ENPT NEWS
En Pointe Technologies, Inc. Reports Net Income For the First Quarter of Fiscal Year 2001
Consolidated Net Income of $1.1 Million; $0.17 Per Share
LOS ANGELES, Calif., Feb 12, 2001 /PRNewswire via COMTEX/ -- En Pointe Technologies, Inc. (Nasdaq: ENPT chart, msgs), a leading national provider of business-to-business information technology products and services, today announced consolidated net income for the first quarter of fiscal 2001 ended December 31, 2001 of $1.1 million, or $0.17 per basic and fully diluted share, an improvement over the consolidated net loss of $5.8 million, or $0.96 per share, reported for the same quarter in the prior fiscal year. Operating income for the first quarter of fiscal 2001 was $488,000 compared to an operating loss of $6.2 million reported during the same quarter in fiscal 2000. Equity accounting for affiliates contributed $1.0 million to net income resulting from En Pointe's reduction of affiliate debt guarantees.
Consolidated revenues for En Pointe's quarter ended December 31, 2000 were $118 million compared to $136 million reported for the first quarter of fiscal 2000 and $124 million reported for the quarter ended September 30, 2000. Revenue from the core business (excluding that from affiliates that are no longer consolidated) was $124 million in the first quarter of fiscal 2000.
"We are very pleased with the results we posted for the first quarter of fiscal 2001," said Mike Shabazian, President of En Pointe Technologies, Inc. "This quarter represents the second consecutive quarter of profitability for En Pointe; indicating the reorganization steps we took in June 2000 were correct and in line with revenue expectations."
At $7.9 million in the first quarter of fiscal 2001, service revenues increased by 17% from $6.7 million in the same quarter of fiscal 2000. Service revenues were $8.8 million in the prior sequential quarter. Gross margins from service revenues were 37%, comparable with the same quarter in the prior fiscal year, but down slightly from the September 2000 quarter of 38%.
Net sales of hardware and software products totaled $109.9 million in the quarter ended December 31, 2000, compared to $129.5 million in the same quarter one-year earlier and $114.9 million for the prior sequential quarter.
The consolidated pre-tax profit during the first quarter of fiscal 2001 was $202,000, with En Pointe's core business contributing $351,000 to this number. Losses at En Pointe Ventures combined with the elimination of interest received from affiliates totaled $149,000.
En Pointe continues to have significant investments in both firstsource corp. and SupplyAccess, Inc. As of December 31, 2000, En Pointe owned approximately 43.5% of firstsource corp. and 36.7% of SupplyAccess, Inc. As such, En Pointe continues to record activities related to these investments utilizing the equity method of accounting. During the quarter ended December 31, 2000, En Pointe recognized equity income of $1.0 million resulting from the reversal of previously recorded losses from its unconsolidated affiliates, which were brought about by the reduction of debt guarantees for one of its affiliates.
The Company and certain current and former officers and directors have been named in lawsuits relating to trading in the Company's stock. The defendants have retained outside counsel in connection with the defense of these lawsuits. The defendants intend to vigorously defend the allegations made against them in these lawsuits.
A conference call is scheduled for 1:30 PM Pacific Time on Tuesday, February 13, 2001 at which time the Company's management will discuss the results for the quarter ended December 31, 2000 and future trends effecting the business. Those interested in participating in this call may do so by calling (800) 399-2044 at least 10 minutes prior to the start of the call. If you cannot participate on the February 13th call, you may listen to a replay of the conference call on (800) 642-1687 [ID# 016970], which will run through February 19, 2001.
About En Pointe Technologies, Inc.
En Pointe Technologies, Inc. is a national business-to-business e-commerce provider of IT products and value-added services, using customized and non-proprietary software and systems to drop-ship materials, repair and operation ("MRO") products to its customers through an electronically linked network of the largest allied distributors in the U.S. This software allows En Pointe to serve as an electronic clearinghouse of computers and computer related products without many of the risks and costs associated with maintaining inventory. En Pointe offers its customers direct on-line access to 70% of the mainstream PC products available in the U.S. today. En Pointe Professional Services offers "total solution" system consulting services such as: pre-sale consulting, design, training, customization and integration.
En Pointe is represented nationally with a concentration in more than 20 sales and service markets throughout the United States, as well as a value-added ISO 9002 certified integration facility in Ontario, California. Visit En Pointe at www.enpointe.com.
About SupplyAccess, Inc.
SupplyAccess, Inc., an affiliate in which En Pointe Technologies, Inc. owns a minority interest, is a provider of web-based applications, solutions, and portal sites that facilitate business-to-business direct procurement of a broad line of information technology ("IT") and MRO products and services, as well as a carefully-targeted set of vertical market exchanges, including aircraft parts and medical supplies.
