Tandy Leather Factory Inc 8-K, filed Jun 7, 2022
Tandy Leather Factory Inc (TLF)
8-K
2022-06-07
For: 2022-06-07
View Original
Added on
April 08, 2026
About this 8-K
Tandy Leather Factory Inc filed this 8-K on June 7, 2022.
Items reported
- Item 2.02: Financial 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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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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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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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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Over-the-counter “pink sheets”
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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
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Results of Operations and Financial Condition
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On June 7, 2022, Tandy Leather Factory, Inc. (the “Company”) will host a presentation for investors at its corporate offices, which was previously
announced by the Company’s press release dated May 17, 2022. The investor presentation includes certain information not previously announced regarding the Company’s balance sheet and historical performance, as well as certain projections for
future performance. A copy of the presentation materials 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.
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Item 9.01
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Financial Statements and Exhibits.
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(d) Exhibits
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No.
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Exhibit
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Investor Presentation Materials dated June 7, 2022
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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,
2018 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.
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TANDY LEATHER FACTORY, INC.
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Date: June 7, 2022
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By:
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/s/ Michael Galvan
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Michael Galvan, Chief Financial Officer
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Exhibit 99.1
MANAGEMENT PRESENTATION 2022
2 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. FORWARD-LOOKING STATEMENTS
3 Since 1919, Tandy Leather has been the leading supplier of quality leather, machines, tools, kits
and instructional resources for generations of hobbyists and trade craftspeople making a living selling leatherwork. Tandy Highlights LARGE & GROWING MARKET MARKET LEADER MULTI-CHANNEL DISTRIBUTION CAPABLE TEAM STRONG FINANCIAL
POSITION $40B global craft market $500MM leathercrafting market Growing at 8% 17% share in fragmented market Heritage brand 105 Retail Stores Global Ecommerce Commercial Division Transformed business Completed restatement Managed
through COVID 5-year plan to $100MM $10MM net cash $38MM inventory $13-15MM real estate
Crafting is a large and growing market. GLOBAL CRAFT MARKET LEATHERCRAFTING MARKET MARKET
OPPORTUNITY $40B 4 $500MM 1% of global crafting market 11% of US adult population leathercrafts Tandy is capturing about 17% of US market share Significant opportunity to grow share CAGR of 8% over next 5 years 63% of US households
crafting Most do more than 1 type of craft Crafting is multi-generational MILLENIALS & GEN Z 41% of all crafters 35% of Tandy consumers - up 6% from 2020 Rising interest in hand-crafted, sustainable, artisanal products Desire to
find meaningful work is likely driving the craft economy @jessmorelesther
5 The time for leathercrafting is right… LEATHERCRAFTING HITS BULLSEYE OF CRAFTING FOR MANY
REASONS @damonmarkmakeit @whiskeyboundleather @teotanartistry BROAD APPEAL Both men and women leathercraft at similar levels Multi-generational –Boomers, Gen X, Millennials, Gen Z, and parents crafting with kids Many ways to enter and
enjoy craft at all skill levels Leather has many end uses– jewelry, wallets, bags, belts, costumes and more APPEALS TO YOUNG CONSUMERS Millennials and Gen Z are driving the craft economy and leathercrafting appeals to their core
values. Leather manufacturing recycles cowhides that would otherwise go into landfills. Hand-crafted, artisanal leather goods last decades. SUSTAINABILITY Leathercrafting centers the mind and is a perfect outlet for stress reduction,
self-expression and creativity. Hand-crafted items are one-of-a-kind and highly personalized. SELF-EXPRESSION & PERSONALIZATION Leathercrafting is a job for some. 45% of older Millennials are selling their art/craft online.
FULFILLING PROFESSION
6 Tandy: supplying the craft and trade of leatherworking. CUSTOMERS Making leather goods transcends
gender and age. Tandy appeals to both hobbyists and trade professionals. Growth in younger 18-35 age groups LEATHER MACHINES HAND TOOLS HARDWARE KITS & GUIDES KEY PRODUCTS Tandy supplies leatherworkers with the essential
materials, tools and instructional resources they need to hand-craft leather goods. In the last 2 years, we have significantly improved our assortment and quality across our key product categories. SALES CHANNELS RETAIL
STORES ECOMMERCE COMMERCIAL Tandy products are sold through 3 key channels of distribution.
