8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported)    February 23, 2005

GTSI Corp.

(Exact name of registrant as specified in its charter)

Delaware	0-19394	54-1248422
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)
3901 Stonecroft Boulevard, Chantilly Virginia		20151-1010
(Address of principal executive offices)		(Zip Code)
Registrant’s telephone number, including area code     (703) 502-2000
(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o  Soliciting materials pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02Results of Operations and Financial Condition

The information contained in this Item 2.02 of this Current Report is being furnished in accordance with SEC Release Nos. 33-8216 and 34-47583.

The information, including the exhibits attached hereto, in this Current Report is being furnished and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section. The information in this Current Report shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, except as otherwise expressly stated in such filing.

Attached and incorporated herein by reference as Exhibit 99.1 is a copy of a press release of GTSI Corp., dated February 23, 2005, reporting GTSI Corp.’s financial results for the three and 12-month periods ended December 31, 2004 and monthly sales.

Item 9.01Financial Statements and Exhibits

(a) None.

(b) None.

(c) Exhibits.

99.1Press Release issued by GTSI Corp. dated February 23, 2005.

2

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	GTSI Corp.
	By:	/s/ Thomas A. Mutryn
		Thomas A. Mutryn
		Senior Vice President and CFO
Date: February 23, 2005

3

INDEX TO EXHIBITS

Exhibit No.	Description
99.1	Press Release issued by GTSI Corp. dated February 23, 2005.

4

EX-99.1

Exhibit 99.1

GTSI Achieves Record 4^th Quarter and Yearly Sales

Growth Rate Outpaces Federal IT Market Expansion

CHANTILLY, VA. – February 23, 2005 – GTSIÒ Corp. (Nasdaq: GTSI), a leading government information technology solutions aggregator, today announced financial results for the quarter and year ended December 31, 2004, and monthly sales (see attached tables).

Fourth Quarter Financial Results

For the fourth quarter 2004, GTSI reported sales of $327.9 million, a 4.9% increase over the same period a year ago and reported net income of $2.7 million ($0.29 per diluted share).  Operating expenses were $34.1 million up 12.4%, driven primarily by increased employee expenses associated with growth in marketing and sales, expenses associated with the Sarbanes-Oxley (SOX) government mandate and completion of the build-out of an enterprise resource planning (ERP) system.

Gross margin in the fourth quarter of 2004 increased 17.1% from the same period a year ago, primarily due to increased revenue and higher margin percentages.

For comparative purposes, it is important to note that during the fourth quarter of 2003 the company took a one-time special charge of $6.0 million for a write-off associated with the development and implementation of an enterprise resource planning system.  Excluding the one-time special charge in 2003, net income would have been $4.0 million ($0.44 per diluted share).

Year-end Financial Results

For the year, GTSI reported sales of $1,076.1 million, a 12.8% increase over last year and reported net income of $10.3 million ($1.09 per diluted share).  Operating expenses were $110.9 million.  One large one-time factor which helped increase annual net income was a reversal of certain aged accrued liabilities of $10.1 million in the third quarter of 2004.

Crossing the Billion Dollar Threshold

“Throughout the year the men and women of GTSI continually accepted the challenges presented to them, driving the company to new heights.  Our federal government customers are increasingly relying on GTSI to meet their information technology needs as evidenced in our overall annual sales growth rate,” said Dendy Young, Chairman and Chief Executive Officer of GTSI.  “The expectations for 2005 will be even greater for our GTSI team.  We must drive new profitable business with a keen eye on margin expansion as well as top-line growth.  By delivering new solutions and financing options we will help our customers meet the significant pent up demand for IT.”

Due to the significant growth in our leasing operations during the year, the Company has established a lease subsidiary, GTSI Financial Services (GFS).  With increased budget scrutiny, GFS provides a valuable capital funding alternative for customers to undertake new IT initiatives without delaying critical infrastructure investments.  GFS is expected to play an increased role at GTSI in the coming year.

