##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 Form 10-K
 Annual Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
 For the fiscal year ended June 30, 2007
    
    Commission File Number 0-18927
 TANDY BRANDS ACCESSORIES, INC.
  Delaware
(State or other jurisdiction of 
incorporation or organization)
    
    75-2349915
(I.R.S. Employer
Identification Number)
 690 East Lamar Boulevard, Suite 200, Arlington, TX 76011
 817-548-0090
 Common Stock, Par Value $1.00 Per Share
 None
  o þ
  o þ
  þ o
  þ
  o o þ
  o þ
   DOCUMENTS INCORPORATED BY REFERENCE




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##### 



TABLE OF CONTENTS
 PART IItem 1
    
    Business
    
    
    3Item 1A
    
    Risk Factors
    
    
    11Item 1B
    
    Unresolved Staff Comments
    
    
    14Item 2
    
    Properties
    
    
    14Item 3
    
    Legal Proceedings
    
    
    14Item 4
    
    Submission Of Matters To A Vote Of Security Holders
    
    
    14PART IIItem 5
    
    Market For Registrants Common Equity, Related Stockholder Matters And Issuer Purchases Of Equity Securities
    
    
    15Item 6
    
    Selected Financial Data
    
    
    18Item 7
    
    Managements Discussion and Analysis Of Financial Condition And Results Of Operation
    
    
    18Item 7A
    
    Quantitative And Qualitative Disclosures About Market Risk
    
    
    26Item 8
    
    Financial Statements And Supplementary Data
    
    
    27Item 9
    
    Changes In And Disagreements With Accountants On Accounting And Financial Disclosure
    
    
    45Item 9A
    
    Controls And Procedures
    
    
    45Item 9A(T)
    
    Controls And Procedures
    
    
    45Item 9B
    
    Other Information
    
    
    45PART IIIItem 10
    
    Directors, Executive Officers And Corporate Governance
    
    
    46Item 11
    
    Executive Compensation
    
    
    46Item 12
    
    Security Ownership Of Certain Beneficial Owners And Management And Related Stockholder Matters
    
    
    46Item 13
    
    Certain Relationships And Related Transactions, And Director Independence
    
    
    46Item 14
    
    Principal Accountant Fees And Services
    
    
    47PART IVItem 15
    
    Exhibits And Financial Statement Schedules
    
    
    47SIGNATURES
    
    
    
    
    48
 EXHIBIT INDEX2002 Omnibus Plan Amendment No. 1
    
    Exhibit 10.37Fiscal 2008 Compensation Summaries
    
    Exhibit 10.38List of Subsidiaries
    
    Exhibit 21.1Consent of Ernst & Young LLP
    
    Exhibit 23.1Certification Pursuant to Rule 13a-14(a)/15d-14(a) (Chief Executive Officer)
    
    Exhibit 31.1Certification Pursuant to Rule 13a-14(a)/15d-14(a) (Chief Financial Officer)
    
    Exhibit 31.2Section 1350 Certifications  CEO & CFO
    
    Exhibit 32.1Amendment No. 1 to 2002 Omnibus PlanFiscal 2008 Compensation SummariesList of SubsidiariesConsent of Ernst & Young LLPCertification Pursuant to Rule 13a-14(a)/15d-14(a) - CEOCertification Pursuant to Rule 13a-14(a)/15d-14(a) - CFOSection 1350 Certifications
  2




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FORWARD-LOOKING STATEMENTS
 This Annual Report on Form 10-K , including the Managements Discussion And Analysis Of Financial
Condition And Results Of Operation, contains forward-looking statements regarding future events
and our future results that are subject to the safe harbors created under the Securities Act of
1933 and the Securities Exchange Act of 1934. Words such as expects, anticipates, intends,
plans, believes, seeks, estimates, continue, may, variations of such words, and similar
expressions are intended to identify forward-looking statements. In addition, any statements that
refer to projections of our future financial performance, our anticipated growth and trends in our
business, and other characterizations of future events or circumstances are forward-looking
statements. We have based these forward looking statements on our current expectations about
future events, estimates and projections about the industry in which we operate. These statements
are not guarantees of future performance and involve risks, uncertainties and assumptions that are
difficult to predict. Our actual results may differ materially from those suggested by these
forward-looking statements for various reasons, including those identified under Risk Factors on
page 11. Given these risks and uncertainties, you are cautioned not to place undue reliance on
forward-looking atements. The forward-looking statements included in this report are made only
as of the date hereof. Except as required under federal securities laws and the rules and
regulations of the United States Securities and Exchange Commission, we do not undertake, and
specifically decline, any obligation to update any of these statements or to publicly announce the
results of any revisions to any forward-looking statements after the distribution of this report,
whether as a result of new information, future events, changes in assumptions, or otherwise.
 
 PART I
 
 ITEM 1  BUSINES
 What do we do?
 ® ®  ® ® ® ® ® ® ® ® ® ® ® ® ® ® ®   
 What are our product lines?
  Belts
    
    
    60.3
    %Small leather goods
    
    
    20.5Gift accessories
    
    
    10.4Handbags
    
    
    1.6Other products
    
    
    7.2100.0
    %
  3




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##### Table of Contents



Belts
   Small Leather Goods
   Gift Accessories
  Other Products
  2007
    
    
    2006
    
    
    2005Handbags and hats
    
    $
    3.1
    
    
    $
    8.1
    
    
    $
    10.6Socks
    
    
    
    
    
    
    14.0
    
    
    
    12.1Cold weather goods
    
    
    
    
    
    
    8.4
    
    
    
    6.4Other products
    
    
    14.1
    
    
    
    16.7
    
    
    
    17.7$
    17.2
    
    
    $
    47.2
    
    
    $
    46.8
 What brands do we sell?
  Private brands
    
    $
    106.1
    
    
    
    54.1
    %Proprietary brands
    
    
    57.3
    
    
    
    29.3Licensed brands
    
    
    32.4
    
    
    
    16.6$
    195.8
 4




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##### Table of Contents



Private Brand Products
  ® ® ® ® ® ® ®
 License Agreements
 ® ®  ® ® ®  ®
  
    
    Eileen West  a June 2006 license agreement grants us the exclusive right to
design, manufacture, and sell womens handbags, personal leather goods such as wallets, and
belts in the United States and Canada beginning in the fall of 2007.
    
    Geno  and Geno DLucca  a June 2007 license agreement grants us the
exclusive right to market high end belts, small leather goods, sandals, and other products
in North America beginning in the fall of 2007.
    
    Goodyear  a May 2007 license agreement gives us the nonexclusive right to
market a gift line of The Goodyear Tire & Rubber Company in the United States, Canada, and
Mexico beginning in the spring of 2008.
 ®
 Proprietary Brands
 ® ® ® ® ® ® ® ®
 Distribution Of Our Key Brands
  Brand
    
    Distribution Channel
    
    ProductsDockers®
    
    National chain stores
Department stores
Specialty stores
    
    Belts
Handbags
Small leather goodsLevis®
    
    National chain stores
Department stores
Specialty stores
    
    Belts
Small leather goods
 5




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##### Table of Contents



Brand
    
    Distribution Channel
    
    ProductsLevi Strauss Signature
    
    Mass merchants
National chain stores
    
    Belts
Small leather goods
Casual multipurpose bagsJones New York®
    
    Department stores
Specialty stores
    
    Belts
Small leather goodsRolfs®
    
    National chain stores
Department stores
Specialty stores
    
    Small leather goodsHaggar®
    
    National chain stores
Department stores 
Catalogs
    
    Belts
Small leather goodsCanterbury®
    
    Specialty stores
Golf pro shops
    
    Belts
Small leather goodsPrince Gardner®
    
    National chain stores
Specialty stores
    
    Small leather goodsPrincess Gardner®
    
    National chain stores
Specialty stores
    
    Small leather goodsAmity®
    
    Mass merchants
National chain stores
    
    Small leather goodsColetta®
    
    Mass merchants
National chain stores
    
    HandbagsAccessory Design Group®
    
    Mass merchants
National chain stores
    
    Belts
Womens accessoriesTiger®
    
    Mass merchants
National chain stores
    
    BeltsStagg®
    
    Mass merchants
National chain stores
    
    Belts
Small leather goodsETON®
    
    Mass merchants
National chain stores
Department stores
Specialty stores
    
    Gift accessoriestotes®
    
    National chain stores
Department stores
Specialty stores
    
    Gift accessoriesSurplus®
    
    National chain stores
    
    Belts
Small leather goods
Gift accessoriesEileen West
    
    Department stores
Specialty stores
    
    Belts
Small leather goods
HandbagsGeno DLucca
    
    Department stores
    
    Belts
Small leather goods
SandalsGoodyear
    
    Automobile and tire stores 
Mass merchants
    
    Gift accessories
 6




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What are our channels of distribution?
  Department stores
    
    E-commerce websitesSpecialty chains
    
    National chain storesMass merchants
    
    Outlet storesUnited States military retail exchange operations
    
    Sporting goods storesGolf pro shops
    
    Individual specialty storesSupermarkets
    
    Catalog retailersUniform stores
    
    Shoe storesTV shopping networks
    
    Wholesale clubsDrug stores
    
    Premium marketsOffice supply stores
    
    Automobile and tire stores
 Who are our customers?
  Department Stores
    
    National Chains
    
    Mass MerchantsKohls
    
    JCPenney (U.S. and Mexico)
    
    Wal-Mart (U.S., Canada
and Mexico)Bon-Ton/Carsons
    
    Stein Mart
    
    TargetBelk
    
    Casual Male
    
    Fred MeyerMacys
    
    AAFES
    
    Shopko/PamidaStage
    
    Goodys
    
    Zellers (Canada)Dillards
    
    Tractor Supply
    
    MeijerBoscovs
    
    Sears (U.S. and Canada)
    
    K MartGottschalks
    
    MervynsThe Bay (Canada)
    
    Moores (Canada)Nordstrom
    
    MarshallsMens WearhouseTJ Maxx
  How do we maintain strong customer relations?
   7




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Did we have firm backlog orders for fiscal 2008 and the prior fiscal year?
  How do we merchandise and develop our products?
   What is our competitive position?
  
