x
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
¨
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
VIRGINIA
|
54-1162807
|
(State or other jurisdiction of
incorporation or organization)
|
(I.R.S. Employer Identification No.)
|
Large accelerated filer
¨
|
Accelerated filer
þ
|
Non-accelerated filer
¨
|
Smaller reporting company
¨
|
Page
|
||||
Numbers
|
||||
PART I. FINANCIAL INFORMATION
|
||||
Item 1.
|
Financial Statements
|
|||
3-4
|
||||
5
|
||||
6
|
||||
7-8
|
||||
9-12
|
||||
Item 2.
|
13-22
|
|||
Item 3.
|
22
|
|||
Item 4.
|
23
|
|||
PART II.
|
OTHER INFORMATION
|
|||
Item 1A.
|
24
|
|||
Item 2.
|
24
|
|||
Item 6.
|
24
|
|||
25
|
||||
26
|
ASSETS
|
March 31,
2010
|
December 31,
2009
|
||||||
Current Assets
|
||||||||
Cash and cash equivalents
|
$ | 18,198 | $ | 12,054 | ||||
Accounts receivable, net
|
16,734 | 15,058 | ||||||
Income taxes receivable
|
734 | 5,531 | ||||||
Materials and supplies
|
4,895 | 6,062 | ||||||
Prepaid expenses and other
|
3,209 | 2,504 | ||||||
Assets held for sale
|
10,676 | 10,810 | ||||||
Deferred income taxes
|
616 | 616 | ||||||
Total current assets
|
55,062 | 52,635 | ||||||
Investments, including $2,085 and $1,990 carried at fair value
|
8,683 | 8,705 | ||||||
Property, Plant and Equipment
|
||||||||
Plant in service
|
378,404 | 373,111 | ||||||
Plant under construction
|
12,557 | 9,116 | ||||||
390,961 | 382,227 | |||||||
Less accumulated amortization and depreciation
|
187,513 | 179,925 | ||||||
Net property, plant and equipment
|
203,448 | 202,302 | ||||||
Other Assets
|
||||||||
Intangible assets, net
|
2,310 | 2,417 | ||||||
Cost in excess of net assets of businesses acquired
|
4,418 | 4,418 | ||||||
Deferred charges and other assets, net
|
1,216 | 1,248 | ||||||
Net other assets
|
7,944 | 8,083 | ||||||
Total assets
|
$ | 275,137 | $ | 271,725 |
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
March 31,
2010
|
December 31,
2009
|
||||||
Current Liabilities
|
||||||||
Current maturities of long-term debt
|
$ | 5,588 | $ | 4,561 | ||||
Accounts payable
|
5,213 | 8,804 | ||||||
Advanced billings and customer deposits
|
6,542 | 6,349 | ||||||
Accrued compensation
|
1,181 | 1,003 | ||||||
Liabilities held for sale
|
890 | 858 | ||||||
Accrued liabilities and other
|
3,573 | 3,053 | ||||||
Total current liabilities
|
22,987 | 24,628 | ||||||
Long-term debt, less current maturities
|
26,248 | 28,399 | ||||||
Other Long-Term Liabilities
|
||||||||
Deferred income taxes
|
29,095 | 29,649 | ||||||
Deferred lease payable
|
3,430 | 3,351 | ||||||
Asset retirement obligations
|
6,033 | 5,966 | ||||||
Other liabilities
|
4,133 | 4,060 | ||||||
Total other liabilities
|
42,691 | 43,026 | ||||||
Commitments and Contingencies
|
||||||||
Shareholders’ Equity
|
||||||||
Common stock
|
18,651 | 17,890 | ||||||
Retained earnings
|
166,984 | 160,230 | ||||||
Accumulated other comprehensive loss, net of tax
|
(2,424 | ) | (2,448 | ) | ||||
Total shareholders’ equity
|
183,211 | 175,672 | ||||||
Total liabilities and shareholders’ equity
|
$ | 275,137 | $ | 271,725 |
Three Months Ended
March 31,
|
||||||||
2010
|
2009
|
|||||||
Operating revenues
|
$ | 41,518 | $ | 40,102 | ||||
Operating expenses:
|
||||||||
Cost of goods and services, exclusive of depreciation and amortization shown separately below
|
13,918 | 12,693 | ||||||
Selling, general and administrative, exclusive of depreciation and amortization shown separately below
