##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended September 30, 2008
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 For the transition period from  to
 Commission file number 0-19657
 TRM CORPORATION
  Oregon
    
    93-0809419(State or other jurisdiction of incorporation or organization)
    
    (I.R.S. Employer Identification No.)
 
  
   þ o
  Large accelerated filer oAccelerated filer oNon-accelerated filer o(Do not check if a smaller reporting company)Smaller reporting company þ  o þ




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TABLE OF CONTENTS  PART I  FINANCIAL INFORMATIONITEM 1. FINANCIAL STATEMENTSITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKITEM 4. CONTROLS AND PROCEDURESPART II  OTHER INFORMATIONITEM 6. EXHIBITSSIGNATUREExhibit 10.1Exhibit 10.2Exhibit 10.3Exhibit 10.4Exhibit 10.5Exhibit 10.6Exhibit 10.7Exhibit 10.8Exhibit 10.9Exhibit 10.10Exhibit 10.11Exhibit 31.1Exhibit 31.2Exhibit 32.1Exhibit 32.2    Table of Contents  
 PART I  FINANCIAL INFORMATION
 
 ITEM 1. FINANCIAL STATEMENTS
 TRM Corporation
Consolidated Balance Sheets
(Unaudited)
(In thousands)
 December 31,
    
    
    September 30,2007
    
    
    2008AssetsCurrent assets:Cash and cash equivalents
    
    $
    3,859
    
    
    $
    5,146Restricted cash
    
    
    3,073
    
    
    
    2,892Accounts receivable, net
    
    
    2,611
    
    
    
    3,482Leases receivable, net
    
    
    
    
    
    
    170Inventories
    
    
    50
    
    
    
    427Prepaid expenses and other
    
    
    369
    
    
    
    598Deferred financing costs
    
    
    172
    
    
    
    2,235Restricted cash  TRM Inventory Funding Trust
    
    
    61,805
    
    
    
    59,584Total current assets
    
    
    71,939
    
    
    
    74,534Property and equipment, net
    
    
    4,222
    
    
    
    3,110Non-current leases receivable, net
    
    
    
    
    
    
    719Intangible assets, net
    
    
    585
    
    
    
    2,517Goodwill
    
    
    16,748
    
    
    
    31,036Deferred financing costs, long term
    
    
    
    
    
    
    3,464Other assets
    
    
    795
    
    
    
    661Total assets
    
    $
    94,289
    
    
    $
    116,041Liabilities, Minority Interest and Shareholders EquityCurrent liabilities:Accounts payable
    
    $
    6,099
    
    
    $
    7,292Accrued and other expenses
    
    
    7,673
    
    
    
    6,773Term loans
    
    
    2,051
    
    
    
    4,027TRM Inventory Funding Trust note payable
    
    
    58,505
    
    
    
    57,518Total current liabilities
    
    
    74,328
    
    
    
    75,610Long term liabilities:Term loans and other debt
    
    
    5,301
    
    
    
    20,315Deferred tax liability, net
    
    
    
    
    
    
    917Total liabilities
    
    
    79,629
    
    
    
    96,842Minority interest
    
    
    1,500
    
    
    
    1,500Shareholders equity:Common
stock, no par value 
100,000 authorized at September 30, 2008 (50,000 at
December 31, 2007); 21,486 shares issued and outstanding
(17,213 at December 31, 2007)
    
    
    136,181
    
    
    
    145,922Additional paid-in capital
    
    
    63
    
    
    
    63Accumulated deficit
    
    
    (123,084
    )
    
    
    (128,286
    )Total shareholders equity
    
    
    13,160
    
    
    
    17,699Total liabilities, minority interest and shareholders equity
    
    $
    94,289
    
    
    $
    116,041
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TRM Corporation
Consolidated Statements of Operations
(Unaudited)
(In thousands, except per share data)
 Three months ended
    
    
    Nine months endedSeptember 30,
    
    
    September 30,2007
    
    
    2008
    
    
    2007
    
    
    2008Sales
    
    $
    23,327
    
    
    $
    25,221
    
    
    $
    69,772
    
    
    $
    67,158Less commissions
    
    
    14,990
    
    
    
