Tandy Leather Factory, Inc. (AMEX: TLF) today reported financial results
for the first quarter of 2009. Net income for the quarter ended March
31, 2009 was $697,917, up from net income of $584,000 in the first
quarter of 2008. Fully-diluted earnings per share for the quarter were
$0.06 in the current quarter, compared to $0.05 in last year's first
quarter. Total sales for the first quarter were $13.3 million, matching
that of the first quarter of last year.
Sales from the Retail Leathercraft division, consisting of the Tandy
Leather retail store chain, increased $333,000 in the first quarter, up
5% from last year's first quarter sales. The store chain consisted of
seventy-four stores as of March 31, 2009, compared to seventy-two retail
stores a year ago. First quarter sales for the Wholesale Leathercraft
division, consisting of the Leather Factory wholesale centers and the
National Account group, decreased $451,000, or 7% from the same quarter
last year. International Leathercraft, consisting of one store located
in the United Kingdom, added sales of $293,000 for the quarter. The UK
store was opened in February 2008.
Consolidated gross profit margins increased slightly from 58.4% in the
first quarter of 2008 to 58.5% in the first quarter of 2009. Operating
expenses decreased from $7.0 million in the first quarter of 2008 to
$6.8 million in the first quarter of 2009, decreasing as a percentage of
revenue from 52.9% in 2008 to 50.7% in 2009.
Ron Morgan, Chief Executive Officer, commented, "We are fairly pleased
with our first quarter results, particularly the reduction in operating
expenses we achieved. That is what it is going to take to be successful
in the current business environment. We will continue to trim costs
where we can as it remains very difficult to predict sales. I am
especially pleased with the performance of our UK store as it is
generating an operating profit after only a year in existence."
Shannon L. Greene, Chief Financial Officer, added, "Our total cash
continues to increase, up another $800,000 this quarter to $11.6
million. All divisions were profitable for the quarter, which indicates
that we have been successful in making the necessary adjustments in our
operating expenses in response to the weak sales trend. In three of the
last four quarters, our earnings have been higher than in the prior
year's comparable quarters. As a result, we are confident in our ability
to maintain profitability even in this tough economy."
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, 74 Tandy Leather retail stores,
located in 35 states and 5 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 American Stock Exchange 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 | | | | |
| | | 03/31/2009 (unaudited) | | 12/31/2008 (audited) | ASSETS | | | | |
CURRENT ASSETS:
| | | | |
Cash
| |
$
|
5,642,990
| | |
$
|
7,810,298
| |
Short-term investments, including certificates of deposit
| | |
5,978,000
| | | |
3,011,000
| |
Accounts receivable-trade, net of allowance for doubtful accounts
| | | | |
of $28,000 and $43,000 in 2009 and 2008, respectively
| | |
1,537,619
| | | |
1,180,349
| |
Inventory
| | |
15,614,369
| | | |
16,011,147
| |
Prepaid income taxes
| | |
92,113
| | | |
-
| |
Deferred income taxes
| | |
218,531
| | | |
229,501
| |
Other current assets
| |
|
1,450,402
|
| |
|
777,550
|
|
Total current assets
| |
|
30,534,024
|
| |
|
29,019,845
|
| | | | |
|
PROPERTY AND EQUIPMENT, at cost
| | |
15,604,842
| | | |
15,340,732
| |
Less accumulated depreciation and amortization
