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, 2014

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 Rule 12b-2 of the Exchange Act).

Yes o  No x

The number of shares of common stock outstanding as of October 31, 2014 was 7,398,062.

TABLE OF CONTENTS

ePlus inc. AND SUBSIDIARIES

Part I. Financial Information:
Item 1.	Financial Statements
	Unaudited Condensed Consolidated Balance Sheets as of September 30, 2014 and March 31, 2014	5
	Unaudited Condensed Consolidated Statements of Operations for the Three and Six Months Ended September 30, 2014 and 2013	6
	Unaudited Condensed Consolidated Statements of Comprehensive Income for the Three and Six Months Ended September 30, 2014 and 2013	7
	Unaudited Condensed Consolidated Statements of Cash Flows for the Six Months Ended September 30, 2014 and 2013	8
	Unaudited Condensed Consolidated Statements of Stockholders’ Equity for the Six Months Ended September 30, 2014	10
	Notes to Unaudited Condensed Consolidated Financial Statements	11
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	24
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	37
Item 4.	Controls and Procedures	37
Part II. Other Information:
Item 1.	Legal Proceedings	38
Item 1A.	Risk Factors	38
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	39
Item 3.	Defaults Upon Senior Securities	39
Item 4.	Mine Safety Disclosures	39
Item 5.	Other Information	39
Item 6.	Exhibits	40
Signatures & Certifications		41

2

CAUTIONARY STATEMENT CONCERNING 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, or “Exchange Act,” 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,” “would,” “intend,” “estimate,” “will,” “potential,” “possible,” “could,” “believe,” “expect,” “intend,” “plan,” “anticipate,” “hope,” “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— integrating information technology (IT) product sales, third-party software assurance and maintenance, advanced professional and managed services, proprietary software, and financing, 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 with a small number of key vendors;

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

o adapting to meet changes in markets and competitive developments;

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

o increasing the total number of customers who utilize our managed services and professional services and continuing to enhance our managed services offerings to remain competitive in the marketplace;

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

o reliance on third parties to perform some of our service obligations;

· our dependence on key personnel, and our ability to hire and retain sufficient qualified personnel;

· our ability to implement comprehensive plans for the integration of sales forces, cost containment, asset rationalization, systems integration and other key strategies;

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

· our ability to protect our intellectual property rights and successfully defend any challenges to the validity of our patents, and, when appropriate, license required technology;

· our professional and liability insurance policies coverage may be insufficient to cover a claim;

· 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 and/or rapid changes in product offerings, including the proliferation of the cloud, infrastructure as a service and software as a service;

· our ability to secure our and our customers’ electronic and other confidential information;

· our ability to raise capital, maintain or increase as needed our lines of credit with vendors or floor planning facility, or obtain debt for our financing transactions or the effect of those changes on our common stock or its holders;

· future growth rates in our core businesses;

· our ability to realize our investment in leased equipment;

· significant adverse changes in, reductions in, or losses of relationships with several of our larger customers or vendors;

3

· our ability to successfully integrate acquired businesses;

· reduction of vendor incentives provided to us;

· exposure to changes in, interpretations of, or enforcement trends related to tax rules and other regulations;

· changes to or loss of members of our senior management team and/or failure to successfully implement succession plans; and

· significant changes in accounting standards including changes to the financial reporting of leases which could impact the demand for our leasing services, or misclassification of products and services we sell resulting in the misapplication of revenue recognition policies.

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 7, “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”).

