USA Mobility Reports Third Quarter Operating Results; Board Declares Quarterly Cash Distribution
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Operating Expenses Significantly Reduced;
Cash Flow Margins Remain Near All-Time Highs
ALEXANDRIA, Va.--(BUSINESS WIRE)-- USA Mobility, Inc. (Nasdaq: USMO), a leading provider of wireless messaging and communications services, today announced operating results for the third quarter ended September 30, 2009.
In addition, the Company's Board of Directors declared a regular quarterly cash distribution of $0.25 per share. The cash distribution will be paid on December 10, 2009 to stockholders of record on November 17, 2009. The Company expects the entire distribution to be paid as a return of capital.
Total revenue for the third quarter was $69.5 million, compared to $75.1 million in the second quarter and $88.4 million in the third quarter of 2008. Operating income in the third quarter was $15.0 million, compared to $14.5 million in the year-earlier quarter. EBITDA (earnings before interest, taxes, depreciation, amortization and accretion) increased to $25.7 million from $25.5 million in the third quarter of 2008.
Net income for the third quarter was $9.2 million, or $0.40 per fully diluted share, compared to net income of $2.4 million, or $0.09 per fully diluted share, in the year-earlier quarter.
Third quarter results included:
-- Operating expenses (excluding depreciation, amortization and accretion)
totaled $43.8 million, compared to $51.2 million in the second quarter
and $62.8 million in the third quarter of 2008.
-- EBITDA margin (or EBITDA as a percentage of revenue) was 37.0 percent,
compared to 31.9 percent in the second quarter and 28.9 percent in the
year-earlier quarter.
-- Total paging ARPU (average revenue per unit) was $8.89, compared to
$8.96 in the second quarter and $8.69 in the third quarter of 2008.
-- The quarterly rate of revenue erosion increased to 7.5 percent from 5.7
percent in the second quarter and 4.0 percent in the third quarter of
2008. The annual rate of revenue erosion was 21.3 percent, compared to
18.4 percent in the second quarter and 16.2 percent in the year-earlier
quarter.
-- Net unit loss in the third quarter was 152,000, compared to 158,000 in
the second quarter and 174,000 in the third quarter of 2008. At
September 30, 2009, total units in service were 2,297,000, compared to
2,449,000 at June 30, 2009.
-- The quarterly rate of net unit loss was 6.2 percent, compared to 6.0
percent in the second quarter and 5.5 percent in the third quarter of
2008. The annual rate of subscriber loss was 23.5 percent, compared to
22.9 percent in the second quarter and 17.1 percent in the year-earlier
quarter.
-- Capital expenses were $1.8 million versus $4.4 million in the second
quarter.
-- The Company's cash balance at September 30, 2009 was $95.7 million.
"We reported another solid performance in the third quarter despite a continued high rate of unit loss," said Vincent D. Kelly, president and chief executive officer. "Operating results met or exceeded the majority of our targeted objectives and were consistent with our previously stated financial guidance. Cash flow margins remained high, operating expenses were reduced to their lowest level in many years, and we continued to provide cost effective and reliable wireless communications services to customers on a profitable basis." Kelly said the slow economy and continuing high unemployment nationwide contributed to higher than expected subscriber cancellations. "Still," he added, "we saw encouraging signs in our Healthcare segment - which now comprises more than 50 percent of our customer base - with the addition of numerous hospital and medical-related accounts."
Kelly said the Company again returned capital to stockholders in the third quarter in the form of cash distributions, consistent with its goal of producing sufficient free cash flow to return capital to stockholders. "Generating $23.6 million in cash from operations in the quarter allowed us to pay a regular quarterly cash distribution of $0.25 per share on September 10, 2009, representing a return of capital to stockholders of approximately $5.7 million. With the third quarter distribution, we have returned $316.7 million to stockholders since 2005."
The Company continued to reduce operating expenses during the third quarter through ongoing cost control measures. Thomas L. Schilling, chief operating officer and chief financial officer, said: "We made excellent progress in the third quarter reducing expenses throughout the organization. Moreover, we continued to reduce operating expenses faster than the rate of revenue erosion as expenses (excluding depreciation, amortization and accretion) declined 30.3 percent from the year-earlier quarter while revenue declined 21.3 percent. In addition, third quarter operating expenses as a percentage of revenue improved to 63.0 percent, the lowest level in many years." Schilling said lower operating expenses also helped keep the Company's cash flow margins near all-time highs. However, he cautioned, "Our ability to sustain operating margins at these levels going forward will become increasingly difficult given current subscriber and revenue trends."
