HERNDON, Va., Aug. 4, 2021 /PRNewswire/ --
Quarterly Highlights:
- Net sales increased 17.4% to $416.6
million
-
- Technology segment net sales increased 17.3% to $400.4 million which includes service revenues
growth of 16.3% to $55.6
million.
- Financing segment net sales increased 18.0% to $16.3 million.
- Adjusted gross billings increased 15.9% to $633.0 million.
- Consolidated gross profit increased 7.1% to $105.5 million.
- Consolidated gross margin was 25.3%, down from 27.8%.
- Net earnings increased 35.5% to $23.5
million.
- Adjusted EBITDA increased 24.6% to $38.3
million.
- Diluted earnings per share increased 34.6% to $1.75.
- Non-GAAP diluted earnings per share increased 29.8% to
$1.96.
ePlus inc. (NASDAQ: PLUS), a leading provider of
technology and financing solutions, today announced financial
results for the three months ended June 30,
2021.
"Fiscal 2022 is off to a strong start, underscoring growing
demand for our diverse portfolio of solutions that enable our
customers to support their digital transformation and hybrid
workforce initiatives efficiently and cost-effectively. We
are very pleased with our first quarter net sales and adjusted
gross billings growth of 17.4% and 15.9%, respectively. Our robust
sales growth and disciplined cost management is driving solid
operating leverage leading to improved bottom line results.
Our net earnings and net earnings per share both increased
approximately 35%, and non-GAAP earnings per share increased almost
30%. Our operating platform enables ePlus to meet improving
customer demand in a scalable manner," said Mark Marron, president and chief executive
officer of ePlus.
"We remain focused on capturing the cloud, security, digital
infrastructure and collaboration solutions that meet our customer's
requirements in today's complex IT environment. While we
continue to monitor shortages in the IT supply chain that could
delay deliveries and create revenue headwinds, we are
well-positioned for continued growth given our diversified business
model, with increasing annuity-type revenues, expanding services,
multiple channel partners, and the contribution from our financing
business," Mr. Marron noted.
First Quarter Fiscal 2022 Results
For the first quarter ended June 30,
2021 as compared to the first quarter of the prior fiscal
year ended June 30, 2020:
Consolidated net sales increased 17.4% to $416.6 million, from $355.0 million.
Technology segment net sales increased 17.3% to $400.4 million, from $341.2 million primarily due to higher product
sales. Service revenues also increased 16.3% to $55.6 million, from $47.8
million due to increases in professional services and
managed services. Adjusted gross billings increased 15.9% to
$633.0 million from $546.4 million.
Financing segment net sales increased 18.0% to $16.3 million, from $13.8
million due to an increase from sales of off lease
equipment.
Consolidated gross profit increased 7.1% to $105.5 million, from $98.6
million. Consolidated gross margin was 25.3%, compared with
27.8% last year, due to lower product margins.
Operating expenses were $73.1
million, down 0.7% from $73.6
million last year. Our headcount at the end of the
quarter was 1,547, up 11 from a year ago.
Consolidated operating income increased 29.8% to $32.5 million.
Our effective tax rate for the current quarter was 27.8%, lower
than the prior year quarter of 30.8%, primarily due to an
adjustment recorded in the prior year to the federal benefit from
state taxes.
Net earnings increased 35.5% to $23.5
million.
Adjusted EBITDA increased 24.6% to $38.3
million, from $30.7
million.
Diluted earnings per share was $1.75, compared with $1.30 in the prior year quarter. Non-GAAP diluted
earnings per share was $1.96,
compared with $1.51 last year.
Balance Sheet Highlights
As of June 30, 2021, ePlus had
cash and cash equivalents of $93.8
million, compared with $129.6
million as of March 31,
2020. Inventory, which represents equipment ordered by
customers but not yet delivered, increased 11.1% from March 31, 2021, due to ongoing projects.
