Spok Reports First-Quarter 2020 Operating Results; Wireless Trends Continue to Improve and Year-Over-Year Improvements in Software Revenue Bookings
Apr 29, 2020 4:10 PM
Board Declares Regular Quarterly Dividend
Key First-Quarter Operating Highlights:
-
Software bookings in the first quarter totaled
$15.6 million , up from software bookings of$14.7 million in the prior year quarter. First quarter 2020 bookings included$5.9 million of operations bookings and$9.7 million of maintenance renewals, compared to$6.0 million and$8.7 million , respectively in the first quarter of 2019. -
First quarter 2020 software revenue of
$15.9 million , compared to software revenue of$19.2 million in the prior year quarter. Included in first quarter software revenue was$6.2 million of operations revenue and$9.7 million in maintenance revenue, compared to$9.0 million in operations revenue and$10.2 million in maintenance revenue in the first quarter of 2019. - The revenue renewal rate for software maintenance in the first quarter of 2020 continued to exceed 99 percent.
-
The quarterly rate of paging unit erosion was 1.3 percent in the first quarter of 2020, compared to 1.8 percent in the prior quarter and 1.0 percent in the year-earlier period. Net paging unit losses were 12,000 in the first quarter of 2020, compared to 17,000 in the prior quarter and 10,000 in the first quarter of 2019. Paging units in service at
March 31, 2020 , totaled 926,000, compared to 982,000 atMarch 31, 2019 . - The quarterly rate of wireless revenue erosion was 1.1 percent in the first quarter of 2020, compared to 0.9 percent erosion in the prior quarter and 2.1 percent in the year-earlier quarter.
-
Total paging ARPU (average revenue per unit) was
$7.31 in the first quarter of 2020, compared to$7.32 in the year-earlier quarter and$7.33 in the prior quarter. -
Operating expenses in the first quarter of 2020 totaled
$41.4 million , compared to$40.6 million in the prior year quarter. Adjusted operating expenses totaled$40.9 million in the first quarter of 2020, compared to$38.3 million in the year-earlier quarter. -
Capital expenses were
$1.1 million in the first quarter of 2020, compared to$1.3 million in the year-earlier quarter. -
The number of full-time equivalent employees at
March 31, 2020 , totaled 620, compared to 591 in the prior year quarter. -
Capital returned to stockholders in the first quarter of 2020 totaled
$2.6 million , in the form of the regular quarterly dividend. -
The Company’s cash, cash equivalents and short-term investments balance at
March 31, 2020 , was$72.2 million , compared to$77.3 million atDecember 31, 2019 .
2020 First-Quarter Results:
Consolidated revenue for the first quarter of 2020 under Generally Accepted Accounting Principles (“GAAP”) was
|
For the three months ended |
||||||||||||
(Dollars in thousands) |
|
|
Change
|
||||||||||
Wireless revenue |
|
|
|
||||||||||
Paging revenue |
$ |
|
20,451 |
|
$ |
|
21,687 |
|
(5.7 |
)% |
|||
Product and other revenue |
|
935 |
|
|
923 |
|
1.3 |
% |
|||||
Total wireless revenue |
$ |
|
21,386 |
|
$ |
|
22,610 |
|
(5.4 |
)% |
|||
|
|
|
|
||||||||||
Software revenue |
|
|
|
||||||||||
Operations revenue |
$ |
|
6,229 |
|
$ |
|
9,009 |
|
(30.9 |
)% |
|||
Maintenance revenue |
|
9,652 |
|
|
10,145 |
|
(4.9 |
)% |
|||||
Total software revenue |
|
15,881 |
|
|
19,154 |
|
(17.1 |
)% |
|||||
Total revenue |
$ |
|
37,267 |
|
$ |
|
41,764 |
|
(10.8 |
)% |
GAAP net loss for the first quarter of 2020 was
In the first quarter of 2020, the EBITDA (earnings before interest, taxes, depreciation and amortization) loss totaled
|
For the three months ended |
|||||||||
(Dollars in thousands) |
|
|
||||||||
Net (loss) income |
$ |
|
(4,539 |
) |
$ |
|
742 |
|
||
Basic and diluted net (loss) income per share |
$ |
|
(0.24 |
) |
$ |
|
0.04 |
|
||
EBITDA |
$ |
|
(1,962 |
) |
$ |
|
3,474 |
|
Management Commentary:
“We were negatively impacted in the first quarter, as the majority of our customer base struggled with the challenges presented by COVID-19,” said
In the first quarter of 2020, Spok returned
Business Outlook:
Commenting on the Company’s previously provided financial guidance for 2020, Wallace noted: “Spok has been focused on understanding the impact of the pandemic on our business, particularly given the impact of COVID-19 on the roll-out of our Spok Go software business. Because of the uncertainty surrounding the duration and severity of this crisis and the extremely fluid nature of the situation, we, like many of our peer public companies, believe that it is most prudent to suspend our practice of providing annual guidance for revenues and expenses at this time. We look forward to returning to our normal guidance format after the crisis is over.
