Third Quarter Fiscal Year 2023
- Net sales increased 26.0% to $623.5
million; technology segment net sales increased 28.3% to
$611.8 million; service revenues
increased 7.9% to $67.5 million.
- Technology segment adjusted gross billings increased 29.7% to
$888.6 million.
- Consolidated gross profit increased 18.1% to $138.4 million.
- Consolidated gross margin was 22.2%, down 150 basis points from
last year's quarter.
- Net earnings increased 35.1% to $35.7
million.
- Adjusted EBITDA increased 27.6% to $53.3
million.
- Net earnings per common share-diluted increased 36.7% to
$1.34. Non-GAAP net earnings per
common share-diluted increased 25.5% to $1.38.
First Nine Months Fiscal Year 2023
- Net sales increased 15.0% to $1,575.5
million; technology segment net sales increased 16.6% to
$1,532.0 million; service revenues
increased 9.4% to $195.7
million.
- Technology segment adjusted gross billings increased 18.9% to
$2,356.3 million.
- Consolidated gross profit increased 11.4% to $385.2 million.
- Consolidated gross margin was 24.4%, compared with 25.2% last
year.
- Net earnings increased 6.3% to $86.5
million.
- Adjusted EBITDA increased 9.0% to $141.9
million.
- Net earnings per common share-diluted increased 6.9% to
$3.24. Non-GAAP net earnings per
common share-diluted increased 8.3% to $3.66.
HERNDON,
Va., Feb. 7, 2023 /PRNewswire/ -- ePlus
inc. (NASDAQ: PLUS), a leading provider of technology and financing
solutions, today announced financial results for the three and nine
months ended December 31, 2022.
Management Comment
"ePlus delivered strong third quarter financial results, driven
by robust customer demand in our focus areas of digital
transformation, hybrid workforce, cloud solutions, and security,"
said Mark Marron, president and
chief executive officer of ePlus. "Consolidated net sales increased
26% year-over-year to $623.5 million,
while diluted earnings per share rose nearly 37% to $1.34, reflecting the strong top line momentum
and efficient expense management. The ePlus team once again
executed at a high level, meeting our customers' evolving needs
with cost-effective and innovative solutions. As our customers have
prioritized their technology investments, we continue to invest in
our teams and in our capabilities to expand our solutions portfolio
and our market share."
Mr. Marron continued, "While supply chain constraints persist,
we saw a gradual easing in availability of certain products during
the third quarter, enabling us to fulfill a portion of our customer
backlog and reduce our inventories sequentially compared to the
fiscal second quarter. We remain focused on driving long-term
growth, with emphasis on expanding our managed and annuity-quality
services revenue while continuing to target high-growth
opportunities in our focus markets."
Third Quarter Fiscal Year 2023 Results
For the third quarter ended December 31,
2022, as compared to the prior fiscal year third quarter
ended December 31, 2021:
Consolidated net sales increased 26.0% to $623.5 million, from $494.8 million.
Technology segment net sales increased 28.3% to $611.8 million, from $477.0 million due to higher sales of product and
services. Service revenues increased 7.9% to $67.5 million, from $62.5
million due to increases in managed services. Adjusted gross
billings increased 29.7% to $888.6
million from $685.0
million.
Financing segment net sales decreased 34.5% to $11.7 million, from $17.9
million due to lower portfolio earnings and less proceeds
from sales of leased equipment.
Consolidated gross profit increased 18.1% to $138.4 million, from $117.1 million. Consolidated gross margin was
22.2%, down from 23.7% last year due to lower product margin and
lower service margins caused by increases in managed services costs
and a change in our mix of services.
Operating expenses were $91.9
million, up 13.4% from $81.0
million last year, primarily due to increases in salaries
and benefits, variable compensation stemming from higher gross
profit, professional fees, software license and maintenance, travel
expenses, and changes in allowance for credit losses. Our headcount
at the end of the quarter was 1,745, up 191 from a year ago,
including 25 employees from the Future Com acquisition that closed
July 15, 2022. Of the 191 additional
employees, 158 were customer-facing employees, including 101
professional services and technical support personnel due to demand
for our services.
