Date of report (Date of earliest event reported:)
|
March 9, 2017
|
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.
|
Contact:
|
Tina Castillo, Tandy Leather Factory, Inc.
|
(817) 872-3200 or tcastillo@tandyleather.com
|
Mark Gilbert, Magellan Fin, LLC
|
(317) 867-2839 or MGilbert@MagellanFin.com
|
Quarter Ended 12/31/16
|
Quarter Ended 12/31/15
|
||||||
Sales
|
Operating
Income
|
Sales
|
Operating
Income
|
||||
Wholesale Leathercraft
|
$7,184,250
|
$2,111,076
|
$7,519,790
|
$2,060,722
|
|||
Retail Leathercraft
|
15,814,111
|
1,469,105
|
15,744,009
|
1,827,471
|
|||
International Leathercraft
|
1,102,137
|
(21,190)
|
979,172
|
4,033
|
|||
Total Operations
|
$24,100,498
|
$3,558,991
|
$24,242,971
|
$3,892,226
|
Twelve Months Ended 12/31/16
|
Twelve Months Ended 12/31/15
|
||||||
Sales
|
Operating
Income
|
Sales
|
Operating
Income
|
||||
Wholesale Leathercraft
|
$25,371,580
|
$5,254,228
|
$26,754,164
|
$4,663,590
|
|||
Retail Leathercraft
|
53,670,340
|
4,970,545
|
53,714,432
|
5,689,814
|
|||
International Leathercraft
|
3,882,072
|
75,958
|
3,692,604
|
121,296
|
|||
Total Operations
|
$82,923,992
|
$10,300,731
|
$84,161.200
|
$10,474,700
|
Wholesale Leathercraft
|
Quarter Ended 12/31/16
|
Quarter Ended 12/31/15
|
|||
# of stores
|
Sales
|
# of stores
|
Sales
|
||
Same store sales
|
27
|
$7,184,250
|
27
|
$7,332,928
|
|
Closed store sales
|
-
|
-
|
1
|
186,862
|
|
Total Sales – Wholesale Leathercraft
|
$7,184,250
|
$7,519,790
|
|||
Wholesale Leathercraft
|
Twelve Months Ended 12/31/16
|
Twelve Months Ended 12/31/15
|
|||
# of stores
|
Sales
|
# of stores
|
Sales
|
||
Same store sales
|
27
|
$25,183,175
|
27
|
$26,072,562
|
|
Closed store sales
|
-
|
188,405
|
1
|
681,602
|
|
Total Sales – Wholesale Leathercraft
|
$25,371,580
|
$26,754,164
|
|||
Retail Leathercraft
|
Quarter Ended 12/31/16
|
Quarter Ended 12/31/15
|
|||
# of stores
|
Sales
|
# of stores
|
Sales
|
||
Same store sales
|
80
|
$15,402,304
|
80
|
$15,258,408
|
|
New store sales
|
4
|
411,807
|
-
|
-
|
|
Closed store sales
|
2
|
-
|
2
|
485,601
|
|
Total Sales – Retail Leathercraft
|
$15,814,111
|
$15,744,009
|
|||
Retail Leathercraft
|
Twelve Months Ended 12/31/16
|
Twelve Months Ended 12/31/15
|
|||
# of stores
|
Sales
|
# of stores
|
Sales
|
||
Same store sales
|
80
|
$52,266,784
|
80
|
$52,192,819
|
|
New store sales
|
4
|
1,034,143
|
-
|
-
|
|
Closed store sales
|
2
|
369,413
|
2
|
1,521,613
|
|
Total Sales – Retail Leathercraft
|
$53,670,340
|
$53,714,432
|
|||
International Leathercraft
|
Quarter Ended 12/31/16
|
Quarter Ended 12/31/15
|
|||
# of stores
|
Sales
|
# of stores
|
Sales
|
||
Same store sales
|
4
|
$1,102,137
|
4
|
$979,172
|
|
New store sales
|
-
|
-
|
-
|
-
|
|
Total Sales – Intl Leathercraft
|
$1,102,137
|
$979,172
|
|||
International Leathercraft
|
Twelve Months Ended 12/31/16
|
Twelve Months Ended 12/31/15
|
|||
# of stores
|
Sales
|
# of stores
|
Sales
|
||
Same store sales
|
3
|
$3,448,799
|
3
|
$3,565,247
|
|
New store sales
|
1
|
433,273
|
1
|
127,357
