Second Quarter Net Sales Growth of
19%
Builds on Strong First Quarter
Performance-
HERNDON,
Va., Nov. 7, 2023 /PRNewswire/ --
Second Quarter Fiscal Year 2024
- Net sales increased 19.0% to $587.6
million from last year's quarter; technology business net
sales increased 21.3% to $571.9
million; professional services and managed services revenues
increased 9.0% to $71.0 million.
- Technology business gross billings increased 7.4% to
$856.5 million.
- Consolidated gross profit increased 8.3% to $144.4 million.
- Consolidated gross margin was 24.6%, compared with 27.0% last
year.
- Net earnings increased 14.7% to $32.7
million.
- Adjusted EBITDA increased 6.5% to $53.6
million.
- Diluted earnings per share increased 14.0% to $1.22. Non-GAAP diluted earnings per share
increased 8.5% to $1.40.
First Half Fiscal Year 2024
- Net sales increased 22.0% to $1,161.8
million; technology business net sales increased 23.6% to
$1,137.6 million; professional
services and managed services revenues increased 8.0% to
$138.5 million.
- Technology business gross billings increased 12.2% to
$1,698.5 million.
- Consolidated gross profit increased 16.1% to $286.6 million.
- Consolidated gross margin was 24.7%, compared with 25.9% last
year.
- Net earnings increased 30.9% to $66.5
million.
- Adjusted EBITDA increased 21.3% to $107.4 million.
- Diluted earnings per share increased 30.4% to $2.49. Non-GAAP diluted earnings per share
increased 23.2% to $2.81.
ePlus inc. (NASDAQ: PLUS), a leading provider of
technology and financing solutions, today announced financial
results for the three months and six months ended September 30, 2023.
Management Comment
"Our second quarter financial results underscore the advantages
of our diversified solutions and end markets," said Mark Marron, president and CEO of ePlus. "Net
sales improved 19%, driven by growth in most customer segments and
key verticals along with solid growth in networking, collaboration
and managed services. We continued to see supply chain and
lead times improve throughout the quarter, reducing our open orders
and inventory levels. We achieved significant margin
improvement in managed services, with gross margin in this business
expanding 460 basis points, driven by enhanced scale and greater
operating efficiency. A significant improvement in sales of
networking equipment reduced the proportion of revenue recorded on
a net basis which drove down gross margin in the product segment.
Diluted earnings per share increased 14% to $1.22, marking our fourth consecutive quarter of
double-digit EPS growth compared to the prior year periods.
Mr. Marron continued, "We continued to expand our capabilities
to achieve successful business outcomes for our customers. As
our customers' IT needs evolve in a dynamic and complex market,
ePlus remains a trusted partner backed by our unwavering commitment
to innovation and our diverse network of more than 1,500 vendor
partnerships."
Second Quarter Fiscal Year 2024 Results
For the second quarter ended September
30, 2023, as compared to the second quarter ended
September 30, 2022:
Consolidated net sales increased 19.0% to $587.6 million, from $493.7 million.
Technology business net sales increased 21.3% to $571.9 million, from $471.5 million primarily due to higher sales of
product and managed services. Technology business gross billings
increased 7.4% to $856.5 million from
$797.7 million.
Product sales grew 23.3% to $500.9
million due to an increase in product availability, customer
demand, as well as the acquisition of Network Solutions Group
(NSG), a division of CCI Systems, Inc. on April 30, 2023. Product margin was 20.9%, down
from 23.2% last year due to lower proportion of third-party
maintenance and services sold in the current quarter which are
recorded on a net basis.
Professional service revenues had a slight increase from last
year to $38.3 million. Gross
margins increased to 41.3% from 38.6% last year due to the change
in mix between project services and staff augmentation.
Managed service revenues increased 20.7% to $32.7 million due to ongoing growth in these
offerings, including Enhanced Maintenance Support, Service Desk,
and Security Operations Center services. Gross profit from managed
services increased 41.8% from last year due to the scaled growth in
these services resulting in a 460-bps gross margin
improvement.
Financing business segment net sales decreased 29.5% to
$15.7 million, from $22.2 million due to decreases in post-contract
earnings and transactional gains. Gross profit in the financing
business segment was lower by $3.4
million due to the decline in net sales.
