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FOR IMMEDIATE RELEASE
CONTACT: Elan Yaish
Chief Financial Officer
Telephone: (631) 951-7060
Fax: (631) 951-7639
email: eyaish@mecnet.com
MANCHESTER TECHNOLOGIES, INC. ANNOUNCES
SECOND QUARTER RESULTS
HAUPPAUGE, NEW YORK - March 11, 2005 - Manchester Technologies, Inc.
(NASDAQ NM: MANC), a leading distributor of display technology solutions and
plasma display monitors through its wholly-owned subsidiary, Electrograph
Systems, Inc., and a distributor of computer hardware to dealers and systems
integrators, today announced financial results for its second fiscal quarter and
six months ended January 31, 2005.
On May 28, 2004, the Company sold its end-user information technology
fulfillment and professional services business to ePlus, inc., a leading
provider of enterprise cost management, in an all cash transaction. The results
of operations for the three months and six months ended January 31, 2005 and
2004 for that business have been recorded as discontinued operations in the
accompanying condensed consolidated statements of income.
Revenue from continuing operations for the quarter ended January 31,
2005 was $39.3 million as compared with $45.1 million for the comparable quarter
last year. Income from continuing operations for the quarter was $252,000 or
$0.03 per diluted share as compared with $743,000 or $0.09 per diluted share
reported for the comparable quarter last year. Weighted average common shares
outstanding used for the computation of diluted earnings per share were
8,560,000 for 2005 and 8,299,000, for 2004.
Revenue from continuing operations for the six months ended January 31,
2005 was $86.2 million as compared with $90.5 million for the first six months
of last year. Income from continuing operations for the six months was $2.0
million or $0.24 per diluted share as compared with $1.6 million or $0.19 per
diluted share reported for the comparable six month period last year. Weighted
average common shares outstanding used for the computation of diluted earnings
per share were 8,497,000 for 2005 and 8,265,000 for 2004.
Barry R. Steinberg, CEO of Manchester Technologies, Inc., stated, "Unit
sales of display technology solutions, primarily large screen flat panel
displays, continue to increase within our Electrograph subsidiary, while average
selling prices decreased resulting in a small drop in revenue for the quarter
from the sale of display technology solutions as compared to the same quarter
last year. However, our gross profit percentage has remained strong as we
continue to grow our unit sales. The reduction of revenue in the quarter is
primarily attributable to a decrease in computer hardware sales to dealers and
systems integrators (non Electrograph business) for the quarter ended January
31, 2005."
The Company ended the quarter with cash and cash equivalents of $17.4
million, working capital of $38.6 million, total assets of $68.8 million and
shareholders' equity of $46.0 million.
- more -
MANCHESTER TECHNOLOGIES, INC.
Page 2
About Manchester Technologies, Inc.
Manchester Technologies, Inc. is a distributor of display technology solutions
and plasma display monitors through its subsidiary Electrograph Systems, Inc.
and is a distributor of computer hardware, primarily to dealers and system
integrators. More information about the Company and Electrograph can be obtained
by visiting their websites located at http://www.e-manchester.com and the
website of its subsidiary at http://www.electrograph.com.
Safe Harbor Statement
This press release contains statements that may constitute forward-looking
statements pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. These forward-looking statements are based on
currently available information and represent the beliefs of our management.
These statements are subject to risks and uncertainties that could cause actual
results to differ materially, including, but not limited to, our inability to
attract and retain highly skilled sales representatives or technical personnel
necessary to maintain our current operations and implement our growth
strategies; our inability to maintain good relationships with our vendors and
customers; not being successful in our efforts to focus on higher-margin
products and services and not being able to rapidly respond to new product
offerings; not managing our inventory successfully; being adversely affected by
continued intense competition in the technology industry, including competition
from competitors with greater resources; being subject to potentially adverse
business conditions that our industry is subject to, including, without
limitation, pricing pressures involving distribution channels, market
consolidation, a potential short supply of products, continued deterioration in
average selling prices of personal computers and display technologies, and a
decrease in the growth of the display technology market; not being able to
identify suitable acquisition candidates and integrate the acquired companies;
the risk that our success is highly dependent upon a select group of senior
management and that our revenues and operating results are subject to
fluctuation from quarter to quarter; the failure of our information technology
systems to function properly; and the failure of our actions to enhance
shareholder value. For further information on these risks and others affecting
us, please see our Annual Report on Form 10-K for the year ended July 31, 2004,
and those set forth from time to time in our other filings with the Securities
and Exchange Commission (the "SEC"). Each of these documents is on file with the
SEC and is available free of charge. Readers of this press release are referred
to such filings. The forward-looking statements herein speak only as of the date
of this press release. We do not undertake to update any forward-looking
statement that may be made from time to time by us or on our behalf.
