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Exhibit 99.1

LOGO

COMPUTER SOFTWARE INNOVATIONS, INC. ANNOUNCES FOURTH QUARTER AND YEAR END 2010 RESULTS

Easley, SC – (MARKET WIRE) – March 24, 2011 – Computer Software Innovations, Inc. (OTCBB: CSWI), CSI Technology Outfitters(TM) (“CSI”) today announced its financial results for the fourth quarter and full year ended December 31, 2010.

Financial Highlights:

 

   

Revenues of $52.7 million for the 2010 fiscal year, an increase of $0.9 million over 2009;

 

   

Operating Income of $1.1 million for the 2010 fiscal year, an increase of 9% over 2009;

 

   

Gross Profit of $10.7 million for the 2010 fiscal year, a decrease of $0.6 million or 5% below 2009;

 

   

Net Income of $0.5 million for the 2010 fiscal year, an increase of $0.2 million or 56% over 2009.

Financial Results – Fourth Quarter 2010:

For the quarter ended December 31, 2010, revenues totaled approximately $11.4 million, a slight increase of 0.2% from the fourth quarter of 2009.

Gross profit for the fourth quarter of 2010 was approximately $2.3 million, a decrease of approximately $0.2 million or 7% from the fourth quarter of 2009, primarily from a decrease in the Cloud Services Segment profits with the increased investment in new product offerings and a decrease in Financial Management Applications new license and services sales, partially offset by an increase in Technology Solutions Segment profits with increased engineering services.

Operating loss for the fourth quarter of 2010 was approximately $36 thousand, a decrease of approximately $0.1 million or 147% from the fourth quarter of 2009, driven by the decrease in gross profit.

CSI posted a net loss of $62 thousand for the fourth quarter of 2010, compared to a net loss of $5 thousand for the fourth quarter of 2009, as a result of the decrease in gross profit. Due to the seasonality of CSI’s business, the fourth and first quarters are traditionally the lowest performing quarters in its fiscal year.

CSI’s EBITDA was approximately $0.6 million for the fourth quarter of 2010, a decrease of approximately $0.1 million or 19% from the fourth quarter of 2009. (EBITDA is a non-GAAP financial measure. See reconciliation to GAAP measure Net Income which follows.)

Financial Results – Fiscal Year 2010:

CSI posted revenues of approximately $52.7 million for the 2010 fiscal year, an increase of $0.9 million or 2% over the 2009 fiscal year. The increase was driven by a $1.2 million or 3% increase in our Technology Solutions Segment and a $0.1 million increase in our Financial Management Applications Segment, partially offset by a $0.4 million or 28% decrease in our Cloud Services Segment.

CSI’s gross profit for the 2010 fiscal year was approximately $10.7 million, a decrease of $0.6 million or 5% below the 2009 fiscal year. This decrease was driven primarily by a decrease in gross profit by the Cloud Services and the Technology Solutions Segments, and partially offset by an increase in gross profit from the Financial Management Applications Segment.

CSI’s operating income for the 2010 fiscal year was approximately $1.1 million, an increase of $0.1 million or 9% over the 2009 fiscal year. The increase was due to the impact of the $0.7 million decrease in operating expenses, partially offset by the $0.6 million decrease in gross profit.

Net income for the 2010 fiscal year was approximately $0.5 million or $0.07 per basic share and $0.03 per diluted share, as compared to net income of approximately $0.3 million, or $0.05 per basic share and $0.02 per diluted share for the 2009 fiscal year.

EBITDA, or earnings before interest, income taxes, depreciation and amortization for the 2010 fiscal year was approximately $3.5 million, a slight increase over the 2009 fiscal year. (EBITDA is a non-GAAP financial measure. See reconciliation to GAAP measure Net Income which follows.)

“I am pleased that CSI was able to hold our own and remain profitable during these trying economic times and that we are in an excellent position to grow our business in the years ahead,” stated Nancy Hedrick, CEO. “During 2010 we launched our Cloud Services Segment, focusing on our CSI@K12 hosted email and hosted voice for the K-12 market. In 2011 we are continuing to

 

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develop these solutions for K-12 and are expanding them into higher education. Our Financial Management Applications Segment continued to do well in 2010 and we are seeing a significant uptick in new software sales in early 2011. And our Technology Solutions Segment remains focused on the 21st Century Connected Classroom while we have also expanded our offerings to include physical security, including IP-based surveillance. Operating system migrations and virtualization are growing components of this segment along with our core technologies, including on-premise IP telephony, network security, wireless technologies, and PC and laptop deployments.”

