SOURCE: TX Holdings, Inc.

December 03, 2013 08:00 ET

TX Holdings Reports 2013 Results Revenue for 2013 Increased 111% First Full Year Reporting Net Income

ASHLAND, KY--(Marketwired - Dec 3, 2013) - TX Holdings, Inc., (the "Company"), (OTCQB: TXHG)

  • Revenue for Year Ended September 30, 2013 Increased 111% as Compared to 2012
  • Net Income for Year Ended September 30, 2013 Was $326,977 as Compared to a Net Loss in 2012
  • Gross Profit for Year Ended September 30, 2013 Increased 228% as Compared to 2012
  • First Full Year in Which Company Has Posted Net Income

TX Holdings, Inc., (the "Company"), (OTCQB: TXHG), a supplier of mining and rail products to the U.S. coal mining industry, today announced financial results for its 2013 fiscal year. The Company has continued to post increased sales and announced that 2013 is the first full year in which it has reported a profit.

Mr. Shrewsbury, the company's CEO and Chairman, stated that "We are pleased to announce that we have had an important turn-around year, with sales having reached $4.89 million. Our earnings growth for 2013 has helped strengthen our balance sheet. We anticipate this trend to continue in 2014. Our full year's results confirm the efficacy of our decision to expand and re-focus our business and reflect the gradual and continued acceptance of our products in the industry.

Mr. Shrewsbury further stated: "We are extremely pleased with our sales and operating results for 2013. Although as previously announced, we commenced showing positive net income in the second fiscal quarter, 2013 is our first full year of profitability. We will continue to strive to build shareholder value by focusing our efforts on increasing sales to existing customers, while maintaining good relations with such customers through our customer service efforts. We will endeavor to provide excellent products at competitive prices, and assuring timely delivery, while containing our costs and operational expenses. During 2014, we hope to build on these efforts by further expanding our customer base and product offerings while carefully managing our finances."

Fiscal 2013 Financial Summary

Revenue for fiscal 2013 was $4.89 million, an increase of $2.57 million or 111% compared to 2012.

Gross profit for 2013 was $1.56 million, an increase of $1.09 million or 228% compared to 2012.

Net income for 2013 was $326,977 compared to a net loss of $499,501 for 2012, an increase of $826,478.

Earnings per diluted share were $0.01 compared to a loss per diluted share of $(0.01) in 2012.

Cost of goods sold was $3.33 million compared to $1.85 million in 2012, an increase of $1.49 million or 80.4%, from higher sales volume.

Operating expenses for 2013 were $1.16 million compared to $918,230 in 2012, an increase of $245,083 or 27%. Other expenses for 2013 were $73,322 compared to $57,466 for 2012, an increase of $15,856 or 28%.

Cash used in operating activities for 2013 was $237,464 and resulted from the continued effort to increase inventory from prior year-end levels to meet projected increases in sales demand. Cash needs for inventory growth was minimized by an increase in accounts payable and the net income realized during 2013. At September 30, 2013, the company had a cash balance of $175,028, an increase of $171,893 when compared to 2012. To fund ongoing operations, the company continued to rely upon financing provided by its CEO, including demand notes and advances of $1.85 million, and a secured bank line of credit of which $248,500 had been drawn upon at year end.

Forward-Looking and Cautionary Statements

Except for the historical information and discussions contained herein, statements contained in this release may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 (PSLRA) and other applicable law. When used, the words "believe", "anticipate", "estimate", "project", "should", "expect", "plan", "assume" and similar expressions that do not relate solely to historical matters identify forward-looking statements. Forward-looking statements are based on the Company's current assumptions regarding future business and financial performance. Forward-looking statements concerning future plans or results are necessarily only estimates and actual results could differ materially from expectations. These statements involve a number of risks, uncertainties and other factors that could cause actual results to differ materially, including the following: our ability to implement our business strategy; our financial strategy; a downturn in economic environment; our failure to meet growth and productivity objectives; a failure of our innovation initiatives; risks from investing in growth opportunities; fluctuations in financial results and purchases; the impact of local legal, economic, political and health conditions; adverse effects from environmental matters and tax matters; ineffective internal controls; our use of accounting estimates; our ability to attract and retain key personnel and our reliance on critical skills; impact of relationships with critical suppliers; currency fluctuations and customer financing risks; the impact of changes in market liquidity conditions and customer credit risk on receivables; our reliance on third party distribution channels; Securities and Exchange Commission regulations related to trading in "penny stocks;" the continued availability of certain financing provided by our CEO; and other risks, uncertainties and factors discussed in our Quarterly Reports on Forms10-Q, our Annual Report on Form 10-K and in our other filings with the SEC or in materials incorporated therein by reference. Any forward-looking statement in this release speaks only as of the date on which it is made. We assume no obligation to update or revise any forward-looking statement. Notwithstanding the above, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1933, as amended, expressly state that the safe harbor for forward looking statements does not apply to companies that issue penny stocks. Because we may from time to time be considered to be an issuer of penny stock, the safe harbor for forward looking statements under the PSLRA may not be apply to us at certain times.

