CTG Reports 2000 Financial Results; CTG's Strategic Direction to Focus On Global Practices With Restructured Sales And Delivery Organization.Business Editors BUFFALO Buffalo, city, United States Buffalo, city (1990 pop. 328,123), seat of Erie co., W N.Y., on Lake Erie and the Niagara and Buffalo rivers; inc. 1832. With more than 37 mi (60 km) of waterfront, it is a major commercial and industrial port and railroad hub. , N.Y.--(BUSINESS WIRE)--Feb. 5, 2001 CTG CTG Cartridge CTG Center for Technology in Government (SUNY, Albany, New York) CTG Center for Technology in Government CTG Computer Task Group (IT consulting company; Buffalo, NY, USA) (NYSE NYSE See: New York Stock Exchange :CTG), an international information technology (IT) staffing and solutions company, today announced fourth quarter 2000 revenues of $83.4 million compared with revenues of $115.4 million in the fourth quarter of 1999. Net income for the 2000 fourth quarter was $0.2 million, or $.09 cash earnings per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share and $0.01 per diluted share, compared to $2.2 million, or $.19 cash earnings per diluted share and $0.13 per diluted share, in last year's fourth quarter. For 2000, CTG reported revenues of $345.7 million compared to revenues of $472.0 million in 1999. CTG's net loss for 2000 was $5.7 million, or $.04 cash loss per diluted share and $0.35 loss per diluted share, compared to net income of $16.7 million, or $1.21 cash earnings per diluted share and $1.00 per diluted share in 1999. "CTG's results for the quarter and year are indicative of a very difficult business environment for IT services providers in 2000 as corporate spending for IT significantly lagged recent years," said CTG Chairman, President, and Chief Executive Officer Darrell L. Jennings. "While CTG fared better than some of our competitors in 2000, our financial results this year were well below our own performance targets and historical performance. To better position CTG for renewed growth in revenues and earnings, we have restructured the sales and delivery organizations, including a new leadership team. We are actively hiring top industry sales resources to help drive top line growth. We have eliminated the three brands previously used in the North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. market and now have one focused team going forward. We have also launched a global practices organization to build practices around clear customer value propositions and leverage relationships with third-party partners. These practices will be deployed in Europe and North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. ." Mr. Jennings continued, "CTG will strive to do fewer things better as our new practices are launched this year. We can differentiate based on practice competencies, a large European European emanating from or pertaining to Europe. European bat lyssavirus see lyssavirus. European beech tree fagussylvaticus. European blastomycosis see cryptococcosis. presence, and strong internal processes as evidenced by our ISO (1) See ISO speed. (2) (International Organization for Standardization, Geneva, Switzerland, www.iso.ch) An organization that sets international standards, founded in 1946. The U.S. member body is ANSI. 9001 certification awarded last year. Application Management is one of CTG's first global practices. CTG has been very successful in developing its application management business, so we are concentrating significant energy on continuing to build this business and are currently bidding on a record number of application management proposals. CTG is also a long-time leader in supporting the IT staffing needs of large companies, which gives the company an excellent platform for future growth, and a more consistent revenue base quarter to quarter." During 2000, CTG continued to make investments in its business with the mid-year opening of a state-of-the-art Solution Center in Atlanta, which significantly enhanced CTG's capabilities in Web-based technologies. CTG also received ISO 9001 certification status in June 2000 for all its offices worldwide, making CTG one of the largest IT services organizations to be 100 percent ISO-certified. Mr. Jennings added, "CTG secured significant new business in 2000 with the award of its largest-ever application maintenance outsourcing (1) Contracting with outside consultants, software houses or service bureaus to perform systems analysis, programming and datacenter operations. Contrast with insourcing. See netsourcing, ASP, SSP and facilities management. contract initially valued at $44.5 million over three years. Other new clients that signed contracts with CTG in 2000 include BGE BGE Baltimore Gas and Electric BGE Big Green Egg (grill) BGE Beyond Good and Evil (Nietzsche) BGE Busch Gardens Europe BGE Branch If Greater or Equal BGE Bacterial Growth Efficiency Home, EDS (Electronic Data Systems, Plano, TX, www.eds.com) Founded in 1962 by H. Ross Perot (independent candidate for the President of the U.S. in 1992), EDS is the largest outsourcing and data processing services organization in the country. , Gate Gourmet Gate Gourmet is an airline catering firm with headquarters in Zurich, Switzerland, and Reston, Virginia, USA. As of 2004, it had 22,000 employees, a revenue of 2.4 billion Swiss Francs, and produced 195 million flight meals per year. Americas, Mountain States The Mountain States (also known as the Mountain West) form one of the nine geographic divisions of the United States that are officially recognized by the United States Census Bureau. Health Alliance, Port Authority of Pittsburgh, and St. Vincent Health St. Vincent Health is a nonprofit hospital and health care system based in Indianapolis, Indiana. Named for the 17th century Parisian St. Vincent de Paul, St. Vincent Health is the state's sixth largest employer at 11,500 and operates 17 hospital facilities that serve 45 counties Services. In November, we renewed for three years CTG's contract with IBM (International Business Machines Corporation, Armonk, NY, www.ibm.com) The world's largest computer company. IBM's product lines include the S/390 mainframes (zSeries), AS/400 midrange business systems (iSeries), RS/6000 workstations and servers (pSeries), Intel-based servers (xSeries) , our largest customer, as one of IBM's national technical services providers