-- Revenue Increased 63% to $3.0 Million -- Profitable Growth Continues with Net Income up 31% -- Positive Operating Cash Flows Reflect Operational Strength -- Reaffirms 2026 Full-year Revenue Growth Outlook
ASHLAND, Ky., July 28, 2026 (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 unaudited financial results for the third quarter of fiscal year 2026.
Mr. Shrewsbury, CEO and Chairman of TX Rail Products, Inc., commented, "Our third quarter, reflect the continued strength of our business, with revenue increasing more than 60% and net income growing over 30% compared to the same period in the prior year. We continue to invest in working capital (inventory and account receivable) to support strong customer demand while delivering a meaningful improvement in year-to-date operating cash flows. Based on our performance through the first nine months of fiscal 2026 and expected continued customer demand, although there can be no assurance, we anticipate for fiscal 2026 revenue growth of at least 50% compared to fiscal 2025. As we enter the final quarter of the fiscal year, we remain focused on disciplined execution and are encouraged by the opportunities ahead."
Third Quarter Fiscal Year 2026 Financial Summary
Revenue for the third fiscal quarter ended June 30, 2026, was $3.0 million as compared to $1.9 million for the same period in the prior year, an increase of 62.5% due to higher sales volumes driven by the addition of a major customer, increased customer demand and a more favorable mix of rail products shipped during the quarter.
Cost of goods sold for the third fiscal quarter ended June 30, 2026, was $2.2 million as compared to $1.3 million for the same period in the prior year, an increase of 71.0%, due to higher sales volume during the quarter.
Gross margin for the third fiscal quarter ended June 30, 2026, was 26.1% as compared to 29.8% for the same period last year, a decrease of 3.7% resulting from higher tariffs on imported products and higher cost product mix.
Selling, general and administrative expenses for the third fiscal quarter ended June 30, 2026, were $369,000 as compared to $266,000 for the three months ended June 30, 2025, an increase of 38.6%, due to higher personnel-related costs, higher sales commission and increased professional services fees due to our growth.
Interest expense and other, net for the third fiscal quarter ended June 30, 2026, was ($28,000) as compared to interest income and other of $12,000 in the same quarter of the prior year. The higher interest resulted from increased borrowings under our credit facility.
Net income for the current third fiscal quarter was $389,000, compared to $297,000 in the same quarter of 2025, an increase of 30.8%, due to increased revenue, partially offset by lower gross profit margins, higher operating expenses and increased interest expense.
Year-to-Date 2026 Financial Summary
Revenue for the nine months ended June 30, 2026, was $10.0 million as compared to $6.1 million for the same period in the prior year, an increase of 64.8% due to the addition of a major customer, and higher sales volume driven by increased customer demand.
Cost of goods sold was $7.5 million as compared to $4.5 million for the same period in the prior year, an increase of 67.4%, due to higher sales volume during the period.
Gross margin for the nine months ended June 30, 2026, was 25.3% as compared to 26.5% for the same period last year, a decrease of 1.2 % due to higher tariffs on imported products and the purchase of a higher cost product mix.
Selling, general and administrative expenses for the nine months ended June 30, 2026, were $1.2 million as compared to $773,000 for the nine months ended June 30, 2025, an increase of 51.4%, due to higher personnel-related costs, higher sales commission and increased professional services fees in support of our growth.
Interest expense and other, net, was ($83,000) for the nine months ended June 30, 2026, compared with interest income and other of $1,800 in the prior-year period, due to increased borrowings under our credit facilities and higher prevailing interest rates.
Net income for the current nine-month period was $1.3 million, compared to $842,000 in the prior year period, representing an increase of 52.7%, due to increased revenue, partially offset by lower gross profit margins, higher operating expenses and increased interest expense.
For the nine months, ended June 30, 2026, cash and cash equivalents were $23,000 compared to $111,000 as of September 30, 2025. The decrease in cash and cash equivalents was due to working capital requirements (higher inventory purchases) in connection with our planned growth, partially offset by borrowing under our credit facility.
Net cash provided by operating activities was $98,000 for the nine months ended June 30, 2026 compared to net cash used by operating activities of ($584,000) in the same period of the prior year. Net cash used in investing activities was $0 for the first nine months of fiscal 2026 and the first nine months of fiscal 2025. Net cash used in financing activities for the first nine months of fiscal year 2026 was ($187,000) as compared to net cash provided by financing activities of $511,000 for the same period in the prior fiscal year.
Accounts receivable was $2.9 million as of June 30, 2026, as compared to $1.0 million as of September 30, 2025, an increase of 187%. The increase in accounts receivable is the result of higher sales due to increased customer demand.
Inventory was $5.8 million as of June 30, 2026, an increase of 14% as compared to $5.1 million as of September 30, 2025, We increased inventory during the period due to anticipated higher sales demand, from existing and new customers.
