<PAGE> 1
================================================================================
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 quarterly period ended March 31, 1997
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 0-25588
--------------------
PALMER WIRELESS, INC.
(Exact Name of Registrant as specified in its charter)
Delaware 65-0456627
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
12800 University Drive, Ste. 500, 33907
Fort Myers, Florida (Zip Code)
(Address of principal executive offices)
Registrant's telephone number (941) 433-4350
--------------------
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
----- -----
The number of shares outstanding of the issuer's common stock as of May 15,
1997 was 27,813,259.
================================================================================
<PAGE> 2
PALMER WIRELESS, INC. AND SUBSIDIARIES
INDEX
<TABLE>
<S> <C>
PART I. FINANCIAL INFORMATION
ITEM 1. Financial Statements (Unaudited)
Condensed Consolidated Balance Sheets- December 31, 1996 and March 31, 1997................. I-1
Condensed Consolidated Statements of Operations - Three months ended
March 31, 1996 and 1997............................................................. I-2
Condensed Consolidated Statements of Stockholders' Equity.................................. I-3
Condensed Consolidated Statements of Cash Flows - Three months ended
March 31, 1996 and 1997............................................................. I-4
Notes to Condensed Consolidated Financial Statements....................................... I-5
ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of
Operations.......................................................................... I-6
PART II. OTHER INFORMATION
ITEM 1. Legal Proceedings......................................................................... II-1
ITEM 2. Changes in Securities..................................................................... II-1
ITEM 3. Defaults Upon Senior Securities........................................................... II-1
ITEM 4. Submission of Matters to a Vote of Security Holders....................................... II-1
ITEM 5. Other Information......................................................................... II-1
ITEM 6. Exhibits and Reports on Form 8-K.......................................................... II-1
SIGNATURES........................................................................................... II-2
</TABLE>
<PAGE> 3
Item 1. Financial Statements
PALMER WIRELESS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
($ IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
DECEMBER 31, MARCH 31,
1996 1997
------------ --------------
Assets
------
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 1,698 $ 2,091
Trade accounts receivable, net of
allowance for doubtful accounts 18,784 17,819
Receivable from other cellular carriers 1,706 3,194
Deferred income taxes 830 1,044
Prepaid expenses and deposits 2,313 1,940
Inventory 5,106 4,043
------------ --------------
Total current assets $ 30,437 $ 30,131
Net property, plant and equipment 132,438 148,121
Licenses, net of amortization 375,808 400,620
Other intangible assets and other assets,
at cost less accumulated amortization 11,259 10,694
------------ --------------
$ 549,942 $ 589,566
============ ==============
Liabilities and Equity
----------------------
Current liabilities:
Notes payable $ 1,366 $ 2,698
Current installments of long-term debt 5,296 -
Accounts payable 10,394 10,510
Accrued expenses 8,399 9,871
Other liabilities 4,686 4,770
------------ --------------
Total current liabilities $ 30,141 $ 27,849
Long-term debt, excluding current installments 337,000 376,000
Deferred income taxes 11,500 12,938
Minority interests 6,371 6,672
------------ --------------
Total liabilities $ 385,012 $ 423,459
------------ --------------
Stockholders' equity 164,930 166,107
------------ --------------
$ 549,942 $ 589,566
============ ==============
</TABLE>
Note: The balance sheet at December 31, 1996 has been derived from the
audited financial statements at that date but does not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements.
See accompanying notes to condensed consolidated financial statements.
I - 1
<PAGE> 4
PALMER WIRELESS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
($ IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE THREE MONTHS
ENDED MARCH 31,
--------------------------------
1996 1997
-------------- -------------
<S> <C> <C>
Revenue:
Service $ 34,915 $ 42,220
Equipment sales and installation 2,035 2,463
-------------- ------------
Total revenue $ 36,950 $ 44,683
-------------- ------------
Operating expenses:
Engineering, technical and other direct 7,683 7,430
Cost of equipment 3,931 5,807
Selling, general and administrative 10,924 13,360
Depreciation and amortization 5,898 7,553
-------------- ------------
Total operating expenses $ 28,436 $ 34,150
-------------- ------------
Operating income $ 8,514 $ 10,533
-------------- ------------
Other income (expense):
Interest expense, net (7,945) (7,872)
Other income, net - 71
-------------- ------------
Total other expense $ (7,945) $ (7,801)
-------------- ------------
Income before minority interest
share of income and income taxes $ 569 $ 2,732
Minority interest share of income (452) (331)
-------------- ------------
Income before income taxes $ 117 $ 2,401
Income taxes (41) (1,224)
-------------- ------------
Net income $ 76 $ 1,177
============== ============
Net income per share of common stock $ 0.00 $ 0.04
============== ============
Average shares outstanding 23,561,923 27,813,259
============== ============
</TABLE>
See accompanying notes to condensed consolidated financial statements.
