<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: January 31, 1996
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 15, 1996 was:
24,582,626 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, 1996 and October 31, 1995 3
Consolidated Statements of Operations -
Three months ended January 31, 1996 and 1995 4
Consolidated Statement of Shareholders' Equity -
Three months ended January 31, 1996 5
Consolidated Statements of Cash Flows -
Three months ended January 31, 1996 and 1995 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
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TCA CABLE TV, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
January 31, October 31,
ASSETS 1996 1995
-------------- --------------
(Unaudited)
<S> <C> <C>
Cash $ 2,403,044 $ 1,260,274
-------------- --------------
Accounts receivable, subscribers 7,177,293 7,973,959
-------------- --------------
Accounts receivable, other 1,140,460 879,268
-------------- --------------
Income tax receivable 0 932,306
-------------- --------------
Notes receivable, affiliates 3,000,000 2,500,000
-------------- --------------
Investments 1,638,301 1,680,163
-------------- --------------
Property, plant and equipment, at cost:
Land 2,939,416 2,888,678
Distribution systems 310,234,526 293,134,397
Transportation equipment 8,457,433 7,800,092
Other 27,765,167 26,668,443
-------------- --------------
349,396,542 330,491,610
Less accumulated depreciation (184,769,784) (178,722,319)
-------------- --------------
164,626,758 151,769,291
-------------- --------------
Other assets:
Intangibles, net of accumulated
amortization of $74,817,407 and
$72,601,115, respectively 336,127,911 285,521,922
Prepaid expenses 2,234,532 1,571,753
-------------- --------------
338,362,443 287,093,675
-------------- --------------
$ 518,348,299 $ 454,088,936
============== ==============
<CAPTION>
January 31, October 31,
LIABILITIES 1996 1995
-------------- --------------
(Unaudited)
<S> <C> <C>
Accounts payable $ 9,845,791 $ 6,496,407
Accrued expenses 13,015,466 15,195,324
Subscriber advance payments 3,509,677 3,856,362
Income taxes payable 2,121,361 ----
Deferred income taxes 50,580,000 48,180,000
Term debt 315,950,955 262,213,055
-------------- --------------
395,023,250 335,941,148
-------------- --------------
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; 24,787,837 and
24,782,121 shares issued, respectively 2,478,784 2,478,212
Additional paid-in capital 43,841,012 43,704,988
Retained earnings 80,809,007 75,768,342
-------------- --------------
127,128,803 121,951,542
Less treasury stock at cost,
209,828 shares (3,803,754) (3,803,754)
-------------- --------------
123,325,049 118,147,788
-------------- --------------
$ 518,348,299 $ 454,088,936
============== ==============
</TABLE>
The accompanying notes are an integral part
of the consolidated financial statements.
3
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TCA CABLE TV, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended
January 31,
------------------------------
1996 1995
------------ ------------
<S> <C> <C>
CATV revenues $ 55,000,233 $ 43,304,289
------------ ------------
Operating expenses:
Salaries, wages and benefits 9,194,144 7,555,713
Programming costs 12,774,532 9,879,460
Other operating expenses 1,812,912 1,483,699
Selling, general and administrative 3,591,005 2,574,905
Depreciation and amortization 8,263,757 6,326,594
------------ ------------
35,636,350 27,820,371
------------ ------------
Operating income 19,363,883 15,483,918
Other income 92,532 72,804
Interest expense (5,368,040) (2,469,558)
------------ ------------
Income before income taxes 14,088,375 13,087,164
------------ ------------
Provision for income taxes:
Current 3,200,000 3,900,000
Deferred 2,400,000 1,450,000
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5,600,000 5,350,000
------------ ------------
Net income 8,488,375 7,737,164
============ ============
Earnings per common share $ 0.34 $ 0.31
============ ============
</TABLE>
The accompanying notes are an integral part
of the consolidated financial statements.
4
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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, 1995 24,782,121 $2,478,212 $43,704,988 $ 75,768,342 $ (3,803,754)
Net income for the three months
ended January 31, 1996 8,488,375
Issuance of common stock 3,416 342 96,829
Stock options exercised 2,300 230 39,196
Cash dividends at $.14 a share (3,447,711)
---------- ---------- ----------- ------------ ------------
Balance, January 31, 1996 24,787,837 $2,478,784 $43,841,012 $ 80,809,007 $ (3,803,754)
========== ========== =========== ============ ============
</TABLE>
The accompanying notes are an integral
part of the consolidated financial statements.
