FORM 10-QSB
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
(X) QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1997
( ) TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from to
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Commission File No. 0-13499
WORLD SERVICES, INC.
404 South Lincoln, P.0. Box 786
Aberdeen, South Dakota 57402
Telephone: (605) 225-4131
Colorado 46-0355586
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Indicate by check mark whether the Issues (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the past 12 months (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
As of June 30, 1997, Registrant had 5,229,907 shares of its $.01 par value
common stock outstanding.
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WORLD SERVICES, INC.
TABLE OF CONTENTS
Page
ACCOUNTANTS' REPORT ............................................. 1
FINANCIAL STATEMENTS:
Balance Sheets ................................................ 2
Statements of Income and Accumulated Deficit .................. 3
Statements of Cash Flows ...................................... 4
Notes to Financial Statements ................................. 5
Management's Discussion and Analysis .......................... 6
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MEIDINGER & ASSOCIATES
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Certified Public Accountants 311 South 2nd Street
Aberdeen, SD 57401
(805) 220-4404
August 4, 1997
The Board of Directors
World Services, Inc.
Aberdeen, South Dakota 57401
We have compiled the accompanying Balance Sheets of World Services Inc. as of
June 30, 1997, and June 30, 1996, and the related Statements of Income and
Accumulated Deficit and Statements of Cash Flows for the six months ended June
30, 1997, and June 30, 1996, in accordance with Statements on Standards for
Accounting and Review Services issued by the American Institute of Certified
Public Accountants.
Accompilation is limited to presenting in the form of financial statements,
information that is the representation of management. We have not audited or
reviewed the accompanying financial statements and , accordingly, do not express
an opinion or any other form of assurance on them.
The corporation previously recorded the First Savings & Loan Association, Inc.
(FSL) investment, for interim reporting purposes, only the audited value at year
end. The investment in FSL is now accounted for under the equity method of
accounting. Accordingly, the accompanying financial statements have been
restated.
/s/ Meidinger & Associates
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Meidinger & Associates
Certified Public Accountants
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WORLD SERVICES, INC.
BALANCE SHEETS
June 30, 1997 and 1996
ASSETS
1997 1996
CURRENT ASSETS ---------------- ----------------
Cash $ 55,072.27 $ 16,993.27
Certificates of Deposit 490,000.00 240,000.00
Interest Receivable 15,166.40 0.00
---------------- -------------
TOTAL CURRENT ASSETS 560,238.67 256,993.27
---------------- -------------
PROPERTY & EQUIPMENT
Office Equipment 2,882.14 2,882.14
Accumulated Depreciation (2,882.14) 0.00
---------------- -------------
TOTAL PROPERTY & EQUIPMENT 0.00 2,882.14
---------------- -------------
INVESTMENTS & OTHER ASSETS
Investment - Super 8 Developers 568,000.00 568,000.00
Investment - First Savings & Loan 372,000.00 307,000.00
Other 4,000.00 4,000.00
---------------- -------------
TOTAL INVESTMENTS & OTHER ASSETS 944,000.00 879,000.00
---------------- -------------
TOTAL ASSETS $ 1,504,238.67 $ 1,138,875.41
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LIABILITIES & STOCKHOLDERS EQUITY
CURRENT LIABILITIES
Accounts Payable $ 7,639.70 $ 3,186.44
---------------- -------------
TOTAL CURRENT LIABILITIES 7,639.70 3,186.44
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STOCKHOLDERS'EQUITY
Common Stock, par value $.001/share
50,000,000 shares authorized
5,359,000 shares issued 5,359.00 5,359.00
Additional Paid-in-Capital 6,544,641.00 6,544,641.00
Treasury Stock at Cost,
129,000 shares (3,000.00) (3,000.00)
Accumulated Deficit (5,050,401.03) (5,411,311.03)
---------------- -------------
TOTAL STOCKHOLDERS' EQUITY 1,496,598.97 1,135,688.97
---------------- -------------
TOTAL LIABILITIES &
STOCKHOLDERS' EQUITY $ 1,504,238.67 $ 1,138,875.41
================ ================
See accompanying notes and accountants' report
2
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WORLD SERVICES, INC.
STATEMENTS OF INCOME AND ACCUMULATED DEFICIT
For the Six Months Ended June 30, 1997 and 1996
1997 1996
---------------- ----------------
REVENUE
Dividend Income $ 239,085.60 $ 79,700.95
Interest Income 24,857.51 13,153.13
Stock Transfer Fees 39.75 231.99
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TOTAL REVENUE 263,982.86 93,086.07
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EXPENSES
Accounting Fees 8,615.80 10,197.80
Contract Wages & Consulting 2,640.00 4,814.94
Faxes 139.50 0.00
Interest 0.00 49.76
Legal Fees 27,463.20 11,014.83
Donations 0.00 100.00
Director Fees 3,150.00 2,700.00
Dues, Fees, Subscriptions 0.00 58.00
Office Supplies 119.35 264.30
Printing 982.35 452.91
Postage 411.50 336.67
Rent 1,820.00 260.00
Repairs & Maintenance 0.00 580.30
Supplies 201.73 4,171.46
Telephone 44.12 68.71
Travel 447.80 327.42
---------------- -------------
TOTAL EXPENSES 46,035.35 35,397.10
---------------- -------------
INCOME BEFORE EQUITY IN EARNINGS
OF AFFILIATED COMPANIES 217,947.51 57,688.97
EQUITY IN EARNINGS OF AFFILIATED
COMPANIES 37,000.00 0.00
---------------- -------------
INCOME BEFORE INCOME TAXES 254,947.51 57,688.97
INCOME TAXES (NOL CARRYOVER) 0.00 0.00
---------------- -------------
NET INCOME 254,947.51 57,688.97
BEGINNING ACCUMULATED DEFICIT (5,305,348.54) (5,469,000.00)
---------------- -------------
ENDING ACCUMULATED DEFICIT $ (5,050,401.03) $ (5,411,311.03)
---------------- -------------
See accompanying notes and accountants' report.
