SPOK
$9.66
Spok Holdings
Earnings Details
Quarter September 2021
Wednesday, November 3, 2021 4:10:00 PM
Tweet Share Watch
Summary

Spok Holdings (SPOK) Recent Earnings

Spok Holdings (SPOK) reported a Quarter September 2021 loss of $0.13 per share on revenue of $35.9 million.. Revenue fell 4.9% compared to the same quarter a year ago.

Results
Reported Earnings
($0.13)
Earnings Whisper
-
Consensus Estimate
Reported Revenue
$35.9 Mil
Revenue Estimate
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

Spok Reports 2021 Third Quarter Results

Company affirms its financial outlook for full year 2021

ALEXANDRIA, Va.--(BUSINESS WIRE)--Spok Holdings, Inc. (NASDAQ: SPOK), a global leader in healthcare communications, today announced results for the third quarter ended September 30, 2021. In addition, the Company’s Board of Directors declared a regular quarterly dividend of $0.125 per share, payable on December 10, 2021, to stockholders of record on November 16, 2021.

Third Quarter 2021 Highlights:

  • Received record-level software maintenance renewal bookings of $12.1 million
  • Continued improvement in year-over-year pager unit erosion on a trailing twelve-month basis
  • Added further development enhancements to the Spok Go®platform
  • Introduced the ReadyCall® Text pager
  • For nine consecutive years, has partnered with all of the adult Best Hospitals, and in eight of the past nine years, provided solutions to all of the children’s Best Hospitals named to U.S. News & World Report’s 2021-22 Best Hospitals Honor Roll
  • Completed Eleventh Annual State of Healthcare Communications Survey
  • Subsequent to the end of the third quarter 2021, hosted annual Connect 21 Conference for customers in a virtual format

Management Commentary:

“We welcomed four new customers to the Spok family during the quarter of which three were software and one was wireless," said Vincent D. Kelly, president and chief executive officer. “Additionally, we successfully closed 12 six-figure deals from our pipeline. Software bookings were driven by strength in maintenance renewals, supporting our strong recurring revenue base. We added an additional Spok Go win during the quarter and remain encouraged by the size and quality of our pipeline, with the signing of three more Spok Go deals so far in the fourth quarter. We had continued improvement in year-over-year pager unit erosion on a trailing twelve-month basis, and software revenue was up in the third quarter of 2021 compared to the second quarter of 2021.

“During the third quarter 2021, we made several key product announcements, such as the newest version of Spok Go and the ReadyCall® Text pager to improve the patient experience. We also received recognition as a solutions provider to all 20 adult hospitals named to U.S. News & World Report’s 2021-22 Best Hospitals Honor Roll and conducted our eleventh annual survey on the state of healthcare communications to more thoroughly understand the unique challenges facing clinicians, particularly in the current environment. Finally, subsequent to the end of the third quarter 2021, the Company held its annual Connect 21 Conference for customers on October 11-12, 2021, in a virtual format, which was well received by both current and prospective customers. Tim Tindle, Spok’s Chief Information Officer, led a session on implementing a secure HIPAA-compliant messaging solution, using our new GenA™ pager, resulting in several new leads and orders. The success of the conference should create additional opportunities for 2022 and beyond," concluded Kelly.

2021 Third Quarter and Year-to-Date Results:

Consolidated revenue for the third quarter of 2021 under Generally Accepted Accounting Principles (“GAAP”) was $35.9 million, compared to $37.7 million in the third quarter of 2020. For the first nine months of 2021, consolidated revenue totaled $107.6 million, compared to $110.7 million in the prior year period.

 

For the Three Months Ended
September 30,

 

For the Nine Months Ended
September 30,

(Dollars in thousands)

2021

 

2020

 

Change (%)

 

2021

 

2020

 

Change (%)

Wireless revenue

 

 

 

 

 

 

 

 

 

 

 

Paging revenue

$

18,844

 

 

$

19,961

 

 

(5.6)

%

 

$

57,332

 

 

$

60,403

 

 

(5.1)

%

Product and other revenue

800

 

 

867

 

 

(7.7)

%

 

2,291

 

 

2,890

 

 

(20.7)

%

Total wireless revenue

$

19,644

 

 

$

20,828

 

 

(5.7)

%

 

$

59,623

 

 

$

63,293

 

 

(5.8)

%

 

 

 

 

 

 

 

 

 

 

 

 

Software revenue

 

 

 

 

 

 

 

 

 

 

 

License

$

1,674

 

 

$

1,988

 

 

(15.8)

%

 

$

3,999

 

 

$

3,692

 

 

8.3

%

Services

$

4,159

 

 

$

4,772

 

 

(12.8)

%

 

$

13,378

 

 

$

13,132

 

