Otelco Inc (OTT) has reported 39.19 percent plunge in profit for the quarter ended Sep. 30, 2016. The company has earned $1.12 million, or $0.33 a share in the quarter, compared with $1.85 million, or $0.56 a share for the same period last year. Revenue during the quarter went down marginally by 2.58 percent to $17.39 million from $17.85 million in the previous year period. Gross margin for the quarter expanded 74 basis points over the previous year period to 54.24 percent. Total expenses were 73.77 percent of quarterly revenues, up from 72.49 percent for the same period last year. That has resulted in a contraction of 128 basis points in operating margin to 26.23 percent.
Operating income for the quarter was $4.56 million, compared with $4.91 million in the previous year period.
“The impact of the decline in revenue this quarter when compared with the same period in 2015 was once again offset by our network and operations cost improvements,” said Rob Souza, President and Chief Executive Officer of Otelco. “Excluding the impact of $0.3 million of legal costs associated with an exploratory project, operating income declined by less than $0.1 million and Consolidated EBITDA declined by $0.2 million. Top line residential and access revenue remain under pressure, and our focus on both delivering continuous cost improvements and implementing top-line revenue enhancements, promotions, and, where appropriate, pricing actions, is having the desired impact.
Operating cash flow declines
Otelco Inc has generated cash of $13.66 million from operating activities during the nine month period, down 11.99 percent or $1.86 million, when compared with the last year period. The company has spent $4.11 million cash to meet investing activities during the nine month period as against cash outgo of $4.57 million in the last year period.
The company has spent $7.10 million cash to carry out financing activities during the nine month period as against cash outgo of $10.14 million in the last year period.
Cash and cash equivalents stood at $9.33 million as on Sep. 30, 2016, up 58.37 percent or $3.44 million from $5.89 million on Sep. 30, 2015.
Working capital turns positive
Working capital of Otelco Inc has turned positive to $8.35 million on Sep. 30, 2016 from negative $93.25 million on Sep. 30, 2015. Current ratio was at 1.73 as on Sep. 30, 2016, up from 0.16 on Sep. 30, 2015.
Days sales outstanding went up to 24 days for the quarter compared with 19 days for the same period last year.
At the same time, days payable outstanding went up to 7 days for the quarter from 5 for the same period last year.
Debt comes down
Otelco Inc has recorded a decline in total debt over the last one year. It stood at $93.54 million as on Sep. 30, 2016, down 8.31 percent or $8.48 million from $102.02 million on Sep. 30, 2015. Long-term debt stood at $90.61 million as on Sep. 30, 2016. Total debt was 79.92 percent of total assets as on Sep. 30, 2016, compared with 87.11 percent on Sep. 30, 2015. Interest coverage ratio deteriorated to 1.67 for the quarter from 2.52 for the same period last year. Disclaimer: Please note that this is an auto-generated article. IRIS does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. IRIS especially states that it has no financial liability whatsoever to any user on account of the use of information provided on its website. For queries contact: editor@irisindia.net
