Spok Reports 2019 Third Quarter Operating Results; Wireless Trends Continue to Improve; Record Level Software Revenue Backlog and Continued Strong Expense Management

Spok Reports 2019 Third Quarter Operating Results; Wireless Trends Continue to Improve; Record Level Software Revenue Backlog and Continued Strong Expense Management

Board Declares Regular Quarterly Dividend
SPRINGFIELD, Va.–(BUSINESS WIRE)–Spok Holdings, Inc. (NASDAQ: SPOK), the global leader in healthcare communications, today announced operating results for the third quarter and year-to-date period ended September 30, 2019. In addition, the Company’s Board of Directors declared a regular quarterly dividend of $0.125 per share, payable on December 10, 2019 to stockholders of record on November 15, 2019.

Key Third Quarter Operating Highlights:

Software bookings for the 2019 third quarter were $20.4 million. Software operations bookings of $9.8 million represented the highest quarterly bookings levels so far this year and Spok continues to see increasing demand for its solutions going into the fourth quarter. Third quarter maintenance renewal bookings were $10.6 million.

Software revenue backlog totaled $42.6 million at September 30, 2019, up from $36.4 million at September 30, 2018 and $39.7 million at the end of the prior quarter.

The revenue renewal rate for software maintenance in the third quarter of 2019 continued at greater than 99 percent.

Net paging unit losses were approximately 22,000 in the third quarter of 2019, down from third quarter 2018 losses of 25,000.

The quarterly rate of wireless revenue erosion was 1.4 percent in the third quarter of 2019, down from 1.7 percent in the third quarter of 2018. Based on twelve-month trailing revenue, the annual rate of wireless revenue erosion was 6.4 percent in the third quarter of 2019, down from 7.2 percent in the third quarter of 2018.

Total paging ARPU (average revenue per unit) was $7.32 in the third quarter of 2019, down from $7.40 in the third quarter of 2018.

Operating expenses in the third quarter of 2019 totaled $42.1 million, compared to $44.0 million in the prior year quarter. Adjusted operating expenses (excludes depreciation, amortization and accretion) totaled $39.8 million in the third quarter of 2019, compared to $41.3 in the year-earlier quarter.

Capital expenses were $1.4 million in the third quarter of 2019, compared to $1.5 million in the second quarter of 2019 and $1.6 million in the prior year quarter.

The number of full-time equivalent employees at September 30, 2019 totaled 617, compared to 603 at September 30, 2018.

Capital returned to stockholders in the third quarter of 2019 totaled $7.2 million, in the form of $2.4 million from dividends and $4.8 million from share repurchases.

The Company’s cash, cash equivalents and short-term investments balance at September 30, 2019 was $79.2 million, down from $87.3 million at December 31, 2018 and up from $77.7 million at June 30, 2019.

2019 Third Quarter and Year-To-Date Results:
Consolidated revenue for the third quarter of 2019 under Generally Accepted Accounting Principles (“GAAP”) was $39.5 million compared to $42.5 million in the third quarter of 2018. For the nine months of 2019, consolidated revenue totaled $120.7 million, compared to $126.2 million in the first nine months of 2018.

 

For the three months ended

 

For the nine months ended

 

September 30,

 

September 30,

 

Change

 

September 30,

 

September 30,

 

Change

(Dollars in thousands)

2019

 

2018

 

(%)

 

2019

 

2018

 

(%)

Wireless revenue

 

 

 

 

 

 

 

Paging revenue

$

21,212

$

22,442

(5.5

)%

 

$

64,241

$

68,574

(6.3

)%

Product and other revenue

602

817

(26.3

)%

 

2,311

2,612

(11.5

)%

Total wireless revenue

$

21,814

$

23,259

(6.2

)%

 

$

66,552

$

71,186

(6.5

)%

 

 

 

 

 

 

 

 

Software revenue

 

 

 

 

 

 

 

Operations revenue

$

7,614

$

9,026

(15.6

)%

 

$

23,974

$

25,961

(7.7

)%

Maintenance revenue

10,025

10,191

(1.6

)%

 

30,215

29,071

3.9

%

Total software revenue

17,639

19,217

(8.2

)%

 

54,189

55,032

(1.5

)%

Total revenue

$

39,453

$

42,476

(7.1

)%

 

$

120,741

$

126,218

(4.3

)%

GAAP net loss for the third quarter of 2019 was $1.3 million, or $0.07 per diluted share, compared to a net loss of $0.8 million, or $0.04 per diluted share, in the third quarter of 2018. GAAP net loss for the first nine months of 2019 was $1.3 million, or $0.07 per diluted share, compared to a net loss of $1.7 million, or $0.09 per diluted share, in the first nine months of 2018.

