-----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, UuRv4re4MuU0nFkZfj1s7npWqlB12VuvITtyTba4qxLysf3dmRr1ZliqGSTWxp9G rsJ+bJeMJBglaqebxXvi8g== /in/edgar/work/20000804/0000950134-00-006346/0000950134-00-006346.txt : 20000921 0000950134-00-006346.hdr.sgml : 20000921 ACCESSION NUMBER: 0000950134-00-006346 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20000630 FILED AS OF DATE: 20000804 FILER: COMPANY DATA: COMPANY CONFORMED NAME: DWYER GROUP INC CENTRAL INDEX KEY: 0000797502 STANDARD INDUSTRIAL CLASSIFICATION: [6794 ] IRS NUMBER: 730941783 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: SEC FILE NUMBER: 000-15227 FILM NUMBER: 686480 BUSINESS ADDRESS: STREET 1: 1010 N UNIVERSITY PARKS DR CITY: WACO STATE: TX ZIP: 76707 BUSINESS PHONE: 2547452400 MAIL ADDRESS: STREET 1: 1010 N UNIVERSITY PARKS DR STREET 2: P O BOX 3146 CITY: WACO STATE: TX ZIP: 76707 FORMER COMPANY: FORMER CONFORMED NAME: MR ROOTER CORP DATE OF NAME CHANGE: 19920703 10QSB 1 e10qsb.txt FORM 10QSB FOR QUARTER ENDING JUNE 30, 2000 1 U.S. SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-QSB (Mark One) X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2000. __ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM________________ 0-15227 COMMISSION FILE NUMBER THE DWYER GROUP, INC. - -------------------------------------------------------------------------------- (EXACT NAME OF SMALL BUSINESS ISSUER AS SPECIFIED IN ITS CHARTER) Delaware 73-0941783 -------- ---------- (STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.) 1010 N. University Parks Dr., Waco, TX 76707 -------------------------------------------- (ADDRESS AND ZIP CODE OF PRINCIPAL EXECUTIVE OFFICES) (254) 745-2400 -------------- (ISSUER'S TELEPHONE NUMBER, INCLUDING AREA CODE) - -------------------------------------------------------------------------------- (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 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 August 4, 2000 - ---------------------------- ----------------------------- Common stock, $.10 par value 6,997,981 TRANSITIONAL SMALL BUSINESS DISCLOSURE FORMAT (CHECK ONE): Yes No X --- --- 2 THE DWYER GROUP, INC. INDEX
PART I - FINANCIAL INFORMATION PAGE NO. Item 1. Financial Statements Condensed Consolidated Balance Sheets as of June 30, 2000 (unaudited) and December 31, 1999.............................................................................3 Consolidated Statements of Operations for the Three Months Ended June 30, 2000 and 1999 (unaudited)................................................................4 Consolidated Statements of Operations for the Six Months Ended June 30, 2000 and 1999 (Unaudited)................................................................5 Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2000 and 1999 (unaudited)..........................................................6 Notes to Condensed Consolidated Financial Statements............................................7-8 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations............................................................9-11 PART II - OTHER INFORMATION Item 1. Legal Proceedings................................................................................12 Item 2. Changes in Securities............................................................................12 Item 3. Defaults Upon Senior Securities..................................................................12 Item 4. Submission of Matters to a Vote of Security Holders..............................................12 Item 5. Other Information................................................................................12 Item 6. Exhibits and Reports on Form 8-K.................................................................12
2 3 THE DWYER GROUP, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS
JUNE 30, DECEMBER 31, ASSETS 2000 1999 ----------- ------------ (Unaudited) Current assets: Cash and cash equivalents $ 472,569 $ 556,383 Marketable securities, available-for-sale 892,012 883,717 Trade accounts receivable, net of allowance for doubtful accounts of $400,779 and $220,242, respectively 1,107,065 829,866 Accounts receivable from related parties 260,442 55,581 Accrued interest receivable, including amounts due from related parties of $61,621 and $200,033, respectively 102,134 234,034 Trade notes receivable, current portion, net of allowance for doubtful accounts of $59,243 and $56,053, respectively 1,421,697 1,345,267 Inventories 111,185 31,779 Prepaid expenses 497,477 184,579 Federal income tax receivable -- 301,579 Notes receivable from related parties, current portion 172,696 682,878 ------------ ------------ Total current assets 5,037,277 5,105,663 Property and equipment, net 997,861 1,036,107 Notes and accounts receivable from related parties 1,776,261 1,290,998 Trade notes receivable, net of allowance for doubtful notes of $910,332 and $872,467, respectively 4,291,159 3,601,029 Goodwill, net 5,313,808 5,408,617 Purchased franchise rights, net 4,134,302 2,298,851 Covenant not to compete, net 61,661 71,661 Net deferred tax asset 299,013 299,013 Other assets 319,396 304,988 ------------ ------------ TOTAL ASSETS $ 22,230,738 $ 19,416,927 ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable, trade $ 948,797 $ 577,500 Accrued liabilities 1,771,640 1,399,378 Deferred franchise sales revenue 235,146 405,757 Litigation reserves 240,478 244,096 Current maturities of long-term debt 1,121,568 1,131,600 ------------ ------------ Total current liabilities 4,317,629 3,758,331 Long-term debt, less current portion 2,995,655 1,481,707 Deferred franchise sales revenue 349,562 417,432 Commitments and contingencies Stockholders' equity: Preferred stock -- -- Common stock 764,519 764,519 Additional paid-in capital 10,193,855 10,183,855 Retained earnings 4,962,276 4,131,821 Accumulated other comprehensive income (142,731) (130,052) Treasury stock, at cost (1,210,027) (1,190,686) ------------ ------------ Total stockholders' equity 14,567,892 13,759,457 ------------ ------------ TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 22,230,738 $ 19,416,927 ============ ============
See notes to condensed consolidated financial statements (unaudited). 3 4 THE DWYER GROUP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
THREE MONTHS ENDED JUNE 30, 2000 1999 ----------- ------------ REVENUES: Royalties $ 2,771,474 $ 2,453,799 Franchise fees 1,155,983 1,173,590 Sales of products and services 487,734 311,493 Interest 161,583 101,305 Other 150,862 133,788 ----------- ----------- TOTAL REVENUES 4,727,636 4,173,975 COSTS AND EXPENSES: General, administrative and selling 3,168,532 3,014,513 Costs of product and service sales 400,427 261,634 Depreciation and amortization 333,537 196,650 Interest 70,815 22,362 ----------- ----------- TOTAL COSTS AND EXPENSES 3,973,311 3,495,159 Income before income taxes 754,325 678,816 Income taxes (256,418) (238,634) ----------- ----------- NET INCOME $ 497,907 $ 440,182 =========== =========== EARNINGS PER SHARE - BASIC $ 0.07 $ 0.06 =========== =========== EARNINGS PER SHARE - DILUTED $ 0.07 $ 0.06 =========== =========== WEIGHTED AVERAGE COMMON SHARES 7,001,219 6,883,531 =========== =========== WEIGHTED AVERAGE COMMON SHARES AND POTENTIAL DILUTIVE COMMON SHARES 7,147,326 7,029,425 =========== ===========
See notes to condensed consolidated financial statements (unaudited). 4 5 THE DWYER GROUP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
SIX MONTHS ENDED JUNE 30, 2000 1999 ----------- ------------ REVENUES: Royalties $ 5,199,786 $ 4,445,238 Franchise fees 2,290,390 1,952,424 Sales of products and services 1,052,107 742,656 Interest 332,276 231,014 Other 297,594 264,444 ----------- ----------- TOTAL REVENUES 9,172,153 7,635,776 COSTS AND EXPENSES: General, administrative and selling 6,224,069 5,524,363 Costs of product and service sales 852,475 618,228 Depreciation and amortization 672,267 366,405 Interest 160,879 51,895 ----------- ----------- TOTAL COSTS AND EXPENSES 7,909,690 6,560,891 Income before income taxes 1,262,463 1,074,885 Income taxes (432,008) (380,093) ----------- ----------- NET INCOME $ 830,455 $ 694,792 =========== =========== EARNINGS PER SHARE - BASIC $ 0.12 $ 0.10 =========== =========== EARNINGS PER SHARE - DILUTED $ 0.12 $ 0.10 =========== =========== WEIGHTED AVERAGE COMMON SHARES 7,001,944 6,920,053 =========== =========== WEIGHTED AVERAGE COMMON SHARES AND POTENTIAL DILUTIVE COMMON SHARES 7,174,649 7,071,038 =========== ===========
See notes to condensed consolidated financial statements (unaudited). 5 6 THE DWYER GROUP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
