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 February 2, 2017, issued by ePlus inc.
|
ePlus inc.
|
||||
By: /s/ Elaine D. Marion
|
||||
Elaine D. Marion
|
||||
Chief Financial Officer
|
·
|
Net sales increased 9.4% to $326.7 million; technology segment net sales increased 10.0% to $318.3 million.
|
·
|
Adjusted gross billings of product and services increased 9.8% to $432.4 million.
|
·
|
Gross margin on sales of product and services and consolidated gross margin both expanded 110 basis points to 20.7% and 22.6%, respectively.
|
·
|
Diluted earnings per share increased 29.3% to $1.81. Non-GAAP diluted earnings per share increased 30.8% to $1.91.
|
·
|
Net sales increased 10.1% to $996.6 million; technology segment net sales increased 10.9% to $972.5 million.
|
·
|
Adjusted gross billings of product and services increased 13.8% to $1.32 billion.
|
·
|
Gross margin on sales of product and services and consolidated gross margin both increased 80 basis points to 20.5% and 22.4%, respectively.
|
·
|
Diluted earnings per share increased 20.5% to $5.71. Non-GAAP diluted earnings per share increased 20.7% to $5.90.
|
Three Months Ended December 31,
|
||||||||
2016
|
2015
|
Change
|
||||||
Sales of product and services
|
$317,391
|
|
$287,859
|
|
$29,532
|
|
10.3%
|
|
Fee and other income
|
915
|
|
1,506
|
|
(591)
|
|
(39.2%)
|
|
Net sales
|
318,306
|
|
289,365
|
|
28,941
|
|
10.0%
|
|
|
|
|
|
|
|
|
||
Cost of sales, product and services
|
251,729
|
|
231,503
|
|
20,226
|
|
8.7%
|
|
Gross profit
|
66,577
|
|
57,862
|
|
8,715
|
|
15.1%
|
|
Professional and other fees
|
1,216
|
|
1,608
|
|
(392)
|
|
(24.4%)
|
|
Salaries and benefits
|
40,155
|
|
35,043
|
|
5,112
|
|
14.6%
|
|
General and administrative
|
6,409
|
|
5,203
|
|
1,206
|
|
23.2%
|
|
Depreciation and amortization
|
1,908
|
1,327
|
581
|
43.8%
|
||||
Interest and financing costs
|
-
|
|
10
|
|
(10)
|
|
(100.0%)
|
|
Operating expenses
|
49,688
|
|
43,191
|
|
6,497
|
|
15.0%
|
|
|
|
|
|
|
|
|
||
Operating income
|
$16,889
|
|
$14,671
|
$2,218
|
15.1%
|
|||
Adjusted EBITDA
|
$18,797
|
$15,998
|
$2,799
|
17.5%
|
Three Months Ended December 31,
|
||||||||
2016
|
2015
|
Change
|
||||||
Financing revenue
|
$8,190
|
|
$9,289
|
|
$ (1,099)
|
|
(11.8%)
|
|
Fee and other income
|
161
|
|
(10)
|
|
171
|
|
1,710.0%
|
|
Net sales
|
8,351
|
|
9,279
|
|
(928)
|
|
(10.0%)
|
|
|
|
|
|
|
|
|
||
Direct lease costs
|
1,142
|
|
3,081
|
|
(1,939)
|
|
(62.9%)
|
|
Gross profit
|
7,209
|
|
6,198
|
|
1,011
|
|
16.3%
|
|
Professional and other fees
|
181
|
|
274
|
|
(93)
|
|
(33.9%)
|
|
Salaries and benefits
|
2,230
|
|
2,329
|
|
(99)
|
|
(4.3%)
|
|
General and administrative
|
(31)
|
|
231
|
|
(262)
|
|
(113.4%)
|
|
Depreciation and amortization
