ePlus Reports Third Quarter Financial Results

ePlus Reports Third Quarter Financial Results

Earnings Conference Call Scheduled for February 7

HERNDON, Va., Feb. 6, 2013 (GLOBE NEWSWIRE) -- ePlus inc. (Nasdaq:PLUS), a
leading provider of technology solutions, today announced financial results
for its third quarter of fiscal year 2013, which ended December 31, 2012.
Total revenues for the quarter increased 8.0% to $242.0 million compared to
$224.0 million in the quarter ended December 31, 2011. During the quarter, the
Company processed a number of advanced integration projects which were not
scheduled to be shipped by quarter end, and as a result, deferred revenue
increased to $51.3 million from $16.8 million reported on December 31, 2011.
In addition, the Company had a larger than normal balance of open orders of
$73.3 million at December 31, 2012, as compared to $56.0 million in the prior
year.

Net earnings increased 3.3% to $9.0 million in the third quarter of fiscal
year 2013, as compared to $8.7 million in the prior year. However, due to the
amount of the special dividend declared during the quarter, fully diluted
earnings per common share decreased to $1.05 per share compared from $1.07 per
share in the prior period.

For the nine months ended December 31, 2012, total revenue increased 23.1% to
$746.8 million, and total costs and expenses increased 22.1% to $700.8
million. Net earnings were $27.1 million for the nine months or $3.35 per
diluted share, an increase of 45.0%, as compared to $19.5 million, or $2.31
per diluted share, during the nine months ended December 31, 2011.

"We are pleased with our financial results for the quarter," stated Phillip G.
Norton, chairman, president and CEO of ePlus. "We are very focused on building
ePlus-branded, value-added solutions to enhance and strengthen our customer
relationships and gain incremental revenue and margin.These solutions include
managed services, staff augmentation, and extending our OneSourceIT software
such as the future release of the OneSource Asset Management module.Over the
past several quarters, we have added staff and invested in these key
ePlus-branded solutions, to both differentiate ePlus from our peers and
maximize the value of our customer base."

Mr. Norton continued, "In December, we declared and paid a special cash
dividend of $2.50 per share.We are continuing to maintain a strong balance
sheet, and ePlus is well positioned to take advantage of future opportunities
as they arise."

As of December 31, 2012, the Company had $42.2 million of cash and cash
equivalents, as compared to $33.8 million on March 31, 2012.As of December
31, 2012, the Company had total stockholders' equity of $229.6 million and 8.2
million shares outstanding, as compared to $219.6 million and 8.0 million
shares, respectively, as of March 31, 2012.

Results of Operations

The Company presents its financial results in two segments, the technology
sales business segment and the financing business segment.The technology
sales business segment sells information technology equipment, software, and
related services primarily to corporate customers on a nationwide basis, and
also provides Internet-based business-to-business supply chain management
solutions for information technology and other operating resources. The
financing business segment offers lease-financing solutions to corporations
and governmental entities nationwide.

Technology Sales Business Segment

  *Total revenues increased 7.2% to $229.4 million compared to $214.1 million
    in the quarter ended December 31, 2011. The increase in revenues was due
    to increases in customer demand, particularly from Fortune 100 companies,
    and investments we made over the last twelve months to improve our product
    and service offerings and expand our geographical footprint. Deferred
    costs and deferred revenues increased by $32.2 million and $35.4 million,
    respectively, from March 31, 2012, principally due to the advanced
    integration projects that were deferred as of December 31, 2012 because
    delivery had not occurred. Open orders as of December 31, 2012 totaled
    $73.3 million compared to $56.0 million as of December 31, 2011.
  *Total costs and expenses were $219.2 million compared to $203.7 million in
    the same quarter last year, an increase of 7.6%. The increase in costs and
    expenses was primarily due to increases in personnel, as we had 810
    employees as of December 31, 2012, an increase of 112, or 16.0%, from
    December 31, 2011. Most of the increase relates to sales, marketing and
    engineering personnel, as we continue to invest in sales and support
    personnel through hiring and strategic acquisitions in order to expand our
    geographical presence and solutions offerings.
  *Gross margin on sales of products and services was 17.5% and 18.2% during
    the quarters ended December 31, 2012 and 2011, respectively, and gross
    margin for the nine months ended December 31, 2012 was 17.5% as compared
    to 17.8% for the prior year period.The decreases in gross margin were
    primarily due to a decrease in the amount of vendor incentives earned
    during the periods as well as the product mix of sales to our
    customers.Gross margin on sales of products and services was 18.0% for
    the quarter ended September 30, 2012 and the sequential decrease in
    margins was primarily due to a decrease in the amount of third party
    software assurance, maintenance and services sold, which are presented on
    a net basis.
  *Segment earnings before tax decreased $0.2 million to $10.2 million for
    the quarter.

