<PAGE> 1
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
(X) Quarterly report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended February 28, 1994
( ) 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 0-10040
Jones Spacelink, Ltd.
Exact name of registrant as specified in its charter
Colorado #84-0835095
State or other jurisdiction of I.R.S. employer I.D.#
incorporation or organization
P.O. Box 3309, Englewood, Colorado 80155-3309
Address of principal executive offices
(303) 792-9191
Registrant's telephone number
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_____
Number of shares outstanding of each of the issuers' classes of common stock,
as of April 8, 1994:
77,632,700 Class A Common Stock, par value $.01 per share
415,000 Class B Common Stock, par value $.01 per share
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JONES SPACELINK, LTD. AND SUBSIDIARIES
I N D E X
<TABLE>
<CAPTION>
Page
Number
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<S> <C>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements.
Unaudited Consolidated Balance Sheets
February 28, 1994 and May 31, 1993 3-4
Unaudited Consolidated Statements of Operations
Three and Nine Months Ended February 28, 1994 and 1993 5
Unaudited Consolidated Statements of Cash Flows
Nine Months Ended February 28, 1994 and 1993 6
Notes to Unaudited Consolidated Financial Statements
February 28, 1994 7-9
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 10-18
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K. 19
</TABLE>
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JONES SPACELINK, LTD. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
February 28, May 31,
ASSETS 1994 1993
- ------ --------------- --------------
(In Thousands)
<S> <C> <C>
CASH AND CASH EQUIVALENTS $ 4,835 $ 1,348
RECEIVABLES:
Trade receivables, net of allowance for doubtful
accounts of $790,000 and $577,000 8,169 6,687
Affiliated entities, net of allowance for doubtful
accounts of $1,515,000 and $1,351,000 24,072 19,510
Other 736 517
INVESTMENT IN CABLE TELEVISION PROPERTIES:
Property, plant and equipment, at cost, net of
accumulated depreciation of $131,760,000
and $111,155,000 200,375 194,942
Franchise costs, net of accumulated amortization
of $88,467,000 and $76,148,000 96,538 94,912
Subscriber lists, net of accumulated
amortization of $33,060,000 and $27,780,000 23,393 23,948
Costs in excess of interests in net assets
purchased, net of accumulated amortization
of $6,192,000 and $5,287,000 43,147 41,251
Noncompete agreements, net of accumulated
amortization of $1,014,000 and $1,722,000 531 792
Investments in cable television managed
partnerships and affiliates 90,035 59,061
----------- ----------
Total Investment in Cable
Television Properties 454,019 414,906
----------- ----------
DEFERRED TAX ASSET, net of valuation allowance
of $33,535,000 and $26,161,000 8,304 6,667
DEPOSITS, PREPAID EXPENSES AND OTHER 26,716 24,334
----------- ----------
Total Assets $ 526,851 $ 473,969
=========== ==========
</TABLE>
The accompanying notes to unaudited consolidated financial statements
are an integral part of these consolidated balance sheets.
3
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JONES SPACELINK, LTD. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
February 28, May 31,
LIABILITIES AND SHAREHOLDERS' INVESTMENT 1994 1993
- ---------------------------------------- ------------ ------------
(In Thousands)
<S> <C> <C>
LIABILITIES:
Accounts payable and accrued liabilities $ 41,333 $ 40,722
Subscriber prepayments and deposits 5,382 5,582
Credit facility and other debt of
Jones Spacelink, Ltd. 73,194 69,265
Credit facility of Jones Intercable, Inc. 115,000 46,000
Subordinated debentures and other debt of
Jones Intercable, Inc. 281,052 281,214
------------- -------------
Total Liabilities 515,961 442,783
DEFERRED REVENUE AND INCOME 3,166 2,718
MINORITY INTERESTS IN CONSOLIDATED SUBSIDIARIES 6,693 21,480
SHAREHOLDERS' INVESTMENT:
Class A Common Stock, $.01 par value and a
$1.00 liquidation preference, 220,000,000
shares authorized; 77,572,700 shares
issued and outstanding at February 28, 1994
and May 31, 1993 776 776
Class B Common Stock, $.01 par value, and a
$1.00 liquidation preference after liquidation
preference to Class A Common Stock, 415,000
shares authorized, issued and outstanding 4 4
Additional paid-in capital 47,259 47,126
Accumulated deficit (44,616) (38,520)
Less: Treasury stock of Jones Intercable, Inc.
at cost, net of minority interests (2,392) (2,398)
------------- -------------
Total Shareholders' Investment 1,031 6,988
------------- -------------
Total Liabilities and Shareholders'
Investment $ 526,851 $ 473,969
============= =============
</TABLE>
The accompanying notes to unaudited consolidated financial statements
are an integral part of these consolidated balance sheets.
