-----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, Exsk2pZD12vMTYmY1iAqL4O7gzTwtq/9ahjZbetCO061ZORYsnw9Wd0buGWfN7Gd vkIaadIcNn8LJsbRYCJAmQ== 0000897101-00-000493.txt : 20000512 0000897101-00-000493.hdr.sgml : 20000512 ACCESSION NUMBER: 0000897101-00-000493 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20000331 FILED AS OF DATE: 20000511 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NEW ULM TELECOM INC CENTRAL INDEX KEY: 0000071557 STANDARD INDUSTRIAL CLASSIFICATION: TELEPHONE COMMUNICATIONS (NO RADIO TELEPHONE) [4813] IRS NUMBER: 410440990 STATE OF INCORPORATION: MN FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-03024 FILM NUMBER: 625479 BUSINESS ADDRESS: STREET 1: 400 2ND ST N CITY: NEW ULM STATE: MN ZIP: 56073 BUSINESS PHONE: 5073544111 MAIL ADDRESS: STREET 1: P O BOX 697 CITY: NEW ULM STATE: MN ZIP: 56073 FORMER COMPANY: FORMER CONFORMED NAME: NEW ULM RURAL TELEPHONE CO DATE OF NAME CHANGE: 19840816 10-Q 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q [X] QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2000 -------------------- [ ] TRANSITION REPORT UNDER SECTION 13 OR 15 (d) OF THE EXCHANGE ACT For the transition period from __________ to __________. Commission File Number 0-3024 -------------------- New Ulm Telecom, Inc. ------------------------------------------------------ (Exact name of registrant as specified in its charter) Minnesota 41-0440990 ------------------------- ------------------------- (State or jurisdiction of incorporation) (IRS Employer Identification Number) 400 2nd Street North, New Ulm, MN 56073-0697 ----------------------------------------------------------- (Address of Principal executive offices) (507) 354-4111 ------------------------------------------------ (Registrant's telephone number) Indicate by checkmark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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 _________ APPLICABLE ONLY TO CORPORATE ISSUERS Indicate the number of shares outstanding of each of the issuer's classes of Common stock, as of the latest practicable date: 1,732,455. NEW ULM TELECOM, INC. CONTENTS Page ---- PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS Unaudited Consolidated Balance Sheets 3-4 Unaudited Consolidated State Income 5 Unaudited Consolidated Statements of Stockholders' Equity 6 Unaudited Consolidated Statements of Cash Flows 7 Notes to Unaudited Consolidated Financial Statements 8 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL 9 CONDITION AND RESULTS OF OPERATION PART II. OTHER INFORMATION 10 2 NEW ULM TELECOM, INC. AND SUBSIDIARIES MARCH 31, 2000 PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS UNAUDITED CONSOLIDATED BALANCE SHEETS ASSETS
MARCH 31, DECEMBER 31, 2000 1999 ------------ ------------ CURRENT ASSETS: Cash $ 1,724,738 $ 1,533,044 Certificates of Deposit -- 600,000 Receivables, Net of Allowance for Doubtful Accounts of $220,181 and $33,000 1,070,527 1,457,274 Inventories 863,798 557,315 Prepaid Expenses 73,290 88,117 ------------ ------------ Total Current Assets 3,732,353 4,235,750 ------------ ------------ INVESTMENTS & OTHER ASSETS: Excess of Cost Over Net Assets Acquired 3,418,013 3,446,456 Notes Receivable, Less Current Portion of $4,766 and $4,997 975,899 977,166 Cellular Investments 5,462,046 5,282,233 Other 909,343 688,593 ------------ ------------ Total Investments and Other Assets 10,765,301 10,394,448 ------------ ------------ PROPERTY, PLANT & EQUIPMENT: Telecommunications Plant 28,728,632 28,356,244 Other Property & Equipment 1,821,360 1,779,022 Cable Television Plant 802,899 802,899 ------------ ------------ Total 31,352,891 30,938,165 Less Accumulated Depreciation 19,091,491 18,541,294 ------------ ------------ Net Property, Plant & Equipment 12,261,400 12,396,871 ------------ ------------ TOTAL ASSETS $ 26,759,054 $ 27,027,069 ============ ============
The accompanying notes are an integral part of the financial statements. 3 NEW ULM TELECOM, INC. AND SUBSIDIARIES MARCH 31, 2000 UNAUDITED CONSOLIDATED BALANCE SHEETS (CONTINUED) LIABILITIES AND STOCKHOLDERS' EQUITY
