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Spok Reports Fourth-Quarter and Full-Year 2019 Operating Results; Wireless Trends Continue to Improve; Sequential Improvements in Software Operations Bookings and Expense Management Trends

Board Declares Regular Quarterly Dividend

SPRINGFIELD, Va.--(BUSINESS WIRE)--Feb. 26, 2020-- Spok Holdings, Inc. (NASDAQ: SPOK), a global leader in healthcare communications, today announced operating results for the fourth quarter and year ended December 31, 2019. In addition, the Company’s Board of Directors declared a regular quarterly dividend of $0.125 per share, payable on March 30, 2020, to stockholders of record on March 16, 2020.

Key Fourth-Quarter and Full-Year Operating Highlights

  • Software bookings in the fourth quarter totaled $21.9 million, compared to $23.1 million in the prior year quarter. Fourth quarter bookings included $11.5 million of operations bookings and $10.4 million of maintenance renewals. For the full year 2019, software bookings totaled $78.3 million, compared to $81.3 million in 2018. Software backlog totaled $50.6 million at December 31, 2019, compared to $40.4 million at the end of 2018.
  • Of the $17.9 million in software revenue for the fourth quarter, $7.8 million was operations revenue and $10.1 million was maintenance revenue, compared to $10.2 million and $10.0 million, respectively, of the $20.2 million in software revenue for the fourth quarter of 2018.
  • The renewal rate for software maintenance revenue in 2019 continued to exceed 99 percent.
  • The quarterly rate of paging unit erosion was 1.8 percent in the fourth quarter of 2019, compared to 2.3 percent in the prior quarter and 0.7 percent in the year-earlier period. Net paging unit losses were 17,000 in the fourth quarter of 2019, compared to 22,000 in the prior quarter and 7,000 in the fourth quarter of 2018. Annual unit erosion totaled 54,000 units, or 5.4 percent, in 2019, down from the prior year level of unit erosion of 57,000 units. Paging units in service at December 31, 2019, totaled 938,000, compared to 992,000 at the end of the prior year.
  • The quarterly rate of wireless revenue erosion was 0.9 percent in the fourth quarter of 2019, down from 1.4 percent in the prior quarter and consistent with 0.7 percent in the year-earlier quarter, while the annual rate of wireless revenue erosion in 2019 slowed to 6.5 percent versus 6.8 percent in 2018.
  • Total paging ARPU (average revenue per unit) was $7.33 in the fourth quarter of 2019, compared to $7.36 in the year-earlier quarter and $7.32 in the prior quarter. For the year, ARPU totaled $7.34, compared to $7.39 in 2018.
  • Operating expenses in the fourth quarter of 2019 increased to $51.8 million, compared to $43.1 million in the prior year quarter, due entirely to the non-cash goodwill impairment charge of $8.8 million taken in the fourth quarter of 2019. For the full year 2019, operating expenses increased to $176.1 million, compared to $172.6 million in 2018, as the full year increase in operating expenses was due entirely to the previously mentioned non-cash goodwill impairment charge of $8.8 million.
  • Adjusted operating expenses (excludes depreciation, amortization, accretion and goodwill impairment charge) totaled $40.7 million in the fourth quarter of 2019, compared to $40.5 million in the year-earlier quarter. For the full year 2019, adjusted operating expenses totaled $158.0 million, compared to $161.9 million 2018.
  • Capital expenses were $0.7 million in the fourth quarter of 2019, compared to $0.8 million in the year-earlier quarter. For 2019, capital expenses totaled $4.8 million, compared to $5.9 million in 2018.
  • The number of full-time equivalent employees at December 31, 2019, totaled 638, up from 596 at year-end 2018.
  • Capital returned to stockholders in 2019 totaled $16.4 million. This came in the form of approximately $9.8 million from the regular quarterly dividend and approximately $6.6 million from share repurchases.
  • The Company’s cash, cash equivalents and short-term investments balance at December 31, 2019, was $77.3 million, compared to $87.3 million at December 31, 2018.

2019 Fourth Quarter and Full Year Results:

Consolidated revenue for the fourth quarter of 2019 under Generally Accepted Accounting Principles (“GAAP”) was $39.5 million compared to $43.3 million in the fourth quarter of 2018. For the full year 2019, consolidated revenue totaled $160.3 million, compared to $169.5 million in 2018.

 

For the three months ended

 

For the twelve months ended

(Dollars in thousands)

December 31,
2019

December 31,
2018

Change
(%)

 

December 31,
2019

December 31,
2018

Change
(%)

Wireless revenue

 

 

 

 

 

 

 

Paging revenue

$

20,826

$

21,997

(5.3

)%

 

$

85,067

$

90,570

(6.1

)%

Product and other revenue

 

789

 

1,094

(27.9

)%

 

 

3,100

 

3,707

(16.4

)%

Total wireless revenue

$

21,615

$

23,091

(6.4

)%

 

$

88,167

$

94,277

(6.5

)%

 

 

 

 

 

 

 

 

Software revenue

 

 

 

 

 

 

 

Operations revenue

$

7,783

$

10,167

(23.4

)%

 

$

31,757

$

36,128

(12.1

)%

Maintenance revenue

 

10,150

 

9,998

1.5

%

 

 

40,365

 

39,069

3.3

%

Total software revenue

 

17,933

 

20,165

(11.1

)%

 

 

72,122

 

75,197

(4.1

)%

Total revenue

$

39,548

$

43,256

(8.6

)%

 

$

160,289

$

169,474

(5.4

)%

GAAP net loss for the fourth quarter of 2019 was $9.5 million, or $0.50 per diluted share, compared to net income of $0.2 million, or $0.01 per diluted share, in the fourth quarter of 2018. Based on the Company's annual assessment of goodwill, the 2019 fourth quarter net loss included a non-cash goodwill impairment charge of $8.8 million, which increased the fourth quarter net loss per diluted share by $0.46.

GAAP net loss for the full year 2019 was $10.8 million, or $0.56 per diluted share, compared to a net loss of $1.5 million, or $0.08 per diluted share, in 2018. As discussed above, the 2019 full year net loss included a non-cash goodwill impairment charge of $8.8 million, which increased the full year net loss per diluted share by $0.46.

In the fourth quarter of 2019, the EBITDA (earnings before interest, taxes, depreciation and amortization) loss totaled $10.0 million. As discussed above, the fourth quarter EBITDA loss included a non-cash goodwill impairment charge of $8.8 million. The fourth quarter 2019 EBITDA loss compares to EBITDA of $2.8 million in the prior year quarter. For the full year 2019, the EBITDA loss totaled $6.6 million, including the aforementioned non-cash goodwill impairment charge of $8.8 million. The 2019 EBITDA loss compares to EBITDA of $7.6 million in the prior year.

