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 September 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 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
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 September 30, 1995
$.05 Par Value Common Stock 9,423,142 Shares
Transitional Small Business Disclosure Format (Check One): Yes ; No X
TSI, INC.
INDEX
SEPTEMBER 30, 1995
Page Number
PART I
Condensed Consolidated Financial Statements:
Balance Sheet
September 30, 1995 2
Statements of Income -
Three Months and Nine Months Ended
September 30, 1995 and 1994 3
Statements of Cash Flows -
Nine Months Ended September 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
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TSI, INC.
BALANCE SHEET
AS OF SEPTEMBER 30, 1995
ASSETS
Current Assets
Cash $ 6,845,306
Marketable Securities, at Fair Value 2,431,886
Receivables - Net 82,754
Total Current Assets 9,359,946
Other Assets
Noncurrent Investments, at Fair Value 7,289,113
Noncurrent Receivables 95,748
Other Assets 2,238
Property, Plant and Equipment, Net 1,137,992
TOTAL ASSETS $ 17,885,037
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts Payable and Accrued Liabilities $ 199,264
Income Taxes Payable 45,089
Due To Parent Company 51,969
Deferred Income Taxes 284,000
Total Current Liabilities 580,322
Provision For Estimated Title and Escrow Losses 1,143,351
Minority Interests 289,140
Excess of Fair Value of Net Assets Acquired Over Cost 75,350
Deferred Income Taxes 1,568,700
Stockholder's 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 3,000,852
Unrealized Gains on Investments 2,673,208
Total Stockholders' Equity 14,228,174
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 17,885,037
See Notes to Consolidated Financial Statements
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TSI, INC.
STATEMENTS OF INCOME
For The Three For The Nine
Months Ended Months Ended
September 30, September 30,
1995 1994 1995 1994
Operating Revenues $ 735,814 $ 773,913 $1,978,386 $2,365,479
Operating Expenses
Salaries and Payroll
Costs 184,138 207,790 540,464 654,020
Depreciation 26,174 32,370 78,987 97,110
Other Expenses 193,796 235,570 572,555 595,381
Total Expenses 404,108 475,730 1,192,006 1,346,511
Operating Income 331,706 298,183 786,380 1,018,968
Gain (Loss) on Sales of
Assets 10,500 -- 47,853 (1,016)
Amortization of
Deferred Credit 2,055 2,055 6,165 6,165
Minority Portion of
(Income) (7,792) (4,229) (18,092) (21,329)
Income Tax Expense (95,000) (80,000) (250,000) (340,000)
Net Income $ 241,649 $ 216,009 $ 572,306 $ 662,788
Earnings Per Share
(Earnings Per Weighted
Average Shares
Outstanding: 9,423,142
shares in 1995 and
1994) $ .03 $ .02 $ .06 $ .07
Dividends Per Share $ -- $ -- $ -- $ --
See Notes To Consolidated Financial Statements
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TSI, INC.
STATEMENTS OF CASH FLOWS
For The Nine
Months Ended
September 30,
1995 1994
CASH FLOWS FROM OPERATING ACTIVITIES
Net Cash Provided By Operating
Activities $ 596,545 $ 968,077
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds From Sales of Property,
Plant and Equipment 93,762 4,876
Cash Received on Principal of
Notes Receivable 1,650 1,690
Cash Purchases of Minority Interests (500) (1,300)
Capital Expenditures Paid in Cash (29,481) (6,194)
Cash Used for Purchases of Marketable
Securities Available For Sale (24,795) (111,606)
Cash Received on Dispositions of Marketable
Securities Available For Sale 84,515 541,043
Net Cash Provided By Investing
Activities 125,151 428,509
CASH FLOWS FROM FINANCING ACTIVITIES
Cash Advanced (To) Parent Company (58,364) (52,779)
Net Cash (Used) By Financing
Activities (58,364) (52,779)
NET INCREASE IN CASH 663,332 1,343,807
CASH - BEGINNING OF PERIOD 6,181,974 4,527,135
CASH - END OF PERIOD 6,845,306 $ 5,870,942
See Notes to Consolidated Financial Statements
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TSI, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
September 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 September 30, 1995 and the results of
the Company's operations for the three months and nine months
ended September 30, 1995 and 1994 and cash flows for the nine
months ended September 30, 1995 and 1994.
The results of operations for the three months and nine
months ended September 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 September 30,
1995. The net unrealized holding gains at September 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 September 30,
1995.
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TSI, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF THE INCOME STATEMENT
SEPTEMBER 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 NINE MONTHS
ENDED ENDED
SEPTEMBER 30, SEPTEMBER 30,
1995 AND 1994 1995 AND 1994
INCREASES (DECREASES)
Revenues $ (38,099) (4.9%) $ (387,093) (16.4%)
Expenses (71,622) (15.1%) (154,505) (11.5%)
Gain on Sales
of Assets 10,500 100.0% 48,869 NM
Net Income 25,460 11.8% (90,482) (13.7%)
Revenues decreased $387,093 (16.4%) in the first nine months of 1995 as
compared wuth the first nine months of 1994 due primarily to a decrease,
$367,645, 25.0%, in title insurance and related revenues. The decrease in
title insurance and related revenues during the first nine months of 1995
as compared with the first nine months of 1994 was due primarily to a
decrease in the real estate economies within which the Company operates.
During the first nine 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
$108,330 realized during the first nine months of 1994.
Salaries and payroll costs decreased $113,556, 17.4%, in the first nine
months of 1995 as compared with the first nine months of 1994 due primarily
to a decrease in the number of employees employed by the Company in it's
title insurance operations.
Income tax expense decreased $90,000, 26.5%, in the first nine months of
1995 as compared with the first nine months of 1994 due to the decrease in
pre-tax income.
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TSI, INC.
PART II
OTHER INFORMATION
SEPTEMBER 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
On July 11, 1995 a meeting of shareholders was held at which the
Company's entire Board of Directors was elected. The Company's shareholders
also authorized the Board of Directors to select an independent certified
public accounting firm to audit the Company's financial statements for 1995.
No other matters were acted upon at the shareholders'meeting.
ITEM 5 OTHER INFORMATION
None
ITEM 6 EXHIBITS AND REPORTS ON FORM 8-K
None
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TSI INC.
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: October 30, 1995 s/C. Swofford
C. Swofford
Assistant Secretary-Treasurer
Date: October 30, 1995 s/Jerry K. Mohland
Jerry K.Mohland,
Accountant
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