Total shareholders' equity was $583.6
million, compared with $562.4
million as of March 31,
2021. Total shares outstanding were 13.5 million on
June 30, 2021 and March 31, 2021.
Summary and Outlook
"The strength of our first quarter results, coupled with strong
backlog for our service offerings, reinforces our confidence in our
fiscal 2022 prospects. With worldwide IT spending poised to
accelerate this year, we are experiencing solid demand across our
suite of managed and annuity services offerings, particularly those
that address cybersecurity risks, as well as for our financing
solutions. The financing segment closed several outsized
transactions in July 2021, which we
estimate will contribute $0.32 to
$0.37 per diluted share to our second
quarter. Against this favorable backdrop, we are cognizant of
potential headwinds that may result from more limited product
availability. To date, our deep roster of vendors and distributors
has enabled us to deliver for our customers.
"Looking ahead, we will continue to invest throughout fiscal
2022 in our technology capabilities and in our people to meet our
customers' evolving needs. Supported by the strength of our balance
sheet, we continue to identify and evaluate potential acquisitions
that enhance our geographic presence and broaden our technology
solution offerings," Mr. Marron concluded.
Recent Corporate Developments/Recognitions
- In the month of June:
-
- Ranked in the top 10 percent of North American IT Channel
Partners in the 2021 Solution Provider 500 List published by
CRN®, a brand of The Channel Company.
- In the month of May:
-
- Achieved the Amazon Web Service (AWS) Service Delivery
designation for Amazon Elastic Compute Service (Amazon EC2) for
Windows Server, recognizing that ePlus follows best practices and
has proven success delivering AWS services to customers.
Conference Call Information
ePlus will hold a conference call and audio webcast at
4:30 p.m. ET on August 4, 2021:
Audio Webcast (Live
& Replay):
https://event.on24.com/wcc/r/3193229/A447EAEC7F5B6CBE73AC03CA87F9A652
:
|
|
Live Call:
|
(833) 714-0957
(toll-free/domestic)
(778) 560-2893
(international)
|
Replay:
|
(800) 585-8367
(toll-free/domestic)
(416) 621-4642
(international)
|
Passcode:
|
3959877 (live call
and replay)
|
The replay of this webcast will be available approximately two
hours after the call concludes through August 11, 2021.
About ePlus inc.
ePlus is a leading consultative technology solutions provider
that helps customers imagine, implement, and achieve more from
their technology. With the highest certifications from top
technology partners and lifecycle services expertise across key
areas including security, cloud, data center, collaboration,
networking, and emerging technologies, ePlus transforms IT from a
cost center to a business enabler. Founded in 1990, ePlus has
more than 1,500 associates serving a diverse set of customers in
the U.S., Europe, and
Asia-Pac. The Company is headquartered at 13595 Dulles
Technology Drive, Herndon, VA,
20171. For more information, visit www.eplus.com, call
888-482-1122, or email info@eplus.com. Connect with ePlus on
Facebook, LinkedIn, Twitter and Instagram.
ePlus, Where Technology Means More®.
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.
