Attached files
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| 8-K - FORM 8-K DATED 03/07/2011 - TANDY LEATHER FACTORY INC | form8-k.htm |
EXHIBIT 99.1
FOR IMMEDIATE RELEASE MARCH 7, 2011
TANDY LEATHER FACTORY REPORTS 41 CENTS EPS FOR 2010, UP 32% OVER 2009
PROVIDES SALES AND EARNINGS GUIDANCE FOR 2011
FORT WORTH, TEXAS – Tandy Leather Factory, Inc. (NASDAQ: TLF) today reported financial results for the fourth quarter and year ended December 31, 2010. A conference call will be conducted by Jon Thompson, CEO, Shannon Greene, CFO, and Mark Angus, Senior Vice President, at 2:00 p.m. Eastern Time today. Dial-in details have been provided previously.
Consolidated net income for the quarter was $1.6 million compared to consolidated net income of $1.3 million for the fourth quarter of 2009. Fully diluted earnings per share for the quarter were $0.15, compared to $0.13 for the same quarter of the previous year. Total sales for the quarter ended December 31, 2010 increased 11% to $17.3 million from $15.6 million for the fourth quarter of 2009. Consolidated sales for the year ended December 31, 2010 were $59.9 million, up 10% from 2009 sales of $54.5 million. Consolidated net income for 2010 was $4.2 million or $0.41 per fully-diluted share versus $3.3 million or $0.31 per fully-diluted share for 2009.
Sales in the Retail Leathercraft division for the fourth quarter of 2010 increased $1.4 million over the previous year's fourth quarter, representing a 16% improvement. Same stores sales increased 15% over the fourth quarter of 2009. Seventy-six Tandy Leather retail stores comprised Retail Leathercraft’s operations on December 31, 2010, compared to seventy-five retail stores a year earlier. For the year, Retail Leathercraft’s sales increased $4.2 million, or 15%, over 2009. Same store sales for the year increased 13% compared to 2009.
Fourth quarter sales for the Wholesale Leathercraft division increased $240,000 over the same quarter of 2009, a 3% improvement. Same store sales increased 7% while national account sales were down 13% for the quarter. Twenty-nine Leather Factory wholesale stores comprised Wholesale Leathercraft’s operations on December 31, 2010, compared to 30 wholesale stores a year earlier. One wholesale store operating as Mid-Continent Leather Sales was closed in the fourth quarter. For the year, Wholesale Leathercraft’s sales were up $813,000 million, or 3%. 2010 same store sales increased 6% while sales to national accounts were down 8%.
International Leathercraft’s fourth quarter sales increased $134,000 over the same quarter of 2009, a 37% improvement. For the year, International Leathercraft’s sales increased 30% to $1.7 million from $1.3 million in 2009. The International Leathercraft division consists of one store located in the UK which opened in February 2008.
Consolidated gross profit margin for the fourth quarter was 59.9%, a decline from 61.8% for the fourth quarter of 2009. For 2010, consolidated gross profit margin was 60.5%, improving from the previous year's gross profit margin of 59.9%. Consolidated operating expenses for the fourth quarter of 2010 were 45.0% of sales, increasing $240,000 or 3.2% over the same quarter of 2009. Operating expenses totaled 49.5% of sales for 2010, increasing $2.1 million, or 7.6% over 2009.
Jon Thompson, Chief Executive Officer, commented, "Our definition of a successful year is when our sales, gross profit margin, and operating margin are higher than the year before. 2010 was one of those years and we plan to build on that momentum as we begin the new year. In 2011, we plan to announce several international store openings, as well as improve the locations and performance of our existing store base in the US. We recognize the opportunities for additional stores domestically but are committed to strengthening the stores in our existing markets while the domestic economy remains somewhat shaky.”
Shannon Greene, Chief Financial Officer and Treasurer, added, “Like last year, our goal for 2010 was to increase sales and earnings over the prior year and we met that goal. We paid a one-time dividend during the year, which we believe was the best use of our cash. Expense control will continue to be a priority, in order to maximize earnings.”
Financial Outlook:
The following statements are based on TLF's current expectations as of March 3, 2011. These statements are forward-looking statements and should be read in conjunction with the cautionary information about these statements that appears below.
The Company expects to open 3-4 stores in 2011: 2-3 internationally and 1 domestically. Estimates consolidated net sales for 2011 will be in the range of $63 to $65 million. EPS for 2011 are expected to be in the range of $0.44 to $0.46. Average shares outstanding, both basic and diluted, in 2011 are estimated to be approximately 10.2 million. The Company assumes an effective tax rate for the year between 35% and 37%.
