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 SEPTEMBER 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 Adress:
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 of 1934
during the preceding 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 14 consecutively numbered pages.
<PAGE>
PART I
FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS REQUIRED BY FORM 10-Q
TimeOne, Inc. ("Registrant" or "Company") files herewith an unaudited
balance sheet of the Registrant as of September 30, 1997 and the related
statements of income and cash flows for the three month periods ended September
30, 1997 and September 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.
<PAGE>
TimeOne, Inc.
Consolidated Balance Sheet
(Unaudited)
ASSETS
CURRENT ASSETS
September 30,
1997
----------------
Cash $235,151
Accounts Receivable 165,706
Inventory 18,806
Marketable Securities 339,406
Prepaid Expenses & Supplies 60,249
----------------
Total Current Assets 819,318
PROPERTY, PLANT AND EQUIPMENT (at cost)
Building Improvements 202,691
Building 1,494,000
Furniture, Fixtures, & Equipment 943,108
Land 581,000
----------------
3,220,799
Less Accumulated Depreciation (828,697)
----------------
Total Property, Plant & Equipment 2,392,102
OTHER ASSETS
Startup Costs 13,913
Deposit 2,501
Montana Property 52,590
Q-Lube Joint Venture 62,663
Deferred Tax Asset 93,400
----------------
Total Other Assets 225,067
----------------
TOTAL ASSETS $ 3,436,487
================
<PAGE>
TimeOne, Inc.
Consolidated Balance Sheet
(Unaudited)
LIABILITIES AND STOCKHOLDERS EQUITY
CURRENT LIABILITIES
September 30,
1997
---------------
Accounts Payable, Payroll and Sales Tax $ 79,446
Loans Payable 190,843
Loans Payable - Related Parties 163
---------------
Total Current Liabilities 270,452
LONG TERM LIABILITIES
Loans Payable - Bank One 1,566,471
---------------
Total Long Term Liabilities 1,566,471
---------------
Total Liabilities 1,836,923
STOCKHOLDERS EQUITY
Common Stock 846
Additional paid in capital 1,278,268
Retained Earnings 369,402
---------------
1,648,516
Less Treasury Stock (48,952)
---------------
1,599,564
---------------
TOTAL LIABILITY AND STOCKHOLDERS EQUITY $ 3,436,487
===============
<PAGE>
TimeOne, Inc.
Consolidated Statement of Operations
(Unaudited)
<TABLE>
<CAPTION>
For Three Months Ended For Nine Months Ended
September September September September
REVENUES: 30, 1997 30, 1996 30, 1997 30, 1996
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Car Wash $ 370,129 $ 411,299 $ 1,064,175 $ 1,144,833
Boutique - Net 5,180 5,770 17,888 21,549
Fuel Sales - Net 4,342 5,089 11,400 14,359
Carpet Express Equipment 0 (27) 16 600
Discounts (3,150) (3,151) (9,144) (8,086)
----------- ----------- ----------- -----------
TOTAL REVENUES 376,501 418,980 1,084,335 1,173,255
COSTS AND EXPENSES:
Salaries, Labor and Commissions 177,027 181,777 502,772 508,020
Taxes and Benefits 28,507 28,488 85,848 77,250
Interest and Credit Card Fees 48,923 58,069 153,098 133,291
Travel, Auto, Promotion, Advertise 4,723 5,208 16, 913 19,268
Office, Telephone, Supplies, Print 46,723 44,708 128,174 121,471
Utilities, Insurance, Maintenance 36,140 25,681 102,778 89,958
Depreciation and Amortization 35,392 26,673 107,267 78,063
Professional Fees and Other 22,797 28,872 85,104 70,285
----------- ----------- ----------- -----------
TOTAL COSTS AND EXPENSES 400,232 399,476 1,181,954 1,097,606
----------- ----------- ----------- -----------
Net Operational Income (23,731) 19,504 (97,619) 75,649
Contract Services and Miscellaneous 4,076 (363) 2,663 2,069
Interest and Dividends 3,588 1,994 13,552 4,477
Gain (Loss) on Sale of Securities 679 42,687 (1,994) 79,230
Gain on Property Sale 0 0 213,315 0
Q Lube Joint Venture Income 12,663 0 12,663 0
----------- ----------- ----------- -----------
TOTAL OTHER REVENUE 21,006 44,318 240,199 85,776
----------- ----------- ----------- -----------
Net Income Before Taxes (2,725) 63,822 142,580 161,425
Income Taxes 0 0 2,425 100
----------- ----------- ----------- -----------
NET INCOME $ (2,725) $ 63,822 $ 140,155 $ 161,325
=========== =========== =========== ===========
NET INCOME PER SHARE $ NIL $ NIL $ .01 $ .01
=========== =========== =========== ===========
</TABLE>
<PAGE>
TimeOne, Inc.
