##### 



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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549

FORM 10-Q

Quarterly Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934

FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2003

Commission File No. 0-19394

|                                                                
|----------------------------------------------------------------
|GTSI Corp.(Exact name of registrant as specified in its charter)

|                                                                        |  |                                                   
|----------------------------------------------------------------------- |  | --------------------------------------------------
|Delaware
(State or other jurisdiction of
incorporation or organization) |  | 54-1248422
(I.R.S. Employer
Identification Number)

|                                                     
|-----------------------------------------------------
|3901 Stonecroft Boulevard
Chantilly, VA 20151-1010   
|(Address and zip code of principal executive offices)

|                                                                 
|-----------------------------------------------------------------
|703-502-2000
(Registrants telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.   YES
x (Box)     NO (Box)

Indicate the number of shares outstanding of each of the issuers classes
of common stock, as of the latest practicable date:

|                               |  |                                     
|------------------------------ |  | ------------------------------------
|Class                          |  | Shares Outstanding at April 30, 2003
|                               |  |                                     
|Common Stock, $0.005 par value |  | 8,312,538                           



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GTSI Corp. AND SUBSIDIARY

Quarterly Report on Form 10-Q for the Period Ended March 31, 2003

|                                 |         |                                                                                                    |    |  |    | 
|-------------------------------- | ------- | -------------------------------------------------------------------------------------------------- | -- |  | -- | 
|Table of Contents                |         | Page                                                                                              
|                                 |         |                                                                                                   
|                                 |         |                                                                                                    |    |  |    | 
|COVER PAGE                       |         |                                                                                                    | 1  | 
|                                 |         |                                                                                                    |    |  |    | 
|TABLE OF CONTENTS                |         |                                                                                                    | 2  | 
|                                 |         |                                                                                                    |    |  |    | 
|PART I  FINANCIAL INFORMATION   |         |                                                                                                    |    | 
|                                 |         |                                                                                                    |    |  |    | 
|                                 | Item 1. | Financial Statements -                                                                             |    |  |    | 
|                                 |         |                                                                                                    |    |  |    | 
|                                 |         | Consolidated Balance Sheets as of
March 31, 2003 and December 31, 2002                             |    |  | 3  | 
|                                 |         |                                                                                                    |    |  |    | 
|                                 |         | Consolidated Statements of Operations for the
Three Months Ended March 31, 2003 and 2002           |    |  | 4  | 
|                                 |         |                                                                                                    |    |  |    | 
|                                 |         | Consolidated Condensed Statements of Cash Flows for the
Three Months Ended March 31, 2003 and 2002 |    |  | 5  | 
|                                 |         |                                                                                                    |    |  |    | 
|                                 |         | Notes to Consolidated Condensed Financial Statements                                               |    |  | 6  | 
|                                 |         |                                                                                                    |    |  |    | 
|                                 | Item 2. | Managements Discussion & Analysis of Financial
Condition and Results of Operations                |    |  | 10 | 
|                                 |         |                                                                                                    |    |  |    | 
|                                 | Item 3. | Quantitative And Qualitative Disclosures About Market Risk                                         |    |  | 17 | 
|                                 |         |                                                                                                    |    |  |    | 
|                                 | Item 4. | Controls and Procedures                                                                            |    |  | 17 | 
|                                 |         |                                                                                                    |    |  |    | 
|PART II  OTHER INFORMATION      |         |                                                                                                    | 18 | 
|                                 |         |                                                                                                    |    |  |    | 
|                                 | Item 5. | Exhibits and Reports on Form 8-K                                                                   |    |  |    | 
|                                 |         |                                                                                                    |    |  |    | 
|SIGNATURES                       |         |                                                                                                    | 19 | 
|                                 |         |                                                                                                    |    |  |    | 
|CEO CERTIFICATION                |         |                                                                                                    | 20 | 
|                                 |         |                                                                                                    |    |  |    | 
|CFO CERTIFICATION                |         |                                                                                                    | 21 | 
|                                 |         |                                                                                                    |    |  |    | 
|WRITTEN STATEMENT OF CEO AND CFO |         |                                                                                                    | 22 | 

-2-



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##### 



GTSI CORP. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
(Unaudited)

|                                     |                                                                                                                                                                                                                                |                                            |        |           |         |              |        |         |         | 
|------------------------------------ | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | ------------------------------------------ | ------ | --------- | ------- | ------------ | ------ | ------- | ------- | 
|                                     |                                                                                                                                                                                                                                |                                            |        | March 31, |         | December 31,
|(In thousands, except share data)    |                                                                                                                                                                                                                                | 2003                                       |        | 2002     
|                                     |                                                                                                                                                                                                                                |                                            |        |          
|ASSETS                               |                                                                                                                                                                                                                                |                                            |        |           |         |              |        |        
|Current assets:                      |                                                                                                                                                                                                                                |                                            |        |           |         |              |        |        
|                                     | Cash                                                                                                                                                                                                                           |                                            | $      | 5,676     |         |              | $      | 32      |        
|                                     | Accounts receivable, net                                                                                                                                                                                                       |                                            |        | 112,339   |         |              |        | 139,164 |        
|                                     | Lease receivables, current                                                                                                                                                                                                     |                                            |        | 212       |         |              |        | 308     |        
|                                     | Merchandise inventories                                                                                                                                                                                                        |                                            |        | 56,929    |         |              |        | 56,039  |        
|                                     | Other current assets                                                                                                                                                                                                           |                                            |        | 17,308    |         |              |        | 15,080  |        
|                                     |                                                                                                                                                                                                                                |                                            |        |           |         |              |        |        
|                                     |                                                                                                                                                                                                                                | Total current assets                       |        |           | 192,464 |              |        |         | 210,623 | 
|Property and equipment, net          |                                                                                                                                                                                                                                |                                            | 13,195 |           |         |              | 11,707 |        
|Other assets                         |                                                                                                                                                                                                                                |                                            | 2,669  |           |         |              | 2,588  |        
|                                     |                                                                                                                                                                                                                                |                                            |        |           |         |              |        |        
|                                     |                                                                                                                                                                                                                                | Total assets                               |        | $         | 208,328 |              |        | $       | 224,918 | 
|                                     |                                                                                                                                                                                                                                |                                            |        |           |         |              |        |        
|LIABILITIES AND STOCKHOLDERS EQUITY |                                                                                                                                                                                                                                |                                            |        |           |         |              |        |        
|Current liabilities:                 |                                                                                                                                                                                                                                |                                            |        |           |         |              |        |        
|                                     | Notes payable to banks                                                                                                                                                                                                         |                                            | $      |          |         |              | $      | 7,539   |        
|                                     | Accounts payable                                                                                                                                                                                                               |                                            |        | 118,293   |         |              |        | 122,432 |        
|                                     | Accrued liabilities                                                                                                                                                                                                            |                                            |        | 11,944    |         |              |        | 13,412  |        
|                                     | Accrued warranty liabilities                                                                                                                                                                                                   |                                            |        | 4,187     |         |              |        | 4,404   |        
|                                     |                                                                                                                                                                                                                                |                                            |        |           |         |              |        |        
|                                     |                                                                                                                                                                                                                                | Total current liabilities                  |        |           | 134,424 |              |        |         | 147,787 | 
|Other liabilities                    |                                                                                                                                                                                                                                |                                            | 1,642  |           |         |              | 1,640  |        
|                                     |                                                                                                                                                                                                                                |                                            |        |           |         |              |        |        
|                                     |                                                                                                                                                                                                                                | Total liabilities                          |        |           | 136,066 |              |        |         | 149,427 | 
|                                     |                                                                                                                                                                                                                                |                                            |        |           |         |              |        |        
|Commitments and contingencies        |                                                                                                                                                                                                                                |                                            |        |           |         |              |        |        
|Stockholders equity                 |                                                                                                                                                                                                                                |                                            |        |           |         |              |        |        
|                                     | Preferred Stock  $0.25 par value, 680,850 shares authorized;
none issued or outstanding                                                                                                                                       |                                            |        |          |         |              |        |        |        
|                                     | Common Stock  $0.005 par value, 20,000,000 shares authorized;
9,806,084 issued and 8,406,538 outstanding at March 31, 2003;
and 20,000,000 shares authorized; 9,806,084 issued and 8,609,938
outstanding at December 31, 2002 |                                            |        | 49        |         |              |        | 49      |        
|                                     | Capital in excess of par value                                                                                                                                                                                                 |                                            |        | 44,524    |         |              |        | 44,439  |        
|                                     | Retained earnings                                                                                                                                                                                                              |                                            |        | 35,189    |         |              |        | 36,952  |        
|                                     | Treasury stock, 1,399,546 shares at March 31, 2003 and
1,196,146 shares at December 31, 2002, at cost                                                                                                                          |                                            |        | (7,500    | )       |              |        | (5,949  | )      
|                                     |                                                                                                                                                                                                                                |                                            |        |           |         |              |        |        
|                                     |                                                                                                                                                                                                                                | Total stockholders equity                 |        |           | 72,262  |              |        |         | 75,491  | 
|                                     |                                                                                                                                                                                                                                |                                            |        |           |         |              |        |        
|                                     |                                                                                                                                                                                                                                | Total liabilities and stockholders equity |        | $         | 208,328 |              |        | $       | 224,918 | 
|                                     |                                                                                                                                                                                                                                |                                            |        |           |         |              |        |        

