Spok Reports Fourth-Quarter and Full-Year 2018 Operating Results; Solid Year-Over-Year Software Growth; Record-Low Wireless Revenue Erosion
Feb 27, 2019 4:10 PM
Board Declares Regular Quarterly Dividend
Key Fourth-Quarter and Full-Year Operating Highlights
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Software bookings in the fourth quarter increased to
$23.1 million , from$19.2 million in the prior year quarter. Fourth quarter bookings included$12.1 million of operations bookings and$11.0 million of maintenance renewals. For 2018, software bookings totaled$81.3 million , up nearly 4.6 percent from$77.7 million in 2017. Software backlog totaled$40.4 million atDecember 31, 2018 , compared to$42.3 million at the end of 2017. -
Of the
$20.2 million in software revenue for the fourth quarter,$10.2 million was operations revenue and$10.0 million was maintenance revenue, compared to$9.4 million and$9.8 million , respectively, of the$19.2 million in software revenue for the fourth quarter of 2017. - The renewal rate for software maintenance revenue in 2018 continued to exceed 99 percent.
-
The quarterly rate of paging unit erosion was 0.7 percent in the
fourth quarter of 2018, compared to 2.4 percent in the prior quarter
and 1.3 percent in the year-earlier period. Net paging unit losses
were 7,000 in the fourth quarter of 2018, down from 25,000 in the
prior quarter and 14,000 in the fourth quarter of 2017. Annual unit
erosion totaled 57,000 units, or 5.4 percent, in 2018, down from the
prior year level of unit erosion of 62,000 units. Paging units in
service at
December 31, 2018 , totaled 992,000, compared to 1,049,000 at the end of the prior year. - The quarterly rate of wireless revenue erosion was 0.7 percent in the fourth quarter of 2018, less than half of the erosion in the prior quarter and down substantially from 2.1 percent in the year-earlier quarter, while the annual rate of wireless revenue erosion in 2018 slowed to 6.8 percent versus 7.7 percent in 2017.
-
Total paging ARPU (average revenue per unit) was
$7.36 in the fourth quarter of 2018, compared to$7.46 in the year-earlier quarter and$7.40 in the prior quarter. For the year, ARPU totaled$7.39 , compared to$7.51 in 2017. -
Consolidated operating expenses (excluding depreciation, amortization
and accretion) totaled
$40.5 million in the fourth quarter of 2018, compared to$37.4 million in the year-earlier quarter. In 2018, consolidated operating expenses totaled$161.9 million , compared to$148.8 million in 2017. -
Capital expenses were
$0.8 million in the fourth quarter of 2018, compared to$2.2 million in the year-earlier quarter. For 2018, capital expenses totaled$5.9 million , compared to$9.2 million in 2017. -
The number of full-time equivalent employees at
December 31, 2018 , totaled 596, the same as year-end 2017. -
Capital returned to stockholders in 2018 totaled
$23.6 million . This came in the form of approximately$10.1 million from the regular quarterly dividend and approximately$13.5 million from share repurchases. -
The Company’s cash, cash equivalents and short-term investments
balance at
December 31, 2018 , was$87.3 , compared to$107.2 million atDecember 31, 2017 .
2018 Fourth-Quarter Results:
Consolidated
revenue for the fourth quarter of 2018 under Generally Accepted
Accounting Principles (“GAAP”) was
For the three months ended | |||||||||||||||
(Dollars in thousands) |
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Change (2) |
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Wireless revenue | |||||||||||||||
Paging revenue | $ | 21,997 | $ | 21,997 | $ | 23,624 | (6.9 | )% | |||||||
Product and other revenue | 1,094 | 1,094 | 955 |
14.6 |
% |
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Total wireless revenue | $ | 23,091 | $ | 23,091 | $ | 24,579 | (6.1 | )% | |||||||
Software revenue | |||||||||||||||
Operations revenue | $ | 10,167 | $ | 8,919 | $ | 9,372 |
(4.8 |
)% |
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Maintenance revenue | 9,998 | 10,246 | 9,819 |
4.3 |
% |
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Total software revenue | 20,165 | 19,165 | 19,191 | (0.1 | )% | ||||||||||
