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x
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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DELAWARE
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16-1694797
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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6850 Versar Center, Suite 420
Springfield, Virginia
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22151-4148
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(Address of principal executive offices)
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(Zip Code)
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Title of each class
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Trading Symbol
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Name of each exchange on which registered
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Common Stock, par value $0.0001 per share
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SPOK
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NASDAQ National Market®
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Part I
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Item 1.
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Item 1A.
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Item 1B.
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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 5.
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Item 6.
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Item 7.
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Item 7A.
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Item 8
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Item 9.
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Item 9A.
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Item 9B.
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Part III
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Item 10.
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Item 11.
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Item 12.
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Item 13.
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Item 14.
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Part IV
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Item 15.
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Item 16.
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•
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Continuing decline in the number of paging units we have in service with customers, commensurate with a continuing decline in our wireless revenue
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•
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The sales cycle of our software solutions and services can run from six to eighteen months, making it difficult to plan for and meet our sales objectives and bookings on a steady basis quarter-to-quarter and year-to-year
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•
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Our ability to manage wireless network rationalization to lower our costs without causing disruption of service to our customers
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•
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Our ability to design and develop an integrated clinical communications and collaboration platform to address mobile communications, clinical alerting, nursing and workflow functions at state of the art hospitals that gains market acceptance and wide-spread use by customers
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•
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Our ability to address changing market conditions with new or revised software solutions
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•
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Our ability to retain key management personnel and to attract and retain talent within the organization
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•
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Our ability to manage change related to regulation, including laws and regulations affecting hospitals and the healthcare industry generally
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•
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Competition for our services and products from new technologies or those offered and/or developed from firms that are substantially larger and have much greater financial and human capital resources
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•
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The reliability of our networks and servers and our ability to prevent cyber-attacks and other security issues and disruptions
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•
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We may experience litigation claiming intellectual property infringement by us, and we may not be able to protect our rights in intellectual property that we own and develop
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•
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Unauthorized breaches or failures in cybersecurity measures adopted by us and/or included in our products and services
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•
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Declines in our stock price or other events or circumstances that result in future goodwill impairments
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•
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Those matters are discussed in this Annual Report under Item 1A “Risk Factors.”
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•
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a heightened awareness of the ubiquitous, critical role of communications in healthcare;
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•
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an increased focus within hospitals on quality of care and patient safety initiatives;
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•
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the importance of confidentiality when sharing information;
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•
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increased regulations that may result in process changes, increased documentation and reporting and increased costs;
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•
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a continuing focus within hospitals to reduce labor and administrative costs while increasing productivity; and
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•
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a broader proliferation of information technology in healthcare as hospitals strive to apply technology to solve their business problems.
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•
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Content marketing (eBriefs, case studies, brochures, videos, infographics, and more) as an underlying foundation of all marketing campaigns or initiatives;
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•
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Website development and maintenance, which provides product and Company information, customer support options, paging capabilities, as well as thought leadership and engagement;
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•
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Participation at trade shows and industry events, such as Healthcare Information and Management Systems Society, College of Healthcare Information Management Executives, Association of Medical Directors of Information Systems, American Organization of Nurse Leaders, and other Healthcare Information technology related shows and conferences;
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•
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Webinars about customer successes, current industry trends, and our solutions;
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•
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Social media involvement to provide information regarding upcoming educational events or new product offerings;
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•
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Industry analyst relationships;
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•
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Newsletters and blog posts to provide information about industry trends and our solutions to customers, prospects, and alliances; and
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•
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Annual customer conferences that solicit feedback on our solutions and services.
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•
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Spok® Healthcare Console: Provides operators with the information needed to process calls using their computers with just a few keystrokes. This solution integrates with the customers’ existing phone systems and is used by the operator group to answer incoming calls to the contact center. Operators can quickly and accurately perform directory searches and code calls, as well as messaging and paging by individual, groups, and roles using the Spok Healthcare Console’s computer telephony integration and directory capabilities.
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•
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Spok® Web-Based Directory: Makes employee contact information more accessible and enables staff to send messages quickly right from the directory. Authenticated users can log on anywhere, anytime to perform a variety of important updates to contact information and on-call schedules, search the directory, and send important messages.
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•
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Spok® Web-Based On-Call Scheduling: Keeps personnel, calendars and on-call scheduling information updated, even with thousands of staff, using a secure web portal to maintain and allow password-protected access to the latest on-call schedules and personnel information.
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•
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Spok® Speech: Enables the organization to process routine phone requests, including transfers, directory assistance, messaging and paging without live operators and with more ease-of-use than touchtone menus.
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•
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Spok® Call Recording and Quality Management: Records, monitors, and scores operators’ conversations to allow for better management of calls, helping improve customer service.
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•
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Spok® Messenger: Provides an intelligent, FDA, 510(k)-cleared solution that connects virtually all crucial alert systems, including nurse call, fire, security, patient monitoring, and building management to mobile staff via their wireless communication devices. This solution provides the ability to reach mobile team members within seconds of an alert, improving overall workflow, staff productivity, and the comfort and safety of everyone in the facility.
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•
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Spok® e.Notify: Enables organizations to quickly and reliably notify and confirm team member availability during emergency situations without relying on calling trees, thereby reducing confusion that may arise in an emergency situation. This solution automatically delivers messages, collects responses, escalates issues to others, and logs all activities for reporting and analysis purposes.
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•
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Spok® Critical Test Results Management: Automates and streamlines the process of delivering critical test results to the appropriate clinicians to help ensure patient safety. This solution can send messages from the cardiology, laboratory and radiology departments by means of encrypted smartphone communications, two-way paging, secure email, secure text, images, annotations, and voice to a variety of endpoints such as workstations, laptops, tablets, smartphones, pagers, and other wireless devices.
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•
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Spok Mobile®: Simplifies communications and strengthens care by using smartphones and tablets for secure code alerts, patient updates, results, consult requests, and much more. Allows users to access the full directory of accurate contact information to send messages/photos/videos to smartphones and other devices, and to ensure clinical communications are logged, all with security, traceability, and reliability.
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•
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Spok® Device Preference Engine: Facilitates voice conversations among doctors and caregivers by enabling users to choose the desired communication method based on factors such as message priority.
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•
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Spok® pc/psap: Speeds emergency dispatch by giving Public Safety Answering Point call-takers an easy-to-use, standards-based, graphical interface that integrates the underlying phone system, mapping systems, and other resources for critical information availability. 9-1-1 call-takers are able to instantly involve police, fire, EMT, and hazardous material personnel with a single click of the mouse or touch of the screen.
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•
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Spok® Enterprise Alert: Directs emergency personnel to a 9-1-1 caller’s exact location (building, floor, room), helping to ensure speed, accuracy, and reliability of response. The E9-1-1 software provides real-time, onsite notification when 9-1-1 is dialed, and works to decrease emergency response time.
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•
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Professional Services: We offer a full suite of professional services which are provided by a dedicated group of professional service employees. Our professional services include consultation, implementation, and training services. For on-premise software solution implementations, our professional services staff uses a branded, consistent methodology that provides a comprehensive phased work plan for both new software installations and/or upgrades. In support of our implementation methodology, we manage the various aspects of the process through a professional services automation tool. We may also use third-party professional services firms as supplemental resources to implement our solutions for customers as needed. Professional services revenue represented 12% of total consolidated revenue for the year ended December 31, 2019, 11% for the year ended December 31, 2018 and 10% for the year ended December 31, 2017.
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•
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Software License Updates and Product Support (Maintenance): Software license updates and product support, which is generally referred to as maintenance when sold to customers, is an important offering to customers who utilize our on-premise software solutions. In order to support our products that provide clinical communication and collaboration solutions to our customer’s organizations, we have a dedicated customer support organization. The customer support organization provides support 24 hours a day, 7 days a week, 365 days a year and the service can be accessed via telephone, email or the Internet via the Spok webpage. The Spok support service is augmented by third party services where needed. Software license updates and product support are generally priced together as a percentage of the software licenses for which these services will be provided. Largely all of our customers purchase maintenance when they purchase new software licenses after which renewals generally occur on an annual basis and are paid in advance. Software license updates provide customers with rights to unspecified product upgrades as well as maintenance and patch releases that are released during the term of the support period. Software license updates and product support revenue (i.e. Maintenance revenue) represented 25% of total consolidated revenue for the year ended December 31, 2019 and, 23% for both the years ended December 31, 2018 and 2017.
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•
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An integrated product suite;
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•
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A communication-driven workflow;
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•
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Certifications, such as those through the Joint Interoperability Test Command (see "Joint Interoperability Test Command" below) and the FDA; and
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•
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A complete directory of contacts throughout the customer enterprise.
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•
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Alaska Communications Systems Group, Inc. - Mobile communications solutions;
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•
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Appfolio, Inc. - Cloud-based software solutions;
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•
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Boingo Wireless, Inc. - Mobile communications solutions;
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•
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Castlight Health, Inc. - Software as a service health benefits platform;
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•
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Computer Programs and Systems, Inc. - Healthcare IT solutions;
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•
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Everbridge, Inc. - Clinical alerting solutions;
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•
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Evolent Health, Inc. - Healthcare delivery and payment solutions;
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•
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Five9, Inc. - Cloud-based solutions;
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•
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Globalstar, Inc. - Mobile communications solutions;
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•
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HealthStream, Inc. - healthcare development solutions;
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•
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LivePerson,Inc. - Mobile and online messaging solutions;
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•
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MobileIron, Inc. - Mobile communications solutions;
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•
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Model N, Inc. - Revenue management cloud solutions;
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•
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NextGen Healthcare, Inc. - Medical and Dental software, services, and analytic solutions;
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•
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ORBCOMM Inc. - Network connectivity and device management solutions; and
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•
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Vocera Communications, Inc. - Mobile communications solutions.
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•
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Identify (interoperability) requirements;
|
•
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Develop certification approach (planning);
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•
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Perform interoperability test and evaluation; and
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•
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Report certifications and statuses.
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•
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If current or prospective end customers prefer our on-premise licenses, adoption of our subscription-based model may not meet our expectations, or may take longer than anticipated to achieve;
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•
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Potential confusion or concerns among current or prospective end customers and channel partners, including concerns regarding changes to our pricing models;
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•
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We may be unsuccessful in implementing or maintaining subscription-based pricing models, which could negatively affect adoption, renewal rates and our business results;
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•
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If we are unsuccessful in implementing our go-to-market cost structure in a timely or cost-effective manner, we may incur sales compensation costs at a higher than forecasted rate, particularly if the pace of our subscription transition is faster than anticipated;
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•
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Investors, industry and financial analysts may have difficulty understanding the shift in our business model, resulting in changes in financial estimates or perceived failure to meet investor expectations.
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•
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Requirements Definition - Our plans for Spok Go may not meet the market's needs or customer expectations and could result in low market demand and/or acceptance.
