FORT WORTH, Texas, May 08, 2019 (GLOBE NEWSWIRE) -- Tandy Leather Factory, Inc. (NASDAQ: TLF) today reported financial results for the first quarter ended March 31, 2019.  A conference call will be conducted by senior management at 10:00 am Eastern Time on May 9, 2019.  Dial-in details are referenced below.

Commenting on the results, Janet Carr, Chief Executive Officer, said, “As we’ve said over the last 6 months, we’re focused on strategic initiatives to reinvigorate the brand and develop a new operating model to transform the business for long-term growth.  To that end, in Q1, we made progress against improving our inventory position and shuttering unproductive stores.  While an operating income decline of 33.9% versus last year is significant, it reflects the start of our investment in rebuilding for growth.  There’s still a lot of work to be done, but we fully expect this investment to deliver longer-term earnings growth.”

Consolidated Reporting

As of January 1, 2019, we operate as a single segment and report on a consolidated basis.  Prior to January 1, 2019, we operated and reported in two segments:  North America and International.   In early 2019, we announced several strategic initiatives to drive future sales growth and long-term profitability.  Key actions include developing a new operating model to better serve our retail and commercial customers, as well as reducing our store management structure from eleven districts reporting to two regional mangers into eight zones reporting to a single vice president.  As a result of these changes in the management of our retail stores and our decision to substantially close all of our international stores, with only one international store expected to remain open in Spain, we have concluded that there is currently only one reportable segment.  All prior year data discussed throughout this press release has been restated to conform to the new reporting structure.  There is no change to our consolidated financial position or results.

Conference Call Information

A conference call will be conducted by senior management at 10:00 a.m. Eastern Time on May 9, 2019, and will be accessible to the public by calling 877-312-5524 or 253-237-1144.  Callers should dial in approximately 5 minutes before the call begins. A conference call replay will be available through 1:00 p.m. Eastern Time on May 14, 2019 and can be accessed by calling 855-859-2056 or 404-537-3406.  For both, reference conference ID number 2183438.  This call will be webcast and can be accessed at the company’s web site at www.tandyleather.com.   

Tandy Leather Factory, Inc., (http://www.tandyleather.com), headquartered in Fort Worth, Texas, is a specialty retailer of a broad product line including leather, leatherworking tools, buckles and adornments for belts, leather dyes and finishes, saddle and tack hardware, and do-it-yourself kits. The Company distributes its products through its 115 North American stores located in 42 US states and 7 Canadian provinces, and two International stores located in the United Kingdom and Spain.  Its common stock trades on the Nasdaq with the symbol "TLF".  To be included on Tandy Leather Factory’s email distribution list, go to http://www.b2i.us/irpass.asp?BzID=1625&to=ea&s=0.

Contact:Tina Castillo, Tandy Leather Factory, Inc.(817) 872-3200 or tcastillo@tandyleather.com

This news release may contain statements regarding future events, occurrences, circumstances, activities, performance, outcomes and results that are considered “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. Actual results and events may differ from those projected as a result of certain risks and uncertainties. These risks and uncertainties include but are not limited to: changes in general economic conditions, negative trends in general consumer-spending levels, failure to realize the anticipated benefits of opening retail stores; availability of hides and leathers and resultant price fluctuations; change in customer preferences for our product, and other factors disclosed in our filings with the Securities and Exchange Commission.  These forward-looking statements are made only as of the date hereof, and except as required by law, we do not intend to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.


Selected financial data (UNAUDITED):

 Qtr ended
3/31/19		 Qtr ended
3/31/18		  
$ Change		  
% Change
Sales$20,784,652  $20,288,918  $495,734  2.4%
Gross profit 12,450,805   12,842,962   (392,157) (3.1)%
    Gross margin 59.9%  63.3%
    
        
Operating expenses 11,281,377   11,074,001   207,376  1.9%
Income from operations$1,169,428  $1,768,961   (599,533) (33.9)%


 Quarter Ended 3/31/19 Quarter Ended 3/31/18   
 # of
stores		Net Sales # of
stores		Net Sales $
Change		%
Change
Same stores*115$20,223,007 115$19,679,491 543,516 2.8%
New stores2 211,782 - - 211,782 100%
Closed stores4 349,863 4 609,427 (259,564)(42.6%)
Total Sales 117$20,784,652 115$20,288,918 495,734 2.4%

*Same store sales are defined as sales from existing stores that were opened during the same comparable fiscal period


TANDY LEATHER FACTORY, INC.
(UNAUDITED)
CONSOLIDATED BALANCE SHEETS

 3/31/19 12/31/18
ASSETS   
CURRENT ASSETS:   
Cash$12,679,373  $24,070,351 
Short term investments – US Treasuries 4,999,750   - 
Accounts receivable-trade, net of allowance for doubtful accounts   
   of $12,940 and $15,703 in 2019 and 2018, respectively 456,537   408,170 
Inventory 30,564,322   33,867,276 
Prepaid income taxes 272,028   383,478 
Prepaid expenses 1,537,367   1,244,754 
Other current assets 174,043   161,208 
Total current assets 50,683,420   60,135,237 
    
