ePlus Reports Third Quarter and First Nine Months Financial Results

Rhea-AI Summary

ePlus inc. (NASDAQ: PLUS) reported a strong third quarter for fiscal year 2023, with net sales rising 26.0% to $623.5 million and technology segment sales increasing 28.3% to $611.8 million. Net earnings surged 35.1% to $35.7 million, while diluted EPS increased 36.7% to $1.34.

For the first nine months, net sales were up 15.0% to $1,575.5 million, with net earnings rising 6.3% to $86.5 million. Consolidated gross margin decreased to 24.4%, reflecting higher service costs.

Positive

• Net sales increased 26.0% to $623.5 million in Q3.
• Net earnings rose 35.1% to $35.7 million.
• Diluted EPS increased 36.7% to $1.34.
• Adjusted EBITDA up 27.6% to $53.3 million.

Negative

• Consolidated gross margin down 150 basis points to 22.2%.
• Financing segment net sales decreased 34.5% to $11.7 million.

Third Quarter Fiscal Year 2023

• Net sales increased 26.0% to $623.5 million; technology segment net sales increased 28.3% to $611.8 million; service revenues increased 7.9% to $67.5 million.
• Technology segment adjusted gross billings increased 29.7% to $888.6 million.
• Consolidated gross profit increased 18.1% to $138.4 million.
• Consolidated gross margin was 22.2%, down 150 basis points from last year's quarter.
• Net earnings increased 35.1% to $35.7 million.
• Adjusted EBITDA increased 27.6% to $53.3 million.
• Net earnings per common share-diluted increased 36.7% to $1.34. Non-GAAP net earnings per common share-diluted increased 25.5% to $1.38.

First Nine Months Fiscal Year 2023

• Net sales increased 15.0% to $1,575.5 million; technology segment net sales increased 16.6% to $1,532.0 million; service revenues increased 9.4% to $195.7 million.
• Technology segment adjusted gross billings increased 18.9% to $2,356.3 million.
• Consolidated gross profit increased 11.4% to $385.2 million.
• Consolidated gross margin was 24.4%, compared with 25.2% last year.
• Net earnings increased 6.3% to $86.5 million.
• Adjusted EBITDA increased 9.0% to $141.9 million.
• Net earnings per common share-diluted increased 6.9% to $3.24. Non-GAAP net earnings per common share-diluted increased 8.3% to $3.66.

HERNDON, Va., Feb. 7, 2023 /PRNewswire/ -- ePlus inc. (NASDAQ: PLUS), a leading provider of technology and financing solutions, today announced financial results for the three and nine months ended December 31, 2022.

Management Comment

"ePlus delivered strong third quarter financial results, driven by robust customer demand in our focus areas of digital transformation, hybrid workforce, cloud solutions, and security," said Mark Marron, president and chief executive officer of ePlus. "Consolidated net sales increased 26% year-over-year to $623.5 million, while diluted earnings per share rose nearly 37% to $1.34, reflecting the strong top line momentum and efficient expense management. The ePlus team once again executed at a high level, meeting our customers' evolving needs with cost-effective and innovative solutions. As our customers have prioritized their technology investments, we continue to invest in our teams and in our capabilities to expand our solutions portfolio and our market share."

Mr. Marron continued, "While supply chain constraints persist, we saw a gradual easing in availability of certain products during the third quarter, enabling us to fulfill a portion of our customer backlog and reduce our inventories sequentially compared to the fiscal second quarter. We remain focused on driving long-term growth, with emphasis on expanding our managed and annuity-quality services revenue while continuing to target high-growth opportunities in our focus markets."

Third Quarter Fiscal Year 2023 Results

For the third quarter ended December 31, 2022, as compared to the prior fiscal year third quarter ended December 31, 2021:

Consolidated net sales increased 26.0% to $623.5 million, from $494.8 million.

Technology segment net sales increased 28.3% to $611.8 million, from $477.0 million due to higher sales of product and services. Service revenues increased 7.9% to $67.5 million, from $62.5 million due to increases in managed services. Adjusted gross billings increased 29.7% to $888.6 million from $685.0 million. 

