MANC Manchester Technologies (MM)

Manchester Reports Fiscal Fourth Quarter and Year End Results HAUPPAUGE, N.Y., Oct. 27 /PRNewswire-FirstCall/ -- Manchester Technologies, Inc. , a leading computer and network solutions provider, today announced financial results for the fourth quarter and fiscal year ended July 31, 2003. For the fiscal year ended July 31, 2003, Manchester posted revenues of $286.4 million as compared to $262.0 million for the fiscal year ended July 31, 2002. The Company posted a loss for the year of $2.6 million ($0.32 per diluted share), after a $2.5 million pre-tax charge for the impairment of goodwill and write-off of related assets in connection with the closing of the Company's Donovan operations, as compared with net income of $942,000 ($0.12 per diluted share) for last year. Weighted average common shares outstanding used for the computation of diluted earnings per share were 7,990,000 and 7,991,000 for the years ended July 31, 2003 and 2002, respectively. For the fiscal fourth quarter ended July 31, 2003, revenue was $73.7 million as compared with $67.2 million reported in the comparable period of the prior year. Net loss for the quarter was $2.6 million ($0.33 per diluted share), after a $2.5 million pre-tax charge for the impairment of goodwill and write-off of related assets in connection with the closing of the Company's Donovan operations, as compared with net income of $41,000 ($0.01 per diluted share) earned in the prior year's fourth quarter. Excluding the effects of closing the Donovan operations, the Company posted a net loss of $777,000, or $0.10 per diluted share, and $836,000, or $0.10 per diluted share, for the fiscal year and fourth quarter ended July 31, 2003, respectively, providing a better understanding of our results. The following table reconciles GAAP net income (loss) to net income (loss) before impairment charges, which excludes the charge for the impairment of goodwill and write-off of related assets. Three months ended Year ended July 31, July 31, 2003 2002 2003 2002 (in thousands) (in thousands) (unaudited) GAAP Net income (loss) $(2,647) $ 41 $(2,588) $ 942 Impairment of goodwill and write-off of related assets 2,481 -- 2,481 -- Tax effect (670) -- (670) -- Net income (loss) before Impairment charges $ (836) $ 41 $ (777) $ 942 Barry R. Steinberg, President and CEO of Manchester Technologies, Inc., stated, "We are pleased that fourth quarter revenues increased as compared with last year. In particular, our service revenues increased by more than 78% as compared to last year. Revenues from our Electrograph subsidiary increased by more than 22% as compared to last year. Demand for Electrograph's display technology solutions remains strong. However, our results continue to reflect the difficult dynamics that are currently impacting our business and the markets we serve. The competitive nature of the industry, pricing pressure, and economic and market forces continue to affect us, resulting in a decrease in our gross margin percentage." "Our healthy cash position and strong balance sheet should enable us to withstand the current business and industry cycles, and allow us to continue focusing on our strategy of providing business solutions, services, product fulfillment and display technologies that meet all of our customers' needs." The Company ended the quarter with cash and cash equivalents of $8.6 million, working capital of $30.7 million, total assets of $77.8 million and shareholders' equity of $43.9 million. About Manchester Technologies, Inc. Manchester Technologies, Inc. is a single-source solutions provider specializing in hardware and software procurement, custom networking, storage, display technology and enterprise and Internet solutions. Manchester engineers provide answers to companies' MIS needs by combining comprehensive analysis, design and integration services with a complete line of competitively priced products and peripherals from the industry's leading vendors. More information about the Company can be obtained by visiting the Company's website located at http://www.e-manchester.com/. Statement Under the Private Securities Litigation Reform Act This press release includes information that may constitute forward- looking statements within the meaning of the federal securities laws. All statements other than statements of historical fact, including, without limitation, those with respect to Manchester Technologies, Inc.'s objectives, plans and strategies