EX-99.1 2 c97401exv99w1.htm EXHIBIT 99.1 Exhibit 99.1
Exhibit 99.1
(GTSI CORP. LOGO)
GTSI Produces Solid Fourth Quarter and Year-end Results
GTSI’s Income before taxes in 2009 was $9.7 million, up 60% from 2008
HERNDON, VA., March 5, 2010 — GTSI Corp. (NASDAQ: GTSI), a systems integrator, solutions and services provider to the government, today announced its financial results for the three months and twelve months ended December 31, 2009.
“The strength and resiliency of GTSI was tested in 2009, but we ended with a terrific fourth quarter,” said Scott Friedlander, GTSI’s President and Chief Executive Officer. “Despite the headwinds throughout the year, our team never lost sight of our customers’ objectives. We designed and delivered critical solutions and services to meet our customers’ pressing technology needs.
“In 2009 we saw earnings before taxes interest depreciation and amortization rise to $16.4 million, the highest since 2002 and our income before taxes increase to $9.7 million. One factor that drove these results was that our operating expenses declined to the lowest levels in five years,” said Friedlander.
Fourth Quarter Financial Results
For the three months ended December 31, 2009, GTSI reported sales of $243.5 million, a 7.1% decrease over the same period in 2008 mainly due to declines in product sales. Reported net income was $5.8 million, down 23.1% or $0.60 per diluted share, down 22.1%. Operating expenses were $27.0 million down 2.3%, driven primarily by decreased employee expenses.
Gross margin for the three months ended December 31, 2009 increased to $33.9 million or 6.6% from the same period in 2008, primarily due to increased financial services offerings.
For comparative purposes, it is important to note that during the fourth quarter of 2008 the Company released a tax valuation allowance and posted a net tax benefit of $1.8 million. Equity income from affiliates was $3.3 million for the quarter, an increase of $1 million. For comparative purposes, GTSI’s income before taxes in the fourth quarter of 2009 was $9.9 million up 70.4% from the same period in 2008.
Year-end Financial Results
For the twelve months ended December 31, 2009, GTSI reported sales of $761.9 million, a 7.2% decrease over 2008 and reported net income of $5.5 million $0.56 per diluted share. Operating expenses were $98.1 million down 5.5%.
Gross margin for fiscal 2009 decreased $5.9 million while gross margin percentage increased 20 basis points from fiscal 2008, primarily due to increased in financial services offerings.

 

 


 

For comparative purposes, it is important to note that during 2008 the Company did not record a tax expense. Equity income from affiliates was $8.3 million for 2009, an increase of $3.4 million. For comparative purposes, GTSI’s income before taxes in 2009 was $9.7 million up 60.3% from 2008.
GTSI’s sales during 2009 were 38% from the Department of Defense, 37% from civilian agencies and departments and 25% from prime contractors.
Leading solution offerings for 2009 were virtualization, networking, data center activities, security, both physical and cyber, and IT services management. GTSI’s top technology partners for 2009 included Cisco, Sun, Microsoft, Dell and HP.
Strategy and Expectations
“Two key shifts in the patterns of federal and state government procurement of technology products and services occurred during 2009. First, the federal budget had greater emphasis on domestic civilian expenses, which resulted in a 5% increase in our civilian business,” said Friedlander. “Secondly, we saw a sharp decline in our state and local business as many municipalities struggled with budget shortfalls. Overall, our state and local business unit only makes up 5% of our sales, so we have limited exposure and do not anticipate it coming back in the coming year.
“From a GTSI operating model, we will continue to drive our financing and services because they offer higher margin opportunities. The gross margin for our financing division grew 14.2% year-over-year and we expect this growth to continue. We continue to see challenges in our business model and expect first quarter gross margin to be flat to slightly down as a result of increased pricing pressure on products from recent industry mergers and a significant focus on awarding contracts to smaller sized businesses. We anticipate that our income from operations, excluding income from investments, will grow in 2010 as we continue to shift sales from products to solutions and services and realize cost savings.”
Financial Update
Peter Whitfield, GTSI’s Senior Vice President and Chief Financial Officer, said, “GTSI ended the year in excellent financial condition, with no long-term debt, cash on hand and stockholders’ equity of $96.3 million or $9.86 per diluted share. Also during 2009, we entered into a $135 million credit facility with Castle Pines Capital and since March 2009 we have not been in the line.”
Conference Call
An investor conference call to discuss fourth quarter and full year results is scheduled for 10:00 a.m. Eastern Time March 5, 2010. 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 5, 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, March 15, 2010. To access the replay, please dial 877-919-4059 or 334-323-7226, pass code 91094257.

