EX-99.2 2 ef20051627_ex99-2.htm EXHIBIT 99.2
Exhibit 99.2

Unaudited Pro Forma Condensed Consolidated Financial Information

Sale of HoldCo

On June 30, 2025, ePlus inc. (“we”, “our”, “us”, or “ePlus”) completed (the “Closing”) the previously announced sale of Expo Holdings, LLC (“HoldCo”), a wholly-owned subsidiary of ePlus, thereby selling ePlus’ domestic subsidiaries comprising the majority of our financing business segment (the “Financing Business”), to Marlin Leasing Corporation (d/b/a PEAC Solutions) (the “Buyer” and such transaction being the “Transaction”).

We completed the Transaction pursuant to the Membership Interest Purchase Agreement (the “Purchase Agreement”) dated June 20, 2025, between Marlin Lease Corporation, ePlus and HoldCo. In the Transaction, the Buyer paid initial consideration of approximately $180.1 million in cash to us, which amount was the sum of (i) the estimated book value of HoldCo as of March 31, 2025, plus (ii) a closing premium payment of approximately $2.4 million and less (iii) unpaid transaction expenses as of immediately prior to the Closing (together, the “Initial Consideration”). The Initial Consideration is subject to a customary post-Closing adjustment process based on the book value of the assets associated with HoldCo as of the effective time of the Closing (as adjusted, the “Purchase Price”). In addition to the Purchase Price, we may earn and receive Holdback Premium (as defined below) payments and two different types of Earn-Out (as defined below) payments based on the post-Closing performance of the HoldCo Group (as defined below), as operated by the Buyer.

The Financing Business, which provides financing of information technology equipment, software and related services, is conducted by certain direct and indirect subsidiaries of ePlus (the “Operating Subsidiaries”), including ePlus Group, inc. and ePlus Government, inc., each a Commonwealth of Virginia corporation and a wholly-owned subsidiary of ePlus. In order to sell the business to the Buyer in the Transaction, we conducted an internal reorganization (the “Reorganization”) whereby ownership of the Operating Subsidiaries was transferred to HoldCo. Additionally, ownership of certain subsidiaries of the Operating Subsidiaries was transferred from the Operating Subsidiaries to ePlus. The resulting group of HoldCo and its subsidiaries is referred to as the “HoldCo Group”.

Upon the Closing of the Transaction, the Buyer purchased 100% of the membership interests of HoldCo from us, thereby purchasing our domestic subsidiaries comprising the majority of the Financing Business. In connection with the Transaction and the Purchase Agreement, we entered into a transition services agreement with the Buyer, pursuant to which the Buyer and us will provide certain transition services to us and the Buyer, respectively, on a post-Closing basis.

We may receive aggregate post-Closing cash payments of up to $3.0 million (the “Holdback Premium”) based on the achievement of customer lease receivable originations targets by HoldCo (i) from the Closing Date to the 18-month anniversary of the Closing Date and (ii) from the 18-month anniversary of the Closing Date to the 30-month anniversary of the Closing Date.

The two types of earn-out payments that are potentially payable to us are based on (i) the volume of originations of certain types of lease receivables (the “Lease Originations Earn-Out”) and (ii) the profitability of certain lease receivables originated either to U.S. federal governmental entities or for which a prime contractor acting on behalf of a government entity is the obligor  (the “Transaction Gains Earn-Out,” and together with the Lease Originations Earn-Out, the “Earn-Outs”). Each of the Earn-Outs will be measured for each of the first three consecutive twelve-month periods following the Closing. The Lease Originations Earn-Out is capped at $10.0 million in aggregate for all three post-Closing years. The Transaction Gains Earn-Out does not have a maximum cap.

The following unaudited pro forma consolidated financial statements are presented based on the Initial Consideration. Pursuant to the Purchase Agreement, the Initial Consideration is subject to a customary post-Closing adjustment process based on the book value of the assets associated with HoldCo as of the effective time of the Closing (the “Post-Closing Adjustment”). Additionally, as described in the accompanying notes to the following unaudited pro forma consolidated financial statements, we have made a number of preliminary estimates in preparing and presenting the pro forma financial information and our final accounting and actual results may differ materially from these preliminary estimates. We undertake no obligation to update the following unaudited pro forma consolidated financial statements at a future date for any reason, including when the Post-Closing Adjustment is finalized, upon the occurrence of future events or when we finalize the preliminary estimates for the matters discussed in the notes to the unaudited pro forma consolidated financial statements.

Basis of presentation

The following unaudited pro forma consolidated financial statements were derived from our historical consolidated financial statements, which were prepared in accordance with United States generally accepted accounting principles (“US GAAP”). The pro forma statements should be read in conjunction with our historical consolidated financial statements, the accompanying notes to those financial statements, and Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended March 31, 2025 filed with the Securities and Exchange Commission on May 22, 2025.

