UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM SE
FORM FOR SUBMISSION OF PAPER FORMAT EXHIBITS
BY ELECTRONIC FILERS
Tandycrafts, Inc. 96294
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Exact Name of Registrant as Specified in Charter Registrant CIK Number
Form 11 K - Tandycrafts, Inc. Retirement
Savings Plan for the fiscal
Year ended June 30, 2000 Commission File Number 1/7258
- ------------------------------------------- -----------------------------
Electronic Report, Schedule or Registration
Statement of Which the Documents are a Part
(give period of report)
_______________________________________
Name of Person Filing the Document
(If Other than the Registrant)
SECURITIES AND EXCHANGE COMMISSON
WASHINGTON, D.C. 20549
FORM 11-K
ANNUAL REPORT PURSUANT TO
SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the Fiscal Year Ended June 30, 2000
TANDYCRAFTS, INC. RETIREMENT SAVINGS PLAN
(F/K/A TANDYCRAFTS, INC. EMPLOYEE STOCK OWNERSHIP PLAN)
(Full Title of Plan)
TANDYCRAFTS, INC.
1400 Everman Parkway
Fort Worth, Texas 76140
(Name of Issuer and Address of Principal Office)
TANDYCRAFTS RETIREMENT
SAVINGS PLAN
FINANCIAL STATEMENTS
FOR THE YEARS ENDED JUNE 30, 2000 AND 1999
EXHIBIT 1
CONSENT OF INDEPENDENT ACCOUNTANT
---------------------------------
We consent to the incorporation of our report dated February 2, 2001,
accompanying the financial statements included in the annual report on Form 11-K
of Tandycrafts' registration statement on Form S-8 for its Retirement Savings
Plan.
/s/ Whitney Penn
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Fort Worth, Texas
February 2, 2001
TANDYCRAFTS RETIREMENT SAVINGS PLAN
FINANCIAL STATEMENTS
FOR THE YEARS ENDED JUNE 30, 2000 AND 1999
TABLE OF CONTENTS
Report of Independent Auditors............................................ 1
Financial Statements:
Statements of Net Assets Available for Benefits ............................2
Statements of Changes in Net Assets Available for Benefits ............. 3
Notes to Financial Statements............................................. 4
Schedules:
Form 5500, Schedule H, Line 4I, Schedule of Assets Held for Investment
Purposes at End of Year........................................... 12
All other schedules required by the Department of Labor's Rules and Regulations
for Reporting and Disclosure under the Employee Retirement Income Security Act
of 1974 have been omitted since they are either not applicable or the
information required therein has not been included in the financial statements
or notes thereto.
REPORT OF INDEPENDENT AUDITORS
To the Administrative Committee and Participants of
Tandycrafts Retirement Savings Plan
We have audited the accompanying statements of net assets available for benefits
of Tandycrafts Retirement Savings Plan (the "Plan") as of June 30, 2000 and 1999
and the related statements of changes in net assets available for benefits for
the years then ended. These financial statements are the responsibility of the
Plan's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, based on our audit, the financial statements referred to above
present fairly, in all material respects, the net assets available for benefits
of the Plan as of June 30, 2000 and 1999, and the changes in its net assets
available for benefits for the years then ended in conformity with generally
accepted accounting principles.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule of assets held
for investment purposes at end of year is presented for the purpose of
additional analysis and is not a required part of the basic financial statements
but is supplementary information required by the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Security
Act of 1974. The supplemental schedule has been subjected to the auditing
procedures applied in the audits of the basic financial statements and, in our
opinion, is fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
/s/ Whitney Penn
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Fort Worth, Texas
February 2, 2001
TANDYCRAFTS RETIREMENT SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
JUNE 30,
2000 1999
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Assets
Investments, at fair value - participant directed:
Shares of registered investment companies:
Mutual funds $ 4,126,244 $ 3,076,745
Participant loans 280,978 291,050
Money market investment funds:
Munder cash investment fund 361,296 600,702
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4,768,518 3,968,497
Investments, at fair value - non-participant directed:
Tandycrafts common stock 5,495,469 8,824,652
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10,263,987 12,793,149
Receivables:
Employers' contributions 75,936 57,399
Employers' contributions 46,310 31,477
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122,246 88,876
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Total assets 10,386,233 12,882,025
Liabilities - Securities Sale Transfer - 232,000
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Net assets available for benefits $ 10,386,233 $ 12,650,025
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TANDYCRAFTS RETIREMENT SAVINGS PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
