Tandy Leather Factory, Inc. (AMEX: TLF) today reported financial results for the first quarter of 2010. Net income for the quarter ended March 31, 2010 was $948,000, up from net income of $698,000 in the first quarter of 2009, an increase of 36%. Fully-diluted earnings per share for the quarter were $0.09 in the current quarter, compared to $0.06 in last year’s first quarter. Total sales for the first quarter were $14.6 million, an increase of 10.7% compared to 2009’s first quarter sales of $13.2 million.

Sales from the Retail Leathercraft division, consisting of the Tandy Leather retail store chain, increased $1 million in the first quarter, up 15% from last year's first quarter sales. The store chain consisted of seventy-six stores as of March 31, 2010, compared to seventy-four retail stores a year ago. First quarter sales for the Wholesale Leathercraft division, consisting of the Leather Factory wholesale stores and the National Account group, increased $301,000, or 5% from the same quarter last year. International Leathercraft, consisting of one store located in the United Kingdom, added sales of $384,000 for the quarter, a 31% increase over last year’s first quarter sales of $293,000.

Consolidated gross profit margin increased from 58.7% in the first quarter of 2009 to 61.5% in the first quarter of 2010, a significant improvement. Operating expenses increased $697,000 in the first quarter of 2010 to $7.4 million compared to $6.8 million in the first quarter of 2009, decreasing slightly as a percentage of revenue from 51.2% in 2009 to 51.0% in 2010.

Jon Thompson, Chief Executive Officer and President, commented, “Overall, it was a good quarter. I am especially pleased with the improvement in our gross profit margin. All three divisions achieved sales gains and were solidly profitable. Our goal as we move through the year is to continue our solid sales growth and keep our expenses under control.”

Shannon L. Greene, Chief Financial Officer, added, “This quarter makes our fifth consecutive quarter of higher earnings than in the prior year’s comparable quarter. We have maintained a good trend there as we have worked our way through the economic turmoil of this past year. While I don’t think profitability is in question for the year, we will continue to watch our operating expenses in order to maximize our earnings.”

Tandy Leather Factory, Inc., ( http://www.tandyleatherfactory.com), headquartered in Fort Worth, Texas, is a specialty retailer and wholesale distributor of a broad product line including leather, leatherworking tools, buckles and adornments for belts, leather dyes and finishes, saddle and tack hardware, and do-it-yourself kits. The Company distributes its products through its 29 Leather Factory stores, located in 19 states and 3 Canadian provinces, 76 Tandy Leather retail stores, located in 36 states and 6 Canadian provinces, one combination wholesale/retail store located in the United Kingdom, and Mid-Continent Leather Sales, one store located in Oklahoma. Its common stock trades on the NYSE Amex with the symbol "TLF". To be included on Tandy Leather Factory’s email distribution list, go to http://www.b2i.us/irpass.asp?BzID=1625&to=ea&s=0.

This news release may contain statements regarding future events, occurrences, circumstances, activities, performance, outcomes and results that are considered “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. Actual results and events may differ from those projected as a result of certain risks and uncertainties. These risks and uncertainties include but are not limited to: changes in general economic conditions, negative trends in general consumer-spending levels, failure to realize the anticipated benefits of opening retail stores; availability of hides and leathers and resultant price fluctuations; change in customer preferences for our product, and other factors disclosed in our filings with the Securities and Exchange Commission. These forward-looking statements are made only as of the date hereof, and except as required by law, we do not intend to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
     

 

TANDY LEATHER FACTORY, INC.

CONSOLIDATED BALANCE SHEETS
 
03/31/2010

(unaudited)
12/31/2009

(audited)
ASSETS
CURRENT ASSETS:
Cash $ 5,976,396 $ 7,891,962
Short-term investments, including certificates of deposit 6,995,598 5,017,000
Accounts receivable-trade, net of allowance for doubtful accounts of $174,000 and $136,000 in 2010 and 2009, respectively
1,459,075 1,202,811
Inventory 17,538,853 16,865,826
Deferred income taxes 289,556 271,481
Other current assets   1,499,080     791,884  

Total current assets
  33,758,558     32,040,964  
 
PROPERTY AND EQUIPMENT, at cost 14,513,146 15,111,497
Less accumulated depreciation and amortization   (4,953,970 )   (5,431,776 )
9,559,176 9,679,721
 
GOODWILL 987,812 983,823
OTHER INTANGIBLES, net of accumulated amortization of $433,000 and $418,000 in 2010 and 2009, respectively
293,401 307,802
OTHER assets   318,218     314,921  
$ 44,917,165   $ 43,327,231  
 
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable-trade $ 1,613,639 $ 1,185,032
Accrued expenses and other liabilities 4,116,620 3,988,144
Income taxes payable 434,827 399,536
Current maturities of long-term debt   202,500     202,500  
Total current liabilities   6,367,586     5,775,212  
 
DEFERRED INCOME TAXES 706,222 682,364
 
LONG-TERM DEBT, net of current maturities 3,459,375 3,510,000
 
COMMITMENTS AND CONTINGENCIES
 
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; 11,034,845 and 11,021,951 shares issued at 2010 and 2009; 10,141,222 and 10,130,628 shares outstanding at 2010 and 2009
 
26,484 26,453
Paid-in capital 5,491,705 5,491,736
Retained earnings 30,908,023 29,959,910
Treasury stock (893,623 shares at cost) (2,461,068 ) (2,452,649 )
Accumulated other comprehensive income   418,838     334,205  
Total stockholders' equity   34,383,982     33,359,655  
$ 44,917,165   $ 43,327,231  
 
     

TANDY LEATHER FACTORY, INC.