In the third quarter of 2019, the EBITDA (earnings before interest, taxes, depreciation and amortization) loss totaled $0.4 million. This compares to EBITDA of $1.2 million in the prior year quarter. In the first nine months of 2019, the Company generated $3.4 million of EBITDA, compared to EBITDA of $4.8 million in the prior year period.

 

For the three months ended

 

For the nine months ended

(Dollars in thousands)

September 30, 2019

September 30, 2018

 

September 30, 2019

September 30, 2018

Net loss

$

(1,326

)

$

(840

)

 

$

(1,255

)

$

(1,667

)

Basic and diluted net loss per share

$

(0.07

)

$

(0.04

)

 

$

(0.07

)

$

(0.09

)

EBITDA

$

(387

)

$

1,225

 

 

$

3,430

 

$

4,847

 

Management Commentary:
“We believe our performance in the third quarter of 2019 has positioned us well as we prepare to demonstrate our improved cloud-native and integrated communication platform to our customer base next week at our annual user conference, Connect 19,” said Vincent D. Kelly, president and chief executive officer. “In the third quarter, we continued to see improvements in both wireless unit and revenue trends, as well as a record level for our software revenue backlog. Third quarter performance was supported by continued strong software maintenance renewals and improved operating expense levels. This allowed us to return $7.2 million of capital to our stockholders in the form of dividends and share repurchases, while we continued to enhance our product offerings through our continued investments in our integrated communication platform, Spok Care Connect®.”

Kelly also noted that in addition to the Company’s quarterly financial performance, Spok made progress in several other areas, including product development, sales strategy and key strategic partnership agreements. “Earlier in the quarter, we were excited to announce that for the seventh consecutive year all 21 adult hospitals named to U.S. News & World Report’s 2019-20 Best Hospitals Honor Roll use Spok clinical communication solutions to facilitate care collaboration and support exceptional patient care. We believe this recognition enhances our industry-leading reputation and provides momentum as we welcome customers next week to Connect 19, Spok’s annual conference for healthcare professionals. There, we will bring together some of the industry’s leading innovators who are pushing the boundaries to advance and improve healthcare communications. This year, we are particularly pleased to demonstrate what we believe is a game-changer in healthcare communication technology, the next generation of the Spok Care Connect platform. Our collaboration with hospital leaders at these conferences, and throughout the year, has helped us create an enterprise platform that positions healthcare providers for success today and supports them with faster, smarter clinical communications for the next decade.”

Michael W. Wallace, chief financial officer, said, “Expense management and strong financial discipline have allowed us to continue to invest in our business for long-term growth. In the third quarter, operating expenses were down more than 4 percent on a year-over-year basis. Our balance sheet remains strong, as the cash, cash equivalents and short-term investments balance rose slightly from the prior quarter to $79.2 million at September 30, 2019, and we continue to have no debt.”

Business Outlook:
Commenting on the Company’s previously provided financial guidance for 2019, Wallace noted, “We are pleased that the third quarter results are in line with the full year 2019 guidance we had provided last quarter and we are reiterating those expectations.” Regarding financial guidance for 2019, Wallace said the Company expects total revenue to range from $156 million to $174 million. Included in that total, the Company expects software revenue to comprise $75 million to $85 million. Also, Spok expects adjusted operating expenses (excludes depreciation, amortization and accretion) to range from $155 million to $165 million, and capital expenses to range from $3 million to $7 million.

2019 Third-Quarter Call and Replay:
Spok plans to host a conference call for investors to discuss its 2019 third quarter results at 10:00 a.m. ET on Thursday, October 24, 2019. Dial-in numbers for the call are 334-323-0501 or 800-353-6461. The pass code for the call is 6600007. A replay of the call will be available from 1:00 p.m. ET on October 24, 2019 until 1:00 p.m. ET on Thursday, November 7, 2019. To listen to the replay, please register at http://tinyurl.com/Spok2019Q3earningsreplay. Please enter the registration information, and you will be given access to the replay.

