-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, P1j7UUL4eUbpUAgaFiSLlO/R5nB5WeFOuGB30rz0+lAaqGxvZz8AKW6cPnyi7QmV V4ST9/gECaXs0PjAYNEAgg== 0000893877-96-000093.txt : 19960613 0000893877-96-000093.hdr.sgml : 19960613 ACCESSION NUMBER: 0000893877-96-000093 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960331 FILED AS OF DATE: 19960514 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: TRM COPY CENTERS CORP CENTRAL INDEX KEY: 0000749254 STANDARD INDUSTRIAL CLASSIFICATION: 7330 IRS NUMBER: 930809419 STATE OF INCORPORATION: OR FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-19657 FILM NUMBER: 96564421 BUSINESS ADDRESS: STREET 1: 5208 N E 122ND AVENUE CITY: PORTLAND STATE: OR ZIP: 97230-1074 BUSINESS PHONE: 5032578766 10-Q 1 FORM 10-Q FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 1996 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 0-19657 ----------------------------------------- TRM COPY CENTERS CORPORATION ------------------------------------------------------ (Exact name of registrant as specified in its charter) Oregon 93-0809419 - - ------------------------------- --------------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) 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) ---------------------------------------------------- (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 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: CLASS OUTSTANDING AT MARCH 31, 1996 ------------ ----------------------------- Common Stock 6,469,793 PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS. -------------------- TRM COPY CENTERS CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands)
June 30, March 31, 1995 1996 ------------ ----------- ASSETS Current assets: Cash and cash equivalents $ 755 $ 515 Accounts receivable, net 6,735 7,725 Inventories 6,545 5,249 Prepaid expenses and other 1,726 1,495 -------- -------- Total current assets 15,761 14,984 Equipment and vehicles, less accumulated depreciation 39,823 39,335 Other assets 152 121 -------- -------- $ 55,736 $ 54,440 ======== ======== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Checks in transit $ 1,422 $ 1,116 Accounts payable 1,493 1,183 Accrued expenses 3,303 3,299 -------- -------- Total current liabilities 6,218 5,598 Long-term debt 14,238 10,553 Deferred income taxes 3,752 4,416 -------- -------- Total liabilities 24,208 20,567 Commitments -- -- Stockholders' equity: Preferred stock, no par value. Authorized 5,000 shares; no shares issued and outstanding -- -- Common stock, no par value. Authorized 10,000 shares; issued and outstanding 6,432 and 6,470 shares 15,940 16,070 Retained earnings 15,580 18,411 Cumulative translation adjustment 8 (608) -------- -------- Total stockholders' equity 31,528 33,873 -------- -------- $ 55,736 $ 54,440 ======== ========
-2- TRM COPY CENTERS CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data)
Three Months Ended Nine Months Ended March 31, March 31, --------------------- --------------------- 1995 1996 1995 1996 ------- ------- ------- ------- Sales $16,089 $17,394 $44,057 $49,838 Less discounts 2,983 3,027 8,123 8,654 ------- ------- ------- ------- Net sales 13,106 14,367 35,934 41,184 Cost of sales 7,157 7,708 19,531 22,474 ------- ------- ------- ------- Gross profit 5,949 6,659 16,403 18,710 Selling, general and administrative expense 3,926 4,504 10,983 12,928 ------- ------- ------- ------- Operating income 2,023 2,155 5,420 5,782 Other expense: Interest 275 230 631 779 Other, net 144 122 381 275 ------- ------- ------- ------- Income before income taxes 1,604 1,803 4,408 4,728 Provision for income taxes 641 726 1,749 1,897 ------- ------- ------- ------- Net income $ 963 $ 1,077 $ 2,659 $ 2,831 ======= ======= ======= ======= Net income per share $ 0.14 $ 0.15 $ 0.39 $ 0.39 ======= ======= ======= ======= Weighted average common and common equivalent shares outstanding 7,000 7,317 6,899 7,234 ======= ======= ======= =======
-3- TRM COPY CENTERS CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (In thousands)
Common Stock Cumulative --------------------- Retained Translation Shares Amount Earnings Adjustment Total ------ ------ -------- ---------- ----- Balance at June 30, 1995 6,432 $15,940 $15,580 $ 8 $31,528 Exercise of stock options 29 76 76 Issuance of stock to employees 9 54 54 Net income for the nine months ended March 31, 1996 -- -- 2,831 -- 2,831 Foreign currency translation adjustment -- -- -- (616) (616) ------ ------- ------- -------- ------- Balances at March 31, 1996 6,470 $16,070 $18,411 $ (608) $33,873 ====== ======= ======= ======== =======
-4- TRM COPY CENTERS CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands)
Nine Months Ended March 31, ------------------------------- 1995 1996 --------- --------- Operating activities: Net income $ 2,659 $ 2,831 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 3,323 3,884 Loss on disposal of equipment and vehicles 14 39 Changes in items affecting operations: Accounts receivable (1,836) (990) Inventories (1,936) 1,296 Prepaid expenses and other (56) 231 Accounts payable 2,768 (310) Accrued expenses 326 (4) Deferred income tax 612 664 --------- -------- Total operating activities 5,874 7,641 --------- -------- Investing activities: Proceeds from sale of equipment 75 80 Capital expenditures (11,258) (4,355) Other (10) 31 --------- -------- Total investing activities (11,193) (4,244) --------- -------- Financing activities: Increase in checks in transit, net (246) (306) Principal payments on long-term debt (3,445) (10,150) Proceeds from long-term debt 8,200 6,465 Net proceeds from issuance of common stock 85 130 --------- -------- Total financing activities 4,594 (3,861) --------- -------- Effect of exchange rate changes 262 224 --------- -------- Net increase (decrease) in cash and cash equivalents (463) (240) Cash and cash equivalents at beginning of period 663 755 --------- -------- Cash and cash equivalents at end of period $ 200 $ 515 ========= ========
-5- TRM COPY CENTERS CORPORATION Notes to Condensed Consolidated Financial Statements ---------------------------------------------------- 1. Interim Financial Data: The condensed financial statements included herein have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission and reflect all adjustments, consisting only of normal recurring adjustments, which, in the opinion of management, are necessary for a fair statement of the results of the interim periods. These condensed interim financial data should be read in conjunction with the Company's latest annual report to shareholders. 2. Net Income Per Share: Net income per share is computed based on the weighted average number of shares of common stock and common stock equivalents assumed to be outstanding during the periods. Common stock equivalents consist of options to purchase stock (using the treasury stock method). 3. Inventories (in thousands):
