Spok Reports Third Quarter Operating Results; Board Declares Regular Quarterly Dividend
Oct 29, 2014 4:30 PM
Consolidated Revenue Increases;
Consolidated revenue increased to
Third quarter EBITDA (earnings before interest, taxes, depreciation,
amortization and accretion) totaled
Net income for the third quarter was
Other key results and highlights for the third quarter included:
-
Bookings for the third quarter increased to
$20.4 million from$17.3 million in the year-earlier quarter, reaching a record high for the second consecutive quarter. -
Backlog totaled
$42.1 million atSeptember 30, 2014 , compared to$40.2 million atJune 30, 2014 . -
Of the
$16.9 million in third quarter software revenue,$9.1 million was operations revenue and$7.8 million was maintenance revenue, compared to$5.6 million and$7.0 million , respectively, of the$12.6 million in software revenue for the third quarter of 2013. - The renewal rate for software maintenance in the third quarter was 99.6 percent.
-
The quarterly rate of unit erosion improved to 1.9 percent versus 2.6
percent a year earlier, and was the Company’s lowest net paging unit
loss rate in more than a decade. Net paging unit losses were 25,000 in
the third quarter versus 37,000 in the third quarter of 2013. Units in
service at
September 30, 2014 totaled 1,274,000, compared to 1,408,000 a year earlier. - The quarterly rate of wireless revenue erosion was 2.0 percent, compared to 1.9 percent in the third quarter of 2013, and 2.4 percent in the second quarter of 2014.
-
Total paging ARPU (average revenue per unit) was
$7.97 in the third quarter, compared to$8.22 in the year-earlier quarter and$7.98 in the prior quarter. -
Consolidated operating expenses (excluding depreciation, amortization
and accretion) totaled
$37.5 million in the third quarter, compared to$36.3 million in the year-earlier quarter. -
Capital expenses were
$1.3 million , compared to$2.5 million in the third quarter of 2013. -
The number of full-time equivalent employees at
September 30, 2014 totaled 606, compared to 652 atSeptember 30, 2013 . -
Dividends paid to stockholders totaled
$2.7 million in the third quarter. -
The Company’s cash balance at
September 30, 2014 was$106.9 million .
“We achieved or exceeded our expectations on virtually all key operating
measures for the quarter,” said
Commenting on Software revenue, Kelly said: “Compared to the third
quarter of 2013, operations revenue grew 63.3 percent, maintenance
revenue increased 11.6 percent, and total Software revenue of
Kelly said record high bookings for the quarter included sales to both new and existing customers, with many existing customers upgrading applications as well as adding products to expand their portfolio of communications solutions. “Demand remained strong for upgrades and installations of call center solutions, along with healthcare applications to increase patient safety, improve nursing workflows and enhance organizational efficiencies. Customer demand also remained strong for such software solutions as critical smartphone communications, secure texting, emergency management, and clinical alerting. Our public safety sector also grew substantially during the quarter as our software sales team added 28 new accounts.”
Kelly added: “Software sales continued to be strongest in
The Company’s wireless sales team also outperformed expectations for the
quarter. “Wireless revenue came in ahead of plan due to higher than
expected units in service combined with the lowest quarterly rate of
pager churn in years,” Kelly said. “In addition, we completed a sizable
transaction with a cellular provider during the quarter. Overall,
wireless sales efforts continued to focus primarily on the core market
segments of Healthcare, Government and Large Enterprise. These core
segments represented approximately 93.3 percent of our direct subscriber
base and 89.9 percent of our direct paging revenue at the end of the
quarter. Healthcare comprised 76.9 percent of our direct subscriber base
at
Kelly also noted that Spok’s software and wireless sales teams continued
to collaborate on many sales initiatives during the quarter, resulting
in 17 new accounts which represented more than
Commenting on the Company’s previously announced name change, Kelly
added: “Since changing our corporate name to
Endsley said the Company is maintaining its previously announced
financial guidance for 2014, which projects total revenue to range from
The Company announced that its Board of Directors has approved extension
