Delaware
|
75-2543540
|
|
(State
or other jurisdiction of incorporation or organization)
|
(IRS
Employer Identification Number)
|
Class
|
Shares outstanding as of November 8,
2008
|
Common
Stock, par value $0.0024 per share
|
10,989,092
|
PAGE NO.
|
|
Item
1. Financial Statements
|
|
Consolidated
Balance Sheets as of September 30, 2008 and December 31,
2007
|
1
|
Consolidated
Statements of Income for the three and nine months ended September 30,
2008 and 2007
|
2
|
|
|
Consolidated
Statements of Cash Flows for the nine months ended September 30, 2008 and
2007
|
3
|
Consolidated
Statements of Stockholders' Equity for the nine months ended September 30,
2008 and 2007
|
4
|
5
|
|
9
|
|
13
|
|
13
|
|
PART
II. OTHER INFORMATION
|
|
14
|
|
14
|
|
SIGNATURES
|
14
|
September
30, 2008
(unaudited)
|
December
31, 2007
(audited)
|
||||||
ASSETS
|
|||||||
CURRENT
ASSETS:
|
|||||||
Cash
|
$8,523,574
|
$6,310,396
|
|||||
Certificates
of deposit
|
1,858,000
|
-
|
|||||
Marketable
securities
|
400,000
|
500,000
|
|||||
Accounts
receivable-trade, net of allowance for doubtful accounts
|
|||||||
of
$104,000 and $104,000 in 2008 and 2007, respectively
|
1,959,430
|
2,538,816
|
|||||
Inventory
|
17,038,821
|
17,473,352
|
|||||
Deferred
income taxes
|
249,274
|
256,938
|
|||||
Other
current assets
|
974,662
|
1,102,836
|
|||||
Total
current assets
|
31,003,761
|
28,182,338
|
|||||
PROPERTY
AND EQUIPMENT, at cost
|
15,169,776
|
11,793,317
|
|||||
Less
accumulated depreciation and amortization
|
(4,867,095)
|
(4,794,505)
|
|||||
10,302,681
|
6,998,812
|
||||||
GOODWILL
|
981,904
|
990,536
|
|||||
OTHER
INTANGIBLES, net of accumulated amortization of
|
|||||||
$352,000
and $313,000 in 2008 and 2007, respectively
|
345,666
|
384,134
|
|||||
OTHER
assets
|
344,486
|
1,095,686
|
|||||
$42,978,498
|
$37,651,506
|
||||||
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
|||||||
CURRENT
LIABILITIES:
|
|||||||
Accounts
payable-trade
|
$2,764,175
|
$1,497,564
|
|||||
Accrued
expenses and other liabilities
|
3,615,419
|
2,072,640
|
|||||
Income
taxes payable
|
67,910
|
67,150
|
|||||
Current
maturities of long-term debt and capital lease obligations
|
463,892
|
135,000
|
|||||
Total
current liabilities
|
6,911,396
|
3,772,354
|
|||||
DEFERRED
INCOME TAXES
|
533,599
|
148,648
|
|||||
LONG-TERM
DEBT, net of current maturities
|
3,763,125
|
3,915,000
|
|||||
CAPITAL
LEASE OBLIGATION, net of current maturities
|
396,526
|
-
|
|||||
COMMITMENTS
AND CONTINGENCIES
|
-
|
-
|
|||||
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;
|
|||||||
10,994,951
and 10,982,951 shares issued at 2008 and 2007,
respectively;
|
|||||||
10,989,092
and 10,977,092 shares outstanding at 2008 and 2007,
respectively
|
26,388
|
26,359
|
|||||
Paid-in
capital
|
5,456,823
|
5,419,477
|
|||||
Retained
earnings
|
25,698,434
|
24,037,672
|
|||||
Treasury
