UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER 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, 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 0-24924
THE ASSOCIATED GROUP, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 51-0260858
(State of Incorporation) (I.R.S. Employer
Identification No.)
200 Gateway Towers, Pittsburgh, Pennsylvania 15222
(Address of principal executive offices) (Zip Code)
412-281-1907
(Registrant's telephone number)
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 each of the issuer's classes of
common stock, as of May 12, 1997:
Common Stock, Class A 9,382,962
Common Stock, Class B 9,398,410
PART I--FINANCIAL INFORMATION
Item 1. Financial Statements
THE ASSOCIATED GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
<TABLE>
<CAPTION>
March 31, December 31,
1997 1996
----------------------------------
(amounts in thousands)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents (approximates fair value) $ 2,802 $ 3,341
Accounts receivable, less allowance for
doubtful accounts (March 31, 1997--$2,470,000;
December 31, 1996--$2,355,000) 4,604 4,103
Notes receivable from related parties 206 203
Inventory held for resale 1,630 1,622
Prepaid expenses and other assets 1,188 651
Deferred income taxes 2,011 2,008
--------------- ------------
Total current assets 12,441 11,928
Property and equipment, net of accumulated
depreciation and amortization (March 31, 1997--
$26,052,000; December 31,
1996--$24,952,000) 28,121 27,513
Marketable equity securities, at fair value
(cost: March 31, 1997--$7,627,000;
December 31, 1996--$6,882,000) 405,508 425,895
Notes receivable from related parties 28,798 28,780
Investments in wireless communications affiliates 16,505 16,108
Other noncurrent assets 14,090 8,710
--------------- ------------
Total assets $ 505,463 $ 518,934
=============== ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 6,537 $ 7,716
Employee compensation 6,051 4,753
Due to cellular equipment vendor 15,069 15,069
Short-term obligations 94,236 77,526
Current portion of long-term debt 2,082 2,082
Other current liabilities 1,925 1,004
------------ --------
Total current liabilities 125,900 108,150
Deferred compensation 1,680 1,440
Long-term debt, excluding current portion 8,156 8,326
Deferred income taxes 117,322 127,183
Minority interests 4,918 7,830
Commitments and contingencies - -
Stockholders' equity:
Preferred stock, par value $.01 per share;
authorized 5,000,000 shares; none issued - -
Class A Common Stock, par value $.10 per share;
authorized 100,000,000 shares; 9,382,962 issued
and outstanding in 1997 and 1996 938 938
Class B Common Stock, par value $.10 per share;
authorized 50,000,000 shares; 9,398,410 and
9,397,910 issued and outstanding in 1997 and 1996 940 940
Additional paid-in capital 20 12
Unrealized gain on marketable equity securities,
net of deferred taxes (March 31, 1997--$139,258,000;
December 31, 1996--$146,654,000) 258,624 272,359
Retained earnings (deficit) (13,035) (8,244)
------------ -------------
Total stockholders' equity 247,487 266,005
------------ -------------
Total liabilities and stockholders' equity $ 505,463 $ 518,934
============ =============
See notes to consolidated financial statements
</TABLE>
THE ASSOCIATED GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended March 31,
1997 1996
--------------------------------------------
(amounts in thousands, except
share and per share amounts)
<S> <C> <C>
Revenues:
Wireless communication services $ 4,808 $ 3,962
Radio broadcasting 645 342
Art gallery 189 132
------------- ------------
5,642 4,436
Costs and expenses:
Cost of sales and services:
Wireless communication services 2,773 2,098
Radio broadcasting 186 165
Art gallery 128 96
Direct research and development expenses 1,577 1,543
Sales, general and administrative expenses 10,915 4,173
Depreciation and amortization expense 1,332 1,268
------------- -----------
16,911 9,343
------------- -----------
Operating loss (11,269) (4,907)
Equity in loss of affiliate - (327)
Other income (expense):
Gain on sale of marketable equity securities 2,223 2,678
Interest and dividend income 524 696
Interest expense (1,566) (1,194)
Other 32 (200)
Minority interests 2,922 850
------------- -------------
4,135 2,830
------------- --------------
Loss before income taxes (7,134) (2,404)
Income tax benefit 2,343 815
------------- --------------
Net loss $ (4,791) $ (1,589)
============= ==============
Net loss per common share $ (.26) $ (.08)
============== ===============
Weighted average common shares outstanding 18,781,122 18,765,947
See notes to consolidated financial statements
</TABLE>
THE ASSOCIATED GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended March 31,
1997 1996
-------------------------------------
(amounts in thousands)
<S> <C> <C>
Cash Flows From Operating Activities
Net loss $ (4,791) $ (1,589)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization 1,332 1,268