Conference Call Reminder for Today

The Company will host a conference call today, Thursday, March 24, 2011 at 4:15 Eastern Time to discuss the Company’s financial and operational results for year ended December 31, 2010.

Conference Call Details

Date: Thursday, March 24, 2011

Time: 4:15 p.m. (EDT)

Dial-in Number: 1-877-941-8416

International Dial-in Number: 1-480-629-9808

It is recommended that participants phone-in approximately 5 to 10 minutes prior to the start of the 4:15 p.m. call. A replay of the conference call will be available approximately 3 hours after the completion of the call for 30 days, until April 23, 2011. To listen to the replay, dial 1-877-870-5176 if calling within the U.S., 1-858-384-5517if calling internationally and enter the pass code4421899.

The call is also being webcast and may be accessed at CSI’s website at www.csioutfitters.com. The webcast will be archived and accessible until April 23, 2011 on the Company website.

About Computer Software Innovations, Inc.

CSI provides software and technology solutions to public sector markets. CSI software solutions have established the Company as a major software provider in the southeast education market including through its award winning financial management solutions for the education and local government market sectors. CSI’s Version3 products, which include identity and access management and cloud-based communication and collaboration solutions, expand CSI’s presence throughout the US. The CSI@K12 Education Cloud provides the education community with enterprise class, hosted voice, hosted email and hosted web solutions.

The CSI 21st Century Connected School solution has established the Company as a major technology provider to the southeast education market. CSI 21st Century Connected School is a seamless integration of instruction, collaboration, and network solutions. CSI financial management applications and the 21st Century Connected School solutions have been a significant factor in nearly doubling company revenue in the past four years to over $50 million and increasing education revenue contribution to approximately 90% of total revenue.

The CSI solution portfolio encompasses proprietary financial management software specialized for the public sector, lesson planning and identity and access management software, cloud-based communication and collaboration solutions, SharePoint development, network infrastructure and end device solutions, IP telephony and IP convergence applications, network management solutions and managed services, and interactive classroom technologies. More information about CSI (OTCBB: CSWI.OB) is available at www.csioutfitters.com.

Financial Tables to Follow

 

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COMPUTER SOFTWARE INNOVATIONS, INC.

CONSOLIDATED STATEMENTS OF INCOME

 

(Amounts in thousands, except per share data)    For the Quarter Ended
December 31,
    For the Years Ended
December 31,
 
     2010     2009     2010     2009  

REVENUES

        

Financial Management Applications Segment

   $ 3,180      $ 3,526      $ 13,652      $ 13,585   

Cloud Services Segment

     256        305        954        1,319   

Technology Solutions Segment

     7,946        7,531        38,067        36,913   
                                

Net sales and service revenue

     11,382        11,362        52,673        51,817   

COST OF SALES

        

Financial Management Applications Segment

        

Cost of sales, excluding depreciation, amortization and capitalization

     1,932        1,941        7,566        7,448   

Depreciation

     30        28        117        109   

Amortization of capitalized software costs

     341        322        1,184        1,171   

Capitalization of software costs

     (361     (240     (1,144     (943
                                

Total Financial Management Applications Segment cost of sales

     1,942        2,051        7,723        7,785   

Cloud Services Segment

        

Cost of sales, excluding depreciation, amortization and capitalization

     385        354        1,802        1,064   

Depreciation

     24        5        63        12   

Amortization of capitalized software costs

     82        97        324        381   

Capitalization of software costs

     (126     (145     (613     (145
                                

Total Cloud Services Segment cost of sales

     365        311        1,576        1,312   

Technology Solutions Segment

        

Cost of sales, excluding depreciation

     6,709        6,454        32,536        31,276   

Depreciation

     28        24        103        104   
                                

Total Technology Solutions Segment cost of sales

     6,737        6,478        32,639        31,380   
                                

Total cost of sales

     9,044        8,840        41,938        40,477   
                                

Gross profit

     2,338        2,522        10,735        11,340   

OPERATING EXPENSES

        

