ASHLAND, Ky., Nov. 05, 2020 (GLOBE NEWSWIRE) -- 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 2020 fiscal year.  During the 2020 fiscal year, the company reported annual revenue of $2,335,590, a 40.6% decrease when compared to the same period the prior year. Net income for fiscal year 2020 was $4,128, an income decrease of $38,316, when compared to a net income of $42,444 for the prior year.

Mr. Shrewsbury, the company’s CEO and Chairman, stated that

“Our 9/30/2020 year was very disappointing. The coal mining industry was negatively impacted by reduced consumption of coal due to slowing economic growth related to COVID-19 and efforts to mitigate it. We are currently seeing in the current quarter a positive change resulting in some mines reopening and an increase in orders”.

The U.S. Energy Information Administration (EIA), expects total U.S. coal production for 2020 to be 525 million short tons compared with 705 MMst in 2019, a 26% decrease. The coal industry has experienced reduced demand from the U.S. electric power sector amid low natural gas prices which have contributed to coal mines idling and mine closures. EIA expects coal production to rise o t625 MMst in 2021, up 19% from 2020.This forecast increase reflects rising demand for coal from U.S. electricity generators because of higher natural gas prices compared with 2020.

Fiscal Year 2020 - Financial Summary

Revenue for the year ended September 30, 2020 was $2,335,590 as compared to $3,934,689 for the same period in the prior year, a decrease of $1,599,099 or 40.6%.

Cost of goods sold was $1,883,735 as compared to cost of goods sold of $3,313,609 for the same period the prior year, a decrease of $1,429,874 or 43.2 %.

Gross profit for the year ended September 30, 2020 increased as a percentage of revenue from 15.8% to 19.4% when compared to the same period the prior year. The gross profit increase is the result of higher margin products sold in the current year.

Operating expenses for the year ended September 30, 2020 were $505,793 as compared to $552,307 for the twelve months ended September 30, 2019, a decrease of $46,514 or 8.4%.  

Other income/expense for the year ended September 30, 2020 resulted in income of $58,606 as compared to a loss of $26,329 in the prior year. The favorable Other income/expense variance of $84,395 was the result primarily of a reduction in interest expense on the $2,000,000 promissory note due to Mr. William Shrewsbury, our chairman and CEO, who elected to forego any interest due to him by the Company for the year 2020.

Net income for the current year was $4,128, compared to a net income of $42,444, incurred in the fiscal year 2019.

At September 30, 2020, cash and cash equivalents were $24,082 compared to $17,098 at September 30, 2019.  Net cash used in operating activities was $113,677 during the twelve months ended September 30,2020. Net cash used in operating activities was $64,331 during the same twelve months period in the prior year.  Net cash used for investment in delivery equipment during the current fiscal year was $21,645 as compared to cash flow of $10,500 received from the sale of equipment the prior year.  During the fiscal year ended September 30, 2020, net cash provided by financing activities was $142,296 due to an increase of stockholder’s advances.  Cash flow provided by financing activities was $34,320 during the same period in the prior year.

Accounts receivable were $114,985 as of September 30, 2020, as compared to $275,356 as of September 30, 2020, a decrease of $160,371 or 58.2%.

Inventory was $2,039,391 as of September 30, 2020, an increase of $557,762 or 37.6% as compared to September 30, 2020. The Company has increased inventory in anticipation of higher sales in the 2021 fiscal year.

Contact:

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

TX HOLDINGS, INC.
BALANCE SHEETS
September 30, 2020 and 2019
  September 30,  September 30, 
  2020   2019  
ASSETS      
Current assets:      
Cash and cash equivalents$24,082  $17,098  
Accounts receivable, net of allowance for doubtful      
accounts of $ 0 at September 30, 2020 and September 30, 2019 114,985   275,356  
Inventory 2,039,391   1,481,629  
Other current assets 483   2,158  
Total current assets 2,178,941   1,776,241  
       
Inventory, non-current    350,000  
Property and equipment, net 28,075   15,144  
Total Assets$2,207,016  $2,141,385  
       