Financing Business Segment

  *Total revenues increased 26.6% to $12.6 million compared to $10.0 million
    in the quarter ended December 31, 2011. The increase in revenues was
    driven by higher financing revenue, primarily as result of net gains
    realized from the early termination and buyout of certain leases.
  *Total costs and expenses increased $1.4 million, or 23.0%, to $7.3
    million, due to increases in depreciation expense for equipment under
    operating leases and commission expense as a result of the increase in
    revenues.
  *Segment earnings before tax were $5.3 million compared to $4.1 million for
    the same quarter prior year.

Restatement

On May 31, 2012, the Company announced that it would restate its consolidated
financial statements for the fiscal years ended March 31, 2010 and 2011, and
the quarterly financial statements for the three quarters ended June 30,
September 30, and December 31, 2011, and all of the quarters in the fiscal
year ended March 31, 2011.The restatement had no effect on the Company's
previously reported earnings, earnings per share, or consolidated statements
of cash flows. The restated results for the three and nine months ended
December 31, 2011 are presented in this release. A more detailed description
of the restatement was included in the annual report on Form 10-K for the
fiscal year ended March 31, 2012 filed with the Securities and Exchange
Commission.

Conference Call Information

The Company will host a conference call on Thursday, February 7, 2013, at 2:00
p.m. Eastern Time to review and discuss the Company's results for the third
quarter of fiscal year 2013.The call can be accessed live over the phone by
dialing (877) 870-9226, or for international callers, (973) 890-8320. Passcode
92711842. A live webcast will be available via the Company's investor
relations Web site at http://www.eplus.com/investors.

A replay will be available shortly after the call and can be accessed by
dialing (855) 859-2056, or for international callers, (404) 537-3406.Passcode
92711842.The replay will be available until February 11, 2013, and the
webcast will also remain available for replay via the Company's investor
relations page of its Web site.

About ePlus inc.

ePlus is a leading integrator of technology solutions. ePlus enables
organizations to optimize their IT infrastructure and supply chain processes
by delivering world-class IT products from top manufacturers, managed and
professional services, flexible lease financing, proprietary software, and
patented business methods and systems.Founded in 1990, ePlus has more than
850 associates serving federal, state, municipal, and commercial customers
nationally.The Company is headquartered in Herndon, VA.For more information,
visit www.eplus.com, call 888-482-1122, or email info@eplus.com. Connect with
ePlus on Facebook at www.facebook.com/ePlusinc and on Twitter at
www.twitter.com/ePlusinc.

ePlus^® and ePlus products referenced herein are either registered trademarks
or trademarks of ePlus inc. in the United States and/or other countries.

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, possible adverse effects resulting from financial market
disruption and general slowdown of the U.S. economy such as our current and
potential customers' delaying or reducing technology purchases, increasing
credit risk associated with our customers and vendors, reduction of vendor
incentive programs, the possibility of additional goodwill impairment charges,
and restrictions on our access to capital necessary to fund our operations;
our ability to design, improve or remediate, as necessary, internal controls
to address identified issues; 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 adapt to changes in the IT industry and/or rapid
change in product standards; our ability to hire and retain sufficient
personnel; our ability to realize our investment in leased equipment; our
ability to protect our intellectual property; our ability to consummate and
integrate acquisitions; the creditworthiness of our customers; our ability to
raise capital and obtain non-recourse financing for our transactions; our
ability to reserve adequately for credit losses; the impact of competition in
our markets; the possibility of defects in our products or catalog content
data; 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 CONDENSED CONSOLIDATED BALANCE SHEETS

                                             As of             As of
                                              December 31, 2012 March 31, 2012
ASSETS                                        (amounts in thousands)
                                                              
Cash and cash equivalents                     $42,153           $33,778
Short-term investments                        1,228             7,396
Accounts receivable—net                       221,917           174,599
Notes receivable—net                          21,763            24,337
Inventories—net                               23,866            23,514
Investment in leases and leased equipment—net 101,316           115,974
Property and equipment—net                    2,244             2,086
Deferred costs                                41,600            9,391
Other assets                                  14,999            14,169
Goodwill                                      28,787            28,444
TOTAL ASSETS                                  $499,873          $433,688
                                                              
LIABILITIES AND STOCKHOLDERS' EQUITY                           
                                                              
LIABILITIES                                                    
                                                              
Accounts payable—equipment                    $8,850            $17,268
Accounts payable—trade                        53,522            26,719
Accounts payable—floor plan                   81,748            85,911
Salaries and commissions payable              10,639            9,500
Deferred revenue                              51,342            15,935
Accrued expenses and other liabilities        22,247            24,887
Recourse notes payable                        1,542             1,727
Non-recourse notes payable                    34,648            26,328
Deferred tax liability                        5,781             5,786
Total Liabilities                             270,319           214,061
                                                              