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, the duration and
impact of the ongoing COVID-19 pandemic, which could materially
adversely affect our financial condition and results of operations
and has resulted worldwide in governmental authorities imposing
numerous unprecedented measures to try to contain the virus that
has impacted and may further impact our workforce and operations,
the operations of our customers, and those of our respective
vendors, suppliers, and partners; national and international
political instability fostering uncertainty and volatility in the
global economy including an economic downturn, significant and
rapid inflation, an increase in tariffs or adverse changes to trade
agreements, exposure to fluctuation in foreign currency rates,
interest rates and pressure on prices; reduction of vendor
incentive programs; and restrictions on our access to capital
necessary to fund our operations; our ability to successfully
perform due diligence and integrate acquired businesses;
disruptions or a security breach in our or our vendors' or
suppliers' IT systems and data and audio communication networks,
supply chains or other systems; the possibility of goodwill
impairment charges in the future; significant adverse changes in,
reductions in, or losses of relationships with one or more of our
largest volume customers or vendors; a possible decrease in the
capital spending budgets of our customers or a decrease in
purchases from us; our ability to raise capital, maintain or
increase as needed our lines of credit with vendors or floor
planning facility, or obtain debt for our financing transactions;
uncertainty regarding the phase out of LIBOR may negatively affect
our operating results; 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 implement
comprehensive plans for the integration of sales forces, cost
containment, asset rationalization, systems integration and other
key strategies; the creditworthiness of our customers and our
ability to reserve adequately for credit losses; our ability to
secure our own and our customers' electronic and other confidential
information and remain secure during a cyber-security or ransomware
attack; future growth rates in our core businesses; our dependence
on continued innovation in hardware, software and services
offerings by our vendors, availability of these products from our
vendors and our ability to partner with them; our reliance on third
parties to perform some of our service obligations to our
customers; the possibility of defects in our products or catalog
content data; our ability to adapt to changes in the IT industry
and/or rapid changes in product offerings, including the
proliferation of the cloud, infrastructure as a service, software
as a service and platform as a service; our ability to realize our
investment in leased equipment; maintaining and increasing advanced
professional services by recruiting and retaining highly skilled,
competent personnel and vendor certifications; 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.
e
Plus inc. AND SUBSIDIARIES
|
|
|
|
|
UNAUDITED
CONSOLIDATED BALANCE SHEETS
|
|
|
|
|
(in thousands,
except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
June 30,
2021
|
|
March 31,
2021
|
ASSETS
|
|
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
|
$93,840
|
|
$129,562
|
Accounts
receivable—trade, net
|
|
465,424
|
|
391,567
|
Accounts
receivable—other, net
|
|
33,979
|
|
41,053
|
Inventories
|
|
77,752
|
|
69,963
|
Financing
receivables—net, current
|
|
63,082
|
|
106,272
