EX-99.1 2 w73846exv99w1.htm EX-99.1 exv99w1
Exhibit 99.1
(USAMOBILITY LOGO)
         
For Immediate Release
  Contact:   Bob Lougee (703) 721-3080
Wednesday, April 29, 2009
      bob.lougee@usamobility.com
USA Mobility Reports First Quarter Operating Results;
Board Declares Quarterly Cash Distribution
Company Continues to Reduce Operating Expenses;
Cash Flow Margin Reaches Record High;
Exclusive Two-Way Pager Launched
Alexandria, VA (April 29, 2009) — USA Mobility, Inc. (Nasdaq: USMO), a leading provider of wireless messaging and communications services, today announced operating results for the first quarter ended March 31, 2009.
In addition, the Company’s Board of Directors declared a regular quarterly cash distribution of $0.25 per share, payable on June 18, 2009 to stockholders of record on May 20, 2009. The Company expects the entire distribution to be paid as a return of capital.
Total revenue for the first quarter was $79.7 million, compared to $84.3 million in the fourth quarter of 2008 and $94.8 million in the year-earlier quarter. EBITDA (earnings before interest, taxes, depreciation, amortization, accretion and goodwill impairment) in the first quarter totaled $28.6 million, compared to $29.8 million in the fourth quarter of 2008 and $29.9 million in the first quarter of 2008.
Net income for the first quarter was $10.0 million, or $0.43 per fully diluted share, compared to a net loss of $177.8 million, or $6.48 per fully diluted share, in the first quarter of 2008. The year-earlier loss resulted from a goodwill impairment for which the Company incurred a $188.2 million non-cash expense to write-off its entire goodwill balance. Absent the goodwill write-down, net income in the first quarter of 2008 would have been $10.4 million, or $0.38 per fully diluted share.

 


 

First quarter results included:
    EBITDA margin (or EBITDA as a percentage of revenue) increased to 35.9 percent, compared to 35.4 percent in the fourth quarter of 2008 and 31.6 percent in the year-earlier quarter, reaching its highest level in more than four years.
 
    The quarterly rate of revenue erosion was 5.4 percent, compared to 4.6 percent in the fourth quarter and 5.4 percent in the first quarter of 2008. The annual rate of revenue erosion for the first quarter was 15.9 percent, compared to the same rate for the fourth quarter and 15.0 percent in the year-earlier quarter.
 
    Total paging ARPU (average revenue per unit) increased to $8.86 in the first quarter from $8.71 in the fourth quarter and $8.49 in the year-earlier quarter.
 
    Net unit loss was 208,000 in the first quarter, compared to 187,000 in the fourth quarter of 2008 and 152,000 in the first quarter of 2008. Units in service totaled 2,607,000 at March 31, 2009, compared to 2,815,000 at December 31, 2008.
 
    The quarterly rate of subscriber loss was 7.4 percent in the first quarter, historically the quarter with the highest net churn, compared to 6.2 percent in the fourth quarter and 4.4 percent in the first quarter of 2008. The annual rate of subscriber erosion was 21.8 percent in the first quarter, compared to 19.2 percent in the fourth quarter of 2008 and 14.8 percent in the year-earlier quarter.
 
    Operating expenses (excluding depreciation, amortization, accretion and goodwill impairment) totaled $51.1 million in the first quarter, a reduction of $13.8 million, or 21.2 percent, from $64.8 million in the first quarter of 2008. Quarterly operating expenses declined 6.2 percent from the fourth quarter of 2008 and, as a percentage of revenue, are at their lowest level in more than four years.
 
    Capital expenses were $6.1 million, compared to $4.2 million in the fourth quarter of 2008.
 
