-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, U/+g59BO+yi67WJNvJS6DtzrSkPluILA64OJBc1lWwvbr/9RkEKt8rJPWlYKjxVt ksp2GBxP3ZO+FDQtSk99vw== /in/edgar/work/20000814/0001022408-00-000017/0001022408-00-000017.txt : 20000921 0001022408-00-000017.hdr.sgml : 20000921 ACCESSION NUMBER: 0001022408-00-000017 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20000630 FILED AS OF DATE: 20000814 FILER: COMPANY DATA: COMPANY CONFORMED NAME: EPLUS INC CENTRAL INDEX KEY: 0001022408 STANDARD INDUSTRIAL CLASSIFICATION: [6172 ] IRS NUMBER: 541817218 STATE OF INCORPORATION: DE FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-28926 FILM NUMBER: 699091 BUSINESS ADDRESS: STREET 1: 400 HERNDON PARKWAY CITY: HERNDON STATE: VA ZIP: 20170 BUSINESS PHONE: 7038345710 MAIL ADDRESS: STREET 1: 400 HERNDON PARKWAY STREET 2: SUITE B CITY: HERNDON STATE: VA ZIP: 20170 FORMER COMPANY: FORMER CONFORMED NAME: MLC HOLDINGS INC DATE OF NAME CHANGE: 19960906 10-Q 1 0001.txt QUARTERLY REPORT 4 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 [ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarter ended June 30, 2000 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ___ to ___. Commission file number: 0-28926 ePlus inc. (Exact name of registrant as specified in its charter) Delaware 54-1817218 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 400 Herndon Parkway, Herndon, VA 20170 (Address, including zip code, of principal offices) Registrant's telephone number, including area code: (703) 834-5710 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [ X ] No [ ] The number of shares of Common Stock outstanding as of August 14, 2000, was 9,671,828.
TABLE OF CONTENTS ePlus inc. AND SUBSIDIARIES Part I. Financial Information: Item 1. Financial Statements - Unaudited: Condensed Consolidated Balance Sheets as of March 31, 2000 and June 30, 2000 2 Condensed Consolidated Statements of Earnings, Three Months Ended June 30, 1999 and 2000 3 Condensed Consolidated Statements of Cash Flows, Three Months Ended June 30, 1999 and 2000 4 Notes to Condensed Consolidated Financial Statements 5 Item 2. Management's Discussion and Analysis of Results of Operations and Financial Condition 8 Item 3. Quantitative and Qualitative Disclosures About Market Risk 19 Part II. Other Information: Item 1. Legal Proceedings 19 Item 2. Changes in Securities and Use of Proceeds 19 Item 3. Defaults Upon Senior Securities 19 Item 4. Submission of Matters to a Vote of Security Holders 19 Item 5. Other Information 19 Item 6. Exhibits and Reports on Form 8-K 19 Signatures 20
-1- EPLUS INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
As of March 31, 2000 As of June 30, 2000 -------------------- ------------------- ASSETS Cash and cash equivalents $ 21,909,784 $ 10,787,803 Accounts receivable 60,166,596 67,207,993 Notes receivable 1,195,263 1,368,582 Employee advances 94,693 124,436 Inventories 2,445,425 3,071,417 Investment in direct financing and sales type leases - net 221,884,864 223,046,902 Investment in operating lease equipment - net 10,114,392 8,822,130 Property and equipment - net 2,895,711 3,079,113 Other assets 24,628,020 28,428,522 ---------- ---------- TOTAL ASSETS $345,334,748 $345,936,898 ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY LIABILITIES Accounts payable - equipment $ 22,975,545 $ 28,962,152 Accounts payable - trade 29,451,907 27,215,493 Salaries and commissions payable 956,762 960,199 Accrued expenses and other liabilities 8,519,353 7,045,907 Income Taxes Payable 3,685,870 3,660,476 Recourse notes payable 39,017,168 19,298,030 Nonrecourse notes payable 182,845,152 172,115,811 Deferred taxes 762,139 762,139 ------- ------- Total Liabilities 288,213,896 260,020,207 =========== =========== COMMITMENTS AND CONTINGENCIES -- -- STOCKHOLDERS' EQUITY Preferred stock, $.01 par value; 2,000,000 shares authorized; none issued or outstanding -- -- Common stock, $.01 par value; 25,000,000 authorized; 7,958,433 and 9,673,358 issued and outstanding at March 31, 2000 and June 30, 2000, respectively 79,584 96,734 Additional paid-in capital 29,926,168 56,219,972 Retained earnings 27,115,100 29,599,985 ---------- ---------- Total Stockholders' Equity 57,120,852 85,916,691 ---------- ---------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $345,334,748 $345,936,898 ============ ============ See Notes to Condensed Consolidated Financial Statements
-2- EPLUS INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED)
Three months ended June 30, 1999 2000 ---- ---- REVENUES Sales of equipment $ 33,175,781 $ 55,689,994 Sales of leased equipment 14,385,824 16,422,062 ---------- ---------- 47,561,605 72,112,056 Lease revenues 5,537,740 8,554,985 Fee and other income 856,436 1,829,626 ePlusSuite revenues - 1,116,439 --------- ---------- 6,394,176 11,501,050 --------- ---------- TOTAL REVENUES 53,955,781 83,613,106 ---------- ---------- COSTS AND EXPENSES Cost of sales, equipment 29,391,516 47,734,206 Cost of sales, leased equipment 14,125,432 16,003,734 ---------- ---------- 43,516,948 63,737,940 Direct lease costs 949,010 3,005,445 Professional and other fees 423,671 439,687 Salaries and benefits 3,949,326 6,806,208 General and administrative expenses 1,294,373 1,934,300 Interest and financing costs 1,318,356 3,547,999 --------- --------- 7,934,736 15,733,639 --------- ---------- TOTAL COSTS AND EXPENSES 51,451,684 79,471,579 ---------- ---------- EARNINGS BEFORE PROVISION FOR INCOME TAXES 2,504,097 4,141,527 --------- --------- PROVISION FOR INCOME TAXES 1,001,642 1,656,611 --------- --------- NET EARNINGS $ 1,502,455 $ 2,484,916 =========== =========== NET EARNINGS PER COMMON SHARE - BASIC $ 0.20 $ 0.26 =========== =========== NET EARNINGS PER COMMON SHARE - DILUTED $ 0.20 $ 0.24 =========== =========== WEIGHTED AVERAGE SHARES OUTSTANDING - BASIC 7,477,532 9,397,157 WEIGHTED AVERAGE SHARES OUTSTANDING - DILUTED 7,492,780 10,263,498 See Notes to Condensed Consolidated Financial Statements.
