U.S. Securities and Exchange Commission
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the quarterly period ended March 31, 1996
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from to
Commission file number 0-2054
TSI, Inc.
(Exact name of small business issuer as specified in its charter)
Montana 81-0267738
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
128 Second Street South, Great Falls, Montana 59405
(Address of principal executive offices)
(406) 727-2600
(Issuer's telephone number)
Not Applicable
(Former name, former address and former fiscal year, if changed since last
report)
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
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Check whether the registrant filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution
of securities under a plan confirmed by a court. Yes No
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date:
Class Outstanding at March 31, 1996
$.05 Par Value Common Stock 9,423,142 Shares
Transitional Small Business Disclosure Format (Check One): Yes ; No X
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TSI, INC.
INDEX
MARCH 31, 1996
Page Number
PART I
Condensed Financial Statements:
Balance Sheet -
March 31, 1996 2
Statements of Income -
Three Months Ended March 31, 1996 and 1995 3
Statements of Cash Flows -
Three Months Ended March 31, 1996 and 1995 4
Notes to Financial Statements 5
Management's Discussion and Analysis of the
Statements of Income 6
PART II
Other Information 7
Signatures 8
1
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TSI, INC.
BALANCE SHEET
AS OF MARCH 31, 1996
ASSETS
Current Assets
Cash $ 7,556,430
Marketable Securities, at Fair Value 2,570,000
Receivables - Net 49,523
Total Current Assets 10,185,953
Other Assets
Noncurrent Investments, at Fair Value 7,287,088
Noncurrent Receivables 98,341
Other Assets 2,238
Property, Plant and Equipment, Net 1,080,376
TOTAL ASSETS $ 18,653,996
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts Payable and Accrued Liabilities $ 220,833
Income Taxes Payable 155,089
Deferred Income Taxes 336,400
Due to Parent Company 184,430
Total Current Liabilities 896,752
Provison For Estimated Title and Escrow Losses 1,110,067
Minority Interests 299,337
Excess of Fair Value of Net Assets Acquired Over Cost 71,240
Deferred Income Taxes 1,568,400
Stockholders' Equity
Common Stock - $.05 Par Value;(30,000,000
shares authorized; 9,423,142 shares issued) 471,157
Additional Paid-In Capital 8,082,957
Retained Earnings 3,405,875
Unrealized Gain on Investments 2,748,211
Total Stockholders' Equity 14,708,200
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 18,653,996
See Notes to Consolidated Financial Statements
2
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TSI, INC.
STATEMENTS OF INCOME
For The Three Months Ended
March 31,
1996 1995
Operating Revenues $ 804,356 $ 587,395
Operating Expenses
Salaries & Payroll Costs 183,657 174,616
Depreciation 19,624 26,406
Other Expenses 163,187 185,496
Total Expenses 366,468 386,518
437,888 200,877
Amorizatation of Deferred Credit 2,055 2,055
Minority Portion of (Income) (6,550) (3,300)
Income Tax Expense (155,000) (59,400)
Net Income $ 278,393 $ 140,232
Earnings Per Weighted Average Share
Outstanding: (9,423,142 Shares in 1996
and 1995) $ .03 $ .01
Dividends Per Share $ -- $ --
See Notes to Consolidated Financial Statements
3
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TSI, INC.
STATEMENTS OF CASH FLOWS
For The Three Months Ended
March 31,
1996 1995
CASH FLOWS FROM OPERATING ACTIVITIES
Net Cash Provided By Operating
Activities $ 314,200 $ 208,925
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds From Sales of Property,
Plant and Equipment 1,289 -
Cash Received on Principal of
Notes Receivable 530 561
Cash Purchases of Minority Interests - -
Capital Expenditures Paid in Cash - 1,339
Cash Used for Purchases of Marketable
Securities Available For Sale (66,904) (4,910)
Cash Received for Sales of Marketable
Securities Available For Sale 204,375 82,840
Net Cash Provided By Investing
Activities 139,290 79,830
CASH FLOWS FROM FINANCING ACTIVITIES
Cash Advanced From Parent Company 22,511 21,800
Net Cash Provided By Financing
Activities 22,511 21,800
NET INCREASE IN CASH 476,001 310,555
CASH - BEGINNING OF PERIOD 7,090,429 6,181,974
CASH - END OF PERIOD $ 7,566,430 $ 6,492,529
See Notes to Consolidated Financial Statements
4
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TSI, INC.