 

For the three months ended

 

For the twelve months ended

(Dollars in thousands)

December 31, 2019

December 31, 2018

 

December 31, 2019

December 31, 2018

Net (loss) income

$

(9,511

)

$

189

 

 

$

(10,765

)

$

(1,479

)

Basic and diluted net (loss) income per share

$

(0.50

)

$

0.01

 

 

$

(0.56

)

$

(0.08

)

EBITDA

$

(9,989

)

$

2,750

 

 

$

(6,560

)

$

7,596

 

Management Commentary:

“We are encouraged with our performance in the fourth quarter of 2019 and believe we are positioned well for sustained improvement in 2020, as we begin to market and sell our new cloud-native and integrated communication platform,” said Vincent D. Kelly, president and chief executive officer. “We were particularly pleased with the sequential growth in software bookings, including a more than 17 percent sequential growth in software operations bookings. The continued yearly improvement in our wireless trends included a reduction in paging unit erosion as well as continued slowing of wireless revenue declines. These metrics, along with the significant progress our R&D team made in 2019 on our new platform, Spok Go®, give us confidence as we enter the new year and begin to sell the evolution of our enterprise software solution.”

In 2019, Spok returned $16.4 million in capital to stockholders. During the year, the Company paid approximately $9.8 million in regular quarterly dividends and repurchased 532,354 shares of common stock, totaling approximately $6.6 million. “In 2019, we were proud to be able to execute against our capital allocation strategy, returning capital through dividends and share repurchases," continued Kelly. "This quarter represents more than 50 consecutive quarters of paying a dividend. In fact, we have returned over $600 million in dividends and share repurchases over that timeframe. We remain committed to paying our quarterly dividend in 2020 and have been able to return value to our stockholders through our dividend program while continuing to invest in our integrated communication platform and remaining a debt-free company."

Kelly noted that in addition to the financial performance the Company was able to achieve in 2019, progress was made in several other areas, including product development, sales strategy and key strategic partnership agreements. “Spok continues to build an industry-leading reputation,” commented Kelly. “During the quarter, we did more than thirty new six-figure installations of Spok solutions for our customers. For the full year 2019, we added more than 160 new accounts primarily in the healthcare and government sectors, including modernizing communications for new customers such as Toronto-based North York General Hospital and the Colorado-based Vail Health System. Additionally, during the year we announced key strategic partnerships, most notably with Amazon Web Services (AWS) for a complete cloud services infrastructure, giving Spok enterprise customers excellence in security, agility, and breadth and depth of services with a cloud-native communication solution. Again, in 2019, our management were keynote speakers at numerous C-suite conferences; Spok received recognition as the #1 secure communications platform for hospitals and health systems by Black Book Market Research; and we continue to work with all of the U.S. News & World Report Best Adult Hospitals. During the year, we also continued to add depth and experience to the Spok management team, with our new Chief Medical Officer, Dr. Matt Mesnik, and Chief Information Officer, Tim Tindle. We intend to carry all this momentum into 2020 to stimulate long-term growth."

Michael W. Wallace, chief operating officer and chief financial officer, said: “Expense management and strong financial discipline have allowed us to continue to invest in our business for long-term growth. Our ability to align our expense base with the market demand we are seeing and drive high renewal rates in our recurring revenue categories has helped Spok to more than offset the 12.6 percent increase in research and development expenses over the past year to support the strategic investments we are making in our sales and product platforms.

"In the fourth quarter of 2019, we recognized non-cash pre-tax goodwill impairment charges of $8.8 million," continued Wallace. "This goodwill impairment relates to impairment charges recognized in the fourth quarter of 2019 as a result of the Company's annual goodwill impairment testing and, in our belief, does not reflect management's confidence in the future value of our business. Our outlook for the business continues to remain strong. We believe Spok Go is set to meet a significant need in the healthcare marketplace and will create significant value for shareholders in the coming years.

"Finally, Spok’s balance sheet remains strong, with a cash, cash equivalents and short-term investment balance of $77.3 million at December 31, 2019. Despite the continued investment in our technology platform and infrastructure, during the year, Spok generated more than $11 million of net cash provided by operating activities that partially offset cash returned to shareholders and capital expenditures.”

Development Update:

Earlier this week, the Company announced a new name and advanced capabilities for its integrated, cloud-native communication platform. The newly named Spok Go® platform drives action by dynamically connecting clinical teams with the people and information they need when and where it matters most. "Our mission is to build communications capabilities that help save lives and solve multiple challenges facing healthcare systems today,” commented Kelly. “The complex needs of our healthcare customers are not just a priority, but our driving force for innovation.”

New capabilities in the most recent release of Spok Go include:

  • Native HL7 services with easy to use browser-based site configuration
  • Clinical workflow templates for orders, lab results and critical test results
  • Role-based multi-site enterprise on-call scheduling with ability to view personal schedules in Spok Go
  • Priority-based enterprise messaging for groups, roles and individual users
  • Role-based multi-site nursing staff assignment
  • Innovative activity feeds capability introduced for web and mobile applications

Spok will showcase the newest capabilities of Spok Go at HIMSS20 (booth #2579) in Orlando, Florida, March 9 - 13, 2020. Learn more at spok.com/HIMSS.

Business Outlook:

Commenting on the Company’s previously provided financial guidance for 2019, Wallace noted: “We are pleased that 2019 results were consistent with the guidance ranges we had provided. For the year, total revenue of $160.3 million was slightly below the midpoint of our guidance range of $156 million to $174 million, adjusted operating expenses (excluding depreciation, amortization and accretion and the goodwill impairment) of $158.0 million were also slightly below the midpoint of our guidance range of $155 million to $165 million, and capital expenses of $4.8 million were slightly below the midpoint of our guidance range of $3.0 million to $7.0 million.”

Regarding financial guidance for 2020, Wallace said the Company expects total revenue to range from $149 million to $165 million. Included in that total, the Company expects software revenue to comprise $72 million to $80 million, consistent with 2019 levels at the low end of the guidance range and a 10.9 percent improvement from 2019 at the high end of the guidance range. Also, Spok expects adjusted operating expenses (excluding depreciation, amortization and accretion) to range from $158 million to $167 million, and capital expenses to range from $2.3 million to $6.3 million.