    
    trends toward more casual attire which has increased demand for accessories outside the
traditional dress category;
    
    increased consumer awareness of branded accessories as a fashion and lifestyle statement; and
    
    a desire for newness and change in accessories styles.
   Product Segment
    
    Primary CompetitorsMens and boys belts
    
    Swank, Randa/Humphreys, Cipriani, and FossilMens wallets
    
    Buxton, Randa/Humphreys, Mundi, Fossil, Swank, and CiprianiWomens and girls belts
    
    Cipriani, Liz Claiborne, Circa, Accessory Network, and FossilWomens small leather goods
    
    Buxton, Mundi, Fossil, Liz Claiborne, and Nine WestWomens handbags
    
    Nine West, Liz Claiborne, Kenneth Cole, and Fossil
 8




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How do we seek to grow our business?
 ® ®
 Where and how are our products produced?
  Is our business seasonal?
  First
    
    Second
    
    Third
    
    FourthQuarter
    
    Quarter
    
    Quarter
    
    QuarterNet salesFiscal 2007
    
    
    29.2
    %
    
    
    32.9
    %
    
    
    19.3
    %
    
    
    18.6
    %Fiscal 2006
    
    
    26.8
    
    
    
    32.5
    
    
    
    20.0
    
    
    
    20.7Net income (loss)Fiscal 2007
    
    
    146.3
    %
    
    
    176.1
    %
    
    
    (71.5
    )%
    
    
    (150.9
    )%Fiscal 2006
    
    
    42.4
    
    
    
    58.8
    
    
    
    (171.0
    )
    
    
    (30.2
    )
 What are the sources and availability of our products?
  Are we subject to governmental regulations?
   9




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How many employees do we have?
  What role does intellectual property play in our business?
  What are our working capital practices?
  What financial information about our business segments and geographic areas of operation is
available?
  Where can investors access additional information about Tandy Brands?
  Recent Developments
  10




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ITEM 1A  RISK FACTORS
  Risks Relating To Our Business
 A significant portion of our sales is attributable to a few major customers.
  We do not maintain long-term contracts with our customers and are unable to control their
purchasing decisions.
  Direct sales to customers by suppliers could negatively impact our sales.
  We extend unsecured credit to our customers and are subject to potential financial difficulties
they may face.
  The loss of certain of our license agreements could result in the loss of significant sales.
 ®
 Distribution problems could delay product shipments.
  11




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The loss of, or problems with, third-party manufacturers could adversely impact our operations.
  Our business is dependent on our ability to maintain proper inventory levels.
  Price increases by our suppliers could negatively affect our operating results.
  Risks Relating To Our Industry
 Our business is highly subject to consumer preferences and fashion trends.
  Our industry is highly competitive and subject to pricing pressures that could adversely affect our
financial position.
  Our industry is highly subject to economic cycles and retail industry conditions.
  12




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Consolidation in the retail industry may negatively impact our operations.
  
    
    store closures;
    
    increased customer leverage over suppliers, resulting in lower product prices or lower margins;
    
    tighter inventory management on the part of the customer, resulting in lower inventory
levels and decreased orders; and
    
    a greater exposure to customer credit risk.
 Risks Relating To International Operations
 We source most of our products from foreign countries.
  Fluctuations in foreign currencies could adversely impact our financial condition.
  Risks Relating To Our Company
 Our business depends on a limited number of key personnel with whom we do not have employment
agreements. The loss of any one of these individuals could disrupt our business.
  We are dependent on the creative talent of our designers and the effectiveness of our sales
personnel.
  The failure to successfully integrate future acquisitions could negatively impact our business.
  13




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The requirements of complying with the Exchange Act and the Sarbanes-Oxley Act may strain our
resources.
  
 ITEM 1B  UNRESOLVED STAFF COMMENTS
  
 ITEM 2  PROPERTIES
  Form ofFacility Location
    
    Use
    
    OwnershipYoakum, Texas (4 facilities)
    
    Distribution of mens accessories and specialty
leather product manufacturing
    
    OwnWest Bend, Wisconsin
    
    Distribution of small leather goods and handbags
    
    OwnScarborough, Ontario, Canada
    
    Manufacture and distribution of leather goods
    
    LeaseDallas, Texas
    
    Distribution of womens accessories
    
    LeaseArlington, Texas
    
    Corporate offices
    
    LeaseNew York, New York (2 facilities)
    
    Office space and showroom
    
    LeaseBirmingham, Alabama
    
    Office space
    
    LeaseNew Orleans, Louisiana
    
    Office space
    
    LeaseKowloon, Hong Kong
    
    Office space
    
    Lease
  Square FeetOwned
    
    Leased
    
    TotalWarehouse and office
    
    
    566,000
    
    
    
    260,000
    
    
    
    826,000Factory
    
    
    
    
    
    
    27,000
    
    
    
    27,000Total
    
    
    566,000
    
    
    
    287,000
    
    
    
    853,000
 
 ITEM 3  LEGAL PROCEEDINGS
  
 ITEM 4  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
  14




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PART II
 
 ITEM 5  MARKET FOR THE REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER
PURCHASES OF EQUITY SECURITIES
 What is the principal market for our common stock
  Fiscal 2007
    
    Fiscal 2006Quarter Ended
    
    High
    
    Low
    
    High
    
    LowSeptember 30
    
    $
    11.68
    
    
    $
    9.27
    
    
    $
    12.00
    
    
    $
    10.23December 31
    
    $
    12.36
    
    
    $
    9.73
    
    
    $
    12.30
    
    
    $
    10.77March 31
    
    $
    13.70
    
    
    $
    11.21
    
    
    $
    12.10
    
    
    $
    9.93June 30
    
    $
    13.29
    
    
    $
    10.63
    
    
    $
    10.85
    
    
    $
    9.78
 How many common stockholders do we have?
  Did we declare any cash dividends in fiscal 2007 or the prior fiscal year?
  DividendDeclaration Date
    
    Record Date
    
    Payable Date
    
    Per ShareFiscal 2007August 16, 2006
    
    September 30, 2006
    
    October 20, 2006
    
    $
    0.0275October 16, 2006
    
    December 29, 2006
    
    January 19, 2007
    
    $
    0.0275January 31, 2007
    
    March 30, 2007
    
    April 20, 2007
    
    $
    0.04April 17, 2007
    
    June 29, 2007
    
    July 20, 2007
    
    $
    0.04
 Fiscal 2006August 16, 2005
    
    September 30, 2005
    
    October 20, 2005
    
    $
    0.0275October 18, 2005
    
    December 30, 2005
    
    January 20, 2006
    
    $
    0.0275January 12, 2006
    
    March 31, 2006
    
    April 20, 2006
    
    $
    0.0275April 18, 2006
    
    June 30, 2006
    
    July 20, 2006
    
    $
    0.0275
  How many shares of common stock are authorized for issuance under our equity compensation plans?
        15




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(A)
    
    (B)
    
    (C)Number of Securities To Be
    
    
    
    
    
    Number Of Securities Remaining AvailableIssued upon Exercise Of
    
    Weighted-Average Exercise
    
    For Future Issuance Under EquityOutstanding Options, Warrants
    
    Price Of Outstanding
    
    Compensation Plans (Excluding SecuritiesPlan Category
    
    And Rights
    
    Options, Warrants And Rights
    
    Reflected In Column (A))Equity Compensation
Plans Approved by
Stockholders
    
    
    629,019
    (1)
    
    $
    11.83
    (2)
    
    
    791,119
    (3) (5)Equity Compensation
Plans Not Approved
by Stockholders
    
    
    15,000
    (4)
    
    $
    6.09
    
    
    
    Total
    
    
    644,019
    
    
    $
    11.69
    (2)
    
    
    791,119
 
 (1)
    
    Includes options to purchase common stock:      (2)
    
    Calculation of weighted-average exercise price does not include phantom stock units
credited to participants accounts under the 1995 Stock Deferral Plan for Non-Employee
Directors.(3)
    
    Includes 24,248 shares of common stock issuable under the 1995 Stock Deferral Plan
for Non-Employee Directors and 429,462 shares of common stock issuable under the 2002 Omnibus
Plan, of which 137,184 shares would be issuable after June 30, 2009 for performance units if
we achieve 150% of the target return on noncash assets. Upon adoption of the 2002 Omnibus
Plan by our stockholders at our 2002 annual stockholders meeting, the number of shares
authorized and reserved for issuance under our previously existing stock option plans were
transferred to the 2002 Omnibus Plan and are presently authorized and reserved for issuance
under that plan. All shares of common stock authorized and reserved for issuance on the
exercise of outstanding stock options under our previous stock option plans and the 2002
Omnibus Plan will, on the cancellation or expiration of any such stock options, automatically
be authorized and reserved for issuance under the 2002 Omnibus Plan.(4)
    
    Options to purchase an aggregate of 15,000 shares of common stock under
nonqualified stock option agreements for non-employee directors dated October 16, 2001 with
Dr. James F. Gaertner (4,250), Gene Stallings (4,250), Roger R. Hemminghaus (2,500), and
Colombe M. Nicholas (4,000). These options became fully vested six months after the grant
date and expire on October 16, 2011.(5)
    
    Includes 337,409 shares of common stock issuable under the Stock Purchase Program.
The Stock Purchase Program is open to all full-time employees who have been employed at least
six months, but less than one year, or who have been employed one year or more and are
contributing to the Tandy Brands Accessories, Inc. Employees Investment Plan. Under the
Stock Purchase Program participants may contribute 5% or 10% of their earnings and we match
25% or 50% of each participants contribution depending on their length of employment or
other considerations. The Stock Purchase Program purchases treasury stock, if available, or
unissued common stock directly from the Company at monthly average market prices. The
participants
shares are fully vested upon purchase and the participant may withdraw from the Stock Purchase
Program at any time. The shares purchased under the Stock Purchase Program are distributed to
participants annually. 16




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How did our common stock perform compared to certain indexes?
  
