FOR IMMEDIATE RELEASE
CONTACT: Joseph Looney
Chief Financial Officer
Telephone: (631) 951-7060
Fax: (631) 951-7639
email: jlooney@mecnet.com
MANCHESTER TECHNOLOGIES, INC. ANNOUNCES
FISCAL THIRD QUARTER AND NINE MONTH RESULTS
HAUPPAUGE, NEW YORK - June 5, 2002- Manchester Technologies Inc.
(NASDAQ NM: MANC), a leading computer and network solutions provider, today
announced financial results for its third fiscal quarter and nine months ended
April 30, 2002.
Revenues for the quarter were $65.1 million as compared with $68.6
million for the comparable quarter last year. Earnings for the quarter were
$364,000 or $0.05 per diluted share as compared with $665,000 or $0.08 per
diluted share reported a year ago. Weighted average common shares outstanding
used for the computation of diluted earnings per share were 7,992,000 and
8,005,000, respectfully.
Revenues for the nine months were $194.8 million as compared with
$220.6 million for the first nine months of last year. Earnings for the nine
months were $901,000 or $0.11 per diluted share as compared with $1,327,000 or
$0.16 per diluted share reported a year ago.
Barry R. Steinberg, President and CEO of Manchester Technologies, Inc.,
stated, "We are pleased that we continue to remain profitable and grow our
revenue from service offerings. Revenue from service offerings improved nicely
with our recent acquisitions, Donovan Consulting Group, Inc. and e.Track
Solutions, Inc., adding to our service revenue base and our more traditional
service offerings providing strong contributions, as well. The slowdown in
corporate technology spending continues with soft demand for product offerings."
"Product margins remain better than last year as we utilize our
healthy cash position and strong balance sheet to take advantage of special
product offerings and volume discounts from manufacturers and vendors, wherever
possible," Mr. Steinberg continued. "With the uncertainty existing in the
current marketplace, we are unsure whether these opportunities will continue in
future quarters. "
Mr. Steinberg concluded, "Our growth strategy includes a continued
emphasis on higher margin products and services as well as expansion through
internal growth and through additional strategic acquisitions. We plan to
continue executing this growth strategy and work towards maximizing shareholder
value through providing our customers with a full-service, fast and
uncomplicated place to meet all of their computer and networking needs."
- more -
MANCHESTER TECHNOLOGIES, INC.
Page 2
Manchester Technologies, Inc. is a single-source solutions provider specializing
in hardware and software procurement, custom networking, storage, enterprise and
Internet solutions. Manchester engineers provide answers to companies' MIS needs
by combining comprehensive analysis, design and integration services with a
complete line of competitively priced products and peripherals from the
industry's leading vendors. More information about the Company can be obtained
by visiting the Company's website located at http://www.e-manchester.com.
Statement Under the Private Securities Litigation Reform Act
This press release includes information that may constitute forward-looking
statements within the meaning of the federal securities laws. All statements
other than statements of historical fact, including, without limitation, those
with respect to Manchester Technologies, Inc.'s objectives, plans and strategies
set forth herein and those preceded by or that include the words "believes,"
"intends," "expects," "will," "plans," "anticipates," or similar expressions,
are forward-looking statements. These forward-looking statements speak only as
of the date of this press release. Manchester's actual results may differ
materially from the results discussed herein as a result of a number of unknown
factors, including, without limitation, there being no assurance that Manchester
will be successful in its efforts to focus on higher-margin products and
services, in identifying suitable acquisition candidates and in integrating
acquired companies, or in attracting and retaining highly skilled technical
personnel and sales representatives necessary to implement its growth
strategies, or that Manchester will not be adversely affected by continued
decreases in technology related spending, continued intense competition in the
computer industry, continued deterioration in average selling prices, a lack of
product availability, deterioration in relationships with major manufacturers, a
loss or decline in sales to any of its major customers, or any of the other
risks set forth in Manchester's Annual Report on Form 10-K for the year ended
July 31, 2001, and those set forth from time to time in Manchester's other
filings with the Securities and Exchange Commission. Manchester assumes no
obligation to update any of the information referenced in this press release.
- Tables Follow-
Manchester Technologies, Inc. and Subsidiaries
Condensed Consolidated Statements of Income
(in thousands, except per share amounts)
Unaudited
Three months ended April 30, Nine months ended April 30,
2002 2001 2002 2001
---- ---- ---- ----
Revenue
Products $61,678 $66,522 $185,837 $214,984
Services 3,453 2,076 8,959 5,644
----- ----- ----- -----
65,131 68,598 194,796 220,628
------ ------ ------- -------
Cost of revenue
Products 53,391 57,151 160,470 188,194
Services 2,699 1,682 6,724 3,995
----- ----- ----- -----
56,090 58,833 167,194 192,189
------ ------ ------- -------
Gross profit 9,041 9,765 27,602 28,439
Selling, general and
administrative expenses 8,480 8,734 26,269 26,592
----- ----- ------ ------
Income from operations 561 1,031 1,333 1,847
Interest income 40 116 162 407
-- --- --- ---
Income before income taxes 601 1,147 1,495 2,254
Provision for income taxes 237 482 594 927
--- --- --- ---
Net income $364 $665 $901 $1,327
=== === === =====
Net income per share
Basic $0.05 $0.08 $0.11 $0.16
==== ==== ==== ====
Diluted $0.05 $0.08 $0.11 $0.16
==== ==== ==== ====
Weighted average
shares outstanding
Basic 7,990 8,005 7,990 8,051
===== ===== ===== =====
Diluted 7,992 8,005 7,991 8,080
===== ===== ===== =====
- More Tables To Follow -
Manchester Technologies, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(in thousands except per share amounts)
April 30, 2002 July 31, 2001
-----------
(Unaudited)
------------
Assets:
Cash and cash equivalents $ 8,073 $14,493
Accounts receivable, net 32,085 25,135
Inventory 13,229 7,546
Deferred income taxes 459 459
Prepaid income taxes 401 43
Prepaid expenses and other current assets 612 362
--- ---
Total current assets 54,859 48,038
Property and equipment, net 6,671 6,300
Goodwill, net 8,311 6,148
Deferred income taxes 842 842
Other assets 618 455
--- ---
$71,301 $61,783
====== ======
Liabilities:
Accounts payable and accrued expenses $24,135 $15,259
Deferred service contract revenue 533 807
--- ---
Total current liabilities 24,668 16,066
Deferred compensation payable 162 162
--- ---
Total liabilities 24,830 16,228
------ ------
Shareholders' equity:
Preferred stock, $.01 par value; 5,000
shares authorized, none issued - -
Common stock, $.01 par value; 25,000 shares
authorized, 7,990 issued and outstanding 80 80
Additional paid-in capital 18,942 18,942
Deferred compensation (23) (38)
Retained earnings 27,472 26,571
------ ------
Total shareholders' equity 46,471 45,555
------ ------
$71,301 $61,783
====== ======
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