8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported): May 5, 2010

USA Mobility, Inc.

(Exact name of registrant as specified in its charter)

Delaware	000-51027	16-1694797
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)
6850 Versar Center, Suite 420, Springfield, Virginia		22151
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (800) 611-8488

Not Applicable

Former name or former address, if changed since last report

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o     Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o     Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o     Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o     Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02 Results of Operations and Financial Condition.

On May 5, 2010, USA Mobility, Inc. (the “Company”) announced operating results for the first quarter of 2010. The full text of the press release issued in connection with the announcement is attached as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated into this Item 2.02 by reference. The information in this Item 2.02 of this Form 8-K and the Exhibit attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except as expressly set forth by specific reference in such a filing.

Item 7.01 Regulation FD Disclosure.

On May 6, 2010, USA Mobility, Inc. conducted a conference call for investors to discuss its financial results for the first quarter ended March 31, 2010. A replay of the call is available from

3:00 p.m. ET on May 6 until 11:59 p.m. on Thursday, May 20. The replay number is 888-203-1112 (toll-free) or 719-457-0820 (toll). The pass code for the replay is 5365764. The full text of the conference call is attached as Exhibit 99.2 to this Current Report on Form 8-K and is incorporated into this Item 7.01 by reference.

The information in this Item 7.01 of this Form 8-K and the Exhibit attached hereto shall not be deemed “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except as expressly set forth by specific reference in such a filing.

Item 8.01 Other Events.

On May 5, 2010, the Company’s Board of Directors declared a regular quarterly cash distribution of $0.25 per share of common stock. The cash distribution will be paid on June 25, 2010 to stockholders of record on May 20, 2010. Of the $0.25 cash distribution, the Company expects $0.23 will be a return of capital and $0.02 will be a dividend distribution. The full text of the press release issued in connection with the declaration is attached as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated into this Item 8.01 by reference.

The information in this Item 8.01 of this Form 8-K and the Exhibit attached hereto shall not be deemed “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except as expressly set forth by specific reference in such a filing.

Item 9.01 Financial Statements and Exhibits.

(a) Financial statements of business acquired:

Not applicable.

(b) Pro forma financial information:

Not applicable.

(c) Exhibits:

Exhibit 99.1

Description of Exhibit — USA Mobility, Inc. Press Release dated May 5, 2010 (furnished pursuant to Items 2.02 and 8.01; not “filed” for purposes of Section 18 of the Exchange Act)

Exhibit 99.2

Description of Exhibit — USA Mobility, Inc. Operating Results for the First Quarter Ended March 31, 2010 Earnings Call Transcript (furnished pursuant to Item 7.01; not “filed” for purposes of Section 18 of the Exchange Act)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	USA Mobility, Inc.
May 7, 2010	By:	/s/ Thomas L. Schilling
		Name:	Thomas L. Schilling
		Title:	Chief Operating Officer and Chief Financial Officer

Exhibit Index

Exhibit No.	Description
99.1	USA Mobility, Inc. Press Release dated May 5, 2010
99.2	USA Mobility, Inc. Operating Results for the First Quarter Ended March 31, 2010 Earnings Call Transcript

EX-99.1

Exhibit 99.1

News Release

For Immediate Release	Contact:	Bob Lougee (800) 611-8488
Wednesday, May 5, 2010		bob.lougee@usamobility.com

USA Mobility Reports First Quarter Operating Results;
Board Declares Quarterly Cash Distribution

Subscriber and Revenue Trends Improve;
Operating Expenses Again Reduced;
Cash Flow Margins Maintained

Springfield, VA (May 5, 2010) — USA Mobility, Inc. (Nasdaq: USMO), a leading provider of wireless messaging and communications services, today announced operating results for the first quarter ended March 31, 2010.

In addition, the Company’s Board of Directors declared a regular quarterly cash distribution of $0.25 per share, payable on June 25, 2010 to stockholders of record on May 20, 2010. Of the $0.25 cash distribution, the Company expects $0.23 will be a return of capital and $0.02 will be a dividend distribution.

Total revenue for the first quarter was $62.8 million, compared to $65.4 million in the fourth quarter of 2009 and $79.7 million in the year-earlier quarter. First quarter EBITDA (earnings before interest, taxes, depreciation, amortization and accretion) totaled $22.0 million, compared to $21.0 million in the fourth quarter and $28.6 million in the first quarter of 2009.

Net income for the first quarter was $8.9 million, or $0.39 per fully diluted share, compared to $10.0 million, or $0.43 per fully diluted share, in the year-earlier quarter.

First quarter results included:

• Net unit loss was 83,000 in the first quarter, compared to 115,000 in the prior quarter and 208,000 in the first quarter of 2009. Units in service totaled 2,099,000 at March 31, 2010, compared to 2,607,000 a year earlier.

• The quarterly rate of subscriber loss improved to 3.8 percent, compared to 5.0 percent in the fourth quarter and 7.4 percent in the first quarter of 2009. The annual rate of subscriber erosion was 19.5 percent in the first quarter, compared to 22.5 percent in the fourth quarter and 21.8 percent in the year-earlier quarter.

• The quarterly rate of revenue erosion improved to 4.0 percent, compared to 5.9 percent in the fourth quarter and 5.4 percent in the first quarter of 2009. The annual rate of revenue erosion for the first quarter was 21.2 percent, compared to 22.4 percent in the fourth quarter and 15.9 percent in the year-earlier quarter.

• Total paging ARPU (average revenue per unit) increased to $9.00 in the first quarter from $8.88 in the fourth quarter and $8.86 in the year-earlier quarter. Quarterly ARPU reached its highest level since the third quarter of 2005.

