U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-QSB
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended: June 30, 2003
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
EXCHANGE ACT
Commission file No. 0-13167
TM CENTURY, INC.
(Name of small business issuer as specified in its charter)
Delaware 73-1220394
(State of incorporation) (IRS Employer Identification No.)
2002 Academy, Dallas, Texas 75234
(Address of principal executive offices) (Zip Code)
Issuer's telephone number: (972) 406-6800
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
--- ---
The number of issuer's shares of Common Stock outstanding as of June 30, 2003
was 2,481,193.
Transitional Small Business Disclosure Format (check one): Yes No X
--- ---
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS AND NOTES
TM Century, Inc. and Subsidiaries
Consolidated Balance Sheets
ASSETS
June 30, 2003 September 30, 2002
(Unaudited)
------------------ ------------------
CURRENT ASSETS
Cash and cash equivalents $ 725,547 $ 459,649
Short-term investments 660,038 645,452
Accounts receivable, less allowance for doubtful accounts
of $46,782 and $49,181, respectively 783,234 635,814
Inventories, net of allowance for obsolescence of $258,545
for both periods 351,651 369,779
Prepaid expenses 165,871 88,577
------------------ ------------------
TOTAL CURRENT ASSETS 2,686,341 2,199,271
PROPERTY AND EQUIPMENT 3,052,092 2,981,103
Less accumulated depreciation and amortization (2,671,298) (2,556,719)
------------------ ------------------
NET PROPERTY AND EQUIPMENT 380,794 424,384
PRODUCT DEVELOPMENT COSTS, net of accumulated amortization
of $621,017 and $502,474, respectively 411,232 403,455
COMEDY MATERIAL RIGHTS, net of accumulated amortization
of $111,600 and $93,000, respectively 12,400 31,000
OTHER ASSETS 7,000 7,560
------------------ ------------------
TOTAL ASSETS $ 3,497,767 $ 3,065,670
================== ==================
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Current portion of note payable $ 6,000 $ 12,000
Accounts payable 29,566 30,956
Accrued expenses 90,689 87,065
Deferred revenue 131,514 129,484
Customer deposits - current portion 59,645 59,645
------------------ ------------------
TOTAL CURRENT LIABILITIES 317,414 319,150
NOTE PAYABLE, less current portion -- 3,000
CUSTOMER DEPOSITS - non-current 142,658 107,170
------------------ ------------------
TOTAL LIABILITIES 460,072 429,320
STOCKHOLDERS' EQUITY
Common stock, $.01 par value; authorized 7,500,000 shares;
2,970,481 shares issued; 2,481,193 shares outstanding 29,705 29,705
Additional paid-in capital 2,275,272 2,275,272
Retained earnings 2,025,445 1,624,100
Treasury stock - at cost, 489,288 shares (1,292,727) (1,292,727)
------------------ ------------------
TOTAL STOCKHOLDERS' EQUITY 3,037,695 2,636,350
------------------ ------------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 3,497,767 $ 3,065,670
================== ==================
See notes to iinterim consolidated financial statements.
2
TM Century, Inc. and Subsidiaries
Consolidated Statements of Operations (Unaudited)
Three Months Ended June 30
2003 2002
----------- -----------
REVENUES $ 1,467,082 $ 1,352,598
Less Commissions 239,978 193,633
----------- -----------
NET REVENUES 1,227,104 1,158,965
COSTS AND EXPENSES
Production, Programming, and Technical Costs 362,723 409,835
General and Administrative 451,849 427,959
Selling Costs 199,859 203,854
Depreciation 38,607 38,441
----------- -----------
TOTAL COSTS AND EXPENSES 1,053,038 1,080,089
----------- -----------
OPERATING INCOME 174,066 78,876
OTHER INCOME
Interest income 4,429 472
Other income -- 419
----------- -----------
TOTAL OTHER INCOME 4,429 891
----------- -----------
INCOME BEFORE PROVISION FOR INCOME TAXES 178,495 79,767
INCOME TAX EXPENSE -- --
----------- -----------
NET INCOME $ 178,495 $ 79,767
=========== ===========
BASIC NET INCOME PER COMMON SHARE $ 0.07 $ 0.03
=========== ===========
DILUTED NET INCOME PER COMMON SHARE $ 0.07 $ 0.03
=========== ===========
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING, BASIC 2,481,193 2,481,193
=========== ===========
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING,
ASSUMING DILUTION 2,518,704 2,487,287
=========== ===========
See notes to iinterim consolidated financial statements.
