Investor Relations:
Kley Parkhurst, SVP
ePlus inc.
Tel: (703) 709-1924
kparkhurst@eplus.com
ePlus Reports 3rd Quarter Financial Results: Revenues Increase 9% to $80
Million, Net Earnings are $2.6 Million
Conference Call Scheduled at 11:00 A.M. Today
HERNDON, VA - February, 13 2004 -- ePlus inc. (Nasdaq NM: PLUS - news) announced
financial results for its third quarter and nine months ended December 31, 2003.
ePlus recorded an 8.9% increase in total revenues for the quarter, to $79.8
million, as compared to $73.3 million the prior year. Net earnings were $2.6
million, the same as the prior year's quarter, and net earnings for nine months
increased 6.9% to $7.6 million from $7.1 million the prior year. The company
will host a conference call at 11 a.m. EST today to discuss the results.
For the quarter, basic earnings per share increased 7.7% from $0.26 to $0.28.
Fully diluted earnings per share was $0.26 for the quarter and the prior year's
quarter. For the nine month period, basic earnings per share increased 15.7% to
$0.81 from $0.70, and fully diluted earnings increased 10.1% to $0.76 from
$0.69.
At quarter's end, ePlus had total stockholders equity of $113.8 million and cash
of $26.8 million. On October 1, 2003, the Company announced a Stock Repurchase
Plan, and the Company repurchased 164,000 shares of common stock at a cost of
$2.39 million during the quarter.
"This was a solid quarter for ePlus, and in line with expectations," commented
Phillip G. Norton, chairman, president and CEO of ePlus. "We completed a major
eprocurement implementation and content services project engagement for an
entity of a Global 50 company, a significant achievement which should raise our
visibility at large enterprise accounts. We completed the implementation and
conversion in six months, which we estimate is about one-half of the time of
competing vendors for a project of this magnitude, including integration to SAP
and e2open. And, we displaced a multi-year incumbent, who is one of the world's
largest services providers. The project included a Japanese language
enhancement, implementation of more than 19,000 unique business rules for
multiple commodity classes, and rollout to more than 7,000 users in six
countries."
ePlus rolled out Procure+ to one of the world's largest manufacturers of paper
and building products. The hosted system will allow more than 1,000 IT
professionals in over 350 offices around the country to purchase technology
equipment from more than 100 designated vendors. The system replaced an internal
eProcurement system that has been in use for several years, and ePlus won the
contract after a lengthy evaluation of the major eprocurement vendors. The
customer's selection of ePlus was based, in part, on the fact that ePlus already
had built electronic catalogs for all of the IT vendors to be included in the
project, reducing both ramp-up time and deployment costs.
The Company implemented Content+ for a leading provider of drilling and
production solutions for the oil and gas industry. The content management
solution is to be used as a sell-side solution to provide enriched data for each
of its customers' customized eCatalogs. The customer will use Content+ to
aggregate, classify and normalize product data for nearly 200,000 items, create
enriched product descriptions and images for each eCatalog, and manage both
content and catalogs through the system's workflow and maintenance tools. ePlus
was selected after a two-year due diligence process that involved evaluating
multiple content management vendors, including the top enterprise software and
service providers. Content+ was chosen for its maturity and deep functionality,
such as its ability to quickly and automatically categorize hundreds of
thousands of products and services using an integral knowledge base that is the
industry's largest, and its ability to feed cleansed data directly into the
company's SAP ERP system.
During the quarter, ePlus announced a Content+ transaction with Strategic
Distribution, Inc. (Nasdaq: STRD), a leading provider of maintenance, repair and
operating supply chain management services, to create and manage customized
eCatalogs for its customers. The catalogs will integrate with SDI's internal
In-Site(R) eProcurement system to enable end users to access real-time inventory
information.
Mr. Norton continued, "We acquired the software and customer license assets of
Digital Paper Corporation, and released the Content+ Supplier Portal. With a
continuing focus on improving our content management capabilities, which we
believe is the necessary ingredient for every eprocurement or spend management
customer initiative, we continue to beat the competition by providing better
software and services solutions in the content area. We continue to convert
customers from more expensive, less functional systems to ours, proving that our
strategy, execution, and solutions are winning."
"We were also very pleased to elect Milt Cooper onto our Board of Directors in
November," stated Mr. Norton. "Milt has numerous, long-term relationships within
the federal government and the federal government contracting community. In
addition to continuing the ePlus tradition of having a strong, independent
board, we expect that he will provide significant value and guidance in helping
to bring ePlus solutions into this marketplace, including our software,
sourcing, and financing segments."
The increase in total revenues this quarter from the same period in 2002 was
driven in part by a 14.2% increase in Sales of Product to $63.3 million from
$55.5 million, which was offset by a 20.2% decrease in Fee and Other Income to
$3.6 million from $4.5 million. Total Costs and Expenses increased 9.6% to $75.5
million from $68.9 million, driven in part by a 13.8% increase in the Cost of
Sales, Product to $55.8 million from $49.0 million, and a 8.8% decrease in
Salaries and Benefits to $9.8 million from $10.8 million. Interest and Financing
Costs decreased 14.8% to $1.6 million from $1.9 million as a result of lower
interest rates.
For the nine months ended December 31, 2003, ePlus recorded revenues of $245
million, a 7.6% increase over the $228 million for the same period in 2002, and
net earnings of $7.6 million, an 6.9% increase as compared to $7.1 million for
the same period in 2002.