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•
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Product Scope and Schedule - Our product scope may be subject to development from market-led requirements, new technologies or competitors expanding product capabilities or entering into adjacent markets. We may fail to manage the scope of our software development activities effectively, resulting in delays in meeting key milestones, achieving network solutions on a fully integrated basis, or solving coding problems in a timely and efficient manner. In addition, the continuing software development efforts on our existing products could distract management time and focus from developing Spok Go.
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•
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Staffing and Organization - The development of Spok Go requires the hiring of new personnel. We may be unable to attract, in a timely manner, the qualified staff to meet our requirements. In addition the organizational changes and new hires necessary to address our development requirements could create attrition risk for our current staff.
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•
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Operational Readiness - Even if the development of Spok Go occurs as we have planned, we may not be prepared or ready to sell, deliver and support the new platform technology.
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•
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Customer Dissatisfaction and Reputational Harm - We may experience customer dissatisfaction with our solutions that could result in lost opportunities for sales. Potential low ratings of our solutions may result in us being excluded from consideration by current and prospective customers with respect to future opportunities. In addition, fewer customer references for our solutions could impact our ability to prospect new sales.
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•
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Training - Training of our marketing and sales personnel as to the clinical requirements of our healthcare customers and the complexity of our service offerings, takes time and requires a substantial, continuing investment in new hires as well as long term employees.
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•
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Competitive Speed - Sales productivity can be impacted by the capabilities of our competitors. There is a risk that competitors may innovate, or partner faster than we do to deliver a unified communications platform.
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•
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Employee Retention - The impact of the elements noted above may challenge the ability of employees to make sales, which may affect morale and employee retention.
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•
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such businesses will not incur unforeseen obligations or liabilities;
|
•
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such businesses will generate sufficient cash flow to support the indebtedness, if incurred, to acquire them or the expenditures needed to develop them; and/or
|
•
|
the rate of return from such businesses will justify the decision to invest the capital to acquire them.
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Year
|
Dividends Declared Per Share
Amount |
|
Total
Payment(1) |
||||
|
|
|
(Dollars in
thousands) |
||||
Prior to 2015
|
16.900
|
|
|
428,413
|
|
||
2015(2)
|
0.625
|
|
|
13,333
|
|
||
2016(3)
|
0.750
|
|
|
10,287
|
|
||
2017
|
0.500
|
|
|
15,234
|
|
||
2018
|
0.500
|
|
|
10,064
|
|
||
2019
|
$
|
0.500
|
|
|
$
|
9,819
|
|
Total
|
$
|
19.775
|
|
|
$
|
487,150
|
|
(1)
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The total payment reflects the cash distributions paid in relation to common stock, vested RSUs and vested shares of restricted stock.
|
(2)
|
The cash distribution includes an additional special one-time cash distribution to stockholders of $0.125 per share of common stock.
|
(3)
|
The per share amount includes a special one-time dividend of $0.25 per share of common stock declared in 2016 but payable to stockholders in 2017.
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|
December 31,
|
||||||||||||||||||||||
|
2014
|
|
|
2015
|
|
|
2016
|
|
|
2017
|
|
|
2018
|
|
|
2019
|
|
||||||
Spok Holdings, Inc.
|
$
|
100.00
|
|
|
$
|
109.38
|
|
|
$
|
129.19
|
|
|
$
|
100.33
|
|
|
$
|
87.90
|
|
|
$
|
84.23
|
|
NASDAQ Composite
|
100.00
|
|
|
106.96
|
|
|
116.45
|
|
|
150.96
|
|
|
146.67
|
|
|
200.49
|
|
||||||
NASDAQ Telecommunications
|
100.00
|
|
|
97.52
|
|
|
102.36
|
|
|
127.62
|
|
|
127.16
|
|
|
142.60
|
|
||||||
S&P Health Care Technology
|
100.00
|
|
|
93.06
|
|
|
73.26
|
|
|
104.22
|
|
|
81.10
|
|
|
114.37
|
|
|
For the Year Ended December 31,
|
||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
||||||||||
|
(Dollars in thousands, except per share amounts)
|
||||||||||||||||||
Statements of Operations Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenues
|
$
|
160,289
|
|
|
$
|
169,474
|
|
|
$
|
171,175
|
|
|
179,561
|
|
|
189,628
|
|
||
Operating expenses
|
176,098
|
|
|
172,647
|
|
|
160,469
|
|
|
157,408
|
|
|
164,528
|
|
|||||
Operating (loss) income
|
(15,809
|
)
|
|
(3,173
|
)
|
|
10,706
|
|
|
22,153
|
|
|
25,100
|
|
|||||
Net (loss) income
|
(10,765
|
)
|
|
(1,479
|
)
|
|
(15,306
|
)
|
|
13,979
|
|
|
80,246
|
|
|||||
Basic and diluted net (loss) income per common share
|
(0.56
|
)
|
|
(0.08
|
)
|
|
(0.76
|
)
|
|
0.68
|
|
|
3.74
|
|
|||||
Cash dividends declared per common share
|
0.50
|
|
|
0.50
|
|
|
0.50
|
|
|
0.75
|
|
|
0.625
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
|
December 31,
|
||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
||||||||||
|
(Dollars in thousands)
|
||||||||||||||||||
Balance Sheets Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Current assets
|
$
|
117,665
|
|
|
$
|
130,978
|
|
|
$
|
144,303
|
|
|
$
|
155,862
|
|
|
$
|
141,613
|
|
Total assets
|
319,872
|
|
|
327,712
|
|
|
348,004
|
|
|
388,087
|
|
|
386,433
|
|
|||||
Long-term liabilities, excluding deferred revenue
|
17,918
|
|
|
7,734
|
|
|
8,075
|
|
|
8,921
|
|
|
8,972
|
|
|||||
Stockholders’ equity
|
250,094
|
|
|
274,554
|
|
|
290,529
|
|
|
322,087
|
|
|
329,564
|
|
•
|
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.
|
•
|
Technology operations. 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 transmitters and other service, rental and maintenance expenses in order to maintain an efficient network while simultaneously ensuring adequate service for our customers. We believe continued reductions in these expenses will occur for the foreseeable future as our networks continue to be consolidated.
|
•
|
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.
|
(Dollars in thousands)
|
2019
|
|
Change
|
|
2018
|
|
Change
|
|
2017
|
||||||||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Wireless
|
$
|
88,167
|
|
|
(6,110
|
)
|
|
(6.5
|
)%
|
|
$
|
94,277
|
|
|
$
|
(6,911
|
)
|
|
(6.8
|
)%
|
|
$
|
101,188
|
|
|
Software
|
72,122
|
|
|
(3,075
|
)
|
|
(4.1
|
)%
|
|
75,197
|
|
|
5,210
|
|
|
7.4
|
%
|
|
69,987
|
|
|||||
Total revenue
|
160,289
|
|
|
(9,185
|
)
|
|
(5.4
|
)%
|
|
169,474
|
|
|
(1,701
|
)
|
|
(1.0
|
)%
|
|
171,175
|
|
|||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cost of revenue
|
30,072
|
|
|
(2,336
|
)
|
|
(7.2
|
)%
|
|
32,408
|
|
|
3,990
|
|
|
14.0
|
%
|
|
28,418
|
|
|||||
Research and development
|
27,543
|
|
|
3,079
