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8-K - FORM 8-K - GTSI CORPc14002e8vk.htm
Exhibit 99.1
(GTSI LOGO)
GTSI Reports Fourth Quarter and Year-end Results
HERNDON, VA., March 11, 2011 — GTSI Corp. (NASDAQ: GTSI), a systems integration, solutions and services provider to the government, today announced its financial results for the three months and twelve months ended December 31, 2010.
“GTSI’s fourth quarter was significantly impacted by the temporary suspension by the Small Business Administration (SBA) on October 1, 2010 and the subsequent Administrative Agreement entered into with the SBA on October 19, 2010,” said Sterling Phillips, GTSI’s Chief Executive Officer and President. “During the fourth quarter, GTSI saw gross margin negatively impacted by $9.6 million and an increase of $3.4 million in operating expenses driven primarily by legal and related costs. Since joining the company in December, I have been impressed by the determination and skill of the men and women of GTSI as they are meeting the challenges head-on to restart business activities with a focus on delivering for our customer and putting the company back on a path toward growth and profitability.”
Reported Results
For the fourth quarter of 2010, GTSI reported revenue of $192.5 million compared to $243.5 million for the fourth quarter of 2009, with a revenue decline of 21.0%. Operating expenses were $23.2 million compared to $27.0 million, down 14.1%, driven primarily by strategic restructuring actions taken earlier in the year. Gross margin for the three months ended December 31, 2010 decreased to $19.6 million from $33.9 million, or 42.2%, from the same period in 2009, primarily due to lost sales as a result of the SBA action and related fallout. Net loss for the fourth quarter of 2010 was $1.0 million, compared to $5.8 million net profit for the same period in 2009. Diluted loss per share was $0.11 per share for the fourth quarter of 2010 compared to profit of $0.60 per share for the fourth quarter of 2009.
For the full year of 2010, GTSI reported revenue of $666.7 million compared to $761.9 million for 2009 with a revenue decline of 12.5%. Operating expenses in 2010 were $87.6 million compared to $98.1 million in 2009, down 10.7%. Gross margin for the year ended December 31, 2010 decreased to $80.3 million from $101.5 million, or 20.8%, from the same period in 2009, Net loss for the year was $0.9 million, compared to $5.5 million net profit for the same period in 2009. Diluted loss per share was $0.10 per share for 2010 compared to $0.56 per share for 2009. Diluted shares outstanding for the year were 9.6 million shares compared to 9.8 million shares in 2009.
The effective income tax rate was 64.8% and 43.5% for the year ended December 31, 2010 and 2009 respectively. The increase in the tax rate from 2009 to 2010 was due to non-deductible stock expense in 2010 of $3.5 million that did not occur in 2009. Excluding the effects of non-deductible stock expense, the effective tax rate would have been 40.0% for the year ended December 31, 2010.

 

 


 

GTSI ended the year with $4.0 million in cash on hand. The Company had no long-term debt and no borrowings under its credit facility. As of December 31, 2010, GTSI had stockholders’ equity of $96.2 million or $10.02 per diluted share.
Conference Call
An investor conference call to discuss fourth quarter and full year results is scheduled for 11:00 a.m. Eastern Time March 11, 2011. Interested parties are invited to participate by calling 800-593-9034 or 334-323-7224, pass code is GTSI. In addition, you may access the webcast on GTSI’s Investor Relations page (www.gtsi.com/ir). Webcast will be available for replay through March 11, 2012. To listen to the live call on the Internet, go to the web site at least 15 minutes early to register, download and install any necessary audio software. A replay will be available following the conclusion of the call until 6:00 p.m. eastern, March 21, 2011. To access the replay, please dial 877-919-4059 or 334-323-7226, pass code 49103957.
About GTSI Corp.
GTSI Corp. provides a Technology Lifecycle Management (TLM) approach to IT infrastructure solutions delivered through industry-leading professional and financial services. GTSI employs a proactive, strategic methodology that streamlines technology lifecycle management, from initial assessment to acquisition, implementation, refresh, and disposal. TLM allows customers to implement solutions quickly and cost-effectively. GTSI’s certified engineers and project managers leverage strategic partnerships with technology innovators. These experts use proven, repeatable processes to design, deploy, manage, and support simple to complex solutions, to meet client’s current and future requirements and business objectives. GTSI is headquartered in Herndon, Virginia, a suburb of Washington, D.C.. Further information about the Company is available at www.GTSI.com.
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.
GTSI Contact:
Paul Liberty
Vice President, Corporate Affairs & Investor Relations
703.502.2540
paul.liberty@gtsi.com

 

 


 

GTSI Corp. Unaudited Consolidated Statements of Operations
(In thousands, except per share data)
                                 
    Three Months Ended                  
    December 31,     2010 vs 2009  
    2010     2009     Variance     Percentage  
SALES
                               
Product
  $ 174,863     $ 211,144     $ (36,281 )     -17.2 %
Service
    12,559       14,790       (2,231 )     -15.1 %
Financing
    5,061       17,579       (12,518 )     -71.2 %
 
                       
 
    192,483       243,513       (51,030 )     -21.0 %
 
                       
COST OF SALES
                               
Product
    157,002       189,744       32,742       17.3 %
Service
    8,324       7,567       (757 )     -10.0 %
Financing
    7,573       12,347       4,774       38.7 %
 
                       
 
