10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2012

OR

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from____ to ____ .

Commission file number:1-34167

ePlus inc.

(Exact name of registrant as specified in its charter)

Delaware	54-1817218
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

13595 Dulles Technology Drive, Herndon, VA 20171-3413

(Address, including zip code, of principal executive offices)

Registrant’s telephone number, including area code: (703) 984-8400

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes x   No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes x   No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer o	Accelerated filer x
Non-accelerated filer o  (Do not check if a smaller reporting company)	Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule12b-2 of the Exchange Act).

 Yes o  No x

The number of shares of common stock outstanding as of October 31, 2012 was 8,080,322.

TABLE OF CONTENTS

ePlus inc. AND SUBSIDIARIES

Part I. Financial Information:
Item 1.	Financial Statements
	Unaudited Condensed Consolidated Balance Sheets as of September 30, 2012 and March 31, 2012	4
	Unaudited Condensed Consolidated Statements of Operations for the Three and Six Months Ended September 30, 2012 and 2011 as Restated	5
	Unaudited Condensed Consolidated Statements of Comprehensive Income for the Three and Six Months Ended September 30, 2012 and 2011	6
	Unaudited Condensed Consolidated Statements of Cash Flows for the Six Months Ended September 30, 2012 and 2011	7
	Unaudited Condensed Consolidated Statements of Stockholders’ Equity for the Six Months Ended September 30, 2012	9
	Notes to Unaudited Condensed Consolidated Financial Statements	10
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	35
Item 4.	Controls and Procedures	36
Part II. Other Information:
Item 1.	Legal Proceedings	36
Item 1A.	Risk Factors	37
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	37
Item 3.	Defaults Upon Senior Securities	38
Item 4.	Mine Safety Disclosures	38
Item 5.	Other Information	38
Item 6.	Exhibits	39
Signatures		40

2

CAUTIONARY LANGUAGE ABOUT FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains certain statements that are, or may be deemed to be, “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and are made in reliance upon the protections provided by such acts for forward-looking statements. Such statements are not based on historical fact, but are based upon numerous assumptions about future conditions that may not occur. Forward-looking statements are generally identifiable by use of forward-looking words such as “may,” “should,” “intend,” “estimate,” “will,” “potential,” “could,” “believe,” “expect,” “anticipate,” “project,” and similar expressions. Readers are cautioned not to place undue reliance on any forward-looking statements made by us or on our behalf. Forward-looking statements are made based upon information that is currently available or management’s current expectations and beliefs concerning future developments and their potential effects upon us, speak only as of the date hereof, and are subject to certain risks and uncertainties. We do not undertake any obligation to publicly update or correct any forward-looking statements to reflect events or circumstances that subsequently occur, or of which we hereafter become aware. Actual events, transactions and results may materially differ from the anticipated events, transactions or results described in such statements. Our ability to consummate such transactions and achieve such events or results is subject to certain risks and uncertainties. Such risks and uncertainties include, but are not limited to, the matters set forth below:

· we offer a comprehensive set of solutions—the bundling of our direct information technology (IT) hardware sales, third party software assurance and maintenance, professional services and financing with our proprietary software, and may encounter some of the challenges, risks, difficulties and uncertainties frequently faced by similar companies, such as:

o managing a diverse product set of solutions in highly competitive markets;

o increasing the total number of customers utilizing bundled solutions by up-selling within our customer base and gaining new customers;

o adapting to meet changes in markets and competitive developments;

o maintaining and increasing advanced professional services by retaining highly skilled personnel and vendor certifications;

o integrating with external IT systems, including those of our customers and vendors; and

o continuing to enhance our proprietary software and update our technology infrastructure to remain competitive in the marketplace.

· our ability to hire and retain sufficient qualified personnel;

· a decrease in the capital spending budgets of our customers or purchases from us;

· our ability to protect our intellectual property;

· the creditworthiness of our customers and our ability to reserve adequately for credit losses;

· the possibility of goodwill impairment charges in the future;

· uncertainty and volatility in the global economy and financial markets;

· changes in the IT industry;

· our ability to raise capital, maintain or increase as needed our lines of credit with vendors or floor planning facility, or obtain non-recourse financing for our transactions;

· our ability to realize our investment in leased equipment;

· significant adverse changes in, reductions in, or losses of relationships with major customers or vendors;

· our ability to successfully integrate acquired businesses;

· our ability to maintain effective disclosure controls and procedures and internal control over financial reporting;

· changes in taxes and other regulatory legislation that could require us to change our policies or structure;

· reduction of manufacturer incentive programs; and

· significant changes in accounting guidance related to the financial reporting of leases; which could impact the demand for our leasing services.

We cannot be certain that our business strategy will be successful or that we will successfully address these and other challenges, risks and uncertainties. For a further list and description of various risks, relevant factors and uncertainties that could cause future results or events to differ materially from those expressed or implied in our forward-looking statements, see the Item 1A, “Risk Factors” and Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections contained elsewhere in this report, as well as other reports that we file with the Securities and Exchange Commission (“SEC”).

3

PART I.  FINANCIAL INFORMATION

Item 1.  Financial Statements

ePlus inc. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

	As of			As of
	September 30, 2012			March 31, 2012
ASSETS	(in thousands)
Cash and cash equivalents	$	43,935		$	33,778
Short-term Investments		1,970			7,396
Accounts receivable—net		194,344			174,599
Notes receivable—net		18,148			24,337
Inventories—net		15,783			23,514
Investment in leases and leased equipment—net		112,380			115,974
Property and equipment—net		2,040			2,086
Other assets		23,407			23,560
Goodwill		28,787			28,444
TOTAL ASSETS	$	440,794		$	433,688
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Accounts payable—equipment	$	8,066		$	17,268
Accounts payable—trade		24,650			26,719
Accounts payable—floor plan		84,366			85,911
Salaries and commissions payable		9,673			9,500
Accrued expenses and other liabilities		34,833			40,822
Recourse notes payable		1,682			1,727
Non-recourse notes payable		33,020			26,328
Deferred tax liability		5,786			5,786
Total Liabilities		202,076			214,061
COMMITMENTS AND CONTINGENCIES  (Note 9)
STOCKHOLDERS' EQUITY
Preferred stock, $.01 par value; 2,000,000 shares authorized; none issued or outstanding		-			-
Common stock, $.01 par value; 25,000,000 shares authorized; 12,820,478 issued and 8,079,919 outstanding at September 30, 2012 and 12,692,224 issued and 7,999,895 outstanding at March 31, 2012		128			127
Additional paid-in capital		96,056			93,545
Treasury stock, at cost, 4,740,559 and 4,692,329 shares, respectively		(66,973	)		(65,416	)
Retained earnings		209,001			190,906
Accumulated other comprehensive income—foreign currency translation adjustment		506			465
Total Stockholders' Equity		238,718			219,627
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	440,794		$	433,688

See Notes to Unaudited Condensed Consolidated Financial Statements.

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ePlus inc. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

	Three Months Ended September 30,				Six Months Ended September 30,
			2011				2011
	2012		As Restated (1)		2012		As Restated (1)
	(amounts in thousands, except shares and per share data)
Sales of product and services	$	250,178	$	193,493	$	484,460	$	362,814
Financing revenue		7,413		7,305		15,313		14,739
Fee and other income		2,460		2,857		5,002		5,001
TOTAL REVENUES		260,051		203,655		504,775		382,554
COSTS AND EXPENSES
Cost of sales, product and services		205,199		158,429		399,590		299,103
Direct lease costs		2,461		2,078		4,704		4,174
		207,660		160,507		404,294		303,277
Professional and other fees		2,707		2,355		5,820		4,780
Salaries and benefits		26,919		24,090		53,273		47,096
General and administrative expenses		5,411		4,507		10,066		8,540
Interest and financing costs		446		348		851		730
		35,483		31,300		70,010		61,146
TOTAL COSTS AND EXPENSES		243,143		191,807		474,304		364,423
EARNINGS BEFORE PROVISION FOR INCOME TAXES		16,908		11,848		30,471		18,131
PROVISION FOR INCOME TAXES		6,875		4,784		12,376		7,364
NET EARNINGS	$	10,033	$	7,064	$	18,095	$	10,767
NET EARNINGS PER COMMON SHARE—BASIC	$	1.29	$	0.87	$	2.34	$	1.31
NET EARNINGS PER COMMON SHARE—DILUTED	$	1.27	$	0.85	$	2.29	$	1.28
WEIGHTED AVERAGE SHARES OUTSTANDING—BASIC		7,770,206		8,153,495		7,745,506		8,230,022
WEIGHTED AVERAGE SHARES OUTSTANDING—DILUTED		7,920,927		8,327,748		7,912,818		8,422,099

(1)  See Note 2, "Restatement of Financial Statements."

See Notes to Unaudited Condensed Consolidated Financial Statements.

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ePlus inc. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

	Three months ended  September 30,					Six months ended  September 30,
	2012		2011			2012		2011
	(amounts in thousands)
NET EARNINGS	$	10,033	$	7,064		$	18,095	$	10,767
OTHER COMPREHENSIVE INCOME, NET OF TAX:
Foreign currency translation adjustments		91		(197	)		41		(182	)
Other comprehensive (loss) income		91		(197	)		41		(182	)
TOTAL COMPREHENSIVE INCOME	$	10,124	$	6,867		$	18,136	$	10,585

See Notes to Unaudited Condensed Consolidated Financial Statements.

6

ePlus inc. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

	Six months ended September 30,
	2012			2011
	(in thousands)
Cash Flows From Operating Activities:
Net earnings	$	18,095		$	10,767
Adjustments to reconcile net earnings to net cash (used in) provided by operating activities:
Depreciation and amortization		5,615			4,868
Reserves for credit losses and sales returns		40			335
Provision for inventory allowances and inventory returns		97			(297	)
Share-based compensation expense		1,578			1,080
Excess tax benefit from exercise of stock options		(756	)		(303	)
Payments from lessees directly to lenders—operating leases		(2,391	)		(2,049	)
(Gain)/loss on disposal of property, equipment and operating lease equipment		(560	)		340
(Gain)/loss on sales of notes receivable		(525	)		(439	)
Excess increase in cash value of life insurance		(75	)		(78	)
Other		(255	)		(125	)
Changes in:
Accounts receivable—net		(19,551	)		(30,328	)
Notes receivable		1,028			(1,400	)
Inventories—net		7,635			(3,259	)
Investment in direct financing and sale-type leases—net		(795	)		(447	)
Other assets		(506	)		9,709
Accounts payable—equipment		(9,081	)		241
Accounts payable—trade		(2,037	)		1,903
Salaries and commissions payable, accrued expenses and other liabilities		(4,949	)		(10,643	)
Net cash used in operating activities	$	(7,393	)	$	(20,125	)
Cash Flows From Investing Activities:
Purchases in short-term investments	$	(1,232	)	$	-
Maturities of short-term investments		6,658			-
Proceeds from sale of property, equipment and operating lease equipment		877			1,116
Purchases of property, equipment and operating lease equipment		(6,223	)		(3,054	)
Issuance of notes receivable		(17,237	)		(19,690	)
Repayments of notes receivable		9,387			10,703
Proceeds from transfer of notes receivable		13,420			11,896
Premiums paid on life insurance		(43	)		(70	)
Cash used in acquisition, net of cash acquired		-			(3,514	)
Net cash  provided by (used in) investing activities	$	5,607		$	(2,613	)

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UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - continued

	Six months ended September 30,
	2012			2011
	(in thousands)
Cash Flows From Financing Activities:
Borrowings of non-recourse and recourse notes payable	$	14,605			2,300
Repayments of non-recourse and recourse notes payable		(500	)		(292	)
Repurchase of common stock		(1,557	)		(10,034	)
Proceeds from issuance of capital stock through option exercise		178			216
Excess tax benefit from share based compensation		756			303
Net repayments on floor plan facility		(1,545	)		(85	)
Net cash provided by (used in) financing activities		11,937			(7,592	)
Effect of exchange rate changes on cash		6			(20	)
Net Increase (Decrease) in Cash and Cash Equivalents		10,157			(30,350	)
Cash and Cash Equivalents, Beginning of Period		33,778			75,756
Cash and Cash Equivalents, End of Period	$	43,935		$	45,406
Supplemental Disclosures of Cash Flow Information:
Cash paid for interest	$	1		$	2
Cash paid for income taxes	$	6,738		$	3,773
Schedule of Non-Cash Investing and Financing Activities:
Purchase of property and equipment included in accounts payable	$	62		$	19
Purchase of operating lease equipment included in accounts payable	$	175		$	58
Sales of operating lease equipment included in accounts receivable	$	143		$	-
Principal payments from lessees directly to lenders	$	7,374		$	8,627
Vesting of share-based compensation	$	3,558		$	1,419
Contingent consideration	$	-		$	1,500

See Notes to Unaudited Condensed Consolidated Financial Statements.

8

ePlus inc. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(amounts in thousands, except shares data)

													Accumulated
						Additional							Other
	Common Stock					Paid-In		Treasury			Retained		Comprehensive
	Shares			Par Value		Capital		Stock			Earnings		Income		Total
Balance, April 1, 2012		7,999,895		$	127	$	93,545	$	(65,416	)	$	190,906	$	465	$	219,627
Issuance of shares for option exercises		25,000			-		178		-			-		-		178
Excess tax benefit of share based compensation		-			-		756		-			-		-		756
Effect of share-based compensation		103,254			1		1,577		-			-		-		1,578
Purchase of treasury stock		(48,230	)		-		-		(1,557	)		-		-		(1,557	)
Net earnings		-			-		-		-			18,095		-		18,095
Foreign currency translation adjustment (net of tax of $1)		-			-		-		-			-		41		41
Balance, September 30, 2012		8,079,919		$	128	$	96,056	$	(66,973	)	$	209,001	$	506	$	238,718

See Notes to Unaudited Condensed Consolidated Financial Statements.

9

ePlus inc. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION — Our company was founded in 1990 and is a Delaware corporation. ePlus inc. is sometimes referred to in this Quarterly Report on Form 10-Q as “we,” “our,” “us,” “ourselves,” or “ePlus.” The unaudited condensed consolidated financial statements include the accounts of ePlus inc. and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated.

INTERIM FINANCIAL STATEMENTS — The condensed consolidated financial statements for the three and six months ended September 30, 2012 and 2011 are unaudited, but include all adjustments consisting of normal recurring adjustments that, in the opinion of management, are necessary for a fair presentation of our financial position, results of operations, changes in equity and cash flows for such periods. Operating results for the three and six months ended September 30, 2012 and 2011 are not necessarily indicative of results that may be expected for any other interim period or for the full fiscal year ending March 31, 2013 or any other future period. These unaudited condensed consolidated financial statements do not include all disclosures required by the accounting principles generally accepted in the United States (“U.S. GAAP”) for annual financial statements. Our audited consolidated financial statements are contained in our annual report on Form 10-K for the year ended March 31, 2012, which should be read in conjunction with these interim financial statements.

SUBSEQUENT EVENTS— Management has evaluated subsequent events after the balance sheet date through the date our financial statements are issued.

USE OF ESTIMATES — The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Significant items subject to such estimates and assumptions include estimates related to revenue recognition, residual values, vendor consideration, lease classification, goodwill and intangibles, reserves for credit losses, and the recognition and measurement of income tax assets and liabilities. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results may differ from these estimates.

REVENUE RECOGNITION–The majority of our revenues are derived from the following sources: sales of third party products, software, software assurance, maintenance and services; sales of our services and software; and financing revenues. For all these revenue sources, we determine whether we are the principal or agent in accordance with Codification Topic, Revenue Recognition, Subtopic Principal Agent Considerations. Our revenue recognition policies vary based on these revenue sources.

For the sale of third party software assurance, maintenance and services we concluded that we are acting as an agent and recognize revenue for these transactions on a net basis at the date of sale, which is presented within sales of products and services in our unaudited condensed consolidated statements of operations. Gross billings for all products and services for the three months ended September 30, 2012 and September 30, 2011 were $318.8 million and $252.7 million, respectively. Gross billings for all products and services for the six months ended September 30, 2012 and September 30, 2011 were $597.6 million and $454.7 million, respectively.

CONCENTRATIONS OF RISK—Financial instruments that potentially subject us to concentrations of credit risk include cash and cash equivalents, short-term investments, accounts receivable, notes receivable and investments in direct financing and sales-type leases. Cash and cash equivalents and short-term investments are maintained principally with financial institutions in the United States, which have high credit ratings. Risk on accounts receivable, notes receivable and investments in direct financing and sales-type leases is reduced by the large number of diverse industries comprising our customer base and through the ongoing evaluation of collectability of our portfolio. Our credit risk is further mitigated through the underlying collateral and whether the asset is funded with recourse or non-recourse notes payable.

A substantial portion of our sales of product and services are from sales of Cisco and Hewlett Packard products, which represented approximately 49.8% and 10.0%, and 51.6% and 10.1%, respectively, of our sales of product and services for the three and six months ended September 30, 2012, as compared to 46.1% and 17.2%, and 44.0% and 16.4%, respectively, of our sales of product and services for the three and six months ended September 30, 2011. Any changes in our vendors’ ability to provide products could have a material adverse effect on our business, results of operations and financial condition.

10

RECENTLY ADOPTED ACCOUNTING PRONOUNCEMENTS — In June 2011, the Financial Accounting Standard Board (“FASB”) issued Accounting Standards Update (“ASU”) 2011-12, Comprehensive Income (“ASU 2011-12”), which amended existing guidance by allowing only two options for presenting the components of net income and other comprehensive income: (1) in a single continuous financial statement, statement of comprehensive income or (2) in two separate but consecutive financial statements, consisting of an income statement followed by a separate statement of other comprehensive income. ASU 2011-12 requires retrospective application, and it is effective for fiscal years, and interim periods within those years, beginning after December 15, 2011, with early adoption permitted. We adopted this amendment on April 1, 2012 and are presenting our components of net income and other comprehensive income in two separate but consecutive financial statements.

2. RESTATEMENT OF FINANCIAL STATEMENTS

During the preparation of our financial statements for the fiscal year ended March 31, 2012, we reassessed the presentation of sales of third party software assurance, maintenance and services and, after giving further consideration with respect to gross vs. net reporting, concluded that these transactions should be presented on a net basis in accordance with Codification Topic, Revenue Recognition, Subtopic Principal Agent Considerations. We determined that we should have been considered an agent in the transaction because a third party is responsible for the day to day provision of services under the contract. This change in the determination of that status results in different accounting treatment of the revenue resulting from the sale of such third party software assurance, maintenance and services, requiring the revenue to be reported net of the associated cost of the underlying contract with the third party service provider.

Under net sales recognition, the cost paid to the third party service provider is recorded as a reduction to sales of products and services, resulting in net sales being equal to the gross profit on the transaction. The change in accounting policy and restatement affects our revenues and offsetting costs and expenses for the identified periods but does not affect our previously reported earnings before provision for income tax, net earnings, net earnings per common share or unaudited condensed consolidated statement of cash flows.

The effects of this restatement are summarized in the table below (in thousands):

	Three Months Ended  September 30, 2011							Six Months Ended  September 30, 2011
	As reported		Adjustments			As restated		As reported		Adjustments			As restated
Sales of product and services	$	252,688	$	(59,195	)	$	193,493	$	454,654	$	(91,840	)	$	362,814
Total revenues	$	262,850	$	(59,195	)	$	203,655	$	474,394	$	(91,840	)	$	382,554
Cost of sales, product and services	$	217,624	$	(59,195	)	$	158,429	$	390,943	$	(91,840	)	$	299,103
Total costs and expenses	$	251,002	$	(59,195	)	$	191,807	$	456,263	$	(91,840	)	$	364,423
Net earnings	$	7,064	$	-		$	7,064	$	10,767	$	-		$	10,767
Net earnings per common share - basic	$	0.87	$	-		$	0.87	$	1.31	$	-		$	1.31
Net earnings per common share - diluted	$	0.85	$	-		$	0.85	$	1.28	$	-		$	1.28

3. INVESTMENT IN LEASES AND LEASED EQUIPMENT—NET

Investment in leases and leased equipment—net consists of the following (in thousands):

	September 30,		March 31,
	2012
Investment in direct financing and sales-type leases—net	$	90,711	$	95,460
Investment in operating lease equipment—net		21,669		20,514
	$	112,380	$	115,974

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 INVESTMENT IN DIRECT FINANCING AND SALES-TYPE LEASES—NET

Our investment in direct financing and sales-type leases—net consists of the following (in thousands):

	September 30,			March 31,
	2012
Minimum lease payments	$	93,646		$	99,747
Estimated unguaranteed residual value (1)		7,319			6,917
Initial direct costs, net of amortization (2)		746			797
Less:  Unearned lease income		(9,648	)		(10,665	)
Less:  Reserve for credit losses (3)		(1,352	)		(1,336	)
Investment in direct financing and sales-type leases—net	$	90,711		$	95,460

(1) Includes estimated unguaranteed residual values of $2,222 thousand and $1,700 thousand as of September 30, 2012 and March 31, 2012, respectively, for direct financing leases which have been sold and accounted for as sales under Codification Topic, Transfers and Servicing.

(2) Initial direct costs are shown net of amortization of $618 thousand and $512 thousand as of September 30, 2012 and March 31, 2012, respectively.

(3) For details on reserve for credit losses, refer to Note 5, “Reserves for Credit Losses.”

Our net investment in direct financing and sales-type leases for certain lease agreements serves as collateral for non-recourse equipment notes. See Note 7, “Notes Payable and Credit Facility.”

We enter into agreements to sell the financing receivable associated with certain notes receivables and investments in direct financing leases, which are accounted for as a sale under Codification Topic, Transfer and Servicing. We recognized a net gain for these sales of $0.5 million and $0.9 million in financing revenues in the unaudited condensed consolidated statement of operations for the three months ended September 30, 2012 and 2011, respectively, and $1.7 million and $1.0 million for the six months ended September 30, 2012 and 2011, respectively. Total proceeds from these sales were $12.6 million and $23.0 million for the three months ended September 30, 2012 and 2011, respectively. Total proceeds from these sales were $42.0 million and $24.6 million for the six months ended September 30, 2012 and 2011, respectively.

INVESTMENT IN OPERATING LEASE EQUIPMENT—NET

Investment in operating lease equipment—net primarily represents leases that do not qualify as direct financing leases. The components of the investment in operating lease equipment—net are as follows (in thousands):

	September 30,			March 31,
	2012
Cost of equipment under operating leases	$	46,775		$	44,487
Less:  Accumulated depreciation and amortization		(25,106	)		(23,973	)
Investment in operating lease equipment—net (1)	$	21,669		$	20,514

(1) Includes estimated unguaranteed residual values of $7,918 thousand and $7,802 thousand as of September 30, 2012 and March 31, 2012, respectively, for operating leases.

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4. GOODWILL

Goodwill represents the premium paid over the fair value of net tangible and intangible assets we have acquired in business combinations. The following table summarizes the amount of goodwill allocated to our reporting units (in thousands):

	Financing			Technology		Software  Procurement			Software  Document  Management		Total
Balance April 1, 2012
Goodwill	$	4,029		$	27,355	$	4,644		$	1,089	$	37,117
Accumulated impairment losses		(4,029	)		-		(4,644	)		-		(8,673	)
		-			27,355		-			1,089		28,444
Purchase accounting adjustments		-			343		-			-		343
Balance September 30, 2012
Goodwill		4,029			27,698		4,644			1,089		37,460
Accumulated impairment losses		(4,029	)		-		(4,644	)		-		(8,673	)
Goodwill - net balance September 30, 2012	$	-		$	27,698	$	-		$	1,089	$	28,787

5. RESERVES FOR CREDIT LOSSES

Activity in our reserves for credit losses for the six months ended September 30, 2012 and 2011 were as follows (in thousands):

	Accounts  Receivable			Notes  Receivable		Lease-Related  Receivables			Total
Balance April 1, 2012	$	1,307		$	2,963	$	1,336		$	5,606
Provision for bad debts		(206	)		117		19			(70	)
Write-offs and other		(48	)		-		(3	)		(51	)
Balance September 30, 2012	$	1,053		$	3,080	$	1,352		$	5,485

	Accounts  Receivable			Notes  Receivable		Lease-Related  Assets			Total
Balance April 1, 2011	$	944		$	94	$	1,733		$	2,771
Provision for bad debts		129			162		(184	)		107
Write-offs and other		(224	)		-		(2	)		(226	)
Balance September 30, 2011	$	849		$	256	$	1,547		$	2,652

Our reserves for credit losses and minimum payments associated with our notes receivables and lease related receivables disaggregated on the basis of our impairment method were as follows (in thousands):

	September 30, 2012				March 31, 2012
	Notes  Receivable		Lease-Related  Receivables		Notes  Receivable		Lease-Related  Receivables
Reserves for credit losses:
Ending balance: collectively evaluated for impairment	$	133	$	1,258	$	298	$	1,314
Ending balance: individually evaluated for impairment		2,947		94		2,665		22
Ending balance	$	3,080	$	1,352	$	2,963	$	1,336
Minimum payments:
Ending balance: collectively evaluated for impairment	$	17,728	$	93,335	$	22,944	$	99,545
Ending balance: individually evaluated for impairment		3,500		311		4,356		202
Ending balance	$	21,228	$	93,646	$	27,300	$	99,747

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During fiscal year 2012, we began selling and financing various products and services to a large law firm, which filed for bankruptcy in May 2012. As of September 30, 2012, we had $3.6 million of notes and lease-related receivables from this customer and total reserves for credit losses of $2.9 million, which represented our estimated probable loss.

As of March 31, 2012, we had $4.2 million of notes receivables from this customer and total reserves for credit losses of $2.6 million. In addition to the notes receivable, there were accounts receivable for this customer of $0.9 million and a reserve for credit losses of $0.3 million as of March 31, 2012. Accordingly, the total receivables associated with this customer as of March 31, 2012 were $5.1 million and our estimated probable loss was $2.9 million. As of March 31, 2012, the notes and lease receivables associated with this customer were placed on non-accrual status.

As of September 30, 2012, the age of the recorded minimum lease payments and net credit exposure associated with our investment in direct financing and sales-type leases that are past due, disaggregated based on our internally assigned credit quality ratings (“CQR”), were as follows (in thousands):

	31-60  Days  Past Due		61-90  Days  Past Due		Greater  than 90  Days  Past Due		Total  Past Due		Current		Unbilled  Minimum  Lease  Payments		Total  Minimum  Lease  Payments		Unearned  Income			Non- Recourse  Notes  Payable			Net Credit  Exposure
September 30, 2012
High CQR	$	35	$	15	$	255	$	305	$	534	$	51,490	$	52,329	$	(3,889	)	$	(4,003	)	$	44,437
Average CQR		27		-		25		52		76		40,848		40,976		(3,913	)		(15,413	)		21,650
Low CQR		6		12		29		47		-		294		341		(30	)		-			311
Total		68		27		309		404		610		92,632		93,646		(7,832	)		(19,416	)		66,398
March 31, 2012
High CQR	$	1,767	$	5	$	72	$	1,844	$	977	$	58,214	$	61,035	$	(4,541	)	$	(3,480	)	$	53,014
Average CQR		85		7		12		104		53		38,337		38,494		(4,445	)		(15,109	)		18,940
Low CQR		-		-		-		-		-		218		218		(16	)		-			202
Total	$	1,852	$	12	$	84	$	1,948	$	1,030	$	96,769	$	99,747	$	(9,002	)	$	(18,589	)	$	72,156

As of September 30, 2012, the age of the recorded notes receivable balance disaggregated based on our internally assigned CQR were as follows (in thousands):

	31-60Days  Past Due		61-90 Days  Past Due		Greater than  90 Days  Past Due		Total Past  Due		Current		Unbilled  Notes  Receivable		Total
September 30, 2012
High CQR	$	500	$	578	$	-	$	1,078	$	211	$	12,796	$	14,085
Average CQR		-		-		-		-		15		3,628		3,643
Low CQR		51		-		678		729		-		2,771		3,500
Total	$	551	$	578	$	678	$	1,807	$	226	$	19,195	$	21,228
March 31, 2012
High CQR	$	-	$	-	$	-	$	-	$	2,661	$	18,140	$	20,801
Average CQR		-		-		-		-		29		2,113		2,142
Low CQR		-		-		86		86		387		3,884		4,357
Total	$	-	$	-	$	86	$	86	$	3,077	$	24,137	$	27,300

We estimate losses on our net credit exposure to be between 0% - 5% for customers with highest CQR, as these customers are investment grade or the equivalent of investment grade. We estimate losses on our net credit exposure to be between 2% - 25% for customers with average CQR, and between 50% - 100% for customers with low CQR, which includes customers in bankruptcy.

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6. OTHER ASSETS AND ACCRUED EXPENSES AND OTHER LIABILITIES

Our other assets and accrued expenses and other liabilities consist of the following (in thousands):

	September 30,		March 31,
	2012
Deferred costs	$	10,588	$	9,391
Capitalized software and other intangible assets		4,568		5,075
Prepaid assets		2,266		2,215
Other		5,985		6,879
Other assets	$	23,407	$	23,560

	September 30,		March 31,
	2012
Deferred revenue	$	17,285	$	15,935
Accrued expenses		9,280		15,386
Other		8,268		9,501
Accrued expenses and other liabilities	$	34,833	$	40,822

Deferred costs and revenues primarily relate to the sales of products and services in our technology sales business segment. Other assets include unbilled accounts receivable, cash surrender value of life insurance policies, escrow deposits and off-lease equipment. Other liabilities include accrued taxes, deferred compensation, lease rental payments due to third parties, and contingent consideration related to an acquisition.