COMMITMENTS AND CONTINGENCIES                                  
                                                              
STOCKHOLDERS' EQUITY                                           
                                                              
Preferred stock, $.01 par value; 2,000,000
shares authorized; none issued or             --                --
outstanding
Common stock, $.01 par value; 25,000,000
shares authorized; 12,900,881 issued and
8,151,201 outstanding at December 31, 2012    129               127
and 12,692,224 issued and 7,999,895
outstanding at March 31, 2012
Additional paid-in capital                    98,595            93,545
Treasury stock, at cost, 4,749,680 and        (67,306)          (65,416)
4,692,329 shares, respectively
Retained earnings                             197,656           190,906
Accumulated other comprehensive
income—foreign currency translation           480               465
adjustment
Total Stockholders' Equity                    229,554           219,627
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY    $499,873          $433,688



ePlus inc. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

                           Three Months Ended        Nine Months Ended
                            December 31,              December 31,
                           2012        2011          2012        2011
                                        As restated               As restated
                           (amounts in thousands, except shares and per share
                            data)
Sales of product and        $228,053    $212,314      $712,513    $575,128
services
Financing revenue           12,510      9,028         27,823      23,767
Fee and other income        1,462       2,686         6,464       7,687
                                                              
TOTAL REVENUES              242,025     224,028       746,800     606,582
                                                              
COSTS AND EXPENSES                                             
                                                              
Cost of sales, product and  188,103     173,603       587,693     472,706
services
Direct lease costs          2,934       2,245         7,638       6,419
                           191,037     175,848       595,331     479,125
                                                              
Professional and other fees 2,498       2,938         8,318       7,718
Salaries and benefits       27,535      25,596        80,808      72,692
General and administrative  4,909       4,878         14,975      13,418
expenses
Interest and financing      517         334           1,368       1,064
costs
                           35,459      33,746        105,469     94,892
                                                              
TOTAL COSTS AND EXPENSES    226,496     209,594       700,800     574,017
                                                              
EARNINGS BEFORE PROVISION   15,529      14,434        46,000      32,565
FOR INCOME TAXES
                                                              
PROVISION FOR INCOME TAXES  6,496       5,691         18,872      13,055
                                                              
NET EARNINGS                $9,033      $8,743        $27,128     $19,510
                                                              

NET EARNINGS PER COMMON     $1.05       $1.08         $3.35       $2.33
SHARE—BASIC
NET EARNINGS PER COMMON     $1.05       $1.07         $3.35       $2.31
SHARE—DILUTED
                                                              
WEIGHTED AVERAGE SHARES     7,843,153   7,818,666     7,778,174   8,092,404
OUTSTANDING—BASIC
WEIGHTED AVERAGE SHARES     7,843,153   7,898,041     7,778,174   8,184,382
OUTSTANDING—DILUTED



ePlus inc. AND SUBSIDIARIES
STATEMENTS OF OPERATIONS BY SEGMENT

                            Three months ended December 31,
                            2012                     2011
                             Technology     Financing Technology     Financing
                            Sales Business Business  Sales Business Business
                             Segment        Segment   Segment        Segment
                            (amounts in thousands)
Sales of product and         $228,053       $--     $212,314      $--
services
Financing revenue            --            12,510    --            9,028
Fee and other income         1,360          102       1,755          931
TOTAL REVENUE                229,413        12,612    214,069        9,959
                                                                 
Cost of sales, product and   188,103        --        173,603        --
services
Direct lease costs           --            2,934     --            2,245
Professional and other fees  2,041          457       2,546          392
Salaries and benefits        24,330         3,205     22,923         2,673
General and administrative   4,733          176       4,594          284
expenses
Interest and financing costs 19            498       19            315
TOTAL COSTS AND EXPENSES     219,226        7,270     203,685        5,909
                                                                 
EARNINGS BEFORE PROVISION    $10,187       $5,342   $10,384       $4,050
FOR INCOME TAXES
                                                                 
                                                                 
                            Nine months ended December 31,
                            2012                     2011
                             Technology     Financing Technology     Financing
                            Sales Business Business  Sales Business Business
                             Segment        Segment   Segment        Segment
                            (amounts in thousands)
Sales of product and         $712,513      $--     $575,128      $--
services
Financing revenues           --            27,823    --            23,767
Fee and other income         4,953          1,511     5,792          1,895
TOTAL REVENUES               717,466        29,334    580,920        25,662
                                                                 
Cost of sales, product and   587,693        --       472,706        --
services
Direct lease costs           --            7,638     --            6,419
Professional and other fees  6,804          1,514     6,607          1,111
Salaries and benefits        72,826         7,982     65,303         7,389
General and administrative   14,183         792       12,629         789
expenses
Interest and financing costs 70            1,298     57            1,007
TOTAL COSTS AND EXPENSES     681,576        19,224    557,302        16,715
                                                                 
EARNINGS BEFORE PROVISION    $35,890       $10,110  $23,618       $8,947
FOR INCOME TAXES

CONTACT: Kleyton Parkhurst, SVP
         ePlus inc.
         investors@eplus.com
         703-984-8150
 
Press spacebar to pause and continue. Press esc to stop.