ASHLAND, Ky., July 28, 2017 (GLOBE NEWSWIRE) -- TX Holdings, Inc. (OTCQB:TXHG), a supplier of mining and rail products to the U.S. coal mining industry, today announced financial results for the third quarter of fiscal 2017. For the 2017 third fiscal quarter, the company reported quarterly revenue of $852,926, a 123.6% increase when compared to the same quarter in the prior year. The Company’s Gross profit for the period was $195,800 and had Net income of $6,402.
Mr. Shrewsbury, the company’s CEO and Chairman, stated that, “We continue to be encouraged by our two consecutive quarters growth in our customers sales demand, of our rail as well as our mining products, as compared to the prior year and, a favorable outlook for expanding our customer base. Our optimism is fortified by the recent energy outlook by The U.S. Energy Information Administration who reported that in 2017, growth in coal-fired electricity generation and exports is expected to lead to an increase of 8% in total U.S. coal production.”
Third Quarter 2017 Financial Summary
Revenue for third quarter 2017 was $852,926, an increase of $471,397 or 123.6% compared to 2016.
Cost of goods sold for the current quarter was $657,126 compared to $306,289 in 2016, an increase of 114.5%.
Gross profit for the third quarter of 2017 was $195,800 an increase as a percentage of revenue to 23.0% from 19.7% compared to 2016.
Net income for third quarter 2017 was $6,402 compared to a net loss in the same quarter of 2016 of $85,569.
Earnings (loss) per diluted share was $0.00 remaining unchanged from 2016.
Operating expenses increased 15.8% as compared to the same quarter of fiscal 2016. Other expenses in the third quarter 2017 were $33,578 compared to other expense of $25,271 in 2016.
Cash provided by operating activities for the nine months ended June 30, 2017 was $147,419 as compared to cash used in operating activities of $134,948 during same period in 2016. The increase during the nine months ended June 30, 2017, was a direct result of an increase in accounts payable of $261,813 and a decrease in inventory of $239,821 partially offset by an increase in accounts receivable of $258,902. Cash flows used by financing activities decreased by $146,792 due to payment on our term loan of $47,242 and a net advance repayment to stockholder/officer of $99,550. At June 30, 2017, the company had cash and cash equivalents of $3,689, compared to $3,062 as of September 30, 2016.
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 | ||||||||
| June 30, 2017 and September 30, 2016 | ||||||||
| Unaudited | ||||||||
| June 30, | September 30, | |||||||
| 2017 | 2016 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 3,689 | $ | 3,062 | ||||
| Accounts receivable, net of allowance for doubtful | ||||||||
| accounts of $50,603 at June 30, 2017 and $113,643 at September 30, 2016 | 556,439 | 235,402 | ||||||
| Inventory | 1,566,197 | 1,806,018 | ||||||
| Commission advances | 32,703 | 68,718 | ||||||
| Note receivable-current | 10,000 | 10,000 | ||||||
| Other current assets | 181 | 136 | ||||||
| Total current assets | 2,169,209 | 2,123,336 | ||||||
| Inventory, non-current | 300,000 | 300,000 | ||||||
| Property and equipment, net | 49,432 | 56,779 | ||||||
| Note receivable, less current portion | 19,983 | 19,983 | ||||||
| Other | 500 | 500 | ||||||
| Total Assets | $ | 2,539,124 | $ | 2,500,598 | ||||
| LIABILITIES AND STOCKHOLDERS' DEFICIT | ||||||||
| Current liabilities: | ||||||||
| Accrued liabilities | $ | 862,872 | $ | 831,053 | ||||
| Accounts payable | 886,900 | 625,087 | ||||||
| Advances from officer | 99,087 | 198,637 | ||||||
| Bank-Term Loan | 614,870 | 662,112 | ||||||
| Total current liabilities | 2,463,729 | 2,316,889 | ||||||
| Note payable to officer | 2,000,000 | 2,000,000 | ||||||
| Total Liabilities | 4,463,729 | 4,316,889 | ||||||
| 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 June 30, 2017 and September 30, 2016 | 9,293,810 | 9,293,810 | ||||||
| Additional paid-in capital | 4,321,329 | 4,321,329 | ||||||
| Accumulated deficit | (15,539,744 | ) | (15,431,430 | ) | ||||
