<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Amendment No. 1)
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended: July 31, 1995
-------------
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)
<TABLE>
<S> <C>
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)
</TABLE>
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 13, 1995 was:
24,566,735 shares of common stock
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1
<PAGE> 2
Reference is made to the current report on Form 10-Q (the "Form 10-Q") filed by
TCA Cable TV, Inc. (the "Company") on September 14, 1995. The Form 10-Q is
hereby amended to change the earnings per share from $0.32 to $0.31 for the
quarter ended July 31, 1995 and from $0.94 to $0.93 for the nine months ended
July 31, 1995. This change is a result of a change in rounding when calculating
the earnigns per share on a quarterly basis versus an annualized basis. There
are no changes to the Company's earnings. The Form 10-Q is hereby amended to
read in its entirety as follows:
TCA CABLE TV, INC. AND SUBSIDIARIES
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page No.
--------
<S> <C>
PART I - FINANCIAL INFORMATION
Consolidated Balance Sheets - July 31, 1995 and October 31, 1994 3
Consolidated Statements of Operations -
Three and nine months ended July 31, 1995 and 1994 4
Consolidated Statement of Shareholders' Equity -
Nine months ended July 31, 1995 5
Consolidated Statements of Cash Flows -
Nine months ended July 31, 1995 and 1994 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 1995 1994
-------------- -------------
(Unaudited)
<S> <C> <C>
Cash $ 2,285,423 $ 2,445,112
-------------- -------------
Accounts receivable, subscribers 7,195,483 4,913,712
-------------- -------------
Accounts receivable, other 971,881 164,904
-------------- -------------
Notes receivable 2,500,000 0
-------------- -------------
Investments, at cost 1,708,501 2,223,038
-------------- -------------
Property, plant and equipment, at cost:
Land 2,893,678 2,661,055
Distribution systems 284,772,960 243,607,084
Transportation equipment 8,152,506 6,513,387
Other 25,902,738 22,553,063
-------------- -------------
321,721,882 275,334,589
Less accumulated depreciation (178,255,051) (162,749,992)
-------------- -------------
143,466,831 112,584,597
-------------- -------------
Other assets:
Intangibles, net of accumulated
amortization of $70,658,036 and
$65,132,149, respectively 271,668,382 163,386,733
Prepaid expenses 1,807,239 494,839
-------------- -------------
273,475,621 163,881,572
-------------- -------------
$ 431,603,740 $ 286,212,935
============== =============
</TABLE>
<TABLE>
<CAPTION>
July 31, October 31,
LIABILITIES 1995 1994
-------------- -------------
(Unaudited)
<S> <C> <C>
Accounts payable $ 7,484,156 $ 5,357,363
Accrued expenses 13,122,819 11,276,727
Subscriber advance payments 3,393,566 3,739,313
Income taxes payable (1,265,239) 495,278
Deferred income taxes 45,400,000 40,000,000
Term debt 251,027,409 126,447,345
-------------- -------------
319,162,711 187,316,026
-------------- -------------
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; 24,765,517 and
24,733,261 shares issued, respectively 2,476,552 2,473,326
Additional paid-in capital 43,361,240 42,860,849
Retained earnings 70,406,992 56,266,488
-------------- -------------
116,244,784 101,600,663
Less treasury stock, at cost, 209,828
and 159,828 shares, respectively (3,803,754) (2,703,754)
-------------- -------------
112,441,030 98,896,909
-------------- -------------
$ 431,603,740 $ 286,212,935
============== =============
</TABLE>
The accompanying notes are an integral part
of the consolidated financial statements.