    16,518
    
    
    
    44,007
    
    
    
    42,041Net sales
    
    
    8,337
    
    
    
    8,703
    
    
    
    25,765
    
    
    
    25,117Cost of sales:Cost of vault cash
    
    
    1,394
    
    
    
    988
    
    
    
    4,184
    
    
    
    2,886Other
    
    
    4,233
    
    
    
    4,261
    
    
    
    13,360
    
    
    
    12,221Gross profit
    
    
    2,710
    
    
    
    3,454
    
    
    
    8,221
    
    
    
    10,010Selling, general and administrative expense (including
non-cash stock compensation of $350 and $1,629 for the
nine-month periods ended September 30, 2007 and 2008,
respectively)
    
    
    4,712
    
    
    
    3,219
    
    
    
    14,337
    
    
    
    11,092Restructuring charges (Note 14)
    
    
    
    
    
    
    
    
    
    
    963
    
    
    
    Equipment write-offs
    
    
    1,198
    
    
    
    182
    
    
    
    1,216
    
    
    
    193Operating income (loss)
    
    
    (3,200
    )
    
    
    53
    
    
    
    (8,295
    )
    
    
    (1,275
    )Interest expense and amortization of debt issuance costs
    
    
    116
    
    
    
    1,358
    
    
    
    276
    
    
    
    2,773Loss on early extinguishment of debt
    
    
    
    
    
    
    
    
    
    
    4,059
    
    
    
    1,456Other expense (income), net
    
    
    (110
    )
    
    
    (244
    )
    
    
    240
    
    
    
    (302
    )Loss from continuing operations before benefit from
income taxes
    
    
    (3,206
    )
    
    
    (1,061
    )
    
    
    (12,870
    )
    
    
    (5,202
    )Provision for income taxes
    
    
    59
    
    
    
    
    
    
    
    59
    
    
    
    Loss from continuing operations
    
    
    (3,265
    )
    
    
    (1,061
    )
    
    
    (12,929
    )
    
    
    (5,202
    )Discontinued operations:Income (loss) from operations, including gains on sales
    
    
    (1,624
    )
    
    
    
    
    
    
    3,596
    
    
    
    Provision for income taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Income (loss) from discontinued operations
    
    
    (1,624
    )
    
    
    
    
    
    
    3,596
    
    
    
    Net loss
    
    $
    (4,889
    )
    
    $
    (1,061
    )
    
    $
    (9,333
    )
    
    $
    (5,202
    )Weighted average common shares outstanding
    
    
    17,194
    
    
    
    21,486
    
    
    
    17,166
    
    
    
    19,786Basic and diluted income (loss) per share:Continuing operations
    
    $
    (.19
    )
    
    $
    (.05
    )
    
    $
    (.75
    )
    
    $
    (.26
    )Discontinued operations
    
    
    (.09
    )
    
    
    
    
    
    
    .21
    
    
    
    Net loss
    
    $
    (.28
    )
    
    $
    (.05
    )
    
    $
    (.54
    )
    
    $
    (.26
    )
  3




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TRM Corporation
Consolidated Statement of Shareholders Equity
(Unaudited)
(In thousands)
 AdditionalCommon stock
    
    
    paid-in
    
    
    AccumulatedShares
    
    
    Amounts
    
    
    capital
    
    
    deficit
    
    
    TotalBalances, December 31, 2007
    
    
    17,213
    
    
    $
    136,181
    
    
    $
    63
    
    
    $
    (123,084
    )
    
    $
    13,160Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5,202
    )
    
    
    (5,202
    )Issuance of common stock
    
    
    3,550
    
    
    
    995
    
    
    
    
    
    
    
    
    
    
    
    995Stock option expense
    
    
    
    
    
    
    46
    
    
    
    
    
    
    
    
    
    
    
    46Restricted stock expense
    
    
    723
    
    
    
    1,583
    
    
    
    
    
    
    
    
    