    The Company’s cash balance at March 31, 2009 was $65.1 million.
“We reported excellent operating results for the first quarter,” said Vincent D. Kelly, president and chief executive officer. “Despite a very difficult economy and high unemployment nationwide, our results exceeded a majority of our performance objectives and were consistent with the financial guidance we provided earlier this year. Although the pace of subscriber losses accelerated during the quarter, as expected, we posted our highest ARPU in nearly three years. In addition, we continued to generate substantial free cash flow while successfully managing the business profitably with a low-cost operating structure. In fact, due to lower expenses, our EBITDA margin reached a record high 35.9 percent.”
Kelly said the Company continued to focus sales and marketing efforts around its core market segments of Healthcare, Government and Large Enterprise during the quarter. “These core segments represented approximately 82.1 percent of our direct subscriber base and 75.7 percent of our direct paging revenue at the end of the first quarter. Once again Healthcare was our best performing market segment with the highest rate of gross placements and lowest rate of net unit loss as healthcare providers continue to benefit from the reliability of paging for their most critical messaging needs. Indeed, our networks today carry the lion’s share of messaging to hospitals across the country, providing paging service to 40 percent of all U.S. hospitals and 63 percent of major hospitals (those with at least 200 beds).”

 


 

Kelly also said the Company introduced an exclusive two-way paging device to the market at the end of the first quarter. Called the ST902, the new device uses a disposable battery. “It’s the first new disposable battery two-way pager to come to market in many years, and was the culmination of more than two years of product development. In working with our customers, we found that many of them prefer a disposable battery rather than a rechargeable battery,” Kelly explained. “For example, hospitals often use their pagers around the clock, passing them from one shift to the next, and often don’t want to take a pager out of service to be recharged. In addition, many first responders require a wireless communications device they can take into the field where plug-in electrical outlets may not be available. As a result, we saw a need for a new two-way pager that was powered by a common, disposable AA battery. With permanent exclusivity on this new two-way pager, we will aggressively market the device to customers this year.”
USA Mobility again returned capital to stockholders in the first quarter, Kelly noted. “We continued to meet our goal of generating sufficient free cash flow to return capital to stockholders in the form of cash distributions. We produced $27.3 million in cash from operations in the quarter, allowing us to pay a regular quarterly cash distribution of $0.25 per share and a special cash distribution of $1.00 per share on March 31, 2009. Together, the distributions represented a return of capital to our stockholders of approximately $28.5 million. Including the first quarter distributions, we have now returned $305.4 million to stockholders over the past four years. In addition, the Board of Directors on April 29, 2009 declared a regular quarterly cash distribution of $0.25 per share, payable on June 18, 2009 to stockholders of record on May 20, 2009. The Company expects the June distribution, a total of approximately $5.7 million, to be paid as a return of capital.”
Kelly added: “We continued to buy back shares of the Company’s common stock during the first quarter under the stock repurchase program we commenced last August. As of March 31, we had purchased a total of approximately 4.6 million shares for $40.8 million, at an average price of $8.78 per share, and had approximately $22.3 million available for additional purchases under the currently approved plan, which extends through the end of 2009.”
Thomas L. Schilling, chief operating officer and chief financial officer, said the Company’s expenses declined significantly during the first quarter as a result of an internal reorganization and related cost control programs initiated late last year. “Operating expenses (excluding depreciation, amortization, accretion and goodwill impairment) decreased 21.2 percent from the year-earlier quarter,” he said, “outpacing the year-over-year decline in revenue of 15.9 percent. In addition,” Schilling noted, “operating expense as a percentage of revenue was 64.1 percent in the first quarter, the lowest level in more than four years.”

 


 

