T.J.T., Inc. Sales Up 34 Percent in Third Quarter
10 August 1998
T.J.T., Inc. Sales Up 34 Percent in Third Quarter
EMMETT, Idaho--Aug. 10, 1998--T.J.T., Inc. (Nasdaq SmallCap:AXLE), a supplier of recycled axles and inspected tires to the manufactured housing industry, today announced that sales for the third quarter ended June 30, 1998, rose 34 percent while higher cost of goods sold caused net income to decline from the same quarter a year ago.
During the quarter, sales increased to $9.2 million from $6.9 million last year with the gain attributable primarily to an operation acquired in northern California in July 1997. Net income declined to $122,000, or 3 cents per share, from $251,000, or 6 cents per share, in the same 1997 quarter.
"Our results were significantly impacted by sharply higher prices for used axles and tires that T.J.T. recycles and sells to the manufactured home industry," said Terrence Sheldon, president and CEO of T.J.T. "Competition for these components increased in the third quarter, driving up the price to the company." The increased cost of goods sold lowered gross margin in the quarter to 16.5 percent, down from 19.7 percent from a year ago.
Selling, general and administrative expenses increased in line with sales and were flat quarter over quarter on a percentage of sales basis. Non-operating income declined $41,000 from the 1997 third quarter which included a gain on a sale of investment property.
"Reducing our cost for acquiring used axles and tires is a top priority," said Sheldon. "We recently announced the proposed acquisition of a firm in Arizona which will broaden our market area and open up a new avenue of supply." The firm, located in Chandler, Arizona, has annual sales of approximately $2.5 million. During the quarter T.J.T. also acquired the assets of two firms in Eugene, Ore., with combined annual sales of approximately $900,000.
"While disappointed in net income results for the quarter, we are pleased with our progress during the first nine months of fiscal 1998," said Sheldon. "We are considerably ahead of 1997 in both sales and net income and have executed on our strategy to grow market share in the West through acquisition."
For the nine months ended June 30, 1998, T.J.T. reported sales of $24.5 million, up 47 percent from $16.7 million in the comparable 1997 period, reflecting contribution from acquisitions. Year-to-date gross margin rose to 18.3 percent from 17.0 percent in the same period a year ago. Net income for the nine months was up 86 percent at $375,000, or 8 cents per share, compared to $202,000, or 5 cents per share.
Established in 1977, T.J.T. is a major provider of recycled axles and inspected tires to the manufactured housing industry and has recycling operations in Idaho, Oregon, Washington, California, and Colorado. In addition to effectively recycling these serviceable steel and rubber products, the company also sells aftermarket accessories to the manufactured housing industry and vinyl siding to the housing industry. T.J.T. has no long-term debt and 10 consecutive years of profitability while growing with the expanding manufactured housing industry.
T.J.T., INC.
BALANCE SHEETS
(Dollars in thousands)
June 30, Sept. 30,
1998 1997
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Current assets:
Cash and cash equivalents $ 26 $ 835
Accounts receivable and
notes receivable 2,365 1,738
Inventories 3,625 3,480
Prepaid expenses and other
current assets 263 253
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Total current assets 6,279 6,306
Property, plant and equipment,
net of accumulated depreciation 1,767 1,318
Notes receivable 398 434
Real estate held for investment 391 275
Deferred charges and other assets 368 411
Goodwill 1,468 1,396
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Total assets $10,671 $10,140
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Current liabilities:
Accounts payable $ 690 $ 616
Accrued liabilities 868 708
Income taxes payable 29 146
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Total current liabilities 1,587 1,470
Deferred credits and other
noncurrent obligations 173 146
Deferred income taxes 53 53
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Total liabilities 1,813 1,669
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Shareholders' equity:
Common stock, $.001 par value;
10,000,000 shares authorized;
4,854,739 shares issued
and outstanding 5 5
Common stock warrants 113 113
Capital surplus 6,068 6,068
Retained earnings 3,110 2,735
Treasury stock (10,906 and
7,991 shares at cost) (44) (39)
Stock subscriptions receivable (394) (411)
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Total shareholders' equity 8,858 8,471
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Total liabilities and
shareholders' equity $10,671 $10,140
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T.J.T., INC.
STATEMENTS OF INCOME
(Dollars in thousands except per share amounts)
Three Months Ended Nine Months Ended
June 30, June 30,
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1998 1997 1998 1997
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Sales (net of returns and
allowances):
Axles and tires $ 7,508 $ 4,919 $ 18,869 $ 11,969
Accessories and siding 1,688 1,950 5,669 4,757
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Total sales 9,196 6,869 24,538 16,726
Cost of goods sold 7,675 5,513 20,045 13,880
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Gross profit 1,521 1,356 4,493 2,846
Selling, general and
administrative expenses 1,318 981 3,880 2,640
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Operating income (loss) 203 375 613 206
Interest income 13 32 50 92
Income on investment property 2 25 7 78
Other income (expense) - (1) - -
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Income (loss) before
taxes 218 431 670 376
Income taxes 96 180 295 174
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Net income (loss) $ 122 $ 251 $ 375 $ 202
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Net income (loss) per common
share $ .03 $ .06 $ .08 $ .05
Weighted average shares
outstanding 4,843,832 4,557,155 4,844,704 4,405,181
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