Exhibit 99.1
Contact: Curtis Garner
Chief Financial Officer
Otelco Inc.
205-625-3580
HTCurtis@otelcotel.comUT
Otelco Reports Third Quarter 2013 Results
ONEONTA, Alabama (November 11, 2013) – Otelco Inc. (NASDAQ: OTEL), 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, 2013. Key highlights for Otelco include:
| | ● | Total revenues of $19.0 million for third quarter 2013. |
| | ● | Operating income of $4.3 million for third quarter 2013. |
| | ● | Adjusted EBITDA (a non-GAAP measure defined below) of $7.3 million for third quarter 2013. |
“Third quarter 2013 results produced Adjusted EBITDA of $7.3 million,” said Mike Weaver, President and Chief Executive Officer of Otelco. “We invested $1.6 million in capital equipment, returning to a more typical spending level after a year of controlled investment during our balance sheet restructuring.
“Business access line equivalents grew in third quarter in both our RLEC and CLEC markets,” added Weaver. “The quality of our Hosted PBX product is gaining attention as other carriers are exploring arrangements with Otelco to potentially white label our product for their customers. We expect to complete the first installation of these wholesale customers in November, expanding our enterprise marketing footprint. Our capital equipment investments continue to increase our capabilities to provide the higher data speeds our customers require to meet their expanding needs.
“We made our first scheduled principal payment of $1.7 million on our new senior credit facility, completed the payment of our remaining restructuring expenses, and ended the third quarter with $10.4 million in cash, down only $0.8 million from the previous quarter. An additional required principal payment of $0.3 million was made at the end of October, reflecting the terms of our senior credit facility as we continue to focus on reducing our leverage,” Weaver concluded.
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Otelco Reports Third Quarter 2013 Results Page 2 |
| Third Quarter 2013 Financial Summary |
| (Dollars in thousands, except per share amounts) |
| (Unaudited) |
| | | | | | | |
| | | Three Months Ended September 30, | | | Change | |
| | | 2012 | | | 2013 | | | Amount | | | Percent | |
| Revenues | | $ | 24,428 | | | $ | 18,980 | | | $ | (5,448 | ) | | | (22.3 | ) % |
| Operating income | | $ | 6,487 | | | $ | 4,301 | | | $ | (2,186 | ) | | | (33.7 | ) % |
| Interest expense | | $ | (5,674 | ) | | $ | 2,470 | | | $ | 8,144 | | | | (143.5 | ) % |
| Net income available to stockholders | | $ | 316 | | | $ | 1,472 | | | $ | 1,156 | | | | 365.8 | % |
| Basic net income per share | | $ | 0.12 | | | $ | 0.47 | | | $ | 0.35 | | | | 291.7 | % |
| | | | | | | | | | | | | | | | | |
Adjusted EBITDA(1) | | $ | 11,369 | | | $ | 7,256 | | | $ | (4,113 | ) | | | (36.2 | ) % |
| Capital expenditures | | $ | 851 | | | $ | 1,551 | | | $ | 700 | | | | 82.3 | % |
| | | | | | | | | | | | | | | | | |
| | | Nine Months Ended September 30, | | | Change | |
| | | 2012 | | | 2013 | | | Amount | | | Percent | |
| Revenues | | $ | 74,516 | | | $ | 59,634 | | | $ | (14,882 | ) | | | (20.0 | ) % |
| Operating income (loss) | | $ | (134,957 | ) | | $ | 14,310 | | | $ | 149,267 | | | | * | |
| Interest expense | | $ | (17,162 | ) | | $ | (10,248 | ) | | $ | (6,914 | ) | | | (40.3 | ) % |
| Net income (loss) available to stockholders | | $ | (126,876 | ) | | $ | 109,346 | | | $ | 236,222 | | | | * | |
| Basic net income (loss) per share | | $ | (47.98 | ) | | $ | 38.24 | | | $ | 86.22 | | | | * | |
| | | | | | | | | | | | | | | | | |
Adjusted EBITDA(1) | | $ | 33,659 | | | $ | 24,491 | | | $ | (9,168 | ) | | | (27.2 | ) % |
| Capital expenditures | | $ | 3,396 | | | $ | 3,133 | | | $ | (263 | ) | | | (7.7 | ) % |
