##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
  þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended June 30, 2009
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from  to
 Commission File Number: 0-19394
 GTSI CORP.
  Delaware
    
    54-1248422(State or other jurisdiction of
    
    (I.R.S. Employerincorporation or organization)
    
    Identification No.)2553 Dulles View Drive, Suite 100, Herndon, VA
    
    20171-5219(Address of principal executive offices)
    
    (Zip Code)
 703-502-2000
 
 þ o
 Yes o No o
  Large accelerated filer o
    
    Accelerated filer þ
    
    Non-accelerated filer o
    
    Smaller reporting company o
 o þ




---



##### 



GTSI Corp.
Form 10-Q for the Quarter Ended June 30, 2009
 INDEX
 PagePART I  FINANCIAL INFORMATIONItem 1. Financial Statements Unaudited Condensed Consolidated Balance Sheets as of June 30, 2009 and December 31, 2008
    
    
    1Unaudited Condensed Consolidated Statements of Operations for the Three and Six Months Ended June
30, 2009 and 2008
    
    
    2Unaudited Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2009
and 2008
    
    
    3Notes to Unaudited Condensed Consolidated Financial Statements
    
    
    4Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    12Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    22Item 4. Controls and Procedures
    
    
    22PART II  OTHER INFORMATIONItem 1. Legal Proceedings
    
    
    23Item 1A. Risk Factors
    
    
    23Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    23Item 3. Defaults Upon Senior Securities
    
    
    24Item 4. Submission of Matters to a Vote of Security Holders
    
    
    24Item 5. Other Information
    
    
    24Item 6. Exhibits
    
    
    24SIGNATURES
    
    
    25Exhibit 31.1Exhibit 31.2Exhibit 32




---



##### Table of Contents



PART I. FINANCIAL INFORMATION
 
 Item 1. Financial Statements
 GTSI CORP.
 
 UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
  June 30, 2009
    
    
    December 31, 2008ASSETSCurrent assets:Cash and cash equivalents
    
    $
    22,992
    
    
    $
    Accounts receivable, net
    
    
    150,210
    
    
    
    190,740Inventory
    
    
    18,790
    
    
    
    13,491Deferred costs
    
    
    5,052
    
    
    
    7,849Other current assets
    
    
    10,573
    
    
    
    7,807Total current assets
    
    
    207,617
    
    
    
    219,887Depreciable assets, net
    
    
    12,317
    
    
    
    13,664Long-term receivables and other assets
    
    
    47,011
    
    
    
    14,078Total assets
    
    $
    266,945
    
    
    $
    247,629LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Borrowings under credit facility
    
    $
    
    
    
    $
    22,387Accounts payable
    
    
    98,854
    
    
    
    103,553Accounts payable  floor plan
    
    
    29,239
    
    
    
    Financed lease debt, current portion
    
    
    3,061
    
    
    
    6,538Accrued liabilities
    
    
    20,749
    
    
    
    17,857Deferred revenue
    
    
    2,581
    
    
    
    2,079Total current liablilites
    
    
    154,484
    
    
    
    152,414Long-term financed lease debt
    
    
    435
    
    
    
    2,530Other liabilities
    
    
    25,992
    
    
    
    2,571Total liabilities
    
    
    180,911
    
    
    
    157,515Commitments and contingencies (See Note 10)Stockholders equityPreferred stock  $0.25 par value, 680,850
shares authorized; none issued or outstanding
    
    
    
    
    
    
    Common stock  $0.005 par value, 20,000,000
shares authorized; 10,130,842 issued and
9,684,477 outstanding at June 30, 2009; and
10,140,757 issued and 9,866,662 outstanding at
December 31, 2008
    
    
    50
    
    
    
    50Capital in excess of par value
    
    
    51,719
    
    
    
    50,722Retained earnings
    
    
    35,278
    
    
    
    39,469Treasury stock, 250,897 shares at June 30,
2009 and 16,176 shares at December 31, 2008,
at cost
    
    
    (1,013
    )
    
    
    (127
    )Total stockholders equity
    
    
    86,034
    
    
    
    90,114Total liabilities and stockholders equity
    
    $
    266,945
    
    
    $
    247,629
   1




---



##### Table of Contents



GTSI CORP.
 
 UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
  Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2009
    
    
    2008
    
    
    2009
    
    
    2008SALESProduct
    
    $
    149,869
    
    
    $
    143,082
    
    
    $
    277,589
    
    
    $
    270,650Service
    
    
    12,576
    
    
    
    13,357
    
    
    
    26,850
    
    
    
    25,269Financing
    
    
    2,156
    
    
    
    2,761
    
    
    
    4,234
    
    
    
    6,071164,601
    
    
    
    159,200
    
    
    
    308,673
    
    
    
    301,990COST OF SALESProduct
    
    
    133,217
    
    
    
    129,362
    
    
    
    252,016
    
    
    
    244,183Service
    
    
    7,640
    
    
    
    8,816
    
    
    
    16,924
    
    
    
    14,532Financing
    
    
    724
    
    
    
    1,617
    
    
    
    1,050
    
    
    
    2,464141,581
    
    
    
    139,795
    
    
    
    269,990
    
    
    
    261,179GROSS MARGIN
    
    
    23,020
    
    
    
    19,405
    
    
    
    38,683
    
    
    
    40,811SELLING, GENERAL & ADMINISTRATIVE EXPENSES
    
    
    24,428
    
    
    
    22,831
    
    
    
    47,291
    
    
    
    48,702LOSS FROM OPERATIONS
    
    
    (1,408
    )
    
    
    (3,426
    )
    
    
    (8,608
    )
    
    
    (7,891
    )INTEREST AND OTHER INCOME (EXPENSE), NETInterest and other income
    
    
    777
    
    
    
    276
    
    
    
    843
    
    
    
    405Equity income from affiliates
    
    
    2,114
    
    
    
    744
    
    
    
    2,940
    
    
    
    1,149Interest expense
    
    
    (1,949
    )
    
    
    (492
    )
    
    
    (2,513
    )
    
    
    (1,674
    )Interest and other income (expense), net
    
    
    942
    
    
    
    528
    
    
    
    1,270
    
    
    
    (120
    )LOSS BEFORE INCOME TAXES
    
    
    (466
    )
    
    
    (2,898
    )
    
    
    (7,338
    )
    
    
    (8,011
    )INCOME TAX BENEFIT (PROVISION)
    
    
    156
    
    
    
    (11
    )
    
    
    3,148
    
    
    
    37NET LOSS
    
    $
    (310
    )
    
    $
    (2,909
    )
    
    $
    (4,190
    )
    
    $
    (7,974
    )LOSS PER SHAREBasic
    
    $
    (0.03
    )
    
    $
    (0.30
    )
    
    $
    (0.43
    )
    
    $
    (0.82
    )Diluted
    
    $
    (0.03
    )
    
    $
    (0.30
    )
    
    $
    (0.43
    )
    
    $
    (0.82
    )WEIGHTED AVERAGE SHARES OUTSTANDINGBasic
    
    
    9,700
    
    
    
    9,762
    
    
    
    9,781
    
    
    
    9,727Diluted
    
    
    9,700
    
    
    
    9,762
    
    
    
    9,781
    
    
    
    9,727
   2




---



##### Table of Contents



GTSI CORP.
 
 UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
  Six Months EndedJune 30,2009
    
    
    2008CASH FLOWS FROM OPERATING ACTIVITIES:Net loss
    
    $
    (4,190
    )
    
    $
    (7,974
    )Adjustments to reconcile net loss to net cash
provided by operating activities
    
    
    22,087
    
    
    
    36,242Net cash provided by operating activities
    
    
    17,897
    
    
    
    28,268CASH FLOWS FROM INVESTING ACTIVITIES:Purchase of depreciable assets
    
    
    (705
    )
    
    
    (1,194
    )Net cash used in investing activities
    
    
    (705
    )
    
    
    (1,194
    )CASH FLOWS FROM FINANCING ACTIVITES:Payments on Credit Facility
    
    
    (22,387
    )
    
