TJT, Inc. Reports a 28 Percent Increase in Sales and a Higher Net Income for the Quarter Ending March 31, 2005.
EMMETT, Idaho--May 6, 2005--TJT, Inc. (the Company), (PINK SHEETS:AXLE) today reported higher net sales and increased net income for its second quarter compared to a year ago.Sales were $5.5 million in the current quarter compared to $4.3 million in the same quarter in 2004, a 28 percent increase. Approximately two-thirds of the increase was due to higher sales volumes of recycled axles and tires and accessory items and one-third resulted from sales of new axles and tires, which carry a higher sales price than the recycled axles and inspected tires sold in the same quarter of 2004. Sales increased 24 percent or $2 million in the six month period ending March 31, 2005, as compared to the same period in 2004.
Gross profit increased to $1,183,000, or by 9 percent compared to the same quarter a year ago. The gross profit margin was 21 percent in the most recent quarter compared to 25 percent in the same quarter a year ago. The decline was due to sales of new axles and tires at lower profit margins and higher costs associated with purchases of used axles and tires which continued to be in short supply. "We expect our profit margin to increase during the remaining two quarters of this year as our pricing strategy catches up with the increased cost of supply," said Terry Sheldon, President and Chief Executive Officer of T.J.T.
Selling, general and administrative expenses increased to $1,243,000, or $149,000 higher than the same quarter in 2004. The increases were partially due to costs associated with development of the dealer accessory business and legal expenses associated with the deregistration of our common stock.
Net income before taxes increased $151,000 compared to the same quarter a year ago. Joint venture income increased $74,000 compared to the year ago quarter which was due to a 44 percent increase of sales in the 2005 quarter. The Company's Net income after tax in the three and six month periods was $154,000 and $87,000, respectively.
In addition, the Company sold equipment and inventory associated with the manufacture of hanger parts, located in Eugene, Oregon realizing a gain of $151,000. Sales of hanger parts were $957,000 or 9 percent of total sales of the company, during the first six months of 2005; however, those sales were at lower than desired margins. "The sale of the hanger manufacturing assets will allow the company to focus more management resources and capital on development of new business with expected higher returns," said Larry Prescott, Treasurer and CFO.
Established in 1977, TJT 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, the company also sells aftermarket products to the manufactured housing industry, recreational vehicle industry and residential markets.
T.J.T., INC.
BALANCE SHEETS (Unaudited)
(Dollars in thousands)
Mar. 31 Sept. 30
2005 2004
-------- --------
Current assets:
Cash and cash equivalents $ 363 $ 843
Accounts receivable (net of allowances and
discounts of $83 and $23) 1,371 1,349
Current portion of notes receivable 310 105
Inventories 2,820 2,847
Prepaid expenses and other current assets 217 202
-------- --------
Total current assets 5,081 5,346
Property, plant and equipment, net of
accumulated depreciation 691 728
Notes receivable, net of current portion 332 338
Real estate held for investment 223 224
Investment in joint venture 825 676
Other assets 202 212
Deferred tax asset 112 179
-------- --------
Total assets $ 7,466 $ 7,703
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Current liabilities:
Accounts payable $ 502 $ 556
Accrued liabilities 363 640
-------- --------
Total current liabilities 865 1,196
Deferred income and other noncurrent obligations 62 57
-------- --------
Total liabilities 927 1,253
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 5,793 5,791
Retained earnings 741 654
-------- --------
Total shareholders' equity 6,539 6,450
-------- --------
Total liabilities and shareholders' equity $ 7,466 $ 7,703
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T.J.T., INC.
STATEMENTS OF OPERATION
(Dollars in thousands except per share amounts)
Three Months Ended Six Months Ended
March 31, March 31,
---------------------- -------------------------
2005 2004 2005 2004
---------- ---------- ----------- ------------
Sales (net of returns
and allowances):
Axles and tires $ 4,409 $ 3,414 $ 8,222 $ 6,740
Accessories and
siding 1,125 923 2,566 1,974
---------- ---------- ---------- ----------
Total sales 5,534 4,337 10,788 8,714
Cost of goods sold
Axles and tires 3,563 2,636 6,753 5,228
Accessories and
siding 788 618 1,785 1,339
---------- ---------- ---------- ----------
Total cost of goods
sold 4,351 3,254 8,538 6,567
---------- ---------- ---------- ----------
Gross profit 1,183 1,083 2,250 2,147
Selling, general and
administrative
expenses 1,243 1,094 2,472 2,122
---------- ---------- ---------- ----------
Operating income
(loss) (60) (11) (222) 25
Interest income 12 11 28 25
Investment property
income - (2) - 29
Undistributed equity
interest in joint
venture income 153 79 188 78
Rental income 4 22 8 33
Other income 151 10 152 10
---------- ---------- ---------- ----------
Income (loss)
before taxes 260 109 154 200
Income taxes
(benefit) 106 45 67 81
---------- ---------- ---------- ----------
Net income (loss) $ 154 $ 64 $ 87 $ 119
========== ========== ========== ==========
Net income (loss) per
common share
Basic and fully
diluted:
Continuing
operations $ .03 $ .01 $ .02 $ .03
---------- ---------- ---------- ----------
Net income (loss) $ .03 $ .01 $ .02 $ .03
========== ========== ========== ==========
Weighted average
shares outstanding 4,504,939 4,504,939 4,504,939 4,504,939
========== ========== ========== ==========
T.J.T., INC.
STATEMENTS OF CASH FLOWS (unaudited)
(Dollars in thousands)
For the six months ended March 31, 2005 2004
------ ------
Cash flows from operating activities:
Net income (loss) $ 87 $ 119
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 84 89
Gain on sale of assets (152) (39)
Undistributed equity earnings in joint venture (149) (78)
Stock compensation 2 1
Change in accounts receivables (22) 372
Change in inventories (116) (39)
Change in prepaid expenses and other current assets (15) (46)
Change in accounts payable (54) (184)
Change in taxes 67 81
Change in other assets and liabilities (264) (192)
----- ------
Net cash provided (used) by operating activities (532) 84
Cash flows from investing activities:
Purchases of property, plant and equipment (94) (210)
Issuance of notes receivable (13) (10)
Repayments received on notes receivable 7 26
Proceeds from sale of assets 152 10
Land purchased for investment - (25)
Proceeds from sale of land held for investment - 36
----- ------
Net cash provided (used) by investing activities 52 (173)
----- ------
Net decrease in cash and cash equivalents (480) (89)
Cash and cash equivalents at October 1 843 1,072
----- ------
Cash and cash equivalents at March 31 $ 363 $ 983
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Supplemental information:
Interest paid $ - $ 1
Sale of land by issuance of note receivable - 35
Issuance of note receivable for sale of hanger
inventory 143 -
Issuance of note receivable for sale of fixed assets 50 -