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USA Mobility Reports First Quarter Operating Results; Board Declares Quarterly Cash Distribution

Subscriber and Revenue Trends Improve; Operating Expenses Again Reduced; Cash Flow Margins Maintained

SPRINGFIELD, Va., May 05, 2010 (BUSINESS WIRE) --USA Mobility, Inc. (Nasdaq: USMO), a leading provider of wireless messaging and communications services, today announced operating results for the first quarter ended March 31, 2010.

In addition, the Company's Board of Directors declared a regular quarterly cash distribution of $0.25 per share, payable on June 25, 2010 to stockholders of record on May 20, 2010. Of the $0.25 cash distribution, the Company expects $0.23 will be a return of capital and $0.02 will be a dividend distribution.

Total revenue for the first quarter was $62.8 million, compared to $65.4 million in the fourth quarter of 2009 and $79.7 million in the year-earlier quarter. First quarter EBITDA (earnings before interest, taxes, depreciation, amortization and accretion) totaled $22.0 million, compared to $21.0 million in the fourth quarter and $28.6 million in the first quarter of 2009.

Net income for the first quarter was $8.9 million, or $0.39 per fully diluted share, compared to $10.0 million, or $0.43 per fully diluted share, in the year-earlier quarter.

First quarter results included:

  • Net unit loss was 83,000 in the first quarter, compared to 115,000 in the prior quarter and 208,000 in the first quarter of 2009. Units in service totaled 2,099,000 at March 31, 2010, compared to 2,607,000 a year earlier.
  • The quarterly rate of subscriber loss improved to 3.8 percent, compared to 5.0 percent in the fourth quarter and 7.4 percent in the first quarter of 2009. The annual rate of subscriber erosion was 19.5 percent in the first quarter, compared to 22.5 percent in the fourth quarter and 21.8 percent in the year-earlier quarter.
  • The quarterly rate of revenue erosion improved to 4.0 percent, compared to 5.9 percent in the fourth quarter and 5.4 percent in the first quarter of 2009. The annual rate of revenue erosion for the first quarter was 21.2 percent, compared to 22.4 percent in the fourth quarter and 15.9 percent in the year-earlier quarter.
  • Total paging ARPU (average revenue per unit) increased to $9.00 in the first quarter from $8.88 in the fourth quarter and $8.86 in the year-earlier quarter. Quarterly ARPU reached its highest level since the third quarter of 2005.
  • Operating expenses (excluding depreciation, amortization and accretion) totaled $40.8 million in the first quarter, a reduction of $10.2 million, or 20.0 percent, from $51.1 million in the first quarter of 2009. Quarterly operating expenses declined 7.9 percent from the fourth quarter of 2009.
  • EBITDA margin (or EBITDA as a percentage of revenue) was 35.0 percent, compared to 32.2 percent in the fourth quarter of 2009 and 35.9 percent in the year-earlier quarter.
  • Capital expenses were $1.7 million, compared to $5.0 million in the fourth quarter of 2009.
  • The Company repurchased 364,407 shares of common stock during the quarter under its buy back program, and approximately $20.4 million remains available for purchases under the currently approved plan.
  • The Company's cash balance at March 31, 2010 was $115.6 million.

Vincent D. Kelly, president and chief executive officer, said: "Despite a still sluggish economy, USA Mobility reported outstanding operating results for the first quarter that met or exceeded our key performance objectives and were consistent with the financial guidance we provided earlier this year. We were particularly pleased to see significant improvement in the pace of both subscriber and revenue erosion. Through our continued focus on cost reductions and maintaining operating margins we again generated sufficient cash flow to return significant capital to stockholders in the form of cash distributions and share repurchases."

Kelly said the Company continued to focus sales and marketing efforts during the quarter around its core market segments of Healthcare, Government and Large Enterprise. "These core segments represented approximately 86.8 percent of our direct subscriber base and 81.5 percent of our direct paging revenue at the end of the first quarter. Healthcare continued to be our best performing market segment with the highest rate of gross placements and lowest rate of net unit loss as healthcare providers continue to benefit from the reliability of paging for their most critical messaging needs. In fact, our networks today carry the bulk of messaging traffic to hospitals across the country, providing paging service to 44 percent of all U.S. hospitals and 63 percent of major hospitals (those with at least 200 beds)."