Consolidated Statement of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
For Three Months Ended For Nine Months Ended
September September September September
OPERATING ACTIVITIES: 30, 1997 30, 1996 30, 1997 30, 1996
- --------------------- -------- -------- -------- --------
<S> <C> <C> <C> <C>
Net Income $ (2,725) $63,822 $140,155 $161,325
Adjustments to reconcile net income
(loss) to net cash provided by operating
activities:
Sale of West Valley Property 0 0 (213,315) 0
Depreciation and Amortization 35,392 26,673 107,267 78,063
(Increase) Decrease in Receivables 26,314 3,883 16 (12,311)
(Increase) Decrease in Pre-Paid 1,400 (1,862) (9,170) (39,059)
(Increase) Decrease in Inventory 1,679 1,234 28 7,680
Write Off Obsolete Assets 72 2,277 8,967 2,277
(Increase) Decrease in Accounts Payable,
And Taxes Payable 6,095 6,024 24,654 29,983
----- ----- ------ ------
NET CASH PROVIDED
BY OPERATING ACTIVITIES 68,227 102,051 58,602 227,958
INVESTING ACTIVITIES:
Sale of West Valley Property 0 0 549,400 0
Cost of Securities Sold 1,622 52,662 9,895 171,941
Decrease (Increase) in Deposits (1,068) 0 (1,068) 2,932
Purchase of Securities 0 (98,073) (6,069) (237,818)
Purchase of Property, Plant, And Equip. (2,103) (12,189) (84,551) (1,514,259)
Land Purchase 0 0 0 (581,000)
Investment and Earnings from Q Lube (62,663) 0 (62,663) 0
-------- -------- -------- ----------
NET CASH PROVIDED (USED)
BY INVESTING ACTIVITIES (64,212) (57,600) 404,944 (2,158,204)
FINANCING ACTIVITIES:
Increase in Long Term Debt 0 0 0 1,953,727
Issue Common Stock 0 32,813 0 157,811
Repayment of Loans and Leases (11,971) (36,242) (303,891) (88,803)
Sale of West Valley Property 0 0 (150,000) 0
-------- -------- --------- ---------
NET CASH PROVIDED (USED) BY FINANCING (11,971) (3,429) (453,891) 2,022,735
-------- ------ -------- ---------
INCREASE (DECREASE) IN CASH (7,956) 41,022 9,655 92,489
CASH AND EQUIVALENTS
AT BEGINNING OF PERIOD 243,107 228,553 225,496 177,086
------- ------- ------- -------
CASH AND EQUIVALENTS AT
END OF PERIOD $235,151 $269,575 $235,151 $269,575
======== ======== ======== ========
</TABLE>
<PAGE>
TimeOne, Inc
Consolidated Statement of Stockholders Equity
(Unaudited)
<TABLE>
<CAPTION>
Common Stock Additional Retained Treasury Stock
Shares Amount Paid In Earnings Shares Amount
Capital
---------- -------- ----------- ------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Balances 12/31/93 6,113,900 $611 $1,120,692 $(122,044) 109,000 $(48,952)
Net Income for Year
Ended 12/31/94 109,604
---------- -------- ----------- ------- -------- --------
Balances 12/31/94 6,113,900 $611 $1,120,692 $(12,440) 109,000 $(48,952)
Net Income for Year
Ended 12/31/95 133,857
---------- -------- ----------- ------- -------- --------
Balances 12/31/95 6,113,900 $611 $1,120,692 $121,417 109,000 $(48,952)
Net Income for Year
Ended 12/31/96 107,831
Stock Issued for Assets 2,000,000 200 124,800
Restricted Stock
Issued to Employees 350,000 35 32,776
---------- -------- ----------- ------- -------- --------
Balances 12/31/96 8,463,900 846 1,278,268 229,248 109,000 $(48,952)
Net Income for 9 Months
Ended 9/30/97 140,155
---------- -------- ----------- ------- -------- --------
Balances 9/30/97 8,463,900 $846 $1,278,268 $369,403 109,000 $(48,952)
========= ==== ========== ======== ======= =========
</TABLE>
<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 as trading securities at market
value in accordance with SFAS #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 $3,231
which expire in 1997 through 2000, and contributions carryover of $32,524,
