Spok Reports 2020 Fourth Quarter and Full Year Operating Results

February 17, 2021 4:10 PM EST

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Improved Software Revenue Levels, Continued Strong Wireless Trends, and Expense Management Contribute to Operating Performance

Board Declares Regular Quarterly Dividend

SPRINGFIELD, Va.--(BUSINESS WIRE)-- Spok Holdings, Inc. (NASDAQ: SPOK), a global leader in healthcare communications, today announced operating results for the fourth quarter ended December 31, 2020. In addition, the Company’s Board of Directors declared a regular quarterly dividend of $0.125 per share, payable on March 30, 2021, to stockholders of record on March 16, 2021.

Key Fourth Quarter and Full Year Operating Highlights:

  • Fourth quarter 2020 software revenue of $17.2 million included $9.9 million of maintenance revenue and $7.3 million of operations revenue. This compares to third quarter software revenue of $16.9 million, which included $9.5 million of maintenance revenue and $7.4 million of operations revenue.
  • Software bookings in the fourth quarter totaled $16.5 million, compared to $21.4 million in the prior quarter and $21.9 million in the fourth quarter of 2019. Fourth quarter bookings included Spok Go® deals with an aggregate total contract value of $255,000. Fourth quarter software bookings included $7.2 million of operations bookings and $9.3 million of maintenance renewals. At December 31, 2020, the software revenue backlog totaled $50.5 million, compared to the backlog of $50.6 million at December 31, 2019.
  • The quarterly rate of paging unit erosion was 1.4% in the fourth quarter of 2020, down from paging unit erosion of 1.9% in the prior quarter. Gross disconnects were down on both a sequential and year-over-year basis.
  • The rate of wireless revenue erosion in the fourth quarter was 2.5%, compared to a revenue erosion rate of 1.2% in the prior quarter. For the full year 2020, the wireless revenue erosion rate was 5.2%, down 130 basis points from the revenue erosion rate of 6.5% in 2019.
  • Total paging ARPU (average revenue per unit) in 2020 totaled $7.30, down slightly from ARPU of $7.34 in 2019.
  • Operating expenses in 2020 totaled $170.8 million, down from $176.1 million in 2019. Adjusted operating expenses (which excludes goodwill impairment, depreciation, amortization and accretion charges, and includes capitalized software development costs) totaled $148.0 million in 2020, down more than 6% from adjusted operating expenses of $158.0 million in 2019.
  • Capital expenses were $3.5 million in 2020, compared to $4.8 million 2019.
  • The number of full-time equivalent employees at December 31, 2020 totaled 602, compared to 638 at December 31, 2019.
  • Capital paid to stockholders in 2020 aggregated $9.8 million. This came in the form of the Company's regular quarterly dividend.
  • The Company’s cash, cash equivalents and short-term investments balance at December 31, 2020, was $78.7 million, up from $77.3 million at December 31, 2019.

2020 Fourth Quarter and Full Year Results:

Consolidated revenue for the fourth quarter of 2020 under Generally Accepted Accounting Principles (“GAAP”) was $37.5 million compared to $39.5 million in the fourth quarter of 2019. For the year ended December 31, 2020, consolidated revenue totaled $148.2 million, compared to $160.3 million in the prior year.

 

For the three months ended

For the year ended

(Dollars in thousands)

December 31,
2020

December 31,
2019

Change
(%)

December 31,
2020

December 31,
2019

Change
(%)

Wireless revenue

 

 

 

 

 

 

Paging revenue

$

19,513

 

$

20,826

 

(6.3

)

%

$

79,916

 

$

85,067

 

(6.1

)

%

Product and other revenue

787

 

789

 

(0.3

)

%

3,677

 

3,100

 

18.6

 

%

Total wireless revenue

$

20,300

 

$

21,615

 

(6.1

)

%

$

83,593

 

$

88,167

 

(5.2

)

%

 

 

 

 

 

 

 

Software revenue

 

 

 

 

 

 

Operations revenue

$

7,268

 

$

7,783

 

(6.6

)

%

$

25,996

 

$

31,757

 

(18.1

)

%

Maintenance revenue

9,913

 

10,150

 

(2.3

)

%

38,591

 

40,365

 

(4.4

)

%

Total software revenue

17,181

 

17,933

 

(4.2

)

%

64,587

 

72,122

 

(10.4

)

%

Total revenue

$

37,481

 

$

39,548

 

(5.2

)

%

$

148,180

 

$

160,289

 

(7.6

)

%

 

GAAP net loss for the fourth quarter of 2020 was $46.6 million, or a loss of $2.44 per basic share, compared to a net loss of $9.5 million, or a loss of $0.50 per basic share, in the fourth quarter of 2019. Based on the Company's annual assessment of goodwill, largely driven by the Company's stock price in October when the assessment was completed, the 2020 fourth quarter net loss included a non-cash goodwill impairment charge of $25.0 million, which increased the fourth quarter net loss per basic share by $1.31. Additionally, in the fourth quarter, the Company completed a review to assess the recoverability of its deferred income tax assets, which represent tax benefits of future tax deductions. Based on uncertainty created by COVID-19 to project future profitability and growth and the cumulative loss incurred by the Company over the three-year period ended December 31, 2020, Spok recorded a $22.1 million valuation allowance to reduce net deferred income tax assets, which increased the fourth quarter net loss per basic share by $1.16.

GAAP net loss for the for the year ended December 31, 2020, was $44.2 million, or a loss of $2.32 per basic share, compared to a net loss of $10.8 million, or a loss of $0.56 per basic share, in the prior year. As discussed above, the 2020 full year net loss included a non-cash goodwill impairment charge of $25.0 million, which increased the full year net loss per basic share by $1.31, and the valuation allowance for the recoverability of the Company's deferred income tax assets, which increased the full year net loss per basic share by an additional $1.16. The Company remains confident in the ultimate market demand for Spok Go despite the non-cash goodwill impairment charge and the valuation allowance on the recoverability of the Company's deferred income tax assets.

In the fourth quarter of 2020, the Company generated $1.4 million of adjusted EBITDA compared to no adjusted EBITDA in the fourth quarter of 2019. For the year ended December 31, 2020, the Company generated $5.7 million of adjusted EBITDA, compared to $5.9 million in the prior year.

