☒ |
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☐ |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Delaware
|
54-1817218
|
|
(State or other jurisdiction of incorporation or organization)
|
(I.R.S. Employer Identification No.)
|
Large accelerated filer ☐
|
Accelerated filer
☒
|
Non-accelerated filer ☐(do not check if smaller reporting company)
|
Smaller reporting company ☐
Emerging growth company ☐
|
Part I. Financial Information:
|
||
Item 1.
|
||
5
|
||
6
|
||
7
|
||
8
|
||
10
|
||
11
|
||
Item 2.
|
26
|
|
Item 3.
|
41
|
|
Item 4.
|
42
|
|
Part II. Other Information:
|
||
Item 1.
|
43
|
|
Item 1A.
|
43
|
|
Item 2.
|
44
|
|
Item 3.
|
45
|
|
Item 4.
|
45
|
|
Item 5.
|
45
|
|
Item 6.
|
45
|
|
46
|
· |
national and international political instability fostering uncertainty and volatility in the global economy including exposure to fluctuation in foreign currency rates, and downward pressure on prices;
|
· |
significant adverse changes in, reductions in, or loss of our largest volume customer or one or more of our large volume customers, or vendors;
|
· |
exposure to changes in, interpretations of, or enforcement trends in legislation and regulatory matters;
|
· |
the creditworthiness of our customers and our ability to reserve adequately for credit losses;
|
· |
reduction of vendor incentives provided to us;
|
· |
we offer a comprehensive set of solutions — integrating information technology (IT) product sales, third-party software assurance and maintenance, our advanced professional and managed services, our proprietary software, and financing, and encounter the following challenges, risks, difficulties and uncertainties:
|
o |
managing a diverse product set of solutions in highly competitive markets with a number of key vendors;
|
o |
increasing the total number of customers utilizing integrated solutions by up-selling within our customer base and gaining new customers;
|
o |
adapting to meet changes in markets and competitive developments;
|
o |
maintaining and increasing advanced professional services by retaining highly skilled, competent, personnel and vendor certifications;
|
o |
increasing the total number of customers who utilize our managed services and professional services and continuing to enhance our managed services offerings to remain competitive in the marketplace;
|
o |
performing professional and managed services competently;
|
o |
maintaining our proprietary software and updating our technology infrastructure to remain competitive in the marketplace; and
|
o |
reliance on third parties to perform some of our service obligations to our customers;
|
· |
changes in the IT industry and/or rapid changes in product offerings, including the proliferation of the cloud, infrastructure as a service and software as a service;
|
· |
our dependency on continued innovations in hardware, software, and services offerings by our vendors and our ability to partner with them;
|
· |
future growth rates in our core businesses;
|
· |
failure to comply with public sector contracts or applicable laws;
|
· |
changes to or loss of members of our senior management team and/or failure to successfully implement succession plans;
|
· |
our dependence on key personnel to maintain certain customer relationships, and our ability to hire, train, and retain sufficient qualified personnel;
|
· |
our ability to implement comprehensive plans for the integration of sales forces, cost containment, asset rationalization, systems integration and other key strategies;
|
· |
a possible decrease in the capital spending budgets of our customers or a decrease in purchases from us;
|
· |
our contracts may not be adequate to protect us, and we are subject to audit in which we may not pass, and our professional and liability insurance policies coverage may be insufficient to cover a claim;
|
· |
disruptions or a security breach in our IT systems and data and audio communication networks;
|
· |
our ability to secure our customers’ electronic and other confidential information, and remain secure during a cyber-security attack;
|
· |
our ability to raise capital, maintain or increase as needed our lines of credit with vendors or floor planning facility, or obtain debt for our financing transactions
or the effect of those changes on our common stock or its holders;
|
· |
our ability to realize our investment in leased equipment;
|
· |
our ability to successfully perform due diligence and integrate acquired businesses;
|
· |
the possibility of goodwill impairment charges in the future;
|
· |
our ability to protect our intellectual property rights and successfully defend any challenges to the validity of our patents or allegations that we are infringing upon any third party patents, and the costs associated with those actions, and, when appropriate, license required technology; and
|
· |
significant changes in accounting standards including changes to the financial reporting of leases which could impact the demand for our leasing services, or misclassification of products and services we sell resulting in the misapplication of revenue recognition policies or inaccurate costs and completion dates for our services which could affect our estimates.
|
Three Months Ended
December 31, |
Nine Months Ended
December 31, |
|||||||||||||||
2017
|
2016
|
2017
|
2016
|
|||||||||||||
(in thousands, except per share data)
|
||||||||||||||||
Net sales
|
$
|
342,569
|
$
|
326,657
|
$
|
1,080,571
|
$
|
996,622
|
||||||||
Cost of sales
|
265,881
|
252,871
|
838,719
|
773,239
|
||||||||||||
Gross profit
|
76,688
|
73,786
|
241,852
|
223,383
|
||||||||||||
Selling, general, and administrative expenses
|
57,134
|
50,160
|
168,138
|
149,821
|
||||||||||||
Depreciation and amortization
|
2,894
|
1,910
|
7,086
|
5,408
|
||||||||||||
Interest and financing costs
|
270
|
409
|
903
|
1,158
|
||||||||||||
Operating expenses
|
60,298
|
52,479
|
176,127
|
156,387
|
||||||||||||
Operating income
|
16,390
|
21,307
|
65,725
|
66,996
|
||||||||||||
Other income (expense)
|
(131
|
)
|
-
|
(1
|
)
|
380
|
||||||||||
Earnings before tax
|
16,259
|
21,307
|
65,724
|
67,376
|
||||||||||||
Provision for income taxes
|
678
|
8,687
|
19,499
|
27,310
|
||||||||||||
Net earnings
|
$
|
15,581
|
$
|
12,620
|
$
|
46,225
|
$
|
40,066
|
||||||||
Net earnings per common share—basic
|
$
|
1.12
|
$
|
0.92
|
$
|
3.34
|
$
|
2.88
|
||||||||
Net earnings per common share—diluted
|
$
|
1.11
|
$
|
0.91
|
$
|
3.30
|
$
|
2.86
|
||||||||
Weighted average common shares outstanding—basic
|
13,851
|
13,791
|
13,845
|
13,891
|
||||||||||||
Weighted average common shares outstanding—diluted
|
13,990
|
13,920
|
14,022
|
14,026
|
Three Months Ended
December 31, |
Nine Months Ended
December 31, |
|||||||||||||||
2017
|
2016
|
2017
|
2016
|
|||||||||||||
(amounts in thousands)
|
||||||||||||||||
NET EARNINGS
|
$
|
15,581
|
$
|
12,620
|
$
|
46,225
|
$
|
40,066
|
||||||||
OTHER COMPREHENSIVE INCOME, NET OF TAX:
|
||||||||||||||||
Foreign currency translation adjustments
|
75
|
(145
|
)
|
778
|
(240
|
)
|
||||||||||
Other comprehensive income (loss)
|
75
|
(145
|
)
|
778
|
(240
|
)
|
||||||||||
TOTAL COMPREHENSIVE INCOME
|
$
|
15,656
|
$
|
12,475
|
$
|
47,003
|
$
|
39,826
|
Nine Months Ended December 31,
|
||||||||
2017
|
2016
|
|||||||
(in thousands)
|
||||||||
Cash Flows From Operating Activities:
|
||||||||
Net earnings
|
$
|
46,225
|
$
|
40,066
|
||||
Adjustments to reconcile net earnings to net cash (used in) provided by operating activities:
|
