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Exhibit 99.1

 

LOGO

 

FOR IMMEDIATE RELEASE     CONTACT:      Bob Lougee (800) 611-8488
Thursday, May 3, 2012          bob.lougee@usamobility.com

USA Mobility Reports First Quarter Operating Results;

Board Declares Regular Quarterly Dividend

Wireless Subscriber and Revenue Trends Continue to Improve;

Software Solutions Launched, Application Development Advances;

Operating Expenses Reduced; Outstanding Debt Repaid

Amcom Acquires Critical Test Results Management Solution from IMCO Technologies

Springfield, VA (May 3, 2012) — 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, 2012. In addition, the Company’s Board of Directors declared a regular quarterly dividend of $0.25 per share, payable on June 22, 2012 to stockholders of record on May 18, 2012.

Consolidated revenue for the first quarter was $56.7 million, compared to $58.9 million in the fourth quarter and $57.3 million in the first quarter of 2011. Revenue from the Company’s Wireless business (USA Mobility Wireless) was $44.3 million in the first quarter, compared to $46.5 million in the fourth quarter and $52.5 million in the first quarter of 2011. Revenue from the Software business (Amcom Software) was $12.5 million, compared to revenue of $4.8 million in the first quarter of 2011. USA Mobility acquired Amcom on March 3, 2011. As a result, reported results for the Software business for the first quarter of 2011 included only the 29-day period from March 3, 2011 to March 31, 2011. In addition, Software maintenance revenue in the prior year’s first quarter was reduced by $0.9 million for purchase accounting adjustments. Accordingly, on a pro forma basis, reflecting Amcom results for the full quarter and excluding purchase accounting adjustments, Software revenue for the first quarter of 2011 was $13.1 million and consolidated revenue was $65.6 million.

First quarter EBITDA (earnings before interest, taxes, depreciation, amortization and accretion) totaled $18.8 million, or 33.1 percent of revenue, compared to $17.9 million, or 31.2 percent of revenue, in the year-earlier quarter. On a pro forma basis, excluding purchase accounting adjustments and one-time acquisition related expenses, EBITDA in the year-earlier quarter was $21.7 million, or 33.0 percent of revenue. First quarter EBITDA included $17.5 million from Wireless and $1.3 million from Software. EBITDA from Wireless of $17.5 million compared to $17.1 million in the prior quarter and $17.0 million in the year-earlier quarter.


Net income for the first quarter was $8.5 million, or $0.37 per fully diluted share, compared to $40.7 million, or $1.82 per fully diluted share, in the first quarter of 2011. Net income for the year-earlier quarter reflected 29 days of the Software business as well as the purchase accounting adjustment to Software maintenance revenue and one-time acquisition related expenses. In addition, 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. 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 of 2011 would have been $10.9 million, or $0.49 per fully diluted share.

First quarter results included:

Wireless

 

   

Net unit losses improved to 51,000 in the first quarter from 53,000 in the fourth quarter and 60,000 in the first quarter of 2011, while the quarterly rate of unit erosion improved to 3.0 percent from 3.2 percent in the year-earlier quarter. The annual rate of subscriber erosion improved to 11.5 percent in the first quarter, compared to 11.7 percent in the fourth quarter and 12.9 percent in the year-ago quarter, and was the lowest annual unit loss rate in more than seven years. Units in service at March 31, 2012 totaled 1,617,000, compared to 1,828,000 a year earlier.

 

   

The quarterly rate of revenue erosion was 4.9 percent, compared to 4.1 percent in the fourth quarter and 3.9 percent in the first quarter of 2011, while the annual rate of revenue erosion improved to 15.7 percent from 16.3 percent in the year-earlier quarter. In 2012, we transferred most of the Wireless systems sales revenue to our Software business. Excluding systems sales revenue in the first quarter of 2011 of $0.6 million, the quarterly rate of revenue erosion would have improved to 3.6 percent and the annual rate of revenue erosion would have improved to 14.8 percent.

 

   

Total ARPU (average revenue per unit) was $8.50 in the first quarter, compared to $8.51 in the fourth quarter and $8.72 in the first quarter of 2011.

 

   

First quarter EBITDA margin for Wireless was 39.5 percent, compared to 36.7 percent in the fourth quarter and 32.3 percent in the year-earlier quarter. Excluding severance expenses, EBITDA margin would have been 39.3 percent in the fourth quarter of 2011 and excluding the one-time acquisition related expenses EBITDA margin would have been 37.8 percent in the first quarter of 2011.

