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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-K
 ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 For the fiscal year ended December 31, 2010
 Commission File Number: 001-34871
 GTSI CORP.
  Delaware
    
    54-1248422(State or other jurisdiction of
    
    (I.R.S. Employerincorporation or organization)
    
    Identification No.)2553 Dulles View Drive, Suite 100, Herndon, VA
    
    20171-5219(Address of principal executive offices)
    
    (Zip Code)
 703-502-2000
  Title of each class
    
    Name of each exchange on which registeredCommon Stock, $0.005 par value
    
    NASDAQ Global Market
 None
 o þ
 o þ
 þ o
 o o
 o
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer o
    
    Smaller reporting company þ(Do not check if a smaller reporting company)
 o þ
   DOCUMENTS INCORPORATED BY REFERENCE




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##### 



CONTENTS
 PagePART IItem 1. Business
    
    
    1Item 1A. Risk Factors
    
    
    11Item 1B. Unresolved Staff Comments
    
    
    18Item 2. Properties
    
    
    18Item 3. Legal Proceedings
    
    
    19Item 4. (Removed and Reserved)
    
    
    21PART IIItem 5. Market for Registrants Common Equity, Related Stockholder Matters and Issuer
Purchases of Equity Securities
    
    
    21Item 6. Selected Financial Data
    
    
    24Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    26Item 7A. Quantitative and Qualitative Disclosures About Market Risk
    
    
    40Item 8. Financial Statements and Supplementary Data
    
    
    41Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure
    
    
    69Item 9A. Controls and Procedures
    
    
    69Item 9B. Other Information
    
    
    69PART IIIItem 10. Directors, Executive Officers and Corporate Governance
    
    
    70Item 11. Executive Compensation
    
    
    70Item 12. Security Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters
    
    
    70Item 13. Certain Relationships and Related Transactions, and Director Independence
    
    
    70Item 14. Principal Accounting Fees and Services
    
    
    70PART IVItem 15. Exhibits, Financial Statement and Schedules
    
    
    71Signatures
    
    
    72Schedule II Valuation and Qualifying Accounts
    
    
    73Exhibit Index
    
    
    74Exhibit 10.31Exhibit 23.1Exhibit 23.2Exhibit 31.1Exhibit 31.2Exhibit 32Exhibit 99.1




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Disclosure Regarding Forward-Looking Statements
 Readers are cautioned that this Annual Report on Form 10-K contains forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended, (Exchange Act) relating to our operations that are
based on our current expectations, estimates and projections. Words such as expect, believe,
anticipate, plan, intend and similar expressions are used to identify these forward-looking
statements. These statements are not guarantees of future performance and involve risks,
uncertainties and assumptions that are difficult to predict. Our actual results may differ
materially from what is expressed or projected in these forward-looking statements. The reasons for
this include the factors discussed in Item 1A, Risk Factors, of this Annual Report on Form 10-K . We
specifically disclaim any obligation to update these forward-looking statements. These
forward-looking statements should not be relied on as representing our estimates or views as of any
subsequent date.
 
 PART I
 
 ITEM 1.
    
    BUSINESS
 Overview
   2010
    
    
    2009
    
    
    2008Federal Government
    
    
    67
    %
    
    
    72
    %
    
    
    70
    %Prime Contractors
    
    
    29
    %
    
    
    23
    %
    
    
    23
    %State and Local Governments
    
    
    4
    %
    
    
    5
    %
    
    
    7
    %Total
    
    
    100
    %
    
    
    100
    %
    
    
    100
    %
    
    
    Hardware integration
 
    
    Customer image propagation
 
    
    Automated system diagnostics and data capture
  1




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##### Table of Contents




    
    Asset tagging and asset management
 
    
    Complex configurations, burn in, and testing of a variety of IT solutions
 
    
    Inventory management and delivery services to support customer project schedules
  Administrative Agreement with the U.S. Small Business Administration
  Business Strategy
   Continue Focusing on the Government IT Market
  Leverage Technology Lifecycle Management (TLM)
   2




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Retain and Obtain Government Contracts and Utilize Flexible Contract Vehicles
  Continue to expand our Solution and Services
  Provide a High-Quality Centralized Source for Procuring IT Products and Services
  Customers
 Federal Government & Prime Contractors
  2010
    
    
    2009
    
    
    2008Department of Defense
    
    
    30
    %
    
    
    38
    %
    
    
    43
    %Civilian Agencies and Departments
    
    
    40
    %
    
    
    37
    %
    
    
    32
    %Prime Contractors
    
    
    30
    %
    
    
    25
    %
    
    
    25
    %Total
    
    
    100
    %
    
    
    100
    %
    
    
    100
    %
 State and Local
   3




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Contracts
    General Services Administration
    Indefinite Delivery/Indefinite Quantity(IDIQ)
   4




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Blanket Purchase Agreements
   Task Order Contracts
  State and Local
      5




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Open Market
  Solutions, Services and Products
  Technology Lifecycle Management (TLM)
  Solutions
  
    
    Client, including Desktop Virtualization and Thin Client
 
    
    Networking, including Unified Communications and Visual Information Systems
 
    
    Data Center, including Server Virtualization, Power & Cooling, and Disaster Recovery
 
    
    Security  Cyber and Physical
 Services
    6




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Professional Services
   Integration Services
   Support Services
    7




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Financial Services
  Products
   Sales Type
    
    2010
    
    
    2009
    
    
    2008Hardware
    
    $
    463.1
    
    
    
    69.5
    %
    
    $
    495.6
    
    
    
    65.1
    %
    
    $
    585.7
    
    
    
    71.3
    %Software
    
    
    130.2
    
    
    
    19.5
    %
    
    
    182.4
    
    
    
    23.9
    %
    
    
    159.7
    
    
    
    19.4
    %Services
    
    
    51.1
    
    
    
    7.7
    %
    
    
    55.6
    
    
    
    7.3
    %
    
    
    56.5
    
    
    
    6.9
    %Financing
    
    
    22.3
    
    
    
    3.3
    %
    
    
    28.3
    
    
    
    3.7
    %
    
    
    19.3
    
    
    
    2.4
    %Total
    
    $
    666.7
    
    
    
    100.0
    %
    
    $
    761.9
    
    
    
    100.0
    %
    
    $
    821.2
    
    
    
    100.0
    %
 Strategic Partner Relationships
    
    
    A superior ability to design, procure, install, operate, and refresh solutions through
our infrastructure as a service business model
 
    
    A gateway to the complex government market through a significant number of diverse
contract vehicles
 
    
    Access to government customers through GTSIs proactive sales force providing
solutions, services and products
 
    
    Lower cost overhead associated with government contractor compliance and procurement
regulations
   8




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Inventory Management
    Marketing and Sales
    Competition
   9




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
    
    Past performance within the government market
 
    
    Expertise in government procurement processes where standardized contracts exist and
where recommended changes will be implemented
 
    
    Existing customer and partner relationships for which there is traditionally a high
barrier to entry
 
    
    Technical expertise
 
    
    Logistical capability
 
    
    Customer service and support
   Backlog
  Employees
   Available Information
 www.sec.gov
  10




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ITEM 1A.
    
    RISK FACTORS
  Compliance with GTSIs administrative agreement with the U.S. Small Business Administration (the
SBA Agreement) and the outcome of the Federal Government investigations thereunder may have a
material adverse effect on the Company.
  We may be adversely affected by increased governmental and regulatory scrutiny or negative
publicity.
  GTSIs continuing disputes with EyakTek and its other members may have a material adverse
effect on our financial performance.
    11




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We believe that EyakTeks future financial performance may be adversely affected by recent
developments including EyakTeks graduation from the SBAs Section 8(a) BD Program, the SBA
suspension of EyakTeks subsidiary EG Solutions, LLC from Federal Government contracting and
possible increased Federal Government scrutiny regarding Alaska native corporations.
  We depend heavily on Federal Government contracts. A delay in the Federal budget process or a
Federal Government shutdown may adversely affect our sales and gross margins, operating results and
cash flows.
    12




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We rely on a small number of large transactions for significant portions of our sales and gross
margins, and our operating results and cash flows may decline significantly if we fail to secure
additional large transactions.
  If the Company is unable to attract and retain key management and sales personnel, it might not be
able to find suitable replacements on a timely basis, and the Companys business may be disrupted.
  We continue to shift our business model from a reseller of products to a high-end solutions
provider and this new model has certain risks, including increased competition, which may impact
future results.
   13




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
    
    Expertise in government procurement processes where standardized contracts exist
 
    
    Existing customer and vendor relationships (for which there is traditionally a high
barrier to entry)
 
    
    Technical expertise
 
    
    Logistical capability
 
    
    The ability of our clients or competitors to hire and retain project managers and other
senior technical staff
 
    
    The price at which others offer comparable technical solutions
 
    
    The extent of our competitors responsiveness to client needs
  Any issue that compromises our relationship with Federal Government agencies would cause serious
harm to our business.
  
    
    Our performance on individual contracts and delivery orders
 
    
    The strength of our professional reputation
 
    
    The relationships of our key executives with customer personnel
 
    
    Our compliance with complex procurement laws and regulations related to the formation,
administration and performance of Federal Government contracts
    14




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Adverse changes in Federal Government fiscal spending may have a negative effect on our sales,
gross margin, and cash flow.
  
    
    A significant decline in spending by the Federal Government in general or by specific
departments or agencies in particular
 
    
    Changes in the structure, composition and/or buying patterns of the Federal Government
 
    
    The adoption of new laws or regulations changing procurement practices
 
    
    Delays in the payment of our invoices by government payment offices
  If we fail to comply with our Amended Credit Agreement, we may not be able to continue to operate
our business.
  
    
    Maintain Tangible Net Worth not less than or equal to $45 million as of the end of each
fiscal month
 
    
    Maintain Ratio of Total Liabilities to Tangible Net Worth not greater than 5.25 to 1.00
as of the end of each fiscal month
 
    
    Maintain Current Ratio not less than (i) 1.20 to 1.00 as of the last business day of
the fiscal months of January, February, March, April, May, June, October, November and
December and (ii) 1.15 to 1.00 as of the last business day of the fiscal months of July,
August and September.
 
