FORT WORTH, Texas--(BUSINESS WIRE)--July 22, 2003--The Leather Factory, Inc. (AMEX:TLF) today reported financial results for the second quarter of 2003. Net income for the quarter ended June 30, 2003 was $779,000 compared to net income of $792,000 per share for the second quarter of 2002. Diluted earnings per share for the quarter were $0.07, the same as in the second quarter of last year. Total sales for the quarter ended June 30, 2003 increased 4% to $10.5 million from $10.0 million for the same quarter last year. Same store sales were up 2% for the quarter.
Sales for the six months ended June 30, 2003 were $21.0 million, an increase of 4% over 2002 first half sales of $20.2 million. Comparable store sales growth for the six months ended June 30, 2003 was 3%. Net income for the first half of 2003 was $1.6 million or $0.14 per fully-diluted share versus a loss of $2.5 million or $0.23 per fully-diluted shares in the prior comparable period. Last year's results included a charge for the cumulative effect of an accounting change of $4.0 million, net of tax, for the adoption of SFAS No. 142, Goodwill and other Intangible Assets. Income before the cumulative effect of the accounting change was $1.6 million or $0.14 per fully-diluted share for the six months ended June 30, 2002.
Second quarter sales for the Leather Factory stores increased $101,000 or 1.3% over the same quarter last year. The 29 comparable stores' sales were off $31,000 or 0.4% while the one new store contributed $132,000 to account for the modest gain. Leather Factory's year-to-date sales are up $600,000 or 4.0% over the first six months of 2002. The 29 comparable stores sales rose $361,000 or 2.4% and the one new store's sales contributed $248,000.
Tandy Leather sales increased $300,000 in the second quarter or 16.5% above last year's comparable quarter. Tandy Leather operations consist of 22 retail stores as of June 30, 2003 compared to six retail stores and one central mail order center a year ago. The mail order center ceased operations in the third quarter of 2002. Comparable stores' sales (4 stores) were up $178,000 or 38.7% for the quarter. The 18 new stores contributed sales of $1.4 million this quarter versus the mail order center's sales of $1.3 million in the second quarter of 2002. Tandy's sales for the year are up $154,000 or 4.0% over the same period last year. The one comparable store's sales are up $86,000 or 26.9%. The 21 new stores have contributed $3.1 million for the year against the mail order center's sales of $3.0 million last year.
Roberts, Cushman's second quarter sales increased $8,000 or 1.5% over the same period a year ago and are up 0.08% for the year.
Consolidated operating expenses rose $342,000 in the current quarter and $697,000 for the year over the same periods a year ago. Costs associated with the new Tandy store openings (rents, utilities, etc.), marketing and advertising costs, and boosted efforts in the investor relations area account for the majority of the increase.
Wray Thompson, Chairman and Chief Executive Officer, commented, "We're generally pleased with our second quarter results. The Tandy stores continue to perform well and we expect to open four more stores before the end of the year. Our wholesale business at the Leather Factory stores has slowed slightly as our small business customers are struggling. The sluggish economy seems to be negatively impacting them. However, we've implemented some new merchandising initiatives that we believe will strengthen sales in the last half of the year. We're continuing to work diligently on cost containment measures in all operating segments in order to strengthen our bottom line."
The Leather Factory, Inc., (http://www.leatherfactory.com), headquartered in Fort Worth, Texas, is a marketer and distributor of a broad product line including leather, leatherworking tools, buckles and adornments for belts, leather dyes and finishes, shoe repair supplies, saddle and tack hardware, and do-it-yourself leathercraft kits. The Company distributes its products worldwide though its Leather Factory stores, Tandy Leather retail stores and mail/telephone/website orders (http://www.tandyleather.com). Its common stock trades on the American Stock Exchange with the symbol "TLF".
This news release may contain forward-looking statements. All forward-looking statements made here or in other news releases issued by The Leather Factory, Inc. are based on current expectations as of the date of the release. These forward-looking statements involve risks and uncertainties that could cause the results of The Leather Factory, Inc. to differ materially from management's current expectations. Many of these risks and uncertainties are detailed from time to time in TLF's reports filed with the Securities and Exchange Commission, including its most recent annual report on Form 10-K and the most recent quarterly report on Form 10-Q. Investors are reminded that past performance may not be predictive of future results.
THE LEATHER FACTORY, INC.
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2003 AND 2002
Three Months Six months
2003 2002 2003 2002
------------------------ ------------------------
NET SALES $10,460,675 $10,052,036 $21,020,760 $20,255,987
COST OF SALES 4,739,621 4,616,410 9,654,202 9,451,766
------------------------ ------------------------
Gross Profit 5,721,054 5,435,626 11,366,558 10,804,221
OPERATING EXPENSES 4,566,590 4,224,477 9,096,422 8,399,613
------------------------ ------------------------
INCOME FROM
OPERATIONS 1,154,464 1,211,149 2,270,136 2,404,608
OTHER EXPENSE:
Interest expense 70,468 47,442 133,820 137,311
Other, net (43,705) 10,266 (74.523) 26,621
------------------------ ------------------------
Total other expense 26,763 57,708 59,297 163,932
------------------------ ------------------------
INCOME BEFORE INCOME
TAXES AND CUMULATIVE
EFFECT OF CHANGE IN
ACCOUNTING PRINCIPLE 1,127,701 1,153,441 2,210,839 2,240,676
PROVISION FOR INCOME
TAXES 348,997 361,394 657,617 689,324
------------------------ ------------------------
NET INCOME BEFORE
CUMULATIVE EFFECT OF
CHANGE IN ACCOUNTING
PRINCIPLE 778,704 792,047 1,553,222 1,551,352
CUMULATIVE EFFECT OF
CHANGE IN ACCOUNTING
PRINCIPLE, NET OF
INCOME TAXES - - - (4,008,831)
------------------------ ------------------------
NET INCOME (LOSS) $ 778,704 $ 792,047 $ 1,553,222 $(2,457,479)
======================== ========================
NET INCOME (LOSS) PER
COMMON SHARE - BASIC:
INCOME BEFORE
CUMULATIVE EFFECT
OF CHANGE IN ACCTG
PRINCIPLE $ 0.08 $ 0.08 $ 0.15 $ 0.15
CUMULATIVE EFFECT
OF CHANGE IN ACCTG
PRINCIPLE, NET OF
TAX - - - (0.40)
------------------------ ------------------------
NET INCOME (LOSS)
PER COMMON SHARE $ 0.08 $ 0.08 $ 0.15 $ (0.25)
======================== ========================
NET INCOME (LOSS) PER
COMMON SHARE -
DILUTED:
INCOME BEFORE
CUMULATIVE EFFECT
OF CHANGE IN ACCTG
PRINCIPLE $ 0.07 $ 0.07 $ 0.14 $ 0.14
CUMULATIVE EFFECT
OF CHANGE IN ACCTG
PRINCIPLE, NET OF
TAX - - - (0.37)
------------------------ ------------------------
NET INCOME (LOSS)
PER COMMON SHARE $ 0.07 $ 0.07 $ 0.14 $ (0.23)
======================== ========================
CONTACT: The Leather Factory, Inc., Fort Worth Wray Thompson, 817-496-4414 Shannon L. Greene, sgreene@leatherfactory.com SOURCE: The Leather Factory, Inc.
"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: Statements in this press release regarding Tandy Leather Factory, Inc.'s business which are not historical facts are "forward-looking statements" that involve risks and uncertainties. For a discussion of such risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see "Risk Factors" in the Company's Annual Report or Form 10-K for the most recently ended fiscal year
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