|
FORM 10-Q
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x
|
Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
|
¨
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Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
|
SPOK HOLDINGS, INC.
(Exact name of registrant as specified in its charter)
|
DELAWARE
|
|
16-1694797
|
(State or other jurisdiction of
incorporation or organization)
|
|
(I.R.S. Employer
Identification No.)
|
|
Large accelerated filer
|
¨
|
Accelerated filer
|
x
|
|
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Non-accelerated filer
|
¨
|
Smaller reporting company
|
¨
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|
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|
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Emerging growth company
|
¨
|
|
|
|
|
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Securities Act.
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¨
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Page
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PART I.
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Item 1.
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Item 2.
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Item 3.
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Item 4.
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PART II.
|
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Item 1.
|
||
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Item 1A.
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||
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Item 2.
|
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Item 6.
|
||
|
(in thousands)
|
September 30, 2018
|
|
December 31, 2017
|
||||
ASSETS
|
(Unaudited)
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
95,233
|
|
|
$
|
107,157
|
|
Accounts receivable, net
|
34,440
|
|
|
32,279
|
|
||
Prepaid expenses and other
|
7,928
|
|
|
5,752
|
|
||
Inventory
|
1,663
|
|
|
1,672
|
|
||
Total current assets
|
139,264
|
|
|
146,860
|
|
||
Non-current assets:
|
|
|
|
||||
Property and equipment, net
|
12,655
|
|
|
13,399
|
|
||
Goodwill
|
133,031
|
|
|
133,031
|
|
||
Intangible assets, net
|
6,042
|
|
|
7,917
|
|
||
Deferred income tax assets
|
46,970
|
|
|
47,679
|
|
||
Other non-current assets
|
1,401
|
|
|
1,675
|
|
||
Total non-current assets
|
200,099
|
|
|
203,701
|
|
||
Total assets
|
$
|
339,363
|
|
|
$
|
350,561
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
1,070
|
|
|
$
|
1,305
|
|
Accrued compensation and benefits
|
11,584
|
|
|
11,018
|
|
||
Accrued taxes
|
2,587
|
|
|
2,547
|
|
||
Deferred revenue
|
32,299
|
|
|
31,414
|
|
||
Other current liabilities
|
3,464
|
|
|
4,610
|
|
||
Total current liabilities
|
51,004
|
|
|
50,894
|
|
||
Non-current liabilities:
|
|
|
|
||||
Deferred revenue
|
705
|
|
|
1,063
|
|
||
Other non-current liabilities
|
8,545
|
|
|
8,075
|
|
||
Total non-current liabilities
|
9,250
|
|
|
9,138
|
|
||
Total liabilities
|
60,254
|
|
|
60,032
|
|
||
Commitments and contingencies (Note 11)
|
|
|
|
|
|
||
Stockholders' equity:
|
|
|
|
||||
Preferred stock
|
$
|
—
|
|
|
$
|
—
|
|
Common stock
|
2
|
|
|
2
|
|
||
Additional paid-in capital
|
92,880
|
|
|
99,819
|
|
||
Accumulated other comprehensive loss
|
(2,217
|
)
|
|
(1,088
|
)
|
||
Retained earnings
|
188,444
|
|
|
191,796
|
|
||
Total stockholders’ equity
|
279,109
|
|
|
290,529
|
|
||
Total liabilities and stockholders' equity
|
$
|
339,363
|
|
|
$
|
350,561
|
|
|
|
For the Three Months Ended September 30,
|
|
For the Nine Months Ended September 30,
|
||||||||||||
(Unaudited and in thousands except share and per share amounts)
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Revenue:
|
|
|
|
|
|
|
|
|
||||||||
Wireless
|
|
$
|
23,259
|
|
|
$
|
25,110
|
|
|
$
|
71,186
|
|
|
$
|
76,609
|
|
Software
|
|
19,217
|
|
|
18,526
|
|
|
55,032
|
|
|
50,796
|
|
||||
Total revenue
|
|
42,476
|
|
|
43,636
|
|
|
126,218
|
|
|
127,405
|
|
||||
Operating expenses:
|
|
|
|
|
|
|
|
|
||||||||
Cost of revenue
|
|
7,782
|
|
|
7,069
|
|
|
22,914
|
|
|
21,295
|
|
||||
Research and development
|
|
5,934
|
|
|
5,001
|
|
|
17,845
|
|
|
13,768
|
|
||||
Service, rental and maintenance
|
|
7,787
|
|
|
7,875
|
|
|
23,235
|
|
|
23,885
|
|
||||
Selling and marketing
|
|
5,716
|
|
|
5,533
|
|
|
18,279
|
|
|
16,784
|
|
||||
General and administrative
|
|
13,673
|
|
|
12,058
|
|
|
38,377
|
|
|
35,706
|
|
||||
Depreciation, amortization and accretion
|
|
2,785
|
|
|
2,775
|
|
|
8,168
|
|
|
8,849
|
|
||||
Total operating expenses
|
|
43,677
|
|
|
40,311
|
|
|
128,818
|
|
|
120,287
|
|
||||
Operating (loss) income
|
|
(1,201
|
)
|
|
3,325
|
|
|
(2,600
|
)
|
|
7,118
|
|
||||
Interest income
|
|
384
|
|
|
214
|
|
|
1,009
|
|
|
490
|
|
||||
Other (expense) income
|
|
(110
|
)
|
|
359
|
|
|
(56
|
)
|
|
415
|
|
||||
(Loss) income before income taxes
|
|
(927
|
)
|
|
3,898
|
|
|
(1,647
|
)
|
|
8,023
|
|
||||
Benefit from (provision for) income taxes
|
|
446
|
|
|
(171
|
)
|
|
701
|
|
|
(1,945
|
)
|
||||
Net (loss) income
|
|
$
|
(481
|
)
|
|
$
|
3,727
|
|
|
$
|
(946
|
)
|
|
$
|
6,078
|
|
Basic and diluted net (loss) income per common share
