-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, WUaOTJXQATkjJG9arsxSYMXL+ckEv5unn+9CCe0bw6gLd76tgcb0Np9CqCFcNos1 hQwx3+WVj80j/eXHsZ8llg== 0000096294-99-000008.txt : 19990125 0000096294-99-000008.hdr.sgml : 19990125 ACCESSION NUMBER: 0000096294-99-000008 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19990122 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19990122 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TANDYCRAFTS INC CENTRAL INDEX KEY: 0000096294 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-MISCELLANEOUS SHOPPING GOODS STORES [5940] IRS NUMBER: 751475224 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-07258 FILM NUMBER: 99511420 BUSINESS ADDRESS: STREET 1: 1400 EVERMAN PKWY CITY: FORT WORTH STATE: TX ZIP: 76140 BUSINESS PHONE: 8175519600 MAIL ADDRESS: STREET 1: 1400 EVERMAN PKWY CITY: FORT WORTH STATE: TX ZIP: 76140 8-K 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report: January 22, 1999 (Date of earliest event reported): (January 8, 1999) TANDYCRAFTS, INC. A DELAWARE CORPORATION 1-7258 75-1475224 (Commission File Number) (IRS Employer Identification No.) 1400 Everman Parkway Fort Worth, Texas 76140 (817) 551-9600 ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS (a) General. On January 8, 1999, Tandycrafts, Inc. (the "Company") announced a plan to close its 121 leather and crafts retail stores and related manufacturing operations. The announcement of this plan was filed as an exhibit to Form 8-K dated January 13, 1999, and is incorporated herein by reference. These dispositions are deemed to involve a significant amount of assets as defined in the instructions to Form 8-K. The pro forma financial information required pursuant to Article 11 of Regulation S-X with respect to the planned dispositions noted above is furnished under Item 7 of this Report. ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION, AND EXHIBITS (a) Pro Forma Financial Information. Pro Forma Financial Information Pro Forma Condensed Consolidated Balance Sheet - September 30, 1998 Pro Forma Condensed Consolidated Statement of Income - Year Ended June 30, 1998 Pro Forma Condensed Consolidated Statement of Income - Three Months Ended September 30, 1998 Notes to Pro Forma Condensed Consolidated Financial Statements SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf of the undersigned thereunto duly authorized. Date: January 22, 1999 By:/s/Michael J. Walsh ---------------------- Michael J. Walsh President and Chief Executive Officer Date: January 22, 1999 By:/s/ James D. Allen ---------------------- James D. Allen Chief Financial Officer TANDYCRAFTS, INC. PRO FORMA FINANCIAL INFORMATION The following unaudited pro forma financial information is based on the historical financial statements of Tandycrafts, Inc. (the "Company") adjusted to give effect to the disposition of the operations of the Company's 121 leather and crafts retail stores and related manufacturing operations pursuant to the Board of Directors' approved plan, as if such dispositions had taken place on June 30, 1998 for the pro forma condensed consolidated statements of income and on September 30, 1998, for the pro forma condensed consolidated balance sheet, using the assumptions and adjustments set forth in the accompanying notes to the pro forma condensed consolidated financial statements. The pro forma financial information is not necessarily indicative of the results of operations or the financial position which would have been attained had the dispositions been consummated at either of the foregoing dates or earlier, or which may be attained in the future, nor does it give effect to any matters other than those described in the notes thereto. The pro forma financial information should be read in conjunction with the historical financial statements of the Company. TANDYCRAFTS, INC. PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET SEPTEMBER 30, 1998 (UNAUDITED) (DOLLARS IN THOUSANDS) Historical ----------- Tandycrafts, Tandy Pro Forma ASSETS Inc. Leather (a) Proceeds (b) Exit costs (c) Consolidated ----------- ----------- ------------ -------------- ------------ Current assets Cash $ 913 $ - $ - $ - $ 913 Accounts receivable, net 26,332 (1,605) - - 24,727 Inventories 47,123 (14,222) - - 32,901 Other current assets 7,996 (377) 1,950 - 9,569 ----------- ---------- ---------- ------------- ------------ Total current assets 82,364 (16,204) 1,950 - 68,110 ----------- ---------- ---------- ------------- ------------ Property and equipment, net 23,664 (1,198) - - 22,466 Other assets 6,773 (414) - - 6,359 Goodwill, net 37,548 (3,945) - - 33,603 ----------- ---------- ---------- ------------- ------------ $ 150,349 $ (21,761) $ 1,950 $ - $ 130,538 =========== ========== ========== ============= ============ LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable 12,031 (1,360) - - 10,671 Accrued liabilities and other 10,720 (655) - 2,703 12,768 ----------- ---------- ---------- ------------- ------------ Total current liabilities 22,751 (2,015) - 2,703 23,439 ----------- ---------- ---------- ------------- ------------ Long-term debt 35,910 - - - 35,910 Deferred taxes 2,822 - - - 2,822 Stockholders' equity Common stock, $1 par value; 50,000,000 shares authorized, 18,527,988 issued 18,528 - - - 18,528 Additional paid-in capital 20,544 - - - 20,544 Retained earnings 73,082 (19,746) 1,950 (2,703) 52,583 Treasury stock (23,288) - - - (23,288) ----------- ---------- ---------- ------------- ------------ Total stockholders' equity 88,866 (19,746) 1,950 (2,703) 68,367 ----------- ---------- ---------- ------------- ------------ $ 150,349 $ (21,761) $ 1,950 $ - $ 130,538 =========== ========== ========== ============= ============
