Exhibit 99.1
International Headquarters5221 North O’Connor Blvd.Suite 500Irving, Texas 75039Phone: 972.869.3400Fax: 972.443.1701 | News Release |
FOR IMMEDIATE RELEASE
Contact : |
| Jim Taylor, President, Chief Executive Officer |
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| 972-869-3400 |
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| jtaylor@thomasgroup.com |
Thomas Group Announces First Quarter 2005 Results
Irving, Texas, April 21, 2005 Thomas Group, Inc. (TGIS.OB) today announced revenues of $7.9 million and a net loss of $0.1 million, or $0.01 per diluted share for the first quarter of 2005, which included a non-cash charge of $0.6 million related to subleasing excess office facilities.
“Subleasing unneeded office space reinforces our commitment to maintaining a low fixed cost base”, said Jim Taylor, CEO. “Although subleasing created a $0.6 million non-cash charge in the first quarter under GAAP, it was the right thing to do long-term. Excluding this charge, operating profits were $0.5 million in the first quarter. Operating profits decreased during the first quarter as we increased our Resultant workforce by 10% in preparation for pending revenue contracts. I believe the increased trading volume of our stock we saw during the first quarter and the 25% increase in our stock price is an indication that investors believe in our business model of steady cash generation and organic growth. With the addition of a marketing director in the first quarter, we will begin to take our story to the marketplace in fresh, new ways.”
First Quarter 2005 Financial Performance:
• Revenue: First quarter revenue was $7.9 million, which compares favorably to first quarter 2004 revenue of $7.1 million, and is equivalent to the previous quarter.
• Gross Margins: Gross profit margins decreased to 46% from 48% when comparing the first quarter of 2005 with 2004. The decreased margins are primarily attributable to an increase in the cost of the Company’s Resultant workforce in preparation for pending revenue contracts.
• SG&A: Excluding the non-cash charge of $0.6 million for the loss on new sublease contracts, selling, general and administrative costs for the first quarter decreased $0.1 million to $3.1 million from $3.2 million in the first quarter of 2004. This decrease is due primarily to a reduction in legal & accounting costs.
• Cash Flow: In the first quarter of 2005, cash provided by operations was $0.2 million, compared to cash used in operations of $1.0 million during the first quarter of 2004. In 2005, $0.5 million was borrowed under the line of credit and $0.3 million was received as proceeds from the exercise of warrants and options by certain individuals. During the first quarter, the Company repaid $0.3 million of subordinated debt, under an agreement with its senior lender, and used $0.3 million to fund operating activities. On March 31, 2005, $1.1 million was outstanding on subordinated debt, and $1.0 million on the line of credit.
Business Development: During the first quarter of 2005, the Company signed $0.6 million in new and extended commercial business, and in April signed a $2.6 million contract with the US government.
Backlog: As of March 31, 2005, the Company had backlog of $20.1 million, of which $15.6 million is contracted for 2005.
***
Thomas Group, Inc. is an international, publicly traded business consulting firm (TGIS.OB). Thomas Group’s unique brand of process improvement and performance management services enable businesses to enhance operations, improve productivity and quality, reduce costs, generate cash and drive higher profitability. Known as The Results CompanySM, Thomas Group creates and implements customized improvement strategies for sustained performance improvements in all facets of the business enterprise. Thomas Group has offices in Dallas, Detroit, Zug, and Hong Kong. For additional information on Thomas Group, Inc., please go to www.thomasgroup.com.
Safe Harbor Statement under the Private Securities Litigation Reform Act:
Statements in this release that are not strictly historical are “forward looking” statements, which should be considered as subject to the many uncertainties that exist in the Company’s operations and business environment. These uncertainties, which include economic and business conditions that may impact clients and the Company’s performance-oriented fees, timing of contracts and revenue recognition, competitive and cost factors, and the like, are set forth in the Company’s Form 10-K for the year ended December 31, 2004 filed with the Securities and Exchange Commission.
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THOMAS GROUP, INC.
Selected Consolidated Financial Data
(Unaudited)
|
| For the Three Months |
| |||||||
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|
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| 2004 |
| |||||
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| 2005 |
| (Restated) |
| |||||
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| In thousands, except |
| |||||||
Consulting revenue before reimbursements |
| $ | 7,908 |
| $ | 7,084 |
| |||
Reimbursements |
| — |
| 35 |
| |||||
Total revenue |
| 7,908 |
| 7,119 |
| |||||
Cost of sales before reimbursable expenses |
| 4,238 |
| 3,704 |
| |||||
Reimbursable expenses |
| — |
| 35 |
| |||||
Total cost of sales |
| 4,238 |
| 3,739 |
| |||||
Gross profit |
| 3,670 |
| 3,380 |
| |||||
Selling, general and administrative |
| 3,126 |
| 3,252 |
| |||||
Loss on Sublease |
| 610 |
| — |
| |||||
Operating income |
| (66 | ) | 128 |
| |||||
Other expense, net |
| (46 | ) | (90 | ) | |||||
Income before income taxes |
| (112 | ) | 38 |
| |||||
Income taxes (benefit) |
| 15 |
| (12 | ) | |||||
Net income (loss) |
| $ | (127 | ) | $ | 50 |
| |||
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|
|
|
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Earnings (loss) per share: |
|
|
|
|
| |||||
Basic |
| $ | (.01 | ) | $ | .01 |
| |||
Diluted |
| $ | (.01 | ) | $ | .00 |
| |||
|
|
|
|
|
| |||||
Weighted average shares: |
|
|
|
|
| |||||
Basic |
| 10,077 |
| 9,624 |
| |||||
Diluted |
| 10,077 |
| 10,570 |
| |||||
THOMAS GROUP, INC.
Selected Consolidated Financial Data
(Unaudited)
Selected Segment Revenue Data
|
| Three Months Ended |
| ||||
|
| 2005 |
| 2004 |
| ||
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| Amounts in thousands |
| ||||
North America |
| $ | 7,901 |
| $ | 6,625 |
|
Europe |
| — |
| — |
| ||
Asia/Pacific |
| 7 |
| 494 |
| ||
Total Revenue |
| $ | 7,908 |
| $ | 7,119 |
|
Selected Balance Sheet Data
|
| March 31, |
| December 31, |
| ||
|
| Amounts in thousands |
| ||||
Cash |
| $ | 304 |
| $ | 143 |
|
Trade Accounts Receivables |
| 5,623 |
| 5,161 |
| ||
Total Current Assets |
| 6,434 |
| 5,719 |
| ||
Total Assets |
| 7,168 |
| 6,549 |
| ||
Total Current Liabilities |
| 3,236 |
| 2,712 |
| ||
Total Liabilities |
| 4,572 |
| 4,118 |
| ||
Total Stockholders’ Equity |
| $ | 2,595 |
| $ | 2,431 |
|