3
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<TABLE>
<CAPTION>
WORLD SERVICES, INC.
STATEMENTS OF CASH FLOWS
For the Six Months Ended June 30, 1997 and 1996
1997 1996
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CASH FLOW FROM OPERATING ACTIVITIES
<S> <C> <C>
Net Income $ 254,974.51 $ 57,688.97
Adjustments to reconcile net income to net
cash provided by operating activities
Equity in Earning of Affiliates (37,000.00) 0.00
(Increase) Decrease in:
Other Assets 1,832.50 0.00
Increase (Decrease) in:
Accounts Payable 7,639.70 (6,838.83)
-------------- -------------
NET CASH PROVIDED BY OPERATING
ACTIVITIES 227,419.71 50,850.14
-------------- -------------
CASH FLOW FROM INVESTING ACTIVITIES
Purchase of Fixed Assets (2,882.14)
Purchase of Certificates of Deposit (200,000.00) (40,00.00)
-------------- -------------
NET CASH (USED) BY INVESTING ACTIVITIES (200,000.00) (42,882.14)
-------------- -------------
NET INCREASE IN CASH 27,419.71 7,968.00
CASH AT BEGINNING OF PERIOD 27,652.56 9,025.27
-------------- -------------
CASH AT END OF PERIOD $ 55,072.27 $ 16,993.27
============== =============
SUPPLEMENTAL DISCLOSURES
Cash Payments For:
Income Taxes $ 0.00 $ 0.00
============== =============
Interest paid $ 0.00 $ 0.00
============== =============
See accompanying notes and accountants' report
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</TABLE>
<PAGE>
WORLD SERVICES, INC.
NOTES TO FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 1997 AND 1996
In the opinion of management of World Services, Inc., (the Company), the
accompanying unaudited financial statements reflect all adjustments (consisting
of only normal recurring accruals) necessary to present fairly the financial
position of the company as of June 30, 1997 and 1996, and the results of
operations and changes in financial position for the six months ended June 30,
1997 and 1996.
These unaudited financial statements should be read in conjunction with the
Company's annual report on Form 10-KSB for the year ended December 31, 1996
NOTE 1 - NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES
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A summary of significant accounting policies is currently on file with the
Securities and Exchange Commission on Form 10-KSB.
NOTE 2 - INCOME TAXES
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As of December 31, 1996, the Company had net operating loss carryforwards for
income tax purposes totaling approximately $3,100,000 which expire in the years
1997 to 2011. The net operating loss carryforwards may be limited with respect
to their availability due to prior ownership changes and the consolidated return
regulations. In addition, there are investment tax credit carryforwards of
$28,000.
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WORLD SERVICES, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
FINANCIAL CONDITION
- -------------------
As expected, the Corporation received dividend income from Super 8 Motel
Developers in the second quarter of over $239,000. This is the major
contributing factor in the improvement of the Company's overall financial
condition.
The Company's equity has also improved by $65,000 from a year ago because of an
increase in their equity interest in First Savings & Loan.
RESULTS OF OPERATIONS
- ---------------------
The Company showed operating profits of $217,948 for the six months ended June
30, 1997 as compared to $57,689 for the same period a year earlier.
This improvement was mainly due to the increased dividend paid by Super 8 Motel
Developers.
The Company has scheduled a stockholders' meeting for August 18, 1997.
Shareholders have been notified and have been sent a proposed agenda listing
numerous important items to be discussed and decisions to be made.
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PART II - OTHER INFORMATION
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World Services, Inc.
Items 1-5 Not Applicable.
Item 6 Exhibits and Reports on Form 8-K
--------------------------------
a) Exhibits - none.
b) No Reports on Form 8-K were filed during the quarter ending
June 30, 1997.
Item 7 Not Applicable.
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.
WORLD SERVICES, INC.
By: /s/ Ronne Tarrell
----------------------------------
Ronne Tarrell
Principal Executive Officer
Principal Financial Officer
Principal Accounting Officer
Chief Financial Officer
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the June 30,
1997 financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<CASH> 545,072
<SECURITIES> 0
<RECEIVABLES> 15,166
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 560,238
<PP&E> 2,882
<DEPRECIATION> (2,882)
<TOTAL-ASSETS> 1,504,238
<CURRENT-LIABILITIES> 7,640
<BONDS> 0
0
0
<COMMON> 5,359
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 1,504,238
<SALES> 0
<TOTAL-REVENUES> 263,983
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 46,035
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 254,948
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 254,948
<EPS-PRIMARY> .049
<EPS-DILUTED> .049
</TABLE>
