ASHLAND, Ky., Dec. 15, 2017 (GLOBE NEWSWIRE) -- TX Holdings, Inc. (OTC PINK:TXHG), a supplier of mining and rail products to the U.S. coal mining industry, today announced financial results for its 2017 fiscal year. During the 2017 fiscal year, the company reported annual revenue of $3,006,599, a 41.3% increase when compared to the same period the prior year. Net loss for fiscal year 2017 was $124,506, a loss decrease of $554,213, when compared to a net loss of $678,719 for the prior year.
Mr. Shrewsbury, the company’s CEO and Chairman, stated that:
“Our fiscal 2017 results were an appreciable improvement over the two prior year results. Having experienced previous periods of lower demand for our mine and rail products, primarily due to a decline in the U.S. coal mining industry, we are encouraged by our improved operational results driven by an increase in product demand during the last three quarters of the current fiscal year, when we experienced an 41.3% revenue increase over the prior year. The U.S. Energy Information Administration has forecast that U.S. electricity produced by coal which rose to 31% in 2017 from 30% the prior year will remain stable during 2018, and we believe this will cause demand for our products to remain at current period levels. We have an increased confidence in the future based on the fact that the number of regulations that have negatively impacted the coal industry have been either eliminated or significantly eased.”
Fiscal Year 2017 - Financial Summary
Revenue for the year ended September 30, 2017 was $3,006,599 as compared to $2,128,278 for the same period in the prior year, an increase of $878,321 or 41.3%.
Cost of goods sold was $2,273,214 as compared to cost of goods sold of $1,849,289 for the same period the prior year, an increase of $423,925 or 22.9%.
Gross profit for the year ended September 30, 2017 increased 162.9% when compared to 2016.
Operating expenses for the year ended September 30, 2017 were $742,941 as compared to $837,209 for the twelve months ended September 30, 2016 a decrease of $94,268 or 11.3%.
Other expenses decreased by $5,549 or 4.9% compared to the same period in the prior year.
Net loss for the current year was $124,506, compared to a net loss of $678,719, incurred in the fiscal year 2016.
At September 30, 2017, cash and cash equivalents were $40,345 compared to $3,062 at September 30, 2016. Net cash provided in operating activities was $258,040 during the twelve months ended September 30,2017. Net cash used in operating activities was $82,165 during the same twelve months period in the prior year. There was no cash flow from investing activities for the fiscal year ended September 30, 2017, or 2016. During the fiscal year ended September 30, 2017, net cash used in financing activities was $220,757 due to a net repayment of a stockholder’s advances of $164,650. Cash flow provided by financing activities was $23,663 during the same period in the prior year.
Accounts receivable were $458,203 as of September 30, 2017, as compared to $235,402 as of September 30, 2016, an increase of 94.6%. A $113,643 decrease in the allowance for doubtful accounts during the current year, partially accounted for the increase in receivables.
Inventory was $1,690,350 as of September 30, 2017, a decrease of 6.4% as compared to September 30, 2016. During the fiscal year 2017, the Company recorded a $144,726 inventory write-off.
The attached consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto included in the Company’s September 30, 2017 Annual Report on Form 10-K.
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.
Contact:
William “Buck” Shrewsbury
Chairman and CEO
TX Holdings, Inc.
(606) 928-1131
| TX HOLDINGS, INC. | |||||||
| CONSOLIDATED BALANCE SHEETS | |||||||
| September 30, 2017 and 2016 | |||||||
| September 30, | September 30, | ||||||
| 2017 | 2016 | ||||||
| ASSETS | |||||||
| Current assets: | |||||||
| Cash and cash equivalents | $ | 40,345 | $ | 3,062 | |||
| Accounts receivable, net of allowance for doubtful | |||||||
| accounts of $ 0 at September 30, 2017 and $113,643 at September 30, 2016 | 458,203 | 235,402 | |||||
| Inventory | 1,690,350 | 1,806,018 | |||||
| Commission advances | 22,648 | 68,718 | |||||
| Note receivable-current | – | 10,000 | |||||
| Other current assets | 2,886 | 136 | |||||
| Total current assets | 2,214,432 | 2,123,336 | |||||
| Inventory, non-current | – | 300,000 | |||||
| Property and equipment, net | 46,980 | 56,779 | |||||