|
|
$
|
(0.02
|
)
|
|
$
|
0.19
|
|
|
$
|
(0.05
|
)
|
|
$
|
0.30
|
|
Basic weighted average common shares outstanding
|
|
19,456,149
|
|
|
19,977,263
|
|
|
19,742,869
|
|
|
20,285,240
|
|
||||
Diluted weighted average common shares outstanding
|
|
19,456,149
|
|
|
20,008,321
|
|
|
19,742,869
|
|
|
20,362,774
|
|
||||
Cash dividends declared per common share
|
|
$
|
0.125
|
|
|
$
|
0.125
|
|
|
$
|
0.375
|
|
|
$
|
0.375
|
|
|
|
For the Three Months Ended September 30,
|
|
For the Nine Months Ended September 30,
|
||||||||||||
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
(Unaudited and in thousands)
|
|
|
|
|
|
|
||||||||||
Net (loss) income
|
|
$
|
(481
|
)
|
|
$
|
3,727
|
|
|
$
|
(946
|
)
|
|
$
|
6,078
|
|
Other comprehensive loss, net of tax:
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation adjustments
|
|
(367
|
)
|
|
(175
|
)
|
|
(965
|
)
|
|
(89
|
)
|
||||
Other comprehensive loss
|
|
(367
|
)
|
|
(175
|
)
|
|
(965
|
)
|
|
(89
|
)
|
||||
Comprehensive loss
|
|
$
|
(848
|
)
|
|
$
|
3,552
|
|
|
$
|
(1,911
|
)
|
|
$
|
5,989
|
|
|
|
For the Nine Months Ended September 30,
|
||||||
(Unaudited and in thousands)
|
|
2018
|
|
2017
|
||||
Cash flows provided by operating activities:
|
|
|
|
|
||||
Net (loss) income
|
|
$
|
(946
|
)
|
|
$
|
6,078
|
|
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
|
|
|
|
|
||||
Depreciation, amortization and accretion
|
|
8,168
|
|
|
8,849
|
|
||
Deferred income tax (benefit) expense
|
|
(1,000
|
)
|
|
1,118
|
|
||
Stock based compensation
|
|
3,922
|
|
|
2,815
|
|
||
Provision for doubtful accounts, service credits and other
|
|
1,681
|
|
|
767
|
|
||
Adjustment of non-cash transaction taxes
|
|
(156
|
)
|
|
(754
|
)
|
||
Changes in assets and liabilities:
|
|
|
|
|
||||
Accounts receivable
|
|
(2,534
|
)
|
|
(4,156
|
)
|
||
Prepaid expenses, inventory, and other assets
|
|
(1,160
|
)
|
|
(1,726
|
)
|
||
Accounts payable, accrued liabilities and other
|
|
(546
|
)
|
|
(230
|
)
|
||
Deferred revenue
|
|
5,198
|
|
|
1,313
|
|
||
Net cash provided by operating activities
|
|
12,627
|
|
|
14,074
|
|
||
Cash flows used in investing activities:
|
|
|
|
|
||||
Purchase of property and equipment
|
|
(5,094
|
)
|
|
(7,034
|
)
|
||
Net cash used in investing activities
|
|
(5,094
|
)
|
|
(7,034
|
)
|
||
Cash flows used in financing activities:
|
|
|
|
|
||||
Cash distributions to stockholders
|
|
(7,631
|
)
|
|
(12,733
|
)
|
||
Purchase of common stock for tax withholding on vested equity awards
|
|
(978
|
)
|
|
—
|
|
||
Purchase of common stock (including commissions)
|
|
(10,026
|
)
|
|
(10,024
|
)
|
||
Proceeds from issuance of common stock under the Employee Stock Purchase Plan
|
|
143
|
|
|
130
|
|
||
Net cash used in financing activities
|
|
(18,492
|
)
|
|
(22,627
|
)
|
||
Effect of exchange rate on cash
|
|
(965
|
)
|
|
(89
|
)
|
||
Net decrease in cash and cash equivalents
|
|
(11,924
|
)
|
|
(15,676
|
)
|
||
Cash and cash equivalents, beginning of period
|
|
107,157
|
|
|
125,816
|
|
||
Cash and cash equivalents, end of period
|
|
$
|
95,233
|
|
|
$
|
110,140
|
|
Supplemental disclosure:
|
|
|
|
|
||||
Income taxes paid
|
|
$
|
726
|
|
|
$
|
2,300
|
|
|
For the Three Months Ended September 30,
|
|
For the Nine Months Ended September 30,
|
||||||||||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||||||||||
(Dollars in thousands)
|
ASC 606
|
|
ASC 605
|
|
ASC 605
|
|
ASC 606
|
|
ASC 605
|
|
ASC 605
|
||||||||||||
Condensed Consolidated Statement of Operations
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Revenues: Software
|
$
|
19,217
|
|
|
$
|
17,776
|
|
|
$
|
18,526
|
|
|
$
|
55,032
|
|
|
$
|
54,100
|
|
|
$
|
50,796
|
|
Operating expenses: Selling and marketing
|
$
|
5,716
|
|
|
$
|
5,936
|
|
|
$
|
5,533
|
|
|
$
|
18,279
|
|
|
$
|
18,158
|
|
|
$
|
16,784
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Condensed Consolidated Statement of Comprehensive Income
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Other comprehensive loss, net of tax:
foreign currency translation adjustments |
$
|
(367
|
)
|
|
$
|
(360
|
)
|
|
$
|
(175
|
)
|
|
$
|
(965
|
)
|
|
$
|
(833
|
)
|
|
$
|
(89
|
)
|
|
September 30, 2018
|
|
December 31, 2017
|
||||||||
(Dollars in thousands)
|
ASC 606
|
|
ASC 605
|
|
ASC 605
|
||||||
Condensed Consolidated Balance Sheets
|
|
|
|
|
|
||||||
Current assets: Accounts receivable, net
|
$
|
34,440
|
|
|
$
|
30,991
|
|
|
$
|
32,279
|
|
Current assets: Prepaid expenses and other
|
$
|
7,928
|
|
|
$
|
7,367
|
|
|
$
|
5,752
|
|
Current liabilities: Deferred revenue
|
$
|
32,299
|
|
|
$
|
35,517
|
|
|
$
|
31,414
|
|
Non-current liabilities: Deferred revenue
|
$
|
705
|
|
|
$
|
883
|
|
|
$
|
1,063
|
|
Stockholder equity: Accumulated other comprehensive loss
|
$
|
(2,217
|
)
|
|
$
|
(1,965
|
)
|
|
$
|
(1,088
|
)
|
Stockholder equity: Retained earnings
|
$
|
188,444
|
|
|
$
|
180,786
|
|
|
$
|
191,796
|
|
|
For the Three months ended September 30, 2018
|
|
For the Nine Months Ended September 30,
|
||||||||||||
(Dollars in thousands)
|
2018
|
|
2017
(1)
|
|
2018
|
|
2017
(1)
|
||||||||
Wireless products and services
|
$
|
23,259
|
|
|
$
|
25,110
|
|
|
$
|
