Otelco Inc., Board Meeting, Nov 12, 2009 Agenda: To consider the declaration of dividends and interest payments, which will be paid on December 30, 2009 to holders of record as of the close of business on December 15, 2009. The interest payment will cover the period from September 30, 2009 through December 29, 2009.

Otelco Inc. announced unaudited consolidated earnings results for the third quarter and nine months ended September 30, 2009. For the quarter, the company reported total revenues grew 44.8% to $26.4 million from $18.2 million in the three months ended September 30, 2008. The growth in revenue was primarily associated with the acquisition and growth in CLEC sales. Income from operations was $6.2 million against $5.7 million for the same period a year ago. Loss before income tax of $0.2 million against income before income tax was $1.3 million for the same period a year ago. Net loss available to common stockholders of $0.01 million or $0.01 per diluted share against net income available to common stockholders of $0.8 million or $0.04 per diluted share for the same period a year ago. Adjusted EBITDA was $12.8 million compared to $9.0 million for the same period in 2008 and $12.4 million in the second quarter of 2009. Adjusted EBITDA was $12.8 million compared to $9.0 million for the same period a year ago. Capital expenditures were $2.8 million compared to $2.9 million for the same period a year ago. Capital expenditures reflecting a return to a more normal level of investment in the business. The company is upgrading and expanding its soft switching infrastructure in Maine and Missouri; enhancing DSL capacity; expanding IPTV capability in Alabama; and investing in competitive customer specific equipment to support the growth of CLEC customers. Revenue growth and effective cost management, coupled with a focus on the integration of acquisitions, are the drivers behind the results. For the nine months, the company reported revenue of $77.7 million, income from operations of $16.4 million, loss before income tax of $2.7 million, net loss available to common stockholders of $1.6 million or $0.13 per share compared to total revenue of $53.8 million, income from operations of $15.8 million, income before income tax of $2.3 million, net income available to common stockholders of $1.6 million or $0.10 per share for the same period a year ago. Net cash from operating activities was $21.3 million against $14.4 million for the same period a year ago. The company spent $6.4 million on acquisition and construction of property and equipment compared to $6.8 million for the same period a year ago. Adjusted EBITDA was $36.6 million compared to $26.3 million for the same period a year ago. Capital expenditures were $6.4 million compared to $6.8 million for the same period a year ago. Each quarter, the Board will consider the declaration of dividends during its normally scheduled meeting. For this quarter, the Board is meeting on November 12, 2009. The scheduled interest and any dividend declared will be paid on December 30, 2009 to holders of record as of the close of business on December 15, 2009. The interest payment will cover the period from September 30, 2009 through December 29, 2009. Currently, it is anticipated that the company's dividends in 2009 will continue to be treated as a return of capital for tax purposes. The Company has made nineteen successive quarterly distributions of dividends and interest since its IDS units were originally offered to the public in December 2004.

Otelco Inc., Q3 2009 Earnings Call, Nov-05 2009