<PAGE>

                                    UNITED STATES
                          SECURITIES AND EXCHANGE COMMISSION
                               Washington, D.C.  20549

                                     FORM 10-KSB

              ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
                                 EXCHANGE ACT OF 1934

                     For the fiscal year ended September 30, 1997

                           Commission File Number 33-98404

                                     T.J.T., INC.
                    (Name of small business issuer in its charter)

WASHINGTON                                                 82-0333246
(State or other jurisdiction of                            (IRS Employer
incorporation or organization)                             Identification No.)

               843 NORTH WASHINGTON, P.O. BOX 278, EMMETT, IDAHO 83617
                       (Address of principal executive offices)

                                    (208) 365-5321
                             (Issuer's telephone number)

----------------------------------------------------------------------------
Securities registered under Section 12 (b) of the Exchange Act:
    Title of each class            Name of each exchange on which registered
Common Stock, $.001 par value                    Nasdaq SmallCap Market
Redeemable Common Stock Purchase Warrants

Securities registered under Section 12 (g) of the Exchange Act:
                            Common Stock, $.001 par value
                                   (Title of class)
                      Redeemable Common Stock Purchase Warrants
                                   (Title of class)
----------------------------------------------------------------------------

Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements the past 90 days.  Yes [X]  No [  ]

                                            Exhibit Index on Page 35

                                      Page 1

<PAGE>

Check if there is no disclosure of delinquent filers in response to Item 405 
of Regulation S-B is not contained in this form, and no disclosure will be 
contained, to the best of registrant's knowledge, in definitive proxy or 
information statements incorporated by reference in Part III of this Form 
10-KSB or any amendment to this Form 10-KSB. [  ]

Registrant's revenues for the fiscal year ended September 30, 1997 were 
$25,441,000.

Based on the stock's closing price of $2.125 on November 30, 1997, 
non-affiliated market capital was approximately $3,980,000.

As of November 30, 1997, there were 4,854,739 shares of the registrant's 
$.001 par value common stock outstanding.

                         DOCUMENTS INCORPORATED BY REFERENCE

The registrant's definitive proxy statement to be dated on or after January
1998, for use in connection with the annual meeting of stockholders to be held
on February 24, 1998, portions of which are incorporated by reference into Part
III of the Form 10-KSB.

Transitional Small Business Disclosure Format:  Yes [  ]; No [X]

                                      Page 2

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                                        PART I

ITEM 1. DESCRIPTION OF BUSINESS

ITEM 1(a). GENERAL DEVELOPMENT OF  BUSINESS

RECENT DEVELOPMENTS

Acquisition of Bradley Enterprises, Inc.:

Effective November 14, 1996, T.J.T., Inc. (TJT or the Company) acquired 
Bradley Enterprises, Inc. (Bradley), an axle and tire recycler headquartered 
in Centralia, Washington pursuant to a merger in which the Company was the 
surviving corporation.  As consideration for the merger, the Company issued 
an aggregate of 940,000 restricted shares of its Common Stock and paid an 
aggregate of $500,000 to the shareholders of Bradley.  The restriction 
prohibits sales of the stock issued for the acquisition until after December 
31, 1998.

For the fiscal year ended September 30, 1996, Bradley had revenues of 
$12,514,000, gross profit of $1,324,000 and net income of $107,000.  Bradley 
leases property consisting of land, a corporate office and retail sales shop, 
and nine buildings constituting the axle and tire recycling facility in 
Centralia, Washington.  Bradley also leases land and buildings in Bend, 
Oregon and Eugene, Oregon which are used as retail sales locations and 
gathering points for used axles and tires.  As of September 30, 1996, Bradley 
had 85 employees.

Acquisition of Leg-it Tire Co., Inc.:

Effective July 3, 1997, the Company acquired Leg-it Tire Co., Inc. (Leg-it), 
an axle and tire recycler headquartered in Woodland, California pursuant to a 
merger in which the Company was the surviving corporation.  As consideration 
for the merger, the Company issued an aggregate of 291,176 restricted shares 
of its Common Stock and paid an aggregate of $412,500 to the shareholder of 
Leg-it. The restriction prohibits sales of the stock issued for the 
acquisition until after December 31, 1998.

For the fiscal year ended June 30, 1997, Leg-it had revenues of $5,679,000, 
gross profit of $398,000 and net loss of $(40,000).  Leg-it leases property 
consisting of land, a corporate office and buildings constituting the axle 
and tire recycling facility in Woodland, California.  As of July 3, 1997, 
Leg-it had 17 employees.

GENERAL

TJT is engaged in the business of repairing and reconditioning axles and 
tires for the manufactured housing industry.  The Company also distributes 
vinyl and steel siding primarily to the constructed or "site-built" housing 
market and supplies skirting and other after-market accessory products to 
manufactured housing dealers and set-up contractors.

                                      Page 3 

<PAGE>


TJT was founded in 1977 by Terrence J. Sheldon and a former partner to 
recondition tires and axles.  Geographic expansion of the Company's business 
took place during the 1980's with the opening of  additional reconditioning 
facilities in Kansas, Oregon and Texas.  From 1983 to 1991, the manufactured 
housing industry experienced a significant decline in production.  In 1986,  
the Company was forced to sell its unprofitable operations in Kansas and 
Texas.  The Company began its distribution activities in 1991.  At September 
30, 1997, the Company had 166 employees.

Manufactured or factory-built homes are generally produced in sections or 
"units" which are customarily 12 to 14 feet wide and 70 feet in length.  The 
individual units are then connected at the home site according to the size of 
the home purchased and the lot available.  Most manufactured houses consist 
of two units or a "double-wide" home of 24 to 28 feet in width, although some 
larger homes are assembled as triple-wide homes of up to 42 feet in width.  
When transported from the factory or the dealer, manufactured houses are 
customarily sold as single- or double-wide.

Manufactured housing producers transport houses to dealers on large steel 
frames using three to six axles and two tires per axle to support the weight 
of the houses.   According to regulations promulgated by the Housing and 
Urban Development Authority (HUD), axles on the frames must be inspected and 
refurbished or replaced after each trip.  Housing manufacturers customarily 
supply the tires and axles to manufactured housing dealers with the finished 
house, and include the cost and profit relating to the axles and tires in the 
dealer price of the house.  Historically, dealers transported the 
manufactured house to the home site and left the used axles and tires at the 
site, thereby creating potential environmental problems as well as wasting 
otherwise serviceable steel and rubber products.  As a market for used axles 
and tires developed, dealers began stockpiling these items.

The Company purchases used axles and tires ordinarily from the manufactured 
housing dealer, picks up the axles and tires primarily at the lot site of the 
dealer and repairs and refurbishes them at its facilities in Emmett, Idaho, 
Centralia, Washington, and Woodland, California.  Axles are refurbished to 
substantially "like-new" condition.  The Company then sells the reconditioned 
axles and, to the extent usable, used tires back to the housing 
manufacturers. Growth in production of manufactured homes in the Pacific 
Northwest, the Company's primary market area, remained virtually flat 
compared to last year. This follows a year in which production declined 11% 
from the prior year. Housing manufacturers currently find it more 
cost-effective to use reconditioned axles and tires to transport their houses 
rather than continually purchasing new axles and tires.  The majority of the 
factories in the Company's market area use recycled axles and tires when 
available.

The Company is also a distributor of skirting and related housing accessories 
to the manufactured housing industry and vinyl siding to the site-built 
housing industry and manufactured housing factories.  The Company believes 
activity in the manufactured housing market will create demand for 
manufactured housing accessories.

                                      Page 4 

<PAGE>

INDUSTRY OVERVIEW

The Company's current service area includes Idaho, Oregon, Washington, 
California, Colorado, Utah, Montana, Nevada and Wyoming.  Within its service 
area, the Pacific Northwest has experienced very favorable economic 
conditions over the last several years.  Job growth and population growth in 
the Company's market area have contributed to manufactured home sales.

During the years 1983 to 1991, the manufactured housing industry in the 
United States suffered from generally declining shipments.  Factors that 
contributed to the decline in shipments include:
-   Widespread unemployment in the oil and energy industry regions led to lack
    of demand for new manufactured homes and repossessions of existing
    manufactured homes;
-   Repossessed homes filled dealer lots causing lack of demand for new
    manufactured homes.

The factors contributing to the recovery of the manufactured housing industry
include:
-   Depletion of excess inventories of manufactured homes;
-   Lower purchase price of a completed manufactured home versus a comparable
    site-built home;
-   Changing land use and zoning policies that allow more desirable locations
    for manufactured housing;
-   More favorable financing terms (similar to the traditional financing
    available to site-built homes) for the increasing percentage of
    manufactured homes set on permanent foundations; and
-   Improved home designs and amenities offered for manufactured homes.

