T.J.T., Inc. (the Company) (Pink Sheets:AXLE), a major supplier of
axles, tires, and set-up supplies to the manufactured housing industry,
announced a net loss of $257,000, or $.06 per diluted share, for the
second quarter of fiscal year 2008.
Sales decreased 10 percent in the three month period ending March 31,
2008 as compared to the same three month period a year ago. The decrease
is primarily due to a sharp decline of $281,000 in the sales of
accessories as shipments of manufactured homes declined 20 percent in
the Company’s market area. Sales are down 3
percent for the six month period ending March 31, 2008 as compared to
the same six month period a year ago. While axle and tire sales have
increased as a result of increased wholesale sales, accessories sales
declined 19 percent in the first half of fiscal 2008 compared to the
same period in 2007.
Gross profit declined by 33 percent in the second quarter, as compared
to the same quarter a year ago. For the six month period, the gross
profit declined 23 percent as compared to the same period in fiscal
2007. Axle and tire margins have declined in both periods as a result of
lower selling prices and higher purchase costs of used axles and tires.
On average, selling prices declined primarily because of a higher
percentage of sales into wholesale markets. Purchase costs increased due
to diminished supply and higher fuel costs realized in procuring the
supply. Accessories gross margin increased by 4 percentage points in
both the three and six month periods when compared to 2007.
Consolidated selling, general, and administrative (SG&A) expense
increased $89,000 and $312,000 during the three and six month periods,
respectively, when compared to the same 2007 periods. Increases in both
periods are largely due to increased legal expenses as well as expenses
associated with the newly established joint venture, Ladder Lift
Systems, L.L.C. Operations of Ladder Lift Systems, L.L.C. are
consolidated within the financial statements for the Company.
The Company’s net loss for the quarter ending
March 31, 2008 is $257,000 compared to net income of $62,000 for the
same quarter a year ago. The net loss for the six months ended March 31,
2008 is $486,000 compared to income of $83,000 in the same six month
period a year ago. The loss in both periods is primarily due to a sharp
decline in gross margin and increased SG&A expense. Gross margin
declined as a result of higher percentages of sales into wholesale
markets coupled with higher purchase costs. SG&A expense increased
primarily due to legal expenses.
Terrence Sheldon, President and Chief Executive Officer of the Company,
noted that, “Shipments of manufactured housing
within our market area declined 20 percent this quarter as compared to
the same quarter last year. We are experiencing success in expanding our
market share within our market area to compensate for the decline of the
manufactured housing segment of the housing industry.”
He further stated that, “The Company has
implemented a strategy of acquiring a substantial inventory of used
axles and tires in this down market, so as to retain them in our market,
rather than allowing that supply to be wholesaled to other regions. When
market conditions improve, TJT will be in an enviable position of having
adequate raw materials for recycling, rather than being dependent on new
product.”
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 14
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. PrescottSenior Vice President and Chief Financial OfficerT.J.T.,
Inc.208-365-5321
T.J.T., INC.
CONSOLIDATED BALANCE SHEETS (Unaudited)
(Dollars in thousands)
Mar. 31
Sept. 30
2008
2007
Current assets:
Cash and cash equivalents
$
414
$
1,834
Accounts receivable (net of allowances and discounts of $29 and
$16)
815
990
Current portion of notes receivable
5
122
Inventories
5,493
4,946
Prepaid expenses and other current assets
70
30
Income tax receivable
236
5
Deferred tax asset
47
46
Total current assets
7,080
7,973
Property, plant and equipment, net of accumulated depreciation
833
868
Notes receivable, net of current portion
47
49
Real estate held for investment
928
906
Other assets
351
342
Deferred tax asset
80
29
Total assets
$
9,319
$
10,167
Current liabilities:
Accounts payable
$
277
$
602
Accrued liabilities
418
394
Income tax payable
-
78
Total current liabilities
695
1,074
Deferred income and other noncurrent obligations
10
26
Total liabilities
705
1,100
Non-controlling interest
24
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 outstanding
5
5
Capital surplus
5,845
5,832
Retained earnings
2,740
3,226
Total shareholders' equity
8,590
9,063
Total liabilities, shareholders' equity, and non-controlling interest
$
9,319
$
10,167
T.J.T., INC.
CONSOLIDATED STATEMENTS OF OPERATION (Unaudited)
(Dollars in thousands except per share amounts)
Three Months Ended
Six Months Ended
March 31,
March 31,
2008
2007
2008
2007
Sales (net of returns and allowances):
Axles and tires
$
2,572
$
2,663
$
5,588
$
5,394
Accessories and siding
852
1,133
1,964
2,419
Total sales
3,424
3,796
7,552
7,813
Cost of goods sold
Axles and tires
2,073
1,827
4,452
3,760
Accessories and siding
571
807
1,318
1,725
Total cost of goods sold
2,644
2,634
5,770
5,485
Gross profit
780
1,162
1,782
2,328
Selling, general and administrative expenses
1,209
1,120
2,628
2,316
Operating income
(429
)
42
(846
)
12
Interest income
8
21
26
49
Investment property income
15
-
15
-
Undistributed equity interest in joint venture income
-
40
-
71
Rental income
-
5
3
12
Other income
8
(2
)
11
(1
)
Income (loss) before non-controlling interest and taxes
(399
)
106
(792
)
143
Non-controlling interest
9
-
24
-
Income (loss) before taxes
(390
)
106
(768
)
143
Income tax expense (benefit)
(133
)
44
(282
)
60
Net income (loss)
$
(257
)
$
62
$
(486
)
$
83
Net income (loss) per common share:
Basic
(0.06
)
0.01
(0.11
)
0.02
Diluted
(0.06
)
0.01
(0.11
)
0.02
Weighted average shares outstanding:
Basic
4,532,862
4,518,583
4,532,862
4,511,686
Diluted
4,585,135
4,613,124
4,595,848
4,613,431
T.J.T., INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(Dollars in thousands)
For the six months ended March 31,
2008
2007
Cash flows from operating activities:
Net income
$
(486
)
$
83
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization
120
111
Loss (gain) on sale of assets
(11
)
1
Undistributed equity earnings in joint venture
-
(71
)
Non-controlling interest
20
-
Stock compensation
13
25
Change in accounts receivables
175
258
Change in inventories
(547
)
(692
)
Change in prepaid expenses and other current assets
(40
)
(113
)
Change in accounts payable
(325
)
(127
)
Change in taxes
(361
)
60
Change in other assets and liabilities
14
(771
)
Net cash provided (used) by operating activities
(1,428
)
(1,236
)
Cash flows from investing activities:
Purchases of property, plant and equipment
(117
)
(43
)
Repayments received on notes receivable
103
4
Investment property purchases
(22
)
(13
)
Proceeds from sale of assets
44
2
Net cash provided (used) by investing activities
8
(50
)
Net increase (decrease) in cash and cash equivalents
(1,420
)
(1,286
)
Cash and cash equivalents at October 1
1,834
2,574
Cash and cash equivalents at March 31
$
414
$
1,288
Supplemental information:
Value of stock received into treasury as payment to exercise options
$
-
$
14
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