|
Delaware
|
| |
52-2126395
|
|
|
(State or Other Jurisdiction of
Incorporation or Organization) |
| |
(I.R.S. Employer
Identification No.) |
|
|
505 Third Avenue East, Oneonta, Alabama
|
| |
35121
|
|
|
(Address of Principal Executive Offices)
|
| |
(Zip Code)
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|
|
Title of Each Class
|
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Trading Symbol(s)
|
| |
Name of Each Exchange on Which Registered
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|
|
Class A Common Stock ($0.01 par value per share)
|
| |
OTEL
|
| |
The Nasdaq Stock Market LLC
|
|
| Large accelerated filer ☐ | | | Accelerated filer ☐ | |
| Non-accelerated filer ☒ | | | Smaller reporting company ☒ | |
| | | | Emerging growth company ☐ | |
| | |
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| | | | 76 | | | |
| | | | 77 | | |
Source of Revenue:
|
| | | | | | |
Local services
|
| | | | 29.7% | | |
Network access
|
| | | | 32.1% | | |
Internet
|
| | | | 25.5% | | |
Transport services
|
| | | | 7.0% | | |
Video and security
|
| | | | 4.6% | | |
Managed services
|
| | | | 1.1% | | |
Total
|
| | | | 100.0% | | |
|
Land
|
| | | $ | 1,157 | | |
|
Buildings and improvements
|
| | | | 13,187 | | |
|
Telephone equipment
|
| | | | 252,967 | | |
|
Cable television equipment
|
| | | | 13,921 | | |
|
Furniture and equipment
|
| | | | 3,082 | | |
|
Vehicles
|
| | | | 7,069 | | |
|
Computer software and equipment
|
| | | | 20,725 | | |
|
Internet equipment
|
| | | | 12,581 | | |
|
Total property and equipment
|
| | | | 324,689 | | |
|
Accumulated depreciation
|
| | | | (265,303) | | |
|
Net property and equipment
|
| | | $ | 59,386 | | |
| | |
As Of And For The Year Ended December 31,
|
| |||||||||||||||||||||||||||
| | |
2020
|
| |
2019
|
| |
2018
|
| |
2017
|
| |
2016
|
| |||||||||||||||
| | |
(In Thousands Except Per Share Amounts)
|
| |||||||||||||||||||||||||||
Income Statement Data | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Revenues: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Local services
|
| | | $ | 18,367 | | | | | $ | 19,313 | | | | | $ | 20,948 | | | | | $ | 21,836 | | | | | $ | 23,038 | | |
Network access
|
| | | | 19,881 | | | | | | 21,210 | | | | | | 21,662 | | | | | | 22,552 | | | | | | 21,605 | | |
Internet
|
| | | | 15,812 | | | | | | 14,646 | | | | | | 15,221 | | | | | | 15,752 | | | | | | 15,605 | | |
Transport services
|
| | | | 4,363 | | | | | | 4,236 | | | | | | 4,774 | | | | | | 4,607 | | | | | | 4,880 | | |
Video and security
|
| | | | 2,840 | | | | | | 2,735 | | | | | | 2,824 | | | | | | 2,989 | | | | | | 2,892 | | |
Managed services
|
| | | | 708 | | | | | | 626 | | | | | | 639 | | | | | | 790 | | | | | | 924 | | |
Total
|
| | | $ | 61,971 | | | | | $ | 62,766 | | | | | $ | 66,068 | | | | | $ | 68,526 | | | | | $ | 68,944 | | |
Income from operations
|
| | | $ | 11,542 | | | | | $ | 14,844 | | | | | $ | 17,793 | | | | | $ | 19,607 | | | | | $ | 18,813 | | |
Income before income tax
|
| | | $ | 8,337 | | | | | $ | 10,189 | | | | | $ | 12,212 | | | | | $ | 4,259 | | | | | $ | 8,804 | | |
Net income available to common stockholders
|
| | | $ | 6,307 | | | | | $ | 7,796 | | | | | $ | 9,467 | | | | | $ | 12,115 | | | | | $ | 5,146 | | |
Diluted net income per common share
|
| | | $ | 1.83 | | | | | $ | 2.27 | | | | | $ | 2.76 | | | | | $ | 3.52 | | | | | $ | 1.51 | | |
Dividends declared per share
|
| | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | |
Balance Sheet Data | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Cash and cash equivalents
|
| | | $ | 8,445 | | | | | $ | 3,113 | | | | | $ | 4,657 | | | | | $ | 3,570 | | | | | $ | 10,538 | | |
Property and equipment, net
|
| | | $ | 59,386 | | | | | $ | 57,284 | | | | | $ | 52,073 | | | | | $ | 50,888 | | | | | $ | 49,271 | | |
Total assets
|
| | | $ | 127,404 | | | | | $ | 120,745 | | | | | $ | 114,352 | | | | | $ | 114,939 | | | | | $ | 120,272 | | |
Notes payable(1)
|
| | | $ | 65,862 | | | | | $ | 70,212 | | | | | $ | 74,562 | | | | | $ | 85,912 | | | | | $ | 97,573 | | |
| | |
December 31,
2020 |
| |
September 30,
2020 |
| |
June 30,
2020 |
| |
March 31,
2020 |
| |
December 31,
2019 |
| |
Change from
December 31, 2019 |
| |
December 31,
2018 |
| |
Change from
December 31, 2018 |
| ||||||||||||||||||||||||||||||||||||
Customers served | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Business/Enterprise
|
| | | | 5,120 | | | | | | 5,131 | | | | | | 5,192 | | | | | | 5,241 | | | | | | 5,337 | | | | | | (217) | | | | | | (4.1)% | | | | | | 5,769 | | | | | | (432) | | | | | | (7.5)% | | |
Residential
|
| | | | 27,495 | | | | | | 27,604 | | | | | | 27,901 | | | | | | 27,363 | | | | | | 26,917 | | | | | | 578 | | | | | | 2.1% | | | | | | 27,734 | | | | | | (817) | | | | | | (2.9)% | | |
Customers served
|
| | | | 32,615 | | | | | | 32,735 | | | | | | 33,093 | | | | | | 32,604 | | | | | | 32,254 | | | | | | 361 | | | | | | 1.1% | | | | | | 33,503 | | | | | | (1,249) | | | | | | (3.7)% | | |
Services provided | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Hosted PBX
|
| | | | 8,005 | | | | | | 7,994 | | | | | | 8,010 | | | | | | 8,199 | | | | | | 8,685 | | | | | | (680) | | | | | | (7.8)% | | | | | | 9,008 | | | | | | (323) | | | | | | (3.6)% | | |
Voice
|
| | | | 30,602 | | | | | | 31,957 | | | | | | 32,997 | | | | | | 33,456 | | | | | | 34,038 | | | | | | (3,436) | | | | | | (10.1)% | | | | | | 36,899 | | | | | | (2,861) | | | | | | (7.8)% | | |
Data
|
| | | | 23,392 | | | | | | 23,258 | | | | | | 23,373 | | | | | | 22,710 | | | | | | 22,242 | | | | | | 1,150 | | | | | | 5.2% | | | | | | 22,514 | | | | | | (272) | | | | | | (1.2)% | | |
Video
|
| | | | 2,585 | | | | | | 2,660 | | | | | | 2,683 | | | | | | 2,662 | | | | | | 2,669 | | | | | | (84) | | | | | | (3.1)% | | | | | | 2,734 | | | | | | (65) | | | | | | (2.4)% | | |
Services provided
|
| | | | 64,584 | | | | | | 65,869 | | | | | | 67,063 | | | | | | 67,027 | | | | | | 67,634 | | | | | | (3,050) | | | | | | (4.5)% | | | | | | 71,155 | | | | | | (3,521) | | | | | | (4.9)% | | |
| | |
Year Ended December 31,
|
| |||||||||
| | |
2020
|
| |
2019
|
| ||||||
Revenues
|
| | | | | | | | | | | | |
Local services
|
| | | | 29.7% | | | | | | 30.8% | | |
Network access
|
| | | | 32.1 | | | | | | 33.8 | | |
Internet
|
| | | | 25.5 | | | | | | 23.3 | | |
Transport services
|
| | | | 7.0 | | | | | | 6.7 | | |
Video and security
|
| | | | 4.6 | | | | | | 4.4 | | |
Managed services
|
| | | | 1.1 | | | | | | 1.0 | | |
Total revenues
|
| | | | 100.0% | | | | | | 100.0% | | |
Operating expenses
|
| | | | | | | | | | | | |
Cost of services
|
| | | | 48.8 | | | | | | 47.9 | | |
Selling, general and administrative expenses
|
| | | | 19.2 | | | | | | 16.3 | | |
Depreciation and amortization
|
| | | | 13.4 | | | | | | 12.2 | | |
Total operating expenses
|
| | | | 81.4 | | | | | | 76.4 | | |
Income from operations
|
| | | | 18.6 | | | | | | 23.6 | | |
Other income (expense)
|
| | | | | | | | | | | | |
Interest expense
|
| | | | (6.5) | | | | | | (8.4) | | |
Other income
|
| | | | 1.3 | | | | | | 1.0 | | |
Total other expenses
|
| | | | (5.2) | | | | | | (7.4) | | |
Income before income tax expense
|
| | | | 13.4 | | | | | | 16.2 | | |
Income tax expense
|
| | | | (3.2) | | | | | | (3.8) | | |
Net income
|
| | | | 10.2% | | | | | | 12.4% | | |
| | |
Year Ended December 31,
|
| |
Change
|
| ||||||||||||||||||
| | |
2020
|
| |
2019
|
| |
Amount
|
| |
Percent
|
| ||||||||||||
| | |
(Dollars in Thousands)
|
| | | | | | | |||||||||||||||
Local services
|
| | | $ | 18,367 | | | | | $ | 19,313 | | | | | $ | (946) | | | | | | (4.9)% | | |
Network access
|
| | | | 19,881 | | | | | | 21,210 | | | | | | (1,329) | | | | | | (6.3) | | |
Internet
|
| | | | 15,812 | | | | | | 14,646 | | | | | | 1,166 | | | | | | 8.0 | | |
Transport services
|
| | | | 4,363 | | | | | | 4,236 | | | | | | 127 | | | | | | 3.0 | | |
Video and security
|
| | | | 2,840 | | | | | | 2,735 | | | | | | 105 | | | | | | 3.8 | | |
Managed services
|
| | | | 708 | | | | | | 626 | | | | | | 82 | | | | | | 13.1 | | |
Total
|
| | | $ | 61,971 | | | | | $ | 62,766 | | | | | $ | (795) | | | | | | (1.3) | | |
| | |
Year Ended December 31,
|
| |
Change
|
| ||||||||||||||||||
| | |
2020
|
| |
2019
|
| |
Amount
|
| |
Percent
|
| ||||||||||||
| | |
(Dollars in Thousands)
|
| |||||||||||||||||||||
Cost of services
|
| | | $ | 30,251 | | | | | $ | 30,075 | | | | | $ | 176 | | | | | | 0.6% | | |
Selling, general and administrative expenses
|
| | | | 11,869 | | | | | | 10,204 | | | | | | 1,665 | | | | | | 16.3 | | |
Depreciation and amortization
|
| | | | 8,309 | | | | | | 7,643 | | | | | | 666 | | | | | | 8.7 | | |
Total
|
| | | $ | 50,429 | | | | | $ | 47,922 | | | | | $ | 2,507 | | | | | | 5.2 | | |
| | |
Year Ended December 31,
|
| |
Change
|
| ||||||||||||||||||
| | |
2020
|
| |
2019
|
| |
Amount
|
| |
Percent
|
| ||||||||||||
| | |
(Dollars in Thousands)
|
| |||||||||||||||||||||
Interest expense
|
| | | $ | (4,025) | | | | | $ | (5,271) | | | | | $ | (1,246) | | | | | | (23.6)% | | |
Other income
|
| | | | 820 | | | | | | 616 | | | | | | 204 | | | | | | 33.1 | | |
Income tax expense
|
| | | | (2,030) | | | | | | (2,393) | | | | | | (363) | | | | | | (15.2) | | |
| | |
Year Ended December 31,
|
| |||||||||
| | |
2020
|
| |
2019
|
| ||||||
| | |
(Dollars in Thousands)
|
| |||||||||
Net income
|
| | | $ | 6,307 | | | | | $ | 7,796 | | |
Add: Depreciation
|
| | | | 7,994 | | | | | | 7,344 | | |
Interest expense less interest income
|
| | | | 3,504 | | | | | | 4,803 | | |
Interest expense – amortize loan cost
|
| | | | 502 | | | | | | 452 | | |
Income tax expense
|
| | | | 2,030 | | | | | | 2,393 | | |
Amortization – intangibles
|
| | | | 315 | | | | | | 299 | | |
Loan fees
|
| | | | 72 | | | | | | 69 | | |
Stock-based compensation (senior management)
|
| | | | 208 | | | | | | 254 | | |
Consolidated EBITDA
|
| | | $ | 20,932 | | | | | $ | 23,410 | | |
|
Notes payable
|
| | | $ | 65,040 | | |
|
Debt issuance costs
|
| | | | 822 | | |
|
Notes outstanding (excluding PPP Loan)
|
| | | $ | 65,862 | | |
|
Less cash (excluding PPP Loan proceeds)
|
| | | | (5,470) | | |
|
Notes outstanding, net of cash
|
| | | $ | 60,392 | | |
|
Consolidated EBITDA for the last twelve months
|
| | | $ | 20,932 | | |
|
Leverage Ratio
|
| | | | 2.89 | | |
| | | | | 30 | | | |
| | | | | 32 | | | |
| | | | | 33 | | | |
| | | | | 34 | | | |
| | | | | 35 | | | |
| | | | | 36 | | |
| | |
As of December 31,
|
| |||||||||
| | |
2020
|
| |
2019
|
| ||||||
Assets
|
| | | | | | | | | | | | |
Current assets | | | | | | | | | | | | | |
Cash and cash equivalents
|
| | | $ | 8,445 | | | | | $ | 3,113 | | |
Accounts receivable:
|
| | | | | | | | | | | | |
Due from subscribers, net of allowance for doubtful accounts of $232 and $209, respectively
|
| | | | 3,881 | | | | | | 3,908 | | |
Other
|
| | | | 2,373 | | | | | | 1,905 | | |
Materials and supplies
|
| | | | 3,615 | | | | | | 3,954 | | |
Prepaid expenses
|
| | | | 1,274 | | | | | | 1,624 | | |
Other assets
|
| | | | 187 | | | | | | 251 | | |
Total current assets
|
| | | | 19,775 | | | | | | 14,755 | | |
Property and equipment, net
|
| | | | 59,386 | | | | | | 57,284 | | |
Goodwill
|
| | | | 44,976 | | | | | | 44,976 | | |
Intangible assets, net
|
| | | | 158 | | | | | | 530 | | |
Operating lease right-of-use asset
|
| | | | 1,539 | | | | | | 1,146 | | |
Investments
|
| | | | 1,454 | | | | | | 1,477 | | |
Other assets
|
| | | | 116 | | | | | | 577 | | |
Total assets
|
| | | $ | 127,404 | | | | | $ | 120,745 | | |
Liabilities and Stockholders’ Equity
|
| | | | | | | | | | | | |
Current liabilities | | | | | | | | | | | | | |
Accounts payable
|
| | | $ | 1,498 | | | | | $ | 1,525 | | |
Accrued expenses
|
| | | | 5,643 | | | | | | 4,861 | | |
Advanced billings and payments
|
| | | | 1,680 | | | | | | 1,618 | | |
Customer deposits
|
| | | | 26 | | | | | | 44 | | |
Current operating lease liability
