U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-QSB
X QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended: March 31, 1997
TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
EXCHANGE ACT
Commission file No. 0-13167
TM CENTURY, INC.
(Name of small business issuer as specified in its charter)
Delaware 73-1220394
(State of incorporation) (IRS
Employer Identification No.)
2002 Academy, Dallas, Texas
75234
(Address of principal executive offices)
(Zip Code)
Issuer's telephone number:
(972) 247-8850
Check whether the issuer (1) filed all reports required to be filed
by Section 13 or 15(d) of the 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. Yes X No___
The number of issuer's shares of Common Stock outstanding as of April
30, 1997 was 2,483,193.<PAGE>
Transitional Small Business Disclosure Format (check one): Yes___ No X
<PAGE>
<TABLE>
TM CENTURY, INC.
Balance Sheets
March 31, 1997 (Unaudited) and September 30, 1996
ASSETS
<CAPTION>
March 31, September 30,
1997 1996
<S> <C> <C>
CURRENT ASSETS
Cash $ 229,723 $ 377,855
Accounts and notes receivable
less allowances of $185,000 and 902,494 829,848
$144,000, respectively
Inventories, net 909,417 1,220,454
Deferred federal income taxes 173,377 171,877
Prepaid expenses and other current assets 109,763 51,573
TOTAL CURRENT ASSETS 2,324,774 2,651,607
PROPERTY AND EQUIPMENT 2,419,442 2,298,086
Less accumulated depreciation (1,404,373) (1,224,005)
NET PROPERTY AND EQUIPMENT 1,015,069 1,074,081
INVENTORIES - NONCURRENT, net 236,556 351,016
OTHER ASSETS 15,903 15,388
TOTAL $3,592,302 $4,092,092
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $187,527 $225,260
Accrued expenses 216,570 123,619
Current portion of obligation under 159,248 121,303
capital lease
Deferred revenue 31,458 24,298
Customer deposits 85,553 71,568
TOTAL CURRENT LIABILTIIES 680,356 566,048
OBLIGATION UNDER CAPITAL LEASE 231,877 246,555
CUSTOMER DEPOSITS - NONCURRENT 162,273 159,531
DEFERRED FEDERAL INCOME TAXES 45,247 43,747
TOTAL LIABILITIES 1,119,753 1,015,881
STOCKHOLDERS' EQUITY
Common stock, $.01 par value; authorized 7,500,000
shares; 2,970,481 shares issued 29,705 29,705
Paid-in capital 2,275,272 2,275,272
Treasury stock - at cost, 487,288 and (1,291,227) (1,250,316)
433,288 shares, respectively
Retained earnings 1,458,799 2,021,550
TOTAL STOCKHOLDERS' EQUITY 2,472,549 3,076,211
TOTAL $3,592,302 $4,092,092
See notes to interim financial statements
</TABLE>
<PAGE>
<TABLE>
TM CENTURY, INC.
Statements of Operations and Retained Earnings (Unaudited)
For the Three Months Ended March 31, 1997 and 1996
<CAPTION>
1997 1996
<S> <C> <C>
REVENUES $1,846,758 $1,766,819
COSTS AND EXPENSES:
Production, programming and technical 744,039 759,140
costs
General and 554,665 592,208
administrative
Selling and commissions 576,354 468,377
Depreciation 90,000 47,562
Reduction in carrying value of 148,000 -
inventories
TOTAL 2,113,058 1,867,287
OPERATING LOSS (266,300) (100,468)
OTHER INCOME
(EXPENSES):
Interest expense (5,503) -
Other, net 3,022 2,086
TOTAL (2,481) 2,086
LOSS BEFORE INCOME (268,781) (98,382)
TAXES
INCOME TAX (BENEFIT)
PROVISION:
Deferred - (7,654)
TOTAL - (7,654)
NET LOSS ($ 268,781) ($90,728)
RETAINED EARNINGS, BEGINNING OF PERIOD 1,727,580 2,725,840
RETAINED EARNINGS, END OF PERIOD $1,458,799 $2,635,112
NET LOSS PER COMMON SHARE ($0.11) ($0.04)
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 2,491,624 2,537,193
See notes to interim financial statements
</TABLE>
<PAGE>
<TABLE>
TM CENTURY, INC.