Total revenue | $ | 43,256 | $ | 42,256 | $ | 43,770 | (3.5 | )% | |||||||
(1) Adjusted to exclude the adoption of ASC 606. |
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GAAP net income for the fourth quarter of 2018 was
In the fourth quarter of 2018, the Company generated
For the three months ended | ||||||||||||
(Dollars in thousands) |
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Net income (loss) | $ | 189 | $ | (632 | ) | $ | (21,384 | ) | ||||
Diluted net income (loss) per share | $ | 0.01 | $ | (0.03 | ) | $ | (1.07 | ) | ||||
EBITDA | $ | 2,750 | $ | 1,928 | $ | 6,363 | ||||||
(1) Adjusted to exclude the adoption of ASC 606. |
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2018 Full-Year Results:
Consolidated
revenue for 2018 was
For the twelve months ended | ||||||||||||||
(Dollars in thousands) |
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Change(2) |
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Wireless revenue | ||||||||||||||
Paging revenue | $ | 90,570 | $ | 90,570 | $ | 97,296 | (6.9)% | |||||||
Product and other revenue | 3,707 | 3,707 | 3,892 | (4.8)% | ||||||||||
Total wireless revenue | $ | 94,277 | $ | 94,277 | $ | 101,188 | (6.8)% | |||||||
Software revenue | ||||||||||||||
Operations revenue |
$ |
36,128 |
$ | 32,982 | $ | 31,318 |
5.3 % |
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Maintenance revenue | 39,069 | 40,283 | 38,669 |
4.2 % |
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Total software revenue | 75,197 | 73,265 | 69,987 |
4.7 % |
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Total revenue | $ | 169,474 | $ | 167,542 | $ | 171,175 |
(2.1)% |
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(1) Adjusted to exclude the adoption of ASC 606. (2) As compared against results adjusted to exclude the adoption of ASC 606. |
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GAAP net loss for 2018 was
In 2018, the Company generated
For the twelve months ended | |||||||||
(Dollars in thousands) |
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Net loss | $ | (1,479) | $ | (3,122) | $ | (15,306) | |||
Net loss per common share | $ | (0.08) | $ | (0.16) | $ | (0.76) | |||
EBITDA | $ |
7,596 |
$ |
5,967 |
$ |
22,330 |
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(1) Adjusted to exclude the adoption of ASC 606. |
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Management Commentary:
“We are
encouraged with our performance in the fourth quarter of 2018 and
believe it provides a solid basis for continued improvement in 2019,”
said
In 2018, Spok returned
Kelly noted that in addition to the financial performance the Company
was able to achieve in 2018, progress was made in several other areas,
including product development, sales strategy and key strategic
partnership agreements. “Spok continues to build an industry-leading
reputation,” commented Kelly. “During the quarter, we added
approximately two dozen new customers to the Spok family. For the full
year, we added more than 70 new customers primarily in the healthcare
and government sectors, including modernizing communications in the
Business Outlook:
Commenting on the
Company’s previously provided financial guidance for 2018, Wallace
noted: “We are pleased that 2018 results were consistent with the
guidance we had provided. For the year, total revenue of
2018 Fourth-Quarter and Full-Year Call and Replay:
Spok
plans to host a conference call for investors to discuss its 2018
fourth-quarter and full-year 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, are forward-looking statements for
purposes of the safe harbor provisions under the Private Securities
Litigation Reform Act of 1995. These forward-looking statements involve
risks and uncertainties that may cause Spok’s actual results to be
materially different from the future results expressed or implied by
such forward-looking statements. Factors that could cause actual results
to differ materially from those expectations include, but are not
limited to, declining demand for paging products and services, continued