stock (5,859 shares at cost)
|
(25,487)
|
(25,487)
|
|||||
Accumulated
other comprehensive income
|
217,694
|
357,483
|
|||||
Total
stockholders' equity
|
31,373,852
|
29,815,504
|
|||||
$42,978,498
|
$37,651,506
|
THREE
MONTHS
|
NINE
MONTHS
|
||||||
2008
|
2007
|
2008
|
2007
|
||||
NET
SALES
|
$12,251,990
|
$12,806,333
|
$39,360,114
|
$40,691,125
|
|||
COST
OF SALES
|
5,108,833
|
5,864,699
|
16,464,284
|
17,465,869
|
|||
Gross
profit
|
7,143,157
|
6,941,634
|
22,895,830
|
23,225,256
|
|||
OPERATING
EXPENSES
|
6,377,674
|
6,836,357
|
20,317,446
|
20,460,848
|
|||
INCOME
FROM OPERATIONS
|
765,483
|
105,277
|
2,578,384
|
2,764,408
|
|||
OTHER
INCOME (EXPENSE):
|
|||||||
Interest
expense
|
(80,072)
|
(50,494)
|
(249,725)
|
(50,494)
|
|||
Other,
net
|
25,672
|
272,658
|
332,355
|
349,172
|
|||
Total
other income (expense)
|
(54,400)
|
222,164
|
82,630
|
298,678
|
|||
INCOME
BEFORE INCOME TAXES
|
711,083
|
327,441
|
2,661,014
|
3,063,086
|
|||
PROVISION
FOR INCOME TAXES
|
290,069
|
155,835
|
1,000,252
|
1,148,438
|
|||
NET
INCOME
|
$421,014
|
$171,606
|
$1,660,762
|
$1,914,648
|
|||
NET
INCOME PER COMMON SHARE-BASIC
|
$ 0.04
|
$ 0.02
|
$ 0.15
|
$ 0.17
|
|||
NET
INCOME PER COMMON SHARE-DILUTED
|
$ 0.04
|
$ 0.02
|
$ 0.15
|
$ 0.17
|
|||
Weighted
Average Number of Shares Outstanding:
|
|||||||
Basic
|
10,988,092
|
10,968,635
|
10,982,209
|
10,943,817
|
|||
Diluted
|
11,073,942
|
11,152,731
|
11,072,717
|
11,157,013
|
2008
|
2007
|
||
CASH
FLOWS FROM OPERATING ACTIVITIES:
|
|||
Net
income
|
$1,660,762
|
$1,914,648
|
|
Adjustments
to reconcile net income to net
|
|||
cash
provided by (used in) operating activities-
|
|||
Depreciation
& amortization
|
758,364
|
470,832
|
|
Loss
on disposal of assets
|
13,385
|
-
|
|
Non-cash
stock-based compensation
|
22,875
|
22,876
|
|
Deferred
income taxes
|
392,615
|
(18,149)
|
|
Other
|
(131,157)
|
233,465
|
|
Net
changes in assets and liabilities:
|
|||
Accounts
receivable-trade, net
|
579,386
|
360,709
|
|
Inventory
|
434,531
|
(3,202,032)
|
|
Income
taxes
|
760
|
(580,218)
|
|
Other
current assets
|
128,174
|
98,716
|
|
Accounts
payable
|
1,266,611
|
516,201
|
|
Accrued
expenses and other liabilities
|
1,542,779
|
(992,879)
|
|
Total
adjustments
|
5,008,323
|
(3,090,478)
|
|
Net
cash provided by (used in) operating activities
|
6,669,085
|
(1,175,830)
|
|
CASH
FLOWS FROM INVESTING ACTIVITIES:
|
|||
Purchase
of property and equipment
|
(3,272,993)
|
(5,084,908)
|
|
Payments
in connection with businesses acquired
|
-
|
(650,000)
|
|
Proceeds
from sale of assets
|
39,556
|
25,339
|
|
Decrease
(increase) in other assets
|
751,200
|
(120,267)
|
|
Purchase
of certificates of deposit
|
(1,858,000)
|
-
|
|
Proceeds
from sale of marketable securities
|
100,000
|
-
|
|
Net
cash used in investing activities
|
(4,240,237)
|
(5,829,836)
|
|
CASH
FLOWS FROM FINANCING ACTIVITIES:
|