<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,
------------------------- ---------------------------
1995 1994 1995 1994
----------- ----------- ------------ ------------
<S> <C> <C> <C> <C>
CATV revenues $49,125,564 $41,077,677 $136,383,643 $120,204,292
----------- ----------- ------------ ------------
Operating expenses:
Salaries, wages and benefits 8,225,263 7,167,566 23,485,915 21,699,247
Programming costs 11,870,717 9,285,814 31,763,534 27,082,088
Other operating expenses 1,655,180 1,448,251 4,679,205 4,206,725
Selling, general and administrative 3,258,751 3,020,524 8,688,572 8,433,165
Depreciation and amortization 8,239,630 8,380,720 21,083,383 25,159,540
----------- ----------- ------------ ------------
33,249,541 29,302,875 89,700,609 86,580,765
----------- ----------- ------------ ------------
Operating income 15,876,023 11,774,802 46,683,034 33,623,527
Other income (136,928) 77,106 165,376 1,719,073
Interest expense (3,984,583) (2,448,017) (8,868,776) (7,311,312)
----------- ----------- ------------ ------------
Income before income taxes 11,754,512 9,403,891 37,979,634 28,031,288
----------- ----------- ------------ ------------
Provision for income taxes:
Current 1,730,000 3,250,000 9,600,000 8,750,000
Deferred 2,500,000 800,000 5,400,000 2,400,000
----------- ----------- ------------ ------------
4,230,000 4,050,000 15,000,000 11,150,000
----------- ----------- ------------ ------------
Income before cumulative effect of
change in accounting principle 7,524,512 5,353,891 22,979,634 16,881,288
Cumulative effect of change in
accounting principle (1,900,000)
----------- ----------- ------------ ------------
Net income $ 7,524,512 $ 5,353,891 $ 22,979,634 $ 14,981,288
=========== =========== ============ ============
Earnings per common share before
cumulative effect of change in
accounting principle $ 0.31 $ 0.21 $ 0.93 $ 0.68
Cumulative effect of change in
accounting principle (0.07)
----------- ----------- ------------ ------------
Earnings per common share $ 0.31 $ 0.21 $ 0.93 $ 0.61
=========== =========== ============ ============
</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, 1994 24,733,261 $2,473,326 $42,860,849 $56,266,488 $(2,703,754)
Net income for the nine months 22,979,634
ended July 31, 1995
Issuance of common stock 14,799 1,480 355,996
Stock options exercised 17,457 1,746 144,395
Treasury stock purchased (1,100,000)
Cash dividends at $.36 a share (8,839,130)
---------- ---------- ----------- ----------- -----------
Balance, July 31, 1995 24,765,517 $2,476,552 $43,361,240 $70,406,992 $(3,803,754)
========== ========== =========== =========== ===========
</TABLE>
The accompanying notes are an integral part
of the consolidated financial statements.
<PAGE> 6
TCA CABLE TV, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Nine Months Ended
July 31,
----------------------------
1995 1994
------------- ------------
<S> <C> <C>
Cash flows from operating activities:
Cash received from customers $ 132,949,148 $120,466,270
Cash paid to suppliers and employees (65,985,498) (59,630,482)
Other revenue received 516,078 301,316
Interest paid (8,482,542) (7,404,651)
Income taxes paid (11,360,517) (9,850,600)
------------- ------------
Net cash provided by operating activities 47,636,669 43,881,853
------------- ------------
Cash flows from investing activities:
Payments for purchases of companies
and CATV systems (131,819,265) (2,905,411)
Capital expenditures (29,049,498) (20,602,344)
Proceeds from sale of assets 785,331 1,777,950
------------- ------------
Net cash used in investing activities (160,083,432) (21,729,805)
------------- ------------
Cash flows from financing activities:
Borrowings of term debt 277,884,990 53,599,990
Repayments of term debt (153,304,927) (65,104,469)
Loans to affiliates (2,500,000)
Treasury stock purchased (1,100,000) (2,160,000)
Proceeds from stock options exercised 146,141 32,407
Dividends paid (8,839,130) (8,128,750)
------------- ------------
Net cash provided by (used in) financing activities 112,287,074 (21,760,822)
------------- ------------
Net increase (decrease) in cash and cash equivalents (159,689) 391,226
Cash and cash equivalents at beginning of period 2,445,112 1,450,276
------------- ------------
Cash and cash equivalents at end of period $ 2,285,423 $ 1,841,502
============= ============
</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,
--------------------------
1995 1994
----------- -----------
<S> <C> <C>
Reconciliation of net income to net cash
provided by operating activities:
Net income $22,979,634 $14,981,288
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation expense 15,557,846 16,464,413
Amortization expense 5,525,537 8,695,127
Deferred income taxes 5,400,000 4,300,000
Contribution of common stock to retirement plan 357,477 395,105
(Gain) loss on sale of assets (164,225) (1,459,669)
Share of (earnings) losses of affiliates 514,927 41,912
(Increase) decrease in other assets (1,312,400) (540,438)
(Increase) decrease in accounts receivable, subscribers (2,281,771) (95,721)
(Increase) decrease in accounts receivable, other (806,977) 223,382
Increase (decrease) in subscriber advance payments (345,747) 134,317
Increase (decrease) in accrued expenses 1,846,092 3,015,214
Increase (decrease) in income taxes payable (1,760,517) (1,100,600)
Increase (decrease) in accounts payable 2,126,793 (1,172,477)
----------- -----------
Net cash provided by operating activities $47,636,669 $43,881,853
=========== ===========
</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
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, 1995 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, 1995, 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 24,573,118 shares and 24,579,529 shares for 1995 and 1994,
respectively.