4

Item 1.  Financial Statements

ePlus inc. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

	As of September 30, 2014			As of March 31, 2014
ASSETS	(amounts in thousands)
Current assets:
Cash and cash equivalents	$	62,941		$	80,179
Accounts receivable—trade, net		205,852			211,314
Accounts receivable—other, net		33,083			31,902
Inventories—net		30,834			22,629
Financing receivables—net, current		64,649			57,749
Deferred costs		9,894			10,819
Deferred tax assets		3,130			3,742
Other current assets		10,007			6,925
Total current assets		420,390			425,259
Financing receivables and operating leases—net		94,783			85,990
Property, equipment and other assets		7,145			8,013
Goodwill and other intangible assets		42,128			34,583
TOTAL ASSETS	$	564,446		$	553,845
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Current liabilities:
Accounts payable—equipment	$	21,788		$	6,772
Accounts payable—trade		33,164			61,940
Accounts payable—floor plan		120,631			93,416
Salaries and commissions payable		12,993			12,401
Deferred revenue		22,766			21,840
Recourse notes payable - current		280			1,460
Non-recourse notes payable - current		35,262			30,907
Other current liabilities		21,667			15,382
Total current liabilities		268,551			244,118
Recourse notes payable - long term		2,576			2,100
Non-recourse notes payable - long term		30,018			34,421
Deferred tax liability - long term		4,444			5,001
Other liabilities		2,799			1,822
TOTAL LIABILITIES		308,388			287,462
COMMITMENTS AND CONTINGENCIES  (Note 7)
STOCKHOLDERS' EQUITY
Preferred stock, $.01 per share par value; 2,000 shares authorized one issued or outstanding		-			-
Common stock, $.01 per share par value; 25,000 shares authorized; 13,113 issued and 7,437 outstanding at September 30, 2014 and 13,026 issued and 8,036 outstanding at March 31, 2014		131			130
Additional paid-in capital		108,995			105,924
Treasury stock, at cost, 5,676 and 4,990 shares, respectively		(115,276	)		(80,494	)
Retained earnings		262,066			240,637
Accumulated other comprehensive income—foreign currency translation adjustment		142			186
Total Stockholders' Equity		256,058			266,383
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	564,446		$	553,845

See Notes to Unaudited Condensed Consolidated Financial Statements.

5

ePlus inc. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

	Three Months Ended September 30,				Six Months Ended September 30,
	2014		2013		2014		2013
	(amounts in thousands, except per share data)
Sales of product and services	$	286,584	$	261,283	$	547,940	$	508,320
Financing revenue		9,059		8,001		17,933		18,761
Fee and other income		1,829		1,845		3,903		3,365
TOTAL REVENUES		297,472		271,129		569,776		530,446
Cost of sales, product and services		230,742		214,854		443,650		418,184
Direct lease costs		2,806		3,495		5,763		6,748
Cost of revenues		233,548		218,349		449,413		424,932
Professional and other fees		1,577		1,908		3,410		5,146
Salaries and benefits		34,252		29,685		67,199		60,367
General and administrative expenses		7,158		6,059		13,431		11,060
Interest and financing costs		611		433		1,255		893
Operating expenses		43,598		38,085		85,295		77,466
OPERATING INCOME		20,326		14,695		35,068		28,048
Other income		-		-		1,434		-
EARNINGS BEFORE PROVISION FOR INCOME TAXES		20,326		14,695		36,502		28,048
PROVISION FOR INCOME TAXES		8,374		6,104		15,073		11,607
NET EARNINGS	$	11,952	$	8,591	$	21,429	$	16,441
NET EARNINGS PER COMMON SHARE—BASIC	$	1.63	$	1.07	$	2.88	$	2.05
NET EARNINGS PER COMMON SHARE—DILUTED	$	1.63	$	1.06	$	2.86	$	2.03
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING—BASIC		7,320		7,976		7,412		7,945
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING—DILUTED		7,345		8,020		7,461		8,007

See Notes to Unaudited Condensed Consolidated Financial Statements.

6

ePlus inc. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

	Three Months Ended September 30,					Six Months Ended September 30,
	2014			2013		2014			2013
	(amounts in thousands)
NET EARNINGS	$	11,952		$	8,591	$	21,429		$	16,441
OTHER COMPREHENSIVE INCOME, NET OF TAX:
Foreign currency translation adjustments		(160	)		57		(44	)		(37	)
Other comprehensive income (loss)		(160	)		57		(44	)		(37	)
TOTAL COMPREHENSIVE INCOME	$	11,792		$	8,648	$	21,385		$	16,404

See Notes to Unaudited Condensed Consolidated Financial Statements.

