Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Feb. 21, 2020 | Jun. 28, 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-K | ||
Document Period End Date | Dec. 31, 2019 | ||
Document Fiscal Year Focus | 2019 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Entity Common Stock, Shares Outstanding (shares) | 18,944,914 | ||
Entity Emerging Growth | false | ||
Entity Small Business | false | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $ 289 | ||
Entity Shell Company | false |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 47,361 | $ 83,343 |
Short-term investments | 29,899 | 3,963 |
Accounts receivable, net | 30,174 | 32,386 |
Prepaid expenses | 7,517 | 6,906 |
Other current assets | 1,710 | 2,672 |
Inventory, net | 1,004 | 1,708 |
Total current assets | 117,665 | 130,978 |
Non-current assets: | ||
Property and equipment, net | 8,000 | 10,354 |
Operating lease right-of-use assets | 16,317 | |
Goodwill | 124,182 | 133,031 |
Intangible assets, net | 2,917 | 5,417 |
Deferred income tax assets, net | 48,983 | 46,484 |
Other non-current assets | 1,808 | 1,448 |
Total non-current assets | 202,207 | 196,734 |
TOTAL ASSETS | 319,872 | 327,712 |
Current liabilities: | ||
Accounts payable | 3,615 | 2,010 |
Accrued compensation and benefits | 11,680 | 11,348 |
Accrued taxes | 1,529 | 1,822 |
Deferred revenue | 25,944 | 26,106 |
Operating lease liabilities | 5,437 | |
Other current liabilities | 2,978 | 3,662 |
Total current liabilities | 51,183 | 44,948 |
Non-current liabilities: | ||
Asset retirement obligations | 6,061 | 6,513 |
Operating lease liabilities | 11,575 | |
Other non-current liabilities | 959 | 1,697 |
Total non-current liabilities | 18,595 | 8,210 |
TOTAL LIABILITIES | 69,778 | 53,158 |
COMMITMENTS AND CONTINGENCIES (Note 10) | ||
STOCKHOLDERS’ EQUITY: | ||
Preferred stock—$0.0001 par value; 25,000,000 shares authorized; no shares issued or outstanding | 0 | 0 |
Common stock—$0.0001 par value; 75,000,000 shares authorized; 19,071,614 and 19,389,066 shares issued and outstanding as of December 31, 2019 and December 31, 2018, respectively | 2 | 2 |
Additional paid-in capital | 86,874 | 90,559 |
Accumulated other comprehensive loss | (1,601) | (1,301) |
Retained earnings | 164,819 | 185,294 |
TOTAL STOCKHOLDERS’ EQUITY | 250,094 | 274,554 |
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ 319,872 | $ 327,712 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (usd per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized (shares) | 25,000,000 | 25,000,000 |
Preferred stock, shares issued (shares) | 0 | 0 |
Preferred stock, shares outstanding (shares) | 0 | 0 |
Common stock, par value (usd per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (shares) | 75,000,000 | 75,000,000 |
Common stock, shares issued (shares) | 19,071,614 | 19,389,066 |
Common stock, shares outstanding (shares) | 19,071,614 | 19,389,066 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Revenue: | |||
Total revenue | $ 160,289 | $ 169,474 | $ 171,175 |
Operating expenses: | |||
Cost of revenue | 30,072 | 32,408 | 28,418 |
Research and development | 27,543 | 24,464 | 18,702 |
Technology operations | 31,428 | 31,356 | 31,502 |
Selling and marketing | 23,170 | 24,553 | 22,823 |
General and administrative | 45,787 | 49,097 | 47,400 |
Depreciation, amortization and accretion | 9,249 | 10,769 | 11,624 |
Goodwill impairment | 8,849 | 0 | 0 |
Total operating expenses | 176,098 | 172,647 | 160,469 |
Operating (loss) income | (15,809) | (3,173) | 10,706 |
Interest income | 1,651 | 1,638 | 719 |
Other income (expense) | 735 | (650) | 134 |
(Loss) income before income tax benefit (expense) | (13,423) | (2,185) | 11,559 |
Benefit from (provision for) income taxes | 2,658 | 706 | (26,865) |
Net loss | $ (10,765) | $ (1,479) | $ (15,306) |
Basic and diluted net (loss) income per common share (usd per share) | $ (0.56) | $ (0.08) | $ (0.76) |
Basic and diluted weighted average common shares outstanding (shares) | 19,089,402 | 19,667,891 | 20,210,260 |
Cash dividends declared per common share (usd per share) | $ 0.5 | $ 0.5 | $ 0.5 |
Wireless | |||
Revenue: | |||
Total revenue | $ 88,167 | $ 94,277 | $ 101,188 |
Software | |||
Revenue: | |||
Total revenue | $ 72,122 | $ 75,197 | $ 69,987 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Statement of Comprehensive Income [Abstract] | |||
Net loss | $ (10,765) | $ (1,479) | $ (15,306) |
Other comprehensive (loss) income, net of tax: | |||
Foreign currency translation adjustments | (300) | (49) | 11 |
Other comprehensive (loss) income | (300) | (49) | 11 |
Comprehensive loss | $ (11,065) | $ (1,528) | $ (15,295) |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-In Capital & Accumulated Other Comprehensive Loss | Retained Earnings | 2012 Equity Plan | 2012 Equity PlanCommon Stock | 2012 Equity PlanAdditional Paid-In Capital & Accumulated Other Comprehensive Loss |
Beginning balance (shares) at Dec. 31, 2016 | 20,525,614 | ||||||
Beginning balance at Dec. 31, 2016 | $ 322,087 | $ 2 | $ 104,810 | $ 217,275 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net loss | (15,306) | (15,306) | |||||
Issuance of common stock under the Employee Stock Purchase Plan (shares) | 17,760 | ||||||
Issuance of common stock under the Employee Stock Purchase Plan | 256 | 256 | |||||
Issuance of restricted common stock under the Equity Plan (shares) | 21,296 | 143,394 | |||||
Issuance of restricted common stock under the Equity Plan | 148 | (11) | 159 | $ 0 | $ 0 | ||
Amortization of stock based compensation | 3,688 | 3,688 | |||||
Cash dividends declared | (10,332) | (10,332) | |||||
Common stock repurchase program (shares) | (572,550) | ||||||
Common stock repurchase program | (10,023) | (10,023) | |||||
Ending balance (shares) at Dec. 31, 2017 | 20,135,514 | ||||||
Ending balance at Dec. 31, 2017 | 290,529 | $ 2 | 98,731 | 191,796 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net loss | (1,479) | (1,479) | |||||
Adjustment to beginning balance due to adoption of ASC 606 and related tax impact | 4,944 | (166) | 5,110 | ||||
Issuance of common stock under the Employee Stock Purchase Plan (shares) | 20,120 | ||||||
Issuance of common stock under the Employee Stock Purchase Plan | 247 | 247 | |||||
Issuance of restricted common stock under the Equity Plan (shares) | 24,989 | 199,991 | |||||
Issuance of restricted common stock under the Equity Plan | 0 | 0 | |||||
Amortization of stock based compensation | 4,954 | 4,954 | |||||
Purchase of common stock for tax withholding (shares) | (62,432) | ||||||
Purchase of common stock for tax withholding | (976) | (976) | |||||
Cash dividends declared | (10,133) | (10,133) | |||||
Common stock repurchase program (shares) | (929,116) | ||||||
Common stock repurchase program | (13,483) | (13,483) | |||||
Ending balance (shares) at Dec. 31, 2018 | 19,389,066 | ||||||
Ending balance at Dec. 31, 2018 | 274,554 | $ 2 | 89,258 | 185,294 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net loss | (10,765) | (10,765) | |||||
Issuance of common stock under the Employee Stock Purchase Plan (shares) | 23,299 | ||||||
Issuance of common stock under the Employee Stock Purchase Plan | 264 | 264 | |||||
Issuance of restricted common stock under the Equity Plan (shares) | 32,145 | 233,507 | |||||
Issuance of restricted common stock under the Equity Plan | 154 | 154 | $ 0 | $ 0 | |||
Amortization of stock based compensation | 3,643 | 3,643 | |||||
Purchase of common stock for tax withholding (shares) | (74,049) | ||||||
Purchase of common stock for tax withholding | (1,017) | (1,017) | |||||
Cash dividends declared | (9,864) | (9,864) | |||||
Common stock repurchase program (shares) | (532,354) | ||||||
Common stock repurchase program | (6,575) | (6,575) | |||||
Ending balance (shares) at Dec. 31, 2019 | 19,071,614 | ||||||
Ending balance at Dec. 31, 2019 | $ 250,094 | $ 2 | $ 85,273 | $ 164,819 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Cash flows from operating activities: | |||
Net loss | $ (10,765) | $ (1,479) | $ (15,306) |
Adjustments to reconcile net (loss) income to net cash provided by operating activities: | |||
Depreciation, amortization and accretion | 9,249 | 10,769 | 11,624 |
Goodwill impairment | 8,849 | 0 | 0 |
Deferred income tax (benefit) expense | (3,253) | (1,692) | 25,390 |
Stock based compensation | 3,643 | 4,954 | 3,688 |
Provisions for doubtful accounts, service credits, adjustments of non-cash transaction taxes and other | 694 | 1,922 | 222 |
Changes in assets and liabilities: | |||
Accounts receivable | 964 | (915) | (9,648) |
Prepaid expenses and other assets | 2,913 | (646) | 244 |
Accounts payable, accrued liabilities and other | (643) | (1,732) | (3,278) |
Deferred revenue | 42 | (866) | 2,579 |
Net cash provided by operating activities | 11,693 | 10,315 | 15,515 |
Cash flows from investing activities: | |||
Purchases of property and equipment | (4,837) | (5,915) | (9,214) |
Purchase of short-term investments | (59,385) | (3,911) | (3,957) |
Maturity of short-term investments | 34,000 | 4,000 | 4,000 |
Net cash used in investing activities | (30,222) | (5,826) | (9,171) |
Cash flows from financing activities: | |||
Cash distributions to stockholders | (9,819) | (10,064) | (15,234) |
Purchase of common stock (including commissions) | (6,575) | (13,483) | (10,023) |
Proceeds from issuance of common stock under the Employee Stock Purchase Plan | 258 | 247 | 256 |
Purchase of common stock for tax withholding on vested equity awards | (1,017) | (976) | 0 |
Net cash used in financing activities | (17,153) | (24,276) | (25,001) |
Effect of exchange rate on cash | (300) | (49) | 11 |
Net decrease in cash and cash equivalents | (35,982) | (19,836) | (18,646) |
Cash and cash equivalents, beginning of period | 83,343 | 103,179 | 121,825 |
Cash and cash equivalents, end of period | 47,361 | 83,343 | 103,179 |
Supplemental disclosure: | |||
Income taxes paid | $ 901 | $ 1,061 | $ 2,620 |
Organization and Significant Ac
Organization and Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES | ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES Spok, Inc., a wholly owned subsidiary of Spok Holdings, Inc. (NASDAQ: SPOK) ("Spok" or the "Company"), is proud to be 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. We offer a focused suite of unified clinical communication 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, personal digital assistants and personal computers. We also offer voice mail, personalized greetings, 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 mission clinical communications. 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 compliment the market focus of our wireless services outlined above. Basis of Presentation The accompanying 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 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 Consolidated Financial Statements include all adjustments and accruals that are necessary for the presentation of the results of all 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 2, "Recent and Pending Accounting Standards" and Note 4, "Leases." Amounts shown on the consolidated statements 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. These items are shown separately on the consolidated statements of operations within operating expenses to the extent that they are considered material for the periods presented. The Company adopted ASC 606 on January 1, 2018. Periods prior to January 1, 2018 reflect accounting under ASC 605, "Revenue Recognition" and have not been adjusted for the adoption of ASC 606. Use of Estimates The preparation of these 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, 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. Revenue Recognition The majority of our revenues are derived from short-term contracts related to the sale of wireless paging services and software solutions. Our arrangements exist primarily with customers in the healthcare market and to a lesser extent State and Federal governments, as well as large enterprise businesses. Under the typical payment terms of our software contracts customers will normally pay a material amount of the contract price immediately upon execution of the contract. The remaining payments are required when product is delivered, when services begin and, to a lesser extent, when services are completed. Wireless services are generally billed as incurred on a monthly basis. Our contracts will generally result in billings in excess of revenue recognized, which we present as deferred revenues on the Consolidated Balance Sheets, primarily due to the receipt of payment in advance of product or services being provided. Amounts billed and due from our customers are classified as accounts receivable on the Consolidated Balance Sheets. At times, we may have contracts which require us to perform work or provide products prior to billing which will generally result in revenue recognized in excess of billings. This excess is presented as unbilled receivables in the Notes to the Consolidated Financial Statements. We generally do not have transactions that include a significant financing component (whether payments are made in advance or in arrears) as our contracts typically take less than 12 months to complete once started. We would not adjust the total consideration for the effects of a significant financing component if we anticipate, at contract inception, that the period between when we transfer a promised good or service to a customer and when the customer pays for that good or service will be one year or less. We account for a contract when: (1) both parties have approved the contract through mutually signed agreements but at times may be done through other methods such as purchase orders or master agreements; (2) the rights of the parties have been identified; (3) payment terms have been identified; (4) the contract has commercial substance; and (5) collectability of consideration is probable. We also evaluate whether two or more contracts should be combined and accounted for as a single contract. In our evaluation, we consider criteria such as, but not limited to, whether: (1) the contracts are negotiated as a package with a single commercial objective; (2) the amount of consideration to be paid in one contract is dependent on the price or performance of another contract; and (3) some or all of the goods or services promised in the contracts are a single performance obligation. Should we consider contracts related, we would account for those contracts as if they were a single contract. Evaluating whether two or more contracts should be combined and accounted for as a single contract requires significant judgment. In the aggregate, a decision to combine a group of contracts could significantly impact the amount of revenue and profit recorded in a given period. We review each contract to determine whether to account for the various promises as one or more performance obligations. The assessment and determination of performance obligations for a given contract requires significant judgment. Wireless service contracts are generally considered to be a single promise and therefore accounted for as a single performance obligation. Contracts which include goods or services related to our software solutions are generally sold with multiple promises and therefore will often include multiple performance obligations. Material performance obligations related to the sale of our software solutions include software licenses, professional services, hardware and maintenance, of which professional services and maintenance are generally considered a series of performance obligations. More often than not, total consideration will equate to the stated value on the contract taking into consideration any period or term over which services are to be provided, if applicable. However, we could have contracts in which variable consideration is present. It is common for our contracts which include wireless services to contain customer penalties if rental pagers are not returned and fees for usage of services in excess of the contractually allotted amount for a given period. It is also common for our contracts that include professional services to include travel related costs. These are costs which we incur in the normal course of delivering professional services and are generally billable to the customer based on our incurred expenses. These elements of variable consideration are fully constrained when an agreement is initially executed and are generally not considered estimable until the penalties, fees or costs have been incurred or are otherwise known. We include estimated amounts in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved. Estimating variable consideration requires significant judgment and our assessment includes all relevant information that is reasonably available to us including historical, current and forecasted information. We have elected to exclude from revenue, all amounts collected on behalf of third parties, and therefore, items such as sales and use tax are excluded from our calculation of the total transaction price. If a contract is separated into more than one performance obligation we allocate the total transaction price to each performance obligation proportionately based on the estimated relative standalone selling price ("SSP") of the promised goods or services underlying each performance obligation. We rarely sell goods or services with readily observable standalone sales, however, if we do, the observable standalone sales are used to determine the SSP. In most cases, we must estimate the relative SSP which requires significant judgment and estimates. In instances where SSP is not directly observable we determine the SSP using information that may include contractually stated prices, market conditions, costs, renewal contracts, list prices and other observable inputs. A discount is present if the total transaction price is less than the sum of the estimated SSPs of the goods or services promised in the contract. Discounts are generally allocated proportionately based on the relative SSP of the identified performance obligations for a given contract. 