Conference Call Event Information
The Company will host a conference call at 11 a.m. EST on Friday, February 13th,
2004. To listen, please call (973) 339-3086 or toll-free (800) 683-1535. A
telephone replay of the conference call will be available by calling (877)
519-4471 or (973) 341-3080, and entering the passcode 4489250 beginning at about
2:00 P.M. EST on February 13th and ending on or about February 27th. Web links
are also available at http://www.eplus.com/web/BaseRenderer.aspx?ItemId=1128.
In-Site(R) is a registered trademark of Strategic Distribution, Inc.
About ePlus:
A leading provider of Enterprise Cost Management, ePlus provides a comprehensive
solution to reduce the costs of purchasing, owning, and financing goods and
services. ePlus Enterprise Cost Management (eECM) packages business process
outsourcing, eProcurement, asset management, supplier enablement, strategic
sourcing, document access and collaboration, and financial services into a
single integrated solution, all based on ePlus' leading business application
software. Profitable since inception in 1990, the company is headquartered in
Herndon, VA, and has more than 30 locations in the U.S. For more information,
visit www.eplus.com, call 888-482-1122 or email info@eplus.com.
"Safe Harbor" Statement under the Private Securities Litigation Reform Act of
1995: Statements in this press release, which are not historical facts, may be
deemed to be "forward-looking statements." Actual and anticipated future results
may vary due to certain risks and uncertainties, including, without limitation,
the existence of demand for, and acceptance of, our services; our ability to
adapt our services to meet changes in market developments; our ability to
integrate new acquisitions; the impact of competition in our markets; the
possibility of defects in our products or catalog content data; our ability to
hire and retain sufficient personnel; our ability to protect our intellectual
property; the creditworthiness of our customers; our ability to raise capital
and obtain non-recourse financing for our transactions; our ability to realize
our investment in leased equipment; our ability to reserve adequately for credit
losses; fluctuations in our operating results; our reliance on our management
team; and other risks or uncertainties detailed in our Securities and Exchange
Commission filings.
All information set forth in this release and its attachments is as of February
13, 2004. ePlus inc. undertakes no duty to update this information. More
information about potential factors that could affect ePlus inc.'s business and
financial results is included in the Company's Annual Report on Form 10-K for
the fiscal year ended March 31, 2003, and the Quarterly Report on Form 10-Q for
the quarter ended September 30, 2003 including (without limitation) under the
captions "Risk Factors" and "Management's Discussion and Analysis of Financial
Condition and Results of Operations," which are on file with the SEC and
available at the SEC's website at www.sec.gov. Additional information will also
be set forth in those sections in ePlus inc.'s Quarterly Report on Form 10-Q for
the quarter ended December 31, 2003, which will be filed with the SEC on or
before February 17, 2004.
ePlus inc. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(UNAUDITED)
Three months ended Nine months ended
December 31 December 31
---------------------------- ------------------------------
---------------------------- ------------------------------
2002 2003 2002 2003
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REVENUES
Sales of product $55,458,839 $63,325,161 $174,451,748 $199,001,092
Sales of leased equipment 897,984 5,509,288
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---------------------------- ------------------------------
56,356,823 63,325,161 179,961,036 199,001,092
Lease revenues 12,381,795 12,863,921 35,747,237 38,150,085
Fee and other income 4,525,048 3,611,337 12,215,821 8,153,491
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16,906,843 16,475,258 47,963,058 46,303,576
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TOTAL REVENUES 73,263,666 79,800,419 227,924,094 245,304,668
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COSTS AND EXPENSES
Cost of sales, product 49,019,350 55,762,511 152,939,765 175,638,870
Cost of sales, leased equipment 922,926 5,457,927
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---------------------------- ------------------------------
49,942,276 55,762,511 158,397,692 175,638,870
Direct lease costs 2,140,982 3,221,144 4,471,986 7,966,044
Professional and other fees 944,501 1,229,687 2,411,259 2,566,545
Salaries and benefits 10,786,703 9,842,038 33,599,040 30,599,139
General and administrative expenses 3,132,800 3,785,695 10,391,118 10,654,776
Interest and financing costs 1,920,372 1,636,713 6,597,048 5,209,656
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18,925,358 19,715,277 57,470,451 56,996,160
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TOTAL COSTS AND EXPENSES 68,867,634 75,477,788 215,868,143 232,635,030
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EARNINGS BEFORE PROVISION FOR INCOME TAXES 4,396,032 4,322,631 12,055,951 12,669,638
PROVISION FOR INCOME TAXES 1,802,376 1,729,052 4,941,509 5,067,855
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NET EARNINGS $2,593,656 $2,593,579 $7,114,442 $7,601,783
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NET EARNINGS PER COMMON SHARE - BASIC $0.26 $0.28 $0.70 $0.81
============================ ==============================
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NET EARNINGS PER COMMON SHARE - DILUTED $0.26 $0.26 $0.69 $0.76
============================ ==============================
============================ ==============================
WEIGHTED AVERAGE SHARES OUTSTANDING - BASIC 9,992,133 9,308,979 10,228,007 9,410,173
WEIGHTED AVERAGE SHARES OUTSTANDING - DILUTED 10,028,509 9,968,245 10,280,813 10,054,689
For more information, investors are encouraged to refer to the company's Form
10-Q to be filed on or before February 17, 2004.