|
| | | | 375 | | | | | | 296 | | |
Current maturity of long-term notes payable, net of debt issuance costs
|
| | | | 6,946 | | | | | | 3,929 | | |
Total current liabilities
|
| | | | 16,168 | | | | | | 12,273 | | |
Deferred income taxes
|
| | | | 21,514 | | | | | | 21,521 | | |
Advanced billings and payments
|
| | | | 1,958 | | | | | | 2,157 | | |
Other liabilities
|
| | | | 276 | | | | | | 12 | | |
Long-term operating lease liability
|
| | | | 1,164 | | | | | | 850 | | |
Paycheck Protection Program notes payable
|
| | | | 2,975 | | | | | | — | | |
Long-term notes payable, less current maturities and debt issuance costs
|
| | | | 58,094 | | | | | | 65,172 | | |
Total liabilities
|
| | | | 102,149 | | | | | | 101,985 | | |
Stockholders’ equity | | | | | | | | | | | | | |
Class A Common Stock, $.01 par value-authorized 10,00,000 shares; issued and outstanding 3,421,794 and 3,412,805 shares, respectively
|
| | | | 34 | | | | | | 34 | | |
Additional paid in capital
|
| | | | 4,463 | | | | | | 4,275 | | |
Retained earnings
|
| | | | 20,758 | | | | | | 14,451 | | |
Total stockholders’ equity
|
| | | | 25,255 | | | | | | 18,760 | | |
Total liabilities and stockholders’ equity
|
| | | $ | 127,404 | | | | | $ | 120,745 | | |
| | |
Years Ended December 31,
|
| |||||||||||||||
| | |
2020
|
| |
2019
|
| |
2018
|
| |||||||||
Revenues
|
| | | $ | 61,971 | | | | | $ | 62,766 | | | | | $ | 66,068 | | |
Operating expenses | | | | | | | | | | | | | | | | | | | |
Cost of services
|
| | | | 30,251 | | | | | | 30,075 | | | | | | 30,592 | | |
Selling, general and administrative expenses
|
| | | | 11,869 | | | | | | 10,204 | | | | | | 10,451 | | |
Depreciation and amortization
|
| | | | 8,309 | | | | | | 7,643 | | | | | | 7,232 | | |
Total operating expenses
|
| | | | 50,429 | | | | | | 47,922 | | | | | | 48,275 | | |
Income from operations
|
| | | | 11,542 | | | | | | 14,844 | | | | | | 17,793 | | |
Other income (expense) | | | | | | | | | | | | | | | | | | | |
Interest expense
|
| | | | (4,025) | | | | | | (5,271) | | | | | | (5,844) | | |
Other income
|
| | | | 820 | | | | | | 616 | | | | | | 263 | | |
Total other expense
|
| | | | (3,205) | | | | | | (4,655) | | | | | | (5,581) | | |
Income before income tax expense
|
| | | | 8,337 | | | | | | 10,189 | | | | | | 12,212 | | |
Income tax expense
|
| | | | (2,030) | | | | | | (2,393) | | | | | | (2,745) | | |
Net income
|
| | | $ | 6,307 | | | | | $ | 7,796 | | | | | $ | 9,467 | | |
Weighted average number of common shares outstanding | | | | | | | | | | | | | | | | | | | |
Basic
|
| | | | 3,421,794 | | | | | | 3,412,805 | | | | | | 3,388,624 | | |
Diluted
|
| | | | 3,440,772 | | | | | | 3,430,453 | | | | | | 3,434,862 | | |
Basic net income per common share
|
| | | $ | 1.84 | | | | | $ | 2.28 | | | | | $ | 2.79 | | |
Diluted net income per common share
|
| | | $ | 1.83 | | | | | $ | 2.27 | | | | | $ | 2.76 | | |
| | |
Class A Common
Stock |
| |
Additional
Paid-In Capital |
| |
(Accumulated
Deficit)/Retained Earnings |
| |
Total
Stockholders’ Equity |
| ||||||||||||||||||
| | |
Shares
|
| |
Amount
|
| ||||||||||||||||||||||||
Balance, December 31, 2017
|
| | | | 3,346,689 | | | | | $ | 34 | | | | | $ | 4,285 | | | | | $ | (2,812) | | | | | $ | 1,507 | | |
Net income
|
| | | | | | | | | | | | | | | | | | | | | | 9,467 | | | | | | 9,467 | | |
Stock-based compensation expense
|
| | | | | | | | | | | | | | | | 308 | | | | | | | | | | | | 308 | | |
Tax withholding paid on behalf of employees for restricted stock units
|
| | | | | | | | | | | | | | | | (380) | | | | | | | | | | | | (380) | | |
Issuance of Class A Stock
|
| | | | 41,935 | | | | | | — | | | | | | | | | | | | | | | | | | — | | |
Balance, December 31, 2018
|
| | | | 3,388,624 | | | | | $ | 34 | | | | | $ | 4,213 | | | | | $ | 6,655 | | | | | $ | 10,902 | | |
Net income
|
| | | | | | | | | | | | | | | | | | | | | | 7,796 | | | | | | 7,796 | | |
Stock-based compensation expense
|
| | | | | | | | | | | | | | | | 254 | | | | | | | | | | | | 254 | | |
Tax withholding paid on behalf of employees for restricted stock units
|
| | | | | | | | | | | | | | | | (192) | | | | | | | | | | | | (192) | | |
Issuance of Class A Stock
|
| | | | 24,181 | | | | | | — | | | | | | | | | | | | | | | | | | — | | |
Balance, December 31, 2019
|
| | | | 3,412,805 | | | | | $ | 34 | | | | | $ | 4,275 | | | | | $ | 14,451 | | | | | $ | 18,760 | | |
Net income
|
| | | | | | | | | | | | | | | | | | | | | | 6,307 | | | | | | 6,307 | | |
Stock-based compensation expense
|
| | | | | | | | | | | | | | | | 208 | | | | | | | | | | | | 208 | | |
Tax withholding paid on behalf of
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
employees for restricted stock units
|
| | | | | | | | | | | | | | | | (20) | | | | | | | | | | | | (20) | | |
Issuance of Class A Stock
|
| | | | 8,989 | | | | | | — | | | | | | | | | | | | | | | | | | — | | |
Balance, December 31, 2020
|
| | | | 3,421,794 | | | | | $ | 34 | | | | | $ | 4,463 | | | | | $ | 20,758 | | | | | $ | 25,255 | | |
| | |
Years Ended December 31,
|
| |||||||||||||||
| | |
2020
|
| |
2019
|
| |
2018
|
| |||||||||
Cash flows from operating activities: | | | | | | | | | | | | | | | | | | | |
Net income
|
| | | $ | 6,307 | | | | | $ | 7,796 | | | | | $ | 9,467 | | |
Adjustments to reconcile net income to cash flows provided by operating activities:
|
| | | | | | | | | | | | | | | | | | |
Depreciation
|
| | | | 7,994 | | | | | | 7,344 | | | | | | 6,906 | | |
Amortization
|
| | | | 315 | | | | | | 299 | | | | | | 326 | | |
Amortization of loan costs
|
| | | | 502 | | | | | | 452 | | | | | | 476 | | |
Non-cash lease amortization
|
| | | | 409 | | | | | | 265 | | | | | | — | | |
(Benefit) provision for deferred income taxes
|
| | | | (23) | | | | | | 1,308 | | | | | | 1,062 | | |
Excess tax benefit from stock-based compensation
|
| | | | 16 | | | | | | 68 | | | | | | 144 | | |
Provision for uncollectible accounts receivable
|
| | | | 371 | | | | | | 214 | | | | | | 553 | | |
Stock-based compensation
|
| | | | 208 | | | | | | 254 | | | | | | 308 | | |
Gain on the sale of property
|
| | | | (211) | | | | | | — | | | | | | — | | |
Changes in operating assets and liabilities
|
| | | | | | | | | | | | | | | | | | |
Accounts receivable
|
| | | | (748) | | | | | | (196) | | | | | | (113) | | |
Materials and supplies
|
| | | | 339 | | | | | | (1,152) | | | | | | (102) | | |
Prepaid expenses and other assets
|
| | | | 811 | | | | | | (860) | | | | | | 1,982 | | |
Accounts payable and accrued expenses
|
| | | | 755 | | | | | | 1 | | | | | | (37) | | |
Advanced billings and payments
|
| | | | (137) | | | | | | (73) | | | | | | (203) | | |
Other liabilities
|
| | | | (163) | | | | | | (270) | | | | | | (9) | | |
Net cash from operating activities
|
| | | | 16,745 | | | | | | 15,450 | | | | | | 20,760 | | |
Cash flows used in investing activities: | | | | | | | | | | | | | | | | | | | |
Acquisition and construction of property and equipment
|
| | | | (10,036) | | | | | | (12,440) | | | | | | (7,983) | | |
Proceeds from the sale of property
|
| | | | 234 | | | | | | — | | | | | | — | | |
Retirement of investment
|
| | | | (3) | | | | | | (4) | | | | | | (11) | | |
Net cash used in investing activities
|
| | | | (9,805) | | | | | | (12,444) | | | | | | (7,994) | | |
Cash flows used in financing activities: | | | | | | | | | | | | | | | | | | | |
Loan origination costs
|
| | | | (213) | | | | | | (12) | | | | | | (64) | | |
Principal repayment of long-term notes payable
|
| | | | (4,350) | | | | | | (4,350) | | | | | | (11,350) | | |
Interest rate cap
|
| | | | — | | | | | | 4 | | | | | | (4) | | |
CoBank equity account retirement
|
| | | | — | | | | | | — | | | | | | 119 | | |
Tax withholding paid on behalf of employees for restricted stock units
|
| | | | (20) | | | | | | (192) | | | | | | (380) | | |
Proceeds from Paycheck Protection Program loan
|
| | | | 2,975 | | | | | | — | | | | | | — | | |
Net cash used in financing activities
|
| | | | (1,608) | | | | | | (4,550) | | | | | | (11,679) | | |
Net increase (decrease) in cash and cash equivalents
|
| | | | 5,332 | | | | | | (1,544) | | | | | | 1,087 | | |
Cash and cash equivalents, beginning of period
|
| | | | 3,113 | | | | | | 4,657 | | | | | | 3,570 | | |
Cash and cash equivalents, end of period
|
| | | $ | 8,445 | | | | | $ | 3,113 | | | | | $ | 4,657 | | |
Supplemental disclosures of cash flow information: | | | | | | | | | | | | | | | | | | | |
Interest paid
|
| | | $ | 3,502 | | | | | $ | 4,834 | | | | | $ | 5,383 | | |
Income taxes paid (refunded)
|
| | | $ | 884 | | | | | $ | 1,993 | | | | | $ | (502) | | |
Issuance of Class A common stock
|
| | | $ | — | | | | | $ | — | | | | | $ | — | | |
| | |
December 31, 2019
|
| |||||||||||||||
| | |
Carrying Value
|
| |
Accumulated
Amortization |
| |
Net Book
Value |
| |||||||||
Customer relationships
|
| | | $ | 24,025 | | | | | $ | (23,497) | | | | | $ | 528 | | |
Contract relationships
|
| | | | 19,600 | | | | | | (19,600) | | | | | | — | | |
Non-competition
|
| | | | 107 | | | | | | (107) | | | | | | — | | |
Trade name
|
| | | | 23 | | | | | | (21) | | | | | | 2 | | |
Total
|
| | | $ | 43,755 | | | | | $ | (43,225) | | | | | $ | 530 | | |
| | |
December 31, 2020
|
| |||||||||||||||
| | |
Carrying Value
|
| |
Accumulated
Amortization |
| |
Net Book
Value |
| |||||||||
Customer relationships
|
| | | $ | 24,025 | | | | | $ | (23,867) | | | | | $ | 158 | | |
Contract relationships
|
| | | | 19,600 | | | | | | (19,600) | | | | | | — | | |
Non-competition
|
| | | | 107 | | | | | | (107) | | | | | | — | | |
Trade name
|
| | | | 23 | | | | | | (23) | | | | | | — | | |
Total
|
| | | $ | 43,755 | | | | | $ | (43,597) | | | | | $ | 158 | | |
|
2018
|
| | | $ | 408 | | |
|
2019
|
| | | $ | 389 | | |
|
2020
|
| | | $ | 372 | | |
|
2021
|
| | | $ | 158 | | |
|
2022
|
| | | | — | | |
|
Total
|
| | | $ | 158 | | |
| | |
Estimated
Life |
| |
December 31,
|
| |||||||||
| | |
2020
|
| |
2019
|
| |||||||||
Land
|
| | | | | | $ | 1,157 | | | | | $ | 1,164 | | |
Building and improvements
|
| |
20 - 40
|
| | | | 13,187 | | | | | | 13,358 | | |
Telephone equipment
|
| |
6 - 20
|
| | | | 252,967 | | | | | | 246,692 | | |
Cable television equipment
|
| |
7
|
| | | | 13,921 | | | | | | 13,258 | | |
Furniture and equipment
|
| |
8 - 14
|
| | | | 3,082 | | | | | | 3,082 | | |
Vehicles
|
| |
7 - 9
|
| | | | 7,069 | | | | | | 6,961 | | |
Computer software and equipment
|
| |
5 - 7
|
| | | | 20,725 | | | | | | 20,132 | | |
Internet equipment
|
| |
5
|
| | | | 12,581 | | | | | | 11,196 | | |
Total property and equipment
|
| | | | | | | 324,689 | | | | | | 315,843 | | |
Accumulated depreciation and amortization
|
| | | | | | | (265,303) | | | | | | (258,559) | | |
Net property and equipment
|
| | | | | | $ | 59,386 | | | | | $ | 57,284 | | |
| | |
December 31,
|
| |||||||||
| | |
2020
|
| |
2019
|
| ||||||
Carrier access bills receivable
|
| | | $ | 237 | | | | | $ | 235 | | |
National Exchange Carrier Association receivable
|
| | | | 1,233 | | | | | | 1,257 | | |
Receivables from Alabama Service Fund
|
| | | | 34 | | | | | | 40 | | |
Other miscellaneous
|
| | | | 869 | | | | | | 373 | | |
| | | | $ | 2,373 | | | | | $ | 1,905 | | |
| | |
December 31,
|
| |||||||||
| | |
2020
|
| |
2019
|
| ||||||
Investment in CoBank stock
|
| | | $ | 1,192 | | | | | $ | 1,192 | | |
Rental property
|
| | | | 168 | | | | | | 194 | | |
Other miscellaneous
|
| | | | 94 | | | | | | 91 | | |
| | | | $ | 1,454 | | | | | $ | 1,477 | | |
| | |
Current
|
| |
Long-term
|
| |
December 31,
2020 |
| |
December 31,
2019 |
| ||||||||||||
Loan with CoBank, ACB (the “Credit Facility”); variable interest rate of 4.66% and 5.95% at December 31, 2020 and 2019, respectively. Interest is monthly and paid in arrears on the last business day of each month. The Credit Facility is secured by the total assets of the subsidiary guarantors. The unpaid balance is due November 3, 2022.