The low-cost procurement tool and quickly-integrated e-commerce portal site is designed for Fortune 1000 customers and government entities who are searching for a complete automated buying application that can be implemented in a matter of weeks, at little or no cost to the organization. The SupplyAccess(TM) network automates MRO and IT product acquisition, from end user requisitioning and approval workflow through electronic product procurement and delivery tracking. SupplyAccess(TM) is designed to interoperate with all existing marketplace electronic exchanges, bringing global procurement connectivity to its customers without the expense of onsite application implementation and maintenance.
SupplyAccess(TM) has a portal site that can be visited at www.supplyaccess.com.
About firstsource corp.
firstsource corp., an affiliate in which En Pointe Technologies, Inc. owns a minority interest, is a business-to-business e-commerce provider of innovative procurement solutions for small and medium-sized companies over the Internet. Customers of firstsource corp.'s three business units, inpowr(SM), firstsource connect(SM) and firstsource.com, utilize its proprietary end-to-end sourcing/purchasing/fulfillment online management system, and the inpowr(SM) FSP platform, to connect directly with multiple distributors of business products.
The inpowr(SM) business unit licenses access to the inpowr(SM) FSP platform in whole or in part to companies who desire to build online e-businesses, and firstsource connect(SM) creates customized Web-based purchasing centers for companies seeking to reduce procurement costs, streamline internal requisition processes and improve service delivery.
With more than 279,000 unique product SKUs to choose from, businesses shopping at www.firstsource.com can search, compare, price and purchase business products and services 24 hours a day, seven days a week.
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," "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 the Company 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 the Company's Annual Report on Form 10-K for the fiscal year ended September 30, 2000, 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: (1) Changing economic influences in the industry including, but not limited to, those related to the Internet and those related to distribution of information technology and business products and services, and those relating to the market's perception and evaluation of business-to-business solutions providers; (2) The development by competitors of new or superior delivery technologies, or entry in the market by new competitors, or the loss of customers by the company, or decline in demand for the products sold by the Company; (3) Dependence on intellectual property rights; (4) Delays in product development or disruptions in the functioning of key software; (5) The company's and its subsidiaries' dependence on key personnel, and potential influence by executive officers and principal stockholders; (6) Any delay in execution of the company's and its subsidiaries' system development plans; (7) Planned or unplanned changes in the quantity and/or quality of the manufacturers and suppliers available for the company's and its subsidiaries' products; (8) The actions of manufacturers and suppliers of the company's and its subsidiaries' products; (9) Changes in the costs or availability of products; (10) The availability of financing adequate to meet the company's requirements; and, (11) General business conditions in the economy. All trademarks and service marks are the property of their respective owners.
For further information please contact Arlene Crispin, 310-725-5265, for En Pointe Technologies, Inc.
En Pointe Technologies, Inc.
Condensed Consolidated Balance Sheets
(in thousands)
December 31, September 30,
2000 2000
ASSETS:
Current assets:
Cash $1,079 $2,616
Restricted cash 74 73
Accounts receivable, net 80,350 79,022
Inventories 8,365 9,296
Income taxes receivable 1,365 1,420
Prepaid expenses and other current assets 725 1,503
Total current assets 91,958 93,930
Property and equipment, net 7,246 7,487
Other assets 271 271
Total assets $99,475 $101,688
LIABILITIES AND STOCKHOLDERS' EQUITY:
Current liabilities:
Borrowings under lines of credit $27,781 $41,198
Accounts payable 24,330 12,906
Accrued liabilities 10,753 10,198
Other current liabilities 6,102 7,323
Current portion of notes payable 30 53
Total current liabilities 68,996 71,678
Long term liability and notes payable 5,463 5,463
Losses in excess of investments in
unconsolidated affiliates 7,069 8,040
Total liabilities 81,528 85,181
Total stockholders' equity 17,947 16,507
Total liabilities and stockholders' equity $99,475 $101,688
En Pointe Technologies, Inc.
Condensed Consolidated Statements of Operations
(in thousands, except per share data)
Three months ended
December 31,
2000 1999
Net sales $117,806 $136,233
Cost of sales 107,275 123,126
Gross profit 10,531 13,107
Selling and marketing expenses 7,381 12,374
General and administrative expenses 2,662 6,890
Operating income (loss) 488 (6,157)
Interest expense 346 595
Other income, net (60) (65)
Minority interest -- (512)
Income (loss) before income taxes and
income from reversal of losses of affiliates 202 (6,175)
Provision/(benefit) for income taxes 81 (331)
Income from reversal of losses of affiliates 1,000 --
Net income (loss) $1,121 $(5,844)
Net (loss) income per share:
Basic $0.17 $(0.96)
Diluted $0.17 $(0.96)
Weighted average shares outstanding:
Basic 6,551 6,109
Diluted 6,552 6,109
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