FORT WORTH, Texas, March 6, 2014 (GLOBE NEWSWIRE) -- Tandy Leather Factory, Inc. (Nasdaq: TLF ) today reported financial results for the fourth quarter and year ended December 31, 2013. A conference call will be conducted by senior management at 12:00 p.m. Eastern Time on March 6, 2014. Dial-in details have been provided previously.
Consolidated net income for the quarter was $2.5 million compared to consolidated net income of $2.2 million for the fourth quarter of 2012. Fully diluted earnings per share for the quarter were $0.24, compared to $0.22 for the same quarter of the previous year. Total sales for the quarter ended December 31, 2013 increased 4% to $21.5 million from $20.6 million for the fourth quarter of 2012. Consolidated sales for the year ended December 31, 2013 were $78.3 million, up 8% from 2012 sales of $72.7 million. Consolidated net income for 2013 was $7.3 million or $0.71 per fully-diluted share versus $5.6 million or $0.55 per fully-diluted share for 2012.
Sales in the Retail Leathercraft division for the fourth quarter of 2013 increased $543,000 over the previous year's fourth quarter, representing a 4% improvement. Same stores sales increased 3% over the fourth quarter of 2012. Seventy-nine Tandy Leather retail stores comprised Retail Leathercraft's operations on December 31, 2013, compared to seventy-eight retail stores a year earlier. For the year, Retail Leathercraft's sales increased $4.4 million, or 10%, over 2012. Same store sales for the year increased 9% compared to 2012.
Fourth quarter sales for the Wholesale Leathercraft division increased $278,000 over the same quarter of 2012, a 4% improvement. Same store sales increased 4% while national account sales were down 4% for the quarter. Twenty-nine Leather Factory wholesale stores comprised Wholesale Leathercraft's operations on December 31, 2013 and 2012. For the year, Wholesale Leathercraft's sales were up $535,000, or 2%. 2013 same store sales increased 4% while sales to national accounts were down 25%. National Account sales represented 5% of the division's sales in 2013, and only 2% of total company sales.
International Leathercraft's fourth quarter sales increased $90,000 over the same quarter of 2012, a 10% improvement. For the year, International Leathercraft's sales increased 20% to $3.9 million from $3.2 million in 2012. All three stores in the segment have been opened for both periods, so same store sales for the quarter and year were the same as the segment's sales. Three stores comprised International Leathercraft's operations on December 31, 2013 and 2012.
Consolidated gross profit margin for the fourth quarter was 63.9%, matching that of the fourth quarter 2012. For 2013, consolidated gross profit margin was 63.0%, declining slightly from the previous year's gross profit margin of 63.1%. Consolidated operating expenses for the fourth quarter of 2013 were 45.9% of sales, increasing $167,000 or 1.7% over the same quarter of 2012. Operating expenses totaled 48.6% of sales for 2013, increasing $1.3 million, or 3.5% over 2012.
Jon Thompson, Chief Executive Officer, commented, "We believed we performed well in 2013, as our sales and operating margin again exceeded that of last year. In 2014, we recently opened a new store in the US and are considering several others later in the year. Further, we will continue to expand the size of our existing stores in the US and Canada as we believe that strategy is working well as evidenced by our sales trend."
Shannon Greene, Chief Financial Officer and Treasurer, added, "We met the upper end of our earnings guidance for 2013, as sales and earnings increased over the prior year and all three segments achieved sales gains. The majority of our stores are performing well. We ended the year with a solid cash balance which is the result of strong sales, successful inventory management and expense control."
Financial Outlook:
The following statements are based on TLF's current expectations as of March 6, 2014. 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 2014 in the US. Estimated consolidated net sales for 2014 will be in the range of $82 to $83 million. EPS for 2014 are expected to be in the range of $0.80 to $0.83. Average shares outstanding, both basic and diluted, in 2014 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 " rel="nofollow"> 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.
