SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTER ENDED JUNE 30, 1997
COMMISSION FILE NO. 2-70345-NY
TimeOne, Inc.
(Exact name of Registrant as specified in its Charter)
Nevada 88-0182534
(State or other jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
6500 South State Street
Murray, Utah 84107-7219
(Address of Principal Executive Offices)
Registrant's Telephone Number, including Area Code:
(801) 268-9280
Former Address:
n/a
Former Name, Former Address, and Former Fiscal Year,
if changed since last report
Buffs-N-Puffs, Ltd.
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filled by Section 13 or 15(d) of the Securities Exchange Act during the
past 12 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 90 days.
(1) Yes: X No:
(2) Yes: X No:
Number of Shares Outstanding at the End of the Fiscal Quarter:
8,354,900 shares of common stock
(Indicate Number of Shares Outstanding of Each Class
of Common
Stock as of the end of the Quarter
Page 1 of 11 consecutively numbered pages.
1
<PAGE>
PART I
FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS REQUIRED BY FORM 10-QSB
TimeOne, Inc. ("Registrant" or "Company") files herewith an unaudited
balance sheet of the Registrant as of June 30, 1997 and the related statements
of income and cash flows for the three and six month periods ended June 30, 1997
and June 30, 1996 . The unaudited financial statements included in this report
on Form 10-QSB have been prepared by the Company and have not been the subject
of independent review. In the opinion of the management of the Company, the
financial statements fairly present the financial condition of the Company.
2
<PAGE>
TimeOne, Inc.
Consolidated Balance Sheet
Unaudited
<TABLE>
<CAPTION>
ASSETS
June 30, 1997
-------------------
Current Assets
<S> <C>
Cash $ 243,107
Receivables (Note E) 192,020
Marketable Securities (Note A) 341,028
Inventory (Note A) 20,485
Prepaid Expenses & Supplies 61,649
-------------------
Total Current Assets 858,289
Property, Plant and Equipment (at cost)
Building Improvements 202,691
Building 1,494,000
Furniture, Fixtures & Equipment 941,005
Land 581,000
-------------------
3,218,696
Less Accumulated Depreciation (795,015)
-------------------
Total Property, Plant and Equipment 2,423,681
Other Assets
Startup Costs 15,305
Deposit 1,433
Montana Property 52,590
Deferred Tax Asset 93,400
-------------------
Total Other Assets 162,728
-------------------
TOTAL ASSETS $ 3,444,698
===================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts Payable, Payroll and Sales Tax $ 73,351
Loan Payable 153,637
Loans Payable - Related Parties 163
-------------------
Total Current Liabilities 227,151
Long-Term Liabilities 1,615,257
-------------------
Total Liabilities 1,842,408
Stockholders' Equity
Capital Stock, Common 846
Additional Paid-In Capital 1,278,268
Retained Earnings 372,128
-------------------
1,651,242
Less Treasury Stock (109,000 shares) (48,952)
-------------------
Total Stockholders' Equity 1,602,290
-------------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 3,444,698
===================
</TABLE>
3
<PAGE>
TimeOne, Inc.
