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Pomeroy IT Solutions Inc. (NASD: PMRY) said Monday it didn't renew its largest staffing contract. The three-year deal to provide staffing expired June 30 and brought revenue of $65 million to $75 million for the past two years. It did not name the client.
"While we do not take pleasure in seeing a working relationship come to an end, it was not financially prudent for us to pursue the renewal of this contract under the conditions required by the customer," said President and CEO Keith Coogan. "In particular, we would have been required to commit to a greater volume of business while lowering our profit margins from already low levels."
There will be some continuing work under the deal to complete service engagements in progress and let the customer switch to another staffing provider. However, the expiration of the contract will free up $15 million in annualized working capital for Pomeroy.