Commission File Number 1-12368
|
Tandy Leather Factory, Inc.
|
||
(Exact name of registrant as specified in its charter)
|
||
Delaware
|
75-2543540
|
|
(State or other jurisdiction of incorporation or organization)
|
(I.R.S. Employer Identification No.)
|
|
1900 Southeast Loop 820, Fort Worth, TX 76140
|
817/872-3200
|
|
(Address of Principal Executive Offices and Zip Code)
|
(Registrant’s telephone number, including area code)
|
|
Title of each class
|
Name of each exchange on which registered
|
|
Common Stock, par value $0.0024
|
NASDAQ Global Market
|
|
Preferred Share Purchase Rights
|
NASDAQ Global Market
|
Item
|
Page
|
|
Part 1
|
||
1
|
1 | |
1A
|
4 | |
1B
|
5 | |
2
|
5 | |
3
|
6 | |
4
|
6 | |
Part II
|
||
5
|
6 | |
6
|
6 | |
7
|
6 | |
7A
|
11 | |
8
|
12 | |
9
|
26 | |
9A
|
26 | |
9B
|
||
Part III
|
||
10
|
26 | |
11
|
26 | |
12
|
26 | |
13
|
26 | |
14
|
26 | |
Part IV
|
26 | |
15
|
Segment
|
|
Wholesale Leathercraft
|
24 US stores and 3 Canadian stores
|
Retail Leathercraft
|
77 US stores and 7 Canadian stores
|
International Leathercraft
|
2 UK stores, 1 Australian store and 1 Spanish store
|
Wholesale Leathercraft
|
Retail Leathercraft
|
International Leathercraft
|
|||||||||
Year Ended
|
Opened
|
Closed
|
Total
|
Opened
|
Closed
|
Total
|
Opened
|
Closed
|
Total
|
||
2012
|
-
|
-
|
29
|
1
|
-
|
78
|
1
|
-
|
3
|
||
2013
|
-
|
-
|
29
|
3
|
2
|
79
|
-
|
-
|
3
|
||
2014
|
-
|
1
|
28
|
3
|
-
|
82
|
-
|
-
|
3
|
||
2015
|
-
|
-
|
28
|
-
|
-
|
82
|
1
|
-
|
4
|
||
2016
|
-
|
1*
|
27
|
4
|
2
|
84
|
-
|
-
|
4
|
Product Category
|
2016 Sales Mix
|
2015 Sales Mix
|
2014 Sales Mix
|
||
Belts strips and straps
|
4%
|
4%
|
4%
|
||
Books, patterns, videos
|
1%
|
2%
|
2%
|
||
Buckles
|
3%
|
3%
|
3%
|
||
Conchos^
|
2%
|
2%
|
3%
|
||
Craft supplies
|
2%
|
2%
|
2%
|
||
Dyes, finishes, glues
|
7%
|
7%
|
7%
|
||
Hand tools
|
18%
|
16%
|
17%
|
||
Hardware
|
8%
|
8%
|
8%
|
||
Kits
|
6%
|
6%
|
6%
|
||
Lace
|
3%
|
3%
|
3%
|
||
Leather
|
41%
|
42%
|
40%
|
||
Stamping tools
|
5%
|
5%
|
5%
|
||
100%
|
100%
|
100%
|
Name and Age
|
Position
|
Served as Executive Officer Since
|
Shannon L. Greene, 51
|
Chief Executive Officer
|
2000
|
Mark J. Angus, 56
|
President
|
2008
|
Tina L. Castillo, 46
|
Chief Financial Officer and Treasurer
|
2017
|
William M. Warren, 73
|
Secretary and Corporate Counsel
|
1993
|
State
|
Wholesale Leathercraft
|
Retail Leathercraft
|
International
|
Alabama
|
-
|
1
|
n/a
|
Alaska
|
-
|
1
|
n/a
|
Arizona
|
2
|
3
|
n/a
|
Arkansas
|
-
|
1
|
n/a
|
California
|
3
|
8
|
n/a
|
Colorado
|
1
|
3
|
n/a
|
Connecticut
|
-
|
1
|
n/a
|
Florida
|
1
|
3
|
n/a
|
Georgia
|
-
|
1
|
n/a
|
Idaho
|
-
|
1
|
n/a
|
Illinois
|
1
|
1
|
n/a
|
Indiana
|
-
|
2
|
n/a
|
Iowa
|
1
|
-
|
n/a
|
Kansas
|
1
|
-
|
n/a
|
Kentucky
|
-
|
1
|
n/a
|
Louisiana
|
1
|
1
|
n/a
|
Maryland
|
-
|
1
|
n/a
|
Massachusetts
|
-
|
1
|
n/a
|
Michigan
|
1
|
1
|
n/a
|
Minnesota
|
-
|
2
|
n/a
|
Missouri
|
1
|
2
|
n/a
|
Montana
|
1
|
-
|
n/a
|
Nebraska
|
-
|
1
|
n/a
|
Nevada
|
-
|
2
|
n/a
|
New Mexico
|
1
|
1
|
n/a
|
New York
|
-
|
2
|
n/a
|
New Jersey
|
-
|
1
|
n/a
|
North Carolina
|
-
|
2
|
n/a
|
Ohio
|
1
|
2
|
n/a
|
Oklahoma
|
-
|
2
|
n/a
|
Oregon
|
1
|
2
|
n/a
|
Pennsylvania
|
-
|
3
|
n/a
|
Rhode Island
|
-
|
1
|
n/a
|
South Carolina
|
-
|
1
|
n/a
|
South Dakota
|
-
|
1
|
n/a
|
Tennessee
|
-
|
3
|
n/a
|
Texas
|
5
|
12
|
n/a
|
Utah
|
1
|
3
|
n/a
|
Virginia
|
-
|
1
|
n/a
|
Washington
|
1
|
2
|
n/a
|
Wisconsin
|
-
|
1
|
n/a
|
Wyoming
|
-
|
1
|
n/a
|
Canadian locations:
|
|||
Alberta
|
1
|
1
|
n/a
|
British Columbia
|
-
|
1
|
n/a
|
Manitoba
|
1
|
-
|
n/a
|
Nova Scotia
|
-
|
1
|
n/a
|
Ontario
|
1
|
2
|
n/a
|
Quebec
|
-
|
1
|
n/a
|
Saskatchewan
|
-
|
1
|
n/a
|
International locations:
|
|||
United Kingdom
|
n/a
|
n/a
|
2
|
Australia
|
n/a
|
n/a
|
1
|
Spain
|
n/a
|
n/a
|
1
|
2016
|
High
|
Low
|
2015
|
High
|
Low
|
|
4th quarter
|
$8.25
|
$6.85
|
4th quarter
|
$7.88
|
$6.85
|
|
3rd quarter
|
$7.90
|
$6.96
|
3rd quarter
|
$8.63
|
$6.76
|
|
2nd quarter
|
$7.69
|
$6.73
|
2nd quarter
|
$8.90
|
$8.39
|
|
1st quarter
|
$7.75
|
$6.75
|
1st quarter
|
$9.03
|
$7.89
|
Income Statement Data,
Years ended December 31,
|
2016
|
2015
|
2014
|
2013
|
2012
|
||||
Net sales
|
$82,923,992
|
$84,161,200
|
$83,430,912
|
$78,284,585
|
$72,720,624
|
||||
Gross profit
|
51,713,242
|
52,071,060
|
52,124,757
|
49,328,024
|
45,905,674
|
||||
Income from operations
|
10,300,731
|
10,474,700
|
11,958,029
|
11,266,790
|
9,144,005
|
||||
Net income
|
$6,402,259
|
$6,402,405
|
$7,706,921
|
$7,265,717
|
$5,596,070
|
||||
Net income per share
|
|||||||||
Basic
|
$0.69
|
$0.64
|
$0.76
|
$0.71
|
$0.55
|
||||
Diluted
|
$0.69
|
$0.63
|
$0.75
|
$0.71
|
$0.55
|
||||
Weighted average common shares outstanding for:
|
|||||||||
Basic EPS
|
9,301,867
|
10,077,506
|
10,203,063
|
10,176,492
|
10,157,395
|
||||
Diluted EPS
|
9,321,558
|
10,102,760
|
10,241,121
|
10,216,438
|
10,175,346
|
||||
Cash dividend declared per common share
|
-
|
-
|
$0.25
|
-
|
$0.25
|
||||
Balance Sheet Data, as of December 31,
|
2016
|
2015
|
2014
|
2013
|
2012
|
||||
Cash and certificates of deposit
|
$16,862,304
|
$10,962,615
|
$10,636,530
|
$11,082,679
|
$7,705,182
|
||||
Total assets
|
70,652,720
|
64,611,076
|
62,873,874
|
56,398,566
|
49,087,672
|
||||
Long-term debt, including current portion
|
7,444,416
|
3,863,307
|
5,643,125
|
2,598,750
|
3,105,000
|
||||
Total Stockholders’ Equity
|
$53,693,201
|
$50,972,176
|
$49,123,012
|
$44,621,542
|
$37,521,017
|
Year
|
Wholesale Leathercraft
|
Retail Leathercraft
|
International Leathercraft
|
Total Company
|
(Decr) Incr from Prior Year
|
2016
|
$25,371,580
|
$53,670,340
|
$3,882,072
|
$82,923,992
|
(1.5%)
|
2015
|
$26,754,165
|
$53,714,432
|
$3,692,603
|
$84,161,200
|
0.9%
|
2014
|
$27,285,884
|
$51,805,944
|
$4,339,084
|
$83,430,912
|
6.6%
|
Year
|
Wholesale Leathercraft
|
Retail Leathercraft
|
International Leathercraft
|
Total Company
|
2016
|
71.3%
|
58.2%
|
61.8%
|
62.4%
|
2015
|
69.5%
|
58.2%
|
60.5%
|
61.9%
|
2014
|
67.4%
|
59.6%
|
65.7%
|
62.5%
|
Expense
|
2016 amount
|
(Decr) Incr over 2015
|
Employee compensation and benefits
|
$19.9 million
|
($254,000)
|
Advertising and marketing
|
$5.7 million
|
($80,000)
|
Rent and utilities
|
$6.0 million
|
$253,000
|
Depreciation
|
$1.7 million
|
$197,000
|
Store move, travel and other outside services
|
$0.8 million
|
($533,000)
|
Expense
|
2015 amount
|
Incr (Decr) over 2014
|
Employee compensation and benefits
|
$20.1 million
|
$216,000
|
Advertising and marketing
|
$5.8 million
|
$660,000
|
Rent and utilities
|
$5.7 million
|
$181,000
|
Legal, professional and other outside fees
|
$1.1 million
|
156,000
|
Depreciation
|
$1.5 million
|
130,000
|
Year
|
Net Sales
Decrease from Prior Year
|
Operating Income
|
Operating Income
Increase (Decrease) from Prior Year
|
Operating Income as a Percentage
of Sales
|
2016
|
(5.2)%
|
$5,254,228
|
12.7%
|
20.7%
|
2015
|
(2.0)%
|
$4,663,590
|
(12.0)%
|
17.4%
|
2014
|
(0.4)%
|
$5,300,413
|
9.5%
|
19.4%
|
Customer Group
|
2016
|
2015
|
2014
|
Retail
|
48%
|
47%
|
45%
|
Institution
|
3%
|
3%
|
4%
|
Wholesale
|
43%
|
43%
|
42%
|
National Accounts
|
-
|
-
|
3%
|
Manufacturers
|
6%
|
7%
|
6%
|
100%
|
100%
|
100%
|
Year
|
Net Sales
Increase (Decrease) From Prior Yr
|
Operating Income
|
Operating Income
Increase (Decrease) from Prior Year
|
Operating Income as a Percentage
of Sales
|
2016
|
(0.1%)
|
$4,970,546
|
(12.6)%
|
9.3%
|
2015
|
3.7%
|
$5,689,814
|
(6.4)%
|
10.6%
|
2014
|
10.2%
|
$6,077,345
|
1.0%
|
11.7%
|
Customer Group
|
2016
|
2015
|
2014
|
Retail
|
60%
|
59%
|
60%
|
Institution
|
3%
|
3%
|
3%
|
Wholesale
|
35%
|
35%
|
34%
|
Manufacturers
|
2%
|
3%
|
3%
|
100%
|
100%
|
100%
|
Year
|
Net Sales
Increase (Decrease) from Prior Yr
|
Operating Income
|
Operating Income
Increase (Decrease) from Prior Year
|
Operating Income as a Percentage
of Sales
|
2016
|
5.1%
|
$75,958
|
(37.4)%
|
2.0%
|
2015
|
(14.9)%
|
$121,296
|
(79.1)%
|
3.3%
|
2014
|
11.1%
|
$580,271
|
45.2%
|
13.4%
|
2016
|
2015
|
2014
|
||
Solvency Ratios:
|
||||
Quick Ratio
|
(Cash+Accts Rec)/Total Current Liabilities
|
2.11
|
1.38
|
1.09
|
Current Ratio
|
Total Current Assets/Total Current Liabilities
|
6.47
|
5.67
|
4.48
|
Current Liabilities to Net Worth
|
Total Current Liabilities/Net Worth
|
0.15
|
0.16
|
0.21
|
Current Liabilities to Inventory
|
Total Current Liabilities/Inventory
|
0.25
|
0.25
|
0.32
|
Total Liabilities to Net Worth
|
Total Liabilities/Net Worth
|
0.32
|
0.27
|
0.28
|
Fixed Assets to Net Worth
|
Fixed Assets/Net Worth
|
0.29
|
0.31
|
0.31
|
Efficiency Ratios:
|
||||
Inventory Turnover
|
Sales/Average Inventory
|
2.48
|
2.53
|
2.82
|
Assets to Sales
|
Total Assets/Sales
|
0.85
|
0.77
|
0.75
|
Sales to Net Working Capital
|
Sales/Current Assets - Current Liabilities
|
1.84
|
2.15
|
2.32
|
Profitability Ratios:
|
||||
Return on Sales (Profit Margin)
|
Net Profit After Taxes/Sales
|
0.08
|
0.08
|
0.09
|
Return on Assets
|
Net Profit After Taxes/Total Assets
|
0.09
|
0.10
|
0.12
|
Return on Net Worth (Return on Equity)
|
Net Profit After Taxes/Net Worth
|
0.12
|
0.13
|
0.16
|
Segment
|
2016
|
2015
|
2014
|
Wholesale Leathercraft
|
1.29
|
1.66
|
1.85
|
Retail Leathercraft
|
4.32
|
3.75
|
4.27
|
International Leathercraft
|
3.03
|
3.00
|
4.27
|
Wholesale Leathercraft stores only
|
4.42
|
4.04
|
4.52
|
Payments Due by Periods
|
|||||
Contractual Obligations
|
Total
|
Less than
1 Year
|
1 – 3
Years
|
3 -5
Years
|
More than
5 Years
|
Long-Term Debt(1)
|
$7,371,729
|
$614,311
|
$5,528,797
|
$1,228,621
|
$ -
|
Revolving Line of Credit(2)
|
-
|
-
|
-
|
-
|
-
|
Capital Lease Obligation(3)
|
72,686
|
72,686
|
-
|
-
|
-
|
Operating Leases(4)
|
13,353,335
|
3,914,550
|
6,957,349
|
2,047,610
|
433,826
|
Total Contractual Obligations
|
$20,797,750
|
$4,601,547
|
$12,486,146
|
$3,276,231
|
$433,826
|
(1)
|
Our stock purchase loan from Bank of Texas matures September 2021.
|
(2)
|
Our line of credit from Bank of Texas matures September 2018.