• Operating expenses (excluding depreciation, amortization and accretion) totaled $40.8 million in the first quarter, a reduction of $10.2 million, or 20.0 percent, from $51.1 million in the first quarter of 2009. Quarterly operating expenses declined 7.9 percent from the fourth quarter of 2009.

• EBITDA margin (or EBITDA as a percentage of revenue) was 35.0 percent, compared to 32.2 percent in the fourth quarter of 2009 and 35.9 percent in the year-earlier quarter.

• Capital expenses were $1.7 million, compared to $5.0 million in the fourth quarter of 2009.

• The Company repurchased 364,407 shares of common stock during the quarter under its buy back program, and approximately $20.4 million remains available for purchases under the currently approved plan.

• The Company’s cash balance at March 31, 2010 was $115.6 million.

Vincent D. Kelly, president and chief executive officer, said: “Despite a still sluggish economy, USA Mobility reported outstanding operating results for the first quarter that met or exceeded our key performance objectives and were consistent with the financial guidance we provided earlier this year. We were particularly pleased to see significant improvement in the pace of both subscriber and revenue erosion. Through our continued focus on cost reductions and maintaining operating margins we again generated sufficient cash flow to return significant capital to stockholders in the form of cash distributions and share repurchases.”

Kelly said the Company continued to focus sales and marketing efforts during the quarter around its core market segments of Healthcare, Government and Large Enterprise. “These core segments represented approximately 86.8 percent of our direct subscriber base and 81.5 percent of our direct paging revenue at the end of the first quarter. Healthcare continued to be our best performing market segment with the highest rate of gross placements and lowest rate of net unit loss as healthcare providers continue to benefit from the reliability of paging for their most critical messaging needs. In fact, our networks today carry the bulk of messaging traffic to hospitals across the

country, providing paging service to 44 percent of all U.S. hospitals and 63 percent of major hospitals (those with at least 200 beds).”

Thomas L. Schilling, chief operating officer and chief financial officer, said the Company continued to reduce operating expenses in the first quarter. “Operating expenses (excluding depreciation, amortization and accretion) decreased 20.0 percent from the year-earlier quarter,” Schilling noted, “including a 22.2 percent reduction in payroll expense and a 19.1 decline in site rent expense. In addition, operating expenses as a percentage of revenue was 65.0 percent in the first quarter versus 67.8 percent in the prior quarter, while the combination of lower expenses and higher ARPU resulted in an EBITDA margin of 35.0 percent as compared to 32.2 percent in the fourth quarter of 2009.”

The Company maintained its previous financial guidance for 2010 of revenues between $228 million to $238 million, operating expenses (excluding depreciation, amortization and accretion) between $158 million to $163 million, and capital expenses between $10 million to $12 million.

* * * * * * * * *

USA Mobility plans to host a conference call for investors on its first quarter results at 10:00 a.m. Eastern Time on Thursday, May 6, 2010. The dial-in number for the call is 877-440-5807 (toll-free) or 719-325-4803 (toll). The pass code for the call is 5365764. A replay of the call will be available from 3:00 p.m. ET on May 6 until 11:59 p.m. on Thursday, May 20. The replay number is 888-203-1112 (toll-free) or 719-457-0820 (toll). The pass code for the replay is 5365764.

* * * * * * * * *

USA Mobility’s Annual Meeting of Stockholders will be held at 9:00 a.m. Eastern Time on Wednesday, May 12, 2010 in Alexandria, VA.

About USA Mobility

USA Mobility, Inc., headquartered in Springfield, Virginia, is a comprehensive provider of reliable and affordable wireless communications solutions to the healthcare, government, large enterprise and emergency response sectors. As a single-source provider, USA Mobility‘s focus is on the business-to-business marketplace and supplying wireless connectivity solutions to organizations nationwide. The Company operates the largest one-way paging and advanced two-way paging networks in the United States. In addition, USA Mobility offers mobile voice and data services through Sprint Nextel and T-Mobile, including BlackBerry^® smartphones and GPS location applications. The Company’s product offerings include customized wireless connectivity systems for the healthcare, government and other campus environments. USA Mobility also offers M2M (machine-to-machine) telemetry solutions for numerous applications that include asset tracking, utility meter reading and other remote device monitoring applications on a national scale. For further information visit www.usamobility.com.

Safe Harbor Statement under the Private Securities Litigation Reform Act: Statements contained herein or in prior press releases which are not historical fact, such as statements regarding USA Mobility’s future operating and financial performance, are forward-looking statements for purposes of the safe harbor provisions under the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve risks and uncertainties that may cause USA Mobility’s actual results to be materially different from the future results expressed or implied by such forward-looking statements. Factors that could cause actual results to differ materially from those expectations include, but are not limited to, declining demand for paging products and services, the ability to continue to reduce operating expenses, future capital needs, competitive pricing pressures, competition from both traditional paging services and other wireless communications services, government regulation, reliance upon third-party providers for certain equipment and services, as well as other risks described from time to time in periodic reports and registration statements filed with the Securities and Exchange Commission. Although USA Mobility believes the expectations reflected in the forward-looking statements are based on reasonable assumptions, it can give no assurance that its expectations will be attained. USA Mobility disclaims any intent or obligation to update any forward-looking statements.

