Operating margin expanded 110 basis points to 4.9% in fourth quarter
Strong Margin and Earnings Growth Highlight Fourth Quarter Results
Revenue, operating income, net income, and diluted net income per share for the 2010 fourth quarter as compared with the 2009 fourth quarter were as follows:
|
Dec. 31, |
Dec. 31, |
$ |
% |
|||||||||
| Revenue | $ | 87,313 | $ | 67,653 | $ | 19,660 | 29.1% | |||||
| Operating income | $ | 4,235 | $ | 2,570 | $ | 1,665 | 64.8% | |||||
| Net income | $ | 2,654 | $ | 1,630 | $ | 1,024 | 62.8% | |||||
| Diluted net income per share | $ | 0.16 | $ | 0.10 | $ | 0.06 | 60.0% |
The Company's operating margin in the 2010 fourth quarter was 4.9%, a
110 basis point increase from 3.8% in the 2009 fourth quarter. A
research and development tax credit added
"CTG's fourth quarter performance was very strong topping off an
excellent year marked by a robust return to double digit revenue and
earnings growth," CTG Chairman and Chief Executive Officer
Mr. Boldt added, "The profitability of CTG's business expanded significantly in 2010 with our operating margin in the fourth quarter 110 basis points higher than last year. The growth in healthcare solutions work, particularly EMR projects, combined with the operating leverage from revenue growth, are driving this higher level of profitability that we expect to carry over into 2011. We are currently working on 13 significant EMR engagements, and were notified in the first quarter of 2011 that we had won four additional projects."
2010 Fourth Quarter Review
Solutions revenue in the 2010 fourth quarter increased 41%, or
Selling, general, and administrative (SG&A) expenses were
The Company recorded equity-based compensation expense, net of tax, of
CTG's effective tax rate was 37% and 36%, respectively, in the 2010 and
2009 fourth quarters. The Company's tax rate in the 2010 fourth quarter
was favorably affected by the U.S. federal Research and Development
Credit which increased net income by approximately
Cash provided by operations in the 2010 fourth quarter increased to
2010 Full Year Review
Results for the 2010 full year reflect the same trends seen in the fourth quarter.
Revenue, operating income, net income, and diluted net income per share for 2010 as compared with 2009 were as follows:
|
2010 |
2009 |
$ |
% |
|||||||||
| Revenue | $ | 331,407 | $ | 275,560 | $ | 55,847 | 20.3% | |||||
| Operating income | $ | 13,930 | $ | 9,889 | $ | 4,041 | 40.9% | |||||
| Net income | $ | 8,372 | $ | 5,933 | $ | 2,439 | 41.1% | |||||
| Diluted net income per share | $ | 0.52 | $ | 0.38 | $ | 0.14 | 36.8% |
The Company's operating margin in 2010 expanded by 60 basis points to
4.2% from 3.6% in 2009. In 2010, CTG's solutions business increased 22%
to
Selling, general, and administrative expenses were
Stock Repurchase Program
The Company repurchased 59,000 of its shares at an average price of
Reflecting continued confidence in the Company's future prospects, CTG's Board of Directors approved a new 1.0 million share repurchase authorization announced today. Combined with this new authorization, approximately 1.2 million shares are currently available for repurchase by the Company.
2011 Guidance Reflects Another Year of Double-digit Revenue and Earnings Growth
CTG is issuing initial guidance for 2011 based on its current business
activity and forecast, and assuming that growth in its healthcare
business will accelerate as demand for EMR support increases and that
its U.S. staffing business will continue to grow but at a lower rate
than 2010. Reflecting these assumptions, CTG expects its 2011 first
quarter revenue to range from
CTG expects that its 2011 revenue will range from
Mr. Boldt commented, "Strategically and financially, CTG is on an
excellent course. Our vertical market strategy with a focus on the
healthcare market produced a five year compound annual growth rate of
30% in earnings per share during a challenging time for the IT services
industry and a major global recession. In 2010, CTG grew at a rate well
above the IT services industry reinforcing our position as a growth
company in our industry. Our business mix is starting to shift to a
higher level of solutions work and that is reflected in the expansion of
our margins in 2010. We also ended the year with no debt and
Mr. Boldt continued, "Given our strength in this category and the deadlines for federal stimulus incentives for implementing electronic health record systems, EMRs are clearly our best opportunity to grow CTG's business, earnings, and value over the next few years. We will also continue to sell and build our portfolio of medical informatics and data analytics solutions to enhance our mix of higher margin solutions work and long-term growth prospects. Our strategy, results, and the strength of our business continue to point CTG in the direction of strong and increasingly profitable growth."