Consolidated operating income increased 28.7% to $46.5 million. During the quarter we had other
income of $2.9 million, due to
foreign currency transaction gain of $0.9
million and a $1.9 million
related to our claim in a class action lawsuit received in
December 2022.
Our effective tax rate for the quarter was 27.7%, higher than
the prior year quarter of 26.4% due to a tax benefit from
restricted stock in the prior year.
Net earnings increased 35.1% to $35.7
million.
Adjusted EBITDA increased 27.6% to $53.3
million.
Net earnings per common share-diluted was $1.34, compared with $0.98 in the prior year quarter. Non-GAAP
earnings per common share-diluted was $1.38, compared with $1.10 last year.
First Nine Months Fiscal Year 2023 Results
For the nine months ended December 31,
2022, as compared to the prior fiscal year nine months ended
December 31, 2021:
Consolidated net sales increased 15.0% to $1,575.5 million, from $1,369.5 million.
Technology segment net sales increased 16.6% to $1,532.0 million, from $1,313.6 million due to higher sales of product
and services. Service revenues increased 9.4% to $195.7 million, from $179.0 million due to increases in professional
services and managed services. Adjusted gross billings was
$2,356.3 million, an increase of
18.9% from $1,982.2
million.
Financing segment net sales decreased 22.1% to $43.5 million, from $55.9
million, due to lower portfolio earnings and less proceeds
from sales of leased equipment.
Consolidated gross profit increased 11.4% to $385.2 million, from $345.6 million. Consolidated gross margin was
24.4%, lower than 25.2% last year, due to lower service margins
partially offset by higher product margin.
Operating expenses were $261.5
million, up 12.3% from $232.8
million last year, primarily due to increases in variable
compensation stemming from higher gross profit, salaries and
benefits, professional fees, advertising and marketing, software
license and maintenance, travel expenses, and changes in allowance
for credit losses.
Consolidated operating income increased 9.7% to $123.7 million. During the nine months ended
December 31, 2022, we incurred
foreign currency transaction losses of $5.2
million, which was partially offset by $1.9 million related to our claim in a class
action lawsuit.
Our effective tax rate for the first nine months of fiscal 2023
was 28.3%, higher than 27.7% in the corresponding period in fiscal
2022 due to foreign currency transaction losses incurred in lower
tax jurisdictions.
Net earnings increased 6.3% to $86.5
million.
Adjusted EBITDA increased 9.0% to $141.9
million.
Net earnings per common share-diluted was $3.24, compared with $3.03 in the prior year. Non-GAAP net earnings
per common share-diluted was $3.66,
compared with $3.38 last year.
Balance Sheet Highlights
As of December 31, 2022, ePlus had
cash and cash equivalents of $99.4
million, compared with $155.4
million as of March 31, 2022.
Inventory, which represents equipment ordered by customers but not
yet delivered, increased 57.9% to $244.8
million from March 31, 2022
due to ongoing projects with customers coupled with continued
supply chain constraints; however, sequentially, inventory
decreased 10.9%. Total stockholders' equity was $746.4 million, compared with $660.7 million as of March
31, 2022. Total shares outstanding were 26.9 million on
December 31, 2022 and March 31, 2022.
Summary and Outlook
"Our solid financial results in the third quarter and through
the first nine months of fiscal 2023 speak to the fundamental
strength of our business, our expanded portfolio of solutions and
services and the dedication of our team. Supported by the strength
of our balance sheet and our extensive partnerships within the
global IT market, ePlus remains well positioned to capitalize on
key long-term growth trends, such as workplace transformation, the
need to protect against cybersecurity threats and the shift to the
cloud," Mr. Marron concluded.
