CHICAGO, Nov. 10 /PRNewswire-FirstCall/ -- Technology Solutions
Company (TSC) (NASDAQ:TSCCD), a leading consulting firm delivering
specialized technology-enabled business solutions, today announced
third quarter financial results. On Oct. 14, 2005, TSC announced a
one-for-twenty reverse stock split that became effective on Oct.
25, 2005. Accordingly, the per share amounts for the third quarter
do not reflect this reverse split. On Oct. 25, 2005, TSC's common
stock began trading under the symbol "TSCCD" for 20 trading days to
designate trading on a post-split basis. Third Quarter Metrics --
Revenues before reimbursements were $9.3 million, compared with
$7.7 million for the same quarter a year ago; net loss was $1.1
million, or ($0.02) per share vs. a loss of $2.6 million or ($0.06)
per share in the third quarter of 2004. -- Utilization was 68
percent as compared to 65 percent in the second quarter of 2005. --
Nine new clients and 38 new projects from new and existing clients
were acquired, as compared to 18 new clients and 53 new projects
from new and existing clients in the second quarter of 2005. -- In
total, there were 99 projects at 61 clients during the third
quarter, as compared to 121 projects at 82 clients in the second
quarter. -- Annualized voluntary turnover was 37 percent, as
compared to 34 percent in the second quarter of this year. -- Days
sales outstanding were 67 days at Sept. 30, 2005 as compared to 60
days in the second quarter of 2005. -- Total headcount at Sept. 30,
2005 was 192 compared to 213 at June 30, 2005. -- The cash and cash
equivalents balance at Sept. 30, 2005 was $21 million. Third
Quarter Results Revenues before reimbursements for the quarter
ended Sept. 30, 2005 were $9.3 million. Third quarter net loss was
$1.1 million or ($0.02) per share. The results were in line with
the company's guidance of $9.0 million to $10.0 million in
revenues; however, the loss for the quarter was smaller than the
expected $1.5 million at the high end of the revenues range ($0.03
per share) to $2.5 million ($0.05 per share) at the low end.
Business Commentary and Fourth Quarter Outlook Michael R. Gorsage,
president and CEO, stated, "We continue to head in the right
direction to achieve profitability as evidenced by our
significantly lower net loss this quarter. This is a result of our
improvements in a number of key metrics including increased
revenues, higher utilization and decreased costs. In addition, our
cash position was stronger than anticipated. During the quarter we
added a number of new clients such as Banta Corporation, Maritz
Travel, the Chicago Board of Trade, Mine Safety Appliances Company
(MSA), and the U.S. member companies of the AEGON Group, and
continued to experience growth in our key practice areas most
notably healthcare and financial services. In addition to gaining
new clients, we expanded our relationships with a number of
existing clients, a testimony to the value our consultants bring to
client engagements. TSC is benefiting from its new leadership team,
our efforts to focus on building deeper relationships with clients,
and our decision to concentrate on key competencies: enterprise
application services, customer relationship management and business
technology." Fourth Quarter 2005 Expectations The Company is
forecasting revenues before reimbursements for the fourth quarter
of 2005 to be in the range of $8.9 million to $9.9 million. The
Company expects fourth quarter results to range from a loss of
approximately $0.3 million at the high end of the revenues range to
$1.3 million at the low end of the revenues range which on a
pre-reverse split basis would range from ($0.01) per share to
($0.03) per share. On a post-reverse split basis the loss would
range from ($0.13) per share to ($0.55) per share. (Note that loss
amounts are shown with no anticipated tax benefit.) Depending on
revenues and cash collections, the Company expects to end the
fourth quarter with a cash balance of approximately $19 million to
$20 million. "The transformation process at TSC is nearly complete
and should be finished by early next year," Gorsage said. "At the
end of the process, TSC will be stronger operationally and
well-positioned to capitalize on the growth potential of our key
areas -- manufacturing, healthcare, consumer & retail, and
financial services -- where we continue to see significant
opportunities and a growing pipeline. We will continue to focus our
efforts on revenue generation through the acquisition of new
clients, as well as expanding our relationships with existing
clients. We remain thoroughly committed to achieving breakeven,
then sustained profitability and consistent revenue growth."
