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EXHIBIT 99
[TANDY BRANDS ACCESSORIES, INC. LOGO]
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TANDY BRANDS ACCESSORIES, INC. LIPPERT/HEILSHORN & ASSOC., INC.
J.S.B. Jenkins Harriet C. Fried
President/Chief Executive Officer Assistant Vice President
(817) 548-0090 (212) 838-3777
[email protected] [email protected] or www.lhai.com
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TANDY BRANDS ACCESSORIES, INC.
REPORTS SECOND QUARTER 2001 RESULTS
COMPANY ACQUIRES STAGG INDUSTRIES, INC.
ARLINGTON, TX, JANUARY 18, 2001 -- TANDY BRANDS ACCESSORIES, INC. (NASDAQ NM:
TBAC) today announced financial results for the second fiscal quarter ended
December 31, 2000.
For the second quarter of fiscal 2001, net sales totaled $56.8 million, as
compared to net sales of $57.6 million for the same period in fiscal 2000. Net
income for the second quarter totaled $2.8 million, or $0.51 per diluted share,
versus $4.9 million, or $0.83 per diluted share, for the same period last year.
In November of 1999, the company negotiated an early termination of its handbag
licensing agreement with Jones New York. Both the three- and six-month prior
year results included a one-time pre-tax benefit, including related costs, of
$1.0 million from the termination of this license agreement. Excluding the
benefit of the early license termination, net income for the second quarter of
fiscal 2000 was $4.3 million, or $0.73 per diluted share.
For the six months ended December 31, 2000, net sales totaled $110.9 million, as
compared to net sales of $110.8 million for the same period in the prior year.
Net income for the six months decreased to $4.9 million, or $0.87 per diluted
share, versus net income of $7.7 million, or $1.30 per diluted share for the
comparable six-month period in fiscal 2000. Excluding the benefit of the early
license termination, net income for the prior year six-month period was $7.0
million, or $1.20 per diluted share.
J.S.B. Jenkins, President and Chief Executive Officer, stated, "Although our
quarterly earnings were $0.03 below the guidance we provided last quarter, we
were generally pleased with our results for the quarter considering the
difficult retail economy the majority of retailers unexpectedly experienced
during the past holiday sales season. In addition to the difficult retail
environment, the other key factors that impacted Tandy Brands' results during
the second quarter of fiscal 2001 were a lower margin product sales mix and
higher selling, general and administrative expenses. Sales from our men's
division were below last year's levels due to the weak retail environment felt
industry-wide as well as retail customer consolidations and bankruptcies.
Although this shortfall was offset by strong women's product sales, these sales
were lower in margin than our historical men's margin."
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Mr. Jenkins continued, "We are always looking for opportunities for sales and
earnings growth. Today we are pleased to announce the acquisition of all
outstanding equity interests of Stagg Industries, Inc. for a cash purchase price
of $2.75 million, plus a contingent consideration of up to $250,000. Based in
Birmingham, Alabama, Stagg has a long-standing reputation in the sale of men's
and children's belts, neckwear, small leather goods and other accessories with
distribution in the department and specialty retail segments of the market. As
part of the transaction, Tandy Brands also repaid all of Stagg's outstanding
debt of approximately $2.8 million. For its fiscal year ended April 30, 2000,
Stagg generated sales of approximately $9.5 million. This acquisition, which we
anticipate to be immediately accretive to earnings, provides a strong complement
to our existing men's and children's accessory business and strengthens Tandy
Brands' position in department and specialty stores."
Mr. Jenkins concluded, "A real positive for the first six months was the
performance of our private label and Rolfs(R) handbag lines. With our current
handbag placement success, we are excited about the upcoming launch of a
Dockers(R) line of women's handbags, small leather goods and belts, which is on
schedule for July 2001. We continue to be optimistic about Tandy Brands' future
as we pursue growth opportunities through acquisitions such as our purchase of
Stagg Industries, innovative product introductions, expansion of new product
placement and development of additional distribution channels."