71,186
|
|
|
$
|
76,609
|
|
Subscription
|
1,779
|
|
|
577
|
|
|
2,640
|
|
|
1,744
|
|
||||
Software licenses
|
1,396
|
|
|
1,995
|
|
|
6,904
|
|
|
4,807
|
|
||||
Professional services
|
4,555
|
|
|
5,189
|
|
|
12,988
|
|
|
12,192
|
|
||||
Hardware
|
1,296
|
|
|
1,102
|
|
|
3,428
|
|
|
3,202
|
|
||||
Maintenance
|
10,191
|
|
|
9,663
|
|
|
29,072
|
|
|
28,851
|
|
||||
Total revenue
|
$
|
42,476
|
|
|
$
|
43,636
|
|
|
$
|
126,218
|
|
|
$
|
127,405
|
|
|
For the Three months ended September 30, 2018
|
|
For the Nine Months Ended September 30,
|
||||||||||||
(Dollars in thousands)
|
2018
|
|
2017
(1)
|
|
2018
|
|
2017
(1)
|
||||||||
Revenue
|
|
|
|
|
|
|
|
||||||||
United States
|
$
|
41,198
|
|
|
$
|
42,448
|
|
|
$
|
122,243
|
|
|
$
|
123,822
|
|
International
|
1,278
|
|
|
1,188
|
|
|
3,975
|
|
|
3,583
|
|
||||
Total revenue
|
$
|
42,476
|
|
|
$
|
43,636
|
|
|
$
|
126,218
|
|
|
$
|
127,405
|
|
(Dollars in thousands)
|
December 31, 2017
|
|
Additions
|
|
Revenue Recognized
(1)
|
|
September 30, 2018
|
||||||||
Deferred Revenue
|
$
|
32,477
|
|
|
$
|
48,273
|
|
|
$
|
(47,746
|
)
|
|
$
|
33,004
|
|
(Dollars in thousands)
|
December 31, 2017
|
|
Additions
(1)
|
|
Commissions Recognized
|
|
September 30, 2018
|
||||||||
Deferred Commissions
|
$
|
1,676
|
|
|
$
|
4,894
|
|
|
$
|
(4,393
|
)
|
|
$
|
2,177
|
|
|
For the Three Months Ended September 30,
|
|
For the Nine Months Ended September 30,
|
||||||||||||
(Dollars in thousands)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Depreciation
|
|
|
|
|
|
|
|
||||||||
Leasehold improvements
|
$
|
60
|
|
|
$
|
50
|
|
|
$
|
195
|
|
|
$
|
175
|
|
Asset retirement costs
|
(74
|
)
|
|
(97
|
)
|
|
(226
|
)
|
|
(292
|
)
|
||||
Paging and computer equipment
|
1,938
|
|
|
1,990
|
|
|
5,608
|
|
|
6,077
|
|
||||
Furniture, fixtures and vehicles
|
100
|
|
|
66
|
|
|
310
|
|
|
207
|
|
||||
Total depreciation
|
2,024
|
|
|
2,009
|
|
|
5,887
|
|
|
6,167
|
|
||||
Amortization
|
625
|
|
|
625
|
|
|
1,875
|
|
|
2,261
|
|
||||
Accretion
|
136
|
|
|
141
|
|
|
406
|
|
|
421
|
|
||||
Total depreciation, amortization and accretion expense
|
$
|
2,785
|
|
|
$
|
2,775
|
|
|
$
|
8,168
|
|
|
$
|
8,849
|
|
(Dollars in thousands)
|
Useful Life
(In Years) |
|
September 30, 2018
|
|
December 31, 2017
|
||||
Leasehold improvements
|
shorter of useful life or lease term
|
|
$
|
4,139
|
|
|
$
|
4,107
|
|
Asset retirement costs
|
1-5
|
|
3,272
|
|
|
3,228
|
|
||
Paging and computer equipment
|
1-5
|
|
100,400
|
|
|
103,520
|
|
||
Furniture, fixtures and vehicles
|
3-5
|
|
4,262
|
|
|
4,545
|
|
||
Total property and equipment
|
|
|
112,073
|
|
|
115,400
|
|
||
Accumulated depreciation
|
|
|
(99,418
|
)
|
|
(102,001
|
)
|
||
Total property and equipment, net
|
|
|
$
|
12,655
|
|
|
$
|
13,399
|
|
(Dollars in thousands)
|
September 30, 2018
|
|
December 31, 2017
|
||||
Accrued network costs, asset retirement obligations and other
|
$
|
2,170
|
|
|
$
|
2,173
|
|
Accrued outside services
|
1,294
|
|
|
2,437
|
|
||
Total other current liabilities
|
$
|
3,464
|
|
|
$
|
4,610
|
|
(Dollars in thousands)
|
September 30, 2018
|
|
December 31, 2017
|
||||
Asset retirement obligations
|
$
|
7,462
|
|
|
$
|
7,174
|
|
Other
|
1,083
|
|
|
901
|
|
||
Total other non-current liabilities
|
$
|
8,545
|
|
|
$
|
8,075
|
|
|
|
|
|
September 30, 2018
|
||||||||||
(Dollars in thousands)
|
|
Useful Life
(In Years) |
|
Gross Carrying
Amount |
|
Accumulated
Amortization |
|
Net Balance
|
||||||
Customer relationships
|
|
10
|
|
$
|
25,002
|
|
|
$
|
(18,960
|
)
|
|
$
|
6,042
|
|
Total amortizable intangible assets
|
|
|
|
$
|
25,002
|
|
|
$
|
(18,960
|
)
|
|
$
|
6,042
|
|
|
(Dollars in thousands)
|
||
For the remaining three months ending December 31, 2018
|
$
|
625
|
|
For the year ending December 31:
|
|
||
2019
|
2,500
|
|
|
2020
|
2,500
|
|
|
2021
|
417
|
|
|
Total amortizable intangible assets
|
$
|
6,042
|
|
(Dollars in thousands)
|
|
Short-Term
Portion |
|
Long-Term
Portion |
|
Total
|
||||||
Balance at January 1, 2018
|
|
$
|
235
|
|
|
$
|
7,174
|
|
|
$
|
7,409
|
|
Accretion
|
|
(68
|
)
|
|
474
|
|
|
406
|
|
|||
Amounts paid
|
|
(129
|
)
|
|
—
|
|
|
(129
|
)
|
|||
Increases
|
|
—
|
|
|
44
|
|
|
44
|
|
|||
Reclassifications
|
|
230
|
|
|
(230
|
)
|
|
—
|
|
|||
Balance at September 30, 2018
|
|
$
|
268
|
|
|
$
|
7,462
|
|
|
$
|
7,730
|
|
|
(Dollars in thousands)
|
||
Balance at January 1, 2018
|
$
|
290,529
|
|
Adjustment to beginning balance resulting from adoption of ASC 606
|
6,671
|
|
|
Net loss for the nine months, ended September 30, 2018
|
(946
|
)
|
|
Estimated tax impact resulting from adoption of ASC 606
|
(1,614
|
)
|
|
Cash dividends declared
|
(7,627
|
)
|
|
Common stock repurchase program
|
(10,026
|
)
|
|
Amortization of stock based compensation
|
3,922
|
|
|
Repurchase of common stock for tax withholdings
|
(978
|
)
|
|
Cumulative translation adjustment
|
(965
|
)
|
|
Issuance of common stock under the Employee Stock Purchase Plan
|
143
|
|
|
Balance at September 30, 2018
|
$
|
279,109
|
|
Declaration Date
|
|
Record Date
|
|
Payment Date
|
|
Per Share Amount
|
|
Total Declared
(1)
|
||||
|
|
|
|
|
|
|
|
(Dollars in thousands)
|
||||
February 28, 2018