The company’s customer mix in 2004 was 35% Department of Defense, 40% Civilian agencies and departments, 20% prime contractors, and 5% state and local government business.

Leading revenue-generating offerings for the year were mobile and desktop computers, enterprise computers, software, networking, services and enterprise storage.  GTSI’s top revenue generating partners for 2004 included Panasonic, HP, Sun, Cisco, and Microsoft.

Government Marketplace Update

“For the first time in many years, the calendar year begins with full funding of all federal agencies,” said Mr. Young.  “We feel that GTSI can continue to significantly outpace the federal IT market growth rate by capturing new market share.  In nearly every discussion with our customers the one overwhelming concern they all have is maintaining and building IT infrastructure.”

The Bush Administration continues to make IT investments a priority.  In its recently released IT budget for FY 2006 beginning in October 2005, the Administration is requesting a 7.1% spending increase.  IT for the Department of Defense is expected to grow 4.9% and civilian agencies 9.0%. The rise in civilian agencies’ budgets is concentrated at the Department of Homeland Security, Department of Justice, and the Department of Veterans Affairs.

According to a recent study by INPUT, a government market intelligence firm, 45% of the federal governments’ IT workforce will be 50 years or older in FY 2008.  As more of these workers retire, the government will increasingly rely on solutions providers to help bridge the gap between retirees and the need to continue to support essential IT programs.  Because of this factor, GTSI’s services division will continue to work with the customer sales teams to seek out new opportunities related to product offerings.

Operations and Financial Update

As was announced in July 2004, GTSI has initiated a strategic growth plan designed to double revenue, increase margin, and improve productivity.  GTSI made significant progress in the second half of 2004, growing its sales organization, introducing new processes to improve pricing and margin, and initiating activities to increase productivity.

Tom Mutryn, GTSI’s Senior Vice President and Chief Financial Officer, commented, “GTSI ended the year in excellent financial condition, with no long-term debt and record stockholders’ equity of $92.1 million ($9.81 per share).  Expenses associated with compliance for SOX 404 and our new ERP system resulted in a significant drain on resources.  Direct expenses in 2004 associated with SOX 404 compliance totaled approximately $2 million, while the company spent close to an equal sum on our ERP system.  And these do not include the opportunity costs of our people working on these activities.”

In the fourth quarter, the company completed virtually all of the build-out of its ERP system.  Significant testing, documentation and training are currently underway, and the company anticipates going live in the second quarter of 2005.  The system is expected to provide improved management information and facilitate efforts to realize better operating efficiencies.

December 2004 and January 2005 Monthly Sales

Sales for December 2004 were $127 million, representing a 25.2% increase of average daily sales from December 2003 of $106.3 million.  Month-end total backlog for December was $86.8 million or a 15.6% decrease versus $102.8 million for the same period last year while net bookings for December 2004 totaled $61.1 million as compared to $65.1 million for December 2003, a 1.7% decrease.

Sales for January 2005 were $54.8 million, representing a 6.2% decrease of average daily sales from January 2004 of $58.4 million.  Month-end total backlog for January was $83.1 million or a 7.3% decrease versus $89.6 million for the same period last year, while net bookings for January 2005 totaled $51.1 million as compared to $45.2 million for January 2004, a 13.1% increase (see attached table).

Conference Call

An investor conference call to discuss fourth quarter and full year results is scheduled for 11:00 a.m. Eastern Time February 23, 2005.  Interested parties are invited to participate by calling 800-247-9979 or 973-409-9254, no pass code is required.  In addition, you may access the webcast on GTSI’s Investor Relations page (www.gtsi.com/ir).

Webcast will be available for replay through February 23, 2006.  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 EST, February 28, 2005.  To access the replay, please dial 877-519-4471 or 973-341-3080, pass code 5702067.

About GTSI Corp.

