(4.90%)
Repatriation of foreign earnings	0.70%
Other, net	2.00%
	(9.10%)	10.10%
State and Foreign [Member]
State and foreign taxes net of federal tax benefit	(3.00%)	12.60%

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Note 7 - Earnings Per Share (Detail) - Potentially dilutive securities which could have had an antidilutive effect on our per share results	3 Months Ended
	Sep. 30, 2012	Sep. 30, 2011
Stock options (exercise prices per share: 2012 - $1.40 to $15.60; 2011 - $1.98 to $15.60)	155	308

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Note 2 - Fair Value Measurements

3 Months Ended

Sep. 30, 2012

Fair Value Disclosures [Text Block]

Note 2 - Fair Value Measurements

We measure fair values using unadjusted quoted prices in active markets (Level 1 inputs), quoted prices for similar instruments in active or inactive markets, or other directly-observable factors (Level 2 inputs), or inputs that are unobservable and significant to the fair value measurement (Level 3 inputs).  Our financial instruments consist primarily of cash, trade receivables and payables, and our credit facility.  The carrying values of cash and trade receivables and payables are considered to be representative of their respective fair values.  Our credit facility, which was entered into effective August 25, 2011 (and most recently amended August 29, 2012 and November 12, 2012), bears interest at floating market interest rates; therefore, we believe the fair value of amounts borrowed approximates the carrying value.  At September 30, 2012, June 30, 2012 and September 30, 2011, no other material assets or liabilities were measured at fair value.

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Unaudited Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Jun. 30, 2012	Sep. 30, 2011
Current assets:
Cash and cash equivalents	$ 176	$ 217	$ 229
Accounts receivable, net	11,703	7,042	12,501
Inventories, net	49,943	28,743	41,947
Inventory deposits	1,029	7,107	1,623
Other current assets	3,093	2,824	4,491
Total current assets	65,944	45,933	60,791
Property and equipment, net	5,439	5,474	6,321
Other assets:
Intangibles	3,936	4,115	4,728
Other assets	893	934	963
Total other assets	4,829	5,049	5,691
	76,212	56,456	72,803
Current liabilities:
Accounts payable	18,907	10,548	12,330
Accrued compensation	1,174	1,309	1,431
Accrued expenses	1,623	1,584	1,737
Credit facility	24,380	11,810	23,604
Total current liabilities	46,084	25,251	39,102
Other liabilities	4,218	4,290	4,261
Stockholders' equity:
Preferred stock, $1.00 par value, 1,000 shares authorized, none issued
Common stock, $1.00 par value, 10,000 shares authorized, 7,134 shares, 7,102 shares and 7,062 shares issued and outstanding, respectively	7,134	7,102	7,062
Additional paid-in capital	34,148	34,129	34,121
Accumulated deficit	(17,255)	(15,970)	(13,393)
Other comprehensive income	1,883	1,654	1,650
Total stockholders' equity	25,910	26,915	29,440
	$ 76,212	$ 56,456	$ 72,803

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Note 3 - Business Segment Information (Detail) - Summary operating information by segment and reconciliation of segment operating income to consolidated operating loss: (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Sep. 30, 2012	Sep. 30, 2011
Net sales:
Net sales	$ 25,871	$ 26,743
Segment operating income:
Selling, general and administrative expenses	(5,062)	(5,327)
Depreciation and amortization	(483)	(583)
Operating loss	(1,158)	(571)
Accessories [Member]
Net sales:
Net sales	19,988	21,512
Segment operating income:
Operating income (loss)	4,266	4,524
Gifts [Member]
Net sales:
Net sales	5,883	5,231
Segment operating income:
Operating income (loss)	121	815
Total [Member]
Net sales:
Net sales	25,871	26,743
Segment operating income:
Operating income (loss)	4,387	5,339
Operating loss	$ (1,158)	$ (571)

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Document And Entity Information	3 Months Ended
	Sep. 30, 2012	Nov. 12, 2012
Document and Entity Information [Abstract]
Entity Registrant Name	TANDY BRANDS ACCESSORIES INC
Document Type	10-Q
Current Fiscal Year End Date	--06-30
Entity Common Stock, Shares Outstanding		7,133,970
Amendment Flag	false
Entity Central Index Key	0000869487
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Filer Category	Smaller Reporting Company
Entity Well-known Seasoned Issuer	No
Document Period End Date	Sep. 30, 2012
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	Q1

