. SEGMENT INFORMATION

Effective

January 1, 2017,

we updated our reporting segments to better reflect how management analyzes the business and allocates resources, as follows:

Prior Reporting Structure	New Reporting Structure
1. Wholesale – chain of wholesale stores operating under the name, The Leather Factory, located in North America	1. North America – chain of stores located in North America (combined prior Wholesale and Retail)
2. Retail – chain of retail stores operating under the name, Tandy Leather Company, located in North America	2. International – no change
3. International – four stores, 2 located in UK, 1 in Spain and 1 in Australia

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.

All prior year segment information has been restated to conform to the current segment structure.

	North America			International			Total
For the year ended December 31, 2017
Net Sales	$	78,568,219		$	3,753,049		$	82,321,268
Gross Profit		49,889,888			2,223,941			52,113,829
Operating earnings		7,498,817			(256,995	)		7,241,822
Interest expense		205,555			-			205,555
Other expense, net		(135,011	)		8,154			(126,857	)
Income before income taxes		7,428,370			(265,246	)		7,163,124
Depreciation and amortization		1,790,421			84,681			1,875,102
Fixed asset additions		1,666,171			23,474			1,689,645
Total assets	$	70,302,116		$	4,612,480		$	74,914,596

For the year ended December 31, 2016
Net Sales	$	79,041,920		$	3,882,072		$	82,923,992
Gross Profit		49,315,003			2,398,239			51,713,242
Operating earnings		10,224,773			75,958			10,300,731
Interest expense		155,189			-			155,189
Other expense, net		(35,290	)		(21,997	)		(57,287	)
Income before income taxes		10,104,873			97,956			10,202,829
Depreciation and amortization		1,631,534			87,620			1,719,154
Fixed asset additions		1,609,829			87,875			1,697,704
Total assets	$	66,502,432		$	4,150,288		$	70,652,720

For the year ended December 31, 2015
Net Sales	$	80,468,597		$	3,692,603		$	84,161,200
Gross Profit		49,838,455			2,232,605			52,071,060
Operating earnings		10,353,404			121,296			10,474,700
Interest expense		330,004			-			330,004
Other expense, net		(63,230	)		(11,127	)		(74,357	)
Income before income taxes		10,086,630			132,423			10,219,053
Depreciation and amortization		1,509,592			57,580			1,567,172
Fixed asset additions		1,878,229			285,811			2,164,040
Total assets	$	59,894,498		$	4,716,578		$	64,611,076

Net sales by geographic areas were as follows:

	201 7		201 6		201 5
United States	$	70,453,773	$	70,886,401	$	72,061,009
Canada		7,224,894		7,199,155		7,543,468
All other countries		4,642,601		4,838,436		4,556,723
	$	82,321,268	$	82,923,992	$	84,161,200

Geographic sales information is based on the location of the customer. Except for Canada, we had

sales to any single foreign country that was material to our consolidated net sales

2017,

2016,

and

2015.

We do

not

have any significant long-lived assets outside of the United States.