☒ |
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.)
|
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 ☐
|
Part I. Financial Information:
|
|||
Item 1.
|
Financial Statements
|
||
5
|
|||
6
|
|||
7
|
|||
8
|
|||
10
|
|||
11
|
|||
Item 2.
|
27
|
||
Item 3.
|
44
|
||
Item 4.
|
45
|
||
Part II. Other Information:
|
|||
Item 1.
|
46
|
||
Item 1A.
|
46
|
||
Item 2.
|
46
|
||
Item 3.
|
47
|
||
Item 4.
|
47
|
||
Item 5.
|
47
|
||
Item 6.
|
48
|
||
49
|
• |
the duration and ongoing 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 and court opinions concerning the legality thereof, 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 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;
|
• |
availability of products from our vendors;
|
• |
significant and rapid inflation may cause price and wage increases, as well as increases in operating costs which may impact the arrangements that have pricing commitments over the
term of the agreement.
|
• |
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 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;
|
• |
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.
|
Three Months Ended
December 31,
|
Nine Months Ended
December 31,
|
|||||||||||||||
2021
|
2020
|
2021
|
2020
|
|||||||||||||
Net sales
|
||||||||||||||||
Product
|
$
|
432,307
|
$
|
375,512
|
$
|
1,190,524
|
$
|
1,066,408
|
||||||||
Services
|
62,527
|
52,092
|
178,976
|
149,308
|
||||||||||||
Total
|
494,834
|
427,604
|
1,369,500
|
1,215,716
|
||||||||||||
Cost of sales
|
||||||||||||||||
Product
|
339,810
|
297,514
|
914,666
|
827,111
|
||||||||||||
Services
|
37,907
|
31,939
|
109,203
|
92,935
|
||||||||||||
Total
|
377,717
|
329,453
|
1,023,869
|
920,046
|
||||||||||||
Gross profit
|
117,117
|
98,151
|
345,631
|
295,670
|
||||||||||||
Selling, general, and administrative
|
76,874
|
65,390
|
220,153
|
201,746
|
||||||||||||
Depreciation and amortization
|
3,597
|
3,143
|
11,376
|
10,000
|
||||||||||||
Interest and financing costs
|
561
|
355
|
1,262
|
1,179
|
||||||||||||
Operating expenses
|
81,032
|
68,888
|
232,791
|
212,925
|
||||||||||||
Operating income
|
36,085
|
29,263
|
112,840
|
82,745
|
||||||||||||
Other income (expense)
|
(175
|
)
|
813
|
(377
|
)
|
1,095
|
||||||||||
Earnings before tax
|
35,910
|
30,076
|
112,463
|
83,840
|
||||||||||||
Provision for income taxes
|
9,486
|
8,438
|
31,108
|
24,996
|
||||||||||||
Net earnings
|
$
|
26,424
|
$
|
21,638
|
$
|
81,355
|
$
|
58,844
|
||||||||
Net earnings per common share—basic
|
$
|
0.99
|
$
|
0.81
|
$
|
3.05
|
$
|
2.21
|
||||||||
Net earnings per common share—diluted
|
$
|
0.98
|
$
|
0.81
|
$
|
3.03
|
$
|
2.20
|
||||||||
Weighted average common shares outstanding—basic
|
26,668
|
26,664
|
26,666
|
26,684
|
||||||||||||
Weighted average common shares outstanding—diluted
|
26,930
|
26,756
|
26,887
|
26,804
|
Three Months Ended
December 31,
|
Nine Months Ended
December 31,
|
|||||||||||||||
2021
|
2020
|
2021
|
2020
|
|||||||||||||
NET EARNINGS
|
$
|
26,424
|
$
|
21,638
|
$
|
81,355
|
$
|
58,844
|
||||||||
OTHER COMPREHENSIVE INCOME, NET OF TAX:
|
||||||||||||||||
Foreign currency translation adjustments
|
81
|
|
983
|
(359
|
)
|
1,540
|
||||||||||
Other comprehensive income (loss)
|
81
|
|
983
|
(359
|
)
|
1,540
|
||||||||||
TOTAL COMPREHENSIVE INCOME
|
$
|
26,505
|
$
|
22,621
|
$
|
80,996
|
$
|
60,384
|
Nine Months Ended December 31,
|
||||||||
2021
|
2020
|
|||||||
Cash flows from operating activities:
|
||||||||
Net earnings
|
$
|
81,355
|
$
|
58,844
|
||||
Adjustments to reconcile net earnings to net cash provided by (used in) operating activities:
|
||||||||
Depreciation and amortization
|
18,620
|
13,762
|
||||||
Provision for credit losses
|
77
|
1,920
|
||||||
Share-based compensation expense
|
5,355
|
5,427
|
||||||
Deferred taxes
|
(504
|
)
|
1,033
|
|||||
Payments from lessees directly to lenders—operating leases
|
(32
|
)
|
(25
|
)
|
||||
Gain on disposal of property, equipment, and operaing lease equipment
|
(855
|
)
|
(408
|
)
|
||||
Changes in:
|
||||||||
Accounts receivable
|
(132,228
|
)
|
(67,989
|
)
|
||||
Inventories-net
|
(77,921
|
)
|
(28,340
|
)
|
||||
Financing receivables—net
|
(20,296
|
)
|
(67,112
|
)
|
||||
Deferred costs and other assets
|
(12,432
|
)
|
(15,865
|
)
|
||||
Accounts payable-trade
|
526
|
70,726
|
||||||
Salaries and commissions payable, deferred revenue, and other liabilities
|
16,793
|
33,271
|
||||||
Net cash provided by (used in) operating activities
|
(121,542
|
)
|
5,244
|
|||||
Cash flows from investing activities:
|
||||||||
Proceeds from sale of property, equipment, and operating lease equipment
|
2,927
|
670
|
||||||
Purchases of property, equipment and operating lease equipment
|
(21,375
|
)
|
(4,227
|
)
|
||||
Cash used in acquisitions, net of cash acquired
|
- | (27,102 | ) | |||||
Net cash used in investing activities
|
(18,448
|
)
|
(30,659
|
)
|
||||
Cash flows from financing activities:
|
||||||||
Borrowings of non-recourse and recourse notes payable
|
98,547
|
31,698
|
||||||
Repayments of non-recourse and recourse notes payable
|
(32,099
|
)
|
(41,870
|
)
|
||||
Repurchase of common stock
|
(9,466
|
)
|
(6,948
|
)
|
||||
Repayments of financing of acquisitions
|
-
|
(556
|
)
|
|||||
Net borrowings on floor plan facility
|
59,014
|
44,058
|
||||||
Net cash provided by financing activities
|
115,996
|
26,382
|
||||||
Effect of exchange rate changes on cash
|
(2
|
)
|
(735
|
)
|
||||
Net increase (decrease) in cash and cash equivalents
|
(23,996
|
)
|
232
|
|||||
Cash and cash equivalents, beginning of period
|
129,562
|
86,231
|
||||||
Cash and cash equivalents, end of period
|
$
|
105,566
|
$
|
86,463
|
Nine Months Ended December 31,
|
||||||||
2021
|
2020
|
|||||||
Supplemental disclosures of cash flow
information:
|
||||||||
Cash paid for interest
|
$
|
1,182
|
$
|
929
|
||||
Cash paid for income taxes
|
$
|
35,676
|
$
|
21,257
|
||||
Cash paid for amounts included in the measurement of lease liabilities
|
$
|
3,420
|
$
|
4,460
|
||||
Schedule of non-cash investing and
financing activities:
|
||||||||
Proceeds from sale of property, equipment, and leased equipment
|
$
|
87
|
$
|
-
|
||||
Purchases of property, equipment, and operating lease equipment
|
$
|
(16
|
)
|
$
|
(221
|
)
|
||
Borrowing of non-recourse and recourse notes payable
|
$
|
56,240
|
$
|
77,289
|
||||
Repayments of non-recourse and recourse notes payable
|
$
|
(32
|
)
|
$
|
(25
|
)
|
||
Vesting of share-based compensation
|
$
|
8,439
|
$
|
7,926
|
||||
New operating lease assets obtained in exchange for lease obligations
|
$
|
2,489
|
$
|
1,097
|
Nine Months Ended December 31, 2021
|
||||||||||||||||||||||||||||
Common Stock
|
Additional
Paid-In
|
Treasury
|
Retained
|
Accumulated
Other
Comprehensive
|
||||||||||||||||||||||||
Shares
|
Par Value
|
Capital
|
Stock
|
Earnings
|
Income
|
Total
|
||||||||||||||||||||||
Balance, March 31, 2021
|
27,006
|
$
|
145
|
$
|
152,366
|
$
|
(75,372
|
)
|
$
|
484,616
|
$
|
655
|
$
|
562,410
|
||||||||||||||
Issuance of restricted stock awards
|
156
|
1
|
-
|
-
|
-
|
-
|
1
|
|||||||||||||||||||||
Share-based compensation
|
-
|
-
|
1,735
|
-
|
-
|
-
|
1,735
|
|||||||||||||||||||||
Repurchase of common stock
|
(90
|
)
|
-
|
-
|
(4,111
|
)
|
-
|
-
|
(4,111
|
)
|
||||||||||||||||||
Net earnings
|
-
|
-
|
-
|
-
|
23,518
|
-
|
23,518
|
|||||||||||||||||||||
Foreign currency translation adjustment
|
-
|
-
|
-
|
-
|
-
|
66
|
66
|
|||||||||||||||||||||
Balance, June 30, 2021
|
27,072
|
$
|
146
|
$
|
154,101
|
$
|
(79,483
|
)
|
$
|
508,134
|
$
|
721
|
$
|
583,619
|
||||||||||||||
Issuance of restricted stock awards
|
12
|
-
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||||||||
Share-based compensation
|
-
|
-
|
1,840
|
-
|
-
|
-
|
1,840
|
|||||||||||||||||||||
Repurchase of common stock
|
(63
|
)
|
-
|
-
|
(2,763
|
)
|
-
|
-
|
(2,763
|
)
|
||||||||||||||||||
Net earnings
|
-
|
-
|
-
|
-
|
31,413
|
-
|
31,413
|
|||||||||||||||||||||
Foreign currency translation adjustment
|
-
|
-
|
-
|
-
|
-
|
(506
|
)
|
(506
|
)
|
|||||||||||||||||||
Balance, September 30, 2021
|
27,021
|
$
|
146
|
$
|
155,941
|
$
|
(82,246
|
)
|
$
|
539,547
|
$
|
215
|
$
|
613,603
|
||||||||||||||
Issuance of restricted stock awards | (5 | ) | - | - | - | - | - | - | ||||||||||||||||||||
Share-based compensation | - | - | 1,780 | - | - | - | 1,780 | |||||||||||||||||||||
Repurchase of common stock | (50 | ) | - | - | (2,592 | ) | - | - | (2,592 | ) | ||||||||||||||||||
Stock split effected in the form of a dividend
|
- | 135 | - | - | (135 | ) | - | - | ||||||||||||||||||||
