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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
/x/ |
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
for the quarterly period ended June 30, 2000.
/ / | 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 0-27416
RURAL CELLULAR CORPORATION
(Exact name of registrant as specified in its charter)
Minnesota (State or other jurisdiction of incorporation or organization) |
41-1693295 (I.R.S. Employer Identification No.) |
PO Box 2000
3905 Dakota Street SW
Alexandria, Minnesota 56308
(320) 762-2000
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)
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 /x/ No / /
Number of shares of common stock outstanding as of the close of business on August 7, 2000:
Class A | 10,932,037 | |
Class B | 861,562 |
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Page Number |
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Part I.Financial Information | |||||
Item 1. |
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Financial Statements |
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Condensed Consolidated Balance Sheets As of June 30, 2000 and December 31, 1999 |
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3 |
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Condensed Consolidated Statements of Operations Three and six months ended June 30, 2000 and 1999 |
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5 |
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Condensed Consolidated Statements of Cash Flows Six months ended June 30, 2000 and 1999 |
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6 |
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Notes to Condensed Consolidated Financial Statements |
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7 |
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Item 2. |
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Management's Discussion and Analysis of Financial Condition and Results of Operations |
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15 |
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Item 3. |
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Quantitative and Qualitative Disclosures about Market Risk |
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Part II.Other Information |
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Item 4. |
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Submission of Matters to a Vote of SecurityHolders |
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Item 5. |
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Other Information |
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Item 6. |
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Exhibits and Reports on Form 8-K |
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Signature page |
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2
Part I. FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
RURAL CELLULAR CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In Thousands)
(Unaudited)
ASSETS
|
June 30, 2000 |
December 31, 1999 |
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---|---|---|---|---|---|---|---|---|
CURRENT ASSETS: | ||||||||
Cash | $ | 27,124 | $ | 1,285 | ||||
Accounts receivable, less allowance of $2,373 and $894 | 45,994 | 17,036 | ||||||
Inventories | 5,680 | 4,419 | ||||||
Other current assets | 7,447 | 633 | ||||||
Total current assets | 86,245 | 23,373 | ||||||
PROPERTY AND EQUIPMENT, less accumulated depreciation of $86,452 and $68,604 | 215,117 | 130,651 | ||||||
LICENSES AND OTHER ASSETS: | ||||||||
Licenses and other intangible assets, less accumulated amortization of $37,202 and $19,728 | 1,466,646 | 318,632 | ||||||
Deferred debt issuance costs, less accumulated amortization of $3,619 and $1,753 | 24,088 | 11,099 | ||||||
Restricted funds in escrow | 10,000 | 35,000 | ||||||
Other assets | 6,473 | 7,523 | ||||||
Total licenses and other assets | 1,507,207 | 372,254 | ||||||
$ | 1,808,569 | $ | 526,278 | |||||
The accompanying notes are an integral part of these condensed consolidated balance sheets.
3
RURAL CELLULAR CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In Thousands, except par value)
(Unaudited)
LIABILITIES AND SHAREHOLDERS' EQUITY
|
June 30, 2000 |
December 31, 1999 |
|||||||
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CURRENT LIABILITIES: | |||||||||
Accounts payable | $ | 19,878 | $ | 16,220 | |||||
Advance billings and customer deposits | 6,262 | 3,271 | |||||||
Accrued interest | 8,249 | 3,683 | |||||||
Dividends payable | 7,074 | 2,102 | |||||||
Other accrued expenses | 5,776 | 3,984 | |||||||
Total current liabilities | 47,239 | 29,260 | |||||||
LONG TERM LIABILITIES | 1,201,731 | 339,742 | |||||||
Total liabilities | 1,248,970 | 369,002 | |||||||
PREFERRED SECURITIES | 428,938 | 147,849 | |||||||
SHAREHOLDERS' EQUITY: | |||||||||
Class A common stock; $.01 par value; 200,000 and 15,000 shares authorized, 10,927 and 8,090 issued | 109 | 81 | |||||||
Class B common stock; $.01 par value; 10,000 and 5,000 shares authorized, 861 and 1,032 issued | 9 | 10 | |||||||
Additional paid-in capital | 190,561 | 36,916 | |||||||
Accumulated deficit | (60,018 | ) | (27,580 | ) | |||||
Total shareholders' equity | 130,661 | 9,427 | |||||||
$ | 1,808,569 | $ | 526,278 | ||||||
The accompanying notes are an integral part of these condensed consolidated balance sheets.
