GTSI Corp. (NASDAQ: GTSI), a systems integration, solutions and services provider to federal, state and local governments, today announced its financial results for the three months ended March 31, 2012.
For the first quarter of 2012, GTSI reported an 8.6% increase in total revenue to $76.4 million compared to $70.3 million for the first quarter of 2011. Total gross margin for the first quarter of 2012 decreased $1.4 million to $11.6 million, a reduction of 11.0%, from the same period in 2011. Gross margin percent for the first quarter was 15.1% compared to 18.5% for the same quarter last year. Operating expenses declined $3.2 million or 17.8% to $15.1 million compared to $18.3 million for the first quarter of 2011. The resulting loss from operations of $3.5 million is a $1.8 million improvement from the $5.3 million loss from operations reported for the first quarter of 2011. Equity earnings from our investment in Eyak Technology LLC (EyakTek) declined $1.1 million as a result of the sale of our equity interest during the third quarter of 2011. The net loss for the first quarter of 2012 was $2.5 million, an improvement compared to the net loss of $2.7 million for the same period in 2011. Earnings per share improved $0.02 per share or 6.5% compared to the loss per share of $0.28 reported for Q1 2011.
Sterling Phillips, GTSI’s president and chief executive officer, stated, “We are pleased with the year-over-year improvement in revenue and key profitability metrics. Our expanded sales force is showing results and the restructuring over the past year allows us to be more profitable.”
Within overall revenue growth, product revenue improved $1.2 million, services revenue improved $6.7 million and financing revenue declined $1.8 million. The gross margin decline includes a product gross margin reduction of $2.3 million, a services gross margin increase of $2.1 million and a financing gross margin decline of $1.2 million. Within operating expenses, salaries and related expenses declined $2.2 million and professional services expenses declined $0.9 million. The decline in professional services expenses reflects lower fees for lawyers and the monitor related to the SBA administrative agreement. As reported in the 2011 10-K filing, during the quarter we sublet excess space in our headquarters facility which resulted in a one-time charge of $606K which represents the difference between actual rental expense and the $1.3 million in sublease payments expected over the term of the sublease. The expense reduction realized from the sublease will be recognized in future quarters.