Provision for losses on accounts receivable 266 282
Equity in loss of affiliate - 327
Gain on sale of marketable equity securities (2,223) (2,678)
Minority interests (2,922) (850)
Provision for deferred income taxes (2,468) (865)
Other 546 -
Change in assets and liabilities:
Accounts receivable (767) (669)
Notes receivable from related parties (133) -
Inventory held for resale (8) 50
Prepaid expenses and other assets (537) 139
Accounts payable (1,179) (2,836)
Employee compensation 1,298 (523)
Other current liabilities 921 339
Deferred compensation 240 20
------------- -------------
Net Cash Used In Operating Activities (10,425) (7,585)
Cash Flows From Investing Activities
Cash and cash equivalents from consolidation of affiliate - 751
Purchases of property and equipment (1,712) (163)
Proceeds from sale of marketable equity securities 2,245 2,690
Purchase of marketable equity securities (767) -
Increase in notes receivable from related parties (458) (815)
Investments in wireless communications affiliates (397) (1,596)
Payment relating to acquisition of wireless
communications business (Note 2) (5,570) -
Other investing activities, net (13) (403)
------------- -------------
Net Cash (Used In) Provided By Investing Activities (6,672) 464
Cash Flows From Financing Activities
Proceeds from short-term obligations, net 16,710 6,420
Increase in due to cellular equipment vendor - 346
Repayment of long-term debt (170) (170)
Investment by minority interests - 987
Other financing activities, net 18 -
------------- -------------
Net Cash Provided By Financing Activities 16,558 7,583
------------- -------------
Net (Decrease) Increase In Cash And Cash Equivalents (539) 462
Cash And Cash Equivalents At Beginning Of Period 3,341 1,018
------------- -------------
Cash And Cash Equivalents At End Of Period $ 2,802 $ 1,480
============= =============
See notes to consolidated financial statements
</TABLE>
THE ASSOCIATED GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
1. BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements of The
Associated Group, Inc. and Subsidiaries (the "Company," as used herein,
includes all consolidated subsidiaries, unless the context otherwise
indicates) have been prepared in accordance with generally accepted
accounting principles for interim financial information and with the
instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly,
they do not include all of the information and footnotes required by
generally accepted accounting principles for complete financial statements.
In the opinion of management, all adjustments (consisting of normal
recurring accruals) considered necessary for a fair presentation have been
included. Operating results for the three months ended March 31, 1997, are
not necessarily indicative of the results that may be expected for the year
ended December 31, 1997. For further information, refer to the financial
statements and footnotes thereto included in the Company's Annual Report on
Form 10-K for the year ended December 31, 1996.
Certain amounts in the financial statements for the 1996 periods have been
reclassified to conform to the financial statement presentation for the
current period. These reclassifications have no effect on the net loss.
2. PENDING TRANSACTION
Microwave Services, Inc. ("MSI"), a wholly owned subsidiary of the Company
and a licensee of Digital Electronic Message Services ("DEMS") channels,
and Digital Services Corporation ("DSC"), another licensee of DEMS
channels, hold 55% and 45% voting member equity interests, respectively, in
Associated Communications, L.L.C. ("ACOM"), a joint venture limited
liability company which provides administrative and management services to
each of MSI and DSC. On March 10, 1997, ACOM entered into a Stock
Contribution Agreement (the "Stock Agreement") with another DEMS licensee
(the "Licensee") and its sole shareholder (the "Sole Shareholder") for the
contribution of all of the stock of the Licensee to ACOM in exchange for an
initial cash payment and additional cash payments and ownership interests
in ACOM upon consummation of the transactions and ACOM's acquisition of the
stock and the licenses contemplated by the Stock Agreement. Consummation of
the transactions and transfer of these licenses is subject to certain
closing conditions and the receipt of all necessary regulatory approvals,
including approval by the Federal Communications Commission. The amount of
equity interest in ACOM to be issued to the Sole Shareholder is dependent
upon certain conditions, but shall not exceed 5% determined as of the date
of the Stock Agreement. Subsequent to a closing, the Sole Shareholder will
have a full member interest in ACOM pursuant to the Limited Liability
Company Agreement, to which MSI and DSC are parties. Included in other
noncurrent assets on the Company's consolidated balance sheet at March 31,
1997 is a payment of $5,570,000 relating to the transaction.
