EX-99 3 exhibit_99.htm EXHIBIT 99 N E W S R E L E A S E

N E W S  R E L E A S E

CONTACT:
Gregory M. Dearlove
Senior Vice President & Chief Financial Officer
(716) 887-7262

CTG Reports 2003 Third Quarter Financial Results
EPS
increases in the third quarter versus last year

BUFFALO, N.Y. - October 13, 2003 - CTG (NYSE: CTG), an international information technology (IT) solutions and staffing company, today announced its financial results for the third quarter of 2003, which ended on September 26, 2003. CTG's revenues for the third quarter of 2003 were $61.1 million, compared with revenues of $62.1 million in the third quarter of 2002. CTG's net income for the third quarter of 2003 was $0.3 million, or $0.02 per diluted share, compared with net income for the 2002 third quarter of $0.1 million, or $0.01 per diluted share.

For the first three quarters of 2003, CTG reported revenues of $189.1million, compared with revenues of $199.7 million in the first three quarters of 2002. CTG's net income for the first three quarters of 2003 was $0.9 million, or $0.06 per diluted share, compared with a net loss for the first three quarters of 2002 of $35.8 million, or $2.11 per diluted share, which included the charge of $37.0 million or $2.19 per diluted share for the cumulative effect of the change in accounting principle related to the valuation of the Company's goodwill and intangible assets.

"CTG's earnings per share for the third quarter increased over last year on slightly lower revenues and were within the range of our guidance provided in July." said CTG Chairman and Chief Executive Officer James R. Boldt. "Recent indications in the marketplace make us cautiously optimistic a recovery in the technology sector and IT services market may finally be underway. CTG's strategic staffing business, which supports the IT staffing needs of large companies and providers of technology services, has steadily gained strength over the last five quarters. We are also seeing some of the outsourcing and solutions projects delayed by clients beginning to move forward."

Mr. Boldt added, "Our focus on key vertical markets where CTG has significant professional experience continues to provide new opportunities for growth. Our life sciences practice, which we launched earlier this year, is off to a very strong start with several new clients that sell FDA-regulated products engaging CTG to support 21 CFR Part 11 compliance work. Demand for health care IT remains strong with a major multi-year outsourcing engagement signed during the quarter and a strong pipeline of other new work expected to begin over the next few quarters. During the quarter, CTG's retail solutions group secured a significant engagement to automate promotional discounts and vendor allowances for a major national retailer."

CTG's long-term debt at the end of the 2003 third quarter was $6.9 million, compared to $7.6 million at the end of the 2003 second quarter and $13.2 million a year ago. This represents the lowest level of debt the company has had since it acquired Elumen Solutions in early 1999. CTG anticipates further reductions in debt in the fourth quarter of the year.

CTG also issued guidance for the fourth quarter of 2003. Based on current business and market conditions, CTG expects that its revenues and net income per diluted share for the fourth quarter of 2003 will range from $63 million to $65 million and $0.02 to $0.04, respectively.

Mr. Boldt concluded, "Our guidance for the fourth quarter anticipates a continuation of the demand trends we are experiencing in our existing business and an increasing level of optimism about market conditions. We see the improvement in our staffing business and the recent increased market spending on technology hardware as indications of the beginning of a recovery in IT services. We are also seeing renewed proposal activity in our application management outsourcing offering. With a strong balance sheet and a strategy that plays to both our strengths and market opportunities, CTG is well positioned to benefit from a recovering technology sector."

Backed by 37 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 2,700 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 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 2002 Form 10-K and Management's Discussion and Analysis section of the Company's 2002 annual report, which are incorporated by reference. The Company assumes no obligation to update the forward-looking information contained in this release.

CTG will hold a conference call on October 14, 2003 at 11:00 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 1-800-869-4362 between 10:45 AM and 10:50 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 October 14, 2003 and 1:00 PM Eastern Time October 16, 2003 by dialing 1-800-642-1687 and entering the conference ID number 3067602.

 

 

COMPUTER TASK GROUP, INCORPORATED (CTG)
Consolidated Statements of Operations
(amounts in thousands except per share data)

 

     For the Quarter Ended   For the Three Quarters Ended  
    
September 26,
2003
 
 September 27,
 2002
 
 September 26,
 2003
 
 September 27,
 2002
 

  

               
Revenue   $             61,141   $

$ 62,149  

$

 189,060   $       199,710  
Direct costs      44,757      45,250      138,745            144,385  
Selling, general and administrative expenses    
 15,588  
 
 16,399  
 
 47,862  
 
 51,716
 
Operating income      796      500      2,453      3,609  
Net other expense    
 210  
 
 267  
 
 853  
 
 1,525
 
Income before income taxes and cumulative effect of change in
    accounting principle  
   586      233      1,600      2,084  
Provision for income taxes    
 246  
 
 92  
 
 672  
 
 823
 
Net income before cumulative effect of change in accounting
     principle  
   340      141      928      1,261  
Cumulative effect of change in accounting principle (a)    
 -  
 
 -  
 
 -  
 
 (37,038
)
Net income (loss)   $
          340  
$
 141  
$
 928  
$
 (35,777
)
Basic net income (loss) per share:                        
Net income before cumulative effect of change in accounting
     principle  
$  0.02   $  0.01   $  0.06   $  0.08  
Cumulative effect of change in accounting principle (a)    
 -  
 
 -  
 
 -  
 
 (2.24
)
Basic net income (loss) per share   $
 0.02  
$
 0.01  
$
 0.06  
$
 (2.16
)
Diluted net income (loss) per share:                        
Net income before cumulative effect of change in accounting
     principle  
$  0.02   $  0.01   $  0.06   $  0.08  
Cumulative effect of change in accounting principle (a)    
 -  
 
 -  
 
 -  
 
 (2.19
)
Diluted net income (loss) per share   $
 0.02  
$
 0.01  
$
 0.06  
$
 (2.11
)
Weighted average shares outstanding:         
Basic      16,677      16,575      16,649      16,555  
Diluted     16,817      16,813      16,765      16,938  

 

     

     

     

     

     

     

     

     

     

     

     

     

 

 

a.   In conjunction with the required adoption of SFAS No. 142 and based upon an independent appraisal, CTG recorded a pre-tax, non-cash loss for impairment of $37.0 million or $2.24 per basic share and $2.19 per diluted share in the 2002 first quarter. The write-off primarily relates to the goodwill that resulted from the acquisition in February 1999 of the healthcare information technology services provider Elumen Solutions, Inc.

 

COMPUTER TASK GROUP, INCORPORATED (CTG)
Consolidated Balance Sheets

(amounts in thousands)

 
Sept. 26,
2003
Sept. 27,
2002
   
Sept. 26,
2003
Sept. 27,
2002
Current Assets:       Current Liabilities:    
Cash and cash equivalents $   2,929

$     866

  Accounts payable

$    8,568

$    5,920

Accounts receivable, net

44,670

46,427

  Accrued compensation

16,269

16,735

Other current assets

2,523

3,820

  Income taxes payable

897

1,799

 
 
 
  Other current liabilities
4,259
5,962

Total Current Assets

50,122

51,113

 

Total Current Liabilities

29,993

30,416

Property and equipment, net

7,664

11,760

  Long-term debt

6,867

13,197

Other assets

40,964

40,267

  Other liabilities

7,667

7,621

 
 
 
  Shareholders' equity
54,223
51,906
   Total Assets
$   98,750
$  103,140
   Total Liabilities and
   Shareholders' Equity
$  98,750
$  103,140

 

- END -

Today's news release, along with CTG news releases for the past year, is available on the Web at www.ctg.com.