Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - TX Holdings, Inc. | t82835_8k.htm |
| Exhibit 99.1 |
FOR IMMEDIATE RELEASE:
TX Holdings Reports Third Quarter 2015 Results
ASHLAND, Kentucky – August 3, 2015 - TX Holdings, Inc. (OTC Markets 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 2015. During the third quarter, revenues decreased due to overall lower sales demand and the company incurred a $82,913 net loss. Gross profit was $133,087 compared with $281,768 in the third quarter 2014.
Mr. Shrewsbury, the company’s CEO and Chairman, stated that “We were very disappointed with the results of recent quarters. We believed the indicators we saw in the U. S. coal mining industry showed a turn-around was starting; however, our assessment and its timing proved to be incorrect. We continue to have full confidence in the future of the U.S. coal mining industry. Coal on dollar cost basis per BTU remains one of the cheapest fuels in the energy industry. The recent ruling by the Supreme Court on certain regulations adopted by the EPA and affecting the coal mining industry economic growth, coupled with efficiencies and consolidation in the industry augur well for the future. As reported, I recently bought additional shares of the company in the open market thereby increasing my holdings and believe this to be indicative of my continued belief in the future of the U.S. coal industry and our company.”
Financial Summary
Revenue for third quarter 2015 was $636,388, a decrease of $599,879 or 48.5% when compared to 2014.
Cost of goods sold for the current quarter was $503,301 compared to $954,499 in 2014, a decrease of 47.3%.
Gross profit for the third quarter of 2015 was $133,087, and decreased as a percentage of revenue to 20.9% from 22.8% in 2014.
Net loss for third quarter of 2015 was $82,913 compared to a net profit in the same quarter of 2014 of $326,209.
Earnings (loss) per diluted share was $0.00 a decrease of $0.01 from 2014.
Operating expenses decreased 33.9% as compared to the same quarter of fiscal 2014. Other expenses in the third quarter 2015 were $28,858 compared to other net income of $327,387 in 2014.
Cash used in operating activities for the nine months ended June 30, 2015 was $224,478 as compared to cash provided from operating activities of $78,142 during the same period in 2014. The cash used increase was a direct result of the $310,318 net loss incurred by the company during the nine months ended June 30, 2015. Cash flows provided by financing activities increased by $199,349 due to further drawdown under the company’s line of credit of $171,049 and net cash advance from Mr. Shrewsbury of $28,300. At June 30, 2015, the company had cash and cash equivalents of $44,812, a decrease of $27,972 when compared to September 30, 2014. Inventories and accounts payable decreased 7.9% and 14.8% respectively, compared to year end as a result of lower sales demand. Accounts receivable were $504,839 as of June 30, 2015, as compared to $502,617 as of September 30, 2014, an increase of 0.5%. To fund ongoing operations, the company continued to rely upon financing provided by its CEO, including a note and noninterest bearing advances aggregating approximately $2.08 million and a secured bank line of credit, of which $719,549 had been drawn upon at quarter end that is guaranteed by our CEO.
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, including in the U.S. coal industry; changes in regulations affecting the U.S. coal mining industry and U.S. coal-fired power plants; 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.
Contact:
William “Buck” Shrewsbury
Chairman and CEO
TX Holdings, Inc.
(606) 928-1131
| TX HOLDINGS, INC. |
| CONSOLIDATED BALANCE SHEETS |
| June 30, 2015 and September 30, 2014 |
| Unaudited | ||||||||
| June 30, | September 30, | |||||||
| 2015 | 2014 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 44,812 | $ | 72,784 | ||||
| Accounts receivable, net of allowance for doubtful accounts of $32,343 as of 6/30/15 and 9/30/14 | 504,839 | 502,617 | ||||||
| Inventory | 2,545,243 | 2,762,535 | ||||||
| Commission advances | 36,460 | – | ||||||
| Note receivable-current | 10,000 | 10,000 | ||||||
| Other current assets | 28,032 | 45,327 | ||||||
| Total current assets | 3,169,386 | 3,393,263 | ||||||
| Property and equipment, net | 67,441 | 72,530 | ||||||
| Note receivable, less current portion | 19,983 | 21,289 | ||||||
| Other assets | 500 | – | ||||||
| Total Assets | $ | 3,257,310 | $ | 3,487,082 | ||||
| LIABILITIES AND STOCKHOLDERS’ DEFICIT | ||||||||
| Current liabilities: | ||||||||
| Accrued liabilities | $ | 643,497 | $ | 606,099 | ||||
| Accounts payable | 898,355 | 1,054,556 | ||||||
| Advances from stockholder/officer | 71,637 | 43,337 | ||||||
| Bank-line of credit | 719,549 | 548,500 | ||||||
| Total current liabilities | 2,333,038 | 2,252,492 | ||||||
| Note payable to a stockholder | 2,000,000 | 2,000,000 | ||||||
| Total Liabilities | 4,333,038 | 4,252,492 | ||||||
| Commitments and contingencies | ||||||||
| Stockholder’s 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, 2015 and September 30, 2014 | 9,293,810 | 9,293,810 | ||||||
