/EINPresswire.com/ -- ASHLAND, KY -- (Marketwired) -- 01/25/16 -- TX Holdings, Inc. (OTCQB: TXHG)

• Revenue for first quarter of fiscal 2016, increased 22%
• Gross profit for first quarter of 2016 increased 103% when compared to 2015
• Income from operations was $64,165 compared to loss from operations in same quarter of prior year
• Net income was $30,632 compared to a net loss of $145,283 in 2015

TX Holdings, Inc. (OTCQB: TXHG), a supplier of mining and rail products to the U.S. coal mining industry, today announced financial results for its 2016 first fiscal quarter. During the 2016 first fiscal quarter, the company reported quarterly revenue of $782,265, a 22.1% increase when compared to the same quarter in the prior year. Net income for the first quarter of fiscal 2016 was $30,632, an increase of $175,915 when compared to a net loss of $145,283 for the prior year.

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

"We are pleased with our quarterly results, especially since this is the first recent quarter in which we have reported net income. Considering the continued weakness in our industry, we have focused on expanding our customer base and introducing new product lines, while at the same time keeping our costs down and controlling our overhead. Based on the simple fact that our industry is an important and integral part of the U.S. economy, we are optimistic that our industry will recover and we are well positioned through our products pricing and quality and low cost structure to fully participate and remain profitable as we continue to grow our business."

First Fiscal Quarter of 2016 - Financial Summary

Revenue for the three months ended December 31, 2015 was $782,265 as compared to $640,788 for the same period in the prior year, an increase of $141,477 or 22.1%.

Cost of goods sold was $543,846 as compared to cost of goods sold of $523,346 for the same quarter in the prior year, an increase of $20,500 or 3.9 %.

Gross profit for the quarter ended December 31, 2015 increased as a percentage of revenue from 18.3% to 30.5% when compared to the same period the prior year.

Operating expenses for the three months ended December 31, 2015 were $174,254 as compared to $237,250 for the three months ended December 31, 2014, a decrease of $62,996 or 26.6%. Commission expense was $27,831 compared to $40,573 the same period in the prior year, a decrease of $12,742 or 31.4%. Other operating expenses decreased by $31,136 or 20.2% compared to the same period in the prior year.

Income from operations for the quarter ended December 31, 2015, was $64,165, when compared to a loss from operations of $119,808 in the same period in the prior year.

Net income was $30,632, compared to a net loss of $145,283, incurred in the first fiscal quarter of 2015.

At December 31, 2015, cash and cash equivalents were $2,000 compared to $61,564 at September 30, 2015. Net cash used in operating activities was $86,599 during the three months ended December 31, 2015. Net cash used in operating activities was $151,084 during the same three months period in the prior year. There was no cash flow from investing activities for the three months ended December 31, 2015, as compared to cash flow used in investing activities of $1,102 during the same period in the prior year. During the three months ended December 31, 2015, net cash provided by financing activities was $27,035 due to an increase of a stockholder's advance by $33,000. Cash flow provided by financing activities was $160,349 during the same period in the prior year.

Accounts receivable were $460,803 as of December 31, 2015, as compared to $585,043 as of September 30, 2014, a decrease of 21.2%.

Inventory was $2,467,268 as of December 31, 2015 an increase of 11.0% as compared to September 30, 2015. In anticipation of the continued growth of its rail and mining supplies business, the company increased its inventory levels to meet anticipated higher sales demand.

