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Exhibit 99.1
(USAMOBILITY LOGO)
News Release
         
For Immediate Release
  Contact:   Bob Lougee (800) 611-8488
Wednesday, July 27, 2011
      bob.lougee@usamobility.com
USA Mobility Reports Second Quarter Operating Results;
Board Declares Regular Quarterly Dividend
Wireless Subscriber and Revenue Trends Show Marked Improvement;
Software Business Records Solid Performance;
Debt Balance Reduced
Springfield, VA (July 27, 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 second quarter ended June 30, 2011. In addition, the Company’s Board of Directors declared a regular quarterly dividend of $0.25 per share, payable on September 9, 2011 to stockholders of record on August 19, 2011.
Total revenue for the second quarter was $65.2 million, including $52.1 million from the Company’s Wireless business (USA Mobility Wireless) and $13.1 million from its Software business (Amcom Software). Software maintenance revenue was reduced by $2.6 million for purchase accounting adjustments. Wireless revenue was $52.1 million compared to $52.5 million in the first quarter and $59.1 million in the second quarter of 2010. Software revenue was $13.1 million compared to $4.8 million in the first quarter, which included results for only the 29-day period from March 3, 2011 to March 31, 2011 and purchase accounting adjustments of $0.9 million.
Second quarter EBITDA (earnings before interest, taxes, depreciation, amortization and accretion) totaled $21.4 million, including $20.4 million from Wireless and $1.0 million from Software. EBITDA from Wireless was $20.4 million compared to $17.0 million in the prior quarter and $20.4 million in the year-earlier quarter. EBITDA from Software was $1.0 million compared to $0.9 million in the first quarter, which reflected results for only the 29-day period ended March 31, 2011. Excluding the purchase accounting adjustments, second quarter EBITDA would have been $24.1 million or 35.5 percent of revenue.
Net income for the second quarter was $18.6 million, or $0.82 per fully diluted share, compared to $13.1 million, or $0.58 per fully diluted share, in the year-earlier quarter. Excluding the purchase accounting adjustments, net income for the second quarter would have been $20.6 million or $0.91 per fully diluted share.

 


 

Second quarter results included:
Wireless
    Net unit losses were 49,000 in the second quarter, compared to 61,000 in the first quarter and 72,000 in the second quarter of 2010, while the quarterly rate of unit erosion improved to 2.7 percent from 3.5 percent in the year-earlier quarter. The annual rate of subscriber erosion was 12.2 percent in the second quarter, compared to 17.2 percent in the year-ago quarter, and was the lowest annual unit loss rate in more than six years. Units in service at June 30, 2011 totaled 1,779,000, compared to 2,027,000 a year earlier.
 
    The quarterly rate of revenue erosion improved significantly to 0.8 percent in the second quarter from 3.9 percent in the first quarter and 5.8 percent in the year-earlier quarter, and was the lowest quarterly rate of revenue decline since the Company’s formation in 2004. The annual rate of revenue erosion improved to 11.9 percent from 16.3 percent in the first quarter and 21.3 percent in the year-earlier quarter, also reaching its lowest level in many years.
 
    Total ARPU (average revenue per unit) was $8.74 in the second quarter, compared to $8.72 in the first quarter and $8.87 in the second quarter of 2010.
Software
    Bookings for the quarter ended June 30, 2011 were $15.2 million, while the backlog was $20.5 million at June 30th.
 
    Of the $13.1 million in Software revenue, $3.2 million was maintenance revenue and $9.9 million was operations revenue (which includes software, professional services and equipment sales). Software revenue, excluding the purchase accounting adjustments of $2.6 million, was $15.7 million for the second quarter, an Amcom company record.
 
    The renewal rate for maintenance in the second quarter was 99.9 percent.
Total Company
    Operating expenses (excluding depreciation, amortization and accretion) totaled $43.7 million in the second quarter, with $31.7 million for Wireless and $12.0 million for Software, compared to operating expenses of $39.5 million in the first quarter, with $35.6 million for Wireless (which included $2.9 million in acquisition related expenses) and $3.9 million for Software for the 29-day period ended March 31.
 
    EBITDA margin (or EBITDA as a percentage of revenue) was 32.9 percent, compared to 31.2 percent in the first quarter. EBITDA margin for Wireless was 39.2 percent, compared to 32.3 percent in the first quarter and 34.6 percent in the year-earlier quarter.

 


 

    Capital expenses were $1.9 million, compared to $0.6 million in the second quarter of 2010.
 
    Stockholders’ dividends paid were $5.5 million in the second quarter.
 
    The Company’s cash balance at June 30, 2011 was $29.5 million.
 
