-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, mMrpj8uhx4eNWfsVJ/yq/2WlDsHGroV+jkdw4flKDfSDWluPPSAWh4IhxsNExVEJ G/NTj8yVr3RXAhylcVHGBg== 0000104777-95-000018.txt : 19950517 0000104777-95-000018.hdr.sgml : 19950516 ACCESSION NUMBER: 0000104777-95-000018 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950331 FILED AS OF DATE: 19950512 SROS: NONE FILER: 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: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-11174 FILM NUMBER: 95537496 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 10-Q 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, 1995____ 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 0-11174 __________________WARWICK VALLEY TELEPHONE COMPANY_________________________ (Exact name of registrant as specified in its charter) __________________New York______________________________14-1160510______________ (State or other jurisdiction of incorporation or (I.R.S. Employer or organization) Identification No.) __47-49 Main Street, Warwick, New York________________________10990____________ (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code _____(914) 986-1101_________ _______________________________________________________________________________ Former name, former address and former fiscal year, if changed since last report. Indicate by check 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: 613,463 common shares, no par value, outstanding at March 31, 1995. PART I - FINANCIAL INFORMATION Ite 1. Financial Statements WARWICK VALLEY TELEPHONE COMPANY BALANCE SHEET
March 31, December 31, 1995 1994 (Unaudited) (Audited) CURRENT ASSETS: Cash $ 471,884 $ 422,037 Telecommunications accounts receivable, less accounts 2,136,299 1,682,568 receivable allowance 1995-$69,634; 1994-$65,155 Refundable income tax 0 42,034 Other accounts receivable 230,274 964,485 Materials and supplies 1,482,570 1,293,091 Prepaid expenses 531,468 285,819 TOTAL CURRENT ASSETS 4,852,495 4,690,034 NON-CURRENT ASSETS Unamortized debt issuance expense 39,545 41,686 Other deferred charges 168,390 162,616 Investment in affiiliated company 5,043 0 Investment in non-affiliated company 788,564 779,806 TOTAL NON-CURRENT ASSETS 1,001,542 984,108 TELEPHONE PLANT, AT COST: Land, buildings and equipment In service 31,025,497 30,666,549 Under construction 751,295 839,392 31,776,792 31,505,941 Less: Accumulated depreciation 9,988,193 9,522,504 TOTAL PLANT 21,788,599 21,983,437 TOTAL ASSETS $ 27,642,636 $ 27,657,579
The accompanying notes to financial statements are an integral part of these statements. -2- Item 1. Financial Statements (Continued) WARWICK VALLEY TELEPHONE COMPANY BALANCE SHEET
March 31, December 31, STOCKHOLDERS' EQUITY AND LIABILITIES 1995 1994 (Unaudited) (Audited) CURRENT LIABILITIES: Current maturities of long-term debt $ 120,000 $ 120,000 Accounts payable 1,647,514 1,766,777 Notes payable 700,000 900,000 Advance billing and payments 45,585 202,358 Customer deposits 286,415 257,226 Accrued taxes 134,924 31,426 Other accrued liabilities 351,028 523,866 TOTAL CURRENT LIABILITIES 3,285,466 3,801,653 LONG TERM DEBT: Funded debt 7,342,500 7,370,000 TOTAL LONG TERM DEBT 7,342,500 7,370,000 OTHER LIABILITIES & DEFERRED CREDITS: Unamortized operating investment tax credit - net 341,677 354,427 Unamortized non-operating investment tax credit - net 18,179 18,179 Net non-current deferred operating income tax 2,472,571 1,973,117 Other deferred credits 385,279 640,961 TOTAL OTHER LIABILITIES & DEFERRED CREDITS 3,217,706 2,986,684 STOCKHOLDERS' EQUITY Preferred stock - 5% cumulative, $100 par value; 7,500 shares authorized 5,000 shares issued and outstanding 500,000 500,000 Common stock, without par value; 720,000 shares authorized; Issued and outstanding:639,263 shares at 3/31/95 and 639,263 shares at 12/31/94 2,089,642 2,089,642 Retained earnings 11,982,522 11,684,800 14,572,164 14,274,442 Less: Treasury stock 25,800 shares at cost for 1995 and 1994 775,200 775,200 TOTAL STOCKHOLDERS' EQUITY 13,796,964 13,499,242 TOTAL LIABILITIES $ 27,642,636 $ 27,657,579
