ePlus inc. (NASDAQ:PLUS) Q4 2020 Earnings Conference Call - Final Transcript

May 21, 2020 • 04:30 pm ET

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ePlus inc. (NASDAQ:PLUS) Q4 2020 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Ladies and gentlemen, thank you for standing by, and welcome to the ePlus Inc. Q4 Fiscal Year 2020 Earnings Release Conference Call. [Operator Instructions]

I would now like to hand the conference over to your speaker today, Kley Parkhurst, Senior Vice President. Thank you. Please go ahead.

Executive
Kleyton Parkhurst

Thank you for joining us today. On the call is Mark Marron, CEO and President; Elaine Marion, CFO; Darren Raiguel, COO and President of ePlus Technology; and Erica Stoecker, General Counsel.

I want to take a moment to remind you that the statements we make this afternoon, that are not historical facts, may be deemed to be forward-looking statements and are based on management's current plans, estimates and projections. Actual and anticipated future results may vary materially due to certain risks and uncertainties detailed in the earnings release we issued this afternoon and our periodic filings with the Securities and Exchange Commission, including our Form 10-K for the year ended March 31, 2020 when filed. The company undertakes no responsibility to update any of these forward-looking statements in light of new information or future events. In addition, during the call, we may make reference to non-GAAP financial measures and we've included a GAAP financial reconciliation in our earnings release, which is posted on the Investor Information section of our website at www.eplus.com.

I'd now like to turn the call over to Mark Marron. Mark?

Executive
Mark Marron

Thank you, Kley, and thank you everyone for participating in today's call to discuss our fourth quarter and full year fiscal 2020 results. I'd like to start by thanking all ePlus associates for their perseverance and dedication in serving our customers and supporting each other during these unusual and stressful times. We came together as a team by adapting and adjusting to this new market, proving not only that our business model is sound, but that we have a durable and resilient culture. Our teams also did a great job pivoting and customizing our solutions to meet evolving customer requirements, enabling remote work forces with leading-edge collaboration networking cloud and security solutions.

The fourth quarter, with revenue growth of 13%, marked the successful completion of a strong year for ePlus. COVID-19 had a modest impact on our revenue. Some non-critical orders were delayed or deferred by customer choice or supply chain constraints, but were partially offset by additional spend on investments required to support their remote workforce, transition and related IT projects.

In the fourth quarter, our gross margin was 25.1%, reflecting a favorable mix and the positive contribution from our financing business. Operating income increased 23.6% to $17.9 million, and adjusted EBITDA was up 20% to $23.5 million. Elaine will provide more details in her remarks. For fiscal 2020, net sales were up 16% and our gross margin increased 50 basis points to 24.6%. This translated into a 19.8% increase in operating income and an 18.9% increase in adjusted EBITDA.

We ended the year with the strong balance sheet, which provides the resources to execute on opportunistic initiatives to