 

 

For the three months ended

 

For the year ended

(Dollars in thousands)

December 31,
2020

 

December 31,
2019

 

December 31,
2020

 

December 31,
2019

Net loss

$

(46,610

)

 

 

$

(9,511

)

 

 

$

(44,225

)

 

 

$

(10,765

)

 

Basic and diluted net loss per common share

$

(2.44

)

 

 

$

(0.50

)

 

 

$

(2.32

)

 

 

$

(0.56

)

 

Adjusted EBITDA

$

1,362

 

 

 

$

(19

)

 

 

$

5,654

 

 

 

$

5,932

 

 

 

Management Commentary:

“In most respects, 2020 was the most challenging year in our history from both a management and operational perspective,” said Vincent D. Kelly, president and chief executive officer. “However, in the face of a 100-year global pandemic our team was able to accomplish a lot. Though the spread of the virus impeded the many customer meetings we had set up early in the year to introduce Spok Go, our new cloud-native platform, our team was able to stay focused, delivering five new customer relationships for our new platform in the second half of the year, while building the pipeline into 2021. In the fourth quarter we added three of these Spok Go wins; two with existing customers and one new customer joining the Spok family. We also made significant progress in clinical innovation partner development, while adding hundreds of new features to our platform. And that progress continues into 2021. We continue to believe Spok Go is set to meet significant need in the healthcare marketplace and will create significant value for our shareholders in the coming years. Once again Spok Customers received Top rankings from U.S. News & World report’s annual honor roll. In August Spok solutions achieved SOC 2 Type II Compliance. In September our team completed our tenth annual survey on the State of Healthcare Communications. In October we hosted our very well attended user conference, Connect, highlighting the importance of care team communication amidst COVID-19. And in November for the fourth consecutive year Spok was rated as the #1 Secure Healthcare Communications Platform for the fourth consecutive year by Black Book Research. I am particularly proud of our Spok team and their ability to adapt and change under challenging circumstances. We broke a five-year record on selling console licenses last year and also provided over 360 remote license seats at no charge so our customer’s operators could be reconfigured to work from home. Our team has already begun converting these to paid seats and we expect that to continue throughout 2021. This momentum gives us confidence as we enter the new year and an eventual resolution to the global pandemic. We expect as the year progresses that our business will continue to pick up each quarter, building momentum and ending the year on a very positive footing.

"In the second half of 2020 we saw a more than 22% increase in software bookings from the first half of the year, as well as continued solid trends in our wireless business. Sustained expense management drove a sharp reduction in full year 2020 operating expenses and adjusted operating expenses from the prior year, even after adding back capitalized software development costs. A big part of those expense savings came from the commitment, support and sacrifices of our employees, who along with the entire leadership team including me, accepted furloughs to contribute to our savings goals. Our software revenue backlog continues at record levels, and we generated nearly $5.7 million of adjusted EBITDA in 2020. We were also able to grow our cash, cash equivalents and short-term investments balance from the prior year-end level, even after capital expenditures and paying our quarterly dividend. We are focused on driving positive free cash flow for 2021, and Spok remains committed to paying our regular quarterly dividend. We believe we will be able to achieve this while continuing to support our Spok Care Connect® platform, and in the near term, investing in innovation and the evolution of our cloud-native and integrated communication platform, Spok Go.

"Finally, continuing our promise to add clinical talent to our team in order to support our customers and facilitate our transition, in late November we announced the appointment of our new Chief Product Officer, Kristen Lalowski. Kristen brings over 20 years of experience in healthcare and healthcare IT, specifically in the areas of nursing, product management and marketing, operations, sales and client services. We believe that Spok provides a critical function that has become even more important in this environment, and the addition of leaders like Kristen to our management team is key to our success. Spok's clinical communications platform provides hospitals with a system of action, delivering reliable communications and clinical information, including clinical test results, to care teams when and where it matters most to improve patient outcomes. We are proud to be leaders in this mission," concluded Kelly.

Business Outlook:

Michael W. Wallace, chief operating officer and chief financial officer, said, “Expense management and strong financial discipline have always been critical in aligning our expense levels with anticipated near- and long-term demand for our products, and that was especially the case throughout 2020. During the year, operating expenses were down nearly 3% and adjusted operating expenses were down more than 6% from prior year levels, with improvements in all expense categories over that period. Spok’s balance sheet remains strong, as the cash, cash equivalents and short-term investment balance grew to $78.7 million at December 31, 2020.”

Regarding financial guidance for 2021, Wallace said that the Company expects total revenue to range from $132.2 million to $147.2 million. Included in that total, Spok expects software revenue to comprise $58.2 million to $67.2 million. Also, the Company expects adjusted operating expenses to range from $142.7 million to $150.7 million, and capital expenses to range from $2.7 million to $6.7 million.

2020 Fourth Quarter and Full Year Call and Replay:

Spok plans to host a conference call for investors to discuss its 2020 fourth quarter and full year results at 10:00 a.m. ET on Thursday, February 18, 2021. Dial-in numbers for the call are 1 929-477-0577 or 866-248-8441. The confirmation code for the call is 6764724. A replay of the call will be available from 1:00 p.m. ET on February 18, 2021 until 1:00 p.m. ET on Thursday, March 4, 2021. To listen to the replay, please register at http://tinyurl.com/Spok2020Q4earningsreplay. Please cut and paste this address into your browser, 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 Go® and Spok Care Connect® platforms to enhance workflows for clinicians and support administrative compliance. Our customers send over 100 million messages each month through their Spok® solutions. When seconds count and patients' lives are at stake, Spok enables smarter, faster clinical communication. For more information, visit spok.com or follow @spoktweets on Twitter.

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

Non-GAAP Financial Measures

This press release contains the following non-GAAP financial measures: adjusted operating expenses and adjusted EBITDA. Adjusted operating expenses excludes depreciation, amortization and accretion, goodwill impairment and capitalized software development costs. Adjusted EBITDA represents net income/(loss) before interest income/expense, income tax expense/benefit, depreciation, amortization and accretion expense, goodwill impairment, stock based compensation expense, and capitalized software development costs.

