Delaware
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1-32362
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52-2126395
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(State of Incorporation)
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(Commission File Number)
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(I.R.S. Employer Identification No.)
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OTELCO INC.
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(Registrant)
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Date: May 4, 2011
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By:
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/s/ Curtis L. Garner, Jr.
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Name: Curtis L. Garner, Jr.
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Title: Chief Financial Officer
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Contact: | Curtis Garner |
Chief Financial Officer | |
Otelco Inc. | |
205-625-3571 | |
Curtis@otelcotel.com. |
●
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Total revenues of $25.4 million for first quarter 2011.
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●
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Operating income of $5.3 million for first quarter 2011.
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●
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Adjusted EBITDA (as defined below) of $11.4 million for first quarter 2011.
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First Quarter 2011 Financial Summary
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(Dollars in thousands, except per share amounts)
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||||||||||||||||
Three Months Ended March 31,
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Change
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|||||||||||||||
2010
|
2011
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Amount
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Percent
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|||||||||||||
Revenues
|
$ | 25,794 | $ | 25,392 | $ | (402 | ) | (1.6 | ) % | |||||||
Operating income
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$ | 5,869 | $ | 5,321 | $ | (548 | ) | (9.3 | ) % | |||||||
Interest expense
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$ | (5,989 | ) | $ | (6,170 | ) | $ | 181 | 3.0 | % | ||||||
Net income (loss) available to stockholders
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$ | (386 | ) | $ | 5 | $ | 391 | * | ||||||||
Basic net income (loss) per share
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$ | (0.03 | ) | $ | - | $ | 0.03 | * | ||||||||
Diluted net income (loss) per share
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$ | (0.03 | ) | $ | - | $ | 0.03 | * | ||||||||
Adjusted EBITDA(a)
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$ | 12,331 | $ | 11,413 | $ | (918 | ) | (7.4 | ) % | |||||||
Capital expenditures
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$ | 1,753 | $ | 2,843 | $ | 1,090 | 62.2 | % | ||||||||
* Not a meaningful calculation
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Reconciliation of Adjusted EBITDA to Net Income (Loss)
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||||||||
Three Months ended March 31,
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||||||||
2010
|
2011
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|||||||
Net income (loss)
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$ | (386 | ) | $ | 5 | |||
Add: Depreciation
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3,573 | 3,523 | ||||||
Interest expense - net of premium
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5,651 | 5,828 | ||||||
Interest expense - amortize loan cost
|
338 | 342 | ||||||
Income tax expense (benefit)
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(262 | ) | 1 | |||||
Change in fair value of derivatives
|
886 | (506 | ) | |||||
Loan fees
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19 | 19 | ||||||
Amortization - intangibles
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2,512 | 2,201 | ||||||
Adjusted EBITDA
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$ | 12,331 | $ | 11,413 |
Otelco Inc. - Key Operating Statistics
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Quarterly
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|||||||||
% Change
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|||||||||
December 31,
|
Mar. 31,
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from
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|||||||
2009
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2010
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2011
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Dec. 31, 2010
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||||||
Otelco access line equivalents(1)
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100,356
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99,639
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99,271
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(0.4)
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%
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||||
RLEC and other services:
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|||||||||
Voice access lines
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48,215
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45,461
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44,770
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(1.5)
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%
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||||
Data access lines
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20,066
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20,852
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21,158
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1.5
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%
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||||
Access line equivalents(1)
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68,281
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66,313
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65,928
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(0.6)
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%
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Cable television customers
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4,195
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4,227
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4,029
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(4.7)
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%
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Satellite television customers
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Additional internet customers
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9,116
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6,975
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6,435
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(7.7)
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%
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RLEC dial-up
|
786
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393
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341
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(13.2)
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%
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Other dial-up
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6,439
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4,300
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3,786
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(12.0)
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%
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Other data lines
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1,891
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2,282
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2,308
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1.1
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%
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||||
CLEC:
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|||||||||
Voice access lines
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28,647
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29,944
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30,084
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0.5
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%
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||||
Data access lines
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3,428
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3,382
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3,259