Statements of Operations and Retained Earnings (Unaudited)
For the Six Months Ended March 31, 1997 and 1996<PAGE>
<CAPTION>
1997 1996
<S> <C> <C>
REVENUES $3,507,398 $3,535,722
COSTS AND EXPENSES:
Production, programming and technical 1,489,488 1,544,411
costs
General and 1,143,011 1,073,964
administrative
Selling and commissions 1,101,476 918,560
Depreciation 180,368 98,375
Reduction in carrying value of 148,000 -
inventories
TOTAL 4,062,343 3,635,310
OPERATING LOSS (554,945) (99,588)
OTHER INCOME
(EXPENSES):
Interest expense (13,180) -
Other, net 5,374 4,589
TOTAL (7,806) 4,589
LOSS BEFORE INCOME (562,751) (94,999)
TAXES
INCOME TAX (BENEFIT)
PROVISION:
Deferred - (19,744)
TOTAL - (19,744)
NET LOSS ($ ($
562,751) 75,255)
RETAINED EARNINGS, BEGINNING OF PERIOD 2,021,550 2,710,367
RETAINED EARNINGS, END OF PERIOD $1,458,799 $2,635,112
NET LOSS PER COMMON SHARE ($0.22) ($0.03)
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 2,514,283 2,537,193
See notes to interim financial statements.
</TABLE>
<PAGE>
<TABLE>
TM CENTURY, INC.
Statements of Cash Flows (Unaudited)
For the Six Months Ended March 31, 1997 and 1996
<CAPTION>
1997 1996
<S> <C> <C>
OPERATING ACTIVITIES:
Net Loss ($562,751) ($75,255)
Adjustments to reconcile net income
to net cash provided by (used in) operations:
Depreciation 180,368 98,375
Amortization 138,190 188,638
Deferred income taxes - (19,744)
Provision for doubtful accounts 40,000 42,000
Reduction in carrying value of 148,000
inventories
Changes in operating assets and liabilities:
Accounts receivable (112,646) 105,284
Inventories 139,307 28,654
Prepaid expenses and other assets (58,705) (7,675)
Accounts payable and accrued 55,218 (101,424)
expenses
Deferred revenue 7,160 -
Customer deposits 16,727 (158,598)
NET CASH PROVIDED BY (USED IN) (9,132) 100,255
OPERATING ACTIVITIES
INVESTING ACTIVITIES:
Acquisition of treasury stock (40,911) -
Purchases of property and equipment (17,478) (18,679)
Principal payments received on notes 0 4,423
receivable
NET CASH USED IN INVESTING ACTIVITIES (58,389) (14,256)
FINANCING ACTIVITIES:
Principal payments on capital lease (80,611) -
obligations
NET CASH USED IN FINANCING ACTIVITIES (80,611) -
INCREASE (DECREASE)IN CASH (148,132) 85,999
CASH AT BEGINNING OF PERIOD 377,855 245,812
CASH AT END OF PERIOD $229,723 $331,811
Supplemental disclosures of cash flow information:
Cash paid for interest $13,180 -
Noncash investing and financing activities
Capital lease obligation incurred $103,878 -
See notes to interim financial statements.
</TABLE>
<PAGE>
TM CENTURY INC.
NOTES TO INTERIM FINANCIAL STATEMENTS
MARCH 31, 1997 AND 1996
1. BASIS OF PRESENTATION
The interim financial statements of TM Century, Inc. (the _Company_)
at March 31, 1997, and for the three and six months ended March 31,
1997 and 1996, are unaudited, but include all adjustments (consisting
only of normal recurring adjustments) which the Company considers
necessary for a fair presentation. The September 30, 1996 balance
sheet was derived from the balance sheet included in the Company's
audited financial statements as filed on Form 10-KSB for the year
ended September 30, 1996. Certain amounts previously reported in
prior interim financial statements have been reclassified to conform
to the 1997 presentation.
The accompanying unaudited interim financial statements are for
interim periods and do not include all disclosures normally provided
in annual financial statements, and should be read in conjunction with
the Company's audited financial statements. The accompanying
unaudited interim financial statements for the three and six months
ended March 31, 1997 are not necessarily indicative of the results
which can be expected for the entire fiscal year.
2. INCOME TAXES
Deferred income taxes are provided, when applicable, on temporary
differences between the recognition of income and expense for tax and
for financial accounting purposes in accordance with Statement of
Financial Accounting Standards No. 109 (_SFAS 109_). Temporary
differences which give rise to deferred taxes include basis
differences of property and equipment, accelerated tax depreciation in
excess of book depreciation, and valuation allowances provided in
excess of amounts deductible for tax purposes. Under the provisions
of SFAS 109, recognition of deferred tax assets is permitted for such
amounts which can be carried forward to future periods.
