CTG IT Solutions and Services Segments Gross Margin Improved 170 Basis Points to 30.7% in Second Quarter 2023, Cegeka to Acquire CTG for $10.50 Per Share
Cegeka to acquire CTG for $10.50 per share in a cash transaction valued at approximately $170 million. See the separate press release issued earlier today that announced this transaction.
Software Engineering revenue in the second quarter of more than $30 million with gross margin of 32.7%
IT Solutions and Services segments represent 86% of total revenue in the second quarter, CTG’s highest level to date
IT Solutions and Services segments gross margin improved 170 basis points year-over-year
Revenue of $74.6 million reflected intentional disengagement of $15.1 million from non-strategic technology services business
Gross margin improved to 28.1%, or 420 basis points from the prior year
GAAP operating margin was 0.4% in second quarter; non-GAAP operating margin was 3.9%
Net loss was ($0.1) million, with a margin of (0.2)%; adjusted EBITDA was $3.7 million, with a margin of 4.9%
BUFFALO, N.Y., Aug. 09, 2023 (GLOBE NEWSWIRE) -- CTG (Nasdaq: CTG) (“Company”), a leader in North America and Western Europe helping companies employ digital IT solutions and services to drive their productivity and profitability, today reported its financial results for the second quarter ended June 30, 2023.
Filip Gydé, CTG President and CEO, commented, “The sale of CTG to Cegeka is a testament to the significant efforts we have undertaken to drive our transformation strategy to make CTG a pure-play digital IT solutions provider. At CTG, our mission is to drive better, faster results for our clients with high-value digital transformation solutions. In Cegeka, we have found a partner that will enable us to accelerate this important work and we are confident that this transaction with Cegeka is the best outcome for our clients, employees, and shareholders. We are also pleased to have entered into this transaction with Cegeka, which delivers immediate value to our shareholders.”
“We continue to be encouraged by CTG’s successes this quarter, as we execute our strategy, win new engagements and deliver critical solutions for our clients amid the difficult macroeconomic environment,” Mr. Gydé continued. “We have now driven our digital solutions and services business mix to more than 85% of revenue, our highest level to date, and increased the gross margin in our IT Solutions and Services segments by 170 basis points from the prior year quarter. Our second quarter North America IT Solutions and Services segment, including the results of the Eleviant acquisition in late 2022, grew revenue nearly 28%, and achieved gross margins of 40.4%, up 560 basis points from a year ago. Overall, our gross margin in the quarter grew to 28.1%, the highest in company history.”
Consolidated Second Quarter 2023 Review (Narrative compares with prior-year period unless otherwise noted) (unaudited)
($ in thousands) | For the Quarter Ended |
| Change 2022-2023 |
| Change 2021-2022 | ||||||||||||||||||||
| Jun. 30, 2023 |
| Jul. 1, 2022 |
| Jul. 2, 2021 |
| $ |
| % |
| $ |
| % | ||||||||||||
Revenue | $74,588 |
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| $82,759 |
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| $92,164 |
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| $(8,171 | ) |
| (9.9 | )% |
| $(9,405 | ) |
| (10.2 | )% | |||||
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GAAP Gross Profit | $20,995 |
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| $19,750 |
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| $20,379 |
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| $1,245 |
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| 6.3 | % |
| $(629 | ) |
| (3.1 | )% | |||||
GAAP Gross Margin |
| 28.1 | % |
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| 23.9 | % |
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| 22.1 | % |
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GAAP Operating Income | $285 |
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| $3,173 |
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| $2,801 |
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| $(2,888 | ) |
| (91.0 | )% |
| $372 |
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| 13.3 | % | |||||
GAAP Operating Margin |
| 0.4 | % |
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| 3.8 | % |
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| 3.0 | % |
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Non-GAAP Operating Income* | $2,923 |
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| $3,463 |
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| $2,966 |
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| $(540 | ) |
| (15.6 | )% |
| $497 |
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| 16.8 | % | |||||
Non-GAAP Operating Margin* |
| 3.9 | % |
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| 4.2 | % |
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| 3.2 | % |
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GAAP Net Income (Loss) | $(130 | ) |
| $2,040 |
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| $1,833 |
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| $(2,170 | ) |
| (106.4 | )% |
| $207 |
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| 11.3 | % | |||||
GAAP Net Margin |
| -0.2 | % |
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| 2.5 | % |
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| 2.0 | % |
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Non-GAAP Net Income* | $1,923 |
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| $2,252 |
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| $1,952 |
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| $(329 | ) |
| (14.6 | )% |
| $300 |
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| 15.4 | % | |||||
Non-GAAP Net Income Margin* |
| 2.6 | % |
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| 2.7 | % |
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| 2.1 | % |
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Adjusted EBITDA* | $3,692 |
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| $4,224 |
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| $4,096 |
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| $(532 | ) |
| (12.6 | )% |
| $128 |
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| 3.1 | % | |||||
Adjusted EBITDA Margin* |
| 4.9 | % |
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| 5.1 | % |
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| 4.4 | % |
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* A reconciliation of GAAP to non-GAAP information is included in the financial tables below
The decrease in revenue reflects the Company’s continued business mix shift to more solutions and services-based business. As compared with the second quarter of 2022, the Company disengaged from $15.1 million in its lower-margin non-strategic technology services business.
The change in business mix and focus on digital solutions has led to significant improvements in gross margin over the past two years, increasing 600 basis points over that time.
As a percentage of revenue, selling, general and administrative (SG&A) expenses were 27.8% compared with 20.0% in the prior-year period. The increase was primarily due to increases in acquisition-related expenses from the Eleviant acquisition, costs associated with the new ERP implementation, severance, and non-recurring costs related to certain strategic initiatives.
Included in the GAAP net loss was $0.5 million of acquisition-related expenses, $0.4 million of ERP system implementation costs, $0.4 million of severance, and $0.8 million of non-recurring costs related to certain strategic initiatives, while the prior-year period included $0.2 million of acquisition expenses. Loss per diluted share was ($0.01) for the second quarter of 2023 compared with $0.13 for the second quarter of 2022. Excluding these expenses from both periods, non-GAAP earnings per diluted share were $0.13 compared with $0.15.
Second Quarter Segment Performance (unaudited)
IT Solutions and Services
North America
($ in thousands) | For the Quarter Ended |
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| Change 2022-2023 |
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| Change 2021-2022 |
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| Jun. 30, 2023 |
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| Jul. 1, 2022 |
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| Jul. 2, 2021 |
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| $ |
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| $ |
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| % |
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Revenue | $ | 25,997 |
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| $ | 20,339 |
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| $ | 16,762 |
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| $ | 5,658 |
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| 27.8 | % |
| $ | 3,577 |
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| 21.3 | % |
Percent of total |
| 34.8 | % |
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| 24.6 | % |
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| 18.2 | % |
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Gross profit | $ | 10,512 |
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| $ | 7,079 |
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| $ | 6,074 |
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| $ | 3,433 |
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| 48.5 | % |
| $ | 1,005 |
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| 16.5 | % |
Gross margin |
| 40.4 | % |
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| 34.8 | % |
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| 36.2 | % |
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Contribution profit | $ | 5,797 |
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| $ | 3,547 |
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| $ | 2,908 |
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| $ | 2,250 |
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| 63.4 | % |
| $ | 639 |
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| 22.0 | % |
Contribution margin |
| 22.3 | % |
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| 17.4 | % |
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| 17.3 | % |
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The significant growth in revenue and gross margins in North America IT Solutions and Services reflects continued strong contributions from the acquisition of Eleviant, organic growth of approximately 10%, and CTG’s enhanced focus on delivering digital transformation services.