MARCH 31, DECEMBER 31, 2000 1999 ------------ ------------ CURRENT LIABILITIES: Current Portion of Long-Term Debt $ 366,666 $ 366,666 Accounts Payable 612,761 1,256,049 Accrued Income Taxes 187,125 -- Other Accrued Taxes 37,277 58,006 Other Accrued Liabilities 284,725 332,542 ------------ ------------ Total Current Liabilities 1,488,554 2,013,263 ------------ ------------ LONG-TERM DEBT, LESS CURRENT PORTION 2,841,666 2,933,334 ------------ ------------ DEFERRED CREDITS: Income Taxes 1,510,554 1,510,554 Investment Tax Credits 16,451 17,336 ------------ ------------ Total Deferred Credits 1,527,005 1,527,890 ------------ ------------ STOCKHOLDERS' EQUITY: Common Stock - $5 Par Value, 6,400,000 Shares Authorized, 1,732,455 Shares Issued and Outstanding 8,662,275 8,662,275 Retained Earnings 12,239,554 11,890,307 ------------ ------------ Total Stockholders' Equity 20,901,829 20,552,582 ------------ ------------ TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 26,759,054 $ 27,027,069 ============ ============
The accompanying notes are an integral part of the financial statements. 4 NEW ULM TELECOM, INC. AND SUBSIDIARIES MARCH 31, 2000 UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
FOR THREE MONTHS ENDED MARCH 31, 2000 1999 ------------ ------------ OPERATING REVENUES: Local Network $ 696,290 $ 635,929 Network Access 1,318,067 1,336,440 Billing and Collection 101,714 121,598 Miscellaneous 148,538 93,285 Nonregulated 659,179 554,728 ------------ ------------ Total Operating Revenues 2,923,788 2,741,980 ------------ ------------ OPERATING EXPENSES: Plant Operations 374,707 325,629 Depreciation 552,562 477,141 Amortization 28,456 28,444 Customer 199,751 144,566 General and Administrative 415,964 348,750 Other Operating Expenses 392,445 280,070 ------------ ------------ Total Operating Expenses 1,963,885 1,604,600 ------------ ------------ OPERATING INCOME 959,903 1,137,380 ------------ ------------ OTHER (EXPENSES) INCOME: Interest Expense (52,858) (59,062) Interest Income 25,507 32,434 Cellular Investment Income 415,785 327,120 Other Investment Income (Expense) (13,847) (32,445) ------------ ------------ Total Other Income, Net 374,587 268,047 ------------ ------------ INCOME BEFORE INCOME TAXES 1,334,490 1,405,427 INCOME TAXES 552,129 579,740 ------------ ------------ NET INCOME $ 782,361 $ 825,687 ============ ============ NET INCOME PER SHARE - NOTE 2 $ 0.45 $ 0.48 ============ ============
The accompanying notes are an integral part of the financial statements. 5 NEW ULM TELECOM, INC. AND SUBSIDIARIES MARCH 31, 2000 UNAUDITED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
COMMON STOCK RETAINED SHARES AMOUNT EARNINGS ------------ ------------ ------------ BALANCE on December 31, 1998 1,732,455 $ 8,662,275 $ 10,206,716 Net Income 3,329,423 Dividends (1,645,832) ------------ ------------ ------------ BALANCE on December 31, 1999 1,732,455 $ 8,662,275 $ 11,890,307 Net Income 782,361 Dividends (433,114) ------------ ------------ ------------ BALANCE on March 31, 2000 1,732,455 $ 8,662,275 $ 12,239,554 ============ ============ ============
6 NEW ULM TELECOM, INC. AND SUBSIDIARIES MARCH 31, 2000 UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THREE MONTHS ENDED 2000 1999 ------------ ------------ CASH FLOWS FROM OPERATING ACTIVITIES: Net Income $ 782,361 $ 825,687 Adjustments to Reconcile Net Income to Net Net Cash Provided by Operating Activities: Depreciation and Amortization 581,018 505,585 Cellular Investment Income (415,785) (327,120) (Increase) Decrease in: Receivables 386,962 69,020 Inventories (306,483) (50,243) Prepaid Expenses 14,827 29,940 Increase (Decrease) in: Accounts Payable (643,288) (1,210,568) Accrued Income Taxes 187,125 297,977 Other Accrued Taxes (20,729) 6,440 Other Accrued Liabilities (47,817) 42,705 Deferred Investment Tax Credits (885) (2,629) ------------ ------------ Net Cash Provided by Operating Activities 517,306 186,794 ------------ ------------ CASH FLOWS FROM INVESTING ACTIVITIES: Additions to