US specialty retailer and wholesale distributor of leather and leather products, The Leather Factory, Inc., has reported record earnings for the first quarter of 2005. Net income for the quarter ended March 31, 2005 was $1.0 million, an 8% increase from $971,000 for the first quarter of 2004. Total sales for the first quarter were $12.7 million, up 4% from $12.2 million in the same period in 2004.

Sales from the Retail Leathercraft operation, consisting of the Tandy Leather retail store chain, increased $1.1 million in the first quarter, a 35% improvement over last year's first quarter.

Wray Thompson, chairman and CEO, commented: "I am very pleased with the results for the quarter, which are the clear result of our strategic growth initiatives and cost containment efforts. In our Retail Leathercraft division, we continued to expand the number of stores while also increasing same-store-sales at our existing locations. While our Wholesale Leathercraft division experienced a slight sales decline from last year's record setting first quarter, we were able to decrease our expenses for the division, resulting in an increase in operating income. We were successful in our efforts to contain operating expenses throughout the company, including healthcare costs. All of this, combined with the elimination of our bank debt during the quarter further strengthened our financial position to support our growth strategy for 2005."

The Leather Factory is a retailer and wholesale distributor of products including leather, leatherworking tools, buckles and adornments for belts, leather dyes and finishes, saddle and tack hardware. It also manufactures and distributes decorative hat trims, leather lacing and kits.

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