• E-mail
• Print
• Comment
• Font Size
• Digg
• del.icio.us
• Discuss article

En Pointe Technologies, Inc. Announces Financial Results for the Quarter Ended December 31, 2008

Posted on: Friday, 13 February 2009, 16:00 CST

- First quarter net product sales decrease 29% to $52.4 million from prior year first quarter.

- First quarter gross profits decrease 43% to $6.8 million from prior year first quarter.

LOS ANGELES, Feb. 13 /PRNewswire-FirstCall/ -- En Pointe Technologies, Inc. (Nasdaq: ENPT): a leading national provider of business-to-business information technology products, services and solutions, today announced consolidated results for its first quarter ended December 31, 2008. Total net sales in the first quarter of fiscal 2009 decreased 37% to $54.9 million when compared to the $86.9 million reported for the first quarter of fiscal 2008. However, $10.2 million of the $32.0 million decline in net sales was attributable to the July 2008 divestiture of the IT services business. En Pointe's gross profits decreased by $5.1 million to $6.8 million in the first quarter of fiscal 2009 as compared to $11.9 million reported in the first quarter of fiscal 2008. The decrease in gross profits was largely attributable to the July 2008 divestiture of the IT services business.

The net loss for the December 2008 quarter was $392,000, or $0.05 per basic and diluted share, as compared with net income of $43,000, or $0.01 per basic and diluted share, reported in the December 2007 quarter.

Bob Din, CEO of En Pointe said, "With down sales in the December 2008 quarter, we increased our product gross margin percentage by 3.1% and thereby minimized the negative impact on product gross profits. Furthermore, in anticipation of a deep recession and the challenging electronics market it brings, we trimmed our operating costs by $4.6 million as compared to the December 2007 quarter, mainly from the sale of the IT services business." Mr. Din added, "We believe that we can continue to find resourceful ways to meet the current and future challenges of this marketplace."

Operating Highlights

In spite of a drop in sales, product gross profits in the December 2008 quarter remained essentially flat as compared with December 2007. This was because offsetting the decline in sales was 3.1% increase in product gross profit margin to 11.5% in the December 2008 quarter from the 8.4% reported in the December 2007 quarter.

Both selling and marketing and general and administrative expenses were sharply lower in the December 2008 quarter compared with the December 2007 quarter, due to lower expenses from the absence of the IT services business and reduced wage expense from a mandatory furlough.

Asset Management

The Company's balance sheet remained strong at December 31, 2008 with $9.7 million of cash and the availability of an additional $18.7 million under the Company's credit line. Accounts receivable remained relatively unchanged at $35.6 million in the December 2008 quarter from the September 2008 quarter. Long-term debt remained low at $0.4 million. Stockholders' equity declined $4.1 million to $21.6 million from the September 2008 quarter due principally to a $3.7 million increase in Other Comprehensive Loss. Other Comprehensive Loss of $3.7 million resulted from valuation adjustments for equity positions held by the Company, chiefly the securities held in escrow that are part of the consideration for the 80.5% sale of the services business.

About En Pointe Technologies, Inc.

En Pointe Technologies, Inc. provides the information technology marketplace, including mid-market and enterprise accounts, government agencies, and educational institutions nationwide, with computer hardware, software, and services. En Pointe has the flexibility to customize information technology services to fulfill the unique needs of each of its customers.

En Pointe employs SAP, Clarify(TM), and AccessPointe(TM) (an e-procurement application), proven and dependable software applications, to support its broad customer base. Founded in 1993 and headquartered in Los Angeles, En Pointe is well represented in leading national markets throughout the United States. En Pointe has the experience and the technology to help organizations simplify the management of their information technology infrastructure.

En Pointe's Ovex Global division provides customers with solutions for affordable information technology services by combining low cost with high quality offshore services provided through its foreign subsidiary, Ovex Technologies (Private), Ltd, with experienced onshore information technology management teams that provide the necessary supervision and guidance to smooth each customer's outsourcing transition.