|
|
|
12.6
|
%
|
|
24,464
|
|
|
5,762
|
|
|
30.8
|
%
|
|
18,702
|
|
|||||
Technology operations
|
31,428
|
|
|
72
|
|
|
0.2
|
%
|
|
31,356
|
|
|
(146
|
)
|
|
(0.5
|
)%
|
|
31,502
|
|
|||||
Selling and marketing
|
23,170
|
|
|
(1,383
|
)
|
|
(5.6
|
)%
|
|
24,553
|
|
|
1,730
|
|
|
7.6
|
%
|
|
22,823
|
|
|||||
General and administrative
|
45,787
|
|
|
(3,310
|
)
|
|
(6.7
|
)%
|
|
49,097
|
|
|
1,697
|
|
|
3.6
|
%
|
|
47,400
|
|
|||||
Goodwill impairment
|
8,849
|
|
|
8,849
|
|
|
100.0
|
%
|
|
—
|
|
|
—
|
|
|
—
|
%
|
|
—
|
|
|||||
Depreciation, amortization and accretion
|
9,249
|
|
|
(1,520
|
)
|
|
(14.1
|
)%
|
|
10,769
|
|
|
(855
|
)
|
|
(7.4
|
)%
|
|
11,624
|
|
|||||
Total operating expenses
|
176,098
|
|
|
3,451
|
|
|
2.0
|
%
|
|
172,647
|
|
|
12,178
|
|
|
7.6
|
%
|
|
160,469
|
|
|||||
Operating (loss) income
|
(15,809
|
)
|
|
(12,636
|
)
|
|
398.2
|
%
|
|
(3,173
|
)
|
|
(13,879
|
)
|
|
(129.6
|
)%
|
|
10,706
|
|
|||||
Interest income
|
1,651
|
|
|
13
|
|
|
0.8
|
%
|
|
1,638
|
|
|
919
|
|
|
127.8
|
%
|
|
719
|
|
|||||
Other income (expense)
|
735
|
|
|
1,385
|
|
|
(213.1
|
)%
|
|
(650
|
)
|
|
(784
|
)
|
|
(585.1
|
)%
|
|
134
|
|
|||||
(Loss) income before income tax benefit (expense)
|
(13,423
|
)
|
|
(11,238
|
)
|
|
514.3
|
%
|
|
(2,185
|
)
|
|
(13,744
|
)
|
|
(118.9
|
)%
|
|
11,559
|
|
|||||
Benefit from (provision for) income taxes
|
2,658
|
|
|
1,952
|
|
|
276.5
|
%
|
|
706
|
|
|
27,571
|
|
|
(102.6
|
)%
|
|
(26,865
|
)
|
|||||
Net loss
|
$
|
(10,765
|
)
|
|
$
|
(9,286
|
)
|
|
627.9
|
%
|
|
$
|
(1,479
|
)
|
|
$
|
13,827
|
|
|
(90.3
|
)%
|
|
$
|
(15,306
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Supplemental information
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
FTEs
|
638
|
|
|
42
|
|
|
7.0
|
%
|
|
596
|
|
|
—
|
|
|
—
|
%
|
|
596
|
|
|||||
Active transmitters
|
3,840
|
|
|
(94
|
)
|
|
(2.4
|
)%
|
|
3,934
|
|
|
(96
|
)
|
|
(2.4
|
)%
|
|
4,030
|
|
(Dollars in thousands)
|
2019
|
|
Change
|
|
2018
|
|
Change
|
|
2017
|
||||||||||||||||
Revenue - wireless
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Paging revenue
|
$
|
85,067
|
|
|
$
|
(5,503
|
)
|
|
(6.1
|
)%
|
|
$
|
90,570
|
|
|
$
|
(6,726
|
)
|
|
(6.9
|
)%
|
|
$
|
97,296
|
|
Product and other revenue
|
3,100
|
|
|
(607
|
)
|
|
(16.4
|
)%
|
|
3,707
|
|
|
(185
|
)
|
|
(4.8
|
)%
|
|
3,892
|
|
|||||
Total wireless revenue
|
88,167
|
|
|
(6,110
|
)
|
|
(6.5
|
)%
|
|
94,277
|
|
|
(6,911
|
)
|
|
(6.8
|
)%
|
|
101,188
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Revenue - software
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
License
|
8,950
|
|
|
(4,092
|
)
|
|
(31.4
|
)%
|
|
13,042
|
|
|
3,501
|
|
|
36.7
|
%
|
|
9,541
|
|
|||||
Services
|
19,189
|
|
|
1,098
|
|
|
6.1
|
%
|
|
18,091
|
|
|
461
|
|
|
2.6
|
%
|
|
17,630
|
|
|||||
Equipment
|
3,618
|
|
|
(1,377
|
)
|
|
(27.6
|
)%
|
|
4,995
|
|
|
848
|
|
|
20.4
|
%
|
|
4,147
|
|
|||||
Operations revenue
|
31,757
|
|
|
(4,371
|
)
|
|
(12.1
|
)%
|
|
36,128
|
|
|
4,810
|
|
|
15.4
|
%
|
|
31,318
|
|
|||||
Maintenance revenue
|
40,365
|
|
|
1,296
|
|
|
3.3
|
%
|
|
39,069
|
|
|
400
|
|
|
1.0
|
%
|
|
38,669
|
|
|||||
Total software revenue
|
72,122
|
|
|
(3,075
|
)
|
|
(4.1
|
)%
|
|
75,197
|
|
|
5,210
|
|
|
7.4
|
%
|
|
69,987
|
|
|||||
Total revenue
|
$
|
160,289
|
|
|
$
|
(9,185
|
)
|
|
(5.4
|
)%
|
|
$
|
169,474
|
|
|
$
|
(1,701
|
)
|
|
(1.0
|
)%
|
|
$
|
171,175
|
|
|
Units in Service as of December 31,
|
|
Revenue for the Year Ended December 31,
|
|
Change Due To:
|
|||||||||||||||||||||||
|
2019
|
|
2018
|
|
Change
|
|
2019
|
|
2018
|
|
Change
|
|
ARPU
|
|
Units
|
|||||||||||||
|
(Units in thousands)
|
|
(Dollars in thousands)
|
|||||||||||||||||||||||||
Total
|
938
|
|
|
992
|
|
|
(54
|
)
|
|
$
|
85,067
|
|
|
$
|
90,570
|
|
|
$
|
(5,503
|
)
|
|
$
|
(583
|
)
|
|
$
|
(4,920
|
)
|
|
Units in Service as of December 31,
|
|
Revenue for the Year Ended December 31,
|
|
Change Due To:
|
|||||||||||||||||||||||
|
2018
|
|
2017
|
|
Change
|
|
2018
|
|
2017
|
|
Change
|
|
ARPU
|
|
Units
|
|||||||||||||
|
(Units in thousands)
|
|
(Dollars in thousands)
|
|||||||||||||||||||||||||
Total
|
992
|
|
|
1,049
|
|
|
(57
|
)
|
|
$
|
90,570
|
|
|
$
|
97,296
|
|
|
$
|
(6,726
|
)
|
|
$
|
(1,395
|
)
|
|
$
|
(5,331
|
)
|
Cost of revenue
|
2019
|
|
Change
|
|
2018
|
|
Change
|
|
2017
|
||||||||||||||||
(Dollars in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Payroll and related
|
$
|
20,001
|
|
|
$
|
466
|
|
|
2.4
|
%
|
|
$
|
19,535
|
|
|
$
|
1,729
|
|
|
9.7
|
%
|
|
$
|
17,806
|
|
Cost of sales
|
7,825
|
|
|
(2,746
|
)
|
|
(26.0
|
)%
|
|
10,571
|
|
|
2,453
|
|
|
30.2
|
%
|
|
8,118
|
|
|||||
Stock based compensation
|
267
|
|
|
18
|
|
|
7.2
|
%
|
|
249
|
|
|
70
|
|
|
39.1
|
%
|
|
179
|
|
|||||
Other
|
1,979
|
|
|
(74
|
)
|
|
(3.6
|
)%
|
|
2,053
|
|
|
(262
|
)
|
|
(11.3
|
)%
|
|
2,315
|
|
|||||
Total cost of revenue
|
$
|
30,072
|
|
|
$
|
(2,336
|
)
|
|
(7.2
|
)%
|
|
$
|
32,408
|
|
|
$
|
3,990
|
|
|
14.0
|
%
|
|
$
|
28,418
|
|
FTEs
|
202
|
|
|
24
|
|
|
13.5
|
%
|
|
178
|
|
|
(7
|
)
|
|
(3.8
|
)%
|
|
185
|
|
Research and development
|
2019
|
|
Change
|
|
2018
|
|
Change
|
|
2017
|
||||||||||||||||
(Dollars in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Payroll and related
|
$
|
19,040
|
|
|
$
|
1,473
|
|
|
8.4
|
%
|
|
$
|
17,567
|
|
|
$
|
2,830
|
|
|
19.2
|
%
|
|
$
|
14,737
|
|
Outside services
|
7,426
|
|
|
1,277
|
|
|
20.8
|
%
|
|
6,149
|
|
|
2,763
|
|
|
81.6
|
%
|
|
3,386
|
|
|||||
Stock based compensation
|
310
|
|
|
74
|
|
|
31.4
|
%
|
|
236
|
|
|
144
|
|
|
156.5
|
%
|
|
92
|
|
|||||
Other
|
767
|
|
|
255
|
|
|
49.8
|
%
|
|
512
|
|
|
25
|
|
|
5.1
|
%
|
|
487
|
|
|||||
Total research and development
|
$
|
27,543
|
|
|
$
|
3,079
|
|
|
12.6
|
%
|
|
$
|
24,464
|
|
|
$
|
5,762
|
|
|
30.8
|
%
|
|
$
|
18,702
|
|
FTEs
|
132
|
|
|
11
|
|
|
9.1
|
%
|
|
121
|
|
|
10
|
|
|
9.0
|
%
|
|
111
|
|
Technology Operations
|
2019
|
|
Change
|
|
2018
|
|
Change
|
|
2017
|
||||||||||||||||
(Dollars in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Payroll and related
|
$
|
10,788
|
|
|
$
|
(4
|
)
|
|
—
|
%
|
|
$
|
10,792
|
|
|
$
|
525
|
|
|
5.1
|
%
|
|
$
|
10,267
|
|
Site rent
|
13,715
|
|
|
(233
|
)
|
|
(1.7
|
)%
|
|
13,948
|
|
|
(281
|
)
|
|
(2.0
|
)%
|
|
14,229
|
|
|||||
Telecommunications
|
4,058
|
|
|
253
|
|
|
6.6
|
%
|
|
3,805
|
|
|
(318
|
)
|
|
(7.7
|
)%
|
|
4,123
|
|
|||||
Stock based compensation
|
123
|
|
|
28
|
|
|
29.5
|
%
|
|
95
|
|
|
16
|
|
|
20.3
|
%
|
|
79
|
|
|||||
Other
|
2,744
|
|
|
28
|
|
|
1.0
|
%
|
|
2,716
|
|
|
(88
|
)
|
|
(3.1
|
)%
|
|
2,804
|
|
|||||
Total technology operations
|
$
|
31,428
|
|
|
$
|
72
|
|
|
0.2
|
%
|
|
$
|
31,356
|
|
|
$
|
(146
|
)
|
|
(0.5
|
)%
|
|
$
|
31,502
|
|
FTEs
|
92
|
|
|
—
|
|
|
—
|
%
|
|
92
|
|
|
—
|
|
|
—
|
%
|
|
92
|
|
Selling and marketing
|
2019
|
|
Change
|
|
2018
|
|
Change
|
|
2017
|
||||||||||||||||
(Dollars in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Payroll and related
|
$
|
13,508
|
|
|
$
|
456
|
|
|
3.5
|
%
|
|
$
|
13,052
|
|
|
$
|
1,256
|
|
|
10.6
|
%
|
|
$
|
11,796
|
|
Commissions
|
4,994
|
|
|
(1,158
|
)
|
|
(18.8
|
)%
|
|
6,152
|
|
|
961
|
|
|
18.5
|
%
|
|
5,191
|
|
|||||
Stock based compensation
|
590
|
|
|
87
|
|
|
17.3
|
%
|
|
503
|
|
|
126
|
|
|
33.4
|
%
|
|
377
|
|
|||||
Advertising and events
|
3,326
|
|
|
(921
|
)
|
|
(21.7
|
)%
|
|
4,247
|
|
|
(306
|
)
|
|
(6.7
|
)%
|
|
4,553
|
|
|||||
Other
|
752
|
|
|
153
|
|
|
25.5
|
%
|
|
599
|
|
|
(307
|
)
|
|
(33.9
|
)%
|
|
906
|
|
|||||
Total selling and marketing
|
$
|
23,170
|
|
|
$
|
(1,383
|
)
|
|
(5.6
|
)%
|
|
$
|
24,553
|
|
|
$
|
1,730
|
|
|
7.6
|
%
|
|
$
|
22,823
|
|
FTEs
|
105
|
|
|
8
|
|
|
8.2
|
%
|
|
97
|
|
|
4
|
|
|
4.3
|
%
|
|
93
|
|
General and administrative
|
2019
|
|
Change
|
|
2018
