Otelco Reports Second Quarter 2011 Results
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 second quarter ended June 30, 2011. Key highlights for Otelco include:
- Total revenues of $25.5 million for second quarter 2011.
- Operating income of $7.3 million for second quarter 2011.
- Adjusted EBITDA (as defined below) of $11.9 million for second quarter 2011.
“After a slow start in the first quarter of the year, our second quarter results generated growth in revenue, operating margin and EBITDA when compared to first quarter. The management team focused on delivering superior service and controlling costs. With our expanded CLEC sales and marketing capability finally in place and the completion of our six colocation facilities in New Hampshire, we are in a position to begin to see growth in our non-regulated business.
“Our cash position remains strong,” continued Weaver. “In May, we made another voluntary repayment on our senior debt of $0.4 million representing a reduction of $11.5 million since the credit facility was renewed in October 2008. Capital investments of $3.5 million in our business infrastructure during the quarter, including approximately $0.7 million to replace assets damaged by spring tornadoes in Alabama, will support both growth and cost improvements in all of our service territories.
“The planned acquisition of Shoreham Telephone Company in Vermont is on schedule to close in fourth quarter,” added Weaver. “Shoreham will also anchor our CLEC expansion into the fourth New England state.“The strength of our commitment to building value for and returning cash to our shareholders is unwavering, as evidenced by our twenty-sixth consecutive IDS dividend,” Weaver concluded. Distribution to Income Deposit Security Holders Each quarter, the Board will consider the declaration of dividends during its normally scheduled meeting. For this quarter, the Board is meeting on August 11, 2011. The scheduled interest and any dividend declared will be paid on September 30, 2011, to holders of record as of the close of business on September 15, 2011. The interest payment will cover the period from June 30, 2011 through September 29, 2011. Currently, it is anticipated that the Company’s dividends in 2011 will continue to be treated as a return of capital for tax purposes. The Company has made twenty-six successive quarterly distributions of dividends and interest since its IDSs were originally offered to the public in December 2004.
|Second Quarter 2011 Financial Summary|
|(Dollars in thousands, except per share amounts)|
Three Months Ended June 30,
|Net income available to stockholders||$||417||$||1,283||$||866||*|
|Basic net income per share||$||0.03||$||0.10||$||0.07||*|
|Diluted net income per share||$||0.03||$||0.10||$||0.07||*|
|Adjusted EBITDA (a)||$||12,890||$||11,887||$||(1,003||)||(7.8||)%|
|* Not a meaningful calculation|
Six Months Ended June 30,
|Net income available to stockholders||$||32||$||1,288||$||1,256||*|
|Basic net income per share||$||-||$||0.10||$||0.10||*|
|Diluted net income per share||$||-||$||0.10||$||0.10||*|
|Adjusted EBITDA (a)||$||25,220||$||23,300||$||(1,920||)||(7.6||)%|
|* Not a meaningful calculation|
|Reconciliation of Adjusted EBITDA to Net Income|
|Three Months ended June 30,||Six Months ended June 30,|
|Interest expense - net of premium||5,840||5,857||11,491||11,685|
|Interest expense - amortize loan cost||339||342||677||684|
|Income tax expense||262||357||1||359|
|Change in fair value of derivatives||176||(480||)||1,062||(986||)|
|Amortization - intangibles||2,510||2,202||5,019||4,403|
|Otelco Inc. - Key Operating Statistics|
|December 31,||March 31,||June 30,||from|
|2009||2010||2011||2011||March 31, 2011|
|Otelco access line equivalents (1)||100,356||99,639||99,271||98,304||(1.0||)%|
|RLEC and other services:|
|Voice access lines||48,215||45,461||44,770||44,113||(1.5||)%|
|Data access lines||20,066||20,852||21,158||21,137||(0.1||)%|
|Access line equivalents (1)||68,281||66,313||65,928||65,250||(1.0||)%|
|Cable television customers||4,195||4,227||4,029||4,054||0.6||%|
|Satellite television customers||100||125||217||222||2.3||%|
|Additional internet customers||9,116||6,975||6,435||6,046||(6.0||)%|
|Other data lines||1,891||2,282||2,308||2,336||1.2||%|
|Voice access lines||28,647||29,944||30,084||29,842||(0.8||)%|
|Data access lines||3,428||3,382||3,259||3,212||(1.4||)%|
|Access line equivalents (1)||32,075||33,326||33,343||33,054||(0.9||)%|
|Wholesale network connections||132,324||149,043||152,101||154,785||1.8||%|
|For the Years Ended||For the Three Months Ended|
|December 31,||March 31,||June 30,|
|Total Revenues (in millions):||$||103.8||$||104.4||$||25.4||$||25.5|
|Three Months Ended June 30,||Change|
|(dollars in thousands)|
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