4
<PAGE> 5
JONES SPACELINK, LTD. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
For the Three Months For the Nine Months
Ended February 28, Ended February 28,
---------------------------- -------------------------
1994 1993 1994 1993
----------- ---------- -------- --------
(In Thousands, except Per Share Data)
<S> <C> <C> <C> <C>
REVENUES:
Subscriber service fees $ 34,157 $ 33,355 $ 100,728 $ 91,863
Management fees 4,853 4,640 14,525 14,241
Encryption sales and manufacturing services 1,656 886 4,614 3,015
Audio programming services 230 773 1,947 2,179
Brokerage fees 78 127 233 722
Partnership fees, distributions and other 491 264 1,403 667
---------- --------- --------- ---------
Total Revenues 41,465 40,045 123,450 112,687
COSTS AND EXPENSES:
Operating, general and administrative expenses,
including amounts allocated from Jones
International, Ltd. of $511,000 and $454,000
for the three months ended 1994 and 1993,
respectively, and $997,000 and $968,000
for the nine months ended 1994 and 1993,
respectively (25,704) (25,499) (75,644) (67,021)
Depreciation and amortization (13,425) (13,646) (39,099) (38,345)
---------- --------- --------- ---------
Operating Income 2,336 900 8,707 7,321
OTHER INCOME (EXPENSE):
Interest expense (10,378) (11,775) (29,957) (33,360)
Equity in losses of partnerships and
affiliated companies (1,325) (971) (3,956) (3,082)
Interest income 1,005 853 2,849 3,058
Loss on sale of assets - - - (1,753)
Other, net (331) 265 (731) (394)
---------- --------- --------- ---------
Loss Before Income Taxes, Minority Interests,
Extraordinary Item and Accounting Change (8,693) (10,728) (23,088) (28,210)
INCOME TAX BENEFIT 809 519 1,855 1,498
---------- --------- --------- ---------
Loss Before Minority Interests, Extraordinary
Item and Accounting Change (7,884) (10,209) (21,233) (26,712)
MINORITY INTERESTS IN NET LOSSES OF
CONSOLIDATED SUBSIDIARIES 5,497 7,737 15,102 19,656
---------- --------- --------- ---------
Loss Before Extraordinary Item and Accounting Change (2,387) (2,472) (6,131) (7,056)
EXTRAORDINARY ITEM:
Loss on early extinguishment of debt by
Jones Intercable, Inc., net of related
minority interests and income taxes - 369 - (1,299)
CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING METHOD:
Change in method of accounting for income taxes,
net of minority interests - - - 560
---------- --------- --------- ---------
NET LOSS $ (2,387) $ (2,103) $ (6,131) $ (7,795)
========== ========= ========= =========
PER SHARE DATA:
Net loss before extraordinary item $ (.03) $ (.03) $ (.08) $ (.09)
Effect of extraordinary item - - - (.02)
Accounting Change - - - .01
---------- --------- --------- ---------
NET LOSS PER COMMON SHARE $ (.03) $ (.03) $ (.08) $ (.10)
========== ========= ========= =========
WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING 77,988 76,962 77,988 76,953
========== ========= ========= =========
</TABLE>
The accompanying notes to unaudited consolidated financial statements
are an integral part of these consolidated statements.
5
<PAGE> 6
JONES SPACELINK, LTD. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF CASHFLOWS
<TABLE>
<CAPTION>
For the Nine Months
Ended February 28,
-------------------------
1994 1993
-------- ------
(In Thousands)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (6,131) $ (7,795)
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
Minority interests in net losses of
consolidated subsidiaries (15,102) (19,656)
Extraordinary loss on early extinguishment
of debt by Jones Intercable, Inc., net of taxes and
minority interests - 1,299
Cumulative effect of change in method
of accounting for income taxes, net of minority interests - (560)
Loss on sale of assets - 1,753
Depreciation and amortization 39,099 38,345
Deferred distribution revenue - 4,778
Deferral (recognition) of revenue and income 448 (248)
Equity in losses of limited partnerships and
affiliated companies 3,956 3,082
Increase in trade accounts receivable (1,482) (257)
Increase in other receivables, deposits,
prepaid expenses and other assets (4,655) (2,714)
Increase (decrease) in accounts payable and accrued
liabilities and subscriber prepayments
and deposits (812) 5,436
--------- ---------
Net cash provided by operating activities 15,321 23,463
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant and equipment, net (20,623) (20,772)
Purchase of cable television system by Jones Intercable, Inc. (27,880) (72,486)
Investments in cable television partnerships and affiliates (22,958) (3,885)
Investment in Mind Extension University, Inc.
by Jones Intercable, Inc. (11,618) (8,349)
Sale of cable television system - 1,377
Other, net 2,720 3,631
--------- ---------
Net cash used in investing activities (80,359) (100,484)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings by Jones Spacelink, Ltd. 4,019 2,437
Repayment of borrowings by Jones Spacelink, Ltd. (89) (254)
Proceeds from borrowings by Jones Intercable, Inc. 69,000 60,000
Repayment of borrowings by Jones Intercable, Inc. - (111,000)
Proceeds from debenture offering by Jones Intercable, Inc. - 155,735
Redemption of debentures by Jones Intercable, Inc. - (79,462)
Increase in advances to affiliated entities (4,562) (5,110)
Decrease in minority interests in consolidated subsidiaries 315 49,922
Other, net (158) 5,021
--------- ---------
Net cash provided by financing activities 68,525 77,289
--------- ---------
INCREASE IN CASH AND CASH EQUIVALENTS 3,487 268
CASH AND CASH EQUIVALENTS, AT BEGINNING OF PERIOD 1,348 2,954
--------- ---------
CASH AND CASH EQUIVALENTS, AT END OF PERIOD $ 4,835 $ 3,222
========= =========
SUPPLEMENTAL CASH FLOW DISCLOSURES:
Interest Paid $ 33,595 $ 31,490
========= =========
Income Taxes Received $ 90 $ -
========= =========
</TABLE>
The accompanying notes to unaudited consolidated financial statements
are an integral part of these consolidated statements.
6
<PAGE> 7
JONES SPACELINK, LTD. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
February 28, 1994
(1) Basis of Presentation:
This Form 10-Q is being filed in conformity with the Securities and
Exchange Commission's requirements for unaudited financial statements and
does not contain all of the necessary footnote disclosures required for a
fair presentation of Jones Spacelink, Ltd. ("Spacelink") and
subsidiaries' financial position, results of operations and cash flows in
conformity with generally accepted accounting principles. In the opinion
of management, this data does include all adjustments, consisting of
normal recurring accruals, necessary to present fairly the financial
position of Spacelink and its subsidiaries at February 28, 1994 and May
31, 1993, and the results of their operations and their cash flows for the
three and nine months ended February 28, 1994 and 1993. Results of
operations for these periods are not necessarily indicative of results to
be expected for the full year.
Spacelink's unaudited consolidated financial statements include the
accounts of Jones Futurex, Inc. ("Futurex"), and Spacelink's other wholly
owned subsidiaries, as well as the accounts of its other subsidiaries: The
Jones Group, Ltd. ("Jones Group"), Jones Galactic Radio, Inc. ("Galactic
Radio"), Jones Earth Segment, Inc. ("Earth Segment") and Jones Intercable,
Inc. ("Intercable"). At February 28, 1994, Spacelink owned directly 80.1
percent and indirectly an additional 3.3 percent of the Common Stock of
Jones Group, 81 percent directly and indirectly 3.2 percent of Galactic
Radio, 81 percent of Earth Segment and approximately 58 percent of the
outstanding Common Stock (17 percent of both classes of outstanding
shares) of Intercable.
