Tandy Brands Reports Fiscal 2013 Fourth Quarter and Year-End Earnings Results

Tandy Brands Reports Fiscal 2013 Fourth Quarter and Year-End Earnings Results

  *Provides update on current events
  *Announces signing new licensing agreement with Sean John®
  *Announces fourth quarter and full year fiscal 2013 results
  *Fiscal 2013 net sales of $114 million

DALLAS, Sept. 27, 2013 (GLOBE NEWSWIRE) -- Tandy Brands Accessories, Inc.
(Nasdaq:TBAC) today provided an update on current events and reported
financial results for its fourth quarter and fiscal year ended June 30, 2013.

Update on Current Events

The Company announced a new licensing agreement with Christian Casey, LLC to
design, develop and distribute belts, small leather goods and gift items under
the Sean John® label. The agreement includes U.S. and Canadian territories and
expires on December 31, 2016. The Company also announced it has reached an
agreement to extend its license with Haggar® to sell belts and small leather
goods in the U.S. and Canada through December 31, 2016.

"We are excited to go to market with Sean John® in our license portfolio and
that we've successfully extended Haggar® another three years," said Rob
McCarten, EVP and President - Tandy Brands. "We expect to deliver Sean John®
products to retailers in summer 2014. Our current Haggar® line is performing
well at retail with opportunities for volume growth at department stores."

"I am appreciative of, and pleased with, the strength of our team's
relationships with licensors and retailers," said Roger Hemminghaus, Chief
Executive Officer and Chairman of Tandy Brands. "In addition to these
licensing wins, we're working on several opportunities to grow our business in
key accounts during fiscal 2014 with our licensed portfolio and in private
label programs."

Fourth Quarter Results

Net sales for the fiscal 2013 fourth quarter were $20.6 million, a 4 percent
decrease over net sales of $21.6 million in the same period last year. The
sales decline was primarily attributable to lower sales prices on exited
products and the timing of replenishment orders to a significant customer.

Fourth quarter fiscal 2013 gross margin as a percentage of net sales declined
to 23.9 percent, compared to 30.2 percent in the fourth quarter of fiscal
2012.The decrease in gross margin percentage over the prior year period was
driven by a high mix of sales of inventory at net book value associated with
exited products in connection with the March 18, 2013 restructuring plan
("Restructuring Plan").

Total selling, general and administrative (SG&A) expense for the fourth
quarter of fiscal 2013 improved by $0.8 million over the prior year period to
$7.1 million.The 11 percent improvement was due to savings initiatives in
labor, facilities and distribution costs as expected in the Restructuring
Plan.

For the fourth quarter, the Company reported a net loss of $3.8 million, or
($0.53) per diluted share, compared to a net loss of $2.2 million, or ($0.32)
per diluted share, in the prior year period. Adjusted EBITDA loss and adjusted
net loss for the fiscal 2013 fourth quarter were flat when compared to the
same period in the prior year.

"Our fourth quarter results reflect the cost savings and lower margins we
expected in the Restructuring Plan as we continue to liquidate exited
products, while preparing for a successful holiday 2013," said Hemminghaus.

The Company reported future gift margins were expected to improve as a result
of savings from outsourcing and relocating distribution, lowering freight
costs, reducing product return privileges, limiting margin agreements with
retailers and locking ocean freight rates.

"As outlined in the Restructuring Plan, we expect holiday 2013 gifts margins
to be significantly improved when compared to the past two holiday seasons,"
said Hemminghaus.

Fiscal Year 2013 Results

Fiscal 2013 net sales were $114.0 million, down 3 percent, compared to $117.6
million for the prior year. The gifts segment's net sales increased by $5.5
million, or 18 percent, over the prior year due to increased sales under the
totes^® and Eddie Bauer^® licenses, primarily during holiday 2012. The
accessories segment net sales declined $9.1 million, or 11 percent, over the
prior period.This decline was driven by the planned exit of unprofitable
product categories which were sold at lower than normal prices, and lower
replenishment sales by our Canadian subsidiary.

For fiscal 2013, gross margin for the accessories segment declined from 33.5
percent to 24.3 percent.The fiscal 2013 gross margin includes a $5.4 million
inventory write-off associated with the Restructuring Plan, which included
liquidating low-volume products.Excluding this write-off, fiscal 2013 gross
margin would have been 31.3 percent.Accessories segment adjusted gross margin
percent was lower in fiscal 2013 primarily due to lower sales of previously
written down inventory, higher customer deductions and cost increases in
leather, metal and freight over fiscal 2012.

Gift segment margins declined to 17.1 percent from 28.7 percent.The fiscal
2013 gross margin includes a $1.8 million inventory write-off associated with
the Restructuring Plan.Excluding this write-off, gross margin would have been
21.9 percent in fiscal 2013.Gifts segment adjusted gross margins were lower
in fiscal 2013 due to increased sales mix of low margin items, significantly
higher retailer promotional activity, and higher freight costs over 2012.

