HERNDON, Va., May 31, 2012 (GLOBE NEWSWIRE) -- ePlus inc. (Nasdaq:PLUS - News) today announced that the Company will restate its consolidated financial statements for the fiscal years ended March 31, 2010 and 2011, and the quarterly financial statements for the three quarters ended June 30, September 30, and December 31, 2011 and all of the quarters in the fiscal year ended March 31, 2011. For the periods affected by the restatement, the Company's restated financial statements will report revenues from the sale of third party software assurance, maintenance and services on a net basis rather than on a gross basis, as previously reported. The Company expects that the correction of this error will have no effect on its previously reported earnings, earnings per share, or consolidated statements of cash flows. Additionally, the Company has identified an unrelated error in connection with lease revenue reported prior to 2010 that will have an immaterial effect on its previously reported consolidated balance sheets and consolidated statements of stockholders' equity.
In each fiscal year during the restatement period, the Company expects the effect of the gross vs. net revenue accounting change to decrease previously reported "sales of product and services" and "cost of sales, products and services." As a result of the reporting change to a net basis, the Company also expects gross profit to remain unchanged and gross margin to increase. The Company expects its financial results for the quarter ended March 31, 2012 to reflect similar revenue and cost of sales adjustments.
Presentation of Sales of Third Party Software Assurance, Maintenance and Services
During the preparation of its financial statements for the fiscal year ended March 31, 2012, and after discussions with Deloitte & Touche LLP, its independent registered public accounting firm, the Company reassessed the presentation of sales of third party software assurance, maintenance and services and, after giving further consideration with respect to gross vs. net reporting, concluded that these transactions should be presented on a net basis. The Company previously presented these transactions consistent with its revenue recognition policy, originally implemented during fiscal year 2006, on a gross basis, primarily as a result of the Company's determination that it was acting as a principal in these arrangements as the customer contracts are with ePlus and not with third party service providers. However, it has recently been determined that ePlus should be considered as an agent in these transactions because third party service providers are responsible for the day to day provision of services under these contracts. This change in the determination of that status results in a different accounting treatment of the revenue resulting from the sale of such third party software assurance, maintenance and services, requiring the revenue to be reported net of the associated cost of the underlying contracts with the third party service providers.
Under net sales recognition, the cost paid to a third party service provider is recorded as a reduction to sales of related products and services, resulting in net sales being equal to the gross profit on a transaction. The Company does not expect any changes to earnings before provision for income tax, net earnings, or net earnings per common share or consolidated statements of cash flows. In addition, the Company expects that the changes to the consolidated balance sheets and consolidated statements of stockholders' equity will be immaterial. The restatement will not have any impact on the Company's underlying agreements with, or obligations to, its customers and third party service providers, nor will the restatement affect the amount that the Company invoices its customers.
Restatement
As a result of the foregoing, on May 24, 2012, the Audit Committee of the Company's Board of Directors concluded, in consultation with and upon the recommendation of the Company's management, and after consulting with outside advisors, that investors should no longer rely upon the Company's previously issued financial statements and related audit reports of its independent registered public accounting firm, Deloitte & Touche LLP, for the restatement period identified above. The Company expects to file restated financial statements as described below to correct the Company's presentation of sales of third party software assurance, maintenance and services. The Audit Committee and management have discussed these matters with the Company's independent registered public accounting firm.
Until the restatement is complete, the expected effects of the restatement are subject to change. It is possible that additional issues may be identified during the course of the review and audit processes. Any additional items that may be identified during the completion of the review and audit process could be material to the Company's financial condition and results of operations for the years ended March 31, 2010 and 2011, and each of the three quarters ended December 31, 2011 and each of the quarters in fiscal year ended March 31, 2011.
Management is continuing to assess the effect of the restatement on the Company's internal control over financial reporting and its disclosure controls and procedures. Management will report its conclusion on internal control over financial reporting and disclosure controls and procedures upon completion of the restatement process.
As soon as practicable, the Company intends to file its Annual Report on Form 10-K for the year ended March 31, 2012, which will include restated audited financial statements for the years ended March 31, 2010 and 2011, for each of the three quarters ended December 31, 2011 and for each of the quarters in the fiscal year ended March 31, 2011. The Company will also include in the Form 10-K restated selected financial data for the years ended March 31, 2008 through 2011.