Financing segment net sales decreased 34.5% to $11.7 million, from $17.9 million due to lower portfolio earnings and less proceeds from sales of leased equipment. 

Consolidated gross profit increased 18.1% to $138.4 million, from $117.1 million. Consolidated gross margin was 22.2%, down from 23.7% last year due to lower product margin and lower service margins caused by increases in managed services costs and a change in our mix of services.

Operating expenses were $91.9 million, up 13.4% from $81.0 million last year, primarily due to increases in salaries and benefits, variable compensation stemming from higher gross profit, professional fees, software license and maintenance, travel expenses, and changes in allowance for credit losses. Our headcount at the end of the quarter was 1,745, up 191 from a year ago, including 25 employees from the Future Com acquisition that closed July 15, 2022. Of the 191 additional employees, 158 were customer-facing employees, including 101 professional services and technical support personnel due to demand for our services.

Consolidated operating income increased 28.7% to $46.5 million. During the quarter we had other income of $2.9 million, due to foreign currency transaction gain of $0.9 million and a $1.9 million related to our claim in a class action lawsuit received in December 2022.

Our effective tax rate for the quarter was 27.7%, higher than the prior year quarter of 26.4% due to a tax benefit from restricted stock in the prior year.

Net earnings increased 35.1% to $35.7 million.

Adjusted EBITDA increased 27.6% to $53.3 million.

Net earnings per common share-diluted was $1.34, compared with $0.98 in the prior year quarter. Non-GAAP earnings per common share-diluted was $1.38, compared with $1.10 last year. 

First Nine Months Fiscal Year 2023 Results

For the nine months ended December 31, 2022, as compared to the prior fiscal year nine months ended December 31, 2021:

Consolidated net sales increased 15.0% to $1,575.5 million, from $1,369.5 million.

Technology segment net sales increased 16.6% to $1,532.0 million, from $1,313.6 million due to higher sales of product and services. Service revenues increased 9.4% to $195.7 million, from $179.0 million due to increases in professional services and managed services. Adjusted gross billings was $2,356.3 million, an increase of 18.9% from $1,982.2 million. 

Financing segment net sales decreased 22.1% to $43.5 million, from $55.9 million, due to lower portfolio earnings and less proceeds from sales of leased equipment.

Consolidated gross profit increased 11.4% to $385.2 million, from $345.6 million. Consolidated gross margin was 24.4%, lower than 25.2% last year, due to lower service margins partially offset by higher product margin.

Operating expenses were $261.5 million, up 12.3% from $232.8 million last year, primarily due to increases in variable compensation stemming from higher gross profit, salaries and benefits, professional fees, advertising and marketing, software license and maintenance, travel expenses, and changes in allowance for credit losses.

Consolidated operating income increased 9.7% to $123.7 million. During the nine months ended December 31, 2022, we incurred foreign currency transaction losses of $5.2 million, which was partially offset by $1.9 million related to our claim in a class action lawsuit.

Our effective tax rate for the first nine months of fiscal 2023 was 28.3%, higher than 27.7% in the corresponding period in fiscal 2022 due to foreign currency transaction losses incurred in lower tax jurisdictions.

Net earnings increased 6.3% to $86.5 million.

Adjusted EBITDA increased 9.0% to $141.9 million.

Net earnings per common share-diluted was $3.24, compared with $3.03 in the prior year. Non-GAAP net earnings per common share-diluted was $3.66, compared with $3.38 last year.

Balance Sheet Highlights

As of December 31, 2022, ePlus had cash and cash equivalents of $99.4 million, compared with $155.4 million as of March 31, 2022. Inventory, which represents equipment ordered by customers but not yet delivered, increased 57.9% to $244.8 million from March 31, 2022 due to ongoing projects with customers coupled with continued supply chain constraints; however, sequentially, inventory decreased 10.9%. Total stockholders' equity was $746.4 million, compared with $660.7 million as of March 31, 2022. Total shares outstanding were 26.9 million on December 31, 2022 and March 31, 2022.

