D&E COMMUNICATIONS INC (Form: 8-K, Received: 06/13/2003 16:15:00)

UNITED STATES SECURITIES AND EXCHANGE
COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of
the Securities and Exchange Act of 1934


Date of Report:		June 13, 2003

Date of earliest event reported:		June 13, 2003

Commission File No. 0-20709

D&E COMMUNICATIONS, INC.

(Exact Name of Registrant as specified in its charter)


Pennsylvania		23-2837108

(State or other jurisdiction of incorporation)		(IRS Employer Identification Number)

124 East Main Street
P.O. Box 458
Ephrata, PA 17522-0458		17522

(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code:
(717) 733-4101

Item 9. Regulation FD Disclosure

The following information is being filed pursuant to Item 9 and Item 12: On June 13, 2003, D&E Communications, Inc. issued the shareholders report attached hereto as Exhibit 99, and incorporated into this Item 12 by reference.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, D&E Communications, Inc. has caused this Report to be signed on its behalf by the undersigned hereunto fully authorized.


	D&E COMMUNICATIONS, INC.

	By:	/s/ Thomas E. Morell

		Thomas E. Morell Senior Vice President, Chief Financial Officer and Treasurer

Date: June 13, 2003

Exhibit Index

Exhibit 99 – Quarterly Report to shareholders. First quarter 2003.

(COVER)

Investor Information

D&E Communications, Inc. is listed on the NASDAQ National Market of the NASDAQ Stock Market as DECC.

The Company serves as its own transfer agent. Inquiries concerning stock and related matters may be directed to W. Garth Sprecher, Senior Vice President and Corporate Secretary.

Telephone: (717) 738-8304 Email: gsprecher@decommunications.com

Market Makers

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F.J. Morrissey Mitchell Securities Corp. & Company, Inc. of Oregon 1700 Market Street, Suite 1420 121 SW Morrison Street, Suite 1480 Philadelphia, PA 19103 Portland, OR 97204 (215) 563-8500 (800) 224-2226

Jefferies & Company, Inc. Wachovia Securities 520 Madison Ave., 12th Floor 1250 Broadcasting Road New York, NY 10022 P.O. Box 6347 (888) 533-3374 Wyomissing, PA 19610 (888) 769-5167

D&E Communications, Inc.

Brossman Business Complex 124 East Main Street Ephrata, PA 17522

1-877-4DE-TODAY

www.decommunications.com Email:

info@decommunications.com s m a l l t o w n s e r v i c e

big potential

Q u a r t e r l y R e p o r t

F i r s t Q u a r t e r

2 0 0 3

D&E COMMUNICATIONS,

INC.

D&E Communications, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations


(in thousands, except per-share amounts) (unaudited)			Three Months Ended March 31,
			2003			2002

Total operating revenues			$	42,085		$	19,577
Total operating expenses				36,882			19,340
Operating income				5,203			237
Total other income (expense)				(4,417	)		(1,176	)

Income (loss) from continuing operations before income taxes and dividends on utility preferred stock				786			(939	)
Income taxes (benefit)				315			(150	)
Dividends on utility preferred stock				16			16
Total income taxes and dividends on utility preferred stock				331			(134	)
Income (loss) from continuing operations				455			(805	)
Discontinued operations:
	Loss from operations of paging business, net of income tax benefit of $3 and $2			(7	)		(3	)

Income (loss) before cumulative effect of change in accounting principle				448			(808	)
Cumulative effect of change in accounting principle, net of income taxes of $177				260			—

Net Income (Loss)			$	708		$	(808	)

Weighted average common shares outstanding				15,421			7,366
Weighted average common shares and equivalents outstanding				15,469			7,366
Basic and Diluted Earnings (Loss) per Common Share
	Income (loss) from continuing operations		$	0.03		$	(0.11	)
	Loss from discontinued operations			—			—
	Cumulative effect of accounting change			0.02			—

		Net income (loss) per common share	$	0.05		$	(0.11	)

	Dividends per common share		$	0.13		$	0.13

(COMMUNICATIONS EQUIPMENT)

Officers


Anne B. Sweigart Chairman & President		Robert M. Lauman Vice Chairman & Senior Executive Vice President

G. William Ruhl Chief Executive Officer		Albert H. Kramer Senior Vice President, Operations

Thomas E. Morell Senior Vice President, Chief Financial Officer & Treasurer		W. Garth Sprecher Senior Vice President & Secretary

Board of Directors


John Amos		G. William Ruhl




Thomas H. Bamford		Steven B. Silverman




Paul W. Brubaker		W. Garth Sprecher
Ronald E. Frisbie		Anne B. Sweigart




Robert A. Kinsley		D. Mark Thomas




Robert M. Lauman		Richard G. Weidner

D&E Communications, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets


(in thousands, except share amounts) (unaudited)		March 31,			December 31,
		2003			2002