The accompanying notes are an integral part of these consolidated financial statements.

-3-



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GTSI CORP. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)

|                                            |                           |      |                    |      |   |   |         |       |  
|------------------------------------------- | ------------------------- | ---- | ------------------ | ---- | - | - | ------- | ----- | -
|                                            |                           |      | Three months ended
|                                            |                           |      | March 31,         
|                                            |                           |      |                   
|(In thousands, except share information)    |                           | 2003 |                    | 2002
|                                            |                           |      |                    |     
|Sales                                       |                           | $    | 178,858            |      |   | $ | 176,743 |      
|Cost of sales                               |                           |      | 162,784            |      |   |   | 162,232 |      
|                                            |                           |      |                    |      |   |   |         |      
|Gross margin                                |                           |      | 16,074             |      |   |   | 14,511  |      
|Operating expenses                          |                           |      | 19,702             |      |   |   | 15,386  |      
|                                            |                           |      |                    |      |   |   |         |      
|Loss from operations                        |                           |      | (3,628             | )    |   |   | (875    | )    
|                                            |                           |      |                    |      |   |   |         |      
|                                            | Interest and other income |      |                    | 781  |   |   |         | 1,986 |  
|                                            | Interest expense          |      |                    | (48  | ) |   |         | (216  | )
|                                            |                           |      |                    |      |   |   |         |      
|Interest and other income, net              |                           |      | 733                |      |   |   | 1,770   |      
|                                            |                           |      |                    |      |   |   |         |      
|(Loss) income before income taxes           |                           |      | (2,895             | )    |   |   | 895     |      
|Income tax (benefit) provision              |                           |      | (1,132             | )    |   |   | 354     |      
|                                            |                           |      |                    |      |   |   |         |      
|Net (loss) income                           |                           | $    | (1,763             | )    |   | $ | 541     |      
|                                            |                           |      |                    |      |   |   |         |      
|Basic net (loss) income per share           |                           | $    | (0.21              | )    |   | $ | 0.07    |      
|                                            |                           |      |                    |      |   |   |         |      
|Diluted net (loss) income per share         |                           | $    | (0.21              | )    |   | $ | 0.06    |      
|                                            |                           |      |                    |      |   |   |         |      
|Basic weighted average shares outstanding   |                           |      | 8,564              |      |   |   | 8,184   |      
|                                            |                           |      |                    |      |   |   |         |      
|Diluted weighted average shares outstanding |                           |      | 8,564              |      |   |   | 9,498   |      
|                                            |                           |      |                    |      |   |   |         |      

The accompanying notes are an integral part of these consolidated financial statements.

-4-



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GTSI CORP. AND SUBSIDIARY
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)

|                                                                                        |                                          |              |        |                    |    |   |         |         |     | 
|--------------------------------------------------------------------------------------- | ---------------------------------------- | ------------ | ------ | ------------------ | -- | - | ------- | ------- | --- | 
|                                                                                        |                                          |              |        | Three months ended
|                                                                                        |                                          |              |        | March 31,         
|                                                                                        |                                          |              |        |                   
|(In thousands)                                                                          |                                          | 2003         |        | 2002              
|                                                                                        |                                          |              |        |                   
|CASH FLOWS FROM OPERATING ACTIVITIES:                                                   |                                          |              |        |                    |    |   |         |        
|Net income (loss)                                                                       |                                          | $            | (1,763 | )                  |    | $ | 541     |        
|Adjustments to reconcile net income (loss) to net cash
provided by operating activities |                                          |              | 18,654 |                    |    |   | 35,387  |        
|                                                                                        |                                          |              |        |                    |    |   |         |        
|Net cash provided by operating activities                                               |                                          |              | 16,891 |                    |    |   | 35,928  |        
|                                                                                        |                                          |              |        |                    |    |   |         |        
|CASH FLOWS FROM INVESTING ACTIVITIES:                                                   |                                          |              |        |                    |    |   |         |        
|                                                                                        | Cost of property and equipment           |              |        | (2,242             | )  |   |         | (1,062  | )  
|                                                                                        |                                          |              |        |                    |    |   |         |        
|Net cash used in investing activities                                                   |                                          |              | (2,242 | )                  |    |   | (1,062  | )      
|                                                                                        |                                          |              |        |                    |    |   |         |        
|CASH FLOWS FROM FINANCING ACTIVITIES:                                                   |                                          |              |        |                    |    |   |         |        
|                                                                                        | Payments of bank notes, net              |              |        | (7,539             | )  |   |         | (20,186 | )  
|                                                                                        | Common stock repurchase                  |              |        | (1,773             | )  |   |         | (26     | )  
|                                                                                        | Proceeds from exercises of stock options |              |        | 307                |    |   |         | 361     |    
|                                                                                        |                                          |              |        |                    |    |   |         |        
|Net cash used in financing activities                                                   |                                          |              | (9,005 | )                  |    |   | (19,851 | )      
|                                                                                        |                                          |              |        |                    |    |   |         |        
|Net increase in cash                                                                    |                                          |              | 5,644  |                    |    |   | 15,015  |        
|Cash at beginning of period                                                             |                                          |              | 32     |                    |    |   | 114     |        
|                                                                                        |                                          |              |        |                    |    |   |         |        
|Cash at end of period                                                                   |                                          | $            | 5,676  |                    |    | $ | 15,129  |        
|                                                                                        |                                          |              |        |                    |    |   |         |        
|Supplemental disclosures of cash flow information:                                      |                                          |              |        |                    |    |   |         |        
|                                                                                        | Cash paid during the three months for:   |              |        |                    |    |   |         |         |    
|                                                                                        |                                          | Interest     |        | $                  | 82 |   |         | $       | 285 | 
|                                                                                        |                                          | Income taxes |        | $                  |   |   |         | $       | 882 | 