| Note receivable, less current portion | – | 19,983 | |||||
| Other | 500 | 500 | |||||
| Total Assets | $ | 2,261,912 | $ | 2,500,598 | |||
| LIABILITIES AND STOCKHOLDERS' DEFICIT | |||||||
| Current liabilities: | |||||||
| Accrued liabilities | $ | 548,218 | $ | 571,327 | |||
| Accounts payable | 654,773 | 625,087 | |||||
| Accrued interest | 359,726 | 259,726 | |||||
| Advances from officer | 33,987 | 198,637 | |||||
| Bank-Term Loan | 606,005 | 662,112 | |||||
| Total current liabilities | 2,202,709 | 2,316,889 | |||||
| Note payable to officer | 2,000,000 | 2,000,000 | |||||
| Total Liabilities | 4,202,709 | 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 September 30, 2017 and September 30, 2016 | 9,293,810 | 9,293,810 | |||||
| Additional paid-in capital | 4,321,329 | 4,321,329 | |||||
| Accumulated deficit | (15,555,936 | ) | (15,431,430 | ) | |||
| Total stockholders' deficit | (1,940,797 | ) | (1,816,291 | ) | |||
| Total Liabilities and Stockholders' Deficit | $ | 2,261,912 | $ | 2,500,598 | |||
| TX HOLDINGS, INC. | ||||||||
| CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||
| For the Years Ended September 30, 2017 and 2016 | ||||||||
| September 30, | September 30, | |||||||
| 2017 | 2016 | |||||||
| Revenue | $ | 3,006,599 | $ | 2,128,278 | ||||
| Cost of goods sold | (2,273,214 | ) | (1,849,289 | ) | ||||
| Gross profit | 733,385 | 278,989 | ||||||
| Operating expenses, except items shown | ||||||||
| separately below | 559,583 | 493,040 | ||||||
| Commission expense | 149,884 | 101,627 | ||||||
| Professional fees | 16,739 | 62,788 | ||||||
| Bad Debt Expense | 6,936 | 169,958 | ||||||
| Depreciation expense | 9,799 | 9,796 | ||||||
| Total operating expenses | 742,941 | 837,209 | ||||||
| Loss from operations | (9,556 | ) | (558,220 | ) | ||||
| Other income and (expense): | ||||||||
| Other income | 11,038 | 8,668 | ||||||
| Interest expense | (125,988 | ) | (129,167 | ) | ||||
| Total other income and (expense), net | (114,950 | ) | (120,499 | ) | ||||
| Net loss | $ | (124,506 | ) | $ | (678,719 | ) | ||
| Net loss per common share | ||||||||
| Basic and Diluted | $ | 0.00 | $ | (0.01 | ) | |||
| Weighted average of common shares | ||||||||
| outstanding- | ||||||||
| Basic and Diluted | 48,053,084 | 48,053,084 | ||||||
| TX HOLDINGS, INC. | ||||||||||
| CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||||
| For the Years Ended September 30, 2017 and 2016 | ||||||||||
| September 30, | September 30, | |||||||||
| 2017 | 2016 | |||||||||
| Cash flows provided/(used) in operating activities: | ||||||||||
| Net loss | $ | (124,506 | ) | $ | (678,719 | ) | ||||
| Adjustments to reconcile loss to net cash used | ||||||||||
| in operating activities: | ||||||||||
| Depreciation expense | 9,799 | 9,796 | ||||||||
| Bad debt expense | 6,936 | 169,958 | ||||||||
| Write-off of note receivable | 29,983 | 26,000 | ||||||||
| Changes in operating assets and liabilities: | ||||||||||
| Accounts receivable, net | (229,737 | ) | 179,683 | |||||||
| Inventory | 415,668 | 417,019 | ||||||||
| Commission advances | 46,070 | (20,380 | ) | |||||||
| Other current assets | (2,750 | ) | 1,538 | |||||||
| Accrued liabilities | 46,891 | 110,429 | ||||||||
| Accounts payable | 29,686 | (321,489 | ) | |||||||
| Stockholder/officers advances for operations | 30,000 | 24,000 | ||||||||
| Net cash provided/(used) in operating activities | 258,040 | (82,165 | ) | |||||||
| Cash flows provided/(used) in investing activities: | ||||||||||
| Net cash provided/(used) in investing activities | – | – | ||||||||
| Cash flows provided/(used) in financing activities: | ||||||||||
| Repayment of bank term loan | (56,107 | ) | (50,337 | ) | ||||||
| Proceeds from stockholder/officer advances | 111,150 | 187,200 | ||||||||
| Repayment of stockholder/officer advances | (275,800 | ) | (113,200 | ) | ||||||
| Net cash provided/(used) in financing activities | (220,757 | ) | 23,663 | |||||||
| Increase/(decrease) in cash and cash equivalents | 37,283 | (58,502 | ) | |||||||
| Cash and cash equivalents at beginning of period | 3,062 | 61,564 | ||||||||
| Cash and cash equivalents at end of period | $ | 40,345 | $ | 3,062 | ||||||
| Supplemental Disclosure of Cash Flow Information | ||||||||||
| Cash paid during the year for interest | $ | 25,988 | $ | 129,167 | ||||||
| Supplemental Schedule of Non-Cash investing and Financing Activities | ||||||||||
| Repayment of line of credit through issuance of bank term loan | $ | – | $ | 711,376 | ||||||