CTG (NASD: CTG), a Buffalo, N.Y.-based information technology services company, reported first-quarter revenue edged down 0.4% year over year to $97.5 million, just below midpoint of guidance. The company reported lower margins on healthcare solutions revenue and a shift in business mix to a higher proportion of lower margin staffing business.

Net income fell 60.0% in the first quarter to $1.3 million and gross margin narrowed to 17.8% from 21.4% in the prior year’s first quarter.

CTG this month named former Dell exec Cliff Bleustein as president, CEO and a board member; former CEO James Boldt died in October.

Quote

“There are numerous existing and evolving opportunities in the US healthcare market as providers and payers move to a results-oriented system,” Bleustein said. “Our staffing business is growing once again and CTG is a recognized leader in managed staffing services. Our European operations are performing well in a very competitive environment. The company has a stellar reputation in the markets it serves, a strong balance sheet, and an experienced management team supported by a talented group of employees. These are all the factors that attracted me to CTG.”

Bleustein concluded, “While I believe CTG's basic fundamentals are sound, I plan to review and modify the business unit strategies as necessary during the next few months to ensure the company is properly positioned to take advantage of the appropriate market opportunities and improve profitable growth and value creation for our shareholders.”

Revenue by segment and geography

Guidance

CTG expects first-quarter revenue of between $93 million and $95 million, down 6% at the range midpoint compared to the year-ago quarter. For full-year 2015, CTG now expects revenue of between $375 million and $389 million, down 3% year over year at the range midpoint.

Share price and market cap

Shares in CTG rose 4.64% in late morning trading to $7.90. The firm had a market cap of $141.79 million, according to Yahoo!