Date of report (Date of earliest event reported:)
|
August 9, 2013
|
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)
|
1900 Southeast Loop 820, Fort Worth, Texas
|
76140
|
|
(Address of Principal Executive Offices)
|
(Zip Code)
|
(817) 872-3200
|
(Registrant’s Telephone Number, Including Area Code)
|
(Former Name or Former Address, if Changed Since Last Report)
|
(a)
|
Financial statements of businesses acquired.
|
(b)
|
Pro forma financial information.
|
(c)
|
Exhibits.
|
TANDY LEATHER FACTORY, INC.
|
|
Date: August 9, 2013
|
By: /s/ Jon Thompson
|
Jon Thompson, Chief Executive Officer and President
|
Contact:
|
Shannon L. Greene, Tandy Leather Factory, Inc.
|
(817) 872-3200 or sgreene@tandyleather.com
|
Mark Gilbert, Magellan Fin, LLC
|
(317) 867-2839 or MGilbert@MagellanFin.com
|
Quarter Ended 06/30/13
|
Quarter Ended 06/30/12
|
||||||
Sales
|
Operating
Income
|
Sales
|
Operating
Income
|
||||
Wholesale Leathercraft
|
$6,728,586
|
$883,533
|
$6,282,990
|
$1,103,311
|
|||
Retail Leathercraft
|
11,242,080
|
1,377,105
|
9,863,139
|
1,309,503
|
|||
International Leathercraft
|
1,002,347
|
85,426
|
758,125
|
51,958
|
|||
Total Operations
|
$18,973,013
|
$2,346,064
|
$16,904,254
|
$2,464,772
|
Six Months Ended 06/30/13
|
Six Months Ended 06/30/12
|
||||||
Sales
|
Operating
Income
|
Sales
|
Operating
Income
|
||||
Wholesale Leathercraft
|
$13,458,320
|
$1,896,498
|
$13,435,407
|
$2,336,163
|
|||
Retail Leathercraft
|
22,801,941
|
2,891,944
|
20,145,953
|
2,668,228
|
|||
International Leathercraft
|
1,950,579
|
178,482
|
1,499,972
|
14,556
|
|||
Total Operations
|
$38,210,840
|
$4,966,924
|
$35,081,332
|
$5,018,947
|
Wholesale Leathercraft
|
Quarter Ended 06/30/13
|
Quarter Ended 06/30/12
|
||||
# of stores
|
Sales
|
# of stores
|
Sales
|
|||
Same store sales
|
29
|
$6,347,666
|
29
|
$6,070,345
|
||
National account group
|
n/a
|
380,920
|
n/a
|
212,645
|
||
Total Sales – Wholesale Leathercraft
|
29
|
$6,728,586
|
29
|
$6,282,990
|
Wholesale Leathercraft
|
Six Months Ended 06/30/13
|
Six Months Ended 06/30/12
|
||||
# of stores
|
Sales
|
# of stores
|
Sales
|
|||
Same store sales
|
29
|
$12,791,987
|
29
|
$12,411,129
|
||
National account group
|
n/a
|
666,333
|
n/a
|
1,024,278
|
||
Total Sales – Wholesale Leathercraft
|
29
|
$13,458,320
|
29
|
$13,435,407
|
Retail Leathercraft
|
Quarter Ended 06/30/13
|
Quarter Ended 06/30/12
|
|||
# of stores
|
Sales
|
# of stores
|
Sales
|
||
Same store sales
|
77
|
$11,118,834
|
77
|
$9,863,139
|
|
New store sales
|
1
|
123,246
|
-
|
-
|
|
Total Sales – Retail Leathercraft
|
78
|
$11,242,080
|
77
|
$9,863,139
|
Retail Leathercraft
|
Six Months Ended 06/30/13
|
Six Months Ended 06/30/12
|
|||
# of stores
|
Sales
|
# of stores
|
Sales
|
||
Same store sales
|
77
|
$22,558,976
|
77
|
$20,145,953
|
|
New store sales
|
1
|
242,965
|
-
|
-
|
|
Total Sales – Retail Leathercraft
|
78
|
$22,801,941
|
77
|
$20,145,953
|
International Leathercraft
|
Quarter Ended 06/30/13
|
Quarter Ended 06/30/12
|
|||
# of stores
|
Sales
|
# of stores
|
Sales
|
||
Same store sales
|
3
|
$1,002,347
|
3
|
$758,125
|
|
New store sales
|
-
|
-
|
-
|
-
|
|
Total Sales – Intl Leathercraft
|
3
|
