SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
(MARK ONE)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1995
or
[ ] TRANSITION REPORT PURSUANT TO SECTION A3 OR 15(d)
OF THE SECURITIES AND EXCHANGE ACT OF 1934
For the transition period from ________ to ________
Commission file number 0-16560
Vanguard Cellular Systems, Inc.
(Exact name of registrant as specified in its charter)
North Carolina 56-1549590
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2002 Pisgah Church Road, Suite 300
Greensboro, North Carolina 27455
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (910) 282-3690
Indicate by check mark 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 ___.
The number of shares outstanding of the issuer's common stock as
of May 1, 1995 was 41,187,898.
VANGUARD CELLULAR SYSTEMS, INC. AND SUBSIDIARIES
INDEX
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Condensed Consolidated Balance Sheets - I-1
March 31, 1995 and December 31, 1994
Condensed Consolidated Statements of Operations - I-2
Three months ended March 31, 1995 and 1994
Condensed Consolidated Statements of Cash Flows - I-3
Three months ended March 31, 1995 and 1994
Notes to Condensed Consolidated Financial I-4
Statements
Item 2. Management's Discussion and Analysis of I-7
Results of Operations and Financial Condition
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K II-1
SIGNATURES II-2
Item 1. Financial Statements
VANGUARD CELLULAR SYSTEMS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollar amounts in thousands)
March 31, December 31,
ASSETS 1995 1994
(Substantially all pledged on long-term debt) (Unaudited) (See note)
Current Assets:
Cash...................................................................... $ 9,781 $ 5,745
Accounts receivable, net of allowances for doubtful accounts of $3,083
and $2,761.............................................................. 20,116 22,664
Cellular telephone inventories............................................ 9,951 10,417
Prepaid expenses.......................................................... 1,795 717
Total current assets........................................... 41,643 39,543
Investments (Note 2)........................................................ 297,443 257,203
Property and Equipment, net of accumulated depreciation of $85,141 and
$80,022................................................................... 145,613 120,325
Other Assets, net of accumulated amortization of $1,366 and $635............ 16,161 14,640
Total assets.................................................. $ 500,860 $ 431,711
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable and accrued expenses.....................................$ 32,475 $ 40,689
Customer deposits ........................................................ 1,203 632
Total current liabilities...................................... 33,678 41,321
Long-Term Debt.............................................................. 432,148 348,649
Minority Interests ......................................................... 2,557 2,534
Commitments and Contingencies
Shareholders' Equity:
Preferred stock - $.01 par value, 1,000,000 shares authorized, no shares
issued.................................................................. -- --
Common stock, Class A - $.01 par value, 60,000,000 shares authorized,
41,185,468 and 40,529,334 shares issued and outstanding................. 412 405
Common stock, Class B - $.01 par value, 30,000,000 shares authorized,
no shares issued........................................................ -- --
Additional capital in excess of par value................................. 236,346 234,731
Net unrealized holding losses............................................. (10,505) (9,310)
Accumulated deficit....................................................... (193,776) (186,619)
Total shareholders' equity..................................... 32,477 39,207
Total liabilities and shareholders' equity..................... $ 500,860 $ 431,711
The accompanying notes to condensed consolidated financial statements
are an integral part of these balance sheets.
Note: The balance sheet at December 31, 1994 has been derived from
the audited financial statements at that date.
I - 1
VANGUARD CELLULAR SYSTEMS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 1995 AND 1994
(Dollar amounts in thousands, except per share data)
1995 1994
(Unaudited) (Unaudited)
Revenues:
Service fees..................................................... $ 43,867 $ 28,502
Cellular telephone equipment revenues............................ 5,042 3,910
Other............................................................ 908 679
49,817 33,091
Costs and Expenses:
Cost of service.................................................. 5,974 4,800
Cost of cellular telephone equipment............................. 9,047 5,929
General and administrative....................................... 12,747 9,145
Marketing and selling............................................ 12,026 6,792
Depreciation and amortization.................................... 8,060 4,983
47,854 31,649
Income From Operations............................................... 1,963 1,442
Net Gain (Losses) on Dispositions ................................... 7 (313)
Interest Expense..................................................... (8,574) (3,984)
Other, net........................................................... (530) (205)
Loss Before Minority Interests....................................... (7,134) (3,060)
Minority Interests................................................... (23) 5
Net Loss............................................................. $ (7,157) $ (3,055)
Net Loss Per Share .................................................. $ (0.18) $ (0.08)
Weighted Average Number of Common
Shares Outstanding ................................................ 40,686,397 38,401,896
The accompanying notes to condensed consolidated financial statements
are an integral part of these statements.
I - 2
VANGUARD CELLULAR SYSTEMS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 1995 AND 1994
(Dollar amounts in thousands)
1995 1994
(Unaudited) (Unaudited)
Cash flows from operating activities:
Net loss...................................................................$ (7,157) $ (3,055)
Adjustments to reconcile net loss to net cash used in
operating activities:
Depreciation and amortization........................................... 8,060 4,983
Amortization of deferred debt issuance costs............................ 316 297
Equity in losses of unconsolidated cellular entities.................... 211 268
Minority interests...................................................... 23 (5)
Net (gain) loss on dispositions......................................... (7) 313
Non-cash compensation for management consulting services................ (598) (353)
Changes in current items:
Accounts receivable, net............................................... 2,670 (756)
Cellular telephone inventories......................................... 655 (239)
Account payable and accrued expenses................................... (8,539) (4,234)
Other, net............................................................. (656) (89)
Net cash used in operating activities.................................. (5,022) (2,870)
Cash flows from investing activities:
Purchase of property and equipment......................................... (24,842) (5,560)
Proceeds from dispositions of property and equipment....................... 48 22
Payments for acquisition of investments.................................... (51,163) (32,351)
Capital contributions to unconsolidated cellular entities.................. (67) (3)
Net cash used in investing activities.................................. (76,024) (37,892)
Cash flows from financing activities:
Principal payments of long-term debt....................................... (1) (1)
Net proceeds from issuance of common stock................................. 1,622 73
Proceeds of long-term debt................................................. 83,500 35,500
Increase in other assets................................................... (39) (2,203)
Net cash used in by financing activities............................... 85,082 33,369
Net increase (decrease) in cash................................................ 4,036 (7,393)
Cash, beginning of period...................................................... 5,745 9,098
Cash, end of period............................................................ $ 9,781 $ 1,705
SUPPLEMENTAL DISCLOSURE OF INTEREST PAID....................................... $ 7,675 $ 4,274
The accompanying notes to condensed consolidated financial statements
are an integral part of these statements.
