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): February
21, 2008
|
Tandy
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
2.02. Results of Operations and Financial Condition
Tandy
Leather Factory, Inc. on February 21, 2008 issued a press release regarding
its
financial results for the quarter and year ended December 31, 2007. A copy
of
the press release is attached as Exhibit 99.1.
The
information in this report and the exhibit attached hereto shall not be deemed
“filed” for purposes of Section 18 of the Securities Exchange Act of 1934, nor
shall they be deemed incorporated by reference in any filing with the Securities
and Exchange Commission under the Securities Exchange Act of 1934 or the
Securities Act of 1933, except as shall be expressly set forth by specific
reference in such filing.
Item
9.01. Financial Statements and Exhibits
| (a) |
Financial
statements of businesses acquired.
|
Not
applicable.
| (b) |
Pro
forma financial information.
|
Not
applicable.
| (c) |
Exhibits.
|
No. Exhibit
99.1 Press
release dated February 21, 2008
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.
TANDY
LEATHER
FACTORY, INC.
|
Date:
February 21, 2008
|
By:
/s/
Ron Morgan
|
|
Ron
Morgan, Chief Executive Officer and
President
|
EXHIBIT
99.1
FOR
IMMEDIATE RELEASE FEBRUARY
21, 2008
TANDY
LEATHER FACTORY REPORTS 2007 FINANCIAL RESULTS -
MEETS
2007 EARNINGS GUIDANCE OF 28 CENTS PER SHARE
FORT
WORTH, TEXAS - Tandy Leather Factory, Inc. (AMEX: TLF) today reported financial
results for the fourth quarter and year ended December 31, 2007. Consolidated
net income for the quarter was $1.2 million compared to consolidated net income
of $1.4 million for the fourth quarter of 2006. Fully diluted earnings per
share
for the quarter were $0.11, compared to $0.13 for the same quarter of the
previous year. Total sales for the quarter ended December 31, 2007 decreased
1%
to $14.6 million from $14.8 million for the fourth quarter of 2006. Consolidated
sales for the year ended December 31, 2007 were $55.3 million, virtually the
same as 2006 sales of $55.2 million. Consolidated net income for 2007 was $3.1
million or $0.28 per fully-diluted share versus $4.8 million or $0.43 per
fully-diluted share for 2006.
Sales
in
the Retail Leathercraft division for the fourth quarter of 2007 increased
$248,000 over the previous year's fourth quarter, representing a 4% improvement.
Seventy-two Tandy Leather retail stores comprised Retail Leathercraft’s
operations on December 31, 2007, compared to sixty-two retail stores a year
earlier. Ten new stores were opened in 2007 between January and October. For
2007, Retail Leathercraft’s sales increased $2.1 million, or 9%, over 2006.
Fourth
quarter sales for the Wholesale Leathercraft division decreased $319,000 over
the same quarter of 2006, a 4% reduction. Same store sales decreased $500,000,
or 7%, while national account sales were up $20,000, or 2%. Mid-Continent
Leather Sales added sales of $166,000 in the fourth quarter. For the year,
Wholesale Leathercraft’s sales were down $1.1 million, or 4%. Same store sales
decreased $1.2 million, or 5%, while sales to national accounts were down
$564,000, or 13%, for the year. Mid-Continent Leather Sales added sales of
$720,000 for the year.
Consolidated
gross profit margin for the fourth quarter was 57.8%, a decline from 58.8%
for
the fourth quarter of 2006. For 2007, consolidated gross profit margin was
57.3%, equal to that of the previous year's gross profit margin. Consolidated
operating expenses for the fourth quarter of 2007 were 45.8% of sales,
increasing from 44.9% for the same quarter of 2006. Operating expenses totaled
49.1% of sales for 2007, increasing from 44.5% for 2006.
Ron
Morgan, Chief Executive Officer and President, commented, "As are many
retailers, we are glad to have 2007 behind us and are looking forward to the
challenges that will be part of 2008. We made great strides in containing our
operating expenses in the fourth quarter - up approximately ½ of one percent
compared to the fourth quarter of 2006. Considering we have ten more stores
now
than we had then, I think the minimal increase in operating expenses is even
more of an accomplishment than it first appears. As a result, we are reiterating
our 2008 guidance of $56 million in revenue and 28 cents in fully-diluted EPS.”
