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Computer Task Group Inc. (NASD: CTGX) first-quarter revenue was within guidance — rising 5.0 percent to $108.5 million. However, the IT solutions firm reported growth in its healthcare vertical was muted — it has not yet seen the impact of three new electronic medical records projects set to begin in the second quarter.
Chairman CEO James Boldt said in a press release the company expects growth in EMR business this year from the three upcoming projects as well as from 15 significant EMR projects now under way, in addition to other new business.
The Buffalo, N.Y.-based firm also expects growth in its ICD-10 business during the remainder of the year. ICD-10 is a new set of codes that healthcare providers will begin using to classify diseases and healthcare problems. CTG reported it began an ICD-10 project in the first quarter and expects to begin two large ICD-10 projects in the second quarter.
Healthcare IT revenue represented 32 percent of CTG’s total revenue in the first quarter, up from 31 percent in the same quarter last year.
In terms of total revenue, CTG reported growth in both the staffing and solutions sides of its operations. First-quarter staffing revenue rose 5.1 percent to $65.8 million. “Revenue in our staffing business was bolstered in the quarter by increased demand for technical resource as clients are becoming more confident in the sustainability of the domestic and global economic recovery,” Boldt said.
Solutions revenue rose 4.7 percent in the first quarter to $42.7 million.
First-quarter gross margin narrowed to 20.8 percent from 21.1 percent in the year-ago quarter. However, CTG reported net income rose 20.7 percent to $4.1 million.
Computer Task Group Inc. (NASD: CTGX)
For the first quarter ended March 29, 2013, compared with the same period in the previous year.
Revenue: $108.5 million, +5.0 percent
Net income: $4.1 million, +20.7 percent