Because Intercable's Common Stock has a voting preference over
Intercable's Class A Common Stock, Spacelink's majority ownership of
Intercable's Common Stock enables it to elect approximately 75 percent of
Intercable's Board of Directors. Although Spacelink effectively controls
Intercable through its ability to control the election of 75 percent of
Intercable's Board of Directors, certain provisions of Intercable's loan
agreements limit the amount of funds it may loan or advance to its
affiliates, including Spacelink. As a result of these limitations, the
net assets of Intercable generally are not available to Spacelink to fund
its operating or capital needs. In addition, Spacelink bears no
responsibility for the outstanding obligations, commitments or
contingencies of Intercable. However, these limitations will not impair
the ability of Spacelink to pledge its equity holdings in Intercable,
although any such pledge is subject to the express approval of Spacelink's
and Intercable's Chairman of the Board and Chief Executive Officer, Glenn
R. Jones, or his personal representative. Spacelink's share of the net
restricted assets of Intercable, defined as Intercable's total
shareholders' investment less related minority interests, included in the
accompanying balance sheet was $1,283,000 at February 28, 1994.
(2) Possible Sale of Spacelink's Assets to Intercable:
On November 12, 1993, Spacelink and Intercable announced that they have
commenced negotiations regarding the possible sale of substantially all of
the operating assets of Spacelink to Intercable in exchange for shares of
Class A Common Stock of Intercable to Spacelink. In December 1993,
Spacelink's Board of Directors formed a special committee of outside
directors to negotiate the terms and conditions of the proposed
transaction on behalf of Spacelink. The negotiations are continuing and
no agreement on the terms and conditions of the proposed transaction has
been reached.
7
<PAGE> 8
(3) Equity Investment in Intercable:
On December 2, 1993, Intercable and Bell Canada International Inc.
("BCI") signed a letter of intent to enter into a strategic
relationship whereby BCI would acquire an approximate 30 percent
equity interest in Intercable through the purchase of Class A Common
Stock of Intercable. Under the terms of the letter of intent, BCI
would invest approximately $275,000,000 at closing at a purchase
price of $27.50 per share of Class A Common Stock of Intercable to
acquire its 30 percent interest. BCI also was committed to invest up
to an additional $125,000,000 to maintain its 30 percent interest in
the event Intercable offered additional Class A Common Stock in the
public marketplace. BCI had the right to maintain or increase its
ownership by investing amounts beyond the initial $400,000,000
commitment.
In addition, Jones International, Ltd. which is wholly-owned by Glenn
R. Jones, Chairman and Chief Executive Officer of Spacelink and
Intercable, would grant BCI an option to acquire certain shares of
the Common Stock of Intercable. Except in limited circumstances, the
option would only be exercisable during the eighth year after
closing. Its exercise would result in BCI holding a sufficient
number of shares of the Common Stock of Intercable to enable it to
elect 75 percent of the Board of Directors of Intercable. BCI would
also invest in a number of affiliates of Jones International, Ltd.
which are engaged in the telecommunications and programming
businesses.
On March 28, 1994, Intercable and BCI modified certain of the
financial terms of their letter of intent as a result of the most
recent pronouncements by the FCC which will further regulate the U.S.
cable television industry (see Regulatory Matters). Under the
modified terms of the transaction, the original commitment by BCI to
invest $400,000,000 over time remains as originally planned, however,
the original investment will be in two installments: the purchase
immediately by BCI of 2,500,000 newly issued Class A Shares of
Intercable at $22 per share for $55,000,000, and the purchase at
closing at $27.50 per share of sufficient Class A shares to acquire
the 30 percent interest, for a total consideration of approximately
$261,000,000. Intercable received the $55,000,000 initial
investment, representing an approximate 13 percent interest in
Intercable, in the fourth quarter of fiscal 1994. The $55,000,000
received was used to reduce amounts outstanding under Intercable's
revolving credit facility. In addition, BCI committed to invest an
additional $139,000,000 to maintain its 30 percent interest. This
funding will allow the parties to begin to implement their business
and growth stategies for Intercable in advance of the formal
completion of their strategic alliance.
Closing on the transaction, which is subject to certain conditions,
including the execution of definitive agreements and the acquisition
by Intercable of substantially all of the operating assets of
Spacelink, is expected to occur in the first quarter of fiscal 1995.
(4) Sales and Acquisition of Cable Systems by Intercable:
On March 30, 1994, Intercable and Jones Global Group, Inc.,
(collectively "Jones"), and BCI and Cable and Wireless plc signed a
letter of intent to consolidate their cable television and associated
telephony operations in the United Kingdom and Spain. The
transaction will combine the cable interests of these companies into
BCETI Cable Limited, which is currently owned 80 percent by BCI
and 20 percent by Cable and Wireless plc. The consolidation will
coincide with a public offering of BCETI Cable. As part of the
transaction, Jones will contribute its United Kingdom and Spain
interests, and Cable and Wireless plc will contribute its equity
interest in Jones Cable Group of Leeds Holdings plc, in exchange for
shares in BCETI Cable. Closing the transaction, which is expected in
the first quarter of fiscal 1995, is subject to certain conditions
including the execution of definitive agreements and completion of
the public share offering.
8
<PAGE> 9
On February 2, 1994, Intercable invested $15,500,000 in J.B.
Acquisition Company, a partnership with Paine Webber Cable Capital,
Inc.; and Sandler Capital Management and several of its affiliates.
J.B. Acquisition Company purchased from PacTel Cable all of the
shares of four United Kingdom companies engaged in the cable
television/telephony business. The combined properties represent
approximately 225,000 franchise licensed homes in the United Kingdom,
principally in Norwich and Peterborough.
On January 28, 1993, Intercable entered into an agreement with
American Cable TV Investors 2 ("Act 2") (the "Agreement") to acquire
for its own account the cable television systems serving North
Augusta, South Carolina and surrounding areas (the "North Augusta
System") for $28,500,000 subject to normal closing adjustments. The
North Augusta System is contiguous to the Augusta, Georgia cable
system managed by Intercable on behalf of one of its partnerships.