Recent Corporate Developments/Recognitions
January 2023:
- Announced the launch of ePlus Storage-as-a-Service powered by
Pure Storage
December 2022:
- Successfully achieved SOC 1, SOC 2, and HIPAA
Attestations.
- Received Nutanix Global Reseller of the Year, Americas Reseller
of the Year, and Americas Partner Systems Engineer of the Year
Awards.
November 2022:
- Launched Co-Delivered Architecture Support Services for Cisco
and Adjacent Technologies.
- Recognized with multiple awards, including U.S. Partner of the
Year and Global Marketing Partner of the Year at Cisco Partner
Summit.
Conference Call Information
ePlus will hold a conference call and webcast at 4:30 p.m. ET on February
7, 2023:
Audio Webcast (Live
& Replay):
https://events.q4inc.com/attendee/482950251
|
Live Call:
|
(888) 330-2469
(toll-free/domestic)
|
|
(240) 789-2740
(international)
|
Replay:
|
(800) 770- 2030
(toll-free/domestic)
|
|
(647) 362-9199
(international)
|
Passcode:
|
5403833 (live call and
replay)
|
The replay of this webcast will be available approximately two
hours after the call concludes and be available through
February 14, 2023.
About ePlus inc.
ePlus has an unwavering and relentless focus on leveraging
technology to create inspired and transformative business outcomes
for its customers. Offering a robust portfolio of solutions, as
well as a full set of consultative and managed services across the
technology spectrum, ePlus has proudly achieved more than 30 years
of success in the business, carrying customers forward through
adversity, rapidly changing environments, and other obstacles.
ePlus is a trusted advisor, bringing expertise, credentials, talent
and a thorough understanding of innovative technologies, spanning
security, cloud, data center, networking, collaboration and
emerging solutions, to organizations across all industry segments.
With complete lifecycle management services and flexible payment
solutions, ePlus' more than 1,700 associates are focused on
cultivating positive customer experiences and are dedicated to
their craft, harnessing new knowledge while applying decades of
proven experience. ePlus is headquartered in Virginia, with locations in the United States, UK, Europe, and Asia–Pacific. For more
information, visit www.eplus.com, call 888-482-1122, or email
info@eplus.com. Connect with ePlus on LinkedIn, Twitter, Facebook,
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."
Forward-looking statements can be identified by such words
and phrases as "believe(s)," "outlook," "looking ahead,"
"anticipate(s)," "expect(s)," "intend(s)," "estimate(s)," "may,"
"will," "should," "continue" and similar expressions, comparable
terminology or the negative thereof, and include the anticipated
growth of our company, as well as our outlook for the fourth
quarter and balance of the 2023 fiscal year. Actual and anticipated
future results may vary materially due to certain risks and
uncertainties, including, without limitation, national and
international political instability fostering uncertainty and
volatility in the global economy including exposure to fluctuation
in foreign currency rates, interest rates, and inflation,
increases in our costs which may result in adverse changes in our
gross profit and/or price increases to our customers which may
result in adverse changes in our gross profit; reduction of vendor
incentives provided to us; significant and rapid inflation may
cause price, wage, and interest rate increases, as well as
increases in operating costs which may impact the arrangements that
have pricing commitments over the term of the agreement;
significant adverse changes in, reductions in, or loss of one or
more of our larger volume customers or vendors; our ability to
successfully perform due diligence and integrate acquired
businesses; disruptions or a security breach in our or our vendors'
IT systems and data and audio communication networks; supply chain
issues, including a shortage of IT products, may increase our costs
or cause a delay in fulfilling customer orders, or increase our
need for working capital, or completing professional services, or
purchasing IT products or services needed to support our internal
infrastructure or operations, resulting in an adverse impact on our