| | | | | | | | | | | | | | | | | |
| * Not a meaningful calculation | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Reconciliation of Adjusted EBITDA to Net Income (Loss) | | | | | | | | | | | | | | | | |
| | | Three Months Ended September 30, | | | Nine Months Ended September 30, | |
| | | 2012 | | | 2013 | | | 2012 | | | 2013 | |
| Net income (loss) | | $ | 316 | | | $ | 1,472 | | | $ | (126,876 | ) | | $ | 109,346 | |
| Add: Depreciation | | | 2,467 | | | | 2,397 | | | | 7,942 | | | | 7,166 | |
| Interest expense - net of premium | | | 5,332 | | | | 2,217 | | | | 16,136 | | | | 9,421 | |
| Interest expense - amortize loan cost | | | 342 | | | | 253 | | | | 1,026 | | | | 828 | |
| Income tax expense (benefit) | | | 498 | | | | (587 | ) | | | (24,690 | ) | | | 4,284 | |
| Change in fair value of derivatives | | | - | | | | - | | | | (241 | ) | | | - | |
| Loan fees | | | 19 | | | | 6 | | | | 57 | | | | 39 | |
| Amortization - intangibles | | | 2,147 | | | | 446 | | | | 7,076 | | | | 2,539 | |
| Goodwill impairment | | | (344 | ) | | | - | | | | 143,654 | | | | - | |
| Impairment of long-lived assets | | | - | | | | - | | | | 8,622 | | | | - | |
| IXC tariff dispute settlement | | | - | | | | 112 | | | | - | | | | 181 | |
| Cancellation of debt | | | - | | | | - | | | | - | | | | (118,209 | ) |
| Restructuring expense | | | 592 | | | | 940 | | | | 953 | | | | 8,896 | |
Adjusted EBITDA(1) | | $ | 11,369 | | | $ | 7,256 | | | $ | 33,659 | | | $ | 24,491 | |
(1) 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 or increasing 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 or consolidated statement of cash flows 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 Company’s 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 2013 Results Page 3 |
| | | | | | | | | | | | | | | | | | | |
| Key Operating Statistics | | | | | | | | | | | | | | | | | | |
| (Unaudited) | | | | | | | | | | | | | | | | | Quarterly | |
| | | | | | | | | | | | | | | % Change | |
| | | December 31, | | | March 31, | | | June 30, | | | September 30, | | | from | |
| | | 2011 | | | 2012 | | | 2013 | | | 2013 | | | 2013 | | | June 30, 2013 | |
Otelco access line equivalents(1) | | | 102,378 | | | | 99,395 | | | | 98,839 | | | | 97,496 | | | | 96,980 | | | | (0.5 | ) % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| RLEC and other services: | | | | | | | | | | | | | | | | | | | | | | | | |
| Voice access lines | | | 46,202 | | | | 43,021 | | | | 42,274 | | | | 41,354 | | | | 41,036 | | | | (0.8 | ) % |
| Data access lines | | | 22,904 | | | | 22,742 | | | | 22,718 | | | | 22,604 | | | | 22,333 | | | | (1.2 | ) % |
Access line equivalents(1) | | | 69,106 | | | | 65,763 | | | | 64,992 | | | | 63,958 | | | | 63,369 | | | | (0.9 | ) % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Cable television customers | | | 4,201 | | | | 4,155 | | | | 4,102 | | | | 4,027 | | | | 3,963 | | | | (1.6 | ) % |
| Satellite television customers | | | 226 | | | | 233 | | | | 235 | | | | 237 | | | | 237 | | | | 0.0 | % |
| Security | | | - | | | | 63 | | | | 96 | | | | 111 | | | | 121 | | | | 9.0 | % |
| Additional internet customers | | | 5,414 | | | | 4,506 | | | | 4,312 | | | | 4,124 | | | | 2,957 | | | | (28.3 | ) % |
| RLEC dial-up | | | 301 | | | | 198 | | | | 169 | | | | 153 | | | | 141 | | | | (7.8 | ) % |
| Other dial-up | | | 2,797 | | | | 1,895 | | | | 1,726 | | | | 1,590 | | | | 455 | | | | (71.4 | ) % |
| Other data lines | | | 2,316 | | | | 2,413 | | | | 2,417 | | | | 2,381 | | | | 2,361 | | | | (0.8 | ) % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| CLEC: | | | | | | | | | | | | | | | | | | | | | | | | |
| Voice access lines | | | 30,189 | | | | 30,470 | | | | 30,589 | | | | 30,252 | | | | 30,337 | | | | 0.3 | % |