Tables to Follow

USA MOBILITY, INC.
CONDENSED CONSOLIDATED RESULTS OF OPERATIONS (a)

(unaudited and in thousands, except share and per share amounts)

	For the three months ended
	3/31/09			6/30/09			9/30/09			12/31/09			3/31/10
Revenues:
Paging service	$	72,021		$	67,972		$	63,308		$	59,657		$	57,832
Cellular		991			775			980			795			708
Product sales		5,271			5,269			4,354			3,927			3,358
Other		1,408			1,129			856			993			886
Total revenues		79,691			75,145			69,498			65,372			62,784
Operating expenses:
Cost of products sold		1,669			1,421			1,593			1,513			1,209
Service, rental and maintenance		22,955			21,290			20,950			20,115			18,941
Selling and marketing		6,062			5,600			5,198			4,955			4,557
General and administrative		20,186			22,801			16,050			15,289			15,812
Severance and restructuring		190			52			15			2,480			314
Depreciation, amortization and accretion		11,270			11,174			10,689			8,781			7,304
Total operating expenses		62,332			62,338			54,495			53,133			48,137
% of total revenues		78.2	%		83.0	%		78.4	%		81.3	%		76.7	%
Operating income		17,359			12,807			15,003			12,239			14,647
% of total revenues		21.8	%		17.0	%		21.6	%		18.7	%		23.3	%
Interest income (expense), net		26			28			16			(1	)		3
Other income (expense), net		112			(42	)		185			275			78
Income before income tax expense (benefit)		17,497			12,793			15,204			12,513			14,728
Income tax expense (benefit)		7,516			(31,953	)		6,003			8,883			5,843
Net income	$	9,981		$	44,746		$	9,201		$	3,630		$	8,885
Basic net income per common share	$	0.43		$	1.96		$	0.40		$	0.16		$	0.39
Diluted net income per common share	$	0.43		$	1.93		$	0.40		$	0.16		$	0.39
Basic weighted average common shares outstanding		23,134,072			22,858,573			22,856,951			22,830,040			22,654,240
Diluted weighted average common shares outstanding		23,479,796			23,200,736			23,194,360			23,167,729			22,967,192
Reconciliation of operating income to EBITDA (b):
Operating income	$	17,359		$	12,807		$	15,003		$	12,239		$	14,647
Add back: depreciation, amortization and accretion		11,270			11,174			10,689			8,781			7,304
EBITDA	$	28,629		$	23,981		$	25,692		$	21,020		$	21,951
% of total revenues		35.9	%		31.9	%		37.0	%		32.2	%		35.0	%

(a)	Slight variations in totals are due to rounding.
(b)	EBITDA or earnings before interest, taxes, depreciation, amortization and accretion is a non-GAAP measure and is presented for analytical purposes only.

USA MOBILITY, INC.
UNITS IN SERVICE ACTIVITY (a)

(unaudited and in thousands)

	For the three months ended
	3/31/09			6/30/09			9/30/09			12/31/09			3/31/10
Units in service
Beginning units in service
Direct one-way		2,349			2,198			2,079			1,969			1,881
Direct two-way		171			157			147			141			133
Total direct		2,520			2,355			2,226			2,110			2,014
Indirect one-way		196			161			139			116			101
Indirect two-way		99			91			84			71			67
Total indirect		295			252			223			187			168
Total beginning units in service		2,815			2,607			2,449			2,297			2,182
Gross placements
Direct one-way		67			74			64			55			53
Direct two-way		6			7			9			5			5
Total direct		73			81			73			60			58
Indirect one-way		8			9			7			6			3
Indirect two-way		4			2			1			2			15
Total indirect		12			11			8			8			18
Total gross placements		85			92			81			68			76
Gross disconnects
Direct one-way		(218	)		(193	)		(174	)		(143	)		(130	)
Direct two-way		(20	)		(17	)		(15	)		(13	)		(12	)
Total direct		(238	)		(210	)		(189	)		(156	)		(142	)
Indirect one-way		(43	)		(31	)		(30	)		(21	)		(14	)
Indirect two-way		(12	)		(9	)		(14	)		(6	)		(3	)
Total indirect		(55	)		(40	)		(44	)		(27	)		(17	)
Total gross disconnects		(293	)		(250	)		(233	)		(183	)		(159	)
Net (loss) gain
Direct one-way		(151	)		(119	)		(110	)		(88	)		(77	)
Direct two-way		(14	)		(10	)		(6	)		(8	)		(7	)
Total direct		(165	)		(129	)		(116	)		(96	)		(84	)
Indirect one-way		(35	)		(22	)		(23	)		(15	)		(11	)
Indirect two-way		(8	)		(7	)		(13	)		(4	)		12
Total indirect		(43	)		(29	)		(36	)		(19	)		1
Total net change		(208	)		(158	)		(152	)		(115	)		(83	)
Ending units in service
Direct one-way		2,198			2,079			1,969			1,881			1,804
Direct two-way		157			147			141			133			126
Total direct		2,355			2,226			2,110			2,014			1,930
Indirect one-way		161			139			116			101			90
Indirect two-way		91			84			71			67			79
Total indirect		252			223			187			168			169
Total ending units in service		2,607			2,449			2,297			2,182			2,099

(a) Slight variations in totals are due to rounding.