3
TM Century, Inc. and Subsidiaries
Consolidated Statements of Operations (Unaudited)
Nine Months Ended June 30
2003 2002
----------- -----------
REVENUES $ 4,168,169 $ 3,839,749
Less Commissions 662,860 616,100
----------- -----------
NET REVENUES 3,505,309 3,223,649
COSTS AND EXPENSES
Production, Programming, and Technical Costs 1,083,411 1,217,553
General and Administrative 1,348,828 1,423,839
Selling Costs 573,675 662,635
Depreciation 114,579 112,204
----------- -----------
TOTAL COSTS AND EXPENSES 3,120,493 3,416,231
----------- -----------
OPERATING INCOME (LOSS) 384,816 (192,582)
OTHER INCOME
Interest income 16,529 15,455
Other income -- 519
----------- -----------
TOTAL OTHER INCOME 16,529 15,974
----------- -----------
INCOME (LOSS) BEFORE PROVISION FOR INCOME TAXES 401,345 (176,608)
INCOME TAX EXPENSE -- --
----------- -----------
NET INCOME (LOSS) $ 401,345 $ (176,608)
=========== ===========
BASIC NET INCOME (LOSS) PER COMMON SHARE $ 0.16 $ (0.07)
=========== ===========
DILUTED NET INCOME (LOSS) PER COMMON SHARE $ 0.16 $ (0.07)
=========== ===========
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING, BASIC 2,481,193 2,481,193
=========== ===========
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING,
ASSUMING DILUTION 2,495,800 2,481,193
=========== ===========
See notes to iinterim consolidated financial statements.
4
TM Century, Inc. and Subsidiaries
Consolidated Statements of Cash Flows (Unaudited)
For The Nine Months Ended June 30
2003 2002
-------------- --------------
OPERATING ACTIVITIES
Net income (loss) $ 401,345 $ (176,608)
Adjustments to reconcile net income (loss) to
net cash provided by (used in) operating activities
Depreciation and amortization of property and equipment 114,579 112,204
Amortization of product development costs and comedy material rights 137,143 135,552
Provision for doubtful accounts 16,500 13,000
Reduction in carrying value of inventories 4,500 --
Increase (decrease) from changes in operating assets
and liabilities:
Accounts receivable (163,920) (53,621)
Inventories 13,628 42,318
Product development costs (126,320) (123,343)
Prepaid expenses (77,294) 6,383
Other assets 560 (3,169)
Accounts payable and accrued expenses 2,234 (39,603)
Deferred revenue 2,030 (25,285)
Customer deposits 35,488 256
-------------- --------------
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES 360,473 (111,916)
INVESTING ACTIVITIES
Purchase of short-term investments (14,586) (13,164)
Purchases of property and equipment (70,989) (89,193)
-------------- --------------
NET CASH USED IN INVESTING ACTIVITIES (85,575) (102,357)
FINANCING ACTIVITIES
Principal payments on note payable (9,000) (11,556)
Acquisition of treasury stock -- (1,500)
-------------- --------------
NET CASH USED IN FINANCING ACTIVITIES (9,000) (13,056)
-------------- --------------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 265,898 (227,329)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 459,649 464,631
-------------- --------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 725,547 $ 237,302
============== ==============
See notes to iinterim consolidated financial statements.
5
TM CENTURY INC. AND SUBSIDIARIES
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2003
1. BASIS OF PRESENTATION
The interim consolidated financial statements of TM Century, Inc. (the
"Company") at June 30, 2003, and for the three and nine months ended June 30,
2003 and 2002, are unaudited and include all adjustments (consisting only of
normal recurring adjustments) which the Company considers necessary for a fair
presentation. The September 30, 2002 balance sheet was derived from the balance
sheet included in the Company's audited consolidated financial statements as
filed on Form 10-KSB for the year ended September 30, 2002.
The accompanying unaudited interim consolidated financial statements are for
interim periods and do not include all disclosures normally provided in annual
consolidated financial statements, and should be read in conjunction with the
Company's audited consolidated financial statements. The accompanying unaudited
interim consolidated financial statements for the three and nine months ended
June 30, 2003 are not necessarily indicative of the results that can be expected
for the entire fiscal year.
