SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
For Quarter ended September 30, 1995 Commission file number 0-8320
MID-PLAINS TELEPHONE, INC.
Exact Name of Registrant as Specified in Its Charter)
WISCONSIN 39-0274450
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
1912 Parmenter Street, P.O. Box 70, Middleton, Wisconsin 53562
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (608) 831-1000
Indicate by checkmark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 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
As of September 30, 1995, there were 1,981,789 shares of Common Stock
outstanding.
(Total number of pages - 10)
MID-PLAINS TELEPHONE, INC.
3rd QUARTER REPORT ON FORM 10-Q
INDEX
Page
Number
PART I. Financial Information
Item 1. Financial Statements
Consolidated Balance Sheets -
September 30, 1995 and December 31, 1994 3 - 4
Consolidated Statements of Income -
Three and Nine Month Periods Ended
September 30, 1995 and 1994 5
Consolidated Statements of Cash Flow -
Nine Months Ended September 30, 1995 and 1994 6
Notes to Consolidated Financial Statements 7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results
of Operations 8 - 9
PART II. Other Information 10
Item 6. Exhibits and Reports on Form 8-K 10
Signatures 10
MID-PLAINS TELEPHONE, INC.
CONSOLIDATED BALANCE SHEETS
September 30, December 31,
1995 1994
In Thousands
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 335 $ 186
Accounts receivable -
Due from subscribers 952 811
Customer sales and services 1,265 725
Other, principally connecting companies 1,877 2,032
Inventories
Plant materials and supplies 360 281
Communications systems and parts 900 863
Other 224 393
5,913 5,291
PROPERTY, PLANT AND EQUIPMENT
Telephone, in service and under
construction, at original cost 46,381 41,041
Less Accumulated depreciation (17,598) (15,383)
28,783 25,658
INVESTMENT AND OTHER ASSETS
Cellular limited partnership interest 4,374 2,379
Other 604 561
4,978 2,940
$ 39,674 $ 33,889
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Current maturities of long-term debt $ 883 $ 3,380
Notes payable to banks 2,930 1,300
Accounts payable 2,920 2,798
Accrued taxes 616 0
Other 637 648
7,986 8,126
LONG-TERM DEBT 7,916 3,574
DEFERRED CREDITS
Income taxes 2,798 2,742
Investment tax credits 252 300
Other 946 915
3,996 3,957
SHAREHOLDERS' EQUITY
Common stock, par value $3.33-1/3
share; authorized 3,000,000 shares;
issued 1,981,789 and 1,974,400
shares, respectively 6,606 6,581
Additional paid-in capital 5,022 4,806
Retained earnings 8,148 6,845
19,776 18,232
39,674 33,889
The accompanying notes to consolidated financial statements are an integral
part of these statements. (UNAUDITED)
/TABLE
MID-PLAINS TELEPHONE, INC.
CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended Nine Months Ended
Sept. 30, Sept. 30, Sept. 30, Sept. 30,
1995 1994 1995 1994
In Thousands Except For Per Share Data
OPERATING REVENUES
Telephone operations
Local network services $1,110 $ 759 $3,144 $2,749
Network access and long
distance network service 2,806 2,497 8,512 7,336
Other 610 578 1,801 1,527
System sales and services 2,184 1,265 5,018 3,995
6,710 5,099 18,475 15,607
OPERATING EXPENSES
Telephone operations
Plant operations 602 521 1,975 1,961
Depreciation 783 585 2,269 1,710
Customer operations 606 482 1,905 1,683
Corporate operations 630 554 1,771 1,701
General taxes 250 223 742 642
System sales and services
Cost of sales and services 1,459 765 3,206 2,336
Operating expenses 524 548 1,510 1,502
4,854 3,678 13,378 11,535
OPERATING INCOME BEFORE
INCOME TAXES 1,856 1,421 5,097 4,072
Other income 6 0 13 2
Interest expense (288) (217) (693) (672)
INCOME BEFORE INCOME
TAX EXPENSE 1,574 1,204 4,417 3,402
Income tax expense 598 436 1,670 1,250
NET INCOME $ 976 $ 768 $2,747 $2,152
Average shares considered
outstanding 1,981 1,971 1,978 1,968
Earnings per share $ .49 $ .39 $ 1.39 $ 1.09
Cash dividends per share $ .25 $ .21 $ .73 $ .63
The accompanying notes to consolidated financial statements are an integral
part of these statements. (UNAUDITED)
/TABLE
MID-PLAINS TELEPHONE, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Nine Months Ended
September 30, September 30,
1995 1994
In Thousands
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $2,747 $2,152
Add (Deduct) adjustments to reconcile
net income to net cash provided by
operating activities:
Depreciation and amortization 2,337 1,756
Deferred income taxes (28) 39
Change in accounts and other receivables (602) 90
Change in inventories (116) (2)
Change in accounts payable 122 (134)
Change in other assets and liabilities 917 (943)
Net cash from operations 5,377 2,958
CASH FLOWS FROM FINANCING ACTIVITIES
Long-term borrowings 5,000 0
Repay long-term debt (3,155) (594)
Change in notes payable to banks 1,630 0
Dividends paid (1,443) (1,240)
Stock purchase plan 240 225
Net cash used in financing 2,272 (1,609)
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to property, plant and equipment (5,453) (2,339)
Investment in cellular partnership (1,995) 0
Other, net (52) 0
Net cash used in investing (7,500) (2,339)
CASH AND CASH EQUIVALENTS
Net increase (decrease) during period 149 (990)
Beginning of period 186 1,606
End of period $ 335 $ 616
Cash paid during the period:
Interest $ 670 $ 676
Income taxes $1,302 $ 724
The accompanying notes to consolidated financial statements are an integral
part of these statements. (UNAUDITED)
/TABLE
MID-PLAINS TELEPHONE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. The unaudited financial statements included herein have been prepared
pursuant to the rules and regulations of the Securities and Exchange
Commission. Certain information in footnote disclosures normally
included in financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted pursuant
to such rules and regulations, although the Company believes the
disclosures are adequate to make the information presented not
misleading. It is suggested that these financial statements be read in
conjunction with the financial statements and the notes thereto included
in the Company's Form 10-K for the year ended December 31, 1994.