I - 2
<PAGE> 5
PALMER WIRELESS, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Stockholders' Equity
($ in thousands)
(Unaudited)
<TABLE>
<CAPTION>
Common Stock Common Stock
Class A Class B Additional
---------------------- ------------------- paid-in Retained
Shares Amount Shares Amount capital earnings
--------- ------------ ---------- -------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Balances at December 31, 1995 6,095,772 $ 61 17,293,578 $ 173 $ 72,466 $ 1,853
Public offering, net of issuance
costs of $5,826 5,000,000 50 - - 94,124 -
Exercise of stock options 6,666 - - - 95 -
Employee and non-employee director
stock purchase plans 17,243 - - - 290 -
Treasury shares purchased - - - - - -
Net income - - - - - 4,682
---------- --------- ---------- ------ --------- --------
Balances at December 31, 1996 11,119,681 $ 111 17,293,578 $ 173 $ 166,975 $ 6,535
Net income - - - - - 1,177
---------- --------- ---------- ------ --------- --------
Balances at March 31, 1997 11,119,681 $ 111 17,293,578 $ 173 $ 166,975 $ 7,712
========== ========= ========== ====== ========= ========
<CAPTION>
Treasury stock Total
------------------- stockholders'
Shares Amount equity
--------- --------- --------------
<S> <C> <C> <C>
Balances at December 31, 1995 - $ - $ 74,553
Public offering, net of issuance
costs of $5,826 - - 94,174
Exercise of stock options - - 95
Employee and non-employee director
stock purchase plans - - 290
Treasury shares purchased 600,000 (8,864) (8,864)
Net income - - 4,682
------- -------- ---------
Balances at December 31, 1996 600,000 $ (8,864) $ 164,930
Net income - - 1,177
------- -------- ---------
Balances at March 31, 1997 600,000 $ (8,864) $ 166,107
======= ======== =========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
I - 3
<PAGE> 6
PALMER WIRELESS, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
($ in thousands)
(Unaudited)
<TABLE>
<CAPTION>
FOR THE THREE MONTHS
ENDED MARCH 31,
------------------------------
1996 1997
---------- -------------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 76 $ 1,177
---------- -------------
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 5,898 7,553
Minority interest share of income 452 331
Deferred income taxes 41 1,224
Loss on disposal of property - 5
Interest deferred and added to long-term debt 187 -
Payment of deferred interest - (1,514)
Decrease in trade accounts receivable 50 1,730
Decrease in inventory 378 1,223
Increase in accounts payable and accrued expenses 40 1,252
Change in other accounts (343) (651)
---------- -------------
Total adjustments $ 6,703 $ 11,153
---------- -------------
Net cash provided by operating activities $ 6,779 $ 12,330
---------- -------------
Cash flows from investing activities:
Capital expenditures (6,618) (16,987)
Proceeds from sales of property and equipment - 12
Purchase of cellular systems - (31,096)
Collection of purchase price adjustment 2,452 -
Purchases of minority interests (1,224) (368)
Increase in other intangible assets and other assets (2,247) (48)
---------- -------------
Net cash used in investing activities $ (7,637) $ (48,487)
---------- -------------
Cash flows from financing activities:
Increase in short-term notes payable - 1,332
Repayment of long-term debt (25) (3,782)
Proceeds from long-term debt 2,000 39,000
---------- -------------
Net cash provided by financing activities $ 1,975 $ 36,550
---------- -------------
Net increase in cash and cash equivalents $ 1,117 $ 393
Cash and cash equivalents at the beginning of period 3,436 1,698
---------- -------------
Cash and cash equivalents at the end of period $ 4,553 $ 2,091
========== =============
Supplemental disclosure of cash flow information:
Income taxes paid (received), net $ 67 $ (648)
========== =============
Interest paid $ 7,033 $ 8,615
========== =============
</TABLE>
See accompanying notes to condensed consolidated financial statements.
