Attached files

file filename
8-K - FORM 8-K - Spok Holdings, Incw79350e8vk.htm
EX-99.2 - EX-99.2 - Spok Holdings, Incw79350exv99w2.htm
Exhibit 99.1
(LOGO)
News Release
         
For Immediate Release   Contact:   Bob Lougee    (800) 611-8488
Wednesday, July 28, 2010       bob.lougee@usamobility.com
USA Mobility Reports Second Quarter Operating Results;
Board Declares Quarterly Cash Distribution
Subscriber Trends Continue to Improve;
Operating Expenses Again Reduced;
Cash Flow Margins Remain Strong
Springfield, VA (July 28, 2010) — USA Mobility, Inc. (Nasdaq: USMO), a leading provider of wireless messaging and communications services, today announced operating results for the second quarter ended June 30, 2010.
In addition, the Company’s Board of Directors declared a regular quarterly cash distribution of $0.25 per share, payable on September 10, 2010 to stockholders of record on August 19, 2010. Of the $0.25 cash distribution, the Company expects $0.23 will be a return of capital and $0.02 will be a dividend distribution.
Total revenue for the second quarter was $59.1 million, compared to $62.8 million in the first quarter of 2010 and $75.1 million in the year-earlier quarter. Second quarter EBITDA (earnings before interest, taxes, depreciation, amortization and accretion) totaled $20.4 million, compared to $22.0 million in the first quarter and $24.0 million in the second quarter of 2009.
Net income for the second quarter was $13.1 million, or $0.58 per fully diluted share, compared to $8.9 million, or $0.39 per fully diluted share, in the first quarter, and $44.7 million, or $1.93 per fully diluted share, in the year-earlier quarter. The second quarter of 2009 net income included a one-time income tax benefit of $37.0 million due to the settlement of uncertain tax positions and tax refund claims and a litigation settlement expense of $4.0 million. Excluding those two items, net income in the year-earlier quarter would have been $10.1 million, or $0.43 per fully diluted share. In the second quarter of 2010, the Company reassessed the expected level of the Company’s 2010 taxable income, which allowed the Company to reduce the deferred tax asset valuation allowance by $4.7 million with a corresponding reduction in income tax expense. Absent the reduction in income tax expense, net income would have been $8.4 million or $0.37 per fully diluted share.

 


 

Second quarter results included:
    Net unit loss was 72,000 in the second quarter, compared to 83,000 in the prior quarter and 158,000 in the second quarter of 2009. Units in service totaled 2,027,000 at June 30, 2010, compared to 2,449,000 a year earlier.
 
    The quarterly rate of subscriber loss improved to 3.5 percent, compared to 3.8 percent in the first quarter and 6.0 percent in the second quarter of 2009. The annual rate of subscriber erosion also improved to 17.2 percent in the second quarter from 19.5 percent in the first quarter and 22.9 percent in the year-earlier quarter.
 
    Total paging ARPU (average revenue per unit) was $8.87 in the second quarter, compared to $9.00 in the first quarter and $8.96 in the year-earlier quarter.
 
    The quarterly rate of revenue erosion was 5.8 percent, compared to 4.0 percent in the prior quarter and 5.7 percent in the second quarter of 2009. The annual rate of revenue erosion was 21.3 percent, compared to 21.2 percent in the first quarter and 18.4 percent in the year-earlier quarter.
 
    Operating expenses (excluding depreciation, amortization and accretion) totaled $38.7 million in the second quarter, a reduction of $12.5 million, or 24.4 percent, from $51.2 million in the second quarter of 2009. Operating expenses declined 5.3 percent from the prior quarter.
 
    EBITDA margin (or EBITDA as a percentage of revenue) was 34.6 percent, compared to 31.9 percent in the second quarter of 2009.
 
    Capital expenses were $0.6 million in the quarter, compared to $4.4 million in the year-earlier quarter, due to fewer paging device purchases.
 
    The Company repurchased 176,839 shares of common stock during the quarter under its buy back program, and approximately $18.1 million remains available for purchases under the currently approved plan.
 