| Data access lines | | | 3,083 | | | | 3,162 | | | | 3,258 | | | | 3,286 | | | | 3,274 | | | | (0.4 | ) % |
Access line equivalents(1) | | | 33,272 | | | | 33,632 | | | | 33,847 | | | | 33,538 | | | | 33,611 | | | | 0.2 | % |
| Wholesale network connections | | | 157,144 | | | | 162,117 | | | | 2,608 | | | | 2,709 | | | | 2,756 | | | | 1.7 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | For the Year Ended | | | For the Three Months Ended | | | | | |
| | | December 31, | | | March 31, | | | June 30, | | | September 30, | | | | | |
| | | 2011 | | | 2012 | | | 2013 | | | 2013 | | | 2013 | | | | | |
| Total Revenues (in millions): | | $ | 101.8 | | | $ | 98.4 | | | $ | 21.0 | | | $ | 19.7 | | | $ | 19.0 | | | | | |
RLEC(2) | | $ | 57.4 | | | $ | 62.8 | | | $ | 14.5 | | | $ | 13.5 | | | $ | 14.1 | | | | | |
| CLEC | | $ | 44.4 | | | $ | 35.6 | | | $ | 6.5 | | | $ | 6.2 | | | $ | 4.9 | | | | | |
| | | | | | | | | | | | | | �� | | | | | | | | | | | |
(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).
(2) Includes regulated and unregulated RLEC revenue.
FINANCIAL DISCUSSION FOR THIRD QUARTER 2013 (unaudited):
Revenue
Total revenues of $19.0 million decreased 22.3% in the three months ended September 30, 2013, when compared to the three months ended September 30, 2012. The expiration of the Time Warner Cable (“TWC”) contract at the end of 2012 was the primary reason for the decrease in 2013, accounting for 73.2% of the total revenue decline.
| | | | | | | | | | | | | |
| | | Three Months Ended September 30, | | | Change | |
| | | 2012 | | | 2013 | | | Amount | | | Percent | |
| | | | | | (dollars in thousands) | | | | |
| Local services | | $ | 11,003 | | | $ | 7,081 | | | $ | (3,922 | ) | | | (35.6 | )% |
| Network access | | | 7,500 | | | | 6,112 | | | | (1,388 | ) | | | (18.5 | ) |
| Internet | | | 3,683 | | | | 3,630 | | | | (53 | ) | | | (1.4 | ) |
| Transport services | | | 1,454 | | | | 1,413 | | | | (41 | ) | | | (2.8 | ) |
| Cable television | | | 788 | | | | 744 | | | | (44 | ) | | | (5.6 | ) |
| Total | | $ | 24,428 | | | $ | 18,980 | | | $ | (5,448 | ) | | | (22.3 | ) |
Otelco Reports Third Quarter 2013 Results Page 4 |
Local services revenue decreased 35.6% in the third quarter of 2013 to $7.1 million from $11.0 million in the third quarter ended September 30, 2012. TWC related revenue decreased $3.2 million. The decline in RLEC voice access lines and reductions in toll calling decreased revenue by $0.7 million. Network access revenue decreased 18.5% in the third quarter of 2013 to $6.1 million from $7.5 million in the quarter ended September 30, 2012. TWC related access revenue declined $0.8 million. End user-related access revenue, net of payments from the new Connect America Fund, decreased $0.6 million, reflecting reduced subscriber usage and lower intrastate calling revenue associated with the FCC’s InterCarrier Compensation order. Internet revenue for the third quarter 2013 decreased 1.4% to $3.6 million from just under $3.7 million in the quarter ended September 30, 2012. The decline in dial-up internet services and a pricing change for multiple email addresses was partially offset by an increase in fiber revenue. Transport services revenue decreased 2.9% to $1.4 million in the three months ended September 30, 2013 from just under $1.5 million for the three months ended September 30, 2012. The decrease was associated with contract renewal pricing. Cable television revenue in the three months ended September 30, 2013 decreased 5.6% to just over $0.7 million compared to just under $0.8 million in the same period in 2012. The decrease was associated with reduced subscriber base which was only partially offset by increased security services revenue in our Alabama territory.
