Delaware
|
54-1817218
|
|
(State or other jurisdiction of incorporation or organization)
|
(I.R.S. Employer Identification No.)
|
13595 Dulles Technology Drive, Herndon, VA 20171-3413
|
(Address of principal executive offices)
|
Title of each class
|
Trading Symbol(s)
|
Name of each exchange on which registered
|
Common Stock, $.01 par value
|
PLUS
|
NASDAQ Global Select Market
|
Large accelerated filer ☒
|
Accelerated filer ☐
|
Non-accelerated filer ☐
|
Smaller reporting company ☐
|
Emerging growth company ☐
|
|
|
Page
|
|
1
|
||
Part I
|
||
Item 1.
|
3
|
|
12
|
||
Item 1A.
|
13
|
|
Item 1B.
|
24
|
|
Item 2.
|
24
|
|
Item 3.
|
24
|
|
Item 4.
|
24
|
|
Part II
|
||
Item 5.
|
25
|
|
Item 6.
|
26
|
|
Item 7.
|
27
|
|
Item 7A.
|
45
|
|
Item 8.
|
45
|
|
Item 9.
|
45
|
|
Item 9A.
|
45
|
|
Item 9B.
|
46
|
|
Part III
|
||
Item 10.
|
47
|
|
Item 11.
|
47
|
|
Item 12.
|
47
|
|
Item 13.
|
47
|
|
Item 14.
|
47
|
|
Part IV
|
||
Item 15.
|
48
|
|
Item 16.
|
51
|
|
52
|
• |
the duration and impact of the novel coronavirus (“COVID-19”) pandemic, which could materially adversely affect our financial condition and results of operations and has resulted in governmental authorities imposing numerous unprecedented measures to try to contain the virus that has impacted and may further impact our workforce and operations, the operations of our customers, and those of our respective vendors, suppliers, and partners;
|
• |
national and international political instability fostering uncertainty and volatility in the global economy including exposure to fluctuation in foreign currency rates, interest 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;
|
• |
the creditworthiness of our customers and our ability to reserve adequately for credit losses;
|
• |
loss of our credit facility or credit lines with our vendors may restrict our current and future operations;
|
• |
uncertainty regarding the phase out of LIBOR may negatively affect our operating results;
|
• |
a possible decrease in the capital spending budgets of our customers or a decrease in purchases from us;
|
• |
our ability to raise capital, maintain or increase as needed our lines of credit with vendors or floor planning facility, obtain debt for our financing transactions, or the effect of those changes on our common stock price;
|
• |
reliance on third parties to perform some of our service obligations to our customers;
|
• |
changes in the Information Technology (“IT”) industry and/or rapid changes in product offerings, including the proliferation of the cloud, infrastructure as a service (“IaaS”), software as a service (“SaaS”) and platform as a service (“PaaS”);
|
• |
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;
|
• |
reduction of vendor incentives provided to us;
|
• |
rising interest rates or the loss of key lenders or the constricting of credit markets;
|
• |
the possibility of goodwill impairment charges in the future;
|
• |
maintaining and increasing advanced professional services by recruiting and retaining highly skilled, competent personnel, and vendor certifications;
|
• |
adapting to meet changes in markets and competitive developments;
|
• |
increasing the total number of customers using integrated solutions by up-selling within our customer base and gaining new customers;
|
• |
our ability to secure our own and our customers’ electronic and other confidential information, and remain secure during a cyber-security attack;
|
• |
managing a diverse product set of solutions in highly competitive markets with a number of key vendors;
|
• |
increasing the total number of customers who use our managed services and professional services and continuing to enhance our managed services offerings to remain competitive in the marketplace;
|
• |
performing professional and managed services competently;
|
• |
our ability to implement comprehensive plans for the integration of sales forces, cost containment, asset rationalization, systems integration, and other key strategies;
|
• |
changes to or loss of members of our senior management team and/or failure to successfully implement succession plans;
|
• |
exposure to changes in, interpretations of, or enforcement trends in legislation and regulatory matters;
|
• |
domestic and international economic regulations uncertainty (e.g., tariffs, and trade agreements);
|
• |
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;
|
• |
failure to comply with public sector contracts, or applicable laws or regulations;
|
• |
our dependence on key personnel to maintain certain customer relationships, and our ability to hire, train, and retain sufficient qualified personnel;
|
• |
maintaining our proprietary software and updating our technology infrastructure to remain competitive in the marketplace;
|
• |
disruptions or a security breach in our or our vendors’ IT systems and data and audio communication networks;
|
• |
our ability to realize our investment in leased equipment;
|
• |
our ability to successfully perform due diligence and integrate acquired businesses;
|
• |
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; and
|
• |
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.
|
ITEM 1. |
BUSINESS
|
• |
Multi-Cloud Strategy. Over the past several years, public, private and hybrid cloud architectures and cloud-enabled frameworks have become a core foundation of modern IT. Our strategy is to assist our customers in aligning cloud strategy with business objective, creating an enterprise cloud foundation, enabling multi-cloud capabilities, accelerating cloud migrations, modernizing the datacenter and extending to the cloud, and optimizing cloud deployments along with their associated costs. We focus on being a guide to customers on their Journey to Modernization of applications, data, and platforms. This strategy leverages our strength in deploying private clouds, extending them to public cloud and incorporating the necessary elements of networking and security. By understanding our customers’ environment, applications, and business requirements, we deploy solutions that leverage the most appropriate technology on the most appropriate platform with the most appropriate consumption model. For example, we may build a private cloud solution to host mission critical applications, while utilizing a public cloud solution for development, collaboration, or disaster recovery. As the market matures, we will continue to build and acquire skills that align with agile development (DevOps), application refactoring, and analytics. Our cloud strategy is tightly aligned with all our key strategic initiatives, including data center, security, networking, collaboration, and emerging technology.
|
• |
Increasing sophistication and incidences of IT security breaches and cyber-attacks. Over the last decade, cyber-attacks have become more sophisticated, numerous, and invasive. Organizations are finding it increasingly difficult to effectively safeguard their information assets and business operations from a constant stream of advanced threats. Cyber-threats have shifted from uncoordinated individual efforts to highly coordinated and well-funded attacks by criminal organizations and nation-state actors. Additional drivers include data privacy concerns of both user data and machine data as companies continue to pursue digital transformation efforts. For most organizations, it is no longer a matter of if a cyber-attack will occur; the question is when and what impact it will have on the organization. We believe our customers are focused on all aspects of cyber security, including information and physical security, data protection, intellectual property, and compliance requirements related to industry and government regulations. To meet current and future security threats, enterprises must identify their risks, implement security controls and technology solutions that leverage integrated products and services to help monitor, mitigate, and remediate security threats and attacks while ensuring a data-centric security model that is scalable to meet today’s digital demands.
|
• |
Disruptive technologies are creating complexity and challenges for customers and vendors. The rapid evolution of disruptive technologies, and the speed by which they impact organizations’ IT platforms, has made it difficult for customers to effectively design, procure, implement, and manage their own IT systems. Moreover, increased budget pressures, fewer internal resources, a fragmented vendor landscape and fast time-to-value expectations make it challenging for customers to design, implement and manage secure, efficient, and cost-effective IT environments. Customers are increasingly turning to IT solutions providers such as ePlus to implement complex IT offerings, including managed services, software defined infrastructure, cloud computing, converged and hyper-converged infrastructures, big data analytics, and flash storage.
|
• |
Customer IT decision-making is shifting from IT departments to line-of- business personnel. As IT consumption shifts from legacy, on-premise infrastructure to agile “on-demand” and “as-a-service” solutions, customer procurement decisions are shifting from traditional IT personnel to lines-of-business personnel, which is changing the customer engagement model and types of consultative services required to fulfill customer needs. In addition, many of the services create recurring annuity revenue streams payable over time, rather than upfront revenue. Our partners are also evolving by developing more annuity models through subscription and consumption-based models operating both on-premises and the cloud.
|
• |
Lack of sufficient internal IT resources at mid-sized and large enterprises, and scarcity of IT personnel in certain high-demand disciplines. We believe that IT departments at mid-sized and large enterprises are facing pressure to deliver emerging technologies and business outcomes but lack the properly trained staff and the ability to hire personnel with high in-demand disciplines such as security and data analytics. At the same time the prevalence of security threats, increased use of cloud computing, software-defined networking, new architectures, and rapid software development frameworks, the proliferation of mobile devices, dispersed workforces, employees working from home, bring-your-own-device (BYOD) policies, and complexity of multi-vendor solutions, have made it difficult for IT departments to implement high-quality IT solutions.
|
• |
Reduction in the number of IT solutions providers. We believe that customers are seeking to reduce the number of solutions providers they do business with to improve supply chain and internal efficiencies, enhance accountability, improve supplier management practices, and reduce costs. As a result, customers are required to select IT solutions providers that can deliver complex multi-vendor IT solutions.
|
• |
Increasing need for third-party services. We believe that customers are relying on third-party service providers, such as ePlus, to manage significant aspects of their IT environment, from design, implementation, pre- and post-sales support, to maintenance, engineering, cloud management, security operations, and other services.
|
• |
IT Sales: Our offerings consist of hardware, perpetual and subscription software, maintenance, software assurance, and internally provided and outsourced services. We believe that our customers view technology purchases as integrated solutions, rather than discrete product and service categories, and the majority of our sales are derived from integrated solutions involving our customers’ data center, network, security, and collaboration infrastructure. We hold various technical and sales-related certifications from leading manufacturers and software publishers, which authorizes us to market their products and enables us to provide advanced professional services. We actively engage with emerging vendors to offer their technologies to our customers. Our flexible platform and customizable catalogs facilitate the addition of new vendors’ products with minimal incremental effort.
|
• |
Advanced Professional and Managed Services: We provide a range of advanced professional and managed services to help our customers improve productivity, profitability, and revenue growth while reducing operating costs. Our solutions and services include the following:
|
• |
ePlus managed services proactively monitors and manages a broad range of technologies on premises and in the cloud such as service desk, Infrastructure, Cloud Managed Backup and Recovery, Cloud Hosted Infrastructure & Managed Power Protection. a flexible subscription model to monitor, manage, and maximize business critical technologies—including cloud, security, data center, mobility, and collaboration based on a an ITIL Framework with SOC 1/2 and HIPAA accreditation;
|
• |
Professional services focus on cloud infrastructure, unified communications, collaboration, networking, storage, hyper-converged infrastructure, and virtual desktop infrastructure, supported by security and managed services solutions;
|
• |
Security solutions help safeguard our customers’ business and information assets through the appropriate application of governance, technology and supporting services:
|
• |
Governance, Risk, and Compliance (GRC) services help ensure customers are meeting governance and compliance requirements by leveraging regulatory frameworks, industry best practices, and supporting controls - thereby allowing customers to effectively identify, assess, and mitigate risk.
|
• |
Managed Security Services help customers strengthen their information security profile with industry-leading tools, technology and expertise - often at a fraction of the cost of in-house security resources. Services include Security Operations Center (SOC), Managed Detection and Response (MDR), and Incident Response (IR).
|
• |
ePlus Cloud Consulting Services (ECCS) is a suite of white-glove cloud services providing data protection via Cloud Managed Backup and Cloud Disaster Recovery, as well as hosting mission-critical workloads via Cloud Hosted Infrastructure.
