UNITED STATES 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 June 30, 1998 Commission file number 333-23435
CHORUS COMMUNICATIONS GROUP, LTD.
(Exact Name of Registrant as Specified in its Charter)
WISCONSIN 39-1880843
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
8501 Excelsior Drive, Madison, Wisconsin 53717
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (608) 828-2000
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 June 30, 1998, there were 5,408,606 shares of Common Stock outstanding.
<PAGE>
CHORUS COMMUNICATIONS GROUP, LTD.
2nd QUARTER REPORT ON FORM 10-Q
INDEX
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets -
June 30, 1998 and December 31, 1997
Consolidated Statements of Income -
Three and Six Month Periods Ended June 30, 1998 and 1997
Consolidated Statements of Cash Flow -
Six Months Ended June 30, 1998 and 1997
Notes to Consolidated Financial Statements
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations
PART II. OTHER INFORMATION
Item 1. Legal proceedings
Item 6. Exhibits and Reports on Form 8-K
Signatures
All other schedules and compliance information called for by the instructions to
Form 10-Q have been omitted since the required information is not present or not
present in amounts sufficient to require submission.
<PAGE>
Part 1
FINANCIAL INFORMATION
Item 1. Financial Statements
CHORUS COMMUNICATIONS GROUP, LTD.
CONSOLIDATED BALANCE SHEETS
<TABLE>
June 30, December 31,
1998 1997
---------------------------------
In Thousands
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 4,387 $ 2,736
Temporary investments 2,000 2,500
Accounts receivable
Due from customers 3,329 3,045
Other, principally connecting companies 3,409 2,446
Inventories
Plant materials and supplies 648 542
Systems and parts 1,243 911
Other 1,185 1,498
--------- ---------
Total Current Assets 16,201 13,678
--------- ---------
PROPERTY, PLANT AND EQUIPMENT
In service and under construction 74,192 68,325
Less accumulated depreciation (30,515) (27,667)
--------- ---------
Total Property, Plant, and Equipment 43,677 40,658
--------- ---------
CELLULAR LIMITED PARTNERSHIP INTERESTS 3,715 3,715
PERSONAL COMMUNICATION SERVICES LICENSE 3,512 3,418
GOODWILL, net of amortization of $61 thousand 1,403 -
OTHER ASSETS 1,323 1,285
--------- ---------
TOTAL ASSETS $ 69,831 $ 62,754
========= =========
</TABLE>
(UNAUDITED)
<PAGE>
CHORUS COMMUNICATIONS GROUP, LTD.
CONSOLIDATED BALANCE SHEETS
<TABLE>
June 30, December 31,
1998 1997
------------------------------------
In Thousands
<S> <C> <C>
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Current maturities of long-term debt $ 798 $ 614
Notes payable to banks 899 1,328
Accounts payable 4,452 3,345
Accrued pension cost - 781
Other 1,663 1,005
--------- ---------
Total Current Liabilities 7,812 7,073
LONG-TERM DEBT 26,005 22,012
DEFERRED INCOME TAXES 3,136 3,142
OTHER LIABILITIES 1,685 1,384
--------- ---------
Total Liabilities 38,638 33,611
--------- ---------
MINORITY INTEREST 373 370
--------- ---------
SHAREHOLDERS' EQUITY
Common stock, no par value;
authorized 25 million shares; issued
and outstanding 5,408,606 and 5,368,606
shares, respectively 14,668 13,868
Retained earnings 16,152 14,905
--------- ---------
Total Shareholders' Equity 30,820 28,773
--------- ---------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 69,831 $ 62,754
========= =========
</TABLE>
See Notes to Consolidated Financial Statements
(UNAUDITED)
<PAGE>
CHORUS COMMUNICATIONS GROUP, LTD.
CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
Three Months Ended Six Months Ended
June 30, June 30, June 30, June 30,
1998 1997 1998 1997
------------------------------------------
In Thousands Except For Per Share Data
<S> <C> <C> <C> <C>
REVENUES AND SALES
Local exchange carrier services $6,201 $6,097 $12,796 $11,746
System sales and services 3,126 1,574 5,771 3,115
Other services and sales 1,842 1,380 3,540 2,503
-------- -------- -------- --------
Total Revenues and Sales 11,169 9,051 22,107 17,364
-------- -------- -------- --------
OPERATING COSTS AND EXPENSES
Cost of goods sold 2,172 915 3,990 1,779
Cost of services 1,667 1,577 3,482 3,170
Selling, general & administrative 3,232 2,834 6,688 5,747
Depreciation & amortization 1,353 1,166 2,643 2,333
-------- -------- -------- --------
Total Operating Costs
and Expenses 8,424 6,492 16,803 13,029
-------- -------- -------- --------
OPERATING INCOME 2,745 2,559 5,304 4,335
Other income 10 111 87 165
Interest expense (386) (338) (794) (673)
Minority interest (2) 6 (3) 11
-------- -------- -------- --------
INCOME BEFORE INCOME TAXES 2,367 2,338 4,594 3,838
Income tax expense 928 891 1,778 1,413
-------- -------- -------- --------
NET INCOME $1,439 $1,447 $2,816 $2,425
======== ======== ======== ========
EARNINGS PER SHARE $.27 $ .27 $ .52 $ .45
======== ======== ======== ========
Average common shares outstanding 5,409 5,369 5,409 5,367
======== ======== ======== ========
Dividends per share $.145 $0.135 * $0.29 $0.27 *
======== ======== ======== ========
</TABLE>
* The 1997 cash dividends per share are for Mid-Plains stock prior to the
June 1997 mergers.
See Notes to Consolidated Financial Statements
(UNAUDITED)
<PAGE>
CHORUS COMMUNICATIONS GROUP, LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
Six Months Ended
June 30, December 31,
1998 1997
------------ --------
In Thousands
<S> <C> <C>
OPERATIONS
Net income $ 2,816 $ 2,425
Adjustments to reconcile net income
to net cash from operations:
Depreciation and amortization 2,643 2,333
Deferred income taxes - (92)
Changes in current assets and
current liabilities:
Receivables - net (596) (732)
Inventories - net (41) (2)
Payables - net (169) (493)
Other - net 1,064 608
--------- ---------
Net cash from operations 5,717 4,047
--------- ---------
INVESTING
Capital expenditures (5,212) (2,899)
Personal Communication Services license (94) (729)
Acquisitions (net of cash acquired) (282) -
Short-term investments - net 500 127
Other - net 26 23
-------- ---------
Net cash (used in) investing (5,062) (3,478)
--------- ---------
FINANCING
Stock plans - 103
Dividends paid (1,569) (1,449)
Long-term debt issued 4,486 745
Long-term debt repaid (490) (318)
Short-term bank notes - net (1,431) 279
--------- ---------
Net cash from (used in) financing 996 (640)
--------- ---------
Increase (decrease) in cash and
cash equivalents 1,651 (71)
Cash and cash equivalents:
Beginning of period 2,736 1,902
--------- ---------
End of period $ 4,387 $ 1,831
========= =========
Cash paid during the period:
Interest $ 785 $ 670
Income taxes $ 1,611 $ 1,122
</TABLE>
See Notes to Consolidated Financial Statements
(UNAUDITED)
<PAGE>
CHORUS COMMUNICATIONS GROUP, LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
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 are 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,
1997.
In the opinion of management, the information furnished reflects all
adjustments, consisting of normal recurring accruals and an adjustment
for pension settlement discussed in Note 4, which are necessary for a
fair statement of the results for the interim periods. The results for
the six months ended June 30, 1998 are not necessarily indicative of
the results of operations which may be expected for the entire year
ending December 31, 1998.
2. MERGERS
Effective June 1, 1997, Mid-Plains, Inc. (Mid-Plains) and Pioneer
Communications, Inc. (Pioneer) merged into subsidiaries of a new
holding company, Chorus Communications Group, Ltd. The mergers have
been accounted for as a pooling-of-interests.
3. ACQUISITIONS
On January 29, 1998, Chorus acquired Executive Systems & Software,
Inc., d/b/a The ComputerPlus, and IntraNet Inc., which were under
common ownership. The businesses were acquired for 40,000 shares of
common stock, cash of $500,000 and notes payable of $500,000.
The acquisitions were accounted for as a purchase and, accordingly, the
operating results of The ComputerPlus and Intranet, Inc. have been
included in Chorus' consolidated financial statements since the date of
acquisition. The excess of the aggregate purchase price over the fair
value of net assets acquired of $1.4 million is being amortized over 10
years.
The following summarized unaudited pro forma consolidated results of
operations for the six months ended June 30, 1998 and 1997 assumes the
acquisition had occurred on January 1 of each year.
