8-K

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 8-K

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported) May 22, 2007

TRM CORPORATION

(Exact Name of Registrant as Specified in Its Charter)

Oregon
(State or Other Jurisdiction
of Incorporation) 0-19657
(Commission File Number) 93-0809419
(IRS Employer
Identification No.)

5208 N.E. 122nd Avenue
Portland, Oregon 97230
(Address of Principal Executive Offices) (Zip Code)

(503) 257-8766
(Registrant’s Telephone Number, Including Area Code)

N/A
(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02 Results of Operations and Financial Condition

     On May 22, 2007, TRM Corporation issued a press release announcing its financial results for the quarter and year ended December 31, 2006. A copy of the press release, including unaudited financial information released as a part thereof, is furnished as Exhibit 99.1 to this Current Report on Form 8-K.

     The Company will present those financial results during a conference call to be held on May 22, 2007, at 5:00 p.m. Eastern Daylight Time.

     A copy of the press release is filed herewith as Exhibit 99.1.

     The information in this Item 2.02 of the Current Report, including Exhibit 99.1 is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended (the “Exchange Act”) or otherwise subject to the liabilities of that Section. The information in this Item 2.02 of this Current Report shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, as amended or the Exchange Act.

Item 5.02 Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers

(b) On May 22, 2007, Edward E .Cohen resigned from the Board of Directors of TRM Corporation (the “Company”), effective as of June 15, 2007. Mr. Cohen’s departure is not related to any disagreement with the Company or with the Company’s operations, policies or practices.

     On May 22, 2007, Jeffrey F. Brotman resigned as President and Chief Executive Officer effective as of June 15, 2007.

(c) On May 22, 2007, Richard Stern was appointed President and Chief Executive Officer to be effective on June 15, 2007 (“Employment Effective Date”). Mr. Stern, age 46, has served as the Company’s Chief Operating Officer from November 2006, and as the Company’s Executive Vice President for Corporate Operations from October 2006 to November 2006. Before his employment with the Company, Mr. Stern served as Vice President/General Manager of Building Solutions for American Tower Corporation from August 2005 to September 2005. He previously held that position with SpectraSite Communications, which was acquired by American Tower, from May 2002 to August 2005. From January 2000 to May 2002, Mr. Stern served as Vice President of Real Estate, Building Division, with SpectraSite Communications.

     On May 22, 2007, the Company entered into a new employment agreement with Mr. Stern (“Employment Agreement”) that replaced his previous agreement with the Company. Under the Employment Agreement, Mr. Stern will receive a base salary of $375,000 and is eligible to receive an annual bonus based upon reasonably specific criteria. The target annual

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bonus amount is 50% of his base salary, although on the first two anniversaries of when he initially commenced his employment with the Company, he is entitled to an annual bonus of not less than $100,000. The Employment Agreement also provides that Mr. Stern will be granted 500,000 shares of restricted stock which will vest 25% on each anniversary date of the Employment Effective Date. The restricted stock and stock options awarded under his previous agreement will continue to vest on the schedule provided under his previous agreement. If Mr. Stern is terminated by the Company without cause, or at any time within three months before or 12 months after the occurrence of a change of control of the Company, except for cause (which is defined in the Employment Agreement), (i) all of his stock options and restricted stock will vest upon the date of his termination, (ii) the Company will pay him all amounts of accrued but unpaid base salary and a pro-rata amount of the targeted annual bonus for that year, (iii) the Company will pay him an amount equal to two years of base salary plus two years targeted annual bonus and (iv) the Company will provide health and dental insurance to him until the earlier of (a) two years from the date of his termination or (b) the commencement of his employment with another employer. If Mr. Stern terminates his employment under the Employment Agreement other than by reason of a constructive dismissal (as that term is defined in the Employment Agreement), the Company will pay Mr. Stern all accrued but unpaid base salary and provide certain fringe benefits as well as any annual bonus that has been awarded but not yet paid. Additionally, Mr. Stern may terminate his employment if there is a constructive dismissal, and receive the same termination benefits as for a termination without cause. His Employment Agreement also contains non-competition and confidentiality covenants that extend for two years following termination of this employment with the Company.

(d) Mr. Stern was also appointed as a director of the Company on May 21, 2007. Information concerning Mr. Stern’s business background and employment arrangements are set forth in Section (c) of this Item 5.02. Mr. Stern has been appointed to the Executive Committee of the Board of Directors.

