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| 8-K - FORM 8-K - INTEGRAL SYSTEMS INC /MD/ | d8k.htm |
 OPPENHEIMER
5 TH
ANNUAL INDUSTRIALS CONFERENCE
SEPTEMBER 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 25, 2009, 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
5
North American Region
South American Region
Europe, Middle East, Africa Region
Asia Pacific Region
= Use 1 or more ISI Product lines |
 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
7 |
 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 |
 FINANCIAL
OVERVIEW 11 |
 12
Recent Developments
•
Accounting
–
$2.8M Lease Reserve on Previous HQ Facility
o
Anticipate Cash Generation of ~$1M over 5 Years
•
Operations:
–
Expanded Service Organization Management Team
to Capitalize on Strong Demand in Global Managed
Network Services Market
–
Announced New Line of Cost-Effective and Scalable
Geolocation
Solutions
–
Announced New Release (7.2) of COMPASS Network
Management Product Suite
Recent Contract Announcements
•
Announced Sole Source Contract w/Leading SATCOM
Service Provider to Support Four Boeing 702
Satellites
•
HISPASAT Monitoring and Interference Detection
(9/14)
•
$1.5M CCS-C Contract Modification (9/2/10)
•
High-Rate Data Capture Systems and TT&C Modems
for DigitalGlobe
(7/27/10)
•
$14.2M CCS-C Contract Modification for AEHF
REVISED
FY10 GUIDANCE
Revenue
$170M -
$174M
Gross Profit Margin
37% -
39%
EBITDA
$9M -
$12M
Bookings
$170M -
$180M
INTEGRAL SYSTEMS
RECENT
DEVELOPMENTS
–
IMPACTS
TO
Q3
&
FY10 |
 Key
Opportunities FY10 –
FY12
•
USAF Joint Space Operations Center Mission
Systems
(JSpOC
MS)
High
Accuracy
Catalog
•
USAF
RAIDRS
ECP-009
&
ECP-010
•
Special
Operations
(SOCOM)
Forces
Deployable
Nodelite
(SDN-Lite)
•
USN Military Sealift
Next Generation
Wideband
•
Future COMSATCOM Service Acquisition
(FCSA)
•
Army SMD
Wideband SATCOM Operations &
Technical Service (WSOTS)
•
Intelligence Community
INTEGRAL SYSTEMS
BOOKINGS, BACKLOG, AND PIPELINE
Information reflect Q3 results as reported 8/2/10
13 |
 14
*BASED
UPON
Q3
FY
2010
RESULTS
DOES
NOT
ACCOUNT
FOR
INTERCOMPANY
ELIMINATION
**BASED UPON FY 2009 RESULTS DOES NOT ACCOUNT FOR INTERCOMPANY ELIMINATION
YTD FY10 SALES BY SEGMENT*
INTEGRAL SYSTEMS
YTD FY10 SALES
Information reflect Q3 results as reported 8/2/10
FY 2009 SALES GEOGRAPHY** |
 REVENUE
EBITDA
GROSS PROFIT MARGIN
CAPITAL EXPENDITURES
INTEGRAL SYSTEMS
FINANCIAL PERFORMANCE & EXPECTATIONS
Information reflect Q3 results as reported 8/2/10
15 |
 16
INTEGRAL SYSTEMS
SUMMARY |
 17
BACK UP
INTEGRAL SYSTEMS |
 18
USE OF NON-GAAP FINANCIAL MEASURES
INTEGRAL SYSTEMS
EBITDA (earnings before interest, taxes, depreciation and amortization) is a non-GAAP
financial measure used by management to evaluate operating performance. Management
believes that the presentation of EBITDA helps management and investors to make a
meaningful comparison between our operating results and those of other companies, as well
as providing a consistent comparison of our relative historical financial
performance. The presentation of this non-GAAP financial measure is not to be
considered in isolation or as a substitute for our financial results prepared
in
accordance
with
GAAP.
Below
are
reconciliations
of
fiscal
years
2007
-
2012
net
income to EBITDA:
2007
2008
2009
2010(E)
2011(E)
2012(E)
($ millions)
Net Income
$ 12.8
$ 18.2
$ 1.1
$ (1.2)
$ 4.1
$ 10.1
Other Income (Expense), net
$ (2.2)
$ (0.3)
$ 0.1
$ 0.9
$ 2.4
$ 1.2
Provision for Income Taxes
$ 6.3
$ 7.1
$ (1.0)
$ 1.1
$ 3.5
$ 5.0
Income From Operations
$ 16.9
$ 25.0
$ 0.2
$ 0.8
$ 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
$ 7.3
$ 10.3
$ 10.5
EBITDA
$ 20.8
$ 28.7
$ 8.0
$ 10.7
$ 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 reconciliation for the first three quarters of fiscal
years 2010 and 2009 net income to EBITDA:
Quarter Ended Quarter Ended
December 25,
2009
March 26,
2010
Quarter Ended
June 25,
2010
Quarter Ended Quarter Ended
December 26,
2008
March 27,
2009
Quarter Ended
June 26,
2009
($ millions)
Q1 2010
Q2 2010
Q3 2010
Q3 YTD
2010
Q1 2009
Q2 2009
Q3 2009
Q3 YTD
2009
Net Income (Loss)
1.2
0.1
(3.8)
(2.5)
1.0
2.7
(1.5)
2.2
Other income ( Expense)
0.2
(0.1)
(0.3)
(0.5)
0.0
0.0
(0.1)
(0.1)
Provision for income taxes
(Benefit)
0.6
0.3
(1.6)
(0.7)
0.3
1.5
(2.4)
(0.6)
Income from Operations
2.0
0.3
(5.1)
(2.7)
1.3
4.2
(3.8)
1.7
Stock-based compensation
0.6
0.6
0.9
2.1
1.0
0.6
1.0
2.6
Depreciation & Amortization
1.4
1.2
2.4
5.1
0.6
1.0
1.3
2.9
EBITDA
4.0
2.2
(1.8)
4.5
2.9
5.8
(1.5)
7.2 |