7. NOTES PAYABLE AND CREDIT FACILITY

Non-recourse and recourse obligations consist of the following (in thousands):

	September 30,		March 31,
	2012
Recourse note payable at 4.84% expires on March 2, 2017	$	1,682	$	1,727
Non-recourse equipment notes secured by related investments in leases with interest rates ranging from2.58% to 10.0% at September 30, 2012 and March 31, 2012	$	33,020	$	26,328

Principal and interest payments on the non-recourse notes payable are generally due monthly in amounts that are approximately equal to the total payments due from the lessee under the leases that collateralize the notes payable.  The weighted average interest rate for our non-recourse notes payable was 5.22% and 5.15%, as of September 30, 2012 and March 31, 2012, respectively. Under recourse financing, in the event of a default by a lessee, the lender has recourse against the lessee, the equipment serving as collateral, and us. Under non-recourse financing, in the event of a default by a lessee, the lender generally only has recourse against the lessee, and the equipment serving as collateral, but not against us.

Our technology sales business segment, through our subsidiary ePlus Technology, inc., finances its operations with funds generated from operations, and with a credit facility with GE Commercial Distribution Finance Corporation (“GECDF”). This facility provides short-term capital for our technology sales business segment. There are two components of the GECDF credit facility: (1) a floor plan component and (2) an accounts receivable component. Under the floor plan component, we had outstanding balances of $84.4 million and $85.9 million as of September 30, 2012 and March 31, 2012, respectively. Under the accounts receivable component, we had no outstanding balances as of September 30, 2012 and March 31, 2012. As of September 30, 2012, the facility agreement had an aggregate limit of the two components of $175 million, and the accounts receivable component had a sub-limit of $30 million, which bears interest assessed at a rate of the One Month Libor plus two and one half percent. The credit facility with GECDF was amended and restated in July 2012 which increased the credit limit from $125 million to $175 million and modified the covenants, interest rate and other requirements within the facility.

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The credit facility has full recourse to ePlus Technology, inc. and is secured by a blanket lien against all its assets, such as receivables and inventory. Availability under the facility may be limited by the asset value of equipment we purchase or accounts receivable, and may be further limited by certain covenants and terms and conditions of the facility. These covenants include but are not limited to a minimum excess availability of the facility and minimum earnings before interest, taxes, depreciation and amortization (“EBITDA”) of ePlus Technology, inc. Management believes we were in compliance with these covenants as of September 30, 2012. In addition, the facility restricts the ability of ePlus Technology, inc. to transfer funds to its affiliates in the form of dividends, loans or advances with certain exceptions for dividends to ePlus inc. The facility also requires that financial statements of the Company be provided within 45 days of each quarter and 90 days of each fiscal year end and also includes that other operational reports be provided on a regular basis. Either party may terminate with 90 days’ advance notice. We are not, and do not believe that we are reasonably likely to be, in breach of the GECDF credit facility. In addition, we do not believe that the covenants of the GECDF credit facility materially limit our ability to undertake financing. In this regard, the covenants apply only to our subsidiary, ePlus Technology, inc. This credit facility is secured by the assets of only ePlus Technology, inc. and the guaranty as described below.

The facility provided by GECDF requires a guaranty of $10.5 million by ePlus inc. The guaranty requires ePlus inc. to deliver its annual audited financial statements by certain dates. We have delivered the annual audited financial statements for the year ended March 31, 2012, as required. The loss of the GECDF credit facility could have a material adverse effect on our future results as we currently rely on this facility and its components for daily working capital and liquidity for our technology sales business segment and as an operational function of our accounts payable process.

We have an agreement with 1st Commonwealth Bank of Virginia to provide us with a $0.5 million credit facility, which matured October 26, 2012. This credit facility was renewed for two years effective October 27, 2012. The credit facility is available for use by us and our affiliates and the lender has full recourse to us. Borrowings under this facility bear interest at the Wall Street Journal U.S. Prime rate plus 1%. The primary purpose of the facility is to provide letters of credit for landlords, taxing authorities and bids.  As of September 30, 2012 and as of March 31, 2012, we had no outstanding balance on this credit facility.

8. COMMITMENTS AND CONTINGENCIES

Legal Proceedings

On May 19, 2009, we filed a complaint in the United States District Court for the Eastern District of Virginia (the “trial court”) against four defendants, alleging that they used or sold products, methods, processes, services and/or systems that infringe on certain of our patents. During July and August 2009, we entered into settlement and license agreements with three of the defendants. We obtained a jury verdict against the remaining defendant, Lawson Software, Inc. (“Lawson”) on January 27, 2011. The jury unanimously found that Lawson infringed certain ePlus patents relating to electronic procurement systems, and additionally found that all ePlus patent claims tried in court were not invalid.

On May 23, 2011, the trial court issued a permanent injunction, ordering Lawson and its successors to: immediately stop selling and servicing products relating to its electronic procurement systems that infringe our patents; cease providing any ongoing or future maintenance, training or installation of its infringing products; and refrain from publishing any literature or information that encourages the use or sale of its infringing products.  We have filed a motion seeking a finding that Lawson is in contempt of the injunction. We currently do not have a hearing date for our motion. Lawson has appealed the trial court’s ruling. We also have appealed the trial court’s evidentiary ruling which precluded us from seeking monetary damages. Oral argument on the appeal was held on June 6, 2012. Court calendars are inherently unpredictable and we cannot predict when the court will issue a ruling.

While we believe that we have a basis for our claims, these types of cases are complex in nature, are likely to have significant expenses associated with them, and we cannot predict whether we will be successful in our claim for a contempt finding or damages, whether any award ultimately received will exceed the costs incurred to pursue this matter, or how long it will take to bring this matter to resolution.

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Other Matters

We may become party to various legal proceedings arising in the normal course of business, including preference payment claims asserted in customer bankruptcy proceedings, claims of alleged infringement of patents, trademarks, copyrights and other intellectual property rights, claims of alleged non-compliance with contract provisions, employment related claims, claims by competitors, vendors or customers, and claims related to alleged violations of laws and regulations. We accrue for costs associated with these contingencies when a loss is probable and the amount is reasonably estimable.  Refer to Note 5, "Reserves for Credit Losses," for additional information regarding loss contingencies associated with our accounts, notes and lease-related receivables.

9. EARNINGS PER SHARE

Basic earnings per share is calculated by dividing net earnings available to common shareholders by the basic weighted average number of shares of common stock outstanding during each period. Diluted earnings per share is calculated by dividing net earnings available to common shareholders by the basic weighted average number of shares of common stock outstanding plus incremental shares issuable upon the assumed exercise of “in-the-money” stock options and other common stock equivalents during each period.

The following table provides a reconciliation of the numerators and denominators used to calculate basic and diluted net earnings per common share as disclosed on our unaudited condensed consolidated statements of operations for the three and six months ended September 30, 2012 and September 30, 2011 (in thousands, except per share data).

	Three months ended  September 30,				Six months ended  September 30,
	2012		2011		2012		2011
Net earnings available to common shareholders—basic and diluted	$	10,033	$	7,064	$	18,095	$	10,767
Weighted average shares outstanding — basic		7,770		8,153		7,746		8,230
Effect of dilutive shares		151		174		167		192
Weighted average shares outstanding — diluted		7,921		8,327		7,913		8,422
Earnings per common share:
Basic	$	1.29	$	0.87	$	2.34	$	1.31
Diluted	$	1.27	$	0.85	$	2.29	$	1.28

All unexercised stock options were included in the computations of diluted earnings per share for the three and six months ended September 30, 2012 and 2011.

10. SHARE REPURCHASE

On August 15, 2011, our Board approved a share repurchase plan which authorized share repurchases up to 500,000 shares over a 12-month period commencing on September 16, 2011. Since the commencement of this plan through November 14, 2011, we purchased 403,458 shares. On November 15, 2011, our Board amended the share repurchase plan to authorize share repurchases up to 500,000 shares commencing on November 15, 2011. We purchased 72,978 shares under the amended plan before it expired on September 15, 2012. On August 13, 2012, our Board authorized a new share repurchase plan which authorized share repurchases up to 500,000 shares commencing on September 16, 2012, through September 15, 2013. The purchases may be made from time to time in the open market, or in privately negotiated transactions, subject to availability. Any repurchased shares will have the status of treasury shares and may be used, when needed, for general corporate purposes.

During the six months ended September 30, 2012, we repurchased 19,423 shares of our outstanding common stock at an average cost of $29.46 per share for a total purchase price of $572 thousand. Since the inception of our initial repurchase program on September 20, 2001 to September 30, 2012, we have repurchased 4.7 million shares of our outstanding common stock at an average cost of $13.94 per share for a total purchase price of $65.3 million.

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11. SHARE-BASED COMPENSATION

Share-Based Plans

We have share-based awards outstanding under the followingplans: (1) Amendment and Restatement of the 1998 Stock Incentive Plan (2003) (the “Amended LTIP (2003)”), (2) the 2008 Non-Employee Director Long-Term Incentive Plan (“2008 Director LTIP”), and (3) the 2008 Employee Long-Term Incentive Plan (“2008 Employee LTIP”). On September 13, 2012, our shareholders approved the 2012 Employee Long-Term Incentive Plan (“2012 Employee LTIP”), which has no awards outstanding as of September 30, 2012. Currently, awards are only issued under the 2008 Director LTIP and the 2008 Employee LTIP. All the share-based plans require the use of the previous trading day's closing price when the grant date falls on a date the stock was not traded.

For a summary of descriptions and vesting periods of the 1998 LTIP, the Amended LTIP (2001), the Amended LTIP (2003), the 2008 Director LTIP and the 2008 Employee LTIP discussed below, please refer to our Annual Report on Form 10-K for the year ended March 31, 2012.

Stock Option Activity

During the three and six months ended September 30, 2012 and 2011, there were no stock options granted to employees.

A summary of stock option activity during the six months ended September 30, 2012 is as follows:

	Number of  Shares			Exercise Price  Range		Weighted  Average  Exercise  Price		Weighted  Average  Contractual  Life Remaining  (in years)		Aggregate  Intrinsic  Value
Outstanding, April 1, 2012		145,000		$	7.14 - $15.25	$	11.91
Options exercised (1)		(25,000	)	$	7.14	$	7.14
Outstanding, September 30, 2012		120,000		$	10.75 - $15.25	$	12.90		2.0	$	3,158,100
Vested at September 30, 2012		120,000				$	12.90		2.0	$	3,158,100
Exercisable at September 30, 2012		120,000				$	12.90		2.0	$	3,158,100

(1) The total intrinsic value of stock options exercised during the six months ended September 30, 2012 was $683 thousand.

Additional information regarding stock options outstanding as of September 30, 2012 is as follows:

		Options Outstanding and Exercisable
Range of  Exercise Prices		Options  Outstanding		Weighted  Average  Exercise  Price per  Share		Weighted Average  Contractual  Life Remaining  (in years)
$	10.75 - $13.50		80,000	$	11.74		2.5
$	13.51 - $15.25		40,000	$	15.23		1.0
$	10.75 - $15.25		120,000	$	12.90		2.0

We issue shares from our authorized but unissued common stock to satisfy stock option exercises.  At September 30, 2012, all of our options are vested.

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Restricted Stock Activity

For the six months ended September 30, 2012, we granted 7,831 restricted shares under the 2008 Director LTIP, and 96,590 restricted shares under the 2008 Employee LTIP. A summary of the non-vested restricted shares is as follows:

	Number of  Shares			Weighted  Average Grant- date Fair Value
Nonvested April 1, 2012		276,130		$	20.75
Granted		104,421		$	32.64
Vested		(102,523	)	$	11.68
Forfeited		(1,167	)	$	20.17
Nonvested September 30, 2012		276,861		$	25.19

Upon each vesting period of the restricted stock awards, employees are subject to minimum tax withholding obligations. The 2008 Director LTIP and 2008 Employee LTIP allows us, at the participant’s election, to withhold a sufficient number of shares due to the participant to satisfy their minimum tax withholding obligations. During the six months ended September 30, 2012, we withheld 28,807 shares of common stock at a value of $985 thousand, which was included in treasury stock.

Compensation Expense

We recognize compensation cost for awards of restricted stock with graded vesting on a straight line basis over the requisite service period and estimate the forfeiture rate to be zero, based on historical experience. There are no additional conditions for vesting other than service conditions. During the three months ended September 30, 2012 and 2011, we recognized $915 thousand and $650 thousand, respectively, of total share-based compensation expense. During the six months ended September 30, 2012 and 2011, we recognized $1.6 million and $1.1 million, respectively, of total share-based compensation expense. Unrecognized compensation expense related to non-vested restricted stock was $5.8 million, which will be fully recognized over the next 33 months.

We also provide our employees with a contributory 401(k) profit sharing plan. Employer contribution percentages are determined by us and are discretionary each year. The employer contributions vest pro-ratably over a four-year service period by the employees, after which, all employer contributions will be fully vested. For the three months ended September 30, 2012 and 2011, our contribution expense for the plan was approximately $236 thousand and $214 thousand, respectively. For the six months ended September 30, 2012 and 2011, our contribution expense for the plan was approximately $465 thousand and $417 thousand, respectively.

12. INCOME TAXES

We recognize interest and penalties for uncertain tax positions. As of September 30, 2012, our gross liability related to uncertain tax positions was $316 thousand. At September 30, 2012 if the unrecognized tax benefits of $316 thousand were to be recognized, including the effect of interest, penalties and federal tax benefit, the impact would be $429 thousand. We also recognize accrued interest and penalties related to unrecognized tax benefits as a component of tax expense. We recorded interest expense of $4 and $9 thousand for the three and six months ended September 30, 2012, and $11 thousand and $22 thousand for the same periods last year. We did not recognize any additional penalties. We had $189 thousand and $167 thousand accrued for the payment of interest at September 30, 2012 and 2011, respectively.

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13. FAIR VALUE OF FINANCIAL INSTRUMENTS

We account for the fair values of our assets and liabilities in accordance with Codification Topic Fair Value Measurement and Disclosure. Accordingly, we established a three-tier value hierarchy, which prioritizes the inputs used in measuring fair value. The fair value of our non-recourse notes payable is calculated using the discounted cash flow approach based on the contractual terms of the notes payable discounted at current market rates.

The following table summarizes the fair value hierarchy of our financial instruments and contingent liability (in thousands):

			Fair Value Measurement Using
	September 30,  2012		Quoted Prices in  Active Markets  for Identical  Assets (Level 1)		Significant  Other  Observable  Inputs (Level 2)		Significant  Unobservable  Inputs (Level 3)		Total Gains  (Losses)
Liabilities:
Contingent consideration	$	1,122	$	-	$	-	$	1,122	$	-

				Fair Value Measurement Using
		March 31, 2012		Quoted Prices in  Active Markets  for Identical  Assets (Level 1)		Significant  Other  Observable  Inputs (Level 2)		Significant  Unobservable  Inputs (Level 3)		Total Gains  (Losses)
Liabilities:
Contingent consideration	$	1,292	$	-	$	-	$	1,292	$	-

For the six months ended September 30, 2012, the adjustment to the fair value of the contingent consideration was $170 thousand, which was presented within general and administrative expenses in our unaudited condensed consolidated statements of operations.

14. SEGMENT REPORTING

We manage our business segments on the basis of the products and services offered. Our reportable segments consist of our technology sales business segment and our financing business segment. The technology sales business segment sells information technology equipment and software and related services primarily to corporate customers on a nationwide basis. The technology sales business segment also provides Internet-based business-to-business supply chain management solutions for information technology and other operating resources. The financing business segment offers lease-financing solutions to corporations and governmental entities nationwide. We evaluate segment performance on the basis of total revenue, segment earnings and earnings before provision for income taxes.

Both segments utilize our proprietary software and services within the organization. Sales and services and related costs of our software are included in the technology sales business segment. Our reportable segment information is as follows (in thousands):

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	Three months ended September 30, 2012						Three months ended September 30, 2011
	Technology  Sales  Business  Segment		Financing  Business  Segment		Total		Technology  Sales  Business  Segment		Financing  Business  Segment		Total
Sales of product and services	$	250,178	$	-	$	250,178	$	193,493	$	-	$	193,493
Financing revenues		-		7,413		7,413		-		7,305		7,305
Fee and other income		1,591		869		2,460		2,128		729		2,857
Total revenues		251,769		8,282		260,051		195,621		8,034		203,655
Cost of sales, product & services		205,199		-		205,199		158,429		-		158,429
Direct lease costs		-		2,461		2,461		-		2,078		2,078
Professional and other fees		2,260		447		2,707		1,986		369		2,355
Salaries and benefits		24,414		2,505		26,919		21,717		2,373		24,090
General and administrative expenses		5,011		400		5,411		4,267		240		4,507
Interest and financing costs		21		425		446		19		329		348
Total costs and expenses		236,905		6,238		243,143		186,418		5,389		191,807
Earnings before provision for income taxes	$	14,864	$	2,044	$	16,908	$	9,203	$	2,645	$	11,848
Assets	$	250,138	$	190,656	$	440,794	$	202,420	$	175,642	$	378,062

	Six months ended September 30, 2012						Six months ended September 30, 2011
	Technology  Sales  Business  Segment		Financing  Business  Segment		Total		Technology  Sales  Business  Segment		Financing  Business  Segment		Total
Sales of product and services	$	484,460	$	-	$	484,460	$	362,814	$	-	$	362,814
Financing revenues		-		15,313		15,313		-		14,739		14,739
Fee and other income		3,593		1,409		5,002		4,037		964		5,001
Total revenues		488,053		16,722		504,775		366,851		15,703		382,554
Cost of sales, product & services		399,590		-		399,590		299,103		-		299,103
Direct lease costs		-		4,704		4,704		-		4,174		4,174
Professional and other fees		4,763		1,057		5,820		4,060		720		4,780
Salaries and benefits		48,496		4,777		53,273		42,379		4,717		47,096
General and administrative expenses		9,450		616		10,066		8,034		506		8,540
Interest and financing costs		52		799		851		39		691		730
Total costs and expenses		462,351		11,953		474,304		353,615		10,808		364,423
Earnings before provision for income taxes	$	25,702	$	4,769	$	30,471	$	13,236	$	4,895	$	18,131
Assets	$	250,138	$	190,656	$	440,794	$	202,420	$	175,642	$	378,062

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

This discussion is intended to further the reader’s understanding of our consolidated financial condition and results of operations. It should be read in conjunction with the financial statements included in this quarterly report on Form 10-Q and our annual report on Form 10-K for the year ended March 31, 2012 (the “2012 Annual Report”).  These historical financial statements may not be indicative of our future performance. This Management’s Discussion and Analysis of Financial Condition and Results of Operations contains a number of forward-looking statements, all of which are based on our current expectations and could be affected by the uncertainties and risks described in Part I, Item 1A, “Risk Factors,” in our 2012 Annual Report, except as updated in our subsequently filed Forms 10-Q.

Our financial results as of and for the three and six months ended September 30, 2011 has been revised. All information and disclosures contained in this management's discussion and analysis of financial condition and results of operations have been revised to reflect the restatement described in Note 2, “Restatement of Financial Statements.”

Summary of Restatement

During the preparation of our financial statements for the fiscal year ended March 31, 2012, we reassessed the presentation of sales of third party software assurance, maintenance and services and, after giving further consideration with respect to gross versus net reporting, we concluded that these transactions should be presented on a net basis in accordance with Codification Topic, Revenue Recognition, Subtopic Principal Agent Considerations. We determined that we should have been considered an agent in the transaction because a third party is responsible for the day to day provision of services under the contract. This change in the determination of that status results in different accounting treatment of the revenue resulting from the sale of such third party software assurance, maintenance and services, requiring the revenue to be reported net of the associated cost of the underlying contract with the third party service provider.

Under net sales recognition, the cost paid to the third party service provider is recorded as a reduction to sales of products and services, resulting in net sales being equal to the gross profit on the transaction. This change in accounting policy and restatement affects our revenues and offsetting costs and expenses for the identified periods but does not affect our previously reported earnings before provision for income tax, net earnings, net earnings per common share or unaudited condensed consolidated statement of cash flows.

EXECUTIVE OVERVIEW

Business Description

ePlus and its consolidated subsidiaries provide leading IT products and services, flexible leasing solutions, and enterprise supply management software to enable our customers to optimize their IT infrastructure and supply chain processes. Our revenues are composed of sales of product and services, sales of leased equipment, financing revenues and fee and other income. Our operations are conducted through two business segments: our technology sales business segment and our financing business segment.

Financial Summary

In recent years, the United States experienced substantial uncertainty in the economic environment, including financial market disruption. In addition, the debt crisis in certain countries in the European Union has contributed to continuing economic weakness and uncertainty in the United States. A reoccurrence of the economic downturn could cause our current and potential customers to once again delay or reduce technology purchases and result in longer sales cycles, slower adoption of new technologies and increased price competition. Credit risk associated with our customers and vendors may also be adversely impacted. In addition, although we do not anticipate the need for additional capital in the near term due to our current financial position, a reoccurrence of the economic downturn may adversely affect our access to additional capital.

However, in calendar year 2011, IT spending in most categories increased, driven by the general economic recovery, the deferral of IT spending by many customers in prior years, customer interest in cloud computing, the positive return on investment that can be gained by virtualization technologies, and the reduction of manufacturer shipment delays in the supply chain. In 2012, many industry analysts are forecasting an increase in overall IT spending in the U.S. as compared to 2011, and the first half of the calendar year produced solid results in many sectors of the industry. However, some analysts have lowered their forecast for overall IT spending for the second half of calendar year 2012 and calendar year 2013. We believe that customers are continuing to focus on cost savings initiatives by utilizing technologies such as virtualization and cloud computing, and we continue to provide these and other advanced technology solutions to meet these needs.

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During the three months ended September 30, 2012, total revenue increased 27.7% to $260.1 million and total costs and expenses increased 26.8% to $243.1 million, as compared to the same period last fiscal year. During the six months ended September 30, 2012, total revenue increased 31.9% to $504.8 million and total costs and expenses increased 30.2% to $474.3 million. To help manage our rapid growth, continue our sales revenue expansion and to expand our geographical footprint and solutions offering, we increased hiring in our technology sales business segment. Over the past 12 months, we added 92 personnel in several existing and new locations, and acquired two companies.  The company has expanded from 759 employees as of September 30, 2011 to 851 employees as of September 30, 2012.

Gross margin for product and services was 18.0% and 18.1% during the three months ended September 30, 2012 and 2011, respectively, and 17.5% and 17.6% during the six months ended September 30, 2012 and 2011, respectively. Our gross margin on sales of products and services was 17.0% for the three months ended June 30, 2012 and increased sequentially due to higher sales of third party software assurance, maintenance and services, which are presented on a net basis. Gross margins on sales of product and services are affected by our customers’ investment in technology equipment, the mix and volume of products sold and changes in incentives provided to us by manufacturers. Net earnings increased 42.0% to $10.0 million and 68.1% to $18.1 million for the three months and six months ended September 30, 2012 over prior year periods ended September 30, 2011.

Cash and cash equivalents increased $10.2 million to $43.9 million at September 30, 2012, compared to March 31, 2012.

Business Segment Overview

Technology Sales Business Segment

The technology sales business segment sells IT equipment and software and related services primarily to corporate customers, state and local governments, and higher education institutions on a nationwide basis, with geographic concentrations relating to our physical locations. The technology sales business segment also provides Internet-based business-to-business supply chain management solutions for information technology products. Our technology sales business segment derives revenue from the sales of new equipment, software, maintenance, and service engagements. These revenues are reflected in our unaudited condensed consolidated statements of operations under sales of product and services and fee and other income.  Customers who purchase IT equipment and services from us may have customer master agreements, or CMAs, with us which stipulate the terms and conditions of our relationship. Some CMAs contain pricing arrangements, and most contain mutual termination for convenience clauses. Our other customers place orders using purchase orders without a CMA in place or with other documentation customary for the business. Often, our work with governments is based on public bids and our written bid responses. A substantial portion of our sales of product and services are from sales of Cisco and Hewlett Packard products, which represented approximately 51.6% and 10.1%, respectively, of sales of product and services for the six months ended September 30, 2012, as compared to 44.0% and 16.4%, respectively, of sales of product and services for the six months ended September 30, 2011.

Included in the sales of product and services are revenues derived from performing advanced professional services that may be bundled with sales of equipment which are integral to the successful delivery of such equipment. Our service engagements are generally governed by statements of work, and are primarily fixed price (with allowance for changes); however, some service agreements are based on time and materials.

We endeavor to minimize the cost of sales in our technology sales business segment through vendor consideration programs provided by manufacturers and other incentives provided by distributors. The programs we qualify for are generally set by our reseller authorization level with the manufacturer. The authorization level we achieve and maintain governs the types of products we can resell as well as such items as pricing received, funds provided for the marketing of these products and other special promotions. These authorization levels are achieved by us through sales volume, certifications held by sales executives or engineers and/or contractual commitments by us. The authorization levels are costly to maintain and these programs continually change and, therefore, there is no guarantee of future reductions of costs provided by these vendor consideration programs. We currently maintain the following authorization levels with our primary manufacturers:

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Manufacturer	Manufacturer Authorization Level
Apple	Apple Authorized Corporate Reseller
Cisco Systems	Cisco Gold DVAR (National)
	Advanced Wireless LAN
	Advanced Unified Communications
	Advanced Data Center Storage Networking
	Advanced Routing and Switching
	Advanced Security
	ATP Video Surveillance
	ATP Cisco Telepresence Video Master Partner
	ATP Rich Media Communications
	Master Security Specialization
	Master UC Specialization
	Master Managed Services Partner
Citrix Systems, Inc.	Citrix Gold (National)
EMC	Velocity Premier Level
Hewlett Packard	HP Preferred Elite Partner (National)
IBM	Premier IBM Business Partner (National)
Lenovo	Lenovo Premium (National)
Microsoft	Microsoft Gold (National)
NetApp	NetApp STAR Partner
Oracle Gold Partner	Sun SPA Executive Partner (National)
	Sun National Strategic Data Center Authorized
VMware	National Premier Partner

We also generate revenue in our technology sales business segment through hosting arrangements and sales of our Internet-based business-to-business supply chain management software, agent fees received from various manufacturers, support fees, warranty reimbursements, and interest income. Our revenues also include earnings from certain transactions that are infrequent, and there is no guarantee that future transactions of the same nature, size or profitability will occur. Our ability to consummate such transactions, and the timing thereof, may depend largely upon factors outside the direct control of management. The earnings from these types of transactions in a particular period may not be indicative of the earnings that can be expected in future periods. These revenues are reflected on our unaudited condensed consolidated statements of operations under fee and other income.

Financing Business Segment

The financing business segment offers financing solutions to domestic governmental entities and corporations nationwide and in certain other countries. The financing business unit derives revenue from leasing primarily IT and medical equipment and the disposition of that equipment at the end of the lease. These revenues are reflected under financing revenues on our unaudited condensed consolidated statements of operations. The finance business also derives revenues from the financing of third party software licenses, software assurance, maintenance and other services through notes receivables. These revenues are included in financing revenues on our unaudited condensed consolidated statements of operations.

Financing revenues consist of amortization of unearned income on notes receivables, direct financing and sales-type leases, rentals due under operating leases, net gains or losses on the sales of financing receivables, and sales of equipment at the end of a lease, as well as other post-term financing revenue. The types of revenue and costs recognized by us are determined by each lease’s individual classification. Each lease is classified as either a direct financing lease, sales-type lease, or operating lease, as appropriate.

· For direct financing and sales-type leases, we record the net investment in leases, which consists of the sum of the minimum lease payments, initial direct costs (direct financing leases only), and unguaranteed residual value (gross investment) less the unearned income. The unearned income is amortized over the life of the lease using the interest method. Under sales-type leases, the difference between the present value of minimum lease payments and the cost of the leased property plus initial direct costs (net margins) is recorded as profit at the inception of the lease.

· For operating leases, rental amounts are accrued on a straight-line basis over the lease term and are recognized as financing revenue.

We account for the transfer of financing receivables that meet the definition of financial assets and certain criteria outlined in Transfers and Servicing in the Codification, including surrender of control, as sales for financial reporting purposes. The net gain on the transfer of these financial assets is recognized in financing revenues in our unaudited condensed consolidated statements of operations.

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Our financing business segment sells the equipment underlying a lease to the lessee or a third party other than the lessee. These sales occur at the end of the lease term and revenues from the sales of such equipment are recognized at the date of sale. The net gain or loss on these transactions is presented within financing revenue in our unaudited condensed consolidated statement of operations.

We also recognize revenue from events that occur after the initial sale of a financial asset and remarketing fees from our off lease equipment. These revenues are reflected in our unaudited condensed consolidated statements of operations under fee and other income.

Fluctuations in Revenues

Our results of operations are susceptible to fluctuations for a number of reasons, including, without limitation, customer demand for our products and services, supplier costs, changes in vendor incentive programs, interest rate fluctuations, general economic conditions, and differences between estimated residual values and actual amounts realized related to the equipment we lease. Operating results could also fluctuate as a result of a sale prior to the expiration of the lease term to the lessee or to a third party or from other post-term events.

We expect to continue to expand by opening new sales locations and hiring additional staff for specific targeted market areas in the near future whenever we can find both experienced personnel and desirable geographic areas. These investments may reduce our results from operations in the short term.

