D&E Communications, Inc. ("D&E" or the "Company") (NASDAQ:
DECC), a leading provider of integrated communications services in
central and eastern Pennsylvania, today announced the results of
its operations for the second quarter ended June 30, 2009.
For the second quarter of 2009, the Company reported a net loss
attributable to common shareholders of $0.2 million, or $0.02 per
share, compared to a net loss attributable to common shareholders
of $11.9 million, or $0.82 per share, for the same period last
year. Operating income for the second quarter of 2009 was $1.7
million, compared to an operating loss of $18.1 million in the
second quarter of 2008. Total operating revenue for the second
quarter of 2009 was $35.8 million, compared to $37.5 million in the
second quarter of 2008.
Results for the second quarter of 2009 included a non-cash
intangible asset impairment of $5.5 million ($3.2 million, or $0.22
per share, after tax) on the Wireline franchise intangible assets
as a result of the Company's annual test for impairment of goodwill
and intangible assets as of April 30, 2009. In the same period of
the prior year, the Company recorded a non-cash intangible asset
impairment of $26.2 million ($15.3 million, or $1.06 per share,
after tax) in conjunction with the annual impairment test in
2008.
Operating income increased $19.8 million due to a reduction in
operating expenses of $21.5 million primarily due to the decline in
the intangible asset impairment of $20.7 million, partially offset
by a decline in operating revenue of $1.7 million. Wireline
depreciation expense decreased $0.4 million ($0.2 million, or $0.02
per share, after tax) primarily due to certain fixed assets
becoming fully depreciated in June and July 2008. In the second
quarter of 2009, the Company incurred costs of $0.8 million ($0.5
million, or $0.04 per share, after tax) related to its proposed
merger with Windstream Corporation and other operating expenses
decreased $1.2 million. The revenue decrease of $1.7 million for
the second quarter of 2009 was the result of decreases in Wireline
and Systems Integration segment revenues of $1.5 million and $0.2
million, respectively.
Adjusted net income attributable to common shareholders for the
second quarter of 2009, before the items described above, was $3.3
million, or $0.22 per share. Adjusted net income attributable to
common shareholders for the second quarter of 2008, before the
items described above, was $3.4 million, or $0.24 per share.
Reconciliation between the non-generally accepted accounting
principles ("non-GAAP") financial measure of adjusted net income
and the GAAP financial measure of net income is provided in the
table below. Management believes the non-GAAP measure provides
useful information to both management and investors by excluding
certain nonrecurring revenues and expenses that may not be
indicative of the Company's core operating results, and will
enhance the ability of management and investors to compare our
results of operations from period to period.
For the six months ended June 30, 2009, the Company reported net
income attributable to common shareholders of $3.8 million, or
$0.26 per share, compared to a net loss attributable to common
shareholders of $6.8 million, or $0.47 per share, for the same
period last year. Operating income for the six months ended June
30, 2009 was $10.4 million, compared to an operating loss of $10.0
million in the six months ended June 30, 2008. The Company reported
total operating revenue of $71.8 million for the six months ended
June 30, 2009, compared to $75.3 million for the same period last
year.
Included in the 2009 six-month results was the non-cash
intangible asset impairment on the Wireline franchise intangible
assets and the merger costs described above. The Company offered a
one-time payment to non-union employees who were eligible and
elected to retire by December 31, 2009. The Company recorded an
expense of $0.2 million ($0.1 million, or $0.01 per share, after
tax) in the first six months of 2009 for those employees who
elected to retire. Wireline depreciation expense decreased $1.2
million ($0.8 million, or $0.08 per share, after tax) primarily due
to certain fixed assets becoming fully depreciated in June and July
2008. The Company recognized a pension curtailment gain of $1.0
million, of which $0.9 million ($0.5 million, or $0.03 per share,
after tax) was recorded as a reduction of operating expenses and
the remaining $0.1 million was capitalized.
Included in the 2008 six-month results was the non-cash
intangible asset impairment on the Wireline franchise intangible
assets described above. The 2008 six-month results were also
affected by income of $2.9 million ($1.7 million, or $0.12 per
common share, after tax) from the termination of a lease guarantee
and a reserve of $0.2 million ($0.1 million, or $0.01 per share,
after tax) recognized on a note receivable from the sale of assets
in 2006. Adjusted net income attributable to common shareholders,
before the items described above, was $6.3 million, or $0.44 per
share, for the six months ended June 30, 2009, compared to $6.9
million, or $0.48 per share, for the six months ended June 30,
2008.
