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RESTATEMENT OF PREVIOUSLY ISSUED CONSOLIDATED FINANCIAL STATEMENTS (Tables)
 12 Months Ended
Dec. 31, 2019
RESTATEMENT OF PREVIOUSLY ISSUED CONSOLIDATED FINANCIAL STATEMENTS [Abstract]  
Restatement of Previously Issued Consolidated Financial Statements and Adjustments
The net effect of the adjustments on the Consolidated Statements of Comprehensive Income (Loss) was to increase net income by $2.4 million for the year ended December 31, 2018, and to decrease net income by $2.0 million for the year ended December 31, 2017.

Increase (Decrease) in Net income:
 
2018
  
2017
 
Inventory adjustments (1)
 
$
255,372
  
$
(3,127,495
)
Sales returns, gift cards and class fees
  
105,382
   
99,327
 
Operating expenses (2)
  
2,059,463
   
2,163,065
 
Impairment expense
  
(285,477
)
  
-
 
Other expense
  
373,382
   
40,255
 
Total adjustments before tax
  
2,508,122
   
(824,848
)
Income tax expense from adjustments
  
73,585
   
1,148,459
 
Increase (decrease) in net income
 
$
2,434,537
  
$
(1,973,307
)
         
(1) Inventory adjustments due to:
        
FIFO adjustment
 
$
843,598
  
$
(88,548
)
Freight-in, warehousing and handling expenditures, factory labor and overhead, and freight-out
  
503,078
   
(619,172
)
Inventory reserve
  
980,000
   
-
 
Sales returns
  
104,105
   
(19,999
)
Other
  
19,710
   
(223,895
)
Warehouse and handling reclass
  
(2,195,119
)
  
(2,175,881
)
  
$
255,372
  
$
(3,127,495
)
         
(2) Operating expense adjustments due to:
        
Warehouse and handling reclass
 
$
2,195,119
  
$
2,175,881
 
Reclass to impairment expense
  
285,477
   
-
 
Accrued expenses
  
(377,912
)
  
51,375
 
PTO Accrual
  
(16,930
)
  
(38,647
)
Other
  
(26,291
)
  
(25,544
)
  
$
2,059,463
  
$
2,163,065
 

The decrease to retained earnings from the adjustments as of December 31, 2018, is as follows:

FIFO adjustment
 
$
(786,690
)
Freight-in, warehousing and handling expenditures, factory labor and overhead, and freight-out
  
(442,150
)
Inventory reserve
  
980,000
 
Sales returns
  
(172,494
)
Income tax benefit
  
33,823
 
Accruals and other
  
(852,872
)
Decrease to retained earnings
 
$
(1,240,383
)

Restatement Reconciliation Tables

The following tables present a reconciliation of our Consolidated Balance Sheets as previously reported as of December 31, 2018 and 2017 to the restated amounts shown in this filing.  We have also presented a reconciliation of our Consolidated Statements of Comprehensive Income (Loss) and Consolidated Statements of Cash Flows for the years ended December 31, 2018 and 2017, as previously reported to the restated amounts shown in this filing.  The following restatement adjustment footnote numbers correspond to the restatement adjustment descriptions above.

Tandy Leather Factory, Inc.
Consolidated Balance Sheet

  
December 31, 2018
 
  
As Reported
  
Adjustments
 
As Restated
 
ASSETS
           
CURRENT ASSETS:
           
Cash
 
$
24,070,351
  
$
-
    
$
24,070,351
 
Accounts receivable-trade, net of allowance for doubtful accounts of $15,703
  
408,170
   
-
     
408,170
 
Inventory
  
33,867,276
   
(564,727
)
  (1) (2)(3)(4)(7)  
33,302,549
 
Prepaid income taxes
  
383,478
   
36,430
   
(6)
  
419,908
 
Prepaid expenses
  
1,244,754
   
39,041
   
(7)
  
1,283,795
 
Other current assets
  
161,208
   
170,597
   
(7)
  
331,805
 
Total current assets
  
60,135,237
   
(318,659
)
     
59,816,578
 
                
Property and equipment, at cost
  
28,005,563
   
134,782
   
(7)
  
28,140,345
 
Less accumulated depreciation
  
(13,606,266
)
  
(18,995
)
  
(7)
  
(13,625,261
)
Property and equipment, net
  
14,399,297
   
115,787
      
14,515,084
 
                
Deferred income taxes
  
248,228
   
844,065
   
(6)
  
1,092,293
 
Goodwill
  
954,765
   
-
      
954,765
 
Other intangibles, net of accumulated amortization of  $690,869
  
16,500
   
-
      
16,500
 
Other assets
  
386,107
   
-
      
386,107
 
TOTAL ASSETS
 
$
76,140,134
  
$
641,193
     
$
76,781,327
 
                
LIABILITIES AND STOCKHOLDERS’ EQUITY
               
CURRENT LIABILITIES:
               
Accounts payable-trade
 
$
1,978,840
  
$
175,554
   
(7)
 
$
2,154,394
 
Accrued expenses and other liabilities
  
4,176,479
   
1,225,029
   
(4)(7)
  
5,401,508
 
Current maturities of long-term debt
  
747,335
   
(227,819
)
  
(7)
  
519,516
 
Total current liabilities
  
6,902,654
   
1,172,764
      
8,075,418
 
                
Uncertain tax positions
  
-
   
1,415,715
   
(6)
  
1,415,715
 
Deferred income taxes
  
1,556,493
   
(1,556,493
)
  
(6)(9)
  
-
 
Other non-current liabilities
  
-
   
555,296
   
(6)
  
555,296
 
Long-term debt, net of current maturities
  
8,220,683
   
227,819
   
(7)
  
8,448,502
 
                
COMMITMENTS AND CONTINGENCIES (Note 10)
               
                
STOCKHOLDERS’ EQUITY:
               
Preferred stock, $0.10 par value; 20,000,000 shares authorized; none issued or outstanding; attributes to be determined on issuance
  
-
   
-
      
-
 
Common stock, $0.0024 par value; 25,000,000 shares authorized; 10,353,155 shares issued
  
27,232
   
(2,384
)
  
(10)
  
24,848
 
Paid-in capital
  
7,158,821
   
(2,891,683
)
  
(10)
  
4,267,138
 
Retained earnings
  
65,716,761
   
(1,240,383
)
  
(1)(2)(3)(4)(6)(7)(9)
  
64,476,378
 
Treasury stock at cost (1,292,594 shares)
  
(11,931,850
)
  
2,894,067
   
(10)
  
(9,037,783
)
Accumulated other comprehensive loss (net of tax)
  
(1,510,660
)
  
66,475
   
(9)
  
(1,444,185
)
Total stockholders’ equity
  
59,460,304
   
(1,173,908
)
     
58,286,396
 
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
 
$
76,140,134
  
$
641,193
     
$
76,781,327
 

Tandy Leather Factory, Inc.
Consolidated Statement of Comprehensive Income

  
For the Year Ended December 31, 2018
 
  
As Reported
  
Adjustments
 
As Restated
 
             
Net sales
 
$
83,098,187
  
$
105,382
   
(4)(7)
 
$
83,203,569
 
Cost of sales
  
32,517,996
   
(255,372
)
  
(1)(2)(3)(4)(5)(7)
  
32,262,624
 
Gross profit
  
50,580,191
   
360,754
       
50,940,945
 
                 
Operating expenses
  
46,751,728
   
(2,059,463
)
  
