News Release

Spok Reports 2021 Third Quarter Results

Company affirms its financial outlook for full year 2021

Alexandria, Va. (November 3, 2021) – 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.

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.

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