Attached files
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| 8-K - FORM 8-K - TANDY LEATHER FACTORY INC | form8-k.htm |
EXHIBIT 99.1
FOR IMMEDIATE RELEASE MARCH 10, 2015
TANDY LEATHER FACTORY REPORTS 2014 EARNINGS UP 6% OVER 2013
PROVIDES SALES AND EARNINGS GUIDANCE FOR 2015
FORT WORTH, TEXAS – Tandy Leather Factory, Inc. (NASDAQ: TLF) today reported financial results for the fourth quarter and year ended December 31, 2014. A conference call will be conducted by senior management at 12:30 p.m. Eastern Time on March 10, 2015. Dial-in details have been provided previously.
Consolidated net income for the quarter was $2.5 million, matching consolidated net income for the fourth quarter of 2013. Fully diluted earnings per share for the quarter were $0.24, the same as that for the same quarter of the previous year. Total sales for the quarter ended December 31, 2014 increased 13% to $24.5 million from $21.5 million for the fourth quarter of 2013. Consolidated sales for the year ended December 31, 2014 were $83.4 million, up 7% from 2013 sales of $78.3 million. Consolidated net income for 2014 was $7.7 million or $0.75 per fully-diluted share versus $7.3 million or $0.71 per fully-diluted share for 2013.
Sales in the Retail Leathercraft division for the fourth quarter of 2014 increased $2.5 million over the previous year's fourth quarter, representing a 19% improvement. Same stores sales increased 16% over the fourth quarter of 2013. Eighty-two Tandy Leather retail stores comprised Retail Leathercraft’s operations on December 31, 2014, compared to seventy-nine retail stores a year earlier. For the year, Retail Leathercraft’s sales increased $4.8 million, or 10%, over 2013. Same store sales for the year increased 8% compared to 2013.
Fourth quarter sales for the Wholesale Leathercraft division increased $260,000 over the same quarter of 2013, a 3% improvement. Same store sales increased 8% while national account sales were down 100% for the quarter. Twenty-eight Leather Factory wholesale stores comprised Wholesale Leathercraft’s operations on December 31, 2014, compared to twenty-nine stores a year earlier. For the year, Wholesale Leathercraft’s sales were down $99,000, or 0.4%. 2014 same store sales increased 4% while sales to national accounts were down 72%. National Account sales ended in April 2014, and represented only 1% of the division’s sales in 2014 and 0.4% of total company sales.
International Leathercraft’s fourth quarter sales increased $148,000 over the same quarter of 2013, a 14% improvement. For the year, International Leathercraft’s sales increased 11% to $4.3 million from $3.9 million in 2013. 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, 2014 and 2013.
Consolidated gross profit margin for the fourth quarter was 59.1%, declining from 63.9% from 2013’s fourth quarter. For 2014, consolidated gross profit margin was 62.5%, declining slightly from the previous year's gross profit margin of 63.0%. Consolidated operating expenses for the fourth quarter of 2014 were 43.2% of sales, increasing $695,000 or 7.0% over the same quarter of 2013. Operating expenses totaled 48.1% of sales for 2014, increasing $2.1 million, or 5.5% over 2013.
Jon Thompson, Chief Executive Officer, commented, "We performed well in 2014, with strong sales and increased earnings over last year. We tried some new things this year – ramping up our inventory earlier in the year in anticipation of a strong fourth quarter, exceptional Black Friday offers, and a heavier investment in advertising and marketing. Overall, we believe everything worked. But we sacrificed some earnings as a result. In 2015, we hope to make some adjustments to continue the positive sales trend, but with less impact on gross profit margins and earnings.”
Shannon Greene, Chief Financial Officer and Treasurer, added, “We met our revenue and earnings guidance for 2014 and ended the year with a reasonable inventory level. We more than doubled our cash on hand in the 4th quarter, even after paying down $2.5 million on our line of credit in December. Looking forward into 2015, we paid off our line of credit in February, expect to open 2-3 new stores, and are analyzing our inventory investment and expense control goals in order to maximize earnings.”