Commenting on the Company's financial expectations for the balance of the year, Schilling said, "Based on our performance through September 30th, we are maintaining our financial guidance for 2009 of revenue between $286 million to $291 million, operating expenses (excluding depreciation, amortization and accretion) between $194 million to $197 million, and capital expenses between $16 million to $18 million.
* * * * * * * * *
USA Mobility plans to host a conference call for investors on its third quarter results at 10:00 a.m. Eastern Time on Thursday, October 29, 2009. The dial-in number for the call is 877-208-2391 (toll-free) or 913-312-9321 (toll). The pass code for the call is 5046918. A replay of the call will be available from 3:00 p.m. ET on October 29 until 11:59 p.m. on Thursday, November 12. The replay number is 888-203-1112 (toll-free) or 719-457-0820 (toll). The pass code for the replay is 5046918.
* * * * * * * * *
About USA Mobility
USA Mobility, Inc., headquartered in Alexandria, Virginia, is a comprehensive provider of reliable and affordable wireless communications solutions to the healthcare, government, large enterprise and emergency response sectors. As a single-source provider, USA Mobility's focus is on the business-to-business marketplace and supplying wireless connectivity solutions to a majority of the Fortune 1000 companies. The Company operates the largest one-way paging and advanced two-way paging networks in the United States. In addition, USA Mobility offers mobile voice and data services through Sprint Nextel, including BlackBerry(R) smartphones and GPS location applications. The Company's product offerings include customized wireless connectivity systems for the healthcare, government and other campus environments. USA Mobility also offers M2M (machine-to-machine) telemetry solutions for numerous applications that include asset tracking, utility meter reading and other remote device monitoring applications on a national scale. For further information visit www.usamobility.com.
Safe Harbor Statement under the Private Securities Litigation Reform Act: Statements contained herein or in prior press releases which are not historical fact, such as statements regarding USA Mobility's future operating and financial performance, are forward-looking statements for purposes of the safe harbor provisions under the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve risks and uncertainties that may cause USA Mobility's actual results to be materially different from the future results expressed or implied by such forward-looking statements. Factors that could cause actual results to differ materially from those expectations include, but are not limited to, declining demand for paging products and services, the ability to continue to reduce operating expenses, future capital needs, competitive pricing pressures, competition from both traditional paging services and other wireless communications services, government regulation, reliance upon third-party providers for certain equipment and services, as well as other risks described from time to time in periodic reports and registration statements filed with the Securities and Exchange Commission. Although USA Mobility believes the expectations reflected in the forward-looking statements are based on reasonable assumptions, it can give no assurance that its expectations will be attained. USA Mobility disclaims any intent or obligation to update any forward-looking statements.
USA MOBILITY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (a)
(unaudited and in thousands, except share and per share amounts)
For the three months ended
3/31/08 6/30/08 9/30/08 12/31/08 3/31/09 6/30/09 9/30/09
Revenues:
Paging service $ 86,773 $ 83,360 $ 80,533 $ 75,989 $ 72,021 $ 67,972 $ 63,308
Cellular 1,859 1,547 1,494 993 991 775 980
Product sales 4,871 5,741 5,014 5,863 5,271 5,269 4,354
Other 1,255 1,427 1,316 1,413 1,408 1,129 856
Total revenues 94,758 92,075 88,357 84,258 79,691 75,145 69,498
Operating
expenses:
Cost of 1,081 1,408 1,291 1,812 1,669 1,421 1,593
products sold
Service,
rental and 33,969 31,583 29,069 28,199 22,955 21,290 20,950
maintenance