4
RURAL CELLULAR CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In Thousands, Except Per Share Data)
(Unaudited)
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Three Months Ended June 30, |
Six Months Ended June 30, |
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2000 |
1999 |
2000 |
1999 |
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REVENUES: | |||||||||||||||
Service | $ | 66,608 | $ | 31,587 | $ | 100,202 | $ | 59,303 | |||||||
Roamer | 27,138 | 9,952 | 37,448 | 17,577 | |||||||||||
Equipment | 6,011 | 1,623 | 8,736 | 2,895 | |||||||||||
Total revenues | 99,757 | 43,162 | 146,386 | 79,775 | |||||||||||
OPERATING EXPENSES: | |||||||||||||||
Network costs | 23,643 | 9,381 | 33,531 | 18,673 | |||||||||||
Cost of equipment sales | 10,713 | 2,522 | 16,647 | 4,644 | |||||||||||
Selling, general and administrative | 25,216 | 13,234 | 40,502 | 24,987 | |||||||||||
Depreciation and amortization | 25,795 | 9,927 | 36,995 | 19,653 | |||||||||||
Total operating expenses | 85,367 | 35,064 | 127,675 | 67,957 | |||||||||||
OPERATING INCOME | 14,390 | 8,098 | 18,711 | 11,818 | |||||||||||
OTHER INCOME (EXPENSE): | |||||||||||||||
Interest expense | (28,291 | ) | (6,797 | ) | (33,570 | ) | (13,515 | ) | |||||||
Interest and dividend income | 466 | 84 | 2,313 | 230 | |||||||||||
Minority interest | | 206 | | 1,538 | |||||||||||
Other | | (301 | ) | (22 | ) | (302 | ) | ||||||||
Other expense, net | (27,825 | ) | (6,808 | ) | (31,279 | ) | (12,049 | ) | |||||||
INCOME (LOSS) BEFORE INCOME TAX AND EXTRAORDINARY ITEM | (13,435 | ) | 1,290 | (12,568 | ) | (231 | ) | ||||||||
INCOME TAX PROVISION | | | | 34 | |||||||||||
NET INCOME (LOSS) BEFORE EXTRAORDINARY ITEM | (13,435 | ) | 1,290 | (12,568 | ) | (265 | ) | ||||||||
EXTRAORDINARY ITEM | (925 | ) | | (925 | ) | | |||||||||
NET INCOME (LOSS) | (14,360 | ) | 1,290 | (13,493 | ) | (265 | ) | ||||||||
PREFERRED STOCK DIVIDEND | (12,058 | ) | (3,920 | ) | (18,945 | ) | (7,733 | ) | |||||||
NET LOSS APPLICABLE TO COMMON SHARES | $ | (26,418 | ) | $ | (2,630 | ) | $ | (32,438 | ) | $ | (7,998 | ) | |||
NET LOSS PER BASIC AND DILUTED COMMON SHARE | $ | (2.24 | ) | $ | (0.29 | ) | $ | (2.89 | ) | $ | (0.89 | ) | |||
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING, BASIC AND DILUTED | 11,777 | 9,026 | 11,210 | 9,016 | |||||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
5
RURAL CELLULAR CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
(Unaudited)
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Six Months Ended June 30, |
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2000 |
1999 |
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OPERATING ACTIVITIES: | |||||||||||
Net loss | $ | (13,493 | ) | $ | (265 | ) | |||||
Adjustments to reconcile to net cash provided by operating activities: | |||||||||||
Depreciation and amortization | 36,995 | 19,653 | |||||||||
Change in minority interest | | (1,663 | ) | ||||||||
Other | 1,561 | 563 | |||||||||
Change in other operating elements: | |||||||||||
Accounts receivable | (19,607 | ) | (4,706 | ) | |||||||
Inventories | 1,621 | 776 | |||||||||
Other current assets | (29 | ) | (92 | ) | |||||||
Accounts payable | 4,476 | (535 | ) | ||||||||
Advance billings and customer deposits | 419 | 259 | |||||||||
Other accrued expenses | 6,213 | 13 | |||||||||
Net cash provided by operating activities | 18,156 | 14,003 | |||||||||
INVESTING ACTIVITIES: | |||||||||||
Purchase of property and equipment, net | (12,202 | ) | (10,126 | ) | |||||||
Purchases of wireless properties | (1,230,562 | ) | (18,068 | ) | |||||||
Pending acquisition costs | (10,000 | ) | | ||||||||
Other | (845 | ) | (2,299 | ) | |||||||
Net cash used in investing activities | (1,253,609 | ) | (30,493 | ) | |||||||
FINANCING ACTIVITIES: | |||||||||||
Proceeds from exercise of stock options | 666 | 513 | |||||||||
Proceeds from offering of common stock, net | 160,546 | | |||||||||
Proceeds from issuance of preferred securities, net | 263,514 | | |||||||||
Proceeds from issuance of long-term debt | 1,074,000 | 21,000 | |||||||||
Repayments of long-term debt | (222,000 | ) | (4,000 | ) | |||||||
Payment of debt issuance costs | (19,122 | ) | (158 | ) | |||||||
Proceeds from termination of interest rate swaps | 3,688 | 360 | |||||||||
Net cash provided by financing activities | 1,261,292 | 17,715 | |||||||||
NET INCREASE IN CASH | 25,839 | 1,225 | |||||||||
CASH, at beginning of period | 1,285 | 2,062 | |||||||||
CASH, at end of period | $ | 27,124 | $ | 3,287 | |||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
6
RURAL CELLULAR CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1) BASIS OF PRESENTATION:
The accompanying condensed consolidated financial statements for the three and six months ended June 30, 2000 and 1999 have been prepared by Rural Cellular Corporation and Subsidiaries (the "Company" or "RCC") without audit. In the opinion of management, normal recurring adjustments necessary to present fairly the financial position, results of operations, and cash flows for all periods presented have been made.
Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. It is suggested that these condensed consolidated financial statements be read in conjunction with the consolidated financial statements and the notes thereto included in the Company's Report on Form 10-K for the year ended December 31, 1999. The results of operations for the three and six months ended June 30, 2000 are not necessarily indicative of the operating results for the full fiscal year or for any other interim periods.
2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Roaming Revenue Reclassification
Rural Cellular Corporation generates revenue from charges to its customers when they use their cellular phone in other wireless providers' markets ("Incollect Revenue"). Until April 2000, RCC included Incollect Revenue in the roaming revenue line item in its statement of operations. Expense associated with Incollect Revenue, charged by third-party wireless providers, was also included in roaming revenue on a net basis. RCC used this method because, historically, it has passed through to its customers most of the costs related to Incollect Revenue. However, the wireless industry including RCC, has increasingly been using pricing plans that include flat rate pricing and larger home service areas. Under these types of plans, amounts charged to RCC by other wireless providers may not necessarily be passed through to its customers.
In April 2000, RCC adopted a policy to include the associated expense from its incollect activity in network cost rather than reducing roaming revenue and is including Incollect Revenue as service revenue rather than increasing roaming revenue. Roaming revenue will include only the revenue from other wireless providers' customers who use RCC's network ("Outcollect Revenue"). Prior periods have been restated to conform to this new presentation. This change in presentation has no impact on operating income or EBITDA.
Recently Issued Accounting Pronouncements
In July 1998, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards No. 133, Derivatives and Hedging ("SFAS 133"). SFAS 133 establishes uniform hedge accounting criteria for all derivatives requiring companies to formally document, designate and assess the effectiveness of transactions that receive hedge accounting. Under SFAS 133, derivatives will be recorded in the balance sheet as either an asset or liability measured at its fair value, with changes in the fair value recognized as a component of comprehensive income or in current earnings. SFAS 133, as amended by SFAS 137, Derivatives and Hedging-Deferral of the Effective Date of FASB Statement No. 133, will be effective for fiscal years beginning after June 15, 2000. In addition, SFAS 138 was issued in June 2000 as an amendment to SFAS 133 and addresses issues causing
7
implementation difficulties. The Company plans to adopt SFAS 133 on January 1, 2001 and is still assessing the impact of adoption.