    
    Maintain minimum Total Debt Service Coverage Ratio of 1.25 to 1.00 as of the end of
each fiscal month
   Our business may be negatively affected by current global economic and credit conditions.
   15




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Infrastructure failures may have a material adverse effect on our business.
  Any material weaknesses in our internal control over financial reporting may have a material
adverse effect on our business and a negative impact on our stock price.
  Changes in accounting standards and subjective assumptions, estimates and judgments by management
related to complex accounting matters may significantly affect our financial results.
  If we fail to align costs with our sales levels, net losses may result in future years.
    16




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Our quarterly sales, operating results and cash flows are volatile, which makes our future
financial results difficult to forecast.
  
    
    The seasonality of our business due to the Federal Governments buying and funding
patterns
 
    
    Fluctuations in our gross margins due to variations in the mix of products sold and
excess or obsolete inventory charges
 
    
    The number, size and scope of orders from our customers
 
    
    Demand for our services generated by strategic partnerships and certain prime
contractors
 
    
    Availability of price protection, purchase discounts and rebate programs from vendors
 
    
    Contractual terms and degree of completion of projects
 
    
    Changes in our sales cycles as we move towards solution selling
  Because we sometimes work with third parties, any failure by these third parties to satisfactorily
perform their obligations may hurt our reputation, operating results and competitiveness.
  Our dependence on certain strategic partners (vendors) makes us vulnerable to the extent we rely on
them.
   17




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Any potential future acquisitions, strategic investments or mergers may subject us to significant
risks, any of which may harm our business.
  
    
    Diversion of management attention from running our existing business
 
    
    Possible additional material weaknesses in internal control over financial reporting
 
    
    Increased expenses including legal, administrative and compensation expenses related to
newly hired employees
 
    
    Increased costs to integrate the technology, personnel, customer base and business
practices of the acquired company with our own
 
    
    Potential exposure to material liabilities not discovered in the due diligence process
 
    
    Potential adverse effects on our reported operating results due to possible write-down
of goodwill and other intangible assets associated with acquisitions
 
    
    Acquisition financing may not be available on reasonable terms or at all
  Any potential future new lines of business may subject us to significant risks, any of which may
harm our business.
   
 ITEM 1B.
    
    UNRESOLVED STAFF COMMENTS
  
 ITEM 2.
    
    PROPERTIES
     18




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ITEM 3.
    
    LEGAL PROCEEDINGS
      EyakTek Arbitration and Certain Related Matters
   19




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Law Firm Investigations
   20




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Other Matters
  
 ITEM 4.
    
    (REMOVED AND RESERVED).
 
 PART II
 
 ITEM 5.
    
    MARKET FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF
EQUITY SECURITIES
  Price Range of Common Stock
  2010
    
    
    2009Quarter
    
    High
    
    
    Low
    
    
    High
    
    
    LowFirst
    
    $
    6.28
    
    
    $
    5.05
    
    
    $
    5.99
    
    
    $
    3.40Second
    
    $
    6.67
    
    
    $
    5.46
    
    
    $
    6.09
    
    
    $
    3.68Third
    
    $
    7.05
    
    
    $
    5.04
    
    
    $
    8.11
    
    
    $
    5.35Fourth
    
    $
    7.25
    
    
    $
    3.55
    
    
    $
    8.04
    
    
    $
    4.96
  Dividends
   21




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Issuer Purchases of Equity Securities
  Equity Compensation Plans
  Number of Shares to
    
    
    
    
    
    
    Number of Sharesbe Issued upon
    
    
    
    
    
    
    Remaining Available forExercise / Lapse of
    
    
    Weighted
    
    
    Future Issuance UnderOutstanding Options /
    
    
    Average
    
    
    Equity CompensationRestricted Stock
    
    
    Exercise Price of
    
    
    Plans (excluding sharesAwards
    
    
    Outstanding
    
    
    reflected in column (a))Plan Category
    
    (a)
    
    
    Options
    
    
    ( c )Equity compensation
plans approved by
stockholders
by stockholders
    
    
    1,404,382
    
    
    $
    8.22
    
    
    
    1,134,164
  22




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PERFORMANCE GRAPH
 1
 Dec. 31,
    
    
    Dec. 31,
    
    
    Dec. 31,
    
    
    Dec. 31,
    
    
    Dec. 31,
    
    
    Dec. 31,2005
    
    
    2006
    
    
    2007
    
    
    2008
    
    
    2009
    
    
    2010GTSI Corp.
    
    
    100.00
    
    
    
    131.89
    
    
    
    140.86
    
    
    
    85.71
    
    
    
    70.86
    
    
    
    67.29NASDAQ Market Index
    
    
    100.00
    
    
    
    110.25
    
    
    
    121.88
    
    
    
    73.10
    
    
    
    106.22
    
    
    
    125.36SIC Code Index1
    
    
    100.00
    
    
    
    111.83
    
    
    
    100.43
    
    
    
    62.51
    
    
    
    118.62
    
    
    
    159.20
 COMPARES 5-YEAR CUMULATIVE TOTAL RETURN
AMONG GTSI CORP., NASDAQ MARKET INDEX AND
SIC CODE INDEX
 
 1
    
    The 34 companies listed in SIC Code 5045 are: ADPT CORP.; AVNET, INC.; BEIJING
CENTURY HEALTH MEDICAL, INC.; CIRTRAN CORPORATION; CISTERA NETWORKS, INC.; CONTINENTAL INFORMATION
SYSTEMS CORPORATION; DEGAMA SOFTWARE SOLUTIONS, INC.; DIGITAL RIVER, INC.; DUALSTAR TECHNOLOGIES
CORPORATION; EUROPEAN MICRO HOLDINGS, INC.; GTSI CORP.; HENRY JACK & ASSOCIATES, INC; HITACHI, LTD.
ADR; HXT HOLDINGS, INC.; IB3 NETWORKS, INC.; IFS INTERNATIONAL HOLDINGS, INC.; INGRAM MICRO, INC.;
INX, INC.; KONINKLIJKE PHILIPS ELECTRONICS, N.V. ADR; NAVARRE CORPORATION; NETTEL HOLDINGS, INC.;
OFFICE DEPOT, INC.; PARLAY ENTERTAINMENT, INC.; PEERLESS SYSTEMS CORPORATION; PROGRESSIVE GAMING
INTERNATIONAL CORPORATION; SECURE NETWORKS, INC.; SED INTERNATIONAL HOLDINGS, INC.; SOLERA
HOLDINGS, INC; STAPLES, INC.; TECH DATA CORPORATION; TELECONNECT, INC.; TRANSNET CORPORATION;
UNITED STATIONERS, INC.; AND WAYSIDE TECHNOLOGY GROUP, INC.  23




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ITEM 6.
    
    SELECTED FINANCIAL DATA
    24




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Statement of Operations Data:
 For the years ended December 31,2010
    
    
    2009
    
    
    2008
    
    
    2007
    
    
    2006(in thousands, except per share data)SALES
    
    $
    666,711
    
    
    $
    761,870
    
    
    $
    821,165
    
    
    $
    723,465
    
    
    $
    862,977COST OF SALES
    
    
    586,371
    
    
    
    660,418
    
    
    
    713,812
    
    
    
    618,745
    
    
    
    749,198GROSS MARGIN
    
    
    80,340
    
    
    
    101,452
    
    
    
    107,353
    
    
    
    104,720
    
    
    
    113,779SELLING, GENERAL & ADMINISTRATIVE EXPENSES
    
    
    87,636
    
    
    
    98,107
    
    
    
    103,848
    
    
    
    106,335
    
    
    
    115,240(LOSS) INCOME FROM OPERATIONS
    
    
    (7,296
    )
    
    
    3,345
    
    
    
    3,505
    
    
    
    (1,615
    )
    
    
    (1,461
    )INTEREST AND OTHER INCOME (EXPENSE), NET
    
    
    7,466
    
    
    
    6,320
    
    
    
    2,524
    
    
    
    416
    
    
    
    (1,663
    )INCOME (LOSS) BEFORE TAXES
    
    
    170
    
    
    
    9,665
    
    
    
    6,029
    
    
    
    (1,199
    )
    
    
    (3,124
    )INCOME TAX (PROVISION) BENEFIT
    
    
    (1,100
    )
    
    
    (4,209
    )
    
    
    1,806
    
    
    
    (568
    )
    
    
    110NET
 (LOSS) INCOME
    
    $
    (930
    )
    
    $
    5,456
    
    
    $
    7,835
    
    
    $
    (1,767
    )
    
    $
    (3,014
    )(LOSS) EARNINGS PER SHAREBasic
    
    $
    (0.10
    )
    
    $
    0.56
    
    
    $
    0.80
    
    
    $
    (0.18
    )
    
    $
    (0.32
    )Diluted
    
    $
    (0.10
    )
    
    $
    0.56
    
    
    $
    0.79
    
    
    $
    (0.18
    )
    
    $
    (0.32
    )WEIGHTED AVERAGE COMMON SHARES OUTSTANDINGBasic
    
    
    9,604
    
    
    
    9,706
    
    
    
    9,760
    
    
    
    9,571
    
    
    
    9,371Diluted
    
    
    9,604
    
    
    
    9,762
    
    
    
    9,865
    
    
    
    9,571
    
    
    
    9,371
 Balance Sheet Data:
    
    As of December 31,(in thousands)
    
    2010
    
    
    2009
    
    
    2008
    
    
    2007
    
    
    2006Working capital
    
    $
    77,511
    
    
    $
    62,167
    
    
    $
    67,473
    
    
    $
    69,985
    
    
    $
    70,197Total assets
    
    
    203,844
    
    
    
    288,631
    
    
    
    247,629
    
    
    
    226,667
    
    
    
    330,681Borrowings under credit facility
    
    
    
    
    
    
    
    
    
    
    22,387
    
    
    
    18,031
    
    
    
    30,912Long-term liabilities, including debt
    
    
    3,044
    
    
    
    17,598
    
    
    
    5,101
    
    
    
    20,432
    
    
    
    33,888Total liabilities
    
    
    107,634
    
    
    
    192,344
    
    
    
    157,515
    
    
    
    148,954
    
    
    
    253,998Stockholders equity
    
    
    96,210
    
    
    
    96,287
    
    
    
    90,114
    
    
    
    77,713
    
    
    
    76,683
  25




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ITEM 7.
    
    MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
  Overview
      
    
    On October 1, 2010, GTSI received a notice from the Small Business Administration
(SBA) that the SBA was temporarily suspending GTSI from any future Federal Government
contracting. On October 19, 2010, GTSI entered into an administrative agreement with the
SBA lifting the temporary suspension (the SBA Agreement). In addition, GTSI entered into
an Amended Credit Agreement, dated October 19, 2010, with its lenders. See our Note 15
Commitments and Contingencies in Item 8 and Legal Proceedings included in Item 3, for a
discussion of these matters. While we are continuing to work to minimize the impact on our
future business, the temporary suspension and SBA Agreement reduced sales and gross margin
during the fourth quarter of 2010. During the three months ended December 31, 2010, the
Company recorded $4.6 million of lease write-offs as a result of the SBA Agreement and
incurred additional SG&A expenses of approximately $1.4 million, $0.7 million and $0.9
million related to severance, legal, and monitoring and other expenses, respectively, in
connection with the SBA Agreement. If the Company is unable to generate additional sales,
mitigate impacted opportunities and reduce operating costs to offset for lost sales
activity and added administrative costs related to the restrictions under the SBA Agreement
it may have a material adverse effect on the Companys business, results of operations and
financial condition in future periods. The Company expects to incur additional SG&A
expenses during the year ended December 31, 2011 related to legal, professional and
monitoring and other expenses in connection with the SBA Agreement.
  26




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
    
    Resolution of our continuing disputes with EyakTek and its other members may have a
material adverse effect on our financial performance, as discussed in Item 3 Legal
Proceedings. While the outcome of these continuing disputes with EyakTek and its other
members is currently unknown, possible outcomes may include a buyout of our equity
interests in EyakTek, the dissolution of EyakTek, the continuation of EyakTek under its
current Operating Agreement or under a modified Operating Agreement or some other
alternative agreed upon by the various parties involved or ruled by the arbitrator. The
sale of our equity interest in EyakTek or EyakTeks dissolution would result in GTSI having
no future equity income from EyakTek as reported in GTSIs Consolidated Statements of
Operations. In the past, including for the years ended December 31, 2010, 2009 and 2008,
EyakTeks equity income has had a material positive impact on GTSIs financial performance.
We believe that GTSIs continuing disputes with EyakTek and its other members may have a
material adverse affect on our financial performance. During the year ended December 31,
2010, the Company incurred legal fees of approximately $0.7 million related to the various
EyakTek legal matters and will continue to incur legal expenses until a resolution is
reached.
 
    
    We depend heavily on Federal Government contracts. The Federal Government is
currently operating under a continuing resolution that is effective through March 18, 2011,
and its budget for 2011 has not been finalized. A delay in the Federal Government budget
process or a Federal Government shutdown may adversely affect our sales and gross margins,
operating results and cash flows.
 
    
    In the near term, we face some uncertainties due to the current business environment.
We have continued to experience a longer contracting process with DOD agencies, which is
one of our traditionally stronger markets. This delay, along with an overall decrease in
Federal Government IT spending may have a negative impact on our financial condition,
operating performance, revenue, income or liquidity.
 
    
    A shift of expenditures away from programs that we support may cause Federal Government
agencies to reduce their purchases under contracts, to exercise their right to terminate
contracts at any time without penalty or to decide not to exercise options to renew
contracts.
 
    
    With the Sun/Oracle merger and the continued consolidation within the OEM market place,
we are likely to see continued pricing pressure from our partners in the market place.
    
    
    Our sales decreased approximately $95.2 million, or 12.5%, from 2009 to 2010;
 
    
    Gross margin decreased $21.1 million and gross margin as a percentage of sales
decreased 1.2 percentage points from 2009 to 2010;
    
    In 2010, SG&A expenses decreased approximately $10.5 million however SG&A expenses as a
percentage of sales increased 0.2 of a percentage point from 2009 to 2010;
 
    
    Our net loss for the year ended December 31, 2010 was $0.9 million;
 
    
    Cash used in operations totaled $3.2 million for the year ended December 31, 2010;
  27




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##### Table of Contents



Critical Accounting Estimates and Policies
   Revenue Recognition
  Software Revenue Recognition
  28




---



##### Table of Contents



Revenue Recognition,
Multiple-Element Arrangements
     Revenue Recognition, Customer Payments and Incentives,
 Financing Receivables
 Transfers and Servicing
  29




---



##### Table of Contents



Stock-Based Compensation
 Compensation-Stock Compensation,
 Inventory
  Capitalized Internal Use Software
  Accounts Payable
  Bids and Proposals
  Income Taxes
   30




---



##### Table of Contents



Historical Results of Operations
 
 2010
    
    
    2009
    
    
    2008Sales
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %Cost of sales
    
    
    87.9
    %
    
    
    86.7
    %
    
    
    86.9
    %Gross margin
    
    
    12.1
    %
    
    
    13.3
    %
    
    
    13.1
    %Operating expenses:Selling, general, and administrative
    
    
    13.2
    %
    
    
    12.9
    %
    
    
    12.6
    %(Loss) Income from operations
    
    
    (1.1
    )%
    
    
    0.4
    %
    
    
    0.5
    %Interest and other income, net
    
    
    1.1
    %
    
    
    0.9
    %
    
    
    0.3
    %Income before taxes
    
    
    0.0
    %
    
    
    1.3
    %
    
    
    0.8
    %Income tax (provision) benefit
    
    
    (0.1
    )%
    
    
    (0.6
    )%
    
    
    0.2
    %Net (loss) income
    
    
    (0.1
    )%
    
    
    0.7
    %
    
    
    1.0
    %
  Sales by Vendor(based on 2010 sales)
    
    2010
    
    
    2009
    
    
    2008Cisco
    
    $
    138.4
    
    
    
    20.8
    %
    
    $
    131.9
    
    
    
    17.3
    %
    
    $
    121.0
    
    
    
    14.7
    %Dell
    
    
    73.4
    
    
    
    11.0
    %
    
    
    63.3
    
    
    
    8.3
    %
    
    
    68.2
    
    
    
    8.3
    %Oracle
    
    
    63.4
    
    
    
    9.5
    %
    
    
    79.7
    
    
    
    10.5
    %
    
    
    67.1
    
    
    
    8.2
    %Hewlett-Packard
    
    
    53.1
    
    
    
    8.0
    %
    
    
    55.5
    
    
    
    7.3
    %
    
    
    74.2
    
    
    
    9.0
    %Microsoft
    
    
    24.7
    
    
    
    3.7
    %
    
    
    81.8
    
    
    
    10.7
    %
    
    
    68.8
    
    
    
    8.4
    %Others, net of
reserves and
adjustments
    
    
    313.7
    
    
    
    47.0
    %
    
    
    349.7
    
    
    
    45.9
    %
    
    
    421.9
    
    
    
    51.4
    %Total
    
    $
    666.7
    
    
    
    100.0
    %
    
    $
    761.9
    
    
    
    100.0
    %
    
    $
    821.2
    
    
    
    100.0
    %
 Sales Type
    
    2010
    
    
    2009
    
    
    2008Hardware
    
    $
    463.1
    
    
    
    69.5
    %
    
    $
    495.6
    
    
    
    65.1
    %
    
    $
    585.7
    
    
    
    71.3
    %Software
    
    
    130.2
    
    
    
    19.5
    %
    
    
    182.4
    
    
    
    23.9
    %
    
    
    159.7
    
    
    
    19.4
    %Services
    
    
    51.1
    
    
    
    7.7
    %
    
    
    55.6
    
    
    
    7.3
    %
    
    
    56.5
    
    
    
    6.9
    %Financing
    
    
    22.3
    
    
    
    3.3
    %
    
    
    28.3
    
    
    
    3.7
    %
    
    
    19.3
    
    
    
    2.4
    %Total
    
    $
    666.7
    
    
    
    100.0
    %
    
    $
    761.9
    
    
    
    100.0
    %
    
    $
    821.2
    
    
    
    100.0
    %
 Year Ended December 31, 2010 Compared with Year Ended December 31, 2009
 Sales
   31




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##### Table of Contents



Transfers and Servicing
  Gross Margin
     32




---



##### Table of Contents



Selling, General & Administrative Expenses (SG&A)
  Interest and Other Income, Net
  Income Taxes
    33




---



##### Table of Contents



Year Ended December 31, 2009 Compared with Year Ended December 31, 2008
 Sales
    Transfers and Servicing
   Gross Margin
      34




---



##### Table of Contents



Selling, General & Administrative Expenses (SG&A)
  Interest and Other Income, Net
  Income Taxes
  Seasonal Fluctuations
   35




---



##### Table of Contents



2010 (unaudited)(in millions except per share data)Q1
    
    
    Q2
    
    
    Q3
    
    
    Q4 (a)
    
    
    TotalSales
    
    $
    101.8
    
    
    $
    135.0
    
    
    $
    237.4
    
    
    $
    192.5
    
    
    $
    666.7Cost of sales
    
    
    88.3
    
    
    
    117.6
    
    
    
    207.6
    
    
    
    172.9
    
    
    
    586.4Gross margin
    
    $
    13.5
    
    
    $
    17.4
    
    
    $
    29.8
    
    
    $
    19.6
    
    
    $
    80.3Selling, general & administrative expenses
    
    
    22.2
    
    
    
    21.6
    
    
    
    20.6
    
    
    
    23.2
    
    
    
    87.6Income (loss) from operations
    
    $
    (8.7
    )
    
    $
    (4.2
    )
    
    $
    9.2
    
    
    $
    (3.6
    )
    
    $
    (7.3
    )Interest and other income, net
    
    
    1.4
    
    
    
    2.1
    
    
    
    2.0
    
    
    
    1.9
    
    
    
    7.4Income (loss) before taxes
    
    $
    (7.3
    )
    
    $
    (2.1
    )
    