of the Company’s stock repurchase program from
In addition, the Company will host an Investor Meeting (”Analyst Day”)
for financial analysts and other investors on
About
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, future capital needs, competitive pricing pressures,
competition from both traditional paging services and other wireless
communications services, competition from other software providers,
government regulation, reliance upon third-party providers for certain
equipment and services, 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) |
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For the three months ended | For the nine months ended | |||||||||||||||||||||
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Revenue: | ||||||||||||||||||||||
Wireless | $ | 32,855 | $ | 37,067 | $ | 100,724 | $ | 113,617 | ||||||||||||||
Software | 16,936 | 12,602 | 48,280 | 41,450 | ||||||||||||||||||
Total revenue | 49,791 | 49,669 | 149,004 | 155,067 | ||||||||||||||||||
Operating expenses: | ||||||||||||||||||||||
Cost of revenue | 8,000 | 6,787 | 21,985 | 20,415 | ||||||||||||||||||
Service, rental and maintenance | 10,988 | 11,820 | 34,200 | 36,029 | ||||||||||||||||||
Selling and marketing | 7,072 | 6,388 | 22,098 | 19,320 | ||||||||||||||||||
General and administrative | 10,866 | 11,282 | 33,991 | 34,635 | ||||||||||||||||||
Severance and restructuring | 545 | — | 569 | 2 | ||||||||||||||||||
Depreciation, amortization and accretion | 4,247 | 3,858 | 12,628 | 11,487 | ||||||||||||||||||
Total operating expenses | 41,718 | 40,135 | 125,471 | 121,888 | ||||||||||||||||||
% of total revenue | 83.8 | % | 80.8 | % | 84.2 | % | 78.6 | % | ||||||||||||||
Operating income | 8,073 | 9,534 | 23,533 | 33,179 | ||||||||||||||||||
% of total revenue | 16.2 | % | 19.2 | % | 15.8 | % | 21.4 | % | ||||||||||||||
Interest expense, net | (63 | ) | (68 | ) | (194 | ) | (196 | ) | ||||||||||||||
Other (expense) income, net | (2 | ) | 84 | (180 | ) | 90 | ||||||||||||||||
Income before income tax expense | 8,008 | 9,550 | 23,159 | 33,073 | ||||||||||||||||||
Income tax expense | (3,356 | ) | (3,788 | ) | (9,326 | ) | (13,558 | ) | ||||||||||||||
Net income | $ | 4,652 | $ | 5,762 | $ | 13,833 | $ | 19,515 | ||||||||||||||
Basic net income per common share | $ | 0.21 | $ | 0.27 | $ | 0.64 | $ | 0.90 | ||||||||||||||
Diluted net income per common share | $ | 0.21 | $ | 0.26 | $ | 0.63 | $ | 0.89 | ||||||||||||||
Basic weighted average common shares outstanding | 21,651,347 | 21,629,289 | 21,643,951 | 21,653,692 | ||||||||||||||||||
Diluted weighted average common shares outstanding | 22,135,554 | 21,919,238 | 22,089,892 | 21,916,063 | ||||||||||||||||||
Reconciliation of operating income to EBITDA (b): | ||||||||||||||||||||||
Operating income | $ | 8,073 | $ | 9,534 | $ | 23,533 | $ | 33,179 | ||||||||||||||
Add back: depreciation, amortization and accretion | 4,247 | 3,858 | 12,628 | 11,487 | ||||||||||||||||||
EBITDA | $ | 12,320 | $ | 13,392 | $ | 36,161 | $ | 44,666 | ||||||||||||||
% of total revenue | 24.7 | % | 27.0 | % | 24.3 | % | 28.8 | % | ||||||||||||||
Key statistics: | ||||||||||||||||||||||
Units in service | 1,274 | 1,408 | 1,274 | 1,408 | ||||||||||||||||||
Average revenue per unit (ARPU) | $ | 7.97 | $ | 8.22 | $ | 7.98 | $ | 8.23 | ||||||||||||||
Bookings | $ | 20,362 | $ | 17,302 | $ | 56,242 | $ | 47,181 | ||||||||||||||
Backlog | $ | 42,117 | $ | 43,831 | $ | 42,117 | $ | 43,831 | ||||||||||||||
(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. |
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CONDENSED CONSOLIDATED STATEMENTS OF INCOME (a) | ||||||||||||||||||||||||||||||||||||
(Unaudited and in thousands except share, per share amounts and ARPU) |
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For the three months ended | ||||||||||||||||||||||||||||||||||||
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Revenue: | ||||||||||||||||||||||||||||||||||||
Wireless | $ | 32,855 | $ | 33,518 | $ | 34,351 | $ | 35,831 | $ | 37,067 | $ | 37,771 | $ | 38,779 | ||||||||||||||||||||||
Software | 16,936 | 15,576 | 15,768 | 18,854 | 12,602 | 14,497 | 14,351 | |||||||||||||||||||||||||||||
Total revenue | 49,791 | 49,094 | 50,119 | 54,685 | 49,669 | 52,268 | 53,130 | |||||||||||||||||||||||||||||
Operating expenses: | ||||||||||||||||||||||||||||||||||||
Cost of revenue | 8,000 | 7,180 | 6,805 | 7,500 | 6,787 | 6,961 | 6,667 | |||||||||||||||||||||||||||||