 Did the company repurchase any shares of common stock during the fourth quarter of fiscal 2007?
  Total Number Of
    
    Maximum NumberTotal
    
    
    
    
    
    Shares Purchased
    
    Of Shares That MayNumber
    
    Average
    
    As Part Of Publicly
    
    Yet Be Purchased AsOf Shares
    
    Price Paid
    
    Announced Plans
    
    Part Of The PlansPeriod
    
    Purchased
    
    Per Share
    
    Or Programs
    
    Or ProgramsApril 1, 2007 to April 30, 2007
    
    
    249
    
    
    $
    12.75
    
    
    
    N/A
    
    
    
    N/AMay 1, 2007 to May 31, 2007
    
    
    469
    
    
    $
    12.19
    
    
    
    N/A
    
    
    
    N/ATotal
    
    
    718
    
    
    $
    12.38
    
    
    
    N/A
    
    
    
    N/A
 17




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ITEM 6  SELECTED FINANCIAL DATA
 Selected Financial Data
(in thousands except per share amounts)
 Year Ended June 302007
    
    2006(1)
    
    2005
    
    2004
    
    2003 (2)Net sales
    
    $
    195,809
    
    
    $
    227,323
    
    
    $
    221,232
    
    
    $
    215,420
    
    
    $
    224,487Gross margin
    
    
    69,854
    
    
    
    68,871
    
    
    
    81,233
    
    
    
    75,285
    
    
    
    78,088Operating income (loss)
    
    
    3,935
    
    
    
    (2,405
    )
    
    
    7,386
    
    
    
    13,711
    
    
    
    15,371Interest expense
    
    
    1,226
    
    
    
    2,057
    
    
    
    1,222
    
    
    
    2,357
    
    
    
    2,833Net income (loss)
    
    
    1,934
    
    
    
    (3,462
    )
    
    
    3,987
    
    
    
    6,952
    
    
    
    7,011Earnings (loss) per common share
    
    
    0.29
    
    
    
    (0.52
    )
    
    
    0.63
    
    
    
    1.12
    
    
    
    1.18Earnings (loss) per common share assuming dilution
    
    
    0.28
    
    
    
    (0.52
    )
    
    
    0.61
    
    
    
    1.09
    
    
    
    1.16Cash dividends declared per common share
    
    
    0.135
    
    
    
    0.11
    
    
    
    0.11
    
    
    
    0.10
    
    
    
    Working capital
    
    
    77,727
    
    
    
    86,530
    
    
    
    86,625
    
    
    
    80,684
    
    
    
    88,416Total assets
    
    
    140,663
    
    
    
    138,944
    
    
    
    150,762
    
    
    
    134,623
    
    
    
    147,120Notes Payable
    
    
    6,069
    
    
    
    14,000
    
    
    
    16,055
    
    
    
    10,000
    
    
    
    30,000Stockholders equity
    
    
    107,907
    
    
    
    104,839
    
    
    
    105,430
    
    
    
    98,948
    
    
    
    89,188
 
 (1)
    
    Information about discontinued product line inventory, associated packaging costs,
severance payments and a goodwill impairment charge, and their impact on fiscal 2006, is
incorporated herein by reference to Notes 4 and 5 of the notes to consolidated financial
statements included in Item 8 of this Annual Report(2)
    
    Fiscal 2003 net income was reduced $581,000, or $0.10 per share, by the cumulative
effect of the accounting change from adopting Statement of Financial Accounting Standards No.
142, Goodwill and Other Intangible Assets. 
 ITEM 7  MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION
  Overview
  18




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Increase
    
    
    
    
    
    
    Increase2007
    
    
    (Decrease)
    
    
    2006
    
    
    (Decrease)
    
    
    2005Net sales:Mens accessories
    
    $
    140,072
    
    
    
    1.1
    %
    
    $
    138,515
    
    
    
    2.9
    %
    
    $
    134,584Womens accessories
    
    
    55,737
    
    
    
    (37.2
    )
    
    
    88,808
    
    
    
    2.5
    
    
    
    86,648$
    195,809
    
    
    
    (13.9
    )
    
    $
    227,323
    
    
    
    2.8
    
    
    $
    221,232Gross margin:Mens accessories
    
    $
    50,835
    
    
    
    (0.6
    )%
    
    $
    51,157
    
    
    
    (5.2
    )%
    
    $
    53,941Womens accessories
    
    
    19,019
    
    
    
    7.4
    
    
    
    17,714
    
    
    
    (35.1
    )
    
    
    27,292$
    69,854
    
    
    
    1.4
    
    
    $
    68,871
    
    
    
    (15.2
    )
    
    $
    81,233Gross margin percent of sales:Mens accessories
    
    
    36.3
    %
    
    
    
    
    
    
    36.9
    %
    
    
    
    
    
    
    40.1
    %Womens accessories
    
    
    34.1
    
    
    
    
    
    
    
    19.9
    
    
    
    
    
    
    
    31.5Total
    
    
    35.7
    
    
    
    
    
    
    
    30.3
    
    
    
    
    
    
    
    36.7
   Mens
    
    
    Womens
    
    
    Total2007Belts
    
    
    
    
    
    $
    90,605
    
    
    
    64.7
    %
    
    $
    27,399
    
    
    
    49.2
    %
    
    $
    118,004
    
    
    
    60.3
    %Small leather goods
    
    
    
    
    
    
    17,473
    
    
    
    12.5
    
    
    
    22,608
    
    
    
    40.6
    
    
    
    40,081
    
    
    
    20.5Gift accessories
    
    
    
    
    
    
    19,664
    
    
    
    14.0
    
    
    
    825
    
    
    
    1.5
    
    
    
    20,489
    
    
    
    10.4Handbags
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,087
    
    
    
    5.5
    
    
    
    3,087
    
    
    
    1.6Other products
    
    
    
    
    
    
    12,330
    
    
    
    8.8
    
    
    
    1,818
    
    
    
    3.2
    
    
    
    14,148
    
    
    
    7.2$
    140,072
    
    
    
    
    
    
    $
    55,737
    
    
    
    
    
    
    $
    195,8092006Belts
    
    
    
    
    
    $
    88,879
    
    
    
    64.2
    %
    
    $
    32,350
    
    
    
    36.4
    %
    
    $
    121,229
    
    
    
    53.3
    %Small leather goods
    
    
    
    
    
    
    18,500
    
    
    
    13.4
    
    
    
    22,502
    
    
    
    25.4
    
    
    
    41,002
    
    
    
    18.0Gift accessories
    
    
    
    
    
    
    17,903
    
    
    
    12.9
    
    
    
    
    
    
    
    
    
    
    
    17,903
    
    
    
    7.9Socks
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    13,981
    
    
    
    15.7
    
    
    
    13,981
    
    
    
    6.1Cold weather goods
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    8,380
    
    
    
    9.5
    
    
    
    8,380
    
    
    
    3.7Handbags and hats
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    8,114
    
    
    
    9.1
    
    
    
    8,114
    
    
    
    3.6Other products
    
    
    
    
    
    
    13,233
    
    
    
    9.5
    
    
    
    3,481
    
    
    
    3.9
    
    
    
    16,714
    
    
    
    7.4$
    138,515
    
    
    
    
    
    
    $
    88,808
    
    
    
    
    
    
    $
    227,3232005Belts
    
    
    
    
    
    $
    91,401
    
    
    
    67.9
    %
    
    $
    27,682
    
    
    
    32.0
    %
    
    $
    119,083
    
    
    
    53.8
    %Small leather goods
    
    
    
    
    
    
    17,408
    
    
    
    12.9
    
    
    
    24,329
    
    
    
    28.1
    
    
    
    41,737
    
    
    
    18.9Gift accessories
    
    
    
    
    
    
    13,655
    
    
    
    10.2
    
    
    
    
    
    
    
    
    
    
    
    13,655
    
    
    
    6.2Socks
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    12,077
    
    
    
    13.9
    
    
    
    12,077
    
    
    
    5.5Cold weather goods
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,441
    
    
    
    7.4
    
    
    
    6,441
    
    
    
    2.8Handbags and hats
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10,561
    
    
    
    12.2
    
    
    
    10,561
    
    
    
    4.8Other products
    
    
    
    
    
    
    12,120
    
    
    
    9.0
    
    
    
    5,558
    
    
    
    6.4
    
    
    
    17,678
    
    
    
    8.0$
    134,584
    
    
    
    
    
    
    $
    86,648
    
    
    
    
    
    
    $
    221,232
 19




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##### Table of Contents



Increase
    
    
    
    
    
    
    Increase2007
    
    
    (Decrease)
    
    
    2006
    
    
    (Decrease)
    
    
    2005Selling, general and
administrative expense:Mens accessories
    
    $
    42,293
    
    
    
    5.6
    %
    
    $
    40,037
    
    
    
    0.4
    %
    
    $
    39,866Womens accessories
    
    
    18,911
    
    
    
    (24.9
    )
    
    
    25,183
    
    
    
    (10.4
    )
    
    
    28,109$
    61,204
    
    
    
    (6.2
    )
    
    $
    65,220
    
    
    
    (4.1
    )
    
    $
    67,975Depreciation and amortization:Mens accessories
    
    $
    3,237
    
    
    
    (0.5
    )%
    
    $
    3,253
    
    
    
    5.9
    %
    
    $
    3,073Womens accessories
    
    
    1,478
    
    
    
    (20.8
    )
    
    
    1,865
    
    
    
    (4.5
    )
    
    
    1,952$
    4,715
    
    
    
    (7.9
    )
    
    $
    5,118
    
    
    
    1.9
    
    
    $
    5,025Interest expense
    
    $
    1,226
    
    
    
    (40.4
    )%
    
    $
    2,057
    
    
    
    68.3
    %
    
    $
    1,222
 Challenges And Opportunities
  
     2007 COMPARED TO 2006
 Net Sales And Gross Margins
 20




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##### Table of Contents



Operating Expenses
     Summary
  21




---



##### Table of Contents



2006 COMPARED TO 2005
 Restructuring
  Net Sales And Gross Margins
 ®
  Operating Expense
    22




---



##### Table of Contents



Summary
  LIQUIDITY AND CAPITAL RESOURCES
      23




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##### Table of Contents



OFF-BALANCE SHEET ARRANGEMENTS
  CONTRACTUAL OBLIGATIONS
  Less Than
    
    
    
    
    
    
    
    
    
    
    More ThanTotal
    
    
    1 Year
    
    
    1-3 Years
    
    
    3-5 Years
    
    
    5 YearsNotes payable (1)
    
    $
    6,069
    
    
    $
    
    
    
    $
    6,069
    
    
    $
    
    
    
    $
    Operating leases (2)
    
    
    6,840
    
    
    
    2,191
    
    
    
    3,347
    
    
    
    1,051
    
    
    
    251License royalties (2)
    
    
    3,500
    
    
    
