SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1996
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 1-12786
- - --------------------------------------------------------------------------------
AMERICAN PAGING, INC.
- - --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 36-3109408
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
1300 Godward Street Northeast, Suite 3100, Minneapolis, Minnesota 55413-1767
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (612) 623-3100
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
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Class Outstanding at May 2, 1996
----------------- --------------------------
Common shares, $1 par value 7,546,995 Shares
Series A Common shares, $1 par value 12,500,000 Shares
- - --------------------------------------------------------------------------------
<PAGE>
AMERICAN PAGING, INC.
FIRST QUARTER REPORT ON FORM 10-Q
INDEX
Page No.
Part I. Financial Information
Management's Discussion and Analysis of
Results of Operations and Financial Condition 2-6
Consolidated Statements of Operations - Three Months
Ended March 31, 1996 and 1995 7
Consolidated Statements of Cash Flows - Three Months
Ended March 31, 1996 and 1995 8
Consolidated Balance Sheets -
March 31, 1996 and December 31, 1995 9-10
Notes to Consolidated Financial Statements 11
Part II. Other Information 12
Signatures 13
-1-
<PAGE>
PART I. FINANCIAL INFORMATION
AMERICAN PAGING, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION
RESULTS OF OPERATIONS
Three Months Ended 3/31/96 Compared to Three Months Ended 3/31/95
American Paging, Inc. [AMEX:APP or the "Company"] results of operations for the
three months ended March 31, 1996 compared to the same period in 1995 reflect
slow growth in customer units and service revenue, continuing downward pressure
on prices, higher operating expenses, and substantially higher operating and net
losses. Service revenue increased 6.6% to $23.7 million on a 13.8% increase in
the number of pagers served since March 31, 1995. Customer units in service
totaled 802,100 at March 31, 1996 compared to 705,100 at March 31, 1995. As
anticipated, growth has been slow over the past few quarters due to the
restructuring of the Company's field sales and service offices as well as
continued competitive pressures. The average monthly disconnect rate ("churn")
was 2.7% for the three months ended March 31, 1996 compared to 2.3% for 1995,
also reflecting disruptions within the customer service groups.
During the third quarter of 1995, American Paging began a major restructuring of
its sales and customer service organizations and activities designed to improve
unit growth, revenue growth, operating efficiency, operating cash flow and
earnings. The restructuring effort is expected to extend into the second half of
1996. The Company's restructuring includes a reorganization of its sales and
marketing organization, focused primarily on committing additional resources to
sales and sales support with the intent to increase revenue and customer
satisfaction. In addition, the Company is consolidating its 17
geographically-dispersed customer service and administrative functions into one
Customer Telecare Center ("CTC"), which is located in Oklahoma City, Oklahoma.
The CTC has been designed to better serve the Company's customers and gain the
efficiencies necessary to support a growing customer base. Upon completion of
the transition to the centralized CTC, field offices will provide sales only.
Finally, the Company is reengineering its business processes and systems to gain
further efficiencies in its back office operations.
Operating cash flow for the quarter was $3.1 million, or 13.0% of service
revenue in 1996 compared to $3.5 million, or 15.9% of service revenue in 1995.
During the quarter, the Company recorded pretax expenses of approximately
$450,000 related to restructuring efforts, primarily for consulting fees,
travel, training and duplicative staffing. Excluding these restructuring
expenses, operating cash flow would have been $3.5 million, or 14.9% of service
revenue. Also related to restructuring efforts, the Company recorded
approximately $350,000 in depreciation expense for the acceleration in the
useful lives of fixed assets which will no longer be required upon completion of
the restructuring. Operating cash flow is calculated by adding depreciation and
amortization to operating income/(loss). Operating cash flow does not represent
cash flows from operating activities as defined by generally accepted accounting
principles. See "Capital Resources and Liquidity" section below for a discussion
of cash flows from operating activities.
Service operating expense increased 13.9% to $27.6 million, principally due to
increased costs to serve the expanded customer base, higher selling costs,
restructuring expenses, and higher depreciation and amortization expense. As a
result, the Company incurred an operating loss of $4.1 million. In addition, the
Company incurred higher interest expense, net of $1.4 million interest
capitalized on its narrowband Personal Communications Services ("PCS") licenses,
contributing to the first quarter net loss of $5.3 million.