|
Deferred
costs
|
|
27,812
|
|
28,201
|
Other current
assets
|
|
12,309
|
|
10,976
|
Total current
assets
|
|
774,198
|
|
777,594
|
|
|
|
|
|
Financing receivables
and operating leases—net
|
|
98,277
|
|
90,165
|
Deferred tax
asset—net
|
|
1,468
|
|
1,468
|
Property, equipment
and other assets
|
|
41,282
|
|
42,289
|
Goodwill
|
|
126,651
|
|
126,645
|
Other intangible
assets—net
|
|
35,540
|
|
38,614
|
TOTAL
ASSETS
|
|
$1,077,416
|
|
$1,076,775
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts
payable
|
|
$149,685
|
|
$165,162
|
Accounts payable—floor
plan
|
|
139,574
|
|
98,653
|
Salaries and
commissions payable
|
|
31,758
|
|
36,839
|
Deferred
revenue
|
|
76,821
|
|
72,802
|
Recourse notes
payable—current
|
|
5,997
|
|
5,450
|
Non-recourse notes
payable—current
|
|
12,700
|
|
50,397
|
Other current
liabilities
|
|
29,870
|
|
30,061
|
Total current
liabilities
|
|
446,405
|
|
459,364
|
|
|
|
|
|
Recourse notes
payable—long term
|
|
11,016
|
|
12,658
|
Non-recourse notes
payable—long term
|
|
2,587
|
|
5,664
|
Other
liabilities
|
|
33,789
|
|
36,679
|
TOTAL
LIABILITIES
|
|
493,797
|
|
514,365
|
|
|
|
|
|
COMMITMENTS AND
CONTINGENCIES
|
|
|
|
|
|
|
|
|
|
STOCKHOLDERS'
EQUITY
|
|
|
|
|
Preferred stock, $.01
per share par value; 2,000 shares authorized;
none outstanding
|
|
-
|
|
-
|
Common stock, $.01
per share par value; 25,000 shares
authorized; 13,536 outstanding at
June 30, 2021 and
13,503 outstanding at March 31,
2021
|
|
146
|
|
145
|
Additional paid-in
capital
|
|
154,101
|
|
152,366
|
Treasury stock, at
cost, 1,038 shares at June 30, 2021 and
|
|
|
|
|
993 shares
at March 31, 2021
|
|
(79,483)
|
|
(75,372)
|
Retained
earnings
|
|
508,134
|
|
484,616
|
Accumulated other
comprehensive income—foreign currency
|
|
|
|
|
translation adjustment
|
|
721
|
|
655
|
Total Stockholders'
Equity
|
|
583,619
|
|
562,410
|
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
$1,077,416
|
|
$1,076,775
|
e
Plus inc. AND SUBSIDIARIES
|
|
UNAUDITED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
(in thousands,
except per share amounts)
|
|
|
|
|
Three Months Ended
June 30,
|
|
2021
|
|
2020
|
|
|
|
|
Net sales
|
|
|
|
Product
|
$361,057
|
|
$307,240
|
Services
|
55,592
|
|
47,791
|
Total
|
416,649
|
|
355,031
|
|
|
|
|
Cost of
sales
|
|
|
|
Product
|
277,227
|
|
226,634
|
Services
|
33,910
|
|
29,840
|
Total
|
311,137
|
|
256,474
|
|
|
|
|
Gross
profit
|
105,512
|
|
98,557
|
|
|
|
|
Selling, general, and
administrative
|
68,775
|
|
69,467
|
Depreciation and
amortization
|
3,926
|
|
3,516
|
Interest and
financing costs
|
359
|
|
577
|
Operating
expenses
|
73,060
|
|
73,560
|
|
|
|
|
Operating
income
|
32,452
|
|
24,997
|
|
|
|
|
Other
income
|
123
|
|
98
|
|
|
|
|
Earnings before
taxes
|
32,575
|
|
25,095
|
|
|
|
|
Provision for income
taxes
|
9,057
|
|
7,735
|
|
|
|
|
Net
earnings
|
$23,518
|
|
$17,360
|
|
|
|
|
Net earnings per
common share—basic
|
$1.76
|
|
$1.30
|
Net earnings per
common share—diluted
|
$1.75
|
|
$1.30
|
|
|
|
|
Weighted average
common shares outstanding—basic
|
13,333
|
|
13,322
|
Weighted average
common shares outstanding—diluted
|
13,441
|
|
13,388
|
Technology
Segment
|
|
Three Months Ended
June 30,
|
|
|
2021
|
|
2020
|
|
Change
|
|
(in
thousands)
|
|
|
|
|
|
|
|
|
Net sales
|
|
|
|
|
|
Product
|
$344,766
|
|
$293,433
|
|
17.5%
|
Services
|
55,592
|
|
47,791
|
|
16.3%
|
Total
|
400,358
|
|
341,224
|
|
17.3%
|
|
|
|
|
|
|
Cost of
sales
|
|
|
|
|
|
Product
|
271,015
|
|
224,543
|
|
20.7%
|
Services
|
33,910
|
|
29,840
|
|
13.6%
|
Total
|
304,925
|
|
254,383
|
|
19.9%