|
|
Change
|
|
2017
|
||||||||||||||||
(Dollars in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Payroll and related
|
$
|
16,372
|
|
|
$
|
(1,305
|
)
|
|
(7.4
|
)%
|
|
$
|
17,677
|
|
|
$
|
599
|
|
|
3.5
|
%
|
|
$
|
17,078
|
|
Stock based compensation
|
2,353
|
|
|
(1,518
|
)
|
|
(39.2
|
)%
|
|
3,871
|
|
|
910
|
|
|
30.7
|
%
|
|
2,961
|
|
|||||
Facility rent and office costs
|
9,099
|
|
|
(862
|
)
|
|
(8.7
|
)%
|
|
9,961
|
|
|
(11
|
)
|
|
(0.1
|
)%
|
|
9,972
|
|
|||||
Outside services
|
8,437
|
|
|
646
|
|
|
8.3
|
%
|
|
7,791
|
|
|
(359
|
)
|
|
(4.4
|
)%
|
|
8,150
|
|
|||||
Taxes, licenses and permits
|
3,672
|
|
|
377
|
|
|
11.4
|
%
|
|
3,295
|
|
|
(926
|
)
|
|
(21.9
|
)%
|
|
4,221
|
|
|||||
Bad debt
|
669
|
|
|
(955
|
)
|
|
(58.8
|
)%
|
|
1,624
|
|
|
1,096
|
|
|
207.6
|
%
|
|
528
|
|
|||||
Other
|
5,185
|
|
|
307
|
|
|
6.3
|
%
|
|
4,878
|
|
|
388
|
|
|
8.6
|
%
|
|
4,490
|
|
|||||
Total general and administrative
|
$
|
45,787
|
|
|
$
|
(3,310
|
)
|
|
(6.7
|
)%
|
|
$
|
49,097
|
|
|
$
|
1,697
|
|
|
3.6
|
%
|
|
$
|
47,400
|
|
FTEs
|
107
|
|
|
(1
|
)
|
|
(0.9
|
)%
|
|
108
|
|
|
(7
|
)
|
|
(6.1
|
)%
|
|
115
|
|
Effective tax rate reconciliation
|
2019
|
|
2018
|
|
2017
|
|||||||||||||||
(Dollars in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
(Loss) income before income tax (benefit) expense
|
$
|
(13,423
|
)
|
|
|
|
$
|
(2,185
|
)
|
|
|
|
$
|
11,559
|
|
|
|
|||
Income taxes computed at the Federal statutory rate
|
$
|
(2,819
|
)
|
|
21.0
|
%
|
|
$
|
(459
|
)
|
|
21.0
|
%
|
|
$
|
4,046
|
|
|
35.0
|
%
|
State income taxes, net of Federal benefit
|
(567
|
)
|
|
4.2
|
%
|
|
306
|
|
|
(14.0
|
)%
|
|
472
|
|
|
4.1
|
%
|
|||
Goodwill impairment
|
2,243
|
|
|
(16.7
|
)%
|
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—
|
%
|
|||
Impact of 2017 Tax Act
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—
|
%
|
|
24,235
|
|
|
209.7
|
%
|
|||
Research and development and other tax credits
|
(1,790
|
)
|
|
13.3
|
%
|
|
(1,144
|
)
|
|
52.4
|
%
|
|
(1,775
|
)
|
|
(15.4
|
)%
|
|||
Excess executive compensation
|
322
|
|
|
(2.4
|
)%
|
|
281
|
|
|
(12.9
|
)%
|
|
—
|
|
|
—
|
%
|
|||
Other
|
(47
|
)
|
|
0.4
|
%
|
|
310
|
|
|
(14.2
|
)%
|
|
(113
|
)
|
|
(1.0
|
)%
|
|||
(Benefit from) provision for income taxes
|
$
|
(2,658
|
)
|
|
19.8
|
%
|
|
$
|
(706
|
)
|
|
32.3
|
%
|
|
$
|
26,865
|
|
|
232.4
|
%
|
|
For the Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
(Dollars in thousands)
|
||||||||||
Cash provided by operating activities
|
$
|
11,693
|
|
|
$
|
10,315
|
|
|
$
|
15,515
|
|
Cash used in investing activities
|
(30,222
|
)
|
|
(5,826
|
)
|
|
(9,171
|
)
|
|||
Cash used in financing activities
|
(17,153
|
)
|
|
(24,276
|
)
|
|
(25,001
|
)
|
|
Payments Due by Period
|
||||||||||||||||||
(Dollars in thousands)
|
Total
|
|
Less than 1 Year
|
|
1 to 3 years
|
|
3 to 5 years
|
|
More than 5 years
|
||||||||||
Operating lease obligations
|
$
|
17,570
|
|
|
$
|
6,792
|
|
|
$
|
8,095
|
|
|
$
|
2,466
|
|
|
$
|
217
|
|
Unconditional purchase obligations
|
$
|
2,188
|
|
|
$
|
—
|
|
|
$
|
2,188
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Total contractual obligations
|
$
|
19,758
|
|
|
$
|
6,792
|
|
|
$
|
10,283
|
|
|
$
|
2,466
|
|
|
$
|
217
|
|
Index to Consolidated Financial Statements
|
Page
|
•
|
pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company;
|
•
|
provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that receipts and expenditures are being made only in accordance with authorizations of management and members of the Board of Directors of the Company; and
|
•
|
provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.
|
•
|
information regarding directors is set forth under the caption “Election of Directors”;
|
•
|
information regarding executive officers is set forth under the caption “Executive Officers”;
|
•
|
information regarding our audit committee and designated “audit committee financial expert” is set forth under the caption “Committees of the Board of Directors”; and
|
•
|
if applicable, information regarding compliance with Section 16(a) of the Exchange Act is set forth under the caption “Delinquent Section 16(a) Reports."
|
(a)
|
1. Financial Statements
|
Index to Consolidated Financial Statements
|
Page
|
|
|
Index to Consolidated Financial Statements
|
Page
|
(b)
|
Exhibits
|
|
Spok Holdings, Inc.
|
|
|
By:
|
/s/ Vincent D. Kelly
|
|
Vincent D. Kelly
|
|
President and Chief Executive Officer
|
|
February 27, 2020
|
Signature
|
|
Title
|
|
Date
|
|
|
|
||
/s/ Vincent D. Kelly
|
|
Director, President and Chief Executive Officer (principal executive officer)
|
|
February 27, 2020
|
Vincent D. Kelly
|
|
|
||
|
|
|
|
|
/s/ Michael W. Wallace
|
|
Chief Financial Officer (principal financial officer and principal accounting officer)
|
|
February 27, 2020
|
Michael W. Wallace
|
|
|
|
|
|
|
|
||
/s/ Royce Yudkoff
|
|
Chairman of the Board
|
|
February 27, 2020
|
Royce Yudkoff
|
|
|
|
|
|
|
|
||
/s/ N. Blair Butterfield
|
|
Director
|
|
February 27, 2020
|
N. Blair Butterfield
|
|
|
|
|
|
|
|
||
/s/ Stacia A. Hylton
|
|
Director
|
|
February 27, 2020
|
Stacia A. Hylton
|
|
|
|
|
|
|
|
|
|
/s/ Brian O’Reilly
|
|
Director
|
|
February 27, 2020
|
Brian O’Reilly
|
|
|
|
|
|
|
|
|
|
/s/ Matthew Oristano
|
|
Director
|
|
February 27, 2020
|
Matthew Oristano
|
|
|
|
|
|
|
|
||
/s/ Todd Stein
|
|
Director
|
|
February 27, 2020
|
Todd Stein
|
|
|
|
|
|
|
|
||
/s/ Samme L. Thompson
|
|
Director
|
|
February 27, 2020
|
Samme L. Thompson
|
|
|
|
|
|
|
|
|
|
/s/ Dr. Bobbie Byrne
|
|
Director
|
|
February 27, 2020
|
Dr. Bobbie Byrne
|
|
|
|
|
Index to Consolidated Financial Statements
|
Page
|
/s/ GRANT THORNTON LLP
|
|
|
We have served as the Company's auditor since 2006.
|
|
Arlington, Virginia
|
February 27, 2020
|
/s/ GRANT THORNTON LLP
|
|
Arlington, Virginia
|
February 27, 2020
|
|
December 31,
|
||||||
(Dollars in thousands, except share and per share amounts)
|
2019
|
|
2018
|
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
47,361
|
|
|
$
|
83,343
|
|
Short-term investments
|
29,899
|
|
|
3,963
|
|
||
Accounts receivable, net
|
30,174
|
|
|
32,386
|
|
||
Prepaid expenses
|
7,517
|
|
|
6,906
|
|
||
Other current assets
|
1,710
|
|
|
2,672
|
|
||
Inventory, net
|
1,004
|
|
|
1,708
|
|
||
Total current assets
|
117,665
|
|
|
130,978
|
|
||
Non-current assets:
|
|
|
|
||||
Property and equipment, net
|
8,000
|
|
|
10,354
|
|
||
Operating lease right-of-use assets
|
16,317
|
|
|
—
|
|
||
Goodwill
|
124,182
|
|
|
133,031
|
|
||
Intangible assets, net
|
2,917
|
|
|
5,417
|
|
||
Deferred income tax assets, net
|
48,983
|
|
|
46,484
|
|
||
Other non-current assets
|
1,808
|
|
|
1,448
|
|
||
Total non-current assets
|
202,207
|
|
|
196,734
|
|
||
TOTAL ASSETS
|
$
|
319,872
|
|
|
$
|
327,712
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
3,615
|
|
|
$
|
2,010
|
|
Accrued compensation and benefits
|
11,680
|
|
|
11,348
|
|
||
Accrued taxes
|
1,529
|
|
|
1,822
|
|
||
Deferred revenue
|
25,944
|
|
|
26,106
|
|
||
Operating lease liabilities
|
5,437
|
|
|
—
|
|
||
Other current liabilities
|
2,978
|
|
|
3,662
|
|
||
Total current liabilities
|
51,183
|
|
|
44,948
|
|
||
Non-current liabilities:
|
|
|
|
||||
Asset retirement obligations
|
6,061
|
|
|
6,513
|
|
||
Operating lease liabilities
|
11,575
|
|
|
—
|
|
||
Other non-current liabilities
|
959
|
|
|
1,697
|
|
||
Total non-current liabilities
|
18,595
|
|
|
8,210
|
|
||
TOTAL LIABILITIES
|
69,778
|
|
|
53,158
|
|
||
COMMITMENTS AND CONTINGENCIES (Note 10)
|
|
|
|
|
|
||
STOCKHOLDERS’ EQUITY:
|
|
|
|
||||
Preferred stock—$0.0001 par value; 25,000,000 shares authorized; no shares issued or outstanding
|
$
|
—
|
|
|
$
|
—
|
|
