SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Form 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 18, 1999
ePlus inc.
(Exact name of registrant as specified in its charter)
Delaware 000-28926 54-1817218
(State or other Commission File Number (IRS Employer
jurisdiction) of Identification No.)
incorporation
400 Herndon Parkway, Herndon, Virginia 20176
(Address, including zip code, of principal executive office)
(703) 834-5710
(Registrant's telephone number, including area code)
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Item 7. Financial Statements
In connection with the acquisition of CLG, Inc., a non-reporting subsidiary of
Centura Bank which we acquired in a purchase transaction, we filed a Current
Report on Form 8-K on October 18, 1999, and subsequently filed a Form 8-K/A on
December 17, 1999, to provide the historical and pro forma financial information
required under Item 7 of Form 8-K. We are filing this Form 8-K/A to supplement
the Form 8-K/A filed on December 17, 1999, in order to include certain
additional interim historical financial information relating to CLG, Inc. that
was inadvertently omitted from the previous Form 8-K/A. The additional interim
historical financial information provided herein consists of Condensed
Statements of Earnings for CLG, Inc. for the six months ended June 30, 1999 and
1998, the Condensed Balance Sheet as of June 30, 1999, and the Condensed
Statements of Cash Flows for the six-months ended June 30, 1999 and June 30,
1998. This information is being provided in addition to the interim historical
balance sheet information as of June 30, 1999 and interim historical income
statement information for CLG, Inc. for the three months ended June 30, 1999
previously filed in the Form 8-K/A filed on December 17, 1999 as part of the pro
forma financial presentation.
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Index to Financial Statements
Financial Statements:
Unaudited Condensed Balance Sheet as of June 30, 1999 F-1
Unaudited Condensed Statements of Earnings for the
Six Months Ended June 30, 1999 and 1998 F-2
Unaudited Condensed Statements of Cash Flows for the
Six Months Ended June 30, 1999 and 1998 F-3
Notes to Unaudited Condensed Financial Statements F-4
-ii-
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CLG, Inc.
CONDENSED BALANCE SHEET
UNAUDITED
As of
June 30, 1999
-------------
ASSETS
Cash and cash equivalents $ 1,272,727
Accounts receivable- net of allowance
for doubtful accounts 2,575,470
Investment in DFL, net 74,067,161
Investment in OLE, net 11,768,171
Inventories 4,697,535
Property and equipment, net 1,057,865
Other assets 667,787
-------------
TOTAL ASSETS $ 96,106,716
=============
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Accounts payable - equipment $ 615,982
Accrued expenses 694,946
Recourse notes payable 36,357,139
Non-recourse notes payable 27,627,836
Other liabilities 1,508,779
Deferred taxes 2,379,677
----------
Total Liabilities 69,184,359
STOCKHOLDERS' EQUITY
Common stock 5,100
Additional paid in capital 1,693,149
Retained earnings 25,224,108
----------
Total Stockholders' Equity 26,922,357
----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 96,106,716
============
SEE NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
F-1
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CLG, Inc.
CONDENSED STATEMENTS OF EARNINGS
UNAUDITED
Six Months Ended Six Months Ended
June 30, 1999 June 30, 1998
------------- -------------
Sales of equipment $ 2,492,717 $ 4,417,777
Lease revenues 15,180,839 15,741,165
Fee and other income 478,351 410,215
------------ -----------
TOTAL REVENUES 18,151,907 20,569,157
COSTS AND EXPENSES
Cost of sales, equipment 1,883,100 3,508,501
Cost of sales-type leases 3,103,888 2,350,677
Direct lease costs 5,250,209 5,885,073
Professional and other fees 265,766 233,725
Salaries and benefits 2,914,145 2,699,828
General and administrative expenses 750,982 977,650
Interest and financing costs 2,452,458 3,091,702
--------- ---------
TOTAL COSTS AND EXPENSES 16,620,548 18,747,156
---------- ----------
EARNINGS BEFORE PROVISION FOR INCOME TAXES 1,531,359 1,822,001
---------- ----------
PROVISION FOR INCOME TAXES 572,422 728,800
---------- ----------
NET EARNINGS $ 958,937 $ 1,093,201
=========== ===========
SEE NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
F-2
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<TABLE>
<CAPTION>
CLG, INC.