2019 Fourth-Quarter and Full-Year Call and Replay:

Spok plans to host a conference call for investors to discuss its 2019 fourth-quarter and full-year results at 10:00 a.m. ET on Thursday, February 27, 2020. Dial-in numbers for the call are 1-334-323-0501 or 800-353-6461. The pass code for the call is 3488038. A replay of the call will be available from 1:00 p.m. ET on February 27, 2020 until 1:00 p.m. ET on Thursday, March 12, 2020. To listen to the replay, please register at http://tinyurl.com/Spok2019Q4earningsreplay. Please enter the registration information, and you will be given access to the replay.

About Spok

Spok, Inc., a wholly owned subsidiary of Spok Holdings, Inc. (NASDAQ: SPOK), headquartered in Springfield, Virginia, is proud to be a global leader in healthcare communications. We deliver clinical information to care teams when and where it matters most to improve patient outcomes. Top hospitals rely on the Spok Care Connect® and Spok Go® platforms to enhance workflows for clinicians, support administrative compliance, and provide a better experience for patients. Our customers send over 100 million messages each month through their Spok® solutions. Spok is making care collaboration easier. For more information, visit spok.com or follow @spoktweets on Twitter.

Spok is a trademark of Spok Holdings, Inc. Spok Care Connect and Spok Go are trademarks of Spok, Inc.

Safe Harbor Statement under the Private Securities Litigation Reform Act: Statements contained herein or in prior press releases which are not historical fact, such as statements regarding Spok’s future operating and financial performance, are forward-looking statements for purposes of the safe harbor provisions under the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve risks and uncertainties that may cause Spok’s actual results to be materially different from the future results expressed or implied by such forward-looking statements. Factors that could cause actual results to differ materially from those expectations include, but are not limited to, declining demand for paging products and services, continued demand for our software products and services, our ability to develop additional software solutions for our customers and manage our development as a global organization, the ability to manage operating expenses, particularly third party consulting services and research and development costs, future capital needs, competitive pricing pressures, competition from traditional paging services, other wireless communications services and other software providers, many of which are substantially larger and have much greater financial and human capital resources, changes in customer purchasing priorities or capital expenditures, government regulation of our products and services and the healthcare and health insurance industries, reliance upon third-party providers for certain equipment and services, unauthorized breaches or failures in cybersecurity measures adopted by us and/or included in our products and services, the effects of changes in accounting policies or practices, a decline in our stock price or other events or circumstances that result in future goodwill impairments, as well as other risks described from time to time in our periodic reports and other filings with the Securities and Exchange Commission. Although Spok believes the expectations reflected in the forward-looking statements are based on reasonable assumptions, it can give no assurance that its expectations will be attained. Spok disclaims any intent or obligation to update any forward-looking statements.

SPOK HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (a)

(Unaudited and in thousands except share, per share amounts and ARPU)

 

 

 

 

 

 

 

 

 

 

 

For the three months ended

 

For the twelve months ended

 

 

12/31/2019

 

12/31/2018

 

12/31/2019

 

12/31/2018

Revenue:

 

 

 

 

 

 

 

 

Wireless

 

$

21,615

 

 

$

23,091

 

 

$

88,167

 

 

$

94,277

 

Software

 

 

17,933

 

 

 

20,165

 

 

 

72,122

 

 

 

75,197

 

Total revenue

 

 

39,548

 

 

 

43,256

 

 

 

160,289

 

 

 

169,474

 

Operating expenses:

 

 

 

 

 

 

 

 

Cost of revenue

 

 

8,051

 

 

 

8,772

 

 

 

30,072

 

 

 

32,408

 

Research and development

 

 

7,132

 

 

 

6,618

 

 

 

27,543

 

 

 

24,464

 

Technology operations

 

 

8,083

 

 

 

8,120

 

 

 

31,428

 

 

 

31,356

 

Selling and marketing

 

 

5,891

 

 

 

6,275

 

 

 

23,170

 

 

 

24,553

 

General and administrative

 

 

11,531

 

 

 

10,721

 

 

 

45,787

 

 

 

49,097

 

Depreciation, amortization and accretion

 

 

2,250

 

 

 

2,601

 

 

 

9,249

 

 

 

10,769

 

Goodwill impairment

 

 

8,849

 

 

 

 

 

8,849

 

 

 

Total operating expenses

 

 

51,787

 

 

 

43,107

 

 

 

176,098

 

 

 

172,647

 

% of total revenue

 

 

130.9

%

 

 

99.7

%

 

 

109.9

%

 

 

101.9

%

Operating (loss) income

 

 

(12,239

)

 

 

149

 

 

 

(15,809

)

 

 

(3,173

)

% of total revenue

 

 

(30.9

)%

 

 

0.3

%

 

 

(9.9

)%

 

 

(1.9

)%

Interest income

 

 

350

 

 

 

628

 

 

 

1,651

 

 

 

1,638

 

Other income (expense)

 

 

206

 

 

 

(593

)

 

 

735

 

 

 

(650

)

(Loss) income before income taxes

 

 

(11,683

)

 

 

184

 

 

 

(13,423

)

 

 

(2,185

)

Benefit from income taxes

 

 

2,172

 

 

 

5

 

 

 

2,658

 

 

 

706

 

Net (loss) income

 

$

(9,511

)

 

$

189

 

 

$

(10,765

)

 

$

(1,479

)

Basic and diluted net (loss) income income per common share

 

$

(0.50

)

 

$

0.01

 

 

$

(0.56

)

 

$

(0.08

)

Basic weighted average common shares outstanding

 

 

18,860,020

 

 

 

19,445,401

 

 

 

19,089,402

 

 

 

19,667,891

 

Diluted weighted average common shares outstanding

 

 

18,860,020

 

 

 

19,445,401

 

 

 

19,089,402

 

 

 

19,667,891

 

Cash dividends declared per common share

 

 

0.125

 

 

 

0.125

 

 

 

0.50

 

 

 

0.50

 

Key statistics:

 

 

 

 

 

 

 

 

Units in service

 

 

938

 

 

 

992

 

 

 

938

 

 

 

992

 

Average revenue per unit (ARPU)

 

$

7.33

 

 

$

7.36

 

 

$

7.34

 

 

$

7.39

 

Bookings

 

$

21,932

 

 

$

23,076

 

 

$

78,341

 

 

$

81,268

 

Backlog

 

$

50,553

 

 

$

40,422

 

 

$

50,553

 

 

$

40,422

 

 

 

 

 

 

 

 

 

 

(a) Slight variations in totals are due to rounding.