The Company announced on May 11, 2009 that it has entered into
an Agreement and Plan of Merger (the "Merger Agreement"), with
Windstream Corporation, a Delaware corporation ("Windstream"),
pursuant to which the Company will merge with and into Delta Merger
Sub, Inc., a wholly owned subsidiary of Windstream (the "Merger"
and the "Merger Sub," respectively), with Merger Sub continuing as
the surviving corporation. Pursuant to the Merger Agreement, at the
effective time of the Merger, each outstanding share of common
stock of the Company (the "Shares") will be canceled and converted
automatically into the right to receive $5.00 per share in cash,
without interest, and 0.65 shares of Windstream common stock. The
Merger is conditioned, on certain customary conditions, including
the approval of the Merger Agreement by the shareholders of the
Company, the approval of the Federal Communications Commission and
the Pennsylvania Public Utility Commission and other regulatory
approvals.
"Second quarter 2009 results were negatively impacted by the
$5.5 million non-cash franchise intangible asset impairment,
reductions in revenue due to a decrease in RLEC access lines and
minutes of use and the merger related costs. However, we did see
increases in broadband subscribers, video subscribers and CLEC
access lines as well as revenue associated with dedicated circuits
and IP VPN services," stated James W. Morozzi, D&E's President
and Chief Executive Officer. "Since our May 11, 2009 merger
announcement, we have continued to focus on serving our customers
and have worked collaboratively with Windstream on integration
planning and the merger approval processes."
The following table provides a reconciliation of reported and
adjusted net income (loss) attributable to common shareholders and
earnings (loss) per share:
(Dollar amounts
in millions,
except per-
share amounts)
Three Months Ended Six Months Ended
June 30, June 30,
2009 2008 2009 2008
-------------- -------------- -------------- --------------
Per- Per- Per- Per-
Amount Share Amount Share Amount Share Amount Share
------ ------ ------ ------ ------ ------ ------ ------
Reported net
income (loss)
attributable
to common
share-
holders $ (0.2) $(0.02) $(11.9) $(0.82) $ 3.8 $ 0.26 $ (6.8) $(0.47)
Items
impacting
comparability:
Intangible
asset
impairment,
net of tax 3.2 0.22 15.3 1.06 3.2 0.22 15.3 1.06
Merger costs,
net of tax 0.5 0.04 -- -- 0.5 0.04 -- --
Retirement
payments,
net of tax -- -- -- -- 0.1 0.01 -- --
Note
receivable
reserve,
net of tax -- -- -- -- -- -- 0.1 0.01
Decrease in
depreciation,
net of tax,
compared to
2008 (0.2) (0.02) -- -- (0.8) (0.05) -- --
Pension
curtailment
gain, net
of tax -- -- -- -- (0.5) (0.04) -- --
Lease
guarantee
termination,
net of tax -- -- -- -- -- -- (1.7) (0.12)
------ ------ ------ ------ ------ ------ ------ ------
Adjusted
net income
(loss)
attributable
to common
share-
holders $ 3.3 $ 0.22 $ 3.4 $ 0.24 $ 6.3 $ 0.44 $ 6.9 $ 0.48
====== ====== ====== ====== ====== ====== ====== ======
Summary Statistics
June 30, June 30, %
2009 2008 Change Change
-------- -------- ------- -------
RLEC access lines 116,095 122,461 (6,366) (5.2%)
CLEC access lines 46,900 46,462 438 0.9%
DSL/High-Speed Internet Subscribers 44,005 39,888 4,117 10.3%
Dial-up Internet subscribers 1,821 2,683 (862) (32.1%)
Video subscribers 7,864 7,425 439 5.9%
Web-hosting customers 952 1,002 (50) (5.0%)
-------- -------- -------
Total customer connections 217,637 219,921 (2,284) (1.0%)
======== ======== =======
On a segment by segment basis, the Company reported the
following information:
Wireline
Second quarter 2009 Wireline segment revenues were $34.8 million
compared to $36.2 million for the second quarter of 2008. The
decrease was due in large part to lower network access revenue of
$0.7 million primarily due to a decline in minutes of use and
subscriber line charges. Local telephone service revenue decreased
$0.4 million primarily due to a decrease in RLEC access lines. Long
distance revenue declined $0.1 million primarily due to a decline
in the average rate per minute of use.
