SOURCE: TX Holdings, Inc.

January 25, 2016 09:00 ET

TX Holdings Reports Results for First Quarter of Fiscal 2016

ASHLAND, KY--(Marketwired - Jan 25, 2016) - TX Holdings, Inc. (OTCQB: TXHG)

  • Revenue for first quarter of fiscal 2016, increased 22%
  • Gross profit for first quarter of 2016 increased 103% when compared to 2015
  • Income from operations was $64,165 compared to loss from operations in same quarter of prior year
  • Net income was $30,632 compared to a net loss of $145,283 in 2015

TX Holdings, Inc. (OTCQB: TXHG), a supplier of mining and rail products to the U.S. coal mining industry, today announced financial results for its 2016 first fiscal quarter. During the 2016 first fiscal quarter, the company reported quarterly revenue of $782,265, a 22.1% increase when compared to the same quarter in the prior year. Net income for the first quarter of fiscal 2016 was $30,632, an increase of $175,915 when compared to a net loss of $145,283 for the prior year.

Mr. Shrewsbury, the company's CEO and Chairman, stated that:

"We are pleased with our quarterly results, especially since this is the first recent quarter in which we have reported net income. Considering the continued weakness in our industry, we have focused on expanding our customer base and introducing new product lines, while at the same time keeping our costs down and controlling our overhead. Based on the simple fact that our industry is an important and integral part of the U.S. economy, we are optimistic that our industry will recover and we are well positioned through our products pricing and quality and low cost structure to fully participate and remain profitable as we continue to grow our business." 

First Fiscal Quarter of 2016 - Financial Summary

Revenue for the three months ended December 31, 2015 was $782,265 as compared to $640,788 for the same period in the prior year, an increase of $141,477 or 22.1%.

Cost of goods sold was $543,846 as compared to cost of goods sold of $523,346 for the same quarter in the prior year, an increase of $20,500 or 3.9 %.

Gross profit for the quarter ended December 31, 2015 increased as a percentage of revenue from 18.3% to 30.5% when compared to the same period the prior year.

Operating expenses for the three months ended December 31, 2015 were $174,254 as compared to $237,250 for the three months ended December 31, 2014, a decrease of $62,996 or 26.6%. Commission expense was $27,831 compared to $40,573 the same period in the prior year, a decrease of $12,742 or 31.4%. Other operating expenses decreased by $31,136 or 20.2% compared to the same period in the prior year.

Income from operations for the quarter ended December 31, 2015, was $64,165, when compared to a loss from operations of $119,808 in the same period in the prior year.

Net income was $30,632, compared to a net loss of $145,283, incurred in the first fiscal quarter of 2015.

At December 31, 2015, cash and cash equivalents were $2,000 compared to $61,564 at September 30, 2015. Net cash used in operating activities was $86,599 during the three months ended December 31, 2015. Net cash used in operating activities was $151,084 during the same three months period in the prior year. There was no cash flow from investing activities for the three months ended December 31, 2015, as compared to cash flow used in investing activities of $1,102 during the same period in the prior year. During the three months ended December 31, 2015, net cash provided by financing activities was $27,035 due to an increase of a stockholder's advance by $33,000. Cash flow provided by financing activities was $160,349 during the same period in the prior year.

Accounts receivable were $460,803 as of December 31, 2015, as compared to $585,043 as of September 30, 2014, a decrease of 21.2%.

Inventory was $2,467,268 as of December 31, 2015 an increase of 11.0% as compared to September 30, 2015. In anticipation of the continued growth of its rail and mining supplies business, the company increased its inventory levels to meet anticipated higher sales demand.

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: reliance upon indebtedness furnished or guaranteed by our CEO; risks related to substantial indebtedness; 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 Form10-Q, our Annual Reports 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 1934, 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.  
CONSOLIDATED BALANCE SHEETS  
December 31, 2015 and September 30, 2015  
    Unaudited  
    December 31,     September 30,  
    2015     2015  
ASSETS                
Current assets:                
  Cash and cash equivalents   $ 2,000     $ 61,564  
  Accounts receivable, net of allowance for doubtful accounts of $13,643 at December 31, 2015 and September 30, 2015     460,803       585,043  
  Inventory     2,467,268       2,223,037  
  Commission advances     58,996       48,338  
  Note receivable-current     10,000       10,000  
  Other current assets     28,604       27,674  
    Total current assets     3,027,671       2,955,656  
                 
Inventory, non-current     300,000       300,000  
Property and equipment, net     64,126       66,575  
Note receivable, less current portion     19,983       19,983  
Other     500       500  
  Total Assets   $ 3,412,280     $ 3,342,714  
                 
