Exhibit 99.1
FOR IMMEDIATE RELEASE | CONTACT: | Bob Lougee (800) 611-8488 | ||||
| Monday, March 10, 2014 | bob.lougee@usamobility.com | |||||
USA Mobility Reports Fourth Quarter and 2013 Operating Results
Wireless Subscriber and Revenue Trends Continue to Improve;
Software Revenue, Bookings and Backlog Remain Strong
Springfield, VA (March 10, 2014) - USA Mobility, Inc. (Nasdaq: USMO), a leading provider of wireless messaging, mobile voice and data and unified communications software solutions, today announced operating results for the fourth quarter and year-ended December 31, 2013.
For the fourth quarter, consolidated revenue was $54.7 million, compared to $51.9 million in the fourth quarter of 2012 and $49.7 million in the third quarter of 2013. Revenue from the Company’s Wireless business was $35.8 million in the fourth quarter, compared to $39.9 million in the fourth quarter of 2012 and $37.1 million in the third quarter of 2013. Revenue from the Software business was $18.9 million in the fourth quarter, compared to $12.0 million in the year-earlier quarter and $12.6 million in the third quarter of 2013.
Fourth quarter EBITDA (earnings before interest, taxes, depreciation, amortization, accretion and impairment) was $16.0 million, or 29.2 percent of revenue, compared to $12.4 million, or 23.9 percent of revenue, in the fourth quarter of 2012 and $13.4 million, or 27.0 percent of revenue, in the third quarter of 2013.
Net income for the fourth quarter of 2013 was $8.0 million, or $0.36 per fully diluted share, compared to $2.0 million, or $0.09 per fully diluted share, in the year-earlier quarter and $5.8 million, or $0.26 per fully diluted share, in the third quarter of 2013.
For the full-year 2013, consolidated revenue was $209.8 million, compared to $219.7 million in 2012. Of the total, Wireless revenue was $149.5 million and Software revenue was $60.3 million, compared to $168.4 million and $51.3 million, respectively, for 2012. Software revenue increased 17.6 percent from 2012.
EBITDA for 2013 was $60.7 million, or 28.9 percent of revenue, compared to $67.3 million, or 30.7 percent of revenue, for 2012.
Net income for 2013 was $27.5 million, or $1.25 per fully diluted share, compared to a net income of $27.0 million, or $1.20 per fully diluted share, for 2012.
Key results and highlights for the fourth quarter and 2013 included:
Wireless
| • | The annual rate of revenue erosion again improved to an all-time low of 10.2 percent in the fourth quarter, compared to 10.6 percent in the third quarter and 14.2 percent in the year-earlier quarter. The rate of Wireless revenue erosion in the fourth quarter was 3.3 percent, compared to 1.9 percent in the third quarter and 3.7 percent in the year-earlier quarter. The year-over-year rate of paging revenue erosion improved to a record low 10.7 percent in 2013 from 13.3 percent in 2012. |
| • | Net unit losses were 32,000 in the fourth quarter, compared to 37,000 in the third quarter of 2013, while the quarterly rate of unit erosion was 2.2 percent in the fourth quarter versus 2.6 percent in the prior quarter. The annual rate of unit erosion remained consistent at 9.2 percent in the fourth quarter when compared to the year-ago quarter. Units in service at December 31, 2013 totaled 1,376,000 compared to 1,515,000 at December 31, 2012. |
| • | Fourth quarter EBITDA for Wireless was $12.2 million, or 34.0 percent of revenue, compared to $14.0 million, or 35.0 percent of revenue, in the fourth quarter of 2012 and $13.8 million, or 37.3 percent of revenue, in the third quarter of 2013. |
| • | Total ARPU (average revenue per unit) was $8.15 in the fourth quarter, compared to $8.22 in the third quarter and $8.29 in the fourth quarter of 2012. For the year, ARPU totaled $8.20, compared to $8.37 in 2012. |
Software
| • | Bookings for the fourth quarter were $16.3 million, compared to $17.3 million in the third quarter and $18.1 million in the year-earlier quarter. For 2013, bookings reached a record high of $63.5 million. |
| • | Backlog totaled $40.2 million at December 31, 2013, compared to $43.8 million at September 30, 2013, and $40.6 million at year-end 2012. |
| • | Of the $18.9 million in Software revenue for the fourth quarter, $11.8 million was operations revenue and $7.1 million was maintenance revenue, compared to $5.5 million and $6.5 million, respectively, of the $12.0 million in Software revenue for the fourth quarter of 2012. |
| • | The renewal rate for maintenance in the fourth quarter was 99.1 percent. |
Total Company
| • | Consolidated revenue of $209.8 million in 2013 declined 4.5 percent from the prior year compared to 6.0 percent in 2012. |
| • | Operating expenses (excluding depreciation, amortization, accretion and impairment) totaled $38.7 million in the fourth quarter, with $23.6 million for Wireless and $15.1 million for Software, compared to operating expenses of $39.5 million in the year-earlier quarter, with $26.0 million for Wireless and $13.5 million for Software. For 2013, operating expenses were $149.1 million, including $94.8 million for Wireless and $54.3 million for Software, compared to $152.4 million in 2012, including $103.9 million for Wireless and $48.5 million for Software. |
| • | Capital expenses were $2.6 million in the fourth quarter, compared to $2.9 million in the year-earlier quarter. For 2013, capital expenses totaled $10.4 million, compared to $10.0 million in 2012. |
| • | Dividends paid to stockholders totaled $12.3 million in 2013. |
| • | The Company’s cash balance was $89.1 million at December 31, 2013. |
| • | The number of full-time equivalent employees at December 31, 2013 totaled 631, including 341 for Wireless and 290 for Software, compared to a total of 665 at year-end 2012, including 378 for Wireless and 287 for Software. |
“We were very pleased with our operating performance for the fourth quarter and full-year 2013,” said Vincent D. Kelly, president and chief executive officer. “We again met or exceeded our targets in most key operating categories. Both our Wireless and Software operations achieved excellent results, benefiting in part from growing demand for enterprise-wide solutions that combine both Wireless and Software products and services. Overall, we operated profitably, maintained solid operating margins, reduced expenses, enhanced products and services, and expanded our Software business into new markets. We also generated sufficient cash to again return capital to stockholders in the form of cash dividends.”
During the quarter the Wireless business continued to pursue sales opportunities largely within its core market segments of Healthcare, Government and Large Enterprise. “Healthcare represented 75.2 percent of our direct paging subscriber base at December 31st and 70.1 percent of direct paging revenue in the fourth quarter, compared to 71.5 percent and 66.0 percent, respectively, a year earlier,” Kelly noted, “and it continued to be our best performing market segment with the highest number of gross placements and lowest rate of unit churn. Over time we expect Healthcare accounts to continue to increase as a percentage of our total subscriber base."
Kelly said the Company’s Software business also turned in a strong quarter and excellent performance in 2013. “Software revenues increased 17.6 percent in 2013 from the prior year while bookings and backlog reached record highs during the year. Additionally,” he noted, “fourth quarter revenue increased 57.5 percent from the year-earlier quarter, while bookings remained strong and the backlog totaled $40.2 million at yearend.”
Kelly credited the positive Software results to the Company’s continued investment in sales and marketing resources, additions to the product development pipeline, and expansion into new geographic markets. He added: “During 2013 demand for Software solutions continued to be strongest in North American hospitals where we sold solutions for call center management, clinical alerting middleware, secure texting, mobile communication solutions, and emergency notification. In addition, we again expanded our sales focus internationally, specifically in the Asia-Pacific and EMEA countries (Europe, Middle East and Africa). We also experienced growing demand among public safety organizations with a number of military and municipal 911 emergency response centers choosing our Software dispatch solution. As a result, we ended the year with a solid pipeline of new business opportunities and believe our Software business is well-positioned for further growth in 2014.”
The Company also completed the integration of its two operating subsidiaries. “As of January 1, 2014, USA Mobility Wireless and Amcom Software began operating as one unified company,” Kelly said. “Although we’ve been gradually integrating various functions within the two companies over the past year, we believe this final integration of sales, marketing and operations not only creates significant efficiencies but allows us to better serve all our customers, many of whom are increasingly asking us to be their one source provider of their unified communications needs.”