CONSOLIDATED STATEMENTS OF INCOME

(UNAUDITED)

FOR THE THREE MONTHS ENDED MARCH 31, 2010 and 2009
 
  2010     2009  
NET SALES $ 14,588,538 $ 13,183,095
COST OF SALES   5,611,942     5,442,649  
Gross profit 8,976,596 7,740,446
 
OPERATING EXPENSES   7,440,228     6,742,915  
INCOME FROM OPERATIONS 1,536,368 997,531
 
OTHER (INCOME) EXPENSE:
Interest expense 65,604 77,409
Other, net   (1,467 )   (77,272 )
Total other (income) expense   64,137     137  
 
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES 1,472,231 997,394
 
PROVISION FOR INCOME TAXES   524,654     324,336  
 
NET INCOME FROM CONTINUING OPERATIONS 947,577 673,058
 
INCOME FROM DISCONTINUED OPERATIONS, NET OF TAX   536     24,859  
 
NET INCOME $ 948,113   $ 697,917  
 
NET INCOME FROM CONTINUING OPERATIONS PER COMMON SHARE:
BASIC $ 0.09 $ 0.06
DILUTED $ 0.09 $ 0.06
 
INCOME FROM DISCONTINUED OPERATIONS, NET OF TAX PER COMMON SHARE:
BASIC $ 0.00 $ 0.00
DILUTED $ 0.00 $ 0.00
 
NET INCOME PER COMMON SHARE:
BASIC $ 0.09 $ 0.06
DILUTED $ 0.09 $ 0.06
 
Weighted Average Number of Shares Outstanding:
Basic 10,137,715 10,670,111
Diluted 10,213,677 10,721,954
 
     

TANDY LEATHER FACTORY, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

FOR THE THREE MONTHS ENDED MARCH 31, 2010 AND 2009
 
  2010     2009  
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 948,113 $ 697,917
Income from discontinued operations   536     24,859  
947,577 673,058
 
Adjustments to reconcile net income to net cash provided by operating activites-
Depreciation and amortization 234,026 279,290
(Gain) loss on disposal or abandonment of assets 246 -
Non-cash stock-based compensation - 2,540
Deferred income taxes 5,113 40,555
Other 80,343 (70,127 )
Net changes in assets and liabilities, net of effect of business acquisitions:
Accounts receivable-trade, net (262,172 ) (344,850 )
Inventory (513,681 ) 388,805
Income taxes 35,575 (382,586 )
Other current assets (707,195 ) (672,852 )
Accounts payable-trade 428,607 1,188,804
Accrued expenses and other liabilities   (30,870 )   30,609  
Total adjustments   (730,008 )   460,188  
Net cash provided by continuing operating activities 217,569 1,133,246
Cash provided from discontinued operations   6,831     35,540  
Net cash provided by operating activities   224,400     1,168,786  
 
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment (99,117 ) (278,224 )
Purchases of certificates of deposit (2,572,598 ) (4,048,000 )
Proceeds from maturities of certificates of deposit 594,000 1,081,000
Proceeds from sale of assets 90 -
Decrease (increase) in other assets   (3,297 )   1,198  
Net cash used in investing activities   (2,080,922 )   (3,244,026 )
 
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on capital lease obligations - (64,880 )
Payments on notes payable and long-term debt (50,625 ) (50,625 )
Repurchase of common stock ( treasury stock) (8,419 ) -
Proceeds from exercise of stock options   -     23,437  
Net cash provided by financing activities   (59,044 )   (92,068 )
 
NET INCREASE (DECREASE) IN CASH (1,915,566 ) (2,167,308 )
 
CASH, beginning of period   7,891,962     7,810,298  
 
CASH, end of period $ 5,976,396   $ 5,642,990  
 
 
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Interest paid during the period $ 65,604 $ 77,409
Income tax paid during the period, net of (refunds) 477,177 369,180
 
     

Selected financial data:
 
Quarter Ended 03/31/10   Quarter Ended 03/31/09

Sales
    Operating

Income

Sales
    Operating

Income
Wholesale Leathercraft $ 6,587,804 $ 534,196 $ 6,286,701 $ 366,247
Retail Leathercraft 7,616,296 922,738 6,603,522 550,168
International   384,438   79,434   292,872   81,116
Total Operations $ 14,588,538 $ 1,536,368 $ 13,183,095 $ 997,531
 
 
Wholesale Leathercraft Quarter Ended 03/31/10 Quarter Ended 03/31/09
# of stores Sales # of stores Sales
Distribution centers 30 $ 5,783,176 30 $ 5,414,997
National account group   804,628   871,704
Total Sales – Wholesale Leathercraft 30 $ 6,587,804 30 $ 6,286,701
 
 
Retail Leathercraft Quarter Ended 03/31/10 Quarter Ended 03/31/09
# of stores Sales # of stores Sales
Same store sales 74 $ 7,527,635 74 $ 6,603,522
New store sales 2   88,661 -   -
Total Sales – Retail Leathercraft 76 $ 7,616,296 74 $ 6,603,522
 

Copyright Business Wire 2010

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