June 30, March 31, 1995 1996 -------- --------- Paper $ 2,740 $ 1,433 Toner and developer 1,533 1,023 Parts 2,272 2,793 ------- ------- $ 6,545 $ 5,249 ======= =======
-6- ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS ------------------------------------------------- General - - ------- The Company has continued to expand its business by opening TRM Centers in new and existing market areas. The number of market areas served increased from 50 to 54 from June 30, 1994, to June 30, 1995. The number of TRM Centers grew from 25,563 to 28,995 over the same period. This expansion has continued into the first nine months of fiscal 1996 with the opening of an additional nine new market areas and 2,037 TRM Centers. As of March 31, 1996, the Company had 63 market areas with 31,032 TRM Centers. Results of Operations - - --------------------- Sales for the third quarter were $17.4 million, up 8.1% from third quarter sales of the previous year of $16.1 million. This growth is due primarily to increased numbers of units. Average sales per unit also improved for the fifth quarter in a row. The number of units billed during the quarter increased 7.5% compared with the third quarter of the prior year, reflecting continued expansion of service areas. Sales for the first nine months of the year were $49.8 million, up 13.1% from the prior year. The Company continued its aggressive program of removing and relocating under-performing machines, which it began last year. Accordingly, the 431 net TRM Centers installed in the third quarter were consistent with levels in the prior five quarters, but below levels in earlier periods. This emphasis is expected to continue throughout calendar 1996. TRM Centers were newly placed, during the quarter, in Columbia, South Carolina and Columbus, Ohio, in the U.S. and in Bristol and New Castle, in the U.K. These four service areas were opened using a low-cost opening model first introduced in the fourth quarter of fiscal 1995. Under this model, resources from an established TRM Service Center are used to open the new area. Additional similar openings are planned over the coming quarters. Sales discounts are the portion of revenue retained by customers. Sales discounts as a percentage of sales continues to decline, from 18.5% to 17.4% in the comparable quarters. This reflects changes made in business agreements with new customers. The discount rate generally varies between individual retail businesses based on volume. Cost of sales continues to be affected by higher paper costs, which increased 9.8% compared to the prior quarter and 29.4% compared to the prior nine months. Despite this, cost of sales as a percentage of sales during the third quarter decreased slightly to 44.3% from 44.5% in the prior year. This is primarily due to the Company's continued focus on controlling costs and improving the profit performance of the installed base of machines. It is expected that the third quarter will be the last quarter significantly affected by the inventory of higher-cost paper. The paper cost impact in the fourth quarter is expected to be minor compared to the fourth quarter of last year. Looking forward, management is optimistic but cautious on the outlook for paper prices. Though prices have come down in recent months, it appears the volatility is continuing with a slight price increase announced in late April. -7- Selling, general and administrative expense grew to 25.9% as a percentage of sales during the third quarter as compared to 24.4% in the same quarter of the prior year. This reflects efforts to enhance and add to the management team and to the management information systems over the last year. Interest costs are incurred because the Company has used bank borrowings to help fund its expansion. The decrease in interest costs during the third quarter is primarily due to lower debt levels, which decreased from $14.3 million as of March 31, 1995, to $10.6 million as of March 31, 1996. These lower debt levels resulted from higher cash flow from operations and lower capital expenditures. Liquidity and Capital Resources - - ------------------------------- During the nine months ended March 31, 1996, the Company spent $4.4 million on capital expenditures as it continued expanding its business. The primary source of capital for this expansion was cash generated from operations. The Company currently anticipates capital expenditures of between $6 and $8 million during fiscal 1996. The Company intends to finance these capital expenditures primarily with cash generated from operations, although bank borrowings are available to supplement expenditures if needed. The Company expects that these sources will provide adequate cash to fund its expansion through at least December 31, 1996. Forward-looking Statements - - -------------------------- The information in this report regarding the Company's program of removing and relocating under-performing machines, service area openings, paper costs and capital expenditures contain forward-looking statements and actual results may materially differ. These statements involve risks and uncertainties that could cause actual results to materially differ, including the following: business conditions in the market areas the Company operates in, competitive factors, consumer demand for the Company's services, the Company's ability to execute its plans successfully and the volatility of paper costs. PART II - OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K. -------------------------------- (B) REPORTS ON FORM 8-K. There were no reports filed on Form 8-K during the three months ended March 31, 1996. -8- SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. TRM COPY CENTERS CORPORATION Date: May 15, 1996 By: ROBERT A. BRUCE --------------------------- ------------------------------- Robert A. Bruce Secretary, Vice President, Finance and Chief Financial Officer EX-27 2 EXHIBIT 27
5 1,000 9-MOS JUN-30-1996 MAR-31-1996 515 0 8063 (338) 5249 14984 56296 (16961) 54440 5598 10553 16070 0 0 0 54440 41184 41184 22474 35402 275 0 779 4728 1897 2831 0 0 0 2831 .39 .39
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