Shannon
Greene, Chief Financial Officer and Treasurer, added, “While 2007 was not a
great year for us, there are some achievements worth mentioning: We met our
2007
earnings guidance of 28 cents per share. 2007 was our eleventh consecutive
year
of operating profitability. We ended the year with more cash in the bank than
we
started with and our cash balance grew by more than 80% in the fourth quarter.
Our inventory grew by only 2% from the end of 2006 to the end of 2007 and
decreased by 15% in the fourth quarter. If you eliminate the inventory in the
ten new stores we opened this year, our inventory would be down by 2% compared
to the end of 2006. ”
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,
72
Tandy Leather retail stores, located in 32 states and 6 Canadian provinces,
and
Mid-Continent Leather Sales, one store located in Oklahoma. Its common stock
trades on the American Stock Exchange with the symbol "TLF".
|
Contact:
|
Shannon
L Greene
|
Tandy
Leather Factory, Inc.
|
817/496-4414
or sgreene@tandyleather.com
|
|
Mark
Gilbert
|
Magellan
Fin, LLC
|
(317)
867-2839 or
MGilbert@MagellanFin.com
|
This
news release may contain forward-looking statements. All forward-looking
statements made here or in other news releases issued by Tandy Leather Factory,
Inc. 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 Tandy 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.
Selected
financial data:
|
Quarter
Ended 12/31/07
|
Quarter
Ended 12/31/06
|
||||||
|
Sales
|
Operating
Income
|
Sales
|
Operating
Income
|
||||
|
Wholesale
Leathercraft
|
$7498,855
|
$1,036,454
|
$7,817,851
|
$1,138,583
|
|||
|
Retail
Leathercraft
|
6,910,136
|
665,828
|
6,661,625
|
986,967
|
|||
|
Other
|
216,886
|
44,311
|
353,221
|
(62,347)
|
|||
|
Total
Operations
|
$14,625,877
|
$1,746,593
|
$14,832,697
|
$2,063,203
|
|||
|
Year
Ended 12/31/07
|
Year
Ended 12/31/06
|
||||||
|
Sales
|
Operating
Income
|
Sales
|
Operating
Income
|
||||
|
Wholesale
Leathercraft
|
$29,555,978
|
$2,826,710
|
$30,697,970
|
4,814,239
|
|||
|
Retail
Leathercraft
|
24,663,751
|
1,544,320
|
22,520,461
|
2,310,073
|
|||
|
Other
|
1,097,27
|
139,971
|
1,980,590
|
(56,598)
|
|||
|
Total
Operations
|
$55,317,002
|
$4,511,001
|
$55,199,021
|
$7,067,714
|
|||
|
Wholesale
Leathercraft
|
Quarter
Ended 12/31/07
|
Quarter
Ended 12/31/06
|
||||
|
#
of stores
|
Sales
|
#
of stores
|
Sales
|
|||
|
Same
store sales
|
29
|
$6,403,575
|
29
|
$6,909,305
|
||
|
New
store sales
|
1
|
166,190
|
-
|
-
|
||
|
National
account group
|
929,090
|
908,546
|
||||
|
Total
Sales - Wholesale Leathercraft
|
$7,498,855
|
$7,817,851
|
||||
|
Wholesale
Leathercraft
|
Year
Ended 12/31/07
|
Year
Ended 12/31/06
|
||||
|
#
of stores
|
Sales
|
#
of stores
|
Sales
|
|||
|
Leather
Factory stores
|
29
|
$25,133,477
|
29
|
$26,431,133
|
||
|
New
store sales
|
1
|
719,641
|
-
|
-
|
||
|
National
account group
|
3,702,860
|
4,266,837
|
||||
|
Total
Sales - Wholesale Leathercraft
|
$29,555,978
|
$30,697,970
|
||||
|
Retail
Leathercraft
|
Quarter
Ended 12/31/07
|
Quarter
Ended 12/31/06
|
|||
|
#
of stores
|
Sales
|
#
of stores
|
Sales
|
||
|
Same
store sales
|
62
|
$6,337,241
|
62
|
$6,661,625
|
|
|
New
store sales
|
10
|
572,895
|
-
|
-
|
|
|
Total
Sales - Retail Leathercraft
|
72
|
$6,910,136
|
62
|
$6,661,625
|
|
|
Retail
Leathercraft
|
Year
Ended 12/31/07
|
Year
Ended 12/31/06
|
|||
|
#
of stores
|
Sales
|
#
of stores
|
Sales
|
||
|
Same
store sales
|
52
|
$20,896,677
|
52
|
$20,805,686
|
|
|
New
store sales
|
20
|
3,767,074
|
10
|
1,714,775
|
|
|
Total
Sales - Retail Leathercraft
|
72
|
$24,663,751
|
62
|
$22,520,461
|
|
TANDY
LEATHER FACTORY, INC.