|
(3)
|
Our capital lease obligation with Cisco Systems Capital Corporation matures January 2018.
|
(4)
|
These are our leased store facilities.
|
December 31,
2016
|
December 31,
2015
|
||||||
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
|
375,236
|
370,980
|
|||||
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
|
|||||
Total Assets
|
$70,652,720
|
$64,611,076
|
|||||
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 obligations
|
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
|
1,956,032
|
1,746,665
|
|||||
LONG-TERM DEBT, net of current maturities
|
6,757,419
|
3,479,273
|
|||||
CAPITAL LEASE OBLIGATIONS, 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, respectively; 9,266,496 and 9,753,293 shares 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
|
|||||
Total Liabilities and Stockholders’ Equity
|
$70,652,720
|
$64,611,076
|
2016
|
2015
|
2014
|
||||
NET SALES
|
$82,923,992
|
$84,161,200
|
$83,430,912
|
|||
COST OF SALES
|
31,210,750
|
32,090,140
|
31,306,155
|
|||
Gross Profit
|
51,713,242
|
52,071,060
|
52,124,757
|
|||
OPERATING EXPENSES
|
41,412,511
|
41,596,360
|
40,166,728
|
|||
INCOME FROM OPERATIONS
|
10,300,731
|
10,474,700
|
11,958,029
|
|||
OTHER (INCOME) EXPENSE:
|
||||||
Interest expense
|
155,189
|
330,004
|
225,584
|
|||
Other, net
|
(57,287)
|
(74,357)
|
(75,165)
|
|||
Total other expense
|
97,902
|
255,647
|
150,419
|
|||
INCOME BEFORE NCOME TAXES
|
10,202,829
|
10,219,053
|
11,807,610
|
|||
PROVISION FOR INCOME TAXES
|
3,800,570
|
3,816,648
|
4,100,689
|
|||
NET INCOME
|
$6,402,259
|
$6,402,405
|
$7,706,921
|
|||
Foreign currency translation adjustments
|
(205,450)
|
(999,621)
|
(776,307)
|
|||
COMPREHENSIVE INCOME
|
$6,196,809
|
$5,402,784
|
$6,930,614
|
|||
NET INCOME PER COMMON SHARE:
|
||||||
BASIC
|
$0.69
|
$0.64
|
$0.76
|
|||
DILUTED
|
$0.69
|
$0.63
|
$0.75
|
|||
Weighted Average Number of Shares Outstanding:
|
||||||
Basic
|
9,301,867
|
10,077,506
|
10,203,063
|
|||
Diluted
|
9,321,558
|
10,102,760
|
10,241,121
|
2016
|
2015
|
2014
|
|||||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|||||||||||
Net income
|
$6,402,259
|
$6,402,405
|
$7,706,921
|
||||||||
Adjustments to reconcile net income to net cash
|
|||||||||||
provided by operating activities -
|
|||||||||||
Depreciation and amortization
|
1,719,154
|
1,567,172
|
1,436,624
|
||||||||
Loss on disposal or abandonment of assets
|
16,985
|
31,064
|
18,820
|
||||||||
Non-cash share-based compensation
|
199,870
|
145,322
|
67,818
|
||||||||
Deferred income taxes
|
205,111
|
289,171
|
183,490
|
||||||||
Foreign currency translation
|
(163,292)
|
(896,928)
|
(727,664)
|
||||||||
Net changes in assets and liabilities, net of effect of
|
|||||||||||
business acquisitions:
|
|||||||||||
Accounts receivable-trade
|
(7,778)
|
71,848
|
137,351
|
||||||||
Inventory
|
407,000
|
(709,047)
|
(6,574,662)
|
||||||||
Prepaid expenses
|
(284,788)
|
43,585
|
260,992
|
||||||||
Other current assets
|
(70,035)
|
87,561
|
320,835
|
||||||||
Accounts payable-trade
|
(361,492)
|
728,158
|
(629,419)
|
||||||||
Accrued expenses and other liabilities
|
(108,365)
|
651,038
|
(414,368)
|
||||||||
Income taxes
|
(415,046)
|
(212,449)
|
(609,026)
|
||||||||
Total adjustments
|
1,137,324
|
1,796,495
|
(6,529,209)
|
||||||||
Net cash provided by operating activities
|
7,539,583
|
8,198,900
|
1,177,712
|
||||||||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|||||||||||
Purchase of property and equipment
|
(1,697,704)
|
(2,164,040)
|
(2,204,190)
|
||||||||
Purchase of intangible property
|
-
|
(10,000)
|
-
|
||||||||
Proceeds from sale of assets / insurance
|
153,483
|
11,662
|
20,936
|
||||||||
Decrease (increase) in other assets
|
(1,127)
|
295
|
11,980
|
||||||||
Net cash used in investing activities
|
(1,545,348)
|
(2,162,083)
|
(2,171,274)
|
||||||||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|||||||||||
Net increase (decrease) in revolving credit loans
|
-
|
(3,500,000)
|
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)
|
(455,625)
|
||||||||
Payments on capital lease obligations
|
(79,396)
|
(79,890)
|
-
|
||||||||
Repurchase of common stock (treasury stock)
|
(3,675,654)
|
(3,708,862)
|
-
|
||||||||
Payment of cash dividend
|
-
|
-
|
(2,549,684)
|
||||||||
Proceeds from issuance of common stock
|
-
|
9,920
|
52,722
|
||||||||
Net cash provided by (used in) financing activities
|
(94,545)
|
(5,710,732)
|
547,413
|
||||||||
NET INCREASE (DECREASE) IN CASH
|
5,899,689
|
326,085
|
(446,149)
|
||||||||
CASH, beginning of period
|
10,962,615
|
10,636,530
|
11,082,679
|
||||||||
CASH, end of period
|
$16,862,304
|
$10,962,615
|
$10,636,530
|
||||||||
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
|
|||||||||||
Interest paid during the period
|
$155,189
|
$330,004
|
$225,584
|
||||||||
Income tax paid during the period, net of (refunds)
|
$4,215,616
|
$3,743,864
|
$4,604,087
|
||||||||
NON-CASH INVESTING ACTIVITIES
|
|||||||||||
Equipment purchased via capital lease arrangements
|
-
|
$231,972
|
-
|
Number
of Shares
|
Par
Value
|
Paid-in
Capital
|
Treasury
Stock
|
Retained
Earnings
|
Accumulated Other Comprehensive Income (Loss)
|
Total
|
|||||||
BALANCE, January 1, 2014
|
10,198,733
|
$6,862
|
$,892,907
|
$2,894,068)
|
$1,507,592
|
$8,249
|
$4,621,542
|
||||||
Shares issued - stock options exercised
|
12,200
|
29
|
52,693
|
-
|
-
|
-
|
52,722
|
||||||
Share-based compensation
|
34,601
|
93
|
67,725
|
-
|
-
|
-
|
67,818
|
||||||
Net income
|
-
|
-
|
-
|
-
|
7,706,921
|
-
|
7,706,921
|
||||||
Cash dividend paid
|
-
|
-
|
-
|
-
|
(2,549,684)
|
-
|
(2,549,684)
|
||||||
Translation adjustment
|
-
|
-
|
-
|
-
|
-
|
(776,307)
|
(776,307)
|
||||||
BALANCE, December 31, 2014
|
10,245,534
|
26,984
|
6,013,325
|
(2,894,068)
|
46,664,829
|
(688,058)
|
49,123,012
|
||||||
Shares issued - stock options exercised | 2,000 | 5 | 9,915 | - | - | - | 9,920 | ||||||
Share-based compensation
|
34,484
|
73
|
145,249
|
-
|
-
|
-
|
145,322
|
||||||
Net income
|
-
|
-
|
-
|
-
|
6,402,405
|
-
|
6,402,405
|
||||||
Purchase of Treasury stock
|
(528,725)
|
-
|
-
|
(3,708,862)
|
-
|
-
|
(3,708,862)
|
||||||
Translation adjustment
|
-
|
-
|
-
|
-
|
-
|
(999,621)
|
(999,621)
|
||||||
BALANCE, December 31, 2015
|
9,753,293
|
$27,062
|
$6,168,489
|
($6,602,930)
|
$53,067,234
|
$(1,687,679)
|
$50,972,176
|
||||||
Share-based compensation | 33,685 | 80 | 199,790 | - | - | - | 199,870 | ||||||
Net income
|
-
|
-
|
-
|
-
|
6,402,259
|
-
|
6,402,259
|
||||||
Purchase of Treasury stock
|
(520,482)
|
-
|
-
|
(3,675,654)
|
-
|
-
|
(3,675,654)
|
||||||
Translation adjustment
|
-
|
-
|
-
|
-
|
-
|
(205,450)
|
(205,450)
|
||||||
BALANCE, December 31, 2016
|
9,266,496
|
$27,142
|
$6,368,279
|
($10,278,584)
|
$59,469,493
|
$(1,893,129)
|
$53,693,201
|
·
|
Management estimates and reporting
|
·
|
Principles of consolidation
|
·
|
Foreign currency translation and transactions
|
·
|
Revenue recognition
|
·
|
Discounts
|
·
|
Expense categories
|
·
|
Property and equipment, net of accumulated depreciation and amortization
|
·
|
Inventory
|
·
|
Impairment of long-lived assets
|
·
|
Earnings per share
|
BASIC
|
2016
|
2015
|
2014
|
||
Net income
|
$6,402,259
|
$6,402,405
|
$7,706,921
|
||
Weighted average common shares outstanding
|
9,301,867
|
10,077,506
|
10,203,063
|
||
Earnings per share – basic
|
$0.69
|
$0.64
|
$0.76
|
||
DILUTED
|
|||||
Net income
|
$6,402,259
|
$6,402,405
|
$7,706,921
|
||
Weighted average common shares outstanding
|
9,301,867
|
10,077,506
|
10,203,063
|
||
Effect of restricted stock awards and assumed exercise of stock options
|
19,691
|
25,254
|
38,058
|
||
Weighted average common shares outstanding, assuming dilution
|
9,321,558
|
10,102,760
|
10,241,121
|
||
Earnings per share - diluted
|
$0.69
|
$0.63
|
$0.75
|
||
Outstanding options and restricted stock awards excluded as anti-dilutive
|
31,477
|
60,433
|
-
|
·
|
Goodwill and other intangibles
|
Leather Factory
|
Tandy Leather
|
Total
|
|||
Balance, January 1, 2015
|
$588,380
|
$383,406
|
$971,786
|
||
Foreign exchange gain/loss
|
(18,430)
|
-
|
(18,430)
|
||
Balance, December 31, 2015
|
$569,950
|
$383,406
|
$953,356
|
||
Foreign exchange gain/loss
|
2,845
|
-
|
2,845
|
||
Balance, December 31, 2016
|
$572,795
|
$383,406
|
$956,201
|
As of December 31, 2016
|
|||||
Gross
|
Accumulated Amortization
|
Net
|
|||
Trademarks, Copyrights
|
$554,369
|
$545,279
|
$9,090
|
||
Non-Compete Agreements
|
175,316
|
163,566
|
11,750
|
||
$729,685
|
$708,845
|
$20,840
|
As of December 31, 2015
|
|||||
Gross
|
Accumulated Amortization
|
Net
|
|||
Trademarks, Copyrights
|
$554,369
|
$544,504
|
$9,865
|
||
Non-Compete Agreements
|
174,665
|
157,248
|
17,417
|
||
$729,034
|
$701,752
|
$27,282
|
Leather Factory
|
Tandy Leather
|
Total
|
|
2017
|
90
|
1,667
|
1,757
|
2018
|
-
|
1,417
|
1,417
|
2019
|
-
|
666
|
666
|
2020
|
-
|
666
|
666
|
2021
|
-
|
666
|
666
|
Thereafter
|
-
|
5,668
|
5,668
|
·
|
Fair value of financial Instruments
|
·
|
Income taxes
|
·
|
Share-based compensation
|
·
|
Comprehensive income
|
·
|
Shipping and handling costs
|
·
|
Advertising
|
·
|
Cash flows presentation
|
·
|
Reclassifications
|
·
|
Allowance for uncollectible accounts
|
·
|
Sales returns and defective merchandise
|
·
|
Slow-moving and obsolete inventory
|
December 31, 2016
|
December 31, 2015
|
||
INVENTORY
|
|||
On hand:
|
|||
Finished goods held for sale
|
$30,684,026
|
$30,487,764
|
|
Raw materials and work in process
|
1,034,041
|
1,284,567
|
|
Inventory in transit
|
1,459,472
|
1,812,208
|
|
TOTAL
|
$33,177,539
|
$33,584,539
|
PROPERTY AND EQUIPMENT
|
|||
Building
|
$9,105,286
|
$9,232,066
|
|
Land
|
1,451,132
|
1,451,132
|
|
Leasehold improvements
|
1,350,916
|
1,192,761
|
|
Equipment and machinery
|
5,991,343
|
5,086,770
|
|
Furniture and fixtures
|
7,342,642
|
6,889,642
|
|
Vehicles
|
295,033
|
139,837
|
|
25,536,352
|
23,992,208
|
||
Less: accumulated depreciation
|
(9,884,559)
|
(8,297,155)
|
|
TOTAL
|
$15,651,793
|
$15,695,053
|
|
ACCRUED EXPENSES AND OTHER LIABILITIES
|
|
|
|
Accrued bonuses
|
$2,123,942
|
$2,631,971
|
|
Accrued payroll
|
689,150
|
255,058
|
|
Deferred revenue
|
909,297
|
902,236
|
|
Sales and payroll taxes payable
|
494,720
|
383,657
|
|
Inventory in transit
|
1,432,590
|
1,542,352
|
|
Other
|
287,488
|
330,278
|
|
TOTAL
|
$5,937,187
|
$6,045,552
|
Year ended December 31
|
Wholesale
|
Retail
|
International
|
Total
|
2016
|
$13,706
|
$3,993
|
($ 714)
|
$ 16,985
|
2015
|
10,361
|
9,222
|
11,481
|
31,064
|
2014
|
7,681
|
11,089
|
47
|
18,820
|
2016
|
2015
|
||
Business Loan Agreement with BOKF, NA – collateralized by real estate; payable as follows:
|
|||
Line of Credit Note, as amended, in the maximum principal amount of $15,000,000 with features as more fully described above – interest due monthly at LIBOR plus 1.85%; matures September 18, 2021
|
$7,371,729
|
$3,711,225
|
|
Line of Credit Note, as amended, in the maximum principal amount of $6,000,000 with revolving features as more fully described above – interest due monthly at LIBOR plus 1.85%; matures September 18, 2018
|
-
|
-
|
|
$7,371,729
|
$3,711,225
|
||
Less current maturities
|
614,311
|
231,952
|
|
$6,757,419
|
$3,479,273
|
2017
|
$614,311
|
2018
|
1,842,932
|
2019
|
1,842,932
|
2020
|
1,842,932
|
2021
|
1,228,622
|
$7,371,729
|
2016
|
2015
|
|
Capital Lease secured by certain telecommunication equipment – total annual principal payments of $72,686, 1.8% interest, maturing January 2018
|
$73,994
|
$156,271
|
Less amount representing interest
|
1,308
|
4,189
|
Total obligation under capital lease
|
72,686
|
152,082
|
Less - Current maturities
|
72,686
|
72,686
|
Long term obligation under capital lease
|
$ -
|
$79,396
|
Year Ended December 31,
|
Maximum Matching
Contribution per Participant*
|
Total Matching
Contribution