RECENTLY ADOPTED ACCOUNTING PRONOUNCEMENTS

In June 2011, the FASB issued ASU 2011-12, “Comprehensive Income” (ASU 2011-12), which amended existing guidance by allowing only two options for presenting the components of net income and other comprehensive income: (1) in a single continuous financial statement, statement of comprehensive income or (2) in two separate but consecutive financial statements, consisting of an income statement followed by a separate statement of other comprehensive income. ASU 2011-12 requires retrospective application, and it is effective for fiscal years, and interim periods within those years, beginning after December 15, 2011, with early adoption permitted. We adopted this amendment on April 1, 2012 and are presenting our components of net income and other comprehensive income in two separate but consecutive financial statements.

CRITICAL ACCOUNTING ESTIMATES

The preparation of financial statements in conformity with U.S. GAAP requires management to use judgment in the application of accounting policies, including making estimates and assumptions. If our judgment or interpretation of the facts and circumstances relating to various transactions had been different, or different assumptions were made, it is possible that alternative accounting policies would have been applied, resulting in a change in financial results. On an ongoing basis, we reevaluate our estimates, including those related to revenue recognition, residual values, vendor consideration, lease classification, goodwill and intangibles, reserves for credit losses and income taxes specifically relating to uncertain tax positions. We base estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. For all of these estimates, we caution that future events rarely develop exactly as forecasted, and therefore, these estimates may require adjustment.

We consider the following accounting policies important in understanding the potential impact of our judgments and estimates on our operating results and financial condition. For additional information on these and other accounting policies, see Note 1, “Organization and Summary of Significant Accounting Policies” to the unaudited condensed consolidated financial statements included elsewhere in this report.

REVENUE RECOGNITION. The majority of our revenues are derived from the following sources: sales of third party products, software, software assurance, maintenance and services; sales of our services and software, and financing revenues. For all these revenue sources, we determine whether we are the principal or agent in accordance with Codification Topic, Revenue Recognition, Subtopic Principal Agent Considerations. Our revenue recognition policies vary based upon these revenue sources.

Generally, sales of technology products and third party software are recognized when the title and risk of loss are passed to the customer, there is persuasive evidence of an arrangement for sale, delivery has occurred and/or services have been rendered, the sales price is fixed or determinable and collectability is reasonably assured. Using these tests, the vast majority of our product sales are recognized upon delivery due to our sales terms with our customers and with our vendors. For proper cutoff, we estimate the product delivered to our customers at the end of each quarter based upon an analysis of current quarter and historical delivery dates.

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We sell software assurance, maintenance and service contracts where the services are performed by a third party. Software assurance is a maintenance product that allows customers to upgrade at no additional cost to the latest technology if new applications are introduced during the period that the software assurance is in effect. As we enter into contracts with third party service providers, we evaluate whether we are acting as a principal or agent in the transaction. Since we are not responsible for the day to day provision of services in these arrangements, we concluded that we are acting as an agent and recognize revenue on a net basis at the date of sale.

We also sell services that are performed by us in conjunction with product sales. We allocate the total arrangement consideration to the deliverables based on an estimated selling price of our products and services. We determine the estimated selling price using cost plus a reasonable margin for each deliverable, which was based on our established policies and procedures for providing customers with quotes, as well as historical gross margins for our products and services. Revenue from the sales of products is generally recognized upon delivery to the customers and revenue for the services performed by us is generally recognized when the services are complete, which normally occurs within 90 days after the products are delivered to the customer.

Financing revenues include income earned from investments in leases, leased equipment, third party software and services. We classify our investments in leases and leased equipment as either direct financing lease, sales-type lease, or operating lease, as appropriate. Revenue on direct financing and sales-type leases is deferred at the inception of the leases and is recognized over the term of the lease using the interest method. Revenue on operating leases is recorded on a straight line basis over the lease term. We classify third party software and services that we finance for our customers as notes receivable and recognize interest income over the term of the arrangement using the effective interest method.

RESIDUAL VALUES. Residual values represent our estimated value of the equipment at the end of the initial lease term. Our estimated residual values will vary, both in amount and as a percentage of the original equipment cost, and depend upon several factors, including the equipment type, manufacturer's discount, market conditions, lease term, equipment supply and demand, and new product announcements by manufacturers.

We evaluate residual values on a quarterly basis and record any required impairments of residual value, in the period in which the impairment is determined. No upward adjustment to residual values is made subsequent to lease inception.

GOODWILL AND INTANGIBLE ASSETS. Goodwill represents the premium paid over the fair value of net tangible and intangible assets we have acquired in business combinations. We review our goodwill for impairment annually, or more frequently if indicators of impairment exist. A significant amount of judgment is involved in determining if an indicator of impairment has occurred. Such indicators may include a sustained, significant decline in our share price and market capitalization, a decline in our expected future cash flows, a significant adverse change in legal factors or in the business climate, unanticipated competition, and/or slower growth rates, among others.

We first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. Qualitative factors we consider include, but are not limited to, macroeconomic conditions, industry and market conditions, company specific events, changes in circumstances, after tax cash flows and market capitalization. If the qualitative factors indicate that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, we perform the two step process to assess our goodwill for impairment. First, we compare the fair value of our reporting units with its carrying value. We estimate the fair value of the reporting unit using various valuation methodologies, including discounted expected future cash flows. If the fair value of the reporting unit exceeds its carrying value, goodwill is not impaired, and no further testing is necessary. If the net book value of our reporting unit exceeds its fair value, we perform a second test to measure the amount of impairment loss, if any. To measure the amount of any impairment loss, we determine the fair value of goodwill in the same manner as if our reporting unit were being acquired in a business combination. Specifically, we allocate the fair value of the reporting unit to all of the assets and liabilities of that unit, including any unrecognized intangible assets, in a hypothetical calculation that would yield the estimated fair value of goodwill. If the estimated fair value of goodwill is less than the goodwill recorded on our balance sheet, we record an impairment charge for the difference.

VENDOR CONSIDERATION. We receive payments and credits from vendors, including consideration pursuant to volume sales incentive programs, volume purchase incentive programs and shared marketing expense programs. Many of these programs extend over one or more quarters’ sales activities and are primarily formula-based. Different programs have different vendor/program specific goals to achieve. These programs can be very complex to calculate and, in some cases, targets are estimated based upon historical data.

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Vendor consideration received pursuant to volume sales incentive programs is recognized as a reduction to cost of sales, product and services on our unaudited condensed consolidated statements of operations. Vendor consideration received pursuant to volume purchase incentive programs is allocated to inventories based on the applicable incentives from each vendor and is recorded in cost of sales, product and services, as the inventory is sold. Vendor consideration received pursuant to shared marketing expense programs is recorded as a reduction of the related selling and administrative expenses in the period the program takes place only if the consideration represents a reimbursement of specific, incremental, identifiable costs. Consideration that exceeds the specific, incremental, identifiable costs is classified as a reduction of cost of sales, product and services on our unaudited condensed consolidated statements of operations.

RESERVES FOR CREDIT LOSSES. We maintain our reserves for credit losses at a level believed by management to be adequate to absorb potential losses inherent in the respective balances. We assign an internal credit quality rating to all new customers and update these ratings regularly, but no less than annually. Management’s determination of the adequacy of the reserve for credit losses for our accounts and notes receivable is based on the age of the receivable balance, the customer’s credit quality rating, an evaluation of historical credit losses, current economic conditions, and other relevant factors.

Management’s determination of the adequacy of the reserve for credit losses for minimum lease payments associated with investments in direct financing and sales-type leases may be based on the following factors: an internally assigned credit quality rating, historical credit loss experience, current economic conditions, volume, growth, the composition of the lease portfolio, the fair value of the underlying collateral, and the funding status (i.e. not funded, funded on a recourse or partial recourse basis, or funded on non-recourse basis).

The reserve for credit losses for the six months ended September 30, 2012 and year ended March 31, 2012 included a specific reserve of $2.9 million due to a specific customer, which filed for bankruptcy.

RESERVES FOR SALES RETURNS. Sales are reported net of returns and allowances, which are maintained at a level believed by management to be adequate to absorb potential sales returns from product and services. Management’s determination of the adequacy of the reserve is based on an evaluation of historical sales returns and other relevant factors. These determinations require considerable judgment in assessing the ultimate potential for sales returns and include consideration of the type and volume of product sold.

INCOME TAXES. We make certain estimates and judgments in determining income tax expense for financial statement reporting purposes. These estimates and judgments occur in the calculation of certain tax assets and liabilities, which principally arise from differences in the timing of recognition of revenue and expense for tax and financial statement reporting purposes. We also must analyze income tax reserves, as well as determine the likelihood of recoverability of deferred tax assets, and adjust any valuation allowances accordingly.

Considerations with respect to the recoverability of deferred tax assets include the period of expiration of the tax asset, planned use of the tax asset, and historical and projected taxable income as well as tax liabilities for the tax jurisdiction to which the tax asset relates. Valuation allowances are evaluated periodically and will be subject to change in each future reporting period as a result of changes in one or more of these factors. The calculation of our tax liabilities also involves considering uncertainties in the application of complex tax regulations. We recognize liabilities for uncertain income tax positions based on our estimate of whether, and the extent to which, additional taxes will be required.

BUSINESS COMBINATIONS. We account for business combinations using the acquisition method, which requires that the total purchase price of each of the acquired entities be allocated to the assets acquired and liabilities assumed based on their fair values at the acquisition date. The purchase price of the acquired entities may include an estimate of the fair value of contingent consideration. The allocation process requires an analysis of intangible assets, customer relationships, trade names, acquired contractual rights and assumed contractual commitments and legal contingencies to identify and record all assets acquired and liabilities assumed at their fair value.

Any excess of the purchase price over the fair value of assets acquired and liabilities assumed is recorded as goodwill. To the extent the purchase price is less than the fair value of assets acquired and liabilities assumed, we recognize a gain in our unaudited condensed statement of operations. The results of operations for an acquired company are included in our financial statements from the date of acquisition.

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RESULTS OF OPERATIONS

The Three and Six months Ended September 30, 2012 Compared to the Three and Six months Ended September 30, 2011

Technology Sales Business Segment

The results of operations for our technology sales business segment for the three and six months ended September 30, 2012 and 2011 were as follows (in thousands):

	Three months ended September 30,									Six months ended September 30,
	2012		2011		Change					2012		2011		Change
Sales of product and services	$	250,178	$	193,493	$	56,685		29.3	%	$	484,460	$	362,814	$	121,646		33.5	%
Fee and other income		1,591		2,128		(537	)	(25.2	%)		3,593		4,037		(444	)	(11.0	%)
Total revenues		251,769		195,621		56,148		28.7	%		488,053		366,851		121,202		33.0	%
Cost of sales, products and services		205,199		158,429		46,770		29.5	%		399,590		299,103		100,487		33.6	%
Professional and other fees		2,260		1,986		274		13.8	%		4,763		4,060		703		17.3	%
Salaries and benefits		24,414		21,717		2,697		12.4	%		48,496		42,379		6,117		14.4	%
General and administrative		5,011		4,267		744		17.4	%		9,450		8,034		1,416		17.6	%
Interest and financing costs		21		19		2		10.5	%		52		39		13		33.3	%
Total costs and expenses		236,905		186,418		50,487		27.1	%		462,351		353,615		108,736		30.7	%
Earnings before provision for income taxes	$	14,864	$	9,203	$	5,661		61.5	%	$	25,702	$	13,236	$	12,466		94.2	%

Total revenues. Total revenues during the three months ended September 30, 2012 were $251.8 million compared to $195.6 million during the three months ended September 30, 2011, an increase of 28.7%, which is due to increases in demand for our products and services, particularly from Fortune 100 companies. Total revenues increased 33.0% during the six months ended September 30, 2012 and totaled $488.1 million compared to $366.9 million for the six months ended September 30, 2011. We experienced sequential and year over year increases in the sales of products and services during the quarters ended September 30, 2012 and 2011, except for a slight decrease in sequential revenues during the quarter ended March 31, 2012, as we had higher demand for our product and services during our second and third fiscal year quarters. The sequential and year over year changes in products and services is summarized below.

	Sequential			Year over Year
September 30, 2011		14.3	%		10.6	%
December 31, 2011		9.7	%		16.4	%
March 31, 2012		-1.2	%		26.3	%
June 30, 2012		11.7	%		38.4	%
September 30, 2012		6.8	%		29.3	%

We rely on our vendors to fulfill shipments to our customers, which have been occurring on a regular basis. Our average open orders for the twelve months ended September 30, 2012 and 2011 were $65.3 million and $49.2 million, respectively. In addition, we had deferred revenue of $17.0 million at September 30, 2012, compared to $25.4 million at September 30, 2011, relating to product and service arrangements that were not completed at September 30, 2012.

Total costs and expenses. Total costs and expenses for the three months ended September 30, 2012 increased $50.5 million or 27.1%, to $236.9 million due to increases in cost of sales of products and services, salaries and benefits and general and administrative expenses. Total costs and expenses for the six months ended September 30, 2012 increased $108.7 million or 30.7%, to $462.4 million.  The increase in cost of sales, products and services was consistent with the increase in sales revenues of products and services. Our gross margin on sales of products and services was 18.0% and 18.1% during the three months ended September 30, 2012 and 2011, respectively, and 17.5% and 17.6% during the six months ended September 30, 2012 and 2011, respectively. Our gross margin on sales of products and services was 17.0% for the three months ended June 30, 2012 and increased sequentially due to higher sales of third party software assurance, maintenance and services, which are presented on a net basis. Gross margins are affected by the customer product mix as well as additional vendor incentives earned. The change in the amount of vendor incentives earned during the three months ended September 30, 2012 compared to the three months ended September 30, 2011 resulted in a 0.1% decrease in gross margins for products and services.  The vendor incentives did not affect any change in gross margins for the six months ended September 30, 2012 from the prior year. There are ongoing changes to the incentives programs offered to us by our vendors. Accordingly, if we are unable to maintain the level of manufacturer incentives we are currently receiving, gross margins may decrease.

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Professional and other fees increased $274 thousand, or 13.8%, to $2.3 million, compared to $2.0 million during the three months ended September 30, 2011. These increases are primarily due to fees related to the restatement of our financial statements. Patent infringement litigation costs remained at $0.7 million for the three months ended September 30, 2012 and 2011. Professional and other fees increased $0.7 million, or 17.3%, to $4.8 million, compared to $4.1 million during the six months ended September 30, 2011. The increases are primarily due to higher fees related to the restatement of our financial statements and other legal fees of $1.5 million. Offsetting this increase was a decrease in fees related to the patent infringement litigation of $0.8 million for the six months ended September 30, 2012.

Salaries and benefits expense increased $2.7 million, or 12.4%, to $24.4 million, compared to $21.7 million during the three months ended September 30, 2011. This increase was driven by increases in the number of employees and commission expenses.  Salaries and benefits expense increased $6.1 million, or 14.4%, to $48.5 million, compared to $42.4 million during the six months ended September 30, 2011. Our technology sales business segment had 793 employees as of September 30, 2012, an increase of 93 from 700 at September 30, 2011. A total of 63 employees were added as a result of the two acquisitions we completed over the last twelve months. Most of the increase in personnel relates to sales, marketing and engineering personnel. We continue to invest in sales and support personnel through hiring and strategic acquisitions in order to expand our geographical presence in the continental U.S. as well as extend our advanced technology solutions offerings. In addition, commission expenses increased due to the increase in the gross profit from sales of products and services.

General and administrative expenses increased $744 thousand, or 17.4%, and $1.4 million or 17.6% during the three and six months ended September 30, 2012, respectively, over the same periods for prior year. These increases were primarily due to increases in office locations and sales force as a result of our continued expansion efforts and acquisitions, which resulted in higher telecommunications, rent, utilities, travel and entertainment expense, and other marketing expenses. Amortization expense increased as a result of intangible assets acquired from acquisitions.

Segment earnings before tax. As a result of the foregoing, earnings before provision for income taxes increased $5.7 million, or 61.5%, and $12.5 million, or 94.2% for the three months and six months ended September 30, 2012, respectively, over prior year periods.

Financing Business Segment

The results of operations for our financing business segment for the three and six months ended September 30, 2012 and 2011 were as follows (in thousands):

	Three months ended September 30,									Six months ended September 30,
	2012		2011		Change					2012		2011		Change
Financing revenue	$	7,413	$	7,305	$	108		1.5	%	$	15,313	$	14,739	$	574		3.9	%
Fee and other income		869		729		140		19.2	%		1,409		964		445		46.2	%
Total revenues		8,282		8,034		248		3.1	%		16,722		15,703		1,019		6.5	%
Direct lease costs		2,461		2,078		383		18.4	%		4,704		4,174		530		12.7	%
Professional and other fees		447		369		78		21.1	%		1,057		720		337		46.8	%
Salaries and benefits		2,505		2,373		132		5.6	%		4,777		4,717		60		1.3	%
General and administrative		400		240		160		66.7	%		616		506		110		21.7	%
Interest and financing costs		425		329		96		29.2	%		799		691		108		15.6	%
Total costs and expenses		6,238		5,389		849		15.8	%		11,953		10,808		1,145		10.6	%
Earnings before provision for income taxes	$	2,044	$	2,645	$	(601	)	(22.7	%)	$	4,769	$	4,895	$	(126	)	(2.6	%)

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Total revenues. Total revenues increased by $248 thousand, or 3.1%, to $8.3 million for the three months ended September 30, 2012, as compared to the prior year. Financing revenues increased $108 thousand, or 1.5% for the three months ended September 30, 2012, as compared to the prior year. Total revenues increased by $1.0 million, or 6.5%, to $16.7 million for the six months ended September 30, 2012, as compared to the prior year. Financing revenues increased $574 thousand, or 3.9% for the six months ended September 30, 2012, as compared to the prior year, due to an increase in the net gain on sales of financial assets. At September 30, 2012, we had $130.5 million of investment in notes and leases, compared to $113.2 million at September 30, 2011, an increase of $17.3 million or 15.3%. The increase in our portfolio was largely due to new notes receivables from several federal and state governments and agencies and large corporations. Fee and other income increased $140 thousand and $445 thousand for the three and six months ended September 30, 2012 over prior year due to increases in remarketing income.

Total costs and expenses. Total costs and expenses increased $849 thousand, or 15.8%. Direct lease costs increased $383 thousand, or 18.4%, to $2.5 million partly due to increases in depreciation expense for equipment operating leases. General and administrative expenses increased $160 thousand for the three months ended September 30, 2012, as compared to the prior year, due to higher reserves for credit loses.

During the six months ended September 30, 2012, total costs and expenses increased $1.1 million, or 10.6%, mostly driven by increases in direct lease costs and professional and other fees. Direct lease costs increased $530 thousand, or 12.7%, to $4.7 million partly due to increases in depreciation expense for equipment under operating lease during the six months ended September 30, 2012. Professional and other fees increased by $337 thousand, or 46.8%, to $1.1 million due to legal fees and outside services for software. General and administrative expenses increased $110 thousand, or 21.7%, to $616 thousand during the six months ended September 30, 2012 over the prior year six month period, due to reserves for credit losses.

Salaries and benefits expense has remained consistent with prior periods. The number of personnel employed decreased slightly to 58 as of September 30, 2012 from 59 as of September 30, 2011.

Interest and financing costs increased $96 thousand, or 29.2%, and $108 thousand, or 15.6%during the three months and six months ended September 30, 2012, as compared to the same periods last year due to the increase in non-recourse and recourse notes payable to $34.7 million at September 30, 2012 as compared to $23.0 million at September 30, 2011.

Segment earnings before tax. As a result of the foregoing, earnings before provision for income taxes decreased $601 thousand, or 22.7%, to $2.0 million for the three months ended September 30, 2012 and segment earnings decreased $126 thousand, or 2.6%, to $4.8 million for the six months ended September 30, 2012.

Consolidated

Income taxes. Our provision for income tax expense increased $2.1 million to $6.9 million for the three months ended September 30, 2012, and increased $5.0 million to $12.4 million for the six months ended September 30, 2012 as compared to the same periods last year. Our effective income tax rates for the three months and six months ended September 30, 2012 were 40.7% and 40.6%, respectively, as compared to 40.4% and 40.6% for the three months and six months ended September 30, 2011.

Net earnings. The foregoing resulted in net earnings of $10.0 million for the three months ended September 30, 2012, an increase of 42.0%, as compared to $7.1 million during the three months ended September 30, 2011.  For the six months ended September 30, 2012, net earnings were $18.1 million, an increase of 68.1%, as compared to $10.8 million during the six months ended September 30, 2011.

Basic and fully diluted earnings per common share were $1.29 and $1.27, respectively, for the three months ended September 30, 2012, as compared to $0.87 and $0.85, for the three months ended September 30, 2011. Basic and fully diluted earnings per common share were $2.34 and $2.29, respectively, for the six months ended September 30, 2012, as compared to $1.31 and $1.28, for the six months ended September 30, 2011.

Weighted average common shares outstanding used in the calculation of basic and diluted earnings per common share for the three months ended September 30, 2012 were 7,770,206 and 7,920,927, respectively. Weighted average common shares outstanding used in the calculation of basic and diluted earnings per common share for the three months ended September 30, 2011 were 8,153,495 and 8,327,748, respectively.

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Weighted average common shares outstanding used in the calculation of basic and diluted earnings per common share for the six months ended September 30, 2012 were 7,745,506 and 7,912,818, respectively. Weighted average common shares outstanding used in the calculation of basic and diluted earnings per common share for the six months ended September 30, 2011 were 8,230,022 and 8,422,099, respectively.

LIQUIDITY AND CAPITAL RESOURCES

Liquidity Overview

Our primary sources of liquidity have historically been cash and cash equivalents, internally generated funds from operations, and borrowings, both non-recourse and recourse. We have used those funds to meet our capital requirements, which have historically consisted primarily of working capital for operational needs, capital expenditures, purchases of equipment for lease, payments of principal and interest on indebtedness outstanding, acquisitions and the repurchase of shares of our common stock.

Our subsidiary ePlus Technology, inc., part of our technology sales business segment, finances its operations with funds generated from operations, and with a credit facility with GECDF, which is described in more detail below. There are two components of this facility: (1) a floor plan component; and (2) an accounts receivable component. After a customer places a purchase order with us and we have completed our credit check, we place an order for the equipment with one of our vendors. Generally, most purchase orders from us to our vendors are first financed under the floor plan component and reflected in “accounts payable—floor plan” in our unaudited condensed consolidated balance sheets. Payments on the floor plan component are due on three specified dates each month, generally 30-60 days from the invoice date. On the due date of the invoices financed by the floor plan component, the invoices are paid by the accounts receivable component of the credit facility. The balance of the accounts receivable component is then reduced by payments from our available cash. The outstanding balance under the accounts receivable component is recorded as recourse notes payable on our unaudited condensed consolidated balance sheets. There was no outstanding balance at September 30, 2012 or March 31, 2012, while the maximum credit limit was $30.0 million for both periods. The borrowings and repayments under the floor plan component are reflected as “net borrowings on floor plan facility” in the cash flows from financing activities section of our unaudited condensed consolidated statements of cash flows.

Most customer payments in our technology sales business segment are remitted to our lockboxes. Once payments are cleared, the monies in the lockbox accounts are automatically transferred to our operating account on a daily basis. On the due dates of the floor plan component, we make cash payments to GECDF. These payments from the accounts receivable component to the floor plan component and repayments from our cash are reflected as “Net borrowings on floor plan facility” in the cash flows from financing activities section of our unaudited condensed consolidated statements of cash flows. We engage in this payment structure in order to minimize our interest expense and bank fees in connection with financing the operations of our technology sales business segment.

We believe that cash on hand, and funds generated from operations, together with available credit under our credit facility, will be sufficient to finance our working capital, capital expenditures and other requirements for at least the next twelve calendar months.

Our ability to continue to fund our planned growth, both internally and externally, is dependent upon our ability to generate sufficient cash flow from operations or to obtain additional funds through equity or debt financing, or from other sources of financing, as may be required. While at this time we do not anticipate requiring any additional sources of financing to fund operations, if demand for IT products declines, our cash flows from operations may be substantially affected.

Cash Flows

The following table summarizes our sources and uses of cash over the periods indicated (in thousands):

	Six months ended  September 30,
	2012			2011
Net cash used in operating activities	$	(7,393	)	$	(20,125	)
Net cash  provided by (used in) investing activities		5,607			(2,613	)
Net cash provided by (used in) financing activities		11,937			(7,592	)
Effect of exchange rate changes on cash		6			(20	)
Net increase (decrease) in cash and cash equivalents	$	10,157		$	(30,350	)

Net cash (used in) provided by operating activities. Cash used in operating activities totaled $7.4 million during the six months ended September 30, 2012, compared to $20.1 million during the same period last year. Cash used during the six months ended September 30, 2012 resulted primarily from increases in accounts receivable of $19.6 million, decreases in accounts payable—equipment and accounts payable – trade of $11.1 million, accrued expenses and other liabilities of $4.9 million, partially offset by a reduction in inventories of $7.6 million, depreciation and amortization expenses of $5.6 million and notes receivable of $1.0 million.

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Net cash provided by (used in) investing activities. Cash provided by investing activities was $5.6 million during the six months ended September 30, 2012 compared to cash used in investing activities of $2.6 million during the same period last year. Cash provided by investing activities during the six months ended September 30, 2012 was primarily driven by a net decrease in notes receivable of $5.6 million, and a decrease in short-term investments of $5.4 million, offset by purchases of property, equipment and operating lease equipment of $6.2 million.

Net cash provided by (used in) financing activities. Cash provided by financing activities was $11.9 million during the six months ended September 30, 2012 compared to cash used in financing activities of $7.6 million during the same period last year. Cash provided by financing activities during the six months ended September 30, 2012 was primarily due to net borrowings of notes payable of $14.1 million, partially offset by repurchases of our common stock of $1.6 million and net repayments on floor plan facility of $1.5 million

Non-Cash Activities

We assign lease payments to third-party financial institutions, which are accounted for as non-recourse notes payable financing activities. As a condition to the assignment agreement, certain financial institutions may request that lessees remit their lease payments to a trustee rather than to us, and the trustee pays the financial institution. Alternatively, if the structure of the agreement does not require a trustee, the lessee will continue to make payments to us, and we will remit the payment to the financial institution. The economic impact to us under either assignment structure is similar, in that the assigned lease receivable is paid by the lessee and remitted to the lender to pay down the corresponding non-recourse notes payable. However, these assignment structures are classified differently within our unaudited condensed consolidated statement of cash flows. More specifically, we are required to exclude non-cash transactions from our unaudited condensed consolidated statement of cash flows, so lease payments made by the lessee to the trustee are excluded from our operating cash receipts and the corresponding re-payment of the non-recourse notes payable from the trustee to the third party financial institution are excluded from our cash flows from financing activities. Given the assignment of lease payment is economically the same regardless of the structure of the payments, we evaluate our cash flows from operating and financing activities as if the assignments of lease payments had been structured without an intermediary.

The non-GAAP financial measure for our cash flows from operating activities for the six months ended September 30, 2012 and 2011 is as follows (in thousands):

	Six months ended  September 30,
	2012			2011
GAAP: net cash used in operating activities	$	(7,393	)	$	(20,125	)
Principal payments from lessees directly to lenders		7,374			8,627
Non-GAAP: adjusted net cash provided by (used in) operating activities	$	(19	)	$	(11,498	)

The non-GAAP financial measure for our cash flows from financing activities for the six months ended September 30, 2012 and 2011 is as follows (in thousands):

	Six months ended  September 30,
	2012			2011
GAAP: net cash provided by (used in) financing activities	$	11,937		$	(7,592	)
Principal payments from lessees directly to lenders		(7,374	)		(8,627	)
Non-GAAP: adjusted net cash provided by (used in) financing activities	$	4,563		$	(16,219	)

A “non-GAAP financial measure” is a numerical measure of a company’s historical or future financial performance, financial position or cash flows that excludes amounts, or is subject to adjustments that have the effect of excluding amounts, that are included in the most directly comparable measure calculated and presented in accordance with U.S. GAAP in the statement of income, balance sheet or statement of cash flows of the company; or includes amounts, or is subject to adjustments that have the effect of including amounts, that are excluded from the most directly comparable measure so calculated and presented. We use the financial measures in our internal evaluation and management of our business. We believe that these measures and the information they provide are useful to investors because they permit investors to view our performance using the same tools that we use and to better evaluate our ongoing business performance. These measures should not be considered an alternative to measurements required by U.S. GAAP, such as cash (used in) provided by operating activities and cash (used in) provided by financing activities. These non-GAAP measures are unlikely to be comparable to non-GAAP information provided by other companies.

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Liquidity and Capital Resources

We may utilize non-recourse notes payable to finance approximately 80% to 100% of the purchase price of the products being leased by our customers.  Any balance of the purchase price remaining after non-recourse funding and any upfront payments received from the lessee (our equity investment in the equipment) must generally be financed by cash flows from our operations, the sale of the equipment leased to third parties, or other internal means. Although we expect that the credit quality of our leases and our residual return history will continue to allow us to obtain such financing, such financing may not be available on acceptable terms, or at all.

