Company Quick10K Filing
Nuvera Communications
Price18.99 EPS1
Shares5 P/E15
MCap99 P/FCF6
Net Debt53 EBIT12
TEV151 TEV/EBIT13
TTM 2019-09-30, in MM, except price, ratios
10-Q 2020-09-30 Filed 2020-11-09
10-Q 2020-06-30 Filed 2020-08-10
10-Q 2020-03-31 Filed 2020-05-11
10-K 2019-12-31 Filed 2020-03-16
10-Q 2019-09-30 Filed 2019-11-12
10-Q 2019-06-30 Filed 2019-08-09
10-Q 2019-03-31 Filed 2019-05-10
10-K 2018-12-31 Filed 2019-03-14
10-Q 2018-09-30 Filed 2018-11-14
10-Q 2018-06-30 Filed 2018-08-14
10-Q 2018-03-31 Filed 2018-05-15
10-K 2017-12-31 Filed 2018-03-15
10-Q 2017-09-30 Filed 2017-11-14
10-Q 2017-06-30 Filed 2017-08-14
10-Q 2017-03-31 Filed 2017-05-15
10-K 2016-12-31 Filed 2017-03-15
10-Q 2016-09-30 Filed 2016-11-14
10-Q 2016-06-30 Filed 2016-08-15
10-Q 2016-03-31 Filed 2016-05-16
10-K 2015-12-31 Filed 2016-03-15
10-Q 2015-09-30 Filed 2015-11-16
10-Q 2015-06-30 Filed 2015-08-14
10-Q 2015-03-31 Filed 2015-05-15
10-K 2014-12-31 Filed 2015-03-16
10-Q 2014-09-30 Filed 2014-11-14
10-Q 2014-06-30 Filed 2014-08-14
10-Q 2014-03-31 Filed 2014-05-15
10-K 2013-12-31 Filed 2014-03-14
10-Q 2013-09-30 Filed 2013-11-12
10-Q 2013-06-30 Filed 2013-08-14
10-Q 2013-03-31 Filed 2013-05-15
10-K 2012-12-31 Filed 2013-03-22
10-Q 2012-09-30 Filed 2012-11-09
10-Q 2012-06-30 Filed 2012-08-14
10-Q 2012-03-31 Filed 2012-05-14
10-K 2011-12-31 Filed 2012-03-26
10-Q 2011-09-30 Filed 2011-11-14
10-Q 2011-06-30 Filed 2011-08-15
10-Q 2011-03-31 Filed 2011-05-13
10-K 2010-12-31 Filed 2011-03-28
10-Q 2010-09-30 Filed 2010-11-12
10-Q 2010-06-30 Filed 2010-08-12
10-Q 2010-03-31 Filed 2010-05-12
10-K 2009-12-31 Filed 2010-03-29
8-K 2020-09-02
8-K 2020-05-21
8-K 2020-04-01
8-K 2019-08-27
8-K 2019-05-23
8-K 2019-05-23
8-K 2019-04-15
8-K 2019-03-08
8-K 2018-11-15
8-K 2018-07-31
8-K 2018-07-31
8-K 2018-06-04
8-K 2018-05-24
8-K 2018-05-23
8-K 2018-03-26
8-K 2018-02-22

NUVR 10Q Quarterly Report

Part I - Financial Information
Item 1. Financial Statements
Note 1 - Basis of Presentation and Consolidation
Note 2 - Revenue Recognition
Note 3 - Leases
Note 4 - Fair Value Measurements
Note 5 - Goodwill and Intangibles
Note 6 - Secured Credit Facility
Note 7 - Interest Rate Swaps
Note 8 - Other Investments
Note 9 - Guarantees
Note 10 - Restricted Stock Units (Rsu)
Note 11 - Segment Information
Note 12 - Commitments and Contingencies
Note 13 - Broadband Grants
Note 14 - Subsequent Events
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Item 4. Controls and Procedures
Part II. Other Information
Item 1. Legal Proceedings.
Item 1A. Risk Factors.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
Item 3. Defaults Upon Senior Securities.
Item 4. Mine Safety Disclosures
Item 5. Other Information.
Item 6. Exhibits.
EX-31.1 exhibit31_1.htm
EX-31.2 exhibit31_2.htm
EX-32.1 exhibit32_1.htm
EX-32.2 exhibit32_2.htm

