News Release

Spok Reports First Quarter 2022 Results

Company makes progress on recently announced strategic business plan

Announces conclusion of thorough strategic alternatives review process; Spok’s Board remains open to all pathways to maximize shareholder value

Alexandria, Va. (April 28, 2022) – Spok Holdings, Inc. (NASDAQ: SPOK), a global leader in healthcare communications, today announced results for the first quarter ended March 31, 2022. In addition, the Company’s Board of Directors declared a regular quarterly dividend of $0.3125 per share, payable on June 24, 2022, to stockholders of record on May 25, 2022.

2022 First Quarter Highlights:

  • Announced new strategic business plan prioritizing maximizing free cash flow and returning capital to shareholders
  • Reduced size of Board of Directors to better align the Board’s size and composition with the Company’s recently announced business strategy
  • Capital returned to stockholders in the first quarter of 2022 totaled $6.5 million in the form of the Company’s regular quarterly dividend
  • Cash, cash equivalents and short-term investments balance of $46.3 million at March 31, 2022, and no debt
  • University of Rochester Medical Center (URMC) selected Spok Care Connect® to replace URMC’s existing operator console and to support its clinical communication needs at its flagship Strong Memorial Hospital

“We have made great progress on our recently announced strategic business plan while also continuing to provide critical communications services to our healthcare customers,” said Vincent D. Kelly, president and chief executive officer of Spok Holdings, Inc. “We are on target with our previously announced financial objectives, and our focus remains on creating significant value for our shareholders by maximizing revenue and cash flow generation from our established communication solutions. We continue to believe that we are on the best path forward, and we are optimistic about our prospects for the remainder of 2022 and beyond.”

Strategic Review Update:

Spok has concluded the strategic alternatives review process it publicly commenced on September 3, 2021. At this time, Spok has no actionable options for a sale of the Company and the Board has determined it is in the best interests of all shareholders for Spok to focus on executing its strategic plan as a standalone company.

Since initiating the strategic review, the Board, along with its financial and legal advisors, conducted an exceptionally thorough process and reached out to and engaged with a wide range of strategic and financial parties. 

Spok’s Board is fully committed to maximizing value for all shareholders.

2022 First Quarter Results:

Consolidated revenue for the first quarter of 2022 under Generally Accepted Accounting Principles (“GAAP”) was $33.8 million, compared to $36.0 million in the first quarter of 2021.

 

For the Three Months Ended March 31,

(Dollars in thousands)

2022

 

2021

 

Change (%)

Wireless revenue

         

Paging revenue

$           18,313

 

$           19,353

 

(5.4) %

Product and other revenue

                   533

 

                   767

 

(30.5) %

Total wireless revenue

$           18,846

 

$           20,120

 

(6.3) %

           

Software revenue

         

License

$             1,824

 

$             1,552

 

17.5 %

Professional services

                3,336

 

                4,354

 

(23.4) %

Hardware

                   589

 

                   616

 

(4.4) %

Maintenance

                9,230

 

                9,394

 

(1.7) %

Total software revenue

             14,979

 

             15,916

 

(5.9) %

Total revenue

$           33,825

 

$           36,036

 

(6.1) %

 

Operating expenses in the first quarter of 2022 totaled $42.5 million and included $4.5 million in restructuring costs, compared to $37.8 million in operating expenses in the first quarter of 2021.

Adjusted operating expenses (which excludes depreciation, amortization and accretion, and restructuring costs, and includes capitalized software development costs) totaled $37.1 million in the first quarter of 2022. Adjusted operating expenses for the first quarter of 2021 totaled $38.0 million.

 

For the Three Months Ended March 31,

(Dollars in thousands)

2022

 

2021

 

Change (%)

Operating expenses

$           42,493

 

$           37,776

 

(12.5) %

Adjusted operating expenses

$           37,064

 

$           37,969

 

2.4 %

GAAP net loss for the first quarter of 2022 was $7.2 million, or a loss of $0.37 per diluted share, compared to net loss of $2.3 million, or $0.12 per diluted share, in the first quarter of 2021.  For the first quarter of 2022, adjusted EBITDA loss totaled $2.1 million compared to adjusted EBITDA of $0.3 million in the first quarter of 2021.