I - 3
VANGUARD CELLULAR SYSTEMS, INC. AND SUBSIDIARIES
(Unaudited)
Note 1: Basis of Presentation
The accompanying condensed consolidated financial statements
of Vanguard Cellular Systems, Inc. and Subsidiaries (the
Company) have been prepared without audit pursuant to Rule
10-01 of Regulation S-X of the Securities and Exchange
Commission ("SEC"). Accordingly, they do not include all of
the information and footnotes required by generally accepted
accounting principles for complete financial statements. In
the opinion of management, all adjustments (consisting of
normal recurring accruals) considered necessary for a fair
presentation have been included. Operating results for the
three month period ended March 31, 1995 are not necessarily
indicative of the results that may be expected for the year
ending December 31, 1995. For further information, refer to
the consolidated financial statements and footnotes thereto
included in the Company's annual report on Form 10-K.
The consolidated financial statements include the accounts
of the Company, its wholly owned subsidiaries and cellular
entities in which the Company holds a majority ownership
interest. Investments in entities in which the Company
exercises significant influence but does not exercise
control through majority ownership have been accounted for
using the equity method of accounting. Ownership interests
in entities in which the Company does not exercise
significant influence or does not control through majority
ownership have been accounted for using the cost method of
accounting.
The Company maintains an ownership interest in Geotek
Communications, Inc. ("Geotek"), a publicly held company.
Under the provisions of Statement of Financial Accounting
Standards No. 115, "Accounting for Certain Investments in
Debt and Equity Securities", this investment is classified
as "available for sale". As such, the investment is
recorded at its market value and any unrealized gains or
losses are recorded as a separate component of shareholders'
equity but do not affect results of operations.
Note 2: Investments
Cellular Entities
The Company continues to expand its ownership of cellular
markets through strategic acquisitions. The Company's
significant activity relating to its cellular investments
during the first quarter of 1995 was as follows:
In January 1995, the Company purchased the Union,
Pennsylvania (PA-8) RSA for a cash price of $51.3 million
with borrowings under its 1994 Credit Facility. The PA-8
RSA lies in the center of the Company's Mid-Atlantic
Supersystem.
Pro forma consolidated results of operations, as if the
acquisition of the PA-8 RSA had occurred January 1, 1994,
are as follows (in thousands, except per share data):
Three Months
Ended March 31,
1995 1994
Revenues....................................$50,324 $34,167
Net loss.................................... (7,398) (4,034)
Net loss per share........................... (0.18) (0.11)
Geotek Communications, Inc.
In February 1994, the Company and Geotek Communications,
Inc. ("Geotek") formed a strategic alliance whereby the
Company purchased from Geotek 2.5 million shares of Geotek
common stock for $30 million and received a series of
options to purchase additional shares in Geotek in three
separately linked transactions. Geotek is a tele-
communications company that is developing an Enhanced
Specialized Mobile Radio (ESMR) wireless communications
network in the United States based on its Frequency Hopping
Multiple Access digital technology (FHMATM). Geotek's
common stock is traded on the NASDAQ National Market System.
In addition, the Company entered into a 5-year management
consulting agreement to provide operational and marketing
support in exchange for 300,000 shares of Geotek common
stock per year. In the first quarter of 1995, the Company
earned and recorded as revenue approximately 75,000 shares
under the management agreement with an aggregate value of
$598,000 based upon the average closing price of Geotek
stock during the periods held. During the same period in
1994, the Company earned and recorded as revenue 32,000
shares with an aggregate value of $353,000. The rights to
future shares under the management agreement are subject to
continued exercise of options to purchase stock discussed
below.
In April, 1995, the Company and Toronto Dominion Investments
("TDI"), a subsidiary of Toronto Dominion Bank, reached an
agreement in principle to invest an additional $10 million
in Geotek. Under the terms of the agreement, the Company
and TDI will each purchase 531,463 shares of Series L
Convertible Preferred Stock with a stated value of $9.408
per share for $5.0 million. Dividends on the shares are
payable quarterly at a rate of 7-1/2% per annum, in cash or
preferred shares. The shares are convertible into common
shares of Geotek at a conversion price of $9.408 per share
subject to certain adjustments.
As part of this new investment the stock options previously
granted to the Company by Geotek in 1994 will be amended to
extend their expiration dates and reduce the number of
shares subject to the options such that the Company will
have the right to purchase 1,000,000 shares of Geotek Common
Stock at $15 per share ("Series A Option") and 1,714,200
additional shares at $16 per share ("Series B Option") until
September 1, 1996 and 2,571,300 additional shares at $17 per
share until 12 months from the expiration date of the Series
B Option ("Series C Option"). The Company may extend the
Series B and Series C Options by six months and the Series C
Option by an additional six months and, if any portion of
any series of options expires, all unexercised options will
expire immediately. In addition, the Company's five-year
management agreement with Geotek will be amended to provide
that, if the Series C Option is exercised prior to the
fourth anniversary date of the Agreement, the 300,000 shares
issuable on the fifth anniversary date would be issuable on
the fourth anniversary date of the Agreement. TDI will
receive from Geotek an option to purchase 1,000,000 shares
at $15 per share, 285,800 shares at $16 per share and
428,700 shares at $17 per share, each with the same term as
the Company's Series A, Series B and Series C Options,
respectively. The consummation of the foregoing
transactions is subject to customary conditions, including
negotiation of definitive agreements. All transactions are
expected to occur in the second quarter of 1995 except that
the Company is not required to fund the purchase of its
portion of the Series L Convertible preferred Stock until
September 1, 1995.
International Wireless Communications, Inc.
The Company owns 19.9% of the outstanding stock of
International Wireless Communications, Inc. ("IWC")
representing an aggregate investment of $6.6 million. IWC
is a development stage company specializing in securing,
building and operating wireless businesses other than
cellular telephone systems primarily in Latin America and
Southeast Asia. The Company's investment in IWC is carried
at cost in the accompanying financial statements.