| Total stockholders' deficit | (1,924,605 | ) | (1,816,291 | ) | ||||
| Total Liabilities and Stockholders' Deficit | $ | 2,539,124 | $ | 2,500,598 | ||||
| TX HOLDINGS, INC. | ||||||||||||||||
| CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||
| For the Three Months and Nine Months Ended June 30, 2017 and June 30, 2016 | ||||||||||||||||
| Unaudited | ||||||||||||||||
| THREE MONTHS ENDED | NINE MONTHS ENDED | |||||||||||||||
| June 30, | June 30, | June 30, | June 30, | |||||||||||||
| 2017 | 2016 | 2017 | 2016 | |||||||||||||
| Revenue | $ | 852,926 | $ | 381,529 | $ | 2,273,245 | $ | 1,728,707 | ||||||||
| Cost of goods sold | (657,126 | ) | (306,289 | ) | (1,858,902 | ) | (1,244,746 | ) | ||||||||
| Gross profit | 195,800 | 75,240 | 414,343 | 483,961 | ||||||||||||
| Operating expenses, except items shown | ||||||||||||||||
| separately below | 106,689 | 105,210 | 308,525 | 359,508 | ||||||||||||
| Commission expense | 51,903 | 21,879 | 108,259 | 85,251 | ||||||||||||
| Professional fees | 4,789 | 5,000 | 12,409 | 46,421 | ||||||||||||
| Bad Debt Expense | (10,000 | ) | _ | (9,095 | ) | 1,926 | ||||||||||
| Depreciation expense | 2,449 | 2,449 | 7,347 | 7,347 | ||||||||||||
| Total operating expenses | 155,830 | 134,538 | 427,445 | 500,453 | ||||||||||||
| Income (loss) from operations | 39,970 | (59,298 | ) | (13,102 | ) | (16,492 | ) | |||||||||
| Other income and (expense): | ||||||||||||||||
| Other income | _ | 6,102 | _ | 6,102 | ||||||||||||
| Interest expense | (33,568 | ) | (31,373 | ) | (95,212 | ) | (94,650 | ) | ||||||||
| Total other income and (expense), net | (33,568 | ) | (25,271 | ) | (95,212 | ) | (88,548 | ) | ||||||||
| Net income (loss) | $ | 6,402 | $ | (84,569 | ) | $ | (108,314 | ) | $ | (105,040 | ) | |||||
| Net income/(loss) per common share | ||||||||||||||||
| Basic and Diluted | $ | 0.00 | $ | 0.00 | $ | 0.00 | $ | 0.00 | ||||||||
| Weighted average of common shares | ||||||||||||||||
| outstanding- | ||||||||||||||||
| Basic and Diluted | 48,053,084 | 48,053,084 | 48,053,084 | 48,053,084 | ||||||||||||
| TX HOLDINGS, INC. | |||||||||||||
| CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||||||
| For the Nine Months Ended June 30, 2017 and 2016 | |||||||||||||
| (Unaudited) | |||||||||||||
| June 30, | June 30, | ||||||||||||
| 2017 | 2016 | ||||||||||||
| Cash flows provided/(used) in operating activities: | |||||||||||||
| Net loss | $ | (108,314 | ) | $ | (105,040 | ) | |||||||
| Adjustments to reconcile loss to net cash used | |||||||||||||
| in operating activities: | |||||||||||||
| Depreciation expense | 7,347 | 7,347 | |||||||||||
| Bad debt expense | (62,135 | ) | 1,926 | ||||||||||
| Changes in operating assets and liabilities: | |||||||||||||
| Accounts receivable | (258,902 | ) | 170,834 | ||||||||||
| Inventory | 239,821 | (15,432 | ) | ||||||||||
| Commission advances | 36,015 | (516 | ) | ||||||||||
| Other current assets | (45 | ) | 1,538 | ||||||||||
| Accrued liabilities | 7,819 | 61,399 | |||||||||||
| Accounts payable | 261,813 | (275,004 | ) | ||||||||||
| Other assets | _ | _ | |||||||||||
| Stockholder/officers advances for operations | 24,000 | 18,000 | |||||||||||
| Net cash provided/(used) in operating activities | 147,419 | (134,948 | ) | ||||||||||
| Cash flows provided/(used) in investing activities: | |||||||||||||
| Net cash provided/(used) in investing activities | _ | _ | |||||||||||
| Cash flows provided/(used) in financing activities: | |||||||||||||
| Payment on Term Loan | (47,242 | ) | (29,487 | ) | |||||||||
| Proceeds from bank line of credit | _ | _ | |||||||||||
| Repayment of bank line of credit | _ | (1,073 | ) | ||||||||||
| Proceeds from stockholder/officer advances | 111,150 | 170,100 | |||||||||||
| Repayment of stockholder/officer advances | (210,700 | ) | (65,300 | ) | |||||||||
| Net cash provided/(used) in financing activities | (146,792 | ) | 74,240 | ||||||||||
| Increase/(decrease) in cash and cash equivalents | 627 | (60,708 | ) | ||||||||||
| Cash and cash equivalents at beginning of period | 3,062 | 61,564 | |||||||||||
| Cash and cash equivalents at end of period | $ | 3,689 | $ | 856 | |||||||||