Eplus Inc 8-K, filed Nov 15, 2021
Eplus Inc (PLUS)
8-K
2021-11-15
For: 2021-11-09
View Original
Added on
April 12, 2026
About this 8-K
Eplus Inc filed this 8-K on November 15, 2021, reporting on events of November 9, 2021.
Items reported
- Item 2.02: Financial results
- Item 5.07: Shareholder vote results
- Item 8.01: Other events
- Item 9.01: Financial statements and exhibits
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) November 9, 2021
(Exact name of registrant as specified in its charter)
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(State or other jurisdiction of incorporation)
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(Commission File Number)
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(IRS Employer Identification No.)
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(Address of principal executive offices)
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(Zip Code)
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Registrant’s telephone number, including area code
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(
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Not Applicable
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(Former name or former address, if changed since last report.)
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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Securities registered pursuant to Section 12(b) of the Act:
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Title of each class
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Trading
Symbol(s)
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Name of each exchange
on which registered
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933
(§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
If an emerging growth company, indicate by check mark if the registrant has elected
not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
| Item 2.02 |
Results of Operations and Financial Condition.
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On November 9, 2021, ePlus inc. announced by press release its results of operations for its three and six months ended September 30, 2021. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
In accordance with General Instruction B.2 of Form 8-K, the information in Item 2.02 of this Current Report on Form 8-K and Exhibit 99.1
shall not be deemed to be "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, (the "Exchange Act"), or otherwise subject to the liabilities of that section, and shall not be incorporated by reference into any
registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
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Item 5.07
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Submission of Matters to a Vote of Security Holders.
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A Special Meeting of Shareholders of ePlus
inc. was held on November 9, 2021. There were present, in person or by proxy, holders of 12,669,654 shares of our common stock, or 93.79% of all shares of common stock eligible to be voted at the meeting. The final voting results on the sole
proposal is disclosed below.
Approval to amend the Company’s Amended and Restated Certificate of Incorporation to increase the number of authorized shares of common
stock (included as Annex A in the proxy statement). The proposal was approved by a vote of shareholders as follows:
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For:
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11,862,262
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Against:
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799,547
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Abstain:
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7,844
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Item 8.01
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Other Events.
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On November 9, 2021, ePlus inc. also announced in the same press release that the Board of Directors had approved a two-for-one stock
split in the form of a 100% stock dividend payable on December 13, 2021, to shareholders of record on November 29, 2021.
A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
| Item 9.01 |
Financial Statements and Exhibits.
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The following exhibits are filed as part of this report:
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Exhibit No.
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Description
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Certificate of Amendment to the ePlus inc. Amended and Restated Certificate of Incorporation (filed herewith)
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Press Release dated November 9, 2021 (filed herewith)
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104
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Cover Page Interactive Data File (embedded within the Inline XBRL document).
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
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Date: November 15, 2021
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ePlus inc.
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By:
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/s/ Elaine D. Marion
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Elaine D. Marion
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Chief Financial Officer
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Exhibit 3.1
STATE OF DELAWARE
CERTIFICATE OF AMENDMENT
OF CERTIFICATE OF INCORPORATION
CERTIFICATE OF AMENDMENT
OF CERTIFICATE OF INCORPORATION
The corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware does hereby certify:
FIRST: That at a meeting of the
Board of Directors of ePlus inc., resolutions were duly adopted setting forth a proposed amendment of the Certificate of Incorporation of said corporation, declaring said amendment to be advisable and calling a meeting of the stockholders of said
corporation for consideration thereof. The resolution setting forth the proposed amendment is as follows:
RESOLVED, that the Certificate of
Incorporation of this corporation be amended by changing the Article thereof numbered "FOURTH" so that, as amended, said Article shall be and read as follows:
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The total number of shares of all classes of stock which the Corporation shall have authority to issue is fifty-two million
(52,000,000) shares consisting of fifty 50 million (50,000,000) shares of common stock having a par value of $.01 per share (the “Common Stock”) and two million (2,000,000) shares of preferred stock having a par value of $.01 per share
(the “Preferred Stock”).
