Otelco Inc. (NASDAQ: OTT) (TSX: OTT.un), a wireline telecommunications services provider in Alabama, Maine, Massachusetts, Missouri, New Hampshire and West Virginia, today announced results for its first quarter ended March 31, 2011. Key highlights for Otelco include:
- Total revenues of $25.4 million for first quarter 2011.
- Operating income of $5.3 million for first quarter 2011.
- Adjusted EBITDA (as defined below) of $11.4 million for first quarter 2011.
“After record breaking performance in 2010, we had a challenging start for 2011,” said Mike Weaver, President and Chief Executive Officer of Otelco. “While the expansion of our sales and marketing department is now complete, the process of hiring and training new staff was more time consuming than anticipated. In addition, the planned expansion of our CLEC services in Massachusetts and New Hampshire was delayed but is now in progress. As a result of these delays and the increased costs associated with the expanded sales staff, first quarter results were below our expectations.
“Our cash position remains strong,” continued Weaver. “We increased our cash for the quarter by $0.2 million while at the same time making significant capital investments of $2.8 million in our business infrastructure in all of our service territories. This investment included a new soft switch in Alabama and the initial investments in Massachusetts for our CLEC expansion. In May, we intend to make another voluntary repayment of senior debt of $0.4 million representing a reduction of $11.5 million in the past two years.
“We remain committed to continuing the expansion of our CLEC services in New England, including our planned acquisition of Shoreham Telephone Company in Vermont,” added Weaver. “In addition to the increase of approximately 5,000 access line equivalents, this acquisition will anchor our CLEC expansion into the fourth New England state. Our investment in the existing sales organization anticipated this addition.