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, 2012. Key highlights for Otelco include:
- Total revenues of $24.4 million for third quarter 2012.
- Operating income of $6.5 million for third quarter 2012.
- Adjusted EBITDA (as defined below) of $11.4 million for third quarter 2012.
“Third quarter results produced Adjusted EBITDA of $11.4 million, which represented a 5% increase over the second quarter of 2012 and a 2.5% increase over the same quarter in 2011,” said Mike Weaver, President and Chief Executive Officer of Otelco. “The improvement in results from second to third quarter 2012 is primarily attributable to the cost and expense reductions that we instituted at the end of June. Our cash balance increased to $27.2 million, reflecting the growth in EBITDA, continued moderate capital investment in our business and the deferral of third quarter interest on our IDS debt.
“We continue to work with Time Warner Cable on a transition agreement that we expect will allow for the conversion of service to begin in January and be completed within six months,“ Weaver continued. “While the term of the agreement is currently expected to be for six months, the conversion of service from Otelco to Time Warner will likely be completed in a shorter time interval.
“We announced last quarter that we engaged Evercore Partners, an investment banking firm, to assist us in exploring our strategic alternatives to address the existing levels of debt and strengthen our balance sheet,” added Weaver. “The Company is engaged in negotiations with the lenders under its senior credit facility with respect to a potential balance sheet restructuring. In addition, on October 5, 2012, the Company retained restructuring counsel to aid in this process. Together with its advisors, the Company will evaluate its alternatives.”