The accompanying notes are an integral part of these consolidated financial statements.

-5-



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GTSI CORP. AND SUBSIDIARY

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Unaudited)

1. Basis of Presentation

The accompanying unaudited, consolidated financial statements of GTSI
Corp. (GTSI or the Company) have been prepared pursuant to the rules and
regulations of the Securities and Exchange Commission (SEC) and, therefore,
omit or condense certain footnotes and other information normally included in
financial statements prepared in accordance with generally accepted accounting
principles. This report should be read in conjunction with the audited
financials for the year ended December 31, 2002 and the accompanying Notes to
the Financial Statements, contained in the Companys 2002 Annual Report on Form
10-K. In the opinion of Management, all adjustments, consisting primarily of
normal recurring adjustments, necessary for a fair presentation of interim
period results have been made. The interim results reflected in the
consolidated financial statements are not necessarily indicative of results
expected for the full year, or future periods.

New Accounting Pronouncements.

In November 2002, the EITF published Issue No. 00-21, Revenue
Arrangements with Multiple Deliverables (EITF 00-21), which addresses
certain aspects of the accounting by a vendor for arrangements under which it
will perform multiple revenue-generating activities. EITF 00-21 addresses how
to determine whether an arrangement involving multiple deliverables contains
more than one unit of accounting. EITF 00-21 is effective for the Company for
revenue arrangements entered into beginning July 1, 2003. We have not yet
determined the impact, if any, of adopting EITF 00-21.

In December 2002, the FASB issued SFAS No. 148, Accounting for
Stock-Based Compensation  Transition and Disclosure  an amendment of SFAS
123. This statement amends SFAS No. 123, Accounting for Stock-Based
Compensation, to provide alternative methods of transition for a voluntary
change to the fair value based method of accounting for stock -based employee
compensation. In addition, this statement amends the disclosure requirements
of SFAS No. 123 to require prominent disclosures in both annual and interim
financial statements about the method of accounting for stock-based employee
compensation and the effect of the method used on reported results. The
Company has chosen to continue to account for stock-based compensation using
the intrinsic value method prescribed in APB Opinion No. 25 and related
interpretations. Accordingly, compensation expense for stock options is
measured as the excess, if any, of the fair market value of the Companys stock
at the date of the grant over the exercise price of the related option. The
Company adopted the annual disclosure provisions of SFAS No. 148 in its
financial report for the year ended December 31, 2002 and has adopted the
interim disclosure provisions for its financial reports for the quarter ended
March 31, 2003.

-6-



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Had compensation costs for the Companys stock options been determined
based on SFAS No. 123, Accounting for Stock-Based Compensation, the Companys
net income and earnings per share would have been as follows (in thousands,
except per share amounts):

|                                                                                                                                                           |  |                              |        |      |  |   |       | 
|---------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---------------------------- | ------ | ---- |  | - | ----- | 
|                                                                                                                                                           |  | Three Months Ended March 31,
|                                                                                                                                                           |  |                             
|                                                                                                                                                           |  | 2003                         |        | 2002
|                                                                                                                                                           |  |                              |        |     
|Net (loss) income  as reported                                                                                                                            |  | $                            | (1,763 | )    |  | $ | 541   | 
|                                                                                                                                                          
|Add: Total stock-based employee compensation
expense as reported under intrinsic value method
(APB No. 25) for all awards, net of related tax
effects      |  |                              |       |      |  |   |      | 
|                                                                                                                                                          
|Deduct: Total stock-based employee compensation
expense determined under fair value based method
(SFAS No. 123) for all awards, net of related
tax effects |  |                              | (300)  |      |  |   | (245) | 
|                                                                                                                                                          
|Net income  pro forma                                                                                                                                     |  | $                            | (2,063 | )    |  | $ | 296   | 
|Net (loss) income per share  as reported (basic)                                                                                                          |  |                              | (0.21  | )    |  |   | 0.07  | 
|Net income per share  as reported (diluted)                                                                                                               |  |                              | (0.21  | )    |  |   | 0.06  | 
|Net income per share  pro forma (basic)                                                                                                                   |  |                              | (0.24  | )    |  |   | 0.04  | 
|Net income per share  pro forma (diluted)                                                                                                                 |  |                              | (0.24  | )    |  |   | 0.03  | 

On January 1, 2003 GTSI adopted a new accounting pronouncement, Emerging
Issues Task Force (EITF) Issue No. 02-16, Accounting for Consideration
Received from a Vendor by a Customer (Including a Reseller of the Vendors
Products). This pronouncement requires that consideration from vendors, such
as advertising support funds and sales volume incentives, be accounted for as a
reduction to cost of sales unless certain requirements are met showing that the
funds represent a reimbursement of a specific, incremental, identifiable cost
incurred by GTSI in selling the vendors product. If these specific
requirements related to individual vendors are met, the consideration is
accounted for as a reduction in the related expense category, such as
advertising or selling and administrative expense. GTSI provides numerous
advertising programs to support vendors, including catalogs, radio, Internet,
magazine and newspaper advertising for which the Company receives
consideration.

As a consequence of adopting EITF 02-16, GTSI recorded $2.4 million of
vendor consideration as a reduction of cost of sales this quarter. Excluding
the impact of EITF 02-16, and therefore on a non-GAAP basis, the gross profit
margin would have been 7.7% this quarter compared to 8.2% in the same period of
2002. The non-GAAP gross profit margin is included in this discussion to
provide a meaningful comparison to prior periods.