    The Company’s cash balance at June 30, 2010 was $129.1 million.
Vincent D. Kelly, president and chief executive officer, said: “USA Mobility reported another quarter of solid operating results, meeting or exceeding the majority of our key performance objectives. We were particularly pleased to see continued improvement in the pace of subscriber erosion, which slowed for the third consecutive quarter. At the same time, revenue, ARPU, and operating margins remained at high levels while our expense reduction efforts continued on track, all consistent with the financial guidance we provided earlier this year. In addition, we again generated sufficient cash flow during the quarter to return significant capital to stockholders in the form of cash distributions and share repurchases.”
Thomas L. Schilling, chief operating officer and chief financial officer, said the Company continued to pursue various cost reduction initiatives during the quarter. “Operating expenses (excluding depreciation, amortization and accretion) decreased 5.3 percent from the first quarter and 24.4 percent over the past 12 months,” Schilling noted, “including significant reductions in payroll expense and site rent expense. Operating expense as a percentage of

 


 

revenue was 65.4 percent in the quarter, compared to 68.1 percent in the year-earlier quarter, with the lower expenses contributing to an EBITDA margin of 34.6 percent versus 31.9 percent in the same quarter of 2009.”
Based on current trends, the Company is revising its financial guidance for 2010. Revenues are now expected to be between $230 million to $235 million, operating expenses (excluding depreciation, amortization and accretion) between $156 million to $159 million, and capital expenses between $7 million to $9 million.
* * * * * * * * *
USA Mobility plans to host a conference call for investors on its second quarter results at 10:00 a.m. Eastern Time on Thursday, July 29, 2010. The dial-in number for the call is 888-551-9020 (toll-free) or 719-325-2348 (toll). The pass code for the call is 4546380. A replay of the call will be available from 2:30 p.m. ET on July 29 until 11:59 p.m. on Thursday, August 12. The replay number is 888-203-1112 (toll-free) or 719-457-0820 (toll). The pass code for the replay is 4546380.
* * * * * * * * *
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. As a single-source provider, USA Mobilitys 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. In addition, USA Mobility 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.
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 RESULTS OF OPERATIONS (a)

(unaudited and in thousands, except share and per share amounts)
                                                   
    For the three months ended
    3/31/09   6/30/09   9/30/09   12/31/09   3/31/10     6/30/10
Revenues:
                                                 
Paging service
  $ 72,021     $ 67,972     $ 63,308     $ 59,657     $ 57,832       $ 54,875  
Cellular
    991       775       980       795       708         624  
Product sales
    5,271       5,269       4,354       3,927       3,358         2,732  
Other
    1,408       1,129       856       993       886         881  
                 
Total revenues
    79,691       75,145       69,498       65,372       62,784         59,112  
                 
 
                                                 
Operating expenses:
                                                 
Cost of products sold
    1,669       1,421       1,593       1,513       1,209         1,134  
Service, rental and maintenance
    22,955       21,290       20,950       20,115       18,941         17,175  
Selling and marketing
    6,062       5,600       5,198       4,955       4,557         4,394  
General and administrative
    20,186       22,801       16,050       15,289       15,812         15,924  
Severance and restructuring
    190       52       15       2,480       314         41  
Depreciation, amortization and accretion
    11,270       11,174       10,689       8,781       7,304         6,698  
                 
Total operating expenses
    62,332       62,338       54,495       53,133       48,137         45,366  
                 
% of total revenues
    78.2 %     83.0 %     78.4 %     81.3 %     76.7 %       76.7 %
 
                                                 
                 
Operating income
    17,359       12,807       15,003       12,239       14,647         13,746  
                 
% of total revenues
    21.8 %     17.0 %     21.6 %     18.7 %     23.3 %       23.3 %
 
                                                 
Interest income (expense), net
    26       28       16       (1 )     3         4  
Other income (expense), net
    112       (42 )     185       275       78         180  
                 
Income before income tax expense (benefit)
    17,497       12,793       15,204       12,513       14,728         13,930  
Income tax expense (benefit)
    7,516       (31,953 )     6,003       8,883       5,843         841  
                 
Net income
  $ 9,981     $ 44,746     $ 9,201     $ 3,630     $ 8,885       $ 13,089  
                 
       
 
                                                 
Basic net income per common share
  $ 0.43     $ 1.96     $ 0.40     $ 0.16     $ 0.39       $ 0.59  
                 