financial results; ongoing remote work trends, and the increase in
cybersecurity attacks that have occurred while employees work
remotely; maintaining and increasing advanced professional services
by recruiting and retaining highly skilled, competent personnel,
and vendor certifications; our dependence on key personnel to
maintain certain customer relationships, and our ability to hire,
train, and retain sufficient qualified personnel; our ability to
secure our own and our customers' electronic and other confidential
information, while maintaining compliance with evolving data
privacy and regulatory laws and regulations; our ability to remain
secure during a cyber-security attack. Including both disruptions
in our or our vendors' IT systems and data and audio communication
networks; reliance on third-parties to perform some of our service
obligations with customers, and the reliance on a small number of
key vendors in our supply chain with whom we do not have long-term
supply agreements, guaranteed price agreements, or assurance of
stock availability; the creditworthiness of our customers and our
ability to reserve adequately for credit losses; loss of our credit
facility or credit lines with our vendors may restrict our current
and future operations; our ability to raise capital, maintain or
increase as needed our lines of credit with vendors or floor
planning facility, obtain debt for our financing transactions, or
the effect of those changes on our common stock price; a reduction
of vendor incentives provided to us; 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 dependency on continued
innovations in hardware, software, and services offerings by our
vendors and our ability to partner with them; future growth rates
in our core businesses; rising interest rates or the loss of key
lenders or the constricting of credit markets; the possibility of a
goodwill impairment charges in the future; our ability to adapt to
meet changes in markets and competitive developments, to increase
the total number of customers using integrated solutions by
up-selling within our customer base and gaining new customers, to
manage a diverse product set of solutions in highly competitive
markets with a number of key vendors, to increase the total number
of customers who use our managed services and professional services
and continue to enhance our managed services offerings to remain
competitive in this marketplace, to perform professional and
managed services competently; and to implement comprehensive plans
for the integration of sales forces, cost containment, asset
rationalization, systems integration, and other key strategies;
exposure to changes in, interpretations of, or enforcement trends
in, and customer and vendor actions in anticipation of or response
to, legislation and regulatory matters; domestic and international
economic regulations uncertainty (e.g., tariffs, sanctions, and
trade agreements); our contracts may not be adequate to protect us,
we are subject to audits which we may not pass, and our
professional and liability insurance policies coverage may be
insufficient to cover a claim; failure to comply with public sector
contracts, or applicable laws and or regulations; our ability to
maintain our proprietary software and update our technology
infrastructure to remain competitive in the marketplace; our
ability to realize our investment in leased equipment; our ability
to successfully perform due diligence and integrate acquired
business; and our ability to protect our intellectual property
rights and successfully defend any challenges to the validity or
our patents or allegations that we are infringing upon any
third-party patents, and the costs associated with those actions,
and, when appropriate, the costs associated with licensing required
technology; our ability to profitably adapt our services to meet
changes in market developments; the possibility of defects in our
products or catalog content data; and other risks or uncertainties
detailed in our Annual Report on Form 10-K for the fiscal year
ended March 31, 2022 and other
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 either as a result of new information,
future events or otherwise, except as required by applicable U.S.
securities law.
