ePlus Reports 3rd Quarter FY06 Financial Results
Company Generates Revenues of $163 Million; Net Earnings
Reduced by Legal Expenses
HERNDON, VA - February 13, 2006 - ePlus inc. (Nasdaq NM: PLUS - news) announced
financial results for its third quarter and nine months ended December 31, 2005.
ePlus recorded a 10% increase in total revenues for the quarter, to $163.1
million, as compared to $147.7 million in the quarter ended December 31, 2004.
Net earnings were $1.2 million, 25% less than the prior year's third quarter
earnings of $1.6 million. Basic earnings per share for the quarter decreased 17%
from $0.18 to $0.15, and fully diluted earnings per share declined 18% to $0.14,
as compared to $0.17 the prior year.
During the quarter, ePlus spent $1.6 million on legal fees related to its patent
infringement lawsuit. The impact to fully diluted earnings per share was
approximately $0.11. Legal expenses are expected to continue at the same or
greater levels until the matter is resolved.
For the nine months ended December 31, 2005, ePlus recorded record revenues of
$487.1 million, a 20% increase over $407.5 million the prior year, and net
earnings of $4.4 million, a 24% decline from $5.8 million the prior year. Basic
earnings per share decreased 18% to $0.53 from $0.65, and fully diluted earnings
decreased 21% to $0.49 from $0.62, for the nine months ended December 31, 2005
and 2004, respectively.
As of December 31, 2005, ePlus had total stockholders' equity of $131.1 million
and cash of $17.4 million. On November 18, 2005, the Company announced a Stock
Repurchase Plan, and the Company repurchased 276,756 shares of common stock at a
cost of $3.7 million during the quarter.
"Although the expenses relating to our patent infringement lawsuit significantly
reduced earnings, we are pleased by the financial performance of our operating
units" stated Phillip G. Norton, chairman, president and CEO of ePlus. "ePlus
Technology continued to demonstrate top line organic growth, attract new
customers, and expand its professional services footprint. Gross margin on Sales
of Product increased slightly from the prior sequential quarter, to 10%, as we
strive to optimize our product mix. ePlus Group added more than a dozen new
customers, and sustained net lease assets at more than $200 million for the
second consecutive quarter. ePlus Systems is focused on rolling-out OneSource to
our customer base in March, and releasing our on-demand solution set in the
first half of 2006."
Percentage changes stated above are calculated on actual figures from the
unaudited financial statements, not on the rounded figures used herein.
About ePlus:
ePlus is a leading provider of Enterprise Cost Management solutions to
information technology, finance, procurement, operations, and supply chain
professionals who want to reduce the costs of finding, purchasing, managing, and
financing information technology goods and services. Our Enterprise Cost
Management solutions provide sourcing, procurement, spend analytic, supplier
management, document collaboration, asset management, professional services, and
leasing to ePlus' 2,000+ customers. 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 http://www.eplus.com, call 888-482-1122 or
email info@eplus.com.
ePlus(R) and ePlus Enterprise Cost Management(R), and/or other ePlus products
referenced herein are either registered trademarks or trademarks of ePlus inc.
in the United States and/or other countries. The names of other companies and
products mentioned herein may be the trademarks of their respective owners.
Fiscal year 2006 results are preliminary and quarterly information is unaudited.
Statements in this press release, which are not historical facts, may be deemed
to be "forward-looking statements". These statements are based on management's
current expectations and believes and are subject to a number of trends and
uncertainties that could cause actual results to differ materially from those
described in the 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; 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, 2006. 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, 2005, and the Quarterly Report on Form 10-Q for
the quarter ended September 30, 2005 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 http://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, 2005, which will be filed with the
SEC on or about February 14, 2006.
_____________________________________________________________________________________________________
ePlus inc. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(UNAUDITED)
Three Months Ended Nine Months Ended
December 31, December 31,
2004 2005 2004 2005
---------------- ---------------- ---------------- ----------------
REVENUES
Sales of product $133,728,559 $146,384,576 $363,762,423 $440,663,026
Lease revenues 11,147,094 13,758,427 35,213,926 36,968,881
Fee and other income 2,774,614 2,930,615 8,558,351 9,488,230
---------------- ---------------- ---------------- ----------------
TOTAL REVENUES 147,650,267 163,073,618 407,534,700 487,120,137
---------------- ---------------- ---------------- ----------------
COSTS AND EXPENSES
Cost of sales, product 120,892,787 131,734,303 326,396,119 397,564,106
Direct lease costs 3,060,531 4,741,811 8,667,800 12,335,864
Professional and other fees 600,484 2,464,259 5,180,734 5,188,068
Salaries and benefits 14,365,021 15,677,592 40,040,719 45,482,831
General and administrative
expenses 4,370,363 4,468,922 13,025,413 13,905,504
Interest and financing costs 1,622,837 1,950,431 4,315,623 5,202,926
---------------- ---------------- ---------------- ----------------
TOTAL COSTS AND EXPENSES 144,912,023 161,037,318 397,626,408 479,679,299
---------------- ---------------- ---------------- ----------------
EARNINGS BEFORE PROVISION FOR
INCOME TAXES 2,738,244 2,036,300 9,908,292 7,440,838
---------------- ---------------- ---------------- ----------------
PROVISION FOR INCOME TAXES 1,122,680 824,701 4,062,401 3,013,540
---------------- ---------------- ---------------- ----------------
NET EARNINGS $1,615,564 $1,211,599 $5,845,891 $4,427,298
================ ================ ================ ================
NET EARNINGS PER COMMON SHARE -
BASIC $0.18 $0.15 $0.65 $0.53
================ ================ ================ ================
NET EARNINGS PER COMMON SHARE -
DILUTED $0.17 $0.14 $0.62 $0.49
================ ================ ================ ================
WEIGHTED AVERAGE SHARES
OUTSTANDING - BASIC 8,957,280 8,215,221 8,933,702 8,411,268
WEIGHTED AVERAGE SHARES
OUTSTANDING - DILUTED 9,375,666 8,890,948 9,358,693 8,992,035
For more information, investors are encouraged to refer to the Company's Form 10-Q to be filed on or
around February 14, 2006.
_____________________________________________________________________________________________________
Contact: Kley Parkhurst, SVP
ePlus inc.
kparkhurst@eplus.com
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703-984-8150