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Tandy Brands CEO disappoints with Q1 performance

26 Nov '07

2 min read

Tandy Brands Accessories Inc announced financial results for the quarter ended September 30, 2007.

For the first quarter of fiscal 2008, net sales were $39.5 million compared to $57.2 million in the first quarter of fiscal 2007.

This decline was due to the previously disclosed and continuing slowdown in replenishment orders from one of our largest customers as a result of their inventory management program and lower sales to other customers in a challenging retail environment.

The Company reported a net loss of $1.7 million, or ($0.25) per diluted share, compared to net income of $2.8 million, or $0.41 per diluted share, reported in the first quarter of fiscal 2007.

J.S.B. Jenkins, President and Chief Executive Officer, commented, "We are disappointed with our first quarter performance. We continue to face the challenges of the slowdown in orders from one of our key customers and a challenging retail environment.

However, we anticipate that the remainder of fiscal 2008 should benefit from the strategic initiatives we have implemented over the past 22 months.

Among these initiatives are the exit from low-margin categories and a focus on increasing our core lines of men's, women's and boys' accessories, and the move to shift manufacturing exclusively to our overseas partners which will result in lower production costs.

Moreover, fiscal 2008 should benefit from the roll-out of our three newest licenses, Eileen West, Goodyear Tire and Geno d'Lucca.

Across our operations, we see opportunities to add new doors, new products, and new licenses which will not only fuel our growth, but help to temper the seasonality of our business and improve our profitability," concluded Jenkins.

The Board of Directors approved a quarterly dividend of $0.04 per common share payable January 18, 2008 to shareholders of record at the close of business on December 31, 2007.

This is the Company's 18th consecutive quarterly dividend and the fourth at the $0.04 per share level which was increased on February 1, 2007.

At September 30, 2007 the Company did not meet the leverage ratio and the fixed charge coverage ratio covenants required by its $75 million unsecured revolving credit facility due to the pretax loss for the quarter. The lenders have granted a waiver for this non-compliance in conjunction with certain amendments to the facility.

Tandy Brands Accessories Inc

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