Chantilly government contractor GTSI Corp. reported a 19 percent increase in revenue in 2002 but said the prospect of war in Iraq and the delay by Congress in passing a fiscal 2003 budget contributed to flat earnings in the fourth quarter.
Civilian federal agencies, GTSI's largest customer group, are still waiting for Congress to pass the fiscal 2003 budget and are avoiding new technology projects until it does, said M. Dendy Young, GTSI's chairman and chief executive. The government's fiscal year began in October.
"We certainly see some agencies being cautious, not knowing what their near-term future needs will be," Young said. "We have seen reluctance to buy in the Air Force. Presumably they want to keep their money flexible in case of war."
Shares of GTSI closed yesterday at $9.90, down $2.05.
During the fourth quarter, the computer reseller reported revenue of $280.1 million, compared with $280 million in the year-earlier period. Earnings were also flat. The company reported a profit of $5.1 million (54 cents a share), compared with $5 million (54 cents) in the fourth quarter of 2001.
For the year, profit increased to $9.5 million from $4.5 million in 2001. Revenue reached $934.7 million for 2002, up from $783.5 million.
GTSI has also focused on increasing its presence in the state and local market. The market accounts for only 5 percent of the firm's revenue, but company officials have said they want to increase that share to at least 10 percent. States and municipalities constitute a large potential market, especially as spending on homeland security increases, company officials said.