Document And Entity Information
Document And Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Mar. 11, 2016 | Jun. 30, 2015 | |
Common Class A [Member] | |||
Entity Common Stock, Shares Outstanding (in shares) | 3,071,828 | ||
Common Class B [Member] | |||
Entity Common Stock, Shares Outstanding (in shares) | 0 | ||
Entity Registrant Name | OTELCO INC. | ||
Entity Central Index Key | 1,288,359 | ||
Trading Symbol | otel | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Public Float | $ 14,793,001 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2015 | ||
Document Fiscal Year Focus | 2,015 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Common Class A [Member] | ||
Stockholders' deficit | ||
Common Stock | $ 30 | $ 29 |
Common Class B [Member] | ||
Stockholders' deficit | ||
Common Stock | 2 | 2 |
Cash and cash equivalents | 6,884 | 5,082 |
Due from subscribers, net of allowance for doubtful accounts of $229 and $258, respectively | 3,575 | 3,732 |
Unbilled receivables | 1,610 | 1,675 |
Other | 1,722 | 1,931 |
Materials and supplies | 1,906 | 1,915 |
Prepaid expenses | 2,775 | $ 3,441 |
Deferred income taxes | 57 | |
Total current assets | 18,529 | $ 17,776 |
Property and equipment, net | 49,811 | 51,237 |
Goodwill | 44,976 | 44,976 |
Intangible assets, net | 2,363 | 3,178 |
Investments | 1,846 | 1,870 |
Deferred financing costs, net | 797 | 1,161 |
Other assets | 259 | 471 |
Total assets | 118,581 | 120,669 |
Accounts payable | 1,818 | 1,104 |
Accrued expenses | 4,567 | 5,054 |
Advance billings and payments | $ 1,418 | 1,410 |
Deferred income taxes | 53 | |
Customer Deposits | $ 68 | 70 |
Current maturity of long-term notes payable | 3,000 | 6,665 |
Total current liabilities | 10,871 | 14,356 |
Deferred income taxes | 26,163 | 24,027 |
Advance billings and payments | 628 | 681 |
Other liabilities | 27 | 142 |
Long-term notes payable, less current maturities | 97,052 | 105,470 |
Total liabilities | 134,741 | 144,676 |
Additional paid in capital | 3,881 | 3,519 |
Retained deficit | (20,073) | (27,557) |
Total stockholders' deficit | (16,160) | (24,007) |
Total liabilities and stockholders' deficit | $ 118,581 | $ 120,669 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parentheticals) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Common Class A [Member] | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, authorized (in shares) | 10,000,000 | 10,000,000 |
Common stock, issued (in shares) | 3,015,099 | 2,881,154 |
Common stock, outstanding (in shares) | 3,015,099 | 2,881,154 |
Common Class B [Member] | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, authorized (in shares) | 250,000 | 250,000 |
Common stock, issued (in shares) | 232,780 | 232,780 |
Common stock, outstanding (in shares) | 232,780 | 232,780 |
Allowance for doubtful accounts | $ 258 | $ 229 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Revenues | $ 71,102 | $ 73,870 | $ 78,972 |
Operating expenses | |||
Cost of services | 33,123 | 35,516 | 37,200 |
Selling, general and administrative expenses | 9,846 | 10,913 | 10,489 |
Depreciation and amortization | 8,878 | 10,583 | 12,632 |
Total operating expenses | 51,847 | 57,012 | 60,321 |
Income from operations | 19,255 | 16,858 | 18,651 |
Other income (expense) | |||
Interest expense | (7,894) | (8,854) | (12,673) |
Other income | 1,067 | 210 | 275 |
Total other expenses | (6,827) | (8,644) | (12,398) |
Income before reorganization items and income tax | $ 12,428 | $ 8,214 | 6,253 |
Reorganization items | 109,258 | ||
Income before income tax expense | $ 12,428 | $ 8,214 | 115,511 |
Income tax expense | (4,944) | (3,185) | (6,367) |
Net income | $ 7,484 | $ 5,029 | $ 109,144 |
Weighted average number of common shares outstanding: | |||
Basic (in shares) | 3,239,306 | 3,103,728 | 2,921,208 |
Diluted (in shares) | 3,313,641 | 3,168,161 | 2,921,208 |
Basic net income per common share (in dollars per share) | $ 2.31 | $ 1.62 | $ 37.36 |
Diluted net income per common share (in dollars per share) | $ 2.26 | $ 1.59 | $ 37.36 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Deficit - USD ($) $ in Thousands | Common Class A [Member]Common Stock [Member] | Common Class A [Member]Additional Paid-in Capital [Member] | Common Class A [Member] | Common Class B [Member]Common Stock [Member] | Common Class B [Member]Additional Paid-in Capital [Member] | Common Class B [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Total |
Balance, shares (in shares) at Dec. 31, 2012 | 13,221,404 | ||||||||
Balance at Dec. 31, 2012 | $ 132 | $ (141,730) | $ (141,598) | ||||||
Net income | 109,144 | 109,144 | |||||||
Cancellation of Class A stock (in shares) | (13,221,404) | ||||||||
Cancellation of Class A stock | $ (132) | (132) | |||||||
Issuance of Common Stock (in shares) | 2,870,948 | 232,780 | |||||||
Issuance of Common Stock | $ 29 | $ 106 | $ 135 | $ 2 | $ 2,770 | $ 2,772 | |||
Balance, shares (in shares) at Dec. 31, 2013 | 2,870,948 | 232,780 | |||||||
Balance at Dec. 31, 2013 | $ 29 | $ 2 | $ 2,876 | (32,586) | (29,679) | ||||
Net income | 5,029 | 5,029 | |||||||
Issuance of Common Stock (in shares) | 10,206 | ||||||||
Balance, shares (in shares) at Dec. 31, 2014 | 2,881,154 | 232,780 | |||||||
Balance at Dec. 31, 2014 | $ 29 | $ 2 | 3,519 | (27,557) | (24,007) | ||||
Stock-based compensation expense | 643 | 643 | |||||||
Net income | 7,484 | 7,484 | |||||||
Issuance of Common Stock (in shares) | 133,945 | ||||||||
Issuance of Common Stock | $ 1 | $ 1 | |||||||
Balance, shares (in shares) at Dec. 31, 2015 | 3,015,099 | 232,780 | |||||||
Balance at Dec. 31, 2015 | $ 30 | $ 2 | 3,881 | $ (20,073) | (16,160) | ||||
Stock-based compensation expense | $ 362 | $ 362 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Cash flows from operating activities: | |||
Net income | $ 7,484 | $ 5,029 | $ 109,144 |
Adjustments to reconcile net income to cash flows provided by operating activities: | |||
Depreciation | 7,678 | 8,941 | 9,650 |
Amortization | 1,200 | 1,642 | 2,982 |
Amortization of loan costs | $ 880 | $ 936 | 1,071 |
Amortization of notes payable premium | (31) | ||
Provision for deferred income taxes | $ 1,882 | $ 2,692 | $ 6,157 |
Excess tax benefit from stock-based compensation | 144 | 249 | |
Provision for uncollectible accounts receivable | 442 | 476 | $ 418 |
Stock-based compensation | 362 | 643 | |
Changes in operating assets and liabilities | |||
Accounts receivable | (11) | (128) | $ 3,442 |
Material and supplies | 9 | (261) | 191 |
Prepaid expenses and other assets | 878 | (1,486) | 44 |
Accounts payable and accrued expenses | 227 | (534) | 334 |
Advance billings and payments | (45) | (67) | (191) |
Other liabilities | $ (117) | $ (10) | (351) |
Reorganization adjustments: | |||
Non-cash reorganization income | (114,210) | ||
Net cash from operating activities | $ 21,013 | $ 18,122 | 18,650 |
Cash flows used in investing activities: | |||
Acquisition and construction of property and equipment | $ (6,612) | (6,015) | $ (6,229) |
Proceeds from sale of property and equipment | 58 | ||
Purchase of investment | (1) | ||
Purchase of Reliable Networks, net of cash acquired | (500) | ||
Net cash used in investing activities | $ (6,612) | (6,458) | $ (6,229) |
Cash flows used in financing activities: | |||
Principal repayment of long-term notes payable | (12,083) | $ (16,498) | (33,368) |
Loan origination costs | (516) | (1,653) | |
Net cash used in financing activities | (12,599) | $ (16,498) | (35,021) |
Net increase (decrease) in cash and cash equivalents | 1,802 | (4,834) | (22,600) |
Cash and cash equivalents, beginning of period | 5,082 | 9,916 | 32,516 |
Cash and cash equivalents, end of period | 6,884 | 5,082 | 9,916 |
Supplemental disclosures of cash flow information: | |||
Interest paid | 7,016 | 7,924 | 8,581 |
Income taxes paid | $ 2,414 | $ 1,535 | 248 |
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 | $ 1 | $ 29 |
Note 1 - Nature of Business
Note 1 - Nature of Business | 12 Months Ended |
Dec. 31, 2015 | |
Notes to Financial Statements | |
Nature of Operations [Text Block] | 1. Nature of Business Otelco Inc. (together with its consolidated subsidiaries, the “Company”) provides a broad range of telecommunication services on a retail and wholesale basis. These services include local and long distance calling; network access to and from the Company’s customers; data transport; digital high-speed and legacy dial-up internet access; cable, satellite and Internet Protocol television; other telephone related services; and cloud hosting and managed services. The principal markets for these services are business and residential customers residing in and adjacent to the exchanges the Company serves in Alabama, Massachusetts, Maine, Missouri, Vermont, and West Virginia. In addition, the Company serves business customers throughout Maine and New Hampshire and provides legacy dial-up internet service throughout the states of Maine and Missouri. The Company offers various communications services that are sold to economically similar customers in a comparable manner of distribution. The Company also offers cloud hosting and managed services for small and mid-sized companies who rely on mission-critical software applications. The majority of customers buy multiple services, often bundled together at a single price. The Company views, manages and evaluates the results of its operations from the various communications services as one company and therefore has identified one reporting segment as it relates to providing segment information. Reorganization On March 24, 2013, the Company and each of its then direct and indirect subsidiaries filed voluntary petitions for reorganization (the “Reorganization Cases”) under chapter 11 of title 11 of the United States Code in the United States Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”) in order to effectuate their prepackaged Chapter 11 plan of reorganization (the “Plan”). On May 6, 2013, the Bankruptcy Court entered an order confirming the Plan. On May 24, 2013 (the “Effective Date”), the Company substantially consummated its reorganization through a series of transactions contemplated by the Plan, and the Plan became effective pursuant to its terms. On August 22, 2013, the Bankruptcy Court issued a final decree closing the Reorganization Cases. When the Plan became effective, the $162.0 million of outstanding principal term loan obligations under the Company’s then outstanding credit facility (the “Credit Facility”) was reduced to $133.3 million through a cash payment of $28.7 million. Also in connection with the Plan, the maturity of the outstanding principal term loan obligations and any revolving loan obligations under the Credit Facility was extended to April 30, 2016 and the holders of the outstanding principal term loan obligations received their pro rata share of the Company’s new Class B common stock, which represented 7.5% of the Company’s total economic and voting interest immediately following the effectiveness of the Plan. Certain revolving loan commitments under the Credit Facility were also reinstated, with availability of up to $5.0 million. Under the Plan, the Company’s outstanding senior subordinated notes (“Notes”) were cancelled and the holders of outstanding Notes received their pro rata share of the Company’s new Class A common stock, which represented 92.5% of the Company’s total economic and voting interests immediately following the effectiveness of the Plan, and the outstanding shares of the Company’s old common stock were cancelled. As of the Effective Date, a total of 2,870,948 shares of the Company’s new Class A common stock and 232,780 shares of the Company’s new Class B common stock were issued and outstanding, and 232,780 shares of the Company’s new Class A common stock were reserved for the future issuance upon the conversion of the Company’s new Class B common stock. The Company’s emergence from bankruptcy did not qualify for fresh-start accounting in accordance with Accounting Standards Codification (“ASC”) 852, Reorganization .0% of the Company’s new Class A common stock was held by persons who also held the Company’s old common stock. |
