Tandy Leather sells HQ for $26.5 million, leases back space

Tandy Leather Factory Inc. (NASDAQ:TLF), a notable player in the leather and leather products industry with a market capitalization of $37 million, has completed the sale of its corporate headquarters, including its primary distribution center and flagship store located in Fort Worth, Texas.

According to InvestingPro data, the company maintains a strong financial position with more cash than debt on its balance sheet. The transaction, which was finalized on January 22, 2025, involved a gross cash purchase price of $26.5 million before deductions such as commissions, taxes, and other expenses.

The sale was made to Colonna Brothers, Inc., as per the Purchase and Sale Agreement dated November 27, 2024. Despite the sale, Tandy Leather will continue to operate from these facilities under lease agreements with the new owner until its planned relocation to new premises, which is expected to occur in the third quarter of 2025.

The strategic move allows Tandy Leather to unlock the value of its real estate assets while ensuring continuity of operations without interruption. This financial maneuver is part of the company’s broader strategy to optimize its asset base and invest in growth opportunities. The company’s strong liquidity position is evidenced by a current ratio of 6.39, with InvestingPro analysis showing liquid assets comfortably exceeding short-term obligations.

This news comes from a recent 8-K filing with the Securities and Exchange Commission (SEC), which provides a formal record of significant events relevant to shareholders and the financial community. The filing also includes forward-looking statements regarding the company’s expectations for future operations and financial performance.

The sale of the headquarters marks a notable financial event for Tandy Leather, which is incorporated in Delaware and trades on the Nasdaq under the ticker symbol (NASDAQ:TLF). Currently trading at $4.39, analysis suggests the stock may be undervalued. The company maintains a healthy gross profit margin of 56.78% and has demonstrated profitability over the last twelve months. The company’s decision to lease back the space ensures a seamless transition as it prepares for its future move.

In other recent news, Tandy Leather Factory Inc. has made significant strides in its operations. The company has entered into an agreement to sell its corporate headquarters, including its primary distribution center and flagship store in Fort Worth, Texas, for a cash purchase price of $26.5 million. The sale is expected to be finalized in January 2025, with Tandy Leather leasing back the space until September 2025. This strategic move is part of the company’s ongoing efforts to optimize its operations, potentially reshaping its operational footprint.

In addition, Tandy Leather has announced the renewal of its stock repurchase program. The board of directors approved the continuation of the program, allowing the company to buy back up to $5 million of its own common stock in open market transactions, with the program set to extend until September 30, 2026.

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