SPOK HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (a)

(Unaudited and in thousands except share, per share amounts and ARPU)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the three months ended

 

 

12/31/2019

 

9/30/2019

 

6/30/2019

 

3/31/2019

 

12/31/2018

 

9/30/2018

 

6/30/2018

 

3/31/2018

Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Wireless

 

$

21,615

 

 

$

21,814

 

 

$

22,127

 

 

$

22,610

 

 

$

23,091

 

 

$

23,259

 

 

$

23,658

 

 

$

24,269

 

Software

 

 

17,933

 

 

 

17,639

 

 

 

17,398

 

 

 

19,154

 

 

 

20,165

 

 

 

19,217

 

 

 

16,970

 

 

 

18,845

 

Total revenue

 

 

39,548

 

 

 

39,453

 

 

 

39,525

 

 

 

41,764

 

 

 

43,256

 

 

 

42,476

 

 

 

40,628

 

 

 

43,114

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenue (b)

 

 

8,051

 

 

 

7,190

 

 

 

7,239

 

 

 

7,592

 

 

 

8,772

 

 

 

8,141

 

 

 

7,596

 

 

 

7,878

 

Research and development

 

 

7,132

 

 

 

7,437

 

 

 

6,807

 

 

 

6,167

 

 

 

6,618

 

 

 

5,934

 

 

 

6,177

 

 

 

5,735

 

Technology operations

 

 

8,083

 

 

 

7,805

 

 

 

7,866

 

 

 

7,674

 

 

 

8,120

 

 

 

7,787

 

 

 

7,698

 

 

 

7,750

 

Selling and marketing

 

 

5,891

 

 

 

5,595

 

 

 

5,574

 

 

 

6,110

 

 

 

6,275

 

 

 

5,716

 

 

 

6,093

 

 

 

6,490

 

General and administrative

 

 

11,531

 

 

 

11,813

 

 

 

11,696

 

 

 

10,747

 

 

 

10,721

 

 

 

13,673

 

 

 

12,741

 

 

 

11,964

 

Depreciation, amortization and accretion

 

 

2,250

 

 

 

2,305

 

 

 

2,335

 

 

 

2,359

 

 

 

2,601

 

 

 

2,785

 

 

 

2,669

 

 

 

2,713

 

Goodwill impairment

 

 

8,849

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total operating expenses

 

 

51,787

 

 

 

42,145

 

 

 

41,517

 

 

 

40,649

 

 

 

43,107

 

 

 

44,036

 

 

 

42,974

 

 

 

42,530

 

% of total revenue

 

 

130.9

%

 

 

106.8

%

 

 

105.0

%

 

 

97.3

%

 

 

99.7

%

 

 

103.7

%

 

 

105.8

%

 

 

98.6

%

Operating (loss) income

 

 

(12,239

)

 

 

(2,692

)

 

 

(1,992

)

 

 

1,115

 

 

 

149

 

 

 

(1,560

)

 

 

(2,346

)

 

 

584

 

% of total revenue

 

 

(30.9

)%

 

 

(6.8

)%

 

 

(5.0

)%

 

 

2.7

%

 

 

0.3

%

 

 

(3.7

)%

 

 

(5.8

)%

 

 

1.4

%

Interest income

 

 

350

 

 

 

399

 

 

 

452

 

 

 

449

 

 

 

628

 

 

 

384

 

 

 

342

 

 

 

283

 

Other income (expense)

 

 

206

 

 

 

163

 

 

 

602

 

 

 

(236

)

 

 

(593

)

 

 

(110

)

 

 

102

 

 

 

(47

)

Loss (income) before income taxes

 

 

(11,683

)

 

 

(2,130

)

 

 

(938

)

 

 

1,328

 

 

 

184

 

 

 

(1,286

)

 

 

(1,902

)

 

 

820

 

Benefit from (provision for) income taxes

 

 

2,172

 

 

 

804

 

 

 

268

 

 

 

(586

)

 

 

5

 

 

 

446

 

 

 

730

 

 

 

(475

)

Net (loss) income

 

$

(9,511

)

 

$

(1,326

)

 

$

(670

)

 

$

742

 

 

$

189

 

 

$

(840

)

 

$

(1,172

)

 

$

345

 

Basic and diluted net (loss) income per common share

 

$

(0.50

)

 

$

(0.07

)

 

$

(0.03

)

 

$

0.04

 

 

$

0.01

 

 

$

(0.04

)

 

$

(0.06

)

 

$

0.02

 

Basic weighted average common shares outstanding

 

 

18,860,020

 

 

 

19,086,811

 

 

 

19,217,866

 

 

 

19,196,970

 

 

 

19,445,401

 

 

 

19,456,149

 

 

 

19,750,941

 

 

 

20,027,800

 

Diluted weighted average common shares outstanding

 

 

18,860,020

 

 

 

19,086,811

 

 

 

19,217,866

 

 

 

19,356,712

 

 

 

19,445,401

 

 

 

19,456,149

 

 

 

19,750,941

 

 

 

20,153,291

 

Key statistics:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Units in service

 

 

938

 

 

 

955

 

 

 

977

 

 

 

982

 

 

 

992

 

 

 

999

 

 

 

1,024

 

 

 

1,030

 

Average revenue per unit (ARPU)

 

$

7.33

 

 

$

7.32

 

 

$

7.26

 

 

$

7.32

 

 

$

7.36

 

 

$

7.40

 

 

$

7.41

 

 

$

7.47

 

Bookings

 

$

21,932

 

 

$

20,421

 

 

$

21,334

 

 

$

14,654

 

 

$

23,076

 

 

$

21,580

 

 

$

18,488

 

 

$

18,124

 

Backlog

 

$

50,553

 

 

$

42,604

 

 

$

39,718

 

 

$

37,392

 

 

$

40,422

 

 

$

36,366

 

 

$

36,295

 

 

$

35,930

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(a) Slight variations in totals are due to rounding.

(b) An adjustment of $771 to cost of revenue, identified in the fourth quarter of 2018, has been reflected in this table as an increase to cost of revenue of $166, $196 and $359 in the first, second and third quarters of 2018, respectively. Total operating expenses, operating income (loss), income (loss) before income taxes, Net (loss) income and net (loss) income per share have been adjusted accordingly to reflect these changes.