The Company has net operating loss carryforwards of approximately $1.4
million available to offset future taxable income expiring in 2008
through 2009. The Company has recorded a deferred tax asset of
$173,000 after deduction of a valuation allowance of $400,000 to
reduce the total deferred tax asset because it is likely that a
portion of the tax asset will not be realized. Realization is
dependent on generating sufficient taxable income prior to expiration
of the loss carryforwards. Management believes it is more likely than
not that the non-reserved portion of the deferred tax asset will be
realized. The amount of the deferred tax asset considered realizable,
however, could be reduced in the near term if estimates of future
taxable income during the carryforward period are reduced. Certain
provisions of the tax law may limit the net operating loss, capital
loss and credit carryforwards available for use in any given tax year
in the event of a significant change in ownership interest.
<PAGE>
3. LONG-TERM DEBT AND LEASE OBLIGATIONS
The Company has a $300,000 revolving Line of Credit with a bank which
provides a negative pledge on all accounts receivable, contract
rights, and inventory of the Company. Borrowings under the Line of
Credit bear a fluctuating interest rate of prime plus 1.5%, payable
monthly. The Line of Credit, which bears an annual commitment fee of
0.5% of the unused amounts, is renewable annually, subject to the
consent of both parties. The Line of Credit was renewed through
February 28, 1997 with no other changes in terms. No borrowings were
drawn under the Line of Credit during the quarter. In conjunction
with the Company's leasing arrangement discussed below, the
availability under the Line of Credit was reduced from $300,000 to
$100,000.
In May 1996 the Company entered into a lease agreement for the
financing of an upgrade of its computer hardware and software systems.
During the quarter ended March 31, 1997, the Company obtained
financing on the remaining $100,000 of the total $550,000 project.
The lease is backed by a $200,000 letter of credit which must be
renewed annually subject to the renewal of the Company's Line of
Credit. The requirement of the letter of credit will be reviewed on
an annual basis. The lease has a term of three years and contains an
option to purchase the equipment at its fair market value or renew the
lease at its fair market rental value at the end of the initial term.
Based on borrowing rates currently available to the Company on similar
arrangements, the fair value of the lease agreement approximates the
carrying value.
4. TREASURY STOCK
On December 19, 1996, the Board of Directors by resolution authorized
the Company to purchase up to 50,000 shares of its common stock, and
on January 27, 1997, authorized the Company to purchase an additional
25,000 shares of its common stock on the open market or through
privately negotiated transactions, from time to time, dependent upon
market conditions, through December 31, 1997. As of March 31, 1997,
the Company has made purchases totaling 54,000 shares. During the
quarter ended March 31, 1997, the Company purchased 44,200 shares at
an average price of $.78 per share. These purchases were funded by
cash reserves of the Company. Future purchases are expected to be
funded by cash reserves of the Company.
5. INVENTORY
During the quarter ended March 31, 1997, the Company recorded a charge
against operations of approximately $148,000 to reduce the carrying
value of its equipment inventory and related assets to their net
realizable value.
<PAGE>
TM CENTURY, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATION
TM Century, Inc. is engaged primarily in the creation, production,
marketing, and worldwide distribution of compact disc music libraries,
production libraries, station identification jingles, computer
software used in music scheduling and specialized computer equipment
and software for radio stations.
Forward-Looking Statements
This Quarterly Report contains forward-looking statements about the
business, financial condition and prospects of the Company that
reflect assumptions made by management and management's beliefs based
on information currently available to it. The Company can give no
assurance that the expectations indicated by such forward-looking
statements will be realized. If any of management's assumptions
should prove incorrect, or if any of the risks and uncertainties
underlying such expectations should materialize, the Company's actual
results may differ materially from those indicated by the forward-
looking statements.
The key factors that are not within the Company's control and that may
have a direct bearing on operating results include, but are not
limited to, the Company's ability to develop new products cost-
effectively; continued maturation of the domestic and international
markets for compact disc technology; acceptance by customers of the
Company's existing and any new products and formats; the development
by competitors of products using improved or alternative technologies
and the potential obsolescence of technologies used by the Company;
the continued availability of software, hardware and other products
obtained by the Company from third parties; dependence on
distributors, particularly in the international market, and on third
parties engaged to replicate the Company's products on compact discs;
the retention of employees; the success of the Company's current and
future efforts to reduce operating expenses; the effectiveness of new
marketing strategies; and general economic conditions. There may be
other risks and uncertainties that management is not able to predict.
