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EX-31.2 - EX-31.2 - TWENTY SERVICES INCd587240dex312.htm
EX-31.1 - EX-31.1 - TWENTY SERVICES INCd587240dex311.htm
EX-32.1 - EX-32.1 - TWENTY SERVICES INCd587240dex321.htm
EX-32.2 - EX-32.2 - TWENTY SERVICES INCd587240dex322.htm

 

 

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 Nine Months Ended September 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)

Registrant’s 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)

Indicate the number of shares outstanding of each of the issuer’s classes of Common Stock, as of the period of this report.

Par Value $0.10 per share 1,080,945 shares

 

 

 


As of September 30, 2013 , the Registrant had 1,283,068 issued and 1,080,945 outstanding shares of common stock, par value of $0.10 per share, and as of September 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 $ 5,491,531. 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

 

     September 30, 
2013
    December 31,
2012
 
ASSETS     

Cash and cash equivalents

   $ 88,280      $ 90,221   

Marketable securities

     6,413,012        4,440,300   

Other assets

     22,552        22,553   
  

 

 

   

 

 

 

Total assets

   $ 6,523,844      $ 4,553,074   
  

 

 

   

 

 

 
LIABILITIES AND STOCKHOLDERS’ EQUITY     

Liabilities:

    

Accounts payable and accrued expenses

   $ 67,697      $ 48,648   

Deferred tax liability

     955,362        375,138   
  

 

 

   

 

 

 

Total Liabilities

     1,023,059        423,786   

Stockholders’ equity:

    

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

     1,035,762        1,126,837   

Accumulated other comprehensive income

     2,962,514        1,497,626   

Less investment in Twenty Services Holding

     (60,000     (60,000

Common treasury stock – 202,123 in 2013 and 201,741 in 2012, respectively

     (313,179     (312,224

Preferred Treasury - 76,384 in 2013 and 70,941 in 2012, respectively

     (19,204     (17,843
  

 

 

   

 

 

 

Net stockholders’ equity

     5,500,785        4,129,288   
  

 

 

   

 

 

 

Total liabilities and stockholders’ equity

   $ 6,523,844      $ 4,553,074   
  

 

 

   

 

 

 


TWENTY SERVICES, INC.

STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

 

     Three months ended     Nine months ended  
     September 30,
2013
    September 30,
2012
    September 30,
2013
    September 30,
2012
 

Revenue

        

Interest

   $ 25,917      $ 21,345      $ 59,876      $ 57,145   

Dividends

     2,405        9,344        8,256        14,559   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total revenue

     28,322        30,689        68,132        71,704   

Operating Expenses

        

General and administrative

     60,382        15,523        144,287        89,950   
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating income (loss)

     (32,060     15,166        (76,155     (18,247

Other Income (Loss)

        

Gain (loss) on sale of marketable securities

     00        00        11,865        528   
  

 

 

   

 

 

   

 

 

   

 

 

 

Loss Before Income Taxes

     (32,060     15,166        (64,290     (17,719
  

 

 

   

 

 

   

 

 

   

 

 

 

Net Income (Loss)

     (32,060     15,166        (64,290     (17,719
  

 

 

   

 

 

   

 

 

   

 

 

 

Other Comprehensive Income (net of tax)

        

Unrealized gain (loss) on marketable securities, net of tax

     1,419,707        (28,135     2,056,976        301,946   
  

 

 

   

 

 

   

 

 

   

 

 

 

Less: reclassification adj for net gains included in net income

     00        00        (11,865     (528
  

 

 

   

 

 

   

 

 

   

 

 

 

Other Comprehensive Income (Loss)

     1,419,707        (28,135     2,045,111        301,418   

Income tax related to other comprehensive income

     (400,250     133,478        (580,223     (56,890
  

 

 

   

 

 

   

 

 

   

 

 

 

Other comprehensive income, after tax

     1,019,457        105,343        1,464,888        244,528   
  

 

 

   

 

 

   

 

 

   

 

 

 

Comprehensive Income

   $ 987,397      $ 120,509      $ 1,400,598      $ 226,809   
  

 

 

   

 

 

   

 

 

   

 

 

 

Weighted average number of shares outstanding

     1,081,232        1,082,067        1,081,232        1,082,631   

Income (Loss Per Common *

   $ (.03   $ (0.03   $ (0.08   $ (0.04
  

 

 

   

 

 

   

 

 

   

 

 

 

 

* After giving effect on a pro-rata basis to preferred dividends of $0.07 per share per annum on 428,726 shares outstanding.


TWENTY SERVICES, INC.