|
7,773 | 7,543 | ||||||
Depreciation and amortization
|
8,327 | 7,854 | ||||||
Total operating expenses
|
30,018 | 28,090 | ||||||
Operating income
|
11,500 | 12,012 | ||||||
Other income (expense):
|
||||||||
Interest expense
|
(310 | ) | (531 | ) | ||||
Gain (loss) on investments, net
|
(67 | ) | (627 | ) | ||||
Non-operating income, net
|
87 | 167 | ||||||
Income from continuing operations before income taxes
|
11,210 | 11,021 | ||||||
Income tax expense
|
4,641 | 4,864 | ||||||
Net income from continuing operations
|
6,569 | 6,157 | ||||||
Earnings (loss) from discontinued operations, net of tax
(expense) benefit of $(119) and $6,754, respectively
|
185 | (10,369 | ) | |||||
Net income (loss)
|
$ | 6,754 | $ | (4,212 | ) | |||
Basic and diluted income (loss) per share:
|
||||||||
Net income from continuing operations
|
$ | 0.28 | $ | 0.26 | ||||
Net earnings (loss) from discontinued operations
|
0.01 | (0.44 | ) | |||||
Net income (loss)
|
$ | 0.29 | $ | (0.18 | ) | |||
Weighted average shares outstanding, basic
|
23,698 | 23,622 | ||||||
Weighted average shares, diluted
|
23,733 | 23,693 |
Shares
|
Common
Stock
|
Retained
Earnings
|
Accumulated
Other
Comprehensive
Income (Loss)
|
Total
|
||||||||||||||||
Balance, December 31, 2008
|
23,605 | $ | 16,139 | $ | 152,706 | $ | (2,533 | ) | $ | 166,312 | ||||||||||
Comprehensive income:
|
||||||||||||||||||||
Net income
|
- | - | 15,092 | - | 15,092 | |||||||||||||||
Reclassification adjustment for unrealized loss from pension plans included in net income, net of tax
|
- | - | - | 55 | 55 | |||||||||||||||
Net unrealized loss from pension plans, net of tax
|
- | - | - | 30 | 30 | |||||||||||||||
Total comprehensive income
|
15,177 | |||||||||||||||||||
Dividends declared ($0.32 per share)
|
- | - | (7,568 | ) | - | (7,568 | ) | |||||||||||||
Dividends reinvested in common stock
|
32 | 560 | - | - | 560 | |||||||||||||||
Stock-based compensation
|
- | 676 | - | - | 676 | |||||||||||||||
Conversion of liability classified awards to equity classified awards
|
- | 85 | - | - | 85 | |||||||||||||||
Common stock issued through exercise of incentive stock options
|
44 | 367 | - | - | 367 | |||||||||||||||
Net excess tax benefit from stock options exercised
|
- | 63 | - | - | 63 | |||||||||||||||
Balance, December 31, 2009
|
23,681 | $ | 17,890 | $ | 160,230 | $ | (2,448 | ) | $ | 175,672 | ||||||||||
Comprehensive income:
|
||||||||||||||||||||
Net income
|
- | - | 6,754 | - | 6,754 | |||||||||||||||
Reclassification adjustment for unrealized loss from pension plans included in net income, net of tax
|
- | - | - | 24 | 24 | |||||||||||||||
Total comprehensive income
|
6,778 | |||||||||||||||||||
Stock-based compensation
|
- | 142 | - | - | 142 | |||||||||||||||
Common stock issued through exercise of incentive stock options
|
56 | 549 | - | - | 549 | |||||||||||||||
Net excess tax benefit from stock options exercised
|
- | 70 | - | - | 70 | |||||||||||||||
Balance, March 31, 2010
|
23,737 | $ | 18,651 | $ | 166,984 | $ | (2,424 | ) | $ | 183,211 |
Three Months Ended
March 31,
|
||||||||
2010
|
2009
|
|||||||
Cash Flows From Operating Activities
|
||||||||
Net income (loss)
|
$ | 6,754 | $ | (4,212 | ) | |||
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
|
||||||||
Impairment on assets held for sale
|
- | 17,545 | ||||||