Forward-Looking and Cautionary Statements

Except for the historical information and discussions contained herein, statements contained in this release may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 (PSLRA) and other applicable law. When used, the words "believe", "anticipate", "estimate", "project", "should", "expect," "plan", "assume" and similar expressions that do not relate solely to historical matters identify forward-looking statements. Forward-looking statements are based on the company's current assumptions regarding future business and financial performance. Forward-looking statements concerning future plans or results are necessarily only estimates and actual results could differ materially from expectations. These statements involve a number of risks, uncertainties and other factors that could cause actual results to differ materially, including the following: reliance upon indebtedness furnished or guaranteed by our CEO; risks related to substantial indebtedness; our ability to implement our business strategy; our financial strategy; a downturn in economic environment; our failure to meet growth and productivity objectives; a failure of our innovation initiatives; risks from investing in growth opportunities; fluctuations in financial results and purchases; the impact of local legal, economic, political and health conditions; adverse effects from environmental matters and tax matters; ineffective internal controls; our use of accounting estimates; our ability to attract and retain key personnel and our reliance on critical skills; impact of relationships with critical suppliers; currency fluctuations and customer financing risks; the impact of changes in market liquidity conditions and customer credit risk on receivables; our reliance on third party distribution channels; Securities and Exchange Commission regulations related to trading in "penny stocks;" the continued availability of certain financing provided by our CEO; and other risks, uncertainties and factors discussed in our Quarterly Reports on Form10-Q, our Annual Reports on Form 10-K, and in our other filings with the SEC or in materials incorporated therein by reference. Any forward-looking statement in this release speaks only as of the date on which it is made. We assume no obligation to update or revise any forward-looking statement. Notwithstanding the above, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, expressly state that the safe harbor for forward looking statements does not apply to companies that issue penny stocks. Because we may from time to time be considered to be an issuer of penny stock, the safe harbor for forward looking statements under the PSLRA may not be apply to us at certain times.

                             TX HOLDINGS, INC.
                        CONSOLIDATED BALANCE SHEETS
                  December 31, 2015 and September 30, 2015
---------------------------------------------------------------------------
                                                         Unaudited
                                                ---------------------------
                                                December 31,  September 30,
                                                    2015           2015
                                                ------------  -------------
                     ASSETS
Current assets:
 Cash and cash equivalents                      $      2,000  $      61,564
 Accounts receivable, net of allowance for
  doubtful accounts of $13,643 at December 31,
  2015 and September 30, 2015                        460,803        585,043
 Inventory                                         2,467,268      2,223,037
 Commission advances                                  58,996         48,338
 Note receivable-current                              10,000         10,000
 Other current assets                                 28,604         27,674
                                                ------------  -------------
  Total current assets                             3,027,671      2,955,656

Inventory, non-current                               300,000        300,000
Property and equipment, net                           64,126         66,575
Note receivable, less current portion                 19,983         19,983
Other                                                    500            500
                                                ------------  -------------
 Total Assets                                   $  3,412,280  $   3,342,714
                                                ============  =============

         LIABILITIES AND STOCKHOLDERS' DEFICIT

Current liabilities:
 Accrued liabilities                            $    698,175  $     696,624
 Accounts payable                                    956,924        946,576
 Advances from officer                               157,637        124,637
 Bank-Line of Credit                                       -        712,449
 Bank-Term Loan                                      706,484              -
                                                ------------  -------------
  Total current liabilities                        2,519,220      2,480,286

Note payable to officer                            2,000,000      2,000,000
                                                ------------  -------------
 Total Liabilities                                 4,519,220      4,480,286

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 December 31, 2015 and
  September 30, 2015                               9,293,810      9,293,810
 Additional paid-in capital                        4,321,329      4,321,329
 Accumulated deficit                             (14,722,079)   (14,752,711)
                                                ------------  -------------
   Total stockholders' deficit                    (1,106,940)    (1,137,572)
                                                ------------  -------------
  Total Liabilities and Stockholders' Deficit   $  3,412,280  $   3,342,714
                                                ============  =============

The accompanying notes are an integral part of the consolidated financial
 statements.