Schilling added, “The combination of lower expenses and higher ARPU contributed to an increase in first quarter EBITDA margin compared to the prior quarter. Although we are pleased and encouraged by financial results in the first quarter, we are maintaining our previous financial guidance for 2009 of revenues between $285 million to $295 million, operating expenses (excluding depreciation, amortization and accretion) between $198 million to $203 million, and capital expenses between $19 million to $21 million, however, economic conditions may result in later changes to our guidance.”
* * * * * * * * *
USA Mobility plans to host a conference call for investors on its first quarter results at 10:00 a.m. Eastern Time on Thursday, April 30, 2009. The dial-in number for the call is 866-290-0916 (toll-free) or 913-312-1416 (toll). The pass code for the call is 4591325. A replay of the call will be available from 3:00 p.m. ET on April 30 until 11:59 p.m. on Thursday, May 14. The replay number is 888-203-1112 (toll-free) or 719-457-0820 (toll). The pass code for the replay is 4591325.
* * * * * * * * *
USA Mobility’s Annual Meeting of Stockholders will be held at 9:00 a.m. Eastern Time on Wednesday, May 20, 2009 in Alexandria, VA.
About USA Mobility
USA Mobility, Inc., headquartered in Alexandria, Virginia, is a comprehensive provider of reliable and affordable wireless communications solutions to the healthcare, government, large enterprise and emergency response sectors. As a single-source provider, USA Mobilitys focus is on the business-to-business marketplace and supplying wireless connectivity solutions to a majority of the Fortune 1000 companies. The Company operates the largest one-way paging and advanced two-way paging networks in the United States. In addition, USA Mobility offers mobile voice and data services through Sprint Nextel, including BlackBerry® smartphones and GPS location applications. The Company’s product offerings include customized wireless connectivity systems for the healthcare, government and other campus environments. USA Mobility also offers M2M (machine-to-machine) telemetry solutions for numerous applications that include asset tracking, utility meter reading and other remote device monitoring applications on a national scale. For further information visit www.usamobility.com.
Safe Harbor Statement under the Private Securities Litigation Reform Act: Statements contained herein or in prior press releases which are not historical fact, such as statements regarding USA Mobility’s future operating and financial performance, are forward-looking statements for purposes of the safe harbor provisions under the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve risks and uncertainties that may cause USA Mobility’s actual results to be materially different from the future results expressed or implied by such forward-looking statements. Factors that could cause actual results to differ materially from those expectations include, but are not limited to, declining demand for paging products and services, the ability to continue to reduce operating expenses, future capital needs, competitive pricing pressures, competition from both traditional paging services and other wireless communications services, government regulation, reliance upon third-party providers for certain equipment and services, as well as other risks described from time to time in periodic

 


 

reports and registration statements filed with the Securities and Exchange Commission. Although USA Mobility believes the expectations reflected in the forward-looking statements are based on reasonable assumptions, it can give no assurance that its expectations will be attained. USA Mobility disclaims any intent or obligation to update any forward-looking statements.
Tables to Follow

 


 

USA MOBILITY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (a)
(unaudited and in thousands, except share and per share amounts)
                                             
    For the three months ended    
    3/31/08     6/30/08     9/30/08     12/31/08       3/31/09    
Revenues:
                                           
Paging service
  $ 86,773     $ 83,360     $ 80,533     $ 75,989       $ 72,021    
Cellular
    1,859       1,547       1,494       993         991    
Product sales
    4,871       5,741       5,014       5,863         5,271    
Other
    1,255       1,427       1,316       1,413         1,408    
             
Total revenues
    94,758       92,075       88,357       84,258         79,691    
             
 
                                           
Operating expenses:
                                           
Cost of products sold
    1,081       1,408       1,291       1,812         1,669    
Service, rental and maintenance
    33,969       31,583       29,069       28,199         22,955    
Selling and marketing
    7,836       7,549       6,756       6,144         6,062    
General and administrative
    21,808       20,782       20,631       18,289         20,186    
Severance and restructuring
    145       153       5,063       (35 )       190    
Depreciation, amortization and accretion
    12,513       11,674       11,075       11,750         11,270    
Goodwill impairment
    188,170                              
             
Total operating expenses
    265,522       73,149       73,885       66,159         62,332    
             
% of total revenues
    280.2 %     79.4 %     83.6 %     78.5 %       78.2 %  
 
                                           
             
Operating (loss) income
    (170,764 )     18,926       14,472       18,099         17,359    
             
% of total revenues
    -180.2 %     20.6 %     16.4 %     21.5 %       21.8 %  
 
                                           
Interest income, net
    578       672       471       79         26    
Other income, net
    125       202       205       90         112    
             
(Loss) income before income tax expense
    (170,061 )     19,800       15,148       18,268         17,497    
Income tax expense
    7,739       9,528       12,730       10,235         7,516    
             
Net (loss) income
  $ (177,800 )   $ 10,272     $ 2,418     $ 8,033       $ 9,981    
             