   
   
TX HOLDINGS, INC.  
BALANCE SHEETS  
September 30, 2013 and 2012  
             
    September 30,     September 30,  
    2013     2012  
ASSETS                
                 
Current assets:                
  Cash and cash equivalents   $ 175,028     $ 3,135  
  Accounts receivable, net of allowance for doubtful accounts of $13,993 and $0, respectively     425,930       200,275  
  Inventory     1,849,987       771,977  
  Commission advances     3,546       56,375  
  Note receivable-current     10,000       10,000  
  Other current assets     23,275       43,771  
    Total current assets     2,487,766       1,085,533  
                 
Property and equipment, net     43,387       55,797  
Note receivable, less current portion     27,380       30,000  
Other     200       50,200  
                 
      Total Assets   $ 2,558,733     $ 1,221,530  
                 
LIABILITIES AND STOCKHOLDERS' DEFICIT                
                 
Current liabilities:                
  Accrued liabilities   $ 889,885     $ 788,185  
  Accounts payable     692,180       279,655  
  Advances from stockholders/officers     499,583       307,082  
  Bank-line of credit     248,500       _  
    Total current liabilities     2,330,148       1,374,922  
                   
  Notes payable to a stockholder     1,351,997       1,351,997  
  Asset retirement obligation     _       5,000  
    Total Liabilities     3,682,145       2,731,919  
                 
Commitments and contingencies                
                 
Stockholders' deficit:                
  Preferred stock: no par value, 1,000,000 shares authorized no shares outstanding     _       _  
  Common stock: no par value, 250,000,000 shares authorized, 48,053,084 and 46,553,084 shares issued and outstanding at September 30, 2013 and September 30, 2012, respectively     9,293,810       9,233,810  
  Additional paid-in capital     4,304,280       4,304,280  
  Accumulated deficit     (14,721,502 )     (15,048,479 )
    Total stockholders' deficit     (1,123,412 )     (1,510,389 )
                   
  Total Liabilities and Stockholders' Deficit   $ 2,558,733     $ 1,221,530  
                 
                 
   
   
TX HOLDINGS, INC.  
STATEMENTS OF OPERATIONS  
For the Years Ended September 30, 2013 and 2012  
             
    September 30,
2013
    September 30,
2012
 
                 
Revenue   $ 4,894,529     $ 2,322,525  
                 
Cost of goods sold     3,330,917       1,846,330  
                 
Gross profit     1,563,612       476,195  
                 
Operating expenses, except items shown separately below     440,250       434,320  
  Commission expense     544,295       228,828  
  Professional fees     161,683       216,201  
  Stock-based compensation     _       27,040  
  Depreciation expense     17,085       11,841  
    Total operating expenses     1,163,313       918,230  
                 
Income/(loss) from operations     400,299       (442,035 )
                 
Other income and (expense):                
  Gain/(loss) on disposal of fixed assets     2,031       (12,064 )
  Gain on extinguishment of accrued liabilities     32,458       62,719  
  Bad debt expense     (15,951 )     _  
  Other income     _       7,506  
  Interest expense     (91,860 )     (115,627 )
                   
    Total other income and (expenses), net     (73,322 )     (57,466 )
                 
Income (loss) before provision for income taxes     326,977       (499,501 )
                 
Provision for income taxes     135,000       _  
Utilization of net operating loss carry forward     (135,000 )     _  
                 
