EX-99.1 2 c08501exv99w1.htm EXHIBIT 99.1 Exhibit 99.1
Exhibit 99.1
(GTSI LOGO)
GTSI Delivers Strong Third Quarter
Sales up 13%, Operating Expenses down 14%, Net Income up 55%
HERNDON, VA., November 15, 2010 — GTSI Corp. (NASDAQ: GTSI) a systems integrator, solutions and services provider to the U.S. Federal, state and local governments, today released financial and operational results for the third quarter of 2010.
“The team delivered an outstanding quarter. Revenue, on a year-over-year basis, was up in all sales categories, gross margin was up, operating expenses were down, income from operations was up, with net income up and earnings per share up sharply for the quarter,” said Sandra Gillespie, GTSI’s Acting Co-Chief Executive Officer. “The third quarter started out strong and continued to build as we focused on the end of the Federal government fiscal year on September 30th. With a concerted effort by our sales group and the entire GTSI team, we identified opportunities, developed strategies for overcoming obstacles and delivered solid financial results.”
Third Quarter 2010 Update:
  •   Sales were $237.4 million, a $27.7 million (13.2%) increase over sales of $209.7 million in the third quarter of 2009. All three revenue categories — product, services and financing — were up year over year.
 
  •   Gross margin was $29.8 million a $0.9 million (3.0%) increase over gross margin of $28.9 million for the third quarter of 2009
 
  •   Operating expenses were $20.6 million down $3.2 million (13.6%) from $23.8 million in the third quarter of 2009, mainly due to lower personnel related costs.
 
  •   Income from operations was $9.2 million a $4.1 million ( 81.1%) increase over income from operations of $5.1 million in the third quarter of 2009
 
  •   Income from our investment in EyakTek was $2.2 million a $0.2 million (7.4%) increase over $2.0 million in the third quarter of 2009
 
  •   Net income was $5.9 million a $2.1 million (55.3%) improvement, or $0.62 earnings per diluted share, over net income of $3.8 million, or $0.39 earnings per diluted share, in the third quarter of 2009.
“When we started the third quarter our results from the first half of the year were below expectations,” said Gillespie. “We made significant progress in closing the gap. Despite the recent SBA activities that prohibit small business relationships, we have not lost focus on our customers’ needs for GTSI’s developed and delivered solutions and services.”
Financial Update
“We ended the quarter with $17.3 million in cash on the balance sheet, as well as strong accounts receivable,” said Peter Whitfield, Chief Financial Officer and Acting Co-Chief Executive Officer for GTSI. “Inventory levels were down slightly year-over-year, while book value improved to $10.09 in the third quarter of 2010 versus $9.17 in the third quarter of 2009. Subsequent to the end of the third quarter, we entered into a modification of our credit facility to reduce the size from $135 million to $100 million. ”

 

 

 

Small Business Administration (SBA) update
As required by the Administrative Agreement between GTSI and the SBA the company has established an internal ethics officer that reports directly to the Chairman of our Board’s Audit Committee and the company and the SBA have agreed on a seasoned government contracting examination firm to serve as the monitor required by the SBA agreement.
Conference Call
An investor conference call to discuss results for the quarter ended September 30, 2010 is scheduled for 10:00 a.m. Eastern Time November 15, 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 November 15, 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 pm Eastern Time, November 30, 2010. To access the replay, please dial 877-919-4059 or 334-323-7226, pass code 62962420.
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 Condensed Consolidated Statements of Operations
(In thousands, except per share data)
                                 
    Three Months Ended        
    September 30,     2010 vs 2009  
    2010     2009     Variance     Percentage  
SALES
                                
Product
     208,797       189,234     $ 19,563       10.3 %
Service
     15,907       13,985       1,922       13.7 %
Financing
     12,663       6,465       6,198       95.9 %
 
                        
 
     237,367       209,684       27,683       13.2 %
 
                        
COST OF SALES
                                
Product
     189,092       169,550     $ (19,542 )     -11.5 %
Service
     10,968       8,745       (2,223 )     -25.4 %
Financing
     7,519       2,475       (5,044 )     -203.8 %
 
                        
 
     207,579       180,770       (26,809 )     -14.8 %
 
                        
GROSS MARGIN
     29,788       28,914       874       3.0 %
SELLING, GENERAL & ADMINISTRATIVE EXPENSES
     20,592       23,836       3,244       13.6 %
 
                        
INCOME FROM OPERATIONS
     9,196       5,078       4,118       81.1 %
INTEREST AND OTHER INCOME, NET
     2,067       1,979       88       4.4 %
 
                        
INCOME BEFORE TAXES
     11,263       7,057       4,206       59.6 %
INCOME EXPENSE
     (5,329 )     (3,236 )     (2,093 )     -64.7 %
 
