|
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)
|
|
|
Title of Each Class
|
| |
Name of Each Exchange on Which Registered
|
|
|
Class A Common Stock ($0.01 par value per share)
|
| |
The NASDAQ Stock Market LLC
|
|
|
Large accelerated filer ☐
|
| | Accelerated filer ☐ | | |
Non-accelerated filer ☐
(Do not check if a smaller reporting company) |
| | Smaller reporting company ☒ | |
| | |
Page
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| Access line equivalents: | | | |||||
|
Business/enterprise
|
| | | | 53,520 | | |
|
Residence
|
| | | | 43,739 | | |
|
Total
|
| | | | 97,259 | | |
|
Video
|
| | | | 3,648 | | |
|
Security systems
|
| | | | 326 | | |
|
Other internet lines
|
| | | | 2,840 | | |
Source of Revenue:
|
| | ||||||
Local services
|
| | | | 35.2% | | | |
Network access
|
| | | | 31.2% | | | |
Internet
|
| | | | 20.9% | | | |
Transport services
|
| | | | 7.5% | | | |
Video and security
|
| | | | 3.9% | | | |
Managed services
|
| | | | 1.3% | | | |
Total
|
| | | | 100.0% | | | |
|
|
Land
|
| | | $ | 1,164 | | | |
|
Buildings and improvements
|
| | | | 12,723 | | | |
|
Telephone equipment
|
| | | | 233,099 | | | |
|
Cable television equipment
|
| | | | 12,129 | | | |
|
Furniture and equipment
|
| | | | 3,045 | | | |
|
Vehicles
|
| | | | 6,516 | | | |
|
Computer software and equipment
|
| | | | 16,251 | | | |
|
Internet equipment
|
| | | | 3,797 | | | |
|
Total property and equipment
|
| | | | 288,724 | | | |
|
Accumulated depreciation
|
| | | | (238,913) | | | |
|
Net property and equipment
|
| | | $ | 49,811 | | | |
|
Name
|
| |
Age
|
| |
Position
|
|
Robert J. Souza
|
| |
62
|
| | President, Chief Executive Officer and Director | |
Curtis L. Garner, Jr.
|
| |
68
|
| | Chief Financial Officer and Director | |
Dennis K. Andrews
|
| |
59
|
| | Senior Vice President and General Manager – Alabama & Missouri | |
Jerry C. Boles
|
| |
63
|
| | Senior Vice President and Controller | |
Edwin D. Tisdale
|
| |
56
|
| | Senior Vice President and General Manager – New England | |
E. Todd Wessing
|
| |
50
|
| | Vice President and General Manager – Missouri | |
| | |
High
|
| |
Low
|
| ||||||
2015 | | | | ||||||||||
Fourth Quarter
|
| | | $ | 7.30 | | | | | $ | 5.81 | | |
Third Quarter
|
| | | $ | 7.40 | | | | | $ | 4.47 | | |
Second Quarter
|
| | | $ | 4.87 | | | | | $ | 4.20 | | |
First Quarter
|
| | | $ | 5.24 | | | | | $ | 4.75 | | |
2014 | | | | ||||||||||
Fourth Quarter
|
| | | $ | 5.39 | | | | | $ | 4.71 | | |
Third Quarter
|
| | | $ | 5.15 | | | | | $ | 4.63 | | |
Second Quarter
|
| | | $ | 5.35 | | | | | $ | 4.73 | | |
First Quarter
|
| | | $ | 7.00 | | | | | $ | 5.05 | | |
| | |
As Of And For The Year Ended December 31,
|
| |||||||||||||||||||||||||||
| | |
2011(1)
|
| |
2012
|
| |
2013
|
| |
2014(2)
|
| |
2015
|
| |||||||||||||||
| | |
(In Thousands Except Per Share Amounts)
|
| |||||||||||||||||||||||||||
Income Statement Data | | | | | | | |||||||||||||||||||||||||
Revenues: | | | | | | | |||||||||||||||||||||||||
Local services
|
| | | $ | 47,463 | | | | | $ | 44,880 | | | | | $ | 30,536 | | | | | $ | 26,656 | | | | | $ | 25,057 | | |
Network access
|
| | | | 32,128 | | | | | | 29,934 | | | | | | 25,154 | | | | | | 23,822 | | | | | | 22,156 | | |
Internet
|
| | | | 13,946 | | | | | | 14,802 | | | | | | 14,540 | | | | | | 14,438 | | | | | | 14,868 | | |
Transport services
|
| | | | 5,326 | | | | | | 5,635 | | | | | | 5,740 | | | | | | 5,275 | | | | | | 5,358 | | |
Video and security
|
| | | | 2,980 | | | | | | 3,153 | | | | | | 3,002 | | | | | | 2,821 | | | | | | 2,753 | | |
Managed services
|
| | | | — | | | | | | — | | | | | | — | | | | | | 858 | | | | | | 910 | | |
Total
|
| | | $ | 101,843 | | | | | $ | 98,404 | | | | | $ | 78,972 | | | | | $ | 73,870 | | | | | $ | 71,102 | | |
Income (loss) from operations
|
| | | $ | 24,630 | | | | | $ | (129,394) | | | | | $ | 18,651 | | | | | $ | 16,858 | | | | | $ | 19,255 | | |
Income (loss) before income tax
|
| | | $ | 2,447 | | | | | $ | (151,767) | | | | | $ | 115,511 | | | | | $ | 8,214 | | | | | $ | 12,428 | | |
Net income (loss) available to common stockholders
|
| | | $ | 2,197 | | | | | $ | (126,900) | | | | | $ | 109,144 | | | | | $ | 5,029 | | | | | $ | 7,484 | | |
Diluted net income (loss) per common share(3)
|
| | |
$
|
0.83
|
| | | | $ | (47.99) | | | | | $ | 37.36 | | | | | $ | 1.59 | | | | | $ | 2.26 | | |
Dividends declared per share(4)
|
| | |
$
|
0.71
|
| | | | $ | 0.18 | | | | | $ | — | | | | | $ | — | | | | | $ | — | | |
Balance Sheet Data | | | | | | | |||||||||||||||||||||||||
Cash and cash equivalents
|
| | | $ | 12,394 | | | | | $ | 32,516 | | | | | $ | 9,916 | | | | | $ | 5,082 | | | | | $ | 6,884 | | |
Property and equipment, net
|
| | | $ | 65,882 | | | | | $ | 58,243 | | | | | $ | 54,462 | | | | | $ | 51,237 | | | | | $ | 49,811 | | |
Total assets
|
| | | $ | 309,917 | | | | | $ | 165,618 | | | | | $ | 129,604 | | | | | $ | 120,669 | | | | | $ | 118,581 | | |
Long-term notes payable (including current portion)
|
| | | $ | 271,106 | | | | | $ | 270,990 | | | | | $ | 128,633 | | | | | $ | 112,135 | | | | | $ | 100,052 | | |
| | |
As of
|
| |
Percentage
Change from December 31, 2014 |
| ||||||||||||||||||
| | |
December 31,
2013 |
| |
December 31,
2014 |
| |
December 31,
2015 |
| |||||||||||||||
Business/Enterprise | | | | | | ||||||||||||||||||||
CLEC
|
| | | | |||||||||||||||||||||
Voice lines
|
| | | | 21,149 | | | | | | 19,324 | | | | | | 18,606 | | | | | | (3.7)% | | |
HPBX seats
|
| | | | 8,453 | | | | | | 10,029 | | | | | | 10,740 | | | | | | 7.1% | | |
Data lines
|
| | | | 2,725 | | | | | | 3,313 | | | | | | 3,629 | | | | | | 9.5% | | |
Wholesale network lines
|
| | | | 2,817 | | | | | | 2,968 | | | | | | 2,743 | | | | | | (7.6)% | | |
Classifax
|
| | | | — | | | | | | 80 | | | | | | 140 | | | | | | 75.0% | | |
RLEC
|
| | | | | ||||||||||||||||||||
Voice lines
|
| | | | 12,349 | | | | | | 15,506 | | | | | | 16,123 | | | | | | 4.0% | | |
Data lines
|
| | | | 1,594 | | | | | | 1,587 | | | | | | 1,539 | | | | | | (3.0)% | | |
Access line equivalents(1)
|
| | | | 49,087 | | | | | | 52,807 | | | | | | 53,520 | | | | | | 1.4% | | |
Residential | | | | | | ||||||||||||||||||||
CLEC
|
| | | | | ||||||||||||||||||||
Voice lines
|
| | | | 339 | | | | | | 275 | | | | | | 225 | | | | | | (18.2)% | | |
Data lines
|
| | | | 416 | | | | | | 363 | | | | | | 282 | | | | | | (22.3)% | | |
RLEC
|
| | | | | ||||||||||||||||||||
Voice lines
|
| | | | 28,323 | | | | | | 25,569 | | | | | | 23,143 | | | | | | (9.5)% | | |
Data lines
|
| | | | 20,566 | | | | | | 20,206 | | | | | | 20,089 | | | | | | (0.6)% | | |
Access line equivalents(1)
|
| | | | 49,644 | | | | | | 46,413 | | | | | | 43,739 | | | | | | (5.8)% | | |
Otelco access line equivalents(1)
|
| | | | 98,731 | | | | | | 99,220 | | | | | | 97,259 | | | | | | (2.0)% | | |
Video
|
| | | | 4,164 | | | | | | 3,852 | | | | | | 3,648 | | | | | | (5.3)% | | |
Security systems
|
| | | | 174 | | | | | | 243 | | | | | | 326 | | | | | | 34.2% | | |
Other internet lines
|
| | | | 3,750 | | | | | | 3,202 | | | | | | 2,840 | | | | | | (11.3)% | | |
| | |
Year Ended December 31,
|
| ||||||||||||||||||
| | |
2013
|
| |
2014
|
| |
2015
|
| ||||||||||||
Revenues | | | | | ||||||||||||||||||
Local services
|
| | | | 38.7% | | | | | | 36.1% | | | | | | 35.2% | | | |||
Network access
|
| | | | 31.8 | | | | | | 32.2 | | | | | | 31.2 | | | |||
Internet
|
| | | | 18.4 | | | | | | 19.5 | | | | | | 20.9 | | | |||
Transport services
|
| | | | 7.3 | | | | | | 7.1 | | | | | | 7.5 | | | |||
Video and security
|
| | | | 3.8 | | | | | | 3.8 | | | | | | 3.9 | | | |||
Managed services
|
| | | | — | | | | | | 1.3 | | | | | | 1.3 | | | |||
Total revenues
|
| | | | 100.0% | | | | | | 100.0% | | | | | | 100.0% | | | |||
Operating expenses | | | | | ||||||||||||||||||
Cost of services
|
| | | | 47.1 | | | | | | 48.1 | | | | | | 46.6 | | | |||
Selling, general and administrative expenses
|
| | | | 13.3 | | | | | | 14.8 | | | | | | 13.8 | | | |||
Depreciation and amortization
|
| | | | 16.0 | | | | | | 14.3 | | | | | | 12.5 | | | |||
Total operating expenses
|
| | | | 76.4 | | | | | | 77.2 | | | | | | 72.9 | | | |||
Income from operations
|
| | | | 23.6 | | | | | | 22.8 | | | | | | 27.1 | | | |||
Other income (expense) | | | | | ||||||||||||||||||
Interest expense
|
| | | | (16.0) | | | | | | (12.0) | | | | | | (11.1) | | | |||
Other income
|
| | | | 0.3 | | | | | | 0.3 | | | | | | 1.5 | | | |||
Total other expenses
|
| | | | (15.7) | | | | | | (11.7) | | | | | | (9.6) | | | |||
Income before reorganization items and income tax
|
| | | | 7.9 | | | | | | 11.1 | | | | | | 17.5 | | | |||
Reorganization items
|
| | | | 138.4 | | | | | | — | | | | | | — | | | |||
Income before income taxes
|
| | | | 146.3 | | | | | | 11.1 | | | | | | 17.5 | | | |||
Income tax expense
|
| | | | (8.1) | | | | | | (4.3) | | | | | | (7.0) | | | |||
Net income
|
| | | | 138.2% | | | | | | 6.8% | | | | | | 10.5% | | | |||
|
| | |
Year Ended December 31,
|
| |
Change
|
| ||||||||||||||||||||||
| | |
2014
|
| |
2015
|
| |
Amount
|
| |
Percent
|
| ||||||||||||||||
| | |
(Dollars in Thousands)
|
| | ||||||||||||||||||||||||
Local services
|
| | | $ | 26,656 | | | | | $ | 25,057 | | | | | $ | (1,599) | | | | | | (6.0)% | | | ||||
Network access
|
| | | | 23,822 | | | | | | 22,156 | | | | | | (1,666) | | | | | | (7.0) | | | ||||
Internet
|
| | | | 14,438 | | | | | | 14,868 | | | | | | 430 | | | | | | 3.0 | | | ||||
Transport services
|
| | | | 5,275 | | | | | | 5,358 | | | | | | 83 | | | | | | 1.6 | | | ||||
Video and security
|
| | | | 2,821 | | | | | | 2,753 | | | | | | (68) | | | | | | (2.4) | | | ||||
Managed services
|
| | | | 858 | | | | | | 910 | | | | | | 52 | | | | | | 6.1 | | | ||||
Total
|
| | | $ | 73,870 | | | | | $ | 71,102 | | | | | $ | (2,768) | | | | | | (3.7) | | | ||||
|
| | |
Year Ended December 31,
|
| |
Change
|
| ||||||||||||||||||||||
| | |
2014
|
| |
2015
|
| |
Amount
|
| |
Percent
|
| ||||||||||||||||
| | |
(Dollars in Thousands)
|
| | ||||||||||||||||||||||||
Cost of services
|
| | | $ | 35,516 | | | | | $ | 33,123 | | | | | $ | (2,393) | | | | | | (6.7)% | | | ||||
Selling, general and administrative expenses
|
| | | | 10,913 | | | | | | 9,846 | | | | | | (1,067) | | | | | | (9.8) | | | ||||
Depreciation and amortization
|
| | | | 10,583 | | | | | | 8,878 | | | | | | (1,705) | | | | | | (16.1) | | | ||||
Total
|
| | | $ | 57,012 | | | | | $ | 51,847 | | | | | $ | (5,165) | | | | | | (9.1) | | | ||||
|
| | |
Year Ended December 31,
|
| |
Change
|
| ||||||||||||||||||
| | |
2014
|
| |
2015
|
| |
Amount
|
| |
Percent
|
| ||||||||||||
| | |
(Dollars in Thousands)
|
| | ||||||||||||||||||||
Interest expense
|
| | | $ | (8,854) | | | | | $ | (7,894) | | | | | $ | (960) | | | | | | (10.8)% | | |
Other income
|
| | | | 210 | | | | | | 1,067 | | | | | | 857 | | | | | | 408.1 | | |
Income tax expense
|
| | | | (3,185) | | | | | | (4,944) | | | | | | 1,759 | | | | | | 55.2 | | |
| | |
Year Ended December 31,
|
| |
Change
|
| ||||||||||||||||||||||
| | |
2013
|
| |
2014
|
| |
Amount
|
| |
Percent
|
| ||||||||||||||||
| | |
(Dollars in Thousands)
|
| | ||||||||||||||||||||||||
Local services
|
| | | $ | 30,536 | | | | | $ | 26,656 | | | | | $ | (3,880) | | | | | | (12.7)% | | | ||||
Network access
|
| | | | 25,154 | | | | | | 23,822 | | | | | | (1,332) | | | | | | (5.3) | | | ||||
Internet
|
| | | | 14,540 | | | | | | 14,438 | | | | | | (102) | | | | | | (0.7) | | | ||||
Transport services
|
| | | | 5,740 | | | | | | 5,275 | | | | | | (465) | | | | | | (8.1) | | | ||||
Video and security
|
| | | | 3,002 | | | | | | 2,821 | | | | | | (181) | | | | | | (6.0) | | | ||||
Managed services
|
| | | | — | | | | | | 858 | | | | | | 858 | | | | | | * | | | ||||
Total
|
| | | $ | 78,972 | | | | | $ | 73,870 | | | | | $ | (5,102) | | | | | | (6.5) | | | ||||
|
| | |
Year Ended December 31,
|
| |
Change
|
| ||||||||||||||||||||||
| | |
2013
|
| |
2014
|
| |
Amount
|
| |
Percent
|
| ||||||||||||||||
| | |
(Dollars in Thousands)
|
| | ||||||||||||||||||||||||
Cost of services
|
