Tandy Leather Factory Inc 8-K, filed Jun 3, 2020
Tandy Leather Factory Inc (TLF)
8-K
2020-06-03
For: 2020-06-02
View Original
Added on
April 08, 2026
About this 8-K
Tandy Leather Factory Inc filed this 8-K on June 3, 2020, reporting on events of June 2, 2020.
Items reported
- Item 2.02: Financial results
- Item 5.07: Shareholder vote results
- Item 9.01: Financial statements and exhibits
UNITED STATES
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
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Date of report (Date of earliest event reported:)
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June 2, 2020
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Tandy Leather Factory, Inc.
(Exact Name of Registrant as Specified in Its Charter)
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Delaware
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(State or Other Jurisdiction of Incorporation
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1-12368
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75-2543540
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(Commission File Number)
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(IRS Employer Identification Number)
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1900 Southeast Loop 820, Fort Worth, Texas
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76140
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(Address of Principal Executive Offices)
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(Zip Code)
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(817) 872-3200
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(Registrant’s Telephone Number, Including Area Code)
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(Former Name or Former Address, if Changed Since Last Report)
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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
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☐
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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☐
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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☐
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Securities registered pursuant to Section 12(b) of the Act:
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Title of each class
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Trading Symbol(s)
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Name of each exchange on which registered
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Common Stock, par value $0.0024
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TLF
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The Nasdaq Global Market
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the
Exchange Act. ☐
| Item 2.02 |
Results of Operations and Financial Condition
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On June 2, 2020, in connection with the Company’s annual meeting of stockholders, the Company held a publicly-announced webcast to discuss selected operating results for fiscal year 2019 and 2020
to date, the impact on the Company of the COVID-19 crisis and plans for the future of the Company’s business following this crisis. The written Management Presentation from that webcast is furnished as Exhibit 99.1 to this Current Report on Form
8-K.
The information furnished pursuant to this Item 2.02, including Exhibit 99.1 furnished herewith, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as
amended (the “Exchange Act”), nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such a filing. The information
furnished pursuant to this Item 2.02, including Exhibit 99.1 furnished herewith, contains “forward- looking statements” within the meaning of the safe harbor provisions of the federal securities laws. It should be read in conjunction with the
introductory note on forward-looking statements contained in the management presentation, the risk factors included in the Company’s periodic reports filed with the Securities and Exchange Commission and the other public announcements that the
Company may make, by press release or otherwise, from time to time.
| Item 5.07 |
Submission of Matters to a Vote of Security Holders.
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The Company’s annual meeting of stockholders was held on June 2, 2020. The four proposals considered at the annual meeting were voted on as follows:
Proposal 1: The election of seven directors for the ensuing year. The number of votes cast for and withheld for each nominee for director is
set forth below.
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NOMINEE:
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FOR:
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WITHHELD:
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Vicki Cantrell
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5,331,983
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218,778
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Janet Carr
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5,543,695
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7,066
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Jefferson Gramm
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5,513,395
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37,366
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Sharon M. Leite
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5,520,461
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30,300
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James Pappas
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5,550,761
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0
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Sejal Patel
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5,549,595
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1,166
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William M. Warren
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4,642,993
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907,768
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Proposal 2: Ratification of the extension of the Tandy Leather Factory, Inc. 2013 Restricted Stock Plan and
reservation of additional shares for issuance under the plan. The number of votes cast for and against this proposal, as well as the number of abstentions with respect to this proposal, are set forth below:
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FOR
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AGAINST
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ABSTAIN
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5,517,513
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33,248
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0
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Proposal 3: Ratification of the appointment of the Company’s independent accounting firm for 2020. The
number of votes cast for and against this proposal, as well as the number of abstentions with respect to this proposal, are set forth below:
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FOR
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AGAINST
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ABSTAIN
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5,544,861
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5,900
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0
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Proposal 4: Advisory vote regarding executive compensation. The number of votes cast for and against this
proposal, as well as the number of abstentions with respect to this proposal, are set forth below:
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FOR
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AGAINST
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ABSTAIN
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5,520,461
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30,300
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0
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| Item 9.01 |
Financial Statements and Exhibits.
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(d) Exhibits
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No.
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Exhibit
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Management Presentation dated June 2, 2020
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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 by the undersigned hereunto duly authorized.
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TANDY LEATHER FACTORY, INC.
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Date: June 3, 2020
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By:
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/s/ Janet Carr |
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Janet Carr, Chief Executive Officer
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Exhibit 99.1
Annual Meeting of Shareholders June 2, 2020Management Presentation
Tandy Strategy Overview Introduction
Long-term strategy to drive sales and earnings growthOur assessment revealed strengths and
opportunities……Leading to key actions we need to take to grow2019: a year of investment – and restatementWe are now also addressing COVID-19 INTRODUCTION Today’s presentation will include statements, other than historical results, that
constitute forward-looking statements within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934, each as amended. These statements reflect our expectations or estimates based on the information we have today
but are not guarantees or predictions of future performance. They involve known and unknown risks, uncertainties and other factors, many of which are beyond our control, and which may cause actual results to differ materially from the
statements contained in this presentation. You are cautioned not to put undue reliance on these forward-looking statements. The Company assumes no obligation to update or otherwise revise these forward-looking statements, except as required
by law.
