Spok Reports Fourth Quarter and Full Year 2021 Results

Rhea-AI Summary

Spok Holdings, Inc. announced a significant 150% increase in its quarterly dividend, now at $0.3125 per share, following its fourth-quarter and full-year 2021 results. The company reported a net loss of $16.7 million for Q4 2021, down from a loss of $46.6 million in Q4 2020. Total revenue for 2021 decreased to $142.2 million from $148.2 million in 2020. Despite showing resilience in its wireless revenue, overall performance was impacted by a non-cash impairment charge of $15.7 million. Looking ahead, Spok expects total revenue in 2022 to range from $126 million to $139.2 million.

Positive

• 150% increase in quarterly dividend to $0.3125 per share.
• 2021 financial guidance for revenue and adjusted operating expenses met.
• Cash balance of $59.6 million and no debt as of December 31, 2021.
• Improved net loss in Q4 2021 compared to Q4 2020 ($16.7 million vs. $46.6 million).

Negative

• Total revenue decreased to $142.2 million in 2021 from $148.2 million in 2020.
• Operating expenses included $15.7 million in noncash impairment charges.
• Adjusted EBITDA loss worsened to $3.8 million in Q4 2021 from positive $1.7 million in Q4 2020.

Dividend Increases by 150%, from $0.125 per quarter to $0.3125 per quarter in Connection with Announcement of New Strategic Business Plan

ALEXANDRIA, Va.--(BUSINESS WIRE)-- Spok Holdings, Inc. (NASDAQ: SPOK), a global leader in healthcare communications, today announced results for the fourth quarter and full year ended December 31, 2021. In addition, the Company’s Board of Directors declared a regular quarterly dividend of $0.3125 per share, payable on March 30, 2022, to stockholders of record on March 16, 2022.

2021 Fourth Quarter and Full Year Highlights:

• Achieved full year 2021 financial guidance for revenue, adjusted operating expenses and capital expenditures
• Cash, cash equivalents and short-term investments balance of $59.6 million at December 31, 2021, and no debt
• Wireless ARPU (average revenue per unit) in 2021 totaled $7.30, equivalent to 2020
• Launched the Next Generation of Paging with the Launch of its new GenA^TM Pager
• Subsequent to the end of the fourth quarter 2021, was voted top-rated secure communications platform by healthcare industry clients in Black Box Industry 2022 survey

2021 Fourth Quarter and Full Year Results:

Consolidated revenue for the fourth quarter of 2021 under Generally Accepted Accounting Principles (“GAAP”) was $34.5 million, compared to $37.5 million in the fourth quarter of 2020. For the year ended December 31, 2021, consolidated revenue totaled $142.2 million, compared to $148.2 million in the prior year.

	For the Three Months Ended December 31,									For the year ended December 31,
(Dollars in thousands)	2021			2020			Change (%)			2021			2020			Change (%)
Wireless revenue
Paging revenue	$	18,513		$	19,513		(5.1	) %		$	75,845		$	79,916		(5.1	) %
Product and other revenue		690			787		(12.3	) %			2,981			3,677		(18.9	) %
Total wireless revenue	$	19,203		$	20,300		(5.4	) %		$	78,826		$	83,593		(5.7	) %
Software revenue
License	$	1,495		$	1,487		0.5	%		$	5,494		$	5,179		6.1	%
Professional services		3,783			4,777		(20.8	) %			17,161			17,910		(4.2	) %
Hardware		573			961		(40.4	) %			2,267			2,841		(20.2	) %
Subscription		155			42		269.0	%			423			66		540.9	%
Maintenance		9,335			9,913		(5.8	) %			37,982			38,591		(1.6	) %
Total software revenue		15,341			17,180		(10.7	) %			63,327			64,587		(2.0	) %
Total revenue	$	34,544		$	37,480		(7.8	) %		$	142,153		$	148,180		(4.1	) %

Operating expenses in the fourth quarter of 2021 totaled $55.4 million and included $15.7 million in noncash impairment charges for capitalized software development, and $1.1 million in additional payroll and related costs from less time on furlough for employees in 2021 compared to 2020. Operating expenses for the full year 2021 totaled $169.9 million and included $15.7 million in noncash impairment charges for capitalized software development, and $3.8 million in additional payroll and related costs from less time on furlough for employees in 2021 compared to 2020.