| | | $ | 37,200 | | | | | $ | 35,516 | | | | | $ | (1,684) | | | | | | (4.5)% | | | ||||
Selling, general and administrative expenses
|
| | | | 10,489 | | | | | | 10,913 | | | | | | 424 | | | | | | 4.0 | | | ||||
Depreciation and amortization
|
| | | | 12,632 | | | | | | 10,583 | | | | | | (2,049) | | | | | | (16.2) | | | ||||
Total
|
| | | $ | 60,321 | | | | | $ | 57,012 | | | | | $ | (3,309) | | | | | | (5.5) | | | ||||
|
| | |
Year Ended December 31,
|
| |
Change
|
| ||||||||||||||||||
| | |
2013
|
| |
2014
|
| |
Amount
|
| |
Percent
|
| ||||||||||||
| | |
(Dollars in Thousands)
|
| | ||||||||||||||||||||
Interest expense
|
| | | $ | (12,673) | | | | | $ | (8,854) | | | | | $ | (3,819) | | | | | | (30.1)% | | |
Other income
|
| | | | 275 | | | | | | 210 | | | | | | (65) | | | | | | (23.6) | | |
Reorganization items
|
| | | | 109,258 | | | | | | — | | | | | | (109,258) | | | | | | * | | |
Income tax expense
|
| | | | (6,367) | | | | | | (3,185) | | | | | | 3,182 | | | | | | * | | |
| | |
Year Ended December 31,
|
| |||||||||
| |
2014
|
| |
2015
|
| |||||||
| | |
(Dollars in Thousands)
|
| |||||||||
Cash generation | | | | ||||||||||
Revenue
|
| | | $ | 73,870 | | | | | $ | 71,102 | | |
Other income, net
|
| | | | 210 | | | | | | 1,067 | | |
Proceeds from sale of property and equipment, net
|
| | | | 58 | | | | | | — | | |
Cash received from operations
|
| | | $ | 74,138 | | | | | $ | 72,169 | | |
Cost of services
|
| | | $ | 35,516 | | | | | $ | 33,123 | | |
Selling, general and administrative expenses(1)
|
| | | | 10,270 | | | | | | 9,483 | | |
Cash consumed by operations
|
| | | $ | 45,786 | | | | | $ | 42,606 | | |
Cash generated from operations
|
| | | $ | 28,352 | | | | | $ | 29,563 | | |
Cash utilization | | | | ||||||||||
Capital investment in operations
|
| | | $ | 6,015 | | | | | $ | 6,612 | | |
Purchase Reliable Networks
|
| | | | 500 | | | | | | — | | |
Debt interest and fees
|
| | | | 8,024 | | | | | | 7,116 | | |
Scheduled principal payment on long-term notes payable
|
| | | | 6,665 | | | | | | 6,665 | | |
Excess cash flow repayment of long-term notes payable
|
| | | | 6,051 | | | | | | 5,418 | | |
Loan origination costs
|
| | | | — | | | | | | 516 | | |
Income taxes paid
|
| | | | 1,535 | | | | | | 2,414 | | |
Cash utilized by the Company
|
| | | $ | 28,790 | | | | | $ | 28,741 | | |
Percentage cash utilized of cash generated
|
| | | | 101.5% | | | | | | 97.2% | | |
Voluntary repayment of long-term notes payable
|
| | | $ | 3,782 | | | | | $ | — | | |
| | |
Year Ended December 31,
|
| |||||||||||
| | |
2014
|
| |
2015
|
| ||||||||
Net income
|
| | | $ | 5,029 | | | | | $ | 7,484 | | | ||
Add:
Depreciation
|
| | | | 8,941 | | | | | | 7,678 | | | ||
Interest expense – net of premium
|
| | | | 7,918 | | | | | | 7,014 | | | ||
Interest expense – amortize loan cost
|
| | | | 936 | | | | | | 880 | | | ||
Income tax expense
|
| | | | 3,185 | | | | | | 4,944 | | | ||
Amortization – intangibles
|
| | | | 1,643 | | | | | | 1,200 | | | ||
Loan fees
|
| | | | 25 | | | | | | 25 | | | ||
Stock-based compensation (earn out)
|
| | | | 317 | | | | | | 71 | | | ||
Stock-based compensation (board and senior management)
|
| | | | 326 | | | | | | 292 | | | ||
Other excluded expense
|
| | | | 424 | | | | | | 8 | | | ||
Adjusted EBITDA
|
| | | $ | 28,744 | | | | | $ | 29,596 | | | ||
|
| | | | | 31 | | | |
| | | | | 33 | | | |
| | | | | 34 | | | |
| | | | | 35 | | | |
| | | | | 36 | | | |
| | | | | 37 | | |
| | |
As of December 31,
|
| |||||||||||
| | |
2014
|
| |
2015
|
| ||||||||
Assets
|
| | | ||||||||||||
Current assets | | | | ||||||||||||
Cash and cash equivalents
|
| | | $ | 5,082 | | | | | $ | 6,884 | | | ||
Accounts receivable:
|
| | | ||||||||||||
Due from subscribers, net of allowance for doubtful accounts of $229 and $258, respectively
|
| | | | 3,732 | | | | | | 3,575 | | | ||
Unbilled receivables
|
| | | | 1,675 | | | | | | 1,610 | | | ||
Other
|
| | | | 1,931 | | | | | | 1,722 | | | ||
Materials and supplies
|
| | | | 1,915 | | | | | | 1,906 | | | ||
Prepaid expenses
|
| | | | 3,441 | | | | | | 2,775 | | | ||
Deferred income taxes
|
| | | | — | | | | | | 57 | | | ||
Total current assets
|
| | | | 17,776 | | | | | | 18,529 | | | ||
Property and equipment, net
|
| | | | 51,237 | | | | | | 49,811 | | | ||
Goodwill
|
| | | | 44,976 | | | | | | 44,976 | | | ||
Intangible assets, net
|
| | | | 3,178 | | | | | | 2,363 | | | ||
Investments
|
| | | | 1,870 | | | | | | 1,846 | | | ||
Deferred financing costs, net
|
| | | | 1,161 | | | | | | 797 | | | ||
Other assets
|
| | | | 471 | | | | | | 259 | | | ||
Total assets
|
| | | $ | 120,669 | | | | | $ | 118,581 | | | ||
Liabilities and Stockholders’ Deficit
|
| | | ||||||||||||
Current liabilities | | | | ||||||||||||
Accounts payable
|
| | | $ | 1,104 | | | | | $ | 1,181 | | | ||
Accrued expenses
|
| | | | 5,054 | | | | | | 4,567 | | | ||
Advanced billings and payments
|
| | | | 1,410 | | | | | | 1,418 | | | ||
Deferred income taxes
|
| | | | 53 | | | | | | — | | | ||
Customer deposits
|
| | | | 70 | | | | | | 68 | | | ||
Current maturity of long-term notes payable
|
| | | | 6,665 | | | | | | 3,000 | | | ||
Total current liabilities
|
| | | | 14,356 | | | | | | 10,871 | | | ||
Deferred income taxes
|
| | | | 24,027 | | | | | | 26,163 | | | ||
Advanced billings and payments
|
| | | | 681 | | | | | | 628 | | | ||
Other liabilities
|
| | | | 142 | | | | | | 27 | | | ||
Long-term notes payable, less current maturities
|
| | | | 105,470 | | | | | | 97,052 | | | ||
Total liabilities
|
| | | | 144,676 | | | | | | 134,741 | | | ||
Stockholders’ deficit | | | | ||||||||||||
Class A Common Stock, $.01 par value-authorized 10,00,000 shares; issued and outstanding 2,881,154 and 3,015,099 shares, respectively
|
| | | | 29 | | | | | | 30 | | | ||
Class B Common Stock, $.01 par value-authorized 250,000 shares; issued and outstanding 232,780 shares
|
| | | | 2 | | | | | | 2 | | | ||
Additional paid in capital
|
| | | | 3,519 | | | | | | 3,881 | | | ||
Retained deficit
|
| | | | (27,557) | | | | | | (20,073) | | | ||
Total stockholders’ deficit
|
| | | | (24,007) | | | | | | (16,160) | | | ||
Total liabilities and stockholders’ deficit
|
| | | $ | 120,669 | | | | | $ | 118,581 | | | ||
|
| | |
Years Ended December 31,
|
| |||||||||||||||
| | |
2013
|
| |
2014
|
| |
2015
|
| |||||||||
Revenues
|
| | | $ | 78,972 | | | | | $ | 73,870 | | | | | $ | 71,102 | | |
Operating expenses | | | | | |||||||||||||||
Cost of services
|
| | | | 37,200 | | | | | | 35,516 | | | | | | 33,123 | | |
Selling, general and administrative expenses
|
| | | | 10,489 | | | | | | 10,913 | | | | | | 9,846 | | |
Depreciation and amortization
|
| | | | 12,632 | | | | | | 10,583 | | | | | | 8,878 | | |
Total operating expenses
|
| | | | 60,321 | | | | | | 57,012 | | | | | | 51,847 | | |
Income from operations
|
| | | | 18,651 | | | | | | 16,858 | | | | | | 19,255 | | |
Other income (expense) | | | | | |||||||||||||||
Interest expense
|
| | | | (12,673) | | | | | | (8,854) | | | | | | (7,894) | | |
Other income
|
| | | | 275 | | | | | | 210 | | | | | | 1,067 | | |
Total other expenses
|
| | | | (12,398) | | | | | | (8,644) | | | | | | (6,827) | | |
Income before reorganization items and income tax
|
| | | | 6,253 | | | | | | 8,214 | | | | | | 12,428 | | |
Reorganization items
|
| | | | 109,258 | | | | | | — | | | | | | — | | |
Income before income tax expense
|
| | | | 115,511 | | | | | | 8,214 | | | | | | 12,428 | | |
Income tax expense
|
| | | | (6,367) | | | | | | (3,185) | | | | | | (4,944) | | |
Net income
|
| | | $ | 109,144 | | | | | $ | 5,029 | | | | | $ | 7,484 | | |
Weighted average number of common shares outstanding | | | | | |||||||||||||||
Basic
|
| | | | 2,921,208 | | | | | | 3,103,728 | | | | | | 3,239,306 | | |
Diluted
|
| | | | 2,921,208 | | | | | | 3,168,161 | | | | | | 3,313,641 | | |
Basic net income per common share
|
| | | $ | 37.36 | | | | | $ | 1.62 | | | | | $ | 2.31 | | |
Diluted net income per common share
|
| | | $ | 37.36 | | | | | $ | 1.59 | | | | | $ | 2.26 | | |
| | |
Class A
Common Stock |
| |
Class B
Common Stock |
| |
Additional
Paid-In Capital |
| |
Retained
(Deficit) |
| |
Total
Stockholder’s (Deficit) |
| ||||||||||||||||||||||||||||||||||
| | |
Shares
|
| |
Amount
|
| |
Shares
|
| |
Amount
|
| |||||||||||||||||||||||||||||||||||||
Balance, December 31, 2012
|
| | | | 13,221,404 | | | | | $ | 132 | | | | | | — | | | | | $ | — | | | | | $ | — | | | | | $ | (141,730) | | | | | $ | (141,598) | | | |||||||
Net income
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 109,144 | | | | | | 109,144 | | | |||||||
Cancellation of Class A stock
|
| | | | (13,221,404) | | | | | | (132) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (132) | | | |||||||
Issuance of Class A Stock
|
| | | | 2,870,948 | | | | | | 29 | | | | | | | | | | | | | | | | | | 106 | | | | | | | | | | | | 135 | | | |||||||
Issuance of Class B Stock
|
| | | | | | | | | | | | | | | | 232,780 | | | | | | 2 | | | | | | 2,770 | | | | | | | | | | | | 2,772 | | | |||||||
Balance, December 31, 2013
|
| | | | 2,870,948 | | | | | $ | 29 | | | | | | 232,780 | | | | | $ | 2 | | | | | $ | 2,876 | | | | | $ | (32,586) | | | | | $ | (29,679) | | | |||||||
Net income
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 5,029 | | | | | | 5,029 | | | |||||||
Stock-based compensation expense
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | 643 | | | | | | | | | | | | 643 | | | |||||||
Issuance of Class A Stock
|
| | | | 10,206 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | — | | | |||||||
Balance, December 31, 2014
|
| | | | 2,881,154 | | | | | $ | 29 | | | | | | 232,780 | | | | | $ | 2 | | | | | $ | 3,519 | | | | | $ | (27,557) | | | | | $ | (24,007) | | | |||||||
Net income
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 7,484 | | | | | | 7,484 | | | |||||||
Stock-based compensation expense
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | 362 | | | | | | | | | | | | 362 | | | |||||||
Issuance of Class A Stock
|
| | | | 133,945 | | | | | | 1 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 1 | | | |||||||
Balance, December 31, 2015
|
| | | | 3,015,099 | | | | | $ | 30 | | | | | | 232,780 | | | | | $ | 2 | | | | | $ | 3,881 | | | | | $ | (20,073) | | | | | $ | (16,160) | | | |||||||
|
| | |
Years Ended December 31
|
| ||||||||||||||||||
| | |
2013
|
| |
2014
|
| |
2015
|
| ||||||||||||
Cash flows from operating activities: | | | | | ||||||||||||||||||
Net income
|
| | | $ | 109,144 | | | | | $ | 5,029 | | | | | $ | 7,484 | | | |||
Adjustments to reconcile net income to cash flows provided
by operating activities: |
| | | | ||||||||||||||||||
Depreciation
|
| | | | 9,650 | | | | | | 8,941 | | | | | | 7,678 | | | |||
Amortization
|
| | | | 2,982 | | | | | | 1,642 | | | | | | 1,200 | | | |||
Amortization of loan costs
|
| | | | 1,071 | | | | | | 936 | | | | | | 880 | | | |||
Amortization of notes payable premium
|
| | | | (31) | | | | | | — | | | | | | — | | | |||
Provision for deferred income taxes
|
| | | | 6,157 | | | | | | 2,692 | | | | | | 1,882 | | | |||
Excess tax benefit from stock-based compensation
|
| | | | — | | | | | | 249 | | | | | | 144 | | | |||
Provision for uncollectible accounts receivable
|
| | | | 418 | | | | | | 476 | | | | | | 442 | | | |||
Stock-based compensation
|
| | | | — | | | | | | 643 | | | | | | 362 | | | |||
Changes in operating assets and liabilities
|
| | | | ||||||||||||||||||
Accounts receivable
|
| | | | 3,442 | | | | | | (128) | | | | | | (11) | | | |||
Material and supplies
|
| | | | 191 | | | | | | (261) | | | | | | 9 | | | |||
Prepaid expenses and other assets
|
| | | | 44 | | | | | | (1,486) | | | | | | 878 | | | |||
Accounts payable and accrued expenses
|
| | | | 334 | | | | | | (534) | | | | | | 227 | | | |||
Advanced billings and payments
|
| | | | (191) | | | | | | (67) | | | | | | (45) | | | |||
Other liabilities
|
| | | | (351) | | | | | | (10) | | | | | | (117) | | | |||
Reorganization adjustments:
|
| | | | ||||||||||||||||||
Non-cash reorganization income
|
| | | | (114,210) | | | | | | — | | | | | | — | | | |||
Net cash from operating activities
|