USA MOBILITY, INC.
AVERAGE REVENUE PER UNIT (ARPU) AND CHURN (a)

(unaudited)

	For the three months ended
	3/31/09			6/30/09			9/30/09			12/31/09			3/31/10
ARPU
Direct one-way	$	8.11		$	8.18		$	8.08		$	8.04		$	8.16
Direct two-way		23.68			23.62			23.42			23.59			23.61
Total direct		9.15			9.21			9.10			9.06			9.17
Indirect one-way		7.05			7.43			7.51			7.77			8.78
Indirect two-way		4.58			5.19			5.49			5.14			4.84
Total indirect		6.19			6.60			6.74			6.73			7.04
Total one-way		8.03			8.14			8.05			8.02			8.19
Total two-way		16.66			16.86			17.09			17.32			16.76
Total paging ARPU	$	8.86		$	8.96		$	8.89		$	8.88		$	9.00
Gross disconnect rate (b)
Direct one-way		-9.3	%		-8.8	%		-8.4	%		-7.2	%		-6.9	%
Direct two-way		-11.8	%		-11.0	%		-10.2	%		-8.9	%		-9.1	%
Total direct		-9.5	%		-8.9	%		-8.5	%		-7.3	%		-7.1	%
Indirect one-way		-22.0	%		-19.4	%		-21.9	%		-18.9	%		-13.7	%
Indirect two-way		-11.6	%		-9.1	%		-16.4	%		-8.5	%		-4.9	%
Total indirect		-18.5	%		-15.6	%		-19.8	%		-14.9	%		-10.1	%
Total one-way		-10.3	%		-9.5	%		-9.2	%		-7.9	%		-7.3	%
Total two-way		-11.7	%		-10.3	%		-12.5	%		-8.8	%		-7.7	%
Total paging gross disconnect rate		-10.4	%		-9.6	%		-9.5	%		-8.0	%		-7.3	%
Net (loss) gain rate (c)
Direct one-way		-6.4	%		-5.4	%		-5.3	%		-4.4	%		-4.1	%
Direct two-way		-8.5	%		-6.4	%		-4.4	%		-5.5	%		-5.0	%
Total direct		-6.6	%		-5.5	%		-5.2	%		-4.5	%		-4.2	%
Indirect one-way		-17.8	%		-13.7	%		-16.9	%		-13.6	%		-10.5	%
Indirect two-way		-8.2	%		-7.2	%		-14.9	%		-5.2	%		17.1	%
Total indirect		-14.6	%		-11.3	%		-16.1	%		-10.4	%		0.7	%
Total one-way		-7.3	%		-6.0	%		-6.0	%		-5.0	%		-4.4	%
Total two-way		-8.4	%		-6.7	%		-8.2	%		-5.4	%		2.5	%
Total paging net (loss) gain rate		-7.4	%		-6.0	%		-6.2	%		-5.0	%		-3.8	%

(a)	Slight variations in totals are due to rounding.
(b)	Gross disconnect rate is current period disconnected units divided by prior period ending units in service.
(c)	Net (loss) gain rate is net current period placements and disconnected units in service divided by prior period ending units in service.

USA MOBILITY, INC.
SUPPLEMENTAL INFORMATION BY MARKET SEGMENT (a)

(unaudited)

	For the three months ended
	3/31/09			6/30/09			9/30/09			12/31/09			3/31/10
Gross placement rate (b)
Healthcare		3.7	%		4.4	%		3.8	%		3.4	%		3.5	%
Government		1.7	%		2.4	%		2.4	%		1.9	%		1.8	%
Large enterprise		2.4	%		2.2	%		3.3	%		2.2	%		2.1	%
Other		2.4	%		2.5	%		2.3	%		2.2	%		2.4	%
Total direct		2.9	%		3.4	%		3.3	%		2.8	%		2.9	%
Total indirect		3.9	%		4.3	%		3.7	%		4.5	%		10.9	%
Total		3.0	%		3.5	%		3.3	%		3.0	%		3.5	%
Gross disconnect rate (b)
Healthcare		-6.8	%		-6.2	%		-6.7	%		-5.5	%		-4.9	%
Government		-9.9	%		-10.7	%		-10.7	%		-9.4	%		-9.1	%
Large enterprise		-13.3	%		-13.0	%		-10.7	%		-9.4	%		-10.3	%
Other		-13.0	%		-12.4	%		-10.6	%		-10.1	%		-11.0	%
Total direct		-9.5	%		-8.9	%		-8.5	%		-7.3	%		-7.1	%
Total indirect		-18.5	%		-15.6	%		-19.8	%		-14.9	%		-10.1	%
Total		-10.4	%		-9.6	%		-9.5	%		-8.0	%		-7.3	%
Net (loss) gain rate (b)
Healthcare		-3.1	%		-1.8	%		-2.9	%		-2.1	%		-1.4	%
Government		-8.2	%		-8.4	%		-8.3	%		-7.5	%		-7.4	%
Large enterprise		-10.9	%		-10.9	%		-7.4	%		-7.2	%		-8.1	%
Other		-10.6	%		-10.0	%		-8.3	%		-7.9	%		-8.6	%
Total direct		-6.6	%		-5.5	%		-5.2	%		-4.5	%		-4.2	%
Total indirect		-14.6	%		-11.3	%		-16.1	%		-10.4	%		0.7	%
Total		-7.4	%		-6.0	%		-6.2	%		-5.0	%		-3.8	%
End of period units in service % of total (b)
Healthcare		44.9	%		49.8	%		51.5	%		53.2	%		54.5	%
Government		17.2	%		15.6	%		15.3	%		14.9	%		14.4	%
Large enterprise		12.0	%		11.8	%		11.8	%		11.4	%		10.9	%
Other		16.2	%		13.7	%		13.2	%		12.8	%		12.1	%
Total direct		90.3	%		90.9	%		91.8	%		92.3	%		91.9	%
Total indirect		9.7	%		9.1	%		8.2	%		7.7	%		8.1	%
Total		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%

(a)	Slight variations in totals are due to rounding.
(b)	Changes in the classification of units in service are reflected in the quarter when such changes are identified. Such changes are then appropriately reflected in calculating the gross placement, gross disconnect and net (loss) gain rates.