| |
|
(5,276,551
|
)
| |
|
(5,019,885
|
)
| | | |
10,328,291
| | | |
10,320,847
| | | | | |
|
GOODWILL
| | |
962,667
| | | |
966,655
| |
OTHER INTANGIBLES, net of accumulated amortization of
| | | | |
$379,000 and $367,000 in 2009 and 2008, respectively
| | |
341,832
| | | |
355,492
| |
OTHER assets
| |
|
311,876
|
| |
|
313,074
|
| | | $ | 42,478,690 |
| | $ | 40,975,913 |
| | | | |
| LIABILITIES AND STOCKHOLDERS' EQUITY | | | | |
CURRENT LIABILITIES:
| | | | |
Accounts payable-trade
| |
$
|
2,337,381
| | |
$
|
1,148,577
| |
Accrued expenses and other liabilities
| | |
3,208,189
| | | |
3,182,194
| |
Income taxes payable
| | |
-
| | | |
271,122
| |
Current maturities of capital lease obligations
| | |
268,883
| | | |
265,111
| |
Current maturities of long-term debt and capital lease obligations
| |
|
202,500
|
| |
|
202,500
|
|
Total current liabilities
| |
|
6,016,953
|
| |
|
5,069,504
|
| | | | |
|
DEFERRED INCOME TAXES
| | |
630,076
| | | |
600,309
| | | | | |
|
LONG-TERM DEBT, net of current maturities
| | |
3,661,875
| | | |
3,712,500
| |
CAPITAL LEASE OBLIGATION, net of current maturities
| | |
260,186
| | | |
328,838
| | | | | |
|
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;
| | | | |
11,019,951 and 10,994,951 shares issued at 2009 and 2008;
| | | | |
10,689,555 and 10,664,555 shares outstanding at 2009 and 2008
| | |
26,448
| | | |
26,388
| |
Paid-in capital
| | |
5,490,360
| | | |
5,464,443
| |
Retained earnings
| | |
27,339,770
| | | |
26,641,853
| |
Treasury stock (330,396 shares at cost)
| | |
(828,385
|
)
| | |
(828,385
|
)
|
Accumulated other comprehensive income
| |
|
(118,593
|
)
| |
|
(39,537
|
)
|
Total stockholders' equity
| |
|
31,909,600
|
| |
|
31,264,762
|
| | | $ | 42,478,690 |
| | $ | 40,975,913 |
|
|
| |
| | TANDY LEATHER FACTORY, INC. | CONSOLIDATED STATEMENTS OF INCOME | (UNAUDITED) | FOR THE THREE MONTHS ENDED MARCH 31, 2009 and 2008 | | | | |
| | | 2009 | | 2008 | NET SALES | |
$
|
13,360,990
| | |
$
|
13,260,160
| |
COST OF SALES
| |
|
5,544,544
|
| |
|
5,519,138
|
|
Gross profit
| | |
7,816,446
| | | |
7,741,022
| | | | | |
|
OPERATING EXPENSES
| |
|
6,779,137
|
| |
|
7,019,638
|
|
INCOME FROM OPERATIONS
| | |
1,037,309
| | | |
721,384
| | | | | |
|
OTHER (INCOME) EXPENSE:
| | | | |
Interest expense
| | |
77,409
| | | |
81,741
| |
Other, net
| |
|
(77,272
|
)
| |
|
(280,390
|
)
|
Total other (income) expense
| |
|
137
|
| |
|
(198,649
|
)
| | | | |
|
INCOME BEFORE INCOME TAXES
| | |
1,037,172
| | | |
920,033
| | | | | |
|
PROVISION FOR INCOME TAXES
| |
|
339,255
|
| |
|
335,535
|
| | | | |
|
NET INCOME
| |
$
|
697,917
|
| |
$
|
584,498
|
| | | | |
| | | | |
|
NET INCOME PER COMMON SHARE – BASIC
| |
$
|
0.06
|
| |
$
|
0.05
|
| | | | |
|
NET INCOME PER COMMON SHARE – DILUTED
| |
$
|
0.06
|
| |
$
|
0.05
|
| | | | |
|
Weighted Average Number of Shares Outstanding:
| | | | |
Basic
| | |
10,670,111
| | | |
10,977,092
| |
Diluted
| | |
10,721,954
| | | |
11,067,863
| |
|
| |
| | Selected financial data: | | | | | | | | |
| | | Quarter Ended 03/31/09 | | Quarter Ended 03/31/08 | | | Sales |
| Operating Income | | Sales |
| Operating Income |
Wholesale Leathercraft
| |
$
|
6,286,702
| |
$
|
366,247
| |
$
|
6,738,210
| |
$
|
123,955
| |
Retail Leathercraft
| | |
6,603,522
| | |
550,168
| | |
6,270,774
| | |
614,451
| |
International
| | |
292,872
| | |
81,116
| | |
41,738
| | |
(41,461
|
)
|
Other
| |
|
177,894
| |
|
39,778
| |
|
209,438
| |
|
24,439
|
|
Total Operations
| |
$
|
13,360,990
| |
$
|
1,037,309
| |
$
|
13,260,160
| |