|
• |
Staff augmentation services provide customers with flexible headcount options, which may range from service desk to infrastructure to software developer skills. Staff augmentation allows customers to access talent, fill specific technology skill gaps, or provide short-term or long-term IT professional help, which also includes services, such as Virtual Chief Information Officer (vCIO) and Virtual Chief Information Security Officer (vCISO), used to complement existing personnel and build three-to-five-year IT roadmaps.
|
• |
Service desk provides outsourced functions including but not limited to server and desktop support to respond to our customers’ business demands while minimizing overhead.
|
• |
Project management services enhance productivity and collaboration management and enable successful implementations and adoption of solutions for our customers.
|
• |
Front-end processing, such as procurement, order aggregation, order automation, vendor performance measurement, ordering, reconciliation, and payment;
|
• |
Lifecycle and asset ownership services, including asset management, change management, and property tax filing; and
|
• |
End-of-life services such as equipment audit, removal, and disposal.
|
|
Year Ended March 31,
|
|||||||||||
2021
|
2020
|
Change
|
||||||||||
Sales and marketing
|
589
|
605
|
(16
|
)
|
||||||||
Professional services
|
662
|
666
|
(4
|
)
|
||||||||
Administration
|
217
|
212
|
5
|
|||||||||
Software development and internal IT
|
85
|
89
|
(4
|
)
|
||||||||
Management
|
7
|
7
|
-
|
|||||||||
1,560
|
1,579
|
(19
|
)
|
|
Name
|
Age
|
Position
|
|
|
|
|
Mark P. Marron
|
59
|
Chief Executive Officer, President, and Director
|
|
|
|
||
Elaine D. Marion
|
53
|
Chief Financial Officer
|
|
|
|
||
Darren Raiguel
|
50
|
Chief Operating Officer and ePlus Technology, inc. President
|
ITEM 1A. |
RISK FACTORS
|
ITEM 1B. |
UNRESOLVED STAFF COMMENTS
|
ITEM 2. |
PROPERTIES
|
ITEM 3. |
LEGAL PROCEEDINGS
|
ITEM 4. |
MINE SAFETY DISCLOSURES
|
ITEM 5. |
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
|
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, 2020 through April 30, 2020
|
-
|
$
|
-
|
-
|
339,324
|
(2
|
)
|
|||||||||||||
May 1, 2020 through May 27, 2020
|
996
|
$
|
66.75
|
-
|
339,324
|
(3
|
)
|
|||||||||||||
May 28, 2020 through May 31, 2020
|
-
|
$
|
-
|
-
|
500,000
|
(4
|
)
|
|||||||||||||
June 1, 2020 through June 30, 2020
|
36,644
|
$
|
71.94
|
-
|
500,000
|
(5
|
)
|
|||||||||||||
July 1, 2020 through July 31, 2020
|
-
|
$
|
-
|
-
|
500,000
|
(6
|
)
|
|||||||||||||
August 1, 2020 through August 31, 2020
|
-
|
$
|
-
|
-
|
500,000
|
(7
|
)
|
|||||||||||||
September 1, 2020 through September 30, 2020
|
24,318
|
$
|
73.37
|
24,318
|
475,682
|
(8
|
)
|
|||||||||||||
October 1, 2020 through October 31, 2020
|
25,455
|
$
|
70.67
|
25,455
|
450,227
|
(9
|
)
|
|||||||||||||
November 1, 2020 through November 30, 2020
|
9,328
|
$
|
70.99
|
9,328
|
440,899
|
(10
|
)
|
|||||||||||||
December 1, 2020 through December 31, 2020
|
-
|
$
|
-
|
-
|
440,899
|
(11
|
)
|
|||||||||||||
January 1, 2021 through January 31, 2021
|
-
|
$
|
-
|
-
|
440,899
|
(12
|
)
|
|||||||||||||
February 1, 2021 through February 29, 2021
|
-
|
$
|
-
|
-
|
440,899
|
(13
|
)
|
|||||||||||||
March 1, 2021 through March 31, 2021
|
-
|
$
|
-
|
-
|
440,899
|
(14
|
)
|
(1) |
Any shares acquired were in open-market purchases, except for 37,640 shares, out of which 996 were repurchased in May 2020 and 36,644 in June 2020 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, 2020, had purchase limitations on the number of shares of up to 500,000 shares. As of April 30, 2020, the remaining authorized shares to be purchased were 339,324.
|
(3) |
As of May 27, 2020, the authorization under the then existing share repurchase plan expired.
|
(4) |
On May 20, 2020, the board of directors authorized the company to repurchase up to 500,000 shares of our outstanding common stock commencing on May 28, 2020 and continuing to May 27, 2021. As of May 31, 2020, the remaining authorized shares to be purchased were 500,000.
|
(5) |
The share purchase authorization in place for the month ended June 30, 2020, had purchase limitations on the number of shares of up to 500,000 shares. As of June 30, 2020, the remaining authorized shares to be purchased were 500,000.
|
(6) |
The share purchase authorization in place for the month ended July 31, 2020, had purchase limitations on the number of shares of up to 500,000 shares. As of July 31, 2020, the remaining authorized shares to be purchased were 500,000.
|
(7) |
The share purchase authorization in place for the month ended August 31, 2020, had purchase limitations on the number of shares of up to 500,000 shares. As of August 31, 2020, the remaining authorized shares to be purchased were 500,000.
|
(8) |
The share purchase authorization in place for the month ended September 30, 2020, had purchase limitations on the number of shares of up to 500,000 shares. As of September 30, 2020, the remaining authorized shares to be purchased were 475,682.
|
(9) |
The share purchase authorization in place for the month ended October 31, 2020, had purchase limitations on the number of shares of up to 500,000 shares. As of October 31, 2020, the remaining authorized shares to be purchased were 450,227.
|
(10) |
The share purchase authorization in place for the month ended November 30, 2020, had purchase limitations on the number of shares of up to 500,000 shares. As of November 30, 2020, the remaining authorized shares to be purchased were 440,899.
|
(11) |
The share purchase authorization in place for the month ended December 31, 2020, had purchase limitations on the number of shares of up to 500,000 shares. As of December 31, 2020, the remaining authorized shares to be purchased were 440,899.
|
(12) |
The share purchase authorization in place for the month ended January 31, 2021 had purchase limitations on the number of shares of up to 500,000 shares. As of January 31, 2021, the remaining authorized shares to be purchased were 440,899.
|
(13) |
The share purchase authorization in place for the month ended February 28, 2021 had purchase limitations on the number of shares of up to 500,000 shares. As of February 28, 2021, the remaining authorized shares to be purchased were 440,899.
|
(14) |
The share purchase authorization in place for the month ended March 31, 2021, had purchase limitations on the number of shares of up to 500,000 shares. As of March 31, 2021, the remaining authorized shares to be purchased were 440,899.
|
ITEM 6. |
SELECTED FINANCIAL DATA
|
ITEM 7. |
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
|
Year Ended March 31,
|
|||||||||||
Consolidated
|
2021
|
2020
|
2019
|
|||||||||
Net sales
|
$
|
1,568,323
|
$
|
1,588,404
|
$
|
1,372,673
|
||||||
Gross profit
|
$
|
393,554
|
$
|
391,191
|
$
|
330,388
|
||||||
Gross margin
|
25.1
|
%
|
24.6
|
%
|
24.1
|
%
|
||||||
Operating income margin
|
6.8
|
%
|
6.0
|
%
|
5.8
|
%
|
||||||
Net earnings
|
$
|
74,397
|
$
|
69,082
|
$
|
63,192
|
||||||
Net earnings margin
|
4.7
|
%
|
4.3
|
%
|
4.6
|
%
|
||||||
Net earnings per common share - diluted
|
$
|
5.54
|
$
|
5.15
|
$
|
4.65
|
||||||
Non-GAAP: Net earnings (1)
|
$
|
85,567
|
$
|
82,167
|
$
|
69,580
|
||||||
Non-GAAP: Net earnings per common share - diluted (1)
|
$
|
6.38
|
$
|
6.13
|
$
|
5.12
|
||||||
Adjusted EBITDA (2)
|
$
|
128,245
|
$
|
119,359
|
$
|
100,415
|
||||||
Adjusted EBITDA margin
|
8.2
|
%
|
7.5
|
%
|
7.3
|
%
|
||||||
Technology Segment
|
||||||||||||
Net sales
|
$
|
1,507,954
|
$
|
1,530,138
|
$
|
1,329,520
|
||||||
Adjusted gross billings (3)
|
$
|
2,263,865
|
$
|
2,227,885
|
$
|
1,918,995
|
||||||
Gross profit
|
$
|
346,235
|
$
|
340,588
|
$
|
294,662
|
||||||
Gross margin
|
23.0
|
%
|
22.3
|
%
|
22.2
|
%
|
||||||
Operating income
|
$
|
75,665
|
$
|
62,155
|
$
|
56,738
|
||||||
Adjusted EBITDA (2)
|
$
|
97,219
|
$
|
85,840
|
$
|
77,202
|
||||||
Financing Segment
|
||||||||||||
Net sales
|
$
|
60,369
|
$
|
58,266
|
$
|
43,153
|
||||||
Gross profit
|
$
|
47,319
|
$
|
50,603
|
$
|
35,726
|
||||||
Operating income
|
$
|
30,670
|
$
|
33,124
|
$
|
22,796
|
||||||
Adjusted EBITDA (2)
|
$
|
31,026
|
$
|
33,519
|
$
|
23,213
|
(1) |
Non-GAAP Net earnings and Non-GAAP Net earnings per common share – diluted is based on net earnings calculated in accordance with GAAP, adjusted to exclude other income (expense), share-based compensation, and acquisition and integration expenses, and the related tax effects.
|
|
Year Ended March 31,
|
|||||||||||
2021
|
2020
|
2019
|
||||||||||
GAAP: Earnings before tax
|
$
|
106,906
|
$
|
95,959
|
$
|
86,230
|
||||||
Share based compensation
|
7,167
|
7,954
|
7,244
|
|||||||||
Acquisition and integration expense
|
271
|
1,676
|
1,813
|
|||||||||
Acquisition related amortization expense
|
9,116
|
9,217
|
7,423
|
|||||||||
Other income
|
(571
|
)
|
(680
|
)
|
(6,696
|
)
|
||||||
Non-GAAP: Earnings before provision for income taxes
|
122,889
|
114,126
|
96,014
|
|||||||||
GAAP: Provision for income taxes
|
32,509
|
26,877
|
23,038
|
|||||||||
Share based compensation
|
2,188
|
2,218
|
1,988
|
|||||||||
Acquisition and integration expense
|
78
|
490
|
522
|
|||||||||
Acquisition related amortization expense
|
2,730
|
2,487
|
1,916
|
|||||||||
Other income
|
(143
|
)
|
(200
|
)
|
(1,702
|
)
|
||||||
Tax benefit on restricted stock
|
(40
|
)
|
87
|
672
|
||||||||
Non-GAAP: Provision for income taxes
|
37,322
|
31,959
|
26,434
|
|||||||||
Non-GAAP: Net earnings
|
$
|
85,567
|
$
|
82,167
|
$
|
69,580
|
|
Year Ended March 31,
|
|||||||||||
2021
|
2020
|
2019
|
||||||||||
GAAP: Net earnings per common share - diluted
|
$
|
5.54
|
$
|
5.15
|
$
|
4.65
|
||||||
Share based compensation
|
0.38
|
0.43
|
0.38
|
|||||||||
Acquisition and integration expense
|
0.01
|
0.09
|
0.09
|
|||||||||
Acquisition related amortization expense
|
0.48
|
0.51
|
0.40
|
|||||||||
Other income
|
(0.03
|
)
|
(0.04
|
)
|
(0.35
|
)
|
||||||
Tax benefit on restricted stock
|
-
|
(0.01
|
)
|
(0.05
|
)
|
|||||||
Total non-GAAP adjustments - net of tax
|
$
|
0.84
|
$
|
0.98
|
$
|
0.47
|
||||||
Non-GAAP: Net earnings per common share - diluted
|
$
|
6.38
|
$
|
6.13
|
$
|
5.12
|
(2) |
We define Adjusted EBITDA as net earnings calculated in accordance with GAAP, adjusted for the following: interest expense, depreciation and amortization, share-based compensation, acquisition and integration expenses, provision for income taxes, and other income. Segment Adjusted EBITDA is defined as operating income calculated in accordance with GAAP, adjusted for interest expense, share-based compensation, acquisition and integration expenses, and depreciation and amortization. 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. The presentation of Adjusted EBITDA has been changed from prior period presentations to include adjustments for expenses related to acquisitions such as legal, accounting, tax, and adjustments to the fair value of contingent purchase price consideration as well as stock compensation.
