EX-99.1 2 dex991.htm EXHIBIT 99.1 Exhibit 99.1

Exhibit 99.1

LOGO

5000 Philadelphia Way  •  Lanham  •  Maryland  •  20706-4417  •  U.S.A.

Telephone: 301.731.4233  •  Fax: 301.731.9606  •  Internet: sales@integ.com  •  Web: http://www.integ.com

FOR IMMEDIATE RELEASE

CONTACT:

William M. Bambarger, Jr.

Chief Financial Officer

Integral Systems, Inc.

Phone: 301-731-4233, Ext. 1244

Fax: 301-731-3183

www.integ.com

  

MEDIA CONTACT:

Shany Seawright

Strategic Communications Group

Phone: 240-485-1081

sseawright@gotostrategic.com

 

Integral Systems Announces Financial Results

for the Third Quarter of Fiscal Year 2008

Revenue grew 17%—Management outlook

for the fiscal year remains strong

Lanham, Md., July 24, 2008 — Integral Systems, Inc. (NASDAQ-ISYS) (“Company”) today reported financial results for the third quarter of fiscal 2008. Revenue for the quarter was $41.8 million, up $5.9 million or 16.5% from the third quarter of fiscal 2007. Third quarter income from operations was $7.1 million compared to $5.3 million for the third quarter of the last fiscal year, and net income was $4.7 million ($0.55 per diluted share) compared to $3.8 million ($0.34 per diluted share) for the third quarter of fiscal 2007.

The third quarter results reflect what management believes to be solid financial performance and growth in the Company’s Space Communications Systems segment and the Company’s Government Ground Systems segment. Gross profit and operating income grew significantly in these operating segments as a result of higher revenue and lower overhead support costs. Our Commercial Ground Systems segment was affected by higher legal and support costs to support their international operations.

These results add to an excellent first half of the year, resulting in a 34.2% increase in the year-to-date revenue of $124.0 million compared to $92.3 million for the same period in 2007. “We have significant momentum going into the fourth quarter of this year and the begining of the next fiscal year,” commented John Higginbotham, Chief Executive Officer. “This momentum, combined with our excellent financial resources, allows us to focus on strategic growth initiatives that will continue to drive value for our shareholders.”

The results for the nine months ended June 30, 2008 include a large amount of license revenue generated from the GPS OCX contract in the first quarter and recovery of R&D tax credits from prior years that was recorded in the first quarter as well. Revenue and operating income is expected to be higher in 2008 as a result of these two factors as well as continuing higher demand for the Company’s products and services, particularly with the Air Force and national programs, partially offset by higher costs for investments in R&D efforts and infrastructure developments. The Company had a lower number of outstanding shares in 2008 than 2007 due to recent share repurchases. As a result of all of these factors, management is increasing the Company’s earnings projection for fiscal 2008 to approximately $2.15 on a per share basis.


Included in this projection is the estimated financial impact of equity awards to management and directors projected to be granted in the fourth quarter.

As one of its strategic initiatives, the Company is considering filing a universal shelf registration statement with the Securities and Exchange Commission to facilitate the raising of capital over the next three years.

Mr. Higginbotham and Mr. Bambarger, the Company’s Chief Executive Officer and Chief Financial Officer, respectively, will host a conference call today, July 24, 2008 at 11:30 a.m. Eastern Daylight Time (EDT) to discuss this earnings release and other Company business. To participate or listen to the call, dial 800-950-3502, ID number 21388733. An audio recording of the quarterly conference call will be available starting two hours after the start of the live broadcast. The audio recording will remain available until 12:00 p.m. EDT on July 26, 2008 and can be obtained by calling 800-633-8284, ID number 21388733. The audio recording will also be made available on Integral’s web site at www.integ.com.