(5)(7)
  
44,692,265
 
Impairment expense
  
-
   
285,477
   
(7)
  
285,477
 
                 
Income from operations
  
3,828,463
   
2,134,740
       
5,963,203
 
                 
Other (income) expense:
                
Interest expense
  
304,957
   
-
       
304,957
 
Other, net
  
(180,191
)
  
(373,382
)
  
(9)
  
(553,573
)
Total other (income) expense
  
124,766
   
(373,382
)
      
(248,616
)
                 
Income before income taxes
  
3,703,697
   
2,508,122
       
6,211,819
 
                 
Provision for income taxes
  
1,739,869
   
73,585
   
(6)
  
1,813,454
 
                 
Net income
 
$
1,963,828
  
$
2,434,537
      
$
4,398,365
                 
Foreign currency translation adjustments, net of tax
  
(548,557
)
  
(133,315
)
  
(9)
  
(681,872
)
                 
Comprehensive income
 
$
1,415,271
  
$
2,301,222
      
$
3,716,493
 
                 
Net income per common share:
                
Basic
 
$
0.21
  
$
0.27
      
$
0.48
 
Diluted
 
$
0.21
  
$
0.26
      
$
0.48
 
                 
Weighted average number of shares outstanding:
                
Basic
  
9,185,203
   
9,185,203
       
9,185,203
 
Diluted
  
9,185,662
   
9,205,008
       
9,205,008
 

Tandy Leather Factory, Inc.
Consolidated Statement of Cash Flows

  
For the Year Ended December 31, 2018
 
  
As Reported
  
Adjustments
 
As Restated
 
Cash flows from operating activities:
           
            
Net income
 
$
1,963,828
  
$
2,434,537
    
$
4,398,365
 
Adjustments to reconcile net income to net cash provided by operating activities:
              
Depreciation and amortization
  
1,797,281
   
1,481
   
(7)
  
1,798,762
 
Impairment of goodwill and long-lived assets
  
285,477
   
-
      
285,477
 
Loss on disposal of assets
  
1,321
   
-
      
1,321
 
Stock-based compensation
  
327,629
   
-
      
327,629
 
Deferred income taxes
  
(90,997
)
  
348,246
   
(6)(9)
  
257,249
 
Exchange (gain) loss
  
27,984
   
(434,816
)
  
(9)
  
(406,832
)
Changes in operating assets and liabilities:
               
Accounts receivable - trade
  
53,042
   
(3,887
)
  
(7)
  
49,155
 
Inventory
  
3,443,921
   
(2,409,491
)
  
(1)(2)(3)(4)
  
1,034,430
 
Prepaid expenses
  
239,082
   
(167,167
)
  
(6)(7)
  
71,915
 
Other current assets
  
27,821
   
(27,821
)
  
(7)
  
-
 
Accounts payable - trade
  
(197,960
)
  
49,620
   
(7)
  
(148,340
)
Accrued expenses and other liabilities
  
(181,959
)
  
496,896
   
(4)(7)
  
314,937
 
Income taxes
  
(308,129
)
  
(487,480
)
  
(6)
  
(795,609
)
Other assets
  
(3,690
)
  
586,971
   
(7)
  
583,281
 
Total adjustments
  
5,420,823
   
(2,047,448
)
     
3,373,375
 
Net cash provided by operating activities
  
7,384,651
   
387,089
      
7,771,740
 
                
Cash flows from investing activities:
               
Purchase of property and equipment
  
(1,091,433
)
  
3,105
   
(7)
  
(1,088,328
)
Proceeds from sale of assets
  
27,396
   
543
   
(7)
  
27,939
 
Net cash used  in (provided by) investing activities
  
(1,064,037
)
  
3,648
      
(1,060,389
)
                
Cash flows from financing activities:
               
Proceeds from long-term debt
  
1,596,288
   
-
      
1,596,288
 
Repurchase of treasury stock
  
(1,653,266
)
  
-
      
(1,653,266
)
Net cash used in financing activities
  
(56,978
)
  
-
      
(56,978
)
                
Effect of exchange rate changes on cash and cash equivalents
  
(530,543
)
  
(136,336
)
  
(9)
  
(666,879
)
                
Net increase in cash and cash equivalents
  
5,733,093
   
254,401
      
5,987,494
 
                
Cash and cash equivalents, beginning of period
  
18,337,258
   
(254,401
)
     
18,082,857
 
Cash and cash equivalents, end of period
 
$
24,070,351
  
$
-
     
$
24,070,351
 
                
Supplemental disclosures of cash flow information:
               
Interest paid during the period
 
$
304,957
  
$
-
     
$
304,957
 
Income tax paid during the period, net of refunds
 
$
2,138,995
  
$
(777,595
)
    
$
1,361,400
 

Tandy Leather Factory, Inc.
Consolidated Balance Sheet

  
December 31, 2017
 
  
As Reported
  
Adjustments
 
As Restated
 
ASSETS
           
CURRENT ASSETS:
           
Cash
 
$
18,337,258
  
$
(254,401
)
  
(7)
 
$
18,082,857
 
Accounts receivable-trade, net of allowance for doubtful accounts of $22,642
  
461,212
   
-
      
461,212
 
Inventory
  
37,311,197
   
(2,765,113
)
  
(1)(2)(4)(5)(7)
  
34,546,084
 
Prepaid income taxes
  
41,307
   
(41,307
)
  
(6)
  
-
 
Prepaid expenses
  
1,473,147
   
(80,869
)
  
(7)
  
1,392,278
 
Other current assets
  
189,029
   
139,493
   
(7)
  
328,522
 
Total current assets
  
57,813,150
   
(3,002,197
)
     
54,810,953
 
                
Property and equipment, at cost
  
27,218,481
   
113,818
   
(7)
  
27,332,299
 
Less accumulated depreciation
  
(11,750,639
)
  
(14,777
)
  
(7)
  
(11,765,416
)
Property and equipment, net
  
15,467,842
   
99,041
      
15,566,883
 
                
Deferred income taxes
  
271,738
   
859,167
   
(6)
  
1,130,905
 
Goodwill
  
962,949
   
-
      
962,949
 
Other intangibles, net of accumulated amortization of $688,147
  
19,222
   
-
      
19,222
 
Other assets
  
379,695
   
-
      
379,695
 
TOTAL ASSETS
 
$
74,914,596
  
$
(2,043,989
)
    
$
72,870,607
 
                
LIABILITIES AND STOCKHOLDERS’ EQUITY
               
CURRENT LIABILITIES:
               
Accounts payable-trade
 
$
2,480,593
  
$
(70,748
)
  
(7)
 
$
2,409,845
 
Accrued expenses and other liabilities
  
3,886,334
   
1,158,681
   
(4)(7)
  
5,045,015
 
Income taxes payable
  
-
   
354,629
    (6)  
354,629
 
Current maturities of long-term debt
  
614,311
   
-
      
614,311
 
Total current liabilities
  
6,981,238
   
1,442,562
      
8,423,800
 
                
Uncertain tax position
  
-
   
1,197,078
   
(6)
  
1,197,078
 
Deferred income taxes
  
1,636,958
   
(1,636,958
)
  
(6)(9)
  
-
 
Other non-current liabilities
  
-
   
596,770
   
(6)
  
596,770
 
Long-term debt, net of current maturities
  
6,757,419
   
-
      
6,757,419
 
                
COMMITMENTS AND CONTINGENCIES (Note 10)
               