||||||||
Depreciation and amortization
|
11,324
|
8,758
|
||||||
Reserve for credit losses, inventory obsolescence and sales returns
|
286
|
926
|
||||||
Share-based compensation expense
|
4,856
|
4,520
|
||||||
Deferred taxes
|
(3,058
|
)
|
-
|
|||||
Payments from lessees directly to lenders
—
operating leases
|
(1,325
|
)
|
(1,831
|
)
|
||||
Gain on disposal of property, equipment and operating lease equipment
|
(7,555
|
)
|
(3,742
|
)
|
||||
Gain on sale of financing receivables
|
(4,625
|
)
|
(3,968
|
)
|
||||
Other
|
1
|
316
|
||||||
Changes in:
|
||||||||
Accounts receivable—trade
|
(8,295
|
)
|
(57,732
|
)
|
||||
Accounts receivable—other
|
(1,976
|
)
|
(4,232
|
)
|
||||
Inventories
|
43,332
|
(77,422
|
)
|
|||||
Financing receivables—net
|
(13,045
|
)
|
17,797
|
|||||
Deferred costs, other intangible assets and other assets
|
(26,188
|
)
|
1,838
|
|||||
Accounts payable
|
18,406
|
53,208
|
||||||
Salaries and commissions payable, deferred revenue and other liabilities
|
(9,539
|
)
|
51,200
|
|||||
Net cash provided by operating activities
|
$
|
48,824
|
$
|
29,702
|
||||
Cash Flows From Investing Activities:
|
||||||||
Proceeds from sale of property, equipment and operating lease equipment
|
9,967
|
6,380
|
||||||
Purchases of property, equipment, software, and operating lease equipment
|
(6,298
|
)
|
(7,300
|
)
|
||||
Purchases of assets to be leased or financed
|
(5,716
|
)
|
(5,897
|
)
|
||||
Issuance of financing receivables
|
(138,160
|
)
|
(114,671
|
)
|
||||
Repayments of financing receivables
|
59,029
|
44,091
|
||||||
Proceeds from sale of financing receivables
|
64,103
|
39,857
|
||||||
Cash used in acquisitions, net of cash acquired
|
(37,718
|
)
|
(9,500
|
)
|
||||
Net cash used in investing activities
|
$
|
(54,793
|
)
|
$
|
(47,040
|
)
|
Nine Months Ended December 31,
|
||||||||
2017
|
2016
|
|||||||
(in thousands)
|
||||||||
Cash Flows From Financing Activities:
|
||||||||
Borrowings of non-recourse and recourse notes payable
|
$
|
39,365
|
$
|
34,020
|
||||
Repayments of non-recourse and recourse notes payable
|
(27,269
|
)
|
(5,412
|
)
|
||||
Repurchase of common stock
|
(13,399
|
)
|
(30,493
|
)
|
||||
Payment of contingent consideration
|
-
|
(718
|
)
|
|||||
Repayments of financing of acquisitions
|
(1,604
|
)
|
-
|
|||||
Net borrowings (repayments) on floor plan facility
|
(24,851
|
)
|
(5,602
|
)
|
||||
Net cash used in financing activities
|
(27,758
|
)
|
(8,205
|
)
|
||||
Effect of exchange rate changes on cash
|
72
|
454
|
||||||
Net Decrease in Cash and Cash Equivalents
|
(33,655
|
)
|
(25,089
|
)
|
||||
Cash and Cash Equivalents, Beginning of Period
|
109,760
|
94,766
|
||||||
Cash and Cash Equivalents, End of Period
|
$
|
76,105
|
$
|
69,677
|
||||
Supplemental Disclosures of Cash Flow Information:
|
||||||||
Cash paid for interest
|
$
|
421
|
$
|
38
|
||||
Cash paid for income taxes
|
$
|
29,987
|
$
|
23,381
|
||||
Schedule of Non-Cash Investing and Financing Activities:
|
||||||||
Proceeds from sale of property, equipment, and operating lease equipment
|
$
|
3,463
|
$
|
429
|
||||
Purchases of property, equipment, software, and operating lease equipment
|
$
|
(751
|
) |
$
|
(2,442
|
)
|
||
Purchase of assets to be leased or financed
|
$
|
(7,225
|
)
|
$
|
(12,700
|
)
|
||
Issuance of financing receivables
|
$
|
(74,907
|
)
|
$
|
(110,120
|
)
|
||
Repayment of financing receivables
|
$
|
9,572
|
$
|
16,454
|
||||
Proceeds from sale of financing receivables
|
$
|
83,954
|
$
|
104,430
|
||||
Financing of acquisitions
|
$
|
(12,050
|
)
|
$
|
-
|
|||
Borrowing of non-recourse and recourse notes payable
|
$
|
8,904
|
$
|
33,651
|
||||
Repayments of non-recourse and recourse notes payable
|
$
|
(14,465
|
)
|
$
|
(20,438
|
)
|
||
Vesting of share-based compensation
|
$
|
12,010
|
$
|
7,982
|
||||
Repurchase of common stock included in accounts payable
|
$
|
(766
|
)
|
$
|
-
|
Common Stock
|
Additional
Paid-In
|
Treasury
|
Retained
|
Accumulated
Other
Comprehensive
|
||||||||||||||||||||||||
Shares
|
Par Value
|
Capital
|
Stock
|
Earnings
|
Income
|
Total
|
||||||||||||||||||||||
Balance, April 1, 2017
|
14,161
|
$
|
142
|
$
|
123,536
|
$
|
-
|
$
|
222,823
|
$
|
(583
|
)
|
$
|
345,918
|
||||||||||||||
Issuance of restricted stock awards
|
68
|
-
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||||||||
Share-based compensation
|
-
|
-
|
4,856
|
-
|
-
|
-
|
4,856
|
|||||||||||||||||||||
Repurchase of common stock
|
(183
|
)
|
-
|
-
|
(14,165
|
)
|
-
|
-
|
(14,165
|
)
|
||||||||||||||||||
Net earnings
|
-
|
-
|
-
|
-
|
46,225
|
-
|
46,225
|
|||||||||||||||||||||
Foreign currency translation adjustment
|
-
|
-
|
-
|
-
|
-
|
778
|
778
|
|||||||||||||||||||||
Balance, December 31, 2017
|
14,046
|
$
|
142
|
$
|
128,392
|
$
|
(14,165
|
)
|
$
|
269,048
|
$
|
195
|
$
|
383,612
|
1. |
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
|
2.
|
RECENT ACCOUNTING PRONOUNCEMENTS
|
· |
We will adopt the guidance in our quarter ending June 30, 2018. We currently prefer to adopt the standard using the full retrospective method; however, our ability to do so is dependent on many factors, including the completion of our analysis of information necessary to recast prior period financial statements. Based on these and other factors, we may decide to use the modified retrospective method.
|
· |
Substantially all of our revenue within our technology segment is contractual and is within the scope of ASU No. 2014-09, as amended. The majority of our revenues within our financing segment are scoped out of this update.
|
· |
The majority of our revenues within our technology segment are derived from sales of third-party products, third-party software, third-party services, such as maintenance and software assurance, and sales of
e
Plus professional and managed services.
|
o |
We recognize revenue on sales of third party product and third-party software on a gross basis upon delivery and we are still assessing whether we are acting as a principal or an agent in these transactions under the update.
|
o |
We recognize sales of third party maintenance and software assurance on a net basis at the date of sale and sales of
e
Plus professional and managed services on a gross basis as the services are performed. We do not anticipate a material impact to our revenue recognition for these transactions under the update.
|
· |
We expect that our disclosures in our notes to our consolidated financial statements related to revenue recognition will be significantly expanded under the new standard.
|
3. |
FINANCING RECEIVABLES AND OPERATING LEASES
|
December 31, 2017
|
Notes
Receivables
|
Lease-Related
Receivables
|
Total Financing
Receivables
|
|||||||||
Minimum payments
|
$
|
59,444
|
$
|
73,022
|
$
|
132,466
|
||||||
Estimated unguaranteed residual value (1)
|
-
|
13,358
|
13,358
|
|||||||||
Initial direct costs, net of amortization (2)
|
369
|
321
|
690
|
|||||||||
Unearned income
|
-
|
(6,034
|
)
|
(6,034
|
)
|
|||||||
Reserve for credit losses (3)
|
(451
|
)
|
(621
|
)
|
(1,072
|
)
|
||||||
Total, net
|
$
|
59,362
|
$
|
80,046
|
$
|
139,408
|
||||||
Reported as:
|
||||||||||||
Current
|
$
|
33,109
|
$
|
41,489
|
$
|
74,598
|
||||||
Long-term
|
26,253
|
38,557
|
64,810
|
|||||||||
Total, net
|
$
|
59,362
|
$
|
80,046
|
$
|
139,408
|
(1) |
Includes estimated unguaranteed residual values of $7,753 thousand for direct financing leases, which have been sold and accounted for as sales.
|
(2) |
Initial direct costs are shown net of amortization of $334 thousand.
