Company Announcements

ASHLAND, Ky., April 29, 2024 (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 its second quarter 2024 fiscal year. During the 2024 second quarter, the company reported revenue of $2,529,656, a 44.5% increase when compared to the same period the prior year. Net income for the second fiscal quarter of 2024 was $586,530, an income increase of $354,974, when compared to a net income of $231,556 for the prior year second quarter fiscal.

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

“This 3/31/2024 second quarter fiscal represents the third consecutive year with appreciable increases year by year in our revenues and net income. With our continued efforts to increase our customer base and managing our costs, we are optimistic in continuing to show an upward trend in our revenues and profits results. On April 18^th, we changed our Company’s name, which we estimate will give more recognition to the nature of our products in the marketplace.
We had successful results in our common share buyback program initiated on February 1, 2023, having repurchased 3,053,084 common shares since the program initiation”.

Second Quarter Fiscal Year 2024 - Financial Summary

Revenue for the second fiscal quarter ended March 31, 2024, was $2,529,656 as compared to $1,750,313 for the same period in the prior year, an increase of $779,343 or 44.5%.

Cost of goods sold was $1,679,306 as compared to cost of goods sold of $1,341,979 for the same period the prior year, an increase of $337,327 or 25.1 %.

Gross profit for the second quarter ended March 31,2023 increased as a percentage of revenue from 23.3% to 33.6% when compared to the same period the prior year. The gross profit increase is the result of higher margin products sold in the current quarter.

Operating expenses for the fiscal quarter ended March 31, 2024, were $242,787 as compared to $174,887 for the three months ended March 31, 2023, an increase of $67,900 or 38.8%. Higher sales commissions due to the increase in sales and higher salary account for the higher expenses.

Other income/expense for the fiscal quarter ended March 31, 2024, resulted in a loss of $21,033 as compared to a loss of $1,891 in the same quarter the prior year. A $28,000 charge for bad debt expense account for the variance

Net income for the current fiscal quarter was $586,530, compared to a net income of $231,556, incurred in the same quarter in fiscal year 2023, representing an increase of 153.3% over the prior year.

At March 31,2024, cash and cash equivalents were $11,701 compared to $208,504 at March 31, 2024. Net cash used by operating activities was $300,239 during the six months ended March 31, 2024. The negative cash from operations is the direct result of increases in accounts receivable and inventories due to higher sales. The purchase of a delivery truck in the amount of $177,672 during the current six- months period accounts for the investing cash flow amount. Net cash provided by financing activities was $330,524 as compared to cash used in financing activities of $193,108 for the same period the prior year. The increase in cash provided by financing activities results from a new line of credit of $500,000 used to pay off a prior loan and for operating needs and, an additional loan of $142,192 to purchase a delivery truck.

Accounts receivable was $1,080,237 as of March 31, 2024, as compared to $802,752 as of March 31, 2023, an increase of $277,485 or 34.6%.

Inventory was $3,245,770 as of March 31, 2024, an increase of $646,260 or 24.9% as compared to March 31, 2023. 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 apply to us at certain times.