-3- EPLUS INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
Three Months Ended June 30, 1999 2000 ---- ---- Cash Flows From Operating Activities: Net earnings $ 1,502,455 $ 2,484,916 Adjustments to reconcile net earnings to net cash used by operating activities: Depreciation and amortization 827,539 2,341,617 Provision for credit losses 100,000 183,000 Gain on sale of operating lease equipment (369,069) Adjustment of basis to fair market value of equipment and inventories 3,000 545,000 Payments from lessees directly to lenders (184,444) (2,898,496) Changes in: Accounts receivable (23,812,675) (6,928,707) Other receivables 245,836 (573,945) Employee advances (45,200) (30,834) Inventories (806,920) (484,381) Other assets (2,951,845) (4,722,224) Accounts payable - equipment 16,063,283 4,467,606 Accounts payable - trade 4,462,455 (148,801) Salaries and commissions payable, accrued expenses and other liabilities 61,336 (4,758,450) ---------- ----------- Net cash used by operating activities (4,535,180) (10,892,768) ---------- ------------ Cash Flows From Investing Activities: Proceeds from sale of operating equipment -- 922,549 Purchases of operating lease equipment -- (1,088,510) Increase in investment in direct financing and sales-type leases (23,612,530) (8,113,633) Purchases of property and equipment (202,962) (464,448) Increase in other assets (24,121) (680,291) ------------ ----------- Net cash used in investing activities (23,839,613) (9,424,333) ------------ ----------- Cash Flows From Financing Activities: Borrowings: Nonrecourse 17,125,538 5,347,698 Recourse 321,599 5,283,658 Repayments: Nonrecourse (1,824,682) (8,029,475) Recourse (426,253) (183,931) Proceeds from issuance of capital stock, net of expenses 83,094 26,085,953 Issuance of common stock purchase warrants -- 225,000 Proceeds from lines of credit 11,149,879 (19,533,783) ---------- ------------ Net cash provided by financing activities 26,429,175 9,195,120 ---------- ------------ Net Decrease in Cash and Cash Equivalents (1,945,618) (11,121,981) Cash and Cash Equivalents, Beginning of Period 7,891,661 21,909,784 ---------- ------------ Cash and Cash Equivalents, End of Period $ 5,946,043 $ 10,787,803 =========== ============= Supplemental Disclosures of Cash Flow Information: Cash paid for interest $ 375,560 $ 238,074 =========== ============ Cash paid for income taxes $ 1,496,069 $ 1,578,993 =========== ============ See Notes To Condensed Consolidated Financial Statements.
-4- ePlus inc. AND SUBSIDIARIES NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 1. BASIS OF PRESENTATION The condensed consolidated interim financial statements of ePlus inc. and subsidiaries (the "Company") included herein have been prepared by the Company without audit, pursuant to the rules and regulations of the Securities and Exchange Commission and reflect all adjustments that are, in the opinion of management, necessary for a fair statement of results for the interim periods. All adjustments made were normal, recurring accruals. Certain prior year amounts have been reclassified to conform to the current year's presentation. These interim financial statements should be read in conjunction with the financial statements and notes thereto contained in the Company's Annual Report on Form 10-K (No. 0-28926) for the year ended March 31, 2000 (the "Company's 2000 Form 10-K"). Operating results for the interim periods are not necessarily indicative of results for an entire year. 2. INVESTMENT IN DIRECT FINANCING AND SALES TYPE LEASES The Company's investment in direct financing and sales type leases consists of the following components:
March 31, June 30, 2000 2000 -------- -------- (In Thousands) Minimum lease payments $ 213,284 $ 214,476 Estimated unguaranteed residual value 33,584 33,810 Initial direct costs, net of amortization (1) 2,958 3,227 Less: Unearned lease income (26,093) (26,650) Reserve for credit losses (1,848) (1,816) ---------- --------- Investment in direct finance and sales type leases, net $ 221,885 $ 223,047 ========= ========= (1) Initial direct costs are shown net of amortization of $3,686 and $3,898 at March 31, 2000 and June 30, 2000, respectively.