-7-



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Adopting EITF 02-16 had no impact on GTSIs operating profit, as the $2.4
million of vendor consideration netted against cost of sales was previously
netted against operating expense. The following table illustrates the
impact of EITF 02-16 on the Companys gross margin, operating expenses, and
net income for the three months ending March 31, 2003 and 2002.

|                                     |  |                    |        |      |  |   |        | 
|------------------------------------ |  | ------------------ | ------ | ---- |  | - | ------ | 
|                                     |  | Three Months Ended
|                                     |  | March 31,         
|                                     |  | 2003               |        | 2002
|                                     |  |                   
|Gross
Margin  as reported           |  | $                  | 16,074 |      |  | $ | 14,511 | 
|Impact of EITF 02-16                 |  |                    | (2,375 | )    |  |   |       | 
|                                     |  |                    |        |      |  |   |        | 
|Gross Margin before EITF 02-16       |  |                    | 13,699 |      |  |   | 14,511 | 
|                                     |  |                    |        |      |  |   |        | 
|                                     |  |                    |        |      |  |   |        | 
|Operating
expenses  as reported     |  |                    | 19,702 |      |  |   | 15,386 | 
|Impact of EITF 02-16                 |  |                    | (2,375 | )    |  |   |       | 
|                                     |  |                    |        |      |  |   |        | 
|Operating expenses before EITF 02-16 |  |                    | 17,327 |      |  |   | 17,327 | 
|                                     |  |                    |        |      |  |   |        | 
|                                     |  |                    |        |      |  |   |        | 
|Net
(loss) income  as reported      |  |                    | (1,763 | )    |  |   | 541    | 
|Impact of EITF 02-16                 |  |                    |       |      |  |   |       | 
|                                     |  |                    |        |      |  |   |        | 
|Net (loss) income before EITF 02-16  |  | $                  | (1,763 | )    |  | $ | 541    | 
|                                     |  |                    |        |      |  |   |        | 

2. Sales of Lease Receivables

The Company sells products to certain customers under sales-type lease
arrangements. The Company accounts for its sales-type leases according to the
provisions of SFAS No. 13, Accounting for Leases, and accordingly, recognizes
current and long-term lease receivables, net of unearned finance income on the
accompanying balance sheets. The Company periodically sells lease receivables
to various, unrelated financing companies. The Company accounts for its sales
of lease receivables in accordance with SFAS No. 140, Accounting for Transfers
and Serving of Financial Assets and Extinguishments of Liabilities  a
Replacement of FASB Statement No. 125. In accordance with the criteria set
forth in SFAS No. 140, lease receivables amounting to $4.7 million were sold
during the quarter ended March 31, 2003. In the same quarter of the previous
year, lease receivables amounting to $33.4 million were sold. A $500,000 gain
on the sales of certain of the Companys lease receivables was included in
interest and other income in the accompanying statements of operations for the
quarter ended March 31, 2002.

3. Notes Payable to Banks

The Company has a revolving line of credit (the Revolver) with a group
of banks, which allows for borrowings up to $50.0 million during its highest
seasonal period. Additionally, the Company has a separate facility with a bank
for inventory financing of vendor products (the Wholesale Financing
Facility), which allows for borrowings up to $60.0 million during its highest
seasonal period. Combined, the Revolver and the Wholesale Financing Facility
(the Credit Facilities) allow the Company to borrow from $55.0 million to
$110.0 million depending on the seasonal period. The seasonal structure of the
Credit Facilities coincides with the seasonality of the Companys business and
allows the Company to minimize banking fees. The interest rate under the Credit
Facilities is a rate indexed to the London Interbank Offered Rate (LIBOR) plus
1.75 percentage points.

Borrowing is limited to 85% of eligible accounts receivable. The Credit
Facility is secured by substantially all of the Companys operating assets.
Current obligations are first funded and then all cash receipts are
automatically applied to reduce outstanding borrowings. The Credit Facility
also contains certain covenants that include restrictions on the payment of
dividends and the purchase of the Companys Common Stock, as well as provisions
specifying compliance with certain quarterly and annual financial ratios. As of
March 31, 2003 the Company is in compliance with all of its covenants under the
credit facility and has available credit of $30.0 million.

On March 31, 2003 the Company and its group of banks signed an amendment
to the Revolver in which the group of banks consented to allow the Company to repurchase an additional $5.0 million worth
of its stock from third-party shareholders. During the first three months of 2003 the Company repurchased
$1.8 million of its stock.

-8-



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4. Earnings Per Share

The following table sets forth the components of basic and diluted earnings per
share:

|             |                                             |  |   |                    |   |      |  |       |  | 
|------------ | ------------------------------------------- |  | - | ------------------ | - | ---- |  | ----- |  | 
|             |                                             |  |   | Three months ended
|             |                                             |  |   | March 31,         
|             |                                             |  |   |                   
|             |                                             |  |   | 2003               |   | 2002
|             |                                             |  |   |                    |   |     
|Numerator:   |                                             |  |   |                    |   |      |  |      
|             | Net (loss) income                           |  | $ | (1,763             | ) |      |  | 541   | 
|Denominator: |                                             |  |   |                    |   |      |  |      
|             | Weighted average shares outstanding         |  |   | 8,564              |   |      |  | 8,184 | 
|             | Effective of dilutive securities:           |  |   |                    |   |      |  |       | 
|             | Employee stock options                      |  |   | N/A*               |   |      |  | 1,314 | 
|             |                                             |  |   |                    |   |      |  |      
|             | Denominator for dilutive earnings per share |  |   | 8,564              |   |      |  | 9,498 | 

*     Approximately 803,000 shares of potentially dilutive options are not included
because the net loss for the quarter makes their impact anti-dilutive.

5. Options

On May 14, 2003, the shareholders of the Company approved a change to
extend the exercise period for certain options granted to its
non-employee Directors
following cessation from the Company to the earlier of the fifth anniversary of
the cessation date or the expiration date of the respective option. Also, in
January 2003 the Company agreed that the unvested options held by one officer
would automatically vest if a change in control of the Company occurs. Both of
these changes require a new measurement date as required by Financial
Interpretation No. 44, Accounting for Certain Transactions Involving Stock
Compensation  An Interpretation of APB Opinion No. 25. No compensation
expense was recorded as a result of the modifications at this time because the
Company is currently unable to estimate whether the non-employee
Directors members will receive
an extension of their option awards as a result of the modification or if a
change in control of the Company will occur.

6. Commitments and Contingencies

The Company is occasionally a defendant in litigation incidental to its
business. The Company believes that none of such litigation currently pending
against it, individually or in the aggregate, will have a material adverse
effect on the Companys financial condition or results of operations.

-9-



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##### 



|        |  |                                                                                    
|------- |  | -----------------------------------------------------------------------------------
|Item 2. |  | Managements Discussion & Analysis of Financial Condition
and Results of Operations

The following discussion and analysis is provided to increase the
understanding of, and should be read in conjunction with, the Consolidated
Financial Statements and Notes thereto included elsewhere in this Report, as
well as the Companys consolidated financial statements and notes thereto
incorporated into its Annual Report on Form 10-K for the year ended December
31, 2002. Historical results and percentage relationships among any amounts in
the Consolidated Financial Statements are not necessarily indicative of trends
in operating results for any future period.

