<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 July 31, 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 SSE 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 September 7, 1994 was:
24,569,344 shares of common stock
1
<PAGE> 2
TCA CABLE TV, INC. AND SUBSIDIARIES
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page No.
--------
<S> <C>
PART I - FINANCIAL INFORMATION
Consolidated Balance Sheets - July 31, 1994 and October 31, 1993 3
Consolidated Statements of Operations -
Three and nine months ended July 31, 1994 and 1993 4
Consolidated Statement of Shareholders' Equity -
Nine months ended July 31, 1994 5
Consolidated Statements of Cash Flows -
Nine months ended July 31, 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>
2
<PAGE> 3
TCA CABLE TV, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
July 31, October 31,
ASSETS 1994 1993
--------------- ---------------
(Unaudited)
<S> <C> <C>
Cash $ 1,841,502 $ 1,450,276
--------------- ---------------
Accounts receivable, subscribers 4,818,745 4,723,024
--------------- ---------------
Accounts receivable, other 238,414 461,796
--------------- ---------------
Investments, at cost 2,285,581 -
--------------- ---------------
Property, plant and equipment, at cost:
Land 2,671,200 2,636,485
Distribution systems 241,387,452 225,115,438
Transportation equipment 6,814,651 5,932,948
Other 23,163,085 20,724,468
--------------- ---------------
274,036,388 254,409,339
Less accumulated depreciation (163,680,053) (147,998,653)
--------------- ---------------
110,356,335 106,410,686
--------------- ---------------
Other assets:
Intangibles, net of accumulated
amortization of $62,231,652 and
$53,536,525, respectively 166,164,167 174,407,377
Prepaid expenses 1,164,311 623,873
--------------- ---------------
167,328,478 175,031,250
--------------- ---------------
$ 286,869,055 $ 288,077,032
=============== ===============
</TABLE>
<TABLE>
<CAPTION>
July 31, October 31,
LIABILITIES 1994 1993
--------------- ---------------
(Unaudited)
<S> <C> <C>
Accounts payable $ 3,576,591 $ 4,749,068
Accrued expenses 12,728,715 9,713,501
Subscriber advance payments 4,018,952 3,884,635
Income taxes payable 112,132 1,212,732
Deferred income taxes 39,312,886 35,012,886
Term debt 131,748,911 143,253,390
--------------- ---------------
191,498,187 197,826,212
--------------- ---------------
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; 24,727,421 and
24,706,696 shares issued, respectively 2,472,742 2,470,670
Additional paid-in capital 42,725,821 42,300,381
Retained earnings 52,876,060 46,023,523
--------------- ---------------
98,074,623 90,794,574
Less treasury stock, at cost, 159,828
and 49,828 shares, respectively (2,703,754) (543,754)
--------------- ---------------
95,370,869 90,250,820
--------------- ---------------
$ 286,869,055 $ 288,077,032
=============== ===============
</TABLE>
The accompanying notes are an integral part
of the consolidated financial statements.
