I'm not in USMO, but saw this news and
thought I'd post in this board, since noone had done so yet.
Hope you do well with it.
USA Mobility Reports Second Quarter Operating Results; Board Declares Quarterly Cash Distribution
Average Revenue Per Unit, Recurring Cash Flow Margins Reach New Highs; Company Continues to Reduce Operating Expenses
* Press Release
* Source: USA Mobility, Inc.
* On Wednesday July 29, 2009, 4:30 pm EDT
ALEXANDRIA, Va.--(BUSINESS WIRE)--USA Mobility, Inc. (Nasdaq: USMO - News), a leading provider of wireless messaging and communications services, today announced operating results for the second quarter ended June 30, 2009.
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In addition, the Company’s Board of Directors declared a regular quarterly cash distribution of $0.25 per share, payable on September 10, 2009 to stockholders of record on August 14, 2009. The Company expects the entire distribution to be paid as a return of capital.
Total revenue was $75.1 million for the second quarter, compared to $79.7 million in the first quarter and $92.1 million in the second quarter of 2008. Operating income was $12.8 million for the second quarter, while EBITDA (earnings before interest, taxes, depreciation, amortization and accretion) totaled $24.0 million, compared to $28.6 million in the first quarter and $30.6 million in the year-earlier quarter. Second quarter results were negatively impacted by a one-time settlement expense of $4.0 million in connection with patent litigation. Absent the one-time litigation settlement expense, operating income would have been $16.8 million and EBITDA $28.0 million.
Net income for the second quarter was $44.7 million, or $1.93 per fully diluted share, compared to net income of $10.3 million, or $0.37 per fully diluted share, in the second quarter of 2008. The significant increase in net income in the second quarter was largely the result of a one-time income tax benefit of $37.0 million due to the effective settlement of uncertain tax positions, and tax refund claims. Excluding the one-time tax adjustment and $4.0 million litigation settlement expense, net income in the second quarter would have been $10.1 million, or $0.43 per fully diluted share.
Second quarter results included:
* Total paging ARPU (average revenue per unit) increased to $8.96 in the second quarter, its highest level since the third quarter of 2005, from $8.86 in the first quarter and $8.54 in the year-earlier quarter.
* The quarterly rate of revenue erosion was 5.7 percent, compared to 5.4 percent in the first quarter and 2.8 percent in the second quarter of 2008. The annual rate of revenue erosion was 18.4 percent, compared to 15.9 percent in the first quarter and 14.3 percent in the year-earlier quarter.
* Net unit loss in the second quarter was 158,000, compared to 208,000 in the first quarter and 157,000 in the second quarter of 2008. Total units in service were 2,449,000 at June 30, 2009, compared to 2,607,000 at March 31, 2009.
* The quarterly rate of subscriber loss was 6.0 percent in the second quarter, compared to 7.4 percent in the first quarter and 4.7 percent in the second quarter of 2008. The annual rate of subscriber erosion was 22.9 percent in the second quarter, compared to 21.8 percent in the first quarter and 15.5 percent in the year-earlier quarter.
* Operating expenses (excluding depreciation, amortization and accretion) totaled $51.2 million, compared to $51.1 million in the first quarter of 2009. Absent the one-time litigation settlement expense of $4.0 million, operating expenses in the second quarter would have been $47.2 million, a reduction of $14.3 million, or 23.3 percent, from $61.5 million in the second quarter of 2008.
* EBITDA margin (or EBITDA as a percentage of revenue) was 31.9 percent, compared to 35.9 percent in the first quarter and 33.2 percent in the year-earlier quarter. Excluding the one-time litigation settlement expense of $4.0 million, EBITDA margin in the second quarter would have been 37.2 percent, the highest level since the Company’s merger in 2004.
* Based on the completion of the IRS income tax audits for 2005 and 2006 and certain refund claims, the Company recorded a $37.0 million reduction to income tax expense in the quarter.
* Capital expenses were $4.4 million, compared to $6.1 million in the first quarter of 2009.
* The Company’s cash balance at June 30, 2009 was $79.6 million.
“We continued to make excellent progress during the second quarter,” said Vincent D. Kelly, president and chief executive officer, “as operating results met or exceeded the majority of our performance objectives and were consistent with the financial guidance we provided earlier this year. ARPU and recurring cash flow margins rose to their highest levels in years, recurring operating expenses were further reduced, and we continued to provide cost effective and reliable wireless communications services to our customers on a profitable basis.” Kelly added: “While subscriber cancellations were higher than anticipated, due in large part to a weak economy nationwide, we continued to see lower net unit losses in our Healthcare market segment, which now represents approximately 50 percent of our customer base.”
Kelly said USA Mobility again returned capital to stockholders in the second quarter in the form of cash distributions, consistent with its goal of generating sufficient free cash flow to regularly return capital to stockholders. “We produced $25.3 million in cash from operations in the quarter, allowing us to pay a regular quarterly cash distribution of $0.25 per share on June 18, 2009, representing a return of capital to our stockholders of approximately $5.7 million. Including the second quarter distribution, we have now returned $311.1 million to stockholders over the past four years.”
Thomas L. Schilling, chief operating officer and chief financial officer, said the Company continued to reduce operating expenses during the second quarter through a combination of internal consolidations and company-wide cost control initiatives. “Absent the one-time litigation settlement expense of $4.0 million, operating expenses (excluding depreciation, amortization and accretion) decreased 23.3 percent from the year-earlier quarter, once again outpacing the year-over-year decline in revenue of 18.4 percent. In addition,” Schilling noted, “excluding the one-time litigation settlement expense, second quarter operating expenses as a percentage of revenue were at their lowest level in more than four years.”
Commenting on the Company’s financial expectations for the balance of the year, Schilling said, “Based on our performance through the first half of the year, we are revising our financial guidance for 2009 to revenue between $286 million to $291 million, operating expenses (excluding depreciation, amortization and accretion) between $194 million to $197 million, and capital expenses between $16 million to $18 million.
* * * * * * * * *
USA Mobility plans to host a conference call for investors on its second quarter results at 10:00 a.m. Eastern Time on Thursday, July 30, 2009. The dial-in number for the call is 888-801-6494 (toll-free) or 913-312-0970 (toll). The pass code for the call is 8045078. A replay of the call will be available from 3:00 p.m. ET on July 30 until 11:59 p.m. on Thursday, August 13. The replay number is 888-203-1112 (toll-free) or 719-457-0820 (toll). The pass code for the replay is 8045078.