PRO FORMA INFORMATION
<TABLE>
(In thousands, except for per share data)
Six Months Ended
June 30, June 30,
1998 1997
---------- -------
<S> <C> <C>
Net Sales $22,664 $21,644
Net Income 2,704 2,298
Earnings per share $ .50 $ .43
</TABLE>
These amounts include The ComputerPlus' and Intranet, Inc.'s actual
results for the six months ended June 30, 1998 and 1997. These amounts
are based upon certain assumptions and estimates. The pro forma results
do not necessarily represent results which would have occurred if the
acquisition had taken place on the basis assumed above, nor are they
indicative of the results of future combined operations.
<PAGE>
4. STOCK SPLIT
On April 1, 1998, Chorus declared a 2-for-1 common stock split.
Retroactive effect has been given to the stock split in all common
share and per share data.
5. PENSION PLAN SETTLEMENT
In April of 1997, Mid-Plains, Inc. a subsidiary of Chorus, terminated
its defined benefit pension plan. In June of 1998, upon receiving final
approval for the termination from the Internal Revenue Service, plan
settlement was made. The actual settlement was lower than what
previously had been actuarially determined, resulting in a decrease in
1998 pension plan expense of $325,000.
6. OPERATING SEGMENTS
Chorus organizes its business into two reportable segments: local
exchange carrier (LEC) services and system sales and services. The LEC
services segment provides telephone and data services to customers in
local exchanges located in southern Wisconsin. As a result of
acquisitions in January 1998, the system sales and services operations,
which provide the sale, installation and servicing of business phone
systems, was expanded to include computer network systems integration
and computer sales. Chorus also has operations in long distance,
Internet services, and directory publishing that do not meet the
quantitative thresholds for reportable segments.
<TABLE>
(In Thousands) Local Exchange Systems Sales
Carriers and Services Other Total
Three Months
Ended June 30,
1998 1997 1998 1997 1998 1997 1998 1997
---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues and sales
External customers- $6,201 $6,097 $3,126 $1,574 $1,842 $1,380 $11,169 $9,051
Intersegment 186 266 0 0 138 0 324 266
Segment profit
(loss) 1,439 1,375 (7) 85 9 (16) 1,441 1,444
Six Months
Ended June 30,
1998 1997 1998 1997 1998 1997 1998 1997
---- ---- ---- ---- ---- ---- ---- ----
Revenues and sales
External customers $12,796 $11,746 $5,771 $3,115 $3,540 $2,503 $22,107 $17,364
Intersegment 365 597 0 0 166 0 531 597
Segment profit
(loss) 2,772 2,345 7 178 40 (105) 2,819 2,418
</TABLE>
Reconciliation of Segment Information
<TABLE>
(In Thousands) Three Months Ended Six Months Ended
-------------------- ------------------
June 30, June 30, June 30, June 30,
1998 1997 1998 1997
-------- -------- -------- ------
<S> <C> <C> <C> <C>
Profit
Total profit for
reportable segments $ 1,432 $ 1,460 $ 2,779 $ 2,523
Other profit (loss) 9 (16) 40 (105)
Unallocated amounts:
Non-operating segment (4) (4)
Minority interest (2) 7 (3) 11
---------- ------- ------- -------
Net Income $ 1,439 $ 1,447 $ 2,816 $ 2,425
======= ======= ======= =======
</TABLE>
<PAGE>
6. CONTINGENCIES
On May 14, 1998, the Public Service Commission of Wisconsin (the
"Commission") issued an order which certified two competitors, TDS
Metrocom, Inc., and KMC Telecom, Inc., to provide local telephone
service in the territory served by Mid-Plains, Inc. The Commission also
terminated the rural telephone company exemption of Mid-Plains as it
pertains to the interconnection request of TDS. Mid-Plains has decided
not to challenge the certification of TDS or KMC and is proceeding with
interconnection agreements with TDS. Mid-Plains continues to challenge
the determination that Mid-Plains has given a blanket waiver of its
franchise and rural exemption rights. Mid-Plains expects that
competition will have some adverse effect upon its revenues in the
future. The full extent of the effect of competition is unknown at this
time.
Management is continuing to study options for development of its
Personal Communication System ("PCS") license. Build-out of the system
would require substantial capital and operating expenditures over the
next several years in a highly competitive market.