Retirement of treasury stock | - | (11 | ) | - | 82,246 | (82,235 | ) | - | - | |||||||||||||||||||
Net earnings | - | - | - | - | 26,424 | - | 26,424 | |||||||||||||||||||||
Foreign currency translation adjustment | - | - | - | - | - | 81 | 81 | |||||||||||||||||||||
Balance, December 31, 2021 | 26,966 | $ | 270 | $ | 157,721 | $ | (2,592 | ) | $ | 483,601 | $ | 296 | $ | 639,296 |
|
Nine Months Ended December 31, 2020
|
|||||||||||||||||||||||||||
Common Stock
|
Additional
Paid-In
|
Treasury
|
Retained
|
Accumulated
Other
Comprehensive
|
||||||||||||||||||||||||
|
Shares
|
Par Value
|
Capital
|
Stock
|
Earnings
|
Income
|
Total
|
|||||||||||||||||||||
Balance, March 31, 2020
|
27,000
|
$
|
144
|
$
|
145,197
|
$
|
(68,424
|
)
|
$
|
410,219
|
$
|
(991
|
)
|
$
|
486,145
|
|||||||||||||
Issuance of restricted stock awards
|
182
|
1
|
-
|
-
|
-
|
-
|
1
|
|||||||||||||||||||||
Share-based compensation
|
-
|
-
|
1,885
|
-
|
-
|
-
|
1,885
|
|||||||||||||||||||||
Repurchase of common stock
|
(76
|
)
|
-
|
-
|
(2,703
|
)
|
-
|
-
|
(2,703
|
)
|
||||||||||||||||||
Net earnings
|
-
|
-
|
-
|
-
|
17,360
|
-
|
17,360
|
|||||||||||||||||||||
Foreign currency translation adjustment
|
-
|
-
|
-
|
-
|
-
|
37
|
37
|
|||||||||||||||||||||
|
||||||||||||||||||||||||||||
Balance, June 30, 2020
|
27,106
|
$
|
145
|
$
|
147,082
|
$
|
(71,127
|
)
|
$
|
427,579
|
$
|
(954
|
)
|
$
|
502,725
|
|||||||||||||
Issuance of restricted stock awards
|
16
|
-
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||||||||
Share-based compensation
|
-
|
-
|
1,763
|
-
|
-
|
-
|
1,763
|
|||||||||||||||||||||
Repurchase of common stock
|
(48
|
)
|
-
|
-
|
(1,784
|
)
|
-
|
-
|
(1,784
|
)
|
||||||||||||||||||
Net earnings
|
-
|
-
|
-
|
-
|
19,846
|
-
|
19,846
|
|||||||||||||||||||||
Foreign currency translation adjustment
|
-
|
-
|
-
|
-
|
-
|
520
|
520
|
|||||||||||||||||||||
Balance, September 30, 2020
|
27,074
|
$
|
145
|
$
|
148,845
|
$
|
(72,911
|
)
|
$
|
447,425
|
$
|
(434
|
)
|
$
|
523,070
|
|||||||||||||
Issuance of restricted stock awards | 2 | - | - | - | - | - | - | |||||||||||||||||||||
Share-based compensation | - | - | 1,779 | - | - | - | 1,779 | |||||||||||||||||||||
Repurchase of common stock | (70 | ) | - | - | (2,461 | ) | - | - | (2,461 | ) | ||||||||||||||||||
Net earnings | - | - | - | - | 21,638 | - | 21,638 | |||||||||||||||||||||
Foreign currency translation adjustment | - | - | - | - | - | 983 | 983 | |||||||||||||||||||||
Balance, December 31, 2020 | 27,006 | $ | 145 | $ | 150,624 | $ | (75,372 | ) | $ | 469,063 | $ | 549 | $ | 545,009 |
1.
|
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
|
2. |
REVENUES
|
December 31, 2021
|
March 31, 2021
|
|||||||
Current (included in deferred revenue)
|
$
|
92,662
|
$
|
72,299
|
||||
Non-current (included in other liabilities)
|
$
|
28,335
|
$
|
26,042
|
Remainder of the year ending March 31, 2022
|
$
|
17,884
|
||
Year ending March 31, 2023
|
34,059
|
|||
Year ending March 31, 2024
|
15,388
|
|||
Year ending March 31, 2025
|
4,626
|
|||
Year ending March 31, 2026 and thereafter
|
1,742
|
|||
Total remaining performance obligations
|
$
|
73,699
|
3. |
FINANCING RECEIVABLES AND OPERATING LEASES
|
Three months ended December 31,
|
Nine months ended December 31,
|
|||||||||||||||
2021
|
2020
|
2021
|
2020
|
|||||||||||||
Net sales
|
$
|
3,212
|
$
|
4,182
|
$
|
12,991
|
$
|
22,000
|
||||||||
Cost of sales
|
2,645
|
3,362
|
10,936
|
14,091
|
||||||||||||
Gross profit
|
$
|
567
|
$
|
820
|
$
|
2,055
|
$
|
7,909
|
Three months ended December 31,
|
Nine months ended December 31,
|
|||||||||||||||
2021
|
2020
|
2021
|
2020
|
|||||||||||||
Interest income on sales-type leases
|
$
|
786
|
$
|
1,956
|
$
|
3,076
|
$
|
6,059
|
||||||||
Lease income on operating leases
|
$
|
7,356
|
$
|
3,623
|
$
|
19,200
|
$
|
11,361
|
December 31,
2021
|
Notes
Receivable
|
Lease
Receivables
|
Financing
Receivables
|
|||||||||
Gross receivables
|
$
|
115,446
|
$
|
46,509
|
$
|
161,955
|
||||||
Unguaranteed residual value (1)
|
-
|
11,522
|
11,522
|
|||||||||
Initial direct costs, net of amortization
|
234
|
-
|
234
|
|||||||||
Unearned income
|
-
|
(5,988
|
)
|
(5,988
|
)
|
|||||||
Allowance for credit losses (2)
|
(1,160
|
)
|
(646
|
)
|
(1,806
|
)
|
||||||
Total, net
|
$
|
114,520
|
$
|
51,397
|
$
|
165,917
|
||||||
Reported as:
|
||||||||||||
Current
|
$
|
78,426
|
$
|
19,757
|
$
|
98,183
|
||||||
Long-term
|
36,094
|
31,640
|
67,734
|
|||||||||
Total, net
|
$
|
114,520
|
$
|
51,397
|
$
|
165,917
|
(1) |
Includes unguaranteed residual values of $7,176 thousand that we retained after selling the related lease receivable.
|
(2) |
Refer to Note 6, “Allowance for Credit Losses” for
details.
|
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)
|
Refer to Note 6, “Allowance for Credit Losses” for details.
|
December 31,
2021
|
March 31,
2021
|
|||||||
Cost of equipment under operating leases
|
$
|
34,893
|
$
|
18,748
|
||||
Accumulated depreciation
|
(12,601
|
)
|
(7,870
|
)
|
||||
Investment in operating lease equipment—net (1)
|
$
|
22,292
|
$
|
10,878
|
(1) |
Amounts include estimated unguaranteed residual
values of $5.0 million and $2.5
million as of December 31, 2021, and March 31, 2021, respectively.
|
4. |
LESSEE ACCOUNTING
|
5. |
GOODWILL AND OTHER INTANGIBLE ASSETS
|
Nine months ended December 31, 2021
|
||||||||||||
Goodwill
|
Accumulated
Impairment
Loss
|
Net
Carrying
Amount
|
||||||||||
Beginning balance
|
$
|
135,318
|
$
|
(8,673
|
)
|
$
|
126,645
|
|||||
Foreign currency translations
|
(41
|
)
|
-
|
(41
|
)
|
|||||||
Ending balance
|
$
|
135,277
|
$
|
(8,673
|
)
|
$
|
126,604
|
December 31, 2021
|
March 31, 2021
|
|||||||||||||||||||||||
Gross
Carrying
Amount
|
Accumulated
Amortization
|
Net
Carrying
Amount
|
Gross
Carrying
Amount
|
Accumulated
Amortization
|
Net
Carrying
Amount
|
|||||||||||||||||||
Customer relationships & other intangibles
|
$
|
77,290
|
$
|
(49,929
|
)
|
$
|
27,361
|
$
|
77,335
|
$
|
(42,115
|
)
|
$
|
35,220
|
||||||||||
Capitalized software development
|
10,515
|
(8,098
|
)
|
2,417
|
10,553
|
(7,159
|
)
|
3,394
|
||||||||||||||||
Total
|
$
|
87,805
|
$
|
(58,027
|
)
|
$
|
29,778
|
$
|
87,888
|
$
|
(49,274
|
)
|
$
|
38,614
|
6. |
ALLOWANCE FOR CREDIT LOSSES
|
Accounts
Receivable
|
Notes
Receivable
|
Lease
Receivables
|
Total
|
|||||||||||||
Balance April 1, 2021
|
$
|
2,064
|
$
|
1,212
|
$
|
1,171
|
$
|
4,447
|
||||||||
Provision for credit losses
|
330
|
60
|
(313
|
)
|
77
|
|||||||||||
Write-offs and other
|
(129
|
)
|
(112
|
)
|
(212
|
)
|
(453
|
)
|
||||||||
Balance December 31,
2021
|
$
|
2,265
|
$
|
1,160
|
$
|
646
|
$
|
4,071
|
Accounts
Receivable
|
Notes
Receivable
|
Lease
Receivables
|
Total
|
|||||||||||||
Balance April 1, 2020
|
$
|
1,781
|
$
|
798
|
$
|
610
|
$
|
3,189
|
||||||||
Provision for credit losses
|
866
|
570
|
484
|
1,920
|
||||||||||||
Write-offs and other
|
(46
|
)
|
(88
|
)
|
(6
|
)
|
(140
|
)
|
||||||||
Balance December 31,
2020
|
$
|
2,601
|
$
|
1,280
|
$
|
1,088
|
$
|
4,969
|
•
|
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,
|
||||||||||||||||||||||||||||||||||||
2022
|
2021
|
2020
|
2019
|
2018
|
2017
|
Total
|
Transfers
(2)
|
Net credit
exposure
|
||||||||||||||||||||||||||||
Notes receivable:
|
||||||||||||||||||||||||||||||||||||
High CQR
|
$
|
57,295
|
$
|
32,657
|
$
|
1,952
|
$
|
285
|
$
|
110
|
$
|
6
|
$
|
92,305
|
$
|
(46,939
|
)
|
$
|
45,366
|
|||||||||||||||||
Average CQR
|
17,762
|
3,724
|
1,337
|
316
|
2
|
-
|
23,141
|
(10,759
|
)
|
12,382
|
||||||||||||||||||||||||||
Low CQR
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||||||||||||||
Total
|
$
|
75,057
|
$
|
36,381
|
$
|
3,289
|
$
|
601
|
$
|
112
|
$
|
6
|
$
|
115,446
|
$
|
(57,698
|
)
|
$
|
57,748
|
|||||||||||||||||
Lease receivables:
|
||||||||||||||||||||||||||||||||||||
High CQR
|
$
|
16,273
|
$
|
5,671
|
$
|
3,047
|
$
|
1,241
|
$
|
103
|
$
|
14
|
$
|
26,349
|
$
|
(3,194
|
)
|
$
|
23,155
|
|||||||||||||||||
Average CQR
|
10,250
|
5,579
|
1,330
|
124
|
110
|
10
|
17,403
|
(2,234
|
)
|
15,169
|
||||||||||||||||||||||||||
Low CQR
|
267
|
848
|
-
|
-
|
-
|
-
|
1,115
|
-
|
1,115
|
|||||||||||||||||||||||||||
Total
|
$
|
26,790
|
$
|
12,098
|
$
|
4,377
|
$
|
1,365
|
$
|
213
|
$
|
24
|
$
|
44,867
|
$
|
(5,428
|
)
|
$
|
39,439
|
|||||||||||||||||
Total amortized cost (1)
|
$
|
101,847
|
$
|
48,479
|
$
|
7,666
|
$
|
1,966
|
$
|
325
|
$
|
30
|
$
|
160,313
|
$
|
(63,126
|
)
|
$
|
97,187
|
(1) |
Unguaranteed residual values of $7,176 thousand
that we retained after selling the related lease receivable and initial direct costs of notes receivable of $234 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.
