<PAGE> 1
Form 10-QSB
(Mark One)
/x/ Quarterly report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the quarterly period ended June 30, 1995 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 0-5634.
TLM CORPORATION
------------------------------------------------------
(Exact name of registrant as specified in its Charter)
NEVADA 87-0263297
------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
630 Fifth Avenue, Suite 3201, New York, New York, 10020
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(Address of Principal Executive Offices)
(Zip Code)
(212) 757-5600
--------------
(Registrant's telephone number, including area code)
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.
295,831 shares of Common Stock, par value $.01 per share, outstanding as of July
31, 1995.
Page 1 of 11 Pages
There are no Exhibits.
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TLM CORPORATION AND SUBSIDIARY
INDEX TO QUARTERLY REPORT ON FORM 10-QSB
June 30, 1995
PART I - FINANCIAL INFORMATION
<TABLE>
<CAPTION>
Page
ITEM 1. FINANCIAL STATEMENTS (UNAUDITED) Number
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<S> <C>
Consolidated Balance Sheet at June 30, 1995....................................... 3
Consolidated Statements of Operations for the Six and
Three Months ended June 30, 1995 and 1994................................. 4-5
Condensed Consolidated Statements of Cash Flows
for the Six Months ended June 30, 1995 and 1994........................... 6
Notes to Consolidated Financial Statements........................................ 7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS.................... ........ 8-9
PART II - OTHER INFORMATION................................................................ 10
ITEM 1. LEGAL PROCEEDINGS......................................................... 10
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.......................................... 10
SIGNATURES........................................................................ 11
</TABLE>
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TLM CORPORATION AND SUBSIDIARY
CONSOLIDATED BALANCE SHEET
June 30, 1995
(Unaudited)
<TABLE>
<S> <C>
ASSETS
Current Assets:
Cash $ 125,126
Other current assets 11,224
-----------
Total current assets 136,350
Building at cost, net of accumulated
depreciation of $30,397 648,609
Goodwill, net of accumulated
amortization of $706 15,141
-----------
Total assets $ 800,100
===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable and accrued expenses $ 19,003
-----------
Total current liabilities 19,003
-----------
Long-term note payable - related party,
net of unamortized discount of $58,570 481,430
Deferred tax effect of basis difference
arising on acquisition 22,121
Shareholders' Equity:
Preferred stock, $.01 par value; authorized
20,000,000 shares; no shares issued --
Common stock, $.01 par value; authorized
20,000,000 shares; outstanding 295,831 shares 2,958
Additional paid-in capital 1,536,095
Retained deficit (1,261,507)
-----------
Total shareholders' equity 277,546
-----------
Total liabilities and shareholders' equity $ 800,100
===========
</TABLE>
See accompanying notes to consolidated financial statements
3
<PAGE> 4
TLM CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Six months ended June 30,
-------------------------
1995 1994
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<S> <C> <C>
Income:
Rental income $64,500 8,937
Interest and dividends 4,429 2,743
Gain on sale of marketable securities 8,201 7,913
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77,130 19,593
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Expenses:
General and administrative expenses 28,823 11,690
Depreciation and amortization 13,896 3,360
Interest expense 22,853 3,032
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65,572 18,082
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Income before taxes 11,558 1,511
Income tax expense 2,862 --
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Net income $ 8,696 $ 1,511
======= =======
Income per share $ 0.03 $ --
======= =======
</TABLE>
See accompanying notes to consolidated financial statements
4
<PAGE> 5
TLM CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Three months ended June 30,
---------------------------
1995 1994
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<S> <C> <C>
Income:
Rental income $32,250 8,937
Interest and dividends 1,511 541
Gain on sale of marketable securities 2,659 7,913
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36,420 17,391
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Expenses:
General and administrative expenses 12,447 11,440
Depreciation and amortization 6,948 3,360
Interest expense 11,217 3,032
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30,612 17,832
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Income (loss) before taxes 5,808 (441)