Note 2 - Summary of Significant
Note 2 - Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2015 | |
Notes to Financial Statements | |
Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block] | 2. Summary of Significant Accounting Policies Basis of Presentation and Principles of Consolidation The consolidated financial statements include the accounts of the Company and its subsidiaries, all of which are either directly or indirectly wholly-owned. These include: Otelco Telecommunications LLC; Otelco Telephone LLC (“OTP”); Hopper Telecommunications LLC; Brindlee Mountain Telephone LLC; Blountsville Telephone LLC (“BTC”); Otelco Mid-Missouri LLC (“MMT”) and its wholly owned subsidiary I-Land Internet Services LLC; Mid-Maine Telecom LLC; Mid-Maine TelPlus LLC; Granby Telephone LLC; War Telephone LLC; Pine Tree Telephone LLC; Saco River Telephone LLC; Shoreham Telephone LLC; and CRC Communications LLC (“CRC”). The accompanying consolidated financial statements include the accounts of the Company and all of the aforesaid subsidiaries after elimination of all material intercompany balances and transactions. Use of Estimates The Company prepares its consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”), which require management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and disclosure of contingent assets and liabilities. The estimates and assumptions used in the accompanying consolidated financial statements are based upon management’s evaluation of the relevant facts and circumstances as of the date of the financial statements. Actual results may differ from the estimates and assumptions used in preparing the accompanying consolidated financial statements. Significant accounting estimates include the recoverability of goodwill, identified intangibles, long-term assets, deferred tax valuation allowances and allowance for bad debt. Regulatory Accounting The Company follows the accounting for regulated enterprises, which is now part of ASC 980, Regulated Operations and 76.5%, respectively, of the Company’s net property, plant and equipment was accounted for under ASC 980. The Company is subject to reviews and audits by regulatory agencies. The effect of these reviews and audits, if any, will be recorded in the period in which they first become known and determinable. Intangible Assets and Goodwill Intangible assets consist primarily of the fair values of customer related intangibles, non-compete agreements and long-term customer contracts acquired in connection with business combinations. Goodwill represents the excess of total acquisition cost over the assigned value of net identifiable tangible and intangible assets acquired through various business combinations, less any impairment. Due to the regulatory accounting required by ASC 980, the Company did not record acquired regulated telecommunications property and equipment at fair value as required by ASC 805, Business Combinations The Company performs a quarterly review of its identified intangible assets to determine if facts and circumstances exist which indicate that the useful life is shorter than originally estimated or that the carrying amount of assets may not be recoverable. If such facts and circumstances do exist, the Company assesses the recoverability of identified intangible assets by comparing the projected undiscounted net cash flows associated with the related asset or group of assets over their remaining lives against their respective carrying amounts. Impairment, if any, is based on the excess of the carrying amount over the fair value of those assets. Revenue Recognition Local services . Local services revenue for monthly recurring local services is billed in advance to a portion of the Company’s customers and in arrears to the balance of the customers. The Company records revenue for charges that have not yet been invoiced to its customers as unbilled revenue when services are rendered. The Company records revenue billed in advance as advance billings and defers recognition until such revenue is earned. Long distance service is billed to customers in arrears based on actual usage except when it is included in service bundles. The Company records unbilled long distance revenue as unbilled revenue when services are rendered. In bundles, unlimited usage is billed in arrears at a flat rate. Network access Revenue for intrastate access service is received through tariffed access charges billed by the Company to the originating intrastate carrier using access rates filed with the Alabama Public Service Commission (“APSC”), the Maine Public Utilities Commission (“MPUC”), the Massachusetts Department of Telecommunications and Cable (“MDTC”), the Missouri Public Service Commission (“MPSC”), the New Hampshire Public Utilities Commission (“NHPUC”), the Vermont Public Service Board (“VPSB”) and the West Virginia Public Service Commission (“WVPSC”) and are retained by the Company. Revenue for the intrastate/interLATA access service is received through tariffed access charges as filed with the APSC, MDTC, MPSC, MPUC, NHPUC, VPSB and WVPSC. These access charges are billed to the intrastate carriers and are retained by the Company. Revenue for terminating and originating long distance service is received through charges for providing usage of the local exchange network. Toll revenues are recognized when services are rendered. The FCC’s Intercarrier Compensation order, issued in October 2011, has significantly changed the way telecommunication carriers receive compensation for exchanging traffic and state tariffed rates. All terminating intrastate rates that exceeded the interstate rate were reduced to the terminating interstate rate effective July 2014. Beginning in 2014, the interstate and intrastate rates will be reduced over three years to “bill and keep” in which carriers bill their customers for services and keep those charges but neither pay for nor receive compensation from traffic sent to or received from other carriers. In addition, subsidies to carriers serving high cost areas will be phased out over an extended period. Revenues for interstate access services are based on reimbursement of costs and an allowed rate of return. Revenues of this nature are received from the NECA in the form of monthly settlements. Such revenues amounted to 13.1%, 15.5%, and 17.4% of the Company’s total revenues for the years ended December 31, 2013, 2014, and 2015, respectively. Internet, tran sport service, cable and satellite television and cloud hosting and managed services Cash and Cash Equivalents Cash equivalents are stated at cost plus accrued interest, which approximates fair value. Cash equivalents are high-quality, short-term money market instruments and highly liquid debt instruments with an original maturity of three months or less when purchased. The cash equivalents are readily convertible to known amounts of cash and are so near maturity that they present insignificant risk of changes in value because of changes in interest rates. Accounts Receivable The Company extends credit to its business and residential customers based upon a written credit policy. Service interruption is the primary vehicle for controlling losses. Accounts receivable are recorded at the invoiced amount and do not bear interest. The allowance for doubtful accounts is the Company’s best estimate for the amount of probable credit losses in the Company’s existing accounts receivable. The Company establishes an allowance for doubtful accounts based upon factors surrounding the credit risk of specific customers, historical trends, and other information. Receivable balances are reviewed on an aged basis and account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. Materials and Supplies Materials and supplies are stated at the lower of cost or market value. Cost is determined using an average cost basis. Property and Equipment Regulated property and equipment is stated at original cost less any impairment. Unregulated property and equipment purchased through acquisitions is stated at its fair value at the date of acquisition less any impairment. Expenditures for improvements that significantly add to productive capacity or extend the useful life of an asset are capitalized. Expenditures for maintenance and repairs are expensed when incurred. Depreciation of regulated property and equipment is computed principally using the straight-line method over useful lives determined by the APSC, MDTC, MPSC, MPUC, NHPUC, VPSB and WVPSC as discussed above. Depreciation of unregulated property and equipment primarily employs the straight-line method over industry standard estimated useful lives. Long-Lived Assets The Company reviews its long-lived assets for impairment at each balance sheet date and whenever events or changes in circumstances indicate that the carrying amount of an asset should be assessed. To determine if impairment exists, the Company estimates the future undiscounted cash flows expected to result from the use of the asset being reviewed for impairment. If the sum of these expected future cash flows is less than the carrying amount of the asset, the Company recognizes an impairment loss in accordance with guidance included in ASC 360, Property, Plant, and Equipment Deferred Financing Costs Deferred financing and loan costs consist of debt issuance costs incurred in obtaining long-term financing, which are amortized using the effective interest method. Amortization of deferred financing and loan costs is classified as “Interest expense”. When amendments to debt agreements are considered to extinguish existing debt per guidance included in ASC 470, Debt Income Taxes The Company accounts for income taxes using the asset and liability approach in accordance with guidance included in ASC 740, Income Taxes The provision for income taxes consists of an amount for the taxes currently payable and a provision for the tax consequences deferred to future periods. Interest and penalties related to income tax matters would be recognized in income tax expense. As of December 31, 2015, there was no amount recorded for interest and penalties. The Company conducts business in multiple jurisdictions and, as a result, one or more subsidiaries file income tax returns in the U.S. federal, various state and local jurisdictions. All tax years since 2012 are open for examination by various tax authorities. Fair Value of Financial Instruments The carrying values of the Company’s financial instruments, including cash and cash equivalents, accounts receivable, prepaids, accounts payable and accrued liabilities, approximate their fair values as of December 31, 2014 and 2015 due to their short term nature. The fair value of debt instruments at December 31, 2014 and 2015 is disclosed in the notes to the consolidated financial statements. Income per Common Share The Company computes net income per common share in accordance with the provisions included in ASC 260, Earnings per Share Recently Adopted Accounting Pronouncements During 2014, the FASB issued Accounting Standards Updates (“ASUs”) 