YEAR ENDED JUNE 30,
2000 1999
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Additions to net assets attributed to:
Investment income:
Interest and dividends $ 309,713 $ 140,625
Net realized and unrealized depreciation
in fair value of investments (862,939) (2,830,113)
(553,226) (2,689,488)
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Contributions:
Employer's cash contributions 149,482 998,072
Employer's non-cash contributions 444,424 -
Employees' contributions 1,139,422 1,326,103
Employees' rollover 358,710 156,230
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2,092,038 2,480,405
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Total additions (deductions) 1,538,812 (209,083)
Deductions from net assets attributed to:
Benefits paid to participants 3,802,604 4,692,682
Administrative expenses - 7,702
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Total deductions 3,802,604 4,700,384
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Net decrease (2,263,792) (4,909,467)
Net assets available for benefits:
Beginning of year 12,650,025 17,559,492
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End of year $ 10,386,233 $ 12,650,025
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TANDYCRAFTS RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2000
A.DESCRIPTION OF PLAN
The following description of the Tandycrafts Retirement Savings Plan (the
"Plan") provides only general information. The Plan is sponsored by
Tandycrafts, Inc. and certain affiliated companies (collectively referred to as
the "Company"). Participants should refer to the Plan agreement for a more
complete description of the Plan's provisions.
GENERAL
The Plan is a defined contribution plan covering employees of the Company who
have at least six months of service. Beginning July 1, 1997, employees hired on
or after July 1, 1997 must complete 500 hours of service during their first six
months with the Company in order to participate. Otherwise, the employee will
not be eligible to participate until completing one year of service and 1,000
hours. The Plan is subject to the provisions of the Employee Retirement Income
Security Act of 1974 (ERISA).
CONTRIBUTIONS
Beginning January 1, 1997, participants may contribute between 3%-15% of pretax
annual compensation, as defined in the Plan. Prior to January 1, 1997,
participants contributed either 0% or 5%.
The Company matches 100% of the first 5% of base compensation that a participant
contributes to the Plan. Matching contributions are either made in cash to
exclusively purchase Tandycrafts common stock or the Company will transfer the
stock directly to the Plan as non-cash contributions.
PARTICIPANT ACCOUNTS
Each participant's account is credited with the participant's contributions and
the allocation of the Company's contributions and actual earnings thereon.
VESTING
Participants are immediately vested in their contributions plus or minus actual
earnings or losses thereon. Vesting in the Company contribution portion of
their accounts plus or minus actual earnings or losses thereon is based on years
of service. Participants vest 100% after five years of credited service.
ADMINISTRATIVE EXPENSES
In accordance with Plan provisions, the Company may at its option pay some of
the costs associated with the Plan.
A.DESCRIPTION OF PLAN - CONTINUED
INVESTMENT OPTIONS
Upon enrollment in the Plan, a participant may direct employee contributions in
1% increments in any of the following investment options.
Putnam Growth and Income Fund - Funds are invested primarily in common stocks
that offer potential for capital growth, current income, or both.
Putnam Income Fund - Funds are primarily invested in debt securities,
including both government and corporate obligations, preferred stocks and
dividend-paying stocks.
Putnam New Opportunities Fund - Funds are invested primarily in common stocks
of companies in sectors of the economy which Putnam Management believes
possess above-average, long-term growth potential.
Putnam Asset Allocation Funds - Funds consists of three separate portfolios
(growth, balanced, and conservative) that a participant may elect, each of
which is designed with a different strategic allocation of its investments
between equity securities and fixed income securities. The funds' different
strategic allocations generally correlate to different levels of investment
risk.
Putnam International Growth Fund - Funds are primarily invested in equity
securities of companies located in a country other than the United States.
Munder Index 500 Fund K - Funds are invested primarily in equity securities
and it normally will hold the securities of at least 80% of the issuers in
the S&P 500.
Munder Cash Investment Fund K - Funds are invested solely in dollar-
denominated debt securities with remaining maturities of 13 months or less
and maintain an average dollar-weighted portfolio maturity of 90 days or
less.
Fidelity Advisor Growth Opportunity T Fund - Funds are invested primarily in
common stocks and securities convertible into common stocks.
Participants may change their investment options daily.