Adjusted operating expenses (which excludes depreciation, amortization and accretion, goodwill and capitalized software development impairment costs, and severance and restructuring costs, and includes capitalized software development costs) totaled $39.5 million in the fourth quarter of 2021. Adjusted operating expenses for the full year 2021 totaled $154.3 million.

	For the three months ended December 31,									For the year ended December 31,
(Dollars in thousands)	2021			2020			Change (%)			2021			2020			Change (%)
Operating expenses	$	55,355		$	61,930		10.6	%		$	169,871		$	170,845		0.6	%
Adjusted operating expenses	$	39,535		$	37,109		(6.5	) %		$	154,284		$	147,342		(4.7	) %

GAAP net loss for the fourth quarter of 2021 was $16.7 million, or a loss of $0.86 per diluted share, compared to net loss of $46.6 million, or $2.44 per diluted share, in the fourth quarter of 2020. GAAP net loss for the year ended December 31, 2021, was $22.2 million, or a loss of $1.14 per diluted share, compared to net loss of $44.2 million, or $2.32 per diluted share, in the prior year period.

For the fourth quarter of 2021, adjusted EBITDA loss totaled $3.8 million compared to adjusted EBITDA of $1.7 million in the fourth quarter of 2020. For the year ended December 31, 2021, adjusted EBITDA loss totaled $4.9 million, compared to adjusted EBITDA of $6.3 million in the prior year period. Based on the Company's fourth quarter assessment of its capitalized software development costs, the 2021 fourth quarter and full year net loss included a non-cash impairment charge of $15.7 million, which increased the 2021 fourth quarter and full year net loss per basic share by $0.81.

	For the three months ended December 31,											For the year ended December 31,
(Dollars in thousands)	2021				2020				Change (%)			2021				2020				Change (%)
Net loss	$	(16,669	)		$	(46,610	)		64.2	%		$	(22,180	)		$	(44,225	)		49.8	%
Basic and diluted net loss per common share	$	(0.86	)		$	(2.44	)		64.8	%		$	(1.14	)		$	(2.32	)		50.9	%
Adjusted EBITDA	$	(3,788	)		$	1,719			(320.4	) %		$	(4,892	)		$	6,346			(177.1	) %

Financial Outlook:

Regarding financial guidance, the Company expects the following for 2022:

(Unaudited and in millions)		Current Guidance Full Year 2022
		From			To
Revenue
Wireless		$	71.6		$	77.0
Software		$	54.4		$	62.2
Total Revenue		$	126.0		$	139.2
Adjusted Operating Expenses		$	118.8		$	128.6
Capital Expenditures		$	3.4		$	4.2

2021 Fourth Quarter Call:

A conference call will be held today, February 17, 2022, at 8:30 a.m. Eastern Time to discuss fourth quarter and full year 2021 results and Spok's new strategic business plan that was announced today.

Telephone Conference Dial-Ins:

	Participant / Guest (Toll-Free):				877-407-0890
	Participant / Guest (International):				201-389-0918

Webcast Links:

Live-Link (after the event the OnDemand version will be available under this URL as well):

https://www.webcast-eqs.com/spok02172022_en/en

About Spok

Spok, Inc., a wholly owned subsidiary of Spok Holdings, Inc. (NASDAQ: SPOK), headquartered in Alexandria, Virginia, is proud to be a global leader in healthcare communications. We deliver clinical information to care teams when and where it matters most to improve patient outcomes. Top hospitals rely on Spok Care Connect® platforms to enhance workflows for clinicians and support administrative compliance. Our customers send over 100 million messages each month through their Spok® solutions. When seconds count and patients' lives are at stake, Spok enables smarter, faster clinical communication. For more information, visit spok.com or follow @spoktweets on Twitter.

Spok is a trademark of Spok Holdings, Inc. Spok Go and Spok Care Connect are trademarks of Spok, Inc.

