8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): August 13, 2007

Warwick Valley Telephone Company

(Exact name of registrant as specified in its charter)

0-11174
(Commission File No.) 14-1160510
(I.R.S. Employer Identification No.)

New York
(State or other jurisdiction of incorporation or organization)

47 Main Street
Warwick, New York 10990
(845) 986-8080
(Address, including zip code, and telephone number,
including area code, of Registrant’s principal executive offices)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the obligation of the registrant under any of the following provisions:

o Written communication pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 8.01.   Other Events

Today Warwick Valley Telephone Company (“WVT Communications”) issued a press release which announced certain results of the Company’s operations for the three and six month periods ended June 30, 2007. The Company’s press release is furnished herewith as Exhibit 99.1.

Item 9.01.   Financial Statements and Exhibits

     (c) Exhibits

          Exhibit 99.1.     Press release entitled “WVT Communications Reports Second Quarter 2007 Results,” dated August 13, 2007.

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 hereunto duly authorized.

WARWICK VALLEY TELEPHONE COMPANY  

(Registrant) 

Date: August 13, 2007

By:	/s/ Kenneth H. Volz
	Name:	Kenneth H. Volz
	Title:	Vice President and Chief Financial Officer

Exhibit Index

Exhibit No.	Description
99.1	Press release entitled “WVT Communications Reports Second Quarter 2007 Results,” dated August 13, 2007.

EX-99.1

Exhibit 99.1

WVT COMMUNICATIONS REPORTS SECOND QUARTER 2007 RESULTS

(WARWICK, NY, August 13, 2007) WVT Communications (NASDAQ: WWVY) announced today its financial results for the second quarter and six months ended June 30, 2007. There was solid improvement in net income for both periods. The Company increased its net income by 95% from $694,000 to $1,350,000 for the three month period over the same period in 2006 and by 9% from $1,902,000 to $2,076,000 for the six month period over the same period in 2006. Of the Company’s net income for the six-month period in 2006, $611,000 derived from the sale of an investment. That income did not recur in 2007. If it is excluded from the net income for the first six months of 2006, the Company’s net income for the comparable six-month period in 2007 increased by 40% over 2006.

Operating revenues decreased 7% from $6,341,000 to $5,878,000 for the three months ended June 30, 2007 compared to the same period in the prior year and decreased 5% from $12,416,000 to $11,769,000 for the six months ended June 30, 2007 compared to the same period in the prior year. The Company successfully introduced its Customer Winback Program and continued its “Triple Play” (bundle of wireline access, broadband internet and video services). The results of these two initiatives were not, however, enough to counteract revenue decreases from access lines.

While revenues continued to decline compared to last year, the Company introduced new services, advanced technology, competitive pricing plans and packaging that it believes should over time reduce or reverse that decline. We are significantly extending the footprint of our video services and will include High Definition TV and video on demand by the end of the third quarter. We have had success this quarter in the continuation of our “Triple Play” promotion of bundled wireline access, broadband internet, and video services as well as with the introduction of our Winback Program, which works to regain former customers. During the third quarter we will introduce our “Quadruple Play” offering to the consumer marketplace, which combines the Triple-Play with the re-introduction of WVT-branded wireless service. These efforts should help offset the effects of competition and technology substitution that have resulted in access line losses. In the third quarter we also will launch Voice over Internet Protocol (“VoIP”) services together with high volume broadband transport for business customers and expand our CLEC operations in Poughkeepsie and Newburgh markets.

Further, as a result of aggressive cost controls, the Company’s operating expenses decreased a significant 23% from $7,795,000 to $6,034,000 for the three months ended June 30, 2007 compared to the same period in the prior year and decreased 15% from $14,913,000 to $12,625,000 for the six months ended June 30, 2007 compared to the same period in the prior year. The decreases derived largely from prudent management of outside vendors and improvements in operating efficiencies.

The Company has a long history in successful deployments of new technology. We were one of the first telephone companies to install digital switching, to offer internet access as an Internet Service Provider (ISP), and to offer video service as an alternative to cable TV companies. We have continued to invest in our operations to gain enhanced operating efficiencies and to enable the introduction of new services to our customers. Last year we installed one of the first VoIP switching platforms in the Hudson Valley. This year we will complete the installation of our enterprise resource planning system, which will support new services and provide operating efficiencies. During the second quarter, we upgraded several of our core servers with new technology, providing customers with enhanced features, and in the third quarter we plan to replace our core routers. We have a major capital program to extend video services and broadband internet to a greater number of our customers.

Commenting on the second quarter results, Duane Albro, the President and CEO, said “The dramatic increase of net income by 95% is a significant milestone for WVT Communications and was principally due to the hard work of our employees in the execution of our business plan. The focus during the second quarter has been to dramatically reduce expenses in order to generate a positive operating margin, lower our cost structure to enhance our competitiveness and position our infrastructure and products for the increased marketing and sales planned for the remainder of the year. We are firmly committed to creating value for our shareholders by the successful planning and deployment of our initiatives, which we believe will maximize the value of our cash flows. We are continuing to reduce our debt and pay a stable dividend. We have increased our investment in O-P and will continue to evaluate other strategic investments as well. WVT Communications is a great company with great customers and great employees...and a solid plan for growth.”

