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US - CTG revenue falls 5%

February 25 2014

CTG (NASD: CTG), a Buffalo, N.Y.-based information technology services company, reported fourth-quarter revenue fell 4.8 percent year over year to $102.7 million. Staffing revenue edged down 0.5 percent to $62.3 million in the fourth quarter, while solutions revenue fell 10.7 percent to $40.4 million.

Net income fell 23.9 percent year over year to $3.7 million in the fourth quarter; however, last year’s results included a non-operational gain of $800,000 from life insurance proceeds.

“Fourth quarter earnings were within our guidance range and the operating margin of 5.9 percent was at the same level as last year’s fourth quarter despite lower revenue,” said Chairman and CEO James R. Boldt. “Disciplined cost control and the favorable effect from higher margin engagements in both our staffing and solutions business helped to offset the unfavorable impact of lower revenue in our healthcare business on earnings.”

Shares rose 1.69 percent in morning trading to $15.70 and the firm had a market cap of $291.91 million, according to Yahoo!

European revenue — which includes the February 2013 acquisition of Belgium-based health IT services provider etrinity in 2013 — rose 14.2 percent to $20.9 million in the fourth quarter.

Gross margin was unchanged from the year-ago fourth quarter at 21.7 percent.

For full-year 2013, CTG reported revenue fell 1.3 percent to $419.0 million and net income fell 3.0 percent to $15.7 million. Net income for 2012 included the effect of gains of $1.3 million from life insurance proceeds paid to the company in 2012.

The company expects first-quarter revenue of between $98 million and $100 million, down 9 percent at the range midpoint because of muted spending from healthcare providers.

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