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 December 29, 2015 - 9:00 AM EST
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TX Holdings Reports Full Year Results for Fiscal 2015

ASHLAND, KY--(Marketwired - Dec 29, 2015) - TX Holdings, Inc. (OTCQB: TXHG), a supplier of mining and rail products to the U.S. coal mining industry, today announced financial results for the full fiscal year ended September 30, 2015. During the year, revenues decreased due to overall lower sales demand and the company incurred a $372,509 net loss. Gross profit was $626,036 compared with $1,135,696 in the fiscal 2014.

Commenting on the results, Mr. Shrewsbury, the company's CEO and Chairman, stated that

"We were very disappointed with the results of our 2015 fiscal year. The anticipated positive turn-around in the U. S. coal mining industry did not materialize as anticipated; however, we continue to have confidence in the future of the U.S. coal mining industry and, we are fully committed to its future. Coal, on dollar cost basis per BTU remains one of the cheapest fuels in the energy industry. As we have previously stated, the recent ruling by the Supreme Court on certain regulations adopted by the EPA and affecting the coal mining industry's economic growth, coupled with efficiencies and consolidation in the industry augur well for the future of our business."

Financial Summary

Revenue for the 2015 fiscal year was $3,105,733, a decrease of $1,179,887 or 27.5% when compared to 2014.

Cost of goods sold for the year was $2,469,697 compared to $3,149,924 in 2014, a decrease of 21.6%.

Gross profit for the year 2015 was $636,036, a decrease of 44% when compared to 2014.

Net loss for 2015 was $372,509 compared to net income in 2014 of $341,300.

Loss per diluted share was $(0.01) compared to earnings per share of $0.01 for 2014.

Operating expenses for 2015 decreased 23.4% as compared to 2014. Other expenses for 2015 were $110,203 compared to other income of $378,683 in 2014.

Net cash used in operating activities for the year ended September 30, 2015 was $253,626 as compared to net cash used in operating activities of $291,920 during the same period in 2014. The cash used decrease was a direct result of the company's initiative to reduce inventory to meet anticipated lower sales demand. Cash flows provided by financing activities increased by $33,649 due to further drawdown under the company's line of credit of $163,949 and net cash advance from Mr. Shrewsbury of $81,300. At September 30, 2015, the company had cash and cash equivalents of $61,564, a decrease of $11,220 when compared to September 30, 2014.

Inventories (current and non-current) and accounts payable decreased 8.7% and 10.2% respectively, compared to year end 2014 as a result of lower sales demand. Accounts receivable were $585,043 as of September 30, 2015, as compared to $502,617 as of September 30, 2014, an increase of 16.4%. To fund ongoing operations, the company continued to rely upon financing provided by its CEO, including a note and noninterest bearing advances aggregating approximately $2.12 million and a secured bank line of credit, of which $712,449 had been drawn upon at fiscal year-end 2015 that is guaranteed by our CEO.

Subsequent Events

On December 3, 2015, we obtained a new term loan from our bank of $711,376, the proceeds of which were utilized to repay our line of credit. The loan is for a term of five years and currently bears interest at the rate of 3.25% per annum. We agreed to make equal monthly repayments of principal and interest under the loan of $6,967, commencing January 3, 2016. The loan is secured by a priority security interest in our inventory and accounts receivable, is guaranteed by our CEO, Mr. Shrewsbury, and our indebtedness to Mr. Shrewsbury is subordinated to the bank loan.

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: our ability to implement our business strategy; our financial strategy; a downturn in economic environment, including in the U.S. coal industry; changes in regulations affecting the U.S. coal mining industry and U.S. coal-fired power plants; 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 Forms10-Q, our Annual Report 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 1933, 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.

   
TX HOLDINGS, INC.  
CONSOLIDATED BALANCE SHEETS  
September 30, 2015 and 2014  
             
    September 30,     September 30,  
    2015     2014  
ASSETS                
Current assets:                
  Cash and cash equivalents   $ 61,564     $ 72,784  
  Accounts receivable, net of allowance for doubtful                
  accounts of $13,643 and $32,343, respectively     585,043       502,617  
  Inventory     2,223,037       2,762,535  
  Commission advances     48,338       _  
  Note receivable-current     10,000       10,000  
  Other current assets     27,674       45,327  
    Total current assets     2,955,656       3,393,263  
                 
Inventoy, non-current (Note 1)     300,000       _  
Property and equipment, net (Note 2)     66,575       72,530  
Note receivable, less current portion     19,983       21,289  
Other     500       _  
                 
    Total Assets   $ 3,342,714     $ 3,487,082  
                 
LIABILITIES AND STOCKHOLDERS' DEFICIT                
                 
Current liabilities:                
  Accrued liabilities   $ 696,624     $ 606,099  
  Accounts payable     946,576       1,054,556  
  Advances from officer (Note 7)     124,637       43,337  
  Bank-line of credit (Note 9 and 11)     712,449       548,500  
    Total current liabilities     2,480,286       2,252,492  
                 