About WVT Communications

WVT Communications is a leading voice, internet, video and wireless provider servicing consumers and businesses in the lower Hudson Valley of NY and New Jersey. Additional information about the Company is available at www.wvtc.com

Forward-looking Statements

This press release includes statements that may constitute “forward-looking” statements. These statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1955. Forward-looking statements inherently involve risks and uncertainties that could cause or contribute to such differences that include, but are not limited to, competitive factors, the success of new products in the marketplace, dependence on third party vendors, and the ability to obtain financing. By making these forward-looking statements, WVT Communications undertakes no obligation to update these statements for revisions or changes after the date of this release.

Contact:

WVT Communications

Kenneth H. Volz,

Chief Financial Officer, 845-986-8080

WARWICK VALLEY TELEPHONE COMPANY
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
($ in thousands, except share and per share amounts)

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2007			2006			2007			2006
Operating revenues:
Local network service	$	794		$	908		$	1,619		$	1,824
Network access service		2,066			2,109			4,015			4,043
Long distance services		825			890			1,735			1,746
Directory advertising		331			328			669			668
Online services		1,440			1,577			2,915			3,206
Other services and sales		422			529			816			929
Total operating revenues		5,878			6,341			11,769			12,416
Operating expenses:
Plant specific		871			1,211			2,057			2,376
Plant non-specific:
Depreciation and amortization		1,294			1,434			2,588			2,905
Other		746			890			1,447			1,760
Customer operations		895			1,088			1,947			2,113
Corporate operations		1,587			2,609			3,137			4,489
Cost of services and sales		294			230			685			590
Property, revenue and payroll taxes		347			333			764			680
Total operating expenses		6,034			7,795			12,625			14,913
Operating loss		(156	)		(1,454	)		(856	)		(2,497	)
Other income (expense):
Interest income (expense), net of		(92	)		23			(126	)		6
capitalized interest
Income from equity method investments		2,265			2,487			4,135			4,768
Gain on sale of investment		—			—			—			611
Other income (expense), net		28			(6	)		10			(12	)
Total other income (expense)		2,201			2,504			4,019			5,373
Income before income taxes		2,045			1,050			3,163			2,876
Income taxes		695			356			1,087			974
Net income		1,350			694			2,076			1,902
Preferred dividends		7			7			13			13
Income applicable to common stock	$	1,343		$	687		$	2,063		$	1,889
Basic and diluted earnings per share of outstanding common stock	$	0.25		$	0.13		$	0.39		$	0.35
Weighted average shares of common stock outstanding		5,351,780			5,351,780			5,351,780			5,351,780

WARWICK VALLEY TELEPHONE COMPANY
CONSOLIDATED BALANCE SHEETS
(in thousands except share and per share amounts)

	June 30,			December 31,
	2007			2006
	(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$	7,330		$	12,296
Accounts receivable — net of allowance for uncollectibles — $134 and $107, in 2007 and 2006,		3,442			4,121
respectively
Other accounts receivable		261			262
Materials and supplies		1,372			957
Prepaid expenses		765			695
Deferred income taxes		222			228
Total current assets		13,392			18,559
Property, plant and equipment, net		36,411			37,087
Unamortized debt issuance costs		71			77
Other deferred charges		798			814
Investments		8,450			3,733
Other assets		170			179
Total assets	$	59,292		$	60,449
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable	$	1,650		$	1,013
Current maturities of long-term debt		1,519			1,519
Advance billing and payments		274			251
Customer deposits		119			128
Accrued taxes		863			1,221
Pension and post retirement benefit obligations		1,155			1,435
Other accrued expenses		1,531			2,199
Total current liabilites		7,111			7,766
Long-term debt, net of current maturities		6,454			7,214
Deferred income taxes		1,032			4,490
Long term income taxes payable		3,659 -
Other liabilities and deferred credits		624			624
Pension and post retirement benefit obligations		7,766			7,583
Total liabilities		26,646			27,677
Shareholders’ equity
Preferred shares — $100 par value; authorized and issued shares of 5,000; $0.01 par value authorized and unissued shares of 10,000,000;		500			500
Common stock — $0.01 par value; authorized shares of 10,000,000		60			60
issued 5,985,463 shares
Treasury stock — at cost, 633,683 common shares		(4,748	)		(4,748	)
Additional paid in capital		3,487			3,487
Accumulated other comprehensive loss		(3,388	)		(3,554	)
Retained earnings		36,735			37,027
Total shareholders’ equity		32,646			32,772
Total liabilities and shareholders’ equity	$	59,292		$	60,449