Kelly said the consolidation also resulted in several key management changes. Among them, Colin Balmforth, previously president of Amcom, was named president of the newly combined operating company, USA Mobility Wireless, Inc., while Jim Boso, former president of the Wireless subsidiary, moved to the role of consultant and will focus on global sales and related corporate development activities. Kelly added: “We believe this integration is another important step as USA Mobility continues its transition to a unified communications company.”
Kelly also noted that USA Mobility returned capital to stockholders during 2013 in the form of quarterly cash dividends totaling $12.3 million, or $0.50 per share. “Over the past nine years,” he said, “we have now returned $417.6 million to our stockholders in the form of cash distributions.”
Shawn E. Endsley, chief financial officer, said excellent performances by both the Wireless and Software businesses in 2013 helped strengthen the Company’s balance sheet at yearend. “Improved rates of revenue erosion and subscriber churn plus a stable ARPU helped drive strong EBITDA in our Wireless business,” he noted, “while year-over-year Software bookings and backlog continued to improve. In addition, we continued to reduce operating expenses in our Wireless business while investing in our Software business. Consolidated operating expenses (excluding depreciation, amortization, accretion and impairment) for Wireless declined 8.8 percent to $94.8 million in 2013 from $103.9 million in 2012. The net result was a consolidated cash balance of $89.1 million at December 31st. Moreover,” Endsley added, “we continued to operate as a debt-free company in 2013 and currently have approximately $40 million in available borrowing capacity through our credit facility.”
Endsley also noted that the process of remediating the previously identified material weakness in the design of internal control over financial reporting relating to software revenue recognition processes was completed in the fourth quarter.
Commenting on the Company’s previously provided financial guidance, Endsley said: “We are pleased that 2013 results were consistent with our guidance. For the year, total reported revenue of $209.8 million was within our guidance range of $195 million to $213 million, operating expenses (excluding depreciation, amortization and accretion) of $149.1 million were slightly better than our guidance range of $150 million to $152 million, and capital expenses of $10.4 million were slightly above our guidance range of $8.1 million to $9.7 million.” Regarding financial guidance for 2014, Endsley said the Company expects total revenue to range from $183 million to $201 million, operating expenses (excluding depreciation, amortization and accretion) to range from $147 million to $156 million, and capital expenses to range from $7 million to $9 million.
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* * * * * * * * *
USA Mobility plans to host a conference call for investors on its fourth quarter and 2013 operating results at 9:00 a.m. Eastern Time on Tuesday, March 11, 2014. Dial-in numbers for the call are 719-325-2469 or 888-437-9445. The pass code for the call is 2669919. A replay of the call will be available from 1:00 p.m. ET on March 11 until 1:00 p.m. on Tuesday, March 25. Replay numbers are 719-457-0820 or 888-203-1112. The pass code for the replay is 2669919.
* * * * * * * * *
About USA Mobility
USAMobility, Inc., headquartered in Springfield, Virginia, is a comprehensive provider of integrated wireless and software communications solutions. As a single-source provider, the Company operates the largest one-way paging and advanced two-way paging networks in the United States, providing wireless connectivity solutions to the healthcare, government, large enterprise and emergency response sectors. It also offers mobile voice and data services through Sprint Nextel and T-Mobile, including BlackBerry® smartphones and GPS location applications. In addition, USA Mobility provides mission critical unified communications solutions software nationally and internationally to healthcare, hospitality, education, business and government organizations, connecting people to each other and the data they need. Software solutions include critical smartphone communications, contact center optimization, emergency management and clinical workflow improvement. 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, continued demand for our software products and services, our ability to develop additional software solutions for our customers, 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, competition from other software providers, 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 STATEMENTS OF INCOME (a)
(Unaudited and in thousands except share, per share amounts and ARPU)
| For the three months ended December 31, | ||||||||||||||||||||||||
| 2013 | 2012 | |||||||||||||||||||||||
| Wireless | Software | Total | Wireless | Software | Total | |||||||||||||||||||
| Revenue: | ||||||||||||||||||||||||
| Paging service | $ | 34,015 | $ | — | $ | 34,015 | $ | 38,081 | $ | — | $ | 38,081 | ||||||||||||
| Cellular | 129 | — | 129 | 275 | — | 275 | ||||||||||||||||||
| Software revenue and other (b) | 1,521 | 18,854 | 20,375 | 1,414 | 11,967 | 13,381 | ||||||||||||||||||
| Other | 166 | — | 166 | 147 | — | 147 | ||||||||||||||||||
| Total revenue | 35,831 | 18,854 | 54,685 | 39,917 | 11,967 | 51,884 | ||||||||||||||||||
| Operating expenses: | ||||||||||||||||||||||||
| Cost of revenue (b) | 166 | 5,933 | 6,099 | 177 | 5,532 | 5,709 | ||||||||||||||||||
| Service, rental and maintenance (b) | 9,796 | 2,437 | 12,233 | 11,052 | 2,447 | 13,499 | ||||||||||||||||||
| Selling and marketing | 2,183 | 5,103 | 7,286 | 2,727 | 3,303 | 6,030 | ||||||||||||||||||
| General and administrative | 10,528 | 1,563 | 12,091 | 10,820 | 1,731 | 12,551 | ||||||||||||||||||
| Severance and restructuring | 967 | 14 | 981 | 1,188 | 524 | 1,712 | ||||||||||||||||||
| Depreciation, amortization and accretion | 2,321 | 1,359 | 3,680 | 2,554 | 1,833 | 4,387 | ||||||||||||||||||
| Impairment | — | — | — | — | 3,382 | 3,382 | ||||||||||||||||||
| Total operating expenses | 25,961 | 16,409 | 42,370 | 28,518 | 18,752 | 47,270 | ||||||||||||||||||
| % of total revenue | 72.5 | % | 87.0 | % | 77.5 | % | 71.4 | % | 156.7 | % | 91.1 | % | ||||||||||||
| Operating income (loss) | 9,870 | 2,445 | 12,315 | 11,399 | (6,785 | ) | 4,614 | |||||||||||||||||
| % of total revenue | 27.5 | % | 13.0 | % | 22.5 | % | 28.6 | % | (56.7 | )% | 8.9 | % | ||||||||||||
| Interest expense, net | (63 | ) | (1 | ) | (64 | ) | (61 | ) | (1 | ) | (62 | ) | ||||||||||||
| Other income (expense), net | 105 | (90 | ) | 15 | 164 | 125 | 289 | |||||||||||||||||
| Income (loss) before income tax (expense) benefit | 9,912 | 2,354 | 12,266 | 11,502 | (6,661 | ) | 4,841 | |||||||||||||||||
| Income tax (expense) benefit | (4,503 | ) | 252 | (4,251 | ) | (4,972 | ) | 2,158 | (2,814 | ) | ||||||||||||||
| Net income (loss) | $ | 5,409 | $ | 2,606 | $ | 8,015 | $ | 6,530 | $ | (4,503 | ) | $ | 2,027 | |||||||||||
| Basic net income per common share | $ | 0.37 | $ | 0.09 | ||||||||||||||||||||
| Diluted net income per common share | $ | 0.36 | $ | 0.09 | ||||||||||||||||||||