    
    (18,031
    )Borrowings under Floor plan loans
    
    
    29,239
    
    
    
    Payment of Term Loan
    
    
    
    
    
    
    (10,000
    )Common Stock Purchases
    
    
    (1,430
    )
    
    
    (212
    )Proceeds from equity transactions
    
    
    378
    
    
    
    340Net cash provided by (used in) financing activities
    
    
    5,800
    
    
    
    (27,903
    )NET INCREASE (DECREASE) IN CASH
    
    
    22,992
    
    
    
    (829
    )CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
    
    
    
    
    
    
    829CASH AND CASH EQUIVALENTS, END OF PERIOD
    
    $
    22,992
    
    
    $
    
   3




---



##### Table of Contents



GTSI
CORP.
 
 NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 1. Basis of Presentation
    2. New Accounting Pronouncements
 Subsequent Events
 Accounting for Transfers of Financial Assets Accounting for Transfers and Servicing of
Financial Assets and Extinguishments of Liabilities Consolidation of Variable Interest Entities
 The FASB Accounting Standards Codification The Hierarchy of Generally Accepted Accounting
Principles
 3. Stock-Based Compensation
 Stock Incentive Plans
   4




---



##### Table of Contents



Stock Options
  WeightedAverageRemaining
    
    
    AggregateShares
    
    
    Weighted Average
    
    
    Contractual
    
    
    Intrinsic Value(in thousands)
    
    
    Exercise Price
    
    
    Term
    
    
    (in thousands)Outstanding at January 1, 2009
    
    
    1,648
    
    
    $
    8.05Granted
    
    
    
    
    
    
    Exercised
    
    
    (45
    )
    
    
    3.88Forfeited
    
    
    (15
    )
    
    
    6.73Expired
    
    
    (123
    )
    
    
    9.16Outstanding at June 30, 2009
    
    
    1,465
    
    
    $
    8.10
    
    
    
    3.13
    
    
    $
    122Exercisable at June 30, 2009
    
    
    1,140
    
    
    $
    8.32
    
    
    
    2.87
    
    
    $
    122
  Restricted Shares
   Weighted AverageShares
    
    
    Grant-Date Fair(in thousands)
    
    
    ValueNonvested at January 1, 2009
    
    
    290
    
    
    $
    10.83Granted
    
    
    38
    
    
    
    4.53Vested
    
    
    (90
    )
    
    
    10.04Forfeited
    
    
    (17
    )
    
    
    10.12Nonvested at June 30, 2009
    
    
    221
    
    
    $
    10.13
  5




---



##### Table of Contents



Stock Appreciation Rights (SARs)
  WeightedAverageWeighted
    
    
    Remaining
    
    
    AggregateShares
    
    
    Average
    
    
    Contractual
    
    
    Intrinsic Value(in thousands)
    
    
    Exercise Price
    
    
    Term
    
    
    (in thousands)Outstanding at January 1, 2009
    
    
    758
    
    
    $
    9.60Granted
    
    
    9
    
    
    
    9.60Exercised
    
    
    
    
    
    
    Forfeited
    
    
    (26
    )
    
    
    9.60Expired
    
    
    (30
    )
    
    
    9.60Outstanding at June 30, 2009
    
    
    711
    
    
    $
    9.60
    
    
    
    4.70
    
    
    $
    Exercisable at June 30, 2009
    
    
    269
    
    
    $
    9.60
    
    
    
    4.61
    
    
    $
    
  Unrecognized Compensation
  4. Long-term receivables and other assets
  June 30, 2009
    
    
    December 31, 2008Lease and other receivables, net of
unearned interest
    
    $
    39,384
    
    
    $
    6,988Eyak
    
    
    6,255
    
    
    
    5,261Other Assets
    
    
    1,372
    
    
    
    1,829$
    47,011
    
    
    $
    14,078
 5. Lease and Other Receivables
    6




---



##### Table of Contents



June 30, 2009
    
    
    December 31, 2008Future minimum lease payments receivable
    
    $
    10,828
    
    
    $
    14,921Unguaranteed residual values
    
    
    1,172
    
    
    
    3,458Unearned income
    
    
    (1,454
    )
    
