We could not find any results for:
Make sure your spelling is correct or try broadening your search.
Share Name | Share Symbol | Market | Type |
---|---|---|---|
Tandy Leather Factory Inc (PK) | USOTC:TLFA | OTCMarkets | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 5.48 | 5.02 | 5.70 | 0.00 | 01:00:00 |
|
Delaware
|
75-2543540
|
|
(State or other jurisdiction of incorporation or organization)
|
(I.R.S. Employer Identification No.)
|
Title of each class
|
Trading Symbol
|
Name of each exchange on which registered
|
Common Stock, par value $0.0024
|
TLFA
|
N/A*
|
|
Large accelerated filer ☐
|
Non-accelerated filer ☒
|
|
Accelerated filer ☐
|
Smaller reporting company ☒
|
Emerging growth company ☐
|
2
|
|||
2
|
|||
6
|
|||
19
|
|||
29
|
|||
34 | |||
34 | |||
34 | |||
34
|
|||
35 | |||
37 |
Item 1. |
Consolidated Financial Statements.
|
September 30
2020
Unaudited
|
December 31,
2019
|
|||||||
ASSETS
|
||||||||
CURRENT ASSETS:
|
||||||||
Cash and cash equivalents
|
$
|
10,156
|
$
|
15,905
|
||||
Short-term investments
|
-
|
9,152
|
||||||
Accounts receivable-trade, net of allow ance for doubtful accounts of $16 at September 30, 2020 and December 31, 2019, respectively
|
394
|
409
|
||||||
Inventory
|
34,814
|
24,042
|
||||||
Income tax receivable
|
2,718
|
1,629
|
||||||
Prepaid expenses
|
768
|
1,082
|
||||||
Other current assets
|
107
|
297
|
||||||
Total current assets
|
48,957
|
52,516
|
||||||
Property and equipment, at cost
|
27,524
|
27,471
|
||||||
Less accumulated depreciation
|
(14,787
|
)
|
(14,552
|
)
|
||||
Property and equipment, net
|
12,737
|
12,919
|
||||||
Operating lease assets
|
12,490
|
13,897
|
||||||
Deferred income taxes
|
603
|
427
|
||||||
Other intangibles, net of accumulated amortization of $548 and $547 at September 30, 2020 and December 31, 2019, respectively
|
6 |
7
|
||||||
Other assets
|
353
|
345
|
||||||
TOTAL ASSETS
|
$
|
75,146
|
$
|
80,111
|
||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
||||||||
CURRENT LIABILITIES:
|
||||||||
Accounts payable-trade
|
$
|
4,881
|
$
|
5,753
|
||||
Accrued expenses and other liabilities
|
3,015
|
2,656
|
||||||
Operating lease liabilities
|
3,652
|
3,823
|
||||||
Total current liabilities
|
11,548
|
12,232
|
||||||
Uncertain tax positions
|
296
|
296
|
||||||
Other non-current liabilities
|
510
|
509
|
||||||
Operating lease liabilities, non-current
|
9,894
|
10,655
|
||||||
Long-term debt, net of current maturities
|
428
|
-
|
||||||
COMMITMENTS AND CONTINGENCIES (Note 6)
|
||||||||
STOCKHOLDERS’ EQUITY:
|
||||||||
Preferred stock, $0.10 par value; 20,000,000 shares authorized; none issued or outstanding; attributes to be determined on issuance
|
-
|
-
|
||||||
Common stock, $0.0024 par value; 25,000,000 shares authorized; 10,467,367 and 10,446,563 shares issued at September 30, 2020 and December 31, 2019, respectively
|
25
|
25
|
||||||
Paid-in capital
|
5,666
|
5,037
|
||||||
Retained earnings
|
57,716
|
|
62,211
|
|
||||
