GTSI / GTSI

About GTSI

2553 Dulles View Drive, #100, Herndon, Va. 20171
www.gtsi.com | 703-502-2000 | Founded: 1983

Industry: Government And Professional Services | Category: Public Companies

GTSI did some soul-searching in 2005, as the business model it had relied on for 23 years began to show significant cracks.
GTSI's bread and butter is selling technology equipment, such as laptop computers and printers, to government agencies, but that business has been squeezed as the federal government increasingly buys its wares directly from the product manufacturers.
In February the board of directors replaced long-time chief executive Dendy Young, who had led the company since 1995, with Jim Leto, former chief executive of government software giant PRC Inc. Young continues to serve as GTSI's chairman.
The executive shift is part of an effort to move away from reselling toward becoming a service-oriented company. Though GTSI is not abandoning the reseller business altogether, it is trying to pick up more work customizing and integrating technology systems for federal agencies.
The company announced a 10 percent staff reduction in February 2005 on top of a 10 percent cut four months earlier. In the second round, it cut 80 employees, bringing its payroll down to 700.
In March the company told investors it received a default note from one of its lenders but later worked out an agreement to ensure that it could continue that line of credit until the end of May as it seeks new financing.
The company also said its financial statements for the quarters ended in June and September 2005 could not be relied on because of concerns over "revenue recognition" and a "reduction in the cost basis" of inventory. It requested an extension from the Securities and Exchange Commission in filing its results for 2005.
In April, it reported those grim results, including a drop of nearly 18 percent in yearly revenue compared with 2004. It also disclosed that its accountants at Ernst & Young LLP had informed the company that there was "substantial doubt" that GTSI could continue as a going concern. It ended the year with just $22,000 in cash, down from $397,000 a year earlier.

CEO: Jim Leto

CFO: Peter Whitfield

2005 Financial Data

Revenues: $886,263,000 | Net Income: $-15,999,000
Asssets: $306,657,000 | Earnings Per Share: $-1.74
Total employees: 700 | Local employees: 600