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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: January 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 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 March 14, 1994 was:
24,666,019 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 - January 31, 1994 and October 31, 1993 3
Consolidated Statements of Operations -
Three months ended January 31, 1994 and 1993 4
Consolidated Statement of Shareholders' Equity -
Three months ended January 31, 1994 5
Consolidated Statements of Cash Flows -
Three months ended January 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>
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TCA CABLE TV, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
January 31, October 31,
ASSETS 1994 1993
----------- -----------
(Unaudited)
<S> <C> <C>
Cash $ 2,538,530 $ 1,450,276
-------------- --------------
Accounts receivable, subscribers 4,478,131 4,723,024
-------------- --------------
Accounts receivable, other 148,110 461,796
-------------- --------------
Property, plant and equipment, at cost:
Land 2,636,485 2,636,485
Distribution systems 229,078,654 225,115,438
Transportation equipment 6,093,322 5,932,948
Other 21,425,153 20,724,468
-------------- --------------
259,233,614 254,409,339
Less accumulated depreciation (152,988,716) (147,998,653)
-------------- --------------
106,244,898 106,410,686
-------------- --------------
Other assets:
Intangibles, net of accumulated
amortization of $56,434,351 and
$53,536,525, respectively 171,509,551 174,407,377
Prepaid expenses 1,350,440 623,873
-------------- --------------
172,859,991 175,031,250
-------------- --------------
$ 286,269,660 $ 288,077,032
============== ==============
</TABLE>
<TABLE>
<CAPTION>
January 31, October 31,
LIABILITIES 1994 1993
----------- -----------
(Unaudited)
<S> <C> <C>
Accounts payable $ 6,849,100 $ 4,749,068
Accrued expenses 9,255,971 9,713,501
Subscriber advance payments 4,709,891 3,884,635
Income taxes payable 3,741,714 1,212,732
Deferred income taxes 37,712,886 35,012,886
Term debt 132,451,927 143,253,390
------------- -------------
194,721,489 197,826,212
------------- -------------
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; 24,713,345 and
24,706,696 shares issued, respect 2,471,335 2,470,670
Additional paid-in capital 42,445,541 42,300,381
Retained earnings 47,175,049 46,023,523
------------- -------------
92,091,925 90,794,574
Less treasury stock,
49,828 shares, at cost (543,754) (543,754)
------------- -------------
91,548,171 90,250,820
------------- -------------
$ 286,269,660 $ 288,077,032
============= =============
</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 OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended
January 31,
-----------------------------
1994 1993
------------ -------------
<S> <C> <C>
CATV revenues $ 39,278,593 $ 36,650,223
Operating expenses:
Salaries, wages and benefits 6,908,333 6,118,078
Programming costs 8,871,453 7,858,766
Other operating expenses 1,286,183 1,221,009
Selling, general and administrative 2,664,784 2,635,713
Depreciation and amortization 8,352,263 8,213,375
------------ -------------
28,083,016 26,046,941
------------ -------------
Operating income 11,195,577 10,603,282
Other income 658,233 108,045
Interest expense (2,489,326) (2,884,499)
------------ -------------
Income before income taxes 9,364,484 7,826,828
------------ -------------
Provision for income taxes:
Current 2,800,000 2,113,000
Deferred 800,000 939,000
------------ -------------
3,600,000 3,052,000
------------ -------------
Income before cumulative effect of change
in accounting principle 5,764,484 4,774,828
Cumulative effect of change in accounting
principle (1,900,000)
------------ -------------
Net income $ 3,864,484 $ 4,774,828
============ =============
Earnings per common share before cumulative
effect of change in accounting principle $ 0.23 $ 0.19
Cumulative effect of change in accounting
principle (0.07)
------------ -------------
Earnings per common share $ 0.16 $ 0.19
============ =============
</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 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 three months
ended January 31, 1994 3,864,484
Issuance of common stock 5,105 511 133,286
Stock options exercised 1,544 154 11,874
Cash dividends at $.11 a share (2,712,958)
---------- ----------- -------------- ------------ -----------
Balance, January 31, 1994 24,713,345 $ 2,471,335 $ 42,445,541 $ 47,175,049 $ (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>
Three Months Ended
January 31,
------------------------------
1994 1993
------------- --------------
<S> <C> <C>
Cash flows from operating activities:
Cash received from customers $ 40,662,428 $ 37,667,459
Cash paid to suppliers and employees (18,553,204) (15,740,692)
Other revenue received 98,868 108,045
Interest paid (2,617,142) (2,960,902)
Income taxes paid (271,018) (53,500)
------------- -------------
Net cash provided by operating activities 19,319,932 19,020,410
------------- -------------
Cash flows from investing activities:
