|Over a week ago|
Sidoti to hold a virtual conference » 08:4811/1911/19/20
ACU, ALCO, AP, BWEN, CRAI, CTG, DRAD, INFU, III, NEPH, MYO, TUP, TREC, TNXP, VNRX, PIXY, RICK, STRT, SWKH, TESS, VRME, WYY
Sidoti Virtual Microcap…
Sidoti Virtual Microcap Conference will be held on November 19.
Wax Asset Management, AGS send letter to Computer Task Group » 11:0611/0311/03/20
Wax Asset Management and…
Wax Asset Management and Assurance Global Services, long-term owners who seek to ensure that the companies in which they invest act with integrity and accountability, and significant shareholders in Computer Task Group, sent the following letter to CTG's Board." As shareholders of 6.4% of CTG's common stock, we are writing again as a follow up to our October 19, 2020 letter to the Board. We have not received a response, nor have we seen any insider share purchases or a change in the Board's excessive pay practices. Instead, the Company boasts of its performance in its third quarter release, ignoring CTG's lagging metrics versus its peers. CTG is wasting a rare opportunity for significant value creation. CTG needs to accelerate its transformation to close the gap with its peer group. For years, the Company has attributed its weak staffing revenue performance to a transition away from low margin work and offers no evidence that its managed services provider strategy is working. Additionally, solutions' organic revenue growth appears anemic versus more digitally-focused competitors, since its Q3 increase of $2.2M or 6.5%, is likely attributable to currency translation and the acquisition of Stardust in early 2020. CTG's weak margins offer substantial potential opportunity. We were shocked that CTG's recently-disclosed solutions margins lag industry averages by such a substantial amount, particularly after the Company spent $32M on "strategic" acquisitions in the 2018-2020 period. Since 2015, the Company has told shareholders it can improve overall margins through a turnaround in its US businesses. Yet, after five years and three CEOs, Company margins significantly lag its peers. The Company points to its ten-year European transformation as evidence that its US turnaround plan will work. However, this view ignores the fact that the European transformation required $32M of acquisitions, only increasing operating margins a paltry 1.6% and that the US conglomerate of businesses is radically different than the European business. A reconstituted Board is necessary to direct the creation of a value enhancement plan to add a minimum of 3% to EBITDA margins within the next two years. The underperforming conglomerate of US staffing and solutions businesses must be strategically addressed. Digital transformation offerings and operating processes require a re-examination to reduce cost structure and improve client delivery. Capital allocation strategies should be prepared so that shareholder returns can be further amplified by deploying capital on selective, high ROIC acquisitions and repurchases when shares trade below their intrinsic value. The Company is at a critical point as it is facing a rapidly evolving marketplace as well as shareholder discontent. We look forward to seeing immediate action by the Board regarding these matters."
|Over a month ago|
Computer Task Group not providing guidance » 07:0010/2010/20/20
CTG Executive Vice…
CTG Executive Vice President and CFO John M. Laubacker commented, "Given the ongoing impact of the COVID-19 pandemic on CTG's end markets, the Company will continue to not provide guidance for the Q4 and FY20. We are, however, very encouraged by the success of our Solutions initiatives, which resulted in a significant increase in the Company's gross profit margins in the third quarter of 2020. We remain committed to our strategy of making appropriate, focused investments in Solutions for the remainder of 2020 that will enhance the long-term value of CTG."
Computer Task Group reports Q3 non-GAAP EPS 18c, consensus 4c » 07:0010/2010/20/20
Reports Q3 revenue…
Reports Q3 revenue $88.6M, consensus $84.18M. "Our solid Q3 results demonstrate the continued success of our initiatives to improve operating performance and profitability, with operating and net income increasing year-over-year despite lower revenue," said Filip Gyde, CTG President and CEO. "We are encouraged by this performance and believe our steady improvement reflects our relentless focus on advancing the rapid and ongoing evolution in our Solutions business, the decision to transition away from selective lower margin staffing engagements, and our high utilization of billable resources."
