<PAGE>
 
                       SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C.  20549


                                   FORM 10-Q

                  QUARTERLY REPORT UNDER SECTION 13 OR 15 (D)
                     OF THE SECURITIES EXCHANGE ACT OF 1934


For Quarter Ended SEPTEMBER 30,1997    Commission File No. 0-8488
                  -----------------                        ------




                             TWENTY SERVICES, INC.
                             ---------------------
             (Exact name of Registrant as specified in its Charter)

          ALABAMA                               63-0372577
------------------------------------------------------------------
(State or other jurisdiction of         (I.R.S. Employer I.D. No.)
incorporation or organization)

105 Vulcan Road                                        35209
------------------------------------------------------------------
(Address or principal executive offices)             (Zip Code)


Registrant's telephone number, including area code  (205) 945-l58l
                                                    --------------



--------------------------------------------------------------------------------
Former name, former address, and former fiscal year, if changed
since last report.


     Indicate by check mark whether the Registrant (l) has
     filed all reports required to be filed by Section l3
     or l5 (d) of the Securities Exchange Act of 1934 during
     the preceding l2 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 ninety (90) days.

     YES  x                     NO
        -----                     -----

     Indicate the number of shares outstanding of each of the
     issuer's classes of common stock, as of the period of this
     report.

     Par Value $0.l0 per share     l,283,068 shares
<PAGE>
 
                             TWENTY SERVICES, INC.



                                     INDEX



Twenty Services, Inc. Financial Statements
                      (Unaudited)

     Condensed Balance Sheets
        September 30, 1997 and December 3l, 1996                 3


     Condensed Statements of Operations
          Three Months ended September 30, 1997 and 1996         
          and Nine Months ended September 30, 1997 and 1996      4
 
     Condensed Statements of Cash Flows
        Nine Months Ended September 30, 1997 and 1996            5


Management's Discussion and Analysis of Financial Condition
        and Results of Operations                               6-7

Other Information                                                8


Signatures                                                       9

                                       2
<PAGE>
 
                             TWENTY SERVICES, INC.

                          CONSOLIDATED BALANCE SHEETS

                                  (Unaudited)


<TABLE> 
<CAPTION> 
                                                        September 30,  December 31,
                                                             1997          1996
                                                        -------------  ------------
<S>                                                        <C>          <C>
                              Assets 
Cash and temporary investments                             $  379,736   $   95,438
Marketable Securities                                       1,656,176    1,597,040
Investment-American Equity
  Investment Life Holding Company                             713,700      713,700
Finance receivables, net                                       61,209      248,750
Notes Receivable-Related Parties, net                         245,652      263,148
Property and equipment, net                                    34,310       38,310
Other assets                                                   73,990      154,186
                                                           ----------   ----------
 
Total assets                                               $3,164,773   $3,110,572
                                                           ==========   ==========
 
                   LIABILITIES AND STOCKHOLDERS' EQUITY
 
Liabilities:
 Accounts payable and accrued expenses                     $   38,102   $   20,211
 Income taxes payable                                          22,300       25,000
                                                           ----------   ----------
     Total liabilities                                         60,402       45,211
                                                           ----------   ----------
 
Stockholders' equity:
 Preferred stock, Cumulative, $.l0
  par value                                                    49,939       50,511 
 Common Stock, par value $.l0                                 128,307      128,307
 Additional paid-in capital                                 1,716,074    1,716,074
 Retained earnings                                          1,209,528    1,169,946
 Net unrealized gain on
  available-for sale securities                                60,523       60,523
 Less investment in Twenty Services
  Holding, Inc.                                               (60,000)     (60,000)
                                                           ----------   ----------
     Net stockholders' equity                               3,104,371    3,065,361
                                                           ----------   ----------
 
Total Liabilities and
     Stockholders' Equity                                  $3,164,773   $3,110,572
                                                           ==========   ==========
 
</TABLE>

                                       3
<PAGE>
 
                             TWENTY SERVICES, INC.

                       CONDENSED STATEMENT OF OPERATIONS

                                  (Unaudited)
<TABLE> 
<CAPTION> 

                                                     Three Months Ending      Nine Months Ending
                                                        September 30,           September 30,
                                                    ----------------------   --------------------
                                                       1997         1996        1997       1996
                                                    ----------   ---------   ---------  ---------  
<S>                                                 <C>          <C>          <C>        <C>
Revenues                                            $   50,021   $  50,050    $143,588   $128,266
                                                                 
Expenses:                                                        
 General and                                                     
  Administrative                                        31,148      29,099     115,681    107,467
                                                    ----------   ---------   ---------  ---------  
Income from                                                      
 operations                                             18,873      20,951      27,907     20,799
                                                                 
                                                                 
Other income:                                                    
  Recovery of                                                    
   previously reserved                                           
   Note receivable, net                                110,000           -     110,000          -
  Gain (loss) on disposal                                        
   of property                                                   
     and investments                                   (30,515)                (30,515)    2l,142
                                                    ----------   ---------   ---------  ---------  
 
Income before
 income tax                                             98,358      20,95l     107,392     4l,941
 
Provision for income taxes                             (32,150)          -     (33,950)    (5,000)
                                                    ----------   ---------   ---------  ---------  

Net income                                              66,208      20,951      73,442     36,94l
                                                    ==========   =========   =========  =========  
Weighted average number of
 common shares outstanding                           1,283,068   1,283,068   1,283,068  1,283,068
                                                    ==========   =========   =========  ========= 
 
Earnings per share*
 Net income (loss)                                  $      .02   $    (.0l)  $     .02  $     .00
                                                    ==========   =========   =========  ========= 
</TABLE>
     *  After giving effect on a pro-rata basis to anticipated
        preferred dividends of $.07 per share per annum on
        505,ll0 shares.