USA MOBILITY, INC.
SUPPLEMENTAL INFORMATION — DIRECT UNITS IN SERVICE AND CELLULAR ACTIVATIONS (a)

(unaudited)

	For the three months ended
	3/31/09			6/30/09			9/30/09			12/31/09			3/31/10
Account size ending units in service (000’s)
1 to 3 units		137			126			118			109			101
4 to 10 units		82			75			70			66			62
11 to 50 units		199			183			168			158			149
51 to 100 units		125			112			104			97			92
101 to 1,000 units		626			580			546			519			499
>1,000 units		1,186			1,150			1,104			1,065			1,027
Total		2,355			2,226			2,110			2,014			1,930
End of period units in service % of total direct
1 to 3 units		5.8	%		5.7	%		5.6	%		5.4	%		5.2	%
4 to 10 units		3.5	%		3.4	%		3.3	%		3.3	%		3.2	%
11 to 50 units		8.4	%		8.2	%		8.0	%		7.8	%		7.7	%
51 to 100 units		5.3	%		5.0	%		4.9	%		4.8	%		4.8	%
101 to 1,000 units		26.6	%		26.0	%		25.9	%		25.8	%		25.9	%
>1,000 units		50.4	%		51.7	%		52.3	%		52.9	%		53.2	%
Total		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%
Account size net loss rate
1 to 3 units		-7.8	%		-7.9	%		-6.9	%		-7.4	%		-7.6	%
4 to 10 units		-8.8	%		-7.9	%		-6.7	%		-6.1	%		-5.3	%
11 to 50 units		-8.9	%		-8.2	%		-7.7	%		-5.9	%		-5.8	%
51 to 100 units		-6.2	%		-10.1	%		-7.6	%		-6.8	%		-4.4	%
101 to 1,000 units		-8.0	%		-7.4	%		-5.9	%		-4.9	%		-3.7	%
>1,000 units		-5.1	%		-3.1	%		-4.0	%		-3.5	%		-3.7	%
Total		-6.6	%		-5.5	%		-5.2	%		-4.5	%		-4.2	%
Account size ARPU
1 to 3 units	$	14.73		$	15.07		$	14.98		$	15.03		$	15.28
4 to 10 units		14.00			14.30			14.24			14.21			14.37
11 to 50 units		11.41			11.65			11.54			11.45			11.86
51 to 100 units		10.30			10.13			10.06			10.06			10.67
101 to 1,000 units		8.94			9.04			8.89			8.82			9.00
>1,000 units		7.77			7.80			7.76			7.79			7.80
Total	$	9.15		$	9.21		$	9.10		$	9.06		$	9.17
Cellular revenue
Number of activations		2,389			2,207			2,633			2,253			2,354
Revenue from cellular services (000’s)	$	991		$	775		$	980		$	795		$	708

(a) Slight variations in totals are due to rounding.

USA MOBILITY, INC.
CONSOLIDATED OPERATING EXPENSES SUPPLEMENTAL INFORMATION (a)

(unaudited and in thousands)

	For the three months ended
	3/31/09		6/30/09		9/30/09			12/31/09		3/31/10
Cost of products sold	$	1,669	$	1,421	$	1,593		$	1,513	$	1,209
Service, rental and maintenance
Site rent		11,218		10,223		10,422			9,871		9,079
Telecommunications		4,485		4,284		3,945			3,885		3,831
Payroll and related		5,631		5,286		4,988			4,725		4,586
Stock based compensation		49		7		13			12		6
Other		1,572		1,490		1,582			1,622		1,439
Total service, rental and maintenance		22,955		21,290		20,950			20,115		18,941
Selling and marketing
Payroll and related		4,175		3,711		3,366			3,199		2,964
Commissions		1,201		1,422		1,328			1,131		1,164
Stock based compensation		109		26		26			26		17
Other		577		441		478			599		412
Total selling and marketing		6,062		5,600		5,198			4,955		4,557
General and administrative
Payroll and related		9,075		7,754		7,213			7,089		6,912
Stock based compensation		569		241		241			241		240
Bad debt		850		750		699			654		713
Facility rent		1,628		1,446		1,457			1,411		1,354
Telecommunications		771		721		720			702		657
Outside services		4,514		4,063		3,269			3,051		3,267
Taxes, licenses and permits		1,101		1,695		(680	)		660		1,591
Other		1,678		6,131		3,131			1,481		1,078
Total general and administrative		20,186		22,801		16,050			15,289		15,812
Severance and restructuring		190		52		15			2,480		314
Depreciation, amortization and accretion		11,270		11,174		10,689			8,781		7,304
Operating expenses	$	62,332	$	62,338	$	54,495		$	53,133	$	48,137
Capital expenditures	$	6,054	$	4,355	$	1,806		$	5,014	$	1,725

(a) Slight variations in totals are due to rounding.

USA MOBILITY, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (a)

(in thousands)

	12/31/09		3/31/10
			(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	109,591	$	115,555
Accounts receivable, net		19,051		17,354
Taxes receivables		5,117		5,136
Prepaid expenses and other		3,016		4,267
Deferred income tax assets, net		1,068		462
Total current assets		137,843		142,774
Property and equipment, net		41,295		36,180
Intangible assets, net		226		466
Deferred income tax assets, net		32,123		26,952
Other assets		2,061		405
Total assets	$	213,548	$	206,777
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable and accrued liabilities	$	35,214	$	28,929
Customer deposits		888		837
Deferred revenue		7,422		7,035
Total current liabilities		43,524		36,801
Other long-term liabilities		11,228		11,901
Total liabilities		54,752		48,702
Stockholders’ equity:
Preferred stock		—		—
Common stock		2		2
Additional paid-in capital		137,378		133,413
Retained earnings		21,416		24,660
Total stockholders’ equity		158,796		158,075
Total liabilities and stockholders’ equity	$	213,548	$	206,777

(a) Slight variations in totals are due to rounding.

