Chief Financial Officer
Otelco Inc.
205-625-3571
Curtis@otelcotel.com
Otelco Completes Acquisition of Country Road Properties
Reports Third Quarter 2008 Results
ONEONTA, Alabama (Nov. 4, 2008) - Otelco Inc. (NASDAQ: OTT; TSX: OTT.un), the sole wireline telephone services provider in several rural communities in Alabama, Maine and Missouri, today announced results for its third quarter ended September 30, 2008. Key quarterly highlights for Otelco include:
| · | Total revenues of $18.2 million. |
| · | Operating income of $5.7 million. |
| · | Adjusted EBITDA (as defined below) of $9.0 million. |
“Our business continued to provide solid revenue growth in the third quarter, despite the tough economic environment,” stated Mike Weaver, President and Chief Executive Officer of Otelco. “Key operating highlights include growth in access line equivalents when compared to last quarter and last year, driven by increases in data lines and CLEC voice lines.
“Last Friday, we completed the acquisition of the Country Road properties, which was first announced in August. This will add over 24,000 retail access line equivalents to our current presence in Maine plus almost 5,000 access line equivalents in Massachusetts and West Virginia as well as a growing wholesale business in New England. The fact that we were able to gain all of the necessary regulatory approvals and complete the financing with our consortium of six banks in less than three months is a strong indication of the important strategic rationale of the transaction for the Company, our customers and our investors. Now we will expedite the transition work with the same enthusiasm,” added Weaver.
“For the third quarter, we again delivered solid increases in operating income and Adjusted EBITDA, which increased 10.7% and 1.5%, respectively, from the year-ago period and 10.8% and 1.6%, respectively, for year-to-date 2008 compared to the same period in 2007. Adjusted EBITDA was $9.0 million for the quarter and $26.3 million year-to-date, producing an increase of $0.4 million so far this year,” added Weaver. “Bottom line performance also improved from the year-ago period as we reported net income of $0.8 million for the quarter and $1.6 million year-to-date compared to a net loss of $0.7 million for the third quarter 2007 and a net loss of $0.9 million for year-to-date 2007. We invested over $3.0 million in our infrastructure to serve both our current and future customers. A significant part of our third quarter investment was for our planned expansion into IPTV services. For the quarter, our expenditures for this project were over $1.2 million which represented approximately 40% of the total capital expenditures for this quarter. We also delivered our fifteenth consecutive IDS distribution. That demonstrates our ability to both complete strategic expansions without losing focus on generating solid operating and financial results.”
Otelco Reports Third Quarter Results
Page 2
Nov. 4, 2008
Each quarter, the Board considers the declaration of dividends during its normally scheduled meeting. For the fourth quarter of 2008, the Board is meeting on November 10, 2008. Currently, it is anticipated that the Company’s dividends in 2008 will continue to be treated as a return of capital for tax purposes. The scheduled interest and any dividend declared will be paid on December 30, 2008 to holders of record as of the close of business on December 15, 2008. The interest payment will cover the period from September 30, 2008 through December 29, 2008.