Europe
($ in thousands) | For the Quarter Ended |
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| Change 2022-2023 |
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| Change 2021-2022 |
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| Jun. 30, 2023 |
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| Jul. 1, 2022 |
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| Jul. 2, 2021 |
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| $ |
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| % |
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| $ |
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| % |
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Revenue | $ | 38,393 |
|
| $ | 37,160 |
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| $ | 44,054 |
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| $ | 1,233 |
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|
| 3.3 | % |
| $ | (6,894 | ) |
|
| (15.6 | )% |
Percent of total |
| 51.5 | % |
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| 44.9 | % |
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| 47.8 | % |
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Gross profit | $ | 9,243 |
|
| $ | 9,582 |
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| $ | 10,748 |
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| $ | (339 | ) |
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| (3.5 | )% |
| $ | (1,166 | ) |
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| (10.8 | )% |
Gross margin |
| 24.1 | % |
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| 25.8 | % |
|
| 24.4 | % |
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Contribution profit | $ | 3,955 |
|
| $ | 4,727 |
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| $ | 5,612 |
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| $ | (772 | ) |
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| (16.3 | )% |
| $ | (885 | ) |
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| (15.8 | )% |
Contribution margin |
| 10.3 | % |
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| 12.7 | % |
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| 12.7 | % |
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Europe IT Solutions and Services margins continue to reflect the impact of mandated salary increases at the beginning of the year that are being passed to clients throughout the year.
Non-Strategic Technology Services
($ in thousands) | For the Quarter Ended |
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| Change 2022-2023 |
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| Change 2021-2022 |
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| Jun. 30, 2023 |
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| Jul. 1, 2022 |
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| Jul. 2, 2021 |
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| $ |
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| % |
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| $ |
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| % |
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Revenue | $ | 10,198 |
|
| $ | 25,260 |
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| $ | 31,348 |
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| $ | (15,062 | ) |
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| (59.6 | )% |
| $ | (6,088 | ) |
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| (19.4 | )% |
Percent of total |
| 13.7 | % |
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| 30.5 | % |
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| 34.0 | % |
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Gross profit | $ | 1,240 |
|
| $ | 3,089 |
|
| $ | 3,557 |
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| $ | (1,849 | ) |
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| (59.9 | )% |
| $ | (468 | ) |
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| (13.2 | )% |
Gross margin |
| 12.2 | % |
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| 12.2 | % |
|
| 11.3 | % |
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Contribution profit | $ | 867 |
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| $ | 2,388 |
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| $ | 2,239 |
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| $ | (1,521 | ) |
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| (63.7 | )% |
| $ | 149 |
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|
| 6.7 | % |
Contribution margin |
| 8.5 | % |
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| 9.5 | % |
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| 7.1 | % |
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Continued disengagement from Non-Strategic Technology Services is consistent with the Company’s long-term strategy. Revenue was also negatively impacted by challenging macroeconomic conditions.
Consolidated Year-to-Date Results
(unaudited)
($ in thousands) | For the Two Quarters Ended |
| Change 2022-2023 |
| Change 2021-2022 | ||||||||||||||||||||
| Jun. 30, 2023 |
| Jul. 1, 2022 |
| Jul. 2, 2021 |
| $ |
| % |
| $ |
| % | ||||||||||||
Revenue | $ | 152,790 |
|
| $ | 172,176 |
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| $ | 189,293 |
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| $ | (19,386 | ) |
| (11.3 | )% |
| $ | (17,117 | ) |
| (9.0 | )% |
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GAAP Gross Profit | $ | 41,130 |
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| $ | 40,345 |
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| $ | 41,146 |
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| $ | 785 |
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| 1.9 | % |
| $ | (801 | ) |
| (1.9 | )% |
GAAP Gross Margin |
| 26.9 | % |
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| 23.4 | % |
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| 21.7 | % |
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GAAP Operating Income | $ | 992 |
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| $ | 6,372 |
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| $ | 4,899 |
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| $ | (5,380 | ) |
| (84.4 | )% |
| $ | 1,473 |
|
| 30.1 | % |
GAAP Operating Margin |
| 0.6 | % |
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| 3.7 | % |
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| 2.6 | % |
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Non-GAAP Operating Income* | $ | 5,031 |
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| $ | 6,924 |
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| $ | 5,708 |
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| $ | (1,893 | ) |
| (27.3 | )% |
| $ | 1,216 |
|
| 21.3 | % |
Non-GAAP Operating Margin* |
| 3.3 | % |
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| 4.0 | % |
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| 3.0 | % |
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GAAP Net Income | $ | 185 |
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| $ | 4,280 |
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| $ | 3,341 |
|
| $ | (4,095 | ) |
| (95.7 | )% |
| $ | 939 |
|
| 28.1 | % |
GAAP Net Margin |
| 0.1 | % |
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| 2.5 | % |
|
| 1.8 | % |
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Non-GAAP Net Income* | $ | 3,163 |
|
| $ | 4,691 |
|
| $ | 3,958 |
|
| $ | (1,528 | ) |
| (32.6 | )% |
| $ | 733 |
|
| 18.5 | % |
Non-GAAP Net Income Margin* |
| 2.1 | % |
|
| 2.7 | % |
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| 2.1 | % |
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Adjusted EBITDA* | $ | 6,457 |
|
| $ | 8,555 |
|
| $ | 7,821 |
|
| $ | (2,098 | ) |
| (24.5 | )% |
| $ | 734 |
|
| 9.4 | % |
Adjusted EBITDA Margin* |
| 4.2 | % |
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| 5.0 | % |
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| 4.1 | % |
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* A reconciliation of GAAP to non-GAAP information is included in the financial tables below
Year-to-date Segment Performance (unaudited)
IT Solutions and Services
North America
($ in thousands) | For the Two Quarters Ended |
|
| Change 2022-2023 |
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| Change 2021-2022 |
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| Jun. 30, 2023 |
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| Jul. 1, 2022 |
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| Jul. 2, 2021 |
