Delaware
|
001-34167
|
54-1817218
|
||
(State or other jurisdiction of incorporation or organization)
|
(Commission File Number)
|
(I.R.S. Employer Identification No.)
|
99.1
|
Press release dated November 3, 2016, issued by ePlus inc.
|
ePlus inc.
|
||||
By: /s/ Elaine D. Marion
|
||||
Elaine D. Marion
|
||||
Chief Financial Officer
|
·
|
Net sales increased 10.5% to $371.5 million; technology segment net sales increased 11.3% to $362.7 million.
|
·
|
Adjusted gross billings of product and services increased 13.0% to $487.3 million.
|
·
|
Gross margin on sales of product and services expanded 80 basis points to 20.2%; consolidated gross margin increased 70 basis points to 22.1%.
|
·
|
Net earnings increased 7.0% to $16.8 million.
|
·
|
Adjusted EBITDA increased 7.4% to $29.9 million.
|
·
|
Diluted earnings per share increased 12.6% to $2.42. Non-GAAP diluted earnings per share increased 12.8% to $2.47.
|
·
|
Net sales increased 10.5% to $670.0 million; technology segment net sales increased 11.4% to $654.2 million.
|
·
|
Adjusted gross billings of product and services increased 15.9% to $884.8 million.
|
·
|
Gross margin on sales of product and services expanded 80 basis points to 20.5%; consolidated gross margin increased 70 basis points to 22.3%.
|
·
|
Net earnings increased 12.1% to $27.4 million.
|
·
|
Adjusted EBITDA increased 11.4% to $49.2 million.
|
·
|
Diluted earnings per share increased 16.7% to $3.91. Non-GAAP diluted earnings per share increased 16.3% to $4.00.
|
Three Months Ended September 30,
|
||||||||
2016
|
2015
|
Change
|
||||||
Sales of product and services
|
$361,227
|
|
$324,259
|
|
$36,968
|
|
11.4%
|
|
Fee and other income
|
1,488
|
|
1,721
|
|
(233)
|
|
(13.5%)
|
|
Net sales
|
362,715
|
|
325,980
|
|
36,735
|
|
11.3%
|
|
|
|
|
|
|
|
|
||
Cost of sales, product and services
|
288,204
|
|
261,208
|
|
26,996
|
|
10.3%
|
|
Gross profit
|
74,511
|
|
64,772
|
|
9,739
|
|
15.0%
|
|
Professional and other fees
|
1,425
|
|
1,305
|
|
120
|
|
9.2%
|
|
Salaries and benefits
|
40,182
|
|
33,476
|
|
6,706
|
|
20.0%
|
|
General and administrative
|
6,695
|
|
6,126
|
|
569
|
|
9.3%
|
|
Depreciation and amortization
|
1,721
|
1,196
|
525
|
43.9%
|
||||
Interest and financing costs
|
-
|
|
22
|
|
(22)
|
|
(100.0%)
|
|
Operating expenses
|
50,023
|
|
42,125
|
|
7,898
|
|
18.7%
|
|
|
|
|
|
|
|
|
||
Operating income
|
$24,488
|
|
$22,647
|
$1,841
|
8.1%
|
|||
Adjusted EBITDA
|
$26,209
|
$23,843
|
$2,366
|
9.9%
|
Three Months Ended September 30,
|
||||||||
2016
|
2015
|
Change
|
||||||
Financing revenue
|
$8,722
|
|
$10,279
|
|
$ (1,557)
|
|
(15.1%)
|
|
Fee and other income
|
25
|
|
27
|
|
(2)
|
|
(7.4%)
|
|
Net sales
|
8,747
|
|
10,306
|
|
(1,559)
|
|
(15.1%)
|
|
|
|
|
|
|
|
|
||
Direct lease costs
|
1,325
|
|
3,157
|
|
(1,832)
|
|
(58.0%)
|
|
Gross profit
|
7,422
|
|
7,149
|
|
273
|
|
3.8%
|
|
Professional and other fees
|
310
|
|