2014-01 through 2014-18. Except for ASU 2014-09, ASU 2014-12 and ASU 2014-15, which are discussed below, these ASUs provide technical corrections or simplification to existing guidance and to specialized industries or entities and therefore have minimal, if any, impact on the Company. In June 2014, the FASB issued ASU 2014-12, Compensation-Stock Compensation (Topic 718): Account ing for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period Recent Accounting Pronouncements In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) . In July 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date. In August 2014, the FASB issued ASU 2014-15, Presentation of Financial Statements – Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016, with early adoption permitted. The implementation of this ASU is not expected to have a material impact on the Company’s consolidated financial position or results of operations. In April 2015, the FASB issued ASU 2015-03, Interest–Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs. In April 2015, the FASB issued ASU 2015-05 , Intangibles–Goodwill and Other–Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement . This ASU provides guidance regarding whether a cloud computing arrangement includes a software license. If a cloud computing arrangement includes a software license, then the entity should account for the software license element of the arrangement consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, the entity should account for the arrangement as a service contract. The guidance will not change U.S. GAAP for an entity’s accounting for service contracts. This pronouncement is effective for fiscal years, including interim periods within those fiscal years, beginning after December 15, 2015. The Company assessed the implementation of this ASU is not expected to have a material impact on its consolidated financial statements. In July 2015, the FASB issued ASU 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory In November 2015, the FASB issued ASU 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes . This ASU provides guidance that simplifies the presentation of deferred income taxes. This ASU requires that deferred tax liabilities and assets be classified as noncurrent in a classified statement of financial position. This guidance is effective for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods. The implementation of this ASU is not expected to have a material impact on the Company’s consolidated financial position or results of operations. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) . Reclassifications Certain items in prior years’ consolidated financial statements have been reclassified to conform with 2015 presentation. |
Note 3 - Impairments
Note 3 - Impairments | 12 Months Ended |
Dec. 31, 2015 | |
Notes to Financial Statements | |
Asset Impairment Charges [Text Block] | 3. Impairments ASC 350, Intangibles – Goodwill and Other During the impairment review as of October 1, 2013, the Company determined there was no impairment and there is no change in the carrying amount of goodwill for the year ended December 31, 2013. The Company also found no impairment in the other intangible assets and the only change in the carrying amount for the year ended December 31, 2013 is due to the amortization for the current year. During the impairment review as of October 1, 2014, the Company determined there was no impairment. The only change in the carrying amount of goodwill for the year ended December 31, 2014 is due to the purchase of substantially all the assets of Reliable Networks of Maine, LLC (“Reliable Networks”) during the year (see note 9, Acquisition During the impairment review as of October 1, 2015, the Company determined there was no impairment and there is no change in the carrying amount of goodwill for the year ended December 31, 2015. The Company also found no impairment in the other intangible assets and the only change in the carrying amount for the year ended December 31, 2015 is due to the amortization for the current year. |
Note 4 - Goodwill and Intangibl
Note 4 - Goodwill and Intangible Assets | 12 Months Ended |
Dec. 31, 2015 | |
Notes to Financial Statements | |
Goodwill and Intangible Assets Disclosure [Text Block] | 4. Goodwill and Intangible Assets ASC 350 requires that goodwill be tested for impairment annually, unless potential interim indicators exist that could result in impairment. Although the Company has only one reporting segment, it considers its three territories (Alabama, Missouri, and New England) to be reporting units for purposes of goodwill impairment testing. As of December 31, 2015, goodwill for Alabama, Missouri, and New England represented 87.2%, 12.8%, and less than 1 .0%, respectively, of total goodwill for the Company. The Company performed its annual goodwill impairment testing as of October 1, 2015 and concluded that no impairment was present in any of its reporting units. The Company determined that no events or circumstances from October 1, 2015 through December 31, 2015 indicated that a further assessment was necessary. There was no change in the carrying amounts of goodwill for Alabama and Missouri during 2015, with a balance of $39,199 thousand and $5,758 thousand, respectively as of both December 31, 2014 and 2015. During 2014, the carrying amount of goodwill for New England increased by $19 thousand, due to the purchase of substantially all of the assets of Reliable Networks, to a balance of $44,976 thousand as of December 31, 2014. There was no change in the carrying amount of goodwill for New England during 2015. Intangible assets are summarized as follows (in thousands): December 31, 2013 Carrying Value Accumulated Amortization Net Book Value Customer relationships $ 23,701 $ (19,632 ) $ 4,069 Contract relationships 19,600 (19,600 ) - Non-competition 83 (83 ) - Trade name 9 (4 ) 5 Total $ 43,393 $ (39,319 ) $ 4,074 December 31, 2014 Carrying Value Accumulated Amortization Net Book Value Customer relationships $ 24,025 $ (20,880 ) $ 3,145 Contract relationships 19,600 (19,600 ) - Non-competition 107 (89 ) 18 Trade name 23 (8 ) 15 Total $ 43,755 $ (40,577 ) $ 3,178 December 31, 2015 Carrying Value Accumulated Amortization Net Book Value Customer relationships $ 24,025 $ (21,685 ) $ 2,340 Contract relationships 19,600 (19,600 ) - Non-competition 107 (95 ) 12 Trade name 23 (12 ) 11 Total $ 43,755 $ (41,392 ) $ 2,363 These intangible assets had a range of 2 to 15 years of useful lives at inception and utilize both the sum-of-the-years’ digits and straight-line methods of amortization, as appropriate. The following tables present historical and expected amortization expense of the existing intangible assets as of December 31, 2015 for each of the following periods (in thousands): 2013 $ 2,597 2014 $ 1,258 2015 $ 815 Expected amortization expense for the years ending December 31, 2016 $ 578 2017 458 2018 408 2019 389 2020 372 Thereafter 158 Total $ 2,363 |
Note 5 - Property and Equipment
Note 5 - Property and Equipment | 12 Months Ended |
Dec. 31, 2015 | |
Notes to Financial Statements | |
Property, Plant and Equipment Disclosure [Text Block] | 5. Property and Equipment A summary of property and equipment is shown as follows (in thousands, except estimated life): Estimated December 31, Life 2014 2015 Land $ 1,164 $ 1,164 Building and improvements 20 - 40 12,528 12,723 Telephone equipment 6 - 20 230,100 233,099 Cable television equipment 7 11,945 12,129 Furniture and equipment 8 - 14 3,036 3,045 Vehicles 7 - 9 6,343 6,516 Computer software equipment 5 - 7 15,984 16,251 Internet equipment 5 3,829 3,797 Total property and equipment 284,929 288,724 Accumulated depreciation and amortization (233,692 ) (238,913 ) Net property and equipment $ 51,237 $ 49,811 Depreciation expense for the years ended December 31, 2013, 2014 and 2015 was $9,650 thousand, $8,941 thousand and $7,678 thousand, respectively. Amortization expense for telephone plant adjustment was $384 thousand, $385 thousand and $385 thousand for the years ended December 31, 2013, 2014 and 2015, respectively. |
Note 6 - Other Accounts Receiva
Note 6 - Other Accounts Receivables | 12 Months Ended |
Dec. 31, 2015 | |
Notes to Financial Statements | |
Financing Receivables [Text Block] | 6. Other Accounts Receivable Other accounts receivable consist of the following (in thousands) as of: December 31, 2014 2015 Carrier access bills receivable $ 714 $ 570 NECA receivable 1,078 1,030 Receivables from Alabama Service Fund 63 59 Other miscellaneous 76 63 $ 1,931 $ 1,722 |
Note 7 - Investments
Note 7 - Investments | 12 Months Ended |
Dec. 31, 2015 | |
Notes to Financial Statements | |
Investment [Text Block] | 7. Investments Investments consist of the following (in thousands) as of: December 31, 2014 2015 Investment in CoBank stock $ 1,475 $ 1,475 Rental property 321 296 Other miscellaneous 74 75 $ 1,870 $ 1,846 The investment in CoBank stock is carried at historical cost due to no readily determinable fair value for those instruments being available. Management believes there has been no other than temporary impairment in such investment. This investment consists of patronage certificates that represent ownership in the financial institution where the Company has, and in the past had, debt. These certificates yield dividends on an annual basis, and the investment is redeemed ratably subsequent to the repayment of the debt. |
Note 8 - Notes Payable
Note 8 - Notes Payable | 12 Months Ended |
Dec. 31, 2015 | |
Notes to Financial Statements | |
Debt Disclosure [Text Block] | 8. Notes Payable Notes payable consists of the following (in thousands, except percentages) as of: December 31, 2014 2015 Third amended and restated term credit facility; Antares Capital (formerly General Electric Capital Corporation); variable interest rate of 6.5% at December 31, 2014 and December 31, 2015. The Credit Facility was secured by the total assets of the subsidiary guarantors. The unpaid balance is due April 30, 2016. $ 112,135 $ 100,052 Less: current portion (6,665 ) (3,000 ) Long-term notes payable $ 105,470 $ 97,052 Associated with these notes payable, the Company has capitalized and amortized deferred financing cost using the effective interest method. The Company has capitalized $2.7 million in deferred financing cost associated with the Credit Facility. Amortization expense for the deferred financing cost associated with the third amendment and restatement of the Credit Facility was $936 thousand and $880 thousand for the years ended December 31, 2014 and 2015, respectively. The Company had revolving credit facilities on December 31, 2014 and 2015 of $5.0 million, with commitments until April 30, 2016. There was no balance outstanding as of December 31, 2014 or 2015. The Company paid a commitment fee of 0.50% per annum, payable quarterly in arrears, on the unused portion of the revolver loan under the Credit Facility. The commitment fee expense was $25 thousand for the years ended December 31, 2014 and 2015, respectively. The Company’s notes payable agreements are subject to certain financial covenants and restrictions on indebtedness, financial guarantees, business combinations and other related items. As of December 31, 2015, the Company was in compliance with all such covenants and restrictions. On February 17, 2016, the Company paid all amounts due, including principal, interest and fees, and satisfied in full all of its obligations under the Credit Facility. See note 17, Subsequent Events |
Note 9 - Acquisition
Note 9 - Acquisition | 12 Months Ended |
Dec. 31, 2015 | |
