FORT WORTH, Texas, Nov. 8, 2010 (GLOBE NEWSWIRE) -- Tandy Leather Factory, Inc. (Nasdaq:TLF) today reported financial results for the third quarter of 2010. Consolidated net income for the quarter ended September 30, 2010 was $594,000 compared to consolidated net income of $553,000 for the third quarter of 2009, an increase of 7%. Fully diluted earnings per share for the quarter were $0.06, compared to $0.05 in the third quarter of last year. Total sales for the quarter ended September 30, 2010 were $13.6 million, up 8% from $12.7 million in the third quarter last year.
Consolidated sales for the nine months ended September 30, 2010 were $42.6 million, up 9% from the 2009 first nine month sales of $38.9 million. Consolidated net income for the first three quarters of 2010 was up 29% at $2.6 million or $0.25 per fully-diluted share versus $2.0 million or $0.19 per fully-diluted share in the comparable period last year.
Sales in the Retail Leathercraft segment, which consists of the Tandy Leather stores, increased $768,000 in the third quarter, a 12% improvement over last year's third quarter. Seventy-six stores comprised Tandy Leather's retail operations on September 30, 2010, compared to seventy-five retail stores a year ago. For the first nine months of 2010, Retail Leathercraft's sales increased $2.9 million, or 15%, over the first nine 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 nine months of 2010, Wholesale Leathercraft's sales were up $573,000, or 3%, from the same period in 2009. International Leathercraft reported a sales increase of 21%, or $73,000, compared to the third quarter of 2009. For the year, International Leathercraft's sales were up 27%, or $252,000, over the same period last year.
Consolidated gross profit margin for the current quarter was 60.0%, a slight improvement from 59.7% for the third quarter of 2009. For the first three quarters, consolidated gross profit margin for the current year was 60.8%, increasing from last year's gross profit margin of 59.1%. Consolidated operating expenses rose approximately 5% for the quarter and 9% for the year, increasing $371,000 in the current quarter and $1.8 million for the first nine months over the same periods a year ago. For the third quarter, the significant increases in expenses occurred in freight out and credit card fees, both of which are related to the sales increase. Legal fees are also up due to an increase in trademark registrations in foreign countries. Employee compensation and benefits are up as well due to the addition of several regional managers to our store management team. For the year, expense increases mirrored that of the third quarter. Consolidated operating margin improved for the quarter to 7.9% compared to 6.5% last year. On a year-to-date basis, consolidated operating margin improved from 7.6% last year to 9.5% in the current year.
Jon Thompson, Chief Executive Officer and President, commented, "The third quarter is historically our weakest quarter and this year was no exception. However, our sales and earnings this quarter were higher than our sales and earnings in last year's third quarter so we accomplished our goal. We are preparing for a solid fourth quarter, even though we will incur some one-time expenses associated with the closing of the Mid-Continent Leather Sales store. We are introducing numerous new products and believe they will contribute nicely to our sales."
Chief Financial Officer and Treasurer, Shannon Greene, added, "In addition to the $7.6 million dividend paid in July, we have invested in extra inventory during the quarter that has pulled our cash down significantly this quarter. We had the opportunity to make several special leather purchases during the quarter which will carry us through the first quarter of next year. While we would have preferred to make those purchases later in the fourth quarter, we do not always get to dictate the timing. Those purchases should take some pressure off gross margins as we begin 2011 and our inventory level will return to more normal levels over the next six months."
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 29 Leather Factory stores, located in 19 states and 3 Canadian provinces, 76 Tandy Leather retail stores, located in 36 states and 6 Canadian provinces, and one combination wholesale/retail store located in the United Kingdom. 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.
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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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CONTACT: Tandy Leather Factory, Inc. Shannon L. Greene (817) 872-3200 sgreene@tandyleather.com Magellan Fin, LLC Mark Gilbert (317) 867-2839 MGilbert@MagellanFin.com