7 OUR MISSION To build on our legacy of inspiring the timeless art and trade of
leatherworking. @dalegeorgebooher
8 Tandy is uniquely positioned to grow share and the category. STRONG BRAND EQUITY Heritage brand
with 100+ years in leathercraft. Legacy in craft has built strong brand trust and pride. Leathercrafters have deep rooted love for Tandy. DISTINCT COMPETITIVE ADVANTAGE Tandy has 105 retail store locations. Allows customers to
hand-select their leather, demo machines, take classes, use our open workspace and commune with the broader leathercrafting community. BETTER VALUE & SELECTION Broader selection and better quality and consistency. Buying power within
supply chain gives us cost and price advantage. LEATHERCRAFTING MARKET $500MM CHANNELS TAILORED TO CUSTOMERS Not a one-size-fits-all approach. Multi-channel distribution allows us to tailor model to customer needs. TANDY LEATHER 17%
share TANDY BRINGS CONSUMERS INTO THE CRAFT Tandy is where most leathercrafters get started – we’re a destination for classes, project ideas and instructional resources – conveniently located in consumers’ communities. . TARGET KEY
CUSTOMER GROUPS Appeal to the unique needs and interests of Youth, Military & Veterans, Mental Health Organizations, New Distribution Channels and International Consumers . NEW ACQUISITION KEY DIFFERENTIATORS
9 Investing in brand transformation. IMPROVE CONSUMER PROPOSITION REBUILD FOUNDATION POSITION FOR
LONG-TERM GROWTH Broader product assortment Better quality and consistency New everyday value pricing Updated branding – more professional look and feel Engaging marketing - better storytelling and personalization Invested in capable
people Employee training program Quality inspection process Centralized web fulfillment New general ledger, point-of sale , warehouse management system and web platform Built Commercial Division Created roadmap to $100MM+ in sales and
$15MM in operating income Over the last 3 years, we have been investing in 3 strategic areas. Despite the challenges presented by the pandemic and restatement, we have made steady progress against our goals.
10 Financial Snapshot – 2021 2021 SALES GROSS MARGIN PROFIT BALANCE SHEET SHARE
BUY-BACKS $82.7MM +29% vs 2020 +10% vs 2019 56.9% $2.3MM operating income ($3.6 MM adjusting for restatement-related expenses)(1) $5.4MM adjusted EBITDA (2) $10.2MM cash $38.1MM inventory $0.4MM debt 713k shares 7.8% of total
shares $3.84 average price per share
11 Financial Snapshot – 2022 Q1 2022 SALES GROSS MARGIN PROFIT BALANCE SHEET SHARE
BUY-BACKS* $20.5MM -4% vs 2021 58.2% $0.8MM operating income $1.6MM adjusted EBITDA(2) $10.3MM cash $37.8MM inventory $0.4MM debt 360k shares 4.2% of total shares $5.00 average price per share *April, 2022
12 Sales 2017-2021 NUMBER OF
STORES RETAIL ECOMMERCE COMMERCIAL 74% 19% 7% 68% 26% 6% 87% 9% 3% 2021 sales are flat to 2017, but with 13 fewer stores, store sales productivity has increased 13%. Ecommerce grew 140% in 2020 over 2019 due to COVID, but as
store sales rebounded in 2021, much of those gains held, with Ecommerce sales declining only 7% in 2021 over 2020.
13 Gross Profit 2017-2021 Since our strategic shift to EDLP pricing in 2019, we gave up 300-400 bps
in gross margin rate, or about $3MM in gross profit dollars in 2021 vs 2018 or 2017 on similar levels of sales.
14 Profitability 2017-2021 Profitability has been affected by the restatement and the pandemic in
2019 and 2020. The difference in operating income in 2021 vs 2017-18 after adjusting for restatement-related expenses is due to decline in margin rate associated with our competitive pricing strategy.
15 Inventory & Cash From Operations 2017-2021
16 Shares Outstanding 2017-2021 We have taken advantage of opportunities to buy shares in
transactions with individual shareholders to reduce our share count by over 1MM shares over the last 5 years.
17 We have a roadmap to $100MM+ in sales and $15MM in operating income – and we have a plan to get
there. Roadmap to $100MM+ CORE BUSINESS FOCUS ON TEACHING PILOT NEW FORMATS GROW COMMERCIAL @projectfree2fly PRODUCT IMPROVEMENTS @legacybrandleather OPTIMIZE RETAIL FLEET @powderriverleather NEW OPPORTUNITIES YOUTH CRAFTING ART
THERAPY CHAIN WHOLESALE INTERNATIONAL 4 KEY GROWTH INITATIVES Tandy is positioned to bring new customers into the craft and expand the leathercrafting category.
18 Questions & Discussion
19 (1)Non-GAAP Reconciliation
20 (2)Non-GAAP Reconciliation @duckandchick