When used in this Quarterly Report, words such as believes,
expects, intends, plans, anticipates, estimates and similar
expressions are intended to identify forward-looking statements,
although there may be certain forward-looking statements not
accompanied by such expressions. All forward-looking statements are
intended to be covered by the safe harbor created by Section 21E of
the Securities Exchange Act of 1934.
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
The Company relies upon current sales of music libraries, jingles, and
specialized computer equipment and software on terms of cash upon
delivery for operating liquidity. Liquidity is also provided by cash
receipts from customers under contracts for production libraries and
weekly music service contracts having terms of one month to four
years. The Company is obligated to provide music updates throughout
the contract terms for weekly music service contracts. Sales of music
libraries, jingles, and specialized computer equipment and software
and the payments under production library and weekly music service
contracts will provide, in the opinion of management, adequate
liquidity to meet operating requirements at least through the end of
fiscal 1997. During the quarter ended March 31, 1997, the Company had
positive cash flows from operations for the three month period.
During the quarter ended March 31, 1997, approximately $66,000 was
spent for the purchase of property and equipment and for product
development costs for software development, new music libraries, and
music library updates. Funds for operating needs, new product
development, and capital expenditures for the period were provided
from cash reserves. The Company's expenditures for property,
equipment, and development of new products are discretionary. Product
development expenditures are expected to be approximately $100,000 in
fiscal 1997. Management anticipates that cash flow from operations,
cash reserves, and funds available under the Company's line of credit
will be sufficient to meet these capital requirements at least through
the end of fiscal year 1997.
In May 1996 the Company entered into a lease agreement for the
financing of an upgrade of its computer hardware and software systems.
The Company is required to repay the amount financed, totaling
$550,000 in equal monthly payments of principal and interest during
the term of the lease. Monthly payments on the lease are
approximately $16,000. The term of the lease is three years and the
lease is backed by a letter of credit in the amount of $200,000. The
letter of credit reduces the availability under the Company's
revolving Line of Credit from $300,000 to $100,000. Management
anticipates that cash flow from operations and cash reserves will be
sufficient to meet these capital requirements. The Company has no
other significant commitments for capital expenditures in fiscal 1997.
The Company's revolving Line of Credit with a bank provides a negative
pledge on all accounts receivable, contract rights, and inventory of
the Company. Borrowings under the Line of Credit bear a fluctuating
interest rate of prime plus 1.5%, payable monthly. The Line of
Credit, which bears an annual commitment fee of 0.5% of the unused
amounts, is renewable annually, subject to the consent of both
parties. The Line of Credit was renewed through February 28, 1998.
No borrowings were drawn under the Line of Credit during the quarter.
On December 19, 1996, the Board of Directors by resolution authorized
the Company to purchase up to 50,000 shares of its common stock, and
on January 27, 1997, authorized the Company to purchase an additional
25,000 shares of its common stock on the open market or through
privately negotiated transactions, from time to time, dependent upon
market conditions, through December 31, 1997. As of March 31, 1997,
the Company has made purchases totaling 54,000 shares. During the
quarter ended March 31, 1997, the Company purchased 44,200 shares at
an average price of $.78 per share. These purchases were funded by
cash reserves of the Company. Future purchases are expected to be
funded by cash reserves of the Company.
<PAGE>
RESULTS OF CONTINUING OPERATIONS
Comparison of the Three-Month Periods Ended March 31, 1996 and 1997
Revenues increased approximately 5% or $80,000 in the three-month
period ended March 31, 1997 as compared to the same period for the
previous year. The increase was due primarily to increases in revenue
for a weekly comedy service of approximately $110,000, increases in
sales of compact disc music libraries of approximately $80,000, offset
by decreases in production library revenue of approximately $50,000
and decreases in specialized computer equipment and software sales of
approximately $60,000.
The increase in revenue from weekly comedy services is due primarily
to barter arrangements whereby revenues are derived from obtaining
commercial airtime from radio stations in exchange for such weekly
services and marketing such airtime to advertisers. The Company has
begun to market other products using similar barter arrangements.
Revenues from such barter arrangements are expected to continue to
increase in the future.
The increase in compact disc music revenues libraries was due to
revenues from a new music format targeted to non-broadcast customers.