|||
Proceeds
from notes payable and long-term debt
|
-
|
4,050,000
|
|
Payments
on long-term debt and notes payable
|
(84,375)
|
-
|
|
Payments
on capital lease obligations
|
(145,795)
|
(100,550)
|
|
Proceeds
from issuance of common stock
|
14,500
|
73,860
|
|
Net
cash provided by (used in) financing activities
|
(215,670)
|
4,023,310
|
|
NET
CHANGE IN CASH
|
2,213,178
|
(2,982,355)
|
|
CASH,
beginning of period
|
6,310,396
|
6,739,891
|
|
CASH,
end of period
|
$8,523,574
|
$3,757,534
|
|
SUPPLEMENTAL
DISCLOSURES OF CASH FLOW INFORMATION:
|
|||
Interest
paid during the period
|
$249,725
|
$50,494
|
|
Income
taxes paid during the period, net of (refunds)
|
634,749
|
1,758,519
|
|
NON-CASH
INVESTING ACTIVITIES:
|
|||
Equipment
acquired under capital lease financing arrangements
|
803,713
|
-
|
Number
of Shares
|
Par
Value
|
Paid-in
Capital
|
Treasury
Stock
|
Retained
Earnings
|
Accumulated
Other Comprehensive Income (Loss)
|
Total
|
Comprehensive
Income
(Loss)
|
||||||||
BALANCE,
December 31, 2006
|
10,879,209
|
$26,124
|
$5,292,591
|
$(25,487)
|
$20,949,540
|
$80,475
|
$26,323,243
|
||||||||
|
|||||||||||||||
Shares
issued - stock options and warrants
exercised
|
89,883
|
216
|
73,644
|
-
|
-
|
-
|
73,860
|
||||||||
Stock-based
compensation
|
-
|
-
|
22,876
|
-
|
-
|
-
|
22,876
|
||||||||
Net income
|
-
|
-
|
-
|
-
|
1,914,648
|
-
|
1,914,648
|
$1,914,648
|
|||||||
Translation
adjustment
|
-
|
-
|
-
|
-
|
-
|
251,624
|
251,624
|
251,624
|
|||||||
BALANCE,
September 30, 2007
|
10,969,092
|
$26,340
|
$5,389,111
|
$(25,487)
|
$22,864,188
|
$332,099
|
$28,586,251
|
Comprehensive
income for the nine months ended September 30, 2007
|
$2,166,272
|
BALANCE,
December 31, 2007
|
10,977,092
|
$26,359
|
$5,419,477
|
$(25,487)
|
$24,037,672
|
$357,483
|
$29,815,504
|
||||||||
|
|||||||||||||||
Shares
issued - stock options exercised
|
12,000
|
29
|
14,471
|
-
|
-
|
-
|
14,500
|
||||||||
Stock-based
compensation
|
-
|
-
|
22,875
|
-
|
-
|
-
|
22,875
|
||||||||
Net income
|
-
|
-
|
-
|
-
|
1,660,762
|
-
|
1,660,762
|
$1,660,762
|
|||||||
Translation
adjustment
|
-
|
-
|
-
|
-
|
-
|
(139,789)
|
(139,789)
|
(139,789)
|
|||||||
BALANCE,
September 30, 2008
|
10,989,092
|
$26,388
|
$5,456,823
|
$(25,487)
|
$25,698,434
|
$217,694
|
$31,373,852
|
Comprehensive
income for the nine months ended September 30, 2008
|
$1,520,973
|
As
of
|
|||
September
30, 2008
|
December
31, 2007
|
||
Inventory
on hand:
|
|||
Finished
goods held for sale
|
$15,330,890
|
$16,482,845
|
|
Raw
materials and work in process
|
438,828
|
633,188
|
|
Inventory
in transit
|
1,269,103
|
357,319
|
|
$17,038,821
|
$17,473,352
|
Leather
Factory
|
Tandy
Leather
|
Total
|
|
Balance,
December 31, 2006
|
$362,733
|
$383,406
|
$746,139
|
Acquisitions
and adjustments
|
225,000
|
-
|
225,000
|
Foreign
exchange gain/loss
|
18,157
|
-
|
18,157
|
Impairments
|
-
|