The accompanying notes to financial statements are an integral part of these statements. -3- WARWICK VALLEY TELEPHONE COMPANY STATEMENT OF INCOME (UNAUDITED)
Three Months Ended March 31, 1995 1994 Operating Revenues: Local network service $ 801,960 $ 766,233 Network access and long distance network service 2,202,029 2,071,104 Miscellaneous 277,250 249,536 3,281,239 3,086,873 Less: Provisions for uncollectibles 7,200 7,200 Operating revenues 3,274,039 3,079,673 Operating Expenses: Plant specific 562,189 474,279 Plant non-specific 657,237 613,800 Customer operating expense 668,447 652,385 Corporate operations 417,260 433,733 Operating expenses 2,305,133 2,174,197 Operating Taxes: Federal income taxes 164,901 156,361 Other operating taxes 258,735 249,009 Operating taxes 423,636 405,370 Income from Operations 545,270 500,106 Non-Operating Income & Expenses, Net (Note 2) 127,459 91,156 Income before fixed charges 672,729 591,262 Interest & Related Items: Interest on funded debt 149,183 167,027 Other Interest Deductions ( 9,550) 1,657 Amortization of debt issuance expense 2,141 2,141 Total interest & related items 141,774 170,825 Net income all sources 530,955 420,437 PREFERRED DIVIDENDS 6,250 6,250 INCOME APPLICABLE TO COMMON STOCK $ 524,705 $ 414,187 NET INCOME PER AVERAGE SHARE OF OUTSTANDING COMMON STOCK $ 0.86 $ 0.68 CASH DIVIDENDS PAID PER SHARE $ 0.37 $ 0.37 AVERAGE SHARES OF COMMON STOCK OUTSTANDING 613,463 608,604
The accompanying note to financial statements are an integral part of these statements. -4- WARWICK VALLEY TELEPHONE COMPANY STATEMENT OF CASH FLOWS FOR THE THREE MONTHS ENDED MARCH 30, 1995 AND 1994 (Unaudited)
1995 1994 CASH FLOW FROM OPERATING ACTIVITIES: Net Income $ 530,955 $ 811,925 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 503,674 715,736 Non-current deferred income taxes-dr. 0 (235,129) Deferred income tax and investment tax credit 231,022 212,422 Interest charged to construction ( 14,914) ( 31,458) CHANGE IN ASSETS AND LIABILITIES: (Increase) Decrease in accounts receivable 280,480 155,789 (Increase) Decrease in materials and supplies (189,479) (306,931) (Increase) Decrease in refundable income tax 42,034 23,716 (Increase) Decrease in prepaid expenses (245,649) (108,485) (Increase) Decrease in deferred charges ( 5,774) 22,568 Increase (Decrease) in accounts payable (119,263) (256,553) Increase (Decrease) in customers' deposits 29,189 ( 1,304) Increase (Decrease) in accrued expenses ( 53,274) (311,141) Increase (Decrease) in other liabilities (172,838) 122,639 Net Cash provided by operating activities 816,163 813,794 CASH FLOW FROM INVESTING ACTIVITIES: Purchase of property, plant and equipment (306,698) (872,418) Interest charged to construction 14,914 31,458 Change in other investment ( 13,801) ( 95,311) Net Cash used in investing activities (305,585) (936,271) CASH FLOW FROM FINANCING ACTIVITIES: Increase (Decrease) in Notes Payable (200,000) (125,000) Reduction of long term debt ( 27,500) 26,215 Dividends (233,231) (436,698) Sale of common stock 0 155,116 Net Cash used by financing activities (460,731) (380,367) Increase (Decrease) in cash and cash equivalents 49,847 (502,844) Cash and cash equivalents at beginning of year 422,037 753,385 Cash and cash equivalents at end of the period $ 471,884 $ 250,541
The accompanying notes to financial statements are an integral part of these statements. -5- Item 1. Financial Statements (Continued) WARWICK VALLEY TELEPHONE COMPANY NOTES TO FINANCIAL STATEMENTS 1. In the opinion of the management of the Warwick Valley Telephone Company, the accompanying financial statements contain all adjustments (consisting only of normal recurring adjustments) present fairly the Company's financial position as of March 31, 1995 and December 31, 1994, its income for the three-month periods ended March 31, 1995 and 1994 and its cash flow for the three-month periods ended March 31, 1995 and 1994. These financial statements should be read in conjunction with the financial statements and the notes included in the Company's Annual Report on Form 10-K for the year ended December 31, 1994. The results of operations for any interim period are not necessarily indicative of the results of operations for a full