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| $ |
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| % |
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| $ |
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| % |
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Revenue | $ | 49,193 |
|
| $ | 40,773 |
|
| $ | 35,216 |
|
| $ | 8,420 |
|
|
| 20.7 | % |
| $ | 5,557 |
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|
| 15.8 | % |
Percent of total |
| 32.2 | % |
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| 23.7 | % |
|
| 18.6 | % |
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Gross profit | $ | 19,496 |
|
| $ | 13,941 |
|
| $ | 12,086 |
|
| $ | 5,555 |
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| 39.8 | % |
| $ | 1,855 |
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|
| 15.3 | % |
Gross margin |
| 39.6 | % |
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| 34.2 | % |
|
| 34.3 | % |
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Contribution profit | $ | 9,984 |
|
| $ | 7,278 |
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| $ | 5,763 |
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| $ | 2,706 |
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|
| 37.2 | % |
| $ | 1,515 |
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|
| 26.3 | % |
Contribution margin |
| 20.3 | % |
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| 17.9 | % |
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| 16.4 | % |
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Europe
($ in thousands) | For the Two Quarters Ended |
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| Change 2022-2023 |
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| Change 2021-2022 |
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| Jun. 30, 2023 |
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| Jul. 1, 2022 |
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| Jul. 2, 2021 |
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| $ |
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| $ |
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| % |
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Revenue | $ | 78,486 |
|
| $ | 79,638 |
|
| $ | 90,061 |
|
| $ | (1,152 | ) |
|
| (1.4 | )% |
| $ | (10,423 | ) |
|
| -11.6 | % |
Percent of total |
| 51.4 | % |
|
| 46.3 | % |
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| 47.6 | % |
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Gross profit | $ | 18,567 |
|
| $ | 20,061 |
|
| $ | 21,965 |
|
| $ | (1,494 | ) |
|
| (7.4 | )% |
| $ | (1,904 | ) |
|
| -8.7 | % |
Gross margin |
| 23.7 | % |
|
| 25.2 | % |
|
| 24.4 | % |
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Contribution profit | $ | 8,227 |
|
| $ | 9,978 |
|
| $ | 11,346 |
|
| $ | (1,751 | ) |
|
| (17.5 | )% |
| $ | (1,368 | ) |
|
| -12.1 | % |
Contribution margin |
| 10.5 | % |
|
| 12.5 | % |
|
| 12.6 | % |
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Year-to-date Segment Performance (continued)
Non-Strategic Technology Services
($ in thousands) | For the Two Quarters Ended |
|
| Change 2022-2023 |
|
| Change 2021-2022 |
| |||||||||||||||||||
| Jun. 30, 2023 |
|
| Jul. 1, 2022 |
|
| Jul. 2, 2021 |
|
| $ |
|
| % |
|
| $ |
|
| % |
| |||||||
Revenue | $ | 25,111 |
|
| $ | 51,765 |
|
| $ | 64,016 |
|
| $ | (26,654 | ) |
|
| (51.5 | )% |
| $ | (12,251 | ) |
|
| (19.1 | )% |
Percent of total |
| 16.4 | % |
|
| 30.0 | % |
|
| 33.8 | % |
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Gross profit | $ | 3,067 |
|
| $ | 6,343 |
|
| $ | 7,095 |
|
| $ | (3,276 | ) |
|
| (51.6 | )% |
| $ | (752 | ) |
|
| (10.6 | )% |
Gross margin |
| 12.2 | % |
|
| 12.3 | % |
|
| 11.1 | % |
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Contribution profit | $ | 2,331 |
|
| $ | 4,831 |
|
| $ | 4,462 |
|
| $ | (2,500 | ) |
|
| -51.7 | % |
| $ | 369 |
|
|
| 8.3 | % |
Contribution margin |
| 9.3 | % |
|
| 9.3 | % |
|
| 7.0 | % |
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Balance Sheet and Cash Flow
Cash and cash equivalents were $19.1 million compared with $25.1 million at year-end 2022. Net cash used in operations was $4.6 million.
At the end of the second quarter of 2023, the Company had no amount outstanding on its revolving line of credit facility or any other long-term debt. Days sales outstanding were 86 in the second quarter of 2023 compared with 84 in the prior-year period.
Successfully Executing Strategy
CTG is a catalyst for digital transformation, helping IT and business leaders accelerate integration of digital technology into all areas of their operations to improve productivity, strengthen business processes, elevate internal controls, and increase value delivery to their customers. CTG’s strategy for growth is its transformation into a higher-performing, digital solutions-based business. The three key elements of its strategy are:
Becoming a global provider of digital IT solutions by capitalizing on the compelling digital transformation trend, leveraging the CTG brand built on reliability and results, and delivering solutions primarily to the energy, healthcare, finance, and manufacturing sectors.
Growing the team organically by adding highly qualified and experienced associates, employing innovative tools and methodologies, and making selective acquisitions.
Strengthening the Company’s margin profile by reducing delivery costs and changing the mix of business by disengaging from low margin IT staffing service support in its Non-Strategic Technology Services segment.
Fiscal 2023 Outlook
“Due to the rapid pace of change and continued uncertainty in the macroenvironment, we are withdrawing our full year 2023 guidance," said John M. Laubacker, Chief Financial Officer. “We continue to execute our long-term strategy, including driving digital transformation with a software engineering focus for our clients, which we are confident will position CTG to enhance shareholder value.”
Conference Call and Webcast
Due to the pending purchase of CTG by Cegeka, CTG will not host its earnings call previously scheduled for today, August 9, 2023, at 11:00 am Eastern time.
About CTG
CTG is a leading provider of digital transformation solutions and services that accelerate clients’ project momentum and achievement of their desired IT and business outcomes. We have earned a reputation as a faster and more reliable, results-driven partner focused on integrating digital technology into all areas of its clients to improve their operations and increase their value proposition. CTG’s engagement in the digital transformation process drives improved data-driven decision-making, meaningful business performance improvements, new and enhanced customer experiences, and continuous innovation. CTG operates in North America, South America, Western Europe, and India. The Company regularly posts news and other important information at www.ctg.com.
Reconciliation of GAAP to non-GAAP Information
The Company has referenced non-GAAP information in this news release. The Company believes that the use of non-GAAP financial information provides useful information to investors and management to gain an overall understanding of its current financial performance and prospects. In addition, management uses non-GAAP financial measures for forecasting, facilitating ongoing operating decisions, and measuring the Company’s overall performance. The Company believes that these non-GAAP measures align closely with its internal measurement processes and reflect the Company’s core operating results.
A reconciliation of GAAP to non-GAAP information is included in the financial tables below. The non-GAAP financial information is presented using a consistent methodology from quarter-to-quarter and year-to-year. These measures should be considered in addition to results prepared in accordance with GAAP. Also, these non-GAAP financial measures are not based on any comprehensive set of accounting rules or principles. The Company believes that non-GAAP financial measures have limitations in that they do not reflect all amounts associated with the Company's results of operations as determined in accordance with GAAP and that these measures should only be used to evaluate the Company's results of operations in conjunction with the corresponding GAAP financial measures. As such, the non-GAAP financial measures disclosed by the Company should not be considered a substitute for or superior to financial measures calculated in accordance with GAAP, and reconciliations between GAAP and non-GAAP financial measures included in this earnings release should be carefully evaluated.