|
2016
|
$10,600
|
$277,753
|
2015
|
$10,600
|
$290,388
|
2014
|
$10,400
|
$286,224
|
2016
|
2015
|
2014
|
||||
Current provision:
|
||||||
Federal
|
$3,108,894
|
$3,045,292
|
$3,368,974
|
|||
State
|
486,565
|
482,186
|
548,225
|
|||
3,595,459
|
3,527,478
|
3,917,199
|
||||
Deferred provision (benefit):
|
||||||
Federal
|
183,520
|
212,563
|
210,343
|
|||
State
|
21,591
|
76,607
|
(26,853)
|
|||
205,111
|
289,170
|
183,490
|
||||
$3,800,570
|
$3,816,648
|
$4,100,689
|
2016
|
2015
|
2014
|
|||
United States
|
$9,070,894
|
$9,272,854
|
$10,339,632
|
||
United Kingdom
|
(81,987)
|
(43,567)
|
557,776
|
||
Canada
|
1,034,027
|
813,824
|
874,571
|
||
Australia
|
82,622
|
48,633
|
102,922
|
||
Spain
|
97,273
|
127,309
|
(67,291)
|
||
$10,202,829
|
$10,219,053
|
$11,807,610
|
2016
|
2015
|
||
Deferred income tax assets:
|
|||
Capitalized inventory costs
|
$265,454
|
$260,385
|
|
Warrants and share-based compensation
|
44,151
|
44,151
|
|
Accrued expenses, reserves, and other
|
65,631
|
66,444
|
|
Total deferred income tax assets
|
$375,236
|
$370,980
|
|
Deferred income tax liabilities:
|
|||
Property and equipment depreciation
|
$1,728,265
|
$1,529,397
|
|
Goodwill and other intangible assets amortization
|
227,767
|
217,268
|
|
Total deferred income tax liabilities
|
$1,956,032
|
$1,746,665
|
2016
|
2015
|
2014
|
|
Statutory rate – Federal US income tax
|
34%
|
34%
|
34%
|
State and local taxes
|
6%
|
6%
|
5%
|
Non-U.S. income tax at different rates
|
-
|
-
|
(1%)
|
Domestic production activities deduction
|
(1%)
|
(1%)
|
(1%)
|
Other, net
|
(2%)
|
(2%)
|
(2%)
|
Effective rate
|
37%
|
37%
|
35%
|
Year ending December 31:
|
|
2017
|
$3,914,550
|
2018
|
2,999,262
|
2019
|
2,256,721
|
2020
|
1,701,366
|
2021
|
1,074,070
|
2022
|
545,740
|
2023
|
427,800
|
2024
|
246,698
|
2025
|
180,922
|
2026
|
6,206
|
Total minimum lease payments
|
$13,353,335
|
a)
|
Stock Option Plan
|
2016
|
2015
|
2014
|
|||||||||
Weighted
|
Weighted
|
Weighted
|
|||||||||
Average
|
Average
|
Average
|
|||||||||
Option
|
Exercise
|
Option
|
Exercise
|
Option
|
Exercise
|
||||||
Shares
|
Price
|
Shares
|
Price
|
Shares
|
Price
|
||||||
Outstanding at January 1
|
68,400
|
$5.17
|
72,400
|
$5.16
|
84,600
|
$5.04
|
|||||
Granted
|
-
|
-
|
-
|
-
|
-
|
-
|
|||||
Forfeited or expired
|
(12,000)
|
5.30
|
(2,000)
|
4.96
|
-
|
-
|
|||||
Exchanged
|
-
|
-
|
-
|
-
|
-
|
-
|
|||||
Exercised
|
-
|
-
|
(2,000)
|
|
4.96
|
(12,200)
|
|
4.32
|
|||
Outstanding at December 31
|
56,400
|
$5.14
|
68,400
|
$5.17
|
72,400
|
$5.16
|
|||||
Exercisable at end of year
|
56,400
|
$5.14
|
68,400
|
$5.17
|
72,400
|
$5.16
|
|||||
Weighted-average fair value of
|
|||||||||||
options granted during year
|
n/a
|
n/a
|
n/a
|
Options Outstanding & Exercisable
|
||||||
Weighted
|
Weighted
|
|||||
Average
|
Average
|
|||||
Option
|
Exercise
|
Maturity
|
||||
Exercise Price Range
|
Shares
|
Price
|
(Years)
|
|||
$4.41
|
20,400
|
$4.41
|
3.77
|
|||
$4.80
|
9,000
|
4.80
|
4.22
|
|||
$5.30 to $6.87
|
27,000
|
5.81
|
4.95
|
|||
56,400
|
$5.14
|
4.41
|
2016
|
2015
|
2014
|
|
Weighted average grant-date fair value of stock options granted
|
n/a
|
n/a
|
n/a
|
Total fair value of stock options vested
|
n/a
|
n/a
|
n/a
|
Total intrinsic value of stock options exercised
|
$ -
|
$2,953
|
$14,816
|
Shares
|
Grant Fair Value
|
|
Balance, January 1, 2015
|
34,601
|
$8.96
|
Granted
|
34,484
|
8.99
|
Forfeited
|
-
|
-
|
Vested
|
(8,652)
|
8.96
|
Balance, December 31, 2015
|
60,433
|
$8.97
|
Balance, January 1, 2016
|
60,433
|
$8.97
|
Granted
|
33,685
|
7.14
|
Forfeited
|
(8,187)
|
8.97
|
Vested
|
(20,784)
|
8.97
|
Balance, December 31, 2016
|
65,147
|
$8.03
|
2017
|
$173,136
|
2018
|
123,693
|
2019
|
67,190
|
2020
|
10,021
|
b)
|
Cash Dividend
|
c)
|
Stockholder Rights Plan
|
d)
|
Share Repurchase Program
|
a.
|
Wholesale Leathercraft, which consists of a chain of wholesale stores operating under the name, The Leather Factory, located in North America;
|
b.
|
Retail Leathercraft, which consists of a chain of retail stores operating under the name, Tandy Leather Company, located in North America;
|
c.
|
International Leathercraft, which sells to both wholesale and retail customers. We have four stores. One store is located in each of Northampton, United Kingdom; Sydney, Australia; Jerez, Spain; and Manchester, United Kingdom which opened in October 2015.
|
Wholesale Leathercraft
|
Retail Leathercraft
|
International Leathercraft
|
Total
|
|
For the year ended December 31, 2016
|
||||
Net Sales
|
$25,371,580
|
$53,670,340
|
$3,882,072
|
$82,923,992
|
Gross Profit
|
18,097,205
|
31,217,798
|
2,398,239
|
51,713,242
|
Operating earnings
|
5,254,227
|
4,970,546
|
75,958
|
10,300,731
|
Interest expense
|
155,189
|
-
|
-
|
155,189
|
Other expense, net
|
(35,290)
|
-
|
(21,997)
|
(57,287)
|
Income before income taxes
|
5,134,328
|
4,970,546
|
97,955
|
10,202,829
|
Depreciation and amortization
|
969,202
|
662,332
|
87,620
|
1,719,154
|
Fixed asset additions
|
869,250
|
740,578
|
87,875
|
1,697,704
|
Total assets
|
$50,067,046
|
$16,435,386
|
$4,150,288
|
$70,652,720
|
For the year ended December 31, 2015
|
||||
Net Sales
|
$26,754,165
|
$53,714,432
|
$3,692,603
|
$84,161,200
|
Gross Profit
|
18,579,494
|
31,258,961
|
2,232,605
|
52,071,060
|
Operating earnings
|
4,663,590
|
5,689,814
|
121,296
|
10,474,700
|
Interest expense
|
330,004
|
-
|
-
|
330,004
|
Other expense, net
|
(63,230)
|
-
|
(11,127)
|
(74,357)
|
Income before income taxes
|
4,396,816
|
5,689,814
|
132,423
|
10,219,053
|
Depreciation and amortization
|
950,174
|
559,418
|
57,580
|
1,567,172
|
Fixed asset additions
|
945,998
|
932,231
|
285,811
|
2,164,040
|
Total assets
|
$42,141,174
|
$17,753,324
|
$4,716,578
|
$64,611,076
|
For the year ended December 31, 2014
|
||||
Net Sales
|
$27,285,884
|
$51,805,944
|
$4,339,084
|
$83,430,912
|
Gross Profit
|
18,393,969
|
30,880,718
|
2,850,070
|
52,124,757
|
Operating earnings
|
5,300,413
|
6,077,345
|
580,271
|
11,958,029
|
Interest expense
|
225,584
|
-
|
-
|
225,584
|
Other expense, net
|
(61,984)
|
-
|
(13,181)
|
(75,165)
|
Income before income taxes
|
5,136,813
|
6,077,345
|
593,452
|
11,807,610
|
Depreciation and amortization
|
911,327
|
460,534
|
64,763
|
1,436,624
|
Fixed asset additions
|
909,260
|
1,243,123
|
51,807
|
2,204,190
|
Total assets
|
$43,000,030
|
$16,608,386
|
$3,265,458
|
$62,873,874
|
2016
|
2015
|
2014
|
|
United States
|
$70,886,401
|
$72,061,009
|
$69,791,099
|
Canada
|
7,199,155
|
7,543,468
|
8,342,896
|
All other countries
|
4,838,436
|
4,556,723
|
5,296,917
|
$82,923,992
|
$84,161,200
|
$83,430,912
|
First
|
Second
|
Third
|
Fourth
|
||
2016
|
Quarter
|
Quarter
|
Quarter
|
Quarter
|
|
Net sales
|
$20,672,227
|
$19,552,905
|
$18,628,362
|
$24,100,498
|
|
Gross profit
|
12,652,746
|
12,895,790
|
11,644,871
|
14,519,835
|
|
Net income
|
1,520,997
|
1,820,915
|
1,000,350
|
2,059,997
|
|
Net income per common share:
|
|||||
Basic
|
$0.16
|
$0.19
|
$0.11
|
$0.23
|
|
Diluted
|
$0.16
|
$0.19
|
$0.11
|
$0.23
|
|
Weighted average number of common shares outstanding:
|
|||||
Basic
|
9,698,951
|
9,209,446
|
9,188,483
|
9,188,483
|
|
Diluted
|
9,718,453
|
9,227,941
|
9,206,382
|
9,301,867
|
|
First
|
Second
|
Third
|
Fourth
|
||
2015
|
Quarter
|
Quarter
|
Quarter
|
Quarter
|
|
Net sales
|
$20,788,764
|
$19,773,528
|
$19,355,937
|
$24,292,971
|
|
Gross profit
|
12,582,927
|
12,814,382
|
11,832,697
|
14,841,054
|
|
Net income
|
1,444,407
|
1,507,896
|
1,111,344
|
2,338,758
|
|
Net income per common share:
|
|||||
Basic
|
$0.14
|
$0.15
|
$0.11
|
$0.24
|
|
Diluted
|
$0.14
|
$0.15
|
$0.11
|
$0.24
|
|
Weighted average number of common shares outstanding:
|
|||||
Basic
|
10,211,333
|
10,212,933
|
10,175,650
|
9,692,860
|
|
Diluted
|
10,241,096
|
10,241,164
|
10,199,092
|
9,712,571
|
·
|
Consolidated Balance Sheets at December 31, 2016 and 2015
|
·
|
Consolidated Statements of Comprehensive Income for the years ended December 31, 2016, 2015, and 2014
|
·
|
Consolidated Statements of Cash Flows for the years ended December 31, 2016, 2015, and 2014
|
·
|
Consolidated Statements of Stockholders' Equity for the years ended December 31, 2016, 2015, and 2014
|
By:
|
/s/ Shannon L. Greene
|
|
Shannon L. Greene
|
||
Chief Executive Officer
|
||
Signature
|
Title
|
Date
|
/s/ Joseph R. Mannes
|
Chairman of the Board
|
March 27, 2017
|
Joseph R. Mannes
|
||
/s/ Shannon L. Greene
|
Chief Executive Officer, Director
|
March 27, 2017
|
Shannon L. Greene
|
(principal executive officer)
|
|
/s/ Mark J. Angus
|
President, Assistant Secretary, and Director
|
March 27, 2017
|
Mark J. Angus
|
||
/s/ Tina L. Castillo
|
Chief Financial Officer and Treasurer
|
March 27, 2017
|
Tina L. Castillo
|
(principal financial officer and principal accounting officer)
|
|
/s/ William M. Warren
|
Secretary, General Counsel, and Director
|
March 27, 2017
|
William M. Warren
|
||
/s/ Jefferson Gramm
|
Director
|
March 27, 2017
|
Jefferson Gramm
|
||
/s/ T. Field Lange
|
Director
|
March 27, 2017
|
T. Field Lange
|
||
/s/ L. Edward Martin III
|
Director
|
March 27, 2017
|
L. Edward Martin III
|
||
/s/ James Pappas
|
Director
|
March 27, 2017
|
James Pappas
|
TANDY LEATHER FACTORY, INC. AND SUBSIDIARIES
EXHIBIT INDEX
|
|
Exhibit
Number
|
Description
|
3.1
|
Certificate of Incorporation of The Leather Factory, Inc., and Certificate of Amendment to Certificate of Incorporation of The Leather Factory, Inc. filed as Exhibit 3.1 to Tandy Leather Factory, Inc.’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on August 12, 2005 and incorporated by reference herein.
|
3.2
|
Bylaws of The Leather Factory, Inc. (n/k/a Tandy Leather Factory, Inc.) filed as Exhibit 3.5 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on July 14, 2004 and incorporated by reference herein.
|
3.3
|
Certificate of Designations of Series A Junior Participating Preferred Stock of Tandy Leather Factory, Inc. filed as Exhibit 3.1 to Tandy Leather Factory, Inc.’s Current Report on Form 8-K filed with the Securities and Exchange Commission on June 10, 2013 and incorporated by reference herein.
|
4.1
|
Rights Agreement dated as of June 6, 2013 between Tandy Leather Factory, Inc. and Broadridge Corporate Issuer Solutions, Inc., as Rights Agent (including the Certificate of Designations of Series A Junior Preferred Stock attached thereto as Exhibit A, the form of Right Certificate attached thereto as Exhibit B and the Summary of Rights attached thereto as Exhibit C), filed as Exhibit 4.1 to Tandy Leather Factory Inc.’s Current Report on Form 8-K filed with the Securities and Exchange Commission on June 10, 2013 and incorporated by reference herein.
|
10.1
|
2007 Director Non-qualified Stock Option Plan of Tandy Leather Factory, Inc. dated March 22, 2007, filed as an Exhibit to Tandy Leather Factory, Inc.’s Definitive Proxy Statement, filed with the Securities and Exchange Commission on April 18, 2007 and incorporated by reference herein.
|
10.2
|
First Amendment to 2007 Director Non-Qualified Stock Option Plan, dated May 3, 2010, filed as Exhibit 10.2 to Tandy Leather Factory Inc.’s Current Report on Form 8-K filed with the Securities and Exchange Commission on May 4, 2010 and incorporated by reference herein.
|
10.3
|
Second Amendment to 2007 Director Non-Qualified Stock Option Plan, dated October 7, 2010, filed as Exhibit 10.3 to Tandy Leather Factory Inc.’s Current Report on Form 8-K filed with the Securities and Exchange Commission on October 12, 2010 and incorporated by reference herein.
|
10.4
|
Third Amendment to 2007 Director Non-Qualified Stock Option Plan, dated February 11, 2014, filed as Exhibit 10.5 to Tandy Leather Factory Inc.’s Current Report on Form 8-K filed with the Securities and Exchange Commission on February 14, 2014 and incorporated by reference herein.