Selling and 7,836 7,549 6,756 6,144 6,062 5,600 5,198
marketing
General and 21,808 20,782 20,631 18,289 20,186 22,801 16,050
administrative
Severance and 145 153 5,063 (35 ) 190 52 15
restructuring
Depreciation,
amortization 12,513 11,674 11,075 11,750 11,270 11,174 10,689
and accretion
Goodwill 188,170 - - - - - -
impairment
Total
operating 265,522 73,149 73,885 66,159 62,332 62,338 54,495
expenses
% of total 280.2 % 79.4 % 83.6 % 78.5 % 78.2 % 83.0 % 78.4 %
revenues
Operating (170,764 ) 18,926 14,472 18,099 17,359 12,807 15,003
(loss) income
% of total -180.2 % 20.6 % 16.4 % 21.5 % 21.8 % 17.0 % 21.6 %
revenues
Interest 578 672 471 79 26 28 16
income, net
Other income 125 202 205 90 112 (42 ) 185
(expense), net
(Loss) income
before income (170,061 ) 19,800 15,148 18,268 17,497 12,793 15,204
tax expense
(benefit)
Income tax
expense 7,739 9,528 12,730 10,235 7,516 (31,953 ) 6,003
(benefit)
Net (loss) $ (177,800 ) $ 10,272 $ 2,418 $ 8,033 $ 9,981 $ 44,746 $ 9,201
income
Basic net
(loss) income $ (6.48 ) $ 0.37 $ 0.09 $ 0.32 $ 0.43 $ 1.96 $ 0.40
per common
share
Diluted net
(loss) income $ (6.48 ) $ 0.37 $ 0.09 $ 0.32 $ 0.43 $ 1.93 $ 0.40
per common
share
Basic weighted
average common 27,459,068 27,474,156 27,474,156 25,348,440 23,134,072 22,858,573 22,856,951
shares
outstanding
Diluted
weighted
average common 27,459,068 27,600,976 27,602,296 25,444,277 23,479,796 23,200,736 23,194,360
shares
outstanding
Reconciliation
of operating
(loss) income
to EBITDA (b):
Operating $ (170,764 ) $ 18,926 $ 14,472 $ 18,099 $ 17,359 $ 12,807 $ 15,003
(loss) income
Add back:
depreciation, 12,513 11,674 11,075 11,750 11,270 11,174 10,689
amortization
and accretion
Add back:
goodwill 188,170 - - - - - -
impairment
EBITDA $ 29,919 $ 30,600 $ 25,547 $ 29,849 $ 28,629 $ 23,981 $ 25,692
% of total 31.6 % 33.2 % 28.9 % 35.4 % 35.9 % 31.9 % 37.0 %
revenues
(a) Slight variations in totals are due to rounding.
(b) EBITDA or earnings before interest, taxes, depreciation, amortization, accretion and goodwill impairment is a non-GAAP
measure and is presented for analytical purposes only.
USA MOBILITY, INC.
UNITS IN SERVICE ACTIVITY (a)
(unaudited and in thousands)
For the three months ended
3/31/08 6/30/08 9/30/08 12/31/08 3/31/09 6/30/09 9/30/09
Units in
service
Beginning
units in
service
Direct 2,854 2,732 2,614 2,491 2,349 2,198 2,079
one-way
Direct 221 207 196 184 171 157 147
two-way
Total 3,075 2,939 2,810 2,675 2,520 2,355 2,226
direct
Indirect 312 285 261 226 196 161 139
one-way
Indirect 98 109 105 101 99 91 84
two-way
Total 410 394 366 327 295 252 223
indirect
Total
beginning 3,485 3,333 3,176 3,002 2,815 2,607 2,449
units in
service
Gross
placements
Direct 77 90 76 61 67 74 64
one-way
Direct 8 11 8 7 6 7 9
two-way
Total 85 101 84 68 73 81 73
direct
Indirect 17 22 12 8 8 9 7
one-way
Indirect 16 7 7 6 4 2 1
two-way
Total 33 29 19 14 12 11 8
indirect
Total gross 118 130 103 82 85 92 81
placements
Gross
disconnects
Direct (199 ) (209 ) (199 ) (202 ) (218 ) (193 ) (174 )
one-way
Direct (22 ) (21 ) (20 ) (20 ) (20 ) (17 ) (15 )
two-way
Total (221 ) (230 ) (219 ) (222 ) (238 ) (210 ) (189 )
direct
Indirect (44 ) (47 ) (47 ) (39 ) (43 ) (31 ) (30 )
one-way
Indirect (5 ) (10 ) (11 ) (8 ) (12 ) (9 ) (14 )
two-way
Total (49 ) (57 ) (58 ) (47 ) (55 ) (40 ) (44 )
indirect
Total gross (270 ) (287 ) (277 ) (269 ) (293 ) (250 ) (233 )
disconnects
Net gain
(loss)
Direct (122 ) (119 ) (123 ) (142 ) (151 ) (119 ) (110 )
one-way
Direct (14 ) (10 ) (12 ) (12 ) (14 ) (10 ) (6 )
two-way
Total (136 ) (129 ) (135 ) (154 ) (165 ) (129 ) (116 )
direct
Indirect (27 ) (25 ) (35 ) (31 ) (35 ) (22 ) (23 )
one-way
Indirect 11 (3 ) (4 ) (2 ) (8 ) (7 ) (13 )
two-way
Total (16 ) (28 ) (39 ) (33 ) (43 ) (29 ) (36 )
indirect
Total net (152 ) (157 ) (174 ) (187 ) (208 ) (158 ) (152 )
change
Ending
units in
service
Direct 2,732 2,614 2,491 2,349 2,198 2,079 1,969
one-way
Direct 207 196 184 171 157 147 141
two-way
Total 2,939 2,810 2,675 2,520 2,355 2,226 2,110
direct
Indirect 285 261 226 196 161 139 116
one-way
Indirect 109 105 101 99 91 84 71
two-way
Total 394 366 327 295 252 223 187
indirect
Total
ending 3,333 3,176 3,002 2,815 2,607 2,449 2,297
units in
service
(a) Slight variations in totals are due to rounding.
