TLF - Earnings call transcript Q4 2023 | Tandy Leather Factory, Inc.

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Daniel Ross

Good morning, everyone. Thank you for joining us for a discussion of Tandy's Fourth Quarter 2023 financial results. I'm Dan Ross, General Counsel and Corporate Secretary for Tandy, and I will be co-moderating the discussion today.

Our CEO, Janet Carr, will give just a very brief overview of the quarter, and then we will devote the conference to investors' questions and discussion. [Operator Instructions] With that, let's get started. Act statements the historical Act meaning and Securities include forward-looking that of will as the within each statements of Exchange presentation other results than constitute XXXX amended. Today's XXXX, of the Securities These the we statements guarantees predictions have on performance. not information of are reflect future or but based expectations or our estimates today, the which involve statements differ are beyond which known many factors, of to presentation. this and They in results control contained unknown may and other materially actual risks, from uncertainties and cause our

You forward-looking are revise required no update not on cautioned as to put otherwise statements. obligation reliance undue or these these except law. assumes forward-looking statements, The company by to

Carr. now Janet And here's

Janet Carr

shared I today end outlook Thank the consumer revisiting to economic you, of XXXX. start to With challenging a want Tandy flashing demand to Dan. position you environment. wanted with red, some weather we at that by we signals the for XXXX

position focused to and/or on with moving to expenses, rent retail profit and lower growth. and CapEx drive and cash We seeking better cash a fleet, stores growing the to locations, meant a continuing both demand. and negative sales long-term cost on of trend declining managing closing sales operating of investments optimize This managing renewals, conservative took

This themselves. what And it's snapshot in did is and business. on do. the what while for were continue said to primarily of did our do, we foundation we focus sales The to the speak growth, was not building invest in we going results we

operating last non-GAAP provide Adjusted was $X.X we'll additional million to a $X.X combined up. up income, million year. But about a margin we're last here down significant expenses, rate metric, year. million minute. over in $X.X with which showing $X X%, operating in that, was a over about delivered insight, up were million, EBITDA, which Sales decline in talk And gross

essentially Inventory to year. flat have $X debt. Turning $X up million over continue -- to million. to the $XX.X And balance we sheet. was million no to Cash was last

down Turning X.X% in closed had continued $X.X to the X points sales 'XX, consumer weak 'XX were demand. basis decline. sales with sales. by XXX or 'XX or driven XXXX, about sales representing in over At million of $XX.X We that million, stores

have do up, our New a XXXX. York in some to new to start. We well. We it's continuing And store off ramp opened July stores sales as in are very Queens, while good of

XXX store market with XXX open in should we lost We Lauderdale, leases store and open any in also to Virginia, Fort Richmond, strong more sales have during store on in a Miami, for Florida, recoup should expected COVID. lease store day; unfavorable signed store April, late This our early May. in where closing closed sometime which us, X an near stores, Margate, from the

store New test has smaller and, new Our model hanging, it's us a new It us. merchandising It's in rents. therefore, of of a York store has visible. for to a footprint is smaller, Queens, leather. lower have of better allows It

and feel can touch You it.

photo see upper right can there. in the the You in

the at with on makers the and are classes center an class Our activities. workshop of area and store, emphasis

and customers new service full variation the the a markets on less locations, by using to stores. competitive advantage, both our also We're model, a model it's And forward. moves new service store merchandising, which self-serve both smaller but footprint going expert and leverage that this retail in for necessitated is our get

other came mix rate. Rate shifts, $XX.X gross in improvement gross down XXXX from to point overhead, profit a freight and X.X% were with and basis warehouse adjustments. product in reduction selling, channel margin XXX and some better dollars improvement full-price million,

million. in with drove in a income year, $X million to combined Better a $X.X margin X.X% operating expenses increase last rate operating decline gross over

at said While declining in sales, this start underway, plan also economics. that. X of even we weren't face of to we profitable store stores taking to the deliver more locations and and our the sales, steps as did growth and year, we're happy in earnings thoughtful with with sales the grow cash had we attractive decline a new we With in clean

