Attached files
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| 8-K - FORM 8-K DATED MARCH 12, 2013 - TANDY LEATHER FACTORY INC | form8-k.htm |
EXHIBIT 99.1
FOR IMMEDIATE RELEASE MARCH 12, 2013
TANDY LEATHER FACTORY REPORTS 55 CENTS EPS FOR 2012, UP 17% OVER 2011
PROVIDES SALES AND EARNINGS GUIDANCE FOR 2013
FORT WORTH, TEXAS – Tandy Leather Factory, Inc. (NASDAQ: TLF) today reported financial results for the fourth quarter and year ended December 31, 2012. A conference call will be conducted by senior management at 2:00 p.m. Eastern Time today. Dial-in details have been provided previously.
Consolidated net income for the quarter was $2.2 million compared to consolidated net income of $1.7 million for the fourth quarter of 2011. Fully diluted earnings per share for the quarter were $0.22, compared to $0.17 for the same quarter of the previous year. Total sales for the quarter ended December 31, 2012 increased 9% to $20.6 million from $18.9 million for the fourth quarter of 2011. Consolidated sales for the year ended December 31, 2012 were $72.7 million, up 10% from 2011 sales of $66.1 million. Consolidated net income for 2012 was $5.6 million or $0.55 per fully-diluted share versus $4.7 million or $0.47 per fully-diluted share for 2011.
Sales in the Retail Leathercraft division for the fourth quarter of 2012 increased $1.4 million over the previous year's fourth quarter, representing a 13% improvement. Same stores sales increased 12% over the fourth quarter of 2011. Seventy-eight Tandy Leather retail stores comprised Retail Leathercraft’s operations on December 31, 2012, compared to seventy-seven retail stores a year earlier. For the year, Retail Leathercraft’s sales increased $5.2 million, or 14%, over 2011. Same store sales for the year increased 13% compared to 2011.
Fourth quarter sales for the Wholesale Leathercraft division decreased $27,000 over the same quarter of 2011, a 1/2% decline. Same store sales increased 8% while national account sales were down 71% for the quarter. Twenty-nine Leather Factory wholesale stores comprised Wholesale Leathercraft’s operations on December 31, 2012, the same as that as of December 31, 2011. For the year, Wholesale Leathercraft’s sales were up $309,000, or 1%. 2012 same store sales increased 7% while sales to national accounts were down 44%. National Account sales represented 6% of the division’s sales in 2012, and only 2% of total company sales.
International Leathercraft’s fourth quarter sales increased $346,000 over the same quarter of 2011, a 58% improvement. Same store sales increased 38% while the new store in Spain which opened in January 2012, added fourth quarter sales of $118,000. Three stores comprised International Leathercraft’s operations on December 31, 2012, compared to two stores a year earlier. For the year, International Leathercraft’s sales increased 53% to $3.2 million from $2.1 million in 2011. 2012 same store sales, representing one store, increased 3% compared to 2011, while the two new stores added 2012 sales of $1.2 million.
Consolidated gross profit margin for the fourth quarter was 63.9%, an improvement from 62.0% in the fourth quarter of 2011. For 2012, consolidated gross profit margin was 63.1%, improving from the previous year's gross profit margin of 61.0%. Consolidated operating expenses for the fourth quarter of 2012 were 47.1% of sales, increasing $789,000 or 8.9% over the same quarter of 2011. Operating expenses totaled 50.6% of sales for 2012, increasing $4.1 million, or 12.7% over 2011.
Jon Thompson, Chief Executive Officer, commented, "We believe our strategy of expanding the size of our existing stores is working well, as evidenced by our sales growth over the last several years. In addition, we have been successful in getting more product in our stores while not significantly increasing the back stock held in our central warehouse. Overall, we consider 2012 a very successful year.”
Shannon Greene, Chief Financial Officer and Treasurer, added, “Our goal is to increase sales and earnings over the prior year and we met that goal in 2012. Gross profit margin and operating margin also increased over last year and all three segments achieved sales gains. The higher sales and efficient inventory management has resulted in a growing cash balance.”