In April 1995, the Company agreed to merge its ownership
interests and rights to acquire ownership interests in ten
international projects where IWC and the Company have agreed
to co-invest. In exchange for the contribution of these
interests, the Company will receive an amount of IWC stock
to increase its ownership to approximately 49.8% of the
issued and outstanding ownership of IWC. The exchange is
expected to close in the second quarter of 1995.
Note 3: Long-Term Debt
Long-term debt consists of the following as of March 31,
1995 and December 31, 1994 (in thousands):
March 31, December 31,
1995 1994
(Unaudited)
Borrowings under the 1994 Credit
Facility:
Term Loan $ 325,000 $ 325,000
Revolving Loan 107,000 23,500
Other Long-Term Debt 148 149
$ 432,148 $ 348,649
On December 23, 1994, the Company completed the closing of a
$675 million credit facility, pursuant to an Amended and
Restated Loan Agreement (the "1994 Credit Facility"), with
various lenders led by The Toronto-Dominion Bank and The
Bank of New York.
The 1994 Credit Facility consists of a "Term Loan" and a
"Revolving Loan". The Term Loan, in the amount of $325
million, was used to repay the Company's borrowings under
the 1993 Loan Agreement. The Revolving Loan, in the amount
of up to $350 million, is available for capital
expenditures, to make acquisitions of and investments in
cellular and other wireless communication interests, and for
other general corporate purposes. As of March 31, 1995 $243
million was available for future borrowings under the
Revolving Loan.
The Company maintains interest rate swap and interest rate
cap agreements which provide protection against interest
rate risk. At March 31, 1995, the Company had interest rate
cap agreements in place covering a notional amount of $270
million. The interest rate cap agreements provide
protection to the extent that LIBOR exceeds 5.5% through
July 1995, or 7.63% through December 1995, or 9.63% through
December 1997. The total cost of these interest rate cap
agreements of $687,000 has been recorded in other assets in
the consolidated balance sheets and is being amortized over
the lives of the agreements as a component of interest
expense.
Additionally, the Company maintains an interest rate swap
agreement that fixes the LIBOR interest rate at 6.9% on a
notional amount of $100 million through June 1995. Under
this swap agreement, the Company benefits if LIBOR interest
rates increase above the fixed rates and incurs additional
interest expense if rates remain below the fixed rates. Any
amounts received or paid under this agreement are reflected
as interest expense over the period covered.
For further information on the terms and conditions of the
1994 Credit Facility refer to Management's Discussion and
Analysis of Results of Operations and Financial Conditions -
Liquidity and Capital Resources.
Note 4: Common Stock
The Company effected a 3 for 2 stock split of its Class A
Common Stock in the form of a 50% stock dividend paid on
August 24, 1994. The effect of the split has been
retroactively applied to all common stock and per share
amounts disclosed in the accompanying consolidated financial
statements and footnotes.
VANGUARD CELLULAR SYSTEMS, INC. AND SUBSIDIARIES
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION
The following is a summary of the Company's ownership
interests in cellular markets in which the Company's
ownership interests exceeded 20% at March 31, 1995 and 1994.
This table does not include any ownership interests that
were contracted for at these dates.
March 31,
Cellular Markets 1995 1994
MID-ATLANTIC SUPERSYSTEM:
Allentown, PA/NJ 100.0% 100.0%
Wilkes-Barre/Scranton, PA 100.0 100.0
Harrisburg, PA 86.8 86.8
Lancaster, PA 100.0 100.0
York, PA 100.0 100.0
Reading, PA 100.0 100.0
Altoona, PA 100.0 3.0
State College, PA 97.0 97.0
Williamsport, PA 91.6 90.3
Union, PA (PA-8 RSA) 100.0 --
Chambersburg, PA (PA-10 East RSA) 91.3 --
Hagerstown, MD -- 90.8
Lebanon, PA (PA-12 RSA) 100.0 100.0
Mifflin, PA (PA-11 RSA) 100.0 100.0
Wayne, PA (PA-5 RSA) 100.0 100.0
Orange County, NY 100.0 100.0
Binghamton, NY 100.0 1.0
Elmira, NY 100.0 --
NEW ENGLAND METRO-CLUSTER:
Portland, ME 100.0 100.0
Portsmouth, NH/ME 100.0 100.0
Bar Harbor, ME (ME-4 RSA) 100.0 --
FLORIDA METRO-CLUSTER:
Pensacola, FL 100.0 100.0
Fort Walton Beach, FL 100.0 100.0
WEST VIRGINIA METRO-CLUSTER:
Huntington, WV/KY/OH 100.0 100.0
Charleston, WV 100.0 100.0
Ripley, WV (WV-1 East RSA) 100.0 --
CAROLINAS METRO-CLUSTER:
Myrtle Beach, SC (SC-5 RSA) 100.0 100.0
Wilmington, NC 47.7 47.7
Jacksonville, NC 47.3 47.3
RESULTS OF OPERATIONS
Three Months Ended March 31, 1995 and 1994
Unless otherwise indicated all information in this report
has been adjusted for the Company's 3 for 2 stock split paid
in the form of a stock dividend on August 24, 1994.
Service revenues increased by $15.4 million or 54% primarily
as a result of an 87% increase in the number of subscribers
in majority owned markets to approximately 280,000 as of
March 31, 1995, as compared to the end of the first quarter
of 1994. Approximately 82% of the increase in the number of
subscribers was due to subscriber growth in markets
controlled by the Company in both periods. Total net
subscribers in the Company's majority owned markets
increased by 35,000 during the first quarter of 1995 as
compared to 17,700 in the first quarter of 1994. This 98%
increase in the growth rate of net subscriber additions is
the result of approximately 9,000 subscribers added as a
result of the Company's acquisition of the Union,
Pennsylvania (PA-8) Rural Service Area during January of
1995, an increase in productivity by sales personnel which
the Company believes has been augmented by increased sales
training, and the growing acceptance of cellular
communications. The growth in net subscriber additions also
reflects the number of agents in the Company's indirect
distribution channels combined with moderate economic
recovery in the Company's operating regions.
Service revenues attributable to the Company's own
subscribers increased 61% during the first quarter of 1995
to $36.2 million as compared to the same period in 1994.