Beginning with the quarter ending June 30, 2025, the historical results of HoldCo will be reflected in our consolidated financial statements as discontinued operations.

The unaudited pro forma statements of income have been prepared as if the Transaction occurred on April 1, 2022 and the unaudited balance sheet has been prepared as if the Transaction occurred on March 31, 2025.

The “HoldCo Discontinued Operations” columns in the unaudited pro forma consolidated financial statements were derived from our consolidated financial statements included in our Annual Report on Form 10-K for the year ended March 31, 2025.

We believe that the adjustments included within the “HoldCo Discontinued Operations” columns of the unaudited pro forma consolidated financial statements are consistent with the guidance for discontinued operations under US GAAP. Our current estimates are preliminary and could change as we finalize our accounting for discontinued operations, which will be reported in future filings. Our adjustments did not include any allocation of our corporate costs or other costs that did not transfer to HoldCo upon disposition. Our adjustments also do not include any fees that may be earned or incurred under the transition services agreement as we are unable to forecast the fees that may be due or payable under this agreement.

The unaudited pro forma condensed consolidated financial statements are presented based on assumptions, adjustments, and currently available information and are intended for illustrative and informational purposes only. The unaudited pro forma condensed consolidated financial statements are not intended to reflect or be necessarily indicative of what our results of operations or financial condition would have been had the divestiture been completed on the dates assumed. In addition, it is not necessarily indicative of our future results of operations or financial condition. Actual adjustments may differ materially from the information presented.

ePlus inc. and Subsidiaries
Unaudited Pro Forma Consolidated Balance Sheets
As of March 31, 2025
(in thousands, except per share amounts)

   
As Reported
    
HoldCo Discontinued Operations {a}
    
Proforma Adjustments
  
 
  
Pro Forma Continuing Operations
  
ASSETS
                  
 
      
                   
 
      
Current assets:
                  
 
      
Cash and cash equivalents
  
$
389,375
    
$
-
    
$
153,590
  
 {b}
  
$
542,965
  
Accounts receivable—trade, net
    
517,114
      
(189
)
    
-
  
 
    
516,925
  
Accounts receivable—other, net
    
53,803
      
(34,421
)
    
-
  
 
    
19,382
  
Inventories
    
120,440
      
-
      
-
  
 
    
120,440
  
Financing receivables—net, current
    
169,025
      
(168,392
)
    
-
  
 
    
633
  
Deferred costs
    
66,769
      
-
      
-
  
 
    
66,769
  
Other current assets
    
47,264
      
(19,397
)
    
(2,173
)
 {c}
    
25,694
  
Total current assets
    
1,363,790
      
(222,399
)
    
151,417
  
 
    
1,292,808
  
                         
 
        
Financing receivables and operating leases—net
    
127,518
      
(126,408
)
    
-
  
 
    
1,110
  
Deferred tax asset
    
3,658
      
-
      
-
  
 
    
3,658
  
Property, equipment, and other assets—net
    
104,974
      
(7,427
)
    
10,138
  
 {d}
    
107,685
  
Goodwill
    
202,858
      
-
      
-
  
 
    
202,858
  
Other intangible assets—net
    
82,007
      
-
      
-
  
 
    
82,007
  
TOTAL ASSETS
  
$
1,884,805
    
$
(356,234
)
  
$
161,555
  
 
  
$
1,690,126
  
                         
 
        
LIABILITIES AND STOCKHOLDERS’ EQUITY
                        
 
        
                         
 
        
LIABILITIES
                        
 
        
                         
 
        
Current liabilities:
                        
 
        
Accounts payable
  
$
451,734
    
$
(141,135
)
  
$
-
  
 
  
$
310,599
  
Accounts payable—floor plan
    
89,527
      
-
      
-
  
 
    
89,527
  
Salaries and commissions payable
    
45,031
      
(2,812
)
    
-
  
 
    
42,219
  
Deferred revenue
    
152,780
      
(149
)
    
-
  
 
    
152,631
  
Non-recourse notes payable—current
    
27,456
      
(27,456
)
    
-
  
 
    
-
  
Other current liabilities
    
31,355
      
(8,892
)
    
219
  
 {e}
    
22,682
  
Total current liabilities
    
797,883
      
(180,444
)
    
219
  
 
    
617,658
  
                         
 
        
Non-recourse notes payable - long-term
    
11,317
      
(11,317
)
    
-
  
 
    
-
  
Deferred tax liability—long-term
    
1,454
      
(7,637
)
    
-
  
 
    
