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8-K - FORM 8-K - GTSI CORP | c21451e8vk.htm |
Exhibit 99.1
GTSI Reports Second Quarter Results
GTSI Operations reduces loss for quarter 18.5%
GTSI Operations reduces loss for quarter 18.5%
HERNDON, VA., August 15, 2011 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 and six months ended June 30, 2011.
For the second quarter and first half of 2011, we have significantly improved results from GTSI
Operations compared to the second quarter and first half of 2010. We are working to improve the
results of GTSI Operations by focusing on higher gross margin business and reducing the cost of
operations. said Sterling Phillips, GTSIs Chief Executive Officer and President. Second quarter
results show an 18.5% reduction in loss from GTSI
Operations compared to second quarter of 2010 and 31.2% reduction in loss for the first half of
2011 compared to the same period in 2010. While GTSI Operations is a non GAAP metric we believe
it is a useful measure of the Companys performance. It allows investors to distinguish the
operating performance of the Companys organic business compared to the contribution from its
investment in Eyak Technology LLC.
Reported Results
For the second quarter of 2011, GTSI reported revenue of $81.3 million compared to $135.0 million
for the second quarter of 2010, a revenue decline of 39.8%. Gross margin for the second quarter of
2011 decreased to $14.2 million from $17.4 million, a reduction of 18.9%, from the same period in
2010. Gross Margin percent for the second quarter was 17.4% compared to 12.9% for the same quarter
last year. Operating expenses declined $4.0 million or 18.5% to $17.6 million compared to $21.6
million for the second quarter of 2010. This reduction of operating expenses is due primarily to
the Companys ongoing strategic cost reduction actions first initiated in 2010. The loss from GTSI
Operations declined $0.8 million or 18.5% for the quarter compared to the loss for the second
quarter of 2010. Earnings from our investment in Eyak Technology LLC. declined $1.1 million or
46.2% to $1.3 million compared to $2.4 million for the second quarter of 2010. The total net loss
for the second quarter of 2011 was $1.5 million, compared to a net loss of $1.2 million for the
same period in 2010. Diluted loss per share from GTSI Operations for the second quarter declined
17.6% or $0.05 per share compared to a $0.28 per share loss for the second quarter of 2010. Diluted
earnings per share from our investment in Eyak Technology LLC. declined $0.07 or 44.6% per share.
Our total loss per share declined $0.02 per share or 16.8% compared to the same quarter last year.
For the six months ended June 30, 2011, GTSI reported revenue of $151.6 million compared to $236.9
million for the same period in 2010, a decline of 36.0%. Gross margin for the six months ended June
30, 2011 decreased $3.9 million to $27.1 million, or 12.3% when compared to the first six months of
2010. Gross Margin percent for this period is 17.9% compared to 13.1% for the same period last
year. Operating expenses declined $7.9 million or 18.0% to $36.0 million compared to $43.9 million
for the first two quarters of 2010. The loss from GTSI Operations declined for the six months ended
June 30, 2011 by $4.1 million or 31.2% compared to the first six months of 2010. Earnings from our
investment in Eyak Technology LLC. declined $1.5 million or 38.1% to $2.4 million for the first
half of 2011 compared to $3.9 million for the same period in 2010. Our total net loss for the six
months ended June 30, 2011 was $4.1 million, compared to a net loss of $5.8 million for the same
period in 2010. Compared to the first six months of 2010 the diluted loss per share from GTSI
Operations declined by 32.0% or $0.27 per share for
the first two quarters of 2011. The diluted
earnings per share from our investment in Eyak Technology LLC. declined $0.10 or 39.1% per share
compared to the same six month period of 2010. Our total loss per share for the first two quarters
of 2011 declined by $0.18 per share or 29.4% compared to the six months ended June 30, 2010.
GTSI ended the quarter with $45.9 million in cash on hand. The Company had no long-term debt and
no borrowings under its credit facility. As of June 30, 2011, GTSI had stockholders equity of
$92.1 million or $9.52 per outstanding share.
Conference Call
An investor conference call to discuss second quarter results is scheduled for 11:00 a.m. Eastern
Time August 17, 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 GTSIs Investor
Relations page (www.gtsi.com/ir). Webcast will be available for replay through October 16, 2011.
