Tandy Brands Reports Fiscal 2013 First Quarter Earnings Results

Tandy Brands Reports Fiscal 2013 First Quarter Earnings Results

  *First quarter adjusted net loss increased $0.2 million on $0.9 million
    lower net sales
  *Net sales for Gifts segment up $0.7 million or 12%
  *Gifts segment holiday 2012 order book up $7.2 million or 26%

DALLAS, Nov. 14, 2012 (GLOBE NEWSWIRE) -- Tandy Brands Accessories, Inc.
(Nasdaq:TBAC) today reported financial results for its first quarter ended
September 30, 2012.

Net sales for the first quarter of fiscal 2013 were $25.9 million, a decrease
of three percent versus the prior year first quarter. Accessories segment net
sales were $20.0 million for the first quarter, a decline of $1.5 million from
the same quarter of fiscal 2012. The decline reported in the accessories
segment net sales was a result of higher sales of exited product categories in
the prior year period, offset slightly by higher levels of replenishment
orders by the Company's largest customer during the current year period. Net
sales for the gifts segment were $5.9 million for the first quarter of fiscal
2013, an increase of 12 percent over the prior year, primarily due to
increased holiday shipments.

First quarter fiscal 2013 gross margin as a percentage of net sales was 31.6
percent, compared to 34.1 percent in the first quarter of fiscal 2012.
Accessories segment gross margin remained consistent to the prior year period
at 33.9 percent.Gifts segment gross margin was 24.0 percent, compared to 35.3
percent in the first quarter of fiscal 2012.The decrease in gift gross margin
percentage was driven by higher freight costs, higher customer deductions, and
higher volume of customer-direct shipments.Customer-direct shipments
contribute lower gross margins due to being shipped directly from the
Company's suppliers to the Company's customers, avoiding the associated
selling, general and administrative (SG&A) costs.Total SG&A expense for the
first quarter of fiscal 2013 declined three percent to $8.9 million following
the three percent reduction in net sales.

"Our first quarter results have us set-up for a good first half," said Rod
McGeachy, President and Chief Executive Officer of Tandy Brands."We expect
our holiday 2012 gift net sales to be up $6.0 to $8.0 million over the
comparable prior year first half.This growth is driven by execution of our
licensing strategies.Specifically, our Eddie Bauer license has contributed
meaningful growth in sales of our gifts, belts and small leather goods."

For the first quarter, the Company reported a net loss of $1.3 million, or
$0.18 per diluted share, compared to a net loss of $1.1 million, or $0.15 per
diluted share, in the prior year period. Adjusted net loss increased $0.2
million to $1.2 million compared to adjusted net loss of $1.0 million in the
prior year first quarter.

Financial Position

The Company ended the 2013 first quarter with $19.9 million in working
capital, including $11.7 million of receivables, $49.9 million of inventories,
and borrowings of $24.4 million.

Net cash used for operating activities was $6.4 million higher than the prior
year period primarily due to higher gift inventory on hand to fulfill
increased customer orders that will ship in the second quarter of fiscal
2013.Net cash provided by financing activities was $6.3 million higher than
the prior year period due to higher borrowings for inventory purchases to
support growth in the gifts segment and the one-time cash inflows generated in
the prior year for the commencement of a factoring facility entered into with
the Company's largest customer.

"Our inventories and current liabilities peaked as we expected," said
McGeachy."As we enter the second quarter, our cash cycle will improve and
current liabilities will be significantly reduced."

Outlook

"As we sit in the midst of our peak selling season, I remain confident that we
will produce meaningful improvement in our bottom-line in fiscal 2013," said
McGeachy.

About Tandy Brands

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

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. The Company has based
these forward-looking statements on its current expectations about future
events, estimates and projections about the industry in which it operates.
Forward-looking statements are not guarantees of future performance. 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 the Company's product offerings and designs,
issues relating to distribution, the termination or non-renewal of any
material licenses, the Company's ability to maintain proper inventory levels,
and a significant decrease in business from or loss of any major customers or
programs. Those and other risks are more fully described in the Company's
filings with the Securities and Exchange Commission. The forward-looking
statements included in this release 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, the Company does not
undertake, and specifically declines, 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 release, whether as
a result of new information, future events, changes in assumptions, or
otherwise.

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

Tandy Brands Accessories, Inc. And Subsidiaries                   
Unaudited Consolidated Balance Sheets                             
(in thousands)                                                    
                                                               
                                          September 30 June 30   September 30
                                          2012         2012      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   7,134       7,102    7,062
outstanding, respectively
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

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       78        18        
equivalents
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     

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

                                      

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

                                        Three Months Ended
                                        September 30
                                        2012    2011
Net loss                                 $(1,285) $(1,075)
Income taxes                             (129)   99
Interest expense                         292      367
Depreciation and amortization            483      583
Other (income) expense                   (36)     38
Investment in new licenses               95      --
Severances and other restructuring costs 71      --
Adjusted EBITDA (loss)                   $(509)  $12
                                                 
                                                 

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

                                                    Three Months Ended
                                                    September 30
                                                    2012    2011
Net loss                                             $(1,285) (1,075)
Investment in new licenses                           95      --
Severances and other restructuring costs             71      --
Property sale gain                                   (37)    --
Write-off unamortized debt costs                     --      98
Adjusted net loss                                    $(1,156)  $(977)
Common shares outstanding assuming dilution          7,134    7,080
Adjusted net loss per common share assuming dilution ($0.16)  ($0.14)

CONTACT: Tandy Brands Accessories, Inc.
         Rod McGeachy
         President and Chief Executive Officer
         214-519-5200
        
         Investor Relations
         Chuck Talley
         Chief Financial Officer
         214-519-5200
 
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