Diluted net income per common share
  $ 0.43     $ 1.93     $ 0.40     $ 0.16     $ 0.39       $ 0.58  
                 
 
                                                 
Basic weighted average common shares outstanding
    23,134,072       22,858,573       22,856,951       22,830,040       22,654,240         22,307,488  
                 
Diluted weighted average common shares outstanding
    23,479,796       23,200,736       23,194,360       23,167,729       22,967,192         22,620,707  
                 
 
                                                 
Reconciliation of operating income to EBITDA (b):
                                                 
Operating income
  $ 17,359     $ 12,807     $ 15,003     $ 12,239     $ 14,647       $ 13,746  
Add back: depreciation, amortization and accretion
    11,270       11,174       10,689       8,781       7,304         6,698  
                 
EBITDA
  $ 28,629     $ 23,981     $ 25,692     $ 21,020     $ 21,951       $ 20,444  
                 
% of total revenues
    35.9 %     31.9 %     37.0 %     32.2 %     35.0 %       34.6 %
 
(a)   Slight variations in totals are due to rounding.
 
(b)   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.
UNITS IN SERVICE ACTIVITY (a)

(unaudited and in thousands)
                                                   
    For the three months ended
    3/31/09   6/30/09   9/30/09   12/31/09   3/31/10     6/30/10
Units in service
                                                 
Beginning units in service
                                                 
Direct one-way
    2,349       2,198       2,079       1,969       1,881         1,804  
Direct two-way
    171       157       147       141       133         126  
                   
Total direct
    2,520       2,355       2,226       2,110       2,014         1,930  
                   
Indirect one-way
    196       161       139       116       101         90  
Indirect two-way
    99       91       84       71       67         79  
                   
Total indirect
    295       252       223       187       168         169  
                   
Total beginning units in service
    2,815       2,607       2,449       2,297       2,182         2,099  
                   
 
                                                 
Gross placements
                                                 
Direct one-way
    67       74       64       55       53         62  
Direct two-way
    6       7       9       5       5         6  
                   
Total direct
    73       81       73       60       58         68  
                   
Indirect one-way
    8       9       7       6       3         3  
Indirect two-way
    4       2       1       2       15         1  
                   
Total indirect
    12       11       8       8       18         4  
                   
Total gross placements
    85       92       81       68       76         72  
                   
 
                                                 
Gross disconnects
                                                 
Direct one-way
    (218 )     (193 )     (174 )     (143 )     (130 )       (117 )
Direct two-way
    (20 )     (17 )     (15 )     (13 )     (12 )       (11 )
                         
Total direct
    (238 )     (210 )     (189 )     (156 )     (142 )       (128 )
                         
Indirect one-way
    (43 )     (31 )     (30 )     (21 )     (14 )       (11 )
Indirect two-way
    (12 )     (9 )     (14 )     (6 )     (3 )       (5 )
                         
Total indirect
    (55 )     (40 )     (44 )     (27 )     (17 )       (16 )
                         
Total gross disconnects
    (293 )     (250 )     (233 )     (183 )     (159 )       (144 )
                   
 
                                                 
Net (loss) gain
                                                 
Direct one-way
    (151 )     (119 )     (110 )     (88 )     (77 )       (55 )
Direct two-way
    (14 )     (10 )     (6 )     (8 )     (7 )       (5 )
                         
Total direct
    (165 )     (129 )     (116 )     (96 )     (84 )       (60 )
                         
Indirect one-way
    (35 )     (22 )     (23 )     (15 )     (11 )       (8 )
Indirect two-way
    (8 )     (7 )     (13 )     (4 )     12         (4 )
                         
Total indirect
    (43 )     (29 )     (36 )     (19 )     1         (12 )
                         
Total net change
    (208 )     (158 )     (152 )     (115 )     (83 )       (72 )
                   
 
                                                 
Ending units in service
                                                 
Direct one-way
    2,198       2,079       1,969       1,881       1,804         1,749  
Direct two-way
    157       147       141       133       126         121  
                   
Total direct
    2,355       2,226       2,110       2,014       1,930         1,870  
                   
Indirect one-way
    161       139       116       101       90         82  
Indirect two-way
    91       84       71       67       79         75  
                   