Otelco Reports Third Quarter Results
Page 3
Nov. 4, 2008
Third Quarter 2008 Financial Summary
(Dollars in thousands, except per share amounts)
| | Three Months Ended Sept. 30, | | Change | |
| | | 2007 | | 2008 | | Amount | | Percent | |
| | | | | | | | | | |
| Revenues | | $ | 17,594 | | $ | 18,238 | | $ | 644 | | | 3.7 | % |
| Operating income | | $ | 5,117 | | $ | 5,665 | | $ | 548 | | | 10.7 | % |
| Interest expense | | $ | (5,845 | ) | $ | (4,774 | ) | $ | (1,071 | ) | | (18.3 | )% |
| Net income (loss) available to stockholders | | $ | (668 | ) | $ | 789 | | $ | 1,457 | | | * | % |
| Basic net income (loss) per share | | $ | (0.05 | ) | $ | 0.06 | | $ | 0.11 | | | * | % |
| Diluted net income (loss) per share | | $ | (0.07 | ) | $ | 0.04 | | $ | 0.11 | | | * | % |
| | | | | | | | | | | | | | |
Adjusted EBITDA(a) | | $ | 8,879 | | $ | 9,012 | | $ | 133 | | | 1.5 | % |
| Capital expenditures | | $ | 1,511 | | $ | 3,023 | | $ | 1,512 | | | 100.7 | % |
| | | | | | | | | | | | | | |
| | | Nine Months Ended Sept. 30, | | Change | |
| | | | YTD 2007 | | | YTD 2008 | | | Amount | | | Percent | |
| | | | | | | | | | | | | | |
| Revenues | | $ | 51,885 | | $ | 53,766 | | $ | 1,881 | | | 3.6 | % |
| Operating income | | $ | 14,276 | | $ | 15,811 | | $ | 1,535 | | | 10.8 | % |
| Interest expense | | $ | (16,634 | ) | $ | (14,230 | ) | $ | (2,404 | ) | | (14.5 | )% |
| Net income (loss) available to stockholders | | $ | (891 | ) | $ | 1,603 | | $ | 2,494 | | | * | % |
| Basic net income (loss) per share | | $ | (0.08 | ) | $ | 0.13 | | $ | 0.21 | | | * | % |
| Diluted net income (loss) per share | | $ | (0.14 | ) | $ | 0.10 | | $ | 0.24 | | | * | % |
| | | | | | | | | | | | | | |
Adjusted EBITDA(a) | | $ | 25,928 | | $ | 26,345 | | $ | 417 | | | 1.6 | % |
| Capital expenditures | | $ | 4,387 | | $ | 6,970 | | $ | 2,583 | | | 58.9 | % |
| * Not a meaningful calculation | | | | | | | | | | | | | |
Reconciliation of Adjusted EBITDA to Net Income (Loss)
| | | Three Months Ended | | Nine Months Ended | |
| | | September 30, | | September 30, | |
| | | 2007 | | 2008 | | 2007 | | 2008 | |
| Adjusted EBITDA | | | | | | | | | |
| Net Income (Loss) | | $ | (668 | ) | $ | 789 | | $ | (891 | ) | $ | 1,603 | |
Add: Depreciation | | | | | | 2,748 | | | 8,934 | | | 8,276 | |
| Interest Expense - Net of Premium | | | 4,219 | | | 4,167 | | | 13,743 | | | 12,443 | |
| Interest Expense - Caplet Cost | | | 206 | | | 253 | | | 673 | | | 723 | |
| Interest Expense - Bond Premium | | | (16 | ) | | (19 | ) | | (16 | ) | | (54 | ) |
| Interest Expense - Amortize Loan Cost | | | 1,437 | | | 373 | | | 2,233 | | | 1,118 | |
| Gain/Loss from Investment | | | - | | | - | | | | | | (45 | ) |
| Income Tax Expense | | | 394 | | | 464 | | | (97 | ) | | 696 | |
| Change in Fair Value of Derivative | | | (186 | ) | | (174 | ) | | (654 | ) | | (100 | ) |
| Loan Fees | | | 19 | | | 19 | | | 57 | | | 57 | |
| Amortization - Intangibles | | | 648 | | | 393 | | | 1,946 | | | 1,628 | |
| Adjusted EBITDA | | $ | 8,879 | | $ | 9,013 | | $ | 25,928 | | $ | 26,345 | |
(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.
Otelco Reports Third Quarter Results
Page 4
Nov. 4, 2008
| | | Year Ended December 31, | | March 31, | | June 30, | | Sept. 30 | |
Key Operating Statistics | | 2006 | | 2007 | | 2008 | | 2008 | | 2008 | |
| RLEC access lines: | | | | | | | | | | | |
| Voice lines | | | 37,736 | | | 36,687 | | | 36,239 | | | 35,989 | | | 35,600 | |
| Data lines | | | 10,016 | | | 12,160 | | | 12,729 | | | 13,065 | | | 13,395 | |
| RLEC access line | | | | | | | | | | | | | | | | |
equivalents (1) | | | 47,752 | | | 48,847 | | | 48,968 | | | 49,054 | | | 48,995 | |
| | | | | | | | | | | | | | | | | |
| CLEC access lines: | | | | | | | | | | | | | | | | |
| Voice lines | | | 14,267 | | | 16,973 | | | 17,457 | | | | | | | |
| Data lines | | | 2,016 | | | | | | | | | | | | | |
| CLEC access line | | | | | | | | | | | | | | | | |
equivalents (1) | | | 16,283 | | | 19,544 | | | 20,059 | | | 20,475 | | | 21,093 | |
| | | | | | | | | | | | | | | | | |
| Otelco access line | | | | | | | | | | | | | | | | |
equivalents (1) | | | 64,035 | | | 68,391 | | | 69,027 | | | 69,529 | | | 70,088 | |
| | | | | | | | | | | | | | | | | |
| Cable television customers | | | 4,188 | | | 4,169 | | | 4,175 | | | 4,109 | | | 4,115 | |
| Dial-up internet customers | | | 19,587 | | | 15,249 | | | 14,290 | | | 13,419 | | | 12,537 | |
(1) We define access line equivalents as voice access lines and data access lines (including cable modems, digital subscriber lines, and dedicated data access trunks).
