National TechTeam, Inc. Announces Q1 Revenues And Earnings
30 April 1998
National TechTeam, Inc. Announces Revenues And Earnings for the First Quarter 1998
DEARBORN, Mich., April 30 -- National TechTeam Inc.
, today reported revenues and earnings for the first quarter
1998. For the quarter ended March 31, 1998, revenues were $26,457,087, a
42.4% increase over the $18,576,592 reported for the first quarter of 1997 and
the highest revenues ever reported in the Company's history. Net income for
the quarter was $141,059, or $0.01 per share, compared with a loss of
$364,353, or $(0.02) per share, for the corresponding quarter in 1997.
The strong growth in revenues reflected the increasing demand for all of
National TechTeam's computer services. Call Center Services revenues
increased 35.7% to $12,311,512 from $9,074,422 in the first quarter 1997. The
Corporate Computer Services line also contributed significantly to overall
results for the quarter. Revenues increased 26.7% to $12,036,429 in the first
quarter of 1998 from $9,502,170 in the first quarter of 1997.
Additionally, as a result of the acquisition of Capricorn Capital Group,
Inc. in January 1998, TechTeam reported revenues from Leasing and Related
Services of $2,109,146 in the first quarter of 1998.
On March 31, 1998 TechTeam sold its OEM call center business, consisting
of its contracts with Hewlett Packard Corporation and its contract with 3Com
Corporation, to General Electric Company for $1.4 million. General Electric
then contributed those contracts to the GE TechTeam joint venture for an
agreed value of $1.4 million and an agreement that GE shall receive all of the
joint venture's earnings until GE has recovered the $1.4 million. First
quarter 1998 earnings reflect no amounts related to this sale. TechTeam will
recognize the earnings related to this sale as the joint venture records those
earnings. The Company believes that the sale of the OEM call center business
is consistent with TechTeam's strategic direction to concentrate on corporate
help desk solutions. This sale is not expected to result in a significant
reduction of present revenues from Call Center Services due to revenues from
new contracts recently received by TechTeam. It also allows TechTeam to
participate in the consumer and OEM call center business through its joint
venture with GE (GE TechTeam, L.P.)
The foregoing contains forward-looking statements. The matters expressed
in such statements are subject to numerous uncertainties and risks including
but not limited to general economic conditions in the markets in which
TechTeam operates, fluctuation in demand for computer related services and
products, the success of actions taken to integrate Capricorn and TechTeam's
business and current expectations of TechTeam or its management. Should one
or more of those uncertainties or risks materialize, or should underlying
assumptions prove incorrect, actual results may vary materially from those
described as forward-looking statements. TechTeam does not intend to update
those forward-looking statements.
National TechTeam, Inc. is a leading provider of information technology
outsourcing support services to large national and multi-national
corporations, government agencies and service organizations. The Company
offers its services through three global units: (i) Call Center Services,
which provides its clients with inbound telephone support for their computer
product and end-users; (ii) Corporate Computer Services, which provides
corporations with technical staffing (principally on-site help desk support),
systems integration, and instructor-led and computer-based training; and (iii)
Leasing and Related Services, which consists primarily of leasing computer-
related hardware to corporate customers. National TechTeam is traded under
the symbol "TEAM."
National TechTeam, Inc.
First Quarter Results of Operations
Quarter Ended March 31 1998 1997
Revenues $26,457,087 $18,576,592
Income/(Loss) Before Tax Provisions 444,459 (330,863)
Tax Provisions 303,400 33,500
Net Income/(Loss) 141,059 (364,353)
Basic and Diluted Earnings/(Loss)
Per Share 0.01 (0.02)
Weighted Average Number of Common
Shares and Common Share
Equivalents Outstanding
Basic 15,423,402 15,557,821
Diluted 15,635,680 15,907,240
National TechTeam, Inc.
Supplementary Data for Quarterly Press Release
First Quarter 1998
First Quarter
1998
Over/(Under)
1998 1997 1997
Revenues
Call Center Services $12,311,512 $9,074,422 $3,237,090
Corporate Computer Services
Technical staffing 6,626,107 5,686,186 939,921
Systems integration 2,983,555 2,372,788 610,767
Training programs 2,426,767 1,443,196 983,571
12,036,429 9,502,170 2,534,259
Leasing and related activities 2,109,146 - 2,109,146
Total revenues $26,457,087 $18,576,592 $7,880,495
Gross profit
Amount $3,913,093 $2,535,308 $1,377,785
Percentage 14.8% 13.6% 1.1%
S, G and A
Amount $4,082,721 $3,589,769 $492,952
Percentage 15.4% 19.3% (3.9)%
Interest income
Amount $(614,087) $(723,598) $109,511
Percentage (2.3)% (3.9)% 1.6%
Income before tax provisions
Amount $444,459 $(330,863) $775,322
Percentage 1.7% (1.8)% 3.5%
Tax provisions
Amount $303,400 $33,500 $269,900
Effective tax rate
Federal 34.6% 23.9% 10.7%
Other 51.5% (44.7)% 96.2%
Total 68.3% (10.1)% 78.4%
Weighted average shares outstanding
Basic 15,423,402 15,557,821 (134,419)
Diluted 15,635,680 15,907,240 (271,560)
Call Center Services
Call centers 6 5 1
Equipped workstations 1,206 653 553
Calls answered 1,366,053 1,007,147 358,906
Percentage of Business by Major Customers
GE TechTeam L.P. 18.3% 0.0% 18.3%
Chrysler 18.0% 11.5% 6.5%
Ford 14.2% 20.2% (6.0)%
Hewlett Packard 13.4% 27.4% (14.1)%
UPS 5.9% 7.2% (1.2)%
Number of Employees
Call Center Services 1,232 857 375
Corporate Computer Services
Technical staffing 404 283 121
Systems integration 138 115 23
Training programs 125 96 29
Leasing and related activities 7 - 7
Sales, General, & Admin. 136 115 21
Total employees 2,042 1,466 576
SOURCE National TechTeam, Inc.