3. INVESTMENT IN OPERATING LEASE EQUIPMENT Investment in operating leases primarily represents equipment leased for two to three years and leases that are short term renewals on month-to-month status. The components of the net investment in operating lease equipment are as follows:
March 31, June 30, 2000 2000 ---- ---- (In Thousands) Cost of equipment under operating leases $ 26,979 $ 23,906 Initial direct costs 19 18 Less: Accumulated depreciation and amortization (16,884) (15,102) ---------- --------- Investment in operating lease equipment, net $ 10,114 $ 8,822 ========== =========
-5- 4. BUSINESS COMBINATION On September 30, 1999, the Company purchased all of the stock of CLG, Inc., a technology equipment leasing business, from Centura Bank. This business acquisition has been accounted for as a purchase. The following pro forma financial information presents the combined results of operations of CLG, Inc. as if the acquisition had occurred as of the beginning of the three months ended June 30, 1999 and 2000, after giving effect to certain adjustments, including amortization of goodwill. The pro forma financial information does not necessarily reflect the results of operations that would have occurred had the Company and CLG, Inc. constituted a single entity during such periods. (Unaudited) Three Months Ended June 30, 1999 2000 ------------------------------------- (In thousands, except per share data) Total Revenues $ 61,400 $ 83,613 Net Earnings 1,415 2,485 Net Earnings per Common Share - Basic 0.18 0.26 Net Earnings per Common Share - Diluted 0.18 0.24 5. ISSUANCES OF COMMON STOCK AND WARRANTS On October 23, 1998, the Company sold 1,111,111 shares of common stock to TC Leasing LLC, a Delaware limited liability company, for a price of $9.00 per share. In addition, the Company granted to TC Leasing LLC, a stock purchase warrant granting the right to purchase an additional 1,090,909 shares of common stock at a price of $11.00 per share, subject to certain anti-dilution adjustments. The warrant was exercisable through December 31, 2001, unless extended pursuant to the terms of the warrant. On February 25, 2000, the Company entered into an agreement, which was amended April 11, 2000, which allowed TC Plus LLC (formerly TC Leasing LLC) to exercise the warrants on a cashless basis at an exercise price of $11.00 per share, contingent upon the Company's completion of a secondary offering, which occurred on April 17, 2000. On April 11, 2000, TC Plus LLC exercised their options on a cashless basis and were issued 709,956 shares of common stock. Pursuant to the terms of this private placement, the Company agreed to expand its Board of Directors to six persons, four of whom shall be appointed, in whole or in part, by TC Plus LLC. Additionally, the terms of the private placement restricted the Company's ability to pay dividends until October 23, 1999 without the consent of TC Plus LLC. On April 17, 2000 the Company completed a secondary offering of 1,000,000 shares of its common stock at a price of $28.50 per share. Net proceeds to the Company were $25,999,884. On May 25, 2000, the Company issued a common stock purchase warrant to a business partner which allows the holder to purchase up to 50,000 shares of the Company's common stock at a price of $18.75 per share over a two year period beginning July 1, 2000 -6- 6. SEGMENT REPORTING The Company manages its business segments on the basis of the products and services offered. The Company's reportable segments consist of its traditional financing and technology business units (previously known as the lease financing and value added re-selling segments), as well as its newly created electronic commerce ("e-commerce") business unit. The financing business unit offers lease financing solutions to corporations and governmental entities nationwide. The technology business unit sells information technology equipment and related services primarily to corporate customers in the eastern United States. The e-commerce business unit provides Internet-based business-to-business supply chain management solutions for information technology and other operating resources. The Company evaluates segment performance on the basis of segment net earnings. Sales of equipment for the e-commerce business unit represent customer equipment purchases executed through Procure+, an element of the Company's e-commerce business solution. The amounts charged for using Procure+ are presented as ePlusSuite revenues in the statement of earnings. The e-commerce business unit's assets consist primarily of capitalized software costs. The accounting policies of the financing and technology business units are the same as those described in Note 1, "Organization and Summary of Significant Accounting Policies" in the Company's 2000 Form 10-K. Corporate overhead expenses are allocated to the three segments on the basis of revenue volume, estimates of actual time spent by corporate staff, and asset utilization, depending on the type of expense.
Financing Technology E-commerce Business Business Business Unit Unit Unit Total ---- ---- ---- ----- Three months ended June 30, 1999 Sales of equipment $ 160,559 $ 33,015,222 $ - $ 33,175,781 Sales of leased equipment 14,385,824 - - 14,385,824 Lease revenues 5,537,740 - - 5,537,740 Fee and other income 148,849 707,587 856,436 ePlusSuite revenues - - - - ------------- ------------ ----------- ------------ Total Revenues 20,232,972 33,722,809 - 53,955,781 Cost of sales 14,239,729 29,277,219 - 43,516,948 Direct lease costs 949,010 - - 949,010 Selling, general and administrative expenses 2,464,944 3,202,426 - 5,667,370 --------- --------- ----------- ----------- Segment earnings 2,579,289 1,243,164 - 3,822,453 Interest expense 1,272,000 46,356 - 1,318,356 --------- --------- ----------- ----------- Earnings before income taxes 1,307,289 1,196,808 - 2,504,097 ========= ========= =========== =========== Assets $ 165,789,297 $ 30,707,012 $ - $196,496,309 -7- Financing Technology E-commerce Business Business Business Unit Unit Unit Total ------------ ------------ ---------- ----- Three months ended June 30, 2000 Sales of equipment $ 1,582,311 $ 44,309,912 $ 9,797,771 $ 55,689,994 Sales of leased equipment 16,422,062 - - 16,422,062 Lease revenues 8,554,985 - - 8,554,985 Fee and other income 443,741 1,385,885 - 1,829,626 ePlusSuite revenues - - 1,116,439 1,116,439 ------------- ------------ ----------- ------------ Total Revenues 27,003,099 45,695,797 10,914,210 83,613,106 Cost of sales 16,747,470 38,482,897 8,507,573 63,737,940 Direct lease costs 3,005,445 - - 3,005,445 Selling, general and administrative - expenses 3,419,948 4,335,400 1,424,847 9,180,195 --------- --------- --------- --------- Segment earnings 3,830,236 2,877,500 981,790 7,689,526 Interest expense 3,471,468 76,531 - 3,547,999 --------- --------- --------- --------- Earnings before income taxes 358,768 2,800,969 981,790 4,141,527 ============= ============ =========== ============= Assets $ 294,379,247 $ 50,838,888 $ 718,763 $ 345,936,898
