Date of report (Date of earliest event reported:)
|
November 10, 2014
|
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: November 10, 2014
|
By: /s/ Jon Thompson
|
Jon Thompson, Chief Executive Officer and President
|
|
Contact:
|
Shannon L. Greene, Tandy Leather Factory, Inc.
|
(817) 872-3200 or shannon.greene@tandyleather.com
|
Mark Gilbert, Magellan Fin, LLC
|
(317) 867-2839 or MGilbert@MagellanFin.com
|
Quarter Ended 09/30/14
|
Quarter Ended 09/30/13
|
||||||
Sales
|
Operating Income
|
Sales
|
Operating Income
|
||||
Wholesale Leathercraft
|
$6,294,745
|
$1,000,329
|
$6,476,676
|
$956,721
|
|||
Retail Leathercraft
|
12,068,832
|
1,270,884
|
11,128,646
|
1,351,062
|
|||
International Leathercraft
|
1,053,657
|
185,714
|
919,282
|
97,570
|
|||
Total Operations
|
$19,417,234
|
$2,456,927
|
$18,524,604
|
$2,405,353
|
Nine Months Ended 09/30/14
|
Nine Months Ended 09/30/13
|
||||||
Sales
|
Operating Income
|
Sales
|
Operating Income
|
||||
Wholesale Leathercraft
|
$19,576,180
|
$3,479,908
|
$19,934,996
|
$2,853,219
|
|||
Retail Leathercraft
|
36,226,810
|
4,171,500
|
33,930,587
|
4,243,006
|
|||
International Leathercraft
|
3,156,317
|
428,459
|
2,869,861
|
276,052
|
|||
Total Operations
|
$58,959,307
|
$8,079,867
|
$56,735,444
|
$7,372,277
|
Wholesale Leathercraft
|
Quarter Ended 09/30/14
|
Quarter Ended 09/30/13
|
|||
# of stores
|
Sales
|
# of stores
|
Sales
|
||
Same store sales
|
29
|
$6,294,745
|
29
|
$6,105,137
|
|
National account group
|
n/a
|
-
|
n/a
|
371,539
|
|
Total Sales – Wholesale Leathercraft
|
29
|
$6,294,745
|
29
|
$6,476,676
|
Wholesale Leathercraft
|
Nine Months Ended 09/30/14
|
Nine Months Ended 09/30/13
|
|||
# of stores
|
Sales
|
# of stores
|
Sales
|
||
Same store sales
|
29
|
$19,227,530
|
29
|
$18,897,124
|
|
National account group
|
n/a
|
348,650
|
n/a
|
1,037,872
|
|
Total Sales – Wholesale Leathercraft
|
29
|
$19,576,180
|
29
|
$19,934,996
|
Retail Leathercraft
|
Quarter Ended 09/30/14
|
Quarter Ended 09/30/13
|
|||
# of stores
|
Sales
|
# of stores
|
Sales
|
||
Same store sales
|
76
|
$11,664,143
|
76
|
$10,979,163
|
|
New store sales
|
4
|
404,689
|
-
|
-
|
|
Closed store sales
|
2
|
-
|
2
|
149,483
|
|
Total Sales – Retail Leathercraft
|
80
|
$12,068,832
|
76
|
$11,128,646
|
Retail Leathercraft
|
Nine Months Ended 09/30/14
|
Nine Months Ended 09/30/13
|
|||
# of stores
|
Sales
|
# of stores
|
Sales
|
||
Same store sales
|
76
|
$35,086,069
|
76
|
$33,451,109
|
|
New store sales
|
4
|
1,140,741
|
-
|
-
|
|
Closed store sales
|
2
|
-
|
2
|
479,478
|
|
Total Sales – Retail Leathercraft
|
80
|
$36,226,810
|
76
|
$33,930,587
|
International Leathercraft
|
Quarter Ended 09/30/14
|
Quarter Ended 09/30/13
|
|||
# of stores
|
Sales
|
# of stores
|
Sales
|
||
Same store sales
|
3
|
$1,053,657
|
3
|
$919,282
|
|
New store sales
|
-
|
-
|
-
|
-
|
|
Total Sales – Intl Leathercraft
|
3
|
$1,053,657
|
3
|
$919,282
|
International Leathercraft
