The Company expects net revenues to decline in fiscal 2014 while reducing operating expenses by a significantly greater percentage. The Company estimates pre-tax charges related to the restructuring will be in the range of $10.6 to $13.8 million as follows:
|Second Fiscal Quarter||Third Fiscal Quarter||Fourth Fiscal Quarter|
|December 31, 2012||March 31, 2013||June 30, 2013|
|Inventory write-off||$6.0 - $7.0 million||$ -||$ -|
|Severances||$ -||$0.6 - $0.7 million||$ -|
|Intangibles impairment||$ -||$2.0 - $3.5 million||$ -|
|Other charges||$ -||$1.6 - $2.0 million||$0.4 to $0.6 million|
|Total||$6.0 - $7.0 million||$4.2 - $6.2 million||$0.4 to $0.6 million|
"Tandy Brands has a stable core business and we expect our improved cost structure and strategic operational focus to drive positive overall performance and enhance our competitive position going forward," continued Mr. McGeachy.
Updates on negotiations with senior lender to address covenant violation
Tandy Brands confirmed it is in breach of the fixed-charge coverage covenant and is in negotiations with its senior lender to address this violation."Today, although we are in violation of the fixed-charge coverage covenant, we remain in compliance with the liquidity covenants with our senior lender and we expect to obtain a waiver for this covenant violation in the next few weeks," said McGeachy.