USA MOBILITY, INC.
AVERAGE REVENUE PER UNIT (ARPU) AND CHURN (a)
(unaudited)
For the three months ended
3/31/08 6/30/08 9/30/08 12/31/08 3/31/09 6/30/09 9/30/09
ARPU
Direct $ 7.83 $ 7.85 $ 8.08 $ 8.09 $ 8.11 $ 8.18 $ 8.08
one-way
Direct 23.68 23.90 23.78 23.77 23.68 23.62 23.42
two-way
Total 8.95 8.97 9.16 9.16 9.15 9.21 9.10
direct
Indirect 4.10 4.57 4.79 5.12 7.05 7.43 7.51
one-way
Indirect 7.52 7.08 5.35 4.53 4.58 5.19 5.49
two-way
Total 4.97 5.28 4.96 4.93 6.19 6.60 6.74
indirect
Total 7.47 7.54 7.79 7.85 8.03 8.14 8.05
one-way
Total 18.44 18.07 17.29 16.84 16.66 16.86 17.09
two-way
Total
paging $ 8.49 $ 8.54 $ 8.69 $ 8.71 $ 8.86 $ 8.96 $ 8.89
ARPU
Gross
disconnect
rate (b)
Direct -7.0 % -7.6 % -7.6 % -8.1 % -9.3 % -8.8 % -8.4 %
one-way
Direct -10.2 % -10.4 % -10.2 % -10.6 % -11.8 % -11.0 % -10.2 %
two-way
Total -7.2 % -7.8 % -7.8 % -8.3 % -9.5 % -8.9 % -8.5 %
direct
Indirect -13.9 % -16.4 % -17.9 % -17.3 % -22.0 % -19.4 % -21.9 %
one-way
Indirect -5.3 % -8.8 % -10.3 % -7.7 % -11.6 % -9.1 % -16.4 %
two-way
Total -11.8 % -14.3 % -15.7 % -14.3 % -18.5 % -15.6 % -19.8 %
indirect
Total -7.7 % -8.5 % -8.6 % -8.9 % -10.3 % -9.5 % -9.2 %
one-way
Total -8.7 % -9.8 % -10.2 % -9.6 % -11.7 % -10.3 % -12.5 %
two-way
Total
paging
gross -7.7 % -8.6 % -8.7 % -9.0 % -10.4 % -9.6 % -9.5 %
disconnect
rate
Net gain /
loss rate
(c)
Direct -4.3 % -4.3 % -4.7 % -5.7 % -6.4 % -5.4 % -5.3 %
one-way
Direct -6.4 % -5.2 % -6.1 % -6.8 % -8.5 % -6.4 % -4.4 %
two-way
Total -4.4 % -4.4 % -4.8 % -5.8 % -6.6 % -5.5 % -5.2 %
direct
Indirect -8.5 % -8.6 % -13.2 % -13.7 % -17.8 % -13.7 % -16.9 %
one-way
Indirect 11.0 % -2.4 % -4.1 % -1.5 % -8.2 % -7.2 % -14.9 %
two-way
Total -3.9 % -6.9 % -10.6 % -10.0 % -14.6 % -11.3 % -16.1 %
indirect
Total -4.7 % -4.8 % -5.5 % -6.4 % -7.3 % -6.0 % -6.0 %
one-way
Total -1.1 % -4.2 % -5.4 % -4.9 % -8.4 % -6.7 % -8.2 %
two-way
Total
paging net -4.4 % -4.7 % -5.5 % -6.2 % -7.4 % -6.0 % -6.2 %
gain /
loss rate
(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.
