BUFFALO, N.Y., July 25 /PRNewswire-FirstCall/ -- CTG (NASDAQ:CTGX),
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 DATASOURCE: CTG CONTACT:
James R. Boldt, Chairman & Chief Executive Officer of CTG,
+1-716-887-7244 Web site: http://www.ctg.com/
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