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, October 16, 2011. To access the replay, please
dial 877-919-4059 or 334-323-7226, pass code 54488325.
About GTSI Corp.
GTSI (NASDAQ: GTSI) is a leading provider of technology solutions 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, more than 740 industry certifications, and customer service to guide agencies in
selecting the most cost-effective technology available. GTSI has extensive capabilities and past
performance in data center, networking, collaboration, security, and cloud computing solutions. In
addition, GTSIs 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, Virginia., GTSI has approximately
400 employees and reported revenue of $666.7 million for the 12 months ended December 31, 2010. For
more information visit the companys website at www.gtsi.com.
Use of Non-GAAP Financial Measures
This press release and the related conference call described above contain certain non-GAAP
financial measures, including non-GAAP net loss before income taxes from GTSI Operations, non-GAAP
net loss from GTSI Operations, and non-GAAP diluted net loss per share from GTSI Operations. The
Company defines non-GAAP net loss before income taxes from GTSI Operations as GAAP net loss before
income tax benefit and equity income from affiliates. Non-GAAP net loss from GTSI Operations is
defined as GAAP net loss before equity income from affiliates less adjusted income tax benefit.
Non-GAAP diluted loss per share from GTSI Operations is defined as non-GAAP net loss from GTSI
Operations divided by weighted average shares outstanding.
The Company believes that it is appropriate to exclude the equity income from affiliates and the
associated tax impact because these measures provide meaningful information to investors and
management in their assessment of the Companys operating performance and ongoing operations.
The Company believes that by reporting these measures, it provides insight and consistency in its
financial reporting and presents a basis for comparison of its business operations between current,
past and future periods. In addition, the measures provide a basis for the Company to compare its
financial results to those of other comparable publicly traded companies and are used by its
management team to plan and forecast its business.
Non-GAAP financial measures should not be considered as a substitute for, or superior to, measures
of financial performance which are prepared in accordance with U.S. GAAP and may be different from
non-GAAP financial measures used by other companies. Investors are encouraged to review the
reconciliation of our GAAP to non-GAAP measures, which are set forth below.
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 Companys most recent annual report on Form 10K 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:
Peter Whitfield
Senior Vice President & Chief Financial Officer
703.502.2954
peter.whitfield@gtsi.com
Peter Whitfield
Senior Vice President & Chief Financial Officer
703.502.2954
peter.whitfield@gtsi.com
GTSI Corp. Unaudited Condensed Consolidated Statements of Operations
(In thousands, except per share data)
(In thousands, except per share data)
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
SALES |
||||||||||||||||
Product |
$ | 66,428 | $ | 120,944 | $ | 124,966 | $ | 209,659 | ||||||||
Service |
10,436 | 11,958 | 18,323 | 22,674 | ||||||||||||
Financing |
4,419 | 2,145 | 8,329 | 4,528 | ||||||||||||
81,283 | 135,047 | 151,618 | 236,861 | |||||||||||||
COST OF SALES |
||||||||||||||||
Product |
58,743 | 109,287 | 108,711 | 189,740 | ||||||||||||