Notes to Financial Statements | |
Mergers, Acquisitions and Dispositions Disclosures [Text Block] | 9. Acquisition On January 2, 2014, the Company’s wholly-owned subsidiary, CRC, acquired substantially all of the assets of Reliable Networks, a Portland, Maine-based provider of cloud hosting and managed services for small and mid-sized companies who rely on mission-critical software applications. CRC paid $0.5 million net of cash acquired at the closing of the acquisition. The balance of the purchase price will be paid in Class A common stock over a three-year period , contingent on Reliable Networks achieving certain financial objectives and certain other conditions being satisfied. The results of operations from Reliable Networks are included in the Company’s consolidated results of operations beginning January 2, 2014. |
Note 10 - Income Tax
Note 10 - Income Tax | 12 Months Ended |
Dec. 31, 2015 | |
Notes to Financial Statements | |
Income Tax Disclosure [Text Block] | 10. Income Tax Income tax expense for the years ended December 31, 2013, 2014 and 2015 is summarized below (in thousands): For the Years Ended December 31, 2013 2014 2015 Federal income taxes Current $ 210 $ 230 $ 2,552 Deferred 5,528 2,380 1,661 Total federal tax expense 5,738 2,610 4,213 State income taxes Current – 14 366 Deferred 629 561 365 Total state tax expense 629 575 731 Total income tax expense $ 6,367 $ 3,185 $ 4,944 The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities as of December 31, 2014 and 2015 are presented below (in thousands): December 31, 2014 2015 Deferred tax liabilities: Amortization $ (14,871 ) $ (16,107 ) Depreciation (10,358 ) (10,541 ) Prepaid expense (600 ) (415 ) State net operating loss carryforwards and adjustments – (49 ) Other (14 ) (13 ) Total deferred tax liabilities $ (25,843 ) $ (27,125 ) Deferred tax assets: Amortized intangibles $ 502 $ – State net operating loss carryforwards and adjustments 27 – Deferred compensation 297 234 Advance payments 286 266 Bad debt 100 169 Other 551 350 Total net deferred tax assets $ 1,763 $ 1,019 As of December 31, 2015, the Company had U.S. federal and state net operating loss carryforwards of $0 and $68 thousand, respectively. As of December 31, 2014, the Company had no U.S. federal or state net operating loss carryforwards. The Company had no alternative minimum tax credit carryforwards as of December 31, 2014 or December 31, 2015. The Company establishes valuation allowances when necessary to reduce deferred tax assets to amounts expected to be realized. As of December 31, 2015, the Company had no valuation allowance recorded. The effective income tax rates as of December 31, 2014 and December 31, 2015 were 38.8% and 39.8%, respectively. ASC 740 prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. For each year ended December 31, 2013, 2014 and 2015, the Company did not identify any material uncertain tax positions. Tax years from 2012 forward remain open for audit. Total income tax expense was different than that computed by applying U.S. federal income tax rates to income before income taxes for the years ended December 31, 2013, 2014 and 2015. The reasons for the differences are presented below (in thousands, except percentages): For the Years Ended December 31, 2013 2014 2015 Federal income tax at statutory rate 35 % 35 % 35 % Federal income tax provision at statutory rate $ 40,428 $ 2,875 $ 4,349 State income tax provision, net of federal income tax effects 408 339 475 Cancellation of debt (non-taxable) (37,681 ) – – Restructuring expense 1,974 – – Valuation allowance 1,288 – – Other (50 ) (29 ) 120 Provision for income taxes $ 6,367 $ 3,185 $ 4,944 Effective income tax rate 5.5 % 38.8 % 39.8 % |
Note 11 - Employee Benefit Prog
Note 11 - Employee Benefit Program | 12 Months Ended |
Dec. 31, 2015 | |
Notes to Financial Statements | |
Pension and Other Postretirement Benefits Disclosure [Text Block] | 11. Employee Benefit Program Employees of all subsidiaries except BTC participate in a Company-sponsored defined contribution savings plan under Section 401(k) of the Internal Revenue Code. The terms of the plan provide for an elective contribution from employees not to exceed $17.5 thousand for each of 2013, 2014 and 2015. During 2013, the Company matched the employee’s contribution up to 6 .0% of the employee’s annual compensation. The Company matched the employee’s contribution up to 4.5% of the employee’s annual compensation during 2014 and 2015. For the years ended December 31, 2013, 2014, and 2015, the total contributions and expense associated with this plan was $670 thousand, $494 thousand and $520 thousand, respectively. The employees of BTC participate in a multiemployer Retirement and Security Program (“RSP”) as a defined benefit plan and a Savings Plan (“SP”) provided through the National Telecommunications Cooperative Association (“NTCA”). The risks associated with participating in a multiemployer plan are different from a single-employer plan. Contributions to the multiemployer plan by the Company may be used to provide benefits to employees of other participating employers. If a participating employer stops contributing to the plan, the unfunded obligations of the plan may be borne by the remaining participating employers. Participation in the RSP requires a minimum employee contribution of 1 .0% of their annual compensation. For each of 2013, 2014 and 2015, the Company contributed 6 .0%, 4.5% and 4.5%, respectively, of their annual compensation for every participating employee. SP is a defined contribution savings plan under Section 401(k) of the Internal Revenue Code to which the Company made no contribution for 2013, 2014 or 2015. The employee can make voluntary contributions to the SP as desired. For the years ended December 31, 2013, 2014 and 2015, the total expense associated with these plans was $30 thousand, $15 thousand and $15 thousand, respectively. |
Note 12 - Net Income Per Common
Note 12 - Net Income Per Common Share | 12 Months Ended |
Dec. 31, 2015 | |
Notes to Financial Statements | |
Earnings Per Share [Text Block] | 12. Net Income per Common Share Basic net income per common share is computed by dividing net income by the weighted-average number of common shares outstanding for the period. Diluted net income per common share reflects the potential dilution that would occur should all of the shares of Class A common stock underlying restricted stock units (“RSUs”), as well as all of the shares of Class A common stock, for which the Company has accrued an expense, that may be delivered pursuant to the purchase agreement relating to the assets of Reliable Networks, be issued. A reconciliation of the common shares for the Company’s basic and diluted net income per common share calculation is as follows (weighted average number of common shares outstanding in whole numbers and net income in thousands): For the Years Ended December 31, 2013 2014 2015 Weighted average number of common shares outstanding - basic 2,921,208 3,103,728 3,239,306 Effect of dilutive securities — 64,433 74,335 Weighted average number of common shares and potential common shares - diluted 2,921,208 3,168,161 3,313,641 Net income $ 109,144 $ 5,029 $ 7,484 Net income per common share - basic $ 37.36 $ 1.62 $ 2.31 Net income per common share - diluted $ 37.36 $ 1.59 $ 2.26 |
Note 13 - Fair Value Measuremen
Note 13 - Fair Value Measurement | 12 Months Ended |
Dec. 31, 2015 | |
Notes to Financial Statements | |
Fair Value Disclosures [Text Block] | 13. Fair Value Measurement The Company adopted ASC 820, Fair Value Measurements and Disclosures ASC 820 defines fair value as the exit price, which is the price that would be received to sell an asset or paid to transfer a liability in a transaction between market participants at the measurement date. ASC 820 establishes a three-tier value hierarchy that prioritizes inputs to valuation techniques used for fair value measurement. ● Level 1 consists of observable market data in an active market for identical assets or liabilities. ● Level 2 consists of observable market data, other than that included in Level 1, that is either directly or indirectly observable. ● Level 3 consists of unobservable market data. The input may reflect the assumptions of the Company, not a market participant, if there is little available market data and the Company’s own assumptions are considered by management to be the best available information. Fair Value Notes Payable The fair value of the Company’s notes payable is determined using various methods, including quoted market prices for notes with similar terms of maturity, which is a Level 2 measurement, and discounted cash flows, which is a Level 3 measurement. The carrying amounts and estimated fair values of notes payable at December 31, 2014 and 2015 are as follows (in thousands): Carrying Value Fair Value Notes Payable December 31, 2014 $ 112,135 $ 120,580 Notes Payable December 31, 2015 $ 100,052 $ 102,076 |
Note 14 - Commitments and Conti
Note 14 - Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2015 | |
Notes to Financial Statements | |
Commitments and Contingencies Disclosure [Text Block] | 14. Commitments and Contingencies From time to time, the Company may be involved in various claims, legal actions and regulatory proceedings incidental to and in the ordinary course of business, including administrative hearings of the APSC, the MPUC, the MDTC, the MPSC, the NHPUC, the VPSB and the WVPSC, relating primarily to rate making. In addition, the Company may be involved in similar proceedings with interconnection carriers and the FCC. Currently, except as set forth below, none of the Company’s legal proceedings are expected to have a material adverse effect on the Company’s business. Sprint Communications L.P. (“Sprint”), MCI Communications Services, Inc. (“MCI”) and Verizon Select Services, Inc. (“Verizon”) have filed more than 60 lawsuits in federal courts across the United States alleging that over 400 local exchange carriers (“LECs” or “LEC Defendants”) overcharged Sprint, MCI and Verizon for so-called intraMTA traffic (wireless phone calls that originate and terminate in the same metropolitan transit area). The lawsuits seek a refund of previously-paid access charges for intraMTA traffic, as well as a discount related to intraMTA traffic on a going-forward basis. One of the Company’s subsidiaries, MMT, was named as a defendant in two of the lawsuits that are being brought before the District Court for the Western District of Missouri (one filed on May 2, 2014 by Sprint and the other filed on September 5, 2014 by MCI and Verizon). In addition, one of the Company’s other subsidiaries, OTP, was named as a defendant in a lawsuit relating to these issues filed by MCI and Verizon in the District Court for the District of Delaware on September 5, 2014. As all of the lawsuits relating to these issues raise the same fundamental questions of law, the United States Judicial Panel on Multidistrict Litigation has consolidated the lawsuits in the District Court for the Northern District of Texas (the “Court”) for all pre-trial proceedings. On September 18, 2015, the Court held an oral argument on the LEC Defendants’ Motions to dismiss all of the pending proceedings. On November 17, 2015, the Court issued a memorandum opinion and order dismissing the federal-law claims with prejudice, dismissing the state-law claims but granting leave to replead said claims, and denying the Defendants’ request to refer the matter to the FCC. At this time, it is too soon to determine whether these lawsuits will have a material adverse effect on the Company’s business. On November 10, 2014, a large coalition of the LEC Defendants, including MMT and OTP, filed a petition for declaratory ruling with the FCC seeking a ruling by the FCC that: (1) any traffic intentionally routed over Interexchange carrier (“IXC”) trunks by IXCs should be subject to access charges; (2) only carriers with specific agreements with a LEC may use alternative billing arrangements; (3) federal tariffing rules require the LECs to assess access charges for switched access traffic routed through Feature Group D trunks; and (4) the IXCs may not engage in self-help by refusing to pay the LEC Defendants’ properly assessed access charges. On March 11, 2015, the LEC Defendants filed their reply brief with the FCC. No timeline has been established for a decision by the FCC. Leases Minimum future rental commitments under non-cancellable operating leases, primarily for real property and office facilities , at December 31, 2015 consist of the following (in thousands): 2016 $ 481 2017 327 2018 230 2019 102 2020 85 Thereafter 141 Total $ 1,366 Rent expense for the years ended December 31, 2013, 2014 and 2015 was $653 thousand, $616 thousand and $582 thousand, respectively. |
