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: May 31, 2002
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from ____________ to ____________
Commission File Number 0-18250
TMS, Inc.
(Exact name of small business issuer as specified in its charter)
OKLAHOMA 91-1098155
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
206 West Sixth Street
Post Office Box 1358
Stillwater, Oklahoma 74076
(Address of principal executive offices)
(405) 377-0880
(Issuer's telephone number)
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:
Title of Each Class Outstanding at June 30, 2002
Common stock, par value $.05 per share 13,112,659
Transitional Small Business Disclosure Format (check one):
Yes [] No [X]
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
TMS, Inc.
Condensed Balance Sheets
May 31, 2002 and August 31, 2001
May 31,
2002 August 31,
(unaudited) 2001*
----------- ----------
Cash $ 98,885 $ 669,287
Trade accounts receivable, net 789,381 1,007,839
Contract service work in process - 6,300
Other current assets 141,564 149,833
----------- -----------
Total current assets 1,029,830 1,833,259
----------- -----------
Property and equipment 2,521,359 2,571,501
Accumulated depreciation and amortization (1,640,736) (1,608,480)
------------ -----------
Net property and equipment 880,623 963,021
----------- -----------
Capitalized software development costs, net 770,775 709,384
Other assets 485,831 476,006
----------- -----------
Total assets $ 3,167,059 $ 3,981,670
=========== ===========
Current installments of long-term debt 28,564 27,016
Accounts payable 160,977 231,311
Deferred revenue 213,911 280,995
Other current liabilities 180,989 264,382
----------- -----------
Total current liabilities 584,441 803,704
Long-term debt, net of current installments 205,719 227,376
----------- -----------
Total liabilities 790,160 1,031,080
----------- -----------
Common stock 655,583 655,133
Additional paid-in capital 11,348,822 11,347,872
Accumulated deficit (9,627,506) (9,040,887)
Treasury stock - (11,528)
----------- -----------
Total shareholders' equity 2,376,899 2,950,590
----------- -----------
Total liabilities and shareholders' equity $3,167,059 $ 3,981,670
============ ===========
*Condensed from audited financial statements.
See accompanying notes to condensed
financial statements.
2
TMS, Inc.
Condensed Statements of Operations(unaudited)
Three and Nine Months Ended May 31,
2002 and 2001
Three Months Ended Nine Months Ended
May 31, May 31, May 31, May 31,
2002 2001 2002 2001
----- ----- ----- -----
Revenue:
Licensing and royalties $ 468,511 $ 684,961 $ 1,594,410 $ 2,213,979
Customer support and maintenance 135,606 79,820 375,675 242,972
Other services 10,683 51,224 14,506 210,467
------------ ------------ ------------ ------------
614,800 816,005 1,984,591 2,667,418
------------ ------------ ------------ ------------
Operating costs and expenses:
Cost of revenue 130,428 113,831 427,542 361,273
Selling, general and administrative 492,393 684,620 1,532,268 1,868,345
Research and development 144,905 235,354 596,966 663,808
------------ ------------ ------------ ------------
767,726 1,033,805 2,556,776 2,893,426
------------ ------------ ------------ ------------
Operating loss (152,926) (217,800) (572,185) (226,008)
Other income (expense), net 1,778 6,178 (7,819) 35,597
------------ ------------ ------------ ------------
Loss before income taxes (151,148) (211,622) (580,004) (190,411)
------------ ------------ ------------ ------------
Income tax expense (benefit) - - - -
------------ ------------ ------------ ------------
Net loss $ (151,148) $ (211,622) $ (580,004) $ (190,411)
============ ============ ============ ============
Basic loss per share $ (0.01) $ (0.02) $ (0.04) $ (0.01)
============ ============ ============ ============
Weighted average common shares 13,109,659 13,004,267 13,101,649 13,090,881
============ ============ ============ ============
Diluted loss per share $ (0.01) $ (0.02) $ (0.04) $ (0.01)
============ ============ ============ ============
Weighted average common and common
equivalent shares 13,109,659 13,004,267 13,101,649 13,090,881
============ ============ ============ ============
See accompanying notes to condensed
Financial statements.
3
TMS, Inc.