Unsolicited Offer from
On
“Further, we believe this is not the time to start a sale process for Spok for the following reasons:
1. M&A activity is severely depressed due to disruptions to the debt and equity markets, strict restrictions on travel and the inability to conduct meaningful due diligence on any proposed transaction, and the significant distractions affecting private equity and potential strategic counterparties due to COVID-19;
2. We are currently unable to predict or quantify the impact of COVID-19 on our business, particularly the impact of COVID-19 on the roll-out of our Spok Go software business;
3. Our customers are large and mid-size hospitals and systems which are focused on patient care during this challenging time, which will affect our near-term financial results;
4. Our Board of Directors continues to believe that, over the long term, our customers will further appreciate the value that our businesses bring to caregivers getting the right message to the right person on the right device at the right time;
5. We are focused on ensuring that our shareholders realize the appropriate value for the investment in Spok Go, despite its rollout being affected by the COVID-19 pandemic;
6. We want to provide feedback today on what we are seeing as our board considers the long-term interests of all our shareholders:
A. Recurring Revenues: We have two very valuable recurring revenue streams in our wireless business and software maintenance contracts, each with significant margins that together represented approximately 83% of revenues in our first quarter;
B. Wireless: Our wireless customer base over the next ten years is expected to generate approximately
C. Software: We have a valuable software business that has approximately
7. To date we have spent approximately
“Finally, on this matter, we believe the indication of interest by
New Directors:
During the first quarter the Company also announced that the Board of Directors appointed Dr.
2020 First-Quarter Call and Replay:
Spok plans to host a conference call for investors to discuss its 2020 first-quarter results at
About Spok
Spok is a trademark of
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 and statements relating to the unsolicited takeover bid from
|
||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (a) |
||||||||||||
(Unaudited and in thousands except share, per share amounts and ARPU) |
||||||||||||
|
|
|
|
|
||||||||
|
|
For the three months ended |
||||||||||
|
|
|
|
|
||||||||
Revenue: |
|
|
|
|
||||||||
Wireless |
|
$ |
|
21,386 |
|
|
$ |
|
22,610 |
|
||
Software |
|
|
15,881 |
|
|
|
19,154 |
|
||||
Total revenue |
|
|
37,267 |
|
|
|
41,764 |
|
||||
Operating expenses: |
|
|
|
|
||||||||
Cost of revenue |
|
|
8,264 |
|
|
|
7,592 |
|
||||
Research and development |
|
|
5,449 |
|
|
|
6,167 |
|
||||
Technology operations |
|
|
7,904 |
|
|
|
7,674 |
|
||||
Selling and marketing |
|
|
6,361 |
|
|
|
6,110 |
|
||||
General and administrative |
|
|
11,251 |
|
|
|
10,747 |
|
||||
Depreciation, amortization and accretion |
|
|
2,146 |
|
|
|
2,359 |
|
||||
Total operating expenses |
|
|
41,375 |
|
|
|
40,649 |
|
||||
% of total revenue |
|
|
111.0 |
% |
|
|
97.3 |
% |
||||
Operating (loss) income |
|
|
(4,108 |
) |
|
|
1,115 |
|
||||
% of total revenue |
|
|
(11.0 |
)% |
|
|
2.7 |
% |
||||
Interest income |
|
|
363 |
|
|
|
449 |
|
||||
Other expense |
|
|
(137 |
) |
|
|
(236 |
) |
||||
(Loss) income before income taxes |
|
|
(3,882 |
) |
|
|
1,328 |
|
||||
Provision for income taxes |
|
|
(657 |
) |
|
|
(586 |
) |
||||
Net (loss) income |
|
$ |
|
(4,539 |
) |
|
$ |
|
742 |
|
||
Basic and diluted net (loss) income per common share |
|
$ |
|
(0.24 |
) |
|
$ |
|
0.04 |
|
||
Basic weighted average common shares outstanding |
|
|
18,958,716 |
|
|
|
19,196,970 |
|
||||
Diluted weighted average common shares outstanding |
|
|
18,958,716 |
|
|
|
19,356,712 |
|
||||
Cash dividends declared per common share |
|
|
0.125 |
|
|
|
0.125 |
|
||||
Key statistics: |
|
|
|
|
||||||||
