Metrocall Reports Third Quarter Operating Results; Achieves Seventh Consecutive Quarter of Free Cash Flow Growth.Business Editors ALEXANDRIA Alexandria, city, Egypt Alexandria, Arabic Al Iskandariyah, city (1996 pop. 3,328,196), N Egypt, on the Mediterranean Sea. It is at the western extremity of the Nile River delta, situated on a narrow isthmus between the sea and Lake Mareotis (Maryut). , Va.--(BUSINESS WIRE)--Nov. 10, 2003 Metrocall Holdings, Inc. (OTCBB OTCBB See OTC Bulletin Board (OTCBB). :MTOH), a leading provider of paging and wireless messaging services, today announced net income available to common shareholders of $5.6 million and $8.8 million for the three and nine months ending September September: see month. 30, 2003, respectively. Consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: net revenues for the third quarter of 2003 were $78.4 million, bringing the aggregate net revenues for the nine-months ending September 30, 2003 to $246.6 million. "We are pleased and encouraged by our operating results and trend improvement in the third quarter," stated Vincent D. Kelly Kel·ly , Ellsworth Born 1923. American abstract painter and sculptor whose works are characterized by flat color areas with sharply defined edges. Kelly, Emmett 1898-1979. , President & CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. of Metrocall. "Our operating margins Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: continued to increase as a result of our cost containment cost containment, n the features of a dental benefits program or of the administration of the program designed to reduce or eliminate certain charges to the plan. and efficiency improvement programs, leading to our seventh consecutive quarter of free cash flow growth." Net revenues for the third quarter decreased by $3.4 million or 4.2% from the second quarter of 2003. Mr. Kelly continued, "Although we experienced a $3.4 million loss in revenue in the third quarter, the rate of decrease has slowed from the preceding quarters in 2003 and 2002. We are optimistic op·ti·mist n. 1. One who usually expects a favorable outcome. 2. A believer in philosophical optimism. op that our customer retention initiatives along with our focus on customer service and our wireless portfolio of products and services will help with our revenue retention results in future periods." Metrocall reported a decline of 118,438 units in service during the third quarter comprised of 110,383 traditional paging units and 8,055 advanced (two-way) messaging units. Average revenue per direct and indirect unit in service was $7.06 for traditional and $24.63 for advanced messaging, representing increases of $0.11 and $1.59 per unit, respectively from the three months ended June June: see month. 30, 2003. "Our operating results through September 30, 2003 enabled us to redeem redeem v. to buy back, as when an owner who had mortgaged his/her real property pays off the debt. The term also refers to paying the amount due and all charges after a foreclosure (due to failure to make payments when due) has begun. nearly one third of our series A preferred obligations during the quarter," said Mr. Kelly. "Since implementing our plan of reorganization The process of carrying out, through agreements and legal proceedings, a business plan for winding up the affairs of, or foreclosing a mortgage upon, the property of a corporation that has become insolvent. in October October: see month. , 2002 we have retired approximately $80 million of long-term debt Long-Term Debt Loans and financial obligations lasting over one year. Notes: For example debts obligations such as bonds and notes which have maturities greater than one year would be considered long-term debt. securities and $20 million of series A preferred stock Stock shares that have preferential rights to dividends or to amounts distributable on liquidation, or to both, ahead of common shareholders. Preferred stock is given preference over common stock. Holders of preferred stock receive dividends at a fixed annual rate. ." As of September 30, 2003, Metrocall had cash and cash equivalents of $13.7 million, no long-term debt securities and $46.7 million aggregate liquidation value Liquidation value Net amount that could be realized by selling the assets of a firm after paying the debt. of redeemable Redeemable Eligible for redemption under the terms of an indenture. series A preferred outstanding. Metrocall's operating results include separate results and cash flows prior to its emergence from bankruptcy bankruptcy, in law, settlement of the liabilities of a person or organization wholly or partially unable to meet financial obligations. The purposes are to distribute, through a court-appointed receiver, the bankrupt's assets equitably among creditors and, in most on October 8, 2002 (the Predecessor Company), as well as operating results and cash flows after its emergence from bankruptcy (the Reorganized re·or·gan·ize v. re·or·gan·ized, re·or·gan·iz·ing, re·or·gan·iz·es v.tr. To organize again or anew. v.intr. To undergo or effect changes in organization. Company), reflecting the application of "fresh-start" accounting that resulted from the Company's Chapter 11 reorganization. Consequently, and due to other reorganization-related events and adjustments, the Predecessor Company's financial statements, share and per share information for the three and nine-month periods ending September 30, 2002 are not comparable to the Reorganized Company's financial statements for the three and nine-month periods ending September 30, 2003. In addition, all share and per share amounts of the Reorganized Company give effect to the 5 for 1 common stock split effected through a common stock dividend on October 16, 2003. About Metrocall, Inc. Metrocall, Inc., headquartered in Alexandria, Virginia Alexandria is an independent city in the Commonwealth of Virginia. As of the 