WEB NEWS Research
Otelco Inc. (NASDAQ:OTEL) ($17.41; $58.9M market cap), a telecommunications service and provider, announced Q1 2019 results:
Sales of $15.8 million vs $16.7 million in the prior year
Non-GAAP EPS of $0.57 vs $0.59 in the prior year
"The Company’s multi-year plan to increase service speeds is expected to help reduce customer churn and stabilize revenues. In 2018, Otelco invested $8.0 million to grow its fiber distribution network and improve its support systems, including the $2.3 million invested during fourth quarter 2018. In 2019, fiber-to-the-premise (“FTTP”) will be the primary vehicle to increase data capacity for Otelco’s customers, with fiber-to-the-node (“FTTN”) and fixed wireless options being employed in more sparsely populated areas."
Legacy revenue continues to drop off as the company builds out its network. It looks like the first stage of the company’s turnaround - the shoring up of its balance sheet - is now complete. This, in turn, is allowing the company to invest in future growth, as shown above.
Until the company begins to realize top line growth from its new network, EPS growth will likely be muted. However, we still think the company is an ideal acquisition target, a sentiment that is partially driven by the fact that its largest shareholder, Ira Sochet, continues to buy stock even as it hits new highs.
To see our full coverage on OTEL, go here . You can also see more background on OTEL’s history via two Seeking Alpha articles linked below:
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Otelco Inc. (NASDAQ:OTEL) ($16.95; $57.4M market cap), a telecommunications service and provider announced Q4 2018 results:
“The flexibility provided by our new debt agreement and completion of the billing system conversion, coupled with Otelco’s participation in the FCC’s A-CAM program with its focus on broadband and fiber deployment, provides a solid foundation for our business,” noted Souza. “Our marketing, sales and customer service teams are targeted in their approach to offering fiber-based Lightwave services to every location we pass with each new mile of fiber. With these improvements, we are well positioned to enhance our customers’ experience, improve available data speeds and product offerings, and add new customers to the Otelco family of companies. Focusing on both cost management and our revenue trajectory should continue to serve our employees, customers and stockholders well as we move into 2019.
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Otelco Inc. (NASDAQ:OTEL) ($16.90; $57.2M market cap), a telecommunications service and provider announced Q3 results:
Sales of $16.3 million vs $16.9 million in the prior year
EPS of $0.67 vs $0.46 in the prior year
“We continued to execute our strategy of fiber deployment and debt reduction in third quarter,” said Rob Souza, President and CEO of Otelco. “Net income increased 46.4% for third quarter 2018, compared to third quarter 2017, while we invested $2.4 million in our network and operations. The ratio of debt, net of cash, to Consolidated EBITDA improved to 2.79, reflecting the voluntary prepayments made during the quarter.”
The billing system transition has required a lot of extra time and work from our employee team this quarter, and we appreciate their dedicated efforts beyond the normal requirements of operating the business,” continued Souza. “With this project behind us, we are well positioned with the new system to focus on enhancing our customer experience, improving available data speeds, adding new customers to the Otelco family and reducing our leverage to give the Company more financial flexibility for the future. Focusing on debt reduction, cost management and positively changing our revenue trajectory should continue to serve our employees, customers and stockholders well as we move into 2019.”
To see our full coverage on OTEL, go here .
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Otelco Inc. (NASDAQ:OTEL) ($15.30; $51.8M market cap), a telecommunications service and provider, continues to see share accumulation from its largest stakeholder, Ira Sochet. Since our last update on June 12, 2018, Mr Sochet has filed two more Form 4s showing he has added 23,396 more shares to his already massive stake. He now owns over 800,000 shares, or 23.7% of the company.
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Otelco Inc. ( NASDAQ:OTEL ) ($14.45; $48.3M market cap) , a telecommunications service and provider, announced Q4 2017 results :
Quotes from management:
“In an industry seeing declines in residential subscribers every measurement period, it is exciting to be able to hold our revenue and operating margins constant during fourth quarter,” announced Rob Souza, President and CEO of Otelco. “The ACAM funding continues to help offset local service revenue declines. Our team is focused on meeting our customers' needs in an efficient manner, while we expand the fiber content of our network.
In the first year of its ten-year ACAM funding, Otelco placed approximately 81 miles of fiber passing over 1,900 locations and reaching 7.5% of its eligible ACAM locations.”
As we stated in our last update, OTEL will continue to stay focused on repaying debt, reducing cost of capital, and returning value to shareholders. We believe OTEL is well positioned to do this since the new credit facility allows for much more flexibility.
On August 7, 2017, we disclosed a long position in OTEL when it was trading at ~$8.20 and added the stock to our Mock “Takeover Candidate Portfolio”. The company initially caught our attention when it announced that it was considering strategic options in the Fall of 2016.
