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

Date of report (Date of earliest event reported:)
November 14, 2022


Tandy Leather Factory, Inc.
(Exact Name of Registrant as Specified in Its Charter)

Delaware
(State or Other Jurisdiction of Incorporation

1-12368
75-2543540
(Commission File Number)
(IRS Employer Identification Number)

1900 Southeast Loop 820, Fort Worth, Texas
76140
(Address of Principal Executive Offices)
(Zip Code)

(817) 872-3200
(Registrant's Telephone Number, Including Area Code)


(Former Name or Former Address, if Changed Since Last Report)

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):

☐
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class
 Trading Symbol(s) Name of each exchange on which registered
Common Stock, par value $0.0024
 TLF
 Nasdaq
 
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

On November 14, 2022, Tandy Leather Factory, Inc. (the “Company”) issued a press release (the “Press Release”) and filed its Quarterly Report on Form 10-Q announcing its financial results for the third fiscal quarter of 2022.  A copy of the Press Release is attached as Exhibit 99.1.

The information furnished pursuant to Item 2.02 of this report and the exhibits attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 as amended (the “Exchange Act”, or otherwise subject to liabilities under that section, nor shall they be deemed incorporated by reference in any filing of the Company with the Securities and Exchange Commission under the Exchange Act or the Securities Act of 1933, as amended (the “Securities Act”), whether made before or after the date hereof, except as shall be expressly set forth by specific reference in such filing.

Item 9.01
Financial Statements and Exhibits.

(d)
Exhibits


No.
Exhibit

Press Release dated November 14, 2022

Forward Looking Statements

Certain statements contained in this report and other materials the Company files with the SEC, as well as information included in oral statements or other written statements made or to be made by the Company, other than statements of historical fact, are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements generally are accompanied by words such as “may,” “will,” “could,” “should,” “anticipate,” “believe,” “budgeted,” “expect,” “intend,” “plan,” “project,” “potential,” “estimate,” “continue,” “outlook,” “forecast” or “future,” variations thereof or other similar statements. Please refer to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2021 for additional information concerning these and other uncertainties that could negatively impact the Company. The Company assumes no obligation to update or otherwise revise its forward-looking statements, except as required by law.

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.
 
TANDY LEATHER FACTORY, INC.



Date:
 November 14, 2022 By:
 /s/ Janet Carr


Janet Carr, Chief Executive Officer


Exhibit 99.1
FOR IMMEDIATE RELEASE
November 14, 2022
Tandy Leather Factory Reports Third Quarter 2022 Results and Opening of a New Store at Fort Bragg Army Base
FORT WORTH, TEXAS – November 14, 2022 (GLOBE NEWSWIRE) – Tandy Leather Factory, Inc. (Nasdaq: TLF) today announced the Company’s financial results for the third quarter, ended September 30, 2022.
Third Quarter Highlights:

•
Net sales of $19.1 million

•
Gross profit of $11.6 million and a gross margin of 60.8%

•
Operating income of $1.0 million

•
Net income of $0.7 million, or $0.09 per diluted share

•
Adjusted EBITDA* of $1.5 million

•
Ended the quarter with $3.1 million in cash and cash equivalents

Tandy Leather Factory’s third quarter sales were $19.1 million in 2022, down from $19.3 million in 2021.  2022 third quarter gross profit was $11.6 million versus $11.1 million in 2021.  As of September 30, 2022, the Company held $3.1 million of cash and cash equivalents, down from $10.2 million at year end and the Company’s September 30, 2021, balance of $6.1 million.  The Company held inventory of $42.3 million, versus $43.7 million as of September 30, 2021.  The Company had net basic and diluted net income in the quarter of $0.09 per diluted share, which was up from net basic and diluted losses of less than $0.01 in the prior year.  Additional details regarding the Company’s third quarter 2022 results can be found in its Quarterly Report on Form 10-Q, filed with the SEC on November 14, 2022.
 
Janet Carr, Chief Executive Officer of the Company, said, “Our improved gross margins reflect the traction we’ve been gaining with our everyday-low-price pricing strategy which is driving higher full-priced selling as our promotional events come in softer.  Our margins are also helped by product and customer channel mix shifts with stronger growth in proprietary products and ecommerce. These factors, coupled with our concerted efforts to manage operating expenses, allowed us to grow the bottom line even against the modest decline in top-line sales.
 