FINANCIAL DISCUSSION FOR THIRD QUARTER 2008:
Revenue
Total revenues grew 3.7% in the three months ended September 30, 2008, to $18.2 million from $17.6 million in the three months ended September 30, 2007. All categories of revenue grew during the quarter, led by the growth in CLEC customers in Maine and increased digital Internet lines throughout the areas we serve. Local services revenue grew 2.7% in the third quarter 2008 to $6.7 million from $6.5 million in the quarter ended September 30, 2007. Network access revenue grew 1.2% to $6.7 million in the third quarter 2008 from $6.6 million in the third quarter 2007. Cable television revenue in the three months ended September 30, 2008 increased 9.9% to $0.6 million from just over $0.5 million in the three months ended September 30, 2007. Internet revenue for the third quarter 2008 increased 5.7% to $3.0 million from $2.9 million in the quarter ended September 30, 2007. Transport services revenue grew 15.9% to $1.2 million in the three months ended September 30, 2008 from $1.1 million in the same period in 2007.
Operating Expenses
Operating expenses in the three months ended September 30, 2008 increased 0.8% to $12.6 million from $12.5 million in the three months ended September 30, 2007. Cost of services increased 5.2% to $6.7 million from $6.3 million in the quarter ended September 30, 2007. The cost associated with increased CLEC revenue in Maine, increased long distance and Internet bandwidth requirements to support additional market penetration, and higher employee and energy costs were partially offset by network and organizational efficiencies. Selling, general and administrative expenses increased 3.8% to $2.8 million in the quarter ended September 30, 2008, from $2.7 million in the quarter ended September 30, 2007. Increased employee cost was partially offset by lower insurance and legal costs. Depreciation and amortization for second quarter decreased 9.6% to $3.1 million from $3.5 million.
Interest Expense
Interest expense decreased 18.3% to $4.8 million in the quarter ended September 30, 2008 from $5.8 million in the same period a year ago, reflecting the reduction in senior and total debt after the sale of 3,000,000 Income Deposit Securities units in July 2007 and a lower margin on senior debt.
Otelco Reports Third Quarter Results
Page 5
Nov. 4, 2008
Adjusted EBITDA for the three months ended September 30, 2008 was $9.0 million, up 1.5% over the same period in 2007. See financial tables for a reconciliation of Adjusted EBITDA to net income.
Balance Sheet
As of September 30, 2008, the Company had cash and cash equivalents of $13.2 million and total long-term debt of $170.0 million. The third quarter distribution of $5.3 million in interest and dividends to our share owners and $0.3 million to our bond holders occurred on September 30, 2008. This was the Company’s fifteenth consecutive distribution since going public in 2004.
Capital Expenditures
Capital expenditures were $3.0 million for the quarter. The Company added enhanced network capability to serve competitive customers in Maine; initiated the build out for offering IPTV in Alabama; expanded its wireless Internet footprint in Missouri; and continued to upgrade its rural facilities in all three states, including additional data line capacity.
Third Quarter Earnings Conference Call
Otelco has scheduled a conference call, which will be broadcast live over the Internet, on Wednesday, November 5, 2008, at 11:00 a.m. ET. To participate in the call, dial (913) 981-5580 and ask for the Otelco call 10 minutes prior to the start time. Investors, analysts and the general public will also have the opportunity to listen to the conference call free over the Internet by visiting the Company's Web site at www.OtelcoInc.com or www.earnings.com. To listen to the live call online, please visit the Web site at least 15 minutes early to register, download and install any necessary audio software. For those who cannot listen to the live Web cast, a replay of the Web cast will be available on the Company's website at www.OtelcoInc.com or www.earnings.com for 30 days. A one-week telephonic replay may also be accessed by calling 719-457-0820 and using the passcode 4154593.