|
| | | $ | 7,415 | | | | | $ | 58,447 | | | | | $ | 65,862 | | | | | $ | 70,212 | | |
Debt issuance cost
|
| | | | (469) | | | | | | (353) | | | | | | (822) | | | | | | (1,111) | | |
Notes payable, net of debt issuance cost
|
| | | $ | 6,946 | | | | | $ | 58,094 | | | | | $ | 65,040 | | | | | $ | 69,101 | | |
|
2021
|
| | | $ | 7,415 | | |
|
2022
|
| | | | 58,447 | | |
|
2023
|
| | | | — | | |
|
2024
|
| | | | — | | |
|
Total
|
| | | $ | 65,862 | | |
| | |
For the Years Ended December 31,
|
| |||||||||||||||
| | |
2020
|
| |
2019
|
| |
2018
|
| |||||||||
Federal income taxes | | | | | | | | | | | | | | | | | | | |
Current
|
| | | $ | 1,532 | | | | | $ | 443 | | | | | $ | 1,036 | | |
Deferred
|
| | | | (24) | | | | | | 1,717 | | | | | | 898 | | |
Total federal tax expense
|
| | | | 1,508 | | | | | | 2,160 | | | | | | 1,934 | | |
State income taxes | | | | | | | | | | | | | | | | | | | |
Current
|
| | | | 505 | | | | | | 574 | | | | | | 503 | | |
Deferred
|
| | | | 17 | | | | | | (341) | | | | | | 308 | | |
Total state tax expense
|
| | | | 522 | | | | | | 233 | | | | | | 811 | | |
Total income tax expense
|
| | | $ | 2,030 | | | | | $ | 2,393 | | | | | $ | 2,745 | | |
| | |
December 31,
|
| |||||||||
| | |
2020
|
| |
2019
|
| ||||||
Deferred tax liabilities: | | | | | | | | | | | | | |
Amortization
|
| | | $ | (10,913) | | | | | $ | (11,133) | | |
Depreciation
|
| | | | (11,716) | | | | | | (10,934) | | |
Lease asset
|
| | | | (306) | | | | | | (306) | | |
Prepaid expense
|
| | | | (306) | | | | | | (506) | | |
Other
|
| | | | (7) | | | | | | (8) | | |
Total deferred tax liabilities
|
| | | $ | (23,248) | | | | | $ | (22,887) | | |
Deferred tax assets: | | | | | | | | | | | | | |
Deferred compensation
|
| | | $ | 113 | | | | | $ | 147 | | |
Advance payments
|
| | | | 542 | | | | | | 597 | | |
Lease liability
|
| | | | 306 | | | | | | 306 | | |
Bad debt
|
| | | | 67 | | | | | | 77 | | |
Consulting
|
| | | | 499 | | | | | | — | | |
Other
|
| | | | 207 | | | | | | 239 | | |
Total deferred tax assets
|
| | | $ | 1,734 | | | | | $ | 1,366 | | |
| | |
For the Years Ended December 31,
|
| |||||||||||||||
| | |
2020
|
| |
2019
|
| |
2018
|
| |||||||||
Federal income tax at statutory rate
|
| | | | 21% | | | | | | 21% | | | | | | 21% | | |
Federal income tax provision at statutory rate
|
| | | $ | 1,751 | | | | | $ | 2,140 | | | | | $ | 2,565 | | |
State income tax provision, net of federal income tax effects
|
| | | | 434 | | | | | | 548 | | | | | | 641 | | |
Adjustments for prior years
|
| | | | (114) | | | | | | (222) | | | | | | (302) | | |
Other
|
| | | | (41) | | | | | | (73) | | | | | | (159) | | |
Provision for income taxes
|
| | | $ | 2,030 | | | | | $ | 2,393 | | | | | $ | 2,745 | | |
Effective income tax rate
|
| | | | 24.3% | | | | | | 23.5% | | | | | | 22.5% | | |
| | |
For the Years Ended December 31,
|
| |||||||||||||||
| | |
2020
|
| |
2019
|
| |
2018
|
| |||||||||
Weighted average number of common shares outstanding – basic
|
| | | | 3,421,794 | | | | | | 3,412,805 | | | | | | 3,388,624 | | |
Effect of dilutive securities
|
| | | | 18,978 | | | | | | 17,648 | | | | | | 46,238 | | |
Weighted average number of common shares and potential common shares – diluted
|
| | | | 3,440,772 | | | | | | 3,430,453 | | | | | | 3,434,862 | | |
Net income
|
| | | $ | 6,307 | | | | | $ | 7,796 | | | | | $ | 9,467 | | |
Net income per common share – basic
|
| | | $ | 1.84 | | | | | $ | 2.28 | | | | | $ | 2.79 | | |
Net income per common share – diluted
|
| | | $ | 1.83 | | | | | $ | 2.27 | | | | | $ | 2.76 | | |
| | |
For the Years Ended December 31,
|
| |||||||||||||||
| | |
2020
|
| |
2019
|
| |
2018
|
| |||||||||
Local services
|
| | | $ | 18,367 | | | | | $ | 19,313 | | | | | $ | 20,948 | | |
Network access
|
| | | | 19,881 | | | | | | 21,210 | | | | | | 21,662 | | |
Internet
|
| | | | 15,812 | | | | | | 14,646 | | | | | | 15,221 | | |
Transport services
|
| | | | 4,363 | | | | | | 4,236 | | | | | | 4,774 | | |
Video and security
|
| | | | 2,840 | | | | | | 2,735 | | | | | | 2,824 | | |
Managed services
|
| | | | 708 | | | | | | 626 | | | | | | 639 | | |
Total revenues
|
| | | $ | 61,971 | | | | | $ | 62,766 | | | | | $ | 66,068 | | |
| | |
For the Years Ended December 31,
|
| |||||||||||||||
| | |
2020
|
| |
2019
|
| |
2018
|
| |||||||||
Local services
|
| | | $ | 18,367 | | | | | $ | 19,313 | | | | | $ | 20,948 | | |
Network access
|
| | | | 3,218 | | | | | | 4,283 | | | | | | 4,643 | | |
Internet
|
| | | | 15,812 | | | | | | 14,646 | | | | | | 15,221 | | |
Transport services
|
| | | | 4,212 | | | | | | 4,085 | | | | | | 4,623 | | |
Video and security
|
| | | | 2,840 | | | | | | 2,735 | | | | | | 2,824 | | |
Managed services
|
| | | | 708 | | | | | | 626 | | | | | | 639 | | |
Total revenues generated from customers
|
| | | $ | 45,157 | | | | | $ | 45,688 | | | | | $ | 48,898 | | |
| | |
For the Year Ended
December 31, 2020 |
| |
% In-Scope
|
| |
% Total
|
| |||||||||
Month to month (“MTM”) customers
|
| | | $ | 28,515 | | | | | | 64.2% | | | | | | 46.0% | | |
Competitive local exchange carrier (“CLEC”) business customers
|
| | | | 12,716 | | | | | | 28.6 | | | | | | 20.6 | | |
Network access
|
| | | | 2,011 | | | | | | 4.5 | | | | | | 3.2 | | |
Total revenue streams
|
| | | | 43,242 | | | | | | 97.3 | | | | | | 69.8 | | |
Global access*
|
| | | | 1,207 | | | | | | 2.7 | | | | | | 1.9 | | |
Total revenue from contracts with customers
|
| | | | 44,449 | | | | | | 100.0% | | | | | | 71.7 | | |
Managed services**
|
| | | | 708 | | | | | | n/a | | | | | | 1.2 | | |
Total revenue generated from customers
|
| | | | 45,157 | | | | | | n/a | | | | | | 72.9 | | |
Indefeasible rights-of-use agreements**
|
| | | | 151 | | | | | | n/a | | | | | | 0.2 | | |
Network access**
|
| | | | 16,663 | | | | | | n/a | | | | | | 26.9 | | |
Total revenues
|
| | | $ | 61,971 | | | | | | | | | | | | 100.0% | | |
| | |
For the Year Ended
December 31, 2019 |
| |
% In-Scope
|
| |
% Total
|
| |||||||||
MTM customers
|
| | | $ | 27,617 | | | | | | 61.3% | | | | | | 44.0% | | |
CLEC business customers
|
| | | | 13,162 | | | | | | 29.2 | | | | | | 21.0 | | |
Network access
|
| | | | 2,513 | | | | | | 5.6 | | | | | | 4.0 | | |
Total revenue streams
|
| | | | 43,292 | | | | | | 96.1 | | | | | | 69.0 | | |
Global access*
|
| | | | 1,770 | | | | | | 3.9 | | | | | | 2.8 | | |
Total revenue from contracts with customers
|
| | | | 45,062 | | | | | | 100.0% | | | | | | 71.8 | | |
Managed services**
|
| | | | 626 | | | | | | n/a | | | | | | 1.0 | | |
Total revenue generated from customers
|
| | | | 45,688 | | | | | | n/a | | | | | | 72.8 | | |
Indefeasible rights-of-use agreements**
|
| | | | 151 | | | | | | n/a | | | | | | 0.2 | | |
Network access**
|
| | | | 16,927 | | | | | | n/a | | | | | | 27.0 | | |
Total revenues
|
| | | $ | 62,766 | | | | | | | | | | | | 100.0% | | |
| | |
For the Year Ended
December 31, 2018 |
| |
% In-Scope
|
| |
% Total
|
| |||||||||
MTM customers
|
| | | $ | 29,556 | | | | | | 61.3% | | | | | | 44.7% | | |
CLEC business customers
|
| | | | 14,060 | | | | | | 29.1 | | | | | | 21.3 | | |
Network access
|
| | | | 2,711 | | | | | | 5.6 | | | | | | 4.1 | | |
Total revenue streams
|
| | | | 46,327 | | | | | | 96.0 | | | | | | 70.1 | | |
Global access*
|
| | | | 1,932 | | | | | | 4.0 | | | | | | 2.9 | | |
Total revenue from contracts with customers
|
| | | | 48,259 | | | | | | 100.0% | | | | | | 73.0 | | |
Managed services**
|
| | | | 639 | | | | | | n/a | | | | | | 1.0 | | |
Total revenue generated from customers
|
| | | | 48,898 | | | | | | n/a | | | | | | 74.0 | | |
Indefeasible rights-of-use agreements**
|
| | | | 151 | | | | | | n/a | | | | | | 0.2 | | |
Network access**
|
| | | | 17,019 | | | | | | n/a | | | | | | 25.8 | | |
Total revenues
|
| | | $ | 66,068 | | | | | | | | | | | | 100.0% | | |
| | |
Leased Real
Property and Office Facilities |
| |||
2021
|
| | | $ | 460 | | |
2022
|
| | | | 302 | | |
2023
|
| | | | 285 | | |
2024
|
| | | | 153 | | |
2025
|
| | | | 130 | | |
Thereafter
|
| | | | 562 | | |
Total lease payments
|
| | | $ | 1,892 | | |
Less: Interest
|
| | | | (353) | | |
Present value of lease liabilities
|
| | | $ | 1,539 | | |
| | |
Year Ended
December 31, 2020 |
| |||
Cash paid for amounts included in the measurement of lease liabilities: | | | | | | | |
Operating cash outflow from operating leases
|
| | | $ | (488) | | |
Weighted-average remaining lease term – operating leases (in years)
|
| | | | 6.4 | | |
Weighted average discount rate – operating leases
|
| | | | 6.5% | | |
| | |
Year Ended
December 31, 2019 |
| |||
Cash paid for amounts included in the measurement of lease liabilities: | | | | | | | |
Operating cash outflow from operating leases
|
| | | $ | (445) | | |
Weighted-average remaining lease term – operating leases (in years)
|
| | | | 5.4 | | |
Weighted average discount rate – operating leases
|
| | | | 6.5% | | |
| | |
Carrying Value
|
| |
Fair Value
|
| ||||||
Notes payable December 31, 2019
|
| | | $ | 70,212 | | | | | $ | 69,932 | | |
Notes payable December 31, 2020
|
| | | $ | 65,862 | | | | | $ | 65,919 | | |
| | |
RSUs
|
| |
Weighted Average
Grant Date Fair Value |
| ||||||
Outstanding at December 31, 2018
|
| | | | 66,312 | | | | | $ | 9.06 | | |
Granted
|
| | | | — | | | | | $ | — | | |
Vested
|
| | | | (36,847) | | | | | $ | 5.68 | | |
Forfeited or cancelled
|
| | | | (11,817) | | | | | $ | 13.30 | | |
Outstanding at December 31, 2019
|
| | | | 17,648 | | | | | $ | 13.30 | | |
| | |
RSUs
|
| |
Weighted Average
Grant Date Fair Value |
| ||||||
Outstanding at December 31, 2019
|
| | | | 17,648 | | | | | $ | 13.30 | | |
Granted
|
| | | | 14,500 | | | | | $ | 9.22 | | |
Vested
|
| | | | (12,920) | | | | | $ | 13.30 | | |
Forfeited or cancelled
|
| | | | (250) | | | | | $ | 9.22 | | |
Outstanding at December 31, 2020
|
| | | | 18,978 | | | | | $ | 10.24 | | |
| | |
ISOs and NQ
Stock Options |
| |
Weighted Average
Grant Date Fair Value |
| ||||||
Outstanding at December 31, 2018
|
| | | | 50,000 | | | | | $ | 16.97 | | |
Granted
|
| | | | — | | | | | $ | — | | |
Vested
|
| | | | (10,000) | | | | | $ | 16.97 | | |
Forfeited or cancelled
|
| | | | — | | | | | $ | — | | |
Outstanding at December 31, 2019
|
| | | | 40,000 | | | | | $ | 16.97 | | |
| | |
ISOs and NQ
Stock Options |
| |
Weighted Average
Grant Date Fair Value |
| ||||||
Outstanding at December 31, 2019
|
| | | | 40,000 | | | | | $ | 16.97 | | |
Granted
|
| | | | 64,500 | | | | | $ | 9.22 | | |
Vested
|
| | | | (10,000) | | | | | $ | 16.97 | | |
Forfeited or cancelled
|
| | | | (250) | | | | | $ | 9.22 | | |
Outstanding at December 31, 2020
|
| | | | 94,250 | | | | | $ | 11.69 | | |
| | |
First
Quarter |
| |
Second
Quarter |
| |
Third
Quarter |
| |
Fourth
Quarter |
| ||||||||||||
Fiscal 2019: | | | | | | | | | | | | | | | | | | | | | | | | | |
Revenue
|
| | | $ | 15,755 | | | | | $ | 15,658 | | | | | $ | 15,762 | | | | | $ | 15,591 | | |
Operating income
|
| | | $ | 3,763 | | | | | $ | 3,708 | | | | | $ | 3,841 | | | | | $ | 3,532 | | |
Net income
|
| | | $ | 2,281 | | | | | $ | 1,717 | | | | | $ | 1,819 | | | | | $ | 1,979 | | |
Net income per common share-basic
|
| | | $ | 0.67 | | | | | $ | 0.50 | | | | | $ | 0.53 | | | | | $ | 0.58 | | |
Net income per common share-diluted
|
| | | $ | 0.66 | | | | | $ | 0.50 | | | | | $ | 0.53 | | | | | $ | 0.58 | | |
Fiscal 2020: | | | | | | | | | | | | | | | | | | | | | | | | | |
Revenue
|
| | | $ | 15,422 | | | | | $ | 15,468 | | | | | $ | 15,574 | | | | | $ | 15,507 | | |
Operating income
|
| | | $ | 3,305 | | | | | $ | 2,830 | | | | | $ | 2,605 | | | | | $ | 2,802 | | |
Net income
|
| | | $ | 2,218 | | | | | $ | 1,431 | | | | | $ | 1,228 | | | | | $ | 1,430 | | |
Net income per common share-basic
|
| | | $ | 0.65 | | | | | $ | 0.42 | | | | | $ | 0.36 | | | | | $ | 0.42 | | |
Net income per common share-diluted
|
| | | $ | 0.64 | | | | | $ | 0.42 | | | | | $ | 0.36 | | | | | $ | 0.42 | | |
Name
|
| |
Age
|
| |
Position
|
|
Richard A. Clark | | |
56
|
| | Chief Executive Officer, President and Director | |
Curtis L. Garner, Jr. | | |
73
|
| | Chief Financial Officer and Secretary | |
Jerry C. Boles | | |
68
|
| | Senior Vice President and Controller | |
Trina M. Bragdon | | |
54
|
| | General Counsel, Assistant Secretary and Vice President – Human Resources and Regulatory | |
Name
|
| |
Age
|
| |
Position
|
|
Stephen P. McCall | | |
50
|
| | Chairman | |
Barbara M. Dondiego-Stewart | | |
45
|
| | Director | |
Howard J. Haug | | |
70
|
| | Director | |
Dayton R. Judd | | |
49
|
| | Director | |
Brian A. Ross | | |
63
|
| | Director | |
Name and Principal Position
|
| |
Year
|
| |
Salary
($) |
| |
Stock
Awards(3) ($) |
| |
Option(4)
Awards ($) |
| |
Non-Equity
Incentive Plan Compensation(5) |
| |
All Other
Compensation(6) ($) |
| |
Total
($) |
| |||||||||||||||||||||
Richard A. Clark(1)
|
| | | | 2020 | | | | | | 360,001 | | | | | | — | | | | | | 218,500 | | | | | | 252,000 | | | | | | 15,075 | | | | | | 845,576 | | |
Director, President and Chief Executive Officer
|
| | | | 2019 | | | | | | 274,997 | | | | | | — | | | | | | — | | | | | | 128,391 | | | | | | 1,537 | | | | | | 404,925 | | |
Curtis L. Garner, Jr.(2)
|
| | | | 2020 | | | | | | 269,226 | | | | | | 32,270 | | | | | | 15,295 | | | | | | 123,000 | | | | | | 14,096 | | | | | | 453,887 | | |
Chief Financial Officer
and Secretary |
| | | | 2019 | | | | | | 253,180 | | | | | | — | | | | | | — | | | | | | 106,344 | | | | | | 13,894 | | | | | | 373,418 | | |
Jerry C. Boles
|
| | | | 2020 | | | | | | 182,000 | | | | | | 2,305 | | | | | | 1,093 | | | | | | 62,868 | | | | | | 12,085 | | | | | | 260,351 | | |
Senior Vice President and Controller
|
| | | | 2019 | | | | | | 179,892 | | | | | | — | | | | | | — | | | | | | 54,355 | | | | | | 10,288 | | | | | | 244,535 | | |
| | |
Option Awards
|
| |
Stock Awards
|
| ||||||||||||||||||||||||||||||||||||||||||
Name
|
| |
Grant Date
|
| |
Number of
securities underlying unexercised options (#) exercisable |
| |
Number of
securities underlying unexercised options (#) unexercisable |
| |
Equity
incentive plan awards: number of securities underlying unexercised unearned options (#) |
| |
Option
exercise price ($) |
| |
Option
expiration date |
| |
Number of
Shares or Units of Stock That Have Not Vested (#) |
| |
Market
Value of Shares or Units of Stock That Have Not Vested(9) ($) |
| ||||||||||||||||||||||||
Richard A. Clark
|
| | | | 10/15/2018 | | | | | | — | | | | | | 50,000(1) | | | | | | — | | | | | | 16.97 | | | | | | 10/15/2028 | | | | | | — | | | | | | — | | |
| | | | | 1/2/2020 | | | | | | — | | | | | | 50,000(2) | | | | | | — | | | | | | 9.22 | | | | | | 1/2/2030 | | | | | | — | | | | | | — | | |
Curtis L. Garner, Jr.
|
| | | | 1/2/2020 | | | | | | — | | | | | | 3,500(3) | | | | | | — | | | | | | 9.22 | | | | | | 1/2/2030 | | | | | | — | | | | | | — | | |
| | | | | 5/11/2018 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 2,107(4) | | | | | | 21,091 | | |
| | | | | 1/2/2020 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 3,500(5) | | | | | | 35,035 | | |
Jerry C. Boles
|
| | | | 1/2/2020 | | | | | | — | | | | | | 250(6) | | | | | | — | | | | | | 9.22 | | | | | | 1/2/2030 | | | | | | — | | | | | | — | | |
| | | | | 5/11/2018 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 1,089(7) | | | | | | 10,901 | | |
| | | | | 1/2/2020 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 250(8) | | | | | | 2,503 | | |
| | | | | |
Type of
Termination of Employment(1) |
| |||||||||||||||
Name (Position)
|
| |
Type of
Termination Payment |
| |
Involuntary
Termination Without Cause(2) |
| |
Death or
Disability |
| |
Termination
Upon a Change of Control |
| |||||||||
Richard A. Clark
(Director, Chief Executive Officer) |
| |
Annual Bonus
|
| | | $ | 210,000 | | | | | $ | 210,000 | | | | | $ | 210,000 | | |
|
Cash Severance
|
| | | | 350,000 | | | | | | 350,000 | | | | | | 350,000 | | | ||
|
Premium Cost
for Welfare and enefit Plans |
| | | | 4,164 | | | | | | 4,164 | | | | | | 4,164 | | | ||
| | | | | | | $ | 564,164 | | | | | $ | 564,164 | | | | | $ | 564,164 | | |
Curtis L. Garner, Jr.