    1,465
    
    
    
    1,445
    
    
    
    468
    
    
    
    122Supplemental executive retirement obligation (3)
    
    
    1,587
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,587Purchase obligations (4)
    
    
    32,300
    
    
    
    32,300
    
    
    
    
    
    
    
    
    
    
    
    $
    50,296
    
    
    $
    35,956
    
    
    $
    10,861
    
    
    $
    1,519
    
    
    $
    1,960
 
 (1)
    
    Consolidated financial statement Note 6 describes our credit facility. Interest is
expensed and paid monthly and is not included in the obligation. Our interest rate at June
30, 2007 was 6.45%.(2)
    
    Consolidated financial statement Note 7 describes our lease and license agreements.(3)
    
    Consolidated financial statement Note 11 describes the supplemental executive
retirement obligation.(4)
    
    Purchase orders entered into in the ordinary course of business which may be
cancelled without penalty, including $3.3 million of outstanding letters of credit in
conjunction with purchase commitments which typically mature in two to six months. CRITICAL ACCOUNTING POLICIES
   Revenues And Accounts Receivable Allowances
  24




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##### Table of Contents



Sensitivity Analysis
 Sales
    
    Allowances
    
    
    
    EarningsChange
    
    Reserves
    
    Expense
    
    Per ShareChange in customer allowances and returns
    
    +/-    0.5%
    
    $979/$(979)
    
    $979/$(979)
    
    $(0.09)/$0.09Change in allowance for doubtful accounts
    
    +/-0.125
    
    245/   (245)
    
    245/   (245)
    
    (0.02)/  0.02
 Inventories
  Sensitivity Analysis
 Percentage
    
    
    
    
    
    
    
    
    
    EarningsOf Inventory
    
    Inventory
    
    Expense
    
    Per ShareChange in inventory markdown
    
    
    -1
    %
    
    $
    (644
    )
    
    $
    644
    
    
    $
    (0.06
    )
 Goodwill
   Share-Based Compensation
  25




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##### Table of Contents



IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS
  INFLATION
  
 ITEM 7A  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
    26




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##### Table of Contents



ITEM 8  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
       
 
 27




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##### Table of Contents



Tandy Brands Accessories, Inc. And Subsidiaries
Consolidated Balance Sheets
(in thousands of dollars)
 June 302007
    
    
    2006AssetsCurrent assets:Cash and cash equivalents
    
    $
    4,076
    
    
    $
    4,182Accounts receivable
    
    
    31,357
    
    
    
    27,322Inventories
    
    
    64,372
    
    
    
    61,770Deferred income taxes
    
    
    3,454
    
    
    
    3,792Other current assets
    
    
    3,879
    
    
    
    5,784Total current assets
    
    
    107,138
    
    
    
    102,850Property and equipment
    
    
    10,548
    
    
    
    12,430Other assets:Goodwill
    
    
    16,361
    
    
    
    16,292Other intangibles
    
    
    4,882
    
    
    
    5,653Other assets
    
    
    1,734
    
    
    
    1,719Total other assets
    
    
    22,977
    
    
    
    23,664$
    140,663
    
    
    $
    138,944Liabilities And Stockholders EquityCurrent liabilities:Accounts payable
    
    $
    16,903
    
    
    $
    10,106Accrued compensation
    
    
    2,420
    
    
    
    2,583Accrued expenses
    
    
    4,019
    
    
    
    3,631Notes payable
    
    
    6,069
    
    
    
    Total current liabilities
    
    
    29,411
    
    
    
    16,320Other liabilities:Notes payable
    
    
    
    
    
    
    14,000Supplemental executive retirement obligation
    
    
    1,587
    
    
    
    1,133Deferred income taxes
    
    
    389
    
    
    
    1,640Other liabilities
    
    
    1,369
    
    
    
    1,012Total other liabilities
    
    
    3,345
    
    
    
    17,785CommitmentsStockholders equity:Preferred stock, $1 par value, 1,000,000 shares authorized, none issued
    
    
    
    
    
    
    Common stock, $1 par value, 10,000,000 shares authorized,
6,912,302 shares and 6,795,183 shares issued and outstanding
    
    
    6,912
    
    
    
    6,795Additional paid-in capital
    
    
    33,616
    
    
    
    31,911Retained earnings
    
    
    66,967
    
    
    
    65,960Other comprehensive income
    
    
    1,326
    
    
    
    988Shares held by Benefit Restoration Plan Trust
    
    
    (914
    )
    
    
    (815
    )Total stockholders equity
    
    
    107,907
    
    
    
    104,839$
    140,663
    
    
    $
    138,944
  28




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##### Table of Contents



Tandy Brands Accessories, Inc. And Subsidiaries
Consolidated Statements Of Operations
(in thousands except per share amounts)
 Year Ended June 302007
    
    
    2006
    
    
    2005Net sales
    
    $
    195,809
    
    
    $
    227,323
    
    
    $
    221,232Cost of goods sold
    
    
    125,955
    
    
    
    151,552
    
    
    
    139,999Provision for discontinued product line inventory
    
    
    
    
    
    
    6,900
    
    
    
    125,955
    
    
    
    158,452
    
    
    
    139,999Gross margin
    
    
    69,854
    
    
    
    68,871
    
    
    
    81,233Selling, general and administrative expenses
    
    
    61,204
    
    
    
    65,220
    
    
    
    67,975Depreciation and amortization
    
    
    4,715
    
    
    
    5,118
    
    
    
    5,025Goodwill impairment
    
    
    
    
    
    
    938
    
    
    
    847Total operating expenses
    
    
    65,919
    
    
    
    71,276
    
    
    
    73,847Operating income (loss)
    
    
    3,935
    
    
    
    (2,405
    )
    
    
    7,386Interest expense
    
    
    (1,226
    )
    
    
    (2,057
    )
    
    
    (1,222
    )Royalty and other income
    
    
    550
    
    
    
    187
    
    
    
    246Income (loss) before income taxes
    
    
    3,259
    
    
    
    (4,275
    )
    
    
    6,410Income taxes (benefit)
    
    
    1,325
    
    
    
    (813
    )
    
    
    2,423Net income (loss)
    
    $
    1,934
    
    
    $
    (3,462
    )
    
    $
    3,987Earnings (loss) per common share
    
    $
    0.29
    
    
    $
    (0.52
    )
    
    $
    0.63Earnings (loss) per common share assuming dilution
    
    $
    0.28
    
    
    $
    (0.52
    )
    
    $
    0.61Cash dividends declared per common share
    
    $
    0.135
    
    
    $
    0.11
    
    
    $
    0.11Common shares outstanding
    
    
    6,720
    
    
    
    6,598
    
    
    
    6,349Common shares outstanding assuming dilution
    
    
    6,891
    
    
    
    6,598
    
    
    
    6,588
  29




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##### Table of Contents



Tandy Brands Accessories, Inc. And Subsidiaries
Consolidated Statements Of Cash Flows
(in thousands)
 Year Ended June 302007
    
    
    2006
    
    
    2005Cash flows provided by operating activities:Net income (loss)
    
    $
    1,934
    
    
    $
    (3,462
    )
    
    $
    3,987Adjustments to reconcile net income (loss)
to net cash provided by operating activities:Provision for discontinued product line inventory
    
    
    
    
    
    
    6,900
    
    
    
    Depreciation and amortization
    
    
    4,879
    
    
    
    5,295
    
    
    
    5,190Goodwill impairment
    
    
    
    
    
    
    938
    
    
    
    847Stock compensation expense
    
    
    447
    
    
    
    860
    
    
    
    Amortization of debt costs
    
    
    170
    
    
    
    149
    
    
    
    127Excess income tax benefit from stock option exercises
    
    
    (30
    )
    
    
    (71
    )
    
    
    216Deferred income taxes
    
    
    (913
    )
    
    
    (167
    )
    
    
    (1,930
    )Other
    
    
    289
    
    
    
    286
    
    
    
    229Change in assets and liabilities:Accounts receivable
    
    
    (4,035
    )
    
    
    4,115
    
    
    
    2,567Inventories
    
    
    (2,602
    )
    
    
    (689
    )
    
    
    (8,319
    )Other assets
    
    
    1,559
    
    
    
    (2,451
    )
    
    
    (1,476
    )Accounts payable
    
    
    6,946
    
    
    
    (4,426
    )
    
    
    1,641Accrued expenses
    
    
    457
    
    
    
    (1,060
    )
    
    
    1,477Net cash provided by operating activities
    
    
    9,101
    
    
    
    6,217
    
    
    
    4,556Cash flows used for investing activities:Purchases of property and equipment
    
    
    (2,204
    )
    
    
    (2,972
    )
    
    
    (3,513
    )Proceeds from trademark sale
    
    
    500
    
    
    
    
    
    
    
    Purchase of Superior Merchandise Company
    
    
    
    
    
    
    
    
    
    
    (10,000
    )Purchase of SERP investments
    
    
    
    
    
    
    
    
    
    
    (850
    )Net cash used for investing activities
    
    
    (1,704
    )
    
    
    (2,972
    )
    
    
    (14,363
    )Cash flows (used) provided by financing activities:Stock sold to stock purchase program
    
    
    1,059
    
    
    
    1,235
    
    
    
    1,500Stock options exercised
    
    
    356
    
    
    
    441
    
    
    
    1,092Dividends paid
    
    
    (838
    )
    
    
    (737
    )
    
    
    (691
    )Change in cash overdrafts
    
    
    (149
    )
    
    
    (1,376
    )
    
    
    Proceeds from borrowings
    
    
    32,143
    
    
    
    69,148
    
    
    
    81,626Borrowing repayments
    
    
    (40,074
    )
    
    
    (71,203
    )
    
    
    (76,377
    )Net cash (used) provided by financing activities
    
    
    (7,503
    )
    
    
    (2,492
    )
    
    
    7,150Net (decrease) increase in cash and cash equivalents
    
    
    (106
    )
    
    
    753
    
    
    
    (2,657
    )Cash and cash equivalents beginning of year
    
    
    4,182
    
    
    
    3,429
    
    
    