Conference Call The Company will also host a conference call to
further discuss its third quarter operating results on Friday, Nov.
11, 2005 at 8 a.m. (CST). The dial- in number for the call is
800-835-9927. For international participants, the dial-in number is
312-461-0953. The conference call will also be available live via
the Internet in the Investors section of TSC's Web site at
http://www.techsol.com/ . It is recommended that participants using
the Web access the site at least 15 minutes before the conference
call begins to download and install any necessary audio software.
The call can also be heard online at
http://www.firstcallevents.com/ . For those who cannot access the
live broadcast, a replay of the call will be available until
midnight CST on Nov. 25, 2005 by dialing 800-839-6713. The passcode
for the replay is 7428847. About TSC Technology Solutions Company
(TSC) is a leading consulting firm delivering specialized
technology-enabled business solutions. The Company's specialization
is applying knowledge, derived from the intersection of industry
expertise with technology and process capabilities, to business
issues and problems. TSC serves the manufacturing, healthcare,
consumer & retail, and financial services industries with
targeted solutions in enterprise applications, customer
relationship management (CRM) and business technology. Through this
specialization, TSC can promise its clients A-Team
resources-seasoned, collaborative and business-benefit driven.
Since 1988 TSC teams have delivered thousands of IT strategy,
planning and implementation solutions to Fortune 1000 companies
throughout North America. For more information, please visit
http://www.techsol.com/ . CERTAIN FORWARD-LOOKING STATEMENTS AND
FACTORS THAT MAY AFFECT FUTURE RESULTS This press release contains
or may contain certain forward-looking statements concerning the
Company's financial position, results of operations, cash flows,
business strategy, budgets, projected costs and plans and
objectives of management for future operations, as well as other
statements. Forward-looking statements may be preceded by, followed
by or include the words "may," "will," "should," "could," would,"
"potential," "possible," "believe," "expect," "anticipate,"
"intend," "plan," "estimate," "hope," "project," and other similar
expressions. These forward-looking statements involve significant
risks and uncertainties. Although the Company believes that the
expectations reflected in such forward-looking statements are based
on reasonable assumptions, readers are cautioned that no assurance
can be given that such expectations will prove correct and that
actual results and developments may differ materially from those
conveyed in such forward-looking statements. The company claims the
protection of the safe harbor for forward- looking statements
contained in the Private Securities Litigation Reform Act of 1995
for all forward-looking statements. Factors which could cause
actual financial and other results to differ materially from any
results that the Company might project, forecast, estimate or
budget in the forward-looking statements in this press release
include, but are not limited to, the Company's ability to
successfully introduce new service offerings, the Company's ability
to manage the pace of technological change including its ability to
refine and add to its service offerings to adapt to technological
changes, the Company's ability to manage the current downturn in
its business and in its industry and changes in the economy, the
Company's ability to manage its current decreased revenue levels,
the Company's ability to attract new business and increase
revenues, the Company's ability to attract and retain employees,
the limited level of options available for grants to attract new
employees and to retain existing employees, the Company's ability
to accommodate a changing business environment, general business
and economic conditions in the Company's operating regions, market
conditions and competitive factors, the Company's dependence on a
limited number of clients and the potential loss of significant
clients, the Company's ability to continue to attract new clients
