GTSI ends quarter, year with steep revenue declines

GTSI Corp. on March 29 reported $109.3 million in fourth-quarter 2011 revenue, a decline of 43.2 percent compared to $192.5 million for the fourth quarter 2010.

For the year, the company reported revenue of $356.7 million compared to $666.7 million for 2010, a 46.5 percent decline. Operating expenses declined $16.8 million, or 19.1 percent, to $70.9 million.

Gross margin for the 12 months ending December 31, 2011 decreased $17.9 million to $62.4 million, or 22.4 percent, when compared to full year results for 2010, according to the company statement.

“Although I am not satisfied with the overall results for the year, there are a number of positive and encouraging trends evident in the fourth quarter,” GTSI CEO Sterling Phillips said on a March 29 conference call.

He said the revenue decline was due to the “turmoil in our sales force following the SBA suspension in fourth quarter of 2010.”

Phillips said the company experienced an 86 percent turnover in its sales force in 2011 that led to a number of adverse consequences.

“We think we have worked through the turnover issues of 2011 and enter 2012 with a solid sales operation sized appropriately for the market,” he said.

“2011 results reflect a company both recovering from the significant adverse impacts of the SBA’s [Small Business Administration's] action in October of 2010, while at the same time trying to improve the market,” Peter Whitfield, GTSI's senior vice president and CFO, told listeners on the call.

According to the GTSI statement, gross margin for 2011 is 17.5 percent compared to 12.1 percent for 2010.

Gross margin for the fourth quarter of 2011 decreased to $17.9 million from $19.6 million, a reduction of 8.6 percent from the same period in 2010.

Gross margin for the fourth quarter was 16.4 percent compared to 10.2 percent for the same quarter last year.

Operating expenses for the fourth quarter declined $6.0 million, or 25.7 percent, to $17.2 million compared to $23.2 million for the fourth quarter of 2010.

The resulting $0.7 million income from operations is a $4.3 million improvement from the $3.6 million loss from operations reported for the fourth quarter of 2010.

As a result of the third-quarter sale of GTSI’s equity interest, equity earnings from GTSI's investment in Eyak Technology LLC declined $1.9 million.

Net income for the fourth quarter of 2011 was $0.4 million, compared to a net loss of $1.0 million for the same period in 2010.

Net income for 2011 was $0.5 million compared to a net loss of $0.9 million for 2010.

GTSI ended the fourth quarter with $54.9 million in cash on hand.

GTSI, of Herndon, Va., ranks No. 68 on Washington Technology’s 2011 Top 100 list of the largest federal government contractors.