The financing necessary to support our leasing activities has been provided by our cash and non-recourse borrowings. We monitor our exposure closely. Historically, we have obtained recourse and non-recourse borrowings from banks and finance companies. We continue to be able to obtain financing through our traditional lending sources. Non-recourse financings are loans whose repayment is the responsibility of a specific customer, although we may make representations and warranties to the lender regarding the specific contract or have ongoing loan servicing obligations. Under a non-recourse loan, we borrow from a lender an amount based on the present value of the contractually committed lease payments under the lease at a fixed rate of interest, and the lender secures a lien on the financed assets. When the lender is fully repaid from the lease payments, the lien is released and all further rental or sale proceeds are ours. We are not liable for the repayment of non-recourse loans unless we breach our representations and warranties in the loan agreements. The lender assumes the credit risk of each lease, and the lender’s only recourse, upon default by the lessee, is against the lessee and the specific equipment under lease. At September 30, 2012, our non-recourse notes payable portfolio increased 25.4% to $33.0 million, as compared to $26.3 million at March 31, 2012. Recourse notes payable remained stable at $1.7 million as of September 30, 2012 and March 31, 2012.

Whenever desirable, we arrange for equity investment financing, which includes selling lease payments, including the residual portions, to third parties and financing the equity investment on a non-recourse basis. We generally retain customer control and operational services, and have minimal residual risk. We usually reserve the right to share in remarketing proceeds of the equipment on a subordinated basis after the investor has received an agreed-to return on its investment.

Credit Facility — Technology Business

Our subsidiary, ePlus Technology, inc., has a financing facility from GECDF to finance its working capital requirements for inventories and accounts receivable. There are two components of this facility: (1) a floor plan component; and (2) an accounts receivable component.  This facility has full recourse to ePlus Technology, inc. and is secured by a blanket lien against all its assets, such as chattel paper, receivables and inventory.  As of September 30, 2012, the facility had an aggregate limit of the two components of $175.0 million with an accounts receivable sub-limit of $30.0 million. The credit facility with GECDF was amended and restated in July, 2012 which increased the credit limit from $125 million to $175 million and modified the covenants, interest rate and other requirements within the facility.

The credit facility has full recourse to ePlus Technology, inc. and is secured by a blanket lien against all its assets, such as receivables and inventory. Availability under the facility may be limited by the asset value of equipment we purchase or accounts receivable, and may be further limited by certain covenants and terms and conditions of the facility. These covenants include but are not limited to a minimum excess availability of the facility and minimum earnings before interest, taxes, depreciation and amortization (EBITDA) of ePlus Technology, inc. Management believes we were in compliance with these covenants as of September 30, 2012. In addition, the facility restricts the ability of ePlus Technology, inc. to transfer funds to its affiliates in the form of dividends, loans or advances with certain exceptions for dividends to ePlus inc.  Interest on the facility is assessed at a rate of the One Month Libor plus two and one half percent if the payments are not made on the three specified dates each month. The facility also requires that financial statements of the Company be provided within 45 days of each quarter and 90 days of each fiscal year end and also includes that other operational reports be provided on a regular basis. Either party may terminate with 90 days advance written notice.

We are not, and do not believe that we are reasonably likely to be, in breach of the GECDF credit facility. In addition, we do not believe that the covenants of the GECDF credit facility materially limit our ability to undertake financing.  In this regard, the covenants apply only to our subsidiary, ePlus Technology, inc. This credit facility is secured by the assets of only ePlus Technology, inc. and the guaranty as described below. We were in compliance with these covenants as of September 30, 2012.

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The facility provided by GECDF requires a guaranty of $10.5 million by ePlus inc. The guaranty requires ePlus inc. to deliver its annual audited financial statements by certain dates. We have delivered the annual audited financial statements for the year ended March 31, 2012, as required. The loss of the GECDF credit facility could have a material adverse effect on our future results as we currently rely on this facility and its components for daily working capital and liquidity for our technology sales business segment and as an operational function of our accounts payable process.

Floor Plan Component

The traditional business of ePlus Technology, inc. as a seller of computer technology, related peripherals and software products, is in part financed through a floor plan component in which interest expense for the first thirty to forty-five days, in general, is not charged. The floor plan liabilities are recorded as accounts payable—floor plan on our unaudited condensed consolidated balance sheets, as they are normally repaid within the fifteen to sixty-day time frame and represent assigned accounts payable originally generated with the manufacturer/distributor. In some cases we are able to pay invoices early and receive a discount, but if the fifteen to sixty-day obligation is not paid timely, interest is then assessed at stated contractual rates.

The respective floor plan component credit limits and actual outstanding balances for the dates indicated were as follows (in thousands):

Maximum Credit Limit at September 30, 2012		Balance as of  September 30, 2012		Maximum Credit Limit at March 31, 2012		Balance as of  March 31, 2012
$	175,000	$	84,366	$	125,000	$	85,911

Accounts Receivable Component

Included within the credit facility, ePlus Technology, inc. has an accounts receivable component from GECDF, which has a revolving line of credit. On the due date of the invoices financed by the floor plan component, the invoices are paid by the accounts receivable component of the credit facility. The balance of the accounts receivable component is then reduced by payments from our available cash. The outstanding balance under the accounts receivable component is recorded as recourse notes payable on our unaudited condensed consolidated balance sheets. There was no outstanding balance at September 30, 2012 or March 31, 2012, while the maximum credit limit was $30.0 million for both periods.

Credit Facility — General

1st Commonwealth Bank of Virginia provides us with a $0.5 million credit facility, which matured on October 26, 2012. This credit facility was renewed for two years effective October 27, 2012. The credit facility is available for use by us and our affiliates and is full recourse to us. Borrowings under this facility bear interest at Wall Street Journal U.S. Prime rate plus 1%. The primary purpose of the facility is to provide letters of credit for landlords, taxing authorities and bids.  As of September 30, 2012, we have no outstanding balance on this credit facility.

Performance Guarantees

In the normal course of business, we may provide certain customers with performance guarantees, which are generally backed by surety bonds. In general, we would only be liable for the amount of these guarantees in the event of default in the performance of our obligations. We are in compliance with the performance obligations under all service contracts for which there is a performance guarantee, and we believe that any liability incurred in connection with these guarantees would not have a material adverse effect on our unaudited condensed consolidated financial statements.

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Off-Balance Sheet Arrangements

As part of our ongoing business, we do not participate in transactions that generate relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities, which would have been established for the purpose of facilitating off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K or other contractually narrow or limited purposes. As of September 30, 2012, we were not involved in any unconsolidated special purpose entity transactions.

Adequacy of Capital Resources

The continued implementation of our business strategy will require a significant investment in both resources and managerial focus. In addition, we may selectively acquire other companies that have attractive customer relationships and skilled sales forces. We may also start offices in new geographic areas, which may require a significant investment of cash. We may also acquire technology companies to expand and enhance the platform of bundled solutions to provide additional functionality and value-added services. As a result, we may require additional financing to fund our strategy, implementation and potential future acquisitions, which may include additional debt and equity financing.

Inflation

For the periods presented herein, inflation has been relatively low and we believe that inflation has not had a material effect on our results of operations.

Potential Fluctuations in Quarterly Operating Results

Our future quarterly operating results and the market price of our common stock may fluctuate.  In the event our revenues or earnings for any quarter are less than the level expected by securities analysts or the market in general, such shortfall could have an immediate and significant adverse impact on the market price of our common stock. Any such adverse impact could be greater if any such shortfall occurs near the time of any material decrease in any widely followed stock index or in the market price of the stock of one or more public equipment leasing and financing companies, IT resellers, software competitors, major customers or vendors of ours.

Our quarterly results of operations are susceptible to fluctuations for a number of reasons, including, but not limited to, reduction in IT spending, our entry into the e-commerce market, any reduction of expected residual values related to the equipment under our leases, the timing and mix of specific transactions, the reduction of manufacturer incentive programs, and other factors. Quarterly operating results could also fluctuate as a result of our sale of equipment in our lease portfolio, at the expiration of a lease term or prior to such expiration, to a lessee or to a third party.  Such sales of equipment may have the effect of increasing revenues and net income during the quarter in which the sale occurs, and reducing revenues and net income otherwise expected in subsequent quarters.  See Part I, Item 1A, “Risk Factors,” in our 2012 Annual Report.

We believe that comparisons of quarterly results of our operations are not necessarily meaningful and that results for one quarter should not be relied upon as an indication of future performance.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Although a portion of our liabilities are non-recourse, fixed-interest-rate instruments, we utilize our line of credit and other financing facilities which are subject to fluctuations in short-term interest rates. These instruments, which are denominated in U.S. dollars, were entered into for other than trading purposes and, with the exception of amounts drawn under the GECDF facility, bear interest at a fixed rate. Because the interest rate on these instruments is fixed, changes in interest rates will not directly impact our cash flows. Borrowings under the GECDF facility bear interest at a market-based variable rate. As of September 30, 2012, the aggregate fair value of our non-recourse notes payable approximated their carrying value.

We have financed certain customer leases for equipment which is located in Canada and Iceland. As such, we have entered into lease contracts and non-recourse, fixed-interest-rate financing denominated in Canadian dollars and Icelandic krona. To date, our Canadian and Icelandic operations have been insignificant and we believe that potential fluctuations in currency exchange rates will not have a material effect on our financial position.

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Item 4. Controls and Procedures

As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer (“CEO”) and our Chief Financial Officer (“CFO”), of the effectiveness of the design and operation of our disclosure controls and procedures, or “disclosure controls,” as defined in Securities Exchange Act of 1934 (“Exchange Act”) Rule 13a-15(e). Disclosure controls are controls and procedures designed to reasonably ensure that information required to be disclosed in our reports filed under the Exchange Act, such as this quarterly report, is recorded, processed, summarized and reported within the time periods specified in the U.S. Securities and Exchange Commission’s rules and forms. Disclosure controls include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to our management, including our CEO and CFO, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure. Our disclosure controls include some, but not all, components of our internal control over financial reporting. Based upon that evaluation, our CEO and CFO concluded that our disclosure controls and procedures were effective as of September 30, 2012.

Changes in Internal Controls

There have not been any other changes in our internal control over financial reporting during the quarter ended September 30, 2012, which have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Limitations on the Effectiveness of Controls

Our management, including our CEO and CFO, does not expect that our disclosure controls or our internal control over financial reporting will prevent or detect all errors and all fraud. A control system cannot provide absolute assurance due to its inherent limitations; it is a process that involves human diligence and compliance and is subject to lapses in judgment and breakdowns resulting from human failures. A control system also can be circumvented by collusion or improper management override. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of such limitations, disclosure controls and internal control over financial reporting cannot prevent or detect all misstatements, whether unintentional errors or fraud. However, these inherent limitations are known features of the financial reporting process; therefore, it is possible to design into the process safeguards to reduce, though not eliminate, this risk.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

In June 2007 ePlus Group, inc. filed a suit in the United States District Court for the Western District of Michigan against The Huntington National Bank (“Huntington”). The complaint alleges counts of aiding and abetting fraud, aiding and abetting conversion, and statutory conversion, relating to our former customer, Cyberco Holdings, Inc, which was perpetrating a scam. Summary judgment was granted in favor of Huntington with regard to our claims in the suit. A final judgment was entered in February 2012, and in March 2012 we filed an appeal with the United States Court of Appeals for the Sixth Circuit. While we believe we have a basis for these claims to recover certain of our losses related to Cyberco, we cannot predict whether we will be successful in our claims for damages, whether any award ultimately received will exceed the costs incurred to pursue this matter, or how long it will take to bring this matter to resolution.

We are the plaintiff in a lawsuit in the United States District Court for the Eastern District of Virginia (“the trial court”) in which a jury unanimously found that Lawson Software, Inc. (“Lawson”) infringed certain ePlus patents. The jury verdict, which was reached on January 27, 2011, also found that all of ePlus’ patent claims tried in court were not invalid. On May 23, 2011, the trial court issued a permanent injunction, ordering Lawson and its successors to: immediately stop selling and servicing products relating to its electronic procurement systems that infringe our patents; cease providing any ongoing or future maintenance, training or installation of its infringing products; and refrain from publishing any literature or information that encourages the use or sale of its infringing products. . We have filed a motion seeking a finding that Lawson is in contempt of the injunction. We currently do not have a hearing date for our motion. Lawson has appealed the trial court’s ruling. We also have appealed the trial court’s evidentiary ruling which precluded us from seeking monetary damages. Oral argument on the appeal of the trial court’s ruling was held on June 6, 2012. Court calendars are inherently unpredictable and we cannot predict when the court will issue a ruling.

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We may become party to various legal proceedings arising in the ordinary course of business including preference payment claims asserted in customer bankruptcy proceedings, claims of alleged infringement of patents, trademarks, copyrights and other intellectual property rights, claims of alleged non-compliance with contract provisions, employment related claims, claims by competitors, vendors or customers, and claims related to alleged violations of laws and regulations. Although we do not expect that the outcome in any of these matters, individually or collectively, will have a material adverse effect on our financial condition or results of operations, litigation is inherently unpredictable. Therefore, judgments could be rendered or settlements entered that could adversely affect our results of operations or cash flows in a particular period. We provide for costs related to contingencies when a loss is probable and the amount is reasonably determinable.

Other Matters

Item 1A. Risk Factors

There have not been any material changes in the risk factors in Part I, Item IA of our Annual Report on Form 10-K for fiscal year ended March 31, 2012, except as updated in our subsequently filed Forms 10-Q.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

The following table provides information regarding our purchases of ePlus inc. common stock during the six months ended September 30, 2012.

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, 2012 through April 30, 2012		10,401	$	29.47		10,401		436,044	(2	)
May 1, 2012 through May 31, 2012		9,022	$	29.45		9,022		427,022	(3	)
June 1, 2012 through June 30, 2012		17,198	$	33.57		-		427,022	(4	)
July 1, 2012 through July 31, 2012		-		-		-		427,022	(5	)
August 1, 2012 through August 31, 2012		11,609	$	35.14		-		427,022	(6	)
September 1, 2012 through September 15, 2012		-		-		-		427,022	(7	)
September 16, 2012 through September 30, 2012		-		-		-		500,000	(8	)

(1) All shares acquired were in open-market purchases, except for 28,807 shares, which were repurchased 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, 2012 had purchase limitations on the number of shares of up to 500,000 shares. As of April 30, 2012, the remaining authorized shares to be purchased were 436,044.

(3) The share purchase authorization in place for the month ended May 31, 2012 had purchase limitations on the number of shares of up to 500,000 shares. As of May 31, 2012, the remaining authorized shares to be purchased were 427,022.

(4) The share purchase authorization in place for the month ended June 30, 2012 had purchase limitations on the number of shares of up to 500,000 shares. As of June 30, 2012, the remaining authorized shares to be purchased were 427,022.

(5) The share purchase authorization in place for the month ended July 31, 2012 had purchase limitations on the number of shares of up to 500,000 shares. As of July 31, 2012, the remaining authorized shares to be purchased were 427,022.

(6) The share purchase authorization in place for the month ended August 31, 2012 had purchase limitations on the number of shares of up to 500,000 shares. As of August 31, 2012, the remaining authorized shares to be purchased were 427,022.

(7) The share purchase authorization in place for the period from September 1 to September 15, 2012 had purchase limitations on the number of shares of up to 500,000 shares. As of September 15, 2012, the remaining authorized shares to be purchased were 427,022.

(8) On August 13, 2012 our Board authorized a share repurchase plan commencing on September 16, 2012. The share purchase authorization in place for the period from September 16 to September 30, 2012 had purchase limitations on the number of shares of up to 500,000 shares. As of September 30, 2012, the remaining authorized shares to be purchased were 500,000.

The timing and expiration date of the stock repurchase authorizations as well as an amendment to our current repurchase plan are included in Note 10, “Share Repurchase” to our unaudited condensed consolidated financial statements included elsewhere in this report.

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Item 3. Defaults Upon Senior Securities

Not Applicable.

Item 4.  Mine Safety Disclosures

Not Applicable.

Item 5. Other Information

None.

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Item 6. Exhibits

10.1	ePlus 2012 Employee Long-term Incentive Plan
31.1	Certification of the Chief Executive Officer of ePlus inc. pursuant to the Securities Exchange Act Rules    13a-14(a) and 15d-14(a).
31.2	Certification of the Chief Financial Officer of ePlus inc. pursuant to the Securities Exchange Act Rules 13a-14(a) and 15d-14(a).
32.0	Certification of the Chief Executive Officer and Chief Financial Officer of ePlus inc. pursuant to 18 U.S.C. § 1350.
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	ePlus inc.
Date: November 7, 2012	/s/ PHILLIP G. NORTON
	By: Phillip G. Norton, Chairman of the Board,
	President and Chief Executive Officer
	(Principal Executive Officer)
Date: November 7, 2012	/s/ ELAINE D. MARION
	By: Elaine D. Marion
	Chief Financial Officer
	(Principal Financial Officer)

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EX-10.1

Exhibit 10.1

2012 EMPLOYEE LONG-TERM INCENTIVE PLAN

Section 1.    Establishment and Purpose

(a) Purpose.  The purposes of this ePlus inc. 2012 Long-Term Incentive Plan (the “Employee Plan”) are to encourage Employees of ePlus inc. (together with any successor thereto, the “Company”) and its Affiliates (as defined below) to acquire a proprietary interest in the growth and performance of the Company, to generate an increased incentive to contribute to the Company’s future success and prosperity, thus enhancing the value of the Company for the benefit of its stockholders, and to enhance the ability of the Company and its Affiliates to attract and retain exceptionally qualified individuals upon whom, in large measure, the sustained progress, growth and profitability of the Company depend.

(b) Effective Date; Shareholder Approval.  The Plan is effective September 13, 2012, subject to approval by the Company’s shareholders.

Section 2.    Definitions

As used in the Employee Plan, the following terms shall have the meanings set forth below:

(a) “Affiliate” shall mean (i) any entity that, directly or through one or more intermediaries, is controlled by the Company and (ii) any entity in which the Company has no less than a 50% equity interest, as determined by the Committee.  With respect to Incentive Stock Options, “Affiliate” means any entity, domestic or foreign, whether or not such entity now exists or is hereafter organized or acquired by the Company or by an Affiliate that is a “subsidiary corporation” within the meaning of Code Section 424(d) and the rules thereunder.

(b) “Award” shall mean any Option, Stock Appreciation Right, Restricted Stock, Restricted Stock Unit, Performance Award, Dividend Equivalent, or Other Stock-Based Award granted under the Employee Plan.

(c) “Award Agreement” shall mean any written agreement, contract, or other instrument or document, including an electronic communication, evidencing any Award granted under the Employee Plan.

(d) “Board” shall mean the Board of Directors of the Company.

(e) “Cause” shall (except as otherwise provided in an Award Agreement) mean any of the following acts by the Participant, as determined by the Committee in its reasonable and good faith discretion: (i) failure to substantially perform his or her duties (other than as a result of Disability), after the Board or the executive to which the Participant reports delivers to the Participant a written demand for substantial performance that specifically identifies the manner in which the Participant has not substantially performed his or her duties; (ii) willful misconduct or gross negligence that is materially injurious to the Company or a subsidiary; (iii) prolonged absence from duty without consent by the Board or the executive to which the Participant reports (iv) breach of his or her duty of loyalty to the Company or a subsidiary; (v) removal without proper authorization from the premises of the Company or a subsidiary of a document (of any media or form) relating to the Company or a subsidiary or the customers of the Company or a subsidiary; (vi) breach of any confidentiality and/or non-compete agreement between him or her and the Company; or (vii) commission of a felony or a serious crime involving moral turpitude.

(f) “Change in Control” means an event that is “a change in the ownership or effective control of the corporation, or in the ownership of a substantial portion of the assets of the corporation" within the meaning of Section 409A and that also falls within one of the following events with respect to the Company:

(i) the consummation of any consolidation or merger of the Company in which the Company is not the continuing or surviving corporation or pursuant to which Common Stock would be converted into cash, securities or other property, other than a merger of the Company in which the holders of Common Stock immediately prior to the merger own more than fifty percent (50%) of the outstanding common stock of the surviving corporation immediately after the merger; or

(ii) the consummation of any sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all, or substantially all, of the assets of the Company, other than to a subsidiary or affiliate; or

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(iii) any action pursuant to which any person (which term may include two or more persons consistent with Section 13(d)(3) of the Exchange Act), corporation or other entity shall become the “beneficial owner” (as such term is defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of shares of capital stock entitled to vote generally for the election of directors of the Company (“Voting Securities”) representing more than fifty (50%) percent of the combined voting power of the Company’s then outstanding Voting Securities (calculated as provided in Rule 13d-3(d) in the case of rights to acquire any such securities); or

(iv) the individuals (x) who, as of the Effective Date, constitute the Board (the “Original Directors”) and (y) who thereafter are elected to the Board and whose election, or nomination for election, to the Board was approved by a vote of a majority of the Original Directors then still in office (such Directors being called “Additional Original Directors”) and (z) who thereafter are elected to the Board and whose election or nomination for election to the Board was approved by a vote of a majority of the Original Directors and Additional Original Directors then still in office, cease for any reason to constitute a majority of the members of the Board; or

(v) the dissolution or liquidation of the Company.

(g) “Code” shall mean the Internal Revenue Code of 1986, as amended from time to time.

(h) “Committee” shall mean the Compensation Committee of the Board of Directors of the Company, or such other committee as may be designated by the Board.  However, if a member of the Compensation Committee is not an “outside director” within the meaning of Section 162(m) of the Code or is not a “non-employee director” as defined in Rule 16b-3 under the Exchange Act, the Compensation Committee may from time to time delegate some or all of its functions under the Employee Plan to a committee or subcommittee composed of members that meet the relevant requirements but shall be no fewer than two (2) individuals or any other number that Rule 16b-3 or Code Section 162(m) may require from time to time.  The term “Committee” includes any such committee or subcommittee, to the extent of the Compensation Committee’s delegation.

(i) “Common Stock” shall mean shares of the Company’s common stock, par value $0.01 per share.

(j) “Disability” shall (except as otherwise provided in an Award Agreement) mean 1) any illness or other physical or mental condition of a Participant which renders the Participant incapable of performing his or her customary and usual duties for the Company (with or without a reasonable accommodation as required by law) and that in the judgment of the Committee is permanent and continuous in nature, and (2) the Committee or the Company or relevant Affiliate has provided written notice to the Participant that the Participant’s employment is terminated due to a permanent “Disability” pursuant to this section. Notwithstanding the above, with respect to an Incentive Stock Option (and if and to the extent required by Code Section 409A with respect to other Awards), Disability shall mean Permanent and Total Disability as defined in Section 22(e)(3) of the Code. The Committee may establish any process or procedure it deems appropriate for determining whether a Participant has a “Disability”.

(k) “Dividend Equivalent” shall mean any right granted under Section 6(e) of the Employee Plan.

(l) “Employee” means any person who is in the employ of the Company or any Affiliate, subject to the control and direction of the Company or any Affiliate as to both the work to be performed and the manner and method of performance.

(m) “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.

(n) “Fair Market Value” shall mean, as of any date, the value of Common Stock determined as follows:

(i) if the Common Stock is listed on any established stock exchange or a national market system, including without limitation the Nasdaq Global Select Market, Nasdaq Global Market or The Nasdaq Capital Market of The Nasdaq Stock Market, the Fair Market Value of a share of Common Stock shall be the closing sales price of a share of Common Stock as quoted on such exchange or system for such date (or the most recent trading day preceding such date if there were no trades on such date), as reported in The Wall Street Journal or such other source as the Committee deems reliable;

(ii) if the Common Stock is regularly quoted by a recognized securities dealer but is not listed in the manner contemplated by clause (i) above, the Fair Market Value of a Share of Common Stock shall be the mean between the high bid and low asked prices for the Common Stock on the last market trading day prior to the day of determination, as reported in The Wall Street Journal or such other source as the Committee deems reliable; or

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(iii) if neither clause (i) above nor clause (ii) above applies, the Fair Market Value of a share of a share of Common Stock shall be determined in good faith by the Committee based on the reasonable application of a reasonable valuation method that complies with Code Section 409A and Code Section 422 if and to the extent required.

(o) “Incentive Stock Option” shall mean an option granted under Section 6(a) of the Employee Plan that is intended to meet the requirements of Sections 422 of the Code, or any successor provision thereto.

(p) “Key Employee” shall mean an Employee who is a “covered employee” within the meaning of Section 162(m)(3) of the Code.

(q) “Non-Qualified Stock Option” shall mean an option granted under Section 6(a) of the Employee Plan that is not an Incentive Stock Option.

(r) “Option” shall mean an Incentive Stock Option or a Non-Qualified Stock Option.

(s) “Other Stock-Based Award” shall mean any right granted under Section 6(f) of the Employee Plan.

(t) “Participant” shall mean an Employee of the Company or of any Affiliate designated to be granted an Award under the Employee Plan.

(u) “Performance Award” shall mean any right granted under Section 6(d) of the Employee Plan.

(v) “Performance Criteria” shall mean any quantitative and/or qualitative measures, as determined by the Committee, which may be used to measure the level of performance of the Company or any individual Participant during a Performance Period, including any Qualifying Performance Criteria.   With respect to any Award intended to satisfy the requirements of Code Section 162(m), performance criteria shall mean the Qualifying Performance Criteria.

(w) “Performance Period” shall mean any period as determined by the Committee in its sole discretion.

(x) “Person” shall mean any individual, corporation, partnership, association, joint-stock company, trust, unincorporated organization, or government or political subdivision thereof.

(y) “Qualifying Performance Criteria” shall mean one or more of the following performance criteria, either individually, alternatively or in any combination, applied to either the company as a whole or to a business unit or Affiliate, and measured either annually or cumulatively over a period of years, on an absolute basis or relative to a pre-established target, to a previous year’s results or to a designated comparison group, in each case as specified by the Committee in the Award: revenue, sales, net income, net earnings, earnings per share, return on total capital, return on equity, cash flow, operating profit and margin rate, subject to adjustment by the Committee to remove the effect of charges for restructurings, discontinued operations, extraordinary items and all items of gain, loss or expense determined to be extraordinary or unusual in nature or infrequent in occurrence, related to the disposal of a segment or a business, or related to a change in accounting principle or otherwise.

(z) “Restricted Securities” shall mean Awards of Restricted Stock or other Awards under which issued and outstanding Shares are held subject to certain restrictions.

(aa) “Restricted Stock” shall mean any award of Shares granted under Section 6(c) of the Employee Plan.

(bb) “Restricted Stock Unit” shall mean any right granted under Section 6(c) of the Employee Plan that is denominated in Shares.

(cc) “Retirement” means retirement (i) at or after age 55 with ten years of service or (ii) at or after age 65.

(dd) “Section 409A” means Section 409A of Code, and the Treasury regulations and other authoritative guidance issued thereunder.

(ee) “Shares” shall mean the Shares of Common Stock, and such other securities as may become the subject of Awards, or become subject to Awards, pursuant to an adjustment made under Section 7 of the Employee Plan.

(ff) “Stock Appreciation Right” shall mean any right granted under Section 6(b) of the Employee Plan.

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Section 3.    Administration

Except as otherwise provided herein, the Employee Plan shall be administered by the Committee, which shall have the power to interpret the Employee Plan and to adopt such rules and guidelines for implementing the terms of the Employee Plan as it may deem appropriate.  The Committee shall have the ability to modify the Employee Plan provisions, to the extent necessary, to accommodate any changes in laws and regulations in jurisdictions in which Participants will receive Awards.

(a) Subject to the terms of the Employee Plan and applicable law, the Committee shall have full power and authority to:

(i)  designate Participants;

(ii)  determine the type or types of Awards to be granted to each Participant under the Employee Plan;

(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;

(iv)  determine the terms and conditions of any Award;

(v)  Determine the effect of termination of employment on any Award;

(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;

(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;

(viii)  interpret and administer the Employee Plan and any instrument or agreement relating to, or Award made under, the Employee Plan;

(ix)  establish, amend, suspend, or waive such rules and guidelines;

(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;

(xi)  to amend any Award Agreement or waive any provision, condition or limitation thereof;

(xii)  make any other determination and take any other action that the Committee deems necessary or desirable for the administration of the Employee Plan; and

(xiii)  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.

(b) Unless otherwise expressly provided in the Employee Plan, all designations, determinations, interpretations, and other decisions under or with respect to the Employee Plan or any Award shall be within the sole discretion of the Committee, may be made at any time, and shall be final, conclusive, and binding upon all Persons, including the Company, any Affiliate, any Participant, any holder or beneficiary of any Award, any stockholder, and any employee of the Company or of any Affiliate.  Any determinations and other actions of the Committee with respect to any of the matters referred to in this Section 3 or elsewhere in the Employee Plan or in any Award Agreement need not be consistent, even among Participants who are similarly situated and/or who have previously received similar or other Awards, except as may be specifically provided to the contrary in the Employee Plan or in the applicable Award Agreement.  In addition, actions of the Committee may be taken by the Committee but with one or more members abstaining or recusing himself or herself from acting on the matter, so long as two or more members remain to act on the matter.  Such action, authorized by the Committee upon the abstention or recusal of such members, shall be the action of the Committee for purposes of the Employee Plan.  The Committee may designate the Secretary of the Company or other employees of the Company to assist the Committee in the administration and operation of the Employee Plan and may direct such persons to execute documents on behalf of the Committee.

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Section 4.    Shares Available for Awards

Shares Available. Subject to adjustment as provided in Section 7, the total number of shares of Common Stock reserved and available for delivery pursuant to Awards granted under the Employee Plan shall be seven hundred fifty thousand (750,000).  If any Shares covered by an Award granted under the Employee Plan, or to which such an Award relates, are forfeited, or if an Award otherwise terminates without the delivery of Shares or of other consideration, then the Shares covered by such Award, or to which such Award relates, or the number of Shares otherwise counted against the aggregate number of Shares available under the Employee Plan with respect to such Award, to the extent of any such forfeiture or termination, shall again be available for granting Awards under the Employee Plan. Notwithstanding the foregoing but subject to adjustment as provided in Section 7, no more than seven hundred fifty thousand (750,000) Shares shall be available for delivery pursuant to the exercise of Incentive Stock Options.