In March 2000, the FASB released FASB Interpretation No. 44 ("FIN 44"), "Accounting for Certain Transactions involving Stock Compensationan interpretation of APB Opinion No. 25." This interpretation provides for the clarification of the application of APB Opinion No. 25, "Accounting for Stock Issued to Employees" ("APB 25") on certain issues, such as (i) the definition of an `employee' for purposes of applying the APB 25, (ii) the criteria for determining whether a plan qualifies as a noncompensatory plan, (iii) the accounting consequence of various modifications to the terms of a previously fixed stock option or award and (iv) the accounting for an exchange of stock compensation awards in a business combination. The Company accounts for its Management Incentive Stock Option Plan and Employee Stock Purchase Plan following the guidelines of APB 25 and related interpretations. The interpretation is not expected to have a material impact on the Company's financial position or results of operations.
SEC Staff Accounting Bulletin No. 101 ("SAB 101") was released on December 3, 1999 addresses the application of generally accepted accounting principles to selected revenue recognition issues. SAB 101A was released on March 24, 2000 and delayed for one fiscal quarter the implementation date of SAB 101 for registrants with fiscal years beginning between December 16, 1999 and March 15, 2000. Since the issuance of SAB 101 and SAB 101A, the staff has continued to receive requests from a number of groups asking for additional time to determine the effect, if any revenue recognition practices. SAB101B issued in June 26, 2000 delays the implementation date of SAB 101 until no later than the fourth fiscal quarter of fiscal years beginning after December 15, 1999. We are currently evaluating the impact of this bulletin on our financial position and results of operations.
3) ACQUISITIONS:
Through June 30, 2000, RCC had entered into a joint venture to develop and offer personal communications services, or PCS, and had completed the acquisitions of cellular systems as described below:
Accounting Treatment
The purchase prices for the Company's acquisitions were allocated to the net assets based on their estimated fair values and the excess was allocated to licenses and goodwill and is being amortized over 7 to 39 years. The purchase price allocation for Triton Cellular has been completed on a preliminary basis, subject to adjustment should new or additional facts about the business become known. All of
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the above acquisitions have been accounted for under the purchase method of accounting; accordingly, operating results have been included from the date of acquisition.
The following unaudited pro forma information presents the consolidated results of operations as if the acquisition of Triton Cellular had occurred as of January 1, 1999. This summary is not necessarily indicative of what the results of operations of the Company and Triton Cellular would have been if they had been a single entity during such period, nor does it purport to represent results of operations for any future periods.
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Three Months Ended June 30, |
Six Months Ended June 30, |
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2000 |
1999 |
2000 |
1999 |
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(In thousands, except for per share data) |
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Total revenues | $ | 99,757 | $ | 83,431 | $ | 188,634 | $ | 155,936 | |||||
Operating income | 14,390 | 8,895 | 18,932 | 12,838 | |||||||||
EBITDA | 40,185 | 35,586 | 73,116 | 63,365 | |||||||||
Net loss | (14,360 | ) | (19,239 | ) | (34,270 | ) | (41,925 | ) | |||||
Net loss applicable to common shares | (26,418 | ) | (31,652 | ) | (58,123 | ) | (66,644 | ) | |||||
Net loss per basic and diluted common share | $ | (2.24 | ) | $ | (2.69 | ) | $ | (5.18 | ) | $ | (5.95 | ) |
4) LONG TERM LIABILITIES:
The Company had the following long-term liabilities outstanding:
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June 30, 2000 |
December 31, 1999 |
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(In thousands) |
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Credit Facility: | ||||||||
Revolver | $ | 1,065,000 | $ | 213,000 | ||||
Deferred gain on hedge and swap agreements | 5,231 | 1,742 | ||||||
95/8% Senior Subordinated Notes | 125,000 | 125,000 | ||||||
Other | 6,500 | | ||||||
Long-term liabilities | $ | 1,201,731 | $ | 339,742 | ||||
Credit FacilityOn April 3, 2000, the Company amended and restated its credit facility increasing it from $300 million to $1.2 billion and also included a $175 million incremental facility ("Credit Facility"). The Credit Facility was amended and restated again on June 29, 2000 to increase the incremental facility from $175 million to $275 million. At the Company's discretion, advances under the Credit Facility bear interest at the London Interbank Offering Rate ("LIBOR") plus an applicable margin (2.75% as of June 30, 2000) based on the Company's ratio of indebtedness to annualized operating cash flow as of the end of the most recently completed fiscal quarter. As of June 30, 2000, the effective rate of interest on the Credit Facility, excluding the impact of hedge agreements, was 9.55%. A commitment fee of 0.50% on the unused portion of the Credit Facility is payable quarterly. Borrowings under the Credit Facility are secured by a pledge of all the assets of the Company excluding its ownership in the stock of Cellular 2000, Inc and its 70% ownership in Wireless Alliance LLC. Mandatory commitment reductions are required upon any material sale of assets. The Credit Facility is subject to various covenants including the ratio of indebtedness to annualized operating cash flow and the ratio of annualized operating cash flow to interest expense. As of June 30, 2000, the Company was in compliance with all covenants under the Credit Facility.
In conjunction with the April 3, 2000 amendment to the Credit Facility, the Company wrote-off deferred costs of $1.3 million during the second quarter of 2000, of which approximately $925,000 was
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treated as an extraordinary item while $358,000 was treated as interest expense in the accompanying income statements.
5) COMMON STOCK AND PREFERRED SECURITIES:
In May 1998, the Company issued 125,000 shares of Senior Exchangeable Preferred Stock with a liquidation preference of $1,000 per share. An additional 25,000 shares of Senior Exchangeable Preferred Stock were issued in February 2000. Dividends on the Senior Exchangeable Preferred Stock are cumulative, accrue at 113/8% per annum, are payable quarterly, and may be paid, at the Company's option, on any dividend payment date occurring on or before May 15, 2003 either in cash or by the issuance of additional shares of Senior Exchangeable Preferred Stock having an aggregate liquidation preference equal to the amount of such dividends. Thereafter, all dividends will be payable in cash only.
