q4_07.htm
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
 
FORM 8-K
 
 
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 
   
          Date of Report (Date of Earliest Event Reported):
  December 5, 2007
 
En Pointe Technologies, Inc.
(Exact name of registrant as specified in its charter)
 
Delaware
(State or other jurisdiction of incorporation)
   
000-28052
75-2467002
(Commission File Number)
(I.R.S. Employer Identification No.)
 
                                             2381 Rosecrans Avenue, Suite 325
 El Segundo, California        
 
90245
(Address of principal executive offices)
(Zip Code)
 
(310) 725-5200
  Registrant’s telephone number, including area code
 
 
_____________________Not Applicable____________________
Former name or former address, if changed since last report
 
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
Item 2.02 Results of Operations and Financial Condition.
 
On December 5, 2007, En Pointe Technologies, Inc. issued a press release to report its financial results for the three months and year ended September 30, 2007. A copy of the press release is attached as Exhibit 99.1 and the information contained therein is incorporated herein by reference. The information contained in this Form 8-K, including the exhibit, shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, and it shall not be deemed incorporated by reference into any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference in such filing.
 
Item 9.01 Financial Statements and Exhibits.
 
(a)  
Financial statements of business acquired.
Not applicable.
 
(b)
 Pro forma financial information.
Not applicable.
 
(c)  
Shell Company Transactions.
Not applicable.
 
(d) Exhibits:
 
 
Exhibit
 
 
 Number   Description
 
 99.1   Press release of En Pointe Technologies, Inc. dated December 5, 2007.

 
SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
         
   
En Pointe Technologies, Inc.
         
December 5, 2007
  
By:
  
/s/ Robert A. Mercer____________
       
Name: Robert A. Mercer
       
Title: Corporate Secretary
 

 
Exhibit 99.1

En Pointe Technologies, Inc. Announces Financial Results for the Quarter and Year Ended September 30, 2007


 
— 2007 fiscal year earnings increase 218% to $0.22 per diluted share.
 
— 2007 fiscal year net sales increase 7% to $347.1 million from 2006 fiscal year.
 
— 2007 fiscal year gross profits increase 10% to $43.6 million from 2006 fiscal year.
 
— Fourth quarter net sales increase 24% to $97.0 million from prior year fourth quarter.
 
— Fourth quarter gross profits increase 3% to $11.7 million from prior year fourth quarter.


Los Angeles, CA – December 5, 2007 - En Pointe Technologies, Inc. (NASDAQ:ENPT):  a leading national provider of business-to-business information technology products, services and solutions, today announced consolidated results for its fourth quarter and fiscal year ended September 30, 2007.  Total net sales in the fourth quarter of fiscal 2007 increased 24% to $97.0 million when compared to the $78.4 million reported for the fourth quarter of fiscal 2006.  For the year ended September 30, 2007, total net sales increased $23.4 million, or 7%, to $347.1 million from $323.7 million reported in the prior fiscal year.  En Pointe’s gross profits increased by $0.3 million to $11.7 million in the fourth quarter of fiscal 2007 as compared to $11.4 million reported in the fourth quarter of fiscal 2006.  The $347.1 million in annual net sales and $43.6 million in annual gross profits reported for fiscal 2007 were the highest achieved by the Company during the last five fiscal years.

Operating income in the fourth quarter of fiscal 2007 decreased by $1.1 million to $0.4 million compared with $1.5 million in the fourth quarter of fiscal 2006.  The decrease was due to continued increases in selling and marketing expenses related to the Company’s investment in service infrastructure, engineering staff and customer offerings.  As a result, net income for the fourth quarter of fiscal 2007 decreased by $0.8 million to $0.7 million, or $0.10 per basic and diluted share, as compared with a net income of $1.5 million, or $0.22 per basic and $0.21 per diluted share, reported in the fourth quarter of fiscal 2006.  For the year ended September 30, 2007, En Pointe reported net income of $1.6 million, or $0.23 per basic and $0.22 per diluted share, as compared with $0.5 million, or $0.07 per basic and diluted share, reported in fiscal 2006.

Bob Din, CEO of En Pointe said, “I am very pleased with our fourth quarter and 2007 fiscal operating performance.  Every year we strive to improve on our prior year’s results and this year was no exception for us in that exercise.”  Mr. Din added, “The September 2007 quarter produced a successful win of our first large multi- year U.S. government contract.  Thanks go to our government team’s diligent efforts in landing this important contract for us for the sale of software and ancillary services.”

Mr. Din further stated, “En Pointe has begun a two year service revitalization to transform our service organization into a world-class managed service provider.  The infrastructure modernization includes Cisco Unified Communications 6.0, Clarify Call Management System Upgrade, integration of offshore desktop support and back office systems which we believe will result in greater autonomy in lines of business to enable greater agility and responsiveness to our clients’ needs.”

Operating Highlights

Gross profits for fiscal year 2007 increased $3.9 million to $43.6 million, as compared with fiscal year 2006, helped, in part, by the Company’s business process outsourcing affiliates with their broader gross margins of approximately 32% that contributed $1.3 million of the increase in gross profits.  Product gross profits increased $2.2 million to $25.2 million on increased net product sales of $22.6 million with relatively constant gross margins of 8%.  En Pointe’s  core information technology services gross profits increased $0.3 million on a 3% increase in gross margins.

Total selling, general and administrative expenses, as a percent of net sales remained constant at 12% for both fiscal years.  Fourth quarter fiscal 2007 selling, general and administrative expenses were also 12% of net sales, improving from the 13% recorded in the fourth quarter of fiscal 2006.

