<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 30,1997 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
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(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, 1997 and December 3l, 1996 3
Condensed Statements of Operations
Three Months ended September 30, 1997 and 1996
and Nine Months ended September 30, 1997 and 1996 4
Condensed Statements of Cash Flows
Nine Months Ended September 30, 1997 and 1996 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>
September 30, December 31,
1997 1996
------------- ------------
<S> <C> <C>
Assets
Cash and temporary investments $ 379,736 $ 95,438
Marketable Securities 1,656,176 1,597,040
Investment-American Equity
Investment Life Holding Company 713,700 713,700
Finance receivables, net 61,209 248,750
Notes Receivable-Related Parties, net 245,652 263,148
Property and equipment, net 34,310 38,310
Other assets 73,990 154,186
---------- ----------
Total assets $3,164,773 $3,110,572
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Accounts payable and accrued expenses $ 38,102 $ 20,211
Income taxes payable 22,300 25,000
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Total liabilities 60,402 45,211
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Stockholders' equity:
Preferred stock, Cumulative, $.l0
par value 49,939 50,511
Common Stock, par value $.l0 128,307 128,307
Additional paid-in capital 1,716,074 1,716,074
Retained earnings 1,209,528 1,169,946
Net unrealized gain on
available-for sale securities 60,523 60,523
Less investment in Twenty Services
Holding, Inc. (60,000) (60,000)
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Net stockholders' equity 3,104,371 3,065,361
---------- ----------
Total Liabilities and
Stockholders' Equity $3,164,773 $3,110,572
========== ==========
</TABLE>
3
<PAGE>
TWENTY SERVICES, INC.
CONDENSED STATEMENT OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ending Nine Months Ending
September 30, September 30,
---------------------- --------------------
1997 1996 1997 1996
---------- --------- --------- ---------
<S> <C> <C> <C> <C>
Revenues $ 50,021 $ 50,050 $143,588 $128,266
Expenses:
General and
Administrative 31,148 29,099 115,681 107,467
---------- --------- --------- ---------
Income from
operations 18,873 20,951 27,907 20,799
Other income:
Recovery of
previously reserved
Note receivable, net 110,000 - 110,000 -
Gain (loss) on disposal
of property
and investments (30,515) (30,515) 2l,142
---------- --------- --------- ---------
Income before
income tax 98,358 20,95l 107,392 4l,941
Provision for income taxes (32,150) - (33,950) (5,000)
---------- --------- --------- ---------
Net income 66,208 20,951 73,442 36,94l
========== ========= ========= =========
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) $ .02 $ (.0l) $ .02 $ .00
========== ========= ========= =========
</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,
-----------------------------
1997 1996
--------- -----------
<S> <C> <C>
Cash flows from operating activities:
Interest and dividends received $114,211 $113,889
Rental income 9,483 3,264
Cash paid employees and suppliers (100,009) (l02,796)
--------- ---------
Net cash provided by (used by)
operating activities 23,685 14,357
--------- ---------
Cash flows from investing activities:
Principal collected on loans 439,340 581,758
Loans made to customers ( 97,993) (476,354)
Purchase of securities (374,489) (254,503)
Proceeds from sale of assets
and securities 324,518 191,578
Principal collected on held-to-maturity
securities 4,595 1,550
Equipment - (24,498)
--------- ---------
Net cash provided by
investing activities 295,971 19,531
--------- ---------
Cash flows from financing activities:
Preferred stock dividends (35,358) (35,358)
--------- ---------
Net cash used by financing activities (35,358) (35,358)
--------- ---------
Net increase (decrease) in cash 284,298 (l,470)
Cash and temporary investments,
beginning of period 95,438 4l,379
--------- ---------
Cash and temporary investments,
end of period $ 379,736 $ 39,909
========= =========
</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, 1997, the Registrant's liquidity
increased primarily as a result of 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 1997, 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, 1997
WITH THE CORRESPONDING PERIOD OF 1996
The Registrant reported net income of $66,208 for the three (3) months
ended September 30, 1997 as compared to net income of $20,951 for the
corresponding 1996 period. The increase was due to the recovery of a previously
reserved note receivable of $l10,000, net, less a loss of $30,515 on the
disposal of various property and other assets.
6
<PAGE>
EXPENSES
--------
General and administrative expenses remained level for the two periods.
COMPARISON OF THE NINE (9) MONTHS PERIOD SEPTEMBER 30, 1997
WITH THE CORRESPONDING PERIOD OF 1996
REVENUES
- --------
During the nine (9) months period ended September 30, 1997, revenues
increased by approximately $15,300, or 12% as compared to the corresponding
period of 1996.
The nine (9) months period ended September 30, 1997 included a net gain on
recovery of a previously reserved note receivable in the amount of $110,000 less
net losses of $30,515 on the disposal of various property and other assets. The
corresponding period for 1996 included a gain on sale of marketable securities
in the amount of $2l,l42.
EXPENSES
- --------
During the nine (9) months period ended September 30, 1997, expenses
increased by approximately $5,600, or 5% as compared to the corresponding period
of 1996. Normal increases in costs due to inflation were the primary
contributing factors.
- --------------------------------------------------------------------------------
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)
October 31, 1997 /s/ Jack C. Bridges
- -------------------- --------------------------------
Date Jack C. Bridges
Executive Vice-President
9
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C> <C>
<PERIOD-TYPE> 9-MOS 9-MOS
<FISCAL-YEAR-END> DEC-31-1997 DEC-31-1996
<PERIOD-START> JAN-01-1997 JAN-01-1996
<PERIOD-END> SEP-01-1997 SEP-01-1996
<CASH> 379,736 39,909
<SECURITIES> 2,369,876 2,357,545
<RECEIVABLES> 408,844 754,976
<ALLOWANCES> (27,993) (27,993)
<INVENTORY> 0 0
<CURRENT-ASSETS> 0 0
<PP&E> 78,195 80,318
<DEPRECIATION> (43,885) (39,885)
<TOTAL-ASSETS> 3,164,773 3,164,870
<CURRENT-LIABILITIES> 60,402 27,092
<BONDS> 0 0
0 0
49,939 50,511
<COMMON> 128,307 128,307
<OTHER-SE> 2,926,125 2,958,960
<TOTAL-LIABILITY-AND-EQUITY> 3,164,773 3,164,870
<SALES> 143,588 128,266
<TOTAL-REVENUES> 223,073 149,408
<CGS> 115,681 107,467
<TOTAL-COSTS> 115,681 107,467
<OTHER-EXPENSES> 0 0
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 0 0
<INCOME-PRETAX> 107,392 41,941
<INCOME-TAX> 33,950 5,000
<INCOME-CONTINUING> 73,442 36,941
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 73,442 36,941
<EPS-PRIMARY> .02 .01
<EPS-DILUTED> 0 0
</TABLE>