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1996
In the opinion of management, all adjustments necessary (consisting of only
normal recurring accruals) have been made to the unaudited financial
statements to present fairly the Company's financial position as of March 31,
1996 and the results of the Company's operations and cash flows for the three
months ended March 31, 1996 and 1995.
The results of operations for the three months ended March 31, 1996 and 1995
are not necessarily indicative of the results to be expected for the full
year.
The consolidated financial statements include the accounts of the Company,
its wholly owned subsidiaries and its majority owned subsidiaries. All
significant intercompany transactions and balances have been eliminated in
consolidation.
M Corp, Great Falls, Montana, owns approximately 91% of the Company's issued
and outstanding common stock.
The Company adopted the provisions of Statement of Financial Accounting
Standards No. 115, Accounting for Certain Investments in Debt and Equity
Securities (SFAS No. 115) effective January 1, 1994. The Company has
classified its investments, both current and noncurrent, in debt and equity
securities as Available-For-Sale, in accordance with the various
classifications of securities contained in SFAS No. 115.
In accordance with SFAS No. 115, the Company's portfolios, current and
noncurrent, of Available-For-Sale investments are carried at fair value in
the Company's balance sheet at March 31, 1996. The net unrealized holding
gains at March 31, 1996, net of the estimated income tax effects and minority
interests in the unrealized holding gains, is reported as a separate
component of stockholders' equity at March 31, 1996.
5
<PAGE>
TSI, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF THE STATEMENTS OF INCOME
MARCH 31, 1996
A summary of the period to period changes in items included in the statements
of income is shown below.
COMPARISON OF
Three Months
Ended
March 31,
1996 and 1995
Increases
(Decreases)
Revenues $ 216,961 36.9%
Operating Expenses $ (20,050) (5.2%)
Net Income $ 138,161 98.5%
Operating revenues increased $216,961, 36.9% in the first quarter of 1996 as
compared with the first quarter of 1995. During the first quarter of 1996,
the Company realized net gains on the disposition of available-for-sale
investments in the amount of $134,091 whereas a net loss on the disposition
of available-for-sale investments was incurred in the first quarter of 1995 in
the amount of $19,418. Revenues from the Company's title insurance operations
increased $57,991, 18.1%, in the first quarter of 1996 as compared with the
first quarter of 1995 due primarily to an increase in the real estate
economies within which the Company operates.
Depreciation expense decreased $6,782, 25.7%, in the first quarter of 1996
as compared with the first quarter of 1995 due in part to the sale of
properties during 1995 and in part to the full depreciation of equipment
during 1995.
Other expenses decreased $22,309, 12.0%, in the first quarter of 1996 as
compared with the first quarter of 1995 due in part to the sale of properties
during 1995 and in part to lower maintenance and repair expenses.
The provision for income tax expense increased $95,600, $160.9%, in the first
quarter of 1996 as compared with the first quarter of 1995 due primarily to
the increase in pre-tax income which was primarily the result of the net gains
realized on the disposition of available-for sale investments.
6
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TSI, INC.
PART II
OTHER INFORMATION
MARCH 31, 1996
ITEM 1 LEGAL PROCEEDINGS
None
ITEM 2 CHANGES IN SECURITIES
None
ITEM 3 DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4 SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
ITEM 5 OTHER INFORMATION
None
ITEM 6 EXHIBITS AND REPORTS ON FORM 8-K
None
7
<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
TSI, INC.
Registrant
Date: April 29, 1996 s/K. King
K. King
Assistant
Secretary-Treasurer
Date: April 29, 1996 s/Jerry K. Mohland
Jerry K. Mohland,
Accountant
8
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<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
unaudited financial statements contained in the Company's Form 10-QSB and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 7,566,430
<SECURITIES> 2,570,000
<RECEIVABLES> 49,523
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 10,185,953
<PP&E> 1,080,376
<DEPRECIATION> 0
<TOTAL-ASSETS> 18,653,996
<CURRENT-LIABILITIES> 896,752
<BONDS> 0
<COMMON> 471,157
0
0
<OTHER-SE> 14,237,043
<TOTAL-LIABILITY-AND-EQUITY> 18,653,996
<SALES> 0
<TOTAL-REVENUES> 804,356
<CGS> 0
<TOTAL-COSTS> 366,468
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 433,393
<INCOME-TAX> 155,000
<INCOME-CONTINUING> 278,393
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 278,393
<EPS-PRIMARY> .03
<EPS-DILUTED> .03
</TABLE>
