Ashland, Kentucky (PRWEB) December 16, 2016
TX Holdings, Inc. (OTC Markets PINK: TXHG), a supplier of mining and rail products to the U.S. coal mining industry, today announced financial results for its 2016 fiscal year. During the 2016 fiscal year, the company reported annual revenue of $2,128,278, a 31.5% decrease when compared to the same period the prior year. Net loss for fiscal year 2016 was $678,719, a loss increase of $306,210, when compared to a net loss of $372,509 for the prior year.
Mr. Shrewsbury, the company’s CEO and Chairman, stated that,
“Our 9/30/16 year was very disappointing. The coal mining industry was negatively impacted by increasingly damaging regulations and, an administration looking to basically shutting down the industry causing many mines to close prematurely. We are currently seeing a positive change resulting in some mines reopening and a slow but important increase in orders.
"The U.S. Energy Information Administration expects that U.S. electricity produced by coal will increase from its current 31%, which will help our sales and hopefully return our company to sustained profitability.
"Our current year consolidated financial results were negatively impacted by an inventory write-down and an increase in our allowance for doubtful accounts, representing a cumulative loss of $375,000 from our reported annual loss of $678.719.”
Fiscal Year 2016 - Financial Summary
Revenue for the year ended September 30, 2016 was $2,128,278 as compared to $3,105,733 for the same period in the prior year, a decrease of $977,455 or 31.5%.
Cost of goods sold was $1,849,289 as compared to cost of goods sold of $2,469,697 for the same period the prior year, a decrease of $620,408 or 25.1 %.
Gross profit for the year ended September 30, 2016 decreased as a percentage of revenue from 20.5% to 13.1% when compared to the same period the prior year. The gross profit decrease is the result of a $275,000 inventory write-down in the current year.
Operating expenses for the year ended September 30, 2015 were $837,209 as compared to $898,342 for the twelve months ended September 30, 2015, a decrease of $61,133 or 6.8%.
Other expenses increased by $10,296 or 9.3% compared to the same period in the prior year.
Net loss for the current year was $678,719, compared to a net loss of $372,509, incurred in the fiscal year 2015.
At September 30, 2016, cash and cash equivalents were $3,062 compared to $61,564 at September 30, 2015. Net cash used in operating activities was $82,165 during the twelve months ended September 30,2016. Net cash used in operating activities was $253,626 during the same twelve months period in the prior year. There was no cash flow from investing activities for the fiscal year ended September 30, 2016, as compared to cash flow used in investing activities of $2,843 during the same period in the prior year. During the fiscal year ended September 30, 2016, net cash provided by financing activities was $23,663 due to an increase of a stockholder’s advance by $74.000. Cash flow provided by financing activities was $245,249 during the same period in the prior year.
Accounts receivable were $235,402 as of September 30, 2016, as compared to $585,043 as of September 30, 2015, a decrease of 59.8%. A $100,000 increase in the allowance for doubtful accounts during the current year, partially accounted for the decrease in receivable.
Inventory was $2,106,018 as of September 30, 2016, a decrease of 16.5% as compared to September 30, 2015. During the fiscal year 2016, the Company recorded a $275,000 inventory write-down.
The attached consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto included in the Company’s September 30, 2016 Annual Report on Form 10-K.
Forward-Looking and Cautionary Statements
Except for the historical information and discussions contained herein, statements contained in this release may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 (PSLRA) and other applicable law. When used, the words "believe", "anticipate", "estimate", "project", "should", "expect," “plan”, “assume” and similar expressions that do not relate solely to historical matters identify forward-looking statements. Forward-looking statements are based on the company’s current assumptions regarding future business and financial performance. Forward-looking statements concerning future plans or results are necessarily only estimates and actual results could differ materially from expectations. These statements involve a number of risks, uncertainties and other factors that could cause actual results to differ materially, including the following: reliance upon indebtedness furnished or guaranteed by our CEO; risks related to substantial indebtedness; our ability to implement our business strategy; our financial strategy; a downturn in economic environment; our failure to meet growth and productivity objectives; a failure of our innovation initiatives; risks from investing in growth opportunities; fluctuations in financial results and purchases; the impact of local legal, economic, political and health conditions; adverse effects from environmental matters and tax matters; ineffective internal controls; our use of accounting estimates; our ability to attract and retain key personnel and our reliance on critical skills; impact of relationships with critical suppliers; currency fluctuations and customer financing risks; the impact of changes in market liquidity conditions and customer credit risk on receivables; our reliance on third party distribution channels; Securities and Exchange Commission regulations related to trading in “penny stocks;” the continued availability of certain financing provided by our CEO; and other risks, uncertainties and factors discussed in our Quarterly Reports on Form10-Q, our Annual Reports on Form 10-K, and in our other filings with the SEC or in materials incorporated therein by reference. Any forward-looking statement in this release speaks only as of the date on which it is made. We assume no obligation to update or revise any forward-looking statement. Notwithstanding the above, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, expressly state that the safe harbor for forward looking statements does not apply to companies that issue penny stocks. Because we may from time to time be considered to be an issuer of penny stock, the safe harbor for forward looking statements under the PSLRA may not be apply to us at certain times.
William “Buck” Shrewsbury
Chairman and CEO
TX Holdings, Inc.