TechTeam Global Turns To Loss On Fees
The Southfield IT and business process outsourcing provider TechTeam Global Inc. (Nasdaq: TEAM) reported a third quarter loss of $8.4 million or 78 cents a share vs. net income of $900,000 or 8 cents a share in the third quarter of 2009.
This year's third quarter included a non-cash impairment charge of $9.4 million and $1.3 million of expense for professional fees related primarily to the sale of TechTeam Government Solutions Inc. Excluding these one-time items, the company would have achieved net income from continuing operations of $934,000, or 9 cents a share in the third quarter.
Total revenue was $46.2 million in the third quarter 2010, down 8.3 percent from $50.3 million in the third quarter of 2009.
On Oct. 5, after the end of the third quarter, the company completed the previously announced sale of TechTeam Government Solutions to Jacobs Engineering Group Inc. (NYSE: JEC) for $43 million in cash. Also, on Nov. 1, TechTeam announced an agreement to be purchased by Brazil's Stefanini International Holdings Ltd., a privately held global provider of IT consulting, integration and development, and outsourcing services.
For the nine months, the loss was $10.9 million or $1.02 a share, vs. net income of $3.8 million or 36 cents a share in the first nine months of 2009. Revenue for the nine months was $136.8 million, down 12.5 percent from $156.4 million in the first nine months of 2009.
TechTeam said that at the end of the quarter, it was not in compliance with debt covenants under its credit agreement due to the goodwill impairment recorded.
Said TechTeam president and CEO Gary J. Cotshott: "We believe that combining our business with Stefanini IT Solutions will allow us to deliver a set of services having greater breadth and depth across an expanded geographic footprint to our customers and prospects around the world. We are looking forward to the completion of a successful tender offer and merger."
More at www.techteam.com.
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