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. This is a significant area of judgment as it requires an estimate at completion (“EAC”) for each contract. Our initial EAC is primarily based on prior experience also taking into consideration any specific facts and circumstances for a given contract. As projects progress, the EAC is periodically updated and reviewed to ensure the timing of revenue recognition is appropriate. The creation, maintenance and review of a project's EAC requires significant judgment to determine an appropriate number of hours over which the remaining project is expected to be completed. 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 Intellectual Property (“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. Assessing when transfer of control has occurred requires significant judgment. In most contracts transfer of control for software licenses occurs in a short period of time after a contract has been executed and licenses are made electronically available. Contracts may be modified to account for changes in a project's scope or other customer requirements. Most of our contract modifications are for goods or services that are distinct from the existing contract. In these instances, the contract modification would either be recognized as an entirely new and separate contract or the modification would be treated as if it were a termination of the existing contract and the creation of a new contract including all undelivered goods and services under the previous contract. Revenue would be recognized on a prospective basis and a cumulative catch-up would not be recognized. Incremental Costs of Obtaining a Contract and Costs to Fulfill a Contract Our incremental costs primarily relate to sales commissions. We capitalize commissions and proportionally recognize the related expense to revenue as it is recognized on the underlying performance obligations. Some of these costs may relate to specific future anticipated contracts, specifically future maintenance renewals, which we do not pay commensurate sales commissions on. We amortize commission costs proportionally with revenue, thus it is necessary for us to estimate future revenues when there are future anticipated contracts. We estimate future revenues based on anticipated renewal amounts over an expected useful life (e.g. the period over which we believe the initial sales commissions relate to future anticipated contracts). The expected useful life is based on a review of our product life cycles, customer upgrade patterns and the rate at which customers renew maintenance. Commission expense was $5.0 million , $6.2 million and $5.2 million for the years ended December 31, 2019 , 2018 and 2017 , respectively. Commission expense is classified within the selling and marketing operating expenses category. Leases Operating lease right-of-use (“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, 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. Impairment of Long-Lived Assets, Intangible Assets Subject to Amortization and Goodwill We are required to evaluate the carrying value of our long-lived assets, amortizable intangible assets and goodwill. Amortizable intangible assets include customer-related intangibles that resulted from previous acquisitions. Such intangibles are amortized over periods up to ten years. Quarterly, we assess whether circumstances exist which suggest that the carrying value of long-lived and amortizable intangible assets may not be recoverable. When applicable, we assess the recoverability of the carrying value of our long-lived assets and certain amortizable intangible assets based on estimated undiscounted cash flows to be generated from such assets. In assessing the recoverability of these assets, we forecast estimated enterprise-level cash flows based on various operating assumptions such as revenue forecasted by product line and in-process research and development cost. If the forecast of undiscounted cash flows does not exceed the carrying value of the long-lived and amortizable intangible assets, we record an impairment charge to the extent the carrying value exceeded the fair value of such assets. Goodwill is not amortized but is evaluated for impairment at least annually, or when events or circumstances suggest a potential impairment has occurred. We generally perform this annual impairment test in the fourth quarter of the fiscal year. We evaluate goodwill for impairment between annual tests if indicators of impairment exist. The impairment test involves comparing the fair value of the reporting unit with its carrying value. An impairment charge is recognized for the amount that the carrying value exceeds the reporting unit's fair value. For purposes of the goodwill impairment evaluation, the Company as a whole is considered the reporting unit. The fair value of the reporting unit is estimated under a market based approach using the fair value of the Company's common stock. The estimated fair value requires significant judgments, including timing and appropriateness of the price of common stock used (e.g. point-in-time application, simple moving average, exponential moving average), as well as application of an estimated control premium. The estimated control premium is based on a review of current and past market information published by a third-party resource. Based on our assessment during the fourth quarter of 2019, the estimated fair value exceeded the carrying value of the reporting unit and, therefore, an impairment existed. For additional details refer to Note 6, "Goodwill and Intangible Assets, Net." We did no t record any impairment of long-lived assets or definite-lived intangible assets for the years ended December 31, 2019 , 2018 and 2017 . Accounts Receivable Allowances Our two most significant allowance accounts are: an allowance for doubtful accounts and an allowance for service credits. Provisions for these allowances are recorded on a monthly basis and are included as a component of general and administrative expenses, respectively. Estimates are used in determining the allowance for doubtful accounts and are based on historical collection experience and current and forecasted trends, as well as known specific collection risks. In determining these estimates, we review historical write-offs, including comparisons of write-offs to provisions for doubtful accounts. We compare the ratio of the allowance to gross receivables to historical levels, and monitor amounts collected and related statistics. We write off receivables when they are deemed uncollectible. While write-offs of customer accounts have historically been within our expectations and the provisions established, we cannot guarantee that the future write-off experience will be consistent with historical experience, which could result in material differences when compared to the allowance for doubtful accounts and related provisions. From time to time, we grant service credits for customer retention purposes or when there is an adjustment in the scope of work. The allowance for service credits related provisions are based on historical credit percentages, current credit and aging trends, historical actual payment trends and actual credit experience. We analyze our past credit experience over several time frames. Using this analysis along with current operational data, including existing experience of credits issued and the time frames in which credits are issued, we establish an appropriate allowance for service credits. This allowance also reduces accounts receivable for lost and non-returned pagers to the expected realizable amounts and for free wireless services. While credits issued have been within our expectations and the provisions established, we cannot guarantee that future credit experience will be consistent with historical experience, which could result in material differences when compared to the allowance for service credits and maintenance related provisions. Inventory Inventories are stated at the lower of cost or net realizable value. Cost is computed using a weighted average cost approach which averages the prices at which goods are purchased from vendors. We evaluate our ending inventories for shrinkage and estimated obsolescence. Any shrinkage identified is written off to cost of goods sold in the period in which the shrinkage is identified. Further, we assess the impact of changing technology on our inventories and we write off inventories that are considered obsolete in the period in which the analysis takes place. Inventory consists primarily of finished goods. We do not account for inventory as work-in-process or raw materials as any such inventory would be immaterial to the consolidated financial statements. Property and Equipment Property and equipment are reported at cost and are depreciated using the straight-line method based on estimated useful lives which range from one to five years. Transmitter assets are grouped into tranches based on our transmitter decommissioning forecast and are depreciated using the group life method on a straight-line basis. Depreciation expense is determined by the expected useful life of each tranche of the underlying transmitter assets. The expected useful life is based on our forecasted usage of those assets and their retirement over time and aligns the useful lives of these transmitter assets with their planned removal from service. Disposals are charged against accumulated depreciation with no gain or loss recognized. This rational and systematic method matches the underlying usage of these assets to the underlying revenue that is generated from these assets. Depreciation expense for these assets is subject to change based upon revisions in the timing of transmitter deconstruction resulting from our long-range planning and network rationalization process. Asset Retirement Obligations We recognize liabilities and corresponding assets for future obligations associated with the retirement of assets. We have paging equipment assets, principally transmitters, which are located on leased locations. The underlying leases generally require the removal of equipment at the end of the lease term; therefore, a future obligation exists. Asset retirement costs are reflected in paging equipment assets with depreciation expense recognized over the estimated lives, which range between one and five years. The asset retirement costs and the corresponding liabilities that have been recorded to date generally relate to either current plans to consolidate networks or to the removal of assets at a future terminal date. When an asset retirement obligation arises, the liabilities and corresponding assets are recorded at their present value using a discounted cash flow approach and the liabilities are accreted using the interest method. The recognition of an asset retirement obligation requires that management make numerous assumptions regarding such factors as the cost and timing of deconstruction; the credit-adjusted risk-free rate to be used; inflation rates; and future advances in technology. The fair value estimate of contractor fees to remove each asset is assumed to escalate by 2% each year through the terminal date. The total estimated liability is based on the estimated future value of those costs and the timing of deconstruction. We believe these estimates are reasonable at the present time, but we can give no assurance that changes in technology, our financial condition, the economy or other factors would not result in higher or lower asset retirement obligations. Any variations from our estimates would generally result in a change in the assets and liabilities in equal amounts, and operating results would differ in the future by any difference in depreciation expense and accretion expense (see Note 5 , "Consolidated Financial Statement Components", and Note 7 , "Asset Retirement Obligations", for additional details). Income Taxes We file a consolidated U.S. Federal income tax return and income tax returns in state, local and foreign jurisdictions as required. The provision for current income taxes is calculated and accrued on income and expenses expected to be included in current year U.S. and foreign income tax returns. The provision for current income taxes may also include interest, penalties and an estimated amount reflecting uncertain tax positions. Deferred income tax assets and liabilities are computed based on temporary differences between the financial statement values and the tax bases of assets and liabilities including net operating loss and tax credit carryforwards at the enacted tax rates expected to apply to taxable income when taxes are actually paid or recovered. Changes in deferred income tax assets and liabilities are included as a component of deferred income tax expense. Deferred income tax assets represent amounts available to reduce future income taxes payable. We provide a valuation allowance when we consider it “more likely than not” (greater than a 50% probability) that a deferred income tax asset will not be fully recovered. Our valuation allowance assessment includes an evaluation of our history of generating taxable income and estimates of future taxable income, including when applicable the use of appropriate tax planning strategies. Assets and liabilities are established for uncertain tax positions taken or positions expected to be taken in income tax returns when such positions fail to meet the “more likely than not” threshold based on the technical merits of the positions. We assess whether previously unrecognized tax benefits may be recognized when the tax position is (1) more likely than not of being sustained based on its technical merits, (2) effectively settled through examination, negotiation or litigation, or (3) settled through actual expiration of the relevant tax statutes We had no uncertain tax positions for the periods ended December 31, 2019 and 2018. (see Note 9 , "Income Taxes," for additional details). Research and Development In accordance with ASC 985-20, Software to be Sold, Leased, or Marketed , certain software development costs are charged to operations and expensed as incurred until technological feasibility has been established. Material costs incurred after technological feasibility is established and before the product is ready for general release are capitalized and amortized on a straight-line basis over the estimated remaining economic life of the product or the ratio of current revenues to total projected product revenues, whichever is greater. To date, the time between technological feasibility and general release to the public has been extremely short and consequently expenses available for capitalization have been immaterial. Accordingly, all research and developments costs incurred to date, accounted for in accordance with ASC 985-20, have been expensed as incurred. In accordance with ASC 350-40, Internal-use Software , certain software development costs are capitalized while in the application development stage related to software developed for internal use or software sold in a SaaS arrangement. This includes certain development costs for Spok Go. All other costs incurred during the preliminary project stage or the post implementation stage, are expensed as incurred. To date, we have not incurred material costs that would qualify for capitalization. We anticipate certain costs will begin to qualify for capitalization beginning in early 2020 and these costs are likely to be material. Shipping and Handling Costs We incur shipping and handling costs to send and receive messaging devices and other equipment to/from our customers. Amounts billed to customers related to shipping and handling are classified as revenue and the Company's shipping and handling costs are classified as cost of revenue. These costs are expensed as incurred. Advertising Expenses Advertising costs are charged to operations when incurred. Advertising costs are classified as selling and marketing expenses. Advertising expenses were $1.7 million , $2.4 million and $2.3 million for the years ended December 31, 2019 , 2018 , and 2017 , respectively. Stock Based Compensation We account for share-based payments to employees, including restricted stock units ("RSUs"), restricted common stock ("restricted stock") and the option to purchase common stock under the Employee Stock Purchase Plan ("ESPP") based on their fair value and the estimated number of shares we expect will vest based on the performance metrics associated with the award, if applicable. Fair value is measured based on the closing fair market value of the Company's common stock on the date of grant. Compensation expense is recognized on a straight-line basis over the requisite service period. Forfeitures and withdrawals are accounted for on an as incurred basis. Changes in our estimates of the expected attainment of performance targets are reflected in the amount of compensation expense that we recognize for the related instruments during the interim reporting period when the change in estimate is determined and may cause the amount of compensation expense that we record for each period to vary. Further information regarding stock based compensation can be found in Note 8 , "Stockhold |