Summary and Outlook

"Our solid financial results in the third quarter and through the first nine months of fiscal 2023 speak to the fundamental strength of our business, our expanded portfolio of solutions and services and the dedication of our team. Supported by the strength of our balance sheet and our extensive partnerships within the global IT market, ePlus remains well positioned to capitalize on key long-term growth trends, such as workplace transformation, the need to protect against cybersecurity threats and the shift to the cloud," Mr. Marron concluded.

Recent Corporate Developments/Recognitions

January 2023:

• Announced the launch of ePlus Storage-as-a-Service powered by Pure Storage

December 2022:

• Successfully achieved SOC 1, SOC 2, and HIPAA Attestations.
• Received Nutanix Global Reseller of the Year, Americas Reseller of the Year, and Americas Partner Systems Engineer of the Year Awards.

November 2022:

• Launched Co-Delivered Architecture Support Services for Cisco and Adjacent Technologies.
• Recognized with multiple awards, including U.S. Partner of the Year and Global Marketing Partner of the Year at Cisco Partner Summit.

Conference Call Information

ePlus will hold a conference call and webcast at 4:30 p.m. ET on February 7, 2023:

Audio Webcast (Live & Replay): https://events.q4inc.com/attendee/482950251
Live Call:	(888) 330-2469 (toll-free/domestic)
	(240) 789-2740 (international)
Replay:	(800) 770- 2030 (toll-free/domestic)
	(647) 362-9199 (international)
Passcode:	5403833 (live call and replay)

The replay of this webcast will be available approximately two hours after the call concludes and be available through February 14, 2023.

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, data center, networking, collaboration and emerging solutions, to organizations across all industry segments. With complete lifecycle management services and flexible payment solutions, ePlus' more than 1,700 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 locations 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."  Forward-looking statements can be identified by such words and phrases as "believe(s)," "outlook," "looking ahead," "anticipate(s)," "expect(s)," "intend(s)," "estimate(s)," "may," "will," "should," "continue" and similar expressions, comparable terminology or the negative thereof, and include the anticipated growth of our company, as well as our outlook for the fourth quarter and balance of the 2023 fiscal year. Actual and anticipated future results may vary materially due to certain risks and uncertainties, including, without limitation, 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, increases in our costs which may result in adverse changes in our gross profit and/or price increases to our customers which may result in adverse changes in our gross profit; reduction of vendor incentives provided to us; significant and rapid inflation may cause price, wage, and interest rate increases, as well as increases in operating costs which may impact the arrangements that have pricing commitments over the term of the agreement; significant adverse changes in, reductions in, or loss of one or more of our larger volume customers or vendors; our ability to successfully perform due diligence and integrate acquired businesses; disruptions or a security breach in our or our vendors' IT systems and data and audio communication networks; supply chain issues, including a shortage of 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; ongoing remote work trends, and the increase in cybersecurity attacks that have occurred while employees work remotely; maintaining and increasing advanced professional services by recruiting and retaining highly skilled, competent personnel, and vendor certifications; our dependence on key personnel to maintain certain customer relationships, and our ability to hire, train, and retain sufficient qualified personnel; 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; our ability to remain secure during a cyber-security attack. Including both disruptions in our or our vendors' IT systems and data and audio communication networks; reliance on third-parties to perform some of our service obligations with 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 creditworthiness of our customers and our ability to reserve adequately for credit losses; loss of our credit facility or credit lines with our vendors may restrict our current and future operations; 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; a reduction of vendor incentives provided to 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 dependency on continued innovations in hardware, software, and services offerings by our vendors and our ability to partner with them; future growth rates in our core businesses; rising interest rates or the loss of key lenders or the constricting of credit markets; the possibility of a goodwill impairment charges in the future; our ability to adapt to meet changes in markets and competitive developments, to increase the total number of customers using integrated solutions by up-selling within our customer base and gaining new customers, to manage a diverse product set of solutions in highly competitive markets with a number of key vendors, to increase the total number of customers who use our managed services and professional services and continue to enhance our managed services offerings to remain competitive in this marketplace, to perform professional and managed services competently; and to implement comprehensive plans for the integration of sales forces, cost containment, asset rationalization, systems integration, and other key strategies; exposure to changes in, interpretations of, or enforcement trends in, and customer and vendor actions in anticipation of or response to, legislation and regulatory matters; domestic and international economic regulations uncertainty (e.g., tariffs, sanctions, and trade agreements); our contracts may not be adequate to protect us, we are subject to audits which we may not pass, and our professional and liability insurance policies coverage may be insufficient to cover a claim; failure to comply with public sector contracts, or applicable laws and or regulations; our ability to maintain our proprietary software and update our technology infrastructure to remain competitive in the marketplace; our ability to realize our investment in leased equipment; our ability to successfully perform due diligence and integrate acquired business; and our ability to protect our intellectual property rights and successfully defend any challenges to the validity or our patents or allegations that we are infringing upon any third-party patents, and the costs associated with those actions, and, when appropriate, the costs associated with licensing required technology; our ability to profitably adapt our services to meet changes in market developments; the possibility of defects in our products or catalog content data; and other risks or uncertainties detailed in our Annual Report on Form 10-K for the fiscal year ended March 31, 2022 and other 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 either as a result of new information, future events or otherwise, except as required by applicable U.S. securities law.