                
STOCKHOLDERS’ EQUITY:
               
Preferred stock, $0.10 par value; 20,000,000 shares authorized; none issued or outstanding; attributes to be determined on issuance
  
-
   
-
      
-
 
Common stock, $0.0024 par value; 25,000,000 shares authorized;  10,320,069 shares issued
  
27,153
   
(2,385
)
  
(10)
  
24,768
 
Paid-in capital
  
6,831,271
   
(2,891,682
)
  
(10)
  
3,939,589
 
Retained earnings
  
63,921,244
   
(3,843,231
)
  
(1) (2)(4)(6)(7)(9)
  
60,078,013
 
Treasury stock at cost (1,049,207 shares)
  
(10,278,584
)
  
2,894,067
   
(10)
  
(7,384,517
)
Accumulated other comprehensive loss (net of tax)
  
(962,103
)
  
199,790
   
(9)
  
(762,313
)
Total stockholders’ equity
  
59,538,981
   
(3,643,441
)
     
55,895,540
 
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
 
$
74,914,596
  
$
(2,043,989
)
    
$
72,870,607
 

Tandy Leather Factory, Inc.
Consolidated Statement of Comprehensive Income (Loss)

  
For the Year Ended December 31, 2017
 
  
As Reported
  
Adjustments
 
As Restated
 
            
Net sales
 
$
82,321,268
  
$
99,327
   
(4)(7)
 
$
82,420,595
 
Cost of sales
  
30,207,439
   
3,127,495
   
(1)(2)(4)(5)
  
33,334,934
 
Gross profit (loss)
  
52,113,829
   
(3,028,168
)
     
49,085,661
 
                
Operating expenses
  
44,872,007
   
(2,163,065
)
  
(5)(7)
  
42,708,942
 
Income (loss) from operations
  
7,241,822
   
(865,103
)
     
6,376,719
 
                
Other (income) expense:
               
Interest expense
  
205,555
   
-
      
205,555
 
Other, net
  
(126,857
)
  
(40,255
)
  
(9)
  
(167,112
)
Total other (income) expense
  
78,698
   
(40,255
)
     
38,443
 
                
Income (loss) before income taxes
  
7,163,124
   
(824,848
)
     
6,338,276
 
                
Provision for income taxes
  
2,711,373
   
1,148,459
   
(6)
  
3,859,832
 
                
Net income (loss)
 
$
4,451,751
  
$
(1,973,307
)
    
$
2,478,444
 
                
Foreign currency translation adjustments, net of tax
  
931,026
   
(519,599
)
  
(9)
  
411,427
 
                
Comprehensive income (loss)
 
$
5,382,777
  
$
(2,492,906
)
    
$
2,889,871
 
                
Net income (loss) per common share:
               
Basic
 
$
0.48
  
$
(0.21
)
    
$
0.27
 
Diluted
 
$
0.48
  
$
(0.21
)
    
$
0.27
 
                
Weighted average number of shares outstanding:
               
Basic
  
9,242,092
   
9,242,092
      
9,242,092
 
Diluted
  
9,256,810
   
9,245,537
      
9,245,537
 

Tandy Leather Factory, Inc.
Consolidated Statement of Cash Flows

  
For the Year Ended December 31, 2017
 
    
2017
As Reported
    
2017
Adjustments
  
2017
As Restated
  
            
Cash flows from operating activities:
           
            
Net income (loss)
 
$
4,451,751
  
$
(1,973,307
)
   
$
2,478,444
 
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
              
Depreciation and amortization
  
1,875,102
   
8,941
   
(7)
  
1,884,043
 
Loss on disposal of assets
  
3,139
   
-
      
3,139
 
Stock-based compensation
  
239,599
   
-
      
239,599
 
Deferred income taxes
  
(215,576
)
  
853,632
   
(6)(9)
  
638,056
 
Exchange loss
  
29,848
   
3,151
   
(9)
  
32,999
 
Changes in operating assets and liabilities:
               
Accounts receivable - trade
  
99,772
   
(11,327
)
  
(7)
  
88,445
 
Inventory
  
(4,133,658
)
  
1,155,373
   
(1)(2)(4)
  
(2,978,285
)
Prepaid expenses
  
135,713
   
(68,901
)
  
(6)(7)
  
66,812
 
Other current assets
  
(48,797
)
  
48,797
   
(7)
  
-
 
Accounts payable - trade
  
(208,434
)
  
973,323
   
(7)
  
764,889
 
Accrued expenses and other liabilities
  
(983,710
)
  
(1,282,591
)
  
(4)(7)
  
(2,266,301
)
Income taxes
  
923,016
   
225,297
   
(6)
  
1,148,313
 
Other assets
  
(43,669
)
  
409,291
   
(7)
  
365,622
 
Total adjustments
  
(2,327,655
)
  
2,314,986
      
(12,669
)
Net cash provided by (used in) operating activities
  
2,124,096
   
341,679
      
2,465,775
 
                
Cash flows from investing activities:
               
Purchase of property and equipment
  
(1,689,645
)
  
(2,354
)
  
(7)
  
(1,691,999
)
Proceeds from sale of assets
  
35,963
   
-
      
35,963
 
Net cash used  in investing activities
  
(1,653,682
)
  
(2,354
)
     
(1,656,036
)
                
Cash flows from financing activities:
               
Payments on capital lease obligations
  
(72,686
)
  
-
      
(72,686
)
Proceeds from exercise of stock options
  
223,404
   
-
      
223,404
 
Net cash provided by financing activities
  
150,718
   
-
      
150,718
 
                
Effect of exchange rate changes on cash and cash equivalents
  
853,822
   
(593,726
)
  
(9)
  
260,096
 
                
Net (decrease) increase in cash and cash equivalents
  
1,474,954
   
(254,401
)
     
1,220,553
 
                
Cash and cash equivalents, beginning of period
  
16,862,304
   
-
      
16,862,304
 
Cash and cash equivalents, end of period
 
$
18,337,258
  
$
(254,401
)
    
$
18,082,857
 
                
Supplemental disclosures of cash flow information:
               
Interest paid during the period
 
$
205,555
  
$
-
     
$
205,555
 
Income tax paid during the period, net of refunds
 
$
1,788,357
  
$
454,661
     
$
2,243,018
 

Tandy Leather Factory, Inc.
Consolidated Balance Sheet
(Unaudited)

  
March 31, 2019
 
  
As Reported
  
Adjustments
 
As Restated
 
ASSETS
           
CURRENT ASSETS:
           
Cash
 
$
12,679,373
  
$
-
    
$
12,679,373
 
Short-term investments
  
4,999,750
   
6,828
   
(7)
  
5,006,578
 
Accounts receivable-trade, net of allowance for doubtful accounts of $12,940
  
456,537
   
-
      
456,537
 
Inventory
  
30,564,322
   
(389,839
)
  
(1)(2)(3)(4)
  
30,174,483
 
Prepaid income taxes
  
272,028
   
36,430
   
(6)
  
308,458
 
Prepaid expenses
  
1,537,367
   
54,676
   
(7)
  
1,592,043
 
Other current assets
  
174,043
   
106,363
    (4)  
280,406
 
Total current assets
  
50,683,420
   
(185,542
)
     
50,497,878
 
                
Property and equipment, at cost
  
27,863,939
   
38,268
   (7)
  
27,902,207
 
Less accumulated depreciation
  
(13,921,523
)
  
(20,007
)
  (7)
  
