Otelco reports $4.89 million of first-quarter income, to emerge soon

By Caroline Salls

Pittsburgh, May 7 - Otelco Inc. reported $4.89 million of income from operations for the three months ended March 31 on $20.99 million in revenues, according to a company news release.

The figures showed a decline from the $6.62 million of income from operations posted for the three months ended March 31, 2012 on $25.37 million in revenues.

The net loss for the first quarter of this year was $1.77 million, compared to $818,238 of net income for the same period of 2012.

Otelco had $34.29 million in cash and cash equivalents at March 31, up from $32.52 million at Dec. 31.

"First quarter produced financial results that met our expectations," president and chief executive officer Mike Weaver said in the release.

"We generated adjusted EBITDA of $8.8 million, incurred and paid $1.4 million in restructuring expenses related to the bankruptcy filing and still increased our cash balance by $1.8 million.

"We invested $0.8 million in capital equipment in the first quarter and expect to increase our capital expenditures over the course of the year for a total investment of approximately $7.0 million for 2013."

Restructuring update

As previously reported, Otelco's plan of reorganization was confirmed on Monday.

"The restructuring process continues to proceed as planned," Weaver said in the release.

"We were pleased with the voting results of the solicitation, having received overwhelming support for our plan from both our senior lenders and our subordinated noteholders.

"The next major steps in the process include completing the amendment and extension of our senior credit facility, obtaining FCC approval for licenses utilized by one of our subsidiaries and the issuance of the new class A common stock in exchange for the senior subordinated notes.

"Given the progress we have made on the balance sheet restructuring to date and the recent confirmation of our plan, we expect to exit bankruptcy in the near future."

Otelco, an Oneonta, Ala.-based traditional wireline telephone services provider, filed for bankruptcy on Feb. 1 in the U.S. Bankruptcy Court for the District of Delaware. The Chapter 11 case number is 13-10593.

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