Common stock—$0.0001 par value; 75,000,000 shares authorized; 19,071,614 and 19,389,066 shares issued and outstanding as of December 31, 2019 and December 31, 2018, respectively
|
2
|
|
|
2
|
|
||
Additional paid-in capital
|
86,874
|
|
|
90,559
|
|
||
Accumulated other comprehensive loss
|
(1,601
|
)
|
|
(1,301
|
)
|
||
Retained earnings
|
164,819
|
|
|
185,294
|
|
||
TOTAL STOCKHOLDERS’ EQUITY
|
250,094
|
|
|
274,554
|
|
||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
|
$
|
319,872
|
|
|
$
|
327,712
|
|
|
For the Year Ended December 31,
|
||||||||||
(Dollars in thousands, except share and per share amounts)
|
2019
|
|
2018
|
|
2017
|
||||||
Revenue:
|
|
|
|
|
|
||||||
Wireless
|
$
|
88,167
|
|
|
$
|
94,277
|
|
|
$
|
101,188
|
|
Software
|
72,122
|
|
|
75,197
|
|
|
69,987
|
|
|||
Total revenue
|
160,289
|
|
|
169,474
|
|
|
171,175
|
|
|||
Operating expenses:
|
|
|
|
|
|
||||||
Cost of revenue
|
30,072
|
|
|
32,408
|
|
|
28,418
|
|
|||
Research and development
|
27,543
|
|
|
24,464
|
|
|
18,702
|
|
|||
Technology operations
|
31,428
|
|
|
31,356
|
|
|
31,502
|
|
|||
Selling and marketing
|
23,170
|
|
|
24,553
|
|
|
22,823
|
|
|||
General and administrative
|
45,787
|
|
|
49,097
|
|
|
47,400
|
|
|||
Depreciation, amortization and accretion
|
9,249
|
|
|
10,769
|
|
|
11,624
|
|
|||
Goodwill impairment
|
8,849
|
|
|
—
|
|
|
—
|
|
|||
Total operating expenses
|
176,098
|
|
|
172,647
|
|
|
160,469
|
|
|||
Operating (loss) income
|
(15,809
|
)
|
|
(3,173
|
)
|
|
10,706
|
|
|||
Interest income
|
1,651
|
|
|
1,638
|
|
|
719
|
|
|||
Other income (expense)
|
735
|
|
|
(650
|
)
|
|
134
|
|
|||
(Loss) income before income tax benefit (expense)
|
(13,423
|
)
|
|
(2,185
|
)
|
|
11,559
|
|
|||
Benefit from (provision for) income taxes
|
2,658
|
|
|
706
|
|
|
(26,865
|
)
|
|||
Net loss
|
$
|
(10,765
|
)
|
|
$
|
(1,479
|
)
|
|
$
|
(15,306
|
)
|
Basic and diluted net (loss) income per common share
|
$
|
(0.56
|
)
|
|
$
|
(0.08
|
)
|
|
$
|
(0.76
|
)
|
Basic and diluted weighted average common shares outstanding
|
19,089,402
|
|
|
19,667,891
|
|
|
20,210,260
|
|
|||
Cash dividends declared per common share
|
$
|
0.50
|
|
|
$
|
0.50
|
|
|
$
|
0.50
|
|
|
|
For the Year Ended December 31,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
(Dollars in thousands)
|
|
|
|
|
|
|||||||
Net loss
|
|
$
|
(10,765
|
)
|
|
$
|
(1,479
|
)
|
|
$
|
(15,306
|
)
|
Other comprehensive (loss) income, net of tax:
|
|
|
|
|
|
|
|
|
|
|||
Foreign currency translation adjustments
|
|
(300
|
)
|
|
(49
|
)
|
|
11
|
|
|||
Other comprehensive (loss) income
|
|
(300
|
)
|
|
(49
|
)
|
|
11
|
|
|||
Comprehensive loss
|
|
$
|
(11,065
|
)
|
|
$
|
(1,528
|
)
|
|
$
|
(15,295
|
)
|
(Dollars in thousands, except share amounts)
|
Outstanding
Common Shares |
|
Common
Stock |
|
Additional
Paid-In Capital & Accumulated Other Comprehensive Loss |
|
Retained
Earnings |
|
Total
Stockholders’ Equity |
|||||||||
Balance, January 1, 2017
|
20,525,614
|
|
|
$
|
2
|
|
|
$
|
104,810
|
|
|
$
|
217,275
|
|
|
$
|
322,087
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
(15,306
|
)
|
|
(15,306
|
)
|
||||
Issuance of common stock under the Employee Stock Purchase Plan
|
17,760
|
|
|
—
|
|
|
256
|
|
|
—
|
|
|
256
|
|
||||
Issuance of common stock for vested restricted stock units under the 2012 Equity Plan
|
143,394
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Amortization of stock based compensation
|
—
|
|
|
—
|
|
|
3,688
|
|
|
—
|
|
|
3,688
|
|
||||
Cash dividends declared
|
—
|
|
|
—
|
|
|
—
|
|
|
(10,332
|
)
|
|
(10,332
|
)
|
||||
Common stock repurchase program
|
(572,550
|
)
|
|
—
|
|
|
(10,023
|
)
|
|
—
|
|
|
(10,023
|
)
|
||||
Issuance of restricted stock under the Equity Plan and other
|
21,296
|
|
|
—
|
|
|
(11
|
)
|
|
159
|
|
|
148
|
|
||||
Cumulative translation adjustment
|
—
|
|
|
$
|
—
|
|
|
$
|
11
|
|
|
$
|
—
|
|
|
$
|
11
|
|
Balance, December 31, 2017
|
20,135,514
|
|
|
$
|
2
|
|
|
$
|
98,731
|
|
|
$
|
191,796
|
|
|
$
|
290,529
|
|
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,479
|
)
|
|
(1,479
|
)
|
||||
Adjustment to beginning balance due to adoption of ASC 606 and related tax impact
|
—
|
|
|
—
|
|
|
(166
|
)
|
|
5,110
|
|
|
4,944
|
|
||||
Issuance of common stock under the Employee Stock Purchase Plan
|
20,120
|
|
|
—
|
|
|
247
|
|
|
—
|
|
|
247
|
|
||||
Issuance of common stock for vested restricted stock units under the 2012 Equity Plan
|
199,991
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Purchase of common stock for tax withholding
|
(62,432
|
)
|
|
—
|
|
|
(976
|
)
|
|
—
|
|
|
(976
|
)
|
||||
Amortization of stock based compensation
|
—
|
|
|
—
|
|
|
4,954
|
|
|
—
|
|
|
4,954
|
|
||||
Cash dividends declared
|
—
|
|
|
—
|
|
|
—
|
|
|
(10,133
|
)
|
|
(10,133
|
)
|
||||
Common stock repurchase program including commissions
|
(929,116
|
)
|
|
—
|
|
|
(13,483
|
)
|
|
—
|
|
|
(13,483
|
)
|
||||
Issuance of restricted stock under the Equity Plan
|
24,989
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Cumulative translation adjustment
|
—
|
|
|
—
|
|
|
(49
|
)
|
|
—
|
|
|
(49
|
)
|
||||
Balance, December 31, 2018
|
19,389,066
|
|
|
$
|
2
|
|
|
$
|
89,258
|
|
|
$
|
185,294
|
|
|
$
|
274,554
|
|
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(10,765
|
)
|
|
(10,765
|
)
|
||||
Issuance of common stock under the Employee Stock Purchase Plan
|
23,299
|
|
|
—
|
|
|
264
|
|
|
—
|
|
|
264
|
|
||||
Issuance of common stock for vested restricted stock units under the 2012 Equity Plan
|
233,507
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Purchase of common stock for tax withholding
|
(74,049
|
)
|
|
—
|
|
|
(1,017
|
)
|
|
—
|
|
|
(1,017
|
)
|
||||
Amortization of stock based compensation
|
—
|
|
|
—
|
|
|
3,643
|
|
|
—
|
|
|
3,643
|
|
||||
Cash dividends declared
|
—
|
|
|
—
|
|
|
—
|
|
|
(9,864
|
)
|
|
(9,864
|
)
|
||||
Common stock repurchase program including commissions
|
(532,354
|
)
|
|
—
|
|
|
(6,575
|
)
|
|
—
|
|
|
(6,575
|
)
|
||||
Issuance of restricted stock under the Equity Plan and other
|
32,145
|
|
|
—
|
|
|
|
|
|
154
|
|
|
154
|
|
||||
Cumulative translation adjustment
|
—
|
|
|
—
|
|
|
(300
|
)
|
|
—
|
|
|
(300
|
)
|
||||
Balance, December 31, 2019
|
19,071,614
|
|
|
$
|
2
|
|
|
$
|
85,273
|
|
|
$
|
164,819
|
|
|
$
|
250,094
|
|
|
For the Year Ended December 31,
|
||||||||||
(Dollars in thousands)
|
2019
|
|
2018
|
|
2017
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
||||||
Net loss
|
$
|
(10,765
|
)
|
|
$
|
(1,479
|
)
|
|
$
|
(15,306
|
)
|
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Depreciation, amortization and accretion
|
9,249
|
|
|
10,769
|
|
|
11,624
|
|
|||
Goodwill impairment
|
8,849
|
|
|
—
|
|
|
—
|
|
|||
Deferred income tax (benefit) expense
|
(3,253
|
)
|
|
(1,692
|
)
|
|
25,390
|
|
|||
Stock based compensation
|
3,643
|
|
|
4,954
|
|
|
3,688
|
|
|||
Provisions for doubtful accounts, service credits, adjustments of non-cash transaction taxes and other
|
694
|
|
|
1,922
|
|
|
222
|
|
|||
Changes in assets and liabilities:
|
|
|
|
|
|
||||||
Accounts receivable
|
964
|
|
|
(915
|
)
|
|
(9,648
|
)
|
|||
Prepaid expenses and other assets
|
2,913
|
|
|
(646
|
)
|
|
244
|
|
|||
Accounts payable, accrued liabilities and other
|
(643
|
)
|
|
(1,732
|
)
|
|
(3,278
|
)
|
|||
Deferred revenue
|
42
|
|
|
(866
|
)
|
|
2,579
|
|
|||
Net cash provided by operating activities
|
11,693
|
|
|
10,315
|
|
|
15,515
|
|
|||
Cash flows from investing activities:
|
|
|
|
|
|
||||||
Purchases of property and equipment
|
(4,837
|
)
|
|
(5,915
|
)
|
|
(9,214
|
)
|
|||
Purchase of short-term investments
|
(59,385
|
)
|
|
(3,911
|
)
|
|
(3,957
|
)
|
|||
Maturity of short-term investments
|
34,000
|
|
|
4,000
|
|
|
4,000
|
|
|||
Net cash used in investing activities
