U.S. Securities and Exchange Commission
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT
OF 1934
For the quarterly period ended June 30, 1995
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from to
Commission file number 0-2054
TSI, INC.
(Exact name of small business issuer as specified in its charter)
Montana
(State or other jurisdiction of incorporation or organization)
81-0267738
(IRS Employer Identification No.)
128 Second Street South, Great Falls, Montana 59405
(Address of principal executive offices)
(406) 727-2600
(Issuer's telephone number)
Not Applicable
(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 o r15(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
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Check whether the registrant filed all documents and reports required to
be filed by Section 12, 13 or 15(d) of the Exchange Act after the
distribution of securities under a plan confirmed by a court. Yes No
APPLICABLE ONLY TO CORPORATE ISSUERS
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 June 30, 1995
$.05 Par Value Common Stock 9,423,142 Shares
Transitional Small Business Disclosure Format (Check One): Yes ; No X
TSI, INC.
INDEX
JUNE 30, 1995
Page Number
PART I
Condensed Consolidated Financial Statements:
Balance Sheet
June 30, 1995. . . . . . . . . . . . . . . . . . . . . . 2
Statements of Income -
Six Months and Three Months Ended June 30, 1995 and 1994 3
Statements of Cash Flows -
Six Months Ended June 30, 1995 and 1994. . . . . . . . . . . 4
Notes to Consolidated Financial Statements . . . . . . . . . . 5
Management's Discussion and Analysis of the
Statements of Income. . . . . . . . . . . . . . . . . . . . . 6
PART II
Other Information . . . . . . . . . . . . . . . . . . . . . . . 7
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . 8
TSI, INC
BALANCE SHEET
AS OF JUNE 30, 1995
ASSETS
Current Assets
Cash $ 6,452,676
Marketable Securities, at Fair Value 2,389,685
Receivables - Net 60,493
Income Tax Prepayments 49,911
Total Current Assets 8,952,765
Other Assets
Noncurrent Investments, at Fair Value 7,333,459
Noncurrent Receivables 98,118
Other Assets 2,238
Property, Plant and Equipment, Net 1,160,575
TOTAL ASSETS $17,547,155
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts Payable and Accrued Liabilities $ 257,292
Deferred Income Taxes 267,400
Due to Parent Company 26,349
Total Current Liabilities 551,041
Provison For Estimated Title and Escrow Losses 1,061,828
Minority Interests 281,178
Excess of Fair Value of Net Assets Acquired Over Cost 77,405
Deferred Income Taxes 1,586,800
Stockholders' Equity
Common Stock - $.05 Par Value;(30,000,000
shares authorized; 9,423,142 shares issued) 471,157
Additional Paid-In Capital 8,082,957
Retained Earnings 2,759,383
Unrealized Gains on Investments 2,675,406
Total Stockholders' Equity 13,988,903
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $17,547,155
See Notes to Consolidated Financial Statements
TSI,INC.
STATEMENTS OF INCOME
For The Three Months For The Six Months
Ended Ended
June 30, June 30,
1995 1994 1995 1994
Operating Revenues $ 655,177 $ 847,493 $1,242,572 $1,591,566
Operating Expenses
Salaries and Payroll
Costs 181,710 224,697 356,326 446,230
Depreciation 26,407 32,370 52,813 64,740
Other Expenses 193,263 200,434 378,759 359,811
Total Expenses 401,380 457,501 787,898 870,781
Operating Income 253,797 389,992 454,674 720,785
Gain (Loss) on Sales
of Assets 37,353 (2,616) 37,353 (1,016)
Amortization of
Deferred Credit 2,055 2,055 2,055 2,055
Minority Portion of
(Income) (7,000) (10,000) (10,300) (17,100)
Income Tax Expense (95,600) (139,000) (155,000) (260,000)
Net Income $ 190,605 $ 240,031 $ 330,837 $ 446,779
Earnings Per Share
(Earnings Per Weighted
Average Shares
Outstanding: 9,423,142
Shares in 1995
and 1994) $ .02 $ .03 $ .04 $ .04
Dividends Per Share $ - $ - $ - $ -
See Notes to Consolidated Financial Statements
TSI, INC.