     A copy of the press release is filed herewith as Exhibit 99.2.

     The information in this Current Report, including Exhibit 99.1 and 99.2, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended, (the “Exchange Act”) or otherwise subject to the liabilities of that Section. The information in this Current Report shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1993, as amended or the Exchange Act.

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Item 9.01 Exhibits

     (d) Exhibits. The following exhibits are furnished with this Current Report on Form 8-K:

No.		Description
	99.1	Press Release dated May 22, 2007, announcing financial results for the fourth quarter and year ended December 31, 2006.
	99.2	Press Release dated May 22, 2007, announcing management changes.

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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 hereunto duly authorized.

	TRM Corporation
Date: May 22, 2007	By:	/s/ Daniel E. O’Brien
		Daniel E. O’Brien
		Chief Financial Officer

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EXHIBIT INDEX

Exhibit No.		Description
	99.1	Press Release dated May 22, 2007, announcing financial results for the fourth quarter and year ended December 31, 2006.
	99.2	Press Release dated May 22, 2007, announcing management changes.

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EX-99.1

Exhibit 99.1

For further Information, contact:

Ashley Ammon MacFarlane
Integrated Corporate Relations for TRM Corporation
Office: (203) 682-8208

TRM Corporation Announces Full Year and Fourth Quarter 2006 Financial Results

PORTLAND, Oregon, May 22, 2007 (PR Newswire) — TRM Corporation (NASDAQ: TRMM) today announced fourth quarter and full year 2006 financial results. The Company intends to file its Form 10-K no later than May 23, 2007, and, as previously announced, will host a conference call with investors at 5:00 p.m. EDT today.

Jeff Brotman, President and CEO of TRM Corporation, stated “TRM Corporation underwent substantial change in 2006 and we appreciate investors’ patience in our reporting process. Since June 2006, we have sold our U.K. photocopy business, our U.S. photocopy business, our Canadian ATM operations, our U.K. ATM operations and our German ATM operations. We have made progress in our restructuring efforts and have transferred our service organization to an independent provider, dramatically reduced the number of our employees and closed various locations. All of these efforts reflect our commitment to improve our cost structure and we expect to have a simpler and more efficient business model as a result of these actions. As of today, we are focusing on our core strength as a leader in the non-bank ATM industry in the U.S. and we are optimistic about our organic and strategic opportunities for the remainder of the year.”

Fourth Quarter 2006 Financial Results

• Gross sales from continuing operations were $24.9 million, compared to $29.8 million in the fourth quarter 2005.

• Gross profit from continuing operations was $3.2 million, compared to $4.0 million in the fourth quarter of 2005.

• Operating loss from continuing operations improved to $5.5 million from $12.8 million in the fourth quarter of 2005.

• Loss from continuing operations improved to $6.3 million from $9.3 million in the fourth quarter of 2005.

• Loss from discontinued operations was $9.0 million in the fourth quarter of 2006.

• Net loss (including both continuing and discontinued operations) was $15.2 million compared to $13.7 million in the fourth quarter of 2005.

Discontinued operations include our Canadian ATM, U.K. ATM, German ATM and U.S. photocopy businesses. The Company also recorded losses on asset retirements of $507,000 in the fourth quarter.

ATM SEGMENT HIGHLIGHTS

($ millions)	Q4 2006			Q4 2005			Q3 2006
Sales	$	24,173		$	28,660		$	26,414
Discounts		14,444			19,189			16,702
Net Sales		9,729			9,471			9,712
Gross Profit		3,136			3,915			3,820
Pretax loss		(1,378	)		(7,483	)		(45,004	)
Gross Margin (% net sales)		32	%		41	%		39	%
ATM Sales Drivers:
Average monthly number of transacting		11,511			13,926			12,236
ATMs
Total withdrawals (millions)		9.4			11.6			11.1
Withdrawal transactions per unit per month		274			277			302
Transaction based sales per transaction	$	2.35		$	2.26		$	2.24
Transaction based sales per unit per month	$	643		$	628		$	676

The average number of transacting ATMs in the network during the fourth quarter of 2006 was 11,511 compared to 13,926 during the fourth quarter of 2005, total withdrawals were 9.4 million, and average monthly transactions per ATM was 274 compared to 277 in the fourth quarter of 2005. The decrease in transacting ATMs is primarily a result of attrition in ATM contracts acquired from eFunds in 2004 as well as the Company’s decision to cease renewal of certain ATM contracts operating below the Company’s targeted volume and profitability levels.

