TSYS » Topics » Government Systems Revenue and Cost of Revenue:

These excerpts taken from the TSYS 10-K filed Mar 3, 2009.
Government Systems Revenue and Cost of Revenue:
 
We generate government systems revenue from the design, development, assembly and deployment of information processing and communication systems, primarily deployable satellite-based communication systems, and integration of those systems into our customer networks. These are largely variations on our SwiftLink® product line, which are lightweight, secure, deployable communication systems, sold to units of the U.S. Departments of State, Justice and Defense, and other government agencies. Government systems sales more than doubled to $81.4 million in 2008 from $39.6 million in 2007, which was more than double the $19.3 million in 2006. The increases over the last three years in systems revenues were primarily due to increases in sales volume from the fulfillment of task orders under the WWSS 5-year contract vehicle, for which TCS was one of six awardees in September 2006. In July 2008, TCS was named the sole awardee of a delivery order contract with a potential value of $246 million over the next several years, under the WWSS procurement vehicle.
 
The cost of our government systems revenue consists of purchased system components, compensation, benefits, travel, and the costs related to third-party contractors that we engage. These costs have increased over the three years presented as a direct result of the increase in volume. These equipment and third-party costs are variable for our various types of products, and margins may fluctuate between periods based on pricing and product mix.
 
Our government systems gross profit in 2008 increased 96% over 2007 primarily due to higher sales volume under the WWSS procurement vehicle. Government systems gross profit was the same at $6.7 million in 2007 and 2006. In 2007, the effect of lower margins was offset by an increase over 2006 volume.
 
Government
Systems Revenue and Cost of Revenue:



 



We generate government systems revenue from the design,
development, assembly and deployment of information processing
and communication systems, primarily deployable satellite-based
communication systems, and integration of those systems into our
customer networks. These are largely variations on our
SwiftLink®

product line, which are lightweight, secure, deployable
communication systems, sold to units of the
U.S. Departments of State, Justice and Defense, and other
government agencies. Government systems sales more than doubled
to $81.4 million in 2008 from $39.6 million in 2007,
which was more than double the $19.3 million in 2006. The
increases over the last three years in systems revenues were
primarily due to increases in sales volume from the fulfillment
of task orders under the WWSS
5-year
contract vehicle, for which TCS was one of six awardees in
September 2006. In July 2008, TCS was named the sole awardee of
a delivery order contract with a potential value of
$246 million over the next several years, under the WWSS
procurement vehicle.


 



The cost of our government systems revenue consists of purchased
system components, compensation, benefits, travel, and the costs
related to third-party contractors that we engage. These costs
have increased over the three years presented as a direct result
of the increase in volume. These equipment and third-party costs
are variable for our various types of products, and margins may
fluctuate between periods based on pricing and product mix.


 



Our government systems gross profit in 2008 increased 96% over
2007 primarily due to higher sales volume under the WWSS
procurement vehicle. Government systems gross profit was the
same at $6.7 million in 2007 and 2006. In 2007, the effect
of lower margins was offset by an increase over 2006 volume.


 




These excerpts taken from the TSYS 10-K filed Mar 5, 2008.
Government Systems Revenue and Cost of Revenue:
 
We generate government systems revenue from the design, development, assembly and deployment of information processing and communication systems, primarily deployable communications systems, which are largely variations on our SwiftLink® product line, and integration of those systems into customer networks. Swiftlink® systems are secure, deployable communications systems, sold mainly to units of the U.S. Departments of Defense, State, and Justice, as well as to other agencies. 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, total costs incurred or units shipped compared to total estimated labor costs, costs incurred, or units as appropriate under the contract. We recognize estimated losses on contracts in their entirety upon discovery.
 
Government systems sales increased to $39.6 million in 2007 from $19.3 million in 2006 and $15.5 million in 2005. The 2006 and 2007 variations in systems revenues were primarily due to increases in the volume of unit sales of our SwiftLink® and deployable communications systems resulting from competitive wins, largely under the World Wide Satellite Systems Army procurement vehicle.
 
The cost of our government systems revenue consists of compensation, benefits, travel, satellite “space segment” and airtime, costs related to purchased equipment components, 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 may fluctuate between periods based on the respective product mixes.
 
Our government systems gross profit was the same at $6.7 million in 2007 and 2006 and increased from $3.5 million in 2005 primarily due to higher volume. In 2007, the effect of lower margins was offset by an increase over 2006 volume.


35


 

Operating Expenses:
 
Government
Systems Revenue and Cost of Revenue:



 



We generate government systems revenue from the design,
development, assembly and deployment of information processing
and communication systems, primarily deployable communications
systems, which are largely variations on our
SwiftLink®
product line, and integration of those systems into customer
networks.
Swiftlink®
systems are secure, deployable communications systems, sold
mainly to units of the U.S. Departments of Defense, State,
and Justice, as well as to other agencies. 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, total costs incurred or units shipped
compared to total estimated labor costs, costs incurred, or
units as appropriate under the contract. We recognize estimated
losses on contracts in their entirety upon discovery.


 



Government systems sales increased to $39.6 million in 2007
from $19.3 million in 2006 and $15.5 million in 2005.
The 2006 and 2007 variations in systems revenues were primarily
due to increases in the volume of unit sales of our
SwiftLink®
and deployable communications systems resulting from competitive
wins, largely under the World Wide Satellite Systems Army
procurement vehicle.


 



The cost of our government systems revenue consists of
compensation, benefits, travel, satellite “space
segment” and airtime, costs related to purchased equipment
components, 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 may fluctuate between
periods based on the respective product mixes.


 



Our government systems gross profit was the same at
$6.7 million in 2007 and 2006 and increased from
$3.5 million in 2005 primarily due to higher volume. In
2007, the effect of lower margins was offset by an increase over
2006 volume.





35





 






Operating Expenses:


 




This excerpt taken from the TSYS 10-K filed Mar 13, 2007.
Government Systems Revenue and Cost of Revenue:
 
We generate government systems revenue from the design, development, assembly and deployment of information processing and communication systems, primarily deployable communications systems, and integration of those systems into customer networks. Our principal government systems deliverables are our SwiftLink® product line, which are lightweight, secure, deployable communications systems, sold mainly to units of the U.S. Departments of Defense, State, and Justice, as well as to other agencies and customers. We recognize contract revenue as billable costs are incurred and for fixed-price product delivery contracts using the percentage-of-completion method, measured by either total labor hours or total costs incurred compared to total estimated labor hours or costs. Labor hours are used as a measure of progress for projects that contain a significant amount of third party material costs. Government systems sales increased to $19.3 million in 2006 from $15.5 million in 2005, which was a decrease from $23.6 million in 2004. The 2005 and 2006 variations in systems revenues were primarily due to variations in the volume of unit sales of our SwiftLink® and deployable communications systems resulting from changing government procurement priorities and competition with alternative vendors.
 
The cost of our government systems revenue consists of compensation, benefits, travel, satellite “space segment” and airtime, costs related to purchased equipment components, 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 may fluctuate between periods based on the respective product mixes. Also, in 2006 as a result of


34


 

the implementation of SFAS 123(R), $0.1 million of our non-cash stock compensation cost is included in the direct cost of revenue.
 
Our government systems gross profit increased to $6.7 million in 2006 from $3.5 million in 2005, which was a decrease from $8.2 million in 2004. These changes corresponded to increases and decreases in unit volume in the respective periods.
 
Operating Expenses:
 
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