Attached files
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| 8-K - FORM 8-K DATED MARCH 14, 2012 - TANDY LEATHER FACTORY INC | form8-k.htm |
EXHIBIT 99.1
FOR IMMEDIATE RELEASE MARCH 14, 2012
TANDY LEATHER FACTORY REPORTS 47 CENTS EPS FOR 2011, UP 15% OVER 2010
PROVIDES SALES AND EARNINGS GUIDANCE FOR 2012
FORT WORTH, TEXAS – Tandy Leather Factory, Inc. (NASDAQ: TLF) today reported financial results for the fourth quarter and year ended December 31, 2011. A conference call will be conducted by Jon Thompson, CEO, and Shannon Greene, CFO, at 2:00 p.m. Eastern Time today. Dial-in details have been provided previously.
Consolidated net income for the quarter was $1.7 million compared to consolidated net income of $1.6 million for the fourth quarter of 2010. Fully diluted earnings per share for the quarter were $0.17, compared to $0.15 for the same quarter of the previous year. Total sales for the quarter ended December 31, 2011 increased 9% to $18.9 million from $17.3 million for the fourth quarter of 2010. Consolidated sales for the year ended December 31, 2011 were $66.1 million, up 10% from 2010 sales of $59.9 million. Consolidated net income for 2011 was $4.8 million or $0.47 per fully-diluted share versus $4.2 million or $0.41 per fully-diluted share for 2010.
Sales in the Retail Leathercraft division for the fourth quarter of 2011 increased $1.3 million over the previous year's fourth quarter, representing a 14% improvement. Same stores sales increased 13% over the fourth quarter of 2010. Seventy-seven Tandy Leather retail stores comprised Retail Leathercraft’s operations on December 31, 2011, compared to seventy-six retail stores a year earlier. For the year, Retail Leathercraft’s sales increased $5.1 million, or 16%, over 2010. Same store sales for the year increased 15% compared to 2010.
Fourth quarter sales for the Wholesale Leathercraft division increased $140,000 over the same quarter of 2010, a 2% improvement. Same store sales decreased 1% while national account sales were up 36% for the quarter. Twenty-nine Leather Factory wholesale stores comprised Wholesale Leathercraft’s operations on December 31, 2011, the same as that as of December 31, 2010. One wholesale store operating as Mid-Continent Leather Sales was closed in 2010. For the year, Wholesale Leathercraft’s sales were up $519,000 million, or 2%. 2011 same store sales and sales to national accounts were both up 4%.
International Leathercraft’s fourth quarter sales increased $100,000 over the same quarter of 2010, a 20% improvement. Same store sales decreased 1% while the new Australia store opened in October, added fourth quarter sales of $105,000. Two stores comprised International Leathercraft’s operations on December 31, 2011, compared to one store a year earlier. For the year, International Leathercraft’s sales increased 26% to $2.1 million from $1.7 million in 2010. 2011 same store sales increased 19% compared to 2010.
Consolidated gross profit margin for the fourth quarter was 62.0%, a improvement from 60.0% in the fourth quarter of 2010. For 2011, consolidated gross profit margin was 61.0%, improving from the previous year's gross profit margin of 60.5%. Consolidated operating expenses for the fourth quarter of 2011 were 47.2% of sales, increasing $1.1 million or 14.5% over the same quarter of 2010. Operating expenses totaled 49.4% of sales for 2011, increasing $3.0 million, or 10.2% over 2010.
Jon Thompson, Chief Executive Officer, commented, "We believed we performed well in 2011, as our sales, gross profit margin, and operating margin again exceeded that of last year. Our momentum is carrying into 2012 as sales are strong through the first two months of the year. In 2012, we have opened the one store in Spain and are considering several additional stores in those countries where we are already located. In addition, we will continue to expand the size of our existing stores in the US as appropriate. We believe that strategy is working well as evidenced by our sales trend. Further domestic store expansion will continue slowly as we maneuver our way through the economic uncertainty that exists.”
