UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1995
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15 (d) OF THE EXCHANGE ACT
For the transition period from _______ to _______.
Commission File Number 0-3024
New Ulm Telecom, Inc.
(Exact name of small business issuer as specified in its charter)
Minnesota 41-0440990
(State or other jurisdiction (IRS Employer
of incorporation) Identification Number)
400 2nd Street North, New Ulm, MN 56073-0697
(Address of Principal executive offices)
507-354-4111
(Issuer's telephone number)
Check whether the issue (1) Filed all reports required to be filed by Section 13
or 15(d) of the Exchange Act during the past 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 ___
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: 577,485.
NEW ULM TELECOM, INC.
CONTENTS
Page
PART I. FINANCIAL INFORMATION
Unaudited Consolidated Balance Sheets 3 - 4
Unaudited Consolidated Statements of Income 5 - 6
Unaudited Consolidated Statements of Cash Flows 7
Notes to Unaudited Consolidated Financial Statements 8
Management's Discussion and Analysis of Financial
Condition and Results of Operations 9
PART II. OTHER INFORMATION 10
NEW ULM TELECOM AND SUBSIDIARIES
UNAUDITED CONSOLIDATED BALANCE SHEETS
ASSETS
June 30, December 31,
1995 1994
CURRENT ASSETS:
Cash & Temporary Cash Investments $ 2,184,905 $ 1,433,772
Receivables, Net of Allowance for
Doubtful Accounts of $24,906 and $12,000 779,803 825,973
Inventories 456,685 402,036
Prepaid Expenses 48,137 76,481
Total Current Assets: 3,469,530 2,738,262
INVESTMENTS & OTHER ASSETS:
Excess of Cost Over Net Assets Acquired 3,958,449 4,015,337
Notes Receivable, Less Current Portion
of $14,251 and $16,827 18,019 17,831
Cellular Investments 1,999,411 1,943,534
Other 179,392 142,800
Total Investments and Other Assets 6,155,271 6,119,502
PROPERTY, PLANT & EQUIPMENT:
Telecommunications Plant 22,024,235 22,087,844
Other Property & Equipment 1,277,115 1,260,110
Cable Television Plant 235,271 235,271
Total 23,536,621 23,583,225
Less Accumulated Depreciation 11,644,929 11,474,927
Net Property, Plant & Equipment 11,891,692 12,108,298
TOTAL ASSETS $21,516,493 $20,966,062
The accompanying notes are an integral part of the Financial Statements.
NEW ULM TELECOM AND SUBSIDIARIES
UNAUDITED CONSOLIDATED BALANCE SHEETS
LIABILITIES AND STOCKHOLDER'S EQUITY
June 30, December 31,
1995 1994
CURRENT LIABILITIES:
Current Portion of Long-Term Debt $ 366,666 $ 366,666
Accounts Payable 415,457 195,820
Accrued Income Taxes (113,489) (10,133)
Other Accrued Taxes 56,828 54,597
Other Accrued Liabilities 183,139 204,740
Total Current Liabilities 908,601 811,690
LONG-TERM DEBT, Less Current Portion 4,583,334 4,766,667
DEFERRED CREDITS:
Income Taxes 1,384,819 1,384,819
Investment Tax Credits 110,879 133,352
Total Deferred Credits 1,495,698 1,518,171
STOCKHOLDERS' EQUITY:
Common Stock - $5 Par Value, 640,000 Shares
Authorized, 577,485 Shares Issued and
Outstanding 2,887,425 2,887,425
Retained Earnings 11,641,435 10,982,109
Total Stockholders' Equity 14,528,860 13,869,534
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 21,516,493 $ 20,966,062
The accompanying notes are an integral part of the Financial Statements.
