<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
( X ) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended: April 30, 1994
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______________ to ______________
Commission File No: 0-11478
TCA CABLE TV, INC.
(Exact name of registrant as specified in its charter)
Texas 75-1798185
(State or other jurisdiction of (IRS Employer Identification Number)
incorporation or organization)
3015 S. E. Loop 323, Tyler, Texas 75701
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 903/595-3701
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
------- -------
The number of shares outstanding of each of the registrant's classes of common
stock as of June 9, 1994 was:
24,563,958 shares of common stock
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TCA CABLE TV, INC. AND SUBSIDIARIES
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page No.
--------
<S> <C>
PART I - FINANCIAL INFORMATION
Consolidated Balance Sheets - April 30, 1994 and October 31, 1993 3
Consolidated Statements of Operations -
Three and Six months ended April 30, 1994 and 1993 4
Consolidated Statement of Shareholders' Equity -
Six months ended April 30, 1994 5
Consolidated Statements of Cash Flows -
Six months ended April 30, 1994 and 1993 6-7
Notes to Consolidated Financial Statements 8
Management's Discussion and Analysis of Financial
Condition and Results of Operations 9
PART II - OTHER INFORMATION 9
SIGNATURES 10
</TABLE>
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TCA CABLE TV, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
April 30, October 31,
ASSETS 1994 1993
------------ -------------
(Unaudited)
<S> <C> <C>
Cash $ 1,526,943 $ 1,450,276
------------ -------------
Accounts receivable, subscribers 4,354,161 4,723,024
------------ -------------
Accounts receivable, other 218,230 461,796
------------ -------------
Investments, at cost 111,929 --
------------ -------------
Property, plant and equipment, at cost:
Land 2,656,640 2,636,485
Distribution systems 235,106,083 225,115,438
Transportation equipment 6,480,329 5,932,948
Other 22,257,865 20,724,468
------------ -------------
266,500,917 254,409,339
Less accumulated depreciation (158,197,708) (147,998,653)
------------ -------------
108,303,209 106,410,686
------------ -------------
Other assets:
Intangibles, net of accumulated
amortization of $59,333,276 and
$53,536,525, respectively 168,670,164 174,407,377
Prepaid expenses 1,242,110 623,873
------------ -------------
169,912,274 175,031,250
------------ -------------
$284,426,746 $ 288,077,032
============ =============
</TABLE>
<TABLE>
<CAPTION>
April 30, October 31,
LIABILITIES 1994 1993
------------ -------------
(Unaudited)
<S> <C> <C>
Accounts payable $ 4,423,297 $ 4,749,068
Accrued expenses 9,834,885 9,713,501
Subscriber advance payments 4,123,318 3,884,635
Income taxes payable 322,075 1,212,732
Deferred income taxes 38,512,886 35,012,886
Term debt 132,450,437 143,253,390
------------- -------------
189,666,898 197,826,212
------------- -------------
Contingencies and commitments
SHAREHOLDERS' EQUITY
Preferred stock, $1.00 par value,
5,000,000 shares authorized; none
issued
Common stock, $10 par value, 60,000,000
shares authorized; 24,721,844 and
24,706,696 shares issued, respectively 2,472,184 2,470,670
Additional paid-in capital 42,607,013 42,300,381
Retained earnings 50,224,405 46,023,523
------------- -------------
95,303,602 90,794,574
Less treasury stock, (543,754) (543,754)
------------- -------------
49,828 shares, at cost 94,759,848 90,250,820
------------- -------------
$ 284,426,746 $ 288,077,032
============= =============
</TABLE>
The acccompanying notes are an integral part
of the consolidated financial statements.