Financial Outlook:
The following statements are based on TLF's current expectations as of March 10, 2015. 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 2015 in the US. Estimated consolidated net sales for 2015 will be in the range of $88-$89 million. EPS for 2015 are expected to be in the range of $0.79 to $0.80. Average shares outstanding, both basic and diluted, in 2015 are estimated to be approximately 10.2 million. The Company assumes an effective tax rate for the year between 35% and 36%.andy 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 28 Leather Factory stores, located in 18 states and 3 Canadian provinces, 82 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 shannon.greene@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 12/31/14
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Quarter Ended 12/31/13
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||||||
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Sales
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Oper Inc
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Sales
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Oper Inc
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||||
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Wholesale Leathercraft
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$7,709,704
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$1,720,505
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$7,449,618
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$1,987,197
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|||
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Retail Leathercraft
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15,579,134
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1,905,845
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13,065,315
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1,783,725
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|||
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International Leathercraft
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1,182,767
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151,812
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1,034,208
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123,591
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|||
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Total Operations
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$24,471,605
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$3,778,162
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$21,549,141
|
$3,894,513
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|||
|
Year Ended 12/31/14
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Year Ended 12/31/13
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||||||
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Sales
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Oper Inc
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Sales
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Oper Inc
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||||
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Wholesale Leathercraft
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$27,285,884
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$5,300,413
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$27,384,614
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$4,840,416
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|||
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Retail Leathercraft
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51,805,944
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6,077,345
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46,995,902
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6,026,731
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|||
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International Leathercraft
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4,339,084
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580,271
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3,904,069
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399,643
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|||
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Total Operations
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$83,430,912
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$11,958,029
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$78,284,585
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$11,266,790
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|||
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Wholesale Leathercraft
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Quarter Ended 12/31/14
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Quarter Ended 12/31/13
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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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28
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$7,674,739
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28
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$7,079,454
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||
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Closed store
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1
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34,965
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1
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148,437
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||
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National account group
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-
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-
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-
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221,727
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||
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Total Sales – Wholesale Leathercraft
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28
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$7,709,704
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28
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$7,449,618
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||
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Year Ended 12/31/14
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Year Ended 12/31/13
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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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28
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$26,533,991
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28
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$25,527,928
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||
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Closed store
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1
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403,244
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1
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597,087
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||
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National account group
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-
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348,649
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-
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1,259,599
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||
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Total Sales – Wholesale Leathercraft
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28
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$27,285,884
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28
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$27,384,614
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||
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Retail Leathercraft
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Quarter Ended 12/31/14
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Quarter Ended 12/31/13
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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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76
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$14,923,849
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76
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$12,835,313
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||
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New store sales
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6
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655,285
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3
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67,031
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||
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Closed store sales
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-
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-
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2
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162,971
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||
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Total Sales – Retail Leathercraft
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82
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$15,579,134
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79
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$13,065,315
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||
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Year Ended 12/31/14
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Year Ended 12/31/13
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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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76
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$50,009,918
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76
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$46,286,421
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||
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New store sales
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6
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1,796,026
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3
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67,032
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||
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Closed store sales
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-
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-
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2
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642,449
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||
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Total Sales – Retail Leathercraft
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82
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$51,805,944
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79
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$46,995,902
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||
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International Leathercraft
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Quarter Ended 12/31/14
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Quarter Ended 12/31/13
|
||||
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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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3
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$1,182,767
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3
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$1,034,208
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||
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New store sales
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-
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-
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-
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-
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||
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Total Sales – International Leathercraft
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3
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$1,182,767
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3
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$1,034,208
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||
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Year Ended 12/31/14
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Year Ended 12/31/13
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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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3
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$4,339,084
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3
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$3,904,069
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||
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New store sales
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-
|
-
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-
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-
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||
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Total Sales – International Leathercraft
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3
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$4,339,084
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3
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$3,904,069
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||
TANDY LEATHER FACTORY, INC.
CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE AND TWELVE MONTHS ENDED DECEMBER 31, 2014 AND 2013
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Three Months
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Twelve Months
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||||||
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2014
(unaudited)
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2013
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2014
(unaudited)
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2013
|
||||
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NET SALES
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$24,471,605
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$21,549,141
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$83,430,912
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$78,284,585
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|||
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COST OF SALES
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10,016,886
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7,773,010
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31,306,155
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28,956,561
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|||
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Gross Profit
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14,454,719
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13,776,131
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52,124,757
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49,328,024
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|||
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OPERATING EXPENSES
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10,576,557
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9,881,618
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40,166,728
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38,061,234
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|||
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INCOME FROM OPERATIONS
|
3,878,162
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3,894,513
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11,958,029
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11,266,790
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|||
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Interest expense
|
71,217
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48,104
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225,584
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206,763
|
|||
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Other, net
|
(30,962)
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(21,932)
|
(75,165)
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(160,732)
|
|||
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Total other expense
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40,255
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26,172
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150,419
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46,031
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|||
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INCOME BEFORE INCOME TAXES
|
3,837,907
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3,868,341
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11,807,610
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11,220,759
|
|||
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PROVISION FOR INCOME TAXES
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1,379,445
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1,380,130
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4,100,689
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3,955,042
|
|||
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NET INCOME
|
$2,458,462
|
$2,488,211
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$7,706,921
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$7,265,717
|
|||
|
|
|||||||
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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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$0.24
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$0.24
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$0.76
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$0.71
|
|||
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Diluted
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$0.24
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$0.24
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$0.75
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$0.71
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|||
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NET INCOME PER COMMON SHARE:
|
|||||||
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Basic
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$0.24
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$0.24
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$0.76
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$0.71
|
|||
|
Diluted
|
$0.24
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$0.24
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$0.75
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$0.71
|
|||
|
Weighted Average Number of Shares Outstanding:
|
|||||||
|
Basic
|
10,210,933
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10,198,733
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10,203,063
