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Electro Rent Corp. Reports Operating Results for Fiscal Quarter Ended on 2008-11-30
Posted by: gurufocus (IP Logged)
Date: December 23, 2008 10:16PM

Electro Rent Corp. (ELRC) filed Quarterly Report for the period ended 2008-11-30. Electro Rent Corporation primarily engages in the rental lease and sale of state-of-the-art electronic equipment. About half of the Company's equipment portfolio at acquisition cost is composed of general purpose test and measurement instruments purchased from leading manufacturers such as Agilent Technologies and Tektronix. The remainder comprises personal computers and workstations. Personal computer lines include those from Compaq Dell IBM Apple and Toshiba. Electro Rent Corp. has a market cap of $296.41 million; its shares were traded at around $10.93 with a P/E ratio of 14.3 and P/S ratio of 2.05. The dividend yield of Electro Rent Corp. stocks is 5.24%. Electro Rent Corp. had an annual average earning growth of 9.4% over the past 5 years.

Highlight of Business Operations:

Net interest income was $0.6 million for the second quarter of fiscal 2009 compared to $0.9 million in the prior year period. The decrease reflects decreases in prevailing money-market interest rates and a lower cash balance. Interest income, net, includes $3.0 million of unrealized gain on our put option. In addition, interest income, net, includes $3.0 million of unrealized losses on our investments, trading.

Net interest income was $1.2 million for the first six months of fiscal 2009 compared to $1.8 million in the prior year period. The decrease reflects decreases in prevailing money-market interest rates and a lower cash balance. Interest income, net, includes $3.0 million of unrealized gain on our put option. In addition, interest income, net, includes $3.0 million of unrealized losses on our investments, trading.

In April 2007, our board of directors authorized a regular quarterly cash dividend of $0.10 per common share, or $0.40 per annum. We commenced payment of our quarterly cash dividend in July 2007. In January 2008, our board of directors approved an increase to $0.15 per common share, or $0.60 per annum. For the six months ended November 30, 2008 and 2007, we paid dividends of $7.8 million and $5.2 million, respectively.

During the first six months of fiscal 2009 and fiscal 2008, net cash provided by operating activities was $31.3 million and $28.9 million, respectively. The increase in operating cash flow was due primarily to a $1.3 million decrease in accounts receivable for the six months ended November 30, 2008 compared to an increase of $2.9 in the prior year period, and a remeasurement loss of $483 for the six months ended November 30, 2008, compared to a gain of $203 in the prior year period. This increase was offset by a decline in net income of $3.1 million for the six months ended November 30, 2008 compared to the six months ended November 30, 2007.

During the six months ended November 30, 2008 net cash used in investing activities was $16.2 million, compared to $25.4 million in the same period of fiscal 2008. The decline in net cash used in investing activities is due to a decrease in payments for the purchase of rental and lease equipment to $31.2 million for the six months ended November 30, 2008 compared to $37.2 million for the six months ended November 30, 2007. In addition, proceeds from sale of rental and lease equipment increased to $14.4 million for the six months ended November 30, 2008 from $12.7 million in the prior year period.

Net cash used in financing activities increased to $23.4 million from $4.0 million for the six months ended November 30, 2008 and 2007, respectively, due to an increase in payments for the repurchase of common stock to $16.4 million for the current fiscal period compared to $19 for the prior year period, and an increase in dividends paid to $7.8 million for the six months ended November 30, 2008 compared to $5.2 million for the six months ended November 30, 2007.

Read the The complete Report

Gurus who own ELRC

ELRC is in the portfolios of Bruce Sherman.

More on ELRC: Gurus buys and sells of ELRC 10-year financial history of ELRC. Insider buys/sells of ELRC.



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