Operating Expenses
Operating expenses in the three months ended September 30, 2013 decreased 18.2% to $14.7 million from $17.9 million in the three months ended September 30, 2012. Cost of services decreased 14.0% to $8.9 million from $10.4 million for the three months ended September 30, 2012. Costs in 2012 associated with TWC were $0.6 million compared to no cost in third quarter 2013. New access recovery fees in 2013 offset $0.3 million in costs; restructuring of our CLEC sales force and customer service function reduced costs $0.2 million; lower circuit and facility expense reduced costs $0.2 million; and other network efficiencies reduced costs $0.2 million. Selling, general and administrative expenses decreased 11.7% to $2.9 million in the three months ended September 30, 2013, from $3.3 million in the three months ended September 30, 2012. Reorganization expenses are separately classified in 2013 but are included in selling, general and administrative expenses in the amount of $0.6 million in 2012. Other changes include an increase of $0.2 million in compensation expense and $0.1 million for the settlement of disputed charges in 2013, which were partially offset by $0.1 million in lower property taxes. Depreciation and amortization for third quarter 2013 decreased 38.4% to $2.8 million from $4.6 million in the third quarter 2012. The amortization of intangible assets associated with the TWC contract decreased $1.6 million. The amortization of a telephone plant adjustment decreased $0.1 million and RLEC depreciation decreased $0.1 million.
Interest Expense
Interest expense decreased 56.5% to $2.5 million in the quarter ended September 30, 2013, from $5.7 million a year ago. The exchange of the Company’s senior subordinated notes for new Class A common stock during second quarter 2013 compared to interest accrued on those notes in the same period of 2012 represents a decrease of $3.5 million. Interest on our senior subordinated notes increased $0.4 million, reflecting the higher interest rate floor in our new senior credit facility. Amortization of loan costs decreased $0.1 million.
Reorganization Items
Separate classification of reorganization items began in first quarter 2013 when we filed the Reorganization Cases. All reorganization expenses prior to that period are reflected in selling, general and administrative expenses. We expensed approximately $0.9 million during the third quarter of 2013 associated with our balance sheet restructuring process with no comparable expense in 2012 reflected as reorganization items. This brings the total for 2013 to $7.5 million (excluding cancellation of debt income).
Adjusted EBITDA
Adjusted EBITDA for the three months ended September 30, 2013 was $7.3 million compared to $11.4 million for the same period in 2012 and $8.4 million in the second quarter of 2013. See financial tables for a reconciliation of Adjusted EBITDA to net income.
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| Otelco Reports Third Quarter 2013 Results |
| Page 5 |
| November 11, 2013 |
Balance Sheet
As of September 30, 2013, the Company had cash and cash equivalents of $10.4 million compared to $32.5 million at the end of 2012, reflecting the Company’s payment of $28.7 million on its long-term notes payable in second quarter and another $1.7 million in third quarter 2013. The payments reduce the outstanding notes payable balance to $131.6 million, including the current portion of $7.0 million which includes $0.3 million for the Company’s first Excess Cash Flow payment to the senior lenders which was paid on October 31, 2013. The Company’s senior credit facility extends through April 2016 and includes a $5.0 million undrawn revolver.
