Operator
Good day, ladies and gentlemen, and welcome to the ePlus inc. Earnings Results Conference Call. At this time all participants are in a listen-only mode. Later we will have a question and answer session and instructions will follow at that time. [Operator Instructions]. As a reminder today's conference is being recorded.
I would now like to turn the conference over to your host for today Mr. Kley Parkhurst, Senior Vice President. Sir you may begin.
Kley Parkhurst
Thank you, Mary, and thank you, everyone, for joining us. With me today are Phil Norton, Chairman, President and CEO of ePlus, and Elaine Marion, our Chief Financial Officer.
I want to take a moment to remind you that the statements we make this morning that are not historical facts may be deemed to be forward-looking statements and are based on management's current plans, estimates and projections. Actual and anticipated future results may vary materially due to certain risks and uncertainties, including without limitation:
- possible adverse effects resulting from the recent financial crisis in the credit markets and general slowdown in 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,
- 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 and market developments,
- the possibility of defects in our products or catalog content data,
- our ability to protect our intellectual property,
- our ability to reserve adequately for credit losses, and
- other risks and uncertainties detailed in the earnings release we issued yesterday and in our periodic filings with the Securities and Exchange Commission.
The Company undertakes no responsibility to update any of these forward-looking statements in light of new information or future events.
With that, I will turn the call over to Phil Norton. Phil?
Phil Norton
Thank you Kley.
We reported the fifth consecutive quarter of increased revenues in the first quarter of our fiscal year 2011, which ended June 30, 2010. This quarter’s revenues increased 24% over last fiscal year’s first quarter, and we are encouraged by the positive momentum in our business. Our enthusiasm is somewhat tempered by signs of a slowing economic recovery and lackluster job creation in the US economy. We will continue to focus on providing the best possible advanced technology services to create demand from our customer base, and make prudent investments in telemarketing and other demand generation efforts to capture new customers and business.
One of ePlus’ key resources is its human talent, and we have made several important additions to our bench. In early July, we announced the appointment of Dan Farrell as our Vice President of National Professional Services. Dan has more than 20 years experience in the professional services area and has been engaged in all aspects of professional services management, from service delivery and operations to enhancing and optimizing the customer experience.
In mid-July, we announced the appointment of Herb Siegel as our new Senior Vice President of Sales and Business Development for ePlus Systems, our software subsidiary. Herb joined ePlus in March, after a long career with one of the country’s largest enterprise software companies, and has been focusing on expanding our Systems salesforce, and working with all ePlus businesses to facilitate cross-selling.
At the end of July, we announced the appointment of John Callies to our Board of Directors. John is a seasoned executive who brings more than 35 years of experience in the financial and technology marketplace to ePlus. John spent 25 years of his career at IBM, where he most recently served as general manager of IBM Global Financing until his retirement in June 2010. At IBM, he led the world's largest information technology financing and asset management organization and was responsible for business direction and management of a portfolio of nearly $35 billion in total assets. John is a strong addition to our board of directors, with direct experience in our businesses, and we look forward to working with him over the next few years.
Moving to our key vendor partners, such as Cisco, HP, Oracle/Sun, VMware, NetApp, and Microsoft, we strive to continually enhance our capabilities with each of their platforms. Cisco, HP and Oracle/Sun products represented approximately 41%, 16% and 6% of our product and services sales, respectively, during the June quarter, as compared to 35%, 18% and 8%, respectively, in the same quarter last year.
In early July, we announced that ePlus achieved HP PartnerONE Healthcare Elite status. HP partners who attain Healthcare Elite status are considered experts in the healthcare environment, with superior HP-validated industry qualifications in everything from small practices to large healthcare systems.
