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CTG reports 2015 Q1 results

• Diluted EPS was $0.08 for the quarter, at Midpoint of Guidance

• Revenue was $97.5 Million, just below midpoint of Guidance

• Strong Balance Sheet with no Debt and $34.4 Million in Cash

• Headcount Increased by 100 to 3,900

CTG, an information technology (IT) solutions and services company, today announced its financial results for the 2015 first quarter which ended on April 3, 2015.

2015 First Quarter Review

Dollar amounts in thousands except per share data:

Apr. 3, 

Mar. 28, 




 $ 97,477

 $ 97,911

 $ (434)


Operating income 

 $ 2,213

 $ 5,475

 $ (3,262)


Operating Margin



Net income 

 $ 1,267

 $ 3,166

 $ (1,899)


Net income per diluted share

 $ 0.08

 $ 0.19

 $ (0.11)


CTG made the following statement:

Unfavorable foreign currency exchange reduced revenue by $3.7 million and net income per diluted share by approximately one cent in the quarter.  The decline in the 2015 first quarter operating margin reflects lower margins on healthcare solutions revenue and a shift in business mix to a higher proportion of lower margin staffing business.  In addition to the current quarter's margin reduction, last year's first quarter benefited from the completion of a small medical claims data analytics project. CTG's effective tax rate in the first quarter of 2015 was 42.5%, compared with 41.1% in last year's first quarter.

"CTG's first quarter 2015 operating results were in line with our expectations as our healthcare solutions business continued to be adversely affected by the softness in demand for our services from providers," said CTG Chief Financial Officer Brendan Harrington. "Healthcare providers have either delayed projects or looked internally to staff projects that were typically implemented by IT services firms like CTG before the federal government's budget sequestration went into effect in 2013. We saw a slight increase in demand from our two largest staffing customers, however much of this gain was offset by the impact of the strong U.S. dollar on our European business. CTG Europe continued to grow in local currency as government and financial services market demand remained strong."

Stock Repurchase Program

CTG repurchased 99,000 of its shares in the 2015 first quarter at an average price of $7.99 per share. In April 2015, the Company extended its 10b5-1 stock repurchase plan to facilitate the repurchase of its common stock during its self-imposed blackout periods prior to the announcement of quarterly results.  On March 31, 2015, approximately 540,000 shares were available under CTG's current repurchase authorization.

2015 Guidance and Outlook

CTG is issuing the following guidance for the 2015 second quarter and full year. The Company is revising its 2015 annual revenue guidance from the initial guidance provided in its 2014 fourth quarter earnings release, issued on February 24, 2015, based primarily on a continued strengthening of the US dollar resulting in lower revenue from our European operations:

2015 Second Quarter 


Range midpoint

Change from prior year 
at range midpoint


$93-95 million

$94 million


Diluted net income per share

$0.09 - $0.11



2015 Full Year


$375-389 million

$382 million


Diluted net income per share 

$0.36 - $0.44



Note: 63 billing days in Q2 2015 vs. 64 billing days in Q2 2014

Cliff Bleustein, CTG's president and CEO, said, "There are numerous existing and evolving opportunities in the U.S. healthcare market as providers and payers move to a results-oriented system. Our staffing business is growing once again and CTG is a recognized leader in managed staffing services. Our European operations are performing well in a very competitive environment. The Company has a stellar reputation in the markets it serves, a strong balance sheet, and an experienced management team supported by a talented group of employees. These are all the factors that attracted me to CTG."

Bleustein concluded, "While I believe CTG's basic fundamentals are sound, I plan to review and modify the business unit strategies as necessary during the next few months to ensure the Company is properly positioned to take advantage of the appropriate market opportunities and improve profitable growth and value creation for our shareholders."


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