Any Award made under a previous ePlus incentive plan shall continue to be subject to the terms and conditions of the plan under which it was awarded and the applicable Award Agreement.

(a)           Accounting for Awards. For purposes of this Section 4,

(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

(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.

(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.

(b)  Sources of Shares Deliverable Under Awards. Any Shares delivered pursuant to an Award may consist, in whole or in part, of authorized but unissued Shares or of treasury Shares.

Section 5.    Eligibility

Any Employee of the Company or of any Affiliate shall be eligible to be designated a Participant.

Section 6.    Awards

(a) Options. Options granted under the Employee Plan may, at the discretion of the Committee, be in the form of either Non-Qualified Stock Options, Incentive Stock Options or a combination of the two.  Where both a Non-Qualified Stock Option and an Incentive Stock Option are granted to a Participant at the same time, such Awards shall be deemed to have been granted in separate grants, shall be clearly identified, and in no event will the exercise of one such Award affect the right to exercise the other Award.  Unless otherwise specified, an Option shall be a Non-Qualified Stock Option.  Subject to Section 3, the Committee is hereby authorized to grant Options to Participants with the following terms and conditions and with such additional terms and conditions, in either case not inconsistent with the provisions of the Employee Plan, as the Committee shall determine:

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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 se 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.

(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.

(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.

(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:

(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;

(B)  All Options subject to the Award shall become immediately exercisable upon a Change in Control;

(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;

(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

(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.

(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;

(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

(C)  any combination of the foregoing.

(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:

(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.

(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.

(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.

(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.

(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.

(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.

(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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(b) Stock Appreciation Rights. The Committee is hereby authorized to grant Stock Appreciation Rights to Participants. Subject to the terms of the Employee Plan and any applicable Award Agreement, a Stock Appreciation Right Award granted under the Employee Plan shall confer on the holder thereof a right to receive, upon exercise thereof, the excess of (i) the Fair Market Value of one Share on the date of exercise over (ii) the grant price of the Stock Appreciation Right as specified by the Committee, multiplied by the number of Stock Appreciation Rights granted.  As determined by the Committee, the payment upon exercise may be paid in cash, Shares to be valued at their Fair Market Value on the date of exercise, any other mode of payment deemed appropriate by the Committee or any combination thereof.  The Committee may establish a maximum appreciation value payable for stock appreciation rights.

(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.

(ii)  Term. The term of each Stock Appreciation Right shall not exceed ten (10) years from the date of grant.

(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.

(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.

(c) Restricted Stock and Restricted Stock Units. The Committee is hereby authorized to grant Awards of Restricted Stock and Restricted Stock Units to Participants.

(i)  Restrictions. Shares of Restricted Stock and Restricted Stock Units shall be subject to such 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).

(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.

(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.

(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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(d) Performance Awards. The Committee is hereby authorized to grant Performance Awards to Participants. Performance Awards include arrangements under which the grant, issuance, retention, vesting and/or transferability of any Award is subject to such Performance Criteria and such additional conditions or terms as the Committee may designate. The Committee may establish a maximum Performance Award. Subject to the terms of the Employee Plan and any applicable Award Agreement, a Performance Award granted under the Employee Plan:

(i)  may be denominated or payable in cash, Shares (including, without limitation, Restricted Stock), other securities, or other Awards; and

(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.

(e) Dividend Equivalents. The Committee is hereby authorized to grant to Participants Awards under which the holders thereof shall be entitled to receive payments equivalent to dividends or interest with respect to a number of Shares determined by the Committee, and the Committee may provide that such amounts (if any) shall be deemed to have been reinvested in additional Shares or otherwise reinvested. Subject to the terms of the Employee Plan and any applicable Award Agreement, such Awards may have such terms and conditions as the Committee shall determine.

(f) Other Stock-Based Awards. The Committee is hereby authorized to grant to Participants such other Awards that are denominated or payable in, valued in whole or in part by reference to, or otherwise based on or related to, Shares (including, without limitation, securities convertible into Shares), as are deemed by the Committee to be consistent with the purposes of the Employee Plan, provided, however, that such grants must comply with applicable law. Subject to the terms of the Employee Plan and any applicable Award Agreement, the Committee shall determine the terms and conditions of such Awards. Shares or other securities delivered pursuant to a purchase right granted under this Section 6(f) shall be purchased for such consideration, which may be paid by such method or methods and in such form or forms, including, without limitation, cash, Shares, other securities, or other Awards, or any combination thereof, as the Committee shall determine, the value of which consideration, as established by the Committee, and except as provided in Section 7, shall not be less than the Fair Market Value of such Shares or other securities as of the date such purchase right is.

(g) General.

(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.

(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.

(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.

(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 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 fifty thousand (50,000) Shares, subject to adjustment as provided in Section 7.

(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 fifty thousand (50,000) Shares, subject to adjustment as provided in Section 7.

(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.

(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.

(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.

(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.

(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.

(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.

(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.

Section 7.    Changes in Capital Structure

(a) Mandatory Adjustments. In the event that the Committee shall determine that any stock dividend, recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase, or exchange of Shares or other securities of the Company, issuance of warrants or other rights to purchase Shares or other securities of the Company, or other similar corporate transaction or event constitutes an equity restructuring transaction, as that term is defined in Statement of Financial Accounting Standards No. 123 (revised) or otherwise affects the Shares, then the Committee shall adjust the following in a manner that is determined by the Committee to be appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Employee Plan:

(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;

(ii)  the number and type of Shares or other securities subject to outstanding Awards;

(iii)  the number and type of Shares or other securities specified as the annual per-participant limitation under Section 6(g)(v) and (vi);

(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

 (v)  other value determinations applicable to outstanding awards.

Provided, however, in each case, that with respect to Awards of Incentive Stock Options no such adjustment shall be authorized to the extent that such authority would cause the Employee Plan to violate Sections 422(b)(1) of the Code or any successor provision thereto; and provided further, however, that the number of Shares subject to any Award denominated in Shares shall always be a whole number. Notwithstanding the foregoing, no adjustments shall be made with respect to Performance Awards granted to a Key Employee to the extent such adjustment would cause the Award to fail to qualify as performance-based compensation under Section 162(m) of the Code and no adjustment shall be required if the Committee determines that such action could cause an Award to fail to satisfy the conditions of an applicable exception from the requirements of Section 409A of the Code or otherwise could subject a Participant to the additional tax imposed under Section 409A in respect of an outstanding Award.

(b) Discretionary Adjustments. Upon the occurrence of (i) a merger, consolidation, acquisition of property or stock, reorganization or otherwise involving the Company in which the Company is not to be the surviving corporation, (ii) a merger, consolidation, acquisition of property or stock, reorganization or otherwise involving the Company in which the Company is the surviving corporation but holders of Shares receive securities of another corporation, or (iii) a sale of all or substantially all of the Company’s assets (as an entirety) or capital stock to another person, any Award granted hereunder shall be deemed to apply to the securities, cash or other property (subject to adjustment by cash payment in lieu of fractional interests) to which a holder of the number of Shares equal to the number of Shares the Participant would have been entitled, and proper provisions shall be made to ensure that this clause is a condition to any such transaction; provided, however, that for an Award that is not subject to Section 409A the Committee (or, if applicable, the board of directors of the entity assuming the Company’s obligations under the Employee Plan) shall, in its discretion, have the power to either:

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(i)  provide that Awards will be settled in cash rather than Stock;

(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;

(iii)  provide that performance targets and performance periods for Performance Awards will be modified, consistent with Code Section 162(m) where applicable;

(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;

(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

(vi)  any combination of the foregoing.

The Committee’s determination may not be uniform and may be different for different Participants whether or not such Participants are similarly situated.:

Section 8.    Amendment and Termination

Except to the extent prohibited by applicable law and unless otherwise expressly provided in an Award Agreement or in the Employee Plan:

(a) Amendments to the Employee Plan. The Board of Directors of the Company may amend, alter, suspend, discontinue, or terminate the Employee Plan, in whole or in part; provided, however, that without the prior approval of the Company’s stockholders, no material amendment shall be made if stockholder approval is required by applicable law, rule or regulation, and; provided, further, that, notwithstanding any other provision of the Employee Plan or any Award Agreement, no such amendment, alteration, suspension, discontinuation, or termination shall be made without the approval of the stockholders of the Company that would:

(i)  increase the total number of Shares available for Awards under the Employee Plan, except as provided in Section 7 hereof; or

(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.

(b) Amendments to Awards. The Committee may waive any conditions or rights under, amend any terms of, or amend, alter, suspend, discontinue, or terminate, any Awards theretofore granted, prospectively or retroactively. No such amendment or alteration shall be made which would impair the rights of any Participant, without such Participant’s consent, under any Award theretofore granted, provided that no such consent shall be required with respect to any amendment or alteration if the Committee determines in its sole discretion that such amendment or alteration either (i) is required or advisable in order for the Company, the Employee Plan or the Award to satisfy or conform to any law or regulation or to meet the requirements of any accounting standard, or (ii) is not reasonably likely to significantly diminish the benefits provided under such Award.

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Section 9.    General Provisions

(a) No Rights to Awards. No Employee, Participant or other Person shall have any claim to be granted any Award under the Employee Plan, or, having been selected to receive an Award under this Plan, to be selected to receive a future Award, and further there is no obligation for uniformity of treatment of Employees, Participants, or holders or beneficiaries of Awards under the Employee Plan. The terms and conditions of Awards need not be the same with respect to each recipient.

(b) Withholding. The Company or any Affiliate shall be authorized to withhold from any Award granted or any payment due or transfer made under any Award or under the Employee Plan the amount (in cash, Shares, other securities, or other Awards) of withholding taxes due in respect of an Award, its exercise, or any payment or transfer under such Award or under the Employee Plan and to take such other action as may be necessary in the opinion of the Company or Affiliate to satisfy statutory withholding obligations for the payment of such taxes.  The Participant may satisfy, totally or in part, his obligations pursuant to this section by electing to have Shares withheld, to redeliver Shares acquired under an Award, or to deliver previously owned Shares, provided that the election is made in writing on or prior to (i) the date of exercise, in the case of Options and SAR’s (ii) the date of payment, in respect of Restricted Stock Units, or Performance Awards, and (iii) the expiration of the period of restriction, in respect of Restricted Stock. Any election made under this section shall be irrevocable by the Participant and may be disapproved by the Committee at any time in its sole discretion. If an election is disapproved by the Committee, the Participant must satisfy his obligations pursuant to this paragraph in cash.

(c) Other Company Benefit and Compensation Arrangements.  Payments and other benefits received by a Participant under an Award made pursuant to the Employee Plan shall not be deemed a part of a Participant’s regular, recurring compensation for purposes of any termination, indemnity or severance pay law and shall not be included in, nor have any effect on, the determination of benefits under any pension or other employee benefit plan or similar arrangement provided by the Company or Affiliate, unless (i) expressly so provided by such other plan or arrangement or (ii) the Committee expressly determines that an Award or a portion thereof should be included as recurring compensation. Nothing contained in the Employee Plan shall prevent the Company or any Affiliate from adopting or continuing in effect other or additional compensation arrangements, and such arrangements may be either generally applicable or applicable only in specific cases.

(d) No Right to Employment. The grant of an Award shall not constitute an employment contract nor be construed as giving a Participant the right to be retained in the employ of the Company or any Affiliate. Further, the Company or an Affiliate may at any time dismiss a Participant from employment, free from any liability, or any claim under the Employee Plan, unless otherwise expressly provided in the Employee Plan or in any Award Agreement.

(e) Governing Law. The validity, construction, and effect of the Employee Plan and any rules and regulations relating to the Employee Plan shall be determined in accordance with the laws of the State of Delaware and applicable Federal law without regard to conflict of law.

(f) Severability. If any provision of the Employee Plan or any Award is or becomes or is deemed to be invalid, illegal, or unenforceable in any jurisdiction, or as to any Person or Award, or would disqualify the Employee Plan or any Award under any law deemed applicable by the Committee, such provision shall be construed or deemed amended to conform to applicable laws, or if it cannot be so construed or deemed amended without, in the determination of the Committee, materially altering the intent of the Employee Plan or the Award, such provision shall be stricken as to such jurisdiction, Person, or Award, and the remainder of the Employee Plan and any such Award shall remain in full force and effect.

(g) No Trust or Fund Created. Neither the Employee Plan nor any Award shall create or be construed to create a trust or separate fund of any kind or a fiduciary relationship between the Company or any Affiliate and a Participant or any other Person. To the extent that any Person acquires a right to receive payments from the Company or any Affiliate pursuant to an Award, such right shall be no greater than the right of any unsecured general creditor of the Company or any Affiliate.

(h) No Fractional Shares. No fractional Shares shall be issued or delivered pursuant to the Employee Plan or any Award, and the Committee shall determine whether cash or other securities shall be paid or transferred in lieu of any fractional Shares, or whether such fractional Shares or any rights thereto shall be canceled, terminated, or otherwise eliminated.

(i) Headings. Headings are given to the Sections and subsections of the Employee Plan solely as a convenience to facilitate reference. Such headings shall not be deemed in any way material or relevant to the construction or interpretation of the Employee Plan or any provision thereof, and, in the event of any conflict, the text of the Employee Plan, rather than such headings, shall control.

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(j) Indemnification. Subject to requirements of Delaware State law, each individual who is or shall have been a member of the Board, or a Committee appointed by the Board or a delegate of the Committee so acting, shall be indemnified and held harmless by the Company against and from any loss, cost, liability, or expense that may be imposed upon or reasonably incurred by him or her in connection with or resulting from any claim, action, suit, or proceeding to which he or she may be a party or in which he or she may be involved by reason of any action taken or failure to act under this Plan and against and from any and all amounts paid by him or her in settlement thereof, with the Company’s approval, or paid by him or her in satisfaction of any judgment in any such action, suit, or proceeding against him or her, provided he or she shall give the Company an opportunity, at its own expense, to handle and defend the same before he or she undertakes to handle and defend it on his/her own behalf, unless such loss, cost, liability, or expense is a result of his/her own willful misconduct or except as expressly provided by statute. The foregoing right of indemnification shall not be exclusive of any other rights of indemnification to which such individuals may be entitled under the Company’s Certificateof Incorporation or Bylaws, as a matter of law, or otherwise, or any power that the Company may have to indemnify them or hold them harmless.

(k) Compliance with Section 409A. Except to the extent specifically provided otherwise by the Committee, Awards under the Employee Plan are intended to either be exempt from Section 409A or structured to comply with the requirements of Section so as to avoid the imposition of any additional taxes or penalties under Section 409A. If the Committee determines that an Award, Award Agreement, payment, distribution, deferral election, transaction or any other action or arrangement contemplated by the provisions of the Employee Plan would, if undertaken, cause a Participant to become subject to any additional taxes or other penalties under Section 409A, then unless the Committee specifically provides otherwise, such Award, Award Agreement, payment, distribution, deferral election, transaction or other action or arrangement shall not be given effect to the extent it causes such result and the related provisions of the Employee Plan and/or Award Agreement will be deemed modified, or, if necessary, suspended in order to comply with the requirements of Section 409A to the extent determined appropriate by the Committee, in each case without the consent of or notice to the Participant.  For any Award that is subject to Section 409A, all rights to amend, terminate or modify the Employee Plan or such Award are subject to the requirements and limitations of Section 409A.  Notwithstanding any provision in the Employee Plan to the contrary, with respect to any Award that is subject to Section 409A, distributions on account of a separation from service may not be made to a “specified employee” (as defined by Section 409A) before the date which is six (6) months after the date of separation from service (or, if earlier, the date of death of the employee).  A Participant who is subject to the restriction described in the previous sentence shall be paid on the first day of the seventh month after the Participant’s separation from service an amount equal to the benefit that the Participant would have received during such six month period absent the restriction.

(l) Compliance with Code Section 162(m). At all times when Code Section 162(m) is applicable, if and to the extent the Committee so determines, Awards granted under this Plan to Employees who are or could reasonably become Key Employees as determined by the Committee shall comply with the requirements of the performance-based exception from the tax deductibility limitations of Code Section 162(m). Generally, this requires that the amount paid under such an Award be determined based on the attainment of written, objective performance goals approved by the Committee for a performance period established by the Committee (i) while the outcome for that performance period is substantially uncertain and (ii) no more than 90 days after the commencement of the performance period to which the performance goal relates or, if less, the number of days which is equal to 25 percent of the relevant performance period.  The Committee shall determine whether, with respect to a performance period, the applicable performance goals have been met with respect to a given Participant and, if they have, shall so certify and ascertain the amount of the applicable Award. No amount will be paid for such performance period until such certification is made by the Committee. The amount actually paid to a given Participant may be less than (but not more than) the amount determined under the applicable performance formula, at the discretion of the Committee.

 (m) No Representations or Covenants with Respect to Tax Qualification. Although the Company may endeavor to (i) qualify an Award for favorable U.S. tax provisions (e.g., incentive stock options under Section 422 of the Code) or (ii) avoid adverse tax treatment (e.g., under Section 409A of the Code), the Company makes no representation to that effect and expressly disavows any covenant to maintain favorable or avoid unfavorable tax treatment. The Company shall be unconstrained in its corporate activities without regard to the potential negative tax impact on holders of Awards under the Employee Plan.

(n) Compliance with Laws. The granting of Awards and the issuance of Shares under the Employee Plan shall be subject to all applicable laws, rules, and regulations, and to such approvals by any governmental agencies or stock exchanges or automated quotation systems on which the Company is listed, quoted or traded as may be required. The Company shall have no obligation to issue or deliver evidence of title for Shares issued under the Employee Plan prior to:

(i)  obtaining any approvals from governmental agencies that the Company determines are necessary or advisable; and

(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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The inability or impracticability of the Company to obtain or maintain authority from any regulatory body having jurisdiction, which authority is deemed by the Company’s counsel to be necessary to the lawful issuance and sale of any Shares hereunder shall relieve the Company of any liability in respect of the failure to issue or sell such Shares as to which such requisite authority shall not have been obtained.

(o) Code Section 83(b) Elections.  Neither the Company, any Affiliate, nor the Committee shall have any responsibility in connection with a Participant’s election, or attempt to elect, under Code section 83(b) to include the value of a Restricted Stock Award in the Participant’s gross income for the year of payment.  Any Participant who makes a Code section 83(b) election with respect to any such Award shall promptly notify the Committee of such election and provide the Committee with a copy thereof.

(p) Successors.  All obligations of the Company under the Plan with respect to Awards granted hereunder shall be binding on any successor to the Company, whether the existence of such successor is the result of a direct or indirect purchase, merger, consolidation, or otherwise, of all or substantially all of the business, stock and/or assets of the Company.

Section 10.    Term of the Employee Plan

The Plan shall remain in full force and effect through the tenth (10th) anniversary of the Effective Date, unless sooner terminated by the Board.  After the Employee Plan is terminated, no future Awards may be granted, but Awards previously granted shall remain outstanding in accordance with their applicable terms and conditions and the Employee Plan’s terms and conditions.

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EX-31.1

Exhibit 31.1

CERTIFICATION

I, Phillip G. Norton, certify that:

1.  I have reviewed this Quarterly Report on Form 10-Q of ePlus inc.;

2.  Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.  Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.  The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15 (f)) for the registrant and have:

a)  Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)  Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)  Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)  Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.  The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a)  All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b)  Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: November 7, 2012

/s/ PHILLIP G. NORTON

Phillip G. Norton

Chief Executive Officer

(Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Elaine D. Marion, certify that:

1.  I have reviewed this Quarterly Report on Form 10-Q of ePlus inc.;

2.  Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.  Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.  The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15 (f)) for the registrant and have:

a)  Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)  Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)  Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)  Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.  The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a)  All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b)  Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: November 7, 2012

/s/ ELAINE D. MARION

Elaine D. Marion

Chief Financial Officer

(Principal Financial Officer)

EX-32

Exhibit 32

CERTIFICATION

PURSUANT TO 18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO SECTION 906 OF THE

SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of ePlus inc. on Form 10-Q for the three months and six months ended September 30, 2012, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), the undersigned hereby certify, pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that to the undersigned's best knowledge and belief:

a)  the Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

b)  the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations ofePlus inc.

Date: November 7, 2012

/s/ PHILLIP G. NORTON

Phillip G. Norton Chief Executive Officer

(Principal Executive Officer)

/s/ ELAINE D. MARION

Elaine D. Marion Chief Financial Officer

(Principal Financial Officer)

A signed original of this written statement required by Section 906 has been provided to ePlus and will be retained by us and furnished to the Securities and Exchange Commission or its staff upon request.

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RESERVES FOR CREDIT LOSSES, CQR (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Mar. 31, 2012
Financing Receivable, Recorded Investment [Line Items]
Total Minimum Lease Payments	$ 93,646	$ 99,747
Investment in direct financing and sales-type leases that are past due [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable Recorded Investment 31-60 Days Past Due	68	1,852
Financing Receivable Recorded Investment 61-90 Days Past Due	27	12
Financing Receivable Recorded Investment Greater Than 90 Days Past Due	309	84
Total Past Due	404	1,948
Current	610	1,030
Unbilled Minimum Lease Payments	92,632	96,769
Total Minimum Lease Payments	93,646	99,747
Unearned Income	(7,832)	(9,002)
Non-Recourse Notes Payable	(19,416)	(18,589)
Net Credit Exposure	66,398	72,156
Notes Receivable [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable Recorded Investment 31-60 Days Past Due	551	0
Financing Receivable Recorded Investment 61-90 Days Past Due	578	0
Financing Receivable Recorded Investment Greater Than 90 Days Past Due	678	86
Total Past Due	1,807	86
Current	226	3,077
Unbilled Minimum Lease Payments	19,195	24,137
Total Minimum Lease Payments	21,228	27,300
High CQR [Member]
Financing Receivable, Recorded Investment [Line Items]
Losses on net credit exposure, lower limit (in hundredths)	0.00%
Losses on net credit exposure, upper limit (in hundredths)	5.00%
High CQR [Member] | Investment in direct financing and sales-type leases that are past due [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable Recorded Investment 31-60 Days Past Due	35	1,767
Financing Receivable Recorded Investment 61-90 Days Past Due	15	5
Financing Receivable Recorded Investment Greater Than 90 Days Past Due	255	72
Total Past Due	305	1,844
Current	534	977
Unbilled Minimum Lease Payments	51,490	58,214
Total Minimum Lease Payments	52,329	61,035
Unearned Income	(3,889)	(4,541)
Non-Recourse Notes Payable	(4,003)	(3,480)
Net Credit Exposure	44,437	53,014
High CQR [Member] | Notes Receivable [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable Recorded Investment 31-60 Days Past Due	500	0
Financing Receivable Recorded Investment 61-90 Days Past Due	578	0
Financing Receivable Recorded Investment Greater Than 90 Days Past Due	0	0
Total Past Due	1,078	0
Current	211	2,661
Unbilled Minimum Lease Payments	12,796	18,140
Total Minimum Lease Payments	14,085	20,801
Average CQR [Member]
Financing Receivable, Recorded Investment [Line Items]
Losses on net credit exposure, lower limit (in hundredths)	2.00%
Losses on net credit exposure, upper limit (in hundredths)	25.00%
Average CQR [Member] | Investment in direct financing and sales-type leases that are past due [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable Recorded Investment 31-60 Days Past Due	27	85
Financing Receivable Recorded Investment 61-90 Days Past Due	0	7
Financing Receivable Recorded Investment Greater Than 90 Days Past Due	25	12
Total Past Due	52	104
Current	76	53
Unbilled Minimum Lease Payments	40,848	38,337
Total Minimum Lease Payments	40,976	38,494
Unearned Income	(3,913)	(4,445)
Non-Recourse Notes Payable	(15,413)	(15,109)
Net Credit Exposure	21,650	18,940
Average CQR [Member] | Notes Receivable [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable Recorded Investment 31-60 Days Past Due	0	0
Financing Receivable Recorded Investment 61-90 Days Past Due	0	0
Financing Receivable Recorded Investment Greater Than 90 Days Past Due	0	0
Total Past Due	0	0
Current	15	29
Unbilled Minimum Lease Payments	3,628	2,113
Total Minimum Lease Payments	3,643	2,142
Low CQR [Member]
Financing Receivable, Recorded Investment [Line Items]
Losses on net credit exposure, lower limit (in hundredths)	50.00%
Losses on net credit exposure, upper limit (in hundredths)	100.00%
Low CQR [Member] | Investment in direct financing and sales-type leases that are past due [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable Recorded Investment 31-60 Days Past Due	6	0
Financing Receivable Recorded Investment 61-90 Days Past Due	12	0
Financing Receivable Recorded Investment Greater Than 90 Days Past Due	29	0
Total Past Due	47	0
Current	0	0
Unbilled Minimum Lease Payments	294	218
Total Minimum Lease Payments	341	218
Unearned Income	(30)	(16)
Non-Recourse Notes Payable	0	0
Net Credit Exposure	311	202
Low CQR [Member] | Notes Receivable [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable Recorded Investment 31-60 Days Past Due	51	0
Financing Receivable Recorded Investment 61-90 Days Past Due	0	0
Financing Receivable Recorded Investment Greater Than 90 Days Past Due	678	86
Total Past Due	729	86
Current	0	387
Unbilled Minimum Lease Payments	2,771	3,884
Total Minimum Lease Payments	$ 3,500	$ 4,357

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SEGMENT REPORTING (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended			6 Months Ended
	Sep. 30, 2012	Sep. 30, 2011		Sep. 30, 2012	Sep. 30, 2011		Mar. 31, 2012
Segment Reporting Information [Line Items]
Sales of product and services	$ 250,178	$ 193,493	[1]	$ 484,460	$ 362,814	[1]
Financing revenues	7,413	7,305	[1]	15,313	14,739	[1]
Fee and other income	2,460	2,857	[1]	5,002	5,001	[1]
Total revenues	260,051	203,655	[1]	504,775	382,554	[1]
Cost of sales, product & services	205,199	158,429	[1]	399,590	299,103	[1]
Direct lease costs	2,461	2,078	[1]	4,704	4,174	[1]
Professional and other fees	2,707	2,355	[1]	5,820	4,780	[1]
Salaries and benefits	26,919	24,090	[1]	53,273	47,096	[1]
General and administrative expenses	5,411	4,507	[1]	10,066	8,540	[1]
Interest and financing costs	446	348	[1]	851	730	[1]
Total costs and expenses	243,143	191,807		474,304	364,423
Earnings before provision for income taxes	16,908	11,848	[1]	30,471	18,131	[1]
Assets	440,794	378,062		440,794	378,062		433,688
Technology Sales Business Segment [Member]
Segment Reporting Information [Line Items]
Sales of product and services	250,178	193,493		484,460	362,814
Financing revenues	0	0		0	0
Fee and other income	1,591	2,128		3,593	4,037
Total revenues	251,769	195,621		488,053	366,851
Cost of sales, product & services	205,199	158,429		399,590	299,103
Direct lease costs	0	0		0	0
Professional and other fees	2,260	1,986		4,763	4,060
Salaries and benefits	24,414	21,717		48,496	42,379
General and administrative expenses	5,011	4,267		9,450	8,034
Interest and financing costs	21	19		52	39
Total costs and expenses	236,905	186,418		462,351	353,615
Earnings before provision for income taxes	14,864	9,203		25,702	13,236
Assets	250,138	202,420		250,138	202,420
Financing Business Segment [Member]
Segment Reporting Information [Line Items]
Sales of product and services	0	0		0	0
Financing revenues	7,413	7,305		15,313	14,739
Fee and other income	869	729		1,409	964
Total revenues	8,282	8,034		16,722	15,703
Cost of sales, product & services	0	0		0	0
Direct lease costs	2,461	2,078		4,704	4,174
Professional and other fees	447	369		1,057	720
Salaries and benefits	2,505	2,373		4,777	4,717
General and administrative expenses	400	240		616	506
Interest and financing costs	425	329		799	691
Total costs and expenses	6,238	5,389		11,953	10,808
Earnings before provision for income taxes	2,044	2,645		4,769	4,895
Assets	$ 190,656	$ 175,642		$ 190,656	$ 175,642

[1] See Note 2, "Restatement of Financial Statements."