TANDYCRAFTS, INC. PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF INCOME FOR THE YEAR ENDED JUNE 30, 1998 (UNAUDITED) (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) Historical ----------- Tandycrafts, Tandy Interest Pro Forma Inc. Leather (d) Expense (e) Consolidated (f) ----------- ----------- ----------- --------------- Net sales $ 232,495 $ (45,247) $ - $ 187,248 Operating costs and expenses: Cost of goods sold 153,484 (24,799) - 128,685 Selling, general and administrative 63,182 (19,693) - 43,489 Depreciation and amortization 4,828 (355) - 4,473 Loss on sale of business unit 623 - - 623 ----------- ----------- ---------- --------------- Total operating costs and expenses 222,117 (44,847) - 177,270 ----------- ----------- ---------- --------------- Operating income 10,378 (400) - 9,978 Interest expense, net 3,259 - (136) 3,123 ----------- ----------- ---------- --------------- Income before income taxes 7,119 (400) 136 6,855 Provision for income taxes 2,502 (141) 48 2,409 ----------- ----------- ---------- --------------- Net income $ 4,617 $ (259) $ 88 $ 4,446 =========== =========== ========== =============== Net income per common share: Basic and diluted $0.37 $0.35 ===== ===== Weighted average common shares: Basic 12,645 12,645 Diluted 12,659 12,659
TANDYCRAFTS, INC. PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF INCOME FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1998 (UNAUDITED) (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) Historical ------------ Tandycrafts, Tandy Interest Pro Forma Inc. Leather (d) Expense (e) Consolidated (f) ------------ ----------- ----------- --------------- Net sales $ 51,065 $ (8,868) $ - $ 42,197 Operating costs and expenses: Cost of goods sold 34,791 (5,040) - 29,751 Selling, general and administrative 13,077 (4,179) - 8,898 Depreciation and amortization 1,079 (95) - 984 ------------ ----------- ---------- --------------- Total operating costs and expenses 48,947 (9,314) - 39,633 ------------ ----------- ---------- --------------- Operating income 2,118 446 - 2,564 Interest expense, net 492 - (34) 458 ------------ ----------- ---------- --------------- Income before income taxes 1,626 446 34 2,106 Provision for income taxes 618 170 13 801 ------------ ----------- ---------- --------------- Net income $ 1,008 $ 276 $ 21 $ 1,305 ============ ============ ========== =============== Net income per common share: Basic and diluted $0.08 $0.10 ===== ===== Weighted average common shares: Basic 12,472 12,472 Diluted 12,475 12,475
TANDYCRAFTS, INC. NOTES TO PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (a) The adjustments in this column represent the elimination of the historical assets and liabilities of the Company's leather and crafts retail stores and related manufacturing operations as of September 30, 1998, with the net after-tax loss resulting from the elimination of such balances reflected as a charge to retained earnings. (b) The adjustments in this column represent estimated proceeds from the disposition of the operations of the Company's leather and crafts retail stores and related manufacturing operations and are comprised entirely of the NOL carryback the Company will realize resulting from the adoption of the plan of liquidation of Tandy Leather Company. No other proceeds from liquidatiuon or from NOL carryfowards are assumed for purposes of these proforma financial statements. (c) The adjustments in this column represent estimated transaction costs and other exit costs (e.g., lease obligations and other contractual commitments) directly related to the disposition of the Company's leather and crafts retail stores and related manufacturing operations. (d) The adjustments in this column represent the elimination of the historical income, expenses and related income tax effect of the divested operations of the Company's leather and crafts retail stores and related manufacturing operations for the respective period. (e) The adjustment to interest expense reflects the use of the estimated proceeds resulting from the disposition of the operations the Company's leather and crafts retail stores and related manufacturing operations as reflected in note (b) above, to reduce long-term debt based on an annual interest rate of 7%. (f) The pro forma income statements do not reflect certain estimated charges (i.e., transaction and other exit costs) related to the disposition of the operations of the Company's leather and crafts retail stores and related manufacturing operations. Such costs are reflected in the pro forma balance sheet as indicated in Note (c), above. -----END PRIVACY-ENHANCED MESSAGE-----