Consolidated gross profit increased 8.3% to $144.4 million, from $133.3 million. Consolidated gross margin was
24.6%, compared with last year of 27.0%.
Operating expenses were $99.5
million, up 11.6% from $89.2
million last year, primarily due to increases in salaries
and benefits from additional headcount, as well as increases in
acquisition-related depreciation and amortization expenses.
Our headcount at the end of the quarter was 1,877, up 148 from a
year ago, partially due to the NSG acquisition. Of the 148
additional employees, 118 were customer facing employees.
Consolidated operating income increased 1.7% to $44.9 million; however, earnings before tax
increased 11.8% to $45.0 million as
last year's foreign exchange losses did not replicate.
Our effective tax rate for the current quarter was 27.4%, lower
than the prior year quarter of 29.3%, due to lower state and local
income taxes and non-deductible executive compensation.
Net earnings increased 14.7% to $32.7
million.
Adjusted EBITDA in the technology business rose 17.1% and
declined 26.2% in the financing business segment, and when
combined, resulted in an increase of 6.5% to $53.6 million.
Diluted earnings per share was $1.22, compared with $1.07 in the prior year quarter. Non-GAAP diluted
earnings per share was $1.40,
compared with $1.29 last
year.
First Half Fiscal Year 2024 Results
For the six months ended September 30,
2023, as compared to the six months ended September 30, 2022:
Consolidated net sales increased 22.0% to $1,161.8 million, from $952.1 million.
Technology business net sales increased 23.6% to $1,137.6 million, from $920.3 million due to higher sales of product and
managed services, offset by a decline in professional services.
Technology business gross billings increased 12.2% to $1,698.5 million from $1,514.0 million.
Product sales grew 26.2% to $999.1
million due to an increase in customer demand, as well as
the acquisition of NSG on April 30,
2023. Gross profit from sales of product increased
21.7% to $216.1 million due to higher
sales combined with a shift in customer mix that resulted in higher
margins.
Professional service revenues declined 1.9% due to lower staff
augmentation services from softer demand. Gross margins
increased due to the change in mix between project services and
staff augmentation.
Managed service revenues increased 21.9% to $64.7 million due to ongoing growth in these
offerings, including Enhanced Maintenance Support, Security
Operations Center, and Service Desk services. Gross profit from
managed services increased 36.8% to $20.0
million due to the scaled growth in these services combined
with a 330-bps improvement in gross margin.
Financing business segment net sales decreased 24.0% to
$24.2 million, from $31.8 million and gross profit declined
$4.9 million due to lower
post-contract earnings and transactional gains.
Consolidated gross profit increased 16.1% to $286.6 million, from $246.8 million. Consolidated gross margin was
24.7%, compared with last year of 25.9% last year, as higher
service margins were offset by lower product margins and lower
gross profit in the financing business segment.
Operating expenses were $195.4
million, up 15.3% from $169.5
million last year, primarily due to increases in salaries
and benefits as a result of additional organic and
acquisition-related headcount of 148, variable compensation
stemming from higher gross profit, and acquisition related
amortization and expenses.
Consolidated operating income increased 18.0% to $91.2 million. Earnings before tax increased
28.4% to $91.5 million.
Our effective tax rate for the current year period was 27.3%,
lower than last year's 28.7%, due to lower state effective tax
rates and less non-deductible executive compensation in the current
period.
Net earnings increased 30.9% to $66.5
million.
Adjusted EBITDA increased 21.3% to $107.4
million.
Diluted earnings per share was $2.49, compared with $1.91 in the prior year. Non-GAAP diluted
earnings per share was $2.81,
compared with $2.28 last year.
Balance Sheet Highlights
As of September 30, 2023, ePlus
had cash and cash equivalents of $82.5
million, compared with $103.1
million as of March 31, 2023,
primarily due to working capital needs, the acquisition of NSG and
the repurchases of our common stock. Inventory decreased 8.7%
to $222.1 million compared with
$243.3 million as of March 31, 2023. Accounts receivable—trade,
net increased 28.9% to $650.0 million
from March 31, 2023 due to an
increase in gross billings. Total stockholders' equity was
$845.7 million, compared with
$782.3 million as of March 31, 2023. Total shares outstanding
were 26.9 million on both September 30,
2023 and March 31, 2023.