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INCOME TAXES (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
INCOME TAXES [Abstract]
Gross liability related to uncertain tax positions	$ 316		$ 316
Impact of recognizing the unrecognized tax benefit	429		429
Interest on income taxes expense included in statement of operation	4	11	9	22
Accrued interest on income taxes	$ 189	$ 167	$ 189	$ 167

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SEGMENT REPORTING (Tables)

6 Months Ended

Sep. 30, 2012

SEGMENT REPORTING [Abstract]

Segment reporting information, by reportable segment

Both segments utilize our proprietary software and services within the organization. Sales and services and related costs of our software are included in the technology sales business segment. Our reportable segment information is as follows (in thousands):

	Three months ended September 30, 2012						Three months ended September 30, 2011
	Technology Sales Business Segment		Financing Business Segment		Total		Technology Sales Business Segment		Financing Business Segment		Total
Sales of product and services	$	250,178	$	-	$	250,178	$	193,493	$	-	$	193,493
Financing revenues		-		7,413		7,413		-		7,305		7,305
Fee and other income		1,591		869		2,460		2,128		729		2,857
Total revenues		251,769		8,282		260,051		195,621		8,034		203,655
Cost of sales, product & services		205,199		-		205,199		158,429		-		158,429
Direct lease costs		-		2,461		2,461		-		2,078		2,078
Professional and other fees		2,260		447		2,707		1,986		369		2,355
Salaries and benefits		24,414		2,505		26,919		21,717		2,373		24,090
General and administrative expenses		5,011		400		5,411		4,267		240		4,507
Interest and financing costs		21		425		446		19		329		348
Total costs and expenses		236,905		6,238		243,143		186,418		5,389		191,807
Earnings before provision for income taxes	$	14,864	$	2,044	$	16,908	$	9,203	$	2,645	$	11,848
Assets	$	250,138	$	190,656	$	440,794	$	202,420	$	175,642	$	378,062

	Six months ended September 30, 2012						Six months ended September 30, 2011
	Technology Sales Business Segment		Financing Business Segment		Total		Technology Sales Business Segment		Financing Business Segment		Total
Sales of product and services	$	484,460	$	-	$	484,460	$	362,814	$	-	$	362,814
Financing revenues		-		15,313		15,313		-		14,739		14,739
Fee and other income		3,593		1,409		5,002		4,037		964		5,001
Total revenues		488,053		16,722		504,775		366,851		15,703		382,554
Cost of sales, product & services		399,590		-		399,590		299,103		-		299,103
Direct lease costs		-		4,704		4,704		-		4,174		4,174
Professional and other fees		4,763		1,057		5,820		4,060		720		4,780
Salaries and benefits		48,496		4,777		53,273		42,379		4,717		47,096
General and administrative expenses		9,450		616		10,066		8,034		506		8,540
Interest and financing costs		52		799		851		39		691		730
Total costs and expenses		462,351		11,953		474,304		353,615		10,808		364,423
Earnings before provision for income taxes	$	25,702	$	4,769	$	30,471	$	13,236	$	4,895	$	18,131
Assets	$	250,138	$	190,656	$	440,794	$	202,420	$	175,642	$	378,062

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INVESTMENT IN LEASES AND LEASED EQUIPMENT-NET (Tables)

6 Months Ended

Sep. 30, 2012

INVESTMENT IN LEASES AND LEASED EQUIPMENT-NET [Abstract]

Components of investments in lease

Investment in leases and leased equipment—net consists of the following (in thousands):

	September 30,		March 31,
	2012
Investment in direct financing and sales-type leases—net	$	90,711	$	95,460
Investment in operating lease equipment—net		21,669		20,514
	$	112,380	$	115,974

Investment in direct financing and sales-type leases-net

Our investment in direct financing and sales-type leases—net consists of the following (in thousands):

	September 30,			March 31,
	2012
Minimum lease payments	$	93,646		$	99,747
Estimated unguaranteed residual value (1)		7,319			6,917
Initial direct costs, net of amortization (2)		746			797
Less: Unearned lease income		(9,648	)		(10,665	)
Less: Reserve for credit losses (3)		(1,352	)		(1,336	)
Investment in direct financing and sales-type leases—net	$	90,711		$	95,460

(1) Includes estimated unguaranteed residual values of $2,222 thousand and $1,700 thousand as of September 30, 2012 and March 31, 2012, respectively, for direct financing leases which have been sold and accounted for as sales under Codification Topic, Transfers and Servicing.

(2) Initial direct costs are shown net of amortization of $618 thousand and $512 thousand as of September 30, 2012 and March 31, 2012, respectively.

(3) For details on reserve for credit losses, refer to Note 5, "Reserves for Credit Losses."

Investment in operating lease equipment-net

Investment in operating lease equipment—net primarily represents leases that do not qualify as direct financing leases. The components of the investment in operating lease equipment—net are as follows (in thousands):

	September 30,			March 31,
	2012
Cost of equipment under operating leases	$	46,775		$	44,487
Less: Accumulated depreciation and amortization		(25,106	)		(23,973	)
Investment in operating lease equipment—net (1)	$	21,669		$	20,514

(1) Includes estimated unguaranteed residual values of $7,918 thousand and $7,802 thousand as of September 30, 2012 and March 31, 2012, respectively, for operating leases.

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COMMITMENTS AND CONTINGENCIES (Details)	2 Months Ended
	Aug. 31, 2009	May 19, 2009
Legal Proceedings [Abstract]
Number of defendants infringing patents		4
Number of defendants entered into agreement	3

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GOODWILL (Details) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Sep. 30, 2012
Goodwill [Line Items]
Goodwill	$ 37,117
Accumulated impairment losses	(8,673)
Goodwill - net balance	28,444
Purchase accounting adjustments	343
Goodwill	37,460
Accumulated impairment losses	(8,673)
Goodwill - net balance	28,787
Financing [Member]
Goodwill [Line Items]
Goodwill	4,029
Accumulated impairment losses	(4,029)
Goodwill - net balance	0
Purchase accounting adjustments	0
Goodwill	4,029
Accumulated impairment losses	(4,029)
Goodwill - net balance	0
Technology [Member]
Goodwill [Line Items]
Goodwill	27,355
Accumulated impairment losses	0
Goodwill - net balance	27,355
Purchase accounting adjustments	343
Goodwill	27,698
Accumulated impairment losses	0
Goodwill - net balance	27,698
Software Procurement [Member]
Goodwill [Line Items]
Goodwill	4,644
Accumulated impairment losses	(4,644)
Goodwill - net balance	0
Purchase accounting adjustments	0
Goodwill	4,644
Accumulated impairment losses	(4,644)
Goodwill - net balance	0
Software Document Management [Member]
Goodwill [Line Items]
Goodwill	1,089
Accumulated impairment losses	0
Goodwill - net balance	1,089
Purchase accounting adjustments	0
Goodwill	1,089
Accumulated impairment losses	0
Goodwill - net balance	$ 1,089

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FAIR VALUE OF FINANCIAL INSTRUMENTS (Details) (USD $) In Thousands, unless otherwise specified	6 Months Ended	12 Months Ended
	Sep. 30, 2012	Mar. 31, 2012
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Number of tiers	3
Liabilities :
Contingent consideration at Fair Value	$ 1,122	$ 1,292
Total Gains (Losses) on contingent consideration	0	0
Adjustment to fair value of contingent consideration	170
Quoted Prices in Active Markets for Identical Assets (Level 1)
Liabilities :
Contingent consideration at Fair Value	0	0
Significant Other Observable Inputs (Level 2)
Liabilities :
Contingent consideration at Fair Value	0	0
Significant Unobservable Inputs (Level 3)
Liabilities :
Contingent consideration at Fair Value	$ 1,122	$ 1,292

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ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

6 Months Ended

Sep. 30, 2012

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract]

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION — Our company was founded in 1990 and is a Delaware corporation. ePlus inc. is sometimes referred to in this Quarterly Report on Form 10-Q as "we," "our," "us," "ourselves," or "ePlus." The unaudited condensed consolidated financial statements include the accounts of ePlus inc. and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated.

INTERIM FINANCIAL STATEMENTS — The condensed consolidated financial statements for the three and six months ended September 30, 2012 and 2011 are unaudited, but include all adjustments consisting of normal recurring adjustments that, in the opinion of management, are necessary for a fair presentation of our financial position, results of operations, changes in equity and cash flows for such periods. Operating results for the three and six months ended September 30, 2012 and 2011 are not necessarily indicative of results that may be expected for any other interim period or for the full fiscal year ending March 31, 2013 or any other future period. These unaudited condensed consolidated financial statements do not include all disclosures required by the accounting principles generally accepted in the United States ("U.S. GAAP") for annual financial statements. Our audited consolidated financial statements are contained in our annual report on Form 10-K for the year ended March 31, 2012, which should be read in conjunction with these interim financial statements.

SUBSEQUENT EVENTS— Management has evaluated subsequent events after the balance sheet date through the date our financial statements are issued.

USE OF ESTIMATES — The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Significant items subject to such estimates and assumptions include estimates related to revenue recognition, residual values, vendor consideration, lease classification, goodwill and intangibles, reserves for credit losses, and the recognition and measurement of income tax assets and liabilities. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results may differ from these estimates.

REVENUE RECOGNITION–The majority of our revenues are derived from the following sources: sales of third party products, software, software assurance, maintenance and services; sales of our services and software; and financing revenues. For all these revenue sources, we determine whether we are the principal or agent in accordance with Codification Topic, Revenue Recognition, Subtopic Principal Agent Considerations. Our revenue recognition policies vary based on these revenue sources.

For the sale of third party software assurance, maintenance and services we concluded that we are acting as an agent and recognize revenue for these transactions on a net basis at the date of sale, which is presented within sales of products and services in our unaudited condensed consolidated statements of operations. Gross billings for all products and services for the three months ended September 30, 2012 and September 30, 2011 were $318.8 million and $252.7 million, respectively. Gross billings for all products and services for the six months ended September 30, 2012 and September 30, 2011 were $597.6 million and $454.7 million, respectively.

CONCENTRATIONS OF RISK—Financial instruments that potentially subject us to concentrations of credit risk include cash and cash equivalents, short-term investments, accounts receivable, notes receivable and investments in direct financing and sales-type leases. Cash and cash equivalents and short-term investments are maintained principally with financial institutions in the United States, which have high credit ratings. Risk on accounts receivable, notes receivable and investments in direct financing and sales-type leases is reduced by the large number of diverse industries comprising our customer base and through the ongoing evaluation of collectability of our portfolio. Our credit risk is further mitigated through the underlying collateral and whether the asset is funded with recourse or non-recourse notes payable.

A substantial portion of our sales of product and services are from sales of Cisco and Hewlett Packard products, which represented approximately 49.8% and 10.0%, and 51.6% and 10.1%, respectively, of our sales of product and services for the three and six months ended September 30, 2012, as compared to 46.1% and 17.2%, and 44.0% and 16.4%, respectively, of our sales of product and services for the three and six months ended September 30, 2011. Any changes in our vendors' ability to provide products could have a material adverse effect on our business, results of operations and financial condition.

RECENTLY ADOPTED ACCOUNTING PRONOUNCEMENTS — In June 2011, the Financial Accounting Standard Board ("FASB") issued Accounting Standards Update ("ASU") 2011-12, Comprehensive Income ("ASU 2011-12"), which amended existing guidance by allowing only two options for presenting the components of net income and other comprehensive income: (1) in a single continuous financial statement, statement of comprehensive income or (2) in two separate but consecutive financial statements, consisting of an income statement followed by a separate statement of other comprehensive income. ASU 2011-12 requires retrospective application, and it is effective for fiscal years, and interim periods within those years, beginning after December 15, 2011, with early adoption permitted. We adopted this amendment on April 1, 2012 and are presenting our components of net income and other comprehensive income in two separate but consecutive financial statements.

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EARNINGS PER SHARE (Details) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended			6 Months Ended
	Sep. 30, 2012	Sep. 30, 2011		Sep. 30, 2012	Sep. 30, 2011
EARNINGS PER SHARE [Abstract]
Net earnings available to common shareholders-basic and diluted	$ 10,033	$ 7,064	[1]	$ 18,095	$ 10,767	[1]
Weighted average shares outstanding-basic (In shares)	7,770,206	8,153,495	[1]	7,745,506	8,230,022	[1]
Effect of dilutive shares (In shares)	151,000	174,000		167,000	192,000
Weighted average shares outstanding-diluted (In shares)	7,920,927	8,327,748	[1]	7,912,818	8,422,099	[1]
Earnings per common share:
Basic (In dollars per share)	$ 1.29	$ 0.87	[1]	$ 2.34	$ 1.31	[1]
Diluted (In dollars per share)	$ 1.27	$ 0.85	[1]	$ 2.29	$ 1.28	[1]

[1] See Note 2, "Restatement of Financial Statements."

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NOTES PAYABLE AND CREDIT FACILITY (Tables)

6 Months Ended

Sep. 30, 2012

NOTES PAYABLE AND CREDIT FACILITY [Abstract]

Non-recourse and recourse obligations

Non-recourse and recourse obligations consist of the following (in thousands):

	September 30,		March 31,
	2012
Recourse note payable at 4.84% expires on March 2, 2017	$	1,682	$	1,727
Non-recourse equipment notes secured by related investments in leases with interest rates ranging from2.58% to 10.0% at September 30, 2012 and March 31, 2012	$	33,020	$	26,328

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OTHER ASSETS AND ACCRUED EXPENSES AND OTHER LIABILITIES (Tables)

6 Months Ended

Sep. 30, 2012

OTHER ASSETS AND ACCRUED EXPENSES AND OTHER LIABILITIES [Abstract]

Other assets and accrued expenses and other liabilities

Our other assets and accrued expenses and other liabilities consist of the following (in thousands):

	September 30,		March 31,
	2012
Deferred costs	$	10,588	$	9,391
Capitalized software and other intangible assets		4,568		5,075
Prepaid assets		2,266		2,215
Other		5,985		6,879
Other assets	$	23,407	$	23,560

	September 30,		March 31,
	2012
Deferred revenue	$	17,285	$	15,935
Accrued expenses		9,280		15,386
Other		8,268		9,501
Accrued expenses and other liabilities	$	34,833	$	40,822

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SHARE REPURCHASE (Details) (USD $) In Thousands, except Share data, unless otherwise specified	132 Months Ended	6 Months Ended		10 Months Ended
	Sep. 30, 2012	Sep. 30, 2012 Share Repurchase Plan of August 2011 [Member]	Sep. 30, 2012 Share Repurchase Plan of November 2011 [Member]	Sep. 15, 2012 Share Repurchase Plan of November 2011 [Member]	Sep. 30, 2012 Share Repurchase Plan of August 2012 [Member]
Equity, Class of Treasury Stock [Line Items]
Authorized number of shares under stock repurchase program (in shares)		500,000	500,000		500,000
Common stock repurchased during the period (in shares)	4,700,000	403,458	19,423	72,978
Average cost of share repurchased (In dollars per share)	$ 13.94		$ 29.46
Common stock repurchased during the period	$ 65,300		$ 572

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EARNINGS PER SHARE (Tables)

6 Months Ended

Sep. 30, 2012

EARNINGS PER SHARE [Abstract]

Reconciliation of numerators and denominators used to calculate basic and diluted earnings per common share

The following table provides a reconciliation of the numerators and denominators used to calculate basic and diluted net earnings per common share as disclosed on our unaudited condensed consolidated statements of operations for the three and six months ended September 30, 2012 and September 30, 2011 (in thousands, except per share data).

	Three months ended September 30,				Six months ended September 30,
	2012		2011		2012		2011
Net earnings available to common shareholders—basic and diluted	$	10,033	$	7,064	$	18,095	$	10,767
Weighted average shares outstanding — basic		7,770		8,153		7,746		8,230
Effect of dilutive shares		151		174		167		192
Weighted average shares outstanding — diluted		7,921		8,327		7,913		8,422
Earnings per common share:
Basic	$	1.29	$	0.87	$	2.34	$	1.31
Diluted	$	1.27	$	0.85	$	2.29	$	1.28

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SHARE-BASED COMPENSATION (Tables)

6 Months Ended

Sep. 30, 2012

SHARE-BASED COMPENSATION [Abstract]

Summary of stock option activity

A summary of stock option activity during the six months ended September 30, 2012 is as follows:

	Number of Shares			Exercise Price Range		Weighted Average Exercise Price		Weighted Average Contractual Life Remaining (in years)		Aggregate Intrinsic Value
Outstanding, April 1, 2012		145,000		$	7.14 - $15.25	$	11.91
Options exercised (1)		(25,000	)	$	7.14	$	7.14
Outstanding, September 30, 2012		120,000		$	10.75 - $15.25	$	12.90		2.0	$	3,158,100
Vested at September 30, 2012		120,000				$	12.90		2.0	$	3,158,100
Exercisable at September 30, 2012		120,000				$	12.90		2.0	$	3,158,100

(1) The total intrinsic value of stock options exercised during the six months ended September 30, 2012 was $683 thousand.

Additional information regarding stock options outstanding as of September 30, 2012 is as follows:

		Options Outstanding and Exercisable
Range of Exercise Prices		Options Outstanding		Weighted Average Exercise Price per Share		Weighted Average Contractual Life Remaining (in years)
$	10.75 - $13.50		80,000	$	11.74		2.5
$	13.51 - $15.25		40,000	$	15.23		1.0
$	10.75 - $15.25		120,000	$	12.90		2.0

Summary of nonvested restricted shares

For the six months ended September 30, 2012, we granted 7,831 restricted shares under the 2008 Director LTIP, and 96,590 restricted shares under the 2008 Employee LTIP. A summary of the non-vested restricted shares is as follows:

	Number of Shares			Weighted Average Grant- date Fair Value
Nonvested April 1, 2012		276,130		$	20.75
Granted		104,421		$	32.64
Vested		(102,523	)	$	11.68
Forfeited		(1,167	)	$	20.17
Nonvested September 30, 2012		276,861		$	25.19

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UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Parenthetical) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Sep. 30, 2012
Foreign currency translation adjustment, tax	$ 1

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FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables)

6 Months Ended

Sep. 30, 2012

FAIR VALUE OF FINANCIAL INSTRUMENTS [Abstract]

Fair value hierarchy of financial instruments and contingent liability

The following table summarizes the fair value hierarchy of our financial instruments and contingent liability (in thousands):

			Fair Value Measurement Using
	September 30, 2012		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Gains (Losses)
Liabilities:
Contingent consideration	$	1,122	$	-	$	-	$	1,122	$	-

				Fair Value Measurement Using
		March 31, 2012		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Gains (Losses)
Liabilities:
Contingent consideration	$	1,292	$	-	$	-	$	1,292	$	-

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OTHER ASSETS AND ACCRUED EXPENSES AND OTHER LIABILITIES (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Mar. 31, 2012
Other Assets [Abstract]
Deferred costs	$ 10,588	$ 9,391
Capitalized software and other intangible assets	4,568	5,075
Prepaid assets	2,266	2,215
Other	5,985	6,879
Other assets	23,407	23,560
Accrued expenses and other liabilities [Abstract]
Deferred revenue	17,285	15,935
Accrued expenses	9,280	15,386
Other	8,268	9,501
Accrued expenses and other liabilities	$ 34,833	$ 40,822

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UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Mar. 31, 2012
ASSETS
Cash and cash equivalents	$ 43,935	$ 33,778
Short-term Investments	1,970	7,396
Accounts receivable-net	194,344	174,599
Notes receivable-net	18,148	24,337
Inventories-net	15,783	23,514
Investment in leases and leased equipment-net	112,380	115,974
Property and equipment-net	2,040	2,086
Other assets	23,407	23,560
Goodwill	28,787	28,444
TOTAL ASSETS	440,794	433,688
LIABILITIES
Accounts payable-equipment	8,066	17,268
Accounts payable-trade	24,650	26,719
Accounts payable-floor plan	84,366	85,911
Salaries and commissions payable	9,673	9,500
Accrued expenses and other liabilities	34,833	40,822
Recourse notes payable	1,682	1,727
Non-recourse notes payable	33,020	26,328
Deferred tax liability	5,786	5,786
Total Liabilities	202,076	214,061
COMMITMENTS AND CONTINGENCIES (Note 9)
STOCKHOLDERS' EQUITY
Preferred stock, $.01 par value; 2,000,000 shares authorized; none issued or outstanding	0	0
Common stock, $.01 par value; 25,000,000 shares authorized; 12,820,478 issued and 8,079,919 outstanding at September 30, 2012 and 12,692,224 issued and 7,999,895 outstanding at March 31, 2012	128	127
Additional paid-in capital	96,056	93,545
Treasury stock, at cost, 4,740,559 and 4,692,329 shares, respectively	(66,973)	(65,416)
Retained earnings	209,001	190,906
Accumulated other comprehensive income-foreign currency translation adjustment	506	465
Total Stockholders' Equity	238,718	219,627
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$ 440,794	$ 433,688

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SHARE-BASED COMPENSATION (Details) (USD $)	3 Months Ended		6 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012		Sep. 30, 2011	Mar. 31, 2012
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock options granted to employees (in shares)	0	0	0		0
Number of shares [Rollforward]
Outstanding, beginning of period (in shares)			145,000
Options exercised (1) (in shares)			(25,000)	[1]
Outstanding, end of period (in shares)	120,000		120,000
Vested, end of period (in shares)	120,000		120,000
Exercisable, end of period (in shares)	120,000		120,000
Exercise Price Range [Rollforward]
Outstanding, beginning of period (in dollars per share)	$ 12.90		$ 12.90			$ 11.91
Options exercised (in dollars per share)			$ 7.14	[1]
Outstanding, end of period (in dollars per share)	$ 12.90		$ 12.90			$ 11.91
Weighted Average Exercise Price [Rollforward]
Outstanding, beginning of period (in dollars per share)	$ 12.90		$ 12.90			$ 11.91
Options exercised (in dollars per share)			$ 7.14	[1]
Outstanding, end of period (in dollars per share)	$ 12.90		$ 12.90			$ 11.91
Vested, end of period (in dollars per share)	$ 12.90		$ 12.90
Exercisable, end of period (in dollars per share)	$ 12.90		$ 12.90
Weighted Average Contractual Life Remaining and Intrinsic Value [Abstract]
Outstanding, Weighted average contractual life			2 years
Vested, Weighted average contractual life			2 years
Exercisable, Weighted average contractual life			2 years
Outstanding, Aggregate Intrinsic Value	$ 3,158,100		$ 3,158,100
Vested, Aggregate Intrinsic Value	3,158,100		3,158,100
Exercisable, Aggregate Intrinsic Value	3,158,100		3,158,100
Total intrinsic value of stock options exercised			683,000
Weighted Average Grant-date Fair Value [Rollforward]
Treasury stock (in shares)	4,740,559		4,740,559			4,692,329
Treasury stock	66,973,000		66,973,000			65,416,000
Options Outstanding [Abstract]
Number of Options Outstanding and Exercisable (in shares)	120,000		120,000
Weighted Average Exercise Price per Share [Abstract]
Options Outstanding and Exercisable Weighted Average Exercise Price per Share (in dollars per share)	$ 12.90		$ 12.90			$ 11.91
Weighted Average Contractual Life Remaining [Abstract]
Options Outstanding and Exercisable Weighted Average Contractual Life Remaining (in years)			2 years
Compensation Expense [Abstract]
Forfeiture rate (in hundredths)	0.00%		0.00%
Total share-based compensation expense	915,000	650,000	1,600,000		1,100,000
Unrecognized compensation expense	5,800,000		5,800,000
Unrecognized compensation expense, period for recognition (in months)			33 months
Period over which employer contribution is vested			4 years
Expenses for the plan	236,000	214,000	465,000		417,000
Range $10.75 - $13.500 [Member]
Number of shares [Rollforward]
Outstanding, end of period (in shares)	80,000		80,000
Exercise Price Range [Rollforward]
Outstanding, beginning of period (in dollars per share)	$ 11.74		$ 11.74
Outstanding, end of period (in dollars per share)	$ 11.74		$ 11.74
Weighted Average Exercise Price [Rollforward]
Outstanding, beginning of period (in dollars per share)	$ 11.74		$ 11.74
Outstanding, end of period (in dollars per share)	$ 11.74		$ 11.74
Weighted Average Contractual Life Remaining and Intrinsic Value [Abstract]
Outstanding, Weighted average contractual life			2 years 6 months
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Range of Exercise Prices, Lower Range Limit (in dollars per share)			$ 10.75
Range of Exercise Prices, Upper Range Limit (in dollars per share)			$ 13.5
Options Outstanding [Abstract]
Number of Options Outstanding and Exercisable (in shares)	80,000		80,000
Weighted Average Exercise Price per Share [Abstract]
Options Outstanding and Exercisable Weighted Average Exercise Price per Share (in dollars per share)	$ 11.74		$ 11.74
Weighted Average Contractual Life Remaining [Abstract]
Options Outstanding and Exercisable Weighted Average Contractual Life Remaining (in years)			2 years 6 months
Range $13.51 - $15.25 [Member]
Number of shares [Rollforward]
Outstanding, end of period (in shares)	40,000		40,000
Exercise Price Range [Rollforward]
Outstanding, beginning of period (in dollars per share)	$ 15.23		$ 15.23
Outstanding, end of period (in dollars per share)	$ 15.23		$ 15.23
Weighted Average Exercise Price [Rollforward]
Outstanding, beginning of period (in dollars per share)	$ 15.23		$ 15.23
Outstanding, end of period (in dollars per share)	$ 15.23		$ 15.23
Weighted Average Contractual Life Remaining and Intrinsic Value [Abstract]
Outstanding, Weighted average contractual life			1 year
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Range of Exercise Prices, Lower Range Limit (in dollars per share)			$ 13.51
Range of Exercise Prices, Upper Range Limit (in dollars per share)			$ 15.25
Options Outstanding [Abstract]
Number of Options Outstanding and Exercisable (in shares)	40,000		40,000
Weighted Average Exercise Price per Share [Abstract]
Options Outstanding and Exercisable Weighted Average Exercise Price per Share (in dollars per share)	$ 15.23		$ 15.23
Weighted Average Contractual Life Remaining [Abstract]
Options Outstanding and Exercisable Weighted Average Contractual Life Remaining (in years)			1 year
Range $10.75 - $15.25 [Member]
Number of shares [Rollforward]
Outstanding, end of period (in shares)	120,000		120,000
Exercise Price Range [Rollforward]
Outstanding, beginning of period (in dollars per share)	$ 12.90		$ 12.90
Outstanding, end of period (in dollars per share)	$ 12.90		$ 12.90
Weighted Average Exercise Price [Rollforward]
Outstanding, beginning of period (in dollars per share)	$ 12.90		$ 12.90
Outstanding, end of period (in dollars per share)	$ 12.90		$ 12.90
Weighted Average Contractual Life Remaining and Intrinsic Value [Abstract]
Outstanding, Weighted average contractual life			2 years
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Range of Exercise Prices, Lower Range Limit (in dollars per share)			$ 10.75
Range of Exercise Prices, Upper Range Limit (in dollars per share)			$ 15.25
Options Outstanding [Abstract]
Number of Options Outstanding and Exercisable (in shares)	120,000		120,000
Weighted Average Exercise Price per Share [Abstract]
Options Outstanding and Exercisable Weighted Average Exercise Price per Share (in dollars per share)	$ 12.90		$ 12.90
Weighted Average Contractual Life Remaining [Abstract]
Options Outstanding and Exercisable Weighted Average Contractual Life Remaining (in years)			2 years
Minimum [Member]
Exercise Price Range [Rollforward]
Outstanding, beginning of period (in dollars per share)	$ 10.75		$ 10.75			$ 7.14
Outstanding, end of period (in dollars per share)	$ 10.75		$ 10.75			$ 7.14
Weighted Average Exercise Price [Rollforward]
Outstanding, beginning of period (in dollars per share)	$ 10.75		$ 10.75			$ 7.14
Outstanding, end of period (in dollars per share)	$ 10.75		$ 10.75			$ 7.14
Weighted Average Exercise Price per Share [Abstract]
Options Outstanding and Exercisable Weighted Average Exercise Price per Share (in dollars per share)	$ 10.75		$ 10.75			$ 7.14
Maximum [Member]
Exercise Price Range [Rollforward]
Outstanding, beginning of period (in dollars per share)	$ 15.25		$ 15.25			$ 15.25
Outstanding, end of period (in dollars per share)	$ 15.25		$ 15.25			$ 15.25
Weighted Average Exercise Price [Rollforward]
Outstanding, beginning of period (in dollars per share)	$ 15.25		$ 15.25			$ 15.25
Outstanding, end of period (in dollars per share)	$ 15.25		$ 15.25			$ 15.25
Weighted Average Exercise Price per Share [Abstract]
Options Outstanding and Exercisable Weighted Average Exercise Price per Share (in dollars per share)	$ 15.25		$ 15.25			$ 15.25
Restricted Stock [Member]
Weighted Average Contractual Life Remaining and Intrinsic Value [Abstract]
Number of restricted shares granted (in shares)			104,421
Number of Shares [Rollforward]
Nonvested (in shares)			276,130
Granted (in shares)			104,421
Vested (in shares)			(102,523)
Forefeited (in shares)			(1,167)
Nonvested (in shares)	276,861		276,861
Weighted Average Grant-date Fair Value [Rollforward]
Nonvested (in dollars per share)			$ 20.75
Granted (in dollars per share)			$ 32.64
Vested (in dollars per share)			$ 11.68
Forefeited (in dollars per share)			$ 20.17
Nonvested (in dollars per share)	$ 25.19		$ 25.19
Treasury stock (in shares)	28,807		28,807
Treasury stock	$ 985,000		$ 985,000
2008 Director LTIP Restricted Stock [Member]
Weighted Average Contractual Life Remaining and Intrinsic Value [Abstract]
Number of restricted shares granted (in shares)			7,831
Number of Shares [Rollforward]
Granted (in shares)			7,831
2008 Employee LTIP Restricted Stock [Member]
Weighted Average Contractual Life Remaining and Intrinsic Value [Abstract]
Number of restricted shares granted (in shares)			96,590
Number of Shares [Rollforward]
Granted (in shares)			96,590

[1] The total intrinsic value of stock options exercised during the six months ended September 30, 2012 was $683 thousand.