|
|
March 16, 2018
|
|
March 30, 2018
|
|
$
|
0.125
|
|
|
$
|
2,589
|
|
April 25, 2018
|
|
May 25, 2018
|
|
June 22, 2018
|
|
0.125
|
|
|
2,538
|
|
||
July 25, 2018
|
|
August 17, 2018
|
|
September 10, 2018
|
|
0.125
|
|
|
2,500
|
|
||
|
|
Total
|
|
|
|
$
|
0.375
|
|
|
$
|
7,627
|
|
Period
|
|
Total Number of Shares Purchased
|
|
Average Price Paid Per Share
(1)
|
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
|
|
Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs
(2)
|
||||||
|
|
|
|
|
|
|
|
(Dollars in thousands)
|
||||||
Three Months Ended March 31, 2018
|
|
127,792
|
|
|
$
|
15.04
|
|
|
127,792
|
|
|
$
|
8,077
|
|
Three Months Ended June 30, 2018
|
|
501,782
|
|
|
14.99
|
|
|
501,782
|
|
|
$
|
558
|
|
|
Three Months Ended September 30, 2018
|
|
36,542
|
|
|
$
|
15.25
|
|
|
36,542
|
|
|
10,000
|
|
|
Total
|
|
666,116
|
|
|
$
|
15.01
|
|
|
666,116
|
|
|
|
|
For the Three Months Ended September 30,
|
|
For the Nine Months Ended September 30,
|
||||||||||||
(in thousands, except for share and per share amounts)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Numerator:
|
|
|
|
|
|
|
|
||||||||
Net (loss) income
|
$
|
(481
|
)
|
|
$
|
3,727
|
|
|
$
|
(946
|
)
|
|
$
|
6,078
|
|
|
|
|
|
|
|
|
|
||||||||
Denominator:
|
|
|
|
|
|
|
|
||||||||
Basic weighted average outstanding shares of common stock
|
19,456,149
|
|
|
19,977,263
|
|
|
19,742,869
|
|
|
20,285,240
|
|
||||
Diluted weighted average outstanding shares of common stock
|
19,456,149
|
|
|
20,008,321
|
|
|
19,742,869
|
|
|
20,362,774
|
|
||||
Basic and diluted net (loss) income per common share
|
$
|
(0.02
|
)
|
|
$
|
0.19
|
|
|
$
|
(0.05
|
)
|
|
$
|
0.30
|
|
|
For the Three Months Ended September 30,
|
|
For the Nine Months Ended September 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Restricted stock units
|
$
|
107,139
|
|
|
$
|
—
|
|
|
$
|
162,648
|
|
|
$
|
—
|
|
|
Activity
|
|
Total equity securities available at January 1, 2018
|
1,140,658
|
|
RSU and restricted stock awarded to eligible employees, net of forfeitures
|
(328,428
|
)
|
Total equity securities available at September 30, 2018
|
812,230
|
|
|
Activity
|
|
Total ESPP equity securities available at January 1, 2018
|
228,279
|
|
ESPP common stock purchased by eligible employees
|
11,581
|
|
Total ESPP securities available at September 30, 2018
|
216,698
|
|
|
For the Three Months Ended September 30,
|
|
For the Nine Months Ended September 30,
|
||||||||||||
(Dollars in thousands)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Performance-based RSUs
|
$
|
655
|
|
|
$
|
388
|
|
|
$
|
1,677
|
|
|
$
|
1,385
|
|
Time-based and restricted stock
|
750
|
|
|
458
|
|
|
2,194
|
|
|
1,384
|
|
||||
ESPP
|
18
|
|
|
16
|
|
|
51
|
|
|
46
|
|
||||
Total stock based compensation
|
$
|
1,423
|
|
|
$
|
862
|
|
|
$
|
3,922
|
|
|
$
|
2,815
|
|
•
|
Cost of revenue
. These are expenses primarily for hardware, third-party software, outside service expenses and payroll and related expenses for our professional services, logistics, customer support and maintenance staff.
|
•
|
Research and Development.
These expenses relate primarily to the development of new software products and the ongoing maintenance and enhancement of existing products. This classification consists primarily of employee payroll and related expenses, outside services related to the design, development, testing and enhancement of our solutions and to a lesser extent hardware equipment.
|
•
|
Service, rental and maintenance
. These are expenses associated with the operation of our paging networks. Expenses consist largely of site rent expenses for transmitter locations, telecommunication expenses to deliver messages over our paging networks, and payroll and related expenses for our engineering and pager repair functions. We actively pursue opportunities to consolidate
|
•
|
Selling and marketing
. The sales and marketing staff are involved in selling our communication solutions primarily in the United States. These expenses support our efforts to maintain gross placements of units in service, which mitigated the impact of disconnects on our wireless revenue base, and to identify business opportunities for additional or future software sales. We have a centralized marketing function, which is focused on supporting our products and vertical sales efforts by strengthening our brand, generating sales leads and facilitating the sales process. These marketing functions are accomplished through targeted email campaigns, webinars, regional and national user conferences, monthly newsletters and participation at industry trade shows. Expenses consist largely of payroll and related expenses, commissions and other costs such as travel and advertising costs.
|
•
|
General and administrative
. These are expenses associated with information technology and administrative functions, which includes finance and accounting, human resources and executive management. This classification consists primarily of payroll and related expenses, outside service expenses, taxes, licenses and permit expenses, and facility rent expenses.
|
|
For the Three Months Ended September 30,
|
|
Change