PROPERTY AND EQUIPMENT, at cost 27,863,939   28,005,563 
Less accumulated depreciation and amortization (13,921,523)  (13,606,266)
  13,942,416   14,399,297 
    
OPERATING LEASE ASSETS 6,389,561   - 
GOODWILL 956,945   954,765 
OTHER INTANGIBLES, net of accumulated amortization of   
  $714,000 and $713,000 in 2019 and 2018, respectively 15,833   16,500 
OTHER ASSETS 379,661   386,107 
 $72,367,836  $75,891,906 
    
    
    
LIABILITIES AND STOCKHOLDERS' EQUITY   
CURRENT LIABILITIES:   
Accounts payable-trade$ 897 196  $1,215,490 
Accrued expenses and other liabilities 3,752,711   4,939,829 
Operating lease liabilities 3,340,843   - 
Current maturities of long-term debt -   747,335 
Total current liabilities 7,990,750   6,902,654 
    
DEFERRED INCOME TAXES 1,258,721   1,308,265 
    
OPERATING LEASE LIABILITIES, noncurrent 3,427,705   - 
    
LONG-TERM DEBT, net of current maturities -   8,220,683 
    
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, 11,348,186 and 11,346,773 shares issued at 2019 and 2018,   
  8,934,024 and 9,060,561 outstanding at 2019 and 2018, respectively 27,234   27,232 
Paid-in capital 7,344,644   7,158,821 
Retained earnings 66,188,614   65,716,761 
Treasury stock at cost (2,414,162 and 2,286,217 shares at 2019 and 2018) (12,646,467)  (11,931,850)
Accumulated other comprehensive (loss) (1,223,365)  (1,510,660)
Total stockholders' equity 59,690,660   59,460,304 
 $72,600,628  $75,891,906 
    



TANDY LEATHER FACTORY, INC.
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
FOR THE THREE MONTHS ENDED MARCH 31,

  2019   2018 
NET SALES$20,784,652  $20,288,918 
    
COST OF SALES 8,333,847   7,445,956 
    
    Gross profit 12,450,805   12,842,962 
    
OPERATING EXPENSES 11,281,377   11,074,001 
    
INCOME FROM OPERATIONS 1,169,428   1,768,961 
    
OTHER EXPENSE (INCOME):   
    Interest expense 32,383   64,642 
    Other (income), net (33,041)  (38,872)
        Total other expense (658)  25,770 
    
INCOME BEFORE INCOME TAXES 1,170,086   1,743,191 
    
PROVISION FOR INCOME TAXES 301,123   469,572 
    
NET INCOME$868,963  $1,273,619 
    
    
    
NETINCOME PER COMMON SHARE:   
Basic$0.10  $0.14 
Diluted$0.10  $0.14 
    
Weighted Average Number of Shares Outstanding:   
  Basic 9,009,752   9,264,446 
  Diluted 9,010,037   9,264,811 


TANDY LEATHER FACTORY, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
FOR THE THREE MONTHS ENDED MARCH 31,

  2019   2018 
CASH FLOWS FROM OPERATING ACTIVITIES:   
 Net income$  868,963  $1,273,619 
 Adjustments to reconcile net income to net cash provided by operating activities:   
     Depreciation and amortization 495,449   465,522 
     (Gain) / loss on disposal of abandonment of assets (3,794)  798 
     Non-cash stock-based compensation 185,825   28,969 
     Deferred income taxes (33,861)  (49,498)
     Exchange loss 2,154   2,994 
     Net changes in assets and liabilities:   
         Accounts receivable-trade, net (48,367)  (42,110)
        Inventory 3,302,954   539,337 
        Prepaid expenses (292,613)  (103,058)
        Other current assets (12,835)  110,617 
        Accounts payable-trade (318,294)  6,055 
        Accrued expenses and other liabilities (1,205,241)  (1,246,439)
        Income taxes payable 95,767   146,483 
 Total adjustments 2,167,144   (140,330)
                     Net cash provided by operating activities 3,036,107   1,133,289 
    
CASH FLOWS FROM INVESTING ACTIVITIES:   
 Purchase of property and equipment (30,893)  (240,020)
 Purchase of short-term investments – US Treasuries (4,999,750)  - 
 Proceeds from sale of assets / insurance 12,552   - 
 Decrease in other assets 6,446   957 
                      Net cash used in investing activities (5,011,645)  (239,063)
    
CASH FLOWS FROM FINANCING ACTIVITIES:   
 Proceeds from notes payable and long-term debt -   540,940 
 Repurchase of common stock (treasury stock) (714,614)  (540,940)
 Payments on notes payable and long-term debt (8,968,018)  - 
                      Net cash (used in) provided by financing activities (9,682,635)  - 
    
Effect of exchange rate changes on cash 267,195   21,394 
    
NET (DECREASE) INCREASE IN CASH (11,390,978)  915,620 
    
CASH, beginning of period 24,070,351   18,337,258 
    
CASH, end of period$12,679,373  $19,252,878 
    
    
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:   
Interest paid during the period$32,383  $64,642 
Income tax paid during the period, net of (refunds)$235,496  $372,587