 

ePlus inc. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED BALANCE SHEETS
(in thousands, except per share amounts)
		December 31, 2022		March 31, 2022
ASSETS
Current assets:
Cash and cash equivalents		$99,395		$155,378
Accounts receivable—trade, net		674,935		430,380
Accounts receivable—other, net		70,589		48,673
Inventories		244,798		155,060
Financing receivables—net, current		105,823		61,492
Deferred costs		43,111		32,555
Other current assets		54,792		13,944
Total current assets		1,293,443		897,482
Financing receivables and operating leases—net		80,579		64,292
Deferred tax asset—net		4,859		5,050
Property, equipment and other assets		55,371		45,586
Goodwill		136,057		126,543
Other intangible assets—net		27,556		27,250
TOTAL ASSETS		$1,597,865		$1,166,203
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Current liabilities:
Accounts payable		$299,627		$136,161
Accounts payable—floor plan		154,541		145,323
Salaries and commissions payable		41,152		39,602
Deferred revenue		125,570		86,469
Recourse notes payable—current		102,961		7,316
Non-recourse notes payable—current		41,293		17,070
Other current liabilities		28,433		28,095
Total current liabilities		793,577		460,036
Recourse notes payable—long term		-		5,792
Non-recourse notes payable—long term		7,172		4,108
Other liabilities		50,696		35,529
TOTAL LIABILITIES		851,445		505,465
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY
Preferred stock, $.01 per share par value; 2,000 shares authorized;            none outstanding		-		-
Common stock, $.01 per share par value; 50,000 shares      authorized; 26,907 outstanding at December 31, 2022 and      26,886 outstanding at March 31, 2022		272		270
Additional paid-in capital		165,161		159,480
Treasury stock, at cost, 258 shares at December 31, 2022 and
130 shares at March 31, 2022		(13,958)		(6,734)
Retained earnings		594,348		507,846
Accumulated other comprehensive income—foreign currency
translation adjustment		597		(124)
Total Stockholders' Equity		746,420		660,738
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY		$1,597,865		$1,166,203

 

ePlus inc. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
	Three Months Ended December 31,				Nine Months Ended December 31,
	2022		2021		2022		2021
Net sales
Product	$556,018		$432,307		$1,379,813		$1,190,524
Services	67,458		62,527		195,728		178,976
Total	623,476		494,834		1,575,541		1,369,500
Cost of sales
Product	441,015		339,810		1,062,352		914,666
Services	44,089		37,907		127,990		109,203
Total	485,104		377,717		1,190,342		1,023,869
Gross profit	138,372		117,117		385,199		345,631
Selling, general, and administrative	86,730		76,874		248,201		220,153
Depreciation and amortization	3,609		3,597		10,387		11,376
Interest and financing costs	1,575		561		2,863		1,262
Operating expenses	91,914		81,032		261,451		232,791
Operating income	46,458		36,085		123,748		112,840
Other income (expense)	2,907		(175)		(3,112)		(377)
Earnings before taxes	49,365		35,910		120,636		112,463
Provision for income taxes	13,671		9,486		34,134		31,108
Net earnings	$35,694		$26,424		$86,502		$81,355
Net earnings per common share—basic	$1.34		$0.99		$3.26		$3.05
Net earnings per common share—diluted	$1.34		$0.98		$3.24		$3.03
Weighted average common shares outstanding—basic	26,592		26,668		26,561		26,666
Weighted average common shares outstanding—diluted	26,648		26,930		26,688		26,887

