Tandy Brands Reports Fiscal 2013 Second Quarter Earnings Results and Provides Update on Current Events

Tandy Brands Reports Fiscal 2013 Second Quarter Earnings Results and Provides
Update on Current Events

  *Announces second quarter fiscal 2013 results
  *Receives waiver from senior lender for covenant violation
  *Signs non-binding term sheet for new credit facility

DALLAS, April 17, 2013 (GLOBE NEWSWIRE) -- Tandy Brands Accessories, Inc.
(Nasdaq:TBAC) today reported financial results for its fiscal second quarter
and six-month periods ended December 31, 2012 and provided an update on
current events.

Second Quarter Results

Net sales for the second quarter were up $2.5 million to $47.9 million over
the prior year second quarter. Gifts segment net sales increased by $3.8
million to $26.5 million due to increased holiday 2012 shipments of licensed
products such as totes®, Eddie Bauer®, and Sharper Image®. Net sales in the
accessories segment were $21.4 million for the second quarter, a decline of
$1.3 million from fiscal 2012. The decline reported in the accessories segment
net sales was a result of lower sales of exited product categories in the
current year, partially offset by new belts and small leather goods sales
under the Eddie Bauer® license.

"Although we met our gross shipment plan in our gifts segment and reported 17%
net sales growth during the quarter, our net sales were lower than
expectations due to higher than expected returns of unsold inventory and
unplanned promotional activity by some of our retail partners, which drove
higher than expected sales concessions," said Rod McGeachy, President and
Chief Executive Officer of Tandy Brands. "Meanwhile, our accessories segment
ongoing sales met our expectations at virtually flat to last year considering
the lower sales of exited product categories."

Second quarter fiscal 2013 gross margin as a percentage of net sales was 14.0
percent, which includes a $6.7 million non-cash inventory write-down to
accelerate liquidation of returned gift inventories and products exited in
connection with the Company's previously announced restructuring plan. The
Company does not expect any additional material inventory write-offs in
connection with the restructuring plan in fiscal 2013.

Excluding the impact of the $6.7 million inventory write-down in the current
year quarter, gross margin as a percentage of net sales was 27.9 percent,
compared to 32.3 percent in the second quarter of fiscal 2012. Accessories
segment gross margin, excluding the impact of the inventory write-down, was
31.8 percent, compared to 33.8 percentin the comparable prior year period.
This decline was due to lower sales of previously written-down inventory and
higher sales concessions to introduce new products. Gifts segment gross
margin, excluding the impact of the inventory write-down, was 24.9 percent,
compared to 30.8 percentin the comparable prior year period.This decline was
due to higher sales concessions, higher holiday season returns and higher
in-bound freight.

"We expect future margins to improve over second quarter fiscal 2013
percentages in both of our segments as a result of several initiatives under
way.We are changing freight providers and we are receiving lower rates on
same-sized containers.We do not expect to anniversary a $0.6 million
investment in retail space which reduced our net sales and gross margins in
the accessories segment this period.Finally, our restructuring initiatives
are expected to improve gifts segment margins by reducing our exposure to
sales concessions and outsourcing our gifts distribution center to reduce both
our variable and fixed expenses," said McGeachy.

Total selling, general and administrative (SG&A) expense for the fiscal 2013
second quarter was 3 percent higher than in the prior year period on higher
sales volume.

For the second quarter, the Company reported a net loss of $5.6 million, or
($0.79) per diluted share, compared to net income of $2.7 million, or $0.39
per diluted share, in the prior year period. Adjusted net income, which
excludes certain one-time items such as inventory write-downs, investments in
new licenses and severances, was $1.8 million compared to adjusted net income
of $3.0 million in the prior year second quarter.

Six-Month Results

Net sales for the six-month period ended December 31, 2012 were $73.8 million
compared to net sales of $72.2 million reported in the prior-year period.An
increase in net sales of the gifts segment to $32.4 million, up from $27.9
million was due to strong second quarter sales.Net sales for the accessories
segment declined by six percent to $41.4 million due to a $0.6 million
investment in retail space and lower sales of exited product categories in the
current year.

Gross margin as a percentage of net sales was 20.2 percent in the first half
of fiscal 2013.Excluding the inventory write-down during the current year
quarter, gross margin was 29.2 percent, compared to 33.0 percent in the first
half of fiscal 2012.The decline was primarily due to higher freight costs,
sales concessions, returns of unsold inventories, and a higher mix towards
customer-direct shipments in the gifts segment, and lower sales of previously
written-down inventory inthe accessories segment.

Total SG&A expense for the six-month period increased $0.1 millionto $20.1
million on higher variable selling costs which were partially offset by
decreases in compensation costs.

For the six-month period ended December 31, 2012, the Company reported a net
loss of $6.9 million, or ($0.97) per diluted share, compared to net income of
$1.7 million, or $0.23 per diluted share in the prior year period. Adjusted
net income decreased $1.5 million to $0.7 million compared to adjusted net
income of $2.2 million in the prior year period.

