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TNS Inc. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: May 4, 2012 05:38AM

TNS Inc. (TNS) filed Quarterly Report for the period ended 2012-03-31. Tns Inc has a market cap of $540.4 million; its shares were traded at around $19.26 with a P/E ratio of 10.8 and P/S ratio of 1. Tns Inc had an annual average earning growth of 14.9% over the past 10 years.



Highlight of Business Operations:

Revenues. Total revenues increased $5.8 million, or 4.3%, to $138.8 million for the three months ended March 31, 2012, from $133.0 million for the three months ended March 31, 2011. The impact of foreign exchange translation on a year-over-year basis was $0.5 million. Excluding the effect of foreign exchange rates, total revenues increased $6.3 million, or 4.7%, to $139.3 million for the three months ended March 31, 2012.

Payment services division. Revenues from the payment services division increased $2.6 million, or 5.6%, to $50.6 million for the three months ended March 31, 2012 from $48.0 million for the three months ended March 31, 2011. The negative effect of foreign currency translation on a year-over-year basis was $0.5 million. Excluding the effect of foreign exchange rates, revenues increased $3.0 million to $51.0 million as follows:

Cost of network services. Cost of network services increased $4.0 million, or 5.9%, to $71.6 million for the three months ended March 31, 2012, from $67.6 million for the three months ended March 31, 2011. On a constant dollar basis, cost of network services increased $4.2 million to $71.8 million. This was due to the following increases: $2.4 million due to higher volumes in our telecommunication services division, primarily related to increased demand for our identity and verification services; $1.5 million in shared network, payroll and overhead expense primarily to support our IP network services, roaming and clearing and payment gateway platforms; and $0.5 million in our financial services division due primarily to increased connectivity costs in North America and to a lesser extent increases to support revenue growth in Europe and Asia Pacific. These increases were partially offset by a decrease of $0.2 million in costs incurred to support the payment services division primarily due to lower transaction volumes in North America.

Engineering and development expense. Engineering and development expense increased $0.4 million, or 3.2%, to $11.0 million for the three months ended March 31, 2012, from $10.6 million for the three months ended March 31, 2011. On a constant dollar basis, engineering and development expense increased $0.3 million, or 3.0%, to $10.9 million, and represented 7.9% and 8.0 % of revenues for the three months ended March 31, 2012 and 2011, respectively. The increase in engineering and development costs was primarily due to the following: $1.9 million in additional headcount related costs and $0.2 million in system maintenance costs to support our payment gateway, verification and IP registry services. This was partially offset by an increase in capitalized software development costs, which are offset against engineering and development costs, of $1.8 million due to increased utilization of current employees and increased headcount to align our resources with our growth initiatives.

Depreciation and amortization of property and equipment. Depreciation and amortization of property and equipment increased $1.1 million, or 9.3%, to $12.6 million for the three months ended March 31, 2012, from $11.5 million for the three months ended March 31, 2011. Depreciation and amortization on property and equipment represented 9.0% and 8.6% of revenue for the three months ended March 31, 2012 and 2011, respectively. Included in depreciation expense for the three months ended March 31, 2011 was an accelerated depreciation charge of $0.7 million related to the phasing out of $6.2 million of surplus network assets and software as a result of the integration of the CSG and TNS networks. Excluding the accelerated charges, depreciation and amortization of property and equipment increased $1.8 million due to capital expenditure investments in our growth initiatives, including Cequint.

Read the The complete Report



Stocks Discussed: TNS,
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