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UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Sep. 30, 2012	Sep. 30, 2011
Cash Flows From Operating Activities:
Net earnings	$ 18,095	$ 10,767	[1]
Adjustments to reconcile net earnings to net cash (used in) provided by operating activities:
Depreciation and amortization	5,615	4,868
Reserves for credit losses and sales returns	40	335
Provision for inventory allowances and inventory returns	97	(297)
Share-based compensation expense	1,578	1,080
Excess tax benefit from exercise of stock options	(756)	(303)
Payments from lessees directly to lenders-operating leases	(2,391)	(2,049)
(Gain)/loss on disposal of property, equipment and operating lease equipment	(560)	340
(Gain)/loss on sales of notes receivable	(525)	(439)
Excess increase in cash value of life insurance	(75)	(78)
Other	(255)	(125)
Changes in:
Accounts receivable - net	(19,551)	(30,328)
Notes receivable	1,028	(1,400)
Inventories-net	7,635	(3,259)
Investment in direct financing and sale-type leases-net	(795)	(447)
Other assets	(506)	9,709
Accounts payable-equipment	(9,081)	241
Accounts payable-trade	(2,037)	1,903
Salaries and commissions payable, accrued expenses and other liabilities	(4,949)	(10,643)
Net cash (used in) operating activities	(7,393)	(20,125)
Cash Flows From Investing Activities:
Purchases of short-term investments	(1,232)	0
Maturies of short-term investments	6,658	0
Proceeds from sale of property, equipment and operating lease equipment	877	1,116
Purchases of property, equipment and operating lease equipment	(6,223)	(3,054)
Issuance of notes receivable	(17,237)	(19,690)
Repayments of notes receivable	9,387	10,703
Proceeds from transfer of notes receivable	13,420	11,896
Premiums paid on life insurance	(43)	(70)
Cash used in acquisition, net of cash acquired	0	(3,514)
Net cash provided by (used in) investing activities	5,607	(2,613)
Cash Flows From Financing Activities:
Borrowings of non-recourse and recourse notes payable	14,605	2,300
Repayments of non-recourse and recourse notes payable	(500)	(292)
Repurchase of common stock	(1,557)	(10,034)
Proceeds from issuance of capital stock through option exercise	178	216
Excess tax benefit from share based compensation	756	303
Net borrowings on floor plan facility	(1,545)	(85)
Net cash provided by (used in) financing activities	11,937	(7,592)
Effect of exchange rate changes on cash	6	(20)
Net Increase (Decrease) in Cash and Cash Equivalents	10,157	(30,350)
Cash and Cash Equivalents, Beginning of Period	33,778	75,756
Cash and Cash Equivalents, End of Period	43,935	45,406
Supplemental Disclosures of Cash Flow Information:
Cash paid for interest	1	2
Cash paid for income taxes	6,738	3,773
Schedule of Non-Cash Investing and Financing Activities:
Purchase of property and equipment included in accounts payable	62	19
Purchase of operating lease equipment included in accounts payable	175	58
Sales of operating lease equipment included in accounts receivable	143	0
Principal payments from lessees directly to lenders	7,374	8,627
Vesting of share-based compensation	3,558	1,419
Contingent consideration	$ 0	$ 1,500

[1] See Note 2, "Restatement of Financial Statements."

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RESTATEMENT OF FINANCIAL STATEMENTS (Details) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended			6 Months Ended
	Sep. 30, 2012	Sep. 30, 2011		Sep. 30, 2012	Sep. 30, 2011
Sales of product and services	$ 250,178	$ 193,493	[1]	$ 484,460	$ 362,814	[1]
Total revenues	260,051	203,655	[1]	504,775	382,554	[1]
Cost of sales, product and services	205,199	158,429	[1]	399,590	299,103	[1]
Total costs and expenses	243,143	191,807	[1]	474,304	364,423	[1]
Net earnings	10,033	7,064	[1]	18,095	10,767	[1]
Net earnings per common share - basic (in dollars per share)	$ 1.29	$ 0.87	[1]	$ 2.34	$ 1.31	[1]
Net earnings per common share - diluted (in dollars per share)	$ 1.27	$ 0.85	[1]	$ 2.29	$ 1.28	[1]
As reported [Member]
Sales of product and services		252,688			454,654
Total revenues		262,850			474,394
Cost of sales, product and services		217,624			390,943
Total costs and expenses		251,002			456,263
Net earnings		7,064			10,767
Net earnings per common share - basic (in dollars per share)		$ 0.87			$ 1.31
Net earnings per common share - diluted (in dollars per share)		$ 0.85			$ 1.28
Adjustments [Member]
Sales of product and services		(59,195)			(91,840)
Total revenues		(59,195)			(91,840)
Cost of sales, product and services		(59,195)			(91,840)
Total costs and expenses		(59,195)			(91,840)
Net earnings		$ 0			$ 0
Net earnings per common share - basic (in dollars per share)		$ 0			$ 0
Net earnings per common share - diluted (in dollars per share)		$ 0			$ 0

[1] See Note 2, "Restatement of Financial Statements."

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SEGMENT REPORTING

6 Months Ended

Sep. 30, 2012

SEGMENT REPORTING [Abstract]

SEGMENT REPORTING

14. SEGMENT REPORTING

We manage our business segments on the basis of the products and services offered. Our reportable segments consist of our technology sales business segment and our financing business segment. The technology sales business segment sells information technology equipment and software and related services primarily to corporate customers on a nationwide basis. The technology sales business segment also provides Internet-based business-to-business supply chain management solutions for information technology and other operating resources. The financing business segment offers lease-financing solutions to corporations and governmental entities nationwide. We evaluate segment performance on the basis of total revenue, segment earnings and earnings before provision for income taxes.

Both segments utilize our proprietary software and services within the organization. Sales and services and related costs of our software are included in the technology sales business segment. Our reportable segment information is as follows (in thousands):

	Three months ended September 30, 2012						Three months ended September 30, 2011
	Technology Sales Business Segment		Financing Business Segment		Total		Technology Sales Business Segment		Financing Business Segment		Total
Sales of product and services	$	250,178	$	-	$	250,178	$	193,493	$	-	$	193,493
Financing revenues		-		7,413		7,413		-		7,305		7,305
Fee and other income		1,591		869		2,460		2,128		729		2,857
Total revenues		251,769		8,282		260,051		195,621		8,034		203,655
Cost of sales, product & services		205,199		-		205,199		158,429		-		158,429
Direct lease costs		-		2,461		2,461		-		2,078		2,078
Professional and other fees		2,260		447		2,707		1,986		369		2,355
Salaries and benefits		24,414		2,505		26,919		21,717		2,373		24,090
General and administrative expenses		5,011		400		5,411		4,267		240		4,507
Interest and financing costs		21		425		446		19		329		348
Total costs and expenses		236,905		6,238		243,143		186,418		5,389		191,807
Earnings before provision for income taxes	$	14,864	$	2,044	$	16,908	$	9,203	$	2,645	$	11,848
Assets	$	250,138	$	190,656	$	440,794	$	202,420	$	175,642	$	378,062

	Six months ended September 30, 2012						Six months ended September 30, 2011
	Technology Sales Business Segment		Financing Business Segment		Total		Technology Sales Business Segment		Financing Business Segment		Total
Sales of product and services	$	484,460	$	-	$	484,460	$	362,814	$	-	$	362,814
Financing revenues		-		15,313		15,313		-		14,739		14,739
Fee and other income		3,593		1,409		5,002		4,037		964		5,001
Total revenues		488,053		16,722		504,775		366,851		15,703		382,554
Cost of sales, product & services		399,590		-		399,590		299,103		-		299,103
Direct lease costs		-		4,704		4,704		-		4,174		4,174
Professional and other fees		4,763		1,057		5,820		4,060		720		4,780
Salaries and benefits		48,496		4,777		53,273		42,379		4,717		47,096
General and administrative expenses		9,450		616		10,066		8,034		506		8,540
Interest and financing costs		52		799		851		39		691		730
Total costs and expenses		462,351		11,953		474,304		353,615		10,808		364,423
Earnings before provision for income taxes	$	25,702	$	4,769	$	30,471	$	13,236	$	4,895	$	18,131
Assets	$	250,138	$	190,656	$	440,794	$	202,420	$	175,642	$	378,062

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INVESTMENT IN LEASES AND LEASED EQUIPMENT-NET (Details) (USD $)	3 Months Ended			6 Months Ended
	Sep. 30, 2012		Sep. 30, 2011	Sep. 30, 2012		Sep. 30, 2011	Mar. 31, 2012		Mar. 31, 2011
Investment in leases and leased equipment - net [Abstract]
Investment in direct financing and sales-type leases-net	$ 90,711,000			$ 90,711,000			$ 95,460,000
Investment in operating lease equipment-net	21,669,000	[1]		21,669,000	[1]		20,514,000	[1]
Investment in leases and leased equipment-net	112,380,000			112,380,000			115,974,000
INVESTMENT IN DIRECT FINANCING AND SALES-TYPE LEASES-NET [Abstract]
Minimum lease payments	93,646,000			93,646,000			99,747,000
Estimated unguaranteed residual value	7,319,000	[2]		7,319,000	[2]		6,917,000	[2]
Initial direct costs, net of amortization	746,000	[3]		746,000	[3]		797,000	[3]
Less: Unearned lease income	(9,648,000)			(9,648,000)			(10,665,000)
Less: Reserve for credit losses	(5,485,000)		(2,652,000)	(5,485,000)		(2,652,000)	(5,606,000)		(2,771,000)
Investment in direct financing and sales-type leases-net	90,711,000			90,711,000			95,460,000
Estimated unguaranteed residual values for direct financing lease	2,222,000			2,222,000			1,700,000
Accumulated amortization of initial direct cost	618,000			618,000			512,000
Gain (Loss) on sale of financing receivables	500,000		900,000	1,700,000		1,000,000
Proceeds from sale of financing receivables	12,600,000		42,000,000	43,400,000		24,600,000
INVESTMENT IN OPERATING LEASE EQUIPMENT-NET [Abstract]
Cost of equipment under operating lease	46,775,000			46,775,000			44,487,000
Less: Accumulated depreciation and amortization	(25,106,000)			(25,106,000)			(23,973,000)
Investment in operating lease equipment-net	21,669,000	[1]		21,669,000	[1]		20,514,000	[1]
Unguaranteed residual value of operating lease equipment net	7,918,000			7,918,000			7,802,000
Finance Leases Financing Receivable [Member]
INVESTMENT IN DIRECT FINANCING AND SALES-TYPE LEASES-NET [Abstract]
Less: Reserve for credit losses	$ (1,352,000)	[4]		$ (1,352,000)	[4]		$ (1,336,000)	[4]

[1] Includes estimated unguaranteed residual values of $7,918 thousand and $7,802 thousand as of September 30, 2012 and March 31, 2012, respectively, for operating leases.

[2] Includes estimated unguaranteed residual values of $2,222 thousand and $1,700 thousand as of September 30, 2012 and March 31, 2012, respectively, for direct financing leases which have been sold and accounted for as sales under Codification Topic, Transfers and Servicing.

[3] Initial direct costs are shown net of amortization of $618 thousand and $512 thousand as of September 30, 2012 and March 31, 2012, respectively.

[4] For details on reserve for credit losses, refer to Note 5, "Reserves for Credit Losses."

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RESTATEMENT OF FINANCIAL STATEMENTS (Tables)

6 Months Ended

Sep. 30, 2012

RESTATEMENT OF FINANCIAL STATEMENTS [Abstract]

Restatements of consolidated financial statements

The effects of this restatement are summarized in the table below (in thousands):

	Three Months Ended September 30, 2011							Six Months Ended September 30, 2011
	As reported		Adjustments			As restated		As reported		Adjustments			As restated
Sales of product and services	$	252,688	$	(59,195	)	$	193,493	$	454,654	$	(91,840	)	$	362,814
Total revenues	$	262,850	$	(59,195	)	$	203,655	$	474,394	$	(91,840	)	$	382,554
Cost of sales, product and services	$	217,624	$	(59,195	)	$	158,429	$	390,943	$	(91,840	)	$	299,103
Total costs and expenses	$	251,002	$	(59,195	)	$	191,807	$	456,263	$	(91,840	)	$	364,423
Net earnings	$	7,064	$	-		$	7,064	$	10,767	$	-		$	10,767
Net earnings per common share - basic	$	0.87	$	-		$	0.87	$	1.31	$	-		$	1.31
Net earnings per common share - diluted	$	0.85	$	-		$	0.85	$	1.28	$	-		$	1.28

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UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (USD $) In Thousands, except Share data, unless otherwise specified	Common Stock [Member]	Additional Paid-in Capital [Member]	Treasury Stock [Member]	Retained Earnings [Member]	Accumulated Other Comprehensive Income [Member]	Total
Balance at Mar. 31, 2012	$ 127	$ 93,545	$ (65,416)	$ 190,906	$ 465	$ 219,627
Balance (in shares) at Mar. 31, 2012	7,999,895					7,999,895
Issuance of shares for option exercises	0	178	0	0	0	178
Issuance of shares for option exercises (in shares)	25,000					25,000	[1]
Excess tax benefit of share based compensation	0	756	0	0	0	756
Effect of share-based compensation	1	1,577	0	0	0	1,578
Effect of share-based compensation (in shares)	103,254
Purchase of treasury stock	0	0	(1,557)	0	0	(1,557)
Purchase of treasury stock (in shares)	(48,230)
Comprehensive income, net of tax: [Abstract]
Net earnings	0	0	0	18,095	0	18,095
Foreign currency translation adjustment (net of tax of $1)	0	0	0	0	41	41
Balance at Sep. 30, 2012	$ 128	$ 96,056	$ (66,973)	$ 209,001	$ 506	$ 238,718
Balance (in shares) at Sep. 30, 2012	8,079,919					8,079,919

[1] The total intrinsic value of stock options exercised during the six months ended September 30, 2012 was $683 thousand.

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UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)	Sep. 30, 2012	Mar. 31, 2012
STOCKHOLDERS' EQUITY
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized (in shares)	2,000,000	2,000,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	25,000,000	25,000,000
Common stock, shares issued (in shares)	12,820,478	12,692,224
Common stock, shares outstanding (in shares)	8,079,919	7,999,895
Treasury stock, shares (in shares)	4,740,559	4,692,329

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EARNINGS PER SHARE

6 Months Ended

Sep. 30, 2012

EARNINGS PER SHARE [Abstract]

EARNINGS PER SHARE

9. EARNINGS PER SHARE

Basic earnings per share is calculated by dividing net earnings available to common shareholders by the basic weighted average number of shares of common stock outstanding during each period. Diluted earnings per share is calculated by dividing net earnings available to common shareholders by the basic weighted average number of shares of common stock outstanding plus incremental shares issuable upon the assumed exercise of "in-the-money" stock options and other common stock equivalents during each period.

The following table provides a reconciliation of the numerators and denominators used to calculate basic and diluted net earnings per common share as disclosed on our unaudited condensed consolidated statements of operations for the three and six months ended September 30, 2012 and September 30, 2011 (in thousands, except per share data).

	Three months ended September 30,				Six months ended September 30,
	2012		2011		2012		2011
Net earnings available to common shareholders—basic and diluted	$	10,033	$	7,064	$	18,095	$	10,767
Weighted average shares outstanding — basic		7,770		8,153		7,746		8,230
Effect of dilutive shares		151		174		167		192
Weighted average shares outstanding — diluted		7,921		8,327		7,913		8,422
Earnings per common share:
Basic	$	1.29	$	0.87	$	2.34	$	1.31
Diluted	$	1.27	$	0.85	$	2.29	$	1.28

All unexercised stock options were included in the computations of diluted earnings per share for the three and six months ended September 30, 2012 and 2011.

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Document and Entity Information	6 Months Ended
	Sep. 30, 2012	Oct. 31, 2012
Document and Entity Information [Abstract]
Entity Registrant Name	EPLUS INC
Entity Central Index Key	0001022408
Current Fiscal Year End Date	--03-31
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		8,080,000
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	Q2
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2012

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SHARE REPURCHASE

6 Months Ended

Sep. 30, 2012

SHARE REPURCHASE [Abstract]

SHARE REPURCHASE

10. SHARE REPURCHASE

On August 15, 2011, our Board approved a share repurchase plan which authorized share repurchases up to 500,000 shares over a 12-month period commencing on September 16, 2011. Since the commencement of this plan through November 14, 2011, we purchased 403,458 shares. On November 15, 2011, our Board amended the share repurchase plan to authorize share repurchases up to 500,000 shares commencing on November 15, 2011. We purchased 72,978 shares under the amended plan before it expired on September 15, 2012. On August 13, 2012, our Board authorized a new share repurchase plan which authorized share repurchases up to 500,000 shares commencing on September 16, 2012, through September 15, 2013. The purchases may be made from time to time in the open market, or in privately negotiated transactions, subject to availability. Any repurchased shares will have the status of treasury shares and may be used, when needed, for general corporate purposes.

During the six months ended September 30, 2012, we repurchased 19,423 shares of our outstanding common stock at an average cost of $29.46 per share for a total purchase price of $572 thousand. Since the inception of our initial repurchase program on September 20, 2001 to September 30, 2012, we have repurchased 4.7 million shares of our outstanding common stock at an average cost of $13.94 per share for a total purchase price of $65.3 million.

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UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended			6 Months Ended
	Sep. 30, 2012	Sep. 30, 2011		Sep. 30, 2012	Sep. 30, 2011
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS [Abstract]
Sales of product and services	$ 250,178	$ 193,493	[1]	$ 484,460	$ 362,814	[1]
Financing revenue	7,413	7,305	[1]	15,313	14,739	[1]
Fee and other income	2,460	2,857	[1]	5,002	5,001	[1]
TOTAL REVENUES	260,051	203,655	[1]	504,775	382,554	[1]
COSTS AND EXPENSES
Cost of sales, product and services	205,199	158,429	[1]	399,590	299,103	[1]
Direct lease costs	2,461	2,078	[1]	4,704	4,174	[1]
Total cost of sales	207,660	160,507	[1]	404,294	303,277	[1]
Professional and other fees	2,707	2,355	[1]	5,820	4,780	[1]
Salaries and benefits	26,919	24,090	[1]	53,273	47,096	[1]
General and administrative expenses	5,411	4,507	[1]	10,066	8,540	[1]
Interest and financing costs	446	348	[1]	851	730	[1]
Total expenses	35,483	31,300	[1]	70,010	61,146	[1]
TOTAL COSTS AND EXPENSES	243,143	191,807	[1]	474,304	364,423	[1]
EARNINGS BEFORE PROVISION FOR INCOME TAXES	16,908	11,848	[1]	30,471	18,131	[1]
PROVISION FOR INCOME TAXES	6,875	4,784	[1]	12,376	7,364	[1]
NET EARNINGS	$ 10,033	$ 7,064	[1]	$ 18,095	$ 10,767	[1]
NET EARNINGS PER COMMON SHARE-BASIC (In dollars per share)	$ 1.29	$ 0.87	[1]	$ 2.34	$ 1.31	[1]
NET EARNINGS PER COMMON SHARE-DILUTED (In dollars per share)	$ 1.27	$ 0.85	[1]	$ 2.29	$ 1.28	[1]
WEIGHTED AVERAGE SHARES OUTSTANDING-BASIC (In shares)	7,770,206	8,153,495	[1]	7,745,506	8,230,022	[1]
WEIGHTED AVERAGE SHARES OUTSTANDING-DILUTED (In shares)	7,920,927	8,327,748	[1]	7,912,818	8,422,099	[1]

[1] See Note 2, "Restatement of Financial Statements."

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GOODWILL

6 Months Ended

Sep. 30, 2012

GOODWILL [Abstract]

GOODWILL

4. GOODWILL

Goodwill represents the premium paid over the fair value of net tangible and intangible assets we have acquired in business combinations. The following table summarizes the amount of goodwill allocated to our reporting units (in thousands):

	Financing			Technology		Software Procurement			Software Document Management		Total
Balance April 1, 2012
Goodwill	$	4,029		$	27,355	$	4,644		$	1,089	$	37,117
Accumulated impairment losses		(4,029	)		-		(4,644	)		-		(8,673	)
		-			27,355		-			1,089		28,444
Purchase accounting adjustments		-			343		-			-		343
Balance September 30, 2012
Goodwill		4,029			27,698		4,644			1,089		37,460
Accumulated impairment losses		(4,029	)		-		(4,644	)		-		(8,673	)
Goodwill - net balance September 30, 2012	$	-		$	27,698	$	-		$	1,089	$	28,787

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INVESTMENT IN LEASES AND LEASED EQUIPMENT-NET

6 Months Ended

Sep. 30, 2012

INVESTMENT IN LEASES AND LEASED EQUIPMENT-NET [Abstract]

INVESTMENT IN LEASES AND LEASED EQUIPMENT-NET

3. INVESTMENT IN LEASES AND LEASED EQUIPMENT—NET

Investment in leases and leased equipment—net consists of the following (in thousands):

	September 30,		March 31,
	2012
Investment in direct financing and sales-type leases—net	$	90,711	$	95,460
Investment in operating lease equipment—net		21,669		20,514
	$	112,380	$	115,974

INVESTMENT IN DIRECT FINANCING AND SALES-TYPE LEASES—NET

Our investment in direct financing and sales-type leases—net consists of the following (in thousands):

	September 30,			March 31,
	2012
Minimum lease payments	$	93,646		$	99,747
Estimated unguaranteed residual value (1)		7,319			6,917
Initial direct costs, net of amortization (2)		746			797
Less: Unearned lease income		(9,648	)		(10,665	)
Less: Reserve for credit losses (3)		(1,352	)		(1,336	)
Investment in direct financing and sales-type leases—net	$	90,711		$	95,460

(1) Includes estimated unguaranteed residual values of $2,222 thousand and $1,700 thousand as of September 30, 2012 and March 31, 2012, respectively, for direct financing leases which have been sold and accounted for as sales under Codification Topic, Transfers and Servicing.

(2) Initial direct costs are shown net of amortization of $618 thousand and $512 thousand as of September 30, 2012 and March 31, 2012, respectively.

(3) For details on reserve for credit losses, refer to Note 5, "Reserves for Credit Losses."

Our net investment in direct financing and sales-type leases for certain lease agreements serves as collateral for non-recourse equipment notes. See Note 7, "Notes Payable and Credit Facility."

We enter into agreements to sell the financing receivable associated with certain notes receivables and investments in direct financing leases, which are accounted for as a sale under Codification Topic, Transfer and Servicing. We recognized a net gain for these sales of $0.5 million and $0.9 million in financing revenues in the unaudited condensed consolidated statement of operations for the three months ended September 30, 2012 and 2011, respectively, and $1.7 million and $1.0 million for the six months ended September 30, 2012 and 2011, respectively. Total proceeds from these sales were $12.6 million and $23.0 million for the three months ended September 30, 2012 and 2011, respectively. Total proceeds from these sales were $42.0 million and $24.6 million for the six months ended September 30, 2012 and 2011, respectively.

INVESTMENT IN OPERATING LEASE EQUIPMENT—NET

Investment in operating lease equipment—net primarily represents leases that do not qualify as direct financing leases. The components of the investment in operating lease equipment—net are as follows (in thousands):

	September 30,			March 31,
	2012
Cost of equipment under operating leases	$	46,775		$	44,487
Less: Accumulated depreciation and amortization		(25,106	)		(23,973	)
Investment in operating lease equipment—net (1)	$	21,669		$	20,514

(1) Includes estimated unguaranteed residual values of $7,918 thousand and $7,802 thousand as of September 30, 2012 and March 31, 2012, respectively, for operating leases.

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ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

6 Months Ended

Sep. 30, 2012

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract]

BASIS OF PRESENTATION

BASIS OF PRESENTATION — Our company was founded in 1990 and is a Delaware corporation. ePlus inc. is sometimes referred to in this Quarterly Report on Form 10-Q as "we," "our," "us," "ourselves," or "ePlus." The unaudited condensed consolidated financial statements include the accounts of ePlus inc. and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated.

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS— Management has evaluated subsequent events after the balance sheet date through the date our financial statements are issued.

USE OF ESTIMATES

USE OF ESTIMATES — The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Significant items subject to such estimates and assumptions include estimates related to revenue recognition, residual values, vendor consideration, lease classification, goodwill and intangibles, reserves for credit losses, and the recognition and measurement of income tax assets and liabilities. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results may differ from these estimates.

REVENUE RECOGNITION

REVENUE RECOGNITION–The majority of our revenues are derived from the following sources: sales of third party products, software, software assurance, maintenance and services; sales of our services and software; and financing revenues. For all these revenue sources, we determine whether we are the principal or agent in accordance with Codification Topic, Revenue Recognition, Subtopic Principal Agent Considerations. Our revenue recognition policies vary based on these revenue sources.

For the sale of third party software assurance, maintenance and services we concluded that we are acting as an agent and recognize revenue for these transactions on a net basis at the date of sale, which is presented within sales of products and services in our unaudited condensed consolidated statements of operations. Gross billings for all products and services for the three months ended September 30, 2012 and September 30, 2011 were $318.8 million and $252.7 million, respectively. Gross billings for all products and services for the six months ended September 30, 2012 and September 30, 2011 were $597.6 million and $454.7 million, respectively.

CONCENTRATION OF RISK

CONCENTRATIONS OF RISK—Financial instruments that potentially subject us to concentrations of credit risk include cash and cash equivalents, short-term investments, accounts receivable, notes receivable and investments in direct financing and sales-type leases. Cash and cash equivalents and short-term investments are maintained principally with financial institutions in the United States, which have high credit ratings. Risk on accounts receivable, notes receivable and investments in direct financing and sales-type leases is reduced by the large number of diverse industries comprising our customer base and through the ongoing evaluation of collectability of our portfolio. Our credit risk is further mitigated through the underlying collateral and whether the asset is funded with recourse or non-recourse notes payable.

A substantial portion of our sales of product and services are from sales of Cisco and Hewlett Packard products, which represented approximately 49.8% and 10.0%, and 51.6% and 10.1%, respectively, of our sales of product and services for the three and six months ended September 30, 2012, as compared to 46.1% and 17.2%, and 44.0% and 16.4%, respectively, of our sales of product and services for the three and six months ended September 30, 2011. Any changes in our vendors' ability to provide products could have a material adverse effect on our business, results of operations and financial condition.

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SHARE-BASED COMPENSATION

6 Months Ended

Sep. 30, 2012

SHARE-BASED COMPENSATION [Abstract]

SHARE-BASED COMPENSATION

11. SHARE-BASED COMPENSATION

Share-Based Plans

We have share-based awards outstanding under the followingplans: (1) Amendment and Restatement of the 1998 Stock Incentive Plan (2003) (the "Amended LTIP (2003)"), (2) the 2008 Non-Employee Director Long-Term Incentive Plan ("2008 Director LTIP"), and (3) the 2008 Employee Long-Term Incentive Plan ("2008 Employee LTIP"). On September 13, 2012, our shareholders approved the 2012 Employee Long-Term Incentive Plan ("2012 Employee LTIP"), which has no awards outstanding as of September 30, 2012. Currently, awards are only issued under the 2008 Director LTIP and the 2008 Employee LTIP. All the share-based plans require the use of the previous trading day's closing price when the grant date falls on a date the stock was not traded.

For a summary of descriptions and vesting periods of the 1998 LTIP, the Amended LTIP (2001), the Amended LTIP (2003), the 2008 Director LTIP and the 2008 Employee LTIP discussed below, please refer to our Annual Report on Form 10-K for the year ended March 31, 2012.

Stock Option Activity

During the three and six months ended September 30, 2012 and 2011, there were no stock options granted to employees.

A summary of stock option activity during the six months ended September 30, 2012 is as follows:

	Number of Shares			Exercise Price Range		Weighted Average Exercise Price		Weighted Average Contractual Life Remaining (in years)		Aggregate Intrinsic Value
Outstanding, April 1, 2012		145,000		$	7.14 - $15.25	$	11.91
Options exercised (1)		(25,000	)	$	7.14	$	7.14
Outstanding, September 30, 2012		120,000		$	10.75 - $15.25	$	12.90		2.0	$	3,158,100
Vested at September 30, 2012		120,000				$	12.90		2.0	$	3,158,100
Exercisable at September 30, 2012		120,000				$	12.90		2.0	$	3,158,100

(1) The total intrinsic value of stock options exercised during the six months ended September 30, 2012 was $683 thousand.

Additional information regarding stock options outstanding as of September 30, 2012 is as follows:

		Options Outstanding and Exercisable
Range of Exercise Prices		Options Outstanding		Weighted Average Exercise Price per Share		Weighted Average Contractual Life Remaining (in years)
$	10.75 - $13.50		80,000	$	11.74		2.5
$	13.51 - $15.25		40,000	$	15.23		1.0
$	10.75 - $15.25		120,000	$	12.90		2.0

We issue shares from our authorized but unissued common stock to satisfy stock option exercises. At September 30, 2012, all of our options are vested.

Restricted Stock Activity

For the six months ended September 30, 2012, we granted 7,831 restricted shares under the 2008 Director LTIP, and 96,590 restricted shares under the 2008 Employee LTIP. A summary of the non-vested restricted shares is as follows:

	Number of Shares			Weighted Average Grant- date Fair Value
Nonvested April 1, 2012		276,130		$	20.75
Granted		104,421		$	32.64
Vested		(102,523	)	$	11.68
Forfeited		(1,167	)	$	20.17
Nonvested September 30, 2012		276,861		$	25.19

Upon each vesting period of the restricted stock awards, employees are subject to minimum tax withholding obligations. The 2008 Director LTIP and 2008 Employee LTIP allows us, at the participant's election, to withhold a sufficient number of shares due to the participant to satisfy their minimum tax withholding obligations. During the six months ended September 30, 2012, we withheld 28,807 shares of common stock at a value of $985 thousand, which was included in treasury stock.

