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 $329,000, or $.07 per diluted share, for the first quarter of fiscal year 2012.

Net sales decreased three percent in the three month period ending December 31, 2011 as compared to the same period a year ago. Net sales of axles and tires increased two percent in the first three months of 2012 compared to 2011. Net sales for accessories and siding decreased 14 percent in that same time period. Prior to closing in June 2011, the Colorado and Washington facilities contributed sales of $256,000 to the first quarter of fiscal 2011. In the three months ended December 31, 2010, net sales included revenue associated with utilizing the Company's freight trucks to provide motor carrier services to outside customers. Sales associated with motor carrier services were $21,000 in that three month period.

Excluding Colorado, Washington, and motor carrier services, net sales increased 22%. On the same basis, the axle and tire segment sales increased 53% due to a combination of increased pricing and higher axle and tire volumes stemming from the increased demand for modular and manufactured homes in North Dakota.

The Company's gross margin increased one percentage point to 21 percent in the three month period ended December 31, 2011 as compared to the same period in 2010.

Selling, general, and administrative (SG&A) expense increased $35,000 during the three month period when compared to the same period a year ago. SG&A expense as a percentage of sales increased three percentage points during the three month period compared to prior year. SG&A increased despite recognizing the benefit of reversing the $107,000 liability associated with the Ulysses Mori case as result of a favorable Idaho Supreme Court ruling, savings of $55,000 incurred as a result of closing the Colorado and Washington facilities, and $58,000 in bad debt charges resulting from the Palm Harbor Homes bankruptcy filing during the three months ended December 31, 2010. The increase is a result of increased headcount, mainly the addition of full time Corporate Executive Officers, start-up costs associated with the Company's new North Dakota facility, and expenses associated with the relocation of the corporate office to Eagle, Idaho.

The Company's net loss for the quarter ending December 31, 2011 was $329,000 compared to a net loss of $286,000 for the same quarter a year ago. The increase in the first quarter net loss compared to that of the same period in fiscal 2011 was driven primarily by increased administrative expenses, start-up costs associated with the new North Dakota facility, and corporate office relocation expenses. The net loss in the three month period ending December 31, 2010 includes $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.

The Company's North Dakota operation began distributing recreational vehicle parts and providing associated repair services in the first quarter. The Company plans to launch its Field Service Division to support the oil and gas industry in 2012. This will include workforce housing support and mobile shower and laundry services.

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 and California and serves ten western states. In addition to the recycling business, T.J.T., Inc. 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.otcmarkets.com, or you may contact:

Nicole L. Glisson
Senior Vice President, Chief Financial Officer and Treasurer
T.J.T., Inc.
(208) 472-2500

 
T.J.T., INC.
BALANCE SHEETS (Unaudited)
(Dollars in thousands)
   
 
Dec. 31 Sept. 30
  2011     2011  
 
Current assets:
Cash and cash equivalents $ 1,229 $ 1,875
Accounts receivable (net of allowances and discounts of $117 and $111)
132 337
Current portion of notes receivable 73 74
Inventories 1,158 1,189
Prepaid expenses and other current assets   219     181  
Total current assets 2,811 3,656
 
Property, plant and equipment, net of accumulated depreciation
574 317
 
Notes receivable, net of current portion 28 29
Real estate held for sale 474 474
Real estate held for investment 171 167
Other assets   13     5  
Total assets $ 4,071   $ 4,648  
 
Current liabilities:
Accounts payable $ 179 $ 244
Accrued liabilities 121 286
Deferred income   51     69  
Total current liabilities 351 599
 
 
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 shares outstanding
5 5
Capital surplus 5,872 5,872
Retained earnings   (2,141 )   (1,812 )
3,736 4,065
 
Treasury shares, at cost, 46,735 shares   (16 )   (16 )
Total shareholders' equity   3,720     4,049  
Total liabilities and shareholders' equity $ 4,071   $ 4,648  
 
   
T.J.T., INC.
STATEMENTS OF OPERATION (Unaudited)
(Dollars in thousands except per share amounts)

 

 
For the three months ended December 31,   2011     2010  
 
Sales (net of returns and allowances):
Axles and tires $ 847 $ 831
Accessories and siding 446 518
Other   19     -  
Total sales 1,312 1,349
 
Cost of goods sold
Axles and tires 746 732
Accessories and siding 282 343
Other   3     -  
Cost of goods sold   1,031     1,075  
 
Gross profit 281 274
 
Selling, general and administrative expenses   641     606  
 
Operating loss (360 ) (332 )
 
Interest income 5 6
Equity investment income - 32
Rental income 7 6
Gain on sale of assets   19     2  
 
 
Net loss $ (329 ) $ (286 )
 
Net loss to common shareholders:
Basic $ (0.07 ) $ (0.06 )
Diluted $ (0.07 ) $ (0.06 )
 
Weighted average shares outstanding:
Basic 4,532,862 4,532,862
Diluted 4,548,732 4,536,151
 
 
T.J.T., INC.
STATEMENTS OF CASH FLOWS (Unaudited)
(Dollars in thousands)
 
 
For the three months ended December 31,   2011     2010  
 
Cash flows from operating activities:
Net loss $ (329 ) $ (286 )
Adjustments to reconcile net loss
to net cash used by operating activities:
Depreciation and amortization 15 18
Loss on sale of other assets held for sale - 1
Gain on sale of assets (19 ) (2 )
Gain on sale of equity investment - (30 )
Equity investment earnings - (2 )
Change in accounts receivables 205 158
Change in inventories 31 222
Change in prepaid expenses and other current assets (38 ) (68 )
Change in accounts payable (65 ) 7
Change in other assets and liabilities   (173 )   (76 )
Net cash used by operating activities (373 ) (58 )
 
Cash flows from investing activities:
Purchases of property, plant and equipment (272 ) (10 )
Repayments received on notes receivable 2 4
Proceeds from sale of assets 1 7
Proceeds from sale of equity investment - 30
Investment in other assets held for investment (4 ) -
Proceeds from sale of other assets held for sale   -     5  
Net cash provided (used) by investing activities   (273 )   36  
 
Cash flows from financing activities:
Purchase of treasury shares   -     (16 )
Net cash used by financing activities   -     (16 )
 
Net change in cash and cash equivalents (646 ) (38 )
Cash and cash equivalents at October 1   1,875     1,825  
 
Cash and cash equivalents at December 30 $ 1,229   $ 1,787  

T.J.T., Inc.
Nicole L. Glisson, 208-472-2500
Senior Vice President, Chief Financial Officer and Treasurer