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(3.6)
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%
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||||
Access line equivalents(1)
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32,075
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33,326
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33,343
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0.1
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%
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Wholesale network connections
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132,324
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149,043
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152,101
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2.1
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%
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For the Three Months
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Ended March 31,
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2010
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2011
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Total Revenues (in millions):
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$ | 25.8 | $ | 25.4 | ||||
RLEC
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$ | 14.7 | $ | 14.2 | ||||
CLEC
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$ | 11.1 | $ | 11.2 | ||||
`
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Three Months Ended March 31,
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Change | ||||||||||||||
2010
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2011
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Amount
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Percent
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|||||||||||||
(dollars in thousands) | ||||||||||||||||
Local services
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$ | 12,239 | $ | 12,006 | $ | (233 | ) | (1.9 | ) % | |||||||
Network access
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7,985 | 7,861 | (124 | ) | (1.6 | ) | ||||||||||
Cable television
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666 | 753 | 87 | 13.1 | ||||||||||||
Internet
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3,511 | 3,455 | (56 | ) | (1.6 | ) | ||||||||||
Transport services
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1,393 | 1,317 | (76 | ) | (5.5 | ) | ||||||||||
Total
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$ | 25,794 | $ | 25,392 | $ | (402 | ) | (1.6 | ) |
OTELCO INC.
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CONSOLIDATED BALANCE SHEETS
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December 31,
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March 31,
|
||||||
2010
|
2011
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||||||
Assets
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(unaudited)
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||||||
Current assets
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|||||||
Cash and cash equivalents | $ |
18,226,374
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$ 18,473,509
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Accounts receivable: | |||||||
Due from subscribers, net of allowance for doubtful | |||||||
accounts of $230,752 and $238,321, respectively |
4,406,257
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4,206,972
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|||||
Unbilled receivables |
2,161,277
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2,156,605
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Other |
3,257,882
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3,639,031
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Materials and supplies |
1,817,311
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1,879,897
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Prepaid expenses |
1,305,028
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1,072,212
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Deferred income taxes |
626,267
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626,267
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Total current assets |
31,800,396
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32,054,493
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Property and equipment, net
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63,887,213
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62,824,961
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|||||
Goodwill
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188,190,078
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188,190,078
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Intangible assets, net
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25,934,042
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24,123,076
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Investments
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1,967,095
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1,960,718
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Deferred financing costs
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5,757,825
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5,415,801
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Deferred income taxes
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4,415,097
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4,415,097
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|||||
Other assets
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183,946
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169,760
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|||||
Total assets | $ |
322,135,692
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$ 319,153,984
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Liabilities and Stockholders' Deficit
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Current liabilities
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Accounts payable | $ |
768,055
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$ 445,386
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Accrued expenses |
6,885,748
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7,106,276
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Advance billings and payments |
1,595,133
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1,579,693
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Deferred income taxes |
353,285
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353,285
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Customer deposits |
172,479
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184,069
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Total current liabilities |
9,774,700
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9,668,709
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|||||
Deferred income taxes
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42,512,576
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42,512,575
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|||||
Interest rate swaps
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2,471,331
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1,965,176
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|||||
Advance billings and payments
|
656,968
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646,622
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|||||
Other liabilities
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368,349
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359,547
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Long-term notes payable
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271,595,855
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271,571,060
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|||||
Total liabilities |
327,379,779
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326,723,689
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|||||
Stockholders' Deficit
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|||||||
Class A Common Stock, $.01 par value-authorized 20,000,000 shares; | |||||||
issued and outstanding 13,221,404 shares |
132,214
|
132,214
|
|||||
Additional paid in capital |
921,718
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-
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|||||
Retained deficit |
(6,298,019)
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(7,701,919
|
) | ||||
Total stockholders' deficit |
(5,244,087)
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(7,569,705
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) | ||||
Total liabilities and stockholders' deficit | $ |
322,135,692
|
$ 319,153,984
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OTELCO INC.
