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 September 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 (IRS Employer
jurisdiction 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
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<CAPTION>
NEW ULM TELECOM AND SUBSIDIARIES
UNAUDITED CONSOLIDATED BALANCE SHEETS
ASSETS
SEPTEMBER 30, DECEMBER 31,
1995 1994
<S> <C> <C>
CURRENT ASSETS:
Cash & Temporary Cash Investments $ 1,856,230 $ 1,433,772
Receivables, Net of Allowance for
Doubtful Accounts of $31,551 and $12,000 928,712 825,973
Inventories 466,899 402,036
Prepaid Expenses 29,788 76,481
Total Current Assets: 3,281,629 2,738,262
INVESTMENTS & OTHER ASSETS:
Excess of Cost Over Net Assets Acquired 3,930,004 4,015,337
Notes Receivable, Less Current Portion
of $13,279 and $16,827 18,130 17,831
Cellular Investments 2,028,269 1,943,534
Other 180,683 142,800
Total Investments and Other Assets 6,157,086 6,119,502
PROPERTY, PLANT & EQUIPMENT:
Telecommunications Plant 22,725,843 22,087,844
Other Property & Equipment 1,280,107 1,260,110
Cable Television Plant 235,271 235,271
Total 24,241,221 23,583,225
Less Accumulated Depreciation 12,016,399 11,474,927
Net Property, Plant & Equipment 12,224,822 12,108,298
TOTAL ASSETS $ 21,663,537 $ 20,966,062
</TABLE>
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
SEPTEMBER 30, DECEMBER 31,
1995 1994
CURRENT LIABILITIES:
Current Portion of Long-Term Debt $ 366,666 $ 366,666
Accounts Payable 168,684 195,820
Accrued Income Taxes 55,249 (10,133)
Other Accrued Taxes 39,917 54,597
Other Accrued Liabilities 220,264 204,740
Total Current Liabilities 850,780 811,690
LONG-TERM DEBT, LESS CURRENT PORTION 4,491,666 4,766,667
DEFERRED CREDITS:
Income Taxes 1,384,819 1,384,819
Investment Tax Credits 99,641 133,352
Total Deferred Credits 1,484,460 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 11,949,206 10,982,109
Total Stockholders' Equity 14,836,631 13,869,534
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 21,663,537 $ 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 SEPTEMBER 30, 1995 AND 1994
1995 1994
OPERATING REVENUES:
Local Network $ 471,486 $ 422,483
Network Access 1,071,915 1,236,090
Billing and Collection 158,163 160,977
Miscellaneous 103,131 98,423
Nonregulated 393,947 257,558
Total Operating Revenue 2,198,642 2,175,531
OPERATING EXPENSES:
Plant Operations 273,434 222,585
Depreciation 393,433 378,061
Amortization 28,444 31,701
Customer 127,351 128,840
General and Administrative 276,805 217,497
Other Operating Expenses 216,501 167,415
Total Operating Expenses 1,315,968 1,146,099
OPERATING INCOME 882,674 1,029,432
OTHER EXPENSES (INCOME):
Interest Expense 79,498 89,179
Interest Income (35,966) (14,511)
Cellular Partnership (Income) Losses (115,998) (141,922)
Total Other Expenses, Net (72,466) (67,254)
INCOME BEFORE INCOME TAXES 955,140 1,096,686
INCOME TAXES 387,501 470,186
NET INCOME $ 567,639 $ 626,500
NET INCOME PER SHARE - NOTE 2 $ 0.98 $ 1.08
The accompanying notes are an integral part of the financial statements.