Recent and Pending Accounting S
Recent and Pending Accounting Standards | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
RECENT AND PENDING ACCOUNTING STANDARDS | RECENT AND PENDING ACCOUNTING STANDARDS Recently Adopted Leases - ASC 842 "Leases" 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. During the quarter ended June 30, 2019, we adjusted our opening balance to record the effect of adopting ASC 842 by approximately $0.4 million . As a result, the impact of the adoption of ASC 842 was an increase to assets and liabilities of approximately $17.8 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 the 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 1, "Significant Accounting Policies Update" and Note 4 "Leases." Pending Adoption In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses on Financial Instruments ("CECL") that requires early recognition of credit losses on financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. This guidance is effective for fiscal years beginning after December 15, 2019. While our assessment is on-going, we do not believe the impact will have a material effect on our consolidated financial statements. |
Revenue, Deferred Revenue and P
Revenue, Deferred Revenue and Prepaid Commissions | 12 Months Ended |
Dec. 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 for an additional fixed monthly fee 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 offer exclusive one-way (T5) and two-way (T52) alphanumeric pagers, which are configurable to support un-encrypted or encrypted operation. When configured for encryption, they utilize AES-128 bit encryption, screen locking and remote wipe capabilities. With encryption enabled these new secure paging devices enhance our service offerings to the healthcare community by adding Health Insurance Portability and Accountability Act ("HIPAA") security capabilities to the low cost, highly reliable and availability benefits of paging. (see Item 1. “Business,” 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) and access to when-and-if available software updates. 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 paging, 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. 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. The Company adopted ASC 606 on January 1, 2018. Periods prior to January 1, 2018 reflect accounting under ASC 605, "Revenue Recognition" and have not been adjusted for the adoption of ASC 606. The following table presents our revenues disaggregated by revenue type: For the Twelve Months Ended December 31, (Dollars in thousands) 2019 2018 2017 Revenue - wireless Paging revenue 85,067 90,570 97,296 Product and other revenue 3,100 3,707 3,892 Total wireless revenue 88,167 94,277 101,188 Revenue - software License 8,950 13,042 9,541 Services 19,189 18,091 17,630 Equipment 3,618 4,995 4,147 Operations revenue $ 31,757 $ 36,128 $ 31,318 Maintenance revenue $ 40,365 $ 39,069 $ 38,669 Total software revenue $ 72,122 $ 75,197 $ 69,987 Total revenue $ 160,289 $ 169,474 $ 171,175 The Company is currently structured as a single operating (and reportable) segment, a clinical communication and collaboration business. The U.S. was the only country that accounted for more than 10% of the Company’s total revenue for the years ended December 31, 2019 , 2018 and 2017 . Revenue generated in the U.S. and internationally consisted of the following for the periods stated: For the Twelve Months Ended December 31, (Dollars in thousands) 2019 2018 2017 Revenue United States $ 154,766 $ 164,558 $ 166,790 International 5,523 4,916 4,385 Total revenue $ 160,289 $ 169,474 $ 171,175 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 twelve months ended December 31, 2019 are as follows: (Dollars in thousands) December 31, 2018 Additions Revenue Recognized December 31, 2019 Deferred Revenue $ 26,582 $ 70,684 $ (70,645 ) $ 26,621 During the twelve months ended December 31, 2019 , the Company recognized $25.3 million of revenue 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 to obtaining a contract. As such, these costs are amortized over the estimated period of benefit. Changes in the balance of total prepaid commissions during the twelve months ended December 31, 2019 are as follows: (Dollars in thousands) December 31, 2018 Additions Commissions Recognized December 31, 2019 Prepaid Commissions $ 2,394 $ 5,031 $ (4,994 ) $ 2,431 Prepaid commissions are included within prepaid expenses on the Consolidated Balance Sheets and commissions expense is included within Selling and marketing on the Consolidated Statement of Operations. Remaining Performance Obligations The balance of remaining performance obligations at December 31, 2019 was $50.6 million . We expect to recognize approximately $36.5 million of these remaining performance obligations over the next 12 months, with the remaining balance recognized thereafter. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
LEASES | Leases We have operating lease arrangements for corporate offices, cellular towers, storage units and small building spaces. 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 Consolidated Statement of Operations. The following table presents lease costs disaggregated by type: For the Year Ended December 31, (Dollars in thousands) 2019 Operating lease cost $ 5,823 Short-term lease cost 8,281 Short-term lease cost - related party (1) 3,589 Total lease cost $ 17,693 Supplemental Disclosure: Cash paid for amounts included in the measurement of lease liabilities - operating leases $ 1,421 Weighted-average remaining lease term - operating leases 5.60 years Weighted-average discount rate - operating leases 5.45 % (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 12 , "Related Parties" for additional details. Maturities of lease liabilities as of December 31, 2019 were as follows: For the Year Ended December 31, (Dollars in thousands) 2020 5,447 2021 4,398 2022 2,765 2023 1,860 2024 1,409 Thereafter 3,824 Total future lease payments 19,703 Imputed interest (2,691 ) Total $ 17,012 |
Consolidated Financial Statemen
Consolidated Financial Statements' Components | 12 Months Ended |
Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
CONSOLIDATED FINANCIAL STATEMENTS' COMPONENTS | CONSOLIDATED FINANCIAL STATEMENTS' COMPONENTS Depreciation, Amortization and Accretion Depreciation, amortization and accretion consisted of the following for the periods stated: For the Year Ended December 31, (Dollars in thousands) 2019 2018 2017 Depreciation Leasehold improvements $ 63 $ 232 $ 234 Asset retirement costs (766 ) (300 ) (388 ) Paging and computer equipment 6,526 7,397 8,024 Furniture, fixtures and vehicles 374 398 306 Total depreciation 6,197 7,727 8,176 Amortization 2,500 2,500 2,886 Accretion 552 542 562 Total depreciation, amortization and accretion expense $ 9,249 $ 10,769 $ 11,624 Accounts Receivable, net Accounts receivable was recorded net of an allowance of $1.3 million and $1.7 million for the years ended December 31, 2019 and 2018 , respectively. Accounts receivable, net includes $6.4 million and $8.7 million of unbilled receivables for the years ended December 31, 2019 and 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 year ended December 31, 2019 . Property and Equipment, net Property and equipment, net consisted of the following for the periods stated: Useful Life For the Year Ended December 31, (Dollars in thousands) 2019 2018 Leasehold improvements lease term $ 3,620 $ 4,139 Asset retirement costs 1-5 1,922 2,021 Paging and computer equipment 1-5 96,562 98,401 Furniture, fixtures and vehicles 3-5 3,716 4,353 Total property and equipment 105,820 108,914 Accumulated depreciation (97,820 ) (98,560 ) Total property and equipment, net $ 8,000 $ 10,354 For purposes of assessing our asset retirement costs, we completed a review of the estimated useful life of our transmitter assets during the fourth quarter of 2019 (that are part of paging and computer equipment). This review was based on the results of our long-range planning and network rationalization process and indicated that the expected useful life of the last tranche of the transmitter assets was no longer appropriate. As a result of that review, the expected useful life of the final tranche of transmitter assets was extended from 2023 to 2024. This change resulted in a revision of the expected future depreciation expense for the transmitter assets and an immaterial impact to the consolidated financial statements beginning in 2020. We believe these estimates remain reasonable at the present time, but we can give no assurance that changes in technology, customer usage patterns, our financial condition, the economy or other factors would not result in changes to our transmitter decommissioning plans. Any further variations from our estimates could result in a change in the expected useful lives of the underlying transmitter assets and operating results could differ in the future by any difference in depreciation expense. The extension of the depreciable life was accounted for as a change in accounting estimate. |
Goodwill and Intangible Assets,
Goodwill and Intangible Assets, Net | 12 Months Ended |
Dec. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND INTANGIBLE ASSETS, NET | GOODWILL AND INTANGIBLE ASSETS, NET Goodwill During the quarter ended December 31, 2019 , we performed our annual assessment of goodwill. Based on our assessment, using data as of October 31, 2019, the carrying value of the reporting unit exceeded the estimated fair value of the Company which indicated an impairment existed. For purposes of the goodwill impairment assessment, the Company as a whole is considered the reporting unit. The fair value of the reporting unit is estimated under a market based approach using the fair value of the Company's common stock. The estimated fair value requires significant judgments, including timing and appropriateness of the price of common stock used (e.g., point-in-time application, simple moving average, exponential moving average), as well as application of an estimated control premium. The estimated control premium is based on a review of current and past market information published by a third-party resource. While a formal impairment assessment is performed annually, the Company monitors its business environment for potential triggering events on a quarterly basis. There is potential for further impairment charges being recognized in future periods based on these ongoing assessments. The change in goodwill for the year ended December 31, 2019 was as follows: (Dollars in thousands) (Dollars in thousands) Goodwill at January 1, 2019 $ 133,031 Impairment (8,849 ) Goodwill at December 31, 2019 $ 124,182 Intangible Assets Amortizable intangible assets at December 31, 2019 and 2018 related primarily to customer relationships. Such intangible assets are being amortized over a period of ten years. We have no t recorded an impairment of our intangible assets during the years ended December 31, 2019 , 2018 and 2017 . The net consolidated balance of intangible assets consisted of the following at December 31, 2019 and 2018 : As of December 31, 2019 2018 (Dollars in thousands) Useful Life (In Years) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Customer relationships 10 $ 25,002 $ (22,085 ) $ 2,917 $ 25,002 $ (19,585 ) $ 5,417 Estimated amortization of intangible assets for future periods was as follows: For the year ending December 31, (Dollars in thousands) 2020 2,500 2021 417 Total $ 2,917 |
Asset Retirement Obligations
Asset Retirement Obligations | 12 Months Ended |
Dec. 31, 2019 | |
Asset Retirement Obligation Disclosure [Abstract] | |
ASSET RETIREMENT OBLIGATIONS | ASSET RETIREMENT OBLIGATIONS The components of the changes in the asset retirement obligation liabilities for the periods stated were as follows: (Dollars in thousands) Short-Term Portion Long-Term Portion Total Balance at January 1, 2018 $ 234 $ 7,174 $ 7,408 Accretion (91 ) 633 542 Amounts paid (154 ) — (154 ) Additions — 55 55 Reductions (185 ) (1,119 ) (1,304 ) Reclassifications 230 (230 ) — Balance at December 31, 2018 34 6,513 6,547 Accretion 39 513 552 Amounts paid (177 ) — (177 ) Additions — 32 32 Reductions 14 (817 ) (803 ) Reclassifications 180 (180 ) — Balance at December 31, 2019 $ 90 $ 6,061 $ 6,151 Increases and reductions other than accretion, reclassification and amounts paid primarily relate to changes in estimates 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 $7.6 million . Additional information regarding asset retirement costs and accretion expense can be found in Note 5 , "Consolidated Financial Statements' Components." |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 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 December 31, 2019 and 2018 , we had no stock options outstanding. At December 31, 2019 and 2018 , there were 19,071,614 and 19,389,066 shares of common stock outstanding, respectively, and no shares of preferred stock outstanding. Dividends For each of the three years ending December 31, 2019 , 2018 and 2017 our Board of Directors declared cash dividends of $0.50 per share of our outstanding common stock. An immaterial amount of dividends declared were related to unvested RSUs and unvested shares of restricted stock, which are accrued for and paid when the applicable vesting conditions are met. Accrued cash dividends on forfeited RSUs and restricted stock are also forfeited. Cash dividends paid as disclosed in the statements of cash flows for the years ended December 31, 2019 , 2018 and 2017 included previously declared cash dividends on vested RSUs and on shares of vested restricted stock issued to non-executive members of our Board of Directors. On February 26, 2020, our Board of Directors declared a regular quarterly cash dividend of $0.125 per share of common stock, with a record date of March 16, 2020, and a payment date of March 30, 2020. This cash dividend of approximately $2.4 million is expected to be paid from available cash on hand. Common Stock Repurchase Program On July 31, 2008, our Board of Directors approved a program to repurchase our common stock in the open market. This program has been extended at various times. 