    $
    11.2
    
    
    $
    (1.7
    )
    
    $
    0.1Income tax benefit (provision)
    
    
    2.7
    
    
    
    0.9
    
    
    
    (5.3
    )
    
    
    0.7
    
    
    
    (1.0
    )Net (loss) income
    
    $
    (4.6
    )
    
    $
    (1.2
    )
    
    $
    5.9
    
    
    $
    (1.0
    )
    
    $
    (0.9
    )Basic (loss) earnings per share
    
    $
    (0.48
    )
    
    $
    (0.13
    )
    
    $
    0.62
    
    
    $
    (0.11
    )
    
    $
    (0.10
    )Diluted (loss) earnings per share
    
    $
    (0.48
    )
    
    $
    (0.13
    )
    
    $
    0.62
    
    
    $
    (0.11
    )
    
    $
    (0.10
    )
 2009 (unaudited)(in millions except per share data)Q1
    
    
    Q2
    
    
    Q3
    
    
    Q4
    
    
    TotalSales
    
    $
    144.1
    
    
    $
    164.6
    
    
    $
    209.7
    
    
    $
    243.5
    
    
    $
    761.9Cost of sales
    
    
    128.4
    
    
    
    141.6
    
    
    
    180.8
    
    
    
    209.6
    
    
    
    660.4Gross margin
    
    $
    15.7
    
    
    $
    23.0
    
    
    $
    28.9
    
    
    $
    33.9
    
    
    $
    101.5Selling, general & administrative expenses
    
    
    22.9
    
    
    
    24.4
    
    
    
    23.8
    
    
    
    27.0
    
    
    
    98.1Income (loss) from operations
    
    $
    (7.2
    )
    
    $
    (1.4
    )
    
    $
    5.1
    
    
    $
    6.8
    
    
    $
    3.3Interest and other income, net
    
    
    0.3
    
    
    
    0.9
    
    
    
    2.0
    
    
    
    3.1
    
    
    
    6.3Income (loss) before taxes
    
    $
    (6.9
    )
    
    $
    (0.5
    )
    
    $
    7.1
    
    
    $
    10.0
    
    
    $
    9.7Income tax benefit (provision)
    
    
    3.0
    
    
    
    0.2
    
    
    
    (3.2
    )
    
    
    (4.2
    )
    
    
    (4.2
    )Net (loss) income
    
    $
    (3.9
    )
    
    $
    (0.3
    )
    
    $
    3.9
    
    
    $
    5.8
    
    
    $
    5.5Basic (loss) earnings per share
    
    $
    (0.39
    )
    
    $
    (0.03
    )
    
    $
    0.40
    
    
    $
    0.61
    
    
    $
    0.56Diluted (loss) earnings per share
    
    $
    (0.39
    )
    
    $
    (0.03
    )
    
    $
    0.39
    
    
    $
    0.60
    
    
    $
    0.56
 Interim Reporting.
 
 (a)
    
    Pre-tax income for the quarter ended December 31, 2010 was negatively impacted by a $4.6
million write-off of net financing receivables and $3.0 million in additional SG&A expenses
related to severance, legal and monitoring and other expenses in connection with the SBA
Agreement. Liquidity and Capital Resources
 2010
    
    
    2009
    
    
    Change(in millions)Cash (used in) provided by operating activities
    
    $
    (3.2
    )
    
    $
    (1.7
    )
    
    $
    (1.5
    )Cash used in investing activities
    
    $
    (0.3
    )
    
    $
    (1.3
    )
    
    $
    1.0Cash (used in) provided by financing activities
    
    $
    (0.4
    )
    
    $
    10.9
    
    
    $
    (11.3
    )
  36




---



##### Table of Contents



Credit Facility, Credit Agreement and Amended Credit Agreement
      37




---



##### Table of Contents



Total Amended and Restated Agreement
    
    $
    100,000Borrowing base limitation
    
    
    (9,839
    )Total borrowing capacity
    
    
    90,161Less: interest-bearing borrowings
    
    
    Less: non-interest bearing advances (floor plan loans)
    
    
    (35,172
    )Less: letters of credit
    
    
    (5,114
    )Total unused availability
    
    $
    49,875
    
    
    Maintain Tangible Net Worth not less than or equal to $45 million as of the end of each
fiscal month
 
    
    Maintain Ratio of Total Liabilities to Tangible Net Worth not greater than 5.25 to 1.00
as of the end of each fiscal month
 
    
    Maintain Current Ratio not less than (i) 1.20 to 1.00 as of the last business day of
the fiscal months of January, February, March, April, May, June, October, November and
December and (ii) 1.15 to 1.00 as of the last business day of the fiscal months of July,
August and September
 
    
    Maintain minimum Total Debt Service Coverage Ratio of 1.25 to 1.00 as of the
end of each fiscal month
    Capital Resources and Requirements
   38




---



##### Table of Contents



Contractual Obligations
 Less
    
    
    
    
    
    
    
    
    
    
    MoreThan 1
    
    
    1-3
    
    
    3-5
    
    
    than 5In millions of dollars
    
    Total
    
    
    Year
    
    
    Years
    
    
    Years
    
    
    Years
    
    
    OtherOperating lease obligations
    
    $
    35.8
    
    
    $
    4.6
    
    
    $
    7.9
    
    
    
    8.2
    
    
    $
    15.1
    
    
    
    Tax liability for unrecognized tax benefits (a)
    
    
    0.1
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    0.1Total contractual obligations
    
    $
    35.9
    
    
    $
    4.6
    
    
    $
    7.9
    
    
    $
    8.2
    
    
    $
    15.1
    
    
    $
    0.1
 (a)
    
    This amount includes current liabilities on the consolidated balance sheet for FASB ASC
840, IncomeTaxes. The Company is not able to reasonably estimate the timing of the future
payments.    Off-Balance Sheet Arrangements
   39




---



##### Table of Contents



ITEM 7A.
    
    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
      40




---



##### Table of Contents



ITEM 8.
    
    FINANCIAL STATEMENTS & SUPPLEMENTARY DATA
 Report of Independent Registered Public Accounting Firm
 
  
  41




---



##### Table of Contents



Report of Independent Registered Public Accounting Firm
 Eyak Technology, LLC
 Eyak Technology, LLC and Subsidiary
  Eyak Technology, LLC and Subsidiary
 
  42




---



##### Table of Contents



GTSI CORP.
CONSOLIDATED BALANCE SHEETS
 December 31,2010
    
    
    2009ASSETSCurrent assets:Cash and cash equivalents
    
    $
    4,049
    
    
    $
    7,894Accounts receivable, net
    
    
    154,891
    
    
    
    209,595Inventory
    
    
    13,708
    
    
    
    13,477Deferred costs
    
    
    6,991
    
    
    
    1,807Other current assets
    
    
    2,462
    
    
    
    4,140Total current assets
    
    
    182,101
    
    
    
    236,913Depreciable assets, net
    
    
    7,452
    
    
    
    10,960Long-term receivables and other assets
    
    
    14,291
    
    
    
    40,758Total assets
    
    $
    203,844
    
    
    $
    288,631LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable
    
    $
    50,870
    
    
    $
    109,723Accounts payable  floor plan
    
    
    35,172
    
    
    
    34,889Financed lease debt, current portion
    
    
    
    
    
    
    831Accrued liabilities
    
    
    14,887
    
    
    
    26,127Deferred revenue
    
    
    3,661
    
    
    
    3,176Total current liablilites
    
    
    104,590
    
    
    
    174,746Other liabilities
    
    
    3,044
    
    
    
    17,598Total liabilities
    
    
    107,634
    
    
    
    192,344Commitments and contingencies (See Note 15)Stockholders equityPreferred stock  $0.25 par value, 680,850 shares authorized; none issued or outstanding
    
    
    
    
    
    
    Common stock  $0.005 par value, 20,000,000 shares authorized; 10,056,650 issued and
9,625,728 outstanding at December 31, 2010; and 10,119,038 issued and 9,637,676
outstanding at December 31, 2009
    
    
    50
    
    
    
    50Capital in excess of par value
    
    
    53,985
    
    
    
    52,698Retained earnings
    
    
    43,995
    
    
    
    44,925Treasury stock, 346,119 shares at December 31, 2010 and 277,850 shares at December 31,
2009, at cost
    
    
    (1,820
    )
    
    
    (1,386
    )Total stockholders equity
    
    
    96,210
    
    
    
    96,287Total liabilities and stockholders equity
    
    $
    203,844
    
    
    $
    288,631
   43




---



##### Table of Contents



GTSI CORP.
CONSOLIDATED STATEMENTS OF OPERATIONS
 For the Years Ended December 31,2010
    
    
    2009
    
    
    2008SALESProduct
    
    $
    593,319
    
    
    $
    677,966
    
    
    $
    745,366Service
    
    
    51,140
    
    
    
    55,625
    
    
    
    56,529Financing
    
    
    22,252
    
    
    
    28,279
    
    
    
    19,270666,711
    
    
    
    761,870
    
    
    
    821,165COST OF SALESProduct
    
    
    535,835
    
    
    
    611,310
    
    
    
    673,858Service
    
    
    33,895
    
    
    
    33,236
    
    
    
    31,551Financing
    
    
    16,641
    
    
    
    15,872
    
    
    
    8,403586,371
    
    
    
    660,418
    
    
    
    713,812GROSS MARGIN
    
    
    80,340
    
    
    
    101,452
    
    
    
    107,353SELLING, GENERAL & ADMINISTRATIVE EXPENSES
    
    
    87,636
    
    
    
    98,107
    
    
    
    103,848(LOSS) INCOME FROM OPERATIONS
    
    
    (7,296
    )
    
    
    3,345
    
    
    
    3,505INTEREST AND OTHER INCOME, NETInterest and other income
    
    
    163
    
    
    
    923
    
    
    
    760Equity income from affiliates
    
    
    7,921
    
    
    
    8,261
    
    
    
    4,892Interest expense
    
    
    (618
    )
    
    
    (2,864
    )
    
    
    (3,128
    )Interest and other income, net
    
    
    7,466
    
    
    
    6,320
    
    
    
