New Threads Only:  Add to Google Reader or Homepage
New Threads & Replies:  Add to Google Reader or Homepage
Forums are for serious investors only. GuruFocus Forum Rules.

Forum List » Business News and Headlines
SEC Filings, Earing Reports, Press Releases
New Topic Search
Goto Thread: PreviousNext
Goto: Forum ListMessage ListNew TopicSearchLog In
TNS Inc. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: August 9, 2010 05:25PM

TNS Inc. (TNS) filed Quarterly Report for the period ended 2010-06-30. Tns Inc. has a market cap of $424.6 million; its shares were traded at around $16.29 with a P/E ratio of 7.4 and P/S ratio of 0.9. Tns Inc. had an annual average earning growth of 11% over the past 5 years.

TNS is in the portfolios of Steven Cohen of SAC Capital Advisors, RS Investment Management, Jim Simons of Renaissance Technologies LLC, George Soros of Soros Fund Management LLC.

Highlight of Business Operations:

Payments division. Revenues from the payments division increased $1.5 million, or 3.1%, to $50.3 million for the three months ended June 30, 2010, from $48.8 million for the three months ended June 30, 2009. The negative effect of foreign exchange translation on a year-over-year basis was $0.2 million. Excluding the impact of foreign exchange rates, payments revenue increased $1.7 million, or 3.5%, to $50.5 million for the three months ended June 30, 2010. This increase was due to market share gains of $1.9 million in Europe, an equipment sale of $1.4 million in North America and an increase of $0.8 million in Asia Pacific due to higher sales of our payment gateway services of $0.6 million and market share gains of $0.2 million. These increases were partially offset by decreases of $0.8 million from our ATM software services product, which we ceased selling in the fourth quarter of 2009, $0.6 million due to the previously disclosed loss by our Australian telecommunications partner of a significant portion of its business, $0.5 million in North America due to lower dial transactions and to a lesser extent pricing decreases and $0.4 million in Europe due to the previously disclosed loss of an ATM processing customer.

Telecommunication services division. Revenues from the telecommunication services division increased $7.4 million, or 12.9%, to $64.3 million for the three months ended June 30, 2010, from $56.9 million for the three months ended June 30, 2009. Included in revenues were pass-through charges of $7.4 million and $6.3 million for the three months ended June 30, 2010 and 2009, respectively. Excluding the increase in pass through charges, revenues increased $6.3 million to $56.9 million for the three months ended June 30, 2010 primarily due to the inclusion of acquired CSG operations. This increase was partially offset by the following decreases: $1.1 million due to volume declines from a customer following the acquisition of CSG based on the expectation that we will compete with the customer, $0.5 million due to a reduction in volumes in our payphone fraud and validation service and $0.4 million related to the previously disclosed loss of a wireless customer who decided to consolidate their calling name access and storage services under an alternative provider.

Selling, general and administrative expense. Selling, general and administrative expenses decreased $2.4 million, or 9.4%, to $23.2 million for the three months ended June 30, 2010, from $25.6 million for the three months ended June 30, 2009. Selling, general and administrative expenses represented 17.7% of revenues for the three months ended June 30, 2010, compared to 21.0% of revenues for the three months ended June 30, 2009. Variable incentive cash compensation decreased $2.0 million for the three months ended June 30, 2010. Included in selling, general and administrative expenses for the three months ended June 30, 2010 and 2009 is $1.0 million and $2.0 million of stock compensation expense, respectively. The decrease in stock compensation expense is due to a reduction in performance related stock compensation. Included in selling, general and administrative expenses for the three months ended June 30, 2010 are $0.5 million of pre-tax severance charges. Included in selling, general and administrative expenses for the three months ended June 30, 2009 are $1.6 million in professional fees related to our acquisition of CSG that were expensed in accordance with the provisions of FASB ASC 805, Business Combinations. Excluding these items and the effects of foreign exchange, selling, general and administrative expenses increased $1.7 million to $22.0 million for the three months ended June 30, 2010 from $20.3 million for the three months ended June 30, 2009. This increase was primarily attributable to additional headcount and other costs necessary to support the acquired CSG operations.

Depreciation and amortization of property and equipment. Depreciation and amortization of property and equipment increased $5.5 million, or 69.4%, to $13.5 million for the three months ended June 30 2010, from $8.0 million for the three months ended June 30, 2009. On a constant dollar basis, depreciation and amortization of property and equipment was $13.5 million. Depreciation and amortization of property and equipment represented 10.3% and 6.6% of revenue for the three months ended June 30, 2010 and 2009, respectively. The increase in depreciation expense was primarily due to an accelerated depreciation charge of $3.2 million following an exercise completed during the period to identify surplus network assets and office equipment that will no longer be required following the integration of the legacy CSG and TNS operations. We estimate the total value of these assets to be $6.2 million and expect to recognize an additional $3.0 million accelerated depreciation charge in the three months ended September 30, 2010 as these assets are removed from service. The balance of the increase is due to an incremental $1.0 million related to the acquired CSG assets and $1.3 million related to capital expenditures made to support our revenue growth and integration efforts.

Payments division. Revenues from the payments division increased $4.8 million, or 5.2%, to $97.9 million for the six months ended June 30, 2010, from $93.1 million for the six months ended June 30, 2009. The positive effect of foreign exchange translation on a year-over-year basis was $3.2 million. Excluding the impact of foreign exchange rates, payments revenue increased $1.6 million, or 1.7% to $94.8 million for the six months ended June 30, 2010. This increase was due to $2.9 million of market share gains in the European and Asia Pacific regions, $1.4 million in North America related to an equipment sale, $0.7 million in ATM processing revenue, primarily from our Canadian subsidiary, $0.6 million in Asia Pacific due to increases in our payment gateway service revenue, and $0.2 million from the sale of our managed broadband products in North America and Europe. These increases were offset by decreases of $1.7 million in legacy dial revenue in North America due primarily to lower transactions and to a lesser extent pricing decreases, $1.1 million from our ATM software product, which we ceased selling in the fourth quarter of 2009, $0.6 million due to the loss by our Australian telecommunications partner of a significant portion of its business, $0.3 million related to lower development revenue from our Dialect subsidiary and $0.4 million in Europe due to the previously disclosed loss of an ATM processing customer.

Telecommunication services division. Revenues from the telecommunication services division increased $57.8 million, or 80.3% to $129.7 million for six months ended June 30, 2010, from $71.9 million for the six months ended June 30, 2009. Included in revenues were pass-through charges of $14.5 million and $7.5 million for the six months ended June 30, 2010 and 2009, respectively. Excluding the increase in pass through charges, revenues increased $50.8 million to $115.2 million for the six months ended June 30, 2010 primarily due to the inclusion of acquired CSG operations. This increase was partially offset by the following decreases: $2.5 million due to volume declines from a customer following the acquisition of CSG based on the expectation that we will compete with the customer, $1.1 million due to a reduction in volumes in our payphone fraud and validation service and $0.4 million related to the loss of a wireless customer who decided to consolidate their calling name access and storage services under an alternate provider.

Read the The complete Report



Stocks Discussed: TNS,
Rate this post:




Sorry, only registered users may post in this forum.

Please Login if you have an account or Create a Free Account if you don't




Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
Free 7-day Trial