Condensed Statements of Cash Flows (unaudited)
Nine Months Ended May 31, 2002 and 2001
May 31, May 31,
2002 2001
----- -----
Net cash flows used in
Operating activities $ (181,349) $ (44,035)
----------- -----------
Cash flows from investing activities:
Purchases of property and equipment (26,086) (52,030)
Capitalized software development costs (347,771) (448,190)
Proceeds from sale of equipment - 3,170
Patent costs - (10,570)
----------- -----------
Net cash used in investing activities (373,857) (507,620)
----------- -----------
Cash flows from financing activities:
Repayments of long-term debt (20,109) (21,583)
Repayments of capital lease obligation - (14,413)
Sale of treasury stock, at cost 4,913 24,364
Purchase of treasury stock, at cost - (100,000)
----------- -----------
Net cash used in financing activities (15,196) (111,632)
----------- -----------
Net decrease in cash (570,402) (663,287)
Cash at beginning of period 669,287 1,359,692
----------- -----------
Cash at end of period $ 98,885 $ 696,405
============ ===========
See accompanying notes to condensed
financial statements.
TMS, Inc.
Notes to Condensed Financial Statements (unaudited)
Unaudited Interim Condensed Financial Statements
- ------------------------------------------------
The unaudited interim condensed financial statements and related notes were
prepared by TMS, Inc. Certain information and disclosures normally included in
financial statements prepared in accordance with accounting principles generally
accepted in the United States of America have been condensed or omitted pursuant
to rules and regulations established by the Securities and Exchange Commission.
The accompanying unaudited interim condensed financial statements should be read
in conjunction with the audited financial statements and related notes included
in our Form 10-KSB Annual Report for the fiscal year ended August 31, 2001.
The unaudited interim financial statements reflect all adjustments that are, in
the opinion of management, necessary for a fair presentation of financial
position, results of operations and cash flows for the interim periods
presented. All adjustments are normal and recurring.
Interim results are subject to year-end adjustments and audit by independent
auditors. The financial data for the interim periods may not necessarily be
indicative of the results expected for the year.
4
Net Loss Per Share
- ------------------
Following is a reconciliation of the numerators and the denominators of the
basic and diluted per-share computations:
Three Months Ended May 31, 2002 Three Months Ended May 31, 2001
----------------------------------- ------------------------------------
Loss Shares Per-Share Loss Shares Per-Share
(Numerator) (Denominator) Amount (Numerator) (Denominator) Amount
----------- ------------- --------- ----------- ------------ ---------
Basic EPS:
Net Loss $(151,148) 13,109,659 $(0.01) $(211,622) 13,004,267 $(0.02)
Effect of Common
Stock options - -
------------- ------------- --------- ---------- ------------ ---------
Diluted EPS:
Net Loss $(151,148) 13,109,659 $(0.01) $(211,622) 13,004,267 $(0.02)
============ ============= ========= =========== ============= =========
Nine Months Ended May 31, 2002 Nine Months Ended May 31, 2001
----------------------------------- ------------------------------------
Income Shares Per-Share Loss Shares Per-Share
(Numerator) (Denominator) Amount (Numerator) (Denominator) Amount
----------- ------------- --------- ----------- ------------ ---------
Basic EPS:
Net Loss $(580,004) 13,101,649 $(0.04) $(190,411) 13,090,881 $(0.01)
Effect of Common
Stock options - -
------------- ------------- --------- ----------- ------------ ---------
Diluted EPS:
Net Loss $(580,004) 13,101,649 $(0.04) $(190,411) 13,090,881 $(0.01)
============= ============= ========= =========== ============= =========
Options to purchase approximately 628,000 shares and 678,000 shares of common
stock at prices ranging from $.27 to $.40 per share were outstanding at May 31,
2002 and 2001, respectively, but were not included in the computation of diluted
net loss per share because the options' exercise prices were greater than the
average market price of common shares. Additionally, approximately 54,000
options to purchase common stock at prices ranging from $.125 to $.1875 were
excluded from the computation of diluted loss per share for the three and nine
months ended May 31, 2002, because of their anti-dilutive effect. Approximately
682,000 and 737,000 options to purchase shares of common stock were outstanding
at May 31, 2002 and 2001, respectively. All options expire during periods
through the year 2008.