|
|
Year Ended March 31,
|
|||||||||||
Consolidated
|
2021
|
2020
|
2019
|
|||||||||
Net earnings
|
$
|
74,397
|
$
|
69,082
|
$
|
63,192
|
||||||
Provision for income taxes
|
32,509
|
26,877
|
23,038
|
|||||||||
Share based compensation
|
7,167
|
7,954
|
7,244
|
|||||||||
Interest and financing costs
|
521
|
294
|
-
|
|||||||||
Acquisition and integration expense
|
271
|
1,676
|
1,813
|
|||||||||
Depreciation and amortization
|
13,951
|
14,156
|
11,824
|
|||||||||
Other income
|
(571
|
)
|
(680
|
)
|
(6,696
|
)
|
||||||
Adjusted EBITDA
|
$
|
128,245
|
$
|
119,359
|
$
|
100,415
|
||||||
Technology Segment
|
||||||||||||
Operating income
|
$
|
75,665
|
$
|
62,155
|
$
|
56,738
|
||||||
Depreciation and amortization
|
13,839
|
14,016
|
11,812
|
|||||||||
Share based compensation
|
6,923
|
7,699
|
6,839
|
|||||||||
Interest and financing costs
|
521
|
294
|
-
|
|||||||||
Acquisition and integration expense
|
271
|
1,676
|
1,813
|
|||||||||
Adjusted EBITDA
|
$
|
97,219
|
$
|
85,840
|
$
|
77,202
|
||||||
Financing Segment
|
||||||||||||
Operating income
|
$
|
30,670
|
$
|
33,124
|
$
|
22,796
|
||||||
Depreciation and amortization
|
112
|
140
|
12
|
|||||||||
Share based compensation
|
244
|
255
|
405
|
|||||||||
Adjusted EBITDA
|
$
|
31,026
|
$
|
33,519
|
$
|
23,213
|
(3) |
We define Adjusted gross billings as our technology segment net sales calculated in accordance with US GAAP, adjusted to exclude the costs incurred related to sales of third-party maintenance, software assurance, subscription/SaaS licenses, and services. We have provided below a reconciliation of Adjusted gross billings to technology segment net sales, which is the most directly comparable financial measure to this Non-GAAP financial measure.
|
|
Year Ended March 31,
|
|||||||||||
2021
|
2020
|
2019
|
||||||||||
Technology segment net sales
|
$
|
1,507,954
|
$
|
1,530,138
|
$
|
1,329,520
|
||||||
Costs incurred related to sales of third party maintenance, software assurance and subscription/Saas licenses, and services
|
755,911
|
697,747
|
589,475
|
|||||||||
Adjusted gross billings
|
$
|
2,263,865
|
$
|
2,227,885
|
$
|
1,918,995
|
• |
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 the sale of off-lease (used) equipment.
|
|
Year Ended March 31,
|
|||||||||||||||
2021
|
2020
|
Change
|
||||||||||||||
Net sales
|
||||||||||||||||
Product
|
$
|
1,305,789
|
$
|
1,337,022
|
$
|
(31,233
|
)
|
(2.3
|
%)
|
|||||||
Services
|
202,165
|
193,116
|
9,049
|
4.7
|
%
|
|||||||||||
Total
|
1,507,954
|
1,530,138
|
(22,184
|
)
|
(1.4
|
%)
|
||||||||||
Cost of sales
|
||||||||||||||||
Product
|
1,036,627
|
1,069,110
|
(32,483
|
)
|
(3.0
|
%)
|
||||||||||
Services
|
125,092
|
120,440
|
4,652
|
3.9
|
%
|
|||||||||||
Total
|
1,161,719
|
1,189,550
|
(27,831
|
)
|
(2.3
|
%)
|
||||||||||
Gross profit
|
346,235
|
340,588
|
5,647
|
1.7
|
%
|
|||||||||||
Selling, general, and administrative
|
256,210
|
264,123
|
(7,913
|
)
|
(3.0
|
%)
|
||||||||||
Depreciation and amortization
|
13,839
|
14,016
|
(177
|
)
|
(1.3
|
%)
|
||||||||||
Interest and financing costs
|
521
|
294
|
227
|
77.2
|
%
|
|||||||||||
Operating expenses
|
270,570
|
278,433
|
(7,863
|
)
|
(2.8
|
%)
|
||||||||||
Operating income
|
$
|
75,665
|
$
|
62,155
|
$
|
13,510
|
21.7
|
%
|
||||||||
Adjusted gross billings
|
$
|
2,263,865
|
$
|
2,227,885
|
$
|
35,980
|
1.6
|
%
|
||||||||
Adjusted EBITDA
|
$
|
97,219
|
$
|
85,840
|
$
|
11,379
|
13.3
|
%
|
|
Twelve Months Ended
March 31, |
|||||||||||
2021
|
2020
|
Change
|
||||||||||
Revenue by customer end market:
|
||||||||||||
Technology
|
17
|
%
|
21
|
%
|
(4
|
%)
|
||||||
Telecom, Media & Entertainment
|
25
|
%
|
19
|
%
|
6
|
%
|
||||||
SLED
|
16
|
%
|
16
|
%
|
0
|
%
|
||||||
Healthcare
|
13
|
%
|
15
|
%
|
(2
|
%)
|
||||||
Financial Services
|
13
|
%
|
13
|
%
|
0
|
%
|
||||||
All others
|
16
|
%
|
16
|
%
|
0
|
%
|
||||||
Total
|
100
|
%
|
100
|
%
|
|
||||||||||||
2021
|
2020
|
Change
|
||||||||||
Revenue by vendor:
|
||||||||||||
Cisco Systems
|
36
|
%
|
40
|
%
|
(4
|
%)
|
||||||
NetApp
|
4
|
%
|
4
|
%
|
0
|
%
|
||||||
HP Inc. & HPE
|
4
|
%
|
5
|
%
|
(1
|
%)
|
||||||
Dell/EMC
|
7
|
%
|
6
|
%
|
1
|
%
|
||||||
Juniper Networks
|
6
|
%
|
4
|
%
|
2
|
%
|
||||||
Arista Networks
|
3
|
%
|
5
|
%
|
(2
|
%)
|
||||||
All others
|
40
|
%
|
36
|
%
|
4
|
%
|
||||||
Total
|
100
|
%
|
100
|
%
|
|
Year Ended March 31,
|
|||||||||||||||
2021
|
2020
|
Change
|
||||||||||||||
Net sales
|
$
|
60,369
|
$
|
58,266
|
$
|
2,103
|
3.6
|
%
|
||||||||
Cost of sales
|
13,050
|
7,663
|
5,387
|
70.3
|
%
|
|||||||||||
Gross profit
|
47,319
|
50,603
|
(3,284
|
)
|
(6.5
|
%)
|
||||||||||
Selling, general, and administrative
|
15,053
|
15,059
|
(6
|
)
|
(0.0
|
%)
|
||||||||||
Depreciation and amortization
|
112
|
140
|
(28
|
)
|
(20.0
|
%)
|
||||||||||
Interest and financing costs
|
1,484
|
2,280
|
(796
|
)
|
(34.9
|
%)
|
||||||||||
Operating expenses
|
16,649
|
17,479
|
(830
|
)
|
(4.7
|
%)
|
||||||||||
Operating income
|
$
|
30,670
|
$
|
33,124
|
$
|
(2,454
|
)
|
(7.4
|
%)
|
|||||||
Adjusted EBITDA
|
$
|
31,026
|
$
|
33,519
|
$
|
(2,493
|
)
|
(7.4
|
%)
|
|
Year Ended March 31,
|
|||||||
2021
|
2020
|
|||||||
Net cash provided by (used in) operating activities
|
$
|
129,507
|
$
|
(74,174
|
)
|
|||
Net cash used in investing activities
|
(35,756
|
)
|
(20,339
|
)
|
||||
Net cash provided by (used in) financing activities
|
(49,802
|
)
|
100,634
|
|||||
Effect of exchange rate changes on cash
|
(617
|
)
|
294
|
|||||
Net increase in cash and cash equivalents
|
$
|
43,332
|
$
|
6,415
|
|
Year Ended March 31,
|
|||||||
2021
|
2020
|
|||||||
Technology segment
|
$
|
153,332
|
$
|
(15,812
|
)
|
|||
Financing segment
|
(23,825
|
)
|
(58,362
|
)
|
||||
Net cash provided by (used in) operating activities
|
$
|
129,507
|
$
|
(74,174
|
)
|
|
As of March 31,
|
|||||||
2021
|
2020
|
|||||||
(DSO) Days sales outstanding (1)
|
69
|
71
|
||||||
(DIO) Days inventory outstanding (2)
|
15
|
11
|
||||||
(DPO) Days payable outstanding (3)
|
(47
|
)
|
(45
|
)
|
||||
Cash conversion cycle
|
37
|
37
|
(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 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 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, product and services for the same three-month period.
|
Maximum Credit Limit
at March 31, 2021 |
Balance as of
March 31, 2021 |
Maximum Credit Limit
at March 31, 2020 |
Balance as of
March 31, 2020 |
|||||||||||
$
|
275,000
|
$
|
98,653
|
$
|
300,000
|
$
|
127,416
|
|
Payments Due by Period
|
|||||||||||||||||||
Total
|
Less than 1 year
|
1-3 years
|
3-5 years
|
More than 5 years
|
||||||||||||||||
Non-recourse notes payable (1)
|
$
|
56,520
|
$
|
50,709
|
$
|
5,169
|
$
|
642
|
$
|
-
|
||||||||||
Recourse notes payable
|
19,158
|
5,577
|
13,581
|
-
|
-
|
|||||||||||||||
Operating lease obligations
|
9,413
|
4,006
|
4,489
|
918
|
-
|
|||||||||||||||
Hosted software
|
8,054
|
2,840
|
3,765
|
1,449
|
-
|
|||||||||||||||
Total
|
$
|
93,145
|
$
|
63,132
|
$
|
27,004
|
$
|
3,009
|
$
|
-
|
ITEM 7A. |
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
ITEM 8. |
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
|
ITEM 9. |
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
|
ITEM 9A. |
CONTROLS AND PROCEDURES
|
ITEM 9B. |
OTHER INFORMATION
|
ITEM 10. |
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
|
ITEM 11. |
EXECUTIVE COMPENSATION
|
ITEM 12. |
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
|
ITEM 13. |
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
|
ITEM 14. |
PRINCIPAL ACCOUNTING FEES AND SERVICES
|
ITEM 15. |
EXHIBITS, FINANCIAL STATEMENT SCHEDULES
|
Exhibit No.