|
(3) |
For details on reserve for credit losses, refer to Note 5, “
Reserves for Credit Losses
.”
|
March 31, 2017
|
Notes
Receivables
|
Lease-Related
Receivables
|
Total Financing
Receivables
|
|||||||||
Minimum payments
|
$
|
48,524
|
$
|
57,872
|
$
|
106,396
|
||||||
Estimated unguaranteed residual value (1)
|
-
|
18,273
|
18,273
|
|||||||||
Initial direct costs, net of amortization (2)
|
279
|
341
|
620
|
|||||||||
Unearned income
|
-
|
(5,913
|
)
|
(5,913
|
)
|
|||||||
Reserve for credit losses (3)
|
(3,434
|
)
|
(679
|
)
|
(4,113
|
)
|
||||||
Total, net
|
$
|
45,369
|
$
|
69,894
|
$
|
115,263
|
||||||
Reported as:
|
||||||||||||
Current
|
$
|
23,780
|
$
|
27,876
|
$
|
51,656
|
||||||
Long-term
|
21,589
|
42,018
|
63,607
|
|||||||||
Total, net
|
$
|
45,369
|
$
|
69,894
|
$
|
115,263
|
(1) |
Includes estimated unguaranteed residual values of $12,677 thousand for direct financing leases which have been sold and accounted for as sales.
|
(2) |
Initial direct costs are shown net of amortization of $510 thousand.
|
(3) |
For details on reserve for credit losses, refer to Note 5, “
Reserves for Credit Losses
.”
|
December 31,
2017
|
March 31,
2017
|
|||||||
Cost of equipment under operating leases
|
$
|
16,804
|
$
|
16,725
|
||||
Accumulated depreciation
|
(9,039
|
)
|
(8,449
|
)
|
||||
Investment in operating lease equipment—net (1)
|
$
|
7,765
|
$
|
8,276
|
(1) |
These totals include estimated unguaranteed residual values of $2,077 thousand and $1,117 thousand as of December 31, 2017 and March 31, 2017, respectively.
|
4. |
GOODWILL AND OTHER INTANGIBLE ASSETS
|
Nine Months Ended December 31, 2017
|
Nine Months Ended December 31, 2016
|
|||||||||||||||||||||||
Goodwill
|
Accumulated
Amortization
/ Impairment
Loss
|
Net
Carrying
Amount
|
Goodwill
|
Accumulated
Amortization
/ Impairment
Loss
|
Net
Carrying
Amount
|
|||||||||||||||||||
Balance as of March 31
|
$
|
57,070
|
$
|
(8,673
|
)
|
$
|
48,397
|
$
|
50,824
|
$
|
(8,673
|
)
|
$
|
42,151
|
||||||||||
Acquisitions
|
27,996
|
-
|
27,996
|
7,636
|
-
|
7,636
|
||||||||||||||||||
Foreign currency translations
|
153
|
-
|
153
|
(315
|
)
|
-
|
(315
|
)
|
||||||||||||||||
Balance as of December 31
|
$
|
85,219
|
$
|
(8,673
|
)
|
$
|
76,546
|
$
|
58,145
|
$
|
(8,673
|
)
|
$
|
49,472
|
December 31, 2017
|
March 31, 2017
|
|||||||||||||||||||||||
Gross
Carrying
Amount
|
Accumulated
Amortization
|
Net
Carrying
Amount
|
Gross
Carrying
Amount
|
Accumulated
Amortization
|
Net
Carrying
Amount
|
|||||||||||||||||||
Customer relationships & other intangibles
|
$
|
41,777
|
$
|
(16,792
|
)
|
$
|
24,985
|
$
|
23,373
|
$
|
(12,553
|
)
|
$
|
10,820
|
||||||||||
Capitalized software development
|
4,908
|
(2,479
|
)
|
2,429
|
3,649
|
(2,310
|
)
|
1,339
|
||||||||||||||||
Total
|
$
|
46,685
|
$
|
(19,271
|
)
|
$
|
27,414
|
$
|
27,022
|
$
|
(14,863
|
)
|
$
|
12,159
|
|
Accounts
Receivable
|
Notes
Receivable
|
Lease-Related
Receivables
|
Total
|
||||||||||||
Balance April 1, 2017
|
$
|
1,279
|
$
|
3,434
|
$
|
679
|
$
|
5,392
|
||||||||
Provision for credit losses
|
165
|
37
|
106
|
308
|
||||||||||||
Write-offs and other
|
-
|
(3,020
|
)
|
(164
|
)
|
(3,184
|
)
|
|||||||||
Balance December 31, 2017
|
$
|
1,444
|
$
|
451
|
$
|
621
|
$
|
2,516
|
Accounts
Receivable
|
Notes
Receivable
|
Lease-Related
Receivables
|
Total
|
|||||||||||||
Balance April 1, 2016
|
$
|
1,127
|
$
|
3,381
|
$
|
685
|
$
|
5,193
|
||||||||
Provision for credit losses
|
229
|
139
|
93
|
461
|
||||||||||||
Write-offs and other
|
(32
|
)
|
(12
|
)
|
-
|
(44
|
)
|
|||||||||
Balance December 31, 2016
|
$
|
1,324
|
$
|
3,508
|
$
|
778
|
$
|
5,610
|
December 31, 2017
|
March 31, 2017
|
|||||||||||||||
Notes
Receivable
|
Lease-
Related
Receivables
|
Notes
Receivable
|
Lease-
Related
Receivables
|
|||||||||||||
Reserves for credit losses:
|
||||||||||||||||
Ending balance: collectively evaluated for impairment
|
$
|
389
|
$
|
621
|
$
|
348
|
$
|
556
|
||||||||
Ending balance: individually evaluated for impairment
|
62
|
-
|
3,086
|
123
|
||||||||||||
Ending balance
|
$
|
451
|
$
|
621
|
$
|
3,434
|
$
|
679
|
||||||||
Minimum payments:
|
||||||||||||||||
Ending balance: collectively evaluated for impairment
|
$
|
59,382
|
$
|
73,022
|
$
|
45,438
|
$
|
57,730
|
||||||||
Ending balance: individually evaluated for impairment
|
62
|
-
|
3,086
|
142
|
||||||||||||
Ending balance
|
$
|
59,444
|
$
|
73,022
|
$
|
48,524
|
$
|
57,872
|
31-60
Days
Past
Due
|
61-90
Days
Past
Due
|
Greater
than 90
Days
Past
Due
|
Total
Past
Due
|
Current
|
Unbilled
Minimum
Lease
Payments
|
Total
Minimum
Lease
Payments
|
Unearned
Income
|
Non-
Recourse
Notes
Payable
|
Net
Credit
Exposure
|
|||||||||||||||||||||||||||||||
December 31, 2017
|
||||||||||||||||||||||||||||||||||||||||
High CQR
|
$
|
188
|
$
|
90
|
$
|
907
|
$
|
1,185
|
$
|
18,238
|
$
|
30,496
|
$
|
49,919
|
$
|
(3,027
|
)
|
$
|
(14,420
|
)
|
$
|
32,472
|
||||||||||||||||||
Average CQR
|
30
|
36
|
216
|
282
|
124
|
22,697
|
23,103
|
(1,385
|
)
|
(11,413
|
)
|
10,305
|
||||||||||||||||||||||||||||
Low CQR
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||||||||||||||
Total
|
$
|
218
|
$
|
126
|
$
|
1,123
|
$
|
1,467
|
$
|
18,362
|
$
|
53,193
|
$
|
73,022
|
$
|
(4,412
|
)
|
$
|
(25,833
|
)
|
$
|
42,777
|
||||||||||||||||||
March 31, 2017
|
||||||||||||||||||||||||||||||||||||||||
High CQR
|
$
|
379
|
$
|
224
|
$
|
230
|
$
|
833
|
$
|
406
|
$
|
32,532
|
$
|
33,771
|
$
|
(2,362
|
)
|
$
|
(12,924
|
)
|
$
|
18,485
|
||||||||||||||||||
Average CQR
|
113
|
20
|
113
|
246
|
91
|
23,622
|
23,959
|
(1,556
|
)
|
(13,353
|
)
|
9,050
|
||||||||||||||||||||||||||||
Low CQR
|
-
|
-
|
142
|
142
|
-
|
-
|
142
|
(19
|
)
|
-
|
123
|
|||||||||||||||||||||||||||||
Total
|
$
|
492
|
$
|
244
|
$
|
485
|
$
|
1,221
|
$
|
497
|
$
|
56,154
|
$
|
57,872
|
$
|
(3,937
|
)
|
$
|
(26,277
|
)
|
$
|
27,658
|
6.
