Manchester (NASDAQ:MANC)
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Manchester Technologies, Inc. Announces Second Quarter Results
HAUPPAUGE, N.Y., March 11 /PRNewswire-FirstCall/ -- Manchester Technologies,
Inc. (NASDAQ:MANC), a leading distributor of display technology solutions and
plasma display monitors through its wholly-owned subsidiary, Electrograph
Systems, Inc., and a distributor of computer hardware to dealers and systems
integrators, today announced financial results for its second fiscal quarter
and six months ended January 31, 2005.
On May 28, 2004, the Company sold its end-user information technology
fulfillment and professional services business to ePlus, inc., a leading
provider of enterprise cost management, in an all cash transaction. The results
of operations for the three months and six months ended January 31, 2005 and
2004 for that business have been recorded as discontinued operations in the
accompanying condensed consolidated statements of income.
Revenue from continuing operations for the quarter ended January 31, 2005 was
$39.3 million as compared with $45.1 million for the comparable quarter last
year. Income from continuing operations for the quarter was $252,000 or $0.03
per diluted share as compared with $743,000 or $0.09 per diluted share reported
for the comparable quarter last year. Weighted average common shares
outstanding used for the computation of diluted earnings per share were
8,560,000 for 2005 and 8,299,000, for 2004.
Revenue from continuing operations for the six months ended January 31, 2005
was $86.2 million as compared with $90.5 million for the first six months of
last year. Income from continuing operations for the six months was $2.0
million or $0.24 per diluted share as compared with $1.6 million or $0.19 per
diluted share reported for the comparable six month period last year. Weighted
average common shares outstanding used for the computation of diluted earnings
per share were 8,497,000 for 2005 and 8,265,000 for 2004.
Barry R. Steinberg, CEO of Manchester Technologies, Inc., stated, "Unit sales
of display technology solutions, primarily large screen flat panel displays,
continue to increase within our Electrograph subsidiary, while average selling
prices decreased resulting in a small drop in revenue for the quarter from the
sale of display technology solutions as compared to the same quarter last year.
However, our gross profit percentage has remained strong as we continue to
grow our unit sales. The reduction of revenue in the quarter is primarily
attributable to a decrease in computer hardware sales to dealers and systems
integrators (non Electrograph business) for the quarter ended January 31,
2005."
The Company ended the quarter with cash and cash equivalents of $17.4 million,
working capital of $38.6 million, total assets of $68.8 million and
shareholders' equity of $46.0 million.
About Manchester Technologies, Inc.
Manchester Technologies, Inc. is a distributor of display technology solutions
and plasma display monitors through its subsidiary Electrograph Systems, Inc.
and is a distributor of computer hardware, primarily to dealers and system
integrators. More information about the Company and Electrograph can be
obtained by visiting their websites located at http://www.e-manchester.com/ and
the website of its subsidiary at http://www.electrograph.com/.
Safe Harbor Statement
This press release contains statements that may constitute forward-looking
statements pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. These forward-looking statements are based on
currently available information and represent the beliefs of our management.
These statements are subject to risks and uncertainties that could cause actual
results to differ materially, including, but not limited to, our inability to
attract and retain highly skilled sales representatives or technical personnel
necessary to maintain our current operations and implement our growth
strategies; our inability to maintain good relationships with our vendors and
customers; not being successful in our efforts to focus on higher- margin
products and services and not being able to rapidly respond to new product
offerings; not managing our inventory successfully; being adversely affected by
continued intense competition in the technology industry, including competition
from competitors with greater resources; being subject to potentially adverse
business conditions that our industry is subject to, including, without
limitation, pricing pressures involving distribution channels, market
consolidation, a potential short supply of products, continued deterioration in
average selling prices of personal computers and display technologies, and a
decrease in the growth of the display technology market; not being able to
identify suitable acquisition candidates and integrate the acquired companies;
the risk that our success is highly dependent upon a select group of senior
management and that our revenues and operating results are subject to
fluctuation from quarter to quarter; the failure of our information technology
systems to function properly; and the failure of our actions to enhance
shareholder value. For further information on these risks and others affecting
us, please see our Annual Report on Form 10-K for the year ended July 31, 2004,
and those set forth from time to time in our other filings with the Securities
and Exchange Commission (the "SEC"). Each of these documents is on file with
the SEC and is available free of charge. Readers of this press release are
referred to such filings. The forward-looking statements herein speak only as
of the date of this press release. We do not undertake to update any
forward-looking statement that may be made from time to time by us or on our
behalf.