208
|
|
102
|
|
49.0%
|
|
Salaries and benefits
|
2,114
|
|
2,264
|
|
(150)
|
|
(6.6%)
|
|
General and administrative
|
881
|
|
259
|
|
622
|
|
240.2%
|
|
Depreciation and amortization
|
2
|
4
|
(2)
|
(50.0%)
|
||||
Interest and financing costs
|
400
|
|
400
|
|
-
|
|
-
|
|
Operating expenses
|
3,707
|
|
3,135
|
|
572
|
|
18.2%
|
|
Operating income
|
$3,715
|
|
$4,014
|
$(299)
|
(7.4%)
|
|||
Adjusted EBITDA
|
$3,717
|
$4,018
|
$(301)
|
(7.5%)
|
Six Months Ended September 30,
|
||||||||
2016
|
2015
|
Change
|
||||||
Sales of product and services
|
$651,408
|
|
$583,955
|
|
$67,453
|
|
11.6%
|
|
Fee and other income
|
2,764
|
|
3,532
|
|
(768)
|
|
(21.7%)
|
|
Net sales
|
654,172
|
|
587,487
|
|
66,685
|
|
11.4%
|
|
|
|
|
|
|
|
|
||
Cost of sales, product and services
|
518,051
|
|
468,926
|
|
49,125
|
|
10.5%
|
|
Gross profit
|
136,121
|
|
118,561
|
|
17,560
|
|
14.8%
|
|
Professional and other fees
|
2,922
|
|
2,567
|
|
335
|
|
13.8%
|
|
Salaries and benefits
|
77,667
|
|
66,428
|
|
11,239
|
|
16.9%
|
|
General and administrative
|
12,926
|
|
11,451
|
|
1,475
|
|
12.9%
|
|
Depreciation and amortization
|
3,492
|
2,400
|
1,092
|
45.5%
|
||||
Interest and financing costs
|
-
|
|
41
|
|
(41)
|
|
(100.0%)
|
|
Operating expenses
|
97,007
|
|
82,887
|
|
14,120
|
|
17.0%
|
|
|
|
|
|
|
|
|
||
Operating Income
|
$39,114
|
|
$35,674
|
$3,440
|
9.6%
|
|||
Adjusted EBITDA
|
$42,606
|
$38,074
|
$4,532
|
11.9%
|
Twelve Months Ended September 30,
|
||||||
2016
|
2015
|
Change
|
||||
Technology
|
23%
|
21%
|
2%
|
|||
State & Local Government & Educational Institutions
|
22%
|
23%
|
(1%)
|
|||
Telecom, Media, and Entertainment
|
15%
|
17%
|
(2%)
|
|||
Financial Services
|
12%
|
10%
|
2%
|
|||
Healthcare
|
10%
|
10%
|
-
|
|||
Other
|
18%
|
19%
|
(1%)
|
|||
Total
|
100%
|
100%
|
Six Months Ended September 30,
|
||||||||
2016
|
2015
|
Change
|
||||||
Financing revenue
|
$15,709
|
|
$18,625
|
|
$ (2,916)
|
|
(15.7%)
|
|
Fee and other income
|
84
|
|
40
|
|
44
|
|
110.0%
|
|
Net sales
|
15,793
|
|
18,665
|
|
(2,872)
|
|
(15.4%)
|
|
|
|
|
|
|
|
|
||
Direct lease costs
|
2,317
|
|
6,175
|
|
(3,858)
|
|
(62.5%)
|
|
Gross profit
|
13,476
|
|
12,490
|
|
986
|
|
7.9%
|
|
Professional and other fees
|
599
|
|
464
|
|
135
|
|
29.1%
|
|
Salaries and benefits
|
4,427
|
|
4,526
|
|
(99)
|
|
(2.2%)
|
|
General and administrative
|
1,120
|
|
505
|
|
615
|
|
121.8%
|
|
Depreciation and amortization
|
6
|
8
|
(2)
|
(25.0%)
|
||||
Interest and financing costs
|
749
|
|
934
|
|
(185)
|
|
(19.8%)
|
|
Operating expenses
|
6,901
|
|
6,437
|
|
464
|
|
7.2%
|
|
Operating income
|
$6,575
|
|
$6,053
|
$522
|
8.6%
|
|||
Adjusted EBITDA
|
$6,581
|
$6,061
|
$520
|
8.6%
|
·
|
On October 18, 2016, ePlus announced the addition of its Cloud Aggregated Services, a new suite of cloud services from the company that addresses changing market trends in customer experience and engagement models.
