Eplus Inc. · NASDAQ:PLUS
Eplus — Investor Presentation (May 2020)
30 slides from Eplus's investor presentation, May 2020
Slide 1: Investor Presentation
ePlus inc. Investor Presentation May 2020
Slide 2: Safe Harbor Statement
Safe Harbor Statement Statements in this presentation that are not historical facts may be deemed to be "forward-looking statements." Actual and anticipated future results may vary materially due to certain risks and uncertainties, including, without limitation, possible adverse effects resulting fr
Slide 3: Mark Marron, Chief Executive Officer
Mark Marron Chief Executive Officer © 2020 ePlus inc. I 3
Slide 4: ePlus at a Glance
ePlus at a Glance + Leading provider of technology solutions focused on cloud, security, and digital infrastructure + Technology partners include Cisco, Dell Technologies, HPE, NetApp, Palo Alto Networks and VMware + FY20 adjusted gross billings: $2.2 billion § 9% CAGR FY16-FY20 + FY20 net sales: $1
Slide 5: Experienced Leadership Team
Experienced Leadership Team Mark Elaine Darren Marron Marion Raiguel Chief Executive Officer Chief Financial Officer Chief Operating Officer, Joined ePlus in 2005 Joined ePlus in 1998 President of ePlus 30+ Years of Experience 25+ Years of Experience Technology, inc. Joined ePlus in 1997 25+ Years o
Slide 6: Where technology means more.
Where technology means more. Helping customers use technology to successfully navigate business challenges is at the center of everything we do. © 2020 ePlus inc. © © 2020 2020 ePlus ePlus inc. inc. I 6
Slide 7: ePlus Forward Focused Solutions
ePlus Forward Focused Solutions ü ü ü ü ü ü ü ü ü ü ü ü ü ü ü ü ü ü ü ü ü ü ü ü SECURITY ü ü ü ü ü SERVICES FINANCING ü ü ü ü ü ü ü ü ü ü ü ü ü ü © 2020 ePlus inc. ©©2020 2020ePlus ePlusinc. inc. I 7
Slide 8: COVID-19 Impact
COVID-19 Impact + Majority of workforce at home since mid- March, no material impact on operations + Onsite personnel conforming to customer/partner requirements and local ordinances + Minimal impact in March quarter + Future IT spending is impacted by general economic trends + Solution set easily p
Slide 9: The CIO Today: Unpredictability from COVID
The CIO Today: Unpredictability from COVID causes a heightened focus on: Cloud Remote Managed and AI: Analytics and Collaboration Security Acceleration Workforce Professional Automation Enablement Services “Business executives who experienced firsthand the shortcomings of legacy technology environme
Slide 10: Well Positioned within the IT Ecosystem
Well Positioned within the IT Ecosystem Our range of complex solutions and services places us in high end of the IT market Vendors Distributors VARs IT Solutions Services/Integrators 25 – 65% GM 5 – 13% GM 13 – 16% GM 20 – 25% GM 29 – 32% GM GROSS MARGIN 1 INCREASING CUSTOMER VALUE AND VENDOR MARGIN
Slide 11: Expanding Footprint
Expanding Footprint SINGAPORE UK Resources to implement locally and globally INDIA INTERNATIONAL OFFICES REGIONAL OFFICE SALES OFFICES MANAGED SERVICES CENTERS INTEGRATION CENTERS 35+ locations serving the U.S., Europe, and Asia-Pac 24/7/365 managed services operations and integration centers strate
Slide 12: Targeted M&A Strategy with Track Record of Success
Targeted M&A Strategy with Track Record of Success + August 2019 + January 2019 + September 2017 + May 2017 + Southern and Western Virginia + Southern and central Virginia + Chicago and Indianapolis data + Cloud-based services, solutions centers and DevOps + New customers, SLED focus, + Security man
Slide 13: Independent Provider with Deep Strategic Relationships
Independent Provider with Deep Strategic Relationships SELECT STRATEGIC PARTNERS + Excellent channel partner for ePlus, representing 40% of technology segment net sales 1 + All core products plus data center, collaboration, security, enterprise software, and COMPLEMENTED BY ADDITIONAL RELATIONSHIPS
Slide 14: Broad and Diverse Customer Base
Broad and Diverse Customer Base GOVERNMENT & TELECOM, ENTERTAINMENT FINANCIAL TECHNOLOGY EDUCATION & MEDIA SERVICES HEALTHCARE OTHER 21% 16% 19% 13% 15% 16% ©© 2020 2020ePlus ePlusinc. inc. I 14
Slide 15: A Commitment to Corporate Social Responsibility
A Commitment to Corporate Social Responsibility I 15
Slide 16: Why ePlus