Payments for purchases of companies
and CATV systems
Capital expenditures (5,498,485) (6,671,404)
Proceeds from sales of assets 769,200
------------- -------------
Net cash used in investing activities (4,729,285) (6,671,404)
------------- -------------
Cash flows from financing activities:
Borrowings of term debt 9,599,990 900,000
Repayments of term debt (20,401,453) (10,161,315)
Proceeds from stock options exercised 12,029 36,727
Dividends paid (2,712,959) (2,456,513)
------------- -------------
Net cash provided by (used in) financing activities (13,502,393) (11,681,101)
------------- -------------
Net increase (decrease) in cash and cash equivalents 1,088,254 667,905
Cash and cash equivalents at beginning of period 1,450,276 818,536
------------- -------------
Cash and cash equivalents at end of period $ 2,538,530 $ 1,486,441
============= =============
</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>
Three Months Ended
January 31,
----------------------------
1994 1993
------------- -------------
<S> <C> <C>
Reconciliation of net income to net cash
provided by operating activities:
Net income $ 3,864,484 $ 4,774,828
Adjustments to reconcile net income
to net cash provided by operating
activities:
Cumulative effect of change in accounting principle 1,900,000
Depreciation expense 5,454,437 5,360,134
Amortization expense 2,897,826 2,853,241
(Gain) loss on sale of assets (559,365)
Deferred income taxes 800,000 939,000
Contribution of common stock to retirement plan 133,798 119,979
(Increase) decrease in other assets (726,567) (493,616)
(Increase) decrease in accounts receivable, subscribers 244,893 (249,761)
(Increase) decrease in accounts receivable, other 313,686 357,199
Increase (decrease) in subscriber advance payments 825,256 909,798
Increase (decrease) in accrued expenses (457,530) 461,567
Increase (decrease) in income taxes payable 2,528,982 2,059,500
Increase (decrease) in accounts payable 2,100,032 1,928,541
------------- -------------
Net cash provided by operating activities $ 19,319,932 $ 19,020,410
============= =============
</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 January 31, 1994 and for the three
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 three months
ended January 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 24,695,803 shares and 24,587,494 shares
for 1994 and 1993, respectively.
D. Effective November 1, 1993, the Company adopted the provisions of
Statement of Financial Accounting Standards No. 109, "Accounting for
Income Taxes" ("SFAS 109"). SFAS 109 requires recognition of
deferred tax liabilities and assets for the expected future tax
consequences of events that have been included in the financial
statements or tax returns. Under this method, deferred tax
liabilites and assets are determined based on the difference between
the financial statement and tax bases of assets and liabilites using
enacted tax rates in effect for the year in which the differences
are expected to reverse. As of November 1, 1993, the Company
recorded a one-time tax charge of $1,900,000 or $.07 per share,
which amount represents the net increase to the deferred tax
liability as of that date. Such amount has been reflected in the
consolidated statements of operations as the cumulative effect
of a change in accounting principle.
E. On December 1, 1993, the Company sold the assets of a cable
television system serving 641 subscribers in one city. The sales
price was $769,200 resulting in an increase in net income of
approximately $344,000 or $.01 per share.
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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 January 31,
1994, with the same three-month period of the prior year reveals increases in
revenues, operating income and income before cumulative effect of change in
accounting principle. Revenues, operating income, and income before
cumulative effect of change in accounting principle increased by approximately
7%, 6% and 21%, respectively. Net income decreased 19% as a result of the
adoption of SFAS 109. See note D.
The revenue increase was mostly attributable to internal growth. The
Company's basic accounts increased from 442,356 at January 31, 1993 to 457,061
at January 31, 1994 or approximately 3%. Average revenue per account
increased from $27.76 to $28.72 or approximately 3%.
Operating expenses increased approximately 8% during the first quarter of
fiscal 1994 as compared to the first quarter of fiscal 1993. Management
attributes approximately 39% of this increase to increased salaries, wages and
benefits and approximately 50% 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 $395,000 or approximately 14%. The decrease was
attributable to a reduction in 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 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: March 16, 1994 /s/ ROBERT M. ROGERS
Robert M. Rogers, Chairman and
Chief Executive Officer
Date: March 16, 1994 /s/ JIMMIE F. TAYLOR
Jimmie F. Taylor, Vice President,
CFO and Treasurer
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