Another strong and successful year for DRN
- Date: October 18, 2019
- Author: Troy Radermacher, Accounting & Business Manager
Thursday, October 17th was Dickey Rural Telephone Cooperative’s 69th Annual Meeting held at the Ellendale Public School. The festivities started at 4:30 pm the supper and musical talent provided and followed with the annual meeting at 6:00 pm. It’s a great night where we thank our members and update them on the status of the cooperative. For anyone that came, I’d like to thank you for your attendance. For anyone who couldn’t attend I’d like to take this opportunity to update you on the results of our 2018 financials.
The audit firm of Moss Adams – Certified Public Accountants, conducted the annual audit of Dickey Rural Telephone Cooperative for the fiscal year ending December 31, 2018 in accordance with Government Auditing Standards. In performing the audit of the 2018 financial statements, Moss Adams stated…..”the consolidated financial statements…..present fairly, in all material respects, the financial position of Dickey Rural Telephone Cooperative and its subsidiaries.” Dickey Rural Telephone Cooperative was given an unqualified opinion by Moss Adams, which is the highest level of opinion that is given to a company being audited.
Every member was mailed a 2018 Cooperative Annual Report and you can follow along by reviewing the Balance Sheet and Income Statement which are on pages 6-8. This information comes directly from the audit report, as well as any other financial information contained in the report.
- On page 8 you’ll see DRN’s Operating Revenues increased by $1.3 million over 2017. Some of our biggest gains in revenue have come from USF Support since our territory is in a high cost to serve area, cable tv, managed services and security.
- Operating Expenses were up almost $1.4 million over 2017. This increase is down 400K from the prior year as we’re always looking at new ways to reduce expenses so we can continue to operate more efficiently. Items that caused this increase came from measures to further secure our network from the threat of cybersecurity attacks which are growing each day and increases in customer purchased equipment from our managed service and security offerings. Our TV offering is another segment which saw large increases in expenses due to cable TV programmers raising prices to provide tv content to our members.
- Under Other Income, you’ll notice a gain on sale of assets of $1,693,426 in 2017 which was attributed to the sale of our 700 mhz spectrum. This one-time sale is what provided a boost to our net margins in 2017 and is the reason why our 2018 margins are lower compared to 2017.
While conducting our annual audit Moss Adams uses the information they collect to compare us to other similarly situated companies so we can see how we’re doing. I will share a few bullet points that are unique to DRN and put us towards the top in these areas.
- DRN offers very competitive pricing for Internet and cable tv compared to our peer group. The average price a subscriber pays for Internet at DRN is $10.50 cheaper per month and our cable tv offering is $9.12 per month cheaper than what other cooperatives offer. We feel this is a great benefit to our subscribers especially when we can also offer speeds that many other companies can’t.
- DRN’s consolidated equity is over 94% of total assets. This means that your cooperative owns itself. Lender’s and creditors have no claim against the assets and operations of the company. As a comparison, the median equity is 68% for other companies since they are only starting to upgrade their networks to fiber and are having to take out loans to do so.
- The DRN Board of Director’s are always thinking about the members who have helped the company succeed. In 2018, the board approved capital credit retirements that totaled over 3.2 million which reduced the amount of unpaid years left to be paid at 12. DRN was on top as having the fewest years left to payout as other cooperatives on average have 20 years of unpaid credits left to pay and some companies have never made a capital credit payment. This shows DRN is very aggressive in giving back to their members.
As you can see, your cooperative had a very positive and successful year. We thank you for your continued support and we hope everyone will consider making a point to come visit with us next year for our 70th annual meeting.