NEW ULM TELECOM AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1995 AND 1994
1995 1994
OPERATING REVENUES:
Local Network $ 1,391,715 $ 1,254,712
Network Access 3,582,003 3,503,080
Billing and Collection 442,714 488,267
Miscellaneous 279,503 300,625
Nonregulated 977,770 831,050
Total Operating Revenue 6,673,705 6,377,734
OPERATING EXPENSES:
Plant Operations 843,245 733,404
Depreciation 1,180,299 1,134,183
Amortization 85,332 95,103
Customer 397,762 402,072
General and Administrative 835,152 737,779
Other Operating Expenses 627,882 542,043
Total Operating Expenses 3,969,672 3,644,584
OPERATING INCOME 2,704,033 2,733,150
OTHER EXPENSES (INCOME):
Interest Expense 243,576 325,387
Interest Income (104,720) (42,837)
Cellular Partnership (Income) Losses (311,547) (203,744)
Total Other Expenses, Net (172,691) 78,806
INCOME BEFORE INCOME TAXES 2,876,724 2,654,344
INCOME TAXES 1,164,672 1,096,620
NET INCOME $ 1,712,052 $ 1,557,724
NET INCOME PER SHARE - NOTE 2 $ 2.96 $ 2.70
The accompanying notes are an integral part of the financial statements.
NEW ULM TELECOM AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
NINE MONTHS ENDED SEPTEMBER 30, 1995 AND 1994
1995 1994
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ 1,712,052 $ 1,557,724
Adjustments to Reconcile Net
Income to Net Net Cash Provided by
Operating Activities:
Depreciation and Amortization 1,265,631 1,229,286
Cellular Partnerships
(Income) Losses (311,547) (203,744)
(Increase) Decrease in:
Receivables (106,286) 224,161
Inventories (64,863) (133,023)
Prepaid Expenses 46,693 35,569
Increase (Decrease) in:
Accounts Payable (27,136) (339,985)
Accrued Income Taxes 65,382 293,169
Other Accrued Taxes (14,680) (12,762)
Other Accrued Liabilities 15,524 19,667
Deferred Investment Tax Credits (33,711) (40,736)
Net Cash Provided by
Operating Activities 2,547,059 2,629,326
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to Property, Plant &
Equipment, Net (1,296,823) (744,981)
Change in Notes Receivable 3,249 9,177
Cellular Investments 226,812 21,565
Other, Net (37,883) (41,064)
Net Cash Used in
Investing Activities (1,104,645) (755,303)
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal Payments of Long-Term Debt (275,001) (1,040,833)
Dividends Paid (744,955) (692,982)
Net Cash Used in
Financing Activities (1,019,956) (1,733,815)
NET INCREASE (DECREASE) IN CASH AND TEMPORARY
CASH INVESTMENTS 422,458 140,208
CASH AND TEMPORARY CASH INVESTMENTS
AT BEGINNING OF PERIOD 1,433,772 1,517,469
CASH AND TEMPORARY CASH INVESTMENTS
AT END OF PERIOD $ 1,856,230 $ 1,657,677
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 September 30, 1995 and December 31,
1994 and the results of operations and changes in cash flows for the three
months and nine months ended September 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 September 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 $ 245,054 $320,534
Income Taxes 1,133,000 549,417
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
NINE MONTHS ENDED SEPTEMBER 30, 1995 COMPARED TO
THE NINE MONTHS ENDED SEPTEMBER 30,1994
The increase in total operating revenues was $295,971 or 4.6%. 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 $325,088 or 8.9%. the increase in
operating expenses was due mainly to an increase in expenses for training
Centrex and Equal Access and costs associated with long-term planning. Operating
income decreased by $29,117 or 1.1%. Interest income increased by $61,883 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
$107,803 or 52.9% as the cellular partnerships continue to show strong
performances.
Net income increased by $154,328 or 9.9%.
LIQUIDITY AND CAPITAL RESOURCES
The Company had an increase in cash and temporary cash investments of $422,458
for the quarter resulting in a balance of $1,856,230 as of September 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 September 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
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, 1994.
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: August 8, 1994 By: /s/ James P. Jensen
JAMES P. JENSEN, PRESIDENT
Dated: August 8, 1994 By: /s/ Lavern Biebl
LAVERN BIEBL, TREASURER
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