2. USE OF ESTIMATES
The preparation of financial statements in conformity with U.S. generally
accepted accounting principles requires management to make estimates and
assumptions that affect reported amounts of certain assets, liabilities,
revenues, and expenses. Actual results may differ from such estimates.
3. INCOME TAXES
The Company provides for income taxes under the asset and liability approach.
This method requires that deferred tax assets and liabilities be recognized for
the future tax consequences attributable to differences between the financial
statement carrying amounts of existing assets and liabilities and their
respective tax bases. Valuation allowances are established, when necessary, to
reduce deferred tax assets to the amount expected to be realized. Deferred tax
assets and liabilities are measured using enacted tax rates expected to apply to
taxable income in the years in which those temporary differences are expected to
be recovered or settled. The effect on deferred tax assets and liabilities of a
change in tax rates is recognized in income in the period that includes the
enactment date.
No income tax expense has been recorded for the period ended June 30, 2003 due
to the utilization of net operating loss carryforwards from prior periods.
4. STOCK OPTIONS
On October 1, 2002 the Company entered into a three year agreement to renew the
employment of R. David Graupner as President and Chief Executive Officer. The
agreement grants Mr. Graupner 250,000 stock options at $ .34 per share, which
vest at a rate of 40% upon grant and 20% per year thereafter through the term of
the agreement.
6
5. STOCK-BASED COMPENSATION
The Company accounts for its stock-based employee compensation plan using the
intrinsic value-based method prescribed by Accounting Principles Board Opinion
No. 25, "Accounting for Stock Issued to Employees," and related interpretations.
As such, compensation expense is recorded on the date of grant to the extent the
current market price of the underlying stock exceeds the exercise price. The
Company recorded no compensation expense associated with options issued during
the periods ended June 30, 2003 and 2002. Had the Company determined
compensation based on the fair value at the grant date for its stock options
under Statement of Financial Accounting Standards ("SFAS") No. 123, "Accounting
for Stock-Based Compensation," as amended by SFAS No. 148, net income (loss) and
net income (loss) per share would have been affected as indicated below:
Three Months Ended Nine months Ended
June 30 June 30
--------------------- ---------------------
2003 2002 2003 2002
--------- --------- --------- ---------
Net income (loss) attributable to common
stockholders as reported $ 178,495 $ 79,767 $ 401,345 $(176,608)
Add: Stock-based employee compensation
expense included in reported net income
(loss) 0 0 0 0
Deduct:Stock-based employee compensation
expense determined under fair value
based method 8,178 3,781 24,535 11,344
--------- --------- --------- ---------
Pro forma net income (loss) $ 170,317 $ 75,986 $ 376,810 $(187,952)
Net income (loss) per share
As reported $ .07 $ .03 $ .16 $ (.07)
========= ========= ========= =========
Pro forma $ .07 $ .03 $ .15 $ (.08)
========= ========= ========= =========
6. EARNINGS (LOSS) PER SHARE
Basic earnings (loss) per share are calculated based on the weighted average
number of common shares outstanding during each period. Diluted earnings per
share include common stock equivalents, if dilutive.
The following table provides a reconciliation between basic and diluted earnings
(loss) per share:
Three Months Ended Nine months Ended
June 30 June 30
------------------------- -------------------------
2003 2002 2003 2002
----------- ----------- ----------- -----------
Net Income (Loss) $ 178,495 $ 79,767 $ 401,345 $ (176,608)
Weighted Average Number of Shares Outstanding
Basic 2,481,193 2,481,193 2,481,193 2,481,193
Dilutive effect of common stock equivalents 37,511 6,094 14,607 0
----------- ----------- ----------- -----------
Diluted 2,518,704 2,487,287 2,495,800 2,481,193
Earnings (Loss) Per Share:
Basic Net Income (Loss) $ .07 $ .03 $ .16 $ (.07)
=========== =========== =========== ===========
Diluted Net Income (Loss) $ .07 $ .03 $ .16 $ (.07)
=========== =========== =========== ===========
7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
Forward-Looking Statements
- --------------------------
This Quarterly Report contains forward-looking statements about the business,
financial condition and prospects of the Company that reflect assumptions made
by management and management's beliefs based on information currently available
to it. The Company can give no assurance that the expectations indicated by such
forward-looking statements will be realized. If any of management's assumptions
should prove incorrect, or if any of the risks and uncertainties underlying such
expectations should materialize, the Company's actual results may differ
materially from those indicated by the forward-looking statements.
