Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2019 | Apr. 19, 2019 | |
Document Document And Entity Information [Abstract] | ||
Entity Registrant Name | Spok Holdings, Inc | |
Entity Central Index Key | 0001289945 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding (shares) | 19,212,090 | |
Entity Small Business | false | |
Entity Emerging Growth Company | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 62,927 | $ 83,343 |
Short-term investments | 18,868 | 3,963 |
Accounts receivable, net | 36,721 | 32,386 |
Prepaid expenses and other | 8,666 | 9,578 |
Inventory | 1,436 | 1,708 |
Total current assets | 128,618 | 130,978 |
Non-current assets: | ||
Property and equipment, net | 9,823 | 10,354 |
Operating lease right-of-use assets | 16,965 | 0 |
Goodwill | 133,031 | 133,031 |
Intangible assets, net | 4,792 | 5,417 |
Deferred income tax assets | 45,967 | 46,484 |
Other non-current assets | 1,406 | 1,448 |
Total non-current assets | 211,984 | 196,734 |
Total assets | 340,602 | 327,712 |
Current liabilities: | ||
Accounts payable | 3,358 | 2,010 |
Accrued compensation and benefits | 9,158 | 11,348 |
Accrued taxes | 1,812 | 1,822 |
Deferred revenue | 28,091 | 26,106 |
Operating lease liabilities | 5,286 | 0 |
Other current liabilities | 2,845 | 3,662 |
Total current liabilities | 50,550 | 44,948 |
Non-current liabilities: | ||
Asset retirement obligations | 6,615 | 6,513 |
Deferred revenue | 470 | 476 |
Operating lease liabilities | 12,204 | 0 |
Other non-current liabilities | 229 | 1,221 |
Total non-current liabilities | 19,518 | 8,210 |
Total liabilities | 70,068 | 53,158 |
Commitments and contingencies (Note 12) | ||
Stockholders' equity: | ||
Preferred stock | 0 | 0 |
Common stock | 2 | 2 |
Additional paid-in capital | 88,266 | 90,559 |
Accumulated other comprehensive loss | (1,361) | (1,301) |
Retained earnings | 183,627 | 185,294 |
Total stockholders’ equity | 270,534 | 274,554 |
Total liabilities and stockholders' equity | $ 340,602 | $ 327,712 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Revenue: | ||
Total revenue | $ 41,764 | $ 43,114 |
Operating expenses: | ||
Cost of revenue | 7,592 | 7,878 |
Research and development | 6,167 | 5,735 |
Technology operations | 7,674 | 7,750 |
Selling and marketing | 6,110 | 6,490 |
General and administrative | 10,747 | 11,964 |
Depreciation, amortization and accretion | 2,359 | 2,713 |
Total operating expenses | 40,649 | 42,530 |
Operating income | 1,115 | 584 |
Interest income | 449 | 283 |
Other expense | (236) | (47) |
Income before income taxes | 1,328 | 820 |
Income tax expense | (586) | (475) |
Net income | $ 742 | $ 345 |
Basic and diluted net income per common share (usd per share) | $ 0.04 | $ 0.02 |
Basic weighted average common shares outstanding (shares) | 19,196,970 | 20,027,800 |
Diluted weighted average common shares outstanding (shares) | 19,356,712 | 20,153,291 |
Cash dividends declared per common share (usd per share) | $ 0.125 | $ 0.125 |
Wireless | ||
Revenue: | ||
Total revenue | $ 22,610 | $ 24,269 |
Software | ||
Revenue: | ||
Total revenue | $ 19,154 | $ 18,845 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 742 | $ 345 |
Other comprehensive loss, net of tax: | ||
Foreign currency translation adjustments | (60) | (256) |
Other comprehensive loss | (60) | (256) |
Comprehensive income | $ 682 | $ 89 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-In Capital & Accumulated Other Comprehensive Loss | Retained Earnings |
Beginning balance (shares) at Dec. 31, 2017 | 20,135,514 | |||
Beginning balance at Dec. 31, 2017 | $ 290,529 | $ 2 | $ 98,731 | $ 191,796 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Net income | 345 | 345 | ||
Purchase of common stock for tax withholding (shares) | (56,269) | |||
Purchase of common stock for tax withholding | (892) | (892) | ||
Amortization of stock-based compensation | 1,234 | 1,234 | ||
Cash dividends declared | (2,589) | (2,589) | ||
Common stock repurchase program including commissions (shares) | (127,792) | |||
Common stock repurchase program including commissions | (1,927) | (1,927) | ||
Issuance of restricted stock under the Equity Plan and other (shares) | 4,812 | |||
Cumulative translation adjustment | (256) | (256) | ||
Ending balance (shares) at Mar. 31, 2018 | 19,956,265 | |||
Ending balance at Mar. 31, 2018 | 291,088 | $ 2 | 96,890 | 194,196 |
Beginning balance (shares) at Dec. 31, 2018 | 19,389,066 | |||
Beginning balance at Dec. 31, 2018 | 274,554 | $ 2 | 89,258 | 185,294 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Net income | 742 | 742 | ||
Purchase of common stock for tax withholding (shares) | (67,648) | |||
Purchase of common stock for tax withholding | (1,011) | (1,011) | ||
Amortization of stock-based compensation | 528 | 528 | ||
Cash dividends declared | (2,479) | (2,479) | ||
Common stock repurchase program including commissions (shares) | (131,012) | |||
Common stock repurchase program including commissions | (1,810) | (1,810) | ||
Issuance of restricted stock under the Equity Plan and other (shares) | 13,650 | |||
Issuance of restricted stock under the Equity Plan and other | 70 | 70 | ||
Cumulative translation adjustment | (60) | (60) | ||
Ending balance (shares) at Mar. 31, 2019 | 19,204,056 | |||
Ending balance at Mar. 31, 2019 | $ 270,534 | $ 2 | $ 86,905 | $ 183,627 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Cash flows provided by operating activities: | ||
Net income | $ 742 | $ 345 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation, amortization and accretion | 2,359 | 2,713 |
Deferred income tax expense | 517 | 475 |
Stock-based compensation | 528 | 1,234 |
Provision for doubtful accounts, service credits and other | 374 | 628 |
Adjustment of non-cash transaction taxes | 0 | (53) |
Changes in assets and liabilities: | ||
Accounts receivable | (4,791) | (4,106) |
Prepaid expenses, inventory, and other assets | (15,515) | (1,215) |
Accounts payable, accrued liabilities and other | 15,206 | (2,182) |
Deferred revenue | 1,803 | 3,106 |
Net cash provided by operating activities | 1,223 | 945 |
Cash flows used in investing activities: | ||
Purchase of property and equipment | (1,287) | (1,164) |
Purchase of short-term investments | (14,824) | 0 |
Net cash used in investing activities | (16,111) | (1,164) |
Cash flows used in financing activities: | ||
Cash distributions to stockholders | (2,647) | (2,740) |
Purchase of common stock (including commissions) | (1,810) | (1,927) |
Purchase of common stock for tax withholding on vested equity awards | (1,011) | (892) |
Net cash used in financing activities | (5,468) | (5,559) |
Effect of exchange rate on cash | (60) | (256) |
Net decrease in cash and cash equivalents | (20,416) | (6,034) |
Cash and cash equivalents, beginning of period | 83,343 | 103,179 |
Cash and cash equivalents, end of period | 62,927 | 97,145 |
Supplemental disclosure: | ||
Income taxes paid | $ 80 | $ 50 |
Organization and Significant Ac
Organization and Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Significant Accounting Policies | ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES Spok Holdings, Inc. (NASDAQ: SPOK) ("Spok," "we," "our" or the "Company") through its wholly-owned subsidiary Spok, Inc., is the 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 the Spok Care Connect platform to enhance workflows for clinicians, support administrative compliance, and provide a better experience for patients. Our customers send over 100 million messages each month through their Spok solutions. We offer a focused suite of unified clinical communications and collaboration solutions that include call center operations, clinical alerting and notifications, one-way and advanced two-way wireless messaging services, mobile communications and public safety solutions. We provide one-way and advanced two-way wireless messaging services including information services throughout the United States. These services are offered on a local, regional and nationwide basis employing digital networks. One-way messaging consists of numeric and alphanumeric messaging services. Numeric messaging services enable subscribers to receive messages that are composed entirely of numbers, such as a phone number, while alphanumeric messages may include numbers and letters, which enable subscribers to receive text messages. Two-way messaging services enable subscribers to send and receive messages to and from other wireless messaging devices, including pagers, mobile devices and personal computers. We also offer voice mail, personalized greeting, message storage and retrieval, and equipment loss and/or maintenance protection to both one-way and two-way messaging subscribers. These services are commonly referred to as wireless messaging and information services. We also develop, sell and support enterprise-wide systems for hospitals and other organizations needing to automate, centralize and standardize clinical communications and collaboration. These solutions are used for contact centers, clinical alerting and notification, mobile communications and messaging and for public