ePlus inc (PLUS) 2013 Q1 法說會逐字稿

Good day, ladies and gentlemen, and welcome to the ePlus earnings results conference call. At this time all participants are in a listen-only mode . Later we will conduct a question-and-answer session and instructions will be given at that time. Should anyone require technical assistance during today's conference, please press star then 0 on your touch-tone telephone. As a reminder, today's conference call is being recorded. I'd now like to turn the conference over to your host, Mr. Kley Parkhurst, senior Vice President. Please go ahead.

Thank you everyone for joining us today. With me are Phil Norton, Chairman, President and CEO of ePlus, Elaine Marion, our Chief Financial Officer and Erica Stoecker , General Counsel. I want to take a moment to remind you that the statements we make this afternoon, are not historical facts may be deemed to be forward-looking statements and are based on management's current plans, estimates and projections.

Actual and anticipated future results may vary materially due to certain rests and uncertainties detail in the earnings release released yesterday and our periodic filings with the Securities and Exchange Commission including our form 10-K for the year-end of March 31st, 2012 and our form 10-Q for the three-month ended June 30th, 2012 , when filed. The company undertakes no responsibility to update any of these forward-looking statements unlike new information on future events. I would like to turn the call over to Phil Norton. Phil?

Thank you, Kley. We are pleased with our financial results for the quarter. Revenues increased 36.8% and fully diluted earnings per share improved 131.8%. Our significant first quarter revenue and earnings growth despite macroeconomic challenges resulted from our commitment over the past year to invest in advanced technology solutions. That are high in demand from customers. Our solutions set and engineering capabilities continue to differentiate ePlus from the competition as we capture the growing demand for I.T. equipment and services within our customer base. And for new organic acquired customers.

In particular our focus on Cloud, data center, collaboration and solutions is resonating in the marketplace, and resulted in attracting new customers, penetrating existing customers and increasing market share. Accompanying the solid demand from our customers, our gross demand slightly improved as compared to the prior year and we expanded our staff by 81 people, part of our strategy to capture market opportunities and key advanced technologies solutions areas and to increase our geographic footprint.

We have invested in highly skilled technical personnel which allows us to engage customers at an architectural level. As a result we can further fulfill our customer's needs for collaboration, audio, visual, security and staff augmentation and can provide a full array of managed services including a security operations center.

As compared to many of our peers, we offer a full range of services including logistics and supply chain software , and our strong balance sheet is another competitive differentiator as customers assess the strengths and weaknesses of their training partners, a significant partner in today's challenging economic environment. We believe that is one of the reasons that our customer base includes a number of fortune 100 companies. Furthermore, our strong financial position allows us to take advantage of shareholder enhancing opportunities such as the stock buy back.

For the June quarter we repurchased approximately 19,400 shares at an average cost of $29.46 per share for a total purchase price of $572,000. During the quarter we continued to add to our numerous awards engineering certifications and capabilities as we achieved the flex five premium partner standing recognizing ePlus for our advanced competencies and certifications and implementing virtualized data center solutions based on a CISCO UCS server.

CISCO network switches and unifies storage systems. Furthermore we introduced the ePlus advantage affordable video conferencing offering, a modular low cost alternative based on CISCO solutions for whole room video conferencing as compared to fixed installation.

Finally we commenced our eCloud readiness consultation service where we identified the best Cloud adoption strategy and create a prioritized road map tailored to the customer's unique requirements. ePlus success has been pitch by our on going commitment to deliver the most advanced technology offerings.

Looking ahead our strategy remains committed to investing in our people, acquiring new technology capabilities and geographic locations and improving our efficiency and delivery capabilities. Along with continuing customer adoption of Cloud computing, we see the numerous opportunities to continue growing the business and well positioned to best serve our customers. With that I would like to turn the call over to Elaine Marion, our CFO who will discuss the financial results.

Thank you, Phil. On a consolidated basis , total revenues for the quarter increased $65.8 million or 36.8% to $244.7 million as compared to $178.9 million recorded in the prior fiscal year's first quarter. Net earnings increased 117.7% to $8.1 million as compared to $3.7 million in the prior year's quarter. Fully diluted earnings per share increased 131.8% to $1.02 per share from $.44 cents per share. In the technology business segment revenue, total revenues increased 38% to $236.3 million compared to $171.2 million in the quarter ended June 30th, 2011.

The increase in revenues was due to increases in customer demand particularly from Fortune 100 companies and investments we have made over the last 12 months to improve product and services offering and expand our geographical footprint. Gross margin on sales of product and services was 17% and 16.9% during the quarters ended June 30th, 2012 and 2011 respectively. The increase in gross margin was affected by an increase in the amount of vendor incentive earned and product mix during the period. Total cost and expenses were $225.4 million compared to $167.2 million in the same quarter last year , an increase of 34.8%. The increase in cost and expenses was primarily driven by increases in cost of sales product and services which was consistent with the increase in sales of product and services.

In addition, salaries and benefits increased as a result of our investment and sales and support personnel and strategic acquisition. Segment revenue earnings before tax increased $6.8 million to $10.8 million for the quarter.

Moving to our financing business segment, total revenues increased 10.1% to $8.4 million as compared to $7.7 million in the quarter ending June 30th, 2011 primarily due to an increase in the net gain on financial assets. Total cost and expenses increased fee .5% to $5.7 million due to increases and professional and other fees. Segment earnings before tax were $2.7 million compared to $2.3 million for the same quarter in the prior year. As of June 30th, 2012 the company had $51.9 million of cash and cash equivalence and short-term investments as compared to $41.2 million on March 31st, 2012.

During the quarter the company increased the sales of certain financial assets as part of the working capital and portfolio management process which generated cash and cash equivalence. As of June 30th, 2012, the company had total shareholder's equity of $227.4 million and 8.1 million shares outstanding as compared to $219.6 million in shareholder's equity and 8 million shares outstanding as of March 31st, 2012. That concludes our prepared remarks. Operator, could you please open the line for questions?

Ladies and gentlemen, if you have a question at this time please press star and then one on your touch-tone telephone. If your question has been answered or you wish to remove yourself from the queue, please press the pound key. Again, if you have a question, please press star then 1 at this time. One moment while we wait for any questions. Again, ladies and gentlemen, if you have a question please press star then 1 at this time. One moment. I am showing no questions a -- at this time and would like to turn it back over to Mr. Phil Norton for any closing remarks.

We would like to thank you very much for taking the time for our conference call. If you have any questions you can contact Kley Parkhurst. Thank you, very much.

Ladies and gentlemen, this does conclude today's conference. You may now disconnect and have a wonderful day.