As a result of a renegotiation of the Agreement between Intercable
and ACT 2, the purchase price was reduced to $27,200,000, subject to
normal closing adjustments. In addition, Jones Group received a
brokerage fee of $680,000 or 2-1/2 percent of the purchase price.
The closing of the transaction occurred on December 15, 1993.
On January 7, 1994, Intercable entered into an agreement with Bresnan
Communications Company ("Bresnan") to sell its Gaston County, North
Carolina cable television system (the "Gaston System") to Bresnan for
$36,500,000 subject to normal closing adjustments. Bresnan and Time
Warner Cable, a division of Time Warner Entertainment, L.P. ("TWC"),
have agreed to a like-kind exchange of assets whereby TWC would
acquire the Gaston System from Bresnan and Bresnan would acquire from
TWC the assets of cable television systems owned by TWC. If for any
reason Bresnan is unable to perform its obligations, TWC has agreed
to purchase the Gaston System directly from Intercable, Closing on
this transaction is expected to occur in the first quarter of fiscal
1995.
(5) Purchase of Assets by Futurex:
On March 11, 1994, Futurex purchased from The Exchange System Limited
Partnership (the "Seller") substantially all of the tangible and
intangible assets comprising the Seller's Excrypt product line for a
net purchase price of $843,000. Futurex shall pay the purchase price
in quarterly installments beginning August 31, 1994, which amounts
will be based on certain fees generated by the business and collected
by Futurex during the preceding quarter subject to certain minimums
and maximums. The acquisition was accounted for as a purchase. The
Excrypt product line serves the encrypted bank credit card draw
authorization market.
(6) Reclassifications:
Certain prior year amounts have been reclassified to conform with the
fiscal year 1994 presentation.
9
<PAGE> 10
Management's Discussion and Analysis of
Financial Condition and Results of Operations
Financial Condition -
Spacelink has historically expanded its operations by acquiring and developing
cable television systems and other related businesses for its own account and
for the account of managed limited partnerships. The development and expansion
of cable television systems is highly capital intensive and, in recognition of
this fact, Spacelink has utilized public and private offerings of interests in
limited partnerships to raise capital to fund these activities. In addition to
acquisitions of cable television systems for managed limited partnerships,
Spacelink has acquired cable television systems for its own account, primarily
with borrowed funds. Spacelink has also expanded by acquiring companies, or
certain assets of companies, with shares of its Class A Common Stock. Spacelink
is not presently sponsoring any new managed limited partnerships nor is it in
the process of acquiring any cable television systems for its own account.
Although Spacelink consolidates the accounts of Intercable, certain provisions
of Intercable's loan agreements limit the amount of funds it may loan or
advance to its affiliates, including Spacelink. As a result of these
limitations, the assets and operating income of Intercable are generally not
available to Spacelink to provide liquidity or capital and, as such, a
discussion of Intercable's financial condition is not included below. In
addition, Spacelink bears no responsibility for the outstanding obligations,
commitments or contingencies of Intercable. Spacelink will, however,
participate in any growth of Intercable's asset and market value through its
economic ownership interest in Intercable.
On November 12, 1993, Spacelink and Intercable announced that they have
commenced negotiations regarding the possible sale of substantially all of the
operating assets of Spacelink to Intercable in exchange for shares of Class A
Common Stock of Intercable to Spacelink. In December 1993, Spacelink's Board
of Directors formed a special committee of outside directors to negotiate the
terms and conditions of the proposed transaction on behalf of Spacelink.
Negotiations are continuing and no agreement on the terms and conditions of the
proposed transaction has been reached.
On April 13, 1993, Spacelink entered into new credit agreements, which
agreements include a $65,000,000 Revolving Credit Facility (the "Revolving
Facility") and a $10,000,000 Term Loan (the "Term Loan"). Upon closing,
proceeds from borrowings under the Revolving Facility and the Term Loan were
used to repay the outstanding balances under Spacelink's then existing credit
facility. The Revolving Facility begins to reduce on August 31, 1994, with a
final maturity date of February 28, 2001. The Revolving Facility bears
interest, at Spacelink's option, at the Prime Rate plus 3/4 to 1-3/8 percent,
LIBOR plus 1-3/4 to 2-3/8 percent or the Certificate of Deposit rate plus 2 to
2-5/8 percent. The Term Loan matures May 31, 2001 and requires principal
payments beginning May 31, 1995. Borrowings under the Term Loan bears interest
at rates consistent with the rates of the Revolving Facility. Both the
Revolving Facility and the Term Loan are secured by substantially all of
Spacelink's assets with the exception of Spacelink's investment in Intercable.
Effective November 30, 1993, Spacelink amended its Revolving Facility to
increase the allowable ratio of debt to management fees and cable operating
income before depreciation and amortization from 6.5 to 1.0 to 6.75 to 1.0 in
order to make available to it a majority of its Revolving Facility and to
mitigate some of the impact of the recent cable reregulation on its liquidity.
The balances outstanding under the Revolving Facility and Term Loan at February
28, 1994 were $63,000,000 and $10,000,000, respectively.
Spacelink has been negatively impacted by the Cable Television Consumer
Protection and Competition Act of 1992 (the "1992 Cable Act"), and the rules
and regulations of the Federal Communications Commission (the "FCC")
promulgated thereunder. Most of Spacelink's owned and managed systems were
required to reduce their service rates for basic and tier services on September
1, 1993, which resulted in a decrease in revenues and operating cash flow in
those systems which was somewhat mitigated by increases in revenues from
premium
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<PAGE> 11
services, pay-per-view and advertising sales. In Spacelink's managed systems,
the management fees earned by Spacelink, which are a function of the operating
revenues of a managed cable system, have also decreased, as well as actual
operating income before depreciation and amortization from Spacelink-owned
systems. In February, the FCC announced a further rulemaking which, when
implemented, could reduce rates further. Based on the foregoing, Spacelink
believes that the new rate regulations will have a negative effect on revenues
and operating cash flows from its owned and managed cable television systems.
Spacelink's ability to borrow under its Revolving Facility is in part a
function of a certain ratio of Spacelink's debt to cable operating cash flow
and management fees at the time it wants to borrow. Because of the anticipated
impact of the 1992 Cable Act on management fees and cable television system
operating income before depreciation and amortization, Spacelink believes that
over the short-term the additional amounts it will be able to borrow under its
Revolving Facility will be approximately $1,000,000.