The traditional buyers of manufactured homes are retirees, "empty nesters" 
and low-income, blue-collar wage earners. With the introduction of 
multi-section homes, manufactured homes have taken on some of the 
characteristics of site-built homes.  These larger, more customized homes 
have attracted consumers in the middle-income range.  The multi-section units 
are more popular in the Pacific Northwest because they are similar to 
existing home styles.

The manufactured housing industry and the site-built construction industry 
are seasonal within the Company's market area.  Typically, sales for the 
months from November through March are lower than for other months due to 
weather and ground conditions.  Assuming normal weather conditions, the 
Company expects the quarters ended September 30 and June 30 to be the high 
volume quarters and the quarter ended March 31 to be the lowest volume 
quarter.

                                      Page 5 

<PAGE>

AXLE AND TIRE RECONDITIONING

The Company buys used axles and tires from manufactured housing dealers.  The 
axles and tires are picked up at the dealer's lot or at the home site after 
the manufactured home is placed on its pad or foundation.  The Company also 
obtains additional supplies of axles and tires from over 100 independent 
brokers.

After receiving the used axles and tires, production workers at Company 
facilities take apart the axle and check all major moving parts, including 
brakes, cleaning and rebuilding parts as required.  Approximately 30 axles 
can be rebuilt in 8 man hours.  The axles are re-cambered on presses, 
refurbished and then reassembled.  New or reconditioned tires are shipped 
with the axles to the customers.

A single axle may be reconditioned by the Company on multiple occasions.  The 
national average trip length for transporting a manufactured home from the 
factory to the dealer and the home site is approximately 300 miles. Each axle 
and tire assembly is used approximately three times a year.  An axle has an 
expected life of approximately 100,000 miles while tires are expected to 
travel approximately 3,000 miles before they are considered unusable.

HUD regulations govern the maximum load limit per tire which in turn dictates 
the number of axles needed to transport a manufactured home.  The number of 
axles used to transport a manufactured home ranges from three to six and the 
average is just under four axles.  HUD also requires a periodic inspection of 
the recycling facility by an approved third party inspector.

Sales of reconditioned axles and tires were 73% and 68% of total revenues for 
the years ended September 30, 1997 and 1996, respectively.

DISTRIBUTION ACTIVITIES

The Company sells manufactured housing accessories such as vinyl skirting, 
piers and other ancillary products to manufactured housing dealers and set-up 
contractors.  The Company also sells vinyl siding to the site-built housing 
market and limited amounts of vinyl siding accessories to certain 
manufactured housing factories in Idaho. The site-built housing market 
includes both new construction and re-siding contractors.  The Company began 
distributing vinyl siding in 1991.

Sales of manufactured housing accessories and vinyl siding were 27% and 32% 
of total revenues for the years ended September 30, 1997 and 1996, 
respectively.

SALES AND MARKETING

The Company's customer base consists of manufactured housing factories, 
manufactured housing dealers, siding contractors and manufactured housing 
set-up contractors.  The

                                      Page 6

<PAGE>

Company advertises in trade publications and attends manufactured housing and
construction industry trade shows.

The Company has certain major customers for reconditioned axles and tires, 
all of which are manufactured housing producers. Fleetwood  Homes represented 
14% of total Company sales in 1997 and 11% in 1996.  Marlette Homes and 
Guerdon represented approximately 14% and 13% of total Company sales in 1996, 
respectively.  The Company has no single supplier of axles and tires or 
accessories that represents 10% or more of total purchases.

COMPETITION

The axle and tire refurbishing industry was established in or about 1977 with 
the Company as one of the original entrants.  Axle and tire refurbishing 
companies tend to be located near manufactured housing production centers.  
The largest axle and tire refurbishing companies are located in the Southeast 
where the majority of the manufactured housing production takes place.  The 
Company does not compete with these refurbishers since they do not currently 
operate in its nine-state market area of Idaho, Oregon, Washington, 
California, Colorado, Utah, Nevada, Montana and Wyoming.

Within the Company's nine-state market area, the largest competitor is in 
southern California.  The competition in this industry is intense, both in 
terms of the price paid to dealers for supplies of used axles and tires and 
the price charged to the factories for refurbished axles and tires.  
Competition is also based heavily on reputation for reliability and customer 
service.

The Company also distributes after-market accessories in its nine-state 
market area.  Within that market area, there are three to four major 
competitors.  The Company also has four to six competitors in its vinyl 
siding market area which consists of southwestern Idaho, southern Idaho, 
eastern Oregon, northern Utah and northern Nevada.

                                      Page 7

<PAGE>

ITEM 2.  DESCRIPTION OF PROPERTY

The Company leases 13 properties and owns one 11,360 square foot warehouse in 
Emmett, Idaho.

Of the leased properties, five properties covering 146,000 square feet are 
located in Emmett, Idaho of which four of the properties covering 82,000 
square feet are leased from T.J.T. Enterprises(1)(3).  Five properties 
covering 63,000 square feet are located in Oregon, of which one property 
covering 14,000 square feet is leased from MBFI, Inc.(2)(3).  One property, 
located in Centralia, Washington covering 593,000 square feet is leased from 
MBFI, Inc.(2)(3).  One property, located in Woodland, California covering 
44,000 square feet is leased from Ulysses B. Mori(3).  One leased property 
covering 27,000 square feet is located in Platteville, Colorado.

(1) T.J.T. Enterprises is a partnership consisting of Terrence Sheldon,
    President and Chief Executive Officer of the Company, and Jerry L.
    Radandt, a former officer of the Company.  Mr. Sheldon and Mr. Radandt are
    equal partners in T.J.T. Enterprises.

(2) MBFI, Inc. is a corporation owned by the Bradley family.  Patricia I.
    Bradley, Senior Vice President of the Company, owns approximately 95% of
    MBFI, Inc.

(3) The Company believes that the lease terms obtained from TJT Enterprises,
    MBFI, Inc., and Ulysses B. Mori, Senior Vice President of the Company, are
    as favorable as terms that could have been obtained from an unaffiliated
    third party.

ITEM 3. LEGAL PROCEEDINGS

The Company has been named as a defendant, along with other parties in a 
lawsuit seeking recovery for personal injuries arising out of an accident in 
Northern Idaho in which a wheel supplied by the Company came off a 
manufactured home in transit and struck the vehicle being driven by the 
claimant.  The lawsuit has been tendered to the Company's liability insurance 
carrier and the carrier is providing a defense.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matters were submitted to a vote of security holders of the Company during 
the quarter ended September 30, 1997.

                                      Page 8

<PAGE>

ITEM A.  EXECUTIVE OFFICERS OF THE REGISTRANT

Following is a schedule of names and certain information regarding all of the 
executive officers of the Company as of September 30, 1997, each of whose 
term of office is one year.

Name                    Age    Position
-------------------     ---    ----------------------------------------

Terrence J. Sheldon     55    President, Chief Executive Officer
                                and Chairman of the Board of Directors

Patricia I. Bradley     53    Senior Vice President and Member of
                              the Board of Directors

Ulysses B. Mori         45    Senior Vice President and Member of
                              the Board of Directors

Scott M. Beechie        39    Vice President, Treasurer, Chief Financial
                                Officer, and Member of the Board of Directors

April L. Kierstead      42    Assistant Treasurer, Secretary and Controller

Terrence J. Sheldon - Mr. Sheldon is the founder and principal stockholder of 
the Company and has served as President since October 1986 and Chief 
Executive Officer since 1994.

Patricia I. Bradley - Ms. Bradley has served as Senior Vice President since 
1997.  From 1989 to 1996 she served as Chief Executive Officer for Bradley 
Enterprises, Inc., and has experience in all areas of the Company's 
operations.

Ulysses B. Mori - Mr. Mori has served as Senior Vice President since 1997.  
From 1980 to 1997 he served as President and Chief Executive Officer for 
Leg-it and has experience in all areas of the Company's operations.

Scott M. Beechie - Mr. Beechie is a CPA and has served as Vice President 
since 1996, and as Treasurer and Chief Financial Officer since 1997.  From 
1990 to 1996, he served as Manager of Financial Reporting for U.S. Bancorp 
(formerly West One Bancorp) in Boise, Idaho.  Mr. Beechie received a B.B.A. 
in Finance from Idaho State University in 1981.

April L. Kierstead - Ms. Kierstead has served as Assistant Treasurer and 
Secretary of the Company since 1994, and Controller since 1997.  From 1987 to 
1994, she served as accounting manager for Acme Manufacturing Co., Inc., in 
Filer, Idaho.  Ms. Kierstead received a B.A. in Business Administration from 
Southwest Baptist University in 1980.