|
PROPERTY, EQUIPMENT, OTHER ASSETS AND LIABILITIES
|
December 31,
2017
|
March 31,
2017
|
|||||||
Other current assets:
|
||||||||
Deposits & funds held in escrow
|
$
|
14,819
|
$
|
39,161
|
||||
Prepaid assets
|
10,429
|
3,388
|
||||||
Other
|
722
|
815
|
||||||
Total other current assets
|
$
|
25,970
|
$
|
43,364
|
||||
Property, equipment and other assets
|
||||||||
Property and equipment, net
|
$
|
8,013
|
$
|
6,690
|
||||
Deferred costs
|
7,326
|
3,536
|
||||||
Other
|
2,293
|
1,730
|
||||||
Total other assets - long term
|
$
|
17,632
|
$
|
11,956
|
December 31,
2017
|
March 31,
2017
|
|||||||
Other current liabilities:
|
||||||||
Accrued expenses
|
$
|
7,907
|
$
|
7,450
|
||||
Accrued income taxes payable
|
170
|
1,761
|
||||||
Contingent consideration
|
5,360
|
554
|
||||||
Other
|
12,679
|
9,414
|
||||||
Total other current liabilities
|
$
|
26,116
|
$
|
19,179
|
||||
Other liabilities:
|
||||||||
Deferred revenue
|
$
|
10,064
|
$
|
4,704
|
||||
Contingent consideration long-term
|
7,765
|
1,500
|
||||||
Other
|
689
|
876
|
||||||
Total other liabilities - long term
|
$
|
18,518
|
$
|
7,080
|
December 31,
2017
|
March 31,
2017
|
|||||||
Recourse notes payable with interest rates ranging from 3.20% to 4.13% as of March 31, 2017.
|
||||||||
Current
|
$
|
-
|
$
|
908
|
||||
Non-recourse notes payable secured by financing receivables and investment in operating leases with interest rates ranging from 2.00% to 8.45% December 31, 2017, and ranging from 2.00% to 7.75% as of March 31, 2017.
|
||||||||
Current
|
$
|
27,649
|
$
|
26,085
|
||||
Long-term
|
3,840
|
10,431
|
||||||
Total non-recourse notes payable
|
$
|
31,489
|
$
|
36,516
|
8.
|
COMMITMENTS AND CONTINGENCIES
|
9.
|
EARNINGS PER SHARE
|
Three Months Ended
December 31, |
Nine Months Ended
December 31,
|
|||||||||||||||
2017
|
2016
|
2017
|
2016
|
|||||||||||||
Net earnings attributable to common shareholders - basic and diluted
|
$
|
15,581
|
$
|
12,620
|
$
|
46,225
|
$
|
40,066
|
||||||||
Basic and diluted common shares outstanding:
|
||||||||||||||||
Weighted average common shares outstanding — basic
|
13,851
|
13,791
|
13,845
|
13,891
|
||||||||||||
Effect of dilutive shares
|
139
|
129
|
177
|
135
|
||||||||||||
Weighted average shares common outstanding — diluted
|
13,990
|
13,920
|
14,022
|
14,026
|
||||||||||||
Earnings per common share - basic
|
$
|
1.12
|
$
|
0.92
|
$
|
3.34
|
$
|
2.88
|
||||||||
Earnings per common share - diluted
|
$
|
1.11
|
$
|
0.91
|
$
|
3.30
|
$
|
2.86
|
11. |
SHARE-BASED COMPENSATION
|
Number of Shares
|
Weighted Average
Grant-date Fair Value
|
|||||||
Nonvested April 1, 2017
|
371,689
|
$
|
40.45
|
|||||
Granted
|
72,375
|
$
|
80.25
|
|||||
Vested
|
(156,240
|
)
|
$
|
38.52
|
||||
Forfeited
|
(4,108
|
)
|
$
|
39.37
|
||||
Nonvested December 31, 2017
|
283,716
|
$
|
51.68
|
12.
|
INCOME TAXES
|
13.
|
FAIR VALUE OF FINANCIAL INSTRUMENTS
|
Fair Value Measurement Using
|
||||||||||||||||
Recorded
Amount
|
Quoted Prices in
Active Markets for
Identical Assets
(Level 1)
|
Significant
Other
Observable
Inputs (Level 2)
|
Significant
Unobservable
Inputs
(Level 3) |
|||||||||||||
December 31, 2017
|
||||||||||||||||
Assets:
|
||||||||||||||||
Money market funds
|
$
|
21,596
|
$
|
21,596
|
$
|
-
|
$
|
-
|
||||||||
Liabilities:
|
||||||||||||||||
Contingent consideration
|
$
|
13,125
|
$
|
-
|
$
|
-
|
$
|
13,125
|
||||||||
March 31, 2017
|
||||||||||||||||
Assets:
|
||||||||||||||||
Money market funds
|
$
|
50,866
|
$
|
50,866
|
$
|
-
|
$
|
-
|
||||||||
Liabilities:
|
||||||||||||||||
Contingent consideration
|
$
|
554
|
$
|
-
|
$
|
-
|
$
|
554
|
14. |
SEGMENT REPORTING
|
Nine Months Ended
|
||||||||||||||||||||||||
December 31, 2017
|
December 31, 2016
|
|||||||||||||||||||||||
Technology
|
Financing
|
Total
|
Technology
|
Financing
|
Total
|
|||||||||||||||||||
Sales of product and services
|
$
|
1,045,792
|
$
|
-
|
$
|
1,045,792
|
$
|
968,799
|
$
|
-
|
$
|
968,799
|
||||||||||||
Financing revenue
|
-
|
30,698
|
30,698
|
-
|
23,899
|
23,899
|
||||||||||||||||||
Fee and other income
|
3,707
|
374
|
4,081
|
3,679
|
245
|
3,924
|
||||||||||||||||||
Net sales
|
1,049,499
|
31,072
|
1,080,571
|
972,478
|
24,144
|
996,622
|
||||||||||||||||||
Cost of sales, product and services
|
834,873
|
-
|
834,873
|
769,780
|
-
|
769,780
|
||||||||||||||||||
Direct lease costs
|
-
|
3,846
|
3,846
|
-
|
3,459
|
3,459
|
||||||||||||||||||
Cost of sales
|
834,873
|
3,846
|
838,719
|
769,780
|
3,459
|
773,239
|
||||||||||||||||||
Selling, general, and administrative expenses
|
158,838
|
9,300
|
168,138
|
141,295
|
8,526
|
149,821
|
||||||||||||||||||
Depreciation and amortization
|
7,084
|
2
|
7,086
|
5,400
|
8
|
5,408
|
||||||||||||||||||
Interest and financing costs
|
-
|
903
|
903
|
-
|
1,158
|
1,158
|
||||||||||||||||||
Operating expenses
|
165,922
|
10,205
|
176,127
|
146,695
|
9,692
|
156,387
|
||||||||||||||||||
Operating income
|
$
|
48,704
|
$
|
17,021
|
$
|
65,725
|
$
|
56,003
|
$
|
10,993
|
$
|
66,996
|
||||||||||||
Selected Financial Data - Statement of Cash Flow
|
||||||||||||||||||||||||
Depreciation and amortization
|
$
|
7,413
|
$
|
3,911
|
$
|
11,324
|
$
|
5,494
|
$
|
3,264
|
$
|
8,758
|
||||||||||||
Purchases of property, equipment and operating lease equipment
|
$
|
4,064
|
$
|
2,234
|
$
|
6,298
|
$
|
2,413
|
$
|
4,887
|
$
|
7,300
|
||||||||||||
Selected Financial Data - Balance Sheet
|
||||||||||||||||||||||||
Total assets
|
$
|
595,584
|
$
|
169,069
|
$
|
764,653
|
$
|
546,728
|
$
|
189,950
|
$
|
736,678
|
Acquisition
Date Amount
|
||||
Accounts receivable and other assets
|
$
|
14,353
|
||
Property and equipment
|
1,620
|
|||
Identified intangible assets
|
13,650
|
|||
Accounts payable and other current liabilities
|
(12,313
|
)
|
||
Total identifiable net assets
|
17,310
|
|||
Goodwill
|
21,088
|
|||
Total purchase consideration
|
$
|
38,398
|
Acquisition
Date Amount
|
||||
Accounts receivable and other assets
|
$
|
488
|
||
Identified intangible assets
|
4,130
|
|||
Accounts payable and other current liabilities
|
(1,822
|
)
|
||
Total identifiable net assets
|
2,796
|
|||
Goodwill
|
7,189
|
|||
Total purchase consideration
|
$
|
9,985
|
Acquisition
Date Amount
|
||||
Accounts receivable and other current assets
|
$
|
7,491
|
||
Property and equipment
|
1,045
|
|||
Identified intangible assets
|
4,090
|
|||
Accounts payable and other current liabilities