We consideration talked years, meaning capital be these be about number last and a guide continue principles funded our investments key the to X, couple for to disciplined what perspective, From us. allocation, of financial capital And for from value impairing prospects a operations. the for for cautious about increasing value shareholder sheet, long-term X, conservative X, on without the all leverage. Number long-term balance focus mechanisms business. with

quality, And proposition: value, we're the focused consistency we operating on from that service. perspective and consumer said an

support building also an X, can remain both and the systems years flexible can many for talent, we Secondly, the operating changing to we're respond that and nimble but allow and market to to that can model, business And processes conditions us that scale quickly. come.

stores, on continue forward and grow on new focus to Looking we to XXXX, targeting sales stores. X X additional going focus an profitability will to retail cash. with a We're to

stores advantage a be to Our low cash It's source positive low costs. relatively continue operating competitive build-out flow. with and of our good

full-service experts inspire continue their engage broad and with teach, our to local communities to model, we're in going leather serve, our to new in invest And competitive crafting. advantage:

more The -- rationale: previously acreage And footage here to seem not a -- we than -- seem our have do we to exploring lot as undeveloped have and Worth we a we're square We sale announced, need. have Fort of have property.

that more is may I-XX, Tandy. a here And than some right more do. Someone else than benefits again, behind have could me, a potentially unique property you it can our power. we lot to value as we get of see significant such which out valuable someone this find lot And

we needs we in we've that price. get property something years. excess has sell this or market buy our cash, right releases recent lease And significantly and modeled fairly if the specifically appreciated potentially scenarios more fits also The where and

would Board be significant cash, move including options the any a And excess disruption deploying has potentially The certainly been to in returning shareholders. consider very to all strong, would any business. interest while some

to accordingly. And Do questions So question. that question? Isaac and we are I unmute see your a has ask want discussion. moving and and you ahead go to proceeding now

Unknown Attendee

Yes.

I good hopefully pretty quick what all had First, seems And of considered. quarter, things a questions. couple congratulations like a on

do First how there? fleet? far optimizing Or one along more you you you're process you have the of think you do Did substantially mostly retail to the are is, in say go?

Janet Carr

It's an ongoing process.

that are months. is few up at aggressive XX And have over cash we take expiring We the for are a hard stores. really about coming care next renewal, about look a of flow and any quite up and time typically negative taking we about also the that XX locations. that are There those leases

lot a there's come. So to

Unknown Attendee

And about is just -- on low year, your balances. last a you close other $XX million of I question don't about income. much showing are why cash level you helpful. think mean but Okay. I to averaged something my That's you interest such income interest I see

Janet Carr

our does in risk-free reach point a cash. in with And low invested securities the QX. cash We

we June We balance cash So forward. going $XX of be, program neighborhood in a it of did about to $XX,XXX investment maintain as the And are our throughout not interest year. year. last income last entire the grow, on around balances million began going And in year. that T-Bill was say I'm our should

Unknown Attendee

right. Thanks. All Okay.

for it that's I me. Thanks. think

Janet Carr

Great. Thanks, Isaac. Joe?

Joe Koster

Janet. Hey,

sustainable these few lot it of Just level. getting kind a first work the of years congrats. all, was last I a basis of cost know more on

on that And kind congratulate you of that. first there, I you're so now

my wasn't revenue was few future maybe you the of adjacent there the avenues. areas. Then about maybe had know question answered years that I only kind on a on end ago some talked other were

potential that -- store of the still is other are kind new with Or still for focus model, we So that... future? things the foreseeable are there our

Janet Carr

I core sales road. of we're and our stores business the things and growing focused are other within the number But existing think really that stores our are down to years, potential for going be our planning right on there fleet. of next the total in couple

this with an definitely, in X I there's additional year, stores think indicated, as the opportunity to more core. X we've

Joe Koster

for Great. all That's me.

Janet Carr

Thank another question? you. you did Isaac, have

Unknown Attendee

had just follow-up. a quick I Yes,

heard headquarters interest of that say you think I the just heard you I correctly? been in strong. sale I confirm Could that your that has

Janet Carr

Yes.

Unknown Attendee

right. Okay. All

Janet Carr

Yes.

questions that don't be done, it's get think close, Any -- don't gets close. to for going the it's welcome. to record think comments? I we've You're this call but the call shortest or other we I absolute

if questions always, reach last -- -- to everyone. Dan happy we're want right. call to directly, have me out and nothing chat. you, or else Thank to As you there is any all if And

Daniel Ross

Thank you, everyone. This concludes . the call.

Tandy Leather Factory (TLF) 26 Mar 242023 Q4 Earnings call transcript