..
- Tables Follow-
Manchester Technologies, Inc. and Subsidiaries
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share amounts)
(Unaudited)
Three months ended January 31, Six months ended January 31,
2005 2004 2005 2004
---- ---- ---- ----
Revenue $39,289 $45,117 $86,170 $90,495
Cost of revenue 34,408 40,559 75,257 81,203
------ ------ ------ ------
Gross profit 4,881 4,558 10,913 9,292
Selling, general and
administrative expenses 4,580 3,246 7,709 6,586
----- ----- ----- -----
Income from operations 301 1,312 3,204 2,706
Interest and other income (expense), net 118 (75) 133 (95)
--- ---- --- ---
Income from continuing operations
before income taxes 419 1,237 3,337 2,611
Income tax provision 167 494 1,334 1,024
--- --- ----- -----
Income from continuing operations 252 743 2,003 1,587
--- --- ----- -----
Discontinued operations
Income (loss) from operations
of discontinued component - (745) 995 (1,600)
Income tax (provision) benefit - 297 (398) 619
---- --- ----- ---
Income (loss)from discontinued operations - (448) 597 (981)
---- ----- --- -----
Net income $252 $ 295 $2,600 $ 606
=== === ===== =====
Income per share from continuing operations
Basic $0.03 $0.09 $0.24 $0.20
==== ==== ==== ====
Diluted $0.03 $0.09 $0.24 $0.19
==== ==== ==== ====
Income (loss) per share from discontinued operations
Basic $ - $(0.06) $0.07 $(0.12)
=== ===== ==== ======
Diluted $ - $(0.06) $0.07 $(0.12)
=== ===== ==== ======
Net income per share
Basic $0.03 $0.04 $0.31 $0.08
==== ==== ==== ====
Diluted $0.03 $0.04 $0.31 $0.07
==== ==== ==== ====
Weighted average shares outstanding
Basic 8,364 7,990 8,295 7,990
===== ===== ===== =====
Diluted 8,560 8,299 8,497 8,265
===== ===== ===== =====
- More Tables To Follow -
Manchester Technologies, Inc. and Subsidiaries
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except per share amounts)
January 31, 2005 July 31, 2004
(Unaudited) -------------
-----------
Assets
Current assets:
Cash and cash equivalents $17,399 $16,881
Accounts receivable, net of allowance for doubtful accounts
of $1,420 and $2,848, respectively 14,848 15,530
Inventory 18,566 20,301
Deferred income taxes 1,212 1,212
Prepaid taxes 655 916
Prepaid expenses and other current assets 1,066 1,266
----- -----
Total current assets 53,746 56,106
Property and equipment, net 9,505 9,890
Goodwill, net 3,735 3,735
Deferred income taxes 1,728 1,728
Other assets 105 183
------ -------
Total assets $68,819 $71,642
====== ======
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable and accrued expenses $14,869 $21,492
Current portion of capital lease obligations 260 246
------- --------
Total current liabilities 15,129 21,738
Deferred compensation payable 98 98
Capital lease obligations, net of current portion 7,551 7,683
----- -----
Total liabilities 22,778 29,519
------ ------
Commitments and contingencies
Shareholders' equity:
Preferred stock, $.01 par value; 5,000 shares
authorized, none issued - -
Common stock, $.01 par value; 25,000 shares
authorized, 8,428 and 8,163 shares issued and outstanding 84 82
Additional paid-in capital 20,913 19,597
Retained earnings 25,044 22,444
------ ------
Total shareholders' equity 46,041 42,123
------ ------
Total liabilities and shareholders' equity $68,819 $71,642
====== ======
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