| Basic weighted average common shares outstanding | 21,633,706 | 21,492,792 | ||||||||||||||||||||||
| Diluted weighted average common shares outstanding | 21,969,756 | 21,991,673 | ||||||||||||||||||||||
| Reconciliation of operating income (loss) to EBITDA (c): | ||||||||||||||||||||||||
| Operating income (loss) | $ | 9,870 | $ | 2,445 | $ | 12,315 | $ | 11,399 | $ | (6,785 | ) | $ | 4,614 | |||||||||||
| Add back: depreciation, amortization, accretion and impairment | 2,321 | 1,359 | 3,680 | 2,554 | 5,215 | 7,769 | ||||||||||||||||||
| EBITDA | $ | 12,191 | $ | 3,804 | $ | 15,995 | $ | 13,953 | $ | (1,570 | ) | $ | 12,383 | |||||||||||
| % of total revenue | 34.0 | % | 20.2 | % | 29.2 | % | 35.0 | % | (13.1 | )% | 23.9 | % | ||||||||||||
| Key statistics: | ||||||||||||||||||||||||
| Units in service | 1,376 | — | 1,376 | 1,515 | — | 1,515 | ||||||||||||||||||
| Average revenue per unit (ARPU) | $ | 8.15 | $ | — | $ | 8.15 | $ | 8.29 | $ | — | $ | 8.29 | ||||||||||||
| Bookings | $ | — | $ | 16,271 | $ | 16,271 | $ | — | $ | 18,129 | $ | 18,129 | ||||||||||||
| Backlog | $ | — | $ | 40,211 | $ | 40,211 | $ | — | $ | 40,626 | $ | 40,626 | ||||||||||||
| (a) | Slight variations in totals are due to rounding. |
| (b) | Wireless results reflect eliminations for intercompany revenue and expenses. |
| (c) | EBITDA or earnings before interest, taxes, depreciation, amortization and accretion is a non-GAAP measure and is presented for analytical purposes only. |
USA MOBILITY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (a)
(In thousands except share, per share amounts and ARPU)
| For the twelve months ended December 31, | ||||||||||||||||||||||||
| 2013 | 2012 | |||||||||||||||||||||||
| Wireless | Software | Total | Wireless | Software | Total | |||||||||||||||||||
| Revenue: | ||||||||||||||||||||||||
| Paging service | $ | 142,271 | $ | — | $ | 142,271 | $ | 159,739 | $ | — | $ | 159,739 | ||||||||||||
| Cellular | 722 | — | 722 | 1,152 | — | 1,152 | ||||||||||||||||||
| Software revenue and other (b) | 5,820 | 60,304 | 66,124 | 6,515 | 51,291 | 57,806 | ||||||||||||||||||
| Other | 635 | — | 635 | 999 | — | 999 | ||||||||||||||||||
| Total revenue | 149,448 | 60,304 | 209,752 | 168,405 | 51,291 | 219,696 | ||||||||||||||||||
| Operating expenses: | ||||||||||||||||||||||||
| Cost of revenue (b) | 493 | 21,633 | 22,126 | 693 | 20,153 | 20,846 | ||||||||||||||||||
| Service, rental and maintenance (b) | 41,470 | 9,169 | 50,639 | 45,789 | 9,636 | 55,425 | ||||||||||||||||||
| Selling and marketing | 9,572 | 16,512 | 26,084 | 11,521 | 12,124 | 23,645 | ||||||||||||||||||
| General and administrative | 42,281 | 6,978 | 49,259 | 44,689 | 5,991 | 50,680 | ||||||||||||||||||
| Severance and restructuring | 969 | 14 | 983 | 1,197 | 561 | 1,758 | ||||||||||||||||||
| Depreciation, amortization and accretion | 9,534 | 5,633 | 15,167 | 11,167 | 7,065 | 18,232 | ||||||||||||||||||
| Impairment | — | — | — | — | 3,382 | 3,382 | ||||||||||||||||||
| Total operating expenses | 104,319 | 59,939 | 164,258 | 115,056 | 58,912 | 173,968 | ||||||||||||||||||
| % of total revenue | 69.8 | % | 99.4 | % | 78.3 | % | 68.3 | % | 114.9 | % | 79.2 | % | ||||||||||||
| Operating income (loss) | 45,129 | 365 | 45,494 | 53,349 | (7,621 | ) | 45,728 | |||||||||||||||||
| % of total revenue | 30.2 | % | 0.6 | % | 21.7 | % | 31.7 | % | (14.9 | )% | 20.8 | % | ||||||||||||
| Interest expense, net | (255 | ) | (5 | ) | (260 | ) | (379 | ) | (1 | ) | (380 | ) | ||||||||||||
| Other income (expense), net | 201 | (96 | ) | 105 | 625 | 90 | 715 | |||||||||||||||||
| Income (loss) before income tax (expense) benefit | 45,075 | 264 | 45,339 | 53,595 | (7,532 | ) | 46,063 | |||||||||||||||||
| Income tax (expense) benefit | (18,809 | ) | 1,000 | (17,809 | ) | (21,555 | ) | 2,476 | (19,079 | ) | ||||||||||||||
| Net income (loss) | $ | 26,266 | $ | 1,264 | $ | 27,530 | $ | 32,040 | $ | (5,056 | ) | $ | 26,984 | |||||||||||
| Basic net income per common share | $ | 1.27 | $ | 1.23 | ||||||||||||||||||||
| Diluted net income per common share | $ | 1.25 | $ | 1.20 | ||||||||||||||||||||
| Basic weighted average common shares outstanding | 21,648,654 | 21,924,748 | ||||||||||||||||||||||
| Diluted weighted average common shares outstanding | 22,010,523 | 22,397,587 | ||||||||||||||||||||||
| Reconciliation of operating income (loss) to EBITDA (c): | ||||||||||||||||||||||||
| Operating income (loss) | $ | 45,129 | $ | 365 | $ | 45,494 | $ | 53,349 | $ | (7,621 | ) | $ | 45,728 | |||||||||||
| Add back: depreciation, amortization, accretion and impairment | 9,534 | 5,633 | 15,167 | 11,167 | 10,447 | 21,614 | ||||||||||||||||||
| EBITDA | $ | 54,663 | $ | 5,998 | $ | 60,661 | $ | 64,516 | $ | 2,826 | $ | 67,342 | ||||||||||||
| % of total revenue | 36.6 | % | 9.9 | % | 28.9 | % | 38.3 | % | 5.5 | % | 30.7 | % | ||||||||||||
| Key statistics: | ||||||||||||||||||||||||
| Units in service | 1,376 | — | 1,376 | 1,515 | — | 1,515 | ||||||||||||||||||
| Average revenue per unit (ARPU) | $ | 8.20 | $ | — | $ | 8.20 | $ | 8.37 | $ | — | $ | 8.37 | ||||||||||||
| Bookings | $ | — | $ | 63,452 | $ | 63,452 | $ | — | $ | 61,301 | $ | 61,301 | ||||||||||||
| Backlog | $ | — | $ | 40,211 | $ | 40,211 | $ | — | $ | 40,626 | $ | 40,626 | ||||||||||||
| (a) | Slight variations in totals are due to rounding. |
| (b) | Wireless results reflect eliminations for intercompany revenue and expenses. |
| (c) | EBITDA or earnings before interest, taxes, depreciation, amortization and accretion is a non-GAAP measure and is presented for analytical purposes only. |
USA MOBILITY, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (a)
(In thousands)
| 12/31/2013 | 12/31/2012 | |||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 89,075 | $ | 61,046 | ||||
| Accounts receivable, net | 18,084 | 21,580 | ||||||
| Prepaid expenses and other | 7,399 | 5,836 | ||||||
| Inventory | 2,221 | 3,257 | ||||||
| Escrow receivables | — | 275 | ||||||
| Deferred income tax assets, net | 3,389 | 3,915 | ||||||
| Total current assets | 120,168 | 95,909 | ||||||
| Property and equipment, net | 21,122 | 20,809 | ||||||
| Goodwill | 133,031 | 133,031 | ||||||
| Other intangible assets, net | 25,368 | 30,333 | ||||||
| Deferred income tax assets, net | 25,494 | 41,239 | ||||||
| Other assets | 1,715 | 1,306 | ||||||
| Total assets | $ | 326,898 | $ | 322,627 | ||||
| Liabilities and stockholders' equity | ||||||||
| Current liabilities: | ||||||||
| Accounts payable and accrued liabilities | $ | 9,885 | $ | 12,659 | ||||
| Accrued compensation and benefits | 13,919 | 17,806 | ||||||
| Consideration payable | — | 275 | ||||||
| Deferred revenue | 23,023 | 29,986 | ||||||
| Total current liabilities | 46,827 | 60,726 | ||||||
| Deferred revenue | 862 | 693 | ||||||
| Other long-term liabilities | 9,259 | 9,789 | ||||||
| Total liabilities | 56,948 | 71,208 | ||||||
| Commitments and contingencies | ||||||||
| Stockholders' equity: | ||||||||
| Preferred stock | — | — | ||||||
| Common stock | 2 | 2 | ||||||
| Additional paid-in capital | 127,264 | 125,212 | ||||||
| Retained earnings | 142,684 | 126,205 | ||||||
| Total stockholders' equity | 269,950 | 251,419 | ||||||
| Total liabilities and stockholders' equity | $ | 326,898 | $ | 322,627 | ||||