Non-GAAP Financial Measures

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

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

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

Safe Harbor Statement under the Private Securities Litigation Reform Act

Statements contained herein or in prior press releases which are not historical fact, such as statements regarding Spok’s future operating and financial performance, are forward-looking statements for purposes of the safe harbor provisions under the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve risks and uncertainties that may cause Spok’s actual results to be materially different from the future results expressed or implied by such forward-looking statements. Factors that could cause actual results to differ materially from those expectations include, but are not limited to, risks related to Spok's new strategic business plan, including its ability to maximize revenue and cash generation from its established businesses and return capital to shareholders, risks related to the COVID-19 pandemic and its effect on our business and the economy, other economic conditions such as recessionary economic cycles, higher interest rates, inflation and higher levels of unemployment, declining demand for paging products and services, continued demand for our software products and services, our dependence on the U.S. healthcare industry, our ability to develop additional software solutions for our customers and manage our development as a global organization, the ability to manage operating expenses, particularly third-party consulting services and research and development costs, future capital needs, competitive pricing pressures, competition from traditional paging services, other wireless communications services and other software providers, many of which are substantially larger and have much greater financial and human capital resources, changes in customer purchasing priorities or capital expenditures, government regulation of our products and services and the healthcare and health insurance industries, reliance upon third-party providers for certain equipment and services, unauthorized breaches or failures in cybersecurity measures adopted by us and/or included in our products and services, the effects of changes in accounting policies or practices, our ability to realize the benefits associated with our deferred tax assets, future impairments of our long-lived assets, amortizable intangible assets and goodwill, the effects of our limited-duration shareholder rights plan, and the outcome of Spok's strategic alternatives review, as well as other risks described from time to time in our periodic reports and other filings with the Securities and Exchange Commission. Although Spok believes the expectations reflected in the forward-looking statements are based on reasonable assumptions, it can give no assurance that its expectations will be attained. Spok disclaims any intent or obligation to update any forward-looking statements.

Tables to Follow

SPOK HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (a)
(Unaudited and in thousands except share, per share amounts and ARPU)
		For the three months ended								For the year ended
		12/31/2021				12/31/2020				12/31/2021				12/31/2020
Revenue:
Wireless		$	19,203			$	20,300			$	78,826			$	83,593
Software			15,341				17,180				63,327				64,587
Total revenue			34,544				37,480				142,153				148,180
Operating expenses:
Cost of revenue (exclusive of items shown separately below)(b)			8,278				8,631				32,574				31,355
Research and development			4,958				4,166				17,920				15,828
Technology operations			7,469				7,371				29,247				29,843
Selling and marketing			5,123				5,004				20,168				19,467
General and administrative(b)			11,170				9,248				43,853				40,289
Depreciation, amortization and accretion			2,694				2,503				10,446				9,056
Goodwill and capitalized software development impairment			15,663				25,007				15,663				25,007
Total operating expenses			55,355				61,930				169,871				170,845
% of total revenue			160.2	%			165.2	%			119.5	%			115.3	%
Operating loss			(20,811	)			(24,450	)			(27,718	)			(22,665	)
% of total revenue			(60.2	)%			(65.2	)%			(19.5	)%			(15.3	)%
Interest income			56				51				320				687
Other income			54				95				66				208
Loss before income taxes			(20,701	)			(24,304	)			(27,332	)			(21,770	)
Benefit from (provision for) income taxes			4,032				(22,306	)			5,152				(22,455	)
Net loss		$	(16,669	)		$	(46,610	)		$	(22,180	)		$	(44,225	)
Basic and diluted net loss per common share		$	(0.86	)		$	(2.44	)		$	(1.14	)		$	(2.32	)
Basic weighted average common shares outstanding			19,483,004				19,088,329				19,404,477				19,028,918
Cash dividends declared per common share			0.125				0.125				0.500				0.500
Key statistics:
Units in service			847				885				847				885
Average revenue per unit (ARPU)		$	7.26			$	7.30			$	7.30			$	7.30
Bookings		$	14,793			$	16,528			$	59,543			$	68,994
Backlog		$	43,361			$	50,504			$	43,361			$	50,504
(a) Slight variations in totals are due to rounding.
(b) The Company made reclassifications of $3.3 million and $2.8 million from General and administrative expense to the Cost of revenue expense category for the years ended December 31, 2021, and 2020, respectively.