|
10.5
|
Business Loan Agreement, dated September 18, 2015, by and between Tandy Leather Factory, Inc. and BOKF, NA dba Bank of Texas, filed as Exhibit 10.2 to Tandy Leather Factory’s Current Report on Form 8-K filed with the Securities and Exchange Commission on September 24, 2015 and incorporated by reference herein
|
10.6
|
$15,000,000 Promissory Note, dated August 25, 2016, by and between Tandy Leather Factory, Inc. and BOKF, NA dba Bank of Texas, filed as Exhibit 10.2 to Tandy Leather Factory’s Current Report on Form 8-K filed with the Securities and Exchange Commission on September 21, 2016 and incorporated by reference herein.
|
10.7
|
$6,000,000 Promissory Note, dated August 25, 2016, by and between Tandy Leather Factory, Inc. and BOKF, NA dba Bank of Texas, filed as Exhibit 10.1 to Tandy Leather Factory’s Current Report on Form 8-K filed with the Securities and Exchange Commission on September 21, 2016 and incorporated by reference herein.
|
10.8
|
$15,000,000 Promissory Note, dated August 25, 2016, by and between Tandy Leather Factory, Inc. and BOKF, NA dba Bank of Texas, filed as Exhibit 10.2 to Tandy Leather Factory’s Current Report on Form 8-K filed with the Securities and Exchange Commission on September 21, 2016 and incorporated by reference herein.
|
10.9
|
Deed of Trust, dated as of September 18, 2015, by and among Tandy Leather Factory, Inc., Jeffrey L Seasor and BOKF, NA dba Bank of Texas, filed as Exhibit 10.1 to Tandy Leather Factory’s Current Report on Form 8-K filed with the Securities and Exchange Commission on September 24, 2015 and incorporated by reference herein.
|
10.10
|
Form of Change of Control Agreement between the Company and each of Jon Thompson, Shannon Greene and Mark Angus, each effective as of December 3, 2012, filed as Exhibit 10.1 to Tandy Leather Factory’s Current Report on Form 8-K filed with the Securities and Exchange Commission on December 6, 2012 and incorporated by reference herein.
|
10.11
|
Tandy Leather Factory, Inc. 2013 Restricted Stock Plan, filed as Exhibit 10.1 to Tandy Leather Factory’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on November 14, 2013 and incorporated by reference herein.
|
10.12
|
Form of Non-Employee Director Restricted Stock Agreement under Tandy Leather Factory, Inc.’s 2013 Restricted Stock Plan, filed as Exhibit 10.1 to Tandy Leather Factory, Inc.’s Current Report on Form 8-K filed with the Securities and Exchange Commission on February 14, 2014 and incorporated by reference herein.
|
10.13
|
Form of Employee Restricted Stock Award Agreement under Tandy Leather Factory, Inc.’s 2013 Restricted Stock Plan, filed as Exhibit 10.6 to Tandy Leather Factory, Inc.’s Current Report on Form 8-K filed with the Securities and Exchange Commission on February 14, 2014 and incorporated by reference herein.
|
14.1
|
Code of Business Conduct and Ethics of The Leather Factory, Inc., adopted by the Board of Directors on February 26, 2004, filed as Exhibit 14.1 to the Annual Report on Form 10-K of The Leather Factory, Inc. (Commission File No. 1-12368) filed with the Securities and Exchange Commission on March 29, 2004 and incorporated by reference herein.
|
*21.1
|
Subsidiaries of Tandy Leather Factory, Inc.
|
*31.1
|
Certification by the Chief Executive Officer and President pursuant to Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934
|
*31.2
|
Certification by the Chief Financial Officer and Treasurer pursuant to Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934
|
*32.1
|
Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
*101.INS
|
XBRL Instance Document
|
*101.SCH
|
XBRL Taxonomy Extension Schema Document
|
*101.CAL
|
XBRL Taxonomy Extension Calculation Document
|
*101.DEF
|
XBRL Taxonomy Extension Definition Document
|
*101.LAB
|
XBRL Taxonomy Extension Labels Document
|
*101.PRE
|
XBRL Taxonomy Extension Presentation Document
|
·
|
The Leather Factory, Inc., a Nevada corporation
|
·
|
The Leather Factory of Nevada Investments, Inc., a Nevada corporation
|
·
|
The Leather Factory, LP, a Texas limited partnership
|
·
|
The Leather Factory, Inc., an Arizona corporation
|
·
|
Hi-Line Leather & Manufacturing Company, a California corporation
|
·
|
Roberts, Cushman & Company, Inc., a New York corporation
|
·
|
The Leather Factory of Canada Ltd., an Ontario domiciled Canadian corporation
|
·
|
Tandy Leather Company, Inc., a Nevada corporation
|
·
|
Tandy Leather Company Investments, Inc. a Nevada corporation
|
·
|
Tandy Leather Company, LP, a Texas limited partnership
|
·
|
Tandy Leather Factory Australia Pty Ltd, an Australian proprietary company
|
·
|
Tandy Leather Factory Espana, S.L., a Spanish limited liability company
|
·
|
Tandy Leather Factory UK Limited, a United Kingdom limited liability company
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
/s/ Shannon L. Greene
|
|
Shannon L. Greene
|
|
Chief Executive Officer
|
|
(principal executive officer)
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
/s/ Tina L. Castillo
|
|
Tina L. Castillo
|
|
Chief Financial Officer and Treasurer
|
|
(principal financial officer)
|
i.
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
ii.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
March 27, 2017
|
By: /s/ Shannon L. Greene
|
Shannon L. Greene
Chief Executive Officer
|
By: /s/ Tina L. Castillo
|
|
Tina L. Castillo
Chief Financial Officer and Treasurer
|
Document And Entity Information - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Mar. 22, 2017 |
Jun. 30, 2016 |
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Document Information [Line Items] | |||
Entity Registrant Name | TANDY LEATHER FACTORY INC | ||
Entity Central Index Key | 0000909724 | ||
Trading Symbol | tlf | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Common Stock, Shares Outstanding (in shares) | 9,486,978 | ||
Entity Public Float | $ 49,870,948 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2016 | ||
Document Fiscal Year Focus | 2016 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false |
Consolidated Balance Sheets (Parentheticals) - USD ($) |
Dec. 31, 2016 |
Dec. 31, 2015 |
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Accounts receivable-trade, net allowance for doubtful accounts | $ 2,404 | $ 1,746 |
Preferred stock, par value (in dollars per share) | $ 0.10 | $ 0.10 |
Preferred stock, shares authorized (in shares) | 20,000,000 | 20,000,000 |
Preferred stock, issued (in shares) | 0 | 0 |
Preferred stock, outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.0024 | $ 0.0024 |
Common stock, shares authorized (in shares) | 25,000,000 | 25,000,000 |
Common stock, shares issued (in shares) | 11,309,326 | 11,275,641 |
Common stock, shares outstanding (in shares) | 9,266,496 | 9,753,293 |
Treasury stock, shares (in shares) | 2,042,830 | 1,522,348 |
Consolidated Statements of Comprehensive Income - USD ($) |
12 Months Ended | ||
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Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
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Net sales | $ 82,923,992 | $ 84,161,200 | $ 83,430,912 |
COST OF SALES | 31,210,750 | 32,090,140 | 31,306,155 |
Gross Profit | 51,713,242 | 52,071,060 | 52,124,757 |
OPERATING EXPENSES | 41,412,511 | 41,596,360 | 40,166,728 |
INCOME FROM OPERATIONS | 10,300,731 | 10,474,700 | 11,958,029 |
OTHER (INCOME) EXPENSE: | |||
Interest expense | 155,189 | 330,004 | 225,584 |
Other, net | (57,287) | (74,357) | (75,165) |
Total other expense | 97,902 | 255,647 | 150,419 |
INCOME BEFORE NCOME TAXES | 10,202,829 | 10,219,053 | 11,807,610 |
PROVISION FOR INCOME TAXES | 3,800,570 | 3,816,648 | 4,100,689 |
NET INCOME | 6,402,259 | 6,402,405 | 7,706,921 |
Foreign currency translation adjustments | (205,450) | (999,621) | (776,307) |
COMPREHENSIVE INCOME | $ 6,196,809 | $ 5,402,784 | $ 6,930,614 |
NET INCOME PER COMMON SHARE: | |||
BASIC (in dollars per share) | $ 0.69 | $ 0.64 | $ 0.76 |
DILUTED (in dollars per share) | $ 0.69 | $ 0.63 | $ 0.75 |
Weighted Average Number of Shares Outstanding: | |||
Basic (in shares) | 9,301,867 | 10,077,506 | 10,203,063 |
Diluted (in shares) | 9,321,558 | 10,102,760 | 10,241,121 |
Consolidated Statements of Stockholders' Equity - USD ($) |
Common Stock [Member] |
Additional Paid-in Capital [Member] |
Treasury Stock [Member] |
Retained Earnings [Member] |
AOCI Attributable to Parent [Member] |
Total |
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Balance (in shares) at Dec. 31, 2013 | 10,198,733 | |||||
Balance at Dec. 31, 2013 | $ 26,862 | $ 5,892,907 | $ (2,894,068) | $ 41,507,592 | $ 88,249 | $ 44,621,542 |
Shares issued - stock options exercised (in shares) | 12,200 | 2,000 | ||||
Shares issued - stock options exercised | $ 29 | 52,693 | $ 52,722 | |||
Share-based compensation (in shares) | 34,601 | |||||
Share-based compensation | $ 93 | 67,725 | 67,818 | |||
Net income | 7,706,921 | 7,706,921 | ||||
Cash dividend paid | (2,549,684) | (2,549,684) | ||||
Translation adjustment | (776,307) | (776,307) | ||||
Balance (in shares) at Dec. 31, 2014 | 10,245,534 | |||||
Balance at Dec. 31, 2014 | $ 26,984 | 6,013,325 | (2,894,068) | 46,664,829 | (688,058) | $ 49,123,012 |
Purchase of Treasury stock (in shares) | 0 | |||||
Shares issued - stock options exercised (in shares) | 2,000 | |||||
Shares issued - stock options exercised | $ 5 | 9,915 | $ 9,920 | |||
Share-based compensation (in shares) | 34,484 | |||||
Share-based compensation | $ 73 | 145,249 | 145,322 | |||
Net income | 6,402,405 | 6,402,405 | ||||
Translation adjustment | (999,621) | (999,621) | ||||
Balance (in shares) at Dec. 31, 2015 | 9,753,293 | |||||
Balance at Dec. 31, 2015 | $ 27,062 | 6,168,489 | (6,602,930) | 53,067,234 | (1,687,679) | $ 50,972,176 |
Purchase of Treasury stock (in shares) | (528,725) | (529,000) | ||||
Purchase of Treasury stock | (3,708,862) | $ (3,708,862) | ||||
Share-based compensation (in shares) | 33,685 | |||||
Share-based compensation | $ 80 | 199,790 | 199,870 | |||
Net income | 6,402,259 | 6,402,259 | ||||
Translation adjustment | (205,450) | (205,450) | ||||
Balance (in shares) at Dec. 31, 2016 | 9,266,496 | |||||
Balance at Dec. 31, 2016 | $ 27,142 | 6,368,279 | (10,278,584) | 59,469,493 | (1,893,129) | $ 53,693,201 |
Purchase of Treasury stock (in shares) | (520,482) | (520,500) | ||||
Purchase of Treasury stock | $ (3,675,654) | $ (3,675,654) |
Note 1 - Description of Business |
12 Months Ended |
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Dec. 31, 2016 | |
Notes to Financial Statements | |
Business Description and Accounting Policies [Text Block] | 1. DESCRIPTION OF BUSINESSOur primary line of business is the sale of leather, leather crafts, and related supplies. We sell our products via company-owned stores throughout the United States, Canada, the United Kingdom, Australia, and Spain. Numerous customers including retailers, wholesalers, assemblers, distributors, and other manufacturers are geographically disbursed throughout the world. We also have light manufacturing facilities in Texas. |
Note 2 - Significant Accounting Policies |
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Notes to Financial Statements | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Significant Accounting Policies [Text Block] | 2 . SIGNIFICANT ACCOUNTING POLICIES
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the periods presented. Actual results could differ from those estimates. Assets and liabilities with reported amounts based on significant estimates include trade accounts receivable, inventory (slow-moving), goodwill, and deferred income taxes.
Our consolidated financial statements include the accounts of Tandy Leather Factory, Inc. and its wholly owned subsidiaries, The Leather Factory, L.P. (a Texas limited partnership) and its corporate partners, Tandy Leather Company, L.P. (a Texas limited partnership) and its corporate partners, Mid-Continent Leather Sales, Inc. (an Oklahoma corporation), Roberts, Cushman & Company, Inc. (a Texas corporation), The Leather Factory of Canada, Ltd. (a Canadian corporation), Tandy Leather Factory UK Limited (a UK corporation), Tandy Leather Factory Australia Pty. Limited (an Australian corporation), and Tandy Leather Factory España, S.L. (a Spanish corporation). All intercompany accounts and transactions have been eliminated in consolidation.
Foreign currency translation adjustments arise from activities of our foreign subsidiaries. Results of operations are translated into U.S. dollars using the average exchange rates during the period, while assets and liabilities are translated using period-end exchange rates. Foreign currency translation adjustments of assets and liabilities are recorded in stockholders’ equity. Gains and losses resulting from foreign currency transactions are reported in the statements of income under the caption “Other (Income) Expense”, net, for all periods presented. We recognized foreign currency transaction gains (losses) of $19,000, $24,000, and ($13,900), in 2016, 2015, and 2014, respectively.
Our sales generally occur via two methods: (1) at the store counter, and (2) shipment by common carrier. Sales at the counter are recorded and title passes as transactions occur. Otherwise, sales are recorded and title passes when the merchandise is shipped to the customer. Shipping terms are normally FOB shipping point. Sales tax and comparable foreign tax is excluded from revenue. We offer an unconditional satisfaction guarantee to all customers and accept all product returns. Net sales represent gross sales less negotiated price allowances, product returns, and allowances for defective merchandise.
We maintain four price levels on a consistent basis: retail, wholesale, business, and distributor. Gross sales are reported after deduction of discounts. We do not pay slotting fees or make other payments to resellers.
Cost of goods sold includes inbound freight and duty charges from vendors to our central warehouse, freight and handling charges to move merchandise from our central warehouse to our stores, and manufacturing overhead, as appropriate. Operating expenses include all selling, general and administrative costs including wages and related employee expenses (payroll taxes, health benefits, savings plans, etc.), advertising, outbound freight charges (to ship merchandise to customers), rent, and utilities.
Property and equipment are stated at cost. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, which are three to ten years for equipment and machinery, seven to fifteen years for furniture and fixtures, five years for vehicles, and forty years for buildings and related improvements. Leasehold improvements are amortized over the lesser of the life of the lease or the useful life of the asset. Repairs and maintenance costs are expensed as incurred.
Inventory is valued at the lower of first -in, first -out cost or market. In addition, the value of inventory is periodically reduced to net realizable value for slow-moving or obsolete inventory based on management's review of items on hand compared to their estimated future demand.
We evaluate long-lived assets for indicators of impairment whenever events or changes in circumstances indicate their carrying amounts may not be recoverable. Additionally, for store assets, we evaluate the performance of individual stores for indicators of impairment and underperforming stores are selected for further evaluation of the recoverability of the carrying amounts. The evaluation of long-lived assets is performed at the lowest level of identifiable cash flows, which is at the individual store level. Impairment is determined when estimated future undiscounted cash flows associated with an asset are less than the asset’s carrying value.To date, we have not recognized any impairment of our long-lived assets.
Basic earnings per share are computed based on the weighted average number of common shares outstanding during the period. Diluted earnings per share includes, to the extent inclusion of such shares would be dilutive to earnings per share, the effect of outstanding options and warrants, computed using the treasury stock method.