Income tax expense 1,431 --
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Net income (loss) $ 4,377 $ (441)
======= ========
Income (loss) per share $ 0.01 $ --
======= ========
</TABLE>
See accompanying notes to consolidated financial statements
5
<PAGE> 6
TLM CORPORATION AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Six months ended June 30,
-------------------------
1995 1994
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<S> <C> <C>
NET CASH PROVIDED BY OPERATING ACTIVITIES $ 14,702 $ 47
CASH FLOWS PROVIDED BY (USED IN) INVESTING ACTIVITIES:
Purchase of marketable securities (1,114,736) (281,571)
Proceeds from sale of marketable securities 1,122,937 289,484
Investment in business, net -- (275,000)
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Net cash provided by (used in) investing activities 8,201 (267,087)
----------- ---------
CASH FLOWS USED IN FINANCING ACTIVITIES:
Repurchase of common stock (50,955) (10,430)
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Net cash used in financing activities (50,955) (10,430)
----------- ---------
Net decrease in cash and cash equivalents (28,052) (277,470)
Cash and cash equivalents, beginning of period 153,178 377,263
----------- ---------
Cash and cash equivalents, end of period $ 125,126 $ 99,793
=========== =========
Supplemental disclosure of cash flow information:
Income taxes paid, net $ 1,000 $ --
=========== ========
Interest paid $ 13,426 $ --
=========== ========
</TABLE>
See accompanying notes to consolidated financial statements
6
<PAGE> 7
TLM Corporation and Subsidiary
Notes to Consolidated Financial Statements
1. BASIS OF PRESENTATION
The consolidated financial statements include the accounts of TLM Corporation
(the "Company") and its subsidiary. All significant intercompany items and
transactions have been eliminated.
The consolidated financial statements have been prepared by the Company without
audit, in accordance with rules and regulations of the Securities and Exchange
Commission. In the opinion of management, the statements reflect all adjustments
consisting only of normal recurring adjustments necessary for a fair
presentation of the results for the interim periods. The results of operations
for any interim period are not necessarily indicative of the results for a full
year.
2. PER SHARE DATA
Income per common share is based on income for the period divided by the
weighted average number of common shares outstanding during the year, which was
approximately 322,000 and 329,000 for the six and three months ended June 30,
1995 and 345,000 and 350,000 for the six and three months ended June 30, 1994.
3. MARKETABLE EQUITY SECURITIES
Unrealized gains and losses on marketable securities are charged to operations.
Cost is determined on the weighted average cost method. Dividends and interest
are accrued as earned. Marketable debt securities are carried at amortized cost,
unless there is an impairment in value considered to be other than temporary, in
which case the securities are recorded at their estimated realizable value.
4. DEPRECIATION AND AMORTIZATION
Depreciation is being computed on the straight-line method over twenty-five
years, the estimated useful life of the Company's building. Amortization of
goodwill is computed on the straight line method over twenty-five years. Debt
discount is amortized under the effective interest method.
7
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS.
RESULTS OF OPERATIONS
The Company's main sources of revenue are income from the rental of the
Nashville, Tennessee office building and the investment of its liquid assets in
money market, government, equity, debt or other securities.
The Company's income, general and administrative expenses, depreciation
and amortization, and interest expense for the six and three months ended June
30, 1995 are not comparable to the six and three months ended June 30, 1994 due
to the acquisition of Eimar Realty Corporation ("Eimar") and the issuance of the
promissory note to effect such acquisition.
THREE MONTHS ENDED JUNE 30, 1995 COMPARED TO THREE MONTHS ENDED JUNE 30, 1994
During the three months ended June 30, 1995, income increased to approximately
$36,000, due to the acquisition of Eimar in May of 1994, which resulted in the
recognition of three months of rental income from Eimar's office building in
1995. This increase was partially offset by a decline in the gain of the sale of
marketable securities primarily due to the reduction in available cash. During
1995, general and administrative expenses are primarily composed of directors'
fees and other operating expenses. For 1994, general and administrative expenses
consisted primarily of operating expenses of the building, which are now borne
by the lessee of the building.
Net income for the three months ended June 30, 1995 was $4,377 as compared to a
loss of $441 for the three months ended June 30, 1994.