 
                                           
Basic net (loss) income per common share
  $ (6.48 )   $ 0.37     $ 0.09     $ 0.32       $ 0.43    
             
 
                                           
Diluted net (loss) income per common share
  $ (6.48 )   $ 0.37     $ 0.09     $ 0.32       $ 0.43    
             
 
                                           
Basic weighted average common shares outstanding
    27,459,068       27,474,156       27,474,156       25,348,440         23,134,072    
             
Diluted weighted average common shares outstanding
    27,459,068       27,600,976       27,602,296       25,444,277         23,479,796    
             
 
                                           
Reconciliation of operating (loss) income to EBITDA (b):
                                           
Operating (loss) income
  $ (170,764 )   $ 18,926     $ 14,472     $ 18,099       $ 17,359    
Add back: depreciation, amortization and accretion
    12,513       11,674       11,075       11,750         11,270    
Add back: goodwill impairment
    188,170                              
             
EBITDA
  $ 29,919     $ 30,600     $ 25,547     $ 29,849       $ 28,629    
             
% of total revenues
    31.6 %     33.2 %     28.9 %     35.4 %       35.9 %  
 
                                             
 
(a)   Slight variations in totals are due to rounding.
 
(b)   EBITDA or earnings before interest, taxes, depreciation, amortization, accretion and goodwill impairment is a non-GAAP measure and is presented for analytical purposes only.

 


 

USA MOBILITY, INC.
UNITS IN SERVICE ACTIVITY (a)
(unaudited and in thousands)
                                             
    For the three months ended    
    3/31/08     6/30/08     9/30/08     12/31/08       3/31/09    
Units in service
                                           
 
                                           
Beginning units in service
                                           
                                         
Direct one-way
    2,854       2,733       2,614       2,490         2,349    
Direct two-way
    221       206       196       184         171    
             
Total direct
    3,075       2,939       2,810       2,674         2,520    
             
Indirect one-way
    312       286       261       227         196    
Indirect two-way
    98       108       105       101         99    
             
Total indirect
    410       394       366       328         295    
             
Total beginning units in service
    3,485       3,333       3,176       3,002         2,815    
             
 
                                           
Gross placements
                                           
Direct one-way
    77       90       76       61         67    
Direct two-way
    8       11       8       7         6    
             
Total direct
    85       101       84       68         73    
             
Indirect one-way
    17       22       12       8         8    
Indirect two-way
    16       7       7       6         4    
             
Total indirect
    33       29       19       14         12    
             
Total gross placements
    118       130       103       82         85    
             
 
                                           
Gross disconnects
                                           
Direct one-way
    (199 )     (209 )     (199 )     (202 )       (218 )  
Direct two-way
    (22 )     (21 )     (20 )     (20 )       (20 )  
             
Total direct
    (221 )     (230 )     (219 )     (222 )       (238 )  
             
Indirect one-way
    (44 )     (47 )     (47 )     (39 )       (43 )  
Indirect two-way
    (5 )     (10 )     (11 )     (8 )       (12 )  
             
Total indirect
    (49 )     (57 )     (58 )     (47 )       (55 )  
             
Total gross disconnects
    (270 )     (287 )     (277 )     (269 )       (293 )  
             
 
                                           
Net gain (loss)
                                           
Direct one-way
    (122 )     (119 )     (123 )     (142 )       (151 )  
Direct two-way
    (14 )     (10 )     (12 )     (12 )       (14 )  
             
Total direct
    (136 )     (129 )     (135 )     (154 )       (165 )  
             
Indirect one-way
    (27 )     (25 )     (35 )     (31 )       (35 )  
Indirect two-way
    11       (3 )     (4 )     (2 )       (8 )  
             
Total indirect
    (16 )     (28 )     (39 )     (33 )       (43 )  
             
Total net change
    (152 )     (157 )     (174 )     (187 )       (208 )  
             
 
                                           
Ending units in service
                                           
Direct one-way
    2,732       2,614       2,491       2,349         2,198    
Direct two-way
    207       196       184       171         157    
             
Total direct
    2,939       2,810       2,675       2,520         2,355    
             
Indirect one-way
    285       261       226       196         161    
Indirect two-way
    109       105       101       99         91    
             
Total indirect
    394       366       327       295         252    
             
Total ending units in service
    3,333       3,176       3,002       2,815         2,607    
             
 
(a)   Slight variations in totals are due to rounding.