    
    (1,164
    )$
    10,546
    
    
    $
    17,215
  June 30, 2009
    
    
    December 31, 2008Future minimum payments receivable
    
    $
    49,905
    
    
    $
    14,802Unearned income
    
    
    (3,282
    )
    
    
    (1,479
    )$
    46,623
    
    
    $
    13,323
 6. Transferred Receivables and Financed Lease Debt
 Accounting for Transfers and Servicing of
Financial Assets and Extinguishments of Liabilities
  7. Credit Facility and Credit Agreement
     7




---



##### Table of Contents



Total Credit Agreement
    
    $
    135,000Borrowing base limitation
    
    
    (45,039
    )Total borrowing capacity
    
    
    89,961Less: interest-bearing borrowings
    
    
    Less: non-interest bearing advances (floor plan loans)
    
    
    (29,239
    )Less: letters of credit
    
    
    (5,138
    )Total unused availability
    
    $
    55,584
     8. Loss Per Share
     8




---



##### Table of Contents



Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2009
    
    
    2008
    
    
    2009
    
    
    2008Basic loss per shareNet loss
    
    $
    (310
    )
    
    $
    (2,909
    )
    
    $
    (4,190
    )
    
    $
    (7,974
    )Weighted average shares outstanding
    
    
    9,700
    
    
    
    9,762
    
    
    
    9,781
    
    
    
    9,727Basic loss per share
    
    $
    (0.03
    )
    
    $
    (0.30
    )
    
    $
    (0.43
    )
    
    $
    (0.82
    )Diluted loss per share:Net loss
    
    $
    (310
    )
    
    $
    (2,909
    )
    
    $
    (4,190
    )
    
    $
    (7,974
    )Weighted average shares outstanding
    
    
    9,700
    
    
    
    9,762
    
    
    
    9,781
    
    
    
    9,727Incremental shares attributable to
the assumed
exercise of outstanding stock options
    
    
    N/A
    
    
    
    N/A
    
    
    
    N/A
    
    
    
    N/AWeighted average shares and
equivalents
    
    
    9,700
    
    
    
    9,762
    
    
    
    9,781
    
    
    
    9,727Diluted loss per share
    
    $
    (0.03
    )
    
    $
    (0.30
    )
    
    $
    (0.43
    )
    
    $
    (0.82
    )
 9. Income Taxes
   Accounting for Income
Taxes.
 10. Commitments and Contingencies
 Product Warranties
  Six Months EndedJune 30,2009
    
    
    2008Accrued warranties at beginning of period
    
    $
    155
    
    
    $
    283Charges made against warranty liabilities
    
    
    (3
    )
    
    
    (20
    )Adjustments to warranty reserves
    
    
    (4
    )
    
    
    (133
    )Accruals for additional warranties sold
    
    
    24
    
    
    
    61Accrued warranties at end of period
    
    $
    172
    
    
    $
    191
  9




---



##### Table of Contents



Six Months EndedJune 30,2009
    
    
    2008Deferred warranty revenue at beginning of period
    
    $
    221
    
    
    $
    130Deferred warranty revenue recognized
    
    
    (221
    )
    
    
    (131
    )Revenue deferred for additional warranties sold
    
    
    269
    
    
    
    369Deferred warranty revenue at end of period
    
    $
    269
    
    
    $
    368
 Letters of Credit
   Employment Agreements
  Contingencies
   10




---



##### Table of Contents



11. Related Party Transactions
  Six Months Ended 
June 30,2009
    
    
    2008Beginning Balance at January 1
    
    $
    5,261
    
    
    $
    2,875Equity Earnings
    
    
    2,940
    
    
    
    1,149Distributions
    
    
    (1,946
    )
    