                                      Page 9

<PAGE>

                                       PART II

ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

The Company's Common Stock and Redeemable Common Stock Purchase Warrants are 
registered on the Nasdaq SmallCap Market.  The Common Stock and Warrants 
offering settled on January 5, 1996.  The high and low sales prices of the 
Common Stock and the Warrants for each of the seven fiscal quarters with 
public trading activity are as follows:

                   Quarter   Quarter       Quarter       Quarter
                   Ended      Ended         Ended         Ended
                   9-30-97   6-30-97       3-31-97       12-31-96
                   -------   -------       -------       --------
Common Stock:
 High              2 7/8     2 13/32        3 1/4          6 3/4
 Low              1 9/16           1            1         2 9/16
 Quarter-end      2 3/16       1 7/8        1 1/8          2 5/8

Warrants:
 High              19/32         5/8            1          3 5/8
 Low                 1/4         1/8          1/8            5/8
 Quarter-end       15/32        9/32         5/32            5/8

                 Quarter     Quarter      Quarter
                   Ended       Ended        Ended
                 9/30/96     6/30/96      3/31/96
                 -------     -------      -------
Common Stock:
 High              9 5/8       8 1/4        7 3/4
 Low               5 3/8       4 3/4        4 1/2
 Quarter-end     6  3/16       7 3/8            7

Warrants:
 High              5 1/4           5        5 3/8
 Low               2 3/4       2 5/8        1 5/8
 Quarter-end           3       4 3/8        5 1/4


The approximate number of record holders of the Company's Common Stock and
Warrants at December 22, 1997 is set forth below:

         Title of Class                     Number of Record Holders
         --------------                     ------------------------
    Common Stock, $.001 par value                    1,495
    Redeemable Common Stock Purchase Warrants        1,909

                                      Page 10

<PAGE>

The Company has never paid dividends to shareholders and does not expect to 
pay dividends in the foreseeable future.  The Company intends to use future 
earnings for reinvestment in its business.  Any future payment of cash 
dividends will be at the discretion of the Board of Directors and will be 
dependent on the Company's financial condition, results of operations, 
capital requirements and other such factors as the Board of Directors deems 
relevant.

ITEMS 6 AND 7.

The information called for by Items 6 and 7, inclusive of Part II of this 
Form 10-KSB, is contained in the following sections of this Report at the 
pages indicated below:

                          CAPTIONS AND PAGES OF THIS REPORT

ITEM 6   Management's Discussion  "Management's Discussion
         and Analysis or Plan     and Analysis"..................... Page 14
         of Operations

ITEM 7   Financial Statements     "Financial Statements"............ Page 19

ITEM 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

There were no changes in accountants within the last 24 months, nor were there
any reportable disagreements with the Company's independent public accountants
on any matter of accounting principles or practices, financial statement
disclosures, or auditing scope or procedure.

                                     Page 11

<PAGE>

                                       PART III

ITEM 9.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT

Identification of the Company's executive officers is included in Item A
(following Item 4) in Part I of this Form 10-KSB.

The balance of this Item 9 is included in the Company's definitive proxy
statement under the caption "Election of Directors" and "Compliance With Section
16(b) of the Exchange Act" and is incorporated herein by reference.

ITEM 10.  EXECUTIVE COMPENSATION

     The following table sets forth all cash compensation paid by the 
Company, as well as certain other compensation paid or accrued, during the 
Company's last three fiscal years to the persons serving as Chief Executive 
Officer and executive officers earning over $100,000.


                       SUMMARY COMPENSATION TABLE

                                                        Long Term Compensation
------------------------------------------------------------------------------
                                Annual
                                Compensation(1)
                            ----------------------                   Stock
                                                   Other Annual     Options
Name and Principal Position     Year     Salary    Compensation(2)  Granted(3)
------------------------------------------------------------------------------

Terrence J. Sheldon(4)          1997    $225,000      $14,272            0
President, Chief Executive      1996    $225,000      $23,842            0
Officer and Director            1995    $135,960      $ 5,697       20,000

Patricia I. Bradley(5)          1997    $179,426      $     0            0
Senior Vice President and       1996       N/A          N/A              0
Manager of the Western          1995       N/A          N/A              0
Division and Director

Ulysses B. Mori(6)              1997    $34,038       $     0            0
Senior Vice President and       1996      N/A           N/A              0
Manager of the Log-it           1995      N/A           N/A              0
Division and Director


                                  Page 12
<PAGE>

(1)  Excludes personal benefits and other forms of non-cash compensation that
     did not in the aggregate exceed 10% of the aggregate amount of cash
     compensation shown for the subject individuals.

(2)  Includes participating contributions to the Company 401(k) Plan on a
     calendar year.

(3)  Represents five year stock options granted in October 1994 at $5.00 and 
     repriced as of September 1, 1995 at $4.00. 

(4)  Mr. Sheldon's contract expired September 30, 1997 and is currently being
     negotiated.  Compensation for 1998 will continue at the previous rate 
     until a new contract is agreed upon. The compensation committee has 
     scheduled meetings in January 1998 and expects to have a new 
     compensation plan in place prior to the annual meeting on February 24, 
     1998.

(5)  Mrs. Bradley is currently under contract until December 31, 1998.  The
     contract provides for minimum annual base salary of $208,000.

(6)  Mr. Mori is currently under contract until June 24, 2001.  The contract 
     provides for minimum annual base salary of $150,000

ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

Item 11 is included in the Company's definitive proxy statement under the 
caption "Security Ownership of Certain Beneficial Owners and Management" and 
is incorporated herein by reference.

For purposes of calculating the aggregate market value of the voting stock 
held by non-affiliates as set forth on the cover page of this Form 10-KSB, 
the Company has assumed that affiliates are those persons identified in the 
portion of the definitive proxy statement identified above.

ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Item 12 is included in Note J to the financial statements on page 31 of this 
Report.

                                      Page 13

<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS

The following discussion and analysis should be read in conjunction with the 
accompanying financial statements of T.J.T., Inc.  All references to year-end 
periods include results from October 1 through September 30.

BUSINESS AND INDUSTRY OVERVIEW

The Company is engaged in the business of repairing and reconditioning axles 
and tires for the manufactured housing industry.  The Company also supplies 
skirting and other after-market accessory products to manufactured housing 
dealers and set-up contractors, and it distributes vinyl siding primarily to 
the constructed or "site-built" housing market.

Producers of manufactured housing transport houses to dealers on large steel 
frames using three to six axles and two tires per axle to support the weight 
of the houses.   According to regulations promulgated by the Housing and 
Urban Development Authority (HUD), axles on the frames must be inspected and 
refurbished or replaced after each trip.  Housing manufacturers customarily 
supply the tires and axles to manufactured housing dealers with the finished 
house, and include the cost and profit relating to the axles and tires in the 
dealer price of the house.

The Company purchases used axles and tires ordinarily from the manufactured 
housing dealer, picks up the axles and tires primarily at the lot site of the 
dealer and repairs and refurbishes them at its facilities in Emmett, Idaho; 
Centralia, Washington; Woodland, California and Platteville, Colorado.  Axles 
are refurbished to substantially "like-new" condition.  The Company then 
sells the reconditioned axles and, to the extent usable, used tires back to 
the housing manufacturers.  The demand for the Company's axle and tire 
reconditioning services has increased over the last three years.  Housing 
manufacturers currently find it more cost-effective to use reconditioned 
axles and tires to transport their houses rather than continually purchasing 
new axles and tires.  Virtually all the factories in the Company's market 
area use recycled axles and tires when available.

The Company is also a distributor of skirting and related housing accessories 
to the manufactured housing industry and vinyl siding to the site-built 
housing industry and manufactured housing factories.  The Company believes 
that activity in the manufactured housing market will create demand for 
manufactured housing accessories.

The manufactured housing industry and the site-built construction industry 
are seasonal within the Company's market area.  Typically, sales for the 
months from November through March are lower than for other months due to 
weather and ground conditions.  Assuming normal weather conditions, the 
Company expects the quarters ended September 30 and June 30 to be the high 
volume quarters and the quarter ended March 31 to be the lowest volume 
quarter.

                                      Page 14

<PAGE>

ACQUISITIONS AND EXPANSION

In November 1996, TJT completed the acquisition of Bradley Enterprises, Inc. 
(Bradley), an axle and tire recycler headquartered in Centralia, Washington. 
The merger dramatically increased TJT's presence in Washington and Oregon.  
TJT issued 940,000 shares of its common stock and paid $500,000 to complete 
the transaction which was accounted for as a purchase.

In July 1997, TJT completed the acquisition of Leg-it Tire Co., Inc. 
(Leg-it), an axle and tire recycler headquartered in Woodland, California.  
The acquisition gave TJT a presence in the central California market. TJT 
issued 291,176 shares of its common stock and paid $412,500 to complete the 
transaction which was accounted for as a purchase.