Note 15 - Stock Plans and Stock
Note 15 - Stock Plans and Stock Associated with Acquisition | 12 Months Ended |
Dec. 31, 2015 | |
Notes to Financial Statements | |
Shareholders' Equity and Share-based Payments [Text Block] | 15. Stock Plans and Stock Associated with Acquisition The Company granted RSUs underlying 124,167 shares of Class A common stock on July 9, 2014 and 10,206 RSUs vested on December 31, 2014. During the year ended December 31, 2015, the Company granted RSUs underlying 122,534 shares of Class A common stock. These RSUs (or a portion thereof) vest with respect to each recipient over a one to three year period from the date of grant, provided the recipient remains in the employment or service of the Company as of the vesting date and, in selected instances, certain performance criteria are attained. Additionally, these RSUs (or a portion thereof) could vest earlier in the event of a change in control of the Company, or upon involuntary termination without cause. These grants are made primarily to executive-level personnel at the Company and, as a result, no compensation costs have been capitalized. The following table summarizes RSU activity as of December 31, 2015: RSUs Weighted Average Grant Date Fair Value Outstanding at December 31, 2014 113,961 $ 4.96 Granted 122,534 $ 4.71 Vested (65,712 ) $ 4.96 Forfeited or cancelled (15,022 ) $ 4.96 Outstanding at December 31, 2015 155,761 $ 4.78 CRC acquired substantially all of the assets of Reliable Networks on January 2, 2014. See note 9, Acquisition Stock-based compensation expense related to RSUs and the Earn-Out was $643 thousand and $362 thousand for the years ended December 31, 2014 and 2015, respectively. Accounting standards require that the Company estimate forfeitures for RSUs and the Earn-Out and reduce compensation expense accordingly. The Company has reduced its expense by the assumed forfeiture rate and will evaluate actual experience against the assumed forfeiture rate going forward. The forfeiture rate has been developed using historical performance metrics which could impact the size of the final issuance of Class A common stock. The Company has no history before 2014 with RSU forfeiture or Earn-Out stock forfeiture. As of December 31, 2014 and 2015, the unrecognized total compensation cost related to unvested RSUs was $286 thousand and $470 thousand, respectively. That cost is expected to be recognized by the end of 2018. As stated above, accounting standards require the Company to estimate forfeitures in calculating the expense related to stock-based compensation, as opposed to only recognizing these forfeitures and the corresponding reduction in expense as they occur. The tax benefit recognized with respect to RSUs and the Earn-Out during the years ended December 31, 2014 and 2015 was $249 thousand and $144 thousand, respectively. |
Note 16 - Selected Quarterly Fi
Note 16 - Selected Quarterly Financial Data (Unaudited) | 12 Months Ended |
Dec. 31, 2015 | |
Notes to Financial Statements | |
Quarterly Financial Information [Text Block] | 16. Selected Quarterly Financial Data (unaudited and in thousands, except per share amounts) First Quarter Second Quarter Third Quarter Fourth Quarter Fiscal 2014: Revenue $ 18,783 $ 18,488 $ 18,421 $ 18,178 Operating income $ 3,973 $ 4,438 $ 4,625 $ 3,822 Net income $ 1,394 $ 1,308 $ 1,387 $ 940 Net income per common share-basic $ 0.45 $ 0.42 $ 0.45 $ 0.30 Net income per common share-diluted $ 0.45 $ 0.42 $ 0.44 $ 0.29 Fiscal 2015: Revenue $ 17,643 $ 17,892 $ 17,850 $ 17,717 Operating income $ 4,508 $ 4,765 $ 4,910 $ 5,072 Net income $ 2,135 $ 1,655 $ 1,850 $ 1,844 Net income per common share-basic $ 0.66 $ 0.51 $ 0.57 $ 0.57 Net income per common share-diluted $ 0.65 $ 0.50 $ 0.56 $ 0.54 |
Note 17 - Subsequent Events
Note 17 - Subsequent Events | 12 Months Ended |
Dec. 31, 2015 | |
Notes to Financial Statements | |
Subsequent Events [Text Block] | 17. Subsequent Events On January 25, 2016, the Company entered into a new senior loan agreement (the “Senior Loan Agreement”), providing for a five year term loan facility in the aggregate principal amount of $85.0 million and a five year $5.0 million revolving credit facility, and a new subordinated loan agreement (the “Subordinated Loan Agreement”), providing for a five and a half year term loan facility in the aggregate principal amount of $15.0 million. On February 17, 2016, the Subordinated Loan Agreement was amended to increase the aggregate principal amount available for borrowing thereunder to $15.3 million, and the Company borrowed $85.0 million under the term loan facility of the Senior Loan Agreement and $15.3 million under the Subordinated Loan Agreement. The Company used the borrowings under the Senior Loan Agreement and the Subordinated Loan Agreement to, among other things, pay all amounts due, including principal, interest and fees, and satisfy in full all of its obligations under the Credit Facility, which was scheduled to mature on April 30, 2016. As a result of the repayment of the Credit Facility, all of the Company’s Class B shares were converted to Class A shares. The term loan facility under the Senior Loan Agreement requires principal payments of $1.0 million quarterly, beginning on April 1, 2016. Principal amounts outstanding under the Subordinated Loan Agreement will generally not be due until maturity. The Company’s consolidated balance sheet as of December 31, 2015 has been adjusted to reflect the $3.0 million in principal payments that will be due under the Senior Loan Agreement over the succeeding twelve months as current maturity of long-term notes payable and the balance of the existing debt of $98.1 million as of December 31, 2015 as long-term notes payable. The Company expects to record costs and loss on extinguishment of debt totaling approximately $211 thousand in connection with this refinancing. |
Significant Accounting Policies
Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
Accounting Policies [Abstract] | |
Basis of Accounting, Policy [Policy Text Block] | Basis of Presentation and Principles of Consolidation The consolidated financial statements include the accounts of the Company and its subsidiaries, all of which are either directly or indirectly wholly-owned. These include: Otelco Telecommunications LLC; Otelco Telephone LLC (“OTP”); Hopper Telecommunications LLC; Brindlee Mountain Telephone LLC; Blountsville Telephone LLC (“BTC”); Otelco Mid-Missouri LLC (“MMT”) and its wholly owned subsidiary I-Land Internet Services LLC; Mid-Maine Telecom LLC; Mid-Maine TelPlus LLC; Granby Telephone LLC; War Telephone LLC; Pine Tree Telephone LLC; Saco River Telephone LLC; Shoreham Telephone LLC; and CRC Communications LLC (“CRC”). The accompanying consolidated financial statements include the accounts of the Company and all of the aforesaid subsidiaries after elimination of all material intercompany balances and transactions. |
Use of Estimates, Policy [Policy Text Block] | Use of Estimates The Company prepares its consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”), which require management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and disclosure of contingent assets and liabilities. The estimates and assumptions used in the accompanying consolidated financial statements are based upon management’s evaluation of the relevant facts and circumstances as of the date of the financial statements. Actual results may differ from the estimates and assumptions used in preparing the accompanying consolidated financial statements. Significant accounting estimates include the recoverability of goodwill, identified intangibles, long-term assets, deferred tax valuation allowances and allowance for bad debt. |
Intercompany Profit to Regulated Affiliates, Policy [Policy Text Block] | Regulatory Accounting The Company follows the accounting for regulated enterprises, which is now part of ASC 980, Regulated Operations and 76.5%, respectively, of the Company’s net property, plant and equipment was accounted for under ASC 980. The Company is subject to reviews and audits by regulatory agencies. The effect of these reviews and audits, if any, will be recorded in the period in which they first become known and determinable. |
Goodwill and Intangible Assets, Policy [Policy Text Block] | Intangible Assets and Goodwill Intangible assets consist primarily of the fair values of customer related intangibles, non-compete agreements and long-term customer contracts acquired in connection with business combinations. Goodwill represents the excess of total acquisition cost over the assigned value of net identifiable tangible and intangible assets acquired through various business combinations, less any impairment. Due to the regulatory accounting required by ASC 980, the Company did not record acquired regulated telecommunications property and equipment at fair value as required by ASC 805, Business Combinations The Company performs a quarterly review of its identified intangible assets to determine if facts and circumstances exist which indicate that the useful life is shorter than originally estimated or that the carrying amount of assets may not be recoverable. If such facts and circumstances do exist, the Company assesses the recoverability of identified intangible assets by comparing the projected undiscounted net cash flows associated with the related asset or group of assets over their remaining lives against their respective carrying amounts. Impairment, if any, is based on the excess of the carrying amount over the fair value of those assets. |