    
    (1,462
    )Ending Balance at June 30
    
    $
    6,255
    
    
    $
    2,562
   Three Months Ended
 June 30,
    
    
    Six Months Ended
 June 30,2009
    
    
    2008
    
    
    2009
    
    
    2008Revenues
    
    $
    91,096
    
    
    $
    53,815
    
    
    $
    161,819
    
    
    $
    101,532Gross margin
    
    $
    11,667
    
    
    $
    5,742
    
    
    $
    18,544
    
    
    $
    10,488Net income
    
    $
    5,715
    
    
    $
    1,782
    
    
    $
    7,882
    
    
    $
    2,878
 12. Subsequent Events
   11




---



##### Table of Contents



Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of
Operations
 Form 10-Q
 Disclosure Regarding Forward-Looking Statements
  
    
    Our reliance on a small number of large transactions for significant portions of our
sales and gross margins
 
    
    Our ability to shift our business model from a reseller of products to a high-end
solutions provider
 
    
    Any issue that compromises our relationship with agencies of the Federal government
would cause serious harm to our business
 
    
    Changes in Federal government fiscal spending
 
    
    Our ability to meet the covenants under our Credit Agreement in future periods
 
    
    Negativity to our business due to the current global economic and credit conditions
 
    
    Possible infrastructure failures
 
    
    Any material weaknesses in our internal control over financial reporting
 
    
    Possible net losses, if we fail to align costs with our sales levels
 
    
    Our quarterly sales and cash flows are volatile, which makes our future financial
results difficult to forecast
 
    
    Unsatisfactory performance by third parties with which we work could hurt our
reputation, operating results and competitiveness
 
    
    Our ability to adapt to consolidation within the OEM market place
 
    
    Our ability to integrate any potential future acquisitions, strategic investments or
mergers
  Overview
   12




---



##### Table of Contents




    
    Total sales increased $5.4 million.
 
    
    Gross margin increased $3.6 million.
 
    
    Selling, General & Administrative expenses increased $1.6 million.
 
    
    Loss before income taxes decreased $2.4 million.
 
    
    Cash provided by operations decreased $13.8 million.
 
    
    Interest and other income increased $0.4 million.
  
    
    Total sales increased $6.7 million.
 
    
    Gross margin decreased $2.1 million.
 
    
    Selling, General & Administrative expenses decreased $1.4 million.
 
    
    Loss before income taxes decreased $0.7 million.
 
    
    Cash provided by operations decreased $10.4 million.
 
    
    Interest and other income increased $1.4 million.
  13




---



##### Table of Contents



Critical Accounting Estimates and Policies
  Historical Results of Operations
  Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2009
    
    
    2008
    
    
    2009
    
    
    2008Sales
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %Cost of sales
    
    
    86.0
    %
    
    
    87.8
    %
    
    
    87.5
    %
    
    
    86.5
    %Gross margin
    
    
    14.0
    %
    
    
    12.2
    %
    
    
    12.5
    %
    
    
    13.5
    %Selling, general, and administrative expenses
    
    
    14.8
    %
    
    
    14.3
    %
    
    
    15.3
    %
    
    
    16.1
    %Loss from operations
    
    
    (0.8
    )%
    
    
    (2.1
    )%
    
    
    (2.8.
    )%
    
    
    (2.6
    )%Interest and other income (expense), net
    
    
    0.6
    %
    
    
    0.3
    %
    
    
    0.4
    %
    
    
    0.0
    %Loss before taxes
    
    
    (0.2
    )%
    
    
    (1.8
    )%
    
    
    (2.4
    )%
    
    
    (2.6
    )%Income tax benefit
    
    
    0.1
    %
    
    
    
    
    
    
    1.0
    %
    
    
    Net Loss
    
    
    (0.1
    )%
    
    
    (1.8
    )%
    
    
    (1.4
    )%
    
    
    (2.6
    )%
  Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,Sales by Type
    
    2009
    
    
    2008
    
    
    2009
    
    
    2008Hardware
    
    $
    114.1
    
    
    
    69.4
    %
    
    $
    109.7
    
    
    
    68.9
    %
    
    $
    192.6
    
    
    
    62.4
    %
    
    $
    206.3
    
    
    
    68.3
    %Software
    
    
    35.7
    
    
    
    21.7
    %
    
    
    33.3
    
    
    
    20.9
    %
    
    
    85.0
    
    
    
    27.5
    %
    
    
    64.3
    
    
    