3. MARKETABLE EQUITY SECURITIES
In January 1997, the board of directors of Tele-Communications, Inc.
("TCI") declared a dividend to holders of record of Liberty Media Group
Series A Common Stock ("Liberty Series A") and Liberty Media Group Series B
Common Stock ("Liberty Series B") as of December 27, 1996. In 1997, the
Company received one share of Liberty Series A for every two shares of
Liberty Series A owned and one share of Liberty Series A for every two
shares of Liberty Series B owned.
In the first quarter of 1997, the Company sold 100,000 shares of Liberty
Series A for pretax proceeds of approximately $2,245,000, and has
recognized a gain on the sale of approximately $2,223,000.
The cost and market value of marketable equity securities classified as
available for sale at March 31, 1997, are as follows:
<TABLE>
<CAPTION>
Cost of Market Value of
Name of Issuer and Number of Each Issue Each Issue
Title of Each Issue Shares In Thousands In Thousands
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Tele-Communications, Inc.:
TCI Group Series A Common Stock 12,479,976 $ 3,505 $149,760
TCI Group Series B Common Stock 7,071,852 1,178 90,166
Liberty Media Group Series A Common Stock 5,463,970 1,344 108,938
Liberty Media Group Series B Common Stock 1,767,963 273 37,127
TCI Satellite Entertainment, Inc.:
Series A Common Stock 1,247,997 334 9,672
Series B Common Stock 707,185 90 5,657
Others Various 903 4,188
--------------------------------
$ 7,627 $405,508
===============================
</TABLE>
Including the effects of the sale of marketable equity securities during
the periods, the adjustment to the unrealized gain on marketable equity
securities, net of tax, recorded as a separate component of stockholders'
equity was a decrease of $13,735,000 and $26,641,000 in the three months
ended March 31, 1997 and 1996, respectively.
4. SHORT-TERM OBLIGATIONS
As of March 31, 1997, the Company's outstanding short-term obligations were
as follows (in thousands):
General Credit Facilities:
$100 million demand discretionary bank line of credit $19,000
Three brokerage margin loan facilities 61,736
---------
80,736
ACOM Credit Facility:
$50 million secured bank revolving credit facility 13,500
---------
$94,236
=========
Included in the general credit facilities listed above is a brokerage
margin loan facility secured by the Company in January 1997. At March 31,
1997, an aggregate of 10,899,980 shares of TCI Group Series A Common Stock
was pledged as collateral under the Company's general credit facilities.
Subsequent to March 31, 1997 and through May 12, 1997, an additional
979,996 shares of TCI Group Series A Common Stock were pledged, increasing
the total number of shares pledged to 11,879,976.
5. SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid for interest was approximately $472,000 and $380,000 for the
three months ended March 31, 1997 and 1996, respectively. The Company made
no federal and state income tax payments during the three months ended
March 31, 1997 and 1996. Grupo Portatel, S.A. de C.V. ("Grupo"), a
consolidated subsidiary of the Company, paid approximately $127,000 and
$158,000 in Mexican taxes in the three months ended March 31, 1997 and
1996, respectively. Noncash financing activities of the Company for the
three months ended March 31, 1996 include a contribution by minority
interests of notes receivable from related parties of $7,162,000 and
long-term debt of $2,845,000 assumed by a cellular equipment vendor, as
guarantor of Grupo's long-term debt.
6. PER SHARE DATA
Weighted average common shares outstanding do not include common stock
equivalents since their effect on the net loss per common share would be
antidilutive.
In February 1997, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 128, "Earnings Per Share" ("FASB
128"). FASB 128 specifies the computation, presentation and disclosure
requirements for earnings per share. FASB 128 is effective for financial
statements issued for periods ending after December 15, 1997, including
interim periods, and requires restatement of all prior-period per share
data presented. Earlier application is not permitted. The Company plans to
adopt FASB 128 at year-end 1997. The implementation of FASB 128 is not
expected to have a material impact on the reported per share data of the
Company.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
This Form 10-Q contains certain forward looking statements about
the Company's completion of pending transactions and availability of
certain tax benefits. Any such statements are subject to risks that could
cause the actual results or needs to vary materially.