expiring in 1998 through 2000. The company has a net operating loss carryover
which if not used will expire as follows:
Amount Expiration Date
--------- -----------
Year Ended Federal Federal
---------- --------- ---------
12/31/90 $128,809 12/31/05
12/31/91 123,837 12/31/06
---------
$252,646
=========
INVENTORY
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.
<PAGE>
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 obligated under a maintenance contract on its signs. The contract
is in effect until December 31, 1999 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 building 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 due 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.
1997 1996
Interest ------------------ ------------------
Rate % Current Long Term Current Long Term
-------- -------- ---------- -------- ----------
G. Phillip Condie 7.5 $ 0 $ 0 $ 50,000 $ 95,000
Escrow Service 9.5 5,000 7,550 4,631 14,137
Dan Pentelute 8.75-10.5 163 0 163 0
Bank One 8.26 185,843 1,558,921 185,843 1,596,918
Bank One 8.25 0 0 150,000 0
Associates 18.0 0 0 1,497 0
-------- ---------- -------- ---------
$191,006 $1,566,471 $392,134 $1,706,055
======== ========== ======== ===========
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
12/31/00 52,331
Thereafter 1,335,385
------------
$ 1,757,477
<PAGE>
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 authoritative 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 September 30, 1997 and 1996 consisted of the following:
September September
30, 1997 30, 1996
--------- ---------
Trade accounts receivable $ 15,706 $ 32,406
Note Receivable 150,000 0
--------- ---------
Total Receivables $ 165,706 $ 32,406
========= =========
NOTE F - START-UP COSTS
These are costs associated with development of the car wash. The costs are being
amortized, depreciated or expensed. The costs include travel to view other car
washes, 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 car wash 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 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.
<PAGE>
PART I
FINANCIAL INFORMATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
OPERATING RESULTS.
CHANGES IN FINANCIAL CONDITION
As of September 30, 1997 the Company had current assets of $819,318 compared to
$654,363 as of December 31, 1996. Cash increased $9,655 for the nine months
ended September 30, 1997. The increase in cash is attributable to the sale of
real estate. The increase in receivables is due to the Note from John Park
relating to the sale of the West Valley property. Current liabilities increased
from $258,591 as of December 31, 1996 to $270,452 as of September 30, 1997. This
increase is due to increased accounts payable.
Inventory decreased $28 from $18,834 as of December 31, 1996 to $18,806 as of
September 30,1997. Marketable securities have decreased $3,826 from $343,232 as
of December 31,1996 to $339,406 as of September 30, 1997.
CHANGES IN RESULTS OF OPERATIONS
Carwash volume decreased 4,224 cars from 28,729 for the 3 month period ended
September 30, 1996 to 24,505 for the same period ended September 30, 1997. Much
of the decrease in volume can be traced to the month of August, which was
amongst the wettest ever recorded in Utah. Volume has also decreased due to the
major reconstruction of I-15, which has closed most of the freeway ramps,
forcing traffic onto secondary streets. The resulting increase in traffic has
made it difficult to enter and exit the carwash property. This traffic
congestion is expected to continue until the project's completion in 2001.