Software

 

   

Bookings for the first quarter were $12.4 million, compared to $15.2 million in the fourth quarter and pro forma bookings in the first quarter of 2011 of $13.7 million. Historically, the first quarter is the lowest quarter for bookings and revenue.


   

The backlog was $23.7 million at March 31, 2012, a slight increase from the fourth quarter, and compared to $18.9 million a year earlier.

 

   

Of the $12.5 million in Software revenue for the first quarter, $6.4 million was maintenance revenue and $6.1 million was operations revenue, compared to $5.1 million and $7.3 million, respectively, of the $12.4 million in Software revenue for the prior quarter (which included $1.0 million of purchase accounting adjustment to software maintenance revenue).

 

   

The renewal rate for maintenance in the first quarter was 99.6 percent.

Total Company

 

   

Consolidated operating expenses (excluding depreciation, amortization and accretion) totaled $38.0 million in the first quarter, with $26.8 million for Wireless and $11.2 million for Software, compared to $40.6 million in the fourth quarter, with $29.5 million for Wireless and $11.1 million for Software.

 

   

Capital expenses were $1.6 million, compared to $1.5 million in the first quarter of 2011.

 

   

Dividends paid to stockholders totaled $5.5 million for the first quarter.

 

   

The Company’s outstanding debt balance at March 31, 2012 was $3.3 million, at an interest rate of 3.63 percent, and the cash balance was $37.5 million. On April 6, 2012, the Company repaid the remaining debt balance of $3.3 million.

 

   

The number of full-time equivalent employees at March 31, 2012 totaled 685, including 420 for Wireless and 265 for Software, compared to a total of 683 at December 31, 2011.

Vincent D. Kelly, president and chief executive officer, said: “USA Mobility continued to make excellent progress during the first quarter, consistent with the financial guidance we provided earlier this year. Our Wireless business met or exceeded all key performance goals for gross additions, churn, and ARPU. Further, our overall Wireless trends continued to improve and our results have come in well ahead of plan. We were especially pleased to see further improvement in the annual rates of subscriber and revenue erosion. Our Software business also made substantial progress in the quarter. Although bookings fell below expectations due to lag-time in the software sales cycle on new customer accounts, we increased our backlog and made significant advances in Amcom’s product and business development initiatives. This includes Amcom’s acquisition on May 2nd of IMCO Technologies’ Critical Test Results Management solution, which allows hospitals to improve patient care and safety by expediting the delivery of critical test results to caregivers. At the same time, for the combined business 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’s Wireless sales and marketing efforts continued to focus on its core market segments of Healthcare, Government and Large Enterprise during the first quarter. “These core segments represented approximately 90.6 percent of our direct subscriber base and 86.1 percent of our direct paging revenue at the end of the first quarter, compared to 88.9 percent and 83.8 percent, respectively, a year earlier. Healthcare continued to be our best performing market segment with the highest percentage of direct gross additions (77.9%) and the lowest rate of direct net unit loss (1.4%) as healthcare providers continue to benefit from the reliability and cost advantages of paging for their most critical messaging needs.”


Commenting on the Software business, Christopher D. Heim, president of Amcom, said: “Despite slower than expected bookings, we delivered an increase in quarter-over-quarter revenue and a growing backlog and sales pipeline at March 31st. During the quarter our sales team brought in solid orders from multiple business segments, including Healthcare, Government, Large Enterprise and Hospitality, with continued demand for call center management, clinical alerting middleware, critical smartphone communications and emergency notification. While sales activity remained strongest in North America, we also completed sales in Asia and the Middle East. In addition,” Heim noted, “our sales and marketing teams launched two new solutions for the Healthcare market during the quarter, including Amcom Care Connect, which enhances patient care by helping busy doctors coordinate and execute phone conversations, and Amcom Duty Hours Tracking, which helps teaching hospitals stay compliant with accreditation guidelines on how many hours their residents can work.”

Heim said Amcom acquired the Critical Test Results Management solution from IMCO Technologies for approximately $3.0 million in cash, providing USA Mobility’s Software business extensive expertise in the effective communication of critical test results management. “It also gives us another communication software solution to improve and enhance communications in clinical settings. Many of our 900 hospital customers have previously requested this specific type of solution, so we’re very pleased to be able to integrate this capability with their existing infrastructures to enhance patient safety and care.”