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Note 4 - Credit Arrangements (Detail) (USD $)	Sep. 30, 2012	Jun. 30, 2012	Sep. 30, 2011
Line of Credit Facility, Maximum Borrowing Capacity	$ 35,000,000
Line of Credit Facility, Remaining Borrowing Capacity	1,000,000
Letters of Credit Outstanding, Amount	794,000
Line of Credit Facility, Amount Outstanding	24,380,000	11,810,000	23,604,000
Debt Instrument, Basis Spread on Variable Rate	4.25%
Adjusted Downward [Member]
Debt Instrument, Basis Spread on Variable Rate	3.75%
Includes Revolver and Letters of Credit [Member]
Line of Credit Facility, Maximum Borrowing Capacity	$ 35,000,000

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Unaudited Consolidated Balance Sheets (Parentheticals) (USD $)	Sep. 30, 2012	Jun. 30, 2012	Sep. 30, 2011
Preferred stock par value (in Dollars per share)	$ 1.00	$ 1.00	$ 1.00
Preferred stock, shares authorized	1,000	1,000	1,000
Preferred stock, shares issued
Common stock par value (in Dollars per share)	$ 1.00	$ 1.00	$ 1.00
Common stock, shares authorized	10,000	10,000	10,000
Common stock, shares issued	7,134	7,102	7,062
Common stock, shares outstanding	7,134	7,102	7,062

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Note 7 - Earnings Per Share

3 Months Ended

Sep. 30, 2012

Earnings Per Share [Text Block]

Note 7 - Loss Per Share

Our basic and diluted losses per common share are computed as follows (in thousands except per share amounts):

	Three Months Ended September 30
	2012			2011
Numerator for basic and diluted earnings per share:
Net loss	$	(1,285	)	$	(1,075	)
Denominator for basic and diluted earnings per share		7,134			7,080
Loss per common share	$	(0.18	)	$	(0.15	)
Loss per common share assuming dilution	$	(0.18	)	$	(0.15	)

Potentially dilutive securities which could have had an antidilutive effect on our per share results of operations were (in thousands except per share amounts):

	September 30
	2012		2011
Stock options (exercise prices per share: 2012 - $1.40 to $15.60; 2011 - $1.98 to $15.60)		155		308

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Note 6 - Income Taxes

3 Months Ended

Sep. 30, 2012

Income Tax Disclosure [Text Block]

The following presents components of our income tax (benefit) expense (in thousands):

	Three Months Ended September 30
	2012			2011
Federal and state	$	5		$	65
Deferred federal and state		(491	)		(349	)
Foreign		2			76
Uncertain tax positions		(161	)		(48	)
Deferred tax valuation allowance		516			355
	$	(129	)	$	99

The federal statutory income tax rate reconciles to our effective income tax rate as follows:

	Three Months Ended September 30
	2012			2011
Statutory rate		(34.0	)%		(34.0	)%
Deferred tax valuation allowance		36.6			36.4
State and foreign taxes net of federal tax benefit		(3.0	)		12.6
Uncertain tax positions		(11.4	)		(4.9	)
Repatriation of foreign earnings		0.7			-
Other, net		2.0			-
		(9.1	)%		10.1	%

At September 30, 2012 we had federal income tax net operating loss carryovers of approximately $52.7 million expiring in 2029 through 2031.  Our deferred tax valuation allowance was approximately $24.7 million.

During the first quarter of fiscal 2013, $161,000 of the liability previously recorded for uncertain state tax positions was released from the reserve as it no longer failed to meet the more-likely-than-not threshold.

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Note 7 - Earnings Per Share (Detail) - Our basic and diluted loss per common share are computed as follows (in thousands except per share a (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended
	Sep. 30, 2012	Sep. 30, 2011
Numerator for basic and diluted earnings per share:
Net loss (in Dollars)	$ (1,285)	$ (1,075)
Denominator for basic and diluted earnings per share (in Shares)	7,134	7,080
Loss per common share	$ (0.18)	$ (0.15)
Loss per common share assuming dilution	$ (0.18)	$ (0.15)

