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EAGLE, 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 $286,000, or $.06 per diluted share, for the second quarter of fiscal year 2012. 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.

Net sales decreased 24 percent in the three month period ending March 31, 2012 as compared to the same period a year ago. Net sales are down 13 percent for the six month period ending March 31, 2012 as compared to the same period in 2011. Net sales of axles and tires decreased 38 percent quarter over quarter, while sales of accessories decreased 14 percent. Net sales of axles and tires decreased 19 percent in the first six months of 2012 compared to 2011; net sales for accessories and siding decreased 14 percent in that same time period. Prior to closing in 2011, the Colorado and Washington facilities contributed sales of $211,000 and $468,000 for the three and six month periods of 2011. In the three months ended March 31, 2011, net sales included revenue associated with utilizing the Companyas freight trucks to provide motor carrier services to outside customers. Sales associated with motor carrier services were $11,000 and $32,000 in the three and six month periods ended March 31, 2011.

Excluding Colorado, Washington, and motor carrier services, net sales in the three and six month periods ending March 31, 2012 decreased 9% and increased 7%, respectively. On the same basis, the axle and tire segment sales decreased 20% and increased 9% for the same periods.

The Companyas gross margin increased 11 and 5 percentage points in the three and six month periods ended March 31, 2012 as compared to the same periods in 2011. The axle and tire segment increased 8 percentage points for the quarter primarily due to price increases to customers. Manufacturing expense dollars within comparable year over year facilities declined as a result of the Washington and Colorado market exits; and as a percent of sales were flat at 16% as the Company was able to leverage the reduction in sales. Gross margin for the accessories business segment increased to 39 percent in the second quarter of 2012 compared to 37 percent in the same quarter a year ago. Accessories gross margin in the second quarter increased as inventory that was written down in the third and fourth quarters of fiscal year 2011 was sold at higher than expected prices.

Selling, general, and administrative (SG&A) expense increased $152,000 and $188,000 during the three and six month periods ended March 31, 2012, respectively, when compared to the same 2011 periods. SG&A as a percentage of sales increased 29 and 15 percentage points during the three and six month periods compared to prior year. SG&A increased for the quarter despite recognizing savings of $60,000 incurred as a result of closing the Colorado and Washington facilities. It increased for the six month period 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 $115,000 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 first quarter of 2011. The increase in both periods includes the result of increased headcount, mainly the addition of full time Corporate Executive Officers, start-up costs associated with the Companyas new North Dakota facility, and expenses associated with the relocation of the corporate office to Eagle, Idaho.

The Companyas net loss for the quarter ending March 31, 2012 was $286,000 compared to a net loss of $296,000 for the same quarter a year ago. The net loss for the six months ended March 31, 2012 was $615,000 compared to a net loss of $582,000 in the same six month period a year ago. Improvements to net loss in the quarter reflects that the 2011 net loss includes an impairment loss on real estate held for sale of $88,000, offset by $30,000 of income related to the Company selling its interest in Ladder Lift Systems, L.L.C. The increase in the year-to-date 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 Companyas 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.

This release contains certain forward-looking statements, which are based on managementas 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 Companyas 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.

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