Spacelink's liquidity may be reduced further by an overbuild of its Panama City
Beach, Florida cable television system. The City Council of Panama City Beach
and the County Commissioners of Bay County have granted cable television
franchises to an unaffiliated company that has recently commenced construction
of a competing cable television system in Panama City Beach. Spacelink intends
to vigorously defend its subscriber base through aggressive marketing and
enhanced customer service. Spacelink completed a rebuild of its Panama City
Beach system's cable plant and headend in May 1993 to provide improved picture
quality, greater reliability and expanded channel capacity.
Spacelink currently anticipates funding its capital expenditures for the
remainder of fiscal 1994 (approximately $2,147,000), its working capital needs
and other commitments from cash flows from cable television system operations,
management fees from its managed limited partnerships and borrowings, if any,
available under its Revolving Facility. Other than the above, Spacelink has no
other sources to create near-term liquidity. With respect to the long-term,
Spacelink is currently reviewing a possible sale of substantially all of its
operating assets to Intercable, and until that time Spacelink believes it will
meet its capital needs and service its obligations using the sources noted
above. To provide Spacelink with additional liquidity to further expand, in
the event a sale of substantially all of its assets to Intercable is not
consumated, Spacelink may sell certain assets or interests in certain assets,
attempt to sell equity or debt securities or attempt to sell equity or debt
securities of certain of its subsidiaries in public or private transactions.
During the first nine months of fiscal 1994, Spacelink purchased property,
plant and equipment totalling $3,428,000. The following table details
Spacelink's capital expenditures by significant category for the nine months
ended February 28, 1994 and its currently anticipated capital expenditures for
the remainder of fiscal 1994.
<TABLE>
<CAPTION>
Estimated
Nine Months Ended Remainder of Total
February 28, 1994 Fiscal 1994 Fiscal 1994
------------------- -------------------- -----------------
Amount % of Total Amount % of Total Amount % of Total
------ ---------- ------ ---------- ------ ----------
(In Thousands)
<S> <C> <C> <C> <C> <C> <C>
Cable System Extensions
and Improvements $ 2,075 61% $ 1,225 57% $ 3,300 59%
Uplink Facility Construction
and Equipment 620 18% 480 22% 1,100 20%
Manufacturing and Other
Equipment for Futurex 410 12% 292 14% 702 13%
Computer Equipment for
Jones Satellite Networks
and Other 323 9% 150 7% 473 8%
-------- ---- -------- --- -------- ---
Total Capital Expenditures $ 3,428 100% $ 2,147 100% $ 5,575 100%
======== ==== ======== === ======== ===
</TABLE>
11
<PAGE> 12
Spacelink has made advances to, and deferred collection of management fees and
expense allocations from, certain Spacelink-managed limited partnerships. A
significant portion of these advances and deferrals represents funds necessary
for capital expansion of, and improvements to, properties owned by
Spacelink-managed limited partnerships and operating and interest expenses paid
on behalf of such partnerships. These advances reduce Spacelink's available
cash and its liquidity. Amounts due from various Spacelink- managed limited
partnerships totalled approximately $3,646,000 at February 28, 1994. Of such
amount, approximately $618,000 represented advances to various
Spacelink-managed limited partnerships that will generally repay these advances
in the quarter after such advances are made. The remaining amount of
$3,028,000 is owed by Jones Spacelink Fund 4, Ltd. ("Fund 4"), and represents
funds primarily for Fund 4's operating, capital and debt service needs.
Repayment of these advances will most likely occur, if at all, only when Fund
4's cable television system is sold and the partnership is liquidated.
Spacelink anticipates, however, that based on its present assessment of asset
value, the proceeds from the sale of Fund 4's cable television system will not
be sufficient to repay all of Fund 4's obligations. Spacelink estimates that
only approximately $1,513,000 of its advances to Fund 4 will ultimately be
repaid and, therefore, at February 28, 1994, Spacelink has reserved $1,515,000
of the total amount due from Fund 4.
During the first nine months of fiscal 1994, the cash position of Spacelink and
its consolidated subsidiaries excluding Intercable was impacted from operating,
investing and financing activities as follows:
<TABLE>
<CAPTION>
(In Thousands)
<S> <C>
Cash Flows from Operating Activities:
Cable television system operations $ 5,552
Management fees from managed limited partnerships 1,555
Other corporate operations, net (3,456)
Interest payments (3,008)
--------
Net cash provided by operating activities 643
--------
Cash Flows from Investing Activities:
Purchases of property, plant and equipment (3,428)
Other, net 556
--------
Net cash used in investing activities (2,872)
--------
Cash Flows from Financing Activities:
Proceeds from borrowings 4,019
Repayment of borrowings (89)
Increase in advances to affiliates (874)
Payment of dividends by Jones Group
to Jones Intercable, Inc. (66)
Other (47)
--------
Net cash provided by financing activities 2,943
--------
Increase in cash and cash equivalents 714
Cash and cash equivalents, at beginning of period 217
--------
Cash and cash equivalents, at end of period $ 931
========
</TABLE>
12
<PAGE> 13
Regulatory Matters
On October 5, 1992, Congress enacted the Cable Television Consumer Protection
and Competition Act of 1992 (the "1992 Cable Act"), which became effective on
December 4, 1992. This legislation has caused significant changes to the
regulatory environment in which the cable television industry operates. The
1992 Cable Act generally allows for a greater degree of regulation of the cable
television industry. Under the 1992 Cable Act's definition of effective
competition, nearly all cable television systems in the United States,
including those owned and managed by Spacelink, are subject to rate regulation
of basic cable services. In addition, the 1992 Cable Act allows the FCC to
regulate rates for non-basic service tiers other than premium services in
response to complaints filed by franchising authorities and/or cable
subscribers. In April 1993, the FCC adopted regulations governing rates for
basic and non-basic services. The FCC's rules became effective on September 1,
1993.