Treasury stock at cost (1,424,376 shares at September 30, 2020 and December 31, 2019, respectively)
|
(9,773
|
) |
(9,773
|
) | ||||
Accumulated other comprehensive loss (net of tax of $395 and $359 at September 30, 2020 and December 31, 2019, respectively)
|
(1,164
|
)
|
(1,081
|
)
|
||||
Total stockholders’ equity
|
52,470
|
56,419
|
||||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
|
$
|
75,146
|
$
|
80,111
|
Three Months Ended September 30,
|
Nine Months Ended September 30,
|
|||||||||||||||
2020
|
2019
|
2020
|
2019
|
|||||||||||||
Net sales
|
$
|
15,990
|
$
|
16,311
|
$
|
42,281
|
$
|
54,449
|
||||||||
Cost of sales
|
6,701
|
7,462
|
17,883
|
23,985
|
||||||||||||
Gross profit
|
9,289
|
8,849
|
24,398
|
30,464
|
||||||||||||
Operating expenses
|
10,528
|
11,254
|
29,204
|
31,903
|
||||||||||||
Impairment expense
|
-
|
-
|
1,078
|
-
|
||||||||||||
Loss from operations
|
(1,239
|
)
|
(2,405
|
)
|
(5,884
|
)
|
(1,439
|
)
|
||||||||
Other (income) expense:
|
||||||||||||||||
Interest expense
|
2
|
-
|
2
|
32
|
||||||||||||
Other, net
|
29
|
(62
|
)
|
(75
|
)
|
(7
|
)
|
|||||||||
Total other (income) expense
|
31
|
(62
|
)
|
(73
|
)
|
25
|
||||||||||
Loss before income taxes
|
(1,270
|
)
|
(2,343
|
)
|
(5,811
|
)
|
(1,464
|
)
|
||||||||
Benefit for income taxes
|
(288
|
)
|
(624
|
)
|
(1,316
|
)
|
(390
|
)
|
||||||||
Net loss
|
$
|
(982
|
)
|
$
|
(1,719
|
)
|
$
|
(4,495
|
)
|
$
|
(1,074
|
)
|
||||
Foreign currency translation adjustments, net of tax
|
133
|
(196
|
)
|
(83
|
)
|
205
|
||||||||||
Comprehensive loss
|
$
|
(849
|
)
|
$
|
(1,915
|
)
|
$
|
(4,578
|
)
|
$
|
(869
|
)
|
||||
Net loss per common share:
|
||||||||||||||||
Basic
|
$
|
(0.11
|
)
|
$
|
(0.19
|
)
|
$
|
(0.50
|
)
|
$
|
(0.12
|
)
|
||||
Diluted
|
$
|
(0.11
|
)
|
$
|
(0.19
|
)
|
$
|
(0.50
|
)
|
$
|
(0.12
|
)
|
||||
Weighted average number of shares outstanding:
|
||||||||||||||||
Basic
|
9,042,991
|
8,932,246
|
9,038,415
|
8,957,578
|
||||||||||||
Diluted
|
9,042,991
|
8,932,246
|
9,038,415
|
8,957,578
|
For the Nine Months Ended September 30,
|
||||||||
2020
|
2019
|
|||||||
Cash flows from operating activities:
|
||||||||
Net loss
|
$
|
(4,495
|
)
|
$
|
(1,074
|
)
|
||
Adjustments to reconcile net loss to net cash provided by operating activities:
|
||||||||
Depreciation and amortization
|
781
|
1,387
|
||||||
Operating lease asset amortization
|
2,425
|
2,604
|
||||||
Impairment of long-lived assets
|
1,078
|
-
|
||||||
(Gain) loss on disposal of assets
|
143
|
(35
|
)
|
|||||
Stock-based compensation
|
629
|
570
|
||||||
Deferred income taxes
|
(176
|
)
|
(507
|
)
|
||||
Exchange (gain) loss
|
(1
|
)
|
134
|
|||||
Changes in operating assets and liabilities:
|
||||||||
Accounts receivable-trade
|
15
|
(123
|
)
|
|||||
Inventory
|
(10,757
|
)
|
9,573
|
|||||
Prepaid expenses
|
423
|
453
|
||||||
Other current assets
|
59
|
(105
|
)
|
|||||
Accounts payable-trade
|
1,481
|
488
|
||||||
Accrued expenses and other liabilities
|
244
|
(1,759
|
)
|
|||||
Income taxes, net
|
(1,082
|
)
|
(998
|
)
|
||||