ePlus
inc. AND SUBSIDIARIES
|
|
|
|
|
UNAUDITED
CONSOLIDATED BALANCE SHEETS
|
|
|
|
|
(in thousands,
except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
2022
|
|
March 31,
2022
|
ASSETS
|
|
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
|
$99,395
|
|
$155,378
|
Accounts
receivable—trade, net
|
|
674,935
|
|
430,380
|
Accounts
receivable—other, net
|
|
70,589
|
|
48,673
|
Inventories
|
|
244,798
|
|
155,060
|
Financing
receivables—net, current
|
|
105,823
|
|
61,492
|
Deferred
costs
|
|
43,111
|
|
32,555
|
Other current
assets
|
|
54,792
|
|
13,944
|
Total current
assets
|
|
1,293,443
|
|
897,482
|
|
|
|
|
|
Financing receivables
and operating leases—net
|
|
80,579
|
|
64,292
|
Deferred tax
asset—net
|
|
4,859
|
|
5,050
|
Property, equipment and
other assets
|
|
55,371
|
|
45,586
|
Goodwill
|
|
136,057
|
|
126,543
|
Other intangible
assets—net
|
|
27,556
|
|
27,250
|
TOTAL ASSETS
|
|
$1,597,865
|
|
$1,166,203
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts
payable
|
|
$299,627
|
|
$136,161
|
Accounts payable—floor
plan
|
|
154,541
|
|
145,323
|
Salaries and
commissions payable
|
|
41,152
|
|
39,602
|
Deferred
revenue
|
|
125,570
|
|
86,469
|
Recourse notes
payable—current
|
|
102,961
|
|
7,316
|
Non-recourse notes
payable—current
|
|
41,293
|
|
17,070
|
Other current
liabilities
|
|
28,433
|
|
28,095
|
Total current
liabilities
|
|
793,577
|
|
460,036
|
|
|
|
|
|
Recourse notes
payable—long term
|
|
-
|
|
5,792
|
Non-recourse notes
payable—long term
|
|
7,172
|
|
4,108
|
Other
liabilities
|
|
50,696
|
|
35,529
|
TOTAL
LIABILITIES
|
|
851,445
|
|
505,465
|
|
|
|
|
|
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; 50,000 shares
authorized; 26,907 outstanding at December 31,
2022 and
26,886 outstanding at March 31, 2022
|
|
272
|
|
270
|
Additional paid-in
capital
|
|
165,161
|
|
159,480
|
Treasury stock, at
cost, 258 shares at December 31, 2022 and
|
|
|
|
|
130
shares at March 31, 2022
|
|
(13,958)
|
|
(6,734)
|
Retained
earnings
|
|
594,348
|
|
507,846
|
Accumulated other
comprehensive income—foreign currency
|
|
|
|
|
translation adjustment
|
|
597
|
|
(124)
|
Total Stockholders'
Equity
|
|
746,420
|
|
660,738
|
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
$1,597,865
|
|
$1,166,203
|
ePlus
inc. AND SUBSIDIARIES
|
UNAUDITED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
(in thousands,
except per share amounts)
|
|
|
Three Months Ended
December 31,
|
|
Nine Months Ended
December 31,
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
|
|
|
|
|
|
|
Net sales
|
|
|
|
|
|
|
|
Product
|
$556,018
|
|
$432,307
|
|
$1,379,813
|
|
$1,190,524
|
Services
|
67,458
|
|
62,527
|
|
195,728
|
|
178,976
|
Total
|
623,476
|
|
494,834
|
|
1,575,541
|
|
1,369,500
|
|
|
|
|
|
|
|
|
Cost of
sales
|
|
|
|
|
|
|
|
Product
|
441,015
|
|
339,810
|
|
1,062,352
|
|
914,666
|
Services
|
44,089
|
|
37,907
|
|
127,990
|
|
109,203
|
Total
|
485,104
|
|
377,717
|
|
1,190,342
|
|
1,023,869
|
|
|
|
|
|
|
|
|
Gross profit
|
138,372
|
|
117,117
|
|
385,199
|
|
345,631
|
|
|
|
|
|
|
