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8-K - FORM 8-K - Spok Holdings, Incw82648e8vk.htm
Exhibit 99.1
(GRAPHIC)
News Release
         
For Immediate Release
  Contact:   Bob Lougee (800) 611-8488
Wednesday, May 4, 2011
      bob.lougee@usamobility.com
USA Mobility Reports First Quarter Operating Results;
Board Declares Regular Quarterly Dividend
Wireless Subscriber and Revenue Trends Improve;
Software Business Performance on Track;
Operating Expenses Again Reduced
Springfield, VA (May 4, 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 first quarter ended March 31, 2011. In addition, the Company’s Board of Directors declared a regular quarterly dividend of $0.25 per share, payable on June 24, 2011 to stockholders of record on May 20, 2011.
Total revenue for the first quarter was $57.3 million, including $52.5 million from the Company’s wireless business (USA Mobility Wireless) and $4.8 million from its software business (Amcom Software), which the Company acquired on March 3, 2011. Software maintenance revenue was reduced by $0.9 million for purchase accounting adjustments. First quarter revenue from the wireless business was $52.5 million, compared to $54.6 million in the fourth quarter and $62.8 million in the first quarter of 2010. Reported results for the software business include only the 29-day period from March 3, 2011 to March 31, 2011. On a pro forma basis, reflecting Amcom results for the full quarter and excluding purchase accounting adjustments, total revenue was $65.6 million.
First quarter EBITDA (earnings before interest, taxes, depreciation, amortization and accretion) totaled $17.9 million, including $17.0 million from wireless and $0.9 million from software. First quarter EBITDA from wireless was $17.0 million, compared to $16.9 million in the prior quarter and $22.0 million in the year-earlier quarter. On a pro forma basis, excluding purchase accounting adjustments and one-time acquisition related expenses, first quarter EBITDA was $21.7 million or 33.0 percent of revenue.
Net income for the first quarter reflected 29 days of the software business as well as the maintenance revenue purchase accounting adjustment. Also, operating expenses (excluding depreciation, amortization and accretion)

 


 

reflected $2.9 million in one-time acquisition related expenses, and depreciation, amortization and accretion increased $0.5 million due primarily to acquired intangible assets. Additionally, the acquisition resulted in a $32.4 million reduction in the deferred income tax asset valuation allowance and a corresponding reduction in income tax expense. The result was net income for the first quarter of $40.7 million, or $1.82 per fully diluted share, compared to $8.9 million, or $0.39 per fully diluted share, in the year-earlier quarter. Excluding the purchase accounting adjustment to software maintenance revenue, the one-time acquisition related expenses and the reduction in the deferred income tax asset valuation allowance, net income for the first quarter would have been $10.9 million, or $0.49 per fully diluted share
First quarter results included:
Wireless
    Net unit losses improved to 61,000 in the first quarter, compared to 83,000 in the first quarter of 2010, and the quarterly rate of unit erosion improved to 3.2 percent from 3.8 percent in the year-earlier quarter. The annual rate of subscriber erosion was 12.9 percent in the first quarter, compared to 19.5 percent in the year-ago quarter, and was the lowest annual unit loss rate in more than six years. Units in service at March 31, 2011 totaled 1,828,000, compared to 2,099,000 a year earlier.
    The quarterly rate of revenue erosion improved to 3.9 percent from 4.0 percent in the first quarter of 2010, while the annual rate of revenue erosion was 16.3 percent in the first quarter, compared to 21.2 percent in the year-earlier quarter, reaching its lowest level in two years.
    Total ARPU (average revenue per unit) was $8.72 in the first quarter, compared to $8.74 in the fourth quarter and $9.00 in the first quarter of 2010.
Software
    Pro forma bookings for the quarter ended March 31, 2011 were $13.7 million and the backlog was $19.3 million at March 31, 2011.
    Revenue from the software business totaled $4.8 million in the period from March 3, 2011 to March 31, 2011, of which $0.9 million was maintenance revenue and $3.9 million was operations revenue (which includes software, professional services and equipment sales). Pro forma revenue, excluding purchase accounting adjustments of $0.9 million, was $5.7 million for the 29-day period.
    The pro forma renewal rate for maintenance in the first quarter was 99.5 percent.