Thomas L. Schilling, chief operating officer and chief financial officer, said the Company continued to reduce operating expenses in the first quarter. "Operating expenses (excluding depreciation, amortization and accretion) decreased 20.0 percent from the year-earlier quarter," Schilling noted, "including a 22.2 percent reduction in payroll expense and a 19.1 decline in site rent expense. In addition, operating expenses as a percentage of revenue was 65.0 percent in the first quarter versus 67.8 percent in the prior quarter, while the combination of lower expenses and higher ARPU resulted in an EBITDA margin of 35.0 percent as compared to 32.2 percent in the fourth quarter of 2009."

The Company maintained its previous financial guidance for 2010 of revenues between $228 million to $238 million, operating expenses (excluding depreciation, amortization and accretion) between $158 million to $163 million, and capital expenses between $10 million to $12 million.

* * * * * * * * *

USA Mobility plans to host a conference call for investors on its first quarter results at 10:00 a.m. Eastern Time on Thursday, May 6, 2010. The dial-in number for the call is 877-440-5807 (toll-free) or 719-325-4803 (toll). The pass code for the call is 5365764. A replay of the call will be available from 3:00 p.m. ET on May 6 until 11:59 p.m. on Thursday, May 20. The replay number is 888-203-1112 (toll-free) or 719-457-0820 (toll). The pass code for the replay is 5365764.

* * * * * * * * *

USA Mobility's Annual Meeting of Stockholders will be held at 9:00 a.m. Eastern Time on Wednesday, May 12, 2010 in Alexandria, VA.

About USA Mobility

USA Mobility, Inc., headquartered in Springfield, Virginia, is a comprehensive provider of reliable and affordable wireless communications solutions to the healthcare, government, large enterprise and emergency response sectors. As a single-source provider, USA Mobility's focus is on the business-to-business marketplace and supplying wireless connectivity solutions to organizations nationwide. The Company operates the largest one-way paging and advanced two-way paging networks in the United States. In addition, USA Mobility offers mobile voice and data services through Sprint Nextel and T-Mobile, including BlackBerry(R) smartphones and GPS location applications. The Company's product offerings include customized wireless connectivity systems for the healthcare, government and other campus environments. USA Mobility also offers M2M (machine-to-machine) telemetry solutions for numerous applications that include asset tracking, utility meter reading and other remote device monitoring applications on a national scale. For further information visit http://www.usamobility.com.

Safe Harbor Statement under the Private Securities Litigation Reform Act: Statements contained herein or in prior press releases which are not historical fact, such as statements regarding USA Mobility's future operating and financial performance, are forward-looking statements for purposes of the safe harbor provisions under the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve risks and uncertainties that may cause USA Mobility's actual results to be materially different from the future results expressed or implied by such forward-looking statements. Factors that could cause actual results to differ materially from those expectations include, but are not limited to, declining demand for paging products and services, the ability to continue to reduce operating expenses, future capital needs, competitive pricing pressures, competition from both traditional paging services and other wireless communications services, government regulation, reliance upon third-party providers for certain equipment and services, as well as other risks described from time to time in periodic reports and registration statements filed with the Securities and Exchange Commission. Although USA Mobility believes the expectations reflected in the forward-looking statements are based on reasonable assumptions, it can give no assurance that its expectations will be attained. USA Mobility disclaims any intent or obligation to update any forward-looking statements.

