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: October 27, 1999
Date of Earliest Event Reported: October 21, 1999
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 October 21, 1999, Registrant issued a press release announcing
the unaudited results of operations for the three months ended
September 30, 1999.
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 unaudited
results of operations for the three- months ended
September 30, 1999.
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: October 27, 1999 By:/s/ Michael J. Walsh
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Michael J. Walsh
President
Date: October 27, 1999 By:/s/ James D. Allen
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James D. Allen
Chief Financial Officer
Date: October 27, 1999 By:/s/ Troy A. Huseman
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Troy A. Huseman
Controller and
Chief Accounting Officer
CONTACT: Jim Allen
Tandycrafts, Inc. (817) 551-9600
([email protected])
FOR IMMEDIATE RELEASE or
Jeff Lambert, Brian Edwards ([email protected])
Lambert, Edwards & Associates, Inc. (616) 233-0500
TANDYCRAFTS ANNOUNCES FIRST QUARTER RESULTS
FORT WORTH, Texas, October 21, 1999 --Tandycrafts, Inc. (NYSE: TAC) today
announced financial results for its fiscal 2000 first quarter ended September
30, 1999.
The Fort Worth, Texas-based consumer products company reported a net loss of
$128,000, or $0.01 per share, on net sales of $45.1 million in the fiscal 2000
first quarter, compared with net income of $1.0 million, or $0.08 per share, on
net sales of $51.1 million in the same period last year. Net sales from
continuing operations increased 8.2 percent over the prior-year quarter, due
primarily to the consolidation of Cargo Furniture, Inc.
Revenues from Cargo, combined with a modest increase in sales at the Company's
Gifts division, helped offset a 4.2 percent sales decrease versus the year-ago
quarter at the Company's Frames and Wall Decor division and a 3.9 percent
decrease in sales at the Company's Sav-On office supplies chain. Tandycrafts
attributed the sales decline in the Frames and Wall Decor division primarily to
the decision of a major customer to delay the placing of orders until the second
quarter of fiscal 2000. The Company said order flow from that customer is
currently running 17 percent ahead of last year in the second quarter of fiscal
2000. The Company said sales at Sav-On were impacted by increased competition
in key markets.
"Our results in the first quarter mask substantial progress in our effort to
divest underperforming and unprofitable operations and to invest in those that
have strong potential," said Michael J. Walsh, president and chief executive
officer of Tandycrafts. "We made several significant steps toward our overall
goal of reshaping Tandycrafts as a valued supplier of products for the home and
office. We expanded our manufacturing capacity, hired new personnel to enhance
our marketing and operational capabilities and sharpened our focus on
accountability throughout the organization. These investments of capital and
human resources have brought us new opportunities and capacity that will benefit
the entire company and help restore long-term profitability."
Tandycrafts reported that consolidated operating income decreased to $436,000 in
the fiscal 2000 first quarter, due primarily to higher-than-expected losses at
the Company's Licensed Lifestyles unit, which markets sports-related products.
Tandycrafts said operating losses at its Cargo Furniture, J-Mar and Tandy
Leather Direct units were in line with expectations and were primarily the
result of increased investment in personnel and systems to accelerate the
turnaround of these units. Operating income was lower in the Frames and Wall
Decor division, due mostly to lower sales levels and increased expense related
to the launch of the new frame manufacturing facility in Durango, Mexico.
Operating income at Sav-On was essentially flat despite lower sales, due to
improved margins and better expense management.
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TANDYCRAFTS, INC. /PAGE 2
"All of our operating units are on track with our expectations, with the
exception of Licensed Lifestyles," Walsh continued. "Sales were up at our Gifts
division versus the same quarter last year, despite a 21.4 percent decrease at
our Licensed Lifestyles unit. The increased sales in the Gifts division are due
in large part to sales through Tandy Leather Direct (www.tandyleather.com),
which is yielding strong initial results. However, costs involved with
marketing and merchandising Tandy Leather Direct resulted in lower operating
profitability," Walsh said. "Executive management and the board are currently
evaluating each of the operations in our Gifts division to determine what role
if any they will play in the future of Tandycrafts."
"The Home Furnishings Division, consisting of Cargo Furniture, enjoyed strong
sales momentum and is on track with our expectations," said Walsh. "Cargo
Furniture is progressing smoothly with its store conversion process, which is
yielding strong volume increases at newly converted Cargo Home Collection
stores. In addition, Cargo is in the process of strengthening its dealer
support through new marketing and merchandising efforts, systems upgrades and a
newly hired dealer support manager. The Company is also focusing on designing
and developing new products in the growing and underserved niche of children's
furniture."
Walsh continued: "Moving forward, both Cargo and Tandycrafts de Mexico will play
central roles as we shift toward becoming a consumer-focused company that offers
products for the home and office. We are focused on building a strong stable of
complementary products and brands that appeal to our core consumer."
"The first quarter continues the progress begun in fiscal 1999, which was a
highly productive year for the Company as we focused on strategically
positioning Tandycrafts for the future," said Jim Allen, executive vice
president and chief operating officer of Tandycrafts. "While we still have some
transitional issues to address in the near term, we are poised for the future
with a new vision and growth strategy for the Company."
Tandycrafts, Inc. (www.tandycrafts.com) is a leading maker and marketer of
consumer products, including frames and wall decor, office supplies, home
furnishings and gift products. The Company's products are sold nationwide
through wholesale distribution channels, including mass merchandisers and
specialty retailers, and direct-to-consumer channels through the Company's
retail stores, mail order and the Internet.
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.
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TANDYCRAFTS, INC.
AND SUBSIDIARIES
SELECTED FINANCIAL HIGHLIGHTS
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Three Months Ended
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(000)
September 30 September 30
1999 1998
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Net Sales $ 45,134 $ 51,065
Operating Costs & Expenses:
Cost of Goods Sold 30,497 34,791
Selling, General & Administrative 13,131 13,077
Depreciation and Amortization 1,070 1,079
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Total Operating Costs & Expenses 44,698 48,947
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Operating Income 436 2,118
Interest Expense, net 643 492
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Income (Loss) Before Income Taxes (207) 1,626
Provision for Income Taxes (79) 618
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Net Income (Loss) $ (128) $ 1,008
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Net Income (Loss) Per Share:
Basic and Diluted $ (0.01) $ 0.08
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Weighted Average Common Shares:
Basic 12,011 12,472
Diluted 12,011 12,475
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