(Chief Financial Officer and Secretary) |
| |
Annual Bonus
|
| | | $ | 90,303 | | | | | $ | 90,303 | | | | | $ | 90,303 | | |
|
Cash Severance
|
| | | | 250,000 | | | | | | 250,000 | | | | | | 250,000 | | | ||
| | | | | | | $ | 340,303 | | | | | $ | 340,303 | | | | | $ | 340,303 | | |
Jerry C. Boles
(Senior Vice President and Controller) |
| |
Annual Bonus
|
| | | $ | 26,195 | | | | | $ | — | | | | | $ | 26,195 | | |
|
Cash Severance
|
| | | | 84,500 | | | | | | — | | | | | | 84,500 | | | ||
| | | | | | | $ | 110,695 | | | | | $ | — | | | | | $ | 110,695 | | |
Name
|
| |
Fees Earned or Paid
in Cash ($) |
| |
Total
($) |
| ||||||
Barbara M. Dondiego-Stewart
|
| | | $ | 73,625 | | | | | $ | 73,625 | | |
Norman C. Frost
|
| | | $ | 30,806 | | | | | $ | 30,806 | | |
Howard J. Haug
|
| | | $ | 87,000 | | | | | $ | 87,000 | | |
Dayton R. Judd
|
| | | $ | 71,000 | | | | | $ | 71,000 | | |
Stephen P. McCall
|
| | | $ | 94,000 | | | | | $ | 94,000 | | |
Brian A. Ross
|
| | | $ | 77,688 | | | | | $ | 77,688 | | |
Gary L. Sugarman
|
| | | $ | 30,870 | | | | | $ | 30,870 | | |
Plan category
|
| |
Number of securities
to be issued upon exercise of outstanding options, warrants and rights |
| |
Weighted-average
exercise price of outstanding options, warrants and rights |
| |
Number of securities
remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) |
| |||||||||
| | |
(a)
|
| |
(b)
|
| |
(c)
|
| |||||||||
Equity compensation plans approved by stockholders
|
| | | | 133,170(1) | | | | | | 11.58(2) | | | | | | 31,975(3) | | |
Equity compensation plans not approved by stockholders
|
| | | | — | | | | | | — | | | | | | — | | |
Total
|
| | | | 133,170 | | | | | | 11.58 | | | | | | 31,975 | | |
| | |
Shares Beneficially Owned
|
| |||||||||
Name
|
| |
Number
|
| |
%(6)
|
| ||||||
Ira Sochet(1)
|
| | | | 1,696,391 | | | | | | 49.3 | | |
Jerry C. Boles
|
| | | | 17,491 | | | | | | * | | |
Richard A. Clark(2)
|
| | | | 30,000 | | | | | | * | | |
Barbara M. Dondiego-Stewart
|
| | | | 851 | | | | | | * | | |
Curtis L. Garner, Jr.(3)
|
| | | | 40,658 | | | | | | 1.2 | | |
Howard J. Haug(4)
|
| | | | 8,140 | | | | | | * | | |
Dayton R. Judd(5)
|
| | | | 90,361 | | | | | | 2.6 | | |
Stephen P. McCall
|
| | | | 9,893 | | | | | | * | | |
Brian A. Ross
|
| | | | 11,559 | | | | | | * | | |
All directors and executive officers as a group (9 persons)(2)(3) (4) (5)
|
| | | | 176,317 | | | | | | 6.2 | | |
| | |
2019
|
| |
2020
|
| ||||||
Audit Fees
|
| | | $ | 394,778 | | | | | $ | 389,412 | | |
Audit-Related Fees
|
| | | | — | | | | | | — | | |
Tax Fees
|
| | | | 6,420 | | | | | | 6,480 | | |
All Other Fees
|
| | | | — | | | | | | — | | |
Total Fees
|
| | | $ | 401,198 | | | | | $ | 395,892 | | |
| | | | | 30 | | | |
| | | | | 32 | | | |
| | | | | 33 | | | |
| | | | | 34 | | | |
| | | | | 35 | | | |
| | | | | 36 | | |
Signature
|
| |
Title
|
| |
Date
|
|
/s/ Richard A. Clark
Richard A. Clark
|
| |
President, Chief Executive Officer and Director
(Principal Executive Officer) |
| | March 16, 2021 | |
/s/ Curtis L. Garner, Jr.
Curtis L. Garner, Jr.
|
| |
Chief Financial Officer
(Principal Financial and Accounting Officer) |
| | March 16, 2021 | |
/s/ Stephen P. McCall
Stephen P. McCall
|
| | Chairman and Director | | | March 16, 2021 | |
/s/ Barbara Dondiego-Stewart
Barbara Dondiego-Stewart
|
| | Director | | | March 16, 2021 | |
/s/ Howard J. Haug
Howard J. Haug
|
| | Director | | | March 16, 2021 | |
| | | | | | | |
/s/ Dayton R. Judd
Dayton R. Judd
|
| | Director | | | March 16, 2021 | |
/s/ Brian A. Ross
Brian A. Ross
|
| | Director | | | March 16, 2021 | |
EXACT NAME OF SUBSIDIARY
|
| |
STATE OF ORGANIZATION
|
|
Blountsville Telephone LLC | | |
Alabama
|
|
Brindlee Mountain Telephone LLC | | |
Alabama
|
|
CRC Communications LLC | | |
Delaware
|
|
Granby Telephone LLC | | |
Massachusetts
|
|
Hopper Telecommunications LLC | | |
Alabama
|
|
I-Land Internet Services LLC | | |
Missouri
|
|
Mid-Maine Telecom LLC | | |
Maine
|
|
Mid-Maine Telplus LLC | | |
Maine
|
|
Otelco Mid-Missouri LLC | | |
Missouri
|
|
Otelco Telecommunications LLC | | |
Delaware
|
|
Otelco Telephone LLC | | |
Delaware
|
|
Pine Tree Telephone LLC | | |
Maine
|
|
Saco River Telephone LLC | | |
Delaware
|
|
Shoreham Telephone LLC | | |
Delaware
|
|
War Telephone LLC | | |
Delaware
|
|
|
/s/ Richard A. Clark
Richard A. Clark
President & Chief Executive Officer |
| | | |
|
/s/ Curtis L. Garner, Jr.
Curtis L. Garner, Jr.
Chief Financial Officer |
| | | |
|
/s/ Richard A. Clark
Richard A. Clark
|
| | | |
|
/s/ Curtis L. Garner, Jr.
Curtis L. Garner, Jr.
Chief Financial Officer March 16, 2021 |
| | | |
Consolidated Balance Sheets (Parentheticals) - USD ($) $ in Thousands |
Dec. 31, 2020 |
Dec. 31, 2019 |
---|---|---|
Allowance for doubtful accounts | $ 232 | $ 209 |
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) | 3,421,794 | 3,412,805 |
Common stock, outstanding (in shares) | 3,421,794 | 3,412,805 |
Consolidated Statements of Operations - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Revenues | $ 61,971 | $ 62,766 | $ 66,068 |
Operating expenses | |||
Cost of services | 30,251 | 30,075 | 30,592 |
Selling, general and administrative expenses | 11,869 | 10,204 | 10,451 |
Depreciation and amortization | 8,309 | 7,643 | 7,232 |
Total operating expenses | 50,429 | 47,922 | 48,275 |
Income from operations | 11,542 | 14,844 | 17,793 |
Other income (expense) | |||
Interest expense | (4,025) | (5,271) | (5,844) |
Other income | 820 | 616 | 263 |
Total other expense | (3,205) | (4,655) | (5,581) |
Income before income tax expense | 8,337 | 10,189 | 12,212 |
Income tax expense | (2,030) | (2,393) | (2,745) |
Net income | $ 6,307 | $ 7,796 | $ 9,467 |
Weighted average number of common shares outstanding: | |||
Basic (in shares) | 3,421,794 | 3,412,805 | 3,388,624 |
Diluted (in shares) | 3,440,772 | 3,430,453 | 3,434,862 |
Basic net income per common share (in dollars per share) | $ 1.84 | $ 2.28 | $ 2.79 |
Diluted net income per common share (in dollars per share) | $ 1.83 | $ 2.27 | $ 2.76 |
Note 1 - Nature of Business |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2020 | |||
Notes to Financial Statements | |||
Nature of Operations [Text Block] |
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 internet access; cable 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, Maine, Massachusetts, Missouri, Vermont, and West Virginia and business customers throughout Maine and New Hampshire. 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.Stockholder-approved merger transaction On July 27, 2020, Otelco filed a Current Report on Form 8 -K with the Securities and Exchange Commission (the “SEC”) in connection with the proposed acquisition of the Company by Future Fiber FinCo, Inc., a Delaware corporation (“Parent”), pursuant to an Agreement and Plan of Merger, dated as of July 26, 2020 ( as may be amended from time to time, the “Merger Agreement”), by and among the Company, Parent and Olympus Merger Sub, Inc., a Delaware corporation and a wholly owned subsidiary of Parent (“Merger Sub”), providing for the merger of Merger Sub with and into the Company (the “Merger”), with the Company continuing as the surviving corporation of the Merger and a wholly owned subsidiary of Parent. On August 20, 2020, the Company filed with the SEC its preliminary proxy statement on Schedule 14A (the “Preliminary Proxy Statement”), and on September 9, 2020, the Company filed with the SEC its definitive proxy statement on Schedule 14A (the “Definitive Proxy Statement”), in each case relating to the special meeting of stockholders of the Company that was held on October 9, 2020 to, among other things, vote on a proposal to adopt the Merger Agreement.On October 9, 2020, Otelco's stockholders adopted the Merger Agreement and approved the Merger. The transaction is now expected to close in the second quarter of 2021, following federal and state regulatory approvals.On November 3, 2020, the Company entered into a contract with Parent to perform network design and engineering services for Parent in new fiber markets.COVID- 19 A novel strain of coronavirus (COVID- 19 ) was first identified in December 2019, and subsequently declared a global pandemic by the World Health Organization on March 11, 2020. As a result of the outbreak, companies have experienced disruptions in their operations and in markets served. The Company instituted numerous precautionary measures intended to help ensure the well-being of its employees, continue providing essential telecommunications services to its customers and minimize business disruption. As COVID-19 restrictions had been eased in some states, the Company began having employees who had been working from home since March 2020 return to their normal work locations while continuing to empower the technicians to reschedule any in-person installation or repair if they determine that circumstances at the location present a health risk. During the second half of 2020, the Company saw customer calls for new and changed service, payment arrangements and service troubles begin to trend toward pre-COVID-19 levels. As a result of the measures implemented, no significant adverse impact on results of operations through and financial position at December 31, 2020, has occurred as a result of the pandemic. The full extent of the future impacts of the COVID-19 pandemic on its operations is uncertain. An increase of COVID-19 cases in the Company's service areas could have a material adverse impact on its financial results and business, including the timing and ability of the Company to collect accounts receivable and procure materials and services from its suppliers.CARES Act The Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”) was enacted on March 27, 2020. There are several different provisions with the CARES Act that impact income taxes for corporations. The Company has evaluated the tax implications and believes these provisions did not have a material impact to the financial statements.Additionally, the Company applied for and received funds under the Paycheck Protection Program (the “PPP Loan”) in the amount of $2,975,000. The receipt of these funds, and the forgiveness of the loan attendant to these funds, is dependent on the Company having initially qualified for the loan and qualifying for the forgiveness of such loan based on its adherence to the updated forgiveness criteria included in the Paycheck Protection Program Flexibility Act (“PPP Flexibility Act”). The Company submitted its application for loan forgiveness on October 1, 2020. Approval of loan forgiveness by the lender and the Small Business Administration (“SBA”) has not been received.The PPP Loan received by the Company has a two -year term and bears interest at a rate of 1.0% per annum. Under the PPP Flexibility Act, monthly principal and interest payments are deferred until the date the lender receives the applicable forgiven amount from the SBA. The PPP Loan may be prepaid at any time prior to maturity with no prepayment penalties. The promissory note contains events of default and other provisions customary for a loan of this type.The PPP Loan was used to retain Otelco's employees and allow them to be able to continue to provide essential telecommunications and data services for its customers during the initial peak of the COVID- 19 pandemic. These services were and remain critical to customers as they work and live under physical separation and quarantine requirements. Given direction from the Federal Communications Commission (the “FCC”) and state public utilities commissions, the Company made available free or discounted services to families who receive other governmental assistance and delayed for four months service disconnection for non-payment where families and businesses were experiencing COVID-19 financial impacts. Consent of the agent and Required Lenders (as defined in the Credit Facility) under the Credit Facility was obtained in connection with the incurrence of the PPP Loan. The Company will continue to work with federal, state and local governmental bodies to be responsive to COVID-19 guidance and CARES Act requirements. |
Note 2 - Summary of Significant Accounting Policies |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2020 | |||
Notes to Financial Statements | |||
Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block] |
Basis of Presentation and Principles of Consolidation The consolidated financial statements include the accounts of Otelco Inc. and its subsidiaries, all of which are either directly or indirectly wholly owned. These include: Blountsville Telephone LLC (“BTC”); Brindlee Mountain Telephone LLC; CRC Communications LLC; Granby Telephone LLC; Hopper Telecommunications LLC; Mid-Maine Telecom LLC; Mid-Maine TelPlus LLC; Otelco Mid-Missouri LLC and its wholly-owned subsidiary I-Land Internet Services LLC; Otelco Telecommunications LLC; Otelco Telephone LLC; Pine Tree Telephone LLC; Saco River Telephone LLC; Shoreham Telephone LLC; and War Telephone LLC. The accompanying consolidated financial statements include the accounts of Otelco Inc. 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, 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 Accounting Standards Codification (“ASC”) 980, Regulated Operations (“ASC 980” ), as issued by the Financial Accounting Standards Board (the “FASB”). This accounting practice recognizes the economic effects of rate regulation by recording costs and a return on investment as such amounts are recovered through rates authorized by regulatory authorities. Accordingly, ASC 980 requires the Company to depreciate telecommunications property and equipment over the estimated useful lives approved by regulators, which could be different than the estimated useful lives that would otherwise be determined by management. ASC 980 also requires deferral of certain costs and obligations based upon approvals received from regulators to permit recovery of such amounts in future years. Criteria that would give rise to the discontinuance of accounting in accordance with ASC 980 include (1 ) increasing competition restricting the ability of the Company to establish prices that allow it to recover specific costs and (2 ) significant changes in the manner in which rates are set by regulators from cost-based regulation to another form of regulation. The Company periodically reviews the criteria to determine whether the continuing application of ASC 980 is appropriate for its rural local exchange carriers (“RLECs”). As of December 31, 2020, and 2019, 84.6% and 84.3%, 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, other than goodwill, 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 , through 2004. In accordance with 47 CFR 32.2000, the federal regulation governing acquired telecommunications property and equipment, such property and equipment is accounted for at original cost, and depreciation and amortization of property and equipment acquired is credited to accumulated depreciation.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.ASC 350, Intangibles - Goodwill and Other (“ASC 350” ), requires that goodwill be tested for impairment annually, unless potential interim indicators exist that could result in impairment. The Company historically performed an annual step 1 goodwill impairment test that compares the fair value of the reporting unit to the carrying amount. The Company performed a Step 0 impairment test for the year 2020. If the carrying amount exceeds the fair value, an impairment loss is recognized in an amount equal to that excess.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 advanced billings and defers recognition until such revenue is earned. Long distance service is billed to customers in arrears based on actual usage. The Company records unbilled long distance revenue as unbilled revenue when services are rendered. Unlimited long distance in bundles is billed at a flat rate and recognized over the period of time the service is provided.Network access . Network access revenue is derived from several sources. Revenue for interstate access services is received through tariffed access charges filed with the FCC. These access charges are billed by the Company to interstate interexchange carriers and retail voice customers. A portion of the access charge revenue received by the Company is based upon its actual cost of providing interstate access service, plus a return on the investment dedicated to providing that service. The balance of the access charge revenue received by the Company is based upon the nationwide average schedule costs of providing interstate access services. Rates for the Company's competitive subsidiaries are set by FCC rule to be no more than the interconnecting interstate rate of the predominant local carrier. The Company also receives Connect America Fund (“CAF”) revenues from the Universal Service Administrative Company (“USAC”). The CAF revenues are known as Connect America Fund–Intercarrier Compensation (“CAF-ICC”), A-CAM, and Connect America Fund–Broadband Loop Support (“CAF-BLS”). CAF-ICC is based on the Company's frozen traffic sensitive rate of return, less access charges billed to interexchange carriers and end user retail customers. A-CAM revenues are based on the FCC's model, which calculates the cost to provide broadband services to rural areas of each state. All of the Company's RLECs receive A-CAM revenues.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 (the “APSC”), the Maine Public Utilities Commission (the “MPUC”), the Massachusetts Department of Telecommunications and Cable (the “MDTC”), the Missouri Public Service Commission (the “MPSC”), the New Hampshire Public Utilities Commission (the “NHPUC”), the Vermont Public Utility Commission (the “VPUC”) and the West Virginia Public Service Commission (the “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, VPUC 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 2013. Beginning in 2014, the interstate and intrastate rates began being reduced over a six year period 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 has been 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 USAC. The FCC's Rate-of-Return Universal Service Fund Reform order, issued in March 2016, reduced the authorized rate-of-return by 25 basis points in 2016 and will reduce the authorized rate-of-return by 25 basis points in each subsequent year until 2021. The FCC's Intercarrier Compensation order, issued in October 2011, capped each year's revenue requirement (rate of return and reimbursement of costs) at 95.0% of the previous year's revenue requirement. Such revenues amounted to 23.9%, 23.3%, and 21.3% of the Company's total revenues for the years ended December 31, 2020, 2019, and 2018, respectively.Internet, transport service, cable and satellite television and cloud hosting and managed services . Internet, transport service, cable and satellite television and cloud hosting and managed services revenues are recognized when services are rendered. Operating revenues from the lease of dark fiber covered by indefeasible rights-of-use agreements are recorded as earned. In some cases, the entire lease payment is received at inception of the lease and recognized ratably over the lease term after recognition of expenses associated with lease inception. The Company has deferred revenue in the consolidated balance sheets as of December 31, 2020, and 2019, of $2.0 million and $2.1 million, respectively, related to transport services, which is included as part of advanced billing and payments. The Company has deferred revenue in the consolidated balance sheets as of December 31, 2020, and 2019, of $188 thousand and $229 thousand, respectively, related to other services, which is included as part of advanced billing and payments.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 realizable 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 for Alabama locations, while the other regulated locations use similar useful lives as Alabama. 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 . The amount of the impairment recognized is determined by estimating the fair value of the assets and recording a loss for the excess of the carrying value over the fair value.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”. Deferred financing and loan costs are presented in the balance sheet as a direct deduction from the related debt liability. When amendments to debt agreements are considered to extinguish existing debt per guidance included in ASC 470, Debt , the remaining deferred financing costs are expensed at the time of amendment.Income Taxes The Company accounts for income taxes using the asset and liability approach in accordance with guidance included in ASC 740, Income Taxes (“ASC 740” ). The asset and liability approach requires the recognition of deferred tax liabilities and assets for the expected future tax consequences of temporary differences between the carrying amounts and the tax basis of assets and liabilities using enacted tax rates. Any changes in enacted tax rates or tax laws are included in the provision for income taxes in the period of enactment. A valuation allowance is provided when it is more likely than not that some portion or all of the deferred tax assets will not be realized.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, 2020, there was no material 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 2017 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, 2020, and 2019, due to their short term nature. The fair value of debt instruments at December 31, 2020, and 2019, 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 (“ASC 260” ). Under ASC 260, basic and diluted income per share is computed by dividing net income available to stockholders by the weighted average number of common shares and common share equivalents outstanding during the period. Basic income per common share excludes the effect of potentially dilutive securities, while diluted income per common share reflects the potential dilution that would occur if securities or other contracts to issue common shares were exercised for, converted into or otherwise resulted in the issuance of common shares.Recently Adopted Accounting Pronouncements In May 2014, the FASB issued Accounting Standards Update (“ASU”) 2014 -09, Revenue from Contracts with Customers (Topic (“ASU 606 ) 2014 -09” ). This ASU requires that an entity recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This ASU also provides a more robust framework for revenue issues and improves comparability of revenue recognition practices across industries. This ASU was the product of a joint project between the FASB and the International Accounting Standards Board to clarify the principles for recognizing revenue and to develop a common revenue standard. ASU 2014 -09 permits the use of either a retrospective or modified retrospective application. This guidance was to be effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016, with early adoption not permitted. In July 2015, the FASB issued ASU 2015 -14, Revenue from Contracts with Customers (Topic This ASU confirmed a 606 ): Deferral of the Effective Date. one -year delay in the effective date of ASU 2014 -09, making the effective date for the Company the first quarter of fiscal 2018 instead of the first quarter of fiscal 2017. In March 2016, the FASB issued ASU 2016 -08, Revenue from Contracts with Customers (Topic . This ASU is further guidance to ASU 606 ): Principal versus Agent Consideration (Reporting Revenues Gross versus Net)2014 -09, and clarifies principal versus agent considerations. In April 2016, the FASB issued ASU 2016 -10, Revenue from Contracts with Customers (Topic This ASU is also further guidance to ASU 606 ): Identifying Performance Obligations and Licensing. 