Lower sales and onetime charges for its recent restructuring led Tandy Brands Accessories Inc. to more than double its fourth-quarter losses.
In the three months ended June 30, the Dallas-based accessories marketer registered a net loss of $8.4 million, or $1.21 a diluted share, versus a loss of $3.4 million, or 49 cents, in the final quarter of its 2010 fiscal year. Excluding $5.4 million in inventory write-downs and severance and other restructuring charges in the most recent quarter and as well as nonrecurring charges in the year-ago period, the loss was $3.5 million versus a loss of $2.9 million.
The company said in July that it would incur pretax charges of between $4.5 million and $5.5 million as it pared its assortment and its workforce to focus on more profitable lines of business and lower overhead.
Sales in the quarter dropped 18.9 percent to $23.2 million from $28.7 million in the year-ago quarter.
Although the company didn’t provide guidance for the first quarter or new fiscal year, Rod McGeachy, president and chief executive officer, said, “Our holiday 2011 gift bookings have increased by 30 percent over the prior year and we expect our [sales, general and administrative] expenses to be reduced another $6 million to $7 million over the prior year.”
Fourth-quarter SG&A fell $3 million, to $9.3 million from $12.3 million, and was down nearly $6 million for the full year, to $44.7 million from $50.5 million.
On Aug. 25, the company replaced its $27.5 million credit facility with a $35 million line from Wells Fargo. The extinguished facility was scheduled to expire in October 2012 while the new one will be in force until August 2015. The new arrangement is collateralized by “substantially all of the company’s assets” and bears interest of LIBOR plus 3.75 percent, which as of Aug. 25 equaled 4.07 percent.
For the full year, the net loss totaled $13.5 million, or $1.93 a diluted share, versus net income of $1.2 million or 17 cents, in fiscal 2010. Sales declined 12.8 percent to $123.8 million from $141.9 million. Gift segment net sales were up 3 percent to $22.5 million.
The company will discontinue quarterly conference calls after holding one to discuss fourth-quarter results on Thursday.
“I will be accessible to our shareholders to discuss our results, our stated strategy and business objectives,” McGeachy said. “This will allow our management team to focus their efforts on driving business results while still providing the information that is important to our shareholders.”