The Board of Directors of the Corporation is authorized, subject to limitations prescribed by law, to provide by resolution
or resolutions for the issuance of shares of the Preferred Stock as a class or in series, and, by filing a certificate of designations, pursuant to the Delaware General Corporation Law, setting forth a copy of such resolution or
resolutions to establish from time to time the number of shares to be included in each such series and to fix the designation, powers, preferences and rights of the shares of the class or of each such series and the qualifications,
limitations, and restrictions thereof. The authority of the Board of Directors with respect to the class or each series shall include, but not be limited to, determination of the following:
a) the number of shares constituting any series and the distinctive designation of that series;
b) the dividend rate of the shares of the class or of any series, whether dividends shall be cumulative, and if so, from which date or dates,
and the relative rights of priority, if any of payment of dividends on shares of the class or of that series;
c) whether the class or any series shall have voting rights, in addition to the voting rights provided by law, and if so, the terms of such
voting rights;
d) whether the class or any series shall have conversion privileges and, if so, the terms and conditions of conversion, including provision
for adjustment of the conversion rate in such events as the Board of Directors shall determine;
e) whether or not the shares of the class or of any series shall be redeemable, and, if so, the terms and conditions of such redemption,
including the date or date upon or after which they shall be redeemable and the amount per share payable in case of redemption, which amount may vary under different conditions and at different redemption rates;
f) whether the class or any series shall have a sinking fund for the redemption or purchase of shares of the class or of that series, and if
so, the terms and amount of such sinking fund;
g) the rights of the shares of the class or of any series in the event of voluntary or involuntary dissolution or winding up of the
Corporation, and the relative rights of priority, if any, of payment of shares of the class or of that series; and
h) any other powers, preferences, rights, qualifications, limitations and restrictions of the class or of that series.
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All rights accruing to the outstanding shares of the Corporation not expressly provided for to the contrary herein or in any certificate of
designation shall be vested exclusively in the Common Stock.
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SECOND: That thereafter, pursuant
to resolution of its Board of Directors, a special meeting of the stockholders of said corporation was duly called and held upon notice in accordance with Section 222 of the General Corporation Law of the State of Delaware at which meeting the
necessary number of shares as required by statute were voted in favor of the amendment.
THIRD: That said amendment was
duly adopted in accordance with the provisions of Section 242 of the General Corporation Law of the State of Delaware.
IN WITNESS WHEREOF, said
corporation has caused this certificate to be signed this 9th day of November 2021.
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By:
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/s/ Erica S. Stoecker |
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Authorized Officer Title:
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Corporate Secretary
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Name
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Erica S. Stoecker
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Exhibit 99.1
ePlus Reports Second Quarter and First Half Financial Results
and Announces 2-for-1 Stock Split
— Substantial Operating Leverage Drives Strong Earnings Growth —
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Second Quarter Fiscal Year 2022
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Net sales increased 5.8% to $458.0 million; technology segment net sales increased 4.0% to $436.3 million; service revenues increased 23.1% to $60.9
million.
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Adjusted gross billings increased 10.5% to $664.1 million.
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Consolidated gross profit increased 24.3% to $123.0 million.
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Consolidated gross margin was 26.9%, an increase of 400 basis points.
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Net earnings increased 58.3% to $31.4 million.
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Adjusted EBITDA increased 49.6% to $50.2 million.
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Diluted earnings per share increased 58.1% to $2.34. Non-GAAP diluted earnings per share increased 54.2% to $2.59.
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First Half Fiscal Year 2022
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Net sales increased 11.0% to $874.7 million; technology segment net sales increased 10.0% to $836.7 million; service revenues increased 19.8% to
$116.4 million.
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Adjusted gross billings increased 13.0% to $1,297.1 million.
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Consolidated gross profit increased 15.7% to $228.5 million.
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Consolidated gross margin was 26.1%, an increase of 100 basis points.
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Net earnings increased 47.6% to $54.9 million.
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Adjusted EBITDA increased 37.6% to $88.5 million.
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Diluted earnings per share increased 47.1% to $4.09. Non-GAAP diluted earnings per share increased 42.6% to $4.55.
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HERNDON, VA – November 9, 2021 – ePlus inc. (NASDAQ:
PLUS), a leading provider of technology and financing solutions, today announced financial results for the three and six months ended September 30, 2021.
“Building on our strong performance in the first quarter, ePlus generated strong financial results in the second quarter, underscoring the strength of our
business model and the continued success of our growth strategy,” said Mark Marron, president and chief executive officer. “Supported by the breadth of our solutions, extensive vendor partnerships and engineering talent, ePlus continues to meet the
evolving needs of our customers across the technology solutions stack, driving solid adjusted gross billings and revenue growth that fueled robust gains in both profitability and earnings.”