|
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
|
$
|
945
|
$
|
87
|
$
|
866
|
$
|
1,898
|
$
|
6,112
|
$
|
8,010
|
$
|
107,436
|
$
|
115,446
|
||||||||||||||||
Lease receivables
|
256
|
208
|
482
|
946
|
2,578
|
3,524
|
41,343
|
44,867
|
||||||||||||||||||||||||
Total
|
$
|
1,201
|
$
|
295
|
$
|
1,348
|
$
|
2,844
|
$
|
8,690
|
$
|
11,534
|
$
|
148,779
|
$
|
160,313
|
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
|
7. |
PROPERTY, EQUIPMENT, OTHER ASSETS AND LIABILITIES
|
December 31,
2021
|
March 31,
2021
|
|||||||
Other current assets:
|
||||||||
Deposits & funds held in escrow
|
$
|
459
|
$
|
759
|
||||
Prepaid assets
|
12,063
|
9,939
|
||||||
Other
|
410
|
278
|
||||||
Total
|
$
|
12,932
|
$
|
10,976
|
||||
Property, equipment and other assets
|
||||||||
Property and equipment, net
|
$
|
7,644
|
$
|
7,388
|
||||
Deferred costs - non-current
|
19,734
|
19,063
|
||||||
Right-of-use assets
|
7,935
|
8,763
|
||||||
Other
|
10,902
|
7,075
|
||||||
Total
|
$
|
46,215
|
$
|
42,289
|
||||
Other current liabilities:
|
||||||||
Accrued expenses
|
$
|
13,663
|
$
|
13,598
|
||||
Accrued income taxes payable
|
905
|
4,439
|
||||||
Short-term lease liability
|
4,114
|
3,934
|
||||||
Other
|
7,542
|
8,090
|
||||||
Total
|
$
|
26,224
|
$
|
30,061
|
||||
Other liabilities:
|
||||||||
Deferred revenue - non-current
|
$
|
28,691
|
$
|
26,309
|
||||
Long-term lease liability
|
3,833
|
5,040
|
||||||
Other
|
1,884
|
5,330
|
||||||
Total
|
$
|
34,408
|
$
|
36,679
|
8. |
CREDIT FACILITY AND NOTES PAYABLE
|
9. |
COMMITMENTS AND CONTINGENCIES
|
10. |
EARNINGS PER SHARE
|
Three Months Ended
December 31,
|
Nine Months Ended
December 31,
|
|||||||||||||||
2021
|
2020
|
2021
|
2020
|
|||||||||||||
Net earnings attributable to common shareholders - basic and diluted
|
$
|
26,424
|
$
|
21,638
|
$
|
81,355
|
$
|
58,844
|
||||||||
Basic and diluted common shares outstanding:
|
||||||||||||||||
Weighted average common shares outstanding — basic
|
26,668
|
26,664
|
26,666
|
26,684
|
||||||||||||
Effect of dilutive shares
|
262
|
92
|
221
|
120
|
||||||||||||
Weighted average shares common outstanding — diluted
|
26,930
|
26,756
|
26,887
|
26,804
|
||||||||||||
Earnings per common share - basic
|
$
|
0.99
|
$
|
0.81
|
$
|
3.05
|
$
|
2.21
|
||||||||
Earnings per common share - diluted
|
$
|
0.98
|
$
|
0.81
|
$
|
3.03
|
$
|
2.20
|
11. |
STOCKHOLDERS’ EQUITY
|
12. |
SHARE-BASED COMPENSATION
|
Number of
Shares
|
Weighted Average
Grant-date Fair Value
|
|||||||
Nonvested April 1, 2021
|
366,756
|
$
|
37.49
|
|||||
Granted
|
169,284
|
$
|
46.52
|
|||||
Vested
|
(184,962
|
)
|
$
|
39.12
|
||||
Forfeited | (6,106 | ) | $ | 40.57 | ||||
Nonvested December 31,
2021
|
344,972
|
|
|
13. |
INCOME TAXES
|
14. |
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, 2021
|
||||||||||||||||
Assets:
|
||||||||||||||||
Money market funds
|
$
|
5,136
|
$
|
5,136
|
$
|
-
|
$
|
-
|
||||||||
March 31, 2021
|
||||||||||||||||
Assets:
|
||||||||||||||||
Money market funds
|
$
|
45,134
|
$
|
45,134
|
$
|
-
|
$
|
-
|
15.
|
BUSINESS COMBINATIONS
|
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
|
16. |
SEGMENT REPORTING
|
Three Months Ended
|
||||||||||||||||||||||||
December 31, 2021
|
December 31, 2020
|
|||||||||||||||||||||||
Technology
|
Financing
|
Total
|
Technology
|
Financing
|
Total
|
|||||||||||||||||||
Net Sales
|
||||||||||||||||||||||||
Product
|
$
|
414,448
|
$
|
17,859
|
$
|
432,307
|
$
|
363,478
|
$
|
12,034
|
$
|
375,512
|
||||||||||||
Service
|
62,527
|
-
|
62,527
|
52,092
|
-
|
52,092
|
||||||||||||||||||
Total
|
476,975
|
17,859
|
494,834
|
415,570
|
12,034
|
427,604
|
||||||||||||||||||
Cost of Sales
|
||||||||||||||||||||||||
Product
|
334,585
|
5,225
|
339,810
|
295,310
|
2,204
|
297,514
|
||||||||||||||||||
Service
|
37,907
|
-
|
37,907
|
31,939
|
-
|
31,939
|
||||||||||||||||||
Total
|
372,492
|
5,225
|
377,717
|
327,249
|
2,204
|
329,453
|
||||||||||||||||||
Gross Profit
|
104,483
|
12,634
|
117,117
|
88,321
|
9,830
|
98,151
|
||||||||||||||||||
Selling, general, and administrative
|
73,413
|
3,461
|
76,874
|
62,377
|
3,013
|
65,390
|
||||||||||||||||||
Depreciation and amortization
|
3,569
|
28
|
3,597
|
3,115
|
28
|
3,143
|
||||||||||||||||||
Interest and financing costs
|
335
|
226
|
561
|
-
|
355
|
355
|
||||||||||||||||||
Operating expenses
|
77,317
|
3,715
|
81,032
|
65,492
|
3,396
|
68,888
|
||||||||||||||||||
Operating income
|
27,166
|
8,919
|
36,085
|
22,829
|
6,434
|
29,263
|
||||||||||||||||||
Other income (expense)
|
(175
|
)
|
813
|
|||||||||||||||||||||
Earnings before tax
|
$
|
35,910
|
$
|
30,076
|
||||||||||||||||||||
Net Sales
|
||||||||||||||||||||||||
Contracts with customers
|
$
|
473,763
|
$
|
5,840
|
$
|
479,603
|
$
|
411,175
|
$
|
1,904
|
$
|
413,079
|
||||||||||||
Financing and other
|
3,212
|
12,019
|
15,231
|
4,395
|
10,130
|
14,525
|
||||||||||||||||||
Total
|
$
|
476,975
|
$
|
17,859
|
$
|
494,834
|
$
|
415,570
|
$
|
12,034
|
$
|
427,604
|
||||||||||||
Selected Financial Data - Statement of Cash Flow
|
||||||||||||||||||||||||
Depreciation and amortization
|
$
|
3,846
|
$
|
2,730
|
$
|
6,576
|
$
|
3,311
|
$
|
991
|
$
|
4,302
|
||||||||||||
Purchases of property, equipment and operating lease equipment
|
$
|
1,339
|
$
|
3,793
|
$
|
5,132
|
$
|
959
|
$
|
1
|
$
|
960
|
||||||||||||
Selected Financial Data - Balance Sheet
|
||||||||||||||||||||||||
Total assets
|
$
|
998,594
|
$
|
256,552
|
$
|
1,255,146
|
$
|
887,684
|
$
|
238,270
|
$
|
1,125,954
|
Nine Months Ended
|
||||||||||||||||||||||||
December 31, 2021
|
December 31, 2020
|
|||||||||||||||||||||||
Technology
|
Financing
|
Total
|
Technology
|
Financing
|
Total
|
|||||||||||||||||||
Net Sales
|
||||||||||||||||||||||||
Product
|
$
|
1,134,658
|
$
|
55,866
|
$
|
1,190,524
|
$
|
1,026,845
|
$
|
39,563
|
$
|
1,066,408
|
||||||||||||
Service
|
178,976
|
-
|
178,976
|
149,308
|
-
|
149,308
|
||||||||||||||||||
Total
|
1,313,634
|
55,866
|
1,369,500
|
1,176,153
|
39,563
|
1,215,716
|
||||||||||||||||||
Cost of Sales
|
||||||||||||||||||||||||
Product
|
899,437
|
15,229
|
914,666
|
820,859
|
6,252
|
827,111
|
||||||||||||||||||
Service
|
109,203
|
-
|
109,203
|
92,935
|
-
|
92,935
|
||||||||||||||||||
Total
|
1,008,640
|
15,229
|
1,023,869
|
913,794
|
6,252
|
920,046
|
||||||||||||||||||
Gross Profit
|
304,994
|
40,637
|
345,631
|
262,359
|
33,311
|
295,670
|
||||||||||||||||||
Selling, general, and administrative
|
210,369
|
9,784
|
220,153
|
190,519
|
11,227
|
201,746
|
||||||||||||||||||
Depreciation and amortization
|
11,292
|
84
|
11,376
|
9,916
|
84
|
10,000
|
||||||||||||||||||
Interest and financing costs
|
693
|
569
|
1,262
|
266
|
913
|
1,179
|
||||||||||||||||||
Operating expenses
|
222,354
|
10,437
|
232,791
|
200,701
|
12,224
|
212,925
|
||||||||||||||||||
Operating income
|
82,640
|
30,200
|
112,840
|
61,658
|
21,087
|
82,745
|
||||||||||||||||||
Other income (expense)
|
(377
|
)
|
1,095
|
|||||||||||||||||||||
Earnings before tax
|
$
|
112,463
|
$
|
83,840
|
||||||||||||||||||||
Net Sales
|
||||||||||||||||||||||||
Contracts with customers
|
$
|
1,300,643
|
$
|
13,034
|
$
|
1,313,677
|
$
|
1,157,519
|
$
|
3,892
|
$
|
1,161,411
|
||||||||||||
Financing and other
|
12,991
|
42,832
