Sat, Jul 26, 2014, 11:15 AM EDT - U.S. Markets closed

Recent

% | $
Click the to save as a favorite.

TeleCommunication Systems Inc. Message Board

  • marty.chilberg marty.chilberg Jul 28, 2011 6:38 PM Flag

    Mixed but generally positive quarter

    Didn't listen to call live but will get replay and add any addl commentary. Based upon current quarter release and trend the overall release was positive in most ways. The earnings beat the street by $.04. Many were confused as the street put the adj'd net in as consensus so it appears like a miss but it wasn't. Apples to apples: Adj'd net income per diluted share was $.12 vs consensus of $.08. Revenues missed though at $100.7 vs consensus of $102.6m

    Guidance is down on rev's which didn't surprise me with govt spending issues. Even that wasn't too harmful as earnings and adj'd earnings guidance stayed the same. Looks pretty clear now what happened. In Q1 they beat but wouldn't increase guidance because they saw potential revenue weakness. Confirmed this quarter so meeting FY guidance will come from reduced spending consistent with 1H. Don't know how hard/soft new top line guidance is. S/B fairly close given BL point below.

    Addl points from cursory review of f/s's:
    - Backlog up substantially from $308m to $434m. Booking were better than billing accross the board (Comm/govt/options)
    - NTM revenues in BL significant increase from $177.5m to $277.5m. Looking like 1H2012 will be pretty solid unless some of these funded orders slip forward.
    - A little surprised that commercial declined slightly Y/Y while govt was up 19%
    - Continued improvement in GM on service revenues. Sequential improvement from 41% in Q3/Q4-10, 44% Q1-11 and 47% Q2-11. Big impact as this is now 75% of total revenues.
    - The reduced spending driving the eps beat was not through capitalization of SW dev costs as has happened at times in past. Consequently the R&D was a little high though impacted by acquisitions as well.
    - G&A high. Suspect will be talked about on call and may include some deal/patent costs.
    - BS improved. Cash up $8m. A/R down $4.5m, debt down $7m
    - DSO dropped from 88 days at 3/31 to 74 days at 6/30
    - PPE up so still acquiring likely due to acquisition.
    - That hurt FCF which was down somewhat from $9.0m in March to $8.5m in Jun.
    - EBITDA mirrored adj'd net with minor sequential decrease.

    On the whole it looks pretty solid and improving though the revenue miss and with reduced rev guidance will likely be a focus for some analysts.

    SortNewest  |  Oldest  |  Most Replied Expand all replies
    • Listened to call last night and finished updating model. A couple addl thoughts...

      - Commercial business looks a little funky. Service revenues down for 2nd sequential qtr. Tom attributed to nonrecurring opportunistic revs and said Q3-4 will be pretty flat. Worth watching as this seems counterintuitive If the are seeing continued growth in NIM and with SMS maintance this shouldn't be the case.

      - Q asked about decline in comm systems GM. Tom response not responsive. He claimed it was the fixed amortization, but if you take that out and look at remaining cost of serv revenue it was 71% in Qtr. Small numbers can cause anomolies but bad reply nonetheless. Could be a classification error as service GM increase was surprising.

      - Unfunded BL (govt cust options) at risk of over $300m. Disclosed that govt wants to cancel and company has appealed. Will likely be a negative catalyst if they lose appeal.

      Tone of call was solid and analysts appeared upbeat about report. Tose commented about several potential opportunities that are in negotiations that would be positive catalysts.

    • Thanks for your review Marty...I have appreciated your thoughtful comments for years.
      Best,
      Nancy

 
TSYS
3.27-0.06(-1.80%)Jul 25 4:00 PMEDT

Trending Tickers

i
Trending Tickers features significant U.S. stocks showing the most dramatic increase in user interest in Yahoo Finance in the previous hour over historic norms. The list is limited to those equities which trade at least 100,000 shares on an average day and have a market cap of more than $300 million.