ePlus Reports Second Quarter Financial Results
Earnings Conference Call Scheduled for November 6
HERNDON, Va., Nov 5, 2012 (Menafn - GlobeNewswire via COMTEX) --ePlus inc. PLUS, a leading provider of technology solutions, today announced financial results for its second quarter of fiscal year 2013, which ended September 30, 2012. Total revenues for the quarter increased 27.7% to 260.1 million compared to 203.7 million in the quarter ended September 30, 2011. Net earnings increased 42.0% to 10.0 million in the second quarter fiscal 2013, as compared to 7.1 million in the prior year. Fully diluted earnings per share increased 49.4% to 1.27 per share compared to 0.85 per share in the prior period.
For the six months ended September 30, 2012, total revenue increased 31.9% to 504.8 million, and total costs and expenses increased 30.2% to 474.3 million. Net earnings were 18.1 million for the six months or 2.29 per diluted share, an increase of 68.1%, as compared to 10.8 million, or 1.28 per diluted share, during the six months ended September 30, 2011.
"We are very pleased with our financial results for the quarter," stated Phillip G. Norton, chairman, president, and CEO of ePlus. "We continue to see large enterprise customers show interest in our advanced technology solutions. Our focus on building technology solutions for the cloud, data center, collaboration, managed services, and security are helping to drive revenue and maintain our gross margin, which was 18.0% as compared to 18.1% the prior year. Moreover, the investments we have made in our business, including geographic expansion into new markets and acquisitions, helped us achieve great results in the quarter."
As of September 30, 2012, the Company had 45.9 million of cash and investments, as compared to 41.2 million on March 31, 2012. As of September 30, 2012, the Company had total shareholders' equity of 238.7 million and 8.1 million shares outstanding, as compared to 219.6 million and 8.0 million shares, respectively, as of March 31, 2012.
Results of Operations
The company presents its financial results in two segments, the technology sales business segment and the financing business segment. The technology sales business segment sells information technology equipment, software, and related services primarily to corporate customers on a nationwide basis, and also provides Internet-based business-to-business supply chain management solutions for information technology and other operating resources. The financing business segment offers lease-financing solutions to corporations and governmental entities nationwide.
Technology Sales Business Segment
--Total revenues increased 28.7% to 251.8 million compared to 195.6
million in the quarter ended September 30, 2011. The increase in
revenues was due to increases in customer demand, particularly from
Fortune 100 companies, and the result of past investments made to expand
product and service offerings and the Company's geographical
footprint.
--Total costs and expenses were 236.9 million compared to 186.4 million
in the same quarter last year, an increase of 27.1%. The increase in
costs and expenses was primarily driven by increases in cost of sales,
products and services, which was consistent with the increase in sales
of products and services. In addition, salaries and benefits increased
as a result of investments in sales and support personnel and strategic
acquisitions.
--Gross margin on sales of products and services was 18.0% and 18.1%
during the quarters ended September 30, 2012 and 2011, respectively, and
17.0% for the quarter ended June 30, 2012. The year over year change in
gross margin was primarily affected by the amount of vendor incentives
earned during the period. The sequential change in gross margin was due
to higher sales of third-party software assurance, maintenance, and
services during the second quarter of fiscal year 2013, which are
presented on a net basis.
--Segment earnings before tax increased 5.7 million to 14.9 million.
Financing Business Segment
--Total revenues increased to 8.3 million compared to 8.0 million in the
same quarter last year.
--Total costs and expenses increased 0.8 million, or 15.8%, to 6.2
million, due to increases in depreciation expense for equipment under
operating leases due to increased investment in operating leases--net,
and general and administrative expenses.
--Segment earnings before tax were 2.0 million compared to 2.6 million
for the same quarter prior year.
Restatement
On May 31, 2012, the Company announced that it would restate its consolidated financial statements for the fiscal years ended March 31, 2010 and 2011, and the quarterly financial statements for the three quarters ended June 30, September 30, and December 31, 2011, and all of the quarters in the fiscal year ended March 31, 2011. The restatement had no effect on the Company's previously reported earnings, earnings per share, or consolidated statements of cash flows. The restated results for the three and six months ended September 31, 2011 are presented in this release. A more detailed description of the restatement was included in the annual report on Form 10-K for the fiscal year ended March 31, 2012 filed with the Securities and Exchange Commission.
