MANC Manchester Technologies (MM)

HAUPPAUGE, N.Y., Dec. 13 /PRNewswire-FirstCall/ -- Manchester Technologies, Inc. (NASDAQ:MANC), a leading distributor of display technology solutions and plasma display monitors, today announced financial results for the first quarter ended October 31, 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 in the accompanying condensed consolidated statements of income. Revenue from continuing operations for the quarter was $46.9 million as compared with $45.4 million for the comparable quarter last year. Income from continuing operations for the quarter was $1.8 million or $0.21 per diluted share as compared with $844,000 or $0.10 per diluted share reported a year ago. Weighted average common shares outstanding used for the computation of diluted earnings per share were 8,434,000 and 8,251,000, respectively. Barry R. Steinberg, President and CEO of Manchester Technologies, Inc., stated, "We are pleased with the increase in revenues and profitability as compared to last year. In particular, sales of our display technology solutions increased by 12% as compared to last year. However, this increase was partially offset by decreased sales of computer hardware to dealers and systems integrators as a result of our inability to procure products for this line of business." The Company ended the quarter with cash and cash equivalents of $20.9 million, working capital of $37.4 million, total assets of $74.4 million and shareholders' equity of $45.0 million. About Manchester Technologies, Inc. Manchester Technologies, Inc. is a distributor of display technology solutions and plasma display monitors through its subsidiary Electrograph Systems, Inc. and is a distributor of computer hardware, primarily to dealers and system integrators. More information about the Company and Electrograph can be obtained by visiting their websites located at http://www.e-manchester.com/ and the website of its subsidiary at http://www.electrograph.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," "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, 2004, 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 Income (in thousands, except per share amounts) (Unaudited) Three months ended October 31, October 31, 2004 2003 Revenue $46,881 $45,378 Cost of revenue 40,849 40,644 Gross profit 6,032 4,734 Selling, general and administrative expenses 3,129 3,340 Income from operations 2,903 1,394 Interest and other income (expense), net 15 (20) Income from continuing operations before income taxes 2,918 1,374 Income tax provision 1,167 530 Income from continuing operations 1,751 844 Discontinued operations Income (loss) from operations of discontinued component 995 (855) Income tax (provision) benefit (398) 322 Income (loss) from discontinued operations 597 (533) Net income $2,348 $311 Income per share from continuing operations Basic $0.21 $0.11 Diluted $0.21 $0.10 Loss per share from discontinued operations Basic $0.07 $(0.07) Diluted $0.07 $(0.07) Net income per share Basic $0.29 $0.04 Diluted $0.28 $0.04 Weighted average shares outstanding Basic 8,226 7,990 Diluted 8,434 8,251 Manchester Technologies, Inc. and Subsidiaries Condensed Consolidated Balance Sheets (in thousands, except per share amounts) October 31, 2004 July 31, 2004 (Unaudited) Assets Current assets: Cash and cash equivalents $20,933 $16,881 Accounts receivable, net of allowance for doubtful accounts of $1,772 and $2,848, respectively 22,207 15,530 Inventory 12,922 20,301 Deferred income taxes 1,212 1,212 Prepaid taxes 630 916 Prepaid expenses and other current assets 1,196 1,266 Total current assets 59,100 56,106 Property and equipment, net 9,699 9,890 Goodwill, net 3,735 3,735 Deferred income taxes 1,728 1,728 Other assets 97 183 Total assets $74,359 $71,642 Liabilities and Shareholders' Equity Current liabilities: Accounts payable and accrued expenses $21,439 $21,492 Current portion of capital lease obligations 255 246 Total current liabilities 21,694 21,738 Deferred compensation payable 98 98 Capital lease obligations, net of current portion 7,615 7,683 Total liabilities 29,407 29,519 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, 8,290 and 8,163 shares issued and outstanding 83 82 Additional paid-in capital 20,077 19,597 Retained earnings 24,792 22,444 Total shareholders' equity 44,952 42,123 Total liabilities and shareholders' equity $74,359 $71,642 DATASOURCE: Manchester Technologies, Inc. CONTACT: Elan Yaish, Chief Financial Officer, +1-631-951-7060, or Fax, +1-631-951-7639, Web site: http://www.e-manchester.com/

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