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Note 4 - Acquisitions
12 Months Ended
Dec. 31, 2012
Mergers, Acquisitions and Dispositions Disclosures [Text Block]
4.     Acquisitions

On October 14, 2011, ST acquired 100% of the issued and outstanding common stock of Shoreham Telephone Company, Inc. (“STC”) and, immediately thereafter, STC merged with and into ST. ST provides telecommunications solutions, including voice, data and internet services, to residential and business customers in western Vermont.

The stock purchase agreement related to the acquisition of STC provided for cash consideration of $5,248,134, including the extinguishment of notes payable of $410,904 and accrued interest of $3,081, which were paid at closing. During third quarter 2012, the Company finalized the calculation of deferred income tax liability acquired. The Company determined the deferred income tax liability to be $1,889,202, rather than $2,233,458 as previously reported. The excess of the purchase price over the fair value of identifiable assets and liabilities is reflected as goodwill of $420,505. As part of the goodwill impairment testing conducted during second quarter 2012, all goodwill in our New England reporting unit was determined to be impaired, including the goodwill associated with the STC acquisition.

The allocation of the net purchase price for the STC acquisition was as follows:

   
October 14, 2011
 
Cash
  $ 237,850  
Other current assets
    552,331  
Property and equipment
    4,529,760  
Intangible assets
    1,729,600  
Goodwill
    420,505  
Current liabilities
    (332,710 )
Deferred income tax liabilities
    (1,889,202 )
Purchase price
  $ 5,248,134  

The acquisition was recorded at fair value in accordance with ASC 805 resulting in a plant acquisition adjustment in 2011.  Property and equipment have depreciable lives consistent with those shown in  note 7,  Property and Equipment  below.  The intangible assets at time of acquisition included regulated customer based assets at fair value of $1,672,200 which had remaining lives of 10 years; trade name fair valued at $16,200 which had a remaining life of 5 years; and a non-competition agreement fair valued at $41,200 which had a remaining life of 2 years.  The acquisition was accounted for using the acquisition method of accounting and, accordingly, the accompanying consolidated financial statements include the financial position and results of operations from the date of acquisition.

     The following unaudited pro forma information presents the combined results of operations of the Company as though the acquisition of the STC had occurred at the beginning of 2010.   The results include certain adjustments, including increased interest expense on notes payable and increased amortization expense related to intangible assets.   The pro forma financial information does not necessarily reflect the results of operations had the acquisition been completed at the beginning of the period or those which may be obtained in the future.

   
Unaudited
2010
   
Unaudited
2011
 
Revenue
  $ 106,812,024     $ 103,707,313  
Income from operations
  $ 26,422,934     $ 24,705,377  
Net income
  $ 722,165     $ 1,935,327  
Net income per common share
  $ 0.05     $ 0.15