<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the period ended MARCH 31, 1998
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 Number: 0-18307
NORTHLAND CABLE PROPERTIES EIGHT LIMITED PARTNERSHIP
(Exact Name of Registrant as Specified in Charter)
Washington 91-1423516
(State of Organization) (I.R.S. Employer Identification No.)
1201 Third Avenue, Suite 3600, Seattle, Washington 98101
(Address of Principal Executive Offices) (Zip Code)
(206) 623-1351
(Registrant's telephone number, including area code)
N/A
(Former name, former address and former fiscal year, if changed since
last report)
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 [ ] No [X]
- ----------
This filing contains __ pages. Exhibits index appears on page __.
<PAGE> 2
PART 1 - FINANCIAL INFORMATION
ITEM 1. Financial Statements
NORTHLAND CABLE PROPERTIES EIGHT LIMITED PARTNERSHIP
BALANCE SHEETS - (Unaudited)
(Prepared by the Managing General Partner)
<TABLE>
<CAPTION>
March 31, December 31,
1998 1997
------------ ------------
<S> <C> <C>
ASSETS
Cash $ 676,103 $ 463,021
Accounts receivable 85,920 101,772
Prepaid expenses 75,341 62,453
Property and equipment, net of accumulated
depreciation of $3,816,903 and $3,552,644,
respectively 7,082,672 7,272,468
Intangible assets, net of accumulated
amortization of $2,334,910 and $2,182,025,
respectively 5,773,983 5,926,868
------------ ------------
Total assets $ 13,694,019 $ 13,826,582
============ ============
LIABILITIES AND PARTNERS' EQUITY
Accounts payable and accrued expenses $ 720,267 $ 625,573
Due to managing general partner and affiliates 57,533 34,201
Converter deposits 11,540 12,200
Subscriber prepayments 83,234 157,636
Notes payable 10,925,000 10,925,000
------------ ------------
Total liabilities 11,797,574 11,754,610
------------ ------------
Partners' equity:
General Partners:
Contributed capital, net 1,000 1,000
Accumulated deficit (62,253) (60,498)
------------ ------------
(61,253) (59,498)
------------ ------------
Limited Partners:
Contributed capital, net 8,120,820 8,120,820
Accumulated deficit (6,163,122) (5,989,350)
------------ ------------
1,957,698 2,131,470
------------ ------------
Total partners' equity 1,896,445 2,071,972
------------ ------------
Total liabilities and partners' equity $ 13,694,019 $ 13,826,582
============ ============
</TABLE>
The accompanying note to unaudited financial statements is an integral
part of these statements
2
<PAGE> 3
NORTHLAND CABLE PROPERTIES EIGHT LIMITED PARTNERSHIP
STATEMENTS OF OPERATIONS - (Unaudited)
(Prepared by the Managing General Partner)
<TABLE>
<CAPTION>
For the three months ended March 31,
------------------------------------
1998 1997
------------- --------------
<S> <C> <C>
Service revenues $ 1,208,934 $ 1,140,939
Expenses:
Operating 118,181 121,064
General and administrative (including
$161,231 and $141,530 to affiliates
in 1998 and 1997, respectively) 263,936 259,024
Programming 305,198 265,864
Depreciation and amortization 417,143 416,884
----------- -----------
1,104,458 1,062,836
----------- -----------
Income from operations 104,476 78,103
Other income (expense):
Interest expense (231,358) (252,228)
Interest income 617 --
Gain (loss) on disposal of assets (49,263) --
----------- -----------
(280,004) (252,228)
----------- -----------
Net income (loss) $ (175,528) (174,125)
=========== ===========
Allocation of net income (loss):
General Partners $ (1,755) $ (1,741)
=========== ===========
Limited Partners $ (173,773) $ (172,384)
=========== ===========
Net income (loss) per limited partnership unit:
(19,087 units for both time periods) $ (9) $ (9)
=========== ===========
Net income (loss) per $1,000 investment $ (18) $ (18)
=========== ===========
</TABLE>
The accompanying note to unaudited financial statements is an integral
part of these statements
3
<PAGE> 4
NORTHLAND CABLE PROPERTIES EIGHT LIMITED PARTNERSHIP
STATEMENTS OF CASH FLOWS - (Unaudited)
(Prepared by the Managing General Partner)
<TABLE>
<CAPTION>
For the three months ended March 31,
------------------------------------
1998 1997
------------- --------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $(175,528) $(174,125)