2000 census, the city had a total population of 128,284. Located along the Western bank of the Potomac River, Alexandria is approximately 6 miles (9.6 kilometers) south of downtown Washington, DC. , is the nation's second largest narrowband In communications, transmission rates up to T1 speeds (1.544 Mbps). The upper limit is moving target. At one time, narrowband meant 150 bps (that is 150 bits per second!). Then, the upper limit became 2,400 bps. Later, it moved to 64 Kbps. Contrast with wideband and broadband. wireless messaging provider offering paging products and other wireless services to business and individual subscribers. With national networks and operations, the Company provides reliable and cost effective wireless services that are well suited for solving the mobile business communication needs. Metrocall focuses on the business-to-business  This article or section needs copy editing for grammar, style, cohesion, tone and/or spelling.You can assist by [ editing it] now. marketplace and supports organizations of all sizes, with a special emphasis on the medical and government sectors. In addition to traditional numeric numeric see numerical. numeric cluster see ten-key pad. and one-way one-way adj. 1. Moving or permitting movement in one direction only: a one-way street. 2. Providing for travel in one direction only: a one-way ticket. text paging, the Company also offers two-way interactive advanced messaging, wireless e-mail solutions, as well as mobile voice and data services through AT&T Wireless and Nextel (Nextel Communications, Inc., Reston, VA, www.nextel.com) A wireless communications carrier founded in New Jersey in 1987 as Fleet Call, a two-way radio service. Throughout the late 1980s and 1990s, the company acquired a large number of SMR (Specialized Mobile Radio) operators and turned . Also, Metrocall offers Integrated Resource Management Systems with wireless connectivity solutions for medical, business and campus environments. For more information on Metrocall please visit our Web site and on-line store at www.metrocall.com or call 800-800-2337. Safe Harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. Statement Under the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995 This press release includes "forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. ," within the meaning of the federal securities laws, that involve uncertainties and risks. These include statements regarding events or developments that Metrocall Holdings expects or anticipates will occur in the future. A number of risks and uncertainties could cause actual results, events, and developments to differ from expectations. Business Risks include the possibility that two-way service may lack vendor support, quantity and quality. Please refer to Metrocall's most recent quarterly report on Form 10-Q Form 10-Q See 10-Q. and annual report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. , and any subsequently filed reports on Form 10-Q and Form 8-K Form 8-K The form required by the SEC when a publicly held company incurs any event that might affect its financial situation or the share value of its stock. Form 8-K See 8-K. , as well as its other filings with the Securities and Exchange Commission, for a complete discussion of these and other important factors that could cause actual results to differ materially from those projected by these forward-looking statements.
Metrocall Holdings, Inc. and Subsidiaries
Consolidated Statements of Operations
Unaudited
(Dollars in thousands, except device, share and per share amounts)
Reorganized Predecessor Reorganized Predecessor
Company Company Company Company
----------- ----------- ----------- -----------
Three Months Ended Nine Months Ended
September 30, September 30,
2003 2002 2003 2002
----------- ----------- ----------- -----------
Revenues
Service, rent and
maintenance revenues $75,459 $92,395 $237,260 $294,003
Product sales 4,155 6,833 12,528 23,777
---------- ----------- ---------- -----------
79,614 99,228 249,788 317,780
Net book value of
products sold (1,212) (3,675) (3,143) (14,176)
---------- ----------- ---------- -----------
78,402 95,553 246,645 303,604
---------- ----------- ---------- -----------
Operating
Expenses
Service, rent and
maintenance 20,877 28,676 67,681 88,835
Selling and
marketing 9,174 12,778 31,182 50,064
General and
administrative 21,970 31,659 72,156 100,744
Restructuring 521 5,951 6,247 18,505
Depreciation and
amortization 6,432 13,512 29,114 49,332
---------- ----------- ---------- -----------
58,974 92,576 206,380 307,480
---------- ----------- ---------- -----------
Income/(loss)
from
operations 19,428 2,977 40,265 (3,876)
Interest
expense (805) (2,659) (6,703) (39,364)
Interest expense -
dividends and
accretion of series A
preferred (1) (6,413) - (6,413) -
Interest and other
income (expense) 97 594 329 (1,036)
---------- ----------- ---------- -----------
Income/(loss) before
income tax provision 12,307 912 27,478 (44,276)
Income tax
provision (6,725) - (12,537) -
---------- ----------- ---------- -----------
Net
income/(loss) 5,582 912 14,941 (44,276)
Preferred
dividends - - (6,092) (4,855)
Reorganization item -
accretion of
liquidation preference - - - (4,715)
---------- ----------- ---------- -----------
Income/(loss)
attributable
to common
stockholders $5,582 $912 $8,849 $(53,846)
========== =========== ========== ===========
Basic and diluted
income/(loss) per
share
attributable to
common stockholders
Basic income/(loss)
attributable to
common stockholders $1.13 $0.01 $1.78 $(0.60)
Diluted income/(loss)
attributable to
common stockholders $1.08 $0.01 $1.75 $(0.60)
Basic weighted-average
number of common
shares outstanding 4,960,200 89,975,772 4,958,597 89,975,772
Diluted weighted-
average number of
common shares
outstanding 5,161,502 89,975,772 5,054,987 89,975,772
(1) Beginning July 1, 2003, we adopted the provisions of SFAS No.