Other assets
|
(2,488
|
)
|
(149
|
)
|
||||
Operating lease liabilities
|
(2,548
|
)
|
(2,538
|
)
|
||||
Total adjustments
|
(9,774
|
)
|
8,995
|
|||||
Net cash provided by (used in) operating activities
|
(14,269
|
)
|
7,921
|
|||||
Cash flows from investing activities:
|
||||||||
Purchase of property and equipment
|
(1,164
|
)
|
(163
|
)
|
||||
Purchase of short-term investments
|
(1,697
|
)
|
(16,393
|
)
|
||||
Proceeds from sales of assets
|
1
|
84
|
||||||
Proceeds from sales of short-term investments
|
10,910
|
7,395
|
||||||
Net cash provided by (used in) investing activities
|
8,050
|
(9,077
|
)
|
|||||
Cash flows from financing activities:
|
||||||||
Proceeds from long-term debt
|
410
|
-
|
||||||
Payments on long-term debt
|
-
|
(8,968
|
)
|
|||||
Repurchase of treasury stock
|
-
|
(735
|
)
|
|||||
Net cash provided by (used in) financing activities
|
410
|
(9,703
|
)
|
|||||
Effect of exchange rate changes on cash and cash equivalents
|
60
|
135
|
||||||
Net decrease in cash and cash equivalents
|
(5,749
|
)
|
(10,724
|
)
|
||||
Cash and cash equivalents, beginning of period
|
15,905
|
24,070
|
||||||
Cash and cash equivalents, end of period
|
$
|
10,156
|
$
|
13,346
|
Number of
Shares
Common
Stock
Outstanding
|
Par
Value
|
Additional
Paid-in
Capital
|
Treasury
Stock
|
Retained
Earnings
|
Accumulated
Other
Comprehensive
Income (Loss)
|
Total
|
||||||||||||||||||||||
Balance, December 31, 2019
|
9,022,187
|
$
|
25
|
$
|
5,037
|
$
|
(9,773
|
)
|
$
|
62,211
|
$
|
(1,081
|
)
|
$
|
56,419
|
|||||||||||||
Stock-based compensation expense
|
-
|
-
|
228
|
-
|
-
|
-
|
228
|
|||||||||||||||||||||
Issuance of restricted stock
|
20,804
|
-
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||||||||
Net loss
|
-
|
-
|
-
|
-
|
(1,738
|
)
|
-
|
(1,738
|
)
|
|||||||||||||||||||
Foreign currency translation adjustments, net of tax
|
-
|
-
|
-
|
-
|
-
|
(346
|
)
|
(346
|
)
|
|||||||||||||||||||
Balance, March 31, 2020
|
9,042,991
|
25
|
5,265
|
(9,773
|
)
|
60,473
|
(1,427
|
)
|
$
|
54,563
|
||||||||||||||||||
Stock-based compensation expense
|
-
|
-
|
183
|
-
|
-
|
-
|
183
|
|||||||||||||||||||||
Net loss
|
-
|
-
|
-
|
-
|
(1,775
|
)
|
-
|
(1,775
|
)
|
|||||||||||||||||||
Foreign currency translation adjustments, net of tax
|
-
|
-
|
-
|
-
|
-
|
130
|
130
|
|||||||||||||||||||||
Balance, June 30, 2020
|
9,042,991
|
25
|
5,448
|
(9,773
|
)
|
58,698
|
(1,297
|
)
|
$
|
53,101
|
||||||||||||||||||
Stock-based compensation expense
|
-
|
-
|
218
|
-
|
-
|
-
|
218
|
|||||||||||||||||||||
Net loss
|
-
|
-
|
-
|
-
|
(982
|
)
|
-
|
(982
|
)
|
|||||||||||||||||||
Foreign currency translation adjustments, net of tax
|
-
|
-
|
-
|
-
|
-
|
133
|
133
|
|||||||||||||||||||||
Balance, September 30, 2020
|
9,042,991
|
$
|
25
|
$
|
5,666
|
$
|
(9,773
|
)
|
$
|
57,716
|
$
|
(1,164
|
)
|
$
|
52,470
|
|||||||||||||
Balance, December 31, 2018
|
9,060,561
|
$
|
25
|
$
|
4,267
|
$
|
(9,038
|
)
|
$
|
64,476
|
$
|
(1,444
|
)
|
$
|
58,286
|
|||||||||||||