safety notifications. These areas of market focus complement the market focus of our wireless services outlined above. These products and services are commonly referred to as software solutions and services. Basis of Presentation The accompanying Condensed Consolidated Financial Statements include our accounts and the accounts of our wholly-owned direct and indirect subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. Our Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and the rules and regulations of the United States Securities and Exchange Commission (the “SEC”). In management's opinion, the unaudited Condensed Consolidated Financial Statements include all adjustments and accruals that are necessary for the presentation of the results of all interim periods reported herein and all such adjustments are of a normal, recurring nature. As a result of the adoption of Accounting Standards Codification (“ASC”) 842, Leases , and our application of the modified retrospective approach using a cumulative-effect adjustment to our opening balance of retained earnings as of January 1, 2019, prior period amounts have not been restated under ASC 842. For additional details refer to Note 4 , "Significant Accounting Policies Update" and Note 6 , "Leases". Amounts shown on the Condensed Consolidated Statement of Operations within the operating expense categories of Cost of revenue; Research and development; Technology operations; Selling and marketing; and General and administrative are recorded exclusive of depreciation, amortization and accretion. The financial information included herein, other than the Condensed Consolidated Balance Sheet as of December 31, 2018 , is unaudited. The Condensed Consolidated Balance Sheet at December 31, 2018 has been derived from, but does not include all, the disclosures contained in the audited Consolidated Financial Statements as of and for the year ended December 31, 2018 . These Condensed Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and accompanying notes included in the Company's Annual Report on Form 10-K for the year ended December 31, 2018 (the “ 2018 Annual Report”). The Condensed Consolidated Statement of Operations for the interim periods presented are not necessarily indicative of the results that may be expected for a full year. Certain prior period amounts in the Condensed Consolidated Financial Statements have been reclassified to conform to the current period's presentation. For additional information refer to the 2018 Annual Report. Use of Estimates The preparation of these Condensed Consolidated Financial Statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues, expenses and related disclosures. On an on-going basis, we evaluate estimates and assumptions, including, but not limited to, those related to the impairment of long-lived assets; intangible assets subject to amortization and goodwill; accounts receivable allowances; revenue recognition; determining standalone selling price ("SSP") of performance obligations; variable consideration; depreciation expense; asset retirement obligations; and income taxes. We base our estimates on historical experience and various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. |
Risks and Other Important Facto
Risks and Other Important Factors | 3 Months Ended |
Mar. 31, 2019 | |
Risks and Uncertainties [Abstract] | |
Risks and Other Important Factors | RISKS AND OTHER IMPORTANT FACTORS See “Item 1A. Risk Factors” of Part II of this Quarterly Report on Form 10-Q (“Quarterly Report”) and "Item 1A. Risk Factors" of Part I of the 2018 Annual Report, which describe key risks associated with our operations and industry. |
Recent Accounting Standards
Recent Accounting Standards | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Changes and Error Corrections [Abstract] | |
Recent Accounting Standards | RECENT ACCOUNTING STANDARDS Recently Adopted Leases - In February 2016, the FASB issued ASU No. 2016-02, Leases . The new standard establishes a right of use (“ROU”) model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than twelve months. Leases will be classified as either financing or operating with the classification affecting the pattern of expense recognition in the Condensed Consolidated Statement of Operations. On January 1, 2019, we adopted ASC 842 using the modified retrospective approach that resulted in a material adjustment to our balance sheet as of January 1, 2019. As a result, the impact was an increase to assets and liabilities of approximately $17.4 million . Results for reporting periods beginning after January 1, 2019 are presented under ASC 842, while prior period amounts are not adjusted and continue to be reported in accordance with our historic accounting under ASC 840. In adoption of ASC 842 we elected to use the package of available practical expedients with the exception of hindsight. For additional details refer to Note 4 , "Significant Accounting Policies Update" and Note 6 , "Leases." |
Significant Accounting Policies
Significant Accounting Policies Update | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies Update | SIGNIFICANT ACCOUNTING POLICIES UPDATE Our significant accounting policies are detailed in Note 1 “Organization and Significant Accounting Policies” of the 2018 Annual Report. Significant changes to our accounting policies as a result of adopting ASC 842 are discussed below: Leases - Adoption of ASC 842 “Leases” Operating lease ROU assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. We have made an accounting policy election not to apply the recognition requirements of ASC 842 to short-term leases. Those leases which have a term of less than 12 months will have lease payments recognized, in our Condensed Consolidated Statement of Operations, on a straight-line basis over the lease term. An optional renewal or termination is not recognized as part of the lease term unless we determine that it is reasonably certain that we will exercise that option. The term reasonably certain is a high threshold for which pervasive evidence generally does not exist, and therefore, optional renewal periods are generally excluded from our ROU assets and lease liabilities until they have been exercised. Lease expense is recognized on a straight-line basis over the lease term. As most of our leases do not provide an implicit rate, we use an estimated incremental borrowing rate in determining the present value of lease payments. The Company uses a portfolio approach when determining the discount rate to be applied to its leases. Significant judgment is necessary when determining a discount rate because we must estimate the discount rate based on a number of factors and observable inputs including current market conditions, market yields, government bonds or currency LIBOR rates, credit risk, and other factors as necessary. The Company must also exercise significant judgment when determining whether an option to renew or terminate a lease should be included in the lease term. This judgment includes an assessment of all relevant economic factors such as costs relating to the termination or extension of a lease, importance of the underlying asset to the Company’s operations, and the terms and conditions of the optional periods in relation to current market rates. Where we have lease agreements which contain lease and non-lease components, we have elected to make use of the practical expedient to account for each separate lease component and associated non-lease component as a single lease component. |
Revenue, Deferred Revenue And P
Revenue, Deferred Revenue And Prepaid Commissions | 3 Months Ended |
Mar. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Revenue, Deferred Revenue and Prepaid Commissions | REVENUE, DEFERRED REVENUE AND PREPAID COMMISSIONS Wireless Revenue Wireless revenue consists of two primary components: Paging revenue and product and other revenue. Paging revenue consists primarily of recurring fees associated with the provision of messaging services and fees for paging devices and is net of a provision for service credits. Product and other revenue reflects system sales, the sale of devices and charges for paging devices that are not returned and are net of anticipated credits. Our core offering includes subscriptions to one-way or two-way messaging services for a periodic (monthly, quarterly, semiannual, or annual) service fee. This is generally based upon the type of service provided, the geographic area covered, the number of devices provided to the customer and the period of commitment. A subscriber to one-way messaging services may select coverage on a local, regional or nationwide basis to best meet their messaging needs. Two-way messaging is generally offered on a nationwide basis. In addition, subscribers either contract for a messaging device from us or they own a device, having purchased it either from us or from another vendor. We also sell devices to resellers who lease or resell devices to their subscribers and then sell messaging services utilizing our networks. We offer ancillary services, such