| (a) | Slight variations in totals are due to rounding. |
USA MOBILITY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (a)
(In thousands)
| For the twelve months ended | ||||||||
| 12/31/2013 | 12/31/2012 | |||||||
| Cash flows from operating activities: | ||||||||
| Net income | $ | 27,530 | $ | 26,984 | ||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
| Depreciation, amortization and accretion | 15,167 | 18,232 | ||||||
| Impairment | — | 3,382 | ||||||
| Amortization of deferred financing costs | 258 | 259 | ||||||
| Deferred income tax expense | 16,276 | 18,040 | ||||||
| Amortization of stock based compensation | 3,045 | 1,224 | ||||||
| Provisions for doubtful accounts, service credits and other | 1,955 | 1,962 | ||||||
| Adjustments of non-cash transaction taxes | (474 | ) | (480 | ) | ||||
| Loss/(Gain) on disposals of property and equipment | 21 | (160 | ) | |||||
| Changes in assets and liabilities: | ||||||||
| Accounts receivable | 1,542 | (3,008 | ) | |||||
| Prepaid expenses and other assets | (1,215 | ) | (318 | ) | ||||
| Accounts payable, accrued liabilities and accrued compensation and benefits | (6,855 | ) | 2,375 | |||||
| Deferred revenue | (6,794 | ) | 4,385 | |||||
| Net cash provided by operating activities | 50,456 | 72,877 | ||||||
| Cash flows from investing activities: | ||||||||
| Purchases of property and equipment | (10,408 | ) | (9,989 | ) | ||||
| Proceeds from disposals of property and equipment | 293 | 330 | ||||||
| Acquisitions, net of cash acquired | — | (3,000 | ) | |||||
| Net cash used in investing activities | (10,115 | ) | (12,659 | ) | ||||
| Cash flows from financing activities: | ||||||||
| Repayment of debt | — | (28,250 | ) | |||||
| Cash dividends to stockholders | (12,312 | ) | (16,512 | ) | ||||
| Purchase of common stock | — | (8,065 | ) | |||||
| Net cash used in financing activities | (12,312 | ) | (52,827 | ) | ||||
| Net increase in cash and cash equivalents | 28,029 | 7,391 | ||||||
| Cash and cash equivalents, beginning of period | 61,046 | 53,655 | ||||||
| Cash and cash equivalents, end of period | $ | 89,075 | $ | 61,046 | ||||
| Supplemental disclosure: | ||||||||
| Interest paid | $ | 10 | $ | 288 | ||||
| Income taxes paid | $ | 1,474 | $ | 1,606 | ||||
| (a) | Slight variations in totals are due to rounding. |
USA MOBILITY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (a)
(Unaudited and in thousands except share, per share amounts and ARPU)
| For the three months ended | ||||||||||||||||||||||||||||||||
| 12/31/2013 | 9/30/2013 | 6/30/2013 | 3/31/2013 | 12/31/2012 | 9/30/2012 | 6/30/2012 | 3/31/2012 | |||||||||||||||||||||||||
| Revenues: | ||||||||||||||||||||||||||||||||
| Paging service | $ | 34,015 | $ | 35,141 | $ | 36,064 | $ | 37,051 | $ | 38,081 | $ | 39,235 | $ | 40,548 | $ | 41,875 | ||||||||||||||||
| Cellular | 129 | 235 | 163 | 195 | 275 | 314 | 286 | 277 | ||||||||||||||||||||||||
| Software revenue and other | 20,375 | 14,128 | 15,898 | 15,723 | 13,381 | 15,321 | 14,847 | 14,257 | ||||||||||||||||||||||||
| Other | 166 | 165 | 143 | 161 | 147 | 246 | 280 | 326 | ||||||||||||||||||||||||
| Total revenues | 54,685 | 49,669 | 52,268 | 53,130 | 51,884 | 55,116 | 55,961 | 56,735 | ||||||||||||||||||||||||
| Operating expenses: | ||||||||||||||||||||||||||||||||
| Cost of revenue | 6,099 | 5,359 | 5,485 | 5,183 | 5,709 | 5,105 | 5,216 | 4,816 | ||||||||||||||||||||||||
| Service, rental and maintenance | 12,233 | 12,552 | 12,822 | 13,032 | 13,499 | 13,731 | 13,892 | 14,303 | ||||||||||||||||||||||||
| Selling and marketing | 7,286 | 6,235 | 6,347 | 6,216 | 6,030 | 6,043 | 5,919 | 5,653 | ||||||||||||||||||||||||
| General and administrative | 12,091 | 12,131 | 11,885 | 13,152 | 12,551 | 12,466 | 12,494 | 13,169 | ||||||||||||||||||||||||
| Severance and restructuring | 981 | — | 2 | — | 1,712 | — | 24 | 22 | ||||||||||||||||||||||||
| Depreciation, amortization and accretion | 3,680 | 3,858 | 3,822 | 3,807 | 4,387 | 4,724 | 4,606 | 4,515 | ||||||||||||||||||||||||
| Impairment | — | — | — | — | 3,382 | — | — | — | ||||||||||||||||||||||||
| Total operating expenses | 42,370 | 40,135 | 40,363 | 41,390 | 47,270 | 42,069 | 42,151 | 42,478 | ||||||||||||||||||||||||
| % of total revenues | 77.5 | % | 80.8 | % | 77.2 | % | 77.9 | % | 91.1 | % | 76.3 | % | 75.3 | % | 74.9 | % | ||||||||||||||||
| Operating income | 12,315 | 9,534 | 11,905 | 11,740 | 4,614 | 13,047 | 13,810 | 14,257 | ||||||||||||||||||||||||
| % of total revenues | 22.5 | % | 19.2 | % | 22.8 | % | 22.1 | % | 8.9 | % | 23.7 | % | 24.7 | % | 25.1 | % | ||||||||||||||||
| Interest expense, net | (64 | ) | (68 | ) | (64 | ) | (64 | ) | (62 | ) | (64 | ) | (66 | ) | (188 | ) | ||||||||||||||||
| Other income (expense), net | 15 | 84 | (75 | ) | 81 | 289 | 52 | 436 | (62 | ) | ||||||||||||||||||||||
| Income before income tax expense | 12,266 | 9,550 | 11,766 | 11,757 | 4,841 | 13,035 | 14,180 | 14,007 | ||||||||||||||||||||||||
| Income tax expense | (4,251 | ) | (3,788 | ) | (4,938 | ) | (4,832 | ) | (2,814 | ) | (4,987 | ) | (5,733 | ) | (5,545 | ) | ||||||||||||||||
| Net income | $ | 8,015 | $ | 5,762 | $ | 6,828 | $ | 6,925 | $ | 2,027 | $ | 8,048 | $ | 8,447 | $ | 8,462 | ||||||||||||||||
| Basic net income per common share | $ | 0.37 | $ | 0.27 | $ | 0.32 | $ | 0.32 | $ | 0.09 | $ | 0.37 | $ | 0.38 | $ | 0.38 | ||||||||||||||||
| Diluted net income per common share | $ | 0.36 | $ | 0.26 | $ | 0.31 | $ | 0.32 | $ | 0.09 | $ | 0.36 | $ | 0.37 | $ | 0.37 | ||||||||||||||||
| Basic weighted average common shares outstanding | 21,633,706 | 21,629,289 | 21,644,281 | 21,688,153 | 21,492,792 | 21,973,473 | 22,130,397 | 22,106,543 | ||||||||||||||||||||||||
| Diluted weighted average common shares outstanding | 21,969,756 | 21,919,238 | 21,827,149 | 21,904,862 | 21,991,673 | 22,399,934 | 22,613,517 | 22,589,483 | ||||||||||||||||||||||||
| Reconciliation of operating income to EBITDA (b): | ||||||||||||||||||||||||||||||||
| Operating income | $ | 12,315 | $ | 9,534 | $ | 11,905 | $ | 11,740 | $ | 4,614 | $ | 13,047 | $ | 13,810 | $ | 14,257 | ||||||||||||||||
| Add back: depreciation, amortization, accretion and impairment | 3,680 | 3,858 | 3,822 | 3,807 | 7,769 | 4,724 | 4,606 | 4,515 | ||||||||||||||||||||||||
| EBITDA | $ | 15,995 | $ | 13,392 | $ | 15,727 | $ | 15,547 | $ | 12,383 | $ | 17,771 | $ | 18,416 | $ | 18,772 | ||||||||||||||||
| % of total revenues | 29.2 | % | 27.0 | % | 30.1 | % | 29.3 | % | 23.9 | % | 32.2 | % | 32.9 | % | 33.1 | % | ||||||||||||||||
| Key statistics: | ||||||||||||||||||||||||||||||||
| Units in service | 1,376 | 1,408 | 1,445 | 1,480 | 1,515 | 1,546 | 1,583 | 1,617 | ||||||||||||||||||||||||
| Average revenue per unit (ARPU) | $ | 8.15 | $ | 8.22 | $ | 8.22 | $ | 8.25 | $ | 8.29 | $ | 8.36 | $ | 8.45 | $ | 8.50 | ||||||||||||||||
| Bookings | $ | 16,271 | $ | 17,302 | $ | 15,626 | $ | 14,253 | $ | 18,129 | $ | 15,670 | $ | 15,085 | $ | 12,417 | ||||||||||||||||
| Backlog | $ | 40,211 | $ | 43,831 | $ | 39,576 | $ | 40,183 | $ | 40,626 | $ | 36,155 | $ | 34,391 | $ | 32,688 | ||||||||||||||||
| (a) | Slight variations in totals are due to rounding. |
| (b) | EBITDA or earnings before interest, taxes, depreciation, amortization, accretion and impairment is a non-GAAP measure and is presented for analytical purposes only. |
USA MOBILITY, INC.