Cumulative effect of accounting change, net of tax - ASC 842
|
-
|
-
|
-
|
-
|
(362
|
)
|
-
|
(362
|
)
|
|||||||||||||||||||
Stock-based compensation expense
|
-
|
-
|
186
|
-
|
-
|
-
|
186
|
|||||||||||||||||||||
Issuance of restricted stock
|
1,408
|
-
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||||||||
Purchase of treasury stock
|
(127,945
|
)
|
-
|
-
|
(715
|
)
|
-
|
-
|
(715
|
)
|
||||||||||||||||||
Net income
|
-
|
-
|
-
|
-
|
1,520
|
-
|
1,520
|
|||||||||||||||||||||
Foreign currency translation adjustments, net of tax
|
-
|
-
|
-
|
-
|
-
|
314
|
314
|
|||||||||||||||||||||
Balance, March 31, 2019
|
8,934,024
|
$
|
25
|
$
|
4,453
|
$
|
(9,753
|
)
|
$
|
65,634
|
$
|
(1,130
|
)
|
$
|
59,229
|
|||||||||||||
Stock-based compensation expense
|
-
|
-
|
192
|
-
|
-
|
-
|
192
|
|||||||||||||||||||||
Purchase of treasury stock
|
(1,800
|
)
|
-
|
-
|
(9
|
)
|
-
|
-
|
(9
|
)
|
||||||||||||||||||
Net loss
|
-
|
-
|
-
|
-
|
(875
|
)
|
-
|
(875
|
)
|
|||||||||||||||||||
Foreign currency translation adjustments, net of tax
|
-
|
-
|
-
|
-
|
-
|
87
|
87
|
|||||||||||||||||||||
Balance, June 30, 2019
|
8,932,224
|
$
|
25
|
$
|
4,645
|
$
|
(9,762
|
)
|
$
|
64,759
|
$
|
(1,043
|
)
|
$
|
58,624
|
|||||||||||||
Stock-based compensation expense
|
-
|
-
|
192
|
-
|
-
|
-
|
192
|
|||||||||||||||||||||
Purchase of treasury stock
|
(2,037
|
)
|
-
|
-
|
(11
|
)
|
-
|
-
|
(11
|
)
|
||||||||||||||||||
Net loss
|
-
|
-
|
-
|
-
|
(1,719
|
)
|
-
|
(1,719
|
)
|
|||||||||||||||||||
Foreign currency translation adjustments, net of tax
|
-
|
-
|
-
|
-
|
-
|
(196
|
)
|
(196
|
)
|
|||||||||||||||||||
Balance, September 30, 2019
|
8,930,187
|
25
|
4,837
|
(9,773
|
)
|
63,040
|
(1,239
|
)
|
56,890
|
(in thousands)
|
Three Months Ended September 30,
|
Nine Months Ended September 30,
|
||||||||||||||
2020
|
2019
|
2020
|
2019
|
|||||||||||||
United States
|
$
|
14,393
|
$
|
14,367
|
$
|
37,781
|
$
|
47,746
|
||||||||
Canada
|
1,216
|
1,445
|
3,500
|
4,573
|
||||||||||||
Spain
|
381
|
284
|
1,000
|
938
|
||||||||||||
All other countries
|
-
|
215
|
-
|
1,192
|
||||||||||||
Net sales
|
$
|
15,990
|
$
|
16,311
|
$
|
42,281
|
$
|
54,449
|
(in thousands)
|
September 30, 2020
|
December 31, 2019
|
||||||
On hand:
|
||||||||
Finished goods held for sale
|
$
|
33,316
|
$
|
20,575
|
||||
Raw materials and work in process
|
776
|
717
|
||||||
Inventory in transit
|
722
|
2,750
|
||||||
TOTAL
|
$
|
34,814
|
$
|
24,042
|
|
• |
Level 1 – observable inputs that reflect quoted prices in active markets for identical assets or liabilities.
|
|
• |
Level 2 – significant observable inputs other than quoted prices in active markets for similar assets and liabilities, such as quoted prices for identical or similar assets or liabilities in markets that are not active; or other inputs
that are observable or can be corroborated by observable market data.
|
|
• |
Level 3 – significant unobservable inputs reflecting our own assumptions, consistent with reasonably available assumptions made by other market participants.