In September 1997, TJT opened a recycling facility in Platteville, Colorado. 
The plant incurred start-up expenses during fiscal 1997 but generated no 
revenue.  The Platteville facility is strategically located in that there are 
currently no other major recyclers with a physical presence in Colorado.  The 
location helps solidify TJT's existing relationships with area factories 
obtained through the Leg-it acquisition and allows us to compete more 
effectively for factory relationships in southern and midwestern states.

The acquisitions and expansion make TJT the dominant axle and tire recycler 
in the western United States.  Management estimates that its market share in 
the western United States is approximately 61% of the used axle and tire 
sales to manufactured housing factories.

PERFORMANCE OVERVIEW

Net income for the fiscal year ended 1997 was $477,000, a 50% increase over 
1996 net income of $318,000.  Earnings for 1997 were $.11 per share compared 
to $.10 per share for 1996.  Average shares outstanding were 35% greater in 
1997 due to the issuance of shares for the acquisition of Bradley in November 
1996 and Leg-it in July 1997.  Both of these companies were targeted as 
critical to the long-term strategic growth plan of TJT.

Net sales increased 101% to $25,441,000 in 1997 from $12,656,000 in 1996.  
The 1997 sales total was the highest in the history of the Company.  The 
increase was due primarily to the acquisitions of Bradley and Leg-it.

Total assets increased to $10,140,000 at September 30, 1997 from $6,998,000 
at September 30, 1996.  Total equity was $8,471,000 at September 30, 1997 
compared to $6,224,000 at September 30, 1996.  Both of the increases were 
primarily a result of the acquisitions.

                                      Page 15

<PAGE>

RESULTS OF OPERATIONS

The breakdown of revenues and expenses by major categories as a percent of 
sales for 1997 and 1996 are as follows:

                                                 1997       1996
                                                 -----      -----
Axle and tire reconditioning                      73.1%      67.5%
Manufactured housing accessories and siding       26.9       32.5
Gross margin                                      17.4       18.2
Selling expense                                    9.2        9.0
Administrative expense                             5.7        6.7
Interest income                                     .4        1.1
Investment property income                          .3         .3
Other income                                         -         .1

Net sales for the fiscal year ended 1997 increased 101% to $25,441,000. 
Manufactured housing production in the states of Idaho, Oregon and Washington 
declined one percent for the ten months ended July 31, 1997.  This small 
decline follows a decline in 1996 of 11% over the prior year.  Sales of axles 
and tires from the Idaho recycling facility in 1997 were up $378,000 compared 
to prior year.  Sales of manufactured housing accessories and siding sales 
shipped from Idaho increased $440,000 in 1997 compared to 1996 sales.  
Increases in Oregon and Washington sales to factories and dealers were 
primarily due to the acquisition of Bradley.  Sales increases in California 
were due to the acquisition of Leg-it.

Overall gross margin decreased to 17.4% for the year ended 1997 from 18.2% 
for the year ended 1996.  The decline was primarily due to the historically 
lower gross profit margins of Bradley and Leg-it.  Gross margin improved 
during the year for the Bradley operation compared to recent prior years due 
to more effective purchasing of used axles and tires, particularly during the 
latter part of the fiscal year. Gross margin for accessories and siding 
decreased from 24.8% in 1996 to 23.4% in 1997 due mainly to slightly lower 
gross margin on the Bradley dealer sales.  Leg-it dealer sales from 
acquisition date to September 30, 1997 were not significant.

Selling expense increased slightly as a percent of sales while administrative 
expense decreased as a percent of sales.  Both changes were primarily the 
result of combining separate cost structures from the Bradley and Leg-it 
acquisitions. The Company has not made any significant changes to staffing 
levels since the acquisitions were completed.

The decrease in interest income was a direct result of using proceeds 
provided by the public offering to fund the acquisitions of Bradley and 
Leg-it.

                                      Page 16

<PAGE>

SEASONALITY

The manufactured housing industry and the site-built construction industry 
are seasonal within the Company's market area.  Typically, sales for the 
months from November through March are lower than for other months due to 
weather and ground conditions.  Assuming normal weather conditions, the 
Company expects the quarters ended September 30 and June 30 to be the high 
volume quarters and the quarter ended March 31 to be the lowest volume 
quarter.  The following table shows summarized operating results by quarter 
and demonstrates the seasonal nature of TJT's operations:

                           December 31     March 31     June 30   September 30
                           -----------    ---------     -------   ------------
                                     (Unaudited, dollars in thousands)

Fiscal year ended 1997
  Net sales                   $4,177       $5,680      $6,869        $8,715
  Gross profit                   721          770       1,355         1,591
  Operating income                 9         (178)        375           429
  Net income                      37          (85)        251           274

Fiscal year ended 1996
  Net sales                   $2,762       $2,541      $3,482        $3,871
  Gross profit                   494          466         599           748
  Operating income                27          (14)         97           199
  Net income                      28           31          91           168

LIQUIDITY AND CAPITAL RESOURCES

Historically, the Company's principal sources of liquidity have been cash 
flow from operations and borrowings under a revolving line of credit with a 
bank. Available credit under the bank line is $2,000,000.  The line has not 
been drawn upon since January 1996 when it was paid off with a portion of the 
proceeds from the initial public offering.  When drawn upon, the line carries 
an interest rate of prime plus .5%.  Management expects to renew the line in 
January 1998 when it matures.  During fiscal 1997, the Company was in 
compliance with restrictive covenants under the operating line agreement 
related to working capital, equity and capital expenditures.

In January 1996, TJT completed an initial public offering of 1,100,000 shares 
of Common Stock and 1,265,000 Redeemable Common Stock Purchase Warrants 
generating net proceeds of approximately $3,333,000.  The Warrants are 
exercisable at $4.00 per share beginning December 21, 1996, expire December 
21, 2000, and are callable by the Company at $.10 per Warrant beginning 
December 21, 1996, provided the Common Stock closes at $7.50 per share or 
above for 10 consecutive trading days.  The Company is currently unable to 
call the Warrants as the closing stock price requirement has not been met.  
Proceeds from the offering were used to pay down the Company's operating 
line, to invest in short-term, interest-bearing

                                      Page 17

<PAGE>

instruments, to finance purchases of land held for investment, and to finance 
the Bradley and Leg-it acquisitions.

In October 1995, the Company received net proceeds of approximately $258,000 
from a private placement of 323,564 shares of common stock and 3,235,644 
warrants.  The private placement warrants are exercisable at $4.00 per share, 
expire December 21, 2000, and are callable under the same provisions as the 
public offering warrants.

COMPANY STRATEGY

Management will continue to focus on growth by acquisition and expansion.  
The Company intends to finance a portion of this growth through available 
cash and debt financing in addition to possibly issuing additional equity.  
Management believes there are additional opportunities to improve operating 
efficiencies and expand through diversification of product lines.

                                      Page 18

<PAGE>

                                     T.J.T., INC.
                                     FORM 10-KSB
                     INDEX TO FINANCIAL STATEMENTS AND SCHEDULES

                                                                 PAGE
                                                                 ----
Balance Sheets                                                    20

Statements of Income                                              21

Statements of Cash Flows                                          22

Statements of Changes in Shareholders' Equity                     23

Notes to Financial Statements                                     24

Report of Independent Accountants                                 34


                                      Page 19

<PAGE>


                                     T.J.T., INC.
                                    BALANCE SHEETS
                                (Dollars in thousands)

At September 30,                                         1997        1996
                                                       -------     -------

Current assets:
  Cash and cash equivalents                            $   835   $   2,737
  Accounts receivable and notes receivable               1,738       1,073
  Inventories                                            3,480       1,662
  Prepaid expenses and other current assets                253         119
                                                       -------     -------
    Total current assets                                 6,306       5,591

Property, plant and equipment, net of
  accumulated depreciation                               1,318         511

Notes receivable                                           434         402
Real estate held for investment                            275         458
Deferred income and other assets                           411          36
Goodwill                                                 1,396          -
                                                       -------     -------
    Total assets                                       $10,140     $ 6,998
                                                       -------     -------
                                                       -------     -------
Current liabilities:
  Accounts payable                                     $   616     $   499
  Accrued liabilities                                      708         104
  Income taxes payable                                     146          44
                                                       -------     -------
   Total current liabilities                             1,470         647

Deferred credits and other noncurrent obligations          146         113
Deferred income taxes                                       53          14
                                                       -------     -------
    Total liabilities                                    1,669         774
                                                       -------     -------

Shareholders' equity:
  Common stock, $.001 par value; 10,000,000
    shares authorized;  4,854,739 and 3,623,564
    shares issued and outstanding                            5           3
  Common stock warrants                                    113         113
  Capital surplus                                        6,068       4,320
  Retained earnings                                      2,735       2,258
  Treasury stock (7,991 shares at cost)                    (39)       -
  Stock subscriptions receivable                          (411)       (470)
                                                       -------     -------
    Total shareholders' equity                           8,471       6,224
                                                       -------     -------
      Total liabilities and shareholders' equity       $10,140     $ 6,998
                                                       -------     -------
                                                       -------     -------


See accompanying notes to financial statements.