As the compact disc music library market matures, sales of compact
discs are generated primarily from changes in music formats or sales
of new music libraries or formats rather than from conversions to
compact disc music delivery technology. Management believes that the
decline in compact disc music library revenues may continue as the
compact disc music library market has reached a substantial level of
maturity in the United States, which is the market from which the
Company derives most of its music library revenues. A decline in
revenues from music library sales may result in a proportionately
greater decline in operating income because music libraries provide
higher margins than the Company's other products. In the third
quarter of fiscal 1997, the Company will begin providing equipment
manufacturers with pre-recorded music for their hard drive systems.
Renewals and new sales growth are subject to customer acceptance of
the new products
The decrease in production library revenue resulted primarily from the
expiration of three-year contracts entered into by the Company with
customers in prior years and the absence of the development of new
libraries in prior years. Although production library revenues from
existing libraries may continue to decline as additional three-year
contracts expire, management believes that production libraries will
continue to generate a significant portion of overall revenues from
sales of existing products through barter arrangements and sales of
new products. During the quarter, the Company introduced a new
production library and in the third quarter of fiscal 1997. Sales and
new sales growth are subject to customer acceptance of the new
products.
Production, programming and technical costs decreased approximately
$15,000 and as a percentage of revenue decreased from 43% to 40%. The
decrease was due primarily to the capitalization of the cost of custom
jingles orders of $30,000 which will be amortized over the life of the
jingle in syndication, offset by an increase in royalties based on
profitability of the weekly comedy service.
<PAGE>
Selling and commission costs increased $108,000 and as a percentage of
revenues increased to 31% from 27% of revenue due primarily to higher
selling costs for products sold under barter arrangements and
increases in sales commissions due to changes in sales force and
commission plans.
General and administrative costs decreased $38,000 due to costs
recorded in the prior year for the settlement of approximately $60,000
with a long distance service carrier for long distance calls
fraudulently charged to the Company's toll free telephone numbers.
The decrease was offset by an increase in occupancy costs related to
the lease of the Company's headquarters of $12,000.
Depreciation increased approximately $43,000 due primarily to
depreciation expense for computer hardware and software acquired under
capital leases.
During the quarter ended March 31, 1997, the Company recorded a charge
against operations of approximately $148,000 to reduce the carrying
value of its equipment inventory and related assets to their net
realizable value.
Comparison of the Six-Month Periods Ended March 31, 1996 and 1997
Revenues declined approximately $28,000 in the six-month period ended
March 31, 1997 as compared to the same period for the previous year.
The decline was due primarily to a decline in music scheduling
software sales of approximately $153,000 and a decline in production
library sales of $120,000 related to expired three-year contracts and
a decline in sales of specialized computer equipment of $92,000.
These declines were offset by increases in sales of compact disc music
libraries of approximately $160,000 and increases of approximately
$190,000 for a weekly comedy service.
The decline in software sales was due to the termination of the
Company's agreement with it's supplier of computer software in January
1996. The Company is currently marketing a music scheduling software
produced by another supplier. The Company expects that it will be
able to build its customer base for its software used in programming
music sequences and for automated music playback systems over the next
five years.
The increase in revenue from weekly comedy services is due primarily
to barter arrangements whereby revenues are derived from obtaining
commercial airtime from radio stations in exchange for such weekly
services and marketing such airtime to advertisers. The Company has
begun to market other products using similar barter arrangements.
Revenues from such barter arrangements are expected to continue to
increase in the future.
Selling and commission costs as a percentage of revenue increased
approximately $183,000 and as a percentage of revenues increased to
31% from 26% of revenue due primarily to higher selling costs for
products sold under barter arrangements and increases in commissions
due to changes in sales force and commission plans.
<PAGE>
General and administrative costs increased approximately $69,000 due
primarily to an increase in provisions for state and local taxes and
related expenses of $40,000, an increase in occupancy costs related to
the lease of Company's headquarters of $30,000 and increases in
personnel costs of $75,000. The increases were offset by the prior
year settlement of approximately $60,000 with a long distance service
carrier for long distance calls fraudulently charged to the Company's
toll free telephone numbers.
Production, programming and technical costs decreased approximately
$55,000 and as a percentage of revenue decreased from 44% to 42%.
Refer to discussion above regarding the three-month period.
Depreciation increased approximately $82,000 due primarily to
depreciation expense for computer hardware and software acquired under
capital leases.
During the quarter ended March 31, 1997, the Company recorded a charge
against operations of approximately $148,000 to reduce the carrying
value of its equipment inventory and related assets to their net
realizable value.
<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal proceedings - Not applicable.
Item 2. Changes in securities - Not applicable.
Item 3. Defaults upon senior securities - Not applicable.