|
|
For the Nine Months Ended September 30,
|
|
Change
|
||||||||||||||||||||||
(Dollars in thousands)
|
2018
|
|
2017
|
|
Total
|
|
%
|
|
2018
|
|
2017
|
|
Total
|
|
%
|
||||||||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Wireless
|
$
|
23,259
|
|
|
$
|
25,110
|
|
|
$
|
(1,851
|
)
|
|
(7.4
|
)%
|
|
$
|
71,186
|
|
|
$
|
76,609
|
|
|
$
|
(5,423
|
)
|
|
(7.1
|
)%
|
Software
|
19,217
|
|
|
18,526
|
|
|
691
|
|
|
3.7
|
%
|
|
55,032
|
|
|
50,796
|
|
|
4,236
|
|
|
8.3
|
%
|
||||||
Total revenue
|
42,476
|
|
|
43,636
|
|
|
(1,160
|
)
|
|
(2.7
|
)%
|
|
126,218
|
|
|
127,405
|
|
|
(1,187
|
)
|
|
(0.9
|
)%
|
||||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Cost of revenue
|
7,782
|
|
|
7,069
|
|
|
713
|
|
|
10.1
|
%
|
|
22,914
|
|
|
21,295
|
|
|
1,619
|
|
|
7.6
|
%
|
||||||
Research and development
|
5,934
|
|
|
5,001
|
|
|
933
|
|
|
18.7
|
%
|
|
17,845
|
|
|
13,768
|
|
|
4,077
|
|
|
29.6
|
%
|
||||||
Service, rental and maintenance
|
7,787
|
|
|
7,875
|
|
|
(88
|
)
|
|
(1.1
|
)%
|
|
23,235
|
|
|
23,885
|
|
|
(650
|
)
|
|
(2.7
|
)%
|
||||||
Selling and marketing
|
5,716
|
|
|
5,533
|
|
|
183
|
|
|
3.3
|
%
|
|
18,279
|
|
|
16,784
|
|
|
1,495
|
|
|
8.9
|
%
|
||||||
General and administrative
|
13,673
|
|
|
12,058
|
|
|
1,615
|
|
|
13.4
|
%
|
|
38,377
|
|
|
35,706
|
|
|
2,671
|
|
|
7.5
|
%
|
||||||
Depreciation, amortization and accretion
|
2,785
|
|
|
2,775
|
|
|
10
|
|
|
0.4
|
%
|
|
8,168
|
|
|
8,849
|
|
|
(681
|
)
|
|
(7.7
|
)%
|
||||||
Total operating expenses
|
43,677
|
|
|
40,311
|
|
|
3,366
|
|
|
8.4
|
%
|
|
128,818
|
|
|
120,287
|
|
|
8,531
|
|
|
7.1
|
%
|
||||||
Operating (loss) income
|
(1,201
|
)
|
|
3,325
|
|
|
(4,526
|
)
|
|
(136.1
|
)%
|
|
(2,600
|
)
|
|
7,118
|
|
|
(9,718
|
)
|
|
(136.5
|
)%
|
||||||
Interest income
|
384
|
|
|
214
|
|
|
170
|
|
|
79.4
|
%
|
|
1,009
|
|
|
490
|
|
|
519
|
|
|
105.9
|
%
|
||||||
Other (expense) income
|
(110
|
)
|
|
359
|
|
|
(469
|
)
|
|
(130.6
|
)%
|
|
(56
|
)
|
|
415
|
|
|
(471
|
)
|
|
(113.5
|
)%
|
||||||
(Loss) income before income taxes
|
(927
|
)
|
|
3,898
|
|
|
(4,825
|
)
|
|
(123.8
|
)%
|
|
(1,647
|
)
|
|
8,023
|
|
|
(9,670
|
)
|
|
(120.5
|
)%
|
||||||
Benefit from (provision for) income taxes
|
446
|
|
|
(171
|
)
|
|
617
|
|
|
(360.8
|
)%
|
|
701
|
|
|
(1,945
|
)
|
|
2,646
|
|
|
(136.0
|
)%
|
||||||
Net (loss) income
|
$
|
(481
|
)
|
|
$
|
3,727
|
|
|
$
|
(4,208
|
)
|
|
(112.9
|
)%
|
|
$
|
(946
|
)
|
|
$
|
6,078
|
|
|
$
|
(7,024
|
)
|
|
(115.6
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Supplemental Information
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
FTEs
|
603
|
|
|
599
|
|
|
4
|
|
|
0.7
|
%
|
|
603
|
|
|
599
|
|
|
4
|
|
|
0.7
|
%
|
||||||
Active transmitters
|
3,942
|
|
|
4,042
|
|
|
(100
|
)
|
|
(2.5
|
)%
|
|
3,942
|
|
|
4,042
|
|
|
(100
|
)
|
|
(2.5
|
)%
|
|
For the Three Months Ended September 30,
|
|
Change
|
|
For the Nine Months Ended September 30,
|
|
Change
|
||||||||||||||||||||||
(Dollars in thousands)
|
2018
(1)
|
|
2017
|
|
Total
|
|
%
|
|
2018
(1)
|
|
2017
|
|
Total
|
|
%
|
||||||||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Wireless
|
$
|
23,259
|
|
|
$
|
25,110
|
|
|
$
|
(1,851
|
)
|
|
(7.4
|
)%
|
|
$
|
71,186
|
|
|
$
|
76,609
|
|
|
$
|
(5,423
|
)
|
|
(7.1
|
)%
|
Software
|
17,776
|
|
|
18,526
|
|
|
(750
|
)
|
|
(4.0
|
)%
|
|
54,100
|
|
|
50,796
|
|
|
3,304
|
|
|
6.5
|
%
|
||||||
Total revenue
|
41,035
|
|
|
43,636
|
|
|
(2,601
|
)
|
|
(6.0
|
)%
|
|
125,286
|
|
|
127,405
|
|
|
(2,119
|
)
|
|
(1.7
|
)%
|
||||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Cost of revenue
|
7,782
|
|
|
7,069
|
|
|
713
|
|
|
10.1
|
%
|
|
22,910
|
|
|
21,295
|
|
|
1,615
|
|
|
7.6
|
%
|
||||||
Research and development
|
5,934
|
|
|
5,001
|
|
|
933
|
|
|
18.7
|
%
|
|
17,845
|
|
|
13,768
|
|
|
4,077
|
|
|
29.6
|
%
|
||||||
Service, rental and maintenance
|
7,787
|
|
|
7,875
|
|
|
(88
|
)
|
|
(1.1
|
)%
|
|
23,235
|
|
|
23,885
|
|
|
(650
|
)
|
|
(2.7
|
)%
|
||||||
Selling and marketing
|
5,936
|
|
|
5,533
|
|
|
403
|
|
|
7.3
|
%
|
|
18,158
|
|
|
16,784
|
|
|
1,374
|
|
|
8.2
|
%
|
||||||
General and administrative
|
13,673
|
|
|
12,058
|
|
|
1,615
|
|
|
13.4
|
%
|
|
38,377
|
|
|
35,706
|
|
|
2,671
|
|
|
7.5
|
%
|
||||||
Depreciation, amortization and accretion
|
2,785
|
|
|
2,775
|
|
|
10
|
|
|
0.4
|
%
|
|
8,168
|
|
|
8,849
|
|
|
(681
|
)
|
|
(7.7
|
)%
|
||||||
Total operating expenses
|
43,897
|
|
|
40,311
|
|
|
3,586
|
|
|
8.9
|
%
|
|
128,693
|
|
|
120,287
|
|
|
8,406
|
|
|
7.0
|
%
|
||||||
Operating (loss) income
|
(2,862
|
)
|
|
3,325
|
|
|
(6,187
|
)
|
|
(186.1
|
)%
|
|
(3,407
|
)
|
|
7,118
|
|
|
(10,525
|
)
|
|
(147.9
|
)%
|
||||||
Interest income
|
384
|
|
|
214
|
|
|
170
|
|
|
79.4
|
%
|
|
1,009
|
|
|
490
|
|
|
519
|
|
|
105.9
|
%
|
||||||
Other (expense) income
|
(110
|
)
|
|
359
|
|
|
(469
|
)
|
|
(130.6
|
)%
|
|
(71
|
)
|
|
415
|
|
|
(486
|
)
|
|
(117.1
|
)%
|
||||||
(Loss) income before income taxes
|
(2,588
|
)
|
|
3,898
|
|
|
(6,486
|
)
|
|
(166.4
|
)%
|
|
(2,469
|
)
|
|
8,023
|
|
|
(10,492
|
)
|
|
(130.8
|
)%
|
||||||
Benefit from (provision for) income taxes
|
446
|
|
|
(171
|
)
|
|
617
|
|
|
(360.8
|
)%
|
|
701
|
|
|
(1,945
|
)
|
|
2,646
|
|