Wireline operating expenses for the second quarter of 2009 were
$32.7 million compared to $53.9 million during the same period last
year. Intangible asset impairment expense decreased $20.7 million.
Depreciation expense decreased $0.4 million primarily due to
certain fixed assets that became fully depreciated in June and July
of 2008. Network access expense decreased $0.5 million primarily
due to a change in the routing of long distance calls. Corporate
overhead expenses increased $0.9 million due to merger related
costs.
Operating income was $2.1 million for the second quarter of 2009
compared to an operating loss of $17.7 million for the second
quarter of 2008.
The Company completed its annual impairment evaluation of
goodwill and intangible assets as of April 30, 2009. In evaluating
impairment, we estimate the sum of the expected future cash flows
derived from such goodwill and intangible assets. Based on the
results of the evaluation, a non-cash franchise asset impairment
charge of $5.5 million ($3.2 million after tax) was recognized for
the three months ended June 30, 2009. The 2009 impairment charge
was primarily the result of an increase in the discount rate from
9.75% to 12.65%, the rate used in the Company's discounted cash
flow model to determine fair value of the franchise intangible
asset. Due to the proximity of the annual impairment assessment to
the Merger announcement, the discount rate assumption was based on,
in addition to a number of other factors, estimates made by the
Company of cash flows that could be generated by a market
participant.
In the three months ended June 30, 2008, we recognized a
non-cash intangible asset impairment charge of $26.2 million ($15.3
million after tax). A decline in the estimated future regulated
cash flows of the Company's Conestoga and Buffalo Valley RLECs
indicated that the estimated fair value of the franchise intangible
assets was less than their carrying amount. We therefore recognized
a non-cash impairment charge of $26.2 million to reduce the
carrying amount of these assets to their estimated fair value. The
reduction in the estimated future regulated cash flows is the
result of management's estimates of reductions in access lines, and
corresponding reductions in minutes of use, long distance revenues
and network access revenues that are associated with access lines.
The 2009 and 2008 annual impairment evaluations did not indicate an
impairment of goodwill or the customer relationship intangible
assets.
In conjunction with the 2009 annual impairment evaluation,
effective May 1, 2009, the Company prospectively changed the
estimated useful life of the franchise intangible assets and will
amortize the franchise assets over a period of twenty-five years.
As a result of this change, the Company recorded amortization
expense of $0.3 million on the franchise assets for the three
months ended June 30, 2009.
Systems Integration
System Integration revenue for the second quarter of 2009 was
$0.7 million compared to $0.9 million for the same period last
year. The decline was due to lower services revenue of $0.1 million
and lower product sales revenue of $0.1 million.
Second quarter 2009 operating expenses were $0.8 million
compared to $0.9 million in the second quarter of 2008. Labor and
benefits costs declined approximately $0.1 million primarily due to
a reduction in the number of employees.
The operating loss for the second quarter of 2009 was $0.1
million compared to an operating income of $8,000 in the second
quarter of 2009.
Adjusted EBITDA
We present the non-GAAP (generally accepted accounting
principles) measure Adjusted EBITDA (as defined herein) below and
anticipate referring to this measure in the conference call
referenced below. Presentation of Adjusted EBITDA is consistent
with how we evaluate performance of our business segments and
Adjusted EBITDA is frequently used by securities analysts,
investors and other interested parties in the evaluation of
companies in our industry. Adjusted EBITDA is a non-GAAP operating
measure under Regulation G of the Securities and Exchange
Commission. We compute Adjusted EBITDA by adding depreciation,
amortization and goodwill and intangible asset impairments to
operating income. Each of these GAAP financial measures is a line
item in our income statement and thus Adjusted EBITDA can be
reconciled to net income (loss) attributable to common
shareholders, the most comparable GAAP financial measure to it.
However, other companies in our industry may calculate Adjusted
EBITDA differently than we do. Adjusted EBITDA is not a measurement
of financial performance under GAAP and should not be considered as
a substitute for cash flow from operating activities as a measure
of liquidity or a substitute for net income (loss) as an indicator
of operating performance or any other measure of performance
derived in accordance with GAAP. Net income (loss) attributable to
common shareholders is reconciled to consolidated Adjusted EBITDA
for the three and six months ended June 30, 2009 and 2008,
respectively, in the following table:
(Dollar amounts in Three months ended Six months ended
thousands) June 30, June 30,
---------------------- ----------------------
2009 2008 2009 2008
---------- ---------- ---------- ----------
Consolidated Adjusted
EBITDA $ 14,667 $ 15,879 $ 30,431 $ 31,849
Depreciation and
amortization (7,426) (7,768) (14,484) (15,616)
Intangible asset impairment (5,500) (26,200) (5,500) (26,200)
---------- ---------- ---------- ----------
Operating income (loss) 1,741 (18,089) 10,447 (9,967)
Interest expense, net of
interest capitalized (2,767) (2,951) (5,669) (6,300)
Other income (expense), net 53 115 646 3,533
Income (taxes) benefit 745 9,000 (1,600) 5,957
Dividends on utility
preferred stock (17) (17) (33) (33)
---------- ---------- ---------- ----------
Net income (loss)
attributable to common
shareholders $ (245) $ (11,942) $ 3,791 $ (6,810)
========== ========== ========== ==========
Operating income (loss) is reconciled to segment and
consolidated Adjusted EBITDA for the six months ended June 30, 2009
and 2008, respectively, in the following table:
(Dollar amounts in
thousands)
Systems Corporate
Wireline Integration & Other Consolidated
----------- ----------- ----------- -----------
Six months ended June 30, 2009
--------------------------------------------------
Adjusted EBITDA $ 30,707 $ (133) $ (143) $ 30,431
Depreciation and
amortization (13,957) (46) (481) (14,484)
Intangible asset
impairment (5,500) -- -- (5,500)
----------- ----------- ----------- -----------
Operating income (loss) $ 11,250 $ (179) $ (624) $ 10,447
=========== =========== =========== ===========
(Dollar amounts in thousands)
Systems Corporate
Wireline Integration & Other Consolidated
----------- ----------- ----------- -----------
Six months ended June 30, 2008
--------------------------------------------------
Adjusted EBITDA $ 32,251 $ (66) $ (336) $ 31,849
Depreciation and
amortization (15,141) (87) (388) (15,616)
Intangible asset
impairment (26,200) -- -- (26,200)
----------- ----------- ----------- -----------
Operating income (loss) $ (9,090) $ (153) $ (724) $ (9,967)
=========== =========== =========== ===========
Conference Call
The Company will host a conference call and live webcast on
August 6, 2009 at 10:00 a.m. Eastern Time. Parties in the United
States and Canada can call 800-289-0572 to access the conference
call. Parties outside the United States and Canada can access the
call at 913-312-1270. The live webcast of the conference call will
be accessible from the "Investors" section of the Company's website
(www.decommunications.com). The webcast will be archived for a
period of 90 days.
Additional Information and Where to Find It
This press release may be deemed to be solicitation material in
respect of the proposed merger of D&E Communications and
Windstream. In connection with the proposed transaction, Windstream
has filed with the SEC a registration statement on Form S-4 that
includes a preliminary proxy statement of D&E and also
constitutes a prospectus of Windstream. At the appropriate time,
D&E will mail the definitive proxy statement/prospectus to its
shareholders. Before making any voting or investment decision,
investors are urged to read the definitive proxy
statement/prospectus when it becomes available because it will
contain important information about the proposed transaction. You
may obtain copies of all documents filed with the SEC regarding
this transaction, free of charge, at the SEC's website at
www.sec.gov. Free copies of these documents may also be obtained
from Windstream upon written request to Windstream Investor
Relations, 4001 Rodney Parham Road, Little Rock, Arkansas 72212 or
by calling (866) 320-7922, or from D&E Communications upon
written request to D&E Communications, P.O. Box 458, Ephrata,
Pennsylvania 17522, Attention: Corporate Secretary or by calling
(877) 433-8632.
D&E Communications, Windstream, and their respective
officers and directors may be deemed to be soliciting proxies from
D&E Communications' shareholders in favor of the proposed
merger. Information regarding D&E Communications and
Windstream's respective directors and executive officers can be
found in their respective Annual Reports on Form 10-K filed with
the SEC. Additional information regarding the interests of such
potential participants will be included in the definitive proxy
statement/prospectus and the other relevant documents filed with
the SEC when they become available.