|
(in thousands)
|
September 30, 2020
|
|||||||||
Gross
|
|
Accumulated Amortization
|
Net
|
|||||||
Trademarks/copyrights
|
$
|
554
|
$
|
548
|
$
|
6
|
||||
TOTAL
|
$
|
554
|
$
|
548
|
$
|
6
|
December 31, 2019
|
||||||||||
Gross
|
|
Accumulated Amortization
|
Net
|
|||||||
Trademarks/copyrights
|
554
|
547
|
7
|
|||||||
TOTAL
|
$
|
554
|
$
|
547
|
$
|
7
|
(in thousands)
|
September 30, 2020
|
December 31, 2019
|
||||||
Institute of Official Credit (“ICO”) Guarantee for Small and Medium-sized Enterprises with Banco Santander S.A. (Spain) as described more fully above - interest due monthly at 1.50%; matures June 4, 2025
|
$
|
428
|
-
|
|||||
Less current maturities
|
-
|
-
|
||||||
TOTAL
|
$
|
428
|
$
|
- |
|
|
Shares
(in thousands)
|
Weighted Average
Share Price
|
||||||
Balance, December 31, 2019
|
|
606
|
$
|
7.27
|
||||
Granted
|
33
|
4.38
|
||||||
Vested
|
(19
|
)
|
6.61
|
|||||
Balance, September 30, 2020
|
|
620
|
$
|
7.27
|
||||
Balance, December 31, 2018
|
|
658
|
$
|
7.39
|
||||
Granted
|
28
|
5.64
|
||||||
Forfeited
|
(5
|
)
|
5.64
|
|||||
Vested
|
(1
|
)
|
7.72
|
|||||
Balance, September 30, 2019
|
|
680
|
$
|
7.39
|
(in thousands)
|
||||
2020
|
$
|
208
|
||
2021
|
812
|
|||
2022
|
760
|
|||
2023
|
516
|
|||
Total unrecognized expense
|
$
|
2,296
|
(in thousands except share data)
|
Three Months Ended September 30,
|
Nine Months Ended September 30,
|
||||||||||||||
2020 (1)
|
2019 (1)
|
2020 (1)
|
2019 (1)
|
|||||||||||||
Numerator:
|
||||||||||||||||
Net loss
|
$
|
(982
|
)
|
$
|
(1,719
|
)
|
$
|
(4,495
|
)
|
$
|
(1,074
|
)
|
||||
Denominator:
|
||||||||||||||||
Basic weighted-average common shares ouststanding
|
9,042,991
|
8,932,246
|
9,038,415
|
|
8,957,578
|
|||||||||||
Diluted weighted-average common shares outstanding
|
9,042,991
|
8,932,246
|
9,038,415
|
|
8,957,578
|
Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations.
|
|
■ |
Accelerating implementation of our new web platform which supported a significantly improved consumer experience (look-and-feel, searchability, relevant content including video, and product and pricing information) integration of
inventory, shipping and other systems, and substantial reduction in the time, manual effort and need for outside resources to make additions and changes;
|
|
■ |
Accelerating centralization of our web fulfillment activities to our Fort Worth warehouse which provided significant improvement in fulfillment rates and shipping times, and supported early product testing, an increase in product breadth
by offering online-only items that required limited inventory investment, and other inventory efficiencies;
|
|
■ |
Shifting marketing resources from print and in-store activities to digital, with increased investments in SEO, SEM, email, digital advertising, social media, SMS/MMS, and affiliate links;
|
|
■ |
Accelerating the retail employee training program in the areas of product knowledge, leathercrafting knowledge and selling tools while stores were closed;
|
|
■ |
Continuing to drive the Commercial Program, through a dedicated team focused on the Company’s largest customers with a business model that meets these customers’ unique needs including dedicated sales representatives, clear and
competitive volume-based pricing, personalized service and sourcing, shipping directly to customers from our distribution center, and improved product consistency, quality and availability;
|
|
■ |
Continuing to improve the quality and assortment of the product offering to better appeal to more advanced leather-crafters and business customers; and
|
|
■ |
Continuing to build the organization, processes, infrastructure, tools and systems to efficiently execute these strategies.
