The Leather Factory, Inc. (Amex: TLF) today reported results for the second quarter of 2000. Net income for the quarter ended June 30, 2000 was $493,394 or $0.05 per share, compared to net income of $6,708 or $0.00 per share for the second quarter of 1999. Net sales of $7,602,405 for the quarter increased 16% over sales of $6,539,950 for the same quarter last year.

For the six months ended June 30, 2000, sales increased 25% to $15,007,962 from $12,052,950 in sales for the first six months of 1999. Net income for the six months ended June 30, 2000 was $877,336, or $0.09 per share, compared to a net loss of $85,483, or $(0.01) per share, for the same period in 1999.

Wray Thompson, Chairman, President and Chief Executive Officer, commented, "The trends in sales and gross profit margins continue to exceed our projections. During the second quarter of 1999, we began to see tangible signs of improvement for the Company. As a result, the last four quarters have shown consistent growth in sales, margins, and net earnings. For example, earnings per share for the trailing twelve months ended June 30, 2000 was $0.14 per share. The improvement in net earnings indicates that our previously stated policy of focusing on maintaining profit margins and controlling operating expenses is working.''

The Leather Factory, Inc., (www.leatherfactory.com), headquartered in Fort Worth, Texas, is an international marketer and wholesale distributor of a broad product line including leather, leatherworking tools, buckles and adornments for belts, leather dyes and finishes, shoe repair supplies, saddle and tack hardware, and do-it-yourself leathercraft kits, and is a manufacturer and distributor of fancy hat trims, leather lacing and kits. The Company distributes its products through 26 sales and distribution units located throughout the country and Canada. Its common stock trades on the American Stock Exchange with the symbol "TLF".

This news release may contain forward-looking statements. All forward-looking statements made here or in other news releases issued by The Leather Factory, Inc. are based on current expectations as of the date of the release. These forward-looking statements involve risks and uncertainties that could cause the results of The Leather Factory, Inc. to differ materially from management's current expectations. Many of these risks and uncertainties are detailed from time to time in TLF's reports filed with the Securities and Exchange Commission, including its most recent annual report on Form 10-K.

The Leather Factory, Inc.
Consolidated Statements of Income
(Unaudited)
Three and Six Months Ended June 30, 2000 and 1999
Three Months
Six Months
2000
1999
2000
1999
Net Sales
$ 7,602,405
$ 6,539,950
$ 15,007,962
$ 12,052,950
Cost Of Sales
3,801,372
3,726,181
7,636,338
6,880,292
Gross Profit
3,801,033
2,813,769
7,371,624
5,172,658
Operating Expenses
2,818,907
2,584,039
5,597,296
4,822,555
Income From Operations
982,126
229,730
1,774,328
350,103
Other Expense:
Interest Expense
144,905
168,027
314,100
397,894
Other, Net
10,864
(15,063)
16,206
(14,381)
Total Other Expense
155,769
152,964
330,306
383,513
Income (Loss) Before Income Taxes
826,357
76,766
1,444,022
(33,410)
Provision (Benefit) For Income Taxes
332,963
70,058
566,686
52,073
Net Income (Loss)
$493,394
$ 6,708
$877,336
$(85,483)
Net Income (Loss) Per Common Share
$0.05
$---
$0.09
$(0.01)
Net Income (Loss) Per Common Share-- Assuming Dilution
$0.05
$---
$0.09
$(0.01)