    2,524INCOME BEFORE INCOME TAXES
    
    
    170
    
    
    
    9,665
    
    
    
    6,029INCOME TAX (PROVISION) BENEFIT
    
    
    (1,100
    )
    
    
    (4,209
    )
    
    
    1,806NET (LOSS) INCOME
    
    $
    (930
    )
    
    $
    5,456
    
    
    $
    7,835(LOSS) EARNINGS PER SHAREBasic
    
    $
    (0.10
    )
    
    $
    0.56
    
    
    $
    0.80Diluted
    
    $
    (0.10
    )
    
    $
    0.56
    
    
    $
    0.79WEIGHTED AVERAGE SHARES OUTSTANDINGBasic
    
    
    9,604
    
    
    
    9,706
    
    
    
    9,760Diluted
    
    
    9,604
    
    
    
    9,762
    
    
    
    9,865
   44




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##### Table of Contents



GTSI CORP.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS EQUITY
For the Years Ended December 31, 2010, 2009 and 2008
 Common Stock
    
    
    Capital in
    
    
    
    
    
    
    
    
    
    
    TotalShares
    
    
    
    
    
    
    Excess of
    
    
    Retained
    
    
    Treasury
    
    
    StockholdersOutstanding
    
    
    Amount
    
    
    Par Value
    
    
    Earnings
    
    
    Stock
    
    
    EquityBalance, December 31, 2007
    
    
    9,701
    
    
    $
    49
    
    
    $
    47,097
    
    
    $
    31,634
    
    
    $
    (1,067
    )
    
    $
    77,713Common stock issued
    
    
    104
    
    
    
    
    
    
    
    (260
    )
    
    
    
    
    
    
    816
    
    
    
    556Common stock purchased
    
    
    (24
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (217
    )
    
    
    (217
    )Stock-based compensation
    
    
    
    
    
    
    
    
    
    
    2,946
    
    
    
    
    
    
    
    
    
    
    
    2,946Restricted stock issued
    
    
    86
    
    
    
    1
    
    
    
    (343
    )
    
    
    
    
    
    
    341
    
    
    
    (1
    )Tax (provision) benefit
from stock-based
compensation
    
    
    
    
    
    
    
    
    
    
    1,282
    
    
    
    
    
    
    
    
    
    
    
    1,282Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7,835
    
    
    
    
    
    
    
    7,835Balance, December 31, 2008
    
    
    9,867
    
    
    $
    50
    
    
    $
    50,722
    
    
    $
    39,469
    
    
    $
    (127
    )
    
    $
    90,114Common stock issued
    
    
    156
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    717
    
    
    
    717Common stock purchased
    
    
    (466
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,251
    )
    
    
    (2,251
    )Stock-based compensation
    
    
    
    
    
    
    
    
    
    
    2,387
    
    
    
    
    
    
    
    
    
    
    
    2,387Restricted stock issued
    
    
    81
    
    
    
    
    
    
    
    (275
    )
    
    
    
    
    
    
    275
    
    
    
    Tax (provision) benefit
from stock-based
compensation
    
    
    
    
    
    
    
    
    
    
    (136
    )
    
    
    
    
    
    
    
    
    
    
    (136
    )Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,456
    
    
    
    
    
    
    
    5,456Balance, December 31, 2009
    
    
    9,638
    
    
    $
    50
    
    
    $
    52,698
    
    
    $
    44,925
    
    
    $
    (1,386
    )
    
    $
    96,287Common stock issued
    
    
    91
    
    
    
    
    
    
    
    (119
    )
    
    
    
    
    
    
    482
    
    
    
    363Common stock purchased
    
    
    (154
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,006
    )
    
    
    (1,006
    )Stock-based compensation
    
    
    
    
    
    
    
    
    
    
    1,750
    
    
    
    
    
    
    
    
    
    
    
    1,750Restricted stock issued
    
    
    51
    
    
    
    
    
    
    
    (90
    )
    
    
    
    
    
    
    90
    
    
    
    Tax (provision) benefit
from stock-based
compensation
    
    
    
    
    
    
    
    
    
    
    (254
    )
    
    
    
    
    
    
    
    
    
    
    (254
    )Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (930
    )
    
    
    
    
    
    
    (930
    )Balance, December 31, 2010
    
    
    9,626
    
    
    $
    50
    
    
    $
    53,985
    
    
    $
    43,995
    
    
    $
    (1,820
    )
    
    $
    96,210
   45




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##### Table of Contents



GTSI CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS
 For the Years Ended December 31,2010
    
    
    2009
    
    
    2008CASH FLOWS FROM OPERATING ACTIVITIES:Net (loss) income
    
    $
    (930
    )
    
    $
    5,456
    
    
    $
    7,835Adjustments to reconcile net income to net cash (used in) provided by
operating activities:Depreciation and amortization
    
    
    3,849
    
    
    
    3,826
    
    
    
    3,448Loss on sale of depreciable assets
    
    
    36
    
    
    
    137
    
    
    
    276Stock-based compensation
    
    
    1,750
    
    
    
    2,387
    
    
    
    2,946Tax impact from stock-based compensation
    
    
    (254
    )
    
    
    (11
    )
    
    
    640Equity
income from affiliates, net of distributions in 2010, 2009 and 2008
of $5.3 million, $5.6 million and $2.5 million, respectively
    
    
    (2,659
    )
    
    
    (2,694
    )
    
    
    (2,386
    )Changes in operating assets and liabilities:Accounts receivable
    
    
    53,873
    
    
    
    (27,091
    )
    
    
    (33,288
    )Inventory
    
    
    (231
    )
    
    
    14
    
    
    
    8,086Other assets
    
    
    25,542
    
    
    
    (14,172
    )
    
    
    (1,326
    )Accounts payable
    
    
    (58,852
    )
    
    
    6,169
    
    
    
    18,838Accrued liabilities
    
    
    (11,240
    )
    
    
    8,134
    
    
    
    3,131Other liabilities
    
    
    (14,068
    )
    
    
    16,123
    
    
    
    744Net cash (used in) provided by operating activities
    
    
    (3,184
    )
    
    
    (1,722
    )
    
    
    8,944CASH FLOWS FROM INVESTING ACTIVITIES:Purchase of depreciable assets
    
    
    (300
    )
    
    
    (1,259
    )
    
    
    (5,230
    )Sale of depreciable assets
    
    
    
    
    
    
    
    
    
    
    120Net cash used in investing activities
    
    
    (300
    )
    
    
    (1,259
    )
    
    
    (5,110
    )CASH FLOWS FROM FINANCING ACTIVITES:(Payments on) borrowings under credit facility
    
    
    
    
    
    
    (22,387
    )
    
    
    4,356Borrowings under Floor Plan
    
    
    282
    
    
    
    34,889
    
    
    
    Payment of deferred financing costs
    
    
    
    
    
    
    (104
    )
    
    
    Payment of long-term debt
    
    
    
    
    
    
    
    
    
    
    (10,000
    )Tax impact from stock-based compensation
    
    
    
    
    
    
    11
    
    
    
    642Common stock purchases
    
    
    (1,006
    )
    
    
    (2,251
    )
    
    
    (217
    )Proceeds from common stock issued
    
    
    363
    
    
    
    717
    
    
    
    556Net cash (used in) provided by financing activities
    
    
    (361
    )
    
    
    10,875
    
    
    
    (4,663
    )NET (DECREASE) INCREASE IN CASH
    
    
    (3,845
    )
    
    
    7,894
    
    
    
    (829
    )CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR
    
    
    7,894
    
    
    
    
    
    
    
    829CASH AND CASH EQUIVALENTS AT END OF YEAR
    
    $
    4,049
    
    
    $
    7,894
    
    
    $
    CASH PAID DURING THE YEAR FOR:Interest
    
    $
    
    
    
    $
    56
    
    
    $
    773Income taxes
    
    $
    2,997
    
    
    $
    353
    
    
    $
    191
   46




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##### Table of Contents



GTSI CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the Years Ended December 31, 2010, 2009 and 2008
 1. NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 A. Nature of Business
   B. Risks and Uncertainties
      47




---



##### Table of Contents



C. Principles of Consolidation
  D. Use of Estimates
  E. New Accounting Pronouncements
   F. Revenue Recognition
 Revenue Recognition,
Overall
 Software
Revenue Recognition
  48




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##### Table of Contents



Revenue Recognition,
Multiple-Element Arrangements
     Leases
  49




---



##### Table of Contents



Transfers and Servicing .
 Revenue Recognition, Principal Agent Considerations .
 Revenue Recognition, Product
 Revenue Recognition, Customer Payments and Incentives
 Revenue Recognition, Principal
Agent Considerations
   G. Cash
   50




---



##### Table of Contents



H. Concentration of Credit Risk
  I. Allowance for Doubtful Accounts
  J. Software Development Costs
 Intangibles-Goodwill and Other Internal-Use
Software .
 K. Impairment of Long-Lived Assets
 Property, Plant,
and Equipment,
 L. Accounts Payable
  M. Stock-based Compensation
 Compensation-Stock Compensation,
   51




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##### Table of Contents



N. Income Taxes
 Income Taxes
 O. Advertising
  P. Fair Value of Financial Instruments
  Q. Equity Investments
 Investments  Equity Method and Joint Ventures, Partnerships, Joint Ventures, and Limited
Liability Entities,
 R. Comprehensive Income
  2. Accounts Receivable
  2010
    
    
    2009Trade accounts receivable
    
    $
    103,800
    
    
    $
    143,541Unbilled trade accounts receivable
    
    
    21,948
    
    
    
    32,784Lease receivables, net
    
    
    2,478
    
    
    
    6,149Finance receivables, net
    
    
    23,351
    
    
    
    21,626Vendor and other receivables
    
    
    4,027
    
    
    
    6,392Total accounts receivable
    
    $
    155,604
    
    
    $
    210,492Less: Allowance for doubtful accounts
    
    
    (98
    )
    
    
    (223
    )Sales return allowance
    
    
    (615
    )
    