SPOK HOLDINGS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS (a)

(In thousands)

 

 

 

 

 

 

 

12/31/2019

 

12/31/2018

 

 

 

 

 

Assets

 

 

 

 

Current assets:

 

 

 

 

Cash and cash equivalents

 

$

47,361

 

 

$

83,343

 

Short term investments

 

 

29,899

 

 

 

3,963

 

Accounts receivable, net

 

 

30,174

 

 

 

32,386

 

Prepaid expenses

 

 

7,517

 

 

 

6,906

 

Other current assets

 

 

1,710

 

 

 

2,672

 

Inventory

 

 

1,004

 

 

 

1,708

 

Total current assets

 

 

117,665

 

 

 

130,978

 

Non-current assets:

 

 

 

 

Property and equipment, net

 

 

8,000

 

 

 

10,354

 

Operating Lease right-of-use assets

 

 

16,317

 

 

 

Goodwill

 

 

124,182

 

 

 

133,031

 

Intangible assets, net

 

 

2,917

 

 

 

5,417

 

Deferred income tax assets

 

 

48,983

 

 

 

46,484

 

Other non-current assets

 

 

1,808

 

 

 

1,448

 

Total non-current assets

 

 

202,207

 

 

 

196,734

 

Total assets

 

$

319,872

 

 

$

327,712

 

Liabilities and stockholders' equity

 

 

 

 

Current liabilities:

 

 

 

 

Accounts payable

 

$

3,615

 

 

$

2,010

 

Accrued compensation and benefits

 

 

11,680

 

 

 

11,348

 

Accrued taxes

 

 

1,529

 

 

 

1,822

 

Deferred revenue

 

 

25,944

 

 

 

26,106

 

Operating lease liabilities

 

 

5,437

 

 

 

Other current liabilities

 

 

2,978

 

 

 

3,662

 

Total current liabilities

 

 

51,183

 

 

 

44,948

 

Non-current liabilities:

 

 

 

 

Asset retirement obligations

 

 

6,061

 

 

 

6,513

 

Operating lease liabilities

 

 

11,575

 

 

 

Other long-term liabilities

 

 

959

 

 

 

1,697

 

Total non-current liabilities

 

 

18,595

 

 

 

8,210

 

Total liabilities

 

 

69,778

 

 

 

53,158

 

Commitments and contingencies

 

 

 

 

Stockholders' equity:

 

 

 

 

Preferred stock

 

$

 

 

$

 

Common stock

 

 

2

 

 

 

2

 

Additional paid-in capital

 

 

86,874

 

 

 

90,559

 

Accumulated other comprehensive loss

 

 

(1,601

)

 

 

(1,301

)

Retained earnings

 

 

164,819

 

 

 

185,294

 

Total stockholders' equity

 

 

250,094

 

 

 

274,554

 

Total liabilities and stockholders' equity

 

$

319,872

 

 

$

327,712

 

 

 

 

 

 

(a) Slight variations in totals are due to rounding.

SPOK HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (a)

(Unaudited and in thousands)

 

 

 

 

 

 

 

For the twelve months ended

 

 

12/31/2019

 

12/31/2018

Cash flows provided by operating activities:

 

 

 

 

Net loss

 

$

(10,765

)

 

$

(1,479

)

Adjustments to reconcile net loss to net cash provided by operating activities:

 

 

 

 

Depreciation, amortization and accretion

 

 

9,249

 

 

 

10,769

 

Goodwill impairment

 

 

8,849

 

 

 

Deferred income tax expense

 

 

(3,253

)

 

 

(1,692

)

Stock based compensation

 

 

3,643

 

 

 

4,954

 

Provisions for doubtful accounts, service credits, adjustments of non-cash transaction taxes and other

 

 

694

 

 

 

1,922

 

Changes in assets and liabilities:

 

 

 

 

Accounts receivable

 

 

964

 

 

 

(915

)

Prepaid expenses, inventory and other assets

 

 

2,913

 

 

 

(646

)

Accounts payable, accrued liabilities and other

 

 

(643

)

 

 

(1,732

)

Deferred revenue

 

 

42

 

 

 

(866

)

Net cash provided by operating activities

 

 

11,693

 

 

 

10,315

 

Cash flows from investing activities:

 

 

 

 

Purchases of property and equipment

 

 

(4,837

)

 

 

(5,915

)

Purchase of short-term investments

 

 

(59,385

)

 

 

(3,911

)

Maturities of short-term investments

 

 

34,000

 

 

 

4,000

 

Net cash used in investing activities

 

 

(30,222

)

 

 

(5,826

)

Cash flows from financing activities:

 

 

 

 

Cash distributions to stockholders

 

 

(9,819

)

 

 

(10,064

)

Purchase of common stock (including commissions)

 

 

(6,575

)

 

 

(13,483

)

Proceeds from issuance of common stock under the Employee Stock Purchase Plan

 

 

258

 

 

 

247

 

Purchase of common stock for tax withholding on vested equity awards

 

 

(1,017

)

 

 

(976

)

Net cash used in financing activities

 

 

(17,153

)

 

 

(24,276

)

Effect of exchange rate on cash

 

 

(300

)

 

 

(49

)

Net decrease in cash and cash equivalents

 

 

(35,982

)

 

 

(19,836

)

Cash and cash equivalents, beginning of period

 

 

83,343

 

 

 

103,179

 

Cash and cash equivalents, end of period

 

$

47,361

 

 

$

83,343

 

Supplemental disclosure:

 

 

 

 

Income taxes paid

 

$

901

 

 

$

1,061

 

 

 

 

 

 

(a) Slight variations in totals are due to rounding.

SPOK HOLDINGS, INC.

CONSOLIDATED REVENUE

SUPPLEMENTAL INFORMATION (a)

(Unaudited and in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the three months ended

 

 

12/31/2019

 

9/30/2019

 

6/30/2019

 

3/31/2019

 

12/31/2018

 

9/30/2018

 

6/30/2018

 

3/31/2018

Revenue

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Paging

 

$

20,826

 

 

$

21,212

 

 

$

21,342

 

 

$

21,687

 

 

$

21,997

 

 

$

22,442

 

 

$

22,824

 

 

$

23,308

 

Non-paging

 

 

789

 

 

 

602

 

 

 

785

 

 

 

923

 

 

 

1,094

 

 

 

817

 

 

 

834

 

 

 

961

 

Total wireless revenue

 

$

21,615

 

 

$

21,814

 

 

$

22,127

 

 

$

22,610

 

 

$

23,091

 

 

$

23,259

 

 

$

23,658

 

 

$

24,269

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

License

 

 

1,711

 

 

 

2,723

 

 

 

1,676

 

 

 

2,840

 

 

 

3,496

 

 

 

3,175

 

 

 

1,993

 

 

 

4,376

 

Services

 

 

4,947

 

 

 

4,202

 

 

 

4,835

 

 

 

5,206

 

 

 

5,103

 

 

 

4,555

 

 

 

4,363

 

 