CONDENSED STATEMENT OF CASH FLOWS

 

     Three Months Ended
September 30,
    Nine Months Ended
September 30,
 
     2013     2012     2013     2012  

Cash flows from operating activities:

        

Interest and dividends received

   $ 28,321      $ 30,688      $ 68,132      $ 71,704   

Cash paid to employees and suppliers

     (29,040     (15,972     (116,393     (94,991
  

 

 

   

 

 

   

 

 

   

 

 

 

Net cash provided by (used) by operating activities

     (719     14,716        (48,261     (23,287
  

 

 

   

 

 

   

 

 

   

 

 

 

Cash flows from financing and investing activities:

        

Net sale (purchase) of securities

     (2,403     00        73,403        26,561   

Dividends paid

     (112     (4,805     (24,767     (5,290

Purchase of Treasury Stock

     (2,104     (3,867     (2,316     (24,820
  

 

 

   

 

 

   

 

 

   

 

 

 

Net cash provided (used) by investing activities

     (4,619     (8,672     46,320        (3,549
  

 

 

   

 

 

   

 

 

   

 

 

 

Net increase (decrease) in cash

     (5,338     6,044        (1,941     (26,836

Cash, beginning of period

     93,618        71,792        90,221        104,672   
  

 

 

   

 

 

   

 

 

   

 

 

 

Cash and temporary investments, end of period

   $ 88,280      $ 77,836      $ 88,280      $ 77,836   
  

 

 

   

 

 

   

 

 

   

 

 

 


MANAGEMENT’S DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

LIQUIDITY AND CAPITAL RESOURCES

RESULTS OF OPERATIONS

The Company was historically engaged in the finance business, which consisted of extending credit to individuals and companies for various real estate projects, including single-family dwellings, commercial real estate and home improvements, and for business and other miscellaneous purposes. It has not made any loans in several years. Thus, the only revenue of the Company is interest and dividends from its marketable securities held as assets, as well as gains on sales of those assets. From time to time, the Company has sold some of those marketable securities to meet the operating expenses of the Company.

In the quarter ended September 30, 2013, the Company engaged legal advice to determine the steps necessary to discontinue filing reports with the Securities and Exchange Commission (SEC). As a result, the Company incurred additional expenses of $30,370 in this quarter. The costs of remaining a public company, which include accounting, legal, printing and mailing costs and the time of the Company’s management and staff are approximately $100,000 per year.

The Registrant reported a loss of $ 32,060 for the three months ended September 30, 2013, as compared to an income of $15,166 for the corresponding 2012 period. The Registrant reported a loss of $64,290 for the nine months ended September 30, 2013 as compared to a loss of $17,719 for the corresponding 2012 period.

REVENUES

Revenues for the three months ended September 30, 2013 of $28,322 were comparable to $30,689 for the corresponding 2012 period. Revenues for the nine months ended September 30, 2013 of $68,132 were comparable to $71,704 for the corresponding 2012 period.

EXPENSES

General and administrative expenses increased from $15,523 in 2012 to $60,382 for the corresponding three months period ended September 30, 2013. General and administrative expenses increased to $144,287 for the nine months ended September 30, 2013 from $89,950 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 operating activities and its investing activities will use net cash flows and that its financing activities will continue to generate cash flows.

COMPREHENSIVE INCOME

Comprehensive income totaled $1,400,598 for the nine months ended September 30, 2013 as compared to $226,809 in 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 entity’s 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 entity’s 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. Twenty’s 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.


     Fair Value Measurements at Reporting Date Using  

Description

   Quoted Prices in Active
Markets for Identical
Assets
(Level l)
09/30/2012
     Significant Other
Observable
Inputs
(Level 2)
     Significant
Unobservable
Inputs
(Level 3)
 

Marketable securities

   $ 5,166,970       $ 1,246,033       $ .00   
  

 

 

    

 

 

    

 

 

 

Total

   $ 5,166,970       $ 1,246,033       $ .00   
  

 

 

    

 

 

    

 

 

 

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 SEC’s 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. Management’s 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 Company’s management evaluated, with the participation of the Company’s Principal Executive Officer (“PEO”), the effectiveness of the design and operation of the Company’s 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 Company’s 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.


MANAGEMENT’S 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 Company’s 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 Company’s management assessed the effectiveness of the Company’s 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 Company’s 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 Company’s 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.


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

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  XBRL - Taxonomy Extension Presentation Linkbase


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: November 8, 2013      

/s/ David J. Noble

      David J. Noble
     

Chairman/Director

Principal Executive Officer/Chief Financial Officer

Date: November 8, 2013      

/s/ Shirley B. Whitaker

      Shirley B. Whitaker
      Vice President