    
    
    1,583Issuance of warrants in connection with new debt
    
    
    
    
    
    
    7,117
    
    
    
    
    
    
    
    
    
    
    
    7,117Balances, September 30, 2008
    
    
    21,486
    
    
    $
    145,922
    
    
    $
    63
    
    
    $
    (128,286
    )
    
    $
    17,699
  4




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TRM Corporation
Consolidated Statements of Cash Flows
Nine months ended September 30, 2007 and 2008
(Unaudited)
(In thousands)
 2007
    
    
    2008Operating activities:Net loss
    
    $
    (9,333
    )
    
    $
    (5,202
    )Adjustments to reconcile net loss to net cash used in operating activities:Impairment charges and asset write-downs
    
    
    3,591
    
    
    
    Depreciation and amortization
    
    
    2,542
    
    
    
    2,494Non-cash stock compensation
    
    
    350
    
    
    
    1,629Loss on disposal of equipment
    
    
    171
    
    
    
    193Provision for doubtful accounts
    
    
    72
    
    
    
    175Loss on early extinguishment of debt
    
    
    4,059
    
    
    
    1,374Gain on sale of discontinued operations
    
    
    (5,336
    )
    
    
    Cumulative foreign currency translation adjustments recognized in income
    
    
    (2,622
    )
    
    
    Changes in items affecting operations, net of effects of business dispositions:Restricted cash
    
    
    (4,064
    )
    
    
    181Accounts receivable
    
    
    612
    
    
    
    (1,952
    )Leases receivable
    
    
    
    
    
    
    976Inventories
    
    
    978
    
    
    
    (16
    )Income tax receivable
    
    
    101
    
    
    
    Prepaid expenses and other
    
    
    412
    
    
    
    (228
    )Accounts payable
    
    
    884
    
    
    
    2,099Accrued expenses and settlement agreement
    
    
    (182
    )
    
    
    (5,507
    )Cash used in operating activities
    
    
    (7,765
    )
    
    
    (3,770
    )Investing activities:Proceeds from sale of equipment
    
    
    52
    
    
    
    574Capital expenditures
    
    
    (41
    )
    
    
    (301
    )Proceeds from sale of discontinued operations
    
    
    103,671
    
    
    
    Acquisition of intangible and other assets
    
    
    (428
    )
    
    
    (171
    )Acquisition of business, net of cash acquired
    
    
    
    
    
    
    (4,308
    )Cash provided by (used in) investing activities
    
    
    103,254
    
    
    
    (4,206
    )Financing activities:Borrowings on notes payable
    
    
    1,289
    
    
    
    13,619Repayment of notes payable
    
    
    (98,641
    )
    
    
    (4,760
    )Debt financing costs
    
    
    
    
    
    
    (831
    )Principal payments on capital lease obligations
    
    
    (26
    )
    
    
    Decrease in restricted cash  TRM Inventory Funding Trust
    
    
    7,892
    
    
    
    2,220Proceeds of TRM Inventory Funding Trust note, net
    
    
    (9,153
    )
    
    
    (985
    )Proceeds from exercise of stock options
    
    
    25
    
    
    
    Other capital additions
    
    
    53
    
    
    
    Cash provided by (used in) financing activities
    
    
    (98,561
    )
    
    
    9,263Effect of exchange rate changes
    
    
    (1,491
    )
    
    
    Net increase (decrease) in cash and cash equivalents
    
    
    (4,563
    )
    
    
    1,287Beginning cash and cash equivalents
    
    
    8,086
    
    
    
    3,859Ending cash and cash equivalents
    
    $
    3,523
    
    
    $
    5,146Supplemental cash flow information:Non-cash transaction -Issuance of warrants in connection with new debt
    
    $
    
    
    
    $
    7,117Payments:Cash paid for interest
    
    $
    534
    
    
    $
    183Cash paid for income taxes
    
    $
    17
    
    
    $
    12Supplemental non-cash financing and investing activities disclosure:Note payable issued in the acquisition of Access To Money
    
    $
    
    
    