CTG says 'on track' to position company as 'premier global solutions provider' » 08:0909/1009/10/20
CTG issued the following…
CTG issued the following statement: "For the past several years, the CTG Board and management team have been implementing a plan to transform into a high-margin, solutions-centric business. We have made significant progress in this transformation and our strong performance trends over the past eighteen months are proof that our strategy is working. Despite the unprecedented and challenging global business environment, we delivered strong second quarter results with both revenue and non-GAAP operating profit increasing sequentially. These results are directly attributable to our team's dedication and the disciplined execution of our strategy, and contributed to CTG achieving our highest first half operating margin and non-GAAP earnings per share in six years. By continuing to shift our portfolio toward higher margin services and solutions, we will enhance the durability of our business model, improve operating leverage and position the Company to capitalize on opportunities for growth and value creation over the long-term. CTG's directors are actively engaged in overseeing the Company's transformation, and challenge the executive management team to deliver on our strategic objectives and create value for stakeholders. The CTG Board brings significant senior leadership experience and expertise in information technology, strategic planning, risk management and other areas relevant to the Company's strategy and operations. In the last three years the Board has added two new directors who bring fresh perspective, and whose diverse backgrounds add to the Board's deep bench of talent. The CTG Board reviews the Company's pay programs, including those for directors, to ensure they are competitive with our peers and reflect industry best practices. We continue to stand at the forefront of aligning executive and director compensation with performance and total shareholder returns. To that end, the Compensation Committee of the Board, with the support of an independent consulting firm, develops packages that include a significant amount of tailored, performance-based incentives. In January 2018, we eliminated cash compensation for non-employee directors in favor of providing compensation exclusively in CTG shares to directly align the interests of our non-employee directors to those of our shareholders. In addition, in 2017 and 2018 the Board awarded equity-based compensation for senior leadership that included grants and associated vesting solely based upon a 50% and 100% increase in CTG's share price. In both 2019 and 2020, a significant portion of the equity grants to the leadership team included performance targets that must be met before any vesting will occur. Based upon the most recent study performed by the Company's independent consultant, CTG directors are paid at the median as compared with similar sized companies, and other than a minor change to the chairman's fee for participation on the Nomination and Governance Committee, there have been no changes in Board fees since 2014. Prior to October 2014, the position of CEO and Chairman were combined in one position. In October 2014, a non-executive chairman was elected by the Board. The fees paid to the Chairman of the Board, totaling $100,000 annually, were a significant part of the increase in the Board's total compensation when comparing the 2015 Board fees with those from 2014. Our dynamic business generates solid and consistent free cash flow. In recent years, with the support of numerous CTG investors, the Company has developed a program to return excess capital to shareholders in a tax-free manner under a robust share repurchase authorization. We will continue to take steps to build on our momentum and position CTG to capitalize on the significant long-term growth opportunities in our served end markets. We are confident that our expanded solutions offerings during the second half of the year will advance our future growth opportunities and accelerate the achievement of our objectives, including generating substantial long-term value for CTG shareholders."
|Over a quarter ago|
Computer Task Group opens delivery center in Bogota, Colombia » 07:0907/1307/13/20
CTG announced the opening…
CTG announced the opening of a delivery center in Bogota, Colombia to enhance the company's support capabilities and service offerings. CTG chose Colombia as the location for the company's next delivery center for several reasons, including a favorable economic environment, U.S. time zone compatibility, a strong technology infrastructure that will support reliable connectivity, competitive labor costs, and a growing community of Spanish-speaking IT talent.
Computer Task Group launches application testing solutions » 06:5703/0503/05/20
CTCTG is launching…
CTCTG is launching Testing Solutions in North America. Initially focused on the healthcare industry, this comprehensive suite of testing solutions provides expertise in testing healthcare applications and user customizations to avoid errors and defects that can put patient safety at risk and ultimately adversely impact a client's financial performance.