Consolidated Statement of Operations
(Unaudited)
<TABLE>
<CAPTION>
For the three months ended For the six months ended
June 30, June 30,
----------------------------- ----------------------------
1997 1996 1997 1996
------------- ------------- ------------- -------------
REVENUES
<S> <C> <C> <C> <C>
Car Wash $ 362,842 $ 390,257 $ 694,046 $ 733,534
Boutique - Net 6,814 8,703 12,708 15,779
Fuel Sales - Net 3,548 4,424 7,058 9,270
Carpet Express Equipment - Net 16 225 16 627
Discounts (3,066) (2,835) (5,994) (4,935)
------------- ------------- ------------- -------------
TOTAL REVENUES 370,154 400,774 707,834 754,275
COSTS AND EXPENSES
Salaries, Labor and Commissions 166,208 175,958 325,745 326,243
Taxes and Benefits 27,193 22,969 57,341 48,762
Interest and Credit Card Fees 49,116 56,887 104,175 75,222
Travel, Auto, Promotional and Advertising 7,382 8,749 12,190 14,060
Office, Telephone, Printing and Supplies 40,939 41,189 81,451 76,763
Utilities, Maintenance, Rent and Insurance 32,738 21,920 66,638 64,277
Depreciation and Amortization 35,143 25,832 71,875 51,390
Professional Fees and Other 29,637 18,551 62,307 41,413
------------- ------------- ------------- -------------
TOTAL COSTS AND EXPENSES 388,356 372,055 781,722 698,130
------------- ------------- ------------- -------------
Net Income (Loss) before Other Income (18,202) 28,719 (73,888) 56,145
Contract Services and Miscellaneous 6,056 1,533 (1,413) 2,432
Interest and Dividends 2,913 928 9,964 2,483
Gain on Property Sale 213,315 0 213,315 0
Gain (Loss) on Sale of Securities 0 17,752 (2,673) 36,543
------------- ------------- ------------- -------------
222,284 20,213 219,193 41,458
Income Taxes (2,425) (100) (2,425) (100)
------------- ------------- ------------- -------------
NET INCOME $ 201,657 $ 48,832 $ 142,880 $ 97,503
============= ============= ============= =============
NET INCOME PER SHARE $ .02 $ 0 $ .02 $ .01
============= ============= ============= =============
</TABLE>
4
<PAGE>
TimeOne, Inc.
Consolidated Statement of Stockholders Equity
(Unaudited)
<TABLE>
<CAPTION>
Additional Retained
Common Stock Paid-In Earnings
Shares Amount Capital (Deficit)
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Balances 12/31/93 6,113,900 $ 611 $ 1,120,692 $ (122,044)
Net income for year ended 12/31/94 109,604
------------- ------------- ------------- -------------
Balances 12/31/94 6,113,900 611 1,120,692 (12,440)
Net income for year ended 12/31/95 133,857
------------- ------------- ------------- -------------
Balances 12/31/95 6,113,900 611 1,120,692 121,417
Stock issued for assets 2,000,000 200 124,800
Restricted stock issued to employees 350,000 35 32,776
Net income for year ended 12/31/96 107,831
------------- ------------- ------------- -------------
Balances 12/31/96 8,463,900 846 1,278,268 229,248
Net Income for six months ended 6/30/97 142,880
------------- ------------- ------------- -------------
Balances 6/30/97 8,463,900 $ 846 $ 1,278,268 $ 372,128
============= ============= ============= =============
</TABLE>
5
<PAGE>
TimeOne, Inc.
Consolidated Statement of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
For the three months ended For the six months ended
June 30, June 30,
----------------------------- ----------------------------
1997 1996 1997 1996
------------- ------------- ------------- -------------
OPERATING ACTIVITIES
<S> <C> <C> <C> <C>
Net Income $ 201,657 $ 48,832 $ 142,880 $ 97,503
Adjustments to reconcile net income
to net cash provided by operating
activities:
Sale of West Valley Property (213,315) 0 (213,315) 0
Write off Obsolete Assets 0 0 8,895 0
Depreciation and Amortization 35,143 25,832 71,875 51,390
Change in Current Assets and Liabilities:
Receivables (25,050) (4,525) (26,298) (16,194)
Prepaid Expenses, Supplies and
Deposits (14,368) (6,345) (10,570) (37,197)
Inventory 1,905 (1,347) (1,651) 6,446
Accounts Payable and Payroll
Tax Payable (39,886) 11,456 18,559 23,959
------------- ------------- ------------- -------------
NET CASH PROVIDED (USED) BY
OPERATING ACTIVITIES (53,914) 73,903 (9,625) 125,907
INVESTING ACTIVITIES
Sale of West Valley Property 549,400 0 549,400 0
Land Purchase 0 0 0 (581,000)
Cost of Securities Sold 0 18,159 8,273 117,469