|
Exhibit Description
|
|
|
ePlus inc. Amended and Restated Certificate of Incorporation, filed on September 19, 2008 (Incorporated herein by reference to Exhibit 3.1 to our Quarterly Report on Form 10-Q for the period ended September 30, 2008).
|
|
|
|
Amended and Restated Bylaws of ePlus inc. as amended February 15, 2018 (Incorporated herein by reference to Exhibit 3.1 to our Current Report on Form 8-K filed on February 20, 2018).
|
|
|
|
Specimen Certificate of Common Stock (Incorporated herein by reference to Exhibit 4.1 to our Registration Statement on Form S-1 (File No. 333-11737) originally filed on September 11, 1996).
|
|
|
|
Description of ePlus inc.'s securities (Incorporated herein by reference to Exhibit 4.2 to our Annual Report on Form 10-K for the year ended March 31, 2019).
|
|
|
|
Form of Indemnification Agreement entered into by and between ePlus and its directors and officers (Incorporated herein by reference to Exhibit 10.1 to our Current Report on Form 8-K filed on August 23, 2016).
|
|
|
|
Amended and Restated Employment Agreement effective September 6, 2017, by and between ePlus inc. and Mark P. Marron (Incorporated herein by reference to Exhibit 10.1 to our Quarterly Report on Form 10-Q for the period ended December 31, 2017).
|
|
|
|
Amendment #1, effective July 16, 2018, to Amended and Restated Employment Agreement effective September 6, 2017, by and between ePlus inc. and Mark P. Marron (Incorporated herein by reference to Exhibit 10.2 to our Current Report on Form 8-K filed on July 18, 2018).
|
|
|
|
Amendment #2, effective November 14, 2019, to Amended and Restated Employment Agreement effective September 6, 2017, by and between ePlus inc. and Mark P. Marron (Incorporated herein by reference to Exhibit 10.2 to our Quarterly Report on Form 10-Q for the period ended December 31, 2019).
|
|
|
|
Amended and Restated Employment Agreement effective September 6, 2017, by and between ePlus inc. and Elaine D. Marion (Incorporated herein by reference to Exhibit 10.3 to our Quarterly Report on Form 10-Q for the period ended December 31, 2017).
|
|
|
|
Amendment #1, effective November 14, 2019, to Amended and Restated Employment Agreement, effective September 6, 2017, by and between ePlus inc. and Elaine D. Marion (Incorporated herein by reference to Exhibit 10.1 to our Quarterly Report on Form 10-Q for the period ended December 31, 2019).
|
|
|
|
2017 Non-Employee Director Long-Term Incentive Plan (Incorporated herein by reference to Exhibit 10.1 to our Current Report on Form 8-K filed on September 14, 2017).
|
|
|
|
ePlus inc. 2012 Employee Long-term Incentive Plan (updated to reflect stock split effected March 31, 2017) (Incorporated herein by reference to Exhibit 10.8 to our Annual Report on Form 10-K for the fiscal year ended March 31, 2017).
|
|
|
|
Form of Award Agreement – Restricted Stock Agreement (for awards granted under and subject to the provisions of the ePlus inc. 2012 Employee Long-Term Incentive Plan) (Incorporated herein by reference to Exhibit 10.24 to our Annual Report on Form 10-K for the fiscal year ended March 31, 2013).
|
Form of Award Agreement – Restricted Stock Unit Award Agreement (for awards granted under and subject to the provisions of the ePlus inc. 2012 Employee Long-Term Incentive Plan) (Incorporated herein by reference to Exhibit 10.25 to our Annual Report on Form 10-K for the fiscal year ended March 31, 2013).
|
|
|
|
Limited Guaranty dated June 24, 2004 by and between GE Commercial Distribution Finance Corporation and ePlus inc. (Incorporated herein by reference to Exhibit 10.10 to our Current Report on Form 8-K filed on November 17, 2005).
|
|
|
|
Collateralized Guaranty, dated March 30, 2004, by and between GE Commercial Distribution Finance Corporation and ePlus Group, inc. (Incorporated herein by reference to Exhibit 10.11 to our Current Report on Form 8-K filed on November 17, 2005).
|
|
|
|
Amendment to Collateralized Guaranty, dated November 14, 2005, by and between GE Commercial Distribution Finance Corporation and ePlus Group, inc. (Incorporated herein by reference to Exhibit 10.12 to our Current Report on Form 8-K filed on November 17, 2005).
|
|
Amended and Restated Business Financing Agreement, dated July 23, 2012, by and between General Electric Commercial Distribution Finance and ePlus Technology, inc. (Incorporated by reference to Exhibit 10.2 to our Current Report on Form 8-K filed on July 26, 2012).
|
|
|
|
Amendment No. 1, dated July 31, 2014, to Amended and Restated Business Financing Agreement by and between General Electric Commercial Distribution Finance and ePlus Technology, inc. (Incorporated by reference to Exhibit 10.2 to our Quarterly Report on Form 10-Q for the period ended September 30, 2014).
|
|
Amendment No. 2, dated July 24, 2015, to Amended and Restated Business Financing Agreement by and between General Electric Commercial Distribution Finance and ePlus Technology, inc. (Incorporated herein by reference to Exhibit 10.2 to our Current Report on Form 8-K filed on July 30, 2015).
|
|
|
|
Amendment No. 3, dated October 20, 2015, to Amended and Restated Business Financing Agreement by and among ePlus Technology, inc. and its subsidiary ePlus Technology Services, inc. and GE Commercial Distribution Finance Corporation (Incorporated herein by reference to Exhibit 10.2 to our Quarterly Report on Form 10-Q for the period ended September 30, 2015).
|
|
|
|
Amendment No. 4, dated July 28, 2016, to Amended and Restated Business Financing Agreement by and among ePlus Technology, inc. and its subsidiary ePlus Technology Services, inc. and Wells Fargo Commercial Distribution Finance, LLC (f/k/a GE Commercial Distribution Finance Corporation) (Incorporated herein by reference to Exhibit 10.2 to our Current Report on Form 8-K filed on August 1, 2016).
|
|
|
|
Amendment No. 5, dated July 27, 2017, to Amended and Restated Business Financing Agreement by and between ePlus Technology, inc. and Wells Fargo Commercial Distribution Finance, LLC (f/k/a GE Commercial Distribution Finance Corporation) (Incorporated herein by reference to Exhibit 10.2 to our Current Report on Form 8-K filed on August 3, 2017).
|
|
|
|
Amendment No. 6, dated February 15, 2018, to Amended and Restated Business Financing Agreement by and between ePlus Technology, inc. and Wells Fargo Commercial Distribution Finance, LLC (f/k/a GE Commercial Distribution Finance Corporation) (Incorporated herein by reference to Exhibit 10.27 to our Annual Report on Form 10-K for the fiscal year ended March 31, 2018).
|
|
|
|
Amendment No. 7, dated January 15, 2019, to Amended and Restated Business Financing Agreement between ePlus Technology, inc. and Wells Fargo Commercial Distribution Finance, LLC (Incorporated herein by reference to Exhibit 10.2 to our Current Report on Form 8-K filed on January 18, 2019).
|
|
|
|
Amendment No. 8, dated November 12, 2019, to Amended and Restated Business Financing Agreement between ePlus Technology, inc. and Wells Fargo Commercial Distribution Finance, LLC. (Incorporated herein by reference to Exhibit 10.4 to our Quarterly Report on Form 10-Q for the period ended December 31, 2019).
|
|
|
|
Amendment No. 9, dated March 31, 2020, to Amended and Restated Business Financing Agreement between ePlus Technology, inc. and Wells Fargo Commercial Distribution Finance, LLC. (Incorporated herein by reference to Exhibit 10.2 to our Current Report on Form 8-K filed on April 3, 2020).
|
|
Amendment No. 10, dated May 18, 2020, to Amended and Restated Business Financing Agreement between ePlus Technology, inc. and Wells Fargo Commercial Distribution Finance, LLC. (Incorporated herein by reference to Exhibit 10.2 to our Current Report on Form 8-K filed on May 21, 2020).
|
|
|
Amended and Restated Agreement for Wholesale Financing, dated July 23, 2012, by and between General Electric Commercial Distribution Finance and ePlus Technology, inc. (Incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed on July 26, 2012).
|
|
|
|
Amendment No. 1, dated July 31, 2014, to Amended and Restated Agreement for Wholesale Financing by and between General Electric Commercial Distribution Finance and ePlus Technology, inc. (Incorporated by reference to Exhibit 10.1 to our Quarterly Report on Form 10-Q for the period ended September 30, 2014).
|
|
|
|
Amendment No. 2, dated July 24, 2015, to Amended and Restated Agreement for Wholesale Financing by and between General Electric Commercial Distribution Finance and ePlus Technology, inc. (Incorporated herein by reference to Exhibit 10.1 to our Current Report on Form 8-K filed on July 30, 2015).
|
|
|
|
Amendment No. 3, dated October 20, 2015, to Amended and Restated Agreement for Wholesale Financing by and among ePlus Technology, inc. and its subsidiary ePlus Technology Services, inc. and GE Commercial Distribution Finance Corporation (Incorporated herein by reference to Exhibit 10.1 to our Quarterly Report on Form 10-Q for the period ended September 30, 2015).
|
|
|
|
Amendment No. 4, dated July 28, 2016, to Amended and Restated Agreement for Wholesale Financing by and among ePlus Technology, inc. and its subsidiary ePlus Technology Services, inc. and Wells Fargo Commercial Distribution Finance, LLC (f/k/a GE Commercial Distribution Finance Corporation) (Incorporated herein by reference to Exhibit 10.1 to our Current Report on Form 8-K filed on August 1, 2016).
|
|
|
|
Amendment No. 5, dated July 27, 2017, to Amended and Restated Agreement for Wholesale Financing by and between ePlus Technology, inc. and Wells Fargo Commercial Distribution Finance, LLC (f/k/a GE Commercial Distribution Finance Corporation) (Incorporated herein by reference to Exhibit 10.1 to our Current Report on Form 8-K filed on August 3, 2017).
|
|
|
|
Amendment No. 6, dated February 15, 2018, to Amended and Restated Agreement for Wholesale Financing by and between ePlus Technology, inc. and Wells Fargo Commercial Distribution Finance, LLC (f/k/a GE Commercial Distribution Finance Corporation) (Incorporated herein by reference to Exhibit 10.20 to our Annual Report of Form 10-K for the fiscal year ended March 31, 2018).
|
|
|
|
Amendment No. 7, dated January 15, 2019, to Amended and Restated Agreement for Wholesale Financing between ePlus Technology, inc. and Wells Fargo Commercial Distribution Finance, LLC (Incorporated herein by reference to Exhibit 10.1 to our Current Report on Form 8-K filed on January 18, 2019).
|
|
|
|
Amendment No. 8, dated November 12, 2019, to Amended and Restated Agreement for Wholesale Financing between ePlus Technology, inc. and Wells Fargo Commercial Distribution Finance, LLC. (Incorporated herein by reference to Exhibit 10.4 to our Quarterly Report on Form 10-Q for the period ended December 31, 2019).
