TX Holdings Reports Second Quarter Results for 2017 Fiscal Year
28 April 2017 - 10:00PM
Access Wire
ASHLAND, KY / ACCESSWIRE / April 28, 2017 / 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 the second quarter of fiscal 2017. During the
2017 second fiscal quarter, the company reported quarterly revenue
of $923,403, a 63.5% increase when compared to the same quarter in
the prior year. Net loss for the second quarter of fiscal 2017 was
$54,059, an increase of $2,955 when compared to a net loss of
$51,104 for the same period in the prior year.
Mr. Shrewsbury, the company's CEO and Chairman, stated, "We are
encouraged by our current quarter sales demand increase, we
continue to seek expansion in our customer base, and prior
customers' mines have started to re-open, contributing to recent
higher sales in our rail, as well as our mining related products.
The recent energy outlook by The U.S. Energy Information
Administration has reported an expected increase in coal-fired
electricity generation to contribute a 4% and 2% increase in coal
production on 2017 and 2018, respectively, denoting a positive turn
in the coal mining industry."
Second Quarter 2017 Financial Summary
Revenue for second quarter 2017 was $923,403, an increase of
$358,490, or 63.5%, compared to 2016.
Cost of goods sold for the current quarter was $804,9642,
compared to $394,611 in 2016, an increase of 104.0%.
Gross profit for the second quarter of 2017 was $118,439, and
decreased as a percentage of revenue to 12.8% from 30.1% compared
to 2016.
Net loss for second quarter 2017 was $54,059, compared to a net
loss in the same quarter of 2016 of $51,104.
Earnings (loss) per diluted share was $0.00, remaining unchanged
from 2016.
Operating expenses decreased 25.5%, as compared to the same
quarter of fiscal 2016. Other expenses in the second quarter 2017
were $29,764, compared to other expense of $29,744 in 2016.
Cash provided by operating activities for the three months ended
March 31, 2017 was $36,366, as compared to cash used in operating
activities of $124,484 during same period in 2016. The increase was
a direct result of an increase in accounts payable of $208,265 and
a decrease in inventory of $302,491 partially offset by an increase
in accounts receivable of $425,783 during the three months ended
March 31, 2017. Cash flows used by financing activities decreased
by $17,227 due to payment on our term loan of $24,427 and a net
advance from stockholder/officer of $7,200. At March 31, 2017, the
company had cash and cash equivalents of $22,201, an increase of
$19,139 when compared to 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.
Contact:
William "Buck" Shrewsbury
Chairman and CEO
TX Holdings, Inc.
(606) 928-1131
TX HOLDINGS, INC.
CONSOLIDATED
BALANCE SHEETS
March 31, 2017 and September 30,
2016
|
|
Unaudited
|
|
|
|
March 31,
|
|
|
September 30,
|
|
|
|
2017
|
|
|
2016
|
|
ASSETS
|
|
|
|
|
(Reclassified)
|
|
Current assets:
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$ |
22,201 |
|
|
$ |
3,062 |
|
Accounts receivable, net of allowance for doubtful
|
|
|
|
|
|
|
|
|
accounts of $113,643 at March 31, 2017 and September 30, 2016
|
|
|
660,280 |
|
|
|
235,402 |
|
Inventory
|
|
|
1,503,527 |
|
|
|
1,806,018 |
|
Commission advances
|
|
|
48,406 |
|
|
|
68,718 |
|
Note receivable-current
|
|
|
10,000 |
|
|
|
10,000 |
|
Other current assets
|
|
|
1,337 |
|
|
|
136 |
|
Total current assets
|
|
|
2,245,751 |
|
|
|
2,123,336 |
|
|
|
|
|
|
|
|
|
|
Inventory, non-current
|
|
|
300,000 |
|
|
|
300,000 |
|
Property and equipment, net
|
|
|
51,881 |
|
|
|
56,779 |
|
Note receivable, less current portion
|
|
|
19,983 |
|
|
|
19,983 |
|
Other
|
|
|
500 |
|
|
|
500 |
|
Total Assets
|
|
$ |
2,618,115 |
|
|
$ |
2,500,598 |
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' DEFICIT
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
Accrued liabilities
|
|
$ |
872,248 |
|
|
$ |
831,053 |
|
Accounts payable
|
|
|
833,352 |
|
|
|
625,087 |
|
Advances from officer
|
|
|
205,837 |
|
|
|
198,637 |
|
Bank-term loan-current portion
|
|
|
69,011 |
|
|
|
61,430 |
|
Total current liabilities
|
|
|
1,980,448 |
|
|
|
1,716,207 |
|
|
|
|
|
|
|
|
|
|
Bank-term-loan, less current portion
|
|
|
568,674 |
|
|
|
600,682 |
|
Note payable to officer
|
|
|
2,000,000 |
|
|
|
2,000,000 |
|
Total Liabilities
|
|
|
4,549,122 |
|
|
|
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 March 31, 2017 and September 30, 2016
|
|
|
9,293,810 |
|
|
|
9,293,810 |
|
Additional paid-in capital
|
|
|
4,321,329 |
|
|
|
4,321,329 |
|
Accumulated deficit
|
|
|
(15,546,146 |
) |
|
|
(15,431,430 |
) |
Total stockholders' deficit
|
|
|
(1,931,007 |
) |
|
|
(1,816,291 |
) |
Total Liabilities and Stockholders' Deficit
|
|
$ |
2,618,115 |
|
|
$ |
2,500,598 |
|
TX HOLDINGS, INC.