| | | | 18,650 | | | | | | 18,122 | | | | | | 21,013 | | | |||
Cash flows used in investing activities: | | | | | ||||||||||||||||||
Acquisition and construction of property and equipment
|
| | | | (6,229) | | | | | | (6,015) | | | | | | (6,612) | | | |||
Proceeds from sale of property and equipment
|
| | | | — | | | | | | 58 | | | | | | — | | | |||
Purchase of investment
|
| | | | — | | | | | | (1) | | | | | | — | | | |||
Purchase of Reliable Networks, net of cash acquired
|
| | | | — | | | | | | (500) | | | | | | — | | | |||
Net cash used in investing activities
|
| | | | (6,229) | | | | | | (6,458) | | | | | | (6,612) | | | |||
Cash flows used in financing activities: | | | | | ||||||||||||||||||
Principal repayment of long-term notes payable
|
| | | | (33,368) | | | | | | (16,498) | | | | | | (12,083) | | | |||
Loan origination costs
|
| | | | (1,653) | | | | | | — | | | | | | (516) | | | |||
Net cash used in financing activities
|
| | | | (35,021) | | | | | | (16,498) | | | | | | (12,599) | | | |||
Net increase (decrease) in cash and cash equivalents
|
| | | | (22,600) | | | | | | (4,834) | | | | | | 1,802 | | | |||
Cash and cash equivalents, beginning of period
|
| | | | 32,516 | | | | | | 9,916 | | | | | | 5,082 | | | |||
Cash and cash equivalents, end of period
|
| | | $ | 9,916 | | | | | $ | 5,082 | | | | | $ | 6,884 | | | |||
Supplemental disclosures of cash flow information: | | | | | ||||||||||||||||||
Interest paid
|
| | | $ | 8,581 | | | | | $ | 7,924 | | | | | $ | 7,016 | | | |||
Income taxes paid
|
| | | $ | 248 | | | | | $ | 1,535 | | | | | $ | 2,414 | | | |||
Loan fees paid via issuance of Class B common stock
|
| | | $ | 2,772 | | | | | $ | — | | | | | $ | — | | | |||
Cancellation of Class A common stock
|
| | | $ | 132 | | | | | $ | — | | | | | $ | — | | | |||
Issuance of Class A common stock
|
| | | $ | 29 | | | | | $ | — | | | | | $ | 1 | | | |||
|
| | |
December 31, 2013
|
| ||||||||||||||||||
| | |
Carrying Value
|
| |
Accumulated
Amortization |
| |
Net Book Value
|
| ||||||||||||
Customer relationships
|
| | | $ | 23,701 | | | | | $ | (19,632) | | | | | $ | 4,069 | | | |||
Contract relationships
|
| | | | 19,600 | | | | | | (19,600) | | | | | | — | | | |||
Non-competition
|
| | | | 83 | | | | | | (83) | | | | | | — | | | |||
Trade name
|
| | | | 9 | | | | | | (4) | | | | | | 5 | | | |||
Total
|
| | | $ | 43,393 | | | | | $ | (39,319) | | | | | $ | 4,074 | | | |||
|
| | |
December 31, 2014
|
| ||||||||||||||||||
| | |
Carrying Value
|
| |
Accumulated
Amortization |
| |
Net Book Value
|
| ||||||||||||
Customer relationships
|
| | | $ | 24,025 | | | | | $ | (20,880) | | | | | $ | 3,145 | | | |||
Contract relationships
|
| | | | 19,600 | | | | | | (19,600) | | | | | | — | | | |||
Non-competition
|
| | | | 107 | | | | | | (89) | | | | | | 18 | | | |||
Trade name
|
| | | | 23 | | | | | | (8) | | | | | | 15 | | | |||
Total
|
| | | $ | 43,755 | | | | | $ | (40,577) | | | | | $ | 3,178 | | | |||
|
| | |
December 31, 2015
|
| ||||||||||||||||||
| | |
Carrying Value
|
| |
Accumulated
Amortization |
| |
Net Book Value
|
| ||||||||||||
Customer relationships
|
| | | $ | 24,025 | | | | | $ | (21,685) | | | | | $ | 2,340 | | | |||
Contract relationships
|
| | | | 19,600 | | | | | | (19,600) | | | | | | — | | | |||
Non-competition
|
| | | | 107 | | | | | | (95) | | | | | | 12 | | | |||
Trade name
|
| | | | 23 | | | | | | (12) | | | | | | 11 | | | |||
Total
|
| | | $ | 43,755 | | | | | $ | (41,392) | | | | | $ | 2,363 | | | |||
|
| Aggregate amortization expense for the years ended December 31, | | | ||||||
|
2013
|
| | | $ | 2,597 | | | |
|
2014
|
| | | $ | 1,258 | | | |
|
2015
|
| | | $ | 815 | | | |
| Expected amortization expense for the years ending December 31, | | | ||||||
|
2016
|
| | | $ | 578 | | | |
|
2017
|
| | | | 458 | | | |
|
2018
|
| | | | 408 | | | |
|
2019
|
| | | | 389 | | | |
|
2020
|
| | | | 372 | | | |
|
Thereafter
|
| | | | 158 | | | |
|
Total
|
| | | $ | 2,363 | | | |
|
| | |
Estimated
Life |
| |
December 31,
|
| |||||||||||
| | |
2014
|
| |
2015
|
| |||||||||||
Land
|
| | | | | | $ | 1,164 | | | | | $ | 1,164 | | | ||
Building and improvements
|
| |
20 − 40
|
| | | | 12,528 | | | | | | 12,723 | | | ||
Telephone equipment
|
| |
6 − 20
|
| | | | 230,100 | | | | | | 233,099 | | | ||
Cable television equipment
|
| |
7
|
| | | | 11,945 | | | | | | 12,129 | | | ||
Furniture and equipment
|
| |
8 − 14
|
| | | | 3,036 | | | | | | 3,045 | | | ||
Vehicles
|
| |
7 − 9
|
| | | | 6,343 | | | | | | 6,516 | | | ||
Computer software equipment
|
| |
5 − 7
|
| | | | 15,984 | | | | | | 16,251 | | | ||
Internet equipment
|
| |
5
|
| | | | 3,829 | | | | | | 3,797 | | | ||
Total property and equipment
|
| | | | | | | 284,929 | | | | | | 288,724 | | | ||
Accumulated depreciation and amortization
|
| | | | | | | (233,692) | | | | | | (238,913) | | | ||
Net property and equipment
|
| | | | | | $ | 51,237 | | | | | $ | 49,811 | | | ||
|
| | |
December 31,
|
| |||||||||||
| | |
2014
|
| |
2015
|
| ||||||||
Carrier access bills receivable
|
| | | $ | 714 | | | | | $ | 570 | | | ||
NECA receivable
|
| | | | 1,078 | | | | | | 1,030 | | | ||
Receivables from Alabama Service Fund
|
| | | | 63 | | | | | | 59 | | | ||
Other miscellaneous
|
| | | | 76 | | | | | | 63 | | | ||
| | | | $ | 1,931 | | | | | $ | 1,722 | | | ||
|
| | |
December 31,
|
| |||||||||||
| | |
2014
|
| |
2015
|
| ||||||||
Investment in CoBank stock
|
| | | $ | 1,475 | | | | | $ | 1,475 | | | ||
Rental property
|
| | | | 321 | | | | | | 296 | | | ||
Other miscellaneous
|
| | | | 74 | | | | | | 75 | | | ||
| | | | $ | 1,870 | | | | | $ | 1,846 | | | ||
|
| | |
December 31,
|
| |||||||||||
| | |
2014
|
| |
2015
|
| ||||||||
Third amended and restated term credit facility; Antares Capital (formerly
General Electric Capital Corporation); variable interest rate of 6.5% at December 31, 2014 and December 31, 2015. The Credit Facility was secured by the total assets of the subsidiary guarantors. The unpaid balance was scheduled to be due April 30, 2016. |
| | | $ | 112,135 | | | | | $ | 100,052 | | | ||
Less: current portion
|
| | | | (6,665) | | | | | | (3,000) | | | ||
Long-term notes payable
|
| | | $ | 105,470 | | | | | $ | 97,052 | | | ||
|
| | |
For the Years Ended December 31,
|
| ||||||||||||||||||
| | |
2013
|
| |
2014
|
| |
2015
|
| ||||||||||||
Federal income taxes | | | | | ||||||||||||||||||
Current
|
| | | $ | 210 | | | | | $ | 230 | | | | | $ | 2,552 | | | |||
Deferred
|
| | | | 5,528 | | | | | | 2,380 | | | | | | 1,661 | | | |||
Total federal tax expense
|
| | | | 5,738 | | | | | | 2,610 | | | | | | 4,213 | | | |||
State income taxes | | | | | ||||||||||||||||||
Current
|
| | | | — | | | | | | 14 | | | | | | 366 | | | |||
Deferred
|
| | | | 629 | | | | | | 561 | | | | | | 365 | | | |||
Total state tax expense
|
| | | | 629 | | | | | | 575 | | | | | | 731 | | | |||
Total income tax expense
|
| | | $ | 6,367 | | | | | $ | 3,185 | | | | | $ | 4,944 | | | |||
|
| | |
December 31,
|
| |||||||||||
| | |
2014
|
| |
2015
|
| ||||||||
Deferred tax liabilities: | | | | ||||||||||||
Amortization
|
| | | $ | (14,871) | | | | | $ | (16,107) | | | ||
Depreciation
|
| | | | (10,358) | | | | | | (10,541) | | | ||
Prepaid expense
|
| | | | (600) | | | | | | (415) | | | ||
State net operating loss carryforwards and adjustments
|
| | | | — | | | | | | (49) | | | ||
Other
|
| | | | (14) | | | | | | (13) | | | ||
Total deferred tax liabilities
|
| | | $ | (25,843) | | | | | $ | (27,125) | | | ||
Deferred tax assets: | | | | ||||||||||||
Amortized intangibles
|
| | | $ | 502 | | | | | $ | — | | | ||
State net operating loss carryforwards and adjustments
|
| | | | 27 | | | | | | — | | | ||
Deferred compensation
|
| | | | 297 | | | | | | 234 | | | ||
Advance payments
|
| | | | 286 | | | | | | 266 | | | ||
Bad debt
|
| | | | 100 | | | | | | 169 | | | ||
Other
|
| | | | 551 | | | | | | 350 | | | ||
Total net deferred tax assets
|
| | | $ | 1,763 | | | | | $ | 1,019 | | | ||
|
| | |
For the Years Ended December 31,
|
| |||||||||||||||
| | |
2013
|
| |
2014
|
| |
2015
|
| |||||||||
Federal income tax at statutory rate
|
| | | | 35% | | | | | | 35% | | | | | | 35% | | |
Federal income tax provision at statutory rate
|
| | | $ | 40,428 | | | | | $ | 2,875 | | | | | $ | 4,349 | | |
State income tax provision, net of federal income
tax effects |
| | | | 408 | | | | | | 339 | | | | | | 475 | | |
Cancellation of debt (non-taxable)
|
| | | | (37,681) | | | | | | — | | | | | | — | | |
Restructuring expense
|
| | | | 1,974 | | | | | | — | | | | | | — | | |
Valuation allowance
|
| | | | 1,288 | | | | | | — | | | | | | — | | |
Other
|
| | | | (50) | | | | | | (29) | | | | | | 120 | | |
Provision for income taxes
|
| | | | 6,367 | | | | | | 3,185 | | | | | | 4,944 | | |
Effective income tax rate
|
| | | | 5.5% | | | | | | 38.8% | | | | | | 39.8% | | |
| | |
For the Years Ended December 31,
|
| |||||||||||||||
| | |
2013
|
| |
2014
|
| |
2015
|
| |||||||||
Weighted average number of common shares outstanding – basic
|
| | | | 2,921,208 | | | | | | 3,103,728 | | | | | | 3,239,306 | | |
Effect of dilutive securities
|
| | | | — | | | | | | 64,433 | | | | | | 74,335 | | |
Weighted average number of common shares and potential common shares − diluted
|
| | | | 2,921,208 | | | | | | 3,168,161 | | | | | | 3,313,641 | | |
Net income
|
| | | $ | 109,144 | | | | | $ | 5,029 | | | | | $ | 7,484 | | |
Net income per common share − basic
|
| | | $ | 37.36 | | | | | $ | 1.62 | | | | | $ | 2.31 | | |
Net income per common share − diluted
|
| | | $ | 37.36 | | | | | $ | 1.59 | | | | | $ | 2.26 | | |
| | |
Carrying Value
|
| |
Fair Value
|
| ||||||
Notes Payable December 31, 2014
|
| | | $ | 112,135 | | | | | $ | 120,580 | | |
Notes Payable December 31, 2015
|
| | | $ | 100,052 | | | | | $ | 102,076 | | |
|
2016
|
| | | $ | 481 | | | |
|
2017
|
| | | | 327 | | | |
|
2018
|
| | | | 230 | | | |
|
2019
|
| | | | 102 | | | |
|
2020
|
| | | | 85 | | | |
|
Thereafter
|
| | | | 141 | | | |
|
Total
|
| | | $ | 1,366 | | | |
|
| | |
RSUs
|
| |
Weighted Average
Grant Date Fair Value |
| ||||||||
Outstanding at December 31, 2014
|
| | | | 113,961 | | | | | $ | 4.96 | | | ||
Granted
|
| | | | 122,534 | | | | | $ | 4.71 | | | ||
Vested
|
| | | | (65,712) | | | | | $ | 4.96 | | | ||
Forfeited or cancelled
|
| | | | (15,022) | | | | | $ | 4.96 | | | ||
Outstanding at December 31, 2015
|
| | | | 155,761 | | | | | $ | 4.78 | | | ||
|
| | |
First
Quarter |
| |
Second
Quarter |
| |
Third
Quarter |
| |
Fourth
Quarter |
| ||||||||||||
Fiscal 2014: | | | | | | ||||||||||||||||||||
Revenue
|
| | | $ | 18,783 | | | | | $ | 18,488 | | | | | $ | 18,421 | | | | | $ | 18,178 | | |
Operating income
|
| | | $ | 3,973 | | | | | $ | 4,438 | | | | | $ | 4,625 | | | | | $ | 3,822 | | |
Net income
|
| | | $ | 1,394 | | | | | $ | 1,308 | | | | | $ | 1,387 | | | | | $ | 940 | | |
Net income per common share – basic
|
| | | $ | 0.45 | | | | | $ | 0.42 | | | | | $ | 0.45 | | | | | $ | 0.30 | | |
Net income per common share – diluted
|
| | | $ | 0.45 | | | | | $ | 0.42 | | | | | $ | 0.44 | | | | | $ | 0.29 | | |
Fiscal 2015: | | | | | | ||||||||||||||||||||
Revenue
|
| | | $ | 17,643 | | | | | $ | 17,892 | | | | | $ | 17,850 | | | | | $ | 17,717 | | |
Operating income
|
| | | $ | 4,508 | | | | | $ | 4,765 | | | | | $ | 4,910 | | | | | $ | 5,072 | | |
Net income
|
| | | $ | 2,135 | | | | | $ | 1,655 | | | | | $ | 1,850 | | | | | $ | 1,844 | | |
Net income per common share – basic
|
| | | $ | 0.66 | | | | | $ | 0.51 | | | | | $ | 0.57 | | | | | $ | 0.57 | | |
Net income per common share – diluted
|
| | | $ | 0.65 | | | | | $ | 0.50 | | | | | $ | 0.56 | | | | | $ | 0.54 | | |
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
|
| | | | 155,761(1) | | | | | | —(2) | | | | | | 113,180 | | | |||
Equity compensation plans not approved by stockholders
|
| | | | — | | | | | | — | | | | | | — | | | |||
Total
|
| | | | 155,761 | | | | | | — | | | | | | 113,180 | | | |||
|
| | | | | 31 | | | |
| | | | | 33 | | | |
| | | | | 34 | | | |
| | | | | 35 | | | |
| | | | | 36 | | | |
| | | | | 37 | | |
Exhibit No.