Financial Position

Working capital declined to $14.7 million at December 31, 2012 from $20.7
million at June 30, 2012 primarily due to the $6.7 million inventory
write-down.Receivables declined to $7.1 million from $16.4 million at
December 31, 2011 primarily due to an accelerated payment arrangement with the
Company's second largest customer which provided approximately $11.7 million
of cash in the current year second quarter.Inventories net of reserves were
$29.7 million at December 31, 2012.Inventories, excluding the $6.7 million
write-down, were $36.4 million compared to $32.7 million in the prior year
period due to carrying inventories for new accessories programs with spring
deliveries and higher levels of unsold gift products.

Current liabilities were $3.2 million lower than in the prior year.This
decline was driven by a $4.6 million pay-down on the credit facility ($10.7
million at December 31, 2012) due to the accelerated customer payment
arrangement, offset by $1.8 million in higher accounts payable for inventories
with spring deliveries.

At December 31, 2012, the Company had $848,000 net borrowing availability, or
$3.5 million excluding the minimum excess availability requirement of $2.7
million.As of April 15, 2013, the Company had $339,000 in net borrowing
availability, or $2.4 million excluding the amended minimum excess
availability requirement of $2.1 million, and $11.3 million in outstanding
borrowings under its senior credit facility.

Receives Waiver from Senior Lender

On April 11, 2013, the Company obtained a waiver from its senior lender which
waived the previously announced violation of the fixed charge coverage
covenant under its credit facility and amended certain terms of the credit
facility.

"Our current lender has continued supporting our operations while we have been
in violation of the monthly trailing twelve month fixed charge coverage
profitability covenant," said McGeachy."We have continued to ship goods to
our retailers without any service interruption and our suppliers have
continued to be supportive while we execute our liquidity enhancement plans."

Signs Non-binding Term Sheet

The Company announced it signed a non-binding term sheet with a lender who
could replace the Company's current lender on or before May 31, 2013.If
executed, terms under the proposed credit facility would improve liquidity
against the Company's current assets through:

  oHigher advance rates on inventories
  oHigher advance rates on accounts receivables
  oReduction of minimum excess availability
  oAdvances against held for sale idle real estate in Yoakum, Texas
  oAdvances against Gift segment holiday order book

"We are several weeks into the diligence process with a credible lender and,
although there can be no guarantees with respect to definitive documentation,
anticipate announcing a new credit facility by the end of May at the latest,"
said McGeachy.

The non-binding term sheet contains customary pre-close requirements with
respect to diligence investigations and any new credit facility is expected to
contain customary post-close covenants.Borrowings under the proposed credit
facility are expected to bear interest in the LIBOR plus 8.5% to LIBOR plus
11.3% range (or 9.3% to 12.0%) over a 24 month period.

"We expected the new facility would be more expensive than our previous
facility.However, it is important to us to balance the capital cost with
potential dilution to our shareholders," said McGeachy."The current term
sheet contains no dilutive features and we believe this new facility will
provide us the liquidity we need to execute our recently announced
restructuring initiatives."

Outlook

"Through the execution of our recently announced restructuring plans, we are
reducing our cost structure by $6 million to $7 million, reducing the risk
associated with our gifts business and focusing on our most profitable core
brands and customers," commented McGeachy."We believe the execution of these
initiatives will allow us to strengthen our competitive position and
significantly improve profitability in fiscal 2014."

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,
our ability to successfully complete our proposed new credit facility, our
ability to secure additional or alternative capital, our ability to
successfully implement certain restructuring initiatives, general economic and
business conditions, competition in the accessories and gifts markets,
acceptance of the Company's product offerings and designs, continued good
relationships with our suppliers, 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
(in thousands except per share amounts)
                                                                 
                                                                 
                                   Three Months Ended   Six Months Ended
                                    December 31          December 31
                                    2012       2011      2012       2011
Net sales                            $47,914  $45,434 $73,785  $72,177
Cost of goods sold                   34,530    30,774   52,222    48,385
Inventory write-down                 6,694     --       6,694     --
                                    41,224    30,774   58,916    48,385
Gross margin                         6,690     14,660   14,869    23,792
Selling, general and administrative  11,261    10,909   20,115    20,029
expenses
Depreciation and amortization        485       567      968       1,150
Total operating expenses             11,746    11,476   21,083    21,179
Operating (loss) income              (5,056)   3,184    (6,214)   2,613
Interest expense                     (479)     (382)    (771)     (749)
Other (expense) income               (31)      27       5         (11)
(Loss) income before income taxes   (5,566)   2,829    (6,980)   1,853
Income tax expense (benefit)         60        103      (69)      202
Net (loss) income                    $(5,626) $2,726  $(6,911) $1,651
Other comprehensive (loss) income:                                
Currency translation adjustments     (51)       25        178        (379)
Total comprehensive (loss) income    (5,677)    2,751     (6,733)    1,272
(Loss) income per share:                                          
Basic                                (0.79)     0.39      (0.97)     0.23
Diluted                              (0.79)     0.39      (0.97)     0.23
Weighted average common shares                                    
outstanding:
Basic                                7,130      7,064     7,132      7,072
Diluted                              7,130      7,076     7,132      7,087
                                                                 