 


 

Total Company
    Operating expenses (excluding depreciation, amortization and accretion) totaled $39.5 million in the first quarter, with $35.6 million for wireless (which included $2.9 million of acquisition related expenses) and $3.9 million for software.
    EBITDA margin (or EBITDA as a percentage of revenue) was 31.2 percent. EBITDA margin for wireless was 32.3 percent, compared to 30.9 percent in the fourth quarter and 35.0 percent in the year-earlier quarter.
    Capital expenses were $1.5 million, compared to $1.7 million in the first quarter of 2010.
    The Company’s cash balance at March 31, 2011 was $23.4 million.
    The outstanding debt balance was $51.9 million at an interest rate of 5.25 percent.
Vincent D. Kelly, president and chief executive officer, said: “Consistent with financial guidance we provided earlier this year, USA Mobility continued to make excellent progress during the first quarter, meeting or exceeding key performance goals for both our wireless and software businesses. We were particularly pleased to see solid results from our recently acquired Amcom Software subsidiary, as well as continued improvement in the pace of subscriber and revenue erosion in our wireless business. At the same time, we continued to reduce expenses, maintain strong operating margins, and generate sufficient cash flow to again return capital to stockholders in the form of dividend distributions.”
Kelly said the Company continued to focus sales and marketing efforts in its wireless business during the quarter around its core market segments of Healthcare, Government and Large Enterprise. “These core segments represented approximately 88.9 percent of our direct subscriber base and 83.8 percent of our direct paging revenue at the end of the first quarter, compared to 86.8 percent and 81.5 percent, respectively, a year earlier. Healthcare continued to be 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.”
Commenting on the software business, Kelly said: “Our integration of Amcom is on track and going exceptionally well. To date we have initiated training programs for both sales teams to share leads and cross sell products and services into our key market segments, especially Healthcare. Additionally, we have received very positive feedback from our healthcare customer base with respect to the merger and its impact on our future. Moving forward we expect to leverage additional operational capabilities from each business, including customer relationships, technical know-how, and back-office support. Despite the distraction of the acquisition in the first quarter,” Kelly noted, “our software business generated strong bookings and has a $19.3 million backlog going into the second quarter.”
Shawn E. Endsley, chief financial officer, said the Company continued to reduce operating expenses in the first quarter. “Recurring operating expenses (excluding depreciation, amortization and accretion) for wireless decreased

 


 

20.0 percent from the year-earlier quarter,” Endsley noted, “exceeding the rate of wireless revenue decline. At the same time, ARPU remained strong and capital expenses declined. With respect to Amcom,” Endsley added, “the addition of software operations required a review of the recovery of our deferred income tax assets. The expected additional taxable income from Amcom allowed for a reduction in the deferred income tax asset valuation allowance and income tax expense of $32.4 million. Including software operations from March 3, 2011, the combined businesses generated operating cash flow of $12.7 million in the quarter.”
Regarding financial guidance for 2011, Endsley said the Company is reiterating its prior guidance for the full year for the wireless company as well as its full year pro-forma guidance for the software company. Additionally, the software company guidance for financial reporting purposes has been broken out separately in the schedules attached to this press release and has been adjusted to reflect: (1) results for the partial year (March 3 to December 31); and (2) purchase accounting adjustments for deferred revenue. As such, Endsley said the Company expects total revenues for 2011 to range from $224 million to $240 million, with wireless between $182 million and $192 million and software between $42 million and $48 million; operating expenses (excluding depreciation, amortization and accretion) to range from $167 million to $176 million, with wireless between $132 million and $136 million and software between $35 million and $40 million; and capital expenses to range from $6 million to $9 million, with wireless between $5 million and $7 million and software between $1 million and $2 million.
* * * * * * * * *
USA Mobility plans to host a conference call for investors on its first quarter results at 10:00 a.m. Eastern Time on Thursday, May 5, 2011. Dial-in numbers for the call are 719-325-2488 or 888-857-6929. The pass code for the call is 2032739. A replay of the call will be available from 2:00 p.m. ET on May 5 until 11:59 p.m. on Thursday, May 19. Replay numbers are 719-457-0820 or 888-203-1112. The pass code for the replay is 2032739.
* * * * * * * * *
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, through its Amcom Software subsidiary, it provides mission critical unified communications solutions for contact centers, emergency management, mobile event notification and messaging. 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     Adjusted  
    Guidance Range (a)     Guidance Range (b)  
    From     To     From     To  
Revenues
                               
