SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
Form 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended March 31, 1999
Commission File Number 0-9881
SHENANDOAH TELECOMMUNICATIONS COMPANY
(Exact name of registrant as specified in its charter)
Virginia 54-1162806
(State or other jurisdiction of (I.R.S. Employer
of incorporation or organization Identification Number)
P.O. Box 459, Edinburg, Virginia 22824
(Address of principal executive office and zip code)
Registrant's telephone number,
including area code: (540) 984-4141
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
Indicate the number of shares outstanding of each of the issuer's
classes of common stock as of the close of the period covered by
this report.
Class Outstanding at April 30, 1999
Common Stock, No Par Value 3,755,760 Shares
SHENANDOAH TELECOMMUNICATIONS COMPANY
SHENANDOAH TELECOMMUNICATIONS COMPANY
INDEX
Page
Number
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Balance Sheets
March 31, 1999 and December 1998 1-2
Condensed Consolidated Statements of Income
Three Months Ended March 31, 1999 and 1998 3-4
Condensed Consolidated Statements of Cash Flow
Three Months Ended March 31, 1999 and 1998 5
Notes To Consolidated Financial Statements 6
Item II. Management's Discussion and Analysis of
Financial Condition and Results of Operations 7-13
PART II. OTHER INFORMATION
Item 4. Submission of Matters To a Vote of Security Holders 14
Item 6. Exhibits and Reports On Form 8-K 14
Signatures 15
<PAGE>
SHENANDOAH TELECOMMUNICATIONS COMPANY
AND SUBSIDIARY COMPANIES
PART I. FINANCIAL INFORMATION
ITEM I. FINANCIAL STATEMENTS
CONDENSED CONSOLIDATED BALANCE SHEETS
ASSETS
March 31, 1999 December 31, 1998
(Unaudited)
Current Assets
Cash & cash equivalents $ 6,722,110 $ 4,891,109
Investment held to
maturity sec 0 499,581
Accounts receivable 4,328,367 4,272,016
Materials 3,091,142 3,488,137
Prepaid and other current
assets 581,957 777,853
------- -------
Total Current Assets 14,723,576 13,928,696
Securities and Investments
Available for sale
securities 2,170,794 2,677,789
Other investments 5,792,191 5,921,206
--------- ---------
7,962,985 8,598,995
Net Property, Plant and Equipment
Plant in service 91,002,585 88,427,844
Plant under construction 5,191,411 5,670,371
--------- ---------
96,193,996 94,098,215
Less accumulated
depreciation 30,513,595 29,063,738
---------- ----------
65,680,401 65,034,477
Other Assets
Cost in excess of net assets of
business acquired, less
accumulated amortization 4,687,673 4,876,215
Deferred charges and other
assets 519,872 354,216
Radio spectrum license net of
accumulated amortization 640,922 653,145
------- -------
5,848,467 5,883,576
$ 94,215,429 $ 93,445,744
============ ============
See accompanying notes to the condensed consolidated financial statements
<PAGE>
SHENANDOAH TELECOMMUNICATIONS COMPANY
AND SUBSIDIARY COMPANIES
PART I. FINANCIAL INFORMATION
ITEM I. FINANCIAL STATEMENTS
CONDENSED CONSOLIDATED BALANCE SHEETS
LIABILITIES AND EQUITY
March 31, December 31,
1999 1999
(Unaudited)
--------------- ---------------
Current Liabilities
Current maturities of
long-term debt $ 1,073,309 $ 863,972
Accounts payable 1,218,166 1,149,286
Advance billings & payments 607,914 712,581
Customers' deposits 120,898 113,586
Accrued compensation 624,133 890,443
Other current liabilities 800,836 1,072,422
Income taxes payable 505,007 0
Other taxes payable 567,116 214,433
----------- -----------
Total Current Liabilities 5,517,379 5,016,723
Long-term Debt, less current maturities 28,044,137 28,398,374
Other Liabilities and Deferred Credits
Deferred investment tax credit 128,513 145,909
Deferred income taxes 6,544,195 6,741,121
Pension & other 1,451,416 1,331,465
----------- -----------
8,124,124 8,218,495
Minority Interests 1,987,864 2,265,426
Stockholders' Equity
Common stock 4,734,377 4,734,377
Retained earnings 45,486,627 44,173,730
Unrealized gains on available
for sale securities 320,921 638,619
----------- -----------
50,541,925 49,546,726
---------- ----------
94,215,429 93,445,744
=========== ===========
See accompanying notes to the condensed consolidated financial statements
<PAGE>
SHENANDOAH TELECOMMUNICATIONS COMPANY
AND SUBSIDIARY COMPANIES
PART I. FINANCIAL INFORMATION
ITEM I. FINANCIAL STATEMENTS
