SYS-CON MEDIA Authors: Doug Masi, Mat Mathews, PR.com Newswire, David Smith, Tim Crawford

News Feed Item

USA Mobility Reports Fourth Quarter and 2013 Operating Results

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.

* * * * * * * * *

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

USA Mobility, 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.

 
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, accretion and impairment 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, accretion and impairment 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 )% (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 )% (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 )%   (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 )%   (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 )% (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 % 1.9 % 2.4 %
Other 1.7 % 2.0 % 1.5 % 1.8 % 1.9 % 2.1 % 2 % 2.2 %
Total direct 2.7 % 3.1 % 3.8 % 3 % 3.3 % 3.2 % 3.5 % 2.8 %
Total indirect 1.5 % 1.9 % 1.4 % 1 % 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 )% (7.7 )%
Large enterprise (6.4 )% (6.0 )% (6.7 )% (7 )% (5.7 )% (7.3 )% (8 )% (7.7 )%
Other (6.5 )% (6.5 )% (7.4 )% (7.3 )% (7 )% (8.1 )% (8.7 )% (9.2 )%
Total direct (4.8 )% (5.7 )% (5.1 )% (4.7 )% (5 )% (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 )% (3 )%
Total indirect (4.4 )% (3.6 )% (21 )% (11.5 )% (7.6 )% (4.2 )% (3.2 )% (3.4 )%
Total (2.2 )% (2.6 )% (2.4 )% (2.3 )% (2 )% (2.3 )% (2.1 )% (3 )%
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 % 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 %
 
(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 % 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 %   100 %   100 %   100 %   100 %   100 %   100 %   100 %
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.
 

More Stories By Business Wire

Copyright © 2009 Business Wire. All rights reserved. Republication or redistribution of Business Wire content is expressly prohibited without the prior written consent of Business Wire. Business Wire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.