ePlus Reports Record Quarterly e-Commerce Revenues

Business Wire, June 8, 2000

Business Editors/High Tech Writers

HERNDON, Va.--(BUSINESS WIRE)--June 8, 2000

For the Fiscal Year, Revenue Increases 37% to $266MM;

Net Income Increases 25% to $8.4MM

ePlus inc. (NASDAQ:PLUS) announced its fourth quarter and fiscal year earnings for the quarter and year ending March 31, 2000.

Net e-commerce revenues, which include ePlusSuite transaction fees plus the gross margin of equipment sales in the e-commerce business segment, increased 197% to $1,760,050 in the quarter, as compared to $593,028 reported in the prior sequential quarter ending December 31, 1999. ePlusSuite transaction fees increased 263% to $1,078,448, as compared to $297,453 for the prior sequential quarter. The total volume of equipment leased and sold in the e-commerce segment during the quarter was $18.9MM.

For the three months ended March 31, 2000, revenues increased 74% to $77,417,256 from $44,439,250 the prior year's quarter, and net income increased 26% to $2,413,159 from $1,914,823 the prior year's quarter. Basic and diluted earnings per share for the quarter was $0.30 and $0.25, respectively, as compared to $0.26 and $0.23 the prior year. Total volume of equipment leased and sold during the quarter was $108.8MM.

For the twelve months ended March 31, 2000, revenues increased 37% to $265,691,502 from $193,969,838 the prior year, and net income increased 25% to $8,375,347 from $6,716,467 the prior year. Basic and diluted earnings per share was $1.09 and $0.91, respectively, as compared to $0.99 and $0.98 the prior year. The total volume of equipment leased and sold during the year was $499 million.

Phillip G. Norton, Chairman, President, and Chief Executive of ePlus said, "Our e-commerce segment is gaining momentum as ePlusSuite develops into the leading supply-chain management solution for middle market companies. We continue to have excellent growth in all of our business units, and we are successfully converting customers to ePlusSuite from our legacy businesses as well as adding new ePlusSuite customers. The financial performance of core businesses, combined with the growth drivers of e-commerce, enable us to deliver superior financial results, which are well in excess of published analyst's estimates for the quarter. We have been one of the few profitable B2B companies and we will continue to use this to our advantage and invest in technology and marketing of ePlusSuite."

Mr. Norton continued, "Many of our competitors in the B2B space may have to change their business strategies as they seek profitability. At ePlus, we are leveraging the strengths in our core businesses -- long-time customers, industry-leading business process efficiency, and built-for-the-web technology -- to deliver the solutions our customers need. Unlike many others, we aren't guessing that our strategy will be profitable in two or three years, we are delivering results today."

The Company's business segments continued to show strong financial results. For the twelve months ending March 31, 2000, sales of equipment increased 97% to $164,804,933 from $83,516,254 the prior year. Lease revenues increased 52% to $31,374,243 from $20,610,542 the prior year. Sales of leased equipment, a form of financing used by the company to facilitate its leasing transactions, decreased 29% to $59,765,309 from $84,378,800 as the company retained more leased assets on its balance sheet. Selling, general and administrative expenses increased 56% to $28,404,864 from $18,253,636 the prior year. Interest expense, which is primarily related to the leasing segment, increased 216% to $11,389,682 from $3,601,348 the prior year as a result of an increased level of leasing activity and on-balance sheet lease assets.

For the quarter ending March 31, 2000, sales of equipment increased 78% to $49,483,377 from $27,775,778 the prior year. Lease revenues increased 70% to $9,557,549.68 from $5,616,037 the prior year. Sales of leased equipment increased 52% to $14,883,139 from $9,766,121. Selling, general, and administrative expenses increased 63% to $8,511,934.26 from $5,176,836.00 the prior year.

As of March 31, 2000, lease assets on its balance sheet increased 168% to $232,756,976 from $86,901,129 the prior year. Total equity increased 32% to $57,814,789 on March 31, 2000 from $43,813,809 on March 31, 1999. Total non-recourse debt, which is primarily used to finance lease assets, increased 245% to $180,969,480 from $52,429,266. Recourse notes increased 104% to $39,017,168 from $19,081,137 the prior year. Recourse notes include the Company's collateralized line of credit which had a balance of $34,500,000 on March 31, 2000 as compared to a balance of $18,000,000 the prior year.

Business highlights for the quarter include:

-A 457% increase in the number of ePlusSuite customers, from 7 on December 31, 2000 to 39 on 3/31/00. As of June 7, 2000, there were 38 customers implemented and 16 customers being implemented.

-ePlus announced a secondary public offering which was completed on April 11, 2000. The offering raised approximately $26.8 million by issuing 1,000,000 shares at $28.50 per share.