 

For the three months ended March 31,

(Dollars in thousands)

2022

 

2021

 

Change (%)

Net loss

$            (7,214)

 

$            (2,297)

 

(214.1) %

Basic and diluted net loss per common share

$              (0.37)

 

$              (0.12)

 

(208.3) %

Adjusted EBITDA

$            (2,124)

 

$                 306

 

(794.1) %

Financial Outlook:

Regarding financial guidance, the Company expects the following for fiscal year 2022, which is unchanged from the previously provided 2022 financial guidance:

(Unaudited and in millions)

 

Current Guidance Full Year 2022

   

From

 

To

Revenue

       

Wireless

 

$                               71.6

 

$                               77.0

Software

 

$                               54.4

 

$                               62.2

Total Revenue

 

$                             126.0

 

$                             139.2

         

Adjusted Operating Expenses

 

$                             118.8

 

$                             128.6

         

Capital Expenditures

 

$                                 3.4

 

$                                 4.2

2022 First Quarter Call:

Management will host a conference call and webcast to discuss these financial results today at 8:30 a.m. Eastern Daylight Time. The presentation is open to all interested parties and may include forward-looking information.

Conference Call Details

Date/Time:

Thursday, April 28, 2022, at 8:30 a.m. EDT

Webcast:

https://www.webcast-eqs.com/spok042822_en/en

U.S. Toll-Free Dial In:

877-407-0890

International Dial In:

+1-201-389-0918

To access the call, please dial in approximately ten minutes before the start of the call. After the event the OnDemand version of the webcast will be available under the URL as well.

* * * * * * * * *

Non-GAAP Financial Measures

This press release contains the following non-GAAP financial measures: adjusted operating expenses and adjusted EBITDA. Adjusted operating expenses excludes depreciation, amortization and accretion, goodwill and restructuring costs, and includes capitalized software development costs. Adjusted EBITDA represents net income/(loss) before interest income/expense, income tax expense/benefit, depreciation, amortization and accretion expense restructuring costs, and stock-based compensation expense and includes capitalized software development costs.

We believe that these non-GAAP financial measures provide useful information to management and investors regarding certain financial and business trends relating to Spok’s financial condition and results of operations. We use these non-GAAP measures for financial, operational, and budgetary decision-making purposes, to understand and evaluate our core operating performance and trends, and to generate future operating plans. We believe that these non-GAAP financial measures permit us to more thoroughly analyze key financial metrics used to make operational decisions and allow us to assess our core operating results. We believe that the use of these non-GAAP financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing our financial measures with other software companies who present similar non-GAAP financial measures. We adjust for certain items because we do not regard these costs as reflective of normal costs related to the ongoing operation of the business in the ordinary course. In general, these items possess one or more of the following characteristics: non-cash expenses, factors outside of our control, items that are non-operational in nature, and unusual items not expected to occur in the normal course of business.

We do not consider these non-GAAP measures in isolation or as an alternative to financial measures determined in accordance with GAAP. The principal of these non-GAAP financial measures is that they exclude significant expenses and income that are required by GAAP to be recorded in the Company’s financial statements. In addition, they are subject to inherent limitations as they reflect the exercise of judgment by management about which expenses and income are excluded or included in determining these non-GAAP financial measures. In order to compensate for these limitations, management presents non-GAAP financial measures in connection with GAAP results. We urge investors to review the reconciliation of our non-GAAP financial measures to the comparable GAAP financial measures, which are included in this press release, and not to rely on any single financial measure to evaluate our business.

Tables to Follow

SPOK HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (a)(b)

(Unaudited and in thousands except share, per share amounts and ARPU)

         
   

For the three months ended

   

3/31/2022

 

3/31/2021

Revenue:

       

Wireless

 

$          18,846   

 

$          20,120   

Software

 

            14,979   

 

            15,916   

Total revenue

 

            33,825   

 

            36,036   

Operating expenses:

       

Cost of revenue (exclusive of items shown separately below)

 

              7,804   

 

              7,982   

Research and development

 

              6,497   

 

              4,444   

Technology operations

 

              7,013   

 

              7,204   

Selling and marketing

 

              5,315   

 

              5,139   

General and administrative

 

            10,435   

 

            10,280   

Depreciation, amortization and accretion

 

                 934   

 

              2,727   

Severance and restructuring

 

              4,495   

 

                   —   

Total operating expenses

 

            42,493   

 

            37,776   

% of total revenue

 

125.6 %

 

104.8 %

Operating loss

 

            (8,668)  

 

            (1,740)  

% of total revenue

 

(25.6) %

 

(4.8) %

Interest income

 

                   67   

 

                   61   

Other expense

 

                 (13)  

 

                 (27)  

Loss before income taxes

 

            (8,614)  

 

