HERNDON, Va., Nov. 4, 2010 (GLOBE NEWSWIRE) -- ePlus inc. (Nasdaq:PLUS), a leading provider of technology solutions, today announced financial results for its fiscal second quarter ended September 30, 2010.
Revenues totaled $234.5 million, an increase of $61.8 million or 35.8%, compared to $172.7 million in the fiscal second quarter of 2010. Net earnings increased 58.3% to $7.9 million or $0.94 per diluted share, as compared to $5.0 million, or $0.58 per diluted share, in the fiscal second quarter of 2010. Revenues for the quarter ended September 30, 2010 include patent license and settlement income of $125 thousand, compared to $3.4 million for the quarter ended September 30, 2009.
"Spending for IT products and services in the U.S. rebounded due to improved economic conditions, and we achieved another quarter of significant revenue and earnings improvement on both a year-over-year and sequential basis," said Phillip G. Norton, Chairman, President and Chief Executive Officer. "Our business model has proven its scalability and efficiency, as gross profit increased at a much greater rate than overhead, further driving net earnings. I believe this demonstrates that ePlus is well positioned for the future, having a solid balance sheet, a skilled workforce, a solution set that is in high demand by our customers, and an efficient operating platform."
Quarterly Results
Sales of product and services totaled $221.9 million, an increase of $64.6 million or 41.1%, as compared to $157.3 million in the fiscal second quarter of 2010. The gross margin on products and services was 14.5%, down slightly compared to 14.6% in the same quarter last year.
Revenues generated from the combination of sales of leased equipment, lease revenues, and fee and other income totaled $12.4 million, an increase of $0.4 million or 3.3%, compared to $12.0 million in the fiscal second quarter of 2010. Lease revenues totaled $8.6 million, a decrease of $0.3 million as compared to the same quarter last year, due to lower sales of leased assets and transfers of financial assets, partially offset by increased earnings from direct financing leases.
Selling, general, and administrative expenses, which includes professional and other fees, salaries and benefits, and general and administrative expenses, totaled $28.0 million, an increase of $3.4 million or 13.9%, as compared to $24.5 million in the fiscal second quarter of 2010. Professional and other fees increased by $1.0 million compared to the prior year, primarily due to higher legal fees. Salaries and benefit expenses increased $2.3 million, compared to the prior year, due to higher commissions and bonuses on increased sales as well as slightly higher salary expenses. As of September 30, 2010, the Company had 660 employees, as compared to 657 employees as of September 30, 2009.
Interest and financing costs totaled $0.7 million, a decrease of $0.4 million compared to the fiscal second quarter of 2010, due to lower non-recourse note balances. At September 30, 2010, non-recourse notes payable totaled $41.3 million, a decrease of 36.0%, compared to $64.6 million at September 30, 2009.
As of September 30, 2010, stockholders' equity was $199.6 million or $24.27 per share. Total cash and cash equivalents were $68.3 million.
On August 12, 2010, the Company's Board of Directors amended the share repurchase plan commencing on September 16, 2010 to repurchase a maximum of 500,000 shares of ePlus' outstanding common stock. The previous stock repurchase program was scheduled to expire on September 15, 2010. During the three months ended September 30, 2010, ePlus repurchased 99,809 shares of its outstanding common stock at an average cost of $17.52 per share for a total purchase price of $1.7 million.
Year to Date Results
For the six months ended September 30, 2010, revenues totaled $423.5 million, an increase of $98.3 million or 30.2%, as compared to $325.1 million for the six months ended September 30, 2009. Net earnings increased 83.0% to $12.6 million or $1.51 per diluted share, as compared to $6.9 million, or $0.81 per diluted share, for the comparable period of fiscal 2009.
Sales of product and services totaled $397.8 million, an increase of $100.1 million or 33.6%, as compared to $297.7 million in the first six months of fiscal 2009. The gross margin on products and services was 14.3%, down slightly from 14.4% in the comparable period last year. Revenues generated from the combination of sales of leased equipment, lease revenues, and fee and other income totaled $25.6 million, an increase of $1.5 million or 6.4%, compared to $24.0 million in the first six months of fiscal 2009.
Selling, general, and administrative expenses, which includes professional and other fees, salaries and benefits, and general and administrative expenses, totaled $54.7 million, an increase of $6.9 million or 14.4%, as compared to $47.8 million in the comparable period of fiscal 2009. The change includes an 61.6% increase in professional and other fees to $7.2 million from $4.5 million, primarily due to higher legal fees.
During the six months ended September 30, 2010, ePlus repurchased 123,528 shares of its outstanding common stock at an average cost of $17.45 per share for a total purchase price of approximately $2.2 million.
Percentage changes stated throughout this press release are calculated based upon numbers from the Company's financial statements (stated in thousands of dollars), not on the rounded numbers used herein. Investors are encouraged to read the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 2010 and the Company's Form 10-Q for the quarter ended September 30, 2010. Copies are available via the Company's Web site at , the SEC's Web site at , or by contacting the Company.
Conference Call Information
The Company will host a conference call on Friday, November 5, 2010 at 11:00 a.m. (Eastern time). The call can be accessed live over the phone by dialing (877) 870-9226, or for international callers, (973) 890-8320. Reference code: 20746328. A live webcast will be available via the Company's investor relations Web site at .
A replay will be available shortly after the call and can be accessed by dialing (800) 642-1687, or for international callers, (706) 645-8291. The passcode for the replay is 20746328. The replay will be available until November 12, 2010. The webcast will also remain available for replay via the Company's investor relations page of its Web site.
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 the recent financial crisis in the credit markets 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; 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; 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; and other risks or uncertainties detailed in our reports filed with the Securities and Exchange Commission. 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.
About ePlus inc.
ePlus is a leading provider of technology solutions. ePlus enables organizations to optimize their IT infrastructure and supply chain processes by delivering world-class IT products from top manufacturers, professional services, flexible lease financing, proprietary software, and patented business methods. Founded in 1990, ePlus has more than 650 associates in 20+ locations serving federal, municipal, and commercial customers. The Company is headquartered in Herndon, VA. For more information, visit , call 888-482-1122, or email info@eplus.com.
ePlus® and 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.
CONTACT: ePlus inc. Kleyton Parkhurst, SVP 703-984-8150 investors@eplus.com