SIX MONTHS ENDED JUNE 30, 2000 1999 ----------- ------------ Operating activities: Net income for the period $ 830,455 $ 694,792 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 672,267 366,405 Provision for doubtful accounts 61,033 204,392 Notes received for franchise sales (1,509,619) (1,254,854) Change in deferred tax asset -- 79,134 Changes in assets and liabilities: Accounts and interest receivable (145,299) (60,211) Net change in receivables / payables to related parties (204,861) (72,869) Inventories (79,406) (4,355) Prepaid expenses (312,898) (21,967) Federal income tax receivable 301,579 -- Accounts payable and accrued liabilities 743,559 1,277,281 Litigation reserves (3,618) (605,897) Deferred franchise sales revenue (238,481) (52,469) Other 1,341 41,325 ----------- ----------- Net cash provided by operating activities 116,052 590,707 ----------- ----------- Investing activities: Collections of notes receivable 727,869 348,668 Purchases of property and equipment (151,203) (155,289) Purchases of franchise rights (450,000) (210,788) Acquisition of other assets (27,573) (27,273) Sale of other assets -- 141,575 Purchase of marketable securities (10,804) -- Sale of marketable securities -- 706,820 Increase (decrease) in unrealized gain on marketable securities -- (31,726) Collections on notes receivable from related parties 24,919 71,729 ----------- ----------- Net cash provided by investing activities 113,208 843,716 ----------- ----------- Financing activities: Purchases of treasury stock (19,341) (350,755) Proceeds from borrowings 746,196 -- Payments on borrowings (1,039,929) (458,559) ----------- ----------- Net cash used in financing activities (313,074) (809,314) ----------- ----------- Net increase (decrease) in cash and cash equivalents (83,814) 625,109 Cash and cash equivalents, beginning of period 556,383 498,199 ----------- ----------- Cash and cash equivalents, end of period $ 472,569 $ 1,123,308 =========== ===========
See notes to condensed consolidated financial statements (unaudited). 6 7 THE DWYER GROUP, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - -------------------------------------------------------------------------------- NOTE 1. ORGANIZATION - -------------------------------------------------------------------------------- The Dwyer Group, Inc. is a holding company for service-based businesses providing specialty services internationally through franchising. The condensed consolidated financial statements include the accounts of The Dwyer Group, Inc. and its wholly-owned subsidiaries (the "Company") which include the following: - Rainbow International Carpet Dyeing and Cleaning Co. ("Rainbow") is a franchisor of carpet cleaning, dyeing, air duct cleaning, and restoration services under the service mark "Rainbow International"(R). - Mr. Rooter Corporation ("Mr. Rooter") is a franchisor of plumbing repair and drain cleaning services under the service mark "Mr. Rooter"(R). - Aire Serv Heating & Air Conditioning, Inc. ("Aire Serv") is a franchisor of heating, ventilating and air conditioning service businesses under the service mark "Aire Serv"(R). - Mr. Electric Corp. ("Mr. Electric") is a franchisor of electrical repair and service businesses under the service mark "Mr. Electric"(R). - Mr. Appliance Corp. ("Mr. Appliance") is a franchisor of major household appliance service and repair businesses under the service mark "Mr. Appliance"(R). - Synergistic International, Inc., ("Glass Doctor"), is franchisor of Glass Doctor (R), a service concept whose business is the replacement of automobile, residential and commercial glass. - The Dwyer Group National Accounts, Inc. ("National Accounts") solicits national account customers who can call a toll-free phone number for their general repair and 24-hour emergency service needs. The order is filled through the Company's network of franchisees or qualified subcontractors. - The Dwyer Group Canada, Inc. ("TDG Canada") was incorporated in January 1998 in order to market and service certain of the Company's franchise concepts in Canada. Currently, those concepts are Mr. Rooter, Mr. Electric, Rainbow and Aire Serv. - -------------------------------------------------------------------------------- NOTE 2. BASIS OF PRESENTATION - -------------------------------------------------------------------------------- A. PRINCIPLES OF CONSOLIDATION The accompanying condensed consolidated financial statements include The Dwyer Group, Inc. and its subsidiaries (the "Company"). All significant intercompany balances and transactions have been eliminated. B. INTERIM DISCLOSURES The information as of June 30, 2000 and for the three months and six months ended June 30, 2000 and June 30, 1999 is unaudited but in the opinion of management, reflects all adjustments, which are of a normal recurring nature, necessary for a fair presentation of financial position and results of operations for the interim periods. The accompanying condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto contained in the Company's Annual Report on Form 10-KSB for the fiscal year ended December 31, 1999, and with other filings with the U.S. Securities and Exchange Commission. The results of operations for the three months and six months ended June 30, 2000 are not necessarily indicative of the results to be expected for the fiscal year ending December 31, 2000. 