MANC Manchester Technologies (MM)

Manchester Technologies, Inc. Announces Second Quarter Results HAUPPAUGE, N.Y., March 11 /PRNewswire-FirstCall/ -- Manchester Technologies, Inc. (NASDAQ:MANC), a leading distributor of display technology solutions and plasma display monitors through its wholly-owned subsidiary, Electrograph Systems, Inc., and a distributor of computer hardware to dealers and systems integrators, today announced financial results for its second fiscal quarter and six months ended January 31, 2005. 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 three months and six months ended January 31, 2005 and 2004 for that business have been recorded as discontinued operations in the accompanying condensed consolidated statements of income. Revenue from continuing operations for the quarter ended January 31, 2005 was $39.3 million as compared with $45.1 million for the comparable quarter last year. Income from continuing operations for the quarter was $252,000 or $0.03 per diluted share as compared with $743,000 or $0.09 per diluted share reported for the comparable quarter last year. Weighted average common shares outstanding used for the computation of diluted earnings per share were 8,560,000 for 2005 and 8,299,000, for 2004. Revenue from continuing operations for the six months ended January 31, 2005 was $86.2 million as compared with $90.5 million for the first six months of last year. Income from continuing operations for the six months was $2.0 million or $0.24 per diluted share as compared with $1.6 million or $0.19 per diluted share reported for the comparable six month period last year. Weighted average common shares outstanding used for the computation of diluted earnings per share were 8,497,000 for 2005 and 8,265,000 for 2004. Barry R. Steinberg, CEO of Manchester Technologies, Inc., stated, "Unit sales of display technology solutions, primarily large screen flat panel displays, continue to increase within our Electrograph subsidiary, while average selling prices decreased resulting in a small drop in revenue for the quarter from the sale of display technology solutions as compared to the same quarter last year. However, our gross profit percentage has remained strong as we continue to grow our unit sales. The reduction of revenue in the quarter is primarily attributable to a decrease in computer hardware sales to dealers and systems integrators (non Electrograph business) for the quarter ended January 31, 2005." The Company ended the quarter with cash and cash equivalents of $17.4 million, working capital of $38.6 million, total assets of $68.8 million and shareholders' equity of $46.0 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/. Safe Harbor Statement This press release contains statements that may constitute forward-looking statements pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on currently available information and represent the beliefs of our management. These statements are subject to risks and uncertainties that could cause actual results to differ materially, including, but not limited to, our inability to attract and retain highly skilled sales representatives or technical personnel necessary to maintain our current operations and implement our growth strategies; our inability to maintain good relationships with our vendors and customers; not being successful in our efforts to focus on higher- margin products and services and not being able to rapidly respond to new product offerings; not managing our inventory successfully; being adversely affected by continued intense competition in the technology industry, including competition from competitors with greater resources; being subject to potentially adverse business conditions that our industry is subject to, including, without limitation, pricing pressures involving distribution channels, market consolidation, a potential short supply of products, continued deterioration in average selling prices of personal computers and display technologies, and a decrease in the growth of the display technology market; not being able to identify suitable acquisition candidates and integrate the acquired companies; the risk that our success is highly dependent upon a select group of senior management and that our revenues and operating results are subject to fluctuation from quarter to quarter; the failure of our information technology systems to function properly; and the failure of our actions to enhance shareholder value. For further information on these risks and others affecting us, please see our Annual Report on Form 10-K for the year ended July 31, 2004, and those set forth from time to time in our other filings with the Securities and Exchange Commission (the "SEC"). Each of these documents is on file with the SEC and is available free of charge. Readers of this press release are referred to such filings. The forward-looking statements herein speak only as of the date of this press release. We do not undertake to update any forward-looking statement that may be made from time to time by us or on our behalf. Manchester Technologies, Inc. and Subsidiaries CONDENSED CONSOLIDATED STATEMENTS OF INCOME (in thousands, except per share amounts) (Unaudited) Three months ended Six months ended January 31, January 31, 2005 2004 2005 2004 Revenue $39,289 $45,117 $86,170 $90,495 Cost of revenue 34,408 40,559 75,257 81,203 Gross profit 4,881 4,558 10,913 9,292 Selling, general and administrative expenses 4,580 3,246 7,709 6,586 Income from operations 301 1,312 3,204 2,706 Interest and other income (expense), net 118 (75) 133 (95) Income from continuing operations before income taxes 419 1,237 3,337 2,611 Income tax provision 167 494 1,334 1,024 Income from continuing operations 252 743 2,003 1,587 Discontinued operations Income (loss) from operations of discontinued component - (745) 995 (1,600) Income tax (provision) benefit - 297 (398) 619 Income (loss) from discontinued operations - (448) 597 (981) Net income $ 252 $ 295 $ 2,600 $ 606 Income per share from continuing operations Basic $ 0.03 $0.09 $ 0.24 $ 0.20 Diluted $ 0.03 $0.09 $ 0.24 $ 0.19 Income (loss) per share from discontinued operations Basic $ - $(0.06) $ 0.07 $ (0.12) Diluted $ - $(0.06) $ 0.07 $ (0.12) Net income per share Basic $ 0.03 $ 0.04 $ 0.31 $ 0.08 Diluted $ 0.03 $ 0.04 $ 0.31 $ 0.07 Weighted average shares outstanding Basic 8,364 7,990 8,295 7,990 Diluted 8,560 8,299 8,497 8,265 Manchester Technologies, Inc. and Subsidiaries CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except per share amounts) January 31, 2005 July 31, 2004 (Unaudited) Assets Current assets: Cash and cash equivalents $17,399 $16,881 Accounts receivable, net of allowance for doubtful accounts of $1,420 and $2,848, respectively 14,848 15,530 Inventory 18,566 20,301 Deferred income taxes 1,212 1,212 Prepaid taxes 655 916 Prepaid expenses and other current assets 1,066 1,266 Total current assets 53,746 56,106 Property and equipment, net 9,505 9,890 Goodwill, net 3,735 3,735 Deferred income taxes 1,728 1,728 Other assets 105 183 Total assets $68,819 $71,642 Liabilities and Shareholders' Equity Current liabilities: Accounts payable and accrued expenses $14,869 $21,492 Current portion of capital lease obligations 260 246 Total current liabilities 15,129 21,738 Deferred compensation payable 98 98 Capital lease obligations, net of current portion 7,551 7,683 Total liabilities 22,778 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, 8,428 and 8,163 shares issued and outstanding 84 82 Additional paid-in capital 20,913 19,597 Retained earnings 25,044 22,444 Total shareholders' equity 46,041 42,123 Total liabilities and shareholders' equity $68,819 $71,642 DATASOURCE: Manchester Technologies, Inc. CONTACT: Elan Yaish, Chief Financial Officer of Manchester Technologies, Inc., Telephone: +1-631-951-7060, Fax: +1-631-951-7639 or email: Web site: http://www.e-manchester.com/

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