Average monthly local revenue per subscriber declined 13% to
$46 compared to $53 a year ago. Approximately 20% of this
decline is due to the acquisition of markets with existing
subscribers who produce lower local revenue. The balance of
the decline is due to a combination of factors including
increased incremental penetration into the segment of
consumers who generally use their cellular phones less
frequently, and an extremely mild winter in the Company's
core markets. Service revenues generated by customers of
other cellular providers roaming into the Company's markets
increased 27% to $7.7 million as compared to $6.1 million a
year ago. This increase is the result of increased minutes
and is partially offset by rate reductions entered into with
certain other cellular providers in the beginning of 1995.
The reduced rates charged to other cellular carriers is the
result of negotiations in which the Company also pays lower
rates. When combining revenue from the Company's customers
with roaming revenue, overall average monthly revenue per
subscriber for the quarter declined 16% to $56 from $67 a
year ago.
Cellular equipment revenues increased $1.1 million or 29% to
$5.0 million for the three months ended March 31, 1995 as
compared to the same period in 1994. This increase was
primarily due to the 87% increase in net subscriber
additions in the 1995 period. Cost of cellular equipment
increased 53% to $9.0 million during the 1995 period. The
Company continues to sell telephones at or below cost in
response to competitive pressures and also continues the
availability of its rental program.
Cost of service expenses as a percentage of service fees
improved from 17% during the first quarter of 1994 to 14%
during the first quarter of 1995. In many instances, the
Company's customers who roam into adjacent cellular markets
are charged at rates consistent with those rates the Company
charges in its own markets rather than passing through
higher roaming rates customarily charged by many cellular
carriers. This billing practice creates a marketing
advantage by providing the customer with a broader virtual
service area. The net cost associated with this billing
practice was $1.6 million for the three months ended
March 31, 1995 as compared to $2.0 million during the same
period in 1994. The Company has been able to reduce costs
associated with this billing practice through the
negotiation of more favorable roaming agreements with both
wireline and non-wireline cellular service providers. These
negotiations have also resulted in rate reductions to
certain other cellular providers described above. In
addition, the continued negotiation of more favorable
interconnection agreements with local exchange carriers
should contribute to stability in cost of service as a
percentage of service fees.
General and administrative expenses increased 39% or $3.6
million during the three months ended March 31, 1995 but
decreased as a percentage of service fees to 29% from 32% in
the same period in 1994. The overall increase is related to
the advanced deployment of general and administrative
resources necessary to accommodate anticipated subscriber
growth during the next several quarters. These expenses
declined as a percentage of service fees primarily as a
result of controlled increases of many overhead expenses
resulting in higher utilization of the Company's existing
personnel and systems. General and administrative expenses
should continue to decline as a percentage of service fees
as the Company continues to add more subscribers without
commensurate increases in general and administrative
overhead.
Marketing and selling expenses increased 77% to $12.0
million during the three months ended March 31,1995, as
compared to the same period in 1994. As a percentage of
service fees, these expenses increased to 27% from 24%.
During the three months ended March 31, 1995 marketing and
selling expenses, including the net loss on subscriber
equipment, increased to $16.0 million from $8.8 million for
the same period in 1994. This increase is primarily
attributable to the higher rate of growth in net subscriber
additions described above for the 1995 period as compared to
the 1994 period and the resulting increase in salaries and
commissions. Marketing and selling expenses per net
subscriber addition (excluding the PA-8 subscriber
additions), including the loss on cellular equipment,
increased 24% to $617 in 1995 from $498 during the same
period in 1994. This increase was primarily a result of
increased advertising and cellular phone promotion
expenditures during the first quarter of 1995 in
anticipation of larger subscriber growth through the
remainder of the year.
Depreciation and amortization increased $3.1 million or 62%
during the three months ended March 31, 1995 as compared
with the same period in 1994. The addition of approximately
$70.3 million of new property and equipment placed in
service during the twelve months ended March 31, 1995,
accounts for approximately $2.0 million of the increase.
The balance of the increase is the result of the
amortization of licenses and customer base acquired through
acquisitions during the same period.
Interest expense increased $4.6 million or 115% during the
three months ended March 31, 1995. This increase resulted
equally from an increase in average borrowings of
approximately $153.3 million, and an increase in average
interest rates charged.
Net loss increased from $3.1 million or $.08 per share for
the three months ended March 31, 1994 to $7.2 million or
$.18 per share in the 1995 period. The increase in net loss
per share is primarily attributable to the increases in
depreciation, amortization, and interest expense as
discussed above.
LIQUIDITY AND CAPITAL RESOURCES
The Company requires capital to acquire, construct, and expand
its cellular systems. The Company intends to continue to pursue
acquisitions of cellular systems and properties as well as other
investment opportunities. In addition, although the primary
buildout of its cellular system is complete, the Company will
continue to construct additional cell sites and purchase cellular
equipment to increase capacity as subscribers are added and usage
increases, to expand geographic coverage and to provide for
increased portable usage.
The specific capital requirements of the Company will depend
primarily on the timing and size of any additional acquisitions
and other investments as well as property and equipment needs
associated with the rate of subscriber growth. Operating Cash
Flow (or EBITDA) has been a significant source of internal
funding in recent years, but the Company does not expect
Operating Cash Flow to grow sufficiently to meet both its
property and equipment and debt service requirements for at least
the next two years. In recent years, the Company has met its
capital requirements for property and equipment purchases
primarily through bank financing. Acquisitions and other
investments have been financed through a combination of bank
borrowings and issuances of Class A Common Stock.
1994 CREDIT FACILITY. On December 23, 1994, the Company completed
the closing of a $675 million credit facility, pursuant to an
Amended and Restated Loan Agreement (the "1994 Credit Facility"),
with various lenders led by The Toronto-Dominion Bank and The
Bank of New York. The 1994 Credit Facility provides the Company
with additional financial and operating flexibility and
enables the Company to accelerate its cellular network buildout
and pursue business opportunities that may arise in the future.
The 1994 Credit Facility refinanced the 1993 Loan Agreement. The
1993 Loan Agreement closed in April 1993 and refinanced the
Company's previously existing credit facility. The 1994 Credit
Facility consists of a "Term Loan" and a "Revolving Loan." The
Term Loan, in the amount of $325 million, was used to repay the
Company's borrowings under the 1993 Loan Agreement. The Revolving
Loan, in the amount of up to $350 million, is available for
capital expenditures, to make acquisitions of and investments in
cellular and other wireless communication interests, and for
other general corporate purposes.