ABOUT OTELCO
Otelco Inc., headquartered in Oneonta, Alabama, provides wireline telephone services in Alabama, Maine, Massachusetts, Missouri and West Virginia. The Company’s services include local and long distance telephone, network access, transport, digital high-speed and dial-up Internet access, cable television and other telephone related services. With more than 99,000 voice and data access lines (including the three subsidiaries of Country Road Communication LLC acquired on October 31, 2008) which are collectively referred to as access line equivalents, Otelco is among the top 25 largest local exchange carriers in the United States based on number of access lines. Otelco operates ten incumbent telephone companies serving rural markets, or rural local exchange carriers, each of which can trace its history as a local telecommunications provider as far back as the early 1900s. It also provides competitive retail and wholesale telephone services through several subsidiaries. For more information, visit the Company’s web site at www.OtelcoInc.com.
FORWARD LOOKING STATEMENTS
Statements in this press release that are not statements of historical or current fact constitute forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties, and other unknown factors that could cause the actual results of the Company to be materially different from the historical results or from any future results expressed or implied by such forward-looking statements. In addition to statements which explicitly describe such risks and uncertainties, readers are urged to consider statements labeled with the terms “believes”, “belief,” “expects,” ‘intends,” “anticipates,” “plans,” or similar terms to be uncertain and forward-looking. The forward-looking statements contained herein are also subject generally to other risks and uncertainties that are described from time to time in the Company’s filings with the Securities and Exchange Commission.
Otelco Reports Third Quarter Results
Page 6
Nov. 4, 2008
OTELCO INC.
Consolidated Balance Sheets
| | | As of | | As of | |
| | December 31, 2007 | | | |
| | | | | |
| Assets | | | | | |
| Current Assets | | | | | |
| Cash and cash equivalents | | $ | 12,810,497 | | $ | 13,160,898 | |
| Accounts receivable: | | | | | | | |
| Due from subscribers, net of allowance | | | | | | | |
| for doubtful accounts of $257,862 and | | | | | | | |
| $165,078, respectively | | | 2,753,451 | | | 2,899,519 | |
| Unbilled receivables | | | 2,616,867 | | | 2,649,755 | |
| Other | | | 1,760,207 | | | 1,934,355 | |
| Materials and supplies | | | 1,991,724 | | | 2,259,937 | |
| Prepaid expenses | | | 1,149,180 | | | 548,079 | |
| Income tax receivable | | | 469,546 | | | 214,440 | |
| Deferred income taxes | | | 1,486,439 | | | 1,486,439 | |
| Total current assets | | | 25,037,911 | | | 25,153,442 | |
| | | | | | | | |
| Property and equipment, net | | | 54,610,355 | | | 52,786,133 | |
| Goodwill | | | 134,570,435 | | | 134,570,435 | |
| Intangible assets, net | | | 9,514,772 | | | 8,462,790 | |
| Investments | | | 1,207,183 | | | 1,188,051 | |
| Deferred financing costs | | | 5,878,943 | | | 4,760,463 | |
| Interest rate cap | | | 1,510,951 | | | 479,152 | |
| Deferred charges | | | 155,573 | | | 650,228 | |
| Total assets | | $ | 232,486,123 | | $ | 228,050,694 | |
| | | | | | | | |
| Liabilities and Stockholders’ Equity | | | | | | | |
| Current liabilities | | | | | | | |
| Accounts payable | | $ | 2,058,989 | | $ | 1,867,564 | |
| Accrued expenses | | | 3,716,880 | | | 5,210,931 | |
| Advanced billings and payments | | | 2,077,713 | | | 1,944,115 | |
| Customer deposits | | | 185,147 | | | 194,531 | |
| Total current liabilities | | | 8,038,729 | | | 9,217,141 | |
| Deferred income taxes | | | 25,223,656 | | | 25,223,656 | |
| Advance billings and payments | | | 797,498 | | | 750,081 | |
| Other liabilities | | | 183,756 | | | 179,911 | |
| Long-term notes payable | | | 170,019,705 | | | 169,965,588 | |
| Total liabilities | | | 204,263,344 | | | 205,336,377 | |
| | | | | | | | |
| Derivative liability | | | 814,005 | | | 516,112 | |
| Class B common convertible to senior | | | | | | | |
| subordinated notes | | | 4,085,033 | | | 4,085,033 | |
| | | | | | | | |
| Stockholders’ equity | | | | | | | |
| Class A Common stock, $.01 par value-authorized | | | | | | | |
| 20,000,000 shares; issued and outstanding 12,676,733 | | | | | | | |
| shares | | | 126,767 | | | 126,767 | |
| Class B Common stock, $.01 par value-authorized | | | | | | | |
| 800,000 shares; issued and outstanding | | | | | | | |
| 544,671 shares | | | 5,447 | | | 5,447 | |
| Additional paid in capital | | | 28,215,056 | | | 21,512,233 | |
| Retained deficit | | | (4,084,797 | ) | | (2,481,378 | ) |
| Accumulated other comprehensive loss | | | (938,732 | ) | | (1,049,897 | ) |
| | | | | | | | |
| Total stockholders’ equity | | | 23,323,741 | | | 18,113,172 | |
| | | | | | | | |
| Total liabilities and stockholders’ equity | | $ | 232,486,123 | | $ | 228,050,694 | |
Otelco Reports Third Quarter Results
Page 7
Nov. 4, 2008
OTELCO INC.