CONDENSED STATEMENTS OF CASH FLOWS
UNAUDITED
Six Six
Months Ended Months Ended
June 30, 1999 June 30, 1998
-------------- -------------
CASH FLOWS FROM OPERATING ACTIVITIES
<S> <C> <C>
Net income $ 958,937 $ 1,093,201
Depreciation and amortization 5,345,902 5,964,553
Deferred income taxes (1,225,152) (1,924,084)
(Gain) loss on sale of assets and residuals (1,836,607) (1,475,036)
Stock-based compensation 600,660 475,200
(Increase) decrease in
Accounts receivable (1,517,356) 5,005,822
Inventory 25,550 (1,844,918)
Prepaids 679,286 (523,168)
Other assets (15,200) 284,996
Increase (decrease) in
Accounts payable (1,080,733) (2,070,131)
Other payables and accruals (806,329) (908,715)
Deferred and prepaid revenues (226,556) 253,860
---------- -----------
NET CASH FROM OPERATIONS 902,402 4,331,580
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of inventory for sale or lease (19,321,842) (23,800,000)
Purchase of fixed assets (240,193) (93,808)
Sales of inventory and equipment 1,987,062 3,520,550
Principal received from finance leases 19,838,706 20,504,332
---------- ----------
NET CASH PROVIDED BY INVESTING ACTIVITIES 2,263,733 131,074
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds (repayments) on line of credit 3,109,000
Proceeds from borrowings 13,295,692 18,269,458
Repayment of borrowings (19,492,514) (27,351,485)
----------- -----------
NET CASH USED IN FINANCING ACTIVITIES (6,196,822) (5,973,027)
----------- -----------
NET DECREASE IN CASH (3,030,687) (1,510,373)
CASH AT BEGINNING OF PERIOD 4,303,414 1,510,373
--------- ---------
CASH AT END OF PERIOD $ 1,272,727 $ 0
============ ============
Cash paid for interest $ 2,430,188 $ 3,086,598
Cash paid for income taxes $ 1,080,433 $ 2,529,940
SEE NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
</TABLE>
F-3
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CLG, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
UNAUDITED
1. CONDENSED FINANCIAL STATEMENTS
The condensed interim financial statements of CLG, Inc. included herein have
been prepared without audit, pursuant to the rules and regulations of the
Securities and Exchange Commission and reflect all adjustments that are, in the
opinion of management, necessary for a fair statement of results for the interim
periods. All adjustments made were normal, recurring accruals.
2. INVESTMENT IN DIRECT AND SALES-TYPE LEASES
The components of net investment in leases under sales-type and direct financing
leases are as follows:
<TABLE>
<CAPTION>
June 30, 1999
-------------
<S> <C>
Minimum lease payments receivable $77,903,000
Estimated residual values of leased equipment 4,528,236
Unamortized initial direct costs 211,360
Less unearned income (8,575,435)
------------
Net investment in sales-type and direct
financing leases $74,067,161
============
Equipment leased under operating leases consists
of the following:
June 30, 1999
-------------
Equipment at cost $31,899,520
Less accumulated depreciation (20,131,349)
-----------
Net equipment on operating leases $11,768,171
===========
</TABLE>
3. SUBSEQUENT EVENT
On September 30, 1999, CLG, Inc. was acquired by ePlus inc. and was then
merged into MLC Group, Inc. (a wholly-owned subsidiary of ePlus inc.) on
October 1, 1999. The purchase price of $36.5 million was paid by the
issuance of 392,990 shares of ePlus inc. common stock valued at $3,900,425
(based on $9.925 per share), subordinated debt of $3,064,574 and
$29,535,001 in cash.
4. SEGMENT REPORTING
In June 1997, the Financial Accounting Standards Board ("FASB") issued SFAS
131, "Disclosures about Segments of an Enterprise and Related Information"
("SFAS 131"). The Statement requires management to report selected
quantitative and qualitative information about its reportable operating
segments, including profit or loss, certain revenue and expense items, and
segment assets. Generally, segments are reportable if their operating
results are regularly reviewed by an enterprise's chief operating decision
maker. CLG, Inc. has determined that it has no reportable operating
segments based on the criteria set forth in SFAS 131.
F-4
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has caused this report to be signed on its behalf by the undersigned
hereunto duly authorized.
February 24, 2000
By:/s/ Phillip G. Norton
------------------------
Phillip G. Norton
Chairman and Chief Executive Officer
