ePlus Reports Third Quarter and First Nine Months Financial Results
HERNDON, Va., Feb. 6, 2024 /PRNewswire/ --
Third Quarter Fiscal Year 2024
Net sales decreased 18.4% to $509.1 million from last year's third quarter; technology business net sales decreased 19.2% to $494.2 million; services revenues increased 10.7% to $74.7 million.
Technology business gross billings decreased 11.3% to $797.0 million.
Consolidated gross profit decreased 3.3% to $133.8 million.
Consolidated gross margin was 26.3%, 410 bps higher than last year's 22.2%.
Net earnings decreased 23.6% to $27.3 million.
Adjusted EBITDA decreased 13.4% to $46.2 million.
Diluted net earnings per common share decreased 23.9% to $1.02. Non-GAAP diluted net earnings per common share decreased 14.5% to $1.18.
First Nine Months of Fiscal Year 2024
Net sales increased 6.0% to $1,670.8 million; technology business net sales increased 6.5% to $1,631.8 million; services revenues increased 8.9% to $213.2 million.
Technology business gross billings increased 3.4% to $2,495.5 million.
Consolidated gross profit increased 9.2% to $420.4 million.
Consolidated gross margin was 25.2%, an 80-bps improvement from 24.4% last year.
Net earnings increased 8.4% to $93.8 million.
Adjusted EBITDA increased 8.2% to $153.6 million.
Diluted net earnings per common share increased 8.6% to $3.52. Non-GAAP diluted net earnings per common share increased 9.0% to $3.99.
ePlus inc. (NASDAQ: PLUS), a leading provider of technology and financing solutions, today announced financial results for the three months and nine months ended December 31, 2023.
Management Comment
"In the third quarter, demand within our technology business slowed as improved product availability in the first half of the fiscal year led our larger customers to focus on completing previously delayed projects. Additionally, we saw sales cycle timelines extend as customers work through their project backlog. As we enter our fiscal fourth quarter, customer purchasing trends have improved, which supports the lower end of our fiscal 2024 financial guidance range," said Mark Marron, President and CEO of ePlus. "We continued to experience favorable demand trends within our annuity-like services business in the third quarter, achieving 22% year-over-year growth in managed services revenue, which together with a shift in product mix and a favorable contribution from our financing segment, resulted in a significant improvement in consolidated gross margin.
Mr. Marron continued, "ePlus has delivered strong financial results on a fiscal year-to-date basis, which we attribute to the successful execution of our growth strategy and unwavering focus on providing value-added solutions to our customers. Supported by our extensive partnerships throughout the IT industry, we continue to focus on delivering superior solutions that optimize our customers' investments across the technology stack."
Third Quarter Fiscal Year 2024 Results
For the third quarter ended December 31, 2023, as compared to the third quarter ended December 31, 2022:
Consolidated net sales decreased 18.4% to $509.1 million, from $623.5 million.
Technology business net sales decreased 19.2% to $494.2 million, from $611.8 million due to lower product sales. Technology business gross billings decreased 11.3% to $797.0 million from $898.8 million.
Product sales decreased 22.9% to $419.5 million due to declines in net sales of networking equipment, cloud and security products. Product gross margin was 21.9%, higher than 19.2% last year mainly due to a larger proportion of third-party maintenance and services sold in the third quarter of 2024 which are recorded on a net basis.
Professional service revenues increased 2.3% from last year to $40.0 million. Gross profit increased 13.3% and gross margins expanded 420 bps to 43.3% from 39.1% last year due to an increase in project related services offset by declines in demand for staff augmentation services.
Managed service revenues increased 22.4% to $34.6 million due to ongoing growth in these offerings, including Enhanced Maintenance Support, Service Desk, and Security Operations Center services. Gross profit increased 36.4% from last year due to the scaled growth in these services resulting in a 330-bps gross margin improvement.
Financing business segment net sales increased 27.3% to $14.9 million, from $11.7 million due to increases in portfolio earnings and transactional gains. Gross profit in the financing business segment increased by $3.0 million due to higher net sales combined with higher gross margin.
