-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, SwV5I5svqG9Wd8w5fcyVgPSpeP3eIxlTOfZoDvFJELVRWVMeh3+dtSIPhndfhjO1 iTTvH8hLpFVBYVKJgTBVXQ== 0000904793-04-000010.txt : 20040615 0000904793-04-000010.hdr.sgml : 20040615 20040615142702 ACCESSION NUMBER: 0000904793-04-000010 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 20040615 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: WARWICK VALLEY TELEPHONE CO CENTRAL INDEX KEY: 0000104777 STANDARD INDUSTRIAL CLASSIFICATION: TELEPHONE COMMUNICATIONS (NO RADIO TELEPHONE) [4813] IRS NUMBER: 141160510 STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-79356 FILM NUMBER: 04863866 BUSINESS ADDRESS: STREET 1: 47 49 MAIN ST CITY: WARWICK STATE: NY ZIP: 10990 BUSINESS PHONE: 9149861101 MAIL ADDRESS: STREET 1: 47 49 MAIN ST STREET 2: PO BOX 592 CITY: WARWICK STATE: NY ZIP: 10990 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: SANTA MONICA PARTNERS LP CENTRAL INDEX KEY: 0000904793 IRS NUMBER: 133100474 STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 1865 PALMER AVENUE CITY: LARCHMONT STATE: NY ZIP: 10538 BUSINESS PHONE: 9148330875 MAIL ADDRESS: STREET 1: 1865 PALMER AVENUE CITY: LARCHMONT STATE: NY ZIP: 10538 SC 13D/A 1 wwvy13d4.txt SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 - ---------------- SCHEDULE 13D/A (Rule 13d-101) INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO RULE 13d-2(a) (AMENDMENT No. 4 SCHEDULE 13D) Under the Securities Exchange Act of 1934 WARWICK VALLEY TELEPHONE COMPANY - ----------------------------------------------------------- - --------------------- (Name of Issuer) COMMON STOCK, PAR VALUE $1.00 PER SHARE - ----------------------------------------------------------- - --------------------- (Title of Class of Securities) 936750108 - ----------------------------------------------------------- - --------------------- (CUSIP Number) 1865 Palmer Avenue Larchmont, NY 10538 - ----------------------------------------------------------- - --------------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) SANTA MONICA PARTNERS, L.P. 914-833-0875 - ----------------------------------------------------------- - --------------------- (Date of Event that Requires Filing of This Statement) N/A (Continued on following pages) (Page 1 of 6 Pages) CUSIP No. 936750108 13D/A Page 2 of 6 Pages ___________________________________________________________ _____________ 1 NAME OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) SANTA MONICA PARTNERS, L.P. 13-3100474 ___________________________________________________________ _____________ 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [X] (b) [_] ___________________________________________________________ _____________ 3 SEC USE ONLY ___________________________________________________________ _____________ 4 SOURCE OF FUNDS WC ___________________________________________________________ _____________ 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [_] ___________________________________________________________ _____________ 6 CITIZENSHIP OR PLACE OF ORGANIZATION NEW YORK ___________________________________________________________ _____________ 7 SOLE VOTING POWER NUMBER OF N/A SHARES ___________________________________________________________ _____________ 8 SHARED VOTING POWER BENEFICIALLY N/A OWNED BY ___________________________________________________________ _____________ EACH 9 SOLE DISPOSITIVE POWER CUSIP No. 936750108 13D/A Page 3 of 6 Pages REPORTING N/A PERSON ___________________________________________________________ ______ 10 SHARED DISPOSITIVE POWER WITH N/A ___________________________________________________________ _____________ 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON N/A (LESS THAN 5%) ___________________________________________________________ _____________ 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [_] ___________________________________________________________ _____________ 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) N/A ___________________________________________________________ _____________ 14 TYPE OF REPORTING PERSON PN 1 NAME OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) SMP ASSET MANAGEMENT LLC ___________________________________________________________ _____________ 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [X] (b) [_] ___________________________________________________________ _____________ 3 SEC USE ONLY ___________________________________________________________ _____________ 4 SOURCE OF FUNDS OO ___________________________________________________________ _____________ CUSIP No. 936750108 13D/A Page 4 of 6 Pages 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [_] ___________________________________________________________ _____________ 6 CITIZENSHIP OR PLACE OF ORGANIZATION DELAWARE ___________________________________________________________ _____________ 7 SOLE VOTING POWER NUMBER OF N/A SHARES ___________________________________________________________ _____________ 8 SHARED VOTING POWER BENEFICIALLY N/A OWNED BY ___________________________________________________________ _____________ EACH 9 SOLE DISPOSITIVE POWER REPORTING N/A PERSON ___________________________________________________________ _____________ 10 SHARED DISPOSITIVE POWER WITH N/A ___________________________________________________________ _____________ 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON N/A ___________________________________________________________ _____________ 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [_] ___________________________________________________________ _____________ 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) CUSIP No. 936750108 13D/A Page 5 of 6 Pages ___________________________________________________________ _____________ 14 TYPE OF REPORTING PERSON OO (LLC) The inclusion of SMP Asset Management LLC in this Statement shall not be construed as an admission that such party is, for purposes of Section 13(d) of the Securities Exchange Act of 1934, the beneficial owner of any securities covered by this Statement. WARWICK VALLEY TELEPHONE COMPANY SCHEDULE 13D/A Item 1. Security and Issuer. This statement on Schedule 13D/A (this "Statement") relates to the common stock with $1.00 par value (the "Shares") of Warwick Valley Telephone Company (the "Issuer"). The principal offices of the Issuer are located at 47 Main Street, Warwick, New York 10990. Item 2. Identity and Background. (a) Pursuant to Rule 13d-1(k)(1) promulgated under the Securities Exchange Act of 1934, this Statement is being filed by Santa Monica Partners, L.P., a New York limited partnership ("Santa Monica Partners") 1865 Palmer Avenue, Larchmont, NY 10538. Item 3. Source and Amount of Funds or Other Consideration. N/A Item 4. Purpose of Transaction. On June 15, 2004 Santa Monica Partners wrote a letter to Mr. Marion Lynn Pike, President and CEO, and to the Board of Directors of Warwick Valley Telephone Company (which confusingly calls itself WVT Communications). The letter was titled, "Confusion at Warwick Valley Telephone Company -- Little Things Mean a Lot" which sought answers to various confusing questions that had gone unanswered by Company management. CUSIP No. 936750108 13D/A Page 6 of 6 Pages Item 5. Interest in Securities of the Issuer. (a) -e N/A Less than 5% ownership Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer. None Item 7. Material to be filed as Exhibits. Exhibit 1: Letter to M. Lynn Pike, President & CEO and the Board of Directors. SIGNATURE After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. Dated: June 15, 2004 SANTA MONICA PARTNERS, L.P. By: SMP ASSET MANAGEMENT LLC By: /s/LAWRENCE J. GOLDSTEIN ------------------- - --------------------- Lawrence J. Goldstein, President SMP ASSET MANAGEMENT LLC By: /s/LAWRENCE J. GOLDSTEIN ------------------- - --------------------- Lawrence J. Goldstein, President Attention. Intentional misstatements or omissions of fact constitute federal criminal violations (see 18 U.S.C. 1001). Exhibit 1: June 14, 2004 Mr. Marion Lynn Pike, President/CEO and Members of the Board of Directors Warwick Valley Telephone Company 47 Main Street P.O. Box 592 Warwick, NY 10990 Re: Confusion at Warwick Valley Telephone Company Little Things Mean a Lot Dear Mr. Pike and Members of the Board of Directors: CONFUSION: LITTLE THINGS MEAN A LOT #1 QUESTION: When does a Board of Director's bonus policy of paying one week's salary to executives become a payment of 2.8 times executive's weekly salary? ANSWER: When it is paid to the top corporate officers of Warwick Valley Telephone Company. The following bonus policy was established by the WWVY Board of Directors*. "Employees may be entitled to a cash bonus based on the change in consolidated corporate earnings for the current year as compared with the immediate previous year. The amount