Purchase of Securities 0 (15,374) (6,069) (137,935)
Purchase of Property and Equipment (1,874) (6,070) (82,448) (1,502,071)
Decrease in Deposits 0 0 0 2,932
------------- ------------- ------------- -------------
NET CASH PROVIDED (USED) BY
INVESTING ACTIVITIES 547,526 (3,285) 469,156 (2,100,605)
FINANCING ACTIVITIES
Increase in Long-Term Debt 0 3,727 0 1,953,727
Issue Common Stock 0 0 0 125,000
Repayment of Loans and Leases (230,223) (13,003) (291,920) (52,562)
Sale of West Valley Property (150,000) 0 (150,000) 0
------------- ------------- ------------- -------------
NET CASH PROVIDED (USED) BY
FINANCING ACTIVITES (380,223) (9,276) (441,920) 2,026,165
------------- ------------- ------------- -------------
INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS 113,389 61,342 17,611 51,467
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 129,718 167,211 225,496 177,086
------------- ------------- ------------- -------------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $ 243,107 $ 228,553 $ 243,107 $ 228,553
============= ============= ============= =============
</TABLE>
6
<PAGE>
TimeOne, Inc.
Notes to Consolidated Financial Statements
(Unaudited)
NOTE A - Summary of Significant Accounting Policies
Revenue Recognition
Interest income is accrued as earned. Gains or losses on the sale of
securities are recorded as of the trade date.
Depreciation
Depreciation on office equipment and furniture is provided over the
estimated useful life of five to ten years using an accelerated method,
and depreciation on the office building is being provided over the
estimated useful life of 30 to 31.5 years using the straight line method.
Marketable Securities
Marketable securities, as a group, are carried at market value in
accordance with FAS #115. Prior to January 1, 1994, the securities were
carried at the lower of cost or market. At December 31, 1996, a decrease
of $31,519 was made to adjust to market ($10,207 increase was made for
1995 and $9,666 decrease was made for 1994).
Income Taxes
No federal income taxes were due for the year ended December 31, 1996. At
December 31, 1996, the Company had unused general business credits of
$7,844 which expire in 1998 thru 2000, and contributions carryover of
$32,524, expiring in 1998 through 2001. The Company has a capital loss
carryover of $14,340 which expires in 1997. The Company also has a net
operating loss carryover which, if not used, will expire as follows:
Year Ended Amount Expiration Date
------------ --------- ---------------
December 31, 1990 $299,501 12/31/2005
December 31, 1991 123,837 12/31/2006
---------
$423,338
=========
Inventory consists of items for sale and use in the operations of the
carwash. Inventory is recorded at lower of cost or market, on a first-in,
first-out basis.
Cash and Cash Equivalents
For financial statement purposes, the company considers all highly liquid
investments with an original maturity of three months or less when
purchased to be cash equivalents.
NOTE B - COMMITMENTS
The company is also obligated under a maintenance contract on its signs.
The contract was signed to be effective in January of 1996 and is three
years in length with monthly payments of $789.
NOTE C - LOANS PAYABLE
On March 26, 1996 the Company entered into an agreement with Daniel F.
Pentelute, to purchase the carwash buildings and land. The company took
out a mortgage of $1,800,000 and a line of credit of $150,000. In addition
2,000,000 shares of stock were issued to Mr. Pentelute at a price of 1/8
or $125,000. The total purchase price was $2,075,000. The purchase price
was below the appraised value of 2,400,000 actual and $3,600,000
replacement cost. The loan agreements were signed with Bank One, Utah. The
1,800,000 loan is a 20 year amortization with a 5 year call at 8.26%
interest. The line of credit is a 1 year renewable term at 8.25% interest.
During March 1997 the Company repaid $50,000 of the line of credit and
extended the line until June of 1997. In May 1997 the Company repaid the
$100,000 remaining balance on the line of credit. Also, in May 1997 the
Company paid the balance due on the G. Phillip Condie loan. These
obligations were repaid out of proceeds from the sale of the West Valley
property.