Asset Management

The Company’s balance sheet remained strong with $6.0 million of cash and an unused credit line of $14.7 million.  Accounts receivable increased by $15.0 million due to a large sale made towards the end of fiscal year end 2007.  Long-term debt remained low at $0.4 million while stockholders’ equity climbed to $21.3 million.

About En Pointe Technologies, Inc.

En Pointe Technologies, Inc. provides the information technology marketplace, including mid-market and enterprise accounts, government agencies, and educational institutions nationwide, with computer hardware, software, information security, and managed and professional services. En Pointe has the flexibility to customize information technology services to fulfill the unique needs of each of its customers.

En Pointe employs SAP, ClarifyTM, and AccessPointeTM (an e-procurement application), proven and dependable software applications, to support its broad customer base.  Founded in 1993 and headquartered in Los Angeles, En Pointe maintains an ISO 9001:2000 certified configuration center in San Bernardino County, California and is well represented in leading national markets throughout the United States.  En Pointe has the experience and the technology to help organizations simplify the management of their information technology infrastructure.

En Pointe’s Ovex Global division provides customers with solutions for affordable information technology services by combining low cost with high quality offshore services provided through its foreign subsidiary, Ovex Technologies (Private), Inc., with experienced onshore information technology management teams that provide the necessary supervision and guidance to smooth each customer’s outsourcing transition.
 
Visit www.enpointe.com to learn more.
 
This document contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. In addition, from time to time, En Pointe Technologies, or its representatives, have made or may make forward-looking statements, orally or in writing. The words "estimate," "project," "potential," "intended," "expect," "anticipate," "believe" and similar expressions or words are intended to identify forward-looking statements. Such forward-looking statements may be included in, but are not limited to, various filings made by En Pointe with the Securities and Exchange Commission, press releases or oral statements made with the approval of an authorized executive officer of the Company. Actual results could differ materially from those projected or suggested in any forward-looking statements as a result of a wide variety of factors and conditions. Reference is hereby made to En Pointe's Annual Report on Form 10-K for the fiscal year ended September 30, 2006 for information regarding those factors and conditions. Among the important factors that could cause actual results to differ materially from management's projections, estimates and expectations include, but are not limited to: changing economic influences in the industry; dependence on key personnel; actions of manufacturers and suppliers; and availability of adequate financing.  Readers are cautioned not to place undue reliance upon these forward-looking statements that speak only as of the date of this press release.  En Pointe undertakes no obligation to update publicly any forward-looking statements to reflect new information, events or circumstances after the date of this press release or to reflect the occurrence of unanticipated events.

All trademarks and service marks are the property of their respective owners.

To contact En Pointe regarding any investor matters, please contact:

Javed Latif
Chief Financial Officer and
Sr. Vice President, Operations
En Pointe Technologies, Inc.
Phone: (310) 725-5212
Fax: (310) 725-9786
ir@enpointe.com

To contact En Pointe regarding any sales or customer matters, please e-mail us at:
sales@enpointe.com or contact us by phone at (310) 725-5200.


En Pointe Technologies, Inc.
Condensed Consolidated Balance Sheets
(Unaudited)
(in thousands)


     
September 30,
  
     
2007
    
2006
  
 
ASSETS:
            
Current assets:
            
 
Cash
$
6,000
  
$
10,240
  
 
Restricted cash
  
76
    
74
  
 
Short term cash investment
  
1,000
    
--
  
 
Accounts receivable, net
  
61,391
    
46,417
  
 
Inventories, net
  
8,768
    
4,201
  
 
Prepaid expenses and other current assets
  
1,548
    
1,067
  
 
    Total current assets
  
78,783
    
61,999
  
               
Property and equipment, net of accumulated
            
 
depreciation and amortization
  
5,022
    
2,765
  
               
Other assets
 
2,201
  
 
1,474
  
 
     Total assets
$
86,006
  
$
66,238
  
               
               
LIABILITIES AND STOCKHOLDERS' EQUITY:
Current liabilities:
            
 
Accounts payable, trade
$
19,034
  
$
19,105
  
 
Borrowings under line of credit
  
30,314
    
15,673
  
 
Accrued liabilities
  
6,177
    
5,796
  
 
Accrued taxes and other liabilities
  
6,814
    
4,928
  
 
     Total current liabilities
  
62,339
    
45,502
  
Long term liabilities
  
447
    
238
  
 
     Total liabilities
  
62,786
    
45,740
  
               
Minority interest
  
1,957
    
1,487
  
               
Total stockholders' equity
  
21,263
    
19,011
  
 
     Total liabilities and stockholders' equity
$
86,006
  
$
66,238
  
               
 
En Pointe Technologies, Inc.
Condensed Consolidated Statements of Operations
(Unaudited)
(in thousands, except per share data)


 
 
Three months ended
September 30,
 
 
Fiscal year ended
September 30,
 
 
 
2007
 
 
2006
 
 
2007
 
 
2006
 
Net sales:
 
 
 
 
 
 
 
 
 
 
 
 
   Product
 
$
85,285
 
 
$
65,211
 
 
$
299,335
 
 
$
276,736
 
   Service
 
 
11,756
 
 
 
13,198
 
 
 
47,791
 
 
 
46,997
 
      Total net sales
 
 
97,041
 
 
 
78,409
 
 
 
347,126
 
 
 
323,733
 
Cost of sales:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Product
 
 
78,654
 
 
 
59,039
 
 
 
274,128
 
 
 
253,765