Mr. Marron continued, “Services remained one of the fastest-growing areas in our solutions portfolio, with second quarter revenue for this business
increasing more than 23% year-over-year. Our financing segment also contributed favorably to our results, as ePlus benefitted from several large transactions that generated strong growth in revenue and operating income. Overall, earnings per diluted
share for the quarter increased 58% year-over-year, reflecting growth and positive operating leverage. I am extremely proud of the entire ePlus team, who have continued to adapt successfully to support our customers with innovative and cost-effective
solutions in a dynamic market.”
ePlus Announces 2-for-1 Stock Split
The Company announced today that its Board of Directors has declared a two-for-one split of its Common Stock. The stock split will be in the form of a 100
percent stock dividend payable on December 13, 2021 to shareholders of record at the close of business on November 29, 2021. The Company expects its Common stock will begin trading at the split-adjusted price on December 14, 2021. All share and per
share amounts reflected herein are prior to the stock split.
Second Quarter Fiscal 2022 Results
For the second quarter ended September 30, 2021 as compared to the second quarter of the prior fiscal year ended September 30, 2020:
Consolidated net sales increased 5.8% to $458.0 million, from $433.1 million.
Technology segment net sales increased 4.0% to $436.3 million, from $419.4 million due to higher sales of product and services. Service revenues increased
23.1% to $60.9 million, from $49.4 million due to increases in professional services and managed services. Adjusted gross billings increased 10.5% to $664.1 million from $601.1 million.
Financing segment net sales increased 58.3% to $21.7 million, from $13.7 million due to higher transactional gains from several outsized transactions.
Consolidated gross profit increased 24.3% to $123.0 million, from $99.0 million. Consolidated gross margin was 26.9%, up from 22.9% last year, due to higher
product and services margins in our technology segment and a larger proportion of sales recorded on a net basis.
Operating expenses were $78.7 million, up 11.7% from $70.5 million last year, primarily due to increases in variable compensation stemming from higher gross
profit and higher software license and maintenance and travel expenses, partially offset by lower rent and communication expenses. Our headcount at the end of the quarter was 1,554, up 57 from a year ago.
Consolidated operating income increased 55.5% to $44.3 million.
Our effective tax rate for the current quarter was 28.6%, lower than the prior year quarter of 30.8%, due to an adjustment in the prior year related to the
federal benefit from state taxes.
Net earnings increased 58.3% to $31.4 million.
Adjusted EBITDA increased 49.6% to $50.2 million, from $33.6 million.
Diluted earnings per share was $2.34, compared with $1.48 in the prior year quarter. Non-GAAP diluted earnings per share was $2.59, compared with $1.68 last
year.
First Half Fiscal Year 2022 Results
For the six months ended September 30, 2021 as compared to the six months of the prior fiscal year ended September 30, 2020:
Consolidated net sales increased 11.0% to $874.7 million, from $788.1 million.
Technology segment net sales increased 10.0% to $836.7 million, from $760.6 million due to higher sales of product and services. Service revenues increased
19.8% to $116.4 million, from $97.2 million primarily due to increases in professional services and managed services. Adjusted gross billings was $1,297.1 million, an increase of 13.0% from $1,147.5 million.
Financing segment net sales increased 38.1% to $38.0 million, from $27.5 million, primarily due to higher transactional gains from several outsized
transactions.
Consolidated gross profit increased 15.7% to $228.5 million, from $197.5 million. Consolidated gross margin was 26.1%, up from 25.1% last year, due to higher
product and services margins and a higher proportion of sales recorded on a net basis in our technology segment.
Operating expenses were $151.8 million, up 5.4% from $144.0 million last year, primarily due to increases in variable compensation stemming from higher gross
profit and higher healthcare costs.
Consolidated operating income increased 43.5% to $76.8 million.
Our effective tax rate for the current year period was 28.2%, lower than last year of 30.8% due to an adjustment in the prior year related to the federal
benefit from state taxes.
Net earnings increased 47.6% to $54.9 million.
Adjusted EBITDA increased 37.6% to $88.5 million, from $64.3 million.
Diluted earnings per share was $4.09, compared with $2.78 in the prior year. Non-GAAP diluted earnings per share was $4.55, compared with $3.19 last year.
Balance Sheet Highlights
As of September 30, 2021, ePlus had cash and cash equivalents of $57.0 million, compared with $129.6 million as of March 31, 2021, due to additional working
capital needs in our technology segment and the repurchase of stock. Inventory, which represents equipment ordered by customers but not yet delivered, increased 92.3%. Total stockholders’ equity was $613.6 million, compared with $562.4 million as of
March 31, 2021. Total shares outstanding were 13.5 million on September 30, 2021 and March 31, 2021.