Depreciation
|
8,218 | 7,715 | ||||||
Amortization
|
109 | 127 | ||||||
Provision for bad debt
|
177 | 112 | ||||||
Stock based compensation expense
|
142 | 116 | ||||||
Excess tax benefits on stock option exercises
|
(70 | ) | (58 | ) | ||||
Deferred income taxes
|
(501 | ) | (6,806 | ) | ||||
Net loss on disposal of equipment
|
145 | 257 | ||||||
Realized loss on disposal of investments
|
150 | 181 | ||||||
Unrealized (gains) losses on investments
|
(197 | ) | (96 | ) | ||||
Net (gain) loss from patronage and equity investments
|
78 | 485 | ||||||
Other
|
189 | 516 | ||||||
Changes in assets and liabilities:
|
||||||||
(Increase) decrease in:
|
||||||||
Accounts receivable
|
(1,803 | ) | 2,007 | |||||
Materials and supplies
|
1,167 | 665 | ||||||
Income taxes receivable
|
4,797 | 4,953 | ||||||
Increase (decrease) in:
|
||||||||
Accounts payable
|
(3,526 | ) | 186 | |||||
Deferred lease payable
|
78 | 185 | ||||||
Other prepaids, deferrals and accruals
|
82 | (2,642 | ) | |||||
Net cash provided by operating activities
|
$ | 15,989 | $ | 21,236 | ||||
Cash Flows From Investing Activities
|
||||||||
Purchase and construction of property, plant and equipment
|
$ | (9,570 | ) | $ | (9,077 | ) | ||
Proceeds from sale of equipment
|
240 | 57 | ||||||
Purchase of investment securities
|
(43 | ) | (41 | ) | ||||
Proceeds from sale of investment securities
|
34 | 3 | ||||||
Net cash used in investing activities
|
$ | (9,339 | ) | $ | (9,058 | ) |
Three Months Ended
March 31,
|
||||||||
2010
|
2009
|
|||||||
Cash Flows From Financing Activities
|
||||||||
Principal payments on long-term debt
|
$ | (1,125 | ) | $ | (1,085 | ) | ||
Amounts borrowed under debt agreements
|
- | 2,000 | ||||||
Excess tax benefits on stock option exercises
|
70 | 58 | ||||||
Proceeds from exercise of incentive stock options
|
549 | 262 | ||||||
Net cash provided by (used in) financing activities
|
$ | (506 | ) | $ | 1,235 | |||
Net increase in cash and cash equivalents
|
$ | 6,144 | $ | 13,413 | ||||
Cash and cash equivalents:
|
||||||||
Beginning
|
12,054 | 5,240 | ||||||
Ending
|
$ | 18,198 | $ | 18,653 | ||||
Supplemental Disclosures of Cash Flow Information
|
||||||||
Cash payments for:
|
||||||||
Interest
|
$ | 382 | $ | 511 | ||||
Income taxes
|
$ | 427 | $ | 103 |
March 31, 2010
|
December 31, 2009
|
|||||||
Assets held for sale:
|
||||||||
Property, plant and equipment, net
|
$ | 7,380 | $ | 7,484 | ||||
Intangible assets, net
|
868 | 868 | ||||||
Deferred charges
|
1,610 | 1,628 | ||||||
Other assets
|
818 | 830 | ||||||
$ | 10,676 | $ | 10,810 | |||||
Liabilities:
|
||||||||
Other liabilities
|
$ | 890 | $ | 858 |
Three Months Ended
March 31,
|
||||||||
2010
|
2009
|
|||||||
Operating revenues
|
$ | 3,447 | $ | 3,623 | ||||
Earnings (loss) before income taxes
|
$ | 304 | $ | (17,123 | ) |
Wireless
|
Wireline
|
Cable TV
|
Other
|
Eliminations
|
Consolidated
Totals
|
|||||||||||||||||||
External revenues
|
||||||||||||||||||||||||
Service revenues
|
$ | 26,527 | $ | 3,377 | $ | 3,535 | $ | - | $ | - | $ | 33,439 | ||||||||||||
Other
|
2,960 | 4,742 | 377 | - | - | 8,079 | ||||||||||||||||||
Total external revenues
|
29,487 | 8,119 | 3,912 | - | - | 41,518 | ||||||||||||||||||
Internal revenues
|
746 | 3,261 | 10 | - | (4,017 | ) | - | |||||||||||||||||
Total operating revenues
|
30,233 | 11,380 | 3,922 | - | (4,017 | ) | 41,518 | |||||||||||||||||