|
(5,786
|
)
|
||
Total identifiable net assets
|
6,840
|
|||
Goodwill
|
6,227
|
|||
Total purchase consideration
|
$
|
13,067
|
Three Months Ended
December 31, |
Nine Months Ended
December 31, |
|||||||||||||||
2017
|
2016
|
2017
|
2016
|
|||||||||||||
Sales of products and services
|
$
|
330,953
|
$
|
317,391
|
$
|
1,045,792
|
$
|
968,799
|
||||||||
Adjusted gross billings of product and services (1)
|
$
|
464,105
|
$
|
432,407
|
$
|
1,449,371
|
$
|
1,317,188
|
||||||||
Gross margin
|
22.4
|
%
|
22.6
|
%
|
22.4
|
%
|
22.4
|
%
|
||||||||
Gross margin, product and services
|
20.1
|
%
|
20.7
|
%
|
20.2
|
%
|
20.5
|
%
|
||||||||
Operating income margin
|
4.8
|
%
|
6.5
|
%
|
6.1
|
%
|
6.7
|
%
|
||||||||
Net earnings
|
$
|
15,581
|
$
|
12,620
|
$
|
46,225
|
$
|
40,066
|
||||||||
Net earnings margin
|
4.5
|
%
|
3.9
|
%
|
4.3
|
%
|
4.0
|
%
|
||||||||
Net earnings per common share - diluted
|
$
|
1.11
|
$
|
0.91
|
$
|
3.30
|
$
|
2.86
|
||||||||
Non-GAAP: Net earnings (2)
|
$
|
13,574
|
$
|
15,621
|
$
|
44,013
|
$
|
43,710
|
||||||||
Non-GAAP: Net earnings per common share - diluted (2)
|
$
|
0.97
|
$
|
1.12
|
$
|
3.14
|
$
|
3.12
|
||||||||
Adjusted EBITDA (3)
|
$
|
19,284
|
$
|
23,217
|
$
|
72,811
|
$
|
72,404
|
||||||||
Adjusted EBITDA margin (3)
|
5.6
|
%
|
7.1
|
%
|
6.7
|
%
|
7.3
|
%
|
||||||||
Purchases of property and equipment used internally
|
$
|
2,018
|
$
|
849
|
$
|
4,064
|
$
|
2,413
|
||||||||
Purchases of equipment under operating leases
|
844
|
3,282
|
2,234
|
4,887
|
||||||||||||
Total capital expenditures
|
$
|
2,862
|
$
|
4,131
|
$
|
3,436
|
$
|
7,300
|
(1) |
We define Adjusted gross billings of product and services as our sales of product and services calculated in accordance with U.S. GAAP, adjusted to exclude the costs incurred related to sales of third party software assurance, subscription licenses, maintenance and services. We have provided below a reconciliation of Adjusted gross billings of product and services to Sales of product and services, which is the most directly comparable financial measure to this non-GAAP financial measure.
|
Three Months Ended
December 31, |
Nine Months Ended
December 31, |
|||||||||||||||
2017
|
2016
|
2017
|
2016
|
|||||||||||||
Sales of products and services
|
$
|
330,953
|
$
|
317,391
|
$
|
1,045,792
|
$
|
968,799
|
||||||||
Costs incurred related to sales of third party software assurance, maintenance and services
|
133,152
|
115,016
|
403,579
|
348,389
|
||||||||||||
Adjusted gross billings of product and services
|
$
|
464,105
|
$
|
432,407
|
$
|
1,449,371
|
$
|
1,317,188
|
(2) |
Non-GAAP net earnings per common share are based on net earnings calculated in accordance with U.S. GAAP, adjusted to exclude other income and acquisition related amortization expense, and related effects on income tax, the tax (benefit) expense recognized due to the vesting of shared based compensation, the tax benefit associated with the re-measurement of deferred tax assets and liabilities at the new tax rates, as well as an adjustment to our tax expense in the prior year assuming a 31.5% effective annual income tax rate for U.S. operations due to changes in U.S. tax rates. We use Non-GAAP net earnings per common share as a supplemental measure of our performance to gain insight into our operating performance. We believe that the exclusion of these items in calculating Non-GAAP net earnings per common share provides management and investors a useful measure for period-to-period comparisons of our business and operating results by excluding items that management believes are not reflective of our underlying operating performance. Accordingly, we believe that non-GAAP net earnings per common share provide useful information to investors and others in understanding and evaluating our operating results. However, our use of Non-GAAP net earnings per common share as analytical tools has limitations, and you should not consider them in isolation or as substitutes for analysis of our financial results as reported under U.S. GAAP. In addition, other companies, including companies in our industry, might calculate Non-GAAP net earnings per common share or similarly titled measures differently, which may reduce their usefulness as comparative measures.
|
Three Months Ended
December 31, |
Nine Months Ended
December 31, |
|||||||||||||||
2017
|
2016
|
2017
|
2016
|
|||||||||||||
GAAP: Earnings before tax
|
$
|
16,259
|
$
|
21,307
|
$
|
65,724
|
$
|
67,376
|
||||||||
Acquisition related amortization expense
|
1,871
|
1,035
|
4,178
|
3,098
|
||||||||||||
Other (income) expense
|
131
|
-
|
1
|
(380
|
)
|
|||||||||||
Non-GAAP: Earnings before provision for income taxes
|
18,261
|
22,342
|
69,903
|
70,094
|
||||||||||||
GAAP: Provision for income taxes
|
678
|
8,687
|
19,499
|
27,310
|
||||||||||||
Acquisition related amortization expense
|
547
|
267
|
1,421
|
956
|
||||||||||||
Other (income) expense
|
55
|
13
|
-
|
(144
|
)
|
|||||||||||
Remeasurement of deferred taxes
|
3,407
|
-
|
3,407
|
-
|
||||||||||||
Adjustment to FY17 US Federal tax rate to 31.5%
|
-
|
(2,252
|
)
|
-
|
(2,252
|
)
|
||||||||||
Tax benefit on restricted stock
|
-
|
6
|
1,563
|
514
|
||||||||||||
Non-GAAP: Provision for income taxes
|
4,687
|
6,721
|
25,890
|
26,384
|
||||||||||||
Non-GAAP: Net earnings
|
$
|
13,574
|
$
|
15,621
|
$
|
44,013
|
$
|
43,710
|
||||||||
GAAP: Net earnings per common share - diluted
|
$
|
1.11
|
$
|
0.91
|
$
|
3.30
|
$
|
2.86
|
||||||||
Non-GAAP: Net earnings per common share - diluted
|
$
|
0.97
|
$
|
1.12
|
$
|
3.14
|
$
|
3.12
|
(3) |
We define Adjusted EBITDA as net earnings calculated in accordance with U.S GAAP, adjusted for the following: interest expense, depreciation and amortization, provision for income taxes, and other income. We consider the interest on notes payable from our financing segment and depreciation expense presented within cost of sales, which includes depreciation on assets financed as operating leases, to be operating expenses. As such, they are not included in the amounts added back to net earnings in the Adjusted EBITDA calculation. We provide below a reconciliation of Adjusted EBITDA to net earnings, which is the most directly comparable financial measure to this non-GAAP financial measure. Adjusted EBITDA margin is our calculation of Adjusted EBITDA divided by net sales.