 

1.9

%

Equipment

$

596

 

 

$

554

 

 

7.6

%

 

$

1,694

 

 

$

1,880

 

 

(9.9)

%

Subscription

$

133

 

 

$

24

 

 

454.2

%

 

$

268

 

 

$

24

 

 

1,016.7

%

Maintenance

9,645

 

 

9,527

 

 

1.2

%

 

28,648

 

 

28,678

 

 

(0.1)

%

Total software revenue

16,207

 

 

16,865

 

 

(3.9)

%

 

47,987

 

 

47,406

 

 

1.2

%

Total revenue

$

35,851

 

 

$

37,693

 

 

(4.9)

%

 

$

107,610

 

 

$

110,699

 

 

(2.8)

%

Operating expenses in the third quarter of 2021 totaled $39.4 million and included approximately $0.9 million of costs related to the Company's previously announced strategic alternatives review process and $2.0 million in additional payroll and related costs as the Company-wide plan that reduced work schedules was terminated at the end of the second quarter of 2021. Adjusted operating expenses (which excludes depreciation, amortization and accretion charges, and includes capitalized software development costs) totaled $39.5 million in the third quarter of 2021, driven by the items noted above.

GAAP net loss for the third quarter of 2021 was $2.5 million, or a loss of $0.13 per diluted share, compared to net income of $3.2 million, or $0.16 per diluted share, in the third quarter of 2020. GAAP net loss for the first nine months of 2021 was $5.5 million, or a loss of $0.28 per diluted share, compared to net income of $2.4 million, or $0.12 per diluted share, in the prior year period.

In the third quarter of 2021, adjusted EBITDA loss totaled $1.6 million compared to adjusted EBITDA of $3.8 million in the third quarter of 2020. In the first nine months of 2021, adjusted EBITDA loss totaled $1.4 million, compared to adjusted EBITDA of $4.3 million in the prior year period.

 

For the Three Months Ended
September 30,

 

For the Nine Months Ended
September 30,

(Dollars in thousands)

2021

 

2020

 

Change (%)

 

2021

 

2020

 

Change (%)

Net (loss) income

$

(2,494)

 

 

$

3,165

 

 

178.8

%

 

$

(5,510)

 

 

$

2,384

 

 

331.1

%

Basic net (loss) income per common share

$

(0.13)

 

 

$

0.17

 

 

176.5

%

 

$

(0.28)

 

 

$

0.13

 

 

315.4

%

Diluted net income (loss) per share

$

(0.13)

 

 

$

0.16

 

 

181.3

%

 

$

(0.28)

 

 

$

0.12

 

 

333.3

%

Adjusted EBITDA

$

(1,594)

 

 

$

3,777

 

 

142.2

%

 

$

(1,357)

 

 

$

4,291

 

 

131.6

%

Financial Outlook:

The Company is affirming the financial outlook previously provided for full year 2021 as follows:

(Unaudited and in millions)

 

Current Guidance
Full Year 2021

Revenue

 

 

 

 

Wireless

 

$

77.0

 

to

$

81.0

 

Software

 

$

61.0

 

 

$

70.0

 

Total Revenue

 

$

138.0

 

 

$

151.0

 

 

 

 

 

 

Adjusted Operating Expenses

 

$

151.0

 

 

$

157.0

 

 

 

 

 

 

Capital Expenditures

 

$

3.5

 

 

$

5.5

 

"We are on track to achieve our financial targets for 2021, supported by our performance in the first nine months of the year," said Michael W. Wallace, chief operating officer and chief financial officer. “Spok's balance sheet remains strong, with a cash, cash equivalents and short-term investments balance of $67.5 million on September 30, 2021, and no debt.”

2021 Third Quarter Call:

Due to the Company’s strategic alternatives review process, which was announced on September 3, 2021, Spok will not be hosting a conference call to discuss the third quarter 2021 results. The Company will keep all stakeholders apprised of the status of the process as and when it is appropriate.

About Spok

Spok, Inc., a wholly owned subsidiary of Spok Holdings, Inc. (NASDAQ: SPOK), headquartered in Alexandria, 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 and includes capitalized software development costs. Adjusted EBITDA represents net income/(loss) before interest income/expense, income tax expense/benefit, depreciation, amortization and accretion expense and stock-based compensation expense and includes 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, future impairments of our long-lived assets, amortizable intangible assets and goodwill, the effects of our limited-duration shareholder rights plan, and the outcome of Spok’s strategic alternatives review, 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

 

 

9/30/2021

 

9/30/2020

 

9/30/2021

 

9/30/2020

Revenue:

 

 

 

 

 

 

 

 

Wireless

 

$

19,644

 

 

$

20,828

 

 

$

59,623

 

 