                        
NET INCOME
   $ 5,934     $ 3,821     $ 2,113       55.3 %
 
                        
EARNINGS PER SHARE
                                
Basic
   $ 0.62     $ 0.40     $ 0.22       55.0 %
 
                        
Diluted
   $ 0.62     $ 0.39     $ 0.23       59.0 %
 
                        
WEIGHTED AVERAGE SHARES OUTSTANDING
                                
Basic
     9,603       9,651       (48 )     0.5 %
 
                        
Diluted
     9,629       9,787       (158 )     1.6 %
 
                        

 

 

 

GTSI Corp. Unaudited Condensed Consolidated Statements of Operations
(In thousands, except per share data)
                                 
    Nine Months Ended        
    September 30,     2010 vs 2009  
    2010     2009     Variance     Percentage  
SALES
                                
Product
   $ 418,456       466,822     $ (48,366 )     -10.4 %
Service
     38,581       40,835       (2,254 )     -5.5 %
Financing
     17,191       10,700       6,491       60.7 %
 
                        
 
     474,228       518,357       (44,129 )     -8.5 %
 
                        
COST OF SALES
                                
Product
     378,833       421,566     $ 42,733       10.1 %
Service
     25,571       25,669       98       0.4 %
Financing
     9,068       3,525       (5,543 )     -157.2 %
 
                        
 
     413,472       450,760       37,288       8.3 %
 
                        
GROSS MARGIN
     60,756       67,597       (6,841 )     -10.1 %
SELLING, GENERAL & ADMINISTRATIVE EXPENSES
     64,452       71,128       6,676       9.4 %
 
                        
LOSS FROM OPERATIONS
     (3,696 )     (3,531 )     (165 )     -4.7 %
INTEREST AND OTHER INCOME, NET
     5,644       3,251       2,393       73.6 %
 
                        
INCOME (LOSS) BEFORE TAXES
     1,948       (280 )     2,228       795.7 %
INCOME TAX EXPENSE
     (1,838 )     (89 )     (1,749 )     -1965.2 %
 
                        
NET INCOME (LOSS)
   $ 110     $ (369 )   $ 479       129.8 %
 
                        
EARNINGS (LOSS) PER SHARE
                                
Basic
   $ 0.01     $ (0.04 )   $ 0.05       125.0 %
 
                        
Diluted
   $ 0.01     $ (0.04 )   $ 0.05       125.0 %
 
                        
WEIGHTED AVERAGE SHARES OUTSTANDING
                                
Basic
     9,604       9,737       (133 )     1.4 %
 
                        
Diluted
     9,653       9,737       (84 )     0.9 %
 
                        

 

 

 

GTSI Corp. Unaudited Condensed Consolidated Balance Sheets
(In thousands)
                                 
                    Change from December 31,  
    September 30,     December 31,     2009  
    2010     2009     Variance     Percentage  
ASSETS
                                
Current assets:
                                
Cash and cash equivalents
   $ 17,286     $ 7,894     $ 9,392       119.0 %
Accounts receivable, net
     195,843       209,595       (13,752 )     -6.6 %
Inventory
     19,202       13,477       5,725       42.5 %
Deferred costs
     3,270       1,807       1,463       81.0 %
Other current assets
     2,433       4,140       (1,707 )     -41.2 %
 
                        
Total current assets
     238,034       236,913       1,121       0.5 %
Depreciable assets, net
     8,381       10,960       (2,579 )     -23.5 %
Long-term receivables and other assets
     38,734       40,758       (2,024 )     -5.0 %
 
                        
 
                                
TOTAL ASSETS
   $ 285,149     $ 288,631     $ (3,482 )     -1.2 %
 
                        
 
                                
LIABILITIES AND STOCKHOLDERS’ EQUITY
                                
Current liabilities:
                                
Accounts payable
   $ 88,053     $ 109,723     $ 21,670       19.7 %
Accounts payable — floor plan
     54,694       34,889       (19,805 )     -56.8 %
Financed lease debt, current portion
     85       831       746       89.8 %
Accrued liabilities
     23,547       26,127       2,580       9.9 %
Deferred revenue
     3,252       3,176       (76 )     -2.4 %
 
                        
Total current liabilities
     169,631       174,746       5,115       2.9 %
Other liabilities
     18,543       17,598       (945 )     -5.4 %
 
                        
Total liabilities
     188,174       192,344       4,170       2.2 %
Total stockholder’s equity
     96,975       96,287       (688 )     -0.7 %
 
                        
 
                                
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
   $ 285,149     $ 288,631     $ 3,482       1.2 %