Forward-Looking Statements
This press release contains statements that constitute “forward looking statements,” including statements that express the opinions, expectations, beliefs, plans, objectives, assumptions, or projections regarding future events or future results, including statements regarding the proposed acquisition of CTG by Cegeka (the “Proposed Acquisition”), in contrast with statements that reflect historical facts. In some cases, you can identify such forward-looking statements by terminology such as “anticipate,” “intend,” “believe,” “estimate,” “plan,” “seek,” “project,” or “expect,” “may,” “will,” “would,” “could,” “potential,” “intend,” or “should,” the negative of these terms or similar expressions. Forward-looking statements are based on management’s current beliefs and assumptions and on information currently available to Cegeka and CTG. However, these forward-looking statements are not a guarantee of performance, and you should not place undue reliance on such statements.
Forward-looking statements are subject to many risks, uncertainties and other variable circumstances, including, but not limited to, the ability of the parties to satisfy the closing conditions for the Proposed Acquisition on a timely basis or at all, including the possibility that a governmental agency may prohibit, delay, or refuse to grant approval for the consummation of the Proposed Acquisition; statements about the expected timetable for completing the Proposed Acquisition; uncertainties as to how many of CTG’s shareholders will tender their shares in the offer; the possibility that competing offers will be made; the occurrence of events that may give rise to a right of one or both of Cegeka and CTG to terminate the merger agreement; negative effects of the announcement of the Proposed Acquisition on the market price of CTG’s common stock and/or on it business, financial condition, results of operations, and financial performance (including the ability of CTG to maintain relationships with its customers, suppliers, and others with whom it does business); the effects of the Proposed Acquisition (or the announcement thereof) on CTG’s ability to retain and hire qualified professional staff and talent, including technical, sales and management personnel; competition for clients; the increased bargaining power of CTG’s large clients; the occurrence of cyber incidents and CTG’s ability to protect confidential client data; the partial or complete loss of the revenue CTG generates from its largest client, International Business Machines Corporation (IBM); the uncertainty of CTG’s clients’ implementations of cost reduction projects; the mix of work at CTG between IT Solutions and Services and Non-Strategic Technology Services, and the risk of disengaging from Non-Strategic Technology Services; currency exchange risks; risks associated with CTG’s domestic and foreign operations, including uncertainty and business interruptions resulting from political changes and actions in the U.S. and abroad, such as the conflict between Russian and Ukraine and recent developments in China, and volatility in the global credit and financial markets and economy; renegotiations, nullification, or breaches of contracts with clients, vendors, subcontractors or other parties; the impact of current and future laws and government regulations, as well as repeal or modification of such, affecting the IT solutions and services industry, taxes and CTG’s operations in particular; industry, economic, and political conditions, including fluctuations in demand for IT services; and consolidation among CTG’s competitors or clients. Such risks and uncertainties may cause the statements to be inaccurate and readers are cautioned not to place undue reliance on such statements. Many of these risks are outside of the control of Cegeka and CTG and could cause actual results to differ materially. The forward-looking statements included in this press release are made only as of the date hereof. Cegeka and CTG do not undertake, and specifically decline, any obligation to update any such statements or to publicly announce the results of any revisions to any such statements to reflect future events or developments, except as required by law.
A further description of risks and uncertainties relating to CTG can be found in CTG’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022, as filed with the SEC, and in other documents filed from time to time with the SEC by CTG and available at www.sec.gov and www.ctg.com.
COMPUTER TASK GROUP, INCORPORATED (CTG) |
| ||||||||||
| For the Quarter Ended |
| |||||||||
| June 30, |
|
| July 1, |
|
| July 2, |
| |||
| 2023 |
|
| 2022 |
|
| 2021 |
| |||
|
|
|
|
|
|
|
|
| |||
Revenue | $ | 74,588 |
|
| $ | 82,759 |
|
| $ | 92,164 |
|
Cost of services |
| 53,593 |
|
|
| 63,009 |
|
|
| 71,785 |
|
Gross profit |
| 20,995 |
|
|
| 19,750 |
|
|
| 20,379 |
|
Selling, general and admin. expenses |
| 20,710 |
|
|
| 16,577 |
|
|
| 17,578 |
|
Operating income |
| 285 |
|
|
| 3,173 |
|
|
| 2,801 |
|
Other expense, net |
| (364 | ) |
|
| (385 | ) |
|
| (256 | ) |
Income (loss) before income taxes |
| (79 | ) |
|
| 2,788 |
|
|
| 2,545 |
|
Provision for income taxes |
| 51 |