$1,002,347
|
3
|
$758,125
|
International Leathercraft
|
Six Months Ended 06/30/13
|
Six Months Ended 06/30/12
|
|||
# of stores
|
Sales
|
# of stores
|
Sales
|
||
Same store sales
|
3
|
$1,950,579
|
3
|
$1,499,972
|
|
New store sales
|
-
|
-
|
-
|
-
|
|
Total Sales – Intl Leathercraft
|
3
|
$1,950,579
|
3
|
$1,499,972
|
June 30,
2013
(unaudited)
|
December 31,
2012
(audited)
|
||||||||||||||||
ASSETS
|
|||||||||||||||||
CURRENT ASSETS:
|
|||||||||||||||||
Cash
|
$7,572,653
|
$7,705,182
|
|||||||||||||||
Accounts receivable-trade, net of allowance for doubtful accounts
|
|||||||||||||||||
of $84,000 and $112,000 in 2013 and 2012, respectively
|
1,138,223
|
822,772
|
|||||||||||||||
Inventory
|
27,498,022
|
25,862,784
|
|||||||||||||||
Deferred income taxes
|
341,938
|
349,478
|
|||||||||||||||
Prepaid expenses
|
1,141,740
|
776,463
|
|||||||||||||||
Other current assets
|
765,430
|
153,450
|
|||||||||||||||
Total current assets
|
38,458,006
|
35,670,129
|
|||||||||||||||
PROPERTY AND EQUIPMENT, at cost
|
18,598,208
|
17,574,895
|
|||||||||||||||
Less accumulated depreciation and amortization
|
(5,345,969)
|
(5,630,305)
|
|||||||||||||||
13,252,239
|
11,944,590
|
||||||||||||||||
GOODWILL
|
983,313
|
990,725
|
|||||||||||||||
OTHER INTANGIBLES, net of accumulated amortization of
|
|||||||||||||||||
$600,000 and $582,000 in 2013 and 2012, respectively
|
125,820
|
145,533
|
|||||||||||||||
Other assets
|
336,604
|
336,695
|
|||||||||||||||
$53,155,982
|
$49,087,672
|
||||||||||||||||
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|||||||||||||||||
CURRENT LIABILITIES:
|
|||||||||||||||||
Accounts payable-trade
|
$2,882,843
|
$1,612,627
|
|||||||||||||||
Accrued expenses and other liabilities
|
6,091,982
|
5,928,798
|
|||||||||||||||
Income taxes payable
|
138,189
|
113,705
|
|||||||||||||||
Current maturities of long-term debt
|
202,500
|
202,500
|
|||||||||||||||
Total current liabilities
|
9,315,514
|
7,857,630
|
|||||||||||||||
DEFERRED INCOME TAXES
|
956,084
|
806,525
|
|||||||||||||||
LONG-TERM DEBT, net of current maturities
|
2,497,500
|
2,902,500
|
|||||||||||||||
COMMITMENTS AND CONTINGENCIES
|
|||||||||||||||||
STOCKHOLDERS' EQUITY:
|
|||||||||||||||||
Preferred stock, $0.10 par value; 20,000,000 shares authorized;
|
|||||||||||||||||
none issued or outstanding; attributes to be determined on issuance
|
-
|
-
|
|||||||||||||||
Common stock, $0.0024 par value; 25,000,000 shares authorized;
|
|||||||||||||||||
11,165,356 and 11,156,065 shares issued at 2013 and 2012;
|
|||||||||||||||||
10,171,733 and 10,162,442 shares outstanding at 2013 and 2012
|
26,797
|
26,775
|
|||||||||||||||
Paid-in capital
|
5,779,172
|
5,767,508
|
|||||||||||||||
Retained earnings
|
37,457,549
|
34,241,875
|
|||||||||||||||
Treasury stock at cost (993,623 shares at 2013 and 2012)
|
(2,894,068)
|
(2,894,068)
|
|||||||||||||||
Accumulated other comprehensive income
|
17,434
|
378,927
|
|||||||||||||||
Total stockholders' equity
|
40,386,884
|
37,521,017
|
|||||||||||||||
$53,155,982
|
$49,087,672
|
THREE MONTHS
|
SIX MONTHS
|
||||||
2013
|
2012
|
2013
|
2012
|
||||
NET SALES
|
$18,973,013
|
$16,904,254
|
$38,210,840
|