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 Company fully exhausted the repurchase authority in September 2019. We use available cash on hand and net cash provided by operating activities to fund the common stock repurchase program. This repurchase authority allows us, at management’s discretion, to selectively repurchase shares of our common stock from time to time in the open market depending upon market price and other factors. Repurchased shares of our common stock were accounted for as a reduction to common stock and additional paid-in-capital in the period in which the repurchase occurred. All repurchased shares of common stock are returned to the status of authorized, but unissued, shares of the Company. Common stock purchased in 2019 , 2018 and 2017 (excluding commission and the purchase of common stock for tax withholdings) was as follows: For the Three Months Ended Shares Purchased Amount Shares Purchased Amount Shares Purchased Amount (dollars in thousands, except for shares purchased) 2019 2018 2017 March 31, 131,012 $ 1,806 127,792 $ 1,922 — $ — June 30, — — 501,782 7,520 572,550 10,000 September 30, 401,342 4,749 36,542 558 — — December 31, — — 263,000 3,446 — — Total 532,354 $ 6,555 929,116 $ 13,446 572,550 $ 10,000 Net Loss per Common Share Basic net loss per common share is computed on the basis of the weighted average common shares outstanding. Diluted net loss 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 unvested and outstanding equity awards. The components of basic and diluted net loss per common share were as follows for the periods stated: For the Year Ended December 31, (in thousands, except for share and per share amounts) 2019 2018 2017 Numerator: Net loss $ (10,765 ) $ (1,479 ) $ (15,306 ) Denominator: Basic and diluted weighted average outstanding shares of common stock 19,089,402 19,667,891 20,210,260 Basic and diluted net loss per common share $ (0.56 ) $ (0.08 ) $ (0.76 ) For the years ended December 31, 2019 , 2018 and 2017 , the following securities were not included in the calculation of diluted shares outstanding as the effect would have been anti-dilutive: For the Year Ended December 31, 2019 2018 2017 Restricted stock units 189,862 178,279 90,665 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 RSU's generally vest over a three -year performance period upon successful completion of the performance objectives. Non-contingent RSU's 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, 2017 through December 31, 2019 : Activity Total equity securities available at January 1, 2017 1,246,939 Less: RSU and restricted stock awarded to eligible employees, net of forfeitures (106,281 ) Total equity securities available at December 31, 2017 1,140,658 Less: RSU and restricted stock awarded to eligible employees, net of forfeitures (236,221 ) Total equity securities available at December 31, 2018 904,437 Less: RSU and restricted stock awarded to eligible employees, net of forfeitures (257,957 ) Total equity securities available at December 31, 2019 646,480 The following table details activities with respect to outstanding RSUs and restricted stock for the year ended December 31, 2019 : Shares Weighted- Unvested at January 1, 2019 404,325 $ 17.27 Granted 388,321 13.27 Vested (242,856 ) 17.48 Forfeited (130,364 ) 15.49 Unvested at December 31, 2019 419,426 $ 14.00 Of the 419,426 unvested RSUs and restricted stock outstanding at December 31, 2019 , 273,788 RSUs include contingent performance requirements for vesting purposes. At December 31, 2019, there was $3.1 million of unrecognized net compensation cost related to RSUs and restricted stock, which is expected to be recognized over a weighted average period of 1.60 years. Employee Stock Purchase Plan In 2016, our Board of Directors adopted the 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 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 year ended December 31, 2019 , employees purchased 23,299 shares of common stock for a total price of $0.3 million . For the year ended December 31, 2018, employees purchased 20,120 shares of common stock for a total price of $0.2 million . The following table summarizes the activities under the ESPP from January 1, 2017 through December 31, 2019 : Activity Total ESPP equity securities available at January 1, 2017 246,039 Less: common stock purchased by eligible employees (17,760 ) Total ESPP equity securities available at January 1, 2018 228,279 Less: common stock purchased by eligible employees (20,120 ) Total ESPP equity securities available at January 1, 2019 208,159 Less: common stock purchased by eligible employees (23,299 ) Total ESPP equity securities available at December 31, 2019 184,860 Amounts withheld from participants will be classified as a liability on the balance sheet until funds are used to purchase shares. This liability amount is immaterial to the consolidated financial statements. Stock-Based Compensation Expense Compensation expense associated with common stock, RSUs and restricted stock was recognized based on the grant date fair value of the instruments, over the instruments’ vesting period. The following table reflects stock based compensation expense for the periods stated: For the Year Ended December 31, (Dollars in thousands) 2019 2018 2017 Performance-based RSUs $ 1,434 $ 2,127 $ 1,762 Time-based RSUs and restricted stock 2,119 2,756 1,862 ESPP 90 71 64 Total stock based compensation $ 3,643 $ 4,954 $ 3,688 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The Tax Cuts and Jobs Act of 2017 ("2017 Tax Act") was signed into law on December 22, 2017. The 2017 Tax Act significantly revised the U.S. corporate income tax by, among other things, lowering the statutory corporate tax rate from 35% to 21%, eliminating certain deductions, imposing a mandatory one-time tax on accumulated earnings of foreign subsidiaries, introducing new tax regimes, and changing how foreign earnings are subject to U.S. tax. The 2017 Tax Act also enhanced and extended through 2026 the option to claim accelerated depreciation deductions on qualified property. We have completed our determination of the accounting implications of the 2017 Tax Act on our tax accruals. The significant components of our income tax (benefit) expense attributable to current operations for the periods stated were as follows: For the Year Ended December 31, (Dollars in thousands) 2019 2018 2017 (Loss) income before income tax (benefit) expense $ (13,423 ) $ (2,185 ) $ 11,559 Current: Federal tax $ — $ — $ 199 State tax 582 838 1,006 Foreign tax 13 148 270 Total current 595 986 1,475 Deferred: Federal tax (2,121 ) (1,467 ) 26,348 State tax (1,239 ) (532 ) (787 ) Foreign tax 107 307 (171 ) Total deferred (3,253 ) (1,692 ) 25,390 Total income tax (benefit) expense $ (2,658 ) $ (706 ) $ 26,865 Foreign income before income tax (benefit) expense is immaterial to consolidated income before income tax (benefit) expense. The following table summarizes the principal elements of the difference between the United States Federal statutory rate of 21% and our effective tax rate: Effective tax rate reconciliation 2019 2018 2017 (Dollars in thousands) (Loss) income before income tax (benefit) expense $ (13,423 ) $ (2,185 ) $ 11,559 Income taxes computed at the Federal statutory rate $ (2,819 ) 21.0 % $ (459 ) 21.0 % $ 4,046 35.0 % State income taxes, net of Federal benefit (567 ) 4.2 % 306 (14.0 )% 472 4.1 % Goodwill impairment 2,243 (16.7 )% — — % — — % Impact of 2017 Tax Act — — % — — % 24,235 209.7 % Research and development and other tax credits (1,790 ) 13.3 % (1,144 ) 52.4 % (1,775 ) (15.4 )% Excess executive compensation 322 (2.4 )% 281 (12.9 )% — — % Other (47 ) 0.4 % 310 (14.2 )% (113 ) (1.0 )% (Benefit from) provision for income taxes $ (2,658 ) 19.8 % $ (706 ) 32.3 % $ 26,865 232.4 % The anticipated effective income tax rate is expected to continue to differ from the Federal statutory rate primarily due to the effect of state income taxes, the benefit of the research and development tax credit, permanent differences between book and taxable income and certain discrete items. The earnings of non-U.S. subsidiaries are deemed to be indefinitely reinvested in non-U.S. operations. The components of deferred income tax assets at December 31, 2019 and 2018 were as follows: December 31, (Dollars in thousands) 2019 2018 Capitalized research and development costs $ 18,605 $ 14,219 Net operating loss carryforward 15,978 18,851 Property and equipment 6,092 5,969 Accrued liabilities, reserves and other expenses 3,718 3,837 Research and development credits 4,140 2,360 Tax credits 1,467 2,141 Stock based compensation 1,600 12 1,739 Other 121 200 Gross deferred income tax assets 51,721 49,316 Deferred income tax liabilities: Intangible assets (2,430 ) (2,711 ) Prepaid and other expenses (308 ) (121 ) Gross deferred income tax liabilities $ (2,738 ) $ (2,832 ) Net deferred income tax assets $ 48,983 $ 46,484 Net Operating Losses As of December 31, 2019 , we had approximately $71.2 million of NOLs available to offset future taxable income. The Federal NOLs begin expiring in 2026 and will fully expire in 2029. We have an immaterial amount of foreign NOLs and tax credits available for future use. Valuation Allowance We assess the recoverability of our deferred income tax assets, which represent the tax benefits of future tax deductions, NOLs and tax credits, by considering the adequacy of future taxable income from all sources, including prudent and feasible tax planning strategies. This assessment is required to determine whether based on all available evidence, it is “more likely than not” (which means a probability of greater than 50%) that all or some portion of the DTAs will be realized in future periods. As of December 31, 2019 and 2018, we believe it is more likely than not that our DTAs will be realized in future periods and thus did not have a valuation allowance. Income Tax Audits The 2017 , 2018 and 2019 Federal and state income tax returns are within the statute of limitations (“SOL”) and are currently not under examination by any Federal or state tax authority. We operate in all states and the District of Columbia and are subject to various state income and franchise tax audits. The states’ SOL varies from three to four years from the later of the due date of the return or the date filed. We usually file our Federal and all state and local income tax returns on or before September 15 of the following year; therefore, the SOL for those states with a three -year SOL is open for calendar years ending 2016 through 2019 , and for the four -year SOL states, the SOL is open for years ending from 2015 through 2019 . |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Contractual Obligations We had no significant commitments and contractual obligations as of December 31, 2019 . Other Commitments We have various LOCs outstanding with multiple state agencies which are considered to be immaterial to the consolidated financial statements. The LOCs typically have one to three -year contract requirements and contain automatic renewal terms. Legal Contingencies We are involved, from time to time, in lawsuits arising in the normal course of business. We believe these pending lawsuits will not have a material adverse impact on our financial position or statement of operations. Operating Leases We have operating leases for office and transmitter locations. Substantially all of these leases have lease terms ranging from one month to five years . We continue to review our office and transmitter locations, and intend to replace, reduce or consolidate leases, where possible. Future minimum lease payments under non-cancelable operating leases at December 31, 2019 were as follows: For the Year Ended December 31, (Dollars in thousands) 2020 $ 6,792 2021 5,056 2022 3,039 2023 1,968 2024 498 Thereafter 217 Total $ 17,570 These leases typically include renewal options and escalation clauses. Where material, we recognize rent expense on a straight-line basis over the lease period. Total rent expense under operating leases for the years ended December 31, 2019 , 2018 and 2017 , was approximately $17.7 million , $17.5 million and $17.7 million , respectively. |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
Dec. 31, 2019 | |
Retirement Benefits [Abstract] | |
EMPLOYEE BENEFIT PLANS | EMPLOYEE BENEFIT PLANS Spok Holdings, Inc. Savings and Retirement Plan The Company has a savings plan in the U.S. that qualifies under Section 401(k) of the Internal Revenue Code ("IRC"). Participating U.S. employees may elect to contribute a percentage of their salary, subject to certain limitations. Matching contributions under the savings plan were approximately $1.6 million for the years ended December 31, 2019 and 2018 and $1.1 million for the year ended December 31, 2017 . |
Related Parties
Related Parties | 12 Months Ended |
Dec. 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. We incurred $3.6 million for the years ended December 31, 2019 and 2018 and $3.8 million for the same period in 2017 of site rent expense from the entity on which the individual serves as a director. These amounts are included in technology operations expenses. |
Selected Quarterly Financial In
Selected Quarterly Financial Information (Unaudited) | 12 Months Ended |
Dec. 31, 2019 | |
Quarterly Financial Information Disclosure [Abstract] | |
SELECTED QUARTERLY FINANCIAL INFORMATION (UNAUDITED) | SELECTED QUARTERLY FINANCIAL INFORMATION (UNAUDITED) Quarterly financial information for the years ended December 31, 2019 and 2018 is summarized below: For the Year Ended December 31, 2019 First Second Third Fourth Quarter (3) (Dollars in thousands except per share amounts) Revenues (1) $ 41,764 $ 39,525 $ 39,453 $ 39,548 Operating income (loss) (1) 1,115 (1,992 ) (2,692 ) (12,239 ) Net income (loss) (1) 742 (670 ) (1,326 ) (9,511 ) Basic and diluted net income (loss) per common share (2) 0.04 (0.03 ) (0.07 ) (0.50 ) For the Year Ended December 31, 2018 First Second Third Fourth Quarter (Dollars in thousands except per share amounts) Revenues (1) $ 43,114 $ 40,628 $ 42,476 $ 43,256 Operating income (loss) (1) 584 (2,346 ) (1,560 ) 149 Net income (loss) (1) 345 (1,172 ) (840 ) 189 Basic and diluted net income (loss) per common share (2) 0.02 (0.06 ) (0.04 ) 0.01 (1) Slight variations in totals are due to rounding. (2) Basic and diluted net income (loss) per common share is computed independently for each period presented. As a result, the sum of the quarterly basic and diluted net income (loss) per common share for the years ended December 31, 2019 and 2018 may not equal the total computed for the year. (3) During the fourth quarter of 2019, the Company recorded a goodwill impairment of $8.8 million . See Note 6 "Goodwill and Intangible Assets, Net" for additional details. |
VALUATION AND QUALIFYING ACCOUN
VALUATION AND QUALIFYING ACCOUNTS | 12 Months Ended |
Dec. 31, 2019 | |
SEC Schedule, 12-09, Valuation and Qualifying Accounts [Abstract] | |
VALUATION AND QUALIFYING ACCOUNTS | SCHEDULE II SPOK HOLDINGS, INC. VALUATION AND QUALIFYING ACCOUNTS Allowance for Doubtful Accounts, Balance at the Charged to Write-offs Balance at the (Dollars in thousands) Year ended December 31, 2019 $ 1,705 $ 1,248 $ (1,660 ) $ 1,293 Year ended December 31, 2018 $ 1,065 $ 2,125 $ (1,485 ) $ 1,705 Year ended December 31, 2017 $ 1,056 $ 1,035 $ (1,026 ) $ 1,065 |
Organization and Significant _2
Organization and Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Business | We offer a focused suite of unified clinical communication 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, personal digital assistants and personal computers. We also offer voice mail, personalized greetings, 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 mission clinical communications. 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 compliment the market focus of our wireless services outlined above. |
Organization and Principles of Consolidation | Basis of Presentation The accompanying 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 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 Consolidated Financial Statements include all adjustments and accruals that are necessary for the presentation of the results of all 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 2, "Recent and Pending Accounting Standards" and Note 4, "Leases." Amounts shown on the consolidated statements 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. These items are shown separately on the consolidated statements of operations within operating expenses to the extent that they are considered material for the periods presented. |