Research and development

     44        59        166        311   

Selling costs

     1,209        1,189        4,572        4,797   

Marketing costs

     131        53        518        425   

Stock based (non-employee wage) compensation

     (1     28        48        165   

Acquisition costs

     —          —          —          2   

Professional and legal compliance costs

     44        127        429        505   

Depreciation and amortization

     116        159        550        642   

Other general and administrative expenses

     831        830        3,327        3,457   
                                

Total operating expenses

     2,374        2,445        9,610        10,304   
                                

Operating (loss) income

     (36     77        1,125        1,036   

OTHER EXPENSE

        

Interest expense

     (30     (86     (231     (388

Loss on disposal of property and equipment

     (6     —          (8     (4
                                

Other expense

     (36     (86     (239     (392
                                

Income before income taxes

     (72     (9     886        644   

INCOME TAX (BENEFIT) EXPENSE

     (10     (4     433        354   
                                

NET (LOSS) INCOME

   $ (62   $ (5   $ 453      $ 290   
                                

BASIC (LOSS) EARNINGS PER SHARE

   $ (0.01   $ —        $ 0.07      $ 0.05   
                                

DILUTED (LOSS) EARNINGS PER SHARE

   $ (0.01   $ —        $ 0.03      $ 0.02   
                                

WEIGHTED AVERAGE SHARES OUTSTANDING:

        

— Basic

     6,545        6,436        6,504        6,401   
                                

— Diluted

     6,545        6,436        13,899        14,105   
                                

 

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COMPUTER SOFTWARE INNOVATIONS, INC.

CONSOLIDATED BALANCE SHEETS

 

(Amounts in thousands)    December 31, 2010     December 31, 2009  

ASSETS

    

CURRENT ASSETS

    

Cash and cash equivalents

   $ 1,578      $ —     

Accounts receivable, net

     8,681        7,587   

Inventories

     558        2,628   

Prepaid expenses

     159        140   

Taxes receivable

     284        32   
                

Total current assets

     11,260        10,387   

PROPERTY AND EQUIPMENT, net

     1,033        732   

COMPUTER SOFTWARE COSTS, net

     2,844        2,573   

GOODWILL

     2,431        2,431   

OTHER INTANGIBLE ASSETS, net

     2,359        2,647   
                

Total assets

   $ 19,927      $ 18,770   
                

LIABILITIES AND SHAREHOLDERS’ EQUITY

    

CURRENT LIABILITIES

    

Accounts payable

   $ 2,600      $ 2,229   

Deferred revenue

     8,014        7,790   

Deferred tax liability

     693        445   

Bank line of credit

     —          —     

Current portion of notes payable

     456        505   

Subordinated notes payable to shareholders

     58        1,750   
                

Total current liabilities

     11,821        12,719   

LONG-TERM DEFERRED TAX LIABILITY, net

     226        144   

NOTES PAYABLE, less current portion

     618        —     

SUBORDINATED NOTES PAYABLE TO SHAREHOLDERS, less current portion

     783        —     
                

Total liabilities

     13,448        12,863   
                

COMMITMENTS AND CONTINGENCIES

    

SHAREHOLDERS’ EQUITY

    

Preferred stock - $0.001 par value; 15,000 shares authorized; 6,740 shares issued and outstanding

     7        7   

Common stock - $0.001 par value; 40,000 shares authorized; 6,558 and 6,448 shares issued and outstanding, respectively

     7        6   

Additional paid-in capital

     9,249        9,075   

Accumulated deficit

     (2,700     (3,153

Unearned stock compensation

     (84     (28
                

Total shareholders’ equity

     6,479        5,907   
                

Total liabilities and shareholders’ equity

   $ 19,927      $ 18,770   
                

 

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COMPUTER SOFTWARE INNOVATIONS, INC.

CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY

 

(Amounts in Thousands)    Common
Stock
     Preferred
Stock
     Additional
Paid-In
Capital
    Accumulated
Deficit
    Unearned
Stock
Compensation
    Total  