About Spok
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® platform 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 Mobile 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, 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.

Tables to Follow

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 nine months ended

 

 

9/30/2019

 

9/30/2018

 

9/30/2019

 

9/30/2018

Revenue:

 

 

 

 

 

 

 

 

Wireless

 

$

21,814

 

 

$

23,259

 

 

$

66,552

 

 

$

71,186

 

Software

 

17,639

 

 

19,217

 

 

54,189

 

 

55,032

 

Total revenue

 

39,453

 

 

42,476

 

 

120,741

 

 

126,218

 

Operating expenses:

 

 

 

 

 

 

 

 

Cost of revenue

 

7,190

 

 

8,141

 

 

22,021

 

 

23,635

 

Research and development

 

7,437

 

 

5,934

 

 

20,411

 

 

17,845

 

Technology operations

 

7,805

 

 

7,787

 

 

23,345

 

 

23,235

 

Selling and marketing

 

5,595

 

 

5,716

 

 

17,279

 

 

18,279

 

General and administrative

 

11,813

 

 

13,673

 

 

34,255

 

 

38,377

 

Depreciation, amortization and accretion

 

2,305

 

 

2,785

 

 

6,999

 

 

8,168

 

Total operating expenses

 

42,145

 

 

44,036

 

 

124,310

 

 

129,539

 

% of total revenue

 

106.8

%

 

103.7

%

 

103.0

%

 

102.6

%

Operating loss

 

(2,692

)

 

(1,560

)

 

(3,569

)

 

(3,321

)

% of total revenue

 

(6.8

)%

 

(3.7

)%

 

(3.0

)%

 

(2.6

)%

Interest income

 

399

 

 

384

 

 

1,300

 

 

1,009

 

Other income (expense)

 

163

 

 

(110

)

 

528

 

 

(56

)

Loss before income taxes

 

(2,130

)

 

(1,286

)

 

(1,741

)

 

(2,368

)

Benefit from income taxes

 

804

 

 

446

 

 

486

 

 

701

 

Net loss

 

$

(1,326

)

 

$

(840

)

 

$

(1,255

)

 

$

(1,667

)

Basic and diluted net loss income per common share

 

$

(0.07

)

 

$

(0.04

)

 

$

(0.07

)

 

$

(0.09

)

Basic weighted average common shares outstanding

 

19,086,811

 

 

19,456,149

 

 

19,166,812

 

 

19,742,869

 

Diluted weighted average common shares outstanding

 

19,086,811

 

 

19,456,149

 

 

19,166,812

 

 

19,742,869

 

Cash dividends declared per common share

 

0.125

 

 

0.125

 

 

0.375

 

 

0.375

 

Key statistics:

 

 

 

 

 

 

 

 

Units in service

 

955

 

 

999

 

 

955

 

 

999

 

Average revenue per unit (ARPU)

 

$

7.32

 

 

$

7.40

 

 

$

7.33

 

 

$

7.44

 

Bookings

 

$

20,421

 

 

$

21,580

 

 

$

56,410

 

 

$

58,192

 

Backlog

 

$

42,604

 

 

$

36,366

 

 

$

42,604

 

 

$

36,366

 

 

 

 

 

 

 

 

 

 

(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

 

 

9/30/2019

 

6/30/2019

 

3/31/2019

 

12/31/2018

 

9/30/2018

 

6/30/2018

 

3/31/2018

 

12/31/2017

Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Wireless

 

$

21,814

 

 

$

22,127

 

 

$

22,610

 

 

$

23,091

 

 

$

23,259

 

 

$

23,658

 

 

$

24,269

 

 

$

24,579

 

Software

 

17,639

 

 

17,398

 

 

19,154

 

 

20,165

 

 

19,217

 

 

16,970

 

 

18,845

 

 

19,191

 

Total revenue

 

39,453

 

 

39,525

 

 

41,764

 

 

43,256

 

 

42,476

 

 

40,628

 

 

43,114

 

 

43,770

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenue (b)

 

7,190

 

 

7,239

 

 

7,592

 

 

8,772

 

