Thomas Group Inc (TGISQ) SEC Filing 10-K Annual report for the fiscal year ending Monday, December 31, 2007

Exhibit 99.1

FOR IMMEDIATE RELEASE

Thomas Group Announces Fourth Quarter and Year 2007 Results, Changes in Government Business, Dividend Suspension, and Earnings Conference Call

Irving, Texas, February 19, 2007 Thomas Group, Inc. (NasdaqGM: TGIS), a leading operations and process improvement firm, today announced fourth quarter 2007 net income of $1.4 million, or $0.13 per diluted share, on revenues of $13.5 million, compared to $3.8 million, or $0.34 per diluted share, on revenues of $14.8 million in the fourth quarter of 2006.  The fourth quarter of 2007 was fully taxed as compared to the fourth quarter of 2006 which included a $1.5 million, or $0.13 per diluted share, tax benefit related to the reversal of the deferred tax asset valuation allowance.

                For the year ended December 31, 2007, net income was $7.0 million, or $0.63 per diluted share, on revenues of $55.9 million.  This reflects a decrease from the year 2006 in which net income was $11.5 million, or $1.04 per diluted share, on revenues of $59.5 million.

                Jim Taylor, President and CEO, stated “Thomas Group achieved improved results from our efforts to expand commercial revenues during 2007. During the last quarter of 2007, we experienced an increase both in the number and scope of our commercial programs.  These positive results though were overshadowed by a slowdown in our government programs in the fourth quarter. We remain committed to furthering our progress in our commercial business and to expanding and replacing our affected government programs across many sectors of the armed services and the Department of Defense.”

Fourth Quarter and Year 2007 Financial Performance:

                Revenue

                Revenue for the fourth quarter of 2007 decreased $1.3 million, or 9%, to $13.5 million from $14.8 million in the fourth quarter of 2006. Total revenue for the year 2007 decreased $3.6 million, or 6%, to $55.9 million from $59.5 million for the year 2006.

                Gross Margins

                Gross profit margins for the fourth quarter of 2007 were 53% and were 54% in the fourth quarter 2006. For the year 2007, gross profit margins dropped 1% to 52% from 53% for the year 2006. The small drop in year-over-year and fourth quarter margins is due to deterioration in our utilization rates related to a slowdown of our government programs in the fourth quarter and higher than normal utilization rates in the first and second quarters of 2006.

                Selling, General & Administrative (SG&A)

                SG&A costs for the fourth quarter of 2007 were $5.2 million, compared to $4.4 million in the fourth quarter of 2006.  The $0.8 million increase is primarily related to a $0.5 million increase in stock-based compensation and executive bonus, a $0.4 million increase in sales and marketing, and $0.1 in other corporate cost. These costs were partially offset by reductions in legal expense of $0.2 million related to the option review that began in the fourth quarter of 2006.

                SG&A costs for the year 2007 were $18.4 million compared to $16.6 million for the year 2006.  The $1.8 million increase is due to $0.9 million increase in legal and accounting expenses, a $0.9 million increase in sales and