I - 4
<PAGE> 7
PALMER WIRELESS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS ($ IN THOUSANDS)
(UNAUDITED)
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
The accompanying condensed consolidated financial statements of Palmer
Wireless, Inc. and subsidiaries (the "Company") have been prepared without
audit pursuant to Rule 10-01 of Regulation S-X of the Securities and Exchange
Commission. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financials. In the opinion of management, all adjustments (none of which were
other than normal recurring items) considered necessary for a fair presentation
have been included. The results of operations for the interim periods reported
are not necessarily indicative of results to be expected for the year.
The computation of net income per share is based on the weighted
average number of common and, as appropriate, dilutive common equivalent shares
(common stock options using the treasury stock method) outstanding during the
periods presented.
RECLASSIFICATIONS
Certain reclassifications have been made to the 1996 Statement of
Operations to conform to the 1997 presentation.
(2) ACQUISITION AND PURCHASE OF LICENSE
On February 1, 1997, one of the Company's majority-owned subsidiaries
acquired the assets of and license to operate the non-wireline cellular
telephone system serving the Georgia Rural Service Area Market No. 383,
otherwise known as Georgia-13 RSA for a total purchase price of $31,096.
I - 5
<PAGE> 8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
OVERVIEW
Palmer Wireless, Inc. ("Company") is engaged in the construction,
development, management and operation of cellular telephone systems in the
southeastern United States. As of March 31, 1997, the Company provided
cellular telephone service to 310,823 subscribers in Alabama, Florida, Georgia,
and South Carolina in a total of 18 licensed service areas, composed of nine
Metropolitan Service Areas ("MSAs") and nine Rural Service Areas ("RSAs"), with
an aggregate estimated population of 3.9 million. The Company sells its
cellular telephone service as well as a full line of cellular products and
accessories principally through its network of retail stores. The Company
markets all of its products and services under the nationally-recognized
service mark CELLULAR ONE.
MARKET OWNERSHIP
The following is a summary of the Company's ownership interest in the
cellular telephone system in each licensed service area to which the Company
provided service at December 31, 1996 and March 31, 1997.
<TABLE>
<CAPTION>
December 31, March 31,
Cellular Service Area 1996 1997
--------------------- ---- ----
<S> <C> <C>
Albany,Georgia................................................. 82.7% 82.7%
Augusta, Georgia............................................... 100.0 100.0
Columbus, Georgia.............................................. 84.9 84.9
Macon, Georgia................................................. 99.1 99.1
Savannah, Georgia.............................................. 98.5 98.5
Dothan, Alabama................................................ 92.3 92.5
Montgomery, Alabama............................................ 91.9 92.3
Georgia 1 - RSA................................................ 100.0 100.0
Georgia 6 - RSA................................................ 94.8 94.8
Georgia 7 - RSA................................................ 100.0 100.0
Georgia 8 - RSA................................................ 100.0 100.0
Georgia 9 - RSA................................................ 100.0 100.0
Georgia 10 - RSA............................................... 100.0 100.0
Georgia 12 - RSA............................................... 100.0 100.0
Georgia 13 - RSA............................................... N/A 82.7
Alabama 8 - RSA................................................ 100.0 100.0
Fort Myers, Florida............................................ 99.0 99.0
Panama City, Florida........................................ 77.9 78.4
</TABLE>
On February 1, 1997, one of the Company's majority-owned subsidiaries
acquired the assets of and the license to operate the non-wireline cellular
telephone system serving Georgia Rural Service Area Market No. 383, otherwise
known as Georgia-13 RSA for a total purchase price of $31.1 million, subject to
certain adjustments.
I - 6
<PAGE> 9
RESULTS OF OPERATIONS
The following table sets forth for the Company, for the periods
indicated, the percentage which certain amounts bear to total revenue.