    6,086Cash and cash equivalents end of year
    
    $
    4,076
    
    
    $
    4,182
    
    
    $
    3,429Supplemental cash flow information:Interest paid
    
    $
    1,153
    
    
    $
    1,848
    
    
    $
    1,065Income taxes paid
    
    $
    2,868
    
    
    $
    1,841
    
    
    $
    3,371
  30




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##### Table of Contents



Tandy Brands Accessories, Inc. And Subsidiaries
Consolidated Statements Of Stockholders Equity
(in thousands of dollars except per share amounts)
 Shares HeldAdditional
    
    
    
    
    
    
    Other
    
    
    By Benefit
    
    
    TotalCommon Stock
    
    
    Paid-In
    
    
    Retained
    
    
    Comprehensive
    
    
    Restoration
    
    
    StockholdersShares
    
    
    Amount
    
    
    Capital
    
    
    Earnings
    
    
    Income (Loss)
    
    
    Plan Trust
    
    
    EquityBalance June 30, 2004
    
    
    6,305,886
    
    
    $
    6,306
    
    
    $
    26,765
    
    
    $
    66,892
    
    
    $
    (121
    )
    
    $
    (894
    )
    
    $
    98,948Comprehensive income:Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,987
    
    
    
    
    
    
    
    
    
    
    
    3,987Currency translation adjustments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    467
    
    
    
    
    
    
    
    467SERP minimum liability increase
net of tax of $158
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (269
    )
    
    
    
    
    
    
    (269
    )4,185Cash dividends declared  $0.11 per share
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (715
    )
    
    
    
    
    
    
    
    
    
    
    (715
    )Stock sold to Stock Purchase Program
    
    
    108,964
    
    
    
    109
    
    
    
    1,391
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,500Stock options exercised
    
    
    133,738
    
    
    
    133
    
    
    
    1,175
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,308Restricted stock issued
    
    
    20,970
    
    
    
    21
    
    
    
    274
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    295Restricted stock unearned compensation
    
    
    
    
    
    
    
    
    
    
    (38
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (38
    )Directors stock deferral plan shares
issued
    
    
    3,608
    
    
    
    4
    
    
    
    30
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    34Benefit Restoration Plan Trust shares
purchased
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (87
    )
    
    
    (87
    )Balance June 30, 2005
    
    
    6,573,166
    
    
    
    6,573
    
    
    
    29,597
    
    
    
    70,164
    
    
    
    77
    
    
    
    (981
    )
    
    
    105,430Comprehensive income (loss):Net (loss)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,462
    )
    
    
    
    
    
    
    
    
    
    
    (3,462
    )Currency translation adjustments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    642
    
    
    
    
    
    
    
    642SERP minimum liability decrease
net of tax of $158
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    269
    
    
    
    
    
    
    
    269(2,551
    )Cash dividends declared  $0.11 per share
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (742
    )
    
    
    
    
    
    
    
    
    
    
    (742
    )Stock sold to Stock Purchase Program
    
    
    112,876
    
    
    
    113
    
    
    
    1,122
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,235Stock options exercised
    
    
    57,694
    
    
    
    58
    
    
    
    383
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    441Share-based compensation
    
    
    51,447
    
    
    
    51
    
    
    
    809
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    860Benefit Restoration Plan Trust net shares
sold
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    166
    
    
    
    166Balance June 30, 2006
    
    
    6,795,183
    
    
    
    6,795
    
    
    
    31,911
    
    
    
    65,960
    
    
    
    988
    
    
    
    (815
    )
    
    
    104,839Comprehensive income:Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,934
    
    
    
    
    
    
    
    
    
    
    
    1,934Currency translation adjustments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    338
    
    
    
    
    
    
    
    3382,272Cash dividends declared  $0.135 per share
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (928
    )
    
    
    
    
    
    
    
    
    
    
    (928
    )Stock sold to Stock Purchase Program
    
    
    90,436
    
    
    
    90
    
    
    
    969
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,059Stock options exercised
    
    
    34,282
    
    
    
    34
    
    
    
    322
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    356Share-based compensation
    
    
    (7,599
    )
    
    
    (7
    )
    
    
    414
    
    
    
    1
    
    
    
    
    
    
    
    
    
    
    
    408Benefit Restoration Plan Trust shares
purchased
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (99
    )
    
    
    (99
    )Balance June 30, 2007
    
    
    6,912,302
    
    
    $
    6,912
    
    
    $
    33,616
    
    
    $
    66,967
    
    
    $
    1,326
    
    
    $
    (914
    )
    
    $
    107,907
  31




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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Note 1  Overview
 The Company
  Basis Of Presentation
   Foreign Currency Translation
  Financial Instrument Fair Values
  Note 2  Summary Of Significant Accounting Policies
 Cash And Cash Equivalents
  Accounts Receivable And Allowances
   Beginning
    
    Charged To
    
    
    
    
    
    EndingFiscal Year
    
    Balance
    
    Expense
    
    Deductions
    
    Balance2007
    
    $
    1,598
    
    
    $
    8,138
    
    
    $
    8,793
    
    
    $
    9432006
    
    
    1,483
    
    
    
    7,278
    
    
    
    7,163
    
    
    
    1,5982005
    
    
    1,142
    
    
    
    7,843
    
    
    
    7,502
    
    
    
    1,483
 32




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##### Table of Contents



Note 2  Summary Of Significant Accounting Policies
 Inventories
  2007
    
    
    2006Raw materials
    
    $
    3,288
    
    
    $
    3,999Work-in-process
    
    
    239
    
    
    
    1,321Finished goods
    
    
    60,845
    
    
    
    56,450$
    64,372
    
    
    $
    61,770
 Property And Equipment
  2007
    
    
    2006
    
    
    Depreciation RatesBuildings
    
    $
    8,514
    
    
    $
    8,343
    
    
    
    3%Leasehold improvements
    
    
    3,139
    
    
    
    2,799
    
    
    Lesser of lease term or asset lifeMachinery and equipment
    
    
    27,275
    
    
    
    25,977
    
    
    10% to 50%38,928
    
    
    
    37,119Accumulated depreciation
    
    
    (28,380
    )
    
    
    (24,689
    )$
    10,548
    
    
    $
    12,430
   Goodwill And Other Intangibles
  Impairment Of Long-Lived Assets And Goodwill
   Derivative Instruments And Hedging Activities
  33




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##### Table of Contents



Note 2  Summary Of Significant Accounting Policies
 Sales
  Costs And Expenses
  Advertising Costs
  Share-Based Compensation
    Net income:As reported
    
    $
    3,987Add share-based compensation expense net of tax
    
    
    160As adjusted
    
    
    4,147Less compensation expense per SFAS No. 123 net of tax
    
    
    (711
    )Pro forma
    
    $
    3,436Earnings per share:As reported
    
    $
    0.63Pro forma
    
    $
    0.54Earnings per share assuming dilution:As reported
    
    $
    0.61Pro forma
    
    $
    0.52
 34




---



##### Table of Contents



Note 2
 Summary Of Significant Accounting Policies
 Impact Of Recently Issued Accounting Standards
  Note 3  Manufacturing Facility Conversion, Severance Costs, Trademark Sale, And Acquisition
    ® ®
 Note 4  Discontinued Product Lines
  Note 5  Goodwill And Intangibles
  2007
    
    
    2006Gross carrying amount
    
    $
    9,330
    
    
    $
    9,561Accumulated amortization
    
    
    (4,448
    )
    
    
    (3,908
    )$
    4,882
    
    
    $
    5,653
 2007
    
    
    Weighted-Average LifeBalance
    
    
    Expense
    
    
    Total
    
    
    RemainingTrade names
    
    $
    3,366
    
    
    $
    327
    
    
    
    20.7
    
    
    
    10.7Customer lists
    
    
    1,428
    
    
    
    357
    
    
    
    7.0
    
    
    
    4.0Other
    
    
    88
    
    
    
    27
    
    
    
    9.3
    
    
    
    3.2$
    4,882
    
    
    $
    711
    
    
    
    16.8
    
    
    
    7.0
 
 35




---



##### Table of Contents



Note 5  Goodwill And Intangibles
  Mens
    
    
    WomensAccessories
    
    
    Accessories
    
    
    TotalJune 30, 2005
    
    $
    16,164
    
    
    $
    937
    
    
    $
    17,101Impairment
    
    
    
    
    
    
    (937
    )
    
    
    (937
    )Currency translation adjustment
    
    
    128
    
    
    
    
    
    
    
    128June 30, 2006
    
    
    16,292
    
    
    
    
    
    
    
    16,292Currency translation adjustment
    
    
    69
    
    
    
    
    
    
    
    69June 30, 2007
    
    $
    16,361
    
    
    $
    
    
    
    $
    16,361
   Note 6  Credit Arrangements
      Total credit facilities
    
    $
    75,940Less:Debt outstanding
    
    
    6,069Letters of credit outstanding
    
    
    3,323Canadian standby letter of credit
    
    
    940Credit available
    
    $
    65,608
  36




---



##### Table of Contents



Note 7  Commitments
    Fiscal Year
    
    Rent
    
    
    Royalty2008
    
    $
    2,191
    
    
    $
    1,4652009
    
    
    2,178
    
    
    
    9562010
    
    
    1,169
    
    
    
    4892011
    
    
    587
    
    
    
    2252012
    
    
    464
    
    
    
    243Thereafter
    
    
    251
    
    
    
    122$
    6,840
    
    
    $
    3,500
 Note 8  Preferred Stock And Preferred Share Purchase Rights
 Preferred Stock
   Preferred Share Purchase Rights
  37




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##### Table of Contents



Note 9  Share-Based Compensation
 Omnibus Plan
    Awards Granted
     38




---



##### Table of Contents



Note 9  Share-Based Compensation
  2007
    
    2006
    
    2005Common Fair Value AssumptionsRisk-free interest rate
    
    4.62% and 4.77%
    
    4% and 4.59%
    
    
    3.25
    %Dividend yield
    
    1.0% and 1.3%
    
    
    1.0
    %
    
    
    1.0
    %Weighted-average
    
    
    1.1
    %Stock Option Fair Value AssumptionsStock price volatility
    
    
    
    
    
    
    0.390
    %
    
    
    0.388
    %Expected holding period
    
    
    
    
    
    5 years
    
    5 yearsWeighted-Average Estimated Fair Value Of GrantsRestricted stock
    
    
    
    
    
    $
    10.74
    
    
    $
    13.55Stock options
    
    
    
    
    
    $
    3.95
    
    
    $
    4.74Performance Units
    
    $
    11.46
    
    
    