 


 

USA MOBILITY, INC.
AVERAGE REVENUE PER UNIT (ARPU) AND CHURN (a)
(unaudited)
                                             
    For the three months ended    
    3/31/08     6/30/08     9/30/08     12/31/08       3/31/09    
 
                                           
ARPU
                                           
                                         
Direct one-way
  $ 7.83     $ 7.85     $ 8.08     $ 8.09       $ 8.11    
Direct two-way
    23.68       23.90       23.78       23.77         23.68    
             
Total direct
    8.95       8.97       9.16       9.16         9.15    
 
                                           
Indirect one-way
    4.10       4.57       4.79       5.12         7.05    
Indirect two-way
    7.52       7.08       5.35       4.53         4.58    
             
Total indirect
    4.97       5.28       4.96       4.93         6.19    
 
                                           
Total one-way
    7.47       7.54       7.79       7.85         8.03    
Total two-way
    18.44       18.07       17.29       16.84         16.66    
             
Total paging ARPU
  $ 8.49     $ 8.54     $ 8.69     $ 8.71       $ 8.86    
             
 
                                           
Gross disconnect rate (b)
                                           
Direct one-way
    -7.0 %     -7.6 %     -7.6 %     -8.1 %       -9.3 %  
Direct two-way
    -10.2 %     -10.4 %     -10.2 %     -10.6 %       -11.8 %  
             
Total direct
    -7.2 %     -7.8 %     -7.8 %     -8.3 %       -9.5 %  
 
                                           
Indirect one-way
    -13.9 %     -16.4 %     -17.9 %     -17.3 %       -22.0 %  
Indirect two-way
    -5.3 %     -8.8 %     -10.3 %     -7.7 %       -11.6 %  
             
Total indirect
    -11.8 %     -14.3 %     -15.7 %     -14.3 %       -18.5 %  
 
                                           
Total one-way
    -7.7 %     -8.5 %     -8.6 %     -8.9 %       -10.3 %  
Total two-way
    -8.7 %     -9.8 %     -10.2 %     -9.6 %       -11.7 %  
             
Total paging gross disconnect rate
    -7.7 %     -8.6 %     -8.7 %     -9.0 %       -10.4 %  
             
 
                                           
Net gain (loss) rate (c)
                                           
Direct one-way
    -4.3 %     -4.3 %     -4.7 %     -5.7 %       -6.4 %  
Direct two-way
    -6.4 %     -5.2 %     -6.1 %     -6.8 %       -8.5 %  
             
Total direct
    -4.4 %     -4.4 %     -4.8 %     -5.8 %       -6.6 %  
 
                                           
Indirect one-way
    -8.5 %     -8.6 %     -13.2 %     -13.7 %       -17.8 %  
Indirect two-way
    11.0 %     -2.4 %     -4.1 %     -1.5 %       -8.2 %  
             
Total indirect
    -3.9 %     -6.9 %     -10.6 %     -10.0 %       -14.6 %  
 
                                           
Total one-way
    -4.7 %     -4.8 %     -5.5 %     -6.4 %       -7.3 %  
Total two-way
    -1.1 %     -4.2 %     -5.4 %     -4.9 %       -8.4 %  
             
Total paging net (loss) gain rate
    -4.4 %     -4.7 %     -5.5 %     -6.2 %       -7.4 %  
             
 
(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 gain (loss) rate is net current period placements and disconnected units in service divided by prior period ending units in service.