|
|
Selling, general, and
administrative
|
86,730
|
|
76,874
|
|
248,201
|
|
220,153
|
Depreciation and
amortization
|
3,609
|
|
3,597
|
|
10,387
|
|
11,376
|
Interest and financing
costs
|
1,575
|
|
561
|
|
2,863
|
|
1,262
|
Operating
expenses
|
91,914
|
|
81,032
|
|
261,451
|
|
232,791
|
|
|
|
|
|
|
|
|
Operating
income
|
46,458
|
|
36,085
|
|
123,748
|
|
112,840
|
|
|
|
|
|
|
|
|
Other income
(expense)
|
2,907
|
|
(175)
|
|
(3,112)
|
|
(377)
|
|
|
|
|
|
|
|
|
Earnings before
taxes
|
49,365
|
|
35,910
|
|
120,636
|
|
112,463
|
|
|
|
|
|
|
|
|
Provision for income
taxes
|
13,671
|
|
9,486
|
|
34,134
|
|
31,108
|
|
|
|
|
|
|
|
|
Net earnings
|
$35,694
|
|
$26,424
|
|
$86,502
|
|
$81,355
|
|
|
|
|
|
|
|
|
Net earnings per common
share—basic
|
$1.34
|
|
$0.99
|
|
$3.26
|
|
$3.05
|
Net earnings per common
share—diluted
|
$1.34
|
|
$0.98
|
|
$3.24
|
|
$3.03
|
|
|
|
|
|
|
|
|
Weighted average common
shares outstanding—basic
|
26,592
|
|
26,668
|
|
26,561
|
|
26,666
|
Weighted average common
shares outstanding—diluted
|
26,648
|
|
26,930
|
|
26,688
|
|
26,887
|
Technology
Segment
|
|
Three Months Ended
December 31,
|
|
|
|
Nine Months Ended
December 31,
|
|
|
|
2022
|
|
2021
|
|
Change
|
|
2022
|
|
2021
|
|
Change
|
|
(in
thousands)
|
|
|
|
(in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
|
|
|
|
|
|
|
|
|
|
Product
|
$544,316
|
|
$414,448
|
|
31.3 %
|
|
$1,336,309
|
|
$1,134,658
|
|
17.8 %
|
Services
|
67,458
|
|
62,527
|
|
7.9 %
|
|
195,728
|
|
178,976
|
|
9.4 %
|
Total
|
611,774
|
|
476,975
|
|
28.3 %
|
|
1,532,037
|
|
1,313,634
|
|
16.6 %
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
sales
|
|
|
|
|
|
|
|
|
|
|
|
Product
|
439,831
|
|
334,585
|
|
31.5 %
|
|
1,054,267
|
|
899,437
|
|
17.2 %
|
Services
|
44,089
|
|
37,907
|
|
16.3 %
|
|
127,990
|
|
109,203
|
|
17.2 %
|
Total
|
483,920
|
|
372,492
|
|
29.9 %
|
|
1,182,257
|
|
1,008,640
|
|
17.2 %
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
127,854
|
|
104,483
|
|
22.4 %
|
|
349,780
|
|
304,994
|
|
14.7 %
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general, and
administrative
|
81,874
|
|
73,413
|
|
11.5 %
|
|
235,147
|
|
210,369
|
|
11.8 %
|
Depreciation and
amortization
|
3,582
|
|
3,569
|
|
0.4 %
|
|
10,304
|
|
11,292
|
|
(8.7 %)
|
Interest and financing
costs
|
1,308
|
|
335
|
|
290.4 %
|
|
2,117
|
|
693
|
|
205.5 %
|
Operating
expenses
|
86,764
|
|
77,317
|
|
12.2 %
|
|
247,568
|
|
222,354
|
|
11.3 %
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
income
|
$41,090
|
|
$27,166
|
|
51.3 %
|
|
$102,212
|
|
$82,640
|
|
23.7 %
|
Adjusted gross
billings
|
$888,621
|
|
$685,031
|
|
29.7 %
|
|
$2,356,326
|
|
$1,982,162
|
|
18.9 %
|
Adjusted
EBITDA
|
$47,869
|
|
$32,794
|
|
46.0 %
|
|
$120,135
|
|
$99,811
|
|
20.4 %
|
Technology Segment Net
Sales by Customer End Market
|
|
Twelve Months Ended
December 31,
|
|
|
|
2022
|
|
2021
|
|
Change
|
|
|
|
|
|
|
Telecom, Media &
Entertainment
|
28 %
|
|
29 %
|
|
(1 %)
|
Technology
|
18 %
|
|
15 %
|
|
3 %
|
Healthcare
|
14 %
|
|
16 %
|
|
(2 %)
|
SLED
|
13 %
|
|
15 %
|
|