We believe that these non-GAAP financial measures provide useful information to management and investors regarding certain financial and business trends relating to Spok's financial condition and results of operations. We use these non-GAAP measures for financial, operational and budgetary decision-making purposes, to understand and evaluate our core operating performance and trends, and to generate future operating plans. We believe that these non-GAAP financial measures permit us to more thoroughly analyze key financial metrics used to make operational decisions and allow us to assess our core operating results. We believe that the use of these non-GAAP financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing our financial measures with other software companies who present similar non-GAAP financial measures. We adjust for certain items because we do not regard these costs as reflective of normal costs related to the ongoing operation of the business in the ordinary course. In general, these items possess one or more of the following characteristics; non-cash expenses, factors outside of our control, items that are non-operational in nature, and unusual items not expected to occur in the normal course of business.

We do not consider these non-GAAP measures in isolation or as an alternative to financial measures determined in accordance with GAAP. The principal of these non-GAAP financial measures is that they exclude significant expenses and income that are required by GAAP to be recorded in the Company's financial statements. In addition, they are subject to inherent limitations as they reflect the exercise of judgment by management about which expenses and income are excluded or included in determining these non-GAAP financial measures. In order to compensate for these limitations, management presents non-GAAP financial measures in connection with GAAP results. We urge investors to review the reconciliation of our non-GAAP financial measures to the comparable GAAP financial measures, which are included in this press release, and not to rely on any single financial measure to evaluate our business.

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, risks related to the COVID-19 pandemic and its effect on our business and the economy, other economic conditions such as recessionary economic cycles, higher interest rates, inflation and higher levels of unemployment, our ability to effectively develop, introduce and deploy our integrated communications platform and collaboration platform, Spok Go, declining demand for paging products and services, continued demand for our software products and services, our dependence on the U.S. healthcare industry, 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, our ability to realize the benefits associated with our deferred tax assets, and future impairments of our long-lived assets, amortizable intangible assets and goodwill, 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 year ended

 

 

12/31/2020

 

12/31/2019

 

12/31/2020

 

12/31/2019

Revenue:

 

 

 

 

 

 

 

 

Wireless

 

$

20,300

 

 

 

$

21,615

 

 

 

$

83,593

 

 

 

$

88,167

 

 

Software

 

17,180

 

 

 

17,933

 

 

 

64,587

 

 

 

72,122

 

 

Total revenue

 

37,480

 

 

 

39,548

 

 

 

148,180

 

 

 

160,289

 

 

Operating expenses:

 

 

 

 

 

 

 

 

Cost of revenue

 

7,833

 

 

 

8,051

 

 

 

28,542

 

 

 

30,072

 

 

Research and development

 

4,166

 

 

 

7,132

 

 

 

15,828

 

 

 

27,543

 

 

Technology operations

 

7,371

 

 

 

8,083

 

 

 

29,843

 

 

 

31,428

 

 

Selling and marketing

 

5,004

 

 

 

5,891

 

 

 

19,467

 

 

 

23,170

 

 

General and administrative

 

10,046

 

 

 

11,531

 

 

 

43,102

 

 

 

45,787

 

 

Depreciation, amortization and accretion

 

2,503

 

 

 

2,250

 

 

 

9,056

 

 

 

9,249

 

 

Goodwill impairment

 

25,007

 

 

 

8,849

 

 

 

25,007

 

 

 

8,849

 

 

Total operating expenses

 

61,930

 

 

 

51,787

 

 

 

170,845

 

 

 

176,098

 

 

% of total revenue

 

165.2

 

%

 

130.9

 

%

 

115.3

 

%

 

109.9

 

%

Operating loss

 

(24,450

)

 

 

(12,239

)

 

 

(22,665

)

 

 

(15,809

)

 

% of total revenue

 

(65.2

)

%

 

(30.9

)

%

 

(15.3

)

%

 

(9.9

)

%

Interest income

 

51

 

 

 

350

 

 

 

687

 

 

 

1,651

 

 

Other income

 

95

 

 

 

206

 

 

 

208

 

 

 

735

 

 

Loss before income taxes

 

(24,304

)

 

 

(11,683

)

 

 

(21,770

)

 

 

(13,423

)

 

(Provision for) benefit from income taxes

 

(22,306

)

 

 

2,172

 

 

 

(22,455

)

 

 

2,658

 

 

Net loss

 

$

(46,610

)

 

 

$

(9,511

)

 

 

$

(44,225

)

 

 

$

(10,765

)

 

Basic and diluted net loss per common share

 

$

(2.44

)

 

 

$

(0.50

)

 

 

$

(2.32

)

 

 

$

(0.56

)

 

Basic and diluted weighted average common shares outstanding

 

19,088,329

 

 

 

18,860,020

 

 

 

19,028,918

 

 

 

19,089,402

 

 

Cash dividends declared per common share

 

0.125

 

 

 

0.125

 

 

 

0.50

 

 

 

0.50

 

 

Key statistics:

 

 

 

 

 

 

 

 

Units in service

 

885

 

 

 

938

 

 

 

885

 

 

 

938

 

 

Average revenue per unit (ARPU)

 

$

7.30

 

 

 

$

7.33

 

 

 

$

7.30

 

 

 

$

7.34

 

 

Bookings

 

$

16,528

 

 

 

$

21,932

 

 

 

$

68,994

 

 

 

$

78,341

 

 

Backlog

 

$

50,504

 

 

 

$

50,553

 

 

 

$

50,504

 

 

 

$

50,553

 

 

 

 

 

 

 

 

 

 

 

(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

 

 

12/31/2020

 

9/30/2020

 

6/30/2020

 

3/31/2020

 

12/31/2019

 

9/30/2019

 

6/30/2019

 

3/31/2019

Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Wireless

 

$

20,300

 

 

 

$

20,828

 

 

$

21,078

 

 

$

21,386

 

 

 

$

21,615

 

 

 

$

21,814

 

 

 

$

22,127

 

 

 

$

22,610

 

 

Software

 

17,180

 

 

 

16,865

 

 

14,661

 

 

15,881

 

 

 

17,933

 

 

 

17,639

 

 

 

17,398

 

 

 

19,154

 

 

Total revenue

 

37,480

 

 

 

37,693

 

 

35,739

 

 

37,267

 

 

 

39,548

 

 

 

39,453

 

 

 

39,525

 

 

 

41,764

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenue

 