    $
    9,754Value of shares issued in the acquisition of Access To Money
    
    $
    
    
    
    $
    996
  5




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TRM Corporation
 Notes to Condensed Consolidated Financial Statements (Unaudited)
 1. Interim Financial Data
  2. Financial Statement Reclassifications
  3. Net Loss Per Share
  4. Leases Receivables
  6




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5. Inventories
 December 31,
    
    
    September 30,2007
    
    
    2008(in thousands)Parts
    
    $
    9
    
    
    $
    218ATMs held for resale
    
    
    41
    
    
    
    209$
    50
    
    
    $
    427
 6. Equipment
 December 31,
    
    
    September 30,2007
    
    
    2008(in thousands)ATMs
    
    $
    7,764
    
    
    $
    6,372Computer equipment
    
    
    5,200
    
    
    
    5,459Furniture and fixtures
    
    
    1,150
    
    
    
    1,175Vehicles
    
    
    
    
    
    
    4814,114
    
    
    
    13,054Accumulated depreciation
    
    
    (9,892
    )
    
    
    (9,944
    )$
    4,222
    
    
    $
    3,110
 7. Acquisition of LJR Consulting Corp.
  7




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(in thousands)Cash
    
    $
    1,048Accounts receivable
    
    
    937Inventory
    
    
    135Equipment
    
    
    132Lease receivable, net
    
    
    1,077Other assets
    
    
    587Intangible assets:Customer contracts
    
    
    1,200Distributor agreements
    
    
    225Non-contractual customer base
    
    
    250Non compete agreements
    
    
    175Trademarks
    
    
    500Goodwill
    
    
    14,288Total assets acquired
    
    
    20,554Accounts payable
    
    
    137Notes payable
    
    
    989Accrued liabilities
    
    
    2,035Other liabilities
    
    
    1,016Deferred tax liability
    
    
    917Subtotal liabilities
    
    
    5,094Total
    
    $
    15,460
  8. Notes Payable and Other Debt:
 December 31,
    
    
    September 30,2007
    
    
    2008(in thousands)Term Loan B
    
    $
    2,051
    
    
    $
    Lampe Loan Facility
    
    
    
    
    
    
    11,000Note payable to former Access To Money owner
    
    
    
    
    
    
    9,755Notemachine
    
    
    5,301
    
    
    
    2,026Other Debt
    
    
    
    
    
    
    1,562TRM Inventory Funding Trust note payable
    
    
    58,505
    
    
    
    57,518$
    65,857
    
    
    $
    81,861
 8




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New Lampe Loan Facility
     9




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Original Lampe Loan
  Notemachine Settlement Agreement
  Other Debt
  10




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Vault Cash Facility
    11




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9. Shareholders Equity
 Stock-based Compensation
  2007
    
    
    2008Option grants
    
    $
    (11
    )
    
    $
    46Restricted shares
    
    
    361
    
    
    
    1,583Total stock-based compensation expense
    
    $
    350
    
    
    $
    1,629
  Number of
    
    Weighted averageshares
    
    exercise priceOutstanding January 1, 2008
    
    
    276,625
    
    
    $
    4.62Options granted
    
    
    
    
    
    
    Options exercised
    
    
    
    
    
    
    Options forfeited
    
    
    (53,125
    )
    
    
    6.24Outstanding September 30, 2008
    
    
    223,500
    
    
    
    4.23
  12




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Weighted averageShares
    
    grant-date fair valueUnvested shares January 1, 2008
    
    
    686,393
    
    
    $
    2.80Restricted shares granted
    
    
    486,000
    
    
    
    0.28Restricted shares vested
    
    
    (722,393
    )
    
    
    2.68Restricted shares forfeited
    
    
    0
    
    
    
    Unvested shares September 30, 2008
    
    
    450,000
    
    
    
    0.28
 Common Stock Warrants
     13




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10. Provision for Income Taxes
  11. Geographic Information
  12. Discontinued Operations and Sales of Businesses
   Three months ended
    
