EX-99.1 2 brhc10038543_ex99-1.htm EXHIBIT 99.1

Exhibit 99.1
MANAGEMENT PRESENTATION 2022

2 Today’s presentation will include statements, other than historical results, that constitute forward-looking statements within the meaning of the Securities Act of 1933 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. FORWARD-LOOKING STATEMENTS

3 Since 1919, Tandy Leather has been the leading supplier of quality leather, machines, tools, kits and instructional resources for generations of hobbyists and trade craftspeople making a living selling leatherwork. Tandy Highlights LARGE & GROWING MARKET MARKET LEADER MULTI-CHANNEL DISTRIBUTION CAPABLE TEAM STRONG FINANCIAL POSITION $40B global craft market $500MM leathercrafting market Growing at 8% 17% share in fragmented market Heritage brand 105 Retail Stores Global Ecommerce Commercial Division Transformed business Completed restatement Managed through COVID 5-year plan to $100MM $10MM net cash $38MM inventory $13-15MM real estate

Crafting is a large and growing market. GLOBAL CRAFT MARKET LEATHERCRAFTING MARKET MARKET OPPORTUNITY $40B 4 $500MM 1% of global crafting market 11% of US adult population leathercrafts Tandy is capturing about 17% of US market share Significant opportunity to grow share CAGR of 8% over next 5 years 63% of US households crafting Most do more than 1 type of craft Crafting is multi-generational MILLENIALS & GEN Z 41% of all crafters 35% of Tandy consumers - up 6% from 2020 Rising interest in hand-crafted, sustainable, artisanal products Desire to find meaningful work is likely driving the craft economy @jessmorelesther

5 The time for leathercrafting is right… LEATHERCRAFTING HITS BULLSEYE OF CRAFTING FOR MANY REASONS @damonmarkmakeit @whiskeyboundleather @teotanartistry BROAD APPEAL Both men and women leathercraft at similar levels Multi-generational –Boomers, Gen X, Millennials, Gen Z, and parents crafting with kids Many ways to enter and enjoy craft at all skill levels Leather has many end uses– jewelry, wallets, bags, belts, costumes and more APPEALS TO YOUNG CONSUMERS Millennials and Gen Z are driving the craft economy and leathercrafting appeals to their core values. Leather manufacturing recycles cowhides that would otherwise go into landfills. Hand-crafted, artisanal leather goods last decades. SUSTAINABILITY Leathercrafting centers the mind and is a perfect outlet for stress reduction, self-expression and creativity. Hand-crafted items are one-of-a-kind and highly personalized. SELF-EXPRESSION & PERSONALIZATION Leathercrafting is a job for some. 45% of older Millennials are selling their art/craft online. FULFILLING PROFESSION

6 Tandy: supplying the craft and trade of leatherworking. CUSTOMERS Making leather goods transcends gender and age. Tandy appeals to both hobbyists and trade professionals. Growth in younger 18-35 age groups LEATHER MACHINES HAND TOOLS HARDWARE KITS & GUIDES KEY PRODUCTS Tandy supplies leatherworkers with the essential materials, tools and instructional resources they need to hand-craft leather goods. In the last 2 years, we have significantly improved our assortment and quality across our key product categories. SALES CHANNELS RETAIL STORES ECOMMERCE COMMERCIAL Tandy products are sold through 3 key channels of distribution.

7 OUR MISSION To build on our legacy of inspiring the timeless art and trade of leatherworking. @dalegeorgebooher

8 Tandy is uniquely positioned to grow share and the category. STRONG BRAND EQUITY Heritage brand with 100+ years in leathercraft. Legacy in craft has built strong brand trust and pride. Leathercrafters have deep rooted love for Tandy. DISTINCT COMPETITIVE ADVANTAGE Tandy has 105 retail store locations. Allows customers to hand-select their leather, demo machines, take classes, use our open workspace and commune with the broader leathercrafting community. BETTER VALUE & SELECTION Broader selection and better quality and consistency. Buying power within supply chain gives us cost and price advantage. LEATHERCRAFTING MARKET $500MM CHANNELS TAILORED TO CUSTOMERS Not a one-size-fits-all approach. Multi-channel distribution allows us to tailor model to customer needs. TANDY LEATHER 17% share TANDY BRINGS CONSUMERS INTO THE CRAFT Tandy is where most leathercrafters get started – we’re a destination for classes, project ideas and instructional resources – conveniently located in consumers’ communities. . TARGET KEY CUSTOMER GROUPS Appeal to the unique needs and interests of Youth, Military & Veterans, Mental Health Organizations, New Distribution Channels and International Consumers . NEW ACQUISITION KEY DIFFERENTIATORS