Revenue Recognition, Policy [Policy Text Block] | Revenue Recognition Local services . Local services revenue for monthly recurring local services is billed in advance to a portion of the Company’s customers and in arrears to the balance of the customers. The Company records revenue for charges that have not yet been invoiced to its customers as unbilled revenue when services are rendered. The Company records revenue billed in advance as advance billings and defers recognition until such revenue is earned. Long distance service is billed to customers in arrears based on actual usage except when it is included in service bundles. The Company records unbilled long distance revenue as unbilled revenue when services are rendered. In bundles, unlimited usage is billed in arrears at a flat rate. Network access Revenue for intrastate access service is received through tariffed access charges billed by the Company to the originating intrastate carrier using access rates filed with the Alabama Public Service Commission (“APSC”), the Maine Public Utilities Commission (“MPUC”), the Massachusetts Department of Telecommunications and Cable (“MDTC”), the Missouri Public Service Commission (“MPSC”), the New Hampshire Public Utilities Commission (“NHPUC”), the Vermont Public Service Board (“VPSB”) and the West Virginia Public Service Commission (“WVPSC”) and are retained by the Company. Revenue for the intrastate/interLATA access service is received through tariffed access charges as filed with the APSC, MDTC, MPSC, MPUC, NHPUC, VPSB and WVPSC. These access charges are billed to the intrastate carriers and are retained by the Company. Revenue for terminating and originating long distance service is received through charges for providing usage of the local exchange network. Toll revenues are recognized when services are rendered. The FCC’s Intercarrier Compensation order, issued in October 2011, has significantly changed the way telecommunication carriers receive compensation for exchanging traffic and state tariffed rates. All terminating intrastate rates that exceeded the interstate rate were reduced to the terminating interstate rate effective July 2014. Beginning in 2014, the interstate and intrastate rates will be reduced over three years to “bill and keep” in which carriers bill their customers for services and keep those charges but neither pay for nor receive compensation from traffic sent to or received from other carriers. In addition, subsidies to carriers serving high cost areas will be phased out over an extended period. Revenues for interstate access services are based on reimbursement of costs and an allowed rate of return. Revenues of this nature are received from the NECA in the form of monthly settlements. Such revenues amounted to 13.1%, 15.5%, and 17.4% of the Company’s total revenues for the years ended December 31, 2013, 2014, and 2015, respectively. Internet, tran sport service, cable and satellite television and cloud hosting and managed services |
Cash and Cash Equivalents, Policy [Policy Text Block] | Cash and Cash Equivalents Cash equivalents are stated at cost plus accrued interest, which approximates fair value. Cash equivalents are high-quality, short-term money market instruments and highly liquid debt instruments with an original maturity of three months or less when purchased. The cash equivalents are readily convertible to known amounts of cash and are so near maturity that they present insignificant risk of changes in value because of changes in interest rates. |
Receivables, Policy [Policy Text Block] | Accounts Receivable The Company extends credit to its business and residential customers based upon a written credit policy. Service interruption is the primary vehicle for controlling losses. Accounts receivable are recorded at the invoiced amount and do not bear interest. The allowance for doubtful accounts is the Company’s best estimate for the amount of probable credit losses in the Company’s existing accounts receivable. The Company establishes an allowance for doubtful accounts based upon factors surrounding the credit risk of specific customers, historical trends, and other information. Receivable balances are reviewed on an aged basis and account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. |
Inventory, Policy [Policy Text Block] | Materials and Supplies Materials and supplies are stated at the lower of cost or market value. Cost is determined using an average cost basis. |
Property, Plant and Equipment, Policy [Policy Text Block] | Property and Equipment Regulated property and equipment is stated at original cost less any impairment. Unregulated property and equipment purchased through acquisitions is stated at its fair value at the date of acquisition less any impairment. Expenditures for improvements that significantly add to productive capacity or extend the useful life of an asset are capitalized. Expenditures for maintenance and repairs are expensed when incurred. Depreciation of regulated property and equipment is computed principally using the straight-line method over useful lives determined by the APSC, MDTC, MPSC, MPUC, NHPUC, VPSB and WVPSC as discussed above. Depreciation of unregulated property and equipment primarily employs the straight-line method over industry standard estimated useful lives. |
Impairment or Disposal of Long-Lived Assets, Policy [Policy Text Block] | Long-Lived Assets The Company reviews its long-lived assets for impairment at each balance sheet date and whenever events or changes in circumstances indicate that the carrying amount of an asset should be assessed. To determine if impairment exists, the Company estimates the future undiscounted cash flows expected to result from the use of the asset being reviewed for impairment. If the sum of these expected future cash flows is less than the carrying amount of the asset, the Company recognizes an impairment loss in accordance with guidance included in ASC 360, Property, Plant, and Equipment |
Deferred Charges, Policy [Policy Text Block] | Deferred Financing Costs Deferred financing and loan costs consist of debt issuance costs incurred in obtaining long-term financing, which are amortized using the effective interest method. Amortization of deferred financing and loan costs is classified as “Interest expense”. When amendments to debt agreements are considered to extinguish existing debt per guidance included in ASC 470, Debt |
Income Tax, Policy [Policy Text Block] | Income Taxes The Company accounts for income taxes using the asset and liability approach in accordance with guidance included in ASC 740, Income Taxes The provision for income taxes consists of an amount for the taxes currently payable and a provision for the tax consequences deferred to future periods. Interest and penalties related to income tax matters would be recognized in income tax expense. As of December 31, 2015, there was no amount recorded for interest and penalties. The Company conducts business in multiple jurisdictions and, as a result, one or more subsidiaries file income tax returns in the U.S. federal, various state and local jurisdictions. All tax years since 2012 are open for examination by various tax authorities. |
Fair Value of Financial Instruments, Policy [Policy Text Block] | Fair Value of Financial Instruments The carrying values of the Company’s financial instruments, including cash and cash equivalents, accounts receivable, prepaids, accounts payable and accrued liabilities, approximate their fair values as of December 31, 2014 and 2015 due to their short term nature. The fair value of debt instruments at December 31, 2014 and 2015 is disclosed in the notes to the consolidated financial statements. |
Earnings Per Share, Policy [Policy Text Block] | Income per Common Share The Company computes net income per common share in accordance with the provisions included in ASC 260, Earnings per Share |
New Accounting Pronouncements, Policy [Policy Text Block] | Recently Adopted Accounting Pronouncements During 2014, the FASB issued Accounting Standards Updates (“ASUs”) 2014-01 through 2014-18. Except for ASU 2014-09, ASU 2014-12 and ASU 2014-15, which are discussed below, these ASUs provide technical corrections or simplification to existing guidance and to specialized industries or entities and therefore have minimal, if any, impact on the Company. In June 2014, the FASB issued ASU 2014-12, Compensation-Stock Compensation (Topic 718): Account ing for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period Recent Accounting Pronouncements In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) . In July 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date. In August 2014, the FASB issued ASU 2014-15, Presentation of Financial Statements – Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016, with early adoption permitted. The implementation of this ASU is not expected to have a material impact on the Company’s consolidated financial position or results of operations. In April 2015, the FASB issued ASU 2015-03, Interest–Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs. In April 2015, the FASB issued ASU 2015-05 , Intangibles–Goodwill and Other–Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement . This ASU provides guidance regarding whether a cloud computing arrangement includes a software license. If a cloud computing arrangement includes a software license, then the entity should account for the software license element of the arrangement consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, the entity should account for the arrangement as a service contract. The guidance will not change U.S. GAAP for an entity’s accounting for service contracts. This pronouncement is effective for fiscal years, including interim periods within those fiscal years, beginning after December 15, 2015. The Company assessed the implementation of this ASU is not expected to have a material impact on its consolidated financial statements. In July 2015, the FASB issued ASU 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory In November 2015, the FASB issued ASU 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes . This ASU provides guidance that simplifies the presentation of deferred income taxes. This ASU requires that deferred tax liabilities and assets be classified as noncurrent in a classified statement of financial position. This guidance is effective for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods. The implementation of this ASU is not expected to have a material impact on the Company’s consolidated financial position or results of operations. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) . |
Reclassification, Policy [Policy Text Block] | Reclassifications Certain items in prior years’ consolidated financial statements have been reclassified to conform with 2015 presentation. |
Note 4 - Goodwill and Intangi25
Note 4 - Goodwill and Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Notes Tables | |
Schedule of Finite-Lived Intangible Assets [Table Text Block] | December 31, 2013 Carrying Value Accumulated Amortization Net Book Value Customer relationships $ 23,701 $ (19,632 ) $ 4,069 Contract relationships 19,600 (19,600 ) - Non-competition 83 (83 ) - Trade name 9 (4 ) 5 Total $ 43,393 $ (39,319 ) $ 4,074 December 31, 2014 Carrying Value Accumulated Amortization Net Book Value Customer relationships $ 24,025 $ (20,880 ) $ 3,145 Contract relationships 19,600 (19,600 ) - Non-competition 107 (89 ) 18 Trade name 23 (8 ) 15 Total $ 43,755 $ (40,577 ) $ 3,178 December 31, 2015 Carrying Value Accumulated Amortization Net Book Value Customer relationships $ 24,025 $ (21,685 ) $ 2,340 Contract relationships 19,600 (19,600 ) - Non-competition 107 (95 ) 12 Trade name 23 (12 ) 11 Total $ 43,755 $ (41,392 ) $ 2,363 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block] | 2013 $ 2,597 2014 $ 1,258 2015 $ 815 Expected amortization expense for the years ending December 31, 2016 $ 578 2017 458 2018 408 2019 389 2020 372 Thereafter 158 Total $ 2,363 |
Note 5 - Property and Equipme26
Note 5 - Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Notes Tables | |