Service, rental and maintenance | 10,988 | 11,420 | 11,792 | 11,442 | 11,820 | 12,018 | 12,191 | |||||||||||||||||||||||||||||
Selling and marketing | 7,072 | 7,780 | 7,246 | 7,297 | 6,388 | 6,538 | 6,394 | |||||||||||||||||||||||||||||
General and administrative | 10,866 | 10,990 | 12,135 | 11,470 | 11,282 | 11,022 | 12,331 | |||||||||||||||||||||||||||||
Severance and restructuring | 545 | 4 | 20 | 981 | — | 2 | — | |||||||||||||||||||||||||||||
Depreciation, amortization and accretion | 4,247 | 4,352 | 4,029 | 3,680 | 3,858 | 3,822 | 3,807 | |||||||||||||||||||||||||||||
Total operating expenses | 41,718 | 41,726 | 42,027 | 42,370 | 40,135 | 40,363 | 41,390 | |||||||||||||||||||||||||||||
% of total revenue | 83.8 | % | 85.0 | % | 83.9 | % | 77.5 | % | 80.8 | % | 77.2 | % | 77.9 | % | ||||||||||||||||||||||
Operating income | 8,073 | 7,368 | 8,092 | 12,315 | 9,534 | 11,905 | 11,740 | |||||||||||||||||||||||||||||
% of total revenue | 16.2 | % | 15.0 | % | 16.1 | % | 22.5 | % | 19.2 | % | 22.8 | % | 22.1 | % | ||||||||||||||||||||||
Interest expense, net | (63 | ) | (64 | ) | (67 | ) | (64 | ) | (68 | ) | (64 | ) | (64 | ) | ||||||||||||||||||||||
Other (expense) income, net | (2 | ) | (194 | ) | 16 | 15 | 84 | (75 | ) | 81 | ||||||||||||||||||||||||||
Income before income tax expense | 8,008 | 7,110 | 8,041 | 12,266 | 9,550 | 11,766 | 11,757 | |||||||||||||||||||||||||||||
Income tax expense | (3,356 | ) | (2,819 | ) | (3,151 | ) | (4,251 | ) | (3,788 | ) | (4,938 | ) | (4,832 | ) | ||||||||||||||||||||||
Net income | $ | 4,652 | $ | 4,291 | $ | 4,890 | $ | 8,015 | $ | 5,762 | $ | 6,828 | $ | 6,925 | ||||||||||||||||||||||
Basic net income per common share | $ | 0.21 | $ | 0.20 | $ | 0.23 | $ | 0.37 | $ | 0.27 | $ | 0.32 | $ | 0.32 | ||||||||||||||||||||||
Diluted net income per common share | $ | 0.21 | $ | 0.19 | $ | 0.22 | $ | 0.36 | $ | 0.26 | $ | 0.31 | $ | 0.32 | ||||||||||||||||||||||
Basic weighted average common shares outstanding | 21,651,347 | 21,642,163 | 21,638,198 | 21,633,706 | 21,629,289 | 21,644,281 | 21,688,153 | |||||||||||||||||||||||||||||
Diluted weighted average common shares outstanding | 22,135,554 | 22,099,791 | 22,037,796 | 21,969,756 | 21,919,238 | 21,827,149 | 21,904,862 | |||||||||||||||||||||||||||||
Reconciliation of operating income to EBITDA (b): | ||||||||||||||||||||||||||||||||||||
Operating income | $ | 8,073 | $ | 7,368 | $ | 8,092 | $ | 12,315 | $ | 9,534 | $ | 11,905 | $ | 11,740 | ||||||||||||||||||||||
Add back: depreciation, amortization and accretion | 4,247 | 4,352 | 4,029 | 3,680 | 3,858 | 3,822 | 3,807 | |||||||||||||||||||||||||||||
EBITDA | $ | 12,320 | $ | 11,720 | $ | 12,121 | $ | 15,995 | $ | 13,392 | $ | 15,727 | $ | 15,547 | ||||||||||||||||||||||
% of total revenue | 24.7 | % | 23.9 | % | 24.2 | % | 29.2 | % | 27.0 | % | 30.1 | % | 29.3 | % | ||||||||||||||||||||||
Key statistics: | ||||||||||||||||||||||||||||||||||||
Units in service | 1,274 | 1,299 | 1,327 | 1,376 | 1,408 | 1,445 | 1,480 | |||||||||||||||||||||||||||||
Average revenue per unit (ARPU) | $ | 7.97 | $ | 7.98 | $ | 8.11 | $ | 8.15 | $ | 8.22 | $ | 8.22 | $ | 8.25 | ||||||||||||||||||||||
Bookings | $ | 20,362 | $ | 18,959 | $ | 16,921 | $ | 16,271 | $ | 17,302 | $ | 15,626 | $ | 14,253 | ||||||||||||||||||||||
Backlog | $ | 42,117 | $ | 40,182 | $ | 41,396 | $ | 40,211 | $ | 43,831 | $ | 39,576 | $ | 40,183 | ||||||||||||||||||||||
(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. | ||||||||||||||||||||||||||||||||||||
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CONDENSED CONSOLIDATED BALANCE SHEETS (a) | ||||||||||
(In thousands) |
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(Unaudited) | ||||||||||
Assets | ||||||||||
Current assets: | ||||||||||
Cash and cash equivalents | $ | 106,940 | $ | 89,075 | ||||||
Accounts receivable, net | 21,823 | 18,084 | ||||||||
Prepaid expenses and other | 7,518 | 7,399 | ||||||||
Inventory | 2,676 | 2,221 | ||||||||
Deferred income tax assets, net | 3,545 | 3,389 | ||||||||
Total current assets | 142,502 | 120,168 | ||||||||
Property and equipment, net | 19,703 | 21,122 | ||||||||
Goodwill | 133,031 | 133,031 | ||||||||
Other intangible assets, net | 21,201 | 25,368 | ||||||||
Deferred income tax assets, net | 17,517 | 25,494 | ||||||||
Other assets | 1,219 | 1,715 | ||||||||
Total assets | $ | 335,173 | $ | 326,898 | ||||||
Liabilities and stockholders' equity | ||||||||||
Current liabilities: | ||||||||||
Accounts payable and accrued liabilities | $ | 11,163 | $ | 9,885 | ||||||