Financial Condition
Currently, the Company's cash requirements are being met by a
$100,000,000 demand discretionary bank line of credit and margin loan
facilities with three brokerage firms. Borrowings under the $100,000,000
line of credit are limited to 65% of the market value of the TCI Group
common stock pledged as security under the agreement, and bear interest at
rates as offered by the bank at the time of borrowing. The line expires on
November 30, 1997, and the Company presently anticipates renewal of such
facility.
The Company's margin loan facilities are also secured by shares
of TCI Group common stock. Borrowings under one of the margin loan
facilities are limited to 65% of the market value of the pledged stock,
with an additional 15% collateral requirement if borrowings exceed
$100,000,000, up to a maximum of $200,000,000. Borrowings under the other
two brokerage margin loan facilities are limited to 50% of the market value
of the pledged stock. Borrowings under the three margin loan facilities
bear interest at variable rates based upon the broker call rate or the Fed
Funds rate plus an applicable margin, as offered by the brokerage firm at
the time of borrowing. The weighted average interest rate under the
$100,000,000 line of credit and the margin loan facilities for the three
months ended March 31, 1997 was approximately 6.2%.
As of May 12, 1997, based on the market value of the 11,879,976
shares of TCI Group Series A Common Stock pledged in the aggregate and
aggregate outstanding short-term obligations under these credit facilities
of approximately $83,555,000, the Company's unused borrowing capacity is
approximately $27,382,000. A significant portion of the Company's assets
are liquid, and can be pledged as security for added borrowing capacity.
Given the market value of the remaining shares of marketable equity
securities that can be pledged as additional security, the Company's
borrowing facilities provide for maximum aggregate unused borrowings of
approximately $188,165,000 as of May 12, 1997. The Company's ability to
meet cash needs in the near term for future development depends in large
part on the value of the marketable equity securities. The Company
periodically evaluates its financial position and alternative financing
arrangements.
In addition, ACOM has a $50,000,000 secured bank revolving credit
facility which is available to meet the cash needs of ACOM. Borrowings
under this credit facility bear interest at variable rates based upon the
LIBOR rate, prime rate or the Fed Funds rate, plus an applicable margin, as
offered by the bank. The weighted average interest rate under this credit
facility for the three months ended March 31, 1997 was approximately 8.5%.
A facility fee of 1/2% of the total credit available and a commitment fee
of 1/2% of the unused portion of the facility are payable quarterly.
Borrowings under ACOM's credit facility are secured by a pledge of the
Company's stock in MSI, a pledge of the stock of DSC, a pledge of MSI's and
DSC's member interests in ACOM, and a pledge of all of the assets of MSI,
DSC, and ACOM, and are guaranteed by MSI and DSC. The revolving credit
facility restricts the payment of distributions or dividends by ACOM. Based
upon outstanding short-term obligations under the ACOM credit facility of
approximately $19,000,000 as of May 12, 1997, ACOM has unused borrowing
capacity of approximately $31,000,000. The revolving credit facility
matures on December 19, 1997, and ACOM is presently evaluating its
long-term financing options.
In the first quarter of 1997, the Company sold 100,000 shares of
Liberty Series A for pretax proceeds of approximately $2,245,000, and has
recognized a gain on the sale of approximately $2,223,000. The Company
expects to utilize its net operating loss carryforwards to offset the taxes
resulting from the gain. The Company used the proceeds from the sale of the
securities for working capital and to fund the development of its wireless
communications businesses.
Portatel del Sureste, S.A. de C.V. ("Portatel"), a wholly owned
subsidiary of Grupo, has long-term debt obligations under various credit
facilities with a U.S. bank and various related parties (the "Portatel
Credit Agreements"). Such long-term obligations are denominated in U.S.
dollars and were incurred for working capital, including the purchase and
construction of cellular telephone infrastructure equipment. The
outstanding debt under the Portatel Credit Agreements at March 31, 1997 is
$10,238,000. Grupo and Portatel have no external available lines of credit
as of March 31, 1997. The Company may be required to meet additional
capital requirements with respect to its ownership interest in Grupo.