The key factors that are not within the Company's control and that may have a
direct bearing on operating results include, but are not limited to, continued
maturation of the domestic and international markets for compact disc
technology; acceptance by the customers of the Company's existing and any new
products and formats; the development by competitors of products using improved
or alternative technologies and the potential obsolescence of technologies used
by the Company; the continued availability of software, hardware and other
products obtained by the Company from third parties; dependence on distributors,
particularly in the international market; the retention of employees; the
success of the Company's current and future efforts to reduce operating
expenses; the effectiveness of new marketing strategies; and general economic
conditions including, but not limited to, terrorist attacks on the United States
and the effect on the economy in general and on the Company's revenue base in
particular. Additionally, the Company may not have the ability to develop new
products cost-effectively. There may be other risks and uncertainties that
management is not able to predict.
When used in this Quarterly Report, words such as "believes," "expects,"
"intends," "plans," "anticipates," "estimates" and similar expressions are
intended to identify forward-looking statements, although there may be certain
forward-looking statements not accompanied by such expressions. All
forward-looking statements are intended to be covered by the safe harbor created
by Section 21E of the Securities Exchange Act of 1934.
OVERVIEW
TM Century, Inc. (the "Company") is engaged primarily in the creation,
production, marketing, and worldwide distribution of music libraries, production
libraries, comedy services, station identification and commercials for broadcast
multimedia use.
TM Century's clients include radio and television stations; radio, television,
satellite and Internet networks; web sites and portals; the American Forces
Radio Network; advertising agencies; post production studios; cable facilities;
and a wide variety of commercial businesses.
LIQUIDITY AND CAPITAL RESOURCES
The Company relies upon current sales of music libraries and jingles sold with
terms of cash upon delivery for operating liquidity. Liquidity is also provided
by cash receipts from customers under contracts for production libraries and
weekly music service contracts having terms of one month to three years. The
Company is obligated to provide music updates throughout the contract terms for
both production library and weekly music service contracts. Sales of music
libraries, jingles, and the payments under production library and weekly music
service contracts will provide, in the opinion of management, adequate liquidity
to meet operating requirements at least through the next twelve month period.
8
The Company reported net income of approximately $401,000 in the nine-month
period ending June 30, 2003, compared to a loss of approximately $177,000 for
the same period in 2002. The Company generated operating cash flows of
approximately $360,000 for the first nine months of 2003, primarily due to the
net income for the period of approximately $401,000, supplemented by increases
in deferred revenue, accounts payable and accrued expenses and customer deposits
totaling $40,000 as well as adjustments for non-cash expenses of $273,000 offset
by changes in accounts receivable, product development costs, and prepaid
expenses totaling $368,000. In the same fiscal period of 2002 the Company used
approximately $112,000 to fund operations due to the loss for the period of
approximately $177,000, offset by adjustments for non-cash expenses of
approximately $261,000 and net changes in operating assets and liabilities of
approximately $196,000. Approximately $71,000 was spent for the purchase of
property and equipment associated with upgrades of computer and digital
recording hardware in the first nine months of fiscal 2003. Purchases of
property and equipment for the same period in fiscal 2002 totaled approximately
$89,000 and included costs related to the upgrade of production equipment.
Expenditures for product development for the nine-month period were
approximately $126,000 and $123,000 for fiscal 2003 and 2002, respectively.
Funds for operating needs, new product development and capital expenditures for
the current period were provided from operations of the Company. The Company's
expenditures for property, equipment, and development of new products are
discretionary. Product development expenditures are expected to be approximately
$170,000 in fiscal 2003. Management anticipates that cash flows from operations
and cash reserves will be sufficient to meet these capital requirements at least
through the next twelve months. The Company has no other significant commitments
for capital expenditures in fiscal 2003.
RESULTS OF OPERATIONS
Comparison of the Three-Month Periods Ended June 30, 2003 and 2002
- ------------------------------------------------------------------
The Company experienced net income of approximately $178,000 in the third fiscal
quarter of 2003, compared to net income of $80,000 in the same period of 2002.