$

63,293

 

Software

 

16,207

 

 

16,865

 

 

47,987

 

 

47,406

 

Total revenue

 

35,851

 

 

37,693

 

 

107,610

 

 

110,699

 

Operating expenses:

 

 

 

 

 

 

 

 

Cost of revenue

 

7,520

 

 

6,544

 

 

21,734

 

 

20,709

 

Research and development

 

4,178

 

 

3,459

 

 

12,962

 

 

11,662

 

Technology operations

 

7,439

 

 

7,357

 

 

21,778

 

 

22,472

 

Selling and marketing

 

5,165

 

 

4,272

 

 

15,045

 

 

14,463

 

General and administrative

 

12,538

 

 

10,994

 

 

35,245

 

 

33,056

 

Depreciation, amortization and accretion

 

2,568

 

 

2,335

 

 

7,752

 

 

6,553

 

Total operating expenses

 

39,408

 

 

34,961

 

 

114,516

 

 

108,915

 

% of total revenue

 

109.9

%

 

92.8

%

 

106.4

%

 

98.4

%

Operating (loss) income

 

(3,557)

 

 

2,732

 

 

(6,906)

 

 

1,784

 

% of total revenue

 

(9.9)

%

 

7.2

%

 

(6.4)

%

 

1.6

%

Interest income

 

141

 

 

127

 

 

263

 

 

636

 

Other income

 

10

 

 

151

 

 

13

 

 

113

 

(Loss) income before income taxes

 

(3,406)

 

 

3,010

 

 

(6,630)

 

 

2,533

 

Benefit from (provision for) income taxes

 

912

 

 

155

 

 

1,120

 

 

(149)

 

Net (loss) income

 

$

(2,494)

 

 

$

3,165

 

 

$

(5,510)

 

 

$

2,384

 

Basic net (loss) income per common share

 

$

(0.13)

 

 

$

0.17

 

 

$

(0.28)

 

 

$

0.13

 

Diluted net (loss) income per common share

 

(0.13)

 

 

0.16

 

 

(0.28)

 

 

0.12

 

Basic weighted average common shares outstanding

 

19,464,893

 

 

19,051,502

 

 

19,378,543

 

 

19,008,969

 

Diluted weighted average common shares outstanding

 

19,464,893

 

 

19,208,452

 

 

19,378,543

 

 

19,273,243

 

Cash dividends declared per common share

 

0.125

 

 

0.125

 

 

0.375

 

 

0.375

 

Key statistics:

 

 

 

 

 

 

 

 

Units in service

 

853

 

 

898

 

 

853

 

 

898

 

Average revenue per unit (ARPU)

 

$

7.29

 

 

$

7.34

 

 

$

7.33

 

 

$

7.31

 

Bookings

 

$

17,116

 

 

$

21,414

 

 

$

44,750

 

 

$

52,465

 

Backlog

 

$

45,584

 

 

$

51,708

 

 

$

45,584

 

 

$

51,708

 

 

 

 

 

 

 

 

 

 

(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

 

 

9/30/2021

 

6/30/2021

 

3/31/2021

 

12/31/2020

 

9/30/2020

 

6/30/2020

 

3/31/2020

 

12/31/2019

Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Wireless

 

$

19,644

 

 

$

19,859

 

 

$

20,120

 

 

$

20,300

 

 

$

20,828

 

 

$

21,078

 

 

$

21,386

 

 

$

21,615

 

Software

 

16,207

 

 

15,864

 

 

15,916

 

 

17,180

 

 

16,865

 

 

14,661

 

 

15,881

 

 

17,933

 

Total revenue

 

35,851

 

 

35,723

 

 

36,036

 

 

37,480

 

 

37,693

 

 

35,739

 

 

37,267

 

 

39,548

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenue

 

7,520

 

 

6,973

 

 

7,241

 

 

7,833

 

 

6,544

 

 

5,901

 

 

8,264

 

 

8,051

 

Research and development

 

4,178

 

 

4,278

 

 

4,506

 

 

4,166

 

 

3,459

 

 

2,754

 

 

5,449

 

 

7,132

 

Technology operations

 

7,439

 

 

7,087

 

 

7,252

 

 

7,371

 

 

7,357

 

 

7,212

 

 

7,904

 

 

8,083

 

Selling and marketing

 

5,165

 

 

4,980

 

 

4,900

 

 

5,004

 

 

4,272

 

 

3,831

 

 

6,361

 

 

5,891

 

General and administrative

 

12,538

 

 

11,557

 

 

11,150

 

 

10,046

 

 

10,994

 

 

10,810

 

 

11,251

 

 

11,531

 

Depreciation, amortization and accretion

 

2,568

 

 

2,457

 

 

2,727

 

 

2,503

 