    
    Nine months endedSeptember 30,
    
    
    September 30,2007
    
    
    2008
    
    
    2007
    
    
    2008Canada photocopy
    
    $
    
    
    
    $
    
    
    
    $
    1,102
    
    
    $
    United Kingdom photocopy
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    United States photocopy
    
    
    
    
    
    
    
    
    
    
    1,368
    
    
    
    Canada ATM
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    United Kingdom ATM
    
    
    
    
    
    
    
    
    
    
    1,653
    
    
    
    Germany ATM
    
    
    
    
    
    
    
    
    
    
    130
    
    
    
    $
    
    
    
    $
    
    
    
    $
    4,253
    
    
    $
    
 14




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Three months ended September 30,2007
    
    
    2008Gain on
    
    
    
    
    
    
    
    
    
    
    Gain onOperations
    
    
    Sale
    
    
    Total
    
    
    Operations
    
    
    sale
    
    
    TotalCanada photocopy
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    United Kingdom
photocopy
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    United States photocopy
    
    
    
    
    
    
    (268
    )
    
    
    (268
    )
    
    
    
    
    
    
    
    
    
    
    Canada ATM
    
    
    
    
    
    
    (48
    )
    
    
    (48
    )
    
    
    
    
    
    
    
    
    
    
    United Kingdom ATM
    
    
    
    
    
    
    (1,308
    )
    
    
    (1,308
    )
    
    
    
    
    
    
    
    
    
    
    Germany ATM
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    
    
    
    $
    (1,624
    )
    
    $
    (1,624
    )
    
    $
    
    
    
    $
    
    
    
    $
    
 Nine months ended September 30,2007
    
    
    2008Gain on
    
    
    
    
    
    
    
    
    
    
    Gain onOperations
    
    
    sale
    
    
    Total
    
    
    Operations
    
    
    sale
    
    
    TotalCanada photocopy
    
    $
    (2,975
    )
    
    $
    29
    
    
    $
    (2,946
    )
    
    $
    
    
    
    $
    
    
    
    $
    United Kingdom
photocopy
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    United States photocopy
    
    
    398
    
    
    
    565
    
    
    
    963
    
    
    
    
    
    
    
    
    
    
    
    Canada ATM
    
    
    (113
    )
    
    
    2,313
    
    
    
    2,200
    
    
    
    
    
    
    
    
    
    
    
    United Kingdom ATM
    
    
    (1,617
    )
    
    
    5,051
    
    
    
    3,434
    
    
    
    
    
    
    
    
    
    
    
    Germany ATM
    
    
    (55
    )
    
    
    
    
    
    
    (55
    )
    
    
    
    
    
    
    
    
    
    
    $
    (4,362
    )
    
    $
    7,958
    
    
    $
    3,596
    
    
    $
    
    
    
    $
    
    
    
    $
    
   13. Commitments and Contingent Liabilities
    15




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14. Corporate Restructuring
  15. Subsequent Event
    16




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16. New Accounting Standards
   17




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18




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ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
 Forward-Looking Statements
   Overview
  19




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Three Months Ended September 30, 2008 Compared to Three Months Ended September 30, 2007
 ATM Results of Operations  Continuing Operations
 2007
    
    
    2008Amount
    
    
    %
    
    
    Amount
    
    
    %(in thousands, except operating and percentage data)Transaction-based sales
    
    $
    21,826
    
    
    
    100.0
    %
    
    $
    22,940
    
    
    
    100.0
    %Less commissions
    
    
    14,990
    
    
    
    68.7
    
    
    
    16,518
    
    
    
    72.0Net transaction-based sales
    
    
    6,836
    
    
    
    31.3
    %
    
    
    6,422
    
    
    
    28.0
    %Service and other sales
    
    
    978
    
    
    
    
    
    
    
    1,184Sales of ATM equipment
    
    
    523
    
    
    
    
    
    
    
    1,074Branch build out
    
    
    
    
    
    
    
    
    
    
    23Net sales
    
    
    8,337
    
    
    
    
    
    
    
    8,703Cost of sales:Cost of vault cash
    
    
    1,394
    
    
    