|
55,823
|
18,634
|
35,671
|
54,305
|
||||||||||||||||||
Total
|
$
|
1,313,634
|
$
|
55,866
|
$
|
1,369,500
|
$
|
1,176,153
|
$
|
39,563
|
$
|
1,215,716
|
||||||||||||
Selected Financial Data - Statement of Cash Flow
|
||||||||||||||||||||||||
Depreciation and amortization
|
$
|
12,023
|
$
|
6,597
|
$
|
18,620
|
$
|
10,444
|
$
|
3,318
|
$
|
13,762
|
||||||||||||
Purchases of property, equipment and operating lease equipment
|
$
|
3,594
|
$
|
17,781
|
$
|
21,375
|
$
|
4,060
|
$
|
167
|
$
|
4,227
|
||||||||||||
Selected Financial Data - Balance Sheet
|
||||||||||||||||||||||||
Total assets
|
$
|
998,594
|
$
|
256,552
|
$
|
1,255,146
|
$
|
887,684
|
$
|
238,270
|
$
|
1,125,954
|
Three Months Ended December 31,
|
Nine Months Ended December 31,
|
|||||||||||||||
2021
|
2020
|
2021
|
2020
|
|||||||||||||
Customer end market:
|
||||||||||||||||
Telecom, Media & Entertainment
|
$
|
152,584
|
$
|
123,441
|
$
|
380,560
|
$
|
277,020
|
||||||||
Technology
|
67,959
|
57,346
|
190,851
|
203,634
|
||||||||||||
State and local government and educational institutions
|
59,449
|
50,703
|
193,526
|
197,758
|
||||||||||||
Healthcare
|
64,775
|
44,706
|
207,700
|
150,494
|
||||||||||||
Financial Services
|
39,182
|
60,610
|
106,229
|
154,763
|
||||||||||||
All others
|
93,026
|
78,764
|
234,768
|
192,484
|
||||||||||||
Net sales
|
476,975
|
415,570
|
1,313,634
|
1,176,153
|
||||||||||||
Less: Revenue from financing and other
|
(3,212
|
)
|
(4,395
|
)
|
(12,991
|
)
|
(18,634
|
)
|
||||||||
Revenue from contracts with customers
|
$
|
473,763
|
$
|
411,175
|
$
|
1,300,643
|
$
|
1,157,519
|
Three Months Ended December 31,
|
Nine Months Ended December 31,
|
|||||||||||||||
2021
|
2020
|
2021
|
2020
|
|||||||||||||
Vendor
|
||||||||||||||||
Cisco Systems
|
$
|
183,195
|
$
|
132,290
|
$
|
524,169
|
$
|
433,388
|
||||||||
Dell / EMC
|
40,254
|
34,027
|
110,092
|
80,457
|
||||||||||||
Juniper Networks
|
28,792
|
29,781
|
71,944
|
68,076
|
||||||||||||
HP Inc. & HPE
|
12,568
|
14,100
|
43,808
|
47,533
|
||||||||||||
Arista Networks
|
13,484
|
22,157
|
33,029
|
42,420
|
||||||||||||
NetApp
|
30,261
|
13,861
|
70,254
|
39,196
|
||||||||||||
All others
|
168,421
|
169,354
|
460,338
|
465,083
|
||||||||||||
Net sales
|
476,975
|
415,570
|
1,313,634
|
1,176,153
|
||||||||||||
Less: Revenue from financing and other
|
(3,212
|
)
|
(4,395
|
)
|
(12,991
|
)
|
(18,634
|
)
|
||||||||
Revenue from contracts with customers
|
$
|
473,763
|
$
|
411,175
|
$
|
1,300,643
|
$
|
1,157,519
|
Item 2. |
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULT OF OPERATIONS
|
Three Months Ended
December 31,
|
Nine Months Ended
December 31,
|
|||||||||||||||
Consolidated
|
2021
|
2020
|
2021
|
2020
|
||||||||||||
Net sales
|
$
|
494,834
|
$
|
427,604
|
$
|
1,369,500
|
$
|
1,215,716
|
||||||||
|
||||||||||||||||
Gross profit
|
$
|
117,117
|
$
|
98,151
|
$
|
345,631
|
$
|
295,670
|
||||||||
Gross margin
|
23.7
|
%
|
23.0
|
%
|
25.2
|
%
|
24.3
|
%
|
||||||||
Operating income margin
|
7.3
|
%
|
6.8
|
%
|
8.2
|
%
|
6.8
|
%
|
||||||||
|
||||||||||||||||
Net earnings
|
$
|
26,424
|
$
|
21,638
|
$
|
81,355
|
$
|
58,844
|
||||||||
Net earnings margin
|
5.3
|
%
|
5.1
|
%
|
5.9
|
%
|
4.8
|
%
|
||||||||
Net earnings per common share - diluted
|
$
|
0.98
|
$
|
0.81
|
$
|
3.03
|
$
|
2.20
|
||||||||
|
||||||||||||||||
Non-GAAP: Net earnings (1)
|
$
|
29,711
|
$
|
23,929
|
$
|
90,870
|
$
|
66,606
|
||||||||
Non-GAAP: Net earnings per common share - diluted (1)
|
$
|
1.10
|
$
|
0.89
|
$
|
3.38
|
$
|
2.48
|
||||||||
|
||||||||||||||||
Adjusted EBITDA (2)
|
$
|
41,797
|
$
|
34,395
|
$
|
130,264
|
$
|
98,670
|
||||||||
Adjusted EBITDA margin
|
8.4
|
%
|
8.0
|
%
|
9.5
|
%
|
8.1
|
%
|
||||||||
|
||||||||||||||||
Purchases of property and equipment used internally
|
$
|
1,339
|
$
|
959
|
$
|
3,594
|
$
|
4,060
|
||||||||
Purchases of equipment under operating leases
|
3,793
|
1
|
17,781
|
167
|
||||||||||||
Total capital expenditures
|
$
|
5,132
|
$
|
960
|
$
|
21,375
|
$
|
4,227
|
||||||||
Technology Segment
|
||||||||||||||||
Net sales
|
$
|
476,975
|
$
|
415,570
|
$
|
1,313,634
|
$
|
1,176,153
|
||||||||
Adjusted gross billings (3)
|
$
|
685,031
|
$
|
587,825
|
$
|
1,982,162
|
$
|
1,735,283
|
||||||||
|
||||||||||||||||
Gross profit
|
$
|
104,483
|
$
|
88,321
|
$
|
304,994
|
$
|
262,359
|
||||||||
Gross margin
|
21.9
|
%
|
21.3
|
%
|
23.2
|
%
|
22.3
|
%
|
||||||||
|
||||||||||||||||
Operating income
|
$
|
27,166
|
$
|
22,829
|
$
|
82,640
|
$
|
61,658
|
||||||||
Adjusted EBITDA (2)
|
$
|
32,794
|
$
|
27,876
|
$
|
99,811
|
$
|
77,312
|
||||||||
Financing Segment
|
||||||||||||||||
Net sales
|
$
|
17,859
|
$
|
12,034
|
$
|
55,866
|
$
|
39,563
|
||||||||
|
||||||||||||||||
Gross profit
|
$
|
12,634
|
$
|
9,830
|
$
|
40,637
|
$
|
33,311
|
||||||||
|
||||||||||||||||
Operating income
|
$
|
8,919
|
$
|
6,434
|
$
|
30,200
|
$
|
21,087
|
||||||||
Adjusted EBITDA (2)
|
$
|
9,003
|
$
|
6,519
|
$
|
30,453
|
$
|
21,358
|
(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.
|
Three Months Ended
December 31,
|
Nine Months Ended
December 31,
|
|||||||||||||||
2021
|
2020
|
2021
|
2020
|
|||||||||||||
GAAP: Earnings before tax
|
$
|
35,910
|
$
|
30,076
|
$
|
112,463
|
$
|
83,840
|
||||||||
Share based compensation
|
1,780
|
1,756
|
5,355
|
5,427
|
||||||||||||
Acquisition and integration expense
|
-
|
233
|
-
|
232
|
||||||||||||
Acquisition related amortization expense
|
2,497
|
1,986
|
7,854
|
6,386
|
||||||||||||
Other (income) expense
|
175
|
(813
|
)
|
377
|
(1,095
|
)
|
||||||||||
Non-GAAP: Earnings before provision for income taxes
|
40,362
|
33,238
|
126,049
|
94,790
|
||||||||||||
GAAP: Provision for income taxes
|
9,486
|
8,438
|
31,108
|
24,996
|
||||||||||||
Share based compensation
|
470
|
493
|
1,494
|
1,621
|
||||||||||||
Acquisition and integration expense
|
-
|
65
|
-
|
65
|
||||||||||||
Acquisition related amortization expense
|
649
|
541
|
2,156
|
1,856
|
||||||||||||
Other (income) expense
|
46
|
(228
|
)
|
104
|
(314
|
)
|
||||||||||
Tax benefit (expense) on restricted stock
|
-
|
-
|
317
|
(40
|
)
|
|||||||||||
Non-GAAP: Provision for income taxes
|
10,651
|
9,309
|
35,179
|
28,184
|
||||||||||||
Non-GAAP: Net earnings
|
$
|
29,711
|
$
|
23,929
|
$
|
90,870
|
$
|
66,606
|
||||||||
GAAP: Net earnings per common share - diluted
|
$
|
0.98
|
$
|
0.81
|
$
|
3.03
|
$
|
2.20
|
||||||||
Non-GAAP: Net earnings per common share - diluted
|
$
|
1.10
|
$
|
0.89
|
$
|
3.38
|
$
|
2.48
|
Three Months Ended
December 31,
|
Nine Months Ended
December 31,
|
|||||||||||||||
2021
|
2020
|
2021
|
2020
|
|||||||||||||
GAAP: Net earnings per common share - diluted
|
$
|
0.98
|
$
|
0.81
|
$
|
3.03
|
$
|
2.20
|
||||||||
Share based compensation
|
0.05
|
0.05
|
0.14
|
0.14
|
||||||||||||
Acquisition related amortization expense
|
0.07
|
0.05
|
0.21
|
0.16
|
||||||||||||
Other (income) expense
|
-
|
(0.02
|
)
|
0.01
|
(0.02
|
)
|
||||||||||
Tax benefit (expense) on restricted stock
|
-
|
-
|
(0.01
|
)
|
-
|
|||||||||||
Total non-GAAP adjustments - net of tax
|
0.12
|
0.08
|
0.35
|
0.28
|
||||||||||||
Non-GAAP: Net earnings per common share - diluted
|
$
|
1.10
|
$
|
0.89
|
$
|
3.38
|
$
|
2.48
|
(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.