Consolidated gross profit decreased 3.3% to $133.8 million, from $138.4 million, due to a decline in product net sales. Consolidated gross margin was 26.3%, increased by 410 bps from last year of 22.2%, which was primarily due to increases in both product and service margin along with higher gross margin in our financing business.
Consolidated operating expenses were $95.8 million, up 4.2% from $91.9 million last year, primarily due to increases in salaries and benefits from additional headcount, as well as increases in acquisition-related depreciation and amortization expenses. Our headcount at the end of the quarter was 1,897, up 152 from a year ago, partially due to the acquisition of Network Solutions Group ("NSG"). Of the 152 additional employees, 133 were customer facing employees.
Consolidated operating income decreased 18.1% to $38.0 million. Earnings before tax decreased 22.2% to $38.4 million as we had foreign currency transaction gain of $0.9 million last year and other income of $1.9 million related to our claim in a class action lawsuit received in December 2022.
Our effective tax rate for the current quarter was 29.0%, higher than the prior year quarter of 27.7% primarily due to an unfavorable return to provision adjustment in the three months ended December 31, 2023, compared to a favorable return to provision adjustment in same three-month period in the prior year.
Net earnings decreased 23.6% to $27.3 million.
Consolidated adjusted EBITDA decreased 13.4% to $46.2 million.
Diluted net earnings per common share was $1.02, compared with $1.34 in the prior year quarter. Non-GAAP diluted net earnings per common share was $1.18, compared with $1.38 last year.
First Nine Months of Fiscal Year 2024 Results
For the nine months ended December 31, 2023, as compared to the nine months ended December 31, 2022:
Consolidated net sales increased 6.0% to $1,670.8 million, from $1,575.5 million.
Technology business net sales increased 6.5% to $1,631.8 million, from $1,532.0 million due to higher sales of product and managed services. Technology business gross billings increased 3.4% to $2,495.5 million from $2,412.8 million.
Product sales grew 6.2% to $1,418.6 million due to an increase in net sales of networking equipment and collaboration products, offset by a decline in net sales of cloud and security products. Gross profit from sales of products increased 9.2% to $308.1 million due to higher sales combined with a shift in customer mix that resulted in higher margins.
Professional service revenues declined 0.4% due to lower staff augmentation services from softer demand. Gross profit increased 6.2% as the gross margins expanded 260 bps to 42.0% from 39.4% last year, due to the change in mix between project services and staff augmentation.
Managed service revenues increased 22.1% to $99.3 million due to ongoing growth in these offerings, including Enhanced Maintenance Support, Service Desk, and Security Operations Center services. Gross profit from managed services increased 36.6% to $31.0 million due to the scaled growth in these services combined with a 330-bps improvement in gross margin.
Financing business segment net sales decreased 10.2% to $39.1 million, from $43.5 million, due to lower post-contract earnings, resulting in a decrease of $1.9 million in gross profit, partially offset by a decline in cost of leased equipment sold.
Consolidated gross profit increased 9.2% to $420.4 million, from $385.2 million, due to increased net sales volume. Consolidated gross margin was 25.2%, higher than last year's 24.4% and attributed to improved margins in both product and services within our technology business and in our financing business segment.
Consolidated operating expenses were $291.2 million, up 11.4% from $261.5 million last year, primarily due to increases in salaries and benefits as a result of additional headcount, increasing by 152 employees due to organic and acquisition-related headcount, variable compensation stemming from higher gross profit, and acquisition-related amortization and expenses.
Consolidated operating income increased 4.4% to $129.2 million. During the nine months ended December 31, 2023, we had other income of $0.7 million compared to other expense of $3.1 million last year, which included foreign currency transaction losses of $5.2 million, partially offset by $1.9 million related to our claim in a class action lawsuit. Earnings before tax increased 7.7% to $129.9 million.
Our effective tax rate for the current year period was 27.8%, lower than last year's 28.3%, due to lower state effective tax rates and less non-deductible executive compensation in the current period.
Net earnings increased 8.4% to $93.8 million.
Consolidated Adjusted EBITDA increased 8.2% to $153.6 million.
Diluted net earnings per common share was $3.52, compared with $3.24 in the prior year. Non-GAAP diluted net earnings per common share was $3.99, compared with $3.66 last year.