Conference Call Information
The Company will host a conference call on Tuesday, November 6 at 2:00 p.m. Eastern Time to review and discuss the Company's results for the second quarter of fiscal year 2013. The call can be accessed live over the phone by dialing (877) 870-9226, or for international callers, (973) 890-8320. Passcode 55008397. A live webcast will be available via the Company's investor relations Web site at http://www.eplus.com/investors.
A replay will be available shortly after the call and can be accessed by dialing (855) 859-2056, or for international callers, (404) 537-3406. Passcode 55008397. The replay will be available until November 13, 2012, and the webcast will also remain available for replay via the Company's investor relations page of its Web site.
About ePlus inc.
ePlus is a leading provider of technology solutions. ePlus enables organizations to optimize their IT infrastructure and supply chain processes by delivering world-class IT products from top manufacturers, managed and professional services, flexible lease financing, proprietary software, and patented business methods and systems. Founded in 1990, ePlus has more than 825 associates serving federal, state, municipal, and commercial customers nationally. The Company is headquartered in Herndon, VA. For more information, visit http://www.eplus.com/, call 888-482-1122, or email info@eplus.com.
ePlus(R) and ePlus products referenced herein are either registered trademarks or trademarks of ePlus inc. in the United States and/or other countries.
Forward-Looking Statements
Statements in this press release that are not historical facts may be deemed to be "forward-looking statements." Actual and anticipated future results may vary materially due to certain risks and uncertainties, including, without limitation, possible adverse effects resulting from financial market disruption and general slowdown of the U.S. economy such as our current and potential customers' delaying or reducing technology purchases, increasing credit risk associated with our customers and vendors, reduction of vendor incentive programs, the possibility of additional goodwill impairment charges, and restrictions on our access to capital necessary to fund our operations; our ability to design, improve or remediate, as necessary, internal controls to address identified issues; the demand for and acceptance of, our products and services; our ability to adapt our services to meet changes in market developments; our ability to adapt to changes in the IT industry and/or rapid change in product standards; our ability to hire and retain sufficient personnel; our ability to realize our investment in leased equipment; our ability to protect our intellectual property; our ability to consummate and integrate acquisitions; the creditworthiness of our customers; our ability to raise capital and obtain non-recourse financing for our transactions; our ability to reserve adequately for credit losses; the impact of competition in our markets; the possibility of defects in our products or catalog content data; and other risks or uncertainties detailed in our reports filed with the Securities and Exchange Commission. All information set forth in this press release is current as of the date of this release and ePlus undertakes no duty or obligation to update this information.
ePlus inc. AND SUBSIDIARIES
UNAUDITED CONDENSED
CONSOLIDATED BALANCE SHEETS
As ofAs of
SeptemberMarch
30, 201231, 2012
------------------
(amounts in
ASSETSthousands)
Cash and cash equivalents43,93533,778
Short-term investments1,9707,396
Accounts receivable--net194,344174,599
Notes receivable--net18,14824,337
Inventories--net15,78323,514
Investment in leases and leased
equipment--net112,380115,974
Property and equipment--net2,0402,086
Other assets23,40723,560
Goodwill28,78728,444
------------------
TOTAL ASSETS440,794433,688
==================
LIABILITIES AND STOCKHOLDERS'
EQUITY
LIABILITIES
Accounts payable--equipment8,06617,268
Accounts payable--trade24,65026,719
Accounts payable--floor plan84,36685,911
Salaries and commissions
payable9,6739,500
Accrued expenses and other
liabilities34,83340,822
Recourse notes payable1,6821,727
Non-recourse notes payable33,02026,328
Deferred tax liability5,7865,786
------------------
Total Liabilities202,076214,061
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY
Preferred stock, .01 par
value; 2,000,000 shares
authorized; none issued or
outstanding----
Common stock, .01 par value;
25,000,000 shares authorized;
12,820,478 issued and