    The Company retired $14.1 million of bank debt during the second quarter. The outstanding debt balance at June 30, 2011 was $37.8 million at an interest rate of 5.25 percent.
Vincent D. Kelly, president and chief executive officer, said: “We are pleased to report outstanding operating results for the second quarter. Consistent with financial guidance we provided earlier this year, results either met or exceeded key performance targets for both our Wireless and Software businesses. We were especially encouraged to see significant improvement in the pace of paging subscriber and revenue erosion, as rates of decline reached their best level in many years. Our recently acquired Software subsidiary, Amcom Software, also recorded a strong performance with solid bookings and a growing backlog. At the same time, we continued to maintain strong operating margins, reduce expenses in our Wireless business, pay down debt incurred with the Amcom acquisition, and generate sufficient cash flow to again return capital to stockholders in the form of dividend distributions.”
Kelly said the Company continued to focus Wireless sales and marketing efforts during the quarter around its core market segments of Healthcare, Government and Large Enterprise. “These core segments represented 89.5 percent of our direct subscriber base and 84.3 percent of our direct paging revenue at the end of the second quarter. Healthcare, which now represents 65.5 percent of our direct customer base, continued to be our best performing market segment with the highest rate of gross placements and lowest rate of net unit loss. The net loss rate among Healthcare accounts improved to 0.5 percent in the second quarter, its lowest level in years, as healthcare providers continue to benefit from the reliability of paging for their most critical messaging needs.”
With respect to the Software business, Christopher Heim, president of Amcom Software, noted: “Amcom continues to outperform expectations. During the quarter our Software sales team continued to sell solutions primarily to the hospital market where there is growing demand for call center management, critical smartphone messaging, and clinical middleware. As a result, we ended the quarter with a solid backlog and pipeline of new business opportunities. In addition, we ramped up training programs for both Software and Wireless sales teams during the quarter with the goal of sharing account leads and generating cross selling opportunities for each line of business. Looking ahead, we expect to further integrate the operational capabilities of each business to enhance organizational efficiencies and generate additional business prospects.”
Shawn E. Endsley, chief financial officer, said the Company continued to reduce operating expenses in its Wireless business during the second quarter. “Recurring operating expenses (excluding depreciation, amortization and accretion) for Wireless decreased 18.0 percent from the year-earlier quarter,” Endsley noted, “exceeding the 11.9 percent rate of Wireless revenue decline.” As a result, he added, the Company continued to generate strong cash

 


 

flow during the quarter. “Including software operations for the full quarter, the combined businesses generated net cash from operating activities of $20.1 million, compared to $12.7 million in the first quarter.”
Regarding financial guidance for 2011, Endsley said the Company revised and improved its prior guidance for the full year based primarily on the strong performance of its Wireless business. In schedules attached to this press release, the full-year adjusted guidance reflects Software’s results for the partial year (March 3 to December 31) as well as the required purchase accounting adjustments for deferred revenue. As such, Endsley said the Company expects total revenues for 2011 to range from $235 million to $248 million (versus earlier guidance of $224 million to $240 million), with Wireless between $193 million and $200 million (up from $182 million and $192 million) and Software between $42 million and $48 million; operating expenses (excluding depreciation, amortization and accretion) to range from $162 million to $174 million (versus earlier guidance of $167 million to $176 million), with Wireless between $127 million and $134 million (versus $132 million and $136 million) and Software between $35 million and $40 million; and capital expenses to range from $6.5 million to $9 million (versus prior guidance of $6 million to $9 million), with Wireless between $6 million and $8 million (versus $5 million and $7 million) and Software between $0.5 million and $1 million (versus $1 million and $2 million).
* * * * * * * * *
USA Mobility plans to host a conference call for investors on its second quarter operating results at 10:00 a.m. Eastern Time on Thursday, July 28, 2011. Dial-in numbers for the call are 719-325-4779 or 877-545-1407. The pass code for the call is 5986417. A replay of the call will be available from 1:00 p.m. ET on July 28 until 11:59 p.m. on Thursday, August 11. Replay numbers are 719-457-0820 or 888-203-1112. The pass code for the replay is 5986417.
* * * * * * * * *
About USA Mobility
USA Mobility, Inc., headquartered in Springfield, Virginia, is a comprehensive provider of reliable and affordable wireless communications solutions to the healthcare, government, large enterprise and emergency response sectors. In addition, through its Amcom Software subsidiary, it provides mission critical unified communications solutions for hospitals, contact centers, emergency management, mobile event notification and messaging. As a single-source provider, USA 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. 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     $ 193.0     $ 200.0  
Software
    57.0       63.0   (c)   42.0       48.0  
 
                       
Combined
  $ 239.0     $ 255.0     $ 235.0     $ 248.0  
 
                       
 
                               
Operating Expenses (d)
                               
Wireless
  $ 136.0     $ 132.0     $ 134.0     $ 127.0  
Software
    47.0       43.0       40.0       35.0  
 
                       
Combined
  $ 183.0     $ 175.0     $ 174.0     $ 162.0  
 
                       
 
                               
Capital Expenses
                               
Wireless
  $ 7.0     $ 5.0     $ 8.0     $ 6.0  
Software
    2.0       1.0       1.0       0.5  
 
                       
Combined
  $ 9.0     $ 6.0     $ 9.0     $ 6.5  
 
                       
 
(a)   The full year guidance assumes that the Amcom Software, Inc. (“Software”) acquisition had occurred as of January 1, 2011.
 