Adjustments to reconcile net income (loss) to
cash provided by operating activities:
Depreciation and amortization 417,143 416,884
(Gain) loss on sale of assets 49,263 --
(Increase) decrease in operating assets:
Accounts receivable 15,852 18,318
Prepaid expenses (12,888) 18,636
Increase (decrease) in operating liabilities
Accounts payable and accrued expenses 94,695 (105,808)
Due to managing general partner and affiliates 23,332 45,553
Converter deposits (660) (1,530)
Subscriber prepayments (74,402) (17,203)
--------- ---------
Net cash from operating activities 336,807 200,725
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment, net (123,725) (50,994)
Purchase of cable television systems -- --
--------- ---------
Net cash from (used in) investing activities (123,725) (50,994)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings under long term debt, net -- --
Principal payments on borrowings -- (350,000)
Loan fees and other costs incurred -- --
--------- ---------
Net cash from (used in) financing activities -- (350,000)
--------- ---------
INCREASE IN CASH 213,082 (200,269)
CASH, beginning of period 463,021 844,700
--------- ---------
CASH, end of period $ 676,103 $ 644,431
========= =========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for interest $ 226,693 $ 267,108
========= =========
</TABLE>
The accompanying note to unaudited financial statements is an integral
part of these statements
4
<PAGE> 5
NORTHLAND CABLE PROPERTIES EIGHT LIMITED PARTNERSHIP
NOTE TO UNAUDITED FINANCIAL STATEMENTS
(1) These unaudited financial statements are being filed in conformity with Rule
10-01 of Regulation S-X regarding interim financial statement disclosure and do
not contain all of the necessary footnote disclosures required for a fair
presentation of the Balance Sheets, Statements of Operations and Statements of
Cash Flows in conformity with generally accepted accounting principles. However,
in the opinion of management, this data includes all adjustments, consisting
only of normal recurring accruals, necessary to present fairly the Partnership's
financial position at March 31, 1998 and December 31, 1997, its Statements of
Operations for the three months ended March 31, 1998 and 1997, and its
Statements of Cash Flows for the three months ended March 31, 1998 and 1997.
Results of operations for these periods are not necessarily indicative of
results to be expected for the full year.
5
<PAGE> 6
PART I (continued)
ITEM 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Results of Operations
Revenues totaled $1,208,934 for the three months ended March 31, 1998,
representing an increase of approximately 6% as compared to the same period in
1997. Of these revenues, $910,886 (75%) was derived from basic service charges,
$110,884 (9%) from premium services, $38,173 (3%) from tier services, 32,510
(3%) from installation charges, $11,505 (1%) from service maintenance contracts
and $104,974 (9%) from other sources. The net increase in revenues is primarily
attributable to increases in basic service rates effective August 1, 1997.
As of March 31, 1998, the Partnership's systems served approximately 12,400
basic subscribers, 5,400 premium subscribers and 1,900 tier subscribers.
Operating expenses totaled $118,181 for the three months ended March 31, 1998,
representing a decrease of approximately 2% from the same period in 1997. This
decrease is mainly attributable to lower system maintenance and drop materials
expense, offset by higher vehicle operating expenses and increased operating
salaries.
General and administrative expenses totaled $263,936 for the three months ended
March 31, 1998, representing an increase of 2% as compared to the same period in
1997. Copyright fees increased due to a fiber interconnect project in Alabama
and revenue based expenses such as management fees increased.
Programming expenses totaled $305,198 for the three months ended March 31, 1998,
representing an increase of approximately 15% over the same period in 1997. This
is mainly due to higher costs charged by various program suppliers.