Summary and Outlook
“As we enter the second half of fiscal 2022, ePlus remains well-positioned for continued growth, with the products, services, financing, and expertise that
enable our customers to meet the challenges of digital transformation and modernization. Our data center, security and cloud-focused solutions remain especially timely and relevant as businesses further expand their remote and hybrid workforce
capabilities, while our investments in emerging areas, including collaboration and AI, provide new opportunities for growth,” Mr. Marron noted.
“Our confidence in our fiscal 2022 outlook is supported by the strength of our open orders and backlog, both of which have increased significantly during the
year. While we continue to closely monitor constraints within the supply chain that may limit future product availability, our team and our channel partners have performed admirably in navigating these challenges to date. As always, ePlus remains
committed to investing in our people and in our capabilities to stay on the forefront of technology trends.
“We are pleased to announce that the Board has declared a two-for-one stock split, reflecting confidence in the Company’s outlook and growth strategy,” Mr.
Marron concluded.
Recent Corporate Developments/Recognitions
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In the month of October:
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o
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Announced that its UK subsidiary, IGXGlobal, will provide managed detection and response security services to customers across Europe.
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Launched a suite of security services to help organizations address requirements relating to increasingly stringent cyber liability insurance
standards.
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o
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ePlus announced that its subsidiaries ePlus Technology, inc., ePlus Technology Services, inc. and SLAIT Consulting, LLC recently increased their
credit facility to $375 million.
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o
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Achieved Amazon Web Services (AWS) Networking Competency status for AWS Consulting Partners.
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In the month of September:
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Launched an artificial intelligence (AI) workflow technology bundle, combining hardware, software and AI implementation services, to help healthcare
organizations accelerate clinical operational AI projects from concept to production.
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Facilitated a large-scale IT infrastructure deployment that will help a large bank and trust company leverage technology to achieve its strategic
growth objectives and adapt more quickly to changing business conditions.
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Conference Call Information
ePlus will hold a conference call and audio webcast at 4:30 p.m. ET on November 9, 2021:
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Date:
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November 9, 2021
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Time:
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4:30 p.m. ET
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Audio Webcast (Live & Replay):
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Link
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https://event.on24.com/wcc/r/3494156/8D60AA7ABA9A0BA7A9ED06CA6AA572C1
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Live Call:
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(833) 714-0957 (toll-free/domestic)
(778) 560-2893 (international)
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Replay:
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(800) 585-8367 (toll-free/domestic) or
(416) 621-4642 (international)
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Passcode:
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8329207 (live call and replay)
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A replay of the call will be available approximately two hours after the call through November 16, 2021.
About ePlus inc.
ePlus is a leading consultative technology solutions provider that helps customers imagine, implement, and achieve more from their technology. With the
highest certifications from top technology partners and lifecycle services expertise across key areas including security, cloud, data center, collaboration, networking, and emerging technologies, ePlus transforms IT from a cost center to a business
enabler. Founded in 1990, ePlus has more than 1,500 associates serving a diverse set of customers in the U.S., Europe, and Asia-Pac. The Company is
headquartered at 13595 Dulles Technology Drive, Herndon, VA, 20171. For more information, visit www.eplus.com, call 888-482-1122, or email info@eplus.com. Connect with ePlus on Facebook, LinkedIn, Twitter 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.” Actual and anticipated future results may
vary materially due to certain risks and uncertainties, including, without limitation, the duration and impact of the ongoing COVID-19 pandemic, which could materially adversely affect our financial condition and results of operations and has resulted
worldwide in governmental authorities imposing numerous unprecedented measures to try to contain the virus that has impacted and may further impact our workforce and operations, the operations of our customers, and those of our respective vendors,
suppliers, and partners; national and international political instability fostering uncertainty and volatility in the global economy including an economic downturn, significant and rapid inflation, an increase in tariffs or adverse changes to trade
agreements, exposure to fluctuation in foreign currency rates, interest rates and pressure on prices; supply constraints of certain IT products, including constraints caused by shortages in semiconductors and other components; inflation of both wages
and product costs; reduction of vendor incentive programs; and restrictions on our access to capital necessary to fund our operations; our ability to successfully perform due diligence and integrate acquired businesses; disruptions or a security breach
in our or our vendors’ or suppliers’ IT systems and data and audio communication networks, supply chains or other systems; the possibility of goodwill impairment charges in the future; significant adverse changes in, reductions in, or losses of
relationships with one or more of our largest volume customers or vendors; a possible decrease in the capital spending budgets of our customers or a decrease in purchases from us; our ability to raise capital, maintain or increase as needed our lines
of credit with vendors or floor planning facility, or obtain debt for our financing transactions; uncertainty regarding the phase out of LIBOR may negatively affect our operating results; the demand for and acceptance of, our products and services; our
ability to adapt our services to meet changes in market developments; our ability to implement comprehensive plans for the integration of sales forces, cost containment, asset rationalization, systems integration and other key strategies; the
creditworthiness of our customers and our ability to reserve adequately for credit losses; our ability to secure our own and our customers’ electronic and other confidential information and remain secure during a cyber-security or ransomware attack;
future growth rates in our core businesses; our dependence on continued innovation in hardware, software and services offerings by our vendors, availability of these products from our vendors and our ability to partner with them; our reliance on third
parties to perform some of our service obligations to our customers; the possibility of defects in our products or catalog content data; our ability to adapt to 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 realize our investment in leased equipment; maintaining and increasing advanced professional services by recruiting and retaining
highly skilled, competent personnel and vendor certifications; 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.