Wireless
  $ 182.0     $ 192.0     $ 182.0     $ 192.0  
Software
    57.0       63.0 (c)     42.0       48.0  
 
                       
Combined
  $ 239.0     $ 255.0     $ 224.0     $ 240.0  
 
                       
 
                               
Operating Expenses (d)
                               
Wireless
  $ 136.0     $ 132.0     $ 136.0     $ 132.0  
Software
    47.0       43.0       40.0       35.0  
 
                       
Combined
  $ 183.0     $ 175.0     $ 176.0     $ 167.0  
 
                       
 
                               
Capital Expenses
                               
Wireless
  $ 7.0     $ 5.0     $ 7.0     $ 5.0  
Software
    2.0       1.0       2.0       1.0  
 
                       
Combined
  $ 9.0     $ 6.0     $ 9.0     $ 6.0  
 
                       
 
(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)   Software revenues do 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)
                         
    Wireless     Software        
    For three months     For the period        
    ended March 31,     March 3, 2011 to        
    2011     March 31, 2011     Total  
Revenue:
                       
Paging service
  $ 48,628     $     $ 48,628  
Cellular
    684             684  
Product sales
    2,344       4,799       7,143  
Other
    880             880  
 
                 
Total revenue
    52,536       4,799       57,335  
 
                 
 
                       
Operating expenses:
                       
Cost of products sold
    663       1,762       2,425  
Service, rental and maintenance
    15,816       646       16,462  
Selling and marketing
    3,833       1,088       4,921  
General and administrative
    15,240       387       15,627  
Severance and restructuring
    33             33  
Depreciation, amortization and accretion
    4,032       508       4,540  
 
                 
Total operating expenses
    39,617       4,391       44,008  
 
                 
% of total revenue
    75.4 %     91.5 %     76.8 %
 
                       
 
                 
Operating income
    12,919       408       13,327  
 
                 
% of total revenue
    24.6 %     8.5 %     23.2 %
 
                       
Interest expense, net
    (247 )     (9 )     (256 )
Other income (expense), net
    205       (2 )     203  
 
                 
Income before income tax (benefit)
    12,877       397       13,274  
Income tax (benefit) expense
    (27,583 )     206       (27,377 )
 
                 
Net income
  $ 40,460     $ 191     $ 40,651  
 
                 
 
                       
Basic net income per common share
                  $ 1.84  
 
                     
Diluted net income per common share
                  $ 1.82  
 
                     
 
                       
Basic weighted average common shares outstanding
                    22,063,393  
 
                     
Diluted weighted average common shares outstanding
                    22,333,399  
 
                     
 
                       
Reconciliation of operating income to EBITDA (c):
                       
Operating income
  $ 12,919     $ 408     $ 13,327  
Add back: depreciation, amortization and accretion
    4,032       508       4,540  
     
EBITDA
    16,951       916       17,867  
     
% of total revenue
    32.3 %     19.1 %     31.2 %
 
(a)   Includes consolidated results of operations of USA Mobility Wireless, Inc. (“Wireless”) and Software.
 
(b)   Slight variations in totals are due to rounding.
 
(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.
CONDENSED CONSOLIDATED BALANCE SHEETS (a)

(In thousands)
                 
    3/31/11     12/31/10  
    (Unaudited)          
Assets
               
Current assets:
               
Cash and cash equivalents
  $ 23,383     $ 129,220  
Accounts receivable, net
    21,134       13,419  
Prepaid expenses and other
    4,412       2,638  
Inventory, net
    2,432       160  
Tax receivables
    8,050       5,004  
Escrow receivables
    7,500        
Deferred income tax assets, net
    7,907       3,915  
     
Total current assets
    74,818       154,356  
Tax receivables
    191       191  
Property and equipment, net
    26,248       27,135  
Goodwill
    131,172        
Other intangible assets, net
    43,477       511  
Deferred income tax assets, net
    55,046       47,390  
Escrow receivables
    7,500        
Deferred financing costs, net
    1,294        
Other assets
    1,150       1,075  
     
Total assets
  $ 340,896     $ 230,658  
     
 
               
Liabilities and stockholders’ equity
               
Current liabilities:
               
Current portion of long-term debt
  $ 12,500     $  
Consideration payable
    7,500        
Accounts payable and accrued liabilities
    18,321       17,527  
Accrued compensation and benefits
    8,600       9,968  
Customer deposits
    3,266       718  
Deferred revenue
    10,493       6,268  
     