-
|
-
|
Balance, September
30, 2007
|
$605,890
|
$383,406
|
$989,296
|
Leather
Factory
|
Tandy
Leather
|
Total
|
|
Balance,
December 31, 2007
|
$607,130
|
$383,406
|
$990,536
|
Acquisitions
and adjustments
|
-
|
-
|
-
|
Foreign
exchange gain/loss
|
(8,632)
|
-
|
(8,632)
|
Impairments
|
-
|
-
|
-
|
Balance,
September 30, 2008
|
$598,498
|
$383,406
|
$981,904
|
As
of September 30, 2008
|
As
of December 31, 2007
|
||||||
Gross
|
Accumulated
Amortization
|
Net
|
Gross
|
Accumulated
Amortization
|
Net
|
||
Trademarks,
Copyrights
|
$544,369
|
$310,703
|
$233,666
|
$544,369
|
$283,485
|
$260,884
|
|
Non-Compete
Agreements
|
153,000
|
41,000
|
112,000
|
153,000
|
29,750
|
123,250
|
|
$697,369
|
$351,703
|
$345,666
|
$697,369
|
$313,235
|
$384,134
|
Wholesale Leathercraft
|
Retail Leathercraft
|
Total
|
|
2008
|
$20,954
|
$30,337
|
$51,291
|
2009
|
20,954
|
30,337
|
51,291
|
2010
|
20,954
|
30,337
|
51,291
|
2011
|
20,027
|
30,337
|
50,364
|
2012
|
1,250
|
30,337
|
31,587
|
Weighted
Average
Exercise
Price
|
#
of
shares
|
Weighted
Average Remaining Contractual Term
(in
yrs)
|
Aggregate
Intrinsic
Value
|
|
Outstanding,
January 1, 2007
|
$2.050
|
296,200
|
||
Granted
|
-
|
-
|
||
Cancelled
|
-
|
-
|
||
Exercised
|
1.466
|
51,500
|
||
Outstanding,
September 30, 2007
|
$2.180
|
244,700
|
4.35
|
$289,420
|
Exercisable,
September 30, 2007
|
$2.050
|
228,700
|
4.22
|
$256,380
|
Outstanding,
January 1, 2008
|
$2.11
|
236,700
|
||
Granted
|
-
|
-
|
||
Cancelled
|
-
|
-
|
||
Exercised
|
1.21
|
12,000
|
||
Outstanding,
September 30, 2008
|
$2.16
|
224,700
|
3.46
|
$262,001
|
Exercisable,
September 30, 2008
|
$2.15
|
222,700
|
3.44
|
$259,461
|
September 30,
2008
|
September 30,
2007
|
|
Weighted
average grant-date fair value of stock options granted
|
N/A
|
N/A
|
Total
fair value of stock options vested
|
$30,500
|
$30,500
|
Total
intrinsic value of stock options exercised
|
$8,779
|
$43,640
|
|
Three
Months Ended
|
Nine
Months Ended
|
||||||||
September
30,
|
September
30,
|
|||||||||
2008
|
2007
|
2008
|
2007
|
|||||||
Numerator:
|
||||||||||
Net income
|
$421,014
|
$171,606
|
$1,660,762
|
$1,914,648
|
||||||
Numerator
for basic and diluted earnings per share
|
421,014
|
171,606
|
1,660,762
|
1,914,648
|
||||||
Denominator:
|
||||||||||
Weighted-average
shares outstanding-basic
|
10,988,092
|
10,968,635
|
10,982,209
|
10,943,817
|
||||||
Effect
of dilutive securities:
|
||||||||||
Stock
options
|
85,850
|
170,874
|
90,508
|
187,064
|
||||||
Warrants
|
-
|
13,222
|
-
|
26,132
|
||||||
Dilutive
potential common shares
|
85,850
|
184,096
|
90,508
|
213,196
|
||||||
Denominator
for diluted earnings per share-weighted-average
shares
|
11,073,942
|
11,152,731
|
11,072,717
|
11,157,013
|
||||||
Basic
earnings per share
|
$0.04
|
$0.02
|
$0.15
|
$0.18
|
||||||
Diluted
earnings per share
|
$0.04
|
$0.02
|
$0.15
|
$0.17
|
a.