GTSI Corp. is an information technology (IT) solutions leader, focusing exclusively on Federal, State, and Local government customers worldwide.  For two decades, GTSI has served those customers by teaming with global IT leaders like Panasonic, Cisco, Sun Microsystems, HP, and Microsoft.  Offering a broad range of products and services, an extensive contract portfolio, and ISO 9001:2000 standard for quality management GTSI uses its Technology Practices to deliver “best of breed” solutions that help government customers do their job more effectively.  GTSI is headquartered in Northern Virginia, outside of Washington, D.C. Further information about the Company is available at GTSI.com/About.

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 revenue, margins, operating results and net income, and the effect of new contracts 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 those listed in the Company’s most recent 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

Area Vice President, Corporate Affairs & Investor Relations

703.502.2540

paul.liberty@gtsi.com

### ### ###

GTSI Corp.

Consolidated Statements of Operations

(in thousands, except per share data)

	Three Months Ended December 31,				Change from 2003
	2004		2003		Actual			Percentage
Sales	$	327,891	$	312,457	$	15,434		4.9	%
Cost of sales	292,228		282,001		10,227			3.6	%
Gross margin	35,663		30,456		5,207			17.1	%
Operating expenses excluding special charge	34,132		24,392		9,740			39.9	%
Special charge	—		5,972		(5,972		)	100.0	%
Operating expenses	34,132		30,364		3,768			12.4	%
Income from operations	1,531		92		1,439			1564.1	%
Interest and other income, net	2,760		515		2,245			435.9	%
Income before income taxes	4,291		607		3,684			606.9	%
Income tax provision	1,546		284		1,262			444.4	%
Net income	$	2,745	$	323	$	2,422		749.8	%
Basic net income per share	$	0.31	$	0.04	$	0.27		675.0	%
Diluted net income per share	$	0.29	$	0.04	$	0.25		625.0	%
Weighted average shares outstanding:
Basic	8,881		8,343		538			6.4	%
Diluted	9,451		9,208		243			2.6	%

	Years Ended December 31,						Change from 2003
	2004			2003			Actual			Percentage
Sales	$	1,076,148		$	954,118		$	122,030		12.8	%
Cost of sales	954,143			857,334			96,809			11.3	%
Gross margin	122,005			96,784			25,221			26.1	%
Operating expenses excluding special charge	110,855			88,347			22,508			25.5	%
Special charge	—			5,972			(5,972		)	100.0	%
Operating expenses	110,855			94,319			16,536			17.5	%
Income from operations	11,150			2,465			8,685			352.3	%
Interest and other income, net	5,569			2,832			2,737			96.6	%
Income before income taxes	16,719			5,297			11,422			215.6	%
Income tax provision	6,455			2,118			4,337			204.8	%
Net income	$		10,264	$		3,179	$	7,085		222.9	%
Basic net income per share	$		1.18	$		0.38	$	0.80		210.5	%
Diluted net income per share	$		1.09	$		0.35	$	0.74		211.4	%
Weighted average shares outstanding:
Basic	8,664			8,349			315			3.8	%
Diluted	9,388			9,116			272			3.0	%

GTSI Corp.

Condensed Consolidated Balance Sheets

(in thousands)

	December 31,		December 31,		Change from December 31, 2003
	2004		2003		Actual			Percentage
ASSETS
Current assets:
Cash	$	397	$	177	$	220		124.3	%
Accounts receivable, net	210,606		181,988		28,618			15.7	%
Merchandise inventories	59,184		55,987		3,197			5.7	%
Other current assets	9,616		15,490		(5,874		)	-37.9	%
Total current assets	279,803		253,642		26,161			10.3	%
Property and equipment, net	15,183		10,670		4,513			42.3	%
Other assets	1,400		4,449		(3,049		)	-68.5	%
TOTAL ASSETS	$	296,386	$	268,761	$	27,625		10.3	%
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Notes payable to banks	$	1,179	$	12,813	$	(11,634	)	-90.8	%
Accounts payable	173,218		152,435		20,783			13.6	%
Accrued liabilities	23,950		19,491		4,459			22.9	%
Accrued warranties	2,429		4,555		(2,126		)	-46.7	%
Total current liabilities	200,776		189,294		11,482			6.1	%
Other liabilities	3,473		1,522		1,951			128.2	%
Total liabilities	204,249		190,816		13,433			7.0	%
Stockholders’ equity	92,137		77,945		14,192			18.2	%
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	296,386	$	268,761	$	27,625		10.3	%

GTSI Corp.