Depreciation and amortization expense for the three months ended March 31, 1998
remained approximately the same as the first quarter in 1997.
Interest expense for the three months ended March 31, 1998 decreased
approximately 8% as compared to the same period in 1997. The average bank debt
outstanding decreased from $11,375,000 during the first quarter of 1997 to
$10,925,000 during the first quarter of 1998. The Partnership's effective
interest rate decreased from 8.87% during the first quarter of 1997 to 8.47%
during the first quarter of 1998.
Liquidity and Capital Resources
The Partnership's primary source of liquidity is cash flow provided from
operations. Based on management's analysis, the Partnership's cash flow from
operations is sufficient to cover future operating costs, debt service and
planned capital expenditures.
6
<PAGE> 7
Effective March 30, 1998 the Partnership and its lender amended certain terms
of its loan agreement including an extension of maturity to December 31, 2002,
revisions to principal amortization and modification of certain financial
covenants. The amended covenants require the maintenance of certain ratios
including a funded debt to annualized cash flow ratio of 6.00 to 1 and a cash
flow to debt service ratio of 1.25 to 1. At March 31, 1998, the Partnership was
in compliance with its required financial covenants as amended.
As of the date of this filing, the balance under the credit facility is
$10,925,000. Certain fixed rate agreements in place as of December 31, 1997
expired during the first quarter of 1998, and the partnership entered into new
fixed rate agreements. As of the date of this filing, interest rates on the
credit facility were as follows: $8,100,000 fixed at 8.24% under the terms of an
interest rate swap agreement with its lender expiring December 31, 2000,
$2,300,000 fixed at 8.2188%, expiring July 12, 1998 and $300,000 fixed at
8.1875%, expiring June 30, 1998. The above rates include a margin paid to the
lender based on overall leverage, and may increase or decrease as the
Partnership's leverage fluctuates.
Capital Expenditures
During the first quarter of 1998, the Partnership incurred approximately
$120,000 in capital expenditures including cable line extensions in the
LaConner, WA system; a tap audit and fiber interconnect in the Aliceville, AL
system; and cable line extensions in the Swainsboro, GA system. Planned
expenditures for the balance of 1998 include an ongoing system upgrade to 400
MHz in the LaConner, Wa system and a vehicle replacement and initial phases of a
system upgrade to 450 MHz in the Aliceville, AL area.
7
<PAGE> 8
PART II - OTHER INFORMATION
ITEM 1 Legal proceedings
None
ITEM 2 Changes in securities
None
ITEM 3 Defaults upon senior securities
None
ITEM 4 Submission of matters to a vote of security holders
None
ITEM 5 Other information
None
ITEM 6 Exhibits and Reports on Form 8-K
(a) Exhibit index
27.0 Financial Data Schedule
(b) No reports on Form 8-K have been filed during the quarter ended March 31,
1998.
8
<PAGE> 9
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 thereunto duly authorized.
NORTHLAND CABLE PROPERTIES EIGHT LIMITED PARTNERSHIP
BY: Northland Communications Corporation,
Managing General Partner
Dated: May 13, 1998 BY: /s/ RICHARD I. CLARK
-------------- --------------------------------
Richard I. Clark
(Vice President/Treasurer)
Dated: May 13, 1998 BY: /s/ GARY S. JONES
-------------- --------------------------------
Gary S. Jones
(Vice President)
9
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<CASH> 676,103
<SECURITIES> 0
<RECEIVABLES> 85,920
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 10,899,575
<DEPRECIATION> 3,816,903
<TOTAL-ASSETS> 13,694,019
<CURRENT-LIABILITIES> 11,797,574
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 1,896,445
<TOTAL-LIABILITY-AND-EQUITY> 13,694,019
<SALES> 1,208,934
<TOTAL-REVENUES> 1,208,934
<CGS> 0
<TOTAL-COSTS> 1,104,458
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 231,358
<INCOME-PRETAX> (175,528)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (175,528)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
