N@N

T.J.T., Inc. Reports Results for Third Quarter of Fiscal 2011

^{Published on 2011-08-06 12:00:24 - Market Wire}
 

EMMETT, Idaho--([ BUSINESS WIRE ])--T.J.T., Inc. (the Company) (Pink Sheets:AXLE)a"T.J.T., Inc., a major supplier of axles, tires, and set-up supplies to the manufactured housing industry, announced a net loss of $346,000 for its third quarter of fiscal 2011.

Net sales decreased 30 percent in the three-month period ending June 30, 2011, as compared to the same period a year ago. Net sales are down 24 percent for the nine-month period ending June 30, 2011, as compared to the same period in 2010. In 2010, the axle and tire segment included sales associated with utilizing the Companya™s freight trucks to provide motor carrier services to outside customers. Sales associated with motor carrier services were $35,000 and $214,000 in the three- and nine-month periods ended June 30, 2011, respectively. Motor carrier services began winding down in February of 2010. Excluding sales associated with motor carrier services, net sales declined 29 percent and 21 percent in the three- and nine-month periods of 2011, respectively, as compared to the same periods a year ago. Net sales of axles and tires decreased 32 percent quarter over quarter, and declined 30 percent in the first nine months of 2011 compared to 2010. Excluding sales in 2010 associated with motor carrier services, net sales of axles and tires declined 30 percent and 25 percent in the three- and nine-month periods of 2011. Net sales of siding and accessories decreased 26 percent and 12 percent in the 2011 three- and nine-month periods compared to the same 2010 periods.

The Companya™s gross margin decreased 3 percentage points to 17 percent in the three-month period and increased 2 percentage points to 20 percent in the nine-month period ending June 30, 2011, as compared to the same periods in 2010. The decreased margin for the quarter is primarily due to new tire cost increases and larger lower of cost or market inventory adjustments in anticipation of Colorado inventory liquidation.

Consolidated selling, general, and administrative (SG&A) expense decreased $123,000 and $336,000 during the three- and nine-month periods, respectively, when compared to the same 2010 periods. SG&A declined primarily as a result of reductions in wages and other employee-related expenses offset by increased bad debt expense. The Company incurred bad debt charges of $58,000 in 2011 as a result of Palm Harbor Homes filing for bankruptcy on November 29, 2010.

The Companya™s net loss for the quarter ending June 30, 2011, was $346,000, compared to a net loss of $299,000 for the same quarter a year ago. The net loss for the nine months ended June 30, 2011, was $928,000, compared to a net loss of $1,031,000 in the same nine-month period a year ago. The increase in the quarterly net loss compared to that of the same period in 2010 is driven primarily by new tire cost increases and the write-down of inventory to lower of cost or market. Improvements to net losses in the nine months ending June 30, 2011, were due to increases in gross margin as a percent to sales and lower SG&A. The net loss in 2011 includes an impairment loss on real estate held for sale of $154,000, offset by $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. Motor carrier services contributed $12,000 to the 2010 third-quarter net loss and $115,000 to the net loss in the first nine months of 2010.

The Company has leased a site in Watford City, North Dakota, and plans to open a distribution facility that will begin selling product in the fourth quarter. This facility will handle the wholesale and retail distribution of manufactured home set-up supplies, including piers, anchors, skirting, and accessories.

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, California, and Colorado, and serves 14 western states. In addition to the recycling business, T.J.T. also sells aftermarket products to manufactured housing and residential markets. The Company has decided to close its Colorado facility. Inventory and property, plant and equipment will either be sold to third parties or transferred to other Company locations.

This release contains certain forward-looking statements, which are based on managementa™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 companya™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:

Shawn Kling
President and Chief Executive Officer
T.J.T., Inc.
208-365-5321