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Marty Chilberg
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Marty Chilberg is a seasoned financial professional with over 30 years of executive leadership, board, consulting and advisory experience.  He began his career as a certified public accountant (CPA). He moved to Silicon Valley in 1981 to begin his career in the software industry, working for... More
  • TeleCommunications Systems Sept CC 1 comment
    Nov 5, 2010 2:53 PM | about stocks: TSYS

    Sadly this company missed another opportunity to build on their recent momentum with their earnings conference call.  The earnings report itself had a few surprises with the net result about where I was forecasting.  Government revenue was soft again while commercial was a little stronger than expected leading to net revenues of $102.9m which met expectations.  Margins were about on target as well with the mix helping offset the decline in government systems margin.  Spending was higher in G&A than I'd like which per the PR was from patent professional services(legal) costs.  Receivables and inventories increase from unusually low levels in June.  On the whole no reason to celebrate or be concerned from my perspective and meeting earnings and revenues was something they hadn't done in 3 of last 4 quarters.

    The conference call was another story.  The content was minimal.  Tone was flat with no real enthusiasm.  Q&A was lackluster as well with only one analyst asking questions until some late participants provide a couple token Q's.  Guidance for CY10 was decreased again.  Per management Q4 revenue will likely come in between $109-114m.  EPS for Q4 is guided to be $0.03-0.08.  Both revenue and eps guidance is below current street consensus.  This drop is even more disappointing after the recent flurry of government business wins with substantial contract potential.  Backlog was about flat although customer options (unfunded) showed substantial improvement. 

    No guidance was provided for C11 deferring to the next conference call which left me and I'm sure more analysts feeling a little unfulfilled.  The CEO mentioned the company's goal of achieving 15-25% annual growth long term but even that was awkward as he added either through organic or other means.

    I'm still optimistic about the opportunity that is at the door step of TSYS but I'm getting tired of them continually deferring that upside with short term results/guidance remaining less than advertised.

    Disclosure: Long TSYS

    Stocks: TSYS
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  • RGKast
    , contributor
    Comments (3) | Send Message
    Marty - Your report on the CC was excellant and realistic.


    I am becoming increasingly suspect of the management of this company. In this CC, they certainly did not conduct themselves in a manner that you would expect from highly paid CEO and CFO of a multmillion dollar company. They did not express themselves in a very positive manner even though there were many good things that happened during the quarter that they could have emphasized in the CC. Sometimes, I wonder if they have any concern for the individual investors. With the facts they had, I am certain that you or any other professional person could have done a much better job in conducting this CC.


    If they had not announced the new contract an hour and a half before the CC, the stock would have fallen considerably below its current price of $5.10. I am very long on TSYS. To my regret, I quickly bought 5,000 more shares of the stock immediately when the new contract was announced (prior to CC).


    Looking forward to your next comprehensive report on the company. I will continue to hang in there dispite the many frustrations experiences over the past year. My patience is running thin.


    R. George Kast
    5 Nov 2010, 04:29 PM Reply Like
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