as voicemail and equipment loss or maintenance protection, which help increase the monthly recurring revenue we receive along with these traditional messaging services. We also offer encryption for one-way and two-way alphanumeric pagerswhich utilize AES-128 bit encryption, screen locking and remote wipe capabilities. With encryption enabled these pagers can add Health Insurance Portability and Accountability Act ("HIPAA") security capabilities to the low cost, highly reliable and availability benefits of paging. (See Item 1. “Business,” in the 2018 Annual Report for more details.) Software Revenue Software revenue consists of two primary components: operations revenue and maintenance revenue. Operations revenue consists primarily of license revenues for our healthcare communications solutions, equipment revenues that facilitate the use of our software solutions, and professional services revenue related to the implementation of our solutions. Maintenance revenue is for ongoing support of our software solutions or related equipment (typically for one year). Revenue Recognition Revenues are recognized when control of the promised goods or services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. Our software licenses and hardware are generally recognized at a point in time when we have transferred control to the customer. For software licenses, revenue is not recognized until the related license(s) has been made available to the customer and the customer can begin to benefit from its right to use the license(s). Our software licenses represent a right to use Spok’s IP as it exists at a point in time at which the license is granted. Many of our software licenses have significant standalone functionality due to their ability to process a transaction or perform a function or task, and we do not need to maintain those products, once provided to the customer, for value to exist. While the functionality of IP that we license may substantively change during the license period, customers are not contractually or practically required to update their license as a result of those changes. Our wireless, professional and maintenance services are generally recognized over time due to a customer's simultaneous receipt and consumption of the benefit as we perform the work. As we transfer control over time, we recognize revenue based on the extent of progress towards completion of the performance obligation. The selection of the method to measure progress towards completion requires significant judgment and is based on the nature of the products or services to be provided. Generally, we use the time-elapsed measure of progress for performance obligations which include wireless or maintenance services. We believe this method best depicts the simultaneous transfer and consumption of the benefit based on our performance as these services are generally considered standby services. For professional services, we leverage an input methodology based on the number of hours worked on a project versus the total expected hours necessary to complete the project. Revenues are recognized proportionally as hours are incurred. The following table presents our revenues disaggregated by revenue type: For the Three months ended March 31, 2019 (Dollars in thousands) 2019 2018 Wireless products and services $ 22,610 $ 24,269 License 2,840 4,376 Services 5,206 4,071 Hardware 963 1,024 Maintenance 10,145 9,374 Total revenue $ 41,764 $ 43,114 The U.S. was the only country that accounted for more than 10% of the Company’s total revenue for the three months ended March 31, 2019 and 2018 . Revenue by geographic region consisted of the following for the periods stated: For the Three months ended March 31, 2019 (Dollars in thousands) 2019 2018 Revenue United States $ 39,766 $ 41,935 International 1,998 1,179 Total revenue $ 41,764 $ 43,114 Deferred Revenues Our deferred revenues represent payments made to, or due from, customers in advance of our performance. Changes in the balance of total deferred revenue during the three months ended March 31, 2019 are as follows: (Dollars in thousands) December 31, 2018 Additions Revenue Recognized March 31, 2019 Deferred Revenue $ 26,582 $ 26,126 $ (24,147 ) $ 28,561 During the three months ended March 31, 2019 , the Company recognized $15.8 million related to amounts deferred as of December 31, 2018 . Prepaid Commissions Our prepaid commissions represent payments made to employees in advance of our performance on the related underlying contracts. These costs have been incurred directly in relation with obtaining a contract. As such, these costs are amortized over the estimated period of benefit. Changes in the balance of total deferred commissions during the three months ended March 31, 2019 are as follows: (Dollars in thousands) December 31, 2018 Additions Commissions Recognized March 31, 2019 Prepaid Commissions $ 2,394 $ (1,553 ) $ 1,424 $ 2,265 Deferred commissions are included within Prepaid Assets on the Condensed Consolidated Balance Sheets and commissions expense is included within Selling and marketing on the Condensed Consolidated Statement of Operations. Remaining Performance Obligations We have elected not to disclose the value of unsatisfied performance obligations for contracts with an original expected length of one year or less and for variable consideration which is allocated entirely to a wholly unsatisfied performance obligation or to a wholly unsatisfied promise to transfer a distinct good or service that forms part of a single performance obligation. The remaining backlog is immaterial to our Condensed Consolidated Financial Statements. |
Leases
Leases | 3 Months Ended |
Mar. 31, 2019 | |
Leases [Abstract] | |
Leases | Leases Leases - Adoption of ASC 842 “Leases” We have operating lease arrangements for corporate offices, cellular towers, storage units and small building space. The building space is used to house infrastructure, such as transmitters, antennae and other various equipment, for the Company’s wireless paging services. For leases with a term of 12 months or less, renewal terms are generally of an evergreen nature (either month-to-month or year-to-year). For leases with a term greater than 12 months, renewal terms are generally explicit and provide for one to five optional renewals consistent with the initial term. Many of our leases, with the exception of those for our corporate offices, include options to terminate the lease within one year . Variable lease payments, residual value guarantees or purchase options are not generally present in these leases. Lease costs are included in technology operations and general and administrative expenses on the Condensed Consolidated Statement of Operations. The following table presents lease costs disaggregated by type: For the Three months ended March 31, (Dollars in thousands) 2019 Operating lease cost $ 1,381 Short-term lease cost 1,935 Short-term lease cost - related party (1) 902 Total lease $ 4,218 Supplemental Disclosure: Cash paid for amounts included in the measurement of lease liabilities - operating leases $ 1,362 Weighted-average remaining lease term - operating leases 6.01 years Weighted-average discount rate - operating leases 5.5 % (1) A member of our Board of Directors also serves as a director for an entity that leases transmission tower sites to the Company. Refer to Note 13 , "Related Parties" for additional details. Maturities of lease liabilities as of March 31, 2019 were as follows: For the Year Ended December 31, (Dollars in thousands) For the remaining nine months ending December 31, 2019 $ 4,075 2020 4,624 2021 3,588 2022 2,089 2023 1,440 Thereafter 4,625 Total future lease payments 20,441 Imputed interest (2,951 ) Total 17,490 |
Consolidated Financial Statemen
Consolidated Financial Statement Components | 3 Months Ended |
Mar. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Consolidated Financial Statement Components | CONSOLIDATED FINANCIAL STATEMENT COMPONENTS Depreciation, Amortization and Accretion Depreciation, amortization and accretion expenses consisted of the following for the periods stated: For the Three Months Ended March 31, (Dollars in thousands) 2019 2018 Depreciation Leasehold improvements $ 24 $ 68 Asset retirement costs (192 ) (76 ) Paging and computer equipment 1,666 1,855 Furniture, fixtures and vehicles 98 106 Total depreciation 1,596 1,953 Amortization 625 625 Accretion 138 135 Total depreciation, amortization and accretion expense $ 2,359 $ 2,713 Accounts Receivable, Net Accounts receivable was recorded net of an allowance of $ 1.5 million and $1.7 million at March 31, 2019 and December 31, 2018 , respectively. Accounts receivable, net includes $3.4 million and $8.7 million of unbilled receivables at March 31, 2019 and December 31, 2018 , respectively. Unbilled receivables are defined as the Company's right to consideration in exchange for goods or services that we have transferred to the customer but have not yet billed for, generally as a result of contractual billing terms. The decrease in unbilled receivables was primarily due to an increase in billings for the three months ended March 31, 2019 . Property and Equipment, Net Property and equipment, net consisted of the following as of the date stated: (Dollars in thousands) Useful Life March 31, 2019 December 31, 2018 Leasehold improvements shorter of useful life or lease term $ 3,708 $ 4,139 Asset retirement costs 1-5 2,024 2,021 Paging and computer equipment 1-5 98,340 98,401 Furniture, fixtures and vehicles 3-5 4,358 4,353 Total property and equipment 108,430 108,914 Accumulated depreciation (98,607 ) (98,560 ) Total property and equipment, net $ 9,823 $ 10,354 |