7. NEW ACCOUNTING PRONOUNCEMENTS In June 1998, the Financial Accounting Standards Board issued SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities." The statement requires companies to recognize all derivatives as either assets or liabilities, with the instruments measured at fair value. The accounting for changes in fair value and gains and losses depends on the intended use of the derivative and its resulting designation. The statement was originally effective for fiscal years beginning after June 15, 1999. In June 1999, FASB delayed implementation of this statement by one year, to June 15, 2000. The company will adopt SFAS No. 133 in the first quarter of fiscal year 2002 and is evaluating the impact that implementation of this statement will have on its conslidated financial statements. In December 1999, the Securities and Exchange Commission issued Staff Accounting Bulletin No. 101, "Revenue Recognition in Financial Statements," which provides guidance on the recognition, presentation and disclosure of revenue in financial statements. The guidelines in SAB No. 101 must be adopted by the fourth quarter of 2000. We are in the process of evaluating the potential impact of this statement on our financial position and results of operations. In March 2000, the FASB issued interpretation No. 44, "Accounting for Certain Transactions involving Stock Compensation, an Interpretation of APB Opinion No. 25," which clarifies the application of APB Opinion No. 25 for certain issues including: (1) the definition of an employee for purposes of applying APB Opinion No. 25, (2) the criteria for determining whether a plan qualifies as a noncompensatory plan, (3) the accounting consequences of various modifications to the terms of a previously fixed stock option or award and (4) the accounting for an exchange of stock compensation awards in a business combination. Interpretation No. 44 is effective July 1, 2000, but certain conclusions cover specific events that occur either after December 15, 1998 or January 12, 2000. We do not expect or anticipate that the adoption of this interpretation will have a material impact on our financial position or results of operations. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION The following discussion and analysis of results of operations and financial condition of the Company should be read in conjunction with the Condensed Consolidated Financial Statements and the related Notes thereto included elsewhere in this report, and the Company's 2000 Form 10-K. Overview Certain statements contained herein are not based on historical fact, but are forward-looking statements that are based upon numerous assumptions about future conditions that may not occur. Actual events, transactions and results may materially differ from the anticipated events, transactions, or results described in such statements. Our ability to consummate such transactions and achieve such events or results is subject to certain risks and uncertainties. Such risks and uncertainties include, but are not limited to, the existence of demand for and acceptance of the Company's services, economic conditions, the impact of competition and pricing, results of financing efforts and other factors affecting the Company's business that are beyond our control. The Company undertakes no obligation and does not intend to update, revise or otherwise publicly release the result of any revisions to these forward-looking statements that may be made to reflect future events or circumstances. Our results of operations are susceptible to fluctuations for a number of reasons, including, without limitation, customer demand for our products and services, supplier costs, interest rate fluctuations and differences between estimated residual values and actual amounts realized related to the equipment -8- we lease. Operating results could also fluctuate as a result of the sale of equipment in our lease portfolio prior to the expiration of the lease term to the lessee or to a third party. Such sales of leased equipment prior to the expiration of the lease term may have the effect of increasing revenues and net earnings during the period in which the sale occurs, and reducing revenues and net earnings otherwise expected in subsequent periods. In November 1999, we introduced ePlusSuite, a comprehensive business-to-business electronic commerce supply chain management solution for information technology and other operating resources. We currently derive the majority of our revenue from sales and financing of information technology and other assets. The introduction of ePlusSuite reflects our transition to a business-to-business electronic commerce solutions provider from our historical sales and financing business. Our strategy is to reduce or eliminate our balance sheet risk over time by outsourcing lease and other financing to third-party financial institutions, while charging a transaction fee and arranging the sales of information technology and other assets for a transaction fee, rather than purchasing and reselling such assets ourselves. We expect our electronic commerce revenues to be derived primarily from (1) amounts charged to customers with respect to procurement activity executed through Procure(+), (2) fees from third-party financing sources that provide leasing and other financing for transactions that we arrange through Procure(+) on behalf of our customers, (3) fees from third-party vendors for sales in transactions that we arrange through Procure(+) on behalf of our customers and (4) amounts charged to customers for the Manage(+) service. We expect to generate increased revenues from our electronic commerce business unit, while revenues from our leasing and sales business may decrease over time. Because revenues for the sale of leased and other equipment include the full purchase price of the item sold, total revenues may decline to the extent leasing and sales revenues begin to represent a smaller portion of our total revenues. However, in the near term, as we seek to implement our electronic commerce business strategy, we will continue to derive most of our revenues from our traditional businesses. We expect to incur substantial increases in the near term in our sales and marketing, research and development, and general and administrative expenses. In particular, we expect to significantly expand the marketing of our electronic commerce business solution and increase spending on advertising and marketing. To implement this strategy, we plan to hire additional sales personnel, open new sales locations and hire additional staff for advertising, marketing and public relations. We also plan to hire additional technical personnel and third parties to assist in the implementation and upgrade of ePlusSuite and to develop complementary electronic commerce business solutions. As a result of these increases in expenses, we expect to incur significant losses in our ePlusSuite business which may, in the near term, have a material adverse effect on operating results for the company as a whole. To the extent the Company successfully implements this strategy, it expects the business to become less capital intensive over time. As a result, management expects total assets and total liabilities will decrease. The Company expects to significantly reduce its receivables and lease assets along with the associated liabilities including debt and equipment payables. The Company has added new classifications to its financial statement presentation in order to reflect the changes in its business. A line item, ePlusSuite revenues, has been added to the statement of earnings which includes the revenues associated with the e-commerce business unit. A new business segment, e-commerce, has been added for segment reporting purposes to present separately e-commerce business unit revenues. -9- As a result of the foregoing, the Company's historical results of operations and financial position may not be indicative of its future performance over time. However, the Company's results of operations and financial position will continue to primarily reflect its traditional sales and financing businesses for at least the next twelve months. Selected Accounting Policies Amounts charged for the e-commerce business unit's Procure+ service are recognized as services are rendered. Amounts charged for the Manage+ service will be recognized on a straight line basis over the period the services are to be provided. The manner in which lease finance transactions are characterized and reported for accounting purposes has a major impact upon reported revenue and net earnings. Lease accounting methods significant to our business are discussed below. We classify our lease transactions, as required by the Statement of Financial Accounting Standards No. 13, Accounting for Leases, or FASB No. 13, as: (1) direct financing; (2) sales- type; or (3) operating leases. Revenues and expenses between accounting periods for each lease term will vary depending upon the lease classification. For financial statement purposes, we present revenue from all three classifications in