<TABLE>
<CAPTION>
Three Months Ended
March 31,
------------------
1996 1997
---- ----
<S> <C> <C>
REVENUE:
Service..................................................... 94.5% 94.5%
Equipment sales and installation............................ 5.5 5.5
------ ------
TOTAL REVENUE....................................... 100.0 100.0
OPERATING EXPENSES:
Engineering, technical and other direct:
Engineering and technical (1)....................... 9.0 7.9
Other direct costs of services (2).................. 11.8 8.7
Cost of equipment (3)....................................... 10.6 13.0
Selling, general and administrative:
Sales and marketing (4)............................. 8.6 8.6
Customer service (5)................................ 5.8 6.7
General and administrative (6)...................... 15.2 14.6
Depreciation and amortization............................... 16.0 16.9
---- ----
TOTAL OPERATING EXPENSES............................ 77.0 76.4
Operating income............................................ 23.0% 23.6%
Operating income before depreciation
and amortization (7)................................... 39.0% 40.5%
- -----------------
</TABLE>
(1) Consists of costs of cellular telephone network, including inter-trunk
costs, span-line costs, cell site repairs and maintenance, cell site
utilities, cell site rent, engineers' salaries and benefits and other
operational costs.
(2) Consists of net costs of roaming, costs of long distance, costs of
interconnection with wireline telephone companies and other costs of
services.
(3) Consists primarily of the costs of the cellular telephones and
accessories sold.
(4) Consists primarily of salaries and benefits of sales and marketing
personnel, employee and agent commissions and advertising and
promotional expenses.
(5) Consists primarily of salaries and benefits of customer service
personnel and costs of printing and mailing billings generated
in-house.
(6) Includes salaries and benefits of general and administrative personnel
and other overhead expenses.
(7) Operating income before depreciation and amortization should not be
considered in isolation or as an alternative to net income, operating
income or any other measure of performance under generally accepted
accounting principles. The Company believes that operating income
before depreciation and amortization is viewed as a relevant
supplemental measure of performance in the cellular telephone industry.
I - 7
<PAGE> 10
THREE MONTHS ENDED MARCH 31, 1997 COMPARED TO THREE MONTHS ENDED MARCH 31, 1996
REVENUE. Service revenues totaled $42.2 million for the first quarter
of 1997, an increase of 20.9% over $34.9 million for the first quarter of 1996.
This increase was primarily due to a 34.4% increase in the average number of
subscribers to 295,320 for the first quarter of 1997 versus 219,693 for the
first quarter of 1996. The increase in subscribers is the result of internal
growth, which the Company attributes primarily to its strong sales and
marketing efforts, and recent acquisitions.
Average monthly revenue per subscriber decreased 11.2% to $47.70 for
the first quarter of 1997 from $53.73 for the first quarter of 1996. This is
in part due to the trend, common in the cellular telephone industry, where, on
average, new subscribers are using less airtime than existing subscribers.
Therefore, service revenues generally do not increase proportionately with the
increase in subscribers. In addition, the decline reflects more competitive
rate plans introduced into the Company's markets.
Equipment sales and installation revenue, which consists primarily of
cellular subscriber equipment sales, increased by 21.0% to $2.5 million for the
first quarter of 1997 compared to $2.0 million for the first quarter of 1996.
The increase is due to the 28.8% increase in gross subscriber activations in
the first quarter of 1997 compared to 1996. As a percentage of revenue,
equipment sales and installation revenue remained flat at 5.5% for the first
quarter of 1997 and 1996.
OPERATING EXPENSES. Engineering and technical expenses increased by
7.1% to $3.5 million for the first quarter of 1997 from $3.3 million in the
first quarter of 1996, due primarily to the increase in subscribers and
recent acquisitions. As a percentage of revenue, engineering and technical
expenses decreased to 7.9% from 9.0% for the first quarter of 1997 and 1996,
respectively. The Company expects engineering and technical expenses to
decrease as a percentage of revenue due to its large component of fixed costs.
There can be no assurance, however, that this forward-looking statement will not
differ materially from actual results due to unforeseen engineering and
technical expenses.
