Otelco Reports First Quarter 2011 Results
“The recent outbreak of tornadoes in Alabama inflicted some damage to our outside plant facilities but we do not anticipate any significant long-term effects on our operations,” noted Weaver. “Restoration efforts were underway immediately after the storm subsided. We supplemented our Alabama work force with crews from our Missouri and Maine operations, as well as outside contractors, and were able to restore service to most of our customers within a week. The costs for the restoration should generally be covered by our insurance.
“The strength of our commitment to building value for and returning cash to our shareholders is unwavering, as evidenced by our twenty-fifth consecutive IDS dividend,” Weaver concluded.
Distribution to Income Deposit Security Holders
Each quarter, the Board will consider the declaration of dividends during its normally scheduled meeting. For this quarter, the Board is meeting on May 12, 2011. The scheduled interest and any dividend declared will be paid on June 30, 2011, to holders of record as of the close of business on June 15, 2011. The interest payment will cover the period from March 30, 2011 through June 29, 2011. Currently, it is anticipated that the Company’s dividends in 2011 will continue to be treated as a return of capital for tax purposes. The Company has made twenty-five successive quarterly distributions of dividends and interest since its IDS units were originally offered to the public in December 2004.
|First Quarter 2011 Financial Summary|
|(Dollars in thousands, except per share amounts)|
|Three Months Ended March 31,||Change|
|Net income (loss) available to stockholders||$||(386||)||$||5||$||391||*|
|Basic net income (loss) per share||$||(0.03||)||$||-||$||0.03||*|
|Diluted net income (loss) per share||$||(0.03||)||$||-||$||0.03||*|
|Adjusted EBITDA (a)||$||12,331||$||11,413||$||(918||)||(7.4||)||%|
|* Not a meaningful calculation|
Reconciliation of Adjusted EBITDA to Net Income (Loss)
|Three Months ended March 31,|
|Net income (loss)||$||(386||)||$||5|
|Interest expense - net of premium||5,651||5,828|
|Interest expense - amortize loan cost||338||342|
|Income tax expense (benefit)||(262||)||1|
|Change in fair value of derivatives||886||(506||)|
|Amortization - intangibles||2,512||2,201|
(a) Adjusted EBITDA is defined as consolidated net income (loss) plus interest expense, depreciation and amortization, income taxes and certain non-recurring fees, expenses or charges and other non-cash charges reducing consolidated net income. Adjusted EBITDA is not a measure calculated in accordance with generally acceptable accounting principles (GAAP). While providing useful information, Adjusted EBITDA should not be considered in isolation or as a substitute for consolidated statement of operations data prepared in accordance with GAAP. The Company believes Adjusted EBITDA is useful as a tool to analyze the Company on the basis of operating performance and leverage. The definition of Adjusted EBITDA corresponds to the definition of Adjusted EBITDA in the indenture governing the Company’s senior subordinated notes and its credit facility and certain of the covenants contained therein. The Company’s presentation of Adjusted EBITDA may not be comparable to similarly titled measures used by other companies.
|Otelco Inc. - Key Operating Statistics|
|December 31,||Mar. 31,||from|
|2009||2010||2011||Dec. 31, 2010|
Otelco access line equivalents (1)
|RLEC and other services:|
|Voice access lines||48,215||45,461||44,770||(1.5||)||%|
|Data access lines||20,066||20,852||21,158||1.5||%|
|Access line equivalents (1)||68,281||66,313||65,928||(0.6||)||%|
|Cable television customers||4,195||4,227||4,029||(4.7||)||%|
Satellite television customers
|Additional internet customers||9,116||6,975||6,435||(7.7||)||%|
|Other data lines||1,891||2,282||2,308||1.1||%|
|Voice access lines||28,647||29,944||30,084||0.5||%|
|Data access lines||3,428||3,382||3,259||(3.6||)||%|
|Access line equivalents (1)||32,075||33,326||33,343||0.1||%|
|Wholesale network connections||132,324||149,043||152,101||2.1||%|
|For the Three Months|
|Ended March 31,|
|Total Revenues (in millions):||$||25.8||$||25.4|
(1) We define access line equivalents as voice access lines and data access lines (including cable modems, digital subscriber lines, and dedicated data access trunks).
|Three Months Ended March 31,||
|(dollars in thousands)|
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