Tables to Follow

USA MOBILITY, INC.
CONDENSED CONSOLIDATED RESULTS OF OPERATIONS (a)
(unaudited and in thousands, except share and per share amounts)
For the three months ended
3/31/09 6/30/09 9/30/09 12/31/09 3/31/10
Revenues:
Paging service $ 72,021 $ 67,972 $ 63,308 $ 59,657 $ 57,832
Cellular 991 775 980 795 708
Product sales 5,271 5,269 4,354 3,927 3,358
Other 1,408 1,129 856 993 886
Total revenues 79,691 75,145 69,498 65,372 62,784
Operating expenses:
Cost of products sold 1,669 1,421 1,593 1,513 1,209
Service, rental and maintenance 22,955 21,290 20,950 20,115 18,941
Selling and marketing 6,062 5,600 5,198 4,955 4,557
General and administrative 20,186 22,801 16,050 15,289 15,812
Severance and restructuring 190 52 15 2,480 314
Depreciation, amortization and accretion 11,270 11,174 10,689 8,781 7,304
Total operating expenses 62,332 62,338 54,495 53,133 48,137
% of total revenues 78.2 % 83.0 % 78.4 % 81.3 % 76.7 %
Operating income 17,359 12,807 15,003 12,239 14,647
% of total revenues 21.8 % 17.0 % 21.6 % 18.7 % 23.3 %
Interest income (expense), net 26 28 16 (1 ) 3
Other income (expense), net 112 (42 ) 185 275 78
Income before income tax expense (benefit) 17,497 12,793 15,204 12,513 14,728
Income tax expense (benefit) 7,516 (31,953 ) 6,003 8,883 5,843
Net income $ 9,981 $ 44,746 $ 9,201 $ 3,630 $ 8,885
Basic net income per common share $ 0.43 $ 1.96 $ 0.40 $ 0.16 $ 0.39
Diluted net income per common share $ 0.43 $ 1.93 $ 0.40 $ 0.16 $ 0.39
Basic weighted average common shares outstanding 23,134,072 22,858,573 22,856,951 22,830,040 22,654,240
Diluted weighted average common shares outstanding 23,479,796 23,200,736 23,194,360 23,167,729 22,967,192
Reconciliation of operating income to EBITDA (b):
Operating income $ 17,359 $ 12,807 $ 15,003 $ 12,239 $ 14,647
Add back: depreciation, amortization and accretion 11,270 11,174 10,689 8,781 7,304
EBITDA $ 28,629 $ 23,981 $ 25,692 $ 21,020 $ 21,951
% of total revenues 35.9 % 31.9 % 37.0 % 32.2 % 35.0 %
(a) Slight variations in totals are due to rounding.
(b) 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.
UNITS IN SERVICE ACTIVITY (a)
(unaudited and in thousands)
For the three months ended
3/31/09 6/30/09 9/30/09 12/31/09 3/31/10

Units in service

Beginning units in service
Direct one-way 2,349 2,198 2,079 1,969 1,881
Direct two-way 171 157 147 141 133
Total direct 2,520 2,355 2,226 2,110 2,014
Indirect one-way 196 161 139 116 101
Indirect two-way 99 91 84 71 67
Total indirect 295 252 223 187 168
Total beginning units in service 2,815 2,607 2,449 2,297 2,182
Gross placements
Direct one-way 67 74 64 55 53
Direct two-way 6 7 9 5 5
Total direct 73 81 73 60 58
Indirect one-way 8 9 7 6 3
Indirect two-way 4 2 1 2 15
Total indirect 12 11 8 8 18
Total gross placements 85 92 81 68 76
Gross disconnects
Direct one-way (218 ) (193 ) (174 ) (143 ) (130 )
Direct two-way (20 ) (17 ) (15 ) (13 ) (12 )
Total direct (238 ) (210 ) (189 ) (156 ) (142 )
Indirect one-way (43 ) (31 ) (30 ) (21 ) (14 )
Indirect two-way (12 ) (9 ) (14 ) (6 ) (3 )
Total indirect (55 ) (40 ) (44 ) (27 ) (17 )
Total gross disconnects (293 ) (250 ) (233 ) (183 ) (159 )
Net (loss) gain
Direct one-way (151 ) (119 ) (110 ) (88 ) (77 )
Direct two-way (14 ) (10 ) (6 ) (8 ) (7 )
Total direct (165 ) (129 ) (116 ) (96 ) (84 )
Indirect one-way (35 ) (22 ) (23 ) (15 ) (11 )
Indirect two-way (8 ) (7 ) (13 ) (4 ) 12
Total indirect (43 ) (29 ) (36 ) (19 ) 1
Total net change (208 ) (158 ) (152 ) (115 ) (83 )
Ending units in service
Direct one-way 2,198 2,079 1,969 1,881 1,804
Direct two-way 157 147 141 133 126
Total direct 2,355 2,226 2,110 2,014 1,930
Indirect one-way 161 139 116 101 90
Indirect two-way 91 84 71 67 79
Total indirect 252 223 187 168 169
Total ending units in service 2,607 2,449 2,297 2,182 2,099
(a) Slight variations in totals are due to rounding.
USA MOBILITY, INC.
AVERAGE REVENUE PER UNIT (ARPU) AND CHURN (a)
(unaudited)
For the three months ended
3/31/09 6/30/09 9/30/09 12/31/09 3/31/10