Capital Expenditures
Capital expenditures were $1.6 million for the third quarter as the Company continues to invest in its infrastructure, including enhancing available broadband speeds in its service area.
Third Quarter Investors Conference Call
Otelco has scheduled a conference call, which will be broadcast live over the internet, on Tuesday, November 12, 2013, at 11:30 a.m. ET. To participate in the call, participants should dial (719) 457-2697 and ask for the Otelco call 10 minutes prior to the start time. Investors and the general public will also have the opportunity to listen to the conference call free over the internet by visiting the Company’s website at www.OtelcoInc.com. To listen to the live call online, please visit the website at least 15 minutes early to register, download and install any necessary audio software. For those who cannot listen to the live webcast, a replay of the webcast will be available on the Company’s website at www.OtelcoInc.com for 30 days. A two-week telephonic replay may also be accessed by calling (719) 457-0820 and using the confirmation code 5382593.
ABOUT OTELCO
Otelco Inc. provides wireline telecommunications services in Alabama, Maine, Massachusetts, Missouri, New Hampshire, Vermont and West Virginia. The Company’s services include local and long distance telephone, digital high-speed data lines, transport services, network access, cable television and other related services. With approximately 97,000 voice and data access lines, 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 eleven incumbent telephone companies serving rural markets, or rural local exchange carriers. It also provides competitive retail and wholesale communications services through several subsidiaries. For more information, visit the Company’s website atwww.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 2013 Results |
| Page 6 |
| November 11, 2013 |
| OTELCO INC. |
| CONSOLIDATED BALANCE SHEETS |
| (unaudited) |
| (in thousands, except share par value and share amounts) |
| | | December 31, | | | September 30, | |
| | | 2012 | | | 2013 | |
| Assets | | | | | | |
| Current assets | | | | | | |
| Cash and cash equivalents | | $ | 32,516 | | | $ | 10,350 | |
| Accounts receivable: | | | | | | | | |
Due from subscribers, net of allowance for doubtful accounts of $239 and $298, respectively | | | 4,206 | | | | 3,893 | |
| Unbilled receivables | | | 2,004 | | | | 1,941 | |
| Other | | | 5,336 | | | | 2,639 | |
| Materials and supplies | | | 1,845 | | | | 1,794 | |
| Prepaid expenses | | | 1,982 | | | | 1,841 | |
| Deferred income taxes | | | 1,843 | | | | 2,960 | |
| Total current assets | | | 49,732 | | | | 25,418 | |
| | | | | | | | | |
| Property and equipment, net | | | 58,243 | | | | 53,939 | |
| Goodwill | | | 44,957 | | | | 44,957 | |
| Intangible assets, net | | | 6,671 | | | | 4,420 | |
| Investments | | | 1,919 | | | | 1,900 | |
| Deferred financing costs, net | | | 4,037 | | | | 2,340 | |
| Deferred income taxes | | | 6,276 | | | | 1,556 | |
| Other assets | | | 490 | | | | 569 | |
| Total assets | | $ | 172,325 | | | $ | 135,099 | |
| | | | | | | | | |
Liabilities and Stockholders’ Deficit | | | | | | | | |
| Current liabilities | | | | | | | | |
| Accounts payable | | $ | 2,007 | | | $ | 935 | |
| Accrued expenses | | | 14,901 | | | | 5,904 | |
| Advance billings and payments | | | 1,560 | | | | 1,460 | |
| Deferred income taxes | | | 431 | | | | 469 | |
| Customer deposits | | | 91 | | | | 84 | |