Financial Outlook:
The following statements are based on TLF's current expectations as of March 12, 2013. 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 1-2 stores in 2013 in the US. Estimated consolidated net sales for 2013 will be in the range of $78 to $80 million. EPS for 2013 are expected to be in the range of $0.69 to $0.72. Average shares outstanding, both basic and diluted, in 2013 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, 78 Tandy Leather retail stores, located in 37 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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(817) 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:
|
Quarter Ended 12/31/12
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Quarter Ended 12/31/11
|
||||||
|
Sales
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Oper Inc
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Sales
|
Oper Inc
|
||||
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Wholesale Leathercraft
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$7,171,993
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$1,692,410
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$7,198,979
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$1,093,808
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|||
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Retail Leathercraft
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12,522,682
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1,780,813
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11,107,928
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1,798,081
|
|||
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International Leathercraft
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943,888
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6,978
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597,658
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(88,879)
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|||
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Total Operations
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$20,638,563
|
$3,480,201
|
$18,904,565
|
$2,803,010
|
|||
|
Year Ended 12/31/12
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Year Ended 12/31/11
|
||||||
|
Sales
|
Oper Inc
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Sales
|
Oper Inc
|
||||
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Wholesale Leathercraft
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$26,850,002
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$3,730,678
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$26,540,899
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$2,803,034
|
|||
|
Retail Leathercraft
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42,616,546
|
5,436,745
|
37,435,832
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4,656,067
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|||
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International Leathercraft
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3,254,076
|
(23,418)
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2,126,216
|
247,549
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|||
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Total Operations
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$72,720,624
|
$9,144,005
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$66,102,947
|
$7,706,650
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|||
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Wholesale Leathercraft
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Quarter Ended 12/31/12
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Quarter Ended 12/31/11
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|||
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# of stores
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Sales
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# of stores
|
Sales
|
||
|
Same store sales
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29
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$6,941,017
|
29
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$6,415,850
|
|
|
Closed store
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-
|
-
|
-
|
-
|
|
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National account group
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230,976
|
783,129
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|||
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Total Sales – Wholesale Leathercraft
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29
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$7,171,993
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29
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$7,198,979
|
|
|
Year Ended 12/31/12
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Year Ended 12/31/11
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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
|
||
|
Same store sales
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29
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$25,173,354
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29
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$23,548,920
|
|
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Closed store
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-
|
-
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-
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-
|
|
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National account group
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1,676,648
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2,991,979
|
|||
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Total Sales – Wholesale Leathercraft
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29
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$26,850,002
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29
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$26,540,899
|
|
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Retail Leathercraft
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Quarter Ended 12/31/12
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Quarter Ended 12/31/11
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|||
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# of stores
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Sales
|
# of stores
|
Sales
|
||
|
Same store sales
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77
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$12,455,607
|
77
|
$11,107,928
|
|
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New store sales
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1
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67,075
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-
|
-
|
|
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Total Sales – Retail Leathercraft
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78
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$12,522,682
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77
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$11,107,928
|
|
|
Year Ended 12/31/12
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Year Ended 12/31/11
|
||||
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# of stores
|
Sales
|
# of stores
|
Sales
|
||
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Same store sales
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76
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$42,108,629
|
76
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$37,263,482
|
|
|
New store sales
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2
|
507,917
|
1
|
172,350
|
|
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Total Sales – Retail Leathercraft
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78
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$42,616,546
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77
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$37,435,832
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|
|
International Leathercraft
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Quarter Ended 12/31/12
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Quarter Ended 12/31/11
|
|||
|
# of stores
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Sales
|
# of stores
|
Sales
|
||
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Same store sales
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2
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$825,758
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2
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$597,658
|
|
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New store sales
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1
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118,130
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-
|
-
|
|
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Total Sales – Intl Leathercraft
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3
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$943,888
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2
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$597,658
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|
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Year Ended 12/31/12
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Year Ended 12/31/11
|
||||
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# of stores
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Sales
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# of stores
|
Sales
|
||
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Same store sales
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1
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$2,075,482
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1
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$2,020,592
|
|
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New store sales
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2
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1,178,594
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1
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105,624
|
|
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Total Sales – Intl Leathercraft
|
3
|
$3,254,076
|
2
|
$2,126,216
|
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TANDY LEATHER FACTORY, INC.
CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE AND TWELVE MONTHS ENDED DECEMBER 31, 2012 AND 2011
|
Three Months
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Twelve Months
|
||||||
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2012
(unaudited)
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2011
|
2012
(unaudited)
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2011
|
||||
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NET SALES
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$20,638,563
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$18,904,565
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$72,720,624
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$66,102,947
|
|||
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COST OF SALES
|
7,443,494
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7,175,786
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26,814,950
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25,765,788
|
|||
|
Gross Profit
|
13,195,069
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11,728,779
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45,905,674
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40,337,159
|
|||
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OPERATING EXPENSES
|
9,714,868
|
8,925,769
|
36,761,669
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32,630,509
|
|||
|
INCOME FROM OPERATIONS
|
3,480,201
|
2,803,010
|
9,144,005
|
7,706,650
|
|||
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Interest expense
|
64,683
|
62,891
|
240,934
|
248,576
|
|||
|
Other, net
|
17,212
|
(1,653)
|
(42,574)
|
(83,428)
|
|||
|
Total other expense
|
81,895
|
61,238
|
198,360
|
165,148
|
|||
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INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES
|
3,398,306
|
2,741,772
|
8,945,645
|
7,541,502
|
|||
|
PROVISION FOR INCOME TAXES
|
1,196,750
|
1,045,209
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3,349,575
|
2,787,533
|
|||
|
NET INCOME FROM OPERATIONS
|
2,201,556
|
1,696,563
|
5,596,070
|
4,753,969
|
|||
|
INCOME FROM DISCONTINUED OPERATIONS, NET OF TAX
|
-
|
-
|
-
|
(1,368)
|
|||
|
NET INCOME
|
$2,201,556
|
$1,696,563
|
$5,596,070
|
$4,752,601
|
|||
|
NET INCOME FROM CONTINUING OPERATIONS PER COMMON SHARE:
|
|||||||
|
Basic
|
$0.22
|
$0.17
|
$0.55
|
$0.47
|
|||
|
Diluted
|
$0.22
|
$0.17
|
$0.55
|
$0.47
|
|||
|
NET INCOME PER COMMON SHARE:
|
|||||||
|
Basic
|
$0.22
|
$0.17
|
$0.55
|
$0.47
|
|||
|
Diluted
|
$0.22
|
$0.17
|
$0.55
|
$0.47
|
|||
|
Weighted Average Number of Shares Outstanding:
|
|||||||
|
Basic
|
10,159,877
|
10,156,442
|
10,157,395
|
10,156,442
|
|||
|
Diluted
|
10,178,759
|
10,166,658
|
10,175,346
|
10,182,098
|
|||
TANDY LEATHER FACTORY, INC.
CONSOLIDATED BALANCE SHEETS
|
12/31/12
(unaudited)
|
12/31/11
|
|||
|
ASSETS
|
||||
|
CURRENT ASSETS:
|
||||
|
Cash
|
$7,705,182
|
$10,765,591
|
||
|
Short-term investments, including certificates of deposit
|
-
|
423,893
|
||
|
Accounts receivable-trade, net of allowance for doubtful accounts
|
||||
|
of $112,000 and $81,000 in 2012 and 2011, respectively
|
822,772
|
1,328,579
|
||
|
Inventory
|
25,862,784
|
19,940,251
|
||
|
Deferred income taxes
|
349,478
|
281,251
|
||
|
Other current assets
|
929,913
|
948,459
|
||
|
Total current assets
|
35,670,129
|
33,688,024
|
||
|
PROPERTY AND EQUIPMENT, at cost
|
17,574,895
|
14,999,826
|
||
|
Less accumulated depreciation and amortization
|
(5,630,305)
|
(4,700,476)
|
||
|
11,944,590
|
10,299,350
|
|||
|
GOODWILL
|
990,725
|
987,009
|
||
|
OTHER INTANGIBLES, net of accumulated amortization of
|
||||
|
$552,000 and $539,000 in 2012 and 2011, respectively
|
145,533
|
187,292
|
||
|
OTHER assets
|
336,695
|
341,240
|
||
|
$49,087,672
|
$45,502,915
|
|||
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
||||
|
CURRENT LIABILITIES:
|
||||
|
Accounts payable-trade
|
$1,612,627
|
$1,622,697
|
||
|
Accrued expenses and other liabilities