 

8,141

 

 

7,596

 

 

7,878

 

 

7,122

 

Research and development

 

7,437

 

 

6,807

 

 

6,167

 

 

6,618

 

 

5,934

 

 

6,177

 

 

5,735

 

 

4,934

 

Technology operations

 

7,805

 

 

7,866

 

 

7,674

 

 

8,120

 

 

7,787

 

 

7,698

 

 

7,750

 

 

7,617

 

Selling and marketing

 

5,595

 

 

5,574

 

 

6,110

 

 

6,275

 

 

5,716

 

 

6,093

 

 

6,490

 

 

6,039

 

General and administrative

 

11,813

 

 

11,696

 

 

10,747

 

 

10,721

 

 

13,673

 

 

12,741

 

 

11,964

 

 

11,695

 

Depreciation, amortization and accretion

 

2,305

 

 

2,335

 

 

2,359

 

 

2,601

 

 

2,785

 

 

2,669

 

 

2,713

 

 

2,774

 

Total operating expenses

 

42,145

 

 

41,517

 

 

40,649

 

 

43,107

 

 

44,036

 

 

42,974

 

 

42,530

 

 

40,181

 

% of total revenue

 

106.8

%

 

105.0

%

 

97.3

%

 

99.7

%

 

103.7

%

 

105.8

%

 

98.6

%

 

91.8

%

Operating (loss) income

 

(2,692

)

 

(1,992

)

 

1,115

 

 

149

 

 

(1,560

)

 

(2,346

)

 

584

 

 

3,589

 

% of total revenue

 

(6.8

)%

 

(5.0

)%

 

2.7

%

 

0.3

%

 

(3.7

)%

 

(5.8

)%

 

1.4

%

 

8.2

%

Interest income

 

399

 

 

452

 

 

449

 

 

628

 

 

384

 

 

342

 

 

283

 

 

229

 

Other income (expense)

 

163

 

 

602

 

 

(236

)

 

(593

)

 

(110

)

 

102

 

 

(47

)

 

(282

)

Loss (income) before income taxes

 

(2,130

)

 

(938

)

 

1,328

 

 

184

 

 

(1,286

)

 

(1,902

)

 

820

 

 

3,536

 

Benefit from (provision for) income taxes

 

804

 

 

268

 

 

(586

)

 

5

 

 

446

 

 

730

 

 

(475

)

 

(24,920

)

Net (loss) income

 

$

(1,326

)

 

$

(670

)

 

$

742

 

 

$

189

 

 

$

(840

)

 

$

(1,172

)

 

$

345

 

 

$

(21,384

)

Basic and diluted net (loss) income per common share

 

$

(0.07

)

 

$

(0.03

)

 

$

0.04

 

 

$

0.01

 

 

$

(0.04

)

 

$

(0.06

)

 

$

0.02

 

 

$

(1.07

)

Basic weighted average common shares outstanding

 

19,086,811

 

 

19,217,866

 

 

19,196,970

 

 

19,445,401

 

 

19,456,149

 

 

19,750,941

 

 

20,027,800

 

 

19,987,763

 

Diluted weighted average common shares outstanding

 

19,086,811

 

 

19,217,866

 

 

19,356,712

 

 

19,445,401

 

 

19,456,149

 

 

19,750,941

 

 

20,153,291

 

 

19,987,763

 

Key statistics:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Units in service

 

955

 

 

977

 

 

982

 

 

992

 

 

999

 

 

1,024

 

 

1,030

 

 

1,049

 

Average revenue per unit (ARPU)

 

$

7.32

 

 

$

7.26

 

 

$

7.32

 

 

$

7.36

 

 

$

7.40

 

 

$

7.41

 

 

$

7.47

 

 

$

7.46

 

Bookings

 

$

20,421

 

 

$

21,334

 

 

$

14,654

 

 

$

23,076

 

 

$

21,580

 

 

$

18,488

 

 

$

18,124

 

 

$

19,190

 

Backlog

 

$

42,604

 

 

$

39,718

 

 

$

37,392

 

 

$

40,422

 

 

$

36,366

 

 

$

36,295

 

 

$

35,930

 

 

$

42,305

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(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)

 

 

 

 

 

 

 

9/30/2019

 

12/31/2018

 

