CTG Reports 2003 Second Quarter Financial Results Revenues Rise Sequentially; EPS Meets Guidance.Business Editors/High-Tech Writers 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)--July 14, 2003 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) solutions and staffing company, today announced its financial results for the second quarter of 2003, which ended on June 27, 2003. CTG's revenues for the second quarter of 2003 were $64.1 million, compared with revenues of $67.7 million in the second quarter of 2002. CTG's net income for the second quarter of 2003 was $0.5 million, or $0.03 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, compared with net income for the 2002 second quarter of $0.7 million, or $0.04 per diluted share. For the 2003 first half, CTG reported revenues of $127.9 million, compared with revenues of $137.6 million in the 2002 first half. CTG's net income for the 2003 first half was $0.6 million, or $0.04 per diluted share, compared with a 2002 first half net loss of $35.9 million, or $2.11 per diluted share, which included the cumulative effect of the change in accounting principle related to the valuation of the Company's goodwill and intangible assets Intangible Asset An asset that is not physical in nature. Notes: Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible assets. . "CTG's quarterly earnings per share again met our expectations, and our revenues rose sequentially at a time when several IT services and consulting firms Noun 1. consulting firm - a firm of experts providing professional advice to an organization for a fee consulting company business firm, firm, house - the members of a business organization that owns or operates one or more establishments; "he worked for a expect to report losses and further declines in revenues," said CTG Chairman and Chief Executive Officer James R. Boldt. "CTG's push to expand our strategic staffing client base is paying off with our new, large client relationships ramping up and our existing business continuing to improve. Our fourth consecutive quarter of solid results in our strategic staffing business helped offset some of the delays we are seeing in solutions and 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. projects, as a number of clients continue to defer de·fer 1 v. de·ferred, de·fer·ring, de·fers v.tr. 1. To put off; postpone. 2. To postpone the induction of (one eligible for the military draft). v.intr. the start-up Start-up The earliest stage of a new business venture. of engagements based on the uncertain economic environment." Mr. Boldt added, "We also continue to focus on key vertical markets. This is a sound, long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. growth strategy for CTG, as we are targeting industries where we have significant experience and the demand for IT services is strong and growing. Our newest vertical practice, which supports the life sciences market, positions us to capitalize on Cap´i`tal`ize on` v. t. 1. To turn (an opportunity) to one's advantage; to take advantage of (a situation); to profit from; as, to capitalize on an opponent's mistakes s>. the emerging opportunity of 21 CFR CFR See: Cost and Freight Part 11 compliance for companies selling or distributing FDA-regulated products. CTG has already done a significant amount of 21 CFR Part 11 work for several major life sciences firms, and this work, coupled with our knowledge of the industry, should support the growth of this new vertical. Demand for health care IT, the focus of CTG's largest vertical practice, remains strong, in part a result of the higher-value integration work related to HIPAA (Health Insurance Portability & Accountability Act of 1996, Public Law 104-191) Also known as the "Kennedy-Kassebaum Act," this U.S. law protects employees' health insurance coverage when they change or lose their jobs (Title I) and provides standards for patient health, compliance." During the quarter, CTG sold an unused facility in Melbourne, Florida Melbourne is a city in Brevard County, Florida, United States. As of the 2000 census, the city had a total population of 71,382. As of 2005, the population estimated by the U.S. Census Bureau is 76,646. for $2.2 million, resulting in a $0.2 million pre-tax loss, or $.01 per diluted share, on the sale that is reflected in the 2003 second quarter results. The proceeds from this property sale were used to reduce 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. , which declined from $15.6 million at the 2003 first quarter-end to $7.6 million at the 2003 second quarter-end, its lowest level since the February 1999 acquisition of Elumen Solutions. CTG also issued guidance for the third quarter of 2003. Based on current business and market conditions, CTG expects that its revenues and net income per diluted share for the third quarter of 2003 will range from $60 million to $62 million and $0.00 to $0.02, respectively. Mr. Boldt concluded, "Our guidance for the third quarter reflects one less billing day than the second quarter and the seasonal vacation effect when consulting staff con·sult·ing staff n. The body of specialists affiliated with a hospital who serve in an advisory capacity to the attending staff. in both 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. and Europe typically take vacation. The additional holiday and vacation's impact on utilization are expected to have a combined effect on revenue of $2.5 million to $3.5 million. Despite the normal seasonal decline, CTG continues to compare favorably fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. to others in our industry in a business environment that remains very challenging. Our focus on staffing for large companies and our strength in other core competencies A core competency is something that a firm can do well and that meets the following three conditions specified by Hamel and Prahalad (1990):
Backed by 37 years' experience, CTG provides IT application management, consulting, software development and integration, and staffing 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. and proprietary 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. 9001:2000-certified service methodologies. Our 2,700 IT professionals based in an international network of offices in North America and Europe have a proven track record of delivering solutions that work. More information about CTG is available on the Web at 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 that 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 2002 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. and 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 2002 annual report, which are incorporated by reference. The Company assumes no obligation to update the forward-looking information contained in this release. CTG will hold a conference call on July 15, 2003 at 11:00 a.m. EDT EDT abbr. Eastern Daylight Time EDT Eastern Daylight Time EDT n abbr (US) (= Eastern Daylight Time) → hora de verano de Nueva York EDT to discuss its financial results and business strategy. CTG Chairman and Chief Executive Officer James R. Boldt will lead the call. Interested parties can dial in to 1-800-869-4362 between 10:45 a.m. and 10:50 a.m. and ask for the CTG conference call and identify James Boldt as the conference chairperson chairperson Chairman The head of an academic department. See 'Chair.', Cf Chief. . A replay of the call will be available between 1:00 p.m. EDT July 15, 2003 and 1:00 p.m. EDT July 18, 2003 by dialing 1-800-642-1687 and entering the conference ID number 1412681.