In March 1997, pursuant to the Stock Agreement, ACOM made a
payment of $5,570,000 (see Note 2 to the consolidated financial statements
included elsewhere herein). Upon consummation of the transactions
contemplated by the Stock Agreement, ACOM will be required to make an
additional cash payment of up to $5,000,000.
Net cash used in operating activities was $10,425,000 and
$7,585,000 for the three months ended March 31, 1997 and 1996,
respectively. The Company's operating cash needs increased in the 1997
period primarily for expenses of ACOM, which was formed in March 1996. Net
cash used in investing activities was $6,672,000 for the three months ended
March 31, 1997 and net cash provided by investing activities was $464,000
for the three months ended March 31, 1996. The $7,136,000 change between
periods was primarily due to $5,570,000 paid pursuant to the Stock
Agreement (see Note 2 to the consolidated financial statements included
elsewhere herein) and $1,712,000 in capital expenditures made primarily for
the construction of the ACOM broadband wireless network. The Company's
borrowings comprise most of the net cash provided by financing activities
in the 1997 and 1996 periods of $16,558,000 and $7,583,000, respectively.
The increase between periods is primarily the result of higher borrowings
in the 1997 period principally to finance the investing and operating
activities of ACOM and TruePosition(TM), the Company's cellular telephone
and wireless transmitter location system.
Operating Results for the Three Months Ended March 31, 1997, Compared to
the Three Months Ended March 31, 1996
Revenues from wireless communication services increased $846,000,
or 21% in the 1997 period compared to the 1996 period. The majority of the
increase is attributable to an increase in Grupo's cellular communication
services revenue, principally a result of growth in Grupo's subscriber
base. Cost of wireless communication services increased $675,000, or 32%
between periods principally due to the costs associated with the growth of
Grupo's subscriber base and to operating costs incurred by ACOM, which
began providing wireless communications services in mid-1996.
Radio broadcasting revenues increased $303,000, or 89% for the
1997 period compared to the 1996 period, and the cost of radio broadcasting
increased $21,000, or 13%. The increase in revenues and costs is
principally the result of the acquisition of WLYR-FM (formerly known as
WCEZ-FM) in the second quarter of 1996.
Direct research and development expenses of $1,577,000 and
$1,543,000 in the 1997 and 1996 periods, respectively, are comparable
between periods and primarily represent expenditures for TruePosition.
Sales, general and administrative expenses were $10,915,000 and $4,173,000
in the 1997 and 1996 periods, respectively. The increase from 1996 to 1997
of $6,742,000 was principally the result of expenditures for ACOM, which
was formed in March 1996.
The Company's equity in loss of affiliate was $327,000 in the
1996 period and reflects the Company's share of the results of Teletrac,
Inc. ("Teletrac") for the 1996 period. Through November 1996, the Company
held 20% of the voting stock of Teletrac and accounted for its investment
in Teletrac under the equity method. As a result of Teletrac's issuance of
convertible preferred stock in early December 1996, the Company's voting
interest in Teletrac was reduced to approximately 13% and, accordingly, the
Company began accounting for its investment under the cost method.
The $2,223,000 gain on the sale of marketable equity securities
in the 1997 period is the result of the sale of 100,000 shares of Liberty
Series A and the $2,678,000 gain on the sale of marketable equity
securities in the 1996 period is the result of the sale of 41,598 shares of
TCI Class B 6% Cumulative Redeemable Exchangeable Junior Preferred Stock
("TCI Preferred Stock"). Interest and dividend income was $524,000 and
$696,000 in the 1997 and 1996 periods, respectively. The decrease in 1997
of $172,000 is primarily the result of dividends received on the TCI
Preferred Stock in the first quarter of 1996, prior to the sale of such
shares. Interest expense was $1,566,000 and $1,194,000 in the 1997 and 1996
periods, respectively. The increase in 1997 of $372,000 is the result of an
increase in the level of outstanding short-term obligations, offset by a
decrease in the level of Portatel's long-term debt. Minority interests
increased $2,072,000 in the 1997 period over the 1996 period, reflecting
the 45% outside ownership interest in ACOM, which, as noted above, incurred
higher costs in the 1997 period compared to the 1996 period.
The Company recognized an income tax benefit (net of foreign tax
expense of Grupo) at an effective rate of approximately 33% and 34% in the
1997 and 1996 periods, respectively. The tax benefit recorded for the three
months ended March 31, 1997 includes approximately $2,332,000 of net
operating loss. Based on current projections, the Company anticipates it
will generate a net operating loss for federal income taxes for the year
ended December 31, 1997.