 

Unaudited

 

 

Assets

 

 

 

 

Current assets:

 

 

 

 

Cash and cash equivalents

 

$

49,319

 

 

$

83,343

 

Short term investments

 

29,870

 

 

3,963

 

Accounts receivable, net

 

31,071

 

 

32,386

 

Prepaid expenses and other

 

9,975

 

 

9,578

 

Inventory

 

995

 

 

1,708

 

Total current assets

 

121,230

 

 

130,978

 

Non-current assets:

 

 

 

 

Property and equipment, net

 

9,603

 

 

10,354

 

Operating Lease right-of-use assets

 

16,345

 

 

 

Goodwill

 

133,031

 

 

133,031

 

Intangible assets, net

 

3,542

 

 

5,417

 

Deferred income tax assets

 

46,961

 

 

46,484

 

Other non-current assets

 

1,319

 

 

1,448

 

Total non-current assets

 

210,801

 

 

196,734

 

Total assets

 

$

332,031

 

 

$

327,712

 

Liabilities and stockholders’ equity

 

 

 

 

Current liabilities:

 

 

 

 

Accounts payable

 

$

3,605

 

 

$

2,010

 

Accrued compensation and benefits

 

11,465

 

 

11,348

 

Accrued taxes

 

1,605

 

 

1,822

 

Deferred revenue

 

27,668

 

 

26,106

 

Operating lease liabilities

 

5,303

 

 

 

Other current liabilities

 

2,531

 

 

3,662

 

Total current liabilities

 

52,177

 

 

44,948

 

Non-current liabilities:

 

 

 

 

Asset Retirement obligations

 

6,756

 

 

6,513

 

Operating lease liabilities

 

11,658

 

 

 

Other long-term liabilities

 

643

 

 

1,697

 

Total non-current liabilities

 

19,057

 

 

8,210

 

Total liabilities

 

71,234

 

 

53,158

 

Commitments and contingencies

 

 

 

 

Stockholders’ equity:

 

 

 

 

Preferred stock

 

$

 

 

$

 

Common stock

 

2

 

 

2

 

Additional paid-in capital

 

85,614

 

 

90,559

 

Accumulated other comprehensive loss

 

(1,499

)

 

(1,301

)

Retained earnings

 

176,680

 

 

185,294

 

Total stockholders’ equity

 

260,797

 

 

274,554

 

Total liabilities and stockholders’ equity

 

$

332,031

 

 

$

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 nine months ended

 

 

9/30/2019

 

9/30/2018

Cash flows provided by operating activities:

 

 

 

 

Net loss

 

$

(1,255

)

 

$

(1,667

)

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

 

 

 

 

Depreciation, amortization and accretion

 

6,999

 

 

8,168

 

Deferred income tax expense

 

(569

)

 

(1,000

)

Stock based compensation

 

2,521

 

 

3,922

 

Provisions for doubtful accounts, service credits and other

 

652

 

 

1,631

 

Adjustments of non-cash transaction taxes

 

 

 

(156

)

Changes in assets and liabilities:

 

 

 

 

Accounts receivable

 

252

 

 

(2,534

)

Prepaid expenses, inventory and other assets

 

2,131

 

 

(1,160

)

Accounts payable, accrued liabilities and other

 

(1,366

)

 

(346

)

Deferred revenue

 

1,383

 

 

4,998

 

Net cash provided by operating activities

 

10,748

 

 

11,856

 

Cash flows from investing activities:

 

 

 

 

Purchases of property and equipment

 

(4,162

)

 

(5,094

)

Purchase of short-term investments

 

(44,499

)

 

(3,911

)

Maturities of short-term investments

 

19,000

 

 

4,000

 

Net cash used in investing activities

 

(29,661

)

 

(5,005

)

Cash flows from financing activities:

 

 

 

 

Cash distributions to stockholders

 

(7,440

)

 

(7,631

)

Purchase of common stock (including commissions)

 

(6,575

)

 

(10,026

)

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

 

119

 

 

143

 

Purchase of common stock (including commissions)

 

(6,575

)

 

(10,026

)

Net cash used in financing activities

 

(14,913

)

 

(18,492

)

Effect of exchange rate on cash

 

(198

)

 

(965

)