Fiscal Year 2006 Financial Results

• Sales from continuing operations decreased 14.2 % to $111.7 million from $130.3 million in 2005.

• Gross profit from continuing operations was $19.2 million compared to $27.8 million in 2005.

• Operating loss from continuing operations was $58.8 million in 2006, compared to an operating loss of $10.0 million in 2005.

• Loss from continuing operations was $56.5 million in 2006 and includes non-cash charges of $46.1 million for the impairment of certain assets.

• Loss from discontinued operations was $63.6 million in 2006 and includes non-cash charges of $50.0 million for the impairment of certain assets.

• Net loss (including both continuing and discontinued operations) increased to $120.1 million in 2006 from $8.9 million in 2005.

The Company’s United States ATM sales were $107.7 million in 2006 compared to $125.9 million for 2005. The $18.2 million decrease in ATM sales was due to a combination of a $16.4 million decrease in transaction-based sales and a $3.0 million decrease in service sales, partially offset by a $1.2 million increase in sales of ATM equipment.

Balance Sheet
TRM Corporation had cash and cash equivalents of $4.8 million at December 31, 2006, compared to $9.7 million at December 31, 2005, and a net working capital deficit of $2.6 million at December 31, 2006 compared to a net working capital deficit of $89.2 million at December 31, 2005. The working capital deficits were principally caused by the classification of all debt facilities as current liabilities due to loan covenant defaults. Working capital at December 31, 2006 includes $92.6 million of net assets held for sale.

In January 2007, TRM Corporation repaid substantially all of its $100 million of bank debt outstanding, leaving a balance of $2.0 million outstanding at the end of the first quarter of 2007.

Corporate Restructuring Plan
In November 2006, TRM Corporation implemented a corporate restructuring plan that sought to significantly alter the Company’s cost structure, allow for fulfillment of outstanding debt obligations, and utilize strategic relationships to lower the fixed costs of operations. This involved the reduction of controllable selling, general and administrative expenses by approximately 15%.

As part of the restructuring plan, in the fourth quarter of 2006, TRM Corporation entered into agreements to sell operations that accounted for approximately 58% of net sales in 2006. Additionally during the first quarter of 2007, TRM’s field service employees were transferred to an independent provider who assumed the cost of these employees as part of the transfer, leaving the Company with 91 employees as of March 31, 2007 compared to 364 as of December 31, 2006. Additionally, the Company closed facilities, including self storage units and service centers, as well as pursued more favorable relationships in order to aggressively reduce costs.

Richard Stern, Chief Operating Officer of TRM Corporation said, “We are encouraged with the initial results of our restructuring efforts and I want to thank all of our employees for their persistence and dedication to TRM during this period of change. While we are pleased with the material cost savings we have created as of today, our work is far from complete. We have specific goals for 2007 which, when successfully implemented, should generate incremental and material cost savings as well as allow us to grow our portfolio and ultimately enhance shareholder value.”

Management Change
TRM Corporation also announced today the appointment of Richard Stern, currently Chief Operating Officer, to the positions of President and Chief Executive Officer, effective June 15, 2007. He was also appointed to the Company’s Board of Directors, effective immediately. Jeffrey Brotman will remain with the Company as non-executive Chairman and, effective June 15, 2007, Edward E. Cohen has resigned from the Company’s board of directors and as Chairman of the Executive Committee of the Board.

Conference Call
Management will host a conference call to discuss financial results today at 5:00 pm EDT today. The call will be webcast live over the Internet from the Company’s website at http://www.trm.com/webcasts.shtml. The call will also be accessible over the phone by dialing 888-396-2298 (United States/Canada) or 617-847-8708 (all other countries), participant code #42788882.

About TRM Corporation
TRM Corporation is a consumer services company that primarily provides convenience ATM services in high-traffic consumer environments. TRM’s ATM customer base is widespread, with retailers throughout the United States. TRM operates the second largest non-bank ATM network in the United States.

FORWARD LOOKING STATEMENTS
Statements made in this news release that are not historical facts are forward-looking statements. Actual results may differ materially from those projected in any forward-looking statement. Specifically, there are a number of important factors that could cause actual results to differ materially from those anticipated in the forward-looking statements, such as consumer demand for our services; access to capital; maintaining satisfactory relationships with our banking partners; technological change; our ability to control costs and expenses; competition and our ability to successfully implement our planned growth. Additional information on these factors, which could affect our financial results, is included in our SEC filings. Finally, there may be other factors not mentioned above or included in our SEC filings that could cause actual results to differ materially from those contained in any forward-looking statement. Undue reliance should not be placed on any forward-looking statement, which reflects management’s analysis only as of the date of the statement. We assume no obligation to update any forward-looking statements as a result of new information, future events or developments, except as required by applicable law.