            (1,706)  

Benefit from (provision for) income taxes

 

              1,400   

 

               (591)  

Net loss

 

$          (7,214)  

 

$          (2,297)  

Basic and diluted net loss per common share

 

$            (0.37)  

 

$            (0.12)  

Basic weighted average common shares outstanding

 

     19,599,526   

 

     19,272,786   

Cash dividends declared per common share

 

            0.3125   

 

              0.125   

Key statistics:

       

Units in service

 

                 838   

 

                 874   

Average revenue per unit (ARPU)

 

$              7.24   

 

$              7.34   

Bookings

 

$          14,317   

 

$          14,597   

Backlog

 

$          40,532   

 

$          48,849   

         

(a) Slight variations in totals are due to rounding.

(b) Certain prior period amounts have been reclassified to conform to the current period’s presentation. These reclassifications had no effect on the reported results of operations

 

SPOK HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (a)(b)

(Unaudited and in thousands except share, per share amounts and ARPU)

                                 
   

For the three months ended

   

3/31/2022

 

12/31/2021

 

9/30/2021

 

6/30/2021

 

3/31/2021

 

12/31/2020

 

9/30/2020

 

6/30/2020

Revenue:

                               

Wireless

 

$  18,846   

 

$  19,203   

 

$  19,644   

 

$  19,859   

 

$  20,120   

 

$  20,300   

 

$  20,828   

 

$  21,078   

Software

 

    14,979   

 

    15,341   

 

    16,207   

 

    15,864   

 

    15,916   

 

    17,180   

 

    16,865   

 

    14,661   

Total revenue

 

    33,825   

 

    34,544   

 

    35,851   

 

    35,723   

 

    36,036   

 

    37,480   

 

    37,693   

 

    35,739   

Operating expenses:

                               

Cost of revenue (exclusive of items shown separately below)

 

      7,804   

 

      8,290   

 

      8,340   

 

      7,859   

 

      7,982   

 

      8,588   

 

      7,223   

 

      6,372   

Research and development

 

      6,497   

 

      4,851   

 

      4,063   

 

      4,156   

 

      4,444   

 

      4,122   

 

      3,445   

 

      2,740   

Technology operations

 

      7,013   

 

      7,331   

 

      7,287   

 

      7,022   

 

      7,204   

 

      7,253   

 

      7,269   

 

      7,174   

Selling and marketing

 

      5,315   

 

      5,356   

 

      5,404   

 

      5,184   

 

      5,139   

 

      5,209   

 

      4,483   

 

      4,015   

General and administrative

 

    10,435   

 

    11,099   

 

    11,664   

 

    10,481   

 

    10,280   

 

      8,882   

 

    10,206   

 

    10,162   

Depreciation, amortization and accretion

 

         934   

 

      2,694   

 

      2,568   

 

      2,457   

 

      2,727   

 

      2,503   

 

      2,335   

 

      2,072   

Severance and restructuring

 

      4,495   

 

           71   

 

           82   

 

         173   

 

            —   

 

         366   

 

            —   

 

           45   

Goodwill and capitalized software development impairment

 

            —   

 

    15,663   

 

            —   

 

            —   

 

            —   

 

    25,007   

 

            —   

 

            —   

Total operating expenses

 

    42,493   

 

    55,355   

 

    39,408   

 

    37,332   

 

    37,776   

 

    61,930   

 

    34,961   

 

    32,580   

% of total revenue

 

125.6 %

 

160.2 %

 

109.9 %

 

104.5 %

 

104.8 %

 

165.2 %

 

92.8 %

 

91.2 %

Operating (loss) income

 

     (8,668)  

 

   (20,811)  

 

     (3,557)  

 

     (1,609)  

 

     (1,740)  

 

   (24,450)  

 

      2,732   

 

      3,159   

% of total revenue

 

(25.6) %

 

(60.2) %

 

(9.9) %

 

(4.5) %

 

(4.8) %

 

(65.2) %

 

7.2 %

 

8.8 %

Interest income

 

           67   

 

           56   

 

         141   

 

           61   

 

           61   

 

           51   

 

         127   

 

         146   

Other (expense) income

 

          (13)  

 

           54   

 

           10   

 

           29   

 

          (27)  

 

           95   

 

         151   

 

         101   

(Loss) income before income taxes

 

     (8,614)  

 

   (20,701)  

 

     (3,406)  

 

     (1,519)  

 

     (1,706)  

 

   (24,304)  

 

      3,010   

 