Total indirect
    252       223       187       168       169         157  
                   
Total ending units in service
    2,607       2,449       2,297       2,182       2,099         2,027  
                   
 
(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
    3/31/09   6/30/09   9/30/09   12/31/09   3/31/10     6/30/10
ARPU
                                                 
Direct one-way
  $ 8.11     $ 8.18     $ 8.08     $ 8.04     $ 8.16       $ 8.05  
Direct two-way
    23.68       23.62       23.42       23.59       23.61         23.55  
                         
Total direct
    9.15       9.21       9.10       9.06       9.17         9.06  
 
                                                 
Indirect one-way
    7.05       7.43       7.51       7.77       8.78         8.87  
Indirect two-way
    4.58       5.19       5.49       5.14       4.84         4.25  
                         
Total indirect
    6.19       6.60       6.74       6.73       7.04         6.65  
 
                                                 
Total one-way
    8.03       8.14       8.05       8.02       8.19         8.09  
Total two-way
    16.66       16.86       17.09       17.32       16.76         16.06  
                         
Total paging ARPU
  $ 8.86     $ 8.96     $ 8.89     $ 8.88     $ 9.00       $ 8.87  
                         
 
                                                 
Gross disconnect rate (b)
                                                 
Direct one-way
    -9.3 %     -8.8 %     -8.4 %     -7.2 %     -6.9 %       -6.5 %
Direct two-way
    -11.8 %     -11.0 %     -10.2 %     -8.9 %     -9.1 %       -8.5 %
                         
Total direct
    -9.5 %     -8.9 %     -8.5 %     -7.3 %     -7.1 %       -6.6 %
 
                                                 
Indirect one-way
    -22.0 %     -19.4 %     -21.9 %     -18.9 %     -13.7 %       -12.8 %
Indirect two-way
    -11.6 %     -9.1 %     -16.4 %     -8.5 %     -4.9 %       -6.8 %
                         
Total indirect
    -18.5 %     -15.6 %     -19.8 %     -14.9 %     -10.1 %       -9.9 %
 
                                                 
Total one-way
    -10.3 %     -9.5 %     -9.2 %     -7.9 %     -7.3 %       -6.8 %
Total two-way
    -11.7 %     -10.3 %     -12.5 %     -8.8 %     -7.7 %       -7.9 %
                         
Total paging gross disconnect rate
    -10.4 %     -9.6 %     -9.5 %     -8.0 %     -7.3 %       -6.9 %
                         
 
                                                 
Net (loss) gain rate (c)
                                                 
Direct one-way
    -6.4 %     -5.4 %     -5.3 %     -4.4 %     -4.1 %       -3.1 %
Direct two-way
    -8.5 %     -6.4 %     -4.4 %     -5.5 %     -5.0 %       -4.2 %
                         
Total direct
    -6.6 %     -5.5 %     -5.2 %     -4.5 %     -4.2 %       -3.1 %
 
                                                 
Indirect one-way
    -17.8 %     -13.7 %     -16.9 %     -13.6 %     -10.5 %       -9.8 %
Indirect two-way
    -8.2 %     -7.2 %     -14.9 %     -5.2 %     17.1 %       -4.7 %
                         
Total indirect
    -14.6 %     -11.3 %     -16.1 %     -10.4 %     0.7 %       -7.4 %
               
 
                                                 
Total one-way
    -7.3 %     -6.0 %     -6.0 %     -5.0 %     -4.4 %       -3.4 %
Total two-way
    -8.4 %     -6.7 %     -8.2 %     -5.4 %     2.5 %       -4.4 %
                         
Total paging net (loss) gain rate
    -7.4 %     -6.0 %     -6.2 %     -5.0 %     -3.8 %       -3.5 %
                         
 
(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.
SUPPLEMENTAL INFORMATION BY MARKET SEGMENT (a)

(unaudited)
                                                   
    For the three months ended
    3/31/09   6/30/09   9/30/09   12/31/09   3/31/10     6/30/10
Gross placement rate (b)
                                                 