demand for our software products and services, our ability to develop
additional software solutions for our customers and manage our
development as a global organization, the ability to manage operating
expenses, particularly third party consulting services and research and
development costs, future capital needs, competitive pricing pressures,
competition from traditional paging services, other wireless
communications services and other software providers, many of which are
substantially larger and have much greater financial and human capital
resources, changes in customer purchasing priorities or capital
expenditures, government regulation of our products and services and the
healthcare and health insurance industries, reliance upon third-party
providers for certain equipment and services, unauthorized breaches or
failures in cybersecurity measures adopted by us and/or included in our
products and services, the effects of changes in accounting policies or
practices, as well as other risks described from time to time in our
periodic reports and other filings with the
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CONDENSED CONSOLIDATED STATEMENTS OF INCOME (a) | ||||||||||||||||
(Unaudited and in thousands except share, per share amounts and ARPU) | ||||||||||||||||
For the three months ended | For the twelve months ended | |||||||||||||||
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Revenue: | ||||||||||||||||
Wireless | $ | 23,091 | $ | 24,579 | $ | 94,277 | $ | 101,188 | ||||||||
Software | 20,165 | 19,191 | 75,197 | 69,987 | ||||||||||||
Total revenue | 43,256 | 43,770 | 169,474 | 171,175 | ||||||||||||
Operating expenses: | ||||||||||||||||
Cost of revenue | 8,772 | 7,122 | 32,408 | 28,418 | ||||||||||||
Research and development | 6,618 | 4,934 | 24,464 | 18,702 | ||||||||||||
Technology operations | 8,120 | 7,617 | 31,356 | 31,502 | ||||||||||||
Selling and marketing | 6,275 | 6,039 | 24,553 | 22,823 | ||||||||||||
General and administrative | 10,721 | 11,695 | 49,097 | 47,400 | ||||||||||||
Depreciation, amortization and accretion | 2,601 | 2,774 | 10,769 | 11,624 | ||||||||||||
Total operating expenses | 43,107 | 40,181 | 172,647 | 160,469 | ||||||||||||
% of total revenue | 99.7 | % | 91.8 | % | 101.9 | % | 93.7 | % | ||||||||
Operating income (loss) | 149 | 3,589 | (3,173 | ) | 10,706 | |||||||||||
% of total revenue | 0.3 | % | 8.2 | % | (1.9 | )% | 6.3 | % | ||||||||
Interest income | 628 | 229 | 1,638 | 719 | ||||||||||||
Other (expense) income | (593 | ) | (282 | ) | (650 | ) | 134 | |||||||||
Income (loss) before income taxes benefit (expense) |
184 | 3,536 | (2,185 | ) | 11,559 | |||||||||||
Income tax benefit (expense) | 5 | (24,920 | ) | 706 | (26,865 | ) | ||||||||||
Net income (loss) | $ | 189 | $ | (21,384 | ) | $ | (1,479 | ) | $ | (15,306 | ) | |||||
Basic and diluted net income (loss) per common share | $ | 0.01 | $ | (1.07 | ) | $ | (0.08 | ) | $ | (0.76 | ) | |||||
Basic weighted average common shares outstanding | 19,445,401 | 19,987,763 | 19,667,891 | 20,210,260 | ||||||||||||
Diluted weighted average common shares outstanding | 19,445,401 | 19,987,763 | 19,667,891 | 20,210,260 | ||||||||||||
Cash dividends declared per common share | 0.125 | 0.125 | 0.50 | 0.50 | ||||||||||||
Key statistics: | ||||||||||||||||
Units in service | 992 | 1,049 | 992 | 1,049 | ||||||||||||
Average revenue per unit (ARPU) | $ | 7.36 | $ | 7.46 | $ | 7.39 | $ | 7.51 | ||||||||
Bookings | $ | 23,076 | $ | 19,190 | $ | 81,268 | $ | 77,709 | ||||||||
Backlog | $ | 40,422 | $ | 42,305 | $ | 40,422 | $ | 42,305 | ||||||||
(a) Slight variations in totals are due to rounding. | ||||||||||||||||
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CONDENSED CONSOLIDATED STATEMENTS OF INCOME (a) | ||||||||||||||||||||||||||||||||
(Unaudited and in thousands except share, per share amounts and ARPU) | ||||||||||||||||||||||||||||||||
For the three months ended | ||||||||||||||||||||||||||||||||
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Revenue: | ||||||||||||||||||||||||||||||||