Intangible Assets, Net
Intangible Assets, Net | 3 Months Ended |
Mar. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets, Net | INTANGIBLE ASSETS, NET Intangible Assets Amortizable intangible assets at March 31, 2019 related primarily to customer relationships that resulted from our acquisition of Amcom Software, Inc. in 2011. Such intangibles are being amortized over a period of ten years . The net consolidated balance of intangible assets consisted of the following at March 31, 2019 : March 31, 2019 (Dollars in thousands) Useful Life Gross Carrying Accumulated Net Balance Customer relationships 10 $ 25,002 $ (20,210 ) $ 4,792 Estimated amortization of intangible assets for future periods was as follows: (Dollars in thousands) For the remaining nine months ending December 31, 2019 $ 1,875 For the year ending December 31: 2020 2,500 2021 417 Total amortizable intangible assets $ 4,792 |
Asset Retirement Obligations
Asset Retirement Obligations | 3 Months Ended |
Mar. 31, 2019 | |
Asset Retirement Obligation Disclosure [Abstract] | |
Asset Retirement Obligations | ASSET RETIREMENT OBLIGATIONS The components of the changes in the asset retirement obligation liabilities were: (Dollars in thousands) Short-Term Long-Term Total Balance at January 1, 2019 $ 34 $ 6,513 $ 6,547 Accretion 10 128 138 Amounts paid (29 ) — (29 ) Increases — 3 3 Reclassifications 29 (29 ) — Balance at March 31, 2019 $ 44 $ 6,615 $ 6,659 The balances above were included within other current liabilities and other non-current liabilities on the Condensed Consolidated Balance Sheet, respectively, at March 31, 2019 . Increases and reductions other than accretion, reclassification and amounts paid primarily relate to changes in estimate of the underlying liability, specifically as it relates to updates in estimated costs to remove a transmitter and the estimated timing of removal. The cost associated with the estimated removal costs and timing refinements due to ongoing network rationalization activities is expected to accrete to a total liability of $8.1 million . The total estimated liability is based on the transmitter locations remaining after we have consolidated the number of networks we operate and assume the underlying leases continue to be renewed to that future date. Accretion expense was $0.1 million for the three months ended March 31, 2019 and 2018 . Accretion expense related solely to asset retirement obligations and was recorded based on the interest method. |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Mar. 31, 2019 | |
Equity [Abstract] | |
Stockholders' Equity | STOCKHOLDERS' EQUITY General Our authorized capital stock consists of 75 million shares of common stock, par value $0.0001 per share, and 25 million shares of preferred stock, par value $0.0001 per share. At March 31, 2019 and December 31, 2018 , we had no stock options outstanding. At March 31, 2019 and December 31, 2018 , there were 19,204,056 and 19,389,066 shares of common stock outstanding, respectively, and no shares of preferred stock outstanding. Dividends The following table details our cash dividends declared in 2019 . Cash dividends paid as disclosed in the Condensed Consolidated Statement of Cash Flows for the three months ended March 31, 2019 and 2018 include previously declared cash dividends on shares of vested restricted common stock ("restricted stock") issued to our non-executive directors and dividends related to vested restricted stock units ("RSUs") issued to eligible employees. Cash dividends on RSUs and restricted stock have been accrued and are paid when the applicable vesting conditions are met. Accrued cash dividends on forfeited restricted stock and RSUs are also forfeited. Declaration Date Record Date Payment Date Per Share Amount Total Declared (1) (Dollars in thousands) February 27, 2019 March 15, 2019 March 29, 2019 $ 0.125 $ 2,479 (1) The total declared reflects the cash dividends declared in relation to common stock and unvested RSUs. On April 24, 2019, our Board of Directors declared a regular quarterly cash dividend of $0.125 per share of common stock with a record date of May 24, 2019, and a payment date of June 24, 2019. This cash dividend of approximately $2.4 million will be paid from available cash on hand. Common Stock Repurchase Program In August 2018, the Company's Board of Directors authorized the repurchase of up to $10.0 million of the Company's common stock through December 31, 2018 on the open market or in privately negotiated transactions. In November 2018, the Company's Board of Directors extended the repurchase authority through December 31, 2019. The following table presents information with respect to purchases made by the Company during the three months ended March 31, 2019 : Period Total Number of Shares Purchased Average Price Paid Per Share (1) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs (Dollars in thousands) Balance at January 1, 2019 $ 6,555 Three Months Ended March 31, 2019 131,012 $ 13.77 131,012 $ 4,749 (1) Average price paid per share excludes commissions of approximately $5,240 . The above table excludes shares repurchased to settle employee tax withholding related to the vesting of equity awards. Net Income per Common Share Basic net income per common share is computed on the basis of the weighted average common shares outstanding. Diluted net income per common share is computed on the basis of the weighted average common shares outstanding plus the effect of all potentially dilutive common shares including outstanding restricted stock and RSUs, which are treated as contingently issuable shares, using the “treasury stock” method. The components of basic and diluted net income per common share were as follows for the periods stated: For the Three Months Ended March 31, (in thousands, except for share and per share amounts) 2019 2018 Numerator: Net income $ 742 $ 345 Denominator: Basic weighted average outstanding shares of common stock 19,196,970 20,027,800 Diluted weighted average outstanding shares of common stock 19,356,712 20,153,291 Basic and diluted net income per common share $ 0.04 $ 0.02 Share-Based Compensation Plans On March 23, 2012, our Board of Directors adopted the Spok Holdings, Inc. 2012 Equity Incentive Award Plan (the “2012 Equity Plan”) that was subsequently approved by our stockholders on May 16, 2012. A total of 2,194,986 shares of common stock have been reserved for issuance under this plan. Awards under the 2012 Equity Plan may be in the form of stock options, common stock, restricted stock, RSUs, performance awards, dividend equivalents, deferred stock, deferred stock units, or stock appreciation rights. Restricted stock awards generally vest one year from the date of grant. Related dividends accumulate during the vesting period and are paid at the time of vesting. Contingent RSUs generally vest over a three -year performance period upon successful completion of the performance objectives. Non-contingent RSUs generally vest in thirds, annually, over a three -year period. Dividend equivalents rights generally accompany each RSU award and those rights accumulate and vest along with the underlying RSU. The following table summarizes the activities under the 2012 Equity Plan from January 1, 2019 through March 31, 2019 : Activity Total equity securities available at January 1, 2019 904,437 RSU and restricted stock awarded to eligible employees, net of forfeitures (240,588 ) Total equity securities available at March 31, 2019 663,849 The following table details activities with respect to outstanding RSUs and restricted stock for the three months ended March 31, 2019 : Shares Weighted- Unvested at January 1, 2019 404,325 $ 17.27 Granted 333,655 13.26 Vested (14,057 ) 15.65 Forfeited (101,173 ) 15.68 Unvested at March 31, 2019 622,750 $ 15.42 Of the 622,750 unvested RSUs and restricted stock outstanding at March 31, 2019 , 363,169 RSUs include contingent performance requirements for vesting purposes. At March 31, 2019 , there was $5.9 million of unrecognized net compensation cost related to RSUs and restricted stock, which is expected to be recognized over a weighted average period of 2.0 years. Employee Stock Purchase Plan. In 2016, our Board of Directors adopted the Spok Holdings, Inc. Employee Stock Purchase Plan ("ESPP") that was subsequently approved by our stockholders on July 25, 2016. A total of 250,000 shares of common stock have been reserved for issuance under this plan. The Company's ESPP allows employees to purchase