Total current liabilities
    60,680       34,481  
Long-term debt, net of current portion
    39,447        
Consideration payable
    7,500        
Deferred revenue
    487        
Other long-term liabilities
    12,657       11,787  
     
Total liabilities
    120,771       46,268  
     
Commitments and contingencies
               
Stockholders’ equity:
               
Preferred stock
           
Common stock
    2       2  
Additional paid-in capital
    130,355       129,696  
Retained earnings
    89,768       54,692  
     
Total stockholders’ equity
    220,125       184,390  
     
Total liabilities and stockholders’ equity
  $ 340,896     $ 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 three months ended  
    3/31/11     3/31/10  
Cash flows from operating activities:
               
Net income
  $ 40,651     $ 8,885  
Adjustments to reconcile net income to net cash provided
               
by operating activities:
               
Depreciation, amortization and accretion
    4,540       7,304  
Amortization of deferred financing costs
    45        
Deferred income tax expense
    (27,929 )     5,777  
Amortization of stock based compensation
    225       263  
Provisions for doubtful accounts, service credits and other
    700       1,225  
Settlement of non-cash transaction taxes
    (119 )     (350 )
(Loss)/Gain on disposals of property and equipment
    (13 )     59  
Changes in assets and liabilities:
               
Accounts receivable
    (49 )     472  
Prepaid expenses, intangibles and other assets
    (154 )     (31 )
Accounts payable and accrued liabilities
    (5,047 )     (5,273 )
Customer deposits
    (797 )     (51 )
Deferred revenue
    636       (387 )
     
Net cash provided by operating activities
    12,689       17,893  
     
 
               
Cash flows from investing activities:
               
Purchases of property and equipment
    (1,494 )     (1,725 )
Proceeds from disposals of property and equipment
    11       38  
Acquisitions, net of cash acquired
    (134,217 )      
     
Net cash used in investing activities
    (135,700 )     (1,687 )
     
 
               
Cash flows from financing activities:
               
Issuance of debt
    24,044        
Deferred financing costs
    (1,339 )      
Cash dividends to stockholders
    (5,531 )     (5,619 )
Purchase of common stock
          (4,623 )
     
Net cash provided (used) in financing activities
    17,174       (10,242 )
     
 
               
Net (decrease) increase in cash and cash equivalents
    (105,837 )     5,964  
Cash and cash equivalents, beginning of period
    129,220       109,591  
     
Cash and cash equivalents, end of period
  $ 23,383     $ 115,555  
     
 
               
Supplemental disclosure:
               
Interest paid
  $ 263     $ 1  
     
Income taxes paid (state and local)
  $     $  
     
 
(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  
    3/31/11     12/31/10     9/30/10     6/30/10     3/31/10  
Revenues:
                                       
Paging service
  $ 48,628     $ 50,319     $ 52,778     $ 54,875     $ 57,832  
Cellular
    684       499       532       624       708  
Product sales
    2,344       2,784       2,805       2,732       3,358  
Other
    880       1,046       595       881       886  
     
Total revenues
    52,536       54,648       56,710       59,112       62,784  
     
 
                                       
Operating expenses:
                                       
Cost of products sold
    663       1,051       819       1,134       1,209  
Service, rental and maintenance
    15,816       16,221       16,821       17,175       18,941  
Selling and marketing
    3,833       3,915       4,060       4,394       4,557  
General and administrative
    15,240       14,829       12,907       15,924       15,812  
Severance and restructuring
    33       1,738       86       41       314  
Depreciation, amortization and accretion
    4,032       4,226       5,899       6,698       7,304  
     
Total operating expenses
    39,617       41,980       40,592       45,366       48,137  
     
% of total revenues
    75.4 %     76.8 %     71.6 %     76.7 %     76.7 %
 
                                       
     
Operating income
    12,919       12,668       16,118       13,746       14,647  
     
% of total revenues
    24.6 %     23.2 %     28.4 %     23.3 %     23.3 %
 
                                       
Interest (expense) income, net
    (247 )     3       6       4       3  
Other income, net
    205       227       2,320       180       78  
     
Income before income tax (benefit) expense
    12,877       12,898       18,444       13,930       14,728  
Income tax (benefit) expense
    (27,583 )     (27,642 )     3,060       841       5,843  
     
Net income
  $ 40,460     $ 40,540     $ 15,384     $ 13,089     $ 8,885  
     
 
                                       