Nuvera Communications Earnings 2020-09-30

Balance SheetIncome StatementCash Flow
16513299663302012201420172020
Assets, Equity
2015117302012201420172020
Rev, G Profit, Net Income
40236-11-28-452012201420172020
Ops, Inv, Fin

Form 10-Q

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

_________________

 

FORM 10-Q

 

 (Mark One)

 

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

 

For the quarterly period ended September 30, 2020

 

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

 

For the transition period from_____to_____.

 

Commission File Number  0-3024

 

NUVERA COMMUNICATIONS, INC.

(Exact name of Registrant as specified in its charter)

 

Minnesota

(State or other jurisdiction of

incorporation or organization)

41-0440990

(I.R.S. Employer

Identification No.)

 

27 North Minnesota Street

New Ulm, Minnesota  56073

(Address of principal executive offices)

 

Registrant’s telephone number, including area code: (507) 354-4111

 

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 90 days.  Yes   No 

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes No                        

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a  smaller reporting company or an emerging growth company. See the definition of “large accelerated filer”, “accelerated filer”, “non-accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.    Large accelerated filer    Accelerated filer    Non-accelerated filer  Smaller reporting company  Emerging growth company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes   No

 

Securities registered pursuant to Section 12(b) of the Act:  None.

 

Title of each class

Trading Symbol

Name of each exchange on which registered

Common Stock - $1.66 par value

NUVR

OTCQB Marketplace

 

The total number of shares of the registrant’s common stock outstanding as of November 9, 2020: 5,199,101.

 

1


 

table of contents

 

PART I – FINANCIAL INFORMATION

     

Item 1

Financial Statements

3-9

     
 

Consolidated Statements of Income (unaudited) for the Three and Nine Months Ended September 30, 2020 and 2019

3

     
 

Consolidated Statements of Comprehensive Income (unaudited) for the Three and Nine Months Ended September 30, 2020 and 2019

4

     
 

Consolidated Balance Sheets (unaudited) as of September 30, 2020 and December 31, 2019

5-6

     
 

Consolidated Statements of Cash Flows (unaudited) for the Nine Months Ended September 30, 2020 and 2019

7

     
 

Consolidated Statements of Stockholders’ Equity (unaudited) for the Three and Nine Months ended September 30, 2020 and 2019

8-9

     
 

Condensed Notes to Consolidated Financial Statements (unaudited)

10-27

     

Item 2

Management’s Discussion and Analysis of Financial Condition and Results of Operations

28-41

     

Item 3

Quantitative and Qualitative Disclosures About Market Risk

41

     

Item 4

Controls and Procedures

41

     

PART II – OTHER INFORMATION

     

Item 1

Legal Proceedings

41

     

Item 1A

Risk Factors

42

     

Item 2

Unregistered Sales of Equity Securities and Use of Proceeds

42

     

Item 3

Defaults Upon Senior Securities

42

     

Item 4

Mine Safety Disclosures

42

     

Item 5

Other Information

42-43

     

Item 6

Exhibits Listing

43

     
 

Signatures

44

     

 

Exhibits

 

 

2


Table of Contents

 

PART I – FINANCIAL INFORMATION

 

Item 1. Financial Statements

        

NUVERA COMMUNICATIONS, INC.
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)

Three Months Ended

September 30,

Nine Months Ended

September 30,

2020

2019

2020

2019

OPERATING REVENUES:

Local Service

$

1,664,700

$

1,785,759

$

5,095,754

$

5,466,870

Network Access

1,419,902

1,817,673

4,636,682

5,593,095

Video

3,081,057

3,016,376

9,158,795

9,054,239

Data

5,924,036

5,446,845

17,406,412

16,250,411

A-CAM/FUSF

2,995,736

3,019,922

9,089,391

9,123,524

Other Non-Regulated

 

1,255,142

 

1,064,399

 

3,264,560

 

3,103,624

Total Operating Revenues

 

16,340,573

 

16,150,974

 