Based on Spacelink's assessment of the FCC's rulemakings concerning rate
regulation under the 1992 Cable Act, Spacelink reduced rates charged for
certain regulated services effective September 1, 1993. On an annualized
basis, such rate reductions will cause subscriber service fees to decline by
$1,100,000, or approximately five percent and will result in a decrease in
operating income before depreciation and amortization of $900,000, or
approximately 11 percent. In addition, on February 22, 1994, the FCC announced
a further rulemaking which, when implemented, could reduce rates further. The
new rate regulations, which were released in March 1994, will be effective on
May 15, 1994, and will likely require futher reductions in rates in most of
Spacelink's owned and managed systems. Spacelink has not yet been able to
quantify the impact of the new rate regulations, but it believes that the new
rate regulations will have a negative impact on its revenues and operating cash
flow. Spacelink has undertaken actions to mitigate a portion of these
reductions through (a) new service offerings, (b) product re-marketing and
re-packaging and (c) marketing efforts targeted at non-subscribers.
The 1992 Cable Act also contains new broadcast signal carriage requirements,
and the FCC has adopted regulations implementing the statutory requirements.
These new rules allow a local commercial broadcast television station to elect
whether to demand that a cable system carry its signal, or to require the cable
system to negotiate with the station for "retransmission consent." A cable
system is generally required to devote up to one-third of its activated channel
capacity for the mandatory carriage of local commercial broadcast television
stations, and non-commercial television stations are also given mandatory
carriage rights, although such stations are not given the option to negotiate
retransmission consent for the carriage of their signals by cable systems.
Additionally, cable systems also are required to obtain retransmission consent
from all commercial television stations (except for commercial
satellite-delivered independent "superstations"), commercial, radio stations
and, in some instances, low-power television stations carried by cable systems.
The retransmission consent rules went into effect on October 6, 1993.
Throughout all cable television systems owned or managed by Spacelink, only one
broadcast station withheld its consent to retransmission of its signal, and was
no longer carried on October 6, 1993. As of October 11, 1993, however, the
broadcast station had given its consent, and its signal was restored to that
cable system. Certain other broadcast signals were carried on October 6, 1993
pursuant to extensions offered to Spacelink by broadcasters, including a one
year extension for carriage of all CBS stations owned and operated by the CBS
network (Los Angeles, Chicago, Philadelphia, Green Bay and Minneapolis). Other
extensions for approximately 10 to 15 broadcast stations were obtained and
approximately five such extensions are still in place. Spacelink expects to
finally conclude retransmission consent negotiations with those remaining
stations whose signals are being carried pursuant to extensions without having
to terminate the distribution of any of those signals. However, there can be
no assurance that such will occur. If any broadcast station currently being
carried pursuant to an extension is dropped, there could be a material adverse
effect on the system in which it is dropped if a significant number of
13
<PAGE> 14
subscribers in such system were to disconnect their service. However, in most
cases, only one broadcaster in any market is being carried pursuant to an
extension arrangement, and the dropping of such broadcaster, were that to
occur, is not expected to have a material adverse effect on the system.
There have been several lawsuits filed by cable operators and programmers in
Federal court challenging various aspects of the 1992 Cable Act, including
provisions relating to mandatory broadcast signal carriage, retransmission
consent, access to cable programming, rate regulations, commercial leased
channels and public access channels. On April 8, 1993, a three-judge Federal
district court panel issued a decision upholding the constitutional validity of
the mandatory signal carriage requirements of the 1992 Cable Act. That
decision has been appealed directly to the United States Supreme Court.
Appeals have been filed in a Federal appellate court challenging the validity
of the FCC's retransmission consent rules.
Results of Operations-
Revenues excluding Intercable
Spacelink and its consolidated subsidiaries excluding Intercable derive their
revenues from five primary sources: subscriber service fees from
Spacelink-owned cable television systems, management fees from
Spacelink-managed limited partnerships, sales of encryption products, systems
integration services and electronics manufacturing services of Futurex, sales
by Jones Satellite Networks ("Satellite Networks"), a consolidated subsidiary
of Galactic Radio that provides audio programming to radio stations, and
brokerage fees earned by Jones Group on the acquisition and sale of cable
television properties. Total revenues for Spacelink and its consolidated
subsidiaries excluding Intercable for the three months ended February 28, 1994
were $8,110,000, an increase of $526,000, or approximately seven percent, from
the amount reported for the three months ended February 28, 1993. Such
revenues for the nine months ended February 28, 1994 totalled approximately
$25,072,000, an increase of $332,000, or approximately one percent, from the
same period a year ago. The principal activities giving rise to the changes in
revenues are described below.
Subscriber Service Fees
Subscriber service fees from Spacelink-owned systems totalled $5,218,000 and
$15,573,000, respectively, for the three and nine months ended February 28,
1994, or are approximately two percent and three percent, respectively, over
the amounts reported in the comparable prior year periods. These increases
were the result of increases in basic service revenues and premium service fees
due to increases in the number of basic and premium subscribers, respectively.
These increases were partially offset by decreases in equipment rental revenue
and the effect of the reduction in basic service rates required under the
regulations issued in May 1993, with which Spacelink complied, effective
September 1, 1993. In addition, on February 22, 1994, the FCC announced a
further rulemaking which, when implemented, could reduce rates further.
Management Fees
Spacelink and certain of its wholly owned subsidiaries receive management fees
generally of five percent of partnership gross revenues, excluding revenues
from the sale of cable television properties, for the management of cable
television systems owned by partnerships for which they are general partner.
For the third quarter of fiscal 1994, Spacelink's management fees totalled
approximately $519,000, compared to $502,000 for the same period one year ago.
Spacelink's management fees for the nine month periods ended February 28, 1994
and 1993 were $1,555,000 and $1,506,000. Partnership revenues increased as a
result of increases in basic subscribers as well as increases in revenues from
pay-per-view, advertising sales and installation service. These increases
somewhat mitigated the effect of the reduction in basic rates in Spacelink's
managed partnerships due to the
14
<PAGE> 15
new basic rate regulations issued by the FCC in May 1993. The further
rulemaking, when implemented, could reduce rates further and negatively effect
management fee revenues.