Net decrease in cash and cash equivalents

 

(34,024

)

 

(12,606

)

Cash and cash equivalents, beginning of period

 

83,343

 

 

103,179

 

Cash and cash equivalents, end of period

 

$

49,319

 

 

$

90,573

 

Supplemental disclosure:

 

 

 

 

Income taxes paid

 

$

927

 

 

$

726

 

 

 

 

 

 

(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

 

 

9/30/2019

 

6/30/2019

 

3/31/2019

 

12/31/2018

 

9/30/2018

 

6/30/2018

 

3/31/2018

 

12/31/2017

Revenue

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Paging

 

$

21,212

 

 

$

21,342

 

 

$

21,687

 

 

$

21,997

 

 

$

22,442

 

 

$

22,824

 

 

$

23,308

 

 

$

23,624

 

Non-paging

 

602

 

 

785

 

 

923

 

 

1,094

 

 

817

 

 

834

 

 

961

 

 

955

 

Total wireless revenue

 

$

21,814

 

 

$

22,127

 

 

$

22,610

 

 

$

23,091

 

 

$

23,259

 

 

$

23,658

 

 

$

24,269

 

 

$

24,579

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

License

 

2,723

 

 

1,676

 

 

2,840

 

 

3,496

 

 

3,175

 

 

1,993

 

 

4,376

 

 

2,990

 

Services

 

4,202

 

 

4,835

 

 

5,206

 

 

5,103

 

 

4,555

 

 

4,363

 

 

4,071

 

 

5,437

 

Equipment

 

689

 

 

842

 

 

963

 

 

1,568

 

 

1,296

 

 

1,107

 

 

1,024

 

 

945

 

Operations revenue

 

$

7,614

 

 

$

7,353

 

 

$

9,009

 

 

$

10,167

 

 

$

9,026

 

 

$

7,463

 

 

$

9,471

 

 

$

9,372

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Maintenance revenue

 

$

10,025

 

 

$

10,045

 

 

$

10,145

 

 

$

9,998

 

 

$

10,191

 

 

$

9,507

 

 

$

9,374

 

 

$

9,819

 

Total software revenue

 

$

17,639

 

 

$

17,398

 

 

$

19,154

 

 

$

20,165

 

 

$

19,217

 

 

$

16,970

 

 

$

18,845

 

 

$

19,191

 

 

 

 

 

 

 

 

 

Total revenue

 

$

39,453

 

 

$

39,525

 

 

$

41,764

 

 

$

43,256

 

 

$

42,476

 

 

$

40,628

 

 

$

43,114

 

 

$

43,770

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(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

 

 

9/30/2019

 

6/30/2019

 

3/31/2019

 

12/31/2018

 

9/30/2018

 

6/30/2018

 

3/31/2018

 

12/31/2017

Cost of revenue

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Payroll and related

 

$

5,099

 

 

$

4,749

 

 

$

4,931

 

 

$

4,868

 

 

$

4,923

 

 

$

4,853

 

 

$

4,874

 

 

$

4,374

 

Cost of sales

 

1,567

 

 

1,900

 

 

2,080

 

 

3,349

 

 

2,623

 

 

2,119

 

 

2,475

 

 

1,990

 

Stock based compensation

 

21

 

 

97

 

 

107

 

 

44

 

 

75

 

 

75

 

 

55

 

 

58

 

Other

 

503

 

 

493

 

 

474

 

 

511

 

 

520

 

 

549

 

 

474

 

 

700

 

Total cost of revenue (b)

 

7,190

 

 

7,239

 

 

7,592

 

 

8,772

 

 

8,141

 

 

7,596

 

 

7,878

 

 

7,122

 

Research and development

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Payroll and related

 

5,083

 

 

4,639

 

 

4,263

 

 

4,350

 

 

4,709

 

 

4,506

 

 

4,002

 

 

3,521

 

Outside services

 

2,027

 

 

1,912

 

 

1,745

 

 

2,115

 

 

1,040

 

 

1,481

 

 

1,513

 

 

1,361

 

Stock based compensation

 

102

 

 

84

 

 

11

 

 

5

 

 

71

 

 

90

 

 

71

 

 

(71

)

Other

 

225

 

 

172

 

 

148

 

 

148

 

 

114

 

 

100

 

