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 10, 2005

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.)
6677 Richmond Highway, Alexandria, Virginia		22306
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (703) 718-6600

     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 (see General Instruction A.2. below):

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))

TABLE OF CONTENTS

	Item 2.02. Results of Operations and Financial Condition
	Item 9.01 Financial Statements and Exhibits.
SIGNATURES
Exhibit List
Exhibit 99.1

Item 2.02. Results of Operations and Financial Condition

On May 10, 2005, USA Mobility, Inc. announced its financial results for the first quarter ended March 31, 2005. 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 9.01 Financial Statements and Exhibits.

(a)	Financial statements of business acquired:
	Not applicable.
(b)	Pro forma financial information:
	Not applicable.
(c)	Exhibits.

Exhibit Number	Description
99.1	Press Release Dated May 10, 2005

2

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.
	By:	/s/ Thomas L. Schilling
		Name:	Thomas L. Schilling
Dated: May 11, 2005		Title:	Chief Financial Officer

3

Exhibit List

Exhibit Number	Description
99.1	Press Release Dated May 10, 2005

4

EX-99.1

Exhibit 99.1

“Your Business Communications Partner”

News Release

For Immediate Release	Contact: Bob Lougee (703) 721-3080
Tuesday, May 10, 2005

USA Mobility Reports First Quarter Operating Results

Alexandria, VA (May 10, 2005) — USA Mobility, Inc. (Nasdaq: USMO), a leading provider of wireless messaging services, today announced operating results for the quarter ended March 31, 2005. The results represent the first full quarter of combined operations for USA Mobility, formed on November 16, 2004 by the merger of Arch Wireless, Inc. and Metrocall Holdings, Inc.

Reported revenue for the first quarter of 2005 increased 34% to $166 million, compared to $124 million in the first quarter of 2004, with the increase due entirely to the inclusion of Metrocall revenue for three-month period. Reported net income for the first quarter of 2005 was $1.3 million, or $0.05 per fully diluted share, compared to net income of $4.9 million, or $0.24 per fully diluted share, in the year-earlier quarter. Included in the first quarter 2005 operating expense were severance and retention related costs of $5.0 million, including $4.3 million to settle the arbitration case with three former Arch executives. USA Mobility’s historical financials are those of Arch Wireless, the accounting acquirer in the merger.

USA Mobility reported a net decline of 344,000 messaging units in service during the first quarter of 2005, comprised of 316,000 one-way messaging units and 28,000 two-way messaging units. Messaging units in service totaled 5,858,000 at March 31, 2005, with 4,790,000 direct units in service and 1,068,000 indirect units in service. One-way units in service at March 31, 2005 totaled 5,357,000 while two-way units in service totaled 501,000. For the quarter, average revenue per unit was $9.72 for direct units in service and $4.06 per indirect unit in service.

“We continued to make substantial progress during the quarter toward our merger integration objectives,” said Vincent D. Kelly, president and chief executive officer. “Our unit in service reduction of 344,000 represents an improvement over our pro forma fourth quarter 2004 loss of 384,000 and our pro forma first quarter 2004 loss of 499,000. Although our industry remains challenging, we continue to believe the merger-related benefits of lower expenses and operational synergies will allow us to become more efficient over time.”

Kelly said merger integration activities during the first quarter included ongoing consolidation of numerous back-office and administrative functions, including the process of combining five customer service operations and three distribution centers and converting to a single customer service and billing platform. “In addition,” Kelly said, “we’ve begun the process to deconstruct one of our two-way networks and consolidate our one-way networks. Rationalization of our technical infrastructure and network operations will be an ongoing process as we look to match our network capacity to the requirements of our customers.”

Kelly said the company continued to strengthen its financial position during the first quarter through the repayment of debt incurred at the time of the merger. The company has repaid $98.5 million of its $140 million credit facility as of May 1, 2005, including $53.5 million since January 1, 2005, leaving a balance of $41.5 million as of May 1, 2005. He also noted that cash on hand at March 31, 2005 and May 1, 2005 totaled approximately $37 million and $38 million, respectively.

* * * * * * * * *

USA Mobility plans to host a conference call for investors on its first quarter results at 11:00 a.m. Eastern Time on Wednesday, May 11, 2005. The call-in number is 800-211-3767 (toll-free) or 312-461-9296 (toll). The pass code for the call is 8126403 (followed by the # sign). A replay of the call will be available from 2:30 p.m. ET on May 11 until 11:59 p.m. on Friday, May 27. The replay number is 888-203-1112 (toll-free) or 719-457-0820 (toll). The pass code for the replay is 8126403 (followed by the # sign).