2014 -09, and clarifies the identification of performance obligations. In May 2016, the FASB issued ASU 2016 -12, Revenue from Contracts with Customers (Topic This ASU is also further guidance to ASU 606 ): Narrow-Scope Improvements and Practical Expedients. 2014 -09, and clarifies assessing the narrow aspects of recognizing revenue. In December 2016, the FASB issued ASU 2016 -20, Technical Corrections and Improvements to Topic This ASU is also further guidance to ASU 606, Revenue from Contracts with Customers. 2014 -09, and clarifies technical corrections and improvements for recognizing revenue.In January 2017, the FASB issued ASU 2017 -03, Accounting Changes and Error Corrections (Topic (“ASU 250 ) and Investments-Equity Method and Joint Ventures (Topic 323 )2017 -03” ). This ASU requires registrants to evaluate the impact ASU 2014 -09 will have on financial statements and adequately disclose this information to assist the reader in assessing the significance of ASU 2014 -09 on the financial statements when adopted. The Company commenced its assessment of ASU 2014 -09 beginning in June 2016. This assessment included analyzing ASU 2014 -09's impact on the Company's various revenue streams, comparing the Company's historical accounting policies and practices to the requirements of ASU 2014 -09, and identifying potential differences from applying the requirements of ASU 2014 -09 to the Company's contracts. The Company has used a five -step process to identify the contract with the customer, identify the performance obligations, determine the transaction price, allocate the transaction price to the performance obligations and recognize revenue when or as the performance obligations are satisfied. The Company has implemented the appropriate changes to its business processes, systems and controls to support revenue recognition and disclosures under ASU 2014 -09. The Company adopted ASU 2014 -09 at the beginning of its 2018 fiscal year using the modified retrospective method applied to those contracts which were not completed as of January 1, 2018. Prior period amounts have not been adjusted and continue to be reported in accordance with historic accounting standards in effect during those periods. The adoption of ASU 2014 -09 and related amendments did not have a material impact on the Company's consolidated financial statements.In February 2016, the FASB issued ASU 2016 -02, Leases (Topic (“ASU 842 ) 2016 -02” ). This ASU requires lessees to recognize most leases on the balance sheet. The provisions of this guidance are effective for annual periods beginning after December 15, 2018, and interim periods within those years, with early adoption permitted. In January 2017, the FASB issued ASU 2017 -03, which requires registrants to evaluate the impact ASU 2016 -02 will have on financial statements and adequately disclose this information to assist the reader in assessing the significance of ASU 2016 -02 on the financial statements when adopted. In January 2018, the FASB issued ASU 2018 -01, Leases (Topic . This ASU provides an optional transition practical expedient to 842 ): Land Easement Practical Expedient for Transition to Topic 842 not evaluate under ASU 2016 -02 existing or expired land easements that were not previously accounted for as leases under ASC Topic 840, Leases . An entity that elects this practical expedient should evaluate new or modified land easements under ASU 2016 -02 beginning at the date that the entity adopts ASU 2016 -02. In July 2018, the FASB issued ASU 2018 -10, Codification Improvements to Topic which provides improvements and clarifications for ASU 842, Leases, 2016 -02. In July 2018, the FASB issued ASU 2018 -11, Leases (Topic (“ASU 842 ): Targeted Improvements 2018 -11” ). This ASU provides an additional transition method by allowing entities to initially apply the new lease standard at the date of adoption with a cumulative effect adjustment to the opening balances of retained earnings in the period of adoption. This ASU also gives lessors the option of electing, as a practical expedient by class of underlying asset, not to separate the lease and non-lease components of a contract when those lease contracts meet certain criteria. In December 2018, the FASB issued ASU 2018 -20, Narrow-Scope Improvements for Lessors. This ASU clarifies lessor treatment for sales taxes and other similar taxes collected from lessees, certain lessor costs, and recognition of variable payments for contracts with lease and non-lease components. In March 2019, the FASB issued ASU 2019 -01, Codification Improvements. This ASU clarifies determining the fair value of the underlying asset by lessors that are not manufacturers or dealers, presentation on the statement of cash flows for sales-type and direct financing leases, and transition disclosures related to Topic 250, Accounting Changes and Error Corrections. The Company has completed its evaluation of the requirements of this guidance and implemented the processes necessary to adopt ASU 2016 -02, as amended. The Company has elected certain practical expedients available at adoption. The Company elected the package of practical expedients upon transition not to reassess whether expired or existing contracts contain leases under the new definition of a lease; not to reassess the lease classification for expired or existing leases; and not to reassess whether previously capitalized initial direct costs would qualify for capitalization under ASU 2016 -02. In evaluating certain equipment rental arrangements such as cable, internet and security service contracts, the Company considered the practical expedient that allows lessors to elect, by class of underlying asset, to not separate non-lease components from the associated lease components if the non-lease components otherwise would be accounted for in accordance with the new revenue recognition standard. The Company elected this practical expedient as the following two criteria are met; the lease component and the associated non-lease components have the same timing and pattern of transfer; and the lease component, if accounted for separately, would be classified as an operating lease. The Company elected to adopt the new standard using the transition method provided by ASU 2018 -11; therefore, prior periods will not be restated. The Company has determined that the impact of adoption is limited to real property leases and is consistent with industry practices. Adoption of the new standard resulted in the Company recognizing an aggregate of $1,073,919 in lease liabilities and corresponding right of use (“ROU”) assets and no impact on the opening retained earnings balances. The adoption of ASU 2016 -02 had an immaterial impact on the consolidated statements of operations and consolidated statements of cash flows for the year ended December 31, 2019. In January 2017, the FASB issued ASU 2017 -04, Intangibles-Goodwill and Other (Topic (“ASU 350 ) 2017 -04” ). The objective of this ASU is to simplify how an entity is required to test goodwill for impairment by eliminating Step 2 from the goodwill impairment test. ASU 2017 -04 is effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company adopted this ASU and that adoption did not have a material impact on the Company's consolidated financial statements.Recent Accounting Pronouncements During 2019, the FASB issued ASUs 2019 -01 through 2019 -12 and, during 2020, the FASB issued ASUs 2020 -01 through 2020 -11. Except for the ASUs discussed above and below, these ASUs provide technical corrections or simplifications to existing guidance and to specialized industries or entities and therefore have minimal, if any, impact on the Company.In November 2018, the FASB issued ASU 2018 -19, Codification Improvements to Topic –326, Financial Instruments Credit Losses (“ASU 2018 -19” ). This ASU improves the disclosure requirements in ASU 2016 -13, Financial Instruments - Credit Losses (Topic (“ASU 326 ): Measurement of Credit Losses on Financial Instruments2016 -13” ) issued in June 2016, to make a cumulative-effect adjustment to opening retained earnings as of the beginning of the first reporting period in which the amendments are effective. The effective date and transition requirements for the amendments in this update are the same as the effective dates and transition requirements in ASU 2016 -13, as amended by ASU 2018 -19. In April 2019, the FASB issued ASU 2019 -04, Codification Improvements to Topic –326, Financial Instruments Credit Losses, Topic This ASU improves the disclosure requirements in ASU 815, Derivatives and Hedging, and Topic 825, Financial Instruments.2016 -13 issued in June 2016, to allow the measurement of allowance for credit losses on accrued interest receivable balances separately from other components of the amortized cost basis of associated financial assets. In May 2019, the FASB issued ASU 2019 -05, Financial Instruments – Credit Losses (Topic This ASU improves the disclosure requirements in ASU 326 ).2016 -13 issued in June 2016, to allow companies to irrevocably elect, upon adoption of ASU 2016 -13, the fair value option on financial instruments that (1 ) were previously recorded at amortized cost and (2 ) are within the scope of ASC 326 -20 if the instruments are eligible for the fair value option under ASC 825 -10. The effective date and transition requirements for the amendments in this update are the same as the effective dates and transition requirements in ASU 2016 -13, as amended by ASU 2018 -19. In November 2019, the FASB issued ASU 2019 -10, Financial Instruments – Credit Losses (Topic (“ASU 326 ), Derivatives and Hedging (Topic 815 ), and Leases (Topic 842 ) 2019 -10” ). This ASU defers certain major updates not yet effective due to the challenge's private companies, smaller public companies, and not -for-profit organizations are having with implementation. In November 2019, the FASB issued ASU 2019 -11, Codification Improvements to Topic –326, Financial Instruments Credit Losses. The amendments in this ASU clarify and address stakeholders' specific issues about certain aspects in update 2016 -13. In February 2020, the FASB issued ASU 2020 -02, Financial Instruments – Credit Losses (Topic The amendments in this ASU address the methodology for the allowance for credit losses. ASU 326 ) and Leases (Topic 842 ). 2019 -10 has deferred the effective date for credit losses for smaller reporting companies to fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. An entity is still permitted to early adopt as of the fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company does not expect this ASU to have a material impact on its consolidated financial statements.In December 2019, the FASB issued ASU 2019 -12, Income Taxes (Topic (“ASU 740 ) 2019 -12” ). This ASU simplifies the accounting for income taxes by removing certain exceptions to the general principles in Topic 740. The amendments in ASU 2019 -12 are effective for public companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. Early adoption of the amendments is permitted, including adoption in any interim period for which financial statements have not yet been issued. An entity that elects to early adopt the amendments in an interim period should reflect any adjustments as of the beginning of the annual period that includes that interim period. Additionally, an entity that elects early adoption must adopt all the amendments in the same period. The Company does not expect this ASU to have a material impact on its consolidated financial statements. |
Note 3 - Goodwill and Intangible Assets |
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Goodwill and Intangible Assets Disclosure [Text Block] |
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 has historically considered its three regions (Alabama, Missouri, and New England) to be reporting units for purposes of goodwill impairment testing. The Company changed its approach to managing its business from three semi-autonomous regions to a functional management approach with leadership for functions spanning the whole Company. In 2018, the Company implemented a single billing and operations support system covering all customers. Additionally, a chief operating officer position was established and filled during fourth quarter 2018 to lead all operations. Therefore, the Company measures goodwill for impairment as a single reporting unit beginning in 2019. The Company performed its annual goodwill impairment testing as of October 1, 2020. Beginning in 2011, FASB allowed companies to first assess qualitative factors to determine whether there is more than a 50% likelihood that the fair value of a reporting unit is less than its carrying value. The following categories of events and conditions were evaluated to determine their impact on goodwill, in light of the coronavirus pandemic, governmental responses to the pandemic and the changes in the Company's revenue and stock price:
After reviewing the company-specific and market factors, the Company confirms that, as of October 1, 2020, the Company's goodwill was not impaired. The Company determined that no events or circumstances from October 1, 2020, through December 31, 2020, indicated that a further assessment was necessary.There was no 2020 or 2019, with a balance of $45.0 December 31, 2020, and 2019. The Company also found no December 31, 2020, and 2019, is due to the amortization for each current year.Intangible assets are summarized as follows (in thousands):
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, 2020, for each of the following periods (in thousands):
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Property, Plant and Equipment Disclosure [Text Block] |
A summary of property and equipment is shown as follows (in thousands, except estimated life):
Depreciation expense for the years ended December 31, 2020, 2019 and 2018, was $7,994 thousand, $7,344 thousand and $6,906 thousand, respectively. Amortization expense for telephone plant adjustment was $(57 ) thousand, $(90 ) thousand and $(82 ) thousand for the years ended December 31, 2020, 2019 and 2018, respectively. |
Note 5 - Other Accounts Receivable |
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Financing Receivables [Text Block] |
Other accounts receivable consist of the following (in thousands) as of:
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Note 6 - Investments |
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Investment Holdings [Text Block] |
Investments consist of the following (in thousands) as of:
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 previously had and currently has debt. These certificates yield dividends on an annual basis, and the investment is redeemed ratably subsequent to the repayment of the debt. The Company purchased a two year interest rate cap associated with the Credit Facility on February 26, 2018. It had a value of $4 thousand as of December 31, 2018, and a value of zero as of December 31, 2019. The interest rate cap expired February 25, 2020. |
Note 7 - Notes Payable |
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Debt Disclosure [Text Block] |
Notes payable consists of the following (in thousands, except percentages) as of:
Associated with the Credit Facility, the Company has $2.3 million in deferred financing cost including $212 thousand incurred during first quarter 2020. The Company and its lender for the Credit Facility amended the agreement effective December 31, 2019, to change covenant measurements in recognition of the Company's plans for increased investment in fiber and other network improvements intended to increase broadband speeds for its customers. Amortization expense for the deferred financing cost associated with the Credit Facility was $502 thousand, $452 thousand and $476 thousand for the years ended December 31, 2020, 2019 and 2018, respectively, which is included in interest expense.The revolving credit facility associated with the Company's Credit Facility had a maximum borrowing capacity of $5.0 million on December 31, 2020. The revolving credit facility is available until November 3, 2022. There was no December 31, 2020 or 2019. The Company pays a commitment fee at an initial rate of 0.50% per annum, payable quarterly in arrears, on the unused portion of the revolver loan under the Credit Facility. The rate declined from 0.50% per annum to 0.38% per annum on October 22, 2018. The rate fluctuated up and down during the twelve months ended December 31, 2020 from 0.38% per annum for one hundred and eighty-five days to 0.50% per annum for one hundred and eighty days. The commitment fee expense was $23 thousand, $19 thousand and $24 thousand for the years ended December 31, 2020, 2019 and 2018, respectively.Maturities of notes payable for the next four years, are as follows (in thousands):
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, 2020, the Company was in compliance with all such covenants and restrictions. |
Note 8 - Income Tax |
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Income Tax Disclosure [Text Block] |
Income tax expense for the years ended December 31, 2020, 2019, and 2018 is summarized below (in thousands):
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, 2020, and 2019, are presented below (in thousands):
As of December 31, 2020, and 2019, the Company had no no December 31, 2020, or December 31, 2019. The Company establishes valuation allowances when necessary to reduce deferred tax assets to amounts expected to be realized. As of December 31, 2020, the Company had no The effective income tax rates as of December 31, 2020, 2019, and 2018, were 24.3%, 23.5% and 22.5%, 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, 2020, 2019, and 2018, the Company did not identify any material uncertain tax positions. Tax years from 2017 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, 2020, 2019, and 2018. The reasons for the differences are presented below (in thousands, except percentages):
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Note 9 - Employee Benefit Program |
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Retirement Benefits [Text Block] |
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 $19.5 thousand, $18.5 thousand and $18.5 thousand for 2020, 2019 and 2018, respectively. The Company matched the employee's contribution up to 4.5% of the employee's annual compensation during 2020, 2019 and 2018. For the years ended December 31, 2020, 2019, and 2018, the total contributions and expense associated with this plan was $513 thousand, $449 thousand and $470 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. The NTCA has sponsored the RSP since 1959. Currently, the Company represents approximately 0.3% of the employers and less than 0.1% of the employees covered by the RSP. As of January 1, 2019, the RSP's ongoing funded status was 100.1%. Program assets as of October 31, 2020 were $2.1 billion, placing the RSP among the 500 largest pension plans in the United States. Participation in the RSP requires a minimum employee contribution of 1.0% of their annual compensation. For each of 2020, 2019 and 2018, the Company contributed 4.5% 401 (k) of the Internal Revenue Code to which the Company made no 2020, 2019 or 2018. The employee can make voluntary contributions to the SP as desired. For the years ended December 31, 2020, 2019, and 2018, the total expense associated with these plans was $19 thousand, $19 thousand and $21 thousand, respectively. |
Note 10 - Net Income Per Common Share |
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Earnings Per Share [Text Block] |
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”) be issued. A reconciliation of the common shares for purposes of the calculation of the Company's basic and diluted net income per common share is as follows (weighted average number of common shares outstanding in whole numbers and net income in thousands):
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Note 11 - Revenue Streams and Concentrations |
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Revenue from Contract with Customer [Text Block] |
Revenue Streams The Company identifies its revenue streams with similar characteristics as follows (in thousands):
ASU 2014 -09 requires that an entity recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. As stated above in Note 2, Summary of Significant Accounting Policies – Recently Adopted Accounting Pronouncements , the Company has used a five -step process to identify the contract with the customer, identify the performance obligations, determine the transaction price, allocate the transaction price to the performance obligations and recognize revenue when or as the performance obligations are satisfied. The majority of the Company's revenue is recognized over time as the service is transferred to the customer. For certain other services, such as unlimited long distance, revenue is recognized over the period of time the service is provided.The following table identifies revenue generated from customers (in thousands):
The following table summarizes the revenue generated from contracts with customers among each revenue stream for the years ended December 31, ( in thousands, except percentages):
*Fixed fees charged to MTM customers and CLEC business customers. ** Revenue generated from sources not within the scope of ASU 2014 -09. See Note 2, Summary of Significant Accounting Policies – Revenue Recognition, for accounting policies associated with these sources of revenue.