 

 


 

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 Northern Virginia, outside of Washington, D.C. and was named as one of “Best Places to Work” in 2009. 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,     2009 vs 2008  
    2009     2008     Variance     Percentage  
SALES Product
  $ 211,144     $ 241,170     $ (30,026 )     -12.5 %
Service
    14,790       15,930       (1,140 )     -7.2 %
Financing
    17,579       5,016       12,563       250.5 %
 
                       
 
    243,513       262,116       (18,603 )     -7.1 %
 
                       
COST OF SALES
                               
Product
    189,744       219,779       30,035       13.7 %
Service
    7,567       8,129       562       6.9 %
Financing
    12,347       2,441       (9,906 )     -405.8 %
 
                       
 
    209,658       230,349       20,691       9.0 %
 
                       
GROSS MARGIN
    33,855       31,767       2,088       6.6 %
SELLING, GENERAL & ADMINISTRATIVE EXPENSES
    26,979       27,605       626       2.3 %
 
                       
INCOME FROM OPERATIONS
    6,876       4,162       2,714       65.2 %
INTEREST AND OTHER INCOME, NET
    3,070       1,675       1,395       83.3 %
 
                       
INCOME BEFORE TAXES
    9,946       5,837       4,109       70.4 %
INCOME TAX (PROVISION) BENEFIT
    (4,120 )     1,744       (5,864 )     -336.2 %
 
                       
NET INCOME
  $ 5,826     $ 7,581     $ (1,755 )     -23.1 %
 
                       
EARNINGS PER SHARE
                               
Basic
  $ 0.61     $ 0.77     $ (0.16 )     -20.8 %
 
                       
Diluted
  $ 0.60     $ 0.77     $ (0.17 )     -22.1 %
 
                       
WEIGHTED AVERAGE SHARES OUTSTANDING
                               
Basic
    9,613       9,792       (179 )     -1.8 %
 
                       
Diluted
    9,675       9,857       (182 )     -1.8 %
 
                       

 

 


 

GTSI Corp. Unaudited Consolidated Statements of Operations
(In thousands, except per share data)
                                 
    Twelve Months Ended        
    December 31     2009 vs 2008  
    2009     2008     Variance     Percentage  
SALES
                               
Product
  $ 677,966     $ 745,366     $ (67,400 )     -9.0 %
Service
    55,625       56,529       (904 )     -1.6 %
Financing
    28,279       19,270       9,009       46.8 %
 
                       
 
    761,870       821,165       (59,295 )     -7.2 %
 
                       
COST OF SALES
                               
Product
    611,310       673,858       62,548       9.3 %
Service
    33,236       31,551       (1,685 )     -5.3 %
Financing
    15,872       8,403       (7,469 )     -88.9 %
 
                       
 
    660,418       713,812       53,394       7.5 %
 
                       
GROSS MARGIN
    101,452       107,353       (5,901 )     -5.5 %
SELLING, GENERAL & ADMINISTRATIVE EXPENSES
    98,107       103,848       5,741       5.5 %
 
                       
INCOME FROM OPERATIONS
    3,345       3,505       (160 )     -4.6 %
INTEREST AND OTHER INCOME, NET
    6,320       2,524       3,796       150.4 %
 
                       
INCOME BEFORE TAXES
    9,665       6,029       3,636       60.3 %
INCOME TAX (PROVISION) BENEFIT
    (4,209 )     1,806       (6,015 )     -333.1 %
 
                       
NET INCOME
  $ 5,456     $ 7,835     $ (2,379 )     -30.4 %
 
                       
EARNINGS PER SHARE
                               
Basic
  $ 0.56     $ 0.80     $ (0.24 )     -30.0 %
 
                       
Diluted
  $ 0.56     $ 0.79     $ (0.23 )     -29.1 %
 
                       
WEIGHTED AVERAGE SHARES OUTSTANDING
                               
Basic
    9,706       9,760       (54 )     -0.6 %
 
                       
Diluted
    9,762       9,865       (103 )     -1.0 %
 
                       

 

 


 

GTSI Corp. Unaudited Consolidated Balance Sheet
(In thousands)
                                 
                    Change from  
    December 31,     December 31,     December 31, 2008  
    2009     2008     Variance     Percentage  
ASSETS
                               
Current assets:
                               
Cash and cash equivalents
  $ 7,894     $     $ 7,894       100.0 %
Accounts receivable, net
    209,595       190,740       18,855       9.9 %
Inventory
    13,477       13,491       (14 )     -0.1 %
Deferred costs
    1,807       7,849       (6,042 )     -77.0 %
Other current assets
    4,140       7,807       (3,667 )     -47.0 %
 
                       
Total current assets
    236,913       219,887       17,026       7.7 %
Depreciable assets, net
    10,960       13,664       (2,704 )     -19.8 %
Long-term receivables and other assets
    40,758       14,078       26,680       189.5 %
 
                       
 
                               
TOTAL ASSETS
  $ 288,631     $ 247,629     $ 41,002       16.6 %
 
                       
 
                               
LIABILITIES AND STOCKHOLDERS’ EQUITY
                               
Current liabilities:
                               
Borrowings under credit facility
  $     $ 22,387     $ 22,387       100.0 %
Accounts payable
    109,723       103,553       (6,170 )     -6.0 %
Accounts payable — Floor plan
    34,889             (34,889 )     -100.0 %
Financed lease debt, current portion
    831       6,538       5,707       87.3 %
Accrued liabilities
    26,127       17,857       (8,270 )     -46.3 %
Deferred revenue
    3,176       2,079       (1,097 )     -52.8 %
 
                       
Total current liabilities
    174,746       152,414       (22,332 )     -14.7 %
Long-term financed lease debt
          2,530       2,530       100.0 %
Other liabilities
    17,598       2,571       (15,027 )     -584.5 %
 
                       
Total liabilities
    192,344       157,515       (34,829 )     -22.1 %
Total stockholder’s equity
    96,287       90,114       (6,173 )     -6.9 %
 
                       
 
                               
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
  $ 288,631     $ 247,629     $ (41,002 )     -16.6 %