5
Reclassifications
- -----------------
Certain fiscal 2001 amounts have been reclassified to conform to the fiscal 2002
financial statement presentation.
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
RESULTS OF OPERATIONS
This Quarterly Report on Form 10-QSB contains forward-looking statements within
the meaning of Section 27A of the Securities Act and Section 21E of the Exchange
Act. Our actual results could differ materially from those set forth in the
forward-looking statements because of certain risks and uncertainties, such as
those inherent generally in the computer software industry and the impact of
competition, pricing and changing market conditions. As a result, you should not
rely on these forward-looking statements.
Following is selected financial information for each of our reportable segments
for the three- and nine-months ended May 31, 2002 and 2001. All revenue and
expenses are from non-affiliated sources.
Component Product Technologies
- ------------------------------------------------------
Three Months Ended Nine Months Ended
May 31, May 31, May 31, May 31,
2002 2001 2002 2001
---- ---- ---- ----
Revenue from external customers $595,324 $575,595 $1,934,586 $2,256,316
------------ ------------ ------------ -----------
Operating income (loss) $55,829 $(144,236) $ 254,274 $ 389,828
------------ ------------ ------------ -----------
6
Revenue from the component product technologies segment is primarily derived
from licensing, royalties, and the customer support and maintenance of our
Prizm(R) plug-in, ScanFix(R), Prizm(R) color image processing, ViewDirector(TM)
and FormFix(R) products. Revenue for this segment for the three months ended
May 31, 2002 was $595,324 compared to $575,595 for the same period last year, an
increase of $19,729, or 3%. For the nine months ended May 31, 2002 revenue for
this segment was $1,934,586 compared to $2,256,316 for the same period last
year, a decrease of $321,730, or 14%.
With the exception of the Prizm color product, which was not released for sale
until the second quarter of fiscal year 2001, the nine-month decline in
component product revenue occurred across all product lines. This decline was in
large part attributable to the delay, during the first quarter of the current
fiscal year, by several of our customers in closing the purchase of certain
licenses or reducing the number of licenses purchased, both of which we believe
to be indirect results of the events of September 11, 2001 and the general
uncertainty of the national economy. Partially offsetting the decline in
licensing revenue was an approximate $115,000, or 50%, increase in customer
support and maintenance revenue for the nine-month period ended May 31, 2002
compared to the same nine-month period last year. The increase in customer
support and maintenance revenue resulted from a change in company policy in
fiscal 2001, which requires that customers purchase support and maintenance as
part of the standard licensing arrangement for certain products. For the three-
months ended May 31, 2002, customer support and maintenance increased by
approximately $47,000, or 59%, compared to the same period last year.
Although our sales and monthly revenue totals have improved since the events of
September 11, 2001, we continue to experience longer sales cycles and many
customers continue to purchase licenses in smaller quantities. We also believe
that revenue for this segment has been impacted by the early market status of
our new Prizm color image processing toolkit. Although we have sold multiple
copies of our Prizm color toolkit since its release last year, timing more
widespread adoption rates in the emerging market for color-based document
management solutions is difficult.
Operating income for the segment was 9% for the three months ended May 31, 2002
compared to operating loss of 25% for the same period last year. Based on our
belief that sales would continue to be depressed as a result of the reaction to
the events of September 11, 2001, we implemented a company-wide plan near the
end of the first quarter to eliminate a portion of our workforce to reduce
certain of our ongoing fixed expenses. The improved operating margins for the
third quarter are partially related to the reduced personnel and associated
overhead expenses that resulted from the workforce reduction. Additionally,
variable sales and marketing costs decreased by approximately $54,000, or 22%,
compared to the third quarter last year and service fees associated with an
arbitration proceeding (see "Legal Proceedings" below) and new personnel
recruitment were down by approximately $83,000, or 86%.
For the nine-month periods ended May 31, 2002 and 2001, operating income for the
segment was 13% and 17% respectively. The decline in operating margins over the
prior year nine-month period is almost entirely attributable to our fiscal first
quarter revenue decline. Partially offsetting the revenue decline was lower
personnel and related overhead expenses that resulted after the implementation
of a workforce reduction near the end of our current fiscal year first quarter.