Property, Plant and Equipment [Table Text Block] | Estimated December 31, Life 2014 2015 Land $ 1,164 $ 1,164 Building and improvements 20 - 40 12,528 12,723 Telephone equipment 6 - 20 230,100 233,099 Cable television equipment 7 11,945 12,129 Furniture and equipment 8 - 14 3,036 3,045 Vehicles 7 - 9 6,343 6,516 Computer software equipment 5 - 7 15,984 16,251 Internet equipment 5 3,829 3,797 Total property and equipment 284,929 288,724 Accumulated depreciation and amortization (233,692 ) (238,913 ) Net property and equipment $ 51,237 $ 49,811 |
Note 6 - Other Accounts Recei27
Note 6 - Other Accounts Receivables (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Notes Tables | |
Schedule of Accounts, Notes, Loans and Financing Receivable [Table Text Block] | December 31, 2014 2015 Carrier access bills receivable $ 714 $ 570 NECA receivable 1,078 1,030 Receivables from Alabama Service Fund 63 59 Other miscellaneous 76 63 $ 1,931 $ 1,722 |
Note 7 - Investments (Tables)
Note 7 - Investments (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Notes Tables | |
Investment [Table Text Block] | December 31, 2014 2015 Investment in CoBank stock $ 1,475 $ 1,475 Rental property 321 296 Other miscellaneous 74 75 $ 1,870 $ 1,846 |
Note 8 - Notes Payable (Tables)
Note 8 - Notes Payable (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Notes Tables | |
Schedule of Long-term Debt Instruments [Table Text Block] | December 31, 2014 2015 Third amended and restated term credit facility; Antares Capital (formerly General Electric Capital Corporation); variable interest rate of 6.5% at December 31, 2014 and December 31, 2015. The Credit Facility was secured by the total assets of the subsidiary guarantors. The unpaid balance is due April 30, 2016. $ 112,135 $ 100,052 Less: current portion (6,665 ) (3,000 ) Long-term notes payable $ 105,470 $ 97,052 |
Note 10 - Income Tax (Tables)
Note 10 - Income Tax (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Notes Tables | |
Schedule of Components of Income Tax Expense (Benefit) [Table Text Block] | For the Years Ended December 31, 2013 2014 2015 Federal income taxes Current $ 210 $ 230 $ 2,552 Deferred 5,528 2,380 1,661 Total federal tax expense 5,738 2,610 4,213 State income taxes Current – 14 366 Deferred 629 561 365 Total state tax expense 629 575 731 Total income tax expense $ 6,367 $ 3,185 $ 4,944 |
Schedule of Deferred Tax Assets and Liabilities [Table Text Block] | December 31, 2014 2015 Deferred tax liabilities: Amortization $ (14,871 ) $ (16,107 ) Depreciation (10,358 ) (10,541 ) Prepaid expense (600 ) (415 ) State net operating loss carryforwards and adjustments – (49 ) Other (14 ) (13 ) Total deferred tax liabilities $ (25,843 ) $ (27,125 ) Deferred tax assets: Amortized intangibles $ 502 $ – State net operating loss carryforwards and adjustments 27 – Deferred compensation 297 234 Advance payments 286 266 Bad debt 100 169 Other 551 350 Total net deferred tax assets $ 1,763 $ 1,019 |
Schedule of Effective Income Tax Rate Reconciliation [Table Text Block] | For the Years Ended December 31, 2013 2014 2015 Federal income tax at statutory rate 35 % 35 % 35 % Federal income tax provision at statutory rate $ 40,428 $ 2,875 $ 4,349 State income tax provision, net of federal income tax effects 408 339 475 Cancellation of debt (non-taxable) (37,681 ) – – Restructuring expense 1,974 – – Valuation allowance 1,288 – – Other (50 ) (29 ) 120 Provision for income taxes $ 6,367 $ 3,185 $ 4,944 Effective income tax rate 5.5 % 38.8 % 39.8 % |
Note 12 - Net Income Per Comm31
Note 12 - Net Income Per Common Share (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Notes Tables | |
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] | For the Years Ended December 31, 2013 2014 2015 Weighted average number of common shares outstanding - basic 2,921,208 3,103,728 3,239,306 Effect of dilutive securities — 64,433 74,335 Weighted average number of common shares and potential common shares - diluted 2,921,208 3,168,161 3,313,641 Net income $ 109,144 $ 5,029 $ 7,484 Net income per common share - basic $ 37.36 $ 1.62 $ 2.31 Net income per common share - diluted $ 37.36 $ 1.59 $ 2.26 |
Note 13 - Fair Value Measurem32
Note 13 - Fair Value Measurement (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Notes Tables | |
Fair Value, by Balance Sheet Grouping [Table Text Block] | Carrying Value Fair Value Notes Payable December 31, 2014 $ 112,135 $ 120,580 Notes Payable December 31, 2015 $ 100,052 $ 102,076 |
Note 14 - Commitments and Con33
Note 14 - Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Notes Tables | |
Schedule of Future Minimum Rental Payments for Operating Leases [Table Text Block] | 2016 $ 481 2017 327 2018 230 2019 102 2020 85 Thereafter 141 Total $ 1,366 |
Note 15 - Stock Plans and Sto34
Note 15 - Stock Plans and Stock Associated with Acquisition (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Notes Tables | |
Schedule of Share-based Compensation, Restricted Stock Units Award Activity [Table Text Block] | RSUs Weighted Average Grant Date Fair Value Outstanding at December 31, 2014 113,961 $ 4.96 Granted 122,534 $ 4.71 Vested (65,712 ) $ 4.96 Forfeited or cancelled (15,022 ) $ 4.96 Outstanding at December 31, 2015 155,761 $ 4.78 |
Note 16 - Selected Quarterly 35
Note 16 - Selected Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Notes Tables | |
Schedule of Quarterly Financial Information [Table Text Block] | First Quarter Second Quarter Third Quarter Fourth Quarter Fiscal 2014: Revenue $ 18,783 $ 18,488 $ 18,421 $ 18,178 Operating income $ 3,973 $ 4,438 $ 4,625 $ 3,822 Net income $ 1,394 $ 1,308 $ 1,387 $ 940 Net income per common share-basic $ 0.45 $ 0.42 $ 0.45 $ 0.30 Net income per common share-diluted $ 0.45 $ 0.42 $ 0.44 $ 0.29 Fiscal 2015: Revenue $ 17,643 $ 17,892 $ 17,850 $ 17,717 Operating income $ 4,508 $ 4,765 $ 4,910 $ 5,072 Net income $ 2,135 $ 1,655 $ 1,850 $ 1,844 Net income per common share-basic $ 0.66 $ 0.51 $ 0.57 $ 0.57 Net income per common share-diluted $ 0.65 $ 0.50 $ 0.56 $ 0.54 |
Note 1 - Nature of Business (De
Note 1 - Nature of Business (Details Textual) $ in Millions | 1 Months Ended | 12 Months Ended | |
Mar. 24, 2013USD ($)shares | Dec. 31, 2015shares | Dec. 31, 2014shares | |
Common Class A [Member] | |||
Common Stock, Shares, Issued | 2,870,948 | 3,015,099 | 2,881,154 |
Common Stock, Shares, Outstanding | 2,870,948 | 3,015,099 | 2,881,154 |
Percentage of Voting Interests Represents by Class of Common Stock, Following the Effectiveness of the Reorganization | 92.50% | ||
Common Stock, Capital Shares Reserved for Future Issuance | 232,780 | ||
Common Class B [Member] | |||
Common Stock, Shares, Issued | 232,780 | 232,780 | 232,780 |
Common Stock, Shares, Outstanding | 232,780 | 232,780 | 232,780 |
Percentage of Voting Interests Represents by Class of Common Stock, Following the Effectiveness of the Reorganization | 7.50% | ||
Senior Credit Facility [Member] | Reduced Amount [Member] | |||
Long-term Debt | $ | $ 133.3 | ||
Senior Credit Facility [Member] | |||
Long-term Debt, Gross | $ | 162 | ||
Repayments of Long-term Lines of Credit | $ | 28.7 | ||
Line of Credit Facility, Maximum Borrowing Capacity | $ | $ 5 | ||
Number of Reportable Segments | 1 | ||
Percentage of New Class A Common Stock | 50.00% |
Note 2 - Summary of Significa37
Note 2 - Summary of Significant Accounting Policies (Details Textual) - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Sales Revenue, Services, Net [Member] | |||
Concentration Risk, Percentage | 17.40% | 15.50% | 13.10% |
Unrecognized Tax Benefits, Income Tax Penalties and Interest Expense | $ 0 | ||
Percentage of Net Property, Plant, and Equipment Accounted for Under ASC980 | 76.50% | 75.30% | |
Deferred Revenue | $ 681 | $ 734 |
Note 3 - Impairments (Details T
Note 3 - Impairments (Details Textual) - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Goodwill, Impairment Loss | $ 0 | $ 0 | $ 0 |
Impairment of Intangible Assets (Excluding Goodwill) | $ 0 | $ 0 | $ 0 |
Note 4 - Goodwill and Intangi39
Note 4 - Goodwill and Intangible Assets (Details Textual) - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Alabama [Member | |||
Goodwill, Period Increase (Decrease) | $ 0 | ||
Goodwill | $ 39,199,000 | $ 39,199,000 | |
Percent of Goodwill | 87.20% | ||
New England [Member] | |||
Goodwill, Period Increase (Decrease) | $ 0 | ||
Goodwill | 44,976 | ||
Percent of Goodwill | 1.00% | ||
Goodwill, Acquired During Period | 19,000 | ||
Missouri [Member] | |||
Goodwill, Period Increase (Decrease) | $ 0 | ||
Goodwill | $ 5,758,000 | 5,758,000 | |
Percent of Goodwill | 12.80% | ||
Minimum [Member] | |||
Finite-Lived Intangible Asset, Useful Life | 2 years | ||
Maximum [Member] | |||
Finite-Lived Intangible Asset, Useful Life | 15 years | ||
Goodwill, Impairment Loss | $ 0 | 0 | $ 0 |
Goodwill | $ 44,976,000 | $ 44,976,000 |
Note 4 - Intangible Assets (Det
Note 4 - Intangible Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Customer Relationships [Member] | |||
Carrying Value | $ 24,025 | $ 24,025 | $ 23,701 |
Accumulated Amortization | (21,685) | (20,880) | (19,632) |
Net Book Value | 2,340 | 3,145 | 4,069 |
Customer Contracts [Member] | |||
Carrying Value | 19,600 | 19,600 | 19,600 |
Accumulated Amortization | $ (19,600) | $ (19,600) | $ (19,600) |
Net Book Value | |||
Noncompete Agreements [Member] | |||
Carrying Value | $ 107 | $ 107 | $ 83 |
Accumulated Amortization | (95) | (89) | $ (83) |
Net Book Value | 12 | 18 | |
Trade Names [Member] | |||
Carrying Value | 23 | 23 | $ 9 |
Accumulated Amortization | (12) | (8) | (4) |
Net Book Value | 11 | 15 | 5 |
Carrying Value | 43,755 | 43,755 | 43,393 |
Accumulated Amortization | (41,392) | (40,577) | (39,319) |
Net Book Value | $ 2,363 | $ 3,178 | $ 4,074 |
Note 4 - Aggregate Amortization
Note 4 - Aggregate Amortization Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
For the year ended December 31, | $ 815 | $ 1,258 | $ 2,597 |
2,016 | 578 | ||
2,017 | 458 | ||
2,018 | 408 | ||
2,019 | 389 | ||
2,020 | 372 | ||
Thereafter | 158 | ||
Total | $ 2,363 | $ 3,178 | $ 4,074 |
Note 5 - Property and Equipme42
Note 5 - Property and Equipment (Details Textual) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Telephone Plant Adjustment [Member] | |||
Amortization | $ 385 | $ 385 | $ 384 |
Depreciation | 7,678 | 8,941 | 9,650 |
Amortization | $ 1,200 | $ 1,642 | $ 2,982 |
Note 5 - Property and Equipme43
Note 5 - Property and Equipment (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Land [Member] | ||
Property Plant and Equipment, Gross | $ 1,164 | $ 1,164 |
Building Improvements [Member] | Minimum [Member] | ||
Estimated Life | 20 years | |
Building Improvements [Member] | Maximum [Member] | ||
Estimated Life | 40 years | |
Building Improvements [Member] | ||
Property Plant and Equipment, Gross | $ 12,723 | 12,528 |
Telephone Equipment [Member] | Minimum [Member] | ||
Estimated Life | 6 years | |
Telephone Equipment [Member] | Maximum [Member] | ||
Estimated Life | 20 years | |
Telephone Equipment [Member] | ||
Property Plant and Equipment, Gross | $ 233,099 | 230,100 |
Cable Television Equipment [Member] | ||
Property Plant and Equipment, Gross | $ 12,129 | 11,945 |
Estimated Life | 7 years | |
Furniture and Fixtures [Member] | Minimum [Member] | ||
Estimated Life | 8 years | |
Furniture and Fixtures [Member] | Maximum [Member] | ||
Estimated Life | 14 years | |
Furniture and Fixtures [Member] | ||
Property Plant and Equipment, Gross | $ 3,045 | 3,036 |
Vehicles [Member] | Minimum [Member] | ||
Estimated Life | 7 years | |
Vehicles [Member] | Maximum [Member] | ||
Estimated Life | 9 years | |
Vehicles [Member] | ||
Property Plant and Equipment, Gross | $ 6,516 | 6,343 |
Computer Equipment [Member] | Minimum [Member] | ||
Estimated Life | 5 years | |
Computer Equipment [Member] | Maximum [Member] | ||