Accrued compensation and benefits | 11,258 | 13,919 | ||||||||
Deferred revenue | 24,507 | 23,023 | ||||||||
Total current liabilities | 46,928 | 46,827 | ||||||||
Deferred revenue | 642 | 862 | ||||||||
Other long-term liabilities | 9,321 | 9,259 | ||||||||
Total liabilities | 56,891 | 56,948 | ||||||||
Commitments and contingencies | ||||||||||
Stockholders' equity: | ||||||||||
Preferred stock | — | — | ||||||||
Common stock | 2 | 2 | ||||||||
Additional paid-in capital | 130,040 | 127,264 | ||||||||
Retained earnings | 148,240 | 142,684 | ||||||||
Total stockholders' equity | 278,282 | 269,950 | ||||||||
Total liabilities and stockholders' equity | $ | 335,173 | $ | 326,898 | ||||||
(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 nine months ended | |||||||||||
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Cash flows from operating activities: | |||||||||||
Net income | $ | 13,833 | $ | 19,515 | |||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
Depreciation, amortization and accretion | 12,628 | 11,487 | |||||||||
Amortization of deferred financing costs | 194 | 194 | |||||||||
Deferred income tax expense | 7,726 | 12,226 | |||||||||
Amortization of stock based compensation | 2,816 | 2,200 | |||||||||
Provisions for doubtful accounts, service credits and other | 875 | 1,337 | |||||||||
Adjustments of non-cash transaction taxes | (259 | ) | (354 | ) | |||||||
(Gain) Loss on disposals of property and equipment | (2 | ) | 172 | ||||||||
Changes in assets and liabilities: | |||||||||||
Accounts receivable | (4,615 | ) | 3,129 | ||||||||
Prepaid expenses and other assets | (240 | ) | (285 | ) | |||||||
Accounts payable, accrued liabilities and accrued compensation and benefits | (1,968 | ) | (8,025 | ) | |||||||
Customer deposits and deferred revenue | 1,264 | (2,292 | ) | ||||||||
Net cash provided by operating activities | 32,252 | 39,304 | |||||||||
Cash flows from investing activities: | |||||||||||
Purchases of property and equipment | (6,327 | ) | (7,772 | ) | |||||||
Proceeds from disposals of property and equipment | 63 | 10 | |||||||||
Net cash used in investing activities | (6,264 | ) | (7,762 | ) | |||||||
Cash flows from financing activities: | |||||||||||
Cash dividends to stockholders | (8,123 | ) | (9,606 | ) | |||||||
Net cash used in financing activities | (8,123 | ) | (9,606 | ) | |||||||
Net increase in cash and cash equivalents | 17,865 | 21,936 | |||||||||
Cash and cash equivalents, beginning of period | 89,075 | 61,046 | |||||||||
Cash and cash equivalents, end of period | $ | 106,940 | $ | 82,982 | |||||||
Supplemental disclosure: | |||||||||||
Interest paid | $ | 7 | $ | 9 | |||||||
Income taxes paid | $ | 1,327 | $ | 926 | |||||||
(a) Slight variations in totals are due to rounding. | |||||||||||
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CONSOLIDATED OPERATING EXPENSES | |||||||||||||||||||||||||||||||
SUPPLEMENTAL INFORMATION (a) | |||||||||||||||||||||||||||||||
(Unaudited and in thousands) |
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For the three months ended | |||||||||||||||||||||||||||||||
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Cost of revenue | |||||||||||||||||||||||||||||||
Payroll and related | $ | 3,743 | $ | 3,827 | $ | 3,959 | $ | 3,609 | $ | 3,744 | $ | 3,743 | $ | 3,709 | |||||||||||||||||
Cost of sales | 3,098 | 2,232 | 1,917 | 2,726 | 1,992 | 2,133 | 1,890 | ||||||||||||||||||||||||
Stock based compensation | 108 | 81 | 81 | 74 | 64 | 49 | 49 | ||||||||||||||||||||||||
Other | 1,051 | 1,040 | 848 | 1,091 | 987 | 1,036 | 1,019 | ||||||||||||||||||||||||
Total cost of revenue | 8,000 | 7,180 | 6,805 | 7,500 | 6,787 | 6,961 | 6,667 | ||||||||||||||||||||||||
Service, rental and maintenance | |||||||||||||||||||||||||||||||
Site rent | 3,914 | 3,981 | 4,015 | 3,972 | 4,142 | 4,237 | 4,235 | ||||||||||||||||||||||||
Telecommunications | 1,455 | 1,669 | 1,736 | 1,751 | 1,832 | 1,885 | 1,889 | ||||||||||||||||||||||||
Payroll and related | 4,106 | 4,434 | 4,594 | 4,296 | 4,577 | 4,589 | 4,698 | ||||||||||||||||||||||||
Stock based compensation | 56 | (17 | ) | 39 | 32 | 59 | 20 | 20 | |||||||||||||||||||||||
Other | 1,457 | 1,353 | 1,408 | 1,391 | 1,210 | 1,287 | 1,349 | ||||||||||||||||||||||||
Total service, rental and maintenance | 10,988 | 11,420 | 11,792 | 11,442 | 11,820 | 12,018 | 12,191 | ||||||||||||||||||||||||
Selling and marketing | |||||||||||||||||||||||||||||||
Payroll and related | 3,859 | 4,099 | 4,098 | 3,717 | 3,917 | 3,919 | 3,840 | ||||||||||||||||||||||||
