SECURITIES AND EXCHANGE COMMISSION
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report: August 19, 1998
Date of Earliest Event Reported: August 12, 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 August 12, 1998, Registrant issued a press release announcing
the results of operations for the three- and twelve-month periods
ended June 30, 1998.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
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(c) Exhibits.
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Exhibit
Number Description
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99 Copy of press release announcing the results of
operations for the three- and twelve-month
periods ended June 30, 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: August 19, 1998 By:/s/ Michael J. Walsh
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Michael J. Walsh
President
Date: August 19, 1998 By:/s/ James D. Allen
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James D. Allen
Chief Financial Officer
TANDYCRAFTS REPORTS E.P.S.OF $0.37 FOR FISCAL YEAR 1998,
COMPARED WITH PRIOR-YEAR LOSS
Fort Worth, Texas (August 12, 1998) -- TANDYCRAFTS, INC. (NYSE: "TAC") today
announced significantly improved operating results for its 1998 fiscal year.
For the fiscal year ended June 30, 1998, net income improve to $4,617,000 ($0.37
per share), compared with a net loss of $1,918,000, ($0.15 per share) for the
fiscal year ended June 30, 1997. Results during FY1997 included a repositioning
charge equivalent to $0.28 per share. Net sales approximated $232.5 million in
FY1998, versus approximately $244.9 million in the previous year.
The Company reported a net profit of $414,000 ($0.03 per share) for the fourth
quarter of FY1998, compared with net income of $701,000 ($0.06 per share) in the
year-earlier quarter. However, results during the most recent quarter included
the recognition of a pretax loss on the sale of the Joshua's Christian Stores
division totaling approximately $623,000 Excluding this non-recurring loss, net
income during the fourth quarter of FY1998 would have approximated $819,000.
Net sales of $50.8 million during the quarter ended June 30, 1998 compared with
$59.5 million in the prior-year quarter. The declines in net sales during the
fourth quarter and fiscal year ended June 30, 1998 primarily reflect the closure
of unprofitable retail stores and the absence of sales from divested units,
including the Company's Joshua's Christian Stores division (which was sold in
May 1998).
"We were very pleased with the earnings turnaround which was accomplished during
Fiscal 1998, following two years of restructuring efforts and net losses,"
stated Michael J. Walsh, Chief Executive Officer of Tandycrafts, Inc. "However,
our progress in positioning Tandycrafts for long-term growth and prosperity was
even more important than the improvement in financial results. We sold our
Joshua's Christian Stores division and continued to take the actions necessary
to reposition and strengthen the Tandy Leather division. Such actions included
closing 40 unprofitable stores, strengthening divisional management, improving
store operations, and updating and introducing new products in order to appeal
to a broader customer base. We believe that these and other efforts, including
the development of strong wholesale and mail order distribution channels, will
be instrumental in transforming Tandy Leather into a more profitable division
with significant growth potential."
"Our balance sheet was strengthened through a further reduction in long-term
debt outstanding, which totaled $34.2 million on June 30, 1998, compared with
$53.3 million two years earlier. We expect to make additional reductions in
long-term debt balances during Fiscal 1999. As of June 30, 1998, our
shareholders' equity totaled $89 million, which is equivalent to $7.05 per
common share outstanding."
"We have recently realigned the Company's divisional operations along product
lines. Our four new divisions are LEATHER AND CRAFTS (Tandy Leather), FRAMES
AND WALL DECOR (Pinnacle and J-Mar), OFFICE SUPPLIES (Sav-On), and NOVELTIES AND
PROMOTIONAL (Licensed Lifestyles and Rivertown Button). This realignment
supports a more efficient management structure and allows our operating
divisions to more effectively focus upon their core, product-related business
processes and capabilities."
"Looking ahead, we have scheduled a number of projects which should strengthen
our corporate infrastructure, expand divisional capabilities, and support
management's goal of consistent financial performance in the future. The
current fiscal year will see a strategic investment in additional manufacturing
capacity for the Frames and Wall Decor division, along with the unveiling of a
new retail concept developed by the Leather and Crafts Division. More
information on these projects will become available in coming months. Fiscal
1999 will be another important year for our Company, as we continue to execute
our strategy to position each of our divisions for long-term growth and
profitability," concluded Walsh.
Tandycrafts, Inc. manufactures, distributes and/or retails products through four
distinct project-related divisions: Frames and Wall Decor, Leather and Crafts,
Office Supplies, and Novelties and Promotional. Its products are marketed and
sold through various channels, including direct-to-consumer (e.g., retail
stores, mail order, the Internet) and wholesale distribution (e.g., direct sales
force, telemarketing, outside sales representatives). The Company is
headquartered in Fort Worth, Texas and its common stock is listed on the New
Stock Exchange under the ticker symbol "TAC".
This press release includes statements that may constitute "forward-
looking" statements, usually containing the words "believe",
"estimate", "project", "expect" or similar expressions. These
statements are made pursuant to the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995. Forward-looking
statements inherently involve risks and uncertainties that could cause
actual results to differ materially from the forward-looking
statements. Factors that would cause or contribute to such
differences include, but are not limited to, continued acceptance of
the Company's products in the marketplace, competitive factors,
dependence upon third-party vendors, and other risks detailed in the
Company's periodic report filings with the Securities and Exchange
Commission. By making these forward-looking statements, the Company
undertakes no obligation to update these statements for revisions or
changes after the date of this release.
For further information, please contact:
James Allen, Chief Financial Officer at (817) 551-9600 or
R. Jerry Falkner, CFA, Investor Relations Counsel at (800) 377-9893
TANDYCRAFTS, INC.
AND SUBSIDIARIES
SELECTED FINANCIAL HIGHLIGHTS
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Three Months Ended
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(000)
June 30 June 30
1998 1997
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NET SALES $ 50,799 $ 59,452
Operating Costs & Expenses:
Cost of Goods Sold 33,182 36,777
Selling, General & Administrative 14,650 19,686
Loss on Sale of Business Unit 623 -
Depreciation and Amortization 1,045 1,296
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Total Operating Costs & Expenses 49,500 57,759
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Operating Income 1,299 1,693
Interest Expense, net 645 710
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Income Before Taxes 654 983
Provision for Income Taxes 240 282
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Net Income $ 414 $ 701
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Net Income Per Share:
Basic and Diluted $ 0.03 $ 0.06
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Weighted Average Common Shares:
Basic 12,617 12,585
Diluted 12,663 12,585
TANDYCRAFTS, INC.
AND SUBSIDIARIES
SELECTED FINANCIAL HIGHLIGHTS
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Fiscal Years Ended
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(000)
June 30 June 30
1998 1997
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NET SALES $ 232,495 $ 244,924
Operating Costs & Expenses:
Cost of Goods Sold 153,484 160,325
Selling, General & Administrative 63,182 79,185
Loss on Sale of Business Unit 623 -
Depreciation and Amortization 4,828 5,374
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Total Operating Costs & Expenses 222,117 244,884
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Operating Income 10,378 40
Interest Expense, net 3,259 3,085
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Income (Loss) Before Taxes 7,119 (3,045)
Provision (Benefit) for Income Taxes 2,502 (1,127)
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Net Income (Loss) $ 4,617 $ (1,918)
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Net Income Per Share:
Basic and Diluted $ 0.37 $ (0.15)
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Weighted Average Common Shares:
Basic 12,645 12,423
Diluted 12,659 12,423
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