Note 7 - Segment Information

9 Months Ended

Sep. 30, 2016

Notes to Financial Statements

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 North America; and

c. International Leathercraft , which sells to both wholesale and retail customers. We have four stores operating in this segment: one in Northampton, United Kingdom; one in Manchester, United Kingdom (which opened in October 2015); one in Sydney, Australia; and one in Jerez, Spain. These stores carry the same products as our North American stores.

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			Total
For the quarter ended September 30, 2016
Net sales	$	5,625,427		$	12,119,703	$	883,232		$	18,628,362
Gross profit		3,798,569			7,325,700		520,602			11,644,871
Operating earnings (loss)		468,589			1,120,482		(49,012	)		1,540,059
Interest (expense)		(43,493	)		-		-			(43,493	)
Other income (expense), net		7,052			-		(3,482	)		3,570
Income (loss) before income taxes		432,148			1,120,482		(52,494	)		1,500,136
Depreciation and amortization		245,381			173,710		22,194			441,285
Fixed asset additions		179,469			305,878		2,077			487,424
Total assets	$	49,897,968		$	16,062,997	$	3,837,798		$	69,798,763
For the quarter ended September 30, 2015
Net sales	$	6,114,793		$	12,328,599	$	912,545		$	19,355,937
Gross profit		4,180,181			7,118,111		534,405			11,832,697
Operating earnings		682,461			1,122,222		55,068			1,859,751
Interest expense		(228,235	)		-		-			(228,235	)
Other income (expense), net		9,408			-		28,912			38,320
Income before income taxes		463,634			1,122,222		83,980			1,669,836
Depreciation and amortization		200,147			141,582		11,931			353,660
Fixed asset additions		122,549			124,502		3,816			250,867
Total assets	$	40,209,669		$	18,113,696	$	4,277,115		$	62,600,480

	Wholesale Leathercraft			Retail Leathercraft		Int’l Leathercraft		Total
For the nine months ended September 30, 2016
Net sales	$	18,187,330		$	37,856,229	$	2,779,935	$	58,823,494
Gross profit		12,977,737			22,386,652		1,829,018		37,193,407
Operating earnings		3,143,151			3,501,441		97,148		6,741,740
Interest (expense)		(108,949	)		-		-		(108,949	)
Other income (expense), net		21,784			-		5,181		26,965
Income before income taxes		3,055,986			3,501,441		102,329		6,659,756
Depreciation and amortization		709,370			477,620		86,088		1,273,078
Fixed asset additions		764,460			565,986		54,985		1,385,431
Total assets	$	49,897,968		$	16,062,997	$	3,837,798	$	69,798,763
For the nine months ended September 30, 2015
Net sales	$	19,234,375		$	37,970,423	$	2,713,431	$	59,918,229
Gross profit		13,076,723			22,512,736		1,640,547		37,230,006
Operating earnings		2,602,868			3,862,343		117,263		6,582,474
Interest expense		(307,160	)		-		-		(307,160	)
Other income (expense), net		46,570			-		21,500		68,070
Income before income taxes		2,342,278			3,862,343		138,763		6,343,384
Depreciation and amortization		714,401			412,179		36,536		1,163,116
Fixed asset additions		706,995			608,817		23,286		1,339,098
Total assets	$	40,209,669		$	18,113,696	$	4,277,115	$	62,600,480

Net sales for geographic areas were as follows:

Three months ended September 30,	2016		2015
United States	$	15,955,084	$	16,558,873
Canada		1,597,652		1,693,958
All other countries		1,075,626		1,103,106
	$	18,628,362	$	19,355,937

Nine months ended September 30,	2016		2015
United States	$	50,293,346	$	51,144,236
Canada		5,085,955		5,432,724
All other countries		3,444,193		3,341,269
	$	58,823,494	$	59,918,229

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 and nine-month periods ended September 30, 2016 and 2015. We do not have any significant long-lived assets outside of the United States.