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 18.0 percent from the year-earlier quarter,” he noted, “and again exceeded the annual rate of Wireless revenue decline. Also, Wireless revenue for the quarter remained strong, driven largely by a stable ARPU and improved unit churn.” Endsley said the Company reduced its outstanding debt balance to $3.3 million at March 31st and repaid the $3.3 million balance on April 6, 2012. “Our acquisition of Amcom on March 3, 2011 was funded in part through a $51.9 million credit facility. With repayment of that debt, USA Mobility is once again a debt-free company.”

Regarding financial guidance for 2012, Endsley said the Company is reiterating its prior guidance for the full year, with total revenues expected to range from $214 million to $232 million, operating expenses (excluding depreciation, amortization and accretion) to range from $156.5 million to $163.5 million, and capital expenses to range from $7.5 million to $10 million.

* * * * * * * * *

USA Mobility plans to host a conference call for investors on its first quarter results at 10:00 a.m. Eastern Time on Friday, May 4, 2012. Dial-in numbers for the call are 719-325-2199 or 888-634-7543. The pass code for the call is 3944122. A replay of the call will be available from 1:00 p.m. ET on May 4 until 11:59 p.m. on Friday, May 18. Replay numbers are 719-457-0820 or 888-203-1112. The pass code for the replay is 3944122.

In addition, the Company will host a meeting for financial analysts from 9:30 a.m. to 10:30 a.m. on Wednesday, May 16, 2012 in Alexandria, Virginia immediately following its Annual Meeting of Stockholders. The Annual


Meeting of Stockholders is scheduled to begin at 9:00 a.m. The Analysts Meeting and Annual Meeting will be held at The Westin Alexandria, 400 Courthouse Square, Bell Room, Alexandria, Virginia. Financial analysts planning to attend the Analysts Meeting should RSVP to stacy.sloan@usamobility.com or call 703-269-6950.

* * * * * * * * *

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 Mobility’s 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.

CONDENSED CONSOLIDATED RESULTS OF OPERATIONS (a), (b)

(Unaudited and in thousands, except share, per share amounts and ARPU)

 

     For the three months ended March 31,  
     2012     2011  
     Wireless     Software     Total     Wireless     Software     Total  

Revenue:

            

Paging service

   $       41,875      $           —        $ 41,875      $       48,628      $           —        $ 48,628   

Cellular

     277        —          277        684        —          684   

Product and related sales (c)

     1,787        12,470        14,257        2,344        4,799        7,143   

Other

     326        —          326        880        —          880   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total revenue

     44,265        12,470        56,735        52,536        4,799        57,335   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating expenses:

            

Cost of products sold

     173        4,643        4,816        663        1,767        2,430   

Service, rental and maintenance (c)

     12,034        2,269        14,303        15,816        649        16,465   

Selling and marketing

     3,048        2,605        5,653        3,833        1,091        4,924   

General and administrative

     11,508        1,661        13,169        15,240        328        15,568   

Severance and restructuring

     9        13        22        33        —          33   

Depreciation, amortization and accretion

     2,815        1,700        4,515        4,032        507        4,539   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expenses

     29,587        12,891        42,478        39,617        4,342        43,959   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

% of total revenue

     66.8     103.4     74.9     75.4     90.5     76.7

Operating income (loss)

     14,678        (421     14,257        12,919        457        13,376   

% of total revenue

     33.2     -3.4     25.1     24.6     9.5     23.3

Interest expense, net

     (188     —          (188     (247     (9     (256

Other (expense) income, net

     (46     (16     (62     205        (51     154   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income (loss) before income tax (expense) benefit

     14,444        (437     14,007        12,877        397        13,274   

Income tax (expense) benefit

     (5,718     173        (5,545     27,583        (206     27,377   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss)

   $ 8,726      $ (264   $ 8,462      $ 40,460      $ 191      $ 40,651   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Basic net income per common share

       $ 0.38          $ 1.84   
      

 

 

       

 

 

 

Diluted net income per common share

       $ 0.37          $ 1.82   
      

 

 

       

 

 

 

Basic weighted average common shares outstanding

         22,106,543            22,063,393   
      

 

 

       

 

 

 

Diluted weighted average common shares outstanding

         22,589,483            22,333,399   
      

 

 

       

 

 

 

Reconciliation of operating income (loss) to EBITDA (d):

            

Operating income (loss)

   $ 14,678      $ (421   $ 14,257      $ 12,919      $ 457      $ 13,376   

Add back: depreciation, amortization and accretion

     2,815        1,700        4,515        4,032        507        4,539   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