	Business Days in Month (1)	Sales ($ in Millions)		Year-over-Year Change Average Daily Sales		Month-End Total Backlog ($ in Millions)		Year-over-Year Change		Monthly Bookings ($ in Millions)		Year-over-Year Change Average Daily Bookings
January 2002	22	$	46.8	—		$	72.2	—		$	42.4	—
February 2002	19	50.3		—		99.7		—		77.8		—
March 2002	20	79.6		—		93.5		—		73.4		—
April 2002	22	46.0		—		102.8		—		55.3		—
May 2002	22	61.4		—		115.3		—		73.9		—
June 2002	20	93.6		—		118.4		—		96.7		—
July 2002	22	74.2		—		121.9		—		77.7		—
August 2002	22	82.6		—		131.2		—		91.9		—
September 2002	20	120.0		—		203.6		—		192.4		—
October 2002	23	104.5		—		161.2		—		62.1		—
November 2002	19	94.0		—		106.6		—		39.4		—
December 2002	21	81.7		—		91.3		—		66.4		—
January 2003	22	53.5		14.3	%	92.5		28.1	%	54.7		29.0	%
February 2003	19	55.8		10.9	%	85.1		-14.6	%	48.4		-37.8	%
March 2003	21	69.6		-16.7	%	72.2		-22.8	%	56.7		-26.4	%
April 2003	22	48.3		5.0	%	89.8		-12.7	%	65.9		19.2	%
May 2003	20	60.4		8.2	%	86.8		-24.7	%	57.4		-14.6	%
June 2003	21	81.0		-17.6	%	106.2		-10.3	%	100.4		-1.1	%
July 2003	22	75.5		1.8	%	116.5		-4.4	%	85.8		10.4	%
August 2003	21	65.4		-17.1	%	131.6		0.3	%	80.5		-8.2	%
September 2003	21	132.2		4.9	%	228.3		12.1	%	228.9		13.3	%
October 2003	23	113.0		8.1	%	192.9		19.7	%	77.6		25.0	%
November 2003	18	93.2		4.7	%	144.0		35.1	%	44.3		18.7	%
December 2003	22	106.3		24.2	%	102.8		12.6	%	65.1		-6.4	%
January 2004	21	58.4		14.4	%	89.6		-3.1	%	45.2		-13.4	%
February 2004	19	52.3		-6.3	%	83.1		-2.4	%	45.8		-5.4	%
March 2004	23	67.9		-10.9	%	98.0		35.7	%	82.8		33.3	%
April 2004	22	73.8		52.8	%	123.0		37.0	%	98.8		49.9	%
May 2004	20	72.2		19.5	%	132.9		53.1	%	82.1		43.0	%
June 2004	22	93.0		9.6	%	155.0		46.0	%	115.1		9.4	%
July 2004	21	89.5		24.2	%	173.0		48.5	%	107.5		31.3	%
August 2004	22	84.9		23.9	%	192.8		46.5	%	104.7		24.2	%
September 2004	21	156.2		18.2	%	257.0		12.6	%	220.4		-3.7	%
October 2004	21	107.7		4.4	%	207.8		7.7	%	58.5		-17.4	%
November 2004	20	93.2		-10.0	%	152.7		6.0	%	38.1		-22.6	%
December 2004	21	127.0		25.2	%	86.8		-15.6	%	61.1		-1.7	%
January 2005	21	54.8		-6.2	%	83.1		-7.3	%	51.1		13.1	%

(1) All percentage calculations are based on data per business day calculations