Item 4. Submission of matters to a vote of security holders
The holders of approximately 68% of the outstanding common stock of
the Company, by written consent executed as of February 28, 1997 in
accordance with Delaware law, (i) re-elected each of the four
directors of the Company, Neil W. Sargent, Marjorie L. McIntyre, A.
Ann Armstrong and Donald E. Latin, and (ii) approved the appointment
of Deloitte & Touche as the Company's independent public accountants
for the fiscal year ending September 30, 1997. The Company did not
solicit proxies or consents in connection therewith.
Item 5. Other information - Not applicable.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Material Contracts:
10.1. WMCA Line of Credit Extension Letter Agreement by and between
Merrill Lynch Business Financial Services Inc. and TM Century, Inc.
dated March 3, 1997.
10.2. Request To Amend A Letter of Credit by and between The Northern
Trust Company and TM Century, Inc. dated February 26, 1997.
27.1 Financial Data Schedule
(b) Reports on Form 8-K
No reports on Form 8-K were filed by the Company during the three
month period ending March 31, 1997.
<PAGE>
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the
registrant caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Dated: May 15, 1997
TM CENTURY, INC.
BY:/s/Janette L. Williams
Janette L. Williams
Chief Accounting Officer
(Principal Accounting Officer)
BY:/s/Neil W. Sargent
Neil W. Sargent
Chief Executive Officer
(Principal Executive Officer)
Merrill Lynch
TM Century Inc.
2002 Academy
Dallas, TX 75234-9220
Attention: Mrs. Jeanette Williams
Merrill Lynch
Business Financial Services Inc.
33 West Monroe Street
22rid Floor
Chicago, Illinois 60603
312 269 4447
FAX 312 845 9093
Joseph E. Powaga Credit Analyst
March 3, 1997
Re: WORKING CAPITAL MANAGEMENT ACCOUNT ("WCMA") No. 586-07R66
Gentlemen:
It is our pleasure to inform you that we have approved
an extension of your WCMA Line of Credit.
As extended, the new Maturity Date for your WCMA Line of
Credit will be February 28, 1998, with all other terms and
conditions of our agreements remaining unchanged.
In connection with this extension, a $1,500.00 fee will be
charged to your WCMA Account.
With so many institutions offering financial services today,
we realize that you have a choice and we thank you for choosing
Merrill Lynch. You are a very important client to us and we hope
that the WCMA Line of Credit has provided better control of your
working capital and helped enhance your company's bottom line.
In addition to the WCMA Line of Credit, Merrill Lynch offers a
broad range of products and services to our business clients including:
Term Financing: Equipment Purchases, Fixed Asset Acquisitions and
ESOP Financing;
Business Advisory Services: Business Valuations, Private Placements,
ESOP Advisory, Acquisition Advisory and Sale of Business;
Business Investment Services: Strategies for Short-term and
Intermediate-term investments; and
Business Financial Planner: Comprehensive business profile for future
management and financial strategy.
Again, we are pleased to provide you with an extension of your WCMA
Line of Credit and would enjoy discussing additional basins services
with you in greater detail. If you have any questions, please contact
Ron Abigail at (214) 750-2102 or the undersigned who is your account
representative in Chicago at (312) 2694447.
Sincerely,
Joseph Powaga
Credit Analyst
nr
cc Hank O'Neil - MLPF&S - Dallas, TX
Ron Abigail - MLBFS - Dallas, TX
REQUEST TO AMEND A LETTER OF CREDIT
To: The Northern Trust Company
Letters of Credit, L-4
P.O. Box 92921
Date: 02/26/97
Please amend the following letter of credit substantially
in accordance with this request and transmit it by the method
indicated below (by check "x").
X Other Federal Express
Your Letter of Credit No: 3264513 Dated 05/2/96
Extend L/C Expiry Date to 02/28/98
Increase amount by:
Other Changes:
All other terms and conditions remain unchanged.
TM Century, Inc.
Neil W. Sargent
Janette Williams
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE BALANCE
SHEETS AND STATEMENTS OF OPERATIONS FOUND ON PAGES 2 THROUGH 5 OF THE COMPANY'S
FORM 10-QSB FOR THE QUARTER ENDED MARCH 31, 1997
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-END> MAR-31-1997
<CASH> 229723
<SECURITIES> 0
<RECEIVABLES> 1087494
<ALLOWANCES> 185000
<INVENTORY> 909417
<CURRENT-ASSETS> 2324774
<PP&E> 2419442
<DEPRECIATION> 1404373
<TOTAL-ASSETS> 3592302
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0
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