    
    
    
    
    Fair Value Of Restricted Stock Vested
    
    $
    244,000
    
    
    $
    48,000
    
    
    $
    24,000Options ExercisedTotal intrinsic value
    
    $
    86,000
    
    
    $
    255,000
    
    
    $
    769,000Cash received
    
    $
    326,000
    
    
    $
    371,000
    
    
    $
    1,092,000Tax benefit realized
    
    $
    32,000
    
    
    $
    71,000
    
    
    $
    216,000Compensation ExpenseRecognized
    
    $
    381,000
    
    
    $
    860,000
    
    
    $
    257,000Income tax benefit
    
    $
    141,000
    
    
    $
    318,000
    
    
    $
    97,000Unrecognized
    
    $
    197,000Weighted-average future recognition period
    
    1 year
  Stock Options
 Weighted-Average
    
    
    AggregateRemaining
    
    
    IntrinsicNumber
    
    
    Exercise
    
    
    Contractual
    
    
    ValueOf Shares
    
    
    Price
    
    
    Term
    
    
    ($000)Outstanding June 30, 2006
    
    
    727,740
    
    
    $
    11.73Exercised
    
    
    (34,282
    )
    
    $
    9.52Forfeited and cancelled
    
    
    (53,566
    )
    
    $
    13.60Outstanding June 30, 2007
    
    
    639,892
    
    
    $
    11.69Vested and expected to vest
    
    
    625,168
    
    
    $
    11.72
    
    
    4.7 Years
    
    $
    1,150Exercisable
    
    
    566,730
    
    
    $
    11.69
    
    
    4.4 Years
    
    $
    1,091
 39




---



##### Table of Contents



Note 9  Share-Based Compensation
 Restricted Stock
 Weighted-AverageNumber
    
    
    Grant-DateOf Shares
    
    
    Fair ValueNonvested June 30, 2006
    
    
    93,119
    
    
    $
    11.74Vested
    
    
    (23,914
    )
    
    $
    12.46Forfeited
    
    
    (7,599
    )
    
    $
    10.57Nonvested June 30, 2007
    
    
    61,606
    
    
    $
    11.60
 Performance Units (1)
 Weighted-AverageNumber
    
    
    Grant-DateOf Shares
    
    
    Fair ValueGranted
    
    
    141,984
    
    
    $
    11.46Forfeited
    
    
    (4,800
    )
    
    $
    12.11Outstanding June 30, 2007
    
    
    137,184
    
    
    $
    11.44Vested and expected to vest
    
    
    
    
    
    
    
 
 (1)
    
    Units, other than those vested and expected to vest, based on 150% of target
payout. Note 10  Director Stock Deferral Plan
  Note 11  Employee Benefit Plans
   40




---



##### Table of Contents



Note 11  Employee Benefit Plans
     Note 12  Disclosures About Segments Of Our Business And Related Information
  41




---



##### Table of Contents



Note 12  Disclosures About Segments Of Our Business And Related Information
  2007
    
    
    2006
    
    
    2005Net sales to external customers:Mens accessories
    
    $
    140,072
    
    
    $
    138,515
    
    
    $
    134,584Womens accessories
    
    
    55,737
    
    
    
    88,808
    
    
    
    86,648$
    195,809
    
    
    $
    227,323
    
    
    $
    221,232Operating income (loss): (1)Mens accessories
    
    $
    5,305
    
    
    $
    7,867
    
    
    $
    11,002Womens accessories (2)
    
    
    (1,370
    )
    
    
    (10,272
    )
    
    
    (3,616
    )3,935
    
    
    
    (2,405
    )
    
    
    7,386Interest expense
    
    
    (1,226
    )
    
    
    (2,057
    )
    
    
    (1,222
    )Other income (3)
    
    
    550
    
    
    
    187
    
    
    
    246Income (loss) before income taxes
    
    $
    3,259
    
    
    $
    (4,275
    )
    
    $
    6,410Depreciation and amortization:Mens accessories
    
    $
    3,237
    
    
    $
    3,253
    
    
    $
    3,073Womens accessories
    
    
    1,478
    
    
    
    1,865
    
    
    
    1,952$
    4,715
    
    
    $
    5,118
    
    
    $
    5,025Capital expenditures:Mens accessories
    
    $
    770
    
    
    $
    579
    
    
    $
    559Womens accessories
    
    
    77
    
    
    
    524
    
    
    
    354Corporate
    
    
    1,357
    
    
    
    1,869
    
    
    
    2,600$
    2,204
    
    
    $
    2,972
    
    
    $
    3,513Total assets:Mens accessories
    
    $
    96,731
    
    
    $
    83,539
    
    
    $
    88,451Womens accessories
    
    
    29,085
    
    
    
    36,227
    
    
    
    44,929Corporate
    
    
    14,847
    
    
    
    19,178
    
    
    
    17,382$
    140,663
    
    
    $
    138,944
    
    
    $
    150,762
 
 (1)
    
    Operating income (loss) consists of net sales less cost of goods sold and
specifically identifiable and allocated selling, general and administrative expenses.(2)
    
    Womens accessories 2006 operating loss includes a $7.1 million charge for
discontinued product line inventory, associated packaging costs, and severance payments and a
$938,000 charge for goodwill impairment. In 2005 womens accessories incurred an $847,000
goodwill impairment charge.(3)
    
    Other income includes a $440,000 gain from the sale of a trademark in fiscal 2007
and royalty income from corporate trade names and other income not specifically identifiable
with a segment.  42




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##### Table of Contents



Note 12  Disclosures About Segments Of Our Business And Related Information
  2007
    
    
    2006
    
    
    2005Net sales:United States
    
    $
    186,428
    
    
    $
    218,255
    
    
    $
    213,368Canada
    
    
    9,381
    
    
    
    9,068
    
    
    
    7,864$
    195,809
    
    
    $
    227,323
    
    
    $
    221,232Income (loss) before income taxes:United States
    
    $
    2,671
    
    
    $
    (4,779
    )
    
    $
    5,976Canada
    
    
    588
    
    
    
    504
    
    
    
    434$
    3,259
    
    
    $
    (4,275
    )
    
    $
    6,410Property and equipment:United States
    
    $
    38,207
    
    
    $
    36,430
    
    
    $
    37,150Canada
    
    
    721
    
    
    
    689
    
    
    
    592$
    38,928
    
    
    $
    37,119
    
    
    $
    37,742Total assets:United States
    
    $
    131,518
    
    
    $
    131,361
    
    
    $
    143,586Canada
    
    
    9,145
    
    
    
    7,583
    
    
    
    7,176$
    140,663
    
    
    $
    138,944
    
    
    $
    150,762
  Note 13  Earnings (Loss) Per Share
  2007
    
    
    2006
    
    
    2005Numerator for basic and diluted
earnings (loss) per share:Net income (loss)
    
    $
    1,934
    
    
    $
    (3,462
    )
    
    $
    3,987Denominator:Weighted-average shares outstanding
    
    
    6,716
    
    
    
    6,575
    
    
    
    6,327Contingently issuable shares
    
    
    4
    
    
    
    23
    
    
    
    22Denominator for basic earnings (loss) per share
    
    
    6,720
    
    
    
    6,598
    
    
    
    6,349Effect of dilutive share-based compensation
    
    
    171
    
    
    
    
    
    
    
    239Denominator for diluted earnings (loss) per share
    
    
    6,891
    
    
    
    6,598
    
    
    
    6,588Earnings (loss) per common share
    
    $
    0.29
    
    
    $
    (0.52
    )
    
    $
    0.63Earnings (loss) per common share assuming dilution
    
    $
    0.28
    
    
    $
    (0.52
    )
    
    $
    0.61
  43




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##### Table of Contents



Note 14  Income Taxes
  2007
    
    
    2006Deferred tax assets:Accounts receivable valuation
    
    $
    187
    
    
    $
    344Inventory valuation
    
    
    2,787
    
    
    
    2,584Compensation plans
    
    
    1,662
    
    
    
    1,305Depreciation
    
    
    506Other net
    
    
    
    
    
    
    655,142
    
    
    
    4,298Deferred tax liabilities:Goodwill and other intangibles
    
    
    (2,061
    )
    
    
    (1,992
    )Depreciation
    
    
    
    
    
    
    (154
    )Other net
    
    
    (16
    )
    
    
    (2,077
    )
    
    
    (2,146
    )Net deferred tax asset
    
    $
    3,065
    
    
    $
    2,152
  2007
    
    
    2006
    
    
    2005Current:Federal
    
    $
    1,748
    
    
    $
    (1,023
    )
    
    $
    3,586State and local
    
    
    304
    
    
    
    275
    
    
    
    407Foreign
    
    
    186
    
    
    
    244
    
    
    
    2022,238
    
    
    
    (504
    )
    
    
    4,195Deferred:Federal
    
    
    (850
    )
    
    
    (265
    )
    
    
    (1,577
    )State and local
    
    
    (63
    )
    
    
    (44
    )
    
    
    (195
    )(913
    )
    
    
    (309
    )
    
    
    (1,772
    )$
    1,325
    
    
    $
    (813
    )
    
    $
    2,423
  2007
    
    2006
    
    2005Statutory rate
    
    
    34.0
    %
    
    
    (34.0
    )%
    
    
    34.0
    %State, foreign and local taxes net of federal tax benefit
    
    
    3.8
    
    
    
    5.2
    
    
    
    2.3Goodwill impairment
    
    
    
    
    
    
    7.5
    
    
    
    Other net
    
    
    2.9
    
    
    
    2.3
    
    
    
    1.540.7
    %
    
    
    (19.0
    )%
    
    
    37.8
    %
 Note 15  Selected Unaudited Quarterly Financial Data
  First
    
    Second
    
    Third
    
    FourthFiscal 2007
    
    Quarter
    
    Quarter
    
    Quarter
    
    QuarterNet sales
    
    $
    57,199
    
    
    $
    64,340
    
    
    $
    37,905
    
    
    $
    36,365Gross margin
    
    
    21,027
    
    
    
    24,190
    
    
    
    13,602
    
    
    
    11,035Income (loss) before income taxes
    
    
    4,630
    
    
    
    5,575
    
    
    
    (2,317
    )
    
    
    (4,629
    )Net income (loss)
    
    
    2,829
    
    
    
    3,406
    
    
    
