e8vk

-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, VKIGnK+p8j1slbDZSC8E2syO408xD8U7CbwRLH6TdxewlzizzXPaNAN05wXOZLhM VbSFEIUxtjG65m0uT/n+Zg== 0000950133-06-004863.txt : 20061109 0000950133-06-004863.hdr.sgml : 20061109 20061109171622 ACCESSION NUMBER: 0000950133-06-004863 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20061108 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20061109 DATE AS OF CHANGE: 20061109 FILER: COMPANY DATA: COMPANY CONFORMED NAME: USA Mobility, Inc CENTRAL INDEX KEY: 0001289945 STANDARD INDUSTRIAL CLASSIFICATION: RADIO TELEPHONE COMMUNICATIONS [4812] IRS NUMBER: 161694797 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-32358 FILM NUMBER: 061203681 BUSINESS ADDRESS: STREET 1: 6677 RICHMOND HIGHWAY CITY: ALEXANDRIA STATE: VA ZIP: 22306 BUSINESS PHONE: 703-718-6600 MAIL ADDRESS: STREET 1: 6677 RICHMOND HIGHWAY CITY: ALEXANDRIA STATE: VA ZIP: 22306 FORMER COMPANY: FORMER CONFORMED NAME: Wizards-Patriots Holdings, Inc. DATE OF NAME CHANGE: 20040512 8-K 1 w27070e8vk.htm FORM 8-K e8vk

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): November 8, 2006

USA Mobility, Inc.

(Exact name of registrant as specified in its charter)


Delaware	000-51027	16-1694797

(State or other jurisdiction	(Commission	(I.R.S. Employer
of incorporation)	File Number)	Identification No.)

6677 Richmond Highway,		22306
Alexandria, Virginia

(Address of principal executive offices)		(Zip Code)
Registrant’s telephone number, including area code:		(703) 660-6677

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 November 8, 2006, USA Mobility, Inc. announced operating results for the third quarter ended September 30, 2006. Reported revenue for the quarter was $119.6 million and EBITDA (earnings before interest, tax, depreciation, amortization and accretion) totaled $33.3 million. Third quarter operating income was $14.9 million, while net income was $8.7 million, or $0.31 per share. 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 Exhibit.

(a) Financial statements of business acquired:

Not applicable.

(b) Pro form financial information:

Not applicable.

(c)Exhibit:

Exhibit 99.1

Description of Exhibit – Press Release dated November 8, 2006 (furnished pursuant to Item 2.02; 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.
November 9, 2006	By:	/s/ Thomas L. Schilling
		Name:	Thomas L. Schilling
		Title:	Chief Financial Officer

Exhibit Index


Exhibit No.		Description
99.1		USA Mobility, Inc. Press Release dated November 8, 2006

EX-99.1 2 w27070exv99w1.htm EXHIBIT 99.1 exv99w1

Exhibit 99.1

News Release


For Immediate Release		Contact: Bob Lougee (703) 721-3080
Wednesday, November 8, 2006

USA Mobility Reports Third Quarter Operating Results

Continued Improvement in Subscriber Trends;
Cost Reductions Outpace Expectations

Alexandria, VA (November 8, 2006) — USA Mobility, Inc. (Nasdaq: USMO), a leading provider of wireless messaging services, today announced operating results for the third quarter ended September 30, 2006. Reported revenue for the quarter was $119.6 million and EBITDA (earnings before interest, tax, depreciation, amortization and accretion) totaled $33.3 million. Third quarter operating income was $14.9 million, while net income was $8.7 million, or $0.31 per share.

Key results in the third quarter included:

	•		Net unit loss slowed to 172,000 from 203,000 in the second quarter and 252,000 in the first quarter of 2006. Total units in service at September 30, 2006 were 4,259,000, compared to 4,431,000 at June 30, 2006.

	•		The annual rate of subscriber loss improved to 16.7 percent from 17.2 percent in the second quarter and 17.6 percent in the first quarter of 2006.

	•		The quarterly rate of subscriber erosion improved to 3.9 percent in the quarter, compared to 4.4 percent in the second quarter and 5.2 percent in the first quarter of 2006.