CTG acquires StarDust in all-cash transaction valued at approx. $4.85M » 08:3703/0303/03/20
CTG announced it has…
CTG announced it has acquired StarDust, a leader in testing and quality assurance for digital services based in Marseille, France, and with operations in Montreal, Canada. Highlights of the Transaction: Increases CTG's presence in the high-growth global testing market; Crowdtesting capability provides a faster, more flexible testing solution that CTG can leverage to expand its existing client base; Establishes foothold in France's testing market and extends testing capabilities to the United States and Canada; and Adds approximately $7M in annualized revenue; expected to be immediately accretive to operating results, excluding customary acquisition-related expenses. StarDust, a pure-play testing company, promotes digital quality in France and Canada. The company offers a complete range of testing services, including functional, multilingual, operational, environmental, regression, and application benchmarking, and utilizes a flexible service approach that includes in-lab testers, on-site testers, crowd testers, or a hybrid approach combination. StarDust's offerings cover digital services and test websites, software, mobile applications, and the Internet of Things/connected objects. The company has served over 200 clients across a variety of industries in its nine-year history, and is focused on reducing business risk for its clients and maximizing end-user satisfaction. StarDust's founders and management team will remain with CTG to ensure continuity of client service. They will also work closely with the management teams in both Europe and North America to seamlessly integrate the business into CTG's operations. The all-cash transaction is valued at approximately $4.85M, not including net cash at closing and potential future earn outs, for StarDust's estimated $7M in annualized revenue. CTG funded the purchase price through a drawdown of capital from the Company's revolving credit facility.
CTG confirmed receipt of unsolicited proposal from AGS for $7.00 per share » 10:0601/1401/14/20
CTG confirmed that it…
CTG confirmed that it has received a new unsolicited proposal from Assurance Global Services LLC to acquire the Company for $7.00 per share in cash. Consistent with its fiduciary duties, CTG's Board of Directors, in consultation with its advisors, will carefully review and evaluate the new proposal in the context of CTG's strategic plan to determine the course of action that it believes is in the best interests of the Company and its stakeholders. CTG advises its shareholders to take no action at this time pending completion of the review of the proposal by CTG's Board. Members of CTG's Board and senior management team have held a number of discussions with AGS over the past several months to better understand their views. The company said, "CTG's Board and management team have continued to successfully execute a strategic plan to bolster profitable growth by transforming CTG to a more solutions-centric, higher-margin business. CTG's Board is confident in the significant opportunities ahead and management's ability to drive substantial additional value for the Company's shareholders. CTG looks forward to presenting its 2019 fourth quarter and full year results, and outlook for 2020 in the coming weeks."
CTG selected to implement ERP solution, secures contracts for IT solutions » 09:1101/0801/08/20
CTG announced a number of…
CTG announced a number of recent wins for its IT Solutions offerings in Luxembourg. Most notable among these new engagements, the Company secured a contract with Fonds du Logement for the phase two implementation of a company-wide enterprise resource planning system. FDL is a market leading residential and commercial real estate agency as well as the government appointed manager of the Housing Fund, which facilitates the sustainable development of affordable housing in Luxembourg. CTG's new multi-year engagement with FDL includes the implementation of Microsoft Dynamics ERP and the development of supporting software to integrate certain third-party applications. Prior to CTG completing phase one of the ERP solution in December 2019, the client relied on utilizing numerous applications to manage different areas of its operations, such as accounting, building and office management, and vendor relationships. As part of phase one, CTG's Luxembourg-based team collaborated closely with FDL to reengineer and develop optimized information management workflows into a centralized system. Building on these results and the insight into the client's operations and business gained during phase one, phase two will include implementation of Microsoft Dynamics ERP and the development of middleware for the integration of additional applications currently utilized by FDL. CTG recently began work under the new contract, which is anticipated to extend through at least 2021. In addition, CTG recently secured other sizable, new IT Solutions contracts in Luxembourg. These incremental wins included an engagement with a large civil engineering and construction firm for hardware and software implementation. Then, most recently the Company was awarded a broad solutions project to integrate various IT and infrastructure resources along with the implementation of Promaides software at one of the client's new facilities.