SPOK HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (a)
(Unaudited and in thousands except share, per share amounts and ARPU)
		For the three months ended
		12/31/2021				9/30/2021				6/30/2021				3/31/2021				12/31/2020				9/30/2020				6/30/2020				3/31/2020
Revenue:
Wireless		$	19,203			$	19,644			$	19,859			$	20,120			$	20,300			$	20,828			$	21,078			$	21,386
Software			15,341				16,207				15,864				15,916				17,180				16,865				14,661				15,881
Total revenue			34,544				35,851				35,723				36,036				37,480				37,693				35,739				37,267
Operating expenses:
Cost of revenue (exclusive of items shown separately below) (b)			8,278				8,312				7,876				8,108				8,631				7,347				6,492				8,884
Research and development			4,958				4,178				4,278				4,506				4,166				3,459				2,754				5,449
Technology operations			7,469				7,439				7,087				7,252				7,371				7,357				7,212				7,904
Selling and marketing			5,123				5,165				4,980				4,900				5,004				4,272				3,831				6,361
General and administrative (b)			11,170				11,746				10,654				10,283				9,248				10,191				10,219				10,631
Depreciation, amortization and accretion			2,694				2,568				2,457				2,727				2,503				2,335				2,072				2,146
Goodwill and capitalized software development impairment			15,663				—				—				—				25,007				—				—				—
Total operating expenses			55,355				39,408				37,332				37,776				61,930				34,961				32,580				41,375
% of total revenue			160.2	%			109.9	%			104.5	%			104.8	%			165.2	%			92.8	%			91.2	%			111.0	%
Operating (loss) income			(20,811	)			(3,557	)			(1,609	)			(1,740	)			(24,450	)			2,732				3,159				(4,108	)
% of total revenue			(60.2	)%			(9.9	)%			(4.5	)%			(4.8	)%			(65.2	)%			7.2	%			8.8	%			(11.0	)%
Interest income			56				141				61				61				51				127				146				363
Other income (expense)			54				10				29				(27	)			95				151				101				(137	)
(Loss) income before income taxes			(20,701	)			(3,406	)			(1,519	)			(1,706	)			(24,304	)			3,010				3,406				(3,882	)
Benefit from (provision for) income taxes			4,032				912				800				(591	)			(22,306	)			155				353				(657	)
Net (loss) income		$	(16,669	)		$	(2,494	)		$	(719	)		$	(2,297	)		$	(46,610	)		$	3,165			$	3,759			$	(4,539	)
Basic net (loss) income per common share		$	(0.86	)		$	(0.13	)		$	(0.04	)		$	(0.12	)		$	(2.44	)		$	0.17			$	0.20			$	(0.24	)
Diluted net (loss) income per common share			(0.86	)			(0.13	)			(0.04	)			(0.12	)			(2.44	)			0.16				0.20				(0.24	)
Basic weighted average common shares outstanding			19,483,004				19,464,893				19,395,364				19,272,786				19,088,329				19,051,502				19,016,853				18,958,716
Diluted weighted average common shares outstanding			19,483,004				19,464,893				19,395,364				19,272,786				19,088,329				19,208,452				19,115,148				18,958,716
Key statistics:
Units in service			847				853				869				874				885				898				915				926
Average revenue per unit (ARPU)		$	7.26			$	7.29			$	7.32			$	7.34			$	7.30			$	7.34			$	7.24			$	7.31
Bookings		$	14,793			$	17,116			$	13,037			$	14,597			$	16,528			$	21,414			$	15,411			$	15,639
Backlog		$	43,361			$	45,584			$	45,632			$	48,849			$	50,504			$	51,708			$	48,441			$	49,052
(a) Slight variations in totals are due to rounding.
(b) The Company made reclassifications from General and administrative expense to the Cost of revenue expense category of $0.8 million for the first and second quarters of 2021, $0.9 million for the third and fourth quarters of 2021, $0.6 million for the first and second quarters of 2020, and $0.8 million for the third and fourth quarters of 2020.