-2-
<PAGE>
Service revenue increased 6.6% ($1.5 million) in 1996 compared to 1995 as a
result of the 13.8% growth in the number of pagers in service since March 31,
1995. As expected, service revenue and unit growth was slower during the quarter
due to the restructuring of the Company's field sales and service offices.
Service revenue growth was slower than paging unit growth due to competitive
pricing declines and a continuing shift in the distribution channel mix, which
have an adverse impact on average monthly service revenue per customer unit
("ARPU"). ARPU declined to $10.03 for the first three months of 1996 from $10.91
in 1995. This 7.9% decline was the result of competitive pricing pressures which
accounted for 6.0% of the change and a shift in distribution channel mix which
accounted for 1.9% of the change.
Service operating expenses increased 13.9% ($3.4 million) in 1996, principally
due to increased costs to serve the expanded customer base, higher selling
costs, restructuring expenses, and higher depreciation and amortization expense.
The first quarter 1996 increase includes total restructuring expenses recorded
during the period of $800,000. However, average monthly cash operating expense
per unit (cost of services plus general and administrative expense) continued to
improve during the first quarter of 1996 to $6.47 from $7.12 in 1995 as a result
of growth in customer units in service as well as operating efficiencies
achieved.
Cost of service increased 20.8% ($1.1 million) in 1996, primarily
associated with additional customers served as well as upgrading and expanding
the Company's transmission systems to increase system capacity, improve network
reliability and expand geographic coverage. The Company's transmitters in
service increased to 1,016 at March 31, 1996 from 969 at March 31, 1995. During
the past twelve months, transmitters were added primarily for the continued
expansion and upgrade of existing systems coupled with the retirement of
smaller, outdated systems to improve operating efficiencies. The Company's new
systems and upgraded transmitters are capable of digital broadcast using the
high-speed FLEX(TM) signaling protocol, significantly increasing system capacity
over the Company's conventional signaling protocol.
Selling and advertising expense increased 23.9% ($990,000) in 1996,
primarily due to a significant increase in the number of sales and marketing
employees and related costs resulting from the restructuring of the sales and
marketing organization. The Company is committing additional resources to sales
and sales support with the intent to increase unit sales, revenue and
productivity. As anticipated, the Company has experienced slower unit and
revenue growth during the restructuring period as a result of work force
disruption caused by the refocusing of the sales force on direct sales and
reengineering of the customer service organization. Slower unit growth coupled
with the increase in selling and advertising expense caused a sharp increase in
selling cost per net unit addition to $292 in 1996 compared to $79 in 1995.
Selling cost per gross unit added, excluding acquisitions, increased to $63 in
1996 compared to $42 in 1995.
General and administrative expense decreased 4.0% ($360,000) in 1996.
During the first quarter, the Company recorded restructuring expenses of
$450,000 related to subleasing office space, employee severance and out
placement services, and for consulting services. However, general and
administrative expense decreased overall primarily as a result of administrative
staff reductions, also related to restructuring initiatives. Further reductions
are expected in this area as duplicative staffing is reduced during the
transition of back office functions in the Company's 17 service operating
centers to the CTC.
Depreciation and amortization expenses increased 29.0% ($1.6 million) in
1996, reflecting increased investment in system and pager equipment,
acquisitions and restructuring expenses. Excluding the investment in narrowband
PCS licenses (which is not yet being amortized), gross fixed assets balance grew
21.4% to $140.7 million at March 31, 1996 from $115.9 million at March 31, 1995,
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<PAGE>
primarily due to increases in pagers, transmitters and terminals. Also
contributing to the increase was a first quarter expense of approximately
$350,000 for accelerated depreciation on certain assets expected to be retired
as a result of the Company's restructuring.
Equipment sales loss was $202,000 in 1996 compared to $48,000 in 1995. The
Company generally plans to break even on equipment sales. For marketing
purposes, it may, at times in selected locations, discount paging equipment
below cost due to competitive pressures or sales promotions.
Operating loss was $4.1 million in 1996 compared $2.0 million in 1995. Operating
margin on service revenue decreased to (17.2%) in 1996 from (9.1%) in 1995. The
decrease in operating results reflect slower service revenue growth as well as
increased operating expenses associated with the growth in the number of paging
customers served and restructuring expenses.