Additionally, the lower margins were also partially offset by variable sales and
marketing costs that decreased by approximately $123,000, or 31%, compared to
the same nine-month period last year and service fees associated with an
arbitration proceeding (see "Legal Proceedings" below) and new personnel
recruitment were down by approximately $162,000, or 92%.
The profitability of this segment depends on our ability to secure significant
sales of multiple licenses to individual customers. During the third quarter of
fiscal year 2002, one customer accounted for approximately 13% of the total
revenue for the segment and in the third quarter of fiscal year 2001 no one
customer accounted for more than 10%. No one customer accounted for more than
10% of segment revenue for the nine-month periods ended May 31, 2002 and 2001.
7
Assessment Scoring Technologies
- --------------------------------
Three Months Ended Nine Months Ended
May 31, May 31, May 31, May 31,
2002 2001 2002 2001
---- ---- ---- ----
Revenue from external customers $ 10,683 $ 189,186 $ 20,506 $ 195,386
------------ ------------ ------------ -----------
Operating loss $ (186,431) $ (38,858) $ (670,632) $(435,374)
------------ ------------ ------------ -----------
This segment includes costs associated with the continued development and
marketing of our Virtual Scoring Center(TM) web-based assessment scoring system
and our Digital Mark Recognition(TM) technology that are designed to target and
take advantage of the expected growth in the market for scoring K-12 tests. The
initial version of the Virtual Scoring Center was created for a specific
customer and was installed during the third quarter of the prior fiscal year.
The $178,503 and $174,880 decline in revenue for the three and nine-month
periods ended May 31, 2002, respectively, is almost entirely related to the
license fee associated with the installation of the Virtual Scoring Center for
our initial customer during the prior fiscal year. We are in the process of
creating a commercial version of the Virtual Scoring Center that will include
integration of our Digital Mark Recognition technology as an optional feature.
We expect to release the commercial product during the fourth quarter of fiscal
2002.
During the second quarter ended February 28, 2002, we signed a letter of intent
with Measurement Incorporated, a large provider of assessment scoring services,
to create a Limited Liability Company, which would own the Virtual Scoring
Center web-based assessment scoring system. Ownership of the Digital Mark
Recognition technology would remain with TMS. Under the agreement, TMS and
Measurement Incorporated would be equal partners in the Limited Liability
Company and software development and other costs would be shared equally. Each
partner would also be required to remit license fees to the Limited Liability
Company for the sale or use of the Virtual Scoring Center system, and cash flows
would be distributed to each partner in proportion to their respective
contributions. As part of the letter of intent, Measurement Incorporated was
required to begin paying for a portion of the Virtual Scoring Center development
costs on a non-refundable basis. For the nine-month period ended May 31, 2002,
we accrued or received approximately $98,000 from Measurement Incorporated for a
portion of our development costs, of which approximately $78,000 was applied as
an offset to capitalized software and approximately $20,000 was recorded as a
credit against research and development expense. We are actively working on
finalizing the definitive agreement, which we expect to finalize during the
fourth quarter of the current fiscal year.
The increase in the three and nine-month segment operating losses over the same
periods in fiscal 2001 was primarily attributable to the decrease in revenue
during the third quarter of the current fiscal year, one-time costs related to
severance payments made as part of the total company workforce reduction that
occurred during the first quarter of the current fiscal year, professional fees
associated with the prospective Limited Liability Company, and software
amortization expense that began as a result of the first release of the Virtual
Scoring Center web-based assessment scoring system in the latter part of fiscal
2001.