Total SG&A expense for fiscal 2013 was reduced by $3.0 million over the prior
year. The 8 percent decline was primarily due to decreases in labor,
facilities, distribution costs, and professional services. Fiscal 2013 SG&A as
a percentage of net sales improved to 30.5 percent, compared to 32.1 percent
in the prior year.

The Company reported a net loss of $19.2 million for fiscal 2013, or a loss of
$2.69 per diluted share, compared to a net loss of $3.7 million, or a loss of
$0.52 per diluted share, in fiscal 2012.Adjusted net loss deteriorated to
$3.9 million compared to an adjusted net loss of $1.9 million in the prior
year.Adjusted EBITDA declined by $2.8 million to a $1.0 million adjusted
EBITDA loss compared to adjusted EBITDA of $1.8 million in the prior year. 

Financial Position

Net cash provided by operating activities was $0.8 million lower than fiscal
2012 primarily due to a $9.2 million change in inventory deposits due to
improved terms with gifts suppliers, later payments, and a smaller holiday
2013 gift order book as expected in the Restructuring Plan.This was offset by
a $3.8 million change in accounts payable, from key suppliers unfavorably
modifying terms before the Company closed new credit facilities in July 2013.

The balance on the credit facility was $9.1 million on June 30, 2013, of which
$0.8 million was used to fund inventory deposits for gifts inventory expected
to ship in the first half of fiscal 2014.

"As a consequence of our recent results, our external auditors modified their
audit opinion to include language regarding our ability to continue as a going
concern," said Hemminghaus."Our form 10-K filed today fully outlines our
initiatives to continue satisfying obligations and effectively managing
liquidity.Those initiatives include completing the Restructuring Plan,
executing the new lending agreements completed in July 2013, liquidating
unproductive assets and raising additional capital during fiscal 2014."

The Company confirmed their lender amended the credit agreement on September
26, 2013 to eliminate the going concern language in the audit opinion as an
event of default.

"We are pleased that our new lenders are supporting our efforts to execute our
business plan," said Hemminghaus.

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 capitalize on our restructuring initiatives, our
ability to return to profitability, our ability to service our debt, our
ability to comply with covenants contained in our financing arrangements, our
ability to secure additional or alternative capital, 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
Consolidated Statements Of Operations
(in thousands except per share amounts)
                                                                
                                 Three Months Ended    Twelve Months Ended
                                 June 30               June 30
                                 2013       2012       2013        2012
Net sales                         $20,643  $21,562  $ 114,010  $117,601
Cost of goods sold                15,254    15,045    81,825     79,718
Inventory write-down              464       --        7,158      --
                                 15,718    15,045    88,983     79,718
Gross margin                      4,925     6,517     25,027     37,883
Selling, general and              7,057      7,896     34,758     37,742
administrative expenses
Depreciation and amortization     384        506       1,818      2,205
Intangibles and held for sale     5         --        3,011      --
impairment
Restructuring charges             497       --        3,072      --
Total operating expenses          7,943     8,402     42,659     39,947
Operating loss                    (3,018)   (1,885)   (17,632)   (2,064)
Interest expense                  (734)     (203)     (1,741)    (1,159)
Other expense                     (172)     (31)      (107)      (44)
Loss before income taxes         (3,924)   (2,119)   (19,480)   (3,267)
Income tax (benefit) expense     (133)     119       (303)      385
Net loss                          $(3,791) $(2,238) $ (19,177) $(3,652)
Other comprehensive loss:                                        
Currency translation adjustments  (175)     (174)     (170)       (399)
Total comprehensive loss          $(3,966) $(2,412) $ (19,347) $(4,051)
Loss per share:                                                  
Basic                             $(0.53)  $(0.32)  $(2.69)   $(0.52)
Diluted                           $(0.53)  $(0.32)  $(2.69)   $(0.52)
Weighted average common shares outstanding:                        
Basic                             7,130     7,078     7,131      7,075
Diluted                           7,130     7,078     7,131      7,075

                                                                   

Tandy Brands Accessories, Inc. And Subsidiaries
Consolidated Balance Sheets
(in thousands)
                                                                   