Operating expenses
|
||||||||||||||||||||||||
Costs of goods and services, exclusive of depreciation and amortization shown separately below
|
9,878 | 4,163 | 3,328 | 67 | (3,518 | ) | 13,918 | |||||||||||||||||
Selling, general and administrative, exclusive of depreciation and amortization shown separately below
|
4,103 | 1,832 | 1,525 | 812 | (499 | ) | 7,773 | |||||||||||||||||
Depreciation and amortization
|
5,239 | 1,925 | 1,090 | 73 | - | 8,327 | ||||||||||||||||||
Total operating expenses
|
19,220 | 7,920 | 5,943 | 952 | (4,017 | ) | 30,018 | |||||||||||||||||
Operating income (loss)
|
11,013 | 3,460 | (2,021 | ) | (952 | ) | - | 11,500 | ||||||||||||||||
Interest expense
|
(53 | ) | (58 | ) | (72 | ) | (468 | ) | 341 | (310 | ) | |||||||||||||
Non-operating income (expense)
|
46 | 18 | 10 | 287 | (341 | ) | 20 | |||||||||||||||||
Income (loss) from continuing operations before income taxes
|
11,006 | 3,420 | (2,083 | ) | (1,133 | ) | - | 11,210 | ||||||||||||||||
Income taxes
|
(4,534 | ) | (1,301 | ) | 793 | 401 | - | (4,641 | ) | |||||||||||||||
Net income (loss) from continuing operations
|
$ | 6,472 | $ | 2,119 | $ | (1,290 | ) | $ | (732 | ) | $ | - | $ | 6,569 |
|
Wireless
|
Wireline
|
Cable TV
|
Other
|
Eliminations
|
Consolidated
Totals
|
||||||||||||||||||
External revenues
|
||||||||||||||||||||||||
Service revenues
|
$ | 25,360 | $ | 3,265 | $ | 3,606 | $ | - | $ | - | $ | 32,231 | ||||||||||||
Other
|
2,822 | 4,819 | 230 | - | - | 7,871 | ||||||||||||||||||
Total external revenues
|
28,182 | 8,084 | 3,836 | - | - | 40,102 | ||||||||||||||||||
Internal revenues
|
622 | 3,069 | 8 | - | (3,699 | ) | - | |||||||||||||||||
Total operating revenues
|
28,804 | 11,153 | 3,844 | - | (3,699 | ) | 40,102 | |||||||||||||||||
Operating expenses
|
||||||||||||||||||||||||
Costs of goods and services, exclusive of depreciation and amortization shown separately below
|
9,036 | 4,006 | 2,836 | 53 | (3,238 | ) | 12,693 | |||||||||||||||||
Selling, general and administrative, exclusive of depreciation and amortization shown separately below
|
4,167 | 1,670 | 1,182 | 985 | (461 | ) | 7,543 | |||||||||||||||||
Depreciation and amortization
|
4,872 | 2,152 | 745 | 85 | - | 7,854 | ||||||||||||||||||
Total operating expenses
|
18,075 | 7,828 | 4,763 | 1,123 | (3,699 | ) | 28,090 | |||||||||||||||||
Operating income (loss)
|
10,729 | 3,325 | (919 | ) | (1,123 | ) | - | 12,012 | ||||||||||||||||
Interest expense
|
(112 | ) | (64 | ) | (38 | ) | (617 | ) | 300 | (531 | ) | |||||||||||||
Non-operating income (expense)
|
(22 | ) | (20 | ) | (13 | ) | (105 | ) | (300 | ) | (460 | ) | ||||||||||||
Income (loss) from continuing operations before income taxes
|
10,595 | 3,241 | (970 | ) | (1,845 | ) | - | 11,021 | ||||||||||||||||
Income taxes
|
(4,398 | ) | (1,229 | ) | 368 | 395 | - | (4,864 | ) | |||||||||||||||
Net income (loss) from continuing operations
|
$ | 6,197 | $ | 2,012 | $ | (602 | ) | $ | (1,450 | ) | $ | - | $ | 6,157 |
March 31,
2010
|
December 31,
2009
|
|||||||
Wireless
|
$ | 123,103 | $ | 146,228 | ||||
Wireline
|
74,445 | 80,668 | ||||||
Cable TV
|
44,514 | 20,240 | ||||||
Other (includes assets held for sale)
|
209,944 | 172,069 | ||||||
Combined totals
|
452,006 | 419,205 | ||||||
Inter-segment eliminations
|
(176,869 | ) | (147,480 | ) | ||||
Consolidated totals
|
$ | 275,137 | $ | 271,725 |
ITEM
2.