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, and one combination wholesale/retail store located in the United Kingdom. Its common stock trades on the Nasdaq 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.
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Contact:
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Shannon L. Greene, Tandy Leather Factory, Inc.
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(817) 872-3200 or sgreene@tandyleather.com
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Mark Gilbert, Magellan Fin, LLC
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(317) 867-2839 or MGilbert@MagellanFin.com
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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.
Selected financial data:
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Quarter Ended 12/31/10
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Quarter Ended 12/31/09
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||||||
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Sales
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Operating
Income
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Sales
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Operating
Income
|
||||
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Wholesale Leathercraft
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$7,059,163
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$1,022,344
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$6,819,116
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$789,573
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|||
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Retail Leathercraft
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9,756,022
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1,403,923
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8,405,937
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1,231,572
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|||
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International Leathercraft
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498,131
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152,808
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364,489
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54,988
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|||
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Total Operations
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$17,313,316
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$2,579,075
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$15,589,542
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$2,076,133
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|||
|
Year Ended 12/31/10
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Year Ended 12/31/09
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||||||
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Sales
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Operating
Income
|
Sales
|
Operating
Income
|
||||
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Wholesale Leathercraft
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$25,908,177
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$2,690,061
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$25,095,392
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$2,017,915
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|||
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Retail Leathercraft
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32,291,442
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3,614,856
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28,079,863
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2,900,701
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|||
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International Leathercraft
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1,693,251
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330,694
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1,307,484
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176,485
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|||
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Total Operations
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$59,892,870
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$6,635,611
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$54,482,739
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$5,095,101
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|||
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Wholesale Leathercraft
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Quarter Ended 12/31/10
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Quarter Ended 12/31/09
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|||
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# of stores
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Sales
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# of stores
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Sales
|
||
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Same store sales
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29
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$6,482,888
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29
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$6,056,595
|
|
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Closed store
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1
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2,074
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1
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98,774
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|
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National account group
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574,201
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663,747
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|||
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Total Sales – Wholesale Leathercraft
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30
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$7,059,163
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30
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$6,819,116
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|
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Wholesale Leathercraft
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Year Ended 12/31/10
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Year Ended 12/31/09
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|||
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# of stores
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Sales
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# of stores
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Sales
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||
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Same store sales
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29
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$22,753,444
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29
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$21,524,529
|
|
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Closed store
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1
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276,236
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1
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429,311
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|
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National account group
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2,878,497
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3,141,552
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|||
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Total Sales – Wholesale Leathercraft
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30
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$25,908,177
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30
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$25,095,392
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|
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Retail Leathercraft
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Quarter Ended 12/31/10
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Quarter Ended 12/31/09
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|||
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# of stores
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Sales
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# of stores
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Sales
|
||
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Same store sales
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75
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$9,670,493
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75
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$8,405,937
|
|
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New store sales
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1
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85,529
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-
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-
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|
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Total Sales – Retail Leathercraft
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76
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$9,756,022
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75
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$8,405,937
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|
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Retail Leathercraft
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Year Ended 12/31/10
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Year Ended 12/31/09
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|||
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# of stores
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Sales
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# of stores
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Sales
|
||
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Same store sales
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74
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$31,838,588
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74
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$27,964,358
|
|
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New store sales
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2
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452,854
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1
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115,505
|
|
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Total Sales – Retail Leathercraft
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76
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$32,291,442
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75
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$28,079,863
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TANDY LEATHER FACTORY, INC.
CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE AND TWELVE MONTHS ENDED DECEMBER 31, 2010 AND 2009
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Three Months
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Twelve Months
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||||||
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2010
(unaudited)
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2009
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2010
(unaudited)
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2009
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||||
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NET SALES
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$17,313,317
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$15,589,542
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$59,892,870
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$54,482,739
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|||
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COST OF SALES
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6,936,547
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5,955,804
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23,642,013
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21,873,365
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|||
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Gross Profit
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10,376,770
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9,633,738
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36,250,857
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32,609,374
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|||
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OPERATING EXPENSES
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7,797,694
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7,507,605
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29,615,246
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27,514,273
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|||
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INCOME FROM OPERATIONS
|
2,579,076
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2,126,133
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6,635,611
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5,095,101
|
|||
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Interest expense
|
66,621
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68,481
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265,405
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297,864
|
|||
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Other, net
|
55,555
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11,707
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(105,540)
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(164,165)
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|||
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Total other expense
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122,176
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80,188
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159,865
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133,699
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|||
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INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES
|
2,456,900
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2,045,945
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6,475,746
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4,961,402
|
|||
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PROVISION FOR INCOME TAXES
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899,742
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745,100
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2,317,255
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1,700,259
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|||
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NET INCOME FROM OPERATIONS
|
$1,557,158
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$1,300,845
|
$4,158,491
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$3,261,143
|
|||
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INCOME FROM DISCONTINUED OPERATIONS, NET OF TAX
|
(29)
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5,080
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1,766
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56,914
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|||
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NET INCOME
|
$1,557,129
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$1,305,925
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$4,160,257
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$3,318,057
|
|||
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NET INCOME FROM CONTINUING OPERATIONS PER COMMON SHARE:
|
|||||||
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Basic
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$0.15
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$0.13
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$0.41
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$0.31
|
|||
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Diluted
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$0.15
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$0.13
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$0.41
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$0.31
|
|||
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NET INCOME PER COMMON SHARE:
|
|||||||
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Basic
|
$0.15
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$0.13
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$0.41
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$0.32
|
|||
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Diluted
|
$0.15
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$0.13
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$0.41