 


 

USA MOBILITY, INC.
SUPPLEMENTAL INFORMATION BY MARKET SEGMENT (a)
(unaudited)
                                             
    For the three months ended    
    3/31/08     6/30/08     9/30/08     12/31/08       3/31/09    
Gross placement rate (b)
                                           
                                         
Healthcare
    3.3 %     4.8 %     3.8 %     3.0 %       3.7 %  
Government
    2.2 %     2.1 %     2.2 %     2.1 %       1.7 %  
Large enterprise
    2.4 %     2.3 %     2.2 %     2.1 %       2.4 %  
Other
    2.5 %     2.6 %     2.4 %     2.2 %       2.4 %  
             
Total direct
    2.8 %     3.4 %     3.0 %     2.5 %       2.9 %  
Total indirect
    8.0 %     7.4 %     5.1 %     4.4 %       3.9 %  
             
Total
    3.4 %     3.9 %     3.2 %     2.7 %       3.0 %  
             
Gross disconnect rate (b)
                                           
Healthcare
    -5.1 %     -5.8 %     -6.0 %     -6.4 %       -6.8 %  
Government
    -6.7 %     -8.5 %     -8.5 %     -9.3 %       -9.9 %  
Large enterprise
    -8.6 %     -9.2 %     -9.2 %     -8.9 %       -13.3 %  
Other
    -10.7 %     -10.5 %     -10.1 %     -11.4 %       -13.0 %  
             
Total direct
    -7.2 %     -7.8 %     -7.8 %     -8.3 %       -9.5 %  
Total indirect
    -11.8 %     -14.3 %     -15.7 %     -14.3 %       -18.5 %  
             
Total
    -7.7 %     -8.6 %     -8.7 %     -9.0 %       -10.4 %  
             
Net loss rate (b)
                                           
Healthcare
    -1.7 %     -0.9 %     -2.1 %     -3.4 %       -3.1 %  
Government
    -4.5 %     -6.4 %     -6.3 %     -7.1 %       -8.2 %  
Large enterprise
    -6.2 %     -6.9 %     -7.0 %     -6.8 %       -10.9 %  
Other
    -8.2 %     -7.9 %     -7.8 %     -9.2 %       -10.6 %  
             
Total direct
    -4.4 %     -4.4 %     -4.8 %     -5.8 %       -6.6 %  
Total indirect
    -3.9 %     -6.9 %     -10.6 %     -10.0 %       -14.6 %  
             
Total
    -4.4 %     -4.7 %     -5.5 %     -6.2 %       -7.4 %  
             
End of period units in service % of total (b)
                                           
Healthcare
    38.3 %     40.0 %     41.5 %     42.8 %       44.9 %  
Government
    17.9 %     17.7 %     17.6 %     17.4 %       17.2 %  
Large enterprise
    13.1 %     12.8 %     12.6 %     12.5 %       12.0 %  
Other
    18.9 %     18.0 %     17.4 %     16.8 %       16.2 %  
             
Total direct
    88.2 %     88.5 %     89.1 %     89.5 %       90.3 %  
Total indirect
    11.8 %     11.5 %     10.9 %     10.5 %       9.7 %  
             
Total
    100.0 %     100.0 %     100.0 %     100.0 %       100.0 %  
             
 
(a)   Slight variations in totals are due to rounding.
 
(b)   Changes in the classification of units in service are reflected in the quarter when such changes are identified. Such changes are then appropriately reflected in calculating the gross placement, gross disconnect and net loss rates.


 

USA MOBILITY, INC.
SUPPLEMENTAL INFORMATION — DIRECT UNITS IN SERVICE AND CELLULAR ACTIVATIONS (a)
(unaudited)
                                             
    For the three months ended
    3/31/08     6/30/08     9/30/08     12/31/08       3/31/09    
 
                                           
Account size ending units in service (000’s)
                                           
                                         
1 to 3 units
    184       172       159       149         137    
4 to 10 units
    112       104       97       89         82    
11 to 50 units
    276       255       236       218         199    
51 to 100 units
    164       155       144       133         125    
101 to 1,000 units
    784       750       716       681         626    
>1,000 units
    1,419       1,374       1,323       1,250         1,186    
             
Total
    2,939       2,810       2,675       2,520         2,355    
             
 
                                           