|
Three Months Ended
December 31,
|
Nine Months Ended
December 31,
|
|||||||||||||||
Consolidated
|
2021
|
2020
|
2021
|
2020
|
||||||||||||
Net earnings
|
$
|
26,424
|
$
|
21,638
|
$
|
81,355
|
$
|
58,844
|
||||||||
Provision for income taxes
|
9,486
|
8,438
|
31,108
|
24,996
|
||||||||||||
Share based compensation
|
1,780
|
1,756
|
5,355
|
5,427
|
||||||||||||
Interest and financing costs
|
335
|
-
|
693
|
266
|
||||||||||||
Acquisition and integration expense
|
-
|
233
|
-
|
232
|
||||||||||||
Depreciation and amortization
|
3,597
|
3,143
|
11,376
|
10,000
|
||||||||||||
Other income (expense)
|
175
|
(813
|
)
|
377
|
(1,095
|
)
|
||||||||||
Adjusted EBITDA
|
$
|
41,797
|
$
|
34,395
|
$
|
130,264
|
$
|
98,670
|
||||||||
Technology Segment
|
||||||||||||||||
Operating income
|
$
|
27,166
|
$
|
22,829
|
$
|
82,640
|
$
|
61,658
|
||||||||
Depreciation and amortization
|
3,569
|
3,115
|
11,292
|
9,916
|
||||||||||||
Share based compensation
|
1,724
|
1,699
|
5,186
|
5,240
|
||||||||||||
Interest and financing costs
|
335
|
-
|
693
|
266
|
||||||||||||
Acquisition and integration expense
|
-
|
233
|
-
|
232
|
||||||||||||
Adjusted EBITDA
|
$
|
32,794
|
$
|
27,876
|
$
|
99,811
|
$
|
77,312
|
||||||||
Financing Segment
|
||||||||||||||||
Operating income
|
$
|
8,919
|
$
|
6,434
|
$
|
30,200
|
$
|
21,087
|
||||||||
Depreciation and amortization
|
28
|
28
|
84
|
84
|
||||||||||||
Share based compensation
|
56
|
57
|
169
|
187
|
||||||||||||
Adjusted EBITDA
|
$
|
9,003
|
$
|
6,519
|
$
|
30,453
|
$
|
21,358
|
(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.
|
|
Three Months Ended
December 31,
|
Nine Months Ended
December 31,
|
||||||||||||||
|
2021
|
2020
|
2021
|
2020
|
||||||||||||
Technology segment net sales
|
$
|
476,975
|
$
|
415,570
|
$
|
1,313,634
|
$
|
1,176,153
|
||||||||
Costs incurred related to sales of third party maintenance, software assurance and subscription/Saas licenses, and services
|
208,056
|
172,255
|
668,528
|
$
|
559,130
|
|||||||||||
Adjusted gross billings
|
$
|
685,031
|
$
|
587,825
|
$
|
1,982,162
|
$
|
1,735,283
|
|
• |
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.
|
Three Months Ended
December 31,
|
Nine Months Ended
December 31,
|
|||||||||||||||
2021
|
2020
|
2021
|
2020
|
|||||||||||||
Net sales
|
||||||||||||||||
Product
|
$
|
414,448
|
$
|
363,478
|
$
|
1,134,658
|
$
|
1,026,845
|
||||||||
Services
|
62,527
|
52,092
|
178,976
|
149,308
|
||||||||||||
Total
|
476,975
|
415,570
|
1,313,634
|
1,176,153
|
||||||||||||
Cost of sales
|
||||||||||||||||
Product
|
334,585
|
295,310
|
899,437
|
820,859
|
||||||||||||
Services
|
37,907
|
31,939
|
109,203
|
92,935
|
||||||||||||
Total
|
372,492
|
327,249
|
1,008,640
|
913,794
|
||||||||||||
Gross profit
|
104,483
|
88,321
|
304,994
|
262,359
|
||||||||||||
Selling, general, and administrative
|
73,413
|
62,377
|
210,369
|
190,519
|
||||||||||||
Depreciation and amortization
|
3,569
|
3,115
|
11,292
|
9,916
|
||||||||||||
Interest and financing costs
|
335
|
-
|
693
|
266
|
||||||||||||
Operating expenses
|
77,317
|
65,492
|
222,354
|
200,701
|
||||||||||||
Operating income
|
$
|
27,166
|
$
|
22,829
|
$
|
82,640
|
$
|
61,658
|
||||||||
Adjusted gross billings
|
$
|
685,031
|
$
|
587,825
|
$
|
1,982,162
|
$
|
1,735,283
|
||||||||
Adjusted EBITDA
|
$
|
32,794
|
$
|
27,876
|
$
|
99,811
|
$
|
77,312
|
Twelve Months Ended
December 31, |
Change
|
|||||||||||
Revenue by customer end market:
|
2021
|
2020
|
||||||||||
Telecom, Media & Entertainment
|
29
|
%
|
23
|
%
|
6
|
%
|
||||||
Healthcare
|
16
|
%
|
14
|
%
|
2
|
%
|
||||||
SLED
|
15
|
%
|
16
|
%
|
(1
|
%)
|
||||||
Technology
|
15
|
%
|
18
|
%
|
(3
|
%)
|
||||||
Financial Services
|
9
|
%
|
13
|
%
|
(4
|
%)
|
||||||
All others
|
16
|
%
|
16
|
%
|
0
|
%
|
||||||
Total
|
100
|
%
|
100
|
%
|
Change
|
||||||||||||
Revenue by vendor:
|
2021
|
2020
|
||||||||||
Cisco Systems
|
38
|
%
|
36
|
%
|
2
|
%
|
||||||
Dell EMC
|
8
|
%
|
8
|
%
|
0
|
%
|
||||||
Juniper Networks
|
6
|
%
|
5
|
%
|
1
|
%
|
||||||
NetApp
|
5
|
%
|
4
|
%
|
1
|
%
|
||||||
HP Inc. & HPE
|
3
|
%
|
4
|
%
|
(1
|
%)
|
||||||
Arista Networks
|
3
|
%
|
4
|
%
|
(1
|
%)
|
||||||
All others
|
37
|
%
|
39
|
%
|
(2
|
%)
|
||||||
Total
|
100
|
%
|
100
|
%
|
Three Months Ended
December 31,
|
Nine Months Ended
December 31, |
|||||||||||||||
2021
|
2020
|
2021
|
2020
|
|||||||||||||
Net sales
|
$
|
17,859
|
$
|
12,034
|
$
|
55,866
|
$
|
39,563
|
||||||||
Cost of sales
|
5,225
|
2,204
|
15,229
|
6,252
|
||||||||||||
Gross profit
|
12,634
|
9,830
|
40,637
|
33,311
|
||||||||||||
Selling, general, and administrative
|
3,461
|
3,013
|
9,784
|
11,227
|
||||||||||||
Depreciation and amortization
|
28
|
28
|
84
|
84
|
||||||||||||
Interest and financing costs
|
226
|
355
|
569
|
913
|
||||||||||||
Operating expenses
|
3,715
|
3,396
|
10,437
|
12,224
|
||||||||||||
Operating income
|
$
|
8,919
|
$
|
6,434
|
$
|
30,200
|
$
|
21,087
|
||||||||
Adjusted EBITDA
|
$
|
9,003
|
$
|
6,519
|
$
|
30,453
|
$
|
21,358
|
Nine Months Ended December 31,
|
||||||||
2021
|
2020
|
|||||||
Net cash provided by (used in) operating activities
|
$
|
(121,542
|
)
|
$
|
5,244
|
|||
Net cash used in investing activities
|
(18,448
|
)
|
(30,659
|
)
|
||||
Net cash provided by financing activities
|
115,996
|
26,382
|
||||||
Effect of exchange rate changes on cash
|
(2
|
)
|
(735
|
)
|
||||
Net increase (decrease) in cash and cash equivalents
|
$
|
(23,996
|
)
|
$
|
232
|
Nine Months Ended December 31,
|
||||||||
2021
|
2020
|
|||||||
Technology segment
|
$
|
(112,740
|
)
|
$
|
43,694
|
|||
Financing segment
|
(8,802
|
)
|
(38,450
|
)
|
||||
Net cash provided by (used in) operating activities
|
$
|
(121,542
|
)
|
$
|
5,244
|
As of December 31,
|
||||||||
2021
|
2020
|
|||||||
(DSO) Days sales outstanding (1)
|
67
|
62
|
||||||
(DIO) Days inventory outstanding (2)
|
21
|
13
|
||||||
(DPO) Days payable outstanding (3)
|
(41
|
)
|
(51
|
)
|
||||
Cash conversion cycle
|
47
|
24
|
(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 for the same three month period.
|
Item 3. |
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
Item 4. |
CONTROLS AND PROCEDURES
|
Item 1. |
LEGAL PROCEEDINGS
|
Item 1A. |
RISK FACTORS
|
Item 2. |
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
|
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, 2021 through April 30, 2021
|
-
|
$
|
-
|
-
|
881,798
|
(2
|
)
|
||||||||||||
May 1, 2021 through May 27, 2021
|
1,998
|
$
|
50.40
|
-
|
881,798
|
(3
|
)
|
||||||||||||
May 28, 2021 through May 31, 2021
|
-
|
$
|
-
|
-
|
1,000,000
|
(4
|
)
|
||||||||||||
June 1, 2021 through June 30, 2021
|
88,690
|
$
|
45.21
|
35,258
|
964,742
|
(5
|
)
|
||||||||||||
July 1, 2021 through July 31, 2021
|
62,798
|
$
|
44.00
|
62,798
|
901,944
|
(6
|
)
|
||||||||||||
August 1, 2021 through August 31, 2021
|
-
|
$
|
-
|
-
|
901,944
|
(7
|
)
|
||||||||||||
September 1, 2021 through September 30, 2021
|
-
|
$
|
-
|
-
|
901,944
|
(8
|
)
|
||||||||||||
October 1, 2021 through October 31, 2021
|
-
|
$
|
-
|
-
|
901,944
|
(9
|
)
|
||||||||||||
November 1, 2021 through November 30, 2021
|
-
|
$
|
-
|
-
|
901,944
|
(10
|
)
|
||||||||||||
December 1, 2021 through December 31, 2021
|
49,943
|
$
|
51.90
|
49,943
|
852,001
|
(11
|
)
|
|
(1) |
All shares acquired were in open-market purchases, except for 55,430 shares, out of which 1,998 were repurchased in May 2021 and 53,432 in June 2021 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, 2021, had purchase limitations on the number of shares of up to 1,000,000 shares. As of April 30, 2021, the remaining
authorized shares to be purchased were 881,798.