3
<PAGE> 4
TCA CABLE TV, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
July 31, July 31,
------------------ -----------------
1994 1993 1994 1993
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
CATV revenues $ 41,077,677 $ 38,304,936 $ 120,204,292 $ 112,798,950
--------------- --------------- --------------- ---------------
Operating expenses:
Salaries, wages and benefits 7,167,566 6,595,177 21,699,247 18,891,764
Programming costs 9,285,814 8,434,197 27,082,088 24,610,165
Other operating expenses 1,448,251 1,300,186 4,206,725 3,703,707
Selling, general and administrative 3,020,524 2,619,141 8,433,165 7,802,836
Depreciation and amortization 8,380,720 8,295,477 25,159,540 25,142,443
--------------- --------------- --------------- ---------------
29,302,875 27,244,178 86,580,765 80,150,915
--------------- --------------- --------------- ---------------
Operating income 11,774,802 11,060,758 33,623,527 32,648,035
Other income 77,106 84,845 1,719,073 325,727
Interest expense (2,448,017) (2,706,032) (7,311,312) (8,385,443)
--------------- --------------- --------------- ---------------
Income before income taxes 9,403,891 8,439,571 28,031,288 24,588,319
--------------- --------------- --------------- ---------------
Provision for income taxes:
Current 3,250,000 1,656,500 8,750,000 6,016,500
Deferred 800,000 1,795,500 2,400,000 3,733,500
--------------- --------------- --------------- ---------------
4,050,000 3,452,000 11,150,000 9,750,000
Income before cumulative effect of --------------- --------------- --------------- ---------------
change in accounting principle 5,353,891 4,987,571 16,881,288 14,838,319
Cumulative effect of change in
accounting principle (1,900,000)
--------------- --------------- --------------- ---------------
Net income $ 5,353,891 $ 4,987,571 $ 14,981,288 $ 14,838,319
=============== =============== =============== ===============
Earnings per common share before
cumulative effect of change in
accounting principle $ 0.21 $ 0.20 $ 0.68 $ 0.60
Cumulative effect of change in
accounting principle (0.07)
--------------- --------------- --------------- ---------------
Earnings per common share $ 0.21 $ 0.20 $ 0.61 $ 0.60
=============== =============== =============== ===============
</TABLE>
The accompanying notes are an integral part
of the consolidated financial statements.
4
<PAGE> 5
TCA CABLE TV, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
(UNAUDITED)
<TABLE>
<CAPTION>
Common Stock Issued Additional
--------------------------- Paid-In Retained Treasury
Shares Amount Capital 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 nine months 14,981,288
ended July 31, 1994
Issuance of common stock 17,571 1,757 393,348
Stock options exercised 3,154 315 32,092
Treasury stock purchased (2,160,000)
Cash dividends at $.33 a share (8,128,751)
---------- ------------- ------------- ------------- ------------
Balance, July 31, 1994 24,727,421 $ 2,472,742 $ 42,725,821 $ 52,876,060 $ (2,703,754)
========== ============= ============= ============= ============
</TABLE>
The accompanying notes are an integral part
of the consolidated financial statements.
5
<PAGE> 6
TCA CABLE TV, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Nine Months Ended
July 31,
-----------------
1994 1993
---------------- -----------------
<S> <C> <C>
Cash flows from operating activities:
Cash received from customers $ 120,466,270 $ 112,809,405
Cash paid to suppliers and employees (59,630,482) (52,721,063)
Other revenue received 301,316 325,727
Interest paid (7,404,651) (8,515,123)
Income taxes paid (9,850,600) (5,559,082)
---------------- ----------------
Net cash provided by operating activities 43,881,853 46,339,864
---------------- ----------------
Cash flows from investing activities:
Payments for purchases of companies
and CATV systems (2,905,411) (6,932,650)
Capital expenditures (20,602,344) (16,443,787)
Proceeds from sale of assets 1,777,950 -
---------------- ----------------
Net cash used in investing activities (21,729,805) (23,376,437)
---------------- ----------------
Cash flows from financing activities:
Borrowings of term debt 53,599,990 86,399,999
Repayments of term debt (65,104,469) (101,564,044)
Treasury stock purchased (2,160,000)
Proceeds from stock options exercised 32,407 77,742
Dividends paid (8,128,750) (7,382,128)
---------------- ----------------
Net cash provided by (used in) financing activities (21,760,822) (22,468,431)
---------------- ----------------
Net increase (decrease) in cash and cash equivalents 391,226 494,996
Cash and cash equivalents at beginning of period 1,450,276 818,536
---------------- ----------------
Cash and cash equivalents at end of period $ 1,841,502 $ 1,313,532
================ ================
</TABLE>
The accompanying notes are an integral part
of the consolidated financial statements.