About ePlus inc.
ePlus is a leading provider of technology solutions. ePlus enables organizations to optimize their IT infrastructure and supply chain processes by delivering world-class IT products from top manufacturers, managed and professional services, flexible lease financing, proprietary software, and patented business methods and systems. Founded in 1990, ePlus has more than 800 associates serving federal, state, municipal, and commercial customers nationally. The Company is headquartered in Herndon, VA. For more information, visit http://www.eplus.com/, call 888-482-1122, or email info@eplus.com.
ePlus(R) 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 the expected effects of the restatement. Actual and anticipated future results may vary materially due to certain risks and uncertainties, including, without limitation, unanticipated accounting issues or audit issues regarding the financial data for the periods to be restated or adjusted; inability of the Company or its independent registered public accounting firm to confirm relevant information or data; unanticipated issues that could prevent or delay the Company's independent registered public accounting firm from concluding the audit or requiring additional efforts, procedures or review; the Company's ability to design, improve or remediate, as necessary, internal controls to address identified issues; possible adverse effects resulting from the recent financial crisis in the credit markets and general slowdown of the U.S. economy such as our current and potential customers delaying or reducing technology purchases, increasing credit risk associated with our customers and vendors, reduction of vendor incentive programs, the possibility of additional goodwill impairment charges, and restrictions on our access to capital necessary to fund our operations; the demand for and acceptance of, our products and services; our ability to adapt our services to meet changes in market developments; our ability to adapt to changes in the IT industry.
Cincinnati Financial Corporation Declares Regular Quarterly Cash Dividend - Yahoo Finance
CINCINNATI, June 1, 2012 /PRNewswire/ -- Cincinnati Financial Corporation (CINF) today announced that the executive committee of its board of directors has declared a 40.25-cents-per-share regular quarterly cash dividend, payable July 16, 2012, to shareholders of record as of June 20, 2012.
(Logo: http://photos.prnewswire.com/prnh/20110824/CL57087LOGO )
Steven J. Johnston, president and chief executive officer, commented, "We manage capital to support the profitable growth of our business while also returning capital to shareholders, primarily through dividends. The consistency of our dividend record reflects the board of directors' favorable long-term outlook. Improved insurance underwriting results in recent quarters, along with exceptional financial flexibility, strengthen our ability to consistently reward shareholders with increased value over time."
Cincinnati Financial Corporation offers business, home and auto insurance, our main business, through The Cincinnati Insurance Company and its two standard market property casualty companies. The same local independent insurance agencies that market those policies may offer products of our other subsidiaries, including life and disability income insurance, annuities and surplus lines property and casualty insurance. For additional information about the company, please visit www.cinfin.com.
Safe Harbor Statement
This is our "Safe Harbor" statement under the Private Securities Litigation Reform Act of 1995. Our business is subject to certain risks and uncertainties that may cause actual results to differ materially from those suggested by the forward-looking statements in this report. Some of those risks and uncertainties are discussed in our 2011 Annual Report on Form 10-K, Item 1A, Risk Factors, Page 26.
Factors that could cause or contribute to such differences include, but are not limited to:
- Unusually high levels of catastrophe losses due to risk concentrations, changes in weather patterns, environmental events, terrorism incidents or other causes
- Increased frequency and/or severity of claims
- Inadequate estimates or assumptions used for critical accounting estimates
- Recession or other economic conditions resulting in lower demand for insurance products or increased payment delinquencies
- Declines in overall stock market values negatively affecting the company's equity portfolio and book value
- Events resulting in capital market or credit market uncertainty, followed by prolonged periods of economic instability or recession, that lead to:
- Significant or prolonged decline in the value of a particular security or group of securities and impairment of the asset(s)
- Significant decline in investment income due to reduced or eliminated dividend payouts from a particular security or group of securities
- Significant rise in losses from surety and director and officer policies written for financial institutions or other insured entities
- Prolonged low interest rate environment or other factors that limit the company's ability to generate growth in investment income or interest rate fluctuations that result in declining values of fixed-maturity investments, including declines in accounts in which we hold bank-owned life insurance contract assets
- Increased competition that could result in a significant reduction in the company's premium volume
- Delays or performance inadequacies from ongoing development and implementation of underwriting and pricing methods or technology projects and enhancements expected to increase our pricing accuracy, underwriting profit and competitiveness
- Changing consumer insurance-buying habits and consolidation of independent insurance agencies that could alter our competitive advantages
- Inability to obtain adequate reinsurance on acceptable terms, amount of reinsurance purchased, financial strength of reinsurers and the potential for non-payment or delay in payment by reinsurers