	•		Average revenue per unit (“ARPU”) was $8.60 in the quarter, compared to $8.74 in the second quarter and $8.80 in the first quarter of 2006, reflecting a continuing trend toward larger accounts that benefit from volume pricing.

	•		Revenue declined $7.7 million or 6.0 percent during the third quarter, compared to $7.7 million or 5.7 percent in the second quarter, and $8.5 million or 5.9 percent in the first quarter.

	•		Operating expenses, excluding depreciation, amortization and accretion, were $86.3 million in the third quarter, a reduction of $3.3 million, or 3.7 percent, from $89.6 million in second quarter. Quarterly operating expenses have declined by $24.1 million, or 21.8 percent, compared to third quarter 2005.

	•		As a percentage of revenue, EBITDA was 27.8 percent in the third quarter, compared to 27.4 percent in the third quarter of 2005, and 29.6 percent in second quarter 2006.

	•		Capital expenses were $5.2 million, compared to $4.6 million in the second quarter.

	•		The Company’s cash balance at September 30, 2006 was $58.7 million.

“Third quarter operating results compared favorably to our forecast and represent another solid quarter of progress for the Company,” said Vincent D. Kelly, president and chief executive officer. “The annual rate of net subscriber losses continued to improve as we increased our sales and service focus on our core subscriber segments, including healthcare, government services and large business enterprises. Our net subscriber loss rate improved as gross placements rose for the second consecutive quarter. In addition, we launched a number of important marketing initiatives during the quarter to promote the Company as a single source for wireless solutions. Among them, we unveiled an enhanced user-friendly web site that provides existing and potential customers with a broad range of information and tools to help them identify and meet their wireless communications needs.”

Kelly added, “As we approach the two-year anniversary of the Metrocall Arch merger, which created USA Mobility, we look back at both our accomplishments and our challenges. We have achieved all of our integration objectives ahead of time and we have re-focused our sales and marketing efforts around our core subscriber segments. We also have returned significant capital to our shareholders after having paid off all our bank debt incurred at the time of the merger.”

“However, we continue to be challenged with a higher than anticipated rate of gross subscriber losses, particularly in our direct customer base. In fact the gross rate of direct subscriber erosion actually increased from 6.6 percent in third quarter 2005 to 7.0 percent in third quarter 2006. Our current outlook for the future is more optimistic on our ability to place gross additions to our subscriber base in our core segments than it was at the one-year anniversary of our merger a year ago. Our outlook in terms of our ability to lower our operating costs while increasing sales productivity has also improved. However, our outlook for the rate of gross subscriber churn forecasts a higher level of subscriber attrition than we assumed at the merger and even one year ago. The actual future rate of gross cancellations will be the single most critical determinant to long-term value of our paging business.”

The Company paid a cash distribution to shareholders in July of $3.00 per share, or approximately $82 million. The Company also declared its first regular quarterly dividend of $0.65 on November 1, payable on December 7 to shareholders of record on November 16. “The Board’s decision to implement recurring cash distributions reflects our confidence that we can continue to generate substantial cash flow going forward,” Kelly said. “These actions are also consistent with our stated cash flow generation strategy and goal of returning cash to shareholders.”

Thomas L. Schilling, chief financial officer, said the Company continued to aggressively reduce costs during the quarter. “We are extremely pleased with the continued cost reduction we’ve been able to achieve. Operating expenses (excluding depreciation, amortization and accretion) decreased 3.7 percent in the third quarter and were 21.8 percent lower than they were a year ago, outpacing the year-over-year decline in revenue of 21.3 percent. Our

cost reductions in third quarter exceeded our expectation, and we now expect to out perform our operating expense guidance.” Schilling added: “We are maintaining our revenue and capital expense guidance of $495 million to $500 million and $20 million to $22 million, respectively. However, we now expect operating expenses, excluding depreciation, amortization and accretion, for 2006 to be $354 million to $356 million, well below our previous guidance of $363 million to $368 million.”

* * * * * * * *

USA Mobility plans to host a conference call for investors at 11:00 a.m. Eastern Time on Thursday, November 9, 2006. The dial-in number for the call is 877-704-5378 (toll-free) or 913-312-1292 (toll). The pass code for the call is 9657441. A replay of the call will be available from 3:00 p.m. ET on November 9 until 11:59 p.m. on Wednesday, November 22. The replay number is 888-203-1112 (toll-free) or 719-457-0820 (toll). The pass code for the replay is 9657441.

* * * * * * * * *

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, healthcare and emergency response sectors. USA Mobility offers traditional one-way and advanced two-way paging via its nationwide networks covering more than 90 percent of the U.S. population. In addition, the Company offers mobile voice and data services through Sprint Nextel and Cingular 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 more than 80 percent of the Fortune 1000 companies. For further information visit http://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, our ability to continue to reduce operating expenses and to generate cash from operations, our future capital needs, competitive pricing pressures, competition from both traditional paging services and other wireless communications services, technological improvements in hand-held devices and transmission services offered by our competitors, 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
	3/31/05			6/30/05			9/30/05			12/31/05			3/31/06			6/30/06			9/30/06
Revenue:
Paging service	$	156,588		$	148,399		$	141,832		$	133,582		$	125,673		$	118,872		$	112,129
Cellular		1,507			2,122			1,877			2,336			2,026			2,096			1,728
Product sales		6,527			6,054			6,940			6,361			6,131			5,180			4,851
Other		1,055			962			1,305			1,125			1,063			1,057			846

Total revenue		165,677			157,537			151,954			143,404			134,892			127,205			119,553


Operating expenses:
Cost of products sold		1,279			929			945			1,330			786			1,169			1,184
Service, rental and maintenance		56,452			56,156			53,783			49,457			48,092			44,770			42,489
Selling and marketing		10,462			11,181			11,328			10,400			11,059			11,117			10,929
General and administrative		49,653			47,011			43,436			39,684			36,141			32,208			30,994
Depreciation, amortization, and accretion		40,594			35,224			28,875			26,635			18,794			18,900			18,361
Severance and restructuring		5,137			9,904			855			713			170			321			682

Total operating expenses		163,578			160,405			139,223			128,219			115,043			108,486			104,639

% of total revenue		98.7	%		101.8	%		91.6	%		89.4	%		85.3	%		85.3	%		87.5	%

Operating income (loss)		2,099			(2,868	)		12,732			15,185			19,849			18,720			14,914

% of total revenue		1.3	%		-1.8	%		8.4	%		10.6	%		14.7	%		14.7	%		12.5	%

Interest income (expense), net		(1,214	)		(499	)		(18	)		408			549			1,023			717
Loss on extinguishment of long-term debt		(594	)		(432	)		(312	)		0			0			0			0
Other income (expense), net		137			(73	)		76			(1,144	)		62			989			104

Income (loss) before income tax expense		428			(3,872	)		12,477			14,449			20,460			20,731			15,734
Income tax benefit (expense)		(291	)		61			(3,752	)		(6,594	)		(8,195	)		(9,779	)		(7,075	)

Net income (loss)	$	137		$	(3,811	)	$	8,726		$	7,855		$	12,265		$	10,952		$	8,659


Basic net income (loss) per common share	$	0.01		$	(0.14	)	$	0.32		$	0.29		$	0.45		$	0.40		$	0.32

Diluted net income (loss) per common share	$	0.01		$	(0.14	)	$	0.32		$	0.29		$	0.45		$	0.40		$	0.31


Basic weighted average common shares outstanding		27,108,034			27,226,076			27,365,701			27,396,187			27,397,307			27,399,533			27,400,853

Diluted weighted average common shares outstanding		27,320,212			27,226,076			27,465,990			27,459,261			27,503,230			27,587,958			27,575,039


Reconciliation of operating income to EBITDA (b):
Operating income (loss)	$	2,099		$	(2,868	)	$	12,732		$	15,185		$	19,849		$	18,720		$	14,914
Add back: Depreciation, amortization and accretion		40,594			35,224			28,875			26,635			18,794			18,900			18,361

EBITDA	$	42,693		$	32,356		$	41,607		$	41,820		$	38,643		$	37,620		$	33,275

% of total revenue		25.8	%		20.5	%		27.4	%		29.2	%		28.6	%		29.6	%		27.8	%


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

(b)		EBITDA or Earnings before interest, taxes, depreciation and amortization is a non-GAAP measure and is presented for analytical purposes only.

USA MOBILITY, INC.
PRO FORMA UNITS IN SERVICE ACTIVITY (a)(b)
units in thousands (unaudited)


	For the three months ended
	3/31/05			6/30/05			9/30/05			12/31/05			3/31/06			6/30/06			9/30/06
Units in service

Beginning units in service
Direct one-way		4,464			4,272			4,114			3,977			3,835			3,678			3,547
Direct two-way		422			398			382			365			348			324			307

Total direct		4,886			4,670			4,496			4,342			4,183			4,002			3,854

Indirect one-way		987			859			762			685			603			535			483
Indirect two-way		94			91			90			89			100			96			94

Total indirect		1,081			951			852			774			703			631			577

Total beginning units in service		5,967			5,621			5,348			5,116			4,886			4,634			4,431


Gross placements
Direct one-way		142			134			125			125			108			119			120
Direct two-way		23			29			17			17			15			15			15

Total direct		165			163			142			142			123			134			135

Indirect one-way		108			92			26			24			24			18			24
Indirect two-way		7			7			5			17			4			5			6

Total indirect		115			99			31			41			28			23			29

Total gross placements		280			262			173			183			151			157			165


Gross disconnects
Direct one-way		(334	)		(292	)		(262	)		(267	)		(265	)		(250	)		(239	)
Direct two-way		(48	)		(44	)		(34	)		(34	)		(39	)		(32	)		(30	)

Total direct		(381	)		(337	)		(296	)		(301	)		(304	)		(282	)		(269	)

Indirect one-way		(235	)		(189	)		(104	)		(105	)		(92	)		(70	)		(58	)
Indirect two-way		(10	)		(9	)		(6	)		(6	)		(7	)		(8	)		(10	)

Total indirect		(245	)		(198	)		(109	)		(111	)		(100	)		(78	)		(68	)

Total gross disconnects		(626	)		(535	)		(405	)		(413	)		(404	)		(360	)		(337	)


Net gain (loss)
Direct one-way		(192	)		(159	)		(137	)		(142	)		(157	)		(131	)		(118	)
Direct two-way		(24	)		(15	)		(17	)		(17	)		(24	)		(17	)		(15	)

Total direct		(216	)		(174	)		(154	)		(159	)		(181	)		(148	)		(133	)

Indirect one-way		(128	)		(97	)		(77	)		(82	)		(68	)		(52	)		(34	)
Indirect two-way		(2	)		(1	)		(1	)		11			(4	)		(2	)		(4	)

Total indirect		(130	)		(99	)		(78	)		(71	)		(72	)		(55	)		(39	)

Total net change		(346	)		(273	)		(233	)		(230	)		(252	)		(203	)		(172	)


Ending units in service
Direct one-way		4,272			4,114			3,977			3,835			3,678			3,547			3,429
Direct two-way		398			382			365			348			324			307			292

Total direct		4,670			4,496			4,342			4,183			4,002			3,854			3,721

Indirect one-way		859			762			685			603			535			483			449
Indirect two-way		91			90			89			100			96			94			89

Total indirect		951			852			774			703			631			577			538

Total ending units in service		5,621			5,348			5,116			4,886			4,634			4,431			4,259


(a)		The third quarter 2005 unit in service adjustment has been reflected in the first quarter 2005 beginning units in service balance.

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

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

(unaudited)


	For the three months ended
	3/31/05			6/30/05			9/30/05			12/31/05			3/31/06			6/30/06			9/30/06
ARPU
Direct one-way	$	8.65		$	8.61		$	8.48		$	8.27		$	8.17		$	8.06		$	7.95
Direct two-way		23.98			23.65			24.28			23.76			23.61			23.75			23.27

Total direct		9.96			9.89			9.81			9.57			9.44			9.32			9.16

Indirect one-way		4.07			4.11			4.36			4.66			4.53			4.59			4.49
Indirect two-way		9.16			8.71			8.42			7.80			6.93			6.99			6.53

Total indirect		4.53			4.57			4.81			5.06			4.89			4.97			4.82

Total one-way		7.85			7.88			7.85			7.76			7.69			7.63			7.54
Total two-way		21.25			20.83			21.22			20.42			19.85			19.87			19.35

Total paging ARPU	$	9.01		$	9.02		$	9.04		$	8.90		$	8.80		$	8.74		$	8.60


Gross churn (b) %
Direct one-way		-7.5	%		-6.8	%		-6.4	%		-6.7	%		-6.9	%		-6.8	%		-6.7	%
Direct two-way		-11.4	%		-11.1	%		-8.9	%		-9.4	%		-11.1	%		-9.8	%		-9.8	%

Total direct		-7.8	%		-7.2	%		-6.6	%		-6.9	%		-7.3	%		-7.0	%		-7.0	%

Indirect one-way		-23.8	%		-22.0	%		-13.6	%		-15.3	%		-15.3	%		-13.1	%		-12.0	%
Indirect two-way		-10.2	%		-9.7	%		-6.4	%		-7.2	%		-7.1	%		-8.2	%		-10.6	%

Total indirect		-22.6	%		-20.8	%		-12.8	%		-14.4	%		-14.2	%		-12.4	%		-11.8	%

Total one-way		-10.4	%		-9.4	%		-7.5	%		-8.0	%		-8.1	%		-7.6	%		-7.4	%
Total two-way		-11.1	%		-10.8	%		-8.4	%		-9.0	%		-10.2	%		-9.5	%		-10.0	%

Total paging gross churn %		-10.5	%		-9.5	%		-7.6	%		-8.1	%		-8.3	%		-7.8	%		-7.6	%


Net churn (c) %
Direct one-way		-4.3	%		-3.7	%		-3.3	%		-3.6	%		-4.1	%		-3.6	%		-3.3	%
Direct two-way		-5.8	%		-3.8	%		-4.5	%		-4.8	%		-6.8	%		-5.2	%		-4.9	%

Total direct		-4.4	%		-3.7	%		-3.4	%		-3.7	%		-4.3	%		-3.7	%		-3.5	%

Indirect one-way		-12.9	%		-11.3	%		-10.2	%		-11.9	%		-11.3	%		-9.8	%		-7.1	%
Indirect two-way		-2.6	%		-1.5	%		-1.2	%		12.2	%		-3.5	%		-2.6	%		-4.5	%

Total indirect		-12.0	%		-10.4	%		-9.2	%		-9.1	%		-10.2	%		-8.7	%		-6.7	%

Total one-way		-5.9	%		-5.0	%		-4.4	%		-4.8	%		-5.1	%		-4.3	%		-3.8	%
Total two-way		-5.2	%		-3.4	%		-3.9	%		-1.4	%		-6.1	%		-4.6	%		-4.8	%

Total paging net churn %		-5.8	%		-4.9	%		-4.3	%		-4.5	%		-5.2	%		-4.4	%		-3.9	%


(a)		The third quarter 2005 unit in service adjustment has been reflected in the first quarter 2005 beginning units in service balance.

(b)		Gross churn is current period disconnected units divided by prior period ending units in service.

(c)		Net churn is net current period placements and disconnected units in service divided by prior period ending units in service

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


	For the three months ended
	3/31/06			6/30/06			9/30/06
Gross placements %
Healthcare		3.8	%		4.5	%		4.1	%
Government		2.2	%		2.3	%		2.6	%
Large enterprise		2.6	%		3.0	%		3.8	%
Other		2.7	%		3.0	%		3.3	%

Total direct		2.9	%		3.3	%		3.5	%
Total indirect		4.0	%		3.7	%		5.1	%

Total		3.1	%		3.4	%		3.7	%


Gross churn %
Healthcare		-4.6	%		-4.7	%		-5.3	%
Government		-5.7	%		-6.3	%		-5.9	%
Large enterprise		-7.7	%		-7.4	%		-6.9	%
Other		-10.3	%		-9.5	%		-9.3	%

Total direct		-7.3	%		-7.0	%		-7.0	%
Total indirect		-14.2	%		-12.4	%		-11.8	%

Total		-8.3	%		-7.8	%		-7.6	%


Net churn %
Healthcare		-0.7	%		-0.2	%		-1.1	%
Government		-3.5	%		-4.1	%		-3.3	%
Large enterprise		-5.1	%		-4.3	%		-3.0	%
Other		-7.5	%		-6.6	%		-6.1	%

Total direct		-4.3	%		-3.7	%		-3.5	%
Total indirect		-10.2	%		-8.7	%		-6.7	%

Total		-5.2	%		-4.4	%		-3.9	%


End of period units in service % of total
Healthcare		29.0	%		30.5	%		31.5	%
Government		16.4	%		16.4	%		16.6	%
Large enterprise		10.2	%		10.2	%		10.1	%
Other		30.8	%		29.9	%		29.2	%

Total direct		86.4	%		87.0	%		87.4	%
Total indirect		13.6	%		13.0	%		12.6	%

Total		100.0	%		100.0	%		100.0	%


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

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


	For the three months ended
	12/31/05			3/31/06			6/30/06			9/30/06
Account size ending units in service (000’s)
1 to 3 units		388			358			327			300
4 to 10 units		221			203			188			175
11 to 50 units		527			489			456			426
51 to 100 units		285			265			249			238
101 to 1,000 units		1,134			1,068			1,027			999
>1,000 units		1,628			1,619			1,608			1,582

Total		4,183			4,002			3,854			3,721


End of period units in service % of total direct
1 to 3 units		9.3	%		8.9	%		8.5	%		8.1	%
4 to 10 units		5.3	%		5.1	%		4.9	%		4.7	%
11 to 50 units		12.6	%		12.2	%		11.8	%		11.4	%
51 to 100 units		6.8	%		6.6	%		6.5	%		6.4	%
101 to 1,000 units		27.1	%		26.7	%		26.7	%		26.9	%
>1,000 units		38.9	%		40.4	%		41.7	%		42.5	%

Total		100.0	%		100.0	%		100.0	%		100.0	%


Account size net unit loss %
1 to 3 units					-7.8	%		-8.7	%		-8.0	%
4 to 10 units					-8.2	%		-7.5	%		-6.9	%
11 to 50 units					-7.2	%		-6.8	%		-6.5	%
51 to 100 units					-7.0	%		-6.2	%		-4.2	%
101 to 1,000 units					-5.8	%		-3.8	%		-2.7	%
>1,000 units					-0.5	%		-0.7	%		-1.6	%

Total					-4.3	%		-3.7	%		-3.5	%


Account size ARPU
1 to 3 units	$	14.30		$	14.02		$	14.14		$	14.07
4 to 10 units		13.11			13.02			13.08			12.99
11 to 50 units		10.89			10.88			10.81			10.72
51 to 100 units		9.71			9.59			9.53			9.39
101 to 1,000 units		8.44			8.34			8.29			8.21
>1,000 units		8.19			8.18			8.05			7.89

Total	$	9.57		$	9.44		$	9.32		$	9.16


Cellular revenue
Number of activations		8,682			6,829			6,969			6,374

Revenue from cellular services (000’s)	$	2,336		$	2,026		$	2,096		$	1,728


(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
	3/31/05		6/30/05		9/30/05		12/31/05		3/31/06		6/30/06		9/30/06
Cost of products sold	$	1,279	$	929	$	945	$	1,330	$	786	$	1,169	$	1,184


Service, rental and maintenance
Lease payments for transmitter locations		33,041		32,067		30,347		29,118		26,099		25,021		24,314
Telecommunications related expenses		10,286		11,821		10,585		9,614		9,099		8,481		7,343
Payroll and related expenses		8,917		7,600		7,488		7,127		7,046		6,578		6,517
Stock based compensation		97		52		43		68		81		83		78
Other		4,111		4,617		5,320		3,530		5,767		4,606		4,237

Total service, rental and maintenance		56,452		56,156		53,783		49,457		48,092		44,770		42,489


Selling and marketing
Payroll and related expenses		7,736		7,363		7,626		6,704		7,709		7,317		6,996
Commissions		2,261		3,058		2,731		2,266		2,226		2,373		2,407
Stock based compensation		60		25		52		89		171		166		178
Other		405		735		919		1,341		953		1,262		1,348

Total selling and marketing		10,462		11,181		11,328		10,400		11,059		11,117		10,929


General and administrative
Payroll and related expenses		18,676		17,926		14,796		12,046		12,330		11,412		9,517
Stock based compensation		1,228		520		175		423		430		462		484
Bad debt		1,527		963		2,440		3,899		1,790		1,705		2,035
Facility expenses		6,112		5,289		5,160		4,601		4,104		3,973		3,467
Telecommunications		2,898		2,416		2,495		2,292		2,248		1,982		1,857
Outside services		6,768		7,988		5,391		7,962		6,419		5,631		6,162
Taxes and permits		5,308		4,855		6,170		2,871		4,149		2,708		3,035
Other		7,137		7,055		6,809		5,590		4,670		4,335		4,436

Total general and administrative		49,653		47,011		43,436		39,684		36,141		32,208		30,994


Depreciation, amortization and accretion		40,594		35,224		28,875		26,635		18,794		18,900		18,361
Severance and restructuring		5,137		9,904		855		713		170		321		682


Operating expenses	$	163,578	$	160,405	$	139,223	$	128,219	$	115,043	$	108,486	$	104,639


Capital expenditures		2,565		2,818		3,944		4,172		4,424		4,595		5,153


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

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


	12/31/05		9/30/06
			(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	37,547	$	58,701
Accounts receivable, net		38,177		28,520
Prepaid rent, expenses and other		10,660		8,820
Deferred income tax assets		18,895		14,801

Total current assets	$	105,279	$	110,842
Property and equipment, net		127,802		99,024
Goodwill		149,478		149,478
Intangible assets, net		40,654		29,418
Deferred income tax assets		207,150		194,905
Other assets		3,430		6,312

Total assets	$	633,793	$	589,979


Liabilities and stockholders’ equity
Current liabilities:
Current maturities of long-term debt	$	13	$	—
Accounts payable and accrued liabilities		65,719		62,210
Dividends payable		—		390
Customer deposits		3,104		2,438
Deferred revenue		17,924		16,424

Total current liabilities	$	86,760	$	81,462
Other long-term liabilities		14,040		23,733

Total liabilities	$	100,800	$	105,195

Stockholders’ equity:
Preferred stock	$	—	$	—
Common stock		3		3
Additional paid-in capital		521,298		476,122
Retained earnings		11,692		8,659

Total stockholders’ equity		532,993		484,784

Total liabilities and stockholders’ equity	$	633,793	$	589,979

(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 nine months ended
	9/30/05			9/30/06
Cash flows from operating activities:
Net income	$	5,054		$	31,876
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, amortization and accretion		104,695			56,056
Deferred income tax expense (benefit)		(4,685	)		12,836
Loss on extinguishment of long-term debt		1,338			—
Amortization of deferred financing costs		714			—
Amortization of stock based compensation		2,253			2,133
Provisions for doubtful accounts and service credits		17,221			12,640
(Gain) loss on disposals of property and equipment		(30	)		389
Changes in assets and liabilities:
Accounts receivable		(23,558	)		(4,690	)
Prepaid rent, expenses and other		2,194			2,247
Intangibles and other long-term assets		5,004			360
Accounts payable and accrued expenses		(9,082	)		(4,077	)
Customer deposits and deferred revenue		(4,583	)		(2,166	)
Other long-term liabilities		3,566			7,308

Net cash provided by operating activities	$	100,101		$	114,912


Cash flows from investing activities:
Purchases of property and equipment		(9,327	)		(14,171	)
Proceeds from disposals of property and equipment		259			115
Receipts from long-term notes receivable		259			1,707

Net cash used in investing activities	$	(8,809	)	$	(12,349	)


Cash flows from financing activities:
Repayment of long-term debt		(95,044	)		(13	)
Dividends paid		—			(81,396	)
Exercise of options		80			—

Net cash used in financing activities	$	(94,964	)	$	(81,409	)


Net increase (decrease) in cash and cash equivalents		(3,672	)		21,154
Cash and cash equivalents, beginning of period		46,995			37,547

Cash and cash equivalents, end of period	$	43,323		$	58,701


Supplemental disclosure:
Interest paid	$	2,210		$	34

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

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