Manchester Technologies, Inc. and Subsidiaries
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share amounts)
(Unaudited)
Three months ended Six months ended
January 31, January 31,
2005 2004 2005 2004
Revenue $39,289 $45,117 $86,170 $90,495
Cost of revenue 34,408 40,559 75,257 81,203
Gross profit 4,881 4,558 10,913 9,292
Selling, general and
administrative expenses 4,580 3,246 7,709 6,586
Income from operations 301 1,312 3,204 2,706
Interest and other
income (expense), net 118 (75) 133 (95)
Income from continuing
operations before
income taxes 419 1,237 3,337 2,611
Income tax provision 167 494 1,334 1,024
Income from
continuing operations 252 743 2,003 1,587
Discontinued operations
Income (loss) from
operations of
discontinued component - (745) 995 (1,600)
Income tax
(provision) benefit - 297 (398) 619
Income (loss) from
discontinued operations - (448) 597 (981)
Net income $ 252 $ 295 $ 2,600 $ 606
Income per share from
continuing operations
Basic $ 0.03 $0.09 $ 0.24 $ 0.20
Diluted $ 0.03 $0.09 $ 0.24 $ 0.19
Income (loss) per share
from discontinued operations
Basic $ - $(0.06) $ 0.07 $ (0.12)
Diluted $ - $(0.06) $ 0.07 $ (0.12)
Net income per share
Basic $ 0.03 $ 0.04 $ 0.31 $ 0.08
Diluted $ 0.03 $ 0.04 $ 0.31 $ 0.07
Weighted average shares
outstanding
Basic 8,364 7,990 8,295 7,990
Diluted 8,560 8,299 8,497 8,265
Manchester Technologies, Inc. and Subsidiaries
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except per share amounts)
January 31, 2005 July 31, 2004
(Unaudited)
Assets
Current assets:
Cash and cash equivalents $17,399 $16,881
Accounts receivable, net of
allowance for doubtful accounts
of $1,420 and $2,848, respectively 14,848 15,530
Inventory 18,566 20,301
Deferred income taxes 1,212 1,212
Prepaid taxes 655 916
Prepaid expenses and other current assets 1,066 1,266
Total current assets 53,746 56,106
Property and equipment, net 9,505 9,890
Goodwill, net 3,735 3,735
Deferred income taxes 1,728 1,728
Other assets 105 183
Total assets $68,819 $71,642
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable and accrued expenses $14,869 $21,492
Current portion of capital lease obligations 260 246
Total current liabilities 15,129 21,738
Deferred compensation payable 98 98
Capital lease obligations,
net of current portion 7,551 7,683
Total liabilities 22,778 29,519
Commitments and contingencies
Shareholders' equity:
Preferred stock, $.01 par value;
5,000 shares authorized, none issued - -
Common stock, $.01 par value;
25,000 shares authorized, 8,428 and
8,163 shares issued and outstanding 84 82
Additional paid-in capital 20,913 19,597
Retained earnings 25,044 22,444
Total shareholders' equity 46,041 42,123
Total liabilities and
shareholders' equity $68,819 $71,642
DATASOURCE: Manchester Technologies, Inc.
CONTACT: Elan Yaish, Chief Financial Officer of Manchester Technologies,
Inc., Telephone: +1-631-951-7060, Fax: +1-631-951-7639 or email:
Web site: http://www.e-manchester.com/