End of period units in service % of total direct
                                           
1 to 3 units
    6.2 %     6.1 %     5.9 %     5.9 %       5.8 %  
4 to 10 units
    3.8 %     3.7 %     3.6 %     3.5 %       3.5 %  
11 to 50 units
    9.4 %     9.1 %     8.8 %     8.7 %       8.4 %  
51 to 100 units
    5.6 %     5.5 %     5.4 %     5.3 %       5.3 %  
101 to 1,000 units
    26.7 %     26.7 %     26.8 %     27.0 %       26.6 %  
>1,000 units
    48.3 %     48.9 %     49.5 %     49.6 %       50.4 %  
             
Total
    100.0 %     100.0 %     100.0 %     100.0 %       100.0 %  
             
 
                                           
Account size net loss rate
                                           
1 to 3 units
    -7.8 %     -6.9 %     -7.0 %     -6.9 %       -7.8 %  
4 to 10 units
    -6.5 %     -7.2 %     -6.7 %     -7.8 %       -8.8 %  
11 to 50 units
    -7.6 %     -7.4 %     -7.4 %     -7.6 %       -8.9 %  
51 to 100 units
    -6.9 %     -5.5 %     -7.5 %     -7.2 %       -6.2 %  
101 to 1,000 units
    -5.2 %     -4.3 %     -4.6 %     -4.9 %       -8.0 %  
>1,000 units
    -2.4 %     -3.2 %     -3.7 %     -5.5 %       -5.1 %  
             
Total
    -4.4 %     -4.4 %     -4.8 %     -5.8 %       -6.6 %  
             
 
                                           
Account size ARPU
                                           
1 to 3 units
  $ 14.66     $ 14.62     $ 14.72     $ 14.68       $ 14.73    
4 to 10 units
    13.56       13.56       13.92       13.89         14.00    
11 to 50 units
    10.99       11.03       11.40       11.35         11.41    
51 to 100 units
    9.57       9.76       10.36       10.25         10.30    
101 to 1,000 units
    8.23       8.45       8.91       8.98         8.94    
>1,000 units
    7.75       7.70       7.72       7.75         7.77    
             
Total
  $ 8.95     $ 8.97     $ 9.16     $ 9.16       $ 9.15    
             
 
                                           
Cellular revenue
                                           
Number of activations
    4,509       3,970       3,779       2,287         2,389    
             
Revenue from cellular services (000’s)
  $ 1,859     $ 1,547     $ 1,494     $ 993       $ 991    
             
 
(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  
    3/31/08     6/30/08     9/30/08     12/31/08       3/31/09    
 
                                           
                                         
Cost of products sold
  $ 1,081     $ 1,408     $ 1,291     $ 1,812       $ 1,669    
             
 
                                           
Service, rental and maintenance
                                           
Site rent
    17,792       16,756       15,463       14,785         11,218    
Telecommunications
    6,204       5,503       5,072       5,307         4,485    
Payroll and related
    6,683       6,504       5,827       5,490         5,631    
Stock based compensation
    17       19       19       18         49    
Other
    3,273       2,801       2,688       2,599         1,572    
             
Total service, rental and maintenance
    33,969       31,583       29,069       28,199         22,955    
             
 
                                           
Selling and marketing
                                           
Payroll and related
    5,164       4,797       4,317       4,145         4,175    
Commissions
    1,724       2,037       1,742       1,213         1,201    
Stock based compensation
    39       50       49       60         109    
Other
    909       665       648       726         577    
             
Total selling and marketing
    7,836       7,549       6,756       6,144         6,062    
             
 
                                           
General and administrative
                                           
Payroll and related
    8,682       8,129       7,847       7,992         9,075    
Stock based compensation
    190       247       253       298         569    
Bad debt
    711       691       680       618         850    
Facility rent
    2,073       2,199       1,937       1,689         1,628    
Telecommunications
    1,048       983       936       834         771    
Outside services
    5,359       4,584       4,632       4,519         4,514    
Taxes, licenses and permits
    1,958       2,055       2,216       372         1,101    
Other
    1,787       1,894       2,130       1,967         1,678    
             
Total general and administrative
    21,808       20,782       20,631       18,289         20,186    
             
 
                                           
Severance and restructuring
    145       153       5,063       (35 )       190    
Depreciation, amortization and accretion
    12,513       11,674       11,075       11,750         11,270    
Goodwill impairment
    188,170                              
 
                                           
             
Operating expenses
  $ 265,522     $ 73,149     $ 73,885     $ 66,159       $ 62,332    
             
 
                                           
Capital expenditures
  $ 3,988     $ 3,892     $ 6,214     $ 4,242       $ 6,054    
 
(a)   Slight variations in totals are due to rounding.

