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GTSI REPORTS 1992 FOURTH QUARTER AND YEAR-END RESULTS

 CHANTILLY, Va, Feb. 18 /PRNewswire/ -- Government Technology Services, Inc. (NASDAQ: GTSI) today reported its results for the fourth quarter and the year ended Dec. 31, 1992, and noted that the company posted record sales in both periods.
 Fourth quarter sales were $121,956,000, an increase of approximately 24 percent compared with $98,689,000 reported for the same three months of 1991. Net income for the fourth quarter was $1,856,000 or $0.29 per share, compared with $1,640,000 or $0.25 per share for the same period last year.
 We are encouraged by the continued growing demand for microcomputer and workstation products in the government market, which resulted in record sales in the fourth quarter. We are seeing the results of our efforts to reduce operating expenses and improve productivity," said GTSI Chairman and Chief Executive Officer R.M. Rickenbach. "This combination resulted in an increase in operating income of 34 percent on a sales increase of 24 percent in the fourth quarter."
 Results for the 1992 fourth quarter reflected higher sales primarily due to increased demand for microcomputer products and in particular to growth in GTSI's sales of workstation products. The increase in earnings reflected the higher sales level and a reduction in operating expenses.
 For the year ended Dec. 31, 1992, GTSI's sales rose to $396,555,000 as compared with $359,384,000 in the same 1991 period, an increase of 10 percent. Net income was $5,771,000 or $0.91 per share for 1992, compared with $7,580,000 or $1.45 per share for 1991. The lower 1992 annual net income resulted principally from a reduced gross margin due to the impact of intense price competition in the microcomputer industry. Per share amounts reflected 6,355,000 and 5,227,000 weighted average shares outstanding for the years ended Dec. 31, 1992 and 1991, respectively, with the increase primarily due to the company's September 1991 initial public offering.
 Backlog was nearly $18 million at the end of the fourth quarter, up 113 percent from the end of 1991," Rickenbach said. "Looking ahead to 1993, we expect to continue to benefit from the measures we put in place in the second half of 1992, when we saw sales improvement in the third quarter, and sales and earnings increases in the fourth quarter. Based on the strength of our product offerings, increasing demand for computers in the government market, and our ability to control operating expenses, we expect the momentum to continue."
 GTSI is the leading reseller of microcomputer hardware, software and networking products to the Federal Government market, as well as a reseller of UNIX workstations and allied software and peripherals.
 GOVERNMENT TECHNOLOGY SERVICES, INC.
 (In thousands, except per share amounts)
 Periods ended Fourth Quarter Year
 Dec. 31: 1992 1991 1992 1991
 Income Statement Data:
 Sales:(A)
 Hardware $84,708 $69,126 $280,235 $254,608
 Software 35,526 28,761 110,410 100,559
 Other 1,722 802 5,910 4,217
 Total 121,956 98,689 396,555 359,384
 Cost of sales 108,846 85,949 350,791 309,692
 Gross margin 13,110 12,740 45,764 49,692
 Operating expenses 9,021 9,696 33,702 35,837
 Operating income 4,089 3,044 12,062 13,855
 Other expenses 1,064 534 2,642 1,560
 Income before
 income taxes 3,025 2,510 9,420 12,295
 Provision for
 income taxes 1,169 870 3,649 4,715
 Net income $1,856 $1,640 $5,771 $7,580
 Earnings per share:
 Primary $0.29 $0.25 $0.91 $1.49
 Fully diluted $0.29 $0.25 $0.91 $1.45
 Weighted average shares
 outstanding:
 Primary 6,329 6,548 6,355 5,057
 Fully diluted 6,356 6,561 6,355 5,227
 Balance Sheet Data:
 12/31/92 12/31/91
 Working capital $54,181 $46,321
 Accounts receivable 73,578 50,271
 Inventories 53,927 68,587
 Total assets 135,402 127,682
 Short-term debt 50,942 45,298
 Long-term capital lease obligations 383 601
 Stockholders' equity 56,267 49,639
 Periods ended Fourth Quarter Year
 Dec. 31: 1992 1991 1992 1991
 (A)Customer Category:
 Direct to Government:
 GSA Schedule $55,936 $41,765 $171,935 $153,829
 Other Government
 direct 34,137 32,516 112,985 97,333
 Prime Contractors 27,174 21,886 94,037 94,334
 State and Local
 Governments 4,709 2,522 17,598 13,888
 Total $121,956 $98,689 $396,555 $359,384
 -0- 2/18/93
 /CONTACT: Bob Capozzi of Government Technology Services, Inc., 703-631-3333 ext. 1035/
 (GTSI)


CO: Government Technology Services, Inc. ST: Virginia IN: CPR SU: ERN

TS -- NY018 -- 7747 02/18/93 09:50 EST
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Date:Feb 18, 1993
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