Other direct costs of services decreased to $3.9 million for the first
quarter of 1997 from $4.4 million for the first quarter of 1996 reflecting the
decrease in interconnection costs as a result of the Company's renegotiation of
interconnection agreements with the local exchange carriers ("LECs") in most of
the Company's markets. As a percentage of revenue, these costs of service
declined to 8.7% from 11.8%, reflecting improved interconnection agreements
with LECs, as well as efficiencies gained from the growing subscriber base.
The cost of equipment increased 47.7% to $5.8 million for the first
quarter of 1997 from $3.9 million for the first quarter of 1996, due primarily
to the increase in gross subscriber activations for the same period. The
equipment sales margin decreased to (135.8%) for the first quarter of 1997 from
(93.2%) for the first quarter of 1996. In an effort to address market
competition and improve market share, the Company sold more telephones
below cost in the first quarter of 1997, on average, than in the same period of
1996.
Sales and marketing costs increased 21.1% to $3.9 million for the
first quarter of 1997 from $3.2 million for the same period in 1996. This
increase is primarily due to the 28.8% increase in gross subscriber activations
and the resulting increase in commissions. As a percentage of total revenue,
sales and marketing costs remained flat at 8.6% for the first quarter of 1997
and 1996. The Company's cost to add a net subscriber, including loss on
telephone sales, increased to $476 for the first quarter of 1997 from $357 for
the first quarter of 1996. This increase in cost to add a net subscriber was
caused primarily by increased losses from the Company's sales of cellular
telephones and an increase in commissions.
Customer service costs increased 40.2% to $3.0 million for the first
quarter of 1997 from $2.1 million for the first quarter of 1996. As a
percentage of revenue, customer service costs increased to 6.7% from 5.8% for
the first quarter of 1997 and 1996, respectively. The increase was due
primarily to higher costs for billing support services.
I - 8
<PAGE> 11
General and administrative expenditures increased 16.2% to $6.5
million for the first quarter of 1997 from $5.6 million for the first quarter
of 1996, due primarily to the increase in the costs associated with supporting
recent acquisitions. General and administrative expenses decreased as a
percentage of revenue to 14.6% in the first quarter of 1997 from 15.2% in the
first quarter of 1996. As the Company continues to add more subscribers, and
generates associated revenue, general and administrative expenses should
decrease as a percentage of total revenues. There can be no assurance,
however, that this forward-looking statement will not differ materially from
actual results due to unforeseen general and administrative expenses and other
factors.
Depreciation and amortization increased 28.1% to $7.6 million for the
first quarter of 1997 from $5.9 million for the first quarter of 1996. This
increase was primarily due to the depreciation and amortization associated with
recent acquisitions and additional capital expenditures. As a percentage
of revenue, depreciation and amortization remained relatively flat at 16.9% and
16.0% for the first quarter of 1997 and 1996, respectively.
Operating income increased 23.7% to $10.5 million in the first quarter
of 1997, from $8.5 million for the first quarter of 1996. This improvement in
operating results is attributable primarily to increases in revenue which
exceeded increases in operating expenses.
NET INTEREST EXPENSE, INCOME TAXES AND NET INCOME. Net interest
expense remained flat at $7.9 million for the first quarter of 1997 and 1996.
Income tax expense was $1.2 million in the first quarter of 1997 due
primarily to the increase in income before income taxes. Income tax expense
was immaterial in the first quarter of 1996.
Net income for the first quarter of 1997 was $1.2 million, or $0.04
per share, compared to net income of $0.1 million, or $0.00 per share, for the
first quarter of 1996. The increase in net income is primarily attributable to
increases in revenue which exceeded increases in operating expenses and income
tax expense.
LIQUIDITY AND CAPITAL RESOURCES
The Company's long-term capital requirements consist of funds for
capital expenditures, acquisitions and debt service. Historically, the Company
has met its capital requirements primarily through equity contributions, bank
debt, and, to a lesser extent, operating cash flow.
The Company currently has a $500.0 million revolving credit facility
with a syndicate of 20 banks ("Credit Facility"). The Credit Facility is a
revolving line of credit with scheduled commitment reductions commencing
September 30, 1998. Interest rates under the Credit Facility range from .25%
over prime or 1.5% over the London Inter Bank Offered Rate ("LIBOR") to 1.25%
over prime or 2.5% over LIBOR depending upon the Company's leverage ratio. The
Company has entered into ten interest rate swap agreements and four interest
rate cap agreements for a total notional amount of $295.0 million. Under these
agreements, the maximum interest rate may range from 7.76% to 11.25%. As of
March 31, 1997, the effective interest rate under these agreements ranged from
7.14% to 9.98%.