EBITDA

   $ 17,493      $ 1,279      $ 18,772      $ 16,951      $ 964      $ 17,915   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

% of total revenue

     39.5     10.3     33.1     32.3     20.1     31.2

Key statistics:

            

Units in service

     1,617        —          1,617        1,828        —          1,828   

Average revenue per unit (ARPU)

   $ 8.50      $ —        $ 8.50      $ 8.72      $ —        $ 8.72   

Bookings

   $ —        $ 12,417      $ 12,417      $ —        $ 3,327      $ 3,327   

Backlog

   $ —        $ 23,747      $ 23,747      $ —        $ 18,869      $ 18,869   

 

(a) Slight variations in totals are due to rounding.
(b) Includes consolidated results of operations of USA Mobility Wireless, Inc. (“Wireless”) and Amcom Software, Inc. (“Software”). Software operations reflect financial results from March 3, 2011, the acquisition date.
(c) Wireless results reflect eliminations of intercompany revenue and expenses.
(d) 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)

 

     3/31/12      12/31/11  
     (Unaudited)         

Assets

     

Current assets:

     

Cash and cash equivalents

   $ 37,518       $ 53,655   

Accounts receivable, net

     19,753         20,523   

Prepaid expenses and other

     3,933         4,338   

Inventory

     2,575         2,268   

Escrow receivables

     7,418         14,819   

Deferred income tax assets, net

     4,436         8,617   
  

 

 

    

 

 

 

Total current assets

     75,633         104,220   

Property and equipment, net

     21,092         22,421   

Goodwill

     130,968         130,968   

Other intangible assets, net

     37,211         38,757   

Deferred income tax assets, net

     50,394         51,600   

Other assets

     2,004         2,094   
  

 

 

    

 

 

 

Total assets

   $ 317,302       $ 350,060   
  

 

 

    

 

 

 

Liabilities and stockholders’ equity

     

Current liabilities:

     

Current portion of long-term debt

   $ 3,250       $ —     

Accounts payable and accrued liabilities

     12,462         12,394   

Accrued compensation and benefits

     8,878         12,854   

Consideration payable

     7,418         14,819   

Customer deposits

     1,899         1,806   

Deferred revenue

     14,489         14,693   
  

 

 

    

 

 

 

Total current liabilities

     48,396         56,566   

Long-term debt, net of current portion

     —           28,250   

Deferred revenue

     521         581   

Other long-term liabilities

     12,277         12,223   
  

 

 

    

 

 

 

Total liabilities

     61,194         97,620   
  

 

 

    

 

 

 

Commitments and contingencies

     

Stockholders’ equity:

     

Preferred stock

     —           —     

Common stock

     2         2   

Additional paid-in capital

     132,471         131,612   

Retained earnings

     123,635         120,826   
  

 

 

    

 

 

 

Total stockholders’ equity

     256,108         252,440   
  

 

 

    

 

 

 

Total liabilities and stockholders’ equity

   $ 317,302       $ 350,060   
  

 

 

    

 

 

 

 

(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  
     3/31/12     3/31/11  

Cash flows from operating activities:

    

Net income

   $ 8,462      $ 40,651   

Adjustments to reconcile net income to net cash provided by operating activities:

    

Depreciation, amortization and accretion

     4,515        4,539   

Amortization of deferred financing costs

     65        45   

Deferred income tax expense (benefit)

     5,387        (27,929

Amortization of stock based compensation

     437        225   

Provisions for doubtful accounts, service credits and other

     411        700   

Settlement of non-cash transaction taxes

     (123     (119

Loss/(Gain) on disposals of property and equipment

     162        (13

Changes in assets and liabilities:

    

Accounts receivable

     358        (49

Prepaid expenses, intangibles and other assets

     118        (154

Accounts payable and accrued liabilities

     (3,680     (5,046

Customer deposits and deferred revenue

     (171     (161
  

 

 

   

 

 

 

Net cash provided by operating activities

     15,941        12,689   
  

 

 

   

 

 

 

Cash flows from investing activities:

    

Purchases of property and equipment

     (1,551     (1,494

Proceeds from disposals of property and equipment

     8        11   

Acquisitions, net of cash acquired

     —          (134,217
  

 

 

   

 

 

 

Net cash used in investing activities

     (1,543     (135,700
  

 

 

   

 

 

 

Cash flows from financing activities:

