ASHLAND, KY--(Marketwired - Jul 22, 2013) - TX Holdings, Inc. (
- Third quarter revenue increased 67% as compared to last year's third quarter revenue
- Second back-to-back quarter in which company has reported net income
- Revenue for the first nine months of 2013 increased 68% as compared to last year
- Net income for the third quarter of 2013 of $185,999 as compared to last year's third quarter net loss of $202,738
- Net income for the first nine months of 2013 of $123,676 as compared to a net loss of $413,655 for the first nine months of 2012
- Gross profit in the third quarter increased 233% as compared to the third quarter of 2012
- Gross profit for the first nine months of 2013 increased 163% as compared to the first nine months of 2012
TX Holdings, Inc. (
Net income in the third quarter was $185,999 as compared to a net loss of $202,738 for the same period in 2012. Net income for the first nine months of 2013 was $123,676 compared to a net loss of $413,655 for the same period in 2012.
During the third quarter, cost of goods sold was $823,892 as compared to cost of goods sold of $645,455 for the same period in 2012, an increase of $178,437 or 27.6% as a result of higher sales volumes. During the first nine months of 2013, cost of goods sold was $2,097,649 as compared to cost of goods sold of $1,459,208 for the same period in 2012, an increase of $638,441 or 43.8 %, a result of increased in sales volume as the company continues to expand its products and customer base.
Operating expenses for the third quarter of 2013 were $309,303 as compared to $316,883 for the same period in 2012, a decrease of 2.4%. Operating expenses for the first nine months of 2013 were $783,011 as compared to $744,428 for the same period in 2012, an increase of 5.2%.
Other expense was $11,456 for the first three months of 2013 as compared to $37,932 in the comparable period last year. Other expense was $56,635 for the first nine months of 2013 as compared to $36,067 for the comparable period in 2012, an increase of 57%.
Net increase in cash during the first nine months of 2013 was $18,375 as compared to $11,924 in 2012. Cash used in operating activities of $415,982 and resulted from the continued effort by the company to increase inventory to meet projected increases in sales demand. To fund ongoing operations, the company continues to rely upon financing provided by its CEO, William "Buck" Shrewsbury, in the form of a $1.062 million revolving demand note, a demand note in the amount of $289,997, and advances in the amount of $523,583, and a bank line of credit in the amount of $250,000.
Mr. Shrewsbury stated that "Our earnings in the latest period have resulted in a strengthening of our balance sheet and our decision to enter the rail and mining supplies business is proving to have been fortuitous. The new field that we are involved in is consumables used in the production of coal. We believe our products are being accepted by the coal mining industry and we anticipate expanding our operations into other mining supplies products.
Mr. Shrewsbury commented, "We are pleased with our 3rd quarter sales as it is our second consecutive quarter with positive net income. We are continuing our commitment to our shareholders by concentrating on increasing revenue as well as margins thereby increasing shareholder value. We are also continuing our commitment to our customers by providing quality products at competitive prices thus creating customer loyalty."
Mr. Shrewsbury concluded that "Our outlook for the company going into the 4th quarter of 2013 and into 2014 continues to move in a positive direction."
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; the company's failure to meet growth and productivity objectives, a failure of the company's innovation initiatives; risks from investing in growth opportunities; fluctuations in financial results and purchases, impact of local legal, economic, political and health conditions; adverse effects from environmental matters and tax matters; ineffective internal controls; the company's use of accounting estimates; the company's ability to attract and retain key personnel and its reliance on critical skills; impacts of relationships with critical suppliers; currency fluctuations and customer financing risks; impact of changes in market liquidity conditions and customer credit risk on receivables; reliance on third party distribution channels; SEC 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 the company's Forms 10-Q, Form 10-K and in the company's other filings with the U.S. Securities and Exchange Commission (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. The company assumes no obligation to update or revise any forward-looking statements. 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 the company 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 it at certain times.