    
    
    
    
    988Other
    
    
    4,233
    
    
    
    
    
    
    
    4,261Gross profit
    
    $
    2,710
    
    
    
    
    
    
    $
    3,454Operating data:Average number of transacting ATMs
    
    
    10,176
    
    
    
    
    
    
    
    11,813Withdrawal transactions
    
    
    9,152,248
    
    
    
    
    
    
    
    9,745,705Average withdrawals per ATM per month
    
    
    300
    
    
    
    
    
    
    
    275Average transaction-based sales per withdrawal transaction
    
    $
    2.39
    
    
    
    
    
    
    $
    2.35Average discount per withdrawal transaction
    
    $
    1.64
    
    
    
    
    
    
    $
    1.69Net transaction-based sales per withdrawal transaction
    
    $
    .75
    
    
    
    
    
    
    $
    .66
 Sales
   Commissions
  20




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Cost of Sales
    Selling, General and Administrative Expense
     21




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Interest Expense, Amortization of Debt Issuance Costs, Loss on Early Extinguishment of Debt
  Provision for Income Taxes
  Discontinued Operations
  Net Loss
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Nine Months Ended September 30, 2008 Compared to Nine Months Ended September 30, 2007
 ATM Results of Operations  Continuing Operations
 2007
    
    
    2008Amount
    
    
    %
    
    
    Amount
    
    
    %(in thousands, except operating and percentage data)Transaction-based sales
    
    $
    64,721
    
    
    
    100.0
    %
    
    $
    60,977
    
    
    
    100.0
    %Less commissions
    
    
    44,007
    
    
    
    68.0
    
    
    
    42,041
    
    
    
    69.0Net transaction-based sales
    
    
    20,714
    
    
    
    32.0
    %
    
    
    18,936
    
    
    
    31.0
    %Service and other sales
    
    
    3,349
    
    
    
    
    
    
    
    3,713Sales of ATM equipment
    
    
    1,702
    
    
    
    
    
    
    
    2,279Branch build out sales
    
    
    
    
    
    
    
    
    
    
    189Net sales
    
    
    25,765
    
    
    
    
    
    
    
    25,117Cost of sales:Cost of vault cash
    
    
    4,184
    
    
    
    
    
    
    
    2,886Other
    
    
    13,360
    
    
    
    
    
    
    
    12,221Gross profit
    
    $
    8,221
    
    
    
    
    
    
    $
    10,010Operating data:Average number of transacting ATMs
    
    
    10,486
    
    
    
    
    
    
    
    10,584Withdrawal transactions
    
    
    27,361,645
    
    
    
    
    
    
    
    25,760,401Average withdrawals per ATM per month
    
    
    290
    
    
    
    
    
    
    
    271Average
transaction-based sales per withdrawal transaction
    
    $
    2.37
    
    
    
    
    
    
    $
    2.37Average discount per withdrawal transaction
    
    $
    1.61
    
    
    
    
    
    
    $
    1.63Net transaction-based sales per withdrawal transaction
    
    $
    .76
    
    
    
    
    
    
    $
    .75
 Sales
    Sales Commissions
  23




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##### Table of Contents



Cost of Sales
    Selling, General and Administrative Expense
  
    
    Labor costs (excluding non-cash stock compensation expense) decreased by $292,000 or
6.0%. In connection with the sales of businesses in 2007, we substantially reduced our
selling, general and administrative staff and as of September 30, 2008, we have 64
employees.
    
    Our cost for outsourced services decreased by $3.1 million, primarily due to a
settlement with eFunds that was the result of the termination of services they were
performing for us under a Master Services Agreement entered into in 2004. We also
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##### Table of Contents



did not renew software maintenance agreements that were no longer needed to support
operations.
    