Consolidated Statements of Operations
(unaudited)
| | | Three Months Ended | | Nine Months Ended | |
| | | September 30, | | September 30, | |
| | | 2007 | | 2008 | | 2007 | | 2008 | |
| | | | | | | | | | |
| Revenues | | | | | | | | | |
| Local services | | $ | 6,502,105 | | $ | 6,678,826 | | $ | 19,381,216 | | $ | 20,116,902 | |
| Network access | | | 6,612,250 | | | 6,694,486 | | | 19,190,669 | | | 19,237,269 | |
| Cable television | | | 547,044 | | | 601,025 | | | 1,642,985 | | | 1,713,457 | |
| Internet | | | 2,867,381 | | | 3,028,963 | | | 8,547,085 | | | 9,060,822 | |
| Transport services | | | 1,065,521 | | | 1,234,274 | | | 3,122,940 | | | 3,637,276 | |
| Total revenues | | | 17,594,301 | | | 18,237,574 | | | 51,884,895 | | | 53,765,726 | |
| | | | | | | | | | | | | | |
| Operating expenses | | | | | | | | | | | | | |
| Cost of services and products | | | 6,326,014 | | | 6,654,860 | | | 19,131,470 | | | 20,052,583 | |
| Selling, general and administrative | | | | | | | | | | | | | |
| expenses | | | 2,676,515 | | | 2,777,411 | | | 7,597,843 | | | 7,998,818 | |
| Depreciation and amortization | | | 3,474,799 | | | 3,140,688 | | | 10,879,513 | | | 9,903,702 | |
| Total operating expenses | | | 12,477,328 | | | 12,572,959 | | | 37,608,826 | | | 37,955,103 | |
| | | | | | | | | | | | | | |
| Income from operations | | | 5,116,973 | | | 5,664,615 | | | 14,276,069 | | | 15,810,623 | |
| | | | | | | | | | | | | | |
| Other income (expense) | | | | | | | | | | | | | |
| Interest expense | | | (5,844,898 | ) | | (4,773,647 | ) | | (16,633,507 | ) | | (14,229,727 | ) |
| Change in fair value of derivative | | | 186,055 | | | 173,842 | | | 654,472 | | | 99,787 | |
| Other income | | | 268,356 | | | 188,160 | | | 715,389 | | | 618,785 | |
| Total other expense | | | (5,390,487 | ) | | (4,411,645 | ) | | (15,263,646 | ) | | (13,511,155 | ) |
| | | | | | | | | | | | | | |
| Income (loss) before income tax expense | | | (273,514 | ) | | 1,252,970 | ) | | (987,577 | ) | | 2,299,468 | |
| Income tax (expense) benefit | | | (394,197 | ) | | (463,727 | ) | | 97,079 | | | (696,049 | ) |
| | | | | | | | | | | | | | |
| Net income (loss) available to common | | | | | | | | | | | | | |
| stockholders | | $ | (667,711 | ) | $ | 789,243 | | $ | (890,498 | ) | $ | 1,603,419 | |
| | | | | | | | | | | | | | |
| Weighted average shares outstanding: | | | | | | | | | | | | | |
| Basic | | | 12,546,298 | | | 12,676,733 | | | 10,643,766 | | | 12,676,733 | |
| Diluted | | | 13,090,969 | | | 13,221,404 | | | 11,188,437 | | | 13,221,404 | |
| | | | | | | | | | | | | | |
| Net income (loss) per share: | | | | | | | | | | | | | |
| Basic | | $ | (0.05 | ) | $ | 0.06 | | $ | (0.08 | ) | $ | 0.13 | |
| Diluted | | $ | (0.07 | ) | $ | 0.04 | | $ | (0.14 | ) | $ | 0.10 | |
| | | | | | | | | | | | | | |
| Dividends declared per share | | $ | 0.18 | | $ | 0.18 | | $ | 0.53 | | $ | 0.53 | |
Otelco Reports Third Quarter Results
Page 8
Nov. 4, 2008
