×

TX Holdings Reports Third Quarter 2017 Results

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

Contact: William “Buck” Shrewsbury Chairman and CEO TX Holdings, Inc. (606) 928-1131

Source:TX Holdings