TX Rail Products, Inc. Reports Revenue Increase of 31% for First Quarter of Fiscal 2025

Rhea-AI Summary

TX Rail Products (TXRP) reported strong financial results for Q1 FY2025, with revenue increasing 31.1% to $2.1 million compared to $1.6 million in the same period last year. The company's net income grew 73.4% to $178,000, up from $102,000 in Q1 FY2024.

Gross profit margin improved from 20.4% to 21.9% due to product mix. Operating expenses increased 28.2% to $277,000. Cash and cash equivalents stood at $260,000 as of December 31, 2024, with positive operating cash flow of $138,000. The company secured a $45,000 line of credit for operations.

Inventory levels increased 29.2% to $3.7 million due to higher product demand, while accounts receivable decreased 41.4% to $375,000. Management reports adding multiple new customers and expects favorable geopolitical conditions to continue supporting growth in their established markets.

Positive

• Revenue increased 31.1% YoY to $2.1 million
• Net income grew 73.4% YoY to $178,000
• Gross profit margin improved from 20.4% to 21.9%
• Generated positive operating cash flow of $138,000
• Accounts receivable decreased 41.4% indicating improved collections

Negative

• Operating expenses increased 28.2% YoY to $277,000
• Required additional debt through $45,000 line of credit
• Inventory levels increased 29.2%, potentially tying up working capital

Net income up 73%; Generated positive cash from operations

ASHLAND, Ky., Feb. 03, 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 first quarter of fiscal year 2025.

Mr. Shrewsbury, CEO and Chairman of TX Rail Products, Inc., commented, "We delivered a 31% increase in revenue and generated positive cash from operations for the first quarter of fiscal 2025. We have added multiple new customers, and importantly, geopolitical conditions are favorable for our offerings. We expect these conditions will remain favorable in the coming years, especially in states where we already have an established presence."

First Quarter Fiscal Year 2025 Financial Summary

Revenue for the first fiscal quarter ended December 31, 2024, was $2.1 million as compared to $1.6 million for the same period in the prior year, an increase of 31.1%.

Cost of goods sold was $1.6 million as compared to $1.3 million for the same period in the prior year, an increase of 28.7%.

Gross profit for the first fiscal quarter ended December 31, 2024 increased as a percentage of revenue from 20.4% to 21.9% when compared to the same period the prior year. The increase 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 first fiscal quarter ended December 31, 2024, were $277,000 as compared to $216,000 for the three months ended December 31, 2023, an increase of 28.2%.

Other income for the first fiscal quarter ended December 31, 2024, was $607 as compared to other expense of ($5,100) in the same quarter the prior year.

Net income for the current first fiscal quarter was $178,000, compared to $102,000 in the first quarter of fiscal year 2024, representing an increase of 73.4%.

On December 31,2024, cash and cash equivalents were $260,000 compared to $114,000 as of September 30, 2024. Net cash provided by operating activities was $138,000 for the three months ended December 31, 2024.

Net cash used in investing activities was $0 for the first three months of fiscal 2025 and fiscal 2024. Net cash provided by financing activities for the first three months of fiscal year 2025 was $8,000 as compared to cash used in financing activities of ($107,000) for the same period the prior fiscal year. The increase in cash provided by financing activities was primarily the result of proceeds of $45,000 from a line of credit that was used for current operating needs.

Accounts receivable was $375,000 as of December 31, 2024, as compared to $641,000 as of September 30, 2024, a decrease of 41.4%.

Inventory was $3.7 million as of December 31, 2024, an increase of 29.2% as compared to $2.8 million as of September 30, 2024. The increase in inventory is the direct result of higher product 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: 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        

TX RAIL PRODUCTS, INC.
BALANCE SHEETS
December 31, 2024 and September 30, 2024
		Unaudited				Audited
		December 31,				September 30,
		2024				2024
ASSETS
Current assets:
Cash and cash equivalents	$	259,504			$	113,976
Accounts receivable, net of allowance for doubtful accounts of $27,440
at December 31, 2024 and September 30,2024		375,292				640,511
Deposits on purchased products		_				91,702
Inventory		3,678,293				2,847,149
Other current assets		25,999				48,924
Total current assets		4,339,088				3,742,262
Property and equipment, net (Note 2)		352,680				365,019
Total Assets	$	4,691,768			$	4,107,281
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accrued expenses, primarily to officers (Note 5)	$	90,410			$	100,411
Accounts payable		482,135				60,148
Accrued interest to officer		559,726				559,726
Advances from officer (Note 5)		64,587				101,587
Stockholder/officers advances for operations-warehouse rent		234,000				228,000
Other current liability		178,487				197,281
Total current liabilities		1,609,345				1,247,153
Line of Credit (Note 7)		495,492				450,706
Note payable to officer (Note 5)		2,000,000				2,000,000
Total Liabilities		4,104,837				3,697,859
Commitments and contingencies (Note 9)		0				0
Stockholders' equity:
Preferred stock: no par value, 1,000,000 shares authorized
no shares outstanding		_				_
Common stock: no par value, 250,000,000 shares (Note 8)
authorized, 45,000,000 shares issued and outstanding
at December 31, 2024 and September 30, 2024		8,703,344				8,703,344
Additional paid-in capital		4,809,295				4,809,295
Accumulated deficit		(12,925,708	)			(13,103,217	)
Total stockholders' equity		586,931				409,422
Total Liabilities and Stockholders' Equity	$	4,691,768			$	4,107,281
The accompanying notes are an integral part of the financial statements.