Fiscal Year Guidance
ePlus is maintaining fiscal year 2024 revenue guidance of
$2.23 billion to $2.33 billion, and an adjusted EBITDA range of
$200 million to $215 million, representing a margin of 9.0% to
9.2%. This guidance assumes, in part, continued improvement in the
supply chain that will enable previously delayed customer
projects. The Company cannot predict with reasonable
certainty and without unreasonable effort, the ultimate outcome of
unusual gains and losses, the occurrence of matters creating GAAP
tax impacts, fluctuations in interest expense and share-based
compensation, and acquisition-related expenses. These items are
uncertain, depend on various factors, and could be material to the
Company's results computed in accordance with GAAP.
Accordingly, the Company is unable to provide a reconciliation of
GAAP net earnings to adjusted EBITDA and adjusted EBITDA margin for
the full year 2024 forecast.
Summary and Outlook
"Despite an uncertain macroeconomic environment, ePlus generated
strong financial results through the first half of this fiscal
year. Our performance reflects the continued successful
execution of our strategy, which targets higher-growth focus areas
with a comprehensive portfolio of solutions and value-added
services.
Mr. Marron concluded, "As we look toward the second half of our
fiscal 2024, we anticipate that our customers are likely to remain
disciplined in their IT spending, prioritizing mission-critical and
cybersecurity-focused projects, with a new focus on AI, which is
becoming a strategic focus for us. We believe ePlus remains
well-positioned in this environment, underpinned by the
capabilities of our talented team and our range of innovative
solutions that align with our customers' needs."
Recent Corporate Developments/Recognitions
In the month of October:
- Launched its proprietary Compromise Nothing security program to
facilitate customers' business resilience.
In the month of August:
- Achieved five new Cisco Powered Service Designations.
- Named NetApp's North America FlexPod Partner of the Year.
- Achieved VMware Cross-Cloud Managed Service Provider
Designation.
Conference Call Information
ePlus will hold a conference call and webcast at 4:30 p.m. ET on November
7, 2023:
Audio Webcast (Live
& Replay):
|
https://events.q4inc.com/attendee/611599109
|
|
|
Live Call:
|
(888) 330-2469
(toll-free/domestic)
|
|
(240) 789-2740
(international)
|
|
|
Archived Call:
|
(800) 770-2030
(toll-free/domestic)
|
|
(647) 362-9199
(international)
|
|
|
Passcode:
|
5403833 (live call and
replay)
|
A replay of the call will be available approximately two hours
after the call through November 14,
2023. A transcript of the call will also be available on the
ePlus Investor Relations website at
https://www.eplus.com/investors.
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, networking, collaboration and emerging solutions,
to organizations across all industry segments. With complete
lifecycle management services and flexible payment solutions,
ePlus' more than 1,850 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 offices 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," including, among
other things, statements regarding the future financial performance
of ePlus (including the guidance for the full year FY
2024). Actual and anticipated future results may vary
materially due to certain risks and uncertainties, including,
without limitation, significant adverse changes in, reductions in,
or loss of one or more of our larger volume customers or vendors;
supply chain issues, including a shortage of Information Technology
("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; maintaining and increasing advanced professional services
by recruiting and retaining highly skilled, competent personnel,
and vendor certifications; 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; ongoing remote work trends, and the increase
in cybersecurity attacks that have occurred while employees work
remotely; 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; reliance on third-parties to
perform some of our service obligations to our 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 possibility of
a reduction of vendor incentives provided to us; our ability to
remain secure during a cybersecurity attack, including both
disruptions in our or our vendors' IT systems and data and audio
communication networks; our ability to identify acquisition
candidates, or perform sufficient due diligence prior to completing
an acquisition, or failure to integrate a completed acquisition may
affect our earnings; 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, including increases in our
costs and our ability to increase prices to our customers which may
result in adverse changes in our gross profit; significant and
rapid inflation may cause price, wage, and interest rate increases,
as well as increases in operating costs that may impact the
arrangements that have pricing commitments over the term of the
agreement; a possible decrease in the capital spending budgets of
our customers or a decrease in purchases from 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 ability to implement
comprehensive plans for the integration of sales forces, cost
containment, asset rationalization, systems integration, and other
key strategies; and other risks or uncertainties detailed in our
reports filed with the Securities and Exchange Commission.