SUPPLEMENTAL INFORMATION BY MARKET SEGMENT (a)
(unaudited)
For the three months ended
3/31/08 6/30/08 9/30/08 12/31/08 3/31/09 6/30/09 9/30/09
Gross
placement
rate (b)
Healthcare 3.3 % 4.8 % 3.8 % 3.0 % 3.7 % 4.4 % 3.8 %
Government 2.2 % 2.1 % 2.2 % 2.1 % 1.7 % 2.4 % 2.4 %
Large 2.4 % 2.3 % 2.2 % 2.1 % 2.4 % 2.2 % 3.3 %
enterprise
Other 2.5 % 2.6 % 2.4 % 2.2 % 2.4 % 2.5 % 2.3 %
Total 2.8 % 3.4 % 3.0 % 2.5 % 2.9 % 3.4 % 3.3 %
direct
Total 8.0 % 7.4 % 5.1 % 4.4 % 3.9 % 4.3 % 3.7 %
indirect
Total 3.4 % 3.9 % 3.2 % 2.7 % 3.0 % 3.5 % 3.3 %
Gross
disconnect
rate (b)
Healthcare -5.1 % -5.8 % -6.0 % -6.4 % -6.8 % -6.2 % -6.7 %
Government -6.7 % -8.5 % -8.5 % -9.3 % -9.9 % -10.7 % -10.7 %
Large -8.6 % -9.2 % -9.2 % -8.9 % -13.3 % -13.0 % -10.7 %
enterprise
Other -10.7 % -10.5 % -10.1 % -11.4 % -13.0 % -12.4 % -10.6 %
Total -7.2 % -7.8 % -7.8 % -8.3 % -9.5 % -8.9 % -8.5 %
direct
Total -11.8 % -14.3 % -15.7 % -14.3 % -18.5 % -15.6 % -19.8 %
indirect
Total -7.7 % -8.6 % -8.7 % -9.0 % -10.4 % -9.6 % -9.5 %
Net loss
rate (b)
Healthcare -1.7 % -0.9 % -2.1 % -3.4 % -3.1 % -1.8 % -2.9 %
Government -4.5 % -6.4 % -6.3 % -7.1 % -8.2 % -8.4 % -8.3 %
Large -6.2 % -6.9 % -7.0 % -6.8 % -10.9 % -10.9 % -7.4 %
enterprise
Other -8.2 % -7.9 % -7.8 % -9.2 % -10.6 % -10.0 % -8.3 %
Total -4.4 % -4.4 % -4.8 % -5.8 % -6.6 % -5.5 % -5.2 %
direct
Total -3.9 % -6.9 % -10.6 % -10.0 % -14.6 % -11.3 % -16.1 %
indirect
Total -4.4 % -4.7 % -5.5 % -6.2 % -7.4 % -6.0 % -6.2 %
End of
period
units in
service %
of total
(b)
Healthcare 38.3 % 40.0 % 41.5 % 42.8 % 44.9 % 49.8 % 51.5 %
Government 17.9 % 17.7 % 17.6 % 17.4 % 17.2 % 15.6 % 15.3 %
Large 13.1 % 12.8 % 12.6 % 12.5 % 12.0 % 11.8 % 11.8 %
enterprise
Other 18.9 % 18.0 % 17.4 % 16.8 % 16.2 % 13.7 % 13.2 %
Total 88.2 % 88.5 % 89.1 % 89.5 % 90.3 % 90.9 % 91.8 %
direct
Total 11.8 % 11.5 % 10.9 % 10.5 % 9.7 % 9.1 % 8.2 %
indirect
Total 100.0 % 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 rates.
USA MOBILITY, INC.