Overview

GTSI is a recognized information technology (IT) solutions leader,
providing products and services to federal, state and local government
customers worldwide. For two decades GTSI has served the public sector by
teaming up with global IT leaders such as HP, Panasonic, Microsoft, Sun and
Cisco. GTSI seeks to deliver maximum value through its broad range of products,
extensive contract portfolio and ISO 9000-registered logistics. Through its
Technology Teams, GTSI delivers best of breed products and services to help
its customers realize strong value for their IT investments. The Technology
Teams consist of technical experts that analyze, design, install and support a
wide range of integrated IT solutions in such areas as high performance
computing, advanced networking, mobile and wireless solutions, web portals,
high availability storage and information assurance. GTSI continues to broaden
its leadership in electronic commerce and procurement through its federally
focused website, gtsi.com, that provides customized shopping zones to meet
customers personalized needs. GTSI is headquartered in Chantilly, Virginia.

Changes in sales throughout the Companys history have been attributable
to increased or decreased unit sales, to expansion of the Companys product
offerings (e.g., peripherals, networking, Unix servers/workstation and internet
products), to the addition/removal of vendors (e.g., the addition of Cisco,
EMC, Tachyon, RIM, and the removal of Nexar and Everex), and to the addition or
expiration of sales contract vehicles (e.g., the addition of the SEWP III,
ADMC, IT2, PCHS and the MMAD Contracts, and the expiration of the SEWP II,
PC-3, SII PC/LAN, Portables 3, and STAMIS Contracts). The Companys financial
results have fluctuated seasonally, and may continue to do so in the future,
because of the Governments buying patterns which have historically favorably
affected the last two calendar quarters and adversely affected the first two
calendar quarters.

The Companys business strategy is to continue to focus on higher-end
product-based solutions, to broaden its product offering, and to remain a
low-cost, and high-reliability provider of commodity products. The Company
also focuses on bringing new technologies to government customers.

-10-



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##### 



Results of Operations

The following table sets forth, for the periods indicated, the percentages
that selected items within the statement of operations bear to sales and the
annual percentage changes in the dollar amounts of such items.

|                               |                                      |  |                     |      |      |  |       |     | 
|------------------------------ | ------------------------------------ |  | ------------------- | ---- | ---- |  | ----- | --- | 
|                               |                                      |  | Percentage of Sales
|                               |                                      |  | Three months ended 
|                               |                                      |  | March 31,          
|                               |                                      |  |                    
|                               |                                      |  | 2003                |      | 2002
|                               |                                      |  |                     |      |     
|Sales                          |                                      |  | 100.0               | %    |      |  | 100.0 | %  
|Cost of sales                  |                                      |  | 91.0                |      |      |  | 91.8  |    
|                               |                                      |  |                     |      |      |  |       |    
|Gross margin                   |                                      |  | 9.0                 |      |      |  | 8.2   |    
|                               |                                      |  |                     |      |      |  |       |    
|Operating expenses:            |                                      |  |                     |      |      |  |       |    
|                               | Selling, general, and administrative |  |                     | 10.6 |      |  |       | 8.1 | 
|                               | Depreciation and amortization        |  |                     | 0.4  |      |  |       | 0.6 | 
|                               |                                      |  |                     |      |      |  |       |    
|Total operating expenses       |                                      |  | 11.0                |      |      |  | 8.7   |    
|                               |                                      |  |                     |      |      |  |       |    
|Loss from operations           |                                      |  | (2.0                | )    |      |  | (0.5  | )  
|Interest and other income, net |                                      |  | 0.4                 |      |      |  | 1.0   |    
|                               |                                      |  |                     |      |      |  |       |    
|(Loss) income before taxes     |                                      |  | (1.6                | )    |      |  | 0.5   |    
|Income tax (benefit) provision |                                      |  | (0.6                | )    |      |  | 0.2   |    
|                               |                                      |  |                     |      |      |  |       |    
|Net (loss) income              |                                      |  | (1.0                | )    |      |  | 0.3   |    
|                               |                                      |  |                     |      |      |  |       |    

-11-



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##### 



The following tables set forth, for the periods indicated, the approximate
sales by product, by contract vehicle and by vendor, along with related
percentages of total sales.

|                                 |       |                              |        |         |  |  |      |       |   |   |        |         |  |  |      |       |  
|-------------------------------- | ----- | ---------------------------- | ------ | ------- |  |  | ---- | ----- | - | - | ------ | ------- |  |  | ---- | ----- | -
|Contract Vehicles                |       | Three months ended March 31,
|(Dollars in thousands)           |       | 2003                         |        | 2002   
|                                 |       |                              |        |        
|GSA Schedules                    |       | $                            | 51,864 |         |  |  | 29.0 | %     |   | $ | 35,035 |         |  |  | 19.8 | %    
|IDIQ Contracts                   |       |                              | 78,927 |         |  |  | 44.1 | %     |   |   | 62,174 |         |  |  | 35.2 | %    
|Open Market                      |       |                              | 26,948 |         |  |  | 15.1 | %     |   |   | 18,957 |         |  |  | 10.7 | %    
|Subcontracts and Other Contracts |       |                              | 21,119 |         |  |  | 11.8 | %     |   |   | 60,577 |         |  |  | 34.3 | %    
|                                 |       |                              |        |         |  |  |      |       |   |   |        |         |  |  |      |      
|                                 | Total |                              | $      | 178,858 |  |  |      | 100.0 | % |   | $      | 176,743 |  |  |      | 100.0 | %
|                                 |       |                              |        |         |  |  |      |       |   |   |        |         |  |  |      |      

|                      |       |                              |        |         |  |  |      |       |   |   |        |         |  |  |      |       |  
|--------------------- | ----- | ---------------------------- | ------ | ------- |  |  | ---- | ----- | - | - | ------ | ------- |  |  | ---- | ----- | -
|Top 5 Vendors         |       | Three months ended March 31,
|(Dollars in millions) |       | 2003                         |        | 2002   
|                      |       |                              |        |        
|Panasonic             |       | $                            | 34,833 |         |  |  | 19.5 | %     |   | $ | 28,001 |         |  |  | 15.8 | %    
|HP                    |       |                              | 31,027 |         |  |  | 17.4 | %     |   |   | 27,637 |         |  |  | 15.6 | %    
|Cisco                 |       |                              | 20,440 |         |  |  | 11.4 | %     |   |   | 36,842 |         |  |  | 20.8 | %    
|Sun                   |       |                              | 19,675 |         |  |  | 11.0 | %     |   |   | 10,896 |         |  |  | 6.2  | %    
|Microsoft             |       |                              | 14,847 |         |  |  | 8.3  | %     |   |   | 9,071  |         |  |  | 5.1  | %    
|Other                 |       |                              | 58,036 |         |  |  | 32.4 | %     |   |   | 64,296 |         |  |  | 36.5 | %    
|                      |       |                              |        |         |  |  |      |       |   |   |        |         |  |  |      |      
|                      | Total |                              | $      | 178,858 |  |  |      | 100.0 | % |   | $      | 176,743 |  |  |      | 100.0 | %
|                      |       |                              |        |         |  |  |      |       |   |   |        |         |  |  |      |      