CONSOLIDATED OPERATING EXPENSES
SUPPLEMENTAL INFORMATION (a)
(Unaudited and in thousands)
| For the three months ended | ||||||||||||||||||||||||||||||||
| 12/31/2013 | 9/30/2013 | 6/30/2013 | 3/31/2013 | 12/31/2012 | 9/30/2012 | 6/30/2012 | 3/31/2012 | |||||||||||||||||||||||||
| Cost of revenue | ||||||||||||||||||||||||||||||||
| Payroll and related | $ | 2,874 | $ | 2,898 | $ | 2,917 | $ | 2,838 | $ | 2,634 | $ | 2,427 | $ | 2,324 | $ | 2,368 | ||||||||||||||||
| Cost of sales | 2,726 | 1,992 | 2,133 | 1,890 | 2,500 | 2,195 | 2,434 | 2,037 | ||||||||||||||||||||||||
| Other | 499 | 469 | 435 | 455 | 575 | 483 | 458 | 411 | ||||||||||||||||||||||||
| Total cost of revenue | 6,099 | 5,359 | 5,485 | 5,183 | 5,709 | 5,105 | 5,216 | 4,816 | ||||||||||||||||||||||||
| Service, rental and maintenance | ||||||||||||||||||||||||||||||||
| Site rent | 3,972 | 4,142 | 4,237 | 4,235 | 4,326 | 4,326 | 4,421 | 4,791 | ||||||||||||||||||||||||
| Telecommunications | 1,751 | 1,832 | 1,885 | 1,889 | 2,053 | 2,257 | 2,346 | 2,312 | ||||||||||||||||||||||||
| Payroll and related | 4,743 | 5,053 | 5,074 | 5,203 | 5,432 | 5,309 | 5,360 | 5,529 | ||||||||||||||||||||||||
| Stock based compensation | — | 34 | 10 | 10 | 7 | 6 | 6 | 6 | ||||||||||||||||||||||||
| Other | 1,767 | 1,491 | 1,616 | 1,695 | 1,681 | 1,833 | 1,759 | 1,665 | ||||||||||||||||||||||||
| Total service, rental and maintenance | 12,233 | 12,552 | 12,822 | 13,032 | 13,499 | 13,731 | 13,892 | 14,303 | ||||||||||||||||||||||||
| Selling and marketing | ||||||||||||||||||||||||||||||||
| Payroll and related | 3,498 | 3,702 | 3,672 | 3,594 | 3,519 | 3,504 | 3,544 | 3,559 | ||||||||||||||||||||||||
| Commissions | 2,162 | 1,310 | 1,519 | 1,387 | 1,197 | 1,335 | 1,343 | 1,253 | ||||||||||||||||||||||||
| Stock based compensation | 18 | 18 | 17 | 17 | 19 | 19 | 18 | 16 | ||||||||||||||||||||||||
| Other | 1,608 | 1,205 | 1,139 | 1,218 | 1,295 | 1,185 | 1,014 | 825 | ||||||||||||||||||||||||
| Total selling and marketing | 7,286 | 6,235 | 6,347 | 6,216 | 6,030 | 6,043 | 5,919 | 5,653 | ||||||||||||||||||||||||
| General and administrative | ||||||||||||||||||||||||||||||||
| Payroll and related | 5,305 | 5,281 | 5,662 | 6,026 | 6,423 | 5,851 | 5,972 | 6,490 | ||||||||||||||||||||||||
| Stock based compensation | 827 | 894 | 601 | 599 | 296 | 435 | (19 | ) | 415 | |||||||||||||||||||||||
| Bad debt | 262 | 274 | 265 | 275 | 300 | 275 | 270 | 234 | ||||||||||||||||||||||||
| Facility rent | 719 | 883 | 839 | 844 | 889 | 903 | 868 | 806 | ||||||||||||||||||||||||
| Telecommunications | 420 | 388 | 343 | 375 | 379 | 390 | 443 | 412 | ||||||||||||||||||||||||
| Outside services | 2,285 | 2,409 | 2,111 | 3,077 | 2,377 | 2,353 | 2,458 | 2,447 | ||||||||||||||||||||||||
| Taxes, licenses and permits | 1,358 | 1,106 | 1,166 | 1,233 | 1,312 | 1,249 | 1,426 | 1,501 | ||||||||||||||||||||||||
| Other | 915 | 896 | 898 | 723 | 575 | 1,010 | 1,076 | 864 | ||||||||||||||||||||||||
| Total general and administrative | 12,091 | 12,131 | 11,885 | 13,152 | 12,551 | 12,466 | 12,494 | 13,169 | ||||||||||||||||||||||||
| Severance and restructuring | 981 | — | 2 | — | 1,712 | — | 24 | 22 | ||||||||||||||||||||||||
| Depreciation, amortization and accretion | 3,680 | 3,858 | 3,822 | 3,807 | 4,387 | 4,724 | 4,606 | 4,515 | ||||||||||||||||||||||||
| Impairment | — | — | — | — | 3,382 | — | — | — | ||||||||||||||||||||||||
| Operating expenses | $ | 42,370 | $ | 40,135 | $ | 40,363 | $ | 41,390 | $ | 47,270 | $ | 42,069 | $ | 42,151 | $ | 42,478 | ||||||||||||||||
| Capital expenditures | $ | 2,636 | $ | 2,504 | $ | 2,927 | $ | 2,341 | $ | 2,854 | $ | 2,696 | $ | 2,888 | $ | 1,551 | ||||||||||||||||
| (a) | Slight variations in totals are due to rounding. |
USA MOBILITY, INC. (WIRELESS)
UNITS IN SERVICE ACTIVITY (a)
(Unaudited and in thousands)
| For the three months ended | ||||||||||||||||||||||||
| 12/31/2013 | 9/30/2013 | 6/30/2013 | 3/31/2013 | 12/31/2012 | 9/30/2012 | 6/30/2012 | 3/31/2012 | |||||||||||||||||
| Units in service | ||||||||||||||||||||||||
| Beginning units in service | ||||||||||||||||||||||||
| Direct one-way | 1,275 | 1,307 | 1,324 | 1,346 | 1,366 | 1,395 | 1,423 | 1,465 | ||||||||||||||||
| Direct two-way | 70 | 73 | 73 | 75 | 79 | 82 | 85 | 90 | ||||||||||||||||
| Total direct | 1,345 | 1,380 | 1,397 | 1,421 | 1,445 | 1,477 | 1,508 | 1,555 | ||||||||||||||||
| Indirect one-way | 35 | 36 | 38 | 48 | 55 | 58 | 60 | 63 | ||||||||||||||||
| Indirect two-way | 28 | 29 | 45 | 46 | 46 | 48 | 49 | 50 | ||||||||||||||||
| Total indirect | 63 | 65 | 83 | 94 | 101 | 106 | 109 | 113 | ||||||||||||||||
| Total beginning units in service | 1,408 | 1,445 | 1,480 | 1,515 | 1,546 | 1,583 | 1,617 | 1,668 | ||||||||||||||||
| Gross placements | ||||||||||||||||||||||||
| Direct one-way | 32 | 40 | 49 | 39 | 46 | 45 | 49 | 41 | ||||||||||||||||