|
·
|
On October 11, 2016, ePlus announced that businesses which need secure WAN transport for cloud environments and branch locations can tap ePlus' new Intelligent Branch solution, which is ideal for organizations with 10 or more branches.
|
·
|
On October 4, 2016, ePlus announced its Business Transformation group, which is charged with the design and development of ePlus-branded solutions that address current business challenges and fast moving, emerging technologies.
|
·
|
On August 19, 2016, ePlus announced that its board of directors has authorized the Company to repurchase up to 500,000 shares of ePlus outstanding common stock over a 12-month period commencing August 19, 2016.
|
·
|
On August 9, 2016, ePlus announced that it has extended its Managed Services platform with an upgraded dashboard, featuring new functionality that provides global trending data, mapping and managed data aggregation.
|
Date:
|
Thursday, November 3, 2016
|
Time:
|
4:30 p.m. ET
|
Live Call:
|
0, domestic, (973) 890-8320, international
|
Replay:
|
(855) 859-2056, domestic, (404) 537-3406, international
|
Passcode:
|
87077452 (live and replay)
|
Webcast:
|
http://www.eplus.com/investors (live and replay)
|
ePlus inc. AND SUBSIDIARIES
|
|
|||||
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
|
|
|||||
(except per share data)
|
|
|
|
|
||
|
As of
|
As of
|
||||
|
September 30, 2016
|
March 31, 2016
|
||||
ASSETS
|
|
(amounts in thousands)
|
||||
Current assets:
|
|
|
||||
Cash and cash equivalents
|
$48,035
|
$94,766
|
||||
Accounts receivable—trade, net
|
292,486
|
234,628
|
||||
Accounts receivable—other, net
|
|
34,873
|
41,771
|
|||
Inventories—net
|
80,502
|
33,343
|
||||
Financing receivables—net, current
|
|
78,616
|
56,448
|
|||
Deferred costs
|
|
4,084
|
6,371
|
|||
Other current assets
|
|
7,403
|
10,649
|
|||
Total current assets
|
|
545,999
|
477,976
|
|||
|
|
|
|
|||
Financing receivables and operating leases—net
|
72,106
|
75,906
|
||||
Property, equipment and other assets
|
11,092
|
8,644
|
||||
Goodwill and other intangible assets—net
|
|
51,697
|
54,154
|
|||
TOTAL ASSETS
|
$680,894
|
$616,680
|
||||
|
|
|
|
|||
LIABILITIES AND STOCKHOLDERS' EQUITY
|
||||||
LIABILITIES
|
||||||
Current liabilities:
|
|
|
|
|||
Accounts payable
|
|
$90,268
|
$76,780
|
|||
Accounts payable—floor plan
|
150,096
|
121,893
|
||||
Salaries and commissions payable
|
15,197
|
14,981
|
||||
Deferred revenue
|
|
20,844
|
18,344
|
|||
Recourse notes payable—current
|
1,950
|
2,288
|
||||
Non-recourse notes payable—current
|
|
43,796
|
26,042
|
|||
Other current liabilities
|
18,925
|
13,118
|
||||
Total current liabilities
|
|
341,076
|
273,446
|
|||
|
|
|
|
|||
Recourse notes payable—long term
|
667
|
1,054
|
||||
Non-recourse notes payable—long term
|
10,980
|
18,038
|
||||
Deferred tax liability—net
|
2,991
|
3,001
|
||||
Other liabilities
|
|
5,477
|
2,263
|
|||
TOTAL LIABILITIES
|
361,191
|
297,802
|
||||
|
|
|||||
COMMITMENTS AND CONTINGENCIES
|
|
|
|
|
||
|
|
|||||
STOCKHOLDERS' EQUITY
