Technology Solutions Company Announces 2008 Third Quarter Financial Results

Wed Nov 12, 2008 5:04pm EST

* Reuters is not responsible for the content in this press release.

CHICAGO--(Business Wire)--
Technology Solutions Company, (TSC) (Nasdaq: TSCC) today announced
its third quarter financial results for the quarter ended September
30, 2008.

   Third Quarter Results

   --  Revenues before reimbursements from continuing operations were
        $1.4 million for the third quarter of 2008, a decrease of $0.6
        million or 30 percent from the second quarter of 2008 amount
        of $2.0 million. As compared with the third quarter of 2007
        revenue before reimbursements from continuing operations
        amount of $2.5 million, revenue before reimbursements for the
        third quarter of 2008 declined by $1.1 million, or 44 percent.

   --  Net loss was ($0.9) million for the third quarter of 2008, a
        decline of $2.4 million from the second quarter of 2008 net
        income of $1.5 million, when we recorded the sale of the SAP
        Practice. As compared with the third quarter of 2007 net loss
        of ($2.3) million, net loss for the third quarter of 2008
        improved by $1.4 million or 61 percent.

   --  Net loss per share was ($0.35) for the third quarter of 2008,
        a decline of $0.93 per share from the second quarter of 2008
        net income per share of $0.58, when we recorded the sale of
        the SAP Practice. As compared with the third quarter of 2007
        net loss per share of ($0.89), the net loss per share for the
        third quarter of 2008 improved by $0.54, or 61 percent.

   --  Days Sales Outstanding ("DSO") were 50 days at September 30,
        2008 compared to 45 days at June 30, 2008, an increase of 5
        days. DSO improved by 21 days for the third quarter of 2008
        from the 71 days realized at September 30, 2007, continuing
        marked DSO improvement when compared to 2007 results.

   --  Cash, cash equivalents, short-term investments, inclusive of
        the promissory note due from the sale of the SAP Practice, at
        September 30, 2008 was $9.8 million, a decrease of $2.4
        million, from the $12.2 million on hand as of June 30, 2008
        and a decline of $0.9 million from the amount on hand at
        September 30, 2007. In October, 2008, the Company collected
        its first installment of $0.4 million due under the promissory
        note from the sale of the SAP Practice.

   Business Commentary

   Milton G. Silva-Craig, President and CEO of TSC, stated: "The
third quarter proved to be a challenging quarter well below our
internal expectations and not in line with our demonstrated progress
over the prior three quarters. Unprecedented market conditions did
affect certain client buying decisions impacting our ability to close
deals in a timely manner and thus generate expected revenues. Our
focus in the coming quarter is on improving our financial performance
through further differentiation and penetration of our software and
services, while continuing to deliver and grow high value services to
our existing customers."

   Conference Call

   TSC's management will host a conference call on Thursday, November
13, 2008, at 8 a.m. CST. The dial-in number for the call is
866-550-6338 and the conference pass code is 2497111. For
international participants, the dial-in number is 347-284-6930. The
live broadcast of conference call will also be available online on the
Investors section of the Technology Solutions Company's website at:

   http://phx.corporate-ir.net/phoenix.zhtml?p=irol-eventDetails&c=11
2966&eventID=2015127. (Due to its length, this URL may need to be
copied/pasted into your Internet browser's address field. Remove the
extra space if one exists.)

   It is recommended that participants using the Web access the site
at least 15 minutes before the conference call begins to download and
install any necessary audio software. The call can also be heard
online at http://www.firstcallevents.com. For those who cannot access
the live broadcast, a replay of the call will be available until
midnight CST on November 27, 2008 by dialing 888-203-1112. The
international replay dial-in number is 719-457-0820. The pass code for
the replay is 2497111.

   About Technology Solutions Company

   Technology Solutions Company (TSC) is a software and services firm
providing business solutions that partners with clients to expose and
leverage opportunities that create, deliver, visualize and sustain
customer value. Our outside-in, fact-based approach quantifies value
through the eyes of our client's customers, unleashing the potential
for profit and growth. TSC serves the healthcare and manufacturing
industries through tailored business solutions that deliver
extraordinarily rapid and guaranteed results. For more information,
please visit: www.techsol.com.