Units in service |
|
|
926 |
|
|
|
982 |
|
||||
Average revenue per unit (ARPU) |
|
$ |
|
7.31 |
|
|
$ |
|
7.32 |
|
||
Bookings |
|
$ |
|
15,639 |
|
|
$ |
|
14,654 |
|
||
Backlog |
|
$ |
|
49,052 |
|
|
$ |
|
37,392 |
|
||
|
|
|
|
|
||||||||
(a) Slight variations in totals are due to rounding. |
|
||||||||||||||||||||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (a) |
||||||||||||||||||||||||||||||||
(Unaudited and in thousands except share, per share amounts and ARPU) |
||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
|
For the three months ended |
||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Wireless |
|
$ |
21,386 |
|
|
$ |
21,615 |
|
|
$ |
21,814 |
|
|
$ |
22,127 |
|
|
$ |
22,610 |
|
|
$ |
23,091 |
|
|
$ |
23,259 |
|
|
$ |
23,658 |
|
Software |
|
|
15,881 |
|
|
|
17,933 |
|
|
|
17,639 |
|
|
|
17,398 |
|
|
|
19,154 |
|
|
|
20,165 |
|
|
|
19,217 |
|
|
|
16,970 |
|
Total revenue |
|
|
37,267 |
|
|
|
39,548 |
|
|
|
39,453 |
|
|
|
39,525 |
|
|
|
41,764 |
|
|
|
43,256 |
|
|
|
42,476 |
|
|
|
40,628 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Cost of revenue (b) |
|
|
8,264 |
|
|
|
8,051 |
|
|
|
7,190 |
|
|
|
7,239 |
|
|
|
7,592 |
|
|
|
8,772 |
|
|
|
8,141 |
|
|
|
7,596 |
|
Research and development |
|
|
5,449 |
|
|
|
7,132 |
|
|
|
7,437 |
|
|
|
6,807 |
|
|
|
6,167 |
|
|
|
6,618 |
|
|
|
5,934 |
|
|
|
6,177 |
|
Technology operations |
|
|
7,904 |
|
|
|
8,083 |
|
|
|
7,805 |
|
|
|
7,866 |
|
|
|
7,674 |
|
|
|
8,120 |
|
|
|
7,787 |
|
|
|
7,698 |
|
Selling and marketing |
|
|
6,361 |
|
|
|
5,891 |
|
|
|
5,595 |
|
|
|
5,574 |
|
|
|
6,110 |
|
|
|
6,275 |
|
|
|
5,716 |
|
|
|
6,093 |
|
General and administrative |
|
|
11,251 |
|
|
|
11,531 |
|
|
|
11,813 |
|
|
|
11,696 |
|
|
|
10,747 |
|
|
|
10,721 |
|
|
|
13,673 |
|
|
|
12,741 |
|
Depreciation, amortization and accretion |
|
|
2,146 |
|
|
|
2,250 |
|
|
|
2,305 |
|
|
|
2,335 |
|
|
|
2,359 |
|
|
|
2,601 |
|
|
|
2,785 |
|
|
|
2,669 |
|
|
|
— |
|
|
|
8,849 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|||||||
Total operating expenses |
|
|
41,375 |
|
|
|
51,787 |
|
|
|
42,145 |
|
|
|
41,517 |
|
|
|
40,649 |
|
|
|
43,107 |
|
|
|
44,036 |
|
|
|
42,974 |
|
% of total revenue |
|
|
111.0 |
% |
|
|
130.9 |
% |
|
|
106.8 |
% |
|
|
105.0 |
% |
|
|
97.3 |
% |
|
|
99.7 |
% |
|
|
103.7 |
% |
|
|
105.8 |
% |
Operating (loss) income |
|
|
(4,108 |
) |
|
|
(12,239 |
) |
|
|
(2,692 |
) |
|
|
(1,992 |
) |
|
|
1,115 |
|
|
|
149 |
|
|
|
(1,560 |
) |
|
|
(2,346 |
) |
% of total revenue |
|
|
(11.0 |
)% |
|
|
(30.9 |
)% |
|
|
(6.8 |
)% |
|
|
(5.0 |
)% |
|
|
2.7 |
% |
|
|
0.3 |
% |
|
|
(3.7 |
)% |
|
|
(5.8 |
)% |
Interest income |
|
|
363 |
|
|
|
350 |
|
|
|
399 |
|
|
|
452 |
|
|
|
449 |
|
|
|
628 |
|
|
|
384 |
|
|
|
342 |
|
Other (expense) income |
|
|
(137 |
) |
|
|
206 |
|
|
|
163 |
|
|
|
602 |
|
|
|
(236 |
) |
|
|
(593 |
) |
|
|
(110 |
) |
|
|
102 |
|
(Loss) income before income taxes |
|
|
(3,882 |
) |
|
|
(11,683 |
) |
|
|
(2,130 |
) |
|
|
(938 |
) |
|
|
1,328 |
|
|
|
184 |
|
|
|
(1,286 |
) |
|
|
(1,902 |
) |
(Provision for) benefit from income taxes |
|
|
(657 |
) |
|
|
2,172 |
|
|
|
804 |
|
|
|
268 |
|
|
|
(586 |
) |
|
|
5 |
|
|
|
446 |
|
|
|
730 |
|
Net (loss) income |
|
$ |
(4,539 |
) |
|
$ |
(9,511 |
) |
|
$ |
(1,326 |
) |
|
$ |
(670 |
) |
|
$ |
742 |
|
|
$ |
189 |
|
|
$ |
(840 |
) |
|
$ |
(1,172 |
) |
Basic and diluted net (loss) income per common share |
|
$ |
(0.24 |
) |
|
$ |
(0.50 |
) |
|
$ |
(0.07 |
) |
|
$ |
(0.03 |
) |
|
$ |
0.04 |
|
|
$ |
0.01 |
|
|
$ |
(0.04 |
) |
|
$ |
(0.06 |
) |
Basic weighted average common shares outstanding |
|
|
18,958,716 |
|
|
|
18,860,020 |
|
|
|
19,086,811 |
|
|
|
19,217,866 |
|
|
|
19,196,970 |
|
|
|
19,445,401 |
|
|
|
19,456,149 |
|
|
|
19,750,941 |
|
Diluted weighted average common shares outstanding |
|
|
18,958,716 |
|
|
|
18,860,020 |
|
|
|
19,086,811 |
|
|
|
19,217,866 |
|
|
|
19,356,712 |
|
|
|
19,445,401 |
|
|
|
19,456,149 |
|
|
|
19,750,941 |
|
Key statistics: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Units in service |
