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USA Mobility Management Discusses Q2 2012 Results - Earnings Call Transcript

Stocks in this article: USMO

Turning to our quarterly results. Let me begin by highlighting what we believed was another outstanding quarter for USA Mobility. On a consolidated basis, we reported solid performance largely consistent with our previously announced financial guidance for 2012. On the Wireless side, we ended the quarter ahead of our key operating goals for subscribers, total revenue and operating cash flow, average revenue per unit, or ARPU, and operating expenses. In addition, our Wireless salesforce exceeded the company's plan for subscribers, including gross additions and net churn. At the same time, our Software business increased quarter-over-quarter revenue and bookings. Our backlog rose to a new high, and we expanded our pipeline of prospective accounts. We also acquired Clinical Test Results Management solution and launched several new software products for the healthcare market.

Overall, we were able to maintain strong consolidated cash flow margins, operate profitably while reducing expenses, and once again, returned capital to our stockholders in the form of dividend distributions.

Shawn will discuss our financial results in more detail in a few minutes, but first, I want to review some key accomplishments we achieved during the quarter. Number one, Wireless subscriber churn showed significant improvement in the second quarter as the rates of paging unit losses reached their best levels in nearly 8 years. These record results were due to an understanding performance by our Wireless sales team, which increased direct gross placements from the prior quarter, while disconnects continued to decline. We were very pleased to see this positive trends in our Wireless business, especially within our top-performing Healthcare segment with a net loss weight improved to a record low 0.2%.

Number two, Wireless revenue trends also continued to improve during the quarter with a quarterly rate of revenue erosion recording at second best level since the second quarter of 2008. The improved rate of Wireless revenue erosion continues to benefit from relatively stable paging ARPU and a slower pace of subscriber churn. Going forward, we expect Wireless subscriber and revenue trends will remain a challenge as technology alternatives continue to evolve. However, we are greatly encouraged by our second quarter results.

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