SUPPLEMENTAL INFORMATION - DIRECT UNITS IN SERVICE AND CELLULAR ACTIVATIONS (a)
(unaudited)
For the three months ended
3/31/08 6/30/08 9/30/08 12/31/08 3/31/09 6/30/09 9/30/09
Account
size ending
units in
service
(000's)
1 to 3 184 172 159 149 137 126 118
units
4 to 10 112 104 97 89 82 75 70
units
11 to 50 276 255 236 218 199 183 168
units
51 to 100 164 155 144 133 125 112 104
units
101 to 784 750 716 681 626 580 546
1,000 units
>1,000 1,419 1,374 1,323 1,250 1,186 1,150 1,104
units
Total 2,939 2,810 2,675 2,520 2,355 2,226 2,110
End of
period
units in
service %
of total
direct
1 to 3 6.2 % 6.1 % 5.9 % 5.9 % 5.8 % 5.7 % 5.6 %
units
4 to 10 3.8 % 3.7 % 3.6 % 3.5 % 3.5 % 3.4 % 3.3 %
units
11 to 50 9.4 % 9.1 % 8.8 % 8.7 % 8.4 % 8.2 % 8.0 %
units
51 to 100 5.6 % 5.5 % 5.4 % 5.3 % 5.3 % 5.0 % 4.9 %
units
101 to 26.7 % 26.7 % 26.8 % 27.0 % 26.6 % 26.0 % 25.9 %
1,000 units
>1,000 48.3 % 48.9 % 49.5 % 49.6 % 50.4 % 51.7 % 52.3 %
units
Total 100.0 % 100.0 % 100.0 % 100.0 % 100.0 % 100.0 % 100.0 %
Account
size net
loss rate
1 to 3 -7.8 % -6.9 % -7.0 % -6.9 % -7.8 % -7.9 % -6.9 %
units
4 to 10 -6.5 % -7.2 % -6.7 % -7.8 % -8.8 % -7.9 % -6.7 %
units
11 to 50 -7.6 % -7.4 % -7.4 % -7.6 % -8.9 % -8.2 % -7.7 %
units
51 to 100 -6.9 % -5.5 % -7.5 % -7.2 % -6.2 % -10.1 % -7.6 %
units
101 to -5.2 % -4.3 % -4.6 % -4.9 % -8.0 % -7.4 % -5.9 %
1,000 units
>1,000 -2.4 % -3.2 % -3.7 % -5.5 % -5.1 % -3.1 % -4.0 %
units
Total -4.4 % -4.4 % -4.8 % -5.8 % -6.6 % -5.5 % -5.2 %
Account
size ARPU
1 to 3 $ 14.66 $ 14.62 $ 14.72 $ 14.68 $ 14.73 $ 15.07 $ 14.98
units
4 to 10 13.56 13.56 13.92 13.89 14.00 14.30 14.24
units
11 to 50 10.99 11.03 11.40 11.35 11.41 11.65 11.54
units
51 to 100 9.57 9.76 10.36 10.25 10.30 10.13 10.06
units
101 to 8.23 8.45 8.91 8.98 8.94 9.04 8.89
1,000 units
>1,000 7.75 7.70 7.72 7.75 7.77 7.80 7.76
units
Total $ 8.95 $ 8.97 $ 9.16 $ 9.16 $ 9.15 $ 9.21 $ 9.10
Cellular
revenue
Number of 4,509 3,970 3,779 2,287 2,389 2,207 2,633
activations
Revenue
from
cellular $ 1,859 $ 1,547 $ 1,494 $ 993 $ 991 $ 775 $ 980
services
(000's)
(a) Slight variations in totals are due to rounding.
USA MOBILITY, INC.
