Tandy Leather Announces Preliminary Year-to-Date Sales and Operating Expenses; Financial Restatement Continuing and Expected ...
August 10 2020 - 9:12PM
Tandy Leather Factory, Inc. (the “Company”) announced today
preliminary figures for 2020 year-to-date sales and operating
expenses. Year-to-date sales through July 2020 were $31
million, down 27% from the same period in 2019. The decline
was largely due to the impact of the COVID-19 pandemic, which
required the Company to temporarily close all of its retail stores
in March 2020; stores have been gradually reopening since late May
2020. Total sales for July 2020 were $5.1 million, down 5%
from the same period last year. Cost savings initiatives,
together with reductions in employment costs from furloughed
employees as a result of COVID-19 that we discussed in our June
Annual Meeting and press release, are estimated to save $2-3
million in operating expenses through July. Impairment
charges recognized in the first quarter of 2020 are expected to be
$2.5 million, primarily related to operating lease assets.
Cash and short-term securities at the end of July were $11.5
million.
The Company also announced that it will not be
able to complete its financial restatement and file all outstanding
periodic reports with the SEC by August 10, 2020. As
previously reported, a listing panel of The Nasdaq Stock Market LLC
(“Nasdaq”) had granted the Company until August 10 to file those
reports in order to remain listed on the Nasdaq Global Market; this
date represented the full extent of the panel’s discretion in this
matter and, as a result, the panel is required to issue a delisting
determination under the Nasdaq Listing Rules. The Company
therefore expects: (1) to receive a delisting determination letter
from Nasdaq notifying it that trading in the Company’s shares will
be suspended on Nasdaq and (2) that its common stock may remain
eligible to trade on the Over-the Counter Markets’ “Pink Sheets”
under the current symbol “TLF.”
Janet Carr, CEO of Tandy Leather, commented, “As
with so many other retailers, we have been severely impacted this
year by the COVID-19 pandemic. We are encouraged, however, by
the performance of our stores that have reopened. The
reopening process is still continuing, with 97 of our 106 stores
having reopened since May 22. Our reopened stores have
actually performed on average above 2019 levels during this brief
period, although with so many uncertainties in today’s environment
we cannot be sure if this will continue. If there is a silver
lining to this crisis for our business, it has been that our web
sales since closing our stores are up 160% versus last year.
As we previously announced, this was aided by our building a
centralized web fulfillment capability in our Fort Worth
distribution center that now allows us to fulfill web orders
worldwide from there rather than from individual stores.
“The interruptions from COVID-19 and the related
stay-at-home orders also impacted our ability to complete our
financial restatement amidst our implementation of numerous new
accounting systems and controls. Because of this, despite
herculean efforts from our team under unprecedented circumstances,
we were not able to complete our restatement and make the required
SEC filings by the August 10 deadline set by Nasdaq. This is
a real disappointment to us, but we will continue to push forward
to complete these filings as quickly as possible. If we are
delisted as we expect, then we intend to promptly apply for
re-listing on Nasdaq once the required filings have been made.”
The Company also announced that its Board of
Directors had approved a new program to repurchase up to $5 million
of its common stock between now and July 31, 2022. The
Company’s current share repurchase program was scheduled to expire
in August 2020. The Company will be able to resume share
repurchases in the open market following completion of the
Company’s financial restatement and making all required periodic
filings with the SEC.
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 108 North American stores
located in 40 US states and 6 Canadian provinces, and one
International store located in Spain. Its common stock trades
on the Nasdaq with 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: Steve Swank, Tandy Leather Factory, Inc.
(817) 872-3200
or steve.swank@tandyleather.com 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. When used
in this release, terms such as “believes,” “estimates,” “should,”
“could,” “would,” “plans,” “expects,” “intends,” “anticipates,”
“may,” “forecasts,” “future,” “will,” “projects,” “potential,”
“target,” “outlook” and similar expressions and variations as they
relate to the Company or its management are intended to identify
forward-looking statements. 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.
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