|
(136.0
|
)%
|
||||||
Net (loss) income
|
$
|
(2,142
|
)
|
|
$
|
3,727
|
|
|
$
|
(5,869
|
)
|
|
(157.5
|
)%
|
|
$
|
(1,768
|
)
|
|
$
|
6,078
|
|
|
$
|
(7,846
|
)
|
|
(129.1
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Supplemental Information
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
FTEs
|
603
|
|
|
599
|
|
|
4
|
|
|
0.7
|
%
|
|
603
|
|
|
599
|
|
|
4
|
|
|
0.7
|
%
|
||||||
Active transmitters
|
3,942
|
|
|
4,042
|
|
|
(100
|
)
|
|
(2.5
|
)%
|
|
3,942
|
|
|
4,042
|
|
|
(100
|
)
|
|
(2.5
|
)%
|
|
For the Three Months Ended September 30,
|
|
Change
|
|
For the Nine Months Ended September 30,
|
|
Change
|
||||||||||||||||||||||
(Dollars in thousands)
|
2018
|
|
2017
|
|
Total
|
|
%
|
|
2018
|
|
2017
|
|
Total
|
|
%
|
||||||||||||||
Revenue - wireless:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Paging revenue
|
$
|
22,442
|
|
|
$
|
24,128
|
|
|
$
|
(1,686
|
)
|
|
(7.0
|
)%
|
|
$
|
68,574
|
|
|
$
|
73,672
|
|
|
$
|
(5,098
|
)
|
|
(6.9
|
)%
|
Product and other revenue
|
817
|
|
|
982
|
|
|
(165
|
)
|
|
(16.8
|
)%
|
|
2,612
|
|
|
2,937
|
|
|
(325
|
)
|
|
(11.1
|
)%
|
||||||
Total wireless revenue
|
23,259
|
|
|
25,110
|
|
|
(1,851
|
)
|
|
(7.4
|
)%
|
|
71,186
|
|
|
76,609
|
|
|
(5,423
|
)
|
|
(7.1
|
)%
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Revenue - software:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Subscription
|
$
|
1,779
|
|
|
$
|
577
|
|
|
$
|
1,202
|
|
|
208.3
|
%
|
|
$
|
2,640
|
|
|
$
|
1,744
|
|
|
$
|
896
|
|
|
51.4
|
%
|
License
|
1,396
|
|
|
1,995
|
|
|
(599
|
)
|
|
(30.0
|
)%
|
|
6,904
|
|
|
4,807
|
|
|
2,097
|
|
|
43.6
|
%
|
||||||
Services
|
4,555
|
|
|
5,189
|
|
|
(634
|
)
|
|
(12.2
|
)%
|
|
12,988
|
|
|
12,192
|
|
|
796
|
|
|
6.5
|
%
|
||||||
Equipment
|
1,296
|
|
|
1,102
|
|
|
194
|
|
|
17.6
|
%
|
|
3,429
|
|
|
3,202
|
|
|
227
|
|
|
7.1
|
%
|
||||||
Operations revenue
|
9,026
|
|
|
8,863
|
|
|
163
|
|
|
1.8
|
%
|
|
25,961
|
|
|
21,945
|
|
|
4,016
|
|
|
18.3
|
%
|
||||||
Maintenance revenue
|
10,191
|
|
|
9,663
|
|
|
528
|
|
|
5.5
|
%
|
|
29,071
|
|
|
28,851
|
|
|
220
|
|
|
0.8
|
%
|
||||||
Total software revenue
|
19,217
|
|
|
18,526
|
|
|
691
|
|
|
3.7
|
%
|
|
55,032
|
|
|
50,796
|
|
|
4,236
|
|
|
8.3
|
%
|
||||||
Total revenue
|
$
|
42,476
|
|
|
$
|
43,636
|
|
|
$
|
(1,160
|
)
|
|
(2.7
|
)%
|
|
$
|
126,218
|
|
|
$
|
127,405
|
|
|
$
|
(1,187
|
)
|
|
(0.9
|
)%
|
|
For the Three Months Ended September 30,
|
|
Change
|
|
For the Nine Months Ended September 30,
|
|
Change
|
||||||||||||||||||||||
(Dollars in thousands)
|
2018
(1)
|
|
2017
|
|
Total
|
|
%
|
|
2018
(1)
|
|
2017
|
|
Total
|
|
%
|
||||||||||||||
Revenue - software
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Subscription
|
$
|
510
|
|
|
$
|
577
|
|
|
$
|
(67
|
)
|
|
(11.6
|
)%
|
|
$
|
1,688
|
|
|
$
|
1,744
|
|
|
$
|
(56
|
)
|
|
(3.2
|
)%
|
License
|
1,646
|
|
|
1,995
|
|
|
(349
|
)
|
|
(17.5
|
)%
|
|
5,346
|
|
|
4,807
|
|
|
539
|
|
|
11.2
|
%
|
||||||
Services
|
4,364
|
|
|
5,189
|
|
|
(825
|
)
|
|
(15.9
|
)%
|
|
13,564
|
|
|
12,192
|
|
|
1,372
|
|
|
11.3
|
%
|
||||||
Equipment
|
1,332
|
|
|
1,102
|
|
|
230
|
|
|
20.9
|
%
|
|
3,465
|
|
|
3,202
|
|
|
263
|
|
|
8.2
|
%
|
||||||
Operations revenue
|
7,852
|
|
|
8,863
|
|
|
(1,011
|
)
|
|
(11.4
|
)%
|
|
24,063
|
|
|
21,945
|
|
|
2,118
|
|
|
9.7
|
%
|
||||||
Maintenance revenue
|
9,924
|
|
|
9,663
|
|
|
261
|
|
|
2.7
|
%
|
|
30,037
|
|
|
28,851
|
|
|
1,186
|
|
|
4.1
|
%
|
||||||
Total software revenue
|
$
|
17,776
|
|
|
$
|
18,526
|
|
|
$
|
(750
|
)
|
|
(4.0
|
)%
|
|
$
|
54,100
|
|
|
$
|
50,796
|
|
|
$
|
3,304
|
|
|
6.5
|
%
|
|
For the Three Months Ended September 30,
|
|
Change
|
|
For the Nine Months Ended September 30,
|
|
Change
|
||||||||||||||||||||||
(Dollars in thousands)
|
2018
|
|
2017
|
|
Total
|
|
%
|
|
2018
|
|
2017
|
|
Total
|
|
%
|
||||||||||||||
Payroll and related
|
$
|
4,923
|
|
|
$
|
4,330
|
|
|
$
|
593
|
|
|
13.7
|
%
|
|
$
|
14,667
|
|
|
$
|
13,432
|
|
|
$
|
1,235
|
|
|
9.2
|
%
|
Cost of sales
|
2,264
|
|
|
2,228
|
|
|
36
|
|
|
1.6
|
%
|
|
6,500
|
|
|
6,128
|
|
|
372
|
|
|
6.1
|
%
|
||||||
Stock based compensation
|
75
|
|
|
4
|
|
|
71
|
|
|
1,775.0
|
%
|
|
205
|
|
|
121
|
|
|
84
|
|
|
69.4
|
%
|
||||||
Other
|
520
|
|
|
507
|
|
|
13
|
|
|
2.6
|
%
|
|
1,542
|
|
|
1,614
|
|
|
(72
|
)
|
|
(4.5
|
)%
|
||||||
Total cost of revenue
|
$
|
7,782
|
|
|
$
|
7,069
|
|
|
$
|
713
|
|
|
10.1
|
%
|
|
$
|
22,914
|
|
|
$
|
21,295
|
|
|
$
|
1,619
|
|
|
7.6
|
%
|
FTEs
|
185
|
|
|
185
|
|
|
—
|
|
|
—
|
%
|
|
185
|
|
|
185
|
|
|
—
|
|
|
—
|
%
|
|
For the Three Months Ended September 30,
|
|
Change
|
|
For the Nine Months Ended September 30,
|
|
Change
|
||||||||||||||||||||||
(Dollars in thousands)
|
2018
|
|
2017
|
|
Total
|
|
%
|
|
2018
|
|
2017
|
|
Total
|
|
%
|
||||||||||||||
Payroll and related
|
$
|
4,709
|
|
|
$
|
4,005
|
|
|
$
|
704
|
|
|
17.6
|
%
|
|
$
|
13,217
|
|
|
$
|
11,216
|
|
|
$
|
2,001
|
|
|
17.8
|
%
|
Outside services
|
1,040
|
|
|
849
|
|
|
191
|
|
|
22.5
|
%
|
|
4,035
|
|
|
2,025
|
|
|
2,010
|
|
|
99.3
|
%
|
||||||
Stock based compensation
|
71
|
|
|
43
|
|
|
28
|
|
|
65.1
|
%
|
|
231
|
|
|
163
|
|
|
68
|
|
|
41.7
|
%
|
||||||
Other
|
114
|
|
|
104
|
|
|