Balances at December 31, 2008

   $ 6       $ 7       $ 8,884      $ (3,443   $ (55   $ 5,399   
                                                  

Issuance of common stock

     —           —           46        —          —          46   

Issuance of stock options

     —           —           51        —          (51     —     

Issuance of warrants, DC Consulting

     —           —           94        —          —          94   

Stock based compensation

     —           —           —          —          78        78   

Net income for the year ended December 31, 2009

     —           —           —          290        —          290   
                                                  

Balances at December 31, 2009

   $ 6       $ 7       $ 9,075      $ (3,153   $ (28   $ 5,907   
                                                  

Issuance of common stocks

     1         —           52        —          —          53   

Issuance of stock options

     —           —           129        —          (129     —     

Exercise of stock options

     —           —           5        —          —          5   

Forfeiture of stock options

     —           —           (12     —          12        —     

Stock based compensation

     —           —           —          —          61        61   

Net income for the year ended December 31, 2010

     —           —           —          453        —          453   
                                                  

Balances at December 31, 2010

   $ 7       $ 7       $ 9,249      $ (2,700   $ (84   $ 6,479   
                                                  

 

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COMPUTER SOFTWARE INNOVATIONS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

 

(Amounts in thousands)    For the years ended December 31,  
     2010     2009  

OPERATING ACTIVITIES

    

Net income

   $ 453      $ 290   

Adjustments to reconcile net income to net cash provided by operating activities

    

Depreciation and amortization

     2,341        2,419   

Stock compensation expense

     113        218   

Deferred income tax expense (benefit)

     330        (161

Loss on disposal of property and equipment

     8        4   

Changes in deferred and accrued amounts net of effects from payments for acquisitions

    

Accounts receivable

     (1,094     6,275   

Inventories

     2,070        (1,076

Prepaid expenses and other assets

     (19     (42

Accounts payable

     371        (1,415

Deferred revenue

     224        1,094   

Income tax receivable

     (252     191   
                

Net cash provided by operating activities

     4,545        7,797   
                

INVESTING ACTIVITIES

    

Purchases of property and equipment

     (854     (350

Proceeds from disposal of property and equipment

     —          —     

Capitalization of computer software

     (1,779     (1,124

Investment in other intangible assets

     —          (32
                

Net cash used for investing activities

     (2,633     (1,506
                

FINANCING ACTIVITIES

    

Net repayments under line of credit

     —          (5,634

Borrowings under notes payable

     1,000        —     

Repayments of notes payable

     (1,339     (657

Proceeds from exercise of stock options

     5        —     
                

Net cash used for financing activities

     (334     (6,291
                

Net change in cash and cash equivalents

     1,578        —     

CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR

     —          —     
                

CASH AND CASH EQUIVALENTS, END OF YEAR

   $ 1,578      $ —     
                

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:

    

Cash paid during the year for:

    

Interest

   $ 243      $ 488   

Income taxes

   $ 354      $ 311   

 

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Non-GAAP Financial Measure: Explanation and Reconciliation of EBITDA and Adjusted EBITDA

EBITDA is a non-GAAP financial measure used by management, lenders and certain investors as a supplemental measure in the evaluation of some aspects of a corporation’s financial position and core operating performance. Investors sometimes use EBITDA as it allows for some level of comparability of profitability trends between those businesses differing as to capital structure and capital intensity by removing the impacts of depreciation and amortization. EBITDA also does not include changes in major working capital items such as receivables, inventory and payables, which can also indicate a significant need for, or source of, cash. Since decisions regarding capital investment and financing and changes in working capital components can have a significant impact on cash flow, EBITDA is not a good indicator of a business’s cash flows. We use EBITDA for evaluating the relative underlying performance of the Company’s core operations and for planning purposes, including a review of this indicator and discussion of potential targets in the preparation of annual operating budgets. We calculate EBITDA by adjusting net income or loss to exclude net interest expense, income tax expense or benefit, depreciation and amortization, thus the term “Earnings Before Interest, Taxes, Depreciation and Amortization” and the acronym “EBITDA.”

EBITDA is presented as additional information because management believes it to be a useful supplemental analytic measure of financial performance of our core business, and as it is frequently requested by sophisticated investors. However, management recognizes it is no substitute for GAAP measures and should not be relied upon as an indicator of financial performance separate from GAAP measures (as discussed further below).

