Attached files
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EX-32.1 - EX-32.1 - TWENTY SERVICES INC | d542711dex321.htm |
EX-31.2 - EX-31.2 - TWENTY SERVICES INC | d542711dex312.htm |
EX-32.2 - EX-32.2 - TWENTY SERVICES INC | d542711dex322.htm |
EX-31.1 - EX-31.1 - TWENTY SERVICES INC | d542711dex311.htm |
EXCEL - IDEA: XBRL DOCUMENT - TWENTY SERVICES INC | Financial_Report.xls |
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Six Months Ended June 30, 2013
Commission File No. 0-8488
TWENTY SERVICES, INC.
(Exact name of Registrant as specified in its Charter)
ALABAMA | 63-0372577 | |
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer ID No.) | |
20 Cropwell Drive, Suite 100 | Pell City, Alabama 35128 | |
(Address or principal executive offices) | (City, State, Zip) |
Registrants telephone number, including area code 205-884-7932
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 ninety (90) days. YES x NO ¨
Indicate by check mark whether the Registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the ]preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of accelerated filer and large accelerated filer in Rule 12b-2 of the Exchange Act.
Large accelerated filer | ¨ | Accelerated filer | ¨ | |||
Non-accelerated filer | ¨ (Do not check if a smaller reporting company) | Smaller reporting company | x |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act)
YES ¨ NO x
Indicate the number of shares outstanding of each of the issuers classes of Common Stock, as of the period of this report.
Par Value $0.10 per share 1,081,327 shares
As of June 30, 2013, the Registrant had 1,283,068 issued and 1,081,327 outstanding shares of common stock, par value of $0.10 per share, and as of June 30, 2013, the aggregate market value of the voting stock of the Registrant held by non-affiliates of the Registrant, based upon the book value of such shares as of such date, was approximately $4,565,631. Documents incorporated by reference: NONE
* | Includes 7% Cumulative Series A-1980 Preferred Stock, 7% Cumulative Series A-1981 Preferred Stock, 7% Cumulative Series A-1982 Preferred Stock, and 7% Cumulative Series A-1985 Preferred Stock. |
TWENTY SERVICES, INC.
BALANCE SHEETS
June 30, 2013 |
December 31, 2012 |
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ASSETS | ||||||||
Cash and cash equivalents |
$ | 93,618 | $ | 90,221 | ||||
Marketable securities |
5,111,666 | 4,440,300 | ||||||
Other assets |
22,553 | 22,553 | ||||||
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Total assets |
$ | 5,227,837 | $ | 4,553,074 | ||||
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LIABILITIES AND STOCKHOLDERS EQUITY | ||||||||
Liabilities: |
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Accounts payable and accrued expenses |
$ | 39,855 | $ | 48,648 | ||||
Deferred tax liability |
589,894 | 375,138 | ||||||
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Total liabilities |
629,749 | 423,786 | ||||||
Stockholders equity: |
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Preferred stock, Cumulative $0.10 par value, 7% cumulative 2,500,000 shares authorized, 505,110 shares issued |
50,511 | 50,511 | ||||||
Common stock, $0.10 par value, 25,000,000 shares authorized, 1,283,068 shares issued |
128,307 | 128,307 | ||||||
Additional paid-in capital |
1,716,074 | 1,716,074 | ||||||
Retained earnings |
1,067,824 | 1,126,837 | ||||||
Accumulated other comprehensive income |
2,025,650 | 1,497,626 | ||||||
Less investment in Twenty Services Holding |
(60,000 | ) | (60,000 | ) | ||||
Common treasury stock 201,741 in 2013 and 2012 respectively |
(312,224 | ) | (312,224 | ) | ||||
Preferred Treasury, 71,788 in 2013 and 70,941 in 2012 respectively |
(18,055 | ) | (17,843 | ) | ||||
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Net stockholders equity |
4,598,088 | 4,129,288 | ||||||
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Total liabilities and stockholders equity |
$ | 5,227,837 | $ | 4,553,074 | ||||
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TWENTY SERVICES, INC.
STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
Three months ended | Six months ended | |||||||||||||||
June 30, 2013 | June 30, 2012 | June 30, 2013 | June 30, 2012 | |||||||||||||
Revenue |
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Interest |
$ | 7,543 | $ | 8,320 | $ | 33,959 | $ | 35,800 | ||||||||
Dividends |
2,892 | 3,242 | 5,852 | 5,216 | ||||||||||||
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Total revenue |
10,435 | 11,562 | 39,811 | 41,016 | ||||||||||||
Operating Expenses |
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General and administrative |
22,925 | 31,556 | 83,905 | 74,428 | ||||||||||||
Operating loss |
(12,490 | ) | (19,994 | ) | (44,094 | ) | (33,412 | ) | ||||||||
Other Income |
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Gain on sale of marketable securities |
11,865 | 528 | 11,865 | 528 | ||||||||||||
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Net Loss |
(625 | ) | (19,466 | ) | (32,229 | ) | (32,884 | ) | ||||||||
Other Comprehensive Income (net of tax) |
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Unrealized gain (loss) on marketable securities |
129,241 | (393,816 | ) | 754,645 | 196,603 | |||||||||||
Less: reclassification for net gains included in net income |
(11,865 | ) | (528 | ) | (11,865 | ) | (528 | ) | ||||||||
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Other comprehensive income |
117,376 | (394,344 | ) | 742,780 | 196,075 | |||||||||||
Income tax related to other comprehensive income |
(34,783 | ) | 29,283 | (214,756 | ) | (56,890 | ) | |||||||||
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Other comprehensive income (loss), after tax |
82,593 | (365,061 | ) | 528,024 | 139,185 | |||||||||||
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Comprehensive Income (Loss) |
$ | 81,968 | $ | (384,527 | ) | $ | 495,795 | $ | 106,301 | |||||||
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Weighted average number of shares outstanding |
1,081,327 | 1,082,920 | 1,081,327 | 1,083,066 | ||||||||||||
Loss Per Common * |
$ | (0.00 | ) | $ | (0.02 | ) | $ | (0.06 | ) | $ | (0.06 | ) |
* | After giving effect on a pro-rata basis to preferred dividends of $0.07 per share per annum on 433,322 shares outstanding. |
3
TWENTY SERVICES, INC.
CONDENSED STATEMENT OF CASH FLOWS
Three Months Ended June 30, |
Six Months Ended June 30, |
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2013 | 2012 | 2013 | 2012 | |||||||||||||
Cash flows from operating activities: |
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Interest and dividends received |
$ | 10,434 | $ | 11,561 | $ | 39,811 | $ | 41,016 | ||||||||
Cash paid to employees and suppliers |
(27,020 | ) | (35,951 | ) | (87,353 | ) | (79,019 | ) | ||||||||
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Net cash used by operating activities |
(16,586 | ) | (24,390 | ) | (47,542 | ) | (38,003 | ) | ||||||||
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Cash flows from financing and investing activities: |
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Net sale of securities |
75.806 | 26,561 | 75,806 | 26,561 | ||||||||||||
Dividends paid on Preferred Stock |
(24,655 | ) | (20,015 | ) | (24,655 | ) | (20,015 | ) | ||||||||
Purchase of Preferred Stock for Treasury |
(136 | ) | (605 | ) | (212 | ) | (1,423 | ) | ||||||||
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Net cash provided by investing activities |
51,015 | 5,941 | 50,939 | 5,123 | ||||||||||||
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Net increase (decrease) in cash |
34,429 | (18,449 | ) | 3,397 | (32,880 | ) | ||||||||||
Cash and temporary investments, beginning of period |
59,189 | 90,241 | 90,221 | 104,672 | ||||||||||||
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Cash and temporary investments, end of period |
$ | 93,618 | $ | 71,792 | $ | 93,618 | $ | 71,792 | ||||||||
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4
MANAGEMENTS DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
RESULTS OF OPERATIONS
The Registrant reported a loss of $625 for the three months ended June 30, 2013, as compared to a loss of $19,466 for the corresponding 2012 period. The Registrant reported a loss of $32,229 for the six months ended June 30, 2013 as compared to a loss of $32,884 for the corresponding 2012 period.
REVENUES
Revenues for the three months ended June 30, 2013 of $10,435 were comparable to $11,562 for the corresponding 2012 period. Revenues for the six months ended June 30, 2013 of $39,811 were comparable to $41,016 for the corresponding 2012 period.
EXPENSES
General and administrative expenses decreased from $31,556 in 2012 to $22,925 for the corresponding three months period ended June 30, 2013. General and administrative expenses increased to $83,905 for the six months ended June 30, 2013 from $74,428 for the corresponding 2012 period. The above financial statements include all the adjustments, which in the opinion of Management, are necessary for a fair presentation of such financial information in conformity with generally accepted accounting principles. All adjustments are of a normal recurring nature.
The Company anticipates that its investing activities will generate net cash flows and that its operating and financing activities will continue to use cash flows.
COMPREHENSIVE INCOME
Comprehensive income totaled $81,968 for the second quarter of 2013 as compared to a loss of $384,527 in 2012. For the six months ended June 30, 2013 comprehensive income totaled $495,795 versus comprehensive income of $106,301 for the comparable period ended June 30, 2012.
FAIR VALUE MEASUREMENTS
Accounting Principles emphasize that fair value is a market-based measurement, not an entity-specific measurement. Therefore, a fair value measurement should be determined based on the assumptions that market participants would use in pricing an asset or liability. As a basis for considering market participant assumptions in fair value measurements, Accounting Principles establish a fair value hierarchy that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity (observable inputs that are classified within Levels 1 and 2 of the hierarchy) and the reporting entitys own assumptions about market participant assumptions (unobservable inputs classified within Level 3 of the hierarchy).
Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access. Level 2 inputs are inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs may include quoted prices for similar assets and liabilities in active markets, as well as inputs that are observable for the asset or liability (other than quoted prices), such as interest rates, foreign exchange rates, and yield curves that are observable at commonly quoted intervals. Level 3 inputs are unobservable inputs for the asset or liability, which are typically based on an entitys own assumptions, as there is little, if any, related market activity. In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. Twentys assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the asset or liability.
5
Fair Value Measurements at Reporting Date Using | ||||||||||||
Description |
Quoted Prices in
Active Markets for Identical Assets (Level l) 06/30/2012 |
Significant
Other Observable Inputs (Level 2) |
Significant Unobservable Inputs (Level 3) |
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Marketable securities |
$ | 3,862,415 | $ | 1,249,251 | $ | .00 | ||||||
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Total |
$ | 3,862,415 | $ | 1,249,251 | $ | .00 | ||||||
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FINANCIAL DISCLOSURE AND INTERNAL CONTROLS
Twenty Services, Inc. maintains internal controls over financial reporting, which generally include those controls relating to the preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the U.S. As a small public company, Twenty Services, Inc. is subject to the internal control reporting and attestation requirements under Section 13(a)-15 and 15(d)-15 of the Securities Exchange Act of 1934 (Exchange Act).
Twenty Services, Inc. has established processes to ensure appropriate disclosure controls and procedures are maintained. These controls and procedures as defined by the Securities and Exchange Commission (SEC) are generally designed to ensure that financial information required to be disclosed in reports filed with the SEC is reported within the time periods specified in the SECs rules and regulations, and that such information is communicated to management, including the Principal Executive Officer (PEO), who is also the Chief Financial Officer (CFO) as appropriate, to allow timely decisions regarding required disclosure.
Twenty Services, Inc.s senior management is involved in the day-to-day operations of the Company. Managements interaction and monitoring activities evaluate recent internal and external events to determine whether all appropriate disclosures have been made in reports filed with the SEC. The Forms 10-K and 10-Q are presented to the Board of Directors for approval. Financial results and other financial information are also reviewed with the Audit Committee annually.
As required by applicable regulatory pronouncements, the PEO reviews and make various certifications regarding the accuracy of Twenty Services, Inc.s periodic public reports filed with the SEC, as well as the effectiveness of disclosure controls and procedures and internal controls over financial reporting.
Twenty Services, Inc.s stock is not listed or traded and, therefore, not required to comply with corporate governance listing standards.
EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES:
In accordance with Rule 13a-15(b) of the Securities Exchange Act of 1934 (the Exchange Act), as of the end of the period covered by this Quarterly Report on Form 10-Q, the Companys management evaluated, with the participation of the Companys Principal Executive Officer (PEO), the effectiveness of the design and operation of the Companys disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act). Based on their evaluation of these disclosure controls and procedures, the Companys Principal Executive Officer (PEO) has concluded that the disclosure controls and procedures were effective in recording, processing, summarizing and reporting, on a timely basis, information required to be disclosed by the Company in the reports the Company files or submits under the Exchange Act.
6
MANAGEMENTS REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING.
The Management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in the Exchange Act Rule of 13a-15(f). The Companys internal control system is designed to provide reasonable assurance to the Company management and the board of directors regarding the preparation and fair presentation of published financial statements. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Also projections of any evaluation of effectiveness to future periods are subject to risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedure may deteriorate.
The Companys management assessed the effectiveness of the Companys internal control over financial reporting as of June 30, 2013 based upon criteria established in Internal Control Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on the assessment, management determined that we maintained effective internal control over financial reporting as of June 30, 2013 based on those criteria.
CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING
There were no changes in the Companys internal control over financial reporting that occurred during the quarter ended June 30, 2013 that have materially affected or are reasonable likely to materially affect, the Companys internal control over financial reporting.
The above financial statements include all the adjustments, which in the opinion of Management, are necessary for a fair presentation of such financial information in conformity with generally accepted accounting principles. All adjustments are of a normal recurring nature.
7
PART II
OTHER INFORMATION
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 Securities Holders |
NONE | |||
Item 5. Other Information: |
NONE |
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
Exhibits:
31.1 | SECTION 302 PEO/CFO CERTIFICATION | |
31.2 | SECTION 302 VP CERTIFICATION | |
32.1 | SECTION 906 PEO/CFO CERTIFICATION | |
32.2 | SECTION 906 VP CERTIFICATION | |
101.INS | XBRL Instance Document | |
101.SCH | XBRL Taxonomy Extension Schema | |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase | |
101.DEF | XBRL Taxonomy Extension Definition Linkbase | |
101.LAB | XBRL Taxonomy Extension Label Linkbase | |
101-PRE | XBRL Taxonomy Extension Presentation Linkbase |
8
TWENTY SERVICES, INC.
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: July 26, 2013 | /s/ David J. Noble | |||
David J. Noble | ||||
Chairman/Director Principal Executive Officer/Chief Financial Officer | ||||
Date: July 26, 2013 | /s/ Shirley B. Whitaker | |||
Shirley B. Whitaker | ||||
Vice President |
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