Tandy Leather Factory Q1 2023 Earnings Call Transcript

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May 18, 2023

There are 2 speakers on the call.

Operator

Good morning, everyone. Thank you for joining us for a discussion of Tandy's Q1 2023 financial results. I'm Dan Ross, General Counsel and Corporate Secretary for Tandy, and I will co moderate the discussion today. Our CEO, Janet Carr, will give just a very brief overview of the quarter, and then we will devote the conference Capital Investors questions and discussion. If you wish to ask a question or make a comment, please press the reactions button, which is located at the bottom of your Zoom screen, Counsel, and then select the raise hand.

Operator

Janet will recognize the questioners and ask you to unmute your line. You'll need to ask your questions out loud yourself through your computer or phone audio. Counsel. Unlike in past quarters, I will not be reading questions or comments directly from the chat. With that, let's get started.

Operator

Today's presentation will include statements other than historical results that constitute forward looking statements within the meaning of the Securities Act of 1930 III and the Securities Exchange Act of 1934, each as amended. These statements reflect our expectations or estimates based on the information we have today, but are not guarantees or predictions of future performance. They involve known and unknown risks, uncertainties and other factors, many of which are beyond our control and which may cause actual results to differ materially from the statements contained in this presentation. You are cautioned not to put undue reliance on these forward looking statements. The company assumes no obligation to update or otherwise revise these forward looking statements, except as required by law.

Operator

And now here's Janet Carr. Counsel.

Speaker 1

Thanks, Dan. Hi, everyone. Good morning. Our Q1 2023 sales were $20,400,000 down from 20 point Citi too with gross margin rate down 10 basis points. As of March 31, 2023, we held 8 Cancun, dollars 6,000,000 of cash and cash equivalents, up from $8,000,000 at year end.

Speaker 1

Inventory was $35,900,000 at the end of Capital Markets. We're pleased with our first Capital Markets. Our strategy to manage operating expenses, Cancun, maintain gross margin and deliver positive cash even in the face of weakening consumer demand is working. With a number of unprofitable Cancun. Our next question comes from the line of Dan Ross.

Speaker 1

Please go ahead. Thank you, Dan Ross. Thank you, Dan Ross. Thank you, Dan Ross. Thank you, Dan Ross.

Speaker 1

Thank you, Dan Ross. Thank you, Dan Ross. Thank you, Dan Ross. Thank you, Dan Ross. Thank you, Dan Ross.

Speaker 1

Thank you, Dan Ross. Thank you, Dan Ross. Thank you, Dan Ross. Thank you, Dan Ross. Cancun, while positioning us to grow future sales as the demand environment improves.

Speaker 1

And I am happy to take your questions.

Operator

Counsel. We have a few people just entering from the waiting room. If you would like to ask a question, please raise your hand.

Speaker 1

Counsel. We're going to set the speed record for shortest call ever. Counsel. Yes. I mean, look, we disclosed everything in our 10 Q, in our press release Counsel, with some commentary.

Speaker 1

And we're looking for these calls to really be a discussion rather than a long scripted blah, blah, blah, Counsel, and driven by whatever your questions, comments are. And we're happy to sit here for a little while as people are Counsel, pondering what they may want to ask. But we are also always available through our Investor Relations website or I think Counsel. My contact info is on press releases, so you can reach out to me directly if something occurs to you later.

Operator

Counsel. Again, to raise your hand, you would push the reactions button at the bottom of your Zoom screen and then select raise hand. Hi. This is Lenny Fuchs, Spade Partners.

Speaker 1

Hi, Lenny.

Operator

Hi. I wonder if you can comment on The store you opened on the military base?

Speaker 1

Yes. We opened a very small format Capital. I think it's maybe Fort Liberty now. Counsel. And we opened it in November of last year.

Speaker 1

And it's been an experiment. We have quite a military customer. Counsel. And we are really looking to see if being on base gives us an advantage. It is an interesting model.

Speaker 1

It's a Commission model percentage of sales versus paying a fixed rent. And the people who run Counseling, the concessions there are really, really supportive and really helping us reach out. Counsel. The sales are not sort of knocking anybody's socks off, but it's been a great learning. And because it's Got very low commitment.

Speaker 1

We agreed to a 1 year commitment and we can continue to renew each year if Counsel. We believe it's worth it. So it's really an experiment for us. There are a lot of bases in the U. S.

Speaker 1

And And maybe more importantly, a lot around the world that could be really attractive to Tandy. I think the international basis in a lot of ways are even more Capital because you do have a little bit more of a captive audience and not as much potential competition. Counsel. So I would say juries out on whether or not this is a robust model for us in the U. S.

Speaker 1

We are still learning a lot and looking forward Anyone else? Counsel. Well, should we call it a day, Dan?

Operator

Counsel. Yes, looks like we have no further questions.

Speaker 1

Okay. As always, you can always reach out to us directly. Counsel. And thank you again for your support. Thank you for your interest in Tandy.

Speaker 1

And looking forward to speaking to you next quarter.

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