MANC Manchester Technologies (MM)

Manchester Technologies, Inc. Announces Fiscal Third Quarter Results HAUPPAUGE, N.Y., June 17 /PRNewswire-FirstCall/ -- Manchester Technologies, Inc. (NASDAQ:MANC), today announced financial results for its third fiscal quarter and nine months ended April 30, 2004. On May 28, 2004, the Company sold its end-user information technology fulfillment and professional services business to ePlus, inc., a leading provider of Enterprise Cost Management, in an all cash transaction. The results of operations for the end-user information technology fulfillment and professional services business have been recorded as discontinued operations on the accompanying condensed consolidated statements of operations. Revenue from continuing operations for the quarter was $42.4 million as compared with $36.5 million for the comparable quarter last year. Income from continuing operations for the quarter was $432,000 or $0.05 per diluted share as compared with $316,000 or $0.04 per diluted share reported a year ago. Weighted average common shares outstanding used for the computation of diluted earnings per share were 8,533,000 and 7,990,000, respectively. Revenue from continuing operations for the nine months was $132.9 million as compared with $123.6 million for the first nine months of last year. Income from continuing operations for the nine months was $2.0 million or $0.24 per diluted share as compared with $2.8 million or $0.35 per diluted share reported a year ago. Barry R. Steinberg, President and CEO of Manchester Technologies, Inc., stated, "As a result of the sale of our end-user IT product and service business on May 28, 2004, we are now better positioned to concentrate our efforts on our display solutions business. The display technology market is expected to continue to grow and we remain a dominant player in this market. Revenues from the sales of display solutions increased 21% as compared to the third quarter of last year and 17% as compared to the first nine months of last year." The Company ended the quarter with cash and cash equivalents of $13.2 million, working capital of $35.3 million, total assets of $94.1 million and shareholders' equity of $44.9 million. About Manchester Technologies, Inc. Manchester Technologies, Inc. is a single-source solutions provider specializing in display technology, and prior to the sale of its end-user IT product and services business, hardware and software procurement, custom networking, security, IP telephony, remote management, application development/e-commerce, storage, enterprise and Internet solutions. Manchester offers a complete line of products and peripherals for customers' display technology requirements. 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, 2003, 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 Condensed Consolidated Statements of Operations (in thousands, except per share amounts) Unaudited Three months ended Nine months ended April 30, April 30, 2004 2003 2004 2003 Revenue $42,448 $36,533 $132,943 $123,636 Cost of Revenue 38,509 33,137 119,712 110,432 Gross profit 3,939 3,396 13,231 13,204 Selling, general and administrative expenses 3,149 2,847 9,735 8,657 Income from operations 790 549 3,496 4,547 Interest and other income (expense), net (70) (22) (166) 146 Income from continuing operations before income taxes 720 527 3,330 4,693 Income tax provision 288 211 1,312 1,877 Income from continuing operations 432 316 2,018 2,816 Discontinued operations Loss from operations of discontinued component (714) (484) (2,314) (4,594) Income tax benefit 285 194 905 1,837 Loss on discontinued operations (429) (290) (1,409) (2,757) Net income $3 $26 $609 $59 Income per share from continuing operations Basic $0.05 $0.04 $0.25 $0.35 Diluted $0.05 $0.04 $0.24 $0.35 Loss per share from discontinued operations Basic $(0.05) $(0.04) $(0.18) $(0.35) Diluted $(0.05) $(0.04) $(0.17) $(0.35) Net income per share Basic $0.00 $0.00 $0.08 $0.01 Diluted $0.00 $0.00 $0.07 $0.01 Weighted average shares outstanding Basic 8,070 7,990 8,017 7,990 Diluted 8,533 7,990 8,364 7,990 Manchester Technologies, Inc. and Subsidiaries Condensed Consolidated Balance Sheets (in thousands except per share amounts) April 30, July 31, 2004 2003 (Unaudited) Assets Current assets: Cash and cash equivalents $13,241 $8,553 Accounts receivable, net 33,297 35,117 Inventory 25,805 9,605 Deferred income taxes 603 603 Prepaid taxes 42 1,704 Prepaid expenses and other current assets 703 709 Assets held for sale 2,881 -- Total current assets 76,572 56,291 Property and equipment, net 12,894 13,985 Goodwill, net 3,735 6,439 Deferred income taxes 757 757 Other assets 134 278 Total assets $94,092 $77,750 Liabilities and shareholders' equity Current liabilities: Accounts payable and accrued expenses $40,992 $24,752 Deferred service contract revenue -- 666 Current portion of capital lease obligations 237 212 Total current liabilities 41,229 25,630 Deferred compensation payable 263 263 Capital lease obligations, net of current portion 7,749 7,923 Total liabilities 49,241 33,816 Shareholders' equity: Preferred stock, $.01 par value; 5,000 shares authorized, none issued -- -- Common stock, $.01 par value; 25,000 shares authorized, 8,071 and 7,990 shares issued and outstanding 81 80 Additional paid-in capital 19,249 18,942 Deferred compensation (13) (13) Retained earnings 25,534 24,925 Total shareholders' equity 44,851 43,934 Total liabilities and shareholders' equity $94,092 $77,750 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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