7 8 C. RECLASSIFICATIONS Certain reclassifications have been made to the 1999 condensed consolidated financial statements to conform to the presentation used in the 2000 condensed consolidated financial statements. These reclassifications had no effect on stockholders' equity or net income. - -------------------------------------------------------------------------------- NOTE 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - -------------------------------------------------------------------------------- EARNINGS PER COMMON SHARE Basic earnings per share is computed based on the weighted average number of shares outstanding during each of the periods. Diluted earnings per share include the dilutive effect of unexercised stock options and warrants. - -------------------------------------------------------------------------------- NOTE 4. COMMON STOCK - -------------------------------------------------------------------------------- In September 1998, the Company authorized the repurchase of up to 100,000 of the Company's common stock in the open market or in private transactions and subsequently increased that amount to 550,000 shares. As of August 4, 2000, the Company had repurchased 527,379 shares at an average purchase price of $2.12. Of such shares, 7,933 have been purchased in 2000. In early 1999, the Company issued 100,000 warrants to purchase the Company's common stock to a nonaffiliated third party in connection with the purchase of franchise rights. The warrants were issued at an exercise price of $3.00 per share and expire in 2005. - -------------------------------------------------------------------------------- NOTE 5. PURCHASE OF FRANCHISE RIGHTS - -------------------------------------------------------------------------------- In February of 2000, the Company entered into an agreement to purchase franchise rights from a nonaffiliated third party. The transaction also included the purchase of notes receivable due from certain franchisees operating in the purchased territory. The Company paid approximately $800,000 in cash and executed a promissory note for $1,750,000 in connection with the transaction. In order to fund a portion of the transaction, the Company negotiated a $500,000 term loan and a $500,000 line of credit with its bank and drew down $700,000. In April of 2000, the Company purchased additional franchise rights from another nonaffiliated third party for $50,000 in cash. THIS SECTION LEFT INTENTIONALLY BLANK. 8 9 - -------------------------------------------------------------------------------- MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - -------------------------------------------------------------------------------- Unless otherwise noted, all dollar amounts are rounded to the nearest thousand. Percentages represent the change from the comparable amount from the previous year. Note references refer to Notes to Condensed Consolidated Financial Statements. LIQUIDITY AND CAPITAL RESOURCES The Company's working capital ratio was approximately 1.2 to 1 at June 30, 2000 as compared to 1.4 to 1 at December 31, 1999. The Company had working capital of approximately $720,000 at June 30, 2000 as compared to approximately $1.3 million at December 31, 1999. For the remainder of fiscal 2000, management expects to fund working capital requirements primarily through operating cash flow. At June 30, 2000, the Company had cash and cash equivalents of approximately $473,000, and marketable securities of approximately $892,000. In February of 2000, the Company negotiated a $500,000 term loan and a $500,000 line of credit with its bank. Of such total amount, $700,000 was received and was used to fund a portion of the purchase of franchise rights as discussed in Note 5. Cash in the amount of $116,000 was provided by operating activities in the first six months of 2000, as compared to $591,000 of cash provided by such activities for the same period in 1999. In 2000, cash was generated primarily by a net profit of $830,000, depreciation and amortization of $672,000, an increase in payables and accrued liabilities of $744,000 and a decrease in a tax refund receivable of $302,000, partially offset by notes received from franchise sales of $1,510,000, a decrease in deferred franchise sales revenues of $238,000 and an increase in other current assets net of other current liabilities of $746,000. In the first six months of 2000, the Company generated $113,000 in cash from investing activities primarily from collections on notes receivable of $728,000, partially offset by the purchase of franchise