TX Rail Products, Inc. Reports Financial Results for Second Quarter of Fiscal 2025

Rhea-AI Summary

TX Rail Products (TXRP), a supplier of rail products to the U.S. coal mining industry, reported its Q2 FY2025 financial results. Revenue decreased 14.2% to $2.2 million compared to $2.5 million in Q2 FY2024. Net income declined 37.4% to $367,000 from $587,000 year-over-year. Gross profit margin contracted to 28.0% from 33.6%. Operating expenses decreased 5.2% to $230,000. As of March 31, 2025, cash and equivalents stood at $92,000, down from $114,000 in September 2024. The company reported increased inventory levels of $3.6 million, up 25.1%, and accounts receivable grew 47.2% to $943,000. Despite quarterly declines, management expressed confidence citing strong demand signals across key markets and favorable market conditions.

Positive

• Operating expenses reduced by 5.2% to $230,000
• Net cash provided by operating activities of $186,000 in first half FY2025
• Strong demand signals reported across key markets
• Other expenses decreased to $10,500 from $21,000 year-over-year

Negative

• Revenue declined 14.2% year-over-year to $2.2 million
• Net income decreased 37.4% to $367,000
• Gross profit margin contracted from 33.6% to 28.0%
• Cash and cash equivalents decreased to $92,000 from $114,000
• Accounts receivable increased 47.2% indicating potential collection issues
• Inventory levels up 25.1% suggesting possible inventory management challenges

News Market Reaction

-2.68%

1 alert

-2.68% News Effect

On the day this news was published, TXRP declined 2.68%, reflecting a moderate negative market reaction.

Data tracked by StockTitan Argus on the day of publication.

First Half Fiscal 2025 Revenue Growth and Positive Cash from Operations Outpace Prior Year Period

ASHLAND, Ky., May 12, 2025 (GLOBE NEWSWIRE) -- TX Rail Products, Inc. (OTC Markets PINK: TXRP), a supplier of rail and rail products to the U.S. coal mining industry, short line railroads and tunneling contractors, today announced financial results for the second quarter of fiscal year 2025.

Mr. Shrewsbury, CEO and Chairman of TX Rail Products, Inc., commented, “Through the first half of fiscal 2025, we outpaced the same period last year with higher revenue and increased cash from operations. With strong demand signals across our key markets and favorable market conditions for our offerings, we are entering the second half of the year with confidence.”

Second Quarter Fiscal Year 2025 Financial Summary

Revenue for the second fiscal quarter ended March 31, 2025, was $2.2 million as compared to $2.5 million for the same period in the prior year, a decrease of 14.2%.

Cost of goods sold was $1.6 million as compared to $1.7 million for the same period in the prior year, a decrease of 6.9%.

Gross profit for the second fiscal quarter ended March 31, 2025 decreased as a percentage of revenue from 33.6% to 28.0% when compared to the same period the prior year. The decrease in gross profit as a percentage of revenue is the result of the mix of products sold in the current quarter.

Operating expenses for the second fiscal quarter ended March 31, 2025, were $230,000 as compared to $243,000 for the three months ended March 31, 2024, a decrease of 5.2%.

Other expense for the second fiscal quarter ended March 31, 2025, was ($10,500) as compared to ($21,000) in the same quarter the prior year.

Net income for the current first fiscal quarter was $367,000, compared to $587,000 in the second quarter of fiscal year 2024, representing a decrease of 37.4%.

On March 31,2025, cash and cash equivalents were $92,000 compared to $114,000 as of September 30, 2024. Net cash provided by operating activities was $186,000 for the six months ended March 31, 2025.

Net cash used in investing activities was $0 for the first six months of fiscal 2025 and ($178,000) for the first six months of the prior fiscal year. Net cash used by financing activities for the first six months of fiscal year 2025 was ($208,000) as compared to cash provided by financing activities of $331,000 for the same period the prior fiscal year.

Accounts receivable was $943,000 as of March 31, 2025, as compared to $641,000 as of September 30, 2024, an increase of 47.2%.

Inventory was $3.6 million as of March 31, 2025, an increase of 25.1% as compared to $2.8 million as of September 30, 2024. The increase in inventory is the direct result from increased net profit.

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: 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 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 1933, 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 applied to us at certain times.

Contacts

Investor Relations:
Brett Maas
Hayden IR
txrp@haydenir.com
646-536-7331

William “Buck” Shrewsbury        
Chairman and CEO TX Rail Products, Inc.
(606) 928-3131        

FAQ

What were TXRP's Q2 2025 earnings results?

TXRP reported Q2 FY2025 revenue of $2.2 million (down 14.2% YoY) and net income of $367,000 (down 37.4% YoY), with a gross profit margin of 28.0%.

How much cash does TX Rail Products have as of March 2025?

TX Rail Products reported cash and cash equivalents of $92,000 as of March 31, 2025, down from $114,000 in September 2024.

What is the current inventory level for TXRP?

TXRP's inventory stood at $3.6 million as of March 31, 2025, representing a 25.1% increase from $2.8 million in September 2024.

How did TX Rail Products' operating expenses change in Q2 2025?

Operating expenses decreased by 5.2% to $230,000 in Q2 FY2025, compared to $243,000 in the same period last year.

What is the accounts receivable status for TXRP in Q2 2025?

Accounts receivable increased 47.2% to $943,000 as of March 31, 2025, compared to $641,000 as of September 30, 2024.