    21.3
    %Service
    
    
    12.6
    
    
    
    7.6
    %
    
    
    13.4
    
    
    
    8.4
    %
    
    
    26.9
    
    
    
    8.7
    %
    
    
    25.3
    
    
    
    8.4
    %Financing
    
    
    2.2
    
    
    
    1.3
    %
    
    
    2.8
    
    
    
    1.8
    %
    
    
    4.2
    
    
    
    1.4
    %
    
    
    6.1
    
    
    
    2.0
    %Total
    
    $
    164.6
    
    
    
    100.0
    %
    
    $
    159.2
    
    
    
    100.0
    %
    
    $
    308.7
    
    
    
    100.0
    %
    
    $
    302.0
    
    
    
    100.0
    %
  14




---



##### Table of Contents



Three Months Ended
    
    
    Six Months EndedSales by Vendor (based on
    
    June 30,
    
    
    June 30,YTD 2009 sales)
    
    2009
    
    
    2008
    
    
    2009
    
    
    2008Microsoft
    
    $
    14.5
    
    
    
    8.8
    %
    
    $
    19.6
    
    
    
    12.3
    %
    
    $
    52.3
    
    
    
    16.9
    %
    
    $
    38.0
    
    
    
    12.6
    %Cisco
    
    
    34.5
    
    
    
    21.0
    %
    
    
    31.4
    
    
    
    19.7
    %
    
    
    51.5
    
    
    
    16.7
    %
    
    
    52.4
    
    
    
    17.4
    %Sun Microsystems
    
    
    27.5
    
    
    
    16.7
    %
    
    
    17.8
    
    
    
    11.2
    %
    
    
    36.2
    
    
    
    11.7
    %
    
    
    35.1
    
    
    
    11.6
    %Panasonic
    
    
    12.9
    
    
    
    7.8
    %
    
    
    15.5
    
    
    
    9.7
    %
    
    
    23.5
    
    
    
    7.6
    %
    
    
    27.3
    
    
    
    9.0
    %HP
    
    
    10.9
    
    
    
    6.6
    %
    
    
    9.3
    
    
    
    5.8
    %
    
    
    23.2
    
    
    
    7.5
    %
    
    
    17.4
    
    
    
    5.8
    %Others, net of reserves
and adjustments
    
    
    64.3
    
    
    
    39.1
    %
    
    
    65.6
    
    
    
    41.3
    %
    
    
    122.0
    
    
    
    39.6
    %
    
    
    131.8
    
    
    
    43.6
    %Total
    
    $
    164.6
    
    
    
    100.0
    %
    
    $
    159.2
    
    
    
    100.0
    %
    
    $
    308.7
    
    
    
    100.0
    %
    
    $
    302.0
    
    
    
    100.0
    %
 Three Months Ended June 30, 2009 Compared With the Three Months Ended June 30, 2008
 Sales
       15




---



##### Table of Contents



Gross Margin
     Selling, General & Administrative Expenses (SG&A)
  Interest and Other Income, Net
  Income Taxes
  Accounting for Income Taxes in Interim Periods
  16




---



##### Table of Contents



Six Months Ended June 30, 2009 Compared With the Six Months Ended June 30, 2008
 Sales
      Gross Margin
      17




---



##### Table of Contents



Selling, General & Administrative Expenses (SG&A)
  Interest and Other Income, Net
  Income Taxes
   Seasonal Fluctuations
    18




---



##### Table of Contents



Liquidity and Capital Resources
 Cash flows for the six months ended June 30,
 (in millions)
    
    2009
    
    
    2008
    
    
    ChangeCash provided by operating activities
    
    $
    17.9
    
    
    $
    28.3
    
    
    $
    (10.4
    )Cash used in investing activities
    
    $
    (0.7
    )
    
    $
    (1.2
    )
    
    $
    (0.5
    )Cash provided by (used in) financing activities
    
    $
    5.8
    
    
    $
    (27.9
    )
    
    $
    33.7
     Credit Facility and Credit Agreement
     Total Credit Agreement
    
    $
    135,000Borrowing base limitation
    
    
    (45,039
    )Total borrowing capacity
    
    
    89,961Less: interest-bearing borrowings
    
    
    Less: non-interest bearing advances (floor plan loans)
    
