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, 1996
[ ] 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
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,
1996 1995
----------- -----------
CURRENT ASSETS:
Cash & Temporary Cash Investments $ 2,450,040 $ 1,829,215
Receivables, Net of Allowance for
Doubtful Accounts of $17,994 and $17,500 1,035,352 1,150,731
Inventories 367,075 370,462
Prepaid Expenses 63,353 91,589
----------- -----------
Total Current Assets: 3,915,820 3,441,997
----------- -----------
INVESTMENTS & OTHER ASSETS:
Excess of Cost Over Net Assets Acquired 3,873,118 3,901,561
Notes Receivable, Less Current Portion
of $10,261 and $11,512 13,461 15,734
Cellular Investments 2,148,016 2,089,167
Other 205,181 166,314
----------- -----------
Total Investments and Other Assets 6,239,776 6,172,776
----------- -----------
PROPERTY, PLANT & EQUIPMENT:
Telecommunications Plant 23,567,412 23,248,747
Other Property & Equipment 1,278,407 1,276,946
Cable Television Plant 235,271 235,271
----------- -----------
Total 25,081,090 24,760,964
Less Accumulated Depreciation 12,796,385 12,390,334
----------- -----------
Net Property, Plant & Equipment 12,284,705 12,370,630
----------- -----------
TOTAL ASSETS $22,440,301 $21,985,403
=========== ===========
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,
1996 1995
------------ ------------
CURRENT LIABILITIES:
Current Portion of Long-Term Debt $ 366,666 $ 366,666
Accounts Payable 190,010 260,351
Accrued Income Taxes 280,495 (36,052)
Other Accrued Taxes 66,049 57,372
Other Accrued Liabilities 253,249 265,143
------------ ------------
Total Current Liabilities 1,156,469 913,480
------------ ------------
LONG-TERM DEBT, LESS CURRENT PORTION 4,308,334 4,400,000
------------ ------------
DEFERRED CREDITS:
Income Taxes 1,469,790 1,469,790
Investment Tax Credits 79,787 88,405
------------ ------------
Total Deferred Credits 1,549,577 1,558,195
------------ ------------
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 12,538,496 12,226,303
------------ ------------
Total Stockholders' Equity 15,425,921 15,113,728
------------ ------------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 22,440,301 $ 21,985,403
============ ============
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, 1996 AND 1995
1996 1995
----------- -----------
OPERATING REVENUES:
Local Network $ 499,613 $ 454,526
Network Access 1,180,992 1,342,949
Billing and Collection 144,798 135,505
Miscellaneous 76,582 89,275
Nonregulated 312,996 281,276
----------- -----------
Total Operating Revenue 2,214,981 2,303,531
----------- -----------
OPERATING EXPENSES:
Plant Operations 251,503 283,545
Depreciation 407,984 393,433
Amortization 28,444 28,444
Customer 131,192 130,839
General and Administrative 275,207 270,895
Other Operating Expenses 209,067 190,901
----------- -----------
Total Operating Expenses 1,303,397 1,298,057
----------- -----------
OPERATING INCOME 911,584 1,005,474
----------- -----------
OTHER EXPENSES (INCOME):
Interest Expense 76,568 82,597
Interest Income (38,924) (34,364)
Cellular Partnership (Income) Losses (101,824) (128,304)
----------- -----------
Total Other Expenses, Net (64,180) (80,071)
----------- -----------
INCOME BEFORE INCOME TAXES 975,764 1,085,545
----------- -----------
INCOME TAXES 397,928 439,673
----------- -----------
NET INCOME $ 577,836 $ 645,872
=========== ===========
NET INCOME PER SHARE - NOTE 2 $ 1.00 $ 1.12
=========== ===========
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, 1996 AND 1995
<TABLE>
<CAPTION>
1996 1995
----------- -----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ 577,836 $ 645,872
Adjustments to Reconcile Net Income to Net
Net Cash Provided by Operating Activities:
Depreciation and Amortization 436,428 421,877
Cellular Partnerships (Income) Losses (101,824) (128,304)
(Increase) Decrease in:
Receivables 114,128 (114,875)
Inventories 3,387 1,341