Contact:
Kleyton Parkhurst, SVP
ePlus inc.
kparkhurst@eplus.com
703-984-8150
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ePlus inc. AND SUBSIDIARIES
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UNAUDITED CONSOLIDATED BALANCE SHEETS
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(in thousands, except per share amounts)
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September 30, 2021
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March 31, 2021
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ASSETS
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Current assets:
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Cash and cash equivalents
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$56,950
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$129,562
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Accounts receivable—trade, net
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457,308
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391,567
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Accounts receivable—other, net
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57,346
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41,053
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Inventories
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134,514
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69,963
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Financing receivables—net, current
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80,082
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106,272
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Deferred costs
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30,691
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28,201
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Other current assets
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12,675
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10,976
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Total current assets
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829,566
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777,594
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Financing receivables and operating leases—net
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105,855
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90,165
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Deferred tax asset—net
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1,469
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1,468
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Property, equipment and other assets
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43,895
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42,289
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Goodwill
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126,596
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126,645
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Other intangible assets—net
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32,564
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38,614
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TOTAL ASSETS
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$1,139,945
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$1,076,775
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LIABILITIES AND STOCKHOLDERS' EQUITY
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LIABILITIES
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Current liabilities:
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Accounts payable
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$121,263
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$165,162
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Accounts payable—floor plan
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145,880
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98,653
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Salaries and commissions payable
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36,382
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36,839
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Deferred revenue
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82,937
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72,802
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Recourse notes payable—current
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35,548
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5,450