|
2
|
4
|
(2)
|
(50.0%)
|
||||
Interest and financing costs
|
409
|
|
386
|
|
23
|
|
6.0%
|
|
Operating expenses
|
2,791
|
|
3,224
|
|
(433)
|
|
(13.4%)
|
|
Operating income
|
$4,418
|
|
$2,974
|
$1,444
|
48.6%
|
|||
Adjusted EBITDA
|
$4,420
|
$2,978
|
$1,442
|
48.4%
|
Nine Months Ended December 31,
|
||||||||
2016
|
2015
|
Change
|
||||||
Sales of product and services
|
$968,799
|
|
$871,814
|
|
$96,985
|
|
11.1%
|
|
Fee and other income
|
3,679
|
|
5,038
|
|
(1,359)
|
|
(27.0%)
|
|
Net sales
|
972,478
|
|
876,852
|
|
95,626
|
|
10.9%
|
|
|
|
|
|
|
|
|
||
Cost of sales, product and services
|
769,780
|
|
700,429
|
|
69,351
|
|
9.9%
|
|
Gross profit
|
202,698
|
|
176,423
|
|
26,275
|
|
14.9%
|
|
Professional and other fees
|
4,138
|
|
4,175
|
|
(37)
|
|
(0.9%)
|
|
Salaries and benefits
|
117,822
|
|
101,471
|
|
16,351
|
|
16.1%
|
|
General and administrative
|
19,335
|
|
16,653
|
|
2,682
|
16.1%
|
||
Depreciation and amortization
|
5,400
|
3,728
|
1,672
|
44.8%
|
||||
Interest and financing costs
|
-
|
|
51
|
|
(51)
|
|
(100.0%)
|
|
Operating expenses
|
146,695
|
126,078
|
|
20,617
|
|
16.4%
|
||
|
|
|
|
|
|
|
||
Operating income
|
$56,003
|
|
$50,345
|
$5,658
|
11.2%
|
|||
Adjusted EBITDA
|
$61,403
|
$54,073
|
$7,330
|
13.6%
|
Twelve Months Ended December 31,
|
||||||
2016
|
2015
|
Change
|
||||
Technology
|
22%
|
23%
|
(1%)
|
|||
State & Local Government & Educational Institutions
|
21%
|
23%
|
(2%)
|
|||
Telecom, Media, and Entertainment
|
16%
|
14%
|
2%
|
|||
Financial Services
|
12%
|
12%
|
-
|
|||
Healthcare
|
11%
|
10%
|
1%
|
|||
Other
|
18%
|
18%
|
-
|
|||
Total
|
100%
|
100%
|
Nine Months Ended December 31,
|
||||||||
2016
|
2015
|
Change
|
||||||
Financing revenue
|
$23,899
|
|
$27,914
|
|
$ (4,015)
|
|
(14.4%)
|
|
Fee and other income
|
245
|
|
30
|
|
215
|
|
716.7%
|
|
Net sales
|
24,144
|
|
27,944
|
|
(3,800)
|
|
(13.6%)
|
|
|
|
|
|
|
|
|
||
Direct lease costs
|
3,459
|
|
9,256
|
|
(5,797)
|
|
(62.6%)
|
|
Gross profit
|
20,685
|
|
18,688
|
|
1,997
|
|
10.7%
|
|
Professional and other fees
|
780
|
|
738
|
|
42
|
|
5.7%
|
|
Salaries and benefits
|
6,657
|
|
6,855
|
|
(198)
|
|
(2.9%)
|
|
General and administrative
|
1,089
|
|
737
|
|
352
|
|
47.8%
|
|
Depreciation and amortization
|
8
|
11
|
(3)
|
(27.3%)
|
||||
Interest and financing costs
|
1,158
|
|
1,320
|
|
(162)
|
|
(12.3%)
|
|
Operating expenses
|
9,692
|
|
9,661
|
|
31
|
|
0.3%
|
|
Operating income
|
$10,993
|
|
$9,027
|
$1,966
|
21.8%
|
|||
Adjusted EBITDA
|
$11,001
|
$9,038
|
$1,963
|
21.7%
|
·
|
On January 24, 2017, ePlus announced that it is hosting a presentation with Ingram Micro at the HIMSS annual conference in February, 2017 to explore "The Compelling Case for Improving Healthcare IT Security."