|
| |
Description
|
|
3.1 | | |
Amended and Restated Certificate of Incorporation of Otelco Inc. (filed as Exhibit 3.1 to the Company’s Registration Statement on Form 8-A (File No. 001-32352) filed on May 24, 2013 and incorporated herein by reference)
|
|
3.2 | | |
Fourth Amended and Restated By-laws of Otelco Inc., as amended (filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on March 31, 2014 and incorporated herein by reference)
|
|
4.1 | | |
Form of stock certificate for Class A common stock, $0.01 par value per share (filed as Exhibit 4.1 to the Company’s Registration Statement on Form 8-A (File No. 001-32352) filed on May 24, 2013 and incorporated herein by reference)
|
|
4.2 | | |
Form of stock certificate for Class B common stock, $0.01 par value per share (filed as Exhibit 4.4 to the Company’s Current Report on Form 8-K filed on May 24, 2013 and incorporated herein by reference)
|
|
10.1 | | |
Amended and Restated Employment Agreement, dated as of March 11, 2009, between Otelco Inc. and Curtis L. Garner, Jr. (filed as Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on March 11, 2009 and incorporated herein by reference)*
|
|
10.2 | | |
Employment Agreement, dated as of August 24, 2006, between Otelco Inc. and Dennis Andrews (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on August 29, 2006 and incorporated herein by reference)*
|
|
10.3 | | |
Employment Agreement, dated as of November 15, 2006, between Otelco Inc. and Jerry C. Boles (filed as Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on November 15, 2006 and incorporated herein by reference)*
|
|
10.4 | | |
Amendment, dated as of December 17, 2008, to the Employment Agreement, dated as of August 24, 2006, between Otelco Inc. and Dennis Andrews (filed as Exhibit 10.10 to the Company’s Annual Report on Form 10-K filed on March 11, 2009 and incorporated herein by reference)*
|
|
10.5 | | |
Amendment, dated as of December 17, 2008, to the Employment Agreement, dated as of November 15, 2006, between Otelco Inc. and Jerry C. Boles (filed as Exhibit 10.11 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2008 and incorporated herein by reference)*
|
|
10.6 | | |
Third Amended and Restated Employment Agreement, dated as of December 10, 2014, between Otelco Inc. and Robert Souza (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on December 10, 2014 and incorporated herein by reference)*
|
|
Exhibit No.
|
| |
Description
|
|
10.7 | | | Otelco Inc. 2014 Stock Incentive Plan (filed as Appendix A to the Company’s Definitive Proxy Statement on Schedule 14A filed on April 11, 2014 and incorporated herein by reference)* | |
10.8 | | |
Amendment, dated as of March 5, 2010, to the Amended and Restated Employment Agreement, dated as of March 11, 2009, between Otelco Inc. and Curtis L. Garner, Jr. (filed as Exhibit 10.14 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2009 and incorporated herein by reference)*
|
|
10.9 | | |
Second Amendment, dated as of March 4, 2011, to the Employment Agreement, dated as of August 24, 2006, between Otelco Inc. and Dennis Andrews, as previously amended on December 17, 2008 (filed as Exhibit 10.14 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2010 and incorporated herein by reference)*
|
|
10.10 | | |
Second Amendment, dated as of March 4, 2011, to the Employment Agreement, dated as of November 15, 2006, between Otelco Inc. and Jerry C. Boles, as previously amended on December 17, 2008 (filed as Exhibit 10.15 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2010 and incorporated herein by reference)*
|
|
10.11 | | |
Amended and Restated Employment Agreement, dated as of April 10, 2009, between Otelco Inc. and Edwin D. Tisdale (filed as Exhibit 10.18 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2010 and incorporated herein by reference)*
|
|
10.12 | | |
Amendment, dated as of March 4, 2011, to the Amended and Restated Employment Agreement, dated as of April 10, 2009, between Otelco Inc. and Edwin D. Tisdale (filed as Exhibit 10.19 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2010 and incorporated herein by reference)*
|
|
10.13 | | |
Employment Agreement, dated as of March 4, 2013, between Otelco Inc. and E. Todd Wessing (filed as Exhibit 10.17 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2013 and incorporated herein by reference)*
|
|
10.14 | | |
Loan Agreement, dated as of January 25, 2016, by and among Otelco Inc., as borrower, each subsidiary of Otelco Inc. listed as a guarantor on the signature pages thereto, as guarantors, the lenders from time to time party thereto, as lenders, and Cerberus Business Finance, LLC, as collateral agent and as administrative agent (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on January 25, 2016 and incorporated herein by reference)
|
|
10.15 | | |
Subordinated Loan Agreement, dated as of January 25, 2016, by and among Otelco Inc. and the subsidiaries of Otelco Inc. set forth on Appendix I thereto, as borrowers, the investors party thereto from time to time, as investors, and NewSpring Mezzanine Capital III, L.P., as an investor and as collateral agent (filed as Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on January 25, 2016 and incorporated herein by reference)
|
|
10.16 | | |
Amendment No. 1, dated as of February 17, 2016, to Subordinated Loan Agreement, dated as of January 25, 2016, by and among Otelco Inc. and the subsidiaries of Otelco Inc. set forth on Appendix I thereto, as borrowers, the investors party thereto from time to time, as investors, and NewSpring Mezzanine Capital III, L.P., as an investor and as collateral agent (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on February 17, 2016 and incorporated herein by reference)
|
|
12.1 | | | Computation of Ratio of Earnings to Fixed Charges | |
21.1 | | | List of subsidiaries of Otelco Inc. | |
23.1 | | | Consent of BDO USA, LLP, Independent Registered Public Accounting Firm | |
31.1 | | |
Certificate pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934 of the Chief Executive Officer
|
|
31.2 | | |
Certificate pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934 of the Chief Financial Officer
|
|
32.1 | | |
Certificate pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, of the Chief Executive Officer
|
|
Exhibit No.
|
| |
Description
|
|
32.2 | | |
Certificate pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, of the Chief Financial Officer
|
|
101 | | |
The following information from the Company’s Annual Report on Form 10-K for the year ended December 31, 2015 formatted in Extensible Business Reporting Language (XBRL): (i) Consolidated Balance Sheets; (ii) Consolidated Statements of Operations; (iii) Consolidated Statements of Stockholders’ Deficit; (iv) Consolidated Statements of Cash Flows; and (v) Notes to Consolidated Financial Statements
|
|
| OTELCO INC. | | |||
| By: | | |
/s/ Robert J. Souza
|
|
| | | | Robert J. Souza President and Chief Executive Officer |
|
Signature
|
| |
Title
|
| |
Date
|
|
/s/ Robert J. Souza
Robert J. Souza
|
| | President, Chief Executive Officer and Director (Principal Executive Officer) | | | March 11, 2016 | |
/s/ Curtis L. Garner, Jr.
Curtis L. Garner, Jr.