    

Issuance of debt

     —          24,044   

Repayment of debt

     (25,000     —     

Deferred financing costs

     —          (1,339

Cash dividends to stockholders

     (5,535     (5,531
  

 

 

   

 

 

 

Net cash (used in) provided by financing activities

     (30,535     17,174   
  

 

 

   

 

 

 

Net decrease in cash and cash equivalents

     (16,137     (105,837

Cash and cash equivalents, beginning of period

     53,655        129,220   
  

 

 

   

 

 

 

Cash and cash equivalents, end of period

   $ 37,518      $ 23,383   
  

 

 

   

 

 

 

Supplemental disclosure:

    

Interest paid

   $ 220      $ 263   
  

 

 

   

 

 

 

Income taxes paid

   $ 224      $ —     
  

 

 

   

 

 

 

Non-cash financing activities

   $ —        $ 27,750   
  

 

 

   

 

 

 

 

(a) Slight variations in totals are due to rounding.


USA MOBILITY, INC.

CONDENSED CONSOLIDATED RESULTS OF OPERATIONS (a), (b)

(Unaudited and in thousands, except share, per share amounts and ARPU)

 

     For the three months ended  
     3/31/12     12/31/11     9/30/11     6/30/11     3/31/11  

Revenues:

          

Paging service

   $ 41,875      $ 43,249      $ 45,121      $ 47,319      $ 48,628   

Cellular

     277        414        315        1,199        684   

Product and related sales

     14,257        14,847        15,464        15,885        7,143   

Other

     326        421        570        768        880   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues

     56,735        58,931        61,470        65,171        57,335   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating expenses:

          

Cost of products sold

     4,816        5,430        5,951        7,078        2,430   

Service, rental and maintenance

     14,303        14,478        15,217        16,187        16,465   

Selling and marketing

     5,653        5,851        5,927        6,588        4,924   

General and administrative

     13,169        13,610        13,077        13,840        15,568   

Severance and restructuring

     22        1,215        28        17        33   

Depreciation, amortization and accretion

     4,515        4,417        5,080        5,298        4,539   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expenses

     42,478        45,001        45,280        49,008        43,959   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

% of total revenues

     74.9     76.4     73.7     75.2     76.7

Operating income

     14,257        13,930        16,190        16,163        13,376   

% of total revenues

     25.1     23.6     26.3     24.8     23.3

Interest expense, net

     (188     (404     (732     (862     (256

Other (expense) income, net

     (62     131        (1     7,666        154   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income before income tax (expense) benefit

     14,007        13,657        15,457        22,967        13,274   

Income tax (expense) benefit

     (5,545     5,289        (5,010     (4,372     27,377   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income

   $ 8,462      $ 18,946      $ 10,447      $ 18,595      $ 40,651   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Basic net income per common share

   $ 0.38      $ 0.86      $ 0.47      $ 0.84      $ 1.84   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Diluted net income per common share

   $ 0.37      $ 0.84      $ 0.46      $ 0.82      $ 1.82   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Basic weighted average common shares outstanding

     22,106,543        22,094,197        22,090,913        22,086,848        22,063,393   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Diluted weighted average common shares outstanding

     22,589,483        22,577,312        22,573,064        22,551,862        22,333,399   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Reconciliation of operating income to EBITDA (c):

          

Operating income

   $ 14,257      $ 13,930      $ 16,190      $ 16,163      $ 13,376   

Add back: depreciation, amortization and accretion

     4,515        4,417        5,080        5,298        4,539   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

EBITDA

   $ 18,772      $ 18,347      $ 21,270      $ 21,461      $ 17,915   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

% of total revenues

     33.1     31.1     34.6     32.9     31.2

Key statistics:

          

Units in service

     1,617        1,668        1,721        1,779        1,828   

Average revenue per unit (ARPU)

   $ 8.50      $ 8.51      $ 8.59      $ 8.74      $ 8.72   

Bookings

   $ 12,417      $ 15,213      $ 14,188      $ 15,158      $ 3,327   

Backlog

   $ 23,747      $ 23,712      $ 21,313      $ 20,478      $ 18,869   

 

(a) Slight variations in totals are due to rounding.
(b) Software operations reflect financial results from March 3, 2011, the acquisition date.
(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.