7

ePlus inc. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

	Six Months Ended September 30,
	2014			2013
	(in thousands)
Cash Flows From Operating Activities:
Net earnings	$	21,429		$	16,441
Adjustments to reconcile net earnings to net cash (used in) provided by operating activities:
Depreciation and amortization		7,631			7,359
Provision for credit losses, inventory obsolescence and sales returns		245			211
Share-based compensation expense		2,247			1,954
Excess tax benefit from share-based compensation		(824	)		(1,536	)
Payments from lessees directly to lenders—operating leases		(4,445	)		(4,062	)
Gain on disposal of property, equipment and operating lease equipment		(2,120	)		(1,001	)
Gain on sale of financing receivables		(3,179	)		(4,025	)
Gain on settlement		(1,434	)		-
Other		50			42
Changes in:
Accounts receivable—trade		13,236			12,897
Accounts receivable—other		(854	)		(4,087	)
Inventories		(7,006	)		(5,043	)
Financing receivables		(14,187	)		(8,193	)
Deferred costs, other intangible assets and other assets		1,333			1,513
Accounts payable—equipment		(162	)		1,700
Accounts payable—trade		(29,315	)		(222	)
Salaries and commissions payable, deferred revenue and other liabilities		6,360			(8,387	)
Net cash (used in) provided by operating activities	$	(10,995	)	$	5,561
Cash Flows From Investing Activities:
Maturities of short-term investments	$	-		$	982
Maturities of supplemental benefit plan investments		2,544			-
Proceeds from sale of property, equipment and operating lease equipment		5,751			1,929
Purchases of property, equipment and operating lease equipment		(1,919	)		(6,759	)
Purchases of assets to be leased or financed		(10,000	)		(7,032	)
Issuance of financing receivables		(51,163	)		(45,847	)
Repayments of financing receivables		28,082			16,031
Proceeds from sale of financing receivables		12,341			15,456
Premiums paid on life insurance		-			(93	)
Cash used in acquisitions, net of cash acquired		(7,818	)		-
Net cash used in investing activities	$	(22,182	)	$	(25,333	)

8

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - continued

	Six Months Ended September 30,
	2014			2013
	(in thousands)
Cash Flows From Financing Activities:
Borrowings of non-recourse and recourse notes payable	$	30,104		$	12,779
Repayments of non-recourse and recourse notes payable		(802	)		(1,135	)
Repurchase of common stock		(34,782	)		(5,901	)
Dividends paid		(90	)		(105	)
Proceeds from issuance of capital stock through option exercise		-			559
Payments of contingent consideration		-			(1,027	)
Excess tax benefit from share-based compensation		824			1,536
Net borrowings (repayments) on floor plan facility		20,694			14,042
Net cash provided by financing activities		15,948			20,748
Effect of exchange rate changes on cash		(9	)		-
Net Increase in Cash and Cash Equivalents		(17,238	)		976
Cash and Cash Equivalents, Beginning of Period		80,179			52,720
Cash and Cash Equivalents, End of Period	$	62,941		$	53,696
Supplemental Disclosures of Cash Flow Information:
Cash paid for interest	$	128		$	15
Cash paid for income taxes	$	12,770		$	10,334
Schedule of Non-Cash Investing and Financing Activities:
Purchase of property and equipment included in accounts payable	$	232		$	71
Purchase of operating lease equipment included in accounts payable	$	103		$	241
Purchase of assets to be leased or financed included in accounts payable	$	18,578		$	10,664
Proceeds from sales of operating lease equipment included in accounts receivable	$	910		$	12
Repayments of non-recourse and recourse notes payable	$	19,171		$	9,715
Vesting of share-based compensation	$	6,407		$	7,769
Origination and concurrent sale of financing receivables	$	47,213		$	80,769
Contingent consideration	$	1,960		$	-

See Notes to Unaudited Condensed Consolidated Financial Statements.

9

ePlus inc. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(amounts in thousands)

	Common Stock					Additional Paid-In		Treasury			Retained		Accumulated Other Comprehensive
	Shares			Par Value		Capital		Stock			Earnings		Income			Total
Balance, April 1, 2014		8,036		$	130	$	105,924	$	(80,494	)	$	240,637	$	186		$	266,383
Excess tax benefit of share-based compensation		-			-		824		-			-		-			824
Issuance of restricted stock awards		87			1		-		-			-		-			1
Share-based compensation							2,247		-			-		-			2,247
Repurchase of common stock		(686	)		-		-		(34,782	)		-		-			(34,782	)
Net earnings		-			-		-		-			21,429		-			21,429
Foreign currency translation adjustment		-			-		-		-			-		(44	)		(44	)
Balance, September 30, 2014		7,437		$	131	$	108,995	$	(115,276	)	$	262,066	$	142		$	256,058

See Notes to Unaudited Condensed Consolidated Financial Statements.