48,651,594

 

48,591,763

OPERATING EXPENSES:

Plant Operations (Excluding Depreciation
    and Amortization)

3,201,938

3,075,977

9,403,009

8,949,683

Cost of Video

2,518,433

2,652,377

7,726,161

7,915,032

Cost of Data

915,104

861,684

2,572,503

2,035,477

Cost of Other Nonregulated Services

415,455

543,643

1,167,694

1,610,767

Depreciation and Amortization

3,019,123

3,035,666

9,119,649

9,085,570

Selling, General and Administrative

 

2,308,662

 

2,690,342

 

7,537,251

 

7,809,948

Total Operating Expenses

 

12,378,715

 

12,859,689

 

37,526,267

 

37,406,477

OPERATING INCOME

 

3,961,858

 

3,291,285

 

11,125,327

 

11,185,286

OTHER (EXPENSE) INCOME

Interest Expense

(613,541)

(827,380)

(1,907,898)

(2,659,769)

Interest/Dividend Income

5,936

22,122

104,465

133,180

Interest During Construction

25,946

49,525

93,507

125,607

Gain (Loss) on Investments

 -

 -

52,881

(104,044)

CoBank Patronage Dividends

 -

-

647,369

403,786

Other Investment Income

 

36,956

 

71,718

 

197,170

 

259,635

Total Other Income (Expense)

 

(544,703)

 

(684,015)

 

(812,506)

 

(1,841,605)

INCOME BEFORE INCOME TAXES

3,417,155

2,607,270

10,312,821

9,343,681

INCOME TAXES

 

956,801

 

730,035

 

2,887,582

 

2,616,226

NET INCOME

$

2,460,354

$

1,877,235

$

7,425,239

$

6,727,455

NET INCOME PER SHARE

   Basic

$

0.47

$

0.36

$

1.43

$

1.30

   Diluted

$

0.47

 

$

0.36

 

$

1.43

 

$

1.30

DIVIDENDS PER SHARE

$

0.0000

$

0.1300

$

0.1300

$

0.3800

WEIGHTED AVERAGE SHARES OUTSTANDING

 

 

 

 

 

 

 

 

 

 

 

   Basic

5,199,101

5,187,152

5,192,132

5,184,010

   Diluted

 

5,205,684

 

 

5,197,326

 

 

5,197,140

 

 

5,192,214

The accompanying notes are an integral part of these consolidated financial statements.

 

3


Table of Contents

 

NUVERA COMMUNICATIONS, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

Three Months Ended

September 30,

Nine Months Ended

September 30,

2020

2019

2020

2019

Net Income

$

2,460,354

 

$

1,877,235

 

$

7,425,239

 

$

     6,727,455

Other Comprehensive Income (Loss):

 

 

 

 

 

 

 

 

 

 

 

Unrealized Gains (Losses) on Interest Rate Swaps

 

147,875

 

 

108,133

 

 

(2,773,292)

 

 

     (372,748)

Income Tax Benefit (Expense) Related to Unrealized
    Gains (Losses) on Interest Rate Swaps

 

(42,203)

 

 

(30,862)

 

 

791,498

 

 

          106,382

Other Comprehensive Income (Loss):

 

105,672

 

77,271

 

(1,981,794)

 

(266,366)

 

 

 

 

 

 

 

 

 

 

 

 

Comprehensive Income

$

2,566,026

$

   1,954,506

$

    5,443,445

$

6,461,089

The accompanying notes are an integral part of these consolidated financial statements.

 

4


Table of Contents

 

NUVERA COMMUNICATIONS, INC.