ARPU

Direct one-way $ 8.11 $ 8.18 $ 8.08 $ 8.04 $ 8.16
Direct two-way 23.68 23.62 23.42 23.59 23.61
Total direct 9.15 9.21 9.10 9.06 9.17
Indirect one-way 7.05 7.43 7.51 7.77 8.78
Indirect two-way 4.58 5.19 5.49 5.14 4.84
Total indirect 6.19 6.60 6.74 6.73 7.04
Total one-way 8.03 8.14 8.05 8.02 8.19
Total two-way 16.66 16.86 17.09 17.32 16.76
Total paging ARPU $ 8.86 $ 8.96 $ 8.89 $ 8.88 $ 9.00

Gross disconnect rate (b)

Direct one-way -9.3 % -8.8 % -8.4 % -7.2 % -6.9 %
Direct two-way -11.8 % -11.0 % -10.2 % -8.9 % -9.1 %
Total direct -9.5 % -8.9 % -8.5 % -7.3 % -7.1 %
Indirect one-way -22.0 % -19.4 % -21.9 % -18.9 % -13.7 %
Indirect two-way -11.6 % -9.1 % -16.4 % -8.5 % -4.9 %
Total indirect -18.5 % -15.6 % -19.8 % -14.9 % -10.1 %
Total one-way -10.3 % -9.5 % -9.2 % -7.9 % -7.3 %
Total two-way -11.7 % -10.3 % -12.5 % -8.8 % -7.7 %
Total paging gross disconnect rate -10.4 % -9.6 % -9.5 % -8.0 % -7.3 %

Net (loss) gain rate (c)