Balance Sheet Highlights
As of December 31, 2023, cash and cash equivalents were $142.2 million, up from $103.1 million as of March 31, 2023, primarily due to improvements in working capital, offset by the acquisition of NSG and repurchases of our common stock. Inventory decreased 10.4% to $218.0 million compared with $243.3 million as of March 31, 2023. Total stockholders' equity was $877.8 million, compared with $782.3 million as of March 31, 2023. Total shares outstanding were 27.0 million and 26.9 million on December 31, 2023 and March 31, 2023, respectively.
Fiscal Year Guidance
ePlus expects to achieve the low end of its fiscal year 2024 revenue and adjusted EBITDA guidance ranges of $2.23 billion to $2.33 billion, and $200 million to $215 million, respectively. This guidance assumes, in part, continued improvement in the supply chain that will enable the execution of previously delayed customer projects. The Company cannot predict with reasonable certainty and without unreasonable effort, the ultimate outcome of unusual gains and losses, the occurrence of matters creating GAAP tax impacts, fluctuations in interest expense and share-based compensation, and acquisition-related expenses. These items are uncertain, depend on various factors, and could be material to the Company's results computed in accordance with GAAP. Accordingly, the Company is unable to provide a reconciliation of GAAP net earnings to adjusted EBITDA and adjusted EBITDA margin for the full year 2024 forecast.
Summary and Outlook
"Following an extended period of robust IT investment, overall IT spending has moderated given economic uncertainty. Within this environment, ePlus has outperformed, driven by the efforts of our talented team and balanced growth across our portfolio of innovative products and services. We remain committed to delivering exceptional solutions for our customers in our strategic focus areas, while expanding our capabilities to capture new AI opportunities moving forward," concluded Mr. Marron.
Recent Corporate Developments/Recognitions
In the month of January 2024:
Acquired PEAK Resources, Inc., a data center solutions provider in Denver, Colorado.
Joined the U.S. Chamber of Commerce.
Launched the 2024 GRIT: Girls Re-Imagining Tomorrow® program across the U.S.
In the month of November 2023:
Achieved AWS Resilience Competency.
Awarded the Global Customer Experience (CX) Partner of the Year at Cisco Partner Summit.
Conference Call Information
ePlus will hold a conference call and webcast at 4:30 p.m. ET on February 6, 2024:
A replay of the call will be available approximately two hours after the call through February 13, 2024. A transcript of the call will also be available on the ePlus Investor Relations website at https://www.eplus.com/investors.
About ePlusinc.
ePlus has an unwavering and relentless focus on leveraging technology to create inspired and transformative business outcomes for its customers. Offering a robust portfolio of solutions, as well as a full set of consultative and managed services across the technology spectrum, ePlus has proudly achieved more than 30 years of success in the business, carrying customers forward through adversity, rapidly changing environments, and other obstacles. ePlus is a trusted advisor, bringing expertise, credentials, talent and a thorough understanding of innovative technologies, spanning security, cloud, networking, collaboration and emerging solutions, to organizations across all industry segments. With complete lifecycle management services and flexible payment solutions, ePlus' more than 1,890 associates are focused on cultivating positive customer experiences and are dedicated to their craft, harnessing new knowledge while applying decades of proven experience. ePlus is headquartered in Virginia, with offices in the United States, UK, Europe, and Asia-Pacific. For more information, visit www.eplus.com, call 888-482-1122, or email info@eplus.com. Connect with ePlus on LinkedIn, Twitter, Facebook, and Instagram.
ePlus, Where Technology Means More®.
ePlus® and ePlus products referenced herein are either registered trademarks or trademarks of ePlus inc. in the United States and/or other countries. The names of other companies and products mentioned herein may be the trademarks of their respective owners.