TANDY STRATEGY StrengthsBrand awareness and strong equityOur stores are a key competitive
advantage100-year old heritage
TANDY STRATEGY OpportunitiesPricing was too high and complicated Consumer perception of inconsistent
quality targeted at beginnersCompetitors have been winning with high-value consumer segmentsCustomers outgrow TandyTalent, process, tools, systems to execute strategic initiatives need rebuilding
Our Core Today Customer Type Hobbyist End Use Hobbyist-Maker Etsy Small/Home Business Medium
Business Large Business/ National Chain Traditional Tooled Leather Bags/SLGs Costumes Books Fetish/BDSM Furniture Shoes Jewelry Art/Sculpture Smaller Bigger Not Our Expertise Gun/Knife Our Expertise TANDY
STRATEGY Future Opportunity Future Opportunity
Strategic ActionsImprove the brand propositionReverse the decline with business customersBuild the
talent, process, tools, systemsPosition for long-term growth TANDY STRATEGY Started in 2019, these actions require multi-year investment
Long-term growthOnlineInternationalChains and institutions TANDY STRATEGY We have already made
significant progress in building our online business
Strategy & Performance 2019 Summary
Improve our brand proposition with key consumer segmentsAssess and build the infrastructure and
operating modelBuild the team 2019 GOALS: FOUNDATION BUILDING
2019
INITIATIVES 2019 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 1 Improve Consumer Proposition 3 Build Team 2 Assess and Build Infrastructure New approach
to pricing and promotionNew web platform and experienceImprove product line, flow of newness, quality of leatherNumerous initiatives to improve store experienceMore effective digital and direct mail communicationsLaunch Commercial
Division Create and use budget, basic retail metrics, forecasting model Reorganize field team and create field training programReorganize compensation, incentives, career path, and improve total employee experienceCreate 2-way communication
channel with employees (Town Halls, weekly Zone Manager calls, Store Manager meetings, etc.)New integrated systems: GL, POS and WMS and WebDistribution Center efficiencies and optimization 2020
Changes accounting for $3MM in sales declineClosed 5 stores Stopped selling on Amazon, Ebay and
Walmart.comMade Leathercraft Library freeEnded Wholesale Clubs 2019 SALES Remaining decline attributed to start-up effects of a new team 10% decline from 2018 ($3,043) ($5,269) Sales on fiscal calendar 2019 Sales Bridge ($000)
Inventory not correctly stated at FIFOWarehousing and handling not correctly capitalizedWarehousing and
handling incorrectly classified as operating expensesOn track to complete by August 10, 2020 RESTATEMENT
COVID-19 Response & Outlook 2020
Demonstrate success of our consumer-facing strategiesSubstantially complete key infrastructure
initiativesEvaluate and test growth opportunitiesComplete restatement by August 10, 2020 2020 PLAN
TIMELINE Shelter-in-place order in Northern California;Store closures begin MAR 17 All Tandy stores
close to public; 20 stores operating behind the scenes MAR 22 Fort Worth warehouse ships 532 orders APR 9 All but 13 stores close fully; 406 employees furloughed; corporate employees work remotely APR 2 March sale begins28 stores
closed MAR 19 MAY 6 4 Stores begin testing curbside pickup Fort Worth warehouse ships 1,004 orders MAY 11 MAY 22 Fort Worth Flagship store reopens JUN 2 3 more stores open to public
COVID-19 RESPONSE Focus on web fulfillmentRetooled to drive online business and fulfill all web orders
out of Fort WorthAble to ship over 1,500 direct-to-consumer orders from our warehouse dailyCreated virtual customer service and phone order team
2020 SALES Increase in online sales Online orders up 200% from last year Decline in total sales 1Q –
18% declineApril – 60% declineMay – 40% decline (17.7%) (60.1%) % Total Sales Change (39.6%) Sales on retail calendar
COVID-19 RESPONSE Focus on conserving capital and protecting liquidity406 employees furloughed or laid
off on April 2Reduced SG&A expenses, including salary cutsPaused product purchasesNegotiated abatements, deferrals and longer-term reductions in rent8 stores permanently closed Do we want to put cost savings on the page?
COVID-19 RESPONSE Closed storesPhoenix AZAustin TXDallas TXPeoria ILRichmond VANyack
NYJohnston RISt Leonard QC
COVID-19 RESPONSE Operating Expense Impact ($000) Total cost to exit: $183 in 2020 SG&A
savings: $1,586 annually approx. +$530 annually Net Cash Impact ($000) Store Closures Sales Impact ($000) 55% Est. Sales Lost 45% Est. Sales Retained $3,474 2019 Sales I’m taking this off the page but leaving in comments?
WHERE WE ARE NOW Reopening stores where possiblePrioritize the safety of our employees, customers and
community10 stores currently offering curbside pickup (plus 2 more by June 5)Fort Worth Flagship location opened to customers This is a gradual process, as we monitor and assess business and environment factors for each store June 2El Paso
TXPortland OROklahoma City OK June 5Columbus OHBillings MTBerlin CT Pittsburgh PADenver COPhoenix AZ 10 total stores will have reopened to the public by June 5
OUTLOOK Protecting long-term valuePositioning to reemerge strongSolid strategy to build on
QUESTIONS To ask a question, please message Daniel Ross in the Zoom chat and he will facilitateIf you
are calling in on a phone line and would like to ask a question, please email Dan Ross at daniel.ross@tandyleather.com