|
(in thousands)
|
Three Months Ended September 30,
|
|||||||||||||||
2020
|
2019
|
$ Change
|
% Change
|
|||||||||||||
Sales
|
$
|
15,990
|
$
|
16,311
|
$
|
(321
|
)
|
(2.0
|
%)
|
|||||||
Gross profit
|
9,289
|
8,849
|
440
|
5.0
|
%
|
|||||||||||
Gross margin percentage
|
58.1
|
%
|
54.3
|
%
|
3.8
|
%
|
||||||||||
Operating expenses
|
10,528
|
11,254
|
(726
|
)
|
(6.5
|
%)
|
||||||||||
Income (loss) from operations
|
$
|
(1,239
|
)
|
$
|
(2,405
|
)
|
$
|
1,166
|
(48.5
|
%)
|
(in thousands, except store data)
|
Three Months Ended September 30,
|
|||||||||||||||||||||||
|
2020
|
2019
|
2020 vs 2019
|
|||||||||||||||||||||
# Stores
|
Sales
|
# Stores
|
Sales
|
$ Change
|
% Change
|
|||||||||||||||||||
Same stores
|
106
|
$
|
15,990
|
106
|
$
|
15,421
|
$
|
569
|
3.7
|
%
|
||||||||||||||
New stores
|
-
|
-
|
-
|
-
|
-
|
N/A
|
||||||||||||||||||
Closed stores
|
-
|
-
|
10
|
890
|
(890
|
)
|
(100.0
|
)%
|
||||||||||||||||
Total at year-end
|
106
|
$
|
15,990
|
116
|
$
|
16,311
|
$
|
(321
|
)
|
|
|
(in thousands)
|
Three Months Ended September 30,
|
|||||||
2020
|
2019
|
|||||||
Operating expenses
|
$
|
10,528
|
$
|
11,254
|
||||
Non-routine items related to restatement
|
(1,362
|
)
|
(297
|
)
|
||||
Adjusted operating expenses
|
$
|
9,166
|
$
|
10,957
|
|
|||
Operating expenses % of sales
|
65.8
|
%
|
69.0
|
%
|
||||
Adjusted operating expenses % of sales
|
57.3
|
%
|
67.2
|
%
|
(in thousands)
|
Nine Months Ended September 30,
|
|||||||||||||||
2020
|
2019
|
$ Change
|
% Change
|
|||||||||||||
Sales
|
$
|
42,281
|
$
|
54,449
|
$
|
(12,168
|
)
|
(22.3
|
%)
|
|||||||
Gross profit
|
24,398
|
30,464
|
(6,066
|
)
|
(19.9
|
%)
|
||||||||||
Gross margin percentage
|
57.7
|
%
|
55.9
|
%
|
1.8
|
%
|
||||||||||
Operating expenses
|
29,204
|
31,903
|
(2,699
|
)
|
(8.5
|
%)
|
||||||||||
Impairment expense
|
1,078
|
-
|
1,078
|
N/A
|
||||||||||||
Income (loss) from operations
|
$
|
(5,884
|
)
|
$
|
(1,439
|
)
|
$
|
(4,445
|
)
|
308.9
|
%
|
(in thousands, except store data)
|
Nine Months Ended September 30, 2019
|
|||||||||||||||||||||||
|
2020
|
2019
|
2020 vs 2019
|
|||||||||||||||||||||
# Stores
|
Sales
|
# Stores
|
Sales
|
$ Change
|
% Change
|
|||||||||||||||||||
Same stores
|
106
|
$
|
41,404
|
106
|
$
|
50,679
|
$
|
(9,275
|
)
|
(18.3
|
)%
|
|||||||||||||
New stores
|
-
|
-
|
-
|
-
|
-
|
N/A
|
||||||||||||||||||
Closed stores
|
9
|
877
|
14
|
3,770
|
(2,893
|
)
|
(76.7
|
)%
|
||||||||||||||||
Total at year-end
|
106
|
$
|
42,281
|
116
|
$
|
54,449
|
$
|
(12,168
|
)
|
|
|
(in thousands)
|
Nine Months Ended September 30,
|
|||||||
2020
|
2019
|
|||||||
Operating expenses
|
$
|
29,204
|
$
|
31,903
|
||||
Non-routine items related to restatement
|
(2,407
|
)
|
-
|
|||||
Non-routine items related to CFO transition
|
(389
|
)
|
-
|
|||||
Adjusted operating expenses
|
$
|
26,408
|
|
$
|
31,903
|
|||
Operating expenses % of sales
|
69.1
|
%
|
58.6
|
%
|
||||
Adjusted operating expenses % of sales
|
62.5
|
%
|
58.6
|
%
|
(in thousands)
|
Nine Months Ended September 30,
|
|||||||
2020
|
2019
|
|||||||
Net cash provided by (used in) operating activities
|
(14,269
|
)
|
7,921
|
|||||
Net cash provided by (used in) investing activities
|
8,050
|
(9,077
|
)
|
|||||
Net cash provided by (used in) financing activities
|
410
|
(9,703
|
)
|
|||||
Effect of exchange rate changes on cash and cash equivalents
|
60
|
135
|
||||||
Net decrease in cash and cash equivalents
|
$
|
(5,749
|
)
|
$
|
(10,724
|
)
|
Item 4. |
Controls and Procedures.