|
|
| 748 |
|
|
| 712 |
|
Net income (loss) | $ | (130 | ) |
| $ | 2,040 |
|
| $ | 1,833 |
|
|
|
|
|
|
|
|
|
| |||
Net income (loss) per share: |
|
|
|
|
|
|
|
| |||
Basic | $ | (0.01 | ) |
| $ | 0.14 |
|
| $ | 0.13 |
|
Diluted | $ | (0.01 | ) |
| $ | 0.13 |
|
| $ | 0.12 |
|
|
|
|
|
|
|
|
|
| |||
Weighted average shares outstanding: |
|
|
|
|
|
|
|
| |||
Basic |
| 14,832 |
|
|
| 14,419 |
|
|
| 13,845 |
|
Diluted |
| 14,832 |
|
|
| 15,122 |
|
|
| 14,972 |
|
COMPUTER TASK GROUP, INCORPORATED (CTG) |
| ||||||||||
| For the Two Quarters Ended |
| |||||||||
| June 30, |
|
| July 1, |
|
| July 2, |
| |||
| 2023 |
|
| 2022 |
|
| 2021 |
| |||
|
|
|
|
|
|
|
|
| |||
Revenue | $ | 152,790 |
|
| $ | 172,176 |
|
| $ | 189,293 |
|
Cost of services |
| 111,660 |
|
|
| 131,831 |
|
|
| 148,147 |
|
Gross profit |
| 41,130 |
|
|
| 40,345 |
|
|
| 41,146 |
|
Selling, general and admin. expenses |
| 40,138 |
|
|
| 33,973 |
|
|
| 36,247 |
|
Operating income |
| 992 |
|
|
| 6,372 |
|
|
| 4,899 |
|
Other expense, net |
| (594 | ) |
|
| (642 | ) |
|
| (406 | ) |
Income before income taxes |
| 398 |
|
|
| 5,730 |
|
|
| 4,493 |
|
Provision for income taxes |
| 213 |
|
|
| 1,450 |
|
|
| 1,152 |
|
Net income | $ | 185 |
|
| $ | 4,280 |
|
| $ | 3,341 |
|
|
|
|
|
|
|
|
|
| |||
Net income per share: |
|
|
|
|
|
|
|
| |||
Basic | $ | 0.01 |
|
| $ | 0.30 |
|
| $ | 0.24 |
|
Diluted | $ | 0.01 |
|
| $ | 0.28 |
|
| $ | 0.22 |
|
|
|
|
|
|
|
|
|
| |||
Weighted average shares outstanding: |
|
|
|
|
|
|
|
| |||
Basic |
| 14,768 |
|
|
| 14,309 |
|
|
| 13,770 |
|
Diluted |
| 15,399 |
|
|
| 15,050 |
|
|
| 14,958 |
|
|
| ||||||||||
| June 30, |
|
| December 31, |
|
| July 1, |
| |||
| 2023 |
|
| 2022 |
|
| 2022 |
| |||
Current Assets: |
|
|
|
|
|
|
|
| |||
Cash and cash equivalents | $ | 19,137 |
|
| $ | 25,140 |
|
| $ | 35,479 |
|
Accounts receivable, net |
| 70,457 |
|
|
| 70,979 |
|
|
| 76,622 |
|
Other current assets |
| 4,992 |
|
|
| 3,769 |
|
|
| 3,146 |
|
Total current assets |
| 94,586 |
|
|
| 99,888 |
|
|
| 115,247 |
|
|
|
|
|
|
|
|
|
| |||
Property and equipment, net |
| 5,725 |
|
|
| 5,061 |
|
|
| 4,376 |
|
Operating lease right-of-use assets |
| 19,398 |
|
|
| 18,506 |
|
|
| 19,005 |
|
Cash surrender value |
| 4,202 |
|
|
| 4,120 |
|
|
| 4,039 |
|
Acquired intangibles, net |
| 12,210 |
|
|
| 12,943 |
|
|
| 6,219 |
|
Goodwill |
| 36,245 |
|
|
| 35,998 |
|
|
| 18,104 |
|
Other assets |
| 6,290 |
|
|
| 5,103 |
|
|
| 7,031 |
|
Total Assets | $ | 178,656 |
|
| $ | 181,619 |
|
| $ | 174,021 |
|
|
|
|
|
|
|
|
|
| |||
Current Liabilities: |
|
|
|
|
|
|
|
| |||
Accounts payable | $ | 14,389 |
|
| $ | 14,254 |
|
| $ | 13,544 |
|
Accrued compensation |
| 14,859 |
|
|
| 19,016 |
|
|
| 18,071 |
|
Operating lease liabilities |
| 5,584 |
|
|
| 5,905 |
|
|
| 5,838 |
|
Other current liabilities |
| 11,962 |
|
|
| 12,758 |
|
|
| 15,992 |
|
Total current liabilities |
| 46,794 |
|
|
| 51,933 |
|
|
| 53,445 |
|
|
|
|
|
|
|
|
|
| |||
Long-term debt |
| - |
|
|
| - |
|
|
| - |
|
Operating lease liabilities |
| 13,686 |
|
|
| 12,466 |
|
|
| 13,030 |
|
Other liabilities |
| 10,423 |
|
|
| 11,241 |
|
|
| 12,239 |
|
Shareholders' equity |
| 107,753 |
|
|
| 105,979 |
|
|
| 95,307 |
|
Total Liabilities and Shareholders' Equity | $ | 178,656 |
|
| $ | 181,619 |
|
| $ | 174,021 |
|
COMPUTER TASK GROUP, INCORPORATED (CTG) |
| ||||||||||
| For the Two Quarters Ended |
| |||||||||
| June 30, |
|
| July 1, |
|
| July 2, |
| |||
| 2023 |
|
| 2022 |
|
| 2021 |
| |||
|
|
|
|
|
|
|
|
| |||
Net income | $ | 185 |
|
| $ | 4,280 |
|
| $ | 3,341 |
|
Depreciation and amortization expense |
| 1,755 |
|
|
| 1,400 |
|
|
| 1,685 |
|
Equity-based compensation expense |
| 867 |
|
|
| 1,176 |
|
|
| 1,272 |
|
Other operating items |
| (7,412 | ) |
|
| (4,022 | ) |
|
| (6,349 | ) |
Net cash provided by (used in) operating activities |
| (4,605 | ) |
|
| 2,834 |
|
|
| (51 | ) |
Net cash used in investing activities |
| (1,784 | ) |
|
| (721 | ) |
|
| (1,618 | ) |
Net cash provided by (used in) financing activities |
| 8 |
|
|
| (707 | ) |
|
| (1,281 | ) |
Effect of exchange rates on cash and cash equivalents |
| 378 |
|
|
| (1,511 | ) |
|
| (706 | ) |
Net decrease in cash and cash equivalents |
| (6,003 | ) |
|
| (105 | ) |
|
| (3,656 | ) |
Cash and cash equivalents at beginning of period |
| 25,140 |
|
|
| 35,584 |
|
|
| 32,865 |
|
Cash and cash equivalents at end of period | $ | 19,137 |
|
| $ | 35,479 |
|
| $ | 29,209 |
|
|
|
|
|
|
|
|
|
| |||
COMPUTER TASK GROUP, INCORPORATED (CTG)
Segment Information
(Unaudited)
(amounts in thousands)
For reporting purposes, the Company discloses three segments, including IT Solutions and Services in each of North America and Europe, and Non-Strategic Technology Services, primarily in North America. The Company continues investing in business development, including solutions, sales, delivery, and recruiting to drive its digital transformation strategy in the North America and Europe IT Solutions and Services segments. The Company is not investing in its Non-Strategic Technology Services segment which includes lower margin staffing services. Contribution profit represents operational profit after consideration of expenses such as sales, solutions, delivery, and recruiting expenses.