 

4,071

 

Equipment

 

 

1,125

 

 

 

689

 

 

 

842

 

 

 

963

 

 

 

1,568

 

 

 

1,296

 

 

 

1,107

 

 

 

1,024

 

Operations revenue

 

$

7,783

 

 

$

7,614

 

 

$

7,353

 

 

$

9,009

 

 

$

10,167

 

 

$

9,026

 

 

$

7,463

 

 

$

9,471

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Maintenance revenue

 

$

10,150

 

 

$

10,025

 

 

$

10,045

 

 

$

10,145

 

 

$

9,998

 

 

$

10,191

 

 

$

9,507

 

 

$

9,374

 

Total software revenue

 

$

17,933

 

 

$

17,639

 

 

$

17,398

 

 

$

19,154

 

 

$

20,165

 

 

$

19,217

 

 

$

16,970

 

 

$

18,845

 

 

 

Total revenue

 

$

39,548

 

 

$

39,453

 

 

$

39,525

 

 

$

41,764

 

 

$

43,256

 

 

$

42,476

 

 

$

40,628

 

 

$

43,114

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(a) Slight variations in totals are due to rounding.

SPOK HOLDINGS, INC.

CONSOLIDATED OPERATING EXPENSES

SUPPLEMENTAL INFORMATION (a)

(Unaudited and in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the three months ended

 

 

12/31/2019

 

9/30/2019

 

6/30/2019

 

3/31/2019

 

12/31/2018

 

9/30/2018

 

6/30/2018

 

3/31/2018

Cost of revenue

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Payroll and related

 

$

5,222

 

 

$

5,099

 

 

$

4,749

 

 

$

4,931

 

 

$

4,868

 

 

$

4,923

 

 

$

4,853

 

 

$

4,874

 

Cost of sales

 

 

2,278

 

 

 

1,567

 

 

 

1,900

 

 

 

2,080

 

 

 

3,349

 

 

 

2,623

 

 

 

2,119

 

 

 

2,475

 

Stock based compensation

 

 

42

 

 

 

21

 

 

 

97

 

 

 

107

 

 

 

44

 

 

 

75

 

 

 

75

 

 

 

55

 

Other

 

 

509

 

 

 

503

 

 

 

493

 

 

 

474

 

 

 

511

 

 

 

520

 

 

 

549

 

 

 

474

 

Total cost of revenue (b)

 

 

8,051

 

 

 

7,190

 

 

 

7,239

 

 

 

7,592

 

 

 

8,772

 

 

 

8,141

 

 

 

7,596

 

 

 

7,878

 

Research and development

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Payroll and related

 

 

5,056

 

 

 

5,083

 

 

 

4,639

 

 

 

4,263

 

 

 

4,350

 

 

 

4,709

 

 

 

4,506

 

 

 

4,002

 

Outside services

 

 

1,742

 

 

 

2,027

 

 

 

1,912

 

 

 

1,745

 

 

 

2,115

 

 

 

1,040

 

 

 

1,481

 

 

 

1,513

 

Stock based compensation

 

 

113

 

 

 

102

 

 

 

84

 

 

 

11

 

 

 

5

 

 

 

71

 

 

 

90

 

 

 

71

 

Other

 

 

221

 

 

 

225

 

 

 

172

 

 

 

148

 

 

 

148

 

 

 

114

 

 

 

100

 

 

 

149

 

Total research and development

 

 

7,132

 

 

 

7,437

 

 

 

6,807

 

 

 

6,167

 

 

 

6,618

 

 

 

5,934

 

 

 

6,177

 

 

 

5,735

 

Technology operations

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Payroll and related

 

 

2,656

 

 

 

2,823

 

 

 

2,662

 

 

 

2,647

 

 

 

2,616

 

 

 

2,866

 

 

 

2,618

 

 

 

2,693

 

Site rent

 

 

3,669

 

 

 

3,269

 

 

 

3,480

 

 

 

3,296

 

 

 

3,432

 

 

 

3,482

 

 

 

3,538

 

 

 

3,496

 

Telecommunications

 

 

1,026

 

 

 

1,016

 

 

 

1,019

 

 

 

996

 

 

 

1,021

 

 

 

950

 

 

 

935

 

 

 

898

 

Stock based compensation

 

 

32

 

 

 

30

 

 

 

30

 

 

 

30

 

 

 

24

 

 

 

24

 

 

 

24

 

 

 

24

 

Other

 

 

700

 

 

 

667

 

 

 

675

 

 

 

705

 

 

 

1,027

 

 

 

465

 

 

 

583

 

 

 

639

 

Total technology operations

 

 

8,083

 

 

 

7,805

 

 

 

7,866

 

 

 

7,674

 

 

 

8,120

 

 

 

7,787

 

 

 

7,698

 

 

 

7,750

 

Selling and marketing

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Payroll and related

 

 

3,382

 

 

 

3,524

 

 

 

3,329

 

 

 

3,273

 

 

 

3,047

 

 

 

3,401

 

 

 

3,311

 

 

 

3,294

 

Commissions

 

 

1,158

 

 

 

1,114

 

 

 

1,298

 

 

 

1,424

 

 

 

1,759

 

 

 

1,225

 

 

 

1,397

 

 

 

1,774

 

Stock based compensation

 

 

164

 

 

 

137

 

 

 

128

 

 

 

161

 

 

 

99

 

 

 

135

 

 

 

135

 

 

 

135

 

Advertising and events

 

 

1,034

 

 

 

703

 

 

 

656

 

 

 

933

 

 

 

1,236

 

 

 

857

 

 

 

996

 

 

 

1,158

 

Other

 

 

153

 

 

 

117

 

 

 

163

 

 

 

319

 

 

 

134

 

 

 

98

 

 

 

254

 

 

 

129

 

Total selling and marketing

 

 

5,891

 

 

 

5,595

 

 

 

5,574

 

 

 

6,110

 

 

 

6,275

 

 

 

5,716

 

 

 

6,093

 

 

 

6,490

 

General and administrative

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Payroll and related

 

 

3,974

 

 

 

4,220

 

 

 

4,136

 

 

 

4,041

 

 

 

4,087

 

 

 

4,834

 

 

 

4,340

 

 

 

4,416

 

Stock based compensation

 

 

770

 

 

 

674

 

 

 

690

 

 

 

219

 

 

 

860

 

 

 

1,118

 

 

 

943

 

 

 

949

 

Bad debt

 

 

56

 

 

 

402

 

 

 

(96

)

 

 

308

 

 

 

303

 

 

 

513

 

 

 

279

 

 