“That said, we don’t see the consumer demand environment improving anytime soon.  Continued global inflation, rising labor costs and the current threat of recession are likely to prolong today’s very tough retail environment for the foreseeable future.  In Q3, we have nimbly refocused from sales growth initiatives (against significant headwinds) to drive profit and cash.  We are building our 2023 plan to deliver cash and profit growth under the assumption that consumer demand will continue to be soft – by optimizing gross profit dollars and proactive reductions in operating expenses.”
 
The Company also announced the opening of its 104th store at the concession mall at the Fort Bragg Army Base in North Carolina.  Tandy has a strong affinity with members of the military and believes this store will be an important test of the potential for other military locations around the world.
 
As previously announced, the Company will host an investor presentation online (via Zoom) and by phone on November 15, 2022, at 9:00 am CT to discuss the Company’s third quarter operating results and longer-term strategies.  Investors and other interested participants may attend the presentation on the web or by phone as follows:
Join Zoom Meeting online:  https://us02web.zoom.us/j/83006771719
Meeting ID: 830 0677 1719
By phone using one tap mobile
+13462487799,,83006771719# US (Houston)
+16694449171,,83006771719# US
Or Dial by your location and when prompted enter Meeting ID: 830 0677 1719
+1 346 248 7799 US (Houston)
 +1 669 444 9171 US
 +1 669 900 6833 US (San Jose)
 +1 719 359 4580 US
 +1 253 215 8782 US (Tacoma)
 +1 309 205 3325 US
 +1 312 626 6799 US (Chicago)
 +1 360 209 5623 US
 +1 386 347 5053 US
 +1 507 473 4847 US
 +1 564 217 2000 US
 +1 646 931 3860 US
 +1 689 278 1000 US
 +1 929 205 6099 US (New York)
 +1 301 715 8592 US (Washington DC)
Find your local number:https://us02web.zoom.us/u/kdFJEio280
*  Adjusted EBITDA is a non-GAAP financial measure that excludes depreciation and amortization, interest expense, income tax provision (benefit), non-routine items, and stock-based compensation expense (which does not require settlement in cash) in order to provide helpful information to investors to facilitate a comparison of the Company’s operating performance to that of other companies. Non-routine items are primarily legal and accounting costs associated with the restatement.  The following is a reconciliation of the Company’s net loss to Adjusted EBITDA (in thousands):
Tandy Leather Factory, Inc.
Reconciliation of Net income (loss) to Adjusted EBITDA

 
  
Three Months Ended
    
Nine Months Ended
  

 
September 30, 2022
    
September 30, 2021
    
September 30, 2022
    
September 30, 2021
  
                         
Net income (loss)
  
$
723
    
$
(16
)
  
$
779
    
$
1,269
  
Add back:
                                
Depreciation and amortization
    
303
      
266
      
899
      
805
  
Interest expense
    
1
      
2
      
11
      
12
  
Income tax provision (benefit)
    
258
      
2
      
278
      
382
  
Stock-based compensation
    
248
      
206
      
813
      
593
  
Non-routine items related to restatement
    
-
      
124
      
246
      
1,157
  
Adjusted EBITDA
  
$
1,533
    
$
584
    
$
3,026
    
$
4,218
  

Tandy Leather Factory, Inc., (http://www.tandyleather.com), headquartered in Fort Worth, Texas, is a specialty retailer of a broad product line, including leather, leatherworking tools, buckles and adornments for belts, leather dyes and finishes, saddle and tack hardware, and do-it-yourself kits.  The Company distributes its products through its 103 North American stores, located in 40 US states and six Canadian provinces, and one store located in Spain. Its common stock trades on The Nasdaq Stock Market under the symbol “TLF”.  To be included on Tandy Leather Factory’s email distribution list, go to: http://www.b2i.us/irpass.asp?BzID=1625&to=ea&s=0.
Contact: Janet Carr, Tandy Leather Factory, Inc. (817) 872-3200 [email protected]
This news release may contain statements regarding future events, occurrences, circumstances, activities, performance, outcomes and results that are considered “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. Actual results and events may differ from those projected as a result of certain risks and uncertainties. These risks and uncertainties include but are not limited to: changes in general economic conditions, negative trends in general consumer-spending levels, failure to realize the anticipated benefits of opening retail stores; availability of hides and leathers and resultant price fluctuations; change in customer preferences for our product, and other factors disclosed in our filings with the Securities and Exchange Commission. These forward-looking statements are made only as of the date hereof, and except as required by law, we do not intend to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.