    172,899       209,658       36,759       17.5 %
 
                       
GROSS MARGIN
    19,584       33,855       (14,271 )     -42.2 %
SELLING, GENERAL & ADMINISTRATIVE EXPENSES
    23,184       26,979       3,795       14.1 %
 
                       
(LOSS) INCOME FROM OPERATIONS
    (3,600 )     6,876       (10,476 )     -152.4 %
INTEREST AND OTHER INCOME, NET
    1,822       3,070       (1,248 )     -40.6 %
 
                       
(LOSS) INCOME BEFORE TAXES
    (1,778 )     9,946       (11,724 )     -117.9 %
INCOME TAX BENEFIT (PROVISION)
    738       (4,120 )     4,858       117.9 %
 
                       
NET (LOSS) INCOME
  $ (1,040 )   $ 5,826     $ (6,866 )     -117.9 %
 
                       
(LOSS) EARNINGS PER SHARE
                               
Basic
  $ (0.11 )   $ 0.61     $ (0.72 )     -118.0 %
 
                       
Diluted
  $ (0.11 )   $ 0.60     $ (0.71 )     -118.3 %
 
                       
WEIGHTED AVERAGE SHARES OUTSTANDING
                               
Basic
    9,603       9,613       (10 )     -0.1 %
 
                       
Diluted
    9,603       9,675       (72 )     -0.7 %
 
                       

 

 


 

GTSI Corp. Unaudited Consolidated Statements of Operations
(In thousands, except per share data)
                                 
    Twelve Months Ended                
    December 31     2010 vs 2009  
    2010     2009     Variance     Percentage  
SALES
                               
Product
  $ 593,319     $ 677,966     $ (84,647 )     -12.5 %
Service
    51,140       55,625       (4,485 )     -8.1 %
Financing
    22,252       28,279       (6,027 )     -21.3 %
 
                       
 
    666,711       761,870       (95,159 )     -12.5 %
 
                       
COST OF SALES
                               
Product
    535,835       611,310       75,475       12.3 %
Service
    33,895       33,236       (659 )     -2.0 %
Financing
    16,641       15,872       (769 )     -4.8 %
 
                       
 
    586,371       660,418       74,047       11.2 %
 
                       
GROSS MARGIN
    80,340       101,452       (21,112 )     -20.8 %
SELLING, GENERAL & ADMINISTRATIVE EXPENSES
    87,636       98,107       10,471       10.7 %
 
                       
(LOSS) INCOME FROM OPERATIONS
    (7,296 )     3,345       (10,641 )     -318.1 %
INTEREST AND OTHER INCOME, NET
    7,466       6,320       1,146       18.1 %
 
                       
INCOME BEFORE TAXES
    170       9,665       (9,495 )     -98.2 %
INCOME TAX PROVISION
    (1,100 )     (4,209 )     3,109       73.9 %
 
                       
NET (LOSS) INCOME
  $ (930 )   $ 5,456     $ (6,386 )     -117.0 %
 
                       
(LOSS) EARNINGS PER SHARE
                               
Basic
  $ (0.10 )   $ 0.56     $ (0.66 )     -117.9 %
 
                       
Diluted
  $ (0.10 )   $ 0.56     $ (0.66 )     -117.9 %
 
                       
WEIGHTED AVERAGE SHARES OUTSTANDING
                               
Basic
    9,604       9,706       (102 )     -1.1 %
 
                       
Diluted
    9,604       9,762       (158 )     -1.6 %
 
                       

 

 


 

GTSI Corp. Unaudited Consolidated Balance Sheet
(In thousands)
                                 
                    Change from December  
    December 31,     December 31,     31, 2009  
    2010     2009     Variance     Percentage  
ASSETS
                               
Current assets:
                               
Cash and cash equivalents
  $ 4,049     $ 7,894     $ (3,845 )     -48.7 %
Accounts receivable, net
    154,891       209,595       (54,704 )     -26.1 %
Inventory
    13,708       13,477       231       1.7 %
Deferred costs
    6,991       1,807       5,184       286.9 %
Other current assets
    2,462       4,140       (1,678 )     -40.5 %
 
                       
Total current assets
    182,101       236,913       (54,812 )     -23.1 %
Depreciable assets, net
    7,452       10,960       (3,508 )     -32.0 %
Long-term receivables and other assets
    14,291       40,758       (26,467 )     -64.9 %
 
                       
 
                               
TOTAL ASSETS
  $ 203,844     $ 288,631     $ (84,787 )     -29.4 %
 
                       
LIABILITIES AND STOCKHOLDERS’ EQUITY
                               
Current liabilities:
                               
Accounts payable
  $ 50,870     $ 109,723     $ 58,853       53.6 %
Accounts payable — Floor plan
    35,172       34,889       (283 )     -0.8 %
Financed lease debt, current portion
          831       831       100.0 %
Accrued liabilities
    14,887       26,127       11,240       43.0 %
Deferred revenue
    3,661       3,176       (485 )     -15.3 %
 
                       
Total current liabilities
    104,590       174,746       70,156       40.1 %
Other liabilities
    3,044       17,598       14,554       82.7 %
 
                       
Total liabilities
    107,634       192,344       84,710       44.0 %
Total stockholder’s equity
    96,210       96,287       77       -0.1 %
 
                       
 
                               
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
  $ 203,844     $ 288,631     $ 84,787       29.4 %