Commissions | 1,949 | 2,087 | 1,952 | 2,162 | 1,310 | 1,519 | 1,387 | ||||||||||||||||||||||||
Stock based compensation | 151 | 131 | 131 | (24 | ) | 122 | 119 | 119 | |||||||||||||||||||||||
Other | 1,113 | 1,463 | 1,065 | 1,442 | 1,039 | 981 | 1,048 | ||||||||||||||||||||||||
Total selling and marketing | 7,072 | 7,780 | 7,246 | 7,297 | 6,388 | 6,538 | 6,394 | ||||||||||||||||||||||||
General and administrative | |||||||||||||||||||||||||||||||
Payroll and related | 4,217 | 4,440 | 4,796 | 4,802 | 4,696 | 5,074 | 5,414 | ||||||||||||||||||||||||
Stock based compensation | 791 | 429 | 835 | 763 | 701 | 440 | 438 | ||||||||||||||||||||||||
Bad debt | 136 | 134 | 86 | 262 | 274 | 265 | 275 | ||||||||||||||||||||||||
Facility rent | 863 | 899 | 922 | 719 | 883 | 839 | 844 | ||||||||||||||||||||||||
Telecommunications | 427 | 399 | 395 | 420 | 388 | 343 | 375 | ||||||||||||||||||||||||
Outside services | 1,698 | 1,719 | 1,762 | 1,811 | 1,927 | 1,606 | 2,560 | ||||||||||||||||||||||||
Taxes, licenses and permits | 1,225 | 1,383 | 1,064 | 1,358 | 1,106 | 1,166 | 1,233 | ||||||||||||||||||||||||
Other | 1,509 | 1,587 | 2,275 | 1,335 | 1,307 | 1,289 | 1,192 | ||||||||||||||||||||||||
Total general and administrative | 10,866 | 10,990 | 12,135 | 11,470 | 11,282 | 11,022 | 12,331 | ||||||||||||||||||||||||
Severance and restructuring | 545 | 4 | 20 | 981 | — | 2 | — | ||||||||||||||||||||||||
Depreciation, amortization and accretion | 4,247 | 4,352 | 4,029 | 3,680 | 3,858 | 3,822 | 3,807 | ||||||||||||||||||||||||
Operating expenses | $ | 41,718 | $ | 41,726 | $ | 42,027 | $ | 42,370 | $ | 40,135 | $ | 40,363 | $ | 41,390 | |||||||||||||||||
Capital expenditures | $ | 1,291 | $ | 2,393 | $ | 2,643 | $ | 2,636 | $ | 2,504 | $ | 2,927 | $ | 2,341 | |||||||||||||||||
(a) Slight variations in totals are due to rounding. | |||||||||||||||||||||||||||||||
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UNITS IN SERVICE ACTIVITY (a) | |||||||||||||||||||||||||||||
(Unaudited and in thousands) |
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Paging units in service |
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Beginning units in service | |||||||||||||||||||||||||||||
Direct one-way | 1,179 | 1,200 | 1,246 | 1,275 | 1,307 | 1,324 | 1,346 | ||||||||||||||||||||||
Direct two-way | 64 | 69 | 69 | 70 | 73 | 73 | 75 | ||||||||||||||||||||||
Total direct | 1,243 | 1,269 | 1,315 | 1,345 | 1,380 | 1,397 | 1,421 | ||||||||||||||||||||||
Indirect one-way | 29 | 30 | 34 | 35 | 36 | 38 | 48 | ||||||||||||||||||||||
Indirect two-way | 27 | 28 | 27 | 28 | 29 | 45 | 46 | ||||||||||||||||||||||
Total indirect | 56 | 58 | 61 | 63 | 65 | 83 | 94 | ||||||||||||||||||||||
Total beginning units in service | 1,299 | 1,327 | 1,376 | 1,408 | 1,445 | 1,480 | 1,515 | ||||||||||||||||||||||
Gross placements | |||||||||||||||||||||||||||||
Direct one-way | 40 | 48 | 34 | 32 | 40 | 49 | 39 | ||||||||||||||||||||||
Direct two-way | 4 | 2 | 4 | 3 | 3 | 5 | 3 | ||||||||||||||||||||||
Total direct | 44 | 50 | 38 | 35 | 43 | 54 | 42 | ||||||||||||||||||||||
Indirect one-way | 1 | 1 | — | 1 | 1 | 1 | 1 | ||||||||||||||||||||||
Indirect two-way | — | — | 1 | — | — | — | — | ||||||||||||||||||||||
Total indirect | 1 | 1 | 1 | 1 | 1 | 1 | 1 | ||||||||||||||||||||||
Total gross placements | 45 | 51 | 39 | 36 | 44 | 55 | 43 | ||||||||||||||||||||||
Gross disconnects | |||||||||||||||||||||||||||||
Direct one-way | (62 | ) | (69 | ) | (80 | ) | (61 | ) | (72 | ) | (66 | ) | (61 | ) | |||||||||||||||
Direct two-way | (5 | ) | (7 | ) | (4 | ) | (4 | ) | (6 | ) | (5 | ) | (5 | ) | |||||||||||||||
Total direct | (67 | ) | (76 | ) | (84 | ) | (65 | ) | (78 | ) | (71 | ) | (66 | ) | |||||||||||||||
Indirect one-way | (2 | ) | (2 | ) | (4 | ) | (2 | ) | (2 | ) | (3 | ) | (11 | ) | |||||||||||||||
Indirect two-way | (1 | ) | (1 | ) | — | (1 | ) | (1 | ) | (16 | ) | (1 | ) | ||||||||||||||||
Total indirect | (3 | ) | (3 | ) | (4 | ) | (3 | ) | (3 | ) | (19 | ) | (12 | ) | |||||||||||||||
Total gross disconnects | (70 | ) | (79 | ) | (88 | ) | (68 | ) | (81 | ) | (90 | ) | (78 | ) | |||||||||||||||
Net loss | |||||||||||||||||||||||||||||
Direct one-way | (22 | ) | (21 | ) | (46 | ) | (29 | ) | (32 | ) | (17 | ) | (22 | ) | |||||||||||||||
Direct two-way | (1 | ) | (5 | ) | — | (1 | ) | (3 | ) | — | (2 | ) | |||||||||||||||||
Total direct | (23 | ) | (26 | ) | (46 | ) | (30 | ) | (35 | ) | (17 | ) | (24 | ) | |||||||||||||||
Indirect one-way | (1 | ) | (1 | ) | (4 | ) | (1 | ) | (1 | ) | (2 | ) | (10 | ) | |||||||||||||||