Wireless | $ | 23,091 | $ | 23,259 | $ | 23,658 | $ | 24,269 | $ | 24,579 | $ | 25,110 | $ | 25,639 | $ | 25,860 | ||||||||||||||||
Software | 20,165 | 19,217 | 16,970 | 18,845 | 19,191 | 18,526 | 16,686 | 15,584 | ||||||||||||||||||||||||
Total revenue | 43,256 | 42,476 | 40,628 | 43,114 | 43,770 | 43,636 | 42,325 | 41,444 | ||||||||||||||||||||||||
Operating expenses: | ||||||||||||||||||||||||||||||||
Cost of revenue (b) | 8,772 | 8,141 | 7,596 | 7,878 | 7,122 | 7,069 | 7,190 | 7,036 | ||||||||||||||||||||||||
Research and development | 6,618 | 5,934 | 6,177 | 5,735 | 4,934 | 5,001 | 4,662 | 4,105 | ||||||||||||||||||||||||
Technology operations | 8,120 | 7,787 | 7,698 | 7,750 | 7,617 | 7,875 | 7,944 | 8,066 | ||||||||||||||||||||||||
Selling and marketing | 6,275 | 5,716 | 6,093 | 6,490 | 6,039 | 5,533 | 5,329 | 5,922 | ||||||||||||||||||||||||
General and administrative | 10,721 | 13,673 | 12,741 | 11,964 | 11,695 | 12,058 | 11,939 | 11,710 | ||||||||||||||||||||||||
Depreciation, amortization and accretion | 2,601 | 2,785 | 2,669 | 2,713 | 2,774 | 2,775 | 2,851 | 3,223 | ||||||||||||||||||||||||
Total operating expenses | 43,107 | 44,036 | 42,974 | 42,530 | 40,181 | 40,311 | 39,915 | 40,062 | ||||||||||||||||||||||||
% of total revenue | 99.7 | % | 103.7 | % | 105.8 | % | 98.6 | % | 91.8 | % | 92.4 | % | 94.3 | % | 96.7 | % | ||||||||||||||||
Operating income (loss) | 149 | (1,560 | ) | (2,346 | ) | 584 | 3,589 | 3,325 | 2,410 | 1,382 | ||||||||||||||||||||||
% of total revenue | 0.3 | % | (3.7 | )% | (5.8 | )% | 1.4 | % | 8.2 | % | 7.6 | % | 5.7 | % | 3.3 | % | ||||||||||||||||
Interest income | 628 | 384 | 342 | 283 | 229 | 214 | 154 | 122 | ||||||||||||||||||||||||
Other (expense) income | (593 | ) | (110 | ) | 102 | (47 | ) | (282 | ) | 359 | 89 | (30 | ) | |||||||||||||||||||
Income (loss) before income taxes | 184 | (1,286 | ) | (1,902 | ) | 820 | 3,536 | 3,898 | 2,653 | 1,474 | ||||||||||||||||||||||
Income tax benefit (expense) | 5 | 446 | 730 | (475 | ) | (24,920 | ) | (171 | ) | (1,155 | ) | (620 | ) | |||||||||||||||||||
Net income (loss) | $ | 189 | $ | (840 | ) | $ | (1,172 | ) | $ | 345 | $ | (21,384 | ) | $ | 3,727 | $ | 1,498 | $ | 854 | |||||||||||||
Basic and diluted net (loss) income per common share | $ | 0.01 | $ | (0.04 | ) | $ | (0.06 | ) | $ | 0.02 | $ | (1.07 | ) | $ | 0.19 | $ | 0.07 | $ | 0.04 | |||||||||||||
Basic weighted average common shares outstanding | 19,445,401 | 19,456,149 | 19,750,941 | 20,027,800 | 19,987,763 | 19,977,263 | 20,353,801 | 20,530,739 | ||||||||||||||||||||||||
Diluted weighted average common shares outstanding | 19,445,401 | 19,456,149 | 19,750,941 | 20,153,291 | 19,987,763 | 20,008,321 | 20,366,102 | 20,585,542 | ||||||||||||||||||||||||
Key statistics: | ||||||||||||||||||||||||||||||||
Units in service | 992 | 999 | 1,024 | 1,030 | 1,049 | 1,063 | 1,086 | 1,091 | ||||||||||||||||||||||||
Average revenue per unit (ARPU) | $ | 7.36 | $ | 7.40 | $ | 7.41 | $ | 7.47 | $ | 7.46 | $ | 7.48 | $ | 7.52 | $ | 7.56 | ||||||||||||||||
Bookings | $ | 23,076 | $ | 21,580 | $ | 18,488 | $ | 18,124 | $ | 19,190 | $ | 18,327 | $ | 20,405 | $ | 19,788 | ||||||||||||||||
Backlog | $ | 40,422 | $ | 36,366 | $ | 36,295 | $ | 35,930 | $ | 42,305 | $ | 46,900 | $ | 43,455 | $ | 40,555 | ||||||||||||||||
(a) Slight variations in totals are due to rounding. |
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CONDENSED CONSOLIDATED BALANCE SHEETS (a) | |||||||||
(In thousands) | |||||||||
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Assets | |||||||||
Current assets: | |||||||||
Cash and cash equivalents | $ | 83,343 | $ | 103,179 | |||||
Short term investments | 3,963 | 3,978 | |||||||
Accounts receivable, net | 32,386 | 29,722 | (b) | ||||||
Prepaid expenses and other | 9,578 | 5,752 | |||||||
Inventory | 1,708 | 1,672 | |||||||
Total current assets | 130,978 | 144,303 | |||||||
Non-current assets: | |||||||||
Property and equipment, net | 10,354 | 13,399 | |||||||
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133,031 | 133,031 | |||||||
Intangible assets, net | 5,417 | 7,917 | |||||||
Deferred income tax assets | 46,484 | 47,679 | |||||||
Other non-current assets | 1,448 | 1,675 | |||||||