Use of Estimates | Use of Estimates The preparation of these 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, 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. |
Revenue Recognition; Incremental Costs of Obtaining a Contract and Costs to Fulfill a Contract; Shipping and Handling Costs | Shipping and Handling Costs We incur shipping and handling costs to send and receive messaging devices and other equipment to/from our customers. Amounts billed to customers related to shipping and handling are classified as revenue and the Company's shipping and handling costs are classified as cost of revenue. These costs are expensed as incurred. Revenue Recognition The majority of our revenues are derived from short-term contracts related to the sale of wireless paging services and software solutions. Our arrangements exist primarily with customers in the healthcare market and to a lesser extent State and Federal governments, as well as large enterprise businesses. Under the typical payment terms of our software contracts customers will normally pay a material amount of the contract price immediately upon execution of the contract. The remaining payments are required when product is delivered, when services begin and, to a lesser extent, when services are completed. Wireless services are generally billed as incurred on a monthly basis. Our contracts will generally result in billings in excess of revenue recognized, which we present as deferred revenues on the Consolidated Balance Sheets, primarily due to the receipt of payment in advance of product or services being provided. Amounts billed and due from our customers are classified as accounts receivable on the Consolidated Balance Sheets. At times, we may have contracts which require us to perform work or provide products prior to billing which will generally result in revenue recognized in excess of billings. This excess is presented as unbilled receivables in the Notes to the Consolidated Financial Statements. We generally do not have transactions that include a significant financing component (whether payments are made in advance or in arrears) as our contracts typically take less than 12 months to complete once started. We would not adjust the total consideration for the effects of a significant financing component if we anticipate, at contract inception, that the period between when we transfer a promised good or service to a customer and when the customer pays for that good or service will be one year or less. We account for a contract when: (1) both parties have approved the contract through mutually signed agreements but at times may be done through other methods such as purchase orders or master agreements; (2) the rights of the parties have been identified; (3) payment terms have been identified; (4) the contract has commercial substance; and (5) collectability of consideration is probable. We also evaluate whether two or more contracts should be combined and accounted for as a single contract. In our evaluation, we consider criteria such as, but not limited to, whether: (1) the contracts are negotiated as a package with a single commercial objective; (2) the amount of consideration to be paid in one contract is dependent on the price or performance of another contract; and (3) some or all of the goods or services promised in the contracts are a single performance obligation. Should we consider contracts related, we would account for those contracts as if they were a single contract. Evaluating whether two or more contracts should be combined and accounted for as a single contract requires significant judgment. In the aggregate, a decision to combine a group of contracts could significantly impact the amount of revenue and profit recorded in a given period. We review each contract to determine whether to account for the various promises as one or more performance obligations. The assessment and determination of performance obligations for a given contract requires significant judgment. Wireless service contracts are generally considered to be a single promise and therefore accounted for as a single performance obligation. Contracts which include goods or services related to our software solutions are generally sold with multiple promises and therefore will often include multiple performance obligations. Material performance obligations related to the sale of our software solutions include software licenses, professional services, hardware and maintenance, of which professional services and maintenance are generally considered a series of performance obligations. More often than not, total consideration will equate to the stated value on the contract taking into consideration any period or term over which services are to be provided, if applicable. However, we could have contracts in which variable consideration is present. It is common for our contracts which include wireless services to contain customer penalties if rental pagers are not returned and fees for usage of services in excess of the contractually allotted amount for a given period. It is also common for our contracts that include professional services to include travel related costs. These are costs which we incur in the normal course of delivering professional services and are generally billable to the customer based on our incurred expenses. These elements of variable consideration are fully constrained when an agreement is initially executed and are generally not considered estimable until the penalties, fees or costs have been incurred or are otherwise known. We include estimated amounts in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved. Estimating variable consideration requires significant judgment and our assessment includes all relevant information that is reasonably available to us including historical, current and forecasted information. We have elected to exclude from revenue, all amounts collected on behalf of third parties, and therefore, items such as sales and use tax are excluded from our calculation of the total transaction price. If a contract is separated into more than one performance obligation we allocate the total transaction price to each performance obligation proportionately based on the estimated relative standalone selling price ("SSP") of the promised goods or services underlying each performance obligation. We rarely sell goods or services with readily observable standalone sales, however, if we do, the observable standalone sales are used to determine the SSP. In most cases, we must estimate the relative SSP which requires significant judgment and estimates. In instances where SSP is not directly observable we determine the SSP using information that may include contractually stated prices, market conditions, costs, renewal contracts, list prices and other observable inputs. A discount is present if the total transaction price is less than the sum of the estimated SSPs of the goods or services promised in the contract. Discounts are generally allocated proportionately based on the relative SSP of the identified performance obligations for a given contract. 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. This is a significant area of judgment as it requires an estimate at completion (“EAC”) for each contract. Our initial EAC is primarily based on prior experience also taking into consideration any specific facts and circumstances for a given contract. As projects progress, the EAC is periodically updated and reviewed to ensure the timing of revenue recognition is appropriate. The creation, maintenance and review of a project's EAC requires significant judgment to determine an appropriate number of hours over which the remaining project is expected to be completed. 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 Intellectual Property (“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. Assessing when transfer of control has occurred requires significant judgment. In most contracts transfer of control for software licenses occurs in a short period of time after a contract has been executed and licenses are made electronically available. Contracts may be modified to account for changes in a project's scope or other customer requirements. Most of our contract modifications are for goods or services that are distinct from the existing contract. In these instances, the contract modification would either be recognized as an entirely new and separate contract or the modification would be treated as if it were a termination of the existing contract and the creation of a new contract including all undelivered goods and services under the previous contract. Revenue would be recognized on a prospective basis and a cumulative catch-up would not be recognized. Incremental Costs of Obtaining a Contract and Costs to Fulfill a Contract Our incremental costs primarily relate to sales commissions. We capitalize commissions and proportionally recognize the related expense to revenue as it is recognized on the underlying performance obligations. Some of these costs may relate to specific future anticipated contracts, specifically future maintenance renewals, which we do not pay commensurate sales commissions on. We amortize commission costs proportionally with revenue, thus it is necessary for us to estimate future revenues when there are future anticipated contracts. We estimate future revenues based on anticipated renewal amounts over an expected useful life (e.g. the period over which we believe the initial sales commissions relate to future anticipated contracts). The expected useful life is based on a review of our product life cycles, customer upgrade patterns and the rate at which customers renew maintenance. |
Leases | Leases Operating lease right-of-use (“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, 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. |
Impairment of Long-Lived Assets, Intangible Assets Subject to Amortization and Goodwill | Impairment of Long-Lived Assets, Intangible Assets Subject to Amortization and Goodwill We are required to evaluate the carrying value of our long-lived assets, amortizable intangible assets and goodwill. Amortizable intangible assets include customer-related intangibles that resulted from previous acquisitions. Such intangibles are amortized over periods up to ten years. Quarterly, we assess whether circumstances exist which suggest that the carrying value of long-lived and amortizable intangible assets may not be recoverable. When applicable, we assess the recoverability of the carrying value of our long-lived assets and certain amortizable intangible assets based on estimated undiscounted cash flows to be generated from such assets. In assessing the recoverability of these assets, we forecast estimated enterprise-level cash flows based on various operating assumptions such as revenue forecasted by product line and in-process research and development cost. If the forecast of undiscounted cash flows does not exceed the carrying value of the long-lived and amortizable intangible assets, we record an impairment charge to the extent the carrying value exceeded the fair value of such assets. Goodwill is not amortized but is evaluated for impairment at least annually, or when events or circumstances suggest a potential impairment has occurred. We generally perform this annual impairment test in the fourth quarter of the fiscal year. We evaluate goodwill for impairment between annual tests if indicators of impairment exist. The impairment test involves comparing the fair value of the reporting unit with its carrying value. An impairment charge is recognized for the amount that the carrying value exceeds the reporting unit's fair value. For purposes of the goodwill impairment evaluation, the Company as a whole is considered the reporting unit. The fair value of the reporting unit is estimated under a market based approach using the fair value of the Company's common stock. The estimated fair value requires significant judgments, including timing and appropriateness of the price of common stock used (e.g. point-in-time application, simple moving average, exponential moving average), as well as application of an estimated control premium. The estimated control premium is based on a review of current and past market information published by a third-party resource. |
Accounts Receivable Allowances | Accounts Receivable Allowances Our two most significant allowance accounts are: an allowance for doubtful accounts and an allowance for service credits. Provisions for these allowances are recorded on a monthly basis and are included as a component of general and administrative expenses, respectively. Estimates are used in determining the allowance for doubtful accounts and are based on historical collection experience and current and forecasted trends, as well as known specific collection risks. In determining these estimates, we review historical write-offs, including comparisons of write-offs to provisions for doubtful accounts. We compare the ratio of the allowance to gross receivables to historical levels, and monitor amounts collected and related statistics. We write off receivables when they are deemed uncollectible. While write-offs of customer accounts have historically been within our expectations and the provisions established, we cannot guarantee that the future write-off experience will be consistent with historical experience, which could result in material differences when compared to the allowance for doubtful accounts and related provisions. From time to time, we grant service credits for customer retention purposes or when there is an adjustment in the scope of work. The allowance for service credits related provisions are based on historical credit percentages, current credit and aging trends, historical actual payment trends and actual credit experience. We analyze our past credit experience over several time frames. Using this analysis along with current operational data, including existing experience of credits issued and the time frames in which credits are issued, we establish an appropriate allowance for service credits. This allowance also reduces accounts receivable for lost and non-returned pagers to the expected realizable amounts and for free wireless services. While credits issued have been within our expectations and the provisions established, we cannot guarantee that future credit experience will be consistent with historical experience, which could result in material differences when compared to the allowance for service credits and maintenance related provisions. |
Inventory | Inventory Inventories are stated at the lower of cost or net realizable value. Cost is computed using a weighted average cost approach which averages the prices at which goods are purchased from vendors. We evaluate our ending inventories for shrinkage and estimated obsolescence. Any shrinkage identified is written off to cost of goods sold in the period in which the shrinkage is identified. Further, we assess the impact of changing technology on our inventories and we write off inventories that are considered obsolete in the period in which the analysis takes place. Inventory consists primarily of finished goods. We do not account for inventory as work-in-process or raw materials as any such inventory would be immaterial to the consolidated financial statements. |
Property and Equipment | Property and Equipment Property and equipment are reported at cost and are depreciated using the straight-line method based on estimated useful lives which range from one to five years. Transmitter assets are grouped into tranches based on our transmitter decommissioning forecast and are depreciated using the group life method on a straight-line basis. Depreciation expense is determined by the expected useful life of each tranche of the underlying transmitter assets. The expected useful life is based on our forecasted usage of those assets and their retirement over time and aligns the useful lives of these transmitter assets with their planned removal from service. Disposals are charged against accumulated depreciation with no gain or loss recognized. This rational and systematic method matches the underlying usage of these assets to the underlying revenue that is generated from these assets. Depreciation expense for these assets is subject to change based upon revisions in the timing of transmitter deconstruction resulting from our long-range planning and network rationalization process. |