 

2,335

 

 

2,072

 

 

2,146

 

 

2,250

 

Goodwill impairment

 

 

 

 

 

 

 

25,007

 

 

 

 

 

 

 

 

8,849

 

Total operating expenses

 

39,408

 

 

37,332

 

 

37,776

 

 

61,930

 

 

34,961

 

 

32,580

 

 

41,375

 

 

51,787

 

% of total revenue

 

109.9

%

 

104.5

%

 

104.8

%

 

165.2

%

 

92.8

%

 

91.2

%

 

111.0

%

 

130.9

%

Operating (loss) income

 

(3,557)

 

 

(1,609)

 

 

(1,740)

 

 

(24,450)

 

 

2,732

 

 

3,159

 

 

(4,108)

 

 

(12,239)

 

% of total revenue

 

(9.9)

%

 

(4.5)

%

 

(4.8)

%

 

(65.2)

%

 

7.2

%

 

8.8

%

 

(11.0)

%

 

(30.9)

%

Interest income

 

141

 

 

61

 

 

61

 

 

51

 

 

127

 

 

146

 

 

363

 

 

350

 

Other income (expense)

 

10

 

 

29

 

 

(27)

 

 

95

 

 

151

 

 

101

 

 

(137)

 

 

206

 

(Loss) income before income taxes

 

(3,406)

 

 

(1,519)

 

 

(1,706)

 

 

(24,304)

 

 

3,010

 

 

3,406

 

 

(3,882)

 

 

(11,683)

 

Benefit from (provision for) income taxes

 

912

 

 

800

 

 

(591)

 

 

(22,306)

 

 

155

 

 

353

 

 

(657)

 

 

2,172

 

Net (loss) income

 

$

(2,494)

 

 

$

(719)

 

 

$

(2,297)

 

 

$

(46,610)

 

 

$

3,165

 

 

$

3,759

 

 

$

(4,539)

 

 

$

(9,511)

 

Basic net (loss) income per common share

 

$

(0.13)

 

 

$

(0.04)

 

 

$

(0.12)

 

 

$

(2.44)

 

 

$

0.17

 

 

$

0.20

 

 

$

(0.24)

 

 

$

(0.50)

 

Diluted net (loss) income per common share

 

(0.13)

 

 

(0.04)

 

 

(0.12)

 

 

(2.44)

 

 

0.16

 

 

0.20

 

 

(0.24)

 

 

(0.50)

 

Basic weighted average common shares outstanding

 

19,464,893

 

 

19,395,364

 

 

19,272,786

 

 

19,088,329

 

 

19,051,502

 

 

19,016,853

 

 

18,958,716

 

 

18,860,020

 

Diluted weighted average common shares outstanding

 

19,464,893

 

 

19,395,364

 

 

19,272,786

 

 

19,088,329

 

 

19,208,452

 

 

19,115,148

 

 

18,958,716

 

 

18,860,020

 

Key statistics:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Units in service

 

853

 

 

869

 

 

874

 

 

885

 

 

898

 

 

915

 

 

926

 

 

938

 

Average revenue per unit (ARPU)

 

$

7.29

 

 

$

7.32

 

 

$

7.34

 

 

$

7.30

 

 

$

7.34

 

 

$

7.24

 

 

$

7.31

 

 

$

7.33

 

Bookings

 

$

17,116

 

 

$

13,037

 

 

$

14,597

 

 

$

16,528

 

 

$

21,414

 

 

$

15,411

 

 

$

15,639

 

 

$

21,932

 

Backlog

 

$

45,584

 

 

$

45,632

 

 

$

48,849

 

 

$

50,504

 

 

$

51,708

 

 

$

48,441

 

 

$

49,052

 

 

$

50,553

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

SPOK HOLDINGS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS (a)

(In thousands)

 

 

 

 

 

 

 

9/30/2021

 

12/31/2020

 

 

 

 

 

ASSETS

 

(Unaudited)

 

 

 

 

 

 

 

Current assets:

 

 

 

 

Cash and cash equivalents

 

$

37,461

 

 

$

48,729

 

Short term investments

 

29,998

 

 

29,995

 

Accounts receivable, net

 

26,979

 

 

29,934

 

Prepaid expenses

 

9,169

 

 

8,958

 

Other current assets

 

896

 

 

1,269

 

Total current assets

 

104,503

 

 

118,885

 

Non-current assets:

 

 

 

 

Property and equipment, net

 

7,834

 

 

7,815

 

Operating lease right-of-use assets

 

16,113

 

 

14,016

 

Capitalized software development, net

 

14,638

 

 

10,179

 

Goodwill

 

99,175

 

 

99,175

 

Intangible assets, net

 

 

 

417

 

Deferred income tax assets, net

 