| Direct two-way | 3 | 3 | 5 | 3 | 2 | 3 | 4 | 3 | ||||||||||||||||
| Total direct | 35 | 43 | 54 | 42 | 48 | 48 | 53 | 44 | ||||||||||||||||
| Indirect one-way | 1 | 1 | 1 | 1 | 2 | 1 | 2 | 1 | ||||||||||||||||
| Indirect two-way | — | — | — | — | — | — | — | — | ||||||||||||||||
| Total indirect | 1 | 1 | 1 | 1 | 2 | 1 | 2 | 1 | ||||||||||||||||
| Total gross placements | 36 | 44 | 55 | 43 | 50 | 49 | 55 | 45 | ||||||||||||||||
| Gross disconnects | ||||||||||||||||||||||||
| Direct one-way | (61 | ) | (72 | ) | (66 | ) | (61 | ) | (66 | ) | (74 | ) | (77 | ) | (83 | ) | ||||||||
| Direct two-way | (4 | ) | (6 | ) | (5 | ) | (5 | ) | (6 | ) | (6 | ) | (7 | ) | (8 | ) | ||||||||
| Total direct | (65 | ) | (78 | ) | (71 | ) | (66 | ) | (72 | ) | (80 | ) | (84 | ) | (91 | ) | ||||||||
| Indirect one-way | (2 | ) | (2 | ) | (3 | ) | (11 | ) | (9 | ) | (4 | ) | (4 | ) | (4 | ) | ||||||||
| Indirect two-way | (1 | ) | (1 | ) | (16 | ) | (1 | ) | — | (2 | ) | (1 | ) | (1 | ) | |||||||||
| Total indirect | (3 | ) | (3 | ) | (19 | ) | (12 | ) | (9 | ) | (6 | ) | (5 | ) | (5 | ) | ||||||||
| Total gross disconnects | (68 | ) | (81 | ) | (90 | ) | (78 | ) | (81 | ) | (86 | ) | (89 | ) | (96 | ) | ||||||||
| Net loss | ||||||||||||||||||||||||
| Direct one-way | (29 | ) | (32 | ) | (17 | ) | (22 | ) | (20 | ) | (29 | ) | (28 | ) | (42 | ) | ||||||||
| Direct two-way | (1 | ) | (3 | ) | — | (2 | ) | (4 | ) | (3 | ) | (3 | ) | (5 | ) | |||||||||
| Total direct | (30 | ) | (35 | ) | (17 | ) | (24 | ) | (24 | ) | (32 | ) | (31 | ) | (47 | ) | ||||||||
| Indirect one-way | (1 | ) | (1 | ) | (2 | ) | (10 | ) | (7 | ) | (3 | ) | (2 | ) | (3 | ) | ||||||||
| Indirect two-way | (1 | ) | (1 | ) | (16 | ) | (1 | ) | — | (2 | ) | (1 | ) | (1 | ) | |||||||||
| Total indirect | (2 | ) | (2 | ) | (18 | ) | (11 | ) | (7 | ) | (5 | ) | (3 | ) | (4 | ) | ||||||||
| Total net change | (32 | ) | (37 | ) | (35 | ) | (35 | ) | (31 | ) | (37 | ) | (34 | ) | (51 | ) | ||||||||
| Ending units in service | ||||||||||||||||||||||||
| Direct one-way | 1,246 | 1,275 | 1,307 | 1,324 | 1,346 | 1,366 | 1,395 | 1,423 | ||||||||||||||||
| Direct two-way | 69 | 70 | 73 | 73 | 75 | 79 | 82 | 85 | ||||||||||||||||
| Total direct | 1,315 | 1,345 | 1,380 | 1,397 | 1,421 | 1,445 | 1,477 | 1,508 | ||||||||||||||||
| Indirect one-way | 34 | 35 | 36 | 38 | 48 | 55 | 58 | 60 | ||||||||||||||||
| Indirect two-way | 27 | 28 | 29 | 45 | 46 | 46 | 48 | 49 | ||||||||||||||||
| Total indirect | 61 | 63 | 65 | 83 | 94 | 101 | 106 | 109 | ||||||||||||||||
| Total ending units in service | 1,376 | 1,408 | 1,445 | 1,480 | 1,515 | 1,546 | 1,583 | 1,617 | ||||||||||||||||
| (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 | ||||||||||||||||||||||||||||||||
| 12/31/2013 | 9/30/2013 | 6/30/2013 | 3/31/2013 | 12/31/2012 | 9/30/2012 | 6/30/2012 | 3/31/2012 | |||||||||||||||||||||||||
| ARPU | ||||||||||||||||||||||||||||||||
| Direct one-way | $ | 7.60 | $ | 7.64 | $ | 7.67 | $ | 7.73 | $ | 7.78 | $ | 7.84 | $ | 7.89 | $ | 7.91 | ||||||||||||||||
| Direct two-way | 19.43 | 19.93 | 19.95 | 20.41 | 20.52 | 20.55 | 20.88 | 21.08 | ||||||||||||||||||||||||
| Total direct | 8.23 | 8.29 | 8.33 | 8.40 | 8.47 | 8.54 | 8.62 | 8.67 | ||||||||||||||||||||||||
| Indirect one-way | 8.68 | 8.90 | 8.97 | 8.22 | 7.51 | 7.25 | 7.48 | 7.61 | ||||||||||||||||||||||||
| Indirect two-way | 3.97 | 3.97 | 3.89 | 3.76 | 3.87 | 4.08 | 4.19 | 4.33 | ||||||||||||||||||||||||
| Total indirect | 6.47 | 6.57 | 6.31 | 5.85 | 5.74 | 5.77 | 5.97 | 6.14 | ||||||||||||||||||||||||
| Total one-way | 7.63 | 7.68 | 7.71 | 7.74 | 7.77 | 7.82 | 7.88 | 7.90 | ||||||||||||||||||||||||
| Total two-way | 14.90 | 15.20 | 14.40 | 13.96 | 14.16 | 14.36 | 14.69 | 15.00 | ||||||||||||||||||||||||
| Total paging ARPU | $ | 8.15 | $ | 8.22 | $ | 8.22 | $ | 8.25 | $ | 8.29 | $ | 8.36 | $ | 8.45 | $ | 8.50 | ||||||||||||||||
| Gross disconnect rate (b) | ||||||||||||||||||||||||||||||||
| Direct one-way | (4.7 | )% | (5.6 | )% | (5.0 | )% | (4.6 | )% | (4.8 | )% | (5.3 | )% | (5.4 | )% | (5.7 | )% | ||||||||||||||||
| Direct two-way | (6.4 | )% | (7.9 | )% | (6.7 | )% | (6.6 | )% | (7.8 | )% | (7.7 | )% | (8.5 | )% | (8.3 | )% | ||||||||||||||||
| Total direct | (4.8 | )% | (5.7 | )% | (5.1 | )% | (4.7 | )% | (5.0 | )% | (5.5 | )% | (5.6 | )% | (5.8 | )% | ||||||||||||||||
| Indirect one-way | (6.1 | )% | (6.3 | )% | (7.4 | )% | (23.6 | )% | (16.1 | )% | (7.6 | )% | (6.6 | )% | (7.0 | )% | ||||||||||||||||
| Indirect two-way | (5.7 | )% | (4.8 | )% | (34.0 | )% | (1.6 | )% | (1.6 | )% | (3.1 | )% | (1.8 | )% | (1.7 | )% | ||||||||||||||||
| Total indirect | (5.9 | )% | (5.6 | )% | (22.3 | )% | (12.5 | )% | (9.3 | )% | (5.5 | )% | (4.4 | )% | (4.7 | )% | ||||||||||||||||
| Total one-way | (4.8 | )% | (5.6 | )% | (5.1 | )% | (5.2 | )% | (5.3 | )% | (5.4 | )% | (5.4 | )% | (5.8 | )% | ||||||||||||||||