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Note 5 - Long-Term Incentive Awards (Detail) (USD $)	3 Months Ended
	Sep. 30, 2012
Share-based Compensation Arrangement by Share-based Payment Award, Shares Issued in Period (in Shares)	950,000
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period, Intrinsic Value (in Dollars per share)	$ 1.00
Defined Contribution Plan, Employers Matching Contribution, Annual Vesting Percentage	100.00%
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Forfeitures (in Shares)	100,000
Accounts Payable, Other (in Dollars)	$ 744,000
Performance Shares Comprised of Cash [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Settled In Cash Percentage	50.00%
Performance Shares Comprised of Phantom Shares [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Settled In Cash Percentage	50.00%
Phantom Share Units (PSUs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period, Intrinsic Value (in Dollars per share)	$ 1.40
Minimum [Member]
ShareBasedCompensationArrangementByShareBasedPaymentAwShare-Based Compensation Arrangement By Share Based Payment Award Percent Of Award BaseardPercentOfAwardBase	0.00%
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period (in Shares)	765,000
Maximum [Member]
ShareBasedCompensationArrangementByShareBasedPaymentAwShare-Based Compensation Arrangement By Share Based Payment Award Percent Of Award BaseardPercentOfAwardBase	200.00%
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period (in Shares)	950,000

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Note 6 - Income Taxes (Tables)

3 Months Ended

Sep. 30, 2012

Schedule of Components of Income Tax Expense (Benefit) [Table Text Block]

	Three Months Ended September 30
	2012			2011
Federal and state	$	5		$	65
Deferred federal and state		(491	)		(349	)
Foreign		2			76
Uncertain tax positions		(161	)		(48	)
Deferred tax valuation allowance		516			355
	$	(129	)	$	99

Schedule of Effective Income Tax Rate Reconciliation [Table Text Block]

	Three Months Ended September 30
	2012			2011
Statutory rate		(34.0	)%		(34.0	)%
Deferred tax valuation allowance		36.6			36.4
State and foreign taxes net of federal tax benefit		(3.0	)		12.6
Uncertain tax positions		(11.4	)		(4.9	)
Repatriation of foreign earnings		0.7			-
Other, net		2.0			-
		(9.1	)%		10.1	%

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Accounting Policies, by Policy (Policies)

3 Months Ended

Sep. 30, 2012

Basis of Accounting, Policy [Policy Text Block]

The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 8-03 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 our opinion, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included.

The preparation of our consolidated financial statements requires the use of estimates that affect the reported value of assets, liabilities, revenues, and expenses.  These estimates are based on historical experience and various other factors that we believe to be reasonable under the circumstances, the results of which form the basis for our conclusions.  We continually evaluate the information used to make these estimates as the business and economic environment change, including evaluation of events subsequent to the end of the quarter through the financial statements issuance date.  Actual results may differ from these estimates under different assumptions or conditions.  Such differences could have a material impact on our future financial position, results of operations, and cash flows.

The consolidated balance sheet at June 30, 2012 has been derived from the audited consolidated financial statements at that date, but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.  These interim unaudited consolidated financial statements should be read in conjunction with the financial statements and the notes thereto included in our 2012 Annual Report on Form 10-K filed with the Securities and Exchange Commission.

Historically, our first and second quarter sales and operating results reflect a seasonal increase compared to the third and fourth quarters of our fiscal year.  Sales and operating results for the first three months of fiscal 2013 are not necessarily indicative of the results that may be expected for the fiscal year ending June 30, 2013

Fair Value Measurement, Policy [Policy Text Block]

We measure fair values using unadjusted quoted prices in active markets (Level 1 inputs), quoted prices for similar instruments in active or inactive markets, or other directly-observable factors (Level 2 inputs), or inputs that are unobservable and significant to the fair value measurement (Level 3 inputs).  Our financial instruments consist primarily of cash, trade receivables and payables, and our credit facility.  The carrying values of cash and trade receivables and payables are considered to be representative of their respective fair values.  Our credit facility, which was entered into effective August 25, 2011 (and most recently amended August 29, 2012 and November 12, 2012), bears interest at floating market interest rates; therefore, we believe the fair value of amounts borrowed approximates the carrying value.  At September 30, 2012, June 30, 2012 and September 30, 2011, no other material assets or liabilities were measured at fair value

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Note 3 - Business Segment Information (Tables)

3 Months Ended

Sep. 30, 2012

Schedule of Segment Reporting Information, by Segment [Table Text Block]

	Three Months Ended September 30
	2012			2011
Net sales:
Accessories	$	19,988		$	21,512
Gifts		5,883			5,231
	$	25,871		$	26,743
Segment operating income:
Accessories	$	4,266		$	4,524
Gifts		121			815
		4,387			5,339
Selling, general and administrative expenses		(5,062	)		(5,327	)
Depreciation and amortization		(483	)		(583	)
Operating loss	$	(1,158	)	$	(571	)

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Note 7 - Earnings Per Share (Tables)