(b)   The adjusted guidance for 2011 reflects Software’s results from March 3, 2011, the date of acquisition, and reflects the fair value adjustment to maintenance revenues as required by generally accepted accounting principles.
 
(c)   The full year guidance for Software revenues does NOT reflect any fair value adjustment to maintenance revenue as a result of purchase accounting.
 
(d)   Operating expenses exclude depreciation, amortization and accretion.

 


 

USA MOBILITY, INC.
CONDENSED CONSOLIDATED RESULTS OF OPERATIONS (a), (b)

(In thousands, except share and per share amounts)
                                                 
    For the three months ended 6/30/2011   For the six months ended 6/30/2011
    Wireless     Software     Total     Wireless     Software     Total  
         
Revenue:
                                               
Paging service
  $ 47,319     $     $ 47,319     $ 95,947     $     $ 95,947  
Cellular
    1,199             1,199       1,883             1,883  
Product sales (d)
    2,805       13,080       15,885       5,149       17,878       23,027  
Other
    768             768       1,648             1,648  
         
Total revenue
    52,091       13,080       65,171       104,627       17,878       122,505  
         
 
                                               
Operating expenses:
                                               
Cost of products sold (d)
    1,171       5,906       7,077       1,834       7,668       9,502  
Service, rental and maintenance
    14,211       1,976       16,187       30,027       2,622       32,649  
Selling and marketing
    3,946       2,643       6,589       7,779       3,731       11,510  
General and administrative
    12,351       1,515       13,866       27,591       1,903       29,494  
Severance and restructuring
    17             17       50             50  
Depreciation, amortization and accretion
    3,618       1,680       5,298       7,650       2,188       9,838  
         
Total operating expenses
    35,314       13,720       49,034       74,931       18,112       93,043  
         
% of total revenue
    67.8 %     104.9 %     75.2 %     71.6 %     101.3 %     76.0 %
 
                                               
         
Operating income (loss)
    16,777       (640 )     16,137       29,696       (234 )     29,462  
         
% of total revenue
    32.2 %     -4.9 %     24.8 %     28.4 %     -1.3 %     24.0 %
 
                                               
Interest expense, net
    (862 )           (862 )     (1,109 )     (9 )     (1,118 )
Other income, net
    7,692             7,692       7,897             7,897  
         
Income (loss) before income tax expense (benefit)
    23,607       (640 )     22,967       36,484       (243 )     36,241  
Income tax expense (benefit)
    4,668       (296 )     4,372       (22,915 )     (90 )     (23,005 )
         
Net income (loss)
  $ 18,939     $ (344 )   $ 18,595     $ 59,399     $ (153 )   $ 59,246  
         
 
                                               
Basic net income per common share
                  $ 0.84                     $ 2.68  
 
                                           
Diluted net income per common share
                  $ 0.82                     $ 2.64  
 
                                           
 
                                               
Basic weighted average common shares outstanding
                    22,086,848                       22,075,185  
 
                                           
Diluted weighted average common shares outstanding
                    22,551,862                       22,443,417  
 
                                           
 
                                               
Reconciliation of operating income (loss) to EBITDA (c):
                                               
Operating income (loss)
  $ 16,777     $ (640 )   $ 16,137     $ 29,696     $ (234 )   $ 29,462  
Add back: depreciation, amortization and accretion
    3,618       1,680       5,298       7,650       2,188       9,838  
         
EBITDA
  $ 20,395     $ 1,040     $ 21,435     $ 37,346     $ 1,954     $ 39,300  
         
% of total revenue
    39.2 %     8.0 %     32.9 %     35.7 %     10.9 %     32.1 %
 
(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.
 
(d)   Wireless results were reduced by $343,000 for intercompany revenue and cost of products sold.

 


 

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

(In thousands)
                 
    6/30/11     12/31/10  
    (Unaudited)          
Assets
               
Current assets:
               
Cash and cash equivalents
  $ 29,470     $ 129,220  
Accounts receivable, net
    22,894       13,419  
Prepaid expenses and other
    3,800       2,638  
Inventory
    2,845       160  
Tax receivables
    6,420       5,004  
Escrow receivables
    7,319        
Deferred income tax assets, net
    9,043       3,915  
     
Total current assets
    81,791       154,356  
Tax receivables
    191       191  
Property and equipment, net
    24,632       27,135  
Goodwill
    130,921        
Other intangible assets, net
    41,848       511  
Deferred income tax assets, net
    49,469       47,390  
Escrow receivables
    7,500        
Deferred financing costs, net
    1,135        
Other assets
    1,186       1,075  
     