CONSOLIDATED OPERATING EXPENSES

SUPPLEMENTAL INFORMATION (a), (b)

(Unaudited and in thousands)

 

     For the three months ended  
     3/31/12      12/31/11      9/30/11      6/30/11     3/31/11  

Cost of products sold

             

Payroll and related

   $ 2,368       $ 2,277       $ 2,537       $ 2,156      $ 677   

Cost of sales

     2,037         2,724         3,132         4,263        1,536   

Other

     411         429         282         659        217   
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Total cost of products sold

     4,816         5,430         5,951         7,078        2,430   
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Service, rental and maintenance

             

Site rent

     4,791         5,002         5,438         5,962        6,881   

Telecommunications

     2,312         2,598         2,732         2,880        3,102   

Payroll and related

     5,529         5,279         5,578         5,562        4,769   

Stock based compensation

     6         6         6         6        5   

Other

     1,665         1,593         1,463         1,777        1,708   
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Total service, rental and maintenance

     14,303         14,478         15,217         16,187        16,465   
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Selling and marketing

             

Payroll and related

     3,559         3,306         3,593         3,567        2,904   

Commissions

     1,253         1,539         1,443         1,948        1,414   

Stock based compensation

     16         16         16         16        17   

Other

     825         990         875         1,057        589   
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Total selling and marketing

     5,653         5,851         5,927         6,588        4,924   
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

General and administrative

             

Payroll and related

     6,490         6,268         5,778         6,781        6,072   

Stock based compensation

     415         415         392         432        203   

Bad debt

     234         363         346         (80     416   

Facility rent

     806         942         1,041         1,035        823   

Telecommunications

     412         440         494         490        470   

Outside services

     2,447         2,079         2,496         2,533        5,228   

Taxes, licenses and permits

     1,501         1,445         1,327         2,190        1,332   

Other

     864         1,658         1,203         459        1,024   
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Total general and administrative

     13,169         13,610         13,077         13,840        15,568   
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Severance and restructuring

     22         1,215         28         17        33   

Depreciation, amortization and accretion

     4,515         4,417         5,080         5,298        4,539   
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Operating expenses

   $ 42,478       $ 45,001       $ 45,280       $ 49,008      $ 43,959   
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Capital expenditures

   $ 1,551       $ 2,818       $ 1,779       $ 1,854      $ 1,501   

 

(a) Slight variations in totals are due to rounding.
(b) Software operations have been included from March 3, 2011, the acquisition date.


USA MOBILITY, INC. (WIRELESS)

UNITS IN SERVICE ACTIVITY (a)

(Unaudited and in thousands)

 

     For the three months ended  
     3/31/12     12/31/11     9/30/11     6/30/11     3/31/11  

Units in service

          

Beginning units in service

          

Direct one-way

     1,465        1,510        1,559        1,599        1,645   

Direct two-way

     90        93        97        100        106   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total direct

     1,555        1,603        1,656        1,699        1,751   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Indirect one-way

     63        68        71        75        68   

Indirect two-way

     50        50        52        54        70   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total indirect

     113        118        123        129        138   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total beginning units in service

     1,668        1,721        1,779        1,828        1,889   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Gross placements

          

Direct one-way

     41        39        50        56        47   

Direct two-way

     3        4        5        5        3   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total direct

     44        43        55        61        50   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Indirect one-way

     1        2        3        3        1   

Indirect two-way

     —          —          —          2        —     
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total indirect

     1        2        3        5        1   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total gross placements

     45        45        58        66        51   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Gross disconnects

          

Direct one-way

     (83     (84     (99     (94     (93

Direct two-way

     (8     (7     (9     (10     (9
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total direct

     (91     (91     (108     (104     (102
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Indirect one-way

     (4     (7     (6     (10     6   

Indirect two-way

     (1     —          (2     (1     (16
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total indirect

     (5     (7     (8     (11     (10
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total gross disconnects

     (96     (98     (116     (115     (112
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net (loss)/gain

          

Direct one-way

     (42     (45     (49     (38     (46

Direct two-way

     (5     (3     (4     (5     (6
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total direct

     (47     (48     (53     (43     (52
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Indirect one-way

     (3     (5     (3     (7     7   

Indirect two-way

     (1     —          (1     1        (16
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total indirect

     (4     (5     (4     (6     (9
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total net change

     (51     (53     (58     (49     (60
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Ending units in service

          

Direct one-way

     1,423        1,465        1,510        1,559        1,599   

Direct two-way

     85        90        93        97        100   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total direct

     1,508        1,555        1,603        1,656        1,699   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Indirect one-way