 

528

 

Facility rent, office, and technology costs

 

 

1,952

 

 

 

2,369

 

 

 

2,485

 

 

 

2,294

 

 

 

2,072

 

 

 

2,925

 

 

 

2,323

 

 

 

2,641

 

Outside services

 

 

2,350

 

 

 

2,004

 

 

 

2,306

 

 

 

1,776

 

 

 

2,062

 

 

 

1,864

 

 

 

2,443

 

 

 

1,422

 

Taxes, licenses and permits

 

 

1,000

 

 

 

888

 

 

 

863

 

 

 

921

 

 

 

111

 

 

 

1,081

 

 

 

1,024

 

 

 

1,080

 

Other

 

 

1,429

 

 

 

1,256

 

 

 

1,312

 

 

 

1,188

 

 

 

1,226

 

 

 

1,338

 

 

 

1,389

 

 

 

928

 

Total general and administrative

 

 

11,531

 

 

 

11,813

 

 

 

11,696

 

 

 

10,747

 

 

 

10,721

 

 

 

13,673

 

 

 

12,741

 

 

 

11,964

 

Depreciation, amortization and accretion

 

 

2,250

 

 

 

2,305

 

 

 

2,335

 

 

 

2,359

 

 

 

2,601

 

 

 

2,785

 

 

 

2,669

 

 

 

2,713

 

Goodwill impairment

 

 

8,849

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses

 

$

51,787

 

 

$

42,145

 

 

$

41,517

 

 

$

40,649

 

 

$

43,107

 

 

$

44,036

 

 

$

42,974

 

 

$

42,530

 

Capital expenditures

 

$

679

 

 

$

1,378

 

 

$

1,495

 

 

$

1,287

 

 

$

830

 

 

$

1,630

 

 

$

2,299

 

 

$

1,164

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(a) Slight variations in totals are due to rounding.

(b) An adjustment of $771 to cost of sales, identified in the fourth quarter of 2018, has been reflected in this table as an increase to cost of sales of $166, $196 and $359 in the first, second and third quarters of 2018, respectively. Total cost of revenue and operating expenses have been adjusted accordingly to reflect these changes.

SPOK HOLDINGS, INC.

UNITS IN SERVICE ACTIVITY, MARKET SEGMENT, CHURN

AND AVERAGE REVENUE PER UNIT (ARPU) (a)

(Unaudited and in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the three months ended

 

 

12/31/2019

 

9/30/2019

 

6/30/2019

 

3/31/2019

 

12/31/2018

 

9/30/2018

 

6/30/2018

 

3/31/2018

Paging units in service

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Beginning units in service (000's)

 

 

955

 

 

 

977

 

 

 

982

 

 

 

992

 

 

 

999

 

 

 

1,024

 

 

 

1,030

 

 

 

1,049

 

Gross placements

 

 

22

 

 

 

28

 

 

 

35

 

 

 

27

 

 

 

30

 

 

 

31

 

 

 

35

 

 

 

25

 

Gross disconnects

 

 

(39

)

 

 

(50

)

 

 

(40

)

 

 

(37

)

 

 

(37

)

 

 

(56

)

 

 

(41

)

 

 

(44

)

Net change

 

 

(17

)

 

 

(22

)

 

 

(5

)

 

 

(10

)

 

 

(7

)

 

 

(25

)

 

 

(6

)

 

 

(19

)

Ending units in service

 

 

938

 

 

 

955

 

 

 

977

 

 

 

982

 

 

 

992

 

 

 

999

 

 

 

1,024

 

 

 

1,030

 

End of period units in service % of total (b)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Healthcare

 

 

82.4

%

 

 

81.7

%

 

 

81.7

%

 

 

81.6

%

 

 

81.4

%

 

 

81.7

%

 

 

81.5

%

 

 

81.1

%

Government

 

 

5.4

%

 

 

5.5

%

 

 

5.6

%

 

 

5.8

%

 

 

5.8

%

 

 

5.8

%

 

 

5.7

%

 

 

5.9

%

Large enterprise

 

 

5.5

%

 

 

6.1

%

 

 

5.9

%

 

 

5.9

%

 

 

5.9

%

 

 

6.0

%

 

 

6.0

%

 

 

6.0

%

Other(b)

 

 

6.6

%

 

 

6.7

%

 

 

6.8

%

 

 

6.7

%

 

 

6.9

%

 

 

6.5

%

 

 

6.8

%

 

 

7.0

%

Total

 

 

100.0

%

 

 

100.0

%

 

 

100.0

%

 

 

100.0

%

 

 

100.0

%

 

 

100.0

%

 

 

100.0

%

 

 

100.0

%

Account size ending units in service (000's)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1 to 100 units

 

 

69

 

 

 

72

 

 

 

74

 

 

 

77

 

 

 

78

 

 

 

81

 

 

 

85

 

 

 

88

 

101 to 1,000 units

 

 

173

 

 

 

175

 

 

 

179

 

 

 

186

 

 

 

190

 

 

 

192

 

 

 

197

 

 

 

198

 

>1,000 units

 

 

696

 

 

 

708

 

 

 

724

 

 

 

719

 

 

 

724

 

 

 

726

 

 

 

742

 

 

 

744

 

Total

 

 

938

 

 

 

955

 

 

 

977

 

 

 

982

 

 

 

992

 

 

 

999

 

 

 

1,024

 

 

 

1,030

 

Account size net loss rate(c)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1 to 100 units

 

 

(3.8

)%

 

 

(2.1

)%

 

 

(3.2

)%

 

 

(2.3

)%

 

 

(1.7

)%

 

 

(4.3

)%

 

 

(3.8

)%

 

 

(4.7

)%

101 to 1,000 units

 

 

(1.0

)%

 

 

(2.4

)%

 

 

(3.9

)%

 

 

(2.3

)%

 

%

 

 

(2.7

)%

 

 

(0.6

)%

 

 

(10.0

)%

>1,000 units

 

 

(1.8

)%

 

 

(2.2

)%

 

 

0.7

%

 

 

(1.1

)%

 

 

(0.1

)%

 

 

(2.2

)%

 

 

(0.2

)%

 

 

(1.9

)%

Total

 

 

(1.8

)%

 

 

(2.2

)%

 

 

(0.5

)%

 

 

(1.1

)%

 

 

(0.2

)%

 

 

(2.5

)%

 

 

(0.6

)%

 

 

(1.8

)%

Account size ARPU

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1 to 100 units

 

$

11.99

 

 

$

11.84

 

 

$

12.00

 

 

$

11.90

 

 

$

11.61

 

 

$

11.33

 

 

$

12.04

 

 

$

12.13

 

101 to 1,000 units

 

 

8.31

 

 

 

8.41

 

 

 

8.47

 

 

 

8.35

 

 

 

8.28

 

 

 

8.19

 

 

 

8.34

 

 

 

8.47

 

>1,000 units

 

 

6.62

 

 

 

6.59

 

 

 

6.47

 

 

 

6.57

 

 

 

6.69

 

 

 

6.74

 

 

 

6.62

 

 

 

6.65

 

Total

 

$

7.33

 

 

$

7.32

 

 

$

7.26

 

 

$

7.32

 

 

$

7.36

 

 

$

7.40

 

 

$

7.41

 

 

$

7.47

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(a) Slight variations in totals are due to rounding.

