EX-99.1 2 dex991.htm EXHIBIT 99.1 Exhibit 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

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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

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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

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*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**

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REVENUE
EBITDA
GROSS PROFIT MARGIN
CAPITAL EXPENDITURES
INTEGRAL SYSTEMS
FINANCIAL PERFORMANCE & EXPECTATIONS
Information reflect FY2010 results as reported 12/8/10

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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