<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15 (D)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended JUNE 30,1996 Commission File No. 0-8488
------------ ------
TWENTY SERVICES, INC.
-------------------------------------------------------------------
(Exact name of Registrant as specified in its charter)
ALABAMA 63-0372577
- --------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer I.D. No.)
incorporation or organization)
105 Vulcan Road 35209
- --------------------------------------------------------------------------------
(Address or principal executive offices) (Zip Code)
Registrant's telephone number, including area code (205) 945-l58l
--------------
- --------------------------------------------------------------------------------
Former name, former address, and former fiscal year, if changed since last
report.
Indicate by check mark whether the Registrant (l) has filed all reports
required to be filed by Section l3 or l5 (d) of the Securities Exchange Act
of 1934 during the preceding l2 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past ninety (90) days.
YES X NO
--- ---
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the period of this report.
Par Value $0.l0 per share l,283,068 shares
1
<PAGE>
TWENTY SERVICES, INC.
INDEX
Twenty Services, Inc. Financial Statements
(Unaudited)
Condensed Balance Sheets
June 30, 1996 and December 3l, 1995 3
Condensed Statements of Operations
Three Months Ended June 30, 1996 and 1995
and Six Months Ended June 30, 1996 and 1995 4
Condensed Statements of Cash Flows
Six Months Ended June 30, 1996 and 1995 5
Management's Discussion and Analysis of Financial Condition
and Results of Operations 6-7
Other Information 8
Signatures 9
2
<PAGE>
TWENTY SERVICES, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
<TABLE>
<CAPTION>
Assets
June 30, December 31,
1996 1995
---- ----
<S> <C> <C>
Cash and temporary investments $ 140,950 $ 41,379
Receivable-American Equity Investment
Life Holding Company 0 4l0,000
Marketable securities l,567,163 l,532,614
Investment-American Equity
Investment Life Holding Company 790,000 790,000
Finance receivables, net 565,732 372,059
Property and equipment, net 42,556 2l,080
Other assets 33,395 43,482
---------- ----------
Total assets $3,139,796 $3,210,614
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Accounts payable and accrued expenses $ 14,079 $ 11,637
Income taxes payable l0,000 31,000
---------- ----------
Total liabilities 24,079 42,637
---------- ----------
Stockholders' equity:
Preferred stock, Cumulative, $.l0
par value 50,5ll 50,5ll
Common Stock, par value $.l0 l28,307 l28,307
Additional paid-in capital l,7l6,074 l,7l6,074
Retained earnings l,243,177 l,262,545
Net unrealized gain (loss) on
available-for sale securities 37,648 70,540
Less investment in Twenty Services
Holding, Inc. (60,000) (60,000)
---------- ----------
Net stockholders' equity 3,l15,717 3,167,977
---------- ----------
Total liabilities and
stockholders' equity $3,l39,796 $3,210,614
========== ==========
</TABLE>
3
<PAGE>
TWENTY SERVICES, INC.
CONDENSED STATEMENT OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ending Six Months Ending
June 30, JUNE 30,
--------------------- ---------------------
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
Revenues $ 40,991 $ 60,033 $ 78,2l6 $ l25,779
Expenses:
General and
Administrative 37,246 35,318 78,368 102,467
---------- ---------- ---------- ----------
Loss from operations 3,745 24,7l5 (l52) 23,3l2
Other income:
Gain on sale of property
and investments - 18,490 2l,l42 30,45l
---------- ---------- ---------- ----------
Income before income taxes 3,745 43,205 20,990 53,763
Provision for
income taxes - l,750 5,000 4,500
---------- ---------- ---------- ----------
Net income (loss) $ 3,745 $ 41,455 $ l5,990 $ 49,263
========== ========== ========== ==========
Weighted average number
of common shares
outstanding 1,283,068 1,283,068 1,283,068 1,283,068
======================== =========================
Earnings per share* $ .00 $ .02 $ .00 $ .02
========== ========== ========== ==========
</TABLE>
* After giving effect on a pro-rata basis to anticipated
preferred dividends of $.07 per share per annum on
505,ll0 shares.
4
<PAGE>
TWENTY SERVICES, INC.
CONDENSED STATEMENT OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
---------------------
1996 1995
--------- ---------
<S> <C> <C>
Cash flows from operating activities:
Interest and dividends received $ 82,373 $ 129,162
Rental income 2,176 725
Cash paid employees and suppliers (76,295) (l02,395)
Income taxes paid - (l00,000)
--------- ---------
Net cash used by operating activities 8,254 (72,508)
--------- ---------
Cash flows from investing activities:
Principal collected on loans 529,645 75,679
Loans made to customers (3l6,645) (l22,500)
Purchase of securities (254,503) (46l,860)
Proceeds from sale of assets
and securities 191,578 311,220
Principal collected on held-to-maturity
securities l,098 309,682
Purchase of property and equipment (24,498) (20,985)
--------- ---------
126,675 9l,236
--------- ---------
Cash flows from financing activities:
Preferred stock dividends (35,358) (35,357)
--------- ---------
Net cash used by financing activities (35,358) (35,357)
--------- ---------
Net increase (decrease) in cash 99,57l (16,629)
Cash, beginning of period 4l,379 29l,271
--------- ---------
Cash, end of period $ 140,950 $ 274,642
========= =========
</TABLE>
5
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
-------------------------------
During the six months ended June 30, 1996, the Registrant's liquidity
increased primarily as a result of collection of loans and other receivables
offset by the payment of dividends on preferred stock. The Company has no notes
payable nor long term debt and does not anticipate the need for borrowing in the
near future. The Registrant has sufficient cash and temporary cash investments
to meet its short term liquidity needs. Should long term liquidity needs exceed
cash and temporary cash investments, then the Registrant would dispose of
marketable securities as it deems appropriate. Current trends and known demands
and commitments do not create a need for liquidity in excess of the Company's
current abilities to generate liquidity.