rights for $450,000 and the purchase of property and equipment for $151,000. For the same period in 1999, the Company generated $844,000 in cash from investing activities, primarily from the sale of marketable securities of $707,000, collections on notes receivable of $349,000 and the sale of other assets for $142,000, partially offset by purchases of property and equipment of $155,000 and the purchase of franchise rights for $211,000. The Company used $313,000 for financing activities in the first six months of 2000. Payments on borrowings of $1,040,000 and the purchase of treasury stock for $19,000 was partially offset by proceeds from borrowings of $746,000. In the first six months of 1999, the Company used $809,000 in cash for financing activities for payments on borrowings of $459,000 and for purchases of treasury stock of $351,000. The Company is not aware of any trend or event, which would potentially adversely affect its liquidity. In the event such a trend would develop, management believes that the Company has sufficient funds available to satisfy the working capital needs of the business. RESULTS OF OPERATIONS For the six months ended June 30, 2000, compared to the six months ended June 30, 1999. Total revenues for the six months increased by $1,536,000 (20%) to $9,172,000 in 2000 from $7,636,000 in 1999. This increase is due to increases in each of the Company's revenue categories as follows: royalties - $755,000 (17%); franchise fees - $338,000 (17%); sales of products and services - $309,000 (42%); interest - - $101,000 (44%); and other - $33,000 (13%). 9 10 Royalty revenues from each of the Company's franchise concepts increased as follows: Mr. Rooter $315,000 16% Mr. Electric $177,000 62% Glass Doctor $ 84,000 13% Mr. Appliance $ 45,000 86% Aire Serv $ 30,000 14% Rainbow $ 73,000 6%
In addition to the above, royalties from the Company's Canadian operations increased by $31,000 (19%). Overall, these royalty revenue increases, which coincide with the increased business revenues of existing franchisees as well as an increase in the number of franchisees producing revenue, are a direct result of the Company's emphasis on providing strong franchise support services, and its methods and programs created to assist franchisees in building successful businesses, along with continued emphasis on the sale of new franchises. These strategies are very important to the future of the Company, as royalties are the foundation for the Company's long-term financial strength. The increase in franchise fee revenues was due to increases from each of the following concepts: Mr. Rooter - $188,000 (53%); Mr. Electric - $136,000 (40%); Rainbow - $11,000 (7%); Mr. Appliance - $32,000 (50%); and Glass Doctor - $49,000 (9%). These increases were partially offset by a decrease of $38,000 (9%) in franchise fees generated from Aire Serv due to the sale of two large territories in 1999 and a decrease of $40,000 (59%) in the sale of franchises in Canada. Sales of products and services increased by $309,000 (42%), due to additional sales made by National Accounts. Interest income increased by $101,000 (44%) due to an increase in trade notes receivable related to the sale of franchises. General and administrative expenses increased by $700,000 (13%), due to additional costs and personnel associated with the increase in overall revenues. Due to the increase in product and service sales, costs associated with such sales increased by $234,000 (38%). Depreciation and amortization increased by $306,000 (84%) due primarily to amortization of franchise rights purchased in late 1999 and early 2000. Interest expense increased by $109,000 (210%) due to additional debt resulting from the purchase of franchise rights. The Company reported net income of $830,000 for the six months ended June 30, 2000 as compared to net income of $695,000 for the same period in 1999. For the three months ended June 30, 2000, compared to the three months ended June 30, 1999. Total revenues for the quarter increased by $553,000 (13%) to $4,727,000 in 2000 from $4,174,000 in 1999. This increase is due primarily to an increase of $318,000 (13%) in royalties, an increase of $176,000 (57%) in sales of products and services and an increase of $60,000 (59%) in interest income. Royalty revenues increased for each franchise concept as follows: Mr. Rooter $113,000 11% Mr Electric $ 87,000 57% Glass Doctor $ 50,000 15% Aire Serv $ 26,000 20% Mr. Appliance $ 23,000 83% Rainbow $ 2,000 --%