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
Three months ended March 31,
1999 1998
(Unaudited)
OPERATING REVENUES
Telephone revenues
Local service $ 960,104 $ 922,032
Access 1,890,951 1,924,320
Toll 5,802 12,634
Miscellaneous:
Directory 314,146 293,487
Facility leases 502,382 502,615
Billing & collection 123,952 118,424
Other miscellaneous 37,987 41,406
------ ------
Total telephone revenues 3,835,324 3,814,918
Cable television revenues 785,741 716,668
ShenTel service revenues 932,744 526,367
Leasing revenues 3,294 4,585
Mobile revenues 2,421,434 2,057,042
PCS revenues 702,478 666,736
Long distance revenues 280,259 218,833
Network revenues 153,733 153,733
------- -------
Total Revenues and Sales 9,115,007 8,158,882
OPERATING EXPENSES
Cost of products and services sold 462,114 365,258
Line costs 107,176 100,379
Plant specific 755,839 699,411
Plant non-specific:
Network & other 1,494,575 1,240,576
Depreciation 1,557,936 1,281,531
Customer operations 1,213,148 1,153,851
Corporate operations 668,269 735,277
Other operating expenses 264,517 133,509
Taxes other than income 39,368 218,719
------ -------
Total Operating Expense 6,562,942 5,928,511
--------- ---------
Operating Income 2,552,065 2,230,371
See accompanying notes to the condensed consolidated financial statements
<PAGE>
SHENANDOAH TELECOMMUNICATIONS COMPANY
AND SUBSIDIARY COMPANIES
PART I. FINANCIAL INFORMATION
ITEM I. FINANCIAL STATEMENTS
Three months ended March 31,
1999 1998
(Unaudited)
Non-operating income less expense 232,530 209,387
Interest Expense 468,561 312,844
------- -------
Income before income taxes 2,316,034 2,126,914
Provision for income taxes 784,639 682,942
------- -------
Net income before minority interest 1,531,395 1,443,972
Minority interest (218,498) (255,609)
-------- --------
Net income $ 1,312,897 $ 1,188,363
=========== ===========
Weighted average common
shares outstanding 3,755,760 3,758,316
Basic and diluted earnings per share $ 0.35 $ 0.32
See accompanying notes to the condensed consolidated financial statements
<PAGE>
SHENANDOAH TELECOMMUNICATIONS COMPANY
AND SUBSIDIARY COMPANIES
PART I. FINANCIAL INFORMATION
ITEM I. FINANCIAL STATEMENTS
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
Three months ended March 31,
1999 1998
(Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income 1,312,897 1,188,363
Adjustments to reconcile net income to net
cash
provided by operating activities:
Depreciation & amortization 1,557,936 1,281,531
Deferred taxes (196,926) 255,705
Investment (gains)/losses 53,843 (263,333)
Income (losses) on equity investments (277,562) (84,391)
Other (95,720) 156,243
Decrease/(increase) in
Accounts receivable (56,351) (734,410)
Materials 396,995 (827,707)
Increase/(decrease) in
Accounts payable 68,880 (726,320)
Income taxes payable 505,007 700,650
Deferrals & accruals 33,279 (48,548)
------ -------
Net cash provided by operating activities 3,302,278 381,751
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property plant & equipment (2,090,427) (2,830,985)
Purchase of investment securities (38,697) 0
Maturity of held-to-maturity securities 499,581 0
Cash flows from securities 303,166 602,638
Other 0 (3,789)
------- ------
Net cash used in investing activities (1,326,377) (2,232,136)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from long term debt 0 2,166,556
Stock Redemption 0 (100,000)
Principal payments on long term debt (144,900) (137,347)
Net cash provided by financing activities (144,900) 1,929,209
-------- ---------
NET INCREASE IN CASH 1,831,001 78,824
CASH AND CASH EQUIVALENTS:
Beginning 4,891,109 5,203,521
--------- ---------
Ending $ 6,722,110 $ 5,282,345
=========== ===========
See accompanying notes to the condensed consolidated financial statements
<PAGE>
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. In the opinion of management, the accompanying condensed
financial statements which are unaudited, except for the
condensed balance sheet at December 31, 1998, contain all
adjustments (consisting of only normal recurring accruals)
necessary to present fairly Shenandoah Telecommunications
Company's financial position as of March 31, 1999 and the
results of operations and cash flows for the three month
periods ended March 31, 1999 and 1998.