| TX HOLDINGS, INC | |||||||||||
| CONDENSED BALANCE SHEETS | |||||||||||
| June 30, 2013 and September 30, 2012 | |||||||||||
| Unaudited | Unaudited | ||||||||||
| June 30, | September 30, | ||||||||||
| 2013 | 2012 | ||||||||||
| ASSETS | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | 21,510 | $ | 3,135 | |||||||
| Accounts Receivable, net | 306,278 | 200,275 | |||||||||
| Inventory | 1,681,241 | 771,977 | |||||||||
| Commission advances | 31,781 | 56,375 | |||||||||
| Notes receivable-current | 10,000 | 10,000 | |||||||||
| Other current assets | 36,876 | 43,771 | |||||||||
| Total current assets | 2,087,686 | 1,085,533 | |||||||||
| Property and equipment | 50,606 | 55,797 | |||||||||
| Notes receivable, less current portion | 27,380 | 30,000 | |||||||||
| Other | 200 | 50,200 | |||||||||
| Total Assets | $ | 2,165,872 | $ | 1,221,530 | |||||||
| LIABILITIES AND STOCKHOLDERS' DEFICIT | |||||||||||
| Current liabilities: | |||||||||||
| Notes payable to a stockholder | $ | 1,351,997 | $ | 1,351,997 | |||||||
| Accrued liabilities | 807,432 | 788,185 | |||||||||
| Accounts payable | 561,073 | 279,655 | |||||||||
| Advances from stockholder/officer | 523,583 | 307,082 | |||||||||
| Bank-line of credit | 248,500 | -- | |||||||||
| Total current liabilities | 3,492,585 | 2,726,919 | |||||||||
| Asset retirement obligation | -- | 5,000 | |||||||||
| Total Liabilities | 3,492,585 | 2,731,919 | |||||||||
| Commitments and contingencies (Note 3) | |||||||||||
| Stockholders' deficit: | |||||||||||
| Preferred stock: no par value, 1,000,000 shares authorized, no shares outstanding as of June 30, 2013 and September 30, 2012 | -- | -- | |||||||||
| Common stock: no par value, 250,000,000 shares authorized, 48,053,084 and 46,553,084 shares issued and outstanding at June 30, 2013 and September 30, 2012 respectively. | 9,293,810 | 9,233,810 | |||||||||
| Additional paid-in capital | 4,304,280 | 4,304,280 | |||||||||
| Accumulated deficit | (14,924,803 | ) | (15,048,479 | ) | |||||||
| Total stockholders' deficit | (1,326,713 | ) | (1,510,389 | ) | |||||||
| Total Liabilities and Stockholders' Deficit | $ | 2,165,872 | $ | 1,221,530 | |||||||
| The accompanying notes are an integral part of these financial statements. | |||||||||||
| TX HOLDINGS, INC. | ||||||||||||||||||
| UNAUDITED STATEMENTS OF OPERATIONS | ||||||||||||||||||
| For the Three and Nine Months Ended June 30, 2013 and 2012 | ||||||||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||||
| June 30, | June 30, | June 30, | June 30, | |||||||||||||||
| 2013 | 2012 | 2013 | 2012 | |||||||||||||||
| Revenue | $ | 1,330,650 | $ | 797,532 | $ | 3,060,971 | $ | 1,826,048 | ||||||||||
| Cost of goods sold | 823,892 | 645,455 | 2,097,649 | 1,459,208 | ||||||||||||||
| Gross profit | 506,758 | 152,077 | 963,322 | 366,840 | ||||||||||||||
| Operating expenses, except items shown separately below | 106,557 | 124,924 | 315,301 | 331,637 | ||||||||||||||
| Commission expense | 170,145 | 109,004 | 338,910 | 183,202 | ||||||||||||||
| Professional fees | 28,156 | 80,224 | 115,465 | 195,939 | ||||||||||||||
| Stock-Based Compensation | -- | -- | -- | 27,040 | ||||||||||||||
| Depreciation expense | 4,445 | 2,731 | 13,335 | 6,610 | ||||||||||||||
| Total operating expenses | 309,303 | 316,883 | 783,011 | 744,428 | ||||||||||||||
| Income (loss) from operations | 197,455 | (164,806 | ) | 180,311 | (377,588 | ) | ||||||||||||
| Other income and (expense): | ||||||||||||||||||
| Gain on extinguishment of debt | 32,458 | -- | 32,458 | 62,719 | ||||||||||||||
| Gain/Loss on disposal of fixed assets | -- | (12,064 | ) | 500 | (12,064 | ) | ||||||||||||
| Bad Debt Expense | (20,993 | ) | -- | (20,993 | ) | -- | ||||||||||||
| Other income | 3,743 | -- | 7,506 | |||||||||||||||
| Interest expense | (22,921 | ) | (29,611 | ) | (68,600 | ) | (94,228 | ) | ||||||||||
| Total other income and (expense), net | (11,456 | ) | (37,932 | ) | (56,635 | ) | (36,067 | ) | ||||||||||
| Net income/(loss) | $ | 185,999 | $ | (202,738 | ) | $ | 123,676 | $ | (413,655 | ) | ||||||||
| Gain/(loss) per common share | ||||||||||||||||||
| Basic | $ | -- | $ | -- | $ | -- | $ | -- | ||||||||||