10 11 In addition to the above, royalties from the Company's Canadian operations increased by $17,000 (20%). Overall, these royalty revenue increases, which coincide with the increase business revenues of existing franchisees as well as an increase in the number of franchisees producing revenue, are a direct result of the Company's emphasis on providing strong franchise support services, and its methods and programs created to assist franchisees in building successful businesses, along with continued emphasis on the sale of new franchises. These strategies are very important to the future of the Company, as royalties are the foundation for the Company's long-term financial strength. Franchise sales revenues decreased by $18,000 (2%) from 1999 to 2000. A decrease of $183,000 (72%) in such revenues from Aire Serv was partially offset by an increase of $180,000 (72%) in franchise sales revenues associated with Glass Doctor. Sales of products and services increased by $176,000 (57%), due to additional sales made by National Accounts. Interest income increased by $60,000 (59%) due to an increase in trade notes receivable related to the sale of new franchises. General and administrative expenses increased by $154,000 (5%), due to additional costs and personnel associated with the increase in overall revenues. Depreciation and amortization increased by $137,000 (70%), due primarily to amortization of franchise rights purchased in late 1999 and early 2000. Interest expense increased by $48,000 (217%) due to additional debt resulting from the purchase of franchise rights. The Company reported net income of $497,000 for the quarter ended June 30, 2000 as compared to net income of $440,000 for the same period in 1999. IMPACT OF INFLATION Inflation has not had a material impact on the operations of the Company. FOREIGN OPERATIONS The Company operates in 19 foreign countries. Typically, foreign franchises are sold and managed by a master licensee in that country. Royalty revenues from master licenses are recorded as received due to the difficulty sometimes experienced in foreign countries when attempting to transfer such funds to the United States. The Company does not depend on foreign operations, and such operations do not have a material impact on its cash flow. During the remainder of 2000, the Company may sell additional master licenses, which could result in lump sum payments from the master licensees to the Company. FORWARD-LOOKING STATEMENTS The Company cautions readers that various factors could cause the actual results of the Company to differ materially from those indicated by forward-looking statements made from time-to-time in news releases, reports, proxy statements, registration statements and other written communications (including the preceding sections of this Management's Discussion and Analysis), as well as oral statements made by representatives of the Company. Except for historical information, matters discussed in such oral and written communications are forward-looking statements that involve risks and uncertainties, including, but not limited to, general business conditions, the impact of competition, taxes, inflation, and governmental regulations. THIS SECTION LEFT INTENTIONALLY BLANK. 11 12 PART II OTHER INFORMATION THE DWYER GROUP, INC. AND SUBSIDIARIES - -------------------------------------------------------------------------------- ITEM 1 - LEGAL PROCEEDINGS - -------------------------------------------------------------------------------- NONE - -------------------------------------------------------------------------------- ITEM 2 - CHANGES IN SECURITIES - -------------------------------------------------------------------------------- (a) NONE (b) Not applicable. (c) 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 - -------------------------------------------------------------------------------- (a) Exhibits: Financial Data Schedule (b) Reports on 8-K NONE 12 13 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, thereunto duly authorized. Date: August 4, 2000 The Dwyer Group, Inc. By: /s/ Thomas Buckley --------------------------------- Thomas Buckley Vice President and Chief Financial Officer 13 14 INDEX TO EXHIBITS
EXHIBIT NUMBER DESCRIPTION - ------- ----------- 27 Financial Data Schedule
EX-27 2 ex27.txt FINANCIAL DATA SCHEDULE
5 6-MOS 3-MOS DEC-31-2000 DEC-31-2000 JAN-01-2000 APR-01-2000 JUN-30-2000 JUN-30-2000 472,569 0 892,012 0 2,891,338 0 521,643 0 111,185 0 5,037,277 0 997,861 0 0 0 22,230,738 0 4,317,629 0 0 0 0 0 0 0 764,519 0 13,803,373 0 22,230,738 0 1,052,107 487,734 9,172,153 4,727,636 852,475 400,427 7,909,690 3,973,311 0 0 0 0 160,879 70,815 1,262,463 754,325 432,008 265,418 830,455 497,907 0 0 0 0 0 0 830,455 497,907 .12 .07 .12 .07
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