NEW ULM TELECOM AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE MONTHS ENDED JUNE 30, 1995 AND 1994
1995 1994
OPERATING REVENUES:
Local Network $ 465,703 $ 416,141
Network Access 1,167,139 1,105,098
Billing and Collection 149,046 168,738
Miscellaneous 87,097 101,808
Nonregulated 302,547 260,944
Total Operating Revenue 2,171,532 2,052,729
OPERATING EXPENSES:
Plant Operations 286,266 269,863
Depreciation 393,433 378,061
Amortization 28,444 31,702
Customer 139,572 138,925
General and Administrative 287,452 261,817
Other Operating Expenses 220,480 165,586
Total Operating Expenses 1,355,647 1,245,954
OPERATING INCOME 815,885 806,775
OTHER EXPENSES (INCOME):
Interest Expense 81,481 120,381
Interest Income (34,390) (12,446)
Cellular Partnership (Income) Losses (67,245) (34,800)
Total Other Expenses, Net (20,154) 73,135
INCOME BEFORE INCOME TAXES 836,039 733,640
INCOME TAXES 337,498 296,500
NET INCOME $ 498,541 $ 437,140
NET INCOME PER SHARE - NOTE 2 $ 0.86 $ 0.76
The accompanying notes are an integral part of the financial statements.
NEW ULM TELECOM AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
FOR THE SIX MONTHS ENDED JUNE 30, 1995 AND 1994
1995 1994
OPERATING REVENUES:
Local Network $ 920,229 $ 832,229
Network Access 2,510,088 2,266,990
Billing and Collection 284,551 327,290
Miscellaneous 176,372 202,202
Nonregulated 583,823 573,489
Total Operating Revenue 4,475,063 4,202,200
OPERATING EXPENSES:
Plant Operations 569,811 510,819
Depreciation 786,866 756,122
Amortization 56,888 63,402
Customer 270,411 273,232
General and Administrative 558,347 520,282
Other Operating Expenses 411,381 374,625
Total Operating Expenses 2,653,704 2,498,482
OPERATING INCOME 1,821,359 1,703,718
OTHER EXPENSES (INCOME):
Interest Expense 164,078 236,208
Interest Income (68,754) (28,326)
Cellular Partnership (Income) Losses (195,549) (61,822)
Total Other Expenses, Net (100,225) 146,060
INCOME BEFORE INCOME TAXES 1,921,584 1,557,658
INCOME TAXES 777,171 626,434
NET INCOME $ 1,144,413 $ 931,224
NET INCOME PER SHARE - NOTE 2 $ 1.98 $ 1.61
The accompanying notes are an integral part of the financial statements.
NEW ULM TELECOM AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
SIX MONTHS ENDED JUNE 30, 1995 AND 1994
<TABLE>
<CAPTION>
1995 1994
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ 1,144,413 $ 494,084
Adjustments to Reconcile Net Income to Net
Net Cash Provided by Operating Activities:
Depreciation and Amortization 843,754 409,761
Cellular Partnerships (Income) Losses (195,549) (27,022)
(Increase) Decrease in:
Receivables 43,594 (151,247)
Inventories (54,649) (223,935)
Prepaid Expenses 28,344 8,734
Increase (Decrease) in:
Accounts Payable 219,637 127,345
Accrued Income Taxes (103,356) 311,096
Other Accrued Taxes 2,231 8,516
Other Accrued Liabilities (21,601) 20,265
Deferred Investment Tax Credits (22,473) (13,579)
Net Cash Provided by Operating Activities 1,884,345 964,018
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to Property, Plant & Equipment, Net (570,260) (61,011)
Change in Notes Receivable 2,388 (601)
Cellular Investments 139,672 --
Other, Net (36,592) (1,131)
Net Cash Used in Investing Activities (464,792) (62,743)
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal Payments of Long-Term Debt (183,333) (257,501)
Dividends Paid (485,087) (230,994)
Net Cash Used in Financing Activities (668,420) (488,495)
NET INCREASE (DECREASE) IN CASH AND TEMPORARY
CASH INVESTMENTS 751,133 412,780
CASH AND TEMPORARY CASH INVESTMENTS
AT BEGINNING OF PERIOD 1,433,772 1,517,469
CASH AND TEMPORARY CASH INVESTMENTS
AT END OF PERIOD $ 2,184,905 $ 1,930,249
</TABLE>
The accompanying notes are an integral part of the financial statements.