|                       |       |                              |         |         |  |  |      |       |   |   |         |         |  |  |      |       |  
|---------------------- | ----- | ---------------------------- | ------- | ------- |  |  | ---- | ----- | - | - | ------- | ------- |  |  | ---- | ----- | -
|Product Category       |       | Three months ended March 31,
|(Dollars in thousands) |       | 2003                         |         | 2002   
|                       |       |                              |         |        
|Hardware               |       | $                            | 128,929 |         |  |  | 72.1 | %     |   | $ | 139,334 |         |  |  | 78.8 | %    
|Software               |       |                              | 28,995  |         |  |  | 16.2 | %     |   |   | 24,303  |         |  |  | 13.8 | %    
|Services               |       |                              | 20,934  |         |  |  | 11.7 | %     |   |   | 13,106  |         |  |  | 7.4  | %    
|                       |       |                              |         |         |  |  |      |       |   |   |         |         |  |  |      |      
|                       | Total |                              | $       | 178,858 |  |  |      | 100.0 | % |   | $       | 176,743 |  |  |      | 100.0 | %
|                       |       |                              |         |         |  |  |      |       |   |   |         |         |  |  |      |      

-12-



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##### 



Three Months Ended March 31, 2003 Compared
With the Three Months Ended March 31, 2002

Sales.Sales consist of revenues from product shipments and services
rendered net of allowances for customer returns and credits. Revenues for the
first quarter of 2003 were $178.9 million, compared to $176.7 million in the
first quarter of 2002, or an increase of 1.2%. Sales in the GSA Schedules, IDIQ
Contracts and Open Market contract categories all experienced significant
growth in first quarter 2003 compared to the same quarter last year. The
increase in these three categories is attributed to the efforts of our expanded
sales force selling under established contracts. The Company was awarded
several new contracts during 2002 that are now producing true growth for the
Company. The Company also saw growth in these categories from sales of
ruggedized laptops to the Armed Forces and the first-responders community. The
increase in these three categories is offset by a $39.5 million decrease in
sales made under the Subcontracts and Other Contracts category. This decrease
is primarily due to decreased volume on subcontracts with prime contractors,
specifically on the FBIs Trilogy contract.

Backlog.The Company recognizes an order in its backlog at the time it
receives and accepts a written customer purchase order. The Companys Total
Backlog includes orders that have not shipped (Unshipped Backlog) as well as
orders that have shipped but cannot be recognized as revenue at the period end.
Total Backlog at March 31, 2003, was approximately $72.2 million compared to
$93.5 million at March 31, 2002. Unshipped Backlog at March 31, 2003, was
approximately $65.1 million compared to $84.5 million at March 31, 2002.
Backlogs fluctuate significantly from quarter to quarter because of the
seasonality of Government ordering patterns and fluctuations in inventory
availability of various products.

Gross Margin.Gross margin is sales less cost of goods sold, which
includes product cost, freight, warranty maintenance cost and certain other
expenses related to the cost of acquiring products. Gross margin percentages
vary over time and may change significantly depending on the mix of customers
use of available contract vehicles and the mix of product sold. Gross margin
in the first quarter of 2003 increased to 9.0% of total sales from 8.2% of
total sales, with a favorable impact of adopting a new accounting pronouncement
(EITF 02-16) partly offset by increased market pressures. Excluding the
favorable impact from the adoption of EITF 02-16 the gross margin would have
been 7.7% of total sales this quarter compared to 8.2% of total sales in the
same quarter of 2002.

Operating Expenses. Total operating expenses for the three months ended
March 31, 2003 increased $4.3 million to $19.7 million from the same period in
2002. $2.4 million of this increase was a result of the adoption of EITF 02-16
which increased margins but also operating costs by this amount. In addition to
the impact of this new accounting pronouncement, operating expenses increased
due to higher personnel costs associated with the Companys ongoing efforts to
increase its sales force. Expressed as a percentage of total sales, total
operating expenses increased to 11.0% from 8.7% in the same quarter last year.
Excluding the impact from the adoption of a new accounting pronouncement, total
operating expenses expressed as a percentage of sales would have been 9.7% for
the first quarter of 2003 compared to 8.7% in the same quarter last year.

Interest and Other Income, Net. Net interest and other income in the first
quarter of 2003 decreased to $733,000 compared to $1.8 million in the same
period in 2002 due primarily to a decrease in interest income from equipment
leases and a $500,000 gain on the sale of equipment leases in the first quarter
of 2002.

Income Tax. The Company recorded a tax benefit of $1.1 million for the
first quarter of 2003 based on the effective rate of approximately 39% compared
to a tax provision of $354,000 in the same period last year.

-13-



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##### 



Effect of Inflation

The Company believes that inflation has not had a material effect on its
operations. If, however, inflation increases in the future it could temporarily
adversely affect the profitability of GTSIs sales under its Government
fixed-price contracts, which generally preclude the Company from passing on
inflation-related or other increases in product costs to Government customers
during the term of a pre-existing contract. The Company mitigates this risk in
part by often obtaining agreements from certain of its suppliers prohibiting
them from increasing their prices to GTSI during the term of fixed-price
contracts.

Seasonal Fluctuations and Other Factors

The Company has historically experienced and expects to continue to
experience significant seasonal fluctuations in its operations as a result of
Government buying and funding patterns, which also affect the buying patterns
of GTSIs prime contractor customers. These buying and funding patterns
historically have had a significant positive effect on GTSIs bookings in the
third quarter ending September 30 each year (the Governments fiscal year end),
and consequently on sales and net income in the third and fourth quarters of
each year. Quarterly financial results are also affected by the timing of the
award and shipments of products under government contracts, price competition
in the industry, the addition of personnel or other expenses in anticipation of
sales growth, product line changes and expansions, and the timing and costs of
changes in customer and product mix. In addition, customer order deferrals in
anticipation of new product releases by leading manufacturers, delays in vendor
shipments of new or existing products, a shift in sales mix to more complex
requirements contracts with more complex service costs, and vendor delays in
the processing of incentives and credits due GTSI, have occurred (all of which
are also likely to occur in the future) and have adversely affected the
Companys operating performance in particular periods. The seasonality and the
unpredictability of the factors affecting such seasonality make GTSIs
quarterly and yearly financial results difficult to predict and subject to
significant fluctuation. The Companys stock price could be adversely affected
if any such financial results fail to meet the financial communitys
expectations.

Additionally, legislation is periodically introduced in Congress that may
change the Governments procurement practices. GTSI cannot predict whether any
legislative or any regulatory proposals will be adopted or, if adopted, the
impact upon its operating results. Changes in the structure, composition
and/or buying patterns of the Government, either alone or in combination with
competitive conditions or other factors, could adversely affect future results.

New Accounting Pronouncements.