|
|
|
|
|
|
|
Gross
profit
|
95,433
|
|
86,841
|
|
9.9%
|
|
|
|
|
|
|
Selling, general, and
administrative
|
66,153
|
|
65,556
|
|
0.9%
|
Depreciation and
amortization
|
3,898
|
|
3,488
|
|
11.8%
|
Interest and
financing costs
|
159
|
|
265
|
|
(40.0%)
|
Operating
expenses
|
70,210
|
|
69,309
|
|
1.3%
|
|
|
|
|
|
|
Operating
income
|
$25,223
|
|
$17,532
|
|
43.9%
|
Adjusted gross
billings
|
$633,007
|
|
$546,394
|
|
15.9%
|
Adjusted
EBITDA
|
$30,958
|
|
$23,161
|
|
33.7%
|
|
|
|
Technology Segment
Net Sales by Customer End Market
|
|
|
Twelve Months Ended
June 30,
|
|
|
2021
|
|
2020
|
|
Change
|
|
|
|
|
|
|
Telecom, Media &
Entertainment
|
27%
|
|
19%
|
|
8%
|
Technology
|
16%
|
|
21%
|
|
(5%)
|
SLED
|
15%
|
|
16%
|
|
(1%)
|
Healthcare
|
14%
|
|
15%
|
|
(1%)
|
Financial
Services
|
12%
|
|
13%
|
|
(1%)
|
All Others
|
16%
|
|
16%
|
|
-
|
Total
|
100%
|
|
100%
|
|
|
|
|
|
Financing
Segment
|
|
Three Months Ended
June 30,
|
|
|
2021
|
|
2020
|
|
Change
|
|
(in
thousands)
|
|
|
|
|
|
|
|
|
Net sales
|
$16,291
|
|
$13,807
|
|
18.0%
|
Cost of
sales
|
6,212
|
|
2,091
|
|
197.1%
|
Gross
profit
|
10,079
|
|
11,716
|
|
(14.0%)
|
|
|
|
|
|
|
Selling, general, and
administrative
|
2,622
|
|
3,911
|
|
(33.0%)
|
Depreciation and
amortization
|
28
|
|
28
|
|
0.0%
|
Interest and
financing costs
|
200
|
|
312
|
|
(35.9%)
|
Operating
expenses
|
2,850
|
|
4,251
|
|
(33.0%)
|
|
|
|
|
|
|
Operating
income
|
$7,229
|
|
$7,465
|
|
(3.2%)
|
Adjusted
EBITDA
|
$7,314
|
|
$7,553
|
|
(3.2%)
|
e Plus inc. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP INFORMATION
We included reconciliations below for the following non-GAAP
information: (i) Adjusted Gross Billings, (ii) Adjusted EBITDA,
(iii) Segment Adjusted EBITDA, (iv) non-GAAP Net Earnings and (v)
non-GAAP Net Earnings per Common Share - Diluted.
We define adjusted gross billings as our technology segment net
sales calculated in accordance with GAAP, adjusted to exclude the
costs incurred related to sales of third-party maintenance,
software assurance and subscription/SaaS licenses, and
services.
We define adjusted EBITDA as net earnings calculated in
accordance with GAAP, adjusted for the following: interest expense,
depreciation and amortization, share based compensation,
acquisition and integration expense, provision for income taxes,
and other income (expense). Segment adjusted EBITDA is defined as
operating income calculated in accordance with GAAP, adjusted for
interest expense, share based compensation, acquisition and
integration expenses, and depreciation and amortization. We
consider the interest on notes payable from our financing segment
and depreciation expense presented within cost of sales, which
includes depreciation on assets financed as operating leases, to be
operating expenses.
Non-GAAP net earnings and non-GAAP net earnings per common share
– diluted are based on net earnings calculated in accordance with
GAAP, adjusted to exclude other income (expense), share based
compensation, and acquisition related amortization expense, and the
related tax effects.
Our use of non-GAAP information as analytical tools has
limitations, and you should not consider them in isolation or as
substitutes for analysis of our financial results as reported under
GAAP. In addition, other companies, including companies in our
industry, might calculate non-GAAP adjusted gross billings,
adjusted EBITDA, non-GAAP net earnings and non-GAAP net earnings
per common share or similarly titled measures differently, which
may reduce their usefulness as comparative measures.