|
|
|
|
Amendment No. 9, dated March 31, 2020, to Amended and Restated Agreement for Wholesale Financing between ePlus Technology, inc. and Wells Fargo Commercial Distribution Finance, LLC. (Incorporated herein by reference to Exhibit 10.1 to our Current Report on Form 8-K filed on April 3, 2020).
|
|
|
|
Amendment No. 10, dated May 18, 2020, to Amended and Restated Agreement for Wholesale Financing between ePlus Technology, inc. and Wells Fargo Commercial Distribution Finance, LLC. (Incorporated herein by reference to Exhibit 10.1 to our Current Report on Form 8-K filed on May 21, 2020).
|
|
|
|
Employment Agreement, effective May 7, 2018, by and between ePlus inc. and Darren S. Raiguel. (Incorporated herein by reference to Exhibit 10.1 to our Current Report on Form 8-K filed on May 9, 2018).
|
ITEM 16. |
FORM 10-K SUMMARY
|
|
ePlus inc.
|
/s/ MARK P. MARRON
|
|
By: Mark P. Marron
|
|
Chief Executive Officer and President
|
|
Date: May 20, 2021
|
|
/s/ MARK P. MARRON
|
By: Mark P. Marron
|
|
Chief Executive Officer, President, and Director
|
|
(Principal Executive Officer)
|
|
Date: May 20, 2021
|
|
/s/ ELAINE D. MARION
|
|
By: Elaine D. Marion, Chief Financial Officer
|
|
(Principal Financial and Accounting Officer)
|
|
Date: May 20, 2021
|
|
/s/ BRUCE M. BOWEN
By: Bruce M. Bowen, Director
|
|
Date: May 20, 2021
|
|
/s/ JOHN E. CALLIES
|
|
By: John E. Callies, Director
|
|
Date: May 20, 2021
|
|
/s/ C. THOMAS FAULDERS, III
|
|
By: C. Thomas Faulders, III, Chairman
|
|
Date: May 20, 2021
|
|
/s/ ERIC D. HOVDE
|
|
By: Eric D. Hovde, Director
|
|
Date: May 20, 2021
|
|
/s/ IRA A. HUNT
|
|
By: Ira A. Hunt, Director
|
|
Date: May 20, 2021
|
|
/s/ MAUREEN F. MORRISON
|
|
By: Maureen F. Morrison
|
|
Date: May 20, 2021
|
|
/s/ BEN XIANG
|
|
By: Ben Xiang, Director
|
|
Date: May 20, 2021
|
|
PAGE
|
F-2
|
|
F-6
|
|
F-7
|
|
F-8
|
|
F-9
|
|
F-11
|
|
F-12
|
• |
We tested the design and operating effectiveness of management’s controls over the determination of gross or net recognition of third-party software and support sales.
|
• |
For a selection of contracts, we performed the following procedures:
|
– |
Inspected the customer invoice and purchase order to determine whether the sale represented a valid transaction with a customer.
|
– |
Compared the cost per the Company’s records to the cost per the vendor invoice.
|
– |
Evaluated the sale to determine whether it constituted a single or multiple performance obligation(s) through inspection of the customer invoice, purchase order, and information on vendor websites accessed through third-party search engines.
|
– |
Evaluated the sale to determine whether there was accompanying third-party support related to the software, and whether the support was separately identifiable or essential to the functionality of the software through inspection of customer invoices, purchase orders, information on vendor websites accessed through third-party search engines and inquiries with management, as necessary.
|
• |
We tested the design and operating effectiveness of management’s controls over the transfer of financial assets, including management’s controls over the evaluation of the terms of loan documents and accompanying investor data, assignment agreements, and the calculation of the gain or loss.
|
• |
For a selection of transactions, we evaluated the Company’s determination of sale or secured borrowing, by evaluating, among other factors, if the transferred assets have been isolated from the Company. Specifically, we performed the following procedures:
|
– |
Obtained the executed transfer agreement and evaluated whether the Company:
|
◾ |
Assigned its rights, titles, interests, estates, claims, and demands to the third-party assignee
|
◾ |
Retained any rights with respect to the payments assigned to the third-party assignee or had been appropriately isolated from the assets. We evaluated opinions from outside legal counsel, when applicable.
|
– |
Obtained and inspected the cash proceeds support from the transfer and compared the cash received to the selling price.
|
– |
Tested the mathematical accuracy of management’s calculation of the gain or loss based on the cash proceeds and the receivable balance as of date of sale.
|
Year Ended March 31,
|
||||||||||||
|
2021
|
2020
|
2019
|
|||||||||
Net sales
|
||||||||||||
Product
|
$
|
1,366,158
|
$
|
1,395,288
|
$
|
1,223,195
|
||||||
Services
|
202,165
|
193,116
|
149,478
|
|||||||||
Total
|
1,568,323
|
1,588,404
|
1,372,673
|
|||||||||
Cost of sales
|
||||||||||||
Product
|
1,049,677
|
1,076,773
|
952,464
|
|||||||||
Services
|
125,092
|
120,440
|
89,821
|
|||||||||
Total
|
1,174,769
|
1,197,213
|
1,042,285
|
|||||||||
Gross profit
|
393,554
|
391,191
|
330,388
|
|||||||||
Selling, general, and administrative
|
271,263
|
279,182
|
237,082
|
|||||||||
Depreciation and amortization
|
13,951
|
14,156
|
11,824
|
|||||||||
Interest and financing costs
|
2,005
|
2,574
|
1,948
|
|||||||||
Operating expenses
|
287,219
|
295,912
|
250,854
|
|||||||||
Operating income
|
106,335
|
95,279
|
79,534
|
|||||||||
Other income (expense)
|
571
|
680
|
6,696
|
|||||||||
Earnings before tax
|
106,906
|
95,959
|
86,230
|
|||||||||
Provision for income taxes
|
32,509
|
26,877
|
23,038
|
|||||||||
Net earnings
|
$
|
74,397
|
$
|
69,082
|
$
|
63,192
|
||||||
Net earnings per common share—basic
|
$
|
5.58
|
$
|
5.18
|
$
|
4.70
|
||||||
Net earnings per common share—diluted
|
$
|
5.54
|
$
|
5.15
|
$
|
4.65
|
||||||
Weighted average common shares outstanding—basic
|
13,337
|
13,327
|
13,448
|
|||||||||
Weighted average common shares outstanding—diluted
|
13,417
|
13,415
|
13,578
|
Year Ended March 31,
|
||||||||||||
2021
|
2020
|
2019
|
||||||||||
|
||||||||||||
NET EARNINGS
|
$
|
74,397
|
$
|
69,082
|
$
|
63,192
|
||||||
OTHER COMPREHENSIVE INCOME, NET OF TAX:
|
||||||||||||
Foreign currency translation adjustments
|
1,646
|
(720
|
)
|
(803
|
)
|
|||||||
Other comprehensive income (loss)
|
1,646
|
(720
|
)
|
(803
|
)
|
|||||||
TOTAL COMPREHENSIVE INCOME
|
$
|
76,043
|
$
|
68,362
|
$
|
62,389
|
Year Ended March 31,
|
||||||||||||
|
2021
|
2020
|
2019
|
|||||||||
Cash flows from operating activities:
|
||||||||||||
Net earnings
|
$
|
74,397
|
$
|
69,082
|
$
|
63,192
|
||||||
Adjustments to reconcile net earnings to net cash provided by (used in) operating activities:
|
||||||||||||
Depreciation and amortization
|
19,991
|
19,156
|
18,639
|
|||||||||
Reserve for credit losses
|
1,436
|
1,004
|
170
|
|||||||||
Share-based compensation expense
|
7,169
|
7,954
|
7,243
|
|||||||||
Deferred taxes
|
(4,198
|
)
|
(2,185
|
)
|
3,280
|
|||||||
Payments from lessees directly to lenders—operating leases
|
(34
|
)
|
(70
|
)
|
(156
|
)
|
||||||
Gain on disposal of property, equipment, and operating lease equipment
|
(2,742
|
)
|
(814
|
)
|
(2,027
|
)
|
||||||
Gain on sale of financial receivables
|
-
|
-
|
(9,077
|
)
|
||||||||
Changes in:
|
||||||||||||
Accounts receivable
|
(5,056
|
)
|
(64,388
|
)
|
(34,306
|
)
|
||||||
Inventories-net
|
(16,798
|
)
|
115
|
(10,929
|
)
|
|||||||
Financing receivables—net
|
(42,104
|
)
|
(109,355
|
)
|
(7,883
|
)
|
||||||
Deferred costs and other assets
|
(16,503
|
)
|
(20,982
|
)
|
5,412
|
|||||||
Accounts payable-trade
|
76,772
|
(8,884
|
)
|
12,456
|
||||||||
Salaries and commissions payable, deferred revenue, and other liabilities
|
37,177
|
35,193
|
(6,603
|
)
|
||||||||
Net cash provided by (used in) operating activities
|
129,507
|
(74,174
|
)
|
39,411
|
||||||||
Cash flows from investing activities:
|
||||||||||||
Proceeds from sale of property, equipment, and operating lease equipment
|
2,791
|
1,705
|
3,619
|
|||||||||
Purchases of property, equipment, and operating lease equipment
|
(11,513
|
)
|
(7,009
|
)
|
(11,629
|
)
|
||||||
Cash used in acquisitions, net of cash acquired
|
(27,034
|
)
|
(15,035
|
)
|
(49,764
|
)
|
||||||
Purchases of assets to be leased or financed
|
-
|
-
|
(10,368
|
)
|
||||||||
Issuance of financing receivables
|
-
|
-
|
(175,410
|
)
|
||||||||
Repayments of financing receivables
|
-
|
-
|
73,942
|
|||||||||
Proceeds from sale of financing receivables
|
-