CONSOLIDATED BALANCE SHEETS

(Unaudited)

ASSETS

September 30,

2020

December 31,

2019

CURRENT ASSETS:

 

 

 

 

 

Cash

$

    6,891,742

$

      2,993,000

Receivables, Net of Allowance for
   Doubtful Accounts of $190,000 and $120,000

 

2,173,340

 

 

      2,356,742

Income Taxes Receivable

120,318

-

Materials, Supplies, and Inventories

 

    3,574,399

 

 

2,827,159

Prepaid Expenses and Other Current Assets

 

    1,677,269

 

         826,873

Total Current Assets

 

  14,437,068

 

 

      9,003,774

INVESTMENTS & OTHER ASSETS:

 

 

 

 

 

Goodwill

  49,903,029

    49,903,029

Intangibles

 

  21,592,422

 

 

    24,085,250

Other Investments

10,718,632

9,453,578

Right of Use Asset

 

    1,264,266

 

 

1,558,164

Other Assets

 

232,318

 

           182,581

Total Investments and Other Assets

 

83,710,667

 

 

85,182,602

PROPERTY, PLANT & EQUIPMENT:

 

 

 

 

 

Communications Plant

 168,648,423

163,630,396

Other Property & Equipment

 

25,066,903

 

 

23,301,293

Video Plant

 

11,105,390

 

    10,732,919

Total Property, Plant and Equipment

 

204,820,716

 

 

  197,664,608

Less Accumulated Depreciation

 

136,087,561

 

129,605,576

Net Property, Plant & Equipment

 

68,733,155

 

 

68,059,032

TOTAL ASSETS

$

 166,880,890

 

$

162,245,408

The accompanying notes are an integral part of these consolidated financial statements.

 

5


Table of Contents

 

 

NUVERA COMMUNICATIONS, INC.

CONSOLIDATED BALANCE SHEETS (continued)

(Unaudited)

 

LIABILITIES AND STOCKHOLDERS' EQUITY

           
 

September 30,

2020

 

  December 31,

2019

   

CURRENT LIABILITIES:

 

 

 

 

 

Current Portion of Long-Term Debt, Net of
    Unamortized Loan Fees

$

6,300,590

 

$

4,511,844

Accounts Payable

 

       1,725,943

 

 

1,807,334

Accrued Income Taxes

 

-

   

729,600

Other Accrued Taxes

 

172,583

 

 

           232,862

Deferred Compensation

 

319,163

   

             311,047

Accrued Compensation

 

       2,410,261

 

 

2,511,798

Other Accrued Liabilities

 

652,230

   

1,046,034

Total Current Liabilities

 

     11,580,770

 

 

11,150,519

           

LONG-TERM DEBT, Net of Unamortized
    Loan Fees

 

48,833,449

 

 

      51,072,286

 

 

 

 

 

 

NONCURRENT LIABILITIES:

         

Loan Guarantees

 

          321,446

 

 

319,346

Deferred Income Taxes

 

     15,678,558

   

      16,470,055

Other Accrued Liabilities

 

1,296,309

 

 

1,454,777

Financial Derivative Instruments

 

          3,033,710

   

           260,418

Deferred Compensation

 

          530,364

 

 

759,952

Total Noncurrent Liabilities

 

     20,860,387

 

 

      19,264,548

 

 

 

 

 

 

COMMITMENTS AND CONTINGENCIES

 -

   

 -

 

 

 

 

 

 

STOCKHOLDERS' EQUITY:

         

Preferred Stock - $1.66 Par Value, 10,000,000 Shares
    Authorized, None Issued

 

 -

 

 

 -

Common Stock - $1.66 Par Value, 90,000,000 Shares
    Authorized, 5,199,101 and 5,189,218 Shares Issued
    and Outstanding

 

       8,665,169

   

8,648,697

Accumulated Other Comprehensive Loss

 

        (2,167,889)

 

 

(186,095)

Unearned Compensation

 

123,617

   

189,255

Retained Earnings

 

     78,985,387

 

 

72,106,198

Total Stockholders' Equity

 

     85,606,284

 

 

      80,758,055

 

 

 

 

 

 

TOTAL LIABILITIES AND
    STOCKHOLDERS' EQUITY

$

   166,880,890

 

$

    162,245,408

           

The accompanying notes are an integral part of these consolidated financial statements.

