TX Holdings, Inc., (OTC QB:TXHG) a supplier of mining and rail products to the U.S. coal mining industry, today announced financial results for its 2014 third fiscal quarter. During the 2014 third fiscal quarter, the company reported quarterly revenue of $1,236,267 versus $1,330,650 for the quarter ended June 30, 2013. Income from operations during the third quarter of fiscal 2014 was ($1,178) versus income from operations of $197,455 during the comparable quarter of 2013. Net income rose to $326,209 during the quarter ended June 30, 2014 from $185,999 for the comparable quarter of 2013, representing a 75.5% increase.
- Revenue for quarter ended June 30, 2014 decreased 7.1% as compared to the quarter ended June 30, 2013
- Income from operations decreased 100.6% as compared to the quarter ended June 30, 2013
- Net income increased 75.5% as compared to the quarter ended June 30, 2013
“We continue to forge ahead with our strategic objectives of garnering increased recognition for our product line, maintaining and growing customer relationships, and expanding geographically. Additionally, as announced in a Form 8-K filed with the Securities and Exchange Commission on May 27, 2014, we were successful in reaching a settlement in a long standing legal matter aggregating $374,025. This settlement had a direct and positive impact on the company concurrently eliminating legal expenses associated with litigation.”
Third Fiscal Quarter of 2014 – Financial Summary
Revenue for the three months ended June 30, 2014 was $1,236,267 as compared to $1,330,650 for the same period in 2013, a decrease of $94,383 or 7.1%.
Cost of goods sold was $954,499 as compared to cost of goods sold of $823,892 for the same period in 2013, an increase of $130,607 or 15.9%.
Gross profit for the quarter ended June 30, 2014 decreased as a percentage of revenue to 22.8% from 38.1% for the same period in the prior year.
Operating expenses for the three months ended June 30, 2014 were $282,946 as compared to $309,303 for the three months ended June 30, 2013, a decrease of $26,357 or 8.5%. Commission expense was $109,144 compared to $170,145 for the same period in 2013, a decrease of $61,001 or 35.8%. Other operating expenses increased by $34,160 or 32.1% compared to the same period in 2013.
Loss from operations for the quarter ended June 30, 2014, was $1,178 compared to income from operations of $197,455 during the same period in 2013, a decrease of $198,633 or 100.6%.
At June 30, 2014, cash and cash equivalents were $148,827 as compared to $175,028 at September 30, 2013. Cash provided by operating activities during the nine months ended June 30, 2014 was $78,142 compared to cash used in operations of $418,602 during the same period in 2013. Cash used in investing activities for the nine months ended June 30, 2014 was $20,809 compared to cash used in investing activities of $12,644 for the nine months ended June 30, 2013. During the nine months ended June 30, 2014, cash used in financing activities was $83,534 compared to cash provided by financing activities of $449,621 during the same period in 2013.
Accounts receivable were $658,968 as of June 30, 2014 as compared to $425,930 as of the year ended September 30, 2013, an increase of 54.7%.
Inventory was $2,309,854 as of June 30, 2014, an increase of 24.9% as compared to the year ended September 30, 2013. The increase was the result of management’s decision to increase inventory levels and purchase of new inventory products to meet anticipated higher sales demand.
“I look forward to speaking with our shareholders and going into greater detail regarding highlights of the quarter and our go-forward plan today at 10:30am EDT in the Company’s Third Quarter Teleconference,” stated William “Buck” Shrewsbury, CEO & Chairman of the Board.
You can participate in the conference call by dialing the following numbers:
In the U.S and Canada 888-510-1785
Outside the U.S. 719-325-2362
Participant Passcode 6808599
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.
Cynthia DeMonte LLC
William “Buck” Shrewsbury
Chairman and CEO
TX Holdings, Inc.