and sell additional work to existing clients, and the Company's
ability to manage costs and headcount relative to expected
revenues, all as more fully described herein and in the Company's
periodic reports filed with the Securities and Exchange Commission
from time to time. Forward-looking statements are not guarantees of
performance. Forward-looking statements speak only as of the date
on which they are made and, except as may be otherwise required by
law, the Company does not undertake any obligation to update any
forward-looking statement to reflect subsequent events or
circumstances. If the Company does update or correct one or more
forward- looking statements, readers, investors and others should
not conclude that the Company would make additional updates or
corrections with respect thereto or with respect to other
forward-looking statements. The outcomes expressed or implied in
these forward-looking statements could be affected by many
important factors. Actual results may vary materially. TECHNOLOGY
SOLUTIONS COMPANY consolidated statements of OPERATIONS (In
thousands, except per share data) For the Three Months For the Nine
Months Ended September 30, Ended September 30, 2005 2004 2005 2004
(unaudited) (unaudited) REVENUES: Revenues before reimbursements
$9,347 $7,741 $28,341 $24,043 Reimbursements 1,213 1,071 3,762
3,220 10,560 8,812 32,103 27,263 COSTS AND EXPENSES: Project
personnel 5,487 4,992 18,516 15,713 Other project expenses 1,706
1,442 6,103 4,184 Reimbursable expenses 1,213 1,071 3,762 3,220
Management and administrative support 3,224 3,948 11,818 10,735
Intangible asset amortization 253 - 765 - Goodwill and intangible
asset impairment - - 679 - Restructuring and other charges
(credits) - - 1,674 (579) Gain on litigation settlement - - (2,722)
- Incentive compensation - 233 - 789 11,883 11,686 40,595 34,062
OPERATING LOSS (1,323) (2,874) (8,492) (6,799) OTHER INCOME: Net
investment income 247 279 607 594 LOSS BEFORE INCOME TAXES (1,076)
(2,595) (7,885) (6,205) INCOME TAX PROVISION - - - - NET LOSS
$(1,076) $(2,595) $(7,885) $(6,205) BASIC NET LOSS PER COMMON SHARE
$(0.02) $(0.06) $(0.17) $(0.15) WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING 47,023 40,875 46,936 40,851 DILUTED NET LOSS PER
COMMON SHARE $(0.02) $(0.06) $(0.17) $(0.15) WEIGHTED AVERAGE
NUMBER OF COMMON AND COMMON EQUIVALENT SHARES OUTSTANDING 47,023
40,875 46,936 40,851 NOTE: The share and per share amounts do not
reflect the reverse stock split that became effective on October
25, 2005. TECHNOLOGY SOLUTIONS COMPANY CONSOLIDATED Balance sheets
(In thousands, except share data) Sept. 30, December 31, 2005 2004
(unaudited) ASSETS CURRENT ASSETS: Cash and cash equivalents
$20,951 $30,032 Receivables, less allowance for doubtful
receivables of $72 and $73 7,840 6,182 Other current assets 945 708
Total current assets 29,736 36,922 COMPUTERS, FURNITURE AND
EQUIPMENT, NET 332 509 GOODWILL 7,298 7,884 INTANGIBLE ASSETS, NET
1,232 2,090 LONG-TERM RECEIVABLES AND OTHER 3,614 5,679 Total
assets $42,212 $53,084 LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT
LIABILITIES: Accounts payable $1,054 $960 Line of Credit - 649
Accrued compensation and related costs 3,665 4,987 Restructuring
accruals 589 696 Other current liabilities 2,743 3,998 Total
current liabilities 8,051 11,290 COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY: Preferred stock - - Common stock, shares
issued - 50,533,970; shares outstanding - 47,092,548 and 46,851,460
505 505 Capital in excess of par value 127,378 127,583 Stock based
compensation 89 - Accumulated deficit (89,167) (81,282) Treasury
Stock, at cost, 3,441,422 and 3,682,510 shares (4,875) (5,217)
Accumulated other comprehensive income: Cumulative translation
adjustment 231 205 Total stockholders' equity 34,161 41,794 Total
liabilities and stockholders' equity $42,212 $53,084 NOTE: The
share amounts do not reflect the reverse stock split that became
effective on October 25, 2005. DATASOURCE: Technology Solutions
Company CONTACT: George Huhta of Technology Solutions Company,
+1-312-228-4760, Web site: http://www.techsol.com/
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