      3,406   

Benefit from (provision for) income taxes

 

      1,400   

 

      4,032   

 

         912   

 

         800   

 

        (591)  

 

   (22,306)  

 

         155   

 

         353   

Net (loss) income

 

$(7,214)  

 

$(16,669)  

 

$(2,494)  

 

$ (719)  

 

$(2,297)  

 

$(46,610)  

 

$ 3,165   

 

$ 3,759   

Basic net (loss) income per common share

 

$(0.37)  

 

$(0.86)  

 

$(0.13)  

 

$(0.04)  

 

$  (0.12)  

 

$ (2.44)  

 

$  0.17   

 

$ 0.20   

Diluted net (loss) income per common share

 

       (0.37)  

 

       (0.86)  

 

       (0.13)  

 

       (0.04)  

 

       (0.12)  

 

       (2.44)  

 

        0.16   

 

        0.20   

Basic weighted average common shares outstanding

 

19,599,526

 

19,483,004

 

19,464,893

 

19,395,364

 

19,272,786

 

19,088,329

 

19,051,502

 

19,016,853

Diluted weighted average common shares outstanding

 

19,599,526

 

19,483,004

 

19,464,893

 

19,395,364

 

19,272,786

 

19,088,329

 

19,208,452

 

19,115,148

Key statistics:

                               

Units in service

 

         838   

 

         847   

 

         853   

 

         869   

 

         874   

 

         885   

 

         898   

 

         915   

Average revenue per unit (ARPU)

 

$      7.24   

 

$      7.26   

 

$      7.29   

 

$      7.32   

 

$      7.34   

 

$      7.30   

 

$      7.34   

 

$      7.24   

Bookings

 

$  14,317   

 

$  14,793   

 

$  17,116   

 

$  13,037   

 

$  14,597   

 

$  16,528   

 

$  21,414   

 

$  15,411   

Backlog

 

$  40,532   

 

$  43,361   

 

$  45,584   

 

$  45,632   

 

$  48,849   

 

$  50,504   

 

$  51,708   

 

$  48,441   

                                 

(a) Slight variations in totals are due to rounding.

(b) Certain prior period amounts have been reclassified to conform to the current period’s presentation. These reclassifications had no effect on the reported results of operations

 

SPOK HOLDINGS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS (a)

(In thousands)

         
   

3/31/2022

 

12/31/2021

         

ASSETS

 

(Unaudited)

   
         

Current assets:

       

Cash and cash equivalents

 

$                            31,350

 

$                            44,583

Short-term investments

 

                              14,978

 

                              14,999

Accounts receivable, net

 

                              23,373

 

                              26,908

Prepaid expenses

 

                                8,095

 

                                6,641

Other current assets

 

                                   878

 

                                   922

Total current assets

 

                              78,674

 

                              94,053

Non-current assets:

       

Property and equipment, net

 

                                6,642

 

                                6,746

Operating lease right-of-use assets

 

                              14,993

 

                              15,821

Capitalized software development, net

 

                                     —

 

                                     —

Goodwill

 

                              99,175

 

                              99,175

Intangible assets, net

 

                                     —

 

                                     —

Deferred income tax assets, net

 

                              32,684

 

                              31,653

Other non-current assets

 

                                   707

 

                                   706

Total non-current assets

 

                            154,201

 

                            154,101

Total assets

 

$                          232,875

 

$                          248,154

         

LIABILITIES AND STOCKHOLDERS’ EQUITY

       
         

Current liabilities:

       

Accounts payable

 

$                              3,863

 

$                              5,292

Accrued compensation and benefits

 

                              15,769

 

                              13,948

Deferred revenue

 

                              24,223

 

                              25R,608

Operating lease liabilities

 

                                5,112

 

                           5,405

Other current liabilities

 

                                5,147

 

                                4,745

Total current liabilities

 

                              54,114

 

                              54,998

Non-current liabilities:

       

Asset retirement obligations

 

                                6,372

 

                                6,355

Operating lease liabilities

 

                              11,256

 

                              11,883

Other non-current liabilities

 

                                1,238

 

                                1,227

Total non-current liabilities

 

                              18,866

 

                              19,465

Total liabilities

 

                              72,980

 

                              74,463

Commitments and contingencies

       

Stockholders’ equity:

       

Preferred stock

 

$                                   —

 

$                                   —

Common stock

 

                                       2

 

                                       2

Additional paid-in capital

 

                              97,197

 

                              97,291

Accumulated other comprehensive loss

 

                               (1,563)

 

                               (1,588)

Retained earnings

 

                              64,259

 

                              77,986

Total stockholders’ equity

 

                            159,895

 

                            173,691

Total liabilities and stockholders’ equity

 

$                          232,875

 

$                          248,154

         

(a) Slight variations in totals are due to rounding.