SPOK HOLDINGS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (a)
(In thousands)
		12/31/2021				12/31/2020
ASSETS		(Unaudited)
Current assets:
Cash and cash equivalents		$	44,583			$	48,729
Short-term investments			14,999				29,995
Accounts receivable, net			26,908				29,934
Prepaid expenses			6,641				8,958
Other current assets			922				1,269
Total current assets			94,053				118,885
Non-current assets:
Property and equipment, net			6,746				7,815
Operating lease right-of-use assets			15,821				14,016
Capitalized software development, net			—				10,179
Goodwill			99,175				99,175
Intangible assets, net			—				417
Deferred income tax assets, net			31,653				25,826
Other non-current assets			706				978
Total non-current assets			154,101				158,406
Total assets		$	248,154			$	277,291
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable		$	5,292			$	6,685
Accrued compensation and benefits			13,948				14,103
Deferred revenue			25,608				27,686
Operating lease liabilities			5,405				5,264
Other current liabilities			4,745				3,702
Total current liabilities			54,998				57,440
Non-current liabilities:
Asset retirement obligations			6,355				7,289
Operating lease liabilities			11,883				9,456
Other non-current liabilities			1,227				2,493
Total non-current liabilities			19,465				19,238
Total liabilities			74,463				76,678
Commitments and contingencies
Stockholders' equity:
Preferred stock		$	—			$	—
Common stock			2				2
Additional paid-in capital			97,291				91,780
Accumulated other comprehensive loss			(1,588	)			(1,452	)
Retained earnings			77,986				110,283
Total stockholders' equity			173,691				200,613
Total liabilities and stockholders' equity		$	248,154			$	277,291
(a) Slight variations in totals are due to rounding.

SPOK HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (a)
(Unaudited and in thousands)
	For the year ended
	12/31/2021				12/31/2020
Operating activities:
Net loss	$	(22,180	)		$	(44,225	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation, amortization and accretion		10,446				9,056
Goodwill and capitalized software development impairment		15,663				25,007
Valuation allowance		—				22,108
Deferred income tax (benefit) expense		(5,483	)			438
Stock-based compensation		7,239				5,508
Provisions for credit losses, service credits and other		1,162				1,212
Changes in assets and liabilities:
Accounts receivable		1,833				(1,588	)
Prepaid expenses and other assets		2,594				1,445
Net operating lease liabilities		763				10
Accounts payable, accrued liabilities and other		(679	)			4,017
Deferred revenue		(3,390	)			3,175
Net cash provided by operating activities		7,968				26,163
Investing activities:
Purchases of property and equipment		(4,393	)			(3,455	)
Capitalized software development		(10,842	)			(11,252	)
Purchase of short-term investments		(44,990	)			(59,864	)
Maturity of short-term investments		60,000				60,000
Net cash used in investing activities		(225	)			(14,571	)
Financing activities:
Cash distributions to stockholders		(10,025	)			(9,771	)
Proceeds from issuance of common stock under the Employee Stock Purchase Plan		132				301
Purchase of common stock for tax withholding on vested equity awards		(1,860	)			(903	)
Net cash used in financing activities		(11,753	)			(10,373	)
Effect of exchange rate on cash and cash equivalents		(136	)			149
Net (decrease) increase in cash and cash equivalents		(4,146	)			1,368
Cash and cash equivalents, beginning of period		48,729				47,361
Cash and cash equivalents, end of period	$	44,583			$	48,729
Supplemental disclosure:
Income taxes (refunds received) paid	$	(126	)		$	1
(a) Slight variations in totals are due to rounding.