10
|
|
|
9.6
|
%
|
|
362
|
|
|
364
|
|
|
(2
|
)
|
|
(0.5
|
)%
|
||||||
Total research and development
|
$
|
5,934
|
|
|
$
|
5,001
|
|
|
$
|
933
|
|
|
18.7
|
%
|
|
$
|
17,845
|
|
|
$
|
13,768
|
|
|
$
|
4,077
|
|
|
29.6
|
%
|
FTEs
|
117
|
|
|
113
|
|
|
4
|
|
|
3.5
|
%
|
|
117
|
|
|
113
|
|
|
4
|
|
|
3.5
|
%
|
|
For the Three Months Ended September 30,
|
|
Change
|
|
For the Nine Months Ended September 30,
|
|
Change
|
||||||||||||||||||||||
(Dollars in thousands)
|
2018
|
|
2017
|
|
Total
|
|
%
|
|
2018
|
|
2017
|
|
Total
|
|
%
|
||||||||||||||
Payroll and related
|
$
|
2,866
|
|
|
$
|
2,582
|
|
|
$
|
284
|
|
|
11.0
|
%
|
|
$
|
8,177
|
|
|
$
|
7,854
|
|
|
$
|
323
|
|
|
4.1
|
%
|
Site rent
|
3,482
|
|
|
3,534
|
|
|
(52
|
)
|
|
(1.5
|
)%
|
|
10,516
|
|
|
10,758
|
|
|
(242
|
)
|
|
(2.2
|
)%
|
||||||
Telecommunications
|
950
|
|
|
1,060
|
|
|
(110
|
)
|
|
(10.4
|
)%
|
|
2,783
|
|
|
3,142
|
|
|
(359
|
)
|
|
(11.4
|
)%
|
||||||
Stock based compensation
|
24
|
|
|
20
|
|
|
4
|
|
|
20.0
|
%
|
|
71
|
|
|
59
|
|
|
12
|
|
|
20.3
|
%
|
||||||
Other
|
465
|
|
|
679
|
|
|
(214
|
)
|
|
(31.5
|
)%
|
|
1,688
|
|
|
2,072
|
|
|
(384
|
)
|
|
(18.5
|
)%
|
||||||
Total service, rental and maintenance
|
$
|
7,787
|
|
|
$
|
7,875
|
|
|
$
|
(88
|
)
|
|
(1.1
|
)%
|
|
$
|
23,235
|
|
|
$
|
23,885
|
|
|
$
|
(650
|
)
|
|
(2.7
|
)%
|
FTEs
|
91
|
|
|
92
|
|
|
(1
|
)
|
|
(1.1
|
)%
|
|
91
|
|
|
92
|
|
|
(1
|
)
|
|
(1.1
|
)%
|
|
For the Three Months Ended September 30,
|
|
Change
|
|
For the Nine Months Ended September 30,
|
|
Change
|
||||||||||||||||||||||
(Dollars in thousands)
|
2018
|
|
2017
|
|
Total
|
|
%
|
|
2018
|
|
2017
|
|
Total
|
|
%
|
||||||||||||||
Payroll and related
|
$
|
3,401
|
|
|
$
|
3,113
|
|
|
$
|
288
|
|
|
9.3
|
%
|
|
$
|
10,005
|
|
|
$
|
9,223
|
|
|
$
|
782
|
|
|
8.5
|
%
|
Commissions
|
1,225
|
|
|
1,234
|
|
|
(9
|
)
|
|
(0.7
|
)%
|
|
4,393
|
|
|
3,557
|
|
|
836
|
|
|
23.5
|
%
|
||||||
Stock based compensation
|
135
|
|
|
84
|
|
|
51
|
|
|
60.7
|
%
|
|
404
|
|
|
284
|
|
|
120
|
|
|
42.3
|
%
|
||||||
Advertising and events
|
857
|
|
|
952
|
|
|
(95
|
)
|
|
(10.0
|
)%
|
|
3,011
|
|
|
3,072
|
|
|
(61
|
)
|
|
(2.0
|
)%
|
||||||
Other
|
98
|
|
|
150
|
|
|
(52
|
)
|
|
(34.7
|
)%
|
|
466
|
|
|
648
|
|
|
(182
|
)
|
|
(28.1
|
)%
|
||||||
Total selling and marketing
|
$
|
5,716
|
|
|
$
|
5,533
|
|
|
$
|
183
|
|
|
3.3
|
%
|
|
$
|
18,279
|
|
|
$
|
16,784
|
|
|
$
|
1,495
|
|
|
8.9
|
%
|
FTEs
|
99
|
|
|
96
|
|
|
3
|
|
|
3.1
|
%
|
|
99
|
|
|
96
|
|
|
3
|
|
|
3.1
|
%
|
|
For the Three Months Ended September 30,
|
|
Change
|
|
For the Nine Months Ended September 30,
|
|
Change
|
||||||||||||||||||||||
(Dollars in thousands)
|
2018
|
|
2017
|
|
Total
|
|
%
|
|
2018
|
|
2017
|
|
Total
|
|
%
|
||||||||||||||
Payroll and related
|
$
|
4,834
|
|
|
$
|
4,569
|
|
|
$
|
265
|
|
|
5.8
|
%
|
|
$
|
13,589
|
|
|
$
|
13,428
|
|
|
$
|
161
|
|
|
1.2
|
%
|
Stock based compensation
|
1,118
|
|
|
711
|
|
|
407
|
|
|
57.2
|
%
|
|
3,011
|
|
|
2,188
|
|
|
823
|
|
|
37.6
|
%
|
||||||
Bad debt
|
513
|
|
|
184
|
|
|
329
|
|
|
178.8
|
%
|
|
1,321
|
|
|
385
|
|
|
936
|
|
|
243.1
|
%
|
||||||
Facility rent and office costs
|
1,235
|
|
|
2,013
|
|
|
(778
|
)
|
|
(38.6
|
)%
|
|
4,920
|
|
|
5,849
|
|
|
(929
|
)
|
|
(15.9
|
)%
|
||||||
Outside services
|
3,554
|
|
|
2,351
|
|
|
1,203
|
|
|
51.2
|
%
|
|
8,699
|
|
|
7,485
|
|
|
1,214
|
|
|
16.2
|
%
|
||||||
Taxes, licenses and permits
|
1,081
|
|
|
1,077
|
|
|
4
|
|
|
0.4
|
%
|
|
3,185
|
|
|
3,101
|
|
|
84
|
|
|
2.7
|
%
|
||||||
Other
|
1,338
|
|
|
1,153
|
|
|
185
|
|
|
16.0
|
%
|
|
3,652
|
|
|
3,270
|
|
|
382
|
|
|
11.7
|
%
|
||||||
Total general and administrative
|
$
|
13,673
|
|
|
$
|
12,058
|
|
|
$
|
1,615
|
|
|
13.4
|
%
|
|
$
|
38,377
|
|
|
$
|
35,706
|
|
|
$
|
2,671
|
|
|
7.5
|
%
|
FTEs
|
111
|
|
|
113
|
|
|
(2
|
)
|
|
(1.8
|
)%
|
|
111
|
|
|
113
|
|
|
(2
|
)
|
|
(1.8
|
)%
|
|
|
Nine Months Ended September 30,
|
|
Change
|
||||||||
(Dollars in thousands)
|
|
2018
|
|
2017
|
|
|||||||
Net cash provided by operating activities
|
|
$
|
12,627
|
|
|
$
|
14,074
|
|
|
$
|
(1,447
|
)
|
Net cash used in investing activities
|
|
(5,094
|
)
|
|
(7,034
|
)
|
|
1,940
|
|
|||
Net cash used in financing activities
|
|
(18,492
|
)
|
|
(22,627
|
)
|
|
4,135
|
|
|
|
For the Three Months Ended September 30,
|
|
For the Nine Months Ended September 30,
|
||||||||||||
(Dollars in thousands)
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Net (loss) income
|
|
$
|
(481
|
)
|
|
$
|
3,727
|
|
|
$
|
(946
|
)
|
|
$
|
6,078
|
|
Plus (Less): Provision for income taxes
|
|
(446
|
)
|
|
171
|
|
|
(701
|
)
|
|
1,945
|
|
||||
Plus (Less): Other expense (income)
|
|
110
|
|
|
(359
|
)
|
|
56
|
|
|
(415
|
)
|
||||
Less: Interest income
|
|
(384
|
)
|
|
(214
|
)
|
|
(1,009
|
)
|
|
(490
|
)
|
||||
Operating (loss) income
|
|
(1,201
|
)
|
|
3,325
|
|
|
(2,600
|
)
|
|
7,118
|
|
||||
Plus: Depreciation, amortization and accretion
|
|
2,785
|
|
|
2,775
|
|
|
8,168
|
|
|
8,849
|
|
||||
EBITDA (as defined by the Company)
|
|
1,584
|
|
|
6,100
|
|
|
5,568
|
|
|
15,967
|
|
||||
Less: Purchases of property and equipment
|
|
(1,630
|
)
|
|
(1,816
|
)
|
|
(5,094
|
)
|
|
(7,020
|
)
|
||||