 

SPOK HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (a)

(Unaudited and in thousands)

       
 

For the three months ended

 

3/31/2022

 

3/31/2021

Operating activities:

     

Net loss

$                             (7,214)

 

$                             (2,297)

Adjustments to reconcile net loss to net cash net (used ) provided by operating activities:

     

Depreciation, amortization and accretion

                                   934

 

                                2,727

Deferred income tax (benefit) expense

                               (1,024)

 

                                   510

Stock-based compensation

                                1,115

 

                                2,239

Provisions for credit losses, service credits and other

                                   594

 

                                   215

Changes in assets and liabilities:

     

Accounts receivable

                                2,951

 

                                1,039

Prepaid expenses and other assets

                               (1,421)

 

                                   457

Net operating lease liabilities

                                    (91)

 

                                   338

Accounts payable, accrued liabilities and other

                                   879

 

                               (3,038)

Deferred revenue

                               (1,602)

 

                               (1,471)

Net cash (used in) provided by operating activities

                               (4,879)

 

                                   719

Investing activities:

     

Purchases of property and equipment

                                  (679)

 

                                  (727)

Capitalized software development

                                     —

 

                               (2,920)

Purchase of short-term investments

                             (14,967)

 

                             (14,995)

Maturity of short-term investments

                              15,000

 

                              15,000

Net cash used in investing activities

                                  (646)

 

                               (3,642)

Financing activities:

     

Cash distributions to stockholders

                               (6,524)

 

                               (2,730)

Purchase of common stock for tax withholding on vested equity awards

                               (1,209)

 

                               (1,444)

Net cash used in financing activities

                               (7,733)

 

                               (4,174)

Effect of exchange rate on cash and cash equivalents

                                     25

 

                                     14

Net decrease in cash and cash equivalents

                             (13,233)

 

                               (7,083)

Cash and cash equivalents, beginning of period

                              44,583

 

                              48,729

Cash and cash equivalents, end of period

$                            31,350

 

$                            41,646

Supplemental disclosure:

     

Income tax refunds received

$                                  (39)

 

$                                (118)

       

(a) Slight variations in totals are due to rounding.

 

SPOK HOLDINGS, INC.

CONSOLIDATED REVENUE

SUPPLEMENTAL INFORMATION (a)

(Unaudited and in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the three months ended

 

 

3/31/2022

 

12/31/2021

 

9/30/2021

 

6/30/2021

 

3/31/2021

 

12/31/2020

 

9/30/2020

 

6/30/2020

Revenue

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Paging

 

$     18,313

 

$     18,513

 

$     18,844

 

$     19,135

 

$     19,353

 

$     19,513

 

$     19,961

 

$     19,990

Non-paging

 

$          533

 

$          690

 

$          800

 

$          724

 

$          767

 

$          787

 

$          867

 

$       1,088

Total wireless revenue

 

$     18,846

 

$     19,203

 

$     19,644

 

$     19,859

 

$     20,120

 

$     20,300

 

$     20,828

 

$     21,078

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

License

 

$       1,824

 

$       1,650

 

$       1,807

 

$          908

 

$       1,552

 

$       1,528

 

$       2,012

 

$          749

Services

 

$       3,336

 

$       3,783

 

$       4,159

 

$       4,865

 

$       4,354

 

$       4,778

 

$       4,772

 

$       3,812

Equipment

 

$          589

 

$          573

 

$          596

 

$          482

 

$          616

 

$          961

 

$          554

 

$          601

Operations revenue

 

$       5,749

 

$       6,006

 

$       6,562

 

$       6,255

 

$       6,522

 

$       7,267

 

$       7,338

 

$       5,162

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Maintenance revenue

 

$       9,230

 

$       9,335

 

$       9,645

 

$       9,609

 

$       9,394

 

$       9,913

 

$       9,527

 

$       9,499

Total software revenue

 

$     14,979

 

$     15,341

 

$     16,207

 

$     15,864

 

$     15,916

 

$     17,180

 

$     16,865

 

$     14,661

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total revenue

 

$     33,825

 

$     34,544

 

$     35,851

 

$     35,723

 

$     36,036

 

$     37,480

 

$     37,693

 

$     35,739

 

 

SPOK HOLDINGS, INC.

