T.J.T., Inc. Reports Third Quarter Income of $.07 Per Share
EMMETT, Idaho--Aug. 15, 2006--T.J.T., Inc. (the Company), (Pink Sheets:AXLE) reports income of $.07 per share for the third quarter of fiscal 2006.Net sales increased one percent in the 2006 quarter and eight percent for the nine month period as compared to the same periods in 2005. The increase in the third quarter of 2006 was primarily a result of higher accessory sales, which were offset by lower axle and tire sales compared to the same quarter in 2005. The increase for the nine month period was primarily a result of price increases as well as higher volumes of year to date axle and tire sales. Axle and tire sales for the third quarter decreased by three percent due to a decrease in sales to Clayton Homes (formerly known as Oakwood Homes), which was partially offset by market driven price increases. Accessory sales increased by 14 percent compared to the same quarter in 2005 primarily due to increased sales of manufactured homes resulting in higher demand for setup materials.
The Company's gross margin increased to 31.1 percent in the third quarter of 2006, compared to 26.5 percent in 2005. Gross margin increased to 31 percent in the nine months ended June 30, 2006, compared to 23 percent in the same period of 2005. Increases in both periods are primarily due to market driven price increases of axles and tires.
Net income increased by $53,000 in the third quarter of 2006 compared to the same quarter in 2005. Net income for the nine months ended June 30, 2006, increased 230 percent to $1,162,000, up from $352,000 in the same 2005 period. The increase in both periods is primarily due to higher margins created by market demand for axles and tires.
"Net sales revenue in the quarter continued to increase despite an estimated four percent decline in manufactured housing shipments in our market area," said Terrence Sheldon, President and Chief Executive Officer of T.J.T. "Our accessories sales more than made up for the decline in axle and tire sales. The Company will continue to focus on maintaining our margin as market conditions change."
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, Washington, California, and Colorado, and serves 13 western states. In addition to the recycling business, T.J.T. also sells aftermarket products to manufactured housing, recreational vehicle, 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, 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.pinksheets.com, or you may contact Larry B. Prescott, Senior Vice President and Chief Financial Officer, T.J.T., Inc., 208-365-5321.
T.J.T., INC.
BALANCE SHEETS (Unaudited)
(Dollars in thousands)
June 30 Sept. 30
2006 2005
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Current assets:
Cash and cash equivalents $ 2,761 $ 1,551
Accounts receivable (net of allowances and
discounts of $31 and $100) 871 1,425
Current portion of notes receivable 9 44
Inventories 3,227 3,072
Prepaid expenses and other current assets 77 19
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Total current assets 6,945 6,111
Property, plant and equipment, net of
accumulated depreciation 930 758
Notes receivable, net of current portion 219 298
Real estate held for investment 632 221
Investment in joint venture 1,018 969
Other assets 289 243
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Total assets $10,033 $ 8,600
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Current liabilities:
Accounts payable $ 622 $ 671
Accrued liabilities 936 695
Income tax payable 12 17
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Total current liabilities 1,570 1,383
Deferred income and other noncurrent obligations 50 54
Deferred tax liability 124 48
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Total liabilities 1,744 1,485
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 5,807 5,795
Retained earnings 2,477 1,315
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Total shareholders' equity 8,289 7,115
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Total liabilities and shareholders' equity $10,033 $ 8,600
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T.J.T., INC.
STATEMENTS OF OPERATION
(Dollars in thousands except per share amounts)
Three Months Ended Nine Months Ended
June 30 June 30
---------------------- ----------------------
2006 2005 2006 2005
---------- ---------- ---------- ----------
Sales (net of returns
and allowances):
Axles and tires $ 4,199 $ 4,320 $ 13,556 $ 12,542
Accessories and siding 1,556 1,360 4,231 3,926
---------- ---------- ---------- ----------
Total sales 5,755 5,680 17,787 16,468
Cost of goods sold
Axles and tires 2,870 3,205 9,295 9,958
Accessories and siding 1,094 967 2,976 2,752
---------- ---------- ---------- ----------
Total cost of goods
sold 3,964 4,172 12,271 12,710
---------- ---------- ---------- ----------
Gross profit 1,791 1,508 5,516 3,758
Selling, general and
administrative
expenses 1,392 1,228 4,219 3,700
---------- ---------- ---------- ----------
Operating income
(loss) 399 280 1,297 58
Interest income 37 13 91 41
Investment property
income (expense) - - 3 -
Undistributed equity
interest in joint
venture income 82 109 509 297
Rental income 6 9 18 17
Other income 1 14 5 166
---------- ---------- ---------- ----------
Income (loss) before
taxes 525 425 1,923 579
Income taxes (benefit) 207 160 761 227
---------- ---------- ---------- ----------
Net income (loss) $ 318 $ 265 $ 1,162 $ 352
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Net income per common
share:
Continuing operations
Basic $ .07 $ .06 $ .26 $ .08
Diluted $ .07 $ .06 $ .25 $ .08
Weighted average
shares outstanding:
Basic 4,504,939 4,504,939 4,504,939 4,504,939
Diluted 4,667,946 4,530,033 4,638,745 4,529,362
T.J.T., INC.
STATEMENTS OF CASH FLOWS (unaudited)
(Dollars in thousands)
For the nine months ended June 30, 2006 2005
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Cash flows from operating activities:
Net income $1,162 $ 352
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 142 125
Gain on sale of assets (5) (166)
Undistributed equity earnings in joint venture (509) (297)
Stock compensation 12 4
Change in accounts receivables 554 (116)
Change in inventories (161) 73
Change in prepaid expenses and other current assets (58) 111
Change in accounts payable (49) (71)
Change in taxes 88 22
Change in other assets and liabilities 172 (200)
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Net cash provided (used) by operating activities 1,348 (163)
Cash flows from investing activities:
Purchases of property, plant and equipment (313) (197)
Land purchased for investment (411) -
Issuance of notes receivable - (13)
Repayments received on notes receivable 121 173
Proceeds from sale of assets 5 156
Distributions from joint venture 460 120
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Net cash provided (used) by investing activities (138) 239
------ ------
Net increase in cash and cash equivalents 1,210 76
Cash and cash equivalents at October 1 1,551 843
------ ------
Cash and cash equivalents at June 30 $2,761 $ 919
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Supplemental information:
Income taxes paid $ 689 $ 180
Issuance of note receivable for sale of inventory 6 143
Issuance of note receivable for sale of fixed assets - 51
Gain recognized on fair market value of asset trade-in - 10