TX Holdings Reports First Quarter Results for 2021 Fiscal Year

Rhea-AI Summary

TX Holdings, Inc. (OTC PINK: TXHG) reported a robust first quarter for the fiscal year 2021, achieving revenues of $882,386, marking a 50% increase year-over-year. The company shifted from a net loss of $58,345 to a net income of $75,189, driven by increased demand for mining and rail products amid an expected recovery in the coal industry. Gross profit improved to 23.5% of revenue from 17.7% the previous year. Accounts receivable surged 123.6%, indicating strong sales momentum.

Positive

• Revenue increased by 50% year-over-year to $882,386.
• Net income turned positive at $75,189, compared to a loss of $58,345 last year.
• Gross profit margin improved from 17.7% to 23.5% of revenue.
• Cash and cash equivalents rose to $67,750 from $24,082 year-over-year.

Negative

• Cost of goods sold increased by 39.5% to $675,174.

ASHLAND, Ky., Feb. 03, 2021 (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 first quarter 2021 fiscal year.  During the 2021 first quarter, the company reported annual revenue of $882,386, a 50.0% increase when compared to the same period the prior year. Net income for the first fiscal quarter of 2021 was $75,189, an income increase of $133,534, when compared to a net loss of $58,345 for the prior year first quarter fiscal.

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

“Our 12/31/2020 first quarter fiscal was an appreciable improvement over the same period the prior year. Having experienced previous period of lower demand for our mine and rail products, primarily due to a decline in the U.S. coal mining industry, we are encouraged by our improved operational results driven by an increase in product demand during the first quarter of the current fiscal year, when we experienced a 50.0% revenue increase over the same period the prior year.

The U.S. Energy Information Administration (EIA), estimates that total U.S. coal production decreased by 24% to 537 million short tons in 2020. This decline largely reflected lower demand for coal from the electric power sector and the coal export market. Lower natural gas prices made coal less competitive for power generation. In 2021, EIA expects coal production to increase by 12% to 603 million short tons because of a forecast 41% increase in natural gas prices for electric generators, making coal more competitive in the electric power sector. EIA forecasts coal production will rise to 628 million short tons in 2022.

First Quarter Fiscal Year 2021 - Financial Summary

Revenue for the first fiscal quarter ended December 31, 2020 was $882,386 as compared to $588,267 for the same period in the prior year, an increase of $294,119 or 50.0%.

Cost of goods sold was $675,174 as compared to cost of goods sold of $483,919 for the same period the prior year, an increase of $191,255 or 39.5 %.

Gross profit for the fiscal quarter ended December 31,2020 increased as a percentage of revenue from 17.7% to 23.5% when compared to the same period the prior year. The gross profit increase is the result of higher margin products sold in the current quarter.

Operating expenses for the fiscal quarter ended December 31, 2020 were $144,169 as compared to $143,681 for the three months ended December 31, 2019, an increase of $488 or 0.3%.  

Other income/expense for the fiscal quarter ended December 31, 2020 resulted in income of $12,146 as compared to a loss of $19,012 in the same quarter the prior year. The favorable Other income/expense variance of $31,158 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 first fiscal quarter of 2020.

Net income for the current fiscal quarter was $75,189, compared to a net loss of $58,345, incurred in the same quarter in fiscal year 2019.

At December 31,2020, 2020, cash and cash equivalents were $67,750 compared to $24,082 at December 31, 2019.  Net cash provided by operating activities was $36,790 during the three months ended December 31, 2020. Net cash provided by operating activities was $22,949 during the same three months period in the prior year. During the current fiscal quarter ended December 31, 2020, net cash provided by financing activities was $6,878 due to an increase of stockholder’s advances.  Cash flow used by financing activities was $36,301 during the same period in the prior year.

Accounts receivable were $257,154 as of December 31, 2020, as compared to $114,985 as of December 31, 2019, an increase of $142,169 or 123.6%.

Inventory was $2,063,679 as of December 31, 2020, an increase of $24,288 or 1.2% as compared to December 31, 2019.

FAQ

What were TX Holdings' first quarter 2021 revenues?

TX Holdings reported revenues of $882,386 for the first quarter of fiscal 2021.

How did TX Holdings' net income change in the first quarter of 2021?

The company reported a net income of $75,189, a turnaround from a net loss of $58,345 in the same quarter last year.

What was the percentage increase in gross profit for TX Holdings?

Gross profit margin increased to 23.5% of revenue, up from 17.7% the previous year.

How did accounts receivable change for TX Holdings in Q1 2021?

Accounts receivable increased by 123.6% to $257,154 as of December 31, 2020.