| Diluted | -- | -- | -- | -- | ||||||||||||||
| Total | $ | -- | $ | -- | $ | -- | $ | -- | ||||||||||
| Weighted average number of common shares outstanding | ||||||||||||||||||
| Basic | 48,053,084 | 49,547,338 | 47,838,898 | 52,016,733 | ||||||||||||||
| Diluted | -- | -- | -- | -- | ||||||||||||||
| Total | 48,053,084 | 49,547,338 | 47,838,898 | 52,016,733 | ||||||||||||||
| The accompanying notes are an integral part of these financial statements. | ||||||||||||||||||
| TX HOLDINGS INC. | |||||||||||||||
| UNAUDITED STATEMENT OF CHANGES IN STOCKHOLDERS' DEFICIT | |||||||||||||||
| For Nine Months Ended June 30, 2013 | |||||||||||||||
| Additional | |||||||||||||||
| Common Stock | Paid in | Accumulated | |||||||||||||
| Shares | Amount | Capital | Deficit | Total | |||||||||||
| Balance at | |||||||||||||||
| September 30, 2012 | 46,553,084 | $ | 9,233,810 | $ | 4,304,280 | $ | (15,048,479 | ) | $ | (1,510,389 | ) | ||||
| Common Stock issued for professional service | 1,500,000 | 60,000 | 60,000 | ||||||||||||
| Net Income | 123,676 | 123,676 | |||||||||||||
| Balance at | |||||||||||||||
| June 30, 2013 | 48,053,084 | $ | 9,293,810 | $ | 4,304,280 | $ | (14,924,803 | ) | $ | (1,326,713 | ) | ||||
| The accompanying notes are an integral part of these financial statements. | |||||||||||||||
| TX HOLDINGS, INC. | ||||||||||
| UNAUDITED STATEMENTS OF CASH FLOWS | ||||||||||
| For the Nine Months Ended June 30, 2013 and 2012 | ||||||||||
| Nine Months Ended | ||||||||||
| June 30, 2013 | June 30, 2012 | |||||||||
| Cash flows used by operating activities: | ||||||||||
| Net income/(loss) | $ | 123,676 | $ | (413,655 | ) | |||||
| Adjustments to reconcile net income/(loss) to net cash used in operating activities: | ||||||||||
| Depreciation expense | 13,335 | 6,610 | ||||||||
| Bad debt reserve | 20,993 | -- | ||||||||
| Gain on extinguishment of debt | (32,458 | ) | (62,719 | ) | ||||||
| Loss on settlement of accounts payable | 10,116 | -- | ||||||||
| Loss on sale of fixed assets | -- | 12,064 | ||||||||
| Gain on sale of equipment | (500 | ) | -- | |||||||
| Accounting for warrants issued to an officer and the Board | -- | 27,040 | ||||||||
| Changes in operating assets and liabilities: | ||||||||||
| Commission advances | 24,594 | (51,315 | ) | |||||||
| Deposits | 50,000 | (200 | ) | |||||||
| Accounts receivable | (126,996 | ) | (433,033 | ) | ||||||
| Inventories | (909,264 | ) | (900,847 | ) | ||||||
| Other current assets | 6,895 | -- | ||||||||
| Accounts payable | 331,302 | 334,691 | ||||||||
| Accrued liabilities | 51,705 | 284,849 | ||||||||
| Notes Receivable | 2,620 | -- | ||||||||
| Stockholder advances for operations | 18,000 | -- | ||||||||
| Net cash used in operating activities | (415,982 | ) | (1,196,515 | ) | ||||||
| Cash flows used in investing activities: | ||||||||||
| Proceeds received on sale of equipment | 500 | 40,000 | ||||||||
| Purchase of equipment | (13,144 | ) | (19,000 | ) | ||||||
| Net cash used in investing activities | (12,644 | ) | 21,000 | |||||||
| Cash flows provided by financing activities: | ||||||||||
| Proceeds from line of credit | 248,500 | -- | ||||||||
| Proceeds from stockholder/officer advances | 284,501 | 1,237,439 | ||||||||
| Payments of stockholders advances | (86,000 | ) | (50,000 | ) | ||||||
| Net cash provided by financing activities | 447,001 | 1,187,439 | ||||||||
| Increase in cash and cash equivalents | 18,375 | 11,924 | ||||||||
| Cash and cash equivalents at beginning of period | 3,135 | 3,019 | ||||||||
| Cash and Cash Equivalents at end of period | $ | 21,510 | $ | 14,943 | ||||||
| Non-cash investing and financing activities: | ||||||||||
| Accounts payable exchanged for common stock | $ | 49,884 | -- | |||||||
| Increase in notes payable to a stockholder from reclass from Advances from stockholder/officer | -- | $ | (1,062,000 | ) | ||||||
| Decrease in property and equipment from recognition of asset retirement obligation | -- | $ | 18,012 | |||||||
| The accompanying notes are an integral part of these financial statements. | ||||||||||
Contact: William "Buck" Shrewsbury Chairman and CEO TX Holdings, Inc. (606) 928-1131