Assets
Current assets		$	42,860		$	46,885
Investments			6,301			6,455
Property, plant and equipment			313,028			310,456
	Less accumulated depreciation		115,878			109,351

			197,150			201,105

Other assets
	Assets held for sale		215			6,665
	Goodwill		147,488			147,488
	Intangible assets, net of amortization		177,414			178,964
	Other		13,916			14,256

			339,033			347,373

Total assets		$	585,344		$	601,818

Liabilities and Shareholders’ Equity
Current liabilities		$	31,796		$	50,139
Long-term debt			245,731			244,966
Other liabilities			106,968			104,664
Preferred stock of utility subsidiary, series A 4 1/2%			1,446			1,446
Shareholders’ Equity
	Common stock, par value $0.16, authorized shares 30,000,000		2,515			2,512
	Outstanding shares: 15,432,550 at March 31, 2003; 15,413,640 at December 31, 2002
	Additional paid-in capital		158,294			158,101
	Accumulated other comprehensive income (loss)		(7,249	)		(7,071	)
	Retained earnings		51,125			52,343
	Treasury stock at cost, 306,910 shares at March 31, 2003 and December 31, 2002		(5,282	)		(5,282	)

			199,403			200,603

Total liabilities and shareholders’ equity		$	585,344		$	601,818

D&E Communications, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows


(in thousands) (unaudited)		Three Months Ended March 31,
		2003			2002

Cash flows from operating activities of continuing operations		$	8,970		$	424
Net cash provided by (used in) investing activities from continuing operations			5,931			(5,748	)
Net cash provided by (used in) financing activities from continuing operations			(961	)		4,786

	Cash provided by (used in) continuing operations		13,940			(538	)
Net cash provided by (used in) discontinued operations			(20,507	)		1,022

Increase (decrease) in cash and cash equivalents			(6,567	)		484
Cash and cash equivalents
	Beginning of period		15,514			615

	End of period	$	8,947		$	1,099

Dear Shareholder,

The first quarter of 2003 was one of significant progress in our various business segments. We are developing our role as an Integrated Communications Provider, offering more of our services in more markets in central and eastern Pennsylvania.

The Rural Local Exchange Carrier (RLEC) segment, which includes our three telephone companies, continued to generate strong revenues and income. Operating income in this segment for first-quarter 2003 was $7.7 million on revenues of $27.7 million.

We saw strong growth in our Competitive Local Exchange Carrier (CLEC) segment, with our line count rising to 33,276 by March 31, up 10 percent in the quarter.

On April 1, 2003, our Internet Services segment introduced a new product, D&E Jazzd Turbo, which can accelerate most popular web surfing activities for dial-up subscribers. Available to all our subscribers for an additional monthly fee, Jazzd Turbo offers a cost-effective way to speed up email and downloads.

Below are statistics about changes in line counts and subscribers during the quarter:


	March 31		Dec. 31		Change
	2003		2002

RLEC Lines		144,934		145,310		-0.3	%
CLEC Lines		33,276		30,200		+10.2	%
DSL Subscribers		6,124		5,615		+9.1	%
Dial-up Internet Subscribers		12,967		12,652		+2.5	%
Web Hosting Customers		701		651		+7.7	%

The Systems Integration segment has faced a challenging economic environment that has curtailed information technology spending at many companies. We have responded by increasing our sales efforts and expanding this segment’s operations in additional markets, including Lewisburg, Birdsboro, State College and King of Prussia. Systems integration provides customers with the latest

technology, including network security, wireless networking and Voice Over Internet Protocol (VoIP) solutions.

The effects of our acquisition of Conestoga Enterprises, Inc., in May 2002 are reflected in our first-quarter corporate financial results. Operating revenues for the period ended March 31, 2003, were $42 million, more than double the $20 million for pre-acquisition D&E in first-quarter 2002. We recorded net income of $708,000 for the quarter, compared to a net loss of $808,000 during first-quarter 2002. First-quarter earnings per share were $0.05, compared to a net loss of $0.11 per share in the same period last year.

We continue to pursue the integration of our company’s operations, working to create consistent, streamlined processes that combine the best practices of Conestoga Enterprises and D&E. As part of our strategy to focus on our core operations, we completed the sale of the assets of Conestoga Wireless Company in January 2003 and completed the sale of our paging assets in May 2003.

I would like to welcome Richard G. Weidner to our board of directors. Mr. Weidner was elected at our Annual Meeting of Shareholders on May 22, 2003, and he will serve as chairman of our Audit Committee. He had served as a member of the board of directors of Conestoga Enterprises, Inc., and is the retired President of Beard and Company, Inc., Certified Public Accountants.

On behalf of the board, I extend my thanks to each shareholder for your ongoing interest in D&E Communications. It is our goal to deliver excellent communication services to our communities and a valuable investment to our shareholders.


Sincerely,

Anne B. Sweigart
Chairman & President