T.J.T., Inc. Reports Third Quarter Earnings
5 August 1999
T.J.T., Inc. Reports Third Quarter Earnings
EMMETT, Idaho--Aug. 5, 1999--T.J.T., Inc. (Nasdaq SmallCap:AXLE), a recycler and supplier of refurbished axles and tires to the manufactured housing industry, today reported higher sales for the third fiscal quarter ended June 30, 1999.Net income declined from the 1998 third quarter but was an improvement over 1999's first and second quarters.
Sales rose to $9.4 million in the 1999 third quarter compared to $9.2 million in the 1998 third quarter. Gross profit increased to $1.8 million from $1.5 million, pushing gross margin 2.3 percent higher to 18.8 percent for the quarter. Operating income, affected by higher selling, general and administrative expenses, declined to $119,000 from $205,000 in the 1998 third quarter. As a result, net income was $58,000, or $0.01 per share, down from $122,000, or $0.03 per share, a year ago.
"We continued to experience higher prices for the used axles and tires that T.J.T. purchases to recyle and sell to the manufactured home industry," said Terrence Sheldon, president and chief executive officer of T.J.T.
The higher cost of procurement in the quarter negatively impacted gross margins of the company's tire and axle business but overall gross margin was stronger due to increased sales of higher-margin dealer after market accessories.
"We intend to capitalize on our strategy of expanding sales of new and after-market accessories as well as diversify our product lines," Sheldon said.
During the quarter, T.J.T. continued to buy back its stock under a plan that authorizes the company to purchase up to 740,000 shares or 15 percent of the outstanding common shares. As of June 30, 1999, 121,900 shares had been purchased. Sheldon said the buy back "is in the best interest of T.J.T. shareholders." At June 30, 1999, the book value of T.J.T.'s stock was $1.86 per share.
For the nine months ended June 30, 1999, sales were $26.3 million, a 7 percent improvement over $24.5 million in the same 1998 period. A loss of $14,000, or $0.00 per share, compared to net income of $375,000, or $0.08 per share, in the same 1998 nine months.
Established in 1977, T.J.T. is a major provider of recycled axles and inspected tires to the manufactured housing industry. It operates recycling facilities in Idaho, Washington, northern California, Oregon, Colorado and Arizona and serves customers in 11 Western states. 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 10 consecutive years of profitability while growing with the expanding manufactured housing industry. For its fiscal year ended September 30, 1998, the company had revenue of $34.1 million.
This release may contain certain forward-looking statements, which are based on management's current expectations. Factors that could cause future results to vary materially from these expectations include, but are not limited to, general economic conditions; changes in interest rates, deposit flows, real estate values and competition; changes in accounting principles, policies or guidelines; changes in legislation or regulation; and other economic, competitive, governmental, regulatory and technological factors affecting the company's operations, pricing, products and services.
T.J.T., INC.
STATEMENTS OF INCOME
(Dollars in thousands except per share amounts)
Three Months Nine Months
Ended June 30, Ended June 30,
1999 1998 1999 1998
Sales (net of returns
and allowances):
Axles and tires $7,077 $7,508 $20,169 $18,869
Accessories and siding 2,276 1,688 6,115 5,669
Investment Property
Income 5 2 13 7
Total Sales 9,358 9,198 26,297 24,545
Cost of goods sold 7,596 7,675 21,626 20,045
Gross profit 1,762 1,523 4,671 4,500
Selling, general and
administrative expenses 1,643 1,318 4,616 3,880
Operating income (loss) 119 205 55 620
Interest income (expense) 13 8 50
Other income (expense) -- (2) --
Income (loss) before
taxes 119 218 61 670
Income taxes (benefit) 61 96 75 295
Net income (loss) $58 $122 $(14) $375
Net income (loss) per
common share $.01 $.03 $(.00) $.08
Weighted average
shares outstanding 4,728,123 4,843,832 4,802,991 4,844,704
T.J.T, INC.
BALANCE SHEETS (unaudited)
(Dollars in thousands)
June 30, 1999 Sept. 30, 1998
Current assets:
Cash and cash equivalents $75 $204
Accounts receivable and notes
receivable (net of allowances
for doubtful accounts of $82
and $38) 2,177 2,111
Inventories 3,712 3,774
Income taxes receivable 9 --
Prepaid expenses and other
current assets 118 517
------ ------
Total current assets 6,091 6,606
Property, plant and equipment, net
of accumulated depreciation 1,933 1,944
Notes receivable 595 348
Real estate held for investment 610 390
Deferred charges and other assets 284 326
Goodwill 1,807 1,440
------ ------
Total assets $11,320 $11,054
Current liabilities:
Line of credit $765 $--
Accounts payable 636 1,117
Accrued liabilities 910 809
Income taxes payable -- 3
------ ------
Total current liabilities 2,311 1,929
Deferred credits and other
noncurrent obligations 153 136
Deferred income taxes 60 60
------ ------
Total liabilities 2,524 2,125
Shareholder's 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 3,167 3,181
Treasury stock (132,807 and
10,907 shares at cost) (163) (44)
Stock subscriptions receivable (394) (394)
------- --------
Total shareholders' equity 8,796 8,929
------- --------
Total liabilities and shareholders'
equity $11,320 $11,054