Shannon Greene, Chief Financial Officer and Treasurer, added, “Our goal each year is to increase sales and earnings over the prior year and we met that goal for 2011. Further, we believe we managed our investment in inventory well and ended the year with enough excess cash to pay a special one-time dividend at the end of the first quarter of 2012, the second such dividend in three years. Our board believes rewarding our stockholders for their commitment is the best use of excess cash at this time. ”
Financial Outlook:
The following statements are based on TLF's current expectations as of March 14, 2012. 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 2-3 stores in 2012: 1-2 internationally and 1 domestically. Estimated consolidated net sales for 2012 will be in the range of $72 to $73 million. EPS for 2012 are expected to be in the range of $0.50 to $0.52. Average shares outstanding, both basic and diluted, in 2012 are estimated to be approximately 10.2 million. The Company assumes an effective tax rate for the year between 36% 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, 77 Tandy Leather retail stores, located in 36 states and 6 Canadian provinces, and three combination wholesale/retail stores located in the United Kingdom, Australia and Spain. 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 12/31/11
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Quarter Ended 12/31/10
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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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$7,198,979
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$1,093,808
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$7,059,163
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$1,022,344
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|||
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Retail Leathercraft
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11,107,928
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1,798,081
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9,756,022
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1,403,923
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|||
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International Leathercraft
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597,658
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(88,879)
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498,132
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152,809
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|||
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Total Operations
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$18,904,565
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$2,803,010
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$17,313,317
|
$2,579,076
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|||
|
Year Ended 12/31/11
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Year Ended 12/31/10
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||||||
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Sales
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Operating Income
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Sales
|
Operating Income
|
||||
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Wholesale Leathercraft
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$26,540,899
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$2,803,034
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$25,908,177
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$2,690,061
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|||
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Retail Leathercraft
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37,435,832
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4,656,067
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32,291,442
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3,614,856
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|||
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International Leathercraft
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2,126,216
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247,549
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1,693,251
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330,694
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|||
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Total Operations
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$66,102,947
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$7,706,650
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$59,892,870
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$6,635,611
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|||
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Wholesale Leathercraft
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Quarter Ended 12/31/11
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Quarter Ended 12/31/10
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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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$6,415,850
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29
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$6,482,888
|
|
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Closed store
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-
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-
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1
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2,074
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|
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National account group
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783,129
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574,201
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|||
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Total Sales – Wholesale Leathercraft
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29
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$7,198,979
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30
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$7,059,163
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|
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Wholesale Leathercraft
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Year Ended 12/31/11
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Year Ended 12/31/10
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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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$23,548,920
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29
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$22,753,444
|
|
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Closed store
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-
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-
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1
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276,236
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|
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National account group
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2,991,979
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2,878,497
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|||
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Total Sales – Wholesale Leathercraft
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29
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$26,540,899
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30
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$25,908,177
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|
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Retail Leathercraft
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Quarter Ended 12/31/11
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Quarter Ended 12/31/10
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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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76
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$11,011,321
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76
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$9,756,022
|
|
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New store sales
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1
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96,607
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-
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-
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|
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Total Sales – Retail Leathercraft
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77
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$11,107,928
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76
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$9,756,022
|
|
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Retail Leathercraft
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Year Ended 12/31/11
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Year Ended 12/31/10
|
|||
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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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$36,902,629
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75
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$32,062,253
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|
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New store sales
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2
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533,203
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1
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229,189
|
|
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Total Sales – Retail Leathercraft
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77
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$37,435,832
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76
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$32,291,442
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TANDY LEATHER FACTORY, INC.
CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE AND TWELVE MONTHS ENDED DECEMBER 31, 2011 AND 2010
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Three Months
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Twelve Months
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||||||
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2011
(unaudited)
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2010
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2011
(unaudited)
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2010
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||||
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NET SALES
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$18,904,565
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$17,313,317
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$66,102,947
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$59,892,870
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|||
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COST OF SALES
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7,175,786
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6,936,547
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25,765,788
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23,642,013
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|||
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Gross Profit
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11,728,779
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10,376,770
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40,337,159
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36,250,857
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|||
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OPERATING EXPENSES
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8,925,769
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7,797,694
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32,630,509
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29,615,246
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|||
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INCOME FROM OPERATIONS
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2,803,010
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2,579,076
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7,706,650
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6,635,611
|
|||
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Interest expense
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62,891
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66,621
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248,576
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265,405
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|||
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Other, net
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(1,653)
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55,555
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(83,428)
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(105,540)
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|||
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Total other expense
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61,238
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122,176
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165,148
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159,865
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|||
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INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES
|
2,741,772
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2,456,900
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7,541,502
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6,475,746
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|||
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PROVISION FOR INCOME TAXES
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1,045,209
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899,742
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2,787,533
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2,317,255
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|||
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NET INCOME FROM OPERATIONS
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1,696,563
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1,557,158
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4,753,969
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4,158,491
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|||
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INCOME FROM DISCONTINUED OPERATIONS, NET OF TAX
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-
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(29)
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(1,368)
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1,766
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|||
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NET INCOME
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$1,696,563
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$1,557,129
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$4,752,601
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$4,160,257
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|||
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NET INCOME FROM CONTINUING OPERATIONS PER COMMON SHARE:
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|||||||
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Basic
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$0.17
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$0.15
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$0.47
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$0.41
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|||
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Diluted
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$0.17
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$0.15
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$0.47
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$0.41
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|||
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NET INCOME PER COMMON SHARE:
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|||||||
