TeleCommunication Systems Inc. (TSYS, Financial) filed Quarterly Report for the period ended 2012-06-30.
Telecommunication Systems, Inc. has a market cap of $80.8 million; its shares were traded at around $1.41 with a P/E ratio of 10 and P/S ratio of 0.2. Telecommunication Systems, Inc. had an annual average earning growth of 25.9% over the past 5 years.
Our government systems gross profit increased $1.6 million, or 64% and $4.9 million, or 111% in the three and six months ended June 30, 2012, compared to the same periods in 2011 due to the increased sales volume. Government systems gross profit as a percentage of revenue was 10% and 12% for the three ended June 30, 2012 and 2011, respectively. The decline in average margin as a percent of revenue was mainly due to below-normal margins on pass-through systems sales. Government systems gross profit as a percentage of revenue was about the same at 14% for the six ended June 30, 2012 and 2011, respectively. The increase in gross profit dollars reflects higher overall revenue volume.
The direct cost of commercial services revenue consists primarily of compensation and benefits, network access, data feed and circuit costs for network operation centers and co-location facilities, licensed location-based application content, and equipment and software maintenance. The direct cost of services also includes amortization of capitalized software development costs of $0.3 million and $1.7 million for the three months ended June 30, 2012 and for June 30, 2011, respectively. For the three months ended June 30, 2012, the direct cost of services revenue decreased $3.1 million, or 16%, from 2011, due mainly to lower direct labor and other direct costs. Amortization of capitalized software development costs was $2.0 million and $3.5 million, respectively, for the six months ended June 30, 2012 and 2011. The decrease reflects the writedown of amortizable intangibles during the quarter. For the six months ended June 30, 2012 the direct cost of services revenue decreased $3.9 million, or 10%, compared to the same period in 2011 due to lower direct labor and other direct costs, including licensed content.
Commercial systems revenue for the three and six months ended June 30, 2012 decreased $0.5 million, or 13% and $1.0 million, or 12%, respectively, compared to the same periods of 2011. Our newly launched Next Generation 9-1-1 technology contributed $2.3 million of new revenue during the first six months of 2012 as compared to the first six months of 2011. This additional revenue was offset by a decrease in our commercial systems revenue as a result of more of our carrier customers acquiring more location-based infrastructure on a hosted or managed services model rather than buy in-network systems.
The direct cost of our commercial systems revenue consists primarily of compensation and benefits, third-party hardware and software purchased for integration and resale, travel expenses, consulting fees as well as the amortization of acquired and capitalized software development. The direct costs of systems revenue for the three and six months ended June 30, 2012 were relatively flat compared to the same periods in 2011. During the three and six months ended June 30, 2012, direct costs of systems revenue included $1.1 million and $2.2 million, respectively, of amortization of software development costs. Comparatively, in the three and six months ended June 30, 2011, direct cost of systems revenue included $0.9 million and $1.8 million, respectively, of amortization of software development costs.
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Telecommunication Systems, Inc. has a market cap of $80.8 million; its shares were traded at around $1.41 with a P/E ratio of 10 and P/S ratio of 0.2. Telecommunication Systems, Inc. had an annual average earning growth of 25.9% over the past 5 years.
Highlight of Business Operations:
We generate government systems revenue from selling secure wireless communication systems, primarily deployable satellite-based and line-of-sight deployable systems, and integration of these systems into customer networks. These are largely variations on our SwiftLink products, which are lightweight, secure, deployable communication kits, sold mainly to units of the U.S. Department of Defense and other federal agencies. Since our 2011 acquisition of Trident our government systems revenue also includes electronic components. Government systems sales increased $19.9 million, or 95%, and $32.6 million, or 103%, in the three and six months ended June, 30 2012, compared to same periods in 2011 due to higher pass through orders taken in 2011 for shipments mainly in the second and third quarters of 2012. Also, increased sales volume of our SwiftLink and deployable communication systems and sales of our highly reliable electronic parts and materials resulting from the Trident acquisition also contributed to the increase in government systems revenue.Our government systems gross profit increased $1.6 million, or 64% and $4.9 million, or 111% in the three and six months ended June 30, 2012, compared to the same periods in 2011 due to the increased sales volume. Government systems gross profit as a percentage of revenue was 10% and 12% for the three ended June 30, 2012 and 2011, respectively. The decline in average margin as a percent of revenue was mainly due to below-normal margins on pass-through systems sales. Government systems gross profit as a percentage of revenue was about the same at 14% for the six ended June 30, 2012 and 2011, respectively. The increase in gross profit dollars reflects higher overall revenue volume.
The direct cost of commercial services revenue consists primarily of compensation and benefits, network access, data feed and circuit costs for network operation centers and co-location facilities, licensed location-based application content, and equipment and software maintenance. The direct cost of services also includes amortization of capitalized software development costs of $0.3 million and $1.7 million for the three months ended June 30, 2012 and for June 30, 2011, respectively. For the three months ended June 30, 2012, the direct cost of services revenue decreased $3.1 million, or 16%, from 2011, due mainly to lower direct labor and other direct costs. Amortization of capitalized software development costs was $2.0 million and $3.5 million, respectively, for the six months ended June 30, 2012 and 2011. The decrease reflects the writedown of amortizable intangibles during the quarter. For the six months ended June 30, 2012 the direct cost of services revenue decreased $3.9 million, or 10%, compared to the same period in 2011 due to lower direct labor and other direct costs, including licensed content.
Commercial systems revenue for the three and six months ended June 30, 2012 decreased $0.5 million, or 13% and $1.0 million, or 12%, respectively, compared to the same periods of 2011. Our newly launched Next Generation 9-1-1 technology contributed $2.3 million of new revenue during the first six months of 2012 as compared to the first six months of 2011. This additional revenue was offset by a decrease in our commercial systems revenue as a result of more of our carrier customers acquiring more location-based infrastructure on a hosted or managed services model rather than buy in-network systems.
The direct cost of our commercial systems revenue consists primarily of compensation and benefits, third-party hardware and software purchased for integration and resale, travel expenses, consulting fees as well as the amortization of acquired and capitalized software development. The direct costs of systems revenue for the three and six months ended June 30, 2012 were relatively flat compared to the same periods in 2011. During the three and six months ended June 30, 2012, direct costs of systems revenue included $1.1 million and $2.2 million, respectively, of amortization of software development costs. Comparatively, in the three and six months ended June 30, 2011, direct cost of systems revenue included $0.9 million and $1.8 million, respectively, of amortization of software development costs.
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