<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 SEPTEMBER 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
<PAGE>
TWENTY SERVICES, INC.
INDEX
Twenty Services, Inc. Financial Statements
(Unaudited)
Condensed Balance Sheets
September 30, 1996 and December 3l, 1995 3
Condensed Statements of Operations
Three Months ended September 30, 1996 and 1995
and Nine Months ended September 30, 1996 and 1995 4
Condensed Statements of Cash Flows
Nine Months Ended September 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)
Assets
<TABLE>
<CAPTION>
September 30, December 31,
1996 1995
------------ ------------
<S> <C> <C>
Cash and temporary investments $ 39,909 $ 41,379
Receivable-American Equity Investment
Life Holding Company 0 4l0,000
Marketable securities l,567,545 l,532,614
Investment-American Equity
Investment Life Holding Company 790,000 790,000
Finance receivables, net 687,695 372,059
Property and equipment, net 40,433 2l,080
Other assets 39,288 43,482
---------- ----------
Total assets $3,164,870 $3,210,614
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Accounts payable and accrued expenses $ 17,092 $ 11,637
Income taxes payable l0,000 31,000
---------- ----------
Total liabilities 27,092 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,264,128 l,262,545
Net unrealized gain (loss) on
available-for sale securities 38,758 70,540
Less investment in Twenty Services
Holding, Inc. (60,000) (60,000)
---------- ----------
Net stockholders' equity 3,l37,778 3,167,977
---------- ----------
Total liabilities and
stockholders' equity $3,164,870 $3,210,614
========== ==========
</TABLE>
3
<PAGE>
TWENTY SERVICES, INC.
CONDENSED STATEMENT OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ending Nine Months Ending
September 30, September 30,
------------------- -------------------
1996 1995 1996 1995
-------- --------- -------- --------
<S> <C> <C> <C> <C>
Revenues $50,050 $ 64,637 $128,266 $190,416
Expenses:
General and
Administrative 29,099 26,801 107,467 129,268
--------- --------- ---------- ----------
Income (loss) from
operations 20,95l 37,836 20,799 6l,148
Other income:
Gain (loss) on sale of
property and investments - (48,475) 2l,142 (l8,024)
--------- --------- ---------- ----------
Income (loss) before
income tax 20,95l (l0,639) 4l,94l 43,124
Provision for income taxes - (4,500) (5,000) -
--------- --------- ---------- ----------
Net income (loss) 20,95l (6,l39) 36,94l $ 43,l24
========= ========= ========= =========
Weighted average number of
common shares outstanding 1,283,068 1,283,068 1,283,068 1,283,068
========= ========= ========= =========
Earnings per share*
Net income (loss) $ .01 $ (.0l) $ .01 $ .01
========= ========= ========= =========
</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>
Nine Months Ended
September 30,
----------------------
1996 1995
---------- ----------
<S> <C> <C>
Cash flows from operating activities:
Interest and dividends received $ 113,889 $ 182,642
Rental income 3,264 l,813
Other income - 10
Cash paid employees and suppliers (102,796) (l27,823)
Income taxes paid - (l10,000)
---------- ---------
Net cash provided by (used by)
operating activities 14,357 ( 53,358)
---------- ---------
Cash flows from investing activities:
Principal collected on loans 581,758 94,839
Loans made to customers (476,354) (144,919)
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,550 309,872
Equipment (24,498) (20,985)
---------- ---------
19,531 88,167
---------- ---------
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 (l,470) (548)
Cash and temporary investments,
beginning of period 4l,379 29l,271
---------- ---------
Cash and temporary investments, end of period $ 39,909 $ 290,723
========== =========
</TABLE>
5
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
-------------------------------
During the nine months ended September 30, 1996, the Registrant's liquidity
decreased slightly primarily as a result of purchase of securities and the
payment of dividends on preferred stock offset by the collection of loans. 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 third 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 SEPTEMBER 30, 1996
WITH THE CORRESPONDING PERIOD OF 1995
The Registrant reported net income of $20,951 for the nine (9) months ended
September 30, 1996 as compared to net loss of $6,l39 for the corresponding 1995
period. The increase was due to a $48,000 loss on disposal of securities in
1995, offset by a decline in interest income in the 1996 period.
Revenues declined from $64,637 for the nine months ended September 30, 1995
to $50,050 (a 23% decrease) for the corresponding 1996 period due to
approximately $17,000 (47% decrease) in interest income. Lease income increased
approximately $3,000. These changes resulted from a shift in invested assets.
6
<PAGE>
EXPENSES
- --------
General and administrative expenses increased from $26,801 in 1995 to
$29,097 for the corresponding 1996 period due to higher depreciation charges.
COMPARISON OF THE NINE (9) MONTHS PERIOD SEPTEMBER 30, 1996
WITH THE CORRESPONDING PERIOD OF 1995
REVENUES
- --------
During the nine (9) months period ended September 30, 1996, revenues
decreased by approximately $62,000, or 33% as compared to the corresponding
period of 1995. Interest income decreased approximately $57,000 or 50% as
compared to the 1995 period. Lease income increaed by approximately $5,000, or
262% Dividend income decreased by approximately $10,000 or 13% as compared to
the 1995 period. These changes resulted from a shift in invested assets.
The nine (9) months period ended September 30, 1996 included a gain on sale
of marketable securities of $2l,l42 compared to losses of $l8,024 during 1995.
Income taxes for the 1996 period were $5,000 higher than the 1995 period.
EXPENSES
- --------
During the nine (9) months period ended September 30, 1996, expenses
decreased by approximately $22,000, or l7% as compared to the corresponding
period of 1995. Contributing to the decrease were reduced payroll costs of
approximately $l5,000 and costs of servicing and reporting to stockholders of
approximately $7,000.
- --------------------------------------------------------------------------------
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 -
None.
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)
11-13-96 /s/ Thomas L. Hinsons, Jr.
- ---------------------------- -----------------------------
Date Thomas L. Hinson, Jr.
Executive Vice-President and
Treasurer
9
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C> <C>
<PERIOD-TYPE> 9-MOS 9-MOS
<FISCAL-YEAR-END> SEP-30-1996 DEC-31-1995
<PERIOD-START> JAN-01-1996 JAN-01-1995
<PERIOD-END> SEP-30-1996 SEP-30-1995
<CASH> 39,909 41,379
<SECURITIES> 1,567,545 1,532,614
<RECEIVABLES> 714,988 809,352
<ALLOWANCES> 27,293 27,293
<INVENTORY> 0 0
<CURRENT-ASSETS> 0 0
<PP&E> 78,195 53,697
<DEPRECIATION> 37,762 32,617
<TOTAL-ASSETS> 3,164,870 3,210,614
<CURRENT-LIABILITIES> 27,092 42,637
<BONDS> 0 0
0 0
50,511 50,511
<COMMON> 128,307 128,307
<OTHER-SE> 2,958,960 2,989,159
<TOTAL-LIABILITY-AND-EQUITY> 3,164,870 3,210,614
<SALES> 128,266 190,416
<TOTAL-REVENUES> 128,266 190,416
<CGS> 0 0
<TOTAL-COSTS> 107,467 129,268
<OTHER-EXPENSES> 0 0
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 0 0
<INCOME-PRETAX> 41,941 43,124
<INCOME-TAX> 5,000 0
<INCOME-CONTINUING> 36,941 43,124
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 36,941 43,124
<EPS-PRIMARY> .01 .01
<EPS-DILUTED> .01 .01
</TABLE>