While the Company believes that the disclosures presented are
adequate, to make the information not misleading it is
suggested that these financial statements be read in
conjunction with the financial statements and notes included in
the Company's annual report on Form 10-K.
2. The results of operations for the three-month period ended
March 31, 1999 and 1998 are not necessarily indicative of the
results to be expected for the full year.
3. The earnings per common share were computed on the weighted
average number of shares outstanding. The Company has stock
options outstanding, which are not dilutive; therefore basic
and diluted earnings per share are the same.
4. Other comprehensive income consists of the unrealized holding
gains and losses on the Company's available-for-sale
investment. The unrealized holding loss net of tax for the
three month period ended March 31, 1999 was $317,698 and the
unrealized holding loss net of tax for the three month period
ended March 31, 1998 was $395,001. Other comprehensive income
equaled $995,199 for the three month period ended March 31,
1999 and $793,361 for the same period in 1998.
<PAGE>
SHENANDOAH TELECOMMUNICATIONS COMPANY
AND SUBSIDIARY COMPANIES
ITEM II, MANAGEMENTS DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following tables set forth, for the periods indicated, the
percentages which certain items reflected in the financial data bear
to total operating revenue and the percentage increase of such items
as compared to the indicated prior period:
RELATIONSHIP TO PERIOD TO PERIOD
TOTAL REVENUES INCREASE OR DECREASE
Three months ended Three months ended
March 31, March 31,
1999 1998 1999-98 1998-97
OPERATING REVENUES (Unaudited) (Unaudited)
Telephone revenues
Local service 10.5% 11.3% 4.1% 7.3%
Access 20.8% 23.6% -1.7% 10.6%
Toll 0.1% 0.2% -54.1% 105.9%
Miscellaneous:
Directory 3.5% 3.6% 7.0% 7.5%
Facility leases 5.5% 6.2% -0.1% 5.4%
Billing & collection 1.4% 1.5% 4.7% 12.8%
Other miscellaneous 0.4% 0.5% -8.3% -14.4%
Total telephone revenues 42.1% 46.8% 0.5% 8.8%
Cable television revenues 8.6% 8.8% 9.6% 16.5%
ShenTel service revenues 10.2% 6.5% 77.2% 11.1%
Leasing revenues 0.0% 0.1% -28.2% 26.6%
Mobile revenues 26.6% 25.2% 17.7% 14.9%
PCS revenues 7.7% 8.2% 5.4% 160.9%
Long distance revenues 3.1% 2.7% 28.1% -9.6%
Network revenues 1.7% 1.9% 0.0% 0.0%
Total Revenues and Sales 100.0% 100.0% 11.7% 15.9%
OPERATING EXPENSES
Cost of products and 5.1% 4.5% 26.5% -8.0%
services sold
Line costs 1.2% 1.2% 6.8% 5.3%
Plant specific 8.3% 8.6% 8.1% 12.4%
Plant non-specific:
Network & other 16.4% 15.2% 20.5% 33.4%
Depreciation 17.1% 15.7% 21.6% 15.4%
Customer operations 13.3% 14.1% 5.1% 15.9%
<PAGE>
SHENANDOAH TELECOMMUNICATIONS COMPANY
AND SUBSIDIARY COMPANIES
ITEM II, MANAGEMENTS DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following tables set forth, for the periods indicated, the
percentages which certain items reflected in the financial data bear
to total operating revenue and the percentage increase of such items
as compared to the indicated prior period:
RELATIONSHIP TO PERIOD TO PERIOD
TOTAL REVENUES INCREASE OR DECREASE
Three months ended Three months ended
March 31, March 31,
1999 1998 1999-98 1998-97
OPERATING EXPENSES (CONTINUED) (Unaudited) (Unaudited)
Corporate operations 7.3% 9.0% -9.1% 9.8%
Other operating expenses 2.9% 1.6% 98.1% -31.5%
Taxes other than income 0.4% 2.7% -82.0% 122.8%
Total Operating Expense 72.0% 72.7% 10.7% 15.9%
Operating Income 28.0% 27.3% 14.4% 15.7%
Gain on Sale of Investment
Non-operating income less 2.6% 2.6% 11.1% -8.7%
expense
Interest Expense 5.1% 3.8% 49.8% -12.2%
Income before income taxes 25.4% 26.1% 8.9% 18.1%
Provision for income taxes 8.6% 8.4% 14.9% 18.6%
Net income before minority 16.8% 17.7% 6.1% 17.8%
interest
Minority interest -2.4% -3.1% -14.5% 21.1%
Net income 14.4% 14.6% 10.5% 17.1%
<PAGE>
SHENANDOAH TELECOMMUNICATIONS COMPANY
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Shenandoah Telecommunications Company is a diversified telecommunications
holding company providing both regulated and unregulated telecommunications
services through its nine wholly-owned subsidiaries.