|
Three Months Ended
December 31, |
Nine Months Ended
December 31, |
|||||||||||||||
Consolidated
|
2017
|
2016
|
2017
|
2016
|
||||||||||||
Net earnings
|
$
|
15,581
|
$
|
12,620
|
$
|
46,225
|
$
|
40,066
|
||||||||
Provision for income taxes
|
678
|
8,687
|
19,499
|
27,310
|
||||||||||||
Depreciation and amortization
|
2,894
|
1,910
|
7,086
|
5,408
|
||||||||||||
Other (income) expense
|
131
|
-
|
1
|
(380
|
)
|
|||||||||||
Adjusted EBITDA
|
$
|
19,284
|
$
|
23,217
|
$
|
72,811
|
$
|
72,404
|
||||||||
Technology Segment
|
||||||||||||||||
Operating income
|
$
|
11,415
|
$
|
16,889
|
$
|
48,704
|
$
|
56,003
|
||||||||
Depreciation and amortization
|
2,893
|
1,908
|
7,084
|
5,400
|
||||||||||||
Adjusted EBITDA
|
$
|
14,308
|
$
|
18,797
|
$
|
55,788
|
$
|
61,403
|
||||||||
Financing Segment
|
||||||||||||||||
Operating income
|
$
|
4,975
|
$
|
4,418
|
$
|
17,021
|
$
|
10,993
|
||||||||
Depreciation and amortization
|
1
|
2
|
2
|
8
|
||||||||||||
Adjusted EBITDA
|
$
|
4,976
|
$
|
4,420
|
$
|
17,023
|
$
|
11,001
|
· |
Portfolio income: Interest income from financing receivables and rents due under operating leases;
|
· |
Transactional gains: Net gains or losses on the sale of financial assets; and
|
· |
Post-contract earnings: Month-to-month rents; early termination, prepayment, make-whole, or buyout fees; and net gains on the sale of off-lease (used) equipment.
|
Three Months Ended
December 31,
|
Nine Months Ended
December 31,
|
|||||||||||||||||||||||||||||||
2017
|
2016
|
Change
|
2017
|
2016
|
Change
|
|||||||||||||||||||||||||||
Sales of product and services
|
$
|
330,953
|
$
|
317,391
|
$
|
13,562
|
4.3
|
%
|
$
|
1,045,792
|
$
|
968,799
|
$
|
76,993
|
7.9
|
%
|
||||||||||||||||
Fee and other income
|
1,678
|
915
|
763
|
83.4
|
%
|
3,707
|
3,679
|
28
|
0.8
|
%
|
||||||||||||||||||||||
Net sales
|
332,631
|
318,306
|
14,325
|
4.5
|
%
|
1,049,499
|
972,478
|
77,021
|
7.9
|
%
|
||||||||||||||||||||||
Cost of sales, product and services
|
264,487
|
251,729
|
12,758
|
5.1
|
%
|
834,873
|
769,780
|
65,093
|
8.5
|
%
|
||||||||||||||||||||||
Gross profit
|
68,144
|
66,577
|
1,567
|
2.4
|
%
|
214,626
|
202,698
|
11,928
|
5.9
|
%
|
||||||||||||||||||||||
Selling, general, and administrative expenses
|
53,836
|
47,780
|
6,056
|
12.7
|
%
|
158,838
|
141,295
|
17,543
|
12.4
|
%
|
||||||||||||||||||||||
Depreciation and amortization
|
2,893
|
1,908
|
985
|
51.6
|
%
|
7,084
|
5,400
|
1,684
|
31.2
|
%
|
||||||||||||||||||||||
Operating expenses
|
56,729
|
49,688
|
7,041
|
14.2
|
%
|
165,922
|
146,695
|
19,227
|
13.1
|
%
|
||||||||||||||||||||||
Operating income
|
$
|
11,415
|
$
|
16,889
|
$
|
(5,474
|
)
|
(32.4
|
%)
|
$
|
48,704
|
$
|
56,003
|
$
|
(7,299
|
)
|
(13.0
|
%)
|
||||||||||||||
Key business metrics
|
||||||||||||||||||||||||||||||||
Adjusted gross billings of product and services
|
$
|
464,105
|
$
|
432,407
|
$
|
31,698
|
7.3
|
%
|
$
|
1,449,371
|
$
|
1,317,188
|
$
|
132,183
|
10.0
|
%
|
||||||||||||||||
Adjusted EBITDA
|
$
|
14,308
|
$
|
18,797
|
$
|
(4,489
|
)
|
(23.9
|
%)
|
$
|
55,788
|
$
|
61,403
|
$
|
(5,615
|
)
|
(9.1
|
%)
|
Quarter Ended
|
Sequential
|
Year over Year
|
||||||
December 31, 2017
|
(7.5
|
%)
|
4.3
|
%
|
||||
September 30, 2017
|
0.2
|
%
|
(1.0
|
%)
|
||||
June 30, 2017
|
11.1
|
%
|
23.1
|
%
|
||||
March 31, 2017
|
1.3
|
%
|
10.3
|
%
|
||||
December 31, 2016
|
(12.1
|
%)
|
10.3
|
%
|
|
Twelve Months Ended December 31,
|
|||||||||||
|
2017
|
2016
|
Change
|
|||||||||
Revenue by customer end market:
|
||||||||||||
Technology
|
25
|
%
|
22
|
%
|
3
|
%
|
||||||
SLED
|
17
|
%
|
21
|
%
|
(4
|
%)
|
||||||
Telecom, Media & Entertainment
|
14
|
%
|
16
|
%
|
(2
|
%)
|
||||||
Financial Services
|
16
|
%
|
12
|
%
|
4
|
%
|
||||||
Healthcare
|
13
|
%
|
11
|
%
|
2
|
%
|
||||||
Other
|
15
|
%
|
18
|
%
|
(3
|
%)
|
||||||
Total
|
100
|
%
|
100
|
%
|
||||||||
|
||||||||||||
Revenue by vendor:
|
||||||||||||
Cisco Systems
|
44
|
%
|
49
|
%
|
(5
|
%)
|
||||||
HP Inc. & HPE
|
7
|
%
|
6
|
%
|
1
|
%
|
||||||
NetApp
|
4
|
%
|
5
|
%
|
(1
|
%)
|
||||||
Sub-total
|
55
|
%
|
60
|
%
|
(5
|
%)
|
||||||
Other
|
45
|
%
|
40
|
%
|
5
|
%
|
||||||
Total
|
100
|
%
|
100
|
%
|
Three Months Ended
December 31,
|
Nine Months Ended
December 31,
|
|||||||||||||||||||||||||||||||
2017
|
2016
|
Change
|
2017
|
2016
|
Change
|
|||||||||||||||||||||||||||
Financing revenue
|
$
|
9,592
|
$
|
8,190
|
$
|
1,402
|
17.1
|
%
|
$
|
30,698
|
$
|
23,899
|
$
|
6,799
|
28.4
|
%
|
||||||||||||||||
Fee and other income
|
346
|
161
|
185
|
114.9
|
%
|
374
|
245
|
129
|
52.7
|
%
|
||||||||||||||||||||||
Net sales
|
9,938
|
8,351
|
1,587
|
19.0
|
%
|
31,072
|
24,144
|
6,928
|
28.7
|
%
|
||||||||||||||||||||||
Direct lease costs
|
1,394
|
1,142
|
252
|
22.1
|
%
|
3,846
|
3,459
|
387
|
11.2
|
%
|
||||||||||||||||||||||
Gross profit
|
8,544
|
7,209
|
1,335
|
18.5
|
%
|
27,226
|
20,685
|
6,541
|
31.6
|
%
|
||||||||||||||||||||||
Selling, general, and administrative expenses
|
3,298
|
2,380
|
918
|
38.6
|
%
|
9,300
|
8,526
|
774
|
9.1
|
%
|
||||||||||||||||||||||
Depreciation and amortization
|
1
|
2
|
(1
|
)
|
(50.0
|
%)
|
2
|
8
|
(6
|
)
|
(75.0
|
%)
|
||||||||||||||||||||
Interest and financing costs
|
270
|
409
|
(139
|
)
|
(34.0
|
%)
|
903
|
1,158
|
(255
|
)
|
(22.0
|
%)
|
||||||||||||||||||||
Operating expenses
|
3,569
|
2,791
|
778
|
27.9
|
%
|
10,205
|
9,692
|
513
|
5.3
|
%
|
||||||||||||||||||||||
Operating income
|
$
|
4,975
|
$
|
4,418
|
$
|
557
|
12.6
|
%
|
$
|
17,021
|
$
|
10,993
|
$
|
6,028
|
54.8
|
%
|
||||||||||||||||
Key business metrics
|
||||||||||||||||||||||||||||||||
Adjusted EBITDA
|
$
|
4,976
|
$
|
4,420
|
$
|
556
|
12.6
|
%
|
$
|
17,023
|
$
|
11,001
|
$
|
6,022
|
54.7
|
%
|
Nine Months Ended December 31,
|
||||||||
2017
|
2016
|
|||||||
Net cash provided by operating activities
|
$
|
48,824
|
$
|
29,702
|
||||
Net cash used in investing activities
|
(54,793
|
)
|
(47,040
|
)
|
||||
Net cash used in financing activities
|
(27,758
|
)
|
(8,205
|
)
|
||||
Effect of exchange rate changes on cash
|
72
|
454
|
||||||
Net decrease in cash and cash equivalents
|
$
|
(33,655
|
)
|
$
|
(25,089
|
)
|
As of December 31,
|
||||||||
2017
|
2016
|
|||||||
(DSO) Days sales outstanding (1)
|
52
|
52
|
||||||
(DIO) Days inventory outstanding (2)
|
12
|
23
|
||||||
(DPO) Days payable outstanding (3)
|
(40
|
)
|
(48
|
)
|
||||
Cash conversion cycle
|
24
|
27
|
(1) |
Represents the rolling three-month average of the balance of trade accounts receivable-trade, net for our Technology segment at the end of the period divided by Adjusted gross billings of product and services for the same three-month period.