8,079,919 outstanding at
September 30, 2012 and
12,692,224 issued and
7,999,895 outstanding at March
31, 2012128127
Additional paid-in capital96,05693,545
Treasury stock, at cost,
4,740,559 and 4,692,329
shares, respectively(66,973)(65,416)
Retained earnings209,001190,906
Accumulated other comprehensive
income--foreign currency
translation adjustment506465
------------------
Total Stockholders' Equity238,718219,627
------------------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY440,794433,688
==================
ePlus inc. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
Three Months EndedSix Months Ended
September 30,September 30,
-----------------------------------------
20112011
AsAs
2012restated2012restated
-------------------------------------
(amounts in thousands, except shares and
per share data)
Sales of product and services250,178193,493484,460362,814
Financing revenue7,4137,30515,31314,739
Fee and other income2,4602,8575,0025,001
-------------------------------------
TOTAL REVENUES260,051203,655504,775382,554
-------------------------------------
COSTS AND EXPENSES
Cost of sales, product and
services205,199158,429399,590299,103
Direct lease costs2,4612,0784,7044,174
-------------------------------------
207,660160,507404,294303,277
Professional and other fees2,7072,3555,8204,780
Salaries and benefits26,91924,09053,27347,096
General and administrative
expenses5,4114,50710,0668,540
Interest and financing costs446348851730
-------------------------------------
35,48331,30070,01061,146
-------------------------------------
TOTAL COSTS AND EXPENSES243,143191,807474,304364,423
-------------------------------------
EARNINGS BEFORE PROVISION FOR
INCOME TAXES16,90811,84830,47118,131
PROVISION FOR INCOME TAXES6,8754,78412,3767,364
-------------------------------------
NET EARNINGS10,0337,06418,09510,767
=====================================
NET EARNINGS PER COMMON
SHARE--BASIC1.290.872.341.31
=====================================
NET EARNINGS PER COMMON
SHARE--DILUTED1.270.852.291.28
=====================================
WEIGHTED AVERAGE SHARES
OUTSTANDING--BASIC7,770,2068,153,4957,745,5068,230,022
WEIGHTED AVERAGE SHARES
OUTSTANDING--DILUTED7,920,9278,327,7487,912,8188,422,099
ePlus inc. AND SUBSIDIARIES
STATEMENTS OF OPERATIONS BY SEGMENT
Three months ended September 30,
--------------------------------------------
20122011
------------------------------------------
TechnologyTechnology
FinancingFinancing
SalesSales
BusinessBusinessBusinessBusiness
SegmentSegmentSegmentSegment
--------------------------------------
(amounts in thousands)
Sales of product and services250,178 --193,493 --
Financing revenue--7,413--7,305
Fee and other income1,5918692,128729
--------------------------------------
TOTAL REVENUE251,7698,282195,6218,034
--------------------------------------
Cost of sales, product and
services205,199--158,429--
Direct lease costs--2,461--2,078
Professional and other fees2,2604471,986369
Salaries and benefits24,4142,50521,7172,373
General and administrative
expenses5,0114004,267240
Interest and financing costs2142519329
--------------------------------------
TOTAL COSTS AND EXPENSES236,9056,238186,4185,389
--------------------------------------
EARNINGS BEFORE PROVISION FOR
INCOME TAXES14,8642,0449,2032,645
======================================
Six months ended September 30,
--------------------------------------------
20122011
------------------------------------------
TechnologyTechnology
FinancingFinancing
SalesSales
BusinessBusinessBusinessBusiness
SegmentSegmentSegmentSegment
--------------------------------------
(amounts in thousands)
Sales of product and services484,460 --362,814 --
Financing revenues--15,313--14,739
Fee and other income3,5931,4094,037964
--------------------------------------
TOTAL REVENUES488,05316,722366,85115,703
--------------------------------------
Cost of sales, product and
services399,590--299,103--
Direct lease costs--4,704--4,174
Professional and other fees4,7631,0574,060720
Salaries and benefits48,4964,77742,3794,717
General and administrative
expenses9,4506168,034506
Interest and financing costs5279939691
--------------------------------------
TOTAL COSTS AND EXPENSES462,35111,953353,61510,808
--------------------------------------
EARNINGS BEFORE PROVISION FOR
INCOME TAXES25,7024,76913,2364,895
======================================
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SOURCE: ePlus inc.
CONTACT: Kleyton Parkhurst,
SVP ePlus inc.
investors@eplus.com
703-984-8150
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