Briefing: Oct. 24, 2013

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CTG revenue falls 5%

Computer Task Group Inc. (NASD: CTG), a Buffalo, N.Y.-based information technology services company, reported third-quarter total revenue fell 5.4 percent year over year to $100.7 million.

Chairman and CEO James Boldt said in a press release the company’s healthcare business declined from last year because a number of hospital clients are postponing system investments while they determine how to adjust their cost structure to deal with lower reimbursements due to the U.S. federal budget sequestration.

“While the federal budget sequestration is affecting revenue growth from healthcare providers in the short term, we also know that hospitals must invest in EMR systems to comply with health reform mandates and to lower costs in order to remain competitive and financially viable in a rapidly changing business environment,” Boldt said.

Staffing revenue was $60.7 million in the third quarter, down 2.4 percent from $62.2 million in the same quarter last year. Solutions revenue fell 9.5 percent to $40.0 million from $44.2 million in last year’s third quarter.

CTG’s European revenue rose 11.6 percent year over year to $18.2 million; the company attributed the increase to growth in its financial services practice and the addition of etrinity, the Belgium-based health IT services provider acquired in February 2013.

Third-quarter gross margin narrowed to 21.0 percent from 21.7 percent in the year-ago quarter. Net income rose 1.3 percent year over year to $3.9 million in the third quarter.
Computer Task Group Inc. (NASD: CTG)
For the third quarter ended Sept. 27, 2013, compared with the same period in the previous year.
Revenue: $100.7 million, -5.4 percent
Net income: $3.9 million, +1.3 percent

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