In November 2002, the EITF published Issue No. 00-21, Revenue
Arrangements with Multiple Deliverables (EITF 00-21), which addresses
certain aspects of the accounting by a vendor for arrangements under which it
will perform multiple revenue-generating activities. EITF 00-21 addresses how
to determine whether an arrangement involving multiple deliverables contains
more than one unit of accounting. EITF 00-21 is effective for the Company for
revenue arrangements entered into beginning July 1, 2003. We have not yet
determined the impact, if any, of adopting EITF 00-21.

In December 2002, the FASB issued SFAS No. 148, Accounting for
Stock-Based Compensation  Transition and Disclosure  an amendment of SFAS
123. This statement amends SFAS No. 123, Accounting for Stock-Based
Compensation, to provide alternative methods of transition for a voluntary
change to the fair value based method of accounting for stock -based employee
compensation. In addition, this statement amends the disclosure requirements
of SFAS No. 123 to require prominent disclosures in both annual and interim
financial statements about the method of accounting for stock-based employee
compensation and the effect of the method used on reported results. The
Company has chosen to continue to account for stock-based compensation using
the intrinsic value method prescribed in APB Opinion No. 25 and related
interpretations. Accordingly, compensation expense for stock options is
measured as the excess, if any, of the fair market value of the Companys stock
at the date of the grant over the exercise price of the related option. The
Company adopted the annual disclosure provisions of SFAS No. 148 in its
financial report for the year ended December 31, 2002 and has adopted the
interim disclosure provisions for its financial reports for the quarter ended
March 31, 2003.

-14-



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##### 



Had compensation costs for the Companys stock options been determined
based on SFAS No. 123, Accounting for Stock-Based Compensation, the Companys
net income and earnings per share would have been as follows (in thousands,
except per share amounts):

|                                                                                                                                                           |  |                              |        |      |  |   |       | 
|---------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---------------------------- | ------ | ---- |  | - | ----- | 
|                                                                                                                                                           |  | Three Months Ended March 31,
|                                                                                                                                                           |  |                             
|                                                                                                                                                           |  | 2003                         |        | 2002
|                                                                                                                                                           |  |                              |        |     
|Net (loss) income  as reported                                                                                                                            |  | $                            | (1,763 | )    |  | $ | 541   | 
|                                                                                                                                                          
|Add: Total stock-based employee compensation
expense as reported under intrinsic value method
(APB No. 25) for all awards, net of related tax
effects      |  |                              |       |      |  |   |      | 
|                                                                                                                                                          
|Deduct: Total stock-based employee compensation
expense determined under fair value based method
(SFAS No. 123) for all awards, net of related
tax effects |  |                              | (300)  |      |  |   | (245) | 
|                                                                                                                                                          
|Net income  pro forma                                                                                                                                     |  | $                            | (2,063 | )    |  | $ | 296   | 
|Net (loss) income per share  as reported (basic)                                                                                                          |  |                              | (0.21  | )    |  |   | 0.07  | 
|Net income per share  as reported (diluted)                                                                                                               |  |                              | (0.21  | )    |  |   | 0.06  | 
|Net income per share  pro forma (basic)                                                                                                                   |  |                              | (0.24  | )    |  |   | 0.04  | 
|Net income per share  pro forma (diluted)                                                                                                                 |  |                              | (0.24  | )    |  |   | 0.03  | 

As of January 1, 2003 GTSI adopted a new accounting pronouncement,
Emerging Issues Task Force (EITF) Issue No. 02-16, Accounting for
Consideration Received from a Vendor by a Customer (Including a Reseller of the
Vendors Products). This pronouncement requires that consideration from
vendors, such as advertising support funds and sales volume incentives, be
accounted for as a reduction to cost of sales unless certain requirements are
met showing that the funds represent a reimbursement of a specific,
incremental, identifiable cost incurred by GTSI in selling the vendors
product. If these specific requirements related to individual vendors are met,
the consideration is accounted for as a reduction in the related expense
category, such as advertising or selling and administrative expense. GTSI
provides numerous advertising programs to support vendors, including catalogs,
radio, Internet, magazine and newspaper advertising for which the Company
receives consideration.

As a consequence of adopting EITF 02-16, GTSI recorded $2.4 million of
vendor consideration as a reduction of cost of sales this quarter. Excluding
the impact of EITF 02-16, and therefore on a non-GAAP basis, the gross profit
margin would have been 7.7% this quarter compared to 8.2% in the same period of
2002. The non-GAAP gross profit margin is included in this discussion to
provide a meaningful comparison to prior periods.

-15-



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##### 



Adopting EITF 02-16 had no impact on GTSIs operating profit, as the $2.4
million of vendor consideration netted against cost of sales was previously
netted against operating expense. The following table illustrates the
impact of EITF 02-16 on the Companys gross margin, operating expenses, and
net income for the three months ending March 31, 2003 and 2002.

|                                     |  |                    |        |      |  |   |        | 
|------------------------------------ |  | ------------------ | ------ | ---- |  | - | ------ | 
|                                     |  | Three Months Ended
|                                     |  | March 31,         
|                                     |  | 2003               |        | 2002
|                                     |  |                   
|Gross
Margin  as reported           |  | $                  | 16,074 |      |  | $ | 14,511 | 
|Impact of EITF 02-16                 |  |                    | (2,375 | )    |  |   |       | 
|                                     |  |                    |        |      |  |   |        | 
|Gross Margin before EITF 02-16       |  |                    | 13,699 |      |  |   | 14,511 | 
|                                     |  |                    |        |      |  |   |        | 
|                                     |  |                    |        |      |  |   |        | 
|Operating
expenses  as reported     |  |                    | 19,702 |      |  |   | 15,386 | 
|Impact of EITF 02-16                 |  |                    | (2,375 | )    |  |   |       | 
|                                     |  |                    |        |      |  |   |        | 
|Operating expenses before EITF 02-16 |  |                    | 17,327 |      |  |   | 15,386 | 
|                                     |  |                    |        |      |  |   |        | 
|                                     |  |                    |        |      |  |   |        | 
|Net
(loss) income  as reported      |  |                    | (1,763 | )    |  |   | 541    | 
|Impact of EITF 02-16                 |  |                    |       |      |  |   |       | 
|                                     |  |                    |        |      |  |   |        | 
|Net (loss) income before EITF 02-16  |  | $                  | (1,763 | )    |  | $ | 541    | 
|                                     |  |                    |        |      |  |   |        | 

Liquidity and Capital Resources

During the first three months of 2003, the Companys operating activities
provided $16.9 million of cash flow, compared to the $35.9 million of cash flow
provided during the same period in 2002. The decrease in cash flow relates
primarily to the Companys sale of equipment leases during the first quarter
2002.

Investing activities used cash of approximately $2.2 million during the
three months ended March 31, 2003, compared to $1.1 million for the same period
in 2002 reflecting the Companys investment in software for a new fulfillment
system, intended to improve efficiency throughout the Company. As of March 31,
2003, the Company has capitalized approximately $6.3 million dollars under this
project.

During the three months ended March 31, 2003, the Companys financing
activities used cash of approximately $9.0 million, of which $7.5 million was
used to repay borrowings under the Companys Credit Facilities. The Company
also used $1.8 million of cash to purchase the Companys stock.

