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GTSI REPORTS SECOND QUARTER RESULTS

 GTSI REPORTS SECOND QUARTER RESULTS
 CHANTILLY, Va., July 31 /PRNewswire/ -- Government Technology


Services, Inc. (NASDAQ: GTSI) today reported its results for the second quarter and six months ended June 30, 1992. The company's sales and net income were in line with preliminary results announced on July 20, 1992.
 Sales for the second quarter of 1992 were $68,884,000, compared with $77,996,000 for the same three months of 1991. Net income was $32,000 or $0.01 per share for the recent quarter, compared with $1,201,000 or $0.27 for the same 1991 period. Per share amounts were based on 6,364,000 and 4,486,000 weighted average shares outstanding for the quarters ended June 30, 1992 and 1991, respectively. Backlog at June 30, 1992, was $7.2 million, up six percent from the amount at June 30, 1991.
 R.M. Rickenbach, chairman and chief executive officer, said, "We are seeing an increase in sales and bookings in the third quarter, an increase that began late in the second quarter. The company has experienced a nine percent rise in sales during the first month of the third quarter, as compared with the same period a year ago, while backlog continued to increase. With pricing levels beginning to stabilize, orders are reflecting more normal purchasing patterns.
 "GTSI is responding to the competitive conditions in our industry, while maintaining our price leadership position, by cutting overhead costs. We expect to reduce operating expenses by approximately $1.5 million in the second half of 1992 through a series of G&A cost reduction actions, including a 5 percent pay cut for the company's senior executives. We are also evaluating other measures, such as consolidating or outsourcing certain operations, that could produce further efficiencies in 1993. We are currently focusing our efforts on reducing general and administrative costs while continuing our investment in the sales-side of the organization," Rickenbach added.
 For the six months ended June 30, 1992, sales were $133,834,000, compared with $139,185,000 in the 1991 first half. Net income was $158,000 or $0.02 per share for the first six months of 1992, compared with $1,251,000 or $0.28 for the same 1991 period. Per share amounts were based on 6,425,000 and 4,484,000 weighted average shares outstanding for the six months ended June 30, 1992 and 1991, respectively.
 Government Technology Services, Inc. is the leading reseller of microcomputer hardware, software and networking products to the Federal Government market, as well as a reseller of workstations and allied software and peripherals. The company is based in Chantilly, in suburban Washington, D.C.
 GOVERNMENT TECHNOLOGY SERVICES, INC.
 Income Statement
 (In thousands, except per share amounts - Unaudited)
 Periods ended Three Months Six Months
 June 30 1992 1991 1992 1991
 Sales:
 Hardware $49,256 $57,178 $97,249 $101,713
 Software 18,418 19,630 34,361 35,159
 Other 1,210 1,188 2,224 2,313
 68,884 77,996 133,834 139,185
 Cost of sales 60,123 66,404 117,134 118,757
 Gross margin 8,761 11,592 16,700 20,428
 Operating expenses 8,459 9,631 15,725 17,801
 Operating income 302 1,961 975 2,627
 Other expenses 256 23 721 610
 Income before
 income taxes 46 1,938 254 2,017
 Provision for
 income taxes 14 737 96 766
 Net income 32 1,201 158 1,251
 Earnings per share $0.01 $0.27 $0.02 $0.28
 Weighted average shares
 outstanding (A) 6,364 4,486 6,425 4,484
 GOVERNMENT TECHNOLOGY SERVICES, INC.
 Balance Sheet
 6/30/92 12/31/91
 (Unaudited) (Audited)
 Working capital $ 47,100 $46,321
 Accounts receivable 40,771 50,271
 Inventories 54,647 68,587
 Total assets 104,840 127,682
 Short-term debt 12,922 45,298
 Long-term capital
 lease obligations 496 601
 Stockholders' equity 50,023 49,639
 GOVERNMENT TECHNOLOGY SERVICES, INC.
 Periods ended Three Months Six Months
 June 30 1992 1991 1992 1991
 Customer Category:
 Direct to Government:
 GSA Schedule $24,642 $27,542 $46,719 $48,802
 Other Government direct 23,299 19,406 43,211 32,765
 Prime contractors (B) 15,267 26,215 35,366 49,290
 State and local
 governments 5,676 4,833 8,538 8,328
 Total $68,884 $77,996 $133,834 $139,185
 (A) Increase in shares outstanding due to September 1991 initial public offering.
 (B) Reduction primarily reflects decline in sales of IBM Token Ring Products.
 -0- 7/31/92
 /CONTACT: Deborah M. Tucker of Government Technology Services, 703-631-3333, ext. 1001/
 (GTSI) CO: Government Technology Services Inc. ST: Virginia IN: CPR SU: ERN


SM -- NY011 -- 5519 07/31/92 10:40 EDT
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