USA MOBILITY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (a)

(unaudited and in thousands)

	For the three months ended
	3/31/09			3/31/10
Cash flows from operating activities:
Net income	$	9,981		$	8,885
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, amortization and accretion		11,270			7,304
Deferred income tax expense		6,954			5,777
Amortization of stock based compensation		727			263
Provisions for doubtful accounts, service credits and other		1,517			1,225
Non-cash transaction tax accrual adjustments		(1,394	)		(350	)
Loss on disposals of property and equipment		—			59
Changes in assets and liabilities:
Accounts receivable		1,000			472
Prepaid expenses, intangibles and other assets		345			(31	)
Accounts payable and accrued liabilities		(2,373	)		(5,273	)
Customer deposits and deferred revenue		(722	)		(438	)
Net cash provided by operating activities		27,305			17,893
Cash flows from investing activities:
Purchases of property and equipment		(6,054	)		(1,725	)
Proceeds from disposals of property and equipment		7			38
Net cash used in investing activities		(6,047	)		(1,687	)
Cash flows from financing activities:
Cash distributions to stockholders		(28,517	)		(5,619	)
Purchase of common stock		(2,698	)		(4,623	)
Net cash used in financing activities		(31,215	)		(10,242	)
Net (decrease) increase in cash and cash equivalents		(9,957	)		5,964
Cash and cash equivalents, beginning of period		75,032			109,591
Cash and cash equivalents, end of period	$	65,075		$	115,555
Supplemental disclosure:
Interest paid	$	—		$	1
Income taxes paid (state and local)	$	15		$	—

(a) Slight variations in totals are due to rounding.

EX-99.2

Exhibit 99.2

USA Mobility, Inc. Investor Conference Call

May 6, 2010

10:00 a.m. Eastern Time

Operating Results for the 1st Quarter Ended March 31, 2010

Operator:

Good morning and welcome to USA Mobility’s First Quarter Investor Conference Call. Today’s call is being recorded. Online today we have Vince Kelly, President and CEO, and Tom Schilling, Chief Operating Officer and CFO. At this time for opening comments I will turn the call over to Mr. Kelly. Please go ahead, sir.

Mr. Kelly: Good Morning. Thank you for joining us for our first quarter investor update. Before we discuss our operating results, I want to remind everyone that today’s conference call may include forward-looking statements that are subject to risks and uncertainties relating to USA Mobility’s future financial and business performance. Such statements may include estimates of revenue, expenses, and income, as well as other predictive statements or plans which are dependent upon future events or conditions. These statements represent the Company’s estimates only on the date of this conference call and are not intended to give any assurance as to actual future results. USA Mobility’s actual results could differ materially from those anticipated in these forward-looking statements. Although these statements are based upon assumptions that the Company believes to be reasonable, they are subject to risks and uncertainties. Please review the risk factors section relating to our operations and the business environment in which we compete, contained in our 2009 Form 10-K, our first quarter Form 10-Q, and related Company documents filed with the Securities and Exchange Commission. Please note that USA Mobility assumes no obligation to update any forward-looking statements from past or present filings and conference calls.

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Let me begin by highlighting what we believe was an extraordinarily successful first quarter for USA Mobility. Despite a still sluggish economy, high jobless rates nationwide, and continued migration of customers to alternative wireless services, we ended the quarter ahead of our key operating goals for subscribers, total revenue, average revenue per unit (or ARPU), operating expenses, and operating cash flow. At the same time, we were able to maintain cash flow margins, operate profitably within a low-cost operating structure, and once again return capital to our stockholders. Tom will discuss our financial results in more detail in a few minutes, but first I want to point out just a few of the key accomplishments we achieved during the quarter.

1.	Subscriber and revenue trends showed significant improvement in the first quarter as the economic recovery gained momentum and unemployment rates began to stabilize. Our annual rate of subscriber erosion for the first quarter of 2010 was the lowest in 15 months while our quarterly loss rate was the best in more than two years.
2.	We are very pleased with the progress we made in reducing Operating Expenses in the first quarter. Excluding depreciation, amortization and accretion, Operating Expenses declined 20 percent over the past year and are down nearly 40 percent from two years ago.
3.	The slow down in revenue erosion and continued cost management resulted in an increase in earnings before interest, taxes, depreciation, amortization and accretion (or EBITDA) for the first quarter. It also allowed us to maintain a very strong EBITDA margin of 35 percent.
4.	Most importantly for stockholders, we continued to meet our goal of generating sufficient free cash flow during the first quarter to return

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	capital to stockholders consistent with our capital allocation strategy. We produced $17.9 million in cash from operations in the first quarter, allowing us to pay a regular quarterly cash distribution of $0.25 per share on March 31, 2010. In addition, our Board of Directors (“Board”) yesterday declared a regular quarterly cash distribution of $0.25 per share to be paid June 25, 2010.
5.	We purchased 364,407 shares of the Company’s common stock during the first quarter under our Stock Repurchase Program that commenced in August 2008. As of April 1st, approximately $20.4 million remain available for purchases under the currently approved plan.

Overall, we are very pleased with our results for the first quarter and believe we’re well positioned for a solid year in 2010. At this point I’ll ask Tom Schilling, our COO and CFO, to review our first quarter financial results and provide additional comments on our recent operating performance Tom.

