T.J.T., Inc. (the Company),(Pink Sheets:AXLE) -- T.J.T., Inc., a major supplier of axles, tires, and set-up supplies to the manufactured housing industry announced a net loss of $286,000 in its first quarter of fiscal 2011.
Net sales decreased 27 percent in the first quarter of fiscal 2011 as compared to the same period in 2010. Axle and tire net sales decreased 38 percent, offset by an increase in accessories net sales of almost 4 percent. Net sales in the axle and tire segment decreased as a result of declines in sales volume and sales prices. The first quarter of 2011 included minimal sales associated with utilizing the Company's freight trucks to provide motor carrier services to outside customers. Motor carrier services contributed net sales of $123,000 to the axle and tire segment in the 2010 quarter. In February 2010, management discontinued motor carrier services. Net sales of accessories increased primarily as a result of sales to certain customers servicing the North Dakota market area.
The Company's gross margin increased to 20 percent in the first quarter of 2011 compared to 17 percent in the same 2010 quarter. While the axle and tire segment margin increased to 12 percent compared to 9 percent in the same quarter a year ago, the accessories gross margin decreased by 3 percentage points quarter over quarter. The increased margin in the axle and tire segment is due to inventory lower of cost or market adjustments incurred in the third and fourth quarters of fiscal 2010, coupled with reductions in direct expenses associated with discontinuing motor carrier services. The accessories gross margin decreased to 34 percent in the 2011 quarter compared to 37 percent in the same quarter a year ago. The decline is a result of reduced selling prices, higher allocated shipping costs, and a lower volume of higher margin retail sales.
Consolidated selling, general, and administrative (SG&A) expense decreased 12 percent in the first three months of fiscal 2011 compared to the same period of 2010. SG&A declined primarily as a result of reductions in wages and other employee related expenses offset by increased bad debt expense. The Company recorded a bad debt reserve of $58,000 as a result of Palm Harbor Homes filing for bankruptcy on November 29, 2010.
The Company had a net loss of $286,000 in the first quarter of 2011 compared to a net loss of $361,000 in the same 2010 period. The net loss in the 2011 quarter included $30,000 of income related to the Company selling its interest in Ladder Lift Systems, L.L.C. The Company did not record a tax benefit in either period because there are no carryback provisions available. A valuation allowance was recorded in the first quarter of 2011 to reduce the carrying amounts of deferred tax assets at December 31, 2010 to zero.
As of December 31, 2010, the Company's cash and cash equivalents was $1,787,000. The Company will continue to closely manage inventory levels and reduce costs where appropriate.
Recent Management Change
The Company is also announcing the departure of its current Senior Vice President, Chief Financial Officer and Treasurer, Cindy Truchot. Ms. Truchot is taking a position at another company. Board members and management would like to thank Ms. Truchot for her nine years of excellent service.
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, California, and Colorado, and serves 16 western states. In addition to the recycling business, T.J.T. also sells aftermarket products to manufactured housing 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:
Cindy Truchot |
Senior Vice President and Chief Financial Officer |
T.J.T., Inc. |
(208) 365-5321 |
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T.J.T., INC. | ||||||||
CONSOLIDATED BALANCE SHEETS (Unaudited) | ||||||||
(Dollars in thousands) | ||||||||
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Dec. 31 | Sept. 30 | |||||||
 | 2010 |  |  | 2010 |  | |||
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Current assets: | ||||||||
Cash and cash equivalents | $ | 1,787 | $ | 1,825 | ||||
Accounts receivable (net of allowances and discounts of $103 and $49) | 216 | 374 | ||||||
Current portion of notes receivable | 9 | 8 | ||||||
Inventories | 1,909 | 2,131 | ||||||
Prepaid expenses and other current assets | Â | 230 | Â | Â | 162 | Â | ||
Total current assets | 4,151 | 4,500 | ||||||
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Property, plant and equipment, net of accumulated depreciation | 238 | 251 | ||||||
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Notes receivable, net of current portion | 102 | 107 | ||||||
Real estate held for sale | 512 | 512 | ||||||
Real estate held for investment | 287 | 287 | ||||||
Other assets held for sale | - | 6 | ||||||
Other assets | Â | 2 | Â | Â | 2 | Â | ||
Total assets | $ | 5,292 | Â | $ | 5,665 | Â | ||
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Current liabilities: | ||||||||
Accounts payable | $ | 139 | $ | 132 | ||||
Accrued liabilities | Â | 218 | Â | Â | 294 | Â | ||