The Company anticipates continued slower unit and revenue growth during the
first half of 1996 as a result of work force disruption caused by the
reengineering of the sales force and customer service organization. In addition,
the Company expects operating expenses to continue to increase in 1996 as the
customer base grows and as the Company continues to upgrade and expand its
transmission systems to further improve network reliability, increase system
capacity and expend geographical coverage. While the Company does not expect to
see measurable benefits before the end of the second quarter as a result of its
restructuring efforts, it does expect to move toward industry operating levels
during the last half of 1996.
Investment and other income/(expense) was ($219,000) in 1996 compared to
($54,000) in 1995, reflecting primarily investment losses during each period
associated with the Company's joint venture with Nexus Telecommunication
Systems, Ltd. ("Nexus"), accounted for using the equity method. The joint
venture, American Messaging Services, LLC, was formed to develop multiple
applications and distribution channels worldwide for a patented communications
network that provides two-way paging, location and telemetry services. Through
royalty agreements, American Paging will receive revenue on all world-wide sales
and usage of Nexus messaging systems. Nexus two-way messaging systems are
currently under construction in Australia and Russia. Revenue accruing to the
Company as a result of such sales is not expected to be material during 1996.
Interest expense-affiliates increased 36.8% ($290,000) in 1996 compared to 1995
resulting from increased long-term indebtedness due to the purchase and
development of narrowband PCS licenses, acquisitions and construction
expenditures. At March 31, 1996, the Company had $104.9 million outstanding
under its Revolving Credit Agreement with its parent, Telephone and Data
Systems, Inc. [AMEX:TDS]. On October 1, 1995, the Company started to capitalize
interest costs related to borrowing for the acquisition of its narrowband PCS
licenses, such capitalized interest totaled $1.4 million for the first quarter
of 1996.
Income tax benefit decreased 68.4% ($84,000) in 1996 compared to 1995, primarily
due to deferred state income taxes. The Company and TDS entered into a tax
allocation agreement which became effective January 1, 1994, pursuant to which,
the Company calculates its losses and credits as if it were a separate
affiliated group and will carry forward its losses and credits, if any, to
reduce future tax liabilities. For financial reporting purposes, the Company
computes its federal income taxes as if it were not a member of the TDS
consolidated group for federal income tax purposes.
Net loss totaled $5.3 million in 1996 compared to $2.7 million in 1995,
reflecting a significant increase in operating loss as well as costs associated
with the Company's investment in the Nexus joint venture and increased interest
expense. Loss per common share was $0.27 in 1996 compared to $0.14 in 1995,
reflecting the change in net loss.
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<PAGE>
CAPITAL RESOURCES AND LIQUIDITY
Construction, development and upgrade of the Company's radio paging systems, the
purchase of narrowband PCS licenses, and growth in the number of customers
served, both internally and through acquisitions, have caused financing
requirements to exceed internally generated cash flow during the last three
years. Accordingly, the Company has obtained substantial external funds in the
form of borrowings under a Revolving Credit Agreement with TDS and anticipates
that it will require additional funds over the next few years. In addition,
significant funds will be required when the Company begins expanding its
infrastructure to accommodate the services that the narrowband PCS licenses will
allow the Company to provide.
Cash flows from operating activities required $487,000 in 1996 and provided $1.9
million in 1995. The $2.4 million decrease in cash provided was primarily due to
the $2.6 million additional net loss coupled with $2.3 million for items
requiring cash, such as accounts payable, unearned revenue and interest. These
decreases were partially offset by $2.5 million for items not requiring cash,
such as depreciation and amortization, deferred income taxes, accounts
receivable and investment loss as well as balance sheet accruals for taxes and
restructuring. Accounts payable decreased significantly at the end of the first
quarter due to the advance payment of certain invoices prior to the Company's
conversion to a new accounting system software.
Cash flows from financing activities provided $10.5 million in 1996 compared to
$6.7 million in 1995. Cash flows from financing activities include cash from
borrowings under the Revolving Credit Agreement-TDS and sales of common stock
related to the Company's employee benefit plans. The Company borrowed $10.4
million during the three months ended March 31, 1996 under the Revolving Credit
Agreement-TDS.