$35,081,332
|
|||
COST OF SALES
|
7,052,892
|
5,964,053
|
14,359,890
|
12,775,498
|
|||
Gross profit
|
11,920,121
|
10,940,201
|
23,850,950
|
22,305,834
|
|||
OPERATING EXPENSES
|
9,574,057
|
8,475,429
|
18,884,026
|
17,286,887
|
|||
INCOME FROM OPERATIONS
|
2,346,064
|
2,464,772
|
4,966,924
|
5,018,947
|
|||
OTHER INCOME (EXPENSE):
|
|||||||
Interest expense
|
(51,544)
|
(58,235)
|
(107,638)
|
(116,627)
|
|||
Other, net
|
98,284
|
42,757
|
125,023
|
62,571
|
|||
Total other income (expense)
|
46,740
|
(15,478)
|
17,385
|
(54,056)
|
|||
INCOME BEFORE INCOME TAXES
|
2,392,804
|
2,449,294
|
4,984,309
|
4,964,891
|
|||
PROVISION FOR INCOME TAXES
|
763,451
|
909,656
|
1,768,635
|
1,851,147
|
|||
NET INCOME
|
$1,629,353
|
$1,539,638
|
$3,215,674
|
$3,113,744
|
|||
NET INCOME PER COMMON SHARE:
|
|||||||
Basic
|
$0.16
|
$0.15
|
$0.32
|
$0.30
|
|||
Diluted
|
$0.16
|
$0.15
|
$0.32
|
$0.30
|
|||
Weighted Average Number of Shares Outstanding:
|
|||||||
Basic
|
10,167,649
|
10,156,442
|
10,165,060
|
10,156,442
|
|||
Diluted
|
10,216,535
|
10,172,171
|
10,205,439
|
10,172,561
|
2013
|
2012
|
||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|||||||
Net income
|
$3,215,674
|
$3,113,744
|
|||||
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
|
|||||||
Depreciation and amortization
|
562,710
|
524,053
|
|||||
Loss on disposal or abandonment of assets
|
85,458
|
6,145
|
|||||
Non-cash stock-based compensation
|
11,686
|
10,000
|
|||||
Deferred income taxes
|
157,099
|
(117,930)
|
|||||
Other
|
(328,000)
|
(97,094)
|
|||||
Net changes in assets and liabilities, net of effect of business acquisitions:
|
|||||||
Accounts receivable-trade, net
|
(315,451)
|
209,708
|
|||||
Inventory
|
(1,635,238)
|
(9,809,560)
|
|||||
Income taxes
|
24,484
|
(304,657)
|
|||||
Prepaid expenses
|
(365,277)
|
(400,094)
|
|||||
Other current assets
|
(611,980)
|
(215,633)
|
|||||
Accounts payable-trade
|
1,270,216
|
1,395,665
|
|||||
Accrued expenses and other liabilities
|
163,184
|
1,437,262
|
|||||
Total adjustments
|
(981,109)
|
(7,362,135)
|
|||||
Net cash provided by (used in) operating activities
|
2,234,565
|
(4,248,391)
|
|||||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|||||||
Purchase of property and equipment
|
(1,962,700)
|
(403,611)
|
|||||
Proceeds from maturities of certificates of deposit
|
-
|
336,000
|
|||||
Proceeds from sale of assets
|
515
|
1,150
|
|||||
Decrease (increase) in other assets
|
91
|
3,201
|
|||||
Net cash used in investing activities
|
(1,962,094)
|
(63,260)
|
|||||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|||||||
Payments on notes payable and long-term debt
|
(405,000)
|
(101,250)
|
|||||
Payment of cash dividend
|
-
|
(2,536,131)
|
|||||
Net cash used in financing activities
|
(405,000)
|
(2,637,381)
|
|||||
NET DECREASE IN CASH
|
(132,529)
|
(6,949,032)
|
|||||
CASH, beginning of period
|
7,705,182
|
10,765,591
|
|||||
CASH, end of period
|
$7,572,653
|
$3,816,559
|
|||||
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
|
|||||||
Interest paid during the period
|
$107,638
|
$124,135
|
|||||
Income tax paid during the period, net of (refunds)
|
$1,584,223
|
$1,471,101
|