In February 2000, the Company issued 140,000 shares of Junior Exchangeable Preferred Stock with a liquidation preference of $1,000 per share. Dividends on the Junior Exchangeable Preferred Stock are cumulative, accrue at 121/4% per annum, are payable quarterly, and may be paid, at the Company's option, on any dividend payment date occurring on or before February 15, 2005 either in cash or by the issuance of additional shares of Junior Exchangeable Preferred Stock having an aggregate liquidation preference equal to the amount of such dividends. Thereafter, all dividends will be payable in cash only.
On April 2000, RCC issued 110,000 shares of redeemable voting convertible preferred stock ("Class M") for consideration of $110 million. The purchasers included Madison Dearborn Capital Partners III, L.P., Madison Dearborn Special Equity III, L.P., Special Advisors Fund I, LLC, Boston Ventures Limited Partnership V and Toronto Dominion Investments, Inc. Dividends on the Class M Preferred Stock are cumulative, accrue at 8% per annum
The Senior Exchangeable Preferred Stock is senior to all classes of junior preferred stock and common stock of the Company with respect to dividend rights and rights on liquidation, winding-up and dissolution of the Company. The Junior Exchangeable Preferred Stock is junior to the Senior Exchangeable Preferred Stock and Class T convertible preferred stock and senior to the Class M Preferred Stock and common stock with respect to dividend rights and rights on liquidation, winding-up and dissolution of the Company. Shares of the Senior and Junior Exchangeable Preferred Stock are non-voting, except as otherwise required by law and as provided in their respective Certificates of Designation.
In order to comply with the FCC's rules regarding cross-ownership of cellular licensees within a given market, the Company issued 7,541 shares of Class T convertible preferred stock to Telephone & Data Systems, Inc. ("TDS") with a par value of $1,000 on March 31, 2000 in exchange for 43,000 shares of Class A Common Stock and 105,940 shares of Class B Common Stock owned by TDS. TDS or the Company can convert the Class T preferred stock into the original number of shares of Class A or Class B Common Stock in the future if ownership by TDS of the Common Stock would then be permissible under FCC rules. Dividends on the Class T preferred stock are cumulative and have a fixed coupon rate of 4% percent per annum.
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As of June 30, 2000, the Company has accrued the following in preferred stock dividends payable.
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(In thousands) |
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Junior Exchangeable Preferred Stock | $ | 2,210 | |||
Senior Exchangeable Preferred Stock | 2,589 | ||||
Class M Preferred Stock | 2,200 | ||||
Class T Preferred Stock | 75 | ||||
Total | $ | 7,074 | |||
The Company also completed, in February 2000, a follow-on offering of 2,748,500 shares of Class A Common Stock at $617/8 per share.
6) FINANCIAL INSTRUMENTS
As required by the Credit Facility, the Company maintains interest rate swaps on at least 50% of the principal amount of the loans outstanding for an average period of three years from the date of the hedge agreements.
In May 2000, the Company settled swaps it had entered into in August 1998 with a total notional amount of $165 million, resulting in a gain of approximately $3.1 million. Gains from these transactions are being accreted as a reduction of interest expense over the lives of the underlying debt instruments.
The Company has entered into several financial instruments with a total outstanding notional amount of $1.036 billion. Income and expense associated with these instruments are accrued over the periods prescribed by the contracts.
Effective Date |
Termination Date |
Notional Amount |
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(In thousands) |
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Swaps: | ||||||
May 12, 2000 | May 16, 2003 | $ | 84,000 | |||
May 12, 2000 | May 16, 2003 | 42,000 | ||||
May 12, 2000 | May 16, 2003 | 84,000 | ||||
May 12, 2000 | May 16, 2003 | 42,000 | ||||
February 2, 1999 | May 15, 2003 | 125,000 | ||||
February 2, 1999 | May 15, 2008 | 125,000 | ||||
Flooridor | ||||||
August 14, 2000 | May 12, 2003 | 252,000 | ||||
Collars: | ||||||
May 25, 2000 | May 25, 2003 | 47,000 | ||||
May 25, 2000 | May 25, 2003 | 47,000 | ||||
June 1, 2000 | June 5, 2003 | 94,000 | ||||
June 1, 2000 | June 5, 2003 | 94,000 | ||||
Total | $ | 1,036,000 | ||||
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7) SUPPLEMENTAL DISCLOSURE OF CONDENSED CONSOLIDATED CASH FLOW INFORMATION:
|
Six Months Ended June 30, |
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2000 |
1999 |
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(In thousands) |
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Cash paid during the period for interest | $ | 27,551 | $ | 12,766 | ||
Cash paid during the period for income taxes | | |
8) SEGMENT INFORMATION:
The Company's consolidated financial statements consist of the business units RCC Cellular and Wireless Alliance. RCC Cellular includes cellular operations in the Midwest, Northeast, Northwest and South regions of the United States. Wireless Alliance LLC ("Wireless Alliance"), a joint venture that commenced cellular reselling operations in November 1996 and launched its first PCS networks in the second quarter of 1998, is 70%-owned by the Company and 30%-owned by Voicestream
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Communications, Inc. Information about the Company's operations in its business units for the three and six months ended June 30, 2000 and 1999 is as follows:
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Three Months Ended June 30, |
Six Months Ended June 30, |
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SEGMENT INFORMATION |
2000 |
1999 |
2000 |
1999 |
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(In thousands) |
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Revenues | |||||||||||||||
RCC Cellular | $ | 96,793 | $ | 40,845 | $ | 140,542 | $ | 75,383 | |||||||
Wireless Alliance | 3,049 | 2,415 | 6,025 | 4,630 | |||||||||||
Eliminating | (85 | ) | (98 | ) | (181 | ) | (238 | ) | |||||||
Total revenues | 99,757 | 43,162 | 146,386 | 79,775 | |||||||||||
Operating expenses | |||||||||||||||
RCC Cellular | 80,767 | 30,980 | 118,173 | 59,746 | |||||||||||