|
Nine Months Ended 09/30/14
|
Nine Months Ended 09/30/13
|
|||
# of stores
|
Sales
|
# of stores
|
Sales
|
||
Same store sales
|
3
|
$3,156,317
|
3
|
$2,869,861
|
|
New store sales
|
-
|
-
|
-
|
-
|
|
Total Sales – Intl Leathercraft
|
3
|
$3,156,317
|
3
|
$2,869,861
|
September 30, 2014
(unaudited)
|
December 31, 2013
(audited)
|
||||||||
ASSETS
|
|||||||||
CURRENT ASSETS:
|
|||||||||
Cash
|
$4,866,016
|
$11,082,679
|
|||||||
Accounts receivable-trade, net of allowance for doubtful accounts
|
|||||||||
of $1,000 at 2014 and 2013
|
702,002
|
762,405
|
|||||||
Inventory
|
39,365,204
|
26,300,830
|
|||||||
Prepaid income taxes
|
463,329
|
-
|
|||||||
Deferred income taxes
|
419,824
|
309,533
|
|||||||
Prepaid expenses
|
1,621,327
|
1,609,644
|
|||||||
Other current assets
|
98,580
|
478,593
|
|||||||
Total current assets
|
47,536,282
|
40,543,684
|
|||||||
PROPERTY AND EQUIPMENT, at cost
|
21,808,785
|
20,290,990
|
|||||||
Less accumulated depreciation and amortization
|
(6,763,514)
|
(5,863,280)
|
|||||||
15,045,271
|
14,427,710
|
||||||||
GOODWILL
|
975,657
|
981,985
|
|||||||
OTHER INTANGIBLES, net of accumulated amortization of
|
|||||||||
$655,000 and $622,000 in 2014 and 2013, respectively
|
69,304
|
103,228
|
|||||||
Other assets
|
334,991
|
341,959
|
|||||||
$63,961,505
|
$56,398,566
|
||||||||
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|||||||||
CURRENT LIABILITIES:
|
|||||||||
Accounts payable-trade
|
$1,942,108
|
$1,884,637
|
|||||||
Accrued expenses and other liabilities
|
5,940,106
|
5,808,882
|
|||||||
Income taxes payable
|
-
|
272,198
|
|||||||
Current maturities of long-term debt
|
6,202,500
|
202,500
|
|||||||
Total current liabilities
|
14,084,714
|
8,168,217
|
|||||||
DEFERRED INCOME TAXES
|
1,095,362
|
1,212,557
|
|||||||
LONG-TERM DEBT, net of current maturities
|
1,991,250
|
2,396,250
|
|||||||
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;
|
|||||||||
11,239,157 and 11,192,356 shares issued at 2014 and 2013;
|
|||||||||
10,245,534 and 10,198,733 shares outstanding at 2014 and 2013
|
26,979
|
26,862
|
|||||||
Paid-in capital
|
5,993,953
|
5,892,907
|
|||||||
Retained earnings
|
44,206,367
|
41,507,592
|
|||||||
Treasury stock at cost (993,623 shares at 2014 and 2013)
|
(2,894,068)
|
(2,894,068)
|
|||||||
Accumulated other comprehensive income
|
(543,052)
|
88,249
|
|||||||
Total stockholders' equity
|
46,790,179
|
44,621,542
|
|||||||
$63,961,505
|
$56,398,566
|
THREE MONTHS
|
NINE MONTHS
|
||||||
2014
|
2013
|
2014
|
2013
|
||||
NET SALES
|
$19,417,234
|
$18,524,604
|
$58,959,307
|
$56,735,444
|
|||
COST OF SALES
|
7,242,525
|
6,823,661
|
21,289,269
|
21,183,551
|
|||
Gross profit
|
12,174,709
|
11,700,943
|
37,670,038
|
35,551,893
|
|||
OPERATING EXPENSES
|
9,717,782
|
9,295,590
|
29,590,171
|
28,179,616
|
|||
INCOME FROM OPERATIONS
|
2,456,927
|
2,405,353
|
8,079,867
|
7,372,277
|
|||
OTHER INCOME (EXPENSE):