|
|
(3) |
As of May 27, 2021, the authorization under the then-existing share repurchase plan expired.
|
|
(4) |
On March 18, 2021, the board of directors authorized the company to repurchase up to 1,000,000 shares of our outstanding common stock commencing on May 28, 2021, and continuing to May 27, 2022. As
of May 31, 2021, the remaining authorized shares to be purchased were 1,000,000.
|
|
(5) |
The share purchase authorization in place for the month ended June 30, 2021, had purchase limitations on the number of shares of up to 1,000,000 shares. As of June 30, 2021, the remaining
authorized shares to be purchased were 964,742.
|
|
(6) |
The share purchase authorization in place for the month ended July 31, 2021, had purchase limitations on the number of shares of up to 1,000,000 shares. As of July 31, 2021, the remaining
authorized shares to be purchased were 901,944.
|
|
(7) |
The share purchase authorization in place for the month ended August 31, 2021, had purchase limitations on the number of shares of up to 1,000,000 shares. As of August 31, 2021, the remaining
authorized shares to be purchased were 901,944.
|
|
(8) |
The share purchase authorization in place for the month ended September 30, 2021, had purchase limitations on the number of shares of up to 1,000,000 shares. As of September 30, 2021, the remaining
authorized shares to be purchased were 901,944.
|
|
(9) |
The share purchase authorization in place for the month ended October 31, 2021, had purchase limitations on the number of shares of up to 1,000,000 shares. As of October 31, 2021, the remaining
authorized shares to be purchased were 901,944.
|
|
(10) |
The share purchase authorization in place for the month ended November 30, 2021, had purchase limitations on the number of shares of up to 1,000,000 shares. As of November 30, 2021, the remaining
authorized shares to be purchased were 901,944.
|
|
(11) |
The share purchase authorization in place for the month ended December 31, 2021, had purchase limitations on the number of shares of up to 1,000,000 shares. As of December 31, 2021, the remaining
authorized shares to be purchased were 852,001.
|
Item 3. |
DEFAULTS UPON SENIOR SECURITIES
|
Item 4. |
MINE SAFETY DISCLOSURES
|
Item 5. |
OTHER INFORMATION
|
Exhibit
Number
|
|
Exhibit Description
|
|
|
|
|
ePlus inc. Amended and Restated Certificate of Incorporation, as
last amended November 9, 2021.
|
|
|
|
|
|
Amended and Restated Bylaws of ePlus inc., as of September 1, 2021. (Incorporated herein by reference to Exhibit 3.2 to our Quarterly Report on Form 10-Q
for the period ended September 30, 2021)
|
|
|
|
|
|
ePlus 2021 Employee Long-Term Incentive Plan (updated to reflect the
stock split effected December 13, 2021) as amended.
|
|
|
|
|
|
First Amended and Restated Credit Agreement, dated as of October 13, 2021, by and among ePlus Technology, inc., ePlus
Technology Services, inc., SLAIT Consulting, LLC, certain of ePlus inc. subsidiaries as guarantors, Wells Fargo Commercial Distribution Finance, LLC as administrative agent and the Lenders party thereto (Incorporated herein by reference
to Exhibit 10.1 to our Current Report in Form 8-K filed on October 19, 2021).
|
|
|
|
|
|
Guaranty and Security Agreement, dated as of October 13, 2021, by and among ePlus Technology, inc., ePlus
Technology Services, inc., SLAIT Consulting, LLC, certain future subsidiaries of ePlus inc., as guarantors, Wells Fargo Commercial Distribution Finance, LLC as administrative agent for the benefit of Secured Parties (Incorporated herein
by reference to Exhibit 10.2 to our Current Report on Form 8-K filed on October 19, 2021).
|
|
|
|
|
|
First Amended and Restated Collateralized Guaranty, dated as of October 13, 2021, by and among ePlus Group, inc. and Wells Fargo Commercial Distribution
Finance, LLC as agent for the benefit of Secured Parties (Incorporated herein by reference to Exhibit 10.3 to our Current Report on Form 8-K filed on October 19, 2021).
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First Amended and Restated Limited Guaranty, dated as of October 13, 2021, by and between ePlus inc. and Wells Fargo Commercial Distribution Finance, LLC
as agent for the benefit of Secured Parties (Incorporated herein by reference to Exhibit 10.4 to our Current Report on Form 8-K filed on October 19, 2021).
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ePlus inc. 2017 Non-Employee Director Long-Term Incentive Plan
(updated to reflect the stock split effected December 13, 2021) as amended.
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Certification of the Chief Executive Officer of ePlus inc. pursuant to the Securities Exchange Act Rules 13a-14(a) and 15d-14(a).
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Certification of the Chief Financial Officer of ePlus inc. pursuant to the Securities Exchange Act Rules 13a-14(a) and 15d-14(a).
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Certification of the Chief Executive Officer and Chief Financial Officer of ePlus inc. pursuant to 18 U.S.C. § 1350.
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101.INS
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Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document)
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101.SCH
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Inline XBRL Taxonomy Extension Schema Document
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101.CAL
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Inline XBRL Taxonomy Extension Calculation Linkbase Document
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101.DEF
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Inline XBRL Taxonomy Extension Definition Linkbase Document
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101.LAB
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Inline XBRL Taxonomy Extension Label Linkbase Document
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101.PRE
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Inline XBRL Taxonomy Extension Presentation Linkbase Document
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104
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Cover Page Interactive Data File (embedded within the Exhibit 101 Inline XBRL document)
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ePlus inc.
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Date: February 3, 2022
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/s/ MARK P. MARRON
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By: Mark P. Marron
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Chief Executive Officer and
President
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(Principal Executive Officer)
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Date: February 3, 2022
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/s/ ELAINE D. MARION
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By: Elaine D. Marion
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Chief Financial Officer
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(Principal Financial Officer)
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EPLUS INC.
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Signature:
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/s/ Erica S. Stoecker
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Name:
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Erica S. Stoecker
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Title:
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Secretary
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(i) |
designate Participants;
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(ii) |
determine the type or types of Awards to be granted to each Participant under the Employee Plan;
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(iii) |
determine the number of Shares to be covered by (or with respect to which payments, rights, or other matters are to be calculated in connection with) Awards;
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(iv) |
determine the terms and conditions of any Award;
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(v) |
Determine the effect of termination of employment on any Award;
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(vi) |
determine whether, to what extent, and under what circumstances Awards may be settled or exercised in cash, Shares, other securities, or other Awards, or canceled, forfeited, or
suspended, and the method or methods by which Awards may be settled, exercised, canceled, forfeited, or suspended;
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(vii) |
determine whether, to what extent, and under what circumstances cash, Shares, other securities, other Awards, and other amounts payable with respect to an Award under the Employee Plan
shall be deferred either automatically or at the election of the holder thereof or of the Committee;
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(viii) |
interpret and administer the Employee Plan and any instrument or agreement relating to, or Award made under, the Employee Plan;
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(ix) |
establish, amend, suspend, or waive such rules and guidelines;
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(x) |
reduce, eliminate or accelerate any restriction or vesting requirement, applicable to an Award at any time after the grant of an Award or to extend the time for exercising any Option (but
not beyond the original ten‐year term), Restricted Stock Awards or Restricted Stock Units;
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(xi) |
to determine the duration and purpose of leaves of absences which may be granted to a Participant without constituting termination of their employment for purposes of the Employee Plan,
which periods shall be no shorter than the periods generally applicable to Employees under the Company’s employment policies;
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(xii) |
to amend any Award Agreement or waive any provision, condition or limitation thereof; provided, however, that if any such amendment impairs a Participant’s rights or increases a
Participant’s obligations under his or her Award or creates or increases a Participant’s federal income tax liability with respect to an Award, such amendment shall also be subject to the Participant’s consent;
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(xiii) |
make any other determination and take any other action that the Committee deems necessary or desirable for the administration of the Employee Plan; and
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(xiv) |
correct any defect, supply any omission, or reconcile any inconsistency in the Employee Plan or any Award in the manner and to the extent it shall deem desirable to carry the Employee
Plan into effect.
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(a) |
Accounting for Awards. For purposes of this Section 4,
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(i) |
if an Award (other than a Dividend Equivalent) is denominated in Shares, the number of Shares covered by such Award, or to which such Award relates, shall be counted on the date of grant
of such Award against the aggregate number of Shares available for granting Awards under the Employee Plan; and
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(ii) |
Dividend Equivalents denominated in Shares and Awards not denominated in Shares but potentially payable in Shares shall be counted against the aggregate number of Shares available for
granting Awards under the Employee Plan in such amount and at such time as the Dividend Equivalents and such Awards are settled in Shares, provided, however, that Awards that operate in tandem with
(whether granted simultaneously with or at a different time from), or that are substituted for, other Awards may only be counted once against the aggregate number of Shares available, and the Committee shall adopt procedures, as it deems
appropriate, in order to avoid double counting. Any Shares that are delivered by the Company, and any Awards that are granted by, or become obligations of, the Company through the assumption by the Company or an Affiliate of, or in
substitution for, outstanding awards previously granted by an acquired company, shall not be counted against the Shares available for granting Awards under this Plan.
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(iii) |
Notwithstanding anything herein to the contrary, any Shares related to Awards which terminate by expiration, forfeiture, cancellation, or otherwise without the issuance of such Shares,
are settled in cash in lieu of Shares, or are exchanged with the Committee’s permission, prior to the issuance of Shares, for Awards not involving Shares, or shares withheld from an Award, or delivered by a Participant to satisfy minimum
tax withholding requirements, shall be available again for grant under this Plan. Shares subject to an Award under the Employee Plan may not again be made available for issuance under the Employee Plan if such Shares are: (x) Shares that
were subject to an Option or a stock‐settled Stock Appreciation Right and were not issued upon the net settlement or net exercise of such Option or Stock Appreciation Right, (y) Shares delivered to or withheld by the Company to pay the
exercise price under Options or Stock Appreciation Rights, or (z) Shares repurchased on the open market with the proceeds of an Option exercise.