7,833

 

 

 

6,544

 

 

5,901

 

 

8,264

 

 

 

8,051

 

 

 

7,190

 

 

 

7,239

 

 

 

7,592

 

 

Research and development

 

4,166

 

 

 

3,459

 

 

2,754

 

 

5,449

 

 

 

7,132

 

 

 

7,437

 

 

 

6,807

 

 

 

6,167

 

 

Technology operations

 

7,371

 

 

 

7,357

 

 

7,212

 

 

7,904

 

 

 

8,083

 

 

 

7,805

 

 

 

7,866

 

 

 

7,674

 

 

Selling and marketing

 

5,004

 

 

 

4,272

 

 

3,831

 

 

6,361

 

 

 

5,891

 

 

 

5,595

 

 

 

5,574

 

 

 

6,110

 

 

General and administrative

 

10,046

 

 

 

10,994

 

 

10,810

 

 

11,251

 

 

 

11,531

 

 

 

11,813

 

 

 

11,696

 

 

 

10,747

 

 

Depreciation, amortization and accretion

 

2,503

 

 

 

2,335

 

 

2,072

 

 

2,146

 

 

 

2,250

 

 

 

2,305

 

 

 

2,335

 

 

 

2,359

 

 

Goodwill impairment

 

25,007

 

 

 

 

 

 

 

 

 

 

8,849

 

 

 

 

 

 

 

 

 

 

 

Total operating expenses

 

61,930

 

 

 

34,961

 

 

32,580

 

 

41,375

 

 

 

51,787

 

 

 

42,145

 

 

 

41,517

 

 

 

40,649

 

 

% of total revenue

 

165.2

 

%

 

92.8

%

 

91.2

%

 

111.0

 

%

 

130.9

 

%

 

106.8

 

%

 

105.0

 

%

 

97.3

 

%

Operating (loss) income

 

(24,450

)

 

 

2,732

 

 

3,159

 

 

(4,108

)

 

 

(12,239

)

 

 

(2,692

)

 

 

(1,992

)

 

 

1,115

 

 

% of total revenue

 

(65.2

)

%

 

7.2

%

 

8.8

%

 

(11.0

)

%

 

(30.9

)

%

 

(6.8

)

%

 

(5.0

)

%

 

2.7

 

%

Interest income

 

51

 

 

 

127

 

 

146

 

 

363

 

 

 

350

 

 

 

399

 

 

 

452

 

 

 

449

 

 

Other income (expense)

 

95

 

 

 

151

 

 

101

 

 

(137

)

 

 

206

 

 

 

163

 

 

 

602

 

 

 

(236

)

 

(Loss) income before income taxes

 

(24,304

)

 

 

3,010

 

 

3,406

 

 

(3,882

)

 

 

(11,683

)

 

 

(2,130

)

 

 

(938

)

 

 

1,328

 

 

(Provision for) benefit from income taxes

 

(22,306

)

 

 

155

 

 

353

 

 

(657

)

 

 

2,172

 

 

 

804

 

 

 

268

 

 

 

(586

)

 

Net (loss) income

 

$

(46,610

)

 

 

$

3,165

 

 

$

3,759

 

 

$

(4,539

)

 

 

$

(9,511

)

 

 

$

(1,326

)

 

 

$

(670

)

 

 

$

742

 

 

Basic net (loss) income per common share

 

$

(2.44

)

 

 

$

0.17

 

 

$

0.20

 

 

$

(0.24

)

 

 

$

(0.50

)

 

 

$

(0.07

)

 

 

$

(0.03

)

 

 

$

0.04

 

 

Diluted net (loss) income per common share

 

(2.44

)

 

 

0.16

 

 

0.20

 

 

(0.24

)

 

 

(0.50

)

 

 

(0.07

)

 

 

(0.03

)

 

 

0.04

 

 

Basic weighted average common shares outstanding

 

19,088,329

 

 

 

19,051,502

 

 

19,016,853

 

 

18,958,716

 

 

 

18,860,020

 

 

 

19,086,811

 

 

 

19,217,866

 

 

 

19,196,970

 

 

Diluted weighted average common shares outstanding

 

19,088,329

 

 

 

19,208,452

 

 

19,115,148

 

 

18,958,716

 

 

 

18,860,020

 

 

 

19,086,811

 

 

 

19,217,866

 

 

 

19,356,712

 

 

Key statistics:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Units in service

 

885

 

 

 

898

 

 

915

 

 

926

 

 

 

938

 

 

 

955

 

 

 

977

 

 

 

982

 

 

Average revenue per unit (ARPU)

 

$

7.30

 

 

 

$

7.34

 

 

$

7.24

 

 

$

7.31

 

 

 

$

7.33

 

 

 

$

7.32

 

 

 

$

7.26

 

 

 

$

7.32

 

 

Bookings

 

$

16,528

 

 

 

$

21,414

 

 

$

15,411

 

 

$

15,639

 

 

 

$

21,932

 

 

 

$

20,421

 

 

 

$

21,334

 

 

 

$

14,654

 

 

Backlog

 

$

50,504

 

 

 

$

51,708

 

 

$

48,441

 

 

$

49,052

 

 

 

$

50,553

 

 

 

$

42,604

 

 

 

$

39,718

 

 

 

$

37,392

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

SPOK HOLDINGS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS (a)

(In thousands)

 

 

 

 

 

 

 

12/31/2020

 

12/31/2019

ASSETS

 

 

 

 

Current assets:

 

 

 

 

Cash and cash equivalents

 

$

48,729

 

 

 

$

47,361

 

 

Short term investments

 

29,995

 

 

 

29,899

 

 

Accounts receivable, net

 

29,934

 

 

 

30,174

 

 

Prepaid expenses

 

8,958

 

 

 

7,517

 

 

Other current assets

 

1,269

 

 

 

2,714

 

 

Total current assets

 

118,885

 

 

 

117,665

 

 

Non-current assets:

 

 

 

 

Property and equipment, net

 

7,815

 

 

 

8,000

 

 

Operating lease right-of-use assets

 

14,016

 

 

 

16,317

 

 

Capitalized software development, net

 

10,179

 

 

 

 

 

Goodwill

 

99,175

 

 

 

124,182

 

 

Intangible assets, net

 

417

 

 

