Welcome!

Mobile IoT Authors: Yeshim Deniz, Pat Romanski, Liz McMillan, Zakia Bouachraoui, Elizabeth White

News Feed Item

CTG Reports 18% Revenue Growth and A 30% Increase in Net Income in the 2006 Second Quarter

CTG Reports 18% Revenue Growth and A 30% Increase in Net Income in the 2006 Second Quarter

BUFFALO, N.Y., July 25 /PRNewswire-FirstCall/ -- CTG , an international information technology (IT) staffing, solutions, and application management company, today announced its financial results for the 2006 second quarter which ended on June 30, 2006. CTG reported 2006 second quarter revenue of $85.8 million, a 17.6% increase from 2005 second quarter revenue of $72.9 million. Operating income was $1.5 million in the second quarter of 2006, a 33.2% increase from $1.2 million in the 2005 second quarter. CTG's net income for the 2006 second quarter was $0.8 million or $0.05 per diluted share, an increase of 29.7% from 2005 second quarter net income of $0.6 million, or $0.04 per diluted share. Cash net income per share(1) for the 2006 second quarter was $1.0 million or $0.06 per diluted share, and excludes equity-based compensation expense of $0.1 million.

"As expected, CTG again reported quarterly double-digit revenue and earnings growth," said CTG Chairman and Chief Executive Officer James R. Boldt. "Demand from our clients in the quarter was strong for CTG's staffing, healthcare, testing, and information security offerings. As a result, we added another 100 people to our headcount this quarter, which now stands at approximately 3,800, a 500 person increase from a year ago. Overall, our focus on in-demand services and solutions in key growth vertical markets enabled CTG to achieve a strong first half despite a technology solutions market that remains below normal levels."

On July 24, 2006, the Company was informed by a significant customer of a reduction in their need for approximately 350 existing CTG staff. The reduction is not a result of CTG's performance but rather a change in our client's business needs. The reduction in staff will occur in the Company's lower margin Strategic Staffing business.

For the 2006 first half, CTG reported revenue of $169.4 million, a 19.6% increase from 2005 first half revenue of $141.6 million. Year-to-date operating income in 2006 was $3.1 million, 48.8% higher than $2.1 million in the same 2005 period. CTG's net income in the 2006 first half increased 44.1% to $1.6 million, or $0.09 per diluted share, from 2005 first half net income of $1.1 million, or $0.06 per diluted share. Cash net income per share(1) for the 2006 first half was $1.8 million or $0.11 per diluted share, and excludes equity-based compensation expense of $0.2 million.

During the 2006 second quarter, CTG repurchased 150,400 of its shares in open market transactions. CTG has repurchased a total of 608,900 shares since announcing a 1.0 million share repurchase authorization on May 12, 2005 in addition to an existing 210,000 share authorization. Mr. Boldt commented, "We believe CTG's shares are attractively valued and intend to continue actively repurchasing our shares." CTG's debt at 2006 second quarter end was $3.2 million, compared with $1.0 million at the end of the 2006 first quarter. The increase is reflective of the timing of the payment of the company's US bi-weekly payroll on the last day of the 2006 second quarter.

CTG provided guidance on its revenue and earnings forecasts for the 2006 third quarter and updated its guidance for 2006. Based on current business and market conditions and the expected reduction in billable headcount, CTG expects that for the third quarter of 2006 its revenue will range from $81.5 million to $83.5 million, cash net income per diluted share(1) will range from $0.04 to $0.06, and net income per diluted share will range from $0.03 to $0.05. CTG now expects that its 2006 revenue will range from $330 million to $340 million, an increase of 12 to 15 percent over 2005. The Company currently anticipates its 2006 net income per diluted share will be in the range of $0.17 to $0.21 per share, an increase of 21 to 50 percent over 2005. Cash net income per diluted share (1), which excludes the equity-based compensation expense, is currently projected to be $0.20 to $0.24 per diluted share.