For additional disclosures regarding the restricted stock awards and the employee stock options, see Note 11. The net effect of converting stock options and restricted stock grants to purchase 90,085, 68,400, and 107,001 shares of common stock at option prices less than the average market prices has been included in the computations of diluted EPS for the years ended December 31, 2016, 2015, and 2014, respectively.
Goodwill represents the excess of the purchase price over the fair value of net assets acquired in a business combination. Goodwill is required to be evaluated for impairment on an annual basis, absent indicators of impairment during the interim. Application of the goodwill impairment test requires exercise of judgment, including the estimation of future cash flows, determination of appropriate discount rates and other important assumptions. Changes in these estimates and assumptions could materially affect the determination of fair value and/or goodwill impairment for each reporting unit. Goodwill is not amortized, but is evaluated at least annually for impairment. We completed our annual goodwill impairment analysis as of December 31 for each of the years ended December 31, 2016, 2015, and 2014 and determined that no adjustment to the carrying value of goodwill was required. A summary of changes in our goodwill is as follows:
Our intangible assets and related accumulated amortization consisted of the following:
Excluding goodwill, we have no intangible assets not subject to amortization under U.S. GAAP. Amortization of intangible assets of $6,442 in 2016, $40,744 in 2015, and $45,202 in 2014 was recorded in operating expenses. The weighted average amortization period is 15 years for trademarks and copyrights. Based on the current amount of intangible assets subject to amortization, we estimate amortization expense as follows for the next five years:
We measure fair value as an exit price, which is the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As a basis for considering such assumptions, accounting standards establish a three -tier fair value hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value:Level 1 – observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.Level 2 – include other inputs that are directly or indirectly observable in the marketplace.Level 3 – significant unobservable inputs which are supported by little or no market activity.Classification of the financial asset or liability within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement. Our principal financial instruments held consist of certificates of deposit, accounts receivable, accounts payable, notes payable, and long-term debt. The carrying value of certificates of deposit, accounts receivable and accounts payable approximate their fair value due to the relatively short-term nature of the accounts. The terms of the long-term debt are considered reasonable for this type of financing; therefore, the carrying amount approximates fair value.
We account for income taxes using the asset and liability method. Under this method, the amount of taxes currently payable or refundable is accrued, and deferred tax assets and liabilities are recognized for the estimated future tax consequences of temporary differences that currently exist between the tax basis and the financial reporting basis of our assets and liabilities. Deferred tax assets and liabilities are measured using the enacted tax rates in effect in the years when those temporary differences are expected to reverse. The effect on deferred taxes from a change in tax rate is recognized through continuing operations in the period that includes the enactment date of the change. Changes in tax laws and rates could affect recorded deferred tax assets and liabilities in the future. A tax benefit from an uncertain tax position may be recognized when it is more-likely-than-not that the position will be sustained upon examination, including resolutions of any related appeals or litigation processes, based on the technical merits. Income tax position must meet a more-likely-than-not recognition threshold to be recognized.We recognize tax liabilities for uncertain tax positions and adjust these liabilities when our judgment changes as a result of the evaluation of new information not previously available. Due to the complexity of some of these uncertainties, the ultimate resolution may result in a payment that is materially different from the current estimate of the tax liabilities. These differences will be reflected as increases or decreases to income tax expense and the effective tax rate in the period in which new information becomes available. We may be subject to periodic audits by the Internal Revenue Service and other taxing authorities. These audits may challenge certain of our tax positions, such as the timing and amount of deductions and allocation of taxable income to the various jurisdictions.
We have one stock option plan which permits annual stock option grants to non-employee directors with an exercise price equal to the fair market value of the shares at the date of grant and with a ten year term. These options vest and become exercisable six months from the option grant date. Under this plan, no stock options were awarded in 2016, 2015 or 2014, therefore, we did not recognize any share based compensation expense for these options during those periods.We also have a restricted stock plan that was adopted by our Board of Directors in January 2013 and approved by our stockholders in June 2013. The plan reserves up to 300,000 shares of our common stock for restricted stock awards to our executive officers, non-employee directors, and other key employees. Awards granted under the plan may be stock awards or performance awards, and may be subject to a graded vesting schedule with a minimum vesting period of four years. The fair value of nonvested restricted common stock awards is the market value of our common stock on the date of grant. Compensation costs for these awards will be recognized on a straight-line basis over the four year vesting period.
Comprehensive income includes net income and certain other items that are recorded directly to Stockholders’ Equity. The Company’s only source of other comprehensive income is foreign currency translation adjustments.
All shipping and handling costs incurred by us are included in operating expenses on the statements of income. These costs totaled approximately $1,982,000, $2,012,000, and $2,046,000 for the years ended December 31, 2016, 2015, and 2014, respectively.
With the exception of catalog costs, advertising costs are expensed as incurred. Catalog costs are capitalized and expensed over the estimated useful life of the particular catalog in question, which is typically twelve to eighteen months. Such capitalized costs are included in other current assets and totaled $213,000 and $181,000 at December 31, 2016 and 2015, respectively. Total advertising expense was $4,759,000 in 2016; $4,826,000 in 2015; and $4,339,000 in 2014.
For purposes of the statement of cash flows, we consider all highly liquid investments with initial maturities of three months or less from the date of purchase to be cash equivalents.
Certain reclassifications have been made to the prior year financial statements to conform to the current year presentation. |
Note 3 - Valuation and Qualifying Accounts |
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Dec. 31, 2016 | |||||||
Notes to Financial Statements | |||||||
Schedule of Valuation and Qualifying Accounts Disclosure [Text Block] | 3 . VALUATION AND QUALIFYING ACCOUNTS
We maintain allowances for bad debts based on factors such as the composition of accounts receivable, the age of the accounts, historical bad debt experience, and our evaluation of the financial condition and past collection history of each customer. Write-offs have historically not been material, but are evaluated for write off as they are deemed uncollectible based on a periodic review of accounts. Our allowance for doubtful accounts was approximately $2,400 and $1,700 at December 31, 2016 and 2015, respectively.
Product returns are generally recorded directly against sales as those returns occur. Historically, the amount of returns is immaterial and as a result, no reserve is recorded in the financial statements.
The majority of inventory items maintained by us have no restrictive shelf life. We review all inventory items annually to determine what items should be eliminated from the product line. Items are selected for several reasons: (1) the item is slow-moving; (2) the supplier is unable to provide an acceptable quality or quantity; or (3) to maintain a freshness in the product line. Reductions in inventory for slow-moving and obsolete inventory are recorded directly against inventory. |
Note 4 - Balance Sheet Components |
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Notes to Financial Statements | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Supplemental Balance Sheet Disclosures [Text Block] | 4. BALANCE SHEET COMPONENTS
Depreciation expense was $1,717,548, $1,520,385, and $1,391,422 for the years ended December 31, 2016, 2015, and 2014, respectively.Loss (gain) from abandonment and/or disposal of assets, which is included in operating expenses, is as follows, by segment:
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Note 5 - Notes Payable and Long-term Debt |
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Debt Disclosure [Text Block] | 5. NOTES PAYABLE AND LONG-TERM DEBTOn September 18, 2015, we executed a Promissory Note and Business Loan Agreement with BOKF, NA dba Bank of Texas (“BOKF”), which provides us with a line of credit facility of up to $6,000,000 and is secured by our inventory. On August 25, 2016, this line of credit was amended to extend the maturity from September 18, 2017 to September 18, 2018. The Business Loan Agreement contains covenants that we will maintain a funded debt to EBITDA ratio of no greater than 1.5 to 1 and that we will maintain a Fixed Charge Coverage Ratio greater than or equal to 1.2 to 1. Both ratios are calculated quarterly and are based on a trailing four quarter basis. Also on September 18, 2015, we executed a Promissory Note with BOKF, which provides us with a line of credit facility of up to $10,000,000 for the purpose of purchasing our common stock. On August 25, 2016, this line of credit was amended to increase the availability from $10,000,000 to $15,000,000 for the purchase of shares of our common stock through the earlier of August 25, 2017 or the date on which the entire amount is drawn. During this time period, we will make monthly interest-only payments. At the end of this time period, the principal balance will be rolled into a 4 -year term note. This Promissory Note is secured by a Deed of Trust on the real estate located at 1900 SE Loop 820, Fort Worth, Texas. During the year ended December 31, 2016, we drew approximately $3.7 million on this line of credit which was used to purchase approximately 520,500 shares of our common stock. At December 31, 2016, the unused portion of the line of credit was approximately $7.6 million.Amounts drawn under either Promissory Note accrue interest at the London interbank Eurodollar market rate for U.S. dollars (commonly known as “LIBOR”) plus 1.85% (2.557% and 2.263% at December 31, 2016 and December 31, 2015, respectively).On July 31, 2007, we entered into a Credit Agreement and Line of Credit Note with JPMorgan Chase Bank, N.A., pursuant to which the bank agreed to provide us with a credit facility of up to $5,500,000 to facilitate our purchase of real estate consisting of a 191,000 square foot building situated on 30 acres of land located at 1900 SE Loop 820 in Fort Worth, Texas. Proceeds in the amount of $4,050,000 were used to fund the purchase of the property that is our corporate headquarters. On April 30, 2008, the principal balance was rolled into a 10 -year term note with an interest rate of 7.10% per annum. We paid this note in full in September 2015 and as a result of the early payoff, we incurred a prepayment penalty in the amount of $200,000 which was included in interest expense in the third quarter of 2015. On July 12, 2012, we executed a Line of Credit Note with JPMorgan Chase Bank, N.A., for a revolving credit facility of up to $4 million, which was subsequently increased to $6 million. The note expired on September 30, 2015. There was no balance owed on the line of credit at the expiration date.At December 31, the amount outstanding under the above agreements consisted of the following:
The terms of the above lines of credit contain various covenants for which we were in compliance as of December 31, 2016 and 2015. Scheduled maturities of the Company’s notes payable and long-term debt are as follows:
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Note 6 - Capital Lease Obligations |
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Debt and Capital Leases Disclosures [Text Block] | 6. CAPITAL LEASE OBLIGATIONSWe lease certain telecommunication equipment under a capital lease agreement. The asset subject to the agreement totaled $227,783, of which $210,904 and $22,152 was included in Property and Equipment at December 31, 2016 and 2015, respectively, and $16,879 and $205,631 which was included in Prepaid Equipment (not placed in service) as of December 31, 2016 and 2015, respectively. Accumulated depreciation on the assets placed in service December 31, 2016 and 2015 were approximately $21,400 and $300, respectively. Amortization of the capitalized cost is charged to depreciation expense. At December 31, the amounts outstanding under capital lease obligation consisted of the following:
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Note 7 - Employee Benefit and Savings Plan |
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Pension and Other Postretirement Benefits Disclosure [Text Block] | 7. EMPLOYEE BENEFIT AND SAVINGS PLANSWe have a 401(k) plan to provide retirement benefits for our employees. As allowed under Section 401(k) of the Internal Revenue Code, the plan provides tax-deferred salary contributions for eligible employees and allows employees to contribute a percentage of their annual compensation to the plan on a pretax basis. Employee contributions are limited to a maximum annual amount as set periodically by the Internal Revenue Code. In 2016, 2015, and 2014, we matched 100 %first 3% 50% 2%
* Due to the annual limit on eligible earnings imposed by the Internal Revenue Code The plan allows employees who meet the age requirements and reach the plan contribution limits to make a catch-up contribution. The catch-up contributions are not eligible for matching contributions. In addition, the plan provides for discretionary matching contributions as determined by the Board of Directors. There were no 2016, 2015, or 2014. We currently offer no postretirement or postemployment benefits to our employees. |
Note 8 - Income Taxes |
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Income Tax Disclosure [Text Block] | 8. INCOME TAXESThe provision for income taxes consists of the following:
Income before income taxes is earned in the following tax jurisdictions:
The income tax effects of temporary differences that give rise to significant portions of deferred income tax assets and liabilities are as follows:
The effective tax rate differs from the statutory rate as follows:
We file a consolidated U.S. income tax return as well as state tax returns on a consolidated, combined, or stand-alone basis, depending on the jurisdiction. We are no longer subject to U.S. federal income tax examinations by tax authorities for years prior to the tax year ended December 2014. Depending on the jurisdiction, we are no longer subject to state examinations by tax authorities for years prior to the December 2013 and December 2014 tax years. |
Note 9 - Commitments and Contingencies |
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Commitments and Contingencies Disclosure [Text Block] | 9 . COMMITMENTS AND CONTINGENCIES Operating Leases We lease our store locations under lease agreements that expire on dates ranging from February 2017 to February 2026. Rent expense on all operating leases for the years ended December 31, 2016, 2015, and 2014, was $4,189,225, $3,844,641, and $3,675,788, respectively.Future minimum lease payments under noncancelable operating leases at December 31, 2016 were as follows:
Legal Proceedings We are periodically involved in various other litigation that arises in the ordinary course of business and operations. There are no such matters pending that we expect to have a material impact on our financial position and operating results. Legal costs associated with the resolution of claims, lawsuits, and other contingencies are expensed as incurred. |
Note 10 - Significant Business Concentrations and Risk |
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Concentration Risk Disclosure [Text Block] | 10 . SIGNIFICANT BUSINESS CONCENTRATIONS AND RISK Major Customers Our revenues are derived from a diverse group of customers primarily involved in the sale of leathercraft. No single customer accounted for more than 1/2% of our consolidated revenues in 2016, 2015, or 2014 and sales to our five largest customers represented 1.4%, 1.3%, and 1.7%, respectively, of consolidated revenues in those years. While we do not believe the loss of one of these customers would have a significant negative impact on our operations, we do believe the loss of several of these customers simultaneously or a substantial reduction in sales generated by them could temporarily affect our operating results.Major Vendors We purchase a significant portion of our inventory through one supplier. Due to the number of alternative sources of supply, loss of this supplier would not have an adverse impact on our operations.Credit Risk Due to the large number of customers comprising our customer base, concentrations of credit risk with respect to customer receivables are limited. We do not generally require collateral for accounts receivable, but we do perform periodic credit evaluations of our customers and believe the allowance for doubtful accounts is adequate. It is our opinion that if any one or a group of customer receivable balances should be deemed uncollectable, it would not have a material adverse effect on our results of operations or financial condition.We maintain our cash in bank deposit accounts that, at times, may exceed federally insured limits. We have not experienced any losses in such accounts. We believe we are not exposed to any significant credit risk on our cash and cash equivalents. |
Note 11 - Stockholders' Equity |
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Stockholders' Equity Note Disclosure [Text Block] | 1 1 . STOCKHOLDERS' EQUITY
In connection with its 2007 Director Non-Qualified Stock Option Plan for non-employee directors, there are outstanding options to purchase our common stock. The plan, which terminates in March 2017, provides for the granting of non-qualified options at the discretion of the Compensation Committee of the Board of Directors. Options are granted at the fair market value of the underlying common stock at the date of grant and vest after six months. We have reserved 100,000 shares of common stock for issuance under this plan.All options expire ten years from date of grant and are exercisable at any time after vesting. Of the 100,000 shares available for issuance, there are 21,400 un-optioned shares available for future grants.A summary of stock option transactions for the years ended December 31 is as follows:
The following table summarizes all of our outstanding options which are fully vested and exercisable at December 31, 2016:
Other information pertaining to option activity during the twelve month periods ended December 31 are as follows:
As of December 31, 2016, there was no unrecognized compensation cost related to non-vested stock options.Cash received from the exercise of stock options for the years ended December 31, 2016, 2015, and 2014 was $ -, $9,920 and $52,722, respectively. Because we had no awards of stock options in 2016, 2015 and 2014, we were not required to record compensation cost. We have a restricted stock plan that was adopted by our Board of Directors in January 2013 and approved by our stockholders in June 2013. The plan reserves up to 300,000 shares of our common stock for restricted stock awards to our executive officers, non-employee directors and other key employees. Awards granted under the plan may be stock awards or performance awards, and may be subject to a graded vesting schedule with a minimum vesting period of four years, unless otherwise determined by the committee that administers the plan. In February 2014, our Chief Executive Officer, Chief Financial Officer, and Senior Vice President were awarded restricted stock grants consisting of 9,375 shares each. In addition, four of our independent directors were awarded restricted stock grants consisting of 1,619 shares each. In February 2015, our Chief Executive Officer, Chief Financial Officer and Senior Vice President were awarded restricted stock grants consisting of 9,344 shares each. In addition, four of our independent directors were awarded restricted stock grants consisting of 1,613 shares each. In March 2016, our Chief Executive Officer and President were awarded restricted stock grants consisting of 11,765 shares each. In addition, five of our independent directors were awarded restricted stock grants consisting of 2,031 shares each. For these grants in 2016, 2015, and 2014, we recognized share based compensation expense of $199,870, $145,321, and $67,818, respectively, as a component of operating expenses. A summary of the activity for nonvested restricted common stock awards as of December 31, 2016 and 2015 is as follows:
As of December 31, 2016, there was unrecognized compensation cost related to non-vested restricted stock awards of $374,040 which will be recognized in each of the following years as follows:
Of the 300,000 shares available for issuance, there are 197,230 shares available for future awards.
