Delaware
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1-32362
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52-2126395
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(State or Other Jurisdiction of
Incorporation)
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(Commission File Number)
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(IRS Employer Identification No.)
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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):
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o
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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o
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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o
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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o
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Item 2.02.
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Results of Operations and Financial Condition.
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Item 9.01.
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Financial Statements and Exhibits.
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(d)
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Exhibits
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99.1
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Press Release Dated May 7, 2013
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OTELCO INC.
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(Registrant)
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Date: May 7, 2013
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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. | |
205-625-3580 | |
Curtis@otelcotel.com |
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●
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Total revenues of $21.0 million for first quarter 2013.
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●
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Operating income of $4.9 million for first quarter 2013.
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●
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Adjusted EBITDA (as defined below) of $8.8 million for first quarter 2013.
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Otelco Reports First Quarter 2013 Results
Page 2 May 7, 2013
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Three Months Ended March 31,
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Change
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|||||||||||||||
2012
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2013
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Amount
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Percent
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|||||||||||||
Revenues
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$ | 25,374 | $ | 20,988 | $ | (4,386 | ) | (17.3 | ) % | |||||||
Operating income
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$ | 6,617 | $ | 4,889 | $ | (1,728 | ) | (26.1 | ) % | |||||||
Interest expense
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$ | (5,834 | ) | $ | (5,554 | ) | $ | (280 | ) | (4.8 | ) % | |||||
Net income (loss)
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$ | 818 | $ | (1,774 | ) | $ | (2,592 | ) | * | |||||||
Basic net income (loss) per share
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$ | 0.06 | $ | (0.13 | ) | $ | (0.19 | ) | * | |||||||
Adjusted EBITDA(a)
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$ | 11,476 | $ | 8,786 | $ | (2,690 | ) | (23.4 | ) % | |||||||
Capital expenditures
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$ | 1,303 | $ | 799 | $ | (504 | ) | (38.7 | ) % |
Reconciliation of Adjusted EBITDA to Net Income (Loss) | ||||||||
Three Months ended March 31,
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||||||||
2012
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2013
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|||||||
Net income (loss)
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$ | 818 | $ | (1,774 | ) | |||
Add: Depreciation | 2,729 | 2,380 | ||||||
Interest expense - net of premium | 5,491 | 5,212 | ||||||
Interest expense - amortize loan cost | 342 | 342 | ||||||
Income tax expense (benefit) | 524 | (72 | ) | |||||
Change in fair value of derivatives | (241 | ) | - | |||||
Loan fees | 19 | 19 | ||||||
IXC Tariff Dispute Settlement | - | 69 | ||||||
Reorganization items | - | 1,424 | ||||||
Amortization - intangibles | 1,794 | 1,186 | ||||||
Adjusted EBITDA
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$ | 11,476 | $ | 8,786 |
Otelco Reports First Quarter 2013 Results
Page 3 May 7, 2013 |
Otelco Inc. - Key Operating Statistics
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(Unaudited)
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Quarterly
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|||||||||||||||
% Change
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||||||||||||||||
December 31,
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March 31,
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from
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||||||||||||||
2011
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2012
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2013
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Dec. 31, 2012
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|||||||||||||
Otelco access line equivalents(1)
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102,378 | 99,395 | 98,839 | (0.6 | ) % | |||||||||||
RLEC and other services:
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||||||||||||||||
Voice access lines
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46,202 | 43,021 | 42,274 | (1.7 | ) % | |||||||||||
Data access lines
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22,904 | 22,742 | 22,718 | (0.1 | ) % | |||||||||||
Access line equivalents(1)
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69,106 | 65,763 | 64,992 | (1.2 | ) % | |||||||||||
Cable television customers
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4,201 | 4,155 | 4,102 | (1.3 | ) % | |||||||||||
Satellite television customers
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226 | 233 | 235 | 0.9 | % | |||||||||||
Additional internet customers
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5,414 | 4,506 | 4,312 | (4.3 | ) % | |||||||||||
RLEC dial-up
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301 | 198 | 169 | (14.6 | ) % | |||||||||||
Other dial-up
