TeleCommunication Systems (TeleCommunication Systems) Operating Income : $16.1 Mil (TTM As of Sep. 2015)

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What is TeleCommunication Systems Operating Income?

TeleCommunication Systems's Operating Income for the three months ended in Sep. 2015 was $6.7 Mil. Its Operating Income for the trailing twelve months (TTM) ended in Sep. 2015 was $16.1 Mil.

Operating Margin % is calculated as Operating Income divided by its Revenue. TeleCommunication Systems's Operating Income for the three months ended in Sep. 2015 was $6.7 Mil. TeleCommunication Systems's Revenue for the three months ended in Sep. 2015 was $101.1 Mil. Therefore, TeleCommunication Systems's Operating Margin % for the quarter that ended in Sep. 2015 was 6.58%.

TeleCommunication Systems's 5-Year average Growth Rate for Operating Margin % was 0.00% per year.

Operating Income or EBIT is linked to Return on Capital for both regular definition and Joel Greenblatt's definition. TeleCommunication Systems's annualized ROC % for the quarter that ended in Sep. 2015 was 7.53%. TeleCommunication Systems's annualized ROC (Joel Greenblatt) % for the quarter that ended in Sep. 2015 was 47.55%.

TeleCommunication Systems Operating Income Historical Data

The historical data trend for TeleCommunication Systems's Operating Income can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

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TeleCommunication Systems Operating Income Chart

TeleCommunication Systems Annual Data

Trend

Dec05

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Dec14

Operating Income

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32.41

20.86

-105.75

-29.92

12.20

TeleCommunication Systems Quarterly Data
	Dec10	Mar11	Jun11	Sep11	Dec11	Mar12	Jun12	Sep12	Dec12	Mar13	Jun13	Sep13	Dec13	Mar14	Jun14	Sep14	Dec14	Mar15	Jun15	Sep15
Operating Income	Get a 7-Day Free Trial															3.54	4.01	2.35	3.09	6.66

TeleCommunication Systems Operating Income Calculation

Operating Income, is the profit a company earned through operations. All expenses, including cash expenses such as cost of goods sold (COGS), research & development, wages, and non-cash expenses, such as depreciation, depletion and amortization, have been deducted from the sales.

Operating Income for the trailing twelve months (TTM) ended in Sep. 2015 adds up the quarterly data reported by the company within the most recent 12 months, which was $16.1 Mil.

TeleCommunication Systems (NAS:TSYS) Operating Income Explanation

1. Operating Income or EBIT is linked to Return on Capital for both regular definition and Joel Greenblatt's definition.

TeleCommunication Systems's annualized ROC % for the quarter that ended in Sep. 2015 is calculated as:

	ROC % (Q: Sep. 2015 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Jun. 2015 )	+	Invested Capital (Q: Sep. 2015 ))	/ count )
=	26.64 * ( 1 - 31.85% )	/	( (238.466	+	243.663)	/ 2 )
=	18.15516	/	241.0645
=	7.53 %

where

	Invested Capital		(Q: Jun. 2015 )
=	Total Assets	-	Accounts Payable & Accrued Expense	-	Excess Cash
=	Total Assets	-	Accounts Payable & Accrued Expense	-	( Cash, Cash Equivalents, Marketable Securities	-	max(0, Total Current Liabilities	-	Total Current Assets	+	Cash, Cash Equivalents, Marketable Securities	))
=	341.096	-	48.921	-	( 53.709	-	max(0, 81.245	-	180.281	+	53.709	))
=	238.466

	Invested Capital		(Q: Sep. 2015 )
=	Total Assets	-	Accounts Payable & Accrued Expense	-	Excess Cash
=	Total Assets	-	Accounts Payable & Accrued Expense	-	( Cash, Cash Equivalents, Marketable Securities	-	max(0, Total Current Liabilities	-	Total Current Assets	+	Cash, Cash Equivalents, Marketable Securities	))
=	348.826	-	53.521	-	( 51.642	-	max(0, 85.744	-	187.775	+	51.642	))
=	243.663

Note: The Operating Income data used here is four times the quarterly (Sep. 2015) data.

2. Joel Greenblatt's definition of Return on Capital:

TeleCommunication Systems's annualized ROC (Joel Greenblatt) % for the quarter that ended in Sep. 2015 is calculated as:

	ROC (Joel Greenblatt) %		(Q: Sep. 2015 )
=	EBIT	/	Average of (Net fixed Assets	+	Net Working Capital)
=	EBIT	/	Average of (Property, Plant and Equipment	+	Net Working Capital)
			Q: Jun. 2015		Q: Sep. 2015
=	EBIT	/	( ( (Property, Plant and Equipment + Net Working Capital)	+	(Property, Plant and Equipment + Net Working Capital) )	/	count )
=	25.968	/	( ( (32.576 + max(21.912, 0))	+	(33.685 + max(21.058, 0)) )	/	2 )
=	25.968	/	( ( 54.488	+	54.743 )	/	2 )
=	25.968	/	54.6155
=	47.55 %

where Working Capital is:

	Working Capital		(Q: Jun. 2015 )
=	(Accounts Receivable	+	Total Inventories	+	Other Current Assets)	-	(Accounts Payable & Accrued Expense	+	Defer. Rev.	+	Other Current Liabilities)
=	(62.877	+	9.217	+	22.49)	-	(48.921	+	23.751	+	0)
=	21.912

	Working Capital		(Q: Sep. 2015 )
=	(Accounts Receivable	+	Total Inventories	+	Other Current Assets)	-	(Accounts Payable & Accrued Expense	+	Defer. Rev.	+	Other Current Liabilities)
=	(72.45	+	9.714	+	16.172)	-	(53.521	+	23.757	+	0)
=	21.058

When net working capital is negative, 0 is used.

Note: The EBIT data used here is four times the quarterly (Sep. 2015) EBIT data.

3. Operating Income is also linked to Operating Margin %:

TeleCommunication Systems's Operating Margin % for the quarter that ended in Sep. 2015 is calculated as:

Operating Margin %	=	Operating Income (Q: Sep. 2015 )	/	Revenue (Q: Sep. 2015 )
	=	6.66	/	101.14
	=	6.58 %

4. Please click Growth Rate Calculation Example (GuruFocus) to see how GuruFocus calculates Wal-Mart Stores Inc (WMT)'s revenue growth rate. You can apply the same method to get the Operating Income growth rate using Operating Income per share data.

Be Aware

Compared with a company's EBITDA margin, Operating Margin can be manipulated by adjusting the rate of depreciation, depletion and amortization (DDA).

If a company is facing competition, its Operating Margin may decline. Often the Operating Margin declines well before the company's revenue or even profit decline. Therefore, Operating Margin is a very important indicator of whether the company is facing problems.

For instance, by 2012, Nokia (NOK)'s problems were well known and its stock had lost more than 90% of its market value since 2007. But Nokia's Operating Margin had already been in decline since 2002, although its earnings per share were still rising. Investors who paid attention to Operating Margin would have avoided this huge loss. The same can be said for Research-in-Motion (RIMM).

Therefore, Operating Margin is a very important screening filter for GuruFocus. GuruFocus's Buffett-Munger screener requires that the profit margin is either consistent or expanding. The Model Portfolio of the Buffett-Munger screener has outperformed the market every year since inception in 2009.

TeleCommunication Systems Operating Income Related Terms

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TeleCommunication Systems (TeleCommunication Systems) Business Description

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http://www.telecomsys.com

TeleCommunication Systems Inc is a Maryland corporation, founded in 1987. The Company develops and delivers wireless communication technology, the development of which has led to ownership of 349 patents and nearly 400 patent applications. It delivers cellular network computing services that include public safety solutions for 9-1-1 call delivery, precision location platforms, and applications that include navigation, locator applications and text messaging, as well as secure wireless communications systems and professional services, including cybersecurity training and technology for defense and other government customers. Customers use its "mobile cloud" software functionality through connections to and from network operations centers, paying the Company monthly fees based on the number of subscribers, cell sites, call center circuits, or other metrics. The Company does business with the U.S. federal government as a prime contractor under major technology contract vehicles, as well as state, local and foreign government entities. The Company's segments include Government, and Commercial. Through the Government Segment, it provides professional services including field support of deployable wireless systems and cybersecurity training to the U.S. Department of Defense and other government and foreign customers. It owns and operates secure satellite teleport facilities, resell access to satellite airtime (known as space segment), and design, furnish, install and operate wireless communication systems and components, including its SwiftLink deployable communication systems which integrate high speed, satellite and internet protocol technology with secure, federal government-approved cryptologic devices. Through the Commercial segment, it enables 9-1-1 call routing via cellular, Voice over Internet Protocol (VoIP) and next generation technology. Other hosted and managed services include cellular carrier infrastructure for text messaging and location-based platforms and applications, including turn-by-turn navigation. Commercial segment customers include wireless carrier network operators, Voice over Internet Protocol service providers, wireless device manufacturers, automotive industry suppliers, and state and local governments. SwiftLink, Xypoint, AtlasBook, Gokivo, Connections that Matter, Designed for Mobility, Secure the Edge, Art of Exploitation, and Enabling Convergent Technologies are registered trademarks or service marks of the Company. The Company sells products and services through direct sales force and through indirect channels. The Company is subject to procurement and other related laws and regulations which carry significant penalties for non-compliance.

Executives

Bell Don Carlos Iii	director	3713 SOUTHWESTERN BLVD, DALLAS TX 75225
Michael P Madon	director	7732 BRIDLE PATH LN, MCLEAN VA 22102
Riverview Group Llc	10 percent owner	399 PARK AVENUE, NEW YORK NY 10022
Israel A Englander	other: May be deemed as group member.	C/O MILLENNIUM MANAGEMENT LLC, 399 PARK AVENUE, NEW YORK NY 10022
Millennium Management Llc	other: May be deemed as group member.	399 PARK AVENUE, NEW YORK NY 10022
Integrated Holding Group, L.p.	other: May be deemed as group member.	C/O MILLENNIUM MANAGEMENT LLC, 666 FIFTH AVENUE, 8TH FLOOR, NEW YORK NY 10103-0899