TeleCommunication Systems Reports Record 2009 Fourth Quarter and Full Year Results

Record Annual Revenue of $300 Million Drives $0.91 EBITDA per Diluted Share and $0.53 Net Income per Diluted Share

February 4, 2010

ANNAPOLIS, MD, Feb 04, 2010 (MARKETWIRE via COMTEX) -- TeleCommunication Systems, Inc. (TCS) (NASDAQ: TSYS), a world leader in high availability and secure mobile communication technology, reported record results for the fourth quarter and fiscal year ended December 31, 2009.

Fourth Quarter 2009 Results

--  Revenue was a record $90.8 million, an increase of 15% from $79.3 million in the fourth quarter of 2008. Fourth quarter 2009 results include partial-period contributions from three businesses acquired during the quarter. Their total revenue contribution was approximately $5 million or less than 6% of the company's $90.8 million total revenue for the quarter, so their impact are not called out separately in the following comments.

--  Gross profit was a record $30.4 million, up 22% from $25 million in the fourth quarter of 2008.

--  EBITDA (Earnings before Interest, Taxes, Depreciation and Amortization, including non-cash stock-based compensation) for the quarter was $25.9 million or $0.44 per diluted share. Excluding a patent-related gain, net of expenses, EBITDA was $10.2 million or $0.17 per diluted share, an increase of 36% from $7.5 million or $0.15 per diluted share in the same year ago quarter (see discussion about the presentation of EBITDA below).

--  Pre-tax income was a record $19.2 million, including the $15.7 million patent-related gain or $0.33 per diluted share, an increase of 308% from $4.7 million or $0.10 per diluted share in the fourth quarter of 2008.

--  Net income after a 40% tax provision was $11.4 million or $0.20 per diluted share. We reported net income of $38.2 million or $0.78 per diluted share in the fourth quarter of 2008, which included $33.6 million or $0.68 per diluted share related to a reduction in the deferred tax asset valuation allowance.


Full Year 2009 Results

--  Revenue was a record $300.1 million, an increase of 36% from the previous record of $220.1 million in 2008. This represents the company's 12th consecutive year of record revenue.

--  Gross profit was a record $113.9 million, up 40% from the previous record of $81.3 million in 2008.

--  EBITDA, excluding the patent-related gain, net of expenses of $15.7 million or $0.29 per diluted share, was a record $49.1 million or $0.91 per diluted share, an increase of 69% from the previous record of $29 million or $0.62 per diluted share (which includes an $8.1 million, or $0.17 per diluted share impact of a patent gain, net of expenses).

--  Pre-tax income was a record $47.1 million, including the $15.7 million patent-related gain or $0.87 per diluted share, an increase of 93% from the previous record of $24.3 million or $0.52 in 2008.

--  Net income after a 40% tax provision was $28.3 million or $0.53 per diluted share. We reported net income of $57.6 million or $1.23 per diluted share in 2008, which included $33.3 million or $0.71 related to a reduction in the deferred tax asset valuation allowance and $0.17 from a patent sale in the second quarter of 2008.

--  Year-end total backlog was $630.8 million, up from $450 million at the end of last year. The increase includes the effects of businesses acquired in the fourth quarter.

For the full report, including financial summaries, please visit http://www.telecomsys.com/news/index.cfm.

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