As security for borrowings under the 1994 Credit Facility, the
Company has pledged substantially all of its tangible and
intangible assets and future cash flows. Among other
restrictions, the 1994 Credit Facility restricts the payment of
cash dividends, limits the use of borrowings, limits the creation
of additional long-term indebtedness and requires the maintenance
of certain financial ratios. The requirements of the 1994 Credit
Facility were established in relation to the Company's projected
capital needs and projected results of operations and cash flow.
These requirements generally were designed to require continued
improvement in the Company's operating performance such that its
Operating Cash Flow -- EBITDA would be sufficient to continue
servicing the debt as repayments are required. The Company is in
compliance with all loan covenants.
As of March 31, 1995, $432 million had been borrowed under the
1994 Credit Facility. Under the restrictive covenants of the
facility, future borrowing availability generally increases as
the Company's operating performance improves. The Company does
not expect these covenants to curtail planned borrowings. As of
March 31, 1995, the most restrictive of these covenants would
limit additional available borrowings during the second quarter
of 1995 to $83.9 million.
The outstanding amount of the Term Loan as of March 30, 1998 is
to be repaid in increasing quarterly installments commencing on
March 31, 1998 and terminating at its maturity date of December
31, 2003. The quarterly installment payments begin at 1.875% of
the outstanding principal amount at March 30, 1998 and gradually
increase to 5.625% at March 31, 2003. The available borrowings
under the Revolving Loan shall be reduced on a quarterly basis
also commencing on March 31, 1998 and terminating on December 31,
2003. The quarterly reduction begins at 1.875% of the Revolving
Loan Commitment at March 30, 1998 and gradually increases to
5.625% on March 31, 2003.
The Term Loan and the Revolving Loan bear interest at a rate
equal to the Company's choice of the Prime Rate or Eurodollar
Rate plus an applicable margin based upon a leverage ratio for
the most recent fiscal quarter. As of March 31, 1995 the leverage
ratio, which is computed as the ratio of Total Debt (as
defined) to Adjusted Cash Flow (as defined), was at such a level
as to cause the applicable margins on the borrowings to be 1.000%
and 2.250% per annum for the Prime Rate and Eurodollar Rate,
respectively.
ACQUISITIONS. The Company completed several acquisitions in 1994
and early 1995. On April 26, 1994, the Company completed the
acquisition of the Altoona, PA MSA and the Chambersburg, PA
(PA-10 East) RSA, which are contiguous to its Mid-Atlantic Supersystem
in exchange for $4.4 million in cash, the exchange of the
Hagerstown, MD cellular market and the Company's minority
ownership interest in one cellular market.
The Company purchased in October 1994, for $6.9 million in cash
and $3.3 million in the Company's Class A Common Stock, the
Washington, Maine (ME-4) RSA and three of the four counties of
the Mason, West Virginia (WV-1) RSA. The Maine RSA is
approximately 40 miles north of the Portland, Maine MSA, which is
already operated by the Company. The West Virginia RSA is
contiguous to the Company's Charleston, West Virginia MSA.
On December 14, 1994, the Company purchased the Binghamton, New
York MSA and the Elmira, New York MSA ("Binghamton/Elmira
Transaction") for a purchase price of approximately 1.8 million
shares of the Company's Class A Common Stock and $6.1 million in
cash borrowed under its credit facility. These markets are
contiguous to the Company's Mid-Atlantic Supersystem.
In January 1995, the Company purchased the Union, Pennsylvania
(PA-8) RSA for a cash price of $51.3 million with borrowings
under its 1994 Credit Facility. The PA-8 RSA lies in the center
of the Company's Mid-Atlantic Supersystem and is an operational
cellular system. Condensed pro forma financial information for
PA-8 as of March 31, 1995, is contained in Note 2 to the
condensed consolidated financial statements.
GEOTEK COMMUNICATIONS, INC. In February 1994, the Company and
Geotek Communications, Inc. ("Geotek") formed a strategic
alliance whereby the Company purchased from Geotek 2.5 million
shares of Geotek common stock for $30 million and received a
series of options to purchase additional shares in Geotek in
three separately linked transactions. Geotek is a tele-
communications company that is developing an Enhanced Specialized
Mobile Radio (ESMR) wireless communications network in the United
States based on its Frequency Hopping Multiple Access digital
technology (FHMATM). Geotek's common stock is traded on the
NASDAQ National Market System. In addition, the Company entered
into a 5-year management consulting agreement to provide
operational and marketing support in exchange for 300,000 shares
of Geotek common stock per year. In the first quarter of 1995,
the Company earned and recorded as revenue approximately 75,000
shares under the management agreement with an aggregate value of
$598,000 based upon the average closing price of Geotek stock
during the periods held. During the same period in 1994, the
Company earned and recorded as revenue 32,000 shares with an
aggregate value of $353,000. The rights to future shares under
the management agreement are subject to continued exercise of
options to purchase stock discussed below.
In April, 1995, the Company and Toronto Dominion Investments
("TDI"), a subsidiary of Toronto Dominion Bank, reached an
agreement in principle to invest an additional $10 million in
Geotek. Under the terms of the agreement, the Company and TDI
will each purchase 531,463 shares of Series L Convertible
Preferred Stock with a stated value of $9.408 per share for $5.0
million. Dividends on the shares are payable quarterly at a rate
of 7-1/2% per annum, in cash or preferred shares. The shares are
convertible into common shares of Geotek at a conversion price of
$9.408 per share subject to certain adjustments.
As part of this new investment the stock options previously
granted to the Company by Geotek in 1994 will be amended to
extend their expiration dates and reduce the number of shares
subject to the options such that the Company will have the right
to purchase 1,000,000 shares of Geotek Common Stock at $15 per
share ("Series A Option") and 1,714,200 additional shares at $16
per share ("Series B Option") until September 1, 1996 and
2,571,300 additional shares at $17 per share until 12 months from
the expiration date of the Series B Option ("Series C Option").