Cash flows from investing activities required cash totaling $12.6 million in
1996 compared to $9.4 million in 1995. The majority of the cash outflow during
the quarter related to additions to property, plant and equipment of $10.8
million in 1996, representing enhancements to existing systems, construction of
new systems and pagers, not including PCS build out costs. In addition, net cash
outflow of $1.4 million related to capitalized interest and the development of
five regional narrowband PCS licenses. Cash required for other investments
related primarily to the Company's joint venture with Nexus Telecommunication
Systems Ltd.
In April 1995, the Company completed its acquisition of five regional narrowband
PCS licenses, providing coverage equivalent to that of a nationwide license. The
Company expects to spend approximately $8 million in 1996 for the development of
these licenses, primarily for interest capitalized on the borrowings to acquire
the licenses. The Company intends to begin deploying PCS services in early 1997
in some of its existing markets. In addition, significant funds will be required
as the Company continues to develop its infrastructure and to market the
services that these licenses will allow the Company to provide, such as two-way
acknowledgment paging and digital data transmission. The source of funds for
these expenditures is expected to be internally generated cash flow and
additional borrowings under the Revolving Credit Agreement with TDS.
At March 31, 1996, the Company had $1.6 million in cash. The Company had unused
borrowing capacity at March 31, 1996 of $20.1 million under its Revolving Credit
Agreement with TDS.
Pursuant to the Revolving Credit Agreement, amended December 31, 1995, the
Company may borrow up to an aggregate of $125 million from TDS. At March 31,
1996, $104.9 million total long-term debt under this agreement was used for the
acquisition and development of five regional narrowband Personal Communications
Services ("PCS") licenses ($58.1 million), investments in infrastructure ($31.1
million), and acquisitions ($15.7 million).
-5-
<PAGE>
The Revolving Credit Agreement allows the Company to borrow funds at an interest
rate equal to 1 1/2% above the prime rate, which is payable quarterly. The
Company's interest rate at March 31, 1996 was 9 3/4%. No principal is payable
until January 1, 1999, subject to acceleration under certain circumstances, at
which time the entire principal balance then outstanding is scheduled to become
due and payable. The Company may prepay the balance due under the Revolving
Credit Agreement at any time, in whole or in part, without premium. The Company
anticipates it will meet its future debt service obligations through cash
provided from ongoing operations.
In connection with the Company's efforts to increase its customer base and
market share and to invest in new communications technologies, the Company
anticipates requiring additional funding, the nature, amount and source of which
cannot now be determined, but which may include public or private offerings of
debt or equity securities. However, the Company has no agreements, commitments
or understandings with respect to any such transactions. If sufficient funding
is not made available to the Company on terms and prices acceptable to the
Company, the Company would have to reduce its construction and development
programs, which could have a material adverse impact on the Company's financial
condition and results of operations.
-6-
<PAGE>
AMERICAN PAGING, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
Unaudited
Three Months Ended
March 31,
1996 1995
---- ----
(Dollars in thousands, except per share amounts)
SERVICE REVENUE $ 23,708 $ 22,237
-------- --------
SERVICE OPERATING EXPENSE
Cost of service 6,586 5,452
Selling and advertising 5,132 4,142
General and administrative 8,705 9,064
Depreciation and amortization 7,169 5,560
-------- --------
Total service operating expense 27,592 24,218
-------- --------
SERVICE OPERATING LOSS (3,884) (1,981)
-------- --------
EQUIPMENT SALES
Revenue 2,602 3,681
Cost of equipment sold 2,804 3,729
-------- --------
EQUIPMENT SALES LOSS (202) (48)
-------- --------
OPERATING LOSS (4,086) (2,029)
-------- --------
INVESTMENT AND OTHER INCOME/(EXPENSE)
Investment loss in joint venture (294) (117)
Interest income 42 35
Other income, net 33 28
-------- --------
Total investment and other/(expense) (219) (54)
-------- --------
LOSS BEFORE INTEREST AND INCOME TAXES (4,305) (2,083)
Interest expense - affiliates 1,078 788
-------- --------
LOSS BEFORE INCOME TAXES (5,383) (2,871)
Income tax benefit (39) (123)
-------- --------
NET LOSS $ (5,344) $ (2,748)
======== ========
WEIGHTED AVERAGE COMMON AND
SERIES A COMMON SHARES (000s) 20,041 20,000
NET LOSS PER COMMON AND
SERIES A COMMON SHARE $ (0.27) $ (0.14)
The accompanying notes to consolidated financial statements are an
integral part of these statements.
