(Source: PrimeNewswire)
HERNDON, Va., Nov. 5, 2009 (GLOBE NEWSWIRE) -- ePlus inc. (Nasdaq:PLUS), a leading provider of technology solutions, today announced financial results for its second quarter ending September 30, 2009, of fiscal year 2010. Revenues totaled $172.7 million, a decrease of $24.1 million or 12.3%, as compared to $196.9 million in the second quarter of the prior fiscal year. Net earnings totaled $5.0 million, or $0.58 per diluted share, as compared to $6.4 million, or $0.74 per diluted share in the second quarter of the prior fiscal year. Revenues for the quarter ended September 30, 2009 include patent license and settlement income in the aggregate of $3.4 million.
On a sequential basis, revenues increased $20.3 million or 13.3%, as compared to $152.4 million in the fiscal first quarter of 2010, which ended June 30, 2009. Net earnings increased $3.1 million or 163%, as compared to $1.9 million in the first quarter. Earnings per diluted share increased $0.35 or 152%, as compared to $0.23 in the first quarter.
Phillip G. Norton, Chairman, President and Chief Executive Officer, said, "This quarter marked our second consecutive sequential improvement in total revenue, net income and earnings per share. I believe one of the most important reasons ePlus has sustained profitability throughout the economic downturn is that our mix of technology sales, advanced engineering services, financing, and procurement automation services provides value for our customers who seek to reduce costs and increase efficiencies. We remain focused on strengthening our customer value proposition, driving revenues, increasing margins and gaining market share."
Sales of product and services during the fiscal second quarter totaled $157.3 million, a decrease of $22.2 million or 12.4%, as compared to $179.5 million in the second quarter of the prior fiscal year. On a sequential basis, sales of product and services increased by $16.8 million or 12.0%, as compared to $140.5 million in the fiscal first quarter of 2010. The gross profit margin on product and services during the fiscal second quarter increased approximately 60 basis points to 14.6%, as compared to 14.0% for the fiscal second quarter of 2009. The increase in margin is primarily based on increased incentives provided by the Company's vendors and the mix of products and services purchased by the Company's customers.
Revenues generated in the financing business segment, which include primarily sales of leased equipment, lease revenues, and fee and other income, declined 34.3% to $10.1 million for the quarter ended September 30, 2009 as compared to the quarter ended September 30, 2008 and were largely unchanged sequentially. The decline in revenues in the financing business segment, compared to the prior year's second quarter, is attributable to a smaller balance of investment in leases and leased equipment which generates less lease revenue, and a decline in sales of leased equipment which can vary from quarter to quarter based on the Company's risk mitigation strategy.
During the quarter ended September 30, 2009, fee and other income decreased 20.2% to $2.4 million as compared to the prior fiscal year's second quarter. The decrease was primarily driven by decreases in software and related consulting revenue, agent fees from manufacturers and short-term investment income. Patent settlement and licensing income was $3.4 million during the quarter ended September 30, 2009, while no income was recorded in the same period the prior fiscal year.
Selling, general and administrative expenses, which includes professional and other fees, salaries and benefits, and general and administrative expenses, totaled $24.5 million in the fiscal second quarter of 2010, an increase of $256 thousand or 1.1%, as compared to $24.3 million in the fiscal second quarter of 2009. On a sequential basis, selling, general and administrative expenses increased by $1.3 million or 5.5% compared to the fiscal first quarter of 2010. The increased costs are attributable, in part, to higher legal expenses and fees associated with the patent litigation settlement and ongoing patent litigation expenses.
Interest and financing costs totaled $1.1 million in the fiscal second quarter of 2010, a decrease of $369 thousand or 25.2%, as compared to $1.5 million in the fiscal second quarter of 2009. Non-recourse notes payable totaled $64.6 million at September 30, 2009, a decrease of 24.0%, as compared to $85.0 million at March 31, 2009.
As of September 30, 2009, cash and cash equivalents totaled $88.3 million, as compared to $107.8 million on March 31, 2009. The reduction in cash is attributable, in part, to increases in accounts receivable from $82.7 million to $93.3 million due to a sequential increase in sales, and an increase in investments in leases and leased equipment from $119.3 million to $124.2 million, respectively, from March 31, 2009 to September 30, 2009, and a decrease in non-recourse notes payable from $85.0 million to $64.6 million from March 31, 2009 to September 30, 2009.
During the quarter ended September 30, 2009, the Company repurchased 14,858 shares of its outstanding common stock at an average cost of $15.37 per share for a total purchase price of $228 thousand.
Year-to-Date Results
For the six months ended September 30, 2009, revenues totaled $325.1 million, a decrease of $54.0 million or 14.2%, as compared to $379.1 million for the same period a year ago. Net earnings totaled $6.9 million, or $0.81 per diluted share, as compared to $10.1 million, or $1.18 per diluted share, for the six months ended September 30, 2008.
Sales of product and services totaled $297.7 million, a decrease of $47.5 million or 13.8%, as compared to $345.3 million for the six months ended September 30, 2008.
