This excerpt taken from the TSYS 10-Q filed May 1, 2009.
For the three-months ended March 31, 2009, Government Segment revenue increased 216% reflecting increases in both services and systems revenue. During the third quarter of 2006, TCS was one of six vendors selected by the U.S. Army to provide secure satellite services and systems under a five year contract vehicle (the WWSS), with a possible maximum value of up to $5 billion for the six vendors. The WWSS contract vehicle is expected to continue to contribute significant government systems sales growth through 2011. The Companys Government Segment has been awarded participation as a prime or sub-contractor to provide similar satellite-based technology under several other contract vehicles. The total potential value of all WWSS awards received to date is approximately $370 million of which $148 million has been funded. We currently expect to fulfill the award potential by the end of 2011.
This excerpt taken from the TSYS 10-Q filed May 5, 2008.
We provide products and services to government customers under long-term contracts. We recognize contract revenue as billable costs are incurred and for fixed-price product delivery contracts using the percentage-of-completion method or proportional performance method, measured by either total labor costs or total costs incurred compared to total estimated labor costs or total costs to be incurred. We recognize estimated losses on contracts in their entirety upon discovery. If we have not accurately estimated total labor hours or costs to complete a contract or do not manage our contracts within the planned budget, then future margins may be negatively affected or losses on existing contracts may need to be recognized. Under our contracts with the U.S. Government, contract costs, including the allocated indirect expenses, are subject to audit and adjustment by the Defense Contract Audit Agency. Since the
Companys inception, no significant adjustment has resulted from a DCAA audit. We record revenue under these contracts at estimated net realizable amounts.
This excerpt taken from the TSYS 10-Q filed Nov 7, 2006.
Systems Revenue, Cost of Revenue, and Gross Profit:
Government system sales were $3.9 million in the third quarter of 2006, down from $6.3 million in the third quarter of 2005, reflecting the timing of orders and shipments. Year-to-date government system revenue was $15.7 million in 2006, up from $11.6 million last year. New products in our deployable communications system product line have generated higher sales volume in 2006 than in 2005.
We generate Government systems revenue from the design, development, assembly and deployment of information processing and communication systems, primarily our SwiftLink® brand lightweight, secure, deployable satellite-based communications systems, and integration of those systems into customer networks. Our principal government systems sales are to units of the U.S. Departments of State, Justice, and Defense and other agencies.
The cost of our government systems revenue consists of purchased system components, compensation, benefits, travel, satellite airtime, and the costs of third-party contractors that we engage. These equipment and third-party costs are variable for our various types of products, and margins fluctuate between periods based on the respective product mixes.
Our government systems gross profit was $1.2 million in the third quarter of 2006, down from $1.6 million in the third quarter of 2005 due to lower volume. For the nine month periods, gross profit on government systems was $5.7 million in 2006, up from $3.0 million in 2005, reflecting higher year-to-date sales volume and a higher average gross margin as a percentage of revenue.