The Credit Facility is secured by substantially all of the property
and assets of the Company and its subsidiaries. The subsidiaries of the
Company also guarantee all obligations of the Company under the Credit
Facility.
As of March 31, 1997, $376.0 million was outstanding under the Credit
Facility and $124.0 million was available to be borrowed. The Company believes
that operating cash flow and borrowings available under the Credit Facility
will provide sufficient financial resources to satisfy the Company's debt
I - 9
<PAGE> 12
service requirements and to meet the Company's currently anticipated capital
and other expenditure requirements over at least the next two to three years.
However, there can be no assurance that the Company will not require future
financing or that, if so required, such financing will be available, or, if
available, that the terms thereof will be attractive to the Company.
Any acquisitions by the Company of ownership interests in cellular
telephone systems may be for cash, securities or a combination of cash and
securities. To the extent that the Company uses cash for all or a part of any
such acquisitions, it expects to raise such cash from borrowings under the
Credit Facility or, if feasible and attractive, issuance of Class A Common
Stock.
INFLATION
The Company believes that inflation affects its business no more than
it generally affects other similar businesses.
I - 10
<PAGE> 13
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) Exhibits
<TABLE>
<CAPTION>
Exhibit
Number Description
------ ------------
<S> <C>
11 Computation of Earnings Per Share
27 Financial Data Schedule
</TABLE>
(b) Reports on Form 8-K
The Registrant filed a Current Report on Form 8-K on February 14,
1997, to report that its wholly-owned subsidiary, Cellular Dynamics Telephone
Company of Georgia, had acquired the cellular telephone system serving the
Georgia-13 Rural Service Area (Market No. 383) from Mobile Communications
Systems, L.P. for a total cash purchase price of $30.0 million, subject to
certain adjustments.
II - 1
<PAGE> 14
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of
1934, the registrant has fully caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
PALMER WIRELESS, INC.
Date: May 15, 1997 By: /s/ William J. Ryan
-------------------------------
William J. Ryan
President and
Chief Executive Officer
Date: May 15, 1997 By: /s/ M. Wayne Wisehart
------------------------------
M. Wayne Wisehart
Vice President, Treasurer
and Chief Financial Officer
II - 2
<PAGE> 15
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit
Number Description Numbered Page
- ------ ----------- -------------
<S> <C>
11 Computation of Earnings Per Share.................................
27 Financial Data Schedule ...........................................
</TABLE>
<PAGE> 1
EXHIBIT 11
PALMER WIRELESS, INC. AND SUBSIDIARIES
COMPUTATION OF EARNINGS PER SHARE
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31,
----------------------------
1996 1997
---- ----
<S> <C> <C>
Number of shares of common stock
outstanding at beginning of the period 23,389 27,813
Weighted average number of shares of common
stock from stock options using the treasury
stock method 173 -
------ ------
Weighted average number of shares of common
stock outstanding during the period 23,562 27,813
====== ======
Net income $ 76 $ 1,177
========= =======
Earnings per common share $ 0.00 $ 0.04
========= =======
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 2,091
<SECURITIES> 0
<RECEIVABLES> 17,819
<ALLOWANCES> 0
<INVENTORY> 4,043
<CURRENT-ASSETS> 30,131
<PP&E> 148,121
<DEPRECIATION> 0
<TOTAL-ASSETS> 589,566
<CURRENT-LIABILITIES> 27,849
<BONDS> 376,000
0
0
<COMMON> 284
<OTHER-SE> 165,823
<TOTAL-LIABILITY-AND-EQUITY> 589,566
<SALES> 2,463
<TOTAL-REVENUES> 44,683
<CGS> 5,807
<TOTAL-COSTS> 13,237
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 7,872
<INCOME-PRETAX> 2,401
<INCOME-TAX> 1,224
<INCOME-CONTINUING> 1,177
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,177
<EPS-PRIMARY> .04
<EPS-DILUTED> .04
</TABLE>