*Fixed fees charged to MTM customers and CLEC business customers. ** Revenue generated from sources not within the scope of ASU 2014 -09. See Note 2, Summary of Significant Accounting Policies – Revenue Recognition, for accounting policies associated with these sources of revenue.
*Fixed fees charged to MTM customers and CLEC business customers. ** Revenue generated from sources not within the scope of ASU 2014 -09. See Note 2, Summary of Significant Accounting Policies – Revenue Recognition, for accounting policies associated with these sources of revenue.Payment terms vary by customer. The Company typically invoices customers in the month following when the service was provided. The term between invoicing and when payment is due is less than a year and is not considered significant. Certain customers are invoiced in advance of the service being provided. Revenue is deferred until the point in time control of the service is transferred to the customer, or over the term the service is provided.Revenue is recognized net of taxes collected on behalf of third parties.As of December 31, 2020, the Company had approximately $6.7 million of unsatisfied performance obligations. As of December 31, 2020, the Company expected to recognize approximately $736 thousand of revenue within the next year and $5.8 million in the next two to five years related to such unsatisfied performance obligations. The Company does not disclose the value of unsatisfied performance obligations for contracts with an original expected life of one year or less or for contracts for which the Company has a right to invoice for services performed.The deferred revenue balance as of September 30, 2020, was $3.6 million. Approximately $1.4 million of revenue from that balance was recognized as revenue during the three months ended December 31, 2020, offset by payments received as of December 31, 2020, in advance of control of the service being transferred to the customer. |
Note 12 - Leases |
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Lessee, Operating Leases [Text Block] |
ASU 2016 -02 requires lessees to recognize most leases on the balance sheet. As stated above in Note 2, Summary of Significant Accounting Policies – Recently Adopted Accounting Pronouncements , the Company has elected certain practical expedients available at adoption. The Company elected the package of practical expedients upon transition not to reassess whether expired or existing contracts contain leases under the new definition of a lease; not to reassess the lease classification for expired or existing leases; and not to reassess whether previously capitalized initial direct costs would qualify for capitalization under ASU 2016 -02. In evaluating certain equipment rental arrangements such as cable, internet and security service contracts, the Company considered the practical expedient that allows lessors to elect, by class of underlying asset, to not separate non-lease components from the associated lease components if the non-lease components otherwise would be accounted for in accordance with the new revenue recognition standard. The Company elected this practical expedient as the following two criteria are met; the lease component and the associated non-lease components have the same timing and pattern of transfer; and the lease component, if accounted for separately, would be classified as an operating lease. The Company elected to adopt the new standard using the transition method provided by ASU 2018 -11; therefore, prior periods will not be restated. The Company has determined that the impact of adoption is limited to real property leases and is consistent with industry practices. This ASU was effective January 1, 2019, the Company recognized an aggregate of $1,073,919 no impact on the opening retained earnings balances.In consideration of whether an agreement contains a lease as defined under ASU 2016 -02, the Company answered these three questions; has an asset been identified, is the asset physically distinct, and does the customer have the right to control the asset. The Company determined based on the three -step questions above, the arrangements pertaining to real property building and office facilities in Alabama, Maine and Massachusetts are within the scope of ASU 2016 -02. In calculating the lease liability, the Company considered the lease term in which the Company would include any periods covered by an option to extend the lease if the lessee is reasonably certain to exercise that option. The Company evaluated factors that might create an economic incentive to exercise options to extend, including contract, asset, entity and market-based factors. The Company determined that there would be no significant relocation and interruption costs associated with moving to alternative space that would disincentivize a move at renewal; therefore, renewals to extend the lease term are not included in the ROU asset and lease liabilities.A lessee may recognize the lease payments in profit or loss on a straight-line basis over the lease term and variable lease payments in the period in which the obligation for those payments is incurred. The accounting policy election for short-term leases shall be made by class of underlying asset to which the right of use relates. A short-term lease is defined as a lease that, at the commencement date, has a lease term of 12 months or less and does not include an option to purchase the underlying asset that the lessee is reasonably certain to exercise. The Company elected to exclude short-term leases from the recognition requirements.In discounting the liability, ASU 2016 -02 indicates that the incremental rate used must be comparable to a rate attributable to a similar amount, for a similar term, and with similar collateral as the assets in the lease. The Company observed that published commercial borrowing rates were generally between 5.0% to 7.0% for loans collateralized by the real estate for terms ranging from 5 -10 years.Maturities of lease liabilities as of December 31, 2020 are as follows (in thousands):
Supplemental cash flow information related to operating leases was as follows (in thousands, except years and percentages):
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Note 13 - Fair Value Measurement |
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Fair Value Disclosures [Text Block] |
The Company adopted ASC 820, Fair Value Measurements and Disclosures (“ASC 820” ), which defines fair value, establishes a framework for measuring fair value and requires disclosures about fair value measurements. The framework that is set forth in this standard is applicable to the fair value measurements where it is permitted or required under other accounting pronouncements.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.
Fair Value of 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 fair values listed below are for complying with ASC 820 and do not appear in the consolidated financial statements. The carrying amounts and estimated fair values of notes payable are as follows (in thousands):
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Note 14 - Commitments and Contingencies |
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Notes to Financial Statements | |||
Commitments and Contingencies Disclosure [Text Block] |
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 VPUC and the WVPSC, relating primarily to rate making and customer service requirements. In addition, the Company may be involved in similar proceedings with interconnection carriers and the FCC. Currently, none of the Company's legal proceedings are expected to have a material adverse effect on the Company's business.On September 1, 2020, a purported stockholder of Otelco filed a putative stockholder class action lawsuit, captioned Patrick Plumley v. Otelco Inc. et. al., No. 1:20 -cv-01165 -UNA, in the United States District Court for the District of Delaware, on behalf of all public stockholders of Otelco against the Company and the members of its Board of Directors (the “PLUMLEY Action”). Thereafter, on September 21, 2020, another purported stockholder of Otelco filed a separate individual lawsuit, captioned Jacob Scheiner IRA v. Otelco Inc., et al., 1:20 -cv-07756 -AJN, in the United States District Court for the Southern District of New York (the “IRA Action” and, together with the PLUMLEY Action, the “Actions”). The Actions generally allege that the Preliminary Proxy Statement or the Definitive Proxy Statement omits certain material information in violation of Section 14 (a) of the Securities Exchange Act of 1934 and Rule 14a -9 promulgated thereunder, and further that the members of the Company's Board of Directors are liable for those omissions under Section 20 (a) of the Securities Exchange Act of 1934. The relief sought in the Actions includes a preliminary and permanent injunction to prevent the completion of the Merger, rescission or rescissory damages if the Merger is completed, costs and attorneys' fees. Both lawsuits have subsequently been withdrawn.While Otelco believes that the disclosures set forth in the Preliminary Proxy Statement and Definitive Proxy Statement complied fully with applicable law, to resolve the alleged stockholders' claims and moot the disclosure claims, to avoid nuisance, potential expense, and delay and to provide additional information to our stockholders, the Company voluntarily supplemented the Definitive Proxy Statement with additional disclosures filed with the SEC on October 1, 2020. Nothing in the supplemental disclosures shall be deemed an admission of the legal necessity or materiality under applicable law of any of the disclosures set forth therein or in the Definitive Proxy Statement. To the contrary, the Company denied all allegations that any additional disclosure was, or is, required. |
Note 15 - Stock Plans |
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Shareholders' Equity and Share-based Payments [Text Block] |
The Company previously granted RSUs underlying 401,111 shares of Class A common stock as of December 31, 2018. These RSUs (or a portion thereof) vest with respect to each recipient over a one to five 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. Of the 401,111 previously granted RSUs, RSUs underlying 334,799 shares of Class A common stock had vested or were cancelled as of December 31, 2018. The previous RSU grants were made primarily to executive-level personnel at the Company and, as a result, no compensation costs have been capitalized. There were no RSUs granted by the Company during 2019. During 2020 there were 14,500 RSUs granted by the Company to fourteen management level employees.The following table summarizes RSU activity for the year ended December 31, 2019:
The following table summarizes RSU activity for the year ended December 31, 2020:
Stock-based compensation expense related to RSUs was $65 thousand and $167 thousand for the years ended December 31, 2020, and 2019, respectively. Stock-based compensation related to RSUs is recognized over the 60 -month vesting schedule. Accounting standards require that the Company estimate forfeitures for RSUs 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.As of December 31, 2020, and 2019, the unrecognized total compensation cost related to unvested RSUs was $115 thousand and $48 thousand, respectively. That cost is expected to be recognized by the end of 2024. The tax benefit recognized with respect to RSUs during the years ended December 31, 2020, and 2019, was $33 thousand and $68 thousand, respectively.On October 15, 2018, the Company granted 29,460 incentive stock options (“ISOs”) and 20,540 non-qualified (“NQ”) stock options to purchase shares of Class A common stock. These options vest with respect to the recipient thereof over a five year period with 20% becoming exercisable on each anniversary of the vesting commencement date of October 15, 2019, provided the recipient remains in the employment or service of the Company as of the vesting date. Additionally, these options (or a portion thereof) could vest earlier in the event of a change in control of the Company. These option grants were made to one executive-level employee of the Company and, as a result, no compensation costs have been capitalized.The following table summarizes ISO and NQ stock option activity as of December 31, 2019:
On January 2, 2020, the Company granted 34,500 ISOs and 30,000 NQ stock options to purchase shares of Class A common stock. These options vest with respect to the recipients thereof over a five -year period with 20% becoming exercisable on each anniversary of the vesting commencement date of January 1, 2021, provided the recipient remains in the employment or service of the Company as of the vesting date. Additionally, these options (or a portion thereof) could vest earlier in the event of a change in control of the Company. These option grants were made to one executive-level employee and fourteen management-level employees of the Company and, as a result, no compensation costs have been capitalized.The following table summarizes ISO and NQ stock option activity as of December 31, 2020:
Stock-based compensation expense related to ISOs and NQ stock options was $143 thousand and $87 thousand for the years ended December 31, 2020, and 2019, respectively.As of December 31, 2020, and 2019, the unrecognized total compensation cost related to unvested ISOs and NQ stock options was $467 thousand and $329 thousand, respectively. That cost is expected to be recognized by the end of 2024. |
Note 16 - Selected Quarterly Financial Data (Unaudited and in Thousands, Except Per Share Amounts) |
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Quarterly Financial Information [Text Block] |
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Significant Accounting Policies (Policies) |
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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 Otelco Inc. and its subsidiaries, all of which are either directly or indirectly wholly owned. These include: Blountsville Telephone LLC (“BTC”); Brindlee Mountain Telephone LLC; CRC Communications LLC; Granby Telephone LLC; Hopper Telecommunications LLC; Mid-Maine Telecom LLC; Mid-Maine TelPlus LLC; Otelco Mid-Missouri LLC and its wholly-owned subsidiary I-Land Internet Services LLC; Otelco Telecommunications LLC; Otelco Telephone LLC; Pine Tree Telephone LLC; Saco River Telephone LLC; Shoreham Telephone LLC; and War Telephone LLC. The accompanying consolidated financial statements include the accounts of Otelco Inc. 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, 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 Accounting Standards Codification (“ASC”) 980, Regulated Operations (“ASC 980” ), as issued by the Financial Accounting Standards Board (the “FASB”). This accounting practice recognizes the economic effects of rate regulation by recording costs and a return on investment as such amounts are recovered through rates authorized by regulatory authorities. Accordingly, ASC 980 requires the Company to depreciate telecommunications property and equipment over the estimated useful lives approved by regulators, which could be different than the estimated useful lives that would otherwise be determined by management. ASC 980 also requires deferral of certain costs and obligations based upon approvals received from regulators to permit recovery of such amounts in future years. Criteria that would give rise to the discontinuance of accounting in accordance with ASC 980 include (1 ) increasing competition restricting the ability of the Company to establish prices that allow it to recover specific costs and (2 ) significant changes in the manner in which rates are set by regulators from cost-based regulation to another form of regulation. The Company periodically reviews the criteria to determine whether the continuing application of ASC 980 is appropriate for its rural local exchange carriers (“RLECs”). As of December 31, 2020, and 2019, 84.6% and 84.3%, 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, Goodwill, Policy [Policy Text Block] | Intangible Assets and Goodwill Intangible assets, other than goodwill, 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 , through 2004. In accordance with 47 CFR 32.2000, the federal regulation governing acquired telecommunications property and equipment, such property and equipment is accounted for at original cost, and depreciation and amortization of property and equipment acquired is credited to accumulated depreciation.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.ASC 350, Intangibles - Goodwill and Other (“ASC 350” ), requires that goodwill be tested for impairment annually, unless potential interim indicators exist that could result in impairment. The Company historically performed an annual step 1 goodwill impairment test that compares the fair value of the reporting unit to the carrying amount. The Company performed a Step 0 impairment test for the year 2020. If the carrying amount exceeds the fair value, an impairment loss is recognized in an amount equal to that excess. |