Mr. Schilling:	Thanks Vince, and good morning.
	As Vince mentioned, we are very pleased with the Company’s first quarter results, which are in line with our previously announced financial guidance. Continued reductions in operating expenses, combined with reduced customer churn and an increase in ARPU contributed to strong cash flows and a higher EBITDA margin for the quarter.
	We were especially pleased with the improvement in subscriber trends during the quarter, which had deteriorated significantly for most of 2009 as a result of the weak economy and the sharp increase in unemployment rates nationwide.

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We ended the quarter with 2,099,000 subscribers, a net decrease of 83,000 units during the quarter, compared to a decline of 115,000 units in the prior quarter and 208,000 in the year-earlier quarter. The quarterly rate of subscriber loss improved to 3.8 percent from 5.0 percent in the fourth quarter and 7.4 percent in the year-earlier quarter. Our annual rate of net unit loss improved to 19.5 percent, compared to 22.5 percent in the fourth quarter and 21.8 percent in the year-earlier quarter.

Total Gross Placements increased to 76,000 in the first quarter from 68,000 in the fourth quarter, while Disconnects declined to 159,000 from 183,000 in the prior quarter.

Healthcare continues to be our most stable market segment with the highest gross placement rate and lowest net unit loss rate. In the first quarter, the gross placement rate for Healthcare was 3.5 percent and the net unit loss rate was 1.4 percent, compared to 3.4 percent and 2.1 percent, respectively, for the prior quarter. Overall, Healthcare contributed nearly 70 percent of all gross placements in our direct channel during the quarter. At March 31^st, Healthcare represented 54.5 percent of our total subscriber base, compared to 44.9 percent a year ago.

Total Paging ARPU was $9.00 in the first quarter, compared to $8.88 in the fourth quarter and $8.86 in the first quarter of 2009. The increase in ARPU, which reached its highest level in nearly five years, is a result of our ongoing initiative to adjust prices for our services to better reflect the value provided to our customers.

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Paging Revenue in the first quarter was $57.8 million, a decline of 3.1 percent from $59.7 million in the fourth quarter. The annual rate of decline was 19.7 percent in the first quarter, compared to 21.5 percent in the prior quarter.

Product Sales declined 14.5 percent to $3.4 million in the first quarter from the fourth quarter, due mostly to lower Lost Pager Revenue reflecting the improvement in disconnect rates. Cellular phone sales and Other Revenue also declined from the prior quarter by 10.9 percent and 10.8 percent, respectively, although the number of cellular activations was up slightly from the fourth quarter. These categories represented less than 3 percent of total Revenues.

Total Revenue for the first quarter was $62.8 million, compared to $65.4 million in the fourth quarter and $79.7 million in the first quarter of 2009. The quarterly rate of Revenue erosion improved to 4.0 percent, compared to 5.9 percent in the fourth quarter and 5.4 percent in the year-earlier quarter. Revenue declined 21.2 percent on an annual basis in the first quarter compared to 22.4 percent in the fourth quarter and 15.9 percent in the year-ago quarter.

Turning to Operating Expenses, we again made excellent progress in the first quarter. Total Operating Expenses (excluding depreciation, amortization and accretion) were $40.8 million, a reduction of $10.2 million, or 20.0 percent from the first quarter of 2009. First quarter Operating Expenses declined 7.9 percent from the fourth quarter and represented 65.0 percent of revenue compared to 67.8 percent for the prior quarter.

Payroll expense, the Company’s largest expense item, decreased 22.2 percent in the first quarter to $15.6 million from $20.1 million in the first quarter of 2009.

5

Headcount at March 31^st was 628, a reduction of 20.1 percent from 786 a year earlier. As we’ve noted previously, we will continue to adjust staffing levels as necessary in order to best meet our current and anticipated business needs and customer requirements.

Site Rent expense, our second largest operating expense, declined 8.0 percent to $9.1 million in the first quarter versus the prior quarter, and 19.1 percent from the year-earlier quarter, as we continue our network rationalization program, including deconstructing sites, renegotiating site leases and moving to less costly sites. At March 31^st, we operated 6,777 active transmitters, compared to 7,123 at year-end. The number of transmitters at customer-provided sites — that is, those with no associated rent expense — was 2,479 for the quarter, down slightly from 2,522 at year-end. We reduced the number of our “paid” active transmitters to 4,298 at March 31^st from 4,601 at December 31, 2009.

All Other Expenses were $16.1 million in the first quarter as compared to $19.8 million in the first quarter of 2009, a reduction of 18.4 percent reflecting our management of all other costs of our business.

EBITDA for the first quarter was $22.0 million, compared to $21.0 million in the fourth quarter and $28.6 million in the first quarter of 2009. EBITDA margin increased to 35.0 percent in the first quarter, compared to 32.2 percent in the fourth quarter and 35.9 percent in the year-earlier quarter. A schedule reconciling Operating Income to EBITDA has been included in our earnings release.

Capital Expenses were $1.7 million in the first quarter, compared to $5.0 million in the fourth quarter and $6.1 million in the first quarter of 2009. The decrease was due principally to the timing of pager device purchases.

6

Net Income for the first quarter was $8.9 million, or $0.39 per fully diluted share, compared to $10.0 million, or $0.43 per fully diluted share, for the year-ago quarter.

As you may have noted in our press release we expect $0.02 of our quarterly cash distribution will be treated as a dividend distribution and the remaining $0.23 as return of capital, where as in prior years our cash distributions were entirely a return of capital. The reason for this change is we now expect to generate current year income under the IRS rules for Current Earnings and Profits, and therefore our cash distributions will be treated as dividend distributions up to the amount of taxable income. The allocation between dividend and return of capital is based on current trends that are subject to change. A determination of the split between taxable dividend and return of capital on our total cash distributions for 2010 will be made prior to January 31, 2011.