Forward-looking statements
Statements in this press release that are not historical facts may be deemed to be "forward-looking statements," including, among other things, statements regarding the future financial performance of ePlus (including the guidance for the full fiscal year 2024). Actual and anticipated future results may vary materially due to certain risks and uncertainties, including, without limitation, national and international political instability fostering uncertainty and volatility in the global economy including exposure to fluctuation in foreign currency rates, interest rates, and inflation, including increases in our costs and our ability to increase prices to our customers which may result in adverse changes in our gross profit; significant adverse changes in, reductions in, or loss of one or more of our larger volume customers or vendors; supply chain issues, including a shortage of Information Technology ("IT") products, may increase our costs or cause a delay in fulfilling customer orders, or increase our need for working capital, or completing professional services, or purchasing IT products or services needed to support our internal infrastructure or operations, resulting in an adverse impact on our financial results; maintaining and increasing advanced professional services by recruiting and retaining highly skilled, competent personnel, and vendor certifications; our ability to secure our own and our customers' electronic and other confidential information, while maintaining compliance with evolving data privacy and regulatory laws and regulations; ongoing remote work trends, and the increase in cybersecurity attacks that have occurred while employees work remotely; our ability to raise capital, maintain or increase as needed our lines of credit with vendors or floor planning facility, obtain debt for our financing transactions, or the effect of those changes on our common stock price; our ability to manage a diverse product set of solutions, including artificial intelligence ("AI") products, in highly competitive markets with a number of key vendors; reliance on third-parties to perform some of our service obligations to our customers, and the reliance on a small number of key vendors in our supply chain with whom we do not have long-term supply agreements, guaranteed price agreements, or assurance of stock availability; the possibility of a reduction of vendor incentives provided to us; our ability to remain secure during a cybersecurity attack, including both disruptions in our or our vendors' IT systems and data and audio communication networks; our ability to identify acquisition candidates, or perform sufficient due diligence prior to completing an acquisition, or failure to integrate a completed acquisition may affect our earnings; significant and rapid inflation may cause price, wage, and interest rate increases, as well as increases in operating costs that may impact the arrangements that have pricing commitments over the term of the agreement; a possible decrease in the capital spending budgets of our customers or a decrease in purchases from us; changes in the IT industry and/or rapid changes in product offerings, including the proliferation of the cloud, infrastructure as a service, software as a service, platform as a service and AI; our ability to implement comprehensive plans for the integration of sales forces, cost containment, asset rationalization, systems integration, and other key strategies; and other risks or uncertainties detailed in our reports filed with the Securities and Exchange Commission. All information set forth in this press release is current as of the date of this release and ePlus undertakes no duty or obligation to update this information.
ePlus inc. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED BALANCE SHEETS
(in thousands, except per share amounts)
December 31, 2023
March 31, 2023
ASSETS
Current assets:
Cash and cash equivalents
$142,170
$103,093
Accounts receivable-trade, net
597,363
504,122
Accounts receivable-other, net