shares of common stock at a discounted rate, subject to plan limitations. Under the ESPP, eligible participants can voluntarily elect to have contributions withheld from their pay for the duration of an offering period, subject to the ESPP limits. At the end of an offering period, contributions will be used to purchase the Company's common stock at a discount to the market price based on the first or last day of the offering period, whichever is lower. Participants are required to hold common stock for a minimum period of two years from the grant date. Participants will begin earning dividends on shares after the purchase date. Each offering period will generally last for no longer than six months. Once an offering period begins, participants cannot adjust their withholding amount. If a participant chooses to withdraw, any previously withheld funds will be returned to the participant, with no stock purchased, and that participant will be eligible to participate in the ESPP at the next offering period. If the participant terminates employment with the Company during the offering period, all contributions will be returned to the employee and no stock will be purchased at a discounted rate. The Company uses the Black-Scholes model to calculate the fair value of the common stock to be purchased each offering period on their offer date. The Black-Scholes model requires the use of estimates for the expected term, the expected volatility of the underlying common stock over the expected term, the risk-free interest rate and the expected dividend payment. For the three months ended March 31, 2019 and 2018 no shares of the Company's common stock were purchased. The following table summarizes the activities under the ESPP from January 1, 2019 through March 31, 2019 : Activity Total ESPP equity securities available at January 1, 2019 208,159 ESPP common stock purchased by eligible employees — Total ESPP securities available at March 31, 2019 208,159 Amounts withheld from participants will be classified an accrued compensation and benefit on the Condensed Consolidated Balance Sheets until funds are used to purchase shares. This liability amount is immaterial to the Condensed Consolidated Financial Statements. Stock-Based Compensation Expense We record all stock-based awards, which consist of RSUs, restricted stock and the option to purchase common stock under the ESPP, at fair value as of the grant date. Stock-based compensation expense is recognized based on a straight-line amortization basis over the respective service period. Forfeitures and withdrawals are accounted for as incurred. The following table reflects the items for stock-based compensation expense on the Condensed Consolidated Statement of Operations for the periods stated: For the Three Months Ended March 31, (Dollars in thousands) 2019 2018 Performance-based RSUs $ 107 $ 504 Time-based RSUs and restricted stock 404 713 ESPP 17 17 Total stock-based compensation $ 528 $ 1,234 |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXES Spok files a consolidated U.S. Federal income tax return and income tax returns in various state, local and foreign jurisdictions as required. Our quarterly tax provision, and our quarterly estimate of our annual effective tax rate, is subject to significant variation due to several factors, including variability in accurately predicting our pre-tax and taxable income and loss and the mix of jurisdictions to which they relate, changes in how we do business, changes in our stock price, foreign currency gains (losses), tax law developments (including changes in statutes, regulations, case law, and administrative practices), and relative changes of expenses or losses for which tax benefits are not recognized. Additionally, our effective tax rate can be more or less volatile based on the amount of pre-tax income or loss. For example, the impact of discrete items and non-deductible expenses on our effective tax rate is greater when our pre-tax income is lower For 2019, the anticipated effective income tax rate is expected to continue to differ from the Federal statutory rate of 21% primarily due to the effect of state income taxes, research and development credits, permanent differences between book and taxable income and certain discrete items. At March 31, 2019 , we had total deferred income tax assets ("DTAs") of $46.0 million and no valuation allowance. This reflects a decrease of $0.5 million from the December 31, 2018 of DTAs of $46.5 million and no valuation allowance. We consider both positive and negative evidence when evaluating the recoverability of our DTAs. The assessment is required to determine whether based on all available evidence, it is more likely than not (i.e., greater than a 50% probability) that all or some portion of the DTAs will be realized in the future. During the fourth quarter of each year, we update our multi-year forecast of taxable income for our operations which assists in analyzing the recoverability of our DTAs. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES There have been no material changes during the three months ended March 31, 2019 to the commitments and contingencies previously reported in the 2018 Annual Report. |
Related Parties
Related Parties | 3 Months Ended |
Mar. 31, 2019 | |
Related Party Transactions [Abstract] | |
Related Parties | RELATED PARTIES A member of our Board of Directors also serves as a director for an entity that leases transmission tower sites to the Company. For the three months ended March 31, 2019 and 2018 , we incurred site rent expenses of $0.9 million from the entity on which the individual serves as a director. Site rent expenses are included in Technology operations expenses on the Condensed Consolidated Statement of Operations. |
Organization and Significant _2
Organization and Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying Condensed Consolidated Financial Statements include our accounts and the accounts of our wholly-owned direct and indirect subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. Our Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and the rules and regulations of the United States Securities and Exchange Commission (the “SEC”). In management's opinion, the unaudited Condensed Consolidated Financial Statements include all adjustments and accruals that are necessary for the presentation of the results of all interim periods reported herein and all such adjustments are of a normal, recurring nature. As a result of the adoption of Accounting Standards Codification (“ASC”) 842, Leases , and our application of the modified retrospective approach using a cumulative-effect adjustment to our opening balance of retained earnings as of January 1, 2019, prior period amounts have not been restated under ASC 842. For additional details refer to Note 4 , "Significant Accounting Policies Update" and Note 6 , "Leases". Amounts shown on the Condensed Consolidated Statement of Operations within the operating expense categories of Cost of revenue; Research and development; Technology operations; Selling and marketing; and General and administrative are recorded exclusive of depreciation, amortization and accretion. The financial information included herein, other than the Condensed Consolidated Balance Sheet as of December 31, 2018 , is unaudited. The Condensed Consolidated Balance Sheet at December 31, 2018 has been derived from, but does not include all, the disclosures contained in the audited Consolidated Financial Statements as of and for the year ended December 31, 2018 . These Condensed Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and accompanying notes included in the Company's Annual Report on Form 10-K for the year ended December 31, 2018 (the “ 2018 Annual Report”). The Condensed Consolidated Statement of Operations for the interim periods presented are not necessarily indicative of the results that may be expected for a full year. Certain prior period amounts in the Condensed Consolidated Financial Statements have been reclassified to conform to the current period's presentation. For additional information refer to the 2018 Annual Report. |
Use of Estimates | Use of Estimates The preparation of these Condensed Consolidated Financial Statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues, expenses and related disclosures. On an on-going basis, we evaluate estimates and assumptions, including, but not limited to, those related to the impairment of long-lived assets; intangible assets subject to amortization and goodwill; accounts receivable allowances; revenue recognition; determining standalone selling price ("SSP") of performance obligations; variable consideration; depreciation expense; asset retirement obligations; and income taxes. We base our estimates on historical experience and various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. |