Total assets
  $ 338,673     $ 230,658  
     
 
               
Liabilities and stockholders’ equity
               
Current liabilities:
               
Current portion of long-term debt
  $ 11,875     $  
Consideration payable
    7,319        
Accounts payable and accrued liabilities
    14,166       14,794  
Accrued compensation and benefits
    10,305       12,701  
Customer deposits
    3,769       718  
Deferred revenue
    12,129       6,268  
     
Total current liabilities
    59,563       34,481  
Long-term debt, net of current portion
    25,947        
Consideration payable
    7,500        
Deferred revenue
    287        
Other long-term liabilities
    11,807       11,787  
     
Total liabilities
    105,104       46,268  
     
Commitments and contingencies Stockholders’ equity:
               
Preferred stock
           
Common stock
    2       2  
Additional paid-in capital
    130,846       129,696  
Retained earnings
    102,721       54,692  
     
Total stockholders’ equity
    233,569       184,390  
     
Total liabilities and stockholders’ equity
  $ 338,673     $ 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 six months ended  
    6/30/11     6/30/10  
Cash flows from operating activities:
               
Net income
  $ 59,246     $ 21,974  
Adjustments to reconcile net income to net cash provided by operating activities:
               
Depreciation, amortization and accretion
    9,838       14,002  
Amortization of deferred financing costs
    273        
Deferred income tax (benefit) expense
    (23,371 )     6,577  
Amortization of stock based compensation
    679       534  
Provisions for doubtful accounts, service credits and other
    490       2,400  
Settlement of non-cash transaction taxes
    308       (667 )
(Gain)/Loss on disposals of property and equipment
    (37 )     22  
(Gain)/Loss on disposals of narrow band PCS licenses
    (7,500 )      
Changes in assets and liabilities:
               
Accounts receivable
    (1,600 )     1,996  
Prepaid expenses, intangibles and other assets
    1,669       (17 )
Accounts payable and accrued liabilities
    (8,936 )     (6,188 )
Customer deposits and deferred revenue
    1,777       (833 )
     
Net cash provided by operating activities
    32,836       39,800  
     
 
               
Cash flows from investing activities:
               
Purchases of property and equipment
    (3,355 )     (2,288 )
Proceeds from disposals of property and equipment
    35       58  
Proceeds from disposals of narrow band PCS licenses
    7,500        
Acquisitions, net of cash acquired
    (134,217 )      
     
Net cash used in investing activities
    (130,037 )     (2,230 )
     
 
               
Cash flows from financing activities:
               
Issuance of debt
    24,044        
Repayment of debt
    (14,125 )      
Deferred financing costs
    (1,408 )      
Cash dividends to stockholders
    (11,060 )     (11,151 )
Purchase of common stock
          (6,887 )
     
Net cash used in financing activities
    (2,549 )     (18,038 )
     
 
               
Net (decrease) increase in cash and cash equivalents
    (99,750 )     19,532  
Cash and cash equivalents, beginning of period
    129,220       109,591  
     
Cash and cash equivalents, end of period
  $ 29,470     $ 129,123  
     
 
               
Supplemental disclosure:
               
Interest paid
  $ 685     $  
     
Income taxes paid
  $ 817     $ 362  
     
Non-cash financing activities
  $ 27,750     $  
     
 
(a)   Slight variations in totals are due to rounding.

 


 

USA MOBILITY, INC. (WIRELESS)
CONDENSED CONSOLIDATED RESULTS OF OPERATIONS (a)

(Unaudited and in thousands, except share and per share amounts)
                                                 
    For the three months ended  
    6/30/11     3/31/11     12/31/10     9/30/10     6/30/10     3/31/10  
Revenues:
                                               
Paging service
  $ 47,319     $ 48,628     $ 50,319     $ 52,778     $ 54,875     $ 57,832  
Cellular
    1,199       684       499       532       624       708  
Product sales (b)
    2,805       2,344       2,784       2,805       2,732       3,358  
Other
    768       880       1,046       595       881       886  
     
Total revenues
    52,091       52,536       54,648       56,710       59,112       62,784  
     
 
                                               
Operating expenses:
                                               
Cost of products sold (b)
    1,171       663       1,051       819       1,134       1,209  
Service, rental and maintenance
    14,211       15,816       16,221       16,821       17,175       18,941  
Selling and marketing
    3,946       3,833       3,915       4,060       4,394       4,557  
General and administrative
    12,351       15,240       14,829       12,907       15,924       15,812  
Severance and restructuring
    17       33       1,738       86       41       314  
Depreciation, amortization and accretion
    3,618       4,032       4,226       5,899       6,698       7,304  
     
Total operating expenses
    35,314       39,617       41,980       40,592       45,366       48,137  
     
% of total revenues
    67.8 %     75.4 %     76.8 %     71.6 %     76.7 %     76.7 %
 
                                               
     