There has been no resolution of the cellular limited partnership
dispute resulting from the company's holding of the PCS license in an
area partially served by the cellular partnership. Management believes
that none of its actions conflict with the partnership agreement.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Effective June 1, 1997, Mid-Plains, Inc. (Mid-Plains) and Pioneer
Communications, Inc. (Pioneer) merged into subsidiaries of a new holding
company, Chorus Communications Group, Ltd. The mergers have been accounted for
as a pooling-of-interests and, accordingly, historical financial data shown
below has been reported as if the companies have always been one.
Effective January 29, 1998, Chorus acquired Executive Systems & Software, Inc.,
d/b/a/ The ComputerPlus and IntraNet, Inc. The acquisitions were accounted for
under the purchase method of accounting and accordingly, the results of
operations of The ComputerPlus and IntraNet, Inc. have been included in the
consolidated results of operations of Chorus from the date of acquisition.
RESULTS OF OPERATIONS
OVERVIEW
Chorus' consolidated net income was $1.4 million for both the three months ended
June 30, 1998 and 1997. For the first six months of 1998, net income reflected
growth of $0.4 million, to $2.8 million, as compared to the same period in 1997.
Revenues increased $2.1 million and $4.7 million for the three and six months
ended June 30, 1998, respectively, as compared to the same periods in 1997. The
acquisition of The ComputerPlus and IntraNet, Inc. accounted for the majority of
increases ($1.9 million and $3.4 million, respectively).
Operating costs and expenses increased $1.9 million and $3.8 million for the
three and six months ended June 30, 1998, respectively, as compared to the same
periods in 1997. The operations of the acquired companies noted above accounted
for $1.8 million and $3.2 million of the increase. Additionally, due to the
settlement of a subsidiary's defined benefit pension plan, (Note 4 to the
Consolidated Financial Statements) operating expenses decreased $0.3 million for
the three and six months ended June 30, 1998 as compared to the same periods in
1997.
RESULTS OF OPERATIONS OF THE BUSINESS SEGMENT
Chorus' primary operations are local exchange carrier services and system sales
and services.
Local Exchange Carrier Services
LEC services provide telephone and data services to customers in local exchanges
located in southern Wisconsin. LEC services operating income consisted of the
following:
<TABLE>
(In Thousands) Three Months Ended Six Months Ended
-------------------- ------------------
June 30, June 30, June 30, June 30,
1998 1997 1998 1997
-------- -------- -------- ------
<S> <C> <C> <C> <C>
Revenues and Sales $6,387 $ 6,363 $13,161 $12,343
Operating Costs and Expenses 3,653 3,906 7,936 8,119
------- ------- ------- -------
LEC Services Operating Income 2,734 2,457 5,225 4,224
Intercompany Eliminations (186) (266) (365) (597)
------- ------- ------- -------
Operating Income $ 2,548 $ 2,191 $ 4,860 $ 3,627
======= ======= ======= =======
</TABLE>
<PAGE>
LEC services revenues are derived from local network services, interstate
network access, intrastate network access and other services. Local service
revenues are based on fees charged to customers for providing local telephone
exchange service within designated franchise areas. Local service revenues
increased $0.4 million and $0.8 million for the three and six months ended June
30, 1998 as compared to the same periods in 1997. This was principally due to
Mid-Plains Alternative Regulation Plan, which raised local service rates on
September 1, 1997, having the effect of increasing local service revenues by
$0.2 million and $0.4 million for the three and six months ended June 30, 1998
as compared to 1997. Additionally, through April of 1998, demand for LEC
services had been growing at 8%. However, as stated in Note 6 to the financial
statements, in May of 1998, TDS Metrocom, Inc. ("TDS") and KMC Telecom, Inc.
were certified to offer local service in Mid-Plains service territory. TDS,
whose corporate offices are located within the service territory of Mid-Plains,
began serving their own corporate offices, reducing by 1600 the number of access
lines served by Mid-Plains. This reduced the average growth rate of access lines
of Chorus to 3.3% at June 30, 1998. To date, this is the only significant access
line loss experience by Mid-Plains, but management is unable to determine at
this time the full extent of future local service revenue loss from competition.
Interstate and intrastate network access revenues are based on fees charged to
interexchange carriers that use the LECs' local network to provide long distance
service to their customers. Interstate revenues declined $0.1 million for the
three months ended June 30, 1998, while growing $0.4 million for the six months
ended June 30, 1998, both as compared to 1997. This was due to higher demand for
access services as evidenced by a 12% growth in minutes of use for the first
half of 1998 as compared to the first half of 1997, offset by a 7% decrease in
average rates. Also in the first quarter of 1997, Chorus recorded a true-up
adjustment from the National Exchange Carrier Association ("NECA") which reduced
interstate network access revenues by $0.2 million. NECA has also advised Chorus
that effective July 1, 1998, an additional 9% reduction in interstate access
rates is anticipated.