6
<PAGE> 7
TCA CABLE TV, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS, CONTINUED
(UNAUDITED)
<TABLE>
<CAPTION>
Nine Months Ended
July 31,
----------------------------------
1994 1993
---------------- ----------------
<S> <C> <C>
Reconciliation of net income to net cash
provided by operating activities:
Net income $ 14,981,288 $ 14,838,319
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation expense 16,464,413 16,235,321
Amortization expense 8,695,127 8,907,122
Deferred income taxes 4,300,000 3,733,500
Contribution of common stock to retirement plan 395,105 343,816
(Gain) loss on sale of assets (1,459,669)
Share of (earnings) losses of affiliates 41,912
(Increase) decrease in other assets (540,438) (602,937)
(Increase) decrease in accounts receivable, subscribers (95,721) (733,088)
(Increase) decrease in accounts receivable, other 223,382 452,256
Increase (decrease) in subscriber advance payments 134,317 291,287
Increase (decrease) in accrued expenses 3,015,214 3,178,302
Increase (decrease) in income taxes payable (1,100,600) 457,418
Increase (decrease) in accounts payable (1,172,477) (761,452)
---------------- ----------------
Net cash provided by operating activities $ 43,881,853 $ 46,339,864
================ ================
</TABLE>
The accompanying notes are an integral part
of the consolidated financial statements.
7
<PAGE> 8
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 July 31, 1994 and for the nine 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 nine months ended July
31, 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 24,579,529 shares and 24,652,524 shares for 1994 and 1993,
respectively.
D. On July 1, 1994, the Company acquired the assets of the cable television
system serving Elm Springs, Arkansas and parts of Springdale, Arkansas. This
cable television system is located adjacent to, and will be operated by, a
currently owned system of the Company. The acquisition was funded by the
payment of $515,665 in cash obtained from operations.
E. 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 September 7, 1994, the Company had repurchased 110,000 shares.
8
<PAGE> 9
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 July 31,
1994 with the same three-month period of the prior year reveals increases in
revenues, operating income and net income. Revenues, operating income, and
net income increased by approximately 7%, 6% and 7%, respectively.
The revenue increase was mostly attributable to internal growth. The Company's
basic accounts increased from 445,969 at July 31, 1993 to 454,568 at July 31,
1994 or approximately 2%. Average revenue per account increased from $28.25 to
$29.30 or approximately 4%.
Operating expenses increased approximately 8% during the third quarter of
fiscal 1994 as compared to the third quarter of fiscal 1993. Management
attributes approximately 28% of this increase to increased salaries, wages and
benefits and approximately 41% 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 approximately $258,000 or 10%. The decrease was
attributable to the repayment of term debt.
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 5. Other Information
(a) Exhibit 27 - Financial Data Schedule
The Financial Data Schedule contains selected financial data
from this filing which must be submitted electronically under
the "EDGAR" reporting system. Printed copies of this filing
will not include this exhibit.
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.
9
<PAGE> 10
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: September 7, 1994 /s/ Robert M. Rogers
Robert M. Rogers, Chairman and
Chief Executive Officer
Date: September 7, 1994 /s/ Jimmie F. Taylor
Jimmie F. Taylor, Vice President,
CFO and Treasurer
10
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> OCT-31-1994
<PERIOD-START> NOV-01-1993
<PERIOD-END> JUL-31-1994
<CASH> 1,841,502
<SECURITIES> 0
<RECEIVABLES> 4,818,745
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 274,036,388
<DEPRECIATION> 163,680,053
<TOTAL-ASSETS> 286,869,055
<CURRENT-LIABILITIES> 0
<BONDS> 0
<COMMON> 2,472,742
0
0
<OTHER-SE> 95,601,881
<TOTAL-LIABILITY-AND-EQUITY> 286,869,055
<SALES> 120,204,292
<TOTAL-REVENUES> 120,204,292
<CGS> 0
<TOTAL-COSTS> 86,580,765
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 7,311,312
<INCOME-PRETAX> 28,031,288
<INCOME-TAX> 11,150,000
<INCOME-CONTINUING> 16,881,288
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 1,900,000
<NET-INCOME> 14,981,288
<EPS-PRIMARY> .61
<EPS-DILUTED> .61
</TABLE>