	TX RAIL PRODUCTS, INC.
	STATEMENTS OF OPERATIONS
For the Three Months Ended December 31, 2024 and 2023
			(Unaudited)
			December 31,				December 31,
			2024				2023
	Revenue		$	2,076,103			$	1,583,884
	Cost of goods sold			(1,622,360	)			(1,260,501	)
	Gross profit			453,743				323,383
	Operating expenses, except items shown
	separately below			135,373				81,350
	Salary expense			78,997				68,334
	Commission expense			41,132				61,322
	Professional fees			9,000				_
	Depreciation expense			12,339				4,915
	Total operating expenses			276,841				215,921
	Net income/(loss) from operations			176,902				107,462
	Other income and (expense):
	Other income			1,833				_
	Interest expense			(1,226	)			(5,114	)
	Total other income and (expense), net			607				(5,114	)
	Net income/(loss)		$	177,509			$	102,348
	Net income/(loss) per common share
	Basic and diluted		$	0.00			$	0.00
	Weighted average of common shares
	outstanding-
	Basic and diluted			45,000,000				45,209,042
	The accompanying notes are an integral part of the financial statements.

TX RAIL PRODUCTS, INC.
STATEMENTS OF CASH FLOWS
For the Three Months Ended December 31, 2024 and 2023
			(Unaudited)
			December 31,				December 31,
			2024				2023
Cash flows provided by/(used in) operating activities:
	Net income		$	177,509			$	102,348
	Adjustments to reconcile net income/(loss) to net cash provided by/(used in)
	operating activities:
	Depreciation expense			12,339				4,915
	Changes in operating assets and liabilities:
	Accounts receivable, net			265,219				427,532
	Inventory			(831,144	)			(370,316	)
	Deposits			91,702			_
	Other current assets			22,925				(25,041	)
	Accrued liabilities, primarily to officers (Note 5)			(10,001	)			(24,999	)
	Accounts payable			421,987				231,313
	Other current liability			(18,794	)			6,257
	Stockholder/officers advances for operations-warehouse rent (Note 5)			6,000				6,000
	Net cash provided by/(used in) operating activities			137,742				358,009
Cash flows provided by/(used in) investing activities:
	Net cash provided by/(used in) investing activities		_				_
Cash flows provided by/(used in) financing activities:
	Common share repurchase program		_					(17,000	)
	Proceeds from Line of Credit			44,786
	Repayment of bank term loan		_					(41,786	)
	Proceeds from officer advances			3,800			_
	Repayment of officer advances			(40,800	)			(48,000	)
	Net cash provided by/(used in) financing activities			7,786				(106,786	)
Increase in cash and cash equivalents				145,528				251,223
Cash and cash equivalents at beginning of period				113,976				159,088
Cash and cash equivalents at end of period			$	259,504			$	410,311
Supplemental Disclosure of Cash Flow Information
Cash paid during the period for interest			$	1,226			$	5,114
The accompanying notes are an integral part of the financial statements.

FAQ

What was TXRP's revenue growth in Q1 FY2025?

TXRP reported revenue growth of 31.1%, reaching $2.1 million compared to $1.6 million in Q1 FY2024.

How much did TXRP's net income increase in Q1 FY2025?

TXRP's net income increased by 73.4% to $178,000, compared to $102,000 in Q1 FY2024.

What was TXRP's gross profit margin in Q1 FY2025?

TXRP's gross profit margin improved to 21.9% in Q1 FY2025, up from 20.4% in the same period last year.

How much cash did TXRP have as of December 31, 2024?

TXRP reported cash and cash equivalents of $260,000 as of December 31, 2024, compared to $114,000 as of September 30, 2024.

What was TXRP's inventory value as of December 31, 2024?

TXRP's inventory value was $3.7 million as of December 31, 2024, representing a 29.2% increase from September 30, 2024.