T.J.T., Inc. (the Company), (Pink Sheets:AXLE) –T.J.T., Inc., a major supplier of axles, tires, and set-up supplies to the manufactured housing industry announced a net loss of $194,000, or $.04 per diluted share, for the third quarter of fiscal year 2012. Established in 1977, T.J.T., Inc. is a major provider of recycled axles and tires to the manufactured housing industry. It operates recycling facilities in Idaho and California and serves ten western states. In addition to the recycling business, T.J.T., Inc. also sells aftermarket products to manufactured housing, recreational vehicle, and residential markets.
Net sales decreased 40 percent in the three month period ending June 30, 2012 as compared to the same period a year ago. Net sales are down 23 percent for the nine month period ending June 30, 2012 as compared to the same period in 2011. Net sales of axles and tires decreased 52 percent quarter over quarter, while sales of accessories decreased 21 percent. Net sales of axles and tires decreased 31 percent in the first nine months of 2012 compared to 2011; net sales for accessories and siding decreased 17 percent in that same time period. Prior to closing in 2011, the Colorado and Washington facilities contributed sales of $227,000 and $695,000 for the three and nine month periods of 2011. The primary driver of the sales decrease in comparable facilities is competitive impacts.
Excluding Colorado, Washington, and motor carrier services, net sales in the three and nine month periods ending June 30, 2012 decreased 28% and 6%, respectively. On the same basis, the axle and tire segment sales decreased 38% and 8% for the same periods.
Gross margin increased to 36 percent during the third quarter of fiscal 2012 compared to 17 percent in the same quarter of 2011. Gross margin for the nine month period ending June 30, 2012 increased to 29 percent compared to 20 percent in 2011.
Selling, general, and administrative (SG&A) expense increased $47,000 and $234,000 during the three and nine month periods ended June 30, 2012, respectively, when compared to the same 2011 periods. SG&A as a percentage of sales increased 29 and 19 percentage points during the three and nine month periods compared to prior year. SG&A increased for the quarter despite recognizing savings of $65,000 incurred as a result of closing the Colorado facility. It increased by $234,000 for the nine month period in spite of recognizing the benefit of reversing the $107,000 liability associated with the Ulysses Mori case as result of a favorable Idaho Supreme Court ruling, savings of $213,000 incurred as a result of closing the Colorado and Washington facilities, and $58,000 in bad debt charges resulting from the Palm Harbor Homes bankruptcy filing during the first quarter of 2011. The increase in both periods includes the results of increased headcount, mainly the addition of full-time Corporate Executive Officers, and start-up costs associated with the Company’s new North Dakota facility.
The Company’s net loss for the quarter ending June 30, 2012 was $194,000 compared to a net loss of $346,000 for the same quarter a year ago. The net loss for the nine months ended June 30, 2012 was $808,000 compared to a net loss of $928,000 in the same nine month period a year ago. Improvements to net loss in the quarter include the 2012 benefit of $50,000 for receiving the final balloon payment on the sale of land held for investment and the 2011 impairment loss on real estate held for sale of $66,000. Improvements to the year-to-date net loss were driven by the $50,000 gain recognized on investment property in 2012, a 2011 impairment loss on real estate held for sale of $154,000, partially offset by $30,000 of income related to the Company selling its interest in Ladder Lift Systems, L.L.C. in 2011. The net loss for 2012 was also negatively impacted by increased administrative expenses and start-up costs associated with the new North Dakota facility.
The Company’s North Dakota operation began distributing recreational vehicle parts and providing associated repair services in the first quarter. During the third quarter the Company launched its Field Service Division to support the oil and gas industry by providing mobile shower and laundry services.
This release contains certain forward-looking statements, which are based on management’s current expectations including, but not limited to, general economic conditions, changes in interest rates, deposit flows, real estate values, competition, and changes in legislation or regulations, and other economic, competitive, governmental, regulatory, and technological factors affecting the Company’s operations, pricing, products, and services. Any forward looking statement speaks only as of the date on which the statement is made, and the Company undertakes no obligation to update any forward looking statement.
Copies of this report and additional financial information can be found at www.otcmarkets.com, or you may contact:
John R. Doherty
Chairman of the Board of Directors
T.J.T., Inc.