CONSOLIDATED OPERATING EXPENSES

SUPPLEMENTAL INFORMATION (a)(b)

(Unaudited and in thousands)

 
   

For the three months ended

   

3/31/2022

 

12/31/2021

 

9/30/2021

 

6/30/2021

 

3/31/2021

 

12/31/2020

 

9/30/2020

 

6/30/2020

Cost of revenue

                               

Payroll and related

 

$       5,110

 

$       5,268

 

$       5,208

 

$       4,720

 

$       5,139

 

$       5,244

 

$       4,743

 

$       4,158

Cost of sales

 

         1,557

 

         1,713

 

         1,699

 

         1,633

 

         1,386

 

         1,924

 

         1,165

 

         1,193

Recoverable taxes and fees

 

            712

 

            781

 

            792

 

            903

 

            867

 

            798

 

            803

 

            591

Stock-based compensation

 

            109

 

            127

 

            220

 

            262

 

            291

 

            112

 

            121

 

            111 

Other

 

            316

 

            401

 

            421

 

            341

 

            299

 

            510

 

            391

 

            319

Total cost of revenue

 

         7,804

 

         8,290

 

         8,340

 

         7,859

 

         7,982

 

         8,588

 

         7,223

 

         6,372

Research and development

                               

Payroll and related

 

         4,305

 

         4,329

 

         4,291

 

         4,333

 

         4,475

 

         4,358

 

         4,147

 

         4,115

Outside services

 

         1,899

 

         1,760

 

         1,759

 

         2,060

 

         2,277

 

         2,358

 

         2,113

 

         1,803

Capitalized software development

 

               —

 

        (2,603)

 

        (2,621)

 

        (2,698)

 

        (2,920)

 

        (3,046)

 

        (2,906)

 

        (3,596)

Stock-based compensation

 

            130

 

            234

 

            435

 

            305

 

            475

 

            246

 

            240

 

            243

Other

 

            163

 

         1,131

 

            199

 

            156

 

            137

 

            206

 

           (149)

 

            175

Total research and development

 

         6,497

 

         4,851

 

         4,063

 

         4,156

 

         4,444

 

         4,122

 

         3,445

 

         2,740

Technology operations

                               

Payroll and related

 

         2,509

 

         2,584

 

         2,585

 

         2,323

 

         2,467

 

         2,467

 

         2,246

 

         2,213

Site rent

 

         3,067

 

         3,104

 

         3,122

 

         3,143

 

         3,196

 

         3,313

 

         3,467

 

         3,399

Telecommunications

 

            771

 

            826

 

            828

 

            825

 

            837

 

            857

 

            949

 

            961

Stock-based compensation

 

              55

 

              53

 

            139

 

            131

 

            137

 

              48

 

              52

 

              47

Other

 

            611

 

            764

 

            613

 

            600

 

            567

 

            568

 

            555

 

            554

Total technology operations

 

         7,013

 

         7,331

 

         7,287

 

         7,022

 

         7,204

 

         7,253

 

         7,269

 

         7,174

Selling and marketing

                               

Payroll and related

 

         3,468

 

         3,383

 

         3,592

 

         3,361

 

         3,365

 

         3,115

 

         2,971

 

         2,730

Commissions

 

         1,024

 

         1,153

 

            924

 

         1,244

 

         1,105

 

         1,178

 

         1,059

 

            852

Stock-based compensation

 

              79

 

            114

 

            264

 

            277

 

            350

 

            216

 

            235

 

            217

Advertising and events

 

            568

 

            630

 

            527

 

            247

 

            161

 

            539

 

            151

 

            160

Other

 

            176

 

              76

 

              97

 

              55

 

            158

 

            161

 

              67

 

              56

Total selling and marketing

 

         5,315

 

         5,356

 

         5,404

 

         5,184

 

         5,139

 

         5,209

 

         4,483

 

         4,015

General and administrative

                               

Payroll and related

 

         4,051

 

         4,040

 

         3,911

 

         3,564

 

         3,818

 

         3,373

 

         3,476

 

         3,355

Stock-based compensation

 

            742

 

            675

 

            958

 

            806

 

            986

 

            726

 

            968

 

            744

Facility rent, office, and technology costs

 

         2,680

 

         2,579

 

         2,692

 

         2,484

 

         2,480

 

         2,412

 

         2,260

 

         2,276

Outside services

 

         1,900

 

         2,392

 

         3,078

 

         2,219

 

         1,825

 