CONSOLIDATED OPERATING EXPENSES SUPPLEMENTAL INFORMATION (a)
(unaudited and in thousands)
For the three months ended
3/31/08 6/30/08 9/30/08 12/31/08 3/31/09 6/30/09 9/30/09
Cost of products $ 1,081 $ 1,408 $ 1,291 $ 1,812 $ 1,669 $ 1,421 $ 1,593
sold
Service, rental
and maintenance
Site rent 17,792 16,756 15,463 14,785 11,218 10,223 10,422
Telecommunications 6,204 5,503 5,072 5,307 4,485 4,284 3,945
Payroll and 6,683 6,504 5,827 5,490 5,631 5,286 4,988
related
Stock based 17 19 19 18 49 7 13
compensation
Other 3,273 2,801 2,688 2,599 1,572 1,490 1,582
Total service,
rental and 33,969 31,583 29,069 28,199 22,955 21,290 20,950
maintenance
Selling and
marketing
Payroll and 5,164 4,797 4,317 4,145 4,175 3,711 3,366
related
Commissions 1,724 2,037 1,742 1,213 1,201 1,422 1,328
Stock based 39 50 49 60 109 26 26
compensation
Other 909 665 648 726 577 441 478
Total selling and 7,836 7,549 6,756 6,144 6,062 5,600 5,198
marketing
General and
administrative
Payroll and 8,682 8,129 7,847 7,992 9,075 7,754 7,213
related
Stock based 190 247 253 298 569 241 241
compensation
Bad debt 711 691 680 618 850 750 699
Facility rent 2,073 2,199 1,937 1,689 1,628 1,446 1,457
Telecommunications 1,048 983 936 834 771 721 720
Outside services 5,359 4,584 4,632 4,519 4,514 4,063 3,269
Taxes, licenses 1,958 2,055 2,216 372 1,101 1,695 (680 )
and permits
Other 1,787 1,894 2,130 1,967 1,678 6,131 3,131
Total general and 21,808 20,782 20,631 18,289 20,186 22,801 16,050
administrative
Severance and 145 153 5,063 (35 ) 190 52 15
restructuring
Depreciation,
amortization and 12,513 11,674 11,075 11,750 11,270 11,174 10,689
accretion
Goodwill 188,170 - - - - - -
impairment
Operating expenses $ 265,522 $ 73,149 $ 73,885 $ 66,159 $ 62,332 $ 62,338 $ 54,495
Capital $ 3,988 $ 3,892 $ 6,214 $ 4,242 $ 6,054 $ 4,355 $ 1,806
expenditures
(a) Slight variations in totals are due to rounding.
USA MOBILITY, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (a)
(in thousands)
12/31/08 9/30/09
(unaudited)
Assets
Current assets:
Cash and cash equivalents $ 75,032 $ 95,692
Accounts receivable, net 25,118 20,356
Tax receivables - 4,411
Prepaid expenses and other 6,226 3,033
Deferred income tax assets, net 6,025 1,171
Total current assets 112,401 124,663
Property and equipment, net 57,867 44,123
Intangible assets, net 6,520 1,442
Deferred income tax assets, net 59,599 41,564
Other assets 4,973 3,228
Total assets $ 241,360 $ 215,020
Liabilities and stockholders' equity
Current liabilities:
Accounts payable and accrued liabilities $ 40,983 $ 32,586
Customer deposits 1,203 951
Deferred revenue 9,958 8,153
Total current liabilities 52,144 41,690
Other long-term liabilities 48,478 11,509
Total liabilities 100,622 53,199
Stockholders' equity:
Preferred stock - -
Common stock 2 2
Additional paid-in capital 140,736 138,299
Retained earnings - 23,520
Total stockholders' equity 140,738 161,821
Total liabilities and stockholders' equity $ 241,360 $ 215,020
(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 nine months ended
9/30/08 9/30/09
Cash flows from
operating activities:
Net (loss) income $ (165,110 ) $ 63,928
Adjustments to reconcile net (loss) income to net
cash provided by operating activities:
Depreciation, amortization and accretion 35,262 33,133
Goodwill impairment 188,170 -
Deferred income tax 27,871 22,889
expense
Amortization of stock based 884 1,281
compensation
Provisions for doubtful accounts, service 4,566 3,559
credits and other
Non-cash transaction tax accrual (1,717 ) (4,879 )
adjustments
(Gain) Loss on disposals of property and (18 ) 138
equipment
Changes in assets and
liabilities:
Accounts receivable (2,388 ) 1,203
Prepaid expenses and 2,501 (1,374 )
other
Intangibles and other long-term assets 2,498 461
Accounts payable and accrued liabilities (6,769 ) (4,403 )
Customer deposits and deferred revenue (1,279 ) (2,057 )
Other long-term - (37,654 )
liabilities
Net cash provided by operating activities $ 84,471 $ 76,225
Cash flows from
investing activities:
Purchases of property and (14,094 ) (12,215 )
equipment
Proceeds from disposals of 176 30
property and equipment
Net cash used in investing $ (13,918 ) $ (12,185 )
activities
Cash flows from financing activities:
Cash distributions to stockholders (31,367 ) (39,843 )
Purchase of common stock - (3,537 )
Net cash used in financing activities $ (31,367 ) $ (43,380 )
Net increase (decrease) in cash and cash 39,186 20,660
equivalents
Cash and cash equivalents, beginning of 64,542 75,032
period
Cash and cash equivalents, end of period $ 103,728 $ 95,692
Supplemental
disclosure:
Interest paid $ 3 $ 1
Income taxes paid (state and local) $ 413 $ 437
(a) Slight variations in totals are due to rounding.
Source: USA Mobility, Inc.
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