CONSOLIDATED
STATEMENTS OF INCOME
FOR
THE THREE AND TWELVE MONTHS ENDED DECEMBER 31, 2007 AND
2006
|
Three
Months
|
Twelve
Months
|
||||
|
2007
(unaudited)
|
2006
|
2007
(unaudited)
|
2006
|
||
|
NET
SALES
|
$14,625,877
|
$14,832,697
|
$55,317,002
|
$55,199,021
|
|
|
COST
OF SALES
|
6,178,730
|
6,107,775
|
23,644,599
|
23,566,251
|
|
|
Gross
Profit
|
8,447,147
|
8,724,922
|
31,672,403
|
31,632,770
|
|
|
OPERATING
EXPENSES
|
6,700,554
|
6,661,719
|
27,161,402
|
24,565,056
|
|
|
INCOME
FROM OPERATIONS
|
1,746,593
|
2,063,203
|
4,511,001
|
7,067,714
|
|
|
Interest
expense
|
71,715
|
-
|
122,209
|
-
|
|
|
Other,
net
|
(89,868)
|
(13,440)
|
(439,040)
|
(98,391)
|
|
|
Total
other expense
|
(18,153)
|
(13,440)
|
(316,831)
|
(98,391)
|
|
|
INCOME
BEFORE INCOME TAXES
|
1,764,746
|
2,076,643
|
4,827,832
|
7,166,105
|
|
|
PROVISION
FOR INCOME TAXES
|
591,263
|
668,751
|
1,739,701
|
2,389,039
|
|
|
NET
INCOME
|
$1,173,482
|
$1,407,892
|
$3,088,131
|
$4,777,066
|
|
|
NET
INCOME PER COMMON SHARE - BASIC
|
$0.11
|
$0.13
|
$0.28
|
$0.44
|
|
|
NET
INCOME PER COMMON SHARE - DILUTED
|
$0.11
|
$0.13
|
$0.28
|
$0.43
|
|
|
Weighted
Average Number of Shares Outstanding:
|
|||||
|
Basic
|
10,974,222
|
10,862,496
|
10,951,481
|
10,807,316
|
|
|
Diluted
|
11,160,034
|
11,137,095
|
11,157,775
|
11,113,855
|
|
TANDY
LEATHER FACTORY, INC.
CONSOLIDATED
BALANCE SHEETS
|
12/31/07
(unaudited)
|
12/31/06
|
|
|
Cash
|
$6,810,396
|
$6,739,891
|
|
Accounts
receivable, net of allowance for doubtful accounts
|
2,538,816
|
2,599,279
|
|
Inventory
|
17,473,352
|
17,169,358
|
|
Deferred
income taxes
|
256,938
|
266,018
|
|
Other
current assets
|
1,481,004
|
1,089,258
|
|
Total
current assets
|
28,560,505
|
27,863,804
|
|
Property
and equipment, net
|
6,620,644
|
1,876,605
|
|
Goodwill
and other intangibles, net
|
1,374,671
|
1,106,815
|
|
Other
assets
|
1,095,686
|
1,069,411
|
|
$37,651,506
|
$31,916,635
|
|
|
Accounts
payable
|
$1,497,564
|
$1,776,646
|
|
Accrued
expenses and other liabilities
|
2,072,640
|
3,424,010
|
|
Income
taxes payable
|
67,150
|
59,392
|
|
Notes
payable and current maturities of long-term debt
|
151,875
|
111,723
|
|
Total
current liabilities
|
3,789,229
|
5,371,771
|
|
Deferred
income taxes
|
148,648
|
221,621
|
|
Notes
payable and long-term debt, net of current maturities
|
3,898,125
|
-
|
|
Total
liabilities
|
7,836,002
|
5,593,392
|
|
Common
stock
|
26,359
|
26,124
|
|
Paid-in
capital
|
5,419,477
|
5,292,591
|
|
Treasury
stock (5,859 shares)
|
(25,487)
|
(25,487)
|
|
Retained
earnings
|
24,037,672
|
20,949,540
|
|
Accumulated
other comprehensive loss
|
357,483
|
80,475
|
|
Total
Stockholders' Equity
|
29,815,504
|
26,323,243
|
|
$37,651,506
|
$31,916,635
|
TANDY
LEATHER FACTORY, INC.