|
-
|
73,405
|
|||||||||
Net cash used in investing activities
|
(35,756
|
)
|
(20,339
|
)
|
(96,205
|
)
|
||||||
Cash flows from financing activities:
|
||||||||||||
Borrowings of non-recourse and recourse notes payable
|
66,403
|
141,369
|
83,924
|
|||||||||
Repayments of non-recourse and recourse notes payable
|
(74,328
|
)
|
(31,880
|
)
|
(43,054
|
)
|
||||||
Repurchase of common stock
|
(6,948
|
)
|
(14,425
|
)
|
(18,754
|
)
|
||||||
Repayments of financing of acquisitions
|
(556
|
)
|
(5,763
|
)
|
(7,634
|
)
|
||||||
Net borrowings (repayments) on floor plan facility
|
(34,373
|
)
|
11,333
|
3,974
|
||||||||
Net cash provided by (used in) financing activities
|
(49,802
|
)
|
100,634
|
18,456
|
||||||||
Effect of exchange rate changes on cash
|
(617
|
)
|
294
|
(44
|
)
|
|||||||
Net increase (decrease) in cash and cash equivalents
|
43,332
|
6,415
|
(38,382
|
)
|
||||||||
Cash and cash equivalents, beginning of period
|
86,231
|
79,816
|
118,198
|
|||||||||
Cash and cash equivalents, end of period
|
$
|
129,563
|
$
|
86,231
|
$
|
79,816
|
|
Year Ended March 31,
|
|||||||||||
2021
|
2020
|
2019
|
||||||||||
Supplemental disclosures of cash flow information:
|
||||||||||||
Cash paid for interest
|
$
|
1,436
|
$
|
2,260
|
$
|
1,862
|
||||||
Cash paid for income taxes
|
$
|
31,690
|
$
|
28,356
|
$
|
19,938
|
||||||
Cash paid for amounts included in the measurement of lease liabilities
|
$
|
5,780
|
$
|
5,613
|
$
|
-
|
||||||
Schedule of non-cash investing and financing activities:
|
||||||||||||
Proceeds from sale of property, equipment, and leased equipment
|
$
|
2,045
|
$
|
-
|
$
|
520
|
||||||
Purchases of property, equipment, and operating lease equipment
|
$
|
(372
|
)
|
$
|
(329
|
)
|
$
|
(1,874
|
)
|
|||
Purchases of assets to be leased or financed
|
$
|
-
|
$
|
-
|
$
|
(13,663
|
)
|
|||||
Issuance of financing receivables
|
$
|
-
|
$
|
-
|
$
|
(119,024
|
)
|
|||||
Proceeds from sale of financing receivables
|
$
|
-
|
$
|
-
|
$
|
142,418
|
||||||
Consideration for acquisitions
|
$
|
-
|
$
|
(241
|
)
|
$
|
(257
|
)
|
||||
Borrowing of non-recourse and recourse notes payable
|
$
|
121,826
|
$
|
114,439
|
$
|
75,164
|
||||||
Repayments of non-recourse and recourse notes payable
|
$
|
(34
|
)
|
$
|
(70
|
)
|
$
|
(156
|
)
|
|||
Vesting of share-based compensation
|
$
|
7,937
|
$
|
8,990
|
$
|
12,816
|
||||||
New operating lease assets obtained in exchange for lease obligations
|
$
|
1,146
|
$
|
6,035
|
$
|
-
|
|
Common Stock
|
Additional
Paid-In
|
Treasury
|
Retained
|
Accumulated
Other
Comprehensive
|
|||||||||||||||||||||||
Shares
|
Par Value
|
Capital
|
Stock
|
Earnings
|
Income
|
Total
|
||||||||||||||||||||||
Balance, April 1, 2018
|
13,761
|
$
|
142
|
$
|
130,000
|
$
|
(36,016
|
)
|
$
|
277,945
|
$
|
532
|
$
|
372,603
|
||||||||||||||
Issuance of restricted stock awards
|
75
|
1
|
-
|
-
|
-
|
-
|
1
|
|||||||||||||||||||||
Share-based compensation
|
-
|
-
|
7,243
|
-
|
-
|
-
|
7,243
|
|||||||||||||||||||||
Repurchase of common stock
|
(225
|
)
|
-
|
-
|
(17,983
|
)
|
-
|
-
|
(17,983
|
)
|
||||||||||||||||||
Net earnings
|
-
|
-
|
-
|
-
|
63,192
|
-
|
63,192
|
|||||||||||||||||||||
Foreign currency translation adjustment
|
-
|
-
|
-
|
-
|
-
|
(803
|
)
|
(803
|
)
|
|||||||||||||||||||
Balance, March 31, 2019
|
13,611
|
$
|
143
|
$
|
137,243
|
$
|
(53,999
|
)
|
$
|
341,137
|
$
|
(271
|
)
|
$
|
424,253
|
|||||||||||||
Issuance of restricted stock awards
|
93
|
1
|
-
|
-
|
-
|
-
|
1
|
|||||||||||||||||||||
Share-based compensation
|
-
|
-
|
7,954
|
-
|
-
|
-
|
7,954
|
|||||||||||||||||||||
Repurchase of common stock
|
(204
|
)
|
-
|
-
|
(14,425
|
)
|
-
|
-
|
(14,425
|
)
|
||||||||||||||||||
Net earnings
|
-
|
-
|
-
|
-
|
69,082
|
-
|
69,082
|
|||||||||||||||||||||
Foreign currency translation adjustment
|
-
|
-
|
-
|
-
|
-
|
(720
|
)
|
(720
|
)
|
|||||||||||||||||||
Balance, March 31, 2020
|
13,500
|
$
|
144
|
$
|
145,197
|
$
|
(68,424
|
)
|
$
|
410,219
|
$
|
(991
|
)
|
$
|
486,145
|
|||||||||||||
Issuance of restricted stock awards
|
100
|
1
|
-
|
-
|
-
|
-
|
1
|
|||||||||||||||||||||
Share-based compensation
|
-
|
-
|
7,169
|
-
|
-
|
-
|
7,169
|
|||||||||||||||||||||
Repurchase of common stock
|
(97
|
)
|
-
|
-
|
(6,948
|
)
|
-
|
-
|
(6,948
|
)
|
||||||||||||||||||
Net earnings
|
-
|
-
|
-
|
-
|
74,397
|
-
|
74,397
|
|||||||||||||||||||||
Foreign currency translation adjustment
|
-
|
-
|
-
|
-
|
-
|
1,646
|
1,646
|
|||||||||||||||||||||
Balance, March 31, 2021
|
13,503
|
$
|
145
|
$
|
152,366
|
$
|
(75,372
|
)
|
$
|
484,616
|
$
|
655
|
$
|
562,410
|
● |
Level 1 – Quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity can access at the measurement date.
|
● |
Level 2 – Inputs other than quoted prices included within Level 1, such as quoted prices for similar assets or liabilities in active markets, that are observable for the asset or liability, either directly or indirectly.
|
● |
Level 3 – Unobservable inputs for the asset or liability. The fair values are determined based on model-based techniques such as discounted cash flow models using inputs that we could not corroborate with market data.
|
March 31,
|
||||||||||||
|
2021
|
2020
|
2019
|
|||||||||
Current (included in deferred revenue)
|
$
|
72,299
|
$
|
54,486
|
$
|
46,356
|
||||||
Non-current (included in other liabilities)
|
$
|
26,042
|
$
|
16,395
|
$
|
13,593
|
Year ending March 31, 2022
|
$
|
38,097
|
||
2023
|
16,560
|
|||
2024
|
7,784
|
|||
2025
|
794
|
|||
2026 and thereafter
|
246
|
|||
Total remaining performance obligations
|
$
|
63,481
|
4. |
FINANCING RECEIVABLES AND OPERATING LEASES
|
|
Year Ended March 31,
|
|||||||
2021
|
2020
|
|||||||
Net sales
|
$
|
27,196
|
$
|
15,631
|
||||
Cost of sales
|
17,855
|
13,039
|
||||||
Gross profit
|
$
|
9,341
|
$
|
2,592
|
|
Year Ended March 31,
|
|||||||
2021
|
2020
|
|||||||
Interest income on sales-type leases
|
$
|
7,602
|
$
|
6,623
|
||||
Lease income on operating leases
|
$
|
15,864
|
$
|
18,534
|
March 31, 2021
|
Notes
Receivable
|
Lease
Receivables
|
Financing
Receivables
|
|||||||||
Gross receivables
|
$
|
112,641
|
$
|
68,393
|
$
|
181,034
|
||||||
Unguaranteed residual value (1)
|
-
|
14,876
|
14,876
|
|||||||||
Initial direct costs, net of amortization
|
425
|
-
|
425
|
|||||||||
Unearned income
|
-
|
(8,393
|
)
|
(8,393
|
)
|
|||||||
Allowance for credit losses (2)
|
(1,212
|
)
|
(1,171
|
)
|
(2,383
|
)
|
||||||
Total, net
|
$
|
111,854
|
$
|
73,705
|
$
|
185,559
|
||||||
Reported as:
|
||||||||||||
Current
|
$
|
73,175
|
$
|
33,097
|
$
|
106,272
|
||||||
Long-term
|
38,679
|
40,608
|
79,287
|
|||||||||
Total, net
|
$
|
111,854
|
$
|
73,705
|
$
|
185,559
|
(1) |
Includes unguaranteed residual values of $9,453 thousand that we retained after selling the related lease receivable.
|
(2) |
March 31, 2020
|
Notes
Receivable
|
Lease
Receivables
|
Financing
Receivables
|
|||||||||
Minimum payments
|
$
|
55,417
|
$
|
69,492
|
$
|
124,909
|
||||||
Estimated unguaranteed residual value (1)
|
-
|
21,862
|
21,862
|
|||||||||
Initial direct costs, net of amortization
|
212
|
247
|
459
|
|||||||||
Unearned income
|
-
|
(11,612
|
)
|
(11,612
|
)
|
|||||||
Allowance for credit losses (2)
|
(798
|
)
|
(610
|
)
|
(1,408
|
)
|
||||||
Total, net
|
$
|
54,831
|
$
|
79,379
|
$
|
134,210
|
||||||
Reported as:
|
||||||||||||
Current
|
$
|
31,181
|
$
|
38,988
|
$
|
70,169
|
||||||
Long-term
|
23,650
|
40,391
|
64,041
|
|||||||||
Total, net
|
$
|
54,831
|
$
|
79,379
|
$
|
134,210
|
(1) |
Includes unguaranteed residual values of $14,972 thousand for sales type leases, which have been sold and accounted for as sales.
|
(2) |
Year ending March 31, 2022
|
$
|
36,900
|
||
2023
|
16,358
|
|||
2024
|
9,628
|
|||
2025
|
3,356
|
|||
2026 and thereafter
|
2,151
|
|||
Total
|
$
|
68,393
|
|
March 31, 2021
|
March 31, 2020
|
||||||
Cost of equipment under operating leases
|
$
|
18,748
|
$
|
21,276
|
||||
Accumulated depreciation
|
(7,870
|
)
|
(11,159
|
)
|
||||
Investment in operating lease equipment—net (1)
|
$
|
10,878
|
$
|
10,117
|
(1) |
Amounts include estimated unguaranteed residual values of $2.5 million and $3.1 million as of March 31, 2021, and 2020, respectively.