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TCA CABLE TV, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
April 30, April 30,
------------------------------- ------------------------------
1994 1993 1994 1993
---------------- -------------- -------------- ---------------
<S> <C> <C> <C> <C>
CATV revenues $ 39,848,022 $ 37,843,791 $ 79,126,615 $ 74,494,014
Operating expenses:
Salaries, wages and benefits 7,623,348 6,178,509 14,531,681 12,296,587
Programming costs 8,924,821 8,317,202 17,796,274 16,175,968
Other operating expenses 1,472,291 1,182,512 2,758,474 2,403,521
Selling, general and administrative 2,747,857 2,547,982 5,412,641 5,183,695
Depreciation and amortization 8,426,557 8,633,591 16,778,820 16,846,966
---------------- -------------- -------------- ---------------
29,194,874 26,859,796 57,277,890 52,906,737
---------------- -------------- -------------- ---------------
Operating income 10,653,148 10,983,995 21,848,725 21,587,277
Other income 983,734 132,837 1,641,967 240,882
Interest expense (2,373,969) (2,794,912) (4,863,295) (5,679,411)
---------------- -------------- -------------- ---------------
Income before income taxes 9,262,913 8,321,920 18,627,397 16,148,748
---------------- -------------- -------------- ---------------
Provision for income taxes:
Current 2,700,000 2,247,000 5,500,000 4,360,000
Deferred 800,000 999,000 1,600,000 1,938,000
---------------- -------------- -------------- ---------------
3,500,000 3,246,000 7,100,000 6,298,000
---------------- -------------- -------------- ---------------
Income before cumulative effect of
change in accounting principle 5,762,913 5,075,920 11,527,397 9,850,748
Cumulative effect of change in
accounting principle (1,900,000)
---------------- -------------- -------------- ---------------
Net Income $ 5,762,913 $ 5,075,920 $ 9,627,397 $ 9,850,748
================ ============== ============== ===============
Earnings per common share before
cumulative change in accounting principle $ 0.24 $ 0.21 $ 0.47 $ 0.40
Cumulative effect of change in
accounting principle (0.07)
---------------- -------------- -------------- ---------------
Earnings per common share $ 0.24 $ 0.21 $ 0.40 $ 0.40
================ ============== ============== ===============
</TABLE>
The accompanying notes are an integral part
of the consolidated financial statements.
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TCA CABLE TV, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDER'S EQUITY
(UNAUDITED)
<TABLE>
<CAPTION>
Common Stock Issued Additional
-------------------------------- Paid-In Retained Treasury
Shares Amount Captial Earnings Stock
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Balance, October 31, 1993 24,706,696 $ 2,470,670 $42,300,381 $46,023,523 $ (543,754)
Net income for the six months 9,627,397
ended April 30, 1994
Issuance of common stock 12,044 1,204 275,305
Stock options exercised 3,104 310 31,327
Cash dividends at $.22 a share (5,426,515)
---------- ----------- ----------- ----------- ----------
Balance, April 30, 1994 24,721,844 $ 2,472,184 $42,607,013 $50,224,405 $ (543,754)
========== =========== =========== =========== ==========
</TABLE>
The accompanying notes are an integral
part of the consolidated financial statements.
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TCA CABLE TV, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Six Months Ended
April 30,
---------------------------------
1994 1993
--------------- ----------------
<S> <C> <C>
Cash flows from operating activities:
Cash received from customers $ 79,977,727 $ 75,085,728
Cash paid to suppliers and employees (40,877,191) (36,199,098)
Other revenue received 182,298 240,882
Interest paid (5,031,290) (5,802,760)
Income taxes paid (6,390,657) (3,659,207)
--------------- ----------------
Net cash provided by operating activities 27,860,887 29,665,545
--------------- ----------------
Cash flows from investing activities:
Payments for purchases of companies
and CATV systems (111,929) (2,127,677)
Capital expenditures (13,252,411) (12,593,220)
--------------- ----------------
Net cash used in investing activities (13,364,340) (14,720,897)
--------------- ----------------
Cash flows from financing activities:
Borrowings of term debt 35,199,990 76,299,999
Repayments of term debt (46,002,942) (85,562,662)
Proceeds from sale of cable systems 1,777,950
Proceeds from stock options exercised 31,639 77,280
Dividends paid (5,426,517) (4,919,049)
--------------- ----------------
Net cash provided by (used in) financing activities (14,419,880) (14,104,432)
--------------- ----------------
Net increase (decrease) in cash and cash equivalents 76,667 840,216
Cash and cash equivalents at beginning of period 1,450,276 818,536
--------------- ----------------
Cash and cash equivalents at end of period $ 1,526,943 $ 1,658,752
=============== ================
</TABLE>
The accompanying notes are an integral
part of the consolidated financial statements.
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TCA CABLE TV, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS, Continued
(UNAUDITED)
<TABLE>
<CAPTION>
Six Months Ended
April 30,
---------------------------------
1994 1993
--------------- ----------------
<S> <C> <C>
Reconciliation of net income to net cash
provided by operating activities:
Net income $ 9,627,397 $ 9,850,748
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation expense 10,982,068 10,950,861
Amortization expense 5,796,751 5,896,105
Deferred income taxes 3,500,000 1,938,000
Contribution of common stock to retirement plan 276,509 227,893
(Increase) decrease in other assets (618,237) (737,715)
(Increase) decrease in accounts receivable, subscribers 368,863 (278,583)
(Increase) decrease in accounts receivable, other 243,566 263,578
(Gain) loss on sale of assets (1,459,669)
Increase (decrease) in subscriber advance payments 238,683 606,719
Increase (decrease) in accrued expenses 121,384 2,188,736
Increase (decrease) in income taxes payable (890,657) 700,793
Increase (decrease) in accounts payable (325,771) (1,941,590)
--------------- ----------------
Net cash provided by operating activities $ 27,860,887 $ 29,665,545
=============== ================
</TABLE>
The accompanying notes are an integral
part of the consolidated financial statements.