Mr. Boldt concluded, "Even with the reduction in our billable headcount in the third quarter, CTG expects double digit increases in revenue and earnings over 2005 for the full year. We recently secured several major new business wins that will commence in the second half of the year. These projects include a healthcare transitional outsourcing contract, an expansion of our staffing relationship with a leading global personal computer manufacturer, new testing work in the financial services and life sciences verticals, and a ramp-up in the fourth quarter of the support we are providing on the United Kingdom national healthcare systems project. This new business is expected to somewhat mitigate the impact of the third quarter reduction in billable headcount."

Backed by 40 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 and proprietary ISO 9001:2000-certified service methodologies. Our 3,800 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 http://www.ctg.com/.

This document contains certain forward-looking statements 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 2005 Form 10-K and Management's Discussion and Analysis section of the Company's 2005 annual report, which are incorporated by reference. The Company assumes no obligation to update the forward-looking information contained in this release.

(1) For the purposes of this calculation, cash net income per diluted share excludes equity-based compensation expense, net of income tax. Cash net income per diluted share is not a measurement calculated in accordance with U.S. Generally Accepted Accounting Principles (GAAP), and it is not intended to be a replacement for, or considered to be more important than, net income per diluted share calculated in accordance with GAAP.

CTG will hold a conference call on Wednesday July 26, 2006 at 10:00 AM Eastern Time 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 1-888-428-4474 between 9:45 AM and 9:50 AM and ask for the CTG conference call and identify James Boldt as the conference chairperson. A replay of the call will be available between 1:00 PM Eastern Time July 26, 2006 and 1:00 PM Eastern Time July 29, 2006 by dialing 1-800-475-6701 and entering the conference ID number 816209.

COMPUTER TASK GROUP, INCORPORATED (CTG) Condensed Consolidated Statements of Income (Unaudited) (amounts in thousands except per share data) For the Quarter Ended For the Two Quarters Ended June 30, July 1, June 30, July 1, 2006 2005 2006 2005 Revenue $85,765 $72,910 $169,408 $141,593 Direct costs 67,058 56,505 132,583 108,675 Selling, general and administrative expenses 17,164 15,247 33,721 30,832 Operating income 1,543 1,158 3,104 2,086 Net other expense (149) (372) (471) (594) Income before income taxes 1,394 786 2,633 1,492 Provision for income taxes 586 163 1,038 385 Net income $808 $623 $1,595 $1,107 Net income per share: Basic $0.05 $0.04 $0.10 $0.07 Diluted $0.05 $0.04 $0.09 $0.06 Weighted average shares outstanding: Basic 16,450 16,801 16,499 16,807 Diluted 16,847 17,029 16,839 17,136

Reconciliation of GAAP Diluted Earnings Per Share to Cash Net Income Per Share(1)

For the Quarter Ended For the Two Quarters Ended June 30, July 1, June 30, July 1, 2006 2005 2006 2005 Net income $808 $623 $1,595 $1,107 Equity-based compensation, net of income tax 144 - 234 - Cash net income $952 $623 $1,829 $1,107 Cash net income per share $0.06 $0.04 $0.11 $0.06 COMPUTER TASK GROUP, INCORPORATED (CTG) Condensed Consolidated Balance Sheets (Unaudited) (amounts in thousands) June 30, July 1, 2006 2005 Current Assets: Cash and cash equivalents $4,395 $2,686 Accounts receivable, net 52,718 65,069 Other current assets 3,912 4,086 Total Current Assets 61,025 71,841 Property and equipment, net 6,380 6,724 Goodwill 35,678 35,678 Other assets 8,676 6,851 Total Assets $111,759 $121,094 Current Liabilities: Accounts payable $8,308 $8,034 Accrued compensation 24,286 20,905 Other current liabilities 7,080 7,046 Total Current Liabilities 39,674 35,985 Long-term debt 3,150 18,800 Other liabilities 9,891 9,191 Shareholders' equity 59,044 57,118 Total Liabilities and Shareholders' Equity $111,759 $121,094

Today's news release, along with CTG news releases for the past year, is available on the Web at http://www.ctg.com/.