    
    (674
    )Accounts receivable, net
    
    $
    154,891
    
    
    $
    209,595
  52




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##### Table of Contents



3. Long-term receivables and other assets
  2010
    
    
    2009Lease receivables, net
    
    $
    1,062
    
    
    $
    3,531Finance receivables, net
    
    
    1,123
    
    
    
    28,041Equity Investment in EyakTek
    
    
    10,615
    
    
    
    7,956Other Assets
    
    
    1,491
    
    
    
    1,230Long-term receivables and other assets
    
    $
    14,291
    
    
    $
    40,758
 4. Lease and Finance Receivables
 Leases
    2011
    
    $
    26,7582012
    
    
    1,8932013
    
    
    2122014
    
    
    192Thereafter
    
    
    Future minimum payments
    
    $
    29,055
  2010
    
    
    2009Future minimum lease payments receivable
    
    $
    3,673
    
    
    $
    10,719Unearned income
    
    
    (133
    )
    
    
    (1,039
    )$
    3,540
    
    
    $
    9,680
  2010
    
    
    2009Future minimum finance payments receivable
    
    $
    25,382
    
    
    $
    52,625Unearned income
    
    
    (908
    )
    
    
    (2,958
    )$
    24,474
    
    
    $
    49,667
  53




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##### Table of Contents



5. Transferred Receivables and Financed Lease Debt
 Transfers and Servicing
 6. Inventory
  7. Depreciable Assets
  2010
    
    
    2009Office furniture and equipment
    
    $
    7,469
    
    
    $
    7,421Purchased software for internal use
    
    
    2,262
    
    
    
    2,250Internally developed software
    
    
    16,693
    
    
    
    16,730Leasehold improvements
    
    
    1,377
    
    
    
    1,26827,801
    
    
    
    27,669Less: accumulated depreciation and amortization
    
    
    (20,349
    )
    
    
    (16,709
    )Depreciable assets, net
    
    $
    7,452
    
    
    $
    10,960
  Property, Plant & Equipment
   54




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##### Table of Contents



8. Credit Facility, Credit Agreement and Amended Credit Agreement
      Total Amended and Restated Agreement
    
    $
    100,000Borrowing base limitation
    
    
    (9,839
    )Total borrowing capacity
    
    
    90,161Less: interest-bearing borrowings
    
    
    Less: non-interest bearing advances (floor plan loans)
    
    
    (35,172
    )Less: letters of credit
    
    
    (5,114
    )Total unused availability
    
    $
    49,875
    
    
    Maintain Tangible Net Worth not less than or equal to $45 million as of the end of each
fiscal month
 
    
    Maintain Ratio of Total Liabilities to Tangible Net Worth not greater than 5.25 to 1.00
as of the end of each fiscal month
 
    
    Maintain Current Ratio not less than (i) 1.20 to 1.00 as of the last business day of
the fiscal months of January, February, March, April, May, June, October, November and
December and (ii) 1.15 to 1.00 as of the last business day of the fiscal months of July,
August and September
 
    
    Maintain minimum Total Debt Service Coverage Ratio of 1.25 to 1.00 as of the
end of each fiscal month
  55




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##### Table of Contents



9. Accrued Liabilities
  2010
    
    
    2009Accrued commissions and bonuses
    
    $
    3,805
    
    
    $
    6,113Accrued income taxes
    
    
    254
    
    
    
    2,864Future contractual lease obligations
    
    
    4,733
    
    
    
    10,079Other
    
    
    6,095
    
    
    
    7,071Total accrued liabilities
    
    $
    14,887
    
    
    $
    26,127
 10. Stockholders Equity
 Purchase of Capital Stock
   Stock-Based Compensation
 Stock Incentive Plans
    56




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##### Table of Contents



Valuation Assumptions
  2010
    
    
    2009
    
    
    2008Expected volatility
    
    
    51.0
    %
    
    
    51.0
    %
    
    
    48.3
    %Expected dividends
    
    
    
    
    
    
    
    
    
    
    Expected term (in years)
    
    
    4.6
    
    
    
    5.5
    
    
    
    5.0Risk free interest rate
    
    
    1.6
    %
    
    
    2.9
    %
    
    
    2.6
    %
 Stock Options
  WeightedWeighted
    
    
    AverageAverage
    
    
    Remaining
    
    
    AggregateExercise
    
    
    Contractual
    
    
    IntrinsticShares
    
    
    Price
    
    
    Term
    
    
    ValueOutstanding balance at December 31, 2007
    
    
    1,782
    
    
    $
    8.08Granted
    
    
    35
    
    
    $
    5.65Exercised
    
    
    (45
    )
    
    $
    4.88Forfeited
    
    
    (33
    )
    
    $
    8.31Expired
    
    
    (91
    )
    
    $
    9.54Outstanding balance at December 31, 2008
    
    
    1,648
    
    
    $
    8.05
    
    
    
    3.40
    
    
    $
    261Granted
    
    
    200
    
    
    $
    6.40Exercised
    
    
    (75
    )
    
    $
    4.24Forfeited
    
    
    (74
    )
    
    $
    6.64Expired
    
    
    (194
    )
    
    $
    9.62Oustanding balance at December 31, 2009
    
    
    1,505
    
    
    $
    7.83
    
    
    
    3.83
    
    
    $
    69Granted
    
    
    285
    
    
    $
    5.22Exercised
    
    
    (30
    )
    
    $
    2.81Forfeited
    
    
    (221
    )
    
    $
    5.77Expired
    
    
    (575
    )
    
    $
    7.65Oustanding balance at December 31, 2010
    
    
    964
    
    
    $
    7.79
    
    
    
    2.64
    
    
    $
    5Exercisable at December 31, 2010
    
    
    732
    
    
    $
    8.48
    
    
    
    1.54
    
    
    $
    4
  57




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##### Table of Contents



Restricted Shares
   WeightedAverage Grant-Shares
    
    
    Date Fair ValueNonvested balance at December 31, 2007
    
    
    378
    
    
    $
    11.71Granted
    
    
    44
    
    
    $
    7.27Vested
    
    
    (89
    )
    
    $
    12.20Forfeited
    
    
    (43
    )
    
    $
    12.00Nonvested balance at December 31, 2008
    
    
    290
    
    
    $
    10.83Granted
    
    
    63
    
    
    $
    5.54Vested
    
    
    (101
    )
    
    $
    9.76Forfeited
    
    
    (37
    )
    
    $
    10.13Nonvested balance at December 31, 2009
    
    
    215
    
    
    $
    9.91Granted
    
    
    27
    
    
    $
    5.61Vested
    
    
    (83
    )
    
    $
    8.90Forfeited
    
    
    (74
    )
    
    $
    11.27Nonvested balance at December 31, 2010
    
    
    85
    
    
    $
    8.35
  58




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##### Table of Contents



Stock Appreciation Rights
  WeightedWeighted
    
    
    AverageAverage
    
    
    Remaining
    
    
    AggregateExercise
    
    
    Contractual
    
    
    IntrinsticShares
    
    
    Price
    
    
    Term
    
    
    ValueOutstanding balance at December 31, 2007
    
    
    842Granted
    
    
    42
    
    
    $
    9.60Exercised
    
    
    
    
    
    
    Forfeited
    
    
    (112
    )
    
    $
    9.60Expired
    
    
    (14
    )
    
    $
    9.60Outstanding balance at December 31, 2008
    
    
    758
    
    
    $
    9.60
    
    
    
    5.09
    
    
    $
    Granted
    
    
    76
    
    
    $
    9.60Exercised
    
    
    
    
    
    
    Forfeited
    
    
    (65
    )
    
    $
    9.60Expired
    
    
    (52
    )
    
    $
    9.60Outstanding balance at December 31, 2009
    
    
    717
    
    
    $
    9.60
    
    
    
    4.44
    
    
    $
    Granted
    
    
    
    
    
    
    Exercised
    
    
    
    
    
    
    Forfeited
    
    
    (171
    )
    
    $
    9.60Expired
    
    
    (165
    )
    
    $
    9.60Outstanding balance at December 31, 2010
    
    
    381
    
    
    $
    9.60
    
    
    
    3.04
    
    
    $
    Exercisable at December 31, 2010
    
    
    228
    
    
    $
    9.60
    
    
    
    2.23
    
    
    $
    
 Unrecognized Compensation
   Employee Stock Purchase Plan
   59




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##### Table of Contents



Number ofShares
    
    
    PurchaseOffering period ended
    
    purchased
    
    
    priceDecember 31, 2010
    
    
    20,649
    
    
    $
    4.00June 30, 2010
    
    
    34,233
    
    
    $
    4.64December 31, 2009
    
    
    46,350
    
    
    $
    4.22June 30, 2009
    
    
    34,739
    
    
    $
    4.56December 31, 2008
    
    
    42,556
    
    
    $
    5.10June 30, 2008
    
    
    16,652
    
    
    $
    7.19
  Stockholder Rights Plan
    11. Related Party Transactions
   60




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##### Table of Contents



Years Ended December 31,2010
    
    
    2009
    
    
    2008Revenues
    
    $
    422,155
    
    
    $
    408,759
    
    
    $
    273,475Gross margin
    
    $
    46,776
    
    
    $
    42,404
    
    
    $
    31,292Net income
    
    $
    21,409
    
    
    $
    21,707
    
    
    $
    13,044
 December 31,2010
    
    
    2009Current assets
    
    $
    111,158
    
    
    $
    155,094Noncurrent assets
    
    $
    215
    
    
    $
    402Current liabilities
    
    $
    82,487
    
    
    $
    134,030Noncurrent liabilities
    
    $
    202
    
    
    $
    3Members equity
    
    $
    28,684
    
    
    $
    21,463
 12. (Loss) Earnings Per Share
   2010
    
    
    2009
    
    
    2008Basic (loss) earnings per share:Net (loss) income
    
    $
    (930
    )
    
    $
    5,456
    
    
    $
    7,835Weighted average shares outstanding
    
    
    9,604
    
    
    
    9,706
    
    
    
    9,760Basic (loss) earnings per share
    
    $
    (0.10
    )
    
    $
    0.56
    
    
    $
    0.80Diluted (loss) earnings per share:Net (loss) income
    
    $
    (930
    )
    
    $
    5,456
    
    
    $
    7,835Weighted average shares outstanding
    
    
    9,604
    
    
    