CONSOLIDATED
STATEMENTS OF OPERATIONS
For the Three Months
and Six Months Ended March 31, 2017 and March 31,
2016
|
Unaudited
|
|
|
THREE MONTHS ENDED
|
|
|
SIX MONTHS ENDED
|
|
|
|
March 31,
|
|
|
March 31,
|
|
|
March 31,
|
|
|
March 31,
|
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$ |
923,403 |
|
|
$ |
564,913 |
|
|
$ |
1,420,320 |
|
|
$ |
1,347,178 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of goods sold
|
|
|
(804,964 |
) |
|
|
(394,611 |
) |
|
|
(1,201,777 |
) |
|
|
(938,457 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
|
118,439 |
|
|
|
170,302 |
|
|
|
218,543 |
|
|
|
408,721 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses, except items shown
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
separately below
|
|
|
103,892 |
|
|
|
133,597 |
|
|
|
201,836 |
|
|
|
254,297 |
|
Commission expense
|
|
|
32,839 |
|
|
|
35,541 |
|
|
|
56,356 |
|
|
|
63,373 |
|
Professional fees
|
|
|
3,554 |
|
|
|
20,075 |
|
|
|
7,620 |
|
|
|
41,421 |
|
Bad debt expense
|
|
-
|
|
|
-
|
|
|
|
905 |
|
|
|
1,926 |
|
Depreciation expense
|
|
|
2,449 |
|
|
|
2,449 |
|
|
|
4,898 |
|
|
|
4,898 |
|
Total operating expenses
|
|
|
142,734 |
|
|
|
191,662 |
|
|
|
271,615 |
|
|
|
365,915 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from operations
|
|
|
(24,295 |
) |
|
|
(21,360 |
) |
|
|
(53,072 |
) |
|
|
42,806 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
(29,764 |
) |
|
|
(29,744 |
) |
|
|
(61,644 |
) |
|
|
(63,278 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total other expense
|
|
|
(29,764 |
) |
|
|
(29,744 |
) |
|
|
(61,644 |
) |
|
|
(63,278 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
$ |
(54,059 |
) |
|
$ |
(51,104 |
) |
|
$ |
(114,716 |
) |
|
$ |
(20,472 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings (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 |
|
The accompanying notes are an integral part of the consolidated
financial statements.
TX HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Six Months Ended March 31, 2017 and 2016
|
|
(Unaudited)
|
|
|
|
March 31,
|
|
|
March 31,
|
|
|
|
2017
|
|
|
2016
|
|
Cash flows provided/(used) in operating
activities:
|
|
|
|
|
|
|
Net loss
|
|
$ |
(114,716 |
) |
|
$ |
(20,472 |
) |
Adjustments to reconcile loss to net cash used
|
|
|
|
|
|
|
|
|
in operating activities:
|
|
|
|
|
|
|
|
|
Depreciation expense
|
|
|
4,898 |
|
|
|
4,898 |
|
Bad debt expense
|
|
|
905 |
|
|
|
1,926 |
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
Accounts receivable
|
|
|
(425,783 |
) |
|
|
63,173 |
|
Inventory
|
|
|
302,491 |
|
|
|
(165,635 |
) |
Commission advances
|
|
|
20,312 |
|
|
|
(7,173 |
) |
Other current assets
|
|
|
(1,201 |
) |
|
|
1,538 |
|
Accrued liabilities
|
|
|
23,195 |
|
|
|
29,305 |
|
Accounts payable
|
|
|
208,265 |
|
|
|
(44,044 |
) |
Stockholder/officers advances for operations
|
|
|
18,000 |
|
|
|
12,000 |
|
Net cash provided/(used) in operating activities
|
|
|
36,366 |
|
|
|
(124,484 |
) |
|
|
|
|
|
|
|
|
|
Cash flows provided/(used) in investing
activities:
|
|
|
|
|
|
|
|
|
Net cash provided/(used) in investing activities
|
|
-
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
Cash flows provided/(used) by financing
activities:
|
|
|
|
|
|
|
|
|
Payment on Term Loan
|
|
|
(24,427 |
) |
|
|
(14,438 |
) |
Repayment of bank line of credit
|
|
-
|
|
|
|
(1,073 |
) |
Proceeds from officer advances
|
|
|
106,000 |
|
|
|
79,800 |
|
Repayment of officer advances
|
|
|
(98,800 |
) |
|
-
|
|
Net cash provided/(used) by financing activities
|
|
|
(17,227 |
) |
|
|
64,289 |
|
|
|
|
|
|
|
|
|
|
Increase/(decrease) in cash and cash equivalents
|
|
|
19,139 |
|
|
|
(60,195 |
) |
Cash and cash equivalents at beginning of period
|
|
|
3,062 |
|
|
|
61,564 |
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at end of period
|
|
$ |
22,201 |
|
|
$ |
1,369 |
|
|
|
|
|
|
|
|
|
|
Supplemental Disclosure of Cash Flow Information
|
|
|
|
|
|
|
|
|
|
Cash paid during the year for interest
|
|
$ |
10,374 |
|
|
$ |
63,278 |
|
|
|
|
|
|
|
|
|
|
Suppemental Schedule of Non-Cash investing and Financing
Activities
|
|
|
|
|
|
|
|
|
|
Payments of line of credit through issuance of note payable
|
|
-
|
|
|
$ |
711,376 |
|
SOURCE: TX Holdings, Inc.
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