Investors and interested parties will have the opportunity to listen to
management's discussion of Tandy Brands' second quarter results in a conference
call to be held today, Thursday, January 18th, at 11:00 a.m. EST. The dial-in
number for the call is (888) 209-3793. For those who are unable to listen to the
live broadcast, an audio replay of the call will be available beginning at 1:00
p.m. EST on January 18th through 1:00 p.m. on Thursday, January 25th, via
telephone at (800) 6633-8284 or (858) 812-6440, reservation code #17623513.
Tandy Brands Accessories, Inc. designs, manufactures and markets fashion
accessories for men, women and children. Key product categories include belts,
wallets, handbags, suspenders, socks, scarves, cold weather and hair
accessories. Merchandise is sold under various national brand names as well as
private labels to all major levels of retail distribution, including the
Rolfs(R) e-commerce web site at www.rolfs.net.
Except for historical information contained herein, the statements in this
release are forward-looking and made pursuant to the safe harbor provisions of
the Private Securities Litigation Reform Act of 1995. Forward-looking statements
involve known and unknown risks and uncertainties, which may cause the Company's
actual results in future periods to differ materially from forecasted or
expected results. Those risks include, among other things, the competitive
environment in the industry in general and in the Company's specific market
areas, inflation, changes in costs of goods and services and economic conditions
in general and in the Company's specific market area. Those and other risks are
more fully described in the Company's filings with the Securities and Exchange
Commission.
(TABLES TO FOLLOW)
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TANDY BRANDS ACCESSORIES, INC.
Condensed Consolidated Statements of Income
(In thousands, except per share amounts)
(Unaudited)
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Three Months Ended Six Months Ended
December 31, December 31,
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2000 1999 2000 1999
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Net sales $ 56,757 $ 57,566 $ 110,941 $ 110,822
Cost of goods sold 36,567 35,901 71,855 70,273
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Gross margin 20,190 21,665 39,086 40,549
Selling, general and administrative expenses 13,437 12,920 26,943 25,587
Depreciation and amortization 1,134 866 2,192 1,699
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Total operating expenses 14,571 13,786 29,135 27,286
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Operating Income 5,619 7,879 9,951 13,263
Interest expense (1,000) (922) (2,021) (1,815)
Royalty income and early termination of
license agreement 17 1,043 34 1,074
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Income before provision for income taxes 4,636 8,000 7,964 12,522
Provision for income taxes 1,788 3,107 3,081 4,861
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Net income $ 2,848 $ 4,893 $ 4,883 $ 7,661
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Earnings per share $ 0.51 $ 0.84 $ 0.87 $ 1.32
Earnings per share--assuming dilution $ 0.51 $ 0.83 $ 0.87 $ 1.30
Common shares outstanding 5,578 5,802 5,595 5,799
Common shares outstanding--assuming dilution 5,582 5,868 5,604 5,871
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TANDY BRANDS ACCESSORIES, INC.
Condensed Consolidated Balance Sheets
(In thousands)
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December 31, June 30,
2000 2000
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ASSETS (Unaudited)
Current assets:
Cash and short-term investments $ 352 $ 661
Accounts receivable, net 40,166 31,105
Inventories 58,715 55,340
Other current assets 2,800 2,371
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Total current assets 102,033 89,477
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Fixed assets:
Property, plant and equipment, at cost 23,786 22,317
Accumulated depreciation (10,575) (9,305)
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Net property, plant and equipment 13,211 13,012
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Goodwill, less amortization 10,957 11,410
Other noncurrent assets 8,224 7,785
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Total other assets 19,181 19,195
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TOTAL ASSETS $ 134,425 $ 121,684
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LIABILITIES & STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 7,329 $ 6,547
Accrued expenses 5,973 4,004
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Total current liabilities 13,302 10,551
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Notes payable 46,925 41,075
Other noncurrent liabilities 189 184
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Total liabilities 60,416 51,810
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Stockholders' equity:
Common stock, $1 par value; 10,000,000 shares authorized; 5,817,406
shares and 5,808,968 shares issued as of December 31, 2000 and
June 30, 2000, respectively 5,818 5,809
Additional paid-in capital 22,353 22,426
Cumulative other comprehensive income (512) (479)
Retained earnings 48,444 43,560
Treasury stock, at cost (2,094) (1,442)
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Total stockholders' equity 74,009 69,874
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TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $ 134,425 $ 121,684
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