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Non-recourse notes payable—current
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21,083
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50,397
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Other current liabilities
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32,532
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30,061
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Total current liabilities
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475,625
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459,364
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Recourse notes payable—long term
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9,360
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12,658
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Non-recourse notes payable—long term
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4,315
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5,664
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Other liabilities
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37,042
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36,679
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TOTAL LIABILITIES
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526,342
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514,365
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COMMITMENTS AND CONTINGENCIES
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STOCKHOLDERS' EQUITY
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Preferred stock, $.01 per share par value; 2,000 shares authorized;
none outstanding
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-
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-
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Common stock, $.01 per share par value; 25,000 shares
authorized; 13,510 outstanding at September 30, 2021 and
13,503
outstanding at March 31, 2021
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146
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145
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Additional paid-in capital
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155,941
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152,366
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Treasury stock, at cost, 1,070 shares at September 30, 2021 and
993 shares at March 31, 2021
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(82,246) | (75,372) | ||
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Retained earnings
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539,547
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484,616
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Accumulated other comprehensive income—foreign currency
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translation adjustment
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215
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655
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Total Stockholders' Equity
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613,603
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562,410
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
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$1,139,945
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$1,076,775
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ePlus inc. AND SUBSIDIARIES
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|||||||
|
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
|
|||||||
|
(in thousands, except per share amounts)
|
|||||||
|
Three Months Ended September 30,
|
Six Months Ended September 30,
|
||||||
|
2021
|
2020
|
2021
|
2020
|
||||
|
Net sales
|
|
||||||
|
Product
|
$397,160
|
$383,656
|
$758,217
|
$690,896
|
|||
|
Services
|
60,857
|
49,425
|
116,449
|
97,216
|
|||
|
Total
|
458,017
|
433,081
|
874,666
|
788,112
|
|||
|
Cost of sales
|
|||||||
|
Product
|
297,629
|
302,963
|
574,856
|
529,597
|
|||
|
Services
|
37,386
|
31,156
|
71,296
|
60,996
|
|||
|
Total
|
335,015
|
334,119
|
646,152
|
590,593
|
|||
|
Gross profit
|
123,002
|
98,962
|
228,514
|
197,519
|
|||
|
Selling, general, and administrative
|
74,504
|
66,889
|
143,279
|
136,356
|
|||
|
Depreciation and amortization
|
3,853
|
3,341
|
7,779
|
6,857
|
|||
|
Interest and financing costs
|
342
|
247
|
701
|
824
|
|||
|
Operating expenses
|
78,699
|
70,477
|
151,759
|
144,037
|
|||
|
Operating income
|
44,303
|
28,485
|
76,755
|
53,482
|
|||
|
|
|||||||
|
Other income (expense)
|
(325)
|
184
|
(202)
|
282
|
|||
|
Earnings before taxes