    Legal, accounting, directors fees, and consulting expenses decreased by $1.1 million
in the third quarter of 2008 as compared to third quarter 2007.
  Interest Expense, Amortization of Debt Issuance Costs, Loss on Early Extinguishment of Debt
  Provision for Income Taxes
  Discontinued Operations
  Net Loss
  25




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##### Table of Contents



Liquidity and Capital Resources
 Lampe Loan Facility
     26




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##### Table of Contents



Lampe Loan Facility
    
    $
    11,000Note payable to former Access To Money owner
    
    
    9,755Notemachine settlement agreement
    
    
    2,026Other debt
    
    
    1,562TRM Inventory Funding Trust note payable
    
    
    57,518$
    81,861
     Note Payable to Former Access To Money Owner
  Notemachine Settlement Agreement
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##### Table of Contents



TRM Vault Cash Facility
 General.
 Cost of the facility.
 
    
    Interest on the loaned funds. The loans bear interest at an interest rate equal to
1.35% (1.75% prior to May 2007) plus the interest rate borne by the commercial paper
that was issued to raise the funds for the loans. Interest for the quarter ended
September 30, 2008 was $793,000.
    
    Return for equity investors. Autobahn and GSS Holdings, Inc., as equity investors
in the Trust, receive a return on the value of their investments, which were $1,485,000
and $15,000, respectively, as of September 30, 2008. Autobahns annual return is equal
to 1.35% plus the interest rate borne by the commercial paper that is outstanding. GSS
Holdings annual return is equal to 25.0%.
    
    Fees. Autobahn receives a commitment fee and TRM ATM, as servicer, and the
collateral agent each receive administrative fees in connection with the facility.
Autobahns fees for the quarter ended September 30, 2008 were $26,842.
  Termination.
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##### Table of Contents



New Facility
     29




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##### Table of Contents



Off-balance Sheet Arrangements
  Critical Accounting Policies and Estimates
  New Accounting Standards
  
 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
  Interest Rate Risk
   30




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Foreign Currency Risk
  
 ITEM 4. CONTROLS AND PROCEDURES
    31




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##### Table of Contents



PART II  OTHER INFORMATION
 
 ITEM 6. EXHIBITS
 (a) Exhibits
 3.1
    
    
    (a)
    
    Articles of Amendment to the Restated Articles of
Incorporation of TRM Corporation.(b)
    
    Amendments to the Restated Articles of
Incorporation (incorporated herein by reference to Exhibit 3.1(a) of Form
10-K for the fiscal year ended June 30, 1998).(c)
    
    Restated Articles of Incorporation (incorporated
herein by reference to Exhibit 3.1(b) of Form 10-K for the fiscal year
ended June 30, 1998).3.2
    
    
    Restated Bylaws (incorporated herein by reference to Exhibit 3.2
of Form 10-K for the fiscal year ended June 30, 1998).4.1
    
    
    Specimen Stock Certificate (incorporated herein by reference to
Exhibit 4.1 of Form S-3/A filed on August 25, 2004 [No. 333-116748]).4.2
    
    
    Articles V, VI and VII of the Restated Articles of Incorporation,
as amended (See Exhibit 3.1).4.3
    
    
    Articles I, II, V, VII and X of the Restated Bylaws (See Exhibit
3.2).4.4
    
    
    Amended and Restated Warrant to GSO Credit Opportunities Fund
(Helios), L.P., dated April 18, 2008 (incorporated by reference to Exhibit 4.5 of
Form 10-Q for the quarter ended March 31, 2008).4.5
    
    
    Amended and Restated Warrant to GSO Special Situations Overseas
Benefit Plan Fund Ltd., dated April 18, 2008 (incorporated by reference to
Exhibit 4.6 of Form 10-Q for the quarter ended March 31, 2008).4.6
    
    
    Amended and Restated Warrant to GSO Special Situations Fund Ltd.,
dated April 18, 2008 (incorporated by reference to Exhibit 4.7 of
Form 10-Q for the quarter ended March 31, 2008).4.7
    
    
    Amended and Restated Warrant to GSO Domestic Capital Funding
Partners LP., dated April 18, 2008 (incorporated by reference to Exhibit 4.8 of
Form 10-Q for the quarter ended March 31, 2008).
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##### Table of Contents