Compensation Expense

We recognize compensation cost for awards of restricted stock with graded vesting on a straight line basis over the requisite service period and estimate the forfeiture rate to be zero, based on historical experience. There are no additional conditions for vesting other than service conditions. During the three months ended September 30, 2012 and 2011, we recognized $915 thousand and $650 thousand, respectively, of total share-based compensation expense. During the six months ended September 30, 2012 and 2011, we recognized $1.6 million and $1.1 million, respectively, of total share-based compensation expense. Unrecognized compensation expense related to non-vested restricted stock was $5.8 million, which will be fully recognized over the next 33 months.

We also provide our employees with a contributory 401(k) profit sharing plan. Employer contribution percentages are determined by us and are discretionary each year. The employer contributions vest pro-ratably over a four-year service period by the employees, after which, all employer contributions will be fully vested. For the three months ended September 30, 2012 and 2011, our contribution expense for the plan was approximately $236 thousand and $214 thousand, respectively. For the six months ended September 30, 2012 and 2011, our contribution expense for the plan was approximately $465 thousand and $417 thousand, respectively.

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NOTES PAYABLE AND CREDIT FACILITY

6 Months Ended

Sep. 30, 2012

NOTES PAYABLE AND CREDIT FACILITY [Abstract]

NOTES PAYABLE AND CREDIT FACILITY

7. NOTES PAYABLE AND CREDIT FACILITY

Non-recourse and recourse obligations consist of the following (in thousands):

	September 30,		March 31,
	2012
Recourse note payable at 4.84% expires on March 2, 2017	$	1,682	$	1,727
Non-recourse equipment notes secured by related investments in leases with interest rates ranging from2.58% to 10.0% at September 30, 2012 and March 31, 2012	$	33,020	$	26,328

Principal and interest payments on the non-recourse notes payable are generally due monthly in amounts that are approximately equal to the total payments due from the lessee under the leases that collateralize the notes payable. The weighted average interest rate for our non-recourse notes payable was 5.22% and 5.15%, as of September 30, 2012 and March 31, 2012, respectively. Under recourse financing, in the event of a default by a lessee, the lender has recourse against the lessee, the equipment serving as collateral, and us. Under non-recourse financing, in the event of a default by a lessee, the lender generally only has recourse against the lessee, and the equipment serving as collateral, but not against us.

Our technology sales business segment, through our subsidiary ePlus Technology, inc., finances its operations with funds generated from operations, and with a credit facility with GE Commercial Distribution Finance Corporation ("GECDF"). This facility provides short-term capital for our technology sales business segment. There are two components of the GECDF credit facility: (1) a floor plan component and (2) an accounts receivable component. Under the floor plan component, we had outstanding balances of $84.4 million and $85.9 million as of September 30, 2012 and March 31, 2012, respectively. Under the accounts receivable component, we had no outstanding balances as of September 30, 2012 and March 31, 2012. As of September 30, 2012, the facility agreement had an aggregate limit of the two components of $175 million, and the accounts receivable component had a sub-limit of $30 million, which bears interest assessed at a rate of the One Month Libor plus two and one half percent. The credit facility with GECDF was amended and restated in July 2012 which increased the credit limit from $125 million to $175 million and modified the covenants, interest rate and other requirements within the facility.

The credit facility has full recourse to ePlus Technology, inc. and is secured by a blanket lien against all its assets, such as receivables and inventory. Availability under the facility may be limited by the asset value of equipment we purchase or accounts receivable, and may be further limited by certain covenants and terms and conditions of the facility. These covenants include but are not limited to a minimum excess availability of the facility and minimum earnings before interest, taxes, depreciation and amortization ("EBITDA") of ePlus Technology, inc. Management believes we were in compliance with these covenants as of September 30, 2012. In addition, the facility restricts the ability of ePlus Technology, inc. to transfer funds to its affiliates in the form of dividends, loans or advances with certain exceptions for dividends to ePlus inc. The facility also requires that financial statements of the Company be provided within 45 days of each quarter and 90 days of each fiscal year end and also includes that other operational reports be provided on a regular basis. Either party may terminate with 90 days' advance notice. We are not, and do not believe that we are reasonably likely to be, in breach of the GECDF credit facility. In addition, we do not believe that the covenants of the GECDF credit facility materially limit our ability to undertake financing. In this regard, the covenants apply only to our subsidiary, ePlus Technology, inc. This credit facility is secured by the assets of only ePlus Technology, inc. and the guaranty as described below.

The facility provided by GECDF requires a guaranty of $10.5 million by ePlus inc. The guaranty requires ePlus inc. to deliver its annual audited financial statements by certain dates. We have delivered the annual audited financial statements for the year ended March 31, 2012, as required. The loss of the GECDF credit facility could have a material adverse effect on our future results as we currently rely on this facility and its components for daily working capital and liquidity for our technology sales business segment and as an operational function of our accounts payable process.

We have an agreement with 1st Commonwealth Bank of Virginia to provide us with a $0.5 million credit facility, which matured October 26, 2012. This credit facility was renewed for two years effective October 27, 2012. The credit facility is available for use by us and our affiliates and the lender has full recourse to us. Borrowings under this facility bear interest at the Wall Street Journal U.S. Prime rate plus 1%. The primary purpose of the facility is to provide letters of credit for landlords, taxing authorities and bids. As of September 30, 2012 and as of March 31, 2012, we had no outstanding balance on this credit facility.

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RESERVES FOR CREDIT LOSSES

6 Months Ended

Sep. 30, 2012

RESERVES FOR CREDIT LOSSES [Abstract]

RESERVES FOR CREDIT LOSSES

5. RESERVES FOR CREDIT LOSSES

Activity in our reserves for credit losses for the six months ended September 30, 2012 and 2011 were as follows (in thousands):

	Accounts Receivable			Notes Receivable		Lease-Related Receivables			Total
Balance April 1, 2012	$	1,307		$	2,963	$	1,336		$	5,606
Provision for bad debts		(206	)		117		19			(70	)
Write-offs and other		(48	)		-		(3	)		(51	)
Balance September 30, 2012	$	1,053		$	3,080	$	1,352		$	5,485

	Accounts Receivable			Notes Receivable		Lease-Related Assets			Total
Balance April 1, 2011	$	944		$	94	$	1,733		$	2,771
Provision for bad debts		129			162		(184	)		107
Write-offs and other		(224	)		-		(2	)		(226	)
Balance September 30, 2011	$	849		$	256	$	1,547		$	2,652

Our reserves for credit losses and minimum payments associated with our notes receivables and lease related receivables disaggregated on the basis of our impairment method were as follows (in thousands):

	September 30, 2012				March 31, 2012
	Notes Receivable		Lease-Related Receivables		Notes Receivable		Lease-Related Receivables
Reserves for credit losses:
Ending balance: collectively evaluated for impairment	$	133	$	1,258	$	298	$	1,314
Ending balance: individually evaluated for impairment		2,947		94		2,665		22
Ending balance	$	3,080	$	1,352	$	2,963	$	1,336
Minimum payments:
Ending balance: collectively evaluated for impairment	$	17,728	$	93,335	$	22,944	$	99,545
Ending balance: individually evaluated for impairment		3,500		311		4,356		202
Ending balance	$	21,228	$	93,646	$	27,300	$	99,747

During fiscal year 2012, we began selling and financing various products and services to a large law firm, which filed for bankruptcy in May 2012. As of September 30, 2012, we had $3.6 million of notes and lease-related receivables from this customer and total reserves for credit losses of $2.9 million, which represented our estimated probable loss.

As of March 31, 2012, we had $4.2 million of notes receivables from this customer and total reserves for credit losses of $2.6 million. In addition to the notes receivable, there were accounts receivable for this customer of $0.9 million and a reserve for credit losses of $0.3 million as of March 31, 2012. Accordingly, the total receivables associated with this customer as of March 31, 2012 were $5.1 million and our estimated probable loss was $2.9 million. As of March 31, 2012, the notes and lease receivables associated with this customer were placed on non-accrual status.

As of September 30, 2012, the age of the recorded minimum lease payments and net credit exposure associated with our investment in direct financing and sales-type leases that are past due, disaggregated based on our internally assigned credit quality ratings ("CQR"), were as follows (in thousands):

	31-60 Days Past Due		61-90 Days Past Due		Greater than 90 Days Past Due		Total Past Due		Current		Unbilled Minimum Lease Payments		Total Minimum Lease Payments		Unearned Income			Non- Recourse Notes Payable			Net Credit Exposure
September 30, 2012
High CQR	$	35	$	15	$	255	$	305	$	534	$	51,490	$	52,329	$	(3,889	)	$	(4,003	)	$	44,437
Average CQR		27		-		25		52		76		40,848		40,976		(3,913	)		(15,413	)		21,650
Low CQR		6		12		29		47		-		294		341		(30	)		-			311
Total		68		27		309		404		610		92,632		93,646		(7,832	)		(19,416	)		66,398
March 31, 2012
High CQR	$	1,767	$	5	$	72	$	1,844	$	977	$	58,214	$	61,035	$	(4,541	)	$	(3,480	)	$	53,014
Average CQR		85		7		12		104		53		38,337		38,494		(4,445	)		(15,109	)		18,940
Low CQR		-		-		-		-		-		218		218		(16	)		-			202
Total	$	1,852	$	12	$	84	$	1,948	$	1,030	$	96,769	$	99,747	$	(9,002	)	$	(18,589	)	$	72,156

As of September 30, 2012, the age of the recorded notes receivable balance disaggregated based on our internally assigned CQR were as follows (in thousands):

	31-60Days Past Due		61-90 Days Past Due		Greater than 90 Days Past Due		Total Past Due		Current		Unbilled Notes Receivable		Total
September 30, 2012
High CQR	$	500	$	578	$	-	$	1,078	$	211	$	12,796	$	14,085
Average CQR		-		-		-		-		15		3,628		3,643
Low CQR		51		-		678		729		-		2,771		3,500
Total	$	551	$	578	$	678	$	1,807	$	226	$	19,195	$	21,228
March 31, 2012
High CQR	$	-	$	-	$	-	$	-	$	2,661	$	18,140	$	20,801
Average CQR		-		-		-		-		29		2,113		2,142
Low CQR		-		-		86		86		387		3,884		4,357
Total	$	-	$	-	$	86	$	86	$	3,077	$	24,137	$	27,300

We estimate losses on our net credit exposure to be between 0% - 5% for customers with highest CQR, as these customers are investment grade or the equivalent of investment grade. We estimate losses on our net credit exposure to be between 2% - 25% for customers with average CQR, and between 50% - 100% for customers with low CQR, which includes customers in bankruptcy.

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OTHER ASSETS AND ACCRUED EXPENSES AND OTHER LIABILITIES

6 Months Ended

Sep. 30, 2012

OTHER ASSETS AND ACCRUED EXPENSES AND OTHER LIABILITIES [Abstract]

OTHER ASSETS AND ACCRUED EXPENSES AND OTHER LIABILITIES

6. OTHER ASSETS AND ACCRUED EXPENSES AND OTHER LIABILITIES

Our other assets and accrued expenses and other liabilities consist of the following (in thousands):

	September 30,		March 31,
	2012
Deferred costs	$	10,588	$	9,391
Capitalized software and other intangible assets		4,568		5,075
Prepaid assets		2,266		2,215
Other		5,985		6,879
Other assets	$	23,407	$	23,560

	September 30,		March 31,
	2012
Deferred revenue	$	17,285	$	15,935
Accrued expenses		9,280		15,386
Other		8,268		9,501
Accrued expenses and other liabilities	$	34,833	$	40,822

Deferred costs and revenues primarily relate to the sales of products and services in our technology sales business segment. Other assets include unbilled accounts receivable, cash surrender value of life insurance policies, escrow deposits and off-lease equipment. Other liabilities include accrued taxes, deferred compensation, lease rental payments due to third parties, and contingent consideration related to an acquisition.

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COMMITMENTS AND CONTINGENCIES

6 Months Ended

Sep. 30, 2012

COMMITMENTS AND CONTINGENCIES [Abstract]

COMMITMENTS AND CONTINGENCIES

8. COMMITMENTS AND CONTINGENCIES

Legal Proceedings

On May 19, 2009, we filed a complaint in the United States District Court for the Eastern District of Virginia (the "trial court") against four defendants, alleging that they used or sold products, methods, processes, services and/or systems that infringe on certain of our patents. During July and August 2009, we entered into settlement and license agreements with three of the defendants. We obtained a jury verdict against the remaining defendant, Lawson Software, Inc. ("Lawson") on January 27, 2011. The jury unanimously found that Lawson infringed certain ePlus patents relating to electronic procurement systems, and additionally found that all ePlus patent claims tried in court were not invalid.

On May 23, 2011, the trial court issued a permanent injunction, ordering Lawson and its successors to: immediately stop selling and servicing products relating to its electronic procurement systems that infringe our patents; cease providing any ongoing or future maintenance, training or installation of its infringing products; and refrain from publishing any literature or information that encourages the use or sale of its infringing products. We have filed a motion seeking a finding that Lawson is in contempt of the injunction. We currently do not have a hearing date for our motion. Lawson has appealed the trial court's ruling. We also have appealed the trial court's evidentiary ruling which precluded us from seeking monetary damages. Oral argument on the appeal was held on June 6, 2012. Court calendars are inherently unpredictable and we cannot predict when the court will issue a ruling.

While we believe that we have a basis for our claims, these types of cases are complex in nature, are likely to have significant expenses associated with them, and we cannot predict whether we will be successful in our claim for a contempt finding or damages, whether any award ultimately received will exceed the costs incurred to pursue this matter, or how long it will take to bring this matter to resolution.

Other Matters

We may become party to various legal proceedings arising in the normal course of business, including preference payment claims asserted in customer bankruptcy proceedings, claims of alleged infringement of patents, trademarks, copyrights and other intellectual property rights, claims of alleged non-compliance with contract provisions, employment related claims, claims by competitors, vendors or customers, and claims related to alleged violations of laws and regulations. We accrue for costs associated with these contingencies when a loss is probable and the amount is reasonably estimable. Refer to Note 5, "Reserves for Credit Losses," for additional information regarding loss contingencies associated with our accounts, notes and lease-related receivables.

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ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract]
Gross billings for all products and services	$ 318.8	$ 252.7	$ 597.6	$ 454.7
Cisco and Hewlett Packard Concentration Risk [Member] | Product [Member]
CONCENTRATION OF RISK [Abstract]
Percentage of concentration risk (in hundredths)	49.80%	46.10%	51.60%	44.00%
Cisco and Hewlett Packard Concentration Risk [Member] | Services [Member]
CONCENTRATION OF RISK [Abstract]
Percentage of concentration risk (in hundredths)	10.00%	17.20%	10.10%	16.40%

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FAIR VALUE OF FINANCIAL INSTRUMENTS

6 Months Ended

Sep. 30, 2012

FAIR VALUE OF FINANCIAL INSTRUMENTS [Abstract]

FAIR VALUE OF FINANCIAL INSTRUMENTS

13. FAIR VALUE OF FINANCIAL INSTRUMENTS

We account for the fair values of our assets and liabilities in accordance with Codification Topic Fair Value Measurement and Disclosure. Accordingly, we established a three-tier value hierarchy, which prioritizes the inputs used in measuring fair value. The fair value of our non-recourse notes payable is calculated using the discounted cash flow approach based on the contractual terms of the notes payable discounted at current market rates.

The following table summarizes the fair value hierarchy of our financial instruments and contingent liability (in thousands):

			Fair Value Measurement Using
	September 30, 2012		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Gains (Losses)
Liabilities:
Contingent consideration	$	1,122	$	-	$	-	$	1,122	$	-

				Fair Value Measurement Using
		March 31, 2012		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Gains (Losses)
Liabilities:
Contingent consideration	$	1,292	$	-	$	-	$	1,292	$	-

For the six months ended September 30, 2012, the adjustment to the fair value of the contingent consideration was $170 thousand, which was presented within general and administrative expenses in our unaudited condensed consolidated statements of operations.

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GOODWILL (Tables)

6 Months Ended

Sep. 30, 2012

GOODWILL [Abstract]

Summary of goodwill allocated to reporting units

Goodwill represents the premium paid over the fair value of net tangible and intangible assets we have acquired in business combinations. The following table summarizes the amount of goodwill allocated to our reporting units (in thousands):

	Financing			Technology		Software Procurement			Software Document Management		Total
Balance April 1, 2012
Goodwill	$	4,029		$	27,355	$	4,644		$	1,089	$	37,117
Accumulated impairment losses		(4,029	)		-		(4,644	)		-		(8,673	)
		-			27,355		-			1,089		28,444
Purchase accounting adjustments		-			343		-			-		343
Balance September 30, 2012
Goodwill		4,029			27,698		4,644			1,089		37,460
Accumulated impairment losses		(4,029	)		-		(4,644	)		-		(8,673	)
Goodwill - net balance September 30, 2012	$	-		$	27,698	$	-		$	1,089	$	28,787

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NOTES PAYABLE AND CREDIT FACILITY (Details) (USD $)	6 Months Ended		6 Months Ended		6 Months Ended					6 Months Ended	12 Months Ended
	Sep. 30, 2012	Mar. 31, 2012	Sep. 30, 2012 GECDF [Member]	Jun. 30, 2012 GECDF [Member]	Sep. 30, 2012 First Commonwealth Bank of Virginia [Member]	Sep. 30, 2012 Account receivable component [Member]	Mar. 31, 2012 Account receivable component [Member]	Sep. 30, 2012 Floor plan component [Member]	Mar. 31, 2012 Floor plan component [Member]	Sep. 30, 2012 Non-Recourse Note Payable [Member]	Mar. 31, 2012 Non-Recourse Note Payable [Member]
Recourse and Non Recourse Notes Payable [Line Items]
Recourse notes payable	$ 1,682,000	$ 1,727,000
Non-recourse notes payable	33,020,000	26,328,000
Interest rate of recourse note , stated (in hundredths)	4.84%
Interest rate of non recourse note , minimum (in hundredths)										2.58%
Interest rate of non recourse note , maximum (in hundredths)											10.00%
Weighted average interest rate of non recourse note (in hundredths)										5.22%	5.15%
Number of components under GECDF credit facility			2
Accounts payable under floor plan component					500,000	0	0	84,400,000	85,900,000
Amount outstanding under accounts receivable component					500,000	0	0	84,400,000	85,900,000
Maximum amount can be borrowed under credit facility			175,000,000	125,000,000		30,000,000
Reference rate of credit facility			One Month Libor		U.S. Prime rate
Basis spread on reference rate (in hundredths)			2.50%		1.00%
Period of notice required to terminate credit facility	90 days
Guarantor obligations for credit facility, maximum			10,500,000
Amount outstanding under credit facility					$ 500,000	$ 0	$ 0	$ 84,400,000	$ 85,900,000
Renewed period of credit facility					2 years

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UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME [Abstract]
NET EARNINGS	$ 10,033	$ 7,064	$ 18,095	$ 10,767
OTHER COMPREHENSIVE INCOME, NET OF TAX:
Foreign currency translation adjustments	91	(197)	41	(182)
Other comprehensive (loss) income	91	(197)	41	(182)
TOTAL COMPREHENSIVE INCOME	$ 10,124	$ 6,867	$ 18,136	$ 10,585

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RESTATEMENT OF FINANCIAL STATEMENTS

6 Months Ended

Sep. 30, 2012

RESTATEMENT OF FINANCIAL STATEMENTS [Abstract]

RESTATEMENT OF FINANCIAL STATEMENTS

2. RESTATEMENT OF FINANCIAL STATEMENTS

During the preparation of our financial statements for the fiscal year ended March 31, 2012, we reassessed the presentation of sales of third party software assurance, maintenance and services and, after giving further consideration with respect to gross vs. net reporting, concluded that these transactions should be presented on a net basis in accordance with Codification Topic, Revenue Recognition, Subtopic Principal Agent Considerations. We determined that we should have been considered an agent in the transaction because a third party is responsible for the day to day provision of services under the contract. This change in the determination of that status results in different accounting treatment of the revenue resulting from the sale of such third party software assurance, maintenance and services, requiring the revenue to be reported net of the associated cost of the underlying contract with the third party service provider.

Under net sales recognition, the cost paid to the third party service provider is recorded as a reduction to sales of products and services, resulting in net sales being equal to the gross profit on the transaction. The change in accounting policy and restatement affects our revenues and offsetting costs and expenses for the identified periods but does not affect our previously reported earnings before provision for income tax, net earnings, net earnings per common share or unaudited condensed consolidated statement of cash flows.

The effects of this restatement are summarized in the table below (in thousands):

	Three Months Ended September 30, 2011							Six Months Ended September 30, 2011
	As reported		Adjustments			As restated		As reported		Adjustments			As restated
Sales of product and services	$	252,688	$	(59,195	)	$	193,493	$	454,654	$	(91,840	)	$	362,814
Total revenues	$	262,850	$	(59,195	)	$	203,655	$	474,394	$	(91,840	)	$	382,554
Cost of sales, product and services	$	217,624	$	(59,195	)	$	158,429	$	390,943	$	(91,840	)	$	299,103
Total costs and expenses	$	251,002	$	(59,195	)	$	191,807	$	456,263	$	(91,840	)	$	364,423
Net earnings	$	7,064	$	-		$	7,064	$	10,767	$	-		$	10,767
Net earnings per common share - basic	$	0.87	$	-		$	0.87	$	1.31	$	-		$	1.31
Net earnings per common share - diluted	$	0.85	$	-		$	0.85	$	1.28	$	-		$	1.28

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RESERVES FOR CREDIT LOSSES (Tables)

6 Months Ended

Sep. 30, 2012

RESERVES FOR CREDIT LOSSES [Abstract]

Activity in reserves for credit losses

Activity in our reserves for credit losses for the six months ended September 30, 2012 and 2011 were as follows (in thousands):

	Accounts Receivable			Notes Receivable		Lease-Related Receivables			Total
Balance April 1, 2012	$	1,307		$	2,963	$	1,336		$	5,606
Provision for bad debts		(206	)		117		19			(70	)
Write-offs and other		(48	)		-		(3	)		(51	)
Balance September 30, 2012	$	1,053		$	3,080	$	1,352		$	5,485

	Accounts Receivable			Notes Receivable		Lease-Related Assets			Total
Balance April 1, 2011	$	944		$	94	$	1,733		$	2,771
Provision for bad debts		129			162		(184	)		107
Write-offs and other		(224	)		-		(2	)		(226	)
Balance September 30, 2011	$	849		$	256	$	1,547		$	2,652

Reserve for credit losses and minimum lease payments associated with notes receivable and investment in direct financing and sales-type lease balances disaggregated on the basis of impairment method

Our reserves for credit losses and minimum payments associated with our notes receivables and lease related receivables disaggregated on the basis of our impairment method were as follows (in thousands):

	September 30, 2012				March 31, 2012
	Notes Receivable		Lease-Related Receivables		Notes Receivable		Lease-Related Receivables
Reserves for credit losses:
Ending balance: collectively evaluated for impairment	$	133	$	1,258	$	298	$	1,314
Ending balance: individually evaluated for impairment		2,947		94		2,665		22
Ending balance	$	3,080	$	1,352	$	2,963	$	1,336
Minimum payments:
Ending balance: collectively evaluated for impairment	$	17,728	$	93,335	$	22,944	$	99,545
Ending balance: individually evaluated for impairment		3,500		311		4,356		202
Ending balance	$	21,228	$	93,646	$	27,300	$	99,747

Balance disaggregated based on internally assigned CQR

As of September 30, 2012, the age of the recorded minimum lease payments and net credit exposure associated with our investment in direct financing and sales-type leases that are past due, disaggregated based on our internally assigned credit quality ratings ("CQR"), were as follows (in thousands):

	31-60 Days Past Due		61-90 Days Past Due		Greater than 90 Days Past Due		Total Past Due		Current		Unbilled Minimum Lease Payments		Total Minimum Lease Payments		Unearned Income			Non- Recourse Notes Payable			Net Credit Exposure
September 30, 2012
High CQR	$	35	$	15	$	255	$	305	$	534	$	51,490	$	52,329	$	(3,889	)	$	(4,003	)	$	44,437
Average CQR		27		-		25		52		76		40,848		40,976		(3,913	)		(15,413	)		21,650
Low CQR		6		12		29		47		-		294		341		(30	)		-			311
Total		68		27		309		404		610		92,632		93,646		(7,832	)		(19,416	)		66,398
March 31, 2012
High CQR	$	1,767	$	5	$	72	$	1,844	$	977	$	58,214	$	61,035	$	(4,541	)	$	(3,480	)	$	53,014
Average CQR		85		7		12		104		53		38,337		38,494		(4,445	)		(15,109	)		18,940
Low CQR		-		-		-		-		-		218		218		(16	)		-			202
Total	$	1,852	$	12	$	84	$	1,948	$	1,030	$	96,769	$	99,747	$	(9,002	)	$	(18,589	)	$	72,156

Age of the recorded notes receivable balance disaggregated based on our internally assigned CQR

As of September 30, 2012, the age of the recorded notes receivable balance disaggregated based on our internally assigned CQR were as follows (in thousands):

	31-60Days Past Due		61-90 Days Past Due		Greater than 90 Days Past Due		Total Past Due		Current		Unbilled Notes Receivable		Total
September 30, 2012
High CQR	$	500	$	578	$	-	$	1,078	$	211	$	12,796	$	14,085
Average CQR		-		-		-		-		15		3,628		3,643
Low CQR		51		-		678		729		-		2,771		3,500
Total	$	551	$	578	$	678	$	1,807	$	226	$	19,195	$	21,228
March 31, 2012
High CQR	$	-	$	-	$	-	$	-	$	2,661	$	18,140	$	20,801
Average CQR		-		-		-		-		29		2,113		2,142
Low CQR		-		-		86		86		387		3,884		4,357
Total	$	-	$	-	$	86	$	86	$	3,077	$	24,137	$	27,300

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RESERVES FOR CREDIT LOSSES (Details) (USD $)	6 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Mar. 31, 2012
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Beginning balance	$ 5,606,000	$ 2,771,000
Provision for bad debts	(70,000)	107,000
Write-offs and other	(51,000)	(226,000)
Ending balance	5,485,000	2,652,000
Reserve for credit losses: [Abstract]
Ending balance			1,336,000
Minimum payments [Abstract]
Reserve for credit losses	5,485,000	2,652,000
Total receivable	194,344,000		174,599,000
Estimated loss on receivable	2,900,000
Accounts Receivable [Member]
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Beginning balance	1,307,000	944,000
Provision for bad debts	(206,000)	129,000
Write-offs and other	(48,000)	(224,000)
Ending balance	1,053,000	849,000
Minimum payments [Abstract]
Reserve for credit losses	1,053,000	849,000
Notes Receivable [Member]
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Beginning balance	2,963,000	94,000
Provision for bad debts	117,000	162,000
Write-offs and other	0	0
Ending balance	3,080,000	256,000
Reserve for credit losses: [Abstract]
Ending balance: collectively evaluated for impairment	133,000		298,000
Ending balance: individually evaluated for impairment	2,947,000		2,665,000
Ending balance	3,080,000		2,963,000
Minimum payments [Abstract]
Ending balance: collectively evaluated for impairment	17,728,000		22,944,000
Ending balance: individually evaluated for impairment	3,500,000		4,356,000
Ending balance	21,228,000		27,300,000
Reserve for credit losses	3,080,000	256,000
Lease-Related Receivables [Member]
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Beginning balance	1,336,000	1,733,000
Provision for bad debts	19,000	(184,000)
Write-offs and other	(3,000)	(2,000)
Ending balance	1,352,000	1,547,000
Reserve for credit losses: [Abstract]
Ending balance: collectively evaluated for impairment	1,258,000		1,314,000
Ending balance: individually evaluated for impairment	94,000		22,000
Ending balance	1,352,000
Minimum payments [Abstract]
Ending balance: collectively evaluated for impairment	93,335,000		99,545,000
Ending balance: individually evaluated for impairment	311,000		202,000
Ending balance	93,646,000		99,747,000
Reserve for credit losses	1,352,000	1,547,000
Large law firm [Member]
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Beginning balance			2,600,000
Ending balance	2,900,000		2,600,000
Minimum payments [Abstract]
Notes Receivable	3,600,000		4,200,000
Reserve for credit losses	2,900,000		2,600,000
Customer [Member]
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Beginning balance			300,000
Ending balance			300,000
Minimum payments [Abstract]
Notes Receivable			900,000
Reserve for credit losses			300,000
Total receivable			$ 5,100,000

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INCOME TAXES

6 Months Ended

Sep. 30, 2012

INCOME TAXES [Abstract]

INCOME TAXES

12. INCOME TAXES

We recognize interest and penalties for uncertain tax positions. As of September 30, 2012, our gross liability related to uncertain tax positions was $316 thousand. At September 30, 2012 if the unrecognized tax benefits of $316 thousand were to be recognized, including the effect of interest, penalties and federal tax benefit, the impact would be $429 thousand. We also recognize accrued interest and penalties related to unrecognized tax benefits as a component of tax expense. We recorded interest expense of $4 and $9 thousand for the three and six months ended September 30, 2012, and $11 thousand and $22 thousand for the same periods last year. We did not recognize any additional penalties. We had $189 thousand and $167 thousand accrued for the payment of interest at September 30, 2012 and 2011, respectively.