    
    (29,239
    )Less: letters of credit
    
    
    (5,138
    )Total unused availability
    
    $
    55,584
  19




---



##### Table of Contents



Liquidity
     Capital Requirements
   20




---



##### Table of Contents



New Accounting Pronouncements
 Subsequent Events
 Accounting for Transfers of Financial Assets Accounting for Transfers and Servicing of
Financial Assets and Extinguishments of Liabilities Consolidation of Variable Interest Entities
 The FASB Accounting Standards Codification The Hierarchy of Generally Accepted
Accounting Principles
  21




---



##### Table of Contents



Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
 Item 4. Controls and Procedures
 Evaluation of Disclosure Controls and Procedures
   Changes in Internal Control over Financial Reporting
   22




---



##### Table of Contents



PART II. OTHER INFORMATION
 
 Item 1. Legal Proceedings
   
 Item 1A. Risk Factors
  
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
       23




---



##### Table of Contents



(a)
    
    
    
    
    
    
    Total Number of
    
    
    Maximum DollarTotal
    
    
    
    
    
    
    Shares Purchased
    
    
    Value of SharesNumber
    
    
    Average
    
    
    as Part of
    
    
    that May Yet Beof Share
    
    
    Price Paid
    
    
    Publicly Announced
    
    
    Purchased Under thePeriod
    
    Purchased
    
    
    per Share
    
    
    Plans or Programs
    
    
    Plams or ProgramsApril 1 to April 30
    
    
    316,861
    
    
    $
    4.00
    
    
    
    316,861
    
    
    $
    3,732,556May 1 to May 31
    
    
    700
    
    
    $
    5.12
    
    
    
    
    
    
    $
    3,732,556June 1 to June 30
    
    
    5,557
    
    
    $
    5.79
    
    
    
    5,557
    
    
    $
    3,700,383323,118
    
    
    
    4.03
    
    
    
    322,418
  
 Item 3. Defaults Upon Senior Securities
  
 Item 4. Submission of Items to a Vote of Security Holders
    Nominees
    
    Votes For
    
    
    Votes WithheldSteven Kelman
    
    
    5,125,832
    
    
    
    2,469,619Barry Reisig
    
    
    4,530,151
    
    
    
    3,065,300John M. Toups
    
    
    5,064,386
    
    
    
    2,531,065
 
 Item 5. Other Information
  
 Item 6. Exhibits
   24




---



##### Table of Contents



SIGNATURES
  GTSI Corp.Date: August 6, 2009
    /s/ JAMES J. LETOJames J. LetoChief Executive OfficerDate: August 6, 2009
    /s/ PETER WHITFIELDPeter WhitfieldSenior Vice President and Chief Financial Officer  25




---



##### Table of Contents



EXHIBIT INDEX
 ExhibitNumber
    
    Description10.1
    
    
    Credit Agreement dated as of May 27, 2009 among Castle Pines Capital LLC, as Administrative
Agent and a Lender, Wells Fargo Foothill, LLC as Administrative Agent and Collateral Agent, and
GTSI Corp. (7)10.2
    
    
    First Amendment to Credit Agreement dated as of May 27, 2009 among GTSI Corp., Castle Pines Capital LLC and Wells Fargo Foothill LLC (8)10.3
    
    
    GTSIs Board of Directors authorization of common stock repurchase program dated as of June 8,
2009 (9)31.1
    
    
    Section 302 Certification of Chief Executive Officer (filed herewith)31.2
    
    
    Section 302 Certification of Chief Financial Officer (filed herewith)32
    
    
    Section 906 Certification of Chief Executive Officer and Chief Financial Officer (filed herewith)
 
 (1)
    
    Incorporated by reference to the Registrants current report on Form 8-K dated May 27, 2009.(2)
    
    Incorporated by reference to the Registrants current report on Form 8-K dated May 27, 2009.(3)
    
    Incorporated by reference to the Registrants current report on Form 8-K dated June 12, 2009.  26