|
| | Chief Financial Officer and Director (Principal Financial and Accounting Officer) |
| | March 11, 2016 | |
/s/ Stephen P. McCall
Stephen P. McCall
|
| | Chairman and Director | | | March 11, 2016 | |
/s/ Norman C. Frost
Norman C. Frost
|
| | Director | | | March 11, 2016 | |
/s/ Howard J. Haug
Howard J. Haug
|
| | Director | | | March 11, 2016 | |
/s/ Brian A. Ross
Brian A. Ross
|
| | Director | | | March 11, 2016 | |
/s/ Gary L. Sugarman
Gary L. Sugarman
|
| | Director | | | March 11, 2016 | |
| | |
Years Ended December 31,
|
| |||||||||||||||||||||||||||
| | |
2011
|
| |
2012
|
| |
2013
|
| |
2014
|
| |
2015
|
| |||||||||||||||
Fixed Charges | | | | | | | |||||||||||||||||||||||||
Interest expense
|
| | | $ | 24,776 | | | | | $ | 22,932 | | | | | $ | 12,673 | | | | | $ | 8,854 | | | | | $ | 7,894 | | |
Earnings | | | | | | | |||||||||||||||||||||||||
Income (loss) before income taxes
|
| | | $ | 2,447 | | | | | $ | (151,767) | | | | | $ | 115,511 | | | | | $ | 8,214 | | | | | $ | 12,428 | | |
Add: Interest expense
|
| | | | 24,776 | | | | | | 22,932 | | | | | | 12,673 | | | | | | 8,854 | | | | | | 7,894 | | |
Total Earnings
|
| | | $ | 27,223 | | | | | $ | (128,835) | | | | | $ | 128,184 | | | | | $ | 17,068 | | | | | $ | 20,322 | | |
Ratio of earnings to fixed charges
|
| | | | 1.1x | | | | | | (5.6)x | | | | | | 10.1x | | | | | | 1.9x | | | | | | 2.6x | | |
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/ Robert J. Souza | |
| Robert J. Souza President & Chief Executive Officer |
|
| /s/ Curtis L. Garner, Jr. | |
| Curtis L. Garner, Jr. Chief Financial Officer |
|
| /s/ Robert J. Souza | |
| Robert J. Souza President & Chief Executive Officer March 11, 2016 |
|
| /s/ Curtis L. Garner, Jr. | |
| Curtis L. Garner, Jr. Chief Financial Officer March 11, 2016 |
|
Document And Entity Information - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Mar. 11, 2016 |
Jun. 30, 2015 |
|
Common Class A [Member] | |||
Entity Common Stock, Shares Outstanding (in shares) | 3,071,828 | ||
Common Class B [Member] | |||
Entity Common Stock, Shares Outstanding (in shares) | 0 | ||
Entity Registrant Name | OTELCO INC. | ||
Entity Central Index Key | 0001288359 | ||
Trading Symbol | otel | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Public Float | $ 14,793,001 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2015 | ||
Document Fiscal Year Focus | 2015 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false |
Consolidated Balance Sheets (Parentheticals) - USD ($) $ in Thousands |
Dec. 31, 2015 |
Dec. 31, 2014 |
---|---|---|
Common Class A [Member] | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, authorized (in shares) | 10,000,000 | 10,000,000 |
Common stock, issued (in shares) | 3,015,099 | 2,881,154 |
Common stock, outstanding (in shares) | 3,015,099 | 2,881,154 |
Common Class B [Member] | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, authorized (in shares) | 250,000 | 250,000 |
Common stock, issued (in shares) | 232,780 | 232,780 |
Common stock, outstanding (in shares) | 232,780 | 232,780 |
Allowance for doubtful accounts | $ 258 | $ 229 |
Consolidated Statements of Stockholders' Deficit - USD ($) $ in Thousands |
Common Class A [Member]
Common Stock [Member]
|
Common Class A [Member]
Additional Paid-in Capital [Member]
|
Common Class A [Member] |
Common Class B [Member]
Common Stock [Member]
|
Common Class B [Member]
Additional Paid-in Capital [Member]
|
Common Class B [Member] |
Additional Paid-in Capital [Member] |
Retained Earnings [Member] |
Total |
---|---|---|---|---|---|---|---|---|---|
Balance, shares (in shares) at Dec. 31, 2012 | 13,221,404 | ||||||||
Balance at Dec. 31, 2012 | $ 132 | $ (141,730) | $ (141,598) | ||||||
Net income | 109,144 | 109,144 | |||||||
Cancellation of Class A stock (in shares) | (13,221,404) | ||||||||
Cancellation of Class A stock | $ (132) | (132) | |||||||
Issuance of Common Stock (in shares) | 2,870,948 | 232,780 | |||||||
Issuance of Common Stock | $ 29 | $ 106 | $ 135 | $ 2 | $ 2,770 | $ 2,772 | |||
Balance, shares (in shares) at Dec. 31, 2013 | 2,870,948 | 232,780 | |||||||
Balance at Dec. 31, 2013 | $ 29 | $ 2 | $ 2,876 | (32,586) | (29,679) | ||||
Net income | 5,029 | 5,029 | |||||||
Issuance of Common Stock (in shares) | 10,206 | ||||||||
Balance, shares (in shares) at Dec. 31, 2014 | 2,881,154 | 232,780 | |||||||
Balance at Dec. 31, 2014 | $ 29 | $ 2 | 3,519 | (27,557) | (24,007) | ||||
Stock-based compensation expense | 643 | 643 | |||||||
Net income | 7,484 | 7,484 | |||||||
Issuance of Common Stock (in shares) | 133,945 | ||||||||
Issuance of Common Stock | $ 1 | $ 1 | |||||||
Balance, shares (in shares) at Dec. 31, 2015 | 3,015,099 | 232,780 | |||||||
Balance at Dec. 31, 2015 | $ 30 | $ 2 | 3,881 | $ (20,073) | (16,160) | ||||
Stock-based compensation expense | $ 362 | $ 362 |
Note 1 - Nature of Business |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 | |||
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 and legacy dial-up internet access; cable, satellite and Internet Protocol television; other telephone related services; and cloud hosting and managed services. The principal markets for these services are business and residential customers residing in and adjacent to the exchanges the Company serves in Alabama, Massachusetts, Maine, Missouri, Vermont, and West Virginia. In addition, the Company serves business customers throughout Maine and New Hampshire and provides legacy dial-up internet service throughout the states of Maine and Missouri. The Company offers various communications services that are sold to economically similar customers in a comparable manner of distribution. The Company also offers cloud hosting and managed services for small and mid-sized companies who rely on mission-critical software applications. The majority of customers buy multiple services, often bundled together at a single price. The Company views, manages and evaluates the results of its operations from the various communications services as one company and therefore has identified one reporting segment as it relates to providing segment information. Reorganization On March 24, 2013, the Company and each of its then direct and indirect subsidiaries filed voluntary petitions for reorganization (the “Reorganization Cases”) under chapter 11 of title 11 of the United States Code in the United States Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”) in order to effectuate their prepackaged Chapter 11 plan of reorganization (the “Plan”). On May 6, 2013, the Bankruptcy Court entered an order confirming the Plan. On May 24, 2013 (the “Effective Date”), the Company substantially consummated its reorganization through a series of transactions contemplated by the Plan, and the Plan became effective pursuant to its terms. On August 22, 2013, the Bankruptcy Court issued a final decree closing the Reorganization Cases. When the Plan became effective, the $162.0 million of outstanding principal term loan obligations under the Company’s then outstanding credit facility (the “Credit Facility”) was reduced to $133.3 million through a cash payment of $28.7 million. Also in connection with the Plan, the maturity of the outstanding principal term loan obligations and any revolving loan obligations under the Credit Facility was extended to April 30, 2016 and the holders of the outstanding principal term loan obligations received their pro rata share of the Company’s new Class B common stock, which represented 7.5% of the Company’s total economic and voting interest immediately following the effectiveness of the Plan. Certain revolving loan commitments under the Credit Facility were also reinstated, with availability of up to $5.0 million. Under the Plan, the Company’s outstanding senior subordinated notes (“Notes”) were cancelled and the holders of outstanding Notes received their pro rata share of the Company’s new Class A common stock, which represented 92.5% of the Company’s total economic and voting interests immediately following the effectiveness of the Plan, and the outstanding shares of the Company’s old common stock were cancelled. As of the Effective Date, a total of 2,870,948 shares of the Company’s new Class A common stock and 232,780 shares of the Company’s new Class B common stock were issued and outstanding, and 232,780 shares of the Company’s new Class A common stock were reserved for the future issuance upon the conversion of the Company’s new Class B common stock. The Company’s emergence from bankruptcy did not qualify for fresh-start accounting in accordance with Accounting Standards Codification (“ASC”) 852, Reorganization , as immediately following the effectiveness of the Plan, more than 50.0% of the Company’s new Class A common stock was held by persons who also held the Company’s old common stock. |
Note 2 - Summary of Significant Accounting Policies |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 | |||
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 the Company and its subsidiaries, all of which are either directly or indirectly wholly-owned. These include: Otelco Telecommunications LLC; Otelco Telephone LLC (“OTP”); Hopper Telecommunications LLC; Brindlee Mountain Telephone LLC; Blountsville Telephone LLC (“BTC”); Otelco Mid-Missouri LLC (“MMT”) and its wholly owned subsidiary I-Land Internet Services LLC; Mid-Maine Telecom LLC; Mid-Maine TelPlus LLC; Granby Telephone LLC; War Telephone LLC; Pine Tree Telephone LLC; Saco River Telephone LLC; Shoreham Telephone LLC; and CRC Communications LLC (“CRC”). The accompanying consolidated financial statements include the accounts of the Company and all of the aforesaid subsidiaries after elimination of all material intercompany balances and transactions. Use of Estimates The Company prepares its consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”), which require management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and disclosure of contingent assets and liabilities. The estimates and assumptions used in the accompanying consolidated financial statements are based upon management’s evaluation of the relevant facts and circumstances as of the date of the financial statements. Actual results may differ from the estimates and assumptions used in preparing the accompanying consolidated financial statements. Significant accounting estimates include the recoverability of goodwill, identified intangibles, long-term assets, deferred tax valuation allowances and allowance for bad debt. Regulatory Accounting The Company follows the accounting for regulated enterprises, which is now part of ASC 980, Regulated Operations (“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, 2014 and 2015, 75.3% and 76.5%, respectively, of the Company’s net property, plant and equipment was accounted for under ASC 980. The Company is subject to reviews and audits by regulatory agencies. The effect of these reviews and audits, if any, will be recorded in the period in which they first become known and determinable. Intangible Assets and Goodwill Intangible assets consist primarily of the fair values of customer related intangibles, non-compete agreements and long-term customer contracts acquired in connection with business combinations. Goodwill represents the excess of total acquisition cost over the assigned value of net identifiable tangible and intangible assets acquired through various business combinations, less any impairment. Due to the regulatory accounting required by ASC 980, the Company did not record acquired regulated telecommunications property and equipment at fair value as required by ASC 805, Business Combinations , 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. Revenue Recognition Local services . Local services revenue for monthly recurring local services is billed in advance to a portion of the Company’s customers and in arrears to the balance of the customers. The Company records revenue for charges that have not yet been invoiced to its customers as unbilled revenue when services are rendered. The Company records revenue billed in advance as advance billings and defers recognition until such revenue is earned. Long distance service is billed to customers in arrears based on actual usage except when it is included in service bundles. The Company records unbilled long distance revenue as unbilled revenue when services are rendered. In bundles, unlimited usage is billed in arrears at a flat rate. Network access . Network access revenue is derived from several sources. Revenue for interstate access services is received through tariffed access charges filed with the Federal Communications Commission (“FCC”). Eight of the Company’s RLECs utilize the National Exchange Carrier Association (“NECA”), who files tariffs with the FCC on behalf of the NECA member companies. These access charges are billed by the Company to interstate interexchange carriers and pooled with like-revenues from all NECA member companies. A portion of the pooled 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 pooled access charge revenue received by the Company is based upon the nationwide average schedule costs of providing interstate access services. Three of the Company’s RLECs utilize the NECA to file common line tariffs with the FCC, and pool the common line access charge revenues. These three RLECs also file Traffic Sensitive tariffs directly with the FCC, and bill and keep the Traffic Sensitive access revenues. 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. Revenue for intrastate access service is received through tariffed access charges billed by the Company to the originating intrastate carrier using access rates filed with the Alabama Public Service Commission (“APSC”), the Maine Public Utilities Commission (“MPUC”), the Massachusetts Department of Telecommunications and Cable (“MDTC”), the Missouri Public Service Commission (“MPSC”), the New Hampshire Public Utilities Commission (“NHPUC”), the Vermont Public Service Board (“VPSB”) and the West Virginia Public Service Commission (“WVPSC”) and are retained by the Company. Revenue for the intrastate/interLATA access service is received through tariffed access charges as filed with the APSC, MDTC, MPSC, MPUC, NHPUC, VPSB and WVPSC. These access charges are billed to the intrastate carriers and are retained by the Company. Revenue for terminating and originating long distance service is received through charges for providing usage of the local exchange network. Toll revenues are recognized when services are rendered. The FCC’s Intercarrier Compensation order, issued in October 2011, has significantly changed the way telecommunication carriers receive compensation for exchanging traffic and state tariffed rates. All terminating intrastate rates that exceeded the interstate rate were reduced to the terminating interstate rate effective July 2014. Beginning in 2014, the interstate and intrastate rates will be reduced over three years to “bill and keep” in which carriers bill their customers for services and keep those charges but neither pay for nor receive compensation from traffic sent to or received from other carriers. In addition, subsidies to carriers serving high cost areas will be phased out over an extended period. Revenues for interstate access services are based on reimbursement of costs and an allowed rate of return. Revenues of this nature are received from the NECA in the form of monthly settlements. Such revenues amounted to 13.1%, 15.5%, and 17.4% of the Company’s total revenues for the years ended December 31, 2013, 2014, and 2015, respectively. Internet, tran sport service, cable and satellite television and cloud hosting and managed services . 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, 2014 and 2015 of $734 thousand and $681 thousand, respectively, related to transport 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 market value. Cost is determined using an average cost basis. Property and Equipment Regulated property and equipment is stated at original cost less any impairment. Unregulated property and equipment purchased through acquisitions is stated at its fair value at the date of acquisition less any impairment. Expenditures for improvements that significantly add to productive capacity or extend the useful life of an asset are capitalized. Expenditures for maintenance and repairs are expensed when incurred. Depreciation of regulated property and equipment is computed principally using the straight-line method over useful lives determined by the APSC, MDTC, MPSC, MPUC, NHPUC, VPSB and WVPSC as discussed above. Depreciation of unregulated property and equipment primarily employs the straight-line method over industry standard estimated useful lives. Long-Lived Assets The Company reviews its long-lived assets for impairment at each balance sheet date and whenever events or changes in circumstances indicate that the carrying amount of an asset should be assessed. To determine if impairment exists, the Company estimates the future undiscounted cash flows expected to result from the use of the asset being reviewed for impairment. If the sum of these expected future cash flows is less than the carrying amount of the asset, the Company recognizes an impairment loss in accordance with guidance included in ASC 360, Property, Plant, and Equipment . 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”. 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, 2015, there was no amount recorded for interest and penalties. The Company conducts business in multiple jurisdictions and, as a result, one or more subsidiaries file income tax returns in the U.S. federal, various state and local jurisdictions. All tax years since 2012 are open for examination by various tax authorities. Fair Value of Financial Instruments The carrying values of the Company’s financial instruments, including cash and cash equivalents, accounts receivable, prepaids, accounts payable and accrued liabilities, approximate their fair values as of December 31, 2014 and 2015 due to their short term nature. The fair value of debt instruments at December 31, 2014 and 2015 is disclosed in the notes to the consolidated financial statements. Income per Common Share The Company computes net income per common share in accordance with the provisions included in ASC 260, Earnings per Share (“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 During 2014, the FASB issued Accounting Standards Updates (“ASUs”) 2014-01 through 2014-18. Except for ASU 2014-09, ASU 2014-12 and ASU 2014-15, which are discussed below, these ASUs provide technical corrections or simplification to existing guidance and to specialized industries or entities and therefore have minimal, if any, impact on the Company. In June 2014, the FASB issued ASU 2014-12, Compensation-Stock Compensation (Topic 718): Account ing for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period . This ASU requires that a performance target that affects vesting, and that could be achieved after the requisite service period, be treated as a performance condition. The amendments in this ASU provide explicit guidance on whether to treat a performance target as a performance condition that affects vesting or as a non-vesting condition that affects the grant-date fair value of an award. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. The implementation of this ASU has not had a material impact on the Company’s consolidated financial position or results of operations.Recent Accounting Pronouncements In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) . 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. 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 606): Deferral of the Effective Date. This ASU confirmed a 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 current effective date, which is the first quarter of fiscal 2017. The Company is currently evaluating the impact of the pending adoption of ASU 2014-09 on its consolidated financial statements and has not yet determined the method by which the Company will adopt the standard.In August 2014, the FASB issued ASU 2014-15, Presentation of Financial Statements – Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. This ASU provides guidance on management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related disclosures in the notes to the financial statements. The amendments in this ASU should help reduce the diversity in the timing and content of disclosures in the notes to the financial statements. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016, with early adoption permitted. The implementation of this ASU is not expected to have a material impact on the Company’s consolidated financial position or results of operations. In April 2015, the FASB issued ASU 2015-03, Interest–Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs. This ASU provides guidance that simplifies the presentation of debt issuance costs by amending the accounting guidance to require that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of the related debt liability. The amendments are consistent with the accounting guidance related to debt discounts. This guidance is effective for the first interim or annual period beginning after December 15, 2015. The Company will adopt this guidance beginning in the first quarter of fiscal 2016. The Company assessed the implementation of this ASU is not expected to have a material impact on its consolidated financial statements.In April 2015, the FASB issued ASU 2015-05 , Intangibles–Goodwill and Other–Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement . This ASU provides guidance regarding whether a cloud computing arrangement includes a software license. If a cloud computing arrangement includes a software license, then the entity should account for the software license element of the arrangement consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, the entity should account for the arrangement as a service contract. The guidance will not change U.S. GAAP for an entity’s accounting for service contracts. This pronouncement is effective for fiscal years, including interim periods within those fiscal years, beginning after December 15, 2015. The Company assessed the implementation of this ASU is not expected to have a material impact on its consolidated financial statements. In July 2015, the FASB issued ASU 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory . This ASU provides guidance intended to simplify the accounting for inventory. Prior to this ASU, U.S. GAAP required an entity to measure inventory at the lower of cost or market. This pronouncement changed the measurement of inventory to the lower of cost or net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. Methods excluded from the scope of this ASU are the last-in, first-out or the retail inventory method and they will continue to be measured at the lower of cost or market. The amendments are effective for public business entities for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2016. Early adoption is permitted, and the Company is currently assessing the impact of this guidance on its consolidated financial statements.In November 2015, the FASB issued ASU 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes . This ASU provides guidance that simplifies the presentation of deferred income taxes. This ASU requires that deferred tax liabilities and assets be classified as noncurrent in a classified statement of financial position. This guidance is effective for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods. The implementation of this ASU is not expected to have a material impact on the Company’s consolidated financial position or results of operations. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) . 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. The Company is evaluating the requirements of this guidance and has not yet determined the impact of the adoption on the Company’s consolidated financial position or results of operations.Reclassifications Certain items in prior years’ consolidated financial statements have been reclassified to conform with 2015 presentation. |
Note 3 - Impairments |
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Asset Impairment Charges [Text Block] |
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.During the impairment review as of October 1, 2013, the Company determined there was no impairment and there is no change in the carrying amount of goodwill for the year ended December 31, 2013. The Company also found no impairment in the other intangible assets and the only change in the carrying amount for the year ended December 31, 2013 is due to the amortization for the current year. During the impairment review as of October 1, 2014, the Company determined there was no impairment. The only change in the carrying amount of goodwill for the year ended December 31, 2014 is due to the purchase of substantially all the assets of Reliable Networks of Maine, LLC (“Reliable Networks”) during the year (see note 9, Acquisition , below). The Company also found no impairment in the other intangible assets for the year ended December 31, 2014. The only change in carrying amount of other intangible assets is due to the purchase of substantially all of the assets of Reliable Networks and the amortization for the current year.During the impairment review as of October 1, 2015, the Company determined there was no impairment and there is no change in the carrying amount of goodwill for the year ended December 31, 2015. The Company also found no impairment in the other intangible assets and the only change in the carrying amount for the year ended December 31, 2015 is due to the amortization for the current year. |
Note 4 - Goodwill and 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 considers its three territories (Alabama, Missouri, and New England) to be reporting units for purposes of goodwill impairment testing. As of December 31, 2015, goodwill for Alabama, Missouri, and New England represented 87.2%, 12.8%, and less than 1 .0%, respectively, of total goodwill for the Company. The Company performed its annual goodwill impairment testing as of October 1, 2015 and concluded that no impairment was present in any of its reporting units. The Company determined that no events or circumstances from October 1, 2015 through December 31, 2015 indicated that a further assessment was necessary. There was no change in the carrying amounts of goodwill for Alabama and Missouri during 2015, with a balance of $39,199 thousand and $5,758 thousand, respectively as of both December 31, 2014 and 2015. During 2014, the carrying amount of goodwill for New England increased by $19 thousand, due to the purchase of substantially all of the assets of Reliable Networks, to a balance of $44,976 thousand as of December 31, 2014. There was no change in the carrying amount of goodwill for New England during 2015. Intangible assets are summarized as follows (in thousands):
These intangible assets had a range of 2 to 15 years of useful lives at inception and utilize both the sum-of-the-years’ digits and straight-line methods of amortization, as appropriate. The following tables present historical and expected amortization expense of the existing intangible assets as of December 31, 2015 for each of the following periods (in thousands):
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Note 5 - Property and Equipment |
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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, 2013, 2014 and 2015 was $9,650 thousand, $8,941 thousand and $7,678 thousand, respectively. Amortization expense for telephone plant adjustment was $384 thousand, $385 thousand and $385 thousand for the years ended December 31, 2013, 2014 and 2015, respectively. |
Note 6 - Other Accounts Receivables |
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Financing Receivables [Text Block] |
Other accounts receivable consist of the following (in thousands) as of:
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Note 7 - Investments |
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Investment [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 has, and in the past had, debt. These certificates yield dividends on an annual basis, and the investment is redeemed ratably subsequent to the repayment of the debt. |
Note 8 - Notes Payable |
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Debt Disclosure [Text Block] |
Notes payable consists of the following (in thousands, except percentages) as of:
Associated with these notes payable, the Company has capitalized and amortized deferred financing cost using the effective interest method. The Company has capitalized $2.7 million in deferred financing cost associated with the Credit Facility. Amortization expense for the deferred financing cost associated with the third amendment and restatement of the Credit Facility was $936 thousand and $880 thousand for the years ended December 31, 2014 and 2015, respectively. The Company had revolving credit facilities on December 31, 2014 and 2015 of $5.0 million, with commitments until April 30, 2016. There was no balance outstanding as of December 31, 2014 or 2015. The Company paid a commitment fee of 0.50% per annum, payable quarterly in arrears, on the unused portion of the revolver loan under the Credit Facility. The commitment fee expense was $25 thousand for the years ended December 31, 2014 and 2015, respectively. The Company’s notes payable agreements are subject to certain financial covenants and restrictions on indebtedness, financial guarantees, business combinations and other related items. As of December 31, 2015, the Company was in compliance with all such covenants and restrictions. On February 17, 2016, the Company paid all amounts due, including principal, interest and fees, and satisfied in full all of its obligations under the Credit Facility. See note 17, Subsequent Events , below. |
Note 9 - Acquisition |
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Mergers, Acquisitions and Dispositions Disclosures [Text Block] |
On January 2, 2014, the Company’s wholly-owned subsidiary, CRC, acquired substantially all of the assets of Reliable Networks, a Portland, Maine-based provider of cloud hosting and managed services for small and mid-sized companies who rely on mission-critical software applications. CRC paid $0.5 million net of cash acquired at the closing of the acquisition. The balance of the purchase price will be paid in Class A common stock over a three-year period , contingent on Reliable Networks achieving certain financial objectives and certain other conditions being satisfied. The results of operations from Reliable Networks are included in the Company’s consolidated results of operations beginning January 2, 2014. |
Note 10 - Income Tax |
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Income Tax Disclosure [Text Block] |
Income tax expense for the years ended December 31, 2013, 2014 and 2015 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, 2014 and 2015 are presented below (in thousands):
As of December 31, 2015, the Company had U.S. federal and state net operating loss carryforwards of $0 and $68 thousand, respectively. As of December 31, 2014, the Company had no U.S. federal or state net operating loss carryforwards. The Company had no alternative minimum tax credit carryforwards as of December 31, 2014 or December 31, 2015. The Company establishes valuation allowances when necessary to reduce deferred tax assets to amounts expected to be realized. As of December 31, 2015, the Company had no valuation allowance recorded. The effective income tax rates as of December 31, 2014 and December 31, 2015 were 38.8% and 39.8%, respectively. ASC 740 prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. For each year ended December 31, 2013, 2014 and 2015, the Company did not identify any material uncertain tax positions. Tax years from 2012 forward remain open for audit. Total income tax expense was different than that computed by applying U.S. federal income tax rates to income before income taxes for the years ended December 31, 2013, 2014 and 2015. The reasons for the differences are presented below (in thousands, except percentages):
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Note 11 - Employee Benefit Program |
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Pension and Other Postretirement Benefits Disclosure [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 $17.5 thousand for each of 2013, 2014 and 2015. During 2013, the Company matched the employee’s contribution up to 6 .0% of the employee’s annual compensation. The Company matched the employee’s contribution up to 4.5% of the employee’s annual compensation during 2014 and 2015. For the years ended December 31, 2013, 2014, and 2015, the total contributions and expense associated with this plan was $670 thousand, $494 thousand and $520 thousand, respectively. The employees of BTC participate in a multiemployer Retirement and Security Program (“RSP”) as a defined benefit plan and a Savings Plan (“SP”) provided through the National Telecommunications Cooperative Association (“NTCA”). The risks associated with participating in a multiemployer plan are different from a single-employer plan. Contributions to the multiemployer plan by the Company may be used to provide benefits to employees of other participating employers. If a participating employer stops contributing to the plan, the unfunded obligations of the plan may be borne by the remaining participating employers. Participation in the RSP requires a minimum employee contribution of 1 .0% of their annual compensation. For each of 2013, 2014 and 2015, the Company contributed 6 .0%, 4.5% and 4.5%, respectively, of their annual compensation for every participating employee. SP is a defined contribution savings plan under Section 401(k) of the Internal Revenue Code to which the Company made no contribution for 2013, 2014 or 2015. The employee can make voluntary contributions to the SP as desired. For the years ended December 31, 2013, 2014 and 2015, the total expense associated with these plans was $30 thousand, $15 thousand and $15 thousand, respectively. |
Note 12 - Net Income Per Common 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”), as well as all of the shares of Class A common stock, for which the Company has accrued an expense, that may be delivered pursuant to the purchase agreement relating to the assets of Reliable Networks, be issued. A reconciliation of the common shares for the Company’s basic and diluted net income per common share calculation is as follows (weighted average number of common shares outstanding in whole numbers and net income in thousands):
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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 Notes Payable The fair value of the Company’s notes payable is determined using various methods, including quoted market prices for notes with similar terms of maturity, which is a Level 2 measurement, and discounted cash flows, which is a Level 3 measurement. The carrying amounts and estimated fair values of notes payable at December 31, 2014 and 2015 are as follows (in thousands):
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Note 14 - Commitments and Contingencies |
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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 VPSB and the WVPSC, relating primarily to rate making. In addition, the Company may be involved in similar proceedings with interconnection carriers and the FCC. Currently, except as set forth below, none of the Company’s legal proceedings are expected to have a material adverse effect on the Company’s business. Sprint Communications L.P. (“Sprint”), MCI Communications Services, Inc. (“MCI”) and Verizon Select Services, Inc. (“Verizon”) have filed more than 60 lawsuits in federal courts across the United States alleging that over 400 local exchange carriers (“LECs” or “LEC Defendants”) overcharged Sprint, MCI and Verizon for so-called intraMTA traffic (wireless phone calls that originate and terminate in the same metropolitan transit area). The lawsuits seek a refund of previously-paid access charges for intraMTA traffic, as well as a discount related to intraMTA traffic on a going-forward basis. One of the Company’s subsidiaries, MMT, was named as a defendant in two of the lawsuits that are being brought before the District Court for the Western District of Missouri (one filed on May 2, 2014 by Sprint and the other filed on September 5, 2014 by MCI and Verizon). In addition, one of the Company’s other subsidiaries, OTP, was named as a defendant in a lawsuit relating to these issues filed by MCI and Verizon in the District Court for the District of Delaware on September 5, 2014. As all of the lawsuits relating to these issues raise the same fundamental questions of law, the United States Judicial Panel on Multidistrict Litigation has consolidated the lawsuits in the District Court for the Northern District of Texas (the “Court”) for all pre-trial proceedings. On September 18, 2015, the Court held an oral argument on the LEC Defendants’ Motions to dismiss all of the pending proceedings. On November 17, 2015, the Court issued a memorandum opinion and order dismissing the federal-law claims with prejudice, dismissing the state-law claims but granting leave to replead said claims, and denying the Defendants’ request to refer the matter to the FCC. At this time, it is too soon to determine whether these lawsuits will have a material adverse effect on the Company’s business. On November 10, 2014, a large coalition of the LEC Defendants, including MMT and OTP, filed a petition for declaratory ruling with the FCC seeking a ruling by the FCC that: (1) any traffic intentionally routed over Interexchange carrier (“IXC”) trunks by IXCs should be subject to access charges; (2) only carriers with specific agreements with a LEC may use alternative billing arrangements; (3) federal tariffing rules require the LECs to assess access charges for switched access traffic routed through Feature Group D trunks; and (4) the IXCs may not engage in self-help by refusing to pay the LEC Defendants’ properly assessed access charges. On March 11, 2015, the LEC Defendants filed their reply brief with the FCC. No timeline has been established for a decision by the FCC. Leases Minimum future rental commitments under non-cancellable operating leases, primarily for real property and office facilities , at December 31, 2015 consist of the following (in thousands):