Wireless Alliance | 4,685 | 4,182 | 9,683 | 8,449 | |||||||||||
Eliminating | (85 | ) | (98 | ) | (181 | ) | (238 | ) | |||||||
Total operating expenses | 85,367 | 35,064 | 127,675 | 67,957 | |||||||||||
Operating income | |||||||||||||||
RCC Cellular | 16,026 | 9,865 | 22,369 | 15,637 | |||||||||||
Wireless Alliance | (1,636 | ) | (1,767 | ) | (3,658 | ) | (3,819 | ) | |||||||
Total operating income | 14,390 | 8,098 | 18,711 | 11,818 | |||||||||||
Depreciation and amortization | |||||||||||||||
RCC Cellular | 24,493 | 8,706 | 34,440 | 17,156 | |||||||||||
Wireless Alliance | 1,302 | 1,221 | 2,555 | 2,497 | |||||||||||
Total depreciation and amortization | 25,795 | 9,927 | 36,995 | 19,653 | |||||||||||
Interest expense | |||||||||||||||
RCC Cellular | 28,291 | 6,797 | 33,570 | 13,515 | |||||||||||
Wireless Alliance | 846 | 683 | 1,558 | 1,356 | |||||||||||
Eliminating | (846 | ) | (683 | ) | (1,558 | ) | (1,356 | ) | |||||||
Total interest expense | 28,291 | 6,797 | 33,570 | 13,515 | |||||||||||
*EBITDA | |||||||||||||||
RCC Cellular | 40,519 | 18,571 | 56,809 | 32,793 | |||||||||||
Wireless Alliance | (334 | ) | (546 | ) | (1,103 | ) | (1,322 | ) | |||||||
Total EBITDA | 40,185 | 18,025 | 55,706 | 31,471 | |||||||||||
Capital Expenditures | |||||||||||||||
RCC Cellular | 9,045 | 3,772 | 10,626 | 7,691 | |||||||||||
Wireless Alliance | 637 | 660 | 1,576 | 2,435 | |||||||||||
Total capital expenditures | 9,682 | 4,432 | 12,202 | 10,126 |
13
|
June 30, 2000 |
December 31, 1999 |
|||||||
---|---|---|---|---|---|---|---|---|---|
Balance Sheet Data: | |||||||||
Property and equipment | |||||||||
RCC Cellular | $ | 275,644 | $ | 174,528 | |||||
Wireless Alliance | 25,925 | 24,727 | |||||||
Total property and equipment | 301,569 | 199,255 | |||||||
Total assets |
|
|
|
|
|
|
|
||
RCC Cellular | $ | 1,825,478 | $ | 537,676 | |||||
Wireless Alliance | 33,851 | 34,542 | |||||||
Eliminating | (50,760 | ) | (45,940 | ) | |||||
Total assets | 1,808,569 | $ | 526,278 |
14
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
INTRODUCTION
Affecting the year-to-year financial comparability of RCC is its acquisition activity. The Company materially expanded its business through the acquisition of Triton Cellular in April 2000, approximately doubling the number of its customers. The acquisition of Triton Cellular was accounted for under the purchase method of accounting and, therefore, the Company's historical results of operations include the results of operations for Triton Cellular subsequent to the acquisition date. Other factors affecting year-to-year financial comparability include increased borrowings under the Company's credit facility and issuance of preferred securities.
Accordingly, the Company does not believe the discussion and analysis of historical financial condition and results of operations set forth below are indicative nor should they be relied upon as an indicator of future performance.
GENERAL
Revenues primarily consist of service, roamer and equipment revenues, each of which is described below:
Service revenues include monthly access charges, charges for airtime used in excess of the time included in the service package purchased, long distance charges derived from calls placed by its customers as well as cellular and paging equipment lease revenues. Total service revenues are affected by the number of customers, pricing, and number of minutes used. Additional charges include activation fees and charges for such features as voicemail, call waiting, and call forwarding. The Company also includes the charges to its customers when they use their cellular phone in other wireless providers' markets ("Incollect Revenue") as service revenue.
Roamer revenues include only the revenue from other wireless providers' customers who use RCC's network ("Outcollect Revenue").
Equipment revenues include sales of cellular and paging equipment, accessory sale reselling to customers, and network equipment. Within certain markets, RCC rents equipment to customers as an alternative to selling such cellular equipment.
RCC's operating expenses include network costs, cost of equipment sales, selling, general and administrative expenses and depreciation and amortization, each of which is described below:
Network costs include switching and transport expenses and the expenses associated with the maintenance and operation of its wireless network facilities, as well as charges from other service providers for resold minutes and services. RCC also includes the associated expense from its incollect activity in network costs.
Cost of equipment sales includes the costs associated with telephone equipment and accessories sold to customers. In recent years, the Company and other cellular providers have increased the use of discounts on phone equipment as competition between service providers has intensified. As a result, the Company has incurred, and expects to continue to incur, losses on equipment sales and increased marketing and selling costs per gross additional customer. RCC expects to continue these discounts and promotions because it believes that they will result in increased revenues from increases in the number of cellular customers.
Selling, general and administrative includes salaries, benefits, and operating expenses such as marketing, commissions, customer support, accounting, administration, and billing.
15
Depreciation and amortization represents the costs associated with the depreciation of RCC's fixed assets and the amortization of its intangible assets, primarily cellular license acquisition costs, goodwill and customer lists. The high level of depreciation and amortization is associated with the Company's acquisition activities and the build-out and upgrade of its network.
In addition to the operating expenses discussed above, RCC also incurs other income (expense), primarily interest expense related to financing and acquisition activities.
Interest expense primarily results from borrowings under the Credit Facility and senior subordinated notes, the proceeds of which were used to finance acquisitions and further develop the Company's cellular network.
Other income (expense) includes RCC's minority partner's absorption of Wireless Alliance losses as accounted for under generally accepted accounting principles. RCC realized the maximum benefit from the allocation of losses to the minority partner as of December 31, 1999 and will receive no further benefit until Wireless Alliance generates income.