50,055
55,508
Inventories
218,046
243,286
Financing receivables-net, current
110,344
89,829
Deferred costs
54,279
44,191
Other current assets
47,057
55,101
Total current assets
1,219,314
1,095,130
Financing receivables and operating leases-net
87,012
84,417
Deferred tax asset
3,682
3,682
Property, equipment and other assets
84,335
70,447
Goodwill
158,284
136,105
Other intangible assets-net
42,970
25,045
TOTAL ASSETS
$1,595,597
$1,414,826
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Current liabilities:
Accounts payable
$294,705
$220,159
Accounts payable-floor plan
92,518
134,615
Salaries and commissions payable
45,372
37,336
Deferred revenue
130,352
114,028
Recourse notes payable-current
-
5,997
Non-recourse notes payable-current
36,165
24,819
Other current liabilities
32,351
24,372
Total current liabilities
631,463
561,326
Non-recourse notes payable-long-term
12,233
9,522
Deferred tax liability
561
715
Other liabilities
73,587
60,998
TOTAL LIABILITIES
717,844
632,561
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY
Preferred stock, $0.01 per share par value; 2,000 shares authorized; none outstanding
-
-
Common stock, $0.01 per share par value; 50,000 shares authorized; 26,954 outstanding at December 31, 2023 and 26,905 outstanding at March 31, 2023
274
272
Additional paid-in capital
177,465
167,303
Treasury stock, at cost, 446 shares at December 31, 2023 and
261 shares at March 31, 2023
(23,774)
(14,080)
Retained earnings
720,995
627,202
Accumulated other comprehensive income-foreign currency
translation adjustment
2,793
1,568
Total Stockholders' Equity
877,753
782,265
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
$1,595,597
$1,414,826
ePlus inc. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
Three Months Ended December 31,
Nine Months Ended December 31,
2023
2022
2023
2022
Net sales
Product
$434,371
$556,018
$1,457,636
$1,379,813
Services
74,684
67,458
213,205
195,728
Total
509,055
623,476
1,670,841
1,575,541
Cost of sales
Product
328,908
441,015
1,116,046
1,062,352
Services
46,337
44,089
134,347
127,990
Total
375,245
485,104
1,250,393
1,190,342
Gross profit
133,810
138,372
420,448
385,199
Selling, general, and administrative
89,381
86,730
272,331
248,201
Depreciation and amortization
5,399
3,609
15,821
10,387
Interest and financing costs
983
1,575
3,054
2,863
Operating expenses
95,763
91,914
291,206
261,451
Operating income
38,047
46,458
129,242
123,748
Other income (expense), net
366
2,907
673
(3,112)
Earnings before taxes
38,413
49,365
129,915
120,636
Provision for income taxes
11,131
13,671
36,122
34,134
Net earnings
$27,282
$35,694
$93,793
$86,502
Net earnings per common share-basic
$1.02
$1.34
$3.53
$3.26
Net earnings per common share-diluted
$1.02
$1.34
$3.52
$3.24
Weighted average common shares outstanding-basic
26,618
26,592
26,598
26,561
Weighted average common shares outstanding-diluted
26,697
26,648
26,665
26,688
Technology Business
Three Months Ended December 31,
Nine Months Ended December 31,
2023
2022
Change
2023
2022
Change
(in thousands)
(in thousands)
Net sales
Product
$419,478
$544,316
(22.9 %)
$1,418,581
$1,336,309
6.2 %
Professional services
40,044
39,151
2.3 %
113,870
114,369
(0.4 %)
Managed services
34,640
28,307
22.4 %
99,335
81,359
22.1 %
Total
494,162
611,774
(19.2 %)
1,631,786
1,532,037
6.5 %
Gross profit
Product
91,919
104,485
(12.0 %)
308,059
282,042
9.2 %
Professional services
17,332
15,294
13.3 %
47,852
45,046
6.2 %
Managed services
11,015
8,075
36.4 %
31,006
22,692
36.6 %
Total
120,266
127,854
(5.9 %)
386,917
349,780
10.6 %
Selling, general, and administrative
86,001
81,874
5.0 %
261,694
235,147
11.3 %
Depreciation and amortization
5,381
3,582
50.2 %
15,747
10,304
52.8 %
Interest and financing costs
217
1,308
(83.4 %)
1,428
2,117
(32.5 %)
Operating expenses
91,599
86,764
5.6 %
278,869
247,568
12.6 %
Operating income
$28,667
$41,090
(30.2 %)
$108,048
$102,212
5.7 %
Gross billings
$796,986
$898,843
(11.3 %)
$2,495,451
$2,412,803
3.4 %
Adjusted EBITDA
$36,725
$47,869
(23.3 %)
$132,170
$120,135
10.0 %
Technology Business Gross Billings by Type