|
|
• |
Inventory was not stated on a FIFO basis nor was it stated at the lower of FIFO cost or net realizable value;
|
|
• |
Freight-in, warehousing and handling expenditures, factory labor and overhead and freight-out costs were not correctly capitalized;
|
|
• |
Warehousing and handling expenditures were incorrectly classified as operating expenses;
|
|
• |
Allowance for sales returns was incorrectly calculated and accounted for;
|
|
• |
Net gift card liability was not correctly accounted for in 2017;
|
|
• |
Lease asset and liability under ASC Topic 842 was incorrectly calculated;
|
|
• |
PTO related accrued liabilities were incorrectly calculated;
|
|
• |
Provision for income taxes, including adjustments related to the Tax Cuts and Jobs Act (the “Tax Act”), uncertain tax position (UTP) liability and related interest expense, and correction of taxable
income on the return of our Canada and Spain foreign subsidiaries; Foreign currency gains and losses associated with the Company’s Canadian subsidiary were incorrectly classified as a component of accumulated other comprehensive
loss and the cumulative translation adjustments included in accumulated other comprehensive loss were not tax effected; and
|
|
• |
Shares repurchased and subsequently cancelled were incorrectly accounted for as treasury stock
|
|
i. |
Hired a new, highly-qualified CFO in January 2021 with extensive public-company experience;
|
|
ii. |
Replaced critical roles within our accounting team with contract accounting resources and ultimately (ongoing) full-time employees with expertise in GAAP accounting, SEC reporting and disclosure, internal audit and internal controls;
|
|
iii. |
Replaced our legacy accounting systems with an integrated enterprise resource planning (“ERP”) solution which includes general ledger, warehouse management and factory production modules designed to calculate inventory on a FIFO basis;
|
|
iv. |
Made improvements to our accounting close process, including a formalized accounting close checklist establishing accountability for oversight and review;
|
|
v. |
Documented process narratives in the following areas: (i) financial reporting, (ii) inventory, (iii) purchasing and accounts payable, (iv) revenue, (v) fixed assets and lease accounting, (vi) general
accounting, treasury and financial planning & analysis, (vii) tax, (viii) information technology (IT) governance, and (ix) HR and payroll; and
|
|
vi. |
Created a risk controls matrix which includes, among other things, a comprehensive list of key and mitigating controls, a description of the risk the control is designed to mitigate, the individual
responsible for each control, the frequency in which the control is performed, and a mapping of each control to the five COSO Framework components (control environment, risk assessment, control activities, information and communication, or
monitoring activities).
|
|
i. |
Ongoing recruitment and hiring of permanent, qualified public-company accounting personnel;
|
|
ii. |
Point-of-sale systems implementation that will be fully integrated with our new ERP system;
|
|
iii. |
Redesigning our accounting procedures and activities to align with our new ERP system that will include built-in controls to improve upon the reliability of financial reporting and the preparation of financial statements in accordance
with GAAP;
|
|
iv. |
Reporting the progress and results of our remediation plan to the Audit Committee on a recurring basis, including the identification, status, and resolution of internal control deficiencies; and
|
|
v. |
Creating a comprehensive approach to regularly evaluate the operating effectiveness of our disclosure controls and procedures and our internal control over financial reporting using the COSO Framework as a guide.
|
|
■ |
Recurring meetings with leadership, finance and accounting and other key functional areas to train staff on processes for oversight and emphasize each individual’s accountability for internal control compliance, and to create a pattern
of regular discussion of such controls.