|
43,978
|
28,669
|
76,553
|
53,764
|
|||
|
Provision for income taxes
|
12,565
|
8,823
|
21,622
|
16,558
|
|||
|
Net earnings
|
$31,413
|
$19,846
|
$54,931
|
$37,206
|
|||
|
|
|
||||||
|
Net earnings per common share—basic
|
$2.36
|
$1.48
|
$4.12
|
$2.79
|
|||
|
Net earnings per common share—diluted
|
$2.34
|
$1.48
|
$4.09
|
$2.78
|
|||
|
|
|
|
|
|
|
||
|
Weighted average common shares outstanding—basic
|
13,332
|
13,372
|
13,333
|
13,347
|
|||
|
Weighted average common shares outstanding—diluted
|
13,432
|
13,391
|
13,431
|
13,394
|
|||
|
Technology Segment
|
|||||||||||
|
Three Months Ended September 30,
|
Six Months Ended September 30,
|
||||||||||
|
2021
|
2020
|
Change
|
2021
|
2020
|
Change
|
||||||
|
(in thousands)
|
(in thousands)
|
||||||||||
|
Net sales
|
|||||||||||
|
Product
|
$375,444
|
$369,934
|
1.5%
|
$720,210
|
$663,367
|
8.6%
|
|||||
|
Services
|
60,857
|
49,425
|
23.1%
|
116,449
|
97,216
|
19.8%
|
|||||
|
Total
|
436,301
|
419,359
|
4.0%
|
836,659
|
760,593
|
10.0%
|
|||||
|
Cost of sales
|
|||||||||||
|
Product
|
293,837
|
301,006
|
(2.4%)
|
564,852
|
525,549
|
7.5%
|
|||||
|
Services
|
37,386
|
31,156
|
20.0%
|
71,296
|
60,996
|
16.9%
|
|||||
|
Total
|
331,223
|
332,162
|
(0.3%)
|
636,148
|
586,545
|
8.5%
|
|||||
|
Gross profit
|
105,078
|
87,197
|
20.5%
|
200,511
|
174,038
|
15.2%
|
|||||
|
Selling, general, and administrative
|
70,803
|
62,586
|
13.1%
|
136,956
|
128,142
|
6.9%
|
|||||
|
Depreciation and amortization
|
3,825
|
3,313
|
15.5%
|
7,723
|
6,801
|
13.6%
|
|||||
|
Interest and financing costs
|
199
|
1
|
19,800.0%
|
358
|
266
|
34.6%
|
|||||
|
Operating expenses
|
74,827
|
65,900
|
13.5%
|
145,037
|
135,209
|
7.3%
|
|||||
|
Operating income
|
$30,251
|
$21,297
|
42.0%
|
$55,474
|
$38,829
|
42.9%
|
|||||
|
Adjusted gross billings
|
$664,124
|
$601,064
|
10.5%
|
$1,297,131
|
$1,147,458
|
13.0%
|
|||||
|
Adjusted EBITDA
|
$36,059
|
$26,275
|
37.2%
|
$67,017
|
$49,436
|
35.6%
|
|||||
|
Technology Segment Net Sales by Customer End Market
|
|||||
|
Twelve Months Ended September 30,
|
|||||
|
2021
|
2020
|
Change
|
|||
|
Telecom, Media, & Entertainment
|
28%
|
20%
|
8%
|
||
|
SLED
|
15%
|
16%
|
(1%)
|
||
|
Healthcare
|
15%
|
15%
|
-
|
||
|
Technology
|
14%
|
19%
|
(5%)
|
||
|
Financial Services
|
11%
|
13%
|
(2%)
|
||
|
All others
|
17%
|
17%
|
-
|
||
|
Total
|
100%
|
100%
|
|||
|
Financing Segment
|
||||||||||||
|
Three Months Ended September 30,
|
Six Months Ended September 30,
|
|||||||||||
|
2021
|
2020
|
Change
|
2021
|
2020
|
Change
|
|||||||
|
(in thousands)
|
(in thousands)
|
|||||||||||
|
Net sales
|
$21,716
|
$13,722
|
58.3%
|
$38,007
|
$27,529
|
38.1%
|
||||||
|
Cost of sales
|
3,792
|
1,957
|
93.8%
|
10,004
|
4,048
|
147.1%
|
||||||
|
Gross profit
|
17,924
|
11,765
|
52.4%
|
28,003
|
23,481
|
19.3%
|
||||||
|
Selling, general, and administrative
|
3,701
|
4,303
|
(14.0%)
|
6,323
|
8,214
|
(23.0%)
|
||||||
|
Depreciation and amortization
|
28
|
28
|
0.0%
|
56
|
56
|
0.0%
|
||||||
|
Interest and financing costs
|
143
|
246
|
(41.9%)
|
343
|
558
|
(38.5%)
|
||||||
|
Operating expenses
|
3,872
|
4,577
|
(15.4%)
|
6,722
|
8,828
|
(23.9%)
|
||||||
|
Operating income
|
$14,052
|
$7,188
|
95.5%
|
$21,281
|
$14,653
|
45.2%
|
||||||
|
Adjusted EBITDA
|
$14,136
|
$7,286
|
94.0%
|
$21,450
|
$14,839
|
44.6%
|
||||||
ePlus inc. AND
SUBSIDIARIES
RECONCILIATION OF NON-GAAP INFORMATION
We included reconciliations below for the following non-GAAP information: (i) Adjusted Gross Billings, (ii) Adjusted EBITDA, (iii) Segment Adjusted EBITDA,
(iv) non-GAAP Net Earnings and (v) non-GAAP Net Earnings per Common Share - Diluted.
We define adjusted gross billings as our technology segment net sales calculated in accordance with GAAP, adjusted to exclude the costs incurred related to
sales of third-party maintenance, software assurance and subscription/SaaS licenses, and services.
We define adjusted EBITDA as net earnings calculated in accordance with GAAP, adjusted for the following: interest expense, depreciation and amortization,
share based compensation, acquisition and integration expense, provision for income taxes, and other income (expense). Segment adjusted EBITDA is defined as operating income calculated in accordance with GAAP, adjusted for interest expense, share based
compensation, acquisition and integration expenses, and depreciation and amortization. We consider the interest on notes payable from our financing segment and depreciation expense presented within cost of sales, which includes depreciation on assets
financed as operating leases, to be operating expenses.
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.