7
<PAGE>
NOTE C - LOANS PAYABLE (continued)
<TABLE>
<CAPTION>
Interest 1997 1996
---------------------------- ----------------------------
Rate Current Long-term Current Long-term
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
G. Phillip Condie 7.50 $ 0 $ 0 $ 50,000 $ 95,000
Escrow Services 9.50 5,000 9,606 4,631 16,675
Dan Pentelute 8.75-10.50 163 0 163 0
Bank One 8.26 47,417 1,706,871 185,843 1,614,157
Bank One 8.25 0 0 150,000 0
------------- ------------- ------------- -------------
$ 52,580 $ 1,716,477 $ 390,637 $ 1,725,832
============= ============= ============= =============
</TABLE>
Scheduled principal reductions for the next five years are as follows:
12/31/97 $ 152,580
12/31/98 168,986
12/31/99 48,195
12/31/2000 52,331
Thereafter 1,346,965
-----------------
$ 1,769,057
=================
NOTE D - DEFERRED TAX ASSET
In February, 1992, the Financial Account Standards board adopted Statement
of Financial Accounting Standards No. 109 Accounting for Income Taxes,
which supersedes substantially all existing authoritive literature for
accounting for income taxes and requires deferred tax balances to be
adjusted to reflect the tax rates in effect when those amounts are
expected to become payable or refundable. The Statement was applied in the
Company's financial statements for the calendar year commencing January 1,
1993 by recognizing the cumulative effect of the change during 1993.
NOTE E - RECEIVABLES
Receivables at June 30, 1997 and 1996 consisted of the following:
June 30, June 30,
1997 1996
----------------- ----------------
Trade receivables $ 42,020 $ 32,435
Note receivable 150,000 0
----------------- ----------------
$ 192,020 $ 32,435
================= ================
A note receivable for $150,000 due November 1997 from John Park and
Associates, relating to the sale of the West Valley property makes up the
large increase in receivables.
NOTE F - START-UP COSTS
These are costs associated with development of the carwash. The costs are
being amortized, depreciated or expensed. The costs include travel to view
other carwashes, equipment, inventory, legal fees for patents and
trademarks, etc. During 1994 and 1995 the Company spent $25,900 associated
with property being held for development into a second carwash operation.
These costs were written off when the West Valley land was sold in May
1997.
NOTE G - MONTANA LAND
During 1994, Daniel Pentelute, the major shareholder of the Company,
purchased 21 acres of land in Montana and three (3) days later sold a
one-half interest to the Company at his cost.The other one-half interest
is owned by Desert Land Enterprises, whose sole shareholder is Daniel
Pentelute. It is anticipated that the Company will be able to sell the
land in the future at a substantial profit.
8
<PAGE>
PART I
FINANCIAL INFORMATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
OPERATING RESULTS.
Changes in Financial Condition
At June 30,1997 the Company had current assets of $858,289 compared to
$654,363 as of December 31, 1996. Receivables increased $175,779 from
$16,241 as of December 31, 1996 to $192,020 as of June 30,1997. This
increase is due to credit card receivables and a note receivable relating
to the sale of the West Valley property. Current liabilities decreased
$31,440 from $258,591 as of December 31, 1996 to $227,151 as of June 30,
1997. This decrease is mainly due to paying off the line of credit and the
loan on the West Valley property. Inventory increased $1,651 from $18,834
as of December 31, 1996 to $20,485 as of June 30, 1997.
Changes in Results of Operations
Carwash volume decreased 2,356 cars from 26,220 for the 3 month period
ended June 30, 1996 to 23,864 for the same period ended June 30, 1997.
Volume reduction is weather related, and due to major road construction
altering normal travel.
Revenue for the 3 month period ended June 30, 1997 was $370,154 compared
to revenue of $400,774 for the same period ended June 30, 1996, a decrease
of $30,620, or 7.6%.
