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GTSI ANNOUNCES RECORD SALES AND NET INCOME FOR 1991

 GTSI ANNOUNCES RECORD SALES AND NET INCOME FOR 1991
 CHANTILLY, Va., Feb. 20 /PRNewswire/ -- Government Technology


Services, Inc. (NASDAQ-NMS: GTSI) today reported the highest yearly sales and net income in its nine-year history.
 Sales for 1991 were $359,384,000, up 19.7 percent from $300,193,000 for 1990. Sales increased for both hardware and software products as well as to the Federal Government market, including on the GSA Schedule, in the open market and to prime contractors reselling to the government. Net income for 1991 was $7,580,000, up 29.5 percent from $5,853,000 for 1990. The record net income was achieved primarily as a result of the 19.7 percent growth in sales in 1991 and the reduction in operating expenses both in absolute dollars and as a percentage of sales (i.e., from 12.3 percent of 1990 sales to 10.0 percent of 1991 sales). Net income per share (on a primary basis) for 1991 was $1.49, up 14.6 percent from $1.30 for 1990. The amount of the increase in net income per share was held down by the 11.9 percent increase in the 1991 weighted average shares outstanding as a result of the 1,815,000 shares issued in the company's September 1991 initial public offering.
 Sales for the fourth quarter ended Dec. 31, 1991 were $98,689,000, up 24.7 percent from $79,127,000 for the same quarter of the prior year. Net income for the fourth quarter was $1,640,000 compared with $1,854,000 for the same quarter of the prior year. Net income in the fourth quarter of 1991 was adversely impacted primarily by continuing industry-wide declines in gross margin percentages due to price pressures and changes in product mix. Weighted average shares deemed outstanding in the fourth quarter increased 50.0 percent as a result of the shares issued in the company's initial public offering, causing net income per share (on a primary basis) to decline from $0.42 in the fourth quarter of 1990 to $0.25 in the fourth quarter of 1991. Primarily as a result of this public offering, working capital and stockholders' equity at Dec. 31, 1991 were $46,321,000 and $49,639,000, respectively, increases of 150.6 percent and 125.3 percent, respectively, from the Dec. 31, 1990 amounts. Backlog at Dec. 31, 1991 was approximately $8,300,000, up from 26.5 percent from approximately $6,560,000 at Dec. 31, 1990. Sales under the company's Companion Contract were approximately $6,692,000 in the fourth quarter.
 R.M. Rickenbach, chairman, chief executive officer and president, stated, "We are pleased with the continued growth in our sales and the reductions in operating expenses resulting primarily from improved operating productivity and increased marketing offsets. In light of our recent entry into the UNIX workstation market and the anticipated sales from the Companion Contract, the company believes it is well-positioned for further sales increases in 1992. We also plan this year to continue our efforts to control operating expenses as a percentage of sales in order to be price competitive while maintaining profitability."
 GTSI is the leading reseller of microcomputer hardware, software and networking products to the Federal Government market. In 1992, the company began reselling workstations and allied software and peripherals. GTSI currently markets over 10,000 products manufactured by over 350 vendors, including IBM, Sun, Hewlett-Packard, ALR, Compaq, WordPerfect, Lotus, Borland, 3Com, Software Publishing, Epson, Novell and Microsoft. The company sells to virtually all departments and agencies of the government, all 50 state governments and hundreds of systems integrators and prime contractors selling to the government market.
 GOVERNMENT TECHNOLOGY SERVICES, INC.
 (In thousands, except per share amounts)
 Periods ended: Three months Year
 Dec. 31: 1991 1990 1991 1990
 (Unaudited) (Audited)
 Sales $98,689 $79,127 $359,384 $300,193
 Cost of sales 85,949 67,066 309,692 253,475
 Gross margin 12,740 12,061 49,692 46,718
 Operating expenses 9,696 8,803 13,837 36,944
 Income from operations 3,044 3,258 13,855 9,774
 Other income (expense) (534) (439) (1,560) (499)
 Income before income taxes 2,510 2,819 12,295 9,275
 Provision for income taxes 870 965 4,715 3,422
 Net income 1,640 1,854 7,580 5,853
 Net income per share:
 Primary $0.25 $0.42 $1.49 $1.30
 Fully diluted 0.25 0.42 1.45 1.30
 Weighted average shares
 outstanding:
 Primary 6,548 4,365 5,057 4,521
 Fully diluted 6,561 4,365 5,227 4,521
 Balance Sheet Data
 Dec. 31: 1991 1990
 (Audited)
 Working capital $46,321 $18,486
 Total assets 127,682 79,238
 Short-term debt 45,298 36,714
 Long-term capital lease obligations 601 759
 Stockholders' equity $49,639 $22,028
 -0- 2/20/92
 /CONTACT: Alan R. Rachlin, executive vice president-strategic development of Government Technology Services, 703-631-3333, ext. 3017/
 (GTSI) CO: Government Technology Services, Inc. ST: Virginia IN: SU:


TS -- NY007 -- 0758 02/20/92 07:49 EST
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Date:Feb 20, 1992
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