ePlus (NASDAQ: PLUS) reported Q1 EPS of $1.30, $0.17 better than the analyst estimate of $1.13. Revenue for the quarter came in at $355 million versus the consensus estimate of $355.46 million.

“Our business performed well across key profitability metrics in the first quarter of fiscal 2020 as we worked closely with customers to support their evolving IT product and service needs during these challenging times. Adjusted gross billings held steady, and gross profit increased 6.4% as consolidated gross margin increased to 27.8%. Diluted earnings per share grew 8.3%. Our performance reflected a favorable mix as higher margin services revenue grew 4.4%, in-line with our strategy of increasing managed and recurring services which mitigated the impact of lower product sales,” said Mark Marron, president and chief executive officer.

“Our focus on critical IT solutions most relevant to customers in this difficult pandemic environment has enabled ePlus to report strong earnings comparisons. During the quarter, we saw a marked increase in third-party maintenance, software assurance, and subscriptions, as customers invested to support remote workforce initiatives.”

Balance Sheet Highlights

As of June 30, 2020, ePlus had cash and cash equivalents of $144.4 million, compared with $86.2 million as of March 31, 2020. The increase is primarily the result of a decrease in working capital in the technology segment and an increase in non-recourse debt. Inventory, which represents equipment ordered by customers but not yet delivered, increased 85.7% due to ongoing projects and some delivery delays due to temporary closures at our customer sites related to COVID-19. Total shareholder’s equity was $502.7 million, compared with $486.1 million as of March 31, 2020. Total shares outstanding were 13.6 million and 13.5 million on June 30, 2020 and March 31, 2020, respectively.

Summary and Outlook

“ePlus is effectively managing through difficult business conditions with a strong balance sheet, a favorable mix of products and services and a dedicated team of IT professionals, who have proven their commitment to customer service.

“Our focus on the high demand areas of Cloud, Security and Digital Infrastructure are all the more relevant in today’s business environment. Our diversified customer base, which we believe represents minimal exposure to those industries hardest hit by the economic downturn, depends on ePlus to continue to deliver critical IT solutions that enable them to effectively navigate the current marketplace challenges.

“We appreciate the excellent execution demonstrated by the ePlus team during these unprecedented times, and as a company, we have taken precautions to protect the health and safety of our employees. Our strong financial position provides the resources to continue to make strategic investments opportunistically. In summary, we believe we are well positioned to manage through near-term pandemic-related disruptions to our business and to achieve growth over the long term,” Mr. Marron concluded.

For earnings history and earnings-related data on ePlus (PLUS) click here.