D. In May 1995, the Company through its subsidiaries acquired substantially
all of the assets used by Time Warner Entertainment Company, L.P. in the
operation of the cable television systems in and around the following cities
in Arkansas: Fayetteville, Elkins, Farmington, Greenland, Russellville,
Clarksville, Booneville, Pottsville, Paris, and the unincorporated areas within
the counties in which the foregoing cities are located. The cost of the
acquisition was approximately $66 million, all of which was paid in cash
obtained from the Company's bank lines of credit.
E. On July 1, 1995 the Company, through a subsidiary, acquired substantially
all of the assets used by Marcus Cable of San Angelo, L.P. in the operation of
the cable television systems in and around the following cities, counties, and
areas in Texas: San Angelo, Andrews, Ballinger, Miles, Winters, Goodfellow Air
Force Training Center, Andrews County, and Tom Green County. The cost of the
acquisition was approximately $66 million, all of which was paid in cash from
the Company's bank lines of credit.
F. In August 1995, the Company, through a subsidiary, also purchased the
assets related to the operation of the cable system serving the city of
El Dorado, Arkansas. The purchase price of approximately $19 million was
obtained from the Company's bank lines of credit.
G. Also in August 1995, the Company signed an agreement to acquire the assets
of cable systems from Star Cable Associates, then exchange them, along with
additional cash, with Time Warner Entertainment - Advance/Newhouse Partnership
for the Alexandria and Pineville, Louisiana cable system assets. The system
serves approximately 29,000 basic subscribers.
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,
1995 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 20%, 35% and 41%, respectively.
Approximately 44% of the revenue increase was from cable television system
acquisitions and 56% from internal growth. The Company's basic accounts
increased from 454,568 at July 31, 1994 to 526,142 at July 31, 1995 or
approximately 16%. Average revenue per account increased from $29.30 to
$31.50 or approximately 8%.
Operating expenses increased approximately 13% during the third quarter of
fiscal 1995 as compared to the third quarter of fiscal 1994. Approximately
83% of the operating expense increase was attributable to acquisitions. The
remainder of the increase in operating expenses arises from internal growth.
Interest expense increased by approximately $1.5 million or 63%. The increase
was attributable to approximately $132 million in borrowings to fund
acquisitions.
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
2.1. ASSET PURCHASE AGREEMENT dated August 28, 1995, between Telecable
Associates, Inc. and Star Cable Associates.
2.2. ASSET EXCHANGE AGREEMENT dated August 28, 1995, between Time
Warner Entertainment-Advance/Newhouse Partnership and Telecable
Associates, Inc.
10.1. Credit Agreement dated July 21, 1995 between TCA Cable TV, Inc.,
NationsBank of Texas, N.A., Texas Commerce Bank National Association
and Lenders.
10.2. Note Agreement dated June 23, 1995 between TCA Cable TV, Inc. and
The Prudential Insurance Company of America and the other parties hereto.
27. Financial Data Schedule
B. The following reports on Form 8-K have been filed during the
quarter for which this report is filed:
1. Report dated May 1, 1995, filed May 16, 1995, subsequent to the
Russellville acquisition.
2. Report dated May 9, 1995, filed May 24, 1995, subsequent to the
Fayetteville acquisition.
3. Report dated June 30, 1995, filed July 14, 1995, subsequent to the
San Angelo acquisition.
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 15, 1995 /s/ Robert M. Rogers
-----------------------------------
Robert M. Rogers, Chairman and
Chief Executive Officer
Date: September 15, 1995 /s/ Jimmie F. Taylor
-----------------------------------
Jimmie F. Taylor, Vice President,
CFO and Treasurer
10
<PAGE> 11
EXHIBIT INDEX
2.1. ASSET PURCHASE AGREEMENT dated August 28, 1995, between Telecable
Associates, Inc. and Star Cable Associates. (1)
2.2. ASSET EXCHANGE AGREEMENT dated August 28, 1995, between Time
Warner Entertainment-Advance/Newhouse Partnership and Telecable
Associates, Inc. (1)
10.1. Credit Agreement dated July 21, 1995 between TCA Cable TV, Inc.,
NationsBank of Texas, N.A., Texas Commerce Bank National Association
and Lenders. (1)
10.2. Note Agreement dated June 23, 1995 between TCA Cable TV, Inc. and
The Prudential Insurance Company of America and the other parties
hereto.(1)
27. Financial Data Schedule(1)
(1) Previously filed as an exhibit to the Company's current report on
Form 10-Q for the quarter ended July 31, 1995, filed with the
Commission September 14, 1995, and incorporated herein by reference.