|
·
|
On January 12, 2017, ePlus announced that it has been selected as the 2016 Major National Partner of the Year by Veeam® Software, the innovative provider of solutions that deliver Availability for the Always-On Enterprise™.
|
·
|
On January 10, 2017, ePlus announced a long-term partnership with veteran training organization, Tech Qualled, to help U.S. Military veterans secure jobs in the IT industry.
|
·
|
On January 4, 2017, ePlus announced that it designed and deployed a full technology infrastructure upgrade for Garrett Regional Medical Center.
|
·
|
On December 27, 2016 ePlus announced that it has successfully completed its Type 2 SSAE 16 (Statement on Standards for Attestation Engagements) examination for its Managed Services Center and OneSource family of software products that provide information technology acquisition, asset management, procurement and catalog management software services.
|
·
|
On December 6, 2016, ePlus announced that its subsidiary, ePlus Technology, inc., acquired the IT Services equipment and integration business of Consolidated Communications Holdings, Inc. (NASDAQ: CNSL).
|
·
|
On November 28, 2016 ePlus announced that it will be presenting at the HPE Discover Conference being held November 29 – December 1 at the ExCel in London.
|
·
|
On November 17, 2016 ePlus launched its CyberSecurity Management Program, a programmatic security service that allows organizations to establish, implement, maintain and improve their cybersecurity processes.
|
·
|
On November 16, 2016, ePlus announced that its subsidiary, ePlus Technology, inc., was named Cisco's Americas Enterprise Networks Partner of the Year and US Nationals Services Partner of the Year.
|
Date:
|
Thursday, February 2, 2017
|
Time:
|
4:30 p.m. ET
|
Live Call:
|
(877) 870-9226, domestic, (973) 890-8320, international
|
Replay:
|
(855) 859-2056, domestic, (404) 537-3406, international
|
Passcode:
|
47712503 (live and replay)
|
Webcast:
|
http://www.eplus.com/investors (live and replay)
|
ePlus inc. AND SUBSIDIARIES
|
|
|||||
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
|
|
|||||
|
|
|
|
|||
|
As of
|
As of
|
||||
|
December 31, 2016
|
March 31, 2016
|
||||
ASSETS
|
|
(in thousands, except per share data)
|
||||
Current assets:
|
|
|
||||
Cash and cash equivalents
|
$69,677
|
$94,766
|
||||
Accounts receivable—trade, net
|
297,460
|
234,628
|
||||
Accounts receivable—other, net
|
|
34,183
|
41,771
|
|||
Inventories—net
|
111,076
|
33,343
|
||||
Financing receivables—net, current
|
|
65,945
|
56,448
|
|||
Deferred costs
|
|
6,418
|
6,371
|
|||
Other current assets
|
|
4,035
|
10,649
|
|||
Total current assets
|
|
588,794
|
477,976
|
|||
|
|
|
|
|||
Financing receivables and operating leases—net
|
74,490
|
75,906
|
||||
Property, equipment and other assets
|
11,704
|
8,644
|
||||
Goodwill and other intangible assets—net
|
|
61,690
|
54,154
|
|||
TOTAL ASSETS
|
$736,678
|
$616,680
|
||||
|
|
|
|
|||
LIABILITIES AND STOCKHOLDERS' EQUITY
|
||||||
LIABILITIES
|
||||||
Current liabilities:
|
|
|
|
|||
Accounts payable
|
|
$121,562
|
$76,780
|
|||
Accounts payable—floor plan
|
120,854
|
121,893
|
||||
