MANC Manchester Technologies (MM)

Manchester Reports Fiscal Fourth Quarter and Year End Results HAUPPAUGE, N.Y., Oct. 28 /PRNewswire-FirstCall/ -- Manchester Technologies, Inc. (NASDAQ:MANC), a leading distributor of display technology solutions and plasma display monitors, today announced financial results for the fourth quarter and fiscal year ended July 31, 2004. 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 end-user information technology fulfillment and professional services business have been recorded as discontinued operations in the accompanying consolidated statements of operations. Revenue from continuing operations for the quarter was $40.1 million as compared with $40.5 million for the comparable quarter last year. Income from continuing operations for the quarter was $265,000 or $0.03 per diluted share as compared with a loss from continuing operations of $206,000 or $0.03 per diluted share reported a year ago. Weighted average common shares outstanding used for the computation of diluted earnings per share were 8,310,000 and 7,990,000, respectively. Revenue from continuing operations for the fiscal year ended July 31, 2004 was $173.0 million as compared with $164.2 million for the fiscal year ended July 31, 2003. Income from continuing operations for the fiscal year was $2.3 million or $0.28 per diluted share as compared with $2.6 million or $0.33 per diluted share reported a year ago. Weighted average common shares outstanding used for the computation of diluted earnings per share were 8,210,000 and 8,007,000, respectively. Barry R. Steinberg, President and CEO of Manchester Technologies, Inc., stated, "While revenues in the quarter were slightly lower than last year, we are pleased that our gross margins increased both in dollars and as a percentage of revenues. The display technology market is expected to continue to grow and we remain a dominant player in this market. As a result of the sale of our IT product and service business, we are now able to focus all our efforts on continuing to grow our display solutions business." The Company ended the quarter with cash and cash equivalents of $16.9 million, working capital of $34.4 million, total assets of $71.6 million and shareholders' equity of $42.1 million. 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 can be obtained by visiting the Company's website located at http://www.e-manchester.com/ and the website of its subsidiary at http://www.electrograph.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 intense competition in the computer industry, continued deterioration in average selling prices of personal computers and display technologies, a decrease in the growth of the display technology market, 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, 2003, 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. These documents are available through the Company, or through the Securities and Exchange Commission's Electronic Data Gathering Analysis and Retrieval system (EDGAR) at http://www.sec.gov/. Manchester Technologies, Inc. and Subsidiaries Consolidated Statements of Operations (in thousands, except per share amounts) Three months ended Year ended July 31, July 31, 2004 2003 2004 2003 (Unaudited) Revenue $40,097 $40,520 $173,040 $164,156 Cost of Revenue 36,642 37,240 156,354 147,672 Gross profit 3,455 3,280 16,686 16,484 Selling, general and administrative expenses 3,157 3,557 12,892 12,214 Income (loss) from operations 298 (277) 3,794 4,270 Interest and other income (expense), net 146 (31) (20) 115 Income (loss)from continuing operations before income taxes 444 (308) 3,774 4,385 Income tax provision (benefit) 179 (102) 1,490 1,775 Income (loss) from continuing operations 265 (206) 2,284 2,610 Discontinued operations: Loss from operations of discontinued component (5,302) (3,411) (7,616) (8,005) Income tax benefit (1,947) (970) (2,851) (2,807) Loss from discontinued operations (3,355) (2,441) (4,765) (5,198) Net loss $(3,089) $(2,647) $ (2,481) $(2,588) Income (loss) per share from continuing operations Basic $0.03 $(0.03) $0.28 $0.33 Diluted $0.03 $(0.03) $0.28 $0.33 Loss per share from discontinued operations Basic $(0.41) $(0.31) $(0.59) $(0.65) Diluted $(0.41) $(0.31) $(0.59) $(0.65) Net loss per share Basic $(0.38) $(0.33) $(0.31) $(0.32) Diluted $(0.38) $(0.33) $(0.31) $(0.32) Weighted average shares outstanding Basic 8,117 7,990 8,077 7,990 Diluted 8,310 7,990 8,210 8,007 Manchester Technologies, Inc. and Subsidiaries Consolidated Balance Sheets (in thousands, except per share amounts) July 31, July 31, 2004 2003 Assets Current assets: Cash and cash equivalents $16,881 $ 8,553 Accounts receivable, net of allowance for doubtful accounts of $2,848 and $1,426, respectively 15,530 35,117 Inventory 20,301 9,605 Deferred income taxes 1,212 603 Prepaid taxes 916 1,704 Prepaid expenses and other current assets 1,266 709 Total current assets 56,106 56,291 Property and equipment, net 9,890 13,985 Goodwill, net 3,735 6,439 Deferred income taxes 1,728 757 Other assets 183 278 Total assets $71,642 $77,750 Liabilities and Shareholders' Equity Current liabilities: Accounts payable and accrued expenses $21,492 $24,752 Deferred service contract revenue -- 666 Current portion of capital lease obligations 246 212 Total current liabilities 21,738 25,630 Deferred compensation payable 98 263 Capital lease obligations, net of current portion 7,683 7,923 Total liabilities 29,519 33,816 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, 8,163 and 7,990 shares issued and outstanding 82 80 Additional paid-in capital 19,597 18,942 Deferred compensation -- (13) Retained earnings 22,444 24,925 Total shareholders' equity 42,123 43,934 Total liabilities and shareholders' equity $71,642 $77,750 DATASOURCE: Manchester Technologies, Inc. CONTACT: Elan Yaish, Chief Financial Officer of Manchester Technologies, Inc., +1-631-951-7060, or fax, +1-631-951-7639, Web site: http://www.e-manchester.com/ http://www.electrograph.com/

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