COMPUTER TASK GROUP, INCORPORATED (CTG)
Consolidated Statements of Operations
(amounts in thousands except per share data)
For the Two For the Two
Quarters Quarters
For the Quarter Ended Ended Ended
June 27, June 28, June 27, June 28,
2003 2002 2003 2002
Revenue $64,057 $67,667 $127,919 $137,561
Direct costs 46,834 48,986 93,988 99,135
Selling, general and
administrative expenses 15,988 17,374 32,274 35,317
------ ------ ------ ------
Operating income 1,235 1,307 1,657 3,109
Net other expense 445 198 643 1,258
------ ------ ------ ------
Income before income taxes and
cumulative effect of
change in accounting
principle 790 1,109 1,014 1,851
Provision for income taxes 332 438 426 731
------ ------ ------ ------
Net income before cumulative
effect of change
in accounting principle 458 671 588 1,120
Cumulative effect of change in
accounting principle (a) - - - (37,038)
------ ------ ------ --------
Net income (loss) $ 458 $ 671 $ 588 $(35,918)
====== ====== ====== ========
Basic net income (loss) per
share:
Net income before cumulative
effect of change
in accounting principle $ 0.03 $ 0.04 $ 0.04 $ 0.07
Cumulative effect of change in
accounting principle (a) - - - (2.24)
------ ------ ------ ------
Basic net income (loss) per
share $ 0.03 $ 0.04 0.04 $ (2.17)
====== ====== ====== ======
Diluted net income (loss) per
share:
Net income before cumulative
effect of change
in accounting principle $ 0.03 $ 0.04 $ 0.04 $ 0.07
Cumulative effect of change in
accounting principle (a) - - - (2.18)
------ ------ ------ -------
Diluted net income (loss) per
share $ 0.03 $ 0.04 $ 0.04 $ (2.11)
====== ====== ======= ========
Weighted average shares
outstanding:
Basic 16,646 16,557 16,635 16,545
Diluted 16,711 17,029 16,738 17,000
a. In conjunction with the required adoption of SFAS No. 142 and based
upon an independent appraisal, CTG recorded a pre-tax, non-cash
loss for impairment of $37.0 million or $2.24 per basic share and
$2.18 per diluted share in the 2002 first quarter. The write-off
primarily relates to the goodwill that resulted from the
acquisition in February 1999 of the healthcare information
technology services provider Elumen Solutions, Inc.
COMPUTER TASK GROUP, INCORPORATED (CTG)
Consolidated Balance Sheets
(amounts in thousands)
June 27, June 28, June 27, June 28,
2003 2002 2003 2002
Current Assets: Current
Liabilities:
Cash and cash Accounts
equivalents $ 1,968 $ 2,731 payable $ 8,121 $ 8,238
Accounts Accrued
receivable, net 46,839 52,280 compensation 19,449 21,985
Other current Income taxes
assets 3,343 4,799 payable - 2,802
Other current
liabilities 4,357 7,594
----- ------ ------ ------
Total Current Total Current
Assets 52,150 59,810 Liabilities 31,927 40,619
Property and Long-term
equipment, net 8,110 12,666 debt 7,643 13,234
Other assets Other
40,611 40,278 liabilities 7,499 7,704
Shareholders'
equity 53,802 51,197
------ ------ ------ ------
Total
Liabilities
and
Shareholders'
Total Assets $100,871 $112,754 Equity $100,871 $112,754
-------- -------- ======== ========
Today's news release, along with CTG news releases for the past year, is available on the Web at www.ctg.com. |
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