                                                          June 30
                                                          2013      2012
Assets                                                              
Current assets:                                                     
Cash and cash equivalents                                  $518    $217
Accounts receivable, net                                   4,605    7,042
Inventories, net                                           21,361   28,743
Inventory deposits                                         837      7,107
Other current assets                                       1,757    2,824
Total current assets                                       29,078   45,933
Property and equipment, net                                4,373    5,474
Other assets:                                                       
Intangibles                                                1,100    4,115
Other assets                                               625      934
Total other assets                                         1,725    5,049
                                                          $35,176 $56,456
Liabilities And Stockholders' Equity                                
Current liabilities:                                                
Accounts payable                                           $9,294  $10,548
Accrued compensation                                       776      1,309
Accrued expenses                                           2,204    1,584
Accrued restructuring charges                             2,086    --
Credit facility                                            9,058    11,810
Total current liabilities                                  23,418   25,251
Other liabilities                                          4,150    4,290
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 and 7,102 shares issued and outstanding,      7,130    7,102
respectively
Additional paid-in capital                                 34,141   34,129
Accumulated deficit                                        (35,147) (15,970)
Other comprehensive income                                 1,484    1,654
Total stockholders' equity                                 7,608    26,915
                                                          $35,176 $56,456


Tandy Brands Accessories, Inc. And Subsidiaries
Consolidated Statements Of Cash Flows
(in thousands)
                                                                  
                                                        Year Ended June 30
                                                        2013       2012
Cash flows provided by operating activities:                       
Net loss                                                 $(19,177) $(3,652)
Adjustments to reconcile net loss to net                           
cash provided by operating activities:                             
Inventory write-down                                     7,158     --
Intangibles and held for sale impairments                3,011     --
Deferred income taxes                                    (215)     127
Doubtful accounts receivable provision                   174       802
Depreciation and amortization                            2,068     2,455
Stock compensation expense                               (130)     152
Amortization of debt costs                               389       196
Loss on sale of property and equipment                   111       20
Changes in assets and liabilities:                                 
Accounts receivable                                      2,251     6,375
Inventories                                              542       12
Other assets                                             154       380
Inventory deposits                                       6,270     (2,906)
Accounts payable                                         (1,461)   2,289
Accrued expenses and restructuring charges               2,935     (1,337)
Net cash provided by operating activities                4,080     4,913
Cash flows used for investing activities:                          
Purchases of property and equipment                      (592)     (664)
Sales of property and equipment                          391       192
Net cash used for investing activities                   (201)     (472)
Cash flows used for financing activities:                          
Change in cash overdrafts                                (737)     145
Change in restricted cash                                --        1,405
Net repayments under credit facility                     (2,752)   (6,091)
Net cash used for financing activities                   (3,489)   (4,541)
Effect of exchange-rate changes on cash and cash         (89)      (97)
equivalents
Net increase (decrease) in cash and cash equivalents     301       (197)
Cash and cash equivalents beginning of year              217       414
Cash and cash equivalents end of period                  $518     $217
Supplemental cash flow information:                                
Interest paid                                            $1,080   $1,146
Income taxes paid                                        $33      $144

               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 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 to the adjusted
EBITDA disclosures.

                                        Three Months Ended Year Ended
                                        June 30            June 30
                                        2013      2012   2013    2012
Net loss                                 $(3,791)  $(2,238) $(19,177) $(3,652)
Income taxes                             (133)     119      (303)     385
Interest expense                         734       203      1,741     1,159
Depreciation and amortization            384       506      1,818     2,205
Other expense                            172       31      107       44
Inventory write-down                     464       --     7,158     --
Restructuring charges                    443       --      2,369     --
Intangibles and held for sale            5         --      3,011     --
impairments
Investment in new licenses               189       --       1,439     597
Facilities consolidation costs           --        --      --        222
Bad debt expense                         --        (105)   --        802
Severance costs                          54       --    839      --
Adjusted EBITDA (loss)                   $(1,479)  $(1,484) $(998)    $1,762

We have provided our adjusted net 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 loss to the adjusted net loss disclosure.

                                       Three Months Ended Year Ended
                                       June 30             June 30
                                       2013    2012    2013    2012
Net loss                                $(3,791)  $(2,238)  $(19,177) $(3,652)
Inventory write-down                    464       --     7,158     --
Restructuring charges                   443       --       2,369     --
Intangibles and held for sale           5         --       3,011     --
impairments
Investment in new licenses              189       --        1,439     597
Facilities consolidation costs          --        --        --        222
Bad debt expense                        23        (105)    175       802
Severance costs                         54        --      839       --
Write-off of unamortized debt costs     267     --       267      98
Adjusted net loss                       $(2,346)  $(2,343)  $(3,919)  $(1,933)
Common shares outstanding assuming      7,130     7,078     7,131     7,075
dilution
Adjusted net loss per common share      ($0.33)   ($0.33)   ($0.55)   ($0.27)
assuming dilution

CONTACT: Tandy Brands Accessories, Inc.
         Roger Hemminghaus  
         Chief Executive Officer and Chairman
         214-519-5200   

         Investor Relations
         Chuck Talley
         EVP and Chief Financial Officer
         214-519-5200
 
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