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 non-GAAP adjusted gross billings, 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,
|
||||||
|
|
2021
|
2020
|
2021
|
2020
|
|||
|
(in thousands)
|
|||||||
|
Technology segment net sales
|
$436,301
|
419,359
|
$836,659
|
$760,583
|
|||
|
Costs incurred related to sales of third-party maintenance, software assurance and subscription / SaaS licenses, and services
|
227,823
|
181,705
|
460,472
|
386,875
|
|||
|
Adjusted gross billings
|
$664,124
|
$601,064
|
$1,297,131
|
$1,147,458
|
|||
|
Three Months Ended September 30,
|
Six Months Ended September 30,
|
||||||
|
|
2021
|
2020
|
2021
|
2020
|
|||
|
(in thousands)
|
|||||||
|
Consolidated
|
|||||||
|
Net earnings
|
$31,413
|
$19,846
|
$54,931
|
$37,206
|
|||
|
Provision for income taxes
|
12,565
|
8,823
|
21,622
|
16,558
|
|||
|
Depreciation and amortization [1]
|
3,853
|
3,341
|
7,779
|
6,857
|
|||
|
Share based compensation
|
1,840
|
1,764
|
3,575
|
3,671
|
|||
|
Acquisition and integration expense
|
-
|
(30)
|
-
|
(1)
|
|||
|
Interest and financing costs
|
199
|
1
|
358
|
266
|
|||
|
Other (income) expense [2]
|
325
|
(184)
|
202
|
(282)
|
|||
|
Adjusted EBITDA
|
$50,195
|
$33,561
|
$88,467
|
$64,275
|
|||
|
Three Months Ended September 30,
|
Six Months Ended September 30,
|
||||||||
|
|
2021
|
2020
|
2021
|
2020
|
|||||
|
(in thousands)
|
|||||||||
|
Technology Segment
|
|||||||||
|
Operating income
|
$30,251
|
$21,297
|
$55,474
|
$38,829
|
|||||
|
Depreciation and amortization [1]
|
3,825
|
3,313
|
7,723
|
6,801
|
|||||
|
Share based compensation
|
1,784
|
1,694
|
3,462
|
3,541
|
|||||
|
Acquisition and integration expense
|
-
|
(30)
|
-
|
(1)
|
|||||
|
Interest and financing costs
|
199
|
1
|
358
|
266
|
|||||
|
Adjusted EBITDA
|
$36,059
|
$26,275
|
$67,017
|
$49,436
|
|||||
|
Financing Segment
|
|||||||
|
Operating income
|
$14,052
|
$7,188
|
$21,281
|
$14,653
|
|||
|
Depreciation and amortization [1]
|
28
|
28
|
56
|
56
|
|||
|
Share based compensation
|
56
|
70
|
113
|
130
|
|||
|
Adjusted EBITDA
|
$14,136
|
$7,286
|
$21,450
|
$14,839
|
|||
|
Three Months Ended September 30,
|
Six Months Ended September 30,
|
||||||
|
2021
|
2020
|
2021
|
2020
|
||||
|
(in thousands)
|
|||||||
|
GAAP: Earnings before taxes
|
$43,978
|
$28,669
|
$76,553
|
$53,764
|
|||
|
Share based compensation
|
1,840
|
1,764
|
3,575
|
3,671
|
|||
|
Acquisition and integration expense
|
-
|
(30)
|
-
|
(1)
|
|||
|
Acquisition related amortization expense [3]
|
2,661
|
2,172
|
5,357
|
4,400
|
|||
|
Other (income) expense [2]
|
325
|
(184)
|
202
|
(282)
|
|||
|
Non-GAAP: Earnings before taxes
|
48,804
|
32,391
|
85,687
|
61,552
|
|||
|
GAAP: Provision for income taxes
|
12,565
|
8,823
|
21,622
|
16,558
|
|||
|
Share based compensation
|
528
|
541
|
1,024
|
1,128
|
|||
|
Acquisition and integration expense
|
-
|
(9)
|
-
|
-
|
|||
|
Acquisition related amortization expense [3]
|
750
|
648
|
1,507
|
1,315
|
|||
|
Other (income) expense [2]
|
93
|
(56)
|
58
|
(86)
|
|||
|
Tax benefit on restricted stock
|
62
|
(26)
|
317
|
(40)
|
|||
|
Non-GAAP: Provision for income taxes
|
13,998
|
9,921
|
24,528
|
18,875
|
|||
|
Non-GAAP: Net earnings
|
$34,806
|
$22,470
|
$61,159
|
$42,677
|
|||
|
Three Months Ended September 30,
|
Six Months Ended September 30,
|
||||||
|
2021
|
2020
|
2021
|
2020
|
||||
|
GAAP: Net earnings per common share – diluted
|
$2.34
|
$1.48
|
$4.09
|
$2.78
|
|||
|
Share based compensation
|
0.09
|
0.09
|
0.18
|
0.19
|
|||
|
Acquisition related amortization expense [3]
|
0.14
|
0.11
|
0.29
|
0.23
|
|||
|
Other (income) expense [2]
|
0.02
|
-
|
0.01
|
(0.01)
|
|||
|
Tax benefit on restricted stock
|
-
|
-
|
(0.02)
|
-
|
|||
|
Total non-GAAP adjustments – net of tax
|
$0.25
|
$0.20
|
$0.46
|
$0.41
|
|||
|
Non-GAAP: Net earnings per common share – diluted
|
$2.59
|
$1.68
|
$4.55
|
$3.19
|
|||
|
[1] Amount consists of depreciation and amortization for assets used internally.
|
|
[2] Interest income and foreign currency transaction gains and losses.
|
|
[3] Amount consists of amortization of intangible assets from acquired businesses.
|