-7-
<PAGE>
AMERICAN PAGING, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOW
Unaudited
Three Months Ended
March 31,
1996 1995
---- ----
(Dollars in thousands)
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (5,344) $ (2,748)
Add (deduct) adjustments to reconcile net
loss to net cash (required)/provided by
operating activities:
Depreciation and amortization 7,169 5,560
Deferred income taxes, net (43) (264)
Investment loss 294 117
Other noncash expense 519 609
Change in accounts receivable 498 195
Change in accounts payable (3,545) (1,794)
Change in unearned revenue 38 280
Change in accrued taxes 139 2
Change in accrued interest 63 284
Change in other assets and liabilities (275) (348)
-------- --------
(487) 1,893
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES
Change in Revolving Credit Agreement - TDS 10,391 6,671
Common shares issued 59 --
-------- --------
10,450 6,671
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to property, plant and equipment (10,814) (9,101)
Investment in PCS (1,438) (187)
Other investments (384) (141)
-------- --------
(12,636) (9,429)
-------- --------
NET DECREASE IN CASH AND CASH EQUIVALENTS (2,673) (865)
CASH AND CASH EQUIVALENTS
Beginning of period 4,280 2,284
-------- --------
End of period $ 1,607 $ 1,419
======== ========
The accompanying notes to consolidated financial statements are an
integral part of these statements.
-8-
<PAGE>
AMERICAN PAGING, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS
(Unaudited)
March 31, December 31,
1996 1995
---- ----
(Dollars in thousands)
CURRENT ASSETS
Cash and cash equivalents $ 1,607 $ 4,280
Accounts receivable
Customers 11,206 11,883
Affiliates - income taxes 318 258
Other 179 15
Inventory 2,981 3,408
Deferred tax asset 2,059 2,028
Prepaid expenses and other 1,492 1,508
-------- --------
19,842 23,380
-------- --------
INVESTMENTS 186 97
-------- --------
PROPERTY, PLANT AND EQUIPMENT
In service 107,412 102,385
Less accumulated depreciation 47,012 42,933
-------- --------
60,400 59,452
-------- --------
INTANGIBLE ASSETS
PCS licenses 56,887 55,538
Other intangibles, net of accumulated amortization
of $14,705 and $13,733, respectively 19,800 20,682
-------- --------
76,687 76,220
-------- --------
TOTAL ASSETS $157,115 $159,149
======== ========
The accompanying notes to consolidated financial statements are an
integral part of these statements.
-9-
<PAGE>
AMERICAN PAGING, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
LIABILITIES AND SHAREHOLDERS' EQUITY
(Unaudited)
March 31, December 31,
1996 1995
---- ----
(Dollars in thousands)
CURRENT LIABILITIES
Due to affiliates -
Accounts payable $ 252 $ 1,540
Accrued interest 2,454 2,391
Accounts payable 3,358 9,192
Unearned revenue and deposits 10,867 10,829
Accrued taxes 551 353
Other current liabilities 2,718 3,024
--------- ---------
20,200 27,329
--------- ---------
REVOLVING CREDIT AGREEMENT - TDS 104,914 94,523
DEFERRED LIABILITIES AND CREDITS
Net deferred income tax liability 1,710 1,721
COMMON SHAREHOLDERS' EQUITY
Common shares, par value $1 per share 7,545 7,537
Series A Common shares, par value $1 per share 12,500 12,500
Additional paid-in capital 72,514 72,463
Retained deficit (62,268) (56,924)
--------- ---------
30,291 35,576
--------- ---------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 157,115 $ 159,149
========= =========
The accompanying notes to consolidated financial statements are an
integral part of these statements.
-10-
<PAGE>
AMERICAN PAGING, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. The consolidated financial statements included herein have been prepared by
the Company, without audit, pursuant to the rules and regulations of the
Securities and Exchange Commission. Certain information and footnote
disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been
condensed or omitted pursuant to such rules and regulations, although the
Company believes that the disclosures are adequate to make the information
presented not misleading. It is suggested that these consolidated financial
statements be read in conjunction with the consolidated financial
statements and the notes thereto included in the Company's annual report on
Form 10-K for the year ended December 31, 1995.
The accompanying unaudited consolidated 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 cash flows for the three months
ended March 31, 1996 and 1995. The results of operations for the three
months ended March 31, 1996 and 1995, are not necessarily indicative of the
results to be expected for the full year.
