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Previous: CONCURRENT COMPUTER CORP/DE, 10-Q, 1997-11-14 |
Next: FIRST CAPITAL INCOME PROPERTIES LTD SERIES X, 10-Q, 1997-11-14 |
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to __________
Commission file number 0-19657
--------------------
TRM COPY CENTERS CORPORATION
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Oregon 93-0809419
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
5208 N.E. 122nd Avenue
Portland, Oregon 97230
------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(503) 257-8766
------------------------------------------------------
(Registrant's telephone number, including area code)
------------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed 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.
YES X NO
--- ---
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date:
CLASS OUTSTANDING AT SEPTEMBER 30, 1997
------------ ---------------------------------
Common Stock 6,975,941
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
TRM COPY CENTERS CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
June 30, September 30,
1997 1997
------------ ------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 2,528 $ 2,999
Accounts receivable, net 7,704 7,465
Inventories 4,611 4,968
Prepaid expenses and other 1,399 1,888
-------- --------
Total current assets 16,242 17,320
Equipment and vehicles, less accumulated depreciation 33,872 33,878
Other assets 46 44
-------- --------
$ 50,160 $ 51,242
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Checks in transit $ 1,409 $ 726
Accounts payable 1,568 2,358
Accrued expenses 3,697 3,617
-------- --------
Total current liabilities 6,674 6,701
Long-term debt 400 484
Deferred income taxes 4,258 4,492
-------- --------
Total liabilities 11,332 11,677
-------- --------
Stockholders' equity:
Preferred stock, no par value. Authorized
5,000 shares; no shares issued
and outstanding -- --
Common stock, no par value. Authorized
10,000 shares; issued and
outstanding 6,931 and 6,976 shares 16,601 16,860
Retained earnings 22,279 23,312
Cumulative translation adjustment (52) (607)
-------- --------
Total stockholders' equity 38,828 39,565
-------- --------
$ 50,160 $ 51,242
======== ========
</TABLE>
-2-
<PAGE>
<TABLE>
<CAPTION>
TRM COPY CENTERS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
Three Months Ended
September 30,
---------------------------
1996 1997
-------- --------
<S> <C> <C>
Sales $ 16,577 $ 16,238
Less discounts 2,736 2,570
-------- --------
Net sales 13,841 13,668
Cost of sales 7,405 7,352
-------- --------
Gross profit 6,436 6,316
Selling, general and administrative
expense 4,487 4,507
-------- --------
Operating income 1,949 1,809
Other (income) expense:
Interest 147 12
Other, net 88 89
-------- --------
Income before income taxes 1,714 1,708
Provision for income taxes 677 675
-------- --------
Net income $ 1,037 $ 1,033
======== ========
Net income per share $ 0.14 $ 0.14
======== ========
Weighted average common and
common equivalent shares
outstanding 7,332 7,361
======== ========
</TABLE>
-3-
<PAGE>
<TABLE>
<CAPTION>
TRM COPY CENTERS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(In thousands)
Common Stock Cumulative
---------------------- Retained Translation
Shares Amount Earnings Adjustment Total
------ ------- -------- ------------- -------
<S> <C> <C> <C> <C> <C>
Balance at June 30, 1996 6,931 $ 16,601 $ 22,279 $ (52) $ 38,828
Exercise of stock options 38 202 -- -- 202
Issuance to employees 7 57 57
Net income for the
three months ended
September 30, 1997 -- -- 1,033 -- 1,033
Foreign currency translation
adjustment -- -- -- (555) (555)
------ -------- -------- ------- --------
Balances at September 30, 1997 6,976 $ 16,860 $ 23,312 $ (607) $ 39,565
====== ======== ======== ======= ========
</TABLE>
-4-
<PAGE>
<TABLE>
<CAPTION>
TRM COPY CENTERS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
Three Months Ended
September 30,
---------------------------------
1996 1997
-------- --------
<S> <C> <C>
Operating activities:
Net income $ 1,037 $ 1,033
Adjustments to reconcile net
income to net cash provided by
operating activities:
Depreciation and amortization 1,410 1,369
Loss on disposal of equipment
and vehicles 16 3
Changes in items affecting operations:
Accounts receivable (197) 239
Inventories 61 (357)
Prepaid expenses and other (168) (489)
Accounts payable (517) 790
Accrued expenses 190 (80)
Deferred income tax 237 234
-------- --------
Total operating activities 2,069 2,742
-------- --------
Investing activities:
Proceeds from sale of equipment 142 130
Capital expenditures (832) (1,392)
Other (36) 2
-------- --------
Total investing activities (726) (1,260)
-------- --------
Financing activities:
Change in checks in transit, net 281 (683)
Principal payments on long-term debt (1,128) 84
Proceeds from long-term debt -- --
Net proceeds from issuance of common stock 176 259
-------- --------
Total financing activities (671) (340)
-------- --------
Effect of exchange rate changes 143 (671)
-------- --------
Net increase (decrease) in cash and
cash equivalents 815 471
Cash and cash equivalents at beginning
of period 873 2,528
-------- --------
Cash and cash equivalents at end of period $ 1,688 $ 2,999
======== ========
</TABLE>
-5-
<PAGE>
TRM COPY CENTERS CORPORATION
Notes to Condensed Consolidated Financial Statements
----------------------------------------------------
1. Interim Financial Data:
The condensed financial statements included herein have been prepared by
the Company, without audit, pursuant to the rules and regulations of the
Securities and Exchange Commission and reflect all adjustments, consisting
only of normal recurring adjustments, which, in the opinion of management,
are necessary for a fair statement of the results of the interim periods.