150,"Accounting for Certain Financial Instruments with
Characteristics of both Liabilities and Equity." Pursuant to SFAS
No. 150, for periods subsequent to June 30, 2003, we recorded
dividends and accretion expenses of our mandatorily redeemable
series A preferred stock as a component of interest expense in the
determination of net income for the period. Prior to July 1, 2003,
dividends and accretion expenses had been excluded from net income
and reflected as a reduction to net income in the determination of
income available to common stockholders. Under the provisions of
SFAS No. 150, no prior periods (periods ending prior to July 1,
2003) were re-classifed to conform to the presentation stipulated
by the Statement.
Reorganized Predecessor Reorganized Predecessor
Company Company Company Company
----------- ----------- ----------- -----------
Three Months Ended Nine Months Ended
September 30, September 30,
Other Selected
Data: 2003 2002 2003 2002
----------- ----------- ----------- -----------
Net revenues $78,402 $95,553 $246,645 $303,604
Operating cash flow
or EBITDA $26,381 $22,440 $75,626 $63,961
Operating cash flow
margin on net
revenues 33.6% 23.5% 30.7% 21.1%
Interest expenses
paid $- $2,612 $798 $7,917
Capital
expenditures $2,744 $4,010 $5,914 $23,918
Free cash flow $23,637 $15,818 $68,914 $32,126
Free cash flow margin
on net revenues 30.1% 16.6% 27.9% 10.6%
Net cash provided by
operating activities $28,666 $25,302 $76,587 $54,108
Net cash used for
investing activities $(3,403) $(5,281) $(5,478) $(24,679)
Net cash used for
financing activities $(22,760) $(209) $(104,923) $(614)
Units in service
(end of period) 3,013,426 4,071,547 3,013,426 4,071,547
Composite ARPU $8.13 $7.10 $7.86 $6.79
Non-GAAP measures:
Operating cash flow and free cash flow used in this press release
are non-GAAP financial measures as defined by Regulation G adopted by
the Securities and Exchange Commission ("Regulation G"). Operating
cash flow or EBITDA is defined as earnings (net income) before
interest expenses, income taxes, depreciation and amortization, and
restructuring expenses. Free cash flow is defined as operating cash
flow less amounts paid for interest on senior secured and subordinated
long-term debt and capital expenditures. As required by Regulation G,
Metrocall is providing the following reconciliation of these measures
to the most directly comparable GAAP measure.
Operating cash flow and free cash flow are measures used by
financial analysts and institutions for evaluating financial
performance of companies in our industry. Our management uses these
measures as a basis for assessing operating efficiency, overall
financial performance and profitability. They should not be considered
as a substitute for net income (loss), operating income, cash flows
from operating activities or any other measure that is calculated in
accordance with GAAP and they may not be comparable to similar
measures employed by other companies.
Reconciliation of Net income to
operating cash flow
and computation of
free cash flow
Net income/(loss) $5,582 $912 $14,941 $(44,276)
Income tax provision 6,725 - 12,537 -
Interest expense and other
income 708 2,065 6,374 40,400
Interest expense - dividends
and accretion on series A
preferred 6,413 - 6,413 -
Depreciation and amortization 6,432 13,512 29,114 49,332
Restructuring expenses 521 5,951 6,247 18,505
-------- -------- -------- ---------
Operating cash flow or EBITDA 26,381 22,440 75,626 63,961
Cash interest paid on LT
senior secured and sub. debt - 2,612 798 7,917
Capital expenditures 2,744 4,010 5,914 23,918
-------- -------- -------- ---------
Free cash flow $23,637 $15,818 $68,914 $32,126
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