Why ePlus Technology evolves quickly, and every new development exposes our customers to new opportunities and new challenges. ePlus is the partner that can help them navigate with confidence and agility. “Do what it takes” Industry-leading Comprehensive Proven processes Highly-accessible, dedicatio
Slide 17: Elaine Marion, Chief Financial Officer
Elaine Marion Chief Financial Officer © 2020 ePlus inc. I 17
Slide 18: Strong Financial Results
Strong Financial Results FYE March 31 + Operations are conducted through two segments. The technology segment sells information technology products, software and services, while the financing segment provides lease and financing solutions. + The majority of our net sales are derived from our technol
Slide 19: Strong Financial Results
Strong Financial Results FYE March 31 + Service revenue includes professional services, managed services, and staffing services. + From FY17 to FY20, service revenue has increased at a compound annual rate of 26%. + Service revenue as a percentage of net sales grew from 6.9% in FY17 to 12.2% in FY20
Slide 20: Strong Financial Results
Strong Financial Results FYE March 31 + Consolidated gross profit increased at a compounded annual rate of 11% from FY16 to FY20. Technology segment represented 87% of our total gross profit in FY20. + Consolidated gross margin has increased from 21.7% in FY15 to 24.6% in FY20. + Technology segment
Slide 21: Strong Financial Results
Strong Financial Results FYE March 31 + From FY16 to FY20, net earnings increased at a compounded annual rate of 11% as a result of focusing on revenue and gross profit growth. + EPS and non-GAAP EPS CAGR were 14% and 10%, respectively, from FY16 to FY20. + Non-GAAP EPS excluded other income (expens
Slide 22: Strong Financial Results
Strong Financial Results FYE March 31 + Adjusted EBITDA represents net earnings before interest expense, depreciation and amortization, share based compensation, acquisition and integration expenses, provision for income taxes, and other income. Interest on notes payable and depreciation expense pre
Slide 23: Growing Customer Facing Personnel
Growing Customer Facing Personnel + Acquiring consultative sales professionals to bring successful business outcomes to our customers. + Focused on growing engineering talent in cloud, security, and digital infrastructure. + Customer facing personnel increased by 472 from FY16 to FY20, which represe
Slide 24: Strong Balance Sheet
Strong Balance Sheet $ in millions + $86 million in cash and equivalents Assets March 31, 2020 March 31, 2019 + Financing portfolio of $144 million, representing Cash and equivalents $ 86 $ 80 Accounts receivable 412 342 investments in leases and notes Inventory 50 50 Financing investments 144 123 G
Slide 25: Customized Solutions. Measurable Results. Q & A
Customized Solutions. Measurable Results. Cloud Positioned squarely at the forefront of today’s most Data Center transformative technologies, ePlus’ solutions, services, and financing expertise help organizations imagine, Security implement, and achieve more from technology. Networking … Collaborati
Slide 26: Appendix
Appendix © 2020 ePlus inc. I 26
Slide 27: Non-GAAP Financial Information
Non-GAAP Financial Information $ in thousands Year Ended March 31, 2020 2019 2018 2017 2016 Technology segment net sales [1] $ 1,530,138 $ 1,329,520 $ 1,372,765 $ 1,294,937 $ 1,169,065 Costs incurred related to sales of third-party maintenance, software assurance and subscirption/SaaS licenses, and
Slide 28: Non-GAAP Financial Information
Non-GAAP Financial Information $ in thousands, except per share information Year Ended March 31, 2020 2019 2018 2017 2016 GAAP: Earnings before tax $ 95,959 $ 86,230 $ 83,891 $ 86,112 $ 75,751 Share based compensation 7,954 7,244 6,464 6,025 5,711 Acquisition and integration expense 1,676 1,813 2,15
Slide 29: Return on Invested Capital
Return on Invested Capital $ in thousands Year Ended March 31, 2020 2019 2018 2017 2016 Numerator Operating income $ 95,279 $ 79,534 $ 84,239 $ 85,732 $ 75,751 Less: Taxes [1] (26,678) (21,236) (28,894) (35,407) (30,982) Net operating profit after taxes $ 68,601 $ 58,298 $ 55,345 $ 50,325 $ 44,769 D
Slide 30: Investor Relations
Investor Relations Kley Parkhurst, SVP (703) 984-8150 investors@eplus.com ePlus inc. 13595 Dulles Technology Drive Herndon, VA 20171-3413 (703) 984-8400 / eplus.com © 2020 ©2020 ePlus inc. All ePlus inc. Confidential rights reserved. andand ePlus, the ePlus logo, Proprietary. all referenced product