Recently Adopted | Recently Adopted Leases - In February 2016, the FASB issued ASU No. 2016-02, Leases . The new standard establishes a right of use (“ROU”) model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than twelve months. Leases will be classified as either financing or operating with the classification affecting the pattern of expense recognition in the Condensed Consolidated Statement of Operations. On January 1, 2019, we adopted ASC 842 using the modified retrospective approach that resulted in a material adjustment to our balance sheet as of January 1, 2019. As a result, the impact was an increase to assets and liabilities of approximately $17.4 million . Results for reporting periods beginning after January 1, 2019 are presented under ASC 842, while prior period amounts are not adjusted and continue to be reported in accordance with our historic accounting under ASC 840. In adoption of ASC 842 we elected to use the package of available practical expedients with the exception of hindsight. For additional details refer to Note 4 , "Significant Accounting Policies Update" and Note 6 , "Leases." |
Leases - Adoption of ASC 842 | Leases - Adoption of ASC 842 “Leases” Operating lease ROU assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. We have made an accounting policy election not to apply the recognition requirements of ASC 842 to short-term leases. Those leases which have a term of less than 12 months will have lease payments recognized, in our Condensed Consolidated Statement of Operations, on a straight-line basis over the lease term. An optional renewal or termination is not recognized as part of the lease term unless we determine that it is reasonably certain that we will exercise that option. The term reasonably certain is a high threshold for which pervasive evidence generally does not exist, and therefore, optional renewal periods are generally excluded from our ROU assets and lease liabilities until they have been exercised. Lease expense is recognized on a straight-line basis over the lease term. As most of our leases do not provide an implicit rate, we use an estimated incremental borrowing rate in determining the present value of lease payments. The Company uses a portfolio approach when determining the discount rate to be applied to its leases. Significant judgment is necessary when determining a discount rate because we must estimate the discount rate based on a number of factors and observable inputs including current market conditions, market yields, government bonds or currency LIBOR rates, credit risk, and other factors as necessary. The Company must also exercise significant judgment when determining whether an option to renew or terminate a lease should be included in the lease term. This judgment includes an assessment of all relevant economic factors such as costs relating to the termination or extension of a lease, importance of the underlying asset to the Company’s operations, and the terms and conditions of the optional periods in relation to current market rates. Where we have lease agreements which contain lease and non-lease components, we have elected to make use of the practical expedient to account for each separate lease component and associated non-lease component as a single lease component. |
Revenue, Deferred Revenue And_2
Revenue, Deferred Revenue And Prepaid Commissions (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Revenue | Revenue by geographic region consisted of the following for the periods stated: For the Three months ended March 31, 2019 (Dollars in thousands) 2019 2018 Revenue United States $ 39,766 $ 41,935 International 1,998 1,179 Total revenue $ 41,764 $ 43,114 The following table presents our revenues disaggregated by revenue type: For the Three months ended March 31, 2019 (Dollars in thousands) 2019 2018 Wireless products and services $ 22,610 $ 24,269 License 2,840 4,376 Services 5,206 4,071 Hardware 963 1,024 Maintenance 10,145 9,374 Total revenue $ 41,764 $ 43,114 |
Schedule of Deferred Revenue | Changes in the balance of total deferred revenue during the three months ended March 31, 2019 are as follows: (Dollars in thousands) December 31, 2018 Additions Revenue Recognized March 31, 2019 Deferred Revenue $ 26,582 $ 26,126 $ (24,147 ) $ 28,561 |
Schedule of Deferred Commissions | Changes in the balance of total deferred commissions during the three months ended March 31, 2019 are as follows: (Dollars in thousands) December 31, 2018 Additions Commissions Recognized March 31, 2019 Prepaid Commissions $ 2,394 $ (1,553 ) $ 1,424 $ 2,265 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Leases [Abstract] | |
Schedule of Lease Costs | The following table presents lease costs disaggregated by type: For the Three months ended March 31, (Dollars in thousands) 2019 Operating lease cost $ 1,381 Short-term lease cost 1,935 Short-term lease cost - related party (1) 902 Total lease $ 4,218 Supplemental Disclosure: Cash paid for amounts included in the measurement of lease liabilities - operating leases $ 1,362 Weighted-average remaining lease term - operating leases 6.01 years Weighted-average discount rate - operating leases 5.5 % (1) A member of our Board of Directors also serves as a director for an entity that leases transmission tower sites to the Company. Refer to Note 13 , "Related Parties" for additional details. |
Schedule of Maturities of Lease Liabilities | Maturities of lease liabilities as of March 31, 2019 were as follows: For the Year Ended December 31, (Dollars in thousands) For the remaining nine months ending December 31, 2019 $ 4,075 2020 4,624 2021 3,588 2022 2,089 2023 1,440 Thereafter 4,625 Total future lease payments 20,441 Imputed interest (2,951 ) Total 17,490 |
Consolidated Financial Statem_2
Consolidated Financial Statement Components (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Summary of Depreciation, Amortization and Accretion | Depreciation, amortization and accretion expenses consisted of the following for the periods stated: For the Three Months Ended March 31, (Dollars in thousands) 2019 2018 Depreciation Leasehold improvements $ 24 $ 68 Asset retirement costs (192 ) (76 ) Paging and computer equipment 1,666 1,855 Furniture, fixtures and vehicles 98 106 Total depreciation 1,596 1,953 Amortization 625 625 Accretion 138 135 Total depreciation, amortization and accretion expense $ 2,359 $ 2,713 |
Property, Plant and Equipment | Property and equipment, net consisted of the following as of the date stated: (Dollars in thousands) Useful Life March 31, 2019 December 31, 2018 Leasehold improvements shorter of useful life or lease term $ 3,708 $ 4,139 Asset retirement costs 1-5 2,024 2,021 Paging and computer equipment 1-5 98,340 98,401 Furniture, fixtures and vehicles 3-5 4,358 4,353 Total property and equipment 108,430 108,914 Accumulated depreciation (98,607 ) (98,560 ) Total property and equipment, net $ 9,823 $ 10,354 |
Intangible Assets, Net (Tables)
Intangible Assets, Net (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Net Consolidated Balance of Amortizable Intangible Assets | The net consolidated balance of intangible assets consisted of the following at March 31, 2019 : March 31, 2019 (Dollars in thousands) Useful Life Gross Carrying Accumulated Net Balance Customer relationships 10 $ 25,002 $ (20,210 ) $ 4,792 |
Estimated Amortization of Intangible Assets | Estimated amortization of intangible assets for future periods was as follows: (Dollars in thousands) For the remaining nine months ending December 31, 2019 $ 1,875 For the year ending December 31: 2020 2,500 2021 417 Total amortizable intangible assets $ 4,792 |
Asset Retirement Obligations (T
Asset Retirement Obligations (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Asset Retirement Obligation Disclosure [Abstract] | |
Changes in Asset Retirement Obligation Liabilities | The components of the changes in the asset retirement obligation liabilities were: (Dollars in thousands) Short-Term Long-Term Total Balance at January 1, 2019 $ 34 $ 6,513 $ 6,547 Accretion 10 128 138 Amounts paid (29 ) — (29 ) Increases — 3 3 Reclassifications 29 (29 ) — Balance at March 31, 2019 $ 44 $ 6,615 $ 6,659 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Equity [Abstract] | |
Cash Dividends Declared | The following table details our cash dividends declared in 2019 . Cash dividends paid as disclosed in the Condensed Consolidated Statement of Cash Flows for the three months ended March 31, 2019 and 2018 include previously declared cash dividends on shares of vested restricted common stock ("restricted stock") issued to our non-executive directors and dividends related to vested restricted stock units ("RSUs") issued to eligible employees. Cash dividends on RSUs and restricted stock have been accrued and are paid when the applicable vesting conditions are met. Accrued cash dividends on forfeited restricted stock and RSUs are also forfeited. Declaration Date Record Date Payment Date Per Share Amount Total Declared (1) (Dollars in thousands) February 27, 2019 March 15, 2019 March 29, 2019 $ 0.125 $ 2,479 (1) The total declared reflects the cash dividends declared in relation to common stock and unvested RSUs. |