 


 

USA MOBILITY, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (a)
(in thousands)
                     
    12/31/08       3/31/09    
            (unaudited)    
Assets
                   
Current assets:
                   
Cash and cash equivalents
  $ 75,032       $ 65,075    
Accounts receivable, net
    25,118         22,601    
Prepaid expenses and other
    6,226         5,195    
Deferred income tax assets, net
    6,025         4,577    
 
               
Total current assets
    112,401         97,448    
Property and equipment, net
    57,867         55,017    
Intangible assets, net
    6,520         5,711    
Deferred income tax assets, net
    59,599         54,088    
Other assets
    4,973         4,393    
 
               
Total assets
  $ 241,360       $ 216,657    
 
               
Liabilities and stockholders’ equity
                   
Current liabilities:
                   
Accounts payable and accrued liabilities
  $ 40,983       $ 37,621    
Customer deposits
    1,203         1,103    
Deferred revenue
    9,958         9,336    
 
               
Total current liabilities
    52,144         48,060    
Other long-term liabilities
    48,478         48,974    
 
               
Total liabilities
    100,622         97,034    
 
               
Stockholders’ equity:
                   
Preferred stock
               
Common stock
    2         2    
Additional paid-in capital
    140,736         119,621    
Retained earnings
               
 
               
Total stockholders’ equity
    140,738         119,623    
 
               
Total liabilities and stockholders’ equity
  $ 241,360       $ 216,657    
 
               
 
(a)   Slight variations in totals are due to rounding.

 


 

USA MOBILITY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (a)
(unaudited and in thousands)
                     
    For the three months ended    
    3/31/08       3/31/09    
Cash flows from operating activities:
                   
Net (loss) income
  $ (177,800 )     $ 9,981    
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
                   
Depreciation, amortization and accretion
    12,513         11,270    
Goodwill impairment
    188,170            
Deferred income tax expense
    7,735         6,954    
Amortization of stock based compensation
    246         727    
Provisions for doubtful accounts, service credits and other
    1,567         1,517    
Non-cash transaction tax accrual adjustments
    (946 )       (1,394 )  
Loss on disposals of property and equipment
    12            
Changes in assets and liabilities:
                   
Accounts receivable
    76         1,000    
Prepaid expenses and other
    363         1,057    
Intangibles and other long-term assets
    477         (712 )  
Accounts payable and accrued liabilities
    (5,766 )       (2,373 )  
Customer deposits and deferred revenue
    (613 )       (722 )  
 
               
Net cash provided by operating activities
    26,034         27,305    
 
               
 
                   
Cash flows from investing activities:
                   
Purchases of property and equipment
    (3,988 )       (6,054 )  
Proceeds from disposals of property and equipment
    153         7    
 
               
Net cash used in investing activities
    (3,835 )       (6,047 )  
 
               
 
                   
Cash flows from financing activities:
                   
Cash distributions to stockholders
    (17,763 )       (28,517 )  
Purchase of common stock
            (2,698 )  
 
               
Net cash used in financing activities
    (17,763 )       (31,215 )  
 
               
 
                   
Net increase (decrease) in cash and cash equivalents
    4,436         (9,957 )  
Cash and cash equivalents, beginning of period
    64,542         75,032    
 
               
Cash and cash equivalents, end of period
  $ 68,978       $ 65,075    
 
               
 
                   
Supplemental disclosure:
                   
Interest paid
  $ 2       $    
 
               
Income taxes paid (state and local)
  $ 6       $ 15    
 
               
 
(a)   Slight variations in totals are due to rounding.