5
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TCA CABLE TV, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended
January 31,
--------------------------------
1996 1995
------------- -------------
<S> <C> <C>
Cash flows from operating activities:
Cash received from customers $ 55,189,022 $ 43,267,943
Cash paid to suppliers and employees (27,125,957) (21,348,382)
Other revenue received 134,394 208,539
Interest paid (5,010,758) (2,405,002)
Income taxes paid (146,333) (274,863)
------------- -------------
Net cash provided by operating activities 23,040,368 19,448,235
------------- -------------
Cash flows from investing activities:
Cash paid for acquisitions (60,759,941)
Capital expenditures (10,967,272) (7,007,307)
Loan to affiliate (500,000)
------------- -------------
Net cash used in investing activities (72,227,213) (7,007,307)
------------- -------------
Cash flows from financing activities:
Borrowings of term debt 73,500,000 8,100,000
Repayments of term debt (19,762,099) (17,601,605)
Proceeds from stock options exercised 39,425 12,651
Dividends paid (3,447,711) (2,949,310)
------------- -------------
Net cash provided by (used in) financing activities 50,329,615 (12,438,264)
------------- -------------
Net increase (decrease) in cash 1,142,770 2,664
Cash at beginning of period 1,260,274 2,445,112
------------- -------------
Cash at end of period $ 2,403,044 $ 2,447,776
============= =============
</TABLE>
The accompanying notes are an integral
part of the consolidated financial statements.
6
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TCA CABLE TV, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS, Continued
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended
January 31,
--------------------------------
1996 1995
------------- -------------
<S> <C> <C>
Reconciliation of net income to net cash
provided by operating activities:
Net income $ 8,488,375 $ 7,737,164
Adjustments to reconcile net income
to net cash provided by operating
activities:
Cumulative effect of change in accounting principle
Depreciation expense 6,047,465 4,813,812
Amortization expense 2,216,292 1,512,782
Share of losses of affiliates 41,862 135,735
Deferred income taxes 2,400,000 1,450,000
Contribution of common stock to retirement plan 97,171 134,671
(Increase) decrease in other assets (662,779) (867,557)
(Increase) decrease in accounts receivable, subscribers 796,666 (410,921)
(Increase) decrease in accounts receivable, other (261,192) 19,682
Decrease in income tax receivable 932,306
Increase (decrease) in subscriber advance payments (346,685) 354,893
Increase (decrease) in accrued expenses (2,179,858) (1,763,998)
Increase in income taxes payable 2,121,361 3,625,137
Increase in accounts payable 3,349,384 3,806,835
Accrued treasury stock purchase (1,100,000)
------------- -------------
Net cash provided by operating activities $ 23,040,368 $ 19,448,235
============= =============
</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 January 31, 1996 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, 1996, 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 24,613,254 shares and 24,588,610
shares for 1996 and 1995, respectively.
8
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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,
1996, 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 27%, 25% and 10%, respectively.
Approximately 32% of the revenue increase was attributable to internal growth
and 68% from acquisitions. The Company's basic accounts increased from 468,662
at January 31, 1995 to 574,473 at January 31, 1996, or approximately 23%.
Approximately 100,000 basic accounts, or 95%, of the increase was the result of
acquisitions. Average revenue per account increased from $30.93 to $32.75 or
approximately 6%.
Operating expenses increased approximately 28% during the first quarter of
fiscal 1996 as compared to the first quarter of fiscal 1995. Salaries, wages
and benefits increased 22%. Programming costs and other operating expenses
increased 29% and 22%, respectively. Selling, general and administrative
expenses increased 39%. Depreciation and amortization increased 31%.
Interest expense increased by $2.9 million or approximately 117% as a result of
borrowings made to finance the Company's acquisition of cable television
properties. The Company's weighted average interest rate was 7.09% and 8.03%
at January 31, 1996 and 1995, respectively.
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) The following report on Form 8-K has been filed during the
quarter for which this report is filed.
1. Report dated December 15, 1995, filed December 27, 1995,
subsequent to the Alexandria acquisition.
(c) Exhibit 27 - Financial Data Schedule
9
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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 15, 1996 /s/ Robert M. Rogers
-----------------------------------
Robert M. Rogers, Chairman and
Chief Executive Officer
Date: March 15, 1996 /s/ Jimmie F. Taylor
-----------------------------------
Jimmie F. Taylor, Vice President,
CFO and Treasurer
10
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INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<S> <C>
27 - Financial Data Schedule
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> OCT-31-1996
<PERIOD-START> NOV-01-1995
<PERIOD-END> JAN-31-1996
<CASH> 2,403,044
<SECURITIES> 0
<RECEIVABLES> 7,177,293
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 349,396,542
<DEPRECIATION> 184,769,784
<TOTAL-ASSETS> 518,348,299
<CURRENT-LIABILITIES> 0
<BONDS> 315,950,955
<COMMON> 2,478,784
0
0
<OTHER-SE> 120,846,265
<TOTAL-LIABILITY-AND-EQUITY> 518,348,299
<SALES> 0
<TOTAL-REVENUES> 55,000,233
<CGS> 0
<TOTAL-COSTS> 12,774,532
<OTHER-EXPENSES> 22,861,818
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 5,368,040
<INCOME-PRETAX> 14,088,375
<INCOME-TAX> 5,600,000
<INCOME-CONTINUING> 8,488,375
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 8,488,375
<EPS-PRIMARY> 0.34
<EPS-DILUTED> 0.34
</TABLE>
