FORT WORTH, TEXAS – Tandy Leather Factory, Inc. (NASDAQ: TLF) today reported financial results for the fourth quarter and year ended December 31, 2015. A conference call will be conducted by senior management at 10:00 a.m. Eastern Time on March 11, 2016. Dial-in details have been provided previously.
Consolidated net income for the quarter was $2.3 million, decreasing 5% from consolidated net income for the fourth quarter of 2014. Fully diluted earnings per share for the quarter were $0.24, the same as that for the same quarter of the previous year. Total sales for the quarter ended December 31 2015 decreased 1% to $24.2 million from $24.5 million for the fourth quarter of 2014. Consolidated sales for the year ended December 31, 2015 were $84.2 million, up 1% from 2014 sales of $83.4 million. Consolidated net income for 2015 was $6.4 million or $0.63 per fully-diluted share versus $7.7 million or $0.75 per fully-diluted share for 2014.
Sales in the Retail Leathercraft division for the fourth quarter of 2015 increased $165,000 over the previous year's fourth quarter, a 1% improvement. Same store sales in the fourth quarter of 2015 matched that of the same period in the prior year. Eighty-two Tandy Leather retail stores comprised Retail Leathercraft’s operations on December 31, 2015 and 2014. For the year, Retail Leathercraft’s sales increased $1.9 million, or 4%, over 2014. Same store sales for the year increased 1% compared to 2014.
Fourth quarter sales for the Wholesale Leathercraft division decreased $190,000 over the same quarter of 2014, a 2% decline. Same store sales decreased 2%. There were twenty-eight stores in the segment at December 31, 2015, compared to twenty-nine stores at December 31, 2014. For the year, Wholesale Leathercraft’s sales were down $532,000, or 2%. 2015 same store sales increased 1%.
International Leathercraft’s fourth quarter sales decreased $204,000 over the same quarter of 2014, a 17% decline. Same stores sales in the fourth quarter of 2015 decreased 28%. The one new store, opened in October 2015, added fourth quarter sales of $127,000. There were four stores in the segment at December 31, 2015, compared to three stores at December 31, 2014. For the year, International Leathercraft’s sales decreased 15% to $3.7 million from $4.3 million in 2014. 2015 same store sales decreased 17%.
Consolidated gross profit margin for the fourth quarter was 61.2%, improving from 59.1% in 2014’s fourth quarter. For 2015, consolidated gross profit margin was 61.9%, declining slightly from the previous year's gross profit margin of 62.5%. Consolidated operating expenses for the fourth quarter of 2015 were 45.2% of sales, increasing $372,000 or 3.5% over the same quarter of 2014. Operating expenses totaled 49.4% of sales for 2015, increasing $1.4 million, or 3.5% over 2014.
Shannon L. Greene, interim Chief Executive Officer, commented, "2015 was a challenging year on many fronts. Despite those challenges, we beat our revenue and earnings guidance, albeit minimally. We have some work to do in 2016 to achieve our standing goal of top line and bottom line growth against the prior year. Growing the top line has its challenges as we can’t force our customers to make purchases. What we can do is offer quality product and exceptional customer service. Operating expenses are more within our control. We are analyzing many of those expenses, focusing on more efficient and deliberate spending without negatively impacting our stores.”
Mark Angus, interim President, added, “Our consolidated gross profit margin in the fourth quarter was much better than our 2014 fourth quarter margin, improving by more than two percentage points. For the year, our gross profit margin decreased approximately one-half percent. We have talked previously about how the customer and product mix dictates margin results. Our focus in 2016 is to tweak our product offerings to our customer groups in such a way to maximize margins.”
Financial Outlook:
The following statements are based on TLF's current expectations as of March 11, 2016. These statements are forward-looking statements and should be read in conjunction with the cautionary information about these statements that appears below.
Estimated consolidated net sales for 2016 will be in the range of $84-85 million. EPS for 2016 are expected to be in the range of $0.69 to $0.71. Average shares outstanding, both basic and diluted, in 2016 are estimated to be approximately 9.7 million. The Company assumes an effective tax rate for the year between 36% and 37%.
Tandy Leather Factory, Inc., (http://www.tandyleatherfactory.com), headquartered in Fort Worth, Texas, is a specialty retailer and wholesale distributor 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 28 Leather Factory stores, located in 18 states and 3 Canadian provinces, 83 Tandy Leather retail stores, located in 36 states and 6 Canadian provinces, and four combination wholesale/retail stores located in the United Kingdom, Australia, 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: | Shannon L. Greene, Tandy Leather Factory, Inc. | (817) 872-3200 or Shannon.greene@tandyleather.com |
| | Mark Gilbert, Magellan Fin, LLC | (317) 867-2839 or mgilbert@mageellanfin.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.
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