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GTSI ANNOUNCES INCREASED SALES AND EARNINGS IN THE FIRST QUARTER

GTSI ANNOUNCES INCREASED SALES AND EARNINGS IN THE FIRST QUARTER
 CHANTILLY, Va., April 22 /PRNewswire/ -- Government Technology Services, Inc. (NASDAQ: GTSI) today reported higher sales and earnings for the first quarter of 1992. The company reported net income of $126,000, or 2 cents per share, as compared with $50,000, or 1 cent per share, in the year-ago first quarter. Sales in the 1992 first quarter were $64,950,000, as compared with $61,189,000.
 Sales increased in the first quarter, historically the weakest quarter of the year, were attributed principally to an 8 percent increase in hardware sales resulting from the expansion in GTSI's product offering to include workstation products (amounting to approximately $1.5 million in the quarter) and the addition of sales under the Companion Contract (amounting to $3.3 million in the quarter). Offsetting these sales increases was a $5.7 million reduction in sales of IBM Token Ring products from the year-ago first quarter. Backlog at March 31, 1992, was $6,743,000 down 25 percent from the amount at March 31, 1991, reflecting a decline in quarterly bookings from the year-ago quarter.
 Operating income was $674,000 for the 1992 first quarter compared with $666,000 for the same period of the prior year. Earnings were adversely impacted primarily by declines in gross margins resulting from the continuing industry trend of competitive pricing and changes in product mix. Operating expenses were favorably impacted in the first quarter of 1992 by the accrual of approximately $550,000, net of settlement costs, in legal fee reimbursements claimed by GTSI to be due it by the government in association with GTSI's successful protest of the Companion and Desktop IV contracts.
 The weighted number of shares outstanding in the first quarter increased 47 percent principally as a result of the shares issued in the company's September 1991 initial public offering. This caused earnings per share to decline from 3 cents to 2 cents in the first quarter of 1992.
 R.M. Rickenbach, chairman, chief executive officer and president, stated: "We are pleased that the company continued its sales growth and achieved profitability in the first quarter. We believe opportunities for sales increases for the year will emerge from seasonal increases in government demand and business opportunities from the workstation market and the Companion Contract. GTSI continues its efforts to control operating expenses as a percentage of sales in order to maintain profitability."
 GTSI 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.
 GOVERNMENT TECHNOLOGY SERVICES, INC.
 (In thousands, except per share amounts)
 Three Months Ended March 31,
 1992 1991
 (unaudited)
 Income Statement Data:
 Sales(A):
 Hardware $ 47,993 $ 44,535
 Software 15,943 15,529
 Other 1,014 1,125
 Total 64,950 61,189
 Cost of sales 57,011 52,353
 Gross margin 7,939 8,836
 Operating expenses 7,265 8,170
 Operating income 674 666
 Other income (expense) (465) (587)
 Income before income taxes 209 79
 Provision for income taxes 83 29
 Net income $ 126 $ 50
 Earnings per share $ 0.02 $ 0.01
 Weighted average shares outstanding 6,508 4,434
 March 31, 1992 Dec. 31, 1991
 (unaudited) (audited)
 Balance Sheet Data:
 Working capital $ 46,574 $ 46,321
 Accounts receivable 39,678 50,271
 Inventories 45,660 68,587
 Total assets 94,503 127,682
 Short-term debt 21,627 45,298
 Long-term capital lease obligations 549 601
 Stockholders' equity 49,826 49,639
 (A) Customer Category Three Months Ended March 31
 1992 1991
 (unaudited)
 Direct to Government
 GSA Schedule $ 22,077 $ 21,260
 Other Government direct 19,913 13,361
 Prime contractors 20,098 23,075
 State and local governments 2,862 3,493
 Total $ 64,950 $ 61,189
 -0- 4/22/92
 /CONTACT: Deborah M. Tucker of Government Technology Services, Inc., 703-631-3333, ext. 3026/
 (GTSI) CO: Government Technology Services, Inc. ST: Virginia IN: CPR SU: ERN


MP -- DC003 -- 1108 04/22/92 09:32 EDT
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Publication:PR Newswire
Date:Apr 22, 1992
Words:672
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