Plus: Severance
|
|
146
|
|
|
51
|
|
|
147
|
|
|
51
|
|
||||
Adjusted OCF (as defined by the Company)
|
|
$
|
100
|
|
|
$
|
4,335
|
|
|
$
|
621
|
|
|
$
|
8,998
|
|
|
|
For the Three Months Ended September 30,
|
|
For the Nine Months Ended September 30,
|
||||||||||||
(Dollars in thousands)
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Operating expenses
|
|
$
|
43,677
|
|
|
$
|
40,311
|
|
|
$
|
128,818
|
|
|
$
|
120,287
|
|
Less: Depreciation, amortization and accretion
|
|
(2,785
|
)
|
|
(2,775
|
)
|
|
(8,168
|
)
|
|
(8,849
|
)
|
||||
Less: Severance
|
|
(146
|
)
|
|
(51
|
)
|
|
(147
|
)
|
|
(51
|
)
|
||||
Less: Stock based compensation
|
|
1,423
|
|
|
(862
|
)
|
|
3,922
|
|
|
(2,815
|
)
|
||||
Adjusted operating expenses (as defined by the Company)
|
|
42,169
|
|
|
36,623
|
|
|
124,425
|
|
|
108,572
|
|
||||
Plus: Purchases of property and equipment
|
|
1,630
|
|
|
1,816
|
|
|
5,094
|
|
|
7,020
|
|
||||
Adjusted operating and capital expenses (as defined by the Company)
|
|
$
|
43,799
|
|
|
$
|
38,439
|
|
|
$
|
129,519
|
|
|
$
|
115,592
|
|
Period
|
|
Total Number of Shares Purchased
|
|
Average Price Paid Per Share
(1)
|
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
|
|
Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs
|
|||||
|
|
|
|
|
|
|
|
(Dollars in thousands)
|
|||||
July 1 to 31, 2018
|
|
36,542
|
|
|
$
|
15.25
|
|
|
36,542
|
|
|
—
|
|
August 1 to 31, 2018
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
10,000
|
|
September 1 to 31, 2018
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
10,000
|
|
For the three months ended September 30, 2018
|
|
36,542
|
|
|
$
|
15.25
|
|
|
36,542
|
|
|
|
|
|
|
Incorporated by Reference
|
|
|
|||||||
Exhibit Number
|
|
Exhibit Description
|
|
Form
|
|
File No.
|
|
Exhibit
|
|
Filing Date
|
|
Filed/Furnished Herewith
|
10.1
|
|
|
|
|
|
|
|
|
|
|
Filed
|
|
31.1
|
|
|
|
|
|
|
|
|
|
|
Filed
|
|
31.2
|
|
|
|
|
|
|
|
|
|
|
Filed
|
|
32.1
|
|
|
|
|
|
|
|
|
|
|
Furnished
|
|
32.2
|
|
|
|
|
|
|
|
|
|
|
Furnished
|
|
101.INS
|
|
XBRL Instance Document*
|
|
|
|
|
|
|
|
|
|
Furnished
|
101.SCH
|
|
XBRL Taxonomy Extension Schema*
|
|
|
|
|
|
|
|
|
|
Furnished
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation*
|
|
|
|
|
|
|
|
|
|
Furnished
|
101.DEF
|
|
XBRL Taxonomy Extension Definition*
|
|
|
|
|
|
|
|
|
|
Furnished
|
101.LAB
|
|
XBRL Taxonomy Extension Labels*
|
|
|
|
|
|
|
|
|
|
Furnished
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation*
|
|
|
|
|
|
|
|
|
|
Furnished
|
*
|
The financial information contained in these XBRL documents is unaudited.
|
|
|
SPOK HOLDINGS, INC.
|
||
|
|
|||
Dated: October 25, 2018
|
|
/s/ Michael W. Wallace
|
||
|
|
Name:
|
|
Michael W. Wallace
|
|
|
Title:
|
|
Chief Financial Officer
|
|
|
|
|
(Principal Financial Officer and duly authorized officer)
|
1.
|
DEFINITIONS; INTERPRETIVE PRINCIPLES
.
|
2.
|
SERVICE TO THE COMPANY: SCOPE OF INDEMNIFICATION
.
|
3.
|
INDEMNITY
.
|
4.
|
CONTRIBUTION IN THE EVENT OF JOINT LIABILITY
.
|
5.
|
INDEMNIFICATION FOR EXPENSES INCURRED AS A WITNESS
.
|
6.
|
ADVANCEMENT OF EXPENSES
.
|
7.
|
PROCEDURES AND PRESUMPTIONS FOR DETERMINATION OF ENTITLEMENT TO INDEMNIFICATION
.
|
8.
|
REMEDIES
.
|
9.
|
NON-EXCLUSIVITY; SURVIVAL OF RIGHTS; INSURANCE; SUBROGATION
.
|
10.
|
DURATION OF AGREEMENT
.
|
11.
|
SECURITY
.
|
12.
|
ENFORCEMENT; ENTIRE AGREEMENT
.
|
13.
|
SEVERABILITY
.
|
14.
|
MODIFICATION AND WAIVER
.
|
15.
|
NOTICE OF SERVICE BY INDEMNITEE
.
|
16.
|
NOTICES
.
|
17.
|
IDENTICAL COUNTERPARTS
.
|
18.
|
HEADINGS
.
|
19.
|
GOVERNING LAW
.
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Spok Holdings, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Dated: October 25, 2018
|
/s/ Vincent D. Kelly
|
|
Vincent D. Kelly
|
|
President and Chief Executive Officer
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Spok Holdings, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Dated: October 25, 2018
|
/s/ Michael W. Wallace
|
|
Michael W. Wallace
|
|
Chief Financial Officer
|
(i)
|
the accompanying Quarterly Report on Form 10-Q of the Company for the period ended
September 30, 2018
(the “Report”) fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and
|
(ii)
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Dated: October 25, 2018
|
/s/ Vincent D. Kelly
|
|
Vincent D. Kelly
|
|
President and Chief Executive Officer
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(i)
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the accompanying Quarterly Report on Form 10-Q of the Company for the period ended
September 30, 2018
(the “Report”) fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and
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(ii)
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the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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Dated: October 25, 2018
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/s/ Michael W. Wallace
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Michael W. Wallace
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Chief Financial Officer
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