26,739

 

 

25,826

 

Other non-current assets

 

750

 

 

978

 

Total non-current assets

 

165,249

 

 

158,406

 

Total assets

 

$

269,752

 

 

$

277,291

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

Accounts payable

 

$

4,521

 

 

$

6,685

 

Accrued compensation and benefits

 

15,190

 

 

14,103

 

Deferred revenue

 

26,767

 

 

27,686

 

Operating lease liabilities

 

5,643

 

 

5,264

 

Other current liabilities

 

5,239

 

 

3,702

 

Total current liabilities

 

57,360

 

 

57,440

 

Non-current liabilities:

 

 

 

 

Asset retirement obligations

 

7,450

 

 

7,289

 

Operating lease liabilities

 

11,951

 

 

9,456

 

Other non-current liabilities

 

1,377

 

 

2,493

 

Total non-current liabilities

 

20,778

 

 

19,238

 

Total liabilities

 

78,138

 

 

76,678

 

Commitments and contingencies

 

 

 

 

Stockholders' equity:

 

 

 

 

Preferred stock

 

$

 

 

$

 

Common stock

 

2

 

 

2

 

Additional paid-in capital

 

96,088

 

 

91,780

 

Accumulated other comprehensive loss

 

(1,598)

 

 

(1,452)

 

Retained earnings

 

97,122

 

 

110,283

 

Total stockholders' equity

 

191,614

 

 

200,613

 

Total liabilities and stockholders' equity

 

$

269,752

 

 

$

277,291

 

 

 

 

 

 

(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

 

9/30/2021

 

9/30/2020

Operating activities:

 

 

 

Net (loss) income

$

(5,510)

 

 

$

2,384

 

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

 

 

 

Depreciation, amortization and accretion

7,752

 

 

6,553

 

Deferred income tax (benefit) expense

(907)

 

 

15

 

Stock-based compensation

6,036

 

 

4,160

 

Provisions for doubtful accounts, service credits and other

765

 

 

914

 

Changes in assets and liabilities:

 

 

 

Accounts receivable

2,165

 

 

(1,019)

 

Prepaid expenses and other assets

202

 

 

1,726

 

Net operating lease liabilities

778

 

 

(50)

 

Accounts payable, accrued liabilities and other

300

 

 

3,591

 

Deferred revenue

(2,053)

 

 

2,680

 

Net cash provided by operating activities

9,528

 

 

20,954

 

Investing activities:

 

 

 

Purchases of property and equipment

(3,103)

 

 

(2,824)

 

Capitalized software development

(8,239)

 

 

(8,206)

 

Purchase of short-term investments

(44,990)

 

 

(44,870)

 

Maturity of short-term investments

45,000

 

 

45,000

 

Net cash used in investing activities

(11,332)

 

 

(10,900)

 

Financing activities:

 

 

 

Cash distributions to stockholders

(7,590)

 

 

(7,388)

 

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

132

 

 

166

 

Purchase of common stock for tax withholding on vested equity awards

(1,860)

 

 

(903)

 

Net cash used in financing activities

(9,318)

 

 

(8,125)

 

Effect of exchange rate on cash and cash equivalents

(146)

 

 

(55)

 

Net (decrease) increase in cash and cash equivalents

(11,268)

 

 

1,874

 

Cash and cash equivalents, beginning of period

48,729

 

 

47,361

 

Cash and cash equivalents, end of period

$

37,461

 

 

$

49,235

 

Supplemental disclosure:

 

 

 

Income taxes (refunds received) paid

$

(165)

 

 

$

148

 

 

 

 

 

(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

 

 

9/30/2021

 

6/30/2021

 

3/31/2021

 

12/31/2020

 

9/30/2020

 

6/30/2020

 

3/31/2020

 

12/31/2019

Revenue

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Paging

 

$

18,844

 

 

$

19,135

 

 

$

19,353

 

 

$

19,513

 

 

$

19,961

 

 

$

19,990

 

 

$

20,451

 

 

$

20,826

 

Non-paging

 

$

800

 

 

$

724

 

 

$

767

 

 

$

787

 

 

$

867

 

 

$

1,088

 

 

$

935

 

 

$

789

 

Total wireless revenue

 

$

19,644

 

 

$

19,859

 

 

$

20,120

 

 

$

20,300

 

 

$

20,828

 

 

$

21,078

 

 

$

21,386

 

 

$

21,615

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

License

 

$

1,674

 

 

$

818

 

 

$

1,507

 

 

$

1,486

 

 

$

1,988

 

 

$

749

 

 

$

955

 

 

$

1,711

 

Services

 

$

4,159

 

 

$

4,865

 

 

$

4,354

 

 

$

4,778

 

 

$

4,772

 