(b) Other includes hospitality, resort and indirect units

(c) Net loss rate is net current period placements and disconnected units in service divided by prior period ending units in service.

SPOK HOLDINGS, INC.

RECONCILIATION FROM NET INCOME (LOSS) TO EBITDA (a)

(Unaudited and in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the three months ended

 

 

12/31/2019

 

9/30/2019

 

6/30/2019

 

3/31/2019

 

12/31/2018

 

9/30/2018

 

6/30/2018

 

3/31/2018

Reconciliation of net income (loss) to EBITDA (b):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net (loss) income (c)

 

$

(9,511

)

 

$

(1,326

)

 

$

(670

)

 

$

742

 

 

$

189

 

 

$

(840

)

 

$

(1,172

)

 

$

345

 

Plus (less): (benefit from) provision for income taxes

 

 

(2,172

)

 

 

(804

)

 

 

(268

)

 

 

586

 

 

 

(5

)

 

 

(446

)

 

 

(730

)

 

 

475

 

Plus (less): Other expense (income)

 

 

(206

)

 

 

(163

)

 

 

(602

)

 

 

236

 

 

 

593

 

 

 

110

 

 

 

(102

)

 

 

47

 

Less: Interest income

 

 

(350

)

 

 

(399

)

 

 

(452

)

 

 

(449

)

 

 

(628

)

 

 

(384

)

 

 

(342

)

 

 

(283

)

Operating (loss) income

 

 

(12,239

)

 

 

(2,692

)

 

 

(1,992

)

 

 

1,115

 

 

 

149

 

 

 

(1,560

)

 

 

(2,346

)

 

 

584

 

Plus: depreciation, amortization and accretion

 

 

2,250

 

 

 

2,305

 

 

 

2,335

 

 

 

2,359

 

 

 

2,601

 

 

 

2,785

 

 

 

2,669

 

 

 

2,713

 

EBITDA (as defined by the Company)

 

$

(9,989

)

 

$

(387

)

 

$

343

 

 

$

3,474

 

 

$

2,750

 

 

$

1,225

 

 

$

323

 

 

$

3,297

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the twelve months ended

 

 

 

 

 

 

 

 

 

 

 

 

 

 

12/31/2019

 

12/31/2018

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation of net income (loss) to EBITDA (b):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

$

(10,765

)

 

$

(1,479

)

 

 

 

 

 

 

 

 

 

 

 

 

(Less) plus: (Benefit from) provision for income taxes

 

 

(2,658

)

 

 

(706

)

 

 

 

 

 

 

 

 

 

 

 

 

Plus (less): Other income (expense)

 

 

(735

)

 

 

650

 

 

 

 

 

 

 

 

 

 

 

 

 

Less: Interest income

 

 

(1,651

)

 

 

(1,638

)

 

 

 

 

 

 

 

 

 

 

 

 

Operating loss

 

 

(15,809

)

 

 

(3,173

)

 

 

 

 

 

 

 

 

 

 

 

 

Plus: depreciation, amortization and accretion

 

 

9,249

 

 

 

10,769

 

 

 

 

 

 

 

 

 

 

 

 

 

EBITDA (as defined by the Company)

 

$

(6,560

)

 

$

7,596

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

RECONCILIATION FROM OPERATING EXPENSES TO ADJUSTED OPERATING EXPENSES (a)

 

 

 

 

 

For the three months ended

 

 

12/31/2019

 

9/30/2019

 

6/30/2019

 

3/31/2019

 

12/31/2018

 

9/30/2018

 

6/30/2018

 

3/31/2018

(Dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses

 

$

51,787

 

 

$

42,145

 

 

$

41,517

 

 

$

40,649

 

 

$

43,107

 

 

$

44,036

 

 

$

42,974

 

 

$

42,530

 

Less: depreciation, amortization and accretion

 

 

2,250

 

 

 

2,305

 

 

 

2,335

 

 

 

2,359

 

 

 

2,601

 

 

 

2,785

 

 

 

2,669

 

 

 

2,713

 

Less: Goodwill impairment

 

$

8,849

 

 

$

 

 

$

 

 

$

 

 

$

 

 

$

 

 

$

 

 

$

 

Adjusted operating expenses

 

$

40,688

 

 

$

39,840

 

 

$

39,182

 

 

$

38,290

 

 

$

40,506

 

 

$

41,251

 

 

$

40,305

 

 

$

39,817

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(a) Slight variations in totals are due to rounding.

(b) EBITDA or earnings before interest, taxes, depreciation, amortization and accretion is a non-GAAP measure and is presented for analytical purposes only. Management and the Board of Directors rely on EBITDA for purposes of determining the Company’s capital allocation policies. EBITDA is also the starting point for the calculation of operating cash flow for purposes of determining whether management has achieved certain performance objectives in the Company’s short-term and long-term incentive plans.

(c) An adjustment to cost of revenue identified in the fourth quarter of 2018 of $771 has been reflected in this table as a reduction of Net income (loss) of $166, $196$359, and $771 in the first, second third, and fourth quarters respectively.

SPOK HOLDINGS, INC.

2020 FINANCIAL GUIDANCE

(Unaudited and in millions)

 

 

 

 

 

 

 

Guidance Range

 

 

From

 

To

Revenues

 

 

 

 

Wireless

 

77,000

 

85,000

Software

 

72,000

 

80,000

 

 

149,000

 

165,000

 

 

 

 

 

Adjusted Operating Expenses (a)

 

158,000

 

167,000

 

 

 

 

 

Capital Expenses

 

2,300

 

6,300

 

(a) Operating expenses exclude depreciation, amortization and accretion

 

Al Galgano
952-567-0295
Al.Galgano@spok.com

Source: Spok Holdings, Inc.

Al Galgano
952-567-0295
Al.Galgano@spok.com