|
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
|
*
|
The Wireless segment provides digital wireless service to a portion of a four-state area covering the region from Harrisburg, York and Altoona, Pennsylvania, to Harrisonburg, Virginia, as a Sprint PCS Affiliate of Sprint Nextel. This segment also owns cell site towers built on leased land, and leases space on these towers to both affiliates and non-affiliated service providers.
|
|
*
|
The Wireline segment provides regulated and unregulated voice services, dial-up and DSL internet access, and long-distance access services throughout Shenandoah County and portions of northwestern Augusta County, Virginia, and leases fiber optic facilities, throughout the northern Shenandoah Valley of Virginia, northern Virginia and adjacent areas along the Interstate 81 corridor, including portions of West Virginia and Maryland.
|
|
*
|
The Cable TV segment provides cable television services in Shenandoah County, Virginia, and since December 1, 2008, in various franchise areas in West Virginia and Alleghany County, Virginia.
|
March 31,
|
Dec. 31,
|
March 31,
|
Dec. 31,
|
|||||||||||||
2010
|
2009
|
2009
|
2008
|
|||||||||||||
Wireless Segment
|
||||||||||||||||
Retail PCS Subscribers
|
224,526 | 222,818 | 213,054 | 211,462 | ||||||||||||
PCS Market POPS (000) (1)
|
2,353 | 2,327 | 2,310 | 2,310 | ||||||||||||
PCS Covered POPS (000) (1)
|
2,059 | 2,033 | 1,963 | 1,931 | ||||||||||||
PCS Average Monthly Retail Churn % (2)
|
1.91 | % | 1.99 | % | 2.15 | % | 1.87 | % | ||||||||
CDMA Base Stations (sites)
|
481 | 476 | 419 | 411 | ||||||||||||
EVDO-enabled sites
|
340 | 334 | 237 | 211 | ||||||||||||
EVDO Covered POPS (000) (1)
|
1,968 | 1,940 | 1,717 | 1,663 | ||||||||||||
Towers (3)
|
141 | 138 | 118 | 116 | ||||||||||||
Wireline Segment
|
||||||||||||||||
Telephone Access Lines
|
24,241 | 24,358 | 23,865 | 24,042 | ||||||||||||
Total Switched Access Minutes (000)
|
80,488 | 81,260 | 86,577 | 90,460 | ||||||||||||
Originating Switched Access Minutes (000)
|
23,556 | 22,572 | 25,297 | 25,425 | ||||||||||||
Long Distance Subscribers
|
10,896 | 10,851 | 10,730 | 10,842 | ||||||||||||
Long Distance Calls (000) (4)
|
7,453 | 7,200 | 7,810 | 7,981 | ||||||||||||
Total Fiber Miles
|
64,014 | 58,705 | 50,593 | 50,593 | ||||||||||||
Fiber Route Miles
|
1,570 | 1,558 | 1,109 | 1,109 | ||||||||||||
DSL Subscribers
|
11,477 | 10,985 | 10,157 | 9,918 | ||||||||||||
Dial-up Internet Subscribers
|
2,979 | 3,359 | 4,578 | 4,866 | ||||||||||||
Cable Television Segment
|
||||||||||||||||
Video
|
||||||||||||||||
Homes Passed (5)
|
56,268 | 56,268 | 64,365 | 64,365 | ||||||||||||
Customers (6)
|
23,211 | 22,773 | 24,794 | 24,933 | ||||||||||||
Penetration (7)
|
41.3 | % | 40.5 | % | 38.5 | % | 38.7 | % | ||||||||
High-speed Internet
|
||||||||||||||||
Available Homes (8)
|
27,522 | 25,748 | 19,405 | 19,405 | ||||||||||||
Customers
|
2,780 | 2,083 | 1,198 | 1,128 | ||||||||||||
Penetration
|
10.1 | % | 8.1 | % | 6.2 | % | 5.8 | % | ||||||||
Voice
|
||||||||||||||||
Available Homes
|
6,355 | - | - | - | ||||||||||||
Customers
|
37 | - | - | - | ||||||||||||
Penetration
|
0.6 | % | n/a | n/a | n/a | |||||||||||
Employees (full time equivalents)
|
456 | 456 | 436 | 445 |
|
1)
|
POPS refers to the estimated population of a given geographic area and is based on information purchased from third party sources. Market POPS are those within a market area which the Company is authorized to serve under its Sprint PCS affiliate agreements, and Covered POPS are those covered by the network’s service area.