|
|
926 |
|
|
|
938 |
|
|
|
955 |
|
|
|
977 |
|
|
|
982 |
|
|
|
992 |
|
|
|
999 |
|
|
|
1,024 |
|
Average revenue per unit (ARPU) |
|
$ |
7.31 |
|
|
$ |
7.33 |
|
|
$ |
7.32 |
|
|
$ |
7.26 |
|
|
$ |
7.32 |
|
|
$ |
7.36 |
|
|
$ |
7.40 |
|
|
$ |
7.41 |
|
Bookings |
|
$ |
15,639 |
|
|
$ |
21,932 |
|
|
$ |
20,421 |
|
|
$ |
21,334 |
|
|
$ |
14,654 |
|
|
$ |
23,076 |
|
|
$ |
21,580 |
|
|
$ |
18,488 |
|
Backlog |
|
$ |
49,052 |
|
|
$ |
50,553 |
|
|
$ |
42,604 |
|
|
$ |
39,718 |
|
|
$ |
37,392 |
|
|
$ |
40,422 |
|
|
$ |
36,366 |
|
|
$ |
36,295 |
|
(a) Slight variations in totals are due to rounding. |
(b) An adjustment of |
|
||||||||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS (a) |
||||||||||||||
(In thousands) |
||||||||||||||
|
|
|
|
|
||||||||||
|
|
|
|
|
||||||||||
|
|
|
|
|
||||||||||
Assets |
|
|
|
|
||||||||||
Current assets: |
|
|
|
|
||||||||||
Cash and cash equivalents |
|
$ |
|
42,284 |
|
|
$ |
|
47,361 |
|
||||
Short term investments |
|
|
29,906 |
|
|
|
29,899 |
|
||||||
Accounts receivable, net |
|
|
27,216 |
|
|
|
30,174 |
|
||||||
Prepaid expenses |
|
|
8,411 |
|
|
|
7,517 |
|
||||||
Other current assets |
|
|
2,433 |
|
|
|
2,714 |
|
||||||
Total current assets |
|
|
110,250 |
|
|
|
117,665 |
|
||||||
Non-current assets: |
|
|
|
|
||||||||||
Property and equipment, net |
|
|
7,655 |
|
|
|
8,000 |
|
||||||
Operating lease right-of-use assets |
|
|
15,591 |
|
|
|
16,317 |
|
||||||
Capitalized software development |
|
|
1,705 |
|
|
— |
|
|||||||
|
|
|
124,182 |
|
|
|
124,182 |
|
||||||
Intangible assets, net |
|
|
2,292 |
|
|
|
2,917 |
|
||||||
Deferred income tax assets |
|
|
47,486 |
|
|
|
48,983 |
|
||||||
Other non-current assets |
|
|
1,641 |
|
|
|
1,808 |
|
||||||
Total non-current assets |
|
|
200,552 |
|
|
|
202,207 |
|
||||||
Total assets |
|
$ |
|
310,802 |
|
|
$ |
|
319,872 |
|
||||
Liabilities and stockholders' equity |
|
|
|
|
||||||||||
Current liabilities: |
|
|
|
|
||||||||||
Accounts payable |
|
$ |
|
4,003 |
|
|
$ |
|
3,615 |
|
||||
Accrued compensation and benefits |
|
|
10,403 |
|
|
|
11,680 |
|
||||||
Accrued taxes |
|
|
1,419 |
|
|
|
1,529 |
|
||||||
Deferred revenue |
|
|
25,265 |
|
|
|
25,944 |
|
||||||
Operating lease liabilities |
|
|
5,236 |
|
|
|
5,437 |
|
||||||
Other current liabilities |
|
|
3,629 |
|
|
|
2,978 |
|
||||||
Total current liabilities |
|
|
49,955 |
|
|
|
51,183 |
|
||||||
Non-current liabilities: |
|
|
|
|
||||||||||
Asset retirement obligations |
|
|
6,109 |
|
|
|
6,061 |
|
||||||
Operating lease liabilities |
|
|
10,972 |
|
|
|
11,575 |
|
||||||
Other non-current liabilities |
|
|
986 |
|
|
|
959 |
|
||||||
Total non-current liabilities |
|
|
18,067 |
|
|
|
18,595 |
|
||||||
Total liabilities |
|
|
68,022 |
|
|
|
69,778 |
|
||||||
Commitments and contingencies |
|
|
|
|
||||||||||
Stockholders' equity: |
|
|
|
|
||||||||||
Preferred stock |
|
$ |
|
— |
|
|
$ |
|
— |
|
||||
Common stock |
|
|
2 |
|
|
|
2 |
|
||||||
Additional paid-in capital |
|
|
87,153 |
|
|
|
86,874 |
|
||||||
Accumulated other comprehensive loss |
|
|
(1,821 |
) |
|
|
(1,601 |
) |
||||||
Retained earnings |
|
|
157,446 |
|
|
|
164,819 |
|
||||||
Total stockholders' equity |
|
|
242,780 |
|
|
|
250,094 |
|
||||||
Total liabilities and stockholders' equity |
|
$ |
|
310,802 |
|
|
$ |
|
319,872 |
|
||||
|
|
|
|
|
||||||||||
(a) Slight variations in totals are due to rounding. |
|
||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (a) |
||||||||||||
(Unaudited and in thousands) |
||||||||||||
|
|
|
|
|
||||||||
|
|
For the three months ended |
||||||||||
|
|
|
|
|
||||||||
Operating activities: |
|
|
|
|
||||||||
Net (loss) income |
|
$ |
|
(4,539 |
) |
|
$ |
|
742 |
|
||
Adjustments to reconcile net loss to net cash provided by operating activities: |
|
|
|
|
||||||||
Depreciation, amortization and accretion |
|
|
2,146 |
|
|
|
2,359 |
|
||||
Deferred income tax expense |
|
|
790 |
|
|
|
517 |
|
||||
Stock based compensation |
|
|
1,182 |
|
|
|
528 |
|
||||
Provisions for doubtful accounts, service credits, and other |