|
(2) |
Represents the rolling three-month average of the balance of inventory, net for our Technology segment at the end of the period divided by Cost of adjusted gross billings of product and services for the same three-month period.
|
(3) |
Represents the rolling three-month average of the combined balance of accounts payable-trade and accounts payable-floor plan for our Technology segment at the end of the period divided by Cost of adjusted gross billings of product and services for the same three-month period.
|
Maximum Credit Limit
at December 31, 2017 |
Balance as of
December 31, 2017 |
Maximum Credit Limit
at March 31, 2017 |
Balance as of
March 31, 2017 |
|||||||||||
$
|
250,000
|
$
|
107,761
|
$
|
250,000
|
$
|
132,612
|
Period
|
Total number of shares purchased (1)
|
Average price paid per share
|
Total number of shares purchased as part of publicly announced plans or programs
|
Maximum number (or approximate dollar value) of shares that may yet be purchased under the plans or programs
|
|||||||||||||
April 1, 2017 through April 30, 2017
|
-
|
$
|
-
|
-
|
1,000,000
|
(2
|
)
|
||||||||||
May 1, 2017 through May 31, 2017
|
-
|
$
|
-
|
-
|
1,000,000
|
(3
|
)
|
||||||||||
June 1, 2017 through June 30, 2017
|
54,546
|
$
|
75.72
|
-
|
1,000,000
|
(4
|
)
|
||||||||||
July 1, 2017 through July 31, 2017
|
3,179
|
$
|
79.50
|
-
|
1,000,000
|
(5
|
)
|
||||||||||
August 1, 2017 through August 18, 2017
|
-
|
$
|
-
|
-
|
1,000,000
|
(6
|
)
|
||||||||||
August 19, 2017 through August 31, 2017
|
-
|
$
|
-
|
-
|
500,000
|
(7
|
)
|
||||||||||
September 1, 2017 through September 30, 2017
|
-
|
$
|
-
|
-
|
500,000
|
(8
|
)
|
||||||||||
October 1, 2017 through October 31, 2017
|
-
|
$
|
-
|
-
|
500,000
|
(9
|
)
|
||||||||||
November 1, 2017 through November 30, 2017
|
56,707
|
$
|
78.21
|
-
|
443,293
|
(10
|
)
|
||||||||||
December 1, 2017 through December 31, 2017
|
68,898
|
$
|
77.61
|
-
|
374,395
|
(11
|
)
|
(1) |
Any shares acquired were in open-market purchases, except for 54,546 shares, which were repurchased in June 2017, and 3,179 shares which were repurchased in July 2017, to satisfy tax withholding obligations that arose due to the vesting of shares of restricted stock.
|
(2) |
The share purchase authorization in place for the month ended April 30, 2017 had purchase limitations on the number of shares of up to 1,000,000 shares. As of April 30, 2017, the remaining authorized shares to be purchased were 1,000,000.
|
(3) |
The share purchase authorization in place for the month ended May 31, 2017 had purchase limitations on the number of shares of up to 1,000,000 shares. As of May 31, 2017, the remaining authorized shares to be purchased were 1,000,000.
|
(4) |
The share purchase authorization in place for the month ended June 30, 2017 had purchase limitations on the number of shares of up to 1,000,000 shares. As of June 30, 2017, the remaining authorized shares to be purchased were 1,000,000.
|
(5) |
The share purchase authorization in place for the month ended July 31, 2017 had purchase limitations on the number of shares of up to 1,000,000 shares. As of July 31, 2017, the remaining authorized shares to be purchased were 1,000,000.
|
(6) |
As of August 18, 2017 the authorization under the then existing share purchase plan expired.
|
(7) |
On August 15, 2017, the board of directors authorized the company to repurchase up to 500,000 shares of our outstanding common stock commencing on August 19, 2017 through August 18, 2018. As of August 31, 2017, the remaining authorized shares to be purchased were 500,000.
|
(8) |
The share purchase authorization in place for the month ended September 30, 2017 had purchase limitations on the number of shares of up to 500,000 shares. As of September 30, 2017, the remaining authorized shares to be purchased were 500,000.
|
(9) |
The share purchase authorization in place for the month ended October 31, 2017 had purchase limitations on the number of shares of up to 500,000 shares. As of October 31, 2017, the remaining authorized shares to be purchased were 500,000.
|
(10) |
The share purchase authorization in place for the month ended November 30, 2017 had purchase limitations on the number of shares of up to 500,000 shares. As of November 30, 2017, the remaining authorized shares to be purchased were 443,293.
|
(11) |
The share purchase authorization in place for the month ended December 31, 2017 had purchase limitations on the number of shares of up to 500,000 shares. As of December 31, 2017, the remaining authorized shares to be purchased were 374,395.
|
e
Plus inc.
|
||
Date: February 7, 2018
|
/s/ MARK P. MARRON
|
|
By: Mark P. Marron,
|
||
Chief Executive Officer and
President
|
||
(Principal Executive Officer)
|
||
Date: February 7, 2018
|
/s/ ELAINE D. MARION
|
|
By: Elaine D. Marion
|
||
Chief Financial Officer
|
||
(Principal Financial Officer)
|
•
|
Trade Secrets (as defined below) or proprietary information;
|
•
|
Strategic sourcing information or analysis;
|
•
|
Patents, patent applications, developmental or experimental work, formulas, test data, prototypes, models, and product specifications;
|
•
|
Accounting and financial information;
|
•
|
Financial projections and pro forma financial information;
|
•
|
Sales and marketing strategies, plans and programs;
|
•
|
Product development and product testing information;
|
•
|
Product sales and inventory information;
|
•
|
Personnel information, such as employees’ and consultants’ benefits, perquisites, salaries, stock options, compensation, formulas or bonuses;
|
•
|
Organizational structure and reporting relationships;
|
•
|
Business plans;
|
•
|
Names, addresses, phone numbers of customers;
|
•
|
Contracts, including contracts with clients, suppliers, independent contractors or employees; business plans and forecasts;
|
•
|
Existing and prospective projects or business opportunities; and
|
•
|
Passwords and other physical and information security protocols and information.
|
IF TO THE EXECUTIVE:
|
IF TO THE COMPANY:
|
Mark P. Marron
|
Attn: General Counsel
|
c/o ePlus inc.
|
ePlus inc.
|
13595 Dulles Technology Drive
|
13595 Dulles Technology Drive
|
Herndon, VA 20171
|
Herndon, VA 20171
|
ePlus inc.