Healthcare
    3.7 %     4.4 %     3.8 %     3.4 %     3.5 %       4.4 %
Government
    1.7 %     2.4 %     2.4 %     1.9 %     1.8 %       1.9 %
Large enterprise
    2.4 %     2.2 %     3.3 %     2.2 %     2.1 %       2.6 %
Other
    2.4 %     2.5 %     2.3 %     2.2 %     2.4 %       2.0 %
                   
Total direct
    2.9 %     3.4 %     3.3 %     2.8 %     2.9 %       3.5 %
Total indirect
    3.9 %     4.3 %     3.7 %     4.5 %     10.9 %       2.5 %
                   
Total
    3.0 %     3.5 %     3.3 %     3.0 %     3.5 %       3.4 %
                   
 
                                                 
Gross disconnect rate (b)
                                                 
Healthcare
    -6.8 %     -6.2 %     -6.7 %     -5.5 %     -4.9 %       -5.2 %
Government
    -9.9 %     -10.7 %     -10.7 %     -9.4 %     -9.1 %       -8.3 %
Large enterprise
    -13.3 %     -13.0 %     -10.7 %     -9.4 %     -10.3 %       -8.3 %
Other
    -13.0 %     -12.4 %     -10.6 %     -10.1 %     -11.0 %       -9.6 %
                   
Total direct
    -9.5 %     -8.9 %     -8.5 %     -7.3 %     -7.1 %       -6.6 %
Total indirect
    -18.5 %     -15.6 %     -19.8 %     -14.9 %     -10.1 %       -9.9 %
                   
Total
    -10.4 %     -9.6 %     -9.5 %     -8.0 %     -7.3 %       -6.9 %
                   
 
                                                 
Net (loss) gain rate (b)
                                                 
Healthcare
    -3.1 %     -1.8 %     -2.9 %     -2.1 %     -1.4 %       -0.8 %
Government
    -8.2 %     -8.4 %     -8.3 %     -7.5 %     -7.4 %       -6.4 %
Large enterprise
    -10.9 %     -10.9 %     -7.4 %     -7.2 %     -8.1 %       -5.7 %
Other
    -10.6 %     -10.0 %     -8.3 %     -7.9 %     -8.6 %       -7.6 %
                   
Total direct
    -6.6 %     -5.5 %     -5.2 %     -4.5 %     -4.2 %       -3.1 %
Total indirect
    -14.6 %     -11.3 %     -16.1 %     -10.4 %     0.7 %       -7.4 %
                   
Total
    -7.4 %     -6.0 %     -6.2 %     -5.0 %     -3.8 %       -3.5 %
                   
 
                                                 
End of period units in service % of total (b)
                                                 
Healthcare
    44.9 %     49.8 %     51.5 %     53.2 %     54.5 %       56.1 %
Government
    17.2 %     15.6 %     15.3 %     14.9 %     14.4 %       14.1 %
Large enterprise
    12.0 %     11.8 %     11.8 %     11.4 %     10.9 %       10.7 %
Other
    16.2 %     13.7 %     13.2 %     12.8 %     12.1 %       11.4 %
                   
Total direct
    90.3 %     90.9 %     91.8 %     92.3 %     91.9 %       92.3 %
Total indirect
    9.7 %     9.1 %     8.2 %     7.7 %     8.1 %       7.7 %
                   
Total
    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.
SUPPLEMENTAL INFORMATION — DIRECT UNITS IN SERVICE AND CELLULAR
ACTIVATIONS (a)

(unaudited)
                                                   
    For the three months ended
    3/31/09   6/30/09   9/30/09   12/31/09   3/31/10     6/30/10
Account size ending units in service (000’s)
                                                 
1 to 3 units
    137       126       118       109       101         95  
4 to 10 units
    82       75       70       66       62         58  
11 to 50 units
    199       183       168       158       149         140  
51 to 100 units
    125       112       104       97       92         86  
101 to 1,000 units
    626       580       546       519       499         483  
>1,000 units
    1,186       1,150       1,104       1,065       1,027         1,008  
                         
Total
    2,355       2,226       2,110       2,014       1,930         1,870  
                         
 
                                                 