Futurex Sales
Revenues of Futurex for the three and nine months ended February 28, 1994 were
$1,656,000 and $4,614,000, respectively. The $770,000 and $1,599,000 increases
in revenues are the result of increases in systems integration services and
electronics manufacturing services of $363,000 and $436,000, respectively, for
the three months ended February 28, 1994 and $979,000 and $650,000,
respectively, for the nine months ended February 28, 1994 as compared to the
similar periods one year ago. These increases for the three and nine months
ended February 28, 1994 were partially offset by decreases in sales of fax
encryption products.
Audio Programming Services
Affiliate fees and advertising revenues generated from satellite delivered
formatted music programming to radio stations totalled $230,000 and $1,947,000,
respectively, for the three and nine months ended February 28, 1994. Such
sales decreased by $543,000, or approximately 70 percent, and $232,000, or
approximately 11 percent, respectively, for the three and nine month periods
ended February 28, 1994 as compared to the same periods one year ago. During
the three and nine month periods ended February 28, 1994, the number of radio
stations receiving audio programming services increased by approximately 47
percent and 49 percent, respectively, from the levels in the prior year
periods.
However, in January 1994, Satellite Networks began selling and inserting
advertising on all its music formats. In exchange for allowing Satellite
Networks to air the advertising, the radio station affiliates are, in most
cases, charged no monthly fee, or a significantly reduced fee for the service.
Prior to January 1994, these affiliate fees accounted for virtually all of
Satellite Network's revenues. Over the next several months, Satellite Networks
will continue to experience a significant decrease in affiliate fees as
compared to prior year periods, which will only be partially replaced by
advertising revenues. Over the longer term, however, management believes the
advertising revenues will significantly exceed the affiliate fees it was
receiving from the radio station affiliates. However, there can be no
assurance of this result.
Brokerage Fees
Brokerage fees recognized by Jones Group were $680,000 for both the three and
nine month periods ended February 28, 1994, as compared to $44,000 and
$2,305,000, respectively, for the three and nine month periods in the prior
fiscal year. The differences in brokerage fees recognized by Jones Group was
the result of differences in the number of transactions brokered by the Jones
Group during these periods.
The brokerage fee received by Jones Group on the acquisition of the North
Augusta System by Intercable of approximately $680,000 has been deferred and is
therefore not reflected in the consolidated brokerage fee revenue for the three
and nine months ended February 28, 1994. In addition, the net deferral of
brokerage fees for the three and nine months ended February 28, 1994 of
$602,000 and $447,000, respectively, for financial reporting purposes, resulted
in brokerage fee revenue on a consolidated basis of $78,000 and $233,000 for
the three and nine month periods ended February 28, 1994, respectively. The
net recognition of brokerage fees for the three and nine months ended February
28, 1993, of $83,000 and $248,000, respectively, which were previously deferred
for financial reporting purposes, resulted in brokerage fee revenue on a
consolidated basis of $127,000 and $722,000 for the three and nine month
periods ended February 28, 1993.
15
<PAGE> 16
Revenues including Intercable
Consolidated revenues for the three and nine months ended February 28, 1994
totalled $41,465,000 and $123,450,000, respectively, increases of $1,420,000
and $10,763,000, or approximately four percent and ten percent, respectively,
over the amounts reported for the similar periods one year ago. Of the
increases in consolidated revenues for the three and nine month periods ended
February 28, 1994, over the amount reported during the similar periods one year
ago, Intercable accounted for $894,000 and $10,431,000, or approximately 63
percent and 97 percent, respectively. The increases in Intercable's revenues
on a consolidated basis for the three and nine month periods ended February 28,
1994 as compared to the similar periods one year ago are primarily the result
of an increase in subscriber service fees of $690,000 and $8,359,000,
respectively, which increases are reflective of Intercable's purchase in
November 1992 of the cable television system serving the areas in and around
Alexandria, Virginia (the "Alexandria System") from one of its managed
partnerships and the purchase in December 1993 of the cable television system
serving North Augusta, South Carolina (the "North Augusta System"). The effect
of these transactions was somewhat mitigated by the effect of Intercable's sale
in May 1993 of the cable television system serving a portion of San Diego and
Riverside County, California (the "San Diego System"). Disregarding the effect
of these transactions, total revenues would instead have increased $970,000 and
$ 5,863,000, respectively, or approximately two percent and five percent,
respectively, for the three and nine month periods ended February 28, 1994.
Costs and Expenses excluding Intercable
Operating, general and administrative expense consists primarily of costs
associated with the operation of company-owned cable television systems and the
administration of managed limited partnerships, costs of sales of encryption
products and costs of systems integration services and electronics
manufacturing services provided by Futurex, sales, programming and
administrative costs of Satellite Networks and administrative costs of Jones
Group. Spacelink and Intercable are reimbursed by their managed limited
partnerships for costs associated with the operation of their partnerships. Of
the expenses borne by Spacelink and Intercable, the principal components are
compensation paid to corporate and company-owned system personnel, programming
expenses, professional fees, subscriber billing costs, data processing costs,
rent for leased facilities, cable system maintenance expenses and consumer
marketing expenses.
In the third quarter of fiscal 1994, operating, general and administrative
expenses of Spacelink and its consolidated subsidiaries excluding Intercable,
totalled $6,664,000, an increase of $1,265,000, or approximately 23 percent,
from the similar period in the previous year. Operating, general and
administrative expenses relating to the operation of cable television systems
owned by Spacelink increased by $155,000, or approximately five percent, and
are primarily the result of increased programming related costs, advertising
related costs and marketing related costs of $111,000, $28,000 and $27,000,
respectively and were partially offset by a decrease in personnel related costs
of $28,000. Costs of sales and services, marketing, technical customer support
and administrative expenses of Futurex increased $588,000, or approximately 48
percent, in the third quarter of fiscal 1994 as compared to the similar period
one year ago. Total operating costs of Satellite Networks increased by
$356,000, or approximately 51 percent in the third quarter of fiscal 1994 as
compared to the similar period one year ago, and are primarily the result of
increased sales, programming and administrative costs associated with the
conversion to an advertising based revenue stream.