- Inability to defer policy acquisition costs for any business segment if pricing and loss trends would lead management to conclude that segment could not achieve sustainable profitability
- Events or conditions that could weaken or harm the company's relationships with its independent agencies and hamper opportunities to add new agencies, resulting in limitations on the company's opportunities for growth, such as:
- Downgrades of the company's financial strength ratings
- Concerns that doing business with the company is too difficult
- Perceptions that the company's level of service, particularly claims service, is no longer a distinguishing characteristic in the marketplace
- Actions of insurance departments, state attorneys general or other regulatory agencies, including a change to a federal system of regulation from a state-based system, that:
- Impose new obligations on us that increase our expenses or change the assumptions underlying our critical accounting estimates
- Place the insurance industry under greater regulatory scrutiny or result in new statutes, rules and regulations
- Restrict our ability to exit or reduce writings of unprofitable coverages or lines of business
- Add assessments for guaranty funds, other insurance related assessments or mandatory reinsurance arrangements; or that impair our ability to recover such assessments through future surcharges or other rate changes
- Increase our provision for federal income taxes due to changes in tax law
- Increase our other expenses
- Limit our ability to set fair, adequate and reasonable rates
- Place us at a disadvantage in the marketplace
- Restrict our ability to execute our business model, including the way we compensate agents
- Adverse outcomes from litigation or administrative proceedings
- Events or actions, including unauthorized intentional circumvention of controls, that reduce the company's future ability to maintain effective internal control over financial reporting under the Sarbanes-Oxley Act of 2002
- Unforeseen departure of certain executive officers or other key employees due to retirement, health or other causes that could interrupt progress toward important strategic goals or diminish the effectiveness of certain longstanding relationships with insurance agents and others
- Events, such as an epidemic, natural catastrophe or terrorism, that could hamper our ability to assemble our workforce at our headquarters location
- Difficulties with technology or data security breaches, including cyber attacks, that could negatively affect our ability to conduct business and our relationships with agents, policyholders and others
Further, the company's insurance businesses are subject to the effects of changing social, economic and regulatory environments. Public and regulatory initiatives have included efforts to adversely influence and restrict premium rates, restrict the ability to cancel policies, impose underwriting standards and expand overall regulation. The company also is subject to public and regulatory initiatives that can affect the market value for its common stock, such as measures affecting corporate financial reporting and governance. The ultimate changes and eventual effects, if any, of these initiatives are uncertain.
Energy stocks hit eight-month lows; BP shines - Marketwatch
By Jim Jelter, MarketWatch
SAN FRANCISCO (MarketWatch) — Weak U.S. economic data and another steep selloff in crude oil drove energy stocks to eight-month lows Friday.
A disappointing May employment report from the U.S. Labor Department triggered the decline. According to the report, the U.S. economy added 69,000 jobs last month, far fewer than economists had expected and less than what’s needed to accommodate those entering the work force for the first time.
The weak jobs data fanned concerns that the economy’s still struggling to make significant headway, which in turn bode badly for energy demand.
That fear was reflected in the underlying commodities market. July crude-oil futures /quotes/zigman/2203147 CLN2 -3.78% fell $3.30, or 3.8%, to settle at $83.23 a barrel on the New York Mercantile Exchange. For the week, the July contract fell 8.4%, ending at the lowest level since Oct. 7. Read the latest on oil futures.
The NYSE Arca Oil Index /quotes/zigman/6015539 XX:XOI -1.82% fell 1.8%, holding up slightly better than the 2.2%, 274-point plunge seen in the Dow Jones Industrial Average /quotes/zigman/627449 DJIA -2.22% . The oil index last visited these levels in early October.
BP PLC /quotes/zigman/247026/quotes/nls/bp BP +0.82% was the lone gainer in the group, up 30 cents to a closing level of $36.76. The London-based company said it plans to pursue the sale of its 50% interest in TNK-BP after receiving an unsolicited bid for its stake in the giant Russian joint-venture stake.
Industry analysts say the deal, if it goes through, could be worth as much as $30 billion, though valuing BP’s Russian assets is tricky given the oil market’s recent volatility. Read about BP's plans to sell its BP-TNK stake.
The NYSE Arca Natural Gas index /quotes/zigman/6015474 XX:XNG -3.54% fell 3.5% to 568.52 points, with shares of Chesapeake Energy Corp. /quotes/zigman/126832/quotes/nls/chk CHK -7.81% falling 7.8% to $15.58. Chesapeake posted the biggest percentage decline in the group Friday.
For the week, the natural-gas index fell 4.7%.
Shares of oil-field-service companies fared only marginally better. The Philadelphia Oil Service Sector Index /quotes/zigman/1470028 OSX -2.36% fell 2.4% to 196.02 points. For the week, however, the index dropped nearly 5.7%, making it the worst-performing sector within energy stocks.
Offshore driller Noble Corp. /quotes/zigman/479523/quotes/nls/ne NE -2.17% and oil-field-services company Weatherford International /quotes/zigman/504342/quotes/nls/wft WFT -2.16% both lost more than 9% of their share price this week as investors pulled money out of companies catering to a well-supplied market that has been roiled this past week by a flood of negative economic news from around the world.
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