Total non-current assets | 196,734 | 203,701 | |||||||
Total assets | $ | 327,712 | $ | 348,004 | |||||
Liabilities and stockholders' equity | |||||||||
Current liabilities: | |||||||||
Accounts payable | $ | 2,010 | $ | 1,305 | |||||
Accrued compensation and benefits | 11,348 | 11,018 | |||||||
Accrued taxes | 1,822 | 2,547 | |||||||
Deferred revenue | 26,285 | 28,857 | (b) | ||||||
Other current liabilities | 3,483 | 4,610 | |||||||
Total current liabilities | 44,948 | 48,337 | |||||||
Non-current liabilities: | |||||||||
Deferred revenue | 476 | 1,063 | |||||||
Other long-term liabilities | 7,734 | 8,075 | |||||||
Total non-current liabilities | 8,210 | 9,138 | |||||||
Total liabilities | 53,158 | 57,475 | |||||||
Commitments and contingencies | |||||||||
Stockholders' equity: | |||||||||
Preferred stock | $ | — | $ | — | |||||
Common stock | 2 | 2 | |||||||
Additional paid-in capital | 90,559 | 99,819 | |||||||
Accumulated other comprehensive loss | (1,301 | ) | (1,088 | ) | |||||
Retained earnings | 185,294 | 191,796 | |||||||
Total stockholders' equity | 274,554 | 290,529 | |||||||
Total liabilities and stockholders' equity | $ | 327,712 |
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$ | 348,004 | ||||
(a) Slight variations in totals are due to rounding. |
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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (a) | ||||||||
(Unaudited and in thousands) | ||||||||
For the twelve months ended | ||||||||
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Cash flows provided by operating activities: | ||||||||
Net loss | $ | (1,479 | ) | $ | (15,306 | ) | ||
Adjustments to reconcile net loss to net cash provided by operating activities: | ||||||||
Depreciation, amortization and accretion | 10,769 | 11,624 | ||||||
Deferred income tax (benefit) expense | (1,692 | ) | 25,390 | |||||
Stock based compensation | 4,954 | 3,688 | ||||||
Provisions for doubtful accounts, service credits and other | 2,125 | 1,029 | ||||||
Adjustments of non-cash transaction taxes | (203 | ) | (807 | ) | ||||
Changes in assets and liabilities: | ||||||||
Accounts receivable | (915 | ) | (9,648 | ) | ||||
Prepaid expenses, inventory and other assets | (646 | ) | 244 | |||||
Accounts payable, accrued liabilities and other | (1,553 | ) | (3,278 | ) | ||||
Deferred revenue | (1,045 | ) | 2,579 | |||||
Net cash provided by operating activities | 10,315 | 15,515 | ||||||
Cash flows from investing activities: | ||||||||
Purchases of property and equipment | (5,915 | ) | (9,214 | ) | ||||
Purchase of short-term investments | (3,911 | ) | (3,957 | ) | ||||
Maturities of short-term investments | 4,000 | 4,000 | ||||||
Net cash used in investing activities | (5,826 | ) | (9,171 | ) | ||||
Cash flows from financing activities: | ||||||||
Cash distributions to stockholders | (10,064 | ) | (15,234 | ) | ||||
Purchase of common stock for tax withholding on vested equity awards | (976 | ) | — | |||||
Purchase of common stock (including commissions) | (13,483 | ) | (10,023 | ) | ||||
Proceeds from issuance of common stock under the Employee Stock Purchase Plan | 247 | 256 | ||||||
Net cash used in financing activities | (24,276 | ) | (25,001 | ) | ||||
Effect of exchange rate on cash | (49 | ) | 11 | |||||
Net decrease in cash and cash equivalents | (19,836 | ) | (18,646 | ) | ||||
Cash and cash equivalents, beginning of period | 103,179 | 121,825 | ||||||
Cash and cash equivalents, end of period | $ | 83,343 | $ | 103,179 | ||||
Supplemental disclosure: | ||||||||
Income taxes paid | $ | 1,061 | $ | 2,620 | ||||
(a) Slight variations in totals are due to rounding. | ||||||||
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CONSOLIDATED REVENUE | ||||||||||||||||||||||||||||||||
SUPPLEMENTAL INFORMATION (a) | ||||||||||||||||||||||||||||||||
(Unaudited and in thousands) | ||||||||||||||||||||||||||||||||
For the three months ended | ||||||||||||||||||||||||||||||||
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Revenue | ||||||||||||||||||||||||||||||||