(13,941,530
)
Property and equipment, net
  
13,942,416
   
18,261
      
13,960,677
 
                
Operating lease assets
  
6,389,561
   
10,379,823
   
(8)
  
16,769,384
 
Deferred income taxes
  
-
   
908,500
   
(6)
  
908,500
 
Goodwill
  
956,945
   
-
      
956,945
 
Other intangibles, net of accumulated amortization of $714,000
  
15,833
   
-
      
15,833
 
Other assets
  
379,661
   
-
      
379,661
 
TOTAL ASSETS
 
$
72,367,836
  
$
11,121,042
     
$
83,488,878
 
                
LIABILITIES AND STOCKHOLDERS’ EQUITY
               
CURRENT LIABILITIES:
               
Accounts payable-trade
 
$
897,196
  
$
-
     
$
897,196
 
Accrued expenses and other liabilities
  
3,752,711
   
354,568
   
(4)(7)
  
4,107,279
 
Operating lease liabilities
  
3,340,843
   
707,318
   
(8)
  
4,048,161
 
Total current liabilities
  
7,990,750
   
1,061,886
      
9,052,636
 
                
Uncertain tax position
  
-
   
1,415,715
   
(6)
  
1,415,715
 
Deferred income taxes
  
1,258,721
   
(1,258,721
)
  
(6)(8)(9)
  
-
 
Other non-current liabilities
  
-
   
555,778
   
(6)
  
555,778
 
Operating lease liabilities, non-current
  
3,427,705
   
9,806,954
   
(8)
  
13,234,659
 
                
COMMITMENTS AND CONTINGENCIES (Note 10)
               
                
STOCKHOLDERS’ EQUITY:
               
Preferred stock, $0.10 par value; 20,000,000 shares authorized; none issued or outstanding; attributes to be determined on issuance
  
-
   
-
      
-
 
Common stock, $0.0024 par value; 25,000,000 shares authorized;  10,354,563 shares issued
  
27,234
   
(2,383
)
  
(10)
  
24,851
 
Paid-in capital
  
7,344,644
   
(2,891,684
)
  
(10)
  
4,452,960
 
Retained earnings
  
66,188,614
   
(554,243
)
  
(1) (2)(3)(4)(6)(7)(8)(9)
  
65,634,371
 
Treasury stock at cost (1,420,539 shares)
  
(12,646,467
)
  
2,894,067
   
(10)
  
(9,752,400
)
Accumulated other comprehensive loss (net of tax)
  
(1,223,365
)
  
93,673
   
(9)
  
(1,129,692
)
Total stockholders’ equity
  
59,690,660
   
(460,570
)
     
59,230,090
 
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
 
$
72,367,836
  
$
11,121,042
     
$
83,488,878
 

Tandy Leather Factory, Inc.
Consolidated Statement of Comprehensive Income
Unaudited

  
For the Three Months Ended March 31, 2019
 
  
As Reported
  
Adjustments
 
As Restated
 
            
Net sales
 
$
20,784,652
  
$
156,670
   
(4)
 
$
20,941,322
 
Cost of sales
  
8,333,847
   
362,805
   
(1) (2)(3)(4)(5)(7)
  
8,696,652
 
Gross profit
  
12,450,805
   
(206,135
)
     
12,244,670
 
                
Operating expenses
  
11,281,377
   
(1,249,724
)
  
(5)(7)(8)
  
10,031,653
 
                
Income (loss) from operations
  
1,169,428
   
1,043,589
      
2,213,017
 
                
Other (income) expense:
               
Interest expense
  
32,383
   
-
      
32,383
 
Other, net
  
(33,041
)
  
142,659
   
(7)(9)
  
109,618
 
Total other (income) expense
  
(658
)
  
142,659
      
142,001
 
                
Income (loss) before income taxes
  
1,170,086
   
900,930
      
2,071,016
 
                
Provision (benefit) for income taxes
  
301,123
   
250,082
   
(6)
  
551,205
 
                
Net income (loss)
 
$
868,963
  
$
650,848
     
$
1,519,811
 
                
Foreign currency translation adjustments, net of tax
  
287,295
   
27,198

  
(9)
  
314,493

                
Comprehensive income (loss)
 
$
1,156,258
  
$
678,049
     
$
1,843,304
 
                
Net income (loss) per common share:
               
Basic
 
$
0.10
  
$
0.07
     
$
0.17
 
Diluted
 
$
0.10
  
$
0.07
     
$
0.17
 
                
                
Basic
  
9,009,752
   
9,009,752
      
9,009,752
 
Diluted
  
9,010,037
   
9,011,107
      
9,011,107
 

Tandy Leather Factory, Inc.
Consolidated Statement of Cash Flows
Unaudited

  
For the Three Months Ended March 31, 2019
 
  
As Reported
  
Adjustments
 
As Restated
 
Cash flows from operating activities:
           
Net income (loss)
 
$
868,963
  
$
650,848
    
$
1,519,811
 
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
  
   
     
 
Depreciation and amortization
  
495,449
   
(1,154
)
  
(7)
  
494,295
 
Right-of-use asset amortization
  
-
   
865,050
   
(8)
  
865,050
 
(Gain) loss on disposal of assets
  
(3,794
)
  
-
      
(3,794
)
Stock-based compensation
  
185,825
   
-
      
185,825
 
Deferred income taxes
  
(33,861
)
  
217,654
   
(6)(9)
  
183,793
 
Exchange (gain) loss
  
2,154
   
134,113
   
(7)(9)
  
136,267
 
Changes in operating assets and liabilities:
  
   
      
 
Accounts receivable-trade
  
(48,367
)
  
(7,696
)
  
(7)
  
(56,063
)
Inventory
  
3,302,954
   
(130,791
)
  
(1)(2)(3)(4)
  
3,172,163
 
Prepaid expenses
  
(292,613
)
  
325,165
   
(7)
  
32,552
 
Other current assets
  
(12,835
)
  
(180,812
)
  
(7)
  
(193,647
)
Accounts payable-trade
  
(318,294
)
  
(962,853
)
  
(7)
  
(1,281,147
)
Accrued expenses and other liabilities
  
(1,205,241
)
  
49,346
   
(4)(7)
  
(1,155,895
)
Income taxes
  
95,767
   
12,943
   
(6)
  
108,710
 
Other assets
  
6,446
   
(48,416
)
  
(7)
  
(41,970
)
Operating lease liability
  
-
   
(833,690
)
  
(8)
  
(833,690
)
Total adjustments
  
2,173,590
   
(561,141
)
     
1,612,449
 
Net cash provided by operating activities
  
3,042,553
   
89,707
      
3,132,260
 
                
Cash flows from investing activities:
               
Purchase of property and equipment
  
(30,893
)
  
(7
)
  
(7)
  
(30,900
)
Purchase of short-term investments
  
(4,999,750
)
  
-
      
(4,999,750
)
Proceeds from sales of assets
  
12,552
   
-
      
12,552
 
Net cash used in investing activities
  
(5,018,091
)
  
(7
)
     
(5,018,098
)
                
Cash flows from financing activities:
               
Payments on long-term debt
  
(8,968,018
)
  
-
      
(8,968,018
)
Repurchase of treasury stock
  
(714,617
)
  
-
      
(714,617
)
Net cash used in financing activities
  
(9,682,635
)
  
-
      
(9,682,635
)
                
Effect of exchange rate changes on cash and cash equivalents
  
267,195
   
(89,700
)
  
(9)
  
