<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
For Quarter ended March 31, 1997 Commission file number 0-8320
MID-PLAINS, INC.
(Exact Name of Registrant as Specified in its Charter)
WISCONSIN 39-0274450
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
1912 Parmenter Street, P.O. Box 70, Middleton, Wisconsin 53562
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (608) 831-1000
Indicate by checkmark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes X No
As of March 31, 1997, there were 1,991,743 shares of Common Stock outstanding.
(Total number of pages - 10)
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MID-PLAINS, INC.
1st QUARTER REPORT ON FORM 10-Q
INDEX
Page
Number
PART I. Financial Information
Item 1. Financial Statements
Consolidated Balance Sheets -
March 31, 1997 and December 31, 1996 3 - 4
Consolidated Statements of Income -
Three Months Ended March 31, 1997 and 1996 5
Consolidated Statements of Cash Flow -
Three Months Ended March 31, 1997 and 1996 6
Notes to Consolidated Financial Statements 7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results
of Operations 8 - 9
PART II. Other Information 10
Item 6. Exhibits and Reports on Form 8-K 10
Signatures 10
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MID-PLAINS, INC.
CONSOLIDATED BALANCE SHEETS
<TABLE>
March 31, December 31,
1997 1996
In Thousands
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 2,051 $ 1,058
Accounts receivable -
Due from subscribers 980 1,069
Customer sales and services 778 941
Other, principally connecting companies 1,890 1,313
Inventories
Plant materials and supplies 463 459
Communications systems and parts 871 858
Other 426 551
7,459 6,249
PROPERTY, PLANT AND EQUIPMENT
Telephone, in service and under
construction, at original cost 51,248 50,552
Less Accumulated depreciation (22,197) (21,730)
29,051 28,822
INVESTMENT AND OTHER ASSETS
Cellular limited partnership interest 4,102 4,101
PCS license 3,292 -
Other 714 716
8,108 4,817
$44,618 $39,888
The accompanying notes to consolidated financial
statements are an integral part of these statements.
(UNAUDITED)
/TABLE
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MID-PLAINS, INC.
CONSOLIDATED BALANCE SHEETS
<TABLE>
March 31, December 31,
1997 1996
In Thousands
<S> <C> <C>
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Current maturities of long-term debt $ 541 $ 216
Notes payable to banks 1,174 -
Accounts payable 2,838 3,093
Other 1,005 1,089
5,558 4,398
LONG-TERM DEBT 15,528 12,185
DEFERRED CREDITS
Income taxes 2,502 2,568
Investment tax credits 163 177
Other 1,108 1 063
3,773 3,808
SHAREHOLDERS' EQUITY
Common stock 11,992 11,889
Retained earnings 7,767 7,608
19,759 19,497
$ 44,618 $ 39,888
The accompanying notes to consolidated financial
statements are an integral part of these statements.
(UNAUDITED)
</TABLE>
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MID-PLAINS, INC.
CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
Three Months Ended
March 31, March 31,
1997 1996
In Thousands Except For Per Share Data
<S> <C> <C>
OPERATING REVENUES
Telephone operations
Local network services $1,625 $1,133
Network access and long
distance services 3,202 3,033
Other 483 597
System sales and services 1,473 1,846
6,783 6,609
OPERATING EXPENSES
Telephone operations
Plant operations 1,190 809
Depreciation 927 829
Customer operations 821 601
Corporate operations 928 657
General taxes 269 275
System sales and services
Cost of sales and services 837 1,216
Operating expenses 518 516
5,490 4,903
OPERATING INCOME BEFORE INCOME TAXES 1,293 1,706
Other income 27 8
Interest expense (282) (275)
INCOME BEFORE INCOME TAX EXPENSE 1,038 1,439
Income tax expense 341 552
NET INCOME $ 697 $ 887
Average shares considered outstanding 1,990 1,983
Earnings per share $ .35 $ .45
Cash dividends per share $ .27 $ .25
The accompanying notes to consolidated financial
statements are an integral part of these statements.