                                      Page 20


<PAGE>


                                     T.J.T., INC.
                                 STATEMENTS OF INCOME
                   (Dollars in thousands except per share amounts)


For the year ended September 30,                          1997      1996
                                                      ----------  ----------
Sales (net of returns and allowances):
  Axles and tires                                    $   18,610    $    8,546
  Accessories and siding                                  6,831         4,110
                                                     -----------  -----------
    Total sales                                          25,441        12,656

Cost of goods sold                                       21,004        10,349
                                                     -----------  -----------

  Gross profit                                            4,437         2,307

Selling, general and administrative expenses              3,802         1,986
                                                     -----------  -----------
  Operating income                                          635           321

Interest income                                             112           146
Income on investment property                                81            46
Other income (expense)                                       (1)           11
                                                     -----------  -----------

  Income before taxes                                       827           524

Income taxes                                                350           206
                                                     -----------  -----------

  Net income                                         $      477    $      318
                                                     -----------  -----------
                                                     -----------  -----------

Net income per common share                          $      .11    $      .10

Weighted average shares outstanding                   4,514,679     3,335,039
                                                     -----------  -----------
                                                     -----------  -----------



See accompanying notes to financial statements.

                                      Page 21

<PAGE>

                                     T.J.T., INC.
                               STATEMENTS OF CASH FLOWS
                                (Dollars in thousands)

For the year ended September 30,                             1997       1996
                                                           --------   -------
Cash flows from operating activities:
  Net income                                              $  477    $  318
  Adjustments to reconcile net income to net cash
    provided by operating activities:
    Depreciation and amortization                            388       128
    Gain on sale of assets                                   (49)      (15)
    Change in receivables                                    170      (175)
    Change in inventory                                     (487)       79
    Change in prepaid expenses and other current assets      (56)        7
    Change in accounts payable                              (638)       29
    Change in other assets and liabilities                   423       (77)
                                                           -------- -------
       Net cash provided by operating activities             228       294
                                                           -------- -------

Cash flows from investing activities:
  Additions to property, plant and equipment                (291)     (138)
  Issuance of notes receivable                               (24)     (108)
  Payments on notes receivable                                18       123
  Proceeds from sale of assets                                18        17
  Land purchased for investment                               -       (391)
  Sale of land purchased for investment                      238        -
  Net cash paid for Bradley acquisition                     (467)       -
  Net cash paid for Leg-it acquisition                      (371)       -
  Direct acquisition costs                                   (41)       -
                                                           -------- -------
    Net cash used by investing activities                   (920)     (497)

Cash flows from financing activities:
  Issuance of common stock and warrants (net of issuance
    costs of $1,263 in 1996)                                   -     3,590
  Treasury stock transactions                                (53)       -
  Proceeds from stock subscriptions receivable                59        -
  Payments on debt                                        (1,216)   (2,053)
  Proceeds from debt                                          -      1,402
                                                           -------- -------
    Net cash (used) provided by financing activities      (1,210)    2,939
                                                           -------- -------

Net increase (decrease) in cash and cash equivalents      (1,902)    2,736
Cash and cash equivalents at October 1                     2,737         1
                                                           -------- -------

Cash and cash equivalents at September 30                 $  835  $  2,737
                                                           -------- -------
                                                           -------- -------

Supplemental information:
  Interest paid                                           $    6  $     21
  Income taxes paid                                          305       196

Noncash transactions:
  Acquisition of land by assumption of debt               $   -   $    187
  Sale of land by issuance of note receivable                 -        139
  Deferred gain on sale of land                                3        22
  Sale of equipment by issuance of note receivable            -          6
  Issuance of stock for business combinations              1,764        -
  Accrued consulting costs                                   348        -

See accompanying notes to financial statements.

                                      Page 22

<PAGE>

                                     T.J.T., INC.
                    STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
                                (Dollars in thousands)

<TABLE>
<CAPTION>

                                                                     Common                                            Stock
                                                          Common      Stock       Capital     Retained    Treasury  Subscriptions
                                                           Stock     Warrants     Surplus     Earnings      Stock     Receivable
                                                         -------    ---------    --------    ---------   ---------  -------------
<S>                                                      <C>         <C>          <C>         <C>         <C>          <C>
Balance at October 1, 1995                                  $  2         $  -      $  844     $  1,940        $  -      $  (470)

Issuance of 323,564 common shares and
  3,235,644 warrants in private placement                      -            3         255            -           -         -
Issuance of 1,100,000 common shares and
  1,265,000 warrants in public offering                        1          110       3,222            -           -         -
Issuance of 2,880 shares of common
  stock to 401(k) plan                                         -            -           4            -           -         -
Purchase of 2,880 shares of common stock                       -            -          (5)           -           -         -
Net income                                                     -            -           -          318           -         -
                                                          ------       ------      ------       ------      ------       ------
Balance at September 30, 1996                                  3          113       4,320        2,258           -         (470)

Issuance of 940,000 common shares for
  acquisition of Bradley Enterprises, Inc.                     1            -       1,380            -           -         -
Payments on stock subscriptions receivable                     -            -           -            -           -           59
Issuance of 291,176 common shares for
  acquisition of Leg-it Tire Co., Inc.                         1            -         382            -           -         -
Treasury stock transactions                                    -            -         (14)           -         (39)        -
Net income                                                     -            -           -          477           -         -
                                                          ------       ------      ------       ------      ------       ------
Balance at September 30, 1997                               $  5       $  113    $  6,068     $  2,735      $  (39)     $  (411)
                                                          ------       ------      ------       ------      ------       ------
                                                          ------       ------      ------       ------      ------       ------

</TABLE>

See accompanying notes to financial statements.

                                      Page 23


<PAGE>

                                     T.J.T., INC.
                            NOTES TO FINANCIAL STATEMENTS
                             September 30, 1997 and 1996

NOTE A - SIGNIFICANT ACCOUNTING POLICIES

BUSINESS ACTIVITY

The Company is engaged in the business of repairing and reconditioning axles 
and tires for the manufactured housing industry.  The Company also sells 
skirting and other aftermarket accessories to manufactured housing dealers 
and vinyl and steel siding primarily to the site-built housing market.  The 
Company grants trade credit to customers in Idaho, Oregon, California, Utah, 
Washington, Montana, Colorado, Wyoming and Nevada, substantially all of whom 
are manufactured housing factories, manufactured housing dealers, site-built 
home contractors or siding contractors.

MAJOR CUSTOMERS AND SUPPLIERS

The Company has certain major customers for reconditioned axles and tires, 
all of which are manufactured housing producers.  Fleetwood Homes represented 
14% of total Company sales in 1997 and 11% in 1996, respectively.   Marlette 
Homes and Guerdon Homes represented approximately 14% and 13% of total 
Company sales in 1996, respectively. The Company has no single supplier of 
axles and tires or accessories that represents 10% or more of total purchases.

CASH AND CASH EQUIVALENTS

The Company considers all investments purchased with a maturity of three 
months or less to be cash equivalents.  As of September 30, 1996, the Company 
had a $752,200 certificate of deposit with a bank of which $100,000 was 
federally insured.  At September 30, 1997 the Company had no certficates of 
deposit.  The Company also has funds in a cash management account at a 
commercial bank which are collateralized by government securities.

ACCOUNTS RECEIVABLE AND BAD DEBTS

The Company performs credit history checks and limited financial analysis 
before credit terms are offered to customers.  Amounts receivable are 
generally unsecured.  Bad debts are accounted for using the direct write-off 
method. Expense is recognized only when a specific account is determined to 
be uncollectible.  The effects of using this method approximate those of the 
allowance method.

PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment is stated at cost.  Depreciation is calculated 
using the straight-line method for financial reporting purposes.

                                      Page 24

<PAGE>


NOTES RECEIVABLE

Notes receivable consists primarily of amounts owed by individuals related to 
the sale of real estate and are secured by the real estate sold.

DEFERRED CHARGES AND OTHER ASSETS

Deferred charges and other assets consists primarily of prepaid consulting 
fees and amounts capitalized related to merger costs incurred in connection 
with the Bradley and Leg-it mergers.  The prepaid consulting fees and merger 
costs are being amortized over five years on the straight-line method.