|
|
18 |
|
|
|
374 |
|
||||
Changes in assets and liabilities: |
|
|
|
|
||||||||
Accounts receivable |
|
|
2,441 |
|
|
|
(4,791 |
) |
||||
Prepaid expenses, inventory and other assets |
|
|
964 |
|
|
|
2,216 |
|
||||
Accounts payable, accrued liabilities and other |
|
|
(1,143 |
) |
|
|
(2,525 |
) |
||||
Deferred revenue |
|
|
(542 |
) |
|
|
1,803 |
|
||||
Net cash provided by operating activities |
|
|
1,317 |
|
|
|
1,223 |
|
||||
Investing activities: |
|
|
|
|
||||||||
Purchases of property and equipment |
|
|
(1,049 |
) |
|
|
(1,287 |
) |
||||
Capitalized software development |
|
|
(1,705 |
) |
|
— |
|
|||||
Purchase of short-term investments |
|
|
(14,888 |
) |
|
|
(14,824 |
) |
||||
Maturity of short-term investments |
|
|
15,000 |
|
|
— |
|
|||||
Net cash used in investing activities |
|
|
(2,642 |
) |
|
|
(16,111 |
) |
||||
Financing activities: |
|
|
|
|
||||||||
Cash distributions to stockholders |
|
|
(2,629 |
) |
|
|
(2,647 |
) |
||||
Purchase of common stock (including commissions) |
|
— |
|
|
|
(1,810 |
) |
|||||
Purchase of common stock for tax withholding on vested equity awards |
|
|
(903 |
) |
|
|
(1,011 |
) |
||||
Net cash used in financing activities |
|
|
(3,532 |
) |
|
|
(5,468 |
) |
||||
Effect of exchange rate on cash |
|
|
(220 |
) |
|
|
(60 |
) |
||||
Net decrease in cash and cash equivalents |
|
|
(5,077 |
) |
|
|
(20,416 |
) |
||||
Cash and cash equivalents, beginning of period |
|
|
47,361 |
|
|
|
83,343 |
|
||||
Cash and cash equivalents, end of period |
|
$ |
|
42,284 |
|
|
$ |
|
62,927 |
|
||
Supplemental disclosure: |
|
|
|
|
||||||||
Income taxes paid |
|
$ |
|
— |
|
|
$ |
|
80 |
|
||
|
|
|
|
|
||||||||
(a) Slight variations in totals are due to rounding. |
|
|||||||||||||||||||||||||||||||||||||||||
CONSOLIDATED REVENUE |
|||||||||||||||||||||||||||||||||||||||||
SUPPLEMENTAL INFORMATION (a) |
|||||||||||||||||||||||||||||||||||||||||
(Unaudited and in thousands) |
|||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
|
|
For the three months ended |
|||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Revenue |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Paging |
|
$ |
|
20,451 |
|
|
$ |
|
20,826 |
|
|
$ |
|
21,212 |
|
|
$ |
|
21,342 |
|
|
$ |
|
21,687 |
|
|
$ |
|
21,997 |
|
|
$ |
|
22,442 |
|
|
$ |
|
22,824 |
|
|
Non-paging |
|
|
935 |
|
|
|
789 |
|
|
|
602 |
|
|
|
785 |
|
|
|
923 |
|
|
|
1,094 |
|
|
|
817 |
|
|
|
834 |
|
|||||||||
Total wireless revenue |
|
$ |
|
21,386 |
|
|
$ |
|
21,615 |
|
|
$ |
|
21,814 |
|
|
$ |
|
22,127 |
|
|
$ |
|
22,610 |
|
|
$ |
|
23,091 |
|
|
$ |
|
23,259 |
|
|
$ |
|
23,658 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
License |
|
|
955 |
|
|
|
1,711 |
|
|
|
2,723 |
|
|
|
1,676 |
|
|
|
2,840 |
|
|
|
3,496 |
|
|
|
3,175 |
|
|
|
1,993 |
|
|||||||||
Services |
|
|
4,549 |
|
|
|
4,947 |
|
|
|
4,202 |
|
|
|
4,835 |
|
|
|
5,206 |
|
|
|
5,103 |
|
|
|
4,555 |
|
|
|
4,363 |
|
|||||||||
Equipment |
|
|
725 |
|
|
|
1,125 |
|
|
|
689 |
|
|
|
842 |
|
|
|
963 |
|
|
|
1,568 |
|
|
|
1,296 |
|
|
|
1,107 |
|
|||||||||
Operations revenue |
|
$ |
|
6,229 |
|
|
$ |
|
7,783 |
|
|
$ |
|
7,614 |
|
|
$ |
|
7,353 |
|
|
$ |
|
9,009 |
|
|
$ |
|
10,167 |
|
|
$ |
|
9,026 |
|
|
$ |
|
7,463 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Maintenance revenue |
|
$ |
|
9,652 |
|
|
$ |
|
10,150 |
|
|
$ |
|
10,025 |
|
|
$ |
|
10,045 |
|
|
$ |
|
10,145 |
|
|
$ |
|
9,998 |
|
|
$ |
|
10,191 |
|
|
$ |
|
9,507 |
|
|
Total software revenue |
|
$ |
|
15,881 |
|
|
$ |
|
17,933 |
|
|
$ |
|
17,639 |
|
|
$ |
|
17,398 |
|
|
$ |
|
19,154 |
|
|
$ |
|
20,165 |
|
|
$ |
|
19,217 |
|
|
$ |
|
16,970 |
|
|
|
|||||||||||||||||||||||||||||||||||||||||
Total revenue |
|
$ |
|
37,267 |
|
|
$ |
|
39,548 |
|
|
$ |
|
39,453 |
|
|
$ |
|
39,525 |
|
|
$ |
|
41,764 |
|
|
$ |
|
43,256 |
|
|
$ |
|
42,476 |
|
|
$ |
|
40,628 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
(a) Slight variations in totals are due to rounding. |
|
||||||||||||||||||||||||||||||||
CONSOLIDATED OPERATING EXPENSES |