CONTACT: James R. Boldt, Chairman & Chief Executive Officer (716) 887-7244

CTG

CONTACT: James R. Boldt, Chairman & Chief Executive Officer of CTG,
+1-716-887-7244

Web site: http://www.ctg.com/

More Stories By PR Newswire

Copyright © 2007 PR Newswire. All rights reserved. Republication or redistribution of PRNewswire content is expressly prohibited without the prior written consent of PRNewswire. PRNewswire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

IoT & Smart Cities Stories
Atmosera delivers modern cloud services that maximize the advantages of cloud-based infrastructures. Offering private, hybrid, and public cloud solutions, Atmosera works closely with customers to engineer, deploy, and operate cloud architectures with advanced services that deliver strategic business outcomes. Atmosera's expertise simplifies the process of cloud transformation and our 20+ years of experience managing complex IT environments provides our customers with the confidence and trust tha...
Intel is an American multinational corporation and technology company headquartered in Santa Clara, California, in the Silicon Valley. It is the world's second largest and second highest valued semiconductor chip maker based on revenue after being overtaken by Samsung, and is the inventor of the x86 series of microprocessors, the processors found in most personal computers (PCs). Intel supplies processors for computer system manufacturers such as Apple, Lenovo, HP, and Dell. Intel also manufactu...
At CloudEXPO Silicon Valley, June 24-26, 2019, Digital Transformation (DX) is a major focus with expanded DevOpsSUMMIT and FinTechEXPO programs within the DXWorldEXPO agenda. Successful transformation requires a laser focus on being data-driven and on using all the tools available that enable transformation if they plan to survive over the long term. A total of 88% of Fortune 500 companies from a generation ago are now out of business. Only 12% still survive. Similar percentages are found throug...
Darktrace is the world's leading AI company for cyber security. Created by mathematicians from the University of Cambridge, Darktrace's Enterprise Immune System is the first non-consumer application of machine learning to work at scale, across all network types, from physical, virtualized, and cloud, through to IoT and industrial control systems. Installed as a self-configuring cyber defense platform, Darktrace continuously learns what is ‘normal' for all devices and users, updating its understa...
AI and machine learning disruption for Enterprises started happening in the areas such as IT operations management (ITOPs) and Cloud management and SaaS apps. In 2019 CIOs will see disruptive solutions for Cloud & Devops, AI/ML driven IT Ops and Cloud Ops. Customers want AI-driven multi-cloud operations for monitoring, detection, prevention of disruptions. Disruptions cause revenue loss, unhappy users, impacts brand reputation etc.
Apptio fuels digital business transformation. Technology leaders use Apptio's machine learning to analyze and plan their technology spend so they can invest in products that increase the speed of business and deliver innovation. With Apptio, they translate raw costs, utilization, and billing data into business-centric views that help their organization optimize spending, plan strategically, and drive digital strategy that funds growth of the business. Technology leaders can gather instant recomm...
OpsRamp is an enterprise IT operation platform provided by US-based OpsRamp, Inc. It provides SaaS services through support for increasingly complex cloud and hybrid computing environments from system operation to service management. The OpsRamp platform is a SaaS-based, multi-tenant solution that enables enterprise IT organizations and cloud service providers like JBS the flexibility and control they need to manage and monitor today's hybrid, multi-cloud infrastructure, applications, and wor...
The Master of Science in Artificial Intelligence (MSAI) provides a comprehensive framework of theory and practice in the emerging field of AI. The program delivers the foundational knowledge needed to explore both key contextual areas and complex technical applications of AI systems. Curriculum incorporates elements of data science, robotics, and machine learning-enabling you to pursue a holistic and interdisciplinary course of study while preparing for a position in AI research, operations, ...
After years of investments and acquisitions, CloudBlue was created with the goal of building the world's only hyperscale digital platform with an increasingly infinite ecosystem and proven go-to-market services. The result? An unmatched platform that helps customers streamline cloud operations, save time and money, and revolutionize their businesses overnight. Today, the platform operates in more than 45 countries and powers more than 200 of the world's largest cloud marketplaces, managing mo...
I spend a lot of time helping organizations to “think like a data scientist.” My book “Big Data MBA: Driving Business Strategies with Data Science” has several chapters devoted to helping business leaders to embrace the power of data scientist thinking. My Big Data MBA class at the University of San Francisco School of Management focuses on teaching tomorrow’s business executives the power of analytics and data science to optimize key business processes, uncover new monetization opportunities an...