CONSOLIDATED
STATEMENTS OF CASH FLOWS
FOR
THE TWELVE MONTHS ENDED DECEMBER 31, 2007 AND 2006
|
2007
(unaudited)
|
2006
|
||
|
CASH
FLOWS FROM OPERATING ACTIVITIES:
|
|||
|
Net
income
|
$3,088,131
|
$4,777,066
|
|
|
Adjustments
to reconcile net income to net cash provided by operating
activities:
|
|||
|
Depreciation
& amortization
|
634,291
|
392,915
|
|
|
(Gain)
loss on disposal of assets
|
50,114
|
(3,750)
|
|
|
Non-cash
stock-based compensation
|
19,340
|
101,080
|
|
|
Deferred
income taxes
|
(63,893)
|
23,222
|
|
|
Other
|
241,1822
|
(15,696)
|
|
|
Net
changes in assets and liabilities:
|
|||
|
Accounts
receivable-trade, net
|
116,815
|
(420,431)
|
|
|
Inventory
|
46,228
|
(1,500,176)
|
|
|
Income
taxes
|
7,758
|
(140,189)
|
|
|
Other
current assets
|
(407,729)
|
(731,200)
|
|
|
Accounts
payable
|
(327,726)
|
556,226
|
|
|
Accrued
expenses and other liabilities
|
(1,351,369)
|
873,437
|
|
|
Total
adjustments
|
(1,034,990)
|
(864,562)
|
|
|
Net
cash provided by operating activities
|
2,053,141
|
3,912,504
|
|
|
CASH
FLOWS FROM INVESTING ACTIVITIES:
|
|||
|
Purchase
of property and equipment
|
(5,384,698)
|
(471,753)
|
|
|
Payments
in connection with businesses acquired
|
(650,000)
|
-
|
|
|
Proceeds
from sale of assets
|
32,281
|
3,750
|
|
|
Increase
in other assets
|
(26,276)
|
10,320
|
|
|
Net
cash used in investing activities
|
(6,028,693)
|
(457,683)
|
|
|
CASH
FLOWS FROM FINANCING ACTIVITIES:
|
|||
|
Net
increase (decrease) in revolving credit loans
|
4,050,000
|
-
|
|
|
Payments
on notes payable and long-term debt
|
(111,723)
|
(134,067)
|
|
|
Payments
received on notes secured by common stock
|
-
|
-
|
|
|
Repurchase
of common stock (treasury stock)
|
-
|
-
|
|
|
Proceeds
from issuance of common stock
|
107,780
|
203,410
|
|
|
Net
cash provided by financing activities
|
4,046,057
|
69,343
|
|
|
NET
CHANGE IN CASH
|
70,505
|
3,524,164
|
|
|
CASH,
beginning of period
|
6,739,891
|
3,215,727
|
|
|
CASH,
end of period
|
$6,810,396
|
$6,739,891
|
|
|
SUPPLEMENTAL
DISCLOSURES OF CASH FLOW INFORMATION:
|
|||
|
Interest
paid during the period
|
122,209
|
-
|
|
|
Income
taxes paid during the period, net of (refunds)
|
1,830,688
|
2,282,113
|
|
|
NON-CASH
INVESTING ACTIVITIES:
|
|||
|
Equipment
acquired under capital lease financing arrangements
|
-
|
-
|