lease revenues, and costs related to these leases in direct lease costs. Direct Financing and Sales-Type Leases. Direct financing and sales-type leases transfer substantially all benefits and risks of equipment ownership to the customer. A lease is a direct financing or sales-type lease if the creditworthiness of the customer and the collectability of lease payments are reasonably certain and it meets one of the following criteria: (1) the lease transfers ownership of the equipment to the customer by the end of the lease term; (2) the lease contains a bargain purchase option; (3) the lease term at inception is at least 75% of the estimated economic life of the leased equipment; or (4) the present value of the minimum lease payments is at least 90% of the fair market value of the leased equipment at the inception of the lease. Direct finance leases are recorded as investment in direct financing leases upon acceptance of the equipment by the customer. At the inception of the lease, unearned lease income is recorded which represents the amount by which the gross lease payments receivable plus the estimated residual value of the equipment exceeds the equipment cost. Unearned lease income is recognized, using the interest method, as lease revenue over the lease term. Sales-type leases include a dealer profit or loss which is recorded by the lessor at the inception of the lease. The dealer's profit or loss represents the difference, at the inception of the lease, between the fair value of the leased property and its cost or carrying amount. The equipment subject to such leases may be obtained in the secondary marketplace, but most frequently is the result of re-leasing our own portfolio. This profit or loss which is recognized at lease inception, is included in net margin on sales-type leases. For equipment sold through our technology business unit subsidiaries, the dealer margin is presented in equipment sales revenue and cost of equipment sales. Interest earned on the present value of the lease payments and residual value is recognized over the lease term using the interest method and is included as part of our lease revenues. -10- Operating Leases. All leases that do not meet the criteria to be classified as direct financing or sales-type leases are accounted for as operating leases. Rental amounts are accrued on a straight-line basis over the lease term and are recognized as lease revenue. Our cost of the leased equipment is recorded on the balance sheet as investment in operating lease equipment and is depreciated on a straight-line basis over the lease term to our estimate of residual value. Revenue, depreciation expense and the resulting profit for operating leases are recorded on a straight-line basis over the life of the lease. As a result of these three classifications of leases for accounting purposes, the revenues resulting from the "mix" of lease classifications during an accounting period will affect the profit margin percentage for such period and such profit margin percentage generally increases as revenues from direct financing and sales-type leases increase. Should a lease be financed, the interest expense declines over the term of the financing as the principal is reduced. Residual Values. Residual values represent our estimated value of the equipment at the end of the initial lease term. The residual values for direct financing and sales-type leases are recorded in investment in direct financing and sales-type leases, on a net present value basis. The residual values for operating leases are included in the leased equipment's net book value and are recorded in investment in operating lease equipment. The estimated residual values will vary, both in amount and as a percentage of the original equipment cost, and depend upon several factors, including the equipment type, manufacturer's discount, market conditions and the term of the lease. We evaluate residual values on an ongoing basis and record any required changes in accordance with FASB No. 13. Residual values are affected by equipment supply and demand and by new product announcements and price changes by manufacturers. In accordance with generally accepted accounting principles, residual value estimates are adjusted downward when such assets are impaired. We seek to realize the estimated residual value at lease termination through: (1) renewal or extension of the original lease; (2) sale of the equipment either to the lessee or the secondary market; or (3) lease of the equipment to a new user. The difference between the proceeds of a sale and the remaining estimated residual value is recorded as a gain or loss in lease revenues when title is transferred to the lessee, or, if the equipment is sold on the secondary market, in equipment sales revenues and cost of equipment sales when title is transferred to the buyer. The proceeds from any subsequent lease are accounted for as lease revenues at the time such transaction is entered into. Initial Direct Costs. Initial direct costs related to the origination of direct financing, sales-type or operating leases are capitalized and recorded as part of the net investment in direct financing leases, or net operating lease equipment, and are amortized over the lease term. Sales. Sales revenue includes the following types of transactions: (1) sales of new or used equipment which is not subject to any type of lease; (2) sales of equipment subject to an existing lease, under which we are lessor, including any underlying financing related to the lease; and (3) sales of off-lease equipment to the secondary market. -11- Other Sources of Revenue. Amounts charged for the electronic commerce business unit's Procure(+) service are recognized as services are rendered. Amounts charged for the Manage(+) service will be recognized on a straight line basis over the period the services are provided. These revenues are included in our ePlusSuite revenues in our statement of earnings. Fee and other income results from (1) income from events that occur after the initial sale of a financial asset such as escrow/prepayment income, (2) re-marketing fees, (3) brokerage fees earned for the placement of financing transactions and (4) interest and other miscellaneous income. These revenues are included in fee and other income in our statements of earnings. RESULTS OF OPERATIONS - Three Months Ended June 30, 1999 Compared to Three Months Ended June 30, 2000 Total revenues generated by the Company during the three-month period ended June 30, 2000 were $83,613,106 compared to revenues of $53,955,781 during the comparable period in the prior fiscal year, an increase of 55.0%. This increase is primarily the result of increased revenues from the sales of equipment, which increased 67.9% to $55,689,994 during the three months ended June 30, 2000. The Company's acquisition of CLG, Inc. also contributed to the increase in revenues, primarily lease revenues. The Company's revenues are composed of sales and other revenue, and may vary considerably from period to period (See "POTENTIAL FLUCTUATIONS IN QUARTERLY OPERATING RESULTS"). Sales revenue, which includes sales of equipment and sales of leased equipment, increased 51.6% to $72,112,056 during the three-month period ended June 30, 2000, as compared to $47,561,605 in the corresponding period in the prior fiscal year. The majority of sales of equipment are generated through the Company's technology business unit subsidiaries. Sales of used and/or off-lease equipment are also generated from the Company's brokerage and re-marketing activities. For the three-month period ended June 30, 2000, equipment sales through the Company's technology business unit subsidiaries accounted for 97.2% of sales of equipment, with the remainder being sales from brokerage and re-marketing activities. Sales of equipment increased significantly during the three month period ended June 30, 2000 as compared to the prior fiscal year as a result of increased customer purchase volume in the Company's technology business unit subsidiaries. The acquisition of CLG, Inc. in