8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of report (Date of earliest event reported): February 9, 2011

Otelco Inc.

(Exact Name of Registrant as Specified in Charter)

Delaware	1-32362	52-2126395
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

505 Third Avenue East, Oneonta, AL 35121

(Address of Principal Executive Offices) (Zip Code)

Registrant’s telephone number, including area code: (205) 625-3574

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o    Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 7.01. Regulation FD Disclosure.

On February 10, 2011, at approximately 8:00 a.m. (Pacific Time), Michael D. Weaver, President and Chief Executive Officer of Otelco Inc. (“Otelco”), and Curtis L. Garner, Jr., Chief Financial Officer of Otelco, will present at the Stifel Nicolaus Technology, Communications & Internet Conference (the “Conference”) in San Francisco, California. The audio webcast of the presentation will be available live and for replay for 30 days from the presentation date and can be accessed on Otelco’s website at http://www.OtelcoInc.com. Attached as Exhibit 99.1 are the slides that Messrs. Weaver and Garner will present at the Conference, which are incorporated herein by reference.

The information contained in this Current Report on Form 8-K, including Exhibit 99.1, is intended to be “furnished” and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section.

Item 9.01. Financial Statements and Exhibits.

(d)           Exhibits

99.1         Conference Slides

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	OTELCO INC.
	(Registrant)
Date: February 9, 2011
	By:	/s/ Curtis L. Garner, Jr.
		Name: Curtis L. Garner, Jr.
		Title: Chief Financial Officer

EX-99.1

Exhibit 99.1

Stifel Nicolaus Technology, Communications & Internet Conference February 2011 Otelco Inc. (NASDAQ: OTT; TSX: OTT.un)

Safe Harbor Statement Some of the statements included herein may include forward-looking statements which reflect the Company’s current views with respect to future events and financial performance. Statements which include the words “expect,” “intend,” “plan,” “believe,” “project,” “anticipate” and similar statements of a future or forward-looking nature identify forward-looking statements for the purposes of the federal securities laws or otherwise.
All forward-looking statements address matters that involve risks and uncertainties. Accordingly, there are or will be important factors that could cause actual results to differ materially from those indicated in these statements.
1

Coming Attractions Otelco Inc. will announce Fourth quarter and year 2010 results February 16, 2011

2

Company Overview / Highlights . Acquired and operate 10 RLECs and 2 facilities based CLECs in Alabama, Maine, Massachusetts, Missouri, New Hampshire and West Virginia
. Initial Public Offering December 2004; follow-on offering June 2007
. As of 9/30/10, operate over 100,000 voice and data access lines and 145,000 wholesale CLEC network connections
. YTD 2010 Revenue and Adjusted EBITDA of US$78.5 million and US$37.9 million respectively compares favorably to YTD 2009 of US$77.7 million and US$36.6 million
. Consistent Revenue and Cash Flow with strong Margins
3

OTT Operating Regions Yellow highlight indicates CLEC operating region. 4

Diversified Revenue Base 2010 Revenue Mix – Otelco 1 1) Based on 9 months ended September 30, 2010.
5

Business Strategy

Otelco Strategy . Expand through strategic acquisitions
. Pursue selective, disciplined strategic acquisitions . IDS currency adds to options available for acquisitions . Cross-sell additional services, introduce new services, expand CLEC footprint . IPTV expansion in Alabama . CLEC increased coverage in New Hampshire and northern Maine . Wholesale network connections to MSOs in New England . Wireless Internet and DirecTV in Missouri . Increase customer loyalty and brand identity . Maintain strong local presence in communities we serve . Leverage Otelco brand, including OTT Communications in New England . RLEC customer retention programs 7

Acquisition Strategy . Telecommunications providers with multiple revenue sources and/or unrealized growth potential
. Network, data center, cloud computing resources
. Leverage network connectivity, technology costs and management capability
. Favorable regulatory and competitive environment
. Accretive to cash flow
8

Financial Overview

Consistent Revenue Growth Revenue 1 1) LTM Based on 12 months ended September 30, 2010.
10

Strong EBITDA Growth EBITDA 1 1) LTM Based on 12 months ended September 30, 2010.
11

Q3 2010 Results Highlights Financial Summary (dollars in thousands, except per share amounts) Change Q3 2009 Q3 2010 Amount Percent Revenue $26,403 $26,145 ($258) (1.0%) Operating Income $6,209 $6,728 $519 8.4% Net Income (loss) Available to Stockholders $(1,595) $63 $1,658 NM Basic Net Income per Share $(0.13) $0.00 $0.13 NM Adjusted EBITDA (a) $12,784 $12,671 ($113) (0.9%) Capital Expenditures $2,815 $2,357 ($458) (16.3%)
(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. For an explanation of Adjusted EBITDA to Net Income, see the company’s website. 12

Q3 2010 Results Key Operating Statistics R L E C O T H E R C L E C YE 2008 YE 2009 Q3 2010 Otelco Access Line Equivalents 100,043 100,356 100,872 Voice Access Lines 51,530 48,215 46,359 Data Access Lines 18,709 20,066 20,890 RLEC Access Line Equivalents 70,239 68,281 67,249 Cable Television Customers 4,082 4,195 4,248 Additional Internet Customers RLEC Dial-Up 1,183 786 447 Other Dial-Up 9,213 6,439 4,804 Other Data Lines 1,468 1,891 2,232 Voice Access Lines 26,558 28,647 30,118 Data Access Lines 3,246 3,428 3,505 CLEC Access Line Equivalents 29,804 32,075 33,623 Wholesale Network Connections 98,187 132,324 145,300

13

Balance Sheet

Conservative Balance Sheet • Cash growth, after IDS distributions and $5 million voluntary debt repayment, averages $3 million annually since IPO • Payout ratio 97% in 2008, 95.3% in 2009 (including $5 million voluntary debt repayment) and 81.6% through 3Q2010 • Senior leverage of 3.4x and total leverage of 5.5x well within industry norms • Additional $6.1 million voluntary debt repayment November 2010 • Senior debt matures October 2013; IDS subordinated debt matures December 2019 • Interest rate swaps on $150 million average 2% LIBOR through February 2012 15

Simplified IDS Structure . An Income Deposit Security (IDS) is a unit consisting of one share of our Class A common stock and a 13% senior subordinated note due 2019 with a $7.50 principal amount
– A hybrid, yield-oriented security conceptually similar to REITs or MLPs . IDS holder receives quarterly payments of interest and dividends1 Unit Holders Sub. Debt (Quarterly Int.) Class A Shares (Quarterly Div.) $0.17625 x 4 = $0.705 $0.24375 x 4 = $0.975 Unit holders have received $1.68 annually through a combination of dividends and interest payments Senior Subordinated Note Class A Common Share IDS Unit Dividends on class A shares are payable if and to the extent they are declared by Otelco’s Board of Directors and permitted by applicable law and the terms of Otelco’s then existing indebtedness.
16

Dividend Policy . Dividends are established by the Board of Directors
. Twenty-four consecutive IDS quarterly distribution payments of interest and dividends of US$0.42 per IDS . Board considers historical performance and the current market environment in which the Company operates in establishing dividend level . 2008, 2009 and 2010 dividends considered a return of capital 17

Cumulative Return 18

Michael D. Weaver -CEO Curtis L. Garner, Jr. -CFO