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, 2010

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))

Item 7.01. Regulation FD Disclosure

Integral Systems, Inc., a Maryland corporation (the “Company”), is furnishing this Current Report on Form 8-K in connection with a presentation that members of the Company’s management will make to investors on December 9, 2010 and that may be given by the Company from time to time in conferences and other discussions with investors, analysts and other interested parties. A copy of the slide show accompanying the presentation is furnished as Exhibit 99.1 to this Current Report on Form 8-K.

The information in this Current Report on Form 8-K, including Exhibit 99.1 attached hereto, 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.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

The following material is attached as an exhibit to this Current Report on Form 8-K.

Exhibit Number	Description
99.1	December 2010 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, 2010	By:	/s/    CHRISTOPHER B. ROBERTS
	Name:	Christopher B. Roberts
	Title:	Chief Financial Officer

EXHIBIT INDEX

Exhibit Number	Description
99.1	December 2010 Slide Show Presentation.

EX-99.1

DECEMBER 2010

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

24,

2010,

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

INTEGRAL SYSTEMS

AT A GLANCE

The Integral Systems Family of Solution Providers

•

NasdaqGS:

ISYS

•

Founded:

1982

•

Employees:

~700 employees

•

Locations:

17 locations

4

INTEGRAL SYSTEMS

DIVERSIFIED GLOBAL CUSTOMER BASE

A Leader in Our Industry:

•

U.S.

SBA

Region

III

Contractor

of

the

Year,

2009

•

Washington

Post

Top

200

Companies,

2009

INTEGRAL SYSTEMS

MARKET LEADER IN COMMERCIAL SPACE CONTROL

6

Enterprise Network Management

•

Communications Infrastructure Management (Newpoint

Compass)

•

Remote Site Monitoring (Newpoint

Mercury)

Signal Processing & Data Communications

•

Software-Defined Front-End Systems (RT Logic)

•

SATCOM-On-The-Move (SATCOM Solutions)

Communications Information Assurance

•

Interference Detection; RF Monitoring; Digital Signal Processing

•

Spectrum Monitoring (SigMon), Interference Geolocation

(satID)

Services

•

Satellite Communications Network Operations (SATCOM NetOps)

•

Subscription Services

INTEGRAL SYSTEMS

MARKET SEGMENTS

INTEGRAL SYSTEMS

ALIGNED OPERATIONS

8

X, Ku, and Ka Band Micro Terminals

•

Smaller, Lighter, More Power Efficient SATCOM Terminals

•

Enable SATCOM-on-the-Move for Military, Special Operations,

National Guard, Government Agencies

SATCOM Solid State Power Amplifiers (SSPA)

•

Smaller, Lighter, More Power Efficient

•

Ku, Ka -Band 25W –

100W

•

Travelling Wave Tube Amplifier (TWTA) Replacement

Space Situational Awareness & Cyber Security

•

RF Interference, Detection, Geolocation & Cataloging

•

Cyber Enabled Products

•

Space Situational Awareness Architecture

INTEGRAL SYSTEMS

FUTURE GROWTH ENGINES

9

Intelligence Programs

•

Satellite Command &Control (Market Leader for Commercial Geo

Operations)

•

SATCOM RFI Detection, Characterization, & Geolocation

•

SATCOM Data Link Information Assurance & Cyber Security

Unmanned Aerial Systems (UAS)

•

Common Data Link Test Sets –

We Are the Gold Standard

•

UAS Modems & Communication Systems

•

UAS Flight & Ground RF Interference (RFI) Detection &

Countermeasure Systems

Network Operations Services

•

Global Quality of Service, RFI Detection & Geolocation Services for

Future COMSATCOM Services Acquisition (FCSA)

•

RFI, Geolocation, & Network Operations Outsourcing for SATCOM

Network Providers

•

SATCOM Data Link Information Assurance & Cyber Security

INTEGRAL SYSTEMS

FUTURE GROWTH ENGINES

10

INTEGRAL SYSTEMS

GLOBAL SERVICES CAPABILITIES

11

FINANCIAL OVERVIEW

12

Recent Developments

•

Accounting

–

$2.8M Lease Reserve on Previous HQ Facility

o

Anticipate Cash Generation of ~$1M over 5 Years

–

Resolved Material Weakness in Revenue Recognition

–

Resolving Material Weakness in Internal Controls in

Financial Reporting

•

Operations:

–

Announced Agreement with the Vintage Group

–

Announced over $50M in Contract Awards

–

Announced new RFI Mitigation Capabilities for Test

Ranges

Recent Contract Announcements

•

SATCOM Solutions Division Awarded $5M IDIQ

•

Integral Systems Awarded $4.1M Contract to

Upgrade NOAA Polar Ground System

•

Integral Systems Service Solutions (IS3) Awarded

Contract with U.S. Strategic Command

•

First Publicly Disclosed Award for IS3

FY11 GUIDANCE

Revenue

$205M -

$215M

Gross Profit Margin

33% -

35%

EBITDA

$20M -

$24M

Earnings Per Share

$0.25 -

$0.30

INTEGRAL SYSTEMS

RECENT DEVELOPMENTS

13

Key Opportunities

FY11

–

FY12

•

USAF Joint Space Operations Center Mission

Systems

(JSpOC

MS)

High

Accuracy

Catalog

•

USAF

RAIDRS

ECP-009

&

ECP-010

•

Future COMSATCOM Service Acquisition

(FCSA)

•

Army SMD

Wideband SATCOM Operations &

Technical Service (WSOTS)

•

Intelligence Community

•

International: Focus on Latin America, India

and Middle East

INTEGRAL SYSTEMS

BOOKINGS, BACKLOG, AND PIPELINE

Information reflect FY2010 results as reported 12/8/10

14

*BASED UPON FY 2010 RESULTS DOES NOT ACCOUNT FOR INTERCOMPANY ELIMINATION

**BASED UPON FY 2009 RESULTS DOES NOT ACCOUNT FOR INTERCOMPANY ELIMINATION

FY 2010 SALES BY SEGMENT*

INTEGRAL SYSTEMS

FY2010 SALES DISTRIBUTION

Information reflect FY2010 results as reported 12/8/10

FY 2010 SALES GEOGRAPHY**

15

REVENUE

EBITDA

GROSS PROFIT MARGIN

CAPITAL EXPENDITURES

INTEGRAL SYSTEMS

FINANCIAL PERFORMANCE & EXPECTATIONS

Information reflect FY2010 results as reported 12/8/10

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:

2007

2008

2009

2010

2011(E)

2012(E)

($ millions)

Net Income (Loss)

$          12.8

$          18.2

$            1.1

$         (2.4)

$            4.1

$          10.1

Other (Income ) Expense, net

$         (2.2)

$         (0.3)

$            0.1

$            1.2

$            2.4

$            1.2

Provision for Income Taxes (Benefit)

$            6.3

$            7.1

$         (1.0)

$         (0.3)

$            3.5

$            5.0

Income (Loss) From Operations

$          16.9

$          25.0

$            0.2

$         (1.5)

$          10.0

$          16.3

Non-Cash Stock Compensation

$            0.9

$            1.1

$            3.5

$            2.6

$            2.3

$            1.7

Depreciation and Amortization

$            3.0

$            2.6

$            4.3

$            7.1

$          10.3

$          10.5

EBITDA

$           20.8

$          28.7

$            8.0

$            8.2

$          22.6

$          28.5

19

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

is

a

quarterly

reconciliation

of

fiscal

years

2010

and

2009

net

income

to

EBITDA:

($ millions)

Quarter

Ended

Quarter

Ended

Quarter

Ended

Quarter

Ended

Quarter

Ended

Quarter

Ended

Quarter

Ended

Quarter

Ended

25-Dec-2009

26-Mar-2010

25-Jun-2010

24-Sep-2010

26-Dec-2008

27-Mar-2009

26-Jun-2009

25-Sep-2009

Q1 2010

Q2 2010

Q3 2010

Q4 2010

Fiscal Year

2010

Q1 2009

Q2 2009

Q3 2009

Q4 2009

Fiscal Year

2009

Net Income (Loss)

$               1.2

$               0.1

$             (3.8)

$               0.1

$          (2.4)

$              1.0

$              2.7

$          (1.5)

$          (1.1)

$           1.1

Other(Income) Expense

$               0.2

$            (0.1)

$               0.3

$               0.8

$             1.2

$              0.0  

$              0.0  

$          (0.1)

$             0.0  

$        (0.1)

Provision for Income Taxes (Benefit)

$               0.6

$               0.3

$             (1.6)

$               0.4

$          (0.3)

$              0.3

$              1.5

$          (2.4)

$          (0.4)

$        (1.0)

Income (Loss) from Operations

$               2.0

$               0.3

$             (5.1)

$               1.3

$          (1.5)

$              1.3

$              4.2

$          (3.8)

$          (1.5)

$           0.2

Non-Cash Stock Compensation

$               0.6

$               0.6

$               0.9

$               0.5

$            2.6

$              1.0

$              0.6

$             1.0

$             0.9

$           3.5

Depreciation & Amortization

$               1.4

$               1.2

$               2.4

$               2.1

$            7.1

$              0.6

$              1.0

$             1.3

$             1.4

$           4.3

EBITDA

$               4.0

$               2.2

$            (1.8)

$               3.8

$            8.2

$              2.9

$              5.8

$          (1.5)

$             0.8

$           8.0