     60        63        68        71        75   

Indirect two-way

     49        50        50        52        54   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total indirect

     109        113        118        123        129   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total ending units in service

     1,617        1,668        1,721        1,779        1,828   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

(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  
     3/31/12     12/31/11     9/30/11     6/30/11     3/31/11  

ARPU

          

Direct one-way

   $ 7.91      $ 7.90      $ 7.97      $ 8.10      $ 8.05   

Direct two-way

     21.08        21.27        21.60        22.05        22.23   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total direct

     8.67        8.68        8.77        8.92        8.89   

Indirect one-way

     7.61        7.49        7.28        7.57        8.44   

Indirect two-way

     4.33        4.43        4.77        4.77        4.31   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total indirect

     6.14        6.16        6.22        6.40        6.49   

Total one-way

     7.90        7.89        7.94        8.08        8.07   

Total two-way

     15.00        15.29        15.71        16.04        15.41   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total paging ARPU

   $ 8.50      $ 8.51      $ 8.59      $ 8.74      $ 8.72   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Gross disconnect rate (b)

          

Direct one-way

     -5.7     -5.6     -6.4     -6.0     -5.7

Direct two-way

     -8.3     -7.7     -9.5     -9.3     -7.5
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total direct

     -5.8     -5.7     -6.5     -6.2     -5.8

Indirect one-way

     -7.0     -9.8     -8.1     -8.1     11.9

Indirect two-way

     -1.7     -1.8     -3.1     -4.5     -26.4
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total indirect

     -4.7     -6.4     -6.0     -6.6     -8.1

Total one-way

     -5.8     -5.8     -6.4     -6.1     -5.0

Total two-way

     -5.9     -5.6     -7.3     -7.6     -15.2
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total paging gross disconnect rate

     -5.8     -5.7     -6.5     -6.2     -6.0
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net (loss)/gain rate (c)

          

Direct one-way

     -2.9     -3.0     -3.2     -2.5     -2.9

Direct two-way

     -4.9     -3.3     -4.1     -3.1     -3.6
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total direct

     -3.0     -3.0     -3.2     -2.6     -3.0

Indirect one-way

     -5.4     -7.4     -4.5     -5.3     14.6

Indirect two-way

     -0.9     -1.0     -2.3     -3.0     -25.8
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total indirect

     -3.4     -4.7     -3.6     -4.3     -6.6

Total one-way

     -3.0     -3.2     -3.2     -2.6     -2.2

Total two-way

     -3.5     -2.5     -3.5     -3.1     -12.7
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total paging net loss rate

     -3.0     -3.1     -3.3     -2.7     -3.2
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

(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. (WIRELESS)

SUPPLEMENTAL INFORMATION BY MARKET SEGMENT (a)

(Unaudited)

 

     For the three months ended  
     3/31/12     12/31/11     9/30/11     6/30/11     3/31/11  

Gross placement rate (b)

          

Healthcare

     3.3     3.0     3.9     4.5     3.3

Government

     1.3     1.6     2.6     2.1     1.9

Large enterprise

     2.4     2.1     2.1     2.1     2.3

Other

     2.2     2.8     1.9     2.0     2.5
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total direct

     2.8     2.7     3.3     3.6     2.9

Total indirect

     1.3     1.7     2.4     2.3     1.6
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

     2.7     2.6     3.3     3.5     2.8
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Gross disconnect rate (b)

          

Healthcare

     -4.7     -4.9     -5.7     -5.0     -4.7

Government

     -7.7     -7.4     -8.3     -8.7     -7.6

Large enterprise

     -7.7     -5.7     -7.0     -7.1     -6.2

Other

     -9.2     -8.7     -8.9     -9.0     -9.2
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total direct

     -5.8     -5.7     -6.5     -6.2     -5.8

Total indirect

     -4.7     -6.4     -6.0     -6.6     -8.1
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

     -5.8     -5.7     -6.5     -6.2     -6.0
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net (loss)/gain rate (b)

          

Healthcare

     -1.4     -1.9     -1.8     -0.5     -1.4

Government

     -6.4     -5.8     -5.7     -6.6     -5.7

Large enterprise

     -5.3     -3.6     -4.9     -5.0     -3.9

Other

     -7.1     -5.9     -7.0     -6.9     -6.8
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total direct

     -3.0     -3.0     -3.2     -2.6     -3.0

Total indirect

     -3.4     -4.7     -3.6     -4.3     -6.6
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