GOODWILL

Goodwill consists of the excess of purchase price paid over net assets 
acquired from Bradley Enterprises, Inc. (Bradley) and Leg-it Tire Co. Inc. 
(Leg-it). Goodwill is amortized over 15 years on the straight-line method and 
is presented net of $61,000 in amortization as of September 30, 1997.

DEFERRED INCOME

Deferred income consists of gains on the sale of land held for investment 
where the Company provided virtually 100% financing to the buyer.  The 
Company recognizes income to the extent of payments received on the related 
notes receivable until it has received 25% or more of the original principal 
balance, at which point the remaining deferred gain is recognized.

SECURITIES SUBSCRIPTION AGREEMENT

On January 31, 1995, the Company entered into a securities subscription 
agreement with a group of investors whereby the Company issued 400,000 shares 
of common stock in exchange for an unsecured promissory note of $470,000.  On 
March 20, 1997 one of the investors paid $58,750 representing his portion of 
the promissory note.  The remaining principal is due September 30, 2000 and 
bears interest at 8%.

INCOME TAXES

Income taxes are accounted for using the asset and liability method under 
which deferred income taxes are determined based on differences between the 
financial reporting and tax basis of assets and liabilities.  Deferred income 
taxes are measured by applying enacted tax rates and laws to taxable years in 
which such differences are expected to reverse.

                                      Page 25

<PAGE>


EARNINGS PER SHARE

Earnings per share is computed by dividing net income applicable to common 
shareholders by the weighted average number of shares outstanding.

CONCENTRATION OF CREDIT RISK

All trade receivables are due from entities involved in the housing industry 
and are unsecured.  The accounting loss incurred if all parties failed 
entirely to perform on their obligation is equal to the balance outstanding 
for trade accounts receivable.

Notes receivable related to sales of real estate held for investment are 
secured by real estate located near Emmett, Idaho.  The accounting loss 
incurred if all parties failed entirely to perform on their obligation is 
equal to the balance outstanding on the notes receivable less amounts 
realizable from the foreclosure and resale of the property securing the notes 
receivable.

FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company has a number of nonderivative financial instruments, none of 
which are held for trading purposes.  The Company estimates that the fair 
value of the financial instruments at September 30, 1997 approximates the 
aggregate carrying values recorded on the balance sheet.  The estimated fair 
values have been determined by the Company using available market information 
and appropriate valuation methodologies.  Judgment is required in 
interpreting market data to develop the estimates of fair value and the 
estimates are not necessarily indicative of amounts the Company could realize 
in a current market exchange.

SIGNIFICANT ESTIMATES

Management uses estimates and assumptions in preparing financial statements. 
Those estimates and assumptions affect the reported amounts of assets and 
liabilities, the disclosure of contingent assets and liabilities, and 
reported revenues and expenses.  Significant estimates used in preparing 
these financial statements include those assumed in determining the 
collectibility of receivables, and determining the lower of cost or market 
and obsolescence on inventories.  It is reasonably possible that the 
significant estimates may change within the next year.

RECLASSIFICATIONS

Certain 1996 amounts have been reclassified to conform with the 1997 
presentation.

                                     Page 26
<PAGE>


NOTE B - INVENTORIES

Inventories are stated at the lower of cost (first-in, first-out and average
cost methods) or market.

(Dollars in thousands)                       1997                1996
                                          -------            --------
Raw materials                              $1,219              $  398
Finished goods                              2,261               1,264
                                          -------            --------
     Total                                 $3,480              $1,662
                                          -------            --------
                                          -------            --------

NOTE C - PROPERTY, PLANT AND EQUIPMENT

(Dollars in thousands)                       1997                1996
                                          -------            --------
Land and building                          $  122              $  120
Leasehold improvements                        385                 111
Furniture and equipment                       689                 375
Vehicles and trailers                         884                 434
                                          -------            --------
                                            2,080               1,040
Less accumulated depreciation                 762                 529
                                          -------            --------
     Net property, plant and equipment     $1,318              $  511
                                          -------            --------
                                          -------            --------

Depreciation expense was $290,000 and $128,000 for 1997 and 1996, respectively.

NOTE D - LEASES

The Company leases vehicles, administrative office space, manufacturing 
facilities, building and warehouse space, and storage yard space.  The 
leases, which expire between January 1998 and December 2002 are classified as 
operating leases.  The leases have been entered into with related parties and 
unaffiliated entities.  There are no significant renewal or purchase options 
or escalation clauses.

The future minimum payments by fiscal year under noncancellable operating 
lease agreements at September 30, 1997 were:

(Dollars in thousands)
         1998                          $  299
         1999                             194
         2000                             130
         2001                             104
         2002                              57
         Thereafter                         3
                                       ------
            Total                      $  787
                                       ------
                                       ------

                                     Page 27
<PAGE>

Rental expense and rent paid to related parties were:

(Dollars in thousands)                    1997     1996
                                         -----     ----
Rental expense                          $  260    $  156
Rent paid to related parties:
   MBFI, Inc.                               91         -
   T.J.T. Enterprises                       40        39
   Ulysses Mori                             14         -

MBFI, Inc. is a corporation owned by the Bradley family.  Patricia I. 
Bradley, a Senior Vice President of the Company,  owns approximately 95% of 
MBFI, Inc. T.J.T. Enterprises is a partnership consisting of Terrence 
Sheldon, President and Chief Executive Officer of the Company, and Jerry L. 
Radandt, a former officer of the Company.  Mr. Sheldon and Mr. Radandt are 
equal partners in T.J.T. Enterprises.  Mr. Mori is a Senior Vice President of 
the Company.

NOTE E - CREDIT FACILITY

The Company has a revolving credit facility secured by receivables and 
inventory with a financial institution maturing in January 1998.   The 
maximum amount available under the line of credit was $2,000,000 for 1997 and 
$700,000 for 1996.   The facility carries interest at prime plus .5% with no 
charge for any unused portion of the facility.  The facility has various 
restrictive covenants attached to its use, all of which the Company has met.  
The facility has not been used during 1997, and had no amount outstanding at 
September 30, 1996.

NOTE F - SHAREHOLDERS' EQUITY

Authorized stock of the Company consists of 10,000,000 shares of $.001 par 
value common stock and 5,000,000 shares of $.001 par value preferred stock.  
No shares of preferred stock have been issued.  On January 5, 1996, the 
Company completed a public offering of 1,100,000 shares of common stock  and 
1,265,000 warrants to purchase common stock.  Each warrant entitles the 
holder to purchase one share of common stock at $4.00 per share.  The 
warrants are exercisable beginning December 21, 1996 and expire December 21, 
2000.  The warrants are redeemable by the Company with 30 days written notice 
at the rate of $.10 per warrant after December 21, 1996 and only if the 
average stock closing bid price equals or exceeds $7.50 per share for 10 
consecutive trading days.  The Company does not have the ability to call the 
warrants as of September 30, 1997 because it has not met the closing bid 
requirements.

Effective July 3, 1997 the Company issued 291,176 restricted shares of common 
stock and paid $412,500 to acquire Leg-it Tire Co., Inc.

                                     Page 28
<PAGE>

Effective November 14, 1996 the Company issued 940,000 restricted shares of 
common stock and paid $500,000 to acquire Bradley Enterprises, Inc.

The Company also completed a private placement of 323,564 common shares and 
3,235,644 warrants in October 1995.  The terms of the private placement 
warrants are identical to the terms of the warrants issued in the public 
offering.

NOTE G - STOCK OPTIONS

The Company has a stock option plan which allows officers, directors and key 
employees of the Company to receive non-qualified and incentive stock 
options. All authorized, non-qualified stock options were granted on October 
1, 1994 and vested on September 30, 1996. Incentive stock options vest at the 
rate of 20 percent per year and expire five years from the vesting date.  
Stock option activity is summarized as follows:

                                                      1997      1996
                                                    -------   -------
Number of option shares
  Beginning of year                                 100,000   100,000
  Granted - incentive                                15,000         -
  Became exercisable                                      -   100,000
  Outstanding at end of year                        115,000   100,000
  Exercisable at end of year                        100,000   100,000

Weighted-average exercise prices
  Beginning of year                                 $  4.00   $  4.00
  Granted at fair value                                5.88         -
  Outstanding at end of year                           4.24      4.00
  Exercisable at end of year                           4.00      4.00

Range of exercise prices at September 30, 1997             $4.00 - 5.88
Remaining weighted-average contractual life of
  options outstanding at September 30, 1997                3.75 years

The Company has elected not to adopt the provisions of Statement of Financial 
Accounting Standards No. 123, "Accounting for Stock-Based Compensation" (FAS 
123).  Assumptions used to calculate the income statement impact of stock 
options granted as if the Company had adopted FAS 123 were as follows:

Weighted average:
  Risk-free interest rate                             6.70%
  Expected life                                     5 years

                                     Page 29
<PAGE>

  Expected volatility                                15.84%
  Expected dividends                                   None

Using these assumptions, expenses related to the granting of stock options as 
calculated under FAS 123 were not material to the Company's results of 
operations.