year. 2. Non-operating income and expenses for the three-month periods ended March 31, 1995 and 1994 were as follows: Three Months Ended March 31, 1995 1994 Interest income $ 121 $ 5,019 Interest during construction 14,914 3,357 G/L disposition certain property 13,508 10,048 Special charges ( 709) ( 959) Other non-operating income 16,900 70,000 Equity in earnings of affiliated company 82,725 3,691 $127,459 $91,156 - 6 - WARWICK VALLEY TELEPHONE COMPANY ________________ Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations RESULTS OF OPERATIONS - Three Months Ended March 31, 1995 - The Company's net income from all sources increased $110,518 (or 26.3%) to $530,955 for the three-month period ended March 31, 1995, as compared to the same period in 1994. Operating revenues increased by $194,366 (or 6.3%) after provision for uncollectibles, to $3,274,039 for the three-month period ended March 31, 1995 as compared to $3,079,673 for the corresponding period of 1994. The increase in operating revenues was primarily the result of network access revenues which increased $129,543 (or 10.1%), largely because of increased interstate access rates effective July 1, 1994. Operating expenses increased by $130,936 (or 6.0%) to $2,305,133 for the three-month period ended March 31, 1995 as compared to the same period in 1994, mainly due to increased costs of salaries and benefits ($72,838) and increased depreciation ($68,162). A number of other increases and decreases occurred, the most significant being a reduction in supervision payroll of $37,138, resulting from personnel changes which took place during the quarter. Non-operating income and expenses increased by $36,303 from $91,156 in the three-month period ended March 31, 1994 to $127,459 in the same period of 1995, largely as a result of the profit of $97,420 earned by Warwick Valley Long Distance during the 1995 period, compared to $515 during the 1994 period. This was offset by a reduction in the Company's share of Orange-Poughkeepsie Cellular Partnership income from $70,000 in the 1994 period to $16,900 in the 1995 period and a loss of $14,696 for Warwick Valley Mobile during the 1995 period compared to a profit of $3,175 during the 1994 period. Both of these adverse changes were the result of fraud losses, a serious problem facing the industry. The Company expects such losses to decrease as a result of security measures put into place near year-end 1994 and also expects to be reimbursed for some of the losses through its operating agreement with the cellular partnership. LIQUIDITY AND CAPITAL RESOURCES - The Company's working capital decreased from $2,128,887 at March 31, 1994 to $1,567,029 at March 31, 1995. This difference is primarily due to a reduction in cash from the 1994 balance which included part of the proceeds of the Series J Bond issue in December 1993. The Company issued 5,553 shares of its common stock on April 1, 1995 to employees participating in its retirement savings plans at a price of $34.94 per share, realizing $194,021.82. The sale price was discounted 15% from the price at which the stock was valued by an independent appraisal firm just prior to the transaction. Additional sales to employees are anticipated in 1996 and subsequent years. Pursuant to a NYSPSC order, the tax savings due to the general reduction in income tax liability of the Company made possible by the Tax Reform Act of 1986 attributable to New York State operations have been deferred. These tax savings were applied during 1994, and will continue to be applied in subsequent years, as an offset against the costs of funding retiree health benefits. Reduced rates to reflect the tax savings were ordered in New Jersey beginning July 1, 1987. -7- WARWICK VALLEY TELEPHONE COMPANY ________________ The Company holds a 7.5% limited partnership interest in the cellular mobile telephone partnership which is licensed to operate as the wire-line licensee in both Orange and Dutchess Counties, New York. Since the inception of the partnership, the Company has made capital contributions of $249,750. No further capital contributions are currently scheduled. A wholly-owned