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 March 31, 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 6
Notes to Unaudited Consolidated Financial Statements 7
Management's Discussion and Analysis of Financial
Condition and Results of Operations 8
PART II. OTHER INFORMATION 9
NEW ULM TELECOM AND SUBSIDIARIES
UNAUDITED CONSOLIDATED BALANCE SHEETS
ASSETS
March 31, December 31,
1995 1994
CURRENT ASSETS:
Cash & Temporary Cash Investments $ 2,286,387 $ 1,433,772
Receivables, Net of Allowance for
Doubtful Accounts of $16,348 and $12,000 940,680 825,973
Inventories 400,695 402,036
Prepaid Expenses 56,641 76,481
Total Current Assets: 3,684,403 2,738,262
INVESTMENTS & OTHER ASSETS:
Excess of Cost Over Net Assets Acquired 3,986,893 4,015,337
Notes Receivable, Less Current Portion
of $16,659 and $16,827 20,304 17,831
Cellular Investments 1,946,928 1,943,534
Other 148,516 142,800
Total Investments and Other Assets 6,102,641 6,119,502
PROPERTY, PLANT & EQUIPMENT:
Telecommunications Plant 21,582,042 22,087,844
Other Property & Equipment 1,275,812 1,260,110
Cable Television Plant 235,271 235,271
Total 23,093,125 23,583,225
Less Accumulated Depreciation 11,258,832 11,474,927
Net Property, Plant & Equipment 11,834,293 12,108,298
TOTAL ASSETS $21,621,337 $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
March 31, December 31,
1995 1994
CURRENT LIABILITIES:
Current Portion of Long-Term Debt $ 366,666 $ 366,666
Accounts Payable 202,504 195,820
Accrued Income Taxes 340,777 (10,133)
Other Accrued Taxes 61,137 54,597
Other Accrued Liabilities 195,457 204,740
Total Current Liabilities 1,166,541 811,690
LONG-TERM DEBT, LESS CURRENT PORTION 4,675,000 4,766,667
DEFERRED CREDITS:
Income Taxes 1,384,819 1,384,819
Investment Tax Credits 122,115 133,352
Total Deferred Credits 1,506,934 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 11,385,437 10,982,109
Total Stockholders' Equity 14,272,862 13,869,534
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $21,621,337 $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 MARCH 31, 1995 AND 1994
1995 1994
OPERATING REVENUES:
Local Network $ 454,526 $ 416,088
Network Access 1,342,949 1,161,892
Billing and Collection 135,505 158,552
Miscellaneous 89,275 100,394
Nonregulated 281,276 312,545
Total Operating Revenue 2,303,531 2,149,471
OPERATING EXPENSES:
Plant Operations 283,545 240,956
Depreciation 393,433 378,061
Amortization 28,444 31,700
Customer 130,839 134,307
General and Administrative 270,895 258,465
Other Operating Expenses 190,901 209,039
Total Operating Expenses 1,298,057 1,252,528
OPERATING INCOME 1,005,474 896,943
OTHER EXPENSES (INCOME):
Interest Expense 82,597 115,827
Interest Income (34,364) (15,880)
Cellular Partnership (Income) Losses (128,304) (27,022)
Total Other Expenses, Net (80,071) 72,925
INCOME BEFORE INCOME TAXES 1,085,545 824,018
INCOME TAXES 439,673 329,934
NET INCOME $ 645,872 $ 494,084
NET INCOME PER SHARE - NOTE 2 $ 1.12 $ 0.86
The accompanying notes are an integral part of the financial statements.
NEW ULM TELECOM AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED MARCH 31, 1995 AND 1994
1995 1994
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ 645,872 $ 494,084
Adjustments to Reconcile Net Income to Net
Net Cash Provided by Operating Activities:
Depreciation and Amortization 421,877 409,761
Cellular Partnerships
(Income) Losses (128,304) (27,022)
(Increase) Decrease in:
Receivables (114,875) (151,247)
Inventories 1,341 (223,935)
Prepaid Expenses 19,840 8,734
Increase (Decrease) in:
Accounts Payable 6,684 127,345
Accrued Income Taxes 350,910 311,096
Other Accrued Taxes 6,540 8,516
Other Accrued Liabilities (9,283) 20,265
Deferred Investment Tax Credits (11,237) (13,579)
Net Cash Provided by
Operating Activities 1,189,365 964,018
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to Property, Plant &
Equipment, Net (119,428) (61,011)
Change in Notes Receivable (2,305) (601)
Cellular Investments 124,910 -
Other, Net (5,716) (1,131)
Net Cash Used in
Investing Activities (2,539) (62,743)
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal Payments of Long-Term Debt (91,667) (257,501)
Dividends Paid (242,544) (230,994)
Net Cash Used in
Financing Activities (334,211) (488,495)
NET INCREASE (DECREASE) IN CASH AND TEMPORARY
CASH INVESTMENTS 852,615 412,780
CASH AND TEMPORARY CASH INVESTMENTS
AT BEGINNING OF PERIOD 1,433,772 1,517,469
CASH AND TEMPORARY CASH INVESTMENTS
AT END OF PERIOD $ 2,286,387 $ 1,930,249
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 March 31, 1995 and December 31, 1994
and the results of operations and changes in cash flows for the three months and
three months ended March 31, 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 March 31, 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 $ 83,090 $73,488
Income Taxes 100,000 32,417
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 1995 COMPARED TO
THE THREE MONTHS ENDED MARCH 31, 1994
The increase in total operating revenues was $154,060 or 7.2%. The increase in
operating revenues was the result of increased local network 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 $45,529 or 3.6%. operating income
increased by $108,531 or 12.1%. Interest expense decreased by $33,230 due to a
decrease in long-term debt outstanding. Interest income increased by $18,484 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
$101,282 or 374.81% as the cellular partnerships continue to show strong
performances.
Net income increased by $151,788 or 30.7%.
LIQUIDITY AND CAPITAL RESOURCES
The Company had an increase in cash and temporary cash investments of $852,615
for the quarter resulting in a balance of $2,286,387 as of March 31, 1995.
The Company is budgeting approximately $1,800,000 for 1995 plant additions. The
Company intends to use internal funds for all of 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
Exhibit 27 - Financial Data Schedule (For SEC use only)
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 /s/ JAMES P. JENSEN
JAMES P. JENSEN, PRESIDENT
Dated: By /s/ BILL OTIS
BILL OTIS, EXECUTIVE VICE PRESIDENT
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