SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _____ To _____
Commission file number 0-11174
WARWICK VALLEY TELEPHONE COMPANY
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(Exact name of registrant as specified in its charter)
New York 14-1160510
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(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
47 Main Street, Warwick, New York 10990
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (914) 986-8080
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Former name, former address and former fiscal year,
if changed since last report.
INDICATE BY CHECK 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
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Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date:
1,817,604 common shares, no par value, outstanding at September 30,
1999.
<PAGE>
PART 1 - FINANCIAL INFORMATION
Item 1. Financial Statements
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WARWICK VALLEY TELEPHONE COMPANY
CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1999 1998
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(Unaudited) (Audited)
<S> <C> <C>
CURRENT ASSETS:
Cash ................................................ $ 547,833 $ 593,867
Accounts receivable, less accounts receivable
allowance 1999--$65,800; 1998--$65,155; 4,361,421 3,709,447
Materials and supplies .............................. 1,333,107 1,598,443
Prepaid expenses .................................... 552,857 353,598
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6,795,218 6,255,355
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NONCURRENT ASSETS:
Unamortized debt issuance expense ................... 26,541 36,042
Other deferred charges .............................. 128,829 180,606
Investments ......................................... 2,670,360 2,302,747
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2,825,730 2,519,395
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PROPERTY, PLANT & EQUIPMENT:
Plant in service .................................... 43,209,199 40,188,147
Plant under construction ............................ 2,193,256 1,205,922
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45,402,455 41,394,069
Less: Accumulated depreciation .................. 18,551,961 16,927,427
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TOTAL PLANT ........................................... 26,850,494 24,466,642
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TOTAL ASSETS ..................................... $36,471,442 $33,241,392
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</TABLE>
<PAGE>
Item 1. Financial Statements
WARWICK VALLEY TELEPHONE COMPANY
CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1999 1998
------------- ------------
(Unaudited) (Audited)
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current maturities-long term debt .......................... $ 3,000,000 $ 0
Notes payable .............................................. 1,400,000 400,000
Accounts payable ........................................... 2,327,064 2,620,858
Advance billing and payments ............................... 57,896 100,146
Customer deposits .......................................... 134,412 133,433
Accrued taxes .............................................. 224,862 87,183
Accrued interest ........................................... 0 74,085
Accrued pension ............................................ 460,286 310,232
Other accrued expenses ..................................... 387,448 342,428
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7,991,968 4,068,365
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LONG-TERM DEBT ............................................... 4,000,000 7,000,000
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DEFERRED CREDITS:
Accumulated deferred federal income taxes .................. 2,298,845 2,283,976
Unamortized investment tax credits ......................... 128,297 158,447
Other deferred credits ..................................... 173,319 158,685
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2,600,461 2,601,108
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STOCKHOLDERS' EQUITY:
Preferred stock - 5% cumulative; $100 par value;
Authorized 7,500 shares;
Issued and outstanding 5,000 shares ...................... 500,000 500,000
Common stock - no par value;
Authorized shares: 2,160,000
Issued 1,990,956 for 9/30/99 and 1,990,626 for 12/31/98 .. 3,345,216 3,330,861
Retained earnings .......................................... 20,814,087 18,521,348
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24,659,303 22,352,209
Less: Treasury stock at cost, 173,352 shares 9/30/99
and 12/31/98, respectively ....................... 2,780,290 2,780,290
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21,879,013 19,571,919
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY ............... $36,471,442 $33,241,392
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</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>
Item 1. Financial Statements
WARWICK VALLEY TELEPHONE COMPANY
CONSOLIDATED STATEMENT OF INCOME
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
-------------------------------- ---------------------------------
1999 1998 1999 1998
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<S> <C> <C> <C> <C>
OPERATING REVENUES:
Local network service ........................... $ 921,447 $ 768,943 $ 2,678,902 $ 2,254,631
Network access and long distance
Network service ............................... 2,988,115 2,851,839 7,549,999 7,409,133
Other services and sales ........................ 2,787,044 2,315,499 7,845,563 6,568,069
------------ ------------ ------------ ------------
6,696,606 5,936,281 18,074,464 16,231,833
Less: Provision for uncollectibles .............. (7,950) (11,500) (29,350) (31,500)
------------ ------------ ------------ ------------
Total operating revenues ....................... 6,688,656 5,924,781 18,045,114 16,200,333
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OPERATING EXPENSES:
Plant specific .................................. 649,449 588,347 1,816,437 1,756,562
Plant non-specific:
Depreciation .................................. 847,485 736,076 2,446,774 2,144,478
Other ......................................... 147,214 164,678 445,186 471,460
Customer operations ............................. 1,365,868 1,080,543 3,733,358 3,152,391
Corporate operations ............................ 496,999 553,476 1,500,797 1,490,496
Cost of services and sales ...................... 938,095 897,264 1,878,716 1,760,058
------------ ------------ ------------ ------------
Total operating expenses ....................... 4,445,110 4,020,384 11,821,267 10,775,445
------------ ------------ ------------ ------------
OPERATING TAXES:
Federal income taxes ............................ 764,856 593,990 2,053,231 1,560,110