|
Wholesale
Leathercraft, which consists of a chain of warehouse distribution
units 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 the North
America;
|
c.
|
International
Leathercraft, sells to both wholesale and retail
customers. It carries the same products as North American
stores. We started this operation in February 2008 and have one
store located in Northampton, United Kingdom;
and
|
d.
|
Other,
which consists of Roberts, Cushman and Co., a producer of decorative hat
trims sold directly to hat
manufacturers.
|
Wholesale
Leathercraft
|
Retail
Leathercraft
|
International
Leathercraft
|
Other
|
Total
|
|
For
the quarter ended September 30, 2008
|
|||||
Net
sales
|
$5,997,550
|
$5,726,164
|
$324,081
|
$204,195
|
$12,251,990
|
Gross
profit
|
3,377,119
|
3,453,759
|
224,563
|
87,716
|
7,143,157
|
Operating
earnings
|
435,790
|
234,743
|
55,008
|
39,942
|
765,483
|
Interest
expense
|
(80,072)
|
-
|
-
|
-
|
(80,072)
|
Other
income (expense), net
|
86,999
|
2,887
|
(64,214)
|
-
|
25,672
|
Income
before income taxes
|
442,717
|
237,630
|
(9,206)
|
39,942
|
711,083
|
Depreciation
and amortization
|
228,936
|
30,644
|
3,684
|
209
|
263,473
|
Fixed
asset additions
|
148,597
|
27,404
|
19,018
|
-
|
195,019
|
Total
assets
|
$36,495,134
|
$5,603,759
|
$695,395
|
$184,210
|
$42,978,498
|
For
the quarter ended September 30, 2007
|
|||||
Net
sales
|
$6,940,484
|
$5,657,198
|
-
|
$208,651
|
$12,806,333
|
Gross
profit
|
3,608,272
|
3,254,075
|
-
|
79,287
|
6,941,634
|
Operating
earnings
|
32,686
|
58,780
|
-
|
13,811
|
105,277
|
Interest
expense
|
(50,494)
|
-
|
-
|
-
|
(50,494)
|
Other
income (expense), net
|
264,792
|
7,866
|
-
|
-
|
272,658
|
Income
before income taxes
|
246,984
|
66,646
|
-
|
13,811
|
327,441
|
Depreciation
and amortization
|
181,113
|
35,050
|
-
|
2,477
|
218,640
|
Fixed
asset additions
|
4,657,769
|
74,257
|
-
|
-
|
4,732,026
|
Total
assets
|
$31,929,070
|
$5,548,815
|
-
|
$167,555
|
$37,645,440
|
Wholesale
Leathercraft
|
Retail
Leathercraft
|
International
Leathercraft
|
Other
|
Total
|
|
For
the nine months ended September 30, 2008
|
|||||
Net
sales
|
$19,953,958
|
$18,232,364
|
$559,641
|
$614,151
|
$39,360,114
|
Gross
profit
|
10,997,820
|
11,260,249
|
366,572
|
271,190
|
22,895,830
|
Operating
earnings
|
1,084,364
|
1,421,064
|
6,091
|
66,866
|
2,578,384
|
Interest
expense
|
(249,725)
|
-
|
-
|
-
|
(249,725)
|
Other
income (expense), net
|
401,027
|
2,486
|
(71,158)
|
-
|
332,355
|
Income
before income taxes
|
1,235,666
|
1,423,550
|
(65,067)
|
66,866
|
2,661,014
|
Depreciation
and amortization
|
660,311
|
94,401
|
10,081
|
1,266
|
766,058
|
Fixed
asset additions
|
3,155,361
|
91,161
|
25,409
|
1,062
|
3,272,993
|
Total
assets
|
$36,495,134
|
$5,603,759
|
$695,395
|
$184,210
|
$42,978,498
|
For
the nine months ended September 30, 2007
|
|||||
Net
sales
|
$22,057,123
|
$17,753,614
|
-
|
$880,388
|
$40,691,125
|
Gross
profit
|
12,378,185
|
10,482,976
|
-
|
364,095
|
23,225,256
|
Operating
earnings
|
1,790,257
|
878,492
|
-
|