Operating income
    16,777       12,919       12,668       16,118       13,746       14,647  
     
% of total revenues
    32.2 %     24.6 %     23.2 %     28.4 %     23.3 %     23.3 %
 
                                               
Interest (expense) income, net
    (862 )     (247 )     3       6       4       3  
Other income, net
    7,692       205       227       2,320       180       78  
     
Income before income tax expense (benefit)
    23,607       12,877       12,898       18,444       13,930       14,728  
Income tax expense (benefit)
    4,668       (27,583 )     (27,642 )     3,060       841       5,843  
     
Net income
  $ 18,939     $ 40,460     $ 40,540     $ 15,384     $ 13,089     $ 8,885  
     
 
                                               
Basic net income per common share
  $ 0.86     $ 1.84     $ 1.84     $ 0.70     $ 0.59     $ 0.39  
     
Diluted net income per common share
  $ 0.84     $ 1.82     $ 1.82     $ 0.69     $ 0.58     $ 0.39  
     
 
                                               
Basic weighted average common shares outstanding
    22,086,848       22,063,393       22,050,512       22,060,636       22,307,488       22,654,240  
     
Diluted weighted average common shares outstanding
    22,551,862       22,333,399       22,323,551       22,372,786       22,620,707       22,967,192  
     
 
                                               
Reconciliation of operating income to EBITDA (c):
                                               
Operating income
  $ 16,777     $ 12,919     $ 12,668     $ 16,118     $ 13,746     $ 14,647  
Add back: depreciation, amortization and accretion
    3,618       4,032       4,226       5,899       6,698       7,304  
     
EBITDA
  $ 20,395     $ 16,951     $ 16,894     $ 22,017     $ 20,444     $ 21,951  
     
% of total revenues
    39.2 %     32.3 %     30.9 %     38.8 %     34.6 %     35.0 %
 
(a)   Slight variations in totals are due to rounding.
 
(b)   Wireless results were reduced by $343,000 for intercompany revenue and cost of products sold.
 
(c)   EBITDA or earnings before interest, taxes, depreciation, amortization and accretion is a non-GAAP measure and is presented for analytical purposes only.

 


 

USA MOBILITY, INC. (WIRELESS)
UNITS IN SERVICE ACTIVITY (a)

(Unaudited and in thousands)
                                                 
    For the three months ended  
    6/30/11     3/31/11     12/31/10     9/30/10     6/30/10     3/31/10  
Units in service
                                               
 
                                               
Beginning units in service
                                               
Direct one-way
    1,597       1,645       1,692       1,749       1,804       1,881  
Direct two-way
    102       106       109       121       126       133  
     
Total direct
    1,699       1,751       1,801       1,870       1,930       2,014  
     
Indirect one-way
    78       68       75       82       90       101  
Indirect two-way
    51       70       74       75       79       67  
     
Total indirect
    129       138       149       157       169       168  
     
Total beginning units in service
    1,828       1,889       1,950       2,027       2,099       2,182  
     
 
                                               
Gross placements
                                               
Direct one-way
    55       46       45       58       62       53  
Direct two-way
    6       4       6       4       6       5  
     
Total direct
    61       50       51       62       68       58  
     
Indirect one-way
    2       2       2       3       3       3  
Indirect two-way
    1       0       1       1       1       15  
     
Total indirect
    3       2       3       4       4       18  
     
Total gross placements
    64       52       54       66       72       76  
     
 
                                               
Gross disconnects
                                               
Direct one-way
    (96 )     (94 )     (92 )     (115 )     (117 )     (130 )
Direct two-way
    (9 )     (8 )     (9 )     (16 )     (11 )     (12 )
     
Total direct
    (105 )     (102 )     (101 )     (131 )     (128 )     (142 )
     
Indirect one-way
    (6 )     8       (9 )     (10 )     (11 )     (14 )
Indirect two-way
    (2 )     (19 )     (5 )     (2 )     (5 )     (3 )
     
Total indirect
    (8 )     (11 )     (14 )     (12 )     (16 )     (17 )
     
Total gross disconnects
    (113 )     (113 )     (115 )     (143 )     (144 )     (159 )
     
 
                                               
Net gain / (loss)
                                               
Direct one-way
    (41 )     (48 )     (47 )     (57 )     (55 )     (77 )
Direct two-way
    (3 )     (4 )     (3 )     (12 )     (5 )     (7 )
     
Total direct
    (44 )     (52 )     (50 )     (69 )     (60 )     (84 )
     
Indirect one-way
    (4 )     10       (7 )     (7 )     (8 )     (11 )
Indirect two-way
    (1 )     (19 )     (4 )     (1 )     (4 )     12  
     
Total indirect
    (5 )     (9 )     (11 )     (8 )     (12 )     1  
     
Total net change
    (49 )     (61 )     (61 )     (77 )     (72 )     (83 )
     
 
                                               
Ending units in service
                                               
Direct one-way
    1,556       1,597       1,645       1,692       1,749       1,804  
Direct two-way
    99       102       106       109       121       126  
     
Total direct
    1,655       1,699       1,751       1,801       1,870       1,930  
     
Indirect one-way
    74       78       68       75       82       90  
Indirect two-way
    50       51       70       74       75       79  
     
Total indirect
    124       129       138       149       157       169  
     
Total ending units in service
    1,779       1,828       1,889       1,950       2,027       2,099  
     
 
(a)   Slight variations in totals are due to rounding.