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2,797 | 1,895 | 1,726 | (8.9 | ) % | |||||||||||
Other data lines
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2,316 | 2,413 | 2,417 | 0.2 | % | |||||||||||
CLEC:
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||||||||||||||||
Voice access lines
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30,189 | 30,470 | 30,589 | 0.4 | % | |||||||||||
Data access lines
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3,083 | 3,162 | 3,258 | 3.0 | % | |||||||||||
Access line equivalents(1)
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33,272 | 33,632 | 33,847 | 0.6 | % | |||||||||||
Wholesale network connections
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157,144 | 162,117 | 2,372 | (98.5 | ) % | |||||||||||
For the Three Months
Ended March 31,
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2012
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2013
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|||||||||||||||
Total Revenues (in millions):
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$ | 25.4 | $ | 21.0 | ||||||||||||
RLEC
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$ | 14.2 | $ | 13.2 | ||||||||||||
CLEC
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$ | 11.2 | $ | 7.8 |
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Three Months Ended March 31,
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Change
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2012
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2013
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Amount
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Percent
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(dollars in thousands) | ||||||||||||||||
Local services
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$ | 11,653 | $ | 8,542 | $ | (3,111 | ) | (26.7 | ) % | |||||||
Network access
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7,814 | 6,497 | (1,317 | ) | (16.9 | ) | ||||||||||
Cable television
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805 | 775 | (30 | ) | (3.7 | ) | ||||||||||
Internet
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3,726 | 3,676 | (50 | ) | (1.3 | ) | ||||||||||
Transport services
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1,376 | 1,498 | 122 | 8.9 | ||||||||||||
Total
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$ | 25,374 | $ | 20,988 | $ | (4,386 | ) | (17.3 | ) |
Otelco Reports First Quarter 2013 Results
Page 4 May 7, 2013
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Otelco Reports First Quarter 2013 Results
Page 5 May 7, 2013
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Otelco Reports First Quarter 2013 Results
Page 6 May 7, 2013
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December 31,
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March 31,
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|||||||
2012
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2013
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|||||||
Assets
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Current assets
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Cash and cash equivalents
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$ | 32,516,283 | $ | 34,293,319 | ||||
Accounts receivable:
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Due from subscribers, net of allowance for doubtful accounts of $239,274 and $457,068, respectively
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4,205,944 | 4,083,418 | ||||||
Unbilled receivables
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2,003,634 | 2,008,675 | ||||||
Other
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5,336,162 | 3,520,880 | ||||||
Materials and supplies
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1,845,246 | 1,924,191 | ||||||
Prepaid expenses
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1,981,631 | 2,827,045 | ||||||
Deferred income taxes
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1,843,160 | 1,843,160 | ||||||
Total current assets
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49,732,060 | 50,500,688 | ||||||
Property and equipment, net
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58,242,903 | 56,571,853 | ||||||
Goodwill
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44,956,840 | 44,956,840 | ||||||
Intangible assets, net
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6,670,392 | 5,580,929 | ||||||
Investments
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1,919,327 | 1,912,950 | ||||||
Deferred financing costs, net
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4,037,311 | 2,130,553 | ||||||
Deferred income taxes
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6,275,997 | 6,275,997 | ||||||
Other assets
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490,131 | 529,965 | ||||||
Total assets
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$ | 172,324,961 | $ | 168,459,775 | ||||
Liabilities and Stockholders’ Deficit
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Liabilities not subject to compromise
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Current liabilities
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Accounts payable
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$ | 2,007,405 | $ | 1,075,570 | ||||
Accrued expenses
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14,900,378 | 6,291,205 | ||||||
Advance billings and payments
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1,560,190 | 1,507,137 | ||||||
Deferred income taxes
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430,896 | 430,896 | ||||||
Customer deposits
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90,837 | 93,492 | ||||||
Current maturity of long-term debt
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270,990,023 | - | ||||||
Total current liabilities
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289,979,729 | 9,398,300 | ||||||
Liabilities subject to compromise
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- | 278,827,862 | ||||||
Deferred income taxes
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22,670,168 | 22,670,168 | ||||||
Advance billings and payments
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788,638 | 775,354 | ||||||
Other liabilities
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484,019 | 159,704 | ||||||
Long-term notes payable, less current maturities
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- | - | ||||||
Total liabilities
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313,922,554 | 311,831,388 | ||||||
Stockholders’ deficit
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||||||||