A.DESCRIPTION OF PLAN - CONTINUED
PARTICIPANT LOANS
Participants may borrow from their fund accounts a minimum of $1,000 up to a
maximum equal to the lesser of: (a) 50% of their vested account balance; (b)
$50,000; or (c) the balance of the participant's contribution account balance.
Loan transactions are treated as a transfer to (from) the investment fund from
(to) the participants' loan fund. Generally, loan terms range from 1-5 years
with the exception of loans used to acquire the borrower's principle residence,
which may be up to 15 years. The loans are secured by the balance in the
participant's account and bear interest at a rate commensurate with local
prevailing rates as determined by the Plan administrator. Interest rates for
loans are issued at the prime interest rate plus 1%. Current participant loans
have all been issued ranging from 8.50% to 9.50%. Principal and interest is
paid ratably through monthly payroll deductions.
PAYMENT OF BENEFITS
An account is established for each participant in the Plan to which
contributions and related earnings thereon are credited. Generally, upon a
break in service if a participant's account is less than $5,000, the vested
accrued benefit is paid in a lump sum. If a participant's account is greater
than $5,000, the participant may elect various payment options ranging from an
immediate lump sum payment, installments, or deferred lump sum payment.
FORFEITED ACCOUNTS
At June 30, 2000 and 1999, forfeited nonvested accounts approximated $93,000 and
$244,000, respectively. These accounts will be used to reduce future employer
contributions in accordance with the Plan agreement. For the years ended June
30, 2000 and 1999, employer contributions were reduced by forfeited nonvested
accounts of approximately $280,000 and $34,000, respectively.
B.SUMMARY OF ACCOUNTING POLICIES
BASIS OF ACCOUNTING
The financial statements of the Plan are presented on the accrual basis of
accounting.
USE OF ESTIMATES
The preparation of the financial statements in conformity with generally
accepted accounting principles requires the Plan administrator to make estimates
and assumptions that affect certain reported amounts and disclosures.
Accordingly, actual results may differ from those estimates.
B.SUMMARY OF ACCOUNTING POLICIES - CONTINUED
INVESTMENT VALUATION AND INCOME RECOGNITION
The Plan's investments are stated at fair value. Units of the various
investment accounts are valued at quoted market prices, which represent the net
asset values of shares held by the Plan at year-end. Participants' loans are
valued at unpaid principal balance, which approximates fair value.
The net appreciation (depreciation) of investments includes realized gains and
losses on sales of investments during the year and unrealized increases or
decreases in the market value of investments held at year-end.
PAYMENT OF BENEFITS
Benefits are recorded when paid.
CONCENTRATION OF PLAN ASSETS
The Plan has approximately 53% and 70% of its total assets invested in
securities of its sponsor Tandycrafts, Inc. at June 30, 2000 and 1999,
respectively.
C.INVESTMENTS
Comerica Bank and Bank One under their respective trust agreements hold the
Plan's investments. Financial information relating to the investments is
included in the accompanying financial statements based on information provided
by each trustee. The investments are subject to market or credit risks
customarily associated with debt and equity investments.
In addition to the investment data set forth on the following pages, Comerica
Bank, Putnam Investments and Bank One also certified all investment assets,
transactions, and income and the schedules of investments and reportable
transactions.
Individual investments with market values greater than 5% of net assets
available for benefit at June 30 are as follows:
2000 1999
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Tandycrafts, Inc. Common Stock
(non-participant directed) $5,495,469 $8,824,652
Putnam New Opportunities Fund 1,797,502 1,099,279
Fidelity Advisor Growth T Fund 601,919 -
The changes in net assets available for benefits for the non-participant
directed fund for the years ended June 30, 2000 and 1999 are shown on the
following page.
INVESTMENTS - CONTINUED
NON-PARTICIPANT DIRECTED
FUND COMPANY STOCK
2000 1999
Additions to net assets attributed to: ---------- -----------
Investment income:
Interest and dividends $ - $ -
Net realized and unrealized depreciations
in fair value of investments (1,734,931) (3,162,784)
---------- -----------
(1,734,931) (3,162,784)
Contributions:
Employer's cash contributions 206,881 1,025,055
Employer's non-cash contributions 368,488 -
Employers' contributions - -
Employees' rollovers - -
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575,369 1,035,055
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Total deductions (1,159,562) (2,137,729)
Deductions to net assets attributed to:
Benefits paid to participants 1,915,261 3,409,170
Administrative expenses - 5,276
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Total deductions 1,915,261 3,414,455
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Net decrease (3,074,823) (5,552,184)
Interfund transfers - net (254,360) (149,197)
Net assets available for benefits:
Beginning of year 8,824,652 14,526,033
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End of year $5,495,469 $ 8,824,652
========== ===========
D. PLAN TERMINATION
Although it has not expressed any intent to do so, the Company has the right
under the Plan to discontinue its contributions at any time and to terminate the
Plan subject to the provisions of ERISA. In the event of Plan termination,
participants will become 100% vested in their accounts.