On June 9, 2014, our Board of Directors authorized a $0.25 per share special one -time cash dividend to be paid to stockholders of record at the close of business on July 7, 2014. The cash dividend, totaling approximately $2.5 million, was paid to stockholders on August 8, 2014. Our Board will determine future cash dividends after giving consideration to our then existing levels of profit and cash flow, capital requirements, current and forecasted liquidity, as well as financial and other business conditions existing at the time.
On June 6, 2013, our Board of Directors authorized and declared a dividend of one preferred share purchase right (a “Right”) for each outstanding share of our common stock, par value $0.0024 per share, to stockholders of record at the close of business on June 16, 2013. Each Right entitles the registered holder to purchase from us one one -thousandth of a newly created series of preferred stock at an exercise price of $30.00 per right. The Rights are exercisable in the event any person or group acquires 20% or more of our outstanding common stock (an “Acquiring Person”), or commences a tender offer or exchange offer that would result in such person becoming an Acquiring Person. An exception is included in the Rights Plan in order to ensure that certain owners are not by virtue of their share ownership automatically deemed to be an Acquiring Person upon adoption of the plan unless any such owner subsequently accrues additional shares of our common stock and after giving effect to such acquisition owns 20% or more of our outstanding common stock.The Rights, as amended, will expire at 5:00 P.M. Eastern on June 6, 2017,
In August 2015, our Board authorized a share repurchase program where we may repurchase up to 1.2 million shares of our common stock through August 2016. On June 7, 2016, the program was amended to increase the number of shares available to purchase from 1.2 million to 2.2 million and to extend the termination date from August 9, 2016 to August 9, 2017. In 2016, we repurchased approximately 520,500 shares of our stock, at an average price of $7.06, totaling $3.7 million. In 2015, we repurchased approximately 529,000 shares of our stock, at an average price of $7.01, totaling $3.7 million. There were no stock repurchases in 2014. |
Note 12 - Segment Information |
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Segment Reporting Disclosure [Text Block] | 12. SEGMENT INFORMATIONWe identify our segments based on the activities of three distinct operations:
Our reportable operating segments have been determined as separately identifiable business units and we measure segment earnings as operating earnings, defined as income before interest and income taxes.
Net sales by geographic areas were as follows:
Geographic sales information is based on the location of the customer. Except for Canada, we had no sales to any single foreign country that was material to our consolidated net sales for the years ended December 31, 2016, 2015, and 2014. We do not have any significant long-lived assets outside of the United States. |
Note 13 - Recent Accounting Pronouncements |
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Notes to Financial Statements | |
New Accounting Pronouncements and Changes in Accounting Principles [Text Block] | 1 3. RECENT ACCOUNTING PRONOUNCEMENTS In May 2014, the FASB issued ASU No. 2014 -09, which amends ASC Topic 606, “Revenue from Contracts with Customers”. The amendments in this ASU are intended to provide a more robust framework for addressing revenue issues, improve comparability of revenue recognition practices and improve disclosure requirements. The amendments in this accounting standard update are effective for interim and annual reporting periods beginning after December 15, 2016. In April 2015, the FASB issued ASU No. 2015 -24, Revenue from Contracts with Customers: Deferral of the Effective Date which proposed a deferral of the effective date by one year, and on July 7, 2015, the FASB decided to delay the effective date by one year. The deferral results in the new revenue standard being effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. We are therefore required to apply the new revenue guidance beginning in our 2018 interim and annual financial statements. This ASU can be adopted either retrospectively or as a cumulative-effect adjustment as of the date of adoption. Entities reporting under U.S. GAAP are not permitted to adopt this standard earlier than the original effective date for public entities (that is, no earlier than 2017 for calendar year-end entities.) We are currently evaluating what impact, if any, the adoption of this guidance will have on our financial condition, results of operations, cash flows and financial disclosures. Based on our procedures to date, we believe that the adoption will not have a material impact to our financial condition, results of operations or cash flows although our disclosures will be expanded. We expect to adopt ASU 2014 -09 under the modified retrospective method. Given the nature of our business and that our sales generally occur at the counter or by shipment through common carrier at observable transaction prices with little, if any, variable consideration factors, we do not expect there to be significant changes to the amount and timing of revenue recognition. Finally, while we offer an unconditional right of return to our customers, this has historically been immaterial to our financial condition, results of operations and cash flows (annual gross product returns represent less than 0.5% of our net sales).In November 2015, the FASB issued ASU 2015 -17, which requires all deferred tax assets and liabilities to be classified as non-current on the balance sheet instead of separating deferred taxes into current and non-current amounts. The guidance is effective for annual and interim periods beginning after December 15, 2016, and may be adopted on either a prospective or retrospective basis. We early adopted this guidance on a retrospective basis, and there was no material impact to our financial statements or disclosures in our financial statements.In February 2016, the FASB issued ASU 2016 -02, “Leases”, a comprehensive new standard that amends various aspects of existing accounting guidance for leases, including the recognition of a right of use asset and a lease liability for leases with a duration greater than one year. The guidance is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted. We have not completed our review of the new guidance; however, we anticipate that upon adoption of the standard, using a modified retrospective approach, we will recognize additional assets and corresponding liabilities related to leases on our balance sheet. |
Note 14 - Quarterly Financial Data (Unaudited) |
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Quarterly Financial Information [Text Block] | 14. QUARTERLY FINANCIAL DATA (UNAUDITED)
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Significant Accounting Policies (Policies) |
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Accounting Policies [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Use of Estimates, Policy [Policy Text Block] |
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the periods presented. Actual results could differ from those estimates. Assets and liabilities with reported amounts based on significant estimates include trade accounts receivable, inventory (slow-moving), goodwill, and deferred income taxes. |
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Consolidation, Policy [Policy Text Block] |
Our consolidated financial statements include the accounts of Tandy Leather Factory, Inc. and its wholly owned subsidiaries, The Leather Factory, L.P. (a Texas limited partnership) and its corporate partners, Tandy Leather Company, L.P. (a Texas limited partnership) and its corporate partners, Mid-Continent Leather Sales, Inc. (an Oklahoma corporation), Roberts, Cushman & Company, Inc. (a Texas corporation), The Leather Factory of Canada, Ltd. (a Canadian corporation), Tandy Leather Factory UK Limited (a UK corporation), Tandy Leather Factory Australia Pty. Limited (an Australian corporation), and Tandy Leather Factory España, S.L. (a Spanish corporation). All intercompany accounts and transactions have been eliminated in consolidation. |
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Foreign Currency Transactions and Translations Policy [Policy Text Block] |
Foreign currency translation adjustments arise from activities of our foreign subsidiaries. Results of operations are translated into U.S. dollars using the average exchange rates during the period, while assets and liabilities are translated using period-end exchange rates. Foreign currency translation adjustments of assets and liabilities are recorded in stockholders’ equity. Gains and losses resulting from foreign currency transactions are reported in the statements of income under the caption “Other (Income) Expense”, net, for all periods presented. We recognized foreign currency transaction gains (losses) of $19,000, $24,000, and ($13,900), in 2016, 2015, and 2014, respectively. |
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Revenue Recognition, Policy [Policy Text Block] |
Our sales generally occur via two methods: (1) at the store counter, and (2) shipment by common carrier. Sales at the counter are recorded and title passes as transactions occur. Otherwise, sales are recorded and title passes when the merchandise is shipped to the customer. Shipping terms are normally FOB shipping point. Sales tax and comparable foreign tax is excluded from revenue. We offer an unconditional satisfaction guarantee to all customers and accept all product returns. Net sales represent gross sales less negotiated price allowances, product returns, and allowances for defective merchandise. |
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Revenue Recognition, Discounts [Policy Text Block] |
We maintain four price levels on a consistent basis: retail, wholesale, business, and distributor. Gross sales are reported after deduction of discounts. We do not pay slotting fees or make other payments to resellers. |
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Selling, General and Administrative Expenses, Policy [Policy Text Block] |
Cost of goods sold includes inbound freight and duty charges from vendors to our central warehouse, freight and handling charges to move merchandise from our central warehouse to our stores, and manufacturing overhead, as appropriate. Operating expenses include all selling, general and administrative costs including wages and related employee expenses (payroll taxes, health benefits, savings plans, etc.), advertising, outbound freight charges (to ship merchandise to customers), rent, and utilities. |
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Property, Plant and Equipment, Policy [Policy Text Block] |
Property and equipment are stated at cost. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, which are three to ten years for equipment and machinery, seven to fifteen years for furniture and fixtures, five years for vehicles, and forty years for buildings and related improvements. Leasehold improvements are amortized over the lesser of the life of the lease or the useful life of the asset. Repairs and maintenance costs are expensed as incurred. |
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Inventory, Policy [Policy Text Block] |
Inventory is valued at the lower of first -in, first -out cost or market. In addition, the value of inventory is periodically reduced to net realizable value for slow-moving or obsolete inventory based on management's review of items on hand compared to their estimated future demand. |
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Impairment or Disposal of Long-Lived Assets, Policy [Policy Text Block] |
We evaluate long-lived assets for indicators of impairment whenever events or changes in circumstances indicate their carrying amounts may not be recoverable. Additionally, for store assets, we evaluate the performance of individual stores for indicators of impairment and underperforming stores are selected for further evaluation of the recoverability of the carrying amounts. The evaluation of long-lived assets is performed at the lowest level of identifiable cash flows, which is at the individual store level. Impairment is determined when estimated future undiscounted cash flows associated with an asset are less than the asset’s carrying value.To date, we have not recognized any impairment of our long-lived assets. |
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Earnings Per Share, Policy [Policy Text Block] |
Basic earnings per share are computed based on the weighted average number of common shares outstanding during the period. Diluted earnings per share includes, to the extent inclusion of such shares would be dilutive to earnings per share, the effect of outstanding options and warrants, computed using the treasury stock method.