Share Repurchase Plan | The following table presents information with respect to purchases made by the Company during the three months ended March 31, 2019 : Period Total Number of Shares Purchased Average Price Paid Per Share (1) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs (Dollars in thousands) Balance at January 1, 2019 $ 6,555 Three Months Ended March 31, 2019 131,012 $ 13.77 131,012 $ 4,749 (1) Average price paid per share excludes commissions of approximately $5,240 . |
Basic and Diluted Net Income Per Common Shares | The components of basic and diluted net income per common share were as follows for the periods stated: For the Three Months Ended March 31, (in thousands, except for share and per share amounts) 2019 2018 Numerator: Net income $ 742 $ 345 Denominator: Basic weighted average outstanding shares of common stock 19,196,970 20,027,800 Diluted weighted average outstanding shares of common stock 19,356,712 20,153,291 Basic and diluted net income per common share $ 0.04 $ 0.02 |
Activities Under Equity Plan | The following table summarizes the activities under the ESPP from January 1, 2019 through March 31, 2019 : Activity Total ESPP equity securities available at January 1, 2019 208,159 ESPP common stock purchased by eligible employees — Total ESPP securities available at March 31, 2019 208,159 The following table summarizes the activities under the 2012 Equity Plan from January 1, 2019 through March 31, 2019 : Activity Total equity securities available at January 1, 2019 904,437 RSU and restricted stock awarded to eligible employees, net of forfeitures (240,588 ) Total equity securities available at March 31, 2019 663,849 |
Summary of Outstanding RSUs | The following table details activities with respect to outstanding RSUs and restricted stock for the three months ended March 31, 2019 : Shares Weighted- Unvested at January 1, 2019 404,325 $ 17.27 Granted 333,655 13.26 Vested (14,057 ) 15.65 Forfeited (101,173 ) 15.68 Unvested at March 31, 2019 622,750 $ 15.42 |
Stock Based Compensation Expense | The following table reflects the items for stock-based compensation expense on the Condensed Consolidated Statement of Operations for the periods stated: For the Three Months Ended March 31, (Dollars in thousands) 2019 2018 Performance-based RSUs $ 107 $ 504 Time-based RSUs and restricted stock 404 713 ESPP 17 17 Total stock-based compensation $ 528 $ 1,234 |
Organization and Significant _3
Organization and Significant Accounting Policies (Details) message in Millions | 3 Months Ended |
Mar. 31, 2019message | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Monthly messages sent through company solutions (more than) | 100 |
Recent Accounting Standards (De
Recent Accounting Standards (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Jan. 01, 2019 | Dec. 31, 2018 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Increase to assets | $ 340,602 | $ 327,712 | |
Increase to liabilities | $ 70,068 | $ 53,158 | |
Accounting Standards Update 2016-02 | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Increase to assets | $ 17,400 | ||
Increase to liabilities | $ 17,400 |
Revenue, Deferred Revenue And_3
Revenue, Deferred Revenue And Prepaid Commissions - Additional Information and Disaggregation of Revenue (Details) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019USD ($)revenue_component | Mar. 31, 2018USD ($) | |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total revenue | $ 41,764 | $ 43,114 |
Deferred revenue recognized from previous period | 15,800 | |
Wireless products and services | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total revenue | 22,610 | 24,269 |
License | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total revenue | 2,840 | 4,376 |
Services | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total revenue | 5,206 | 4,071 |
Hardware | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total revenue | $ 963 | 1,024 |
Maintenance | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Typical duration of revenue recognition | Maintenance revenue is for ongoing support of our software solutions or related equipment (typically for one year). | |
Total revenue | $ 10,145 | 9,374 |
United States | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total revenue | 39,766 | 41,935 |
International | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total revenue | $ 1,998 | $ 1,179 |
Wireless | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenue primary component | revenue_component | 2 | |
Software | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenue primary component | revenue_component | 2 |
Revenue, Deferred Revenue And_4
Revenue, Deferred Revenue And Prepaid Commissions - Deferred Revenues (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Contract With Customer, Asset And Liability [Roll Forward] | ||
December 31, 2018 | $ 26,582 | |
Additions | 1,803 | $ 3,106 |
March 31, 2019 | 28,561 | |
Accounting Standards Update 2014-09 | ||
Contract With Customer, Asset And Liability [Roll Forward] | ||
Additions | 26,126 | |
Revenue Recognized | $ (24,147) |
Revenue, Deferred Revenue And_5
Revenue, Deferred Revenue And Prepaid Commissions - Prepaid Commissions (Details) - Prepaid Commissions $ in Thousands | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Capitalized Contract Cost [Roll Forward] | |
December 31, 2018 | $ 2,394 |
Additions | (1,553) |
Commissions Recognized | 1,424 |
March 31, 2019 | $ 2,265 |
Leases - Narrative (Details)
Leases - Narrative (Details) | 3 Months Ended |
Mar. 31, 2019renewal | |
Lessee, Lease, Description [Line Items] | |
Termination term | 1 year |
Minimum | |
Lessee, Lease, Description [Line Items] | |
Number of renewal options | 1 |
Maximum | |
Lessee, Lease, Description [Line Items] | |
Number of renewal options | 5 |
Leases - Lease Costs (Details)
Leases - Lease Costs (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Leases [Abstract] | |
Operating lease cost | $ 1,381 |
Short-term lease cost | 1,935 |
Short-term lease cost - related party | 902 |
Total lease | 4,218 |
Cash paid for amounts included in the measurement of lease liabilities - operating leases | $ 1,362 |
Weighted-average remaining lease term - operating leases | 6 years 4 days |
Weighted-average discount rate - operating leases | 5.50% |
Leases - Lease Maturities (Deta
Leases - Lease Maturities (Details) $ in Thousands | Mar. 31, 2019USD ($) |
Leases [Abstract] | |
For the remaining nine months ending December 31, 2019 | $ 4,075 |
2020 | 4,624 |
2021 | 3,588 |
2022 | 2,089 |
2023 | 1,440 |
Thereafter | 4,625 |
Total future lease payments | 20,441 |
Imputed interest | (2,951) |
Total | $ 17,490 |
Consolidated Financial Statem_3
Consolidated Financial Statement Components - Depreciation, Amortization and Accretion (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Property, Plant and Equipment [Line Items] | ||
Depreciation | $ 1,596 | $ 1,953 |
Amortization | 625 | 625 |
Accretion | 138 | 135 |
Total depreciation, amortization and accretion expense | 2,359 | 2,713 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Depreciation | 24 | 68 |
Asset retirement costs | ||
Property, Plant and Equipment [Line Items] | ||
Depreciation | (192) | (76) |
Paging and computer equipment | ||
Property, Plant and Equipment [Line Items] | ||
Depreciation | 1,666 | 1,855 |
Furniture, fixtures and vehicles | ||
Property, Plant and Equipment [Line Items] | ||
Depreciation | $ 98 | $ 106 |
Consolidated Financial Statem_4
Consolidated Financial Statement Components - Accounts Receivable, Net (Details) - USD ($) $ in Millions | Mar. 31, 2019 | Dec. 31, 2018 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Allowance for doubtful accounts receivable | $ 1.5 | $ 1.7 |
Contract Asset | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Allowance for doubtful accounts receivable | $ 3.4 | $ 8.7 |
Consolidated Financial Statem_5
Consolidated Financial Statement Components - Property and Equipment, Net (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Dec. 31, 2018 | |
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | $ 108,430 | $ 108,914 |
Accumulated depreciation | (98,607) | (98,560) |
Total property and equipment, net | 9,823 | 10,354 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 3,708 | 4,139 |
Asset retirement costs | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | $ 2,024 | 2,021 |
Asset retirement costs | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Useful Life | 1 year | |
Asset retirement costs | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Useful Life | 5 years | |
Paging and computer equipment | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | $ 98,340 | 98,401 |
Paging and computer equipment | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Useful Life | 1 year | |
Paging and computer equipment | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Useful Life | 5 years | |
Furniture, fixtures and vehicles | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | $ 4,358 | $ 4,353 |
Furniture, fixtures and vehicles | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Useful Life | 3 years | |
