Computer Task Group Inc. (CTGX, Financial) filed Quarterly Report for the period ended 2011-09-30.
Computer Task Group Inc. has a market cap of $252.2 million; its shares were traded at around $13.58 with a P/E ratio of 21.5 and P/S ratio of 0.8. Computer Task Group Inc. had an annual average earning growth of 35.6% over the past 10 years.
In the first three quarters of 2011, the Company recorded revenue of $295.4 million, an increase of 21.0% compared with revenue of $244.1 million recorded in the first three quarters of 2010. There were 192 billable days in the first three quarters of both 2011 and 2010. Revenue from the Companys North American operations totaled $244.9 million in the first three quarters of 2011, an increase of 22.9% when compared with revenue in the first three quarters of 2010 of $199.3 million. Revenue from the Companys European operations in the first three quarters of 2011 totaled $50.5 million, an increase of 12.7% when compared with revenue in the first three quarters of 2010 of $44.8 million. The European revenue represented 17.1% and 18.3% of 2011 and 2010 year-to-date consolidated revenue, respectively. Reimbursable expenses billed to customers and included in revenue totaled $9.4 million and $6.5 million in the 2011 and 2010 year-to-date periods, respectively.
In the 2011 third quarter, IBM was the Companys largest customer, accounting for $30.8 million or 30.4% of consolidated revenue as compared with $27.2 million or 32.2% of revenue in the comparable 2010 period. In the first three quarters of 2011, IBM accounted for $89.0 million or 30.2% of consolidated revenue, compared with $75.4 million or 30.9% in the comparable 2010 period. During the 2011 second quarter, the Companys National Technical Services (NTS Agreement) contract with IBM was extended from June 30, 2011 to September 28, 2011. During the 2011 third quarter, the NTS Agreement contract was again extended three months to December 31, 2011, as IBM in the normal course of its business periodically reviews the NTS contract it has with its vendors. As part of the NTS Agreement, the Company provides its services as a predominant supplier to IBMs Integrated Technology Services unit and as sole provider to the Systems and Technology Group business unit. IBM has informed CTG that is has been selected to continue as a supplier under the NTS Agreement for the next three years. CTG expects the NTS Agreement to be executed during the 2011 fourth quarter, and we expect the Company will continue to derive a significant portion of its revenue from IBM throughout the remainder of 2011 and in future years. However, a significant decline in or the loss of the revenue from IBM would have a significant negative effect on our operating results. The Companys accounts receivable from IBM at September 30, 2011 and October 1, 2010 totaled $15.4 million and $14.1 million, respectively. No other customer accounted for more than 10% of the Companys revenue in either the third quarter or year-to-date periods of 2011 or 2010.
Operating income was 4.5% of revenue in the 2011 third quarter as compared with 3.7% in the 2010 third quarter, and 4.7% in the first three quarters of 2011 as compared with 4.0% in the corresponding 2010 period. The slight decline in operating income as a percentage of revenue in the 2011 third quarter as compared with the first three quarters of 2011 is due to the seasonality the Company typically experiences in the third quarter of the year as a result of increased vacation time in the summer months. Operating income from North American operations was $12.0 million and $8.9 million in the 2011 and 2010 first three quarters, respectively, while European operations recorded operating income of $1.9 million and $0.8 million, respectively, in the corresponding 2011 and 2010 periods.
Net income for the 2011 third quarter was 3.0% of revenue or $0.18 per diluted share, compared with net income of 2.4% of revenue or $0.13 per diluted share, in the 2010 third quarter. Net income for the first three quarters of 2011 was 2.9% of revenue or $0.52 per diluted share, compared with net income of 2.3% of revenue or $0.36 per diluted share, in the comparable 2010 period. Diluted earnings per share was calculated using 16.7 million and 15.9 million weighted-average equivalent shares outstanding for the quarters ended September 30, 2011 and October 1, 2010, respectively. Diluted earnings per share was calculated using 16.7 million and 16.0 million weighted-average equivalent shares outstanding for the year-to-date periods ended September 30, 2011 and October 1, 2010, respectively. The number of equivalent shares outstanding increased year-over-year due to an increase in the Companys stock price which increased the dilutive effect of outstanding stock options, but was somewhat offset by the purchase of 340,000 shares into treasury stock pursuant to the Companys share repurchase program for the twelve month period ended September 30, 2011.
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Computer Task Group Inc. has a market cap of $252.2 million; its shares were traded at around $13.58 with a P/E ratio of 21.5 and P/S ratio of 0.8. Computer Task Group Inc. had an annual average earning growth of 35.6% over the past 10 years.
