Let me begin by highlighting what we believe was an extraordinarily successful first quarter for USA Mobility. Despite a still sluggish economy, high jobless rates nationwide and continued migration of customers to alternative wireless services, we ended the quarter ahead of our key operating goals for subscribers, total revenue, average revenue per unit or ARPU, operating expenses and operating cash flow. At the same time, we were able to maintain cash flow margins, operate profitably with a low cost operating structure and once again return capital to our stockholders.Tom will discuss our financial results in more detail in a few minutes, but first I want to point out just a few of the key accomplishments we achieved during the quarter. Number one, subscriber and revenue trends showed significant improvement in the first quarter as the economic recovery gained momentum and unemployment rates began to stabilize. Our annual rate of subscriber erosion for the first quarter of 2010 was the lowest in 15 months, while our quarterly lost rate was the best in more than two years. Number two, we are very pleased with the progress we made in reducing operating expenses in the first quarter. Excluding depreciation, amortization and accretion, operating expenses declined 20% over the past year and are down nearly 40% from two years ago. Number three, the slowdown in revenue erosion and continued cost management resulted in an increase in earnings before interest, taxes, depreciation, amortization and accretion or EBITDA, for the first quarter. It also allowed us to maintain and very strong EBITDA margin of 35%. Number four, most importantly, for stockholders we continue to meet our goal of generating sufficient free cash flow during the first quarter to return capital to stockholders, consistent with our capital allocation strategy. We have produced $17.9 million in cash from operations in the first quarter, allowing us to pay a regular quarterly cash distribution of $0.25 per share on March 31, 2010.
In addition, our Board of Directors, yesterday, declared a regular quarterly cash distribution of $0.25 per share to be paid on June 25, 2010.Number five, we've purchased 364,407 shares of the company's common stock during the first quarter under our stock repurchase program that commenced in August of 2008. As of April 1st, approximately $20.4 million remain available for purchases under the currently approved plan. Overall, we are very pleased with our results for the first quarter and I believe we're well positioned for a solid year in 2010. At this point, I'll ask Tom Schilling, our COO and CFO, to review our first quarter financial results and provide additional comments on our recent operating performance. Tom? Tom Schilling Thanks, Vince and good morning. As Vince mentioned, we're very pleased with the company's first quarter results, which are in line with our previously announced financial guidance. Continued reductions in operating expense combined with reduced customer churn and an increase in ARPU contributed to strong cash flows and a higher EBITDA margin for the quarter. We're especially pleased with the improvement in subscriber trends during the quarter, which had deteriorated significantly for most of 2009, as a result of the weak economy and sharp increase in unemployment. We ended the quarter with 2,099,000 subscribers, a net decrease of 83,000 units during the quarter, compared to a decline of 115,000 units in the prior quarter and 208,000 units in the year earlier quarter. The quarterly rate of subscriber loss improved to 3.8% from 5% in the fourth quarter and 7.4% in the year earlier quarter. Our annual rate of net unit loss improved to 19.5% compared to 22.5% in the fourth quarter and 21.8% in the year earlier quarter. Total growth placements increased to 76,000 in the first quarter from 68,000 in the fourth quarter, while disconnects declined to 159,000 from 183,000 in the prior quarter. Read the rest of this transcript for free on seekingalpha.com