Asset Retirement Obligations | Asset Retirement Obligations We recognize liabilities and corresponding assets for future obligations associated with the retirement of assets. We have paging equipment assets, principally transmitters, which are located on leased locations. The underlying leases generally require the removal of equipment at the end of the lease term; therefore, a future obligation exists. Asset retirement costs are reflected in paging equipment assets with depreciation expense recognized over the estimated lives, which range between one and five years. The asset retirement costs and the corresponding liabilities that have been recorded to date generally relate to either current plans to consolidate networks or to the removal of assets at a future terminal date. When an asset retirement obligation arises, the liabilities and corresponding assets are recorded at their present value using a discounted cash flow approach and the liabilities are accreted using the interest method. The recognition of an asset retirement obligation requires that management make numerous assumptions regarding such factors as the cost and timing of deconstruction; the credit-adjusted risk-free rate to be used; inflation rates; and future advances in technology. The fair value estimate of contractor fees to remove each asset is assumed to escalate by 2% each year through the terminal date. The total estimated liability is based on the estimated future value of those costs and the timing of deconstruction. We believe these estimates are reasonable at the present time, but we can give no assurance that changes in technology, our financial condition, the economy or other factors would not result in higher or lower asset retirement obligations. Any variations from our estimates would generally result in a change in the assets and liabilities in equal amounts, and operating results would differ in the future by any difference in depreciation expense and accretion expense (see Note 5 , "Consolidated Financial Statement Components", and Note 7 , "Asset Retirement Obligations", for additional details). |
Income Taxes | Income Taxes We file a consolidated U.S. Federal income tax return and income tax returns in state, local and foreign jurisdictions as required. The provision for current income taxes is calculated and accrued on income and expenses expected to be included in current year U.S. and foreign income tax returns. The provision for current income taxes may also include interest, penalties and an estimated amount reflecting uncertain tax positions. Deferred income tax assets and liabilities are computed based on temporary differences between the financial statement values and the tax bases of assets and liabilities including net operating loss and tax credit carryforwards at the enacted tax rates expected to apply to taxable income when taxes are actually paid or recovered. Changes in deferred income tax assets and liabilities are included as a component of deferred income tax expense. Deferred income tax assets represent amounts available to reduce future income taxes payable. We provide a valuation allowance when we consider it “more likely than not” (greater than a 50% probability) that a deferred income tax asset will not be fully recovered. Our valuation allowance assessment includes an evaluation of our history of generating taxable income and estimates of future taxable income, including when applicable the use of appropriate tax planning strategies. Assets and liabilities are established for uncertain tax positions taken or positions expected to be taken in income tax returns when such positions fail to meet the “more likely than not” threshold based on the technical merits of the positions. We assess whether previously unrecognized tax benefits may be recognized when the tax position is (1) more likely than not of being sustained based on its technical merits, (2) effectively settled through examination, negotiation or litigation, or (3) settled through actual expiration of the relevant tax statutes |
Research and Development | Research and Development In accordance with ASC 985-20, Software to be Sold, Leased, or Marketed , certain software development costs are charged to operations and expensed as incurred until technological feasibility has been established. Material costs incurred after technological feasibility is established and before the product is ready for general release are capitalized and amortized on a straight-line basis over the estimated remaining economic life of the product or the ratio of current revenues to total projected product revenues, whichever is greater. To date, the time between technological feasibility and general release to the public has been extremely short and consequently expenses available for capitalization have been immaterial. Accordingly, all research and developments costs incurred to date, accounted for in accordance with ASC 985-20, have been expensed as incurred. In accordance with ASC 350-40, Internal-use Software , certain software development costs are capitalized while in the application development stage related to software developed for internal use or software sold in a SaaS arrangement. This includes certain development costs for Spok Go. All other costs incurred during the preliminary project stage or the post implementation stage, are expensed as incurred. To date, we have not incurred material costs that would qualify for capitalization. We anticipate certain costs will begin to qualify for capitalization beginning in early 2020 and these costs are likely to be material. |
Advertising Expenses | Advertising Expenses Advertising costs are charged to operations when incurred. Advertising costs are classified as selling and marketing expenses. |
Stock Based Compensation | Stock Based Compensation We account for share-based payments to employees, including restricted stock units ("RSUs"), restricted common stock ("restricted stock") and the option to purchase common stock under the Employee Stock Purchase Plan ("ESPP") based on their fair value and the estimated number of shares we expect will vest based on the performance metrics associated with the award, if applicable. Fair value is measured based on the closing fair market value of the Company's common stock on the date of grant. Compensation expense is recognized on a straight-line basis over the requisite service period. Forfeitures and withdrawals are accounted for on an as incurred basis. Changes in our estimates of the expected attainment of performance targets are reflected in the amount of compensation expense that we recognize for the related instruments during the interim reporting period when the change in estimate is determined and may cause the amount of compensation expense that we record for each period to vary. Further information regarding stock based compensation can be found in Note 8 , "Stockholders' Equity." |
Concentration of Credit Risk | Concentration of Credit Risk Our financial instruments that are potentially subject to concentrations of credit risk consist primarily of cash, cash equivalents, short-term receivables and accounts receivable. While our cash and cash equivalents are managed by reputable financial institutions, deposits at these institutions and funds may, at times, exceed federally insured limits. Management believes that these financial institutions and funds are financially sound and, accordingly, that minimal credit risk exists. Accounts receivable are typically unsecured and are derived from revenue earned from customers across different geographic locations, primarily within the U.S. We perform ongoing credit evaluations of our customers, and generally do not require collateral. We maintain an allowance for estimated credit losses. |
Sales and Use Taxes | Sales and Use Taxes Sales and use taxes imposed on the ultimate consumer are excluded from revenue where we are required by law or regulation to act as collection agent for the taxing jurisdiction. |
Fair Value Measurements and Financial Instruments | Fair Value Measurements and Financial Instruments We account for certain assets and liabilities at fair value. We categorize each of our fair value measurements in one of the following three levels based on the lowest level input that is significant to the fair value measurement in its entirety. These levels are: Level 1 - Inputs are based upon unadjusted quoted prices for identical instruments in active markets. Level 2 - Inputs are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, inputs other than quoted prices that are observable for the asset or liability and inputs that are corroborated by other observable market data. Level 3 - Unobservable inputs that cannot be corroborated by observable market data and typically reflect management's estimates of assumptions that market participants would use in pricing the asset or liability. We consider all highly liquid interest-earning investments with a maturity of three months or less at the date of purchase to be cash equivalents. Those investments with an original maturity of greater than three months and less than one year are classified as short-term investments. Cash and cash equivalents consist primarily of cash on deposit with banks and investments in money market funds. Our short-term investments consist entirely of U.S. Treasury securities which are classified as held-to-maturity and are measured at amortized cost on our Consolidated Balance Sheets. These investments are classified as Level 1 and mature within 12 months. The differences between carrying value and fair value are not material to the Consolidated Financial Statements. Financial instruments including cash and cash equivalents, accounts receivable and accounts payable all have fair values that approximate their carrying values at December 31, 2019 and 2018 due to their short maturities. |
Earnings Per Common Share | Earnings Per Common Share The calculation of earnings per common share is based on the weighted-average number of common shares outstanding during the applicable period. The calculation for diluted earnings per common share recognizes the effect of all potential dilutive common shares that were outstanding during the respective periods, unless the impact would be anti-dilutive. Further information regarding earnings per common share can be found in Note 8 , "Stockholders' Equity." |
Recent and Pending Accounting Standards | RECENT AND PENDING ACCOUNTING STANDARDS Recently Adopted Leases - ASC 842 "Leases" 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. During the quarter ended June 30, 2019, we adjusted our opening balance to record the effect of adopting ASC 842 by approximately $0.4 million . As a result, the impact of the adoption of ASC 842 was an increase to assets and liabilities of approximately $17.8 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 the 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 1, "Significant Accounting Policies Update" and Note 4 "Leases." Pending Adoption In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses on Financial Instruments ("CECL") that requires early recognition of credit losses on financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. This guidance is effective for fiscal years beginning after December 15, 2019. While our assessment is on-going, we do not believe the impact will have a material effect on our consolidated financial statements. |
Revenue, Deferred Revenue and_2
Revenue, Deferred Revenue and Prepaid Commissions (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Revenue | The following table presents our revenues disaggregated by revenue type: For the Twelve Months Ended December 31, (Dollars in thousands) 2019 2018 2017 Revenue - wireless Paging revenue 85,067 90,570 97,296 Product and other revenue 3,100 3,707 3,892 Total wireless revenue 88,167 94,277 101,188 Revenue - software License 8,950 13,042 9,541 Services 19,189 18,091 17,630 Equipment 3,618 4,995 4,147 Operations revenue $ 31,757 $ 36,128 $ 31,318 Maintenance revenue $ 40,365 $ 39,069 $ 38,669 Total software revenue $ 72,122 $ 75,197 $ 69,987 Total revenue $ 160,289 $ 169,474 $ 171,175 The Company is currently structured as a single operating (and reportable) segment, a clinical communication and collaboration business. The U.S. was the only country that accounted for more than 10% of the Company’s total revenue for the years ended December 31, 2019 , 2018 and 2017 . Revenue generated in the U.S. and internationally consisted of the following for the periods stated: For the Twelve Months Ended December 31, (Dollars in thousands) 2019 2018 2017 Revenue United States $ 154,766 $ 164,558 $ 166,790 International 5,523 4,916 4,385 Total revenue $ 160,289 $ 169,474 $ 171,175 |
Schedule of Deferred Revenue | Changes in the balance of total deferred revenue during the twelve months ended December 31, 2019 are as follows: (Dollars in thousands) December 31, 2018 Additions Revenue Recognized December 31, 2019 Deferred Revenue $ 26,582 $ 70,684 $ (70,645 ) $ 26,621 |
Schedule of Deferred Commissions | Changes in the balance of total prepaid commissions during the twelve months ended December 31, 2019 are as follows: (Dollars in thousands) December 31, 2018 Additions Commissions Recognized December 31, 2019 Prepaid Commissions $ 2,394 $ 5,031 $ (4,994 ) $ 2,431 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Schedule of Lease Costs | The following table presents lease costs disaggregated by type: For the Year Ended December 31, (Dollars in thousands) 2019 Operating lease cost $ 5,823 Short-term lease cost 8,281 Short-term lease cost - related party (1) 3,589 Total lease cost $ 17,693 Supplemental Disclosure: Cash paid for amounts included in the measurement of lease liabilities - operating leases $ 1,421 Weighted-average remaining lease term - operating leases 5.60 years Weighted-average discount rate - operating leases 5.45 % (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 12 , "Related Parties" for additional details. |
Schedule of Maturities of Lease Liabilities | Maturities of lease liabilities as of December 31, 2019 were as follows: For the Year Ended December 31, (Dollars in thousands) 2020 5,447 2021 4,398 2022 2,765 2023 1,860 2024 1,409 Thereafter 3,824 Total future lease payments 19,703 Imputed interest (2,691 ) Total $ 17,012 |
Consolidated Financial Statem_2
Consolidated Financial Statements' Components (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Summary of Depreciation, Amortization and Accretion | Depreciation, amortization and accretion consisted of the following for the periods stated: For the Year Ended December 31, (Dollars in thousands) 2019 2018 2017 Depreciation Leasehold improvements $ 63 $ 232 $ 234 Asset retirement costs (766 ) (300 ) (388 ) Paging and computer equipment 6,526 7,397 8,024 Furniture, fixtures and vehicles 374 398 306 Total depreciation 6,197 7,727 8,176 Amortization 2,500 2,500 2,886 Accretion 552 542 562 Total depreciation, amortization and accretion expense $ 9,249 $ 10,769 $ 11,624 |
Property, Plant and Equipment | Property and equipment, net consisted of the following for the periods stated: Useful Life For the Year Ended December 31, (Dollars in thousands) 2019 2018 Leasehold improvements lease term $ 3,620 $ 4,139 Asset retirement costs 1-5 1,922 2,021 Paging and computer equipment 1-5 96,562 98,401 Furniture, fixtures and vehicles 3-5 3,716 4,353 Total property and equipment 105,820 108,914 Accumulated depreciation (97,820 ) (98,560 ) Total property and equipment, net $ 8,000 $ 10,354 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets, Net (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Change in Goodwill | The change in goodwill for the year ended December 31, 2019 was as follows: (Dollars in thousands) (Dollars in thousands) Goodwill at January 1, 2019 $ 133,031 Impairment (8,849 ) Goodwill at December 31, 2019 $ 124,182 |
Summary of Amortizable Intangible Assets | The net consolidated balance of intangible assets consisted of the following at December 31, 2019 and 2018 : As of December 31, 2019 2018 (Dollars in thousands) Useful Life (In Years) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Customer relationships 10 $ 25,002 $ (22,085 ) $ 2,917 $ 25,002 $ (19,585 ) $ 5,417 |
Summary of Estimated Amortization of Intangible Assets for Future Periods | Estimated amortization of intangible assets for future periods was as follows: For the year ending December 31, (Dollars in thousands) 2020 2,500 2021 417 Total $ 2,917 |
Asset Retirement Obligations (T
Asset Retirement Obligations (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Asset Retirement Obligation Disclosure [Abstract] | |
Summary of Changes in Asset Retirement Obligation Liability Balances | The components of the changes in the asset retirement obligation liabilities for the periods stated were as follows: (Dollars in thousands) Short-Term Portion Long-Term Portion Total Balance at January 1, 2018 $ 234 $ 7,174 $ 7,408 Accretion (91 ) 633 542 Amounts paid (154 ) — (154 ) Additions — 55 55 Reductions (185 ) (1,119 ) (1,304 ) Reclassifications 230 (230 ) — Balance at December 31, 2018 34 6,513 6,547 Accretion 39 513 552 Amounts paid (177 ) — (177 ) Additions — 32 32 Reductions 14 (817 ) (803 ) Reclassifications 180 (180 ) — Balance at December 31, 2019 $ 90 $ 6,061 $ 6,151 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Equity [Abstract] | |
Common Stock Purchased Including Purchase of Common Stock for Tax Withholdings | Common stock purchased in 2019 , 2018 and 2017 (excluding commission and the purchase of common stock for tax withholdings) was as follows: For the Three Months Ended Shares Purchased Amount Shares Purchased Amount Shares Purchased Amount (dollars in thousands, except for shares purchased) 2019 2018 2017 March 31, 131,012 $ 1,806 127,792 $ 1,922 — $ — June 30, — — 501,782 7,520 572,550 10,000 September 30, 401,342 4,749 36,542 558 — — December 31, — — 263,000 3,446 — — Total 532,354 $ 6,555 929,116 $ 13,446 572,550 $ 10,000 |
Schedule of Earnings Per Share, Basic and Diluted | The components of basic and diluted net loss per common share were as follows for the periods stated: For the Year Ended December 31, (in thousands, except for share and per share amounts) 2019 2018 2017 Numerator: Net loss $ (10,765 ) $ (1,479 ) $ (15,306 ) Denominator: Basic and diluted weighted average outstanding shares of common stock 19,089,402 19,667,891 20,210,260 Basic and diluted net loss per common share $ (0.56 ) $ (0.08 ) $ (0.76 ) |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | For the years ended December 31, 2019 , 2018 and 2017 , the following securities were not included in the calculation of diluted shares outstanding as the effect would have been anti-dilutive: For the Year Ended December 31, 2019 2018 2017 Restricted stock units 189,862 178,279 90,665 |
Activities Under Equity Plan | The following table summarizes the activities under the 2012 Equity Plan from January 1, 2017 through December 31, 2019 : Activity Total equity securities available at January 1, 2017 1,246,939 Less: RSU and restricted stock awarded to eligible employees, net of forfeitures (106,281 ) Total equity securities available at December 31, 2017 1,140,658 Less: RSU and restricted stock awarded to eligible employees, net of forfeitures (236,221 ) Total equity securities available at December 31, 2018 904,437 Less: RSU and restricted stock awarded to eligible employees, net of forfeitures (257,957 ) Total equity securities available at December 31, 2019 646,480 |
Additional Awards Under 2011 LTIP | The following table details activities with respect to outstanding RSUs and restricted stock for the year ended December 31, 2019 : Shares Weighted- Unvested at January 1, 2019 404,325 $ 17.27 Granted 388,321 13.27 Vested (242,856 ) 17.48 Forfeited (130,364 ) 15.49 Unvested at December 31, 2019 419,426 $ 14.00 |
Activities Under Equity Plan From Inception | The following table summarizes the activities under the ESPP from January 1, 2017 through December 31, 2019 : Activity Total ESPP equity securities available at January 1, 2017 246,039 Less: common stock purchased by eligible employees (17,760 ) Total ESPP equity securities available at January 1, 2018 228,279 Less: common stock purchased by eligible employees (20,120 ) Total ESPP equity securities available at January 1, 2019 208,159 Less: common stock purchased by eligible employees (23,299 ) Total ESPP equity securities available at December 31, 2019 184,860 |
Summary of Stock Based Compensation Expense | The following table reflects stock based compensation expense for the periods stated: For the Year Ended December 31, (Dollars in thousands) 2019 2018 2017 Performance-based RSUs $ 1,434 $ 2,127 $ 1,762 Time-based RSUs and restricted stock 2,119 2,756 1,862 ESPP 90 71 64 Total stock based compensation $ 3,643 $ 4,954 $ 3,688 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Components of Income Tax Expense (Benefit) Attributable to Current Operations | The significant components of our income tax (benefit) expense attributable to current operations for the periods stated were as follows: For the Year Ended December 31, (Dollars in thousands) 2019 2018 2017 (Loss) income before income tax (benefit) expense $ (13,423 ) $ (2,185 ) $ 11,559 Current: Federal tax $ — $ — $ 199 State tax 582 838 1,006 Foreign tax 13 148 270 Total current 595 986 1,475 Deferred: Federal tax (2,121 ) (1,467 ) 26,348 State tax (1,239 ) (532 ) (787 ) Foreign tax 107 307 (171 ) Total deferred (3,253 ) (1,692 ) 25,390 Total income tax (benefit) expense $ (2,658 ) $ (706 ) $ 26,865 |
Schedule of Effective Income Tax Rate Reconciliation | The following table summarizes the principal elements of the difference between the United States Federal statutory rate of 21% and our effective tax rate: Effective tax rate reconciliation 2019 2018 2017 (Dollars in thousands) (Loss) income before income tax (benefit) expense $ (13,423 ) $ (2,185 ) $ 11,559 Income taxes computed at the Federal statutory rate $ (2,819 ) 21.0 % $ (459 ) 21.0 % $ 4,046 35.0 % State income taxes, net of Federal benefit (567 ) 4.2 % 306 (14.0 )% 472 4.1 % Goodwill impairment 2,243 (16.7 )% — — % — — % Impact of 2017 Tax Act — — % — — % 24,235 209.7 % Research and development and other tax credits (1,790 ) 13.3 % (1,144 ) 52.4 % (1,775 ) (15.4 )% Excess executive compensation 322 (2.4 )% 281 (12.9 )% — — % Other (47 ) 0.4 % 310 (14.2 )% (113 ) (1.0 )% (Benefit from) provision for income taxes $ (2,658 ) 19.8 % $ (706 ) 32.3 % $ 26,865 232.4 % |
Schedule of Deferred Income Tax Assets | The components of deferred income tax assets at December 31, 2019 and 2018 were as follows: December 31, (Dollars in thousands) 2019 2018 Capitalized research and development costs $ 18,605 $ 14,219 Net operating loss carryforward 15,978 18,851 Property and equipment 6,092 5,969 Accrued liabilities, reserves and other expenses 3,718 3,837 Research and development credits 4,140 2,360 Tax credits 1,467 2,141 Stock based compensation 1,600 12 1,739 Other 121 200 Gross deferred income tax assets 51,721 49,316 Deferred income tax liabilities: Intangible assets (2,430 ) (2,711 ) Prepaid and other expenses (308 ) (121 ) Gross deferred income tax liabilities $ (2,738 ) $ (2,832 ) Net deferred income tax assets $ 48,983 $ 46,484 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Future Minimum Lease Payments | Future minimum lease payments under non-cancelable operating leases at December 31, 2019 were as follows: For the Year Ended December 31, (Dollars in thousands) 2020 $ 6,792 2021 5,056 2022 3,039 2023 1,968 2024 498 Thereafter 217 Total $ 17,570 |
Selected Quarterly Financial _2
Selected Quarterly Financial Information (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Quarterly Financial Information Disclosure [Abstract] | |
Summarized Quarterly Data | Quarterly financial information for the years ended December 31, 2019 and 2018 is summarized below: For the Year Ended December 31, 2019 First Second Third Fourth Quarter (3) (Dollars in thousands except per share amounts) Revenues (1) $ 41,764 $ 39,525 $ 39,453 $ 39,548 Operating income (loss) (1) 1,115 (1,992 ) (2,692 ) (12,239 ) Net income (loss) (1) 742 (670 ) (1,326 ) (9,511 ) Basic and diluted net income (loss) per common share (2) 0.04 (0.03 ) (0.07 ) (0.50 ) For the Year Ended December 31, 2018 First Second Third Fourth Quarter (Dollars in thousands except per share amounts) Revenues (1) $ 43,114 $ 40,628 $ 42,476 $ 43,256 Operating income (loss) (1) 584 (2,346 ) (1,560 ) 149 Net income (loss) (1) 345 (1,172 ) (840 ) 189 Basic and diluted net income (loss) per common share (2) 0.02 (0.06 ) (0.04 ) 0.01 (1) Slight variations in totals are due to rounding. (2) Basic and diluted net income (loss) per common share is computed independently for each period presented. As a result, the sum of the quarterly basic and diluted net income (loss) per common share for the years ended December 31, 2019 and 2018 may not equal the total computed for the year. (3) During the fourth quarter of 2019, the Company recorded a goodwill impairment of $8.8 million . See Note 6 "Goodwill and Intangible Assets, Net" for additional details. |
Organization and Significant _3
Organization and Significant Accounting Policies - Additional Information (Details) | 12 Months Ended | ||
Dec. 31, 2019USD ($)account | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | |
Property, Plant and Equipment [Line Items] | |||
Commissions expense | $ 5,000,000 | $ 6,200,000 | $ 5,200,000 |
Impairment of intangible assets | $ 0 | 0 | 0 |
Number of significant allowance accounts | account | 2 | ||
Contractor fee, annual percentage increase | 2.00% | ||
Uncertain tax positions | $ 0 | 0 | |
Advertising expenses | 1,700,000 | 2,400,000 | 2,300,000 |
Provisions for doubtful accounts, service credits and other | $ 700,000 | $ 1,600,000 | $ 500,000 |
Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Useful life | 1 year | ||
Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Amortization of intangible assets | 10 years | ||
Useful life | 5 years | ||
Paging Equipment Assets | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Useful life | 1 year | ||
Paging Equipment Assets | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Useful life | 5 years |
Recent and Pending Accounting_2
Recent and Pending Accounting Standards (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Jun. 30, 2019 | Jan. 01, 2019 | Dec. 31, 2018 | Jan. 01, 2018 | Jan. 01, 2017 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Effect of ASC 842 | $ (300) | $ (49) | $ 11 | |||
Assets | $ 319,872 | $ 327,712 | ||||
Liabilities | $ 69,778 | $ 53,158 | ||||
Accounting Standards Update 2016-02 | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Effect of ASC 842 | $ 400 | |||||
Assets | 17,800 | |||||
Liabilities | $ 17,800 |
Revenue, Deferred Revenue and_3
Revenue, Deferred Revenue and Prepaid Commissions - Additional Details (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2019USD ($)revenue_component | |
Segment Reporting Information [Line Items] | |
Revenue recognized | $ | $ 25.3 |
Remaining performance obligation | $ | $ 50.6 |
Wireless | |
Segment Reporting Information [Line Items] | |
Revenue primary component | revenue_component | 2 |
Operations revenue | |
Segment Reporting Information [Line Items] | |
Revenue primary component | revenue_component | 2 |
Maintenance revenue | |
Segment Reporting Information [Line Items] | |
Typical duration of revenue recognition | Maintenance revenue is for ongoing support of our software solutions or related equipment (typically for one year) and access to when-and-if available software updates. |
Revenue, Deferred Revenue and_4
Revenue, Deferred Revenue and Prepaid Commissions - Schedule of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Disaggregation of Revenue [Line Items] | |||||||||||
Revenues | $ 39,548 | $ 39,453 | $ 39,525 | $ 41,764 | $ 43,256 | $ 42,476 | $ 40,628 | $ 43,114 | $ 160,289 | $ 169,474 | $ 171,175 |
United States | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenues | 154,766 | 164,558 | 166,790 | ||||||||
International | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenues | 5,523 | 4,916 | 4,385 | ||||||||
Paging revenue | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenues | 85,067 | 90,570 | 97,296 | ||||||||
Product and other revenue | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenues | 3,100 | 3,707 | 3,892 | ||||||||
Total wireless revenue | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenues | 88,167 | 94,277 | 101,188 | ||||||||
License | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenues | 8,950 | 13,042 | 9,541 | ||||||||
Services | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenues | 19,189 | 18,091 | 17,630 | ||||||||
Equipment | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenues | 3,618 | 4,995 | 4,147 | ||||||||
Operations revenue | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenues | 31,757 | 36,128 | 31,318 | ||||||||
Maintenance revenue | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenues | 40,365 | 39,069 | 38,669 | ||||||||
Total software revenue | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenues | $ 72,122 | $ 75,197 | $ 69,987 |
Revenue, Deferred Revenue and_5
Revenue, Deferred Revenue and Prepaid Commissions - Deferred Revenue (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Contract With Customer, Asset And Liability [Roll Forward] | |||
Beginning balance | $ 26,582 | ||
Additions | 42 | $ (866) | $ 2,579 |
Ending balance | 26,621 | $ 26,582 | |
Accounting Standards Update 2014-09 | |||
Contract With Customer, Asset And Liability [Roll Forward] | |||
Additions | 70,684 | ||
Revenue Recognized | $ (70,645) |
Revenue, Deferred Revenue and_6
Revenue, Deferred Revenue and Prepaid Commissions - Deferred Commissions (Details) - Sales Commissions $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Capitalized Contract Cost [Roll Forward] | |
Beginning balance | $ 2,394 |
Additions | 5,031 |
Commissions Recognized | (4,994) |
Ending balance | $ 2,431 |
Revenue, Deferred Revenue and_7
Revenue, Deferred Revenue and Prepaid Commissions - Performance Obligations (Details) $ in Millions | Dec. 31, 2019USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation | $ 50.6 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation | $ 36.5 |
Remaining performance obligation, timing | 1 year |
Leases - Additional Information
Leases - Additional Information (Details) | 12 Months Ended |
Dec. 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 | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Leases [Abstract] | |
Operating lease cost | $ 5,823 |
Short-term lease cost | 8,281 |
Short-term lease cost - related party | 3,589 |
Total lease cost | 17,693 |
Cash paid for amounts included in the measurement of lease liabilities - operating leases | $ 1,421 |
Weighted-average remaining lease term - operating leases | 5 years 7 months 6 days |
Weighted-average discount rate - operating leases | 5.45% |
Leases - Lease Maturities (Deta
Leases - Lease Maturities (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Leases [Abstract] | |
2020 | $ 5,447 |
2021 | 4,398 |
2022 | 2,765 |
2023 | 1,860 |
2024 | 1,409 |
Thereafter | 3,824 |
Total | 19,703 |
Imputed interest | (2,691) |
Total | $ 17,012 |
Consolidated Financial Statem_3
Consolidated Financial Statements' Components - Depreciation, Amortization and Accretion (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Property, Plant and Equipment [Line Items] | |||
Depreciation | $ 6,197 | $ 7,727 | $ 8,176 |
Amortization | 2,500 | 2,500 | 2,886 |
Accretion | 552 | 542 | 562 |
Total depreciation, amortization and accretion expense | 9,249 | 10,769 | 11,624 |
Leasehold improvements | |||
Property, Plant and Equipment [Line Items] | |||
Depreciation | 63 | 232 | 234 |
Asset retirement costs | |||
Property, Plant and Equipment [Line Items] | |||
Depreciation | (766) | (300) | (388) |
Paging and computer equipment | |||
Property, Plant and Equipment [Line Items] | |||
Depreciation | 6,526 | 7,397 | 8,024 |
Furniture, fixtures and vehicles | |||
Property, Plant and Equipment [Line Items] | |||
Depreciation | $ 374 | $ 398 | $ 306 |
Consolidated Financial Statem_4
Consolidated Financial Statements' Components - Accounts Receivable, net (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Allowances for doubtful accounts | $ 1.3 | $ 1.7 |
Contract Asset | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Allowances for doubtful accounts | $ 6.4 | $ 8.7 |
Consolidated Financial Statem_5
Consolidated Financial Statements' Components - Property and Equipment, net (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | $ 105,820 | $ 108,914 |
Accumulated depreciation | (97,820) | (98,560) |
Total property and equipment, net | $ 8,000 | 10,354 |
Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Useful Life (In Years) | 1 year | |
Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Useful Life (In Years) | 5 years | |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | $ 3,620 | 4,139 |
Asset retirement costs | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | $ 1,922 | 2,021 |
Asset retirement costs | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Useful Life (In Years) | 1 year | |
Asset retirement costs | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Useful Life (In Years) | 5 years | |
Paging and computer equipment | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | $ 96,562 | 98,401 |
Paging and computer equipment | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Useful Life (In Years) | 1 year | |
Paging and computer equipment | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Useful Life (In Years) | 5 years | |
Furniture, fixtures and vehicles | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | $ 3,716 | $ 4,353 |
Furniture, fixtures and vehicles | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Useful Life (In Years) | 3 years | |
Furniture, fixtures and vehicles | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Useful Life (In Years) | 5 years |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets, Net - Goodwill (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Goodwill [Roll Forward] | ||||
Goodwill at January 1, 2019 | $ 133,031 | |||
Impairment | $ (8,800) | (8,849) | $ 0 | $ 0 |
Goodwill at December 31, 2019 | $ 124,182 | $ 124,182 | $ 133,031 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets, Net - Net Intangible Assets (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Finite-Lived Intangible Assets [Line Items] | |||
Impairment | $ 0 | $ 0 | $ 0 |
Net Carrying Amount | $ 2,917,000 | 5,417,000 | |
Customer relationships | |||
Finite-Lived Intangible Assets [Line Items] | |||
Useful Life (In Years) | 10 years | ||
Gross Carrying Amount | $ 25,002,000 | 25,002,000 | |
Accumulated Amortization | (22,085,000) | (19,585,000) | |
Net Carrying Amount | $ 2,917,000 | $ 5,417,000 |
Goodwill and Intangible Asset_5
Goodwill and Intangible Assets, Net - Future Amortization (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2020 | $ 2,500 | |
2021 | 417 | |
Net Carrying Amount | $ 2,917 | $ 5,417 |
Asset Retirement Obligations -
Asset Retirement Obligations - Changes in Asset Retirement Obligation Liabilities (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Asset Retirement Obligation | |||
Balance | $ 6,547 | $ 7,408 | |
Accretion | 552 | 542 | $ 562 |
Amounts paid | (177) | (154) | |
Additions | 32 | 55 | |
Reductions | (803) | (1,304) | |
Reclassifications | 0 | 0 | |
Balance | 6,151 | 6,547 | 7,408 |
Total estimated liability | 7,600 | ||
Short-Term Portion | |||
Asset Retirement Obligation | |||
Balance | 34 | 234 | |
Accretion | 39 | (91) | |
Amounts paid | (177) | (154) | |
Additions | 0 | 0 | |
Reductions | 14 | (185) | |
Reclassifications | 180 | 230 | |
Balance | 90 | 34 | 234 |
Long-Term Portion | |||
Asset Retirement Obligation | |||
Balance | 6,513 | 7,174 | |
Accretion | 513 | 633 | |
Amounts paid | 0 | 0 | |
Additions | 32 | 55 | |
Reductions | (817) | (1,119) | |
Reclassifications | (180) | (230) | |
Balance | $ 6,061 | $ 6,513 | $ 7,174 |
Stockholders' Equity - Additio
Stockholders' Equity - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||||||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Feb. 26, 2020 | Aug. 31, 2018 | Jul. 25, 2016 | May 16, 2012 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Common stock authorized (shares) | 75,000,000 | 75,000,000 | |||||
Common stock par value (usd per share) | $ 0.0001 | $ 0.0001 | |||||
Preferred stock authorized (shares) | 25,000,000 | 25,000,000 | |||||
Preferred stock par value (usd per share) | $ 0.0001 | $ 0.0001 | |||||
Stock options outstanding (shares) | 0 | 0 | |||||
Common stock outstanding (shares) | 19,071,614 | 19,389,066 | |||||
Preferred stock outstanding (shares) | 0 | 0 | |||||
Dividends declared (usd per share) | $ 0.50 | $ 0.50 | $ 0.50 | ||||
Common stock repurchase program, authorized amount | $ 10,000 | ||||||
Issuance of common stock under the Employee Stock Purchase Plan | $ 264 | $ 247 | $ 256 | ||||
2012 Equity Plan | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Equity securities granted (shares) | 2,194,986 | ||||||
2012 Equity Plan | Restricted Stock | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Award vesting period | 1 year | ||||||
2012 Equity Plan | Restricted Stock Units | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Award vesting period | 3 years | ||||||
2012 Equity Plan | Contingent restricted stock units | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Award vesting period | 3 years | ||||||
2011 Long Term Incentive Plan | Restricted Stock and RSUs | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Unvested shares outstanding (shares) | 419,426 | 404,325 | |||||
Compensation cost not yet recognized | $ 3,100 | ||||||
Compensation cost not yet recognized, period for recognition | 1 year 7 months 6 days | ||||||
2011 Long Term Incentive Plan | Contingent restricted stock units | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Unvested shares outstanding (shares) | 273,788 | ||||||
ESPP | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Equity securities granted (shares) | 250,000 | ||||||
Award required holding period | 2 years | ||||||
Issuance of common stock under the Employee Stock Purchase Plan (shares) | 23,299 | 20,120 | |||||
Issuance of common stock under the Employee Stock Purchase Plan | $ 300 | $ 200 | |||||
Maximum | ESPP | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Offering period | 6 months | ||||||
Subsequent Event | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Dividend rate (usd per share) | $ 0.125 | ||||||
Dividends declared | $ 2,400 | ||||||
Tranche one | 2012 Equity Plan | Restricted Stock Units | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Award vesting percentage | 33.33% | ||||||
Tranche two | 2012 Equity Plan | Restricted Stock Units | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Award vesting percentage | 33.33% | ||||||
Tranche three | 2012 Equity Plan | Restricted Stock Units | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Award vesting percentage | 33.33% |
Stockholders' Equity - Common
Stockholders' Equity - Common Stock Purchased Including Purchase of Common Stock for Tax Withholdings (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Equity [Abstract] | |||||||||||||||
Shares purchased (shares) | 0 | 401,342 | 0 | 131,012 | 263,000 | 36,542 | 501,782 | 127,792 | 0 | 0 | 572,550 | 0 | 532,354 | 929,116 | 572,550 |
Amount | $ 0 | $ 4,749 | $ 0 | $ 1,806 | $ 3,446 | $ 558 | $ 7,520 | $ 1,922 | $ 0 | $ 0 | $ 10,000 | $ 0 | $ 6,555 | $ 13,446 | $ 10,000 |
Stockholders' Equity - Earning
Stockholders' Equity - Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Numerator: | |||||||||||
Net loss | $ (9,511) | $ (1,326) | $ (670) | $ 742 | $ 189 | $ (840) | $ (1,172) | $ 345 | $ (10,765) | $ (1,479) | $ (15,306) |
Denominator: | |||||||||||
Basic and diluted weighted average common shares outstanding (shares) | 19,089,402 | 19,667,891 | 20,210,260 | ||||||||
Basic and diluted net loss per common share (usd per share) | $ (0.50) | $ (0.07) | $ (0.03) | $ 0.04 | $ 0.01 | $ (0.04) | $ (0.06) | $ 0.02 | $ (0.56) | $ (0.08) | $ (0.76) |
Restricted stock units | |||||||||||
Denominator: | |||||||||||
Restricted stock units (shares) | 189,862 | 178,279 | 90,665 |
Stockholders' Equity - Activit
Stockholders' Equity - Activities Under Equity Plan (Details) - 2012 Equity Plan - shares | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Number of Shares Available for Grant [Roll Forward] | |||
Beginning Balance, Equity securities available (shares) | 904,437 | 1,140,658 | 1,246,939 |
Granted (shares) | (257,957) | (236,221) | (106,281) |
Ending Balance, Equity securities available (shares) | 646,480 | 904,437 | 1,140,658 |
Stockholders' Equity - Addit_2
Stockholders' Equity - Additional Awards Under 2011 LTIP (Details) - Restricted Stock and RSUs - 2011 Long Term Incentive Plan | 12 Months Ended |
Dec. 31, 2019$ / sharesshares | |
Shares | |
Beginning Balance (shares) | shares | 404,325 |
Granted (shares) | shares | 388,321 |
Vested (shares) | shares | (242,856) |
Forfeited (shares) | shares | (130,364) |
Ending Balance (shares) | shares | 419,426 |
Weighted- Average Grant Date Fair Value | |
Beginning (usd per share) | $ / shares | $ 17.27 |
Granted (usd per share) | $ / shares | 13.27 |
Vested (usd per share) | $ / shares | 17.48 |
Forfeited (usd per share) | $ / shares | 15.49 |
Ending Balance (usd per share) | $ / shares | $ 14 |
Stockholders' Equity - ESPP Ac
Stockholders' Equity - ESPP Activity (Details) - ESPP - shares | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Share-Based Compensation Arrangement By Share-Based Payment Award, Shares Available [Roll Forward] | |||
Beginning Balance, Equity securities available (shares) | 208,159 | 228,279 | 246,039 |
Less: common stock purchased by eligible employees (shares) | (23,299) | (20,120) | (17,760) |
Ending Balance, Equity securities available (shares) | 184,860 | 208,159 | 228,279 |
Stockholders' Equity - Summary
Stockholders' Equity - Summary of Stock Based Compensation Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Total stock based compensation | $ 3,643 | $ 4,954 | $ 3,688 |
Performance-based RSUs | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Total stock based compensation | 1,434 | 2,127 | 1,762 |
Time-based RSUs and restricted stock | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Total stock based compensation | 2,119 | 2,756 | 1,862 |
ESPP | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Total stock based compensation | $ 90 | $ 71 | $ 64 |
Income Taxes - Components of I
Income Taxes - Components of Income Tax Expense (Benefit) Attributable to Current Operations (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |||
(Loss) income before income tax (benefit) expense | $ (13,423) | $ (2,185) | $ 11,559 |
Current: | |||
Federal tax | 0 | 0 | 199 |
State tax | 582 | 838 | 1,006 |
Foreign tax | 13 | 148 | 270 |
Total current | 595 | 986 | 1,475 |
Deferred: | |||
Federal tax | (2,121) | (1,467) | 26,348 |
State tax | (1,239) | (532) | (787) |
Foreign tax | 107 | 307 | (171) |
Total deferred | (3,253) | (1,692) | 25,390 |
(Benefit from) provision for income taxes | $ (2,658) | $ (706) | $ 26,865 |
Income Taxes - Effective Tax R
Income Taxes - Effective Tax Rate Reconciliation (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Effective Income Tax Rate Reconciliation, Amount [Abstract] | |||
(Loss) income before income tax (benefit) expense | $ (13,423) | $ (2,185) | $ 11,559 |
Income taxes computed at the Federal statutory rate | (2,819) | (459) | 4,046 |
State income taxes, net of Federal benefit | (567) | 306 | 472 |
Goodwill impairment | 2,243 | 0 | 0 |
Impact of 2017 Tax Act | 0 | 0 | 24,235 |
Research and development and other tax credits | (1,790) | (1,144) | (1,775) |
Excess executive compensation | 322 | 281 | 0 |
Other | (47) | 310 | (113) |
(Benefit from) provision for income taxes | $ (2,658) | $ (706) | $ 26,865 |
Effective Income Tax Rate Reconciliation, Percent [Abstract] | |||
Income taxes computed at the Federal statutory rate | 21.00127% | 21.00686% | 35.00303% |
State income taxes, net of Federal benefit | 4.20% | (14.00%) | 4.10% |
Goodwill impairment | (16.70%) | 0.00% | 0.00% |
Impact of 2017 Tax Act | 0.00% | 0.00% | 209.70% |
Research and development and other tax credits | 13.30% | 52.40% | (15.40%) |
Excess executive compensation | (2.40%) | (12.90%) | 0.00% |
Other | 0.40% | (14.20%) | (1.00%) |
(Benefit from) provision for income taxes | 19.80% | 32.30% | 232.40% |
Income Taxes - Additional Info
Income Taxes - Additional Information (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Valuation Allowance [Line Items] | |
NOLs available for future years | $ 71.2 |
Minimum | State jurisdiction | |
Valuation Allowance [Line Items] | |
Statute of limitations | 3 years |
Maximum | State jurisdiction | |
Valuation Allowance [Line Items] | |
Statute of limitations | 4 years |
Income Taxes - Schedule of Def
Income Taxes - Schedule of Deferred Income Tax Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Income Tax Disclosure [Abstract] | ||
Capitalized research and development costs | $ 18,605 | $ 14,219 |
Net operating loss carryforward | 15,978 | 18,851 |
Property and equipment | 6,092 | 5,969 |
Accrued liabilities, reserves and other expenses | 3,718 | 3,837 |
Research and development credits | 4,140 | 2,360 |
Tax credits | 1,467 | 2,141 |
Stock based compensation | 1,600 | 1,739 |
Other | 121 | 200 |
Gross deferred income tax assets | 51,721 | 49,316 |
Deferred income tax liabilities: | ||
Intangible assets | (2,430) | (2,711) |
Prepaid and other expenses | (308) | (121) |
Gross deferred income tax liabilities | (2,738) | (2,832) |
Net deferred income tax assets | $ 48,983 | $ 46,484 |
Commitments and Contingencies
Commitments and Contingencies - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Commitments And Contingencies [Line Items] | |||
Rent expense | $ 17.7 | ||
Rent expense | $ 17.5 | $ 17.7 | |
Minimum | |||
Commitments And Contingencies [Line Items] | |||
LOC contract period requirement | 1 year | ||
Operating leases, term of contract | 1 month | ||
Maximum | |||
Commitments And Contingencies [Line Items] | |||
LOC contract period requirement | 3 years | ||
Operating leases, term of contract | 5 years |
Commitments and Contingencies_2
Commitments and Contingencies - Schedule of Future Minimum Lease Payments (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Lessee, Lease, Description [Line Items] | |
2020 | $ 5,447 |
2021 | 4,398 |
2022 | 2,765 |
2023 | 1,860 |
2024 | 1,409 |
Thereafter | 3,824 |
Total | 19,703 |
Office and transmitter buildings | |
Lessee, Lease, Description [Line Items] | |
2020 | 6,792 |
2021 | 5,056 |
2022 | 3,039 |
2023 | 1,968 |
2024 | 498 |
Thereafter | 217 |
Total | $ 17,570 |
Employee Benefit Plans (Details
Employee Benefit Plans (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Retirement Benefits [Abstract] | |||
Defined contribution plan, matching contribution | $ 1.6 | $ 1.6 | $ 1.1 |
Related Parties (Details)
Related Parties (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Related Party Transaction [Line Items] | |||
Rent expense | $ 17.7 | ||
Director | |||
Related Party Transaction [Line Items] | |||
Rent expense | $ 3.6 | ||
Expenses from transactions with related party | $ 3.6 | $ 3.8 |
Selected Quarterly Financial _3
Selected Quarterly Financial Information (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Revenues | $ 39,548 | $ 39,453 | $ 39,525 | $ 41,764 | $ 43,256 | $ 42,476 | $ 40,628 | $ 43,114 | $ 160,289 | $ 169,474 | $ 171,175 |
Operating income (loss) | (12,239) | (2,692) | (1,992) | 1,115 | 149 | (1,560) | (2,346) | 584 | (15,809) | (3,173) | 10,706 |
Net income (loss) | $ (9,511) | $ (1,326) | $ (670) | $ 742 | $ 189 | $ (840) | $ (1,172) | $ 345 | $ (10,765) | $ (1,479) | $ (15,306) |
Basic and diluted net income (loss) per common share (usd per share) | $ (0.50) | $ (0.07) | $ (0.03) | $ 0.04 | $ 0.01 | $ (0.04) | $ (0.06) | $ 0.02 | $ (0.56) | $ (0.08) | $ (0.76) |
Goodwill impairment | $ 8,800 | $ 8,849 | $ 0 | $ 0 |
VALUATION AND QUALIFYING ACCO_2
VALUATION AND QUALIFYING ACCOUNTS (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
SEC Schedule, 12-09, Valuation and Qualifying Accounts Disclosure [Line Items] | |||
Provisions for doubtful accounts, service credits, adjustments of non-cash transaction taxes and other | $ 694 | $ 1,922 | $ 222 |
Allowance for Doubtful Accounts, Service Credits and Other | |||
SEC Schedule, 12-09, Valuation and Qualifying Accounts Disclosure [Line Items] | |||
Provisions for doubtful accounts, service credits, adjustments of non-cash transaction taxes and other | 1,248 | ||
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at the Beginning of the Period | 1,705 | 1,065 | 1,056 |
Additions | 2,125 | 1,035 | |
Write-offs | (1,660) | (1,485) | (1,026) |
Balance at the End of the Period | $ 1,293 | $ 1,705 | $ 1,065 |
Uncategorized Items - spok-2019
Label | Element | Value |
Additional Paid-In Capital And Accumulated Other Comprehensive Income (Loss) [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ 11,000 |
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | (49,000) |
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ (300,000) |