SPOK HOLDINGS, INC.
CONSOLIDATED REVENUE
SUPPLEMENTAL INFORMATION (a)
(Unaudited and in thousands)
		For the three months ended
		12/31/2021			9/30/2021			6/30/2021			3/31/2021			12/31/2020			9/30/2020			6/30/2020			3/31/2020
Revenue
Paging		$	18,513		$	18,844		$	19,135		$	19,353		$	19,513		$	19,961		$	19,990		$	20,451
Non-paging		$	690		$	800		$	724		$	767		$	787		$	867		$	1,088		$	935
Total wireless revenue		$	19,203		$	19,644		$	19,859		$	20,120		$	20,300		$	20,828		$	21,078		$	21,386
License		$	1,495		$	1,674		$	818		$	1,507		$	1,486		$	1,988		$	749		$	955
Services		$	3,783		$	4,159		$	4,865		$	4,354		$	4,778		$	4,772		$	3,812		$	4,549
Equipment		$	573		$	596		$	482		$	616		$	961		$	554		$	601		$	725
Subscription		$	155		$	133		$	90		$	45		$	42		$	24		$	—		$	—
Operations revenue		$	6,006		$	6,562		$	6,255		$	6,522		$	7,267		$	7,338		$	5,162		$	6,229
Maintenance revenue		$	9,335		$	9,645		$	9,609		$	9,394		$	9,913		$	9,527		$	9,499		$	9,652
Total software revenue		$	15,341		$	16,207		$	15,864		$	15,916		$	17,180		$	16,865		$	14,661		$	15,881
Total revenue		$	34,544		$	35,851		$	35,723		$	36,036		$	37,480		$	37,693		$	35,739		$	37,267
(a) Slight variations in totals are due to rounding.

SPOK HOLDINGS, INC.
CONSOLIDATED OPERATING EXPENSES
SUPPLEMENTAL INFORMATION (a)
(Unaudited and in thousands)
		For the three months ended
		12/31/2021				9/30/2021				6/30/2021				3/31/2021				12/31/2020				9/30/2020				6/30/2020				3/31/2020
Cost of revenue(b)
Payroll and related		$	5,500			$	5,435			$	4,920			$	5,369			$	5,447			$	4,941			$	4,350			$	5,785
Cost of sales(b)			2,227				2,206				2,330				2,118				2,538				1,867				1,689				2,560
Stock-based compensation			150				250				285				322				136				148				134				119
Other			401				421				341				299				510				391				319				420
Total cost of revenue(b)			8,278				8,312				7,876				8,108				8,631				7,347				6,492				8,884
Research and development
Payroll and related			4,329				4,291				4,333				4,475				4,358				4,147				4,115				4,761
Outside services			1,760				1,759				2,060				2,277				2,358				2,113				1,803				1,584
Capitalized software development			(2,603	)			(2,621	)			(2,698	)			(2,920	)			(3,046	)			(2,906	)			(3,596	)			(1,705	)
Stock-based compensation			234				435				305				475				246				240				243				236
Other			1,238				314				278				199				250				(135	)			189				573
Total research and development			4,958				4,178				4,278				4,506				4,166				3,459				2,754				5,449
Technology operations
Payroll and related			2,584				2,585				2,323				2,467				2,467				2,246				2,213				2,712
Site rent			3,104				3,122				3,143				3,196				3,313				3,467				3,399				3,398
Telecommunications			826				828				825				837				857				949				961				1,001
Stock-based compensation			53				139				131				137				48				52				47				43
Other			902				765				665				615				686				643				592				750
Total technology operations			7,469				7,439				7,087				7,252				7,371				7,357				7,212				7,904
Selling and marketing
Payroll and related			3,151				3,365				3,161				3,135				2,912				2,773				2,538				3,583
Commissions			1,153				924				1,244				1,105				1,178				1,059				852				1,212
Stock-based compensation			91				234				254				319				192				208				194				172
Advertising and events			630				527				247				161				539				151				160				784
Other			98				115				74				180				183				81				87				610
Total selling and marketing			5,123				5,165				4,980				4,900				5,004				4,272				3,831				6,361
General and administrative(b)
Payroll and related			4,040				3,911				3,564				3,818				3,373				3,476				3,355				4,134
Stock-based compensation			675				958				806				986				726				968				744				612
Facility rent, office, and technology costs			2,579				2,692				2,484				2,480				2,412				2,260				2,276				2,068
Outside services			2,392				3,078				2,219				1,825				1,584				2,148				2,043				2,036
Taxes, licenses and permits(b)			408				211				214				214				(314	)			190				213				239
Bad debt			255				(29	)			328				106				202				178				628				43
Other			821				925				1,039				854				1,265				971				960				1,499
Total general and administrative(b)			11,170				11,746				10,654				10,283				9,248				10,191				10,219				10,631
Depreciation, amortization and accretion			2,694				2,568				2,457				2,727				2,503				2,335				2,072				2,146
Goodwill and capitalized software development impairment			15,663				—				—				—				25,007				—				—				—
Operating expenses		$	55,355			$	39,408			$	37,332			$	37,776			$	61,930			$	34,961			$	32,580			$	41,375
Capital expenditures		$	1,295			$	905			$	1,480			$	727			$	638			$	934			$	846			$	1,063
(a) Slight variations in totals are due to rounding.
(b) The Company made reclassifications from General and administrative expense to the Cost of revenue expense category of $0.8 million for the first and second quarters of 2021, $0.9 million for the third and fourth quarters of 2021, $0.6 million for the first and second quarters of 2020, and, $0.8 million for the third and fourth quarters of 2020.

