ePlus inc. (PLUS) has reported a 22.56 percent rise in profit for the quarter ended Dec. 31, 2016. The company has earned $12.62 million, or $1.81 a share in the quarter, compared with $10.30 million, or $1.40 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $13.29 million, or $1.91 a share compared with $10.69 million or $1.46 a share, a year ago.
Revenue during the quarter grew 9.38 percent to $326.66 million from $298.64 million in the previous year period. Gross margin for the quarter expanded 114 basis points over the previous year period to 22.59 percent. Total expenses were 93.48 percent of quarterly revenues, down from 94.09 percent for the same period last year. This has led to an improvement of 61 basis points in operating margin to 6.52 percent.
Operating income for the quarter was $21.31 million, compared with $17.64 million in the previous year period.
However, the adjusted EBITDA for the quarter stood at $23.22 million compared with $18.98 million in the prior year period. At the same time, adjusted EBITDA margin improved 75 basis points in the quarter to 7.11 percent from 6.35 percent in the last year period.
"We continue to report sales growth that outpaces the market rate of IT spending by focusing on our key strategic objectives of driving transformative solutions, and producing the best business outcomes for our customers," said Mark Marron, president and chief executive officer. "The gross margin expansion we experienced in the third quarter was due, in part, to an improved product mix of higher margin products and services, as well as traction with higher margin emerging vendors. We are pleased that our performance enabled us to report solid earnings growth that exceeded revenue growth, even with the costs of integrating our most recent acquisition and bringing on additional headcount to support future growth."
Working capital increases
ePlus inc. has recorded an increase in the working capital over the last year. It stood at $206.07 million as at Dec. 31, 2016, up 15.35 percent or $27.42 million from $178.65 million on Dec. 31, 2015. Current ratio was at 1.54 as on Dec. 31, 2016, down from 1.61 on Dec. 31, 2015.
Cash conversion cycle (CCC) has increased to 48 days for the quarter from 43 days for the last year period. Days sales outstanding went down to 106 days for the quarter compared with 111 days for the same period last year.
Days inventory outstanding has increased to 20 days for the quarter compared with 9 days for the previous year period. At the same time, days payable outstanding went up to 78 days for the quarter from 76 for the same period last year.
Debt moves up
ePlus inc. has witnessed an increase in total debt over the last one year. It stood at $54 million as on Dec. 31, 2016, up 8.94 percent or $4.43 million from $49.56 million on Dec. 31, 2015. Total debt was 7.33 percent of total assets as on Dec. 31, 2016, compared with 7.86 percent on Dec. 31, 2015. Debt to equity ratio was almost stable at 0.16 as on Dec. 31, 2016, when compared with the last year.
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