End of period units in service % of total direct
                                                 
1 to 3 units
    5.8 %     5.7 %     5.6 %     5.4 %     5.2 %       5.1 %
4 to 10 units
    3.5 %     3.4 %     3.3 %     3.3 %     3.2 %       3.1 %
11 to 50 units
    8.4 %     8.2 %     8.0 %     7.8 %     7.7 %       7.5 %
51 to 100 units
    5.3 %     5.0 %     4.9 %     4.8 %     4.8 %       4.6 %
101 to 1,000 units
    26.6 %     26.0 %     25.9 %     25.8 %     25.9 %       25.8 %
>1,000 units
    50.4 %     51.7 %     52.3 %     52.9 %     53.2 %       53.9 %
                         
Total
    100.0 %     100.0 %     100.0 %     100.0 %     100.0 %       100.0 %
                         
 
                                                 
Account size net loss rate
                                                 
1 to 3 units
    -7.8 %     -7.9 %     -6.9 %     -7.4 %     -7.6 %       -5.8 %
4 to 10 units
    -8.8 %     -7.9 %     -6.7 %     -6.1 %     -5.3 %       -6.0 %
11 to 50 units
    -8.9 %     -8.2 %     -7.7 %     -5.9 %     -5.8 %       -6.1 %
51 to 100 units
    -6.2 %     -10.1 %     -7.6 %     -6.8 %     -4.4 %       -6.5 %
101 to 1,000 units
    -8.0 %     -7.4 %     -5.9 %     -4.9 %     -3.7 %       -3.3 %
>1,000 units
    -5.1 %     -3.1 %     -4.0 %     -3.5 %     -3.7 %       -1.9 %
                         
Total
    -6.6 %     -5.5 %     -5.2 %     -4.5 %     -4.2 %       -3.1 %
                         
 
                                                 
Account size ARPU
                                                 
1 to 3 units
  $ 14.73     $ 15.07     $ 14.98     $ 15.03     $ 15.28       $ 15.37  
4 to 10 units
    14.00       14.30       14.24       14.21       14.37         14.35  
11 to 50 units
    11.41       11.65       11.54       11.45       11.86         12.01  
51 to 100 units
    10.30       10.13       10.06       10.06       10.67         10.76  
101 to 1,000 units
    8.94       9.04       8.89       8.82       9.00         8.93  
>1,000 units
    7.77       7.80       7.76       7.79       7.80         7.63  
                         
Total
  $ 9.15     $ 9.21     $ 9.10     $ 9.06     $ 9.17       $ 9.06  
                         
 
                                                 
Cellular revenue
                                                 
Number of activations
    2,389       2,207       2,633       2,253       2,354         1,885  
                         
Revenue from cellular services (000’s)
  $ 991     $ 775     $ 980     $ 795     $ 708       $ 624  
                         
 
(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
    3/31/09   6/30/09   9/30/09   12/31/09   3/31/10     6/30/10
Cost of products sold
  $ 1,669     $ 1,421     $ 1,593     $ 1,513     $ 1,209       $ 1,134  
                         
 
                                                 
Service, rental and maintenance
                                                 
Site rent
    11,218       10,223       10,422       9,871       9,079         8,283  
Telecommunications
    4,485       4,284       3,945       3,885       3,831         3,467  
Payroll and related
    5,631       5,286       4,988       4,725       4,586         4,444  
Stock based compensation
    49       7       13       12       6         7  
Other
    1,572       1,490       1,582       1,622       1,439         974  
                         
Total service, rental and maintenance
    22,955       21,290       20,950       20,115       18,941         17,175  
                         
 
                                                 
Selling and marketing
                                                 
Payroll and related
    4,175       3,711       3,366       3,199       2,964         2,814  
Commissions
    1,201       1,422       1,328       1,131       1,164         1,367  
Stock based compensation
    109       26       26       26       17         22  
Other
    577       441       478       599       412         191  
                         
Total selling and marketing
    6,062       5,600       5,198       4,955       4,557         4,394  
                         
 
                                                 
General and administrative
                                                 
Payroll and related
    9,075       7,754       7,213       7,089       6,912         6,621  
Stock based compensation
    569       241       241       241       240         242  
Bad debt
    850       750       699       654       713         594  
Facility rent
    1,628       1,446       1,457       1,411       1,354         1,326  
Telecommunications
    771       721       720       702       657         603  
Outside services
    4,514       4,063       3,269       3,051       3,267         3,185  
Taxes, licenses and permits
    1,101       1,695       (680 )     660       1,591         1,836  
Other
    1,678       6,131       3,131       1,481       1,078         1,517  
                         