 

2,917

 

 

Deferred income tax assets, net

 

25,826

 

 

 

48,983

 

 

Other non-current assets

 

978

 

 

 

1,808

 

 

Total non-current assets

 

158,406

 

 

 

202,207

 

 

Total assets

 

$

277,291

 

 

 

$

319,872

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

Current liabilities:

 

 

 

 

Accounts payable

 

$

6,685

 

 

 

$

3,615

 

 

Accrued compensation and benefits

 

14,103

 

 

 

11,680

 

 

Deferred revenue

 

27,686

 

 

 

25,944

 

 

Operating lease liabilities

 

5,264

 

 

 

5,437

 

 

Other current liabilities

 

3,702

 

 

 

4,507

 

 

Total current liabilities

 

57,440

 

 

 

51,183

 

 

Non-current liabilities:

 

 

 

 

Asset retirement obligations

 

7,289

 

 

 

6,061

 

 

Operating lease liabilities

 

9,456

 

 

 

11,575

 

 

Other non-current liabilities

 

2,493

 

 

 

959

 

 

Total non-current liabilities

 

19,238

 

 

 

18,595

 

 

Total liabilities

 

76,678

 

 

 

69,778

 

 

Commitments and contingencies

 

 

 

 

Stockholders' equity:

 

 

 

 

Preferred stock

 

$

 

 

 

$

 

 

Common stock

 

2

 

 

 

2

 

 

Additional paid-in capital

 

91,780

 

 

 

86,874

 

 

Accumulated other comprehensive loss

 

(1,452

)

 

 

(1,601

)

 

Retained earnings

 

110,283

 

 

 

164,819

 

 

Total stockholders' equity

 

200,613

 

 

 

250,094

 

 

Total liabilities and stockholders' equity

 

$

277,291

 

 

 

$

319,872

 

 

 

 

 

 

 

(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 year ended

 

 

12/31/2020

 

12/31/2019

Operating activities:

 

 

 

 

Net loss

 

$

(44,225

)

 

 

$

(10,765

)

 

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

 

 

 

 

Depreciation, amortization and accretion

 

9,056

 

 

 

9,249

 

 

Goodwill impairment

 

25,007

 

 

 

8,849

 

 

Valuation allowance

 

22,108

 

 

 

 

 

Deferred income tax expense (benefit)

 

438

 

 

 

(3,253

)

 

Stock based compensation

 

5,508

 

 

 

3,643

 

 

Provisions for doubtful accounts, service credits, and other

 

1,212

 

 

 

694

 

 

Changes in assets and liabilities:

 

 

 

 

Accounts receivable

 

(1,588

)

 

 

964

 

 

Prepaid expenses, inventory and other assets

 

1,445

 

 

 

2,913

 

 

Accounts payable, accrued liabilities and other liabilities

 

4,027

 

 

 

(643

)

 

Deferred revenue

 

3,175

 

 

 

42

 

 

Net cash provided by operating activities

 

26,163

 

 

 

11,693

 

 

Investing activities:

 

 

 

 

Purchases of property and equipment

 

(3,455

)

 

 

(4,837

)

 

Capitalized software development

 

(11,252

)

 

 

 

 

Purchase of short-term investments

 

(59,864

)

 

 

(59,385

)

 

Maturity of short-term investments

 

60,000

 

 

 

34,000

 

 

Net cash used in investing activities

 

(14,571

)

 

 

(30,222

)

 

Financing activities:

 

 

 

 

Cash distributions to stockholders

 

(9,771

)

 

 

(9,819

)

 

Purchase of common stock (including commissions)

 

 

 

 

(6,575

)

 

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

 

301

 

 

 

258

 

 

Purchase of common stock for tax withholding on vested equity awards

 

(903

)

 

 

(1,017

)

 

Net cash used in financing activities

 

(10,373

)

 

 

(17,153

)

 

Effect of exchange rate on cash

 

149

 

 

 

(300

)

 

Net increase (decrease) in cash and cash equivalents

 

1,368

 

 

 

(35,982

)

 

Cash and cash equivalents, beginning of period

 

47,361

 

 

 

83,343

 

 

Cash and cash equivalents, end of period

 

$

48,729

 

 

 

$

47,361

 

 

 

Supplemental disclosure:

 

 

 

 

Income taxes paid

 

$

1

 

 

 

$

901

 

 

 

 

 

 

 

(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

 

 

12/31/2020

 

9/30/2020

 

6/30/2020

 

3/31/2020

 

12/31/2019

 

9/30/2019

 

6/30/2019

 

3/31/2019

Revenue

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Paging

 

$

19,513

 

 

$

19,961

 

 

$

19,990

 

 

$

20,451

 

 

$

20,826

 

 

$

21,212

 

 

$

21,342

 

 

$

21,687

 

Non-paging

 

$

787

 

 

$

867

 

 

$

1,088

 

 

$

935

 

 

$

789

 

 

$

602

 

 

$

785

 

 

$

923

 

Total wireless revenue

 

$

20,300

 

 

$

20,828

 

 

$

21,078

 

 

$

21,386

 

 

$

21,615

 

 

$

21,814

 

 

$

22,127

 

 

$

22,610

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

License

 

$

1,486

 

 

$

1,988

 

 

$

749

 

 

$

955

 

 

$

1,711

 

 

$

2,723

 

 

$

1,676

 

 

$

2,840

 

Services

 

$

4,778

 

 

$

4,772

 

 

$

3,812

 

 

$

4,549

 

 

$

4,947

 

 

$

4,202

 

 

$

4,835

 

 

$

5,206

 

Equipment

 

$

961

 

 

$

554

 

 

$

601

 

 

$

725

 

 

$

1,125

 

 

$

689

 

 

$

842

 

 

$

963

 

Subscription

 

$

42

 

 

$

24

 

 

$

 

 

$

 

 

$

 

 

$

 

 

$

 

 

$

 

Operations revenue

 

$

7,267

 

 

$

7,338

 

 

$

5,162

 

 

$

6,229

 

 

$

7,783

 

 

$

7,614

 

 

$

7,353

 

 

$

9,009

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Maintenance revenue

 

$

9,913

 

 

$

9,527

 

 

$

9,499

 

 

$

9,652

 

 

$

10,150

 

 