TRM CORPORATION
Consolidated Statements of Operations
(in thousands, except per share data)
(unaudited)

	Three months ended									Year ended
	12-31-05			9-30-06			12-31-06			12-31-05			12-31-06
Sales	$	29,765		$	27,292		$	24,923		$	130,268		$	111,745
Less discounts		19,400			16,830			14,544			77,463			66,260
Net sales		10,365			10,462			10,379			52,805			45,485
Cost of sales:
Cost of vault cash		1,510			1,782			1,659			5,319			6,482
Other		4,863			4,900			5,502			19,652			19,837
Gross profit		3,992			3,780			3,218			27,834			19,166
Selling, general and administrative expense		11,528			7,305			8,231			32,533			31,287
Abandoned acquisition costs		5,211			—			—			5,211			—
Impairment charges		—			46,053			—			—			46,053
Equipment write-offs		67			18			507			90			583
Operating loss		(12,814	)		(49,596	)		(5,520	)		(10,000	)		(58,757	)
Interest expense:
Interest expense and amortization of debt issuance costs		78			—			—			1,861			1
Loss on early extinguishment of debt		513			—			—			513			3,105
Other expense (income), net		198			(125	)		759			(1,781	)		(159	)
Loss from continuing operations before income taxes		(13,603	)		(49,471	)		(6,279	)		(10,593	)		(61,704	)
Benefit for income taxes		(4,255	)		(2,395	)		—			(4,493	)		(5,194	)
Loss from continuing operations		(9,348	)		(47,076	)		(6,279	)		(6,100	)		(56,510	)
Discontinued operations:
Loss from operations		(5,948	)		(51,881	)		(8,961	)		(3,180	)		(63,004	)
Provision (benefit) for income taxes		(1,594	)		(102	)		—			(409	)		577
Loss from discontinued operations		(4,354	)		(51,779	)		(8,961	)		(2,771	)		(63,581	)
Net loss	$	(13,702	)	$	(98,855	)	$	(15,240	)	$	(8,871	)	$	(120,091	)
BASIC AND DILUTED PER SHARE INFORMATION:
Loss from continuing operations	$	(9,348	)	$	(47,076	)	$	(6,279	)	$	(6,100	)	$	(56,510	)
Preferred stock dividends		—			—			—			(147	)		—
Loss from continuing operations available to common shareholders	$	(9,348	)	$	(47,076	)	$	(6,279	)	$	(6,247	)	$	(56,510	)
Weighted average common shares outstanding		16,716			17,102			17,113			14,542			17,034
Basic and diluted net loss per share:
Continuing operations	$	(0.56	)	$	(2.75	)	$	(0.37	)	$	(0.43	)	$	(3.32	)
Discontinued operations		(0.26	)		(3.03	)		(0.52	)		(0.19	)		(3.73	)
Net loss	$	(0.82	)	$	(5.78	)	$	(0.89	)	$	(0.62	)	$	(7.05	)

TRM Corporation
Consolidated Balance Sheets
(in thousands)
(unaudited)

	December 31,		December 31,
	2005		2006
Assets
Current assets:
Cash and cash equivalents	$	9,708	$	4,784
Accounts receivable, net		13,231		4,328
Income taxes receivable		211		215
Inventories		1,930		674
Prepaid expenses and other		3,610		1,579
Deferred financing costs		—		5,270
Deferred tax asset		1,036		—
Restricted cash — TRM Inventory Funding Trust		74,962		73,701
Assets held for sale		—		106,081
Total current assets		104,688		196,632
Equipment, less accumulated depreciation and amortization		71,709		11,646
Deferred tax asset		1,631		—
Goodwill		118,875		16,748
Intangible assets, less accumulated amortization		43,044		585
Other assets		1,835		833
Total assets	$	341,782	$	226,444
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable	$	13,218	$	5,988
Accrued expenses		14,940		8,744
Income taxes payable		—		67
Term loans and line of credit		91,605		99,318
TRM Inventory Funding Trust note payable		73,269		71,697
Current portion of obligations under capital leases		828		—
Liabilities related to assets held for sale		—		13,437
Total current liabilities		193,860		199,251
Obligations under capital leases		686		—
Deferred tax liability		5,430		—
Other long-term liabilities		380		—
Total liabilities		200,356		199,251
Minority interest		1,500		1,500
Shareholders’ equity:
Common stock		131,545		135,595
Additional paid-in capital		63		63
Accumulated other comprehensive income		2,884		4,692
Retained earnings (deficit)		5,434		(114,657	)
Total shareholders’ equity		139,926		25,693
Total liabilities and shareholders’ equity	$	341,782	$	226,444