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Basic
|
$0.17
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$0.15
|
$0.47
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$0.41
|
|||
|
Diluted
|
$0.17
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$0.15
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$0.47
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$0.41
|
|||
|
Weighted Average Number of Shares Outstanding:
|
|||||||
|
Basic
|
10,156,442
|
10,247,746
|
10,156,442
|
10,208,944
|
|||
|
Diluted
|
10,166,658
|
10,255,156
|
10,182,098
|
10,251,863
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|||
TANDY LEATHER FACTORY, INC.
CONSOLIDATED BALANCE SHEETS
|
12/31/11
(unaudited)
|
12/31/10
|
||
|
ASSETS
|
|||
|
CURRENT ASSETS:
|
|||
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Cash
|
$10,765,591
|
$4,293,746
|
|
|
Short-term investments, including certificates of deposit
|
423,893
|
1,621,593
|
|
|
Accounts receivable-trade, net of allowance for doubtful accounts
|
|||
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of $81,000 and $147,000 in 2011 and 2010, respectively
|
1,328,579
|
1,253,639
|
|
|
Inventory
|
19,940,251
|
20,236,028
|
|
|
Deferred income taxes
|
281,251
|
307,509
|
|
|
Other current assets
|
948,459
|
1,056,201
|
|
|
Total current assets
|
33,688,024
|
28,768,716
|
|
|
PROPERTY AND EQUIPMENT, at cost
|
14,999,826
|
14,390,662
|
|
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Less accumulated depreciation and amortization
|
(4,700,476)
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(4,106,121)
|
|
|
10,299,350
|
10,284,541
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||
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GOODWILL
|
987,009
|
990,368
|
|
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OTHER INTANGIBLES, net of accumulated amortization of
|
|||
|
$539,000 and $495,000 in 2011 and 2010, respectively
|
187,292
|
232,416
|
|
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OTHER assets
|
341,240
|
319,533
|
|
|
$45,502,915
|
$40,595,574
|
||
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LIABILITIES AND STOCKHOLDERS' EQUITY
|
|||
|
CURRENT LIABILITIES:
|
|||
|
Accounts payable-trade
|
$1,622,697
|
$1,247,821
|
|
|
Accrued expenses and other liabilities
|
4,641,191
|
4,893,236
|
|
|
Income taxes payable
|
638,897
|
554,380
|
|
|
Current maturities of long-term debt
|
202,500
|
202,500
|
|
|
Total current liabilities
|
7,105,285
|
6,897,937
|
|
|
DEFERRED INCOME TAXES
|
858,829
|
628,543
|
|
|
LONG-TERM DEBT, net of current maturities
|
3,105,000
|
3,307,500
|
|
|
COMMITMENTS AND CONTINGENCIES
|
-
|
-
|
|
|
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 shares issued at 2011 and 2010,
|
|||
|
10,156,442 outstanding at 2011 and 2010, respectively
|
26,760
|
26,760
|
|
|
Paid-in capital
|
5,736,543
|
5,703,387
|
|
|
Retained earnings
|
31,181,936
|
26,429,335
|
|
|
Treasury stock at cost (993,623 shares at 2011 and 2010)
|
(2,894,068)
|
(2,894,068)
|
|
|
Accumulated other comprehensive income
|
382,630
|
496,180
|
|
|
Total stockholders' equity
|
34,433,801
|
29,761,594
|
|
|
$45,502,915
|
$40,595,574
|
TANDY LEATHER FACTORY, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE TWELVE MONTHS ENDED DECEMBER 31, 2011 AND 2010
|
2011
(unaudited)
|
2010
|
||||||||
|
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|||||||||
|
Net income
|
$4,752,601
|
$4,160,257
|
|||||||
|
Income from discontinued operations
|
(1,368)
|
1,766
|
|||||||
|
4,753,969
|
4,158,491
|
||||||||
|
Adjustments to reconcile net income to net cash
|
|||||||||
|
provided by operating activities -
|
|||||||||
|
Depreciation and amortization
|
1,016,561
|
972,409
|
|||||||
|
Loss on disposal or abandonment of assets
|
84,168
|
49,154
|
|||||||
|
Impairment of equipment
|
-
|
-
|
|||||||
|
Non-cash stock-based compensation
|
33,156
|
41,692
|
|||||||
|
Deferred income taxes
|
256,544
|
(90,520)
|
|||||||
|
Other
|
(106,345)
|
150,203
|
|||||||
|
Net changes in assets and liabilities, net of effect of
|
|||||||||
|
business acquisitions:
|
|||||||||
|
Accounts receivable-trade, net
|
(74,940)
|
(56,736)
|
|||||||
|
Inventory
|
295,777
|
(3,370,202)
|
|||||||
|
Income taxes
|
84,216
|
186,940
|
|||||||
|
Other current assets
|
107,742
|
(264,317)
|
|||||||
|
Accounts payable-trade
|
374,876
|
62,788
|
|||||||
|
Accrued expenses and other liabilities
|
(252,045)
|
905,092
|
|||||||
|
Total adjustments
|
1,819,710
|
(1,413,497)
|
|||||||
|
Net cash provided by continuing operating activities
|
6,573,679
|
2,744,994
|
|||||||
|
Cash provided from discontinued operating activities
|
(1,067)
|
(23,751)
|
|||||||
|
Net cash provided by operating activities
|
6,572,612
|
2,721,243
|
|||||||
|
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|||||||||
|
Purchase of property and equipment
|
(1,100,523)
|
(1,553,339)
|
|||||||
|
Purchases of certificates of deposit
|
(87,893)
|
(2,572,593)
|
|||||||
|
Proceeds from sales or maturities of certificates of deposit
|
1,285,593
|
5,968,000
|
|||||||
|
Proceeds from sale of assets
|
26,263
|
7,570
|
|||||||
|
Decrease (increase) in other assets
|
(21,707)
|
(4,612)
|
|||||||
|
Net cash provided by continuing investing activities
|
101,733
|
1,845,026
|
|||||||
|
Cash provided from discontinued investing activities
|
-
|
-
|
|||||||
|
Net cash used in investing activities
|
101,733
|
1,845,026
|
|||||||
|
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|||||||||
|
Payments on notes payable and long-term debt
|
(202,500)
|
(202,500)
|
|||||||
|
Payments on capital lease obligations
|
-
|
-
|
|||||||
|
Payment of dividend
|
-
|
(7,690,832)
|
|||||||
|
Repurchase of common stock (treasury stock)
|
-
|
(441,419)
|
|||||||
|
Proceeds from issuance of common stock and warrants
|
-
|
170,266
|
|||||||
|
Net cash provided by continuing financing activities
|
(202,500)
|
(8,164,485)
|
|||||||
|
Cash provided from discontinued financing activities
|
-
|
-
|
|||||||
|
Net cash provided by (used in) financing activities
|
(202,500)
|
(8,164,485)
|
|||||||
|
NET INCREASE IN CASH
|
6,471,845
|
(3,598,216)
|
|||||||
|
CASH, beginning of period
|
4,293,746
|
7,891,962
|
|||||||
|
CASH, end of period
|
$10,765,591
|
$4,293,746
|
|||||||
|
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
|
|||||||||
|
Interest paid during the period
|
$248,576
|
$265,405
|
|||||||
|
Income tax paid during the period, net of (refunds)
|
2,437,701
|
2,208,819
|
|||||||