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Tandy Leather Factory Reports 41 Cents EPS for 2010, Up 32% Over 2009

FORT WORTH, Texas, March 7, 2011 (GLOBE NEWSWIRE) -- Tandy Leather Factory, Inc. (Nasdaq:TLF) today reported financial results for the fourth quarter and year ended December 31, 2010. A conference call will be conducted by Jon Thompson, CEO, Shannon Greene, CFO, and Mark Angus, Senior Vice President, at 2:00 p.m. Eastern Time today. Dial-in details have been provided previously.
/ Source: GlobeNewswire

FORT WORTH, Texas, March 7, 2011 (GLOBE NEWSWIRE) -- Tandy Leather Factory, Inc. (Nasdaq:TLF) today reported financial results for the fourth quarter and year ended December 31, 2010. A conference call will be conducted by Jon Thompson, CEO, Shannon Greene, CFO, and Mark Angus, Senior Vice President, at 2:00 p.m. Eastern Time today. Dial-in details have been provided previously.

Consolidated net income for the quarter was $1.6 million compared to consolidated net income of $1.3 million for the fourth quarter of 2009. Fully diluted earnings per share for the quarter were $0.15, compared to $0.13 for the same quarter of the previous year. Total sales for the quarter ended December 31, 2010 increased 11% to $17.3 million from $15.6 million for the fourth quarter of 2009. Consolidated sales for the year ended December 31, 2010 were $59.9 million, up 10% from 2009 sales of $54.5 million. Consolidated net income for 2010 was $4.2 million or $0.41 per fully-diluted share versus $3.3 million or $0.31 per fully-diluted share for 2009.       

Sales in the Retail Leathercraft division for the fourth quarter of 2010 increased $1.4 million over the previous year's fourth quarter, representing a 16% improvement. Same stores sales increased 15% over the fourth quarter of 2009. Seventy-six Tandy Leather retail stores comprised Retail Leathercraft's operations on December 31, 2010, compared to seventy-five retail stores a year earlier. For the year, Retail Leathercraft's sales increased $4.2 million, or 15%, over 2009. Same store sales for the year increased 13% compared to 2009.   

Fourth quarter sales for the Wholesale Leathercraft division increased $240,000 over the same quarter of 2009, a 3% improvement. Same store sales increased 7% while national account sales were down 13% for the quarter. Twenty-nine Leather Factory wholesale stores comprised Wholesale Leathercraft's operations on December 31, 2010, compared to 30 wholesale stores a year earlier. One wholesale store operating as Mid-Continent Leather Sales was closed in the fourth quarter. For the year, Wholesale Leathercraft's sales were up $813,000 million, or 3%. 2010 same store sales increased 6% while sales to national accounts were down 8%.

International Leathercraft's fourth quarter sales increased $134,000 over the same quarter of 2009, a 37% improvement. For the year, International Leathercraft's sales increased 30% to $1.7 million from $1.3 million in 2009. The International Leathercraft division consists of one store located in the UK which opened in February 2008.

Consolidated gross profit margin for the fourth quarter was 59.9%, a decline from 61.8% for the fourth quarter of 2009. For 2010, consolidated gross profit margin was 60.5%, improving from the previous year's gross profit margin of 59.9%. Consolidated operating expenses for the fourth quarter of 2010 were 45.0% of sales, increasing $240,000 or 3.2% over the same quarter of 2009. Operating expenses totaled 49.5% of sales for 2010, increasing $2.1 million, or 7.6% over 2009. 

Jon Thompson, Chief Executive Officer, commented, "Our definition of a successful year is when our sales, gross profit margin, and operating margin are higher than the year before. 2010 was one of those years and we plan to build on that momentum as we begin the new year. In 2011, we plan to announce several international store openings, as well as improve the locations and performance of our existing store base in the US. We recognize the opportunities for additional stores domestically but are committed to strengthening the stores in our existing markets while the domestic economy remains somewhat shaky."

Shannon Greene, Chief Financial Officer and Treasurer, added, "Like last year, our goal for 2010 was to increase sales and earnings over the prior year and we met that goal. We paid a one-time dividend during the year, which we believe was the best use of our cash. Expense control will continue to be a priority, in order to maximize earnings."

Financial Outlook:

The following statements are based on TLF's current expectations as of March 3, 2011. These statements are forward-looking statements and should be read in conjunction with the cautionary information about these statements that appears below.

The Company expects to open 3-4 stores in 2011: 2-3 internationally and 1 domestically. Estimated consolidated net sales for 2011 will be in the range of $63 to $65 million. EPS for 2011 are expected to be in the range of $0.44 to $0.46. Average shares outstanding, both basic and diluted, in 2011 are estimated to be approximately 10.2 million. The Company assumes an effective tax rate for the year between 35% 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 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.

The Tandy Leather Factory, Inc. logo is available at

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:

                                   

CONTACT: Shannon L. Greene, Tandy Leather Factory, Inc. (817) 872-3200 or sgreene@tandyleather.com Mark Gilbert, Magellan Fin, LLC (317) 867-2839 or MGilbert@MagellanFin.com