   CERTAIN FORWARD-LOOKING STATEMENTS AND FACTORS THAT MAY AFFECT
FUTURE RESULTS

   This press release contains or may contain certain forward-looking
statements concerning the Company's financial position, results of
operations, cash flows, business strategy, budgets, projected costs
and plans and objectives of management for future operations as well
as other statements including words such as "anticipate," "believe,"
"plan," "estimate," "expect," "intend," and other similar expressions.
These forward-looking statements involve significant risks and
uncertainties. Although the Company believes that the expectations
reflected in such forward-looking statements are based on reasonable
assumptions, readers are cautioned that no assurance can be given that
such expectations will prove correct and that actual results and
developments may differ materially from those conveyed in such
forward-looking statements. The Company claims the protection of the
safe harbor for forward-looking statements contained in the Private
Securities Litigation Reform Act of 1995 for all forward-looking
statements. Important factors that could cause actual results to
differ materially from the expectations reflected in the
forward-looking statements in this press release include, among
others, the Company's ability to manage decreased revenue levels; the
Company's need to attract new business and increase revenues; the
Company's declining cash position; the Company's ability to manage
costs and headcount relative to expected revenues; the Company's
ability to successfully introduce new product and service offerings;
the Company's dependence on a limited number of clients for a large
portion of its revenue; the potential loss of significant clients; the
Company's ability to attract new clients and sell additional work to
existing clients; the Company's ability to attract and retain
employees; the rapidly changing nature of information technology
services, including the Company's ability to keep pace with
technological and market changes and its ability to refine and add to
existing service offerings; the lack of shareholder approved stock
options available for grants by the Company to retain existing
employees; the Company's ability to successfully integrate the Charter
business with its business; and changing business, economic or market
conditions and changes in competitive and other factors, all as more
fully described herein and in the Company's filings with the
Securities and Exchange Commission, press releases and other
communications. Forward-looking statements are not guarantees of
performance. Such forward-looking statements speak only as of the date
on which they are made and, except as may be otherwise required by
law, the Company does not undertake any obligation to update any
forward-looking statement to reflect events or circumstances after the
date of this press release. If the Company does update or correct one
or more forward-looking statements, investors and others should not
conclude that the Company will make additional updates or corrections
with respect thereto or with respect to other forward-looking
statements. Actual results may vary materially.

-0-
*T

                     TECHNOLOGY SOLUTIONS COMPANY
                CONSOLIDATED STATEMENTS OF OPERATIONS
                (In thousands, except per share data)



                              For the Three Months For the Nine Months
                              Ended September 30,  Ended September 30,
                              -------------------- -------------------
                                 2008      2007      2008      2007
                              ---------- --------- --------- ---------
CONTINUING OPERATIONS             (unaudited)          (unaudited)

REVENUES:
  Revenues before
   reimbursements             $   1,418  $  2,482  $  5,667  $  8,189
  Reimbursements                    224       259       831     1,002
                              ---------- --------- --------- ---------
       Total Revenues             1,642     2,741     6,498     9,191
                              ---------- --------- --------- ---------

COSTS AND EXPENSES:
  Project personnel               1,080     1,962     3,909     6,153
  Other project expenses            373       271       943     1,389
  Reimbursable expenses             224       259       831     1,002
                              ---------- --------- --------- ---------
       Cost of Services           1,677     2,492     5,683     8,544
  Management and
   administrative support           870     2,446     2,071     8,544
  Intangible asset
   amortization                      49        49       147       156
  Intangible asset impairment        --        --       106       143
                              ---------- --------- --------- ---------

       Total Cost and
        Expenses                  2,596     4,987     8,007    17,387
                              ---------- --------- --------- ---------

OPERATING LOSS FROM
CONTINUING OPERATIONS              (954)   (2,246)   (1,509)   (8,196)
                              ---------- --------- --------- ---------