Highlight of Business Operations:
In the 2011 third quarter, the Company recorded revenue of $101.1 million, an increase of 19.7% compared with revenue of $84.5 million recorded in the 2010 third quarter. There were 63 billable days in both the 2011 and 2010 third quarters. Revenue from the Companys North American operations totaled $85.1 million in the 2011 third quarter, an increase of 20.4% when compared with North American revenue in the 2010 third quarter of $70.7 million. Revenue from the Companys European operations in the 2011 third quarter totaled $16.0 million, an increase of 16.2% when compared with European revenue in the 2010 third quarter of $13.8 million. The European revenue represented 15.9% and 16.3% of 2011 and 2010 third quarter consolidated revenue, respectively. The Companys revenue included reimbursable expenses billed to customers which totaled $3.1 million and $2.4 million in the 2011 and 2010 third quarters, respectively.In the first three quarters of 2011, the Company recorded revenue of $295.4 million, an increase of 21.0% compared with revenue of $244.1 million recorded in the first three quarters of 2010. There were 192 billable days in the first three quarters of both 2011 and 2010. Revenue from the Companys North American operations totaled $244.9 million in the first three quarters of 2011, an increase of 22.9% when compared with revenue in the first three quarters of 2010 of $199.3 million. Revenue from the Companys European operations in the first three quarters of 2011 totaled $50.5 million, an increase of 12.7% when compared with revenue in the first three quarters of 2010 of $44.8 million. The European revenue represented 17.1% and 18.3% of 2011 and 2010 year-to-date consolidated revenue, respectively. Reimbursable expenses billed to customers and included in revenue totaled $9.4 million and $6.5 million in the 2011 and 2010 year-to-date periods, respectively.
In the 2011 third quarter, IBM was the Companys largest customer, accounting for $30.8 million or 30.4% of consolidated revenue as compared with $27.2 million or 32.2% of revenue in the comparable 2010 period. In the first three quarters of 2011, IBM accounted for $89.0 million or 30.2% of consolidated revenue, compared with $75.4 million or 30.9% in the comparable 2010 period. During the 2011 second quarter, the Companys National Technical Services (NTS Agreement) contract with IBM was extended from June 30, 2011 to September 28, 2011. During the 2011 third quarter, the NTS Agreement contract was again extended three months to December 31, 2011, as IBM in the normal course of its business periodically reviews the NTS contract it has with its vendors. As part of the NTS Agreement, the Company provides its services as a predominant supplier to IBMs Integrated Technology Services unit and as sole provider to the Systems and Technology Group business unit. IBM has informed CTG that is has been selected to continue as a supplier under the NTS Agreement for the next three years. CTG expects the NTS Agreement to be executed during the 2011 fourth quarter, and we expect the Company will continue to derive a significant portion of its revenue from IBM throughout the remainder of 2011 and in future years. However, a significant decline in or the loss of the revenue from IBM would have a significant negative effect on our operating results. The Companys accounts receivable from IBM at September 30, 2011 and October 1, 2010 totaled $15.4 million and $14.1 million, respectively. No other customer accounted for more than 10% of the Companys revenue in either the third quarter or year-to-date periods of 2011 or 2010.
Operating income was 4.5% of revenue in the 2011 third quarter as compared with 3.7% in the 2010 third quarter, and 4.7% in the first three quarters of 2011 as compared with 4.0% in the corresponding 2010 period. The slight decline in operating income as a percentage of revenue in the 2011 third quarter as compared with the first three quarters of 2011 is due to the seasonality the Company typically experiences in the third quarter of the year as a result of increased vacation time in the summer months. Operating income from North American operations was $12.0 million and $8.9 million in the 2011 and 2010 first three quarters, respectively, while European operations recorded operating income of $1.9 million and $0.8 million, respectively, in the corresponding 2011 and 2010 periods.
Net income for the 2011 third quarter was 3.0% of revenue or $0.18 per diluted share, compared with net income of 2.4% of revenue or $0.13 per diluted share, in the 2010 third quarter. Net income for the first three quarters of 2011 was 2.9% of revenue or $0.52 per diluted share, compared with net income of 2.3% of revenue or $0.36 per diluted share, in the comparable 2010 period. Diluted earnings per share was calculated using 16.7 million and 15.9 million weighted-average equivalent shares outstanding for the quarters ended September 30, 2011 and October 1, 2010, respectively. Diluted earnings per share was calculated using 16.7 million and 16.0 million weighted-average equivalent shares outstanding for the year-to-date periods ended September 30, 2011 and October 1, 2010, respectively. The number of equivalent shares outstanding increased year-over-year due to an increase in the Companys stock price which increased the dilutive effect of outstanding stock options, but was somewhat offset by the purchase of 340,000 shares into treasury stock pursuant to the Companys share repurchase program for the twelve month period ended September 30, 2011.
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