NOTE H - INCOME TAXES

The Company accounts for income taxes as prescribed by Statement of Financial 
Accounting Standards No. 109, "Accounting for Income Taxes," which requires 
deferred income taxes to be accounted for using the liability method and 
allows recognition of operating loss and tax credit carryforwards as deferred 
tax assets.

The components of income tax expense for the years ended September 30 are as 
follows:

(Dollars in thousands)                                 1997      1996
                                                     ------    ------
Current:
  Federal                                            $  309    $  182
  State                                                  57        42

Deferred:
  Federal                                               (13)      (15)
  State                                                  (3)       (3)
                                                     ------    ------
        Total                                        $  350    $  206
                                                     ------    ------
                                                     ------    ------

Deferred taxes for the years ended September 30 are as follows:

                                                       1997      1996
                                                     ------    ------

Book to tax depreciation differences                    100        44
Vacation liability                                      (17)        -
Installment sales of land                               (30)      (30)
                                                     ------    ------

        Total                                            53        14
                                                     ------    ------
                                                     ------    ------

                                     Page 30
<PAGE>

The provision for income taxes varied from amounts computed at the federal
statutory rate for the years ended September 30 as follows:

                                                       1997      1996
                                                     ------    ------

Provision at statutory rate                             281       178
Amortization of goodwill                                 20         -

State income taxes, net of federal benefit              (18)      (13)
Other non-deductible expenses                             5         2
Other                                                     8         -
                                                     ------    ------

        Total                                           296       167
                                                     ------    ------
                                                     ------    ------

NOTE I - COMMITMENTS

The Company has entered into employment agreements with the two Senior Vice 
Presidents providing for minimum annual base salaries of $208,000 and 
$150,000 extending through December 31, 1998 and June 24, 2001, respectively. 
The Company has entered into employment agreements with five employees 
providing for minimum annual base salaries of $60,580 extending through 
December 31, 1998.

The employment contract for Terrence Sheldon, President and Chief Executive 
Officer, expired on September 30, 1997 and is currently being negotiated. 
Compensation for 1998 will continue at the previous rate of $225,000 per year 
until a new rate is agreed upon which is expected by February 1998.

NOTE J - RELATED PARTY TRANSACTIONS

The Company has extended loans to various related parties.  The notes are 
secured by common stock of the Company or other property.  The notes mature 
from 1997 through 2000 and have interest rates ranging from 12.22% to 16.77%. 
The totals of the notes and accrued interest receivable from the related 
parties were $72,106 and $83,368 at September 30, 1997 and 1996, 
respectively. Long-term portions of these notes are included in notes 
receivable and current portions of these notes are included as current assets 
in notes receivable.

The Company sold 400,000 shares of its common stock to a private investor 
group in exchange for a note receivable of $470,000 in January 1995.  Three 
members of the group qualify as related parties.  Robert M. Rubin holds 
greater than 5% of the outstanding stock,  Stephen A. Weiss was a director of 
the Company until he resigned on June 15, 1997, and  Arthur J. Berry is a 
director of the Company. Mr. Berry paid $58,750, plus interest, representing 
his portion of the note on March 20, 1997.  The proportionate outstanding 
principal and accrued interest for these three individuals at September 30, 
1997 and 1996 was $410,208 and $465,242, respectively.

Effective October 1, 1996,  the Company retained the services Robert M. 
Rubin, an individual who owns in excess of 5% of the outstanding common 
shares, to perform consulting services

                                     Page 31
<PAGE>


in the areas of raising capital, analyzing acquisitions, and developing 
long-term strategy.  The Company agreed to pay a total of $348,200 to Mr. 
Rubin. The amount is included in other assets and is being amortized over 60 
months.

The Company entered into agreements with J.R. Strunk and Vance Strunk, 
brothers of Douglas Strunk, a Director of the Company, to serve as 
independent buyers for the Company during 1997 and 1996.  These buyers 
purchased $1,269,105 and $1,190,598 of used axles and tires for the Company 
in 1997 and 1996, respectively.  In order to facilitate transactions between 
the Company and the buyers, the Company advances cash to the buyers. At 
September 30, 1997 and 1996, the Company had advanced $62,750 and $16,364, 
respectively.  The advances are included in accounts receivable.

The Company purchased property from a related party for $66,500 during 1996. 
The Company financed $46,500 of the purchase price with a note bearing 
interest at 8% maturing 2005.  A total of $2,420 of interest was paid to the 
related party prior to paying the note in full during 1996.

The Company purchases piers and other materials used to set up manufactured 
homes from SAC Industries, Inc. (SAC).  SAC is owned by four individuals with 
each individual owning 25%.  Patricia I. Bradley and Ulysses B. Mori, 
Directors and Senior Vice Presidents of the Company, are two of the 
individuals.  During 1997 the Company purchased $310,215 of materials from 
SAC.

NOTE K - EMPLOYEE BENEFITS

The Company sponsors a 401(k) plan through which the employer matched 50% of 
employees' contributions up to 6% of wages for contributions beginning August 
1, 1996 and 100% of contributions up to 6% of wages for reported periods 
prior to August 1, 1996.  Employees are eligible for participation in the 
401(k) plan after completing one year of service.  Employer contributions to 
the plan were $49,016 and $56,925 in 1997 and 1996, respectively.

NOTE L - ACQUISITIONS

On November 14, 1996, the Company issued 940,000 restricted shares of common 
stock and paid $500,000 to acquire Bradley Enterprises, Inc., an axle and 
tire recycler formerly headquartered in Centralia, Washington.  The Company 
acquired cash of $33,000, accounts receivable of $657,000, inventory of 
$1,003,000, fixed assets of $572,000, and other assets of $86,000.  The 
Company assumed $562,000 of accounts payable and accrued expenses and 
$908,000 of interest-bearing debt. Based upon the purchase price of 
$1,882,000, goodwill of $1,001,000 was recorded.

On July 3, 1997, the Company issued 291,176 restricted shares of common stock 
and paid $412,500 to acquire Leg-it Tire Co. Inc., an axle and tire recycler 
formerly headquartered in Woodland, California.  The Company acquired cash of 
$41,000, accounts receivable of

                                     Page 32
<PAGE>

$205,000, inventory of $328,000, fixed assets of $255,000, and other assets 
of $11,000.  The Company assumed $193,000 of accounts payable and accrued 
expenses and $308,000 of interest-bearing debt.  Based upon the purchase 
price of $795,000, goodwill of $456,000 was recorded.

The following summarized unaudited pro forma financial information presents 
the results of operations as if the acquisitions had occurred on October 1, 
1995 and after giving effect to certain adjustments including amortization of 
goodwill, reduction in investment income, and elimination of intercompany 
transactions. The pro forma results of operations do not purport to be 
indicative of operating results that would have been reported had the 
acquisitions occurred on October 1, 1995 or of future operating results.

                                          1997               1996
                                       --------            --------
Net sales                              $ 29,708            $ 29,705
Net income                                  332                 338
Income per share                            .07                 .07


NOTE M - LEGAL PROCEEDINGS

The Company has been named as a defendant, along with other parties, in a 
lawsuit seeking recovery for personal injuries arising out of an accident in 
Northern Idaho in which a wheel supplied by the Company came off a 
manufactured home in transit and struck the vehicle being driven by the 
claimant.  The lawsuit has been tendered to the Company's liability insurance 
carrier and the carrier is providing a defense.  Management is unable to 
estimate the loss, if any, in excess of the product liability insurance policy 
limits.

                                     Page 33
<PAGE>

INDEPENDENT AUDITORS' REPORT


To the Shareholders and Board of Directors
T.J.T., Inc.
Emmett, Idaho

We have audited the accompanying balance sheets of T.J.T., Inc., as of 
September 30, 1997 and 1996, and the related statements of income, cash 
flows, and changes in shareholders' equity for the years then ended.  These 
financial statements are the responsibility of the Company's management.  Our 
responsibility is to express an opinion on these financial statements based 
on our audits.

We conducted our audits in accordance with generally accepted auditing 
standards.  Those standards require that we plan and perform the audit to 
obtain reasonable assurance about whether the financial statements are free 
of material misstatement.  An audit includes examining, on a test basis, 
evidence supporting the amounts and disclosures in the financial statements.  
An audit also includes assessing the accounting principles used and 
significant estimates made by management, as well as evaluating the overall 
financial statement presentation. We believe that our audits provide a 
reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in 
all material respects, the financial position of T.J.T., Inc., as of 
September 30, 1997 and 1996, and the results of its operations and its cash 
flows for the years then ended in conformity with generally accepted 
accounting principles.

