TLF - Tandy Leather Factory Reports Q2 2010 Earnings Up 39% Year Over Year
FORT WORTH, Texas, Aug. 3, 2010 (GLOBE NEWSWIRE) -- Tandy Leather Factory, Inc. (Nasdaq:TLF - News) today reported financial results for the second quarter of 2010. Consolidated net income for the quarter ended June 30, 2010 was $1,061,000 compared to consolidated net income of $761,000 for the second quarter of 2009, an increase of 39%. Fully diluted earnings per share for the quarter were $0.10, compared to $0.07 in the second quarter of last year. Total sales for the quarter ended June 30, 2010 were $14.3 million, up 10% from $13.0 million in the second quarter last year.
Consolidated sales for the six months ended June 30, 2010 were $28.9 million, up 10% from the 2009 first half sales of $26.2 million. Consolidated net income for the first half of 2010 was up 38% at $2.0 million or $0.20 per fully-diluted share versus $1.5 million or $0.14 per fully-diluted share in the comparable period last year.
Sales in the Retail Leathercraft segment, which consists of the Tandy Leather stores, increased $1.1 million in the second quarter, a 16% improvement over last year's second quarter. Seventy-six stores comprised Tandy Leather's retail operations on June 30, 2010, compared to seventy-five retail stores a year ago. For the first six months of 2010, Retail Leathercraft's sales increased $2.1 million, or 16%, over the first six months of 2009. Second quarter sales for the Wholesale Leathercraft segment, which consists of the Leather Factory wholesale stores and national account group, were up 2% or $136,000 from the same quarter last year. For the first six months of 2009, Wholesale Leathercraft's sales were up $437,000, or 4%, from the same period in 2009. International Leathercraft, consisting of one combination wholesale and retail store located in the United Kingdom, reported a sales increase of 29%, or $88,000, compared to the second quarter of 2009. For the year, International Leathercraft's sales were up 30%, or $179,000, over the same period last year.
Consolidated gross profit margin for the current quarter was 60.7%, improving from 58.8% for the second quarter of 2009. For the first two quarters, consolidated gross profit margin for the current year was 61.1%, increasing from last year's gross profit margin of 58.8%. Consolidated operating expenses rose approximately 11% for the quarter and the year, increasing $702,000 in the current quarter and $1.4 million for the first six months over the same periods a year ago. For the second quarter, the significant increases in expenses occurred in advertising, freight out, and credit card fees, all of which are related to the sales increase. Store manager bonuses are also up as a result of increased profit at the stores. Legal fees are also up due to an increase in trademark registrations in foreign countries. For the year, expense increases mirrored that of the second quarter. Consolidated operating margin improved for the quarter to 10.1% compared to 8.5% last year. On a year-to-date basis, consolidated operating margin improved from 8.0% last year to 10.3% in the current year.
Jon Thompson, Chief Executive Officer and President, commented, "The second quarter was another solid one, with higher sales and earnings compared to last year's second quarter. Gross profit margins continue to improve and all divisions reported sales gains and strong profits. Our inventory is up some as we are stocking our stores with slightly more product, in order to keep our sales momentum moving forward through the last half of the year."
Chief Financial Officer and Treasurer, Shannon Greene, added, "We have enjoyed great success so far this year with very solid results. We paid our one-time dividend totaling $7.6 million in early July so our cash will decrease in the third quarter. The level of operating expenses through the end of June was not a surprise as the majority of the expense increases are related to the sales gains. Looking to the last half of the year, we are working against strong comps from last year, particularly in the fourth quarter, so it is important that we manage expenses well against those comps in order to maximize profits."