| For the Quarter Ended June 30, 2023 |
| |||||||||
| North |
|
|
|
|
|
|
| |||
| America |
|
| Europe |
|
| Non-Strategic |
| |||
| IT Solutions |
|
| IT Solutions |
|
| Technology |
| |||
| and Services |
|
| and Services |
|
| Services |
| |||
|
|
|
|
|
|
|
|
| |||
Revenue | $ | 25,997 |
|
| $ | 38,393 |
|
| $ | 10,198 |
|
Cost of services |
| 15,485 |
|
|
| 29,150 |
|
|
| 8,958 |
|
Gross profit |
| 10,512 |
|
|
| 9,243 |
|
|
| 1,240 |
|
Gross margin |
| 40.4 | % |
|
| 24.1 | % |
|
| 12.2 | % |
Selling, solutions, delivery, and recruiting expenses |
| 4,715 |
|
|
| 5,288 |
|
|
| 373 |
|
Contribution profit | $ | 5,797 |
|
| $ | 3,955 |
|
| $ | 867 |
|
Contribution margin |
| 22.3 | % |
|
| 10.3 | % |
|
| 8.5 | % |
| For the Quarter Ended July 1, 2022 |
| |||||||||
| North |
|
|
|
|
|
|
| |||
| America |
|
| Europe |
|
| Non-Strategic |
| |||
| IT Solutions |
|
| IT Solutions |
|
| Technology |
| |||
| and Services |
|
| and Services |
|
| Services |
| |||
|
|
|
|
|
|
|
|
| |||
Revenue | $ | 20,339 |
|
| $ | 37,160 |
|
| $ | 25,260 |
|
Cost of services |
| 13,260 |
|
|
| 27,578 |
|
|
| 22,171 |
|
Gross profit |
| 7,079 |
|
|
| 9,582 |
|
|
| 3,089 |
|
Gross margin |
| 34.8 | % |
|
| 25.8 | % |
|
| 12.2 | % |
Selling, solutions, delivery, and recruiting expenses |
| 3,532 |
|
|
| 4,855 |
|
|
| 701 |
|
Contribution profit | $ | 3,547 |
|
| $ | 4,727 |
|
| $ | 2,388 |
|
Contribution margin |
| 17.4 | % |
|
| 12.7 | % |
|
| 9.5 | % |
| For the Quarter Ended July 2, 2021 |
| |||||||||
| North |
|
|
|
|
|
|
| |||
| America |
|
| Europe |
|
| Non-Strategic |
| |||
| IT Solutions |
|
| IT Solutions |
|
| Technology |
| |||
| and Services |
|
| and Services |
|
| Services |
| |||
|
|
|
|
|
|
|
|
| |||
Revenue | $ | 16,762 |
|
| $ | 44,054 |
|
| $ | 31,348 |
|
Cost of services |
| 10,688 |
|
|
| 33,306 |
|
|
| 27,791 |
|
Gross profit |
| 6,074 |
|
|
| 10,748 |
|
|
| 3,557 |
|
Gross margin |
| 36.2 | % |
|
| 24.4 | % |
|
| 11.3 | % |
Selling, solutions, delivery, and recruiting expenses |
| 3,166 |
|
|
| 5,136 |
|
|
| 1,318 |
|
Contribution profit | $ | 2,908 |
|
| $ | 5,612 |
|
| $ | 2,239 |
|
Contribution margin |
| 17.3 | % |
|
| 12.7 | % |
|
| 7.1 | % |
COMPUTER TASK GROUP, INCORPORATED (CTG) |
| ||||||||||
| For the Two Quarters Ended June 30, 2023 |
| |||||||||
| North |
|
|
|
|
|
|
| |||
| America |
|
| Europe |
|
| Non-Strategic |
| |||
| IT Solutions |
|
| IT Solutions |
|
| Technology |
| |||
| and Services |
|
| and Services |
|
| Services |
| |||
|
|
|
|
|
|
|
|
| |||
Revenue | $ | 49,193 |
|
| $ | 78,486 |
|
| $ | 25,111 |
|
Cost of services |
| 29,697 |
|
|
| 59,919 |
|
|
| 22,044 |
|
Gross profit |
| 19,496 |
|
|
| 18,567 |
|
|
| 3,067 |
|
Gross margin |
| 39.6 | % |
|
| 23.7 | % |
|
| 12.2 | % |
Selling, solutions, delivery, and recruiting expenses |
| 9,512 |
|
|
| 10,340 |
|
|
| 736 |
|
Contribution profit | $ | 9,984 |
|
| $ | 8,227 |
|
| $ | 2,331 |
|
Contribution margin |
| 20.3 | % |
|
| 10.5 | % |
|
| 9.3 | % |
| For the Two Quarters Ended July 1, 2022 |
| |||||||||
| North |
|
|
|
|
|
|
| |||
| America |
|
| Europe |
|
| Non-Strategic |
| |||
| IT Solutions |
|
| IT Solutions |
|
| Technology |
| |||
| and Services |
|
| and Services |
|
| Services |
| |||
|
|
|
|
|
|
|
|
| |||
Revenue | $ | 40,773 |
|
| $ | 79,638 |
|
| $ | 51,765 |
|
Cost of services |
| 26,832 |
|
|
| 59,577 |
|
|
| 45,422 |
|
Gross profit |
| 13,941 |
|
|
| 20,061 |
|
|
| 6,343 |
|
Gross margin |
| 34.2 | % |
|
| 25.2 | % |
|
| 12.3 | % |
Selling, solutions, delivery, and recruiting expenses |
| 6,663 |
|
|
| 10,083 |
|
|
| 1,512 |
|
Contribution profit | $ | 7,278 |
|
| $ | 9,978 |
|
| $ | 4,831 |
|
Contribution margin |
| 17.9 | % |
|
| 12.5 | % |
|
| 9.3 | % |
| For the Two Quarters Ended July 2, 2021 |
| |||||||||
| North |
|
|
|
|
|
|
| |||
| America |
|
| Europe |
|
| Non-Strategic |
| |||
| IT Solutions |
|
| IT Solutions |
|
| Technology |
| |||
| and Services |
|
| and Services |
|
| Services |
| |||
|
|
|
|
|
|
|
|
| |||
Revenue | $ | 35,216 |
|
| $ | 90,061 |
|
| $ | 64,016 |
|
Cost of services |
| 23,130 |
|
|
| 68,096 |
|
|
| 56,921 |
|
Gross profit |
| 12,086 |
|
|
| 21,965 |
|
|
| 7,095 |
|
Gross margin |
| 34.3 | % |
|
| 24.4 | % |
|
| 11.1 | % |
Selling, solutions, delivery, and recruiting expenses |
| 6,323 |
|
|
| 10,619 |
|
|
| 2,633 |
|
Contribution profit | $ | 5,763 |
|
| $ | 11,346 |
|
| $ | 4,462 |
|
Contribution margin |
| 16.4 | % |
|
| 12.6 | % |
|
| 7.0 | % |
COMPUTER TASK GROUP, INCORPORATED (CTG) | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| Twelve Months | ||||||||||||
|
| For the Quarter Ended |
| Ended | ||||||||||||||||||||
|
| Jun. |
| Sept. |
| Dec. |
| Mar. |
| Jun. |
| Jun. | ||||||||||||
|
|
| 2022 |
|
|