Visit www.enpointe.com to learn more.

This document contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. In addition, from time to time, En Pointe Technologies, or its representatives, have made or may make forward-looking statements, orally or in writing. The words "estimate," "project," "potential," "intended," "expect," "anticipate," "believe" and similar expressions or words are intended to identify forward-looking statements. Such forward-looking statements may be included in, but are not limited to, various filings made by En Pointe with the Securities and Exchange Commission, press releases or oral statements made with the approval of an authorized executive officer of the Company. Actual results could differ materially from those projected or suggested in any forward-looking statements as a result of a wide variety of factors and conditions. Reference is hereby made to En Pointe's Annual Report on Form 10-K for the fiscal year ended September 30, 2008 for information regarding those factors and conditions. Among the important factors that could cause actual results to differ materially from management's projections, estimates and expectations include, but are not limited to: changing economic influences in the industry; dependence on key personnel; actions of manufacturers and suppliers; and availability of adequate financing. Readers are cautioned not to place undue reliance upon these forward-looking statements that speak only as of the date of this press release. En Pointe undertakes no obligation to update publicly any forward-looking statements to reflect new information, events or circumstances after the date of this press release or to reflect the occurrence of unanticipated events.

All trademarks and service marks are the property of their respective owners.

To contact En Pointe regarding any investor matters, please contact: Javed Latif Chief Financial Officer and Sr. Vice President, Operations En Pointe Technologies, Inc. Phone: (310) 337-5212 Fax: (310) 324-3149 ir@enpointe.com To contact En Pointe regarding any sales or customer matters, please e-mail us at: sales@enpointe.com or contact us by phone at (310) 337-5200. En Pointe Technologies, Inc. Condensed Consolidated Balance Sheets (Unaudited) (in thousands) December 31, September 30, 2008 2008 ASSETS: Current assets: Cash $9,677 $3,691 Restricted cash 10 10 Accounts receivable, net 35,568 35,448 Due from affiliate 3,586 Inventories, net 6,805 5,858 Prepaid expenses and other current assets 1,570 1,294 Total current assets 53,630 49,887 Property and equipment, net of accumulated depreciation and amortization 4,289 4,202 Other assets 13,815 13,709 Total assets $71,734 $67,798 LIABILITIES AND STOCKHOLDERS' EQUITY: Current liabilities: Accounts payable, trade $22,230 $15,817 Borrowings under line of credit 9,069 7,840 Accrued liabilities 11,042 11,528 Accrued taxes and other liabilities 5,462 4,522 Total current liabilities 47,803 39,707 Long term liabilities 428 475 Total liabilities 48,231 40,182 Minority interest 1,943 1,962 Total stockholders' equity 21,560 25,654 Total liabilities and stockholders' Equity $71,734 $67,798 En Pointe Technologies, Inc. Condensed Consolidated Statements of Operations (Unaudited) (in thousands, except per share data) Three months ended December 31, 2008 2007 Net sales: Product $52,393 $74,148 Service 2,494 12,734 Total net sales 54,887 86,882 Cost of sales: Product 46,353 67,922 Service 1,707 7,066 Total cost of sales 48,060 74,988 Gross profit: Product 6,040 6,226 Service 787 5,668 Total gross profit 6,827 11,894 Selling and marketing expenses 4,930 8,828 General and administrative expenses 2,368 3,076 Operating loss (471) (10) Interest income, net 20 66 Other (loss) income, net (29) 61 (Loss) income before income taxes and other items (480) 117 Income tax (benefit) provision (26) 31 (Loss) income before other items (454) 86 Allocated income in equity investment 43 Allocated loss (income) in noncontrolling interest 19 (43) Net (loss) income $(392) $43 Net (loss) income per share: Basic $(0.05) $0.01 Diluted $(0.05) $0.01 Weighted average shares outstanding: Basic 7,182 7,158 Diluted 7,182 7,371

SOURCE En Pointe Technologies, Inc.

Source: PR Newswire

More News in this Category