(6,183
)
Other liabilities
    
96,528
      
(1,229
)
    
-
  
 
    
95,299
  
TOTAL LIABILITIES
    
907,182
      
(200,627
)
    
219
  
 
    
706,774
  
                         
 
        
COMMITMENTS AND CONTINGENCIES
    
-
      
-
      
-
  
 
    
-
  
                         
 
        
STOCKHOLDERS’ EQUITY
                        
 
        
                         
 
        
Preferred stock, $0.01 per share par value; 2,000 shares authorized;
none outstanding
    
-
      
-
      
-
  
 
    
-
  
Common stock, $0.01 per share par value; 50,000 shares authorized;
26,526 outstanding at March 31, 2025
    
276
      
-
      
-
  
 
    
276
  
Additional paid-in capital
    
193,698
      
-
      
-
  
 
    
193,698
  
Treasury stock, at cost, 1,056 shares at March 31, 2025
    
(70,748
)
    
-
      
-
  
 
    
(70,748
)
Retained earnings
    
850,956
      
-
      
5,729
  
 {f}
    
856,685
  
Accumulated other comprehensive income—foreign currency translation adjustment
    
3,441
      
-
      
-
  
 
    
3,441
  
Total Stockholders’ Equity
    
977,623
      
-
      
5,729
  
 
    
983,352
  
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
  
$
1,884,805
    
$
(200,627
)
  
$
5,948
  
 
  
$
1,690,126
  

See notes to unaudited pro forma condensed consolidated financial statements.
 
ePlus inc. and Subsidiaries
Unaudited Pro Forma Condensed Consolidated Statement of Operations
Year ended March 31, 2025
(in thousands)

   
As Reported
    
HoldCo Discontinued Operations {g}
    
Pro Forma Continuing Operations
  
Net sales
                  
Product
  
$
1,668,412
    
$
(59,222
)
  
$
1,609,190
  
Services
    
400,377
      
-
      
400,377
  
Total
    
2,068,789
      
(59,222
)
    
2,009,567
  
Cost of sales
                        
Product
    
1,241,115
      
(5,625
)
    
1,235,490
  
Services
    
258,553
      
-
      
258,553
  
Total
    
1,499,668
      
(5,625
)
    
1,494,043
  
                         
Gross profit
    
569,121
      
(53,597
)
    
515,524
  
                         
Selling, general, and administrative
    
399,744
      
(14,343
)
    
385,401
  
Depreciation and amortization
    
25,753
      
-
      
25,753
  
Interest and financing costs
    
2,211
      
(2,211
)
    
-
  
Operating expenses
    
427,708
      
(16,554
)
    
411,154
  
                         
Operating income
    
141,413
      
(37,043
)
    
104,370
  
                         
Other income (expense), net
    
7,426
      
(988
)
    
6,438
  
                         
Earnings before tax
    
148,839
      
(38,031
)
    
110,808
  
                         
Provision for income taxes
    
40,861
      
(9,894
)
    
30,967
  
                         
Net earnings from continuing operations
  
$
107,978
    
$
(28,137
)
  
$
79,841
  
                         
Net earnings from continuing operations per common share—basic
  
$
4.07
    
$
(1.06
)
  
$
3.01
  
Net earnings from continuing operations per common share—diluted
  
$
4.05
    
$
(1.06
)
  
$
2.99
  

See notes to unaudited pro forma condensed consolidated financial statements.
 
ePlus inc. and Subsidiaries
Unaudited Pro Forma Condensed CONSOLIDATED STATEMENTS OF OPERATIONS
Year ended March 31, 2024
(in thousands)

   
As Reported
    
HoldCo Discontinued Operations {g}
    
Pro Forma Continuing Operations
  
Net sales
                  
Product
  
$
1,933,225
    
$
(48,787
)
  
$
1,884,438
  
Services
    
292,077
      
-
      
292,077
  
Total
    
2,225,302
      
(48,787
)
    
2,176,515
  
Cost of sales
                        
Product
    
1,493,293
      
(6,689
)
    
1,486,604
  
Services
    
181,216
      
-
      
181,216
  
Total
    
1,674,509
      
(6,689
)
    
1,667,820
  
                         
Gross profit
    
550,793
      
(42,098
)
    
508,695
  
                         
Selling, general, and administrative
    
367,734
      
(12,178
)
    
355,556
  
Depreciation and amortization
    
21,025
      
(74
)
    
20,951
  
Interest and financing costs
    
3,777
      
(2,348
)
    
1,429
  
Operating expenses
    
392,536
      
(14,600
)
    
377,936
  
                         
Operating income
    
158,257
      
(27,498
)
    
130,759
  
                         
Other income (expense), net
    
2,836
      
(1,404
)
    
