T.J.T., Inc.'S Fiscal Net Income up 200 Percent in 2004
EMMETT, Idaho--Dec. 3, 2004--T.J.T., Inc. (OTCBB:AXLE), a supplier of recycled axles, tires and aftermarket accessories to the manufactured housing industry, posted the strongest financial results since 1998 for the fiscal year ended September 30, 2004.Sales in fiscal 2004 were $19.7 million, virtually unchanged from 2003, while net income tripled. The sales mix in 2004 reflected T.J.T.'s efforts to expand market opportunities in its aftermarket accessories segment which rose 15 percent, accounting for 26 percent of total sales. The increase in higher-margin accessories sales contributed to a 3 percent decline in costs of goods sold and higher gross profit of $4.8 million, compared to $4.2 million last year.
The company's net income was $397,000 for the year ended September 30, 2004, or $0.09 per basic and fully diluted share, which tripled from the $132,000, or $0.03 per basic and fully diluted share, realized during the same period 2003. In addition to increased margins, the increase in net income was driven by the company's share of undistributed income in a joint venture. During 2004, the company recognized $224,000 of income for its investment interest in the joint venture, compared to $63,000 recognized in fiscal 2003. The increased margins and joint venture income were offset by higher selling, general and administrative expenses incurred in the fourth quarter, stemming from wages for additional sales personnel and incentive compensation for performance based bonus plans and higher selling expense associated with expansion of the dealer accessory and aftermarket business.
"It's been an exceptional year for the company," said Terrence Sheldon, president and chief executive officer of T.J.T. "The stronger financial performance, achieved despite flat sales year-over-year, came from improved operating performance and higher sales at locations operating during both 2004 and 2003." The company's ongoing five locations throughout the West boosted annual sales in fiscal 2004 by $1.9 million, or 11 percent, to overcome the loss of sales from the Phoenix, Arizona facility which generated $1.9 million of sales prior to its closure during 2003.
For the fourth quarter ended September 30, 2004, sales increased 13 percent to $5.8 million from $5.1 million in the same 2003 period, spurred by a 31 percent boost in accessories sales. Gross profit improved 12 percent on the higher sales but was offset by $282,000 in additional selling, general and administrative expenses in the 2004 quarter compared to a year ago. Increased expenses reflected wages and performance based incentive pay, increased legal expense and higher selling expense associated with expansion of the dealer accessory and aftermarket business. As a result, net income decreased to $168,000, or $0.04 per basic and fully diluted share, from $204,000, or $0.05 per basic and fully diluted share, in the 2003 same period. Joint venture equity income recognized during the fourth quarter ended September 30, 2004 increased to $63,000 from $51,000 recognized during the same period in 2003.
Established in 1977, T.J.T. is a major provider of recycled axles and tires to the manufactured housing industry. It operates recycling facilities in Idaho, Washington, California and Colorado and serves 13 western states. In addition to the recycling business, T.J.T. manufactures steel hangers and framing components at its Oregon facility. The company also sells aftermarket products to manufactured housing industry, recreational vehicle industry and residential markets.
