National Technical Systems Inc. Reports Operating Results (10-Q)

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Jun 14, 2010
National Technical Systems Inc. (NTSC, Financial) filed Quarterly Report for the period ended 2010-04-30.

National Technical Systems Inc. has a market cap of $53.5 million; its shares were traded at around $5.7099 with a P/E ratio of 16.79 and P/S ratio of 0.44. National Technical Systems Inc. had an annual average earning growth of 12.5% over the past 10 years.NTSC is in the portfolios of Jim Simons of Renaissance Technologies LLC.

Highlight of Business Operations:

For the three months ended April 30, 2010, consolidated revenues increased by $7,440,000 or 25.9% when compared to the same period in fiscal 2010, primarily due to the solid performance in the aerospace and defense markets in the current quarter compared to the same period in the prior year. $2,303,000 of the increase was from the acquisition of Unitek Technical Services on November 30, 2009. The strong organic growth of $5,137,000 or 17.9% was as a result of several factors: capital investments on unique capabilities, capacity expansion, recent large contract wins and improved efficiencies.

Other income was $2,991,000 for the three months ended April 30, 2010, compared to other expense of $69,000 for the same period in the prior year. The income in the current year was primarily due to the gain on the sale of the Company s Virginia property of $3,017,000 and the net gain recognized from insurance recovery of $269,000 related to the fire at the Company s Fullerton facility in the prior year, partially offset by other non-recurring expenses.

Net income for the three months ended April 30, 2010 was $3,546,000 compared to $540,000 for the same period in fiscal 2010, an increase of $3,006,000 or 556.7%. This increase was primarily due to the $3,060,000 increase in other income and the $2,043,000 increase in operating income, partially offset by higher income taxes.

Net cash provided by operating activities of $4,443,000 in the three months ended April 30, 2010 primarily consisted of net income of $3,546,000, adjusted for changes in working capital of $1,820,000, non-cash items of $1,787,000 in depreciation and amortization, share-based compensation of $241,000 and other adjustments of $66,000, partially offset by gain on sale of assets of $3,017,000. Net cash provided by operating activities of $1,732,000 in the three months ended April 30, 2009 primarily consisted of net income of $540,000 adjusted for non-cash items of $1,781,000 in depreciation and amortization and write off of receivables of $169,000, partially offset by changes in working capital of $608,000, deferred income taxes $131,000 and other adjustments of $19,000.

Net cash used in investing activities in the three months ended April 30, 2010 of $57,000 was primarily attributable to capital spending of $2,123,000 and cash used to acquire businesses of $2,053,000, partially offset by proceeds from sale of property of $2,293,000 and proceeds from sale of life insurance of $1,826,000. Net cash used in investing activities in the three months ended April 30, 2009 of $1,640,000 was primarily attributable to capital spending of $1,414,000, investment in retirement funds of $176,000 and investment in life insurance of $50,000.

Net cash used in financing activities in the three months ended April 30, 2010 of $612,000 consisted of repayment of debt of $1,183,000, partially offset by proceeds from borrowing of $508,000 and proceeds from stock options exercised of $63,000. Net cash used in financing activities in the three months ended April 30, 2009 of $1,070,000 consisted of repayment of debt of $1,070,000.

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