Class A Common Stock, $.01 par value-authorized 20,000,000 shares; issued and outstanding 13,221,404 shares
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132,214 | 132,214 | ||||||
Retained deficit
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(141,729,807 | ) | (143,503,827 | ) | ||||
Total stockholders’ deficit
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(141,597,593 | ) | (143,371,613 | ) | ||||
Total liabilities and stockholders’ deficit
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$ | 172,324,961 | $ | 168,459,775 |
Otelco Reports First Quarter 2013 Results
Page 7 May 7, 2013
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Three Months Ended
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||||||||
March 31,
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||||||||
2012
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2013
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|||||||
Revenues
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$ | 25,374,241 | $ | 20,987,909 | ||||
Operating expenses
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||||||||
Cost of services
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11,028,833 | 9,477,567 | ||||||
Selling, general and administrative expenses
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3,206,077 | 3,055,790 | ||||||
Depreciation and amortization
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4,522,593 | 3,565,896 | ||||||
Total operating expenses
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18,757,503 | 16,099,253 | ||||||
Income from operations
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6,616,738 | 4,888,656 | ||||||
Other income (expense)
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Interest expense
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(5,833,650 | ) | (5,554,169 | ) | ||||
Reorganization items
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- | (1,423,607 | ) | |||||
Change in fair value of derivatives
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241,438 | - | ||||||
Other income
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318,169 | 243,488 | ||||||
Total other expenses
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(5,274,043 | ) | (6,734,288 | ) | ||||
Income (loss) before income tax
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1,342,695 | (1,845,632 | ) | |||||
Income tax (expense) benefit
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(524,457 | ) | 71,611 | |||||
Net income (loss)
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$ | 818,238 | $ | (1,774,021 | ) | |||
Common shares outstanding:
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13,221,404 | 13,221,404 | ||||||
Net income (loss) per common share
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$ | 0.06 | $ | (0.13 | ) | |||
Dividends declared per common share
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$ | 0.18 | $ | - |
Otelco Reports First Quarter 2013 Results
Page 8 May 7, 2013
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Three Months Ended
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||||||||
March 31,
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||||||||
2012
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2013
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|||||||
Cash flows from operating activities:
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||||||||
Net income (loss)
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$ | 818,238 | $ | (1,774,021 | ) | |||
Adjustments to reconcile net income (loss) to cash flows from operating activities:
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||||||||
Depreciation
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2,728,557 | 2,379,971 | ||||||
Amortization
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1,794,036 | 1,185,925 | ||||||
Amortization of debt premium
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(27,840 | ) | (31,260 | ) | ||||
Amortization of loan costs
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342,024 | 342,024 | ||||||
Change in fair value of derivatives
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(241,438 | ) | - | |||||
Provision for uncollectible revenue
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122,402 | 37,253 | ||||||
Changes in operating assets and liabilities
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Accounts receivable
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864,192 | 1,895,515 | ||||||
Material and supplies
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(245,676 | ) | (78,945 | ) | ||||
Prepaid expenses and other assets
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(200,130 | ) | (885,402 | ) | ||||
Accounts payable and accrued liabilities
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1,046,924 | 1,007,701 | ||||||
Advance billings and payments
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222,279 | (66,337 | ) | |||||
Other liabilities
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67,487 | (321,660 | ) | |||||
Net cash from operating activities
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7,291,055 | 3,690,764 | ||||||
Cash used in investing activities:
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Acquisition and construction of property and equipment
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(1,303,197 | ) | (798,853 | ) | ||||
Net cash used in investing activities
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(1,303,197 | ) | (798,853 | ) | ||||
Cash flows used in financing activities:
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||||||||
Cash dividends paid
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(2,330,272 | ) | - | |||||
Loan origination costs
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(9,499 | ) | (1,114,875 | ) | ||||
Net cash used in financing activities
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(2,339,771 | ) | (1,114,875 | ) | ||||
Net increase in cash and cash equivalents
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3,648,087 | 1,777,036 | ||||||
Cash and cash equivalents, beginning of period
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12,393,792 | 32,516,283 | ||||||
Cash and cash equivalents, end of period
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$ | 16,041,879 | $ | 34,293,319 | ||||
Supplemental disclosures of cash flow information:
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Interest paid
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$ | 5,820,846 | $ | 1,825,337 | ||||
Income taxes paid
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$ | 25,250 | $ | 35,500 |