 

149

 

 

123

 

Total research and development

 

7,437

 

 

6,807

 

 

6,167

 

 

6,618

 

 

5,934

 

 

6,177

 

 

5,735

 

 

4,934

 

Technology operations

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Payroll and related

 

2,823

 

 

2,662

 

 

2,647

 

 

2,616

 

 

2,866

 

 

2,618

 

 

2,693

 

 

2,413

 

Site rent

 

3,269

 

 

3,480

 

 

3,296

 

 

3,432

 

 

3,482

 

 

3,538

 

 

3,496

 

 

3,471

 

Telecommunications

 

1,016

 

 

1,019

 

 

996

 

 

1,021

 

 

950

 

 

935

 

 

898

 

 

979

 

Stock based compensation

 

30

 

 

30

 

 

30

 

 

24

 

 

24

 

 

24

 

 

24

 

 

20

 

Other

 

667

 

 

675

 

 

705

 

 

1,027

 

 

465

 

 

583

 

 

639

 

 

734

 

Total technology operations

 

7,805

 

 

7,866

 

 

7,674

 

 

8,120

 

 

7,787

 

 

7,698

 

 

7,750

 

 

7,617

 

Selling and marketing

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Payroll and related

 

3,524

 

 

3,329

 

 

3,273

 

 

3,047

 

 

3,401

 

 

3,311

 

 

3,294

 

 

2,573

 

Commissions

 

1,114

 

 

1,298

 

 

1,424

 

 

1,759

 

 

1,225

 

 

1,397

 

 

1,774

 

 

1,634

 

Stock based compensation

 

137

 

 

128

 

 

161

 

 

99

 

 

135

 

 

135

 

 

135

 

 

93

 

Advertising and events

 

703

 

 

656

 

 

933

 

 

1,236

 

 

857

 

 

996

 

 

1,158

 

 

1,481

 

Other

 

117

 

 

163

 

 

319

 

 

134

 

 

98

 

 

254

 

 

129

 

 

258

 

Total selling and marketing

 

5,595

 

 

5,574

 

 

6,110

 

 

6,275

 

 

5,716

 

 

6,093

 

 

6,490

 

 

6,039

 

General and administrative

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Payroll and related

 

4,220

 

 

4,136

 

 

4,041

 

 

4,087

 

 

4,834

 

 

4,340

 

 

4,416

 

 

3,649

 

Stock based compensation

 

674

 

 

690

 

 

219

 

 

860

 

 

1,118

 

 

943

 

 

949

 

 

774

 

Bad debt

 

402

 

 

(96

)

 

308

 

 

303

 

 

513

 

 

279

 

 

528

 

 

143

 

Facility rent, office, and technology costs

 

2,369

 

 

2,485

 

 

2,294

 

 

1,573

 

 

2,426

 

 

1,824

 

 

2,144

 

 

1,865

 

Outside services

 

2,004

 

 

2,306

 

 

1,776

 

 

2,561

 

 

2,363

 

 

2,942

 

 

1,919

 

 

2,924

 

Taxes, licenses and permits

 

888

 

 

863

 

 

921

 

 

111

 

 

1,081

 

 

1,024

 

 

1,080

 

 

1,120

 

Other

 

1,256

 

 

1,312

 

 

1,188

 

 

1,226

 

 

1,338

 

 

1,389

 

 

928

 

 

1,220

 

Total general and administrative

 

11,813

 

 

11,696

 

 

10,747

 

 

10,721

 

 

13,673

 

 

12,741

 

 

11,964

 

 

11,695

 

Depreciation, amortization and accretion

 

2,305

 

 

2,335

 

 

2,359

 

 

2,601

 

 

2,785

 

 

2,669

 

 

2,713

 

 

2,774

 

Operating expenses

 

$

42,145

 

 

$

41,517

 

 

$

40,649

 

 

$

43,107

 

 

$

44,036

 

 

$

42,974

 

 

$

42,530

 

 

$

40,181

 

Capital expenditures

 

$

1,378

 

 

$

1,495

 

 

$

1,287

 

 

$

830

 

 

$

1,630

 

 

$

2,299

 

 

$

1,164

 

 

$

2,179

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(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.

Contacts
Al Galgano
952-567-0295
[email protected]
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