Indirect two-way | (1 | ) | (1 | ) | 1 | (1 | ) | (1 | ) | (16 | ) | (1 | ) | ||||||||||||||||
Total indirect | (2 | ) | (2 | ) | (3 | ) | (2 | ) | (2 | ) | (18 | ) | (11 | ) | |||||||||||||||
Total net change | (25 | ) | (28 | ) | (49 | ) | (32 | ) | (37 | ) | (35 | ) | (35 | ) | |||||||||||||||
Ending units in service | |||||||||||||||||||||||||||||
Direct one-way | 1,157 | 1,179 | 1,200 | 1,246 | 1,275 | 1,307 | 1,324 | ||||||||||||||||||||||
Direct two-way | 63 | 64 | 69 | 69 | 70 | 73 | 73 | ||||||||||||||||||||||
Total direct | 1,220 | 1,243 | 1,269 | 1,315 | 1,345 | 1,380 | 1,397 | ||||||||||||||||||||||
Indirect one-way | 28 | 29 | 30 | 34 | 35 | 36 | 38 | ||||||||||||||||||||||
Indirect two-way | 26 | 27 | 28 | 27 | 28 | 29 | 45 | ||||||||||||||||||||||
Total indirect | 54 | 56 | 58 | 61 | 63 | 65 | 83 | ||||||||||||||||||||||
Total ending units in service | 1,274 | 1,299 | 1,327 | 1,376 | 1,408 | 1,445 | 1,480 | ||||||||||||||||||||||
(a) Slight variations in totals are due to rounding. | |||||||||||||||||||||||||||||
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AVERAGE REVENUE PER UNIT (ARPU) AND CHURN (a) | ||||||||||||||||||||||||||||||||||||
(Unaudited) |
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For the three months ended | ||||||||||||||||||||||||||||||||||||
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Paging ARPU |
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Direct one-way | $ | 7.48 | $ | 7.48 | $ | 7.59 | $ | 7.60 | $ | 7.64 | $ | 7.67 | $ | 7.73 | ||||||||||||||||||||||
Direct two-way | 18.17 | 18.21 | 18.91 | 19.43 | 19.93 | 19.95 | 20.41 | |||||||||||||||||||||||||||||
Total direct | 8.05 | 8.06 | 8.19 | 8.23 | 8.29 | 8.33 | 8.40 | |||||||||||||||||||||||||||||
Indirect one-way | 8.24 | 8.18 | 8.22 | 8.68 | 8.90 | 8.97 | 8.22 | |||||||||||||||||||||||||||||
Indirect two-way | 4.31 | 4.45 | 4.32 | 3.97 | 3.97 | 3.89 | 3.76 | |||||||||||||||||||||||||||||
Total indirect | 6.32 | 6.39 | 6.37 | 6.47 | 6.57 | 6.31 | 5.85 | |||||||||||||||||||||||||||||
Total one-way | 7.50 | 7.50 | 7.60 | 7.63 | 7.68 | 7.71 | 7.74 | |||||||||||||||||||||||||||||
Total two-way | 14.10 | 14.22 | 14.70 | 14.90 | 15.20 | 14.40 | 13.96 | |||||||||||||||||||||||||||||
Total paging ARPU | $ | 7.97 | $ | 7.98 | $ | 8.11 | $ | 8.15 | $ | 8.22 | $ | 8.22 | $ | 8.25 | ||||||||||||||||||||||
Gross disconnect rate (b) |
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Direct one-way | (5.5 | )% | (5.7 | )% | (6.4 | )% | (4.7 | )% | (5.6 | )% | (5.0 | )% | (4.6 | )% | ||||||||||||||||||||||
Direct two-way | (7.3 | )% | (10.5 | )% | (5.6 | )% | (6.4 | )% | (7.9 | )% | (6.7 | )% | (6.6 | )% | ||||||||||||||||||||||
Total direct | (5.4 | )% | (6.0 | )% | (6.4 | )% | (4.8 | )% | (5.7 | )% | (5.1 | )% | (4.7 | )% | ||||||||||||||||||||||
Indirect one-way | (6.4 | )% | (6.8 | )% | (8.2 | )% | (6.1 | )% | (6.3 | )% | (7.4 | )% | (23.6 | )% | ||||||||||||||||||||||
Indirect two-way | (1.9 | )% | (2.7 | )% | (2.3 | )% | (5.7 | )% | (4.8 | )% | (34. | )% | (1.6 | )% | ||||||||||||||||||||||
Total indirect | (4.2 | )% | (4.8 | )% | (5.5 | )% | (5.9 | )% | (5.6 | )% | (22.3 | )% | (12.5 | )% | ||||||||||||||||||||||
Total one-way | (5.3 | )% | (5.8 | )% | (6.5 | )% | (4.8 | )% | (5.6 | )% | (5.1 | )% | (5.2 | )% | ||||||||||||||||||||||
Total two-way | (5.7 | )% | (8.3 | )% | (4.7 | )% | (6.2 | )% | (7.0 | )% | (17.3 | )% | (4.7 | )% | ||||||||||||||||||||||
Total paging gross disconnect rate | (5.3 | )% | (5.9 | )% | (6.3 | )% | (4.9 | )% | (5.7 | )% | (6.1 | )% | (5.2 | )% | ||||||||||||||||||||||
Net loss rate (c) |
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Direct one-way | (1.8 | )% | (1.9 | )% | (3.7 | )% | (2.1 | )% | (2.5 | )% | (1.3 | )% | (1.7 | )% | ||||||||||||||||||||||
Direct two-way | (3.0 | )% | (4.5 | )% | (0.6 | )% | (2.2 | )% | (3.6 | )% | (0.4 | )% | (1.9 | )% | ||||||||||||||||||||||
Total direct | (1.9 | )% | (2.0 | )% | (3.5 | )% | (2.1 | )% | (2.5 | )% | (1.3 | )% | (1.7 | )% | ||||||||||||||||||||||
Indirect one-way | (4.1 | )% | (4.8 | )% | (6.3 | )% | (3.9 | )% | (3.3 | )% | (4.7 | )% | (21.8 | )% | ||||||||||||||||||||||
Indirect two-way | (1.5 | )% | (2.2 | )% | (1.9 | )% | (4.9 | )% | (4.1 | )% | (33.7 | )% | (1.3 | )% | ||||||||||||||||||||||
Total indirect | (2.8 | )% | (3.5 | )% | (4.2 | )% | (4.4 | )% | (3.6 | )% | (21. | )% | (11.5 | )% | ||||||||||||||||||||||
Total one-way | (1.9 | )% | (2.0 | )% | (3.7 | )% | (2.2 | )% | (2.5 | )% | (1.4 | )% | (2.4 | )% | ||||||||||||||||||||||