This industry is in a period of transition from a protected monopoly to a
competitive environment as evidenced by the passage of the Telecommunications
Act of 1996. As a result, Shenandoah Telecommunications has made and plans to
continue to make significant investments in the new and emerging technologies
and opportunities. The most significant revenue contributors are the regulated
telephone local exchange company accounting for 42.1% of revenue and the
cellular dominated operations of the Mobile subsidiary, accounting for 26.6% of
revenue during the most recent quarter. Other significant services provided are
paging, personal communications services (PCS), cable television, Internet
access, long distance, and fiber facilities and towers leased to other
telecommunications carriers. The Company also sells and leases equipment, mainly
related to services provided. The Company's new subsidiary, ShenTel
Communications, was granted a certificate in March 1999 to provide competitive
local exchange service in portions of Virginia that are outside the present
franchised serving area of our regulated telephone subsidiary. A lengthy
planning process, including negotiation for inter-connection with other local
exchange carriers, is anticipated. The Company also participates in emerging
technologies by direct investment in non-affiliated companies.
RESULTS OF OPERATIONS
The regulated local exchange company's largest source of revenue continues to be
for access to the local exchange network by interexchange carriers. The volume
for approximately two-thirds of these access revenues generally tracks with
changes in minutes of use, subject to tariff changes. The minutes of use during
the first quarter of 1999 increased 5.8%, compared to an increase of 11.9% in
1998. The associated revenues decreased 1.7% in first quarter 1999 compared to a
10.6% decrease in 1997. Management attributes the 1999 changes to interstate
tariff reductions, and the 1998 changes to inclement weather (which increased
access demand) experienced the first quarter of 1997. First quarter cable
television revenues increased 9.6% over the first quarter of 1998 due an
increase in the customer base and subscriber based rebates. The 1998 increase of
16.5% was due to rate increases and a 4.0% increase in the customer base.
<PAGE>
SHENANDOAH TELECOMMUNICATIONS COMPANY
SHENANDOAH TELECOMMUNICATIONS COMPANY
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS (Continued)
The increase in the ShenTel Service revenues category for the first quarter of
1999 was 77.2% compared to 11.1% in 1998. This was due to increases in Internet
service revenues. First quarter 1999 revenues from our Internet service
operations were up $229,000 or 76.4% compared to the first quarter of 1998, and
$118,000 or 64.9% during this period the previous year. These increases are due
to the increasing customer base. In first quarter 1999, there was also a gain of
$164,000 or 23.7% in equipment sales. The increase in Internet access revenues
were partially offset by decreases in equipment sales, with a decrease of
$70,000 or 50.2% compared to the first quarter of 1998. Financing lease revenues
are chiefly for leases and rentals of customer premise equipment such as PBXs
sold through Company subsidiaries. The Mobile revenues are mainly comprised of
revenues from wireless communications services. First quarter 1999 local
cellular revenues increased $108,000 or 10.9% compared to the same period in
1998. First quarter 1999 outcollect roamer revenues increased $161,000 or 16.7%
compared to 1998 first quarter, due in part to network expansions and upgrades
made in the second half of 1999. Total revenues from the Cellular operation
accounted for 24.9% of total Company revenues in the first quarter, compared to
23.9% in the first quarter of 1998. First quarter 1999 Cost of Goods Sold
increased $97,000 or 26.5% due principally to an increase in the number of units
sold in the cellular operation and equipment sales in the ShenTel subsidiary.
