Note 3 - Acquisition

9 Months Ended

Sep. 30, 2014

Business Combinations [Abstract]

Business Combination Disclosure [Text Block]

Note 3. Acquisition

On August 1, 2014, Avalon Holdings Corporation (“Avalon”), through a wholly owned subsidiary, completed the acquisition of The Magnuson Grand Hotel (formerly The Avalon Inn) in Howland, Ohio for $3.1 million in cash and the assumption of certain operating leases and some rental payment relief. The transaction also includes the purchase of the adjoining tennis center. The hotel is located adjacent to Avalon’s corporate headquarters and its Avalon Lakes Golf Course.

The acquisition has been accounted for using the acquisition method in accordance with the Financial Accounting Standards Board, Accounting Standards Codification Topic 805, Business Combinations. The assets acquired were recorded at their fair values as of the date of acquisition. The preliminary purchase price allocation was as follows:

Property and equipment	$	2,570,000
Other intangible assets		818,000
Deferred rental income		(266,000	)
Net assets acquired	$	3,122,000

The purchase price allocation is provisional, pending completion of the valuation of acquired property, buildings, furniture and fixtures and any intangible assets including goodwill. The other intangible assets are included in the Condensed Consolidated Balance Sheets under the caption “Other assets, net.” Avalon is utilizing a third party to assist in the fair value determination of certain components of the purchase price allocation. The final valuation may change the allocation of the purchase price, which could affect the fair values assigned to the assets. Avalon incurred $67,000 in acquisition related costs. Such amount is included in selling, general and administrative expenses. The amount of net operating revenues and net income of The Magnuson Grand Hotel included in Avalon’s Condensed Consolidated Statements of Operations from the acquisition date to the period ending September 30, 2014 are net operating revenues of $.3 million and $9,000 of net income.

Pro Forma Consolidated Results

The following supplemental pro forma information presents the financial results for the three and nine months ended September 30, 2014 as if the acquisition had occurred on January 1, 2014 and for the three and nine months ended September 30, 2013 as if the acquisition had occurred on January 1, 2013. The pro forma results do not include any anticipated effects of the planned integration of The Magnuson Grand Hotel with the golf and related operations segment.

Accordingly, such pro forma amounts are not necessarily indicative of the results that actually would have occurred had the acquisition been completed on the dates indicated, nor are they indicative of the future operating results of the combined company.

Pro forma consolidated results (in thousands, except for per share data):	Three Months Ended September 30,				Nine Months Ended September 30,
	2014		2013		2014			2013
Net operating revenues	$	14,550	$	16,835	$	38,223		$	48,153
Net income (loss)	$	75	$	393	$	(843	)	$	754
Basic income (loss) per share	$	0.02	$	0.10	$	(0.22	)	$	0.20
Diluted income (loss) per share	$	0.02	$	0.10	$	(0.22	)	$	0.19