 


 

USA MOBILITY, INC. (WIRELESS)
AVERAGE REVENUE PER UNIT (ARPU) AND CHURN (a)

(Unaudited)
                                                 
    For the three months ended  
    6/30/11     3/31/11     12/31/10     9/30/10     6/30/10     3/31/10  
ARPU
                                               
Direct one-way
  $ 8.10     $ 8.05     $ 8.05     $ 8.07     $ 8.05     $ 8.16  
Direct two-way
    22.05       22.23       22.57       23.11       23.55       23.61  
     
Total direct
    8.92       8.89       8.92       9.01       9.06       9.17  
 
                                               
Indirect one-way
    7.57       8.44       9.13       9.60       8.87       8.78  
Indirect two-way
    4.77       4.31       3.98       4.09       4.25       4.84  
     
Total indirect
    6.40       6.49       6.48       6.86       6.65       7.04  
 
                                               
Total one-way
    8.08       8.07       8.09       8.14       8.09       8.19  
Total two-way
    16.04       15.41       14.96       15.54       16.06       16.76  
     
Total paging ARPU
  $ 8.74     $ 8.72     $ 8.74     $ 8.85     $ 8.87     $ 9.00  
     
 
                                               
Gross disconnect rate (b)
                                               
Direct one-way
    -6.0 %     -5.7 %     -5.5 %     -6.6 %     -6.5 %     -6.9 %
Direct two-way
    -9.3 %     -7.5 %     -8.5 %     -13.0 %     -8.5 %     -9.1 %
     
Total direct
    -6.2 %     -5.8 %     -5.7 %     -7.0 %     -6.6 %     -7.1 %
 
                                               
Indirect one-way
    -8.1 %     11.9 %     -12.1 %     -12.5 %     -12.8 %     -13.7 %
Indirect two-way
    -4.5 %     -26.4 %     -5.8 %     -2.6 %     -6.8 %     -4.9 %
     
Total indirect
    -6.6 %     -8.1 %     -8.9 %     -7.7 %     -9.9 %     -10.1 %
 
                                               
Total one-way
    -6.1 %     -5.0 %     -5.7 %     -6.8 %     -6.8 %     -7.3 %
Total two-way
    -7.6 %     -15.2 %     -7.4 %     -9.0 %     -7.9 %     -7.7 %
     
Total paging gross disconnect rate
    -6.2 %     -6.0 %     -5.9 %     -7.0 %     -6.9 %     -7.3 %
     
 
                                               
Net gain / loss rate (c)
                                               
Direct one-way
    -2.5 %     -2.9 %     -2.7 %     -3.2 %     -3.1 %     -4.1 %
Direct two-way
    -3.1 %     -3.6 %     -4.6 %     -9.5 %     -4.2 %     -5.0 %
     
Total direct
    -2.6 %     -3.0 %     -2.8 %     -3.6 %     -3.1 %     -4.2 %
 
                                               
Indirect one-way
    -5.3 %     14.6 %     -9.8 %     -9.2 %     -9.8 %     -10.5 %
Indirect two-way
    -3.0 %     -25.8 %     -4.6 %     -0.9 %     -4.7 %     17.1 %
     
Total indirect
    -4.3 %     -6.6 %     -7.2 %     -5.1 %     -7.4 %     0.7 %
 
                                               
Total one-way
    -2.6 %     -2.2 %     -3.0 %     -3.5 %     -3.4 %     -4.4 %
Total two-way
    -3.1 %     -12.7 %     -4.6 %     -6.1 %     -4.4 %     2.5 %
     
Total paging net (loss) gain rate
    -2.7 %     -3.2 %     -3.2 %     -3.8 %     -3.5 %     -3.8 %
     
 
(a)   Slight variations in totals are due to rounding.
 