177,495
 
                
Net (decrease) increase in cash and cash equivalents
  
(11,390,978
)
  
-
      
(11,390,978
)
Cash and cash equivalents, beginning of period
  
24,070,351
   
-
      
24,070,351
 
                
Cash and cash equivalents, end of period
 
$
12,679,373
  
$
-
     
$
12,679,373
 

Tandy Leather Factory, Inc.
Consolidated Balance Sheet
Unaudited

  
September 30, 2018
 
  
As Reported
  
Adjustments
 
As Restated
 
ASSETS
           
CURRENT ASSETS:
           
Cash
 
$
16,814,972
  
$
-
    
$
16,814,972
 
Short-term investments
  
   
     
 
Accounts receivable-trade, net of allowance for doubtful accounts of $9,839
  
418,612
   
-
   

  
418,612
 
Inventory
  
40,720,630
   
(2,308,873
)
  
(1)(2)(3)(4)
  
38,411,757
 
Prepaid income taxes
  
452,389
   
(386,595
)
  
(6)
  
65,794
 
Prepaid expenses
  
1,348,113
   
64,393
   
(7)
  
1,412,506
 
Other current assets
  
290,028
   
93,308
   
(7)
  
383,336
 
Total current assets
  
60,044,744
   
(2,537,767
)
     
57,506,977
 
                
Property and equipment, at cost
  
27,950,353
   
33,314
   
(7)
  
27,983,667
 
Less accumulated depreciation
  
(12,976,025
)
  
(17,940
)
  
(7)
  
(12,993,965
)
Property and equipment, net
  
14,974,328
   
15,374
      
14,989,702
 
                
Deferred income taxes
  
281,721
   
1,139,475
   
(6)
  
1,421,196
 
Goodwill
  
960,304
   
-
      
960,304
 
Other intangibles, net of accumulated amortization of $712,000
  
17,166
   
-
      
17,166
 
Other assets
  
387,487
   
-
      
387,487
 
Other assets
 
$
76,665,750
  
$
(1,382,918
)
    
$
75,282,832
 
                
LIABILITIES AND STOCKHOLDERS’ EQUITY
               
CURRENT LIABILITIES:
               
Accounts payable-trade
 
$
3,718,393
   
-
     
$
3,718,393
 
Accrued expenses and other liabilities
  
2,235,793
   
1,174,004
   
(4)(7)
  
3,409,797
 
Current maturities of long-term debt
  
174,056
   
-
      
174,056
 
Total current liabilities
  
6,128,242
   
1,174,004
      
7,302,246
 
       

      

 
Uncertain tax positions
  
-
   
1,197,078
   
(6)
  
1,197,078
 
Deferred income taxes
  
1,467,481
   
(1,467,481
)
  
(6)(9)
  
-
 
Other non-current liabilities
  
-
   
598,188
   
(6)
  
598,188
 
Long-term debt, net of current maturities
  
8,180,613
   
-
      
8,180,613
 
                
COMMITMENTS AND CONTINGENCIES (Note 10)
               
                
STOCKHOLDERS’ EQUITY:
               
Preferred stock, $0.10 par value; 20,000,000 shares authorized; none issued or outstanding; attributes to be determined on issuance
  
-
   
-
   
-
  
-
 
Common stock, $0.0024 par value; 25,000,000 shares authorized; 10,336,717 shares issued
  
27,193
   
(2,385
)
  
(10)
  
24,808
 
Paid-in capital
  
6,907,678
   
(2,891,682
)
  
(10)
  
4,015,996
 
Retained earnings
  
66,345,110
   
(2,983,997
)
  
(1)(2)(3)(4)(6)(7)(9)
  
63,361,113
 
Treasury stock at cost (1,182,509 shares)
  
(11,273,822
)
  
2,894,067
   
(10)
  
(8,379,755
)
Accumulated other comprehensive loss (net of tax)
  
(1,116,745
)
  
99,290
   
(9)
  
(1,017,455
)
Total stockholders’ equity
  
60,889,414
   
(2,884,707
)
     
58,004,707
 
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
 
$
76,665,750
  
$
(1,382,918
)
    
$
75,282,832
 

Tandy Leather Factory, Inc.
Consolidated Statement of Comprehensive Income (Loss)
Unaudited

  
Three Months Ended September 30, 2018
 
  
As Reported
  
Adjustments
 
As Restated
 
            
Net sales
 
$
18,887,099
  
$
(8,836
)
  
(4)
  
18,878,263
 
Cost of sales
  
7,040,266
   
(57,886
)
  
(1)(2)(3)(4)(5)
  
6,982,380
 
Gross profit
  
11,846,833
   
49,050
      
11,895,883
 
                
Operating expenses
  
11,531,389
   
(535,400
)
  
(5)(7)
  
10,995,989
 
                
Income from operations
  
315,444
   
584,450
      
899,894
 
                
Other expense:
               
Interest expense
  
80,710
   
-
      
80,710
 
Other, net
  
(40,846
)
  
-
      
(40,846
)
Total other expense
  
39,864
   
-
      
39,864
 
                
Income before income taxes
  
275,580
   
584,450
      
860,030
 
                
Provision (benefit) for income taxes
  
397,114
   
(145,785
)
  
(6)
  
251,329
 
                
Net income (loss)
 
$
(121,534
)
 
$
730,235
     
$
608,701
 
                
Foreign currency translation adjustments, net of tax
  
118,165
   
(29,541
)
  
(9)
  
88,624
 
                
Comprehensive income (loss)
 
$
(3,369
)
 
$
700,694
     
$
697,325
 
                
Net income (loss) per common share:
               
Basic
 
$
(0.01
)
 
$
0.08
     
$
0.07
 
Diluted
 
$
(0.01
)
 
$
0.08
     
$
0.07
 
                
Weighted average number of shares outstanding:
               
Basic
  
9,154,209
   
9,154,215
      
9,154,215
 
Diluted
  
9,155,031
   
9,160,022
      
9,160,022
 

Tandy Leather Factory, Inc.
Consolidated Statement of Comprehensive Income
Unaudited

  
Nine Months Ended September 30, 2018
 
  
As Reported
  
Adjustments
 
As Restated
 
            
Net sales
 
$
58,353,784
  
$
212,279
   
(4)
 
$
58,566,063
 
Cost of sales
  
20,545,547
   
1,202,081
   
(1)(2)(3)(4)(5)(7)
  
21,747,628
 
Gross profit
  
37,808,237
   
(989,802
)
     
36,818,435
 
                
Operating expenses
  
33,742,351
   
(1,460,053
)
  
(5)(7)
  
32,282,298
 
                
Income from operations
  
4,065,886
   
470,251
      
4,536,137
 
                
Other (income) expense:
               
Interest expense
  
223,534
   
-
      
223,534
 
Other, net
  
(126,459
)
  
(199,607
)
  
(9)
  
(326,066
)
Total other (income) expense
  
97,075
   
(199,607
)
     
(102,532
)
                
Income before income taxes
  
3,968,811
   
669,858
      
4,638,669
 
                
Provision (benefit) for income taxes
  
1,376,634
   
(21,065
)
  
(6)
  
1,355,569
 
                
Net income
 
$
2,592,177
  
$
690,923
     
$
3,283,100
 
                
Foreign currency translation adjustments, net of tax
  
(154,642
)
  
(100,500
)
  
(9)
  
(255,142
)
                
Comprehensive income
 
$
2,437,535
  
$
590,423
     
$
3,027,958
 
                
Net income per common share:
               