|
(30,222
|
)
|
|
(5,826
|
)
|
|
(9,171
|
)
|
|||
Cash flows from financing activities:
|
|
|
|
|
|
||||||
Cash distributions to stockholders
|
(9,819
|
)
|
|
(10,064
|
)
|
|
(15,234
|
)
|
|||
Purchase of common stock (including commissions)
|
(6,575
|
)
|
|
(13,483
|
)
|
|
(10,023
|
)
|
|||
Proceeds from issuance of common stock under the Employee Stock Purchase Plan
|
258
|
|
|
247
|
|
|
256
|
|
|||
Purchase of common stock for tax withholding on vested equity awards
|
(1,017
|
)
|
|
(976
|
)
|
|
—
|
|
|||
Net cash used in financing activities
|
(17,153
|
)
|
|
(24,276
|
)
|
|
(25,001
|
)
|
|||
Effect of exchange rate on cash
|
(300
|
)
|
|
(49
|
)
|
|
11
|
|
|||
Net decrease in cash and cash equivalents
|
(35,982
|
)
|
|
(19,836
|
)
|
|
(18,646
|
)
|
|||
Cash and cash equivalents, beginning of period
|
83,343
|
|
|
103,179
|
|
|
121,825
|
|
|||
Cash and cash equivalents, end of period
|
$
|
47,361
|
|
|
$
|
83,343
|
|
|
$
|
103,179
|
|
Supplemental disclosure:
|
|
|
|
|
|
||||||
Income taxes paid
|
$
|
901
|
|
|
$
|
1,061
|
|
|
$
|
2,620
|
|
|
|
For the Twelve Months Ended December 31,
|
||||||||||
(Dollars in thousands)
|
|
2019
|
|
2018
|
|
2017
|
||||||
Revenue - wireless
|
|
|
|
|
|
|
||||||
Paging revenue
|
|
85,067
|
|
|
90,570
|
|
|
97,296
|
|
|||
Product and other revenue
|
|
3,100
|
|
|
3,707
|
|
|
3,892
|
|
|||
Total wireless revenue
|
|
88,167
|
|
|
94,277
|
|
|
101,188
|
|
|||
|
|
|
|
|
|
|
||||||
Revenue - software
|
|
|
|
|
|
|
||||||
License
|
|
8,950
|
|
|
13,042
|
|
|
9,541
|
|
|||
Services
|
|
19,189
|
|
|
18,091
|
|
|
17,630
|
|
|||
Equipment
|
|
3,618
|
|
|
4,995
|
|
|
4,147
|
|
|||
Operations revenue
|
|
$
|
31,757
|
|
|
$
|
36,128
|
|
|
$
|
31,318
|
|
Maintenance revenue
|
|
$
|
40,365
|
|
|
$
|
39,069
|
|
|
$
|
38,669
|
|
Total software revenue
|
|
$
|
72,122
|
|
|
$
|
75,197
|
|
|
$
|
69,987
|
|
Total revenue
|
|
$
|
160,289
|
|
|
$
|
169,474
|
|
|
$
|
171,175
|
|
|
For the Twelve Months Ended December 31,
|
||||||||||
(Dollars in thousands)
|
2019
|
|
2018
|
|
2017
|
||||||
Revenue
|
|
|
|
|
|
||||||
United States
|
$
|
154,766
|
|
|
$
|
164,558
|
|
|
$
|
166,790
|
|
International
|
5,523
|
|
|
4,916
|
|
|
4,385
|
|
|||
Total revenue
|
$
|
160,289
|
|
|
$
|
169,474
|
|
|
$
|
171,175
|
|
(Dollars in thousands)
|
December 31, 2018
|
|
Additions
|
|
Revenue Recognized
|
|
December 31, 2019
|
||||||||
Deferred Revenue
|
$
|
26,582
|
|
|
$
|
70,684
|
|
|
$
|
(70,645
|
)
|
|
$
|
26,621
|
|
(Dollars in thousands)
|
December 31, 2018
|
|
Additions
|
|
Commissions Recognized
|
|
December 31, 2019
|
||||||||
Prepaid Commissions
|
$
|
2,394
|
|
|
$
|
5,031
|
|
|
$
|
(4,994
|
)
|
|
$
|
2,431
|
|
|
|
For the Year Ended December 31,
|
||
(Dollars in thousands)
|
|
2019
|
||
Operating lease cost
|
|
$
|
5,823
|
|
Short-term lease cost
|
|
8,281
|
|
|
Short-term lease cost - related party(1)
|
|
3,589
|
|
|
Total lease cost
|
|
$
|
17,693
|
|
|
|
|
||
Supplemental Disclosure:
|
|
|
||
Cash paid for amounts included in the measurement of lease liabilities - operating leases
|
|
$
|
1,421
|
|
Weighted-average remaining lease term - operating leases
|
|
5.60 years
|
|
|
Weighted-average discount rate - operating leases
|
|
5.45
|
%
|
For the Year Ended December 31,
|
|
(Dollars in thousands)
|
||
2020
|
|
5,447
|
|
|
2021
|
|
4,398
|
|
|
2022
|
|
2,765
|
|
|
2023
|
|
1,860
|
|
|
2024
|
|
1,409
|
|
|
Thereafter
|
|
3,824
|
|
|
Total future lease payments
|
|
19,703
|
|
|
Imputed interest
|
|
(2,691
|
)
|
|
Total
|
|
$
|
17,012
|
|
|
For the Year Ended December 31,
|
||||||||||
(Dollars in thousands)
|
2019
|
|
2018
|
|
2017
|
||||||
Depreciation
|
|
|
|
|
|
||||||
Leasehold improvements
|
$
|
63
|
|
|
$
|
232
|
|
|
$
|
234
|
|
Asset retirement costs
|
(766
|
)
|
|
(300
|
)
|
|
(388
|
)
|
|||
Paging and computer equipment
|
6,526
|
|
|
7,397
|
|
|
8,024
|
|
|||
Furniture, fixtures and vehicles
|
374
|
|
|
398
|
|
|
306
|
|
|||
Total depreciation
|
6,197
|
|
|
7,727
|
|
|
8,176
|
|
|||
Amortization
|
2,500
|
|
|
2,500
|
|
|
2,886
|
|
|||
Accretion
|
552
|
|
|
542
|
|
|
562
|
|
|||
Total depreciation, amortization and accretion expense
|
$
|
9,249
|
|
|
$
|
10,769
|
|
|
$
|
11,624
|
|
|
Useful Life
(In Years) |
|
For the Year Ended December 31,
|
||||||
(Dollars in thousands)
|
|
2019
|
|
2018
|
|||||
Leasehold improvements
|
lease term
|
|
$
|
3,620
|
|
|
$
|
4,139
|
|
Asset retirement costs
|
1-5
|
|
1,922
|
|
|
2,021
|
|
||
Paging and computer equipment
|
1-5
|
|
96,562
|
|
|
98,401
|
|
||
Furniture, fixtures and vehicles
|
3-5
|
|
3,716
|
|
|
4,353
|
|
||
Total property and equipment
|
|
|
105,820
|
|
|
108,914
|
|
||
Accumulated depreciation
|
|
|
(97,820
|
)
|
|
(98,560
|
)
|
||
Total property and equipment, net
|
|
|
$
|
8,000
|
|
|
$
|
10,354
|
|
|
|
|
As of December 31,
|
||||||||||||||||||||||
|
|
|
2019
|
|
2018
|
||||||||||||||||||||
(Dollars in thousands)
|
Useful Life (In Years)
|
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
Net Carrying Amount
|
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
Net Carrying Amount
|
||||||||||||
Customer relationships
|
10
|
|
$
|
25,002
|
|
|
$
|
(22,085
|
)
|
|
$
|
2,917
|
|
|
$
|
25,002
|
|
|
$
|
(19,585
|
)
|
|
$
|
5,417
|
|
(Dollars in thousands)
|
Short-Term Portion
|
|
Long-Term Portion
|
|
Total
|
||||||
Balance at January 1, 2018
|
$
|
234
|
|
|
$
|
7,174
|
|
|
$
|
7,408
|
|
Accretion
|
(91
|
)
|
|
633
|
|
|
542
|
|
|||
Amounts paid
|
(154
|
)
|
|
—
|
|
|
(154
|
)
|
|||
Additions
|
—
|
|
|
55
|
|
|
55
|
|
|||
Reductions
|
(185
|
)
|
|
(1,119
|
)
|
|
(1,304
|
)
|
|||
Reclassifications
|
230
|
|
|
(230
|
)
|
|
—
|
|
|||
Balance at December 31, 2018
|
34
|
|
|
6,513
|
|
|
6,547
|
|
|||
Accretion
|
39
|
|
|
513
|
|
|
552
|
|
|||
Amounts paid
|
(177
|
)
|
|
—
|
|
|
(177
|
)
|
|||
Additions
|
—
|
|
|
32
|
|
|
32
|
|
|||
Reductions
|
14
|
|
|
(817
|
)
|
|
(803
|
)
|
|||
Reclassifications
|
180
|
|
|
(180
|
)
|
|
—
|
|
|||
Balance at December 31, 2019
|
$
|
90
|
|
|
$
|
6,061
|
|
|
$
|
6,151
|
|
For the Three Months Ended
|
Shares Purchased
|
Amount
|
|
Shares Purchased
|
Amount
|
|
Shares Purchased
|
Amount
|
|||||||||
(dollars in thousands, except for shares purchased)
|
2019
|
|
2018
|
|
2017
|
||||||||||||
March 31,
|
131,012
|
|
$
|
1,806
|
|
|
127,792
|
|
$
|
1,922
|
|
|
—
|
|
$
|
—
|
|
June 30,
|
—
|
|
—
|
|
|
501,782
|
|
7,520
|
|
|
572,550
|
|
10,000
|
|
|||
September 30,
|
401,342
|
|
4,749
|
|
|
36,542
|
|
558
|
|
|
—
|
|
—
|
|
|||
December 31,
|
—
|
|
—
|
|
|
263,000
|
|
3,446
|
|
|
—
|
|
—
|
|
|||
Total
|
532,354
|
|
$
|
6,555
|
|
|
929,116
|
|
$
|
13,446
|
|
|
572,550
|
|
$
|
10,000
|
|
|
For the Year Ended December 31,
|
||||||||||
(in thousands, except for share and per share amounts)
|
2019
|
|
2018
|
|
2017
|
||||||
Numerator:
|
|
|
|
|
|
||||||
Net loss
|
$
|
(10,765
|
)
|
|
$
|
(1,479
|
)
|
|
$
|
(15,306
|
)
|
|
|
|
|
|
|
||||||
Denominator:
|
|
|
|
|
|
||||||
Basic and diluted weighted average outstanding shares of common stock
|
19,089,402
|
|
|
19,667,891
|
|
|
20,210,260
|
|
|||
Basic and diluted net loss per common share
|
$
|
(0.56
|
)
|
|
$
|
(0.08
|
)
|
|
$
|
(0.76
|
)
|
|
For the Year Ended December 31,
|
|||||||
|
2019
|
|
2018
|
|
2017
|
|||
Restricted stock units
|
189,862
|
|
|
178,279
|
|
|
90,665
|
|
|
Activity
|
|
Total equity securities available at January 1, 2017
|
1,246,939
|
|
Less: RSU and restricted stock awarded to eligible employees, net of forfeitures
|
(106,281
|
)
|
Total equity securities available at December 31, 2017
|
1,140,658
|
|
Less: RSU and restricted stock awarded to eligible employees, net of forfeitures
|
(236,221
|
)
|
Total equity securities available at December 31, 2018
|
904,437
|
|
