CTG Computer Task Group, Inc.

Management Discussion

• Reimbursable expenses billed to clients and included in revenue totaled $3.2 million and $3.3 million in 2018 and 2017, respectively.
• The revenue increase in North America in 2018 as compared with 2017 was primarily due to a significant increase in demand for the Company's IT solutions business, primarily in our healthcare vertical market, and a modest increase in demand for our IT staffing business, primarily in our technology services provider vertical market. The revenue increase in Europe is primarily due to strong demand for the Company’s services in the European markets we serve, and the acquisition of Soft Company on February 15, 2018, which has an annual revenue of approximately $30 million.
• On a consolidated basis, IT solutions revenue increased $21.7 million or 23.7% in 2018 as compared with 2017. 2018 The increase is primarily due to an increase in IT solutions services in Europe and the addition of Soft Company, which was acquired on February 15, 2018. Soft Company primarily specializes in providing IT services to finance, insurance, telecom, and media services companies. The increase was also due in part to our strategy to shift to non-electronic health records (EHR) services in our healthcare vertical market. The Company expanded its healthcare IT business development team in 2018 with individuals who have experience selling healthcare IT services such as advisory and technical services, outsourcing, and staff augmentation. This team was successful in driving revenue growth in this vertical market and expanding the non-EHR healthcare related services we provide.