(2 %)
|
Financial
Services
|
9 %
|
|
9 %
|
|
-
|
All others
|
18 %
|
|
16 %
|
|
2 %
|
Total
|
100 %
|
|
100 %
|
|
|
Financing
Segment
|
|
Three Months Ended
December 31,
|
|
|
|
Nine Months Ended
December 31,
|
|
|
|
2022
|
|
2021
|
|
Change
|
|
2022
|
|
2021
|
|
Change
|
|
(in
thousands)
|
|
|
|
(in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
$11,702
|
|
$17,859
|
|
(34.5 %)
|
|
$43,504
|
|
$55,866
|
|
(22.1 %)
|
Cost of
sales
|
1,184
|
|
5,225
|
|
(77.3 %)
|
|
8,085
|
|
15,229
|
|
(46.9 %)
|
Gross profit
|
10,518
|
|
12,634
|
|
(16.7 %)
|
|
35,419
|
|
40,637
|
|
(12.8 %)
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general, and
administrative
|
4,856
|
|
3,461
|
|
40.3 %
|
|
13,054
|
|
9,784
|
|
33.4 %
|
Depreciation and
amortization
|
27
|
|
28
|
|
(3.6 %)
|
|
83
|
|
84
|
|
(1.2 %)
|
Interest and financing
costs
|
267
|
|
226
|
|
18.1 %
|
|
746
|
|
569
|
|
31.1 %
|
Operating
expenses
|
5,150
|
|
3,715
|
|
38.6 %
|
|
13,883
|
|
10,437
|
|
33.0 %
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
income
|
$5,368
|
|
$8,919
|
|
(39.8 %)
|
|
$21,536
|
|
$30,200
|
|
(28.7 %)
|
Adjusted
EBITDA
|
$5,456
|
|
$9,003
|
|
(39.4 %)
|
|
$21,798
|
|
$30,453
|
|
(28.4 %)
|
ePlus inc. AND
SUBSIDIARIES
RECONCILIATION OF NON-GAAP
INFORMATION
We included reconciliations below for the following non-GAAP
financial measures: (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 US 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 US 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 US 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. As such, they are not included in the amounts
added back to net earnings in the Adjusted EBITDA calculation.
Non-GAAP: Net earnings and Non-GAAP: Net earnings per common
share – diluted are based on net earnings calculated in accordance
with US 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
US GAAP. In addition, other companies, including companies in our
industry, might calculate Adjusted gross billings, Adjusted EBITDA,
Non-GAAP: Net earnings and Non-GAAP: Net earnings per common
share-diluted or similarly titled measures differently, which may
reduce their usefulness as comparative measures.
|
Three Months Ended
December 31,
|
|
Nine Months
Ended December
31,
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
(in
thousands)
|
|
|
|
|
|
|
|
|
Technology segment net
sales
|
$611,774
|
|
$476,975
|
|
$1,532,037
|
|
$1,313,634
|
Costs incurred related
to sales of third-party maintenance, software
assurance and subscription / SaaS licenses, and services
|
276,847
|
|
208,056
|
|
824,289
|
|
668,528
|
Adjusted gross
billings
|
$888,621
|
|
$685,031
|
|
$2,356,326
|
|
$1,982,162
|
|
|
|
|
Three Months Ended
December 31,
|
|
Nine Months
Ended December
31,
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
(in
thousands)
|
Consolidated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings
|
$35,694
|
|
$26,424
|
|
$86,502
|
|
$81,355
|
Provision for income
taxes
|
13,671
|
|
9.486
|
|
34,134
|
|
31,108
|
Depreciation and
amortization [1]
|