About D&E Communications
D&E is a leading integrated communications provider offering
high-speed data, Internet access, local and long distance
telephone, business continuity and co-location services, data and
professional IT services, network monitoring, security solutions
and video services. Based in Lancaster County, D&E has been
serving communities in central and eastern Pennsylvania for more
than 100 years. For more information, visit
www.decommunications.com.
This press release contains forward-looking statements. These
forward-looking statements are found in various places throughout
this press release and include, without limitation, statements
regarding financial and other information. These statements are
based upon the current beliefs and expectations of D&E's
management concerning the development of our business, are not
guarantees of future performance and involve a number of risks,
uncertainties, and other important factors that could cause actual
developments and results to differ materially from our
expectations. Those factors include, but are not limited to:
changes in the competitive and technological environment in which
we operate; our ability to further penetrate our markets and the
related cost of that effort; reductions in rates or call volume
that generate network access revenues; government and regulatory
policies at both the federal and state levels, including potential
intercarrier compensation reform; current economic conditions; a
decline in value of our pension fund assets; our current level of
debt financing; potential future goodwill or intangible asset
impairment charges; and our ability to fund necessary investment in
plant and equipment and other key factors that we have indicated
could adversely affect our business and financial performance
contained in our past and future filings and reports, including
those filed with the United States Securities and Exchange
Commission. D&E undertakes no obligation to revise or update
its forward-looking statements whether as a result of new
information, future events, or otherwise.
D&E COMMUNICATIONS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, expect per share amounts)
(Unaudited)
Three Months Ended Six Months Ended
-------------------- --------------------
June 30, June 30,
-------------------- --------------------
OPERATING REVENUES 2009 2008 2009 2008
--------- --------- --------- ---------
Communication service
revenues $ 34,650 $ 36,070 $ 69,423 $ 72,683
Communication products sold 462 742 806 1,201
Other 729 737 1,551 1,462
--------- --------- --------- ---------
Total operating revenues 35,841 37,549 71,780 75,346
--------- --------- --------- ---------
OPERATING EXPENSES
Communication service expenses
(exclusive of depreciation and
amortization below) 11,121 12,296 22,389 24,552
Cost of communication
products sold 318 605 578 977
Depreciation and amortization 7,426 7,768 14,484 15,616
Marketing and customer services 3,743 3,909 7,330 7,848
General and administrative
services 5,157 4,860 10,217 10,120
Merger costs 835 -- 835 --
Intangible asset impairment 5,500 26,200 5,500 26,200
--------- --------- --------- ---------
Total operating expenses 34,100 55,638 61,333 85,313
--------- --------- --------- ---------
Operating income (loss) 1,741 (18,089) 10,447 (9,967)
--------- --------- --------- ---------
OTHER INCOME (EXPENSE)
Interest expense, net of
interest capitalized (2,767) (2,951) (5,669) (6,300)
Other, net 53 115 646 3,533
--------- --------- --------- ---------
Total other income
(expense) (2,714) (2,836) (5,023) (2,767)
--------- --------- --------- ---------
Income (loss) before income
taxes (973) (20,925) 5,424 (12,734)
INCOME TAXES (BENEFIT) (745) (9,000) 1,600 (5,957)
NET INCOME (LOSS) (228) (11,925) 3,824 (6,777)
NONCONTROLLING INTERESTS
Dividends on utility
preferred stock 17 17 33 33
--------- --------- --------- ---------
NET INCOME (LOSS) ATTRIBUTABLE
TO COMMON SHAREHOLDERS $ (245) $ (11,942) $ 3,791 $ (6,810)
========= ========= ========= =========
Weighted average common shares
outstanding (basic) 14,345 14,481 14,374 14,472
Weighted average common shares
outstanding (diluted) 14,345 14,481 14,390 14,472
BASIC AND DILUTED EARNINGS PER
COMMON SHARE
Earnings (loss) per common
share $ (0.02) $ (0.82) $ 0.26 $ (0.47)
========= ========= ========= =========
Dividends per common share $ 0.12 $ 0.12 $ 0.25 $ 0.25
========= ========= ========= =========
D&E COMMUNICATIONS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In Thousands)