| Total two-way | (6.2 | )% | (7.0 | )% | (17.3 | )% | (4.7 | )% | (5.4 | )% | (6.0 | )% | (6.0 | )% | (5.9 | )% | ||||||||||||||||
| Total paging gross disconnect rate | (4.9 | )% | (5.7 | )% | (6.1 | )% | (5.2 | )% | (5.3 | )% | (5.5 | )% | (5.5 | )% | (5.8 | )% | ||||||||||||||||
| Net loss rate (c) | ||||||||||||||||||||||||||||||||
| Direct one-way | (2.1 | )% | (2.5 | )% | (1.3 | )% | (1.7 | )% | (1.5 | )% | (2.1 | )% | (1.9 | )% | (2.9 | )% | ||||||||||||||||
| Direct two-way | (2.2 | )% | (3.6 | )% | (0.4 | )% | (1.9 | )% | (4.9 | )% | (4.0 | )% | (3.9 | )% | (4.9 | )% | ||||||||||||||||
| Total direct | (2.1 | )% | (2.5 | )% | (1.3 | )% | (1.7 | )% | (1.7 | )% | (2.2 | )% | (2.0 | )% | (3.0 | )% | ||||||||||||||||
| Indirect one-way | (3.9 | )% | (3.3 | )% | (4.7 | )% | (21.8 | )% | (13.2 | )% | (5.6 | )% | (4.9 | )% | (5.4 | )% | ||||||||||||||||
| Indirect two-way | (4.9 | )% | (4.1 | )% | (33.7 | )% | (1.3 | )% | (1.3 | )% | (2.5 | )% | (1.2 | )% | (0.9 | )% | ||||||||||||||||
| Total indirect | (4.4 | )% | (3.6 | )% | (21.0 | )% | (11.5 | )% | (7.6 | )% | (4.2 | )% | (3.2 | )% | (3.4 | )% | ||||||||||||||||
| Total one-way | (2.2 | )% | (2.5 | )% | (1.4 | )% | (2.4 | )% | (1.9 | )% | (2.2 | )% | (2.0 | )% | (3.0 | )% | ||||||||||||||||
| Total two-way | (3.0 | )% | (3.8 | )% | (13.3 | )% | (1.6 | )% | (3.5 | )% | (3.5 | )% | (2.9 | )% | (3.5 | )% | ||||||||||||||||
| Total paging net loss rate | (2.2 | )% | (2.6 | )% | (2.4 | )% | (2.3 | )% | (2.0 | )% | (2.3 | )% | (2.1 | )% | (3.0 | )% | ||||||||||||||||
| (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 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 | ||||||||||||||||||||||||
| 12/31/2013 | 9/30/2013 | 6/30/2013 | 3/31/2013 | 12/31/2012 | 9/30/2012 | 6/30/2012 | 3/31/2012 | |||||||||||||||||
| Gross placement rate (b) | ||||||||||||||||||||||||
| Healthcare | 2.9 | % | 3.3 | % | 4.5 | % | 3.4 | % | 3.9 | % | 3.7 | % | 4.3 | % | 3.3 | % | ||||||||
| Government | 1.5 | % | 1.7 | % | 2.3 | % | 1.6 | % | 1.5 | % | 2.5 | % | 1.8 | % | 1.3 | % | ||||||||
| Large enterprise | 3.0 | % | 4.3 | % | 2.4 | % | 2.1 | % | 2.3 | % | 2.0 | % | 1.9 | % | 2.4 | % | ||||||||
| Other | 1.7 | % | 2.0 | % | 1.5 | % | 1.8 | % | 1.9 | % | 2.1 | % | 2.0 | % | 2.2 | % | ||||||||
| Total direct | 2.7 | % | 3.1 | % | 3.8 | % | 3.0 | % | 3.3 | % | 3.2 | % | 3.5 | % | 2.8 | % | ||||||||
| Total indirect | 1.5 | % | 1.9 | % | 1.4 | % | 1.0 | % | 1.7 | % | 1.3 | % | 1.2 | % | 1.3 | % | ||||||||
| Total | 2.7 | % | 3.1 | % | 3.7 | % | 2.9 | % | 3.2 | % | 3.1 | % | 3.4 | % | 2.7 | % | ||||||||
| Gross disconnect rate (b) | ||||||||||||||||||||||||
| Healthcare | (4.5 | )% | (5.2 | )% | (4.4 | )% | (3.9 | )% | (4.4 | )% | (4.5 | )% | (4.5 | )% | (4.7 | )% | ||||||||
| Government | (4.7 | )% | (7.9 | )% | (7.1 | )% | (5.9 | )% | (6.7 | )% | (6.8 | )% | (7.0 | )% | (7.7 | )% | ||||||||
| Large enterprise | (6.4 | )% | (6.0 | )% | (6.7 | )% | (7.0 | )% | (5.7 | )% | (7.3 | )% | (8.0 | )% | (7.7 | )% | ||||||||
| Other | (6.5 | )% | (6.5 | )% | (7.4 | )% | (7.3 | )% | (7.0 | )% | (8.1 | )% | (8.7 | )% | (9.2 | )% | ||||||||
| Total direct | (4.8 | )% | (5.7 | )% | (5.1 | )% | (4.7 | )% | (5.0 | )% | (5.5 | )% | (5.6 | )% | (5.8 | )% | ||||||||
| Total indirect | (5.9 | )% | (5.6 | )% | (22.3 | )% | (12.5 | )% | (9.3 | )% | (5.5 | )% | (4.4 | )% | (4.7 | )% | ||||||||
| Total | (4.9 | )% | (5.7 | )% | (6.1 | )% | (5.2 | )% | (5.3 | )% | (5.5 | )% | (5.5 | )% | (5.8 | )% | ||||||||
| Net loss rate (b) | ||||||||||||||||||||||||
| Healthcare | (1.5 | )% | (1.9 | )% | — | % | (0.5 | )% | (0.4 | )% | (0.9 | )% | (0.2 | )% | (1.4 | )% | ||||||||
| Government | (3.2 | )% | (6.3 | )% | (4.6 | )% | (4.3 | )% | (5.2 | )% | (4.3 | )% | (5.2 | )% | (6.4 | )% | ||||||||
| Large enterprise | (3.3 | )% | (1.6 | )% | (4.2 | )% | (4.9 | )% | (3.4 | )% | (5.3 | )% | (6.1 | )% | (5.3 | )% | ||||||||
| Other | (4.8 | )% | (4.5 | )% | (5.9 | )% | (5.5 | )% | (5.1 | )% | (5.9 | )% | (6.8 | )% | (7.1 | )% | ||||||||
| Total direct | (2.1 | )% | (2.5 | )% | (1.3 | )% | (1.7 | )% | (1.7 | )% | (2.2 | )% | (2.0 | )% | (3.0 | )% | ||||||||
| Total indirect | (4.4 | )% | (3.6 | )% | (21.0 | )% | (11.5 | )% | (7.6 | )% | (4.2 | )% | (3.2 | )% | (3.4 | )% | ||||||||
| Total | (2.2 | )% | (2.6 | )% | (2.4 | )% | (2.3 | )% | (2.0 | )% | (2.3 | )% | (2.1 | )% | (3.0 | )% | ||||||||
| End of period units in service % of total (b) | ||||||||||||||||||||||||
| Healthcare | 71.9 | % | 71.4 | % | 70.9 | % | 68.4 | % | 67.1 | % | 65.9 | % | 64.9 | % | 63.6 | % | ||||||||
| Government | 8.6 | % | 8.8 | % | 9.1 | % | 10.1 | % | 10.3 | % | 10.8 | % | 11.1 | % | 11.5 | % | ||||||||
| Large enterprise | 8.1 | % | 8.2 | % | 8.1 | % | 8.3 | % | 8.5 | % | 8.6 | % | 8.9 | % | 9.3 | % | ||||||||