|
5,928,798
|
4,641,191
|
||
|
Income taxes payable
|
113,705
|
638,897
|
||
|
Current maturities of long-term debt
|
202,500
|
202,500
|
||
|
Total current liabilities
|
7,857,630
|
7,105,285
|
||
|
DEFERRED INCOME TAXES
|
806,525
|
858,829
|
||
|
LONG-TERM DEBT, net of current maturities
|
2,902,500
|
3,105,000
|
||
|
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, 11,156,065 and 11,150,065 shares issued at 2012 and 2011,
|
||||
|
10,162,442 and 10,156,442 outstanding at 2012 and 2011, respectively
|
26,775
|
26,760
|
||
|
Paid-in capital
|
5,767,508
|
5,736,543
|
||
|
Retained earnings
|
34,241,875
|
31,181,936
|
||
|
Treasury stock at cost (993,623 shares at 2012 and 2011)
|
(2,894,068)
|
(2,894,068)
|
||
|
Accumulated other comprehensive income
|
378,927
|
382,630
|
||
|
Total stockholders' equity
|
37,521,017
|
34,433,801
|
||
|
$49,087,672
|
$45,502,915
|
|||
TANDY LEATHER FACTORY, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE TWELVE MONTHS ENDED DECEMBER 31, 2012 AND 2011
|
2012
(unaudited)
|
2011
|
|||||||||
|
CASH FLOWS FROM OPERATING ACTIVITIES:
|
||||||||||
|
Net income
|
$5,596,070
|
$4,752,601
|
||||||||
|
Income(loss) from discontinued operations
|
-
|
(1,368)
|
||||||||
|
5,596,070
|
4,753,969
|
|||||||||
|
Adjustments to reconcile net income to net cash provided by operating activities -
|
||||||||||
|
Depreciation and amortization
|
1,068,226
|
1,016,561
|
||||||||
|
Loss on disposal or abandonment of assets
|
21,092
|
84,168
|
||||||||
|
Non-cash stock-based compensation
|
10,000
|
33,156
|
||||||||
|
Deferred income taxes
|
(120,531)
|
256,544
|
||||||||
|
Other
|
(15,227)
|
(106,345)
|
||||||||
|
Net changes in assets and liabilities, net of effect of business acquisitions:
|
||||||||||
|
Accounts receivable-trade, net
|
505,807
|
(74,940)
|
||||||||
|
Inventory
|
(5,922,533)
|
295,777
|
||||||||
|
Income taxes
|
(525,192)
|
84,216
|
||||||||
|
Other current assets
|
18,546
|
107,742
|
||||||||
|
Accounts payable-trade
|
(10,070)
|
374,876
|
||||||||
|
Accrued expenses and other liabilities
|
1,287,607
|
(252,045)
|
||||||||
|
Total adjustments
|
(3,682,275)
|
1,819,710
|
||||||||
|
Net cash provided by continuing operating activities
|
1,913,795
|
6,573,679
|
||||||||
|
Cash used in discontinued operating activities
|
-
|
(1,067)
|
||||||||
|
Net cash provided by operating activities
|
1,913,795
|
6,572,612
|
||||||||
|
CASH FLOWS FROM INVESTING ACTIVITIES:
|
||||||||||
|
Purchase of property and equipment
|
(2,686,221)
|
(1,100,523)
|
||||||||
|
Purchases of certificates of deposit
|
-
|
(87,893)
|
||||||||
|
Proceeds from sales or maturities of certificates of deposit
|
423,893
|
1,285,593
|
||||||||
|
Proceeds from sale of assets
|
1,230
|
26,263
|
||||||||
|
Decrease (increase) in other assets
|
4,545
|
(21,707)
|
||||||||
|
Net cash (used in) provided by continuing investing activities
|
(2,256,553)
|
101,733
|
||||||||
|
Cash provided by discontinued investing activities
|
-
|
-
|
||||||||
|
Net cash (used in) provided by investing activities
|
(2,256,553)
|
101,733
|
||||||||
|
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
|
(2,536,131)
|
-
|
||||||||
|
Repurchase of common stock (treasury stock)
|
-
|
-
|
||||||||
|
Proceeds from issuance of common stock and warrants
|
20,980
|
-
|
||||||||
|
Net cash used in continuing financing activities
|
(2,717,651)
|
(202,500)
|
||||||||
|
Cash provided by discontinued financing activities
|
-
|
-
|
||||||||
|
Net cash used in financing activities
|
(2,717,651)
|
(202,500)
|
||||||||
|
NET (DECREASE) INCREASE IN CASH
|
(3,060,409)
|
6,471,845
|
||||||||
|
CASH, beginning of period
|
10,765,591
|
4,293,746
|
||||||||
|
CASH, end of period
|
$7,705,182
|
$10,765,591
|
||||||||
|
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
|
||||||||||
|
Interest paid during the period
|
$240,934
|
$248,576
|
||||||||
|
Income tax paid during the period, net of (refunds)
|
4,004,510
|
2,437,701
|
||||||||