Board Declares Regular Quarterly Dividend
SPRINGFIELD, Va. (April 25, 2018)
– Spok Holdings, Inc. (NASDAQ: SPOK), a global leader in healthcare communications
, today announced operating results for the first quarter ended March 31, 2018. In addition, the Company’s Board of Directors declared a regular quarterly dividend of $0.125 per share, payable on June 22, 2018 to stockholders of record on May 25, 2018.
2018 First Quarter Results:
Consolidated revenue for the first quarter of 2018 under Generally Accepted Accounting Principles (“GAAP”) was $43.1 million compared to $41.4 million in the first quarter of 2017. On January 1, 2018, Spok adopted Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers, using the modified retrospective method applied to those contracts which were not completed as of January 1, 2018. Unless otherwise stated, results for reporting periods beginning after January 1, 2018 are presented under ASC 606, while prior period amounts have not been adjusted, and continue to be reported in accordance with the Company’s historic accounting under ASC 605.
GAAP net income for the first quarter of 2018 was $0.5 million, or $0.03 per share, compared to $0.9 million, or $0.04 per share, in the first quarter of 2017.
Other key results and highlights for the first quarter of 2018 included:
- Software bookings of $18.1 million, compared to $19.8 million in the prior year quarter. First quarter 2018 bookings included $7.1 million of operations bookings and $11.0 million of maintenance renewals, compared to $9.5 million of operations bookings and $10.3 million of maintenance renewals in the first quarter of 2017.
- Software backlog totaled $35.9 million at March 31, 2018, or $42.7 million adjusted to exclude the adoption of ASC 606, compared to $40.6 million in the year earlier period. As a result of the adoption of ASC 606 approximately $5.3 million of backlog, that could have been recognized in 2018 under prior accounting rules, was re-cast to retained earnings as part of the beginning balance as of January 1, 2018.
- The revenue renewal rate for software maintenance in the first quarter of 2018 was greater than 99 percent.
- Paging units in service at March 31, 2018 totaled 1,030,000, compared to 1,091,000 at the end of the prior year period.
- The quarterly rate of wireless revenue erosion was 1.3 percent in the first quarter of 2018 versus 2.5 percent in the year-earlier quarter.
- Consolidated operating expenses (excluding depreciation, amortization and accretion) totaled $39.7 million in the first quarter of 2018, compared to $36.8 million in the year-earlier quarter.
- Capital returned to stockholders in the first quarter of 2018 totaled $4.7 million, in the form of $2.8 million from the regular quarterly dividend and $1.9 million of share repurchases.
- The Company’s cash balance at March 31, 2018 was $101.3 million, compared to $118.9 million at March 31, 2017, and $107.2 million at December 31, 2017.
“We are encouraged with our performance in the first quarter of 2018 and believe that it provides a solid base for the remainder of the year,” said Vincent D. Kelly, chief executive officer. “First quarter results were in line with our seasonal expectations, and we saw strong year-over-year performance in a number of key operating measures, including revenue levels and average deal size, as well as wireless subscriber retention. We accomplished this as we increased our investment in our business by enhancing and upgrading our product development team and tools as well as our sales infrastructure and management. We believe this effort will yield significant future benefits in the form of our improved, integrated communication platform, Spok Care Connect®, as well as higher future bookings levels, and ultimately margins, supported by our enhanced and upgraded sales team. Overall, we continued to operate profitably, enhance our product offerings, and operate as a debt-free company. We also executed against our capital allocation strategy.” Kelly added, “Throughout 2018, we will remain focused on returning value to our shareholders through our capital allocation strategy, which includes dividends, share repurchases and key strategic investments in our products and business to create sustainable growth.”
For the full-year 2018, adjusted to exclude the adoption of ASC 606, the Company continues to expect total revenue to range from $161 million to $177 million, operating expenses (excluding depreciation, amortization and accretion) to range from $158 million to $165 million, and capital expenditures to range from $4 million to $8 million.
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2018 First Quarter Call and Replay:
The Company plans to host a conference call for investors to discuss its 2018 first quarter results at 10:00 a.m. ET on Thursday, April 26, 2018. Dial-in numbers for the call are 334-323-0522 or 877-260-1479. The pass code for the call is 9101087. A replay of the call will be available from 1:00 p.m. ET on April 26, 2018 until 1:00 p.m. ET on Thursday, May 10, 2018. To listen to the replay, please register at http://tinyurl.com/Spok2018Q1earningsreplay. Please cut and paste this address into your browser, enter the registration information, and you will be given access to the replay.
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