95,659
|
2,764,408
|
Interest
expense
|
(50,494)
|
-
|
-
|
-
|
(50,494)
|
Other
income (expense), net
|
336,641
|
12,531
|
-
|
-
|
349,172
|
Income
before income taxes
|
2,076,404
|
891,023
|
-
|
95,659
|
3,063,086
|
Depreciation
and amortization
|
341,974
|
127,862
|
-
|
996
|
470,832
|
Fixed
asset additions
|
4,892,019
|
192,687
|
-
|
200
|
5,084,906
|
Total
assets
|
$31,929,070
|
$5,548,815
|
-
|
$167,555
|
$37,645,440
|
Three
months ended September 30,
|
2008
|
2007
|
United
States
|
$10,511,250
|
$11,423,156
|
Canada
|
1,078,747
|
1,072,842
|
All
other countries
|
661,993
|
310,335
|
$12,251,990
|
$12,806,333
|
|
Nine
months ended September 30,
|
2008
|
2007
|
United
States
|
$34,124,413
|
$36,194,509
|
Canada
|
3,550,955
|
3,274,464
|
All
other countries
|
1,684,746
|
1,222,152
|
$39,360,114
|
$40,691,125
|
2008
|
2007
|
||
Credit
Agreement with JPMorgan Chase Bank – collateralized by real estate;
payable as follows:
|
|||
Line
of Credit Note dated July 31, 2007 in the principal amount of $4,050,000;
rolled into a 10-year term note on April 30, 2008 - $16,875 monthly
principal payments plus interest at 7.1% per annum; matures April 30,
2018
|
$ 3,965,625
|
$ 4,050,000
|
|
Capital
lease secured by HVAC equipment – total monthly principal and interest
payments of $24,328 at approximately 5.7% interest per annum,
matures
February 2011
|
657,918
|
-
|
|
4,623,543
|
4,050,000
|
||
Less
- Current maturities
|
463,892
|
84,375
|
|
$4,159,651
|
$3,965,625
|
Ø
|
We
believe that the rise in oil and natural gas prices will increase the
costs of the goods that we sell, including the costs of shipping those
goods from the manufacturer to our stores and customers. We
further believe that a reduction in oil and gas prices does not guarantee
a reduction in the costs of the goods that we sell as our suppliers may
not pass those cost reductions on to
us.
|
Ø
|
Continued
weakness in the economy in the United States, as well as abroad, may cause
our sales to decrease or not to increase or adversely affect the prices
charged for our products. Furthermore, negative trends in
general consumer-spending levels, including the impact of the availability
and level of consumer debt and levels of consumer confidence could
adversely affect our sales.
|
Quarter
Ended September 30, 2008
|
Quarter
Ended September 30, 2007
|
||||||
Sales
|
Operating
Income
|
Sales
|
Operating
Income
|
||||
Wholesale
Leathercraft
|
$5,997,550
|
$435,791
|
$6,940,484
|
$32,686
|
|||
Retail
Leathercraft
|
5,726,164
|
234,743
|
5,657,198
|
58,780
|
|||
International
Leathercraft
|
324,081
|
55,008
|
-
|
-
|
|||
Other
|
204,195
|
39,941
|
208,651
|
13,811
|
|||
Total
Operations
|
$12,251,990
|
$765,483
|
$12,806,333
|
$105,277
|
2008
|
2007
|
% Change
|
||
Net
income
|
$421,014
|
$171,606
|
145.3%
|
Quarter
ended
|
|||
Customer Group
|
09/30/08
|
09/30/07
|
|
RETAIL
(end users, consumers,
individuals)
|
19%
|
21%
|
|
INSTITUTION
(prisons, prisoners,
hospitals, schools, youth organizations, etc.)
