FORT WORTH, Texas, Feb 24, 2003 (BUSINESS WIRE) -- The Leather Factory, Inc. (AMEX: TLF) today reported results for the year and fourth quarter ended December 31, 2002. Sales for the year were up 6.6% to $39.7 million over 2001 sales of $37.3 million. Same store sales were up 5.2% for the year while new store sales contributed 12.7%.
As a result of a new accounting pronouncement (SFAS No. 142) adopted by the Company in January 2002, all goodwill from a subsidiary ($4.0 million) was written off in the first quarter of 2002. The write-off resulted in a net loss of $1.4 million or $0.14 per share for the year compared to net income of $2.0 million or $0.20 per share in 2001. Net income before giving effect to the accounting change for 2002 was $2.6 million or $0.26 per share (basic) and $0.24 per share (diluted).
Fourth quarter sales increased 6.8% to $10.0 million compared to $9.3 million for the last quarter of 2002. Net income for this quarter was $510,000 or $0.05 per share, up 4% over net income of $491,000 or $0.05 per share a year ago. Diluted earnings per share in the fourth quarter were $0.05 compared to $0.04 in the last quarter of 2001.
Wray Thompson, Chairman and Chief Executive Officer, commented, "Overall, we are pleased with our 2002 accomplishments. After writing off the excess goodwill this year, we believe our balance sheet provides a clearer picture of our solid financial position. We are particularly pleased with our improved earnings efficiency. From 2000 to 2001, our sales increased 24% and our earnings increased 30%. From 2001 to 2002, our sales increased 6.6% and our earnings (before the accounting change) still increased 29%. In addition, excluding the effect of the goodwill write-off in the first quarter of 2002, we continued our positive earnings trend with fifteen consecutive quarters of higher earnings over the same quarter the previous year."
The Leather Factory, Inc., (http://www.leatherfactory.com), headquartered in Fort Worth, Texas, is an international marketer and wholesale distributor of a broad product line including leather, leatherworking tools, buckles and adornments for belts, leather dyes and finishes, shoe repair supplies, saddle and tack hardware, and do-it-yourself kits, and is a manufacturer and distributor of fancy hat trims, leather lacing and kits. The Company distributes its products through 30 sales and distribution units located throughout the U.S. and Canada and through its subsidiary, Tandy Leather Company, via 15 retail stores and mail/telephone/website orders (http://www.tandyleather.com). Its common stock trades on the American Stock Exchange with the symbol "TLF".
This news release may contain forward-looking statements. All forward-looking statements made here or in other news releases issued by The Leather Factory, Inc. are based on current expectations as of the date of the release. These forward-looking statements involve risks and uncertainties that could cause the results of The Leather Factory, Inc. to differ materially from management's current expectations. Many of these risks and uncertainties are detailed from time to time in TLF's reports filed with the Securities and Exchange Commission, including its most recent annual report on Form 10-K and the most recent quarterly report on Form 10-Q. Investors are reminded that past performance may not be predictive of future results.
The Leather Factory, Inc.
Consolidated Statements of Income
For the Years Ended December 31, 2002 and 2001
2002 2001
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NET SALES $39,728,615 $37,279,262
COST OF SALES 18,393,914 17,934,935
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Gross Profit 21,334,701 19,344,327
OPERATING EXPENSES 17,202,927 15,442,359
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INCOME FROM OPERATIONS 4,131,774 3,901,968
OTHER EXPENSE:
Interest expense 246,878 458,558
Other, net 65,039 74,924
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Total other expense 311,917 533,482
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INCOME BEFORE INCOME TAXES AND CUMULATIVE
EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE 3,819,857 3,368,486
PROVISION FOR INCOME TAXES 1,224,868 1,362,053
------------ ------------
NET INCOME BEFORE CUMULATIVE EFFECT OF
CHANGE IN ACCOUNTING PRINCIPLE 2,594,989 2,006,433
CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING
PRINCIPLE, NET OF INCOME TAXES (4,008,831) -
------------ ------------
NET INCOME (LOSS) $(1,413,842) $2,006,433
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NET INCOME (LOSS) PER COMMON SHARE - BASIC:
INCOME BEFORE CUMULATIVE EFFECT OF CHANGE
IN ACCTG PRINCIPLE $0.26 $0.20
CUMULATIVE EFFECT OF CHANGE IN ACCTG
PRINCIPLE, NET OF TAX (0.40) -
------------ ------------
NET INCOME (LOSS) PER COMMON SHARE $(0.14) $0.20
============ ============
NET INCOME (LOSS) PER COMMON SHARE -
ASSUMING DILUTION:
INCOME BEFORE CUMULATIVE EFFECT OF CHANGE
IN ACCTG PRINCIPLE $0.24 $0.19
CUMULATIVE EFFECT OF CHANGE IN ACCTG
PRINCIPLE, NET OF TAX (0.37) -
------------ ------------
NET INCOME (LOSS) PER COMMON SHARE $(0.13) $0.19
============ ============
SELECTED BALANCE SHEET DATA AS OF: 12/31/02 12/31/01
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INVENTORY $11,695,344 $9,054,269
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TOTAL ASSETS 18,675,602 19,548,325
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NOTES PAYABLE AND LONG-TERM DEBT 4,221,224 4,535,595
------------ ------------
TOTAL STOCKHOLDERS' EQUITY $11,170,062 $12,423,672
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CONTACT: The Leather Factory, Inc., Fort Worth Wray Thompson,
817/496-4414 Shannon L. Greene, sgreene@leatherfactory.com
"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: Statements in this press release regarding Tandy Leather Factory, Inc.'s business which are not historical facts are "forward-looking statements" that involve risks and uncertainties. For a discussion of such risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see "Risk Factors" in the Company's Annual Report or Form 10-K for the most recently ended fiscal year.
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