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 |