T.J.T., Inc. Reports 2007 Results
EMMETT, Idaho--T.J.T., Inc. (the Company), (Pink Sheets:AXLE): T.J.T., Inc. today reported decreased sales and lower income for fiscal year 2007.
The Company’s net income was $515,000 or $.11 per fully diluted share for the year ending September 30, 2007, compared to $1,396,000 or $.30 per fully diluted share in 2006. The decrease was primarily due to a 23 percent decline in sales revenue, combined with a $549,000 decline in joint venture income. Selling, general, and administrative expenses decreased $849,000 for the year, primarily due to reduced corporate administrative expenses.
Sales year over year declined 23 percent. Axle and tire sales declined 28 percent, while accessories and siding sales declined 8 percent. Gross profit margin for 2007 decreased to 29 percent from 31 percent in 2006. Gross margin in the axle and tire segment decreased primarily due to lower sales volumes with a slight impact from lower sales prices associated with sales of unprocessed inventory. Gross margin in the accessories and siding segment decreased as a result of lower selling prices in the increasingly competitive metal buildings product line.
Sales decreased approximately 5 percent in the fourth quarter of 2007 compared to the same quarter a year ago. Axle and tire sales declined by 3 percent while accessories and siding sales decreased by 9 percent. The accessories and siding sales decrease was largely due to declining sales of metal buildings. Gross profit decreased $120,000 compared to the same quarter a year ago. Net income decreased $96,000 to $138,000 or $.03 per fully diluted share compared to $.05 in the same year ago period.
“The slow down in shipments of manufactured homes has negatively impacted the Company’s sales. We have, however, been successful in expanding the number of factories we service in our market area,” said Terry Sheldon, President and CEO. “As reported by the Manufactured Housing Institute as of August, the year to date shipments in our market area have declined by 32 percent or 5,724 homes, compared to our sales decline of only 23 percent for our fiscal year,” said Sheldon, “We will endeavor to continue to expand our factory base.”
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 a www.pinksheets.com or www.tjt-inc.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. | ||||||
| CONSOLIDATED BALANCE SHEETS | ||||||
| (Dollars in thousands) | ||||||
| (Unaudited) | ||||||
| At September 30, | 2007 | 2006 | ||||
| Current assets: | ||||||
| Cash and cash equivalents | $ | 1,834 | $ | 2,574 | ||
|
Accounts receivable (net of allowances and discounts of $16 and $31) |
990 | 1,076 | ||||
| Current portion of notes receivable | 122 | 6 | ||||
| Inventories | 4,946 | 3,529 | ||||
| Prepaid expenses and other current assets | 30 | 11 | ||||
| Income tax receivable | 5 | 153 | ||||
| Deferred tax asset | 46 | - | ||||
| Total current assets | 7,973 | 7,349 | ||||
|
Property, plant and equipment, net of accumulated depreciation |
868 | 944 | ||||
| Notes receivable, net of current portion | 49 | 218 | ||||
| Real estate held for investment | 906 | 633 | ||||
| Investment in joint venture | - | 945 | ||||
| Other assets | 342 | 287 | ||||
| Deferred tax asset | 29 | 39 | ||||
| Total assets | $ | 10,167 | $ | 10,415 | ||
| Current liabilities: | ||||||
| Accounts payable | $ | 602 | $ | 609 | ||
| Accrued liabilities | 394 | 1,053 | ||||
| Income tax payable | 78 | - | ||||
| Deferred tax liability | - | 164 | ||||
| Total current liabilities | 1,074 | 1,826 | ||||
| Deferred income and other noncurrent obligations | 26 | 66 | ||||
| Total liabilities | 1,100 | 1,892 | ||||
| Non-controlling interest | 4 | - | ||||
| 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; 4,532,862 and 4,504,939 shares outstanding |
5 | 5 | ||||
| Capital surplus | 5,832 | 5,807 | ||||
| Retained earnings | 3,226 | 2,711 | ||||
| Total shareholders' equity | 9,063 | 8,523 | ||||
|
Total liabilities and shareholders' equity |
$ | 10,167 | $ | 10,415 | ||
| T.J.T., INC. | ||||||||||||
| CONSOLIDATED STATEMENTS OF OPERATION | ||||||||||||
| (Dollars in thousands except per share amounts) | ||||||||||||
| (Unaudited) | ||||||||||||
| Three Months Ended | Year Ended | |||||||||||
| September 30, | September 30, | |||||||||||
| 2007 | 2006 | 2007 | 2006 | |||||||||