    9,706
    
    
    
    9,760Incremental shares attributable to the assumed
exercise of outstanding stock options
    
    
    N/A
    
    
    
    56
    
    
    
    105Weighted average shares and equivalents
    
    
    9,604
    
    
    
    9,762
    
    
    
    9,865Diluted (loss) earnings per share
    
    $
    (0.10
    )
    
    $
    0.56
    
    
    $
    0.79
  61




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13. Income Taxes
  Years Ended December 31,2010
    
    
    2009
    
    
    2008Current:Federal
    
    $
    (216
    )
    
    $
    (2,551
    )
    
    $
    (1,483
    )State
    
    
    83
    
    
    
    (132
    )
    
    
    (562
    )$
    (133
    )
    
    $
    (2,683
    )
    
    $
    (2,045
    )Deferred:Federal
    
    $
    (817
    )
    
    $
    (1,038
    )
    
    $
    3,179State
    
    
    (150
    )
    
    
    (488
    )
    
    
    672$
    (967
    )
    
    $
    (1,526
    )
    
    $
    3,851Total income tax (provision) benefit
    
    $
    (1,100
    )
    
    $
    (4,209
    )
    
    $
    1,806
  2010
    
    
    2009Deferred tax assets:Allowance for bad debt
    
    $
    1,612
    
    
    $
    72Inventory reserves and capitalization
    
    
    103
    
    
    
    142Reserves
    
    
    1,564
    
    
    
    1,772Deferred revenue
    
    
    655
    
    
    
    884Deferred rent
    
    
    1,148
    
    
    
    1,108Stock compensation
    
    
    1,152
    
    
    
    2,024Sale of receivables
    
    
    2
    
    
    
    65Investment Partnership
    
    
    628
    
    
    
    395Net operating losses
    
    
    63
    
    
    
    36Other
    
    
    44
    
    
    
    76Total deferred tax assets
    
    
    6,971
    
    
    
    6,574Deferred tax liabilities:Prepaid expenses and other
    
    
    (420
    )
    
    
    (734
    )Prepaid bonuses
    
    
    (198
    )
    
    
    (500
    )Depreciation and amortization
    
    
    (2,383
    )
    
    
    (3,196
    )Unbilled Receivables
    
    
    (3,046
    )
    
    
    Total deferred tax liabilities
    
    
    (6,047
    )
    
    
    (4,430
    )Net deferred tax assets
    
    $
    924
    
    
    $
    2,144
  62




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##### Table of Contents



Years Ended December 31,2010
    
    
    2009
    
    
    2008Statutory rate
    
    
    34.0
    %
    
    
    34.0
    %
    
    
    34.0
    %State income taxes, net of federal benefit
    
    
    9.8
    
    
    
    5.1
    
    
    
    3.4Non-deductible executive compensation
    
    
    
    
    
    
    
    
    
    
    7.3Non-deductible meals & entertainment costs
    
    
    40.8
    
    
    
    1.0
    
    
    
    2.4Non-deductible accrued incentive costs
    
    
    
    
    
    
    0.7
    
    
    
    1.2Tax Return Adjustments & Other
    
    
    (172.8
    )
    
    
    2.1
    
    
    
    0.5APIC Tax Shortfall
    
    
    784.7
    
    
    
    1.0
    
    
    
    Change in the tax contingency reserve
    
    
    (47.9
    )
    
    
    (0.4
    )
    
    
    (1.2
    )Change in valuation allowance
    
    
    
    
    
    
    
    
    
    
    (78.1
    )Effective tax rate
    
    
    648.6
    %
    
    
    43.5
    %
    
    
    (30.5
    )%
 Tax Uncertainties
 Income Taxes,
   2010
    
    
    2009
    
    
    2008Balance at beginning of the year
    
    $
    157
    
    
    $
    197
    
    
    $
    236Additions for prior year tax positions
    
    
    20
    
    
    
    5
    
    
    
    (21
    )Reductions for settlements
    
    
    
    
    
    
    (2
    )
    
    
    (2
    )Lapses in statute of limitations
    
    
    (70
    )
    
    
    (43
    )
    
    
    (16
    )Balance at end of the year
    
    $
    107
    
    
    $
    157
    
    
    $
    197
    63




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14. 401(k) Plan
  15. Commitments and Contingencies
 Product Warranties
  2010
    
    
    2009Accrued warranties at beginning of year
    
    $
    215
    
    
    $
    155Charges made against warranty liabilities
    
    
    (15
    )
    
    
    (3
    )Adjustments to warranty reserves
    
    
    0
    
    
    
    (3
    )Accruals for additional warranties sold
    
    
    29
    
    
    
    66Accrued warranties at end of year
    
    $
    229
    
    
    $
    215
 Maintenance Warranties
  2010
    
    
    2009Deferred warranty revenue at beginning of year
    
    $
    798
    
    
    $
    221Deferred warranty revenue recognized
    
    
    (2,285
    )
    
    
    (466
    )Revenue deferred for additional warranties sold
    
    
    3,369
    
    
    
    1,043Deferred warranty revenue at end of year
    
    $
    1,882
    
    
    $
    798
 Lease Commitments
   64




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2011
    
    $
    4,5662112
    
    
    3,8892013
    
    
    3,9862014
    
    
    4,0862015
    
    
    4,188Thereafter
    
    
    15,103Total minimum lease payments
    
    $
    35,818
 Letters of Credit
   Employment Agreements
  Legal Proceedings
      65




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66




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16. Segment Reporting
   2010
    
    
    2009
    
    
    2008Hardware
    
    $
    463,078
    
    
    $
    495,594
    
    
    $
    585,655Software
    
    
    130,241
    
    
    
    182,372
    
    
    
    159,711Services
    
    
    51,140
    
    
    
    55,625
    
    
    
    56,529Financing
    
    
    22,252
    
    
    
    28,279
    
    
    
    19,270Total
    
    $
    666,711
    
    
    $
    761,870
    
    
    $
    821,165
 Major Customers
   67




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17. Selected Quarterly Financial Data 
(unaudited)
  2010Q1
    
    
    Q2
    
    
    Q3
    
    
    Q4 (a)
    
    
    TotalSales
    
    $
    101,814
    
    
    $
    135,047
    
    
    $
    237,367
    
    
    $
    192,483
    
    
    $
    666,711Gross margin
    
    
    13,519
    
    
    
    17,449
    
    
    
    29,788
    
    
    
    19,584
    
    
    
    80,340Net (loss) income
    
    $
    (4,588
    )
    
    $
    (1,236
    )
    
    $
    5,934
    
    
    $
    (1,040
    )
    
    $
    (930
    )Basic (loss) earnings per share
    
    $
    (0.48
    )
    
    $
    (0.13
    )
    
    $
    0.62
    
    
    $
    (0.11
    )
    
    $
    (0.10
    )Diluted (loss) earnings per share
    
    $
    (0.48
    )
    
    $
    (0.13
    )
    
    $
    0.62
    
    
    $
    (0.11
    )
    
    $
    (0.10
    )
 2009Q1
    
    
    Q2
    
    
    Q3
    
    
    Q4
    
    
    TotalSales
    
    $
    144,072
    
    
    $
    164,601
    
    
    $
    209,684
    
    
    $
    243,513
    
    
    $
    761,870Gross margin
    
    
    15,663
    
    
    
    23,020
    
    
    
    28,914
    
    
    
    33,855
    
    
    
    101,452Net (loss) income
    
    $
    (3,880
    )
    
    $
    (310
    )
    
    $
    3,821
    
    
    $
    5,825
    
    
    $
    5,456Basic (loss) earnings per share
    
    $
    (0.39
    )
    
    $
    (0.03
    )
    
    $
    0.40
    
    
    $
    0.61
    
    
    $
    0.56Diluted (loss) earnings per share
    
    $
    (0.39
    )
    
    $
    (0.03
    )
    
    $
    0.39
    
    
    $
    0.60
    
    
    $
    0.56
 
 (a)
    
    Pre-tax income for the quarter ended December 31, 2010 was negatively impacted by a
$4.6 million write-off of net financing receivables and $3.0 million in additional SG&A
expenses related to severance, legal and monitoring and other expenses in connection with
the SBA Agreement. 18. Subsequent Events
 Credit Agreement Extension
   68




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ITEM 9.
    
    CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
  
 ITEM 9A.
    
    CONTROLS AND PROCEDURES
  Managements Report on Internal Control over Financial Reporting
  Internal ControlIntegrated
Framework established by the Committee of Sponsoring Organizations of the Treadway Commission
(COSO)
  Changes in Internal Control over Financial Reporting
  
 ITEM 9B.
    
    OTHER INFORMATION
   69




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PART III
 
 ITEM 10.
    
    DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
  
 ITEM 11.
    
    EXECUTIVE COMPENSATION
  
 ITEM 12.
    
    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
  
 ITEM 13.
    
    CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
  
 ITEM 14.
    
    PRINCIPAL ACCOUNTING FEES AND SERVICES
   70




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PART IV
 
 ITEM 15.
    
    EXHIBITS AND FINANCIAL STATEMENTS AND SCHEDULES:
 (a) (1) Financial Statements
       (a) (2)Financial Statement Schedules
      Exhibits
   71




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SIGNATURES
  GTSI CORP.By:
    /s/ STERLING E. PHILLIPS, JR.Sterling E. Phillips, Jr.Chief Executive Officer  Signature
    
    Title
    
    Date/s/ STERLING E. PHILLIPS, JR.
    
    Chief Executive Officer
    
    March 11, 2011Sterling E. Phillips, Jr.
    
    (Principal Executive Officer)/s/ PETER WHITFIELD
    
    Senior Vice President and
    
    March 11, 2011Peter Whitfield
    
    Chief Financial Officer(Principal Financial and Accounting Officer)/s/ JOHN M. TOUPS
    
    Chairman of the Board
    
    March 11, 2011John M. Toups/s/ LLOYD GRIFFITHS
    
    Director
    
    March 11, 2011Lloyd Griffiths/s/ THOMAS HEWITT
    
    Director
    
    March 11, 2011Thomas Hewitt/s/ LEE JOHNSON
    
    Director
    
    March 11, 2011Lee Johnson/s/ JOSEPH KEITH KELLOGG, JR.
    