For additional disclosures regarding the restricted stock awards and the employee stock options, see Note 11. The net effect of converting stock options and restricted stock grants to purchase 90,085, 68,400, and 107,001 shares of common stock at option prices less than the average market prices has been included in the computations of diluted EPS for the years ended December 31, 2016, 2015, and 2014, respectively. |
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Goodwill and Intangible Assets, Policy [Policy Text Block] |
Goodwill represents the excess of the purchase price over the fair value of net assets acquired in a business combination. Goodwill is required to be evaluated for impairment on an annual basis, absent indicators of impairment during the interim. Application of the goodwill impairment test requires exercise of judgment, including the estimation of future cash flows, determination of appropriate discount rates and other important assumptions. Changes in these estimates and assumptions could materially affect the determination of fair value and/or goodwill impairment for each reporting unit. Goodwill is not amortized, but is evaluated at least annually for impairment. We completed our annual goodwill impairment analysis as of December 31 for each of the years ended December 31, 2016, 2015, and 2014 and determined that no adjustment to the carrying value of goodwill was required. A summary of changes in our goodwill is as follows:
Our intangible assets and related accumulated amortization consisted of the following:
Excluding goodwill, we have no intangible assets not subject to amortization under U.S. GAAP. Amortization of intangible assets of $6,442 in 2016, $40,744 in 2015, and $45,202 in 2014 was recorded in operating expenses. The weighted average amortization period is 15 years for trademarks and copyrights. Based on the current amount of intangible assets subject to amortization, we estimate amortization expense as follows for the next five years:
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Fair Value of Financial Instruments, Policy [Policy Text Block] |
We measure fair value as an exit price, which is the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As a basis for considering such assumptions, accounting standards establish a three -tier fair value hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value:Level 1 – observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.Level 2 – include other inputs that are directly or indirectly observable in the marketplace.Level 3 – significant unobservable inputs which are supported by little or no market activity.Classification of the financial asset or liability within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement. Our principal financial instruments held consist of certificates of deposit, accounts receivable, accounts payable, notes payable, and long-term debt. The carrying value of certificates of deposit, accounts receivable and accounts payable approximate their fair value due to the relatively short-term nature of the accounts. The terms of the long-term debt are considered reasonable for this type of financing; therefore, the carrying amount approximates fair value. |
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Income Tax, Policy [Policy Text Block] |
We account for income taxes using the asset and liability method. Under this method, the amount of taxes currently payable or refundable is accrued, and deferred tax assets and liabilities are recognized for the estimated future tax consequences of temporary differences that currently exist between the tax basis and the financial reporting basis of our assets and liabilities. Deferred tax assets and liabilities are measured using the enacted tax rates in effect in the years when those temporary differences are expected to reverse. The effect on deferred taxes from a change in tax rate is recognized through continuing operations in the period that includes the enactment date of the change. Changes in tax laws and rates could affect recorded deferred tax assets and liabilities in the future. A tax benefit from an uncertain tax position may be recognized when it is more-likely-than-not that the position will be sustained upon examination, including resolutions of any related appeals or litigation processes, based on the technical merits. Income tax position must meet a more-likely-than-not recognition threshold to be recognized.We recognize tax liabilities for uncertain tax positions and adjust these liabilities when our judgment changes as a result of the evaluation of new information not previously available. Due to the complexity of some of these uncertainties, the ultimate resolution may result in a payment that is materially different from the current estimate of the tax liabilities. These differences will be reflected as increases or decreases to income tax expense and the effective tax rate in the period in which new information becomes available. We may be subject to periodic audits by the Internal Revenue Service and other taxing authorities. These audits may challenge certain of our tax positions, such as the timing and amount of deductions and allocation of taxable income to the various jurisdictions. |
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Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block] |
We have one stock option plan which permits annual stock option grants to non-employee directors with an exercise price equal to the fair market value of the shares at the date of grant and with a ten year term. These options vest and become exercisable six months from the option grant date. Under this plan, no stock options were awarded in 2016, 2015 or 2014, therefore, we did not recognize any share based compensation expense for these options during those periods.We also have a restricted stock plan that was adopted by our Board of Directors in January 2013 and approved by our stockholders in June 2013. The plan reserves up to 300,000 shares of our common stock for restricted stock awards to our executive officers, non-employee directors, and other key employees. Awards granted under the plan may be stock awards or performance awards, and may be subject to a graded vesting schedule with a minimum vesting period of four years. The fair value of nonvested restricted common stock awards is the market value of our common stock on the date of grant. Compensation costs for these awards will be recognized on a straight-line basis over the four year vesting period. |
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Comprehensive Income, Policy [Policy Text Block] |
Comprehensive income includes net income and certain other items that are recorded directly to Stockholders’ Equity. The Company’s only source of other comprehensive income is foreign currency translation adjustments. |
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Shipping and Handling Cost, Policy [Policy Text Block] |
All shipping and handling costs incurred by us are included in operating expenses on the statements of income. These costs totaled approximately $1,982,000, $2,012,000, and $2,046,000 for the years ended December 31, 2016, 2015, and 2014, respectively. |
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Advertising Costs, Policy, Capitalized Direct Response Advertising [Policy Text Block] |
With the exception of catalog costs, advertising costs are expensed as incurred. Catalog costs are capitalized and expensed over the estimated useful life of the particular catalog in question, which is typically twelve to eighteen months. Such capitalized costs are included in other current assets and totaled $213,000 and $181,000 at December 31, 2016 and 2015, respectively. Total advertising expense was $4,759,000 in 2016; $4,826,000 in 2015; and $4,339,000 in 2014. |
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Cash and Cash Equivalents, Policy [Policy Text Block] |
For purposes of the statement of cash flows, we consider all highly liquid investments with initial maturities of three months or less from the date of purchase to be cash equivalents. |
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Reclassification, Policy [Policy Text Block] |
Certain reclassifications have been made to the prior year financial statements to conform to the current year presentation. |
Note 2 - Significant Accounting Policies (Tables) |
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Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] |
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Schedule of Goodwill [Table Text Block] |
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Schedule of Finite-Lived Intangible Assets [Table Text Block] |
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Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block] |
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Note 4 - Balance Sheet Components (Tables) |
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Condensed Balance Sheet [Table Text Block] |
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Disposal Groups, Including Discontinued Operations [Table Text Block] |
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Note 5 - Notes Payable and Long-term Debt (Tables) |
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Schedule of Debt [Table Text Block] |
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Schedule of Maturities of Long-term Debt [Table Text Block] |
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Note 6 - Capital Lease Obligations (Tables) |
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Schedule of Capital Lease Obligations [Table Text Block] |
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Note 7 - Employee Benefit and Savings Plan (Tables) |
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Defined Contribution Plan Disclosures [Table Text Block] |
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Note 8 - Income Taxes (Tables) |
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Schedule of Components of Income Tax Expense (Benefit) [Table Text Block] |
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Schedule of Income before Income Tax, Domestic and Foreign [Table Text Block] |
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Schedule of Deferred Tax Assets and Liabilities [Table Text Block] |
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Schedule of Effective Income Tax Rate Reconciliation [Table Text Block] |
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Note 9 - Commitments and Contingencies (Tables) |
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Schedule of Future Minimum Rental Payments for Operating Leases [Table Text Block] |
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Note 11 - Stockholders' Equity (Tables) |
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Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block] |
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Schedule of Share-based Compensation, Shares Authorized under Stock Option Plans, by Exercise Price Range [Table Text Block] |
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Schedule of Share-based Compensation, Activity [Table Text Block] |
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Schedule of Share-based Compensation, Restricted Stock and Restricted Stock Units Activity [Table Text Block] |
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Schedule of Unrecognized Compensation Cost, Nonvested Awards [Table Text Block] |
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Note 12 - Segment Information (Tables) |
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Schedule of Segment Reporting Information, by Segment [Table Text Block] |
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Schedule of Revenue from External Customers and Long-Lived Assets, by Geographical Areas [Table Text Block] |
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Note 14 - Quarterly Financial Data (Unaudited) (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Quarterly Financial Information [Table Text Block] |
|
Note 2 - Significant Accounting Policies - Earnings Per Share (Details) - USD ($) |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2016 |
Sep. 30, 2016 |
Jun. 30, 2016 |
Mar. 31, 2016 |
Dec. 31, 2015 |
Sep. 30, 2015 |
Jun. 30, 2015 |
Mar. 31, 2015 |
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Net income | $ 2,059,997 | $ 1,000,350 | $ 1,820,915 | $ 1,520,997 | $ 2,338,758 | $ 1,111,344 | $ 1,507,896 | $ 1,444,407 | $ 6,402,259 | $ 6,402,405 | $ 7,706,921 |
Weighted average common shares outstanding (in shares) | 9,188,483 | 9,188,483 | 9,209,446 | 9,698,951 | 9,692,860 | 10,175,650 | 10,212,933 | 10,211,333 | 9,301,867 | 10,077,506 | 10,203,063 |
Earnings per share – basic (in dollars per share) | $ 0.23 | $ 0.11 | $ 0.19 | $ 0.16 | $ 0.24 | $ 0.11 | $ 0.15 | $ 0.14 | $ 0.69 | $ 0.64 | $ 0.76 |
DILUTED | |||||||||||
Net income | $ 2,059,997 | $ 1,000,350 | $ 1,820,915 | $ 1,520,997 | $ 2,338,758 | $ 1,111,344 | $ 1,507,896 | $ 1,444,407 | $ 6,402,259 | $ 6,402,405 | $ 7,706,921 |
Weighted average common shares outstanding (in shares) | 9,188,483 | 9,188,483 | 9,209,446 | 9,698,951 | 9,692,860 | 10,175,650 | 10,212,933 | 10,211,333 | 9,301,867 | 10,077,506 | 10,203,063 |
Effect of restricted stock awards and assumed exercise of stock options (in shares) | 19,691 | 25,254 | 38,058 | ||||||||
Weighted average common shares outstanding, assuming dilution (in shares) | 9,301,867 | 9,206,382 | 9,227,941 | 9,718,453 | 9,712,571 | 10,199,092 | 10,241,164 | 10,241,096 | 9,321,558 | 10,102,760 | 10,241,121 |
Earnings per share - diluted (in dollars per share) | $ 0.23 | $ 0.11 | $ 0.19 | $ 0.16 | $ 0.24 | $ 0.11 | $ 0.15 | $ 0.14 | $ 0.69 | $ 0.63 | $ 0.75 |
Outstanding options and restricted stock awards excluded as anti-dilutive (in shares) | 31,477 | 60,433 |
Note 2 - Significant Accounting Policies - Summary of Changes in Goodwill (Details) - USD ($) |
12 Months Ended | |
---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Balance | $ 953,356 | $ 971,786 |
Foreign exchange gain/loss | 2,845 | (18,430) |
Balance | 956,201 | 953,356 |
Leather Factory [Member] | ||
Balance | 569,950 | 588,380 |
Foreign exchange gain/loss | 2,845 | (18,430) |
Balance | 572,795 | 569,950 |
Tandy Leather [Member] | ||
Balance | 383,406 | 383,406 |
Foreign exchange gain/loss | ||
Balance | $ 383,406 | $ 383,406 |
Note 2 - Significant Accounting Policies - Intangible Assets (Details) - USD ($) |
Dec. 31, 2016 |
Dec. 31, 2015 |
---|---|---|
Other intangibles, gross | $ 729,685 | $ 729,034 |
Accumulated Amortization | 708,845 | 701,752 |
Other intangibles, net | 20,840 | 27,282 |
Trademarks and Copyrights [Member] | ||
Other intangibles, gross | 554,369 | 554,369 |
Accumulated Amortization | 545,279 | 544,504 |
Other intangibles, net | 9,090 | 9,865 |
Noncompete Agreements [Member] | ||
Other intangibles, gross | 175,316 | 174,665 |
Accumulated Amortization | 163,566 | 157,248 |
Other intangibles, net | $ 11,750 | $ 17,417 |
Note 2 - Significant Accounting Policies - Estimated Amortization Expense (Details) |
Dec. 31, 2016
USD ($)
|
---|---|
2017 | $ 1,757 |
2018 | 1,417 |
2019 | 666 |
2020 | 666 |
2021 | 666 |
Thereafter | 5,668 |
Wholesale Leathercraft [Member] | |
2017 | 90 |
2018 | |
2019 | |
2020 | |
2021 | |
Thereafter | |
Retail Leathercraft [Member] | |
2017 | 1,667 |
2018 | 1,417 |
2019 | 666 |
2020 | 666 |
2021 | 666 |
Thereafter | $ 5,668 |
Note 3 - Valuation and Qualifying Accounts (Details Textual) - USD ($) |
Dec. 31, 2016 |
Dec. 31, 2015 |
---|---|---|
Allowance for Doubtful Accounts Receivable | $ 2,400 | $ 1,700 |
Note 4 - Balance Sheet Components (Details Textual) - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Depreciation | $ 1,717,548 | $ 1,520,385 | $ 1,391,422 |
Note 4 - Balance Sheet Components - Schedule of Balance Sheet Components (Details) - USD ($) |
Dec. 31, 2016 |
Dec. 31, 2015 |
---|---|---|
On hand: | ||
Finished goods held for sale | $ 30,684,026 | $ 30,487,764 |
Raw materials and work in process | 1,034,041 | 1,284,567 |
Inventory in transit | 1,459,472 | 1,812,208 |
TOTAL | 33,177,539 | 33,584,539 |
PROPERTY AND EQUIPMENT | ||
Building | 9,105,286 | 9,232,066 |
Land | 1,451,132 | 1,451,132 |
Leasehold improvements | 1,350,916 | 1,192,761 |
Equipment and machinery | 5,991,343 | 5,086,770 |
Furniture and fixtures | 7,342,642 | 6,889,642 |
Vehicles | 295,033 | 139,837 |
PROPERTY AND EQUIPMENT, at cost | 25,536,352 | 23,992,208 |
Less accumulated depreciation and amortization | (9,884,559) | (8,297,155) |
TOTAL | 15,651,793 | 15,695,053 |
ACCRUED EXPENSES AND OTHER LIABILITIES | ||
Accrued bonuses | 2,123,942 | 2,631,971 |
Accrued payroll | 689,150 | 255,058 |
Deferred revenue | 909,297 | 902,236 |
Sales and payroll taxes payable | 494,720 | 383,657 |
Inventory in transit | 1,432,590 | 1,542,352 |
Other | 287,488 | 330,278 |
TOTAL | $ 5,937,187 | $ 6,045,552 |