                             TX HOLDINGS, INC.
                   CONSOLIDATED STATEMENTS OF OPERATIONS
           For the Three Months Ended December 31, 2015 and 2014
---------------------------------------------------------------------------
                                                         (Unaudited)
                                                 --------------------------
                                                 December 31,  December 31,
                                                     2015          2014
                                                 ------------  ------------

Revenue                                          $    782,265  $    640,788

Cost of goods sold                                   (543,846)     (523,346)
                                                 ------------  ------------

Gross profit                                          238,419       117,442

Operating expenses, except items shown
 separately below                                     120,702       153,764
 Commission expense                                    27,831        40,573
 Professional fees                                     21,346        40,097
 Bad debt expense                                       1,926             -
 Depreciation expense                                   2,449         2,816
                                                 ------------  ------------
  Total operating expenses                            174,254       237,250

Income (loss) from operations                          64,165      (119,808)
                                                 ------------  ------------

Other income and (expense):
 Other income                                               -         6,173
 Interest expense                                     (33,533)      (31,648)
                                                 ------------  ------------

 Total other income and (expense), net                (33,533)      (25,475)
                                                 ------------  ------------

Income (loss) before provision for
income taxes                                           30,632      (145,283)

Provision for income taxes                             12,283             -
Utilization of net operating loss carry forward       (12,283)            -
                                                 ------------  ------------

Net income (loss)                                $     30,632  $   (145,283)
                                                 ============  ============

Net earnings (loss) per common share
 Basic and Diluted                               $          -  $          -
                                                 ============  ============

Weighted average of common shares
outstanding-
 Basic and Diluted                                 48,053,084    48,053,084
                                                 ============  ============

The accompanying notes are an integral part of the consolidated financial
 statements.



                             TX HOLDINGS, INC.
                   CONSOLIDATED STATEMENTS OF CASH FLOWS
           For the Three Months Ended December 31, 2015 and 2014
---------------------------------------------------------------------------
                                                         (Unaudited)
                                                 --------------------------
                                                 December 31,  December 31,
                                                     2015          2014
                                                 ------------  ------------
Cash flows used in operating activities:
Net income (loss)                                $     30,632  $   (145,283)
Adjustments to reconcile net income (loss) to
 net cash used in operating activities:
  Depreciation expense                                  2,449         2,816
  Bad debt expense                                      1,926
Changes in operating assets and liabilities:
  Accounts receivable                                 122,314         5,024
  Inventory                                          (244,231)       10,069
  Commission advances                                 (10,658)      (14,524)
  Other current assets                                   (930)       (4,531)
  Accrued liabilities                                  (4,449)       (5,896)
  Accounts payable                                     10,348         1,777
  Other assets                                              -          (500)
  Stockholder/officers advances for operations          6,000             -
                                                 ------------  ------------
Net cash used in operating activities                 (86,599)     (151,048)
                                                 ------------  ------------

Cash flows used in investing activities:
  Notes receivable                                          -         1,306
  Purchase of equipment                                     -        (2,408)
                                                 ------------  ------------
Net cash used in investing activities                       -        (1,102)
                                                 ------------  ------------

Cash flows provided by financing activities:
  Payment on Term Loan                                 (4,892)            -
  Proceeds from bank line of credit                         -       171,049
  Repayment of bank line of credit                     (1,073)            -
  Proceeds from stockholder/officer advances           33,000         3,300
  Repayment of stockholder/officer advances                 -       (14,000)
                                                 ------------  ------------
Net cash provided by financing activities              27,035       160,349
                                                 ------------  ------------

Increase/(decrease) in cash and cash equivalents      (59,564)        8,199
Cash nd cash equivalents at beginning of period        61,564        72,784
                                                 ------------  ------------

Cash and cash equivalents at end of period       $      2,000  $     80,983
                                                 ============  ============

              Supplemental Disclosure of Cash Flow Information
---------------------------------------------------------------------------

Cash paid during the year for interest           $     33,533  $     31,648
                                                 ============  ============

    Suppemental Schedule of Non-Cash investing and Financing Activities
---------------------------------------------------------------------------

  Payments of line of credit through issuance of
   note payable                                  $    711,376  $          -
                                                 ============  ============

The accompanying notes are an integral part of the consolidated financial
 statements.

Contact:

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

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