Total two-way | (2.5 | )% | (3.8 | )% | (1.0 | )% | (3.0 | )% | (3.8 | )% | (13.3 | )% | (1.6 | )% | ||||||||||||||||||||||
Total paging net loss rate | (1.9 | )% | (2.1 | )% | (3.5 | )% | (2.2 | )% | (2.6 | )% | (2.4 | )% | (2.3 | )% | ||||||||||||||||||||||
(a) Slight variations in totals are due to rounding. | ||||||||||||||||||||||||||||||||||||
(b) Gross disconnect rate is current period disconnected units divided by prior period ending units in service. | ||||||||||||||||||||||||||||||||||||
(c) Net loss rate is net current period placements and disconnected units in service divided by prior period ending units in service. | ||||||||||||||||||||||||||||||||||||
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SUPPLEMENTAL INFORMATION BY MARKET SEGMENT (a) | |||||||||||||||||||||||||||||
(Unaudited) |
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For the three months ended | |||||||||||||||||||||||||||||
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Gross placement rate (b) | |||||||||||||||||||||||||||||
Healthcare | 3.8 | % | 4.5 | % | 3.1 | % | 2.9 | % | 3.3 | % | 4.5 | % | 3.4 | % | |||||||||||||||
Government | 1.5 | % | 2.6 | % | 1.9 | % | 1.5 | % | 1.7 | % | 2.3 | % | 1.6 | % | |||||||||||||||
Large enterprise | 2.7 | % | 2.0 | % | 2.9 | % | 3.0 | % | 4.3 | % | 2.4 | % | 2.1 | % | |||||||||||||||
Other | 4.3 | % | 2.2 | % | 2.1 | % | 1.7 | % | 2.0 | % | 1.5 | % | 1.8 | % | |||||||||||||||
Total direct | 3.5 | % | 4.0 | % | 2.9 | % | 2.7 | % | 3.1 | % | 3.8 | % | 3.0 | % | |||||||||||||||
Total indirect | 1.4 | % | 1.3 | % | 1.2 | % | 1.5 | % | 1.9 | % | 1.4 | % | 1.0 | % | |||||||||||||||
Total | 3.4 | % | 3.9 | % | 2.8 | % | 2.7 | % | 3.1 | % | 3.7 | % | 2.9 | % | |||||||||||||||
Gross disconnect rate (b) | |||||||||||||||||||||||||||||
Healthcare | (5.1 | )% | (5.3 | )% | (6.5 | )% | (4.5 | )% | (5.2 | )% | (4.4 | )% | (3.9 | )% | |||||||||||||||
Government | (7.5 | )% | (7.6 | )% | (5.6 | )% | (4.7 | )% | (7.9 | )% | (7.1 | )% | (5.9 | )% | |||||||||||||||
Large enterprise | (4.8 | )% | (8.9 | )% | (5.4 | )% | (6.4 | )% | (6.0 | )% | (6.7 | )% | (7.0 | )% | |||||||||||||||
Other | (6.9 | )% | (7.7 | )% | (6.5 | )% | (6.5 | )% | (6.5 | )% | (7.4 | )% | (7.3 | )% | |||||||||||||||
Total direct | (5.4 | )% | (6.0 | )% | (6.4 | )% | (4.8 | )% | (5.7 | )% | (5.1 | )% | (4.7 | )% | |||||||||||||||
Total indirect | (4.2 | )% | (4.8 | )% | (5.5 | )% | (5.9 | )% | (5.6 | )% | (22.3 | )% | (12.5 | )% | |||||||||||||||
Total | (5.3 | )% | (5.9 | )% | (6.3 | )% | (4.9 | )% | (5.7 | )% | (6.1 | )% | (5.2 | )% | |||||||||||||||
Net loss rate (b) | |||||||||||||||||||||||||||||
Healthcare | (1.3 | )% | (0.8 | )% | (3.5 | )% | (1.5 | )% | (1.9 | )% | — | % | (0.5 | )% | |||||||||||||||
Government | (6.0 | )% | (5.0 | )% | (3.6 | )% | (3.2 | )% | (6.3 | )% | (4.6 | )% | (4.3 | )% | |||||||||||||||
Large enterprise | (2.1 | )% | (6.9 | )% | (2.5 | )% | (3.3 | )% | (1.6 | )% | (4.2 | )% | (4.9 | )% | |||||||||||||||
Other | (2.5 | )% | (5.5 | )% | (4.4 | )% | (4.8 | )% | (4.5 | )% | (5.9 | )% | (5.5 | )% | |||||||||||||||
Total direct | (1.9 | )% | (2.0 | )% | (3.5 | )% | (2.1 | )% | (2.5 | )% | (1.3 | )% | (1.7 | )% | |||||||||||||||
Total indirect | (2.8 | )% | (3.5 | )% | (4.2 | )% | (4.4 | )% | (3.6 | )% | (21.0 | )% | (11.5 | )% | |||||||||||||||
Total | (1.9 | )% | (2.1 | )% | (3.5 | )% | (2.2 | )% | (2.6 | )% | (2.4 | )% | (2.3 | )% | |||||||||||||||
End of period units in service % of total (b) | |||||||||||||||||||||||||||||
Healthcare | 73.6 | % | 73.0 | % | 72.0 | % | 71.9 | % | 71.4 | % | 70.9 | % | 68.4 | % | |||||||||||||||
Government | 7.9 | % | 8.3 | % | 8.6 | % | 8.6 | % | 8.8 | % | 9.1 | % | 10.1 | % | |||||||||||||||
Large enterprise | 7.8 | % | 7.8 | % | 8.2 | % | 8.1 | % | 8.2 | % | 8.1 | % | 8.3 | % | |||||||||||||||
Other | 6.4 | % | 6.6 | % | 6.8 | % | 7.0 | % | 7.1 | % | 7.3 | % | 7.6 | % | |||||||||||||||
Total direct | 95.7 | % | 95.7 | % | 95.6 | % | 95.6 | % | 95.5 | % | 95.4 | % | 94.4 | % | |||||||||||||||
Total indirect | 4.3 | % | 4.3 | % | 4.4 | % | 4.4 | % | 4.5 | % | 4.6 | % | 5.6 | % | |||||||||||||||
Total | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % |
(a) Slight variations in totals are due to rounding.
(b) Changes in
the classification of units in service are reflected in the quarter when
such changes are identified. Such changes are then appropriately
reflected in calculating the gross placement, gross disconnect and net
loss rates.