 

 

6


Table of Contents

 

NUVERA COMMUNICATIONS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

Nine Months Ended

September 30,

2020

September 30,

2019

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

 

Net Income

$

7,425,239

$

6,727,455

Adjustments to Reconcile Net Income to Net Cash
    Provided by Operating Activities:

 

 

 

 

 

Depreciation and Amortization

9,193,566

9,159,487

Unrealized (Gains) Losses on Investments

 

(47,640)

 

 

 104,044

Undistributed Earnings of Other Equity Investments

(225,680)

(274,078)

Noncash Patronage Refund

 

(143,692)

 

 

(100,946)

Stock Issued in Lieu of Cash Payment

234,522

261,636

Distributions from Equity Investments

 

100,000

 

 

200,000

Stock-based Compensation

13,098

90,311

Changes in Assets and Liabilities:

 

 

 

 

 

Receivables

186,608

1,292,931

Income Taxes Receivable

 

(120,318)

 

 

305,751

Materials, Supplies and Inventories

(747,240)

(385,600)

Prepaid Expenses

 

(780,450)

 

 

(393,269)

Other Assets

45,900

(36,900)

Accounts Payable

 

(137,845)

 

 

(622,853)

Accrued Income Taxes

(729,600)

495,476

Other Accrued Taxes

 

(60,279)

 

 

(51,786)

Other Accrued Liabilities

(359,911)

346,711

Deferred Compensation

 

(221,472)

 

 

(41,172)

Net Cash Provided by Operating Activities

 

13,624,806

 

17,077,198

 

 

 

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES:

Additions to Property, Plant, and Equipment, Net

 

(7,894,696)

 

 

(7,939,722)

Grants Received for Construction of Plant

650,208

390,922

Other, Net

 

(1,044,785)

 

 

(139,815)

Net Cash Used in Investing Activities

 

(8,289,273)

 

(7,688,615)

 

 

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES:

Principal Payments of Long-Term Debt

 

(3,469,215)

 

 

(3,457,800)

Loan Proceeds

2,889,000

-

Changes in Revolving Credit Facility

 

 56,207

 

 

-

Repurchase of Common Stock

(238,612)

 (104,802)

Dividends Paid

 

(674,171)

 

 

(1,969,928)

Net Cash Used in Financing Activities

 

(1,436,791)

 

(5,532,530)

 

 

 

 

 

 

NET INCREASE IN CASH

3,898,742

3,856,053

 

 

 

 

 

 

CASH at Beginning of Period

 

2,993,000

 

1,584,769

 

 

 

 

 

 

CASH at End of Period

$

6,891,742

$

5,440,822

 

 

 

 

 

 

Supplemental cash flow information:

Cash paid for interest

$

1,821,995

 

$

2,631,805

Net cash paid for income taxes

$

3,737,500

$

1,815,000

 

 

 

 

 

 

The accompanying notes are an integral part of these consolidated financial statements.

 

7


Table of Contents

 

NUVERA COMMUNICATIONS, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(Unaudited)

THREE MONTHS ENDED SEPTEMBER 30, 2020

Accumulated

Other

Comprehensive

Income (Loss)

Common Stock

Unearned

Compensation

Retained

Earnings

Total

Equity

Shares

Amount

BALANCE on June 30, 2020

5,199,101

 

$

8,665,169

 

$

 (2,273,561)

 

$

100,440

 

$

76,525,033

 

$

 83,017,081

 

 

 

 

 

 

 

Restricted Stock Grant

 

 

 

 

 

 

 

 

 

23,177

 

 

 

 

 

23,177

Net Income

 

 

 

 

2,460,354

2,460,354

Unrealized Gain on Interest Rate Swap

 

 

 

 

 

 

105,672

 

 

 

 

 

 

 

 

105,672

 

 

 

 

 

 

 

 

 

 

 

 

BALANCE on September 30, 2020

5,199,101

$

 8,665,169

$

(2,167,889)

$

 123,617

$

78,985,387

$

85,606,284

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

THREE MONTHS ENDED SEPTEMBER 30, 2019

Accumulated

Other

Comprehensive

Income (Loss)

Common Stock

Unearned

Compensation

Retained

Earnings

Total

Equity

Shares

Amount

BALANCE on June 30, 2019

5,190,810

 

$

8,651,350

 

$

(634,658)

 

$

133,933

 

$

70,004,714

 

 $

78,155,339

 

 

 

 

 

 

 

Restricted Stock Grant

 

 

 

 

 

 

 

 

 

36,162

 

 

 

 

 