Selected financial data:
| Quarter Ended 12/31/13 | Quarter Ended 12/31/12 | |||
| Sales | Oper Inc | Sales | Oper Inc | |
| Wholesale Leathercraft | $7,449,618 | $1,987,197 | $7,171,993 | $1,692,410 |
| Retail Leathercraft | 13,065,315 | 1,783,725 | 12,522,682 | 1,780,813 |
| International Leathercraft | 1,034,208 | 123,591 | 943,888 | 6,978 |
| Total Operations | $21,549,141 | $3,894,513 | $20,638,563 | $3,480,201 |
| Year Ended 12/31/13 | Year Ended 12/31/12 | |||
| Sales | Oper Inc | Sales | Oper Inc | |
| Wholesale Leathercraft | $27,384,614 | $4,840,416 | $26,850,002 | $3,730,678 |
| Retail Leathercraft | 46,995,902 | 6,026,731 | 42,616,546 | 5,436,745 |
| International Leathercraft | 3,904,069 | 399,643 | 3,254,076 | (23,418) |
| Total Operations | $78,284,585 | $11,266,790 | $72,720,624 | $9,144,005 |
| Wholesale Leathercraft | Quarter Ended 12/31/13 | Quarter Ended 12/31/12 | ||
| # of stores | Sales | # of stores | Sales | |
| Same store sales | 29 | $7,227,891 | 29 | $6,941,017 |
| Closed store | -- | -- | -- | -- |
| National account group | 221,727 | 230,976 | ||
| Total Sales – Wholesale Leathercraft | 29 | $7,449,618 | 29 | $7,171,993 |
| Year Ended 12/31/13 | Year Ended 12/31/12 | |||
| # of stores | Sales | # of stores | Sales | |
| Same store sales | 29 | $26,125,015 | 29 | $25,173,354 |
| Closed store | -- | -- | -- | -- |
| National account group | 1,259,599 | 1,676,648 | ||
| Total Sales – Wholesale Leathercraft | 29 | $27,384,614 | 29 | $26,850,002 |
| Retail Leathercraft | Quarter Ended 12/31/13 | Quarter Ended 12/31/12 | ||
| # of stores | Sales | # of stores | Sales | |
| Same store sales | 75 | $12,684,246 | 75 | $12,261,743 |
| New store sales | 4 | 218,098 | 1 | 67,075 |
| Closed store sales | 2 | 162,971 | 2 | 193,864 |
| Total Sales – Retail Leathercraft | 79 | $13,065,315 | 76 | $12,522,682 |
| Year Ended 12/31/13 | Year Ended 12/31/12 | |||
| # of stores | Sales | # of stores | Sales | |
| Same store sales | 75 | $45,768,643 | 75 | $41,888,874 |
| New store sales | 4 | 584,810 | 1 | 67,075 |
| Closed store sales | 2 | 642,449 | 2 | 660,597 |
| Total Sales – Retail Leathercraft | 79 | $46,995,902 | 76 | $42,616,546 |
| International Leathercraft | Quarter Ended 12/31/13 | Quarter Ended 12/31/12 | ||
| # of stores | Sales | # of stores | Sales | |
| Same store sales | 3 | $1,034,208 | 3 | $943,888 |
| New store sales | -- | -- | -- | -- |
| Total Sales – Intl Leathercraft | 3 | $1,034,208 | 3 | $943,888 |
| Year Ended 12/31/13 | Year Ended 12/31/12 | |||
| # of stores | Sales | # of stores | Sales | |
| Same store sales | 3 | $3,904,069 | 3 | $3,254,076 |
| New store sales | -- | -- | -- | -- |
| Total Sales – Intl Leathercraft | 3 | $3,904,069 | 3 | $3,254,076 |
| TANDY LEATHER FACTORY, INC. | ||||
| CONSOLIDATED STATEMENTS OF INCOME | ||||
| FOR THE THREE AND TWELVE MONTHS ENDED DECEMBER 31, 2013 AND 2012 | ||||
| Three Months | Twelve Months | |||
| 2013 | 2012 | 2013 | 2012 | |
| (unaudited) | (unaudited) | |||
| NET SALES | $21,549,141 | $20,638,563 | $78,284,585 | $72,720,624 |
| COST OF SALES | 7,773,010 | 7,443,494 | 28,956,561 | 26,814,950 |
| Gross Profit | 13,776,131 | 13,195,069 | 49,328,024 | 45,905,674 |
| OPERATING EXPENSES | 9,881,618 | 9,714,868 | 38,061,234 | 36,761,669 |
| INCOME FROM OPERATIONS | 3,894,513 | 3,480,201 | 11,266,790 | 9,144,005 |
| Interest expense | 48,104 | 64,683 | 206,763 | 240,934 |
| Other, net | (21,932) | 17,212 | (160,732) | (42,574) |
| Total other expense | 26,172 | 81,895 | 46,031 | 198,360 |
| INCOME BEFORE INCOME TAXES | 3,868,341 | 3,398,306 | 11,220,759 | 8,945,645 |
| PROVISION FOR INCOME TAXES | 1,380,130 | 1,196,750 | 3,955,042 | 3,349,575 |
| NET INCOME | $2,488,211 | $2,201,556 | $7,265,717 | $5,596,070 |
| NET INCOME FROM CONTINUING OPERATIONS PER COMMON SHARE: | ||||
| Basic | $0.24 | $0.22 | $0.71 | $0.55 |
| Diluted | $0.24 | $0.22 | $0.71 | $0.55 |
| NET INCOME PER COMMON SHARE: | ||||
| Basic | $0.24 | $0.22 | $0.71 | $0.55 |
| Diluted | $0.24 | $0.22 | $0.71 | $0.55 |
| Weighted Average Number of Shares Outstanding: | ||||
| Basic | 10,198,733 | 10,159,877 | 10,176,492 | 10,157,395 |
| Diluted | 10,233,009 | 10,178,759 | 10,216,438 | 10,175,346 |
| TANDY LEATHER FACTORY, INC | |||
| CONSOLIDATED BALANCE SHEETS | |||
| 12/31/13 | 12/31/12 | ||