1,432
  
                         
Earnings before tax
    
161,093
      
(28,902
)
    
132,191
  
                         
Provision for income taxes
    
45,317
      
(8,247
)
    
37,070
  
                         
Net earnings from continuing operations
  
$
115,776
    
$
(20,655
)
  
$
95,121
  
                         
Net earnings from continuing operations per common share—basic
  
$
4.35
    
$
(0.78
)
  
$
3.57
  
Net earnings from continuing operations per common share—diluted
  
$
4.33
    
$
(0.77
)
  
$
3.56
  

See notes to unaudited pro forma condensed consolidated financial statements.
 
ePlus inc. and Subsidiaries
Unaudited Pro Forma Condensed CONSOLIDATED STATEMENTS OF OPERATIONS
Year ended March 31, 2023
(in thousands)

   
As Reported
    
HoldCo Discontinued Operations {g}
    
Pro Forma Continuing Operations
  
Net sales
                  
Product
  
$
1,803,275
    
$
(51,614
)
  
$
1,751,661
  
Services
    
264,443
      
-
      
264,443
  
Total
    
2,067,718
      
(51,614
)
    
2,016,104
  
Cost of sales
                        
Product
    
1,379,500
      
(9,110
)
    
1,370,390
  
Services
    
170,694
      
-
      
170,694
  
Total
    
1,550,194
      
(9,110
)
    
1,541,084
  
                         
Gross profit
    
517,524
      
(42,504
)
    
475,020
  
                         
Selling, general, and administrative
    
333,520
      
(13,621
)
    
319,899
  
Depreciation and amortization
    
13,709
      
(110
)
    
13,599
  
Interest and financing costs
    
4,133
      
(1,234
)
    
2,899
  
Operating expenses
    
351,362
      
(14,965
)
    
336,397
  
                         
Operating income
    
166,162
      
(27,539
)
    
138,623
  
                         
Other income (expense), net
    
(3,188
)
    
(2,352
)
    
(5,540
)
                         
Earnings before tax
    
162,974
      
(29,891
)
    
133,083
  
                         
Provision for income taxes
    
43,618
      
(7,946
)
    
35,672
  
                         
Net earnings from continuing operations
  
$
119,356
    
$
(21,945
)
  
$
97,411
  
                         
Net earnings from continuing operations per common share—basic
  
$
4.49
    
$
(0.83
)
  
$
3.66
  
Net earnings from continuing operations per common share—diluted
  
$
4.48
    
$
(0.82
)
  
$
3.66
  

See notes to unaudited pro forma condensed consolidated financial statements.
 
ePlus inc. and Subsidiaries
NOTES TO UNAUDITED PRO FORMA CONDENSED FINANCIAL INFORMATION

{a} Reflects the elimination of the assets and liabilities of the HoldCo business that were sold under the terms of the Transaction.

{b} Reflects our estimated net cash proceeds equal to the Initial Consideration of $180.1 million, less cash held by HoldCo on March 31, 2025, of $22.5 million, and less our estimate for transaction expenses incurred during our quarter ended June 30, 2025, of $4.0 million. Our final net cash proceeds may differ materially from the amounts above due to adjustments resulting from the post-Closing adjustment process based on the book value of the assets of HoldCo Group as of June 30, 2025, a difference in the cash held by HoldCo as of June 30, 2025, and changes to our estimate for transaction expenses incurred during our quarter ended June 30, 2025.

{c} Reflects the estimated tax liability associated with the taxable gain from the Transaction, calculated using the historical statutory rates in effect for our year ended March 31, 2025. Our tax liability reduces our prepaid tax balance as of March 31, 2025. Our actual tax liability may differ materially from our estimate for income taxes.

{d} Reflects our preliminary estimate of the fair value of the Holdback Premium and the Earn-Outs. We are conducting a valuation analysis utilizing independent valuation specialists to determine the fair value of the contingent consideration which has not been completed. Our final estimate for the fair value of the Holdback Premium and the Earn-Outs may differ materially from our preliminary estimates.

{e} Reflects the value of certain retention bonuses that are due to be paid to the Buyer.

{f} Reflects the estimated pro forma gain on disposal, which is calculated as the difference between the estimated consideration from the sale of HoldCo and the carrying value of Holdco Group as of March 31, 2025, net of estimated income taxes. The actual gain or loss on disposal, and our estimate of income taxes, will be based on the balance sheet information as of June 30, 2025, and may differ materially from the estimates. The pro forma gain on disposal has not been reflected in the unaudited pro forma condensed consolidated statements of operations as this amount pertains to discontinued operations and does not impact income from continuing operations.

{g} Reflects the elimination of revenues and expenses associated with the business of HoldCo.