36,162

Repurchase of Common Stock

(5,487)

(9,145)

 

 

(95,657)

(104,802)

Net Income

 

 

 

 

 

 

 

 

 

 

 

 

1,877,235

 

 

1,877,235

Dividends

 

 

 

 

 

 

 

 

 

 

 

 

(674,092)

 

 

(674,092)

Unrealized Gain on Interest Rate Swap

 

 

77,271

 

 

 77,271

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BALANCE on September 30, 2019

5,185,323

$

8,642,205

$

(557,387)

$

170,095

$

71,112,200

 $

79,367,113

The accompanying notes are an integral part of these consolidated financial statements.

 

8


Table of Contents

 

NUVERA COMMUNICATIONS, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(Unaudited)

NINE MONTHS ENDED SEPTEMBER 30, 2020

Accumulated

Other

Comprehensive

Income (Loss)

Common Stock

Unearned

Compensation

Retained

Earnings

Total

Equity

Shares

Amount

BALANCE on December 31, 2019

5,189,218

 

$

8,648,697

 

$

 (186,095)

 

$

189,255

 

$

72,106,198

 

$

80,758,055

Directors' Stock Plan

12,264

 

 

20,440

 

 

 

 

 

 

 

 

179,464

 

 

199,904

Employee Stock Plan

6,971

11,618

92,947

104,565

Restricted Stock Grant

 

 

 

 

 

 

 

 

 

60,978

 

 

 

 

 

60,978

Exercise of RSU's

4,144

 

 

6,907

 

 

 

 

 

(126,616)

 

 

71,829

 

 

(47,880)

Repurchase of Common Stock

(13,496)

(22,493)

(216,119)

 (238,612)

Net Income

 

 

 

 

 

 

 

 

 

 

 

 

7,425,239

 

 

7,425,239

Dividends

(674,171)

 (674,171)

Unrealized Loss on Interest Rate Swap

 

 

 

 

 

 

(1,981,794)

 

 

 

 

 

 

 

 

(1,981,794)

 

 

 

 

 

 

 

 

 

 

 

BALANCE on September 30, 2020

5,199,101

$

8,665,169

$

 (2,167,889)

$

123,617

$

78,985,387

$

85,606,284

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NINE MONTHS ENDED SEPTEMBER 30, 2019

Accumulated

Other

Comprehensive

Income (Loss)

Common Stock

Unearned

Compensation

Retained

Earnings

Total

Equity

Shares

Amount

BALANCE on December 31, 2018

5,175,258

 

$

8,625,430

 

$

(291,021)

 

$

79,784

 

$

66,181,285

 

 $

74,595,478

Directors' Stock Plan

9,561

 

 

15,935

 

 

 

 

 

 

 

 

164,003

 

 

179,938

Employee Stock Plan

5,991

9,985

105,042

115,027

Restricted Stock Grant

 

 

 

 

 

 

 

 

 

90,311

 

 

 

 

 

90,311

Repurchase of Common Stock

(5,487)

 

 

(9,145)

 

 

 

 

 

 

 

 

(95,657)

 

 

(104,802)

Net Income

6,727,455

6,727,455

Dividends

 

 

 

 

 

 

 

 

 

 

 

 

 (1,969,928)

 

 

(1,969,928)

Unrealized Loss on Interest Rate Swap

(266,366)

(266,366)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BALANCE on September 30, 2019

5,185,323

$

8,642,205

$

(557,387)

$

170,095

$

71,112,200

 $

79,367,113

The accompanying notes are an integral part of these consolidated financial statements.

 

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Table of Contents

 

NUVERA COMMUNICATIONS, INC.

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2020 (Unaudited)

 

Note 1 – Basis of Presentation and Consolidation

 

The accompanying unaudited condensed consolidated financial statements of Nuvera Communications, Inc. and its subsidiaries (Nuvera) have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) for interim financial information, rules and regulations of the Securities and Exchange Commission (SEC) and, where applicable, conform to the accounting principles as prescribed by federal and state telephone utility regulatory authorities. Certain information and disclosures normally included in annual financial statements prepared in accordance with GAAP have been omitted or condensed pursuant to such rules and regulations. In the opinion of management, the unaudited condensed consolidated financial statements reflect all adjustments (consisting only of normal and recurring accruals) considered necessary for the fair presentation of the financial statements and present fairly the results of operations, financial position and cash flows for the interim periods presented as required by Regulation S-X, Rule 10-01. These unaudited interim condensed consolidated financial statements should be read in conjunction with our audited consolidated financial statements and notes thereto contained in our Annual Report on Form 10-K for the year ended December 31, 2019.

 

The preparation of our financial statements requires our management to make estimates and judgements that affect the reported amounts of assets, liabilities, revenue and expenses, and the related disclosure of contingent assets and liabilities at the date of the financial statements and during the reporting period. Actual results may differ from these estimates. The results of operations for the interim periods presented are not necessarily indicative of the results that may be expected for the fiscal year as a whole or any other interim period.

 

Our consolidated financial statements report the financial condition and results of operations for Nuvera and its subsidiaries in one business segment: the Communications Segment. Inter-company transactions have been eliminated from the consolidated financial statements.

 

Revenue Recognition

See Note 2 – “Revenue Recognition” for a discussion of our revenue recognition policies.

 

Cost of Services (excluding depreciation and amortization)

Cost of services includes all costs related to delivery of communication services and products. These operating costs include all costs of performing services and providing related products including engineering, network monitoring and transport cost.

 

Selling, General and Administrative Expenses

Selling, general and administrative expenses include direct and indirect selling expenses, customer service, billing and collections, advertising and all other general and administrative costs associated with the operations of the business.

 

Depreciation and Amortization Expense

We use the group life method (mass asset accounting) to depreciate the assets of our telephone companies. Telephone plant acquired in a given year is grouped into similar categories and depreciated over the remaining estimated useful life of the group. When an asset is retired, both the asset and the accumulated depreciation associated with that asset are removed from the books. Due to rapid changes in technology, selecting the estimated economic life of communications plant and equipment requires a significant amount of judgment. We periodically review data on expected utilization of new equipment, asset retirement activity and net salvage values to determine adjustments to our depreciation rates. Depreciation expense was $6,626,821 and $6,592,743 for the nine months ended September 30, 2020 and 2019. We amortize our definite-lived intangible assets over their estimated useful lives. Identifiable intangible assets that are subject to amortization are evaluated for impairment.

 

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Table of Contents

 

Income Taxes

The provision for income taxes consists of an amount for taxes currently payable and a provision for tax consequences deferred to future periods. Deferred income taxes are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities, and their respective tax bases. Significant components of our deferred taxes arise from differences (i) in the basis of property, plant and equipment due to the use of accelerated depreciation methods for tax purposes, as well as (ii) in partnership investments and intangible assets due to the difference between book and tax basis. Our effective income tax rate is normally higher than the United States tax rate due to state income taxes and permanent differences. 

 

We account for income taxes in accordance with GAAP, which requires an asset and liability approach to financial accounting and reporting for income taxes. As required by GAAP, we recognize the financial statement benefit of a tax position only after determining that the relevant tax authority would more-likely-than-not sustain the position following an audit. For tax positions meeting the more-likely-than-not threshold, the amount recognized in the financial statements is the largest benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement with the relevant tax authority.

 

As of September 30, 2020 and December 31, 2019 we had no unrecognized tax benefits.

 

We are primarily subject to United States, Minnesota, Iowa, Nebraska, North Dakota and Wisconsin income taxes. Tax years subsequent to 2015 remain open to examination by federal and state tax authorities. Our policy is to recognize interest and penalties related to income tax matters as income tax expense. As of September 30, 2020 and December 31, 2019 we had no interest or penalties accrued that related to income tax matters.

 

Earnings and Dividends Per Share

 

The basic and diluted net income per share are calculated as follows:

 

Three Months Ended

  September 30, 2020

Three Months Ended

  September 30, 2019

Nine Months Ended

  September 30, 2020

Nine Months Ended

  September 30, 2019

Basic

Diluted

 

Basic

Diluted

Basic

Diluted

Basic

Diluted

Net Income

$

2,460,354

$

2,460,354

$

1,877,235

$