| 2022 |
|
|
| 2022 |
|
|
| 2023 |
|
|
| 2023 |
|
|
| 2023 |
|
Revenue (in millions) |
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
North America IT Solutions and Services |
| $20.339 |
|
| $20.340 |
|
| $22.924 |
|
| $23.196 |
|
| $25.997 |
|
| $92.457 |
| ||||||
Europe IT Solutions and Services |
|
| 37.160 |
|
|
| 33.258 |
|
|
| 37.035 |
|
|
| 40.093 |
|
|
| 38.393 |
|
|
| 148.779 |
|
Non-Strategic Technology Services |
|
| 25.260 |
|
|
| 21.404 |
|
|
| 17.943 |
|
|
| 14.913 |
|
|
| 10.198 |
|
|
| 64.458 |
|
Total Revenue |
| $82.759 |
|
| $75.002 |
|
| $77.902 |
|
| $78.202 |
|
| $74.588 |
|
| $305.694 |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Revenue in North America |
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Constant Currency (in millions)* |
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
North America |
| $45.042 |
|
| $41.501 |
|
| $40.604 |
|
| $37.859 |
|
| $35.970 |
|
| $155.934 |
| ||||||
Foreign Currency Impact |
|
| (0.028 | ) |
|
| (0.016 | ) |
|
| 0.005 |
|
|
| 0.003 |
|
|
| - |
|
|
| ||
Total Revenue in Constant Currency (non-GAAP) |
| $45.014 |
|
| $41.485 |
|
| $40.609 |
|
| $37.862 |
|
| $35.970 |
|
|
| |||||||
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Revenue in Europe |
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Constant Currency (in millions)* |
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Europe |
| $37.717 |
|
| $33.501 |
|
| $37.298 |
|
| $40.343 |
|
| $38.618 |
|
| $149.760 |
| ||||||
Foreign Currency Impact |
|
| 0.805 |
|
|
| 2.701 |
|
|
| 2.528 |
|
|
| 0.607 |
|
|
| - |
|
|
| ||
Total Revenue in Constant Currency (non-GAAP) |
| $38.522 |
|
| $36.202 |
|
| $39.826 |
|
| $40.950 |
|
| $38.618 |
|
|
| |||||||
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Revenue By Geography |
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
North America |
|
| 54.4 | % |
|
| 55.3 | % |
|
| 52.1 | % |
|
| 48.4 | % |
|
| 48.2 | % |
|
| 51.0 | % |
Europe |
|
| 45.6 | % |
|
| 44.7 | % |
|
| 47.9 | % |
|
| 51.6 | % |
|
| 51.8 | % |
|
| 49.0 | % |
Total |
|
| 100.0 | % |
|
| 100.0 | % |
|
| 100.0 | % |
|
| 100.0 | % |
|
| 100.0 | % |
|
| 100.0 | % |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Revenue by Vertical Market |
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Healthcare |
|
| 18 | % |
|
| 19 | % |
|
| 18 | % |
|
| 19 | % |
|
| 23 | % |
|
| 20 | % |
Financial Services |
|
| 15 | % |
|
| 15 | % |
|
| 17 | % |
|
| 18 | % |
|
| 17 | % |
|
| 16 | % |
Manufacturing |
|
| 15 | % |
|
| 17 | % |
|
| 16 | % |
|
| 16 | % |
|
| 14 | % |
|
| 16 | % |
Technology Service Providers |
|
| 24 | % |
|
| 22 | % |
|
| 19 | % |
|
| 16 | % |
|
| 15 | % |
|
| 18 | % |
Energy |
|
| 7 | % |
|
| 6 | % |
|
| 6 | % |
|
| 6 | % |
|
| 6 | % |
|
| 6 | % |
General Markets |
|
| 21 | % |
|
| 21 | % |
|
| 24 | % |
|
| 25 | % |
|
| 25 | % |
|
| 24 | % |
Total |
|
| 100 | % |
|
| 100 | % |
|
| 100 | % |
|
| 100 | % |
|
| 100 | % |
|
| 100 | % |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Operating Margins |
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
GAAP Operating Margin |
|
| 3.8 | % |
|
| 3.0 | % |
|
| 3.1 | % |
|
| 0.9 | % |
|
| 0.4 | % |
|
| 1.9 | % |
Non-GAAP Operating Margin |
|
| 4.2 | % |
|
| 4.0 | % |
|
| 5.1 | % |
|
| 2.7 | % |
|
| 3.9 | % |
|
| 3.9 | % |
Other Information (in millions except Billable Days and EPS) | |||||||||||||||||||
Billable Days |
|
| 64 |
|
| 63 |
|
| 63 |
|
| 64 |
|
| 64 |
|
|
| 254 |
Net Income (Loss) |
| $2.040 |
| $1.102 |
| $1.227 |
| $0.315 |
| $(0.130 | ) |
| $2.514 | ||||||
GAAP Diluted EPS |
| $0.13 |
| $0.07 |
| $0.08 |
| $0.02 |
| $(0.01 | ) |
| $0.16 | ||||||
Non-GAAP Diluted EPS |
| $0.15 |
| $0.11 |
| $0.14 |
| $0.08 |
| $0.13 |
|
| $0.46 | ||||||
Adjusted EBITDA (non-GAAP) |
| $4.2 |
| $3.8 |
| $4.8 |
| $2.8 |
| $3.7 |
|
| $15.1 | ||||||
Balance Sheet Information (in millions except DSO) |
|
| |||||||||||||||
Cash less Debt, Net |
| $35.5 |
| $26.8 |
| $25.1 |
| $21.9 |
| $19.1 |
|
| |||||
Working Capital |
| $61.8 |
| $44.5 |
| $48.0 |
| $49.0 |
| $47.8 |
|
| |||||
DSO |
|
| 84 |
|
| 83 |
|
| 84 |
|
| 83 |
|
| 86 |
|
|
* Constant Currency is measured by applying the current fiscal period's average exchange rate to each of the prior periods
COMPUTER TASK GROUP, INCORPORATED (CTG)
(Unaudited)
The non-GAAP information below excludes certain acquisition-related expenses, ERP system implementation costs, costs associated with severance and the evaluation of strategic alternatives. The acquisition-related expenses consist of due diligence costs, amortization of intangible assets, and changes in the value of earn-out payments upon achievement of certain financial targets from the Company’s recent acquisitions.