SPOK HOLDINGS, INC.
UNITS IN SERVICE ACTIVITY, MARKET SEGMENT, CHURN
AND AVERAGE REVENUE PER UNIT (ARPU) (a)
(Unaudited and in thousands)
		For the three months ended
		12/31/2021				9/30/2021				6/30/2021				3/31/2021				12/31/2020				9/30/2020				6/30/2020				3/31/2020
Paging units in service
Beginning units in service (000's)			853				869				874				885				898				915				926				938
Gross placements			19				23				31				20				20				25				35				24
Gross disconnects			(25	)			(39	)			(36	)			(31	)			(33	)			(42	)			(46	)			(36	)
Net change			(6	)			(16	)			(5	)			(11	)			(13	)			(17	)			(11	)			(12	)
Ending units in service			847				853				869				874				885				898				915				926
End of period units in service % of total (b)
Healthcare			84.7	%			84.6	%			84.5	%			84.1	%			83.6	%			83.7	%			83.6	%			82.6	%
Government			4.8	%			4.8	%			4.9	%			4.8	%			5.3	%			5.3	%			5.5	%			5.4	%
Large enterprise			3.9	%			4.1	%			4.1	%			4.3	%			4.3	%			4.3	%			4.4	%			5.5	%
Other(b)			6.6	%			6.4	%			6.4	%			6.8	%			6.8	%			6.6	%			6.6	%			6.5	%
Total			100.0	%			100.0	%			100.0	%			100.0	%			100.0	%			100.0	%			100.0	%			100.0	%
Account size ending units in service (000's)
1 to 100 units			55				57				58				59				61				63				65				67
101 to 1,000 units			154				154				155				163				167				167				165				171
>1,000 units			638				642				656				652				657				668				685				688
Total			847				853				869				874				885				898				915				926
Account size net loss rate(c)
1 to 100 units			(3.5	) %			(1.7	) %			(1.7	) %			(3.3	) %			(3.2	) %			(2.9	) %			(3.1	) %			(3.0	) %
101 to 1,000 units			—	%			(0.6	) %			(4.9	) %			(2.4	) %			—	%			1.5	%			(4.2	) %			(1.0	) %
>1,000 units			(0.6	) %			(2.1	) %			0.6	%			(0.8	) %			(1.6	) %			(2.5	) %			(0.4	) %			(1.2	) %
Total			(0.7	) %			(1.8	) %			(0.6	) %			(1.2	) %			(1.4	) %			(1.9	) %			(1.3	) %			(1.3	) %
Account size ARPU
1 to 100 units		$	11.58			$	11.67			$	11.69			$	11.72			$	11.62			$	11.80			$	11.65			$	12.01
101 to 1,000 units			8.30				8.38				8.35				8.33				8.35				8.37				8.24				8.34
>1,000 units			6.63				6.65				6.68				6.68				6.62				6.67				6.57				6.59
Total		$	7.26			$	7.29			$	7.32			$	7.34			$	7.30			$	7.34			$	7.24			$	7.31
(a) Slight variations in totals are due to rounding.
(b) Other includes hospitality, resort and indirect units
(c) Net loss rate is net current period placements and disconnected units in service divided by prior period ending units in service.