September, 1999, did not materially contribute to the increase in sales of equipment for the periods presented. The Company realized a gross margin on sales of equipment of 14.3% for the three month period ended June 30, 2000, as compared to a gross margin of 11.4% realized on sales of equipment during the comparable period in the prior fiscal year. This increase in net margin percentage can be primarily attributed to the Company's technology business unit subsidiaries acquisition of higher profit margin customers and focus on selling higher margin equipment and services. The Company's gross margin on sales of equipment is affected by the mix and volume of products sold. The Company also recognizes revenue from the sale of leased equipment. During the three months ended June 30, 2000, sales of leased equipment increased 14.2% to $16,422,062. The revenue and gross margin recognized on sales of leased -12- equipment can vary significantly depending on the nature and timing of the sale, as well as the timing of any debt funding recognized in accordance with SFAS No. 125. The majority of the Company's sales of leased equipment has historically been sold to MLC/CLC, LLC, a joint venture in which the Company owns a 5% interest. During the three months ended June 30, 1999 and 2000, sales to MLC/CLC, LLC, accounted for 34.6% and 91.4% of sales of leased equipment, respectively. Sales to the joint venture require the consent of the joint venture partner. Firstar Equipment Finance Corporation, which owns 95% of MLC/CLC, LLC, has discontinued their investment in new lease acquisitions effective May, 2000. The Company has developed and will continue to develop relationships with additional lease equity investors and financial intermediaries to diversify its sources of equity financing. During the three months ended June 30, 2000, the Company recognized a gross margin of 2.5% on leased equipment sales of $16,422,062 as compared to a gross margin of 1.8% on leased equipment sales of $14,385,824 during the same period in the prior fiscal year. The increase in gross margin is due primarily to increased origination fees charged to the equity purchasers of leased equipment. The Company's lease revenues increased 54.5% to $8,554,985 for the three months ended June 30, 2000 compared with the corresponding period in the prior fiscal year. This increase consists of increased lease earnings and rental revenues reflecting a higher average investment in direct financing and sales type leases. The investment in direct financing and sales type leases at June 30, 1999 and 2000 was $100,716,270 and $223,046,902, respectively. The June 30, 2000 balance represents an increase of $122,330,632 or 121.5% over the balance as of June 30, 1999. The increase in the net investment in direct financing and sales type leases, as well as the corresponding lease revenues, was due in large part to the acquisition of CLG, Inc. The increase in lease revenues for the three months ended June 30, 2000 in comparison to the corresponding period in prior year, without the operations of CLG, Inc., would have been 2.0%. For the three months ended June 30, 2000, fee and other income increased 113.6% over the comparable period in the prior fiscal year. This increase is attributable to increases in revenues from adjunct services and fees, including broker fees, support fees, warranty reimbursements, and learning center revenues generated by the Company's technology business unit subsidiaries. Included in the Company's fee and other income are earnings from certain transactions which are in the Company's normal course of business but there is no guarantee that future transactions of the same nature, size or profitability will occur. The Company's ability to consummate such transactions, and the timing thereof, may depend largely upon factors outside the direct control of management. The earnings from these types of transactions in a particular period may not be indicative of the earnings that can be expected in future periods. The acquisition of CLG, Inc. did not materially affect the increases for the periods presented. For the three months ended June 30, 2000, the Company recorded $1,116,439 in ePlusSuite revenues. These revenues consisted primarily of amounts charged for the arrangement of procurement transactions executed through Procure+, a component of ePlusSuite. There were no ePlusSuite revenues recorded in the comparable three months of the prior fiscal year, as ePlusSuite was introduced on November 2, 1999. During the three months ended June 30, 2000, the selling, general and administrative expenses allocated to the e-commerce busines unit consisted primarily of a corporate overhead allocation. -13- The Company's direct lease costs increased 2,056,435, or 216.7% during the three-month period ended June 30, 2000 as compared to the same period in the prior fiscal year. The increase for the three-month period is attributable to increased credit loss reserve expense and the acquisition of CLG, Inc., which significantly increased the Company's operating lease portfolio and therefore its depreciation expense. The increase in direct lease costs attributable to the acquisition of CLG, Inc. was $1,367,736, or 66.5% of the overall increase. Salaries and benefits expenses increased 72.3% during the three-month period ended June 30, 2000 over the same period in the prior year. This increase reflects the increased number of personnel employed by the Company, higher commission expenses in the technology business unit, and the acquisition of CLG, Inc. Interest and financing costs incurred by the Company for the three months ended June 20, 2000 increased 169.1%, and relate to interest costs on the Company's indebtedness. The Company's lease related non-recourse debt portfolio has increased significantly over the balance in the prior year due to its increased investment in direct financing and sales-type leases and the acquisition of CLG, Inc. Payment for interest costs on the majority of non-recourse and certain recourse notes are typically remitted directly to the lender by the lessee. The Company's provision for income taxes increased to $1,656,611 for the three months ended June 30, 2000 from $1,001,642 for the three months ended June 30, 1999, reflecting effective income tax rates of 40% for both periods. The foregoing resulted in a 65.4% increase in net earnings for the three-month period ended June 30, 2000 as compared to the same periods in the prior fiscal year. Basic and fully diluted earnings per common share were $.26 and $.24 for the three months ended June 30, 2000, as compared to $.20 for both methods for the three months ended June 30, 1999. Basic and diluted weighted average common shares outstanding for the three months ended June 30, 2000 were 9,397,157 and 10,263,498, respectively. For the three months ended June 30, 1999, the basic and diluted weighted average shares outstanding were 7,477,532 and 7,492,780, respectively. LIQUIDITY AND CAPITAL RESOURCES During the three-month period ended June 30, 2000, the Company used cash flows in operations of $10,892,768, and used cash flows from investing activities of $9,424,333. Cash flows generated by financing activities amounted to $9,195,120 during the same period. The net effect of these cash flows was a net decrease in cash and cash equivalents of $11,121,981 during the three-month period. During the same period, the Company's total assets increased $602,150, less than 1.0%. On April 17, 2000, the Company completed a secondary offering of 1,000,000 shares of its common stock at a price of $28.50 per share. Net proceeds to the Company were $25,999,884. The Company's debt financing activities typically provide approximately 80% to 100% of the purchase price of the equipment purchased by the Company for lease to its customers. Any balance of the purchase price (the Company's equity investment in the equipment) must generally be financed by cash flow from its operations, the sale of the equipment lease to third parties, or other internal means of financing. Although the