In the opinion of the Company, the accompanying financial statements
contain all adjustments (consisting of normal recurring accruals)
necessary to present fairly the financial position as of September 30,
1995 and December 31, 1994, and the results of operations and cash flows
for the nine months ended September 30, 1995 and 1994. The results for
the nine months ended September 30, 1995 are not necessarily indicative
of the results of operations which may be expected for the entire year
ending December 31, 1995.
MID-PLAINS TELEPHONE, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
RESULTS OF OPERATIONS
Net income increased $208,000 and $595,000 for the third quarter and first
nine months of 1995, respectively, compared to the same periods in 1994. The
primary factors that influenced the results of operations are discussed below.
Telephone operating revenues increased $692,000 and $1,845,000 for the third
quarter and first nine months of 1995, respectively, compared to the same
periods in 1994. These increases were due in part to increased local network
service rates in 1995 which increased revenues by 247,000 and 700,000 for the
third quarter and first nine months of 1995, respectively. Increases were
also due to growth in local and network access and the provision of long
distance services. Local network service increases were offset in part by a
second quarter 1994 credit of $574,000 to eliminate regulatory liabilities no
longer considered payable.
Telephone operating expenses, which include plant, depreciation, customer,
corporate, and general taxes, increased $506,000 and $965,000 for the third
quarter and first nine months of 1995, respectively, compared to the same
periods in 1994. Increases in plant, customer and corporate expenses, due
primarily to growth in internal operations and the cost of long distance
services, were offset by a $388,000 charge in the second quarter of 1994 to
eliminate regulatory assets no longer considered recoverable. Additionally,
the changes in plant, customer and corporate operating expenses for the nine
months ended September 30, 1995 were also due to a reclassification of labor
in 1995 from plant $55,000 and corporate $60,000 operating expenses to
customer operations. Also, for the third quarter and first nine months ended
September 30, 1995, $101,000 of labor was capitalized resulting from the
installation of new central office equipment. Depreciation increased due to
growth in telephone plant, and increased central office depreciation of
$118,000 and $356,000 for the third quarter and first nine months of 1995,
respectively, in connection with the pending change-out of central office
equipment.
System sales and service revenues increased $919,000 and $1,023,000 for the
third quarter and first nine months of 1995, respectively, compared to the
same periods in 1994. Cost of sales, as a percentage of operating revenues,
increased 6.3% and 5.4% for the third quarter and first nine months of 1995,
respectively, compared to the same periods in 1994. Operating expenses
decreased $24,000 and increased $8,000 for the third quarter and first nine
months of 1995, respectively, compared to the same periods in 1994.
LIQUIDITY AND CAPITAL COMMITMENTS
As of July 1, 1995, the Company sold $5.0 million of debentures to replace
$2.5 million of debentures due July 1, 1995 and to meet other 1995 cash
requirement. The Company plans to meet remaining 1995 cash requirements
with cash flows from operation and additional debt financing. As of
September 30, 1995, the Company has unused bank lines-of-credit of $3
million.
MID-PLAINS TELEPHONE, INC.
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibit 99 - Employee Stock Purchase Plan
The Company has traditionally been authorized by the Wisconsin
Public Service Commission to sell stock to its employees.
This changed as a result of the Telecommunications Act of
1993, enacted by the 1994 Wisconsin Legislature, and the
Company adopted the plan attached hereto as Exhibit 99 which
took effect in the third quarter of 1995.
(b) Reports on Form 8-K
In a report filed on Form 8-K dated July 6, 1995, the
Company reported an issue of Debentures to be known as
Series 1995 Registered Subordinated Debentures in the amount
of $5,000,000, and included as an exhibit the Instruments
defining the rights of security holders including
indentures.
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.
MID-PLAINS TELEPHONE, INC.
(Registrant)
Date November 10, 1995 /s/Howard G. Hopeman
Howard G. Hopeman, Vice-President and
Chief Financial Officer
Date November 10, 1995 /s/Fredrick E. Urben
Fredrick E. Urben, Vice-President,
Administration & Human Relations,
Secretary & Treasurer