of the bonus has traditionally been up to one week's salary and is determined each year by the Board of Directors." *SOURCE: 2004 WWVY PROXY STATEMENT dated April 29, 2004, page 7,following the Chart entitled, "Summary Compensation Table" FACT #1 Consolidated corporate earnings for 2003 were $7,879,000 vs. $7,751,000 in the "immediate previous year," an increase of 1.65%. FACT #2 The bonus to M. Lynn Pike was $11,748, equal to 2.82x his weekly pay (his salary being $216,365 or $4,157/week) and was up from the prior year's bonus by 183.6%. The bonus paid to Mr. Herbert Gareiss was $9,046, equal to 2.78x his weekly salary. (Mr. Gareiss' $169,448 salary divided by 52 weeks = $3,258.62 per week and his bonus thus equaled 2.78 times his weekly salary). His bonus increased 179.36% over his prior year's bonus. CONFUSION: LITTLE THINGS MEAN A LOT #2 QUESTION: When is a 22.6% increase in Net Income a 27% increase? ANSWER: When Warwick Valley Telephone says so. As much as we would like to see it, just because you write it, does not of course, make it so. We fail to see the 27% increase you state. Of course we do see a 22.6% increase. The text in the 10-Q for the period ended 3/31/04 reads as follows: OTHER INCOME (EXPENSE) Other income (expense) increased by $640 or (38%) for the three-month period ended March 31, 2004 from $1,714 in the corresponding period of 2003 primarily due to the increase in income from O-P. The partnership's earnings increased 27% over the comparable period last year. Continuing strong O-P call volume remains the primary factor behind the increase. The Company is a limited partner in Orange County-Poughkeepsie Limited Partnership (O-P) and has a 7.5% investment interest, which is accounted for under the equity method of accounting. The majority owner and general partner is Verizon Wireless of the East L.P. The following summarizes O-P's income statement for the three months ended March 31: ORANGE COUNTY POUGHKEEPSIE CELLULAR PARTNERSHIP (Unaudited) 2004 2003 % Change Net sales $ 37,441 $ 31,687 Service Cost 3,518 5,436 Operating expenses 1,988 602 Net Operating Income 31,935 25,649 Other income 268 616 Net income $ 32,203 $ 26,265 +22.6%* CONFUSION: LITTLE THINGS MEAN A LOT #3 QUESTION: When is a company's name Warwick Valley Telephone Company named WVT Telecommunications? ANSWER: When it is neither found on filings with the SEC now on press releases, but is exclusively on the cover of the Annual Report and in its text. CONFUSION: LITTLE THINGS MEAN A LOT #4 QUESTION: When is the portion of the business growing at 27% (or 22.6%) and producing over 80% of the profits, placing 100% of its free-cash flow in support of a business declining 50% a year and producing less then 20% of profits?* *First quarter 2004 ANSWER: When the former if the OCP investment of Warwick Valley Telephone Company which last year earned a 289% ROE on average equity, $9.1 million in earnings and had EBIDA of $9.5 million and when latter is the operating telephone company whose operating profits declined from $6.7 million in 2001 to $5.267 million in 2002 to $3.372 million in 2003 and in Q1-2004 declined 52% from $1.243 million to $591 thousand. CONFUSION: LITTLE THINGS MEAN A LOT #5 QUESTION: When is maximizing shareholder value not of interest to the Board of Directors? ANSWER: When advisors are found to agree with and support the Board of Director's disinterest in actually increasing shareholder value, and when it prefers to control the substantial cash flow generated by the investments and throw this good money into the bad operating business rather than making more great investments and increasing the dividend paid to shareholders. When it refuses to even discuss the suggestion to spin off the operating business leaving the investments in a company which would raise additional capital through a rights offering, IPO, PIPES or employ other available financial engineering mechanisms. CONFUSION: LITTLE THINGS MEAN A LOT #6 QUESTION: Why is this year different from prior years? ANSWER: In prior years Warwick Valley Telephone has filed a Form ARS (Annual Report) with the SEC in March of each year, however, not in this year. Why? We would appreciate your prompt attention and response in clearing up this confusion. Little things mean a lot. Warmly, Lawrence J. Goldstein President, SMP Asset Management - Santa Monica Partners, LP -----END PRIVACY-ENHANCED MESSAGE-----