Less: RSU and restricted stock awarded to eligible employees, net of forfeitures
|
(257,957
|
)
|
Total equity securities available at December 31, 2019
|
646,480
|
|
|
|
Shares
|
|
Weighted-
Average Grant Date Fair Value |
|||
Unvested at January 1, 2019
|
|
404,325
|
|
|
$
|
17.27
|
|
Granted
|
|
388,321
|
|
|
13.27
|
|
|
Vested
|
|
(242,856
|
)
|
|
17.48
|
|
|
Forfeited
|
|
(130,364
|
)
|
|
15.49
|
|
|
Unvested at December 31, 2019
|
|
419,426
|
|
|
$
|
14.00
|
|
|
For the Year Ended December 31,
|
||||||||||
(Dollars in thousands)
|
2019
|
|
2018
|
|
2017
|
||||||
Performance-based RSUs
|
$
|
1,434
|
|
|
$
|
2,127
|
|
|
$
|
1,762
|
|
Time-based RSUs and restricted stock
|
2,119
|
|
|
2,756
|
|
|
1,862
|
|
|||
ESPP
|
90
|
|
|
71
|
|
|
64
|
|
|||
Total stock based compensation
|
$
|
3,643
|
|
|
$
|
4,954
|
|
|
$
|
3,688
|
|
|
For the Year Ended December 31,
|
||||||||||
(Dollars in thousands)
|
2019
|
|
2018
|
|
2017
|
||||||
(Loss) income before income tax (benefit) expense
|
$
|
(13,423
|
)
|
|
$
|
(2,185
|
)
|
|
$
|
11,559
|
|
Current:
|
|
|
|
|
|
||||||
Federal tax
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
199
|
|
State tax
|
582
|
|
|
838
|
|
|
1,006
|
|
|||
Foreign tax
|
13
|
|
|
148
|
|
|
270
|
|
|||
Total current
|
595
|
|
|
986
|
|
|
1,475
|
|
|||
Deferred:
|
|
|
|
|
|
||||||
Federal tax
|
(2,121
|
)
|
|
(1,467
|
)
|
|
26,348
|
|
|||
State tax
|
(1,239
|
)
|
|
(532
|
)
|
|
(787
|
)
|
|||
Foreign tax
|
107
|
|
|
307
|
|
|
(171
|
)
|
|||
Total deferred
|
(3,253
|
)
|
|
(1,692
|
)
|
|
25,390
|
|
|||
Total income tax (benefit) expense
|
$
|
(2,658
|
)
|
|
$
|
(706
|
)
|
|
$
|
26,865
|
|
Effective tax rate reconciliation
|
2019
|
|
2018
|
|
2017
|
|||||||||||||||
(Dollars in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
(Loss) income before income tax (benefit) expense
|
$
|
(13,423
|
)
|
|
|
|
$
|
(2,185
|
)
|
|
|
|
$
|
11,559
|
|
|
|
|||
Income taxes computed at the Federal statutory rate
|
$
|
(2,819
|
)
|
|
21.0
|
%
|
|
$
|
(459
|
)
|
|
21.0
|
%
|
|
$
|
4,046
|
|
|
35.0
|
%
|
State income taxes, net of Federal benefit
|
(567
|
)
|
|
4.2
|
%
|
|
306
|
|
|
(14.0
|
)%
|
|
472
|
|
|
4.1
|
%
|
|||
Goodwill impairment
|
2,243
|
|
|
(16.7
|
)%
|
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—
|
%
|
|||
Impact of 2017 Tax Act
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—
|
%
|
|
24,235
|
|
|
209.7
|
%
|
|||
Research and development and other tax credits
|
(1,790
|
)
|
|
13.3
|
%
|
|
(1,144
|
)
|
|
52.4
|
%
|
|
(1,775
|
)
|
|
(15.4
|
)%
|
|||
Excess executive compensation
|
322
|
|
|
(2.4
|
)%
|
|
281
|
|
|
(12.9
|
)%
|
|
—
|
|
|
—
|
%
|
|||
Other
|
(47
|
)
|
|
0.4
|
%
|
|
310
|
|
|
(14.2
|
)%
|
|
(113
|
)
|
|
(1.0
|
)%
|
|||
(Benefit from) provision for income taxes
|
$
|
(2,658
|
)
|
|
19.8
|
%
|
|
$
|
(706
|
)
|
|
32.3
|
%
|
|
$
|
26,865
|
|
|
232.4
|
%
|
|
December 31,
|
|||||||
(Dollars in thousands)
|
2019
|
|
2018
|
|||||
Capitalized research and development costs
|
$
|
18,605
|
|
|
$
|
14,219
|
|
|
Net operating loss carryforward
|
15,978
|
|
|
18,851
|
|
|||
Property and equipment
|
6,092
|
|
|
5,969
|
|
|||
Accrued liabilities, reserves and other expenses
|
3,718
|
|
|
3,837
|
|
|||
Research and development credits
|
4,140
|
|
|
2,360
|
|
|||
Tax credits
|
1,467
|
|
|
2,141
|
|
|||
Stock based compensation
|
1,600
|
|
12
|
|
1,739
|
|
||
Other
|
121
|
|
|
200
|
|
|||
Gross deferred income tax assets
|
51,721
|
|
|
49,316
|
|
|||
Deferred income tax liabilities:
|
|
|
|
|||||
Intangible assets
|
(2,430
|
)
|
|
(2,711
|
)
|
|||
Prepaid and other expenses
|
(308
|
)
|
|
(121
|
)
|
|||
Gross deferred income tax liabilities
|
$
|
(2,738
|
)
|
|
$
|
(2,832
|
)
|
|
Net deferred income tax assets
|
$
|
48,983
|
|
|
$
|
46,484
|
|
For the Year Ended December 31,
|
(Dollars in thousands)
|
||
2020
|
$
|
6,792
|
|
2021
|
5,056
|
|
|
2022
|
3,039
|
|
|
2023
|
1,968
|
|
|
2024
|
498
|
|
|
Thereafter
|
217
|
|
|
Total
|
$
|
17,570
|
|
For the Year Ended December 31, 2019
|
First
Quarter |
|
Second
Quarter |
|
Third
Quarter |
|
Fourth Quarter(3)
|
||||||||
|
(Dollars in thousands except per share amounts)
|
||||||||||||||
Revenues(1)
|
$
|
41,764
|
|
|
$
|
39,525
|
|
|
$
|
39,453
|
|
|
$
|
39,548
|
|
Operating income (loss)(1)
|
1,115
|
|
|
(1,992
|
)
|
|
(2,692
|
)
|
|
(12,239
|
)
|
||||
Net income (loss)(1)
|
742
|
|
|
(670
|
)
|
|
(1,326
|
)
|
|
(9,511
|
)
|
||||
Basic and diluted net income (loss) per common share(2)
|
0.04
|
|
|
(0.03
|
)
|
|
(0.07
|
)
|
|
(0.50
|
)
|
||||
For the Year Ended December 31, 2018
|
First
Quarter |
|
Second
Quarter |
|
Third
Quarter |
|
Fourth Quarter
|
||||||||
|
(Dollars in thousands except per share amounts)
|
||||||||||||||
Revenues(1)
|
$
|
43,114
|
|
|
$
|
40,628
|
|
|
$
|
42,476
|
|
|
$
|
43,256
|
|
Operating income (loss)(1)
|
584
|
|
|
(2,346
|
)
|
|
(1,560
|
)
|
|
149
|
|
||||
Net income (loss)(1)
|
345
|
|
|
(1,172
|
)
|
|
(840
|
)
|
|
189
|
|
||||
Basic and diluted net income (loss) per common share(2)
|
0.02
|
|
|
(0.06
|
)
|
|
(0.04
|
)
|
|
0.01
|
|
(1)
|
Slight variations in totals are due to rounding.
|
(2)
|
Basic and diluted net income (loss) per common share is computed independently for each period presented. As a result, the sum of the quarterly basic and diluted net income (loss) per common share for the years ended December 31, 2019 and 2018 may not equal the total computed for the year.
|
(3)
|
During the fourth quarter of 2019, the Company recorded a goodwill impairment of $8.8 million. See Note 6 "Goodwill and Intangible Assets, Net" for additional details.
|
Allowance for Doubtful Accounts,
Service Credits and Other |
|
Balance at the
Beginning of the Period |
|
Charged to
Operations |
|
Write-offs
|
|
Balance at the
End of the Period |
||||||||
|
|
(Dollars in thousands)
|
||||||||||||||
Year ended December 31, 2019
|
|
$
|
1,705
|
|
|
$
|
1,248
|
|
|
$
|
(1,660
|
)
|
|
$
|
1,293
|
|
Year ended December 31, 2018
|
|
$
|
1,065
|
|
|
$
|
2,125
|
|
|
$
|
(1,485
|
)
|
|
$
|
1,705
|
|
Year ended December 31, 2017
|
|
$
|
1,056
|
|
|
$
|
1,035
|
|
|
$
|
(1,026
|
)
|
|
$
|
1,065
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incorporated by Reference
|
|
|
|||||||
Exhibit Number
|
|
Exhibit Description
|
|
Form
|
|
File No.
|
|
Exhibit
|
|
Filing Date
|
|
Filed/Furnished Herewith
|
3.1
|
|
|
8-K
|
|
001-32358
|
|
3.1
|
|
7/8/2014
|
|
|
|
3.2
|
|
|
8-K
|
|
001-32358
|
|
3.1
|
|
12/20/2016
|
|
|
|
4.1*
|
|
|
S-4/A
|
|
333-115769
|
|
4.1
|
|
10/6/2004
|
|
|
|
10.1
|
|
|
10-Q
|
|
001-32358
|
|
10.1
|
|
10/25/2018
|
|
|
|
10.2*
|
|
|
10-Q
|
|
001-32358
|
|
10.18
|
|
11/1/2007
|
|
|
|
10.3*
|
|
|
10-Q
|
|
001-32358
|
|
10.24
|
|
10/30/2008
|
|
|
|
10.4*
|
|
|
DEF 14A
|
|
001-32358
|
|
A
|
|
3/28/2012
|
|
|
|
10.5†
|
|
|
8-K
|
|
001-32358
|
|
10.1
|
|
1/4/2019
|
|
|
|
10.6*
|
|
|
10-K
|
|
001-32358
|
|
10.16
|
|
3/2/2017
|
|
|
|
10.7
|
|
|
10-K
|
|
001-32358
|
|
10.17
|
|
3/2/2017
|
|
|
|
10.8*†
|
|
|
10-K
|
|
001-32358
|
|
10.18
|
|
3/2/2017
|
|
|
|
10.9†
|
|
|
10-K
|
|
001-32358
|
|
10.10
|
|
3/1/2018
|
|
|
|
10.10†
|
|
|
10-K
|
|
001-32358
|
|
10.10
|
|
2/28/2019
|
|
|
|
10.11†
|
|
|
10-K
|
|
001-32358
|
|
10.13
|
|
3/1/2018
|
|
|
|
10.12†
|
|
|
|
|
|
|
|
|
|
|
Filed
|
|
10.13†
|
|
|
10-K
|
|
001-32358
|
|
10.15
|
|
2/28/2019
|
|
|
|
10.14†
|
|
|
10-K
|
|
001-32358
|
|
10.16
|
|
3/1/2018
|
|
|
|
10.15†
|
|
|
10-K
|
|
001-32358
|
|
10.16
|
|
2/28/2019
|
|
|
|
10.16†
|
|
|
|
|
|
|
|
|
|
|
Filed
|
|
10.17*
|
|
|
DEF 14A
|
|
001-32358
|
|
A
|
|
4/27/2017
|
|
|
|
10.18†
|
|
|
10-Q
|
|
001-32358
|
|
10.2
|
|
4/27/2017
|
|
|
|
21
|
|
|
10-K
|
|
001-32358
|
|
21
|
|
3/1/2018
|
|
|
|
23
|
|
|
|
|
|
|
|
|
|
|
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.