SPOK HOLDINGS, INC.
RECONCILIATION OF NET LOSS TO EBITDA (a)
(Unaudited and in thousands)
		For the three months ended								For the year ended
		12/31/2021				12/31/2020				12/31/2021				12/31/2020
Net loss		$	(16,669	)		$	(46,610	)		$	(22,180	)		$	(44,225	)
Add back:
(Benefit from) provision for income taxes			(4,032	)			22,306				(5,152	)			22,455
Other income			(54	)			(95	)			(66	)			(208	)
Interest income			(56	)			(51	)			(320	)			(687	)
Operating loss			(20,811	)			(24,450	)			(27,718	)			(22,665	)
Depreciation, amortization and accretion			2,694				2,503				10,446				9,056
EBITDA		$	(18,117	)		$	(21,947	)		$	(17,272	)		$	(13,609	)
Capitalized software development costs			(2,603	)			(3,046	)			(10,842	)			(11,252	)
Stock-based compensation			1,203				1,348				7,239				5,508
Goodwill and capitalized software development impairment			15,663				25,007				15,663				25,007
Severance and restructuring			66				357				320				692
Adjusted EBITDA		$	(3,788	)		$	1,719			$	(4,892	)		$	6,346
(a) Slight variations in totals are due to rounding.

RECONCILIATION OF OPERATING EXPENSES TO ADJUSTED OPERATING EXPENSES (a)
(Unaudited and in thousands)
		For the three months ended								For the year ended
		12/31/2021				12/31/2020				12/31/2021				12/31/2020
Operating expenses		$	55,355			$	61,930			$	169,871			$	170,845
Add back:
Depreciation, amortization and accretion			(2,694	)			(2,503	)			(10,446	)			(9,056	)
Goodwill and capitalized software development impairment			(15,663	)			(25,007	)			(15,663	)			(25,007	)
Capitalized software development costs			2,603				3,046				10,842				11,252
Severance and restructuring			(66	)			(357	)			(320	)			(692	)
Adjusted operating expenses		$	39,535			$	37,109			$	154,284			$	147,342
(a) Slight variations in totals are due to rounding.

SPOK HOLDINGS, INC.
2022 FINANCIAL OUTLOOK
(Unaudited and in millions)
		Guidance Range
		From				To
Revenues
Wireless		$	71.6			$	77.0
Software			54.4				62.2
Total Revenues		$	126.0			$	139.2
Adjusted Operating Expenses (a)		$	118.8			$	128.6
Capital Expenditures		$	3.4			$	4.2
RECONCILIATION OF OPERATING EXPENSES TO ADJUSTED OPERATING EXPENSES (a)
(Unaudited and in millions)
		Guidance Range
		From				To
Operating expenses		$	128.7			$	142.3
Add back:
Depreciation, amortization and accretion			(3.5	)			(3.5	)
Severance and restructuring costs		$	(6.4	)		$	(10.2	)
Adjusted operating expenses		$	118.8			$	128.6
(a) Adjusted operating expenses exclude depreciation, amortization and accretion, goodwill and capitalized software development impairment costs, and severance and restructuring costs, and includes capitalized software development costs.

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20220217005198/en/

Lisa Fortuna or Mike Cummings

312-445-2866

spok@alpha-ir.com

Source: Spok Holdings, Inc.

FAQ

What is the new dividend amount declared by Spok Holdings (SPOK)?

Spok Holdings declared a quarterly dividend of $0.3125 per share, an increase of 150%.

What were Spok Holdings' total revenues for the year ended December 31, 2021?

Spok Holdings reported total revenues of $142.2 million for the year ended December 31, 2021.

What was the GAAP net loss for Spok Holdings in Q4 2021?

The GAAP net loss for Spok Holdings in Q4 2021 was $16.7 million.

What financial guidance did Spok Holdings provide for 2022?

Spok Holdings expects total revenue in 2022 to range from $126 million to $139.2 million.

How did Spok's operating expenses change in 2021 compared to 2020?

Spok's operating expenses for 2021 were $169.9 million, a slight decrease from $170.8 million in 2020.