||||||||||||||||||||||||||||||||
SUPPLEMENTAL INFORMATION (a) |
||||||||||||||||||||||||||||||||
(Unaudited and in thousands) |
||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
|
For the three months ended |
||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Cost of revenue |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Payroll and related |
|
$ |
5,785 |
|
|
$ |
5,222 |
|
|
$ |
5,099 |
|
|
$ |
4,749 |
|
|
$ |
4,931 |
|
|
$ |
4,868 |
|
|
$ |
4,923 |
|
|
$ |
4,853 |
|
Cost of sales |
|
1,940 |
|
|
2,278 |
|
|
1,567 |
|
|
1,900 |
|
|
2,080 |
|
|
3,349 |
|
|
2,623 |
|
|
2,119 |
|
||||||||
Stock-based compensation |
|
119 |
|
|
42 |
|
|
21 |
|
|
97 |
|
|
107 |
|
|
44 |
|
|
75 |
|
|
75 |
|
||||||||
Other |
|
420 |
|
|
509 |
|
|
503 |
|
|
493 |
|
|
474 |
|
|
511 |
|
|
520 |
|
|
549 |
|
||||||||
Total cost of revenue (b) |
|
8,264 |
|
|
8,051 |
|
|
7,190 |
|
|
7,239 |
|
|
7,592 |
|
|
8,772 |
|
|
8,141 |
|
|
7,596 |
|
||||||||
Research and development |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Payroll and related |
|
4,761 |
|
|
5,056 |
|
|
5,083 |
|
|
4,639 |
|
|
4,263 |
|
|
4,350 |
|
|
4,709 |
|
|
4,506 |
|
||||||||
Outside services |
|
1,584 |
|
|
1,742 |
|
|
2,027 |
|
|
1,912 |
|
|
1,745 |
|
|
2,115 |
|
|
1,040 |
|
|
1,481 |
|
||||||||
Capitalized software development |
|
(1,705 |
) |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
||||||||
Stock-based compensation |
|
236 |
|
|
113 |
|
|
102 |
|
|
84 |
|
|
11 |
|
|
5 |
|
|
71 |
|
|
90 |
|
||||||||
Other |
|
573 |
|
|
221 |
|
|
225 |
|
|
172 |
|
|
148 |
|
|
148 |
|
|
114 |
|
|
100 |
|
||||||||
Total research and development |
|
5,449 |
|
|
7,132 |
|
|
7,437 |
|
|
6,807 |
|
|
6,167 |
|
|
6,618 |
|
|
5,934 |
|
|
6,177 |
|
||||||||
Technology operations |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Payroll and related |
|
2,712 |
|
|
2,656 |
|
|
2,823 |
|
|
2,662 |
|
|
2,647 |
|
|
2,616 |
|
|
2,866 |
|
|
2,618 |
|
||||||||
Site rent |
|
3,398 |
|
|
3,669 |
|
|
3,269 |
|
|
3,480 |
|
|
3,296 |
|
|
3,432 |
|
|
3,482 |
|
|
3,538 |
|
||||||||
Telecommunications |
|
1,001 |
|
|
1,026 |
|
|
1,016 |
|
|
1,019 |
|
|
996 |
|
|
1,021 |
|
|
950 |
|
|
935 |
|
||||||||
Stock-based compensation |
|
43 |
|
|
32 |
|
|
30 |
|
|
30 |
|
|
30 |
|
|
24 |
|
|
24 |
|
|
24 |
|
||||||||
Other |
|
750 |
|
|
700 |
|
|
667 |
|
|
675 |
|
|
705 |
|
|
1,027 |
|
|
465 |
|
|
583 |
|
||||||||
Total technology operations |
|
7,904 |
|
|
8,083 |
|
|
7,805 |
|
|
7,866 |
|
|
7,674 |
|
|
8,120 |
|
|
7,787 |
|
|
7,698 |
|
||||||||
Selling and marketing |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Payroll and related |
|
3,583 |
|
|
3,382 |
|
|
3,524 |
|
|
3,329 |
|
|
3,273 |
|
|
3,047 |
|
|
3,401 |
|
|
3,311 |
|
||||||||
Commissions |
|
1,212 |
|
|
1,158 |
|
|
1,114 |
|
|
1,298 |
|
|
1,424 |
|
|
1,759 |
|
|
1,225 |
|
|
1,397 |
|
||||||||
Stock-based compensation |
|
172 |
|
|
164 |
|
|
137 |
|
|
128 |
|
|
161 |
|
|
99 |
|
|
135 |
|
|
135 |
|
||||||||
Advertising and events |
|
784 |
|
|
1,034 |
|
|
703 |
|
|
656 |
|
|
933 |
|
|
1,236 |
|
|
857 |
|
|
996 |
|
||||||||
Other |
|
610 |
|
|
153 |
|
|
117 |
|
|
163 |
|
|
319 |
|
|
134 |
|
|
98 |
|
|
254 |
|
||||||||
Total selling and marketing |
|
6,361 |
|
|
5,891 |
|
|
5,595 |
|
|
5,574 |
|
|
6,110 |
|
|
6,275 |
|
|
5,716 |
|
|
6,093 |
|
||||||||
General and administrative |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Payroll and related |
|
4,134 |
|
|
3,974 |
|
|
4,220 |
|
|
4,136 |
|
|
4,041 |
|
|
4,087 |
|
|
4,834 |
|
|
4,340 |
|
||||||||
Stock-based compensation |
|
612 |
|
|
770 |
|
|
674 |
|
|
690 |
|
|
219 |
|
|
860 |
|
|
1,118 |
|
|
943 |
|
||||||||
Bad debt |
|
43 |
|
|
56 |
|
|
402 |
|
|
(96 |
) |
|
308 |
|
|
303 |
|
|
513 |
|
|
279 |
|
||||||||
Facility rent, office, and technology costs |
|
2,068 |
|
|
1,952 |
|
|
2,369 |
|
|
2,485 |
|
|
2,294 |
|
|
2,072 |
|
|
2,925 |
|
|
2,323 |
|
||||||||
Outside services |
|
2,036 |
|
|
2,350 |
|
|
2,004 |
|
|
2,306 |
|
|
1,776 |
|
|
2,062 |
|
|
1,864 |
|
|
2,443 |
|
||||||||