Total general and administrative
    20,186       22,801       16,050       15,289       15,812         15,924  
                         
 
                                                 
Severance and restructuring
    190       52       15       2,480       314         41  
Depreciation, amortization and accretion
    11,270       11,174       10,689       8,781       7,304         6,698  
 
                                                 
                         
Operating expenses
  $ 62,332     $ 62,338     $ 54,495     $ 53,133     $ 48,137       $ 45,366  
                         
 
                                                 
Capital expenditures
  $ 6,054     $ 4,355     $ 1,806     $ 5,014     $ 1,725       $ 563  
 
(a)   Slight variations in totals are due to rounding.

 


 

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

(in thousands)
                   
    12/31/09     6/30/10
              (unaudited)
Assets
                 
Current assets:
                 
Cash and cash equivalents
  $ 109,591       $ 129,123  
Accounts receivable, net
    19,051         14,655  
Prepaid expenses and other
    3,016         3,878  
Tax receivables
    5,117          
Deferred income tax assets, net
    1,068         760  
                 
Total current assets
    137,843         148,416  
Property and equipment, net
    41,295         30,984  
Intangible assets, net
    226         278  
Tax receivables
            5,155  
Deferred income tax assets, net
    32,123         25,854  
Other assets
    2,061         407  
                 
Total assets
  $ 213,548       $ 211,094  
                 
 
                 
Liabilities and stockholders’ equity
                 
Current liabilities:
                 
Accounts payable and accrued liabilities
  $ 35,214       $ 27,946  
Customer deposits
    888         797  
Deferred revenue
    7,422         6,681  
                 
Total current liabilities
    43,524       $ 35,424  
Other long-term liabilities
    11,228         12,104  
                 
Total liabilities
    54,752         47,528  
                 
Stockholders’ equity:
                 
Preferred stock
             
Common stock
    2         2  
Additional paid-in capital
    137,378         131,420  
Retained earnings
    21,416         32,144  
                 
Total stockholders’ equity
    158,796         163,566  
                 
Total liabilities and stockholders’ equity
  $ 213,548       $ 211,094  
                 
 
(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 six months ended
    6/30/09     6/30/10
Cash flows from operating activities:
                 
Net income
  $ 54,727       $ 21,974  
Adjustments to reconcile net income to net cash provided by operating activities:
                 
Depreciation, amortization and accretion
    22,444         14,002  
Deferred income tax expense
    17,012         6,577  
Amortization of stock based compensation
    1,001         534  
Provisions for doubtful accounts, service credits and other
    2,507         2,400  
Non-cash transaction tax accrual adjustments
    (1,949 )       (667 )
Loss on disposals of property and equipment
    153         22  
Changes in assets and liabilities:
                 
Accounts receivable
    1,692         1,996  
Prepaid expenses, intangibles and other assets
    (3,065 )       (17 )
Accounts payable and accrued liabilities
    (2,261 )       (6,188 )
Customer deposits and deferred revenue
    (1,964 )       (833 )
Other long-term liabilities
    (37,654 )        
                 
Net cash provided by operating activities
    52,643         39,800  
                 
 
                 
Cash flows from investing activities:
                 
Purchases of property and equipment
    (10,409 )       (2,288 )
Proceeds from disposals of property and equipment
    23         58  
                 
Net cash used in investing activities
    (10,386 )       (2,230 )
                 
 
                 
Cash flows from financing activities:
                 
Cash distributions to stockholders
    (34,182 )       (11,151 )
Purchase of common stock
    (3,537 )       (6,887 )
                 
Net cash used in financing activities
    (37,719 )       (18,038 )
                 
 
                 
Net increase in cash and cash equivalents
    4,538         19,532  
Cash and cash equivalents, beginning of period
    75,032         109,591  
                 
Cash and cash equivalents, end of period
  $ 79,570       $ 129,123  
                 
Supplemental disclosure:
                 
Interest paid
  $       $  
                 
Income taxes paid (state and local)
  $ 385       $ 362  
                 
 
(a)   Slight variations in totals are due to rounding.