Preferred stock dividends are related to the Company's following issuances which were done in conjunction with the Company's acquisition activities:
16
RESULTS OF OPERATIONS
The following table presents certain consolidated statement of operations data as a percentage of total revenues as well as other operating data for the periods indicated.
|
Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
|
2000 |
1999 |
2000 |
1999 |
|||||||
REVENUES: | |||||||||||
Service | 66.8 | % | 73.2 | % | 68.5 | % | 74.3 | % | |||
Roamer | 27.2 | 23.0 | 25.5 | 22.1 | |||||||
Equipment | 6.0 | 3.8 | 6.0 | 3.6 | |||||||
Total revenues | 100.0 | 100.0 | 100.0 | 100.0 | |||||||
OPERATING EXPENSES: | |||||||||||
Network costs | 23.7 | 21.7 | 22.9 | 23.4 | |||||||
Cost of equipment sales | 10.7 | 5.8 | 11.4 | 5.8 | |||||||
Selling, general and administrative | 25.3 | 30.7 | 27.7 | 31.3 | |||||||
Depreciation and amortization | 25.9 | 23.0 | 25.3 | 24.6 | |||||||
Total operating expenses | 85.6 | 81.2 | 87.3 | 85.1 | |||||||
OPERATING INCOME | 14.4 | 18.8 | 12.7 | 14.9 | |||||||
OTHER INCOME (EXPENSE): | |||||||||||
Interest expense | (28.4 | ) | (15.7 | ) | (22.9 | ) | (16.9 | ) | |||
Interest and dividend income | 0.5 | 0.2 | 1.6 | 0.3 | |||||||
Minority interest | 0.0 | 0.5 | 0.0 | 1.9 | |||||||
Other | 0.0 | (0.7 | ) | 0.0 | (0.4 | ) | |||||
Other expense, net | (27.9 | ) | (15.7 | ) | (21.3 | ) | (15.1 | ) | |||
INCOME (LOSS) BEFORE INCOME TAX AND EXTRAORDINARY ITEM | (13.5 | ) | 3.1 | (8.6 | ) | (0.2 | ) | ||||
INCOME TAX PROVISION | | | | | |||||||
NET INCOME (LOSS) BEFORE EXTRAORDINARY ITEM | (13.5 | ) | 3.1 | (8.6 | ) | (0.2 | ) | ||||
EXTRAORDINARY ITEM | (0.9 | ) | | (0.6 | ) | | |||||
NET INCOME (LOSS) | (14.4 | ) | 3.1 | (9.2 | ) | (0.2 | ) | ||||
PREFERRED STOCK DIVIDEND | (12.1 | ) | (9.1 | ) | (12.9 | ) | (9.7 | ) | |||
NET LOSS APPLICABLE TO COMMON SHARES | (26.5 | ) | (6.0 | ) | (22.1 | ) | (9.9 | ) | |||
EBITDA(1) | 40.3 | % | 41.8 | % | 38.0 | % | 39.5 | % | |||
17
|
Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
2000 |
1999 |
2000 |
1999 |
|||||||||||
Other Operating Data: | |||||||||||||||
Retention: (excluding prepaids) | |||||||||||||||
RCC Cellular | 98.4 | % | 98.5 | % | 98.3 | % | 98.4 | % | |||||||
Wireless AlliancePCS | 95.7 | % | 98.2 | % | 96.1 | % | 98.5 | % | |||||||
Acquisition cost per customer: | |||||||||||||||
RCC Cellular | $ | 321 | $ | 357 | $ | 345 | $ | 369 | |||||||
Wireless AlliancePCS | $ | 697 | $ | 724 | $ | 740 | $ | 513 | |||||||
Average monthly revenue per customer: | |||||||||||||||
RCC Cellular | $ | 62 | $ | 62 | $ | 59 | $ | 59 | |||||||
Wireless AlliancePCS | $ | 55 | $ | 54 | $ | 56 | $ | 52 | |||||||
Cell Sites: | |||||||||||||||
RCC Cellular | 543 | 247 | |||||||||||||
Wireless AlliancePCS | 60 | 57 | |||||||||||||
Penetration: | |||||||||||||||
RCC Cellular | 10.4 | % | 8.7 | % | |||||||||||
Wireless AlliancePCS | 2.2 | % | 1.3 | % | |||||||||||
Wireless customers at period end: | |||||||||||||||
RCC Cellular: | |||||||||||||||
Postpaid | 476,697 | 208,685 | |||||||||||||
Prepaid | 16,325 | 1,216 | |||||||||||||
493,022 | 209,901 | ||||||||||||||
Wireless Alliance | 16,525 | 11,841 | |||||||||||||
Paging | 12,570 | 11,513 | |||||||||||||
Total customers | 522,117 | 233,255 |
THREE AND SIX MONTHS ENDED JUNE 30, 2000 AND 1999
Revenues
Service Revenues. Consolidated service revenues for the three and six months ended June 30, 2000 increased 110.9% and 69.0% to $66.6 million and $100.2 million, respectively, from $31.6 million and $59.3 million in the comparable periods of the prior year. The revenue growth reflects the additional revenue resulting from the Triton Cellular acquisition combined with additional net prepaid and postpaid customers added through increased penetration in existing markets. The Company expects service revenues to increase in the future primarily as a result of future acquisitions, further anticipated industry-wide growth in customers, and expansion of coverage.
Roamer Revenues. Reflecting the acquisition of Triton Cellular combined with increases in outcollect roaming minutes, consolidated roamer revenues for the three months ended June 30, 2000 increased 172.7% to $27.1 million from $10.0 million in the comparable period of the prior year. Roaming revenues for the six months ended June 30, 2000 increased 113.1% to $37.4 million from $17.6 million in the comparable period of the prior year. Roaming minutes, in existing markets, have increased in part due to the activation of additional cell sites and increased industry-wide wireless usage resulting from the now popular single rate calling plans. Partially offsetting the increase in roaming minutes of use during the three months ended June 30, 2000 was the decrease in roaming yield per minute, including toll, to $0.48 as compared to $0.68 during the year ended December 31, 1999.
Equipment Revenues. Consolidated equipment revenues for the three and six months ended June 30, 2000 increased 270.4% and 201.8% respectively, to $6.0 million and $8.7 million from
18
$1.6 million and $2.9 million in the comparable periods of the prior year. This revenue growth reflects the additional equipment revenue from the Triton Cellular operations, increased sales of network equipment and increased direct phone sales programs.