Taxes, licenses and permits |
|
859 |
|
|
1,000 |
|
|
888 |
|
|
863 |
|
|
921 |
|
|
111 |
|
|
1,081 |
|
|
1,024 |
|
||||||||
Other |
|
1,499 |
|
|
1,429 |
|
|
1,256 |
|
|
1,312 |
|
|
1,188 |
|
|
1,226 |
|
|
1,338 |
|
|
1,389 |
|
||||||||
Total general and administrative |
|
11,251 |
|
|
11,531 |
|
|
11,813 |
|
|
11,696 |
|
|
10,747 |
|
|
10,721 |
|
�� |
13,673 |
|
|
12,741 |
|
||||||||
Depreciation, amortization and accretion |
|
2,146 |
|
|
2,250 |
|
|
2,305 |
|
|
2,335 |
|
|
2,359 |
|
|
2,601 |
|
|
2,785 |
|
|
2,669 |
|
||||||||
|
|
— |
|
|
8,849 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
||||||||
Operating expenses |
|
$ |
41,375 |
|
|
$ |
51,787 |
|
|
$ |
42,145 |
|
|
$ |
41,517 |
|
|
$ |
40,649 |
|
|
$ |
43,107 |
|
|
$ |
44,036 |
|
|
$ |
42,974 |
|
Capital expenditures |
|
$ |
1,063 |
|
|
$ |
679 |
|
|
$ |
1,378 |
|
|
$ |
1,495 |
|
|
$ |
1,287 |
|
|
$ |
830 |
|
|
$ |
1,630 |
|
|
$ |
2,299 |
|
(a) Slight variations in totals are due to rounding. |
(b) An adjustment of |
|
||||||||||||||||||||||||||||||||
UNITS IN SERVICE ACTIVITY, MARKET SEGMENT, CHURN |
||||||||||||||||||||||||||||||||
AND AVERAGE REVENUE PER UNIT (ARPU) (a) |
||||||||||||||||||||||||||||||||
(Unaudited and in thousands) |
||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
|
For the three months ended |
||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Paging units in service |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Beginning units in service (000's) |
|
938 |
|
|
955 |
|
|
977 |
|
|
982 |
|
|
992 |
|
|
999 |
|
|
1,024 |
|
|
1,030 |
|
||||||||
Gross placements |
|
24 |
|
|
22 |
|
|
28 |
|
|
35 |
|
|
27 |
|
|
30 |
|
|
31 |
|
|
35 |
|
||||||||
Gross disconnects |
|
(36 |
) |
|
(39 |
) |
|
(50 |
) |
|
(40 |
) |
|
(37 |
) |
|
(37 |
) |
|
(56 |
) |
|
(41 |
) |
||||||||
Net change |
|
(12 |
) |
|
(17 |
) |
|
(22 |
) |
|
(5 |
) |
|
(10 |
) |
|
(7 |
) |
|
(25 |
) |
|
(6 |
) |
||||||||
Ending units in service |
|
926 |
|
|
938 |
|
|
955 |
|
|
977 |
|
|
982 |
|
|
992 |
|
|
999 |
|
|
1,024 |
|
||||||||
End of period units in service % of total (b) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Healthcare |
|
82.6 |
% |
|
82.4 |
% |
|
81.7 |
% |
|
81.7 |
% |
|
81.6 |
% |
|
81.4 |
% |
|
81.7 |
% |
|
81.5 |
% |
||||||||
Government |
|
5.4 |
% |
|
5.4 |
% |
|
5.5 |
% |
|
5.6 |
% |
|
5.8 |
% |
|
5.8 |
% |
|
5.8 |
% |
|
5.7 |
% |
||||||||
Large enterprise |
|
5.5 |
% |
|
5.5 |
% |
|
6.1 |
% |
|
5.9 |
% |
|
5.9 |
% |
|
5.9 |
% |
|
6.0 |
% |
|
6.0 |
% |
||||||||
Other(b) |
|
6.5 |
% |
|
6.6 |
% |
|
6.7 |
% |
|
6.8 |
% |
|
6.7 |
% |
|
6.9 |
% |
|
6.5 |
% |
|
6.8 |
% |
||||||||
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 |
|
67 |
|
|
69 |
|
|
72 |
|
|
74 |
|
|
77 |
|
|
78 |
|
|
81 |
|
|
85 |
|
||||||||
101 to 1,000 units |
|
171 |
|
|
173 |
|
|
175 |
|
|
179 |
|
|
186 |
|
|
190 |
|
|
192 |
|
|
197 |
|
||||||||
>1,000 units |
|
688 |
|
|
696 |
|
|
708 |
|
|
724 |
|
|
719 |
|
|
724 |
|
|
726 |
|
|
742 |
|
||||||||
Total |
|
926 |
|
|
938 |
|
|
955 |
|
|
977 |
|
|
982 |
|
|
992 |
|
|
999 |
|
|
1,024 |
|
||||||||
Account size net loss rate(c) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
1 to 100 units |
|
(3.0 |
)% |
|
(3.8 |
)% |
|
(2.1 |
)% |
|
(3.2 |
)% |
|
(2.3 |
)% |
|
(1.7 |
)% |
|
(4.3 |
)% |
|
(3.8 |
)% |
||||||||
101 to 1,000 units |
|
(1.0 |
)% |
|
(1.0 |
)% |
|
(2.4 |
)% |
|
(3.9 |
)% |
|
(2.3 |
)% |
|
— |
% |
|
(2.7 |
)% |
|
(0.6 |
)% |
||||||||
>1,000 units |
|
(1.2 |
)% |
|
(1.8 |
)% |
|
(2.2 |
)% |
|
0.7 |
% |
|
(1.1 |
)% |
|
(0.1 |
)% |
|
(2.2 |
)% |
|
(0.2 |
)% |
||||||||
Total |
|
(1.3 |
)% |
|
(1.8 |
)% |
|
(2.2 |
)% |
|
(0.5 |
)% |
|
(1.1 |
)% |
|
(0.2 |
)% |
|
(2.5 |
)% |
|
(0.6 |
)% |
||||||||
Account size ARPU |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
1 to 100 units |
|
$ |
12.01 |
|
|
$ |
11.99 |
|
|
$ |
11.84 |
|
|
$ |
12.00 |
|
|
$ |
11.90 |
|
|
$ |
11.61 |
|
|
$ |
11.33 |
|
|
$ |
12.04 |
|
101 to 1,000 units |
|
8.34 |
|
|
8.31 |
|
|
8.41 |
|
|
8.47 |
|
|
8.35 |
|
|
8.28 |
|
|
8.19 |
|
|
8.34 |
|
||||||||