set forth herein and those preceded by or that include the words "believes," "intends," "expects," "will," "plans," "anticipates," or similar expressions, are forward-looking statements. These forward-looking statements speak only as of the date of this press release. Manchester's actual results may differ materially from the results discussed herein as a result of a number of unknown factors, including, without limitation, there being no assurance that Manchester will be successful in its efforts to focus on higher-margin products and services, in identifying suitable acquisition candidates and in integrating acquired companies, or in attracting and retaining highly skilled technical personnel and sales representatives necessary to implement its growth strategies, or that Manchester will not be adversely affected by continued intense competition in the computer industry, continued deterioration in average selling prices of personal computers and display technologies, a decrease in the growth of the display technology market, a lack of product availability, deterioration in relationships with major manufacturers, a loss or decline in sales to any of its major customers, or any of the other risks set forth in Manchester's Annual Report on Form 10-K for the year ended July 31, 2002, and those set forth from time to time in Manchester's other filings with the Securities and Exchange Commission. Manchester assumes no obligation to update any of the information referenced in this press release. These documents are available through the Company, or through the Securities and Exchange Commission's Electronic Data Gathering Analysis and Retrieval system (EDGAR) at http://www.sec.gov/. Manchester Technologies, Inc. and Subsidiaries Consolidated Statements of Operations (in thousands, except per share amounts) Three months ended Year ended July 31, July 31, 2003 2002 2003 2002 (Unaudited) Revenue Products $67,810 $63,931 $266,891 $249,768 Services 5,863 3,283 19,553 12,242 73,673 67,214 286,444 262,010 Cost of revenue Products 60,525 56,001 238,125 216,471 Services 4,465 2,407 14,924 9,131 64,990 58,408 253,049 225,602 Gross profit 8,683 8,806 33,395 36,408 Selling, general and administrative expenses 9,800 8,781 34,559 35,050 Impairment of goodwill and write-off of related assets 2,481 -- 2,481 -- Income (loss) from operations (3,598) 25 (3,645) 1,358 Interest and other income (expense), net (121) 22 25 184 Income (loss) before income taxes (3,719) 47 (3,620) 1,542 Income tax provision (benefit) (1,072) 6 (1,032) 600 Net income (loss) $(2,647) $41 $ (2,588) $942 Net Income (loss) per share Basic $(0.33) $0.01 $(0.32) $0.12 Diluted $(0.33) $0.01 $(0.32) $0.12 Weighted average shares outstanding Basic 7,990 7,990 7,990 7,990 Diluted 7,990 7,992 7,990 7,991 Manchester Technologies, Inc. and Subsidiaries Consolidated Balance Sheets (in thousands, except per share amounts) July 31, July 31, 2003 2002 Assets Current assets: Cash and cash equivalents $8,553 $ 8,963 Accounts receivable, net of allowance for doubtful accounts of $1,426 and $956, respectively 35,117 32,561 Inventory 9,605 11,165 Deferred income taxes 603 403 Prepaid income taxes 1,704 426 Prepaid expenses and other current assets 709 526 Total current assets 56,291 54,044 Property and equipment, net 13,985 7,012 Goodwill, net 6,439 8,311 Deferred income taxes 757 803 Other assets 278 491 Total assets $77,750 $70,661 Liabilities and Shareholders' Equity Current liabilities: Accounts payable and accrued expenses $24,752 $23,078 Deferred service contract revenue 666 868 Current portion of capital lease obligations 212 -- Total current liabilities 25,630 23,946 Deferred compensation payable 263 203 Capital Lease obligations, net of current portion 7,923 -- Total liabilities 33,816 24,149 Commitments and contingencies Shareholders' equity: Preferred stock, $.01 par value, 5,000 shares authorized, none issued -- -- Common stock, $.01 par value; 25,000 shares authorized, 7,990 and 7,990 shares issued and outstanding 80 80 Additional paid-in capital 18,942 18,942 Deferred compensation (13) (23) Retained earnings 24,925 27,513 Total shareholders' equity 43,934 46,512 Total liabilities and shareholders' equity $77,750 $70,661 DATASOURCE: Manchester Technologies, Inc. CONTACT: Elan Yaish, Chief Financial Officer of Manchester Technologies, Inc., +1-631-951-7060, fax, +1-631-951-7639, or Web site: http://www.e-manchester.com/

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