TANDYCRAFTS, INC.
REPORTS 34% INCREASE IN SECOND QUARTER EARNINGS
Fort Worth, Texas. January 23, 1998 -- TANDYCRAFTS, INC. (NYSE: TAC) announced
today improved results for its fiscal second quarter ended December 31, 1997.
Net income for the quarter increased 34% to $3,056,000, or $0.24 per share
compared to net income of $2,285,000, or $0.19 per share for the same quarter
last year.
Excluding divested operations, net sales increased $5,227,000, or 7.7%, over the
prior fiscal year with both retail sales and manufacturing sales showing
increases. Same-store sales at Sav-On Office Supplies and Joshua's Christian
Stores increased 6.7% and 10%, respectively, while same-store sales at Tandy
Leather were essentially flat. The Picture Frame and Framed Art division,
recently consolidated under the name Pinnacle Art & Frame, achieved a sales
increase of 17.1%, while the TWI division achieved a 4% sales increase.
In commenting on the Company's performance, Michael J. Walsh, Chief Executive
Officer, stated, "The results for the second quarter of fiscal 1998 continued to
show evidence of the turnaround in progress as the Company achieved a 34%
increase in net income compared to the same quarter last year. Operating
results were highlighted by marked improvement at Joshua's Christian Stores,
Pinnacle Art & Frame and the TWI division. Sav-On Office Supplies recorded a
slight decrease in operating income for the quarter primarily as a result of the
impact of six new store openings in the past eight months. Although Tandy
Leather's operating results for the quarter were slightly down, we are
encouraged as the efforts to rebuild and broaden that company's unique market
position begin to show signs of progress."
For the six months ended December 31, 1997, the Company reported net income of
$4,005,000 or $0.32 per share compared to net income of $3,082,000 or $0.25 per
share for the same period of fiscal 1997.
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 Six Months Ended
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December 31, December 31, December 31, December 31,
1997 1996 1997 1996
------------ ------------ ------------ ------------
Net sales $ 73,237 $ 73,246 $ 128,596 $ 131,016
Operating costs and expenses:
Cost of goods sold 48,702 46,732 84,536 82,420
Selling, general and administrative 17,665 20,775 33,597 39,437
Depreciation and amortization 1,259 1,391 2,529 2,763
------------ ------------ ------------ ------------
Total operating costs and expenses 67,626 68,898 120,662 124,620
------------ ------------ ------------ ------------
Operating income 5,611 4,348 7,934 6,396
Interest expense, net 911 833 1,773 1,655
------------ ------------ ------------ ------------
Income before income taxes 4,700 3,515 6,161 4,741
Provision for income taxes 1,644 1,230 2,156 1,659
------------ ------------ ------------ ------------
Net income $ 3,056 $ 2,285 $ 4,005 $ 3,082
============ ============ ============ ============
Net income per share - basic $0.24 $0.19 $0.32 $0.25
===== ===== ===== =====
Weighted average common shares 12,685 12,346 12,661 12,272
Joshua's Sav-On
Tandy Leather Christian Office
Retail Bookstores Supplies
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Number of stores 152 61 41
QUARTER:
Net sales 10,828 11,159 9,668
Same store sales gains / (losses) (0.7)% 10.0% 6.7%
SIX MONTHS:
Net sales 19,806 18,083 20,267
Same store sales gains / (losses) (2.4)% 14.6% 8.0%
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