* * * * * * * * *

About USA Mobility

USA Mobility, Inc., headquartered in Alexandria, Virginia, is a leading provider of paging products and other wireless services to the business, government and healthcare sectors. USA Mobility offers traditional one-way and advanced two-way paging via its nationwide networks covering more than 90% of the U.S. population and with roaming partners in Canada and Mexico. In addition, the company offers mobile voice and data services through Nextel and Cingular/AT&T Wireless, including BlackBerry and GPS location applications. The company’s product offerings include wireless connectivity systems for medical, business, government and other campus environments. USA Mobility focuses on the business-to-business marketplace and supplies mobile connectivity solutions to over two-thirds of the Fortune 1000 companies. 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 expectations for 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, the timely and efficient integration of the operations and facilities of Metrocall and Arch 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 BALANCE SHEETS
(unaudited and in thousands)

	December 31,		March 31,
	2004		2005
ASSETS
Current assets:
Cash and cash equivalents	$	46,995	$	37,111
Accounts receivable, net		37,750		33,976
Prepaid rent, expenses and other		15,460		20,321
Deferred income taxes		26,906		26,626
Total current assets		127,111		118,034
Property and equipment, net		216,508		187,608
Goodwill		151,791		151,791
Intangible assets, net		67,129		59,037
Deferred income tax		225,253		224,662
Other assets		5,517		5,486
	$	793,309	$	746,618
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current maturities of long-term debt	$	47,558	$	32,318
Accounts payable and accrued expenses		76,420		70,041
Customer deposits		4,316		3,971
Deferred revenue		23,623		22,475
Total current liabilities		151,917		128,805
Long-term debt, less current maturities		47,500		24,214
Other long-term liabilities		10,555		7,559
Total liabilities		209,972		160,578
Stockholders’ equity:
Preferred stock		—		—
Common stock		3		3
Additional paid-in capital		554,946		556,357
Retained earnings		28,388		29,680
Total stockholders’ equity		583,337		586,040
	$	793,309	$	746,618

USA MOBILITY, INC
CONDENSED CONSOLIDATED INCOME STATEMENTS
(unaudited and in thousands, except share and per share amounts)

	Three Months Ended
	March 31,
	2004			2005
Revenues:
Services, rental and maintenance, net	$	119,546		$	159,150
Product sales		4,113			6,527
Total revenues		123,659			165,677
Operating expenses:
Cost of products sold		938			1,279
Service, rental, and maintenance		39,362			56,973
Selling and marketing		9,120			10,470
General and administrative		32,941			53,140
Depreciation and amortization		26,309			38,535
Stock based compensation		688			1,411
Restructuring charges		3,018			—
Total operating expenses		112,376			161,808
Operating income		11,283			3,869
Interest expense		(3,400	)		(1,411	)
Interest income		71			197
Loss on extinguishment of debt		—			(594	)
Other income		168			293
Income before income tax expense		8,122			2,354
Income tax expense		(3,265	)		(1,062	)
Net income	$	4,857		$	1,292
Basic net income per common share	$	0.24		$	0.05
Diluted net income per common share	$	0.24		$	0.05
Basic weighted average common shares outstanding		20,000,000			27,108,034
Diluted weighted average common shares outstanding		20,078,213			27,317,407

USA MOBILITY, INC.
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(unaudited and in thousands)

	Three Months Ended
	March 31,
	2004			2005
Cash flows from operating activities:
Net income	$	4,857		$	1,292
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		26,309			38,535
Amortization of deferred financing costs		—			505
Amortization of stock compensation		688			1,411
Deferred income tax provision		3,265			871
Loss on extinguishment of debt		—			594
Gain on disposals of property and equipment		(109	)		(26	)
Provisions for doubtful accounts, service adjustments and other		2,280			7,005
Changes in assets and liabilities:
Accounts receivable		3,353			(3,333	)
Prepaid expenses and other		(2,017	)		(4,861	)
Intangibles and other long-term assets		—			(46	)
Accounts payable and accrued expenses		(13,860	)		(6,379	)
Customer deposits and deferred revenue		(1,866	)		(1,493	)
Other long-term liabilities		1,620			(2,996	)
Net cash provided by operating activities		24,520			31,079
Cash flows from investing activities:
Purchases of property and equipment		(5,701	)		(2,564	)
Proceeds from disposals of property and equipment		750			25
Receipts from note receivable		56			102
Net cash used for investing activities		(4,895	)		(2,437	)
Cash flows from financing activities:
Repayment of long-term debt		(20,000	)		(38,526	)
Net cash provided by/ (used for) financing activities		(20,000	)		(38,526	)
Net (decrease) in cash and cash equivalents		(375	)		(9,884	)
Cash and cash equivalents, beginning of period		34,582			46,995
Cash and cash equivalents, end of period	$	34,207		$	37,111
Supplemental disclosures:
Interest paid	$	1,903		$	1,367
Income taxes paid	$	—		$	—

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

	Three Months Ended
	March 2004			June 2004			September 2004			December 2004			March 2005
Direct One-Way:
Beginning units in service		3,393,000			3,247,000			3,122,000			2,997,000			4,557,000
Unit in service acquired											1,757,000
Unit in service growth (decline)		(146,000	)		(125,000	)		(125,000	)		(197,000	)		(188,000	)
Ending units in service		3,247,000			3,122,000			2,997,000			4,557,000			4,369,000
Service, rental and maintenance revenues (000s)	$	89,705		$	83,584		$	79,079		$	97,465		$	113,300
Average revenue per unit	$	9.00		$	8.77		$	8.62		$	8.60		$	8.46
Two-Way:
Beginning units in service		281,000			269,000			258,000			250,000			446,000
Unit in service acquired											211,000
Unit in service growth (decline)		(12,000	)		(11,000	)		(8,000	)		(15,000	)		(25,000	)
Ending units in service		269,000			258,000			250,000			446,000			421,000
Service, rental and maintenance revenues (000s)	$	21,950		$	20,739		$	19,561		$	24,961		$	29,481
Average revenue per unit	$	26.66		$	26.28		$	25.74		$	23.76		$	22.67
Total Direct Average revenue per unit	$	10.35		$	10.09		$	9.92		$	9.89		$	9.72
Indirect One-Way:
Beginning units in service		754,000			654,000			577,000			511,000			1,116,000
Unit in service acquired											690,000
Unit in service growth (decline)		(100,000	)		(77,000	)		(66,000	)		(85,000	)		(128,000	)
Ending units in service		654,000			577,000			511,000			1,116,000			988,000
Service, rental and maintenance revenues (000s)	$	7,359		$	6,369		$	5,713		$	8,942		$	11,261
Average revenue per unit	$	3.49		$	3.47		$	3.53		$	3.67		$	3.57
Two-Way:
Beginning units in service		9,000			8,000			12,000			14,000			83,000
Unit in service acquired											86,000
Unit in service growth (decline)		(1,000	)		4,000			2,000			(17,000	)		(3,000	)
Ending units in service		8,000			12,000			14,000			83,000			80,000
Service, rental and maintenance revenues (000s)	$	532		$	482		$	432		$	1,783		$	2,545
Average revenue per unit	$	21.06		$	14.92		$	10.37		$	10.92		$	10.40
Total Indirect Average revenue per unit	$	3.69		$	3.65		$	3.68		$	4.15		$	4.06
Totals
Beginning units in service		4,437,000			4,178,000			3,969,000			3,772,000			6,202,000
Unit in service acquired		—			—			—			2,744,000			—
Unit in service growth (decline)		(259,000	)		(209,000	)		(197,000	)		(314,000	)		(344,000	)
Ending units in service		4,178,000			3,969,000			3,772,000			6,202,000			5,858,000
Service, rental and maintenance revenues (000s)	$	119,546		$	111,174		$	104,785		$	133,151		$	156,588
Average revenue per unit	$	9.25		$	9.12		$	9.04		$	8.90		$	8.66

Note: Amounts have been been adjusted for rounding.

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

	Three Months Ended
	March 2004			June 2004			September 2004			December 2004			March 2005
Direct One-Way:
Beginning units in service		5,407,000			5,181,000			4,994,000			4,779,000			4,557,000
Gross placements		229,000			185,000			186,000			170,000			144,000
Disconnects		(455,000	)		(372,000	)		(401,000	)		(392,000	)		(332,000	)
Ending units in service		5,181,000			4,994,000			4,779,000			4,557,000			4,369,000
Two-Way:
Beginning units in service		530,000			507,000			486,000			473,000			446,000
Gross placements		40,000			32,000			35,000			29,000			22,000
Disconnects		(63,000	)		(53,000	)		(48,000	)		(56,000	)		(47,000	)
Ending units in service		507,000			486,000			473,000			446,000			421,000
Indirect One-Way:
Beginning units in service		1,845,000			1,603,000			1,382,000			1,230,000			1,116,000
Gross placements		157,000			145,000			160,000			143,000			107,000
Disconnects		(399,000	)		(366,000	)		(312,000	)		(257,000	)		(235,000	)
Ending units in service		1,603,000			1,382,000			1,230,000			1,116,000			988,000
Two-Way:
Beginning units in service		120,000			112,000			110,000			104,000			83,000
Gross placements		20,000			16,000			20,000			7,000			7,000
Disconnects		(28,000	)		(18,000	)		(26,000	)		(28,000	)		(10,000	)
Ending units in service		112,000			110,000			104,000			83,000			80,000
Total
Beginning units in service		7,902,000			7,403,000			6,972,000			6,586,000			6,202,000
Gross placements		446,000			378,000			401,000			350,000			281,000
Disconnects		(945,000	)		(809,000	)		(787,000	)		(734,000	)		(625,000	)
Ending units in service		7,403,000			6,972,000			6,586,000			6,202,000			5,858,000

(a) Assumes Arch and Metrocall combined as of January 1, 2004.