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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 fourth quarter and year ended December 31, 2011. Key highlights for Otelco include:
Total revenues of $25.6 million for fourth quarter and $101.8 million for 2011.
Operating income of $5.9 million for fourth quarter and $24.6 million for 2011.
Adjusted EBITDA (as defined below) of $10.9 million for fourth quarter and $45.3 million for 2011.
“We completed our acquisition of Shoreham Telephone Company during fourth the quarter, expanding our RLEC and future CLEC presence in New England,” said Mike Weaver, President and Chief Executive Officer of Otelco. “The integration process is underway and should be completed by the end of the first quarter. We expect the Shoreham acquisition to be accretive to adjusted EBITDA in 2012.
“Our fourth quarter performance was adversely affected by approximately $0.4 million from non-operating items, including Shoreham deal expenses, write-off of obsolete inventory and RLEC cost study adjustments. On an annual basis, after a particularly strong performance in 2010, delays experienced in adding eight new CLEC collocation sites in Maine and New Hampshire dampened 2011 results. Our CLEC markets in New England have become more competitive, including downward pressure on market pricing trends,” continued Weaver. “In response to this more difficult sales climate, we have made changes in our sales organization and leadership and adjusted our product offering to better position us for growth in 2012.
“The recent FCC access reform order became effective in 2012 and, while the impact of the changes remain unclear, our mix of regulated and non-regulated businesses means we may not have significant exposure to the phase out of the Universal Service Fund,” added Weaver. “Our existing senior debt of $162.0 million has an October 2013 maturity date. We may consider refinancing this debt prior to its maturity if favorable market conditions allow us to do so. Based on the terms we see in completed refinancing packages in our industry, we would anticipate the terms of refinanced senior debt to include lower leverage and higher amortization than our existing senior debt.