Tony, I'm still digesting recent news, luckily i took profits - see my last post.
What's your take on the news?
-------------------------
Thomas Group Projects Loss for Fourth Quarter; New Strategies on Track
for Rebound in 1997
IRVING, TEXAS (Jan. 24) BUSINESS WIRE -January 24, 1997--Thomas Group
Inc. (NASDAQ: TGIS) today announced that it will record a loss during
the fourth quarter of 1996. While full year 1996 revenues are expected
to exceed those of 1995, revenues for the fourth quarter of 1996 are
expected to be approximately $4 million below the $19 million realized
in the previous year.
The company had previously predicted a profit in the fourth quarter of
1996, but is currently projecting a loss of $.35 to $.40 per share. This
anticipated loss compares to a profit of $.33 per share in the fourth
quarter of 1995. The shortfall is based on several major factors
including; delays in program starts, the costs of personnel adjustments,
and losses at Interlink due to spending on product improvements.
Alex Young, President, stated, "The current difficulties Thomas Group is
experiencing in sustaining its sales growth are the result of two
factors: 1) Significant delays in anticipated business closings around
the world. This resulted in decreased revenues in the fourth quarter of
1996. 2) Increased marketing spending. Traditionally, referencability
and word of mouth advertising have been adequate to provide for planned
revenue growth. Management increased spending in 1996 on marketing and
visibility programs and to establish specific industry business units.
These investments included the opening of our Singapore office for
future growth in the Asia/Pacific region, and the addition of industry
specific resources in business units such as Automotive and Aviation.
These investments should provide renewed growth in 1997. The related
expenses, however, will reduce our short term profitability."
Philip Thomas, CEO, elaborated, "While contract delays in all regions
hurt 1996 performance, sales in the United States are expected to be up
significantly versus 1995. We are disappointed with our European results
and have revamped our New Business Acquisition process based on our
success in the U.S. This has resulted in a doubling of qualified leads
entering the first quarter of 1997."
Mr. Thomas continued, "We are encouraged by the positive results we are
beginning to see from our approximate $4.7 million after tax investments
in marketing programs and our new Business Units. For example, we have
scheduled 12 CEO Center workshops for the first quarter of 1997. This is
significant since we completed only 18 workshops for the entire year of
1996. Roughly 80 percent of all CEO Center workshops have historically
resulted in signed contracts, therefore, we are encouraged by the growth
investments we have made." Initial success of the company's investment
strategy is reflected by: - the Automotive business unit securing its
first contract with one of the "Big-Three" auto makers in Detroit
effective first quarter 1997 and significant new business potential
being developed with automotive suppliers; - the Aviation business unit
scheduling its first CEO workshop with a major aircraft manufacturer
this month; - a Hong Kong company's attendance at a CEO workshop in
December, which would not have been possible without the new local
presence in Singapore; - a CEO workshop completed based on a reply to
our advertisements in Leaders magazine; and - the European backlog of
qualified leads more than doubling in the past six months resulting in
two new significant CEO workshop commitments.
In addition, Thomas Group's newly developed product, Strategic
Implementation Services, will be launched with a prestigious German
client in the first quarter of 1997.
The company will announce final fourth quarter and year-end results the
first week of March, 1997.
Thomas Group is a professional service provider in the management
consulting industry. The company has a proprietary method of improving
its clients' competitiveness and is dedicated to better serving a
broadening customer base by expanding its products through internal
product development and acquisitions.
Thomas Group partners with clients to improve performance on an
incentive basis, allowing the company to participate in its clients'
positive financial results. Clients that have implemented Total Cycle
Time have experienced quantifiable improvements in their businesses.
Spanning a variety of industries, the company has a very impressive
clientele, which has included Rubbermaid, W.W. Grainger, Motorola,
Philips, Siemens, Moore and Schindler. |