Prepaid Expenses 28,236 19,840
Increase (Decrease) in:
Accounts Payable (70,341) 6,684
Accrued Income Taxes 316,547 350,910
Other Accrued Taxes 8,677 6,540
Other Accrued Liabilities (11,894) (9,283)
Deferred Investment Tax Credits (8,618) (11,237)
----------- -----------
Net Cash Provided by Operating Activities 1,292,562 1,189,365
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to Property, Plant & Equipment, Net (322,059) (119,428)
Change in Notes Receivable 3,524 (2,305)
Cellular Investments 42,975 124,910
Other, Net (38,867) (5,716)
----------- -----------
Net Cash Used in Investing Activities (314,427) (2,539)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal Payments of Long-Term Debt (91,667) (91,667)
Dividends Paid (265,643) (242,544)
----------- -----------
Net Cash Used in Financing Activities (357,310) (334,211)
----------- -----------
NET INCREASE (DECREASE) IN CASH AND TEMPORARY
CASH INVESTMENTS 620,825 852,615
----------- -----------
CASH AND TEMPORARY CASH INVESTMENTS
AT BEGINNING OF PERIOD 1,829,215 1,433,772
----------- -----------
CASH AND TEMPORARY CASH INVESTMENTS
AT END OF PERIOD $ 2,450,040 $ 2,286,387
=========== ===========
</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 March 31, 1996 and December 31, 1995
and the results of operations and changes in cash flows for the three months and
three months ended March 31, 1996 and 1995.
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, 1995 Annual Report to Shareholders. The results of
operations for the period ending March 31, 1996 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 1996 and 1995 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: 1996 1995
-------- --------
Interest $ 77,062 $ 83,090
Income Taxes 90,000 100,000
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 1996 COMPARED TO
THE THREE MONTHS ENDED MARCH 31, 1995
The decrease in total operating revenues was $88,550 or 3.4%. The decrease in
operating revenues was primarily the result of prior year adjustments to network
access revenues.
Total operating expenses increased by $5,340 or 0.4%. Operating income decreased
by $93,890 or 9.3%. Interest expense decreased by $6,029 due to a decrease in
long-term debt outstanding. Interest income increased by $4,560 as a result of
increased funds available for investment. Cellular partnership income decreased
by $26,480 or 20.6%. This decrease was caused by a $42,176 adjustment to income
to true up the 1995 estimated income per the 1995 K-1's.
Net income decreased by $68,036 or 10.5%.
LIQUIDITY AND CAPITAL RESOURCES
The Company had an increase in cash and temporary cash investments of $620,825
for the quarter resulting in a balance of $2,450,040 as of March 31, 1996.
The Company is budgeting approximately $1,800,000 for 1996 plant additions. The
Company intends to use internal funds for all of the 1996 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 processes 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 March 31, 1996.
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: October 21, 1994 By __________________________________
JAMES P. JENSEN, PRESIDENT
Dated: October 21, 1994 By __________________________________
BILL OTIS, EXECUTIVE VICE PRESIDENT
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 2,450,040
<SECURITIES> 0
<RECEIVABLES> 1,035,352
<ALLOWANCES> 17,994
<INVENTORY> 367,075
<CURRENT-ASSETS> 3,915,820
<PP&E> 25,081,090
<DEPRECIATION> 12,796,385
<TOTAL-ASSETS> 22,440,301
<CURRENT-LIABILITIES> 1,156,469
<BONDS> 4,308,334
0
0
<COMMON> 2,887,425
<OTHER-SE> 12,538,496
<TOTAL-LIABILITY-AND-EQUITY> 22,440,301
<SALES> 0
<TOTAL-REVENUES> 2,214,981
<CGS> 0
<TOTAL-COSTS> 1,303,397
<OTHER-EXPENSES> (140,748)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 76,568
<INCOME-PRETAX> 975,764
<INCOME-TAX> 397,928
<INCOME-CONTINUING> 577,836
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 577,836
<EPS-PRIMARY> 1.00
<EPS-DILUTED> 1.00
</TABLE>