Revenue [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 advanced billings and defers recognition until such revenue is earned. Long distance service is billed to customers in arrears based on actual usage. The Company records unbilled long distance revenue as unbilled revenue when services are rendered. Unlimited long distance in bundles is billed at a flat rate and recognized over the period of time the service is provided.Network access . Network access revenue is derived from several sources. Revenue for interstate access services is received through tariffed access charges filed with the FCC. These access charges are billed by the Company to interstate interexchange carriers and retail voice customers. A portion of the access charge revenue received by the Company is based upon its actual cost of providing interstate access service, plus a return on the investment dedicated to providing that service. The balance of the access charge revenue received by the Company is based upon the nationwide average schedule costs of providing interstate access services. Rates for the Company's competitive subsidiaries are set by FCC rule to be no more than the interconnecting interstate rate of the predominant local carrier. The Company also receives Connect America Fund (“CAF”) revenues from the Universal Service Administrative Company (“USAC”). The CAF revenues are known as Connect America Fund–Intercarrier Compensation (“CAF-ICC”), A-CAM, and Connect America Fund–Broadband Loop Support (“CAF-BLS”). CAF-ICC is based on the Company's frozen traffic sensitive rate of return, less access charges billed to interexchange carriers and end user retail customers. A-CAM revenues are based on the FCC's model, which calculates the cost to provide broadband services to rural areas of each state. All of the Company's RLECs receive A-CAM revenues.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 (the “APSC”), the Maine Public Utilities Commission (the “MPUC”), the Massachusetts Department of Telecommunications and Cable (the “MDTC”), the Missouri Public Service Commission (the “MPSC”), the New Hampshire Public Utilities Commission (the “NHPUC”), the Vermont Public Utility Commission (the “VPUC”) and the West Virginia Public Service Commission (the “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, VPUC 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 2013. Beginning in 2014, the interstate and intrastate rates began being reduced over a six year period 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 has been 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 USAC. The FCC's Rate-of-Return Universal Service Fund Reform order, issued in March 2016, reduced the authorized rate-of-return by 25 basis points in 2016 and will reduce the authorized rate-of-return by 25 basis points in each subsequent year until 2021. The FCC's Intercarrier Compensation order, issued in October 2011, capped each year's revenue requirement (rate of return and reimbursement of costs) at 95.0% of the previous year's revenue requirement. Such revenues amounted to 23.9%, 23.3%, and 21.3% of the Company's total revenues for the years ended December 31, 2020, 2019, and 2018, respectively.Internet, transport service, cable and satellite television and cloud hosting and managed services . Internet, transport service, cable and satellite television and cloud hosting and managed services revenues are recognized when services are rendered. Operating revenues from the lease of dark fiber covered by indefeasible rights-of-use agreements are recorded as earned. In some cases, the entire lease payment is received at inception of the lease and recognized ratably over the lease term after recognition of expenses associated with lease inception. The Company has deferred revenue in the consolidated balance sheets as of December 31, 2020, and 2019, of $2.0 million and $2.1 million, respectively, related to transport services, which is included as part of advanced billing and payments. The Company has deferred revenue in the consolidated balance sheets as of December 31, 2020, and 2019, of $188 thousand and $229 thousand, respectively, related to other services, which is included as part of advanced billing and payments. |
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. |
Receivable [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 realizable 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 for Alabama locations, while the other regulated locations use similar useful lives as Alabama. 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 . The amount of the impairment recognized is determined by estimating the fair value of the assets and recording a loss for the excess of the carrying value over the fair value. |
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”. Deferred financing and loan costs are presented in the balance sheet as a direct deduction from the related debt liability. When amendments to debt agreements are considered to extinguish existing debt per guidance included in ASC 470, Debt , the remaining deferred financing costs are expensed at the time of amendment. |
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 (“ASC 740” ). The asset and liability approach requires the recognition of deferred tax liabilities and assets for the expected future tax consequences of temporary differences between the carrying amounts and the tax basis of assets and liabilities using enacted tax rates. Any changes in enacted tax rates or tax laws are included in the provision for income taxes in the period of enactment. A valuation allowance is provided when it is more likely than not that some portion or all of the deferred tax assets will not be realized.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, 2020, there was no material 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 2017 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, 2020, and 2019, due to their short term nature. The fair value of debt instruments at December 31, 2020, and 2019, 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 (“ASC 260” ). Under ASC 260, basic and diluted income per share is computed by dividing net income available to stockholders by the weighted average number of common shares and common share equivalents outstanding during the period. Basic income per common share excludes the effect of potentially dilutive securities, while diluted income per common share reflects the potential dilution that would occur if securities or other contracts to issue common shares were exercised for, converted into or otherwise resulted in the issuance of common shares. |
New Accounting Pronouncements, Policy [Policy Text Block] | Recently Adopted Accounting Pronouncements In May 2014, the FASB issued Accounting Standards Update (“ASU”) 2014 -09, Revenue from Contracts with Customers (Topic (“ASU 606 ) 2014 -09” ). This ASU requires that an entity recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This ASU also provides a more robust framework for revenue issues and improves comparability of revenue recognition practices across industries. This ASU was the product of a joint project between the FASB and the International Accounting Standards Board to clarify the principles for recognizing revenue and to develop a common revenue standard. ASU 2014 -09 permits the use of either a retrospective or modified retrospective application. This guidance was to be effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016, with early adoption not permitted. In July 2015, the FASB issued ASU 2015 -14, Revenue from Contracts with Customers (Topic This ASU confirmed a 606 ): Deferral of the Effective Date. one -year delay in the effective date of ASU 2014 -09, making the effective date for the Company the first quarter of fiscal 2018 instead of the first quarter of fiscal 2017. In March 2016, the FASB issued ASU 2016 -08, Revenue from Contracts with Customers (Topic . This ASU is further guidance to ASU 606 ): Principal versus Agent Consideration (Reporting Revenues Gross versus Net)2014 -09, and clarifies principal versus agent considerations. In April 2016, the FASB issued ASU 2016 -10, Revenue from Contracts with Customers (Topic This ASU is also further guidance to ASU 606 ): Identifying Performance Obligations and Licensing. 2014 -09, and clarifies the identification of performance obligations. In May 2016, the FASB issued ASU 2016 -12, Revenue from Contracts with Customers (Topic This ASU is also further guidance to ASU 606 ): Narrow-Scope Improvements and Practical Expedients. 2014 -09, and clarifies assessing the narrow aspects of recognizing revenue. In December 2016, the FASB issued ASU 2016 -20, Technical Corrections and Improvements to Topic This ASU is also further guidance to ASU 606, Revenue from Contracts with Customers. 2014 -09, and clarifies technical corrections and improvements for recognizing revenue.In January 2017, the FASB issued ASU 2017 -03, Accounting Changes and Error Corrections (Topic (“ASU 250 ) and Investments-Equity Method and Joint Ventures (Topic 323 )2017 -03” ). This ASU requires registrants to evaluate the impact ASU 2014 -09 will have on financial statements and adequately disclose this information to assist the reader in assessing the significance of ASU 2014 -09 on the financial statements when adopted. The Company commenced its assessment of ASU 2014 -09 beginning in June 2016. This assessment included analyzing ASU 2014 -09's impact on the Company's various revenue streams, comparing the Company's historical accounting policies and practices to the requirements of ASU 2014 -09, and identifying potential differences from applying the requirements of ASU 2014 -09 to the Company's contracts. The Company has used a five -step process to identify the contract with the customer, identify the performance obligations, determine the transaction price, allocate the transaction price to the performance obligations and recognize revenue when or as the performance obligations are satisfied. The Company has implemented the appropriate changes to its business processes, systems and controls to support revenue recognition and disclosures under ASU 2014 -09. The Company adopted ASU 2014 -09 at the beginning of its 2018 fiscal year using the modified retrospective method applied to those contracts which were not completed as of January 1, 2018. Prior period amounts have not been adjusted and continue to be reported in accordance with historic accounting standards in effect during those periods. The adoption of ASU 2014 -09 and related amendments did not have a material impact on the Company's consolidated financial statements.In February 2016, the FASB issued ASU 2016 -02, Leases (Topic (“ASU 842 ) 2016 -02” ). This ASU requires lessees to recognize most leases on the balance sheet. The provisions of this guidance are effective for annual periods beginning after December 15, 2018, and interim periods within those years, with early adoption permitted. In January 2017, the FASB issued ASU 2017 -03, which requires registrants to evaluate the impact ASU 2016 -02 will have on financial statements and adequately disclose this information to assist the reader in assessing the significance of ASU 2016 -02 on the financial statements when adopted. In January 2018, the FASB issued ASU 2018 -01, Leases (Topic . This ASU provides an optional transition practical expedient to 842 ): Land Easement Practical Expedient for Transition to Topic 842 not evaluate under ASU 2016 -02 existing or expired land easements that were not previously accounted for as leases under ASC Topic 840, Leases . An entity that elects this practical expedient should evaluate new or modified land easements under ASU 2016 -02 beginning at the date that the entity adopts ASU 2016 -02. In July 2018, the FASB issued ASU 2018 -10, Codification Improvements to Topic which provides improvements and clarifications for ASU 842, Leases, 2016 -02. In July 2018, the FASB issued ASU 2018 -11, Leases (Topic (“ASU 842 ): Targeted Improvements 2018 -11” ). This ASU provides an additional transition method by allowing entities to initially apply the new lease standard at the date of adoption with a cumulative effect adjustment to the opening balances of retained earnings in the period of adoption. This ASU also gives lessors the option of electing, as a practical expedient by class of underlying asset, not to separate the lease and non-lease components of a contract when those lease contracts meet certain criteria. In December 2018, the FASB issued ASU 2018 -20, Narrow-Scope Improvements for Lessors. This ASU clarifies lessor treatment for sales taxes and other similar taxes collected from lessees, certain lessor costs, and recognition of variable payments for contracts with lease and non-lease components. In March 2019, the FASB issued ASU 2019 -01, Codification Improvements. This ASU clarifies determining the fair value of the underlying asset by lessors that are not manufacturers or dealers, presentation on the statement of cash flows for sales-type and direct financing leases, and transition disclosures related to Topic 250, Accounting Changes and Error Corrections. The Company has completed its evaluation of the requirements of this guidance and implemented the processes necessary to adopt ASU 2016 -02, as amended. The Company has elected certain practical expedients available at adoption. The Company elected the package of practical expedients upon transition not to reassess whether expired or existing contracts contain leases under the new definition of a lease; not to reassess the lease classification for expired or existing leases; and not to reassess whether previously capitalized initial direct costs would qualify for capitalization under ASU 2016 -02. In evaluating certain equipment rental arrangements such as cable, internet and security service contracts, the Company considered the practical expedient that allows lessors to elect, by class of underlying asset, to not separate non-lease components from the associated lease components if the non-lease components otherwise would be accounted for in accordance with the new revenue recognition standard. The Company elected this practical expedient as the following two criteria are met; the lease component and the associated non-lease components have the same timing and pattern of transfer; and the lease component, if accounted for separately, would be classified as an operating lease. The Company elected to adopt the new standard using the transition method provided by ASU 2018 -11; therefore, prior periods will not be restated. The Company has determined that the impact of adoption is limited to real property leases and is consistent with industry practices. Adoption of the new standard resulted in the Company recognizing an aggregate of $1,073,919 in lease liabilities and corresponding right of use (“ROU”) assets and no impact on the opening retained earnings balances. The adoption of ASU 2016 -02 had an immaterial impact on the consolidated statements of operations and consolidated statements of cash flows for the year ended December 31, 2019. In January 2017, the FASB issued ASU 2017 -04, Intangibles-Goodwill and Other (Topic (“ASU 350 ) 2017 -04” ). The objective of this ASU is to simplify how an entity is required to test goodwill for impairment by eliminating Step 2 from the goodwill impairment test. ASU 2017 -04 is effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company adopted this ASU and that adoption did not have a material impact on the Company's consolidated financial statements.Recent Accounting Pronouncements During 2019, the FASB issued ASUs 2019 -01 through 2019 -12 and, during 2020, the FASB issued ASUs 2020 -01 through 2020 -11. Except for the ASUs discussed above and below, these ASUs provide technical corrections or simplifications to existing guidance and to specialized industries or entities and therefore have minimal, if any, impact on the Company.In November 2018, the FASB issued ASU 2018 -19, Codification Improvements to Topic –326, Financial Instruments Credit Losses (“ASU 2018 -19” ). This ASU improves the disclosure requirements in ASU 2016 -13, Financial Instruments - Credit Losses (Topic (“ASU 326 ): Measurement of Credit Losses on Financial Instruments2016 -13” ) issued in June 2016, to make a cumulative-effect adjustment to opening retained earnings as of the beginning of the first reporting period in which the amendments are effective. The effective date and transition requirements for the amendments in this update are the same as the effective dates and transition requirements in ASU 2016 -13, as amended by ASU 2018 -19. In April 2019, the FASB issued ASU 2019 -04, Codification Improvements to Topic –326, Financial Instruments Credit Losses, Topic This ASU improves the disclosure requirements in ASU 815, Derivatives and Hedging, and Topic 825, Financial Instruments.2016 -13 issued in June 2016, to allow the measurement of allowance for credit losses on accrued interest receivable balances separately from other components of the amortized cost basis of associated financial assets. In May 2019, the FASB issued ASU 2019 -05, Financial Instruments – Credit Losses (Topic This ASU improves the disclosure requirements in ASU 326 ).2016 -13 issued in June 2016, to allow companies to irrevocably elect, upon adoption of ASU 2016 -13, the fair value option on financial instruments that (1 ) were previously recorded at amortized cost and (2 ) are within the scope of ASC 326 -20 if the instruments are eligible for the fair value option under ASC 825 -10. The effective date and transition requirements for the amendments in this update are the same as the effective dates and transition requirements in ASU 2016 -13, as amended by ASU 2018 -19. In November 2019, the FASB issued ASU 2019 -10, Financial Instruments – Credit Losses (Topic (“ASU 326 ), Derivatives and Hedging (Topic 815 ), and Leases (Topic 842 ) 2019 -10” ). This ASU defers certain major updates not yet effective due to the challenge's private companies, smaller public companies, and not -for-profit organizations are having with implementation. In November 2019, the FASB issued ASU 2019 -11, Codification Improvements to Topic –326, Financial Instruments Credit Losses. The amendments in this ASU clarify and address stakeholders' specific issues about certain aspects in update 2016 -13. In February 2020, the FASB issued ASU 2020 -02, Financial Instruments – Credit Losses (Topic The amendments in this ASU address the methodology for the allowance for credit losses. ASU 326 ) and Leases (Topic 842 ). 2019 -10 has deferred the effective date for credit losses for smaller reporting companies to fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. An entity is still permitted to early adopt as of the fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company does not expect this ASU to have a material impact on its consolidated financial statements.In December 2019, the FASB issued ASU 2019 -12, Income Taxes (Topic (“ASU 740 ) 2019 -12” ). This ASU simplifies the accounting for income taxes by removing certain exceptions to the general principles in Topic 740. The amendments in ASU 2019 -12 are effective for public companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. Early adoption of the amendments is permitted, including adoption in any interim period for which financial statements have not yet been issued. An entity that elects to early adopt the amendments in an interim period should reflect any adjustments as of the beginning of the annual period that includes that interim period. Additionally, an entity that elects early adoption must adopt all the amendments in the same period. The Company does not expect this ASU to have a material impact on its consolidated financial statements. |