| (unaudited) | |||
| ASSETS | |||
| CURRENT ASSETS: | |||
| Cash | $11,082,679 | $7,705,182 | |
| Accounts receivable-trade, net of allowance for doubtful accounts of $1,000 and 112,000 in 2013 and 2012, respectively | 762,405 | 822,772 | |
| Inventory | 26,300,830 | 25,862,784 | |
| Deferred income taxes | 309,533 | 349,478 | |
| Other current assets | 1,609,644 | 776,463 | |
| 478,593 | 153,450 | ||
| Total current assets | 40,543,684 | 35,670,129 | |
| PROPERTY AND EQUIPMENT, at cost | 20,290,990 | 17,574,895 | |
| Less accumulated depreciation and amortization | (5,863,280) | (5,630,305) | |
| 14,427,710 | 11,944,590 | ||
| GOODWILL | 981,985 | 990,725 | |
| OTHER INTANGIBLES, net of accumulated amortization of $622,000 and $582,000 in 2013 and 2012, respectively | 103,228 | 145,533 | |
| OTHER assets | 341,959 | 336,695 | |
| $56,398,566 | $49,087,672 | ||
| LIABILITIES AND STOCKHOLDERS' EQUITY | |||
| CURRENT LIABILITIES: | |||
| Accounts payable-trade | $1,884,637 | $1,612,627 | |
| Accrued expenses and other liabilities | 5,808,882 | 5,928,798 | |
| Income taxes payable | 272,198 | 113,705 | |
| Current maturities of long-term debt | 202,500 | 202,500 | |
| Total current liabilities | 8,168,217 | 7,857,630 | |
| DEFERRED INCOME TAXES | 1,212,557 | 806,525 | |
| LONG-TERM DEBT, net of current maturities | 2,396,250 | 2,902,500 | |
| 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, 11,192,356 and 11,156,065 shares issued at 2013 and 2012, 10,18,733 and 10,162,442 outstanding at 2013 and 2012, respectively | 26,862 | 26,775 | |
| Paid-in capital | 5,892,907 | 5,767,508 | |
| Retained earnings | 41,507,592 | 34,241,875 | |
| Treasury stock at cost (993,623 shares at 2013 and 2012) | (2,894,068) | (2,894,068) | |
| Accumulated other comprehensive income | 88,249 | 378,927 | |
| Total stockholders' equity | 44,621,542 | 37,521,017 | |
| $56,398,566 | $49,087,672 | ||
| TANDY LEATHER FACTORY, INC. | ||
| CONSOLIDATED STATEMENTS OF CASH FLOWS | ||
| FOR THE TWELVE MONTHS ENDED DECEMBER 31, 2013 AND 2012 | ||
| 2013 | 2012 | |
| (unaudited) | ||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||
| Net income | $7,265,717 | $5,596,070 |
| Adjustments to reconcile net income to net cash provided by operating activities -- | ||
| Depreciation and amortization | 1,194,612 | 1,068,226 |
| Loss on disposal or abandonment of assets | 109,222 | 21,092 |
| Non-cash stock-based compensation | 11,686 | 10,000 |
| Deferred income taxes | 445,977 | (120,531) |
| Other | (261,908) | (15,227) |
| Net changes in assets and liabilities, net of effect of business acquisitions: | ||
| Accounts receivable-trade, net | 60,367 | 505,807 |
| Inventory | (438,046) | (5,922,533) |
| Income taxes | 158,493 | (525,192) |
| Prepaid expenses | (833,181) | (36,728) |
| Other current assets | (325,143) | 55,274 |
| Accounts payable-trade | 272,010 | (10,070) |
| Accrued expenses and other liabilities | (119,916) | 1,287,607 |
| Total adjustments | 274,173 | (3,682,275) |
| Net cash provided by operating activities | 7,539,890 | 1,913,795 |
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||
| Purchase of property and equipment | (3,770,022) | (2,686,221) |
| Purchases of certificates of deposit | -- | -- |
| Proceeds from sales or maturities of certificates of deposit | -- | 423,893 |
| Proceeds from sale of assets | 5,343 | 1,230 |
| Decrease (increase) in other assets | (5,264) | 4,545 |
| Net cash (used in) provided by investing activities | (3,769,943) | (2,256,553) |
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||
| Payments on notes payable and long-term debt | (506,250) | (202,500) |
| Payment of dividend | -- | (2,536,131) |
| Proceeds from issuance of common stock and warrants | 113,800 | 20,980 |
| Net cash used in financing activities | (392,450) | (2,717,651) |
| NET (DECREASE) INCREASE IN CASH | 3,377,497 | (3,060,409) |
| CASH, beginning of period | 7,705,182 | 10,765,591 |
| CASH, end of period | $11,082,679 | $7,705,182 |
| SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: | ||
| Interest paid during the period | $206,763 | $240,934 |
| Income tax paid during the period, net of (refunds) | 3,348,676 | 4,004,510 |
Shannon L. Greene, Tandy Leather Factory, Inc. (817) 872-3200 or Mark Gilbert, Magellan Fin, LLC (317) 867-2839 or
