HERNDON, VA – August 6, 2013 – ePlus inc. (Nasdaq NGM: PLUS – news), a leading provider of technology solutions, today announced financial results.  For the first quarter of fiscal year 2014, which ended June 30, 2013, total revenues increased 6.0% to $259.3 million compared to $244.7 million in the quarter ended June 30, 2012.  Net earnings decreased $0.2 million to $7.9 million in the quarter ended June 30, 2013, as compared to $8.1 million in the prior year.  Fully diluted earnings per common share decreased to $0.97 per share compared to $1.00 per share in the quarter ended June 30, 2012.

 

“Our focus on delivering multi-vendor, advanced technology solutions as well as financing solutions helped drive revenue growth of 6% during the quarter,” said Phillip G. Norton, Chairman, President and Chief Executive Officer.  “Our expertise in today’s most in-demand solutions -- including cloud, collaboration, big data, mobility, security and managed services  -- is continuing to resonate with customers.  We believe that our total solution approach to meeting our customers’ needs differentiates ePlus from the competition.”

 

Mr. Norton continued, “Over the past year, we have continued to focus on our strategic growth initiatives, aggressively hiring top talent in the industry to build our sales force nationally, as well as engineering staff to meet current customer demand and expected future opportunities in the market.  Over the past year, our headcount increased by 83 employees, or 10%, the majority of which are sales and engineering personnel.  We have also made investments in our IT and administrative staff to help scale operations, including a planned upgrade to our internal data center infrastructure.  As a result of these headcount investments, which are necessary to capture the market segments that we find most attractive, such as managed services and security, SG&A expenses increased at a higher rate than our gross profit.”

 

As of June 30, 2013, the Company had $72.7 million of cash and cash equivalents, as compared to $52.7 million on March 31, 2013.  As of June 30, 2013, the Company had total stockholders’ equity of $246.2 million and 8.2 million shares outstanding, as compared to $238.2 million and 8.1 million shares, respectively, as of March 31, 2013.

 

Results of Operations – Three Months Ended June 30, 2013

 

The Company presents its financial results in two segments, the technology and financing segments.  The technology segment sells information technology equipment, software, and related services primarily to corporate customers on a nationwide basis, and also provides Internet-based business-to-business supply chain management solutions for information technology and other operating resources. The financing segment offers lease and other financing solutions to commercial and governmental entities nationwide.

 

Technology Segment

 

The results of operations for the technology segment for the three months ended June 30, 2013 and 2012 were as follows (in thousands):

Total revenues.  Total revenues increased 5.2% to $248.5 million compared to $236.3 million in the quarter ended June 30, 2012. The increase in revenues was due to increases in demand for products and services, particularly from Fortune 100 companies.  

 

Total costs and expenses.  Total costs and expenses were $238.9 million compared to $225.4 million in the same quarter last year, an increase of 6.0%. The increase in costs and expenses was partly due to increases in cost of sales, product and services, which was consistent with the increase in sales of products and services.

 

Gross margin on sales of product and services increased 70 basis points to 17.7% for the quarter ended June 30, 2013 from 17.0% for the same quarter last year, which was primarily due to a larger amount of revenues from the sale of third party software assurance, maintenance and services, which are presented on a net basis.  

 

The increase in costs and expenses was also attributable to increases in salaries and benefits, due to increases in personnel and higher commissions.  We had 860 employees as of June 30, 2013, an increase of 83, or 10.7%, from June 30, 2012. Most of the increase relates to sales and engineering personnel, as we continue to invest in sales and support personnel in order to expand our geographical presence and solutions offerings.

 

Segment earnings.  Segment earnings decreased 11.7% to $9.6 million for the quarter.

 

 

The results of operations for the financing segment for the three months ended June 30, 2013 and 2012 were as follows (in thousands):

Total revenues.  Total revenues increased 28.2% to $10.8 million compared to $8.4 million in the quarter ended June 30, 2012. The increase in revenues was primarily the result of net gains on sales of financial assets of $4.3 million during the three months ended June 30, 2013 as compared to $1.2 million last year. As of June 30, 2013, we had $138.3 million of investments in notes and leases, compared to $117.4 million at June 30, 2012, an increase of $20.9 million, or 17.8%.   

 

Total costs and expenses.  Total costs and expenses were $7.0 million, 23.1% higher than the quarter ended June 30, 2012, which was driven by higher direct lease costs due to increases in depreciation expense for operating leases. The increase in total costs and expenses was also impacted by higher commissions.

 

Segment earnings.  Segment earnings increased to $3.8 million as compared to $2.7 million for the same quarter of the prior year.

 

Conference Call Information

 

The Company will host a conference call on Wednesday, August 7, 2013, at 2:00 p.m. Eastern Time to review and discuss the Company’s results for the first quarter ended June 30, 2013.  The call can be accessed live over the phone by dialing (877) 870-9226, or for international callers, (973) 890-8320. Passcode 16877257. A live webcast will be available via the Company’s investor relations Web site at http://www.eplus.com/investors.

 

A replay will be available shortly after the call and can be accessed by dialing (855) 859-2056, or for international callers, (404) 537-3406.  Passcode 16877257.  The replay will be available until August 14, 2013, and the webcast will also remain available for replay via the Company’s investor relations page of its Web site.

 

About ePlus inc.

 

ePlus is a leading integrator of technology solutions. ePlus enables organizations to optimize their IT infrastructure and supply chain processes by delivering world-class IT products from top manufacturers, managed and professional services, flexible lease financing, proprietary software, and patented business methods and systems.  Founded in 1990, ePlus has more than 900 associates serving federal, state, municipal, and commercial customers nationally.  The Company is headquartered in Herndon, VA.  For more information, visit www.eplus.com, call 888-482-1122, or email info@eplus.com. Connect with ePlus on Facebook at www.facebook.com/ePlusinc and on Twitter at www.twitter.com/ePlusinc.

 

ePlus® and ePlus products referenced herein are either registered trademarks or trademarks of ePlus inc. in the United States and/or other countries.

 

Forward-Looking Statements

 

Statements in this press release that are not historical facts may be deemed to be “forward-looking statements.”  Actual and anticipated future results may vary materially due to certain risks and uncertainties, including, without limitation, possible adverse effects resulting from financial market disruption and general slowdown of the U.S. economy such as our current and potential customers’ delaying or reducing technology purchases, increasing credit risk associated with our customers and vendors, reduction of vendor incentive programs, the possibility of additional goodwill impairment charges, and restrictions on our access to capital necessary to fund our operations; the demand for and acceptance of, our products and services; our ability to adapt our services to meet changes in market developments; our ability to adapt to changes in the IT industry and/or rapid change in product standards; our ability to hire and retain sufficient personnel; our ability to realize our investment in leased equipment; our ability to protect our intellectual property; our ability to consummate and integrate acquisitions; the creditworthiness of our customers; our ability to raise capital and obtain non-recourse financing for our transactions; our ability to reserve adequately for credit losses; the impact of competition in our markets; the possibility of defects in our products or catalog content data; and other risks or uncertainties detailed in our reports filed with the Securities and Exchange Commission including the Company’s most recent reports on Form 10-Q and Form 10-K.  All information set forth in this press release is current as of the date of this release and ePlus undertakes no duty or obligation to update this information.