                                       4
<PAGE>
 
                             TWENTY SERVICES, INC.

                       CONDENSED STATEMENT OF CASH FLOWS

                                  (Unaudited)
<TABLE>
<CAPTION>
                                                      Nine Months Ended
                                                         September 30,
                                                -----------------------------
                                                   1997              1996
                                                ---------         -----------
<S>                                             <C>                <C>
Cash flows from operating activities:
     Interest and dividends received             $114,211           $113,889
     Rental income                                  9,483              3,264
     Cash paid employees and suppliers           (100,009)          (l02,796)
                                                ---------          ---------
       Net cash provided by (used by)
          operating activities                     23,685             14,357
                                                ---------          ---------
 
Cash flows from investing activities:
     Principal collected on loans                 439,340            581,758
     Loans made to customers                     ( 97,993)          (476,354)
     Purchase of securities                      (374,489)          (254,503)
     Proceeds from sale of assets
          and securities                          324,518            191,578
     Principal collected on held-to-maturity
          securities                                4,595              1,550
 
     Equipment                                          -            (24,498)
                                                ---------          ---------
       Net cash provided by
        investing activities                      295,971             19,531
                                                ---------          ---------
 
Cash flows from financing activities:
     Preferred stock dividends                    (35,358)           (35,358)
                                                ---------          ---------

     Net cash used by financing activities        (35,358)           (35,358)
                                                ---------          ---------

Net increase (decrease) in cash                   284,298             (l,470)

Cash and temporary investments,
     beginning of period                           95,438             4l,379
                                                ---------          ---------
 
Cash and temporary investments,
     end of period                              $ 379,736          $  39,909
                                                =========          =========
</TABLE> 

                                       5
<PAGE>
 
                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

                        LIQUIDITY AND CAPITAL RESOURCES
                        -------------------------------

     During the nine months ended September 30, 1997, the Registrant's liquidity
increased primarily as a result of the collection of loans. The Company has no
notes payable nor long term debt and does not anticipate the need for borrowing
in the near future.  The Registrant has sufficient cash and temporary cash
investments to meet its short term liquidity needs.  Should long term liquidity
needs exceed cash and temporary cash investments, then the Registrant would
dispose of marketable securities as it deems appropriate.  Current trends and
known demands and commitments do not create a need for liquidity in excess of
the Company's current abilities to generate liquidity.

     The Company anticipates that its operating activities will continue to use
net cash flows, that its investing activities will generate positive net cash
flows and that its financing activities will continue to use cash flows.

     During the third quarter of 1997, the Registrant concentrated upon (i)
collecting its loans, including those considered in determining the allowance
for loan losses and (ii) the selective extension of credit to customers and
investment of excess cash at rates commensurate with risk assumed.  In addition,
the Registrant selected investments based on maximizing its return on those
investments commensurate with the risk assumed.

                             RESULTS OF OPERATIONS
                             ---------------------

       COMPARISON OF THE THREE (3) MONTHS PERIOD ENDED SEPTEMBER 30, 1997
                   WITH THE CORRESPONDING PERIOD OF 1996

     The Registrant reported net income of $66,208 for the three (3) months
ended September 30, 1997 as compared to net income of $20,951 for the
corresponding 1996 period.  The increase was due to the recovery of a previously
reserved note receivable of $l10,000, net, less a loss of $30,515 on the
disposal of various property and other assets.

 

                                       6
<PAGE>
 
 EXPENSES
 --------

     General and administrative expenses remained level for the two periods.


          COMPARISON OF THE NINE (9) MONTHS PERIOD SEPTEMBER 30, 1997
                    WITH THE CORRESPONDING PERIOD OF 1996


 
REVENUES
--------

     During the nine (9) months period ended September 30, 1997, revenues
increased by approximately $15,300, or 12% as compared to the corresponding
period of 1996.

     The nine (9) months period ended September 30, 1997 included a net gain on
recovery of a previously reserved note receivable in the amount of $110,000 less
net losses of $30,515 on the disposal of various property and other assets.  The
corresponding period for 1996 included a gain on sale of marketable securities
in the amount of $2l,l42.

EXPENSES
--------

     During the nine (9) months period ended September 30, 1997, expenses
increased by approximately $5,600, or 5% as compared to the corresponding period
of 1996.  Normal increases in costs due to inflation were the primary
contributing factors.

--------------------------------------------------------------------------------



The above financial statements include all the adjustments which, in the opinion
of Management, are necessary for a fair presentation of such financial
information in conformity with generally accepted accounting principles.  All
adjustments are of a normal, recurring nature.

                                       7
<PAGE>
 
                                    PART II


                               OTHER INFORMATION



Item l.   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.

 

                                       8
<PAGE>
 
                             TWENTY SERVICES, INC.

                                   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.



                             TWENTY SERVICES, INC.
                             ---------------------
                                  (Registrant)



October 31, 1997                         /s/ Jack C. Bridges
--------------------                     --------------------------------
Date                                     Jack C. Bridges
                                         Executive Vice-President
 

                                       9