| Sales (net of returns and allowances): | ||||||||||||
| Axles and tires | $ | 3,696 | 3,806 | $ | 12,608 | $ | 17,401 | |||||
| Accessories and siding | 1,488 | 1,630 | 5,338 | 5,822 | ||||||||
| Total sales | 5,184 | 5,436 | 17,946 | 23,223 | ||||||||
| Cost of goods sold | ||||||||||||
| Axles and tires | 2,642 | 2,686 | 8,911 | 12,021 | ||||||||
| Accessories and siding | 1,062 | 1,150 | 3,774 | 4,086 | ||||||||
| Total cost of goods sold | 3,704 | 3,836 | 12,685 | 16,107 | ||||||||
|
|
||||||||||||
| Gross profit | 1,480 | 1,600 | 5,261 | 7,116 | ||||||||
| Selling, general and administrative expenses | 1,326 | 1,426 | 4,796 | 5,645 | ||||||||
| Operating income | 154 | 174 | 465 | 1,471 | ||||||||
| Interest income | 18 | 34 | 90 | 125 | ||||||||
| Investment property income | 22 | - | 179 | 3 | ||||||||
| Equity interest in joint venture income | - | 87 | 47 | 596 | ||||||||
| Rental income | 8 | 5 | 24 | 23 | ||||||||
| Other income | 6 | 5 | 6 | 10 | ||||||||
| Income before non-controlling interest and taxes | 208 | 305 | 811 | 2,228 | ||||||||
| Non-controlling interest | 10 | - | 15 | - | ||||||||
| Income before taxes | 218 | 305 | 826 | 2,228 | ||||||||
| Income taxes | 80 | 71 | 311 | 832 | ||||||||
| Net income | $ | 138 | $ | 234 | $ | 515 | $ | 1,396 | ||||
| Net income per common share | ||||||||||||
| Basic | $ | .03 | $ | .05 | $ | .11 | $ | .31 | ||||
| Diluted | $ | .03 | $ | .05 | $ | .11 | $ | .30 | ||||
| Weighted average shares outstanding | ||||||||||||
| Basic | 4,532,862 | 4,504,939 | 4,522,303 | 4,504,939 | ||||||||
| Diluted | 4,605,782 | 4,649,734 | 4,611,781 | 4,642,037 | ||||||||
| T.J.T., INC. | ||||||||||||
| CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||||||
| (Dollars in thousands) | ||||||||||||
| (Unaudited) | ||||||||||||
| For the year ended September 30, | 2007 | 2006 | 2005 | |||||||||
| Cash flows from operating activities: | ||||||||||||
| Net income | $ | 515 | $ | 1,396 | $ | 661 | ||||||
|
Adjustments to reconcile net income to net cash provided by operating activities: |
||||||||||||
| Depreciation and amortization | 224 | 194 | 166 | |||||||||
| Gain on sale of assets | (6 | ) | (10 | ) | (170 | ) | ||||||
| Gain on sale of property held for investment | (157 | ) | - | - | ||||||||
| Equity earnings in joint venture | (47 | ) | (596 | ) | (453 | ) | ||||||
| Stock-based compensation | 25 | 12 | 4 | |||||||||
| Non-controlling interest | 4 | - | - | |||||||||
| Change in accounts receivables | 86 | 349 | (76 | ) | ||||||||
| Change in inventories | (1,417 | ) | (463 | ) | (375 | ) | ||||||
| Change in prepaid expenses and other current assets | (19 | ) | 8 | 183 | ||||||||
| Change in accounts payable | (7 | ) | (62 | ) | 115 | |||||||
| Change in taxes | 26 | (92 | ) | 227 | ||||||||
| Change in other assets and liabilities | (759 | ) | 325 | 35 | ||||||||
| Net cash provided (used) by operating activities | (1,532 | ) | 1,061 | 317 | ||||||||
| Cash flows from investing activities: | ||||||||||||
| Purchases of property, plant and equipment | (150 | ) | (378 | ) | (231 | ) | ||||||
| Repayments received on notes receivable | 60 | 124 | 308 | |||||||||
| Issuance of notes receivable | (2 | ) | - | (6 | ) | |||||||
| Proceeds from sale of assets | 10 | 10 | 160 | |||||||||
| Distributions from joint venture | 992 | 620 | 160 | |||||||||
| Land purchased for investment | (292 | ) | (414 | ) | - | |||||||
| Proceeds from sale of land held for investment | 174 | - | ||||||||||
| Net cash provided (used) by investing activities | 792 | (38 | ) | 391 | ||||||||
| Net change in cash and cash equivalents | (740 | ) | 1,023 | 708 | ||||||||
| Cash and cash equivalents at October 1 | 2,574 | 1,551 | 843 | |||||||||
| Cash and cash equivalents at September 30 | $ | 1,834 | $ | 2,574 | $ | 1,551 | ||||||
| Supplemental information: | ||||||||||||
| Cash paid for interest | $ | - | $ | - | $ | 1 | ||||||
| Income taxes paid | 285 | 922 | 184 | |||||||||
| Noncash transactions: | ||||||||||||
| Sale of inventory by issuance of note receivable | $ | - | $ | 6 | $ | 150 | ||||||
| Sale of fixed assets by issuance of note receivable | 5 | - | 51 | |||||||||
| Gain recognized on fair market value of asset trade-in | - | - | 10 | |||||||||
| Value of stock received into treasury as payment to exercise options | 14 | - | - | |||||||||