US Security Integrator Financial Results Examined

Henry Brothers [link no longer available], one of the largest US integrators has reported their Q2 financial results. SSN has an analysis of the results. HBE revenue dropped 7.6% compared to last year. The company barely broke even.

One interesting trend found in their 10Q is that their backlog [link no longer available] grew significantly in Q2 compared to last year. Henry Brothers reports that this increase is driven by US government projects which offset drops in the commercial space. This is likely the best tactic given the current US economic condition (still very weak consumer/corporate spending, massive government outlays).

Note: Larger integrators tend not to be very profitable. The integration business inherently suffers from diseconomies of scale. As such, it's not surprising that Henry Brother's market cap ($36M USD) is almost half its annual sales (approx $70M USD).