2. Net loss per Common and Series A Common share for the three month periods
ended March 31, 1996 and 1995 was computed by dividing net loss by the
weighted average number of Common Shares and Series A Common shares
outstanding during the period.
3. The following table summarizes interest and income taxes paid:
Three Months Ended March 31,
1996 1995
---- ----
(Dollars in thousands)
Interest paid $ 2,391 $ 503
Income taxes paid 96 181
4. Assuming the acquisitions accounted for as purchases during the period
January 1, 1995 to March 31, 1996, had taken place on January 1, 1995,
unaudited pro forma results of operations would have been as follows:
Three Months Ended March 31,
1996 1995
---- ----
(Dollars in thousands,
except per share amounts)
Service revenue $ 23,708 $ 23,259
Net loss (5,344) (3,062)
Loss per Common share $ (0.27) $ (0.15)
-11-
<PAGE>
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit
Number Description
- - ------- -----------
10.1 Form of Amendment to Revolving Credit Agreement between the Company
and TDS, dated December 31, 1995
10.2 American Paging, Inc. 1994 Long-Term Incentive Plan is hereby
incorporated by reference to Annex A of the Company's definitive proxy
statement as filed with the Securities and Exchange Commission on
April 16, 1996
27 Financial Data Schedule
(b) No reports were filed on Form 8-K during the quarter ended March 31, 1996.
-12-
<PAGE>
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, thereto duly authorized.
American Paging, Inc.
(Registrant)
Date: May 14, 1996 By: /s/ JOHN R. SCHAAF
John R. Schaaf
President
(Chief Executive Officer)
Date: May 14, 1996 By: /s/ TERRENCE T. SULLIVAN
Terrence T. Sullivan
Vice President-Finance
(Chief Financial Officer)
Date: May 14, 1996 By: /s/ GREGORY A. EFFERTZ
Gregory A. Effertz
Controller
(Principal Accounting Officer)
-13-
Exhibit 10.1
December 31, 1995
American Paging, Inc.
1300 Godward Street NE
Suite 3100
Minneapolis, MN 55413
RE: Revolving Credit Agreement dated January 1, 1994, as amended August 10,
1995, (the "Revolving Credit Agreement"), between American Paging, Inc.
("API") and Telephone and Data Systems, Inc. ("TDS")
Gentlemen:
This letter will constitute TDS's agreement to amend the Revolving Credit
Agreement by changing all of the references to "$100,000,000" in the Revolving
Credit Agreement to "$125,000,000." All of the other terms and conditions of the
Revolving Credit Agreement shall remain in full force and effect.
Please acknowledge your agreement to this amendment by executing the copy of
this letter and return it to the undersigned.
Very truly yours,
TELEPHONE AND DATA SYSTEMS, INC.
By: /s/ MURRAY L. SWANSON
Murray L. Swanson
Executive Vice President, Finance
Accepted and agreed to as of the date set forth above.
AMERICAN PAGING, INC.
By: /s/ TERRENCE T. SULLIVAN
Terrence T. Sullivan
Vice President - Finance
-14-
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<LEGEND>
This schedule contains summary financial information extracted
from the consolidated financial statements of American Paging,
Inc. as of March 31, 1996, and is qualified in its entirety by
reference to such financial statements.
[/LEGEND]
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 1,607
<SECURITIES> 0
<RECEIVABLES> 11,703
<ALLOWANCES> 0
<INVENTORY> 2,981
<CURRENT-ASSETS> 19,842
<PP&E> 107,412
<DEPRECIATION> 47,012
<TOTAL-ASSETS> 157,115
<CURRENT-LIABILITIES> 20,200
<BONDS> 0
0
0
<COMMON> 20,045
<OTHER-SE> 10,246
<TOTAL-LIABILITY-AND-EQUITY> 157,115
<SALES> 2,602
<TOTAL-REVENUES> 26,310
<CGS> 2,804
<TOTAL-COSTS> 30,396
<OTHER-EXPENSES> 219
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,078
<INCOME-PRETAX> (5,383)
<INCOME-TAX> (39)
<INCOME-CONTINUING> (5,344)
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<NET-INCOME> (5,344)
<EPS-PRIMARY> (0.27)
<EPS-DILUTED> (0.27)
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