$

10,025

 

 

$

10,045

 

 

$

10,145

 

Total software revenue

 

$

17,180

 

 

$

16,865

 

 

$

14,661

 

 

$

15,881

 

 

$

17,933

 

 

$

17,639

 

 

$

17,398

 

 

$

19,154

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total revenue

 

$

37,480

 

 

$

37,693

 

 

$

35,739

 

 

$

37,267

 

 

$

39,548

 

 

$

39,453

 

 

$

39,525

 

 

$

41,764

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(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

 

 

12/31/2020

 

9/30/2020

 

6/30/2020

 

3/31/2020

 

12/31/2019

 

9/30/2019

 

6/30/2019

 

3/31/2019

Cost of revenue

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Payroll and related

 

$

5,447

 

 

 

$

4,941

 

 

 

$

4,350

 

 

 

$

5,785

 

 

 

$

5,222

 

 

$

5,099

 

 

$

4,749

 

 

 

$

4,931

 

Cost of sales

 

1,740

 

 

 

1,064

 

 

 

1,098

 

 

 

1,940

 

 

 

2,278

 

 

1,567

 

 

1,900

 

 

 

2,080

 

Stock-based compensation

 

136

 

 

 

148

 

 

 

134

 

 

 

119

 

 

 

42

 

 

21

 

 

97

 

 

 

107

 

Other

 

510

 

 

 

391

 

 

 

319

 

 

 

420

 

 

 

509

 

 

503

 

 

493

 

 

 

474

 

Total cost of revenue

 

7,833

 

 

 

6,544

 

 

 

5,901

 

 

 

8,264

 

 

 

8,051

 

 

7,190

 

 

7,239

 

 

 

7,592

 

Research and development

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Payroll and related

 

4,358

 

 

 

4,147

 

 

 

4,115

 

 

 

4,761

 

 

 

5,056

 

 

5,083

 

 

4,639

 

 

 

4,263

 

Outside services

 

2,358

 

 

 

2,113

 

 

 

1,803

 

 

 

1,584

 

 

 

1,742

 

 

2,027

 

 

1,912

 

 

 

1,745

 

Capitalized software development

 

(3,046

)

 

 

(2,906

)

 

 

(3,596

)

 

 

(1,705

)

 

 

 

 

 

 

 

 

 

 

Stock-based compensation

 

246

 

 

 

240

 

 

 

243

 

 

 

236

 

 

 

113

 

 

102

 

 

84

 

 

 

11

 

Other

 

250

 

 

 

(135

)

 

 

189

 

 

 

573

 

 

 

221

 

 

225

 

 

172

 

 

 

148

 

Total research and development

 

4,166

 

 

 

3,459

 

 

 

2,754

 

 

 

5,449

 

 

 

7,132

 

 

7,437

 

 

6,807

 

 

 

6,167

 

Technology operations

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Payroll and related

 

2,467

 

 

 

2,246

 

 

 

2,213

 

 

 

2,712

 

 

 

2,656

 

 

2,823

 

 

2,662

 

 

 

2,647

 

Site rent

 

3,313

 

 

 

3,467

 

 

 

3,399

 

 

 

3,398

 

 

 

3,669

 

 

3,269

 

 

3,480

 

 

 

3,296

 

Telecommunications

 

857

 

 

 

949

 

 

 

961

 

 

 

1,001

 

 

 

1,026

 

 

1,016

 

 

1,019

 

 

 

996

 

Stock-based compensation

 

48

 

 

 

52

 

 

 

47

 

 

 

43

 

 

 

32

 

 

30

 

 

30

 

 

 

30

 

Other

 

686

 

 

 

643

 

 

 

592

 

 

 

750

 

 

 

700

 

 

667

 

 

675

 

 

 

705

 

Total technology operations

 

7,371

 

 

 

7,357

 

 

 

7,212

 

 

 

7,904

 

 

 

8,083

 

 

7,805

 

 

7,866

 

 

 

7,674

 

Selling and marketing

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Payroll and related

 

2,912

 

 

 

2,773

 

 

 

2,538

 

 

 

3,583

 

 

 

3,382

 

 

3,524

 

 

3,329

 

 

 

3,273

 

Commissions

 

1,178

 

 

 

1,059

 

 

 

852

 

 

 

1,212

 

 

 

1,158

 

 

1,114

 

 

1,298

 

 

 

1,424

 

Stock-based compensation

 

192

 

 

 

208

 

 

 

194

 

 

 

172

 

 

 

164

 

 

137

 

 

128

 

 

 

161

 

Advertising and events

 

539

 

 

 

151

 

 

 

160

 

 

 

784

 

 

 

1,034

 

 

703

 

 

656

 

 

 

933

 

Other

 

183

 

 

 

81

 

 

 

87

 

 

 

610

 

 

 

153

 

 

117

 

 

163

 

 

 

319

 

Total selling and marketing

 

5,004

 

 

 

4,272

 

 

 

3,831

 

 

 

6,361

 

 

 

5,891

 

 

5,595

 

 

5,574

 

 

 

6,110

 

General and administrative

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Payroll and related

 

3,373

 

 

 

3,476

 

 

 

3,355

 

 

 

4,134

 

 

 

3,974

 

 

4,220

 

 

4,136

 

 

 

4,041

 

Stock-based compensation

 

726

 

 

 

968

 

 

 

744

 

 

 

612

 

 

 

770

 

 

674

 

 

690

 

 

 

219

 

Facility rent, office, and technology costs

 

2,412

 

 

 

178

 

 

 

628

 

 

 

43

 

 

 

56

 

 

402

 

 

(96

)

 

 

308

 

Outside services

 

1,584

 

 

 

2,259

 

 

 

2,276

 

 

 

2,068

 

 

 

1,952

 

 

2,369

 

 

2,485

 

 

 

2,294

 

Taxes, licenses and permits

 

484

 

 

 

2,148

 

 

 

2,043

 

 

 

2,036

 

 

 

2,350

 

 

2,004

 

 

2,306

 

 

 

1,776

 

Bad debt

 

202

 

 

 

994

 

 

 

804

 

 

 

859

 

 

 

1,000

 

 

888

 

 

863

 

 

 

921

 

Other

 

1,265

 

 

 

971

 

 

 

960

 

 