|
||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS
|
||||||||
(unaudited)
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||||||||
Three months ended
March 31,
|
||||||||
2010
|
2011
|
|||||||
Revenues
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$ | 25,794,209 | $ | 25,392,000 | ||||
Operating expenses
|
||||||||
Cost of services and products
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10,610,193 | 11,020,212 | ||||||
Selling, general and administrative expenses
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3,230,996 | 3,327,057 | ||||||
Depreciation and amortization
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6,084,291 | 5,724,018 | ||||||
Total operating expenses
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19,925,480 | 20,071,287 | ||||||
Income from operations
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5,868,729 | 5,320,713 | ||||||
Other income (expense)
|
||||||||
Interest expense
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(5,988,642 | ) | (6,170,131 | ) | ||||
Change in fair value of derivatives
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(886,170 | ) | 506,155 | |||||
Other income
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358,832 | 349,349 | ||||||
Total other expenses
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(6,515,980 | ) | (5,314,627 | ) | ||||
Income (loss) before income tax
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(647,251 | ) | 6,086 | |||||
Income tax (expense) benefit
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261,595 | (1,432 | ) | |||||
Net income (loss) available to common stockholders
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$ | (385,656 | ) | $ | 4,654 | |||
Weighted average shares outstanding:
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||||||||
Basic
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12,676,733 | 13,221,404 | ||||||
Diluted
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13,221,404 | 13,221,404 | ||||||
Basic net income (loss) per share
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$ | (0.03 | ) | $ | - | |||
Diluted net income (loss) per share
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$ | (0.03 | ) | $ | - | |||
Dividends declared per share
|
$ | 0.18 | $ | 0.18 |
OTELCO INC.
|
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CONSOLIDATED STATEMENTS OF CASH FLOWS
|
||||||||
(unaudited)
|
||||||||
Three months ended
|
||||||||
March 31,
|
||||||||
2010
|
2011
|
|||||||
Cash flows from operating activities:
|
||||||||
Net income (loss)
|
$ | (385,656 | ) | $ | 4,654 | |||
Adjustments to reconcile net income (loss) to cash flows from operating activities:
|
||||||||
Depreciation
|
3,572,918 | 3,522,652 | ||||||
Amortization
|
2,511,373 | 2,201,365 | ||||||
Amortization of debt premium
|
(22,086 | ) | (24,795 | ) | ||||
Amortization of loan costs
|
337,976 | 342,024 | ||||||
Change in fair value of derivatives
|
886,170 | (506,155 | ) | |||||
Provision for uncollectible revenue
|
77,045 | 62,747 | ||||||
Changes in assets and liabilities; net of assets and liabilities acquired:
|
||||||||
Accounts receivables
|
365,460 | (215,112 | ) | |||||
Material and supplies
|
(86,159 | ) | (62,586 | ) | ||||
Prepaid expenses and other assets
|
(26,503 | ) | 220,510 | |||||
Income tax receivable
|
389,486 | - | ||||||
Accounts payable and accrued liabilities
|
(187,900 | ) | (102,141 | ) | ||||
Advance billings and payments
|
18,706 | (25,786 | ) | |||||
Other liabilities
|
10,351 | 2,788 | ||||||
Net cash from operating activities
|
7,461,181 | 5,420,165 | ||||||
Cash flows used in investing activities:
|
||||||||
Acquisition and construction of property and equipment
|
(1,753,170 | ) | (2,842,757 | ) | ||||
Net cash used in investing activities
|
(1,753,170 | ) | (2,842,757 | ) | ||||
Cash flows used in financing activities:
|
||||||||
Cash dividends paid
|
(2,234,274 | ) | (2,330,273 | ) | ||||
Net cash used in financing activities
|
(2,234,274 | ) | (2,330,273 | ) | ||||
Net increase in cash and cash equivalents
|
3,473,737 | 247,135 | ||||||
Cash and cash equivalents, beginning of period
|
17,731,044 | 18,226,374 | ||||||
Cash and cash equivalents, end of period
|
$ | 21,204,781 | $ | 18,473,509 | ||||
Supplemental disclosures of cash flow information:
|
||||||||
Interest paid
|
$ | 5,569,134 | $ | 5,908,353 | ||||
Income taxes paid (received)
|
$ | (326,486 | ) | $ | 122,895 |
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