|
†
|
Denotes a management contract or compensatory plan or arrangement.
|
(1)
|
Portions of this document have been omitted and filed separately with the Securities and Exchange Commission
|
I.
|
Effective Date. The 2020 Short-Term Incentive Plan (the “Plan”) for Spok Holdings, Inc., was adopted by the Compensation Committee of the Board of Directors (the “Compensation Committee”) of Spok Holdings, Inc., (the “Parent” or the “Company”), a Delaware corporation for the employees of Spok, Inc., a Delaware corporation and an indirect wholly-owned subsidiary of the Parent (“Spok”) on December 17, 2020. The Plan is effective as of January 1, 2020 and supersedes and replaces all former management short-term incentive plans, including the Spok Holdings, Inc., 2019 Short-Term Incentive Plan.
|
II.
|
Purpose. The Plan is designed to attract, motivate, retain and reward key employees for their performance during the calendar year, from January 1 through December 31, 2020 (the “Performance Period”). The Plan rewards key employees by allowing them to receive cash bonuses based on how well the Company performs against the performance objectives as set forth by the Compensation Committee and, as may be adjusted by the Compensation Committee in the event of a Change of Control or other corporate reorganization, merger, similar transaction, to take into account extraordinary events or as the Compensation Committee determines is in the best interests of the Company. In order for bonuses to be earned, the Company must meet the quantitative Performance Objectives and the Management by Objective (MBO) criteria as by December 31, 2020. Performance Objectives are based solely on the consolidated performance of the Company. For clarity, Performance Objectives and the attainment thereof does not include revenue or expenses related to acquisitions or due diligence expenses occurring after the Effective Date of this Plan except as directed by the Compensation Committee.
|
III.
|
Eligibility. Participation in the Plan is limited to those key employees who are selected for participation in the Plan by the Compensation Committee, in its sole discretion (each such individual, a “Participant”). Individuals selected by the Compensation Committee to participate as of January 1, 2020 are listed on Exhibit A. Newly hired or promoted employees, or employees who otherwise become eligible to participate, who are selected to participate in the Plan after January 1, 2020 but before October 1, 2020 will participate in the Plan on a prorated basis based on the number of days worked during the performance period after becoming bonus eligible. Employees who are newly hired or promoted on or after October 1, 2020 will not be eligible to participate in the Plan.
|
IV.
|
Target Bonus. The target bonus for each Participant is based on a percentage of the Participant’s annual (or prorated, if applicable) salary as of January 1, 2020 (or date of hire or promotion to an eligible position, if later). The applicable percentage is determined by the Compensation Committee with respect to executives earning $250,000 or more and by the CEO for other management and need not be identical among Participants. The earned bonus may be greater than or less than the target bonus depending on the level at which the Performance Objectives are attained.
|
V.
|
Payment of Earned Bonus.
|
a.
|
Except as provided herein, each earned bonus under the Plan will be calculated based on the attainment of the Performance Objectives and will be paid in a lump sum (subject to any required withholding for income and employment taxes) after the 2020 annual audit of the Parent’s consolidated financial statement has been completed and the Parent’s 2020 Annual Report on Form 10-K has been filed with the Securities and Exchange Commission but in no event later than December 31, 2021.
|
b.
|
If the Participant involuntarily Separates from Service without Cause or due to disability or dies prior to December 31, 2020, he or she will be eligible to receive a prorated bonus provided that the Company is on track to attain the Performance Objectives as reasonably determined by the Compensation Committee and provided further that, in the event Participant involuntarily Separates
|
i.
|
For purposes of the Plan, “Separation from Service” shall have the meaning provided in the Treasury Regulations under section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), and “Separates from Service” shall have a consistent meaning. Unless otherwise defined in an employment agreement between the Participant and the Parent or the Company, for purposes of the Plan, “Cause” means (i) dishonesty of a material nature that relates to the performance of services for the Company by Participants; (ii) criminal conduct (other than minor infractions and traffic violations) that relates to the performance of services for the Company by Participant; (iii) the Participant’s willfully breaching or failing to perform his or her duties as an employee of the Company (other than any such failure resulting from the Participant having a disability (as defined herein)), within a reasonable period of time after a written demand for substantial performance is delivered to the Participant by the Compensation Committee, which demand specifically identifies the manner in which the Compensation Committee believes that the Participant has not substantially performed his duties; or (iv) the willful engaging by the Participant in conduct that is demonstrably and materially injurious to the Parent, Company or an Affiliate, monetarily or otherwise. No act or failure to act on the Participant’s part shall be deemed “willful” unless done, or omitted to be done; by the Participant not in good faith and without reasonable belief that such action or omission was in the reasonable best interests of the Parent, Company and Affiliates. For this purpose, “disability” means a condition or circumstance such that the Participant has become totally and permanently disabled as defined or described in the Parent’s long term disability benefit plan applicable to executive officers as in effect at the time the Participant incurs a disability.
|
c.
|
Notwithstanding anything to the contrary in this Plan, no payments contemplated by this Plan will be paid during the six-month period following a Participant’s Separation from Service unless the Company determines, in its good faith judgment, that paying such amounts at the time indicated in paragraph b above would not cause the Participant to incur an additional tax under Code section 409A (a)(2)(B)(i), in which case the bonus payment shall be paid in a lump sum on the first day of the seventh month following the Participant’s Separation from Service.
|
VI.
|
Forfeiture. Any Participant whose employment is terminated for Cause or who voluntarily Separates from Service prior to the date bonuses are paid shall forfeit any right to receive a bonus award.
|
VII.
|
Clawback. The Compensation Committee of the Board may require forfeiture or a clawback of any incentive compensation awarded or paid under this Plan in excess of the compensation actually earned based on a restatement of the Company’s financial statements as filed with the Securities and Exchange Commission for the period covered by this Plan.
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VIII.
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Administrator. The Compensation Committee shall administer the Plan in accordance with its terms, and shall have full discretionary power and authority to construe and interpret the Plan; to prescribe, amend and rescind rules and regulations, terms, and notices hereunder; and to make all other determinations necessary or advisable in its discretion for the administration of the Plan. Any actions of the Compensation Committee with respect to the Plan shall be conclusive and binding upon all persons interested in the Plan. The Compensation Committee, in its sole discretion and on such terms and conditions as it may provide, may delegate all or part of its authority and powers under the Plan to one or more directors and/or officers of the Parent or the Company.
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IX.
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Amendment; Termination. The Compensation Committee, in its sole discretion, without prior notice to Participants, may amend or terminate the Plan, or any part thereof, including the Performance Objectives as described in Section II, at any time and for any reason, to the extent such action will not cause adverse tax consequences to a participant under Code section 409A. Any amendment or termination must be in writing and shall be communicated to all Participants. No award may be granted during any period of suspension or after termination of the Plan.
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X.
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Miscellaneous.
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a.
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No Rights as Employee. Nothing contained in this Plan or any documents relating to this Plan shall (a) confer on a Participant any right to continue in the employ of the Company; (b) constitute any contract or agreement of employment; or (c) interfere in any way with the Company’s right to terminate the Participant’s employment at any time, with or without Cause.
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b.
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Tax Withholding. To the extent required by applicable federal, state, local or foreign law, the Company shall withhold all applicable taxes (including, but not limited to, the Participant’s FICA and Social Security obligations) from any bonus payment.
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c.
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Transferability. A Participant may not sell, assign, transfer or encumber any of his or her rights under the Plan.
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d.
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Unsecured General Creditor. Participants (or their beneficiary) may seek to enforce any rights or claims for payment under the Plan solely as an unsecured general creditor of the Parent or Spok.
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e.
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Successors. This Plan shall be binding upon and inure to the benefit of the Parent, Company and any successor to the Company and the Participant’s heirs, executors, administrators and legal representatives.
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f.
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Code Section 409A. The Plan is intended to be a nonqualified deferred compensation plan within the meaning of Code section 409A and shall be interpreted to meet the requirements of Code section 409A. To the extent that any provision of the Plan would cause a conflict with the requirements of Code section 409A, or would cause the administration of the Plan to fail to satisfy Code section 409A, such provision shall be deemed null and void to the extent permitted by applicable law. Nothing herein shall be construed as a guarantee of any particular tax treatment to a Participant.
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g.
|
Governing Law. All questions pertaining to the validity, construction and administration of the Plan shall be determined in accordance with the laws of the State of Delaware, without regard to conflicts of law provisions.
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h.
|
Integration. This document and each exhibit hereto represent the entire agreement and understanding between the Company and the Participants and supersede any and all prior agreements or understandings, whether oral or written, with the Company relating to the subject matter covered by this Plan.
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i.
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Severability. In case any provision of this Plan shall be held illegal or invalid, such illegality or invalidity shall be construed and enforced as if said illegal or invalid provision had never been inserted herein and shall not affect the remaining provisions of this Plan, but shall be fully severable, and the Plan shall be construed and enforced as if any such illegal or invalid provision were not a part hereof.
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1.
|
I have reviewed this Annual Report on Form 10-K of Spōk Holdings, Inc.;
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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;
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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: February 27, 2020
|
/s/ Vincent D. Kelly
|
|
Vincent D. Kelly
|
|
President and Chief Executive Officer
|
1.
|
I have reviewed this Annual Report on Form 10-K of Spōk 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: February 27, 2020
|
/s/ Michael W. Wallace
|
|
Michael W. Wallace
|
|
Chief Financial Officer
|
(i)
|
the accompanying Annual Report on Form 10-K of the Company for the year ended December 31, 2019 (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: February 27, 2020
|
/s/ Vincent D. Kelly
|
|
Vincent D. Kelly
|
|
President and Chief Executive Officer
|
(i)
|
the accompanying Annual Report on Form 10-K of the Company for the year ended December 31, 2019 (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: February 27, 2020
|
/s/ Michael W. Wallace
|
|
Michael W. Wallace
|
|
Chief Financial Officer
|