 

1,499

 

 

 

1,429

 

 

1,256

 

 

1,312

 

 

 

1,188

 

Total general and administrative

 

10,046

 

 

 

10,994

 

 

 

10,810

 

 

 

11,251

 

 

 

11,531

 

 

11,813

 

 

11,696

 

 

 

10,747

 

Depreciation, amortization and accretion

 

2,503

 

 

 

2,335

 

 

 

2,072

 

 

 

2,146

 

 

 

2,250

 

 

2,305

 

 

2,335

 

 

 

2,359

 

Goodwill impairment

 

25,007

 

 

 

 

 

 

 

 

 

 

 

 

8,849

 

 

 

 

 

 

 

 

Operating expenses

 

$

61,930

 

 

 

$

34,961

 

 

 

$

32,580

 

 

 

$

41,375

 

 

 

$

51,787

 

 

$

42,145

 

 

$

41,517

 

 

 

$

40,649

 

Capital expenditures

 

$

638

 

 

 

$

934

 

 

 

$

846

 

 

 

$

1,063

 

 

 

$

679

 

 

$

1,378

 

 

$

1,495

 

 

 

$

1,287

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

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

 

 

12/31/2020

 

9/30/2020

 

6/30/2020

 

3/31/2020

 

12/31/2019

 

9/30/2019

 

6/30/2019

 

3/31/2019

Paging units in service

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Beginning units in service (000's)

 

898

 

 

 

915

 

 

 

926

 

 

 

938

 

 

 

955

 

 

 

977

 

 

 

982

 

 

 

992

 

 

Gross placements

 

20

 

 

 

25

 

 

 

35

 

 

 

24

 

 

 

22

 

 

 

28

 

 

 

35

 

 

 

27

 

 

Gross disconnects

 

(33

)

 

 

(42

)

 

 

(46

)

 

 

(36

)

 

 

(39

)

 

 

(50

)

 

 

(40

)

 

 

(37

)

 

Net change

 

(13

)

 

 

(17

)

 

 

(11

)

 

 

(12

)

 

 

(17

)

 

 

(22

)

 

 

(5

)

 

 

(10

)

 

Ending units in service

 

885

 

 

 

898

 

 

 

915

 

 

 

926

 

 

 

938

 

 

 

955

 

 

 

977

 

 

 

982

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Healthcare

 

83.6

 

%

 

83.7

 

%

 

83.6

 

%

 

82.6

 

%

 

82.4

 

%

 

81.7

 

%

 

81.7

 

%

 

81.6

 

%

Government

 

5.3

 

%

 

5.3

 

%

 

5.5

 

%

 

5.4

 

%

 

5.4

 

%

 

5.5

 

%

 

5.6

 

%

 

5.8

 

%

Large enterprise

 

4.3

 

%

 

4.3

 

%

 

4.4

 

%

 

5.5

 

%

 

5.5

 

%

 

6.1

 

%

 

5.9

 

%

 

5.9

 

%

Other (b)

 

6.8

 

%

 

6.6

 

%

 

6.6

 

%

 

6.5

 

%

 

6.6

 

%

 

6.7

 

%

 

6.8

 

%

 

6.7

 

%

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

 

61

 

 

 

63

 

 

 

65

 

 

 

67

 

 

 

69

 

 

 

72

 

 

 

74

 

 

 

77

 

 

101 to 1,000 units

 

167

 

 

 

167

 

 

 

165

 

 

 

171

 

 

 

173

 

 

 

175

 

 

 

179

 

 

 

186

 

 

>1,000 units

 

657

 

 

 

668

 

 

 

685

 

 

 

688

 

 

 

696

 

 

 

708

 

 

 

724

 

 

 

719

 

 

Total

 

885

 

 

 

898

 

 

 

915

 

 

 

926

 

 

 

938

 

 

 

955

 

 

 

977

 

 

 

982

 

 

Account size net loss rate (c)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1 to 100 units

 

(3.2

)

%

 

(2.9

)

%

 

(3.1

)

%

 

(3.0

)

%

 

(3.8

)

%

 

(2.1

)

%

 

(3.2

)

%

 

(2.3

)

%

101 to 1,000 units

 

 

%

 

1.5

 

%

 

(4.2

)

%

 

(1.0

)

%

 

(1.0

)

%

 

(2.4

)

%

 

(3.9

)

%

 

(2.3

)

%

>1,000 units

 

(1.6

)

%

 

(2.5

)

%

 

(0.4

)

%

 

(1.2

)

%

 

(1.8

)

%

 

(2.2

)

%

 

0.7

 

%

 

(1.1

)

%

Total

 

(1.4

)

%

 

(1.9

)

%

 

(1.3

)

%

 

(1.3

)

%

 

(1.8

)

%

 

(2.2

)

%

 

(0.5

)

%

 

(1.1

)

%

Account size ARPU

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1 to 100 units

 

$

11.62

 

 

 

$

11.80

 

 

 

$

11.65

 

 

 

$

12.01

 

 

 

$

11.99

 

 

 

$

11.84

 

 

 

$

12.00

 

 

 

$

11.90

 

 

101 to 1,000 units

 

8.35

 

 

 

8.37

 

 

 

8.24

 

 

 

8.34

 

 

 

8.31

 

 

 

8.41

 

 

 

8.47

 

 

 

8.35

 

 

>1,000 units

 

6.62

 

 

 

6.67

 

 

 

6.57

 

 

 

6.59

 

 

 

6.62

 

 

 

6.59

 

 

 

6.47

 

 

 

6.57

 

 

Total

 

$

7.30

 

 

 

$

7.34

 

 

 

$

7.24

 

 

 

$

7.31

 

 

 

$

7.33

 

 

 

$

7.32

 

 

 

$

7.26

 

 

 

$

7.32

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(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 OF NET (LOSS) INCOME TO EBITDA (a)

(Unaudited and in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the three months ended

 

 

12/31/2020

 

9/30/2020

 

6/30/2020

 

3/31/2020

 

12/31/2019

 

9/30/2019

 

6/30/2019

 

3/31/2019

Reconciliation of net (loss) income to EBITDA:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net (loss) income

 

$

(46,610

)

 

 

$

3,165

 

 

 

$

3,759

 

 

 

$

(4,539

)