SIX MONTHS ENDED JUNE 30, 1995 COMPARED TO SIX MONTHS ENDED JUNE 30, 1994
During the six months ended June 30, 1995 income increased to approximately
$77,000 due to the acquisition of Eimar in May of 1994, which resulted in six
months of rental income from the Eimar's office building compared to
approximately two months of rental income for the same period in 1994. General
and administrative expenses increased by approximately $17,000 primarily
attributable to directors' fees and other operating expenses. The increase in
depreciation and amortization is due to the inclusion of six months of
depreciation and amortization of intangibles associated with the acquisition of
Eimar during May of 1994. Additionally, interest expense increased by
approximately $19,000 since the Company had little or no debt outstanding during
most of the six months ended June 30, 1994.
Net income for the six months ended June 30, 1995 was $8,696 as compared to
$1,511 for the six months ended June 30, 1994.
8
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (CONTINUED).
CASH FLOW
For the six and three months ended June 30, 1995, the Company's
principal sources of cash flow was the receipt of rental revenue and TLM's
investing activities. The principal use of cash flow during this period was the
Company's investing activities including the purchase of marketable equity
securities. For the comparable periods during 1994, the Company's principal
source and use of cash flow was its investing activities.
LIQUIDITY AND CAPITAL RESOURCES
The Company had approximately $125,000 of cash and cash equivalents at
June 30, 1995. The Company had net working capital of approximately $117,000 at
June 30, 1995.
On April 21, 1994, the Company's Board of Directors authorized the
repurchase by the Company of up to 50,000 shares of its Common Stock out of
funds legally available therefor in addition to previous authorizations. The
Company is authorized to make such purchases from time to time in the market or
in privately negotiated transactions when it is legally permissible to do so and
believed to be in the best interests of its shareholders. The Company
repurchased approximately 40,819 shares of its Common Stock during the six
months ended June 30, 1995.
[The remainder of this page was left blank intentionally.]
9
<PAGE> 10
PART II - OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
None.
Item 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits:
None.
(b) Reports on Form 8-K.
On April 5, 1995, the Company filed a Form 8-K to
report an event of March 29, 1995. The report included
an Item 4 discussion of the dismissal of KPMG Peat
Marwick LLP as TLM Corporation's principal accountant
responsible for the audit of the Company's financial
statements.
On April 17, 1995, the Company filed a Form 8-K/A to
report an event of March 29, 1995. The report included
an Item 4 discussion of the dismissal of KPMG Peat
Marwick LLP as TLM Corporation's principal accountant
responsible for the audit of the Company's financial
statements and the appointment of Arthur Andersen LLP
as its new principal accountant.
On April 21, 1995, the Company filed a form 8-K/A to
report an event of October 6, 1994. The report
included an Item 304 discussion of the dismissal of
Ernst & Young LLP as TLM Corporation's principal
accountant responsible for the audit of the Company's
financial statements.
On May 31, 1995, the Company filed a Form 8-K/A2 to
report an event on March 29, 1995. The report included
an Item 304 discussion of the resignation of KPMG Peat
Marwick a TLM Corporation's principal accountant
responsible for the audit of the Company's financial
statements and the appointment of Arthur Andersen LLP
as its new principal accountant.
10
<PAGE> 11
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities and
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
TLM CORPORATION
Dated: August 8, 1995 By /s/ Robert Price
----------------------
Robert Price
Director and President
(Principal Executive Officer)
Dated: August 8, 1995 By /s/ Kim I. Pressman
----------------------
Kim I. Pressman
Director and Chairman,
Vice President and Treasurer
(Principal Accounting and
Financial Officer)
11
<PAGE> 12
EXHIBIT INDEX
Exhibit No. Description Page No.
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EX-27 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> JUN-30-1995
<CASH> 125,126
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 136,350
<PP&E> 679,006
<DEPRECIATION> 30,397
<TOTAL-ASSETS> 800,100
<CURRENT-LIABILITIES> 19,003
<BONDS> 0
<COMMON> 2,958
0
0
<OTHER-SE> 274,588
<TOTAL-LIABILITY-AND-EQUITY> 800,100
<SALES> 0
<TOTAL-REVENUES> 77,130
<CGS> 0
<TOTAL-COSTS> 65,572
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 22,853
<INCOME-PRETAX> 11,558
<INCOME-TAX> 2,862
<INCOME-CONTINUING> 8,696
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 8,696
<EPS-PRIMARY> 0.03
<EPS-DILUTED> 0.03
</TABLE>