Service |
6,683 | 7,623 | 12,656 | 14,603 | ||||||||||||
Financing |
1,701 | 688 | 3,106 | 1,550 | ||||||||||||
67,127 | 117,598 | 124,473 | 205,893 | |||||||||||||
GROSS MARGIN |
14,156 | 17,449 | 27,145 | 30,968 | ||||||||||||
SELLING, GENERAL &
ADMINISTRATIVE EXPENSES |
17,675 | 21,646 | 35,970 | 43,860 | ||||||||||||
LOSS FROM OPERATIONS |
(3,519 | ) | (4,197 | ) | (8,825 | ) | (12,892 | ) | ||||||||
INTEREST AND OTHER INCOME, NET |
||||||||||||||||
Interest and other income (expense) |
34 | (81 | ) | 64 | 74 | |||||||||||
Equity income from affiliates |
1,283 | 2,386 | 2,387 | 3,859 | ||||||||||||
Interest expense |
(146 | ) | (178 | ) | (296 | ) | (357 | ) | ||||||||
Interest and other income, net |
1,171 | 2,127 | 2,155 | 3,576 | ||||||||||||
LOSS BEFORE INCOME TAXES |
(2,348 | ) | (2,070 | ) | (6,670 | ) | (9,316 | ) | ||||||||
INCOME TAX BENEFIT |
(895 | ) | (834 | ) | (2,544 | ) | (3,492 | ) | ||||||||
NET LOSS |
$ | (1,453 | ) | $ | (1,236 | ) | $ | (4,126 | ) | $ | (5,824 | ) | ||||
LOSS PER SHARE |
||||||||||||||||
Basic |
$ | (0.15 | ) | $ | (0.13 | ) | $ | (0.43 | ) | $ | (0.61 | ) | ||||
Diluted |
$ | (0.15 | ) | $ | (0.13 | ) | $ | (0.43 | ) | $ | (0.61 | ) | ||||
WEIGHTED AVERAGE SHARES OUTSTANDING |
||||||||||||||||
Basic |
9,655 | 9,593 | 9,643 | 9,605 | ||||||||||||
Diluted |
9,655 | 9,593 | 9,643 | 9,605 | ||||||||||||
GTSI Corp. Unaudited Condensed Consolidated Balance Sheets
(In thousands)
(In thousands)
June 30, | December 31, | |||||||
2011 | 2010 | |||||||
ASSETS |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ | 45,935 | $ | 4,049 | ||||
Accounts receivable, net |
85,823 | 154,891 | ||||||
Inventory |
8,310 | 13,708 | ||||||
Deferred costs |
2,719 | 6,991 | ||||||
Other current assets |
5,004 | 2,462 | ||||||
Total current assets |
147,791 | 182,101 | ||||||
Depreciable assets, net |
5,833 | 7,452 | ||||||
Long-term receivables and other assets |
16,601 | 14,291 | ||||||
TOTAL ASSETS |
$ | 170,225 | $ | 203,844 | ||||
LIABILITIES AND STOCKHOLDERS EQUITY |
||||||||
Current liabilities: |
||||||||
Accounts payable |
$ | 40,400 | $ | 50,870 | ||||
Accounts payable floor plan |
21,362 | 35,172 | ||||||
Accrued liabilities |
9,008 | 14,887 | ||||||
Deferred revenue |
4,222 | 3,661 | ||||||
Total current liabilities |
74,992 | 104,590 | ||||||
Other liabilities |
3,109 | 3,044 | ||||||
Total liabilities |
78,101 | 107,634 | ||||||
Total stockholders equity |
92,124 | 96,210 | ||||||
TOTAL LIABILITIES AND STOCKHOLDERS EQUITY |
$ | 170,225 | $ | 203,844 | ||||
GTSI CORP.
RECONCILIATION OF GAAP NET LOSS TO NON-GAAP NET LOSS FROM GTSI OPERATIONS
(in thousands, except per share data)
(unaudited)
RECONCILIATION OF GAAP NET LOSS TO NON-GAAP NET LOSS FROM GTSI OPERATIONS
(in thousands, except per share data)
(unaudited)
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
Net Loss (GAAP Basis) |
(1,453 | ) | (1,236 | ) | (4,126 | ) | (5,824 | ) | ||||||||
Income Tax Benefit |
895 | 834 | 2,544 | 3,492 | ||||||||||||
Net Loss Before Income Tax Benefit (GAAP Basis) |
(2,348 | ) | (2,069 | ) | (6,671 | ) | (9,316 | ) | ||||||||
Equity Income from Affiliates |
1,283 | 2,386 | 2,387 | 3,859 | ||||||||||||
Non-GAAP Net Loss Before Income Taxes from
GTSI Operations |
(3,631 | ) | (4,456 | ) | (9,058 | ) | (13,174 | ) | ||||||||
Add: Adjusted Income Tax Benefit |
1,386 | 1,748 | 3,459 | 4,969 | ||||||||||||
Non-GAAP Net Loss from GTSI Operations
|
(2,245 | ) | (2,708 | ) | (5,599 | ) | (8,205 | ) | ||||||||
Non GAAP Diluted Loss Per Share from GTSI
Operations |
(0.23 | ) | (0.28 | ) | (0.58 | ) | (0.85 | ) |