Furniture, fixtures and vehicles | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Useful Life | 5 years |
Intangible Assets, Net - Additi
Intangible Assets, Net - Additional Information (Details) | 3 Months Ended |
Mar. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Useful Life (In Years) | 10 years |
Intangible Assets, Net - Net Co
Intangible Assets, Net - Net Consolidated Balance of Amortizable Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Dec. 31, 2018 | |
Finite-Lived Intangible Assets [Line Items] | ||
Useful Life (In Years) | 10 years | |
Total amortizable intangible assets | $ 4,792 | $ 5,417 |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful Life (In Years) | 10 years | |
Gross Carrying Amount | $ 25,002 | |
Accumulated Amortization | (20,210) | |
Total amortizable intangible assets | $ 4,792 |
Intangible Assets, Net - Estima
Intangible Assets, Net - Estimated Amortization of Intangible Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
For the remaining nine months ending December 31, 2019 | $ 1,875 | |
2020 | 2,500 | |
2021 | 417 | |
Total amortizable intangible assets | $ 4,792 | $ 5,417 |
Asset Retirement Obligations -
Asset Retirement Obligations - Changes in Asset Retirement Obligation Liabilities (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Asset Retirement Obligation, Roll Forward Analysis [Roll Forward] | ||
Balance at January 1, 2019 | $ 6,547 | |
Accretion | 138 | $ 135 |
Amounts paid | (29) | |
Increases | 3 | |
Reclassifications | 0 | |
Balance at March 31, 2019 | 6,659 | |
Short-Term Portion | ||
Asset Retirement Obligation, Roll Forward Analysis [Roll Forward] | ||
Balance at January 1, 2019 | 34 | |
Accretion | 10 | |
Amounts paid | (29) | |
Increases | 0 | |
Reclassifications | 29 | |
Balance at March 31, 2019 | 44 | |
Long-Term Portion | ||
Asset Retirement Obligation, Roll Forward Analysis [Roll Forward] | ||
Balance at January 1, 2019 | 6,513 | |
Accretion | 128 | |
Amounts paid | 0 | |
Increases | 3 | |
Reclassifications | (29) | |
Balance at March 31, 2019 | $ 6,615 |
Asset Retirement Obligations _2
Asset Retirement Obligations - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Asset Retirement Obligation Disclosure [Abstract] | ||
Estimated liability | $ 8,100 | |
Accretion | $ 138 | $ 135 |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Information (Details) - USD ($) | 3 Months Ended | |||||
Mar. 31, 2019 | Mar. 31, 2018 | Apr. 24, 2019 | Dec. 31, 2018 | Aug. 31, 2018 | May 16, 2012 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Common stock authorized (shares) | 75,000,000 | |||||
Common stock par value (usd per share) | $ 0.0001 | |||||
Preferred stock authorized (shares) | 25,000,000 | |||||
Preferred stock par value (usd per share) | $ 0.0001 | |||||
Options outstanding (shares) | 0 | 0 | ||||
Common stock outstanding (shares) | 19,204,056 | 19,389,066 | ||||
Preferred stock outstanding (shares) | 0 | 0 | ||||
Stock repurchase authority | $ 10,000,000 | |||||
Subsequent Event | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Dividend rate (usd per share) | $ 0.125 | |||||
Dividends declared | $ 2,400,000 | |||||
2012 Equity Plan | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of shares authorized (shares) | 2,194,986 | |||||
2012 Equity Plan | Restricted Stock | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Vesting period | 1 year | |||||
2012 Equity Plan | Restricted Stock and Restricted Stock Units with Contingent Performance Requirements | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Vesting period | 3 years | |||||
2012 Equity Plan | Restricted stock units | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Vesting period | 3 years | |||||
Performance-based RSUs | Restricted stock units | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Equity instruments other than options, nonvested (shares) | 622,750 | 404,325 | ||||
2011 Long Term Incentive Plan | Restricted Stock and Restricted Stock Units with Contingent Performance Requirements | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Equity instruments other than options, nonvested (shares) | 363,169 | |||||
2011 Long Term Incentive Plan | Restricted Stock and Restricted Stock Units (RSUs) | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Compensation cost not yet recognized, share-based awards other than options | $ 5,900,000 | |||||
Weighted-average period over which cost is expected to be recognized | 2 years 12 days | |||||
ESPP | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of shares authorized (shares) | 250,000 | |||||
Award required holding period | 2 years | |||||
Stock purchased during period (shares) | 0 | 0 | ||||
Maximum | ESPP | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Offering period, maximum | 6 months |
Stockholders' Equity - Cash Div
Stockholders' Equity - Cash Dividends Declared to Stockholders (Details) - Installment One - Common Stock $ / shares in Units, $ in Thousands | 3 Months Ended |
Mar. 31, 2019USD ($)$ / shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Declaration Date | Feb. 27, 2019 |
Record Date | Mar. 15, 2019 |
Payment Date | Mar. 29, 2019 |
Per Share Amount (usd per share) | $ / shares | $ 0.125 |
Total Declared | $ | $ 2,479 |
Stockholders' Equity - Treasury
Stockholders' Equity - Treasury Stock (Details) - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Dec. 31, 2018 | |
Equity, Class of Treasury Stock [Line Items] | ||
Shares purchased during period (shares) | 131,012 | |
Average price paid per share (usd per share) | $ 13.77 | |
Commissions paid to acquire shares | $ 5,240 | |
Common Stock Repurchase Program | ||
Equity, Class of Treasury Stock [Line Items] | ||
Shares purchased during period (shares) | 131,012 | |
Treasury stock acquired during period | $ 4,749,000 | $ 6,555,000 |
Stockholders' Equity - Basic an
Stockholders' Equity - Basic and Diluted Net Income Per Common Shares (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Numerator: | ||
Net income | $ 742 | $ 345 |
Denominator: | ||
Basic weighted average outstanding shares of common stock (shares) | 19,196,970 | 20,027,800 |
Diluted weighted average outstanding shares of common stock (shares) | 19,356,712 | 20,153,291 |
Basic and diluted net (loss) income per common share (usd per share) | $ 0.04 | $ 0.02 |
Stockholders' Equity - Activiti
Stockholders' Equity - Activities Under Equity Plan (Details) | 3 Months Ended |
Mar. 31, 2019shares | |
ESPP | |
Share-based Compensation Arrangement By Share-based Payment Award, Shares Authorized [Roll Forward] | |
Shares available for grant (shares) | 208,159 |
ESPP common stock purchased by eligible employees (shares) | 0 |
Shares available for grant (shares) | 208,159 |
Restricted stock units | 2012 Equity Plan | |
Share-based Compensation Arrangement By Share-based Payment Award, Shares Authorized [Roll Forward] | |
Shares available for grant (shares) | 904,437 |
Shares available for grant (shares) | 663,849 |
Eligible Employees | Restricted stock units | 2012 Equity Plan | |
Share-based Compensation Arrangement By Share-based Payment Award, Shares Authorized [Roll Forward] | |
RSU and restricted stock awarded to eligible employees, net of forfeitures (shares) | (240,588) |
Stockholders' Equity - Summary
Stockholders' Equity - Summary of Outstanding RSUs (Details) - Restricted stock units - Performance-based RSUs | 3 Months Ended |
Mar. 31, 2019$ / sharesshares | |
Shares | |
Beginning Balance (shares) | shares | 404,325 |
Granted (shares) | shares | 333,655 |
Vested (shares) | shares | (14,057) |
Forfeited (shares) | shares | (101,173) |
Ending Balance (shares) | shares | 622,750 |
Weighted- Average Grant Date Fair Value | |
Beginning Balance (usd per share) | $ / shares | $ 17.27 |
Granted (usd per share) | $ / shares | 13.26 |
Vested (usd per share) | $ / shares | 15.65 |
Forfeited (usd per share) | $ / shares | 15.68 |
Ending Balance (usd per share) | $ / shares | $ 15.42 |
Stockholders' Equity - Stock-ba
Stockholders' Equity - Stock-based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Total stock-based compensation | $ 528 | $ 1,234 |
Performance-based RSUs | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Total stock-based compensation | 107 | 504 |
Time-based RSUs and restricted stock | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Total stock-based compensation | 404 | 713 |
ESPP | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Total stock-based compensation | $ 17 | $ 17 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | ||
Deferred income tax assets | $ 45,967,000 | $ 46,484,000 |
Valuation allowance | 0 | $ 0 |
Decrease in deferred tax assets | $ (500,000) |
Related Parties (Details)
Related Parties (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Director | ||
Related Party Transaction [Line Items] | ||
Site rent expense | $ 0.9 | $ 0.9 |
Uncategorized Items - spok-2019
Label | Element | Value |
Accounting Standards Update 2014-09 [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ 4,644,000 |
Accounting Standards Update 2014-09 [Member] | Retained Earnings [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ 4,644,000 |