Direct one-way -6.4 % -5.4 % -5.3 % -4.4 % -4.1 %
Direct two-way -8.5 % -6.4 % -4.4 % -5.5 % -5.0 %
Total direct -6.6 % -5.5 % -5.2 % -4.5 % -4.2 %
Indirect one-way -17.8 % -13.7 % -16.9 % -13.6 % -10.5 %
Indirect two-way -8.2 % -7.2 % -14.9 % -5.2 % 17.1 %
Total indirect -14.6 % -11.3 % -16.1 % -10.4 % 0.7 %
Total one-way -7.3 % -6.0 % -6.0 % -5.0 % -4.4 %
Total two-way -8.4 % -6.7 % -8.2 % -5.4 % 2.5 %
Total paging net (loss) gain rate -7.4 % -6.0 % -6.2 % -5.0 % -3.8 %
(a) Slight variations in totals are due to rounding.
(b) Gross disconnect rate is current period disconnected units divided by prior period ending units in service.
(c) Net (loss) gain rate is net current period placements and disconnected units in service divided by prior period ending units in service.
USA MOBILITY, INC.
SUPPLEMENTAL INFORMATION BY MARKET SEGMENT (a)
(unaudited)
For the three months ended
3/31/09 6/30/09 9/30/09 12/31/09 3/31/10
Gross placement rate (b)
Healthcare 3.7 % 4.4 % 3.8 % 3.4 % 3.5 %
Government 1.7 % 2.4 % 2.4 % 1.9 % 1.8 %
Large enterprise 2.4 % 2.2 % 3.3 % 2.2 % 2.1 %
Other 2.4 % 2.5 % 2.3 % 2.2 % 2.4 %
Total direct 2.9 % 3.4 % 3.3 % 2.8 % 2.9 %
Total indirect 3.9 % 4.3 % 3.7 % 4.5 % 10.9 %
Total 3.0 % 3.5 % 3.3 % 3.0 % 3.5 %
Gross disconnect rate (b)
Healthcare -6.8 % -6.2 % -6.7 % -5.5 % -4.9 %
Government -9.9 % -10.7 % -10.7 % -9.4 % -9.1 %
Large enterprise -13.3 % -13.0 % -10.7 % -9.4 % -10.3 %
Other -13.0 % -12.4 % -10.6 % -10.1 % -11.0 %
Total direct -9.5 % -8.9 % -8.5 % -7.3 % -7.1 %
Total indirect -18.5 % -15.6 % -19.8 % -14.9 % -10.1 %
Total -10.4 % -9.6 % -9.5 % -8.0 % -7.3 %
Net (loss) gain rate (b)
Healthcare -3.1 % -1.8 % -2.9 % -2.1 % -1.4 %
Government -8.2 % -8.4 % -8.3 % -7.5 % -7.4 %
Large enterprise -10.9 % -10.9 % -7.4 % -7.2 % -8.1 %
Other -10.6 % -10.0 % -8.3 % -7.9 % -8.6 %
Total direct -6.6 % -5.5 % -5.2 % -4.5 % -4.2 %
Total indirect -14.6 % -11.3 % -16.1 % -10.4 % 0.7 %
Total -7.4 % -6.0 % -6.2 % -5.0 % -3.8 %
End of period units in service % of total (b)
Healthcare 44.9 % 49.8 % 51.5 % 53.2 % 54.5 %
Government 17.2 % 15.6 % 15.3 % 14.9 % 14.4 %
Large enterprise 12.0 % 11.8 % 11.8 % 11.4 % 10.9 %
Other 16.2 % 13.7 % 13.2 % 12.8 % 12.1 %
Total direct 90.3 % 90.9 % 91.8 % 92.3 % 91.9 %
Total indirect 9.7 % 9.1 % 8.2 % 7.7 % 8.1 %
Total 100.0 % 100.0 % 100.0 % 100.0 % 100.0 %
(a) Slight variations in totals are due to rounding.
(b) Changes in the classification of units in service are reflected in the quarter when such changes are identified. Such changes are then appropriately reflected in calculating the gross placement, gross disconnect and net (loss) gain rates.
USA MOBILITY, INC.
SUPPLEMENTAL INFORMATION - DIRECT UNITS IN SERVICE AND CELLULAR ACTIVATIONS (a)
(unaudited)
For the three months ended
3/31/09 6/30/09 9/30/09 12/31/09 3/31/10
Account size ending units in service (000's)
1 to 3 units 137 126 118 109 101
4 to 10 units 82 75 70 66 62
11 to 50 units 199 183 168 158 149
51 to 100 units 125 112 104 97 92
101 to 1,000 units 626 580 546 519 499
>1,000 units 1,186 1,150 1,104 1,065 1,027
Total 2,355 2,226 2,110 2,014 1,930
End of period units in service % of total direct
1 to 3 units 5.8 % 5.7 % 5.6 % 5.4 % 5.2 %
4 to 10 units 3.5 % 3.4 % 3.3 % 3.3 % 3.2 %
11 to 50 units 8.4 % 8.2 % 8.0 % 7.8 % 7.7 %
51 to 100 units 5.3 % 5.0 % 4.9 % 4.8 % 4.8 %
101 to 1,000 units 26.6 % 26.0 % 25.9 % 25.8 % 25.9 %
>1,000 units 50.4 % 51.7 % 52.3 % 52.9 % 53.2 %
Total 100.0 % 100.0 % 100.0 % 100.0 % 100.0 %
Account size net loss rate
1 to 3 units -7.8 % -7.9 % -6.9 % -7.4 % -7.6 %
4 to 10 units -8.8 % -7.9 % -6.7 % -6.1 % -5.3 %
11 to 50 units -8.9 % -8.2 % -7.7 % -5.9 % -5.8 %
51 to 100 units -6.2 % -10.1 % -7.6 % -6.8 % -4.4 %
101 to 1,000 units -8.0 % -7.4 % -5.9 % -4.9 % -3.7 %
>1,000 units -5.1 % -3.1 % -4.0 % -3.5 % -3.7 %
Total -6.6 % -5.5 % -5.2 % -4.5 % -4.2 %
Account size ARPU
1 to 3 units $ 14.73 $ 15.07 $ 14.98 $ 15.03 $ 15.28
4 to 10 units 14.00 14.30 14.24 14.21 14.37
11 to 50 units 11.41 11.65 11.54 11.45 11.86
51 to 100 units 10.30 10.13 10.06 10.06 10.67
101 to 1,000 units 8.94 9.04 8.89 8.82 9.00
>1,000 units 7.77 7.80 7.76 7.79 7.80
Total $ 9.15 $ 9.21 $ 9.10 $ 9.06 $ 9.17
Cellular revenue
Number of activations 2,389 2,207 2,633 2,253 2,354
Revenue from cellular services (000's) $ 991 $ 775 $ 980 $ 795 $ 708
(a) Slight variations in totals are due to rounding.