The Company may extend the Series B and Series C Options by six
months and the Series C Option by an additional six months and,
if any portion of any series of options expires, all unexercised
options will expire immediately. In addition, the Company's
five-year management agreement with Geotek will be amended to
provide that, if the Series C Option is exercised prior to the
fourth anniversary date of the Agreement, the 300,000 shares
issuable on the fifth anniversary date would be issuable on the
fourth anniversary date of the Agreement. TDI will receive from
Geotek an option to purchase 1,000,000 shares at $15 per share,
285,800 shares at $16 per share and 428,700 shares at $17 per
share, each with the same term as the Company's Series A, Series
B and Series C Options, respectively. The consummation of the
foregoing transactions is subject to customary conditions,
including negotiation of definitive agreements. All transactions
are expected to occur in the second quarter of 1995 except that
the Company is not required to fund the purchase of its portion
of the Series L Convertible preferred Stock until September 1,
1995.
INTERNATIONAL WIRELESS COMMUNICATIONS, INC. The Company owns
19.9% of the outstanding stock of International Wireless
Communications, Inc. ("IWC") representing an aggregate investment
of $6.6 million. IWC is a development stage company specializing
in securing, building and operating wireless businesses other
than cellular telephone systems primarily in Latin America and
Southeast Asia. The Company's investment in IWC is carried at
cost in the accompanying financial statements.
In April 1995, the Company agreed to merge its ownership
interests and rights to acquire ownership interests in ten
international projects where IWC and the Company have agreed to
co-invest. In exchange for the contribution of these interests
the Company will receive an amount of IWC stock to increase its
ownership to approximately 49.8% of the issued and outstanding
ownership of IWC. The transaction requires an amendment to the
Company's 1994 Credit Facility allowing contribution of the ten
international projects. The exchange is expected to close in the
second quarter of 1995.
CAPITAL EXPENDITURES. As of March 1995, the Company had
approximately $206 million of property and equipment placed in
service. The Company historically has incurred capital
expenditures primarily based upon capacity needs in its existing
markets resulting from continued subscriber growth. During 1994,
the Company initiated a plan to double the number of cell sites
in order to increase geographic coverage and provide for
additional portable usage in the Company's cellular markets. As a
result of this accelerated network buildout and the continued
growth of the Company's subscriber base, capital expenditures
were approximately $24.8 million during the first quarter of
1995. Capital expenditures for the remainder of 1995 are
estimated to be approximately $105.2 million and are expected to
be funded primarily with proceeds from the 1994 Credit Facility.
CASH FLOW GOALS. Operating Cash Flow improved $3.6 million to
$10.0 million during the three months ended March 31, 1995 as
compared to the same period last year. The Company's primary goal
over the next several years will be to maximize Operating Cash
Flow. In order to do so the Company must minimize decreases in
monthly revenue per subscriber and continue to have rapid
subscriber growth with low incremental marketing and sales costs.
The Company believes its business strategy and sales force will
generate continued net subscriber growth and that its focus on
higher revenue customers, principally business users, will assist
in supporting revenue per subscriber. The Company has
substantially completed the development of its managerial,
administrative and marketing functions, as well as the primary
buildout of the cellular networks in its existing markets, and
believes that the rate of service fee growth will exceed the rate
of growth of operating expenses.
Although there can be no assurance that any of the foregoing
growth goals will be achieved, the Company believes that its
internally generated funds and its available bank lines of credit
will be sufficient during the next several years to complete its
planned network expansion and acquisitions, to fund operating
expenses and debt service described above and to provide
flexibility to pursue business opportunities that might arise in
the future.
INFLATION. The Company believes that inflation affects its
business no more than it generally affects other similar
businesses.
Part II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) The exhibits to this Form 10-Q are listed in the
accompanying Index to Exhibits.
(b) Reports on Form 8-K.
(1) On January 9, 1995, the Registrant filed a Current
Report on Form 8-K, dated December 23, 1994. The Form
8-K reported the closing of the Registrant's $675
million credit facility and filed related exhibits.
(2) On February 13, 1995, the Registrant filed a Current
Report on Form 8-K, dated January 27, 1995. The Form
8-K reported the consummation of the acquisition of all
of the outstanding stock of Sunshine Cellular (Union,
Pennsylvania(PA-8 RSA))and updated the financial and
other information previously reported.
SIGNATURES
Pursuant to the requirements of the Securities and Exchange
Act of 1934, the registrant has fully caused this report to be
signed on its behalf by the undersigned thereunto duly
authorized.
VANGUARD CELLULAR SYSTEMS, INC.
Date: May 15, 1995 By: /s/ Haynes G. Griffin
Haynes G. Griffin
President
and
Chief Executive Officer
Date: May 15, 1995 By: /s/ Stephen L. Holcombe
Stephen L. Holcombe
Senior Vice President
and
Chief Financial Officer
(principal accounting and
principal financial officer)
INDEX TO EXHIBITS
EXHIBIT NO. DESCRIPTION
* 10(a))(1) Amended and Restated Stock Compensation Plan of the Registrant approved
April 22, 1987 by the Shareholders of the Registrant, with forms of
stock bonus and stock option agreements attached, filed as Exhibit 10
(a) to the Registrant's Registration Statement, on Form
S-1 (File No. 33-18067).
* 10(a)(2) Amendment to Amended and Restated Stock Compensation Plan of the
Registrant approved May 2, 1989 by the Shareholders of the Registrant,
filed as Exhibit 4(h)(2) to the Registrant's Quarterly Report on Form
10-Q for the quarter ended March 31, 1989.
* 10(a)(3) Form of Restricted Stock Bonus Agreements dated March 23, 1987 between
the Registrant and Stuart S. Richardson, Haynes G. Griffin, L.
Richardson Preyer, Jr., Stephen R. Leeolou and Stephen L. Holcombe, and
form of amendments dated October 12, 1987 to agreements with Messrs.
Richardson, Griffin, Preyer and Leeolou, filed as Exhibit 10(a)(3) to
the Registrant's Annual Report on Form 10-K for the fiscal year ended
December 31, 1988.
* 10(a)(4) Form of Restricted Stock Bonus Agreements dated October 12, 1987 between
the Registrant and Haynes G. Griffin, Stephen R. Leeolou and L.
Richardson Preyer, Jr., filed as Exhibit 10(a)(4) to the Registrant's
Annual Report on Form 10-K for the fiscal year ended December 31, 1988.