9 Investing in brand transformation. IMPROVE CONSUMER PROPOSITION REBUILD FOUNDATION POSITION FOR LONG-TERM GROWTH Broader product assortment Better quality and consistency New everyday value pricing Updated branding – more professional look and feel Engaging marketing - better storytelling and personalization Invested in capable people Employee training program Quality inspection process Centralized web fulfillment New general ledger, point-of sale , warehouse management system and web platform Built Commercial Division Created roadmap to $100MM+ in sales and $15MM in operating income Over the last 3 years, we have been investing in 3 strategic areas. Despite the challenges presented by the pandemic and restatement, we have made steady progress against our goals.

10 Financial Snapshot – 2021 2021 SALES GROSS MARGIN PROFIT BALANCE SHEET SHARE BUY-BACKS $82.7MM +29% vs 2020 +10% vs 2019 56.9% $2.3MM operating income ($3.6 MM adjusting for restatement-related expenses)(1) $5.4MM adjusted EBITDA (2) $10.2MM cash $38.1MM inventory $0.4MM debt 713k shares 7.8% of total shares $3.84 average price per share

11 Financial Snapshot – 2022 Q1 2022 SALES GROSS MARGIN PROFIT BALANCE SHEET SHARE BUY-BACKS* $20.5MM -4% vs 2021 58.2% $0.8MM operating income $1.6MM adjusted EBITDA(2) $10.3MM cash $37.8MM inventory $0.4MM debt 360k shares 4.2% of total shares $5.00 average price per share *April, 2022

12 Sales 2017-2021 NUMBER OF STORES RETAIL ECOMMERCE COMMERCIAL 74% 19% 7% 68% 26% 6% 87% 9% 3% 2021 sales are flat to 2017, but with 13 fewer stores, store sales productivity has increased 13%. Ecommerce grew 140% in 2020 over 2019 due to COVID, but as store sales rebounded in 2021, much of those gains held, with Ecommerce sales declining only 7% in 2021 over 2020.

13 Gross Profit 2017-2021 Since our strategic shift to EDLP pricing in 2019, we gave up 300-400 bps in gross margin rate, or about $3MM in gross profit dollars in 2021 vs 2018 or 2017 on similar levels of sales.

14 Profitability 2017-2021 Profitability has been affected by the restatement and the pandemic in 2019 and 2020. The difference in operating income in 2021 vs 2017-18 after adjusting for restatement-related expenses is due to decline in margin rate associated with our competitive pricing strategy.

15 Inventory & Cash From Operations 2017-2021

16 Shares Outstanding 2017-2021 We have taken advantage of opportunities to buy shares in transactions with individual shareholders to reduce our share count by over 1MM shares over the last 5 years.

17 We have a roadmap to $100MM+ in sales and $15MM in operating income – and we have a plan to get there. Roadmap to $100MM+ CORE BUSINESS FOCUS ON TEACHING PILOT NEW FORMATS GROW COMMERCIAL @projectfree2fly PRODUCT IMPROVEMENTS @legacybrandleather OPTIMIZE RETAIL FLEET @powderriverleather NEW OPPORTUNITIES YOUTH CRAFTING ART THERAPY CHAIN WHOLESALE INTERNATIONAL 4 KEY GROWTH INITATIVES Tandy is positioned to bring new customers into the craft and expand the leathercrafting category.

18 Questions & Discussion

19 (1)Non-GAAP Reconciliation

20 (2)Non-GAAP Reconciliation @duckandchick