STATEMENTS OF CASH FLOWS
For The Six Months Ended
June 30,
1995 1994
CASH FLOWS FROM OPERATING ACTIVITIES
Net Cash Provided (Used) By Operating
Activities $ 235,571 $ 585,543
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds From Sales of Property,
Plant and Equipment 83,262 2,600
Cash Received on Principal of
Notes Receivable 1,140 1,164
Cash Purchases of Minority Interests (500) (700)
Capital Expenditures Paid in Cash (25,889) (6,194)
Cash Used for Purchases of Marketable
Securities Available For Sale (21,813) (109,440)
Cash Received Upon Disposition of
Marketable Securities Available
For Sale 82,915 427,752
Net Cash Provided (Used) By Investing
Activities 119,115 315,182
CASH FLOWS FROM FINANCING ACTIVITIES
Cash Advanced From (To) Parent Company (83,984) (58,714)
Net Cash Provided (Used) By Financing
Activities (83,984) (58,714)
NET INCREASE IN CASH 270,702 842,011
CASH - BEGINNING OF PERIOD 6,181,974 4,527,135
CASH - END OF PERIOD $ 6,452,676 $ 5,369,146
See Notes to Consolidated Financial Statements
TSI, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30,1995
In the opinion of management, all adjustments necessary (consisting
of only normal recurring accruals) have been made to the unaudited financial
statements to present fairly the financial position as of June
30, 1995 and the results of the Company's operations for the
six months and three months ended June 30, 1995 and 1994 and cash
flows for the six months ended June 30, 1995 and 1994.
The results of operations for the six months and three months
ended June 30, 1995 and 1994 are not necessarily indicative of the
results to be expected for the full year.
The consolidated financial statements include the accounts of
the company, its wholly owned subsidiaries and its majority owned
subsidiaries. All significant intercompany transactions and
balances have been eliminated in consolidation.
M Corp owns approximately 91% of the Company's issued and
outstanding common stock.
The Company adopted the provisions of Statement of Financial
Accounting Standards No.115, Accounting for Certain Investments in
Debt and Equity Securities (SFAS No. 115) effective January 1,
1994. The Company has classified its investments, both current and
noncurrent, in debt and equity securities as Available-For-Sale, in
accordance with the various classifications of securities contained
in SFAS No. 115.
In accordance with SFAS No. 115, the Company's portfolios,
current and noncurrent, of Available-For-Sale investments are
carried at fair value in the Company's balance sheet at June 30,
1995. The net unrealized holding gains at June 30, 1995, net of
the estimated income tax effects and minority interests in the
unrealized holding gains is reported as a separate component of
stockholder's equity at June 30, 1995.
TSI, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF THE INCOME STATEMENT
JUNE 30, 1995
A summary of the period to period changes in items included
in the statements of income is shown below.
COMPARISON OF
THREE MONTHS SIX MONTHS
ENDED ENDED
JUNE 30, JUNE 30,
1995 AND 1994 1995 And 1994
INCREASES (DECREASES)
Revenues $ (192,316) (22.7%) $ (348,994) (21.9%)
Expenses (56,121) (12.3%) (82,883) ( 9.5%)
Gain on Sales
of Assets 39,969 NM 38,369 NM
Net Income (49,826) (20.7%) (115,942) (26.0%)
Revenues decreased $348,994 (21.9%) in the first six months of 1995 as
compared with the first six months of 1994 due primarily to a decrease,
$329,577, 32.7%, in title insurance and related revenues. The decrease
in title insurance and related revenues during the first six months of
1995 as compared with the first six months of 1994 was due primarily
to a decrease in the real estate economies within which the Company
operates. During the first six months of 1995 the Company realized
a net loss on the sale of investments in the amount of $20,392 as
compared with a net gain of $80,644 realized during the first six months
of 1994.
Salaries and payroll costs decreased $89,904, 20.1%,in the first six
months of 1995 as compared with the first six months of 1994 due primarily
to a decrease in the number of employees employed by the Company in it's
title insurance operations. Other expenses increased $18,948, 5.3% in
the first six months of 1995 as compared with the first six months of
1994 due primarily to an increase in accounting and legal fees.
Income tax expense decreased $105,000, 40.4%, in the first six
months of 1995 as compared with the first six months of 1994 due to
the decrease in pre-tax income.
TSI, INC.
PART II
OTHER INFORMATION
JUNE 30, 1995
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 SECURITY HOLDERS
None
ITEM 5 OTHER INFORMATION
None
ITEM 6 EXHIBITS AND REPORTS ON FORM 8-K
None
SIGNATURES
In accordance with the requirements of the Exchange
Act, the registrant caused this report to be
signed on its behalf by the undersigned,thereunto
duly authorized.
TSI, INC.
Registrant
Date: July 27,1995 s/S.I. Murphy
S. I. Murphy
Assistant Secretary-Treasurer
Date: July 27,1995 s/Jerry K. Mohland
Jerry K.Mohland,
Accountant