|
|
2)
|
PCS Average Monthly Retail Churn is the average of the three monthly subscriber turnover, or churn, calculations for the period.
|
|
3)
|
The Company owns two towers that are not used to provide wireless voice services and are not included in these totals.
|
|
4)
|
Originated by customers of the Company’s Telephone subsidiary.
|
|
5)
|
Homes and businesses are considered passed (“homes passed”) if we can connect them to our distribution system without further extending the transmission lines. Homes passed is an estimate based upon the best available information. In December 2009, the Company sold several small systems covering approximately 8,100 video homes passed, 840 high-speed internet available homes, approximately 1,700 video customers and less than 100 high-speed internet customers.
|
|
6)
|
Generally, a dwelling or commercial unit with one or more television sets connected to our distribution system counts as one video customer.
|
|
7)
|
Penetration is calculated by dividing the number of customers by the number of homes passed or available homes, as appropriate.
|
|
8)
|
Homes and businesses are considered available (“available homes”) if we can connect them to our co-axial distribution system without further upgrading the transmission lines and if we offer the service in that area. Homes passed in Shenandoah County are excluded from available homes as we do not offer high-speed internet or voice services over our co-axial distribution network in this market.
|
(in thousands)
|
Three Months Ended
March 31,
|
Change
|
||||||||||||||
2010
|
2009
|
$ | % | |||||||||||||
Operating revenues
|
$ | 41,518 | $ | 40,102 | $ | 1,416 | 3.5 | |||||||||
Operating expenses
|
30,018 | 28,090 | 1,928 | 6.9 | ||||||||||||
Operating income
|
11,500 | 12,012 | (512 | ) | (4.3 | ) | ||||||||||
Other income (expense)
|
(290 | ) | (991 | ) | 701 | 70.7 | ||||||||||
Income tax expense
|
4,641 | 4,864 | (223 | ) | (4.6 | ) | ||||||||||
Net income from continuing operations
|
$ | 6,569 | $ | 6,157 | $ | 412 | 6.7 |
(in thousands)
|
Three Months Ended
March 31,
|
Change
|
||||||||||||||
2010
|
2009
|
$ | % | |||||||||||||
Segment operating revenues
|
||||||||||||||||
Wireless service revenue
|
$ | 26,527 | $ | 25,360 | $ | 1,167 | 4.6 | |||||||||
Tower lease revenue
|
1,948 | 1,700 | 248 | 14.6 | ||||||||||||
Equipment revenue
|
1,218 | 1,270 | (52 | ) | (4.1 | ) | ||||||||||
Other revenue
|
540 | 474 | 66 | 13.9 | ||||||||||||
Total segment operating revenues
|
30,233 | 28,804 | 1,429 | 5.0 | ||||||||||||
Segment operating expenses
|
||||||||||||||||
Cost of goods and services, exclusive of depreciation and amortization shown separately below
|
9,878 | 9,036 | 842 | 9.3 | ||||||||||||
Selling, general and administrative, exclusive of depreciation and amortization shown separately below
|
4,103 | 4,167 | (64 | ) | (1.5 | ) | ||||||||||
Depreciation and amortization
|
5,239 | 4,872 | 367 | 7.5 | ||||||||||||
Total segment operating expenses
|
19,220 | 18,075 | 1,145 | 6.3 | ||||||||||||
Segment operating income
|
$ | 11,013 | $ | 10,729 | $ | 284 | 2.6 |
(in thousands)
|