>1,000 units |
|
6.59 |
|
|
6.62 |
|
|
6.59 |
|
|
6.47 |
|
|
6.57 |
|
|
6.69 |
|
|
6.74 |
|
|
6.62 |
|
||||||||
Total |
|
$ |
7.31 |
|
|
$ |
7.33 |
|
|
$ |
7.32 |
|
|
$ |
7.26 |
|
|
$ |
7.32 |
|
|
$ |
7.36 |
|
|
$ |
7.40 |
|
|
$ |
7.41 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
(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. |
|
||||||||||||||||||||||||||||||||
RECONCILIATION FROM NET (LOSS) INCOME TO EBITDA (a) |
||||||||||||||||||||||||||||||||
(Unaudited and in thousands) |
||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
|
For the three months ended |
||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Reconciliation of net (loss) income to EBITDA (b): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Net (loss) income (c) |
|
$ |
(4,539 |
) |
|
$ |
(9,511 |
) |
|
$ |
(1,326 |
) |
|
$ |
(670 |
) |
|
$ |
742 |
|
|
$ |
189 |
|
|
$ |
(840 |
) |
|
$ |
(1,172 |
) |
Plus (less): (benefit from) provision for income taxes |
|
657 |
|
|
(2,172 |
) |
|
(804 |
) |
|
(268 |
) |
|
586 |
|
|
(5 |
) |
|
(446 |
) |
|
(730 |
) |
||||||||
Plus (less): Other expense (income) |
|
137 |
|
|
(206 |
) |
|
(163 |
) |
|
(602 |
) |
|
236 |
|
|
593 |
|
|
110 |
|
|
(102 |
) |
||||||||
Less: Interest income |
|
(363 |
) |
|
(350 |
) |
|
(399 |
) |
|
(452 |
) |
|
(449 |
) |
|
(628 |
) |
|
(384 |
) |
|
(342 |
) |
||||||||
Operating (loss) income |
|
(4,108 |
) |
|
(12,239 |
) |
|
(2,692 |
) |
|
(1,992 |
) |
|
1,115 |
|
|
149 |
|
|
(1,560 |
) |
|
(2,346 |
) |
||||||||
Plus: depreciation, amortization and accretion |
|
2,146 |
|
|
2,250 |
|
|
2,305 |
|
|
2,335 |
|
|
2,359 |
|
|
2,601 |
|
|
2,785 |
|
|
2,669 |
|
||||||||
EBITDA (as defined by the Company) |
|
$ |
(1,962 |
) |
|
$ |
(9,989 |
) |
|
$ |
(387 |
) |
|
$ |
343 |
|
|
$ |
3,474 |
|
|
$ |
2,750 |
|
|
$ |
1,225 |
|
|
$ |
323 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RECONCILIATION FROM OPERATING EXPENSES TO ADJUSTED OPERATING EXPENSES (a)(d) |
|
||||||||||||||||||||||||||||||||
|
|
|
|
||||||||||||||||||||||||||||||
|
|
For the three months ended |
|
||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
(Dollars in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Operating expenses |
|
$ |
41,375 |
|
|
$ |
51,787 |
|
|
$ |
42,145 |
|
|
$ |
41,517 |
|
|
$ |
40,649 |
|
|
$ |
43,107 |
|
|
$ |
44,036 |
|
|
$ |
42,974 |
|
|
Less: depreciation, amortization and accretion |
|
2,146 |
|
|
2,250 |
|
|
2,305 |
|
|
2,335 |
|
|
2,359 |
|
|
2,601 |
|
|
2,785 |
|
|
2,669 |
|
|
||||||||
Less: goodwill impairment |
|
$ |
— |
|
|
$ |
8,849 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
Add: capitalized software costs |
|
$ |
1,705 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
Adjusted operating expenses |
|
$ |
40,934 |
|
|
$ |
40,688 |
|
|
$ |
39,840 |
|
|
$ |
39,182 |
|
|
$ |
38,290 |
|
|
$ |
40,506 |
|
|
$ |
41,251 |
|
|
$ |
40,305 |
|
|
(a) Slight variations in totals are due to rounding. |
(b) EBITDA or earnings before interest, taxes, depreciation, amortization and accretion is a non-GAAP measure and is presented for analytical purposes only. Management and the Board of Directors rely on EBITDA for purposes of determining the Company’s capital allocation policies. EBITDA is also the starting point for the calculation of operating cash flow for purposes of determining whether management has achieved certain performance objectives in the Company’s short-term and long-term incentive plans. |
(c) An adjustment to cost of revenue identified in the fourth quarter of 2018 of |
(d) Adjusted operating expenses is a non-GAAP measure and is presented for analytical purposes only. Management and the Board of Directors rely on adjusted operating expenses for purposes of assessing our core operating results based on expenses incurred within a period that directly drive operating income in that period. Management adjusts 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. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20200429005810/en/
952-567-0295
Al.Galgano@spok.com
Source: