Integral Systems… Financially Speaking…

Integral Systems, Inc. (Nasdaq:ISYS) has reported financial results for its second fiscal quarter ended March 26, 2010.

Revenue for the second quarter of fiscal 2010 was $40.3 million, a decrease of 5.8 percent versus the second quarter of 2009. Gross margin was 40.5 percent, compared to 40.2 percent for the second quarter of fiscal 2009. Second quarter 2010 income from operations was $0.3 million, compared to income from operations of $4.2 million reported in the second quarter of fiscal 2009. Net income for the second quarter of fiscal 2010 was $0.1 million or $0.01 per diluted share, compared to net income of $2.6 million or $0.15 per diluted share reported for the second quarter of fiscal 2009. Excluding the acquisition and interest expenses incurred relating to the CVG-Avtec acquisition discussed below, diluted earnings per share in the second quarter of fiscal 2010 would have been $0.06.

Included in the earnings results for the second quarter of fiscal 2010 is the impact of the following items:

• A gain of $2.2 million ($0.07 per share) reflecting the recovery of a bad debt reserve previously taken in the third quarter of fiscal 2009 as a result of the bankruptcy of a Commercial customer
• An increase in the Company’s lease loss provision of $1.5 million ($0.05 per share) related to real estate in Lanham, Maryland
• Acquisition and interest expenses of $1.5 million ($0.05 per share) relating to the Company’s March 5th acquisition of CVG, Inc. and its wholly owned subsidiary, Avtec Systems (CVG-Avtec), now operating as Integral Systems SATCOM Solutions

“This quarter Integral Systems advanced our business strategically with the acquisition of CVG-Avtec, demonstrating our continued commitment to invest in new markets and industry-leading technology,” said Paul Casner, President and Chief Executive Officer. “We expect the contributions of CVG-Avnet to become apparent later this year, and we are optimistic that its contribution to our business, combined with continued solid growth of our Products Group and our recently launched Services Group, set the stage for long-term growth and profitability. We remain mindful of the current market conditions and we continue to keep a very close hold on managing our operations and controlling indirect costs. With this focus and our business projections — including the expected benefits from CVG-Avtec — we reaffirm our fiscal 2010 earnings guidance of $0.35 – $0.40 per share.” To read the entire financial report, select this direct link.