<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, 1998 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)
20 CROPWELL ROAD, PELL CITY, AL 35128
- --------------------------------------------------------------------------------
(Address or principal executive offices) (Zip Code)
Registrant's telephone number, including area code (205) 884-7932
--------------
FORMER ADDRESS: 105 VULCAN ROAD, BIRMINGHAM, AL 35209
- --------------------------------------------------------------------------------
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, 1998 and December 3l, 1997 3
Condensed Statements of Operations
Three Months ended June 30, 1998 and 1997 4
and Six Months ended June 30, 1998 and 1997
Condensed Statements of Cash Flows
Six Months Ended June 30, 1998 and 1997 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
June 30, December 31,
1998 1997
---- ----
Cash and temporary investments $ 43,254 $ 85,272
Marketable securities 2,119,489 2,122,716
Investment-American Equity
Investment Life Holding Company 986,189 986,189
Finance receivables, net 89,992 126,091
Notes Receivable-Related Parties, net 25,875 25,875
Property and equipment, net 20,235 22,235
---------- ----------
Total assets $3,285,034 $3,368,378
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Accounts payable, dividends
and accrued expenses $ 20,040 $ 18,671
Income taxes payable 17,180 26,008
---------- ----------
Total liabilities 37,220 44,679
---------- ----------
Stockholders' equity:
Preferred stock, Cumulative, $.l0
par value 50,511 50,5ll
Common Stock, par value $.l0 l28,307 l28,307
Additional paid-in capital l,960,007 1,960,007
Retained earnings l,179,028 l,199,245
Net unrealized gain (loss) on
available-for sale securities (9,039) 45,985
Less investment in Twenty Services
Holding, Inc. (60,000) (60,000)
Treasury Stock (l,000) (356)
---------- ----------
Net stockholders' equity 3,247,814 3,323,699
---------- ----------
Total liabilities and
stockholders' equity $3,285,034 $3,368,378
========== ==========
3
<PAGE>
TWENTY SERVICES, INC.
CONDENSED STATEMENT OF OPERATIONS
(Unaudited)
Three Months Ending Six Months Ending
June 30, June 30,
------------------- -----------------
1998 1997 1998 1997
---- ---- ---- ----
Revenues $46,025 $47,584 $91,496 $93,567
Expenses:
General and
Administrative 39,011 53,891 72,854 84,534
------- ------- ------- -------
Income (loss) from
operations 7,014 (6,307) 18,642 9,033
Other income:
Gain (loss) on sale of
property and investments - (1,500) 3,000 (l,500)
------- ------- ------- --------
Income (loss) before
income tax 7,014 (7,807) 21,642 7,532
Provision for income taxes (2,500) 2,500 (6,500) (1,800)
------- ------- ------- -------
Net income (loss) $ 4,514 $(5,307) $15,142 $ 5,732
======= ======= ======= =======
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
========== ========== ========== ==========
* 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)
Six Months Ended
June 30,
----------------
1998 1997
---- ----
Cash flows from operating activities:
Interest and dividends received $ 85,762 $ 78,569
Rental income 6,229 5,104
Cash paid employees and suppliers (71,485) (83,738)
-------- --------
Net cash provided by (used by)
operating activities 20,506 (65)
-------- --------
Cash flows from investing activities:
Principal collected on loans 36,099 193,028
Loans made to customers - (97,993)
Purchase of securities (63,865) (51,223)
Proceeds from sale of assets
and securities - 150,000
Principal collected on held-to-maturity
securities 600 4,432
-------- --------
Net cash provided (used) by investing
activities (27,166) l98,244
-------- --------
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 (42,018) 162,812
Cash and temporary investments,
beginning of period 85,272 95,438
-------- --------
Cash and temporary investments,
end of period $ 43,254 $258,250
======== ========
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, 1998, 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.
During the second quarter of 1998, the Registrant concentrated upon 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, 1998
WITH THE CORRESPONDING PERIOD OF 1997
The Registrant reported a net income of $4,514 for the three (3) months ended
June 30, 1998 as compared to a net loss of $5,307 for the corresponding 1997
period. The increase was primarily due to a decrease in general and
administrative expenses of approximately $l5,000.
REVENUES
- --------
Revenues decreased from $47,584 for the three months ended June 30, 1997 to
$46,025 for the corresponding 1998 period.
EXPENSES
- --------
General and administrative expenses decreased from $53,891 in 1997 to $39,011
for the corresponding 1998 period due primarily to a decrease in general
overhead expenses.
6
<PAGE>
COMPARISON OF THE SIX (6) MONTHS PERIOD JUNE 30, 1998
WITH THE CORRESPONDING PERIOD OF 1997
REVENUES
- --------
During the six (6) months period ended June 30, 1998, revenues decreased by
approximately $2,000, or 2% as compared to the corresponding period of 1997.
EXPENSES
- --------
During the six (6) months period ended June 30, 1998, expenses decreased by
approximately $12,000 as compared to the corresponding period of 1997.
Contributing to the decrease was a decrease in general overhead 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 4, 1998 /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-31-1998 DEC-31-1997
<PERIOD-START> JAN-01-1998 JAN-01-1997
<PERIOD-END> JUN-30-1998 JUN-30-1997
<CASH> 43,254 258,250
<SECURITIES> 3,105,678 2,217,316
<RECEIVABLES> 130,867 735,608
<ALLOWANCES> (15,000) (167,793)
<INVENTORY> 0 0
<CURRENT-ASSETS> 0 0
<PP&E> 45,235 78,195
<DEPRECIATION> (25,000) (43,885)
<TOTAL-ASSETS> 3,285,034 3,077,691
<CURRENT-LIABILITIES> 37,220 39,307
<BONDS> 0 0
0 0
50,511 50,511
<COMMON> 128,307 128,307
<OTHER-SE> 3,068,996 2,859,566
<TOTAL-LIABILITY-AND-EQUITY> 3,285,034 3,077,691
<SALES> 94,496 92,067
<TOTAL-REVENUES> 94,496 92,067
<CGS> 72,854 84,534
<TOTAL-COSTS> 72,854 84,534
<OTHER-EXPENSES> 0 0
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 0 0
<INCOME-PRETAX> 21,642 7,532
<INCOME-TAX> 6,500 1,800
<INCOME-CONTINUING> 15,142 5,732
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 15,142 5,732
<EPS-PRIMARY> 0 0
<EPS-DILUTED> 0 0
</TABLE>