Operating, general and administrative expense for the nine month period ended
February 28, 1994 totalled $19,331,000, an increase of $3,255,000, or
approximately 20 percent from the similar period in fiscal 1993. For the nine
months ended February 28, 1994, operating, general and administrative expenses
relating to the operation of cable television systems owned by Spacelink
increased by $815,000, or approximately nine percent, and are primarily the
result of increased programming costs,
16
<PAGE> 17
marketing related costs and advertising related costs of $279,000, $28,000, and
$26,000, respectively. Costs of sales and services, marketing, technical
customer support and administrative expenses of Futurex increased $1,349,000,
or approximately 37 percent, for the nine months ended February 28, 1994 as
compared to the similar period one year ago. Total operating costs of
Satellite Networks increased by $1,051,000, or approximately 49 percent, for
the nine month period ended February 28, 1994 as compared to the similar period
in fiscal 1993, and are primarily the result of increased sales, programming
and administrative costs.
Consolidated Costs and Expenses including Intercable
Consolidated operating, general and administrative expenses for the third
quarter of fiscal 1994 totalled $25,704,000, an increase of $205,000, or
approximately one percent from the amount in the similar period one year ago.
Operating, general and administrative expenses of Intercable on a consolidated
basis for the three month period decreased $1,060,000 due to Intercable
recognizing $1,870,000 of non-cash compensation expense during the third
quarter of fiscal 1993 relating to the granting of Class A Common Stock
options. Approximately $65,000 of such expense was recognized during the third
quarter of fiscal 1994. The effect of the stock option expense was partially
offset by increased personnel costs, satellite and premium service fees, and
plant related costs which totalled $544,000.
Consolidated operating, general and administrative expenses for the nine months
ended February 28, 1994 totalled $75,644,000, an increase of $8,623,000, or
approximately 13 percent from the amount in the similar period one year ago.
Operating, general and administrative expenses of Intercable on a consolidated
basis accounted for $5,368,000, or approximately 62 percent, of the total nine
month increase and were primarily the result of increased satellite and premium
service fees, personnel costs, and advertising related costs of $1,596,000,
$928,000 and $259,000, respectively. In addition the net effect of the
purchase of the Alexandria System and the North Augusta System and the sale of
the San Diego System resulted in a net increase in these expenses of
approximately $25,000 and $2,251,000 for the three and nine months ended
February 28, 1994, respectively. Disregarding the effect of these
transactions, operating, general and administrative expenses would instead have
increased one percent and ten percent, respectively, for the three and nine
month periods ended February 28, 1994.
Other Income and Expenses excluding Intercable
Interest Expense
Interest expense for Spacelink and its consolidated subsidiaries excluding
Intercable totalled approximately $1,003,000 and $3,041,000, respectively for
the three and nine months ended February 28, 1994 compared to approximately
$877,000 and $2,695,000, respectively, in the comparable periods one year ago.
The increases in interest expense are primarily the result of an increase in
the average levels of outstanding debt during fiscal 1994, as compared to the
average levels outstanding one year ago.
Consolidated Other Income and Expense including Intercable
Interest Expense
For the three and nine months ended February 28, 1994, consolidated interest
expense decreased by $1,397,000 and $3,403,000, or approximately 12 percent and
ten percent, respectively, from the similar periods one year ago. The
decreases in consolidated interest expense for the three and nine month periods
ended February 28, 1994 from the amounts reported for the three and nine month
periods ended February 28, 1993, were the result of decreased interest expense
of Intercable totalling $1,523,000 and $3,749,000, respectively, which were
partially offset by increases in Spacelink's interest expense of
17
<PAGE> 18
$126,000 and $346,000. The decrease in Intercable's interest expense on a
consolidated basis was primarily due to theredemption of the remaining
$66,575,000 principal amount of Intercable's 9.75 percent Subordinated
Debentures due 1998 in August 1992 and the redemption of the remaining
$138,000,000 principal amount of Intercable's 13 percent Subordinated
Debentures due 2000 in May 1993. The effect of these redemptions by Intercable
was somewhat mitigated by an increase in interest expense as a result of higher
balances outstanding on Intercable's revolving credit facility.
Equity in Losses
Consolidated equity in losses of limited partnerships and affiliated companies,
which partnership losses result principally from depreciation and amortization
expense, increased from $971,000 for the three month period ended February 28,
1993 to $1,325,000 for the three month period ended February 28, 1994 and
increased from $3,082,000 for the nine months ended February 28, 1993 to
$3,956,000 for the similar period in fiscal 1994. These increases of $354,000
and $874,000, respectively in equity in losses of limited partnerships and
affiliated companies for the third quarter of fiscal 1994 and for the nine
months ended February 28, 1994, as compared to the similar periods one year
ago, are primarily the result of losses recognized by Intercable related to its
25 percent investment in Mind Extension University.
Minority Interest in Net Losses
For the three and nine months ended February 28, 1994, minority interests in
the net losses of consolidated subsidiaries of $5,497,000 and $15,102,000,
respectively, reflects primarily the elimination of the remaining shareholders'
83 percent interest in Intercable's net losses for the three and nine months of
fiscal 1994. Minority interests in the net losses of consolidated subsidiaries
declined $2,240,000 and $4,554,000, respectively, for the three and nine month
periods in fiscal 1994 as compared to the similar periods in fiscal 1993, and
are due to decreases in Intercable's losses before an extraordinary item and an
accounting change for the three and nine months ended February 28, 1994 as
compared to similar periods in fiscal 1993.
Net Loss
While Spacelink anticipates the continued recognition of operating income
before depreciation and amortization expense, as Spacelink and Intercable's
cable television systems mature, net losses may be recognized in the future in
part from depreciation and amortization expense. To the extent Spacelink and
Intercable recognize partnership fees and distributions upon liquidation of
their managed limited partnerships and Spacelink recognizes brokerage fees from
Jones Group, losses may be reduced or eliminated; however, there can be no
assurance as to the timing or amount of income recognition resulting from these
fees and distributions or other transactions.
18
<PAGE> 19
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits.
None.
(b) Reports on Form 8-K.
None.
19
<PAGE> 20
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
JONES SPACELINK, LTD.,
a Colorado corporation
By: /s/ GREGORY J. LIPTAK
Gregory J. Liptak
President
By: /s/ JAY B. LEWIS
Jay B. Lewis
Principal Accounting Officer
Date: April 13, 1994
20