Tandy Brands Accessories, Inc. And Subsidiaries
Unaudited Consolidated Balance Sheets
(in thousands)
                                                                
                                            December 31 June 30   December 31
                                            2012        2012      2011
Assets                                                           
Current assets:                                                  
Cash and cash equivalents                    $606      $217    $994
Accounts receivable, net                     7,098      7,042    16,352
Inventories, net                             29,706     28,743   32,715
Inventory deposits                           298        7,107    281
Other current assets                         2,794      2,824    3,711
Total current assets                         40,502     45,933   54,053
Property and equipment, net                  5,240      5,474    5,954
Other assets:                                                    
Intangibles                                  3,757      4,115    4,519
Other assets                                 849        934      937
Total other assets                           4,606      5,049    5,456
                                            $50,348   $56,456 $65,463
Liabilities And Stockholders' Equity                             
Current liabilities:                                             
Accounts payable                             $11,807   $10,548 $9,997
Accrued compensation                         982        1,309    1,448
Accrued expenses                             2,329      1,584    2,268
Credit facility                              10,687     11,810   15,290
Total current liabilities                    25,805     25,251   29,003
Other liabilities                            4,310      4,290    4,257
Stockholders' equity:                                            
Preferred stock, $1.00 par value, 1,000      --         --       --
shares authorized, none issued
Common stock, $1.00 par value, 10,000 shares                     
authorized, 7,130 shares,
7,102 shares and 7,067 shares issued and     7,130      7,102    7,067
outstanding, respectively
Additional paid-in capital                   34,152     34,129   34,129
Accumulated deficit                          (22,881)   (15,970) (10,667)
Other comprehensive income                   1,832      1,654    1,674
Total stockholders' equity                   20,233     26,915   32,203
                                            $50,348   $56,456 $65,463
                                                                

Tandy Brands Accessories, Inc. And Subsidiaries
Unaudited Consolidated Statements Of Cash Flows
(in thousands)
                                                                    
                                                                    
                                                          Six Months Ended
                                                          December 31
                                                          2012       2011
Cash flows provided by operating activities:                         
Net (loss) income                                          $(6,911) $1,651
Adjustments to reconcile net (loss) income to net                    
cash provided by operating activities:                               
Inventory write-down                                       6,694     --
Deferred income taxes                                      (22)      71
Doubtful accounts receivable provision                     176       17
Depreciation and amortization                              1,094     1,275
Stock compensation expense                                 60        25
Amortization of debt costs                                 61        141
Other                                                     (7)       --
Changes in assets and liabilities:                                   
Accounts receivable                                        (202)     (2,115)
Inventories                                                (7,575)   (3,969)
Other assets                                               (76)      (222)
Inventory deposits                                         6,808     3,920
Accounts payable                                           1,978     2,474
Accrued expenses                                           406       (445)
Net cash provided by operating activities                  2,484     2,823
Cash flows used for investing activities:                            
Purchases of property and equipment                        (495)     (363)
Sales of property and equipment                            178       --
Net cash used for investing activities                     (317)     (363)
Cash flows used for financing activities:                            
Change in cash overdrafts                                  (737)     (592)
Change in restricted cash                                  --        1,434
Net repayments under credit facility                       (1,123)   (2,633)
Net cash used for financing activities                     (1,860)   (1,791)
Effect of exchange-rate changes on cash and cash           82        (89)
equivalents
Net increase in cash and cash equivalents                  389       580
Cash and cash equivalents beginning of year                217       414
Cash and cash equivalents end of period                    $606     $994
                                                                    

               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 (loss) income
before interest, taxes, depreciation and amortization, investments in new
licenses and other 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 (loss) income to the
adjusted EBITDA disclosures.

                                        Three Months Ended Six Months Ended
                                        December 31        December 31
                                        2012     2011  2012    2011
Net (loss) income                        $(5,626)   $2,726  $(6,911)  $1,651
Income taxes                             60         103     (69)      202
Interest expense                         479        382     771       749
Depreciation and amortization            485        567     968       1,150
Other income (expense)                   31        (27)   (5)     11
Inventory write-down                     6,694      --     6,694     --
Investment in new licenses               661        205     756       384
Severances and other restructuring costs 40        86     111      86
Adjusted EBITDA                          $2,824     $4,042  $2,315    $4,233

We have provided our adjusted net (loss) income 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 (loss) income to the adjusted net (loss) income
disclosure.

                                          Three Months Ended Six Months Ended
                                          December 31        December 31
                                          2012     2011  2012    2011
Net (loss) income                          $(5,626)   $2,726  $(6,911)  $1,651
Inventory write-down                       6,694      --     6,694     --
Investment in new licenses                 661        205     756       384
Severances and other restructuring costs   40        86     111      86
Write-off of unamortized debt costs        --       --     --       98
Adjusted net income                        $1,769     $3,017  $650      $2,219
Common shares outstanding assuming         7,130      7,076   7,132     7,087
dilution
Adjusted net income per common share       $0.25      $0.43   $0.09     $0.31
assuming dilution

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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