TANDYCRAFTS, INC.
REPORTS 19% INCREASE IN FIRST QUARTER EARNINGS
Fort Worth, Texas. October 22, 1997 -- TANDYCRAFTS, INC. (NYSE: TAC) announced
today improved results for its fiscal first quarter ended September 30, 1997.
Net income for the quarter increased 19% to $949,000, or $0.08 per share
compared to net income of $797,000, or $0.07 per share for the same quarter last
year.
Excluding divested operations, net sales increased $3,581,000, or 7%, over the
prior fiscal year with both retail sales and manufacturing sales increasing 7%.
Same-store sales at Sav-On Office Supplies and Joshua's Christian Stores
increased 8.3% and 18.5%, respectively. The Picture Frame and Framed Art
division, recently consolidated under the name Pinnacle Art & Frame, achieved a
sales increase of 17.8%. Same-store sales at Tandy Leather declined 4.7%, and
the TWI division experienced a sales decrease of 10.6%.
In commenting on the first quarter, Michael J. Walsh, Chief Executive, stated,
"Fiscal 1997 was a transition year during which steps were taken to position
each operation on a profitable foundation to support future growth. We are now
beginning to see the benefits of those decisions which we believe will allow us
to build a brighter future for the Company and its shareholders. Not only do we
continue to be encouraged by the significant progress shown at Joshua's
Christian Stores, but we are also encouraged with the strong performance at
Pinnacle Art & Frame, which is benefiting from the recent consolidation within
that division. We are also encouraged by the recent performance at Tandy
Leather Company. While Tandy Leather incurred a same-store sales decrease in
the first quarter, September showed a same-store sales increase, the first in
three years. Operating results also showed significant improvement when
compared to the same quarter last year".
Certain statements contained herein which are not historical facts are forward
looking statements that involve risks and uncertainties including, but not
limited to, customer demand and trends, related inventory risks due to shifts in
customer demand, risks associated with new business opportunities, competition,
dependence on key personnel, the performance of each operating unit,
relationships with key customers, commodity price fluctuations, new product
introductions, interest rate fluctuations, recessionary factors, seasonality and
other risks disclosed in the Company's latest annual report on Form 10-K filed
with the Securities and Exchange Commission.
Tandycrafts, Inc. is a specialty retailer and manufacturer. Included in its
Specialty Retail segment are Tandy Leather Company, Joshua's Christian Stores,
and Sav-On Office Supplies. The Specialty Manufacturing segment is comprised of
two manufacturing divisions: Pinnacle Art & Frame and Tandy Wholesale
International ("TWI").
Three Months Ended
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September 30, September 30,
1997 1996
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Net sales $ 55,359 $ 57,770
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Operating costs and expenses:
Cost of goods sold 35,834 35,688
Selling, general and administrative 15,932 18,662
Depreciation and amortization 1,270 1,372
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Total operating costs and expenses 53,036 55,722
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Operating income 2,323 2,048
Interest expense, net 862 822
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Income before income taxes 1,461 1,226
Provision for income taxes 512 429
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Net income $ 949 $ 797
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Net income per share $0.08 $0.07
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Weighted average common and
common equivalent shares 12,636 12,198
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Joshua's Sav-On
Tandy Leather Christian Office
Retail Bookstores Supplies
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Number of stores 163 62 40
Net sales 8,978 6,924 10,599
Operating income / (loss) (156) (180) 603
Same store sales gains / (losses) (4.7)% 18.5% 8.3%
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