All information set forth in this press release is current as of
the date of this release and ePlus undertakes no duty or obligation
to update this information.
ePlus
inc. AND SUBSIDIARIES
|
|
|
|
|
UNAUDITED
CONSOLIDATED BALANCE SHEETS
|
|
|
|
|
(in thousands,
except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
September 30,
2023
|
|
March 31,
2023
|
ASSETS
|
|
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
|
$82,498
|
|
$103,093
|
Accounts
receivable—trade, net
|
|
650,017
|
|
504,122
|
Accounts
receivable—other, net
|
|
73,264
|
|
55,508
|
Inventories
|
|
222,122
|
|
243,286
|
Financing
receivables—net, current
|
|
136,294
|
|
89,829
|
Deferred
costs
|
|
44,258
|
|
44,191
|
Other current
assets
|
|
60,775
|
|
55,101
|
Total current
assets
|
|
1,269,228
|
|
1,095,130
|
|
|
|
|
|
Financing receivables
and operating leases—net
|
|
68,582
|
|
84,417
|
Deferred tax
asset
|
|
3,682
|
|
3,682
|
Property, equipment and
other assets
|
|
72,153
|
|
70,447
|
Goodwill
|
|
158,199
|
|
136,105
|
Other intangible
assets—net
|
|
46,942
|
|
25,045
|
TOTAL ASSETS
|
|
$1,618,786
|
|
$1,414,826
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts
payable
|
|
$295,855
|
|
$220,159
|
Accounts payable—floor
plan
|
|
168,601
|
|
134,615
|
Salaries and
commissions payable
|
|
38,607
|
|
37,336
|
Deferred
revenue
|
|
118,910
|
|
114,028
|
Recourse notes
payable—current
|
|
2,016
|
|
5,997
|
Non-recourse notes
payable—current
|
|
41,824
|
|
24,819
|
Other current
liabilities
|
|
34,555
|
|
24,372
|
Total current
liabilities
|
|
700,368
|
|
561,326
|
|
|
|
|
|
Non-recourse notes
payable—long-term
|
|
9,717
|
|
9,522
|
Deferred tax
liability
|
|
721
|
|
715
|
Other
liabilities
|
|
62,284
|
|
60,998
|
TOTAL
LIABILITIES
|
|
773,090
|
|
632,561
|
|
|
|
|
|
COMMITMENTS AND
CONTINGENCIES
|
|
|
|
|
|
|
|
|
|
STOCKHOLDERS'
EQUITY
|
|
|
|
|
Preferred stock, $0.01
per share par value; 2,000 shares
authorized; none outstanding
|
|
-
|
|
-
|
Common stock, $0.01 per
share par value; 50,000 shares
authorized; 26,942 outstanding at
September 30, 2023 and
26,905 outstanding at March 31,
2023
|
|
274
|
|
272
|
Additional paid-in
capital
|
|
173,318
|
|
167,303
|
Treasury stock, at
cost, 424 shares at September 30, 2023 and
|
|
|
|
|
261 shares at March 31, 2023
|
|
(22,375)
|
|
(14,080)
|
Retained
earnings
|
|
693,713
|
|
627,202
|
Accumulated other
comprehensive income—foreign currency
|
|
|
|
|
translation adjustment
|
|
766
|
|
1,568
|
Total Stockholders'
Equity
|
|
845,696
|
|
782,265
|
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
$1,618,786
|
|
$1,414,826
|
ePlus
inc. AND SUBSIDIARIES
|
UNAUDITED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
(in thousands,
except per share amounts)
|
|
|
Three Months Ended
September 30,
|
|
Six Months Ended
September 30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
|
|
|
|
|
|
|
Net sales
|
|
|
|
|
|
|
|
Product
|
$516,609
|
|
$428,545
|
|
$1,023,265
|
|
$823,795
|
Services
|
71,002
|
|
65,161
|
|
138,521
|
|
128,270
|
Total
|
587,611
|
|
493,706
|
|
