GTSI Corp. (NASDAQ: GTSI), a systems integration, solutions and
services provider to federal, state and local governments, today
announced its financial results for the three months ended March
31, 2012.
Reported Results
For the first quarter of 2012, GTSI reported an 8.6% increase in
total revenue to $76.4 million compared to $70.3 million for the
first quarter of 2011. Total gross margin for the first quarter of
2012 decreased $1.4 million to $11.6 million, a reduction of 11.0%,
from the same period in 2011. Gross margin percent for the first
quarter was 15.1% compared to 18.5% for the same quarter last year.
Operating expenses declined $3.2 million or 17.8% to $15.1 million
compared to $18.3 million for the first quarter of 2011. The
resulting loss from operations of $3.5 million is a $1.8 million
improvement from the $5.3 million loss from operations reported for
the first quarter of 2011. Equity earnings from our investment in
Eyak Technology LLC (EyakTek) declined $1.1 million as a result of
the sale of our equity interest during the third quarter of 2011.
The net loss for the first quarter of 2012 was $2.5 million, an
improvement compared to the net loss of $2.7 million for the same
period in 2011. Earnings per share improved $0.02 per share or 6.5%
compared to the loss per share of $0.28 reported for Q1 2011.
Sterling Phillips, GTSI’s president and chief executive officer,
stated, “We are pleased with the year-over-year improvement in
revenue and key profitability metrics. Our expanded sales force is
showing results and the restructuring over the past year allows us
to be more profitable.”
Additional Information
Within overall revenue growth, product revenue improved $1.2
million, services revenue improved $6.7 million and financing
revenue declined $1.8 million. The gross margin decline includes a
product gross margin reduction of $2.3 million, a services gross
margin increase of $2.1 million and a financing gross margin
decline of $1.2 million. Within operating expenses, salaries and
related expenses declined $2.2 million and professional services
expenses declined $0.9 million. The decline in professional
services expenses reflects lower fees for lawyers and the monitor
related to the SBA administrative agreement. As reported in the
2011 10-K filing, during the quarter we sublet excess space in our
headquarters facility which resulted in a one-time charge of $606K
which represents the difference between actual rental expense and
the $1.3 million in sublease payments expected over the term of the
sublease. The expense reduction realized from the sublease will be
recognized in future quarters.
GTSI ended the quarter with $63.3 million in cash on hand. The
Company had no long-term debt and no borrowings under its credit
facility. As of March 31, 2012, GTSI had stockholders’ equity of
$94.6 million or $9.78 per diluted share.
Conference Call
As announced May 7, 2012, GTSI has entered into a definitive
agreement to be acquired through a cash tender offer at $7.75 per
share by an affiliate of UNICOM® Systems, Inc. The transaction is
expected to close in late second quarter or early third quarter of
2012. Due to the ongoing transaction, GTSI will not be conducting a
conference call to discuss first quarter results.
About GTSI Corp.
GTSI (NASDAQ: GTSI) is a leading provider of technology
solutions and professional services to federal, state and local
governments. Founded in 1983, the company has helped meet the
unique IT needs of more than 1,700 governmental agencies
nationwide. GTSI professionals draw on their deep knowledge,
strategic partnerships, customer service and more than 740 industry
certifications to guide agencies in selecting the most
cost-effective technology available. GTSI has extensive
capabilities and past performance in software development, data
center, networking, collaboration, security and cloud computing
solutions. In addition, GTSI's advanced engineering, integration,
support and financial services - and broad portfolio of contracts -
ease the planning, purchasing and deployment of solutions, and
facilitates the management of mission-critical IT throughout the
lifecycle. Headquartered in Herndon, Va., GTSI has approximately
450 employees. For more information visit the company's website at
www.gtsi.com.
Forward Looking
Statements
Except for historical information, all of the statements,
expectations, beliefs and assumptions contained in the foregoing
are "forward-looking statements" (within the meaning of the Private
Securities Litigation Reform Act of 1995) that involve a number of
risks and uncertainties. It is possible that the assumptions made
by management, including, but not limited to, those relating to
sales, margins, operating results and net income, and the effect of
new contracts and lender agreements, as well as new vendor
relationships may not materialize. Actual results may differ
materially from those projected or implied in any forward-looking
statements. In addition to the above factors, other important
factors that could cause actual results to differ materially are
discussed in the Company’s most recent annual report on Form 10–K
and included from time to time in other documents filed by the
Company with the Securities and Exchange Commission.
GTSI and GTSI.com are registered trademarks of GTSI Corp. in the
U.S. and other countries. All trade names are the property of their
respective owners.
All press releases are available in the News Room
on GTSI.com
GTSI Corp. Unaudited Condensed Consolidated Balance Sheets
(In thousands)
March 31,2012
December 31, 2011
ASSETS Current assets: Cash and cash equivalents $ 63,250 $
54,872 Accounts receivable, net 46,008 76,014 Inventory, net 9,728
8,623 Deferred costs 533 1,587 Other current assets 3,545
1,645 Total current assets 123,064 142,741 Depreciable
assets, net 3,744 4,482 Long-term receivables and other assets
2,642 3,126 Other intangible assets, net 3,847 4,076 Goodwill
9,415 9,415
TOTAL ASSETS $ 142,712 $ 163,840
LIABILITIES AND STOCKHOLDERS’ EQUITY Current
liabilities: Accounts payable $ 27,196 $ 33,598 Accounts payable -
floor plan 6,132 14,049 Accrued liabilities 8,122 11,351 Deferred
revenue 2,562 4,105
Total current liabilities
44,012 63,103 Other liabilities 4,148 3,779 Total liabilities
48,160 66,882 Total stockholders’ equity 94,552
96,958
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 142,712
$ 163,840
GTSI Corp. Unaudited Condensed Consolidated
Statements of Operations (In thousands, except per
share data) Three Months Ended March
31, 2012 2011
SALES Product $ 59,707 $ 58,538 Services 14,588 7,886 Financing
2,117 3,911 76,412 70,335 COST
OF SALES Product 53,403 49,967 Services 10,601 5,973 Financing
842 1,406 64,846
57,346 GROSS MARGIN 11,566 12,989 SELLING,
GENERAL & ADMINISTRATIVE EXPENSES 15,043
18,295 LOSS FROM OPERATIONS (3,477 ) (5,306 )
INTEREST AND OTHER (EXPENSE) INCOME, NET Interest and other
income 44 30 Equity income from EyakTek - 1,104 Interest expense
(140 ) (150 ) Interest and other (expense) income,
net (96 ) 984 LOSS BEFORE INCOME TAXES
(3,573 ) (4,322 ) INCOME TAX BENEFIT (1,065 )
(1,649 ) NET LOSS $ (2,508 ) $ (2,673 ) LOSS PER
SHARE Basic $ (0.26 ) $ (0.28 ) Diluted $ (0.26 ) $ (0.28 )
WEIGHTED AVERAGE SHARES OUTSTANDING Basic 9,670
9,632 Diluted 9,670 9,632
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