     -3.0     -3.1     -3.3     -2.7     -3.2
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

End of period units in service % of total (b)

          

Healthcare

     63.6     62.6     61.7     60.9     59.5

Government

     11.5     11.9     12.3     12.6     13.1

Large enterprise

     9.3     9.5     9.6     9.8     10.0

Other

     8.8     9.2     9.5     9.7     10.3
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total direct

     93.2     93.2     93.1     93.0     92.9

Total indirect

     6.8     6.8     6.9     7.0     7.1
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

     100.0     100.0     100.0     100.0     100.0
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

(a) Slight variations in totals are due to rounding.
(b) Changes in the classification of units in service are reflected in the quarter when such changes are identified. Such changes are then appropriately reflected in calculating the gross placement, gross disconnect and net (loss)/gain rates.


USA MOBILITY, INC. (WIRELESS)

SUPPLEMENTAL INFORMATION - DIRECT UNITS IN SERVICE AND CELLULAR

ACTIVATIONS (a)

(Unaudited)

 

     For the three months ended  
     3/31/12     12/31/11     9/30/11     6/30/11     3/31/11  

Account size ending units in service (000’s)

          

1 to 3 units

     61        65        69        74        79   

4 to 10 units

     37        40        42        45        48   

11 to 50 units

     86        92        99        106        114   

51 to 100 units

     54        56        61        68        72   

101 to 1,000 units

     373        380        399        411        424   

>1,000 units

     897        922        933        952        962   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

     1,508        1,555        1,603        1,656        1,699   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

End of period units in service % of total direct

          

1 to 3 units

     4.1     4.2     4.3     4.4     4.7

4 to 10 units

     2.3     2.6     2.6     2.7     2.8

11 to 50 units

     5.7     5.9     6.2     6.4     6.7

51 to 100 units

     3.6     3.6     3.8     4.1     4.2

101 to 1,000 units

     24.8     24.4     24.9     24.8     25.0

>1,000 units

     59.5     59.3     58.2     57.6     56.6
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

     100.0     100.0     100.0     100.0     100.0
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Account size net loss rate

          

1 to 3 units

     -6.2     -5.7     -5.9     -6.3     -6.2

4 to 10 units

     -6.2     -6.6     -6.4     -6.8     -6.2

11 to 50 units

     -7.1     -7.3     -6.4     -6.5     -7.7

51 to 100 units

     -3.9     -8.4     -10.4     -5.4     -5.7

101 to 1,000 units

     -1.7     -4.7     -2.9     -3.3     -2.7

>1,000 units

     -2.7     -1.1     -2.1     -1.0     -1.8
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

     -3.0     -3.0     -3.2     -2.6     -3.0
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Account size ARPU

          

1 to 3 units

   $ 15.49      $ 15.46      $ 15.62      $ 15.74      $ 15.57   

4 to 10 units

     14.45        14.37        14.52        14.65        14.53   

11 to 50 units

     12.15        12.12        12.30        12.38        12.19   

51 to 100 units

     10.52        10.56        10.59        10.68        10.59   

101 to 1,000 units

     9.04        8.90        8.90        9.10        9.00   

>1,000 units

     7.35        7.37        7.42        7.49        7.47   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

   $ 8.67      $ 8.68      $ 8.77      $ 8.92      $ 8.89   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Cellular:

          

Number of activations

     1,070        1,476        1,236        4,370        2,191   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Revenue from cellular services (000’s)

   $ 277      $ 414      $ 315      $ 1,199      $ 684   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

(a) Slight variations in totals are due to rounding.


USA MOBILITY, INC.

2012 FINANCIAL GUIDANCE

 

     (In millions)  
     Full Year  
     Guidance Range  
     From      To  

Revenues

     

Wireless

   $ 156.0       $ 166.0   

Software

     58.0         66.0   
  

 

 

    

 

 

 

Combined

   $ 214.0       $ 232.0   
  

 

 

    

 

 

 

Operating Expenses (a)

     

Wireless

   $ 112.0       $ 108.0   

Software

     51.5         48.5   
  

 

 

    

 

 

 

Combined

   $ 163.5       $ 156.5   
  

 

 

    

 

 

 

Capital Expenses

     

Wireless

   $ 9.0       $ 7.0   

Software

     1.0         0.5   
  

 

 

    

 

 

 

Combined

   $ 10.0       $ 7.5   
  

 

 

    

 

 

 

 

(a) Operating expenses exclude depreciation, amortization and accretion.