* 10(a)(5) Form of Amendment to Restricted Stock Bonus Plan Agreements dated as of
March 1, 1990 by and between Haynes G. Griffin, L. Richardson Preyer,
Jr., Stephen R. Leeolou, and Stephen L. Holcombe and the Registrant,
amending the Restricted Stock Bonus Plan Agreements dated as March 23,
1987, filed as Exhibit 10(a)(5) to the Registrant's Annual Report on
Form 10-K for the fiscal year ended December 31, 1990.
EXHIBIT NO. DESCRIPTION
* 10(a)(6) Form of Amendment to Restricted Stock Bonus Plan Agreements dated as of
March 1, 1990 by and between Haynes G. Griffin, L. Richardson Preyer,
Jr. and Stephen R. Leeolou and the Registrant, amending the Restricted
Stock Bonus Plan Agreements dated as October 12, 1987, filed as Exhibit
10(a)(6) to the Registrant's Annual Report on Form 10-K for the fiscal
year ended December 31, 1990.
* 10(a)(7) Form of Second Amendment to Restricted Stock Bonus Plan Agreements dated
February 22, 1991 between the Registrant and Haynes G. Griffin, Stephen
R. Leeolou, and L. Richardson Preyer, Jr., amending the Restricted Stock
Bonus Agreements dated October 12, 1987, filed as Exhibit 10(a)(7) to
the Registrant's Annual Report on Form 10-K for the fiscal year ended
December 31, 1990.
* 10(a)(8) Form of Third Amendment to Restricted Stock Bonus Plan Agreements dated
February 22, 1991 between the Registrant and Haynes G. Griffin, Stephen
R. Leeolou, L. Richardson Preyer, Jr., and Stephen L. Holcombe, amending
the Restricted Stock Bonus Agreements dated March 23, 1987, filed as
Exhibit 10(a)(8) to the Registrant's Annual Report on Form 10-K for the
fiscal year ended December 31, 1990.
* 10(a)(9) Form of Third Amendment to Restricted Stock Bonus Plan Agreement dated
February 22, 1991 between the Registrant and Stuart S. Richardson,
amending the Restricted Stock Bonus Plan Agreement dated March 23, 1987,
filed as Exhibit 10(a)(9) to the Registrant's Annual Report on Form 10-K
for the fiscal year ended December 31, 1990.
*10(a)(10) Form of Employment Agreement dated March 1, 1995 by and between
the Registrant and Haynes G. Griffin, filed as Exhibit 10(a)(10)
to the Registrant's Annual Report on Form 10-K for the fiscal
year ended December 31, 1995.
*10(a)(11) Form of Employment Agreement dated March 1, 1995 by and between
the Registrant and L. Richardson Preyer, Jr., filed as Exhibit
10(a)(11) to the Registrant's Annual Report on Form 10-K for
the fiscal year ended December 31, 1995.
*10(a)(12) Form of Employment Agreement dated March 1, 1995 by and between
the Registrant and Stephen R. Leeolou, filed as Exhibit 10(a)(12)
to the Registrant's Annual Report on Form 10-K for the fiscal
year ended December 31, 1995.
* 10(a)(13) Executive Officer Long-Term Incentive Compensation Plan adopted October
1, 1990 by the Registrant, filed as Exhibit 10(a)(13) to the
Registrant's Annual Report on Form 10-K to the fiscal year ended
December 31, 1990.
* 10(a)(14) Form on Nonqualified Option Agreements dated October 12, 1987 between
the Registrant and Stephen L. Holcombe, Ralph E. Hiskey, John F. Dille,
Jr., Charles T. Hagel, L. Richardson Preyer, Sr. and Robert A.
Silverberg, filed as Exhibit 10(a)(5) to the Registrant's Annual Report
on Form 10-K for the fiscal year ended December 31, 1988.
* 10(a)(15) Nonqualified Option Agreements dated October 12, 1987 between the
Registrant and Robert M. DeMichele, John F. Dille, Jr., L. Richardson
Preyer, Sr., Robert A. Silverberg and Thomas I. Storrs, filed as Exhibit
10(a)(8) to the Registrant's Annual Report on Form 10-K for the fiscal
year ended December 31, 1988.
* 10(a)(16) Form of Incentive Stock Option Agreements dated March 3, 1988 between
the Registrant and Stephen L. Holcombe and Richard C. Rowlenson, filed
as Exhibit 10(a)(9) to the Registrant's Annual Report on Form 10-K for
the fiscal year ended December 31, 1988.
* 10(a)(17) Form of Incentive Stock Option Agreements dated June 23, 1988 between
the Registrant and Charles T. Hagel, Haynes G. Griffin, L. Richardson
Preyer, Jr., and Stephen R. Leeolou, filed as Exhibit 10(a)(10) to the
Registrant's Annual Report on Form 10-K for the fiscal year ended
December 31, 1988.
*10(a)(18) Form of 1994 Long-Term Incentive Plan of the Registrant approved
May 4, 1994 by the Shareholders of the Registrant, as amended by
the Registrant's Board of Directors on July 20, 1994, filed as
Exhibit 10(a)(18) to the Registrant's Annual Report on Form 10-K
for the fiscal year ended December 31, 1995.
*10(a)(19) Form of Senior Management Severance Plan of the Registrant
adopted March 8, 1995, filed as Exhibit 10(a)(19) to the
Registrant's Annual Report on Form 10-K for the fiscal year
ended December 31, 1995.
*10(a)(20) Form of Severance Agreement for Senior Management Employees of
the Registrant, filed as Exhibit 10(a)(20) to the Registrant's
Annual Report on Form 10-K for the fiscal year ended
December 31, 1995.
10(a)(21) Form of Incentive Stock Option Agreement dated March 7, 1995
between the Registrant and Haynes G. Griffin, Stephen R.
Leeolou, L. Richardson Preyer, Jr., Stephen L. Holcombe,
Richard C. Rowlenson, and Stuart S. Richardson.
10(a)(22) Form of Non-Qualified Option Agreement dated March 7, 1995
between the Registrant and Haynes G. Griffin, Stephen R.
Leeolou, L. Richardson Preyer, Jr., Stephen L. Holcombe,
Richard C. Rowlenson, and Stuart S. Richardson.
EXHIBIT NO. DESCRIPTION
* 10(b)(1) Loan Agreement between the Registrant and various lenders led by The
Bank of New York and The Toronto-Dominion Bank as agents, dated as of
December 23, 1994, filed as Exhibit 2(a) to the Registrant's Current
Report on Form 8-K dated as of December 23, 1994.