Other Services
- ---------------------
Three Months Ended Nine Months Ended
May 31, May 31, May 31, May 31,
2002 2001 2002 2001
---- ---- ---- ----
Revenue from external customers $ 8,793 $ 51,224 $ 29,499 $ 215,716
----------- ----------- ----------- -----------
Operating income $ 8,022 $ 22,973 $ 25,432 $ 77,841
----------- ----------- ----------- -----------
The "Other Services" segment includes combined financial results for the winding
down of operational activities related to the Professional Services and Document
Conversion Services segments. Early in fiscal year 2000, we decided to
transition out of these service activities. Approximately 84% and 76% of the
prior year third quarter and nine-month revenue, respectively, resulted from
document conversion service contracts. We completed our final document
conversion service activities during fiscal 2001, thus no revenue or expenses
are included in the third quarter or first nine months of fiscal year 2002. The
remaining revenue and operating income in the third quarters and nine-month
periods of both fiscal year 2002 and fiscal year 2001 relates to one
professional service customer support and maintenance contract. It is possible
that the customer support and maintenance contract may renew for another year
upon its expiration during the fourth quarter of fiscal year 2002.
8
Total Company Operating Results
- -------------------------------
Following is a report of total company revenue and a reconciliation of
reportable segments' operating (loss) income to our total net loss
for the three- and nine-month periods ending May 31, 2002 and 2001.
Three Months Ended Nine Months Ended
May 31, May 31, May 31, May 31,
2002 2001 2002 2001
---- ---- ---- ----
Total company revenue $ 614,800 $ 816,005 $ 1,984,591 $2,667,418
----------- ----------- ----------- ------------
Operating (loss) income for
Reportable segments (122,580) (160,121) (390,926) 32,295
Unallocated corporate expenses (30,346) (57,679) (181,259) (258,303)
Interest income 5,867 10,815 12,893 44,206
Interest expense (4,501) (3,767) (13,732) (11,963)
Other, net 412 (870) (6,980) 3,354
------------ ------------ ------------ ------------
Net loss $ (151,148) $ (211,622) $ (580,004) $ (190,411)
=========== =========== =========== ============
Loss per share:
Basic $ (0.01) $ (0.02) $ (0.04) $ (0.01)
Diluted $ (0.01) $ (0.02) $ (0.04) $ (0.01)
=========== =========== =========== ============
9
Total revenue for the three months ended May 31, 2002 was $614,800 compared to
$816,005 for the same quarter of fiscal 2001, a decrease of $201,205, or 25%.
The decrease was almost entirely attributable an $189,000 license fee associated
with the installation of our Virtual Scoring Center software product at one
customer location during the prior year third quarter.
Total revenue for the nine months ended May 31, 2002 was $1,984,591 compared to
$2,667,418 for the same quarter of fiscal year 2001, a decrease of $682,827 or
26%. The decline in total company revenue for the nine month comparative periods
is attributable to several of our component product customers delaying the close
of licensing contracts or reducing the number of licenses purchased during the
first quarter of the current year, which we believe were the indirect result of
the events of September 11, 2001 and the general uncertainty of the national
economy, a $189,000 Virtual Scoring Center license fee associated with a prior
year third quarter customized installation of the product, and no revenue from
Document Conversion Services during the current year as a result of the complete
winding down of that operation in August of 2001.
Our net loss for the three months ended May 31, 2002 was $151,148 or $0.01 per
share (basic and diluted), compared to a net loss of $211,622 or $0.02 per share
(basic and diluted) for the same quarter of fiscal 2001. The decline in our net
loss is attributable to lower personnel and related overhead expenses that
resulted from a workforce reduction that we implemented near the end of the
first quarter of the current fiscal year. Additionally, we have reduced our
variable sales and marketing expenses and have incurred lower service fees
associated with our ongoing arbitration proceeding (see "Legal Proceedings") and
lower fees associated with new personnel recruitment compared to the same three
month period last year.
Our net loss for the nine months ended May 31, 2002 was $580,004 or $0.04 loss
per share (basic and diluted), compared to net loss of $190,411 or $0.01 loss
per share (basic and diluted) for the same period in fiscal 2001. The declines
in component product and assessment scoring technology revenue, as described
above, had the most significant impact on the decline in our current nine-month
results when compared to the same period last year. The decline in revenue was
partially offset by lower personnel and related overhead costs associated with
the workforce reduction that was implemented near the end of the first quarter
of the current year, a decrease in variable sales and marketing costs and lower
service fees associated with our ongoing arbitration proceeding (see "Legal
Proceedings") and new personnel recruitment compared to the same nine-month
period last year.
