Legal settlement dents Tandy Leather’s profits
08/11/2012
For the quarter ending September 30, net income was $281,000 compared with $830,000 for the third quarter last year.
However, sales were $17 million, up 10% from $15.4 million last year.
Chief financial officer Shannon Greene said: "We were profitable in the third quarter, despite the one-time legal settlement expense. Without it, our operating income for the third quarter and the year would have increased 34%, and we would have been very pleased with those results."
At the end of September three plaintiffs alleged the company violated requirements of the US Fair Labour Standards Act as well as various state wage laws. Tandy denied all the allegations but agreed to pay almost $1 million towards for unpaid overtime, liquidated damages, attorneys' fees and costs.
“While incurring an expense like that is not preferred, we believe the settlement is in the best interest of our company, our employees and our stockholders in order to avoid further expense and disruption to operations,” said Tandy CEO Jon Thompson, on announcing the third-quarter results.
Sales in the retail segment, which consists of 77 Tandy Leather stores, increased $1.2 million in the third quarter, a 14% improvement over last year's third quarter.
In the wholesale segment, which consists of the Leather Factory stores and national account group, sales were up 2% or $92,000.
Share this story:
