Exhibit 99.1

 

FOR IMMEDIATE RELEASE

 

Thomas Group Announces First Quarter 2011 Results

 

Irving, Texas — May 4, 2011 — Thomas Group, Inc. (NasdaqCM: TGIS),

a global change management and operations improvement consulting firm, today announced a net loss of $0.7 million, or negative $0.31 per diluted share, for the first quarter of 2011 on revenues of $0.8 million, compared to a net loss of $2.9 million, or negative $1.39 per diluted share, on revenues of $1.7 million for the first quarter of 2010.

 

Loss from operations before income taxes decreased to $0.7 million for the first quarter of 2011 compared to a loss from operations before income taxes of $1.3 million for the first quarter of 2010.

 

First Quarter 2011 Financial Performance

 

Revenue

 

Revenue for the first quarter of 2011 was $0.8 million, compared to $1.7 million in the first quarter of 2010. Consulting revenue from US government clients, represented by our Government practice, was $0.5 million, or 69% of revenue, in the first quarter of 2011, compared to $0.3 million, or 16% of revenue, in the first quarter of 2010. Consulting revenue from commercial clients was $0.2 million, or 27% of revenue compared to $1.3 million, or 76% of revenue, in the first quarter of 2010. Reimbursement of expenses was $0.03 million, or 4% of revenue in the first quarter of 2011, compared to $0.1 million, or 8% of revenue in the first quarter of 2010.

 

Gross Margins

 

Gross profit margin for the first quarter of 2011 was 41%, compared to gross profit margin of 31% for the first quarter of 2010. The increase in the quarterly gross margins is related to the variable cost model for staffing consulting projects, minimized bench costs, and the decreased use of outside consultants during the first quarter of 2011.

 

Selling, General & Administrative (SG&A)

 

SG&A costs for the first quarter of 2011 were $1.1 million, compared to $2.0 million in the first quarter of 2010. The $0.9 million decrease is related primarily to a $0.5 million decrease in payroll costs due to employee furloughs and the decline in the number of employees, a $0.1 million decrease in stock-based compensation expense, a $0.1 million decrease in sales commissions and employee bonus, and a $0.2 million decrease in other costs due to a decline in activity as compared to the same period in 2010.

 

Other Income

 

Other income of $140,000 for the first quarter of 2011 included insurance reimbursements and reversal of the prior accrual related to the lawsuit with Earle Steinberg, our former President and CEO. The lawsuit was settled in March 2011 for a total cost to us of approximately $110,000.

 

Income Tax Expense

 

For the first quarter of 2011 we incurred income tax expense of $0.02 million compared to $1.6 million during the first quarter of 2010. In the first quarter of 2010, our cumulative losses began to exceed our cumulative earnings. Additionally, we are not currently profitable, and we determined that as of the end of the first quarter of 2010 it was no longer probable that we will recover our deferred tax asset. The combined tax effect resulted in an income tax expense of $1.6 million for the first quarter of 2010. If we are able to return to sustained profitability, and when we can comply with all of the requirements of ASC 740-10-25, we should be able to recover all or part of our deferred tax asset.

 


The following information was filed by Thomas Group Inc (TGISQ) on Thursday, May 5, 2011 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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