FORT WORTH, Texas, Oct 23, 2002 (BUSINESS WIRE) -- The Leather Factory, Inc. (AMEX:TLF) today reported results for the third quarter of 2002.
Net income for the quarter ended Sept. 30, 2002 was $534,092 or $0.05 per share, compared to net income of $396,528 or $0.04 per share for the third quarter of 2001. Net sales during the third quarter were $9,484,730 -- a 3% increase over sales of $9,198,401 for the same quarter last year. The new Tandy Leather retail stores accounted for the increase, while same store sales held steady.
For the nine months ended Sept. 30, 2002, sales increased 6.5% to $29,740,717 from $27,930,907 in sales for the first nine months of 2001. Same store sales contributed 51% of the increase, while new store sales contributed 49%.
As a result of the new accounting pronouncement (SFAS No. 142) adopted by the Company in January 2002, the goodwill on the balance sheet of a subsidiary was written off in the first quarter of 2002. The write-off results in a year-to-date loss of ($1,923,387) or ($0.18) per share (diluted), compared to net income of $1,515,722 or $0.15 per share for the year ended Sept. 30, 2001. Nine-month net income before giving effect to the accounting change was $2,085,444 or $0.19 per share (diluted) for 2002.
Wray Thompson, Chairman and Chief Executive Officer, commented, "When comparing this quarter's results to that of the third quarter of 2001, we've got good reason to be pleased. The significant increases in gross profit margin for the third quarter and the first nine months of 2002 are encouraging even though the sales this quarter didn't come in as strongly as we had hoped. Costs associated with the opening of the new Tandy stores and the major renovation of our Fort Worth flagship store and central warehouse are increasing our operating expenses slightly. However, we believe that both projects are crucial to our continued growth and operating efficiency."
Mr. Thompson added, "We believe that the West Coast dock strike will have some effect on the last quarter of 2002, although the impact on us may be limited. We are closely monitoring the situation."
The Leather Factory, Inc., (http://www.leatherfactory.com), headquartered in Fort Worth, Texas, is an international marketer and wholesale 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 kits, and is a manufacturer and distributor of fancy hat trims, leather lacing and kits. The Company distributes its products through sales and distribution units located throughout the U.S. and Canada and through its subsidiary, Tandy Leather Company, via 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 mat not be predictive of future results.
CONTACT: The Leather Factory, Inc., Fort Worth Wray Thompson, 817/496-4414 or Shannon L. Greene, sgreene@leatherfactory.com
Copyright (C) 2002 Business Wire. All rights reserved.
THE LEATHER FACTORY, INC.
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2002 AND 2001
Three Months Nine months
2002 2001 2002 2001
---------- ---------- ----------- ------------
NET SALES $9,484,730 $9,198,401 $29,740,717 $27,930,907
COST OF SALES 4,396,332 4,586,827 13,848,098 13,456,322
---------- ---------- ----------- ------------
Gross Profit 5,088,398 4,611,574 15,892,619 14,474,585
OPERATING EXPENSES 4,246,873 3,823,038 12,646,486 11,533,970
---------- ---------- ----------- ------------
INCOME FROM OPERATIONS 841,525 788,536 3,246,133 2,940,615
OTHER EXPENSE:
Interest expense 54,108 102,235 191,419 375,442
Other, net 18,578 20,317 45,199 31,959
---------- ---------- ----------- ------------
Total other expense 72,686 122,552 236,618 407,401
---------- ---------- ----------- ------------
INCOME BEFORE INCOME
TAXES AND CUMULATIVE
EFFECT OF CHANGE IN
ACCOUNTING PRINCIPLE 768,839 665,984 3,009,515 2,533,214
PROVISION FOR INCOME
TAXES 234,747 269,456 924,071 1,017,492
---------- ---------- ----------- ------------
NET INCOME BEFORE
CUMULATIVE EFFECT OF
CHANGE IN ACCOUNTING
PRINCIPLE 534,092 396,528 2,085,444 1,515,722
CUMULATIVE EFFECT OF
CHANGE IN ACCOUNTING
PRINCIPLE, NET OF
INCOME TAXES -- -- (4,008,831) --
---------- ---------- ----------- ------------
NET INCOME (LOSS) $534,092 $396,528 $(1,923,387) $1,515,722
========== ========== =========== ============
NET INCOME (LOSS) PER
COMMON SHARE - BASIC:
INCOME BEFORE CUMULATIVE
EFFECT OF CHANGE IN
ACCTG PRINCIPLE $0.05 $0.04 $0.21 $0.15
CUMULATIVE EFFECT OF
CHANGE IN ACCTG
PRINCIPLE, NET OF TAX -- -- (0.40) --
---------- ---------- ----------- ------------
NET INCOME (LOSS) PER
COMMON SHARE $0.05 $0.04 $(0.19) $0.15
========== ========== =========== ============
NET INCOME (LOSS) PER
COMMON SHARE - ASSUMING
DILUTION:
INCOME BEFORE CUMULATIVE
EFFECT OF CHANGE IN
ACCTG PRINCIPLE $0.05 $0.04 $0.19 $0.15
CUMULATIVE EFFECT OF
CHANGE IN ACCTG
PRINCIPLE, NET OF TAX -- -- (0.37) --
---------- ---------- ----------- ------------
NET INCOME (LOSS) PER
COMMON SHARE $0.05 $0.04 $(0.18) $0.15
========== ========== =========== ============
"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.