Just to be clear any taxable income we generate in 2010 will be substantially offset by our tax net operating losses, so we do not expect any significant cash liability for Federal income taxes.

With respect to our financial expectations for full-year 2010, we are maintaining the financial guidance we provided on February 24th. To repeat that earlier guidance, we expect Revenues for 2010 to range from $228 million to $238 million, Operating Expenses (excluding depreciation, amortization and accretion) to be between $158 million and $163 million, and Capital Expenses to range between $10 million and $12 million. I would again remind you that our projections are based on current trends and that those trends are always subject to change.

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	With that, I’ll turn it back over to Vince.
Mr. Kelly:	Thanks, Tom.
	Before we take your questions, I wanted to address a few other items that may be of interest to investors:

• First, I’ll provide a few sales and marketing highlights from the first quarter;

• Second, I’ll briefly review our current capital allocation strategy;

• And, finally, I’ll comment on our upcoming Annual Meeting of Stockholders.

Looking at our selling and marketing activities in the first quarter, we continued to focus on providing wireless messaging solutions to our target market segments of Healthcare, Government and Large Enterprise. These core segments represented approximately 87 percent of our direct subscriber base at the end of the quarter, up slightly from 86 percent at the end of 2009 and 82 percent in the same quarter a year ago. They also accounted for approximately 82 percent of our direct paging revenue in the first quarter compared to 76 percent in the year-earlier quarter. Our Healthcare segment continued to be a major contributor during the first quarter, generating approximately 53 percent of total direct paging revenue.

Our cellular business also made significant progress during the first quarter with total activations up from the prior quarter. It was the first full quarter since

8

bringing on T-Mobile as a second provider, adding to our long-standing and valuable relationship with Sprint. As expected, T-Mobile has opened up many new opportunities for us to pursue, where a lower-cost solution is required.

We continued progress toward full commercialization of our I-Land messaging network during the first quarter. The I-Land system, which we introduced last November, is a two-way paging solution that offers the messaging speed of an in-house system with full wide-area roaming capabilities. The system’s two-way feature also allows for tracking and reporting of message status, plus feedback to the customer when messages have been received and read by the recipient. To date, the response to our campus-based messaging system has been very positive. Currently, we are in the final phase of deploying our first system, with another deployment in the early stages. And we are in late-stage discussions with numerous other major accounts. I would also note that we regard the I-Land System as a very important product for us for three main reasons: (1) it demonstrates our commitment to serving the evolving needs of our customers; (2) it reinforces the relevance of paging technology to the healthcare and emergency messaging sectors; and (3) as a unique and proprietary service, it clearly sets USA Mobility apart from the rest of the paging industry.

With respect to our current capital allocation strategy, I would note that the Board and management remain committed to our long-stated goal of returning capital to stockholders. That is a goal we established more than five years ago and it’s one that we intend to pursue as long as the Company continues to generate sufficient cash flow.

9

As most of you know, we began paying special cash distributions in 2005 and paid our first quarterly cash distribution in 2006. Since then we have continued to pay regular quarterly cash distributions. The Board also has declared special cash distributions from time to time, including in both 2007 and 2009. In addition, we initiated a share buy back program in 2008, which was recently extended through the end of this year.

With regard to how we plan to allocate capital going forward, the Board is continuing to review all of our options. As of today, given our projections for operating cash flow in 2010, we expect to continue paying quarterly cash distributions of 25 cents per share over the near-term. We believe this payout represents a strong yield based on our current share price. Also, we may consider paying special cash distributions from time to time, depending on a variety of factors, including our cash levels and other alternatives. As for the prospect of extending our share repurchase plan beyond this year, the Board expects to re-evaluate the entire program later this fall and decide on a future course of action before year-end.

Despite the Company’s solid performance in the first quarter and over the past several years, our ability to return capital to stockholders in our current form will diminish over time as our revenue and subscriber base continue to contract. Therefore, as we discussed on our fourth quarter earnings call, decisions regarding capital allocation will be weighed against other opportunities for creating long-term stockholder value, which may include acquisitions that provide improved revenue stability and more fully use our existing assets.

10

Finally, with regard to our Annual Meeting of Stockholders, the meeting will be held on May 12^th, 2010 at 9:00 a.m. Eastern Time in Alexandria, Virginia. Given the limited number of items on the agenda, however, I expect the meeting — including management’s remarks — will be fairly brief. Nonetheless, all stockholders are welcome to attend, of course, and we will be happy to respond to any questions you might have for us at that time.

In summary, we are very pleased with our first quarter results and believe we are off to an excellent start in 2010. Since our formational merger in late 2004, we have generated significant free cash flow, distributed more than $328 million in distributions to our stockholders, paid down $140 million of debt incurred to fund the merger, bought back $47.5 million of Company stock and built a cash balance exceeding $115 million. That is well over $600 million of value in an industry many had written off years ago. Despite this progress, we believe we have much more to accomplish in the years ahead, and we are currently busy working on ways to continue to create and return value to stockholders and extend that value when we can.

At this point I will ask the operator to open up the line for your questions. We would ask you to limit your initial questions to one and a follow-up. After that, we will take additional questions as time allows. Operator?

[Investor Q&A]

	CONCLUDING COMMENTS:
Mr. Kelly:	Thank you for joining us today. We look forward to speaking with you after we release our second quarter results. Thanks again and have a great day!

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