Basic net income per common share
  $ 1.84     $ 1.84     $ 0.70     $ 0.59     $ 0.39  
     
Diluted net income per common share
  $ 1.82     $ 1.82     $ 0.69     $ 0.58     $ 0.39  
     
 
                                       
Basic weighted average common shares outstanding
    22,063,393       22,050,512       22,060,636       22,307,488       22,654,240  
     
Diluted weighted average common shares outstanding
    22,333,399       22,323,551       22,372,786       22,620,707       22,967,192  
     
 
                                       
Reconciliation of operating income to EBITDA (b):
                                       
Operating income
  $ 12,919     $ 12,668     $ 16,118     $ 13,746     $ 14,647  
Add back: depreciation, amortization and accretion
    4,032       4,226       5,899       6,698       7,304  
     
EBITDA
  $ 16,951     $ 16,894     $ 22,017     $ 20,444     $ 21,951  
     
% of total revenues
    32.3 %     30.9 %     38.8 %     34.6 %     35.0 %
 
(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. (WIRELESS)
UNITS IN SERVICE ACTIVITY (a)

(Unaudited and in thousands)
                                         
    For the three months ended  
Units in service   3/31/11     12/31/10     9/30/10     6/30/10     3/31/10  
Beginning units in service
                                       
Direct one-way
    1,645       1,692       1,749       1,804       1,881  
Direct two-way
    106       109       121       126       133  
     
Total direct
    1,751       1,801       1,870       1,930       2,014  
     
Indirect one-way
    68       75       82       90       101  
Indirect two-way
    70       74       75       79       67  
     
Total indirect
    138       149       157       169       168  
     
Total beginning units in service
    1,889       1,950       2,027       2,099       2,182  
     
 
                                       
Gross placements
                                       
Direct one-way
    46       45       58       62       53  
Direct two-way
    4       6       4       6       5  
     
Total direct
    50       51       62       68       58  
     
Indirect one-way
    2       2       3       3       3  
Indirect two-way
    0       1       1       1       15  
     
Total indirect
    2       3       4       4       18  
     
Total gross placements
    52       54       66       72       76  
     
 
                                       
Gross disconnects
                                       
Direct one-way
    (94 )     (92 )     (115 )     (117 )     (130 )
Direct two-way
    (8 )     (9 )     (16 )     (11 )     (12 )
     
Total direct
    (102 )     (101 )     (131 )     (128 )     (142 )
     
Indirect one-way
    8       (9 )     (10 )     (11 )     (14 )
Indirect two-way
    (19 )     (5 )     (2 )     (5 )     (3 )
     
Total indirect
    (11 )     (14 )     (12 )     (16 )     (17 )
     
Total gross disconnects
    (113 )     (115 )     (143 )     (144 )     (159 )
     
 
                                       
Net gain / (loss)
                                       
Direct one-way
    (48 )     (47 )     (57 )     (55 )     (77 )
Direct two-way
    (4 )     (3 )     (12 )     (5 )     (7 )
     
Total direct
    (52 )     (50 )     (69 )     (60 )     (84 )
     
Indirect one-way
    10       (7 )     (7 )     (8 )     (11 )
Indirect two-way
    (19 )     (4 )     (1 )     (4 )     12  
     
Total indirect
    (9 )     (11 )     (8 )     (12 )     1  
     
Total net change
    (61 )     (61 )     (77 )     (72 )     (83 )
     
 
                                       
Ending units in service
                                       
Direct one-way
    1,597       1,645       1,692       1,749       1,804  
Direct two-way
    102       106       109       121       126  
     
Total direct
    1,699       1,751       1,801       1,870       1,930  
     
Indirect one-way
    78       68       75       82       90  
Indirect two-way
    51       70       74       75       79  
     
Total indirect
    129       138       149       157       169  
     
Total ending units in service
    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  
    3/31/11     12/31/10     9/30/10     6/30/10     3/31/10  
ARPU
                                       
Direct one-way
  $ 8.05     $ 8.05     $ 8.07     $ 8.05     $ 8.16  
Direct two-way
    22.23       22.57       23.11       23.55       23.61  
     
Total direct
    8.89       8.92       9.01       9.06       9.17  
Total
    1,699       1,751       1,801       1,870       1,930  
     
 
                                       