Intrastate network access revenues decreased $0.3 million and $0.5 million for
the three and six months ended June 30, 1998 as compared to the same time
periods in 1997. This was primarily due to Mid-Plains Alternative Regulation
Plan which lowered intrastate network access rates.
Operating costs and expenses decreased $0.3 million and $0.2 million for the
three and six months ended June 30, 1998 as compared to the same time period in
1997. The decrease was due primarily from the settlement of Mid-Plains defined
benefit pension plan which reduced operating expenses by $0.3 million in June of
1998 (see Note 4 of the financial statements).
System Sales and Services
System sales and services sell business systems and provide installation and
services throughout southern Wisconsin. Additionally, with the acquisition of
The ComputerPlus, this segment was expanded to include computer network systems
integration and computer sales.
<PAGE>
System sales and services operating income consisted of the following:
<TABLE>
(In Thousands) Three Months Ended Six Months Ended
-------------------- ------------------
June 30, June 30, June 30, June 30,
1998 1997 1998 1997
-------- -------- -------- ------
<S> <C> <C> <C> <C>
Revenues and Sales $ 3,126 $ 1,574 $ 5,771 $ 3,115
Operating Costs and Expenses 3,109 1,448 5,708 2,851
------- ------- ------- -------
System Sales and Services
Operating Income 17 126 63 264
Intercompany Eliminations 27 52 36 67
------- ------- ------- -------
Operating Income $ 44 $ 178 $ 99 $ 331
======= ======= ======= =======
</TABLE>
System sales and services revenues increased $1.6 and $2.7 million for the three
and six months ended June 30, 1998, respectively, as compared to the same
periods in 1997. The revenue increases were due to the acquisition of The
ComputerPlus whose revenues are included in the financial statements from the
date of the acquisition offset by lower sales of business phone systems.
Operating costs and expenses increased $1.7 million and $2.9 million for the
three and six months ended June 30, 1998 as compared to the same periods in
1997. This was due to cost of goods sold which increased by $1.3 million and
$2.2 million, primarily as a result of the purchase of The ComputerPlus. In
addition, selling, general and administrative expenses increased $0.4 million
and $0.7 million, for the three and six months ended June 30, 1998,
respectively, due to the operations of the acquisition.
Other Services and Sales
Other services and sales include operations from long distance, Internet and
directory publishing operations. Other services and sales operating income
consisted of the following:
<TABLE>
(In Thousands) Three Months Ended Six Months Ended
-------------------- ------------------
June 30, June 30, June 30, June 30,
1998 1997 1998 1997
-------- -------- -------- ------
<S> <C> <C> <C> <C>
Revenues and Sales $ 1,980 $ 1,380 $ 3,706 $ 2,503
Operating Costs and Expenses 1,986 1,405 3,690 2,657
------- ------- ------- -------
Other Services and Sales Operating
Income (Loss) (6) (25) 16 (154)
Intercompany Eliminations 159 215 329 531
------- ------- ------- -------
Operating Income $153 $ 190 $ 345 $ 377
======= ======= ======= =======
</TABLE>
Revenues from other services and sales increased $0.6 million and $1.2 million
for the three and six months ended June 30, 1998, as compared to the same
periods in 1997. The increase was due in part to the acquisition of IntraNet,
Inc., which accounted for $0.4 million and $0.6 million of the increase for
three and six months ended June 30, 1998, respectively. Additionally, a
short-term rental agreement on office property accounted for $0.2 million and
$0.3 million of the increases during the same time periods. The revenue growth
was also due to the overall expansion in customer base. This was offset in part
from the termination in October of 1997 of a temporary arrangement to resell
intralata toll service. The increases in operating costs and expenses for the
three and six months ended June 30, 1998 as compared to the same time periods in
1997 were primarily due to the acquisition of IntraNet, Inc. as well as growth
in internal operations.
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
OVERVIEW
Chorus requires funds primarily for its construction programs, the maturity and
retirement of long-term debt, dividend payments and investments. The capital
resources available to meet these requirements are provided through operating
and financing activities. Net cash from operating activities of Chorus and its
subsidiaries for the first six months of 1998 was $5.7 million.
