<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, 1997 Commission File No. 0-8488
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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
June 30, 1997 and December 3l, 1996 3
Condensed Statements of Operations
Three Months ended June 30, 1997 and 1996
and Six Months ended June 30, 1997 and 1996 4
Condensed Statements of Cash Flows
Six Months Ended June 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)
Assets
<TABLE>
<CAPTION>
June 30, December 31,
1997 1996
---- ----
<S> <C> <C>
Cash and temporary investments $ 258,250 $ 95,438
Marketable securities 1,503,616 1,597,040
Investment-American Equity
Investment Life Holding Company 713,700 713,700
Finance receivables, net 150,492 248,750
Notes Receivable-Related Parties, net 325,873 263,148
Property and equipment, net 34,310 38,310
Other assets 91,450 154,186
---------- ----------
Total assets $3,077,691 $3,110,572
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Accounts payable and accrued expenses $ 17,007 $ 20,211
Income taxes payable 22,300 25,000
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Total liabilities 39,307 45,211
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Stockholders' equity:
Preferred stock, Cumulative, $.l0
par value 50,159 50,5ll
Common Stock, par value $.l0 l28,307 l28,307
Additional paid-in capital l,7l6,074 l,7l6,074
Retained earnings l,143,321 l,169,946
Net unrealized gain (loss) 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 3,038,384 3,065,361
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Total liabilities and
stockholders' equity $3,077,691 $3,110,572
========== ==========
</TABLE>
3
<PAGE>
TWENTY SERVICES, INC.
CONDENSED STATEMENT OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ending Six Months Ending
June 30, June 30,
------------------- -------------------
1997 1996 1997 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
Revenues $ 47,584 $ 40,991 $ 93,567 $ 78,216
Expenses:
General and
Administrative 53,891 37,246 84,534 78,368
-------- -------- -------- -------
Income (loss) from
operations (6,307) 3,745 9,032 (l52)
Other income:
Gain (loss) on sale of
property and investments (l,500) (l,500) 2l,142
-------- -------- -------- -------
Income (loss) before
income tax (7,807) 3,745 7,532 20,990
Provision for income taxes 2,500 - (l,800) (5,000)
-------- -------- -------- -------
Net income (loss) $ (5,307) $ 3,745 $ 5,732 $ l5,990
======== ======== ======== =========
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) $ (.00) $ .00 $ .00 $ .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>
Six Months Ended
June 30,
--------------------
1997 1996
---- ----
<S> <C> <C>
Cash flows from operating activities:
Interest and dividends received $ 78,569 $ 82,373
Rental income 5,104 2,176
Cash paid employees and suppliers (83,738) (76,295)
--------- --------
Net cash provided by (used by)
operating activities (65) 8,254
--------- --------
Cash flows from investing activities:
Principal collected on loans 193,028 529,645
Loans made to customers (97,993) (3l6,645)
Purchase of securities (5l,223) (254,503)
Proceeds from sale of assets
and securities 150,000 191,578
Principal collected on held-to-maturity
securities 4,432 l,098
Purchase of property and equipment - (24,498)
--------- --------
Net cash provided by investing
securities l98,235 l26,675
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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 l62,8l2 99,571
Cash and temporary investments,
beginning of period 95,438 4l,379
--------- --------
Cash and temporary investments,
end of period $ 258,250 $140,950
========= ========
</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, 1997, 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 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 investing activities will generate positive cash flows and
that is financing activities will continue to use cash flows.
During the second quarter of 1997, the Registrant concentrated upon
(i) collecting its loans, including those considered in determining the
allowance for loan losses. 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, 1997
WITH THE CORRESPONDING PERIOD OF 1996
The Registrant reported a net loss of $5,307 for the three (3) months ended
June 30, 1997 as compared to net income of $3,745 for the corresponding 1996
period. The decrease was primarily due to an increase in general and
administrative expenses of approximately $l6,000.
REVENUES
- --------
Revenues increased from $40,991 for the three months ended June 30,
1996 to $47,584 for the corresponding 1997 period due to approximately $6,000
increase in interest income. These changes resulted from a shift in invested
assets.
6
<PAGE>
EXPENSES
--------
General and administrative expenses increased from $37,246 in 1996 to
$53,891 for the corresponding 1997 period due primarily to increased
professional services.
COMPARISON OF THE SIX (6) MONTHS PERIOD JUNE 30, 1997
WITH THE CORRESPONDING PERIOD OF 1996
REVENUES
- --------
During the six (6) months period ended June 30, 1997, revenues increased by
approximately $15,000, or 19% as compared to the corresponding period of 1996.
Interest income increased approximately $4,000 as compared to the 1996 period.
Dividend income increased by approximately $10,000 as compared to the 1996
period. These changes resulted from a shift in invested assets.
EXPENSES
- --------
During the six (6) months period ended June 30, 1997, expenses increased by
approximately $6,000 as compared to the corresponding period of 1996.
Contributing to the increase were increased professional costs of approximately
$l0,000.
- --------------------------------------------------------------------------------
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)
August 5, 1997 /s/ Jack C. Bridges
- -------------------- ----------------------------
Date Jack C. Bridges
Executive Vice-President and
Treasurer
9
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C> <C>
<PERIOD-TYPE> 6-MOS 6-MOS
<FISCAL-YEAR-END> DEC-31-1997 DEC-31-1996
<PERIOD-START> JAN-01-1997 JAN-01-1996
<PERIOD-END> JUN-30-1997 JUN-30-1996
<CASH> 258,250 140,950
<SECURITIES> 2,217,316 2,357,163
<RECEIVABLES> 735,608 627,120
<ALLOWANCES> (167,793) (27,747)
<INVENTORY> 0 0
<CURRENT-ASSETS> 0 0
<PP&E> 78,195 78,195
<DEPRECIATION> (43,885) (35,885)
<TOTAL-ASSETS> 3,077,691 3,139,796
<CURRENT-LIABILITIES> 39,307 24,079
<BONDS> 0 0
0 0
50,511 50,511
<COMMON> 128,307 128,307
<OTHER-SE> 2,859,566 2,936,899
<TOTAL-LIABILITY-AND-EQUITY> 3,077,691 3,139,796
<SALES> 92,067 99,358
<TOTAL-REVENUES> 92,067 99,358
<CGS> 84,534 78,368
<TOTAL-COSTS> 84,534 78,468
<OTHER-EXPENSES> 0 0
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 0 0
<INCOME-PRETAX> 7,532 20,990
<INCOME-TAX> 1,800 5,000
<INCOME-CONTINUING> 5,732 15,990
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 5,732 15,990
<EPS-PRIMARY> 0 0
<EPS-DILUTED> 0 0
</TABLE>
