HUNGARIAN TELEPHONE & CABLE CORP - 10-Q Quarterly Report

Back to GetFilings.com

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2003

Commission file number 1-11484

HUNGARIAN TELEPHONE AND CABLE CORP.

(Exact name of registrant as specified in its charter)

Delaware		13-3652685
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

1201 Third Avenue, Suite 3400 Seattle, WA 98101-3034

(Address of principal executive offices)

(206) 654-0204

(Registrant’s telephone number, including area code)

Indicate by check mark 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 ninety days. Yes x No ¨

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x

Indicate the number of shares outstanding of each of the issuer’s classes of Common Stock as of the latest possible date:

Common Stock, $.001 par value		12,195,680 Shares
(Class)		(Outstanding at May 13, 2003)

HUNGARIAN TELEPHONE AND CABLE CORP. AND SUBSIDIARY

Table of Contents

		Page No.
Part I. Financial Information:

Consolidated Condensed Balance Sheets		2
Consolidated Condensed Statements of Income		3
Consolidated Condensed Statements of Stockholders’ Equity		4
Consolidated Condensed Statements of Cash Flows		5
Notes to Consolidated Condensed Financial Statements		6
Management’s Discussion and Analysis of Financial Condition and Results of Operations		12
Quantitative and Qualitative Disclosure about Market Risk		21

Part II. Other Information		22

Signatures		25

Part I. Financial Information

HUNGARIAN TELEPHONE AND CABLE CORP. AND SUBSIDIARY

Item 1. Financial Statements

Consolidated Condensed Balance Sheets

(In thousands, except share data)

	March 31, 2003			December 31, 2002
	(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	18,495		13,922
Restricted cash		32		22
Accounts receivable, net		5,566		5,646
Current deferred tax asset		1,293		1,398
Other current assets		5,047		4,016

Total current assets		30,433		25,004

Property, plant and equipment, net		115,678		118,721

Goodwill, less accumulated amortization		7,843		7,923
Other intangibles, less accumulated amortization		4,189		4,289
Deferred costs		5,046		5,709
Deferred tax asset		4,087		4,369
Other assets		2,750		3,044

Total assets	$	170,026		169,059

Liabilities and Stockholders’ Equity
Current liabilities:
Current installments of long-term debt	$	19,285		18,872
Excess cash amounts due under long-term debt agreement		—		2,525
Accounts payable		1,626		1,304
Accruals		3,979		4,099
Other current liabilities		2,153		2,052
Due to related parties		412		386

Total current liabilities		27,455		29,238
Long-term debt, excluding current installments		104,203		102,165
Deferred credits and other liabilities		7,104		7,808

Total liabilities		138,762		139,211

Commitments and Contingencies

Stockholders’ equity:
Cumulative Convertible Preferred stock, $.01 par value; $70.00 liquidation value. Authorized 200,000 shares; issued and outstanding 30,000 shares in 2003 and 2002		—		—
Common stock, $.001 par value. Authorized 25,000,000 shares; issued and outstanding 12,185,680 shares in 2003 and 12,103,180 in 2002		12		12
Additional paid-in capital		145,383		144,778
Accumulated deficit		(130,903	)	(131,917	)
Accumulated other comprehensive income		16,772		16,975

Total stockholders’ equity		31,264		29,848

Total liabilities and stockholders’ equity	$	170,026		169,059

See accompanying notes to consolidated financial statements.

Part I. Financial Information

HUNGARIAN TELEPHONE AND CABLE CORP. AND SUBSIDIARY

Consolidated Condensed Statements of Income

For the Three Month Periods Ended March 31, 2003 and 2002

(In thousands, except share and per share data)

(unaudited)

	2003			2002
Telephone service revenues, net	$	15,017		$	11,859
Operating expenses:
Operating and maintenance expenses		5,321			4,366
Depreciation and amortization		2,735			2,328

Total operating expenses		8,056			6,694

Income from operations		6,961			5,165
Other income (expenses):
Foreign exchange (losses) gains, net		(3,328	)		669
Interest expense		(2,454	)		(2,543	)
Interest income		192			271
Other, net		16			33

Net income before income taxes		1,387			3,595
Income tax expense—deferred		(347	)		—

Net income	$	1,040		$	3,595
Cumulative convertible preferred stock dividends (in arrears)		(26	)		(26	)

Net income attributable to common stockholders		1,014			3,569
Comprehensive income adjustments		(203	)		(29	)

Total comprehensive income	$	811		$	3,540

Earnings per common share:
Basic	$	0.08		$	0.29

Diluted	$	0.08		$	0.29

Weighted average number of common shares Outstanding:
Basic		12,113,319			12,103,180

Diluted		12,738,802			12,448,150

See accompanying notes to consolidated condensed financial statements.

Part I. Financial Information

HUNGARIAN TELEPHONE AND CABLE CORP. AND SUBSIDIARY

Consolidated Condensed Statements of Stockholders’ Equity

(In thousands, except share data)

(unaudited)

	Shares	Common Stock		Preferred Stock	Additional Paid-in Capital	Accumulated deficit		Accumulated Other Comprehensive Income		Total Stockholders’ Equity
Balances at December 31, 2002	12,103,180	$	12	—	144,778	(131,917	)	16,975		$	29,848
Proceeds from option exercise	82,500		—	—	584	—		—			584
Modification of option terms	—		—	—	21	—		—			21
Cumulative convertible preferred stock dividends (in arrears)	—		—	—	—	(26	)	—			(26	)
Net income	—		—	—	—	1,040		—			1,040
Foreign currency translation adjustment	—		—	—	—	—		(203	)		(203	)

Balances at March 31, 2003	12,185,680	$	12	—	145,383	(130,903	)	16,772		$	31,264

See accompanying notes to consolidated condensed financial statements.