Gross revenues increased approximately $114,000, or 8.5% in the three-month
period ended June 30, 2003 as compared to the same period for the previous year.
Total operating costs decreased from $1,080,000 in the third quarter of fiscal
2002 to $1,053,000 in 2003.
The majority of the Company's clients are businesses that depend on broadcast
advertising sales for their revenue. The serious recession in advertising
expenditures in fiscal 2002 caused most, if not all, of these businesses to
curtail or postpone spending, especially in non-essential products such as those
marketed by the Company. Positive growth trends for advertising were experienced
in the fourth fiscal quarter of 2002 and continued into the first three fiscal
quarters of 2003, however, the impact of U.S. involvement in foreign conflict
and the related affect on advertising spending continues to be a factor.
Revenue generated from cash sales and publisher's royalties in the quarter ended
June 30, 2003 decreased approximately $95,000, or 9.9% when compared to the same
period in 2002. However, barter revenue for the quarter increased $209,000, or
53.6%, which reflects the continued recovery of advertising rates for barter
service. Barter revenues are derived from obtaining airtime from radio stations
in exchange for products and marketing such airtime to advertisers.
As the compact disc music library market matures, sales of compact discs are
generated primarily from changes in music formats or sales of new music
libraries rather than from conversions to compact disc music library technology.
The market for compact disc music libraries to broadcast customers has reached a
substantial level of maturity in the United States, which is the market from
which the Company derives most of its music library revenues. However, the
advent of computer-based music storage has opened a new market to the Company;
delivering music in a form (.wav file format and MPEG format) which is more
conducive, convenient and cost efficient for operators to load onto their
computer-based broadcast systems. A decline in revenues from music library sales
may result in a proportionately greater decline in operating income because
music libraries provide higher margins than the Company's other products.
However, management believes that revenues from weekly music services will
either remain relatively unchanged or continue to grow by introducing new music
libraries to the market. Management believes the international markets have not
reached maturity for compact disc technology. Renewals and new sales growth are
subject to customer acceptance of the new products.
9
Commissions as a percentage of revenues increased to 16.4% of revenue in the
third quarter of fiscal 2003 from 14.3% of revenue for the same period in fiscal
2002. This increase is due to changes in the revenue structure where a greater
percentage of revenue was derived from advertising.
Production, programming and technical costs decreased 13.0% to $358,000 in the
third fiscal quarter of 2003 from approximately $410,000 in 2002. As a
percentage of gross revenue, costs dropped from 30.3% in fiscal 2002 to 24.4% in
2003. The decrease is the result of a combination of cost reduction methods,
primarily due to the continued effort to internalize component production.
General and administrative costs increased $24,000, or 5.6%. The increase is
primarily the result of the employment of consultants to provide additional
access to media clients, both domestically and internationally. Other factors
include the timing of other administrative expenses related to facility
maintenance and an increase in bad debt expense.
Selling costs reflected a decrease of approximately $4,000, or 2.0% for fiscal
2003 over 2002. The Company took advantage of the loss of sales personnel
through attrition by restructuring the compensation plans for new employees to
reduce fixed costs and provide more efficient coverage of the market.
Comparison of the Nine-month Periods Ended June 30, 2003 and 2002
- -----------------------------------------------------------------
The Company experienced net income of approximately $401,000 in the nine-month
period ended June 30, 2003, compared to a net loss of $177,000 in the same
period of 2002. Gross revenues increased approximately $328,000, or 8.6% while
total operating costs decreased $296,000, or 8.7%.
The majority of the Company's clients are businesses that depend on broadcast
advertising sales for their revenue. The serious recession in advertising
expenditures in fiscal 2002 caused most, if not all, of these businesses to
curtail or postpone spending, especially in non-essential products such as those
marketed by the Company. Positive growth trends for advertising were experienced
in the fourth fiscal quarter of 2002 and continued into the first three fiscal
quarters of 2003, however, the impact of U.S. involvement in foreign conflict
and the related affect on advertising spending continues to be a factor.
Revenue generated from cash sales and publisher's royalties in the nine-month
period ended June 30, 2003 decreased approximately $58,000, or 2.2% when
compared to the same period in 2002. However, barter revenue for the quarter
increased $387,000 or 31.7%, which reflects the continued recovery of
advertising rates for barter service. Barter revenues are derived from obtaining
airtime from radio stations in exchange for products and marketing such airtime
to advertisers.