Company expects that the credit quality of its leases and its residual return history will continue to allow it to obtain such financing, no assurances can be given that such financing will be available, at acceptable terms, or at all. The financing necessary to support the Company's leasing activities has principally been provided by non-recourse and recourse -14- borrowings. Historically, the Company has obtained recourse and non-recourse borrowings from money centers and regional banks, insurance companies, finance companies and financial intermediaries. The Company has formal programs with Key Corporate Capital, Inc., Fleet Business Credit Corporation, Centura Bank, Wachovia Bank & Trust, Norwest Equipment Finance, Inc., and Synovus Leasing Company. These programs require that each transaction is specifically approved and done solely at the lender's discretion. During the three-month period ending June 30, 2000, the Company's lease related non-recourse debt portfolio decreased 5.9% to $172,115,811. On March 12, 1997, the Company established a $10,000,000 credit facility agreement with Heller Financial, Inc. ("Heller"). Under the terms of the Heller facility, a maximum amount of $10,000,000 was available to borrow provided that each draw was subject to the approval of Heller. On March 12, 1998, the formal commitment from Heller to fund additional advances under the line was allowed to expire, however, we are still transacting business as if the formal agreement terms are in place. The primary purpose of the Heller facility was for the permanent fixed-rate discounting of rents for commercial leases of information technology assets with the Company's middle-market customers. As of June 30, 2000 the balance on this account was $1,796,224. Originally, each advance under the facility bore an annual interest rate equal to the sum of the weekly average U.S. Treasury Constant Maturities for a Treasury Note having approximately an equal term as the weighted average term of the contracts subject to the advance, plus an index ranging from 1.75% to 3.00%, depending on the amount of the advance and the credit rating (if any) of the lessee. Thereafter, the annual interest rate was fixed by Heller each month and adjusted each subsequent month. The Heller facility contains a number of contractual covenants and is a limited recourse facility, secured by a first-priority lien in the lease contracts and chattel paper relating to each loan advance, the equipment under the lease contracts, a 10% cross-collateralized first loss guarantee, and all books, records and proceeds. The Heller facility was made to MLC Group and is guaranteed by ePlus inc. The Heller facility is subject to their sole discretion, and is further subject to ePlus inc.'s compliance with certain conditions and procedures. Through MLC/CLC, LLC, the Company has a joint venture agreement that has historically provided the equity investment financing for certain of the Company's transactions. Firstar Equipment Finance Company ("FEFCO"), formerly Cargill Leasing Corporation, is an unaffiliated investor which owns 95% of MLC/CLC, LLC. FEFCO's parent company, Firstar Corporation, is a $20 billion bank holding company that is publicly traded on the New York Stock Exchange under the symbol "FSR". This joint venture arrangement enables the Company to invest in a significantly greater portfolio of business than its limited capital base would otherwise allow. A significant portion of the Company's revenue generated by the sale of leased equipment is attributable to sales to MLC/CLC, LLC. (See "RESULTS OF OPERATIONS"). FEFCO has discontinued new lease acquisition transactions effective May, 2000. The Company's "Accounts payable - equipment" represents equipment costs that have been placed on a lease schedule, but for which the Company has not yet paid. The balance of unpaid equipment cost can vary depending on vendor terms and the timing of lease originations. As of June 30, 2000, the Company had $28,962,152 of unpaid equipment cost, as compared to $22,975,545 at March 31, 2000. Working capital financing in our leasing business is provided by a $65 million committed credit facility which is a short-term, secured, recourse facility provided through First Union National Bank, N.A. and which has syndicated the facility to the following participants and in the following amounts: -15- National City Bank ($15 million); Summit Bank ($10 million); Bank Leumi USA ($10 million); and Key Bank ($10 million). This credit facility has been in place since December 1998, was renewed for another one-year period on December 19, 1999, has full recourse to the Company, and is secured by a blanket lien against all of the Company's assets. In addition, the Company has entered into pledge agreements to pledge the common stock of all wholly-owned subsidiaries. The interest rates charged under the facility are LIBOR plus 1.5% or Prime minus .5%, depending on the term of the borrowing. The facility expires on December 19, 2000. As of June 30, 2000, the Company had an outstanding balance of $15.0 million on the First Union Credit Facility. ePlus Technology of NC inc., ePlus Technology of PA inc. and ePlus Technology inc. have separate credit sources to finance their working capital requirements for inventories and accounts receivable. Their traditional business as sellers of PC's and related network equipment and software products is financed through agreements known as "floor planning" financing where interest expense for the first thirty to forty days is not charged but is paid for by the supplier/distributor. These floor plan liabilities are recorded as accounts payable-trade as they are normally repaid within the thirty to forty day time frame and represent an assigned accounts payable originally generated with the supplier/distributor. If the thirty to forty day obligation is not paid timely, interest is then assessed at stated contractual rates. As of June 30, 2000 the floor planning agreements are as follows:
Balance at Entity Floor Plan Supplier Credit Limit June 30, 2000 - -------------------------- ----------- ----------- ------------- ePlus Technology of NC inc. Finova Capital Corp. $ 4,000,000 $ 1,696,538 IBM Credit Corp. 250,000 -- ePlus Technology of PA inc. Finova Capital Corp. 7,000,000 4,092,207 IBM Credit Corp. 750,000 155,123 EPlus Technology inc. BankAmerica Credit 18,500,000 2,061,115
ePlus Technology of PA inc. also has a line of credit in place with PNC Bank, N.A. that expires on September 30, 2000, and is guaranteed by ePlus inc. The credit facility provided by Finova Capital Corporation, is required to be guaranteed by ePlus inc. for the greater of one-half of the outstanding balance or $5,500,000. Availability under the revolving lines of credit may be limited by the asset value of equipment purchased by the Company and may be further limited by certain covenants and terms and conditions of the facilities. ePlus Technology, inc. was notified by Bank America Credit of its intent to terminate its floor planning effective August 16, 2000. ePlus Technology, inc. will secure another floor plan supplier or utilize internal working capital as an alternative. -16- The implementation of the Company's e-commerce business strategy will require a significant amount of cash beyond what the Company currently has available or is likely to generate from its current operations. In addition, the Company may selectively acquire other companies that have attractive customer relationships and skilled sales forces. The Company may also acquire technology companies to expand and enhance the platform of ePlusSuite to provide additional functionality and value added services. As a result, the Company expects to require additional financing to fund its strategy implementation and potential future acquisitions, which may include additional debt and equity financing. POTENTIAL FLUCTUATIONS IN QUARTERLY OPERATING RESULTS The Company's future quarterly operating results and the market price of its stock may fluctuate. In the event the Company's revenues or