“Adjusted EBITDA or “Financing EBITDA” is a non-GAAP financial measure used in our calculation and determination of compliance with debt covenants related to our bank credit facilities. Adjusted EBITDA is also used as a representation as to how EBITDA might be adjusted by potential lenders for financing decisions and our ability to service debt. However, such decisions would not exclude those other items impacting cash flow which are excluded from EBITDA, as noted above. Adjusted EBITDA is defined as net income or loss adjusted for net interest expense, income tax expense or benefit, depreciation, amortization, and also certain additional items allowed to be excluded from our debt covenant calculation including other non-cash items such as operating non-cash compensation expense (such as stock-based compensation), and the Company’s initial reorganization or restructuring related costs, unrealized gain or loss on financial instrument (non-cash related) and gain or loss on the disposal of fixed assets. While we evaluate the Company’s performance against debt covenants on this basis, investors should not presume the excluded items to be one-time costs. If the Company were to enter into additional capital transactions, for example, in connection with a significant acquisition or merger, similar costs could reoccur. In addition, the ongoing impact of those costs would be considered in, and potential financings based on, projections of future operating performance which would include the impact of financing such costs.

We believe the presentation of Adjusted EBITDA is important as an indicator of our ability to obtain additional financing for the business, not only for working capital purposes, but particularly as acquisitions are anticipated as a part of our growth strategy. Accordingly, a significant part of our success may rely on our ability to finance acquisitions.

When evaluating EBITDA and Adjusted EBITDA, investors should consider, among other things, increasing and decreasing trends in both measures and how they compare to levels of debt and interest expense, ongoing investing activities, other financing activities and changes in working capital needs. Moreover, these measures should not be construed as alternatives to net income (as an indicator of operating performance) or cash flows (as a measure of liquidity) as determined in accordance with GAAP.

While some investors use EBITDA to compare between companies with different investment and capital structures, all companies do not calculate EBITDA or Adjusted EBITDA in the same manner. Accordingly, the EBITDA and Adjusted EBITDA measures presented below may not be comparable to similarly titled measures of other companies.

 

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A reconciliation of Net Income reported under GAAP to EBITDA and Adjusted EBITDA is provided below:

 

     Quarter Ended December 31,     Year Ended December 31,  
     2010     2009     2010      2009  

Reconciliation of net income per GAAP to EBITDA and Adjusted EBITDA:

         

Net (loss) income per GAAP

   $ (62   $ (5   $ 453       $ 290   

Adjustments:

         

Income tax (benefit) expense

     (10     (4     433         354   

Interest expense, net

     30        86        231         388   

Depreciation and amortization of property, equipment, and intangible assets (excluding software development costs)

     198        216        833         867   

Amortization of software development costs

     423        419        1,508         1,552   
                                 

EBITDA

     579        712        3,458         3,451   
                                 

Adjustments to EBITDA to exclude those items excluded in loan covenant calculations:

         

Stock based compensation (non-cash portion)

     (1     28        48         165   
                                 

Adjusted EBITDA

   $ 578      $ 740      $ 3,506       $ 3,616   
                                 

Forward-Looking and Cautionary Statements

This release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Among other things, these statements relate to our financial condition, results of operations and future business plans, operations, opportunities and prospects. In addition, we and our representatives may from time to time make written or oral forward-looking statements, including statements contained in filings with the Securities and Exchange Commission and in our reports to stockholders. These forward-looking statements are generally identified by the words or phrases “may,” “could,” “should,” “expect,” “anticipate,” “plan,” “believe,” “seek,” “estimate,” “predict,” “project” or words of similar import. These forward-looking statements are based upon our current knowledge and assumptions about future events and involve risks and uncertainties that could cause our actual results, performance or achievements to be materially different from any anticipated results, prospects, performance or achievements expressed or implied by such forward-looking statements. These forward-looking statements are not guarantees of future performance. Many factors are beyond our ability to control or predict. You are accordingly cautioned not to place undue reliance on such forward-looking statements, which speak only as of the date that we make them. We do not undertake to update any forward-looking statement that may be made from time to time by or on our behalf.

In our most recent Form 10-K, we have included risk factors and uncertainties that might cause differences between anticipated and actual future results. We have attempted to identify, in context, some of the factors that we currently believe may cause actual future experience and results to differ from our current expectations regarding the relevant matter or subject area. The operations and results of our software and systems integration businesses also may be subject to the effects of other risks and uncertainties, including, but not limited to:

 

   

a reduction in anticipated sales;

 

   

an inability to perform customer contracts at anticipated cost levels;

 

   

our ability to otherwise meet the operating goals established by our business plan;

 

   

market acceptance of our new software, technology and services offerings;

 

   

an economic downturn; and

 

   

changes in the competitive marketplace and/or customer requirements.

Contacts:

Company Contact: David Dechant

Computer Software Innovations, Inc.

(864) 855-3900

ddechant@csioutfitters.com

 

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