subsidiary of the Company, Warwick Valley Mobile Telephone Company (WVMT), resells cellular telephone service to the Company's subscribers as well as to others. WVMT also sells and installs cellular telephone sets. The Company has invested approximately $365,000 in WVMT since its operations began on April 1, 1989. A second wholly-owned subsidiary, Warwick Valley Long Distance Company, Inc. (WVLD), began business in December 1993 in New Jersey and in May 1994 in New York. WVLD resells toll service to customers of Warwick Valley Telephone. WVLD achieved positive retained earnings prior to the end of 1994. An additional wholly-owned subsidiary, Warwick Valley Networks, Inc. (WVN), was established during 1994. WVN is a partner in the New York State Independent Network (NYNSINET), which was created by the independent telephone companies of New York to build and operate its own data connections network. NYSINET will make it unnecessary for its member companies to rely on outside companies for these services and may also offer services to companies who are not members, creating a potential source of additional revenue. The NYSINET network is expected to be in operation before the end of 1995. PART II - OTHER INFORMATION Items 1 (Legal Proceedings), 2 (Changes in Securities), and 3 (Defaults Upon Senior Securities) are inapplicable. Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS - At the Company's 1995 Annual Meeting of Common Shareholders held on April 28, 1995, Wisner H. Buckbee, Joseph E. DeLuca and Fred M. Knipp were elected as directors for three-year terms and Corinna S. Lewis was elected as a director for one year to fill the unexpired term of John W. Sanford, Jr. The terms of Earl V. Barry, Howard Conklin, Jr., Philip S. Demarest, Victor J. Marotta and Henry L. Nielsen, Jr. continued after the meeting. Matters voted on at the meeting and the results of each vote are as follows: Broker For Against Abstain Non-Votes 1. Set the number of directors at 27,552 2,036 6 95,292 nine until the next annual meeting Broker For Against Withheld Non-Votes 2. Election of directors- Wisner H. Buckbee 429,180 270 144 95,292 Joesph E. DeLuca 403,016 26,434 144 95,292 Fred M. Knipp 429,450 0 144 95,292 Corinna S. Lewis 423,652 5,798 144 95,292 Broker For Against Abstain Non-Votes 3. Ratify the appointment of Bush and Germain as the independent public accountants of the Company 429,558 0 36 95,292 -8- WARWICK VALLEY TELEPHONE COMPANY ________________ Item 5. Other Information At its reorganizational meeting on April 28, 1995, the Board of Directors elected the following persons to the postions set forth opposite their names: Howard Conklin, Jr. - Chairman of the Board Henry L. Nielsen, Jr. - Vice Chairman of the Board Fred M. Knipp - President Philip S. Demarest - Vice President, Secretary and Treasurer John P. Nye - Vice President Herbert Gareiss, Jr. - Vice President, Assistant Secretary and Assistant Treasurer Item 6. Exhibits And Reports On Form 8-K a) Exhibits - Not applicable b) Reports on Form 8-K - Not applicable -9- 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. Warwick Valley Telephone Company Registrant Date_May 12, 1995__ _________Herbert Gareiss, Jr.__________ Herbert Gareiss, Jr., Vice President (Duly Authorized Officer) Date __May 12, 1995__ _________Philip S. Demarest____________ Philip S. Demarest, Vice-President Secretary and Treasurer (Principal Financial and Chief Accounting Officer) -10- EX-27 2
UT 3-MOS YEAR DEC-31-1994 DEC-31-1993 MAR-31-1995 DEC-31-1994 PER-BOOK PER-BOOK 21,788,599 21,983,437 793,607 779,806 4,852,495 4,690,034 207,935 204,302 0 0 27,642,636 27,657,579 2,089,642 2,089,642 0 0 11,982,522 11,684,800 14,072,164 13,774,442 000,000 000,000 500,000 500,000 7,362,500 7,390,000 700,000 900,000 0 0 0 0 120,000 120,000 0 0 0 0 0 0 4,907,972 4,993,137 27,642,636 27,657,579 3,274,039 12,252,804 164,901 312,507 0 0 2,305,133 8,850,222 27,642,636 27,657,579 127,459 326,392 672,729 2,393,444 141,774 643,994 530,995 1,749,450 6,250 25,000 524,705 1,724,450 226,981 1,028,280 149,183 619,064 816,163 2,818,765 .86 2.82 0 0 -----END PRIVACY-ENHANCED MESSAGE-----