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(i) |
Amount of Shares. The Committee may grant Options to a Participant in such amounts as the Committee may determine, subject to the limitations set
forth in Section 6(g)(v) of the Employee Plan. The number of Shares subject to an Option shall be set forth in the applicable Award Agreement.
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(ii) |
Exercise Price. The exercise price per Share under an Option shall be determined by the Committee; provided,
however, and except as provided in Section 4(d), that such exercise price shall not be less than 100% of the Fair Market Value of a Share on the date of grant of such Option. The exercise price of an Option, as determined by the
Committee pursuant to this Section 6(a)(ii), shall be set forth in the applicable Award Agreement.
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(iii) |
Option Term. Except as set forth in Section 6(a)(vii) below, the term of each Option shall not exceed ten (10) years from the date of grant.
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(iv) |
Timing of Exercise. Except as may otherwise be provided in the Award Agreement or as the Committee may otherwise determine, and subject to the
Committee’s authority under Section 3(a) to accelerate the vesting of an Award and to waive or amend any terms, conditions, limitations or restrictions of an Award, each Option granted under the Employee Plan shall be exercisable in whole
or in part, subject to the following conditions, limitations and restrictions:
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(A) |
20% of the Shares subject to an Option shall first become exercisable on the one‐year anniversary of the date of grant, 30% shall first become exercisable on the two‐year anniversary of
the date of grant and the remainder shall first become exercisable on the three‐year anniversary of the date of grant;
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(B) |
All Options subject to the Award shall become immediately exercisable upon a Change in Control;
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(C) |
All Options granted to a Participant shall become immediately exercisable upon the death or Disability of the Participant and must be exercised, if at all, within one year after such
Participant’s death or Disability, but in no event after the date such Options would otherwise lapse. Options of a deceased Participant may be exercised only by the estate of the Participant or by the person given authority to exercise such
Options by the Participant’s will or by operation of law. In the event an Option is exercised by the executor or administrator of a deceased Participant, or by the person or persons to whom the Option has been transferred by the
Participant’s will or the applicable laws of descent and distribution, the Company shall be under no obligation to deliver Shares thereunder unless and until the Company is satisfied that the person or persons exercising the Option is or
are the duly appointed executor(s) or administrator(s) of the deceased Participant or the person to whom the Option has been transferred by the Participant’s will or by the applicable laws of descent and distribution;
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(D) |
Upon an Employee’s Retirement, all Options that have not become exercisable as of the date of Retirement shall be forfeited and to the extent that Options have become exercisable as of
such date, such Options must be exercised, if at all, within one year after Retirement, but in no event after the date such Options would otherwise lapse; and
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(E) |
The Option shall lapse upon termination of employment for Cause. Except as otherwise provided in Section 6(a)(vii) or Section 6(g)(xii), upon an Employee’s termination of employment, for
any reason other than death, Disability, Retirement or Cause, all Options that have not become exercisable as of the date of termination shall be forfeited and to the extent that Options have become exercisable as of such date, such Options
must be exercised, if at all, within 90 days after such termination of employment.
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(v) |
Payment of Exercise Price. The exercise price shall be paid in full when the Option is exercised and stock certificates shall be registered and
delivered only upon receipt of such payment. Unless otherwise provided by the Committee, payment of the exercise price may be made in cash or by certified check, bank draft, wire transfer, or postal or express money order or any other form
of consideration approved by the Committee. In addition, at the discretion of the Committee, payment of all or a portion of the exercise price may be made by
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(A) |
Delivering a properly executed exercise notice to the Company, or its agent, together with irrevocable instructions to a broker to deliver promptly to the Company the amount of sale
proceeds with respect to the portion of the Shares to be acquired upon exercise having a Fair Market Value on the date of exercise equal to the sum of the applicable portion of the exercise price being so paid and appropriate tax
withholding;
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(B) |
Tendering (actually or by attestation) to the Company previously acquired Shares that have been held by the Participant for at least six months having a Fair Market Value on the day prior
to the date of exercise equal to the applicable portion of the exercise price being so paid; or
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(C) |
any combination of the foregoing.
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(vi) |
Incentive Stock Options. The terms of any Incentive Stock Option granted under the Employee Plan shall be designed to comply in all respects with
the provisions of Section 422 of the Code, or any successor provision thereto, and any regulations promulgated thereunder which are hereby incorporated by reference. In the event that any provision of the Employee Plan would contravene the
Code rules that apply to Incentive Stock Options, such Plan provision shall not apply to Incentive Stock Options. Incentive Stock Options granted under the Employee Plan shall be subject to the following additional conditions, limitations
and restrictions:
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(A) |
Timing of Grant. No Incentive Stock Option shall be granted under the Employee Plan after the 10‐year anniversary of the date the Employee Plan is
adopted by the Board.
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(B) |
Amount of Award. The aggregate Fair Market Value of Shares (determined as of the time of grant) with respect to which such Incentive Stock Options
are exercisable for the first time by the Participant during any calendar year (under all plans of the Company and any subsidiary) may not exceed $100,000, taking Incentive Stock Option into account in the order in which they were granted.
To the extent an Option initially designated as an Incentive Stock Option exceeds the value limit of this Section or otherwise fails to satisfy the requirements applicable to Incentive Stock Options, it shall be deemed a Non‐ Qualified
Stock Option and shall otherwise remain in full force and effect.
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(C) |
Timing of Exercise. In the event that the Committee exercises its discretion to permit an Incentive Stock Option to be exercised by a Participant
more than three months after the Participant’s termination of employment and such exercise occurs more than three months after such Participant has ceased being an Employee (or more than 12 months after the Participant is Disabled or dies),
such Incentive Stock Option shall thereafter be treated as a Non‐Qualified Stock Option for all purposes.
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(D) |
Transfer Restrictions. In no event shall the Committee permit an Incentive Stock Option to be transferred by a Participant other than by will or
the laws of descent and distribution, and any Incentive Stock Option granted hereunder shall be exercisable, during his or her lifetime, only by the Participant.
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(E) |
Ten Percent Owners. No Incentive Stock Option shall be granted to any individual who, at the date of grant, owns stock possessing more than ten
percent of the total combined voting power of all classes of stock of the Company or any Affiliate unless the exercise price per share of such Option is at least 110% of the Fair Market Value per Share at the date of grant and the Option
expires no later than five years after the date of grant.
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(vii) |
Extension of Option Term for Blackouts. At its discretion, the Committee may extend the term of any Option beyond its earlier termination pursuant
to Section 6(a)(iii),(iv)(C), (iv)(D) or (iv)(E) if the Company had prohibited the participant from exercising the Option prior to termination or expiration in order to comply with applicable Federal, state, local or foreign law, provided
that such extension may not exceed the earlier of 30 days from the date such prohibition is lifted or ten years after the Option grant date.
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(viii) |
No Deferral Feature. No Option shall provide for any feature for the deferral of compensation other than the deferral of recognition of income
until the exercise or disposition of the Option.
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(i) |
Grant Price. Shall be determined by the Committee, provided, however, and except as provided in Section
7, that such price shall not be less than 100% of the Fair Market Value of one Share on the date of grant of the Stock Appreciation Right, except that if a Stock Appreciation Right is at any time granted in tandem with an Option, the grant
price of the Stock Appreciation Right shall not be less than the exercise price of such Option.
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(ii) |
Term. The term of each Stock Appreciation Right shall not exceed ten (10) years from the date of grant.
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(iii) |
Time and Method of Exercise. The Committee shall establish in the applicable Award Agreement the time or times at which a Stock Appreciation Right
may be exercised in whole or in part.
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(iv) |
No Deferral Feature. No Stock Appreciation Right shall provide for any feature for the deferral of compensation other than the deferral of
recognition of income until the exercise or disposition of the Stock Appreciation Right.
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(v) |
Reduction in the Underlying Option Shares. Upon any exercise of a tandem Stock Appreciation Right, the number of shares of Common Stock for which any related Option shall be
exercisable shall be reduced by the number of shares for which the Stock Appreciation Right has been exercised. The number of shares of Common Stock for which a tandem Stock Appreciation Right shall be exercisable shall be reduced upon any
exercise of any related Option by the number of shares of Common Stock for which such Option has been exercised.
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(i) |
Restrictions. Shares of Restricted Stock and Restricted Stock Units shall be subject to such vesting conditions and other restrictions as the
Committee may establish in the applicable Award Agreement (including, without limitation, any limitation on the right to vote a Share of Restricted Stock or the right to receive any dividend or other right), which restrictions may lapse
separately or in combination at such time or times, in such installments or otherwise, as the Committee may deem appropriate. The Committee may remove any vesting condition or other restriction or reduce any restriction period applicable to
a particular Restricted Stock Award or, subject to compliance with Code Section 409A, a particular grant of Restricted Stock Units. Unrestricted Shares, evidenced in such manner as the Committee shall deem appropriate, shall be delivered to
the holder of Restricted Stock promptly after such restrictions have lapsed. Except as otherwise provided in an Award Agreement or any special Plan document governing an Award, the Participant shall have all of the rights of a shareholder
with respect to the Restricted Stock, and the Participant shall have none of the rights of a stockholder with respect to Restricted Stock Units until such time as Shares are paid in settlement of the Restricted Stock Units. Unless otherwise
provided in the applicable Award Agreement, Awards of Restricted Stock will be entitled to full dividend rights and any dividends paid thereon will be paid or distributed to the holder no later than the end of the calendar year in which the
dividends are paid to shareholders or, if later, the 15th day of the third month following the date the dividends are paid to shareholders (or shall otherwise be in compliance with, or exempt from, Code Section 409A).
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(ii) |
Registration. Any Restricted Stock or Restricted Stock Units granted under the Employee Plan may be evidenced in such manner as the Committee may
deem appropriate, including, without limitation, book‐entry registration or issuance of a stock certificate or certificates. In the event any stock certificate is issued in respect of Shares of Restricted Stock granted under the Employee
Plan, such certificate shall be registered in the name of the Participant and shall bear an appropriate legend referring to the terms, conditions, and restrictions applicable to such Restricted Stock.
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(iii) |
Forfeiture. Upon termination of employment during the applicable restriction period for any reason other than death or Disability, except as
determined otherwise by the Committee, all Shares of Restricted Stock and all Restricted Stock Units still, in either case, subject to restriction shall be forfeited and reacquired by the Company.
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(iv) |
Compliance with Section 409A. Each Restricted Stock Unit shall comply with the requirements of subsection (a) of Section 409A (to constitute
either a short‐term deferral or otherwise be excluded from Section 409A, or to meet the requirements of Section 409A applicable to a deferral of compensation) and be implemented in accordance with such requirements.
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(i) |
may be denominated or payable in cash, Shares (including, without limitation, Restricted Stock), other securities, or other Awards; and
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(ii) |
shall confer on the holder thereof rights valued as determined by the Committee and payable to, or exercisable by, the holder of the Performance Award, in whole or in part, upon the
achievement of such performance goals during such Performance Periods as the Committee shall establish.