OTELCO INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
| | | Nine Months Ended | |
| | | September 30, | |
| | | 2007 | | 2008 | |
| Cash flows from operating activities: | | | | | |
| Net income (loss) | | $ | (890,498 | ) | $ | 1,603,419 | |
| Adjustments to reconcile net income to cash | | | | | | | |
| flows from operating activities: | | | | | | | |
| Depreciation | | | 8,933,812 | | | 8,275,580 | |
| Amortization | | | 1,945,696 | | | 1,628,122 | |
| Interest rate caplet | | | 673,425 | | | 722,527 | |
| Amortization of debt premium | | | (16,533 | ) | | (54,117 | ) |
| Amortization of loan costs | | | 2,233,495 | | | 1,118,481 | |
| Change in fair value of derivative | | | (654,472 | ) | | (99,787 | ) |
| Provision for uncollectible revenue | | | 114,979 | | | 229,404 | |
| Gain on early lease termination | | | - | | | (121,124 | ) |
| Changes in assets and liabilities; net of assets and | | | | | | | |
| liabilities acquired: | | | | | | | |
| Accounts receivables | | | (642,120 | ) | | (582,528 | ) |
| Material and supplies | | | (117,903 | ) | | (268,213 | ) |
| Prepaid expenses and other assets | | | 496,527 | | | 601,101 | |
| Income tax receivable | | | - | | | 255,106 | |
| Accounts payable and accrued liabilities | | | 1,231,277 | | | 1,302,625 | |
| Advance billings and payments | | | (33,971 | ) | | (181,015 | ) |
| Other liabilities | | | 4,174 | | | 5,539 | |
| Net cash from operating activities | | | 13,277,888 | | | 14,435,120 | |
| | | | | | | | |
| Cash flows from investing activities: | | | | | | | |
| Acquisition and construction of property and equipment | | | (4,386,579 | ) | | (6,848,799 | ) |
| Proceeds from retirement of investment | | | 7,871 | | | - | |
| Deferred charges | | | (2,033 | ) | | (533,098 | ) |
| Net cash from investing activities | | | (4,380,741 | ) | | (7,381,897 | ) |
| | | | | | | | |
| | | | | | | | |
| Cash flows from financing activities: | | | | | | | |
| Cash dividends paid | | | (5,645,322 | ) | | (6,702,822 | ) |
| Direct cost of subsequent public offering | | | (2,307,686 | ) | | - | |
| Repayment of long-term debt | | | (55,353,032 | ) | | - | |
| Loan origination costs | | | (1,827,903 | ) | | - | |
| Proceeds from issuance of IDS | | | 59,400,000 | | | - | |
| Net cash from financing activities | | | (5,733,943 | ) | | (6,702,822 | ) |
| | | | | | | | |
| Net increase in cash and cash equivalents | | | 3,163,204 | | | 350,401 | |
| Cash and cash equivalents, beginning of period | | | 14,401,849 | | | 12,810,497 | |
| | | | | | | | |
| Cash and cash equivalents, end of period | | $ | 17,565,053 | | $ | 13,160,898 | |
| | | | | | | | |
| Supplemental disclosures of cash flow information: | | | | | | | |
| Interest paid | | $ | 13,878,086 | | $ | 12,705,214 | |
| | | | | | | | |
| Income taxes received | | $ | (133,218 | ) | $ | (122,606 | ) |
| | | | | | | | |
| Non-cash gain on early lease termination | | $ | - | | $ | (121,124 | ) |
