GTSI in talks on loan forbearance agreement due to defaults

By Sara Rosenberg

New York, March 3 - GTSI Corp. is currently in negotiations with loan lenders on a forbearance agreement because it defaulted on some financial covenants related to pre-tax earnings for the trailing 12 months, according to a company news release.

In addition, lenders have decided to keep the credit facility maturity date at May 31, instead of allowing for the one-year renewal period.

To that end, GTSI is proceeding to arrange a new financing agreement to meet its longer term borrowing needs.

"We are diligently working with our lenders and are confident that the matters at hand will be resolved in a timely fashion," said Jim Leto, president and chief executive officer, in the release.

"We have a healthy balance sheet, solid collateral for lending and continue to meet all of our financial obligations. In recent quarters, GTSI has struggled with the implementation of our new enterprise resource systems, which in turn exposed weaknesses in our processes and procedures.

"While customer satisfaction has rebounded of late, outstanding delivery issues, excess inventory matters and stabilization of our supply chain remain outstanding issues," Leto added in the release.

GTSI is a Chantilly, Va.-based information technology services provider to the government market.

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