8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): December 9, 2009

INTEGRAL SYSTEMS, INC.

(Exact name of registrant as specified in its charter)

Maryland	0-18603	52-1267968
(State or other jurisdiction of incorporation or organization)	(Commission File Number)	(I.R.S. Employer Identification No.)

6721 Columbia Gateway Drive

Columbia, Maryland 21046

(Address of principal executive offices)

(443) 539-5008

(Registrant’s telephone number, including area code)

N/A

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Section 7 – Regulation FD

Item 7.01 Regulation FD Disclosure.

Integral Systems, Inc., a Maryland corporation (the “Company”, “we”, “our”), is furnishing this Current Report on Form 8-K pursuant to Regulation FD in connection with the disclosure of information from a slide show presentation given by the Company from time to time in conferences and other discussions with investors, analysts and other interested parties. The slide show presentation is available for viewing at our website located at http://www.integ.com, although we reserve the right to discontinue that availability at any time.

The information in this Current Report on Form 8-K shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities under that section. Furthermore, such information shall not be deemed incorporated by reference into any of the Company’s reports or filings with the Securities and Exchange Commission, whether made before or after the date hereof, except as expressly set forth by specific reference in such report or filing.

Section 9 – Financial Statements and Exhibits

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

Exhibit Number	Description
99.1	Slide Show Presentation

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	INTEGRAL SYSTEMS, INC.
Dated: December 9, 2009	By:	/s/ WILLIAM M. BAMBARGER, JR.
	Name: William M. Bambarger, Jr.
	Title:   Chief Financial Officer and Treasurer

EXHIBIT INDEX

Exhibit Number	Description
99.1	Slide Show Presentation.

EX-99.1

Winter 2009

Exhibit 99.1

2

•

This

presentation

contains

forward-looking

statements

within

the

meaning

of

Section

27A

of

the

Securities

Act

of

1933

and

Section

21E

of

the

Securities

Exchange

Act.

Such

forward-

looking

statements

include,

but

are

not

necessarily

limited

to,

our

anticipated

financial

performance,

business

prospects,

technological

developments,

new

products,

research

and development activities and similar statements concerning anticipated future events

and expectations that are not historical facts.

•

These forward-looking statements are based on current information and expectations. We

caution you that these statements are not guarantees of future performance and are

subject to numerous risks and uncertainties, including our reliance on contracts and

subcontracts funded by the U.S. government, intense competition in the ground systems

industry, the competitive bidding process to which our government and commercial

contracts are subject, our dependence on the satellite industry for most of our revenues,

rapid technological changes in the satellite industry, our acquisition strategy and other

risks and uncertainties noted in our Securities and Exchange Commission filings, including

our Annual Report on Form

10-K for the year ended September 30, 2008, and subsequent

filings.

We undertake no obligation to publicly update or revise any forward-looking

statement,

whether

as

a

result

of

new

information,

future

events

or

otherwise.

INTEGRAL SYSTEMS

SAFE HARBOR

3

INTEGRAL SYSTEMS

OUR VISION

To be the market leader in

providing integrated

solutions for satellite and

terrestrial networks

•

NasdaqGS:

ISYS

•

Founded:

1982

•

Est. FY2009 Sales:

$164.0 million

•

Est. FY2009 Earnings:

$2.9 million/$0.15 per diluted share

•

Employees:

600 employees -

13 Locations in five countries

U.S.

SBA

Region

III

Contractor

of

the

Year,

2009

Washington Post

Top

200

Companies,

2009

Forbes

Top 200 Small Companies in America, 2008

INTEGRAL SYSTEMS

AT A GLANCE

5

World Class Systems

Engineering

Best-In-Class Commercial

Product-Based Solutions

Back to Basics

•

Disciplined Investment in R&D and B&P

•

Reduction of Indirect and Unallowable Costs

•

Improved Communications

•

Improved Forecasting

•

Renewed Focus on Core Business

Improved Performance

•

Emphasis on Backlog Growth & Gross Margin

•

Reasonable Organic Growth

•

Strategic Acquisitions

•

Focus on Next Nearest Market Opportunities

—

Other Military Services

—

Managed Services

—

Network: Design, Installation, Operation

INTEGRAL SYSTEMS

BUSINESS APPROACH

6

Our Commitment to Customer Service…

Integral Systems Has Supported 250+ Satellite Missions

INTEGRAL SYSTEMS

CUSTOMER COMMITMENT

7

Military &

Intelligence

Civil &

Commercial

Products

Services

•

US Air Force

•

DISA

•

Intelligence

•

NASA

•

NOAA

•

Commercial Operators

•

International

•

U.S. Military

•

Satellite Operators

•

Network Operators

•

Commercial and

government satellite

operators

•

Space Situational

Awareness

•

U.S. Army, U.S. Navy

•

NATO

•

Antenna/RF systems

integration

•

Leverage footprint

•

DHS

•

Military Test Range

•

Interference

detection,

characterization, and

geolocation

•

Satellite

communications

managed services

•

Technical support

INTEGRAL SYSTEMS

ALIGNED OPERATIONS

8

INTEGRAL SYSTEMS

GLOBAL OPERATIONS

Current presence

Future Services Expansion (Teleports)

Future Network Operation Center (Services)

AUSTRALIA

BRAZIL

SINGAPORE

UAE

HAWAII

NOC

COLUMBIA

NOC

TOULOUSE

UK

NOC

C. SPRINGS

9

Services Offered

•

Network Operations Management

—

Network planning, resource allocation,

and link optimization

—

Satellite transponder, network, and link

Quality of Service monitoring

—

RF interference detection and

geolocation

—

Service Level Agreement (SLA) validation

•

Technical Services & Sustainment

—

Remote monitoring and control of

equipment at teleport & customer

ground terminal facilities

—

Tech refresh and sustainment

—

Expert operations and maintenance

services

•

Systems Integration

—

Low cost turn-key systems integration

capabilities

Rollout Strategy

1. Initial Infrastructure from current ISYS

products

—

satID

from RT Logic (geolocation)

—

Monics

from SAT Corp. (signal

monitoring)

—

Compass from Newpoint

(network

management)

—

Antennas purchased COTS

—

COTS work stations and servers

2. Global Services offered initially to

existing customer through existing

sales channels

3. Grow regionally as customer base

evolves

—

Leverage current international sales

channels

INTEGRAL SYSTEMS

SERVICE SOLUTIONS

10

•

Interference Detection &

Geolocation

•

Emerging Niche Satellite

Operators

•

Expanded Military Footprint

•

Space Situational Awareness

•

Network Operations

–

Remote site monitoring

–

Data fusion

–

Payload  signal processing

•

Managed Services

–

Outsourced operations

management and systems

monitoring

–

Service-level

agreement/Quality of

Service (QoS) management

INTEGRAL SYSTEMS

GROWTH STRATEGY

11

Recent Contract Awards:

•Restructured U.S. Air Force contract for rapid

attack, identification, detection (RAIDRS):

$77.0M ceiling

•Command

and

Control

System

–

Consolidated

(CCS-C): $7.5M Extended through 2011

•Hill Air Force Base: $4M new contract

Key Updates:

•

Opened Integral Systems Europe UK in

FY2009

•

Expect International to represent over 10%

of total revenue in FY10

•

Announced 6 new/expanded contracts in

Asia in FY09 totaling ~$15M

*BASED UPON FY 2009 RESULTS

SALES BY SEGMENT*

SALES GEOGRAPHY*

INTEGRAL SYSTEMS

DIVERSIFIED GLOBAL PERSPECTIVE

12

FINANCIAL OVERVIEW

13

Back to Basics Management Approach

•

Cost-cutting measures implemented

•

Aligned for growth –

capitalize on installed base

•

Completed infrastructure investments

Management Enhancement

•

Appointment of Paul G. Casner

as President & CEO

•

Appointment of Maj

Gen (Ret.) H. Marshal Ward as

COO

Business Developments

•

Major Air Force Contracts extended through

2011/2012 -

Over $50Min new backlog

•

International Expansion

—

Approx. $15.0M in Asia in FY09

—

Significant European contracts with CNES, Thales,

NATO

FY10 GUIDANCE

Revenue

$170M -

$174M

Gross Profit Margin

35% -

37%

EBITDA

$20M

Bookings

$200M

Cash Flow from

Operations

$25M -

$30M

INTEGRAL SYSTEMS

FY 2010 OUTLOOK & RECENT DEVELOPMENTS

14

REVENUE

EBITDA & MARGIN

GROSS PROFIT MARGIN

CAPITAL EXPENDITURES

INTEGRAL SYSTEMS

DIVERSIFIED GLOBAL PERSPECTIVE

15

Key Opportunities

FY10 –

FY12

•

Space Network Ground Segment

Sustainment

•

GPS Operational Control Segment

(OCX) Phase B

•

Restricted Program, National

Reconnaissance Office (NRO)

•

RAIDRS ECP 10

•

Space Situational Awareness

•

NATO Expansion

•

Managed Services

•

Antenna and Ground System

Integration (ISE UK)

INTEGRAL SYSTEMS

BOOKINGS, BACKLOG, AND PIPELINE

16

INTEGRAL SYSTEMS

SUMMARY

17

BACK UP

INTEGRAL SYSTEMS

18

USE OF NON-GAAP FINANCIAL MEASURES

INTEGRAL SYSTEMS

EBITDA (earnings before interest, taxes, depreciation and amortization) is a non-GAAP financial

measure used by management to evaluate operating performance.  Management believes that the

presentation of EBITDA helps management and investors to make a meaningful comparison

between our operating results and those of other companies, as well as providing a consistent

comparison of our relative historical financial performance.  The presentation of this non-GAAP

financial measure is not to be considered in isolation or as a substitute for our financial results

prepared

in

accordance

with

GAAP.

Below

are

reconciliations

of

fiscal

years

2007

-

2012

net

income to EBITDA:

Fiscal Year Ended September 25, 2009

2007

2008

2009

2010(E)

2011(E)

2012(E)

($ millions)

Net Income

$      12.8

$      18.2

$        1.1

$        8.0

$      13.5

$      16.0

Other Income (Expense), net

(2.2)

(0.3)

0.1

0.4

0.6

0.8

Provision for Income Taxes

6.3

7.1

(1.0)

4.5

5.5

6.2

Income From Operations

$      16.9

$      25.0

$        0.1

$      12.9

$      19.6

$      23.0

Non-Cash Stock Compensation

0.9

1.1

3.5

3.1

3.2

3.5

Depreciation and Amortization

3.0

2.6

4.3

5.0

5.2

5.5

EBITDA

$      20.8

$      28.7

$        8.0

$      21.0

$      28.0

$      32.0