|
|
Total Sales – Intl Leathercraft
|
$3,882,072
|
$2,713,431
|
Three Months
|
Twelve Months
|
||||||
2016
(unaudited)
|
2015
|
2016
(unaudited)
|
2015
|
||||
NET SALES
|
$24,100,498
|
$24,242,971
|
$82,923,992
|
$84,161,200
|
|||
COST OF SALES
|
9,580,663
|
9,401,917
|
31,210,750
|
32,090,140
|
|||
Gross Profit
|
14,519,835
|
14,841,054
|
51,713,242
|
52,071,060
|
|||
OPERATING EXPENSES
|
10,960,844
|
10,948,828
|
41,412,511
|
41,596,360
|
|||
INCOME FROM OPERATIONS
|
3,558,991
|
3,892,226
|
10,300,731
|
10,474,700
|
|||
Interest expense
|
46,240
|
22,844
|
155,189
|
330,004
|
|||
Other, net
|
(30,322)
|
(6,287)
|
(57,287)
|
(74,357)
|
|||
Total other expense
|
15,918
|
16,557
|
97,902
|
255,647
|
|||
INCOME BEFORE INCOME TAXES
|
3,543,073
|
3,875,669
|
10,202,829
|
10,219,053
|
|||
PROVISION FOR INCOME TAXES
|
1,483,076
|
1,536,911
|
3,800,570
|
3,816,648
|
|||
NET INCOME
|
$2,059,997
|
$2,338,758
|
$6,402,259
|
$6,402,405
|
|||
|
|||||||
NET INCOME PER COMMON SHARE:
|
|||||||
Basic
|
$0.23
|
$0.24
|
$0.69
|
$0.64
|
|||
Diluted
|
$0.23
|
$0.24
|
$0.69
|
$0.63
|
|||
Weighted Average Number of Shares Outstanding:
|
|||||||
Basic
|
9,188,483
|
9,692,860
|
9,301,867
|
10,077,506
|
|||
Diluted
|
9,207,692
|
9,712,571
|
9,318,045
|
10,102,760
|
12/31/16
(unaudited)
|
12/31/15
|
||
ASSETS
|
|||
CURRENT ASSETS:
|
|||
Cash
|
$16,862,304
|
$10,962,615
|
|
Accounts receivable-trade, net of allowance for doubtful accounts
|
|||
of $2,404 and $1,746 in 2016 and 2015, respectively
|
560,984
|
553,206
|
|
Inventory
|
33,177,539
|
33,584,539
|
|
Prepaid income taxes
|
964,323
|
549,277
|
|
Prepaid expenses
|
1,608,860
|
1,514,887
|
|
Other current assets
|
140,232
|
70,197
|
|
Total current assets
|
53,314,242
|
47,234,721
|
|
PROPERTY AND EQUIPMENT, at cost
|
25,536,352
|
23,992,208
|
|
Less accumulated depreciation and amortization
|
(9,884,559)
|
(8,297,155)
|
|
15,651,793
|
15,695,053
|
||
DEFERRED INCOME TAXES
|
331,086
|
326,830
|
|
GOODWILL
|
956,201
|
953,356
|
|
OTHER INTANGIBLES, net of accumulated amortization of
|
|||
$708,000 and $702,000 in 2016 and 2015, respectively
|
20,840
|
27,282
|
|
OTHER ASSETS
|
334,408
|
329,684
|
|
$70,608,570
|
$64,566,926
|
||
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|||
CURRENT LIABILITIES:
|
|||
Accounts payable-trade
|
$1,621,884
|
$1,983,376
|
|
Accrued expenses and other liabilities
|
5,937,187
|
6,045,552
|
|
Current maturities of capital lease obligation
|
72,686
|
72,686
|
|
Current maturities of long-term debt
|
614,311
|
231,952
|
|
Total current liabilities
|
8,246,068
|
8,333,566
|
|
DEFERRED INCOME TAXES
|
1,911,882
|
1,702,515
|
|
LONG-TERM DEBT, net of current maturities
|
6,757,419
|
3,479,273
|
|
CAPITAL LEASE OBLIGATION, net of current maturities
|
-
|
79,396
|
|
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, 11,309,326 and 11,275,641 shares issued at 2016 and 2015,
|
|||
9,266,496 and 9,753,293 outstanding at 2016 and 2015, respectively
|
27,142
|
27,062
|
|
Paid-in capital
|