 

Technology Segment
	Three Months Ended December 31,						Nine Months Ended December 31,
	2022		2021		Change		2022		2021		Change
	(in thousands)						(in thousands)
Net sales
Product	$544,316		$414,448		31.3 %		$1,336,309		$1,134,658		17.8 %
Services	67,458		62,527		7.9 %		195,728		178,976		9.4 %
Total	611,774		476,975		28.3 %		1,532,037		1,313,634		16.6 %
Cost of sales
Product	439,831		334,585		31.5 %		1,054,267		899,437		17.2 %
Services	44,089		37,907		16.3 %		127,990		109,203		17.2 %
Total	483,920		372,492		29.9 %		1,182,257		1,008,640		17.2 %
Gross profit	127,854		104,483		22.4 %		349,780		304,994		14.7 %
Selling, general, and administrative	81,874		73,413		11.5 %		235,147		210,369		11.8 %
Depreciation and amortization	3,582		3,569		0.4 %		10,304		11,292		(8.7 %)
Interest and financing costs	1,308		335		290.4 %		2,117		693		205.5 %
Operating expenses	86,764		77,317		12.2 %		247,568		222,354		11.3 %
Operating income	$41,090		$27,166		51.3 %		$102,212		$82,640		23.7 %
Adjusted gross billings	$888,621		$685,031		29.7 %		$2,356,326		$1,982,162		18.9 %
Adjusted EBITDA	$47,869		$32,794		46.0 %		$120,135		$99,811		20.4 %

 

Technology Segment Net Sales by Customer End Market
	Twelve Months Ended December 31,
	2022		2021		Change
Telecom, Media & Entertainment	28 %		29 %		(1 %)
Technology	18 %		15 %		3 %
Healthcare	14 %		16 %		(2 %)
SLED	13 %		15 %		(2 %)
Financial Services	9 %		9 %		-
All others	18 %		16 %		2 %
Total	100 %		100 %

 

Financing Segment
	Three Months Ended December 31,						Nine Months Ended December 31,
	2022		2021		Change		2022		2021		Change
	(in thousands)						(in thousands)
Net sales	$11,702		$17,859		(34.5 %)		$43,504		$55,866		(22.1 %)
Cost of sales	1,184		5,225		(77.3 %)		8,085		15,229		(46.9 %)
Gross profit	10,518		12,634		(16.7 %)		35,419		40,637		(12.8 %)
Selling, general, and administrative	4,856		3,461		40.3 %		13,054		9,784		33.4 %
Depreciation and amortization	27		28		(3.6 %)		83		84		(1.2 %)
Interest and financing costs	267		226		18.1 %		746		569		31.1 %
Operating expenses	5,150		3,715		38.6 %		13,883		10,437		33.0 %
Operating income	$5,368		$8,919		(39.8 %)		$21,536		$30,200		(28.7 %)
Adjusted EBITDA	$5,456		$9,003		(39.4 %)		$21,798		$30,453		(28.4 %)

 

ePlus inc. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP INFORMATION

We included reconciliations below for the following non-GAAP financial measures: (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 US 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 US 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 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 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 US 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 US GAAP. In addition, other companies, including companies in our industry, might calculate Adjusted gross billings, Adjusted EBITDA, Non-GAAP: Net earnings and Non-GAAP: Net earnings per common share-diluted or similarly titled measures differently, which may reduce their usefulness as comparative measures.