Property, Plant & Equipment, Net (417,104) (448,003) Change in Notes Receivable 1,052 1,434 Cellular Investments 235,972 127,062 Change in Temporary Cash Investments 600,000 (600,000) Other, Net (220,750) (97,197) ------------ ------------ Net Cash Used in Investing Activities 199,170 (1,016,704) ------------ ------------ CASH FLOWS FROM FINANCING ACTIVITIES: Principal Payments of Long-Term Debt (91,668) (91,666) Dividends Paid (433,114) (381,140) ------------ ------------ Net Cash Used in Financing Activities (524,782) (472,806) ------------ ------------ NET INCREASE (DECREASE) IN CASH 191,694 (1,302,716) CASH AT BEGINNING OF PERIOD 1,533,044 2,551,066 ------------ ------------ CASH AT END OF PERIOD $ 1,724,738 $ 1,248,350 ============ ============
The accompanying notes are an integral part of the financial statements. 7 NEW ULM TELECOM, INC. AND SUBSIDIARIES NOTES TO UNAUDITED FINANCIAL STATEMENTS NOTE 1 - CONSOLIDATED FINANCIAL STATEMENTS In the opinion of management, the accompanying unaudited financial statements contain all adjustments (consisting of only normal recurring items) necessary to present fairly the financial position as of March 31, 2000 and December 31, 1999 and the results of operations and changes in cash flows for the three months ended March 31, 2000 and 1999. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with generally accepted accounting principles have been omitted. It is suggested that these financial statements be read in conjunction with the financial statements and notes thereto included in the Company's December 31, 1999 Annual Report to Shareholders. The results of operations for the period ending March 31, 2000 are not necessarily indicative of the operating results of the entire year. NOTE 2 - NET INCOME PER COMMON SHARE Net income per common share for 2000 and 1999 was computed by dividing the weighted average number of shares of common stock outstanding into the net income. NOTE 3 - STATEMENTS OF CASH FLOW Supplemental Disclosures of Cash Flow Information: Cash paid during the period for: 2000 1999 ---- ---- Interest $53,352 $59,556 Income taxes $230,000 $150,000 8 NEW ULM TELECOM, INC. AND SUBSIDIARIES ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS THREE MONTHS ENDED MARCH 31, 2000 COMPARED TO THE THREE MONTHS ENDED MARCH 31, 1999 The increase in total operating revenues was $181,808 or 6.6%. Local network saw revenues rise 9.5%, due to an increase in Centrex service and the number of access lines. A reduction in the rates charged to interexchange carriers (IXC's) resulted in a 1.4% decrease in network access revenues. Billing and collection revenues decreased $19,884 or 16.4% as a result of IXC's taking back the billing and collection function. Nonregulated revenues continue to show strong growth. The $104,451 or 18.8% increase in revenues is the result of our success with cable television, Internet services, strong sales of customer premise equipment and increased market share of our long distance service. Our nonregulated revenues are expected to show continued growth as the Company increases it's marketing of these services. Total operating expenses increased by $359,285 or 22.4%. Plant operations increased by $49,078 or 15.1% due to increased labor costs and higher maintenance expenses on telephone plant, which correlates to the increase in access lines. Depreciation increased by $75,421 or 15.8%, which is directly related to the increase in property, plant and equipment associated with the Company's effort to bring state of the art very high speed digital subscriber line (VDSL) technology to the community of New Ulm, MN. The plant construction will bring fiber optics to every neighborhood within the city limits of New Ulm, MN. This platform will allow the Company to offer telephony, high bandwidth connections and a variety of video services on the same infrastructure. Customer expenses increased $55,185 or 38.2%. This increase is a reflection of the Company's commitment to provide superior customer service and the ever-expanding