Paging | $ | 21,997 | $ | 22,442 | $ | 22,824 | $ | 23,308 | $ | 23,624 | $ | 24,128 | $ | 24,572 | $ | 24,972 | ||||||||||||||||
Non-paging | 1,094 | 817 | 834 | 961 | 955 | 982 | 1,067 | 888 | ||||||||||||||||||||||||
Total wireless revenue | $ | 23,091 | $ | 23,259 | $ | 23,658 | $ | 24,269 | $ | 24,579 | $ | 25,110 | $ | 25,639 | $ | 25,860 | ||||||||||||||||
License | 3,496 | 3,175 | 1,993 | 4,376 | 2,990 | 2,572 | 2,264 | 1,714 | ||||||||||||||||||||||||
Services | 5,103 | 4,555 | 4,363 | 4,071 | 5,437 | 5,189 | 3,650 | 3,354 | ||||||||||||||||||||||||
Equipment | 1,568 | 1,296 | 1,107 | 1,024 | 945 | 1,102 | 1,127 | 973 | ||||||||||||||||||||||||
Operations revenue | $ | 10,167 | $ | 9,026 | $ | 7,463 | $ | 9,471 | $ | 9,372 | $ | 8,863 | $ | 7,041 | $ | 6,041 | ||||||||||||||||
Maintenance revenue | $ | 9,998 | $ | 10,191 | $ | 9,507 | $ | 9,374 | $ | 9,819 | $ | 9,663 | $ | 9,645 | $ | 9,543 | ||||||||||||||||
Total software revenue | $ | 20,165 | $ | 19,217 | $ | 16,970 | $ | 18,845 | $ | 19,191 | $ | 18,526 | $ | 16,686 | $ | 15,584 | ||||||||||||||||
Total revenue | $ | 43,256 | $ | 42,476 | $ | 40,628 | $ | 43,114 | $ | 43,770 | $ | 43,636 | $ | 42,325 | $ | 41,444 | ||||||||||||||||
(a) Slight variations in totals are due to rounding. | ||||||||||||||||||||||||||||||||
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CONSOLIDATED OPERATING EXPENSES | ||||||||||||||||||||||||||||||||
SUPPLEMENTAL INFORMATION (a) | ||||||||||||||||||||||||||||||||
(Unaudited and in thousands) | ||||||||||||||||||||||||||||||||
For the three months ended | ||||||||||||||||||||||||||||||||
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Cost of revenue | ||||||||||||||||||||||||||||||||
Payroll and related | $ | 4,868 | $ | 4,923 | $ | 4,853 | $ | 4,874 | $ | 4,374 | $ | 4,330 | $ | 4,613 | $ | 4,490 | ||||||||||||||||
Cost of sales | 3,349 | 2,623 | 2,119 | 2,475 | 1,990 | 2,228 | 1,904 | 1,995 | ||||||||||||||||||||||||
Stock based compensation | 44 | 75 | 75 | 55 | 58 | 4 | 60 | 58 | ||||||||||||||||||||||||
Other | 511 | 520 | 549 | 474 | 700 | 507 | 613 | 493 | ||||||||||||||||||||||||
Total cost of revenue (b) | 8,772 | 8,141 | 7,596 | 7,878 | 7,122 | 7,069 | 7,190 | 7,036 | ||||||||||||||||||||||||
Research and development | ||||||||||||||||||||||||||||||||
Payroll and related | 4,350 | 4,709 | 4,506 | 4,002 | 3,521 | 4,005 | 3,807 | 3,405 | ||||||||||||||||||||||||
Outside services | 2,115 | 1,040 | 1,481 | 1,513 | 1,361 | 849 | 659 | 516 | ||||||||||||||||||||||||
Stock based compensation | 5 | 71 | 90 | 71 | (71 | ) | 43 | 65 | 55 | |||||||||||||||||||||||
Other | 148 | 114 | 100 | 149 | 123 | 104 | 131 | 129 | ||||||||||||||||||||||||
Total research and development | 6,618 | 5,934 | 6,177 | 5,735 | 4,934 | 5,001 | 4,662 | 4,105 | ||||||||||||||||||||||||
Technology operations | ||||||||||||||||||||||||||||||||
Payroll and related | 2,616 | 2,866 | 2,618 | 2,693 | 2,413 | 2,582 | 2,607 | 2,665 | ||||||||||||||||||||||||
Site rent | 3,432 | 3,482 | 3,538 | 3,496 | 3,471 | 3,534 | 3,604 | 3,620 | ||||||||||||||||||||||||
Telecommunications | 1,021 | 950 | 935 | 898 | 979 | 1,060 | 1,001 | 1,081 | ||||||||||||||||||||||||
Stock based compensation | 24 | 24 | 24 | 24 | 20 | 20 | 20 | 20 | ||||||||||||||||||||||||
Other | 1,027 | 465 | 583 | 639 | 734 | 679 | 712 | 680 | ||||||||||||||||||||||||
Total technology operations | 8,120 | 7,787 | 7,698 | 7,750 | 7,617 | 7,875 | 7,944 | 8,066 | ||||||||||||||||||||||||
Selling and marketing | ||||||||||||||||||||||||||||||||
Payroll and related | 3,047 | 3,401 | 3,311 | 3,294 | 2,573 | 3,113 | 3,039 | 3,071 | ||||||||||||||||||||||||
Commissions | 1,759 | 1,225 | 1,397 | 1,774 | 1,634 | 1,234 | 1,121 | 1,202 | ||||||||||||||||||||||||
Stock based compensation | 99 | 135 | 135 | 135 | 93 | 84 | 99 | 101 | ||||||||||||||||||||||||
Advertising and events | 1,236 | 857 | 996 | 1,158 | 1,481 | 952 | 840 | 1,281 | ||||||||||||||||||||||||
Other | 134 | 98 | 254 | 129 | 258 | 150 | 230 | 267 | ||||||||||||||||||||||||
Total selling and marketing | 6,275 | 5,716 | 6,093 | 6,490 | 6,039 | 5,533 | 5,329 | 5,922 | ||||||||||||||||||||||||
General and administrative | ||||||||||||||||||||||||||||||||