Basic
 
$
0.28
  
$
0.08
     
$
0.36
 
Diluted
 
$
0.28
  
$
0.08
     
$
0.36
 
                
Weighted average number of shares outstanding:
               
Basic
  
9,199,173
   
9,199,173
      
9,199,173
 
Diluted
  
9,199,959
   
9,201,577
      
9,201,577
 

Tandy Leather Factory, Inc.
Consolidated Statement of Cash Flows
Unaudited

  
For the Nine Months Ended September 30, 2018
 
  
As Reported
  
Adjustments
 
As Restated
 
Cash flows from operating activities:
           
Net income
 
$
2,592,177
  
$
690,923
    
$
3,283,100
 
Adjustments to reconcile net income to net cash provided by operating activities:
  
   
     
 
Depreciation and amortization
  
1,310,774
   
2,056
  (7)
  
1,312,830
 
(Gain) loss on disposal of assets
  
4,556
   
-
     
4,556
 
Stock-based compensation
  
76,447
   
-
     
76,447
 
Deferred income taxes
  
(115,460
)
  
(174,831
)
  
(6)(9)
  
(290,291
)
Exchange (gain) loss
  
(93,163
)
  
(43,735
)
  
(9)
  
(136,898
)
Changes in operating assets and liabilities:
               
Accounts receivable-trade
  
42,600
   
(53,500
)
  
(7)
  
(10,900
)
Inventory
  
(3,409,433
)
  
(552,298
)
  
(1)(2)(4)
  
(3,961,731
)
Prepaid expenses
  
125,034
   
(90,533
)
  
(6)(7)
  
34,501
 
Other current assets
  
(111,688
)
  
111,688
   
(7)
  
-
 
Accounts payable-trade
  
28,525
   
1,374,694
   
(7)
  
1,403,219
 
Accrued expenses and other liabilities
  
(609,577
)
  
(1,043,249
)
  
(4)(7)
  
(1,652,826
)
Income taxes
  
(475,082
)
  
56,112
   
(6)
  
(418,970
)
Other assets
  
(5,736
)
  
358,049
   
(7)
  
352,313
 
Total adjustments
  
(3,232,203
)
  
(55,547
)
     
(3,287,750
)
Net cash provided (used) by operating activities
  
(640,026
)
  
635,376
      
(4,650
)
                
Cash flows from investing activities:
               
Purchase of property and equipment
  
(887,679
)
  
-
      
(887,679
)
Proceeds from sales of assets
  
17,718
   
-
      
17,718
 
Net cash used in investing activities
  
(869,961
)
  
-
      
(869,961
)
                
Cash flows from financing activities:
               
Proceeds from long-term debt
  
982,939
   
-
      
982,939
 
Repurchase of treasury stock
  
(995,238
)
  
-
      
(995,238
)
Net cash used in financing activities
  
(12,299
)
  
-
      
(12,299
)
                
Effect of exchange rate changes on cash and cash equivalents
  
-
   
(380,975
)
  
(9)
  
(380,975
)
                
Net (decrease) increase in cash and cash equivalents
  
(1,522,286
)
  
254,401
      
(1,267,885
)
Cash and cash equivalents, beginning of period
  
18,337,258
   
(254,401
)
     
18,082,857
 
                
Cash and cash equivalents, end of period
 
$
16,814,972
  
$
-
     
$
16,814,972
 

Tandy Leather Factory, Inc.
Consolidated Balance Sheet
Unaudited

  
June 30, 2018
 
  
As Reported
  
Adjustments
 
As Restated
 
ASSETS
           
CURRENT ASSETS:
           
Cash and cash equivalents
 
$
18,955,328
  
$
-
    
$
18,955,328
 
Accounts receivable-trade, net of allowance for doubtful accounts of $9,911
  
496,255
   
-
     
496,255
 
Inventory
  
38,020,269
   
(2,897,936
)
  
(1)(2)(3)(4)
  
35,122,333
 
Prepaid income taxes
  
233,002
   
(233,002
)
  
(6)
  
-
 
Prepaid expenses
  
1,374,944
   
64,393
   
(7)
  
1,439,337
 
Other current assets
  
75,459
   
87,557
   
(7)
  
163,016
 
Total current assets
  
59,155,257
   
(2,978,988
)
     
56,176,269
 
                
Property and equipment, at cost
  
27,551,811
   
33,314
   
(7)
  
27,585,125
 
Less accumulated depreciation
  
(12,552,648
)
  
(16,886
)
  
(7)
  
(12,569,534
)
Property and equipment, net
  
14,999,163
   
16,428
      
15,015,591
 
                
Deferred income taxes
  
269,512
   
1,016,036
   
(6)
  
1,285,548
 
Goodwill
  
958,464
   
-
      
958,464
 
Other intangibles, net of accumulated amortization of $712,000
  
18,083
   
-
      
18,083
 
Other assets
  
384,744
   
-
      
384,744
 
TOTAL ASSETS
 
$
75,785,223
   
(1,946,524
)
    
$
73,838,699
 
                
LIABILITIES AND STOCKHOLDERS’ EQUITY
               
CURRENT LIABILITIES:
               
Accounts payable-trade
 
$
3,115,778
   
-
     
$
3,115,778
 
Accrued expenses and other liabilities
  
1,971,026
   
1,165,165
   
(4)(7)
  
3,136,191
 
Income taxes payable
  
-
   
153,593
   
(6)
  
153,593
 
Current maturities of long-term debt
  
1,740,556
   
-
      
1,740,556
 
Total current liabilities
  
6,827,360
   
1,318,758
      
8,146,118
 
                
Uncertain tax positions
  
-
   
1,197,078
   
(6)
  
1,197,078
 
Deferred income taxes
  
1,474,675
   
(1,474,675
)
  
(6)(9)
  
-
 
Other non-current liabilities
  
-
   
597,716
   
(6)
  
597,716
 
Long-term debt, net of current maturities
  
6,614,112
   
-
      
6,614,112
 
                
COMMITMENTS AND CONTINGENCIES (Note 10)
  
          
 
                
STOCKHOLDERS’ EQUITY:
               
Preferred stock, $0.10 par value; 20,000,000 shares authorized; none issued or outstanding; attributes to be determined on issuance
  
-
   
-
      
-
 
Common stock, $0.0024 par value; 25,000,000 shares authorized; 10,336,717 shares issued
  
27,193
   
(2,385
)
  
(10)
  
24,808
 
Paid-in capital
  
6,883,919
   
(2,891,682
)
  
(10)
  
3,992,237
 
Retained earnings
  
66,466,644
   
(3,714,232
)
  
(2)(3)(4)(6)(7)(9)
  
62,752,412
 
Treasury stock at cost (1,182,502 shares)
  
(11,273,770
)
  
2,894,067
   
(10)
  
(8,379,703
)
Accumulated other comprehensive loss
  
(1,234,910
)
  
128,831
   
(9)
  
(1,106,079
)
Total stockholders’ equity
  
60,869,076
   
(3,585,401
)
     
57,283,675
 
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
 
$
75,785,223
   
(1,946,524
)
    
$
73,838,699
 

Consolidated Statement of Comprehensive Income (Loss)
Unaudited

  
Three Months Ended June 30, 2018
 
  
As Reported
  
Adjustments
 
As Restated
 
            
Net sales
 
$
19,177,767
  
$
9,455
   
(4)
 