The Company has a revolving line of credit (the Revolver) with a group
of banks, which allows for borrowings up to $50.0 million during its highest
seasonal period. Additionally, the Company has a separate facility with a bank
for inventory financing of vendor products (the Wholesale Financing
Facility), which allows for borrowings up to $60.0 million during its highest
seasonal period. Combined, the Revolver and the Wholesale Financing Facility
(the Credit Facilities) allow the Company to borrow from $55.0 million to
$110.0 million depending on the seasonal period. The seasonal structure of the
Credit Facilities coincides with the seasonality of the Companys business and
allows the Company to minimize banking fees. The interest rate under the Credit
Facilities is a rate indexed to the London Interbank Offered Rate (LIBOR) plus
1.75 percentage points.

Borrowing is limited to 85% of eligible accounts receivable. The Credit
Facility is secured by substantially all of the Companys operating assets.
Current obligations are first funded and then all cash receipts are
automatically applied to reduce outstanding borrowings. The Credit Facility
also contains certain covenants that include restrictions on the payment of
dividends and the purchase of the Companys Common Stock, as well as provisions
specifying compliance with certain quarterly and annual financial ratios. As of
March 31, 2003 the Company is in compliance with all of its covenants under the
Credit Facility and has available credit of $30.0 million.

-16-



---



##### 



On March 31, 2003 the Company and its group of banks signed an amendment
to the Revolver in which the group of banks consented to allow the Company to repurchase an additional $5.0
million worth of its stock from third-party shareholders. During the first three months of 2003 the Company repurchased
$1.8 million of its stock.

The Company anticipates that it will continue to rely primarily on
operating cash flow, bank loans and vendor credit to finance its operating cash
needs. The Company believes that such funds should be sufficient to satisfy
the Companys near term anticipated cash requirements for operations.
Nonetheless, the Company may seek additional sources of capital, including
permanent financing over a longer term at fixed rates, to finance its working
capital requirements. The Company believes that such capital sources will be
available to it on acceptable terms, if needed.

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995

Except for historical information, all of the statements, expectations and
assumptions contained in the foregoing material are forward-looking
statements (within the meaning of the Private Securities Litigation Reform Act
of 1995, as amended) that involve a number of risks and uncertainties. All such
forward-looking statements are intended to be subject to the safe harbor
protection provided by the Private Securities Reform Act of 1995, as amended,
and by other applicable securities laws. It is possible that the assumptions
made by management  including, but not limited to, those relating to favorable
gross margins, a favorable mix of contracts, benefits of a more efficient
operation, future contract awards, returns on new product programs,
profitability, and increased control of operating costs  may not materialize.
Actual results may differ materially from those projected or implied in any
forward-looking statements. Readers are cautioned not to place undue reliance
on these forward-looking statements, which reflect managements analysis only
as of the date hereof. The Company undertakes no obligation to revise publicly
the forward-looking statements to reflect events or circumstances that arise
after the date hereof. Readers should carefully review the risk factors
described in other documents the Company files from time to time with the
Securities and Exchange Commission, including the Quarterly Reports on the Form
10-Q to be filed by the Company subsequent to this Annual Report on Form 10-K
and any Current Reports on Form 8-K filed by the Company.

Item 3. Quantitative And Qualitative Disclosures About Market Risk

The Company has a $50.0 million Credit Facility indexed at LIBOR plus 1.75
percentage points. This variable rate Credit Facility subjects the Company to
cash flow exposure resulting from changes in interest rates.

Item 4. Controls and Procedures

Based on their most recent evaluation, which was completed within 90 days
of the filing of this Form 10-Q, the Companys Chief Executive Officer and
Chief Financial Officer believe the Companys disclosure controls and
procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) are effective
to ensure that information required to be disclosed by the Companys
management, including its principle executive officer and principle financial
officer, as appropriate, to allow timely decisions regarding required
disclosure. There were no significant changes in the Companys internal
controls or the other factors that could significantly affect these controls
subsequent to the date of their evaluation and there were no corrective actions
with regard to significant deficiencies and material weaknesses.

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PART II  OTHER INFORMATION

Item 5. Exhibits and Reports on Form 8-K

| |      |  |                                                                                                                          
| | ---- |  | -------------------------------------------------------------------------------------------------------------------------
| | (a)  |  | Exhibits:                                                                                                                
|
| | 99.1 |  | Certification Pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes  Oxley Act of 2002.
|
| | (b)  |  | Reports on Form 8-K:                                                                                                     
|
| |      |  | No reports on Form 8-K have been filed during the quarter for which this
report is filed.                                

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

| |                                                                                             
| | --------------------------------------------------------------------------------------------
| | Date: May 15, 2003                                                                          
|
| | GTSI Corp.                                                                                  
|
| | By:   /s/ Dendy YoungDendy Young
Chairman and Chief Executive Officer                       
|
| | By:   /s/ Thomas A. MutrynThomas A. Mutryn
Senior Vice President and Chief Financial Officer

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##### 



Written Certification Of Chief Executive Officer

I, Dendy Young, certify that:

1.     I have reviewed this quarterly report on Form 10-Q of GTSI Corp.;

2.     Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;

3.     Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

4.     The registrants other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly
during the period in which this quarterly report is being prepared;

b) evaluated the effectiveness of the registrants disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the Evaluation Date); and

c) presented in this quarterly report our conclusions about the effectiveness
of the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;

5.     The registrants other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrants auditors and the audit
committee of registrants board of directors (or persons performing the
equivalent function):

a) all significant deficiencies in the design or operation of internal controls
which could adversely affect the registrants ability to record, process,
summarize and report financial data and have identified for the registrants
auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrants internal controls;
and

6.     The registrants other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.

|                                                                    
|--------------------------------------------------------------------
|Date: May 15, 2003                                                  
|                                                                    
|GTSI Corp.                                                          
|                                                                    
|By:  /s/ Dendy YoungDendy Young
Chairman and Chief Executive Officer

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##### 



Written Certification Of Chief Financial Officer

I, Thomas A. Mutryn, certify that:

1.     I have reviewed this quarterly report on Form 10-Q of GTSI Corp.;

2.     Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;

3.     Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

4.     The registrants other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly
during the period in which this quarterly report is being prepared;

b) evaluated the effectiveness of the registrants disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the Evaluation Date); and

c) presented in this quarterly report our conclusions about the effectiveness
of the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;

5.     The registrants other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrants auditors and the audit
committee of registrants board of directors (or persons performing the
equivalent function):

a) all significant deficiencies in the design or operation of internal controls
which could adversely affect the registrants ability to record, process,
summarize and report financial data and have identified for the registrants
auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrants internal controls;
and

6.     The registrants other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.

|                                                                                           
|-------------------------------------------------------------------------------------------
|Date: May 15, 2003                                                                         
|                                                                                           
|GTSI Corp.                                                                                 
|                                                                                           
|                                                                                           
|By:  /s/ Thomas A. MutrynThomas A. Mutryn
Chief Financial Officer and Senior Vice President

-21-