 

 

$

(9,511

)

 

 

$

(1,326

)

 

 

$

(670

)

 

 

$

742

 

 

Add back:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Benefit from) provision for income taxes

 

22,306

 

 

 

(155

)

 

 

(353

)

 

 

657

 

 

 

(2,172

)

 

 

(804

)

 

 

(268

)

 

 

586

 

 

Other expenses (income)

 

(95

)

 

 

(151

)

 

 

(101

)

 

 

137

 

 

 

(206

)

 

 

(163

)

 

 

(602

)

 

 

236

 

 

Interest (income) expenses

 

(51

)

 

 

(127

)

 

 

(146

)

 

 

(363

)

 

 

(350

)

 

 

(399

)

 

 

(452

)

 

 

(449

)

 

Operating (loss) income

 

(24,450

)

 

 

2,732

 

 

 

3,159

 

 

 

(4,108

)

 

 

(12,239

)

 

 

(2,692

)

 

 

(1,992

)

 

 

1,115

 

 

Depreciation, amortization and accretion

 

2,503

 

 

 

2,335

 

 

 

2,072

 

 

 

2,146

 

 

 

2,250

 

 

 

2,305

 

 

 

2,335

 

 

 

2,359

 

 

EBITDA

 

$

(21,947

)

 

 

$

5,067

 

 

 

$

5,231

 

 

 

$

(1,962

)

 

 

$

(9,989

)

 

 

$

(387

)

 

 

$

343

 

 

 

$

3,474

 

 

Capitalized software development costs

 

(3,046

)

 

 

(2,906

)

 

 

(3,596

)

 

 

(1,705

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation

 

1,348

 

 

 

1,616

 

 

 

1,362

 

 

 

1,182

 

 

 

1,121

 

 

 

964

 

 

 

1,029

 

 

 

528

 

 

Goodwill impairment

 

25,007

 

 

 

 

 

 

 

 

 

 

 

 

8,849

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA

 

$

1,362

 

 

 

$

3,777

 

 

 

$

2,997

 

 

 

$

(2,485

)

 

 

$

(19

)

 

 

$

577

 

 

 

$

1,372

 

 

 

$

4,002

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the year ended

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation of net loss to EBITDA:

 

12/31/2020

 

12/31/2019

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

$

(44,225

)

 

 

$

(10,765

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Add back:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Provision for (benefit from) income taxes

 

22,455

 

 

 

(2,658

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income

 

(208

)

 

 

(735

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

(687

)

 

 

(1,651

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating loss

 

(22,665

)

 

 

(15,809

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation, amortization and accretion

 

9,056

 

 

 

9,249

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EBITDA

 

$

(13,609

)

 

 

$

(6,560

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Capitalized software development costs

 

(11,252

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation

 

5,508

 

 

 

3,643

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Goodwill impairment

 

25,007

 

 

 

8,849

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA

 

$

5,654

 

 

 

$

5,932

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

SPOK HOLDINGS, INC.

RECONCILIATION OF OPERATING EXPENSES TO ADJUSTED OPERATING EXPENSES (a)

(Unaudited and in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the three months ended

 

 

12/31/2020

 

9/30/2020

 

6/30/2020

 

3/31/2020

 

12/31/2019

 

9/30/2019

 

6/30/2019

 

3/31/2019

(Dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses

 

$

61,930

 

 

 

$

34,961

 

 

 

$

32,580

 

 

 

$

41,375

 

 

 

$

51,787

 

 

 

$

42,145

 

 

 

$

41,517

 

 

 

$

40,649

 

 

Add back:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation, amortization and accretion

 

(2,503

)

 

 

(2,335

)

 

 

(2,072

)

 

 

(2,146

)

 

 

(2,250

)

 

 

(2,305

)

 

 

(2,335

)

 

 

(2,359

)

 

Goodwill impairment

 

(25,007

)

 

 

 

 

 

 

 

 

 

 

 

(8,849

)

 

 

 

 

 

 

 

 

 

 

Capitalized software development costs

 

3,046

 

 

 

2,906

 

 

 

3,596

 

 

 

1,705

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted operating expenses

 

$

37,466

 

 

 

$

35,532

 

 

 

$

34,104

 

 

 

$

40,934

 

 

 

$

40,688

 

 

 

$

39,840

 

 

 

$

39,182

 

 

 

$

38,290

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the year ended

 

 

 

 

 

 

 

 

 

 

 

 

 

 

12/31/2020

 

12/31/2019

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses

 

$

170,845

 

 

 

$

176,098

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Add back:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation, amortization and accretion

 

(9,056

)

 

 

(9,249

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Goodwill impairment

 

(25,007

)

 

 

(8,849

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Capitalized software development costs

 

11,252

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted operating expenses

 

$

148,034

 

 

 

$

158,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

SPOK HOLDINGS, INC.

2021 FINANCIAL GUIDANCE

(Unaudited and in millions)

 

 

 

Guidance Range

 

 

From

 

To

Revenues

 

 

 

 

Wireless

 

$

74.0

 

 

 

$

80.0

 

 

Software

 

58.2

 

 

 

67.2

 

 

Total Revenues

 

$

132.2

 

 

 

$

147.2

 

 

 

 

 

 

 

Adjusted Operating Expenses (a)

 

$

142.7

 

 

 

$

150.7

 

 

 

 

 

 

 

Capital Expenditures

 

$

2.7

 

 

 

$

6.7

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

RECONCILIATION OF OPERATING EXPENSES TO ADJUSTED OPERATING EXPENSES (a)

(Unaudited and in millions)

 

 

 

 

 

 

 

Guidance Range

 

 

From

 

To

Operating expenses

 

$

141.4

 

 

 

$

149.4

 

 

Add back:

 

 

 

 

Depreciation, amortization and accretion

 

(10.2

)

 

 

(10.2

)

 

Goodwill impairment

 

 

 

 

 

 

Capitalized software development costs

 

11.5

 

 

 

11.5

 

 

Adjusted operating expenses

 

$

142.7

 

 

 

$

150.7

 

 

 

 

 

 

 

(a) Adjusted operating expenses exclude depreciation, amortization and accretion, goodwill impairment and capitalized software development costs.

 

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

Source: Spok Holdings, Inc.



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