1,161,786
|
|
952,065
|
|
|
|
|
|
|
|
|
Cost of
sales
|
|
|
|
|
|
|
|
Product
|
398,234
|
|
317,127
|
|
787,138
|
|
621,337
|
Services
|
45,012
|
|
43,275
|
|
88,010
|
|
83,901
|
Total
|
443,246
|
|
360,402
|
|
875,148
|
|
705,238
|
|
|
|
|
|
|
|
|
Gross profit
|
144,365
|
|
133,304
|
|
286,638
|
|
246,827
|
|
|
|
|
|
|
|
|
Selling, general, and
administrative
|
92,652
|
|
84,704
|
|
182,950
|
|
161,471
|
Depreciation and
amortization
|
5,630
|
|
3,568
|
|
10,422
|
|
6,778
|
Interest and financing
costs
|
1,220
|
|
925
|
|
2,071
|
|
1,288
|
Operating
expenses
|
99,502
|
|
89,197
|
|
195,443
|
|
169,537
|
|
|
|
|
|
|
|
|
Operating
income
|
44,863
|
|
44,107
|
|
91,195
|
|
77,290
|
|
|
|
|
|
|
|
|
Other income (expense),
net
|
117
|
|
(3,866)
|
|
307
|
|
(6,019)
|
|
|
|
|
|
|
|
|
Earnings before
taxes
|
44,980
|
|
40,241
|
|
91,502
|
|
71,271
|
|
|
|
|
|
|
|
|
Provision for income
taxes
|
12,316
|
|
11,772
|
|
24,991
|
|
20,463
|
|
|
|
|
|
|
|
|
Net earnings
|
$32,664
|
|
$28,469
|
|
$66,511
|
|
$50,808
|
|
|
|
|
|
|
|
|
Net earnings per common
share—basic
|
$1.23
|
|
$1.07
|
|
$2.50
|
|
$1.91
|
Net earnings per common
share—diluted
|
$1.22
|
|
$1.07
|
|
$2.49
|
|
$1.91
|
|
|
|
|
|
|
|
|
Weighted average common
shares outstanding—basic
|
26,624
|
|
26,578
|
|
26,588
|
|
26,546
|
Weighted average common
shares outstanding—diluted
|
26,679
|
|
26,623
|
|
26,659
|
|
26,671
|
Technology
Business
|
|
Three Months Ended
September 30,
|
|
|
|
Six Months Ended
September 30,
|
|
|
|
2023
|
|
2022
|
|
Change
|
|
2023
|
|
2022
|
|
Change
|
|
(in
thousands)
|
|
|
|
(in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
|
|
|
|
|
|
|
|
|
|
Product
|
$500,937
|
|
$406,317
|
|
23.3 %
|
|
$999,103
|
|
$791,993
|
|
26.2 %
|
Professional services
|
38,270
|
|
38,050
|
|
0.6 %
|
|
73,826
|
|
75,218
|
|
(1.9 %)
|
Managed services
|
32,732
|
|
27,111
|
|
20.7 %
|
|
64,695
|
|
53,052
|
|
21.9 %
|
Total
|
571,939
|
|
471,478
|
|
21.3 %
|
|
1,137,624
|
|
920,263
|
|
23.6 %
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
|
|
|
|
|
|
|
|
|
|
Product
|
104,749
|
|
94,389
|
|
11.0 %
|
|
216,140
|
|
177,557
|
|
21.7 %
|
Professional
services
|
15,796
|
|
14,697
|
|
7.5 %
|
|
30,520
|
|
29,752
|
|
2.6 %
|
Managed services
|
10,194
|
|
7,189
|
|
41.8 %
|
|
19,991
|
|
14,617
|
|
36.8 %
|
Total
|
130,739
|
|
116,275
|
|
12.4 %
|
|
266,651
|
|
221,926
|
|
20.2 %
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general, and
administrative
|
88,593
|
|
80,161
|
|
10.5 %
|
|
175,693
|
|
153,273
|
|
14.6 %
|
Depreciation and
amortization
|
5,602
|
|
3,540
|
|
58.2 %
|
|
10,366
|
|
6,722
|
|
54.2 %
|
Interest and financing
costs
|
661
|
|
671
|
|
(1.5 %)
|
|
1,211
|
|
809
|
|
49.7 %
|
Operating
expenses
|
94,856
|
|
84,372
|
|
12.4 %
|
|
187,270
|
|
160,804
|
|
16.5 %
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
income
|
$35,883
|
|
$31,903
|
|
12.5 %
|
|
$79,381
|
|
$61,122
|
|
29.9 %
|
Gross
billings
|
$856,495
|
|
$797,697
|
|
7.4 %
|
|
$1,698,465
|
|
$1,513,960
|
|
12.2 %
|
Adjusted
EBITDA
|
$44,496
|
|
$38,012