|
6%
|
8%
|
|
WHOLESALE
(resellers &
distributors, saddle & tack shops, authorized dealers,
etc.)
|
39%
|
43%
|
|
MANUFACTURERS
|
10%
|
13%
|
|
NATIONAL
ACCOUNTS
|
26%
|
15%
|
|
100%
|
100%
|
Quarter
Ended 09/30/08
|
Quarter
Ended 09/30/07
|
$ change
|
% change
|
|||
Same
store sales (30)
|
$5,289,155
|
$6,157,021
|
$(867,866)
|
(14.1)%
|
||
National
account group
|
708,395
|
783,463
|
(75,068)
|
(9.6)%
|
||
$5,997,550
|
$6,940,484
|
$(942,934)
|
(13.6)%
|
#
Stores
|
Qtr
Ended 09/30/08
|
Qtr
Ended 09/30/07
|
$
Incr (Decr)
|
%
Incr (Decr)
|
|
Same
(existing) store sales
|
70
|
$5,588,514
|
$5,654,320
|
$(65,806)
|
(1.2)%
|
New
store sales
|
3
|
137,650
|
2,878
|
134,772
|
N/A
|
Total
sales
|
73
|
$5,726,164
|
$5,657,198
|
$68,966
|
1.2%
|
Quarter
Ended
|
|||
Customer Group
|
09/30/08
|
09/30/07
|
|
RETAIL
(end users, consumers,
individuals)
|
61%
|
62%
|
|
INSTITUTION
(prisons, prisoners,
hospitals, schools, youth organizations, etc.)
|
9%
|
7%
|
|
WHOLESALE
(resellers &
distributors, saddle & tack shops, authorized dealers,
etc.)
|
29%
|
28%
|
|
NATIONAL
ACCOUNTS
|
-
|
-
|
|
MANUFACTURERS
|
1%
|
3%
|
|
100%
|
100%
|
Nine
Months Ended September 30, 2008
|
Nine
Months Ended September 30, 2007
|
||||||
Sales
|
Operating
Income
|
Sales
|
Operating
Income
|
||||
Wholesale
Leathercraft
|
$19,953,958
|
$1,084,364
|
$22,057,123
|
$1,790,257
|
|||
Retail
Leathercraft
|
18,232,364
|
1,421,064
|
17,753,614
|
878,492
|
|||
International
Leathercraft
|
559,641
|
6,091
|
-
|
-
|
|||
Other
|
614,151
|
66,865
|
880,388
|
95,659
|
|||
Total
Operations
|
$39,360,114
|
$2,578,384
|
$40,691,125
|
$2,764,408
|
2008
|
2007
|
% change
|
||
Net
income
|
$1,660,762
|
$1,914,648
|
(13.3)%
|
Nine
Months Ended 09/30/08
|
Nine
Months Ended 09/30/07
|
$ Change
|
% Change
|
|||
Same
store sales (29)
|
$16,911,426
|
$18,729,902
|
$(1,818,476)
|
(9.7)%
|
||
New
store (1)
|
438,757
|
553,451
|
(114,694)
|
(20.7)%
|
||
National
account group
|
2,603,775
|
2,773,770
|
(169,995)
|
(6.1)%
|
||
$19,953,958
|
$22,057,123
|
$(2,103,165)
|
(9.5)%
|
Nine
Months Ended
|
|||
Customer Group
|
09/30/08
|
09/30/07
|
|
RETAIL
(end users, consumers,
individuals)
|
25%
|
22%
|
|
INSTITUTION
(prisons, prisoners,
hospitals, schools, youth organizations, etc.)
|
8%
|
8%
|
|
WHOLESALE
(resellers &
distributors, saddle & tack shops, authorized dealers,
etc.)