         1,584

 

         2,148

 

         2,043

Taxes, licenses and permits(b)

 

            265

 

            408

 

            211

 

            214

 

            214

 

           (314)

 

            190

 

            213

Bad debt

 

             (14)

 

            255

 

             (29)

 

            328

 

            106

 

            202

 

            178

 

            628

Other

 

            811

 

            750

 

            843

 

            866

 

            851

 

            899

 

            986

 

            903

Total general and administrative

 

       10,435

 

       11,099

 

       11,664

 

       10,481

 

       10,280

 

         8,882

 

       10,206

 

       10,162

Depreciation, amortization and accretion

 

            934

 

         2,694

 

         2,568

 

         2,457

 

         2,727

 

         2,503

 

         2,335

 

         2,072

Severance and restructuring

 

         4,495

 

              71

 

              82

 

            173

 

               —

 

            366

 

               —

 

              45

Goodwill and capitalized software development impairment

 

               —

 

       15,663

 

               —

 

               —

 

               —

 

       25,007

 

               —

 

               —

Operating expenses

 

$  42,493

 

$  55,355

 

$  39,408

 

$  37,332

 

$  37,776

 

$  61,930

 

$  34,961

 

$  32,580

Capital expenditures

 

$       684

 

$    1,295

 

$       905

 

$    1,480

 

$       727

 

$       638

 

$       934

 

$       846

                                 

(a) Slight variations in totals are due to rounding.

(b) Certain prior period amounts have been reclassified to conform to the current period’s presentation. These reclassifications had no effect on the reported results of operations

 

SPOK HOLDINGS, INC.

UNITS IN SERVICE ACTIVITY, MARKET SEGMENT, CHURN

AND AVERAGE REVENUE PER UNIT (ARPU) (a)

(Unaudited and in thousands)

                                 
   

For the three months ended

   

3/31/2022

 

12/31/2021

 

9/30/2021

 

6/30/2021

 

3/31/2021

 

12/31/2020

 

9/30/2020

 

6/30/2020

Paging units in service

                               

Beginning units in service (000’s)

 

         847   

 

         853   

 

         869   

 

         874   

 

         885   

 

         898   

 

         915   

 

         926   

Gross placements

 

           19   

 

           19   

 

           23   

 

           31   

 

           20   

 

           20   

 

           25   

 

           35   

Gross disconnects

 

          (28)  

 

          (25)  

 

          (39)  

 

          (36)  

 

          (31)  

 

          (33)  

 

          (42)  

 

          (46)  

Net change

 

            (9)  

 

            (6)  

 

          (16)  

 

            (5)  

 

          (11)  

 

          (13)  

 

          (17)  

 

          (11)  

Ending units in service

 

         838   

 

         847   

 

         853   

 

         869   

 

         874   

 

         885   

 

         898   

 

         915   

End of period units in service % of total (b)

                               

Healthcare

 

84.7 %

 

84.7 %

 

84.6 %

 

84.5 %

 

84.1 %

 

83.6 %

 

83.7 %

 

83.6 %

Government

 

4.7 %

 

4.8 %

 

4.8 %

 

4.9 %

 

4.8 %

 

5.3 %

 

5.3 %

 

5.5 %

Large enterprise

 

3.9 %

 

3.9 %

 

4.1 %

 

4.1 %

 

4.3 %

 

4.3 %

 

4.3 %

 

4.4 %

Other(b)

 

6.7 %

 

6.6 %

 

6.4 %

 

6.4 %

 

6.8 %

 

6.8 %

 

6.6 %

 

6.6 %

Total

 

100.0 %

 

100.0 %

 

100.0 %

 

100.0 %

 

100.0 %

 

100.0 %

 

100.0 %

 

100.0 %

Account size ending units in service (000’s)

                               

1 to 100 units

 

           54   

 

           55   

 

           57   

 

           58   

 

           59   

 

           61   

 

           63   

 

           65   

101 to 1,000 units

 

         150   

 

         154   

 

         154   

 

         155   

 

         163   

 

         167   

 

         167   

 

         165   

>1,000 units

 

         634   

 

         638   

 

         642   

 

         656   

 

         652   

 

         657   

 

         668   

 

         685   

Total

 

         838   

 

         847   

 

         853   

 

         869   

 

         874   

 

         885   

 

         898   

 

         915   

Account size net loss rate(c)

                               

1 to 100 units

 

(1.8) %

 

(3.5) %

 

(1.1) %

 

(1.7) %

 

(3.3) %

 

