Thomas Group Inc (TGISQ) SEC Filing 10-K Annual report for the fiscal year ending Wednesday, December 31, 2008

Exhibit 99.1

 

FOR IMMEDIATE RELEASE

 

Thomas Group Announces Fourth Quarter and Year 2008 Results

And Earnings Conference Call

 

Irving, Texas – March 03, 2009 – Thomas Group, Inc. (NasdaqGM: TGIS),

a leading operations and process improvement firm, today announced a net loss of $1.9 million, or negative $0.18 per diluted share, for the fourth quarter of 2008 on revenues of $3.5 million, compared to net income of $1.4 million, or $0.13 per diluted share, on revenues of $13.5 million for the fourth quarter of 2007.

 

For the year ended December 31, 2008, net loss was $5.7 million, or negative $0.52 per diluted share, on revenues of $25.1 million. This reflects a decrease from the year 2007 in which net income was $7.0 million, or $0.63 per diluted share, on revenues of $55.9 million.

 

Earle Steinberg, President and CEO, stated “The deterioration of the economic situation in the fourth quarter of 2008 and continuing into 2009 has made the challenges of our recovery more difficult. We continue to believe that our unique set of expertise and capabilities positions us to provide real and tangible results for clients by improving their profits and reducing their costs more quickly and more effectively. Although not yet evidenced in our financial performance, our prospect list and pipeline is significantly improved both in quantity and quality. However, in the current economy the sales cycle process can be extended and require more levels of approval for new projects, which delays new business.

 

We continue to work hard to reduce our fixed costs, both by the furlough of consultants not actively working on client engagements, and by focusing on expense reduction throughout the organization. This has enabled us to shift to a business model where costs vary much more based on our level of business.

 

We believe that our balance sheet is sufficient to provide the resources to enable us to recover. Our cash balance at year end was $8.3 million, or $0.76 per diluted share. Although a decrease from the prior quarter’s balance of $10.7 million, or $0.97 per diluted share, we expect to receive tax refunds in the first half of 2009 approximately of $3.6 million. We have had a line of credit available to us, but we have not drawn on it for over 3 years. Based on our current forecast, we will not need access to a line of credit in 2009. We have notified the bank that we will not request an extension of our line of credit when it expires on March 31, 2009.

 

We remain confident that we are on the right course to achieve the end results we, as your management team, and you, as our shareholders, expect.”

 

Fourth Quarter and Year 2008 Financial Performance

 

Revenue

Revenue for the fourth quarter of 2008 was $3.5 million, compared to $13.5 million in the fourth quarter of 2007. Consulting revenue from US government clients, represented by our Government practice, was $0.9 million, or 25% of revenue, in the fourth quarter of 2008, compared to $11 million, or 81% of revenue, in the fourth quarter of 2007. Consulting revenue from commercial clients, represented by our Aerospace and Defense, Healthcare, Industrial, Transportation and Logistics, and European practices, was $2.2 million, or 62% of revenue, in the fourth quarter of 2008, compared to $2.2 million, or 16% of revenue, in the fourth quarter of 2007. Reimbursement of expenses was $0.4 million, or 13% of revenue in the fourth quarter of 2008, compared to $0.4 million, or 3% of revenue in the fourth quarter of 2007.