ePlus Reports Restated Financial Results
for the Period Ended 9/30/04
HERNDON, VA - February 14, 2005 - ePlus inc. (Nasdaq NM: PLUS - news) announced
today that it would file a Form 10-Q/A with the Securities and Exchange
Commission to restate financial results for the periods ended September 30,
2004. The restated results correct an error related to the recording of a lease
transaction in the Company's leasing subsidiary, ePlus Group, inc. As a result
of the error, restated total revenues for the three and six months ended
September 30, 2004 declined $743,395, restated net earnings declined $438,604,
and restated fully diluted earnings per share declined $0.05 per share.
A table of changes to the cCondensed consolidated balance sheet, and condensed
statements of earnings, and consolidated statements of cash flows is attached
hereto.
Restated Financial Results
In connection with the preparation of its consolidated financial statements for
the quarter ended December 31, 2004, the Company determined that a split payment
lease transaction had incorrectly been recorded the prior quarter ended
September 30, 2004. As a result of this discovery, the Company has corrected the
error in recording this split payment lease and it will restate its assets as of
September 30, 2004, and its earnings for the three and six month periods ended
September 30, 2004. The Company has concluded that this error was the result of
a misunderstanding of procedural controls to record payments received in
connection with split payment financing arrangements.
Company management has discussed the accounting error described above with the
Audit Committee of the Board of Directors and its independent registered public
accountants. Management is working with the Audit Committee to identify and
implement corrective actions, where required, to improve the effectiveness of
its internal controls, including the enhancement of systems, accounting and
review procedures and communications among its staff. Specifically, management
has determined not to enter into any more split payment financing arrangements
until the Company's accounting processes can be revised to accurately record
them.
About ePlus Inc.
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, product and catalog content
management, supplier enablement, strategic sourcing, 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.
ePlus(TM) is a trademark of ePlus inc. ePlus Enterprise Cost Management, and
eECM, are trademarks applied for of ePlus inc.
"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
14, 2005. 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, 2004 and the Quarterly Report on Form 10-Q/A for
the quarter ended September 30, 2004 (when filed), 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, 2004, which will be filed with the SEC
on February 14, 2005.
Condensed consolidated balance sheets
At September 30, 2004
As Previously As Restated
Reported
-------------- ---------------
Notes receivable $ 1,093,383 $ 349,988
Total assets 354,438,911 353,695,516
Income taxes payable 428,202 123,411
Total liabilities 238,338,852 238,034,061
Retained earnings 68,880,405 68,441,801
Total stockholders' equity 116,100,059 115,661,455
Total liabilities and stockholders' equity 354,438,911 353,695,516
Condensed consolidated statements of earnings
For the Three Months Ended For the Six Months Ended
September 30, 2004 September 30, 2004
As Previously As Previously
Reported As Restated Reported As Restated
-------------- --------------- --------------- ---------------
Lease revenues $ 12,654,485 $ 11,911,090 $ 24,810,226 $ 24,066,831
Total revenues 153,929,093 153,185,698 260,627,827 259,884,432
Earnings before provision for income taxes 4,227,001 3,483,606 7,913,442 7,170,047
Provision for income taxes 1,733,070 1,428,279 3,244,511 2,939,720
Net earnings 2,493,931 2,055,327 4,668,931 4,230,327
Net earnings per common share - basic 0.28 0.23 0.52 0.47
Net earnings per common share - diluted 0.27 0.22 0.50 0.45
Condensed consolidated statements of cash flows
At September 30, 2004
As Previously
Reported As Restated
-------------- ---------------
Cash flows from operating activities:
Net earnings $ 4,668,931 $ 4,230,327
Changes in other receivables (1,041,397) (298,002)
Changes in salaries and commissions payable,
accrued expenses and other liabilities 7,084,471 6,779,680
Contact: Kley Parkhurst, SVP
ePlus inc.
kparkhurst@eplus.com
703-984-8150