|
|
17.1 %
|
|
$95,445
|
|
$72,266
|
|
32.1 %
|
|
Technology Business
Gross Billings by Type
|
|
Three Months Ended
September 30,
|
|
|
|
Six Months Ended
September 30,
|
|
|
|
2023
|
|
2022
|
|
Change
|
|
2023
|
|
2022
|
|
Change
|
|
(in
thousands)
|
|
|
|
(in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cloud
|
$200,637
|
|
$220,279
|
|
(8.9 %)
|
|
$459,561
|
|
$473,616
|
|
(3.0 %)
|
Networking
|
311,671
|
|
196,426
|
|
58.7 %
|
|
588,316
|
|
362,052
|
|
62.5 %
|
Security
|
143,340
|
|
170,026
|
|
(15.7 %)
|
|
290,683
|
|
315,375
|
|
(7.8 %)
|
Collaboration
|
51,770
|
|
38,099
|
|
35.9 %
|
|
73,931
|
|
72,874
|
|
1.5 %
|
Other
|
78,571
|
|
95,791
|
|
(18.0 %)
|
|
148,332
|
|
144,800
|
|
2.4 %
|
Product gross
billings
|
785,989
|
|
720,621
|
|
9.1 %
|
|
1,560,823
|
|
1,368,717
|
|
14.0 %
|
Service gross
billings
|
70,506
|
|
77,076
|
|
(8.5 %)
|
|
137,642
|
|
145,243
|
|
(5.2 %)
|
Total gross
billings
|
$856,495
|
|
$797,697
|
|
7.4 %
|
|
$1,698,465
|
|
$1,513,960
|
|
12.2 %
|
Technology Business Net
Sales by Type
|
|
Three Months Ended
September 30,
|
|
|
|
Six Months Ended
September 30,
|
|
|
|
2023
|
|
2022
|
|
Change
|
|
2023
|
|
2022
|
|
Change
|
|
(in
thousands)
|
|
|
|
(in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cloud
|
$135,068
|
|
$148,992
|
|
(9.3 %)
|
|
$307,112
|
|
$313,725
|
|
(2.1 %)
|
Networking
|
268,636
|
|
165,896
|
|
61.9 %
|
|
513,824
|
|
308,537
|
|
66.5 %
|
Security
|
51,886
|
|
48,517
|
|
6.9 %
|
|
97,682
|
|
96,512
|
|
1.2 %
|
Collaboration
|
27,083
|
|
19,187
|
|
41.2 %
|
|
40,039
|
|
32,167
|
|
24.5 %
|
Other
|
18,264
|
|
23,725
|
|
(23.0 %)
|
|
40,446
|
|
41,052
|
|
(1.5 %)
|
Total
product
|
500,937
|
|
406,317
|
|
23.3 %
|
|
999,103
|
|
791,993
|
|
26.2 %
|
Professional
services
|
38,270
|
|
38,050
|
|
0.6 %
|
|
73,826
|
|
75,218
|
|
(1.9 %)
|
Managed
services
|
32,732
|
|
27,111
|
|
20.7 %
|
|
64,695
|
|
53,052
|
|
21.9 %
|
Total net
sales
|
$571,939
|
|
$471,478
|
|
21.3 %
|
|
$1,137,624
|
|
$920,263
|
|
23.6 %
|
Technology Business Net Sales by Customer End Market
|
|
Three Months Ended
September 30,
|
|
|
|
Six Months Ended
September 30,
|
|
|
|
2023
|
|
2022
|
|
Change
|
|
2023
|
|
2022
|
|
Change
|
|
(in
thousands)
|
|
|
|
(in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Telecom, Media, &
Entertainment
|
$124,306
|
|
$118,454
|
|
4.9 %
|
|
$265,641
|
|
$246,731
|
|
7.7 %
|
Technology
|
110,948
|
|
96,160
|
|
15.4 %
|
|
184,351
|
|
166,021
|
|
11.0 %
|
SLED
|
94,906
|
|
70,491
|
|
34.6 %
|
|
204,311
|
|
135,092
|
|
51.2 %
|
Healthcare
|
72,022
|
|
66,959
|
|
7.6 %
|
|
158,678
|
|
135,471
|
|
17.1 %
|
Financial
Services
|
69,885
|
|
37,611
|
|
85.8 %
|
|
135,575
|
|
70,910
|
|
91.2 %
|
All other
|
99,872
|
|
81,803
|
|
22.1 %
|
|
189,068
|
|
166,038
|
|
13.9 %
|
Total net
sales
|
$571,939
|
|
$471,478
|
|
21.3 %
|
|
$1,137,624
|
|
$920,263
|
|
23.6 %
|
|
Financing Business
Segment
|
|
Three Months Ended
September 30,
|
|
|
|
Six Months Ended
September 30,
|
|
|
|
2023
|
|
2022
|
|
Change
|
|
2023
|
|
2022
|
|
Change
|
|
(in
thousands)