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10,176,492
|
|||
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Diluted
|
10,244,127
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10,233,009
|
10,241,121
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10,216,438
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|||
TANDY LEATHER FACTORY, INC.
CONSOLIDATED BALANCE SHEETS
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12/31/14
(unaudited)
|
12/31/13
|
||
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ASSETS
|
|||
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CURRENT ASSETS:
|
|||
|
Cash
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$10,636,530
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$11,082,679
|
|
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Accounts receivable-trade, net o fallowance for doubtful accounts of $400 and $1,000 in 2014 and 2013, respectively
|
625,054
|
762,405
|
|
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Inventory
|
32,875,492
|
26,300,830
|
|
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Prepaid income taxes
|
336,828
|
-
|
|
|
Deferred income taxes
|
371,491
|
309,533
|
|
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Prepaid expenses
|
1,348,652
|
1,609,644
|
|
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Other current assets
|
157,758
|
478,593
|
|
|
Total current assets
|
46,351,805
|
40,543,684
|
|
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PROPERTY AND EQUIPMENT, at cost
|
22,199,943
|
20,290,990
|
|
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Less accumulated depreciation and amortization
|
(7,037,665)
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(5,863,280)
|
|
|
15,162,278
|
14,427,710
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||
|
GOODWILL
|
971,786
|
981,985
|
|
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OTHER INTANGIBLES, net of accumulated amortization of $665,000 and $622,000 in 2014 and 2013, respectively
|
58,026
|
103,228
|
|
|
OTHER assets
|
329,979
|
341,959
|
|
|
$62,873,874
|
$56,398,566
|
||
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|||
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CURRENT LIABILITIES:
|
|||
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Accounts payable-trade
|
$1,255,218
|
$1,884,637
|
|
|
Accrued expenses and other liabilities
|
5,394,514
|
5,808,882
|
|
|
Income taxes payable
|
-
|
272,198
|
|
|
Current maturities of long-term debt
|
3,702,500
|
202,500
|
|
|
Total current liabilities
|
10,352,232
|
8,168,217
|
|
|
DEFERRED INCOME TAXES
|
1,458,005
|
1,212,557
|
|
|
LONG-TERM DEBT, net of current maturities
|
1,940,625
|
2,396,250
|
|
|
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,
|
|||
|
11,239,157 and 11,192,356 shares issued at 2014 and 2013, 10,245,534 and 10,198,733 outstanding at 2014 and 2013, respectively
|
26,984 | 26,862 | |
|
Paid-in capital
|
6,013,325
|
5,892,907
|
|
|
Retained earnings
|
46,664,829
|
41,507,592
|
|
|
Treasury stock at cost (993,623 shares at 2014 and 2013Se
|
(2,894,068)
|
(2,894,068)
|
|
|
Accumulated other comprehensive income
|
(688,058)
|
88,249
|
|
|
Total stockholders' equity
|
49,123,012
|
44,621,542
|
|
|
$62,873,874
|
$56,398,566
|
TANDY LEATHER FACTORY, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE TWELVE MONTHS ENDED DECEMBER 31, 2014 AND 2013
|
2014
(unaudited)
|
2013
|
|||||||
|
CASH FLOWS FROM OPERATING ACTIVITIES:
|
||||||||
|
Net income
|
$7,706,921
|
$7,265,717
|
||||||
|
Adjustments to reconcile net income to net cash provided by operating activities -
|
||||||||
|
Depreciation and amortization
|
1,436,624
|
1,194,612
|
||||||
|
Loss on disposal or abandonment of assets
|
18,820
|
109,222
|
||||||
|
Non-cash stock-based compensation
|
67,818
|
11,686
|
||||||
|
Deferred income taxes
|
183,490
|
445,977
|
||||||
|
Other
|
(727,665)
|
(261,908)
|
||||||
|
Net changes in assets and liabilities, net of effect of
|
||||||||
|
business acquisitions:
|
||||||||
|
Accounts receivable-trade, net
|
137,351
|
60,367
|
||||||
|
Inventory
|
(6,574,662)
|
(438,046)
|
||||||
|
Income taxes
|
(609,026)
|
158,493
|
||||||
|
Prepaid expenses
|
260,992
|
(833,181)
|
||||||
|
Other current assets
|
320,835
|
(325,143)
|
||||||
|
Accounts payable-trade
|
(629,419)
|
272,010
|
||||||
|
Accrued expenses and other liabilities
|
(414,368)
|
(119,916)
|
||||||
|
Total adjustments
|
(6,529,210)
|
274,173
|
||||||
|
Net cash provided by operating activities
|
1,177,711
|
7,539,890
|
||||||
|
CASH FLOWS FROM INVESTING ACTIVITIES:
|
||||||||
|
Purchase of property and equipment
|
(2,204,190)
|
(3,770,022)
|
||||||
|
Proceeds from sale of assets
|
20,936
|
5,343
|
||||||
|
Decrease (increase) in other assets
|
11,980
|
(5,264)
|
||||||
|
Net cash (used in) provided by investing activities
|
(2,171,274)
|
(3,769,943)
|
||||||
|
CASH FLOWS FROM FINANCING ACTIVITIES:
|
||||||||
|
Net increase in revolving credit loans
|
3,500,000
|
-
|
||||||
|
Payments on notes payable and long-term debt
|
(455,625)
|
(506,250)
|
||||||
|
Payment of dividend
|
(2,549,683)
|
-
|
||||||
|
Proceeds from issuance of common stock
|
52,722
|
113,800
|
||||||
|
Net cash provided by (used in) financing activities
|
547,414
|
(392,450)
|
||||||
|
NET (DECREASE) INCREASE IN CASH
|
(446,149)
|
3,377,497
|
||||||
|
CASH, beginning of period
|
11,082,679
|
7,705,182
|
||||||
|
CASH, end of period
|
$10,636,530
|
$11,082,679
|
||||||
|
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
|
||||||||
|
Interest paid during the period
|
$225,584
|
$206,763
|
||||||
|
Income tax paid during the period, net of (refunds)
|
4,604,087
|
3,348,676
|
||||||