E. PLAN AMENDMENTS
Effective November 1, 1998, the Plan sponsor amended the plan to further define
employees who are ineligible to participate in the Plan. This amendment states
that any employee who is employed at a location outside the fifty United States
and the District of Columbia are not eligible for participation in the Plan.
Effective July 1, 1998, the Plan amended its benefit provisions to increase the
involuntary benefit payment amount from $3,500 to $5,000.
F. INCOME TAX STATUS
The Internal Revenue Service has determined and informed the Plan administrator
by a letter dated August 21, 1997, that the Plan and related trust are designed
in accordance with applicable sections of the Internal Revenue Code (IRC). The
Plan has been amended since receiving the determination letter. However, the
Plan administrator and the Plan's tax counsel believe that the Plan is designed
and is currently being operated in compliance with the applicable requirements
of the IRC.
G. RECONCILIATION TO FORM 5500
The IRS Form 5500 was not completed prior to the issuance of the accompanying
financial statements. The principal differences between the accompanying
financial statements and the Form 5500 are: (1) the method of determining
realized and unrealized gains and losses and (2) the accrual of benefits
allocated to accounts of persons who have elected to withdraw from the Plan but
have not yet been paid.
H. BENEFITS PAYABLE
At June 30, 2000 and 1999, net assets available for plan benefits included
approximately $258,000 and $513,000, respectively, for participants who have had
a break in service but have not yet been paid their vested benefits. These
amounts are considered liabilities by the DOL for regulatory reporting purposes.
I. RELATED PARTY TRANSACTION
Tandycrafts, Inc. provides certain administrative and accounting services at no
cost to the Plan and, accordingly, no amounts have been recorded in the
accompanying financial statements as of June 30, 2000 and 1999.
During 1999, the Plan sold 78,000 shares of Tandycrafts, Inc. stock with a
market value of $187,375 to certain individuals deemed to be parties-in-interest
as defined by ERISA. However, ERISA Section 408(e) provides an exemption for
the acquisition or sale by a plan of qualifying employer securities, if the sale
is for adequate consideration, no commission is charged with respect to the
sale, and the plan is an eligible individual account plan. The plan has
complied with the provisions of ERISA section 408(e) and as such these
transactions are not considered to be prohibited transactions. No such
transactions occurred during the fiscal year that ended June 30, 2000.
SCHEDULES
TANDYCRAFTS RETIREMENT SAVINGS PLAN
FORM 5500, SCHEDULE H, LINE 4I-SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
AT END OF YEAR
AS OF JUNE 30, 2000
EIN: 75-6239501
Plan: 003
Description Number Current
Identity of Issue of Investments of Shares (d) Cost Value
- ----------------- ------------------------------- --------- ------------ -----------
Putnam Putnam Growth and Income Fund 24,200 $ - $ 435,122
Putnam Putnam Income Fund 14,528 - 91,093
Putnam Putnam New Opportunities Fund 18,606 - 1,797,502
Putnam Putnam Growth Portfolio Fund 23,949 - 353,968
Putman Putnam Balanced Portfolio Fund 11,657 - 150,724
Putman Putnam Conservative Portfolio Fund 4,377 - 45,651
Putnam International Growth Fund 13,612 - 407,276
Munder Munder Index 500 Fund 7,917 - 242,989
Fidelity Fidelity Advisor Growth Fund 13,529 - 601,919
Munder Munder Cash Investment Fund 361,296 - 391,296
Tandycrafts, Inc.* Tandycrafts, Inc. Common Stock
Non-participant directed 1,953,600 10,539,671 5,495,469
Participant loans* Due in 1 to 5 years; 8.50%-9.50% - - 280,978
-----------
$10,263,987
===========
* Indicates a part-in-interest to the Plan.