    (1,383
    )
    
    
    (2,918
    )Earnings (loss) per common share
    
    $
    0.42
    
    
    $
    0.51
    
    
    $
    (0.21
    )
    
    $
    (0.43
    )Earnings (loss) per common share assuming dilution
    
    $
    0.41
    
    
    $
    0.50
    
    
    $
    (0.21
    )
    
    $
    (0.43
    )
  44




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##### Table of Contents



Note 15  Selected Unaudited Quarterly Financial Data
 First
    
    
    Second
    
    
    Third
    
    
    FourthFiscal 2006
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    QuarterNet sales
    
    $
    60,948
    
    
    $
    73,866
    
    
    $
    45,414
    
    
    $
    47,095Gross margin
    
    
    20,280
    
    
    
    24,955
    
    
    
    7,901
    
    
    
    15,735Income (loss) before income taxes
    
    
    2,439
    
    
    
    3,938
    
    
    
    (9,466
    )
    
    
    (1,186
    )Net income (loss)
    
    
    1,467
    
    
    
    2,036
    
    
    
    (5,921
    )
    
    
    (1,044
    )Earnings (loss) per common share
    
    $
    0.22
    
    
    $
    0.31
    
    
    $
    (0.89
    )
    
    $
    (0.16
    )Earnings (loss) per common share assuming dilution
    
    $
    0.22
    
    
    $
    0.30
    
    
    $
    (0.89
    )
    
    $
    (0.16
    )
  
 ITEM 9  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
  
 ITEM 9A  CONTROLS AND PROCEDURES
  
 ITEM 9A(T)  CONTROLS AND PROCEDURES
  
 ITEM 9B  OTHER INFORMATION
  45




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##### Table of Contents



PART III
  Caption In The
    
    Page Number In TheTandy Brands Accessories, Inc.
    
    Tandy Brands Accessories, Inc.Item
    
    2007 Proxy Statement
    
    2007 Proxy StatementITEM 10  DIRECTORS,
EXECUTIVE OFFICERS
AND CORPORATE
GOVERNANCE
    
    Proposal One: Election of Directors  Biographical and Other
Information Regarding Our Nominees
for Re-Election to Our Board of
Directors  Biographical and Other
Information Regarding Our Continuing
Directors
    
    
    7  8Executive Officers
    
    
    17Section 16(a) Beneficial Ownership
Reporting Compliance
    
    
    20Corporate Governance Information  Code of Ethics
    
    
    11Corporate Governance Information
  Nominations and Corporate
Governance Committee
    
    
    9  10Corporate Governance Information
  Audit Committee
    
    
    8ITEM 11  EXECUTIVE
COMPENSATION
    
    Director Compensation Information
    
    
    12  14Compensation Discussion and
Analysis
    
    
    20  33ITEM 12  SECURITY
OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS
AND MANAGEMENT AND
RELATED STOCKHOLDER
MATTERS
    
    Security Ownership of Certain
Beneficial Owners
    
    
    18  20ITEM 13  CERTAIN
RELATIONSHIPS AND
RELATED
TRANSACTIONS, AND
DIRECTOR
INDEPENDENCE
    
    Corporate Governance Information
  Review, Approval or Ratification
of Transactions with Related
Persons
    
    
    11  12Corporate Governance Information  Director Independence  Board Meetings and Attendance  Committees  Compensation Committee Interlocks
and Insider Participation
    
    
    8  10Compensation Committee Report
    
    
    26Communicating with Directors
    
    
10
 46




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##### Table of Contents



Caption In The
    
    Page Number In TheTandy Brands Accessories, Inc.
    
    Tandy Brands Accessories, Inc.Item
    
    2007 Proxy Statement
    
    2007 Proxy StatementITEM 14  PRINCIPAL
ACCOUNTANT FEES AND
SERVICES
    
    Proposal Three: Ratification of
Independent Auditor   Background
    
    
    16
 
 PART IV
 
 ITEM 15  EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
 Financial
Statements
  
    
    Consolidated Balance Sheets as of June 30, 2007 and 2006
    
    Consolidated Statements of Operations for the years ended June 30, 2007, 2006, and 2005
    
    Consolidated Statements of Cash Flows for the years ended June 30, 2007, 2006, and 2005
    
    Consolidated Statements of Stockholders Equity for the years ended June 30, 2007, 2006, and 2005
 Financial
Statement Schedules
  Exhibits
  47




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##### Table of Contents



SIGNATURES
  TANDY BRANDS ACCESSORIES, INC.
(Registrant)/s/ J.S.B. JenkinsJ.S.B. JenkinsPresident and Chief Executive Officer   Name
    
    Position
    
    Date/s/ Dr. James F. Gaertner
Dr. James F. Gaertner
    
    Director and
Chairman of the Board
    
    September 21, 2007/s/ J.S.B. Jenkins
J.S.B. Jenkins
    
    Director, President and
Chief Executive
Officer (principal executive officer)
    
    September 21, 2007/s/ Roger R. Hemminghaus
Roger R. Hemminghaus
    
    Director
    
    September 21, 2007/s/ Gene Stallings
Gene Stallings
    
    Director
    
    September 21, 2007/s/ Colombe M. Nicholas
Colombe M. Nicholas
    
    Director
    
    September 21, 2007/s/ George C. Lake
George C. Lake
    
    Director
    
    September 21, 2007/s/ W. Grady Rosier
W. Grady Rosier
    
    Director
    
    September 21, 2007/s/ Mark J. Flaherty
Mark J. Flaherty
    
    Chief Financial Officer
(principal financial and accounting officer)
    
    September 21, 2007
 48




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##### Table of Contents



TANDY BRANDS ACCESSORIES, INC. AND SUBSIDIARIES
EXHIBIT INDEX
 Incorporated by Reference(if applicable)Exhibit Number and Description
    
    Form
    
    Date
    
    File No.
    
    Exhibit(3)     Articles of Incorporation and Bylaws3.1       Certificate of Incorporation of
Tandy Brands Accessories, Inc.
    
    
    S-1
    
    
    
    11/02/90
    
    
    
    33-37588
    
    
    
    3.13.2       Amended and Restated Bylaws of Tandy
Brands Accessories, Inc., effective July
2007
    
    
    8-K
    
    
    
    7/13/07
    
    
    
    0-18927
    
    
    
    3.01(4)     Instruments defining the rights of security
holders, including indentures4.1       Certificate of Designations, Powers,
Preferences, and Rights of Series A
Junior Participating Cumulative
Preferred Stock of Tandy Brands
Accessories, Inc.
    
    
    S-1
    
    
    
    12/17/90
    
    
    
    33-37588
    
    
    
    4.14.2       Form of Common Stock Certificate of
Tandy Brands Accessories, Inc.
    
    
    S-1
    
    
    
    12/17/90
    
    
    
    33-37588
    
    
    
    4.24.3       Form of Preferred Share Purchase
Rights Certificate of Tandy Brands
Accessories, Inc.
    
    
    S-1
    
    
    
    12/17/90
    
    
    
    33-37588
    
    
    
    4.34.4       Form of Rights Certificate of Tandy
Brands Accessories, Inc.
    
    
    8-K
    
    
    
    11/02/99
    
    
    
    0-18927
    
    
    
    44.5       Amended and Restated Rights
Agreement, dated October 19, 1999,
between Tandy Brands Accessories, Inc.
and Bank Boston, N.A.
    
    
    8-K
    
    
    
    11/02/99
    
    
    
    0-18927
    
    
    
    44.6       Amendment to Rights Agreement, dated
October 19, 1999, between Tandy Brands
Accessories, Inc. and Fleet National
Bank (f.k.a. Bank Boston, N.A.)
    
    
    10-Q
    
    
    
    5/10/02
    
    
    
    0-18927
    
    
    
    4.74.7       Amended and Restated Credit
Agreement among Tandy Brands
Accessories, Inc. as the Borrower, Wells
Fargo HSBC Trade Bank, N.A. as
Administrative Agent and as a
Lender, and Certain Financial
Institutions, as Lenders and Wells Fargo
Bank, N.A. as Arranger as of September
7, 2006
    
    
    10-K
    
    
    
    9/22/06
    
    
    
    0-18927
    
    
    
    4.74.8       Amendment to Amended and
Restated Rights Agreement
    
    
    8-K
    
    
    
    5/16/07
    
    
    
    0-18927
    
    
    
    4.1(10)   Material Contracts10.1     Tandy Brands Accessories, Inc.
Benefit Restoration Plan and related Trust
Agreement and Amendments Nos. 1 and 2
thereto*
    
    
    10-K
    
    
    
    9/25/97
    
    
    
    0-18927
    
    
    
    10.1410.2     Amendment No. 3 to the Tandy Brands
Accessories, Inc. Benefit Restoration
Plan, effective as of July 1, 2003*
    
    
    10-K
    
    
    
    9/23/03
    
    
    
    0-18927
    
    
    
    10.32
 1




---



##### Table of Contents



TANDY BRANDS ACCESSORIES, INC. AND SUBSIDIARIES
EXHIBIT INDEX
 Incorporated by Reference(if applicable)Exhibit Number and Description
    
    Form
    
    Date
    
    File No.
    