|
|
■ |
Periodic communications from the CEO, CFO and other key senior leaders on the Company’s mission, core values, Code of Business Conduct and Ethics, whistleblower policies, and each employee’s individual responsibility for internal control
compliance.
|
|
■ |
Reorganization of the finance and accounting team to ensure appropriate segregation of duties, oversight and review of work, and recruiting and hiring qualified, competent employees with relevant experience for the roles.
|
|
■ |
Regular performance evaluations to include position-specific criteria for functional competence.
|
|
■ |
New systems designed to calculate inventory at FIFO and create efficiency and accuracy through integration: we implemented the warehouse management, factory production system and general ledger systems modules as part of our new ERP
system implementation which went live on September 1, 2020. We are still in the process of implementing our new point-of-sale system, which will be fully integrated with our ERP system and with a phased implementation across our fleet of
stores throughout 2021.
|
|
■ |
Creation and implementation of newly-designed processes, structures, delegation of authority and controls, in accordance with the COSO Framework, including:
|
|
o |
The creation of a risk controls matrix;
|
|
o |
Driving a greater sense of accountability by requiring sub-certifications below the CEO and CFO level for certain key accounting, finance and operations personnel;
|
|
o |
Quarterly updates for the CFO regarding upcoming accounting pronouncement and proposed changes to GAAP accounting standards, tax regulations, and other requirements that may impact the Company’s financial reporting;
|
|
o |
Quarterly reviews of the most significant accounting estimates and judgements;
|
|
o |
Validation of results through detailed variance analyses and reconciliation of account balances;
|
|
o |
Monthly business review of actual financial performance compared to forecasts with participation from leadership across the organization; and
|
|
o |
Establishing a disclosure committee comprised of key management throughout the different areas of the organization to evaluate the appropriateness of disclosures in the Company’s periodic filings on Forms 10-K and 10-Q and to support the
CEO and CFO with the certification process.
|
Item 1. |
Item 1A. |
Item 2. |
Period
|
(a) Total
number of
shares
purchased |
(b)
Average
price
paid per
share
|
(c) Total number of
shares purchased as
part of publicly
announced plans or
programs
|
(d) Maximum number
or dollar value of
shares that may yet be
purchased under the
plans or programs (1)
|
||||||||||||
July 1 – July 31, 2020
|
—
|
—
|
—
|
996,163 shares
|
||||||||||||
August 1 – August 31, 2020
|
—
|
—
|
—
|
$
|
5,000,000
|
|||||||||||
September 1 – September 30, 2020
|
—
|
—
|
—
|
$
|
5,000,000
|
|||||||||||
Total
|
—
|
—
|
—
|
Item 6. |
Exhibits.
|
Exhibit
Number
|
Description
|
3.1
|
|
3.2
|
|
3.3
|
|
4.1
|
|
10.1
|
|
10.2
|
|
10.3
|
|
10.4
|
|
10.5
|
|
10.6
|
|
10.7
|
10.8
|
|
14.1
|
|
21.1
|
|
13a-14(a) or 15d-14(a) Certification by Janet Carr, Chief Executive Officer.
|
|
13a-14(a) or 15d-14(a) Certification by Michael Galvan, Chief Financial Officer.
|
|
Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
*101.INS
|
XBRL Instance Document.
|
*101.SCH
|
XBRL Taxonomy Extension Schema Document.
|
*101.CAL
|
XBRL Taxonomy Extension Calculation Document.
|
*101.DEF
|
XBRL Taxonomy Extension Definition Document.
|
*101.LAB
|
XBRL Taxonomy Extension Labels Document.
|
*101.PRE
|
XBRL Taxonomy Extension Presentation Document.
|
|
TANDY LEATHER FACTORY, INC.
|
(Registrant)
|
Date: September 2, 2021
|
By:
|
/s/ Janet Carr |
Janet Carr
|
|
Chief Executive Officer
|
Date: September 2, 2021
|
By:
|
/s/ Michael Galvan |
Michael Galvan
|
|
Chief Financial Officer
|
1 Year Tandy Leather Factory (PK) Chart |
1 Month Tandy Leather Factory (PK) Chart |
It looks like you are not logged in. Click the button below to log in and keep track of your recent history.
Support: +44 (0) 203 8794 460 | support@advfn.com
By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions