EX-99.1 2 d247186dex991.htm PRESS RELEASE Press Release

Exhibit 99.1

LOGO

 

FOR IMMEDIATE RELEASE    CONTACT:    Bob Lougee (800) 611-8488
Wednesday, October 26, 2011       bob.lougee@usamobility.com

USA Mobility Reports Third Quarter Operating Results;

Board Declares Regular Quarterly Dividend

Wireless and Software Businesses Record Solid Performance;

Record High Margins Posted for Wireless and Total Company;

Debt Balance Further Reduced

Springfield, VA (October 26, 2011) — USA Mobility, Inc. (Nasdaq: USMO), a leading provider of wireless messaging, mobile voice and data and unified communications solutions, today announced operating results for the third quarter ended September 30, 2011. In addition, the Company’s Board of Directors declared a regular quarterly dividend of $0.25 per share, payable on December 9, 2011 to stockholders of record on November 18, 2011.

Total revenue for the third quarter was $61.5 million. Revenue from the Company’s Wireless business (USA Mobility Wireless) was $48.6 million, compared to $52.1 million in the second quarter and $56.7 million in the third quarter of 2010. Revenue from the Software business (Amcom Software) was $12.9 million, compared to $13.1 million in the second quarter. Software maintenance revenue was reduced by $1.5 million for purchase accounting adjustments in the third quarter, compared to a reduction of $2.6 million in the second quarter. Excluding purchase accounting adjustments, Software revenue for the third quarter would have been $14.4 million.

Third quarter EBITDA (earnings before interest, taxes, depreciation, amortization and accretion) totaled $21.3 million, compared to $21.4 million in the second quarter. EBITDA from Wireless was $19.9 million, compared to $20.4 million in the prior quarter and $22.0 million in the year-earlier quarter. EBITDA from Software was $1.4 million compared to $1.0 million in the second quarter. Excluding purchase accounting adjustments, third quarter consolidated EBITDA would have been $22.8 million or 36.2 percent of revenue.

Net income for the third quarter was $10.4 million, or $0.46 per fully diluted share, compared to $18.6 million, or $0.82 per fully diluted share, in the second quarter and $15.4 million, or $0.69 per fully diluted share, in the year-earlier quarter. Excluding the purchase accounting adjustments and one-time items, net income for the third quarter


of 2011 would have been $11.6 million or $0.51 per fully diluted share, compared to $14.9 million, or $0.66 per fully diluted share, for the second quarter of 2011 and $13.2 million, or $0.59 per fully diluted share, for the third quarter of 2010.

Third quarter results included:

Wireless

 

   

Net unit losses were 58,000 in the third quarter, compared to 49,000 in the second quarter and 77,000 in the third quarter of 2010. Units in service at September 30, 2011 totaled 1,721,000, compared to 1,950,000 at September 30, 2010. The annual rate of subscriber erosion improved to 11.7 percent from 12.2 percent in the second quarter and 15.1 percent in the year-ago quarter, while the quarterly rate of unit erosion was 3.3 percent, compared to 2.7 percent in the second quarter and 3.8 percent in the year-earlier quarter.

 

   

The annual rate of revenue erosion was 14.4 percent in the third quarter, compared to 11.9 percent in the second quarter and 18.4 percent in the year-earlier quarter. The quarterly rate of revenue erosion was 6.8 percent, compared to 0.8 percent in the second quarter and 4.1 percent in the year-earlier quarter.

 

   

Total ARPU (average revenue per unit) was $8.59 in the third quarter, compared to $8.74 in the second quarter and $8.85 in the third quarter of 2010.

 

   

EBITDA margin (or EBITDA as a percentage of revenue) for Wireless was 41.1 percent, compared to 39.2 percent in the second quarter and 38.8 percent in the year-earlier quarter (or 37.4 percent absent the one-time benefits).

Software

 

   

Bookings for the quarter ended September 30, 2011 were $14.2 million, compared to $15.2 million in the second quarter.

 

   

Backlog was $21.3 million at September 30th, compared to $20.5 million at June 30th.

 

   

Of the $12.9 million in Software revenue for the third quarter, $4.6 million was maintenance revenue and $8.3 million was operations revenue, compared to $3.2 million and $9.9 million, respectively, of the $13.1 million in Software revenue for the prior quarter.

 

   

The renewal rate for maintenance in the third quarter was 99.6 percent.

 

   

EBITDA margin for Software was 10.3 percent, compared to 8.0 percent in the second quarter.


Total Company

 

   

Operating expenses (excluding depreciation, amortization and accretion) totaled $40.2 million in the third quarter, with $28.6 million for Wireless and $11.6 million for Software, compared to operating expenses of $43.7 million in the second quarter, with $31.7 million for Wireless and $12.0 million for Software.

 

   

Consolidated EBITDA margin was 34.6 percent, compared to 32.9 percent in the second quarter.

 

   

Capital expenses were $1.8 million, compared to $1.7 million in the third quarter of 2010.

 

   

Dividends paid to stockholders totaled $5.5 million in the third quarter.

 

   

The Company’s cash balance at September 30, 2011 was $40.6 million.

 

   

The Company retired $9.6 million of bank debt during the third quarter. The outstanding debt balance at September 30, 2011 was $28.3 million at an interest rate of 5.25 percent.

“Despite a still challenging economy, we again made excellent progress during the quarter in both our Wireless and Software businesses,” said Vincent D. Kelly, president and chief executive officer. “Results either met or exceeded our key performance targets and were consistent with the adjusted financial guidance we revised last quarter. On the Wireless side, we were pleased to see continued improvement in the annual rate of paging subscriber and revenue erosion, while posting record margins. This will be the seventh consecutive year since our formation in late 2004 where we have expanded our operating margins. Additionally, our Software subsidiary, Amcom Software, recorded a strong quarter in a tough economic environment with solid bookings and a growing backlog. In addition, we continued to maintain high operating margins, reduce expenses, pay down debt incurred with the Amcom acquisition, and generate sufficient cash flow to again return capital to stockholders in the form of dividend distributions.”

Kelly said USA Mobility’s Wireless business continued to focus its sales efforts around the core market segments of Healthcare, Government and Large Enterprise during the quarter. The three segments represented 89.8 percent


of the Company’s direct subscriber base and 85.0 percent of its direct paging revenue at the end of the quarter. “Healthcare now represents 66.3 percent of our direct customer base,” Kelly noted, “and continues to be our best performing market segment with the highest rate of gross placements and lowest rate of net unit loss. Gross placements of paging units within Healthcare totaled 42,000 during the quarter, while the net loss rate among Healthcare accounts was 1.8 percent. Our Healthcare segment continues to benefit from two primary factors: (1) recognition by customers that the acquisition of Amcom underscores our long-term commitment to the Healthcare segment; and (2) recognition among providers that paging offers well-defined cost and reliability advantages that enable them to meet their most critical messaging needs.”

Commenting on the Company’s Software business, Christopher Heim, president of Amcom Software, said: “Amcom continued to see strong bookings during the quarter. Demand was strongest in North American hospitals where we sold software solutions for call center management, emergency notification, critical smartphone messaging, and clinical middleware. We also experienced good sales activity in the U.S. government sector and in our Australian market. As a result, we ended the quarter with a solid backlog and pipeline of new business opportunities. In addition, we continued to identify cross-selling opportunities for both Software and Wireless sales teams with the goal of enhancing sales prospects for each line of business.”

Shawn E. Endsley, chief financial officer, said the Company continued to reduce operating expenses and further retired bank debt during the third quarter. “Recurring operating expenses (excluding depreciation, amortization and accretion) for Wireless decreased 19.4 percent from the year-earlier quarter,” Endsley noted, “exceeding the 14.4 percent rate of Wireless revenue decline. In addition, we repaid $9.6 million in bank debt incurred in connection with the Amcom acquisition, reducing our outstanding balance to $28.3 million at September 30th while maintaining a cash balance of $40.6 million.”

Regarding financial guidance for 2011, Endsley said the Company is maintaining its prior guidance based on current trends. The Company provides financial guidance (schedule attached) for both the full-year, assuming the acquisition of Amcom Software had occurred on January 1, 2011, and with an adjusted guidance range, which reflects Software’s results from March 3, 2011 (the date of the acquisition) along with the required purchase accounting adjustments to maintenance revenue. As such, Endsley said the Company expects total revenues for 2011 to range from $235 million to $248 million, with Wireless between $193 million and $200 million and Software between $42 million and $48 million; operating expenses (excluding depreciation, amortization and accretion) to range from $162 million to $174 million, with Wireless between $127 million and $134 million and Software between $35 million and $40 million; and capital expenses to range from $6.5 million to $9 million, with Wireless between $6 million and $8 and Software between $0.5 million and $1 million.

* * * * * * * * *


USA Mobility plans to host a conference call for investors on its third quarter operating results at 10:00 a.m. Eastern Time on Thursday, October 27, 2011. Dial-in numbers for the call are 719-457-2630 or 888-293-6979. The pass code for the call is 7247712. A replay of the call will be available from 1:00 p.m. ET on October 27 until 11:59 p.m. on Thursday, November 10. Replay numbers are 719-457-0820 or 888-203-1112. The pass code for the replay is 7247712.

* * * * * * * * *

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. In addition, through its Amcom Software subsidiary, it provides mission critical unified communications solutions for hospitals, contact centers, emergency management, mobile event notification and messaging. 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. USA Mobility also 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 and www.amcomsoftware.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.

FINANCIAL GUIDANCE

 

     (In millions)  
     Full Year
Guidance Range (a)
    Adjusted
Guidance Range (b)
 
     From      To     From      To  

Revenues

          

Wireless

   $ 182.0       $ 192.0      $ 193.0       $ 200.0   

Software

     57.0         63.0 (c)      42.0         48.0   
  

 

 

    

 

 

   

 

 

    

 

 

 

Combined

   $ 239.0       $ 255.0      $ 235.0       $ 248.0   
  

 

 

    

 

 

   

 

 

    

 

 

 

Operating Expenses (d)

          

Wireless

   $ 136.0       $ 132.0      $ 134.0       $ 127.0   

Software

     47.0         43.0        40.0         35.0   
  

 

 

    

 

 

   

 

 

    

 

 

 

Combined

   $ 183.0       $ 175.0      $ 174.0       $ 162.0   
  

 

 

    

 

 

   

 

 

    

 

 

 

Capital Expenses

          

Wireless

   $ 7.0       $ 5.0      $ 8.0       $ 6.0   

Software

     2.0         1.0        1.0         0.5   
  

 

 

    

 

 

   

 

 

    

 

 

 

Combined

   $ 9.0       $ 6.0      $ 9.0       $ 6.5   
  

 

 

    

 

 

   

 

 

    

 

 

 

 

(a) The full year guidance assumes that the Amcom Software, Inc. (“Software”) acquisition had occurred as of January 1, 2011.
(b) The adjusted guidance for 2011 reflects Software’s results from March 3, 2011, the date of acquisition, and reflects the fair value adjustment to maintenance revenues as required by generally accepted accounting principles.
(c) The full year guidance for Software revenues does NOT reflect any fair value adjustment to maintenance revenue as a result of purchase accounting.
(d) Operating expenses exclude depreciation, amortization and accretion.


USA MOBILITY, INC.

CONDENSED CONSOLIDATED RESULTS OF OPERATIONS (a), (b)

(In thousands, except share and per share amounts)

 

     For the three months ended 9/30/11     For the nine months ended 9/30/11  
     Wireless     Software     Total     Wireless     Software     Total  

Revenue:

            

Paging service

   $ 45,121      $ —        $ 45,121      $ 141,068      $ —        $ 141,068   

Cellular

     315        —          315        2,198        —          2,198   

Product and related sales (c)

     2,535        12,929        15,464        7,684        30,808        38,492   

Other

     570        —          570        2,218        —          2,218   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total revenue

     48,541        12,929        61,470        153,168        30,808        183,976   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating expenses:

            

Cost of products sold (c)

     423        5,528        5,951        2,257        13,202        15,459   

Service, rental and maintenance (c)

     13,194        2,023        15,217        43,221        4,648        47,869   

Selling and marketing

     3,412        2,515        5,927        11,191        6,248        17,439   

General and administrative

     11,550        1,527        13,077        39,141        3,344        42,485   

Severance and restructuring

     28        —          28        78        —          78   

Depreciation, amortization and accretion

     3,407        1,673        5,080        11,057        3,861        14,918   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expenses

     32,014        13,266        45,280        106,945        31,303        138,248   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

% of total revenue

     66.0     102.6     73.7     69.8     101.6     75.1
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating income (loss)

     16,527        (337     16,190        46,223        (495     45,728   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

% of total revenue

     34.0     -2.6     26.3     30.2     -1.6     24.9

Interest expense, net

     (732     —          (732     (1,841     (9     (1,850

Other income (expense), net

     7        (8     (1     7,904        (84     7,820   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income (loss) before income tax expense (benefit)

     15,802        (345     15,457        52,286        (588     51,698   

Income tax expense (benefit)

     5,156        (146     5,010        (17,759     (236     (17,995
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss)

   $ 10,646      $ (199   $ 10,447      $ 70,045      $ (352   $ 69,693   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Basic net income per common share

       $ 0.47          $ 3.16   
      

 

 

       

 

 

 

Diluted net income per common share

       $ 0.46          $ 3.10   
      

 

 

       

 

 

 

Basic weighted average common shares outstanding

         22,090,913            22,080,485   
      

 

 

       

 

 

 

Diluted weighted average common shares outstanding

         22,573,064            22,487,374   
      

 

 

       

 

 

 

Reconciliation of operating income (loss) to EBITDA (d):

            

Operating income (loss)

   $ 16,527      $ (337   $ 16,190      $ 46,223      $ (495   $ 45,728   

Add back: depreciation, amortization and accretion

     3,407        1,673        5,080        11,057        3,861        14,918   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

EBITDA

   $ 19,934      $ 1,336      $ 21,270      $ 57,280      $ 3,366      $ 60,646   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

% of total revenue

     41.1     10.3     34.6     37.4     10.9     33.0

 

(a) Includes consolidated results of operations of USA Mobility Wireless, Inc. (“Wireless”) and Software.
(b) Slight variations in totals are due to rounding.
(c) Wireless results were reduced by $372,000 for intercompany revenue and expenses.
(d) 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.

CONDENSED CONSOLIDATED BALANCE SHEETS (a)

(In thousands)

 

     9/30/11      12/31/10  
     (Unaudited)         

Assets

     

Current assets:

     

Cash and cash equivalents

   $ 40,589       $ 129,220   

Accounts receivable, net

     21,315         13,419   

Prepaid expenses and other

     4,381         2,638   

Inventory

     2,424         160   

Tax receivables

     997         5,004   

Escrow receivables

     7,319         —     

Deferred income tax assets, net

     6,737         3,915   
  

 

 

    

 

 

 

Total current assets

     83,762         154,356   

Tax receivables

     213         191   

Property and equipment, net

     22,428         27,135   

Goodwill

     130,921         —     

Other intangible assets, net

     40,302         511   

Deferred income tax assets, net

     47,480         47,390   

Escrow receivables

     7,500         —     

Deferred financing costs, net

     887         —     

Other assets

     1,353         1,075   
  

 

 

    

 

 

 

Total assets

   $ 334,846       $ 230,658   
  

 

 

    

 

 

 

Liabilities and stockholders’ equity

     

Current liabilities:

     

Current portion of long-term debt

   $ 11,250       $ —     

Accounts payable and accrued liabilities

     13,222         14,794   

Accrued compensation and benefits

     9,739         12,701   

Consideration payable

     7,319         —     

Customer deposits

     2,496         718   

Deferred revenue

     14,944         6,268   
  

 

 

    

 

 

 

Total current liabilities

     58,970         34,481   

Long-term debt, net of current portion

     17,000         —     

Consideration payable

     7,500         —     

Deferred revenue

     545         —     

Other long-term liabilities

     12,189         11,787   
  

 

 

    

 

 

 

Total liabilities

     96,204         46,268   
  

 

 

    

 

 

 

Commitments and contingencies

     

Stockholders’ equity:

     

Preferred stock

     —           —     

Common stock

     2         2   

Additional paid-in capital

     131,117         129,696   

Retained earnings

     107,523         54,692   
  

 

 

    

 

 

 

Total stockholders’ equity

     238,642         184,390   
  

 

 

    

 

 

 

Total liabilities and stockholders’ equity

   $ 334,846       $ 230,658   
  

 

 

    

 

 

 

 

(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  
     9/30/11     9/30/10  

Cash flows from operating activities:

    

Net income

   $ 69,693      $ 37,358   

Adjustments to reconcile net income to net cash provided by operating activities:

    

Depreciation, amortization and accretion

     14,918        19,901   

Amortization of deferred financing costs

     521        —     

Deferred income tax (benefit) expense

     (19,072     9,622   

Amortization of stock based compensation

     1,093        571   

Provisions for doubtful accounts, service credits and other

     989        3,504   

Settlement of non-cash transaction taxes

     243        (927

(Gain)/Loss on disposals of property and equipment

     118        (3

(Gain) on disposals of narrow band PCS licenses

     (7,500     —     

Changes in assets and liabilities:

    

Accounts receivable

     (518     1,265   

Prepaid expenses, intangibles and other assets

     6,752        643   

Accounts payable and accrued liabilities

     (9,988     (9,744

Customer deposits and deferred revenue

     3,578        (462
  

 

 

   

 

 

 

Net cash provided by operating activities

     60,827        61,728   
  

 

 

   

 

 

 

Cash flows from investing activities:

    

Purchases of property and equipment

     (5,134     (4,018

Proceeds from disposals of property and equipment

     45        72   

Proceeds from disposals of narrow band PCS licenses

     7,500        —     

Acquisitions, net of cash acquired

     (134,217     —     
  

 

 

   

 

 

 

Net cash used in investing activities

     (131,806     (3,946
  

 

 

   

 

 

 

Cash flows from financing activities:

    

Issuance of debt

     24,044        —     

Repayment of debt

     (23,697     —     

Deferred financing costs

     (1,408     —     

Cash dividends to stockholders

     (16,591     (16,667

Purchase of common stock

     —          (8,893
  

 

 

   

 

 

 

Net cash used in financing activities

     (17,652     (25,560
  

 

 

   

 

 

 

Net (decrease) increase in cash and cash equivalents

     (88,631     32,222   

Cash and cash equivalents, beginning of period

     129,220        109,591   
  

 

 

   

 

 

 

Cash and cash equivalents, end of period

   $ 40,589      $ 141,813   
  

 

 

   

 

 

 

Supplemental disclosure:

    

Interest paid

   $ 1,198      $ —     
  

 

 

   

 

 

 

Income taxes paid

   $ 1,658      $ 340   
  

 

 

   

 

 

 

Non-cash financing activities

   $ 27,750      $ —     
  

 

 

   

 

 

 

 

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


USA MOBILITY, INC. (WIRELESS)

CONDENSED CONSOLIDATED RESULTS OF OPERATIONS (a)

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

 

    For the three months ended  
    9/30/11     6/30/11     3/31/11     12/31/10     9/30/10     6/30/10     3/31/10  

Revenues:

             

Paging service

  $ 45,121      $ 47,319      $ 48,628      $ 50,319      $ 52,778      $ 54,875      $ 57,832   

Cellular

    315        1,199        684        499        532        624        708   

Product and related sales (b)

    2,535        2,805        2,344        2,784        2,805        2,732        3,358   

Other

    570        768        880        1,046        595        881        886   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues

    48,541        52,091        52,536        54,648        56,710        59,112        62,784   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating expenses:

             

Cost of products sold (b)

    423        1,171        663        1,051        819        1,134        1,209   

Service, rental and maintenance (b)

    13,194        14,211        15,816        16,221        16,821        17,175        18,941   

Selling and marketing

    3,412        3,946        3,833        3,915        4,060        4,394        4,557   

General and administrative

    11,550        12,351        15,240        14,829        12,907        15,924        15,812   

Severance and restructuring

    28        17        33        1,738        86        41        314   

Depreciation, amortization and accretion

    3,407        3,618        4,032        4,226        5,899        6,698        7,304   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expenses

    32,014        35,314        39,617        41,980        40,592        45,366        48,137   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

% of total revenues

    66.0     67.8     75.4     76.8     71.6     76.7     76.7
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating income

  $ 16,527      $ 16,777      $ 12,919      $ 12,668      $ 16,118      $ 13,746      $ 14,647   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

% of total revenues

    34.0     32.2     24.6     23.2     28.4     23.3     23.3

Reconciliation of operating income to EBITDA (c):

             

Operating income

  $ 16,527      $ 16,777      $ 12,919      $ 12,668      $ 16,118      $ 13,746      $ 14,647   

Add back: depreciation, amortization and accretion

    3,407        3,618        4,032        4,226        5,899        6,698        7,304   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

EBITDA

  $ 19,934      $ 20,395      $ 16,951      $ 16,894      $ 22,017      $ 20,444      $ 21,951   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

% of total revenues

    41.1     39.2     32.3     30.9     38.8     34.6     35.0

 

(a) Slight variations in totals are due to rounding.
(b) Wireless results were reduced by $372,000 for intercompany revenue and expenses.
(c) 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. (WIRELESS)

UNITS IN SERVICE ACTIVITY (a)

(Unaudited and in thousands)

 

     For the three months ended  
     9/30/11     6/30/11     3/31/11     12/31/10     9/30/10     6/30/10     3/31/10  

Units in service

              

Beginning units in service

              

Direct one-way

     1,559        1,599        1,645        1,692        1,749        1,804        1,881   

Direct two-way

     97        100        106        109        121        126        133   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total direct

     1,656        1,699        1,751        1,801        1,870        1,930        2,014   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Indirect one-way

     71        75        68        75        82        90        101   

Indirect two-way

     52        54        70        74        75        79        67   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total indirect

     123        129        138        149        157        169        168   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total beginning units in service

     1,779        1,828        1,889        1,950        2,027        2,099        2,182   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Gross placements

              

Direct one-way

     50        56        47        45        58        62        53   

Direct two-way

     5        5        3        6        4        6        5   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total direct

     55        61        50        51        62        68        58   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Indirect one-way

     3        3        1        2        3        3        3   

Indirect two-way

     —          2        —          1        1        1        15   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total indirect

     3        5        1        3        4        4        18   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total gross placements

     58        66        51        54        66        72        76   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Gross disconnects

              

Direct one-way

     (99     (94     (93     (92     (115     (117     (130

Direct two-way

     (9     (10     (9     (9     (16     (11     (12
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total direct

     (108     (104     (102     (101     (131     (128     (142
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Indirect one-way

     (6     (10     6        (9     (10     (11     (14

Indirect two-way

     (2     (1     (16     (5     (2     (5     (3
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total indirect

     (8     (11     (10     (14     (12     (16     (17
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total gross disconnects

     (116     (115     (112     (115     (143     (144     (159
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net (loss)/gain

              

Direct one-way

     (49     (38     (46     (47     (57     (55     (77

Direct two-way

     (4     (5     (6     (3     (12     (5     (7
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total direct

     (53     (43     (52     (50     (69     (60     (84
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Indirect one-way

     (3     (7     7        (7     (7     (8     (11

Indirect two-way

     (1     1        (16     (4     (1     (4     12   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total indirect

     (4     (6     (9     (11     (8     (12     1   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total net change

     (58     (49     (60     (61     (77     (72     (83
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Ending units in service

              

Direct one-way

     1,510        1,559        1,599        1,645        1,692        1,749        1,804   

Direct two-way

     93        97        100        106        109        121        126   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total direct

     1,603        1,656        1,699        1,751        1,801        1,870        1,930   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Indirect one-way

     68        71        75        68        75        82        90   

Indirect two-way

     50        52        54        70        74        75        79   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total indirect

     118        123        129        138        149        157        169   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total ending units in service

     1,721        1,779        1,828        1,889        1,950        2,027        2,099   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

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


USA MOBILITY, INC. (WIRELESS)

AVERAGE REVENUE PER UNIT (ARPU) AND CHURN (a)

(Unaudited)

 

     For the three months ended  
     9/30/11     6/30/11     3/31/11     12/31/10     9/30/10     6/30/10     3/31/10  

ARPU

              

Direct one-way

   $ 7.97      $ 8.10      $ 8.05      $ 8.05      $ 8.07      $ 8.05      $ 8.16   

Direct two-way

     21.60        22.05        22.23        22.57        23.11        23.55        23.61   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total direct

     8.77        8.92        8.89        8.92        9.01        9.06        9.17   

Indirect one-way

     7.28        7.57        8.44        9.13        9.60        8.87        8.78   

Indirect two-way

     4.77        4.77        4.31        3.98        4.09        4.25        4.84   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total indirect

     6.22        6.40        6.49        6.48        6.86        6.65        7.04   

Total one-way

     7.94        8.08        8.07        8.09        8.14        8.09        8.19   

Total two-way

     15.71        16.04        15.41        14.96        15.54        16.06        16.76   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total paging ARPU

   $ 8.59      $ 8.74      $ 8.72      $ 8.74      $ 8.85      $ 8.87      $ 9.00   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Gross disconnect rate (b)

              

Direct one-way

     -6.4     -6.0     -5.7     -5.5     -6.6     -6.5     -6.9

Direct two-way

     -9.5     -9.3     -7.5     -8.5     -13.0     -8.5     -9.1
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total direct

     -6.5     -6.2     -5.8     -5.7     -7.0     -6.6     -7.1

Indirect one-way

     -8.1     -8.1     11.9     -12.1     -12.5     -12.8     -13.7

Indirect two-way

     -3.1     -4.5     -26.4     -5.8     -2.6     -6.8     -4.9
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total indirect

     -6.0     -6.6     -8.1     -8.9     -7.7     -9.9     -10.1

Total one-way

     -6.4     -6.1     -5.0     -5.7     -6.8     -6.8     -7.3

Total two-way

     -7.3     -7.6     -15.2     -7.4     -9.0     -7.9     -7.7
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total paging gross disconnect rate

     -6.5     -6.2     -6.0     -5.9     -7.0     -6.9     -7.3
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net (loss)/gain rate (c)

              

Direct one-way

     -3.2     -2.5     -2.9     -2.7     -3.2     -3.1     -4.1

Direct two-way

     -4.1     -3.1     -3.6     -4.6     -9.5     -4.2     -5.0
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total direct

     -3.2     -2.6     -3.0     -2.8     -3.6     -3.1     -4.2

Indirect one-way

     -4.5     -5.3     14.6     -9.8     -9.2     -9.8     -10.5

Indirect two-way

     -2.3     -3.0     -25.8     -4.6     -0.9     -4.7     17.1
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total indirect

     -3.6     -4.3     -6.6     -7.2     -5.1     -7.4     0.7

Total one-way

     -3.2     -2.6     -2.2     -3.0     -3.5     -3.4     -4.4

Total two-way

     -3.5     -3.1     -12.7     -4.6     -6.1     -4.4     2.5
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total paging net loss rate

     -3.3     -2.7     -3.2     -3.2     -3.8     -3.5     -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. (WIRELESS)

SUPPLEMENTAL INFORMATION BY MARKET SEGMENT (a)

(Unaudited)

 

     For the three months ended  
     9/30/11     6/30/11     3/31/11     12/31/10     9/30/10     6/30/10     3/31/10  

Gross placement rate (b)

              

Healthcare

     3.9     4.5     3.3     3.4     3.9     4.4     3.5

Government

     2.6     2.1     1.9     1.5     3.1     1.9     1.8

Large enterprise

     2.1     2.1     2.3     2.2     1.9     2.6     2.1

Other

     1.9     2.0     2.5     2.3     2.5     2.0     2.4
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total direct

     3.3     3.6     2.9     2.8     3.4     3.5     2.9

Total indirect

     2.4     2.3     1.6     1.7     2.6     2.5     10.9
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

     3.3     3.5     2.8     2.7     3.3     3.4     3.5
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Gross disconnect rate (b)

              

Healthcare

     -5.7     -5.0     -4.7     -4.4     -5.7     -5.2     -4.9

Government

     -8.3     -8.7     -7.6     -7.3     -8.3     -8.3     -9.1

Large enterprise

     -7.0     -7.1     -6.2     -7.0     -9.7     -8.3     -10.3

Other

     -8.9     -9.0     -9.2     -8.6     -9.3     -9.6     -11.0
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total direct

     -6.5     -6.2     -5.8     -5.7     -7.0     -6.6     -7.1

Total indirect

     -6.0     -6.6     -8.1     -8.9     -7.7     -9.9     -10.1
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

     -6.5     -6.2     -6.0     -5.9     -7.0     -6.9     -7.3
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net loss rate (b)

              

Healthcare

     -1.8     -0.5     -1.4     -1.1     -1.8     -0.8     -1.4

Government

     -5.7     -6.6     -5.7     -5.9     -5.2     -6.4     -7.4

Large enterprise

     -4.9     -5.0     -3.9     -4.8     -7.8     -5.7     -8.1

Other

     -7.0     -6.9     -6.8     -6.3     -6.8     -7.6     -8.6
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total direct

     -3.2     -2.6     -3.0     -2.8     -3.6     -3.1     -4.2

Total indirect

     -3.6     -4.3     -6.6     -7.2     -5.1     -7.4     0.7
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

     -3.3     -2.7     -3.2     -3.2     -3.8     -3.5     -3.8
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

End of period units in service % of total (b)

              

Healthcare

     61.7     60.9     59.5     58.3     57.1     56.1     54.5

Government

     12.3     12.6     13.1     13.5     13.9     14.1     14.4

Large enterprise

     9.6     9.8     10.0     10.1     10.2     10.7     10.9

Other

     9.5     9.7     10.3     10.8     11.2     11.4     12.1
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total direct

     93.1     93.0     92.9     92.7     92.4     92.3     91.9

Total indirect

     6.9     7.0     7.1     7.3     7.6     7.7     8.1
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

     100.0     100.0     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. (WIRELESS)

SUPPLEMENTAL INFORMATION - DIRECT UNITS IN SERVICE AND CELLULAR

ACTIVATIONS (a)

(Unaudited)

 

     For the three months ended  
     9/30/11     6/30/11     3/31/11     12/31/10     9/30/10     6/30/10     3/31/10  

Account size ending units in service (000’s)

              

1 to 3 units

     69        74        79        84        88        95        101   

4 to 10 units

     42        45        48        52        54        58        62   

11 to 50 units

     99        106        114        123        130        140        149   

51 to 100 units

     61        68        72        76        79        86        92   

101 to 1,000 units

     399        411        424        436        456        483        499   

>1,000 units

     933        952        962        980        994        1,008        1,027   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

     1,603        1,656        1,699        1,751        1,801        1,870        1,930   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

End of period units in service % of total direct

              

1 to 3 units

     4.3     4.4     4.7     4.8     4.9     5.1     5.2

4 to 10 units

     2.6     2.7     2.8     2.9     3.0     3.1     3.2

11 to 50 units

     6.2     6.4     6.7     7.0     7.2     7.5     7.7

51 to 100 units

     3.8     4.1     4.2     4.4     4.4     4.6     4.8

101 to 1,000 units

     24.9     24.8     25.0     24.9     25.3     25.8     25.9

>1,000 units

     58.2     57.6     56.6     56.0     55.2     53.9     53.2
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

     100.0     100.0     100.0     100.0     100.0     100.0     100.0
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Account size net loss rate

              

