Comsys reduces debt by $25.7 million in third quarter, will seek near-term acquisitions

By Jennifer Lanning Drey

Portland, Ore., Nov. 7 - Comsys IT Partners, Inc. dropped its debt level by $25.7 million during the third quarter - an action that company executives said will allow Comsys to pursue near-term strategic acquisitions.

Comsys' debt balance dropped to $72.7 million during the quarter from $98.4 million at the end of the previous quarter.

The company expects to further pay down debt, although at a less substantial level than the third-quarter reduction, during the fourth quarter, Amy Bobbitt, Comsys' chief accounting officer, said Wednesday during the company's quarterly earnings conference call.

The company reported third-quarter net income of $9.6 million, up from $2.9 million in the third quarter of 2006, due to a decrease in interest expense caused by the debt reduction.

With its lower leverage level, the company believes it is now in a better position to carry out acquisitions that would provide opportunities for it to offer different lines of service or produce revenue synergies for Comsys, Larry L. Enterline, Comsys' chief executive officer, said during the call.

"Our deal flow remains strong and we believe the acquisition process can extend our geographic reach for our services lines where, and when, it makes sense," Enterline said.

The company will look to use cash for acquisitions rather than increase leverage again, he said.

Comsys had cash of $1.5 million at Sept. 30, compared with $1.6 million at Dec. 31. Cash provided by operating activities in the third quarter was $27.0 million, compared with $12.6 million in the prior year's third quarter.

Additional near-term priorities for the company include internal growth, increasing its focus on sales and marketing and devoting attention to process improvements, some of which may relate to working capital, Enterline said.

Comsys is a Houston-based provider of information technology staffing and consulting services.

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