GTSI restates earnings, prevents delisting

GTSI Corp. is back in Nasdaq's good graces after it caught up last month with its financial filings with the Securities and Exchange Commission.

The Chantilly, Va.-reseller restated results for 2003, 2004 and 2005. It also filed results for the first three quarters of 2006.

With those filings, Nasdaq's Listing Qualifications Panel said that the company meets the requirements for listing on the stock market. Nasdaq had been threatening to delist the company because it had not made its filings with the SEC.

The restatements are due in part to changes in the accounting of lease sales agreements, which is a growing business for GTSI. The company said it often leases IT products and services to government agencies and then sells those leases to third parties. The company can repurchase the leases under some circumstances.

In the restatement, GTSI said its revenue dropped from about $1.1 billion in 2004 to $882 million in 2005. Previously, 2005 revenue had been stated as $886.3 million. Net income fell from a profit of $10.1 million in 2004 to a loss of $13.7 million in 2005. Previously, GTSI said that net income fell from a profit of $10.3 million in 2004 to a $16 million loss in 2005.

Quarterly results for 2006 show that the company's revenues continue to drop. For the first nine months of 2006, revenue was $570.8 million compared to $603.2 million in the first nine months of 2005. The company also reported a loss of $12.5 million for the first nine months of 2006, compared to $8.8 million loss in 2005.

GTSI's stock closed at $8.89 on Jan. 3, down 34 cents.

The company ranks No. 27 on Washington Technology's 2006 Top 100 list of the largest federal IT contractors.