The expense category Network and Other consists primarily of network support,
engineering and leased facilities costs. Of the 20.5% or $254,000 increase for
the first quarter of 1999 over the first quarter of 1998, $101,000 is due from
the PCS operation and $168,191 is due to increases from our cellular operation.
Depreciation and Amortization, our largest expense category, was $276,000 or
21.6% higher in the first quarter of 1999 compared to 1998. This is due to the
pace of plant acquisition. Plant in Service increased $15,645,000 or 20.8% at
the end of the first quarter of 1999 compared to 1998. The Other Operating
Expense category consists of royalty expense paid to programming providers for
the Cable Television subsidiary. The increase in these expenses year-to-date
compared with the first quarter of 1998 is due to an increase in channels
offered.
<PAGE>
SHENANDOAH TELECOMMUNICATIONS COMPANY
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS (Continued)
The Non-operating Income Less expenses category consists mainly of the income or
loss from investments made by the Company. This category showed an increase of
11.1% in the first quarter compared to the same period in 1998, primarily due to
partnership income from one of the telephone subsidiary's investments. Interest
expense had increased $156,000 or 49.8% in the first quarter compared to the
first quarter of 1998, due primarily to larger capitalized interest costs for
plan under construction in the telephone subsidiary. The Company began drawing
funds on the CoBank note (described below) in the third quarter of 1996. Draws
on this note at March 31, 1999 equaled $18,280,000, an increase of $100,000 from
March 31, 1998.
LIQUIDITY AND CAPITAL RESOURCES
On August 2, 1996, the Company signed a note with CoBank to borrow up to $25
million. The term of the loan is for up to 15 years, with multiple interest
options. The Company began drawing these funds in the third quarter of 1996. A
majority of these funds were used for the acquisition of the Shenandoah County
CATV assets of FrontierVision in September of 1996, and to finance the building
of the new network for the PCS operation. The Company anticipates making
additional draws on this note in 1999 to fund, in part, the $9,100,000 of
potential capital projects for the non-telephone subsidiaries. Under the present
terms of the CoBank agreement, no further draws can be made after August 31,
1999. Management is currently in discussion with CoBank about modifying the
agreement. The Company budgeted capital expenditures of approximately $8,600,000
for the Telephone subsidiary in 1999. These capital needs will be met through
internally generated cash flows and the existing Rural Telephone Bank note. the
loan agreement with the RTB allows for additional borrowings of approximately
$3,000,000. Expenditures of these loan funds are limited to capital projects for
the regulated local exchange carrier. IMPACT OF THE YEAR 2000 ISSUE The Year
2000 (Y2K) issue is the result of computer programs using a two-digit format, as
opposed to four digits, to indicate the year. Some computer systems may be
unable to interpret dates beyond the year 1999, which could cause a system
failure or other computer errors, leading to disruptions in operations. Year
2000 readiness means the ability to (a) continue to operate without substantial
interruption attributable to the inability of systems to correctly process,
provide, store and receive date data in and around the Year 2000 and (b) to
mitigate the risks.