Estimated Life | 7 years | |
Computer Equipment [Member] | ||
Property Plant and Equipment, Gross | $ 16,251 | 15,984 |
Internet Equipment [Member] | ||
Property Plant and Equipment, Gross | $ 3,797 | 3,829 |
Estimated Life | 5 years | |
Property Plant and Equipment, Gross | $ 288,724 | 284,929 |
Accumulated depreciation and amortization | (238,913) | (233,692) |
Net property and equipment | $ 49,811 | $ 51,237 |
Note 6 - Schedule of Other Acco
Note 6 - Schedule of Other Accounts Receivable (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Carrier Access Bills Receivable [Member] | ||
Other Receivables | $ 570 | $ 714 |
NECA Receivable [Member] | ||
Other Receivables | 1,030 | 1,078 |
Receivables from Alabama Service Fund [Member] | ||
Other Receivables | 59 | 63 |
Other Miscellaneous [Member] | ||
Other Receivables | 63 | 76 |
Other Receivables | $ 1,722 | $ 1,931 |
Note 7 - Schedule of Investment
Note 7 - Schedule of Investments (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
CoBank Stock, at Cost [Member] | ||
Investments | $ 1,475 | $ 1,475 |
Rental Property [Member] | ||
Investments | 296 | 321 |
Other Miscellaneous Investments [Member] | ||
Investments | 75 | 74 |
Investments | $ 1,846 | $ 1,870 |
Note 8 - Notes Payable (Details
Note 8 - Notes Payable (Details Textual) - USD ($) | 12 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Mar. 24, 2013 | |
Revolving Credit Facility [Member] | ||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 5,000,000 | $ 5,000,000 | ||
Long-term Line of Credit | 0 | 0 | ||
Line of Credit Facility, Commitment Fee Amount | $ 25,000 | 25,000 | ||
Line of Credit Facility, Commitment Fee Percentage | 0.50% | |||
Senior Credit Facility [Member] | ||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 5,000,000 | |||
Deferred Finance Costs, Gross | $ 2,700,000 | |||
GE Capital 3rd [Member] | ||||
Amortization of Financing Costs | 880,000 | 936,000 | ||
Amortization of Financing Costs | $ 880,000 | $ 936,000 | $ 1,071,000 |
Note 8 - Summary of Notes Payab
Note 8 - Summary of Notes Payable (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
GE Capital 3rd [Member] | ||
Long-term Debt | $ 100,052 | $ 112,135 |
Less: current portion | (3,000) | (6,665) |
Long-term Debt, Excluding Current Maturities | $ 97,052 | $ 105,470 |
Note 8 - Summary of Notes Pay48
Note 8 - Summary of Notes Payable (Details) (Parentheticals) | Dec. 31, 2015 | Dec. 31, 2014 |
GE Capital 3rd [Member] | ||
Interest rate | 6.50% | 6.50% |
Note 9 - Acquisition (Details T
Note 9 - Acquisition (Details Textual) $ in Millions | Jan. 02, 2014USD ($) |
Reliable Networks [Member] | |
Payments to Acquire Businesses, Gross | $ 0.5 |
Note 10 - Income Tax (Details T
Note 10 - Income Tax (Details Textual) - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Domestic Tax Authority [Member] | |||
Operating Loss Carryforwards | $ 0 | $ 0 | |
State and Local Jurisdiction [Member] | |||
Operating Loss Carryforwards | $ 68,000 | 0 | |
Earliest Tax Year [Member] | |||
Open Tax Year | 2,012 | ||
Deferred Tax Assets, Tax Credit Carryforwards, Alternative Minimum Tax | $ 0 | $ 0 | |
Deferred Tax Assets, Valuation Allowance | $ 0 | ||
Effective Income Tax Rate Reconciliation, Percent | 39.80% | 38.80% | 5.50% |
Note 10 - Tax Effects of Tempor
Note 10 - Tax Effects of Temporary Differences (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Federal income taxes | |||
Current | $ 2,552 | $ 230 | $ 210 |
Deferred | 1,661 | 2,380 | 5,528 |
Total federal tax expense | 4,213 | 2,610 | $ 5,738 |
State income taxes | |||
Current | 366 | 14 | |
Deferred | 365 | 561 | $ 629 |
Total state tax expense | 731 | 575 | 629 |
Total income tax expense | $ 4,944 | $ 3,185 | $ 6,367 |
Note 10 - Deferred Tax Assets a
Note 10 - Deferred Tax Assets and Liabilities (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Deferred tax liabilities: | ||
Amortization | $ (16,107,000) | $ (14,871,000) |
Depreciation | (10,541,000) | (10,358,000) |
Prepaid expense | (415,000) | (600,000) |
State net operating loss carryforwards and adjustments, liabilties | (49,000) | 0 |
Other | (13,000) | (14,000) |
Total deferred tax liabilities | $ (27,125,000) | (25,843,000) |
Deferred tax assets: | ||
Amortized intangibles | 502,000 | |
State net operating loss carryforwards and adjustments, assets | 27,000 | |
Deferred compensation | $ 234,000 | 297,000 |
Advance payments | 266,000 | 286,000 |
Bad debt | 169,000 | 100,000 |
Other | 350,000 | 551,000 |
Total net deferred tax assets | $ 1,019,000 | $ 1,763,000 |
Note 10 - Effective Income Tax
Note 10 - Effective Income Tax Rate Reconciliation (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Federal income tax at statutory rate | 35.00% | 35.00% | 35.00% |
Federal income tax provision at statutory rate | $ 4,349 | $ 2,875 | $ 40,428 |
State income tax provision, net of federal income tax effects | $ 475 | $ 339 | 408 |
Cancellation of debt (non-taxable) | (37,681) | ||
Restructuring expense | 1,974 | ||
Valuation allowance | 1,288 | ||
Other | $ 120 | $ (29) | (50) |
Provision for income taxes | $ 4,944 | $ 3,185 | $ 6,367 |
Effective Income Tax Rate Reconciliation, Percent | 39.80% | 38.80% | 5.50% |
Note 11 - Employee Benefit Pr54
Note 11 - Employee Benefit Program (Details Textual) - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
BTC [Member] | |||
Defined Contribution Plan, Employer Matching Contribution, Percent of Employees' Gross Pay | 4.50% | 4.50% | 6.00% |
Defined Contribution Plan, Cost Recognized | $ 15,000 | $ 15,000 | $ 30,000 |
Defined Contribution Plan, Minimum Annual Contributions Per Employee, Percent | 1.00% | ||
Defined Contribution Plan, Maximum Annual Contributions Per Employee, Amount | $ 17,500 | $ 17,500 | $ 17,500 |
Defined Contribution Plan, Employer Matching Contribution, Percent of Employees' Gross Pay | 4.50% | 4.50% | 6.00% |
Multiemployer Plan, Period Contributions | $ 0 | $ 0 | $ 0 |
Defined Contribution Plan, Cost Recognized | $ 520,000 | $ 494,000 | $ 670,000 |
Note 12 - Reconciliation of Inc
Note 12 - Reconciliation of Income (Loss) Per Common Share (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Weighted average number of common shares outstanding - basic (in shares) | 3,239,306 | 3,103,728 | 2,921,208 |
Effect of dilutive securities (in shares) | 74,335 | 64,433 | |
Weighted average number of common shares and potential common shares - diluted (in shares) | 3,313,641 | 3,168,161 | 2,921,208 |
Net income | $ 7,484 | $ 5,029 | $ 109,144 |
Net income per common share-basic (in dollars per share) | $ 2.31 | $ 1.62 | $ 37.36 |
Net income per common share - diluted (in dollars per share) | $ 2.26 | $ 1.59 | $ 37.36 |
Note 13 - Fair Value of Long-te
Note 13 - Fair Value of Long-term Debt (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Reported Value Measurement [Member] | ||
Long-term Debt | $ 100,052 | $ 112,135 |
Estimate of Fair Value Measurement [Member] | ||
Long-term Debt | $ 102,076 | $ 120,580 |
Note 14 - Commitments and Con57
Note 14 - Commitments and Contingencies (Details Textual) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Operating Leases, Rent Expense, Net | $ 582 | $ 616 | $ 653 |
Note 14 - Minimum Future Rental
Note 14 - Minimum Future Rental Payments Under Non-Cancellable Operating Leases (Details) $ in Thousands | Dec. 31, 2015USD ($) |
2,016 | $ 481 |
2,017 | 327 |
2,018 | 230 |
2,019 | 102 |
2,020 | 85 |
Thereafter | 141 |
Total | $ 1,366 |
Note 15 - Stock Plans and Sto59
Note 15 - Stock Plans and Stock Associated with Acquisition (Details Textual) - USD ($) | Jul. 09, 2014 | Dec. 31, 2015 | Dec. 31, 2014 |
Restricted Stock Units (RSUs) [Member] | Common Class A [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 124,167 | 122,534 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period | 10,206 | ||
Restricted Stock Units (RSUs) [Member] | Minimum [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 1 year | ||
Restricted Stock Units (RSUs) [Member] | Maximum [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 3 years | ||
Restricted Stock Units (RSUs) [Member] | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs, Capitalized Amount | $ 0 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 122,534 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period | 65,712 | ||
Common Class A [Member] | Reliable Networks [Member] | |||
Business Acquisition, Equity Interest Issued or Issuable, Number of Shares | 68,233 | ||
Common Class A [Member] | |||
Business Acquisition, Equity Interest Issued or Issuable, Number of Shares | 0 | ||
Allocated Share-based Compensation Expense | $ 362,000 | $ 643,000 | |
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized | 470,000 | 286,000 | |
Employee Service Share-based Compensation, Tax Benefit from Compensation Expense | $ 144,000 | $ 249,000 |
Note 15 - Summary of RSU Activi
Note 15 - Summary of RSU Activity (Details) - Restricted Stock Units (RSUs) [Member] | 12 Months Ended |
Dec. 31, 2015$ / sharesshares | |
Balance, outstanding shares (in shares) | shares | 113,961 |
Balance (in dollars per share) | $ / shares | $ 4.96 |
Granted (in shares) | shares | 122,534 |
Granted (in dollars per share) | $ / shares | $ 4.71 |
Vested (in shares) | shares | (65,712) |
Vested (in dollars per share) | $ / shares | $ 4.96 |
Forfeited or cancelled (in shares) | shares | (15,022) |
Forfeited or cancelled (in dollars per share) | $ / shares | $ 4.96 |
Balance, outstanding shares (in shares) | shares | 155,761 |
Balance (in dollars per share) | $ / shares | $ 4.78 |
Note 16 - Selected Quarterly 61
Note 16 - Selected Quarterly Financial Data (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Revenue | $ 17,717 | $ 17,850 | $ 17,892 | $ 17,643 | $ 18,178 | $ 18,421 | $ 18,488 | $ 18,783 | $ 71,102 | $ 73,870 | $ 78,972 |
Operating income | 5,072 | 4,910 | 4,765 | 4,508 | 3,822 | 4,625 | 4,438 | 3,973 | 19,255 | 16,858 | 18,651 |
Net income | $ 1,844 | $ 1,850 | $ 1,655 | $ 2,135 | $ 940 | $ 1,387 | $ 1,308 | $ 1,394 | $ 7,484 | $ 5,029 | $ 109,144 |
Net income per common share-basic (in dollars per share) | $ 0.57 | $ 0.57 | $ 0.51 | $ 0.66 | $ 0.30 | $ 0.45 | $ 0.42 | $ 0.45 | $ 2.31 | $ 1.62 | $ 37.36 |
Net income per common share-diluted (in dollars per share) | $ 0.54 | $ 0.56 | $ 0.50 | $ 0.65 | $ 0.29 | $ 0.44 | $ 0.42 | $ 0.45 | $ 2.26 | $ 1.59 | $ 37.36 |
Note 17 - Subsequent Events (De
Note 17 - Subsequent Events (Details Textual) - USD ($) | Feb. 17, 2016 | Jan. 25, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Loans Payable [Member] | Subsequent Event [Member] | |||||
Debt Instrument, Term | 5 years | ||||
Debt Maximum Borrowing Capacity | $ 85,000,000 | ||||
Proceeds from Issuance of Long-term Debt | $ 85,000,000 | ||||
Debt Instrument, Periodic Payment | 1,000,000 | ||||
Subordinated Debt [Member] | Subsequent Event [Member] | |||||
Debt Instrument, Term | 5 years 182 days | ||||
Debt Maximum Borrowing Capacity | 15,300,000 | $ 15,000,000 | |||
Proceeds from Issuance of Subordinated Long-term Debt | $ 15,300,000 | ||||
Subsequent Event [Member] | Revolving Credit Facility [Member] | |||||
Debt Instrument, Term | 5 years | ||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 5,000,000 | ||||
Revolving Credit Facility [Member] | |||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 5,000,000 | $ 5,000,000 | |||
Scenario, Forecast [Member] | |||||
Gains (Losses) on Extinguishment of Debt, before Write off of Deferred Debt Issuance Cost | $ (211,000) | ||||
Long-term Debt, Current Maturities | 3,000,000 | 6,665,000 | |||
Long-term Debt, Excluding Current Maturities | $ 97,052,000 | $ 105,470,000 |