About Integral Systems

Founded in 1982, Integral Systems is a leading provider of satellite ground systems and has supported more than 205 different satellite missions for communications, science, meteorological, and earth resource applications. Integral Systems was the first company to offer an integrated suite of Commercial-Off-the-Shelf (COTS) software products for satellite command and control: the EPOCH Integrated Product Suite (IPS) product line. EPOCH IPS has become the world market leader in commercial applications with successful installations on five continents.

Through its wholly-owned subsidiary, SAT Corporation, Integral Systems provides satellite and terrestrial communications signal monitoring systems to satellite operators and users throughout the world. Through its Newpoint Technologies, Inc., subsidiary, Integral Systems also provides software for equipment monitoring and control to satellite operators, broadcasters, and telecommunications firms. Integral Systems’ RT Logic subsidiary builds telemetry processing systems for military applications, including tracking stations, control centers, and range operations. Integral Systems’ Lumistar, Inc., subsidiary provides system- and board-level telemetry acquisition products. Integral Systems has approximately 500 employees working at its headquarters in Lanham, MD, and at other locations in the U.S. and Europe. For more information, visit http://www.integ.com.

Except for statements of historical facts, this news release contains forward-looking statements about the Company, including but not necessarily limited to the Company’s financial projections, all of which are based on the Company’s current expectations. There can be no assurance that the Company’s projections will in fact be achieved and these projections do not reflect any acquisitions or divestitures that may occur in the future. The forward-looking statements contained in this news release are subject to additional risks and uncertainties, including the Company’s reliance on contracts and subcontracts funded by the U.S. government, intense competition in the ground systems industry, the competitive bidding process to which the Company’s government and commercial contracts are subject, the Company’s dependence on the satellite industry for most of its revenues, rapid technological changes in the satellite industry, the Company’s acquisition strategy and those other risks noted in the Company’s SEC filings. The Company assumes no obligation to update or revise any forward-looking statements appearing in this news release.

Nothing in this release constitutes an offer of any security for sale.

 

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INTEGRAL SYSTEMS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(in thousands of dollars, except share amounts)

 

     June 30,
2008
   September 30,
2007
     (Unaudited)     
Assets      

Current assets:

     

Cash and cash equivalents

   $ 7,948    $ 23,894

Marketable securities, net

     429      568

Accounts receivable, net of allowance for doubtful accounts

     21,524      19,267

Cost and estimated earnings in excess of billings on uncompleted contracts

     30,585      16,530

Prepaid expenses

     630      1,464

Inventory

     6,022      5,145

Other current assets

     2,667      1,664
             

Total current assets

     69,805      68,532

Property and equipment, net

     17,177      15,234

Goodwill

     51,304      51,304

Intangible assets, net

     13      22

Software development costs, net

     49      198

Other assets

     822      771
             

Total assets

   $ 139,170    $ 136,061
             
Liabilities and Stockholders’ Equity      

Current liabilities:

     

Accounts payable

   $ 7,230    $ 9,416

Accrued expenses

     12,647      8,948

Billings in excess of revenue for contracts in progress

     15,421      11,150
             

Total current liabilities

     35,298      29,514

Other non-current liabilities

     66      —  
             

Total liabilities

     35,364      29,514

Stockholders’ equity:

     

Common stock, $.01 par value, 40,000,000 shares authorized, and 8,538,517 and 9,381,172 shares issued and outstanding at June 30, 2008 and September 30, 2007, respectively

     85      94

Additional paid-in capital

     58,898      60,907

Retained earnings

     44,777      45,537

Accumulated other comprehensive income

     46      9
             

Total stockholders’ equity

     103,806      106,547
             

Total liabilities and stockholders’ equity

   $ 139,170    $ 136,061
             

 

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INTEGRAL SYSTEMS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands of dollars, except per share amounts)

 

     Three Months Ended
June 30,
   Nine Months Ended
June 30,
     2008    2007    2008    2007
     (Unaudited)    (Unaudited)

Revenue

   $ 41,797    $ 35,872    $ 123,959    $ 92,307

Cost of revenue

     26,221      24,056      80,838      62,683
                           

Gross profit

     15,576      11,816      43,121      29,624
                           

Operating Expenses

           

