SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.
FORM 8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): April 29, 2004
The Leather Factory, Inc.
(Exact Name of Registrant as Specified in Its Charter)
Delaware
(State or Other Jurisdiction of Incorporation)
1-12368 75-2543540
(Commission File Number) (IRS Employer Identification Number)
3847 East Loop 820 South, Fort Worth, Texas 76119
(Address of Principal Executive Offices) (Zip Code)
(817) 496-4414
(Registrant's Telephone Number, Including Area Code)
_____________________________________________________________________________
(Former Name or Former Address, if Changed Since Last Report)
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits.
99.1 Press release dated April 29, 2004 furnished pursuant to Item 12.
ITEM 12. RESULTS OF OPERATIONS AND FINANCIAL CONDITION
The Registrant is furnishing the press release attached as Exhibit 99.1
announcing the Registrant's first quarter 2004 financial results. This press
release was issued on April 29, 2004.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
THE LEATHER FACTORY, INC.
Date: April 29, 2004 BY: /s/ Wray Thompson
Wray Thompson, Chairman of the Board
and Chief Executive Officer
EXHIBIT 99.1
FOR IMMEDIATE RELEASE APRIL 29, 2004
THE LEATHER FACTORY REPORTS 1ST QUARTER 2004 RESULTS
NET INCOME UP 25% ON RECORD REVENUES
FORT WORTH, TEXAS - The Leather Factory, Inc. (AMEX: TLF) today reported
financial results for the first quarter of 2004. Net income for the quarter
ended March 31, 2004 was $971,000, a 25% increase from $775,000 for the first
quarter of 2003. Fully-diluted earnings per share for the quarter increased to
$0.09 from $0.07 in the first quarter of last year. Total sales for the first
quarter were $12.2 million, up 15% from $10.6 million in the same quarter last
year.
Tandy Leather sales increased $1.3 million in the first quarter, a 70%
improvement over last year's first quarter. Twenty-nine stores comprised the
Tandy Leather operations on March 31, 2004, compared to nineteen retail stores a
year ago. Three new stores opened in the first quarter of 2004. First quarter
sales for the Leather Factory wholesale centers increased $242,000 or 3% over
the same quarter last year, in line with anticipated growth of 2-4% annually.
Roberts, Cushman's first quarter sales increased $77,000 or 15% over the same
period a year ago.
Consolidated gross profit margins for the quarter improved to 55.2% compared to
53.5% a year ago. Operating expenses rose $748,000, less than 0.5% of sales.
Increases in advertising and marketing initiatives plus expenses (rent,
personnel, etc.) associated with the new Tandy Leather stores contributed to the
additional costs.
Wray Thompson, Chairman and Chief Executive Officer, commented, "All three
operating segments produced positive results in the first quarter. We were on
target with our goal of rapid profitability for new Tandy Leather stores, as two
of the three new stores that were opened this quarter recorded profits in March.
We made some modest progress in improving our operating margins and will
continue those efforts with the goal of improving operating leverage as we
continue Tandy Leather's expansion."
The Leather Factory, Inc., (http://www.leatherfactory.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. It also manufactures and distributes decorative hat trims, leather lacing
and kits. The Company distributes its products as The Leather Factory through
its wholesale centers and as Tandy Leather Company through its retail stores
(http://www.tandyleather.com). Its common stock trades on the American Stock
Exchange with the symbol "TLF".
Contact:Wray Thompson,CEO, The Leather Factory, Inc (817) 496-4414
Shannon Greene,CFO, The Leather Factory, Inc sgreene@leatherfactory.com
This news release may contain forward-looking statements. All forward-looking
statements made here or in other news releases issued by The Leather Factory,
Inc. (TLF) are based on current expectations as of the date of the release.
These forward-looking statements involve risks and uncertainties that could
cause the results of The Leather Factory, Inc. to differ materially from
management's current expectations. Many of these risks and uncertainties are
detailed from time to time in TLF's reports filed with the Securities and
Exchange Commission, including its most recent annual report on Form 10-K and
the most recent quarterly report on Form 10-Q. Investors are reminded that past
performance may not be predictive of future results.
THE LEATHER FACTORY, INC.
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
FOR THE THREE MONTHS ENDED MARCH 31, 2004 AND 2003
Three Months
2004 2003
----------- -----------
NET SALES $12,180,877 $10,560,085
COST OF SALES 5,455,964 4,914,581
----------- -----------
Gross Profit 6,724,913 5,645,504
OPERATING EXPENSES 5,277,778 4,529,832
----------- -----------
INCOME FROM OPERATIONS 1,447,135 1,115,672
Interest expense 13,638 63,352
Other, net 1,737 (30,818)
----------- -----------
Total other expense 15,375 32,534
----------- -----------
INCOME BEFORE INCOME TAXES 1,431,760 1,083,138
PROVISION FOR INCOME TAXES 460,794 308,620
----------- -----------
NET INCOME $970,966 $774,518
=========== ===========
NET INCOME PER COMMON SHARE - BASIC $0.09 $0.08
=========== ===========
NET INCOME PER COMMON SHARE-DILUTED $0.09 $0.07
=========== ===========
WEIGHTED AVG NUMBER OF SHARES OUTSTANDING:
Basic 10,506,995 10,177,433
Diluted 11,011,122 10,793,464
THE LEATHER FACTORY, INC.
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
3/31/04 12/31/03
----------- ------------
Cash $1,678,607 $1,728,344
Accounts receivable, net of allowance for doubtful accounts 3,055,545 1,828,738
Inventory 11,392,312 11,079,893
Prepaid income taxes - 206,023
Deferred income taxes 161,674 134,312
Other current assets 1,054,036 702,236
----------- ------------
TOTAL CURRENT ASSETS 17,342,174 15,679,546
----------- ------------
Property and equipment, net 1,904,646 1,905,893
Goodwill and other intangibles, net 1,170,587 1,136,784
Other assets 322,107 336,183
----------- ------------
$20,739,514 $19,058,406
=========== ===========
Accounts payable $2,355,092 $1,545,079
Accrued expenses and other liabilities 1,113,237 1,000,427
Income taxes payable 229,631 -
Notes payable and current maturities of long-term debt - 1,134
----------- -----------
TOTAL CURRENT LIABILITIES 3,697,960 2,546,640
----------- -----------
Deferred income taxes 216,877 209,289
Notes payable and long-term debt, net of current maturities 1,267,984 1,792,984
----------- -----------
Total Liabilities 5,182,821 4,548,913
Common stock 25,261 25,171
Paid-in capital 4,755,208 4,673,158
Retained earnings 10,775,685 9,804,719
Notes receivable secured by common stock (15,000) (20,000)
Accumulated other comprehensive loss 15,539 26,445
----------- -----------
Total Stockholders' Equity 15,556,693 14,509,493
----------- -----------
$20,739,514 $19,058,406
=========== ===========