(UNAUDITED)
/TABLE
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MID-PLAINS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
Three Months Ended
March 31, March 31,
1997 1996
In Thousands
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 697 $ 887
Add (Deduct) adjustments to reconcile
net income to net cash provided by
operating activities:
Depreciation 947 851
Deferred income taxes (81) (20)
Change in accounts and other receivables (326) 359
Change in inventories (17) 19
Change in accounts payable (255) 108
Change in other assets and liabilities 86 515
Net cash from operating activities 1,051 2,719
CASH FLOWS FROM FINANCING ACTIVITIES
Long-term borrowings 745 -
Repay long-term debt - (234)
Change in notes payable to banks 1,174 (1,665)
Dividends paid (538) (495)
Stock purchase plan 103 36
Net cash used in financing activities 1,484 (2,358)
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to property, plant and equipment (1,306) (1,075)
Other, net (236) 530
Net cash used in investing activities (1,542) (545)
CASH AND CASH EQUIVALENTS
Net increase (decrease) during period 993 (184)
Beginning of period 1,058 560
End of period $2,051 $ 376
Cash paid during the period:
Interest $ 321 $ 268
Income taxes $ 323 $ 87
The accompanying notes to consolidated financial
statements are an integral part of these statements.
(UNAUDITED)
/TABLE
<PAGE>
MID-PLAINS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. The unaudited financial statements included herein have been prepared
pursuant to the rules and regulations of the Securities and Exchange
Commission. Certain information in footnote disclosures normally
included in financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted pursuant
to such rules and regulations, although the Company believes the
disclosures are adequate to make the information presented not
misleading. It is suggested that these financial statements be read
in conjunction with the financial statements and the notes thereto
included in the Company's Form 10-K for the year ended December 31,
1996.
In the opinion of the Company, the accompanying financial statements
contain all adjustments (consisting of normal recurring accruals)
necessary to present fairly the financial position as of March 31,
1997 and December 31, 1996, and the results of operations and cash
flows for the three months ended March 31, 1997 and 1996. The results
for the three months ended March 31, 1997 are not necessarily
indicative of the results of operations which may be expected for the
entire year ending December 31, 1997.
2. On April 28, 1997 PCS Wisconsin, LLC, a 75% owned subsidiary of Mid-
Plains, was granted a Personal Communication Service ("PCS") license
by the FCC for the Madison BTA at a total cost of $3,248,000. PCS
Wisconsin, LLC had made a deposited $325,000 in December of 1996
towards this cost. An additional $325,000 was paid on May 12, 1997
with the remaining $2,598,000 to be payable in installments starting
in 1999 through 2006.
3. The company is required to adopt Statement of Financial Accounting
Standards No. 128, "Earnings Per Share" for periods ending after
December 15, 1997. Management is of the opinion that this will not
have a material change in the company's earnings per share
calculation.
<PAGE>
MID-PLAINS, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
RESULTS OF OPERATIONS
Net income for the three months ended March 31, 1997 decreased $190,000
as compared to the same period in 1996. The primary factors that
influenced the results of operations are discussed below.
OPERATING REVENUES
Telephone Operations
Local network services revenues increased $492,000 for the first quarter
of 1997 as compared to the first quarter of 1996. The increase was due
principally to the Company's implementation of its Alternative
Regulation Plan on September 1, 1996, which had the effect of increasing
local network service revenues $431,000 for the first quarter of 1997 as
compared to the first quarter of 1996. Additionally, Mid-Plains
experienced an 8.8% growth in access lines during the first quarter of
1997.
Interstate network access and long distance network services revenues
increased $62,000 for the first quarter of 1997 as compared to the same
period in 1996. These revenues increased largely due to higher demand
for private line services as well as 6.1% higher demand for access
services for the three months ended March 31, 1997 as compared to the
same period in 1996. A true-up adjustment of $163,000 related to 1995
and 1996 revenues partially offset the increases noted above.