The Company anticipates that its operating activities will continue to use
net cash flows, that its investing activities will generate positive net cash
flows and that its financing activities will continue to use cash flows.
During the second quarter of 1996, the Registrant concentrated upon (i)
collecting its loans, including those considered in determining the allowance
for loan losses and (ii) the selective extension of credit to customers and
investment of excess cash at rates commensurate with risk assumed. In addition,
the Registrant selected investments based on maximizing its return on those
investments commensurate with the risk assumed.
RESULTS OF OPERATIONS
---------------------
COMPARISON OF THE THREE (3) MONTHS PERIOD ENDED JUNE 30, 1996
WITH THE CORRESPONDING PERIOD OF 1995
The Registrant reported net income of $3,745 for the three (3) months ended
June 30, 1996 as compared to net income of $4l,455 for the corresponding 1995
period. The decrease was primarily due to an decrease in the gain on the sale
of property and marketable securities of approximately $19,000 offset by related
income taxes coupled with approximately $l7,000 decline in revenue.
REVENUES
- --------
Revenues declined from $60,033 for the three months ended June 30, 1995 to
$40,991 for the corresponding 1996 period due to approximately $13,000 decrease
in interest income and approximately $7,000 decrease in dividend income. These
changes resulted from a shift in invested assets.
6
<PAGE>
EXPENSES
- --------
General and administrative expenses increased from $35,318 in 1995 to
$37,246 for the corresponding 1996 period due primarily to increased costs of
servicing and reporting to stockholders.
COMPARISON OF THE SIX (6) MONTHS PERIOD JUNE 30, 1996
WITH THE CORRESPONDING PERIOD OF 1995
The Registrant's net income ($l5,990) for the six months ended June 30,
1996 was approximately $33,000 less than the corresponding 1995 period primarily
as the result of lower revenues and $9,000 less gain on sale of assets offset by
lower operating expenses.
REVENUES
- --------
During the six (6) months period ending June 30, 1996, revenues decreased
by approximately $48,000, or 38% as compared to the corresponding period of
1995. Interest income decreased approximately $40,000 or 52% as compared to the
1995 period. Dividend income decreased by approximately $9,000 as compared to
the 1995 period. These changes resulted from a shift in invested assets.
EXPENSES
- --------
During the six (6) months period ended June 30, 1996, expenses decreased by
approximately $24,000 as compared to the corresponding period of 1995.
Contributing to the decrease were decreased payroll costs of approximately
$l5,000 and costs of servicing and reporting to stockholders of approximately
$9,000.
- --------------------------------------------------------------------------------
The above financial statements include all the adjustments which, in the opinion
of Management, are necessary for a fair presentation of such financial
information in conformity with generally accepted accounting principles. All
adjustments are of a normal, recurring nature.
7
<PAGE>
PART II
OTHER INFORMATION
Item l. Legal Proceedings - None
Item 2. Changes in Securities - None
Item 3. Defaults Upon Senior Securities - None
Item 4. Submission of Matters to a Vote of Security Holders -
On July 3, 1996 at the Annual Meeting of Shareholders,
James P. Armatas, David J. Noble and A. J.
Strickland, III were reelected as Directors of the Company by
the shareholders.
Item 5. Other Information - None.
8
<PAGE>
TWENTY SERVICES, INC.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
TWENTY SERVICES, INC.
---------------------
(Registrant)
August 12, 1996 /s/ Thomas L. Hinson, Jr.
- -------------------------- ----------------------------
Date Thomas L. Hinson, Jr.
Executive Vice-President and
Treasurer
9
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C> <C>
<PERIOD-TYPE> 6-MOS 6-MOS
<FISCAL-YEAR-END> JUN-30-1996 DEC-31-1995
<PERIOD-START> JAN-01-1996 JAN-01-1995
<PERIOD-END> JUN-30-1996 JUN-30-1995
<CASH> 140,950 41,379
<SECURITIES> 1,567,163 1,532,614
<RECEIVABLES> 593,025 814,334
<ALLOWANCES> 27,293 27,293
<INVENTORY> 0 0
<CURRENT-ASSETS> 0 0
<PP&E> 78,195 53,697
<DEPRECIATION> 35,639 32,617
<TOTAL-ASSETS> 3,139,769 3,210,614
<CURRENT-LIABILITIES> 24,079 42,637
<BONDS> 0 0
0 0
50,511 50,511
<COMMON> 128,307 128,307
<OTHER-SE> 2,936,899 2,989,159
<TOTAL-LIABILITY-AND-EQUITY> 3,139,796 3,210,614
<SALES> 78,216 125,779
<TOTAL-REVENUES> 78,216 125,779
<CGS> 0 0
<TOTAL-COSTS> 78,368 102,467
<OTHER-EXPENSES> 0 0
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 0 0
<INCOME-PRETAX> 20,990 53,763
<INCOME-TAX> 5,000 4,500
<INCOME-CONTINUING> 15,990 49,263
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 15,990 49,263
<EPS-PRIMARY> .00 .02
<EPS-DILUTED> .00 .02
</TABLE>