Revenue for the 3 month period ended September 30, 1997 was $376,501 compared to
$418,980 for the same period ended September 30, 1996, a decrease of $42,479 or
10.1%. The decrease in revenue is due to lower carwash volume.
During the 3 months ended September 30, 1997 costs and expenses were $400,232
compared to $399,476 for the same period ended September 30, 1996, an increase
of $756 or .18%. This slight increase is due to higher utility expenses and
increased depreciation expense.
The Company posted a net loss of $(2,725) for the 3 months ended September 30,
1997, compared to a net profit of $63,822 for the same period ended September
30, 1996, a decrease of $(66,547) or 104%. This decrease can be attributed to
lower revenues along with lower carwash volumes. The Company has a net loss on
carwash operations for the 3 months ended September 30, 1997 of ($23,731)
compared to a operating profit of $19,504 for the same period ended September
30, 1996. Management is uncertain as to when the carwash operations will return
to profitability. It is highly likely the year will end with an operating loss.
Net loss per share for the period was negligible.
<PAGE>
Revenues for the 9 months ended September 30, 1997 were $1,084,335 compared to
$1,173,255 for the same period ended September 30, 1996, a decrease of $88,920
or 7.5%. This decrease is due to lower carwash volumes. The Company has washed
72,314 cars as of September 30, 1997 compared to 79,383 cars as of September 30,
1996, a decrease of 7,069 or 8.9%.
For the 9 months ended September 30, 1997 costs and expenses were $1,181,954
compared to $1,097,606 for the same period ended September 30, 1996, an increase
of $84,348 or 7.7%. The increase is due to higher interest, utilities, and
depreciation expenses, relating to updating of the carwash equipment and the
loan on the carwash property. While labor costs are slightly lower, they are
more than offset by the increases described above.
Management expects continued upward pressure on wages during the fourth quarter
of 1997. During the fourth quarter many seasonal jobs are created with the
opening of the ski season. This will make an already tight labor market even
more competitive.
The Company posted a net profit of $140,155 for the 9 months ended September 30,
1997 compared to $161,325 for the same period ended September 30, 1996, a
decrease of $21,170 or 13%. The Company had an operating loss of $97,619 as of
September 30, 1997 compared to an operating profit of $75,649 as of September
30, 1996. The overall profitability of the Company as of September 30, 1997 is
due to the sale of the West Valley property and income from the Q Lube joint
venture. The Q Lube joint venture produced income of $12,663 for the quarter.
The Company is confident that the Q Lube joint venture will continue to produce
income.
The current ratio as of September 30, 1997 was 3.02 compared to 1.56 as of
September 30, 1996. Long term liabilities were $1,566,471 as of September 30,
1997 compared to $1,728,580 for the same period ended September 30, 1996.
Management believes sufficient working capital exists for its continuing
operations.
<PAGE>
ITEM 1. LEGAL PROCEEDINGS
None.
ITEM 2. CHANGES IN SECURITIES
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
The Registrant has no securities which are reportable under this item.
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
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
None.
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 November 12, 1997.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information
extracted from TimeOne, Inc. September 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> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1997
<CASH> 235,151
<SECURITIES> 339,406
<RECEIVABLES> 165,706
<ALLOWANCES> 0
<INVENTORY> 18,806
<CURRENT-ASSETS> 819,318
<PP&E> 3,220,799
<DEPRECIATION> 828,697
<TOTAL-ASSETS> 3,436,487
<CURRENT-LIABILITIES> 270,452
<BONDS> 1,566,471
0
0
<COMMON> 846
<OTHER-SE> 1,647,670
<TOTAL-LIABILITY-AND-EQUITY> 3,436,487
<SALES> 1,084,335
<TOTAL-REVENUES> 1,324,534
<CGS> 0
<TOTAL-COSTS> 1,028,856
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 153,098
<INCOME-PRETAX> 142,580
<INCOME-TAX> 2,425
<INCOME-CONTINUING> 140,115
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 140,115
<EPS-PRIMARY> .01
<EPS-DILUTED> .01
</TABLE>