Southfield-based TechTeam Global Inc. (Nasdaq: TEAM) reported net income of $138,000 or 1 cent a share in the second quarter ended June 30, down from net income of $1.3 million or 12 cents a share in the same quarter a year earlier.
Revenue fell 13.9 percent to $46.8 million from $54.3 million in the same quarter a year earlier.
For the six months, the company posted a loss of $2.5 million or 24 cents a share, vs. net income of $2.9 million or 28 cents a share in the first half of 2009. Revenue was $94.8 million, down from $110.4 million in the first half of 2009.
The company pointed out that excluding approximately $1 million of expenses for professional fees related to the pending sale of TechTeam Government Solution, Inc., the company achieved $1.1 million of net income or 10 cents per share.
The company said revenue fell mostly due to the previously announced wind-down of some customer contracts during the second half of 2009, including the U.S. federal government in-sourcing of certain services provided to U.S. Air National Guard and the discontinuation of service for the Volvo Car Co.
Selling, general and administrative expense was $10.8 million in the second quarter of 2010, down from $11.5 million in the second quarter of 2009. The decrease was primarily due to expense reductions from restructuring actions taken in 2009 and 2010, an increase in the company’s allowance for doubtful accounts in the second quarter of 2009, and a reduction in amortization expense. This decrease was partially offset by an increase in professional fees of approximately $1.4 million related to the sale of the company’s government business.
Cash provided by operations for the six months ended June 30 was $2 million. The Company maintained a zero net debt position (total cash minus total bank debt) at the end of the second quarter 2010.
“We delivered profitable results and positive cash flow in the second quarter despite the impact of the global economy on our business and the effect of costs associated with the sale of our government business,” said Gary J. Cotshott, president and CEO of TechTeam Global. “In addition, we achieved important milestones against our strategic plan including the pending divestiture of our government business and continued globalization efforts through a market entry into the Latin America region to support the needs of our global customers. Our focus is now squarely on the opportunities in the commercial market, delivering leading IT outsourcing and business process outsourcing services to our global customer base. In the second quarter, our new customer pipeline remained strong and we expanded relationships with existing customers, both geographically and across our service offerings. Coming through a tough economic period, our customer base has stabilized and is slowly expanding. As we look forward, we are seeing increased activity from potential new customers and footprint expansion within our current customer base, albeit with continued longer sales cycles … We are cautiously optimistic amid continuing signs of stability in the global economic environment and remain focused on executing our commercial strategy, delivering improved financial results and enhancing shareholder value.”
The company said it would not hold an investor teleconference to discuss the results due to its outstanding proxy statement soliciting stockholder approval for the sale of TechTeam Government Solutions Inc., to Jacobs Engineering.
More at www.techteam.com.
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