Rent expense for the years ended December 31, 2013, 2014 and 2015 was $653 thousand, $616 thousand and $582 thousand, respectively. |
Note 15 - Stock Plans and Stock Associated with Acquisition |
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Shareholders' Equity and Share-based Payments [Text Block] |
The Company granted RSUs underlying 124,167 shares of Class A common stock on July 9, 2014 and 10,206 RSUs vested on December 31, 2014. During the year ended December 31, 2015, the Company granted RSUs underlying 122,534 shares of Class A common stock. These RSUs (or a portion thereof) vest with respect to each recipient over a one to three year period from the date of grant, provided the recipient remains in the employment or service of the Company as of the vesting date and, in selected instances, certain performance criteria are attained. Additionally, these RSUs (or a portion thereof) could vest earlier in the event of a change in control of the Company, or upon involuntary termination without cause. These grants are made primarily to executive-level personnel at the Company and, as a result, no compensation costs have been capitalized. The following table summarizes RSU activity as of December 31, 2015:
CRC acquired substantially all of the assets of Reliable Networks on January 2, 2014. See note 9, Acquisition , above. Pursuant to the purchase agreement relating to the Reliable Networks acquisition, Class A common stock was issued to the former owner of Reliable Networks in 2015 and will be issued to the former owner of Reliable Networks in 2016 and 2017, contingent on Reliable Networks achieving certain financial objectives and certain other conditions being satisfied, including that certain individuals must be employed by the Company or any of its subsidiaries and in good standing on the last day of the applicable year (the “Earn-Out”). For the year ended December 31, 2014, the Company delivered 68,233 shares of Class A common stock to the former owner of Reliable Networks on March 12, 2015 as a result of the Earn-Out. For the year ended December 31, 2015, the applicable Earn-Out criteria was not met and no shares of Class A common stock will be issued as a result of the Earn-Out.Stock-based compensation expense related to RSUs and the Earn-Out was $643 thousand and $362 thousand for the years ended December 31, 2014 and 2015, respectively. Accounting standards require that the Company estimate forfeitures for RSUs and the Earn-Out and reduce compensation expense accordingly. The Company has reduced its expense by the assumed forfeiture rate and will evaluate actual experience against the assumed forfeiture rate going forward. The forfeiture rate has been developed using historical performance metrics which could impact the size of the final issuance of Class A common stock. The Company has no history before 2014 with RSU forfeiture or Earn-Out stock forfeiture. As of December 31, 2014 and 2015, the unrecognized total compensation cost related to unvested RSUs was $286 thousand and $470 thousand, respectively. That cost is expected to be recognized by the end of 2018. As stated above, accounting standards require the Company to estimate forfeitures in calculating the expense related to stock-based compensation, as opposed to only recognizing these forfeitures and the corresponding reduction in expense as they occur. The tax benefit recognized with respect to RSUs and the Earn-Out during the years ended December 31, 2014 and 2015 was $249 thousand and $144 thousand, respectively. |
Note 16 - Selected Quarterly Financial Data (Unaudited) |
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Quarterly Financial Information [Text Block] |
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Note 17 - Subsequent Events |
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Subsequent Events [Text Block] |
On January 25, 2016, the Company entered into a new senior loan agreement (the “Senior Loan Agreement”), providing for a five year term loan facility in the aggregate principal amount of $85.0 million and a five year $5.0 million revolving credit facility, and a new subordinated loan agreement (the “Subordinated Loan Agreement”), providing for a five and a half year term loan facility in the aggregate principal amount of $15.0 million. On February 17, 2016, the Subordinated Loan Agreement was amended to increase the aggregate principal amount available for borrowing thereunder to $15.3 million, and the Company borrowed $85.0 million under the term loan facility of the Senior Loan Agreement and $15.3 million under the Subordinated Loan Agreement. The Company used the borrowings under the Senior Loan Agreement and the Subordinated Loan Agreement to, among other things, pay all amounts due, including principal, interest and fees, and satisfy in full all of its obligations under the Credit Facility, which was scheduled to mature on April 30, 2016. As a result of the repayment of the Credit Facility, all of the Company’s Class B shares were converted to Class A shares. The term loan facility under the Senior Loan Agreement requires principal payments of $1.0 million quarterly, beginning on April 1, 2016. Principal amounts outstanding under the Subordinated Loan Agreement will generally not be due until maturity. The Company’s consolidated balance sheet as of December 31, 2015 has been adjusted to reflect the $3.0 million in principal payments that will be due under the Senior Loan Agreement over the succeeding twelve months as current maturity of long-term notes payable and the balance of the existing debt of $98.1 million as of December 31, 2015 as long-term notes payable. The Company expects to record costs and loss on extinguishment of debt totaling approximately $211 thousand in connection with this refinancing. |
Significant Accounting Policies (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 the Company and its subsidiaries, all of which are either directly or indirectly wholly-owned. These include: Otelco Telecommunications LLC; Otelco Telephone LLC (“OTP”); Hopper Telecommunications LLC; Brindlee Mountain Telephone LLC; Blountsville Telephone LLC (“BTC”); Otelco Mid-Missouri LLC (“MMT”) and its wholly owned subsidiary I-Land Internet Services LLC; Mid-Maine Telecom LLC; Mid-Maine TelPlus LLC; Granby Telephone LLC; War Telephone LLC; Pine Tree Telephone LLC; Saco River Telephone LLC; Shoreham Telephone LLC; and CRC Communications LLC (“CRC”). The accompanying consolidated financial statements include the accounts of the Company and all of the aforesaid subsidiaries after elimination of all material intercompany balances and transactions. |
Use of Estimates, Policy [Policy Text Block] | Use of Estimates The Company prepares its consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”), which require management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and disclosure of contingent assets and liabilities. The estimates and assumptions used in the accompanying consolidated financial statements are based upon management’s evaluation of the relevant facts and circumstances as of the date of the financial statements. Actual results may differ from the estimates and assumptions used in preparing the accompanying consolidated financial statements. Significant accounting estimates include the recoverability of goodwill, identified intangibles, long-term assets, deferred tax valuation allowances and allowance for bad debt. |
Intercompany Profit to Regulated Affiliates, Policy [Policy Text Block] | Regulatory Accounting The Company follows the accounting for regulated enterprises, which is now part of ASC 980, Regulated Operations (“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, 2014 and 2015, 75.3% and 76.5%, respectively, of the Company’s net property, plant and equipment was accounted for under ASC 980. The Company is subject to reviews and audits by regulatory agencies. The effect of these reviews and audits, if any, will be recorded in the period in which they first become known and determinable. |
Goodwill and Intangible Assets, Policy [Policy Text Block] | Intangible Assets and Goodwill Intangible assets consist primarily of the fair values of customer related intangibles, non-compete agreements and long-term customer contracts acquired in connection with business combinations. Goodwill represents the excess of total acquisition cost over the assigned value of net identifiable tangible and intangible assets acquired through various business combinations, less any impairment. Due to the regulatory accounting required by ASC 980, the Company did not record acquired regulated telecommunications property and equipment at fair value as required by ASC 805, Business Combinations , 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. |
Revenue Recognition, Policy [Policy Text Block] | Revenue Recognition Local services . Local services revenue for monthly recurring local services is billed in advance to a portion of the Company’s customers and in arrears to the balance of the customers. The Company records revenue for charges that have not yet been invoiced to its customers as unbilled revenue when services are rendered. The Company records revenue billed in advance as advance billings and defers recognition until such revenue is earned. Long distance service is billed to customers in arrears based on actual usage except when it is included in service bundles. The Company records unbilled long distance revenue as unbilled revenue when services are rendered. In bundles, unlimited usage is billed in arrears at a flat rate. Network access . Network access revenue is derived from several sources. Revenue for interstate access services is received through tariffed access charges filed with the Federal Communications Commission (“FCC”). Eight of the Company’s RLECs utilize the National Exchange Carrier Association (“NECA”), who files tariffs with the FCC on behalf of the NECA member companies. These access charges are billed by the Company to interstate interexchange carriers and pooled with like-revenues from all NECA member companies. A portion of the pooled 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 pooled access charge revenue received by the Company is based upon the nationwide average schedule costs of providing interstate access services. Three of the Company’s RLECs utilize the NECA to file common line tariffs with the FCC, and pool the common line access charge revenues. These three RLECs also file Traffic Sensitive tariffs directly with the FCC, and bill and keep the Traffic Sensitive access revenues. 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. Revenue for intrastate access service is received through tariffed access charges billed by the Company to the originating intrastate carrier using access rates filed with the Alabama Public Service Commission (“APSC”), the Maine Public Utilities Commission (“MPUC”), the Massachusetts Department of Telecommunications and Cable (“MDTC”), the Missouri Public Service Commission (“MPSC”), the New Hampshire Public Utilities Commission (“NHPUC”), the Vermont Public Service Board (“VPSB”) and the West Virginia Public Service Commission (“WVPSC”) and are retained by the Company. Revenue for the intrastate/interLATA access service is received through tariffed access charges as filed with the APSC, MDTC, MPSC, MPUC, NHPUC, VPSB and WVPSC. These access charges are billed to the intrastate carriers and are retained by the Company. Revenue for terminating and originating long distance service is received through charges for providing usage of the local exchange network. Toll revenues are recognized when services are rendered. The FCC’s Intercarrier Compensation order, issued in October 2011, has significantly changed the way telecommunication carriers receive compensation for exchanging traffic and state tariffed rates. All terminating intrastate rates that exceeded the interstate rate were reduced to the terminating interstate rate effective July 2014. Beginning in 2014, the interstate and intrastate rates will be reduced over three years to “bill and keep” in which carriers bill their customers for services and keep those charges but neither pay for nor receive compensation from traffic sent to or received from other carriers. In addition, subsidies to carriers serving high cost areas will be phased out over an extended period. Revenues for interstate access services are based on reimbursement of costs and an allowed rate of return. Revenues of this nature are received from the NECA in the form of monthly settlements. Such revenues amounted to 13.1%, 15.5%, and 17.4% of the Company’s total revenues for the years ended December 31, 2013, 2014, and 2015, respectively. Internet, tran sport service, cable and satellite television and cloud hosting and managed services . 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, 2014 and 2015 of $734 thousand and $681 thousand, respectively, related to transport 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. |
Receivables, Policy [Policy Text Block] | Accounts Receivable The Company extends credit to its business and residential customers based upon a written credit policy. Service interruption is the primary vehicle for controlling losses. Accounts receivable are recorded at the invoiced amount and do not bear interest. The allowance for doubtful accounts is the Company’s best estimate for the amount of probable credit losses in the Company’s existing accounts receivable. The Company establishes an allowance for doubtful accounts based upon factors surrounding the credit risk of specific customers, historical trends, and other information. Receivable balances are reviewed on an aged basis and account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. |
Inventory, Policy [Policy Text Block] | Materials and Supplies Materials and supplies are stated at the lower of cost or market value. Cost is determined using an average cost basis. |
Property, Plant and Equipment, Policy [Policy Text Block] | Property and Equipment Regulated property and equipment is stated at original cost less any impairment. Unregulated property and equipment purchased through acquisitions is stated at its fair value at the date of acquisition less any impairment. Expenditures for improvements that significantly add to productive capacity or extend the useful life of an asset are capitalized. Expenditures for maintenance and repairs are expensed when incurred. Depreciation of regulated property and equipment is computed principally using the straight-line method over useful lives determined by the APSC, MDTC, MPSC, MPUC, NHPUC, VPSB and WVPSC as discussed above. Depreciation of unregulated property and equipment primarily employs the straight-line method over industry standard estimated useful lives. |
Impairment or Disposal of Long-Lived Assets, Policy [Policy Text Block] | Long-Lived Assets The Company reviews its long-lived assets for impairment at each balance sheet date and whenever events or changes in circumstances indicate that the carrying amount of an asset should be assessed. To determine if impairment exists, the Company estimates the future undiscounted cash flows expected to result from the use of the asset being reviewed for impairment. If the sum of these expected future cash flows is less than the carrying amount of the asset, the Company recognizes an impairment loss in accordance with guidance included in ASC 360, Property, Plant, and Equipment . 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”. 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, 2015, there was no amount recorded for interest and penalties. The Company conducts business in multiple jurisdictions and, as a result, one or more subsidiaries file income tax returns in the U.S. federal, various state and local jurisdictions. All tax years since 2012 are open for examination by various tax authorities. |
Fair Value of Financial Instruments, Policy [Policy Text Block] | Fair Value of Financial Instruments The carrying values of the Company’s financial instruments, including cash and cash equivalents, accounts receivable, prepaids, accounts payable and accrued liabilities, approximate their fair values as of December 31, 2014 and 2015 due to their short term nature. The fair value of debt instruments at December 31, 2014 and 2015 is disclosed in the notes to the consolidated financial statements. |