Key Revenue Indicators. Reflecting the higher penetration in the newly acquired Triton Cellular service areas as compared to RCC's other service areas together with the addition of 23,345 cellular customers, cellular penetration increased to 10.4% at June 30, 2000 as compared to 8.7% at June 30, 1999. Cellular service revenue and roaming revenue per customer ("ARPU") for the three months ended June 30, 2000 has remained unchanged as compared to the three months ended June 30, 1999, at $62 per customer. ARPU for the six months ended June 30, 2000 has remained unchanged as compared to the six months ended June 30, 1999, at $59 per customer.
Operating Expenses
Network Costs. Primarily reflecting the additional network costs from Triton Cellular, consolidated network costs for the three and six months ended June 30, 2000, increased 152.0% and 79.6% respectively, over the comparable period in the prior year to $23.6 million and $33.5 million respectively, from $9.4 million and $18.7 million. As a percentage of total revenues, consolidated network costs for the three months ended June 30, 2000 increased to 23.7% from 21.7% in the comparable period of the prior year. As a percentage of total revenues, consolidated network costs for the six months ended June 30, 2000 decreased to 22.9% from 23.4% in the comparable period of the prior year. The Company expects network costs, as a percentage of revenue, to decline as certain efficiencies are achieved resulting from the newly acquired Triton networks.
Cost of Equipment Sales. Cost of equipment sales for the three and six months ended June 30, 2000 increased 324.8% and 258.5% over the comparable periods of the prior year to $10.7 million and $16.6 million from $2.5 million and $4.6 million, respectively. As a percentage of revenue, cost of equipment sales for the three months ended June 30, 2000 increased to 10.7% as compared to 5.8% in the comparable period of the prior year. As a percentage of revenue, cost of equipment sales for the six months ended June 30, 2000 increased to 11.4% as compared to 5.8% in the comparable period of the prior year. Contributing to the increase in cost of equipment sales were handset costs resulting from the migration of existing customers from analog service to digital service and greater emphasis selling digital phones as opposed to renting them..
Selling, General and Administrative. Selling, general and administrative expenses for the three and six months ended June 30, 2000 increased 90.5% and 62.1% over the comparable periods in the prior year to $25.2 million and $40.5 million from $13.2 million and $25.0 million, respectively. The increase in selling, general and administrative expenses primarily reflects RCC's ownership of Triton Cellular operations for the second quarter of 2000. The increase also reflects higher costs related to more aggressive promotional activity during the three and six months ended June 30, 2000 over the comparable periods of the prior year. Reflecting efficiencies resulting from the acquisition of Triton, as a percentage of sales for the three and six months ended June 30, 2000, selling, general and administrative expenses, decreased to 25.3% and 27.7% from 30.7% and 31.3%, respectively, in the comparable periods of the prior year.
Depreciation and Amortization. Depreciation and amortization expense for the three and six months ended June 30, 2000 increased 159.8% and 88.2% over the three and six months ended June 30, 1999 to $25.8 million and $37.0 million from $9.9 million and $19.7 million. The increase reflects added amortization relating to the intangible assets acquired from Triton Cellular, additional depreciation attributable to Triton's property, plant and equipment in addition to the depreciation related to $12.2 million in the company's capital expenditure during 2000.
19
Other Income (Expense)
Interest Expense. Interest expense for the three and six months ended June 30, 2000 increased 316.2% and 148.4%, respectively, to $28.3 million and $33.6 million as compared to $6.8 million and $13.5 million in the comparable periods of the prior year. The increase primarily reflects increased borrowings under the Credit Facility to complete the acquisition of Triton Cellular.
Interest and Dividend Income. Interest and dividend income for the three and six months ended June 30, 2000 increased to $466,000 and $2.3 million, respectively, as compared to $85,000 and $231,000 during the three and six months ended June 30, 1999. These increases primarily reflect the interest earned by the Company's interest bearing restricted escrow accounts and other cash balances funded through increased borrowings and preferred and equity offerings.
Preferred Stock Dividends
Preferred stock dividends increased 207.6% and 145.0% to $12.1 million and $19.0 million in the three and six months ended June 30, 2000 from $3.9 million and $7.7 million in the comparable periods of the prior year. The increase primarily resulted from the issuances of junior and senior exchangeable preferred in February 2000 and Class M and Class T preferred securities in April 2000. Dividends on the junior and senior preferred securities were and will be paid through the issuance of additional shares of exchangeable preferred stock. RCC will distribute 5,167 and 4,409 shares of Senior and Junior Preferred Stock Dividends, respectively on August 15, 2000.
EBITDA
EBITDA increased 122.9% and 77.0% to $40.2 million and $55.7 million in the three and six months ended June 30, 2000 respectively, as compared to $18.0 million and $31.5 million in the comparable periods of the prior year.
Seasonality
Historically, the Company has experienced seasonal fluctuations in revenues and operating income (loss). The Company's average monthly roaming revenue for cellular customers has typically increased during the second and third calendar quarters, reflecting greater usage by roamer customers who travel in the company's cellular service areas for weekend and vacation recreation. The Company anticipates, however, that the more evenly distributed year around roaming revenues by its newly acquired South and Northwest service areas may lesson the seasonality of its consolidated operations.
LIQUIDITY AND CAPITAL RESOURCES
The Company's primary liquidity requirements are for working capital, capital expenditures, debt service, acquisitions, and customer growth. In the past the Company has met these requirements through cash flow from operations, sales of common and preferred stock, borrowings under its credit facility, and issuance of its senior subordinated notes. On April 3, 2000, the Company amended and restated its credit facility increasing it from $300 million to $1.2 billion and also included a $175 million incremental facility. The Credit Facility was amended and restated again on June 29, 2000 to increase the incremental facility from $175 million to $275 million. Reflecting the acquisition of Triton Cellular and other operating cash requirements, the Company had $1.065 billion outstanding under its $1.2 billion credit facility as of June 30, 2000.
Under the new $1.2 billion credit facility, amounts may be borrowed, subject to mandatory repayments, or repaid at any time through maturity, provided that the outstanding borrowings do not exceed the total amount available.
20
Net cash provided by operating activities was $18.2 million for the six months ended June 30, 2000. Adjustments to the $13.5 million net loss to reconcile to net cash provided by operating activities included $37.0 million in depreciation and amortization, a $19.6 million increase in accounts receivable and a $4.5 million increase in accounts payable.