for the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. . We are also excited about a recently signed strategic partnership agreement with TIBCO TIBCO The Information Bus Company , a leading provider of real-time infrastructure solutions." CTG also provided initial guidance on its revenue and income expectations for 2001. Based on current economic and business conditions, CTG expects that its 2001 revenues will range between $380 million and $395 million, 10 percent to 14 percent above 2000. The company currently projects 2001 net income between $3.2 million and $4.4 million, or $.44 to $.51 cash earnings per diluted share and $0.20 to $0.27 per diluted share, compared to its net loss of $5.7 million or $.04 cash loss per diluted share and $0.35 loss per diluted share in 2000. Revenues and net loss for the first quarter of 2001 are currently expected to range from $76 million to $79 million and $1.1 million to $1.5 million, respectively, due to: (a) investments the company will make as it implements its new strategic direction during the 2001 first quarter, and (b) the conclusion of several development and integration engagements. First-half earnings are expected to be a small loss to break even. "Looking forward, CTG is in an excellent position as IT spending increases per industry analysts' projections," Mr. Jennings concluded. "A days sales outstanding In accountancy, Days Sales Outstanding is a company's average collection period. A low figure indicates that the company collects its outstanding receivables quickly. Typically it is looked at either quarterly or yearly (90 or 365 days). ratio of 65 days contributed to this year's impressive $21.7 million reduction in long-term debt Long-Term Debt Loans and financial obligations lasting over one year. Notes: For example debts obligations such as bonds and notes which have maturities greater than one year would be considered long-term debt. . With a strategy that strengthens CTG's business, we expect to resume revenue growth and return to profitability in the second half of 2001." Backed by 35 years' experience, CTG provides IT staffing, application management, and consulting solutions to help Global 2000 clients focus on their core businesses and use IT as a competitive advantage to excel in their markets. CTG combines in-depth understanding of our clients' businesses with a full range of integrated services In computer networking, IntServ or integrated services is an architecture that specifies the elements to guarantee quality of service (QoS) on networks. IntServ can for example be used to allow video and sound to reach the receiver without interruption. , proprietary service methodologies, and a proven track record of delivering solutions that work. More information about CTG is available on the Web at http://www.ctg.com. This document contains certain forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. concerning the Company's current expectations as to future growth. These statements are based upon a review of industry reports, current business conditions in the areas where the Company does business, the availability of qualified professional staff, the demand for the Company's services, and other factors which involve risk and uncertainty. As such, actual results may differ materially in response to a change in such factors. Such forward-looking statements should be read in conjunction with the Company's disclosures set forth in the Company's 1999 Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. , Management's Discussion and Analysis Management's discussion and analysis (MD&A) A report from management to shareholders that accompanies the firm's financial statements in the annual report. It explains the period's financial results and enables management to discuss topics that may not be apparent in the financial section of the Company's 1999 annual report, and Form 10-Q Form 10-Q See 10-Q. for the third quarter of 2000, which are incorporated by reference. Today's news release, along with CTG news releases for the past year, is available on the Web at http://www.ctg.com.
COMPUTER TASK GROUP, INCORPORATED (CTG)
Consolidated Statements of Operations
(amounts in thousands except per share data)
For the Quarter Ended For the Year Ended
Dec. 31, Dec. 31, Dec. 31, Dec. 31,
2000 1999 2000 1999
--------- ---------- ---------- -----------
Revenue $ 83,371 $ 115,400 $ 345,676 $ 472,008
Direct Costs 58,121 80,006 244,328 316,304
Selling, General
and Administrative
Expenses 24,160 31,445 102,836 124,871
Restructuring Charge -- -- 4,157 --
--------- --------- ---------- ----------
Operating Income
(Loss) 1,090 3,949 (5,645) 30,833
Net Other Income
(Expense) (812) 79 (3,034) (969)
--------- --------- ---------- ----------
Income (Loss)
Before Income
Taxes 278 4,028 (8,679) 29,864
Provision (Benefit)
for Income Taxes 107 1,873 (3,018) 13,163
--------- --------- --------- ----------
Net Income (Loss) $ 171 $ 2,155 $ (5,661) $ 16,701
========= ========= ========= =========
Net Income (Loss)
Per Share:
Basic $0.01 $0.13 $(0.35) $1.02
===== ===== ====== =====
Diluted $0.01 $0.13 $(0.35) $1.00
===== ===== ====== =====
Cash-Diluted(a) $0.09 $0.19 $(0.04) $1.21
===== ===== ====== =====
Weighted Average
Shares Outstanding:
Basic 16,324 16,204 16,187 16,401
Diluted 16,424 16,393 16,272 16,680
(a) Cash earnings per diluted share excludes amortization of
goodwill and other intangible assets.
COMPUTER TASK GROUP, INCORPORATED (CTG)
Consolidated Balance Sheets
(amounts in thousands)
Dec. 31, Dec.31,
2000 1999
-------- --------
Current Assets:
Cash and Cash Equivalents $2,562 $10,684
Accounts Receivable, Net 57,968 80,773
Other Current Assets 5,535 5,862
Total Current Assets 66,065 97,319
Property and Equipment, Net 13,784 13,483
Other Assets 82,518 88,357
---------- ----------
Total Assets $ 162,367 $ 199,159
========= =========
Dec. 31, Dec. 31,
2000 1999
--------- ----------
Current Liabilities:
Accounts Payable $ 12,563 $10,834
Accrued Compensation 26,121 27,567
Income Taxes Payable 3,806 10,423
Other Current Liabilities 11,031 13,293
--------- ---------
Total Current Liabilities 53,521 62,117
Long-term Debt 9,700 31,380
Other Liabilities 10,353 10,738
Shareholders' Equity 88,793 94,924
---------- ---------
Total Liabilities and
Shareholders' Equity $ 162,367 $ 199,159
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