During the 3 months ended June 30, 1997 costs and expenses were $388,356
compared to $372,055 for the same period ended June 30, 1996, an increase
of $16,301 or 4.4%. The increases are mainly due to higher depreciation,
interest costs and higher utility expense relating to equipment and
building purchases in previous quarters.
For the 3 months ended June 30, 1997 the Company posted a profit of
$201,657 compared to a profit of $48,832 for the same period ended June
30, 1996, an increase of $152,825 or 312%. This increase is due to the
sale of the West Valley property. For the six month period ended June 30,
1997 the Company posted a profit of $142,880 compared to a profit of
$97,503 for the same six month period ended June 30, 1996, an increase of
$45,377 or 46.5%. This increase is also due to the sale of the West Valley
property. Net earnings per share were .02 for the period ended June
30,1997.
As of June 30, 1997 cash and cash equivalents were $243,107 compared to
$228,553 as of June 30, 1996.
The current ratio as of June 30, 1997 was 3.78 compared to 1.24 as of June
30, 1996.
Management is confident that sufficient working capital exists for its
operations.
PART II.
ITEM 1. LEGAL PROCEEDINGS
During the reporting period the Company was not party to any legal proceedings.
ITEM 2. CHANGES IN SECURITIES
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
The Registrant has no securities which are reportable under this item.
9
<PAGE>
ITEM 4. MATTERS SUBMITTED TO A VOTE OF THE COMPANY'S SHAREHOLDERS
No matters were submitted to a vote of the Company's shareholders during this
quarter.
ITEM 5. OTHER INFORMATION
In May of 1997 the Company sold the West Valley Property to John Park and
Associates. The land was sold for $555,000. The Company is holding a note
payable of $150,000 due September of 1997. In addition the Company is receiving
approximately $1,100 per month in interest until the note is paid. Proceeds of
the sale went to pay down existing debt, including the Condie loan and the Bank
One line of credit. Additional monies were placed into money market accounts.
On June 18,1997 shareholders representing 5,080,900 shares of the outstanding
8,354,900 common shares of Buffs-N-Puffs, Ltd. agreed, without meeting, to amend
the Company's articles of incorporation to change the name of the company to
TimeOne, Inc. The amendment to the Company's articles of incorporation became
effective July 24, 1997.
On July 28, 1997, the Company signed a joint venture agreement with Lubeco
Management, Inc. a Delaware corporation, to develop and operate a Q-Lube oil
change center. The Company and Lubeco each own 50% of the joint venture. The
Company will provide the land and Lubeco the building, to the joint venture on a
lease basis. Each party will also provide $50,000 in operating capital.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
None
10
<PAGE>
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.
TimeOne, Inc.
By: /s/Alan R. Theis
------------------------------
Alan R.Theis
On Behalf of the Registrant
and as Secretary/Treasurer
and Vice President
Dated August 12, 1997
11
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from
TimeOne, Inc. June 30, 1997 financial statements and is qualified in
its entirety by reference to such financial statements.
</LEGEND>
<CIK> 0000350133
<NAME> TimeOne, Inc.
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<CASH> 243,107
<SECURITIES> 341,028
<RECEIVABLES> 192,020
<ALLOWANCES> 0
<INVENTORY> 20,485
<CURRENT-ASSETS> 858,289
<PP&E> 3,218,681
<DEPRECIATION> 795,015
<TOTAL-ASSETS> 3,444,698
<CURRENT-LIABILITIES> 227,151
<BONDS> 1,615,257
0
0
<COMMON> 846
<OTHER-SE> 1,650,396
<TOTAL-LIABILITY-AND-EQUITY> 3,444,698
<SALES> 707,834
<TOTAL-REVENUES> 927,027
<CGS> 0
<TOTAL-COSTS> 677,547
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 104,175
<INCOME-PRETAX> 145,305
<INCOME-TAX> 2,425
<INCOME-CONTINUING> 142,880
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 142,880
<EPS-PRIMARY> .02
<EPS-DILUTED> .02
</TABLE>