208-472-2500
| T.J.T., INC. | ||||||||
| BALANCE SHEETS (Unaudited) | ||||||||
| (Dollars in thousands) | ||||||||
| June 30 | Sept. 30 | |||||||
| 2012 | 2011 | |||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 892 | $ | 1,875 | ||||
Accounts receivable (net of allowances and discounts of $122 and $111) | 212 | 337 | ||||||
| Current portion of notes receivable | 6 | 74 | ||||||
| Inventories | 1,002 | 1,189 | ||||||
| Prepaid expenses and other current assets | 62 | 181 | ||||||
| Total current assets | 2,174 | 3,656 | ||||||
Property, plant and equipment, net of accumulated depreciation | 778 | 317 | ||||||
| Notes receivable, net of current portion | 25 | 29 | ||||||
| Real estate held for sale | 271 | 474 | ||||||
| Real estate held for investment | 378 | 167 | ||||||
| Other assets | 22 | 5 | ||||||
| Total assets | $ | 3,648 | $ | 4,648 | ||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 299 | $ | 244 | ||||
| Accrued liabilities | 124 | 286 | ||||||
| Deferred income | 0 | 69 | ||||||
| Total current liabilities | 423 | 599 | ||||||
| Shareholders' equity: | ||||||||
Preferred stock, $.001 par value; 5,000,000 shares authorized; 0 shares issued and outstanding | - | - | ||||||
Common stock, $.001 par value; 10,000,000 shares authorized; 4,532,862 shares outstanding | 5 | 5 | ||||||
| Capital surplus | 5,875 | 5,872 | ||||||
| Retained earnings | (2,621 | ) | (1,812 | ) | ||||
| 3,259 | 4,065 | |||||||
| Treasury shares, at cost, 81,113 and 46,735 shares, respectively | (34 | ) | (16 | ) | ||||
| Total shareholders' equity | 3,225 | 4,049 | ||||||
| Total liabilities and shareholders' equity | $ | 3,648 | $ | 4,648 | ||||
| T.J.T., INC. | ||||||||||||||||
| STATEMENTS OF OPERATION (Unaudited) | ||||||||||||||||
| (Dollars in thousands except per share amounts) | ||||||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||
| June 30, | June 30, | June 30, | June 30, | |||||||||||||
| 2012 | 2011 | 2012 | 2011 | |||||||||||||
| Sales (net of returns and allowances): | ||||||||||||||||
| Axles and tires | $ | 444 | $ | 933 | $ | 1,842 | $ | 2,652 | ||||||||
| Accessories and siding | 412 | 524 | 1,222 | 1,466 | ||||||||||||
| Other | 24 | - | 119 | - | ||||||||||||
| Total sales | 880 | 1,457 | 3,183 | 4,118 | ||||||||||||
| Cost of goods sold | ||||||||||||||||
Axles and tires | 289 | 846 | 1,455 | 2,319 | ||||||||||||
| Accessories and siding | 269 | 364 | 774 | 976 | ||||||||||||
| Other | 4 | - | 21 | - | ||||||||||||
| Cost of goods sold | 562 | 1,210 | 2,250 | 3,295 | ||||||||||||
| Gross profit | 318 | 247 | 933 | 823 | ||||||||||||
| Selling, general and administrative expenses | 583 | 536 | 1,895 | 1,661 | ||||||||||||
| Operating loss | (265 | ) | (289 | ) | (962 | ) | (838 | ) | ||||||||
| Impairment loss on real estate | - | (66 | ) | - | (154 | ) | ||||||||||
| Interest income, net of expense | 3 | 8 | 13 | 22 | ||||||||||||
| Equity investment income | - | - | - | 32 | ||||||||||||
| Rental income | 17 | - | 30 | 9 | ||||||||||||
| Gain (loss) on sale of assets | 51 | 1 | 111 | 1 | ||||||||||||
| Net loss | $ | (194 | ) | $ | (346 | ) | $ | (808 | ) | $ | (928 | ) | ||||
| Net loss to common shareholders: | ||||||||||||||||
| Basic | $ | (0.04 | ) | $ | (0.08 | ) | $ | (0.18 | ) | $ | (0.20 | ) | ||||
| Diluted | $ | (0.04 | ) | $ | (0.08 | ) | $ | (0.18 | ) | $ | (0.20 | ) | ||||
| Weighted average shares outstanding: | ||||||||||||||||
| Basic | 4,532,862 | 4,532,862 | 4,532,862 | 4,532,862 | ||||||||||||
| Diluted | 4,544,899 | 4,539,949 | 4,550,585 | 4,540,062 | ||||||||||||
| T.J.T., INC. | ||||||||
| STATEMENTS OF CASH FLOWS (Unaudited) | ||||||||
| (Dollars in thousands) | ||||||||
| For the nine months ended June 30, | 2012 | 2011 | ||||||
| Cash flows from operating activities: | ||||||||
| Net loss | $ | (808 | ) | $ | (928 | ) | ||
Adjustments to reconcile net loss to net cash used by operating activities: | ||||||||
| Depreciation and amortization | 60 | 52 | ||||||
| Impairment loss on real estate held for sale | - | 154 | ||||||
| Loss on sale of other assets held for sale | - | - | ||||||
| Gain on sale of assets | (112 | ) | (2 | ) | ||||
| Gain on sale of equity investment | - | (30 | ) | |||||
| Equity investment earnings | - | (2 | ) | |||||
| Stock compensation | 3 | 5 | ||||||
| Change in accounts receivables | 125 | 53 | ||||||
| Change in inventories | 187 | 600 | ||||||
| Change in prepaid expenses and other current assets | 119 | (23 | ) | |||||
| Change in accounts payable | 55 | (19 | ) | |||||
| Change in other assets and liabilities | (181 | ) | (5 | ) | ||||
| Net cash used by operating activities | (552 | ) | (145 | ) | ||||
| Cash flows from investing activities: | ||||||||
| Purchases of property, plant and equipment | (552 | ) | (24 | ) | ||||
| Repayments received on notes receivable | 72 | 8 | ||||||
| Proceeds from sale of assets | 75 | 8 | ||||||
| Proceeds from sale of equity investment | - | 30 | ||||||
| Investment in real estate held for investment and sale | (8 | ) | - | |||||
| Proceeds from sale of other assets held for sale | - | 5 | ||||||
| Net cash provided (used) by investing activities | (413 | ) | 27 | |||||
| Cash flows from financing activities: | ||||||||
| Purchase of treasury shares | (18 | ) | (16 | ) | ||||
| Net cash used by financing activities | (18 | ) | (16 | ) | ||||
| Net change in cash and cash equivalents | (983 | ) | (134 | ) | ||||
| Cash and cash equivalents at October 1 | 1,875 | 1,825 | ||||||
| Cash and cash equivalents at June 30 | $ | 892 | $ | 1,691 | ||||
Contacts:
John R. Doherty, Chairman of the Board of Directors,
208-472-2500