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(i) |
No Cash Consideration for Awards. Awards shall be granted for no cash consideration or for such minimal cash consideration as may be required by
applicable law.
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(ii) |
Awards may be Granted Separately or Together. Awards may, in the discretion of the Committee, be granted either alone or in addition to, in tandem
with, or in substitution for any other Award or any award granted under any other plan of the Company or any Affiliate. Awards granted in addition to or in tandem with other Awards, or in addition to or in tandem with awards granted under
any other plan of the Company or any Affiliate, may be granted either at the same time as or at a different time from the grant of such other Awards; provided, however, that any tandem Stock Appreciation Right that relates to an Incentive
Stock Option must be granted at the same time the Incentive Stock Option is granted.
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(iii) |
Forms of Payment under Awards. Subject to the terms of the Employee Plan and of any applicable Award Agreement, payments or transfers to be made
by the Company or an Affiliate upon the grant, exercise, or payment of an Award may be made in such form or forms as the Committee shall determine, including, without limitation, cash, Shares, rights in or to Shares issuable under the Award
or other Awards, other securities, or other Awards, or any combination thereof, and may be made in a single payment or transfer, in installments, or on a deferred basis, in each case in accordance with rules and procedures established by
the Committee. Such rules and procedures may include, without limitation, provisions for the payment or crediting of reasonable interest on installment or deferred payments or the grant or crediting of Dividend Equivalents in respect of
installment or deferred payments.
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(iv) |
Limits on Transfer of Awards. Except as provided by the Committee, no Award and no right under any such Award, shall be assignable, alienable,
saleable, or transferable by a Participant otherwise than by will or by the laws of descent and distribution provided, however, that, if so determined by the Committee, a Participant may, in the
manner established by the Committee, designate a beneficiary or beneficiaries to exercise the rights of the Participant with respect to any Award upon the death of the Participant. Each designation will revoke all prior designations by the
same Participant and shall be effective only when filed by the Participant in writing with the Company during the Participant’s lifetime. Each Award, and each right under any Award, shall be exercisable, during the Participant’s lifetime,
only by the Participant or, in the case of Participant’s Disability, by the Participant’s guardian or legal representative. No Award and no right under any such Award, may be pledged, alienated, attached, or otherwise encumbered, and any
purported pledge, alienation, attachment, or encumbrance thereof shall be void and unenforceable against the Company or any Affiliate.
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(v) |
Per‐Person Limitation on Options and SARs. The number of Shares with respect to which Options and Stock Appreciation Rights may be granted under
the Employee Plan during any calendar year to an individual Participant shall not exceed two hundred thousand (200,000) Shares, subject to adjustment as provided in Section 7.
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(vi) |
Per‐Person Limitation on Certain Awards. Other than Options and Stock Appreciation Rights, the aggregate number of Shares with respect to which
Restricted Stock, Restricted Stock Units, Performance Awards and Other Stock‐Based Awards may be granted under the Employee Plan during any calendar year to an individual Participant shall not exceed two hundred thousand (200,000) Shares,
subject to adjustment as provided in Section 7.
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(vii) |
Conditions and Restrictions upon Securities Subject to Awards. The Committee may provide that the Shares issued upon exercise of an Option or
Stock Appreciation Right or otherwise subject to or issued under an Award shall be subject to such further agreements, restrictions, conditions or limitations as the Committee in its discretion may specify prior to the exercise of such
Option or Stock Appreciation Right or the grant, vesting or settlement of such Award, including without limitation, conditions on vesting or transferability and forfeiture or repurchase provisions or provisions on payment of taxes arising
in connection with an Award. Without limiting the foregoing, such restrictions may address the timing and manner of any resales by the Participant or other subsequent transfers by the Participant of any Shares issued under an Award,
including without limitation: (A) restrictions under an insider trading policy or pursuant to applicable law, (B) restrictions designed to delay and/or coordinate the timing and manner of sales by Participant and holders of other Company
equity compensation arrangements, (C) restrictions as to the use of a specified brokerage firm for such resales or other transfers and (D) provisions requiring Shares to be sold on the open market or to the Company in order to satisfy tax
withholding or other obligations.
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(viii) |
Share Certificates. All Shares or other securities delivered under the Employee Plan pursuant to any Award or the exercise thereof shall be
subject to such stop transfer orders and other restrictions as the Committee may deem advisable under the Employee Plan or the rules, regulations, and other requirements of the Securities and Exchange Commission, any stock exchange or
automated quotation system upon which such Shares or other securities are then listed, quoted, or traded, and any applicable Federal, state, or local securities laws, and the Committee may cause a legend or legends to be put on any such
certificates or issue instructions to the transfer agent to make appropriate reference to such restrictions.
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(ix) |
Suspension of Exercise. The Company reserves the right from time to time to suspend the exercise of any stock option or stock appreciation right
where such suspension is deemed by the Company as necessary or appropriate for corporate purposes.
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(x) |
Change in Control. Notwithstanding anything to the contrary in the Employee Plan, any conditions or restrictions on Restricted Stock shall lapse
upon a Change in Control.
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(xi) |
Award Agreement. Each grant of an Award under the Employee Plan will be evidenced by an Award Agreement. Such document will contain such
provisions as the Committee may in its discretion deem advisable, provided that such provisions are not inconsistent with any of the provisions of the Employee Plan. An Award Agreement may provide
that if a Participant fails to execute it within a specified period, then the Award shall be null and void.
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(xii) |
Special Forfeiture Provision. If the Committee, in its discretion, determines and the applicable Award Agreement so provides, a Participant who,
without prior written approval of the Company, enters into any employment or consultation arrangement (including service as an agent, partner, stockholder, consultant, officer or director) to any entity or person engaged in any business in
which the Company or its affiliates is engaged which, in the sole judgment of the Company, is competitive with the Company or any Affiliate, (i) shall forfeit all rights under any outstanding Option or Stock Appreciation Right and shall
return to the Company the amount of any profit realized upon the exercise, within such period as the Committee may determine, of any Option or Stock Appreciation Right, and (ii) shall forfeit and return to the Company all Shares of
Restricted Stock and other Awards which are not then vested or which vested but remain subject to the restrictions imposed by this Section 6(g)(xii), as provided in the Award Agreement.
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(xiii) |
No Repricing. Repricing of Options or Stock Appreciation Rights shall not be permitted without stockholder approval. For this purpose, a “repricing” means any of the following (or any other action that has the same effect as any of the following): (A) changing the terms of an Option or Stock Appreciation Right to lower its exercise price
(other than pursuant to Section 7); (B) any other action that is treated as a “repricing” under generally accepted accounting principles; and (C) repurchasing for cash or canceling an Option or Stock Appreciation Right at a time when its
exercise price is greater than the Fair Market Value of the underlying stock in exchange for another Award, unless the cancellation and exchange occurs in connection with an event set forth in Section 7. Such cancellation and exchange would
be considered a “repricing” regardless of whether it is treated as a “repricing” under generally accepted accounting principles and regardless of whether it is voluntary on the part of the Participant.
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(xiv) |
Employment with Affiliate or Successor. Employment by the Company, any Affiliate or a successor to the Company shall be considered employment by
the Company for all purposes of any Award. If the Award is assumed or a new award is substituted therefore in any corporate reorganization (including, but not limited to, any transaction of the type referred to in Section 424(a) of the
Code), employment by such assuming or substituting corporation or by a parent corporation or subsidiary thereof shall be considered for all purposes of the Award to be employment by the Company.
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(i) |
the number and type of Shares or other securities which thereafter may be made the subject of Awards including the limit specified in Section 4(a) regarding the number of shares that may
be granted in the form of Restricted Stock, Restricted Stock Units, Performance Awards, or Other Stock‐Based Awards;
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(ii) |
the number and type of Shares or other securities subject to outstanding Awards;
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(iii) |
the number and type of Shares or other securities specified as the annual per‐participant limitation under Section 6(g)(v) and (vi);
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(iv) |
the grant, purchase, or exercise price with respect to any Award, or, if deemed appropriate, make provision for a cash payment to the holder of an outstanding Award; and
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(v) |
other value determinations applicable to outstanding awards.
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(i) |
provide that Awards will be settled in cash rather than Stock;
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(ii) |
provide that Awards will be assumed by another party to a transaction or otherwise be equitably converted or substituted in connection with such transaction;
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(iii) |
provide that performance targets and performance periods for Performance Awards will be modified;
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(iv) |
provide, upon written notice to Participants, that all Awards that are currently exercisable must be exercised within the time period specified in the notice and that all Awards not
exercised as of the expiration of such period shall be terminated without consideration; provided, however, that the Committee (or successor board of directors) may provide, in its discretion, that, for purposes of this subsection, all
outstanding Awards are currently exercisable, whether or not vested;
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(v) |
cancel any or all Awards and, in consideration of such cancellation, pay to each Participant an amount in cash with respect to each Share issuable under an Award equal to the difference
between the Fair Market Value of such Share on such date (or, if greater, the value per Share of the consideration received by holders of Shares as a result of such merger, consolidation, reorganization or sale) and the Exercise Price; or
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(vi) |
any combination of the foregoing.
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(i) |
increase the total number of Shares available for Awards under the Employee Plan, except as provided in Section 7 hereof; or
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(ii) |
except as provided in Section 7, permit Options, Stock Appreciation Rights, or other Stock‐Based Awards encompassing rights to purchase Shares to be repriced, replaced, or regranted
through cancellation, or by lowering the exercise price of a previously granted Option or the grant price of a previously granted Stock Appreciation Right, or the purchase price of a previously granted Other Stock‐Based Award.
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(i) |
obtaining any approvals from governmental agencies that the Company determines are necessary or advisable; and
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(ii) |
completion of any registration or other qualification of the Shares under any applicable national or foreign law or ruling of any governmental body that the Company determines to be
necessary or advisable or at a time when any such registration or qualification is not current, has been suspended or otherwise has ceased to be effective.
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1. |
I have reviewed this quarterly report on Form 10-Q of ePlus inc.;
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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;
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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;
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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:
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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;
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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;
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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
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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
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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):
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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
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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.
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/s/ MARK P. MARRON
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Mark P. Marron
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Chief Executive Officer and President
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(Principal Executive Officer)
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1. |
I have reviewed this quarterly report on Form 10-Q of ePlus inc.;
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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;
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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;
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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;
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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;
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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
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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
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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
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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.
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/s/ ELAINE D. MARION
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Elaine D. Marion
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Chief Financial Officer
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(Principal Financial Officer)
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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
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b) |
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of ePlus inc.
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/s/ MARK P. MARRON
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Mark P. Marron, Chief Executive Officer
and President
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(Principal Executive Officer)
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/s/ ELAINE D. MARION
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Elaine D. Marion, Chief Financial Officer
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(Principal Financial Officer)
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