About CTG
CTG develops innovative IT solutions to address the business needs and
challenges of companies in several higher-growth industries including
healthcare, energy, and technology services. As a leading provider of IT
and business consulting solutions to the healthcare market, CTG offers
hospitals, physician groups, and regional health information exchanges a
full range of electronic medical record services. Additionally, CTG has
developed for the healthcare provider and payer markets unique,
proprietary software solutions that support better and lower cost
healthcare. CTG also provides managed services IT staffing for major
technology companies and large corporations. Backed by nearly 45 years'
experience, proprietary methodologies, and an ISO 9001-certified
management system, CTG has a proven track record of delivering
high-value, industry-specific solutions. CTG's 3,400 IT professionals
are based in an international network of offices in
Safe Harbor Statement
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 2009 Form 10-K, which is incorporated by reference. The Company assumes no obligation to update the forward-looking information contained in this release.
Conference Call and Webcast
CTG will hold a conference call on
A webcast of the call will be available on CTG's web site: http://www.ctg.com. The webcast will also be archived on CTG's web site at http://investor.ctg.com/events.cfm for 90 days following completion of the conference call.
Financial statements follow.
|
COMPUTER TASK GROUP, INCORPORATED (CTG) Condensed Consolidated Statements of Income (Unaudited) (amounts in thousands except per share data) |
|||||||||||
| For the Quarter Ended | For the Year Ended | ||||||||||
|
Dec. 31, 2010 |
Dec. 31, 2009 |
Dec. 31, 2010 |
Dec. 31, 2009 |
||||||||
| Revenue | $ | 87,313 | $ | 67,653 | $ | 331,407 | $ | 275,560 | |||
| Direct costs | 68,152 | 52,667 | 260,172 | 213,701 | |||||||
| Selling, general and administrative expenses | 14,926 | 12,416 | 57,305 | 51,970 | |||||||
| Operating income | 4,235 | 2,570 | 13,930 | 9,889 | |||||||
| Other expense, net | (2) | (4) | (161) | (213) | |||||||
| Income before income taxes | 4,233 | 2,566 | 13,769 | 9,676 | |||||||
| Provision for income taxes | 1,579 | 936 | 5,397 | 3,743 | |||||||
| Net income | $ | 2,654 | $ | 1,630 | $ | 8,372 | $ | 5,933 | |||
| Net income per share: | |||||||||||
| Basic | $ | 0.18 | $ | 0.11 | $ | 0.57 | $ | 0.40 | |||
| Diluted | $ | 0.16 | $ | 0.10 | $ | 0.52 | $ | 0.38 | |||
| Weighted average shares outstanding: | |||||||||||
| Basic | 14,674 | 14,732 | 14,697 | 14,808 | |||||||
| Diluted | 16,287 | 15,944 | 16,073 | 15,549 | |||||||
|
COMPUTER TASK GROUP, INCORPORATED (CTG) Condensed Consolidated Balance Sheets (Unaudited) (amounts in thousands) |
|||||||||||||
|
Dec. 31, 2010 |
Dec. 31, 2009 |
Dec. 31, 2010 |
Dec. 31, 2009 |
||||||||||
| Current Assets: | Current Liabilities: | ||||||||||||
| Cash and cash equivalents | $ | 14,837 | $ | 10,423 | Accounts payable | $ | 6,595 | $ | 7,741 | ||||
| Accounts receivable, net | 57,540 | 45,423 | Accrued compensation | 29,646 | 20,095 | ||||||||
| Other current assets | 3,102 | 3,382 | Other current liabilities | 6,193 | 5,619 | ||||||||
| Total Current Assets | 75,479 | 59,228 | Total Current Liabilities | 42,434 | 33,455 | ||||||||
| Property and equipment, net | 8,364 | 8,146 | Long-term debt | - | - | ||||||||
| Goodwill | 35,678 | 35,678 | Other liabilities | 9,919 | 9,549 | ||||||||
| Other assets | 10,752 | 11,670 | Shareholders' equity | 77,920 | 71,718 | ||||||||
| Total Assets | $ | 130,273 | $ | 114,722 |
Total Liabilities and Shareholders' Equity |
$ | 130,273 | $ | 114,722 | ||||
Today's news release, along with CTG news releases for the past year, is available on the Web at www.ctg.com.
ctgx-e
CTG
Investors and Media:
716-887-7244
or
Investors:
716-888-3634
Source: CTG
News Provided by Acquire Media