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 CASH FLOWS
(Dollars in thousands)
(Unaudited)
For the year ended September 30, 2004 2003
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Cash flows from operating activities:
Net income (loss) $ 397 $ 132
Adjustments to reconcile net income (loss)
to net cash provided by operating activities:
Depreciation and amortization 170 226
Cumulative effect of accounting change - -
(Gain) loss on sale of assets (21) (32)
(Gain) loss on sale of investment property (170) (62)
Equity earnings in joint venture (224) (63)
Stock compensation 3 -
Change in receivables (18) (116)
Change in inventory (281) (232)
Change in prepaid expenses and other current assets (95) (8)
Change in accounts payable (308) 209
Change in taxes 271 146
Change in other assets and liabilities 58 106
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Net cash provided by operating activities (218) 306
Cash flows from investing activities:
Additions to property, plant and equipment (304) (124)
Payments on notes receivable 188 89
Issuance of notes receivable (59) -
Proceeds from sale of assets 23 28
Investment in joint venture - (130)
Land purchased for investment (17) (17)
Sale of land purchased for investment 158 153
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Net cash provided (used) by investing activities (11) (1)
Cash flows from financing activities:
Net payments from debt - -
------ ------
Net cash used by financing activities - -
Net increase in cash and cash equivalents (229) 305
Cash and cash equivalents at October 1 1,072 767
------ ------
Cash and cash equivalents at September 30 $ 843 $1,072
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Supplemental information:
Interest paid $ 1 $ 1
Income tax refunds - 50
Noncash transactions:
Sale of land by issuance of note receivable $ 35 $ 120
Cumulative effect of accounting change - -
Prepaid operating lease - -
Reaquisition of investment property by cancellation
of note receivable - -
Inventory invested in joint venture - 259
Discounts granted for pay-off of notes receivables 18 -
T.J.T., INC.
BALANCE SHEETS
(Dollars in thousands)
(Unaudited)
At September 30, 2004 2003
------ ------
Current assets:
Cash and cash equivalents $ 843 $1,072
Accounts receivable (net of allowance for
doubtful accounts of $23 and $68) 1,349 1,336
Notes receivable 105 38
Inventories 2,847 2,566
Prepaid expenses and other current assets 202 107
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Total current assets 5,346 5,119
Property, plant and equipment, net of
accumulated depreciation 728 594
Notes receivable 338 323
Notes receivable from related parties - 89
Real estate held for investment 224 341
Investment in joint venture 676 452
Other assets 212 174
Deferred tax asset 179 450
------ ------
Total assets $7,703 $7,542
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Current liabilities:
Accounts payable $ 556 $ 864
Accrued liabilities 640 549
------ ------
Total current liabilities 1,196 1,413
Deferred income and other noncurrent obligations 57 79
------ ------
Total liabilities 1,253 1,492
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 5,791 5,788
Retained earnings 654 257
------ ------
Total shareholders' equity 6,450 6,050
------ ------
Total liabilities and shareholders' equity $7,703 $7,542
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T.J.T., INC.
STATEMENTS OF OPERATION
(Dollars in thousands except per share amounts)
(Unaudited)
Three Months Ended Year Ended
September 30, September 30,
---------------------- ----------------------
2004 2003 2004 2003
---------- ---------- ---------- ----------
Sales (net of returns
and allowances):
Axles and tires $ 4,056 $ 3,810 $ 14,502 $ 15,215
Accessories and
siding 1,701 1,302 5,199 4,513
---------- ---------- ---------- ----------
Total sales 5,757 5,112 19,701 19,728
Cost of goods sold
Axles and tires 3,195 2,920 11,312 12,332
Accessories and
siding 1,150 930 3,569 3,149
---------- ---------- ---------- ----------
Cost of goods
sold 4,345 3,850 14,881 15,481
---------- ---------- ---------- ----------
Gross profit 1,412 1,262 4,820 4,247
Selling, general and
administrative
expenses 1,343 1,061 4,669 4,259
---------- ---------- ---------- ----------
Operating
income(loss) 69 201 151 (12)
Interest income 10 14 58 51
Investment property
income (expense) 133 40 170 68
Undistributed equity
interest in joint
venture income 63 51 224 63
Rental income 8 20 49 34
Other income (expense) 8 7 21 24
---------- ---------- ---------- ----------
Income (loss)
before taxes 291 333 673 228
Income taxes (benefit) 123 129 276 96
---------- ---------- ---------- ----------
Net income (loss) $ 168 $ 204 $ 397 $ 132
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Net income (loss) per
common share Basic and
fully diluted:
Continuing
operations $ .04 $ .05 $ .09 $ .03
---------- ---------- ---------- ----------
Net income (loss) $ .04 $ .05 $ .09 $ .03
========== ========== ========== ==========
Weighted average
shares outstanding 4,504,939 4,504,939 4,504,939 4,504,939
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