          LIABILITIES AND STOCKHOLDERS' DEFICIT      
       
Current liabilities:      
Accrued expenses, primarily to officers$264,179  $329,179  
Accounts payable 253,583   320,985  
Accrued interest to officer 559,726   559,726  
Advances from officer 388,287   181,487  
Deferred revenue 99,000   96,000  
Stockholder/officers advances for operations-warehouse rent 132,000   108,000  
Bank-term loan-current portion 429,866   69,011  
Other current liability 29,800   5,191  
Total current liabilities 2,156,441   1,669,579  
       
Bank-term loan,less current portion _  425,359  
Note payable to officer 2,000,000   2,000,000  
Total Liabilities 4,156,441   4,094,938  
       
Commitments and contingencies _  _ 
       
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, 2020 and September 30, 2019 9,293,810   9,293,810  
Additional paid-in capital 4,321,329   4,321,329  
Accumulated deficit (15,564,564)  (15,568,692) 
Total stockholders' deficit (1,949,425)  (1,953,553) 
Total Liabilities and Stockholders' Deficit$2,207,016  $2,141,385  
       

 

 TX  HOLDINGS, INC. 
 STATEMENTS OF OPERATIONS 
For the Years Ended September 30, 2020 and 2019 
     September 30,  September 30, 
     2020   2019  
          
 Revenue  $2,335,590  $3,934,689  
          
 Cost of goods sold  (1,883,735)  (3,313,609) 
          
 Gross profit   451,855   621,080  
          
 Operating expenses, except items shown       
 separately below  383,179   399,106  
 Commission expense  106,780   123,053  
 Professional fees  4,611   8,359  
 Bad debt expense  2,510   14,621  
 Depreciation expense  8,713   7,168  
 Total operating expenses  505,793   552,307  
          
 Income from operations  (53,938)  68,773  
          
 Other income and (expense):       
 Loss on disposal of property and equipment  _  (7,000) 
 Other income   79,206   112,043  
 Interest expense  (21,140)  (131,372) 
          
 Total other income and (expense), net  58,066   (26,329) 
          
 Net income/(loss) $4,128  $42,444  
          
 Net income per common share       
 Basic  $0.00  $0.00  
          
 Weighted average of common shares       
 outstanding-        
 Basic   48,053,084   48,053,084  
   

 

TX HOLDINGS, INC.
STATEMENTS OF CASH FLOWS
For the Years Ended September 30, 2020 and 2019
       September 30,  September 30,
        2020    2019 
Cash flows provided/(used) in operating activities:          
Net income/(loss)    $4,128   $42,444 
Adjustments to reconcile net income/(loss) to net cash used in     
operating activities:        
Depreciation expense     8,714    7,168 
Bad debt expense     2,510    14,621 
Loss on sale of fixed asset   _   7,000 
Changes in operating assets and liabilities:      
Accounts receivable, net    157,861    (30,283)
Inventory     (207,762)   (33,089)
Commission advances    _  _
Other current assets     1,675    (1,058)
Accrued liabilities, primarily to officer   (65,000)   (87,457)
Accounts payable     (67,402)   (208,868)
Accrued interest to officers   _   100,000 
Stockholder/officers advances for operations-warehouse rent  24,000    24,000 
Deferred revenue     3,000    96,000 
Other current liabilities    24,609    5,191 
Net cash used in operating activities    (113,667)   (64,331)
           
Cash flows provided/(used) in investing activities:          
Purchase of equipment     (21,645)  _
Proceeds from sale of fixed asset   _   10,500 
Net cash provided/(used) in investing activities   10,500    10,500 
           
Cash flows provided/(used ) in financing activities:          
Repayment of bank term loan    (64,504)   (54,680)
Proceeds from officer advances    354,800    219,500 
Repayment of officer advances    (148,000)   (130,500)
Net cash provided in financing activities   142,296    34,320 
           
Decrease in cash and cash equivalents       6,984    (19,511)
Cash and cash equivalents at beginning of period       17,098    36,609 
           
Cash and cash equivalents at end of period      $24,082   $17,098 
           
Supplemental Disclosure of Cash Flow Information  
           
Cash paid during the year for interest      $19,273   $28,928