|
|||||||
Interest expense
|
(63,684)
|
(51,021)
|
(154,367)
|
(158,659)
|
|||
Other, net
|
37,525
|
13,777
|
44,203
|
138,800
|
|||
Total other income (expense)
|
(26,159)
|
(37,244)
|
(110,164)
|
(19,859)
|
|||
INCOME BEFORE INCOME TAXES
|
2430,768
|
2,368,109
|
7,969,703
|
7,352,418
|
|||
PROVISION FOR INCOME TAXES
|
802,206
|
806,277
|
2,721,244
|
2,574,912
|
|||
NET INCOME
|
$1,628,562
|
$1,561,832
|
$5,248,459
|
$4,777,506
|
|||
NET INCOME PER COMMON SHARE:
|
|||||||
Basic
|
$0.16
|
$0.15
|
$0.51
|
$0.47
|
|||
Diluted
|
$0.16
|
$0.15
|
$0.51
|
$0.47
|
|||
Weighted Average Number of Shares Outstanding:
|
|||||||
Basic
|
10,203,711
|
10,176,744
|
10,200,411
|
10,163,490
|
|||
Diluted
|
10,241,410
|
10,221,512
|
10,240,109
|
10,205,348
|
2014
|
2013
|
||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|||||||
Net income
|
$5,248,459
|
$4,777,506
|
|||||
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
|
|||||||
Depreciation and amortization
|
1,088,758
|
889,395
|
|||||
Loss on disposal or abandonment of assets
|
8,603
|
89,531
|
|||||
Non-cash stock-based compensation
|
48,441
|
11,686
|
|||||
Deferred income taxes
|
(227,486)
|
190,144
|
|||||
Other
|
(606,442)
|
(70,330)
|
|||||
Net changes in assets and liabilities, net of effect of business acquisitions:
|
|||||||
Accounts receivable-trade, net
|
60,403
|
(122,953)
|
|||||
Inventory
|
(13,064,374)
|
(3,629,704)
|
|||||
Income taxes
|
(735,527)
|
(119,811)
|
|||||
Prepaid expenses
|
(11,683)
|
(1,069,399)
|
|||||
Other current assets
|
380,013
|
(276,072)
|
|||||
Accounts payable-trade
|
57,471
|
686,823
|
|||||
Accrued expenses and other liabilities
|
131,224
|
(15,234)
|
|||||
Total adjustments
|
(12,870,599)
|
(3,435,924)
|
|||||
Net cash (used in) provided by operating activities
|
(7,622,140)
|
1,341,582
|
|||||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|||||||
Purchase of property and equipment
|
(1,719,465)
|
(2,415,484)
|
|||||
Proceeds from sale of assets
|
19,935
|
515
|
|||||
Decrease (increase) in other assets
|
6,968
|
(420)
|
|||||
Net cash used in investing activities
|
(1,692,562)
|
(2,415,389)
|
|||||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|||||||
Net increase in revolving credit loan
|
6,000,000
|
-
|
|||||
Payments on notes payable and long-term debt
|
(405,000)
|
(455,625)
|
|||||
Proceeds from issuance of common stock
|
52,722
|
113,800
|
|||||
Payment of cash dividend
|
(2,549,683)
|
-
|
|||||
Net cash provided by (used in) financing activities
|
3,098,039
|
(341,825)
|
|||||
NET DECREASE IN CASH
|
(6,216,663)
|
(1,415,632)
|
|||||
CASH, beginning of period
|
11,082,679
|
7,705,182
|
|||||
CASH, end of period
|
$4,866,016
|
$6,289,550
|
|||||
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
|
|||||||
Interest paid during the period
|
$154,367
|
$158,659
|
|||||
Income tax paid during the period, net of (refunds)
|
$3,690,817
|
$2,507,842
|