Three Months Ended
March 31,
|
Change
|
||||||||||||||
2010
|
2009
|
$ | % | |||||||||||||
Segment operating revenues
|
||||||||||||||||
Service revenue
|
$ | 3,618 | $ | 3,448 | $ | 170 | 4.9 | |||||||||
Access revenue
|
3,204 | 3,015 | 189 | 6.3 | ||||||||||||
Facilities lease revenue
|
3,363 | 3,341 | 22 | 0.7 | ||||||||||||
Equipment revenue
|
19 | 34 | (15 | ) | (44.1 | ) | ||||||||||
Other revenue
|
1,176 | 1,315 | (139 | ) | (10.6 | ) | ||||||||||
Total segment operating revenues
|
11,380 | 11,153 | 227 | 2.0 | ||||||||||||
Segment operating expenses
|
||||||||||||||||
Cost of goods and services, exclusive of depreciation and amortization shown separately below
|
4,163 | 4,006 | 157 | 3.9 | ||||||||||||
Selling, general and administrative, exclusive of depreciation and amortization shown separately below
|
1,832 | 1,670 | 162 | 9.7 | ||||||||||||
Depreciation and amortization
|
1,925 | 2,152 | (227 | ) | (10.5 | ) | ||||||||||
Total segment operating expenses
|
7,920 | 7,828 | 92 | 1.2 | ||||||||||||
Segment operating income
|
$ | 3,460 | $ | 3,325 | $ | 135 | 4.1 |
(in thousands)
|
Three Months Ended
March 31,
|
Change
|
||||||||||||||
2010
|
2009
|
$
|
%
|
|||||||||||||
|
||||||||||||||||
Segment operating revenues
|
||||||||||||||||
Service revenue
|
$ | 3,535 | $ | 3,606 | $ | (71 | ) | (2.0 | ) | |||||||
Equipment and other revenue
|
387 | 238 | 149 | 62.6 | ||||||||||||
Total segment operating revenues
|
3,922 | 3,844 | 78 | 2.0 | ||||||||||||
Segment operating expenses
|
||||||||||||||||
Cost of goods and services, exclusive of depreciation and amortization shown separately below
|
3,328 | 2,836 | 492 | 17.3 | ||||||||||||
Selling, general and administrative, exclusive of depreciation and amortization shown separately below
|
1,525 | 1,182 | 343 | 29.0 | ||||||||||||
Depreciation and amortization
|
1,090 | 745 | 345 | 46.3 | ||||||||||||
Total segment operating expenses
|
5,943 | 4,763 | 1,180 | 24.8 | ||||||||||||
Segment operating loss
|
$ | (2,021 | ) | $ | (919 | ) | $ | (1,102 | ) | (119.9 | ) |
ITEM
3.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
ITEM
4.
|
CONTROLS AND PROCEDURES
|
PART II.
|
OTHER INFORMATION
|
ITEM
1A.
|
Risk Factors
|
ITEM
2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
Number of Shares
Purchased
|
Average Price Paid per Share
|
|||||||
January 1 to January 31
|
1 | $ | 18.09 | |||||
February 1 to February 28
|
835 | $ | 17.97 | |||||
March 1 to March 31
|
1,983 | $ | 18.86 | |||||
Total
|
2,819 | $ | 18.60 |
ITEM
6.
|
Exhibits
|
10.43
|
Asset Purchase Agreement dated as of April 16, 2010, between JetBroadband VA, LLC, Helicon Cable Communications, LLC, JetBroadband WV, LLC, JetBroadband Holdings, LLC, Helicon Cable Holdings, LLC, Shentel Cable Company and Shenandoah Telecommunications Company, filed as Exhibit 10.43 to the Company’s Current Report on Form 8-K, dated April 16, 2010.
|
10.44
|
Addendum X dated March 15, 2010 to Sprint PCS Management Agreement by and among Sprint Spectrum L.P., WirelessCo, L.P., APC PCS, LLC, PhillieCo, L.P., Sprint Communications Company L.P. and Shenandoah Personal Communications Company.