 

$

3,812

 

 

$

4,549

 

 

$

4,947

 

Equipment

 

$

596

 

 

$

482

 

 

$

616

 

 

$

961

 

 

$

554

 

 

$

601

 

 

$

725

 

 

$

1,125

 

Subscription

 

$

133

 

 

$

90

 

 

$

45

 

 

$

42

 

 

$

24

 

 

$

 

 

$

 

 

$

 

Operations revenue

 

$

6,562

 

 

$

6,255

 

 

$

6,522

 

 

$

7,267

 

 

$

7,338

 

 

$

5,162

 

 

$

6,229

 

 

$

7,783

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Maintenance revenue

 

$

9,645

 

 

$

9,609

 

 

$

9,394

 

 

$

9,913

 

 

$

9,527

 

 

$

9,499

 

 

$

9,652

 

 

$

10,150

 

Total software revenue

 

$

16,207

 

 

$

15,864

 

 

$

15,916

 

 

$

17,180

 

 

$

16,865

 

 

$

14,661

 

 

$

15,881

 

 

$

17,933

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total revenue

 

$

35,851

 

 

$

35,723

 

 

$

36,036

 

 

$

37,480

 

 

$

37,693

 

 

$

35,739

 

 

$

37,267

 

 

$

39,548

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(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

 

 

9/30/2021

 

6/30/2021

 

3/31/2021

 

12/31/2020

 

9/30/2020

 

6/30/2020

 

3/31/2020

 

12/31/2019

Cost of revenue

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Payroll and related

 

$

5,435

 

 

$

4,920

 

 

$

5,369

 

 

$

5,447

 

 

$

4,941

 

 

$

4,350

 

 

$

5,785

 

 

$

5,222

 

Cost of sales

 

1,414

 

 

1,427

 

 

1,251

 

 

1,740

 

 

1,064

 

 

1,098

 

 

1,940

 

 

2,278

 

Stock-based compensation

 

250

 

 

285

 

 

322

 

 

136

 

 

148

 

 

134

 

 

119

 

 

42

 

Other

 

421

 

 

341

 

 

299

 

 

510

 

 

391

 

 

319

 

 

420

 

 

509

 

Total cost of revenue

 

7,520

 

 

6,973

 

 

7,241

 

 

7,833

 

 

6,544

 

 

5,901

 

 

8,264

 

 

8,051

 

Research and development

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Payroll and related

 

4,291

 

 

4,333

 

 

4,475

 

 

4,358

 

 

4,147

 

 

4,115

 

 

4,761

 

 

5,056

 

Outside services

 

1,759

 

 

2,060

 

 

2,277

 

 

2,358

 

 

2,113

 

 

1,803

 

 

1,584

 

 

1,742

 

Capitalized software development

 

(2,621)

 

 

(2,698)

 

 

(2,920)

 

 

(3,046)

 

 

(2,906)

 

 

(3,596)

 

 

(1,705)

 

 

 

Stock-based compensation

 

435

 

 

305

 

 

475

 

 

246

 

 

240

 

 

243

 

 

236

 

 

113

 

Other

 

314

 

 

278

 

 

199

 

 

250

 

 

(135)

 

 

189

 

 

573

 

 

221

 

Total research and development

 

4,178

 

 

4,278

 

 

4,506

 

 

4,166

 

 

3,459

 

 

2,754

 

 

5,449

 

 

7,132

 

Technology operations

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Payroll and related

 

2,585

 

 

2,323

 

 

2,467

 

 

2,467

 

 

2,246

 

 

2,213

 

 

2,712

 

 

2,656

 

Site rent

 

3,122

 

 

3,143

 

 

3,196

 

 

3,313

 

 

3,467

 

 

3,399

 

 

3,398

 

 

3,669

 

Telecommunications

 

828

 

 

825

 

 

837

 

 

857

 

 

949

 

 

961

 

 

1,001

 

 

1,026

 

Stock-based compensation

 

139

 

 

131

 

 

137

 

 

48

 

 

52

 

 

47

 

 

43

 

 

32

 

Other

 

765

 

 

665

 

 

615

 

 

686

 

 

643

 

 

592

 

 

750

 

 

700

 

Total technology operations

 

7,439

 

 

7,087

 

 

7,252

 

 

7,371

 

 

7,357

 

 

7,212

 

 

7,904

 

 

8,083

 

Selling and marketing

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Payroll and related

 

3,365

 

 

3,161

 

 

3,135

 

 

2,912

 

 

2,773

 

 

2,538

 

 

3,583

 

 

3,382

 

Commissions

 

924

 

 

1,244

 

 

1,105

 

 

1,178

 

 

1,059

 

 

852

 

 

1,212

 

 

1,158

 