1 to 3 units

     -5.9     -6.3     -6.2     -4.8     -7.0     -5.8     -7.6

4 to 10 units

     -6.4     -6.8     -6.2     -5.0     -7.5     -6.0     -5.3

11 to 50 units

     -6.4     -6.5     -7.7     -5.1     -7.3     -6.1     -5.8

51 to 100 units

     -10.4     -5.4     -5.7     -4.2     -7.9     -6.5     -4.4

101 to 1,000 units

     -2.9     -3.3     -2.7     -4.2     -5.6     -3.3     -3.7

>1,000 units

     -2.1     -1.0     -1.8     -1.5     -1.3     -1.9     -3.7
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

     -3.2     -2.6     -3.0     -2.8     -3.6     -3.1     -4.2
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Account size ARPU

              

1 to 3 units

   $ 15.62      $ 15.74      $ 15.57      $ 15.57      $ 15.48      $ 15.37      $ 15.28   

4 to 10 units

     14.52        14.65        14.53        14.56        14.51        14.35        14.37   

11 to 50 units

     12.30        12.38        12.19        12.26        12.18        12.01        11.86   

51 to 100 units

     10.59        10.68        10.59        10.72        10.69        10.76        10.67   

101 to 1,000 units

     8.90        9.10        9.00        9.00        8.82        8.93        9.00   

>1,000 units

     7.42        7.49        7.47        7.43        7.64        7.63        7.80   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

   $ 8.77      $ 8.92      $ 8.89      $ 8.92      $ 9.01      $ 9.06      $ 9.17   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Cellular revenue

              

Number of activations

     1,236        4,370        2,191        1,990        1,885        1,885        2,354   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Revenue from cellular services (000’s)

   $ 315      $ 1,199      $ 684      $ 499      $ 532      $ 624      $ 708   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

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


USA MOBILITY, INC. (WIRELESS)

CONSOLIDATED OPERATING EXPENSES SUPPLEMENTAL INFORMATION (a)

(Unaudited and in thousands)

 

     For the three months ended  
     9/30/11      6/30/11     3/31/11      12/31/10      9/30/10      6/30/10      3/31/10  

Cost of products sold

   $ 423       $ 1,171      $ 663       $ 1,051       $ 819       $ 1,134       $ 1,209   
  

 

 

    

 

 

   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Service, rental and maintenance

                   

Site rent

     5,438         5,962        6,881         7,629         8,042         8,283         9,079   

Telecommunications

     2,721         2,868        3,099         3,066         3,341         3,467         3,831   

Payroll and related

     3,896         4,124        4,293         4,319         4,199         4,444         4,586   

Stock based compensation

     6         6        5         6         5         7         6   

Other

     1,133         1,251        1,538         1,201         1,234         974         1,439   
  

 

 

    

 

 

   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total service, rental and maintenance

     13,194         14,211        15,816         16,221         16,821         17,175         18,941   
  

 

 

    

 

 

   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Selling and marketing

                   

Payroll and related

     2,122         2,293        2,494         2,627         2,659         2,814         2,964   

Commissions

     873         1,285        1,002         1,007         1,163         1,367         1,164   

Stock based compensation

     16         16        17         17         17         22         17   

Other

     401         352        320         264         221         191         412   
  

 

 

    

 

 

   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total selling and marketing

     3,412         3,946        3,833         3,915         4,060         4,394         4,557   
  

 

 

    

 

 

   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

General and administrative

                   

Payroll and related

     5,115         5,397        5,677         6,118         5,719         6,621         6,912   

Stock based compensation

     218         215        203         223         15         242         240   

Bad debt

     276         (150     393         547         571         594         713   

Facility rent

     701         723        726         856         992         1,326         1,354   

Telecommunications

     401         394        443         480         518         603         657   

Outside services

     2,335         2,427        5,186         2,385         2,463         3,185         3,267   

Taxes, licenses and permits

     1,327         2,190        1,332         1,097         1,276         1,836         1,591   

Other

     1,177         1,155        1,280         3,123         1,353         1,517         1,078   
  

 

 

    

 

 

   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total general and administrative

     11,550         12,351        15,240         14,829         12,907         15,924         15,812   
  

 

 

    

 

 

   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Severance and restructuring

     28         17        33         1,738         86         41         314   

Depreciation, amortization and accretion

     3,407         3,618        4,032         4,226         5,899         6,698         7,304   
  

 

 

    

 

 

   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Operating expenses

   $ 32,014       $ 35,314      $ 39,617       $ 41,980       $ 40,592       $ 45,366       $ 48,137   
  

 

 

    

 

 

   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Capital expenditures

   $ 1,758       $ 1,721      $ 1,494       $ 4,720       $ 1,730       $ 563       $ 1,725   

 

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