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: February 22, 2000
Date of Earliest Event Reported: February 15, 2000
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 February 15, 2000, Registrant issued a press release
announcing a strategic plan aimed at focusing the Company on its
frames and wall decor, home furnishings and consumer direct
operations. The plan involves selling Tandycrafts' non-core
Gifts and Office Supply divisions and completing certain
significant operating improvements in the Company's core
businesses in 2000.
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 a strategic plan
aimed at focusing the Company on its frames and wall
decor, home furnishings and consumer direct
operations. The plan involves selling Tandycrafts'
non-core Gifts and Office Supply divisions and
completing certain significant operating
improvements in the Company's core businesses in
2000.
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: February 22, 2000 By:/s/ Michael J. Walsh
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Michael J. Walsh, Chairman
and Chief Executive Officer
Date: February 22, 2000 By:/s/ James D. Allen
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James D. Allen, President
and Chief Operating Officer
CONTACT: Jim Allen, Leo Taylor
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 INC. UNVEILS STRATEGIC GROWTH PLAN
COMPANY WILL FOCUS ON HOME DECOR, SELL OFFICE SUPPLY AND GIFTS DIVISIONS IN 2000
FORT WORTH, Texas, February 15, 2000 - Tandycrafts, Inc. (NYSE: TAC) today
announced a strategic plan aimed at focusing the Company on its frames and wall
decor, home furnishings and consumer direct operations. The plan, which
Tandycrafts said it has already begun implementing, entails selling Tandycrafts'
non-core Gifts and Office Supply divisions and completing significant operating
improvements in the Company's core businesses in 2000.
The Fort Worth, Texas-based consumer products maker and marketer said the net
cash proceeds to the Company from the planned transactions will be used to
reduce debt and grow continuing operations. Tandycrafts said it may incur a
non-recurring charge as a result of the divestitures, depending on the amount of
the proceeds.
Tandycrafts also plans aggressive operating improvements with expected annual
cost-savings and benefits of approximately $10 million when fully implemented.
These targeted initiatives include the move of Tandycrafts' frame manufacturing
facility from California to Mexico; the conversion of its Cargo Furniture stores
to a more profitable format; reduced product costs through new sourcing
arrangements; the shift of Tandy Leather Direct to full e-commerce capability;
and a reduction in Tandycrafts' corporate overhead.
"Our growth engine is our home decor business, and the board and management team
agree that the Company needs to focus on these core opportunities," said Michael
J. Walsh, Tandycrafts chairman of the board and chief executive officer. "We
have been working to position our non-core assets for a sale and, at the same
time, making operating changes and investments in our core business that will
drive profitable growth. The strategic plan brings these pieces together and
sets an aggressive timetable for completion in calendar 2000."
Walsh added: "The divestiture process is already underway. Our intent is to
expedite the sale of these businesses with the goal of maximizing their value
for Tandycrafts' shareholders."
Included among the planned divestitures in Tandycrafts' Gifts Division are:
Licensed Lifestyles, which markets licensed sports-related memorabilia;
Rivertown Button, a manufacturer of buttons, ribbons and promotional items; and
J-Mar, which sells paper products and general consumer and inspirational
Christian gifts. Tandycrafts also intends to sell its Sav-On Office Supplies
business, a 41-store chain serving the small office and home office (SOHO)
market in 11 Southern states.
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TANDYCRAFTS INC. / PAGE 2
"Sav-On is a very viable, profitable format and a strong niche player in the
office supplies market," Walsh said. "However, because of our focus on home
decor, we believe a strategic buyer can better maximize its potential.
Tandycrafts shareholders and the valuable associates at Sav-On will be best
served with a sale of this operation to a buyer that will give it the necessary
focus and investment. The same is true for the companies in the Gifts Division.
They represent viable businesses run by solid people. They simply are not the
right fit for Tandycrafts as we work to refine our focus."
Jim Allen, president and chief operating officer of Tandycrafts, added: "Our
commitment to shareholders was to rationalize the Company while investing in the
areas of our business with the most dynamic growth potential. This plan clearly
signals the outcome: Pinnacle Art & Frame, Cargo Furniture and Tandy Leather
Direct are the foundation upon which the future of Tandycrafts will be built."
Following the execution of this plan, Tandycrafts will consist of three
profitable core operations: Pinnacle Art & Frame, one of the nation's leading
manufacturers and marketers of frames, framed art, wall decor and mirrors for
mass merchandisers, and specialty retailers; Cargo Furniture, a leading designer
and marketer of children's and casual furniture and accessories; and
Tandycrafts' mail order and Internet business, Tandy Leather Direct
(www.tandyleather.com).
"When we complete the execution of this plan, we expect to have an extremely
focused and profitable company, revealing how truly undervalued Tandycrafts
stock is relative to our earnings potential," Allen said.
Tandycrafts will discuss the plan on a conference call with analysts this
morning. Interested investors can listen to a replay of the call after 1 p.m.
CST today by calling 1-800-625-5288.
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,
successful implementation of this strategic plan, 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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