Three Months Ended December 31,
Nine Months Ended December 31,
2023
2022
Change
2023
2022
Change
(in thousands)
(in thousands)
Cloud
$181,559
$234,464
(22.6 %)
$641,120
$708,080
(9.5 %)
Networking
251,322
314,709
(20.1 %)
839,638
676,761
24.1 %
Security
189,476
193,866
(2.3 %)
480,159
509,241
(5.7 %)
Collaboration
23,180
27,925
(17.0 %)
97,111
100,799
(3.7 %)
Other
55,473
60,803
(8.8 %)
203,805
205,603
(0.9 %)
Product gross billings
701,010
831,767
(15.7 %)
2,261,833
2,200,484
2.8 %
Service gross billings
95,976
67,076
43.1 %
233,618
212,319
10.0 %
Total gross billings
$796,986
$898,843
(11.3 %)
$2,495,451
$2,412,803
3.4 %
Technology Business Net Sales by Type
Three Months Ended December 31,
Nine Months Ended December 31,
2023
2022
Change
2023
2022
Change
(in thousands)
(in thousands)
Cloud
$120,253
$157,126
(23.5 %)
$427,365
$470,851
(9.2 %)
Networking
209,936
275,774
(23.9 %)
723,760
584,311
23.9 %
Security
58,822
77,111
(23.7 %)
156,504
173,623
(9.9 %)
Collaboration
13,608
13,405
1.5 %
53,647
45,572
17.7 %
Other
16,859
20,900
(19.3 %)
57,305
61,952
(7.5 %)
Total product
419,478
544,316
(22.9 %)
1,418,581
1,336,309
6.2 %
Professional services
40,044
39,151
2.3 %
113,870
114,369
(0.4 %)
Managed services
34,640
28,307
22.4 %
99,335
81,359
22.1 %
Total net sales
$494,162
$611,774
(19.2 %)
$1,631,786
$1,532,037
6.5 %
Technology Business Net Sales by Customer End Market
Three Months Ended December 31,
Nine Months Ended December 31,
2023
2022
Change
2023
2022
Change
(in thousands)
(in thousands)
Telecom, Media, & Entertainment
$139,551
$184,539
(24.4 %)
$405,192
$431,269
(6.0 %)
Technology
83,951
133,067
(36.9 %)
268,302
299,088
(10.3 %)
SLED
60,108
72,730
(17.4 %)
264,419
207,823
27.2 %
Healthcare
55,504
69,825
(20.5 %)
214,182
205,297
4.3 %
Financial Services
38,816
48,008
(19.1 %)
174,391
118,917
46.6 %
All other
116,232
103,605
12.2 %
305,300
269,643
13.2 %
Total net sales
$494,162
$611,774
(19.2 %)
$1,631,786
$1,532,037
6.5 %
Financing Business Segment
Three Months Ended December 31,
Nine Months Ended December 31,
2023
2022
Change
2023
2022
Change
(in thousands)
(in thousands)
Portfolio earnings
$3,701
$2,391
54.8 %
$10,113
$7,952
27.2 %
Transactional gains
8,107
5,181
56.5 %
16,335
15,125
8.0 %
Post-contract earnings
2,685
4,036
(33.5 %)
11,357
19,281
(41.1 %)
Other
400
94
325.5 %
1,250
1,146
9.1 %
Net sales
14,893
11,702
27.3 %
39,055
43,504
(10.2 %)
Gross profit
13,544
10,518
28.8 %
33,531
35,419
(5.3 %)
Selling, general, and administrative
3,380
4,856
(30.4 %)
10,637
13,054
(18.5 %)
Depreciation and amortization
18
27
(33.3 %)
74
83
(10.8 %)
Interest and financing costs
766
267
186.9 %
1,626
746
118.0 %
Operating expenses
4,164
5,150
(19.1 %)
12,337
13,883
(11.1 %)
Operating income
$9,380
$5,368
74.7 %
$21,194
$21,536
(1.6 %)
Adjusted EBITDA
$9,464
$5,456
73.5 %
$21,466
$21,798
(1.5 %)
ePlus inc. AND SUBSIDIARIES RECONCILIATION OF NON-GAAP INFORMATION
We included reconciliations below for the following non-GAAP financial measures: (i) Adjusted EBITDA, (ii) Adjusted EBITDA for business segments, (iii) non-GAAP Net Earnings and (iv) non-GAAP Net Earnings per Common Share - Diluted.
We define Adjusted EBITDA as net earnings calculated in accordance with US GAAP, adjusted for the following: interest expense, depreciation and amortization, share-based compensation, acquisition and integration expenses, provision for income taxes, and other income (expense). Adjusted EBITDA presented for the technology business segments and the financing business segment is defined as operating income calculated in accordance with US GAAP, adjusted for interest expense, share-based compensation, acquisition and integration expenses, and depreciation and amortization. We consider the interest on notes payable from our financing business segment and depreciation expense presented within cost of sales, which includes depreciation on assets financed as operating leases, to be operating expenses. As such, they are not included in the amounts added back to net earnings in the Adjusted EBITDA calculation.