6,368,279
|
6,168,489
|
|
Retained earnings
|
59,469,493
|
53,067,234
|
|
Treasury stock at cost (2,042,830 and 1,522,348 shares at 2016 and 2015, respectively)
|
(10,278,584)
|
(6,602,930)
|
|
Accumulated other comprehensive income
|
(1,893,129)
|
(1,687,679)
|
|
Total stockholders' equity
|
53,693,201
|
50,972,176
|
|
$70,608,570
|
$64,566,926
|
2016
(unaudited)
|
2015
|
|||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
||||||||
Net income
|
$6,402,259
|
$6,402,405
|
||||||
Adjustments to reconcile net income to net cash
|
||||||||
provided by operating activities -
|
||||||||
Depreciation and amortization
|
1,719,153
|
1,567,172
|
||||||
Loss on disposal or abandonment of assets
|
16,986
|
31,064
|
||||||
Non-cash stock-based compensation
|
199,870
|
145,321
|
||||||
Deferred income taxes
|
205,111
|
289,171
|
||||||
Foreign currency translation
|
(163,292)
|
(896,927)
|
||||||
Net changes in assets and liabilities
|
||||||||
Accounts receivable-trade, net
|
(7,778)
|
71,848
|
||||||
Inventory
|
407,000
|
(709,047)
|
||||||
Income taxes
|
(415,046)
|
(212,449)
|
||||||
Prepaid expenses
|
(284,788)
|
43,585
|
||||||
Other current assets
|
(70,035)
|
87,561
|
||||||
Accounts payable-trade
|
(361,492)
|
728,158
|
||||||
Accrued expenses and other liabilities
|
(108,365)
|
651,038
|
||||||
Total adjustments
|
1,137,324
|
1,796,495
|
||||||
Net cash provided by (used in) operating activities
|
7,539,583
|
8,198,900
|
||||||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
||||||||
Purchase of property and equipment
|
(1,697,724)
|
(2,164,040)
|
||||||
Purchase of intangible assets
|
-
|
(10,000)
|
||||||
Proceeds from sale of assets
|
26,703
|
11,662
|
||||||
Proceeds from insurance for property damage
|
126,800
|
-
|
||||||
Decrease (increase) in other assets
|
(1,127)
|
295
|
||||||
Net cash (used in) provided by investing activities
|
(1,545,348)
|
(2,162,083)
|
||||||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
||||||||
Net (decrease) increase in revolving credit loans
|
-
|
(3,500,000)
|
||||||
Proceeds from notes payable and long-term debt
|
3,660,505
|
3,711,225
|
||||||
Payments on notes payable and long-term debt
|
-
|
(2,143,125)
|
||||||
Payments on capital lease obligations
|
(79,397)
|
(79,890)
|
||||||
Repurchase of common stock (treasury stock)
|
(3,675,654)
|
(3,708,862)
|
||||||
Proceeds from issuance of common stock
|
-
|
9,920
|
||||||
Net cash (used in) provided by financing activities
|
(94,546)
|
(5,710,732)
|
||||||
NET INCREASE IN CASH
|
5,899,689
|
326,085
|
||||||
CASH, beginning of period
|
10,962,615
|
10,636,530
|
||||||
CASH, end of period
|
$16,862,304
|
$10,962,615
|
||||||
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
|
||||||||
Interest paid during the period
|
$ 155,819
|
$ 330,004
|
||||||
Income tax paid during the period, net of refunds
|
4,215,616
|
3,743,864
|
||||||
NON-CASH INVESTING ACTIVITIES:
|
||||||||
Equipment purchased via capital lease arrangements
|
$ -
|
$ 231,972
|
||||||