Boise, Idaho
November 11, 1997


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<PAGE>

ITEM 13.  EXHIBITS AND REPORTS ON FORM 8-K

(a) EXHIBITS

    The following documents are filed as Exhibits to this Form 10-KSB:

    3.1   Articles of Incorporation of T.J.T., Inc., a Washington
          corporation; incorporated by reference to Exhibit 3.1 to
          the Registrant's Form SB-2 Registration Statement dated
          October 20, 1995, as amended December 6, 1995 (Commission
          File No. 33-98404).

    3.2   Bylaws of T.J.T., Inc., a Washington corporation;
          incorporated by reference to Exhibit 3.2 to the Registrant's
          Form SB-2 Registration Statement dated October 20, 1995,
          as amended December 6, 1995 (Commission File No. 33-98404).

    4.1   Specimen Common Stock Certificate; incorporated by reference
          to Exhibit 4.1 to the Registrant's Form SB-2 Registration
          Statement dated October 20, 1995, as amended December 6, 1995
          (Commission File No. 33-98404).

    4.2   Specimen Redeemable Common Stock Purchase Warrant;
          incorporated by reference to Exhibit 4.2 to the Registrant's
          Form SB-2 Registration Statement dated October 20, 1995, as
          amended December 6, 1995 (Commission File No. 33-98404).

    4.3   Form of Underwriter's Warrant Agreement; incorporated by
          reference to Exhibit 4.3 to the Registrant's Form SB-2
          Registration Statement dated October 20, 1995, as
          amended December 6, 1995 (Commission File No. 33-98404).

    4.4   Form of Warrant Agreement issued to 1995 Private Placement
          Investors in October 1995; incorporated by reference to
          Exhibit 4.4 to the Registrant's Form SB-2 Registration
          Statement dated October 20, 1995, as amended December 6, 1995
          (Commission File No. 33-98404).

    4.5   Form of Registration Rights Agreement issued in connection
          with 1995 Private Placement; incorporated by reference to
          Exhibit 4.5 to the Registrant's Form SB-2 Registration
          Statement dated October 20, 1995, as amended December 6, 1995
          (Commission File No. 33-98404).

    9.1   Voting Trust Agreement - Not Applicable

                                     Page 35
<PAGE>

    10.1  Form of Employment Agreement with Terrence J. Sheldon,
          President and Chief Executive Officer of the Company;
          incorporated by reference to Exhibit 10.1 to the
          Registrant's Form SB-2 Registration Statement dated
          October 20, 1995, as amended December 6, 1995
          (Commission File No. 33-98404).

    10.2  Form of Employment Agreement with Andy C. Doll,
          Chief Financial Officer; incorporated by reference to
          Exhibit 10.2 to the Registrant's Form SB-2 Registration
          Statement dated October 20, 1995, as amended December 6, 1995
          (Commission File No. 33-98404).

    10.3  Consulting Agreement with Stephen A. Weiss, Director;
          incorporated by reference to Exhibit 10.3 to the
          Registrant's Form SB-2 Registration Statement
          dated October 20, 1995, as amended December 6, 1995
          (Commission File No. 33-98404).

    10.4  Stock Option Plan; incorporated by reference to Exhibit 10.4
          to the Registrant's Form SB-2 Registration Statement dated
          October 20, 1995, as amended December 6, 1995
          (Commission File No. 33-98404).

    10.5  Lease dated December 1984, as amended, between Theodore
          Muller Trust, as lessor, and the Registrant as lessee,
          related to recycling and distribution facility in Salem,
          Oregon; incorporated by reference to Exhibit 10.5 to the
          Registrant's Form SB-2 Registration Statement dated
          October 20, 1995, as amended December 6, 1995
          (Commission File No. 33-98404).

    10.6  Lease dated March 22, 1993 between T.J.T. Enterprises, as
          lessor, and the Registrant as lessee, related to
          administrative office building in Emmett, Idaho;
          incorporated by reference to Exhibit 10.6 to the
          Registrant's Form SB-2 Registration Statement dated
          October 20, 1995, as amended December 6, 1995
          (Commission File No. 33-98404).

    10.7  Lease dated March 22, 1993 between T.J.T. Enterprises, as
          lessor, and the Registrant as lessee, related to storage
          yard in Emmett, Idaho; incorporated by reference to
          Exhibit 10.7 to the Registrant's Form SB-2 Registration
          Statement dated October 20, 1995, as amended December 6, 1995
          (Commission File No. 33-98404).

    10.8  Lease dated May 23, 1991 between Terrence J. Sheldon and

                                     Page 36
<PAGE>

          Jerry L. Radandt, as lessors, and the Registrant as
          lessee, related to recycling plant in Emmett, Idaho;
          incorporated by reference to Exhibit 10.8 to the Registrant's
          Form SB-2 Registration Statement dated October 20, 1995,
          as amended December 6, 1995 (Commission File No. 33-98404).


    10.9  Lease dated May 23, 1991 between Terrence J. Sheldon and
          Jerry L. Radandt, as lessors, and the Registrant as lessee,
          related to tire shop in Emmett, Idaho; incorporated by
          reference to Exhibit 10.9 to the Registrant's Form SB-2
          Registration Statement dated October 20, 1995,
          as amended December 6, 1995 (Commission File No. 33-98404).

    11.1  Statement Re: Computation of Earnings Per Share - Not Applicable

    16.1  Letter on Change in Certifying Accountant - Not Applicable

    21.1  Subsidiaries of the Registrant - Not Applicable

    23.1* Consent of Independent Public Accountants

    24.1  Power of Attorney - Not Applicable

    27.1* Financial Data Schedule

    ----------------------------------------------------

    *     Filed herewith

(b) REPORTS ON FORM 8-K.  No reports on Form 8-K were filed during the last
    quarter of the fiscal year ended September 30, 1996.


                                     Page 37
<PAGE>

                                      SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the Registrant 
caused this report to be signed on its behalf by the undersigned, thereunto 
duly authorized.

                                  T.J.T., INC.
                                  REGISTRANT

Date:    December 29, 1997        By: /s/ Terrence J. Sheldon
                                     -----------------------------------------
                                       Terrence J. Sheldon, President and
                                       Chief Executive Officer

In accordance with the Exchange Act, this report has been signed below by the 
following persons on behalf of the Registrant and in the capacities and on 
the dates indicated.

Date:    December 29, 1997        By: /s/ Terrence J. Sheldon
                                     -----------------------------------------
                                       Terrence J. Sheldon, President, Chief
                                       Executive Officer and Chairman of
                                       the Board of Directors

Date:    December 29, 1997        By: /s/ Patricia I. Bradley
                                     -----------------------------------------
                                       Patricia I. Bradley, Senior Vice
                                       President, and Director

Date:    December 29, 1997        By: /s/ Ulysses B. Mori
                                     -----------------------------------------
                                       Ulysses B. Mori, Senior Vice President,
                                       and Director

Date:    December 29, 1997        By: /s/ Scott M. Beechie
                                     -----------------------------------------
                                       Scott M. Beechie, Vice President,
                                       Treasurer, Chief Financial Officer and
                                       Director

Date:    December 29, 1997        By: /s/ B. Kelly Bradley
                                     -----------------------------------------
                                       B. Kelly Bradley, Western Division
                                       Manager and Director

Date:    December 29, 1997        By: /s/ Darren M. Bradley
                                     -----------------------------------------
                                       Darren M. Bradley, Western Division
                                       Assistant Manager and Director

Date:    December 29, 1997        By: /s/ John W. Eames
                                     -----------------------------------------
                                       John W. Eames, III, Regulation
                                       Compliance Officer and Director

                                     Page 38
<PAGE>


Date:    December 29, 1997        By: /s/ Douglas A. Strunk
                                     -----------------------------------------
                                       Douglas A. Strunk, Sales Manager - Idaho
                                       Facility and Director


Date:    December 29, 1997        By: /s/ Robert L. Burkhart
                                     -----------------------------------------
                                       Robert L. Burkhart, Plant Manager -
                                       Idaho and Director


Date:    December 29, 1997        By: /s/ Darle E. Lacey
                                     -----------------------------------------
                                       Darle E. Lacey, Western Division
                                       Purchasing Manager and Director

Date:    December 29, 1997        By: /s/ April L. Kierstead
                                     -----------------------------------------
                                       April L. Kierstead, Assistant Treasurer,
                                       Secretary and Director


Date:    December 29, 1997        By: /s/ Scott M. Hayes
                                     -----------------------------------------
                                       Scott M. Hayes, Director


Date:    December 29, 1997        By: /s/ Arthur J. Berry
                                     -----------------------------------------
                                       Arthur J. Berry, Director



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