ePlus Reports 3rd Quarter FY05 Financial Results
Company Generates Revenues of $148 Million
HERNDON, VA - February, 14 2005 - ePlus inc. (Nasdaq NM: PLUS - news) today
announced financial results for its third quarter and nine months ended December
31, 2004. ePlus recorded an 85% increase in total revenues for the quarter, to
$147.7 million, as compared to $79.8 million the prior year. Net earnings were
$1.6 million, 38% less than prior year's quarter of $2.6 million. Basic earnings
per share decreased 35% from $0.28 to $0.18, and fully diluted earnings declined
34% to $0.17, as compared to $0.26 the prior year.
For the nine month period, ePlus recorded record revenues of $408 million, a 66%
increase over $245 million the prior year, and net earnings of $5.8 million, a
23% decline from $7.6 million the prior year. Basic earnings per share decreased
19% to $0.65 from $0.81, and fully diluted earnings decreased 17% to $0.62 from
$0.76.
As of December 31, 2004, ePlus had total stockholders' equity of $117.3 million
and cash of $18.7 million. On November 18, 2004, the Company announced a Stock
Repurchase Plan, and the Company repurchased 19,032 shares of common stock at a
cost of $0.2 million during the quarter.
"We were very pleased by this fiscal year's increase in revenues, which have
resulted from both organic growth and the successful Manchester acquisition"
stated Phillip G. Norton, chairman, president and CEO of ePlus. "Our bottom line
results were impacted by a reduction in revenues generated by our leasing
business, especially in the federal sector, and to expenses relating to our
corporate office relocation. In addition, we continue to have real estate
sublease costs from the Manchester transaction whcih will be reduced over the
next two quarters as we move to less expensive office space in those locations.
The software sector of our business was negatively impacted due to management's
focus on our patent infringement lawsuit, and the related customer uncertainty
which we believe may have lengthened the sales and closing cycle."
Mr. Norton continued "Despite the demands of the infringement litigation the
Company achieved a number of successes in the software, technology distribution,
and advanced solution areas. We held our first software customer summit, which
was well attended and provided a great foundation for future collaboration
between ePlus and its customers. We signed 12 customer software agreements,
including our first Spend+ VisualEngine deal, which is with a Fortune 500
company, and we announced five new or upgraded software solutions. We gained a
number of significant customer wins in our technology business. At our new HQ,
we are demonstrating our patent-pending serverless office technology, which can
reduce infrastructure costs significantly while providing enhanced data security
and redundancy. And the successful defense of our patents has enhanced public
awareness of ePlus and our Enterprise Cost Management solutions, and we believe
will lead to more sales opportunities."
Percentage changes stated above are calculated on actual figures from the
unaudited financial statements, not on te rounded figures used herein.
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, 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.
ePlus, Spend+, Spend+ VisualEngine, eECM, ePlus Enterprise Cost Management,
and/or other ePlus products referenced herein are either registered trademarks
or trademarks of ePlus inc. in the U.S. and/or other countries. The names of
actual companies and products mentioned herein may be the trademarks of their
respective owners.
"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, the Quarterly Report on From 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 or before February 14, 2005.
ePlus inc. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(UNAUDITED)
Three months ended Nine months ended
December 31 December 31
---------------------------- -----------------------------
2003 2004 2003 2004
---------------------------- -----------------------------
REVENUES
Sales of product $ 63,325,161 $133,728,559 $199,001,092 $363,762,423
Lease revenues 12,863,921 11,147,094 38,150,085 35,213,926
Fee and other income 3,611,337 2,774,614 8,153,491 8,558,351
---------------------------- -----------------------------
TOTAL REVENUES 79,800,419 147,650,267 245,304,668 407,534,700
---------------------------- -----------------------------
COSTS AND EXPENSES
Cost of sales, product 55,762,511 120,892,787 175,638,870 326,396,119
Direct lease costs 3,221,144 3,060,531 7,966,044 8,667,800
Professional and other fees 1,229,687 600,484 2,566,545 5,180,734
Salaries and benefits 9,842,038 14,365,021 30,599,139 40,040,719
General and administrative expenses 3,785,695 4,370,363 10,654,776 13,025,413
Interest and financing costs 1,636,713 1,622,837 5,209,656 4,315,623
---------------------------- -----------------------------
TOTAL COSTS AND EXPENSES 75,477,788 144,912,023 232,635,030 397,626,408
---------------------------- -----------------------------
EARNINGS BEFORE PROVISION FOR INCOME TAXES 4,322,631 2,738,244 12,669,638 9,908,292
---------------------------- -----------------------------
PROVISION FOR INCOME TAXES 1,729,052 1,122,680 5,067,855 4,062,401
---------------------------- -----------------------------
NET EARNINGS $ 2,593,579 $ 1,615,564 $ 7,601,783 $ 5,845,891
============================ =============================
NET EARNINGS PER COMMON SHARE - BASIC $0.28 $0.18 $0.81 $0.65
============================ =============================
NET EARNINGS PER COMMON SHARE - DILUTED $0.26 $0.17 $0.76 $0.62
============================ =============================
WEIGHTED AVERAGE SHARES OUTSTANDING - BASIC 9,308,979 8,957,280 9,410,173 8,933,702
WEIGHTED AVERAGE SHARES OUTSTANDING - DILUTED 9,968,245 9,375,666 10,054,689 9,358,693
For more information, investors are encouraged to refer to the company's Form
10-Q to be filed on February 14, 2005.
Contact: Kley Parkhurst, SVP
ePlus inc.
kparkhurst@eplus.com
703-984-8150