| Current maturity of long-term notes payable | | | 270,990 | | | | 7,000 | |
| Total current liabilities | | | 289,980 | | | | 15,852 | |
| | | | | | | | | |
| Deferred income taxes | | | 22,670 | | | | 23,182 | |
| Advance billings and payments | | | 789 | | | | 749 | |
| Other liabilities | | | 484 | | | | 159 | |
| Long-term notes payable, less current maturities | | | - | | | | 124,634 | |
| Total liabilities | | | 313,923 | | | | 164,576 | |
| | | | | | | | | |
Stockholders’ deficit | | | | | | | | |
| | | | | | | | | |
Class A Common Stock, $.01 par value-authorized 20,000,000 shares; issued and outstanding 13,221,404 shares | | | 132 | | | | - | |
Class A Common Stock, $.01 par value-authorized 10,000,000 shares; issued and outstanding 2,870,948 shares | | | - | | | | 29 | |
Class B Common Stock, $.01 par value-authorized 250,000 shares; issued and outstanding 232,780 shares | | | - | | | | 2 | |
| Additional paid in capital | | | - | | | | 2,876 | |
| Retained deficit | | | (141,730 | ) | | | (32,384 | ) |
Total stockholders’ deficit | | | (141,598 | ) | | | (29,477 | ) |
| Total liabilities and stockholders’ deficit | | $ | 172,325 | | | $ | 135,099 | |
| Otelco Reports Third Quarter 2013 Results |
| Page 7 |
| November 11, 2013 |
| OTELCO INC. |
CONSOLIDATED STATEMENTS OF OPERATIONS |
| (unaudited) |
| (in thousands, except share and per share amounts) |
| | | Three Months Ended September 30, | | | Nine Months Ended September 30, | |
| | | 2012 | | | 2013 | | | 2012 | | | 2013 | |
| | | | | | | | | | | | | |
| Revenues | | $ | 24,428 | | | $ | 18,980 | | | $ | 74,516 | | | $ | 59,634 | |
| | | | | | | | | | | | | | | | | |
| Operating expenses | | | | | | | | | | | | | | | | |
| Cost of services | | | 10,361 | | | | 8,912 | | | | 32,038 | | | | 27,318 | |
| Selling, general and administrative expenses | | | 3,310 | | | | 2,924 | | | | 10,140 | | | | 8,300 | |
| Depreciation and amortization | | | 4,614 | | | | 2,843 | | | | 15,019 | | | | 9,706 | |
| Long-lived assets impairment - property, plant and equipment | | | - | | | | - | | | | 2,874 | | | | - | |
| Long-lived assets impairment - intangibles | | | - | | | | - | | | | 5,748 | | | | - | |
| Goodwill impairment | | | (344 | ) | | | - | | | | 143,654 | | | | - | |
| Total operating expenses | | | 17,941 | | | | 14,679 | | | | 209,473 | | | | 45,324 | |
| | | | | | | | | | | | | | | | | |
| Income (loss) from operations | | | 6,487 | | | | 4,301 | | | | (134,957 | ) | | | 14,310 | |
| | | | | | | | | | | | | | | | | |
| Other income (expense) | | | | | | | | | | | | | | | | |
| Interest expense | | | (5,674 | ) | | | (2,470 | ) | | | (17,162 | ) | | | (10,248 | ) |
| Change in fair value of derivatives | | | - | | | | - | | | | 241 | | | | - | |
| Other income (expense) | | | 1 | | | | (6 | ) | | | 312 | | | | 255 | |
| Total other expenses | | | (5,673 | ) | | | (2,476 | ) | | | (16,609 | ) | | | (9,993 | ) |
| | | | | | | | | | | | | | | | | |
| Income (loss) before reorganization items and income tax | | | 814 | | | | 1,825 | | | | (151,566 | ) | | | 4,317 | |
| | | | | | | | | | | | | | | | | |
| Reorganization items | | | - | | | | (940 | ) | | | - | | | | 109,313 | |
| | | | | | | | | | | | | | | | | |
| Income (loss) before income tax | | | 814 | | | | 885 | | | | (151,566 | ) | | | 113,630 | |
| Income tax benefit (expense) | | | (498 | ) | | | 587 | | | | 24,690 | | | | (4,284 | ) |
| | | | | | | | | | | | | | | | | |
| Net income (loss) | | $ | 316 | | | $ | 1,472 | | | $ | (126,876 | ) | | $ | 109,346 | |