As the compact disc music library market matures, sales of compact discs are
generated primarily from changes in music formats or sales of new music
libraries rather than from conversions to compact disc music library technology.
The market for compact disc music libraries to broadcast customers has reached a
substantial level of maturity in the United States, which is the market from
which the Company derives most of its music library revenues. However, the
advent of computer-based music storage has opened a new market to the Company;
delivering music in a form (.wav file format and MPEG format) that is more
conducive, convenient and cost efficient for operators to load onto their
computer-based broadcast systems. A decline in revenues from music library sales
may result in a proportionately greater decline in operating income because
music libraries provide higher margins than the Company's other products.
However, management believes that revenues from weekly music services will
either remain relatively unchanged or continue to grow by introducing new music
libraries to the market. Management believes the international markets have not
reached maturity for compact disc technology. Renewals and new sales growth are
subject to customer acceptance of the new products.
10
Commissions as a percentage of revenues decreased to 15.9% of revenue in the
first three quarters of fiscal 2003 from 16.0% of revenue for the same period in
fiscal 2002. This decrease is due to changes in the revenue structure where a
greater percentage of international revenue was derived from direct sales rather
than through third-party representatives.
Production, programming and technical costs decreased 11.4% to $1,079,000 in the
nine-month period of 2003 from $1,218,000 in 2002. The first nine months of
fiscal 2002 reflected an increase in custom jingle production compared to the
same period in fiscal 2003. Since production costs for custom jingles are higher
than those for syndicated jingles, the effect on related expenses was noticeable
in comparison. The Company also saw a decrease in shipping costs as more cost
efficient packaging and carrier selection were implemented across all product
lines.
General and administrative costs decreased approximately $75,000, or 5.3%. A
decrease of approximately $53,000 in facilities expenses occurred due to the
negotiation of a new office lease, which reduced monthly rent and the
responsibility for certain building maintenance costs. Additional reductions in
administrative costs occurred through changes in consulting relationships.
Selling costs reflected a decrease of approximately $89,000, or 13.4% for fiscal
2003 over 2002. The Company took advantage of the loss of sales personnel
through attrition by restructuring the compensation plans for new hires to
reduce fixed costs and provide more efficient coverage of the market.
Depreciation and amortization expense increased $2,300, or 2.1%, primarily as a
result of purchases to replace outdated equipment.
ITEM 3. CONTROLS AND PROCEDURES
Based on their evaluation, as of a date within 90 days of the filing date of
this Form 10-QSB, the Company's Chief Executive Officer and Chief Financial
Officer have concluded that the Company's disclosure controls and procedures (as
defined in Rule 13a-14 (c) and 15d-14 (c) under the Securities Exchange Act of
1934, as amended) are effective. There have been no significant changes in
internal controls or in other factors that could significantly affect these
controls subsequent to the date of their evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
[The remainder of this page is intentionally left blank.]
11
PART II. OTHER INFORMATION
Item 1. Legal proceedings - Not applicable.
Item 2. Changes in securities - Not applicable.
Item 3. Defaults upon senior securities - Not applicable.
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
Material Contracts:
Other:
31.1 Certification by R. David Graupner, Chief Executive Officer,
pursuant to 18 USC Section 1350, as adopted pursuant to Section
302 of the Sarbanes-Oxley Act of 2002.
31.2 Certification by Teri R.S. James, Chief Financial Officer,
pursuant to 18 USC Section 1350, as adopted pursuant to Section
302 of the Sarbanes-Oxley Act of 2002.
32.1 Certification by R. David Graupner, Chief Executive Officer, and
Teri R.S. James, Chief Financial Officer, pursuant to 18 USC
Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
b) Reports on Form 8-K - None
[The remainder of this page is intentionally left blank.]
12
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned thereunto
duly authorized.
Dated: August 13, 2003
TM CENTURY, INC.
BY: /s/Teri R.S. James
------------------------------
Teri R.S. James
Chief Financial Officer
(Principal Accounting Officer)
BY: /s/R. David Graupner
------------------------------
R. David Graupner
Chief Executive Officer
(Principal Executive Officer)
13