Total current liabilities | 357 | 426 | ||||||
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Deferred income and other noncurrent obligations | Â | 74 | Â | Â | 74 | Â | ||
Total liabilities | 431 | 500 | ||||||
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TJT 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; 4,496,287 and 4,532,862 shares outstanding | 5 | 5 | ||||||
Capital surplus | 5,867 | 5,867 | ||||||
Retained earnings | (995 | ) | (709 | ) | ||||
Treasury shares | Â | (16 | ) | Â | - | Â | ||
Total TJT shareholders' equity | 4,861 | 5,163 | ||||||
Non-controlling interest | Â | - | Â | Â | 2 | Â | ||
Total equity | Â | 4,861 | Â | Â | 5,165 | Â | ||
Total liabilities and equity | $ | 5,292 | Â | $ | 5,665 | Â |
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T.J.T., INC. | ||||||||
CONSOLIDATED STATEMENTS OF OPERATION (Unaudited) | ||||||||
(Dollars in thousands except per share amounts) | ||||||||
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For the three months ended December 31, | Â | 2010 | Â | Â | 2009 | Â | ||
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Sales (net of returns and allowances): | ||||||||
Axles and tires | $ | 831 | $ | 1,338 | ||||
Accessories and siding | Â | 518 | Â | Â | 500 | Â | ||
Total sales | 1,349 | 1,838 | ||||||
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Cost of goods sold | ||||||||
Axles and tires | 732 | 1,217 | ||||||
Accessories and siding | Â | 343 | Â | Â | 314 | Â | ||
Cost of goods sold | Â | 1,075 | Â | Â | 1,531 | Â | ||
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Gross profit | 274 | 307 | ||||||
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Selling, general and administrative expenses | Â | 605 | Â | Â | 691 | Â | ||
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Operating loss | (331 | ) | (384 | ) | ||||
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Interest income | 6 | 3 | ||||||
Property held for sale loss | (1 | ) | - | |||||
Equity investment income | 32 | - | ||||||
Rental income | 6 | 3 | ||||||
Other income | Â | 2 | Â | Â | 17 | Â | ||
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Loss before non-controlling interest and taxes | (286 | ) | (361 | ) | ||||
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Income tax (benefit) expense | Â | - | Â | Â | - | Â | ||
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Net loss attributable to TJT | $ | (286 | ) | $ | (361 | ) | ||
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Net loss attributable to TJT common shareholders: | ||||||||
Basic | $ | (0.06 | ) | $ | (0.08 | ) | ||
Diluted | $ | (0.06 | ) | $ | (0.08 | ) | ||
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Weighted average shares outstanding: | ||||||||
Basic | 4,496,287 | 4,532,862 | ||||||
Diluted | 4,499,576 | 4,535,077 |
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T.J.T., INC. | ||||
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) | ||||
(Dollars in thousands) | ||||
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For the three months ended December 31, | 2010 | 2009 | ||
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Cash flows from operating activities: | ||||
Net loss | $ (286) | $ (361) | ||
Adjustments to reconcile net loss to net cash provided (used) by operating activities: | ||||
Depreciation and amortization | 18 | 37 | ||
Loss on sale of other assets held for sale | 1 | - | ||
Gain on sale of assets | (2) | (17) | ||
Gain on sale of equity investment | (30) | - | ||
Equity investment earnings | (2) | - | ||
Change in accounts receivables | 158 | 213 | ||
Change in inventories | 222 | 150 | ||
Change in prepaid expenses and other current assets | (68) | (38) | ||
Change in accounts payable | 7 | 111 | ||
Change in other assets and liabilities | (76) | (19) | ||
Net cash provided (used) by operating activities | (58) | 76 | ||
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Cash flows from investing activities: | ||||
Purchases of property, plant and equipment | (10) | (9) | ||
Repayments received on notes receivable | 4 | 5 | ||
Proceeds from sale of assets | 7 | 20 | ||
Proceeds from sale of equity investment | 30 | - | ||
Proceeds from sale of other assets held for sale | 5 | - | ||
Net cash provided by investing activities | 36 | 16 | ||
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Cash flows from financing activities: | ||||
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Purchase of treasury shares | (16) | - | ||
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Net cash used by financing activities | (16) | - | ||
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Net change in cash and cash equivalents | (38) | 92 | ||
Cash and cash equivalents at October 1 | 1,825 | 889 | ||
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Cash and cash equivalents at September 30 | $ 1,787 | $ 981 |
Contacts:
T.J.T., Inc.
Senior Vice President and Chief Financial Officer
Cindy
Truchot, 208-365-5321