        LIABILITIES AND STOCKHOLDERS' DEFICIT                
                 
Current liabilities:                
  Accrued liabilities   $ 698,175     $ 696,624  
  Accounts payable     956,924       946,576  
  Advances from officer     157,637       124,637  
  Bank-Line of Credit     -       712,449  
  Bank-Term Loan     706,484       -  
    Total current liabilities     2,519,220       2,480,286  
                 
Note payable to officer     2,000,000       2,000,000  
  Total Liabilities     4,519,220       4,480,286  
                 
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 shares issued and outstanding at December 31, 2015 and September 30, 2015     9,293,810       9,293,810  
  Additional paid-in capital     4,321,329       4,321,329  
  Accumulated deficit     (14,722,079 )     (14,752,711 )
      Total stockholders' deficit     (1,106,940 )     (1,137,572 )
    Total Liabilities and Stockholders' Deficit   $ 3,412,280     $ 3,342,714  
                 
The accompanying notes are an integral part of the consolidated financial statements.  
   
   
   
TX HOLDINGS, INC.  
CONSOLIDATED STATEMENTS OF OPERATIONS  
For the Three Months Ended December 31, 2015 and 2014  
    (Unaudited)  
    December 31,     December 31,  
    2015     2014  
                 
Revenue   $ 782,265     $ 640,788  
                 
Cost of goods sold     (543,846 )     (523,346 )
                 
Gross profit     238,419       117,442  
                 
Operating expenses, except items shown separately below     120,702       153,764  
  Commission expense     27,831       40,573  
  Professional fees     21,346       40,097  
  Bad debt expense     1,926       -  
  Depreciation expense     2,449       2,816  
    Total operating expenses     174,254       237,250  
                 
Income (loss) from operations     64,165       (119,808 )
                 
Other income and (expense):                
  Other income     -       6,173  
  Interest expense     (33,533 )     (31,648 )
                 
  Total other income and (expense), net     (33,533 )     (25,475 )
                 
Income (loss) before provision for                
income taxes     30,632       (145,283 )
                 
Provision for income taxes     12,283       -  
Utilization of net operating loss carry forward     (12,283 )     -  
                 
Net income (loss)   $ 30,632     $ (145,283 )
                 
Net earnings (loss) per common share                
  Basic and Diluted   $ -     $ -  
                 
Weighted average of common shares                
outstanding-                
  Basic and Diluted     48,053,084       48,053,084  
                   
The accompanying notes are an integral part of the consolidated financial statements.  
   
   
   
TX HOLDINGS, INC.  
CONSOLIDATED STATEMENTS OF CASH FLOWS  
For the Three Months Ended December 31, 2015 and 2014  
    (Unaudited)  
    December 31,     December 31,  
    2015     2014  
Cash flows used in operating activities:                
Net income (loss)   $ 30,632     $ (145,283 )
Adjustments to reconcile net income (loss) to net cash used in operating activities:                
  Depreciation expense     2,449       2,816  
  Bad debt expense     1,926          
Changes in operating assets and liabilities:                
  Accounts receivable     122,314       5,024  
  Inventory     (244,231 )     10,069  
  Commission advances     (10,658 )     (14,524 )
  Other current assets     (930 )     (4,531 )
  Accrued liabilities     (4,449 )     (5,896 )
  Accounts payable     10,348       1,777  
  Other assets     -       (500 )
  Stockholder/officers advances for operations     6,000       -  
Net cash used in operating activities     (86,599 )     (151,048 )
                 
Cash flows used in investing activities:                
  Notes receivable     -       1,306  
  Purchase of equipment     -       (2,408 )
Net cash used in investing activities     -       (1,102 )
                 
Cash flows provided by financing activities:                
  Payment on Term Loan     (4,892 )     -  
  Proceeds from bank line of credit     -       171,049  
  Repayment of bank line of credit     (1,073 )     -  
  Proceeds from stockholder/officer advances     33,000       3,300  
  Repayment of stockholder/officer advances     -       (14,000 )
Net cash provided by financing activities     27,035       160,349  
                 
Increase/(decrease) in cash and cash equivalents     (59,564 )     8,199  
Cash nd cash equivalents at beginning of period     61,564       72,784  
                 
Cash and cash equivalents at end of period   $ 2,000     $ 80,983  
                 
Supplemental Disclosure of Cash Flow Information  
                 
Cash paid during the year for interest   $ 33,533     $ 31,648  
                 
Suppemental Schedule of Non-Cash investing and Financing Activities  
                 
  Payments of line of credit through issuance of note payable   $ 711,376     $ -  
                 
The accompanying notes are an integral part of the consolidated financial statements.  

Contact Information

  • Contact:

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