USA MOBILITY, INC.
CONSOLIDATED OPERATING EXPENSES SUPPLEMENTAL INFORMATION (a)
(unaudited and in thousands)
For the three months ended
3/31/09 6/30/09 9/30/09 12/31/09 3/31/10
Cost of products sold $ 1,669 $ 1,421 $ 1,593 $ 1,513 $ 1,209
Service, rental and maintenance
Site rent 11,218 10,223 10,422 9,871 9,079
Telecommunications 4,485 4,284 3,945 3,885 3,831
Payroll and related 5,631 5,286 4,988 4,725 4,586
Stock based compensation 49 7 13 12 6
Other 1,572 1,490 1,582 1,622 1,439
Total service, rental and maintenance 22,955 21,290 20,950 20,115 18,941
Selling and marketing
Payroll and related 4,175 3,711 3,366 3,199 2,964
Commissions 1,201 1,422 1,328 1,131 1,164
Stock based compensation 109 26 26 26 17
Other 577 441 478 599 412
Total selling and marketing 6,062 5,600 5,198 4,955 4,557
General and administrative
Payroll and related 9,075 7,754 7,213 7,089 6,912
Stock based compensation 569 241 241 241 240
Bad debt 850 750 699 654 713
Facility rent 1,628 1,446 1,457 1,411 1,354
Telecommunications 771 721 720 702 657
Outside services 4,514 4,063 3,269 3,051 3,267
Taxes, licenses and permits 1,101 1,695 (680 ) 660 1,591
Other 1,678 6,131 3,131 1,481 1,078
Total general and administrative 20,186 22,801 16,050 15,289 15,812
Severance and restructuring 190 52 15 2,480 314
Depreciation, amortization and accretion 11,270 11,174 10,689 8,781 7,304
Operating expenses $ 62,332 $ 62,338 $ 54,495 $ 53,133 $ 48,137
Capital expenditures $ 6,054 $ 4,355 $ 1,806 $ 5,014 $ 1,725
(a) Slight variations in totals are due to rounding.
USA MOBILITY, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (a)
(in thousands)
12/31/09 3/31/10
(unaudited)
Assets
Current assets:
Cash and cash equivalents $ 109,591 $ 115,555
Accounts receivable, net 19,051 17,354
Taxes receivables 5,117 5,136
Prepaid expenses and other 3,016 4,267
Deferred income tax assets, net 1,068 462
Total current assets 137,843 142,774
Property and equipment, net 41,295 36,180
Intangible assets, net 226 466
Deferred income tax assets, net 32,123 26,952
Other assets 2,061 405
Total assets $ 213,548 $ 206,777
Liabilities and stockholders' equity
Current liabilities:
Accounts payable and accrued liabilities $ 35,214 $ 28,929
Customer deposits 888 837
Deferred revenue 7,422 7,035
Total current liabilities 43,524 36,801
Other long-term liabilities 11,228 11,901
Total liabilities 54,752 48,702
Stockholders' equity:
Preferred stock - -
Common stock 2 2
Additional paid-in capital 137,378 133,413
Retained earnings 21,416 24,660
Total stockholders' equity 158,796 158,075
Total liabilities and stockholders' equity $ 213,548 $ 206,777
(a) Slight variations in totals are due to rounding.
USA MOBILITY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (a)
(unaudited and in thousands)
For the three months ended
3/31/09 3/31/10
Cash flows from operating activities:
Net income $ 9,981 $ 8,885
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, amortization and accretion 11,270 7,304
Deferred income tax expense 6,954 5,777
Amortization of stock based compensation 727 263
Provisions for doubtful accounts, service credits and other 1,517 1,225
Non-cash transaction tax accrual adjustments (1,394 ) (350 )
Loss on disposals of property and equipment - 59
Changes in assets and liabilities:
Accounts receivable 1,000 472
Prepaid expenses, intangibles and other assets 345 (31 )
Accounts payable and accrued liabilities (2,373 ) (5,273 )
Customer deposits and deferred revenue (722 ) (438 )
Net cash provided by operating activities 27,305 17,893
Cash flows from investing activities:
Purchases of property and equipment (6,054 ) (1,725 )
Proceeds from disposals of property and equipment 7 38
Net cash used in investing activities (6,047 ) (1,687 )
Cash flows from financing activities:
Cash distributions to stockholders (28,517 ) (5,619 )
Purchase of common stock (2,698 ) (4,623 )
Net cash used in financing activities (31,215 ) (10,242 )
Net (decrease) increase in cash and cash equivalents (9,957 ) 5,964
Cash and cash equivalents, beginning of period 75,032 109,591
Cash and cash equivalents, end of period $ 65,075 $ 115,555
Supplemental disclosure:
Interest paid $ - $ 1
Income taxes paid (state and local) $ 15 $ -
(a) Slight variations in totals are due to rounding.

SOURCE: USA Mobility, Inc.

USA Mobility, Inc.
Bob Lougee, 800-611-8488
bob.lougee@usamobility.com