Property, revenue and payroll ................... 390,766 348,546 1,169,527 1,061,925
------------ ------------ ------------ ------------
Total operating taxes ......................... 1,155,622 942,536 3,222,758 2,622,035
------------ ------------ ------------ ------------
Operating income .............................. 1,087,924 961,861 3,001,089 2,802,853
NONOPERATING INCOME (EXPENSES)-NET: ................ 584,618 388,254 1,531,413 818,443
------------ ------------ ------------ ------------
Income available for fixed charges ............ 1,672,542 1,350,115 4,532,502 3,621,296
------------ ------------ ------------ ------------
FIXED CHARGES:
Interest on funded debt ......................... 138,375 138,375 415,125 415,125
Other interest charges .......................... 16,719 18,036 33,515 55,722
Amortization .................................... 3,167 3,167 9,501 9,501
------------ ------------ ------------ ------------
Total fixed charges ........................... 158,261 159,578 458,141 480,348
------------ ------------ ------------ ------------
NET INCOME .................................... 1,514,281 1,190,537 4,074,361 3,140,948
PREFERRED DIVIDENDS ................................ 6,250 6,250 18,750 18,750
------------ ------------ ------------ ------------
INCOME APPLICABLE TO COMMON STOCK ................ $ 1,508,031 $ 1,184,287 $ 4,055,611 $ 3,122,198
============ ============ ============ ============
NET INCOME PER AVERAGE SHARE OF
OUTSTANDING COMMON STOCK ....................... $ 0.83 $ 0.65 $ 2.23 $ 1.72
============ ============ ============ ============
CASH DIVIDENDS PAID PER SHARE ................... $ 0.35 $ 0.28 $ 0.97 $ 0.82
============ ============ ============ ============
AVERAGE SHARES OF COMMON STOCK
OUTSTANDING .................................... 1,817,549 1,817,229 1,817,366 1,812,639
============ ============ ============ ============
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>
Item 1. Financial Statements
WARWICK VALLEY TELEPHONE COMPANY
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
(Unaudited)
<TABLE>
<CAPTION>
1999 1998
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<S> <C> <C>
CASH FLOW FROM OPERATING ACTIVITIES:
Net Income ................................................................ $ 4,074,361 $ 3,140,948
Adjustments to reconcile net income to net cash
Provided by operating activities:
Depreciation and amortization ........................................... 2,456,275 2,153,979
Deferred income tax and investment tax credit ........................... (647) (22,561)
Interest charged to construction ........................................ (116,632) (32,970)
Change in assets and liabilities:
(Increase) Decrease in accounts receivable ................................ (651,974) 83,453
(Increase) Decrease in materials and supplies ............................. 265,336 (255,348)
(Increase) Decrease in prepaid expenses ................................... (199,259) (95,217)
(Increase) Decrease in deferred charges ................................... 51,777 67,785
Increase (Decrease) in accounts payable ................................... (293,794) 45,104
Increase (Decrease) in customers' deposits ................................ 979 6,859
Increase (Decrease) in advance billing and payment ........................ (42,250) 61,868
Increase (Decrease) in accrued expenses ................................... 213,648 9,631
Increase (Decrease) in other liabilities .................................. 45,020 121,291
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Net cash provided by operating activities ........................................ 5,802,840 5,284,822
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CASH FLOW FROM INVESTING ACTIVITIES:
Purchase of property, plant and equipment ................................. (4,830,627) (2,755,936)
Interest charged to construction .......................................... 116,632 32,970
Changes in other investments .............................................. (367,613) (758,671)
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Net cash used in investing activities ............................................ (5,081,608) (3,481,637)
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CASH FLOW FROM FINANCING ACTIVITIES:
Increase (Decrease) in notes payable ...................................... 1,000,000 (700,000)
Dividends ................................................................. (1,781,621) (1,504,708)
Sale of common stock ...................................................... 14,355 382,426
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Net cash provided by (used in) financing activities .............................. (767,266) (1,822,282)
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Increase (Decrease) in cash and cash equivalents ................................. (46,034) (19,097)
Cash and cash equivalents at beginning of year ................................... 593,867 482,534
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Cash and cash equivalents at end of year ......................................... $ 547,833 $ 463,437
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</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>
Item 1. Financial Statements
WARWICK VALLEY TELEPHONE COMPANY
NOTES TO FINANCIAL STATEMENTS
1. In the opinion of the management of the Warwick Valley Telephone
Company, the accompanying financial statements contain all adjustments
(consisting only of normal recurring adjustments) necessary to present
fairly the company's financial position as of September 30, 1999 and
1998, its income for the three-month and nine-month periods ended
September 30, 1999 and 1998 and its cash flow for the nine-month
periods ended September 30, 1999 and 1998.
These financial statements should be read in conjunction with the
financial statements and the notes included in the Company's Annual
Report on Form 10-k for the year ended December 31, 1998.
The results of operations for any interim period are not necessarily
indicative of the results of operations for a full year.
2. Non-operating Income and expenses for the three-month and nine-month
periods ended September 30, 1999 and 1998 were as follows:
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
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1999 1998 1999 1998
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<S> <C> <C> <C> <C>
Interest income ........................... $ 4,850 $ 10,797 $ 11,867 $ 12,791
Interest during construction .............. 44,095 19,485 116,632 32,970
G/L disposition certain property .......... (18,811) 28,855 34,680 43,365
Special charges ........................... (19,181) (17,396) (31,012) (26,688)
Other non-operating income ................ 573,665 346,513 1,399,246 756,005
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$ 584,618 $ 388,254 $1,531,413 $ 818,443
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</TABLE>