4.8
    
    
    Warrant to LC Capital Master Fund, Ltd., dated February 8, 2008
(incorporated herein by reference to Exhibit 4.8 of Form 10-K for the fiscal year
ended December 31, 2007).4.9
    
    
    Warrant to LC Master Fund, Ltd., dated April 18, 2008
(incorporated herein by reference to Exhibit 4.9 of Form 10-Q for the quarter
ended March 31, 2008).4.10
    
    
    Warrant to LC Capital Master Fund, Ltd. dated April 18, 2008
(incorporated herein by reference to Exhibit 4.10 of Form 10-Q for the quarter
ended June 30, 2008).4.11
    
    
    Warrant to Cadence Special Holdings II, LLC., dated April 18, 2008
(incorporated herein by reference to Exhibit 4.11 of Form 10-Q for the quarter
ended June 30, 2008).10.1
    
    
    ATM Vault Cash Purchase Agreement, effective November 3, 2008, by and
among U.S. Bank National Association, doing business as Elan Financial Services,
TRM ATM Corporation, TRM Inventory Funding Trust and DZ Bank, AG, Deutsche
Zentral-Genossenschaftsbank Frankfurt Am Main.10.2
    
    
    Amendment No. 2 to Cash Provisioning Agreement, dated October 31,
2008, by and among Genpass Technologies LLC, doing business as Elan Financial
Services, TRM ATM Corporation and Pendum, Inc.10.3
    
    
    Cash Provisioning Agreement, dated October 31, 2008, by and among
U.S. Bank National Association, doing business as Elan Financial Services, TRM ATM
Corporation and Brinks U.S., A Division of Brinks, Incorporated.10.4
    
    
    Cash Provisioning Agreement, dated October 31, 2008, by and among
U.S. Bank National Association, doing business as Elan Financial Services, TRM ATM
Corporation and Garda Global.10.5
    
    
    Cash Provisioning Agreement, dated October 31, 2008, by and among
U.S. Bank National Association, doing business as Elan Financial Services, TRM ATM
Corporation and Rochester Armored.10.6
    
    
    Cash Provisioning Agreement, dated October 31, 2008, by and among
U.S. Bank National Association, doing business as Elan Financial Services, TRM ATM
Corporation and ATM Solutions, Inc.10.7
    
    
    Cash Provisioning Agreement, dated October 31, 2008, by and among
U.S. Bank National Association, doing business as Elan Financial Services, TRM ATM
Corporation and Mount Vernon Money Center.
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##### Table of Contents



10.8
    
    
    Termination Agreement, dated November 5, 2008, by and among TRM
Inventory Funding Trust, TRM ATM Corporation, Autobahn Funding Company LLC, DZ
Bank, AG, Deutsche Zentral-Genossenschaftsbank Frankfurt Am Main, GSS Holdings
Inc., U.S. Bank National Association and Wilmington Trust Company.10.9
    
    
    Services Agreement dated November 3, 2008, by and among U.S. Bank National
Association doing business as Elan Financial Services, TRM ATM Corporation, and
eFunds Corporation.10.10
    
    
    Irrevocable Letter of Credit dated October 31, 2008 from Wells Fargo
Bank, N.A. in favor of U.S. Bank National Association.10.11
    
    
    Amendment No. 5 to Securities Purchase Agreement dated November 5,
2008 by and among TRM Corporation, Lampe Conway & Co., LLC and LC Capital Master
Fund, Ltd.31.1
    
    
    Certification of Chief Executive Officer of TRM Corporation pursuant
to Section 302 of the Sarbanes-Oxley Act of 2002.31.2
    
    
    Certification of Chief Financial Officer of TRM Corporation pursuant
to Section 302 of the Sarbanes-Oxley Act of 2002.32.1
    
    
    Certification of Chief Executive Officer of TRM Corporation pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350.32.2
    
    
    Certification of Chief Financial Officer of TRM Corporation pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350.
 34




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SIGNATURE
  TRM CORPORATIONDate: November 14, 2008
    By:
    /s/ Michael J. DolanMichael J. DolanChief Financial Officer 35