|
31.1
|
Certification of President and Chief Executive Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934.
|
31.2
|
Certification of Vice President - Finance and Chief Financial Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934.
|
32
|
Certifications pursuant to Rule 13a-14(b) under the Securities Exchange Act of 1934 and 18 U.S.C. § 1350.
|
SHENANDOAH TELECOMMUNICATIONS COMPANY
|
|
(Registrant)
|
|
/s/Adele M. Skolits
|
|
Adele M. Skolits
|
|
Vice President - Finance and Chief Financial Officer
|
|
Date: May 7, 2010
|
|
Exhibit No
.
|
Exhibit
|
|
10.43
|
Asset Purchase Agreement dated as of April 16, 2010, between JetBroadband VA, LLC, Helicon Cable Communications, LLC, JetBroadband WV, LLC, JetBroadband Holdings, LLC, Helicon Cable Holdings, LLC, Shentel Cable Company and Shenandoah Telecommunications Company, filed as Exhibit 10.43 to the Company’s Current Report on Form 8-K, dated April 16, 2010.
|
|
Addendum X dated March 15, 2010 to Sprint PCS Management Agreement by and among Sprint Spectrum L.P., WirelessCo, L.P., APC PCS, LLC, PhillieCo, L.P., Sprint Communications Company L.P. and Shenandoah Personal Communications Company.
|
|
Certification of President and Chief Executive Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934.
|
|
Certification of Vice President - Finance and Chief Financial Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934.
|
|
Certifications pursuant to Rule 13a-14(b) under the Securities Exchange Act of 1934 and 18 U.S.C. 1350.
|
Manager:
|
SHENANDOAH PERSONAL COMMUNICATIONS COMPANY
|
Service Area BTAs:
|
Altoona, PA #12
|
|
(1)
|
Addendum I dated as of November 5, 1999,
|
|
(2)
|
Addendum II dated as of August 31, 2000,
|
|
(3)
|
Addendum III dated as of September 26, 2001,
|
|
(4)
|
Addendum IV dated as of May 22, 2003,
|
|
(5)
|
Addendum V dated as of January 30, 2004,
|
|
(6)
|
Addendum VI dated as of May 24, 2004,
|
|
(7)
|
Addendum VII dated as of March 13, 2007,
|
|
(8)
|
Addendum VIII dated as of September 28, 2007; and
|
|
(9)
|
Addendum IX dated as of April 14, 2009.
|
SPRINT SPECTRUM L.P.
|
||||
By:
|
/s/ Jeff Hallock
|
|||
Name:
|
Jeff Hallock
|
|||
Title:
|
VP, National Distribution
|
|||
WIRELESSCO, L.P.
|
||||
By:
|
/s/ Jeff Hallock
|
|||
Name:
|
Jeff Hallock
|
|||
Title:
|
VP, National Distribution
|
|||
APC PCS, LLC
|
||||
By:
|
/s/ Jeff Hallock
|
|||
Name:
|
Jeff Hallock
|
|||
Title:
|
VP, National Distribution
|
|||
PHILLIECO, L.P.
|
||||
By:
|
/s/ Jeff Hallock
|
|||
Name:
|
Jeff Hallock
|
|||
Title:
|
VP, National Distribution
|
|||
SPRINT COMMUNICATIONS COMPANY L.P.
|
||||
By:
|
/s/ Jeff Hallock
|
|||
Name:
|
Jeff Hallock
|
|||
Title:
|
VP, National Distribution
|
SHENANDOAH PERSONAL
|
||||
COMMUNICATIONS COMPANY
|
||||
BY:
|
/s/ Christopher E. French | |||
Name:
|
Christopher E. French
|
|||
Tilte:
|
President
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Shenandoah Telecommunications Company;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e
))
and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Shenandoah Telecommunications Company;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
/S/CHRISTOPHER E. FRENCH
|
|
Christopher E. French
|
|
President and Chief Executive Officer
|
|
May 7, 2010
|
|
/
S/ADELE M. SKOLITS
|
|
Adele M. Skolits
|
|
Vice President - Finance and
|
|
Chief Financial Officer
|
|
May 7, 2010
|