Note 4 - Balance Sheet Components - Loss From Abandonment and (or) Disposal of Obsolete Equipment, by Segment (Details) - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Loss on disposal or abandonment of assets | $ 16,985 | $ 31,064 | $ 18,820 |
Wholesale Leathercraft [Member] | |||
Loss on disposal or abandonment of assets | 13,706 | 10,361 | 7,681 |
Retail Leathercraft [Member] | |||
Loss on disposal or abandonment of assets | 3,993 | 9,222 | 11,089 |
International Leathercraft [Member] | |||
Loss on disposal or abandonment of assets | $ (714) | $ 11,481 | $ 47 |
Note 5 - Notes Payable and Long-term Debt - Summary of Credit Agreement and Line of Credit Note (Details) - USD ($) |
Dec. 31, 2016 |
Dec. 31, 2015 |
---|---|---|
Line of Credit Note | $ 7,371,729 | |
7,371,729 | $ 3,711,225 | |
Current maturities of long-term debt | 614,311 | 231,952 |
LONG-TERM DEBT, net of current maturities | 6,757,419 | 3,479,273 |
Promissory Note with BOKF [Member] | ||
Line of Credit Note | 7,371,729 | 3,711,225 |
Promissory Note and Business Loan Agreement with BOKF [Member] | ||
Line of Credit Note |
Note 5 - Notes Payable and Long-term Debt - Summary of Credit Agreement and Line of Credit Note (Details) (Parentheticals) - USD ($) |
12 Months Ended | |
---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Promissory Note with BOKF [Member] | ||
Line of Credit Note, Principal Amount | $ 15,000,000 | $ 15,000,000 |
Promissory Note with BOKF [Member] | London Interbank Offered Rate (LIBOR) [Member] | ||
Line of Credit Note, Interest at LIBOR | 1.85% | 1.85% |
Promissory Note and Business Loan Agreement with BOKF [Member] | ||
Line of Credit Note, Principal Amount | $ 6,000,000 | $ 6,000,000 |
Promissory Note and Business Loan Agreement with BOKF [Member] | London Interbank Offered Rate (LIBOR) [Member] | ||
Line of Credit Note, Interest at LIBOR | 1.85% | 1.85% |
Note 5 - Notes Payable and Long-term Debt - Schedule of Notes Payable Debt Maturities (Details) |
Dec. 31, 2016
USD ($)
|
---|---|
2017 | $ 614,311 |
2018 | 1,842,932 |
2019 | 1,842,932 |
2020 | 1,842,932 |
2021 | 1,228,622 |
$ 7,371,729 |
Note 6 - Capital Lease Obligations (Details Textual) - USD ($) |
Dec. 31, 2016 |
Dec. 31, 2015 |
---|---|---|
Capital Leased Assets, Gross | $ 227,783 | |
Capital Leases, Lessee Balance Sheet, Assets by Major Class, Accumulated Depreciation | 21,400 | $ 300 |
Property and Equipment [Member] | ||
Capital Leased Assets, Gross | 210,904 | 22,152 |
Prepaid Equipment [Member] | ||
Capital Leased Assets, Gross | $ 16,879 | $ 205,631 |
Note 6 - Capital Lease Obligations - Capital Lease Obligations (Details) - USD ($) |
Dec. 31, 2016 |
Dec. 31, 2015 |
---|---|---|
Capital Lease secured by certain telecommunication equipment – total annual principal payments of $72,686, 1.8% interest, maturing January 2018 | $ 73,994 | $ 156,271 |
Less amount representing interest | 1,308 | 4,189 |
Total obligation under capital lease | 72,686 | 152,082 |
Less - Current maturities | 72,686 | 72,686 |
Long term obligation under capital lease | $ 79,396 |
Note 6 - Capital Lease Obligations - Capital Lease Obligations (Details) (Parentheticals) - USD ($) |
Dec. 31, 2016 |
Dec. 31, 2015 |
---|---|---|
Annual principal payments | $ 72,686 | $ 72,686 |
Interest rate | 1.80% | 1.80% |
Note 7 - Employee Benefit and Savings Plan (Details Textual) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Defined Contribution Plan, Employer Discretionary Contribution Amount | $ 0 | $ 0 | $ 0 |
100% Matching [Member] | |||
Defined Contribution Plan, Employer Matching Contribution, Percent of Match | 100.00% | 100.00% | 100.00% |
Defined Contribution Plan, Employer Matching Contribution, Percent of Employees' Gross Pay | 3.00% | 3.00% | 3.00% |
50% Matching [Member] | |||
Defined Contribution Plan, Employer Matching Contribution, Percent of Match | 50.00% | 50.00% | 50.00% |
Defined Contribution Plan, Employer Matching Contribution, Percent of Employees' Gross Pay | 2.00% | 2.00% | 2.00% |
Note 7 - Employee Benefit and Savings Plans - Contributions to 401(k) Plan (Details) - USD ($) |
12 Months Ended | ||||
---|---|---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|||
Maximum Matching Contribution per Participant* | [1] | $ 10,600 | $ 10,600 | $ 10,400 | |
Total Matching Contribution | $ 277,753 | $ 290,388 | $ 286,224 | ||
|
Note 8 - Income Taxes - Provision for Income Taxes (Details) - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Current provision: | |||
Federal | $ 3,108,894 | $ 3,045,292 | $ 3,368,974 |
State | 486,565 | 482,186 | 548,225 |
Total current income tax expense | 3,595,459 | 3,527,478 | 3,917,199 |
Deferred provision (benefit): | |||
Federal | 183,520 | 212,563 | 210,343 |
State | 21,591 | 76,607 | (26,853) |
Total deferred income provision | 205,111 | 289,170 | 183,490 |
Total income tax expense | $ 3,800,570 | $ 3,816,648 | $ 4,100,689 |
Note 8 - Income Taxes - Income Before Income Taxes (Details) - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Income from continuing operations, before income taxes | $ 10,202,829 | $ 10,219,053 | $ 11,807,610 |
Internal Revenue Service (IRS) [Member] | |||
Income before income taxes | 9,070,894 | 9,272,854 | 10,339,632 |
Her Majesty's Revenue and Customs (HMRC) [Member] | |||
Income before income taxes | (81,987) | (43,567) | 557,776 |
Canada Revenue Agency [Member] | |||
Income before income taxes | 1,034,027 | 813,824 | 874,571 |
Australian Taxation Office [Member] | |||
Income before income taxes | 82,622 | 48,633 | 102,922 |
Tax Authority, Spain [Member] | |||
Income before income taxes | $ 97,273 | $ 127,309 | $ (67,291) |
Note 8 - Income Taxes - Deferred Income Tax Assets and Liabilities (Details) - USD ($) |
Dec. 31, 2016 |
Dec. 31, 2015 |
---|---|---|
Deferred income tax assets: | ||
Capitalized inventory costs | $ 265,454 | $ 260,385 |
Warrants and share-based compensation | 44,151 | 44,151 |
Accrued expenses, reserves, and other | 65,631 | 66,444 |
Total deferred income tax assets | 375,236 | 370,980 |
Deferred income tax liabilities: | ||
Property and equipment depreciation | 1,728,265 | 1,529,397 |
Goodwill and other intangible assets amortization | 227,767 | 217,268 |
Total deferred income tax liabilities | $ 1,956,032 | $ 1,746,665 |
Note 8 - Income Taxes - Effective Tax Rate (Details) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Statutory rate – Federal US income tax | 34.00% | 34.00% | 34.00% |
State and local taxes | 6.00% | 6.00% | 5.00% |
Non-U.S. income tax at different rates | (1.00%) | ||
Domestic production activities deduction | (1.00%) | (1.00%) | (1.00%) |
Other, net | (2.00%) | (2.00%) | (2.00%) |
Effective rate | 37.00% | 37.00% | 35.00% |
Note 9 - Commitments and Contingencies (Details Textual) - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Operating Leases, Rent Expense | $ 4,189,225 | $ 3,844,641 | $ 3,675,788 |
Note 9 - Commitments and Contingencies - Future Minimum Lease Payments Under Noncancelable Operating Leases (Details) |
Dec. 31, 2016
USD ($)
|
---|---|
2017 | $ 3,914,550 |
2018 | 2,999,262 |
2019 | 2,256,721 |
2020 | 1,701,366 |
2021 | 1,074,070 |
2022 | 545,740 |
2023 | 427,800 |
2024 | 246,698 |
2025 | 180,922 |
2026 | 6,206 |
Total minimum lease payments | $ 13,353,335 |
Note 10 - Significant Business Concentrations and Risk (Details Textual) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Number Of Major Customers | 5 | ||
Number of Major Suppliers | 1 | ||
Sales Revenue, Net [Member] | Customer Concentration Risk [Member] | |||
Concentration Risk, Percentage | 1.40% | 1.30% | 1.70% |
Note 11 - Stockholders' Equity - Summary of Stock Option Activity (Details) - $ / shares |
12 Months Ended | |||
---|---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Balance, outstanding (in shares) | 56,400 | 68,400 | 72,400 | 84,600 |
Balance, outstanding (in dollars per share) | $ 5.14 | $ 5.17 | $ 5.16 | $ 5.04 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 0 | 0 | 0 | |
Granted (in dollars per share) | ||||
Forfeited or expired (in shares) | (12,000) | (2,000) | ||
Forfeited or expired (in dollars per share) | $ 5.30 | $ 4.96 | ||
Exercised (in shares) | (2,000) | (12,200) | ||
Exercised (in dollars per share) | $ 4.96 | $ 4.32 | ||
Balance, outstanding (in shares) | 56,400 | 68,400 | 72,400 | |
Balance, outstanding (in dollars per share) | $ 5.14 | $ 5.17 | $ 5.16 | |
Exercisable at end of year (in shares) | 56,400 | 68,400 | 72,400 | |
Exercisable at end of year (in dollars per share) | $ 5.14 | $ 5.17 | $ 5.16 |
Note 11 - Stockholders' Equity - Summary of Outstanding Options by Exercise Price Ranges (Details) |
12 Months Ended |
---|---|
Dec. 31, 2016
$ / shares
shares
| |
(in shares) | shares | 56,400 |
(in dollars per share) | $ 5.14 |
(Year) | 4 years 149 days |
Range 1 [Member] | |
(in dollars per share) | $ 4.41 |
(in dollars per share) | |
(in shares) | shares | 20,400 |
(in dollars per share) | $ 4.41 |
(Year) | 3 years 281 days |
Range 2 [Member] | |
(in dollars per share) | $ 4.80 |
(in dollars per share) | |
(in shares) | shares | 9,000 |
(in dollars per share) | $ 4.80 |
(Year) | 4 years 80 days |
Range 3 [Member] | |
(in dollars per share) | $ 5.30 |
(in dollars per share) | $ 6.87 |
(in shares) | shares | 27,000 |
(in dollars per share) | $ 5.81 |
(Year) | 4 years 346 days |
Note 11 - Stockholders' Equity - Other Information Pertaining to Option Activity (Details) - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Total intrinsic value of stock options exercised | $ 2,953 | $ 14,816 |
Note 11 - Stockholders' Equity - Activity for Nonvested Restricted Common Stock Awards (Details) - Restricted Stock [Member] - $ / shares |
12 Months Ended | |
---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Balance, shares (in shares) | 60,433 | 34,601 |
Balance, Grant Fair Value (in dollars per share) | $ 8.97 | $ 8.96 |
Granted (in shares) | 33,685 | 34,484 |
Granted, Grant Fair Value (in dollars per share) | $ 7.14 | $ 8.99 |
Forfeited (in shares) | (8,187) | |
Forfeited, Grant Fair Value (in dollars per share) | $ 8.97 | |
Vested (in shares) | (20,784) | (8,652) |
Vested, Grant Fair Value (in dollars per share) | $ 8.97 | $ 8.96 |
Balance, shares (in shares) | 65,147 | 60,433 |
Balance, Grant Fair Value (in dollars per share) | $ 8.03 | $ 8.97 |
Note 11 - Stockholders' Equity - Unrecognized Compensation Expense for Non-vested Restricted Stock Awards (Details) - Restricted Stock [Member] |
Dec. 31, 2016
USD ($)
|
---|---|
2017 | $ 173,136 |
2018 | 123,693 |
2019 | 67,190 |
2020 | $ 10,021 |
Note 12 - Segment Information (Details Textual) |
12 Months Ended |
---|---|
Dec. 31, 2016 | |
Number of Operating Segments | 3 |
Number of Stores | 4 |
Northampton United Kingdom [Member] | International Leathercraft [Member] | |
Number of Stores | 1 |
Sydney Australia [Member] | International Leathercraft [Member] | |
Number of Stores | 1 |
Jerez Spain [Member] | International Leathercraft [Member] | |
Number of Stores | 1 |
Manchester, United Kingdom [Member] | International Leathercraft [Member] | |
Number of Stores | 1 |
Note 12 - Segment Information - Summary of Reportable Operating Segments (Details) - USD ($) |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2016 |
Sep. 30, 2016 |
Jun. 30, 2016 |
Mar. 31, 2016 |
Dec. 31, 2015 |
Sep. 30, 2015 |
Jun. 30, 2015 |
Mar. 31, 2015 |
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Net Sales | $ 24,100,498 | $ 18,628,362 | $ 19,552,905 | $ 20,672,227 | $ 24,292,971 | $ 19,355,937 | $ 19,773,528 | $ 20,788,764 | $ 82,923,992 | $ 84,161,200 | $ 83,430,912 |
Gross Profit | 14,519,835 | $ 11,644,871 | $ 12,895,790 | $ 12,652,746 | 14,841,054 | $ 11,832,697 | $ 12,814,382 | $ 12,582,927 | 51,713,242 | 52,071,060 | 52,124,757 |
Operating earnings | 10,300,731 | 10,474,700 | 11,958,029 | ||||||||
Interest expense | 155,189 | 330,004 | 225,584 | ||||||||
Other expense, net | (57,287) | (74,357) | (75,165) | ||||||||
Income before income taxes | 10,202,829 | 10,219,053 | 11,807,610 | ||||||||
Depreciation and amortization | 1,719,154 | 1,567,172 | 1,436,624 | ||||||||
Fixed asset additions | 1,697,704 | 2,164,040 | 2,204,190 | ||||||||
Total assets | 70,652,720 | 64,611,076 | 70,652,720 | 64,611,076 | 62,873,874 | ||||||
Wholesale Leathercraft [Member] | |||||||||||
Net Sales | 25,371,580 | 26,754,165 | 27,285,884 | ||||||||
Gross Profit | 18,097,205 | 18,579,494 | 18,393,969 | ||||||||
Operating earnings | 5,254,227 | 4,663,590 | 5,300,413 | ||||||||
Interest expense | 155,189 | 330,004 | 225,584 | ||||||||
Other expense, net | (35,290) | (63,230) | (61,984) | ||||||||
Income before income taxes | 5,134,328 | 4,396,816 | 5,136,813 | ||||||||
Depreciation and amortization | 969,202 | 950,174 | 911,327 | ||||||||
Fixed asset additions | 869,250 | 945,998 | 909,260 | ||||||||
Total assets | 50,067,046 | 42,141,174 | 50,067,046 | 42,141,174 | 43,000,030 | ||||||
Retail Leathercraft [Member] | |||||||||||
Net Sales | 53,670,340 | 53,714,432 | 51,805,944 | ||||||||
Gross Profit | 31,217,798 | 31,258,961 | 30,880,718 | ||||||||
Operating earnings | 4,970,546 | 5,689,814 | 6,077,345 | ||||||||
Interest expense | |||||||||||
Other expense, net | |||||||||||
Income before income taxes | 4,970,546 | 5,689,814 | 6,077,345 | ||||||||
Depreciation and amortization | 662,332 | 559,418 | 460,534 | ||||||||
Fixed asset additions | 740,578 | 932,231 | 1,243,123 | ||||||||
Total assets | 16,435,386 | 17,753,324 | 16,435,386 | 17,753,324 | 16,608,386 | ||||||
International Leathercraft [Member] | |||||||||||
Net Sales | 3,882,072 | 3,692,603 | 4,339,084 | ||||||||
Gross Profit | 2,398,239 | 2,232,605 | 2,850,070 | ||||||||
Operating earnings | 75,958 | 121,296 | 580,271 | ||||||||
Interest expense | |||||||||||
Other expense, net | (21,997) | (11,127) | (13,181) | ||||||||
Income before income taxes | 97,955 | 132,423 | 593,452 | ||||||||
Depreciation and amortization | 87,620 | 57,580 | 64,763 | ||||||||
Fixed asset additions | 87,875 | 285,811 | 51,807 | ||||||||
Total assets | $ 4,150,288 | $ 4,716,578 | $ 4,150,288 | $ 4,716,578 | $ 3,265,458 |
Note 12 - Segment Information - Net Sales for Geographic Areas (Details) - USD ($) |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2016 |
Sep. 30, 2016 |
Jun. 30, 2016 |
Mar. 31, 2016 |
Dec. 31, 2015 |
Sep. 30, 2015 |
Jun. 30, 2015 |
Mar. 31, 2015 |
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Net sales | $ 24,100,498 | $ 18,628,362 | $ 19,552,905 | $ 20,672,227 | $ 24,292,971 | $ 19,355,937 | $ 19,773,528 | $ 20,788,764 | $ 82,923,992 | $ 84,161,200 | $ 83,430,912 |
UNITED STATES | |||||||||||
Net sales | 70,886,401 | 72,061,009 | 69,791,099 | ||||||||
CANADA | |||||||||||
Net sales | 7,199,155 | 7,543,468 | 8,342,896 | ||||||||
All Other Countries [Member] | |||||||||||
Net sales | $ 4,838,436 | $ 4,556,723 | $ 5,296,917 |
Note 14 - Quarterly Financial Data (Unaudited) - Quarterly Financial Data (Details) - USD ($) |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2016 |
Sep. 30, 2016 |
Jun. 30, 2016 |
Mar. 31, 2016 |
Dec. 31, 2015 |
Sep. 30, 2015 |
Jun. 30, 2015 |
Mar. 31, 2015 |
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Net Sales | $ 24,100,498 | $ 18,628,362 | $ 19,552,905 | $ 20,672,227 | $ 24,292,971 | $ 19,355,937 | $ 19,773,528 | $ 20,788,764 | $ 82,923,992 | $ 84,161,200 | $ 83,430,912 |
Gross Profit | 14,519,835 | 11,644,871 | 12,895,790 | 12,652,746 | 14,841,054 | 11,832,697 | 12,814,382 | 12,582,927 | 51,713,242 | 52,071,060 | 52,124,757 |
Net income | $ 2,059,997 | $ 1,000,350 | $ 1,820,915 | $ 1,520,997 | $ 2,338,758 | $ 1,111,344 | $ 1,507,896 | $ 1,444,407 | $ 6,402,259 | $ 6,402,405 | $ 7,706,921 |
NET INCOME PER COMMON SHARE: | |||||||||||
BASIC (in dollars per share) | $ 0.23 | $ 0.11 | $ 0.19 | $ 0.16 | $ 0.24 | $ 0.11 | $ 0.15 | $ 0.14 | $ 0.69 | $ 0.64 | $ 0.76 |
Earnings per share - diluted (in dollars per share) | 0.23 | 0.11 | 0.19 | 0.16 | 0.24 | 0.11 | 0.15 | 0.14 | 0.69 | 0.63 | 0.75 |
Earnings per share – basic (in dollars per share) | $ 0.23 | $ 0.11 | $ 0.19 | $ 0.16 | $ 0.24 | $ 0.11 | $ 0.15 | $ 0.14 | $ 0.69 | $ 0.64 | $ 0.76 |
Weighted average number of common shares outstanding: | |||||||||||
Basic (in shares) | 9,188,483 | 9,188,483 | 9,209,446 | 9,698,951 | 9,692,860 | 10,175,650 | 10,212,933 | 10,211,333 | 9,301,867 | 10,077,506 | 10,203,063 |
Diluted (in shares) | 9,301,867 | 9,206,382 | 9,227,941 | 9,718,453 | 9,712,571 | 10,199,092 | 10,241,164 | 10,241,096 | 9,321,558 | 10,102,760 | 10,241,121 |
Net Sales | $ 24,100,498 | $ 18,628,362 | $ 19,552,905 | $ 20,672,227 | $ 24,292,971 | $ 19,355,937 | $ 19,773,528 | $ 20,788,764 | $ 82,923,992 | $ 84,161,200 | $ 83,430,912 |
Gross Profit | 14,519,835 | 11,644,871 | 12,895,790 | 12,652,746 | 14,841,054 | 11,832,697 | 12,814,382 | 12,582,927 | 51,713,242 | 52,071,060 | 52,124,757 |
Net income | $ 2,059,997 | $ 1,000,350 | $ 1,820,915 | $ 1,520,997 | $ 2,338,758 | $ 1,111,344 | $ 1,507,896 | $ 1,444,407 | $ 6,402,259 | $ 6,402,405 | $ 7,706,921 |
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