Non-GAAP net earnings and non-GAAP net earnings per common share - diluted are based on net earnings calculated in accordance with GAAP, adjusted to exclude other income (expense), share based compensation, and acquisition related amortization expense, and the related tax effects.
We use the above non-GAAP financial measures as supplemental measures of our performance to gain insight into our operating performance and performance trends. We believe that such non-GAAP financial measures provide management and investors a useful measure for period-to-period comparisons of our business and operating results by excluding items that management believes are not reflective of our underlying operating performance. Accordingly, we believe that such non-GAAP financial measures provide useful information to investors and others in understanding and evaluating our operating results.
Our use of non-GAAP information as analytical tools has limitations, and you should not consider them in isolation or as substitutes for analysis of our financial results as reported under GAAP. In addition, other companies, including companies in our industry, might calculate adjusted EBITDA, non-GAAP net earnings and non-GAAP net earnings per common share or similarly titled measures differently, which may reduce their usefulness as comparative measures.
Three Months Ended December 31,
Nine Months Ended December 31,
2023
2022
2023
2022
(in thousands)
Consolidated
Net earnings
$27,282
$35,694
$93,793
$86,502
Provision for income taxes
11,131
13,671
36,122
34,134
Depreciation and amortization [1]
5,399
3,609
15,821
10,387
Share based compensation
2,526
1,950
7,145
5,681
Interest and financing costs
217
1,308
1,428
2,117
Other expense, net [2]
(366)
(2,907)
(673)
3,112
Adjusted EBITDA
$46,189
$53,325
$153,636
$141,933
Technology Business Segment
Operating income
$28,667
$41,090
$108,048
$102,212
Depreciation and amortization [1]
5,381
3,582
15,747
10,304
Share based compensation
2,460
1,889
6,947
5,502
Interest and financing costs
217
1,308
1,428
2,117
Adjusted EBITDA
$36,725
$47,869
$132,170
$120,135
Financing Business Segment
Operating income
$9,380
$5,368
$21,194
$21,536
Depreciation and amortization [1]
18
27
74
83
Share based compensation
66
61
198
179
Adjusted EBITDA
$9,464
$5,456
$21,466
$21,798
Three Months Ended December 31,
Nine Months Ended December 31,
2023
2022
2023
2022
(in thousands)
GAAP: Earnings before taxes
$38,413
$49,365
$129,915
$120,636
Share based compensation
2,526
1,950
7,145
5,681
Acquisition related amortization expense [3]
3,856
2,505
11,348
7,182
Other (income) expense [2]
(366)
(2,907)
(673)
3,112
Non-GAAP: Earnings before provision for income taxes
44,429
50,913
147,735
136,611
GAAP: Provision for income taxes
11,131
13,671
36,122
34,134
Share based compensation
733
544
2,005
1,624
Acquisition related amortization expense [3]
1,115
693
3,173
2,030
Other (income) expense, net [2]
(106)
(811)
(190)
933
Tax benefit (expense) on restricted stock
10
102
226
267
Non-GAAP: Provision for income taxes
12,883
14,199
41,336
38,988
Non-GAAP: Net earnings
$31,546
$36,714
$106,399
$97,623
Three Months Ended December 31,
Nine Months Ended December 31,
2023
2022
2023
2022
GAAP: Net earnings per common share - diluted
$1.02
$1.34
$3.52
$3.24
Share based compensation
0.07
0.05
0.19
0.15
Acquisition related amortization expense [3]
0.10
0.07
0.30
0.20
Other (income) expense, net [2]
(0.01)
(0.08)
(0.01)
0.08
Tax benefit (expense) on restricted stock
-
-
(0.01)
(0.01)
Total non-GAAP adjustments - net of tax
0.16
0.04
0.47
0.42
Non-GAAP: Net earnings per common share - diluted
$1.18
$1.38
$3.99
$3.66
[1] Amount consists of depreciation and amortization for assets used internally.
[2] Legal settlement, interest income and foreign currency transaction gains and losses.
[3] Amount consists of amortization of intangible assets from acquired businesses.