June 30, December 31,
ASSETS 2009 2008
------------ ------------
CURRENT ASSETS
Cash and cash equivalents $ 12,086 $ 18,280
Accounts receivable, net of reserves of $673
and $466 13,269 13,086
Inventories-materials and supplies 2,674 2,651
Prepaid expenses 6,582 9,367
Other 2,145 2,500
------------ ------------
TOTAL CURRENT ASSETS 36,756 45,884
------------ ------------
PROPERTY, PLANT AND EQUIPMENT
In service 424,343 417,209
Under construction 6,143 5,235
------------ ------------
430,486 422,444
Less accumulated depreciation 267,824 258,642
------------ ------------
162,662 163,802
------------ ------------
OTHER ASSETS
Goodwill 138,441 138,441
Intangible assets, net of accumulated
amortization 88,895 97,344
Other 8,045 7,449
------------ ------------
235,381 243,234
------------ ------------
TOTAL ASSETS $ 434,799 $ 452,920
============ ============
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Long-term debt maturing within one year $ 7,079 $ 7,076
Accounts payable and accrued liabilities 10,029 10,690
Accrued taxes 307 543
Accrued interest and dividends 1,228 1,178
Advance billings, customer deposits and other 4,659 4,706
Derivative financial instruments 1,928 3,091
------------ ------------
TOTAL CURRENT LIABILITIES 25,230 27,284
------------ ------------
LONG-TERM DEBT 175,513 179,054
------------ ------------
OTHER LIABILITIES
Deferred income taxes 49,007 50,071
Defined benefit plans 21,531 34,749
Other 5,554 5,181
------------ ------------
76,092 90,001
------------ ------------
COMMITMENTS AND CONTINGENCIES
EQUITY
Common shareholders' equity:
Common stock, par value $0.16, authorized
shares-100,000; issued shares-16,313 at
June 30, 2009 and 16,187 at December 31,
2008; outstanding shares-14,394 at June 30,
2009 and 14,410 at December 31, 2008 2,610 2,590
Additional paid-in capital 165,045 164,526
Accumulated other comprehensive loss (20,352) (21,908)
Retained earnings 30,090 29,917
Treasury stock at cost, 1,919 shares at June 30,
2009 and 1,777 shares at December 31, 2008 (20,875) (19,990)
------------ ------------
Total common shareholders' equity 156,518 155,135
Noncontrolling interests:
Preferred stock of utility subsidiary,
Series A 4 1/2%, par value $100, cumulative,
callable at par at the option of the Company,
authorized 20 shares, outstanding 14 shares 1,446 1,446
------------ ------------
TOTAL EQUITY 157,964 156,581
------------ ------------
TOTAL LIABILITIES AND EQUITY $ 434,799 $ 452,920
============ ============
D&E COMMUNICATIONS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
(Unaudited)
Six Months Ended
June 30,
2009 2008
--------- ---------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $ 3,824 $ (6,777)
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 14,484 15,616
Bad debt expense 520 203
Deferred income taxes (2,034) (9,852)
Stock-based compensation expense 367 245
Gain on retirement of property, plant and
equipment (42) (41)
Intangible asset impairment 5,500 26,200
Termination of lease guarantee -- (2,904)
Note receivable reserve -- 200
Changes in operating assets and liabilities:
Accounts receivable (703) 380
Inventories (22) 39
Prepaid expenses 2,735 (4,435)
Accounts payable and accrued liabilities (533) (3,048)
Accrued taxes and accrued interest (186) (688)
Advance billings, customer deposits and other (47) 373
Defined benefit plans (11,971) (1,454)
Other, net 219 (281)
--------- ---------
Net Cash Provided by Operating Activities 12,111 13,776
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property, plant and equipment (10,821) (13,576)
Proceeds from sales of property, plant and
equipment 340 409
Collection of note receivable -- 49
--------- ---------
Net Cash Used In Investing Activities (10,481) (13,118)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES
Dividends on common stock (3,443) (3,475)
Preferred dividends on noncontrolling interests (33) (33)
Payments on long-term debt (3,537) (4,285)
Proceeds from issuance of common stock and stock
options exercised 74 60
Excess tax benefits from stock compensation plans -- 37
Purchase of treasury stock (885) --
--------- ---------
Net Cash Used In Financing Activities (7,824) (7,696)
--------- ---------
DECREASE IN CASH AND CASH EQUIVALENTS (6,194) (7,038)
CASH AND CASH EQUIVALENTS BEGINNING OF PERIOD 18,280 17,845
--------- ---------
END OF PERIOD $ 12,086 $ 10,807
========= =========
CONTACT: Thomas E. Morell Sr. Vice President, Chief Financial
Officer, Secretary and Treasurer (717) 738-8315
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