Net income/(loss)   $ 326,977     $ (499,501 )
                 
Net earnings/(loss) per common share                
  Basic   $ 0.01     $ (0.01 )
  Diluted   $ 0.01     $ (0.01 )
                 
Weighted average of common shares outstanding-                
  Basic     47,892,810       50,639,594  
  Diluted     48,542,810       50,639,594  
                 
                 
   
   
TX HOLDINGS, INC.  
STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT  
For the Years Ended September 30, 2013 and 2012  
                                     
                                     
                                       
    Preferred Stock   Common Stock                      
    Shares   Amount   Shares     Amount      Additional
Paid in
Capital
   Accumulated
Deficit
    Total  
                                               
Balance at                                              
September 30, 2011   _   $ _   53,271,897     $ 10,566,487     $ 1,379,409   $ (14,548,978 )   $ (2,603,082 )
Warrants issued to an officer and the Board   _     _   _       _       27,040     _       27,040  
                                               
Legal settlementagainst prior CEO and shareholder   _     _   (6,718,813 )     (1,332,677 )     2,897,831     _       1,565,154  
                                               
Net loss   _     _   _       _       _     (499,501 )     (499,501 )
                                               
Balance at                                              
September 30, 2012   _   $ _   46,553,084     $ 9,233,810     $ 4,304,280   $ (15,048,479 )   $ (1,510,389 )
Common stock issued for professional services   _     _   1,500,000       60,000       _     _       60,000  
                                               
Net income   _     _   _       _       _     326,977       326,977  
                                               
Balance at                                              
September 30, 2013   _   $ _   48,053,084     $ 9,293,810     $ 4,304,280   $ (14,721,502 )   $ (1,123,412 )
                                               
.                                              
   
   
TX HOLDINGS, INC.  
STATEMENTS OF CASH FLOWS  
For the Years Ended September 30, 2013 and 2012  
    September 30,
2013
    September 30,
2012
 
Cash flows used by operating activities:                
  Net income/(loss)   $ 326,977     $ (499,501 )
  Adjustments to reconcile net income/(loss) to net cash used in operating activities:                
    Depreciation expense     17,085       11,841  
    Bad debt expense     15,951       _  
    Gain on extinguishment of accrued liabilities     (32,458 )     (62,719 )
    Fair value of warrants issued to an officer and the Board     _       27,040  
    Loss on settlement of accounts payable     10,116       _  
    Loss on sale of fixed assets     _       12,064  
    Gain on sale of equipment     (2,031 )     _  
  Changes in operating assets and liabilities:                
    Accounts receivable     (241,606 )     (200,275 )
    Inventory     (1,078,010 )     (771,977 )
    Commission advances     52,829       (81,375 )
    Other current assets     20,496       (43,971 )
    Deposits     50,000       _  
    Accrued liabilities     134,158       200,601  
    Accounts payable     462,409       268,449  
    Notes receivable     2,620       _  
  Stockholder/officers advances for operations     24,000       18,000  
  Net cash used in operating activities     (237,464 )     (1,121,823 )
                 
Cash flows used in investing activities:                
    Proceeds received on sale of assets     5,500       40,000  
    Purchase of equipment     (13,144 )     (19,000 )
  Net cash provided by/(used in) investing activities     (7,644 )     21,000  
                 
Cash flows provided by financing activities:                
    Proceeds from line of credit     248,500       _  
    Proceeds from stockholder/officer advances     284,501       1,259,939  
    Payment for settlement of debt     _       (71,250 )
    Purchase of treasury stock     _       (28,750 )
    Payments on stockholder/officer advances     (116,000 )     (59,000 )
  Net cash provided by financing activities     417,001       1,100,939  
                 
Increase in cash and cash equivalents     171,893       116  
Cash and cash equivalents at beginning of year     3,135       3,019  
                 
Cash and cash equivalents at end of year   $ 175,028     $ 3,135  
                 
Supplemental Cash Flow Disclosure                
    Interest paid   $ 7,394     $ _  
                 
                 

Contact Information

  • Contact:

    William "Buck" Shrewsbury
    Chairman and CEO
    TX Holdings, Inc.
    (606) 928-1131