|
|
|
|
(in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Portfolio
earnings
|
$3,339
|
|
$2,888
|
|
15.6 %
|
|
$6,412
|
|
$5,561
|
|
15.3 %
|
Transactional
gains
|
6,949
|
|
8,109
|
|
(14.3 %)
|
|
8,228
|
|
9,944
|
|
(17.3 %)
|
Post-contract
earnings
|
5,038
|
|
10,519
|
|
(52.1 %)
|
|
8,672
|
|
15,245
|
|
(43.1 %)
|
Other
|
346
|
|
712
|
|
(51.4 %)
|
|
850
|
|
1,052
|
|
(19.2 %)
|
Net
sales
|
15,672
|
|
22,228
|
|
(29.5 %)
|
|
24,162
|
|
31,802
|
|
(24.0 %)
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
13,626
|
|
17,029
|
|
(20.0 %)
|
|
19,987
|
|
24,901
|
|
(19.7 %)
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general, and
administrative
|
4,059
|
|
4,543
|
|
(10.7 %)
|
|
7,257
|
|
8,198
|
|
(11.5 %)
|
Depreciation and
amortization
|
28
|
|
28
|
|
0.0 %
|
|
56
|
|
56
|
|
0.0 %
|
Interest and financing
costs
|
559
|
|
254
|
|
120.1 %
|
|
860
|
|
479
|
|
79.5 %
|
Operating
expenses
|
4,646
|
|
4,825
|
|
(3.7 %)
|
|
8,173
|
|
8,733
|
|
(6.4 %)
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
income
|
$8,980
|
|
$12,204
|
|
(26.4 %)
|
|
$11,814
|
|
$16,168
|
|
(26.9 %)
|
Adjusted
EBITDA
|
$9,072
|
|
$12,292
|
|
(26.2 %)
|
|
$12,002
|
|
$16,342
|
|
(26.6 %)
|
ePlus inc. AND
SUBSIDIARIES
RECONCILIATION OF NON-GAAP
INFORMATION
We included reconciliations below for the following non-GAAP
financial measures: (i) Adjusted EBITDA, (ii) Adjusted EBITDA for
business segments, (iii) non-GAAP Net Earnings and (iv) non-GAAP
Net Earnings per Common Share - Diluted.
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 expenses, provision for income taxes,
and other income. Adjusted EBITDA presented for the technology
business segments and the financing business segment 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 business
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
GAAP, adjusted to exclude other income (expense), share based
compensation, and acquisition related amortization expense, and the
related tax effects.
We use the above non-GAAP financial measures as supplemental
measures of our performance to gain insight into our operating
performance and performance trends. We believe that such non-GAAP
financial measures provide management and investors a useful
measure for period-to-period comparisons of our business and
operating results by excluding items that management believes are
not reflective of our underlying operating performance.
Accordingly, we believe that such non-GAAP financial measures
provide useful information to investors and others in understanding
and evaluating our operating results.
Our use of non-GAAP information as analytical tools has
limitations, and you should not consider them in isolation or as
substitutes for analysis of our financial results as reported under
GAAP. In addition, other companies, including companies in our
industry, might calculate adjusted EBITDA, non-GAAP net earnings
and non-GAAP net earnings per common share or similarly titled
measures differently, which may reduce their usefulness as
comparative measures.