|
|
|
||||
Preferred stock, $.01 per share par value; 2,000 shares authorized; none issued or outstanding
|
-
|
|
-
|
|||
Common stock, $.01 per share par value; 25,000 shares authorized; 13,310 issued and 7,080 outstanding at September 30, 2016 and 13,237 issued and 7,365 outstanding at March 31, 2016
|
133
|
132
|
||||
Additional paid-in capital
|
120,414
|
117,511
|
||||
Treasury stock, at cost, 6,230 and 5,872 shares, at September 30, 2016 and March 31, 2016, respectively
|
(158,948)
|
(129,518)
|
||||
Retained earnings
|
358,670
|
331,224
|
||||
Accumulated other comprehensive income—foreign currency translation adjustment
|
|
(566)
|
(471)
|
|||
Total Stockholders' Equity
|
319,703
|
318,878
|
||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
$680,894
|
$616,680
|
ePlus inc. AND SUBSIDIARIES
|
|
|
|
|
|
|
|
|||||||||||
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
|
||||||||||||||||||
Three Months Ended
|
Six Months Ended
|
|||||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||||
2016
|
2015
|
2016
|
2015
|
|||||||||||||||
(amounts in thousands, except per share data)
|
||||||||||||||||||
Net sales
|
$371,462
|
$336,286
|
|
$669,965
|
$606,152
|
|||||||||||||
Cost of sales
|
289,529
|
|
264,365
|
|
520,368
|
475,101
|
||||||||||||
Gross profit
|
81,933
|
71,921
|
149,597
|
131,051
|
||||||||||||||
|
|
|
|
|
||||||||||||||
Professional and other fees
|
1,735
|
|
1,513
|
|
3,521
|
3,031
|
||||||||||||
Salaries and benefits
|
42,296
|
|
35,740
|
|
82,094
|
70,954
|
||||||||||||
General and administrative expenses
|
7,576
|
|
6,385
|
|
14,046
|
11,956
|
||||||||||||
Depreciation and amortization
|
1,723
|
1,200
|
3,498
|
2,408
|
||||||||||||||
Interest and financing costs
|
400
|
|
422
|
|
749
|
975
|
||||||||||||
Operating expenses
|
53,730
|
|
45,260
|
|
103,908
|
89,324
|
||||||||||||
|
|
|
||||||||||||||||
OPERATING INCOME
|
28,203
|
|
26,661
|
|
45,689
|
41,727
|
||||||||||||
|
|
|
|
|||||||||||||||
Other income
|
380
|
|
-
|
|
380
|
-
|
||||||||||||
|
|
|
|
|||||||||||||||
EARNINGS BEFORE PROVISION FOR INCOME TAXES
|
28,583
|
|
26,661
|
|
46,069
|
|
41,727
|
|||||||||||
|
|
|
|
|||||||||||||||
PROVISION FOR INCOME TAXES
|
11,808
|
|
10,982
|
|
18,623
|
17,234
|
||||||||||||
|
|
|
|
|||||||||||||||
NET EARNINGS
|
$16,775
|
|
$15,679
|
|
$27,446
|
$24,493
|
||||||||||||
|
|
|
|
|||||||||||||||
NET EARNINGS PER COMMON SHARE—BASIC
|
$2.43
|
|
$2.16
|
|
$3.94
|
$3.38
|
||||||||||||
NET EARNINGS PER COMMON SHARE—DILUTED
|
$2.42
|
|
$2.15
|
|
$3.91
|
$3.35
|
||||||||||||
|
|
|
|
|||||||||||||||
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING—
|
||||||||||||||||||
BASIC
|
6,909
|
|
7,274
|
|
6,971
|
7,249
|
||||||||||||
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING—
|
||||||||||||||||||
DILUTED
|
6,942
|
|
7,297
|
|
7,027
|
7,310
|
ePlus inc. AND SUBSIDIARIES
|
|
|
|
|
|
|
|
RECONCILIATION OF NON-GAAP INFORMATION
|
|
|
|
|
|
|
|
Three Months Ended September 30,
|
Six Months Ended September 30,
|
||||||
|
2016
|
2015
