The Leather Factory, Inc. (TLF)
By: Robert Davis

The Leather Factory Reports Revenue and Earnings Increases for 2001

 

On Thursday, February 21st, The Leather Factory (AMEX:TLF) reported strong financial results for the fourth quarter and total year 2001, as shown below:

 

Although the $7.2 million increase in revenues appears to have been the key force behind TLF’s total year net income gains, the two percentage point improvement in gross profits also made a meaningful contribution to the Company’s bottom line gains.  The Leather Factory generally met our projections for 2001, as published in our initial Report on January 7th.

 
 
 

As shown by the accompanying chart, these financial results reaffirm our position that TLF’s stock is fundamentally undervalued.

 

This chart compares TLF’s actual market price against the economic value inherent in a share of the Company’s stock.  The blue line on the chart gives the modeled price at which this stock would have traded had the market priced TLF at its "Economic Value," assuming a 20.0% projected growth rate.

The red arrow on the right-hand side of the chart shows the extent to which The Leather Factory’s stock is currently undervalued.

We anticipate that the Company will file its full 10-K Report shortly after mid-March, and we will issue a completely updated Report shortly thereafter.

J.M.Dutton & Associates, LLC. John M. Dutton, President and Supervisory Analyst, 801 S. Figueroa, Suite 1120, Los Angeles, CA 90017 Phone (213) 929-2616, Fax (213) 896 0457 Email: [email protected] Web site: www.JMDutton.com

Information, opinions or recommendations contained in this research note are submitted solely for advisory and information purposes. The information used and statements of fact made have been obtained from sources considered reliable but we neither guarantee nor represent the completeness or accuracy. Such information and the opinions expressed are subject to change without notice. This research note is not intended as an offering or a solicitation of an offer to buy or sell the securities mentioned or discussed. Neither the Firm, its principals, nor the assigned analysts own or trade shares of any company covered. The Firm does not accept any equity compensation. Anyone may enroll a company for research coverage, which costs US $22,000 prepaid for one-year. Reports are performed on behalf of the public, and are not a service to any company. The analysts are responsible only to the public, and are paid in advance to eliminate pecuniary interests and insure independence. Please read full disclosure and other reports and notes on the Company at www.JMDutton.com.

© Copyright, 2002, by J.M. Dutton & Associates, LLC.