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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.