Note payable to offier (Note 7)     2,000,000       2,000,000  
  Total Liabilities     4,480,286       4,252,492  
                 
Commitments and contingencies (Notes 6 and 7)                
                 
Stockholders' deficit:                
  Preferred stock: no par value, 1,000,000 shares authorized                
  no shares outstanding     _       _  
  Common stock: no par value, 250,000,000 shares                
  authorized, 48,053,084 shares issued and outstanding                
  at September 30, 2015 and 2014     9,293,810       9,293,810  
  Additional paid-in capital     4,321,329       4,320,982  
  Accumulated deficit     (14,752,711 )     (14,380,202 )
    Total stockholders' deficit     (1,137,572 )     (765,410 )
                 
  Total Liabilities and Stockholders' Deficit   $ 3,342,714     $ 3,487,082  
                 
                 
   
TX HOLDINGS, INC.  
CONSOLIDATED STATEMENTS OF OPERATIONS  
For the Years Ended September 30, 2015 and 2014  
             
    September 30,     September 30,  
    2015     2014  
                 
Revenue   $ 3,105,733     $ 4,285,620  
                 
Cost of goods sold     2,469,697       3,149,924  
                 
Gross profit     636,036       1,135,696  
                 
Operating expenses, except items shown                
separately below     551,292       490,266  
  Commission expense     236,119       458,086  
  Professional fees     86,837       179,996  
  Stock-based compensation     347       16,702  
  Bad debt expense     13,643       18,350  
  Depreciation expense     10,104       9,679  
    Total operating expenses     898,342       1,173,079  
                 
Loss from operations     (262,306 )     (37,383 )
                 
Other income and (expense):                
  Legal settlement (Note 6)     _       374,025  
  Gain on disposal of fixed assets     _       10,807  
  Gain on extinguishment of accounts payable     _       93,167  
  Other income     15,505       _  
  Interest expense     (125,708 )     (99,316 )
                 
    Total other income and (expense), net     (110,203 )     378,683  
                 
Income (loss) before provision for                
income taxes     (372,509 )     341,300  
                 
Provision for income taxes     _       122,000  
Utilization of net operating loss carry forward     _       (122,000 )
                 
Net income (loss)   $ (372,509 )   $ 341,300  
                 
Net earnings (loss) per common share                
Basic   $ (0.01 )   $ 0.01  
                 
Weighted average of common shares                
outstanding-                
Basic     48,053,084       48,053,084  
   
TX HOLDINGS, INC.  
CONSOLIDATED STATEMENTS OF CASH FLOWS  
For the Years Ended September 30, 2015 and 2014  
    September 30,     September 30,  
    2015     2014  
Cash flows used in operating activities:                
  Net income (loss)   $ (372,509 )   $ 341,300  
  Adjustments to reconcile net income (loss) to net cash used in operating activities:                
    Depreciation expense     10,104       9,679  
    Bad debt expense     13,643       18,350  
    Gain on extinguishment of accounts payable     _       (93,167 )
    Stock-based compensation     347       16,702  
    Gain on disposal of fixed assets     _       (10,807 )
    Other assets     (500 )     200  
  Changes in operating assets and liabilities:                
    Accounts receivable     (96,069 )     (95,037 )
    Inventory     539,498       (912,548 )
    Commission advances     (48,338 )     3,546  
    Other current assets     17,653       (22,052 )
    Inventory, non-current     (300,000 )     _  
    Accrued liabilities     72,525       71,538  
    Accounts payable     (107,980 )     362,376  
    Stockholder/officers advances for operations     18,000       18,000  
  Net cash used in operating activities     (253,626 )     (291,920 )
                 
Cash flows used in investing activities:                
    Proceeds received from disposal of fixed assets     _       18,000  
    Notes receivable     1,306       6,091  
    Purchase of equipment     (4,149 )     (46,015 )
  Net cash used in investing activities     (2,843 )     (21,924 )
                 
Cash flows provided by financing activities:                
    Proceeds from bank line of credit     163,949       300,000  
    Proceeds from stockholder/officer advances     127,300       34,450  
    Repayment of stockholder/officer advances     (46,000 )     (122,850 )
  Net cash provided by financing activities     245,249       211,600  
                 
Decrease in cash and cash equivalents     (11,220 )     (102,244 )
Cash and cash equivalents at end of year beginning of year     72,784       175,028  
                 
Cash and cash equivalents at end of year   $ 61,564     $ 72,784  
Supplemental Cash Flow Disclosure                
                 
Interest Paid   $ 23,575     $ 10,798  
                 
                 

Contact:

William "Buck" Shrewsbury
Chairman and CEO
TX Holdings, Inc.
(606) 928-1131


Source: Marketwired (Canada) (December 29, 2015 - 9:00 AM EST)

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