basket of services we are providing our subscribers. The marketplace is continuing to evolve and our subscribers are becoming more technically savvy which places demands on our customer relations area to provide our subscribers with solutions to their unique telecommunication needs. In addition, we have implemented an aggressive marketing campaign. The benefits provided by our marketing efforts have been seen in large number of activations generated by Internet and class features. General and Administrative expenses were responsible for a $67,214 or 19.3%. This increase is attributed to an increase in labor expense and the Company's continued search for acquisition opportunities and other investments to enhance shareholder value and to strengthen corporate performance. Other operating expenses increased $112,375 or 40.1%. This increase is associated with the Company's strategic plan of building a basket of services that will make the Company difficult to compete with in the future. Interest expense decreased by $6,204 due to a decrease in long-term debt outstanding. Interest income decreased by $6,927 reflecting fewer funds available for investment. Our cellular 9 investment income increased $88,665 or 27.1%, as the investment in Midwest Wireless continues to be a strong performer. The $18,598 increase in income from other investment income consists of the expected income from an investment in Fibercom, Inc. for 2000. Fibercom, Inc. provides competitive local exchange service in Iowa. Net income decreased by $43,326 or 5.3%. LIQUIDITY AND CAPITAL RESOURCES The Company had an increase in cash of $191,694 for the quarter resulting in a balance of $1,724,738 as of March 31, 2000. Operating activities was the primary source of funds. Net Income and Depreciation and Amortization generated the bulk of those funds. There was no cash invested in Certificates of Deposit at March 31, 2000, which was a source of $600,000 from Investing Activities. Net cash used in Financing Activities was $524,782. Principal payments and Dividend payments accounted for that usage. Working Capital increased $21,312 from December 31, 1999. This increase is the result of a $643,288 decrease in accounts payable. Notes Receivable includes $700,000 from Manager. The note is secured by 51,230 shares of stock in New Ulm Telecom, Inc., had a variable interest rate which was 5.20% at December 31, 1999. Interest Payments are to be paid annually on December 31. The note is to be paid in full on January 1, 2001. The Company operates in a capital-intensive industry. To meet the demands of the industry the Company continues to make investments in state-of-the-art technology to offer subscribers state of the art technological solutions to their communication needs. Capital expenditures for 2000 are expected to be $10 million. 10 PART II. OTHER INFORMATION Items 1-5. Not Applicable Item 6. Exhibits and Reports on Form 8-K On October 29, 1999 the Registrant filed a Form 8-K. The form reported the Company's plan to upgrade the communications infrastructure of the urban district of New Ulm, Minnesota. The project is estimated to cost $10 million. The company will begin construction in the fourth quarter of 1999 with an estimated completion of third quarter 2000. SIGNATURES In accordance with the requirements of the Exchange Act, the registrant has caused this report to be signed on its behalf by the undersigned, thereunto duly authorized NEW ULM TELECOM, INC. (Registrant) Dated: April 25, 2000 By /s/ James P. Jensen -------------------------------------- James P. Jensen, Chairman Dated: April 25, 2000 By /s/ Bill Otis -------------------------------------- Bill Otis, President 11 EX-27 2 ARTICLE 5 - FINANCIAL DATA SCHEDULE
5 3-MOS DEC-31-2000 MAR-31-2000 1,724,738 0 1,070,527 220,181 863,798 3,732,353 31,352,891 19,091,491 26,759,054 1,488,554 2,841,666 0 0 8,662,275 12,239,554 26,759,054 0 2,923,788 0 1,963,885 (427,445) 0 52,858 1,334,490 552,129 782,361 0 0 0 782,361 0.45 0.45
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