TRM Corporation
Adjusted EBITDA Reconciliation
(Including Both Continuing and Discontinued Operations)
(in thousands — USD)
(unaudited)

	Three months ended									Year ended
	12-31-05			9-30-06			12-31-06			12-31-05			12-31-06
Net loss	$	(13,702	)	$	(98,855	)	$	(15,240	)	$	(8,871	)	$	(120,091	)
Add:
Interest expense		2,468			2,787			4,327			10,235			13,002
Loss on early extinguishment of debt		513			—			—			513			3,477
Benefit for income taxes		(5,849	)		(2,497	)		—			(4,902	)		(4,617	)
Depreciation and amortization		5,183			5,046			2,975			20,009			18,072
Equipment write-offs		1,410			12			788			1,576			1,070
Impairment charges		—			96,062			—			—			96,062
EBITDA		(9,977	)		2,555			(7,150	)		18,560			6,975
Non-cash stock compensation expense		31			160			184			31			1,139
Adjusted EBITDA	$	(9,946	)	$	2,715		$	(6,966	)	$	18,591		$	8,114

EX-99.2

Exhibit 99.2

For further information, contact:

Ashley Ammon MacFarlane
Integrated Corporate Relations for TRM Corporation
Office: (203) 682-8208

TRM Corporation Announces Key Management Changes
Appoints Richard Stern as Chief Executive Officer

PORTLAND, Oregon, May 22, 2007 (PR Newswire) — TRM Corporation (NASDAQ: TRMM) today announced the appointment of Richard Stern to the positions of President and Chief Executive Officer, effective June 15, 2007. Mr. Stern is currently the Chief Operating Officer of TRM Corporation. He was also appointed to the Company’s Board of Directors effective immediately. Jeffrey Brotman will remain with the Company as non-executive Chairman.

Mr. Brotman stated, “As an integral part of the restructuring process, Richard has enacted several successful cost saving measures from which we are already benefiting, and he has been critical in developing our strategy for the future. Richard has proven himself a highly effective leader and the board has great confidence in him. I look forward to continuing to work closely with Richard.”

Richard Stern, Chief Operating Officer, said, “I want to thank Jeff Brotman for his significant contributions to TRM Corporation. As a result of his leadership, the Company is in a much stronger position today. Jeff has guided us through the very arduous process of selling off certain non-core assets which then allowed us to repay our previously crippling debt load. With respect to the future, I am encouraged with the initial results of our restructuring efforts but our work is far from complete. We have specific goals for 2007 which, when successfully implemented, should generate incremental and material cost savings as well as allow us to grow our portfolio and ultimately enhance shareholder value.”

The Company also announced today that Edward E. Cohen has resigned from the Company’s board of directors and as Chairman of the Executive Committee of the Board, also effective on June 15, 2007.

About TRM Corporation
TRM Corporation is a consumer services company that primarily provides convenience ATM services in high-traffic consumer environments. TRM’s ATM customer base is widespread, with retailers throughout the United States. TRM operates the second largest non-bank ATM network in the United States.

FORWARD LOOKING STATEMENTS
Statements made in this news release that are not historical facts are forward-looking statements. Actual results may differ materially from those projected in any forward-looking statement. Specifically, there are a number of important factors that could cause actual results to differ

materially from those anticipated in the forward-looking statements, such as consumer demand for our services; access to capital; maintaining satisfactory relationships with our banking partners; technological change; our ability to control costs and expenses; competition and our ability to successfully implement our planned growth. Additional information on these factors, which could affect our financial results, is included in our SEC filings. Finally, there may be other factors not mentioned above or included in our SEC filings that could cause actual results to differ materially from those contained in any forward-looking statement. Undue reliance should not be placed on any forward-looking statement, which reflects management’s analysis only as of the date of the statement. We assume no obligation to update any forward-looking statements as a result of new information, future events or developments, except as required by applicable laws.

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