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TCA CABLE TV, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
A. Pursuant to the rules and regulations of the Securities and Exchange
Commission, certain financial information has been condensed and certain
footnote disclosures have been omitted. Such information and disclosures are
normally included in financial statements prepared in accordance with generally
accepted accounting principles.
These condensed financial statements should be read in conjunction with the
financial statements and notes thereto in the Company's latest report on Form
10-K.
The financial statements as of April 30, 1994 and for the six month period
then ended are unaudited; however, in the opinion of management, such
statements include all adjustments (consisting solely of normal and recurring
adjustments) necessary to present fairly the financial information included
therein.
B. The consolidated statements of operations for the six months ended April
30, 1994, are not necessarily indicative of the operating results to be
expected for the full year.
C. Earnings per common share are computed based upon the weighted average
common shares outstanding during the period, including common stock
equivalents, of 24,685,832 shares and 24,613,854 shares for 1994 and 1993,
respectively.
D. On March 1, 1994, the Company sold the assets of the cable television
systems serving 807 subscribers in two cities. The sales price was $1,009,000
resulting in an increase in net income of approximately $558,000 or $.02 per
share.
E. In March 1994, the Company acquired 40% of the stock of Intermedia
Technologies, Inc. The Company also acquired a 40% interest in Intermedia
Technologies, Ltd., a limited partnership engaged in telecommunications
engineering and construction. Intermedia Technologies, Inc. is the general
partner of Intermedia Technologies, Ltd. The Company's investment in both
entities was approximately $120,000 paid in cash from operations.
F. In April 1994, the Company acquired 80% of the stock of AvComm Corporation
("AvComm"), a new company formed to sell telecommunications services. The
purchase price of $160,000 was obtained from operations. The consolidated
financial statements include the accounts of AvComm. All material intercompany
transactions and balances have been eliminated.
G. On May 3, 1994, the Company announced its intention to buy back into
treasury up to one million shares of the Company's common stock. Shares
purchased will be available for use in acquisitions or other corporate
purposes. As of June 9, 1994, the Company had repurchased 110,000 shares.
H. On June 1, 1994, the Company acquired 50% of the common stock of TCA
Communications, Inc. ("TCAC"). TCAC is a new corporation whose initial purpose
will be to sell long distance telephone services in the cable television
communities presently served by the Company and in other adjacent markets. The
acquisition was funded by the payment of $2 million in cash obtained from
operations. The remaining 50% of TCAC is owned by a privately held independent
long distance company.
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TCA CABLE TV, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS - Comparison of the three-month period ended April 30,
1994, with the same three-month period of the prior year reveals increases in
revenues and net income. Revenues and net income increased by approximately 5%
and 14%, respectively. Operating income decreased by approximately 3%.
The revenue increase was mostly attributable to internal growth. The Company's
basic accounts increased from 449,183 at April 30, 1993 to 460,360 at April 30,
1994 or approximately 2%. Average revenue per account increased from $28.00 to
$28.80 or approximately 3%.
Operating expenses increased approximately 9% during the second quarter of
fiscal 1994 as compared to the second quarter of fiscal 1993. Management
attributes approximately 62% of this increase to increased salaries, wages and
benefits and approximately 26% to increases in programming costs. The remainder
of the increase in operating expenses arises from general expansion of the
Company's cable system operations.
Interest expense decreased by $421,000 or approximately 15%. The decrease was
attributable to the repayment of term debt.
During the second quarter of 1994, several of the Company's cable television
systems were severely damaged by ice storms. The uninsured damages from these
ice storms decreased the Company's revenue for the second quarter by
approximately $224,000. Operating income before depreciation was reduced
approximately $598,000 or 3% and net income was reduced approximately $371,000,
or 1%.
LIQUIDITY AND CAPITAL RESOURCES - The Company's capital expenditures have been
primarily for cable system construction, upgrading and rebuilding, acquisition
of other cable systems and purchases of converters to be furnished to
subscribers.
Expenditures for rebuilding, upgrading and maintaining the Company's cable
systems and for converter purchases have been financed principally with cash
flow from operations. Acquisitions of cable systems have generally been financed
with cash flow from operations and through bank borrowings.
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibit A - None
(b) No reports on Form 8-K have been filed during the quarter for
which this report is filed.
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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 thereto duly authorized.
TCA CABLE TV, INC.
Date: June 9, 1994 /s/ ROBERT M. ROGERS
Robert M. Rogers, Chairman and
Chief Executive Officer
Date: June 9, 1994 /s/ JIMMIE F. TAYLOR
Jimmie F. Taylor, Vice President,
CFO and Treasurer
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