earnings for any quarter are less than the level expected by securities analysts or the market in general, such shortfall could have an immediate and significant adverse impact on the market price of the Company's stock. Any such adverse impact could be greater if any such shortfall occurs near the time of any material decrease in any widely followed stock index or in the market price of the stock of one or more public equipment leasing and financing companies or major customers or vendors of the Company. The Company's quarterly results of operations are susceptible to fluctuations for a number of reasons, including, without limitation, its entry into the e-commerce market, any reduction of expected residual values related to the equipment under the Company's leases, timing of specific transactions and other factors (See "FACTORS THAT MAY AFFECT FUTURE OPERATING RESULTS"). Quarterly operating results could also fluctuate as a result of the sale by the Company of equipment in its lease portfolio, at the expiration of a lease term or prior to such expiration, to a lessee or to a third party. Such sales of equipment may have the effect of increasing revenues and net income during the quarter in which the sale occurs, and reducing revenues and net income otherwise expected in subsequent quarters. The Company believes that comparisons of quarterly results of its operations are not necessarily meaningful and that results for one quarter should not be relied upon as an indication of future performance. INFLATION The Company does not believe that inflation has had a material impact on its results of operations during the first three quarters of fiscal 2000. FACTORS THAT MAY AFFECT FUTURE OPERATING RESULTS Certain statements contained herein are not based on historical fact, but are forward-looking statements that are based upon numerous assumptions about future conditions that may not occur. Actual events, transactions and results may materially differ from the anticipated events, transactions, or results described in such statements. The Company's ability to consummate such transactions and achieve such events or results is subject to certain risks and uncertainties. Such risks and uncertainties include, but are not limited to the matters set forth below. The Company's e-commerce business has an extremely limited operating history. Although it has been in the business of financing and selling information technology equipment since 1990, the Company expects to derive a significant -17- portion of its future revenues from its ePlusSuite services. As a result, the Company will encounter some of the challenges, risks, difficulties and uncertainties frequently encountered by early stage companies using new and unproven business models in new and rapidly evolving markets. Some of these challenges relate to the Company's ability to: o increase the total number of users of ePlusSuite services o adapt to meet changes in its markets and competitive developments; and o continue to update its technology to enhance the features and functionality of its suite of products. The Company cannot be certain that its business strategy will be successful or that it will successfully address these and other challenges, risks and uncertainties. Over the longer term, the Company expects to derive a significant portion of its revenues from ePlusSuite services, which is based on an unproven business model. The Company expects to incur increased expenses that may negatively impact profitability. The Company also expects to incur significant sales and marketing, research and development, and general and administrative expenses in connection with the development of this business. As a result, the Company may incur significant losses in its e-commerce business unit in the foreseeable future, which may have a material adverse effect on the future operating results of the Company as a whole. The Company began operating its ePlusSuite services in November, 1999. Broad and timely acceptance of the ePlusSuite services, which is critical to the Company's future success, is subject to a number of significant risks. These risks include: o operating resource management and procurement on the Internet is a new market; the system's ability to support large numbers of buyers and suppliers is unproven o significant enhancement of the features and services of ePlusSuite services is needed to achieve widespread commercial initial and continued widespread acceptance of the system; o the pricing model may not be acceptable to customers; o if the Company is unable to develop and increase transaction volume on ePlusSuite, it is unlikely that it will ever achieve or maintain profitability in this business; o businesses that have made substantial up-front payments for e-commerce solutions may be reluctant to replace their current solution and adopt the Company's solution; o the Company's ability to adapt to a new market that is characterized by rapidly changing technology, evolving industry standards and frequent new product announcements; o significant expansion of internal resources is needed to support planned growth of the Company's ePlusSuite services. THE YEAR 2000 ISSUE We have completed the Year 2000 compliance modification to our information-technology and non-information technology based applications. To date, we have not experienced any disruptions in any aspect of our operations. We continue to monitor our infrastructure, the products we offer, and our critical business partners to ensure continued success. We do not anticipate any significant future costs related to maintaining our Year 2000 compliance. -18- ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Although a substantial portion of the Company's liabilities are non-recourse, fixed interest rate instruments, the Company is reliant upon lines of credit and other financing facilities which are subject to fluctuations in interest rates. Should interest rates significantly increase, the Company would incur increased interest expense, which could potentially lower earnings. PART II. OTHER INFORMATION Item 1. Legal Proceedings Not Applicable Item 2. CHANGES IN SECURITIES AND USE OF PROCEEDS On April 11, 2000, the Company issued 709,956 shares of common stock to TC Plus LLC pursuant to a cashless exercise of a warrant, based on an exercise price of $11.00 per share. Due to the sophisticated nature of the investor, the Company relied on the exemption from registration under Section 4(2) of the Securities Act of 1933, as amended, in the issuance of the shares pursuant to the exercise. On May 25, 2000, the Company issued a common stock purchase warrant to a business partner which allows the holder to purchase up to 50,000 shares of the Company's common stock at a price of $18.75 per share over a two year period beginning July 1, 2000. Due to the institutional and sophisticated nature of the investor, the Company relied on the exemption from registration under Section 4(2) of the Securities Act of 1933, as amended, in the issuance of the warrant. Item 3. Defaults Under Senior Securities Not Applicable Item 4. Submission of Matters to a Vote of Security Holders Not Applicable Item 5. Other Information Not Applicable Item 6(a) Exhibits Exhibit Number Description Page -------------- -------------------------------------------------------- 27.1 Financial Data 21 Item 6(b) Reports on Form 8-K None -19- SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the registrant and in the capacities and on the dates indicated. ePlus inc. /s/ PHILLIP G. NORTON By: Phillip G. Norton, Chairman of the Board, President and Chief Executive Officer Date: August 14, 2000 /s/ STEVEN J. MENCARINI By: Steven J. Mencarini, Senior Vice President and Chief Financial Officer Date: August 14, 2000 -20 EX-27 2 0002.txt FINANCIAL DATA SCHEDULE
5 1,000 3-MOS MAR-31-2001 APR-01-2000 JUN-30-2000 10,788 0 68,701 0 3,071 0 3,079 0 345,937 0 0 0 0 97 85,820 345,937 72,112 83,613 63,738 79,472 15,734 0 3,548 4,142 1,657 2,485 0 0 0 2,485 0.26 0.24
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