$
19,187,222
 
Cost of sales
  
6,059,325
   
894,405
   
(1)(2)(3)(4)(5)
  
6,953,730
 
Gross profit (loss)
  
13,118,442
   
(884,950
)
     
12,233,492
 
                
Operating expenses
  
11,136,961
   
(485,575
)
  
(5)(7)
  
10,651,386
 
                
Income (loss) from operations
  
1,981,481
   
(399,375
)
     
1,582,106
 
                
Other (income) expense:
               
Interest expense
  
78,182
   
-
      
78,182
 
Other, net
  
(46,741
)
  
(85,101
)
  
(9)
  
(131,842
)
Total other (income) expense
  
31,441
   
(85,101
)
     
(53,660
)
                
Income (loss) before income taxes
  
1,950,040
   
(314,274
)
     
1,635,766
 
                
Provision (benefit) for income taxes
  
509,948
   
(31,925
)
  
(6)
  
478,023
 
                
Net income (loss)
 
$
1,440,092
  
$
(282,349
)
    
$
1,157,743
 
                
Foreign currency translation adjustments, net of tax
  
(294,598
)
  
9,824
   
(9)
  
(284,774
)
                
Comprehensive income (loss)
 
$
1,145,494
  
$
(272,525
)
    
$
872,969
 
                
Net income (loss) per common share:
               
Basic
 
$
0.15
  
$
(0.02
)
    
$
0.13
 
Diluted
 
$
0.15
  
$
(0.02
)
    
$
0.13
 
                
                
Basic
  
9,180,076
   
9,180,076
      
9,180,076
 
Diluted
  
9,180,727
   
9,182,527
      
9,182,527
 

Tandy Leather Factory, Inc.
Consolidated Statement of Comprehensive Income (Loss)
Unaudited

  
Six Months Ended June 30, 2018
 
  
As Reported
  
Adjustments
 
As Restated
 
            
Net sales
 
$
39,466,685
  
$
221,115
   
(4)
 
$
39,687,800
 
Cost of sales
  
13,505,281
   
1,259,967
   
(1)(2)(3)(4)(5)(7)
  
14,765,248
 
Gross profit (loss)
  
25,961,404
   
(1,038,852
)
     
24,922,552
 
                
Operating expenses
  
22,210,962
   
(924,653
)
  
(5)(7)
  
21,286,309
 
                
Income (loss) from operations
  
3,750,442
   
(114,199
)
     
3,636,243
 
                
Other (income) expense:
  
   
      
 
Interest expense
  
142,824
   
-
      
142,824
 
Other, net
  
(85,613
)
  
(199,607
)
  
(9)
  
(285,220
)
Total other (income) expense
  
57,211
   
(199,607
)
     
(142,396
)
                
Income (loss) before income taxes
  
3,693,231
   
85,408
      
3,778,639
 
                
Provision (benefit) for income taxes
  
979,520
   
124,720
   
(6)
  
1,104,240
 
                
Net income (loss)
 
$
2,713,711
  
$
(39,312
)
    
$
2,674,399
 
                
Foreign currency translation adjustments, net of tax
  
(272,807
)
  
(70,959
)
  
(9)
  
(343,766
)
                
Comprehensive income (loss)
 
$
2,440,904
  
$
(110,271
)
    
$
2,330,633
 
                
Net income (loss) per common share:
               
Basic
 
$
0.29
  
$
0.01
     
$
0.29
 
Diluted
 
$
0.29
  
$
0.01
     
$
0.29
 
                
Weighted average number of shares outstanding:
               
Basic
  
9,222,028
   
9,222,028
      
9,222,028
 
Diluted
  
9,222,533
   
9,223,086
      
9,223,086
 

Tandy Leather Factory, Inc.
Consolidated Statement of Cash Flows
Unaudited

  
Six Months Ended June 30, 2018
 
  
As Reported
  
Adjustments
 
As Restated
 
Cash flows from operating activities:
           
Net income (loss)
 
$
2,713,711
  
$
(39,312
)
   
$
2,674,399
 
Adjustments to reconcile net income to net cash provided by operating activities:
              
Depreciation and amortization
  
878,955
   
1,139
   
(7)
  
880,094
 
(Gain) loss on disposal of assets
  
4,556
   
-
      
4,556
 
Stock-based compensation
  
52,688
   
-
      
52,688
 
Deferred income taxes
  
(96,057
)
  
(58,586
)
  
(6)(9)
  
(154,643
)
Exchange (gain) loss
  
(268,321
)
  
52,455
   
(9)
  
(215,866
)
Changes in operating assets and liablities:
               
Accounts receivable-trade
  
(35,043
)
  
12,509
   
(7)
  
(22,534
)
Inventory
  
(709,072
)
  
20,638
   
(1)(2)(4)
  
(688,434
)
Prepaid expenses
  
98,203
   
67,654
   
(6)(7)
  
165,857
 
Other current assets
  
113,570
   
(113,570
)
  
(7)
  
-
 
Accounts payable-trade
  
(189,928
)
  
911,645
   
(7)
  
721,717
 
Accrued expenses and other liabilities
  
(1,258,506
)
  
(662,391
)
  
(4)(7)
  
(1,920,897
)
Income taxes
  
(255,695
)
  
53,044
   
(6)
  
(202,651
)
Other assets
  
(3,910
)
  
426,212
   
(7)
  
422,302
 
Total adjustments
  
(1,668,560
)
  
710,749
   
  
(957,811
)
Net cash provided by operating activities
  
1,045,151
   
671,437
      
1,716,588
 
                
Cash flows from investing activities:
               
Purchase of property and equipment
  
(421,861
)
  
-
      
(421,861
)
Proceeds from sales of assets
  
7,028
   
-
      
7,028
 
Net cash used in investing activities
  
(414,833
)
  
-
      
(414,833
)
                
Cash flows from financing activities:
               
Proceeds from long-term debt
  
982,938
   
-
      
982,938
 
Repurchase of treasury stock
  
(995,186
)
  
-
      
(995,186
)
Net cash used in financing activities
  
(12,248
)
  
-
      
(12,248
)
                
Effect of exchange rate changes on cash and cash equivalents
  
-
   
(417,036
)
  
(9)
  
(417,036
)
                
Net (decrease) increase in cash and cash equivalents
  
618,070
   
254,401
      
872,471
 
Cash and cash equivalents, beginning of period
  
18,337,258
   
(254,401
)
     
18,082,857
 
                
Cash and cash equivalents, end of period
 
$
18,955,328
  
$
-
     
$
18,955,328
 

Tandy Leather Factory, Inc.
Consolidated Balance Sheet
(Unaudited)

  
March 31, 2018
 
  
As Reported
  
Adjustments
 
As Restated
 
ASSETS
           
CURRENT ASSETS:
           
Cash
 
$
19,252,878
  
$
-
    
$
19,252,878
 
Accounts receivable-trade, net of allowance for doubtful accounts of $16,075
  
503,322
   
-
     
503,322
 
Inventory
  
36,771,860
   
(2,494,226
)
  
(1)(2)(3)(4)
  
34,277,634
 
Prepaid expenses
  
1,576,205
   
64,393
   
(7)
  
1,640,598
 
Other current assets
  
78,412
   
91,150
   
(7)
  
169,562
 
Total current assets
  
58,182,677
   
(2,338,683
)
     
55,843,994
 
                
Property and equipment, at cost
  
27,403,608
   
33,314
   
(7)
  
27,436,922
 
Less accumulated depreciation
  
(12,162,066
)
  