<PAGE>
SHENANDOAH TELECOMMUNICATIONS COMPANY
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
IMPACT OF THE YEAR 2000 ISSUE (Continued) associated with such system
limitations to an acceptable level. The Company has developed a four-phase
program for Y2K readiness. Phase I (Inventory and Assessment): In this Phase, an
inventory was conducted of all hardware and software that might be at risk,
including third-party businesses whose Y2K failures might significantly impact
the Company, and an assessment was made on corrective direction. A Y2K Task
Force, reporting to senior management, started work on this Phase in 1997. The
Company determined that software provided by third parties was its most
vulnerable link to the Y2K event. The at-risk software included switching, end
user billing, carrier access billing, and financial accounting systems. The
Company further identified that it had one mainframe and a local area network
consisting of a server and approximately 75 individual microcomputers that may
be vulnerable. Phase II (Strategy): In this Phase, the Company determined
whether each at-risk system should be classified as "routine upgrade",
"obsolete", or "non-critical." A "routine upgrade" involves the upgrade of
hardware or software as part of the normal course of doing business. An
"obsolete" designation involves total replacement in that the application no
longer meets our business needs. A "non-critical" designation is for those
applications that can be addressed through simple work-around solutions, manual
updates, or other inexpensive measures. The majority of this classification work
was completed mid-1998. Phase III (Installation and Testing): In this Phase, the
selected approach to Y2K remediation is executed. The information that follows
reflects the Company's current plans and estimates as of February 1999 and is
subject to change. Routine upgrade classification: A performance enhancing
upgrade of the mainframe computer, which also made the hardware and operating
system Y2K compliant, was performed in the first quarter of 1998. The main
telephone switches received new feature upgrades, incorporating Y2K compliance,
in the fourth quarter of 1998. The latest releases of end user billing software,
which are currently in testing and are expected to be in service in the second
quarter of 1999, have been represented by the vendors to be Y2K compliant. The
local area network, comprised of the hardware and software on the server and the
microcomputers, is scheduled to be Y2K compliant by the end of the second
quarter of 1999. Obsolete classification: Approximately 90% of the testing has
been completed on new financial software and new carrier access billing
software, with both systems scheduled to be placed in service in the second
quarter of 1999. Non-critical classification: The measures identified to deal
with these low priority systems are expected to be tested by the end of the
second quarter of 1999, and implemented as necessary.
<PAGE>
SHENANDOAH TELECOMMUNICATIONS COMPANY
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
IMPACT OF THE YEAR 2000 ISSUE (Continued
Phase IV (Monitoring and Contingency Planning): In this Phase, the implemented
changes are monitored and backup plans designed where necessary. With the
majority of the required hardware and software changes completed by mid-1999,
the Company will be utilizing the changes in a production setting. This approach
minimizes disruption to current operations and provides a basis for ongoing
testing and monitoring. Contingency plans, if deemed necessary, will be
developed in mid-1999. With this four-phase program, where the normal business
practice of weighing replacement against adopting routine upgrades was followed,
the Company believes that its non-routine expense in making its core operations
Y2K compliant will be minimal. The Company has also reviewed other third party
relationships that could affect its operation. Most relationships are with large
interexchange carriers and suppliers who state that they are or will be Y2K
compliant. This Annual Report to Stockholders contains forward-looking
statements. These statements are subject to certain risks and uncertainties that
could cause actual results to differ materially from those anticipated in the
forward-looking statements. Factors that might cause such a difference include,
but are not limited to: changes in the interest rate environment; management's
business strategy; national, regional, and local market conditions; and
legislative and regulatory conditions. Readers should not place undue reliance
on forward-looking statements which reflect management's view only as of the
date hereof. The Company undertakes no obligation to publicly revise these
forward-looking statements to reflect subsequent events or circumstances.
<PAGE>
SHENANDOAH TELECOMMUNICATIONS COMPANY
PART II
OTHER INFORMATION
ITEM 4. Submission of Matters to a Vote of Security Holders
No matters were submitted to a vote of security
holders.
ITEM 6. Exhibits and Reports on Form 8-K
A. Exhibit 27 - Financial Data Schedule
B. No reports on Form 8-K were filed for the period
covered by this report.
<PAGE>
SHENANDOAH TELECOMMUNICATIONS COMPANY
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.
SHENANDOAH TELECOMMUNICATIONS COMPANY
(Registrant)
May 17, 1999 /s/CHRISTOPHER E. FRENCH
Christopher E. French
President
May 17, 1999 /s/LAURENCE F. PAXTON
Laurence F. Paxton
Vice President - Finance
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> MAR-31-1999
<CASH> 6,722,110
<SECURITIES> 7,962,985
<RECEIVABLES> 4,344,451
<ALLOWANCES> 16,084
<INVENTORY> 3,091,142
<CURRENT-ASSETS> 14,723,576
<PP&E> 96,193,996
<DEPRECIATION> 30,513,595
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<CURRENT-LIABILITIES> 5,517,379
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0
0
<COMMON> 4,734,377
<OTHER-SE> 45,904,698
<TOTAL-LIABILITY-AND-EQUITY> 94,215,429
<SALES> 282,059
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<LOSS-PROVISION> 0
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<INCOME-TAX> 784,639
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<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,312,897
<EPS-PRIMARY> .35
<EPS-DILUTED> .35
</TABLE>