Forward-Looking and Cautionary Statements
This press release contains "forward-looking statements" under applicable securities law. When used, the words "may", "will" "believe", "anticipate", "estimate", "project", "should", "expect", "plan", "targets", "assume" and similar words or expressions, or the negative thereof that do not relate solely to historical matters identify forward-looking statements. Forward-looking statements are based on our current plans, expectations, estimates, projections and assumptions regarding our 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 forward looking statements, including the statements made by Mr. Shrewsbury and statements regarding our outlook for 2026, involve a number of risks, uncertainties and other factors that could cause actual results to differ materially, from those expressed or Implied by such forward looking statements, 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; major customer concentration/nonrecurrence; collectability and timing of receivables; tariffs/imports restrictions; availability and covenant compliance under debt; reliance on related party financing /guarantees; 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. There can be no assurance our plans, expectations or objectives will be achieved. You are cautioned not to place undue reliance on such forward-looking statements. 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 except as required by applicable securities law.
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
-- Tables Follow --
TX RAIL PRODUCTS, INC.
BALANCE SHEETS
Unaudited
-------------
June 30, September 30,
2026 2025
ASSETS
Cash and cash equivalents $ 22,726 $ 111,213
Accounts receivable, net 2,867,817 1,000,770
Inventory 5,824,553 5,099,161
Other current assets 27,331 16,079
----------- ------------
Total current assets 8,742,427 6,227,223
Property and equipment, net 278,645 315,662
----------- ------------
Total Assets $ 9,021,072 $ 6,542,885
=========== ============
LIABILITIES AND STOCKHOLDERS'
EQUITY
Accounts payable $ 1,499,382 $ 119,737
Accrued expenses 10,000 10,000
Accrued expenses-related party 668,523 855,773
Other current liability 119,714 120,458
----------- ------------
Total current liabilities 2,297,619 1,105,968
Line of Credit (Note4) 2,000,000 1,999,453
Note payable-related party (Note7) 2,000,000 2,000,000
----------- ------------
Total Liabilities 6,297,619 5,105,421
Commitments and contingencies
(Note 2)
Preferred stock: no par value,
1,000,000 shares authorized no
shares outstanding -- --
Common stock: no par value,
250,000,000 shares authorized,
45,000,000 shares issued and
outstanding at June 30, 2026 and
September 30, 2025 8,703,344 8,703,344
Additional paid-in capital 4,809,295 4,809,295
Accumulated deficit (10,789,186) (12,075,175)
----------- ------------
Total stockholders' equity 2,723,453 1,437,464
----------- ------------
Total Liabilities and
Stockholders' Equity $ 9,021,072 $ 6,542,885
=========== ============
TX RAIL PRODUCTS, INC.
STATEMENTS OF OPERATIONS
Unaudited
--------------------------------------------------------
THREE MONTHS ENDED NINE MONTHS ENDED
-------------------------- ----------------------------
June 30, June 30, June 30, June 30,
2026 2025 2026 2025
Revenue $ 3,009,544 $ 1,851,909 $10,049,415 $ 6,099,706
Cost of goods
sold (2,223,506) (1,300,212) (7,509,550) (4,486,243)
---------- ---------- ---------- ----------
Gross profit 786,038 551,697 2,539,865 1,613,463
Selling, general
and
administrative
expenses 368,876 266,093 1,170,705 773,059
---------- ---------- ---------- ----------
Income from
operations 417,162 285,604 1,369,160 840,404
Interest expense (28,494) (7,534) (87,516) (24,426)
Charitable
contribution (300) (300)
Other income,
net 19 19,487 4,345 26,514
---------- ---------- ---------- ----------
Net income $ 388,687 $ 297,257 $ 1,285,989 $ 842,192
========== ========== ========== ==========
Basic earnings
per common
share $ 0.01 $ 0.01 $ 0.03 $ 0.02
Weighted average
common shares
outstanding 45,000,000 45,000,000 45,000,000 45,000,000
TX RAIL PRODUCTS, INC.
STATEMENTS OF CASH FLOWS
Unaudited
--------------------------------
Nine Months Ended June 30,
--------------------------------
2026 2025
Operating activities:
Net income $ 1,285,989 $ 842,192
Adjustments to reconcile net
income to net cash provided by
operating activities:
Depreciation expense 37,017 37,018
Changes in operating assets and
liabilities:
Accounts receivable, net (1,867,047) (308,367)
Inventory (725,392) (2,644,687)
Deposits for purchased
products -- 91,702
Other current assets (11,252) 30,269
Accounts payable and accrued
expenses 1,379,645 1,427,558
Other current liabilities (744) (59,400)
----------- ----------
Net cash provided (used) by
operating activities 98,216 (583,715)
Investing activities:
Net cash from investing
activities -- --
Financing activities:
Proceeds/(Payment) on Line of
Credit, net 547 548,247
Proceeds from related party
transactions 25,000 97,300
Payment for related party
transactions (212,250) (134,972)
-----------
Net cash provided (used) in
financing activities (186,703) 510,575
----------- ----------
Increase/(decrease) in cash and
cash equivalents (88,487) (73,140)
Cash and cash equivalents at
beginning of period 111,213 113,976
----------- ----------
Cash and cash equivalents at end
of period $ 22,726 $ 40,836
=========== ==========
Cash paid during the period for
interest $ 87,516 $ 24,426