 

	Three Months Ended December 31,				Nine Months Ended December 31,
	2022		2021		2022		2021
	(in thousands)
Technology segment net sales	$611,774		$476,975		$1,532,037		$1,313,634
Costs incurred related to sales of third-party maintenance, software assurance and subscription / SaaS licenses, and services	276,847		208,056		824,289		668,528
Adjusted gross billings	$888,621		$685,031		$2,356,326		$1,982,162
	Three Months Ended December 31,				Nine Months Ended December 31,
	2022		2021		2022		2021
	(in thousands)
Consolidated
Net earnings	$35,694		$26,424		$86,502		$81,355
Provision for income taxes	13,671		9.486		34,134		31,108
Depreciation and amortization [1]	3,609		3,597		10,387		11,376
Share based compensation	1,950		1,780		5,681		5,355
Interest and financing costs	1,308		335		2,117		693
Other (income) expense [2]	(2,907)		175		3,112		377
Adjusted EBITDA	$53,325		$41,797		$141,933		$130,264
	Three Months Ended December 31,				Nine Months Ended December 31,
	2022		2021		2022		2021
	(in thousands)
Technology Segment
Operating income	$41,090		$27,166		$102,212		$82,640
Depreciation and amortization [1]	3,582		3,569		10,304		11,292
Share based compensation	1,889		1,724		5,502		5,186
Interest and financing costs	1,308		335		2,117		693
Adjusted EBITDA	$47,869		$32,794		$120,135		$99,811
Financing Segment
Operating income	$5,368		$8,919		$21,536		$30,200
Depreciation and amortization [1]	27		28		83		84
Share based compensation	61		56		179		169
Adjusted EBITDA	$5,456		$9,003		$21,798		$30,453
	Three Months Ended December 31,				Nine Months Ended December 31,
	2022		2021		2022		2021
	(in thousands)
GAAP: Earnings before taxes	$49,365		$35,910		$120,636		$112,463
Share based compensation	1,950		1,780		5,681		5,355
Acquisition related amortization expense [3]	2,505		2,497		7,182		7,854
Other (income) expense [2]	(2,907)		175		3,112		377
Non-GAAP: Earnings before taxes	50,913		40,362		136,611		126,049
GAAP: Provision for income taxes	13,671		9,486		34,134		31,108
Share based compensation	544		470		1,624		1,494
Acquisition related amortization expense [3]	693		649		2,030		2,156
Other (income) expense [2]	(811)		46		933		104
Tax benefit on restricted stock	102		-		267		317
Non-GAAP: Provision for income taxes	14,199		10,651		38,988		35,179
Non-GAAP: Net earnings	$36,714		$29,711		$97,623		$90,870
	Three Months Ended December 31,				Nine Months Ended December 31,
	2022		2021		2022		2021
GAAP: Net earnings per common share – diluted	$1.34		$0.98		$3.24		$3.03
Share based compensation	0.05		0.05		0.15		0.14
Acquisition related amortization expense [3]	0.07		0.07		0.20		0.21
Other (income) expense [2]	(0.08)		-		0.08		0.01
Tax benefit on restricted stock	-		-		(0.01)		(0.01)
Total non-GAAP adjustments – net of tax	0.04		0.12		0.42		0.35
Non-GAAP: Net earnings per common share – diluted	$1.38		$1.10		$3.66		$3.38

[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.

FAQ

What were ePlus's Q3 2023 net sales figures?

ePlus reported net sales of $623.5 million for Q3 2023, a 26.0% increase from the previous year.

How did ePlus perform in terms of earnings for Q3 2023?

ePlus's net earnings for Q3 2023 increased by 35.1% to $35.7 million.

What is the diluted EPS for ePlus in Q3 2023?

The diluted EPS for ePlus in Q3 2023 was $1.34, reflecting a 36.7% increase.

What are the financial highlights for ePlus in the first nine months of fiscal 2023?

For the first nine months, ePlus reported net sales of $1,575.5 million, a 15.0% increase, and net earnings of $86.5 million, a 6.3% increase.

What challenges did ePlus face in Q3 2023?

ePlus faced a decrease in its financing segment net sales by 34.5% due to lower portfolio earnings.