(b)   Gross disconnect rate is current period disconnected units divided by prior period ending units in service
 
(c)   Net gain / loss rate is net current period placements and disconnected units in service divided by prior period ending units in service

 


 

USA MOBILITY, INC. (WIRELESS)
SUPPLEMENTAL INFORMATION BY MARKET SEGMENT (a)

(Unaudited)
                                                 
    For the three months ended  
    6/30/11     3/31/11     12/31/10     9/30/10     6/30/10     3/31/10  
Gross placement rate (b)
                                               
Healthcare
    4.5 %     3.3 %     3.4 %     3.9 %     4.4 %     3.5 %
Government
    2.1 %     1.9 %     1.5 %     3.1 %     1.9 %     1.8 %
Large enterprise
    2.1 %     2.3 %     2.2 %     1.9 %     2.6 %     2.1 %
Other
    2.0 %     2.5 %     2.3 %     2.5 %     2.0 %     2.4 %
     
Total direct
    3.6 %     2.9 %     2.8 %     3.4 %     3.5 %     2.9 %
Total indirect
    2.3 %     1.6 %     1.7 %     2.6 %     2.5 %     10.9 %
     
Total
    3.5 %     2.8 %     2.7 %     3.3 %     3.4 %     3.5 %
     
 
                                               
Gross disconnect rate (b)
                                               
Healthcare
    -5.0 %     -4.7 %     -4.4 %     -5.7 %     -5.2 %     -4.9 %
Government
    -8.7 %     -7.6 %     -7.3 %     -8.3 %     -8.3 %     -9.1 %
Large enterprise
    -7.1 %     -6.2 %     -7.0 %     -9.7 %     -8.3 %     -10.3 %
Other
    -9.0 %     -9.2 %     -8.6 %     -9.3 %     -9.6 %     -11.0 %
     
Total direct
    -6.2 %     -5.8 %     -5.7 %     -7.0 %     -6.6 %     -7.1 %
Total indirect
    -6.6 %     -8.1 %     -8.9 %     -7.7 %     -9.9 %     -10.1 %
     
Total
    -6.2 %     -6.0 %     -5.9 %     -7.0 %     -6.9 %     -7.3 %
     
 
                                               
Net loss rate (b)
                                               
Healthcare
    -0.5 %     -1.4 %     -1.1 %     -1.8 %     -0.8 %     -1.4 %
Government
    -6.6 %     -5.7 %     -5.9 %     -5.2 %     -6.4 %     -7.4 %
Large enterprise
    -5.0 %     -3.9 %     -4.8 %     -7.8 %     -5.7 %     -8.1 %
Other
    -6.9 %     -6.8 %     -6.3 %     -6.8 %     -7.6 %     -8.6 %
     
Total direct
    -2.6 %     -3.0 %     -2.8 %     -3.6 %     -3.1 %     -4.2 %
Total indirect
    -4.3 %     -6.6 %     -7.2 %     -5.1 %     -7.4 %     0.7 %
     
Total
    -2.7 %     -3.2 %     -3.2 %     -3.8 %     -3.5 %     -3.8 %
     
 
                                               
End of period units in service % of total (b)
                                               
Healthcare
    60.9 %     59.5 %     58.3 %     57.1 %     56.1 %     54.5 %
Government
    12.6 %     13.1 %     13.5 %     13.9 %     14.1 %     14.4 %
Large enterprise
    9.8 %     10.0 %     10.1 %     10.2 %     10.7 %     10.9 %
Other
    9.7 %     10.3 %     10.8 %     11.2 %     11.4 %     12.1 %
     
Total direct
    93.0 %     92.9 %     92.7 %     92.4 %     92.3 %     91.9 %
Total indirect
    7.0 %     7.1 %     7.3 %     7.6 %     7.7 %     8.1 %
     
Total
    100.0 %     100.0 %     100.0 %     100.0 %     100.0 %     100.0 %
     
 
(a)   Slight variations in totals are due to rounding.
 
(b)   Changes in the classification of units in service are reflected in the quarter when such changes are identified. Such changes are then appropriately reflected in calculating the gross placement, gross disconnect and net (loss) gain rates

 


 

USA MOBILITY, INC. (WIRELESS)
SUPPLEMENTAL INFORMATION – DIRECT UNITS IN SERVICE AND
CELLULAR ACTIVATIONS (a)

(Unaudited)
                                               
    For the three months ended  
    6/30/11     3/31/11     12/31/10     9/30/10     6/30/10   3/31/10  
Account size ending units in service (000’s)
                                             
1 to 3 units
    74       79       84       88       95     101  
4 to 10 units
    45       48       52       54       58     62  
11 to 50 units
    106       114       123       130       140     149  
51 to 100 units
    68       72       76       79       86     92  
101 to 1,000 units
    411       424       436       456       483     499  
›1,000 units
    951       962       980       994       1,008     1,037  
       
Total
    1,655       1,699       1,751       1,801       1,870     1,930  
       
 
                                             
End of period units in service % of total direct
                                             
1 to 3 units
    4.4 %     4.7 %     4.8 %     4.9 %     5.1 %   5.2 %
4 to 10 units
    2.7 %     2.8 %     2.9 %     3.0 %     3.1 %   3.2 %
11 to 50 units
    6.4 %     6.7 %     7.0 %     7.2 %     7.5 %   7.7 %
51 to 100 units
    4.1 %     4.2 %     4.4 %     4.4 %     4.6 %   4.8 %
101 to 1,000 units
    24.8 %     25.0 %     24.9 %     25.3 %     25.8 %   25.9 %
›1,000 units
    57.6 %     56.6 %     56.0 %     55.2 %     53.9 %   53.2 %
       