Stock-based compensation

 

234

 

 

254

 

 

319

 

 

192

 

 

208

 

 

194

 

 

172

 

 

164

 

Advertising and events

 

527

 

 

247

 

 

161

 

 

539

 

 

151

 

 

160

 

 

784

 

 

1,034

 

Other

 

115

 

 

74

 

 

180

 

 

183

 

 

81

 

 

87

 

 

610

 

 

153

 

Total selling and marketing

 

5,165

 

 

4,980

 

 

4,900

 

 

5,004

 

 

4,272

 

 

3,831

 

 

6,361

 

 

5,891

 

General and administrative

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Payroll and related

 

3,911

 

 

3,564

 

 

3,818

 

 

3,373

 

 

3,476

 

 

3,355

 

 

4,134

 

 

3,974

 

Stock-based compensation

 

958

 

 

806

 

 

986

 

 

726

 

 

968

 

 

744

 

 

612

 

 

770

 

Facility rent, office, and technology costs

 

2,692

 

 

2,484

 

 

2,480

 

 

2,412

 

 

178

 

 

628

 

 

43

 

 

56

 

Outside services

 

3,078

 

 

2,219

 

 

1,825

 

 

1,584

 

 

2,259

 

 

2,276

 

 

2,068

 

 

1,952

 

Taxes, licenses and permits

 

1,003

 

 

1,117

 

 

1,081

 

 

484

 

 

2,148

 

 

2,043

 

 

2,036

 

 

2,350

 

Bad debt

 

(29)

 

 

328

 

 

106

 

 

202

 

 

994

 

 

804

 

 

859

 

 

1,000

 

Other

 

925

 

 

1,039

 

 

854

 

 

1,265

 

 

971

 

 

960

 

 

1,499

 

 

1,429

 

Total general and administrative

 

12,538

 

 

11,557

 

 

11,150

 

 

10,046

 

 

10,994

 

 

10,810

 

 

11,251

 

 

11,531

 

Depreciation, amortization and accretion

 

2,568

 

 

2,457

 

 

2,727

 

 

2,503

 

 

2,335

 

 

2,072

 

 

2,146

 

 

2,250

 

Goodwill impairment

 

 

 

 

 

 

 

25,007

 

 

 

 

 

 

 

 

8,849

 

Operating expenses

 

$

39,408

 

 

$

37,332

 

 

$

37,776

 

 

$

61,930

 

 

$

34,961

 

 

$

32,580

 

 

$

41,375

 

 

$

51,787

 

Capital expenditures

 

$

905

 

 

$

1,480

 

 

$

727

 

 

$

638

 

 

$

934

 

 

$

846

 

 

$

1,063

 

 

$

679

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(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

 

 

9/30/2021

 

6/30/2021

 

3/31/2021

 

12/31/2020

 

9/30/2020

 

6/30/2020

 

3/31/2020

 

12/31/2019

Paging units in service

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Beginning units in service (000's)

 

869

 

 

874

 

 

885

 

 

898

 

 

915

 

 

926

 

 

938

 

 

955

 

Gross placements

 

23

 

 

31

 

 

20

 

 

20

 

 

25

 

 

35

 

 

24

 

 

22

 

Gross disconnects

 

(39)

 

 

(36)

 

 

(31)

 

 

(33)

 

 

(42)

 

 

(46)

 

 

(36)

 

 

(39)

 

Net change

 

(16)

 

 

(5)

 

 

(11)

 

 

(13)

 

 

(17)

 

 

(11)

 

 

(12)

 

 

(17)

 

Ending units in service

 

853

 

 

869

 

 

874

 

 

885

 

 

898

 

 

915

 

 

926

 

 

938

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Healthcare

 

84.6

%

 

84.5

%

 

84.1

%

 

83.6

%

 

83.7

%

 

83.6

%

 

82.6

%

 

82.4

%

Government

 

4.8

%

 

4.9

%

 

4.8

%

 

5.3

%

 

5.3

%

 

5.5

%

 

5.4

%

 

5.4

%

Large enterprise

 

4.1

%

 

4.1

%

 

4.3

%

 

4.3

%

 

4.3

%

 

4.4

%

 

5.5

%

 

5.5

%

Other(b)

 

6.4

%

 

6.4

%

 

6.8

%

 

6.8

%

 

6.6

%

 

6.6

%

 

6.5

%

 

6.6

%

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

 

57

 

 

58

 

 

59

 

 

61

 

 

63

 

 

65

 

 

67

 

 

69

 

101 to 1,000 units

 

154

 

 

155

 

 

163

 

 

167

 

 

167

 

 

165

 

 

171

 

 

173

 

>1,000 units

 

642

 

 

656

 

 

652

 

 

657

 

 

