LANHAM, Md., Dec. 24 /PRNewswire-FirstCall/ -- Integral Systems, Inc. (the "Company") today reported audited financial results for the fourth quarter and fiscal year ended September 30, 2008. Revenue for the year was $160.2 million, up $31.5 million or 24.5% from fiscal 2007. Income from operations was $25.1 million compared to $16.9 million for fiscal 2007, and net income was $18.2 million ($1.01 per diluted share) compared to $12.8 million ($0.58 per diluted share) for fiscal 2007.
Revenue for the fourth quarter was $46.3 million, up $10.0 million or 27.5% from the same period in 2007. Income from operations was $7.6 million compared to $6.3 million for the fourth quarter of 2007. The fourth quarter of 2008 included approximately $1.5 million of audit related fees and approximately $0.7 million of non-cash stock compensation expense. Net income was $4.9 million ($0.28 per diluted share) compared to $4.8 million ($0.23 per diluted share) for the fourth quarter of 2007. All per share amounts reflect the 2:1 stock split effected by the Company during the fourth quarter of 2008.
"Integral Systems has achieved another milestone through successful completion of this comprehensive audit in its progression to an examplary organization for compliance, reporting, and transparency," commented John Higginbotham, Chief Executive Officer. "We are pleased with our financial results for FY 2008 and feel we are positioned to achieve or potentially exceed comparable financial results for FY 2009."
Bill Bambarger, Chief Financial Officer, added "We successfully transitioned our audit services to Ernst & Young for fiscal 2008. By hiring a world-class audit firm like E&Y, we are further emphasizing our focus on enhancing shareholder confidence, complying with applicable rules and standards, and building an infrastructure that is scalable to meet our future growth needs. E&Y applied their usual comprehensive audit process, and we are now looking forward to continuing our strong record of financial performance and to achieving our goals for fiscal 2009."
The Company also filed its Annual Report on Form 10-K today. On December 11, 2008, the Company filed for a 15-day extension to the original filing deadline of December 15, 2008 due to the extensive effort involved to complete the audit for fiscal 2008. This filing results in the Company remaining current in all of its public filing obligations.
About Integral Systems
Integral Systems, Inc., applies more than 25 years experience developing innovative satellite communication systems for its government and commercial customers. Integral provides cost-effective solutions for ground, air, and space communications by integrating solutions from its subsidiary companies -- SAT Corporation, Newpoint Technologies, Inc., Integral Systems Europe, RT Logic, and Lumistar. Customers have relied on the Integral family of companies to deliver on time and on budget for more than 250 satellite missions. Our dedication to customer service has solidified long-term relationships with the U.S. Air Force, NASA, NOAA, and nearly every satellite operator in the world. Integral Systems, Inc. is listed in Forbes' Top 200 Small Companies in America for 2008. For more information, visit http://www.integ.com/.
Except for statements of historical facts, this news release contains forward-looking statements about the Company, including but not necessarily limited to the Company's financial projections, all of which are based on the Company's current expectations. There can be no assurance that the Company's projections will in fact be achieved and these projections do not reflect any acquisitions or divestitures that may occur in the future. The forward-looking statements contained in this news release are subject to additional risks and uncertainties, including the Company's reliance on contracts and subcontracts funded by the U.S. government, intense competition in the ground systems industry, the competitive bidding process to which the Company's government and commercial contracts are subject, the Company's dependence on the satellite industry for most of its revenues, rapid technological changes in the satellite industry, the Company's acquisition strategy and those other risks noted in the Company's SEC filings. The Company assumes no obligation to update or revise any forward-looking statements appearing in this news release.
INTEGRAL SYSTEMS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS September 30, 2008 and 2007 (in thousands of dollars, except share amounts) Sept. 30, Sept. 30, 2008 2007 (audited) Assets Current assets: Cash and cash equivalents $15,026 $23,894 Marketable securities - 568 Accounts receivable, net of allowance for doubtful accounts of $9 at September 30, 2008 and $170 at September 30, 2007 16,688 19,208 Unbilled revenues 18,656 16,530 Prepaid expenses and other current assets 2,542 2,636 Income tax receivable 4,782 541 Deferred contract costs 6,558 - Inventory 7,237 5,145 Total current assets 71,489 68,522 Property and equipment, net 17,634 15,234 Goodwill 51,414 51,304 Intangible assets, net - 22 Software development costs, net - 198 Other assets 6,666 781 Total assets $147,203 $136,061 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $7,163 $7,834 Accrued expenses 16,650 11,092 Deferred revenue 12,403 10,588 Income taxes payable - - Total current liabilities 36,216 29,514 Other non-current liabilities 946 - Total liabilities 37,162 29,514 Stockholders' equity: Common stock, $.01 par value, 80,000,000 shares authorized, and 17,246,034 and 18,762,344 shares issued and outstanding at September 30, 2008 and 2007, respectively 173 188 Additional paid-in capital 62,608 60,813 Retained earnings 47,249 45,537 Accumulated other comprehensive income 11 9 Total stockholders' equity 110,041 106,547 Total liabilities and stockholders' equity $147,203 $136,061 INTEGRAL SYSTEMS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands of dollars, except per share amounts) Three Months Ended Twelve Months Ended September 30, September 30, 2008 2007 2008 2007 (Unaudited) (Audited) Contract revenue $46,344 $36,348 $160,170 $128,654 Cost of revenue 26,153 23,625 99,948 86,308 Gross profit 20,191 12,723 60,222 42,346 Operating Expenses: Selling, general & administrative 11,279 5,959 32,105 23,377 Research & development 1,308 441 3,021 2,077 Total operating expense 12,587 6,400 35,126 25,454 Income from operations 7,604 6,323 25,096 16,892 Other income (51) 592 211 2,236 Income before income tax 7,553 6,915 25,307 19,128 Provision for income taxes 2,638 2,108 7,133 6,302 Net income $4,915 $4,807 $18,174 $12,826 Weighted average number of common shares - Basic 17,182 21,208 17,813 21,968 Earnings per Share - Basic $0.29 $0.23 $1.02 $0.58 Weighted average number of common shares - Diluted 17,444 21,196 18,008 21,985 Earnings per share - Diluted $0.28 $0.23 $1.01 $0.58 Cash dividends Per share $- $0.035 $- $0.14 INTEGRAL SYSTEMS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands of dollars, except per share amounts) Three Months Ended Twelve Months Ended September 30, September 30, 2008 2007 2008 2007 Revenue: Government Systems $24,181 $18,139 $83,603 $67,655 Commercial Systems 7,835 8,348 28,748 26,079 Space Communications Systems 17,509 12,210 57,781 42,795 Elimination of Intersegment sales (3,181) (2,349) (9,962) (7,875) Total revenue 46,344 36,348 160,170 128,654 Cost of revenue: Government Systems 15,532 14,328 58,788 54,155 Commercial Systems 5,763 5,340 19,135 15,721 Space Communications Systems 7,921 6,321 32,101 24,321 Elimination of Intersegment sales (3,063) (2,364) (10,076) (7,889) Total cost of revenue 26,153 23,625 99,948 86,308 Gross profit: Government Systems 8,649 3,811 24,815 13,500 Gross Margin 35.8% 21.0% 29.7% 20.0% Commercial Systems 2,072 3,008 9,613 10,358 Gross Margin 26.4% 36.0% 33.4% 39.7% Space Communications Systems 9,588 5,889 25,680 18,474 Gross Margin 54.8% 48.2% 44.4% 43.2% Elimination of Intersegment sales (118) 15 114 14 Total gross profit 20,191 12,723 60,222 42,346 Gross Margin 43.6% 35.0% 37.6% 32.9% Operating expense: Government Systems 6,696 2,874 17,630 11,080 Commercial Systems 1,777 1,581 5,939 6,077 Space Communications Systems 4,152 1,953 11,631 8,350 Elimination of Intersegment sales (38) (8) (74) (53) Total operating expense 12,587 6,400 35,126 25,454 Operating income: Government Systems 1,953 937 7,185 2,420 Operating margin 8.1% 5.2% 8.6% 3.6% Commercial Systems 295 1,427 3,674 4,281 Operating margin 3.8% 17.1% 12.8% 16.4% Space Communications Systems 5,436 3,936 14,049 10,124 Operating margin 31.0% 32.2% 24.3% 23.7% Elimination of Intersegment sales (80) 23 188 67 Total operating income 7,604 6,323 25,096 16,892 Operating margin 16.4% 17.4% 15.7% 13.1%