Earnings Per Share, Policy [Policy Text Block] | Income per Common Share The Company computes net income per common share in accordance with the provisions included in ASC 260, Earnings per Share (“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 During 2014, the FASB issued Accounting Standards Updates (“ASUs”) 2014-01 through 2014-18. Except for ASU 2014-09, ASU 2014-12 and ASU 2014-15, which are discussed below, these ASUs provide technical corrections or simplification to existing guidance and to specialized industries or entities and therefore have minimal, if any, impact on the Company. In June 2014, the FASB issued ASU 2014-12, Compensation-Stock Compensation (Topic 718): Account ing for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period . This ASU requires that a performance target that affects vesting, and that could be achieved after the requisite service period, be treated as a performance condition. The amendments in this ASU provide explicit guidance on whether to treat a performance target as a performance condition that affects vesting or as a non-vesting condition that affects the grant-date fair value of an award. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. The implementation of this ASU has not had a material impact on the Company’s consolidated financial position or results of operations.Recent Accounting Pronouncements In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) . 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. 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 606): Deferral of the Effective Date. This ASU confirmed a 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 current effective date, which is the first quarter of fiscal 2017. The Company is currently evaluating the impact of the pending adoption of ASU 2014-09 on its consolidated financial statements and has not yet determined the method by which the Company will adopt the standard.In August 2014, the FASB issued ASU 2014-15, Presentation of Financial Statements – Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. This ASU provides guidance on management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related disclosures in the notes to the financial statements. The amendments in this ASU should help reduce the diversity in the timing and content of disclosures in the notes to the financial statements. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016, with early adoption permitted. The implementation of this ASU is not expected to have a material impact on the Company’s consolidated financial position or results of operations. In April 2015, the FASB issued ASU 2015-03, Interest–Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs. This ASU provides guidance that simplifies the presentation of debt issuance costs by amending the accounting guidance to require that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of the related debt liability. The amendments are consistent with the accounting guidance related to debt discounts. This guidance is effective for the first interim or annual period beginning after December 15, 2015. The Company will adopt this guidance beginning in the first quarter of fiscal 2016. The Company assessed the implementation of this ASU is not expected to have a material impact on its consolidated financial statements.In April 2015, the FASB issued ASU 2015-05 , Intangibles–Goodwill and Other–Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement . This ASU provides guidance regarding whether a cloud computing arrangement includes a software license. If a cloud computing arrangement includes a software license, then the entity should account for the software license element of the arrangement consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, the entity should account for the arrangement as a service contract. The guidance will not change U.S. GAAP for an entity’s accounting for service contracts. This pronouncement is effective for fiscal years, including interim periods within those fiscal years, beginning after December 15, 2015. The Company assessed the implementation of this ASU is not expected to have a material impact on its consolidated financial statements. In July 2015, the FASB issued ASU 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory . This ASU provides guidance intended to simplify the accounting for inventory. Prior to this ASU, U.S. GAAP required an entity to measure inventory at the lower of cost or market. This pronouncement changed the measurement of inventory to the lower of cost or net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. Methods excluded from the scope of this ASU are the last-in, first-out or the retail inventory method and they will continue to be measured at the lower of cost or market. The amendments are effective for public business entities for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2016. Early adoption is permitted, and the Company is currently assessing the impact of this guidance on its consolidated financial statements.In November 2015, the FASB issued ASU 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes . This ASU provides guidance that simplifies the presentation of deferred income taxes. This ASU requires that deferred tax liabilities and assets be classified as noncurrent in a classified statement of financial position. This guidance is effective for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods. The implementation of this ASU is not expected to have a material impact on the Company’s consolidated financial position or results of operations. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) . 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. The Company is evaluating the requirements of this guidance and has not yet determined the impact of the adoption on the Company’s consolidated financial position or results of operations. |
Reclassification, Policy [Policy Text Block] | Reclassifications Certain items in prior years’ consolidated financial statements have been reclassified to conform with 2015 presentation. |
Note 4 - Goodwill and Intangible Assets (Tables) |
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Schedule of Finite-Lived Intangible Assets [Table Text Block] |
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Note 5 - Property and Equipment (Tables) |
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Note 6 - Other Accounts Receivables (Tables) |
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Schedule of Accounts, Notes, Loans and Financing Receivable [Table Text Block] |
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Note 7 - Investments (Tables) |
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Investment [Table Text Block] |
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Note 8 - Notes Payable (Tables) |
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Schedule of Long-term Debt Instruments [Table Text Block] |
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Note 10 - Income Tax (Tables) |
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Schedule of Deferred Tax Assets and Liabilities [Table Text Block] |
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Schedule of Effective Income Tax Rate Reconciliation [Table Text Block] |
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Note 12 - 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 13 - Fair Value Measurement (Tables) |
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Note 14 - Commitments and Contingencies (Tables) |
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Schedule of Future Minimum Rental Payments for Operating Leases [Table Text Block] |
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Note 15 - Stock Plans and Stock Associated with Acquisition (Tables) |
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Schedule of Share-based Compensation, Restricted Stock Units Award Activity [Table Text Block] |
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Note 16 - Selected Quarterly Financial Data (Unaudited) (Tables) |
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Schedule of Quarterly Financial Information [Table Text Block] |
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Note 2 - Summary of Significant Accounting Policies (Details Textual) - USD ($) |
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Sales Revenue, Services, Net [Member] | |||
Concentration Risk, Percentage | 17.40% | 15.50% | 13.10% |
Unrecognized Tax Benefits, Income Tax Penalties and Interest Expense | $ 0 | ||
Percentage of Net Property, Plant, and Equipment Accounted for Under ASC980 | 76.50% | 75.30% | |
Deferred Revenue | $ 681 | $ 734 |
Note 3 - Impairments (Details Textual) - USD ($) |
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Goodwill, Impairment Loss | $ 0 | $ 0 | $ 0 |
Impairment of Intangible Assets (Excluding Goodwill) | $ 0 | $ 0 | $ 0 |
Note 4 - Goodwill and Intangible Assets (Details Textual) - USD ($) |
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Alabama [Member | |||
Goodwill, Period Increase (Decrease) | $ 0 | ||
Goodwill | $ 39,199,000 | $ 39,199,000 | |
Percent of Goodwill | 87.20% | ||
New England [Member] | |||
Goodwill, Period Increase (Decrease) | $ 0 | ||
Goodwill | 44,976 | ||
Percent of Goodwill | 1.00% | ||
Goodwill, Acquired During Period | 19,000 | ||
Missouri [Member] | |||
Goodwill, Period Increase (Decrease) | $ 0 | ||
Goodwill | $ 5,758,000 | 5,758,000 | |
Percent of Goodwill | 12.80% | ||
Minimum [Member] | |||
Finite-Lived Intangible Asset, Useful Life | 2 years | ||
Maximum [Member] | |||
Finite-Lived Intangible Asset, Useful Life | 15 years | ||
Goodwill, Impairment Loss | $ 0 | 0 | $ 0 |
Goodwill | $ 44,976,000 | $ 44,976,000 |
Note 4 - Intangible Assets (Details) - USD ($) $ in Thousands |
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
---|---|---|---|
Customer Relationships [Member] | |||
Carrying Value | $ 24,025 | $ 24,025 | $ 23,701 |
Accumulated Amortization | (21,685) | (20,880) | (19,632) |
Net Book Value | 2,340 | 3,145 | 4,069 |
Customer Contracts [Member] | |||
Carrying Value | 19,600 | 19,600 | 19,600 |
Accumulated Amortization | $ (19,600) | $ (19,600) | $ (19,600) |
Net Book Value | |||
Noncompete Agreements [Member] | |||
Carrying Value | $ 107 | $ 107 | $ 83 |
Accumulated Amortization | (95) | (89) | $ (83) |
Net Book Value | 12 | 18 | |
Trade Names [Member] | |||
Carrying Value | 23 | 23 | $ 9 |
Accumulated Amortization | (12) | (8) | (4) |
Net Book Value | 11 | 15 | 5 |
Carrying Value | 43,755 | 43,755 | 43,393 |
Accumulated Amortization | (41,392) | (40,577) | (39,319) |
Net Book Value | $ 2,363 | $ 3,178 | $ 4,074 |
Note 4 - Aggregate Amortization Expense (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
For the year ended December 31, | $ 815 | $ 1,258 | $ 2,597 |
2016 | 578 | ||
2017 | 458 | ||
2018 | 408 | ||
2019 | 389 | ||
2020 | 372 | ||
Thereafter | 158 | ||
Total | $ 2,363 | $ 3,178 | $ 4,074 |
Note 5 - Property and Equipment (Details Textual) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Telephone Plant Adjustment [Member] | |||
Amortization | $ 385 | $ 385 | $ 384 |
Depreciation | 7,678 | 8,941 | 9,650 |
Amortization | $ 1,200 | $ 1,642 | $ 2,982 |
Note 6 - Schedule of Other Accounts Receivable (Details) - USD ($) $ in Thousands |
Dec. 31, 2015 |
Dec. 31, 2014 |
---|---|---|
Carrier Access Bills Receivable [Member] | ||
Other Receivables | $ 570 | $ 714 |
NECA Receivable [Member] | ||
Other Receivables | 1,030 | 1,078 |
Receivables from Alabama Service Fund [Member] | ||
Other Receivables | 59 | 63 |
Other Miscellaneous [Member] | ||
Other Receivables | 63 | 76 |
Other Receivables | $ 1,722 | $ 1,931 |
Note 7 - Schedule of Investments (Details) - USD ($) $ in Thousands |
Dec. 31, 2015 |
Dec. 31, 2014 |
---|---|---|
CoBank Stock, at Cost [Member] | ||
Investments | $ 1,475 | $ 1,475 |
Rental Property [Member] | ||
Investments | 296 | 321 |
Other Miscellaneous Investments [Member] | ||
Investments | 75 | 74 |
Investments | $ 1,846 | $ 1,870 |
Note 8 - Notes Payable (Details Textual) - USD ($) |
12 Months Ended | |||
---|---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
Mar. 24, 2013 |
|
Revolving Credit Facility [Member] | ||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 5,000,000 | $ 5,000,000 | ||
Long-term Line of Credit | 0 | 0 | ||
Line of Credit Facility, Commitment Fee Amount | $ 25,000 | 25,000 | ||
Line of Credit Facility, Commitment Fee Percentage | 0.50% | |||
Senior Credit Facility [Member] | ||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 5,000,000 | |||
Deferred Finance Costs, Gross | $ 2,700,000 | |||
GE Capital 3rd [Member] | ||||
Amortization of Financing Costs | 880,000 | 936,000 | ||
Amortization of Financing Costs | $ 880,000 | $ 936,000 | $ 1,071,000 |
Note 8 - Summary of Notes Payable (Details) - USD ($) $ in Thousands |
Dec. 31, 2015 |
Dec. 31, 2014 |
---|---|---|
GE Capital 3rd [Member] | ||
Long-term Debt | $ 100,052 | $ 112,135 |
Less: current portion | (3,000) | (6,665) |
Long-term Debt, Excluding Current Maturities | $ 97,052 | $ 105,470 |
Note 8 - Summary of Notes Payable (Details) (Parentheticals) |
Dec. 31, 2015 |
Dec. 31, 2014 |
---|---|---|
GE Capital 3rd [Member] | ||
Interest rate | 6.50% | 6.50% |
Note 9 - Acquisition (Details Textual) $ in Millions |
Jan. 02, 2014
USD ($)
|
---|---|
Reliable Networks [Member] | |
Payments to Acquire Businesses, Gross | $ 0.5 |
Note 10 - Income Tax (Details Textual) - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Domestic Tax Authority [Member] | |||
Operating Loss Carryforwards | $ 0 | $ 0 | |
State and Local Jurisdiction [Member] | |||
Operating Loss Carryforwards | $ 68,000 | 0 | |
Earliest Tax Year [Member] | |||
Open Tax Year | 2012 | ||
Deferred Tax Assets, Tax Credit Carryforwards, Alternative Minimum Tax | $ 0 | $ 0 | |
Deferred Tax Assets, Valuation Allowance | $ 0 | ||
Effective Income Tax Rate Reconciliation, Percent | 39.80% | 38.80% | 5.50% |
Note 10 - Tax Effects of Temporary Differences (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Federal income taxes | |||
Current | $ 2,552 | $ 230 | $ 210 |
Deferred | 1,661 | 2,380 | 5,528 |
Total federal tax expense | 4,213 | 2,610 | $ 5,738 |
State income taxes | |||
Current | 366 | 14 | |
Deferred | 365 | 561 | $ 629 |
Total state tax expense | 731 | 575 | 629 |
Total income tax expense | $ 4,944 | $ 3,185 | $ 6,367 |
Note 10 - Deferred Tax Assets and Liabilities (Details) - USD ($) |
Dec. 31, 2015 |
Dec. 31, 2014 |
---|---|---|
Deferred tax liabilities: | ||
Amortization | $ (16,107,000) | $ (14,871,000) |
Depreciation | (10,541,000) | (10,358,000) |
Prepaid expense | (415,000) | (600,000) |
State net operating loss carryforwards and adjustments, liabilties | (49,000) | 0 |
Other | (13,000) | (14,000) |
Total deferred tax liabilities | $ (27,125,000) | (25,843,000) |
Deferred tax assets: | ||
Amortized intangibles | 502,000 | |
State net operating loss carryforwards and adjustments, assets | 27,000 | |
Deferred compensation | $ 234,000 | 297,000 |
Advance payments | 266,000 | 286,000 |
Bad debt | 169,000 | 100,000 |
Other | 350,000 | 551,000 |
Total net deferred tax assets | $ 1,019,000 | $ 1,763,000 |
Note 10 - Effective Income Tax Rate Reconciliation (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Federal income tax at statutory rate | 35.00% | 35.00% | 35.00% |
Federal income tax provision at statutory rate | $ 4,349 | $ 2,875 | $ 40,428 |
State income tax provision, net of federal income tax effects | $ 475 | $ 339 | 408 |
Cancellation of debt (non-taxable) | (37,681) | ||
Restructuring expense | 1,974 | ||
Valuation allowance | 1,288 | ||
Other | $ 120 | $ (29) | (50) |
Provision for income taxes | $ 4,944 | $ 3,185 | $ 6,367 |
Effective Income Tax Rate Reconciliation, Percent | 39.80% | 38.80% | 5.50% |
Note 11 - Employee Benefit Program (Details Textual) - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
BTC [Member] | |||
Defined Contribution Plan, Employer Matching Contribution, Percent of Employees' Gross Pay | 4.50% | 4.50% | 6.00% |
Defined Contribution Plan, Cost Recognized | $ 15,000 | $ 15,000 | $ 30,000 |
Defined Contribution Plan, Minimum Annual Contributions Per Employee, Percent | 1.00% | ||
Defined Contribution Plan, Maximum Annual Contributions Per Employee, Amount | $ 17,500 | $ 17,500 | $ 17,500 |
Defined Contribution Plan, Employer Matching Contribution, Percent of Employees' Gross Pay | 4.50% | 4.50% | 6.00% |
Multiemployer Plan, Period Contributions | $ 0 | $ 0 | $ 0 |
Defined Contribution Plan, Cost Recognized | $ 520,000 | $ 494,000 | $ 670,000 |
Note 12 - Reconciliation of Income (Loss) Per Common Share (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Weighted average number of common shares outstanding - basic (in shares) | 3,239,306 | 3,103,728 | 2,921,208 |
Effect of dilutive securities (in shares) | 74,335 | 64,433 | |
Weighted average number of common shares and potential common shares - diluted (in shares) | 3,313,641 | 3,168,161 | 2,921,208 |
Net income | $ 7,484 | $ 5,029 | $ 109,144 |
Net income per common share-basic (in dollars per share) | $ 2.31 | $ 1.62 | $ 37.36 |
Net income per common share - diluted (in dollars per share) | $ 2.26 | $ 1.59 | $ 37.36 |
Note 13 - Fair Value of Long-term Debt (Details) - USD ($) $ in Thousands |
Dec. 31, 2015 |
Dec. 31, 2014 |
---|---|---|
Reported Value Measurement [Member] | ||
Long-term Debt | $ 100,052 | $ 112,135 |
Estimate of Fair Value Measurement [Member] | ||
Long-term Debt | $ 102,076 | $ 120,580 |
Note 14 - Commitments and Contingencies (Details Textual) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Operating Leases, Rent Expense, Net | $ 582 | $ 616 | $ 653 |
Note 14 - Minimum Future Rental Payments Under Non-Cancellable Operating Leases (Details) $ in Thousands |
Dec. 31, 2015
USD ($)
|
---|---|
2016 | $ 481 |
2017 | 327 |
2018 | 230 |
2019 | 102 |
2020 | 85 |
Thereafter | 141 |
Total | $ 1,366 |
Note 15 - Summary of RSU Activity (Details) - Restricted Stock Units (RSUs) [Member] |
12 Months Ended |
---|---|
Dec. 31, 2015
$ / shares
shares
| |
Balance, outstanding shares (in shares) | shares | 113,961 |
Balance (in dollars per share) | $ / shares | $ 4.96 |
Granted (in shares) | shares | 122,534 |
Granted (in dollars per share) | $ / shares | $ 4.71 |
Vested (in shares) | shares | (65,712) |
Vested (in dollars per share) | $ / shares | $ 4.96 |
Forfeited or cancelled (in shares) | shares | (15,022) |
Forfeited or cancelled (in dollars per share) | $ / shares | $ 4.96 |
Balance, outstanding shares (in shares) | shares | 155,761 |
Balance (in dollars per share) | $ / shares | $ 4.78 |
Note 16 - Selected Quarterly Financial Data (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2015 |
Sep. 30, 2015 |
Jun. 30, 2015 |
Mar. 31, 2015 |
Dec. 31, 2014 |
Sep. 30, 2014 |
Jun. 30, 2014 |
Mar. 31, 2014 |
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Revenue | $ 17,717 | $ 17,850 | $ 17,892 | $ 17,643 | $ 18,178 | $ 18,421 | $ 18,488 | $ 18,783 | $ 71,102 | $ 73,870 | $ 78,972 |
Operating income | 5,072 | 4,910 | 4,765 | 4,508 | 3,822 | 4,625 | 4,438 | 3,973 | 19,255 | 16,858 | 18,651 |
Net income | $ 1,844 | $ 1,850 | $ 1,655 | $ 2,135 | $ 940 | $ 1,387 | $ 1,308 | $ 1,394 | $ 7,484 | $ 5,029 | $ 109,144 |
Net income per common share-basic (in dollars per share) | $ 0.57 | $ 0.57 | $ 0.51 | $ 0.66 | $ 0.30 | $ 0.45 | $ 0.42 | $ 0.45 | $ 2.31 | $ 1.62 | $ 37.36 |
Net income per common share-diluted (in dollars per share) | $ 0.54 | $ 0.56 | $ 0.50 | $ 0.65 | $ 0.29 | $ 0.44 | $ 0.42 | $ 0.45 | $ 2.26 | $ 1.59 | $ 37.36 |
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