$
|
721,384
|
|
|
| |
| | Wholesale Leathercraft | | Quarter Ended 03/31/09 | | Quarter Ended 03/31/08 | | | # of stores |
| Sales | | # of stores |
| Sales |
Distribution centers
| |
30
| |
$
|
5,414,997
| |
30
| |
$
|
5,991,951
|
National account group
| | | |
|
871,705
| | | |
|
746,259
| Total Sales – Wholesale Leathercraft | | | |
$
|
6,286,702
| | | |
$
|
6,738,210
| | | | |
| Retail Leathercraft | | Quarter Ended 03/31/09 | | Quarter Ended 03/31/08 | | | # of stores | | Sales | | # of stores | | Sales |
Same store sales
| |
72
| |
$
|
6,468,173
| |
72
| |
$
|
6,270,774
|
New store sales
| |
2
| |
|
135,349
| |
-
| |
|
-
| Total Sales – Retail Leathercraft
| | | |
$
|
6,603,522
| | | |
$
|
6,270,774
|
|
| |
| | TANDY LEATHER FACTORY, INC. | CONSOLIDATED STATEMENTS OF CASH FLOWS | (UNAUDITED) | FOR THE THREE MONTHS ENDED MARCH 31, 2009 AND 2008 | | | | |
| | | 2009 | | 2008 |
CASH FLOWS FROM OPERATING ACTIVITIES:
| | | | |
Net income
| |
$
|
697,917
| | |
$
|
584,498
| |
Adjustments to reconcile net income to net cash
| | | | |
provided by operating activities -
| | | | |
Depreciation and amortization
| | |
279,499
| | | |
225,424
| |
Gain on disposal of assets
| | |
-
| | | |
(12,109
|
)
|
Non-cash stock-based compensation
| | |
2,540
| | | |
7,625
| |
Deferred income taxes
| | |
40,737
| | | |
150,368
| |
Other
| | |
(70,127
|
)
| | |
(46,598
|
)
|
Net changes in assets and liabilities, net of effect of business
acquisitions:
| | | | |
Accounts receivable-trade, net
| | |
(357,270
|
)
| | |
494,697
| |
Inventory
| | |
396,778
| | | |
1,245,724
| |
Income taxes
| | |
(363,235
|
)
| | |
203,562
| |
Other current assets
| | |
(672,852
|
)
| | |
(143,935
|
)
|
Accounts payable-trade
| | |
1,188,804
| | | |
(11,781
|
)
|
Accrued expenses and other liabilities
| |
|
25,995
|
| |
|
574,776
|
|
Total adjustments
| |
|
470,869
|
| |
|
2,687,753
|
| Net cash provided by operating activities | |
| 1,168,786 |
| |
| 3,272,251 |
| | | | |
|
CASH FLOWS FROM INVESTING ACTIVITIES:
| | | | |
Purchase of property and equipment
| | |
(278,224
|
)
| | |
(2,136,246
|
)
|
Purchases of certificates of deposit
| | |
(4,048,000
|
)
| | |
-
| |
Proceeds from maturities of certificates of deposit
| | |
1,081,000
| | | |
-
| |
Decrease (increase) in other assets
| |
|
1,198
|
| |
|
690,560
|
| Net cash used in investing activities | |
| (3,244,026 | ) | |
| (1,445,686 | ) | | | | |
|
CASH FLOWS FROM FINANCING ACTIVITIES:
| | | | |
Payments on capital lease obligations
| | |
(64,880
|
)
| | |
(44,959
|
)
|
Payments on notes payable and long-term debt
| | |
(50,625
|
)
| | |
-
| |
Proceeds from exercise of stock options and warrants
| |
|
23,437
|
| |
|
18,329
|
| Net cash provided by financing activities | |
| (92,068 | ) | |
| (26,630 | ) | | | | |
|
NET INCREASE (DECREASE) IN CASH
| | |
(2,167,308
|
)
| | |
1,799,935
| | | | | |
|
CASH, beginning of period
| |
|
7,810,298
|
| |
|
6,310,396
|
| | | | |
|
CASH, end of period
| |
$
|
5,642,990
|
| |
$
|
8,110,331
|
| | | | |
| | | | |
|
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
| | | | |
Interest paid during the period
| |
$
|
77,409
| | |
$
|
81,741
| |
Income tax paid during the period, net of (refunds)
| | |
369,180
| | | |
60,210
| | | | | |
|
NON-CASH INVESTING ACTIVITIES:
| | | | |
Equipment acquired under capital lease financing arrangement
| |
$
|
-
| | |
$
|
803,713
| |
Tandy Leather Factory, Inc. Shannon L. Greene, 817-872-3200 sgreene@tandyleather.com or Magellan
Fin, LLC Mark Gilbert, 317-867-2839 MGilbert@MagellanFin.com |