Net cash used in investing activities for the six months ended June 30, 2000 was $1.254 billion. The principal uses of cash included $1.231 billion in acquisition costs for Triton Cellular, $10.0 million in pending acquisition costs for Saco River and $12.2 million in purchases of property and equipment. These purchases reflect the continued expansion of existing cellular coverage and the continued upgrading of existing cell sites and switching equipment.
Net cash provided by financing activities was $1.261 billion for the six months ended June 30, 2000, consisting primarily of $1.074 billion from the issuance of long term debt, $160.5 million in net proceeds from a common stock offering, $263.5 million in net proceeds from the issuance of preferred securities offset by $222.0 million in repayments of long-term debt.
In February 2000, the Company sold 2,748,000 shares of Class A Common Stock at $617/8 per share and 140,000 shares of 121/4% Junior Exchangeable Preferred Stock and 25,000 shares of 113/8% Senior Exchangeable Preferred Stock at prices of $1,000.00 and $988.88 per share, respectively. The shares of preferred stock have a liquidation preference of $1,000.00 per share and are not convertible into common stock.
On April 1, 2000, RCC issued 110,000 shares of redeemable voting convertible preferred stock for consideration of $110 million. The purchasers included Madison Dearborn Capital Partners III, L.P., Madison Dearborn Special Equity III, L.P., Special Advisors Fund I, LLC, Boston Ventures Limited Partnership V and Toronto Dominion Investments, Inc.
Capital expenditures for the remainder of 2000 are expected to be approximately $38.0 million. During the fourth quarter of 2000, the Company anticipates additional borrowing utilizing the Credit Facility to fund the Saco River acquisition.
Forward Looking Statements
Forward-looking statements herein are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to be correct. A number of factors could cause actual results, performance, achievements of the Company, or industry results to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. These factors include but are not limited to, the competitive environment in the wireless and telecommunications industries, changes in economic conditions in general and in the Company's business, demographic changes, changes in prevailing interest rates and the availability of and terms of financing to fund the anticipated growth of the Company's business, the ability to attract and retain qualified personnel, the significant indebtedness of the Company, and changes in the Company's acquisition and capital expenditure plans. Investors are cautioned that all forward-looking statements involve risks and uncertainties.
In addition, such forward-looking statements are necessarily dependent upon assumptions, estimates and data that may be incorrect or imprecise and involve known and unknown risks, uncertainties and other factors. Accordingly, any forward-looking statements included herein do not purport to be predictions of future events or circumstances and may not be realized. All subsequent written and oral forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by the foregoing cautionary statements. The Company disclaims
21
any obligation to update any such statements or to announce publicly the results of any revisions to any of the forward-looking statements contained herein to reflect future events or developments.
Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Rural Cellular Corporation has used Senior Subordinated Notes and bank credit facilities as part of its financing of acquisition activities, capital requirements and operations. These on-balance sheet financial instruments, to the extent they provide for variable rates of interest, expose RCC to interest rate risk, with the primary interest rate risk exposure resulting from changes in LIBOR or the prime rate, which are used to determine the interest rates that are applicable to borrowings under its bank credit facilities. RCC uses off-balance sheet derivative financial instruments, including interest rate swap and interest rate protection agreements, to manage interest rate risk. All of the Company's derivative financial instrument transactions are entered into for non-trading purposes.
Had the Company not entered into the interest rate swaps, collars and floridors and holding other variables constant, such as debt levels, a one percentage point increase in interest rates, net of the effect of derivatives, would impact pretax earnings and cash flows for the three and six months ended June 30, 2000 by $3.0 million and $3.4 million respectively.
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PART II. OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Name |
|
Affirmative |
|
Authority Withheld |
---|---|---|---|---|
Richard P. Ekstrand | 16,601,898 | 470,459 | ||
George W. Wikstrom | 15,273,928 | 1,798,429 |
There were no abstentions or broker non-votes.
Continuing as directors were Jeffrey S. Gilbert, Marvin C. Nicolai, Ann K. Newhall, Wesley E. Schultz, Don C. Swenson, George M. Revering, Paul Finnegan and John Hunt
ITEM 5. OTHER INFORMATION
On June 21, 2000 RCC announced that it had entered into a definitive agreement, through an acquisition subsidiary, to acquire all of the outstanding shares of the Saco River Telegraph and Telephone Company ("Saco River"). The transaction is subject to regulatory approval and other consents and is expected to be completed in late 2000. Saco River provides wireless and ILEC telecommunication services to southern Maine and eastern New Hampshire. The wireless properties to be acquired from Saco River include the following metropolitan service area ("MSA") and basic trading areas ("BTA"):
Service Area |
License |
|
---|---|---|
Portsmouth, NHMSA | CellularB Side | |
Portland, MEBTA | PCSF Block | |
Manchester and Nashua, NHBTA | PCSF Block |
23
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
*10.1(a) |
|
Second Amended and Restated Loan Agreement dated April 3, 2000 among Rural Cellular Corporation and certain financial institutions and Toronto Dominion (Texas), Inc. as administrative agent. |
10.1(b) |
|
Third Amended and Restated Loan Agreement dated June 29, 2000 among Rural Cellular Corporation and certain financial institutions and Toronto Dominion (Texas), Inc. as administrative agent. Exhibits to this agreement, with the exception of exhibit T and exhibit U, have not been included as they are substantially similar to those filed with the Second Amended and Restated Loan Agreement included in the Company's Report on Form 8-K filed on April 3, 2000. |
27 |
|
Financial Data Schedule |
A Report on Form 8-K dated April 1, 2000, was filed during the second quarter ended June 30, 2000, reporting under Item 2 that the registrant completed the previously announced acquisition of the licenses, operations, and related assets of Triton Cellular Partners, L.P.
An amendment to the Report on Form 8-K discussed above including financial statements as required under Item 7 and exhibits was filed on June 13, 2000.
24
Pursuant to the requirements of Section 13 or 15(d) 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.
RURAL CELLULAR CORPORATION (Registrant) |
||
Dated: August 14, 2000 |
|
/s/ RICHARD P. EKSTRAND Richard P. Ekstrand President and Chief Executive Officer |
Dated: August 14, 2000 |
|
/s/ WESLEY E. SCHULTZ Wesley E. Schultz Senior Vice President and Chief Financial Officer (Principal Financial Officer) |
25
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