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Tandy Brands Announces Restructuring Plan
Posted July 6, 2011
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Significantly Reduces SG&A
Exits Non-Core Product Categories
DALLAS -- Tandy Brands Accessories, Inc. (Nasdaq:TBAC) today announced a broad restructuring plan to exit non-core product lines, streamline operations and further reduce operating expenses. The Company expects to realize approximately $4 to $5 million in EBITDA improvement on an annualized basis, beginning in fiscal year 2012.
"We continue to aggressively pursue our turnaround strategy," said Rod McGeachy, President and Chief Executive Officer of Tandy Brands. "Through these restructuring measures, we will sharpen our focus on our most profitable core product categories, simplify our SKU offerings and significantly reduce SG&A expenses associated with exiting non-core product lines."
Key elements of the restructuring include:
• Exiting under-performing, non-core product categories that do not represent strategic components of our branded product portfolio
• Streamlining product development and selling efforts by focusing on our most profitable product categories, including belts, core small leather goods and the gifts business
• Reducing salaried employee headcount by approximately 15%
• Accelerating the recognition of future expenses under legacy infrastructure and contractual obligations
The Company estimates pre-tax charges related to the restructuring will be in the range of $4.5 to $5.5 million, and will include an inventory impairment associated with discontinued product categories, one-time termination benefits due to a reduction in salaried employee headcount, and other charges, all of which the Company plans to recognize in the 2011 fourth quarter.
"We believe these actions will accelerate our turnaround efforts to reach sustained long-term growth and profitability in fiscal 2012," continued Mr. McGeachy. "Tandy Brands is a stable platform with core competencies, and we expect our improved cost structure and strategic operational focus to drive positive overall performance and enhance our competitive position going forward."
About Tandy Brands
Tandy Brands is a leading designer and marketer of branded men's, women's and children's accessories, including belts, gifts and small leather goods. Merchandise is marketed under various national as well as private brand names through all major retail distribution channels.
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Tandy Brands Accessories, Inc.
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