GTSI suffers from ERP system

Because of difficulties in implementing a new enterprise resource planning (ERP) system, GTSI has had a weak second quarter and may have to lower its expectations for its plans as far as two years out.

Due to the internal distractions arising from the ERP project, the company has had lower bookings and shippings than expected for the quarter, which ended June 30, according to GTSI. Its plan to double its revenue by 2007 is now in doubt, according to company officials.

"The second quarter has been a tough one for our customers, vendor partners and employees," said Dendy Young, chairman and chief executive officer of GTSI, in a written statement. "We have been experiencing difficulties in delivering products to many customers in a timely manner due to software problems with our ERP implementation. This has caused disruption to some customer relationships."

Most of the issues have been resolved, however, he said.

The financial figures for the quarter are not yet available. Due to doubts about data that the ERP system was generating, the company suspended the reporting of monthly revenue and some other financial data May 31, Young said.

Last year, GTSI launched its strategic plan, with the goal of doubling revenue by 2007. The second quarter problems and a weak first quarter, however, have made it unlikely that the company can meet that target, according to a GTSI statement.

"Overall, it has been a difficult and distracting period for our company," Young said. "We look forward to getting back into a growth mode."

GTSI stock at of 10:20 a.m. today was $7.99, down 26 cents, or 3.15 percent.


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