3 Months Ended

Sep. 30, 2012

Schedule of Calculation of Numerator and Denominator in Earnings Per Share [Table Text Block]

	Three Months Ended September 30
	2012			2011
Numerator for basic and diluted earnings per share:
Net loss	$	(1,285	)	$	(1,075	)
Denominator for basic and diluted earnings per share		7,134			7,080
Loss per common share	$	(0.18	)	$	(0.15	)
Loss per common share assuming dilution	$	(0.18	)	$	(0.15	)

Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share [Table Text Block]

	September 30
	2012		2011
Stock options (exercise prices per share: 2012 - $1.40 to $15.60; 2011 - $1.98 to $15.60)		155		308

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Note 6 - Income Taxes (Detail) - Significant components of our income tax expense (benefit): (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Sep. 30, 2012	Sep. 30, 2011
Deferred federal and state	$ (21)	$ 5
Uncertain tax positions	(161)	(48)
Deferred tax valuation allowance	516	355
	(129)	99
Federal and State [Member]
Federal and state	5	65
Deferred federal and state	(491)	(349)
Current And Deferred [Member]
Foreign	$ 2	$ 76

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Unaudited Consolidated Statements of Cash Flows (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Sep. 30, 2012	Sep. 30, 2011
Cash flows used for operating activities:
Net loss	$ (1,285)	$ (1,075)
Adjustments to reconcile net loss to net cash used for operating activities:
Deferred income taxes	(21)	5
Doubtful accounts receivable provision	10	10
Depreciation and amortization	547	645
Stock compensation expense	51	10
Amortization of debt costs	31	117
Other	(37)
Changes in assets and liabilities:
Accounts receivable	(4,626)	1,685
Inventories	(21,075)	(13,280)
Other assets	(381)	(955)
Inventory deposits	6,078	2,578
Accounts payable	7,958	4,714
Accrued expenses	(196)	(970)
Net cash used for operating activities	(12,946)	(6,516)
Cash flows used for investing activities:
Purchases of property and equipment	(325)	(308)
Sales of property and equipment	208
Net cash used for investing activities	(117)	(308)
Cash flows provided by financing activities:
Change in cash overdrafts	374	(489)
Change in restricted cash		1,416
Net borrowings under credit facility	12,570	5,694
Net cash provided by financing activities	12,944	6,621
Effect of exchange-rate changes on cash and cash equivalents	78	18
Net decrease in cash and cash equivalents	(41)	(185)
Cash and cash equivalents beginning of year	217	414
Cash and cash equivalents end of period	$ 176	$ 229

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Note 5 - Long-Term Incentive Awards

3 Months Ended

Sep. 30, 2012

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

Note 5 - Long-Term Incentive Awards

During the first quarter of fiscal 2013, we issued 950,000 performance units comprised 50% of cash and 50% of phantom shares of our common stock, to certain employees.  Each unit has a $1.00 assigned value and the number of phantom shares of common stock attributable to each award was determined based on the fair market value of our common stock on the date of grant, which was $1.40 per share at the close of trading on that day.  The units earned during the performance cycle (July 1, 2012 through June 30, 2014) vary from 0% to 200% of the units awarded based on our basic earnings per share for each of the two fiscal years ending June 30, 2014, excluding the effects of accounting principles changes, extraordinary items, recognized capital gains and losses and, as determined by our board of directors, one-time, non-operating items.  Assuming continued employment, if, at the end of the two-year performance cycle, at least the threshold performance level has been achieved, the performance units will cliff vest and, to the extent earned, will generally be settled in cash (if shares are available under our benefit plans, the Board may, in its discretion, settle the phantom shares attributable to an award in shares of our common stock).  Notwithstanding the foregoing, employees vest in a portion of units earned based on the number of fiscal years employed during the cycle upon death, disability, or normal (age 65) or early (age 55 and 15 years service) retirement and, upon a change of control, employees vest in 100% of the units awarded.  As of September 30, 2012, we expect 765,000 of the 950,000 units granted to vest (100,000 units were forfeited), which, based on the market price of our common stock on September 30, 2012, would be payable in cash equal to $744,000.

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Note 6 - Income Taxes (Detail) (USD $)	3 Months Ended
	Sep. 30, 2012
Deferred Tax Assets, Operating Loss Carryforwards, Subject to Expiration	$ 52,700,000
Deferred Tax Assets, Valuation Allowance	24,700,000
Income Tax Expense (Benefit), Continuing Operations, Adjustment of Deferred Tax (Asset) Liability	$ 161,000