OTHER INCOME:
  Net investment income              67       126       290       446
                              ---------- --------- --------- ---------

LOSS FROM CONTINUING
 OPERATIONS
BEFORE INCOME TAXES AND
DISCONTINUED OPERATIONS            (887)   (2,120)   (1,219)   (7,750)

INCOME TAX PROVISION                 --        --        --        --
                              ---------- --------- --------- ---------

NET LOSS FROM CONTINUING
 OPERATIONS                   $    (887) $ (2,120) $ (1,219) $ (7,750)
                              ---------- --------- --------- ---------

DISCONTINUED OPERATIONS
Net income/(loss) from
 discontinued operations            (14)     (146)    1,957      (245)
                              ---------- --------- --------- ---------

NET INCOME/(LOSS)             $    (901) $ (2,266) $    738  $ (7,995)
                              ========== ========= ========= =========
BASIC EARNINGS PER SHARE
 Income (loss) from
  Continuing Operations       $   (0.35) $  (0.83) $  (0.47) $  (3.06)
 Income (loss) from
  Discontinued Operations     $    0.00  $  (0.06) $   0.76  $  (0.09)
 Net income (loss)            $   (0.35) $  (0.89) $   0.29  $  (3.15)

WEIGHTED AVERAGE SHARES -
 BASIC                            2,566     2,548     2,564     2,534

DILUTED EARNINGS PER SHARE
 Income (loss) from
  Continuing Operations       $   (0.35) $  (0.83) $  (0.46) $  (3.06)
 Income (loss) from
  Discontinued Operations     $    0.00  $  (0.06) $   0.74  $  (0.09)
 Net income (loss)            $   (0.35) $  (0.89) $   0.28  $  (3.15)

WEIGHTED AVERAGE SHARES -
 DILUTED                          2,566     2,548     2,661     2,534
*T

-0-
*T

                     TECHNOLOGY SOLUTIONS COMPANY
                     CONSOLIDATED BALANCE SHEETS
                  (In thousands, except share data)

                                             September 30 December 31,
                                                 2008         2007
                                             ------------ ------------
                                              (Unaudited)  (Audited)
                                ASSETS
----------------------------------------------------------------------
CURRENT ASSETS:
  Cash and cash equivalents                    $   2,266    $   1,799
  Short-term investments
                                                   6,748        9,169
  Receivables, less allowance for doubtful
   receivables of $10                                967        3,513
  Note receivable                                    750           --
  Software development costs                         568           --
  Other current assets                               416          242
                                             ------------ ------------
       Total current assets                       11,715       14,723

COMPUTERS, FURNITURE AND EQUIPMENT, NET              197          193

INTANGIBLE ASSETS, NET                               264          518
                                             ------------ ------------

   Total assets                                $  12,176    $  15,434
                                             ============ ============

                 LIABILITIES AND STOCKHOLDERS' EQUITY
----------------------------------------------------------------------
CURRENT LIABILITIES:
   Accounts payable                            $   1,003    $   1,539
   Accrued compensation and related costs            535        2,645
   Other current liabilities                         135        1,078
                                             ------------ ------------
       Total current liabilities                   1,673        5,262
                                             ------------ ------------

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY:
   Preferred stock                                    --           --
   Common stock, shares issued - 2,677,452;
    shares outstanding - 2,565,866 and
    2,559,247                                         27           27
   Capital in excess of par value                129,145      129,100
   Accumulated deficit                          (115,079)    (115,816)
   Treasury Stock, at cost, 111,586 and
    118,205 shares                                (3,162)      (3,349)
   Accumulated other comprehensive income:
       Unrealized (loss) on short-term
        investments                                 (428)          --
       Cumulative translation adjustment              --          210
                                             ------------ ------------
         Total stockholders' equity               10,503       10,172
                                             ------------ ------------
         Total liabilities and stockholders'
          equity                               $  12,176    $  15,434
                                             ============ ============
*T

For more information:
Technology Solutions Company
Timothy Rogers, 312-228-4500
Chief Financial Officer
timothy_rogers@techsol.com

Copyright Business Wire 2008