|
Executive
|
|||
/s/ Erica S. Stoecker
|
/s/ Mark P. Marron
|
|||
Erica S. Stoecker
|
Mark P. Marron
|
|||
General Counsel
|
Chief Executive Officer
|
|||
Date:
|
December 12, 2017
|
Date:
|
November 20, 2017
|
EMPLOYEE
|
ePlus
|
||
Signature
|
Signature
|
||
Date
|
Name/Title
|
||
Date
|
(1) |
Consultation to the CEO regarding compensation recommendations for senior executives (except for the incoming CEO);
|
(2) |
Strategic acquisition review and consultation;
|
(3) |
Business line consultation, as requested;
|
(4) |
Financing segment consultation, as requested;
|
(5) |
Continuity with key client relationships, as requested;
|
(6) |
Assist in recruitment and training of key hires, as requested;
|
(7) |
Interim succession and contingency planning, as requested;
|
Payment Due Date
|
Payment Amount
|
January 31, 2017
|
$250,000
|
July 31, 2017
|
$250,000
|
January 31, 2018
|
$500,000
|
•
|
“Trade Secrets” or proprietary information;
|
•
|
strategic sourcing information or analysis;
|
•
|
patents, patent applications, developmental or experimental work, formulas, test data, prototypes, models, and product specifications;
|
•
|
accounting and financial information;
|
•
|
financial projections and pro forma financial information;
|
•
|
sales and marketing strategies, plans and programs
|
•
|
product development and product testing information;
|
•
|
product sales and inventory information;
|
•
|
personnel information, such as employees’ and consultants’ benefits, perquisites, salaries, stock options, compensation, formulas or bonuses;
|
•
|
organizational structure and reporting relationships;
|
•
|
business plans;
|
•
|
names, addresses, phone numbers of customers;
|
•
|
contracts, including contracts with clients, suppliers, independent contractors or employees;
|
•
|
business plans and forecasts;
|
•
|
existing and prospective projects or business opportunities; and
|
•
|
passwords and other physical and information security protocols and information.
|
IF TO THE EXECUTIVE:
|
IF TO THE COMPANY:
|
Phillip G. Norton
|
Attn: General Counsel
|
1166 Chain Bridge Road
|
c/o ePlus inc.
|
McLean, VA 22101
|
13595 Dulles Technology Drive
|
Herndon, VA 20171
|
|
WITH A COPY TO:
|
|
Michael Scott
1420 Beverly Road, Suite 240
McLean, VA 22101
|
ePlus inc.
|
Executive
|
|||
/s/ Erica S. Stoecker
|
/s/ Phillip G. Norton
|
|||
Erica S. Stoecker
|
Phillip G. Norton
|
|||
General Counsel
|
Executive Chairman
|
|||
Date:
|
December 12, 2017
|
Date:
|
December 11, 2017
|
Termination Date
|
Severance Due
|
||
August 1 - 31, 2016
|
$1,000,000
|
||
Sept 1 - 30, 2016
|
$1,000,000
|
||
Oct 1 - 31, 2016
|
$1,000,000
|
||
Nov 1 - 30, 2016
|
$1,000,000
|
||
Dec 1 - 31, 2016
|
$1,000,000
|
||
Jan 1 - 31, 2017
|
$1,000,000
|
||
Feb 1 - 28, 2017
|
$750,000
|
||
March 1 - 31, 2017
|
$750,000
|
||
April 1 - 30, 2017
|
$750,000
|
||
May 1 - 31, 2017
|
$750,000
|
||
June 1 - 30, 2017
|
$750,000
|
||
July 1-31, 2017
|
$750,000
|
||
Aug 1 - 31, 2017
|
$500,000
|
||
Sept 1 - 30, 2017
|
$500,000
|
||
Oct 1 - 31, 2017
|
$500,000
|
||
Nov 1 - 30, 2017
|
$500,000
|
||
Dec 1 - 31, 2017
|
$500,000
|
||
Jan 1 - 31, 2018
|
$500,000
|
||
Feb 1 - 28, 2018
|
$-
|
||
Mar 1 - 31, 2018
|
$-
|
||
Apr 1 - 30, 2018
|
$-
|
||
May 1 - 31, 2018
|
$-
|
||
June 1 - 30, 2018
|
$-
|
||
July 1 - 31, 2018
|
$-
|
Termination Date
|
Severance Due
|
||
August 1 - 31, 2016
|
$1,575,000
|
||
Sept 1 - 30, 2016
|
$1,550,000
|
||
Oct 1 - 31, 2016
|
$1,525,000
|
||
Nov 1 - 30, 2016
|
$1,500,000
|
||
Dec 1 - 31, 2016
|
$1,475,000
|
||
Jan 1 - 31, 2017
|
$1,450,000
|
||
Feb 1 - 28, 2017
|
$1,175,000
|
||
March 1 - 31, 2017
|
$1,150,000
|
||
April 1 - 30, 2017
|
$1,125,000
|
||
May 1 - 31, 2017
|
$1,100,000
|
||
June 1 - 30, 2017
|
$1,075,000
|
||
July 1-31, 2017
|
$1,050,000
|
||
Aug 1 - 31, 2017
|
$775,000
|
||
Sept 1 - 30, 2017
|
$750,000
|
||
Oct 1 - 31, 2017
|
$725,000
|
||
Nov 1 - 30, 2017
|
$700,000
|
||
Dec 1 - 31, 2017
|
$675,000
|
||
Jan 1 - 31, 2018
|
$650,000
|
||
Feb 1 - 28, 2018
|
$125,000
|
||
Mar 1 - 31, 2018
|
$100,000
|
||
Apr 1 - 30, 2018
|
$75,000
|
||
May 1 - 31, 2018
|
$50,000
|
||
June 1 - 30, 2018
|
$25,000
|
||
July 1 - 31, 2018
|
$-
|
EMPLOYEE
|
ePlus
|
|
Signature
|
Signature
|
|
Date
|
Name/Title
|
|
Date
|
•
|
“Trade Secrets” (as defined below) or proprietary information;
|
•
|
strategic sourcing information or analysis;
|
•
|
patents, patent applications, developmental or experimental work, formulas, test data, prototypes, models, and product specifications;
|
•
|
accounting and financial information;
|
•
|
financial projections and pro forma financial information;
|
•
|
sales and marketing strategies, plans and programs
|
•
|
product development and product testing information;
|
•
|
product sales and inventory information;
|
•
|
personnel information, such as employees’ and consultants’ benefits, perquisites, salaries, stock options, compensation, formulas or bonuses;
|
•
|
organizational structure and reporting relationships;
|
•
|
business plans;
|
•
|
names, addresses, phone numbers of customers;
|
•
|
contracts, including contracts with clients, suppliers, independent contractors or employees; business plans and forecasts;
|
•
|
existing and prospective projects or business opportunities; and
|
•
|
passwords and other physical and information security protocols and information.
|
ePlus inc.
|
Executive
|
|||
/s/ Erica S. Stoecker
|
/s/ Elaine D. Marion
|
|||
Erica S. Stoecker
|
Elaine D. Marion
|
|||
General Counsel
|
Chief Financial Officer
|
|||
Date:
|
December 12, 2017
|
Date:
|
November 20, 2017
|
EMPLOYEE
|
ePlus
|
||
Signature
|
Signature
|
||
Date
|
Name/Title
|
||
Date
|
1. |
I have reviewed this quarterly report on Form 10-Q of
e
Plus inc.
|
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4. |
The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15 (f)) for the registrant and have:
|
a) |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b) |
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c) |
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d) |
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5. |
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a) |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b) |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
/s/ MARK P. MARRON
|
|
Mark P. Marron
|
|
Chief Executive Officer and President
|
|
(Principal Executive Officer)
|
1. |
I have reviewed this quarterly report on Form 10-Q of
e
Plus inc;
|
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4. |
The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15 (f)) for the registrant and have:
|
a) |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b) |
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c) |
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d) |
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5. |
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a) |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b) |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
/s/ ELAINE D. MARION
|
|
Elaine D. Marion
|
|
Chief Financial Officer
|
|
(Principal Financial Officer)
|
a) |
the Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
|
b) |
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of
e
Plus inc.
|
/s/ MARK P. MARRON
|
|
Mark P. Marron, Chief Executive Officer
and President
|
|
(Principal Executive Officer)
|
|
/s/ ELAINE D. MARION
|
|
Elaine D. Marion, Chief Financial Officer
|
|
(Principal Financial Officer)
|