3,609
|
|
3,597
|
|
10,387
|
|
11,376
|
Share based
compensation
|
1,950
|
|
1,780
|
|
5,681
|
|
5,355
|
Interest and financing
costs
|
1,308
|
|
335
|
|
2,117
|
|
693
|
Other (income) expense
[2]
|
(2,907)
|
|
175
|
|
3,112
|
|
377
|
Adjusted
EBITDA
|
$53,325
|
|
$41,797
|
|
$141,933
|
|
$130,264
|
|
|
|
|
Three Months Ended
December 31,
|
|
Nine Months Ended
December 31,
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
(in
thousands)
|
Technology Segment
|
|
|
|
|
|
|
|
Operating
income
|
$41,090
|
|
$27,166
|
|
$102,212
|
|
$82,640
|
Depreciation and
amortization [1]
|
3,582
|
|
3,569
|
|
10,304
|
|
11,292
|
Share based
compensation
|
1,889
|
|
1,724
|
|
5,502
|
|
5,186
|
Interest and financing
costs
|
1,308
|
|
335
|
|
2,117
|
|
693
|
Adjusted
EBITDA
|
$47,869
|
|
$32,794
|
|
$120,135
|
|
$99,811
|
|
Financing
Segment
|
|
|
|
|
|
|
|
Operating
income
|
$5,368
|
|
$8,919
|
|
$21,536
|
|
$30,200
|
Depreciation and
amortization [1]
|
27
|
|
28
|
|
83
|
|
84
|
Share based
compensation
|
61
|
|
56
|
|
179
|
|
169
|
Adjusted
EBITDA
|
$5,456
|
|
$9,003
|
|
$21,798
|
|
$30,453
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
December 31,
|
|
Nine Months
Ended December
31,
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
(in
thousands)
|
GAAP: Earnings before
taxes
|
$49,365
|
|
$35,910
|
|
$120,636
|
|
$112,463
|
Share based
compensation
|
1,950
|
|
1,780
|
|
5,681
|
|
5,355
|
Acquisition related
amortization expense [3]
|
2,505
|
|
2,497
|
|
7,182
|
|
7,854
|
Other (income) expense
[2]
|
(2,907)
|
|
175
|
|
3,112
|
|
377
|
Non-GAAP: Earnings
before taxes
|
50,913
|
|
40,362
|
|
136,611
|
|
126,049
|
|
|
|
|
|
|
|
|
GAAP: Provision for
income taxes
|
13,671
|
|
9,486
|
|
34,134
|
|
31,108
|
Share based
compensation
|
544
|
|
470
|
|
1,624
|
|
1,494
|
Acquisition related
amortization expense [3]
|
693
|
|
649
|
|
2,030
|
|
2,156
|
Other (income) expense
[2]
|
(811)
|
|
46
|
|
933
|
|
104
|
Tax benefit on
restricted stock
|
102
|
|
-
|
|
267
|
|
317
|
Non-GAAP: Provision for
income taxes
|
14,199
|
|
10,651
|
|
38,988
|
|
35,179
|
|
|
|
|
|
|
|
|
Non-GAAP: Net
earnings
|
$36,714
|
|
$29,711
|
|
$97,623
|
|
$90,870
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
December 31,
|
|
Nine Months
Ended December
31,
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
|
|
|
|
|
|
|
GAAP: Net earnings per
common share – diluted
|
$1.34
|
|
$0.98
|
|
$3.24
|
|
$3.03
|
|
|
|
|
|
|
|
|
Share based
compensation
|
0.05
|
|
0.05
|
|
0.15
|
|
0.14
|
Acquisition related
amortization expense [3]
|
0.07
|
|
0.07
|
|
0.20
|
|
0.21
|
Other (income) expense
[2]
|
(0.08)
|
|
-
|
|
0.08
|
|
0.01
|
Tax benefit on
restricted stock
|
-
|
|
-
|
|
(0.01)
|
|
(0.01)
|
Total non-GAAP
adjustments – net of tax
|
0.04
|
|
0.12
|
|
0.42
|
|
0.35
|
|
|
|
|
|
|
|
|
Non-GAAP: Net earnings
per common share – diluted
|
$1.38
|
|
$1.10
|
|
$3.66
|
|
$3.38
|
|
[1] Amount consists of
depreciation and amortization for assets used
internally.
|
[2] Legal settlement,
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.