SG&A

     8,092      5,830      20,177      16,709

Research & development

     385      662      1,713      1,636

Intangible asset amortization

     3      40      8      159
                           

Total Operating Expenses

     8,480      6,532      21,898      18,504
                           

Income from operations

     7,096      5,284      21,223      11,120
                           

Other income

     63      460      263      1,093
                           

Income before income tax

     7,159      5,744      21,486      12,213
                           

Provision for income taxes

     2,453      1,926      5,784      4,194
                           

Net income

   $ 4,706    $ 3,818    $ 15,702    $ 8,019
                           

Weighted average number of common shares—Basic

     8,490      11,168      8,969      11,111
                           

Earnings per share—Basic

   $ 0.55    $ 0.34    $ 1.75    $ 0.72
                           

Weighted average number of common shares—Diluted

     8,569      11,203      8,986      11,149
                           

Earnings per share—Diluted

   $ 0.55    $ 0.34    $ 1.75    $ 0.72
                           

Cash dividends per share

   $ —      $ 0.07    $ —      $ 0.21

 

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CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands of dollars, except per share amounts)

 

     Three Months Ended
June 30,
    Nine Months Ended
June 30,
 
     2008     2007     2008     2007  

Revenue:

        

Ground Systems—Government

   $ 23,331     $ 20,388     $ 67,517     $ 49,517  

Ground Systems—Commercial

     6,962       5,998       21,343       17,731  

Space Communication Systems

     15,554       11,477       41,880       30,585  

Elimination of intersegment sales

     (4,050 )     (1,991 )     (6,781 )     (5,526 )
                                

Total revenue

     41,797       35,872       123,959       92,307  
                                

Cost of revenue:

        

Ground Systems—Government

     15,887       16,017       48,923       39,826  

Ground Systems—Commercial

     5,460       3,193       14,007       10,381  

Space Communication Systems

     9,062       6,837       24,841       18,000  

Elimination of intersegment cost

     (4,188 )     (1,991 )     (6,933 )     (5,524 )
                                

Total cost of revenue

     26,221       24,056       80,838       62,683  
                                

Gross profit:

        

Ground Systems—Government

     7,444       4,371       18,594       9,691  

Gross Margin

     31.9 %     21.4 %     27.5 %     19.6 %

Ground Systems—Commercial

     1,502       2,805       7,336       7,350  

Gross Margin

     21.6 %     46.8 %     34.4 %     41.5 %

Space Communication Systems

     6,492       4,640       17,039       12,585  

Gross Margin

     41.7 %     40.4 %     40.7 %     41.1 %

Corporate and elimination of intersegment sales

     138       —         152       (2 )
                                

Total gross profit

     15,576       11,816       43,121       29,624  
                                

Gross Margin

     37.3 %     32.9 %     34.8 %     32.1 %

Operating expense:

        

Ground Systems—Government

     4,653       2,273       9,524       5,742  

Ground Systems—Commercial

     931       1,609       3,744       3,990  

Space Communication Systems

     2,820       2,122       7,058       5,981  

Selling, general & administrative expense and intersegment sales

     76       528       1,572       2,791  
                                

Total operating expense

     8,480       6,532       21,898       18,504  
                                

Operating income:

        

Ground Systems—Government

     2,791       2,098       9,070       3,949  

Operating margin

     12.0 %     10.3 %     13.4 %     8.0 %

Ground Systems—Commercial

     571       1,196       3,592       3,360  

Operating margin

     8.2 %     19.9 %     16.8 %     18.9 %

Space Communication Systems

     3,672       2,518       9,981       6,604  

Operating margin

     23.6 %     21.9 %     23.8 %     21.6 %

Selling, general & administrative expense

     62       (528 )     (1,420 )     (2,793 )
                                

Total operating income

     7,096       5,284       21,223       11,120  
                                

Operating margin

     17.0 %     14.7 %     17.1 %     12.0 %

 

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