Reconciliation of GAAP to non-GAAP Operating Income
|
|
|
|
|
|
|
|
|
|
|
| Twelve | ||||||
|
|
|
|
|
|
|
|
|
|
|
| Months | ||||||
|
| For the Quarter Ended |
| Ended | ||||||||||||||
|
| Jun. |
| Sept. |
| Dec. |
| Mar. |
| Jun. |
| Jun. | ||||||
(in millions) |
| 2022 |
| 2022 |
| 2022 |
| 2023 |
| 2023 |
| 2023 | ||||||
GAAP Operating Income |
| $3.173 |
| $2.253 |
| $2.451 |
| $0.707 |
| $0.285 |
| $5.696 | ||||||
Acquisition-related expenses |
|
| 0.290 |
|
| 0.744 |
|
| 0.696 |
|
| 0.634 |
|
| 0.623 |
|
| 2.697 |
ERP system implementation costs |
|
| - |
|
| - |
|
| - |
|
| 0.481 |
|
| 0.536 |
|
| 1.017 |
Severance |
|
| - |
|
| - |
|
| 0.838 |
|
| 0.286 |
|
| 0.497 |
|
| 1.621 |
Non-recurring costs related to certain strategic initiatives |
|
| - |
|
| - |
|
| - |
|
| - |
|
| 0.982 |
|
| 0.982 |
Non-GAAP Operating Income |
| $3.463 |
| $2.997 |
| $3.985 |
| $2.108 |
| $2.923 |
| $12.013 | ||||||
Reconciliation of GAAP to non-GAAP Operating Margin
|
|
|
|
|
|
|
|
|
|
|
| Twelve | ||||||
|
|
|
|
|
|
|
|
|
|
|
| Months | ||||||
|
| For the Quarter Ended |
| Ended | ||||||||||||||
|
| Jun. |
| Sept. |
| Dec. |
| Mar. |
| Jun. |
| Jun. | ||||||
|
| 2022 |
| 2022 |
| 2022 |
| 2023 |
| 2023 |
| 2023 | ||||||
GAAP Operating Margin |
| 3.8 | % |
| 3.0 | % |
| 3.1 | % |
| 0.9 | % |
| 0.4 | % |
| 1.9 | % |
Acquisition-related expenses |
| 0.4 | % |
| 1.0 | % |
| 0.9 | % |
| 0.8 | % |
| 0.8 | % |
| 0.9 | % |
ERP system implementation costs |
| - |
|
| - |
|
| - |
|
| 0.6 | % |
| 0.7 | % |
| 0.3 | % |
Severance |
| - |
|
| - |
|
| 1.1 | % |
| 0.4 | % |
| 0.7 | % |
| 0.5 | % |
Non-recurring costs related to certain strategic initiatives |
| - |
|
| - |
|
| - |
|
| - |
|
| 1.3 | % |
| 0.3 | % |
Non-GAAP Operating Margin |
| 4.2 | % |
| 4.0 | % |
| 5.1 | % |
| 2.7 | % |
| 3.9 | % |
| 3.9 | % |
Reconciliation of GAAP to non-GAAP Net Income (Loss)
|
|
|
|
|
|
|
|
|
|
|
| Twelve | |||||||
|
|
|
|
|
|
|
|
|
|
|
| Months | |||||||
| For the Quarter Ended |
| Ended | ||||||||||||||||
|
| Jun. |
| Sept. |
| Dec. |
| Mar. |
| Jun. |
| Jun. | |||||||
(in millions) |
| 2022 |
| 2022 |
| 2022 |
| 2023 |
| 2023 |
|
| 2023 | ||||||
GAAP Net Income (Loss) |
| $2.040 |
| $1.102 |
| $1.227 |
| $0.315 |
| $(0.130 | ) |
| $2.514 | ||||||
Acquisition-related expenses |
|
| 0.212 |
|
| 0.510 |
|
| 0.435 |
|
| 0.419 |
|
| 0.485 |
|
|
| 1.849 |
ERP system implementation costs |
|
| - |
|
| - |
|
| - |
|
| 0.317 |
|
| 0.417 |
|
|
| 0.734 |
Severance |
|
| - |
|
| - |
|
| 0.524 |
|
| 0.189 |
|
| 0.387 |
|
|
| 1.100 |
Non-recurring costs related to certain strategic initiatives |
|
| - |
|
| - |
|
| - |
|
| - |
|
| 0.764 |
|
|
| 0.764 |
Non-GAAP Net Income |
| $2.252 |
| $1.612 |
| $2.186 |
| $1.240 |
| $1.923 |
|
| $6.961 | ||||||
COMPUTER TASK GROUP, INCORPORATED (CTG)
(Unaudited)
Reconciliation of GAAP to non-GAAP Diluted Earnings (Loss) per Share (EPS)
|
|
|
|
|
|
|
|
|
|
|
| Twelve | |||||||
|
|
|
|
|
|
|
|
|
|
|
| Months | |||||||
|
| For the Quarter Ended |
| Ended | |||||||||||||||
|
| Jun. |
| Sept. |
| Dec. |
| Mar. |
| Jun. |
| Jun. | |||||||
|
| 2022 |
| 2022 |
| 2022 |
| 2023 |
| 2023 |
|
| 2023 | ||||||
GAAP Diluted EPS |
| $0.13 |
| $0.07 |
| $0.08 |
| $0.02 |
| $(0.01 | ) |
| $0.16 | ||||||
Acquisition-related expenses |
|
| 0.02 |
|
| 0.04 |
|
| 0.03 |
|
| 0.03 |
|
| 0.03 |
|
|
| 0.13 |
ERP system implementation costs |
|
| - |
|
| - |
|
| - |
|
| 0.02 |
|
| 0.03 |
|
|
| 0.05 |
Severance |
|
| - |
|
| - |
|
| 0.03 |
|
| 0.01 |
|
| 0.03 |
|
|
| 0.07 |
Non-recurring costs related to certain strategic initiatives |
|
| - |
|
| - |
|
| - |
|
| - |
|
| 0.05 |
|
|
| 0.05 |
Non-GAAP Diluted EPS |
| $0.15 |
| $0.11 |
| $0.14 |
| $0.08 |
| $0.13 |
|
| $0.46 | ||||||
Reconciliation of Net Income (Loss) to Adjusted EBITDA (non-GAAP) includes earnings before interest (including amortization of deferred debt financing costs), taxes, depreciation and amortization, equity-based compensation, and other, which includes severance, ERP system implementation costs, acquisition-related expenses, and non-recurring costs related to certain strategic initiatives.
|
|
|
|
|
|
|
|
|
|
|
| Twelve | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| Months | ||||||||||||
|
| For the Quarter Ended |
| Ended | ||||||||||||||||||||
|
| Jun. |
| Sept. |
| Dec. |
| Mar. |
| Jun. |
| Jun. | ||||||||||||
(in millions) |
|
| 2022 |
|
|
| 2022 |
|
|
| 2022 |
|
|
| 2023 |
|
|
| 2023 |
|
|
| 2023 |
|
Net Income (Loss) |
| $2.040 |
|
| $1.102 |
|
| $1.227 |
|
| $0.315 |
|
| $(0.130 | ) |
| $2.514 |
| ||||||
Taxes |
|
| 0.748 |
|
|
| 0.759 |
|
|
| 0.736 |
|
|
| 0.162 |
|
|
| 0.051 |
|
|
| 1.708 |
|
Interest |
|
| 0.100 |
|
|
| 0.103 |
|
|
| 0.100 |
|
|
| 0.109 |
|
|
| 0.121 |
|
|
| 0.433 |
|
Depreciation and amortization |
|
| 0.684 |
|
|
| 0.651 |
|
|
| 0.948 |
|
|
| 0.837 |
|
|
| 0.918 |
|
|
| 3.354 |
|
Equity-based compensation expense |
|
| 0.603 |
|
|
| 0.693 |
|
|
| 0.694 |
|
|
| 0.345 |
|
|
| 0.522 |
|
|
| 2.254 |
|
Other |
|
| 0.049 |
|
|
| 0.516 |
|
|
| 1.102 |
|
|
| 0.997 |
|
|
| 2.210 |
|
|
| 4.825 |
|
Adjusted EBITDA |
| $4.224 |
|
| $3.824 |
|
| $4.807 |
|
| $2.765 |
|
| $3.692 |
|
| $15.088 |
| ||||||
Adjusted EBITDA Margin |
|
| 5.1 | % |
|
| 5.1 | % |
|
| 6.2 | % |
|
| 3.5 | % |
|
| 4.9 | % |
|
| 4.9 | % |
CTG news releases are available at www.ctg.com.
CONTACT: Contacts: John M. Laubacker Chief Financial Officer Tel: +1 716 887 7368 Investor Relations: Deborah K. Pawlowski Kei Advisors LLC dpawlowski@keiadvisors.com Tel: +1 716 843 3908 Craig P. Mychajluk Kei Advisors LLC cmychajluk@keiadvisors.com Tel: +1 716 843 3832