|
2016
|
2015
|
|||
(amounts in thousands)
|
|||||||
GAAP: Sales of product and services
|
$361,227
|
|
$324,259
|
|
$651,408
|
|
$583,955
|
Plus: Costs incurred related to sales of
third party software assurance,
maintenance and services
|
126,081
|
106,837
|
|
233,373
|
|
179,449
|
|
Non-GAAP adjusted gross billings of
product and services
|
$487,308
|
$431,096
|
|
$884,781
|
|
$763,404
|
Three Months Ended September 30,
|
Six Months Ended September 30,
|
||||||
|
2016
|
2015
|
2016
|
2015
|
|||
(amounts in thousands)
|
|||||||
GAAP: Net earnings
|
$16,775
|
$15,679
|
|
$27,446
|
|
$24,493
|
|
Plus: Provision for income taxes
|
11,808
|
10,982
|
|
18,623
|
|
17,234
|
|
Plus: Depreciation and amortization [1]
|
1,723
|
1,200
|
|
3,498
|
|
2,408
|
|
Less: Other income [2]
|
(380)
|
-
|
|
(380)
|
|
-
|
|
Non-GAAP: Adjusted EBITDA
|
$29,926
|
$27,861
|
|
$49,187
|
|
$44,135
|
|
Non-GAAP: Adjusted EBITDA margin
|
8.1%
|
8.3%
|
|
7.3%
|
|
7.3%
|
Three Months Ended September 30,
|
Six Months Ended September 30,
|
||||||
|
2016
|
2015
|
2016
|
2015
|
|||
(amounts in thousands)
|
|||||||
Technology Segment
|
|||||||
Operating income
|
$24,488
|
$22,647
|
|
$39,114
|
|
$35,674
|
|
Plus: Depreciation and amortization [1]
|
1,721
|
1,196
|
|
3,492
|
|
2,400
|
|
Adjusted EBITDA
|
$26,209
|
$23,843
|
|
$42,606
|
|
$38,074
|
|
Financing Segment
|
|||||||
Operating income
|
$3,715
|
$4,014
|
|
$6,575
|
|
$6,053
|
|
Plus: Depreciation and amortization [1]
|
2
|
4
|
|
6
|
|
8
|
|
Adjusted EBITDA
|
$3,717
|
$4.018
|
|
$6,581
|
|
$6,061
|
|
Three Months Ended September 30,
|
Six Months Ended September 30,
|
||||||
2016
|
2015
|
2016
|
2015
|
||||
(amounts in thousands, except per share data)
|
|||||||
GAAP: Earnings before provision for income taxes
|
$28,583
|
|
$26,661
|
|
$46,069
|
|
$41,727
|
Plus: Acquisition related amortization expense [3]
|
974
|
545
|
2,063
|
1,113
|
|||
Less: Other income [2]
|
(380)
|
-
|
(380)
|
-
|
|||
Non-GAAP: Earnings before provision for income taxes
|
29,177
|
27,206
|
47,752
|
42,840
|
|||
Non-GAAP: Provision for income taxes [4]
|
12,047
|
11,206
|
19,663
|
17,694
|
|||
Non-GAAP: Net earnings
|
$17,130
|
$16,000
|
$28,089
|
$25,146
|
|||
GAAP net earnings per common share – diluted
|
$2.42
|
|
$2.15
|
|
$3.91
|
$3.35
|
|
Non-GAAP net earnings per common share – diluted
|
$2.47
|
$2.19
|
$4.00
|
$3.44
|
|||
[1] Amount consists of depreciation and amortization for assets used internally.
|
[2] Gain on a class action claim during the three and six months ended September 30, 2016.
|
[3] Amount consists of amortization of intangible assets from acquired businesses.
|
[4] Non-GAAP provision for income taxes is calculated based on the effective tax rate for the non-GAAP adjustments. For comparative purposes, the non-GAAP provision for income taxes for the three and six months ended September 30, 2016 excludes the tax benefit of $0.1 million and $0.5 million, respectively, associated with adopting the stock-based compensation accounting standard.
|