T.J.T., Inc. Reports Higher Sales, Profitability in First Quarter
EMMETT, Idaho--Feb. 14, 2003--T.J.T., Inc. (OTCBB:AXLE), a recycler of axles and tires and wholesale distributor of O.E.M. parts and aftermarket material to the manufactured housing industry, today reported a 12 percent increase in sales for the first quarter ended December 31, 2002 and a small profit compared to a loss in the same year ago period."To attain profitability in the first quarter is an achievement for T.J.T.," said Terrence Sheldon, president and chief executive officer of T.J.T. "Historically, the first quarter is one of our toughest due to seasonal weather conditions."
Sales in the quarter rose to $4.9 million, up $523,000 from $4.4 million in last year's same quarter. A 16 percent increase in cost of goods sold was offset by lower selling, general and administrative expenses, resulting in net income of $6,000, or $0.001 per share, compared to a loss of $841,000, or $0.19 per share in the comparable year ago quarter including the effect of an accounting change.
"The sales gain stemmed, in part, from the addition of new manufacturing customers during the quarter," Sheldon said. "We're extremely pleased that, despite an 18 percent decrease in manufactured housing shipments in our market area quarter-over-quarter, that our market share continues to grow." Sheldon also noted that sales in the 2001 first quarter were negatively impacted by competition from the Bradley Group, comprised of former employees and shareholders of T.J.T. In January 2002, an injunction prohibited the Bradley Group from such competition.
Gross profit margin declined during the quarter to 21.1 percent of sales from 23.5 percent of sales, squeezed by increased costs to purchase used axles and tires and lower overall selling prices. At the same time, selling, general and administrative expenses, as a percentage of sales, fell to 21.1 percent from 27.6 percent a year ago.
Net income per common share from continuing operations was of $0.001 compared to a loss of $0.02 per share in the 2001 first quarter. The overall loss for the same 2001 quarter, including the effect of an accounting change, was $841,000, or $0.19 per share. Of that loss, the implementation of SFAS 142 "Goodwill and Other Intangible Assets" accounted for $748,000, or $0.17 per share, attributable to a write down of goodwill, net of taxes.
Established in 1977, TJT is a wholesale distributor of O.E.M. parts and aftermarket materials to the manufactured housing industry and the largest recycler and supplier of manufactured home axles and tires in the western United States. The company operates recycling facilities in Idaho, Washington, California, Colorado and Arizona and serves customers in eleven Western states.
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 and competition changes in legislation or regulations, and other economic, competitive, governmental, regulatory and technological factors affecting the company's operations, pricing, products and services.
T.J.T., INC.
STATEMENTS OF OPERATION (unaudited)
(Dollars in thousands except per share amounts)
For the three months ended December 31, 2002 2001
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Sales (net of returns and allowances):
Axles and tires $3,787 $3,314
Accessories and siding 1,131 1,081
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Total sales 4,918 4,395
Cost of goods sold:
Axles and tires 3,082 2,622
Accessories and siding 800 738
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Total cost of goods sold 3,882 3,360
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Gross profit 1,036 1,035
Selling, general and administrative
expenses 1,038 1,214
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Operating income (loss) (2) (179)
Interest income 13 12
Interest expense (1) (1)
Other income 1 5
Investment property income 2 12
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Income (loss) before taxes 13 (151)
Income taxes (benefit) 7 (58)
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Income (loss) before cumulative effect of
accounting change 6 (93)
Cumulative effect of accounting change, net of
income taxes - (748)
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Net income (loss) $6 $(841)
========== ==========
Net income (loss) per common share
Continuing operations $.001 $(.02)
Cumulative effect of accounting
change $- $(.17)
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Net income (loss) $.001 $(.19)
========== ==========
Weighted average shares outstanding 4,504,939 4,504,939
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T.J.T., INC.
BALANCE SHEETS (unaudited)
(Dollars in thousands)
Dec. Sept.
31 30
2002 2002
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Current assets:
Cash and cash equivalents $614 $767
Accounts receivable and notes receivable
(net of allowance for doubtful accounts
of $123 and $129) 1,325 1,247
Inventories 2,983 2,593
Prepaid expenses and other current assets 38 99
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Total current assets 4,960 4,706
Property, plant and equipment, net of
accumulated depreciation 652 699
Notes receivable 237 232
Notes receivable from related parties 114 156
Real estate held for investment 522 523
Other assets 135 135
Deferred tax asset 532 539
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Total assets $7,152 $6,990
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Current liabilities:
Accounts payable $886 $655
Accrued liabilities 262 334
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Total current liabilities 1,148 989
Deferred income and other noncurrent obligations 80 83
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Total liabilities 1,228 1,072
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; 4,504,939 shares issued
and outstanding 5 5
Capital surplus 5,788 6,181
Retained earnings 131 125
Treasury stock (349,800 shares at cost) - (393)
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Total shareholders' equity 5,924 5,918
------- -------
Total liabilities and shareholders' equity $7,152 $6,990
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T.J.T., INC.
STATEMENTS OF CASH FLOWS (unaudited)
(Dollars in thousands)
For the three months ended December 31, 2002 2001
----- ------
Cash flows from operating activities:
Net income (loss) $6 $(841)
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 59 117
Cumulative effect of accounting change - 748
(Gain) loss on sale of assets - (5)
Change in receivables (64) 600
Change in inventory (390) (290)
Change in prepaid expenses and other current assets 61 27
Change in accounts payable 231 (40)
Change in taxes 7 (58)
Change in other assets and liabilities (75) (139)
----- ------
Net cash provided (used) by operating activities (165) 119
Cash flows from investing activities:
Additions to property, plant and equipment (11) (15)
Issuance of notes receivable - (5)
Payments on notes receivable 23 42
Proceeds from sale of assets - 5
Land purchased for investment - (25)
----- ------
Net cash provided by investing activities 12 2
Net increase (decrease) in cash and cash equivalents (153) 121
Cash and cash equivalents at October 1 767 329
----- ------
Cash and cash equivalents at December 31 $614 $450
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Supplemental information:
Interest paid $1 $1
Income taxes paid, net of refunds - -
Noncash transactions:
Reacquisition of investment property by
cancellation of note receivable $- $40
Cumulative effect of change in accounting principle - 748