|
Three Months Ended
June 30,
|
|
2021
|
|
2020
|
|
(in
thousands)
|
|
|
|
|
Technology segment
net sales
|
$400,358
|
|
$341,224
|
Costs incurred
related to sales of third-party
maintenance, software assurance and
subscription / SaaS licenses, and services
|
232,649
|
|
205,170
|
Adjusted gross
billings
|
$633,007
|
|
$546,394
|
|
|
|
Three Months Ended
June 30,
|
|
2021
|
|
2020
|
|
(in
thousands)
|
Consolidated
|
|
|
|
Net
earnings
|
$23,518
|
|
$17,360
|
Provision for income
taxes
|
9,057
|
|
7,735
|
Depreciation and
amortization [1]
|
3,926
|
|
3,516
|
Share based
compensation
|
1,735
|
|
1,907
|
Acquisition and
integration expense
|
-
|
|
29
|
Interest and
financing costs
|
159
|
|
265
|
Other income
[2]
|
(123)
|
|
(98)
|
Adjusted
EBITDA
|
$38,272
|
|
$30,714
|
|
|
|
Three Months Ended
June 30,
|
|
2021
|
|
2020
|
|
(in
thousands)
|
Technology
Segment
|
|
|
|
Operating
income
|
$25,223
|
|
$17,532
|
Depreciation and
amortization [1]
|
3,898
|
|
3,488
|
Share based
compensation
|
1,678
|
|
1,847
|
Acquisition and
integration expense
|
-
|
|
29
|
Interest and
financing costs
|
159
|
|
265
|
Adjusted
EBITDA
|
$30,958
|
|
$23,161
|
|
|
|
|
Financing
Segment
|
|
|
|
Operating
income
|
$7,229
|
|
$7,465
|
Depreciation and
amortization [1]
|
28
|
|
28
|
Share based
compensation
|
57
|
|
60
|
Adjusted
EBITDA
|
$7,314
|
|
$7,553
|
|
|
|
Three Months Ended
June 30,
|
|
2021
|
|
2020
|
|
(in
thousands)
|
|
|
GAAP: Earnings before
taxes
|
$32,575
|
|
$25,095
|
Share based
compensation
|
1,735
|
|
1,907
|
Acquisition and
integration expense
|
-
|
|
29
|
Acquisition related
amortization expense [3]
|
2,696
|
|
2,228
|
Other income
[2]
|
(123)
|
|
(98)
|
Non-GAAP: Earnings
before taxes
|
36,883
|
|
29,161
|
|
|
|
|
GAAP: Provision for
income taxes
|
9,057
|
|
7,735
|
Share based
compensation
|
496
|
|
587
|
Acquisition and
integration expense
|
-
|
|
9
|
Acquisition related
amortization expense [3]
|
757
|
|
667
|
Other (income)
expense [2]
|
(35)
|
|
(30)
|
Tax benefit on
restricted stock
|
(255)
|
|
(14)
|
Non-GAAP: Provision
for income taxes
|
10,530
|
|
8,954
|
|
|
|
|
Non-GAAP: Net
earnings
|
$26,353
|
|
$20,207
|
|
|
|
Three Months Ended
June 30,
|
|
2021
|
|
2020
|
|
|
|
|
GAAP: Net earnings
per common share – diluted
|
$1.75
|
|
$1.30
|
|
|
|
|
Share based
compensation
|
0.09
|
|
0.10
|
Acquisition related
amortization expense [3]
|
0.15
|
|
0.12
|
Other income
[2]
|
(0.01)
|
|
(0.01)
|
Tax benefit from
share based compensation
|
(0.02)
|
|
-
|
Total non-GAAP
adjustments – net of tax
|
0.21
|
|
0.21
|
|
|
|
|
Non-GAAP: Net
earnings per common share – diluted
|
$1.96
|
|
$1.51
|
|
[1] Amount consists
of depreciation and amortization for assets used
internally.
|
[2] Interest income
and foreign currency transaction gains and losses.
|
[3] Amount consists
of amortization of intangible assets from acquired
businesses.
|
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SOURCE ePlus inc.