Total
    100.0 %     100.0 %     100.0 %     100.0 %     100.0 %   100.0 %
       
 
                                             
Account size net loss rate
                                             
1 to 3 units
    -6.3 %     -6.2 %     -4.8 %     -7.0 %     -5.8 %   -7.6 %
4 to 10 units
    -6.8 %     -6.2 %     -5.0 %     -7.5 %     -6.0 %   -5.3 %
11 to 50 units
    -6.5 %     -7.7 %     -5.1 %     -7.3 %     -6.1 %   -5.8 %
51 to 100 units
    -5.4 %     -5.7 %     -4.2 %     -7.9 %     -6.5 %   -4.4 %
101 to 1,000 units
    -3.3 %     -2.7 %     -4.2 %     -5.6 %     -3.3 %   -3.7 %
›1,000 units
    -1.0 %     -1.8 %     -1.5 %     -1.3 %     -1.9 %   -3.7 %
       
Total
    -2.6 %     -3.0 %     -2.8 %     -3.6 %     -3.1 %   -4.2 %
       
 
                                             
Account size ARPU
                                             
1 to 3 units
  $ 15.74     $ 15.57     $ 15.57     $ 15.48     $ 15.37   $ 15.28  
4 to 10 units
    14.65       14.53       14.56       14.51       14.35     14.37  
11 to 50 units
    12.38       12.19       12.26       12.18       12.01     11.86  
51 to 100 units
    10.68       10.59       10.72       10.69       10.76     10.67  
101 to 1,000 units
    9.10       9.00       9.00       8.82       8.93     9.00  
›1,000 units
    7.49       7.47       7.43       7.64       7.63     7.80  
       
Total
  $ 8.92     $ 8.89     $ 8.92     $ 9.01     $ 9.06   $ 9.17  
       
 
                                             
Cellular revenue
                                             
Number of activations
    4,370       2,191       1,990       1,885       1,885     2,354  
       
Revenue from cellular services (000’s)
  $ 1,199     $ 684     $ 499     $ 532     $ 624   $ 708  
       
 
(a)   Slight variations in totals are due to rounding.

 


 

USA MOBILITY, INC. (WIRELESS)
CONSOLIDATED OPERATING EXPENSES SUPPLEMENTAL INFORMATION (a)

(Unaudited and in thousands)
                                                 
    For the three months ended  
    6/30/11     3/31/11     12/31/10     9/30/10     6/30/10     3/31/10  
Cost of products sold
  $ 1,171     $ 663     $ 1,051     $ 819     $ 1,134     $ 1,209  
     
 
                                               
Service, rental and maintenance
                                               
Site rent
    5,962       6,881       7,629       8,042       8,283       9,079  
Telecommunications
    2,868       3,099       3,066       3,341       3,467       3,831  
Payroll and related
    4,124       4,293       4,319       4,199       4,444       4,586  
Stock based compensation
    6       5       6       5       7       6  
Other
    1,251       1,538       1,201       1,234       974       1,439  
     
Total service, rental and maintenance
    14,211       15,816       16,221       16,821       17,175       18,941  
     
 
                                               
Selling and marketing
                                               
Payroll and related
    2,293       2,494       2,627       2,659       2,814       2,964  
Commissions
    1,285       1,002       1,007       1,163       1,367       1,164  
Stock based compensation
    16       17       17       17       22       17  
Other
    352       320       264       221       191       412  
     
Total selling and marketing
    3,946       3,833       3,915       4,060       4,394       4,557  
     
 
                                               
General and administrative
                                               
Payroll and related
    5,397       5,677       6,118       5,719       6,621       6,912  
Stock based compensation
    215       203       223       15       242       240  
Bad debt
    (150 )     393       547       571       594       713  
Facility rent
    723       726       856       992       1,326       1,354  
Telecommunications
    394       443       480       518       603       657  
Outside services
    2,427       5,186       2,385       2,463       3,185       3,267  
Taxes, licenses and permits
    2,190       1,332       1,097       1,276       1,836       1,591  
Other
    1,155       1,280       3,123       1,353       1,517       1,078  
     
Total general and administrative
    12,351       15,240       14,829       12,907       15,924       15,812  
     
 
                                               
Severance and restructuring
    17       33       1,738       86       41       314  
Depreciation, amortization and accretion
    3,618       4,032       4,226       5,899       6,698       7,304  
 
                                               
     
Operating expenses
  $ 35,314     $ 39,617     $ 41,980     $ 40,592     $ 45,366     $ 48,137  
     
 
                                               
Capital expenditures
  $ 1,721     $ 1,494     $ 4,720     $ 1,730     $ 563     $ 1,725  
 
(a)   Slight variations in totals are due to rounding.