The Company's net loss was $4,791,000 for the three months ended
March 31, 1997, compared to a net loss of $1,589,000 for the three months
ended March 31, 1996. The higher loss in the 1997 period of $3,202,000
resulted primarily from higher expenditures for ACOM, increased interest
expense, and a lower gain on the sale of marketable equity securities in
the 1997 period compared to the 1996 period.
PART II--OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits. The following exhibits are filed as part of this
Form 10-Q:
Exhibit
Number Description
3.1 Restated Certificate of Incorporation,
filed as Exhibit 3.1 to Registration
Statement on Form 10/A dated November
15, 1994 and incorporated herein by
reference.
3.2 Amended and Restated By-Laws, filed as
Exhibit 3.2 to Registration Statement
on Form 10/A dated November 15, 1994
and incorporated herein by reference.
4.1 Common Stock Certificates, filed as
Exhibits 4.2 and 4.3 to Form 8-K,
dated December 22, 1994 and
incorporated herein by reference.
4.2 Rights Agreement, dated as of December
15, 1994, by and between the Company
and Mellon Bank, N.A., filed as
Exhibit 4.1 to Form 8-K, dated
December 22, 1994 and incorporated
herein by reference.
27 Article 5 Financial Data Schedule for
Quarterly Report on Form 10-Q for the
quarter ended March 31, 1997 (filed
only electronically with the
Securities and Exchange Commission).
(b) Reports on Form 8-K. The Company did not file any reports on
Form 8-K during the three months ended March 31, 1997.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
THE ASSOCIATED GROUP, INC.
(Registrant)
Date: May 12, 1997 By: /s/ Myles P. Berkman
--------------------
Myles P. Berkman
Chairman, President, Chief Executive Officer
and Treasurer
(Principal Financial and Accounting Officer)
EXHIBIT INDEX
Page Where
Found or
Exhibit Incorporated
Number by Reference
-------- ------------
3.1 Restated Certificate of Incorporation, filed as *
Exhibit 3.1 to Registration Statement on Form 10/A
dated November 15, 1994 and incorporated herein
by reference.
3.2 Amended and Restated By-Laws, filed as Exhibit 3.2 *
to Registration Statement on Form 10/A dated
November 15, 1994 and incorporated herein by
reference.
4.1 Common Stock Certificates, filed as Exhibits 4.2 *
and 4.3 to Form 8-K, dated December 22, 1994 and
incorporated herein by reference.
4.2 Rights Agreement, dated as of December 15, 1994, *
by and between the Company and Mellon Bank, N.A.,
filed as Exhibit 4.1 to Form 8-K, dated December
22, 1994 and incorporated herein by reference.
27 Article 5 Financial Data Schedule for Quarterly **
Report on Form 10-Q for the quarter ended March
31, 1997.
- ------------------------
* Previously filed and incorporated by reference
** Filed only electronically with the Securities and Exchange Commission
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information
extracted from the financial statements of The Associated
Group, Inc. as of and for the three months ended March 31,
1997 included in Form 10-Q for the quarter ending March 31,
1997 and is qualified in its entirety by reference to such
financial statements.
</LEGEND>
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 2,802
<SECURITIES> 0<F1>
<RECEIVABLES> 7,074
<ALLOWANCES> 2,470
<INVENTORY> 1,630
<CURRENT-ASSETS> 12,441
<PP&E> 54,173
<DEPRECIATION> 26,052
<TOTAL-ASSETS> 505,463
<CURRENT-LIABILITIES> 125,900
<BONDS> 8,156
0
0
<COMMON> 1,878
<OTHER-SE> 245,609
<TOTAL-LIABILITY-AND-EQUITY> 505,463
<SALES> 189
<TOTAL-REVENUES> 5,642
<CGS> 128
<TOTAL-COSTS> 3,087
<OTHER-EXPENSES> 2,909
<LOSS-PROVISION> 266
<INTEREST-EXPENSE> 1,566
<INCOME-PRETAX> (7,134)
<INCOME-TAX> (2,343)
<INCOME-CONTINUING> (4,791)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (4,791)
<EPS-PRIMARY> (0.26)
<EPS-DILUTED> 0
<FN>
Does not include $405,508 of noncurrent marketable equity securities.
</FN>
</TABLE>