Salaries and commissions payable
|
17,412
|
14,981
|
||||
Deferred revenue
|
|
63,665
|
18,344
|
|||
Recourse notes payable—current
|
1,605
|
2,288
|
||||
Non-recourse notes payable—current
|
|
41,785
|
26,042
|
|||
Other current liabilities
|
15,842
|
13,118
|
||||
Total current liabilities
|
|
382,725
|
273,446
|
|||
|
|
|
|
|||
Recourse notes payable—long term
|
-
|
1,054
|
||||
Non-recourse notes payable—long term
|
10,608
|
18,038
|
||||
Deferred tax liability—net
|
3,075
|
3,001
|
||||
Other liabilities
|
|
6,475
|
2,263
|
|||
TOTAL LIABILITIES
|
402,883
|
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 December 31, 2016 and 13,237 issued and 7,365 outstanding at March 31, 2016
|
133
|
132
|
||||
Additional paid-in capital
|
122,031
|
117,511
|
||||
Treasury stock, at cost, 6,230 and 5,872 shares, at December 31, 2016 and March 31, 2016, respectively
|
(158,948)
|
(129,518)
|
||||
Retained earnings
|
371,290
|
331,224
|
||||
Accumulated other comprehensive income—foreign currency translation adjustment
|
|
(711)
|
(471)
|
|||
Total Stockholders' Equity
|
333,795
|
318,878
|
||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
$736,678
|
$616,680
|
ePlus inc. AND SUBSIDIARIES
|
|
|
|
|
|
|
|
|||||||||||
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
|
||||||||||||||||||
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||||
December 31,
|
December 31,
|
|||||||||||||||||
2016
|
2015
|
2016
|
2015
|
|||||||||||||||
(in thousands, except per share data)
|
||||||||||||||||||
Net sales
|
$326,657
|
$298,644
|
|
$996,622
|
$904,796
|
|||||||||||||
Cost of sales
|
252,871
|
|
234,584
|
|
773,239
|
709,685
|
||||||||||||
Gross profit
|
73,786
|
64,060
|
223,383
|
195,111
|
||||||||||||||
|
|
|
|
|
||||||||||||||
Professional and other fees
|
1,397
|
|
1,882
|
|
4,918
|
4,913
|
||||||||||||
Salaries and benefits
|
42,385
|
|
37,372
|
|
124,479
|
108,326
|
||||||||||||
General and administrative expenses
|
6,378
|
|
5,434
|
|
20,424
|
17,390
|
||||||||||||
Depreciation and amortization
|
1,910
|
1,331
|
5,408
|
3,739
|
||||||||||||||
Interest and financing costs
|
409
|
|
396
|
|
1,158
|
1,371
|
||||||||||||
Operating expenses
|
52,479
|
|
46,415
|
|
156,387
|
135,739
|
||||||||||||
|
|
|
||||||||||||||||
OPERATING INCOME
|
21,307
|
|
17,645
|
|
66,996
|
59,372
|
||||||||||||
|
|
|
|
|||||||||||||||
Other income
|
-
|
|
-
|
|
380
|
-
|
||||||||||||
|
|
|
|
|||||||||||||||
EARNINGS BEFORE PROVISION FOR INCOME TAXES
|
21,307
|
|
17,645
|
|
67,376
|
|
59,372
|
|||||||||||
|
|
|
|
|||||||||||||||
PROVISION FOR INCOME TAXES
|
8,687
|
|
7,348
|
|
27,310
|
24,582
|
||||||||||||
|
|
|
|
|||||||||||||||
NET EARNINGS
|
$12,620
|
|
$10,297
|
|
$40,066
|
$34,790
|
||||||||||||
|
|
|
|
|||||||||||||||
NET EARNINGS PER COMMON SHARE—BASIC
|
$1.83
|
|
$1.41
|
|
$5.77
|
$4.79
|
||||||||||||
NET EARNINGS PER COMMON SHARE—DILUTED
|
$1.81
|
|
$1.40
|
|
$5.71
|
$4.74
|
||||||||||||
|
|
|
|
|||||||||||||||
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING—
|
||||||||||||||||||
BASIC
|
6,896
|
|
7,280
|
|
6,946
|
7,260
|
||||||||||||
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING—