NEW ULM TELECOM, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED FINANCIAL STATEMENTS
NOTE 1 - CONSOLIDATED FINANCIAL STATEMENTS
In the opinion of management, the accompanying unaudited financial statements
contain all adjustments (consisting of only normal recurring items) necessary to
present fairly the financial position as of June 30, 1995 and December 31, 1994
and the results of operations and changes in cash flows for the three months and
six months ended June 30, 1995 and 1994.
Certain information and footnote disclosures normally included in annual
financial statements prepared in accordance with generally accepted accounting
principles have been omitted. It is suggested that these financial statements be
read in conjunction with the financial statements and notes thereto included in
the Company's December 31, 1994 Annual Report to Shareholders. The results of
operations for the period ending June 30, 1995 are not necessarily indicative of
the operating results of the entire year.
NOTE 2 - NET INCOME PER COMMON STOCK
Net income per common share for 1995 and 1994 was computed by dividing the
weighted average number of shares of common stock outstanding into the net
income.
NOTE 3 - STATEMENTS OF CASH FLOW
Supplemental Disclosures of Cash Flow Information:
Cash paid during the period for: 1995 1994
Interest $165,063 $230,414
Income Taxes 903,000 384,417
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 1995 COMPARED TO
THE SIX MONTHS ENDED JUNE 30,1994
The increase in total operating revenues was $272,863 or 6.5%. The increase in
operating revenues was the result of increased local network revenues and
network access revenues. Local access revenues increased due to a larger
customer base. Network access revenues increased due to higher volumes of usage
and increased interstate settlements.
Total operating expenses increased by $155,222 or 6.2%. Operating income
increased by $117,641 or 6.9%. Interest expense decreased by $72,130 due to a
decrease in long-term debt outstanding. Interest income increased by $40,428 as
a result of higher interest rates in 1995 as compared to 1994 and an increase in
funds available for investment. Cellular partnership income increased by
$133,727 or 216.3% as the cellular partnerships continue to show strong
performances.
Net income increased by $213,189 or 22.9%.
LIQUIDITY AND CAPITAL RESOURCES
The Company had an increase in cash and temporary cash investments of $751,133
for the quarter resulting in a balance of $2,184,905 as of June 30, 1995.
The Company is budgeting approximately $1,800,000 for 1995 plant additions. The
Company intends to use internal funds for all the 1995 expenditures. Management
believes the Company will be able to generate sufficient cash internally from
operations to meet its operating needs and sustain its historical dividend
levels.
The Minnesota Department of Public Service has been reviewing rate of return
levels for all independent telephone companies operating in Minnesota. The
Company's wholly owned subsidiary, Western Telephone Company, reduced rates in
1992 as a result of return investigation. Management cannot predict if any
future review process will have a significant impact on operating results.
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
There were no reports on Form 8-K for the Quarter ended June 30, 1995.
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant has
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
NEW ULM TELECOM, INC.
(Registrant)
Dated: By ______________________________
JAMES P. JENSEN, PRESIDENT
Dated: By ______________________________
BILL OTIS, EXECUTIVE VICE PRESIDENT
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<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> JUN-30-1995
<CASH> 2,184,905
<SECURITIES> 0
<RECEIVABLES> 804,709
<ALLOWANCES> 24,906
<INVENTORY> 456,685
<CURRENT-ASSETS> 3,469,530
<PP&E> 23,536,621
<DEPRECIATION> 11,644,929
<TOTAL-ASSETS> 21,516,493
<CURRENT-LIABILITIES> 908,601
<BONDS> 4,583,334
<COMMON> 2,887,425
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0
<OTHER-SE> 11,641,435
<TOTAL-LIABILITY-AND-EQUITY> 21,516,493
<SALES> 0
<TOTAL-REVENUES> 2,171,532
<CGS> 0
<TOTAL-COSTS> 1,355,647
<OTHER-EXPENSES> (101,635)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 81,481
<INCOME-PRETAX> 836,039
<INCOME-TAX> 337,498
<INCOME-CONTINUING> 498,541
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 498,541
<EPS-PRIMARY> 0.86
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