| | | | | | | | | | | | | | | | | |
| Weighted average number of common shares outstanding | | | 2,644,281 | | | | 3,103,728 | | | | 2,644,281 | | | | 2,859,699 | |
| (restated for 2012) | | | | | | | | | | | | | | | | |
| Net income (loss) per common share | | $ | 0.12 | | | $ | 0.47 | | | $ | (47.98 | ) | | $ | 38.24 | |
| | | | | | | | | | | | | | | | | |
| Dividends declared per common share | | $ | - | | | $ | - | | | $ | 0.18 | | | $ | - | |
| Otelco Reports Third Quarter 2013 Results |
| Page 8 |
| November 11, 2013 |
|
CONSOLIDATED STATEMENTS OF CASH FLOWS |
| (unaudited) |
|
| | | Nine Months Ended
September 30, | |
| | | | | | 2013 | |
| Cash flows from operating activities: | | | | | | |
| Net income (loss) | | $ | (126,876 | ) | | $ | 109,346 | |
| Adjustments to reconcile net income (loss) to cash flows provided by operating activities: | | | | | | | | |
| Depreciation | | | 7,942 | | | | 7,166 | |
| Amortization | | | 7,077 | | | | 2,540 | |
| Long-lived assets impairment - property, plant and equipment | | | 2,874 | | | | - | |
| Long-lived assets impairment - intangibles | | | 5,748 | | | | - | |
| Goodwill impairment | | | 143,654 | | | | - | |
| Amortization of loan costs | | | 1,026 | | | | 827 | |
| Amortization of notes payable premium | | | (86 | ) | | | (31 | ) |
| Change in fair value of derivatives | | | (242 | ) | | | - | |
| Provision (benefit) for deferred income taxes | | | (24,765 | ) | | | 4,154 | |
| Provision for uncollectible accounts receivable | | | 352 | | | | 304 | |
| Changes in operating assets and liabilities | | | | | | | | |
| Accounts receivable | | | (123 | ) | | | 2,768 | |
| Material and supplies | | | (219 | ) | | | 51 | |
| Prepaid expenses and other assets | | | (443 | ) | | | 62 | |
| Accounts payable and accrued expenses | | | 4,840 | | | | 480 | |
| Advance billings and payments | | | 162 | | | | (140 | ) |
| Other liabilities | | | 195 | | | | (331 | ) |
| Reorganization adjustments: | | | | | | | | |
| Non-cash reorganization income | | | - | | | | (114,210 | ) |
| Net cash from operating activities | | | 21,116 | | | | 12,986 | |
| | | | | | | | | |
| Cash flows used in investing activities: | | | | | | | | |
| Acquisition and construction of property and equipment | | | (3,396 | ) | | | (3,133 | ) |
| | | | | | | | | |
| Net cash used in investing activities | | | (3,396 | ) | | | (3,133 | ) |
| | | | | | | | | |
| Cash flows used in financing activities: | | | | | | | | |
| Cash dividends paid | | | (2,330 | ) | | | - | |
| Principal repayment of long-term notes payable | | | - | | | | (30,366 | ) |
| Loan origination costs | | | (599 | ) | | | (1,653 | ) |
| | | | | | | | | |
| Net cash used in financing activities | | | (2,929 | ) | | | (32,019 | ) |
| | | | | | | | | |
| Net increase (decrease) in cash and cash equivalents | | | 14,791 | | | | (22,166 | ) |
| Cash and cash equivalents, beginning of period | | | 12,394 | | | | 32,516 | |
| | | | | | | | | |
| Cash and cash equivalents, end of period | | $ | 27,185 | | | $ | 10,350 | |
| | | | | | | | | |
| Supplemental disclosures of cash flow information: | | | | | | | | |
| Interest paid | | $ | 13,059 | | | $ | 6,395 | |
| | | | | | | | | |
| Income taxes paid | | $ | 77 | | | $ | 163 | |
| | | | | | | | | |
| Loan fees paid via issuance of Class B common stock | | $ | - | | | $ | 2,772 | |
| | | | | | | | | |
| Cancellation of Class A common stock | | $ | - | | | $ | 132 | |
| | | | | | | | | |
| Issuance of Class A common stock | | $ | - | | | $ | 29 | |