|
||||||||||||||||||
DILUTED
|
6,960
|
|
7,329
|
|
7,013
|
7,336
|
ePlus inc. AND SUBSIDIARIES
|
|
|
|
|
|
|
|
RECONCILIATION OF NON-GAAP INFORMATION
|
|
|
|
|
|
|
|
Three Months Ended December 31,
|
Nine Months Ended December 31,
|
||||||
|
2016
|
2015
|
2016
|
2015
|
|||
(in thousands)
|
|||||||
GAAP: Sales of product and services
|
$317,391
|
|
$287,859
|
|
$968,799
|
|
$871,814
|
Plus: Costs incurred related to sales of
third party software assurance,
maintenance and services
|
115,016
|
106,063
|
|
348,389
|
|
285,513
|
|
Non-GAAP adjusted gross billings of
product and services
|
$432,407
|
$393,922
|
|
$1,317,188
|
|
$1,157,327
|
Three Months Ended December 31,
|
Nine Months Ended December 31,
|
||||||||||||||
|
2016
|
2015
|
2016
|
2015
|
|||||||||||
(in thousands)
|
|||||||||||||||
GAAP: Net earnings
|
$12,620
|
$10,297
|
|
$40,066
|
|
$34,790
|
|||||||||
Plus: Provision for income taxes
|
8,687
|
7,348
|
|
27,310
|
|
24,582
|
|||||||||
Plus: Depreciation and amortization [1]
|
1,910
|
1,331
|
|
5,408
|
|
3,739
|
|||||||||
Less: Other income [2]
|
-
|
-
|
|
(380)
|
|
-
|
|||||||||
Non-GAAP: Adjusted EBITDA
|
$23,217
|
$18,976
|
|
$72,404
|
|
$63,111
|
|||||||||
Three Months Ended December 31,
|
Nine Months Ended December 31,
|
||||||||||||||
|
2016
|
2015
|
2016
|
2015
|
|||||||||||
(in thousands)
|
|||||||||||||||
Technology Segment
|
|||||||||||||||
Operating income
|
$16,889
|
$14,671
|
|
$56,003
|
|
$50,345
|
|||||||||
Plus: Depreciation and amortization [1]
|
1,908
|
1,327
|
|
5,400
|
|
3,728
|
|||||||||
Adjusted EBITDA
|
$18,797
|
$15,998
|
|
$61,403
|
|
$54,073
|
|||||||||
Financing Segment
|
|||||||||||||||
Operating income
|
$4,418
|
$2,974
|
|
$10,993
|
|
$9,027
|
|||||||||
Plus: Depreciation and amortization [1]
|
2
|
4
|
|
8
|
|
11
|
|||||||||
Adjusted EBITDA
|
$4,420
|
$2,978
|
|
$11,001
|
|
$9,038
|
|||||||||
Three Months Ended December 31,
|
Nine Months Ended December 31,
|
||||||||||||||
2016
|
2015
|
2016
|
2015
|
||||||||||||
(in thousands, except per share data)
|
|||||||||||||||
GAAP: Earnings before provision for income taxes
|
$21,307
|
|
$17,645
|
|
$67,376
|
|
$59,372
|
||||||||
Plus: Acquisition related amortization expense [3]
|
1,035
|
680
|
3,098
|
1,793
|
|||||||||||
Less: Other income [2]
|
-
|
-
|
(380)
|
-
|
|||||||||||
Non-GAAP: Earnings before provision for income taxes
|
22,342
|
18,325
|
70,094
|
61,165
|
|||||||||||
Non-GAAP: Provision for income taxes [4]
|
9,048
|
7,631
|
28,711
|
25,325
|
|||||||||||
Non-GAAP: Net earnings
|
$13,294
|
$10,694
|
$41,383
|
$35,840
|
|||||||||||
GAAP net earnings per common share – diluted
|
$1.81
|
|
$1.40
|
|
$5.71
|
$4.74
|
|||||||||
Non-GAAP net earnings per common share – diluted
|
$1.91
|
$1.46
|
$5.90
|
$4.89
|
[1] Amount consists of depreciation and amortization for assets used internally.
|
[2] Gain on a class action claim during the nine months ended December 31, 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 nine months ended December 31, 2016 excludes the tax benefit of $6 thousand and $514 thousand, respectively, associated with adopting the stock-based compensation accounting standard.
|