    Director
    
    March 11, 2011Joseph Keith Kellogg, Jr./s/ STEVEN KELMAN
    
    Director
    
    March 11, 2011Steven Kelman/s/ LINWOOD A. LACY, JR
    
    Director
    
    March 11, 2011Linwood A. Lacy, Jr./s/ BARRY REISIG
    
    Director
    
    March 11, 2011Barry Reisig/s/ DANIEL R. YOUNG
    
    Director
    
    March 11, 2011Daniel R. Young
  72




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##### Table of Contents



GTSI CORP.
VALUATION AND QUALIFYING ACCOUNTS
 
 SCHEDULE II
 Years Ended December 31,2010
    
    
    2009
    
    
    2008Allowance for Doubtful AccountsBalance at beginning of year
    
    $
    223
    
    
    $
    393
    
    
    $
    1,001Additionscharged to expense or other accounts
    
    
    294
    
    
    
    193
    
    
    
    605Deductions
    
    
    (419
    )
    
    
    (363
    )
    
    
    (1,213
    )Balance at end of year
    
    $
    98
    
    
    $
    223
    
    
    $
    393Sales Return Allowance (1)Balance at beginning of year
    
    $
    674
    
    
    $
    1,356
    
    
    $
    4,026Additionscharged to expense or other accounts
    
    
    1,927
    
    
    
    2,147
    
    
    
    5,008Deductions
    
    
    (1,986
    )
    
    
    (2,829
    )
    
    
    (7,678
    )Balance at end of year
    
    $
    615
    
    
    $
    674
    
    
    $
    1,356Deferred Tax Asset Valuation AllowanceBalance at beginning of year
    
    $
    
    
    
    $
    
    
    
    $
    4,628Additionscharged to expense or other accounts
    
    
    
    
    
    
    
    
    
    
    Deductions
    
    
    
    
    
    
    
    
    
    
    (4,628
    )Balance at end of year
    
    $
    
    
    
    $
    
    
    
    $
    
 
 (1)
    
    The sales returns allowance is reported as a reduction of accounts receivable on the
consolidated balance sheets.   73




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EXHIBIT INDEX
 ExhibitNumber
    
    Description3.1
    
    
    Restated Certificate of Incorporation (1)3.2
    
    
    Bylaws, as amended (2)3.3
    
    
    Amendment to the Restated Certificate of Incorporation of GTSI Corp. (Certificate of
Designation) (27)4.1
    
    
    Rights Agreement, dated as of September 14, 2010, between GTSI Corp. and American Stock
Transfer & Trust Company, LLC, which includes the Form of Right Certificate as Exhibit
B and the Summary of Rights to Purchase Preferred Shares as Exhibit C (24)10.1
    
    
    GTSI Employees 401(k) Investment Plan, and amendments No. 1, 2 and 3 thereto (3)10.2
    
    
    Employee Stock Purchase Plan, as amended to date (4)10.3
    
    
    1994 Stock Option Plan, as amended to date (5)10.4
    
    
    Amended and Restated 1996 Stock Incentive Plan (6)10.5
    
    
    1997 Non-Officer Stock Option Plan, as amended to date (7)10.6
    
    
    Lease dated August 11, 1995 between the Company and Security Capital Industrial Trust,
and Amendments for distribution center facility (8)10.7
    
    
    Amended and Restated 2007 Stock Incentive Plan (12)10.8
    
    
    Lease dated December 5, 2007 between the Company and SP Herndon Development LP for new
headquarters facility (13)10.9
    
    
    Amended 1991 Employee Stock Purchase Plan (16)10.10
    
    
    GTSI Corp. Long Term Incentive Plan * (10)10.11
    
    
    GTSI 2005 Executive Incentive Compensation Plan * (3)10.12
    
    
    Form of GTSI Change in Control Agreement *(3)10.13
    
    
    Form of GTSI Severance Agreement *(11)10.14
    
    
    Amendment to Employment Agreements date June 8, 2007* (14)10.15
    
    
    Employment Agreement dated December 1, 2007 between the Registrant and Scott
Friedlander* (15)10.16
    
    
    2008 Short Term Incentive Plan Description* (17)10.17
    
    
    Employment Agreement dated October 29, 2008 between the Registrant and Peter Whitfield*
(18)10.18
    
    
    Credit Agreement dated as of May 27, 2009 among Castle Pines Capital LLC, as
Administrative Agent and a Lender, Wells Fargo Foothill, LLC as Administrative Agent
and Collateral Agent, and GTSI Corp (19)10.19
    
    
    First Amendment to Credit Agreement dated as of May 27, 2009 among GTSI Corp., Castle
Pines Capital LLC and Wells Fargo Foothill LLC (19)10.20
    
    
    GTSIs Board of Directors authorization of common stock repurchase program dated as of
June 8, 2009 (20)10.21
    
    
    Change in Control Agreements and amendments to existing employment agreements* (21)10.22
    
    
    Election of Board of Director (22)10.23
    
    
    Transition Agreement dated as of January 13, 2010 between James J. Leto and GTSI Corp.
* (23)10.24
    
    
    Employment Agreement dated August 4, 2010 between the Registrant and Scott Friedlander
* (25)10.25
    
    
    Third Amendment to Credit Agreement dated as of September 15, 2010 among GTSI Corp.,
Castle Pines Capital LLC and Wells Fargo Foothill LLC (26)10.26
    
    
    Administrative Agreement between GTSI and the SBA dated as of October 19, 2010. (28)10.27
    
    
    Amended and Restated Credit Agreement dated as of October 19, 2010 among GTSI Corp.,
Castle Pines Capital LLC and Wells Fargo Capital Finance, LLC (28)10.28
    
    
    Separation Agreement and General Release between GTSI and Scott Friedlander dated as of
October 26, 2010. * (29)10.29
    
    
    Separation Agreement and General Release between GTSI and Charles DeLeon dated as of
October 26, 2010. * (29)10.30
    
    
    Appointment of Sterling E. Phillips Jr. as Chief Executive Officer and President. * (30)10.31
    
    
    Consulting Agreement dated January 3, 2009 between the Registrant and Lee Johnson
(filed here within)14.1
    
    
    Code of Ethics (9)
  74




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ExhibitNumber
    
    Description23.1
    
    
    Consent of PricewaterhouseCoopers LLP (filed herewith)23.2
    
    
    Consent of Aronson & Company (filed herewith)31.1
    
    
    Section 302 Certification of Chief Executive Officer (filed herewith)31.2
    
    
    Section 302 Certification of Chief Financial Officer (filed herewith)32
    
    
    Section 906 Certification of Chief Executive Officer and Chief Financial Officer (filed
herewith)99.1
    
    
    Consolidated Financial Statements for Eyak Technology, LLC for the year ended December
31, 2010, 2009 and 2008 (audited) (filed herewith)
 *
    
    Management contracts and compensatory plans and arrangements required to be filed
pursuant to Item 15 (c).(1)
    
    Incorporated by reference to the Registrants Annual Report on Form 10-K for the year ended
December 31, 2000.(2)
    
    Incorporated by reference to the Registrants Current Report on Form 8-K dated December 1,
2007.(3)
    
    Incorporated by reference to the Registrants Annual Report on Form 10-K for the year ended
December 31, 2004.(4)
    
    Incorporated by reference to the Registrants Current Report on Form 8-K dated December 27,
2005.(5)
    
    Incorporated by reference to the Registrants Annual Report on Form 10-K for the year ended
December 31, 2002.(6)
    
    Incorporated by reference to Appendix A of the Registrants 2005 Proxy Statement.(7)
    
    Incorporated by reference to the Registrants Annual Report on Form 10-K for the year ended
December 31, 2002.(8)
    
    Incorporated by reference to the Registrants Quarterly Report on Form 10-Q for the period
ended September 30, 2004.(9)
    
    Incorporated by reference to the Registrants Annual Report on Form 10-K for the year ended
December 31, 2003.(10)
    
    Incorporated by reference to Appendix B of the Registrants 2004 Proxy Statement(11)
    
    Incorporated by reference to the Registrants current report on Form 8-K dated April 28, 2006.(12)
    
    Incorporated by reference to the Registrants current report on Form 8-K dated December 5,
2007.(13)
    
    Incorporated by reference to the Registrants current report on Form 8-K dated February 25,
2008.(14)
    
    Incorporated by reference to the Registrants current report on Form 8-K dated June 8, 2007.(15)
    
    Incorporated by reference to the Registrants current report on Form 8-K dated December 1,
2007.(16)
    
    Incorporated by reference to the Registrants current report on Schedule 14A dated March 31,
2008.(17)
    
    Incorporated by reference to the Registrants current report on Form 8-K dated April 23, 2008.(18)
    
    Incorporated by reference to the Registrants current report on Form 8-K dated October 29,
2008.(19)
    
    Incorporated by reference to the Registrants current report on Form 8-K dated May 27, 2009.(20)
    
    Incorporated by reference to the Registrants current report on Form 8-K dated June 12, 2009.(21)
    
    Incorporated by reference to the Registrants current report on Form 8-K dated September 4,
2009.(22)
    
    Incorporated by reference to the Registrants current report on Form 8-K dated November 9,
2009.(23)
    
    Incorporated by reference to the Registrants current report on Form 8-K dated January 13,
2010.(24)
    
    Incorporated by reference to the Registrants current report on Form 8-K dated September 13,
2010.(25)
    
    Incorporated by reference to the Registrants current report on Form 8-K/A dated August 4,
2010.(26)
    
    Incorporated by reference to the Registrants current report on Form 8-K dated September 15,
2010.(27)
    
    Incorporated by reference to the Registrants current report on Form 8-K dated September 13,
2010.(28)
    
    Incorporated by reference to the Registrants current report on Form 8-K dated October 19,
2010.(29)
    
    Incorporated by reference to the Registrants current report on Form 8-K dated October 26,
2010.(30)
    
    Incorporated by reference to the Registrants current report on Form 8-K dated November 23,
2010.  75