|
41%
|
43%
|
|
MANUFACTURERS
|
8%
|
15%
|
|
NATIONAL
ACCOUNTS
|
18%
|
12%
|
|
100%
|
100%
|
#
Stores
|
Nine
Months Ended 09/30/08
|
Nine
Months Ended 09/30/07
|
$
Incr (Decr)
|
%
Incr (Decr)
|
|
Same
(existing) store sales
|
64
|
$17,060,659
|
$17,344,767
|
$(284,108)
|
(1.6)%
|
New
store sales
|
9
|
1,171,705
|
408,847
|
762,858
|
N/A
|
Total
sales
|
73
|
$18,232,364
|
$17,753,614
|
$478,750
|
2.7%
|
Nine
Months Ended
|
|||
Customer Group
|
09/30/08
|
09/30/07
|
|
RETAIL
(end users, consumers,
individuals)
|
63%
|
63%
|
|
INSTITUTION
(prisons, prisoners,
hospitals, schools, youth organizations, etc.)
|
8%
|
8%
|
|
WHOLESALE
(resellers &
distributors, saddle & tack shops, authorized dealers,
etc.)
|
28%
|
26%
|
|
NATIONAL
ACCOUNTS
|
-
|
-
|
|
MANUFACTURERS
|
1%
|
3%
|
|
100%
|
100%
|
ISSUER
PURCHASES OF EQUITY SECURITIES
|
||||
Period
|
(a)
Total Number of Shares Purchased
|
(b)
Average Price Paid per Share
|
(c)
Total Number of Shares Purchased as Part of Publicly Announced Plans or
Programs
|
(d)
Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be
Purchased Under the Plans or Programs
|
July
1 through July 31
|
-
|
-
|
-
|
-
|
August
1 through August 31
|
-
|
-
|
-
|
-
|
September
1 through September 30
|
-
|
-
|
-
|
486,790
(1)
|
Total
|
-
|
-
|
-
|
486,790 (1)
|
(1)
|
On
September 9, 2008, our Board of Directors approved a limited stock
repurchase plan whereby all non-officer participants in The Leather
Factory, Inc. Stock Ownership Plan (the “ESOP”) would have the option of
selling the shares of our common stock distributed to them upon
termination of the ESOP back to us. The option will remain open to the
non-officer participants for a period of sixty days beginning on September
26, 2008 and ending on November 25, 2008. The purchase price of the shares
will be calculated at a price-per-share equal to the closing price of a
share of our common stock on the American Stock Exchange on the business
day each non-officer participant notifies the ESOP administrator of his or
her intent to sell his or her shares to us. As of September 30, 2008, we
had not repurchased any of our shares in connection with this repurchase
offer.
|
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 Form 10-Q filed by Tandy Leather Factory, Inc.
with the Securities and Exchange Commission on August 12, 2005 and
incorporated by reference herein.
|
|
3.2
|
Bylaws
of The Leather Factory, Inc., filed as Exhibit 3.2 to the Registration
Statement on Form SB-2 of The Leather Factory, Inc. (Commission File No.
33-81132), filed with the Securities and Exchange Commission on July 5,
1994 and incorporated by reference herein.
|
|
4.1
|
Financial
Advisor’s Warrant Agreement, dated February 24, 2004, between The Leather
Factory, Inc. and Westminster Securities Corporation filed as Exhibit 4.1
to Form 10-Q filed by The Leather Factory, Inc. with the Securities and
Exchange Commission on May 14, 2004 and incorporated by reference
herein.
|
|
*31.1
|
13a-14(a)
Certification by Ronald C. Morgan, Chief Executive Officer and
President.
|
|
*31.2
|
13a-14(a)
Certification by Shannon Greene, Chief Financial Officer and
Treasurer.
|
|
*32.1
|
Certification
Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002.
|
|
____________
|
||
*Filed
herewith.
|
TANDY
LEATHER FACTORY, INC.
|
|
(Registrant)
|
|
Date: November
14, 2008
|
By: /s/ Ronald C. Morgan
|
Ronald
C. Morgan
|
|
Chief
Executive Officer
|
|
Date: November
14, 2008
|
By: /s/ Shannon L. Greene
|
Shannon
L. Greene
|
|
Chief
Financial Officer and Treasurer (Chief Accounting
Officer)
|