On August 1st, we were notified that Cisco recognized us for excellence in customer satisfaction by delivering outstanding customer service to customers in the US. Cisco measures the customer satisfaction levels achieved by its Gold, Silver and Premier certified partners based on regional target goals, and provides a framework for partners like ePlus to build the sales, technical, and Cisco lifecycle services skills required to deliver Cisco’s advanced technology solutions. The award validates ePlus’ capabilities such as technical skills, business practices, customer satisfaction, and pre- and post-sales support capabilities.
While we feel confident in our ability to drive organic growth, given our strong financial position, we are also continuing to search for attractive acquisition candidates to complement and expand our core business. There are a number of potential targets in the marketplace, although most are still priced at uneconomic levels. We remain disciplined in our approach and continue to search for the right opportunities that fit our acquisition criteria.
Overall, I am very pleased with our results in the first quarter, and believe ePlus is well positioned to drive sustained organic growth in the remainder of fiscal 2011. We will also continue to evaluate potential M&A transactions as an avenue to accelerate growth, profitability and operating cash flows.
I would like to turn the call over to Elaine Marion, our CFO, who will discuss specific financial results.
Elaine Marion
Thanks Phil.
As Phil touched upon, we started off the fiscal year on a strong note with significant growth in revenues and earnings. Total revenues for the quarter were $189 million, an increase of $36.6 million or 24%, compared to $152.4 million in the June quarter of last year. On a sequential basis, revenues grew 4.8%, or $8.6 million, over the quarter ending March 31, 2010. For the quarter, net earnings totaled $4.7 million or $0.57 per diluted share, compared to $1.9 million or $0.23 per diluted share in the June quarter last year.
From a segment perspective, fiscal first quarter revenues in the technology sales business segment totaled $177.8 million, up $35.6 million or 25% on a year over year basis. The gross margin percentage for sales of products and services in the segment was steady as compared to the prior year, at 14.2%.
In the financing business segment, total revenues for the first quarter were $11.2 million, up $2.1 million or 10.1% compared to the first quarter last year. At June 30, 2010, we had $133.4 million of investment in leases - net compared to $153.6 million at March 31, 2010, a decrease of $20 million. This decline in our lease portfolio and resulting increase in lease revenue was driven, in part, by the sale of two large leases totaling approximately $29.0 million. The transactions were classified as transfers of financial assets, and as such the net gain was recorded in lease revenues while the investment in leases on our balance sheet was reduced by the book value of the leases transfered.
For the first quarter, professional and other fees, salaries and benefits, and general and administrative expenses increased approximately $3.5 million year over year due to increased legal fees related to the patent infringement litigation, higher commissions and bonuses related to the increase in sales, and slightly higher headcount.
Turning to the balance sheet, cash and cash equivalents totaled $79.3 million at June 30, 2010 compared to $85.1 million at March 31, 2010. Non-recourse notes payable totaled $46.9 million as of June 30, 2010, down from $53.6 million as of March 31, 2010. Shareholder’s equity was $190.4 million as compared to $185.5 million as of March 31, 2010.
During the quarter, we continued to repurchase stock and we spent approximately $400,000 to repurchase 23,719 shares at an average cost of $17.17 per share. As of June 30, 2010, there were approximately 415,000 shares available for repurchase under our current buyback authorization. Since the inception of our initial repurchase program on September 20, 2001 to June 30, 2010, we have repurchased approximately 3.8 million shares of our outstanding common stock at an average cost of $11.46 per share for a total purchase price of almost $44 million.
In summary, the business performed well during the quarter, and we continue to have sizeable cash balances and shareholder equity, with recourse debt of approximately $100 thousand. We are well positioned to take advantage of opportunities as they arise, such as strategic acquisitions, and to invest in the business to continue to build our customer base and advanced technology services. We remain an attractive employer for top-notch talent in the business, and we are continuing to hire new personnel to meet customer demand and broaden our geographic reach and engineering capabilities.
That completes my portion of today's call. Operator, we'd like to open the call to questions.
Q&A
(None)
Phil Norton
Thank you for participating in our call this morning. We appreciate your interest in ePlus and hope you can join us again next quarter.