These condensed interim financial data should be read in conjunction with
the Company's latest annual report to shareholders.
2. Net Income Per Share:
Net income per share is computed based on the weighted average number of
shares of common stock and common stock equivalents assumed to be
outstanding during the periods. Common stock equivalents consist of options
to purchase stock (using the treasury stock method).
3. Inventories (in thousands):
<TABLE>
<CAPTION>
June 30, September 30,
1997 1997
------- ------------
<S> <C> <C>
Paper $ 1,231 $ 1,476
Toner and developer 692 791
Parts 2,688 2,701
------- -------
$ 4,611 $ 4,968
======= =======
</TABLE>
-6-
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
General
The Company has continued to expand its business by opening TRM Centers in
new and existing market areas. The number of market areas served increased from
66 to 72 from June 30, 1996 to June 30, 1997. The number of TRM Centers grew
from 31,719 to 34,796 over the same period. This expansion has continued into
the first three months of fiscal 1998 with the opening of two new market areas
and 264 TRM Centers. As of September 30, 1997, the Company had 74 market areas
with 35,060 TRM Centers.
Results of Operations
Sales for the first quarter were $16.2 million, down 2.0% from first
quarter sales of the previous year of $16.6 million. This decline is due to
decreased average sales per unit. The growth in the number of installed units
reflects expansion in both existing and recently opened service areas.
Sales discounts are the portion of revenue retained by customers. Sales
discounts as a percentage of sales continue to decline, from 16.5% to 15.8% in
the comparable quarters. This reflects changes made in business agreements with
new customers. The discount rate generally varies between individual retail
businesses based on volume.
Cost of sales decreased 0.7% compared to the prior quarter. This is due to
copy volume, partially offset by increased field service wages.
Selling, general and administrative costs grew by 0.4% to $4.5 million in
the first quarter. This is due to an increase in health care costs and vehicle
fleet costs.
Interest costs are incurred because the Company uses bank borrowings to
help fund its expansion. The decrease in interest costs is primarily due to
lower debt levels, which decreased from $7.0 million as of September 30, 1996,
to $.5 million as of September 30, 1997.
Liquidity and Capital Resources
During the three months ended September 30, 1997, cash flow from operations
of $2.1 million fully funded capital expenditures of $1.4 million and allowed
for repayment of $.1 million in bank borrowings.
The Company currently anticipates capital expenditures of approximately $8
to $10 million over the next twelve months. The Company intends to finance these
capital expenditures with cash generated from operations and with bank
borrowings. The Company expects that these sources will provide adequate cash to
fund its expansion through at least June 30, 1998.
Information in this Management's Discussions and Analysis about the
Company's goals, plans and expectations regarding expansion and capital
expenditures constitutes forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. The following factors are among the factors that could
cause actual results to differ materially from the forward-looking statements:
business conditions in the market areas in which the Company operates,
competitive factors, customer demand for the Company's services, the Company's
ability to execute its plans successfully and the volatility of paper costs. Any
forward-looking statements should be considered in light of these factors as
well as risk factors and business conditions discussed in the Company's SEC Form
10-K for the year ended June 30, 1997.
-7-
<PAGE>
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibit 27 - Financial Data Schedule
(b) Reports on Form 8-K.
There were no reports filed on Form 8-K during the three
months ended September 30, 1997.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, Registrant
has duly caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
TRM COPY CENTERS CORPORATION
Date: November 14, 1997 By: /s/ PAUL M. BROWN
---------------------- --------------------------------------
Paul M. Brown
Secretary, Vice President, Finance and
Chief Financial Officer
-8-
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-END> SEP-30-1997
<CASH> 2999
<SECURITIES> 0
<RECEIVABLES> 7675
<ALLOWANCES> (210)
<INVENTORY> 4968
<CURRENT-ASSETS> 17320
<PP&E> 54573
<DEPRECIATION> (20695)
<TOTAL-ASSETS> 51242
<CURRENT-LIABILITIES> 6701
<BONDS> 484
16860
0
<COMMON> 0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 51242
<SALES> 13668
<TOTAL-REVENUES> 13668
<CGS> 7352
<TOTAL-COSTS> 11859
<OTHER-EXPENSES> 89
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 12
<INCOME-PRETAX> 1708
<INCOME-TAX> 675
<INCOME-CONTINUING> 1033
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1033
<EPS-PRIMARY> .14
<EPS-DILUTED> .14
</TABLE>
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