| Additional paid-in capital | 4,320,982 | 4,320,982 | ||||||
| Accumulated deficit | (14,690,520 | ) | (14,380,202 | ) | ||||
| Total stockholders’ deficit | (1,075,728 | ) | (765,410 | ) | ||||
| Total Liabilities and Stockholders’ Deficit | $ | 3,257,310 | $ | 3,487,082 | ||||
| TX HOLDINGS, INC. |
| CONSOLIDATED STATEMENTS OF OPERATIONS |
| For the Three and Nine Months Ended June 30, 2015 and 2014 |
| Unaudited | ||||||||||||||||
| THREE MONTHS ENDED | NINE MONTHS ENDED | |||||||||||||||
| June 30, | June 30, | June 30, | June 30, | |||||||||||||
| 2015 | 2014 | 2015 | 2014 | |||||||||||||
| Revenue | $ | 636,388 | $ | 1,236,267 | $ | 2,229,033 | $ | 3,340,715 | ||||||||
| Cost of goods sold | 503,301 | 954,499 | 1,810,712 | 2,432,360 | ||||||||||||
| Gross profit | 133,087 | 281,768 | 418,321 | 908,355 | ||||||||||||
| Operating expenses, except items shown separately below: | 116,356 | 140,717 | 406,268 | 371,871 | ||||||||||||
| Commission expense | 52,553 | 109,144 | 158,486 | 379,460 | ||||||||||||
| Professional fees | 14,201 | 30,386 | 72,511 | 141,070 | ||||||||||||
| Depreciation expense | 4,032 | 2,699 | 9,238 | 7,439 | ||||||||||||
| Total operating expenses | 187,142 | 282,946 | 646,503 | 899,840 | ||||||||||||
| Income (loss) from operations | (54,055 | ) | (1,178 | ) | (228,182 | ) | 8,515 | |||||||||
| Other income and (expense): | ||||||||||||||||
| Legal Settlement | – | 374,025 | – | 374,025 | ||||||||||||
| Gain on extinguishment of accounts payable | – | – | – | 93,167 | ||||||||||||
| Gain on sale of property and equipment | – | – | – | 10,807 | ||||||||||||
| Bad debt expense | – | (18,350 | ) | (18,350 | ) | |||||||||||
| Other income | 2,952 | – | 15,505 | – | ||||||||||||
| Interest expense | (31,810 | ) | (28,288 | ) | (97,641 | ) | (71,054 | ) | ||||||||
| Total other income and (expenses), net | (28,858 | ) | 327,387 | (82,136 | ) | 388,595 | ||||||||||
| Income (loss) before provision for income taxes | $ | (82,913 | ) | $ | 326,209 | $ | (310,318 | ) | $ | 397,110 | ||||||
| Provision for income taxes | – | 133,745 | – | 162,815 | ||||||||||||
| Utilization of net operating loss carry forward | – | (133,745 | ) | – | (162,815 | ) | ||||||||||
| Net income (loss) | $ | (82,913 | ) | $ | 326,209 | $ | (310,318 | ) | $ | 397,110 | ||||||
| Net earnings (loss) per common share | ||||||||||||||||
| Basic and Diluted | $ | 0.00 | $ | 0.01 | $ | (0.01 | ) | $ | 0.01 | |||||||
| Weighted average of common shares outstanding- | ||||||||||||||||
| Basic | 48,053,084 | 48,053,084 | 48,053,084 | 48,053,084 | ||||||||||||
| Diluted | 48,053,084 | 48,053,084 | 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 Nine Months Ended June 30, 2015 and 2014 |
| (Unaudited) | (Unaudited) | |||||||
| June 30, | June 30, | |||||||
| 2015 | 2014 | |||||||
| Cash flows used in operating activities: | ||||||||
| Net income (loss) | $ | (310,318 | ) | $ | 397,110 | |||
| Adjustments to reconcile net income (loss) to net cash used in operating activities: | ||||||||
| Depreciation expense | 9,238 | 7,439 | ||||||
| Bad debt reserve | – | 18,350 | ||||||
| Fair value of warrants issued to an officer | – | 14,971 | ||||||
| Gain on extinguishment of accounts payable | – | (93,167 | ) | |||||
| Gain on sale of property and equipment | – | (10,807 | ) | |||||
| Changes in operating assets and liabilities: | ||||||||
| Inventory | 217,292 | (459,867 | ) | |||||
| Commission advances | (36,460 | ) | 3,546 | |||||
| Accounts receivable | (2,222 | ) | (251,388 | ) | ||||
| Other current assets | 17,295 | (14,515 | ) | |||||
| Accrued liabilities | 31,398 | 38,626 | ||||||
| Accounts payable | (156,201 | ) | 409,644 | |||||
| Other assets | (500 | ) | 200 | |||||
| Stockholder/officer advances for operations | 6,000 | 18,000 | ||||||
| Net cash used in operating activities | (224,478 | ) | 78,142 | |||||
| Cash flows provided by (used in) investing activities: | ||||||||
| Note receivable | 1,306 | 2,866 | ||||||
| Purchase of equipment | (4,149 | ) | (38,809 | ) | ||||
| Proceeds received on sale of equipment | – | 18,000 | ||||||
| Net cash provided by (used in) investing activities | (2,843 | ) | (17,943 | ) | ||||
| Cash flows provided by (used in) financing activities: | ||||||||
| Proceeds from bank line of credit | 171,049 | – | ||||||
| Proceeds from stockholder/officer advances | 64,300 | 24,450 | ||||||
| Repayment of stockholder/officer advances | (36,000 | ) | (110,850 | ) | ||||
| Net cash provided by (used in) financing activities | 199,349 | (86,400 | ) | |||||
| Decrease in cash and cash equivalents | (27,972 | ) | (26,201 | ) | ||||
| Cash and cash equivalents at beginning of period | 72,784 | 175,028 | ||||||
| Cash and cash equivalents at end of period | $ | 44,812 | $ | 148,827 | ||||
| Non-cash investing and financing activities: | ||||||||
| Accrued interest exchanged for notes payable to a stockholder | $ | – | $ | 262,157 | ||||
| Advances from stockholder exchanged for notes payable to stockholder | $ | – | $ | 385,846 | ||||
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