    Exhibit10.3     Succession Agreement, dated July 1,
2001, between Tandy Brands Accessories,
Inc. and Chase Texas, N.A. (the Former
Trustee) and Comerica Bank  Texas (the
Trustee), relating to the Tandy Brands
Accessories, Inc. Benefit Restoration
Plan*
    
    
    10-K
    
    
    
    9/23/03
    
    
    
    0-18927
    
    
    
    10.3410.4     Form of Indemnification
Agreement between Tandy Brands
Accessories, Inc. and each of its Directors
    
    
    S-1
    
    
    
    12/17/90
    
    
    
    33-37588
    
    
    
    10.1610.5     Form of Indemnification Agreement
between Tandy Brands Accessories, Inc. and
each of its Officers
    
    
    S-1
    
    
    
    12/17/90
    
    
    
    33-37588
    
    
    
    10.1710.6     Tandy Brands Accessories, Inc.
Non-Qualified Formula Stock Option Plan
for Non-Employee Directors*
    
    
    S-8
    
    
    
    2/10/94
    
    
    
    33-75114
    
    
    
    28.110.7     Amendment No. 4 to the Tandy Brands
Accessories, Inc. Nonqualified Formula
Stock Option Plan For Non-Employee
Directors*
    
    
    10-Q
    
    
    
    5/10/02
    
    
    
    0-18927
    
    
    
    10.3910.8     Tandy Brands Accessories, Inc.
Non-Qualified Stock Option Plan for
Non-Employee Directors*
    
    
    S-8
    
    
    
    2/10/94
    
    
    
    33-75114
    
    
    
    28.310.9     Tandy Brands Accessories, Inc. 1995
Stock Deferral Plan for Non-Employee
Directors*
    
    
    S-8
    
    
    
    6/03/96
    
    
    
    33-08579
    
    
    
    99.110.10   Tandy Brands Accessories, Inc. 1997
Employee Stock Option Plan*
    
    
    S-8
    
    
    
    12/12/97
    
    
    
    333-42211
    
    
    
    99.110.11   Amendment No. 2 to the Tandy Brands
Accessories, Inc. 1997 Employee Stock
Option Plan*
    
    
    10-Q
    
    
    
    5/10/02
    
    
    
    0-18927
    
    
    
    10.3810.12   Tandy Brands Accessories, Inc.
Employees Investment Plan, as Amended and
Restated effective July 1, 2000*
    
    
    10-K
    
    
    
    9/26/00
    
    
    
    0-18927
    
    
    
    10.3910.13   Mid-Market Trust Agreement, dated
August 19, 2001, between Tandy Brands
Accessories, Inc. and State Street Bank
and Trust Company, relating to the Tandy
Brands Accessories, Inc. Employees
Investment Plan*
    
    
    10-K
    
    
    
    9/23/03
    
    
    
    0-18927
    
    
    
    10.2810.14   Amendments Nos. 1-3 to the Tandy
Brands Accessories, Inc. Employees
Investment Plan, as Amended and Restated
effective July 1, 2000*
    
    
    10-K
    
    
    
    9/23/03
    
    
    
    0-18927
    
    
    
    10.31
 2




---



##### Table of Contents



TANDY BRANDS ACCESSORIES, INC. AND SUBSIDIARIES
EXHIBIT INDEX
 Incorporated by Reference(if applicable)Exhibit Number and Description
    
    Form
    
    Date
    
    File No.
    
    Exhibit10.15   Succession Agreement, dated June 20,
2002, between Tandy Brands Accessories,
Inc. and Comerica Bank  Texas, (the
Trustee), relating to the Tandy Brands
Accessories, Inc. Employees Investment
Plan*
    
    
    10-K
    
    
    
    9/23/03
    
    
    
    0-18927
    
    
    
    10.3510.16   Amendment No. 4 to the Tandy Brands
Accessories, Inc. Employees Investment
Plan, dated December 22, 2003*
    
    
    10-Q
    
    
    
    2/12/04
    
    
    
    0-18927
    
    
    
    10.3810.17   Nonqualified Stock Option Agreement
for Non-Employee Directors, dated October
16, 2001, by and between Tandy Brands
Accessories, Inc. and Dr. James F.
Gaertner*
    
    
    S-8
    
    
    
    5/15/02
    
    
    
    33-88276
    
    
    
    10.210.18   Nonqualified Stock Option Agreement
for Non-Employee Directors, dated October
16, 2001, by and between Tandy Brands
Accessories, Inc. and Gene Stallings*
    
    
    S-8
    
    
    
    5/15/02
    
    
    
    33-88276
    
    
    
    10.410.19   Nonqualified Stock Option Agreement
for Non-Employee Directors, dated October
16, 2001, by and between Tandy Brands
Accessories, Inc. and Roger R. Hemminghaus*
    
    
    S-8
    
    
    
    5/15/02
    
    
    
    33-88276
    
    
    
    10.510.20   Nonqualified Stock Option Agreement
for Non-Employee Directors, dated October
16, 2001, by and between Tandy Brands
Accessories, Inc. and Colombe M. Nicholas*
    
    
    S-8
    
    
    
    5/15/02
    
    
    
    33-88276
    
    
    
    10.610.21   Tandy Brands Accessories, Inc. 2002
Omnibus Plan*
    
    
    10-Q
    
    
    
    11/12/02
    
    
    
    0-18927
    
    
    
    10.2410.22   Form of Non-Employee Director
Nonqualified Stock Option Agreement
pursuant to the Tandy Brands Accessories,
Inc. 2002 Omnibus Plan*
    
    
    10-K
    
    
    
    9/23/04
    
    
    
    0-18927
    
    
    
    10.3910.23   Form of Employee Nonqualified Stock
Option Agreement pursuant to the Tandy
Brands Accessories, Inc. 2002 Omnibus Plan*
    
    
    10-K
    
    
    
    9/23/04
    
    
    
    0-18927
    
    
    
    10.4010.24   Form of Non-Employee Director
Restricted Stock Award Agreement pursuant
to the Tandy Brands Accessories, Inc. 2002
Omnibus Plan*
    
    
    10-K
    
    
    
    9/23/04
    
    
    
    0-18927
    
    
    
    10.4110.25   Form of Employee Restricted Stock
Award Agreement pursuant to the Tandy
Brands Accessories, Inc. 2002 Omnibus Plan*
    
    
    10-K
    
    
    
    9/23/04
    
    
    
    0-18927
    
    
    
    10.42
 3




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##### Table of Contents



TANDY BRANDS ACCESSORIES, INC. AND SUBSIDIARIES
EXHIBIT INDEX
 Incorporated by Reference(if applicable)Exhibit Number and Description
    
    Form
    
    Date
    
    File No.
    
    Exhibit10.26    Form of Severance Agreement between
Tandy Brands Accessories, Inc. for
Executive and Senior Officers*
    
    
    10-K
    
    
    
    9/23/03
    
    
    
    0-18927
    
    
    
    10.3310.27   Office Lease Agreement, dated January
31, 2004, between Koll Bren Fund VI, LP and
Tandy Brands Accessories, Inc. relating to
the corporate office
    
    
    10-Q
    
    
    
    2/12/04
    
    
    
    0-18927
    
    
    
    10.3610.28  Acknowledgement and Release Agreement
between Tandy Brands Accessories, Inc. and
J.S.B. Jenkins relating to the termination
of the Supplemental Executive Retirement
Plan*
    
    
    8-K
    
    
    
    8/22/05
    
    
    
    0-18927
    
    
    
    10.4510.29   Tandy Brands Accessories, Inc.
Stock Purchase Program (As Amended And
Restated Effective December 1, 2005)*
    
    
    10-Q
    
    
    
    2/10/06
    
    
    
    0-18927
    
    
    
    10.4610.30   Amendments Nos. 5-6 to the Tandy
Brands Accessories, Inc. Employees
Investment Plan, as Amended and Restated
effective July 1, 2000*
    
    
    10-Q
    
    
    
    5/11/06
    
    
    
    0-18927
    
    
    
    10.4410.31   Amendment No. 2 to the Tandy Brands
Accessories, Inc. 1995 Stock Deferral Plan
for Non-Employee Directors*
    
    
    10-K
    
    
    
    9/22/06
    
    
    
    0-18927
    
    
    
    10.3510.32   Amended and Restated Credit Agreement
among Tandy Brands Accessories, Inc. as the
Borrower, Wells Fargo HSBC Trade Bank, N.A.
as Administrative Agent and as a Lender,
and Certain Financial Institutions, as
Lenders and Wells Fargo Bank, N.A. as
Arranger as of September 7, 2006
    
    
    10-K
    
    
    
    9/22/06
    
    
    
    0-18927
    
    
    
    10.3610.33   Amendment No. 4 to the Tandy Brands
Accessories, Inc. Benefit Restoration Plan,
dated July 1, 2001*
    
    
    10-Q
    
    
    
    11/14/06
    
    
    
    0-18927
    
    
    
    10.3710.34   Form of 2006 Performance Unit Award
Agreement pursuant to the Tandy Brands
Accessories, Inc. 2002 Omnibus Plan*
    
    
    10-Q
    
    
    
    2/14/07
    
    
    
    0-18927
    
    
    
    10.3710.35   Amendment No. 7 to the Tandy Brands
Accessories, Inc. Employees Investment
Plan, effective as of January 1, 2006*
    
    
    10-Q
    
    
    
    2/14/07
    
    
    
    0-18927
    
    
    
    10.3810.36   Tandy Brands Accessories, Inc.
Summary of Incentive Bonus Plan for
Executive Officers*
    
    
    8-K
    
    
    
    6/12/07
    
    
    
    0-18927
    
    
    
    5.110.37   Amendment No. 1 to the Tandy Brands
Accessories, Inc. 2002 Omnibus
Plan*  **
    
    
    N/A
    
    
    
    N/A
    
    
    
    N/A
    
    
    
    N/A
 4




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##### Table of Contents



TANDY BRANDS ACCESSORIES, INC. AND SUBSIDIARIES
EXHIBIT INDEX
 Incorporated by Reference(if applicable)Exhibit Number and Description
    
    Form
    
    Date
    
    File No.
    
    Exhibit10.38    Fiscal 2008 Compensation
Summaries* **
    
    
    N/A
    
    
    
    N/A
    
    
    
    N/A
    
    
    
    N/A(21)   Subsidiaries of the registrant21.1      List of subsidiaries**
    
    
    N/A
    
    
    
    N/A
    
    
    
    N/A
    
    
    
    N/A(23)   Consents of experts and counsel23.1      Consent of Ernst & Young LLP**
    
    
    N/A
    
    
    
    N/A
    
    
    
    N/A
    
    
    
    N/A(31)   Rule 13a-14(a)/15d-14(a) Certifications31.1     Certification pursuant to Rule
13a-14(a)/15d-14(a) (Chief Executive
Officer)**
    
    
    N/A
    
    
    
    N/A
    
    
    
    N/A
    
    
    
    N/A31.2     Certification pursuant to Rule
13a-14(a)/15d-14(a) (Chief Financial
Officer)**
    
    
    N/A
    
    
    
    N/A
    
    
    
    N/A
    
    
    
    N/A(32)   Section 1350 Certifications32.1     Section 1350 Certifications (Chief
Executive Officer and Chief Financial
Officer)**
    
    
    N/A
    
    
    
    N/A
    
    
    
    N/A
    
    
    
    N/A
 
 *
    
    Management contract or compensatory plan**
    
    Filed herewith 5