Note 3 - Goodwill and Intangible Assets (Tables) |
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Note 4 - Property and Equipment (Tables) |
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Note 6 - Investments (Tables) |
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Note 7 - Notes Payable (Tables) |
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Note 8 - Income Tax (Tables) |
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Note 10 - Net Income Per Common Share (Tables) |
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Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] |
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Note 11 - Revenue Streams and Concentrations (Tables) |
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Note 12 - Leases (Tables) |
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Lessee, Operating Lease, Liability, Maturity [Table Text Block] |
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Lease, Cost [Table Text Block] |
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Note 13 - Fair Value Measurement (Tables) |
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Note 15 - Stock Plans (Tables) |
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Note 16 - Selected Quarterly Financial Data (Unaudited and in Thousands, Except Per Share Amounts) (Tables) |
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Quarterly Financial Information [Table Text Block] |
|
Note 1 - Nature of Business (Details Textual) |
12 Months Ended | |||
---|---|---|---|---|
Mar. 27, 2020
USD ($)
|
Dec. 31, 2020
USD ($)
|
Dec. 31, 2019
USD ($)
|
Dec. 31, 2018
USD ($)
|
|
Number of Reportable Segments | 1 | 1 | ||
Proceeds from Paycheck Protection Program Under CARES Act | $ 2,975,000 | $ 2,975,000 |
Note 3 - Goodwill and Intangible Assets (Details Textual) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2020
USD ($)
|
Dec. 31, 2019
USD ($)
|
|
Number of Reportable Segments | 1 | 1 |
Number of Reporting Units | 3 | |
Goodwill, Impairment Loss | $ 0 | |
Goodwill, Period Increase (Decrease), Total | 0 | $ 0 |
Goodwill, Ending Balance | 44,976 | 44,976 |
Impairment of Intangible Assets (Excluding Goodwill), Total | $ 0 | $ 0 |
Minimum [Member] | ||
Finite-Lived Intangible Asset, Useful Life (Year) | 2 years | |
Maximum [Member] | ||
Finite-Lived Intangible Asset, Useful Life (Year) | 15 years |
Note 3 - Goodwill and Intangible Assets - Intangible Asset Summaries (Details) - USD ($) $ in Thousands |
Dec. 31, 2020 |
Dec. 31, 2019 |
---|---|---|
Carrying Value | $ 43,755 | $ 43,755 |
Accumulated Amortization | (43,597) | (43,225) |
Net Book Value | 158 | 530 |
Customer Relationships [Member] | ||
Carrying Value | 24,025 | 24,025 |
Accumulated Amortization | (23,867) | (23,497) |
Net Book Value | 158 | 528 |
Customer Contracts [Member] | ||
Carrying Value | 19,600 | 19,600 |
Accumulated Amortization | (19,600) | (19,600) |
Net Book Value | ||
Noncompete Agreements [Member] | ||
Carrying Value | 107 | 107 |
Accumulated Amortization | (107) | (107) |
Net Book Value | ||
Trade Names [Member] | ||
Carrying Value | 23 | 23 |
Accumulated Amortization | (23) | (21) |
Net Book Value | $ 2 |
Note 3 - Goodwill and Intangible Assets - Aggregate Amortization Expense (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Aggregate amortization expense | $ 372 | $ 389 | $ 408 |
2021, Expected amortization expense | 158 | ||
2022, Expected amortization expense | |||
Total, Expected amortization expense | $ 158 | $ 530 |
Note 4 - Property and Equipment (Details Textual) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Depreciation, Total | $ 7,994 | $ 7,344 | $ 6,906 |
Telephone Plant Adjustment [Member] | |||
Amortization, Total | $ (57) | $ (90) | $ (82) |
Note 5 - Other Accounts Receivable - Schedule of Other Accounts Receivable (Details) - USD ($) $ in Thousands |
Dec. 31, 2020 |
Dec. 31, 2019 |
---|---|---|
Other Receivables | $ 2,373 | $ 1,905 |
Carrier Access Bills Receivable [Member] | ||
Other Receivables | 237 | 235 |
NECA Receivable [Member] | ||
Other Receivables | 1,233 | 1,257 |
Receivables from Alabama Service Fund [Member] | ||
Other Receivables | 34 | 40 |
Other Miscellaneous [Member] | ||
Other Receivables | $ 869 | $ 373 |
Note 6 - Investments (Details Textual) - Interest Rate Cap [Member] - USD ($) $ in Thousands |
Feb. 26, 2018 |
Dec. 31, 2019 |
Dec. 31, 2018 |
---|---|---|---|
Derivative, Term of Contract (Year) | 2 years | ||
Derivative Assets, Noncurrent, Total | $ 0 | $ 4 |
Note 6 - Investments - Schedule of Investments (Details) - USD ($) $ in Thousands |
Dec. 31, 2020 |
Dec. 31, 2019 |
---|---|---|
Investments | $ 1,454 | $ 1,477 |
CoBank Stock, at Cost [Member] | ||
Investments | 1,192 | 1,192 |
Rental Property [Member] | ||
Investments | 168 | 194 |
Other Miscellaneous Investments [Member] | ||
Investments | $ 94 | $ 91 |
Note 7 - Notes Payable (Details Textual) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | ||||
---|---|---|---|---|---|---|
Oct. 22, 2018 |
Oct. 21, 2018 |
Mar. 31, 2020 |
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Amortization of Debt Issuance Costs | $ 502 | $ 452 | $ 476 | |||
New Credit Facility [Member] | ||||||
Debt Issuance Costs, Gross | $ 2,300 | |||||
Debt Issuance Costs Incurred During Noncash or Partial Noncash Transaction | $ 212 | |||||
Amortization of Debt Issuance Costs | $ 502 | 452 | 476 | |||
Line of Credit Facility, Commitment Fee Percentage | 0.38% | 0.50% | 0.50% | |||
Line of Credit Facility, Commitment Fee Amount | $ 23 | 19 | $ 24 | |||
Previous Credit Facility [Member] | ||||||
Line of Credit Facility, Maximum Borrowing Capacity | 5,000 | |||||
Long-term Line of Credit, Total | $ 0 | $ 0 |
Note 7 - Notes Payable - New Credit Facility (Details) - USD ($) $ in Thousands |
Dec. 31, 2020 |
Dec. 31, 2019 |
---|---|---|
Notes payable, net of debt issuance cost, current | $ 6,946 | $ 3,929 |
Notes payable, net of debt issuance cost | 58,094 | 65,172 |
Notes payable, net of debt issuance cost | 65,862 | |
New Credit Facility [Member] | ||
Long-term Debt | 7,415 | |
Current Debt | 58,447 | |
Loan with CoBank, ACB (the “Credit Facility”); variable interest rate of 4.66% and 5.95% at December 31, 2020 and 2019, respectively. Interest is monthly and paid in arrears on the last business day of each month. The Credit Facility is secured by the total assets of the subsidiary guarantors. The unpaid balance is due November 3, 2022. | 65,862 | 70,212 |
Debt issuance cost, current | (469) | |
Debt issuance cost, long-term | (353) | |
Debt issuance cost | (822) | (1,111) |
Notes payable, net of debt issuance cost, current | 6,946 | |
Notes payable, net of debt issuance cost | 58,094 | |
Notes payable, net of debt issuance cost | $ 65,040 | $ 69,101 |
Note 7 - Notes Payable - New Credit Facility (Details) (Parentheticals) |
Dec. 31, 2020 |
Dec. 31, 2019 |
---|---|---|
New Credit Facility [Member] | ||
Notes payable, interest rate | 4.66% | 5.95% |
Note 7 - Notes Payable - Maturities of Notes Payable (Details) $ in Thousands |
Dec. 31, 2020
USD ($)
|
---|---|
2021 | $ 7,415 |
2022 | 58,447 |
2023 | |
2024 | |
Total | $ 65,862 |
Note 8 - Income Tax (Details Textual) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Effective Income Tax Rate Reconciliation, Percent, Total | 24.30% | 23.50% | 22.50% |
Deferred Tax Assets, Valuation Allowance, Total | $ 0 | ||
Alternative Minimum Tax [Member] | |||
Tax Credit Carryforward, Amount | 0 | $ 0 | |
State and Local Jurisdiction [Member] | |||
Operating Loss Carryforwards, Total | 0 | 0 | |
Domestic Tax Authority [Member] | |||
Operating Loss Carryforwards, Total | $ 0 | $ 0 |
Note 8 - Income Tax - Tax Effects of Temporary Differences (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Federal income taxes | |||
Current | $ 1,532 | $ 443 | $ 1,036 |
Deferred | (24) | 1,717 | 898 |
Total federal tax expense | 1,508 | 2,160 | 1,934 |
State income taxes | |||
Current | 505 | 574 | 503 |
Deferred | 17 | (341) | 308 |
Total state tax expense | 522 | 233 | 811 |
Total income tax expense | $ 2,030 | $ 2,393 | $ 2,745 |
Note 8 - Income Tax - Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands |
Dec. 31, 2020 |
Dec. 31, 2019 |
---|---|---|
Deferred tax liabilities: | ||
Amortization | $ (10,913) | $ (11,133) |
Depreciation | (11,716) | (10,934) |
Lease asset | (406) | (306) |
Prepaid expense | (306) | (506) |
Other | (7) | (8) |
Total deferred tax liabilities | (23,348) | (22,887) |
Deferred tax assets: | ||
Deferred compensation | 113 | 147 |
Advance payments | 542 | 597 |
Lease liability | 406 | 306 |
Bad debt | 67 | 77 |
Consulting | 499 | |
Other | 207 | 239 |
Total deferred tax assets | $ 1,834 | $ 1,366 |
Note 8 - Income Tax - Effective Income Tax Rate Reconciliation (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Federal income tax at statutory rate | 21.00% | 21.00% | 21.00% |
Federal income tax provision at statutory rate | $ 1,751 | $ 2,140 | $ 2,565 |
State income tax provision, net of federal income tax effects | 434 | 548 | 641 |
Adjustments for prior years | (114) | (222) | (302) |
Other | (41) | (73) | (159) |
Total income tax expense | $ 2,030 | $ 2,393 | $ 2,745 |
Effective income tax rate | 24.30% | 23.50% | 22.50% |
Note 10 - Net Income Per Common Share - Reconciliation of Income (Loss) Per Common Share (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2020 |
Sep. 30, 2020 |
Jun. 30, 2020 |
Mar. 31, 2020 |
Dec. 31, 2019 |
Sep. 30, 2019 |
Jun. 30, 2019 |
Mar. 31, 2019 |
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Weighted average number of common shares outstanding - basic (in shares) | 3,421,794 | 3,412,805 | 3,388,624 | ||||||||
Effect of dilutive securities (in shares) | 18,978 | 17,648 | 46,238 | ||||||||
Weighted average number of common shares and potential common shares - diluted (in shares) | 3,440,772 | 3,430,453 | 3,434,862 | ||||||||
Net income | $ 6,307 | $ 7,796 | $ 9,467 | ||||||||
Net income per common share - basic (in dollars per share) | $ 0.42 | $ 0.36 | $ 0.42 | $ 0.65 | $ 0.58 | $ 0.53 | $ 0.50 | $ 0.67 | $ 1.84 | $ 2.28 | $ 2.79 |
Net income per common share - diluted (in dollars per share) | $ 0.42 | $ 0.36 | $ 0.42 | $ 0.64 | $ 0.58 | $ 0.53 | $ 0.50 | $ 0.66 | $ 1.83 | $ 2.27 | $ 2.76 |
Note 11 - Revenue Streams and Concentrations (Details Textual) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | |
---|---|---|---|
Dec. 31, 2020 |
Dec. 31, 2020 |
Sep. 30, 2020 |
|
Revenue, Remaining Performance Obligation, Amount | $ 6,700 | $ 6,700 | |
Contract with Customer, Liability, Total | $ 3,600 | ||
Contract with Customer, Liability, Revenue Recognized | 1,400 | ||
Short-term Contract with Customer [Member] | |||
Revenue, Remaining Performance Obligation, Amount | 736 | 736 | |
Long-term Contract with Customer [Member] | |||
Revenue, Remaining Performance Obligation, Amount | $ 5,800 | $ 5,800 | |
Long-term Contract with Customer [Member] | Minimum [Member] | |||
Revenue, Expected to Recognize, Term (Year) | 2 years | ||
Long-term Contract with Customer [Member] | Maximum [Member] | |||
Revenue, Expected to Recognize, Term (Year) | 5 years |
Note 12 - Leases (Details Textual) - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
Jan. 01, 2019 |
|
Operating Lease, Right-of-Use Asset | $ 1,539,000 | $ 1,146,000 | |
Operating Lease, Liability, Total | $ 1,539,000 | ||
Minimum [Member] | |||
Commercial Borrowing Rate | 5.00% | ||
Loan Collateralized by Real Estate, Term (Year) | 5 years | ||
Maximum [Member] | |||
Commercial Borrowing Rate | 7.00% | ||
Loan Collateralized by Real Estate, Term (Year) | 10 years | ||
Accounting Standards Update 2016-02 [Member] | |||
Operating Lease, Right-of-Use Asset | $ 1,073,919 | ||
Operating Lease, Liability, Total | $ 1,073,919 |
Note 12 - Leases - Undiscounted and Discounted Cash Flows for Leases (Details) $ in Thousands |
Dec. 31, 2020
USD ($)
|
---|---|
2021 | $ 460 |
2022 | 302 |
2023 | 285 |
2024 | 153 |
2025 | 130 |
Thereafter | 562 |
Total lease payments | 1,892 |
Less: Interest | (353) |
Operating Lease, Liability, Total | $ 1,539 |
Note 12 - Leases - Lease Information (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Operating cash outflow from operating leases | $ (488) | $ (445) |
Weighted-average remaining lease term – operating leases (Year) | 6 years 146 days | 5 years 146 days |
Weighted average discount rate – operating leases | 6.50% | 6.50% |
Note 13 - Fair Value Measurement - Fair Value of Long-term Debt (Details) - USD ($) $ in Thousands |
Dec. 31, 2020 |
Dec. 31, 2019 |
---|---|---|
Notes payable, net of debt issuance cost | $ 65,862 | |
New Credit Facility [Member] | ||
Notes payable, net of debt issuance cost | 65,040 | $ 69,101 |
Reported Value Measurement [Member] | New Credit Facility [Member] | ||
Notes payable, net of debt issuance cost | 65,862 | 70,212 |
Estimate of Fair Value Measurement [Member] | New Credit Facility [Member] | ||
Notes payable, net of debt issuance cost | $ 65,919 | $ 69,932 |
Note 15 - Stock Plans (Details Textual) - USD ($) $ in Thousands |
6 Months Ended | 9 Months Ended | 12 Months Ended | ||||
---|---|---|---|---|---|---|---|
Jan. 02, 2020 |
Oct. 15, 2018 |
Jun. 30, 2019 |
Sep. 30, 2020 |
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount, Total | $ 467 | $ 329 | |||||
Share-based Payment Arrangement, Expense, Tax Benefit | $ 33 | $ 68 | |||||
Incentive and Non-Qualified Stock Options [Member] | |||||||
Share-based Payment Arrangement, Amount Capitalized | $ 0 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 20.00% | 20.00% | |||||
Restricted Stock Units (RSUs) [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period (in shares) | 14,500 | 14,500 | 0 | 401,111 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period (Year) | 5 years | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested or Cancelled (in shares) | 334,799 | ||||||
Share-based Payment Arrangement, Amount Capitalized | $ 0 | $ 0 | |||||
Share-based Payment Arrangement, Expense | $ 65 | $ 167 | |||||
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount, Total | 115 | 48 | |||||
Restricted Stock Units (RSUs) [Member] | Minimum [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period (Year) | 1 year | ||||||
Restricted Stock Units (RSUs) [Member] | Maximum [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period (Year) | 5 years | ||||||
Incentive Stock Options [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross (in shares) | 34,500 | 29,460 | |||||
Non-Qualified Stock Options [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross (in shares) | 30,000 | 20,540 | |||||
Incentive and Non-Qualified Stock Options [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period (Year) | 5 years | 5 years | |||||
Share-based Payment Arrangement, Expense | $ 143 | $ 87 | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross (in shares) | 64,500 |
Note 15 - Stock Plans - Summary of RSU Activity (Details) - Restricted Stock Units (RSUs) [Member] - $ / shares |
9 Months Ended | 12 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2020 |
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Restricted stock units outstanding (in shares) | 17,648 | 17,648 | 66,312 | |
Outstanding, weighted average grant date fair value (in dollars per share) | $ 13.30 | $ 13.30 | $ 9.06 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period (in shares) | 14,500 | 14,500 | 0 | 401,111 |
Granted, weighted average grant date fair value (in dollars per share) | $ 9.22 | |||
Restricted stock units vested (in shares) | (12,920) | (36,847) | ||
Vested, weighted average grant date fair value (in dollars per share) | $ 13.30 | $ 5.68 | ||
Restricted stock units forfeited or cancelled (in shares) | (250) | (11,817) | ||
Forfeited or cancelled, weighted average grant date fair value (in dollars per share) | $ 9.22 | $ 13.30 | ||
Restricted stock units outstanding (in shares) | 18,978 | 17,648 | 66,312 | |
Outstanding, weighted average grant date fair value (in dollars per share) | $ 10.24 | $ 13.30 | $ 9.06 | |
Restricted stock units granted (in shares) | 14,500 | 14,500 | 0 | 401,111 |
Granted, weighted average grant date fair value (in dollars per share) | $ 9.22 | |||
Restricted stock units vested (in shares) | (12,920) | (36,847) | ||
Restricted stock units forfeited or cancelled (in shares) | (250) | (11,817) |
Note 15 - Stock Plans - Summary of Stock Option Activity (Details) - Incentive and Non-Qualified Stock Options [Member] - $ / shares |
12 Months Ended | |
---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Stock options outstanding (in shares) | 40,000 | 50,000 |
Outstanding, weighted average grant date fair value (in dollars per share) | $ 16.97 | $ 16.97 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross (in shares) | 64,500 | |
Granted, weighted average grant date fair value (in dollars per share) | $ 9.22 | |
Stock options vested (in shares) | (10,000) | (10,000) |
Vested, weighted average grant date fair value (in dollars per share) | $ 16.97 | $ 16.97 |
Stock options forfeited or cancelled (in shares) | (250) | |
Forfeited or cancelled, weighted average grant date fair value (in dollars per share) | $ 9.22 | |
Stock options outstanding (in shares) | 94,250 | 40,000 |
Outstanding, weighted average grant date fair value (in dollars per share) | $ 11.69 | $ 16.97 |
Note 16 - Selected Quarterly Financial Data (Unaudited and in Thousands, Except Per Share Amounts) - Selected Quarterly Financial Data (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2020 |
Sep. 30, 2020 |
Jun. 30, 2020 |
Mar. 31, 2020 |
Dec. 31, 2019 |
Sep. 30, 2019 |
Jun. 30, 2019 |
Mar. 31, 2019 |
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Revenue | $ 15,507 | $ 15,574 | $ 15,468 | $ 15,422 | $ 15,591 | $ 15,762 | $ 15,658 | $ 15,755 | $ 61,971 | $ 62,766 | $ 66,068 |
Operating income | 2,802 | 2,605 | 2,830 | 3,305 | 3,532 | 3,841 | 3,708 | 3,763 | $ 11,542 | $ 14,844 | $ 17,793 |
Net income | $ 1,430 | $ 1,228 | $ 1,431 | $ 2,218 | $ 1,979 | $ 1,819 | $ 1,717 | $ 2,281 | |||
Net income per common share-basic (in dollars per share) | $ 0.42 | $ 0.36 | $ 0.42 | $ 0.65 | $ 0.58 | $ 0.53 | $ 0.50 | $ 0.67 | $ 1.84 | $ 2.28 | $ 2.79 |
Net income per common share-diluted (in dollars per share) | $ 0.42 | $ 0.36 | $ 0.42 | $ 0.64 | $ 0.58 | $ 0.53 | $ 0.50 | $ 0.66 | $ 1.83 | $ 2.27 | $ 2.76 |
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