Segment Reporting

9 Months Ended

Sep. 30, 2013

Segment Reporting [Abstract]

Segment Reporting

Segment Reporting — Currently, we have two reportable operating segments: a Wireless segment and a Software segment. These segments are operated and managed as strategic business units and are organized by products and services. We measure and evaluate our segments based on segment operating income, consistent with the chief operating decision maker’s assessment of segment performance.

Our segments and their principal activities consist of the following:

Wireless	Provides local, regional and nationwide one-way paging and advanced two-way messaging services and mobile voice and data services through third party providers.
Software	Provides mission critical unified communications solutions for contact centers, emergency management, mobile event notification and messaging.

We use a non-GAAP financial measure as a key element in determining performance for purposes of incentive compensation under our annual STIP. That non-GAAP financial measure is operating cash flow (“OCF”), defined as earnings before interest, taxes, depreciation, amortization and accretion (“EBITDA”) less purchases of property and equipment. (EBITDA is defined as operating income plus depreciation, amortization and accretion, each determined in accordance with GAAP). The following table presents the key financial metrics of our segments for the periods stated:

	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2013			2012			2013			2012
	(Dollars in thousands)
Revenues:
Wireless	$	37,067		$	41,440		$	113,617		$	128,488
Software	12,602			13,676			41,450			39,324
Total revenues	49,669			55,116			155,067			167,812
Operating expenses:
Wireless	$	25,685		28,079			78,358			86,538
Software	14,450			13,990			43,530			40,160
Total operating expenses	40,135			42,069			121,888			126,698
Operating income (loss):
Wireless	11,382			13,361			35,259			41,950
Software	(1,848		)	(314		)	(2,080		)	(836		)
Total operating income	$	9,534		$	13,047		$	33,179		$	41,114

	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2013			2012			2013			2012
				(Dollars in thousands)
EBITDA (as defined by the Company):
Wireless	$	13,819		$	16,305		$	42,472		$	50,563
Software	(427		)	1,466			2,194			4,396
Total EBITDA	13,392			17,771			44,666			54,959
% of revenue	27.0		%	32.2		%	28.8		%	32.8		%
Capital expenditures:
Wireless	2,509			2,658			7,586			7,031
Software	(5		)	38			186			104
Total capital expenditures	2,504			2,696			7,772			7,135
OCF (as defined by the Company):
Wireless	11,310			13,647			34,886			43,532
Software	(422		)	1,428			2,008			4,292
Total OCF	$	10,888		$	15,075		$	36,894		$	47,824
% of revenue	21.9		%	27.4		%	23.8		%	28.5		%

Segment information for total assets is as follows for the periods stated:

	September 30, 2013		December 31, 2012
	(In thousands)
	(Unaudited)
Wireless(1)	$	165,267	$	158,261
Software	159,096		164,366
Total assets	$	324,363	$	322,627

⁽¹⁾  Includes elimination of $141.6 million in investment in software operations recorded upon the acquisition of Amcom.

Below is a reconciliation of our non-GAAP measure for the periods stated:

	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2013			2012			2013			2012
				(Dollars in thousands)
Operating income	$	9,534		$	13,047		$	33,179		$	41,114
Plus: Depreciation, amortization and accretion	3,858			4,724			11,487			13,845
EBITDA (as defined by the Company)	13,392			17,771			44,666			54,959
Less: Purchases of property and equipment	(2,504		)	(2,696		)	(7,772		)	(7,135		)
OCF (as defined by the Company)	$	10,888		$	15,075		$	36,894		$	47,824