| Other | 7.0 | % | 7.1 | % | 7.3 | % | 7.6 | % | 7.9 | % | 8.1 | % | 8.4 | % | 8.8 | % | ||||||||
| Total direct | 95.6 | % | 95.5 | % | 95.4 | % | 94.4 | % | 93.8 | % | 93.4 | % | 93.3 | % | 93.2 | % | ||||||||
| Total indirect | 4.4 | % | 4.5 | % | 4.6 | % | 5.6 | % | 6.2 | % | 6.6 | % | 6.7 | % | 6.8 | % | ||||||||
| Total | 100.0 | % | 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. (WIRELESS)
SUPPLEMENTAL INFORMATION - DIRECT UNITS IN SERVICE AND
CELLULAR ACTIVATIONS (a)
(Unaudited)
| For the three months ended | ||||||||||||||||||||||||||||||||
| 12/31/2013 | 9/30/2013 | 6/30/2013 | 3/31/2013 | 12/31/2012 | 9/30/2012 | 6/30/2012 | 3/31/2012 | |||||||||||||||||||||||||
| Account size ending units in service (000's) | ||||||||||||||||||||||||||||||||
| 1 to 3 units | 43 | 45 | 47 | 49 | 52 | 55 | 58 | 61 | ||||||||||||||||||||||||
| 4 to 10 units | 25 | 26 | 28 | 29 | 31 | 33 | 35 | 37 | ||||||||||||||||||||||||
| 11 to 50 units | 61 | 64 | 67 | 71 | 75 | 78 | 82 | 86 | ||||||||||||||||||||||||
| 51 to 100 units | 42 | 43 | 45 | 47 | 49 | 50 | 52 | 54 | ||||||||||||||||||||||||
| 101 to 1,000 units | 287 | 293 | 305 | 321 | 334 | 343 | 356 | 373 | ||||||||||||||||||||||||
| >1,000 units | 857 | 874 | 888 | 880 | 880 | 886 | 894 | 897 | ||||||||||||||||||||||||
| Total | 1,315 | 1,345 | 1,380 | 1,397 | 1,421 | 1,445 | 1,477 | 1,508 | ||||||||||||||||||||||||
| End of period units in service % of total direct | ||||||||||||||||||||||||||||||||
| 1 to 3 units | 3.2 | % | 3.3 | % | 3.4 | % | 3.5 | % | 3.6 | % | 3.8 | % | 3.9 | % | 4.1 | % | ||||||||||||||||
| 4 to 10 units | 1.9 | % | 2.0 | % | 2.0 | % | 2.1 | % | 2.2 | % | 2.3 | % | 2.3 | % | 2.3 | % | ||||||||||||||||
| 11 to 50 units | 4.6 | % | 4.8 | % | 4.8 | % | 5.1 | % | 5.3 | % | 5.4 | % | 5.6 | % | 5.7 | % | ||||||||||||||||
| 51 to 100 units | 3.2 | % | 3.2 | % | 3.2 | % | 3.4 | % | 3.5 | % | 3.5 | % | 3.5 | % | 3.6 | % | ||||||||||||||||
| 101 to 1,000 units | 21.9 | % | 21.8 | % | 22.1 | % | 23.0 | % | 23.5 | % | 23.7 | % | 24.1 | % | 24.8 | % | ||||||||||||||||
| >1,000 units | 65.2 | % | 64.9 | % | 64.5 | % | 62.9 | % | 61.9 | % | 61.3 | % | 60.6 | % | 59.5 | % | ||||||||||||||||
| Total | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | ||||||||||||||||
| Account size net loss rate | ||||||||||||||||||||||||||||||||
| 1 to 3 units | (4.4 | )% | (4.6 | )% | (5.1 | )% | (4.8 | )% | (5.5 | )% | (5.3 | )% | (5.7 | )% | (6.2 | )% | ||||||||||||||||
| 4 to 10 units | (3.8 | )% | (5.3 | )% | (5.3 | )% | (6.0 | )% | (5.5 | )% | (4.8 | )% | (6.2 | )% | (6.2 | )% | ||||||||||||||||
| 11 to 50 units | (4.4 | )% | (3.9 | )% | (6.4 | )% | (4.8 | )% | (4.6 | )% | (4.8 | )% | (4.1 | )% | (7.1 | )% | ||||||||||||||||
| 51 to 100 units | (3.5 | )% | (2.8 | )% | (5.3 | )% | (4.0 | )% | (2.6 | )% | (3.9 | )% | (2.4 | )% | (3.9 | )% | ||||||||||||||||
| 101 to 1,000 units | (1.7 | )% | (4.0 | )% | (5.0 | )% | (3.9 | )% | (2.6 | )% | (3.8 | )% | (4.7 | )% | (1.7 | )% | ||||||||||||||||
| >1,000 units | (1.8 | )% | (1.7 | )% | 1.1 | % | (0.2 | )% | (0.6 | )% | (1.0 | )% | (0.3 | )% | (2.7 | )% | ||||||||||||||||
| Total | (2.1 | )% | (2.5 | )% | (1.3 | )% | (1.7 | )% | (1.7 | )% | (2.2 | )% | (2.0 | )% | (3.0 | )% | ||||||||||||||||
| Account size ARPU | ||||||||||||||||||||||||||||||||
| 1 to 3 units | $ | 14.98 | $ | 15.13 | $ | 15.12 | $ | 15.22 | $ | 15.29 | $ | 15.43 | $ | 15.49 | $ | 15.49 | ||||||||||||||||
| 4 to 10 units | 14.29 | 14.38 | 14.29 | 14.33 | 14.39 | 14.42 | 14.40 | 14.45 | ||||||||||||||||||||||||
| 11 to 50 units | 11.96 | 12.06 | 11.96 | 12.06 | 12.04 | 12.11 | 12.24 | 12.15 | ||||||||||||||||||||||||
| 51 to 100 units | 10.34 | 10.66 | 10.42 | 10.47 | 10.47 | 10.48 | 10.35 | 10.52 | ||||||||||||||||||||||||
| 101 to 1,000 units | 8.89 | 8.85 | 8.84 | 8.84 | 8.94 | 8.97 | 9.01 | 9.04 | ||||||||||||||||||||||||
| >1,000 units | 7.11 | 7.17 | 7.19 | 7.23 | 7.24 | 7.28 | 7.34 | 7.35 | ||||||||||||||||||||||||
| Total | $ | 8.23 | $ | 8.29 | $ | 8.33 | $ | 8.40 | $ | 8.47 | $ | 8.54 | $ | 8.62 | $ | 8.67 | ||||||||||||||||
| Cellular: | ||||||||||||||||||||||||||||||||
| Number of activations | 690 | 970 | 799 | 925 | 1,041 | 948 | 1,052 | 1,070 | ||||||||||||||||||||||||
| Revenue from cellular services (000's) | $ | 129 | $ | 235 | $ | 163 | $ | 195 | $ | 275 | $ | 314 | $ | 286 | $ | 277 | ||||||||||||||||
| (a) | Slight variations in totals are due to rounding. |
USA MOBILITY, INC.
2014 FINANCIAL GUIDANCE
| (In millions) | |||||||||
| Guidance Range | |||||||||
| From | To | ||||||||
| Revenues | |||||||||
| Wireless | $ | 125 | $ | 135 | |||||
| Software | 58 | 66 | |||||||
| $ | 183 | $ | 201 | ||||||
| Operating Expenses (a) | $ | 156 | $ | 147 | |||||
| Capital Expenses | $ | 9 | $ | 7 | |||||
| (a) Operating expenses exclude depreciation, amortization and accretion. | |||||||||