(15,831
)
  
(7)
  
(12,177,897
)
Property and equipment, net
  
15,241,542
   
17,483
      
15,259,025
 
                
Deferred income taxes
  
265,456
   
782,684
   
(6)
  
1,048,140
 
Goodwill
  
960,353
   
-
      
960,353
 
Other intangibles, net of accumulated amortization of $711,000
  
18,667
   
-
      
18,667
 
Other assets
  
379,292
   
-
      
379,292
 
TOTAL ASSETS
 
$
75,047,987
  
$
(1,538,516
)
    
$
73,509,471
 
                
LIABILITIES AND STOCKHOLDERS’ EQUITY
               
CURRENT LIABILITIES:
               
Accounts payable-trade
 
$
2,922,764
  
$
-
     
$
2,922,764
 
Accrued expenses and other liabilities
  
2,372,090
   
1,174,621
   
(4)(7)
  
3,546,711
 
Income taxes payable
  
105,176
   
386,595
   
(6)
  
491,771
 
Current maturities of long-term debt
  
1,153,931
   
-
      
1,153,931
 
Total current liabilities
  
6,553,961
   
1,561,216
      
8,115,177
 
                
Uncertain tax position
  
-
   
1,197,078
   
(6)
  
1,197,078
 
Deferred income taxes
  
1,581,178
   
(1,581,178
)
  
(6)(9)
  
-
 
Other non-current liabilities
  
-
   
597,243
   
(6)
  
597,243
 
Long-term debt, net of current maturities
  
6,758,739
   
-
      
6,758,739
 
                
COMMITMENTS AND CONTINGENCIES (Note 10)
               
                
STOCKHOLDERS’ EQUITY:
               
Preferred stock, $0.10 par value; 20,000,000 shares authorized; none issued or outstanding; attributes to be determined on issuance
  
-
   
-
      
-
 
Common stock, $0.0024 par value; 25,000,000 shares authorized;  10,336,717 shares issued
  
27,193
   
(2,385
)
  
(10)
  
24,808
 
Paid-in capital
  
6,860,200
   
(2,891,682
)
  
(10)
  
3,968,518
 
Retained earnings
  
65,026,552
   
(3,431,882
)
  
(1)(2)(3)(4)(6)(7)(9)
  
61,594,670
 
Treasury stock at cost (1,121,607 shares)
  
(10,819,524
)
  
2,894,067
   
(10)
  
(7,925,457
)
Accumulated other comprehensive loss (net of tax of $240,045)
  
(940,312
)
  
119,007
   
(9)
  
(821,305
)
Total stockholders’ equity
  
60,154,109
   
(3,312,875
)
     
56,841,234
 
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
 
$
75,047,987
  
$
(1,538,516
)
    
$
73,509,471
 

Tandy Leather Factory, Inc.
Consolidated Statement of Comprehensive Income
(Unaudited)

  
For the Three Months Ended March 31, 2018
 
  
As Reported
  
Adjustments
 
As Restated
 
            
Net sales
 
$
20,288,918
  
$
211,660
   
(4)
 
$
20,500,578
 
Cost of sales
  
7,445,956
   
365,562
   
(1)(2)(3)(4)(5)(7)
  
7,811,518
 
Gross profit
  
12,842,962
   
(153,902
)
     
12,689,060
 
                
Operating expenses
  
11,074,001
   
(439,078
)
  
(5)(7)
  
10,634,923
 
                
Income from operations
  
1,768,961
   
285,176
      
2,054,137
 
                
Other (income) expense:
               
Interest expense
  
64,642
   
-
      
64,642
 
Other, net
  
(38,872
)
  
(114,506
)
  
(9)
  
(153,378
)
Total other (income) expense
  
25,770
   
(114,506
)
     
(88,736
)
                
Income before income taxes
  
1,743,191
   
399,682
      
2,142,873
 
                
Provision for income taxes
  
469,572
   
156,645
   
(6)
  
626,217
 
                
Net income
 
$
1,273,619
  
$
243,037
     
$
1,516,656
 
                
Foreign currency translation adjustments, net of tax
  
21,791
   
(80,783
)
  
(9)
  
(58,992
)
                
Comprehensive income
 
$
1,295,410
  
$
162,254
     
$
1,457,664
 
                
Net income per common share:
               
Basic
 
$
0.14
  
$
0.03
     
$
0.16
 
Diluted
 
$
0.14
  
$
0.03
     
$
0.16
 
                
Weighted average number of shares outstanding:
               
Basic
  
9,264,446
   
9,264,446
      
9,264,446
 
Diluted
  
9,264,811
   
9,264,604
      
9,264,604
 

Tandy Leather Factory, Inc.
Consolidated Statement of Cash Flows
(Unaudited)

  
For the Three Months Ended March 31, 2018
 
  
As Reported
  
Adjustments
 
As Restated
 
Cash flows from operating activities:
           
            
Net income
 
$
1,273,619
  
$
243,037
    
$
1,516,656
 
Adjustments to reconcile net income to net cash provided by operating activities:
              
Depreciation and amortization
  
465,522
   
1,111
   
(7)
  
466,633
 
Loss on disposal of assets
  
798
   
1,131
   
(7)
  
1,929
 
Stock-based compensation
  
28,969
   
-
      
28,969
 
Deferred income taxes
  
(49,498
)
  
132,263

  
(6)
  
82,765

Exchange (gain) loss
  
2,994
   
(124,717
)
  
(9)
  
(121,723
)
Changes in operating assets and liabilities:
               
Accounts receivable - trade
  
(42,110
)
  
(256,048
)
  
(4)(7)
  
(298,158
)
Inventory
  
539,337
   
(17,812
)
  
(1)(2)(3)(4)(6)
  
521,525
 
Prepaid expenses
  
(103,058
)
  
1,723,149
   
(7)
  
1,620,091
 
Other current assets
  
110,617
   
(1,307,715
)
  
(7)
  
(1,197,098
)
Accounts payable - trade
  
6,055
   
(1,018,467
)
  
(7)
  
(1,012,412
)
Accrued expenses and other liabilities
  
(1,246,439
)
  
714,239
   
(4)(7)
  
(532,200
)
Income taxes
  146,483
 
  (9,979
)
  (6)
  136,504
 
Other assets
  
957
   
76,218

  
(7)
  
77,175

Total adjustments
  
(139,373
)
  
(86,627
)
     
(226,000
)
Net cash provided by operating activities
  
1,134,246
   
156,410

     
1,290,656

                
Cash flows from investing activities:
               
Purchase of property and equipment
  
(240,020
)
  
222,399
   
(7)
  
(17,621
)
Net cash used  in (provided by) investing activities
  
(240,020
)
  
222,399
      
(17,621
)
                
Cash flows from financing activities:
               
Proceeds from long-term debt
  
540,940
   
-
   

  
540,940
 
Repurchase of treasury stock
  
(540,940
)
  
-
   

  
(540,940
)
Net cash used in financing activities
  
-
   
-
      
-
 
                
Effect of exchange rate changes on cash and cash equivalents
  
21,394
   
(124,408
)
  
(9)
  
(103,014
)
                
Net increase in cash and cash equivalents
  
915,620
   
254,401
      
1,170,021
 
                
Cash and cash equivalents, beginning of period
  
18,337,258
   
(254,401
)
     
18,082,857
 
Cash and cash equivalents, end of period
 
$
19,252,878
  
$
-

    
$
19,252,878