Payroll and related | 4,087 | 4,834 | 4,340 | 4,416 | 3,649 | 4,569 | 4,420 | 4,439 | ||||||||||||||||||||||||
Stock based compensation | 860 | 1,118 | 943 | 949 | 774 | 711 | 755 | 722 | ||||||||||||||||||||||||
Bad debt | 303 | 513 | 279 | 528 | 143 | 184 | 107 | 94 | ||||||||||||||||||||||||
Facility rent and office costs | 1,573 | 1,235 | 1,743 | 1,941 | 1,865 | 2,013 | 1,995 | 1,838 | ||||||||||||||||||||||||
Outside services | 2,561 | 3,554 | 3,023 | 2,122 | 2,924 | 2,351 | 2,507 | 2,627 | ||||||||||||||||||||||||
Taxes, licenses and permits | 111 | 1,081 | 1,024 | 1,080 | 1,120 | 1,077 | 1,034 | 989 | ||||||||||||||||||||||||
Other | 1,226 | 1,338 | 1,389 | 928 | 1,220 | 1,153 | 1,121 | 1,001 | ||||||||||||||||||||||||
Total general and administrative | 10,721 | 13,673 | 12,741 | 11,964 | 11,695 | 12,058 | 11,939 | 11,710 | ||||||||||||||||||||||||
Depreciation, amortization and accretion | 2,601 | 2,785 | 2,669 | 2,713 | 2,774 | 2,775 | 2,851 | 3,223 | ||||||||||||||||||||||||
Operating expenses | $ | 43,107 | $ | 44,036 | $ | 42,974 | $ | 42,530 | $ | 40,181 | $ | 40,311 | $ | 39,915 | $ | 40,062 | ||||||||||||||||
Capital expenditures | $ | 830 | $ | 1,630 | $ | 2,299 | $ | 1,164 | $ | 2,179 | $ | 1,816 | $ | 2,353 | $ | 2,851 | ||||||||||||||||
(a) Slight variations in totals are due to rounding. |
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UNITS IN SERVICE ACTIVITY, MARKET SEGMENT, CHURN | ||||||||||||||||||||||||||||||||
AND AVERAGE REVENUE PER UNIT (ARPU) (a) | ||||||||||||||||||||||||||||||||
(Unaudited and in thousands) | ||||||||||||||||||||||||||||||||
For the three months ended | ||||||||||||||||||||||||||||||||
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Paging units in service |
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Beginning units in service (000's) | 999 | 1,024 | 1,030 | 1,049 | 1,063 | 1,086 | 1,091 | 1,111 | ||||||||||||||||||||||||
Gross placements | 30 | 31 | 35 | 25 | 26 | 30 | 42 | 28 | ||||||||||||||||||||||||
Gross disconnects | (37 | ) | (56 | ) | (41 | ) | (44 | ) | (40 | ) | (53 | ) | (47 | ) | (48 | ) | ||||||||||||||||
Net change | (7 | ) | (25 | ) | (6 | ) | (19 | ) | (14 | ) | (23 | ) | (5 | ) | (20 | ) | ||||||||||||||||
Ending units in service | 992 | 999 | 1,024 | 1,030 | 1,049 | 1,063 | 1,086 | 1,091 | ||||||||||||||||||||||||
End of period units in service % of total (b) | ||||||||||||||||||||||||||||||||
Healthcare | 81.4 | % | 81.7 | % | 81.5 | % | 81.1 | % | 80.7 | % | 80.4 | % | 80.4 | % | 79.7 | % | ||||||||||||||||
Government | 5.8 | % | 5.8 | % | 5.7 | % | 5.9 | % | 6.0 | % | 6.1 | % | 6.3 | % | 6.4 | % | ||||||||||||||||
Large enterprise | 5.9 | % | 6.0 | % | 6.0 | % | 6.0 | % | 6.0 | % | 6.0 | % | 6.1 | % | 6.1 | % | ||||||||||||||||
Other (b) |
6.9 | % | 6.5 | % | 6.8 | % | 7.0 | % | 7.2 | % | 7.4 | % | 7.3 | % | 7.7 | % | ||||||||||||||||
Total | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | ||||||||||||||||
Account size ending units in service (000's) | ||||||||||||||||||||||||||||||||
1 to 100 units | 78 | 81 | 85 | 88 | 92 | 95 | 98 | 102 | ||||||||||||||||||||||||
101 to 1,000 units | 190 | 192 | 197 | 198 | 198 | 201 | 204 | 214 | ||||||||||||||||||||||||
>1,000 units | 724 | 726 | 742 | 744 | 759 | 767 | 784 | 775 | ||||||||||||||||||||||||
Total | 992 | 999 | 1,024 | 1,030 | 1,049 | 1,063 | 1,086 | 1,091 | ||||||||||||||||||||||||
Account size net loss rate (c) |
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1 to 100 units | (1.7 | )% | (4.3 | )% | (3.8 | )% | (4.7 | )% | (3.6 | )% | (2.8 | )% | (3.7 | )% | (3.4 | )% | ||||||||||||||||
101 to 1,000 units | — | % | (2.7 | )% | (0.6 | )% | (10.0 | )% | (1.1 | )% | (1.8 | )% | (4.5 | )% | (1.3 | )% | ||||||||||||||||
>1,000 units | (0.1 | )% | (2.2 | )% | (0.2 | )% | (1.9 | )% | (1.1 | )% | (2.2 | )% | 1.1 | % | (1.7 | )% | ||||||||||||||||
Total | (0.2 | )% | (2.5 | )% | (0.6 | )% | (1.8 | )% | (1.3 | )% | (2.2 | )% | (0.4 | )% | (1.8 | )% | ||||||||||||||||
Account size ARPU | ||||||||||||||||||||||||||||||||
1 to 100 units | $ | 11.61 | $ | 11.33 | $ | 12.04 | $ | 12.13 | $ | 12.11 | $ | 12.23 | $ | 12.16 | $ | 12.22 | ||||||||||||||||
