| FORT WORTH, Texas, Oct 27, 2003 (BUSINESS WIRE) -- The Leather Factory, Inc. (AMEX:TLF) today reported financial results for the third quarter of 2003. Net income for the quarter ended September 30, 2003 was $602,000 compared to net income of $534,000 for the third quarter of 2002, up 12.6%. Fully-diluted earnings per share for the quarter increased $0.01 to $0.06, versus $0.05 in the third quarter of last year. Total sales for the third quarter increased 6.7% to $10.1 million from $9.5 million for the same quarter last year.
Sales for the nine months ended September 30, 2003 were $31.1 million, an increase of 4.7% from sales of $29.7 million in the first three quarters of 2002. Net income for the first nine months of 2003 was $2.2 million or $0.20 per fully-diluted share versus a loss of $1.9 million or $0.18 per fully-diluted shares in last year's comparable period. Last year's results included a $4.0 million charge, net of tax, for the cumulative effect of a previously reported accounting change. Net income for the first three quarters of 2002 before the cumulative effect of the accounting change was $2.1 million or $0.19 per fully-diluted share.
Third quarter sales for the Leather Factory warehouse distribution centers increased $128,000 or 1.8% over the same quarter last year. Leather Factory's year-to-date sales are up $606,000 or 2.7% over the first nine months of 2002.
This sales growth is in line with the company's guidance of 2-4% growth annually.
Tandy Leather sales increased $606,000 in the third quarter or 35.1% above last year's third quarter. Tandy Leather operations consist of 26 retail stores as of September 30, 2003 (four of which opened this quarter) producing sales of $2.3 million for the current quarter compared to ten retail stores a year ago, that produced sales of $1.1 million in last year's third quarter. Tandy's sales for the year are up $892,000 or 16.5% over the same period last year with the stores producing $6.3 million in the current year versus $1.8 million last year. Tandy's centralized mail order center, which was closed on September 1, 2002, produced sales of $606,000 in the third quarter of 2002 and $3.6 million for the nine months ended September 30, 2002 and will no longer be in subsequent quarter-to-quarter comparisons.
Roberts, Cushman's third quarter sales decreased $99,000 or 19.4% over the same period a year ago and are down $98,000, or 6.4% for the year.
Consolidated gross profit margins for the quarter increased 1.6 percentage points, or $501,000, to 55.2% while operating expenses rose $426,000. Costs associated with the new Tandy store openings (rents, utilities, personnel, etc.), and marketing and advertising costs account for the majority of the increase. For the nine months ended September 30, 2003, consolidated gross profit margins increased 1.0 percentage point, or $1.1 million, to 54.4% while operating expenses are up $1.1 million for the year over the same period a year ago.
Wray Thompson, Chairman and Chief Executive Officer, commented, "Despite the costs of opening four new Tandy stores during the period, results for the third quarter were in line with our expectations. All four new stores began producing profits in September and we are continuing with our plan to open several stores in the first quarter of 2004. Leather Factory's sales to the wholesale/dealer customers picked up in the third quarter, after some new marketing programs we put in place late in the second quarter. I'd like to have seen more improvement in our operating efficiencies, although we are making some progress in our efforts to consolidate expenses and increase operating margins. That will continue to be a priority in the coming quarters."
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.
Selected financial data:
For the three months ended
Net Sales: 09/30/03 09/30/02
--------------------------
Leather Factory $7,372,159 $7,244,610
Tandy Leather 2,334,127 1,727,925
Cushman 412,784 512,195
--------------------------
Total $10,119,070 $9,484,730
==========================
For the nine months ended
Net Sales: 09/30/03 09/30/02
--------------------------
Leather Factory $23,375,158 $22,769,550
Tandy Leather 6,312,145 5,420,108
Cushman 1,452,527 1,551,059
--------------------------
Total $31,139,830 $29,740,717
==========================
For the three months ended
Tandy Leather sales detail 09/30/03 09/30/02
--------------------------
Same stores (10 stores) $1,133,337 $1,121,736
New stores (16 stores) 1,198,246 -
Ceased operations (centralized mail
order facility) 2,544 606,189
--------------------------
Total $2,334,127 $1,727,925
==========================
For the nine months ended
Tandy Leather sales detail 09/30/03 09/30/02
--------------------------
Same stores (2 stores) $892,149 $740,227
New stores (24 stores) 5,415,064 1,074,199
Ceased operations (centralized mail
order facility) 4,932 3,605,682
--------------------------
Total $6,312,145 $5,420,108
==========================
Balance Balance
09/30/03 12/31/02
--------------------------
Inventory $11,621,127 $12,695,344
Total assets 19,007,207 19,675,602
Notes payable - current and long-term 2,671,929 4,221,224
Total stockholders' equity 13,703,393 11,170,062
THE LEATHER FACTORY, INC.
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2003 AND 2002
Three Months Nine months
2003 2002 2003 2002
----------------------- ------------------------
NET SALES $10,119,070 $9,484,730 $31,139,830 $29,740,717
COST OF SALES 4,529,258 4,396,332 14,183,460 13,848,098
----------------------- ------------------------
Gross Profit 5,589,812 5,088,398 16,956,370 15,892,619
OPERATING EXPENSES 4,672,820 4,246,873 13,769,241 12,646,486
----------------------- ------------------------
INCOME FROM OPERATIONS 916,992 841,525 3,187,129 3,246,133
OTHER EXPENSE:
Interest expense 40,735 54,108 174,555 191,419
Other, net 6,089 18,578 (68,433) 45,199
----------------------- ------------------------
Total other expense 46,824 72,686 106,122 236,618
----------------------- ------------------------
INCOME BEFORE INCOME
TAXES AND CUMULATIVE
EFFECT OF CHANGE IN
ACCOUNTING PRINCIPLE 870,168 768,839 3,081,007 3,009,515
PROVISION FOR INCOME
TAXES 268,488 234,747 926,105 924,071
----------------------- ------------------------
NET INCOME BEFORE
CUMULATIVE EFFECT OF
CHANGE IN ACCOUNTING
PRINCIPLE 601,680 534,092 2,154,902 2,085,444
CUMULATIVE EFFECT OF
CHANGE IN ACCOUNTING
PRINCIPLE, NET OF
INCOME TAXES - - - (4,008,831)
----------------------- ------------------------
NET INCOME (LOSS) $601,680 $534,092 $2,154,902 $(1,923,387)
======================= ========================
NET INCOME (LOSS) PER COMMON SHARE - BASIC:
INCOME BEFORE
CUMULATIVE EFFECT OF
CHANGE IN ACCTG
PRINCIPLE $ 0.06 $ 0.05 $ 0.21 $ 0.21
CUMULATIVE EFFECT OF
CHANGE IN ACCTG
PRINCIPLE, NET OF TAX - - - (0.40)
----------------------- ------------------------
NET INCOME (LOSS) PER
COMMON SHARE $ 0.06 $ 0.05 $ 0.21 $ (0.19)
======================= ========================
NET INCOME (LOSS) PER COMMON SHARE-DILUTED:
INCOME BEFORE
CUMULATIVE EFFECT OF
CHANGE IN ACCTG
PRINCIPLE $ 0.06 $ 0.05 $ 0.20 $ 0.19
CUMULATIVE EFFECT OF
CHANGE IN ACCTG
PRINCIPLE, NET OF TAX - - - (0.37)
----------------------- ------------------------
NET INCOME (LOSS) PER
COMMON SHARE $ 0.06 $ 0.05 $ 0.20 $ (0.18)
======================= ========================
WEIGHTED AVG NUMBER OF
SHARES OUTSTANDING:
Basic 10,394,374 10,064,249 10,269,415 10,035,890
Diluted 10,902,794 10,723,403 10,840,764 10,759,677
SOURCE: The Leather Factory, Inc.
The Leather Factory, Inc., Fort Worth Wray Thompson, 817-496-4414 or Shannon L. Greene, sgreene@leatherfactory.com
"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.
|