INVESTING ACTIVITIES AND CAPITAL REQUIREMENTS
The primary capital requirement of Chorus has historically consisted of
expenditures under its construction program. Total construction expenditures for
the first six months of 1998 was $5.2 million. Additionally, Chorus acquired
Executive Systems & Software, Inc., d/b/a/ The ComputerPlus and IntraNet, Inc.
for 40,000 shares of common stock, $0.5 million cash and notes of $0.5 million
to be paid over two years.
FINANCING ACTIVITIES
During the first six months of 1998, Chorus borrowed an additional $4.5 million
in long term debt while repaying $0.5 million of its long-term debt.
It is anticipated that the capital requirements for Chorus' construction
programs, maturity and retirement of long-term debt, and dividend payments will
be provided for with cash flow from operating activities and the issuance of
debt.
As further explained in Note 6 to the financial statements, management is
continuing to study options for development of its Personal Communication System
("PCS") license for which build-out of the system would require substantial
capital and operating expenditures over the next several years. As part of this
study, management is also considering financing alternatives, which include the
issuance of debt, equity financing and the inclusion of additional partners in
PCS-WI.
At August 7, 1998, Chorus has available unused lines-of-credit of $13 million.
Chorus has experienced no difficulty in obtaining funds for its construction
programs or other purposes. However, competition could have a negative impact on
Chorus' future operations and cash flows.
REGULATION AND COMPETITION
As more fully discussed in Part II Item 1 Legal Proceedings, Mid-Plains is
subject to future competition which Mid-Plains expects will have some adverse
effect upon its future revenues. The extent of that effect is unknown at this
time.
FORWARD-LOOKING STATEMENTS
The Company cautions that except for historical information, the matters
discussed or incorporated by reference in the Quarterly Report on Form 10-Q are
forward-looking statements that involve risks and uncertainties that may affect
the Company's actual results and cause results to differ materially from such
forward-looking statements. Such risks and uncertainties include, but are not
limited to rapid technological developments and changes in the
telecommunications and information services industries; ongoing deregulation
(and the resulting likelihood of significantly increased price and
product/service competition) in the telecommunications industry and regulatory
limitations on the Company's ability to change its pricing for communications
services. In addition to these factors, actual future outcomes and results may
differ materially because factors including (without limitation) market
conditions and growth rates, economic conditions, policy changes and the
continued availability of financing in the amounts, at the terms, and on the
conditions necessary to support the Company's future business, and other factors
indicated from time to time in the Company's filings with the Securities and
Exchange Commission. Such forward-looking statements reflect only information
available at the time this report is being filed, as a result the Company
undertakes no obligation to update the statements to reflect subsequent
circumstances or events.
<PAGE>
PART II.
OTHER INFORMATION
Item 1. Legal Proceedings
On May 14, 1998, the Public Service Commission of Wisconsin (the "Commission")
issued an order which certified two competitors, TDS Metrocom Inc. and KMC
Telecom, Inc. to provide local phone service in the territory served by
Mid-Plains, Inc. The Commission also terminated the rural telephone company
exemption of Mid-Plains as it pertains to the interconnection request of TDS.
Mid-Plains has decided not to challenge the certification of TDS or KMC and is
proceeding with interconnection agreements with TDS. Mid-Plains continues to
challenge the determination that Mid-Plains has given a blanket waiver of its
franchise and rural exemption rights. As a result of the authorization of two
competitors, Mid-Plains does expect that competition will have some adverse
effect upon its revenues in the future. The full extent of that effect is
unknown at this time.
Item 6. Exhibits and Reports on Form 8-K
(a) List of Exhibits
(27) Financial Data Schedule
<PAGE>
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.
CHORUS COMMUNICATIONS GROUP, LTD.
(Registrant)
Date: August 14, 1998 /s/Dean W. Voeks
Dean W. Voeks
Chief Executive Officer
Date: August 14, 1998 /s/Howard G. Hopeman
Howard G. Hopeman
Executive Vice-President and
Chief Financial Officer
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> JUN-30-1998
<CASH> 4,387
<SECURITIES> 0
<RECEIVABLES> 6,738
<ALLOWANCES> 0
<INVENTORY> 1,891
<CURRENT-ASSETS> 16,201
<PP&E> 74,192
<DEPRECIATION> 30,515
<TOTAL-ASSETS> 69,831
<CURRENT-LIABILITIES> 7,812
<BONDS> 0
0
0
<COMMON> 14,668
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</TABLE>