|
Year ending March 31, 2022
|
$
|
4,744
|
||
2023
|
3,756
|
|||
2024
|
1,034
|
|||
2025
|
37
|
|||
Total
|
$
|
9,571
|
5. |
LESSEE ACCOUNTING
|
|
Year Ended March 31,
|
|||||||
Lease term and Discount Rate
|
2021
|
2020
|
||||||
Weighted average remaining lease term (months)
|
32
|
38
|
||||||
Weighted average discount rate
|
3.7
|
%
|
3.9
|
%
|
Year ending March 31, 2022
|
$
|
4,006
|
||
2023
|
3,166
|
|||
2024
|
1,323
|
|||
2025
|
884
|
|||
2026
|
34
|
|||
Total lease payments
|
9,413
|
|||
Less: interest
|
(439
|
)
|
||
Present value of lease liabilities
|
$
|
8,974
|
6. |
GOODWILL AND OTHER INTANGIBLE ASSETS
|
|
March 31, 2021
|
March 31, 2020
|
||||||||||||||||||||||
Goodwill
|
Accumulated
Impairment
Loss
|
Net
Carrying
Amount
|
Goodwill
|
Accumulated
Impairment
Loss
|
Net
Carrying
Amount
|
|||||||||||||||||||
Beginning balance
|
$
|
126,770
|
$
|
(8,673
|
)
|
$
|
118,097
|
$
|
119,480
|
$
|
(8,673
|
)
|
$
|
110,807
|
||||||||||
Acquisitions
|
8,328
|
-
|
8,328
|
7,410
|
-
|
7,410
|
||||||||||||||||||
Foreign currency translations
|
220
|
-
|
220
|
(120
|
)
|
-
|
(120
|
)
|
||||||||||||||||
Ending balance
|
$
|
135,318
|
$
|
(8,673
|
)
|
$
|
126,645
|
$
|
126,770
|
$
|
(8,673
|
)
|
$
|
118,097
|
|
March 31, 2021
|
March 31, 2020
|
||||||||||||||||||||||
Gross
Carrying
Amount
|
Accumulated
Amortization
|
Net
Carrying
Amount
|
Gross
Carrying
Amount
|
Accumulated
Amortization
|
Net
Carrying
Amount
|
|||||||||||||||||||
Customer relationships & other intangibles
|
$
|
77,335
|
$
|
(42,115
|
)
|
$
|
35,220
|
$
|
63,006
|
$
|
(33,000
|
)
|
$
|
30,006
|
||||||||||
Capitalized software development
|
10,553
|
(7,159
|
)
|
3,394
|
10,385
|
(5,927
|
)
|
4,458
|
||||||||||||||||
Total
|
$
|
87,888
|
$
|
(49,274
|
)
|
$
|
38,614
|
$
|
73,391
|
$
|
(38,927
|
)
|
$
|
34,464
|
Year ending March 31, 2022
|
$
|
10,073
|
||
2023
|
8,028
|
|||
2024
|
6,218
|
|||
2025
|
4,647
|
|||
2026 and thereafter
|
6,254
|
|||
Total
|
$
|
35,220
|
7. |
ALLOWANCE FOR CREDIT LOSSES
|
|
Accounts
Receivable
|
Notes
Receivable
|
Lease
Receivables
|
Total
|
||||||||||||
Balance as of March 31, 2018
|
$
|
1,538
|
$
|
486
|
$
|
640
|
$
|
2,664
|
||||||||
Provision for credit losses
|
195
|
250
|
(110
|
)
|
335
|
|||||||||||
Write-offs and other
|
(154
|
)
|
(231
|
)
|
-
|
(385
|
)
|
|||||||||
Balance as of March 31, 2019
|
1,579
|
505
|
530
|
2,614
|
||||||||||||
Provision for credit losses
|
627
|
293
|
84
|
1,004
|
||||||||||||
Write-offs and other
|
(425
|
)
|
-
|
(4
|
)
|
(429
|
)
|
|||||||||
Balance as of March 31, 2020
|
1,781
|
798
|
610
|
3,189
|
||||||||||||
Provision for credit losses
|
367
|
503
|
566
|
1,436
|
||||||||||||
Write-offs and other
|
(84
|
)
|
(89
|
)
|
(5
|
)
|
(178
|
)
|
||||||||
Balance as of March 31, 2021
|
$
|
2,064
|
$
|
1,212
|
$
|
1,171
|
$
|
4,447
|
|
March 31, 2020
|
|||||||
Notes
Receivable
|
Lease-
Receivables
|
|||||||
Allowance for credit losses:
|
||||||||
Ending balance: collectively evaluated for impairment
|
$
|
736
|
$
|
610
|
||||
Ending balance: individually evaluated for impairment
|
62
|
-
|
||||||
Ending balance
|
$
|
798
|
$
|
610
|
||||
Minimum payments:
|
||||||||
Ending balance: collectively evaluated for impairment
|
$
|
55,005
|
$
|
69,492
|
||||
Ending balance: individually evaluated for impairment
|
412
|
-
|
||||||
Ending balance
|
$
|
55,417
|
$
|
69,492
|
• |
High CQR: This rating includes accounts with excellent to good business credit, asset quality and capacity to meet financial obligations. Loss rates in this category are generally less than 1%.
|
• |
Average CQR: This rating includes accounts with average credit risk that are more susceptible to loss in the event of adverse business or economic conditions. Loss rates in this category are generally in the range of 2% to 10%.
|
• |
Low CQR: This rating includes accounts that have marginal credit risk such that the customer’s ability to make repayment is impaired or may likely become impaired. The loss rates in this category in the normal course are generally in the range of 10% to 100%.
|
|
Amortized cost basis by origination year ending March 31,
|
|||||||||||||||||||||||||||||||
2021
|
2020
|
2019
|
2018
|
2017
|
Total
|
Transfers
(2)
|
Net
credit
exposure
|
|||||||||||||||||||||||||
Notes receivable:
|
||||||||||||||||||||||||||||||||
High CQR
|
$
|
93,793
|
$
|
6,250
|
$
|
769
|
$
|
771
|
$
|
19
|
$
|
101,602
|
$
|
(63,471
|
)
|
$
|
38,131
|
|||||||||||||||
Average CQR
|
7,689
|
2,468
|
550
|
8
|
-
|
10,715
|
(2,896
|
)
|
7,819
|
|||||||||||||||||||||||
Low CQR
|
-
|
-
|
324
|
-
|
-
|
324
|
-
|
324
|
||||||||||||||||||||||||
Total
|
$
|
101,482
|
$
|
8,718
|
$
|
1,643
|
$
|
779
|
$
|
19
|
$
|
112,641
|
$
|
(66,367
|
)
|
$
|
46,274
|
|||||||||||||||
Lease receivables:
|
||||||||||||||||||||||||||||||||
High CQR
|
$
|
28,898
|
$
|
5,885
|
$
|
1,798
|
$
|
463
|
$
|
125
|
$
|
37,169
|
$
|
(7,468
|
)
|
$
|
29,701
|
|||||||||||||||
Average CQR
|
23,445
|
3,482
|
1,017
|
270
|
40
|
28,254
|
(4,592
|
)
|
23,662
|
|||||||||||||||||||||||
Low CQR
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||||||||
Total
|
$
|
52,343
|
$
|
9,367
|
$
|
2,815
|
$
|
733
|
$
|
165
|
$
|
65,423
|
$
|
(12,060
|
)
|
$
|
53,363
|
|||||||||||||||
Total amortized cost (1)
|
$
|
153,825
|
$
|
18,085
|
$
|
4,458
|
$
|
1,512
|
$
|
184
|
$
|
178,064
|
$
|
(78,427
|
)
|
$
|
99,637
|
(1) |
Unguaranteed residual values of $9,453 thousand that we retained after selling the related lease receivable and initial direct costs of notes receivable of $425 thousand are excluded from amortized cost.
|
(2) |
Transfers consist of receivables that have been transferred to third-party financial institutions on a non-recourse basis and receivables that are in the process of being transferred to third-party financial institutions.
|
|
31-60
Days Past
Due
|
61-90
Days Past
Due
|
> 90
Days Past
Due
|
Total
Past Due
|
Current
|
Total
Billed
|
Unbilled
|
Amortized
Cost
|
||||||||||||||||||||||||
Notes receivable
|
$
|
648
|
$
|
910
|
$
|
673
|
$
|
2,231
|
$
|
3,240
|
$
|
5,471
|
$
|
107,170
|
$
|
112,641
|
||||||||||||||||
Lease receivables
|
804
|
132
|
643
|
1,579
|
2,566
|
4,145
|
61,278
|
65,423
|
||||||||||||||||||||||||
Total
|
$
|
1,452
|
$
|
1,042
|
$
|
1,316
|
$
|
3,810
|
$
|
5,806
|
$
|
9,616
|
$
|
168,448
|
$
|
178,064
|
|
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
|
||||||||||||||||||||||||||||||
High CQR
|
$
|
951
|
$
|
105
|
$
|
922
|
$
|
1,978
|
$
|
1,181
|
$
|
33,581
|
$
|
36,740
|
$
|
(4,766
|
)
|
$
|
(19,823
|
)
|
$
|
12,151
|
||||||||||||||||||
Average CQR
|
46
|
107
|
112
|
265
|
1,106
|
31,381
|
32,752
|
(3,646
|
)
|
(18,693
|
)
|
10,413
|
||||||||||||||||||||||||||||
Low CQR
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||||||||||||||
Total
|
$
|
997
|
$
|
212
|
$
|
1,034
|
$
|
2,243
|
$
|
2,287
|
$
|
64,962
|
$
|
69,492
|
$
|
(8,412
|
)
|
$
|
(38,516
|
)
|
$
|
22,564
|
|
31-60
Days
Past
Due
|
61-90
Days
Past
Due
|
Greater
than 90
Days
Past
Due
|
Total
Past
Due
|
Current
|
Unbilled
Notes
Receivable
|
Total
Notes
Receivable
|
Non-
Recourse
Notes
Payable
|
Net
Credit
Exposure
|
|||||||||||||||||||||||||||
High CQR
|
$
|
1,332
|
$
|
2
|
$
|
280
|
$
|
1,614
|
$
|
2,878
|
$
|
29,057
|
$
|
33,549
|
$
|
(18,341
|
)
|
$
|
15,208
|
|||||||||||||||||
Average CQR
|
140
|
44
|
142
|
326
|
1,135
|
19,995
|
21,456
|
(16,636
|
)
|
4,820
|
||||||||||||||||||||||||||
Low CQR
|
63
|
-
|
152
|
215
|
-
|
197
|
412
|
-
|
412
|
|||||||||||||||||||||||||||
Total
|
$
|
1,535
|
$
|
46
|
$
|
574
|
$
|
2,155
|
$
|
4,013
|
$
|
49,249
|
$
|
55,417
|
$
|
(34,977
|
)
|
$
|
20,440
|
8. |
PROPERTY, EQUIPMENT, AND OTHER ASSETS AND LIABILITIES
|
|
March 31,
2021
|
March 31,
2020
|
||||||
Furniture, fixtures and equipment
|
$
|
26,612
|
$
|
24,657
|
||||
Leasehold improvements
|
6,918
|
6,964
|
||||||
Capitalized software
|
4,153
|
3,513
|
||||||
Vehicles
|
546
|
315
|
||||||
Total assets
|
38,229
|
35,449
|
||||||
Accumulated depreciation and amortization
|
(30,841
|
)
|
(28,296
|
)
|
||||
Property and equipment - net
|
$
|
7,388
|
$
|
7,153
|
|
March 31,
2021
|
March 31,
2020
|
||||||
Other current assets:
|
||||||||
Deposits & funds held in escrow
|
$
|
759
|
$
|
926
|
||||
Prepaid assets
|
9,939
|
7,946
|
||||||
Other
|
278
|
384
|
||||||
Total
|
$
|
10,976
|
$
|
9,256
|
||||
Property, equipment and other assets:
|
||||||||
Property and equipment, net
|
$
|
7,388
|
$
|
7,153
|
||||
Deferred costs - non-current
|
19,063
|
10,957
|
||||||
Right-of-use assets
|
8,763
|
13,066
|
||||||
Other
|
7,075
|
1,420
|
||||||
Total
|
$
|
42,289
|
$
|
32,596
|
||||
Other current liabilities:
|
||||||||
Accrued expenses
|
$
|
13,598
|
$
|
10,024
|
||||
Accrued income taxes payable
|
4,439
|
406
|
||||||
Contingent consideration - current
|
-
|
220
|
||||||
Short-term lease liability