101 to 1,000 units | 8.28 | 8.19 | 8.34 | 8.47 | 8.58 | 8.62 | 8.61 | 8.66 | ||||||||||||||||||||||||
>1,000 units | 6.69 | 6.74 | 6.62 | 6.65 | 6.59 | 6.59 | 6.64 | 6.64 | ||||||||||||||||||||||||
Total | $ | 7.38 | $ | 7.40 | $ | 7.41 | $ | 7.47 | $ | 7.46 | $ | 7.48 | $ | 7.52 | $ | 7.56 | ||||||||||||||||
(a) Slight variations in totals are due to rounding. |
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RECONCILIATION FROM NET (LOSS) INCOME TO EBITDA (a) | ||||||||||||||||||||||||||||||||
(Unaudited and in thousands) | ||||||||||||||||||||||||||||||||
For the three months ended | ||||||||||||||||||||||||||||||||
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Reconciliation of net (loss) income to EBITDA (b): | ||||||||||||||||||||||||||||||||
Net income (loss) (d) | $ | 189 | $ | (840 | ) | $ | (1,172 | ) | $ | 345 | $ | (21,384 | ) | $ | 3,727 | $ | 1,498 | $ | 854 | |||||||||||||
(Less) plus: (Benefit from) provision for income taxes | (5 | ) | (446 | ) | (730 | ) | 475 | 24,920 | 171 | 1,155 | 620 | |||||||||||||||||||||
Plus (less): Other expense (income) | 593 | 110 | (102 | ) | 47 | 282 | (359 | ) | (89 | ) | 30 | |||||||||||||||||||||
Less: Interest income | (628 | ) | (384 | ) | (342 | ) | (283 | ) | (229 | ) | (214 | ) | (154 | ) | (122 | ) | ||||||||||||||||
Operating income (loss) | 149 | (1,560 | ) | (2,346 | ) | 584 | 3,589 | 3,325 | 2,410 | 1,382 | ||||||||||||||||||||||
Plus: depreciation, amortization and accretion | 2,601 | 2,785 | 2,669 | 2,713 | 2,774 | 2,775 | 2,851 | 3,223 | ||||||||||||||||||||||||
EBITDA (as defined by the Company) | $ | 2,750 | $ | 1,225 | $ | 323 | $ | 3,297 | $ | 6,363 | $ | 6,100 | $ | 5,261 | $ | 4,605 | ||||||||||||||||
For the twelve months ended | ||||||||||||||||||||||||||||||||
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Reconciliation of net loss to EBITDA (b): | ||||||||||||||||||||||||||||||||
Net loss | $ | (1,479 | ) | $ | (15,306 | ) | ||||||||||||||||||||||||||
(Less) plus: (Benefit from) provision for income taxes | (706 | ) | 26,865 | |||||||||||||||||||||||||||||
Plus (less): Other income (expense) | 650 | (134 | ) | |||||||||||||||||||||||||||||
Less: Interest income | (1,638 | ) | (719 | ) | ||||||||||||||||||||||||||||
Operating (loss) income | (3,173 | ) | 10,706 | |||||||||||||||||||||||||||||
Plus: depreciation, amortization and accretion | 10,769 | 11,624 | ||||||||||||||||||||||||||||||
EBITDA (as defined by the Company) | $ | 7,596 | $ | 22,330 | ||||||||||||||||||||||||||||
For the three months ended | For the twelve months ended | |||||||||||||||||||||||||||||||
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Reconciliation of EBITDA to EBITDA adjusted to exclude the adoption of ASC 606 (b): | ||||||||||||||||||||||||||||||||
EBITDA (as defined by the Company) | $ | 2,750 | $ | 7,596 | ||||||||||||||||||||||||||||
(Less) plus: Software revenue | (1,000 | ) | (1,932 | ) | ||||||||||||||||||||||||||||
(Less) plus: Selling and marketing | 178 | 303 | ||||||||||||||||||||||||||||||
Adjusted EBITDA (c) | $ | 1,928 | $ | 5,967 | ||||||||||||||||||||||||||||
(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) Adjusted EBITDA represents EBITDA adjusted to exclude the adoption of ASC 606. Adjusted EBITDA is used by the Company for purposes of comparison to prior period results during its year of transition (2018) under the modified retrospective approach. (d) An adjustment to cost of revenue identified in the fourth quarter of 2018 of |
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2019 FINANCIAL GUIDANCE | ||||||
(Unaudited and in millions) | ||||||
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From | To | |||||
Revenues | ||||||
Wireless | 81 | 89 | ||||
Software | 75 | 85 | ||||
156.0 | 174.0 | |||||
Operating Expenses (a) | 155.0 | 165.0 | ||||
Capital Expenses | 3.0 | 7.0 | ||||
(a) Operating expenses exclude depreciation, amortization and accretion. | ||||||
View source version on businesswire.com: https://www.businesswire.com/news/home/20190227005930/en/
952-567-0295
Al.Galgano@spok.com
Source: