Note 7 - Segment Information

6 Months Ended

Jun. 30, 2011

Segment Reporting Disclosure [Text Block]

7.           SEGMENT INFORMATION

We identify our segments based on the activities of three distinct operations:

a. Wholesale Leathercraft, which consists of a chain of wholesale stores 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; and

c. International Leathercraft, which 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, UK.

Our reportable operating segments have been determined as separately identifiable business units, and we measure segment earnings as operating earnings, defined as income before interest and income taxes.

	Wholesale Leathercraft			Retail Leathercraft			Int’l Leathercraft			Discontinued Operations		Total
For the quarter ended June 30, 2011
Net sales	$	6,471,072		$	8,934,306		$	528,543				$	15,933,921
Gross profit		4,106,707			5,383,078			355,469					9,845,254
Operating earnings		608,385			1,038,301			122,629					1,769,315
Interest (expense)		(62,132	)		-			-					(62,132	)
Other income (expense), net		(45,436	)		-			(331	)				(45,767	)
Income before income taxes		500,817			1,038,301			122,298					1,661,416
Depreciation and amortization		211,290			38,436			2,621					252,347
Fixed asset additions		173,914			154,385			-					328,299
Total assets	$	33,191,853		$	6,577,192		$	1,145,764			-	$	40,914,809
For the quarter ended June 30, 2010
Net sales	$	6,248,279		$	7,706,679		$	395,864				$	14,350,822
Gross profit		3,904,444			4,573,109			237,413					8,714,966
Operating earnings		623,266			769,476			51,569					1,444,311
Interest (expense)		(65,615	)		-			-					(65,615	)
Other income (expense), net		76,813			(2,610	)		7,538					81,741
Income before income taxes		634,464			766,866			59,107					1,460,437
Depreciation and amortization		201,828			32,251			3,305					237,384
Fixed asset additions		130,670			8,969			-					139,639
Total assets	$	39,239,711		$	5,878,346		$	675,839			-	$	45,793,896

	Wholesale Leathercraft			Retail Leathercraft			Int’l Leathercraft			Discontinued Operations		Total
For the six months ended June 30, 2011
Net sales	$	13,191,781		$	17,583,458		$	1,037,722				$	31,812,961
Gross profit		8,048,277			10,651,126			670,699					19,370,102
Operating earnings		1,418,439			2,040,602			222,762					3,681,803
Interest (expense)		(124,135	)		-			-					(124,135	)
Other income (expense), net		(111,782	)		-			17,183					(94,599	)
Income before income taxes		1,182,522			2,040,602			239,945					3,463,069
Depreciation and amortization		419,478			72,761			5,112					497,351
Fixed asset additions		281,328			214,657			1,500					497,485
Total assets	$	33,191,853		$	6,577,192		$	1,145,764			-	$	40,914,809
For the six months ended June 30, 2010
Net sales	$	12,836,083		$	15,322,975		$	780,302				$	28,939,360
Gross profit		7,792,346			9,410,403			488,813					17,691,562
Operating earnings		1,157,462			1,692,214			131,003					2,980,679
Interest expense		(131,219	)		-			-					(131,219	)
Other income (expense), net		96,956			(524	)		(13,224	)				83,208
Income before income taxes		1,123,199			1,691,690			117,779					2,932,668
Depreciation and amortization		399,615			65,035			6,760					471,410
Fixed asset additions		201,377			37,379			-					238,756
Total assets	$	39,239,711		$	5,878,346		$	675,839			-	$	45,793,896

Net sales for geographic areas were as follows for the three and six months ended June 30, 2011 and 2010:

Three months ended June 30,	2011		2010
United States	$	13,459,312	$	12,570,039
Canada		1,685,746		1,377,127
All other countries		788,863		403,656
	$	15,933,921	$	14,350,822

Six months ended June 30,	2011		2010
United States	$	26,978,244	$	25,183,889
Canada		3,271,270		2,721,723
All other countries		1,563,447		1,033,748
	$	31,812,961	$	28,939,360

Geographic sales information is based on the location of the customer. No single foreign country, except for Canada, accounted for any material amount of our consolidated net sales for the three or six-month periods ended June 30, 2011 and 2010. We do not have any significant long-lived assets outside of the United States.