|
Three Months Ended
September 30,
|
|
Six Months Ended
September 30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
(in
thousands)
|
Consolidated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings
|
$32,664
|
|
$28,469
|
|
$66,511
|
|
$50,808
|
Provision for income
taxes
|
12,316
|
|
11,772
|
|
24,991
|
|
20,463
|
Depreciation and
amortization [1]
|
5,630
|
|
3,568
|
|
10,422
|
|
6,778
|
Share based
compensation
|
2,414
|
|
1,958
|
|
4,619
|
|
3,731
|
Interest and financing
costs
|
661
|
|
671
|
|
1,211
|
|
809
|
Other expense, net
[2]
|
(117)
|
|
3,866
|
|
(307)
|
|
6,019
|
Adjusted
EBITDA
|
$53,568
|
|
$50,304
|
|
$107,447
|
|
$88,608
|
|
|
|
|
|
|
|
|
Technology Business
Segment
|
|
|
|
|
|
|
|
Operating
income
|
$35,883
|
|
$31,903
|
|
$79,381
|
|
$61,122
|
Depreciation and
amortization [1]
|
5,602
|
|
3,540
|
|
10,366
|
|
6,722
|
Share based
compensation
|
2,350
|
|
1,898
|
|
4,487
|
|
3,613
|
Interest and financing
costs
|
661
|
|
671
|
|
1,211
|
|
809
|
Adjusted
EBITDA
|
$44,496
|
|
$38,012
|
|
$95,445
|
|
$72,266
|
|
|
|
|
|
|
|
|
Financing Business
Segment
|
|
|
|
|
|
|
|
Operating
income
|
$8,980
|
|
$12,204
|
|
$11,814
|
|
$16,168
|
Depreciation and
amortization [1]
|
28
|
|
28
|
|
56
|
|
56
|
Share based
compensation
|
64
|
|
60
|
|
132
|
|
118
|
Adjusted
EBITDA
|
$9,072
|
|
$12,292
|
|
$12,002
|
|
$16,342
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30,
|
|
Six Months Ended
September 30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
(in
thousands)
|
GAAP: Earnings before
taxes
|
$44,980
|
|
$40,241
|
|
$91,502
|
|
$71,271
|
Share based
compensation
|
2,414
|
|
1,958
|
|
4,619
|
|
3,731
|
Acquisition related
amortization expense [3]
|
4,023
|
|
2,494
|
|
7,492
|
|
4,677
|
Other (income) expense
[2]
|
(117)
|
|
3,866
|
|
(307)
|
|
6,019
|
Non-GAAP: Earnings
before provision for income taxes
|
51,300
|
|
48,559
|
|
103,306
|
|
85,698
|
|
|
|
|
|
|
|
|
GAAP: Provision for
income taxes
|
12,316
|
|
11,772
|
|
24,991
|
|
20,463
|
Share based
compensation
|
665
|
|
572
|
|
1,272
|
|
1,080
|
Acquisition related
amortization expense [3]
|
1,106
|
|
720
|
|
2,058
|
|
1,337
|
Other (income) expense,
net [2]
|
(32)
|
|
1,128
|
|
(84)
|
|
1,744
|
Tax benefit (expense)
on restricted stock
|
79
|
|
(29)
|
|
216
|
|
165
|
Non-GAAP: Provision for
income taxes
|
14,134
|
|
14,163
|
|
28,453
|
|
24,789
|
|
|
|
|
|
|
|
|
Non-GAAP: Net
earnings
|
$37,166
|
|
$34,396
|
|
$74,853
|
|
$60,909
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30,
|
|
Six Months Ended
September 30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
|
|
|
|
|
|
|
GAAP: Net earnings per
common share – diluted
|
$1.22
|
|
$1.07
|
|
$2.49
|
|
$1.91
|
|
|
|
|
|
|
|
|
Share based
compensation
|
0.07
|
|
0.05
|
|
0.13
|
|
0.09
|
Acquisition related
amortization expense [3]
|
0.11
|
|
0.07
|
|
0.20
|
|
0.13
|
Other (income) expense,
net [2]
|
-
|
|
0.10
|
|
-
|
|
0.16
|
Tax benefit (expense)
on restricted stock
|
-
|
|
-
|
|
(0.01)
|
|
(0.01)
|
Total non-GAAP
adjustments – net of tax
|
0.18
|
|
0.22
|
|
0.32
|
|
0.37
|
|
|
|
|
|
|
|
|
Non-GAAP: Net earnings
per common share – diluted
|
$1.40
|
|
$1.29
|
|
$2.81
|
|
$2.28
|
|
[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.