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SUPPLEMENTAL INFORMATION - DIRECT PAGING UNITS IN SERVICE AND | ||||||||||||||||||||||||||||||||||||
CELLULAR ACTIVATIONS (a) | ||||||||||||||||||||||||||||||||||||
(Unaudited) |
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For the three months ended | ||||||||||||||||||||||||||||||||||||
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Account size ending units in service (000's) | ||||||||||||||||||||||||||||||||||||
1 to 3 units | 37 | 39 | 41 | 43 | 45 | 47 | 49 | |||||||||||||||||||||||||||||
4 to 10 units | 22 | 23 | 24 | 25 | 26 | 28 | 29 | |||||||||||||||||||||||||||||
11 to 50 units | 53 | 56 | 57 | 61 | 64 | 67 | 71 | |||||||||||||||||||||||||||||
51 to 100 units | 36 | 38 | 41 | 42 | 43 | 45 | 47 | |||||||||||||||||||||||||||||
101 to 1,000 units | 267 | 275 | 282 | 287 | 293 | 305 | 321 | |||||||||||||||||||||||||||||
>1,000 units | 805 | 812 | 824 | 857 | 874 | 888 | 880 | |||||||||||||||||||||||||||||
Total | 1,220 | 1,243 | 1,269 | 1,315 | 1,345 | 1,380 | 1,397 | |||||||||||||||||||||||||||||
End of period units in service % of total direct | ||||||||||||||||||||||||||||||||||||
1 to 3 units | 3.0 | % | 3.1 | % | 3.2 | % | 3.2 | % | 3.3 | % | 3.4 | % | 3.5 | % | ||||||||||||||||||||||
4 to 10 units | 1.8 | % | 1.8 | % | 1.9 | % | 1.9 | % | 2.0 | % | 2.0 | % | 2.1 | % | ||||||||||||||||||||||
11 to 50 units | 4.3 | % | 4.5 | % | 4.5 | % | 4.6 | % | 4.8 | % | 4.8 | % | 5.1 | % | ||||||||||||||||||||||
51 to 100 units | 3.0 | % | 3.1 | % | 3.2 | % | 3.2 | % | 3.2 | % | 3.2 | % | 3.4 | % | ||||||||||||||||||||||
101 to 1,000 units | 21.9 | % | 22.1 | % | 22.3 | % | 21.9 | % | 21.8 | % | 22.1 | % | 23.0 | % | ||||||||||||||||||||||
>1,000 units | 66.0 | % | 65.4 | % | 64.9 | % | 65.2 | % | 64.9 | % | 64.5 | % | 62.9 | % | ||||||||||||||||||||||
Total | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | ||||||||||||||||||||||
Account size net loss rate | ||||||||||||||||||||||||||||||||||||
1 to 3 units | (4.8 | )% | (4.1 | )% | (4.9 | )% | (4.4 | )% | (4.6 | )% | (5.1 | )% | (4.8 | )% | ||||||||||||||||||||||
4 to 10 units | (4.0 | )% | (5.4 | )% | (4.1 | )% | (3.8 | )% | (5.3 | )% | (5.3 | )% | (6.0 | )% | ||||||||||||||||||||||
11 to 50 units | (5.2 | )% | (3.2 | )% | (5.3 | )% | (4.4 | )% | (3.9 | )% | (6.4 | )% | (4.8 | )% | ||||||||||||||||||||||
51 to 100 units | (5.2 | )% | (8.7 | )% | (1.2 | )% | (3.5 | )% | (2.8 | )% | (5.3 | )% | (4.0 | )% | ||||||||||||||||||||||
101 to 1,000 units | (2.9 | )% | (2.5 | )% | (1.7 | )% | (1.7 | )% | (4.0 | )% | (5.0 | )% | (3.9 | )% | ||||||||||||||||||||||
>1,000 units | (1.0 | )% | (1.2 | )% | (4.0 | )% | (1.8 | )% | (1.7 | )% | 1.1 | % | (0.2 | )% | ||||||||||||||||||||||
Total | (1.9 | )% | (2.0 | )% | (3.5 | )% | (2.1 | )% | (2.5 | )% | (1.3 | )% | (1.7 | )% | ||||||||||||||||||||||
Account size ARPU | ||||||||||||||||||||||||||||||||||||
1 to 3 units | 14.65 | 14.86 | 14.96 | 14.98 | 15.13 | 15.12 | 15.22 | |||||||||||||||||||||||||||||
4 to 10 units | 14.04 | 14.12 | 14.22 | 14.29 | 14.38 | 14.29 | 14.33 | |||||||||||||||||||||||||||||
11 to 50 units | 11.95 | 12.00 | 12.07 | 11.96 | 12.06 | 11.96 | 12.06 | |||||||||||||||||||||||||||||
51 to 100 units | 10.16 | 10.18 | 10.27 | 10.34 | 10.66 | 10.42 | 10.47 | |||||||||||||||||||||||||||||
101 to 1,000 units | 8.69 | 8.58 | 8.76 | 8.89 | 8.85 | 8.84 | 8.84 | |||||||||||||||||||||||||||||
>1,000 units | 6.99 | 7.00 | 7.11 | 7.11 | 7.17 | 7.19 | 7.23 | |||||||||||||||||||||||||||||
Total | $ | 8.05 | $ | 8.06 | $ | 8.19 | $ | 8.23 | $ | 8.29 | $ | 8.33 | $ | 8.40 | ||||||||||||||||||||||
Cellular: | ||||||||||||||||||||||||||||||||||||
Number of activations | 2,198 | 1,679 | 281 | 690 | 970 | 799 | 925 | |||||||||||||||||||||||||||||
Revenue from cellular services (000's) | $ | 395 | $ | 278 | $ | 108 | $ | 129 | $ | 235 | $ | 163 | $ | 195 | ||||||||||||||||||||||
(a) Slight variations in totals are due to rounding. |
Bob.Lougee@spok.com
Source: