Otelco Inc. (NASDAQ: OTT) (TSX: OTT.un), a wireline telecommunications services provider in Alabama, Maine, Massachusetts, Missouri, New Hampshire, Vermont and West Virginia, today announced results for its third quarter ended September 30, 2011. Key highlights for Otelco include:
- Total revenues of $25.3 million for third quarter 2011.
- Operating income of $6.1 million for third quarter 2011.
- Adjusted EBITDA (as defined below) of $11.1 million for third quarter 2011.
“Third quarter results softened a bit as we completed the expansion of our CLEC market coverage in New Hampshire, Massachusetts and northern Maine,” said Mike Weaver, President and Chief Executive Officer of Otelco. “With all nine of the new collocation sites now operational, our sales and marketing efforts are underway to address each of these new markets. We originally projected these new sites to be operational early in the second quarter and the delay negatively impacted our margins as cost of services increased with little opportunity to increase revenue in these areas for the first nine months of this year.
“We continue to find ways to reduce costs and improve margins in our business,” continued Weaver. “In our CLEC operations, significant changes have been made in our sales and marketing organization this quarter. In addition, we expanded our product offerings with additional hosted IP products. In our RLEC business, we recently consolidated our Alabama business offices resulting in reduced costs and increased efficiencies. There is approximately $150,000 of nonrecurring expense in the third quarter related to these changes.
“The acquisition of Shoreham Telephone Company in Vermont was completed on October 14, adding some 5,000 access line equivalents to the Otelco family,” added Weaver. “Shoreham will anchor our CLEC expansion into the fourth New England state next year.“In 2004, we indicated our intent to build value at Otelco and return cash to our shareholders. Our twenty-seventh consecutive IDS dividend is evidence of that continuing commitment,” Weaver concluded.