(3.2) %

 

(2.9) %

 

(3.1) %

101 to 1,000 units

 

(2.6) %

 

— %

 

(0.9) %

 

(4.9) %

 

(2.4) %

 

— %

 

1.5 %

 

(4.2) %

>1,000 units

 

(0.6) %

 

(0.6) %

 

(2.2) %

 

0.6 %

 

(0.8) %

 

(1.6) %

 

(2.5) %

 

(0.4) %

Total

 

(1.1) %

 

(0.7) %

 

(1.8) %

 

(0.6) %

 

(1.2) %

 

(1.4) %

 

(1.9) %

 

(1.3) %

Account size ARPU

                               

1 to 100 units

 

$    11.52   

 

$    11.58   

 

$    11.67   

 

$    11.69   

 

$    11.72   

 

$    11.62   

 

$    11.80   

 

$    11.65   

101 to 1,000 units

 

        8.24   

 

        8.30   

 

        8.38   

 

        8.35   

 

        8.33   

 

        8.35   

 

        8.37   

 

        8.24   

>1,000 units

 

        6.64   

 

        6.63   

 

        6.65   

 

        6.68   

 

        6.68   

 

        6.62   

 

        6.67   

 

        6.57   

Total

 

$      7.24   

 

$      7.26   

 

$      7.29   

 

$      7.32   

 

$      7.34   

 

$      7.30   

 

$      7.34   

 

$      7.24   

                                 

(a) Slight variations in totals are due to rounding.

(b) Other includes hospitality, resort and indirect units

(c) Net loss rate is net current period placements and disconnected units in service divided by prior period ending units in service.

   

 

SPOK HOLDINGS, INC.

RECONCILIATION OF NET LOSS TO EBITDA AND ADJUSTED EBITDA (a)

(Unaudited and in thousands)

         
   

For the three months ended

   

3/31/2022

 

3/31/2021

Net loss

 

$  (7,214)

 

$   (2,297)

Add back:

       

(Benefit from) provision for income taxes

 

                (1,400)

 

                    591

Other expenses

 

                      13

 

                      27

Interest income

 

                     (67)

 

                     (61)

Operating loss

 

                (8,668)

 

                (1,740)

Depreciation, amortization and accretion

 

                    934

 

                 2,727

EBITDA

 

$   (7,734)

 

$       987

Capitalized software development costs

 

                      —

 

                (2,920)

Stock-based compensation

 

                 1,115

 

                 2,239

Severance and restructuring

 

                 4,495

 

                      —

Adjusted EBITDA

 

$   (2,124)

 

$      306

 

(a) Slight variations in totals are due to rounding.

 

RECONCILIATION OF OPERATING EXPENSES TO ADJUSTED OPERATING EXPENSES (a)

(Unaudited and in thousands)

         
   

For the three months ended

   

3/31/2022

 

3/31/2021

Operating expenses

 

$             42,493

 

$             37,776

Add back:

       

Depreciation, amortization and accretion

 

                   (934)

 

                (2,727)

Capitalized software development costs

 

                      —

 

                 2,920

Severance and restructuring

 

                (4,495)

 

                      —

Adjusted operating expenses

 

$             37,064

 

$             37,969

 

(a) Slight variations in totals are due to rounding.

 

SPOK HOLDINGS, INC.

2022 FINANCIAL OUTLOOK

(Unaudited and in millions)

 
   

Guidance Range

   

From

 

To

Revenues

       

Wireless

 

$                                71.6

 

$                                77.0

Software

 

                                  54.4

 

                                  62.2

Total Revenues

 

$                              126.0

 

$                              139.2

         

Adjusted Operating Expenses (a)

 

$                              118.8

 

$                              128.6

         

Capital Expenditures

 

$                                  3.4

 

$                                  4.2

         
         
         

RECONCILIATION OF OPERATING EXPENSES TO ADJUSTED OPERATING EXPENSES (a)

(Unaudited and in millions)

 
   

Guidance Range

   

From

 

To

Operating expenses

 

$                              128.7

 

$                              142.3

Add back:

       

Depreciation, amortization and accretion

 

                                   (3.5)

 

                                   (3.5)

Severance and restructuring

 

$                                 (6.4)

 

$                               (10.2)

Adjusted operating expenses

 

$                              118.8

 

$                              128.6

         

(a) Adjusted operating expenses exclude depreciation, amortization and accretion, goodwill and capitalized software development impairment costs, and severance and restructuring costs, and includes capitalized software development costs.