SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report: April 27, 1998
Date of Earliest Event Reported: April 23, 1998
TANDYCRAFTS, INC.
A DELAWARE CORPORATION
1-7258 75-1475224
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(Commission File Number) (IRS Employer Identification No.)
1400 Everman Parkway
Fort Worth, Texas 76140
(817) 551-9600
ITEM 5. OTHER EVENTS
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(a) On April 23, 1997, Registrant issued a press release announcing
the unaudited results of operations for the three- and nine-month
periods ended March 31, 1998.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
---------------------------------
(c) Exhibits.
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Exhibit
Number Description
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99 Copy of press release announcing the
unaudited results of operations for the
three- and nine-month periods ended March 31,
1998.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf of the
undersigned thereunto duly authorized.
TANDYCRAFTS, INC.
Date: April 27, 1998 By:/s/ Michael J. Walsh
--------------------------
Michael J. Walsh, President
and Chief Executive Officer
Date: April 27, 1998 By:/s/ James D. Allen
--------------------------
James D. Allen, Executive Vice
President and Chief Financial
Officer
FOR IMMEDIATE RELEASE
TANDYCRAFTS, INC. REPORTS SIGNIFICANTLY IMPROVED THIRD QUARTER
AND NINE-MONTH EARNINGS
-----------------------
FORT WORTH, TEXAS, APRIL 23, 1998 -- TANDYCRAFTS, INC. (NYSE: TAC) TODAY
ANNOUNCED IMPROVED RESULTS FOR ITS FISCAL THIRD QUARTER ENDED MARCH 31, 1998.
NET INCOME FOR THE QUARTER WAS $198,000, OR $.02 PER SHARE COMPARED TO A NET
LOSS OF $5,701,000, OR $.45 PER SHARE FOR THE SAME QUARTER LAST YEAR. FOR THE
NINE MONTHS ENDED MARCH 31, 1998, THE COMPANY REPORTED NET INCOME OF $4,203,000,
OR $.33 PER SHARE COMPARED TO A NET LOSS OF $2,619,000, OR $.21 PER SHARE, FOR
THE SAME PERIOD LAST YEAR.
For the quarter, net sales were basically flat when compared to the same period
last year with retail sales showing a slight decrease of 3.6% while
manufacturing sales showed a slight increase of 2.3%. Same-store sales at Sav-
On Office Supplies and Tandy Leather increased 1.4% and 2.3%, respectively,
while same-store sales at Joshua's Christian Stores were down 6.1%, reflecting a
shift in Easter sales and less promotional activity. Pinnacle Art & Frame
achieved a sales increase of 15.5%, while sales at the TWI division were down
22.7%, primarily due to soft demand for sports licensed products.
In commenting on the Company's performance, chief executive Michael J. Walsh
stated, "The results for the third quarter of fiscal 1998 continued to show
progress. Excluding a $5.3 million charge taken in the third quarter last year
to restructure the Joshua's chain, consolidated operating income increased
$3,894,000 compared to the same quarter last year. While we have made
significant progress from a year ago, the operating results for this year
continue to reflect a significant amount of investment to strengthen the
marketing and operational capabilities of our businesses. Pinnacle Art & Frame
posted another strong increase in sales and income as that division continues to
strengthen its market position. Sav-On Office Supplies recorded a decrease in
operating income for the quarter reflecting losses from six new stores.
Operating income decreased slightly at the TWI division primarily as a result of
soft demand for sports licensed products. Tandy Leather's operating results
were down slightly reflecting the closure of 12 stores during the quarter;
however, we are encouraged as the efforts to rebuild and broaden Tandy Leather's
unique market position begin to show signs of progress. Same-store sales at
Tandy Leather were up 2.3% for the quarter and 7.4% for the month of March."
Mr. Walsh continued, "Although the Joshua's Christian Stores chain has shown
significant improvement from a year ago, our recent announcement of the sale of
the Joshua's chain to Family Christian Stores reflects management's decision to
recover our investment in that business and continue to focus our resources on
our most profitable and promising operations. As we stated previously, we
expect that sale to close on or about May 31, 1998."
Certain statements contained herein which are not historical facts are forward
looking statements that involve risks and uncertainties including, but not
limited to, customer demand and trends, related inventory risks due to shifts in
customer demand, risks associated with new business opportunities, competition,
dependence on key personnel, the performance of each operating unit,
relationships with key customers, commodity price fluctuations, new product
introductions, interest rate fluctuations, recessionary factors, seasonality and
other risks disclosed in the Company's latest annual report on Form 10-K filed
with the Securities and Exchange Commission.
Tandycrafts, Inc. is a specialty retailer and manufacturer. Included in its
Specialty Retail segment are Tandy Leather Company, Sav-On Office Supplies and
Joshua's Christian Stores. The Specialty Manufacturing segment is comprised of
two manufacturing divisions: Pinnacle Art & Frame and Tandy Wholesale
International.
<TABLE><S><C>
Three Months Ended Nine Months Ended
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March 31, March 31, March 31, March 31,
1998 1997 1998 1997
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Net sales $ 53,100 $ 54,456 $ 181,696 $ 185,472
Operating costs and expenses:
Cost of goods sold 35,766 41,128 120,302 123,548
Selling, general and administrative 14,935 20,062 48,532 59,499
Depreciation and amortization 1,254 1,315 3,783 4,078
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Total operating costs and expenses 51,955 62,505 172,617 187,125
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Operating income (loss) 1,145 (8,049) 9,079 (1,653)
Interest expense, net 841 720 2,614 2,375
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Income (loss) before income taxes 304 (8,769) 6,465 (4,028)
Provision for income taxes 106 (3,068) 2,262 (1,409)
----------- ----------- ----------- -----------
Net income (loss) $ 198 $ (5,701) $ 4,203 $ (2,619)
=========== =========== =========== ===========
Net income (loss) per share -
basic and diluted $ 0.02 $ (0.45) $ 0.33 $ (0.21)
=========== ========== =========== ===========
Weighted average common shares 12,649 12,565 12,657 12,369
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Joshua's Sav-On
Tandy Leather Christian Office
Retail Bookstores Supplies
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Number of stores 140 58 41
QUARTER:
Net sales 8,983 6,310 9,971
Same store sales gains / (losses) 2.3% (6.1)% 1.4%
NINE MONTHS:
Net sales 28,789 24,393 30,238
Same store sales gains / (losses) (1.1)% 8.7% 5.4%
</TABLE>
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