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$0.31
|
|||
|
Weighted Average Number of Shares Outstanding:
|
|||||||
|
Basic
|
10,247,746
|
10,160,119
|
10,208,944
|
10,471,103
|
|||
|
Diluted
|
10,255,156
|
10,238,142
|
10,251,863
|
10,535,736
|
|||
TANDY LEATHER FACTORY, INC.
CONSOLIDATED BALANCE SHEETS
|
12/31/10
(unaudited)
|
12/31/09
|
|||
|
CURRENT ASSETS:
|
||||
|
Cash
|
$4,293,746
|
$7,891,962
|
||
|
Short-term investments, including certificates of deposit
|
1,621,593
|
5,017,000
|
||
|
Accounts receivable-trade, net of allowance for doubtful accounts
|
||||
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of $147,000 and $136,000 in 2010 and 2009, respectively
|
1,253,639
|
1,202,811
|
||
|
Inventory
|
20,236,028
|
16,865,826
|
||
|
Deferred income taxes
|
307,509
|
271,481
|
||
|
Other current assets
|
1,056,201
|
791,884
|
||
|
Total current assets
|
28,768,716
|
32,040,964
|
||
|
PROPERTY AND EQUIPMENT, at cost
|
14,390,662
|
15,111,497
|
||
|
Less accumulated depreciation and amortization
|
(4,106,121)
|
(5,431,776)
|
||
|
10,284,541
|
9,679,721
|
|||
|
GOODWILL
|
990,368
|
983,823
|
||
|
OTHER INTANGIBLES, net of accumulated amortization of
|
||||
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$495,000 and $418,000 in 2010 and 2009, respectively
|
232,416
|
307,802
|
||
|
OTHER assets
|
319,533
|
314,921
|
||
|
$40,595,574
|
$43,327,231
|
|||
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
||||
|
CURRENT LIABILITIES:
|
||||
|
Accounts payable-trade
|
$1,247,821
|
$1,185,032
|
||
|
Accrued expenses and other liabilities
|
4,893,236
|
3,988,144
|
||
|
Income taxes payable
|
554,380
|
399,536
|
||
|
Current maturities of capital lease obligation
|
-
|
-
|
||
|
Current maturities of long-term debt
|
202,500
|
202,500
|
||
|
Total current liabilities
|
6,897,937
|
5,775,212
|
||
|
DEFERRED INCOME TAXES
|
628,543
|
682,364
|
||
|
CAPITAL LEASE OBLIGATION, net of current maturities
|
-
|
-
|
||
|
LONG-TERM DEBT, net of current maturities
|
3,307,500
|
3,510,000
|
||
|
COMMITMENTS AND CONTINGENCIES
|
-
|
-
|
||
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STOCKHOLDERS' EQUITY:
|
||||
|
Preferred stock, $0.10 par value; 20,000,000 shares
|
||||
|
authorized, none issued or outstanding
|
-
|
-
|
||
|
Common stock, $0.0024 par value; 25,000,000 shares
|
||||
|
authorized, 11,150,065 and 11,021,951 shares issued at 2010 and 2009,
|
||||
|
10,156,442 and 10,130,628 outstanding at 2010 and 2009, respectively
|
26,760
|
26,453
|
||
|
Paid-in capital
|
5,703,387
|
5,491,736
|
||
|
Retained earnings
|
26,429,335
|
29,959,910
|
||
|
Treasury stock at cost (993,623 shares at 2010; 891,323 shares at 2009)
|
(2,894,068)
|
(2,452,649)
|
||
|
Accumulated other comprehensive income
|
496,180
|
334,205
|
||
|
Total stockholders' equity
|
29,761,594
|
33,359,655
|
||
|
$40,595,574
|
$43,327,231
|
|||
TANDY LEATHER FACTORY, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE TWELVE MONTHS ENDED DECEMBER 31, 2010 AND 2009
|
2010
(unaudited)
|
2009
|
|||||||||
|
CASH FLOWS FROM OPERATING ACTIVITIES:
|
||||||||||
|
Net income
|
$4,160,257
|
$3,318,057
|
||||||||
|
Income from discontinued operations
|
1,766
|
56,914
|
||||||||
|
4,158,491
|
3,261,143
|
|||||||||
|
Adjustments to reconcile net income to net cash
|
||||||||||
|
provided by operating activities -
|
||||||||||
|
Depreciation and amortization
|
972,409
|
1,125,009
|
||||||||
|
Loss on disposal or abandonment of assets
|
49,154
|
21,540
|
||||||||
|
Impairment of equipment
|
-
|
343,543
|
||||||||
|
Non-cash stock-based compensation
|
41,692
|
2,540
|
||||||||
|
Deferred income taxes
|
(90,520)
|
40,776
|
||||||||
|
Other
|
150,203
|
339,305
|
||||||||
|
Net changes in assets and liabilities, net of effect of
|
||||||||||
|
business acquisitions:
|
||||||||||
|
Accounts receivable-trade, net
|
(56,736)
|
(99,994)
|
||||||||
|
Inventory
|
(3,370,202)
|
(900,466)
|
||||||||
|
Income taxes
|
186,940
|
147,310
|
||||||||
|
Other current assets
|
(264,317)
|
(14,334)
|
||||||||
|
Accounts payable-trade
|
62,788
|
36,455
|
||||||||
|
Accrued expenses and other liabilities
|
905,092
|
810,564
|
||||||||
|
Total adjustments
|
(1,413,497)
|
1,852,248
|
||||||||
|
Net cash provided by continuing operating activities
|
2,744,994
|
5,113,391
|
||||||||
|
Cash provided from discontinued operating activities
|
(23,751)
|
161,070
|
||||||||
|
Net cash provided by operating activities
|
2,721,243
|
5,274,461
|
||||||||
|
CASH FLOWS FROM INVESTING ACTIVITIES:
|
||||||||||
|
Purchase of property and equipment
|
(1,553,339)
|
(791,565)
|
||||||||
|
Purchases of certificates of deposit
|
(2,572,593)
|
(8,671,000)
|
||||||||
|
Proceeds from sales or maturities of certificates of deposit
|
5,968,000
|
6,665,000
|
||||||||
|
Proceeds from sale of assets
|
7,570
|
2,510
|
||||||||
|
Decrease (increase) in other assets
|
(4,612)
|
(1,847)
|
||||||||
|
Net cash provided by continuing investing activities
|
1,845,026
|
(2,796,902)
|
||||||||
|
Cash provided from discontinued investing activities
|
-
|
-
|
||||||||
|
Net cash used in investing activities
|
1,845,026
|
(2,796,902)
|
||||||||
|
CASH FLOWS FROM FINANCING ACTIVITIES:
|
||||||||||
|
Payments on notes payable and long-term debt
|
(202,500)
|
(202,500)
|
||||||||
|
Payments on capital lease obligations
|
-
|
(593,949)
|
||||||||
|
Payment of dividend
|
(7,690,832)
|
-
|
||||||||
|
Repurchase of common stock (treasury stock)
|
(441,419)
|
(1,624,264)
|
||||||||
|
Proceeds from issuance of common stock and warrants
|
170,266
|
24,818
|
||||||||
|
Net cash provided by continuing financing activities
|
(8,164,485)
|
(2,395,895)
|
||||||||
|
Cash provided from discontinued financing activities
|
-
|
-
|
||||||||
|
Net cash provided by (used in) financing activities
|
(8,164,485)
|
(2,395,895)
|
||||||||
|
NET INCREASE IN CASH
|
(3,598,216)
|
81,664
|
||||||||
|
CASH, beginning of period
|
7,891,962
|
7,810,298
|
||||||||
|
CASH, end of period
|
$4,293,746
|
$7,891,962
|
||||||||
|
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
|
||||||||||
|
Interest paid during the period
|
$265,405
|
$297,864
|
||||||||
|
Income tax paid during the period, net of (refunds)
|
2,208,819
|
1,622,273
|
||||||||