668

 

 

685

 

 

688

 

 

696

 

Total

 

853

 

 

869

 

 

874

 

 

885

 

 

898

 

 

915

 

 

926

 

 

938

 

Account size net loss rate(c)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1 to 100 units

 

(1.7)

%

 

(1.7)

%

 

(3.3)

%

 

(3.2)

%

 

(2.9)

%

 

(3.1)

%

 

(3.0)

%

 

(3.8)

%

101 to 1,000 units

 

(0.6)

%

 

(4.9)

%

 

(2.4)

%

 

%

 

1.5

%

 

(4.2)

%

 

(1.0)

%

 

(1.0)

%

>1,000 units

 

(2.1)

%

 

0.6

%

 

(0.8)

%

 

(1.6)

%

 

(2.5)

%

 

(0.4)

%

 

(1.2)

%

 

(1.8)

%

Total

 

(1.8)

%

 

(0.6)

%

 

(1.2)

%

 

(1.4)

%

 

(1.9)

%

 

(1.3)

%

 

(1.3)

%

 

(1.8)

%

Account size ARPU

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1 to 100 units

 

$

11.67

 

 

$

11.69

 

 

$

11.72

 

 

$

11.62

 

 

$

11.80

 

 

$

11.65

 

 

$

12.01

 

 

$

11.99

 

101 to 1,000 units

 

8.38

 

 

8.35

 

 

8.33

 

 

8.35

 

 

8.37

 

 

8.24

 

 

8.34

 

 

8.31

 

>1,000 units

 

6.65

 

 

6.68

 

 

6.68

 

 

6.62

 

 

6.67

 

 

6.57

 

 

6.59

 

 

6.62

 

Total

 

$

7.29

 

 

$

7.32

 

 

$

7.34

 

 

$

7.30

 

 

$

7.34

 

 

$

7.24

 

 

$

7.31

 

 

$

7.33

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(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

 

For the nine months ended

 

 

9/30/2021

 

9/30/2020

 

9/30/2021

 

9/30/2020

Net (loss) income

 

$

(2,494)

 

 

$

3,165

 

 

$

(5,510)

 

 

$

2,384

 

Add back:

 

 

 

 

 

 

 

 

(Benefit from) provision for income taxes

 

(912)

 

 

(155)

 

 

(1,120)

 

 

149

 

Other income

 

(10)

 

 

(151)

 

 

(13)

 

 

(113)

 

Interest income

 

(141)

 

 

(127)

 

 

(263)

 

 

(636)

 

Operating (loss) income

 

(3,557)

 

 

2,732

 

 

(6,906)

 

 

1,784

 

Depreciation, amortization and accretion

 

2,568

 

 

2,335

 

 

7,752

 

 

6,553

 

EBITDA

 

$

(989)

 

 

$

5,067

 

 

$

846

 

 

$

8,337

 

Capitalized software development costs

 

(2,621)

 

 

(2,906)

 

 

(8,239)

 

 

(8,206)

 

Stock-based compensation

 

2,016

 

 

1,616

 

 

6,036

 

 

4,160

 

Adjusted EBITDA

 

$

(1,594)

 

 

$

3,777

 

 

$

(1,357)

 

 

$

4,291

 

 

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

RECONCILIATION OF OPERATING EXPENSES TO ADJUSTED OPERATING EXPENSES (a)

(Unaudited and in thousands)

 

 

 

 

 

 

 

 

 

 

 

For the three months ended

 

For the nine months ended

 

 

9/30/2021

 

9/30/2020

 

9/30/2021

 

9/30/2020

Operating expenses

 

$

39,408

 

 

$

34,961

 

 

$

114,516

 

 

$

108,915

 

Add back:

 

 

 

 

 

 

 

 

Depreciation, amortization and accretion

 

(2,568)

 

 

(2,335)

 

 

(7,752)

 

 

(6,553)

 

Capitalized software development costs

 

2,621

 

 

2,906

 

 

8,239

 

 

8,206

 

Adjusted operating expenses

 

$

39,461

 

 

$

35,532

 

 

$

115,003

 

 

$

110,568

 

 

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

(Unaudited and in millions)

 

 

 

 

 

 

 

 

 

Current Guidance

 

 

 

Full Year 2021

Operating expenses

 

 

$

149.7

 

to

$

155.7

 

Add back:

 

 

 

 

 

Depreciation, amortization and accretion

 

 

(10.2)

 

 

(10.2)

 

Capitalized software development costs

 

 

11.5

 

 

11.5

 

Adjusted operating expenses

 

 

$

151.0

 

 

$

157.0

 

 

Lisa Fortuna or Mike Cummings
312-445-2866
spok@alpha-ir.com

Source: Spok Holdings, Inc.