* 10(b)(2) Security Agreement between the Registrant and various lenders led by The
Bank of New York and The Toronto-Dominion Bank, as Secured Party, dated
as of December 23, 1994, filed as Exhibit 2(b) to the Registrant's
Current Report on Form 8-K dated as of December 23, 1994.
* 10(b))(3) Master Subsidiary Security Agreement between the Registrant, certain of
its subsidiaries and various lenders led by The Bank of New York and The
Toronto-Dominion Bank, as Secured Party, dated as of December 23, 1994
filed as Exhibit 2(c) to the Registrant's Current Report on Form 8-K
dated as of December 23, 1994.
* 10(c)(1) 1993 Employee Stock Purchase Plan of the Registrant approved May 5, 1993
by the Shareholders of the Registrant, filed as Exhibit 28(a) to the
Registrant, filed as Exhibit 28 (a) to the Registrant's Registration
Statement on Form S-8, (File No. 33-69824).
* 10(c)(2) Form of Option Letter and Subscription Agreement, filed as Exhibit 28(b)
to the Registrant's Registration Statement in Form S-8 (File No.
33-69824).
* 10(d)(1) 1989 Stock Option Plan of the Registrant approved by the Board of
Directors of the Registrant on December 21, 1989, and approved by
Shareholders at a meeting held on May 10, 1990, filed as Exhibit
10(h)(1) to the Registrant's Annual Report on Form 10-K for the fiscal
year ended December 31, 1989.
* 10(d)(2) Form of Nonqualified Stock Option Agreements dated March 1, 1990 between
the Registrant and Haynes G. Griffin, L. Richardson Preyer, Jr., Stephen
R. Leeolou, Stephen L. Holcombe, and Stuart S. Richardson, filed as
Exhibit 10(h)(2) to the Registrant's annual Report on Form 10-K for the
fiscal year ended December 31, 1989.
* 10(d)(3) Form of Incentive Stock Option Agreement dated March 1, 1990 between the
Registrant and Richard C. Rowlenson, filed as Exhibit 10(h)(2) to the
Registrant's Annual Report on Form 10-K for the fiscal year ended
December 31, 1989.
* 10(d)(4) Form of Incentive Stock Option Agreement dated July 30, 1990 between the
Registrant and Stephen L. Holcombe, Richard C. Rowlenson, Sunir Kochhar
and Timothy G. Biltz, filed as Exhibit 10(f)(4) to the Registrant's
Annual Report on Form 10-K for the fiscal year ended December 31, 1990.
* 10(d)(5) Stock Option Agreement dated November 28, 1990 between the Registrant
and Stuart Smith Richardson, filed as Exhibit 10(f)(5) to the
Registrant's Annual Report on Form 10-K for the fiscal year ended
December 31, 1990.
* 10(d)(6) Form of Stock Option Agreements dated November 28, 1990 between the
Registrant and Haynes G. Griffin, Stephen R. Leeolou, L. Richardson
Preyer, Jr. and Stephen L. Holcombe, filed as Exhibit 10(f)(6) to the
Registrant's Annual Report on Form 10-K for the fiscal year ended
December 31, 1990.
* 10(d)(7) Incentive Stock Option Agreements dated November 28, 1990 between the
Registrant and Richard C. Rowlenson, filed as Exhibit 10(f)(7) to the
Registrant's Annual Report on Form 10-K for the fiscal year ended
December 31, 1990.
* 10(e)(1) Joint Venture Agreement by and among W&J Metronet, Inc., Vanguard
Cellular Systems of Coastal Carolina, Inc., Providence Journal
Telecommunications and the Registrant dated as of January 19, 1990,
filed as Exhibit 10(j) to the Registrant's Registration Statement on
Form S-4 (File No. 33-35054).
EXHIBIT NO. DESCRIPTION
* 10(e)(2) First Amendment and Assumption Agreement dated as of the 28th day of
December, 1990 to Joint Venture Agreement by and among W&J Metronet,
Inc., Vanguard Cellular Systems of Coastal Carolina, Inc., Providence
Journal Telecommunications and the Registrant dated as of January 19,
1990, filed as Exhibit 10(g)(2) to the Registrant's Annual Report on
Form 10-K for the fiscal year ended December 31, 1990.
* 10(f)(1) Stock Purchase Agreement by and between Geotek Industries, Inc. and
Vanguard Cellular Systems, Inc., dated as of December 29, 1993, filed as
Exhibit 1 to Schedule 13D dated December 29, 1993 with respect to the
Common Stock of Geotek Industries, Inc.
* 10(f)(2) Option Agreement by and between Geotek Communications, Inc. and Vanguard
Cellular Systems, Inc. dated as of February 23, 1994, filed as Exhibit 3
to Amendment 1 of Schedule 13D dated February 23, 1994 with respect to
the Common Stock of Geotek Communications, Inc.
* 10(f)(3) Management Agreement by and between Geotek Communications, Inc. and
Vanguard Cellular Systems, Inc. dated as of February 23, 1994, filed as
Exhibit 4 to Amendment 1 of Schedule 13D dated February 23, 1994 with
respect to the Common Stock of Geotek Communications, Inc.
* 10(f)(4) Registration Rights Agreement by and between Geotek Communications, Inc.
and Vanguard Cellular Systems, Inc. dated as of February 23, 1994 filed
as Exhibit 5 to Amendment 1 of Schedule 13D dated February 23, 1994 with
respect to the Common Stock of Geotek Communications, Inc.
* 10(f)(5) System Access Agreement by and between Geotek Communications, Inc. and
Vanguard Cellular Systems, Inc. dated as of February 23, 1994, filed as
Exhibit 6 to Amendment 1 of Schedule 13D dated February 23, 1994 with
respect to the Common Stock of Geotek Communications, Inc.
* 10(f)(6) Stockholders Voting Agreement dated as of February 23, 1994, filed as
Exhibit 7 to Amendment 1 of Schedule 13D dated February 23, 1994 with
respect to the Common Stock of Geotek Communications, Inc.
11 Calculation of fully diluted net loss per share for the three months
ended March 31, 1995 and 1994.
27 Financial Data Schedule.
* Incorporated by reference to the statement or report indicated.