End of period units in service % of total direct
                                       
1 to 3 units
    4.7 %     4.8 %     4.9 %     5.1 %     5.2 %
4 to 10 units
    2.8 %     2.9 %     3.0 %     3.1 %     3.2 %
11 to 50 units
    6.7 %     7.0 %     7.2 %     7.5 %     7.7 %
51 to 100 units
    4.2 %     4.4 %     4.4 %     4.6 %     4.8 %
101 to 1,000 units
    25.0 %     24.9 %     25.3 %     25.8 %     25.9 %
>1,000 units
    56.6 %     56.0 %     55.2 %     53.9 %     53.2 %
     
Total
    100.0 %     100.0 %     100.0 %     100.0 %     100.0 %
     
 
                                       
Account size net loss rate
                                       
1 to 3 units
    -6.2 %     -4.8 %     -7.0 %     -5.8 %     -7.6 %
4 to 10 units
    -6.2 %     -5.0 %     -7.5 %     -6.0 %     -5.3 %
11 to 50 units
    -7.7 %     -5.1 %     -7.3 %     -6.1 %     -5.8 %
51 to 100 units
    -5.7 %     -4.2 %     -7.9 %     -6.5 %     -4.4 %
101 to 1,000 units
    -2.7 %     -4.2 %     -5.6 %     -3.3 %     -3.7 %
>1,000 units
    -1.8 %     -1.5 %     -1.3 %     -1.9 %     -3.7 %
     
Total
    -3.0 %     -2.8 %     -3.6 %     -3.1 %     -4.2 %
     
 
                                       
Account size ARPU
                                       
1 to 3 units
  $ 15.57     $ 15.57     $ 15.48     $ 15.37     $ 15.28  
4 to 10 units
    14.53       14.56       14.51       14.35       14.37  
11 to 50 units
    12.19       12.26       12.18       12.01       11.86  
51 to 100 units
    10.59       10.72       10.69       10.76       10.67  
101 to 1,000 units
    9.00       9.00       8.82       8.93       9.00  
>1,000 units
    7.47       7.43       7.64       7.63       7.80  
     
Total
  $ 8.89     $ 8.92     $ 9.01     $ 9.06     $ 9.17  
     
 
                                       
Cellular revenue
                                       
Number of activations
    2,191       1,990       1,885       1,885       2,354  
     
Revenue from cellular services (000’s)
  $ 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  
    3/31/11     12/31/10     9/30/10     6/30/10     3/31/10  
Cost of products sold
  $ 663     $ 1,051     $ 819     $ 1,134     $ 1,209  
     
 
                                       
Service, rental and maintenance
                                       
Site rent
    6,881       7,629       8,042       8,283       9,079  
Telecommunications
    3,099       3,066       3,341       3,467       3,831  
Payroll and related
    4,293       4,319       4,199       4,444       4,586  
Stock based compensation
    5       6       5       7       6  
Other
    1,538       1,201       1,234       974       1,439  
     
Total service, rental and maintenance
    15,816       16,221       16,821       17,175       18,941  
     
 
                                       
Selling and marketing
                                       
Payroll and related
    2,494       2,627       2,659       2,814       2,964  
Commissions
    1,002       1,007       1,163       1,367       1,164  
Stock based compensation
    17       17       17       22       17  
Other
    320       264       221       191       412  
     
Total selling and marketing
    3,833       3,915       4,060       4,394       4,557  
     
 
                                       
General and administrative
                                       
Payroll and related
    5,677       6,118       5,719       6,621       6,912  
Stock based compensation
    203       223       15       242       240  
Bad debt
    393       547       571       594       713  
Facility rent
    726       856       992       1,326       1,354  
Telecommunications
    443       480       518       603       657  
Outside services
    5,186       2,385       2,463       3,185       3,267  
Taxes, licenses and permits
    1,332       1,097       1,276       1,836       1,591  
Other
    1,280       3,123       1,353       1,517       1,078  
     
Total general and administrative
    15,240       14,829       12,907       15,924       15,812  
     
 
                                       
Severance and restructuring
    33       1,738       86       41       314  
Depreciation, amortization and accretion
    4,032       4,226       5,899       6,698       7,304  
 
                                       
     
Operating expenses
  $ 39,617     $ 41,980     $ 40,592     $ 45,366     $ 48,137  
     
 
                                       
Capital expenditures
  $ 1,494     $ 4,720     $ 1,730     $ 563     $ 1,725  
 
(a)   Slight variations in totals are due to rounding.