Intrastate network access and long distance network services revenues
increased $107,000 for the three months ended March 31,1997 as compared
to the same period in 1996. The increase in revenues was primarily due
to the company's implementation of intrastate intralata long distance
service in December of 1996 as well as a 7.8% higher demand for access
services in the first quarter of 1997 as compared to the same period in
1996. This increase was partially offset by $242,000 due to the effects
of a rate reduction resulting from the Company's implementation of their
Alternative Regulation Plan on September 1, 1996.
System sales and services revenues decreased $373,000 for the three
months ended March 31, 1997 as compared to the same period in 1996. The
decrease was primarily due to slow sales of new systems.
<PAGE>
OPERATING EXPENSES
Telephone Operations
Telephone operating expenses, which include plant, depreciation,
customer operations, corporate operations and general taxes, increased
$964,000 for the three months ended March 31, 1997 as compared to the
same period in 1996.
The increases in plant, customer and corporate operations were due
primarily to growth in internal operations. Additionally, plant
operations increased $185,000 and $64,000 due to long distance and
Internet access, respectively, for the three months ended March 31,
1997, as compared to the same period in 1996. Also, corporate operations
expense increased $200,000 during the first quarter of 1997 as compared
to 1996, due to the expenses incurred relating to the pending merger
with Pioneer Communications, Inc.
The increase in depreciation expense of $98,000 for the three months
ended March 31, 1996, as compared to the same periods in 1996, was
primarily due to additional plant investment.
System Sales and Services
As a percent of system sales and services revenues, cost of sales and
services was 56.8 percent for the three months ended March 31, 1997 as
compared to 65.9 percent for the same period in 1996. These changes were
primarily the result of the Company's higher equipment pricing.
LIQUIDITY AND CAPITAL RESOURCES
Net cash provided from operations of the Company and its subsidiaries
for the three months ended March 31, 1997 was $1,051,000. The net
increase in external financing during the same time period was
$2,022,000. Total construction expenditure for the three months ended
March 31, 1997 was $1,306,000.
It is expected for 1997 that the company's capital requirements for its
construction program, maturity and retirement of long-term debt,
dividend payments and investment in PCS Wisconsin, LLC, will be provided
for with cash flow from operations, the issuance of debt and, if
necessary, equity financing.
At May 12, 1997, the Company had available unused lines-of-credit of
$6,517,000. The Company has experienced no difficulty in obtaining
funds for its construction program or other purposes and anticipates
none in the future.
<PAGE>
MID-PLAINS, INC.
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits - (27) Financial Data Schedule
(b) Reports on Form 8-K
In a report filed on Form 8-K dated January 7, 1997, the
Company reported an agreement and plan of merger with Pioneer
Communications, Inc.
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.
MID-PLAINS, INC.
(Registrant)
Date May 14, 1997 /s/Howard G. Hopeman
Howard G. Hopeman, Vice-President and
Chief Financial Officer
Date May 14, 1997 /s/Fredrick E. Urben
Fredrick E. Urben, Vice-President,
Administration & Human Relations, Secretary
& Treasurer
<PAGE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 2,051
<SECURITIES> 0
<RECEIVABLES> 3,648
<ALLOWANCES> 0
<INVENTORY> 1,334
<CURRENT-ASSETS> 7,459
<PP&E> 51,248
<DEPRECIATION> 22,197
<TOTAL-ASSETS> 44,618
<CURRENT-LIABILITIES> 5,558
<BONDS> 0
0
0
<COMMON> 11,992
<OTHER-SE> 7,767
<TOTAL-LIABILITY-AND-EQUITY> 44,618
<SALES> 0
<TOTAL-REVENUES> 6,783
<CGS> 0
<TOTAL-COSTS> 5,490
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 282
<INCOME-PRETAX> 1,038
<INCOME-TAX> 341
<INCOME-CONTINUING> 697
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 697
<EPS-PRIMARY> .35
<EPS-DILUTED> .35
<PAGE>
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