Deferred Income Taxes
- ---------------------
Deferred tax assets are recognized when it is more likely than not that benefits
from deferred tax assets will be realized. We have recognized a net deferred tax
asset of $484,500 as of May 31, 2002. The ultimate realization of this deferred
tax asset is dependent upon our ability to generate future taxable income during
the periods in which those temporary differences become deductible. Management
considered the scheduled reversal of deferred tax liabilities, projected future
taxable income, past earnings history, sales backlog, and net operating loss and
tax credit carryforward expiration dates in determining the amount of deferred
tax asset to recognize. In order to fully realize the deferred tax asset, we
must generate future taxable income of approximately $1,275,000 prior to the
expiration of the net operating loss and tax credit carryforwards. The valuation
allowance for the related deferred tax assets may be increased in future periods
if we cannot generate sufficient taxable income to recover the net deferred tax
asset.
10
FINANCIAL CONDITION
Working capital at May 31, 2002 was $445,389 with a current ratio of 1.8:1,
compared to $1,029,555 with a current ratio of 2.3:1 at August 31, 2001. The
declines in working capital and current ratio are primarily due to the
approximate $570,000 decrease in cash and $218,000 decrease in trade accounts
receivable from August 31, 2001 to May 31, 2002, as explained below.
Net cash used in operations for the nine months ended May 31, 2002 was $181,349
compared to $44,035 for the same period of 2001. We paid $97,421 in employee
severance and unpaid vacation at the time of the company-wide workforce
reduction and $144,408 in payments have been made throughout the first nine
months for legal fees associated with the arbitration proceedings. Operating
cash flow has also been negatively impacted by our operating loss position,
which primarily resulted from the downturn in revenue during the year. Net cash
used in investing activities for the nine months ended May 31, 2002 approximates
$374,000 the majority of which represents our investment in new and enhanced
software products. Net cash used in financing activities was approximately
$15,000 for the first nine months of fiscal 2002.
During the first quarter of fiscal 2002 we secured a line of credit with a bank
that provides for maximum borrowing of up to $1,000,000 and is secured by all
trade accounts receivable. There was no balance outstanding against the line of
credit at May 31, 2002. We anticipate that operating cash flows and the line
of credit will be adequate to meet our current obligations and current operating
and capital requirements. The funding of long-term needs (including funding for
increased product development, expanded marketing and promotion of our products,
and for potential merger/acquisition activities) is dependent upon increased
revenue and profitability and obtaining funds through outside debt and equity
sources.
PART II - Other Information
Item 1. Legal Proceedings
On September 12, 2000 we filed an arbitration claim with the American
Arbitration Association against Hummingbird USA, Inc. for failing to comply with
royalty reporting and payment obligations as outlined in our valued added
reseller agreement. We were seeking a one-time royalty payment of $440,000 plus
interest and legal fees. On August 31, 2001, the American Arbitration
Association awarded us $525,800 in actual damages, $41,702 in transactional
costs, and $525,800 for Hummingbird's unfair and deceptive acts and practices.
We filed a "Motion to Confirm the Arbitration Award" in the federal court system
on September 5, 2001. Hummingbird filed a "Motion to Vacate the Arbitration
Award" in the federal court system on October 2, 2001. On May 16, 2002, a
United States District Court judge confirmed the arbitrator's award of
$566,702, including $525,000 in actual damages and $41,702 in transactional
costs, but vacated the $525,800 arbitrator's award for Hummingbird's unfair and
deceptive acts and practices. On June 6, 2002 we filed an appeal with the
Federal Circuit Court of Appeals for reinstatement of the $525,800 vacated
portion of the arbitrator's award. Hummingbird USA, Inc. filed a cross appeal
related to this matter with the Federal Circuit Court of Appeals on June 20,
2002. A pre-argument settlement conference has been ordered for August 1, 2002.
11
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
None
(b) 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.
Registrant: TMS Inc.
Date: July 15, 2002 /s/ Deborah L. Klarfeld
---------------- ---------------------
President
Date: July 15, 2002 /s/ Deborah D. Mosier
---------------- ---------------------
Chief Financial Officer
Principal Financial and Accounting Officer
12