|
3,934
|
4,815
|
||||||
Other
|
8,090
|
7,521
|
||||||
Total
|
$
|
30,061
|
$
|
22,986
|
||||
Other liabilities:
|
||||||||
Deferred revenue - non-current
|
$
|
26,309
|
$
|
16,693
|
||||
Long-term lease liability
|
5,040
|
8,326
|
||||||
Other
|
5,330
|
2,708
|
||||||
Total
|
$
|
36,679
|
$
|
27,727
|
9. |
NOTES PAYABLE AND CREDIT FACILITY
|
11. |
EARNINGS PER SHARE
|
|
2021
|
2020
|
2019
|
|||||||||
Net earnings attributable to common shareholders - basic and diluted
|
$
|
74,397
|
$
|
69,082
|
$
|
63,192
|
||||||
Basic and diluted common shares outstanding:
|
||||||||||||
Weighted average common shares outstanding — basic
|
13,337
|
13,327
|
13,448
|
|||||||||
Effect of dilutive shares
|
80
|
88
|
130
|
|||||||||
Weighted average shares common outstanding — diluted
|
13,417
|
13,415
|
13,578
|
|||||||||
Earnings per common share - basic
|
$
|
5.58
|
$
|
5.18
|
$
|
4.70
|
||||||
Earnings per common share - diluted
|
$
|
5.54
|
$
|
5.15
|
$
|
4.65
|
12. |
STOCKHOLDERS’ EQUITY
|
13. |
SHARE-BASED COMPENSATION
|
|
Number of
Shares
|
Weighted Average
Grant-date Fair Value
|
||||||
Nonvested April 1, 2020
|
193,580
|
$
|
73.74
|
|||||
Granted
|
100,210
|
$
|
71.89
|
|||||
Vested
|
(110,412
|
)
|
$
|
70.03
|
||||
Forfeited
|
-
|
$
|
-
|
|||||
Nonvested March 31, 2021
|
183,378
|
$
|
74.97
|
14. |
INCOME TAXES
|
|
Year Ended March 31,
|
|||||||||||
2021
|
2020
|
2019
|
||||||||||
Statutory federal income tax rate
|
21.0
|
%
|
21.0
|
%
|
21.0
|
%
|
||||||
Income tax expense computed at the U.S. statutory federal rate
|
$
|
22,450
|
$
|
20,182
|
$
|
18,139
|
||||||
Effect of federal reduction of statutory rate
|
-
|
-
|
-
|
|||||||||
State income tax expense—net of federal benefit
|
6,941
|
5,659
|
4,795
|
|||||||||
Non-deductible executive compensation
|
2,052
|
613
|
630
|
|||||||||
Other
|
1,066
|
423
|
(526
|
)
|
||||||||
Provision for income taxes
|
$
|
32,509
|
$
|
26,877
|
$
|
23,038
|
||||||
Effective income tax rate
|
30.4
|
%
|
28.0
|
%
|
26.7
|
%
|
|
Year Ended March 31,
|
|||||||||||
2021
|
2020
|
2019
|
||||||||||
Current:
|
||||||||||||
Federal
|
$
|
26,054
|
$
|
19,367
|
$
|
12,709
|
||||||
State
|
9,882
|
9,520
|
6,591
|
|||||||||
Foreign
|
770
|
200
|
454
|
|||||||||
Total current expense
|
36,706
|
29,087
|
19,754
|
|||||||||
Deferred:
|
||||||||||||
Federal
|
(3,067
|
)
|
(492
|
)
|
3,826
|
|||||||
State
|
(1,096
|
)
|
(1,799
|
)
|
(249
|
)
|
||||||
Foreign
|
(34
|
)
|
81
|
(293
|
)
|
|||||||
Total deferred expense (benefit)
|
(4,197
|
)
|
(2,210
|
)
|
3,284
|
|||||||
Provision for income taxes
|
$
|
32,509
|
$
|
26,877
|
$
|
23,038
|
|
March 31,
|
|||||||
2021
|
2020
|
|||||||
Deferred tax assets:
|
||||||||
Accrued vacation
|
$
|
2,537
|
$
|
1,966
|
||||
Deferred revenue
|
4,227
|
3,175
|
||||||
Allowance for credit losses
|
1,048
|
792
|
||||||
Restricted stock
|
772
|
1,575
|
||||||
Other deferred tax assets
|
1,552
|
608
|
||||||
Accrued bonus
|
2,277
|
2,426
|
||||||
Lease liabilities
|
2,476
|
2,550
|
||||||
Other credits and carryforwards
|
-
|
1,385
|
||||||
Gross deferred tax assets
|
14,889
|
14,477
|
||||||
Less: valuation allowance
|
-
|
(1,385
|
)
|
|||||
Net deferred tax assets
|
14,889
|
13,092
|
||||||
Deferred tax liabilities:
|
||||||||
Property and equipment
|
(2,391
|
)
|
(2,102
|
)
|
||||
Operating leases
|
(6,948
|
)
|
(10,098
|
)
|
||||
Prepaid expenses
|
(912
|
)
|
(817
|
)
|
||||
Right-of-use assets
|
(2,419
|
)
|
(2,535
|
)
|
||||
Tax deductible goodwill
|
(751
|
)
|
(270
|
)
|
||||
Total deferred tax liabilities
|
(13,421
|
)
|
(15,822
|
)
|
||||
Net deferred tax asset (liability)
|
$
|
1,468
|
$
|
(2,730
|
)
|
15. |
FAIR VALUE MEASUREMENTS
|
|
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)
|
|||||||||||||
March 31, 2021
|
||||||||||||||||
Assets:
|
||||||||||||||||
Money market funds
|
$
|
45,134
|
$
|
45,134
|
$
|
-
|
$
|
-
|
||||||||
March 31, 2020
|
||||||||||||||||
Assets:
|
||||||||||||||||
Money market funds
|
$
|
128
|
$
|
128
|
$
|
-
|
$
|
-
|
||||||||
Liabilities:
|
||||||||||||||||
Contingent consideration
|
$
|
220
|
$
|
-
|
$
|
-
|
$
|
220
|
|
Acquisition Date
Amount
|
|||
Accounts receivable
|
$
|
14,526
|
||
Other assets
|
3,344
|
|||
Identified intangible assets
|
14,280
|
|||
Accounts payable and other current liabilities
|
(11,424
|
)
|
||
Performance obligations
|
(2,020
|
)
|
||
Total identifiable net assets
|
18,706
|
|||
Goodwill
|
8,328
|
|||
Total purchase consideration
|
$
|
27,034
|
|
Acquisition Date
Amount
|
|||
Accounts receivable
|
$
|
9,208
|
||
Other assets
|
743
|
|||
Identified intangible assets
|
5,720
|
|||
Accounts payable and other current liabilities
|
(6,715
|
)
|
||
Performance obligation
|
(1,140
|
)
|
||
Total identifiable net assets
|
7,816
|
|||
Goodwill
|
7,461
|
|||
Total purchase consideration
|
$
|
15,277
|
|
Acquisition Date
Amount
|
|||
Accounts receivable
|
$
|
10,209
|
||
Other assets
|
1,050
|
|||
Identified intangible assets
|
18,190
|
|||
Accounts payable and other current liabilities
|
(8,611
|
)
|
||
Performance obligation
|
(5,110
|
)
|
||
Total identifiable net assets
|
15,728
|
|||
Goodwill
|
34,301
|
|||
Total purchase consideration
|
$
|
50,029
|
17. |
SEGMENT REPORTING
|
|
Year Ended March 31,
|
|||||||||||
2021
|
2020
|
2019
|
||||||||||
Customer end market:
|
||||||||||||
Technology
|
$
|
251,683
|
$
|
324,239
|
$
|
293,362
|
||||||
Telecom, Media & Entertainment
|
371,913
|
289,958
|
175,260
|
|||||||||
Financial Services
|
198,761
|
191,679
|
202,074
|
|||||||||
State and local government and educational institutions
|
245,919
|
243,092
|
223,330
|
|||||||||
Healthcare
|
200,067
|
233,894
|
193,754
|
|||||||||
All others
|
239,611
|
247,276
|
241,740
|
|||||||||
Net sales
|
1,507,954
|
1,530,138
|
1,329,520
|
|||||||||
Less: Revenue from financing and other
|
(23,850
|
)
|
(15,631
|
)
|
(21,115
|
)
|
||||||
Revenue from contracts with customers
|
$
|
1,484,104
|
$
|
1,514,507
|
$
|
1,308,405
|
|
Year Ended March 31,
|
|||||||||||
2021
|
2020
|
2019
|
||||||||||
Vendor
|
||||||||||||
Cisco Systems
|
$
|
537,041
|
$
|
607,719
|
$
|
556,182
|
||||||
NetApp
|
58,020
|
59,812
|
48,858
|
|||||||||
HP Inc. & HPE
|
59,838
|
71,802
|
74,348
|
|||||||||
Dell / EMC
|
107,336
|
84,939
|
61,284
|
|||||||||
Arista Networks
|
51,789
|
75,281
|
57,850
|
|||||||||
Juniper Networks
|
91,946
|
68,339
|
48,943
|
|||||||||
All others
|
601,984
|
562,246
|
482,055
|
|||||||||
Net sales
|
1,507,954
|
1,530,138
|
1,329,520
|
|||||||||
Less: Revenue from financing and other
|
(23,850
|
)
|
(15,631
|
)
|
(21,115
|
)
|
||||||
Revenue from contracts with customers
|
$
|
1,484,104
|
$
|
1,514,507
|
$
|
1,308,405
|
|
Year Ended March 31,
|
|||||||||||
2021
|
2020
|
2019
|
||||||||||
Net sales:
|
||||||||||||
US
|
$
|
1,476,466
|
$
|
1,508,329
|
$
|
1,284,482
|
||||||
Non US
|
91,857
|
80,075
|
88,191
|
|||||||||
Total
|
$
|
1,568,323
|
$
|
1,588,404
|
$
|
1,372,673
|
|
March 31,
|
|||||||
2021
|
2020
|
|||||||
Long-lived tangible assets:
|
||||||||
US
|
$
|
33,504
|
$
|
38,297
|
||||
Non US
|
931
|
1,233
|
||||||
Total
|
$
|
34,435
|
$
|
39,530
|
|
Balance at
Beginning of
Period
|
Charged to
Costs and
Expenses
|
Deductions/
Write-Offs
|
Balance at End
of Period
|
||||||||||||
Allowance for sales returns: (1)
|
||||||||||||||||
Year ended March 31, 2019
|
899
|
1,305
|
(1,352
|
)
|
852
|
|||||||||||
Year ended March 31, 2020
|
852
|
2,678
|
(2,492
|
)
|
1,038
|
|||||||||||
Year ended March 31, 2021
|
1,038
|
2,909
|
(2,758
|
)
|
1,189
|
|||||||||||
Allowance for credit losses:
|
||||||||||||||||
Year ended March 31, 2019
|
2,664
|
335
|
(385
|
)
|
2,614
|
|||||||||||
Year ended March 31, 2020
|
2,614
|
1,004
|
(429
|
)
|
3,189
|
|||||||||||
Year ended March 31, 2021
|
3,189
|
1,436
|
(178
|
)
|
4,447
|
|||||||||||
Valuation for deferred taxes:
|
||||||||||||||||
Year ended March 31, 2019
|
1,335
|
(270
|
)
|
-
|
1,065
|
|||||||||||
Year ended March 31, 2020
|
1,065
|
320
|
-
|
1,385
|
||||||||||||
Year ended March 31, 2021
|
1,385
|
-
|
(1,385
|
)
|
-
|
(1) |
These amounts represent the gross profit effect of sales returns during the respective years. Expected merchandise returns after year-end for sales made before year-end were $7.4 million, $6.5 million, and $5.3 million as of March 31, 2021, 2020, and 2019, respectively.
|
|
1. |
I have reviewed this annual report on Form 10-K of ePlus 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
|
|
(Principal Executive Officer)
|
|
1. |
I have reviewed this annual report on Form 10-K of ePlus 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 ePlus inc.
|
/s/ MARK P. MARRON
|
|
Mark P. Marron Chief Executive Officer
|
|
(Principal Executive Officer)
|
|
/s/ ELAINE D. MARION
|
|
Elaine D. Marion Chief Financial Officer
|
|
(Principal Financial Officer)
|