10

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, 2014 and 2013 are unaudited, but include all normal and recurring adjustments that, in the opinion of management, are necessary for a fair presentation of our financial position, results of operations, changes in comprehensive income and cash flows for such periods. Operating results for the three and six months ended September 30, 2014 and 2013 are not necessarily indicative of results that may be expected for any other interim period or for the full fiscal year ending March 31, 2015 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, 2014 (“2014 Annual Report”), 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. Estimates are used when accounting for items and matters including, but not limited to, revenue recognition, residual values, vendor consideration, lease classification, goodwill and intangibles, reserves for credit losses, inventory obsolescence, and the recognition and measurement of income tax assets and other provisions and contingencies. 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.

The notes to the consolidated financial statements contained in the 2014 Annual Report include additional discussion of the significant accounting policies and estimates used in the preparation of our consolidated financial statements. There have been no material changes to our significant accounting policies and estimates during the six months ended September 30, 2014.

CONCENTRATIONS OF RISK —A substantial portion of our sales of product and services are from sales of Cisco Systems, Hewlett-Packard, and NetApp products, which represented approximately 56%, 8% and 6%, and 52%, 8% and 6%, respectively, of our technology segment sales of product and services for the three and six months ended September 30, 2014, as compared to 47%, 11%, and 6%, and 51%, 10%, and 7% respectively, of our technology segment sales of product and services for the three and six months ended September 30, 2013. Any changes in our vendors’ ability to provide products could have a material adverse effect on our business, results of operations and financial condition.

11

RECENTLY ACCOUNTING PRONOUNCEMENTS NOT YET ADOPTED — In May 2014, FASB issued ASU 2014-09, which will update ASC topic Revenue from Contracts with Customers, which will replace all current US GAAP on this topic. The principle of ASU 2014-09 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which entity expects to be entitled in exchange for those goods or services. The effective date for ASU 2014-09 for us is for fiscal year beginning April 1, 2017. The standard can be applied either retrospectively to each period presented or as a cumulative-effect adjustment as of the date of adoption. We are currently evaluating the impact it will have on our financial statements and disclosures and have not yet selected our planned transition approach.

2. FINANCING RECEIVABLES AND OPERATING LEASES

Our notes receivable, investments in leases, and leased equipment consist of assets that we financed for our customers, which we manage as a portfolio of investments. Our leases to our customers are accounted for as investments in direct financing, sales-type or operating leases in accordance with Codification Topic, Leases. We also finance third-party software, maintenance, and services for our customers, which are classified as notes receivables. Our notes receivables are interest bearing and are often due over a period of time that corresponds with the terms of the leased products.

FINANCING RECEIVABLES—NET

Our financing receivables, net consist of the following (in thousands):

September 30, 2014	Notes Receivables			Lease-Related Receivables			Total Financing Receivables
Minimum payments	$	59,745		$	86,289		$	146,034
Estimated unguaranteed residual value (1)		-			8,184			8,184
Initial direct costs, net of amortization (2)		409			528			937
Unearned income		-			(6,444	)		(6,444	)
Reserve for credit losses (3)		(3,673	)		(1,004	)		(4,677	)
Total, net	$	56,481		$	87,553		$	144,034
Reported as:
Current	$	27,043		$	37,606		$	64,649
Long-term		29,438			49,947			79,385
Total, net	$	56,481		$	87,553		$	144,034

(1) Includes estimated unguaranteed residual values of $3,287 thousand 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 $548 thousand.

(3) For details on reserve for credit losses, refer to Note 4, “Reserves for Credit Losses.”

March 31, 2014	Notes Receivables			Lease-Related Receivables			Total Financing Receivables
Minimum payments	$	43,707		$	81,551		$	125,258
Estimated unguaranteed residual value (1)		-			8,275			8,275
Initial direct costs, net of amortization (2)		354			537			891
Unearned income		-			(6,285	)		(6,285	)
Reserve for credit losses (3)		(3,364	)		(1,024	)		(4,388	)
Total, net	$	40,697		$	83,054		$	123,751
Reported as:
Current	$	22,109		$	35,640		$	57,749
Long-term		18,588			47,414			66,002
Total, net	$	40,697		$	83,054		$	123,751

(1) Includes estimated unguaranteed residual values of $3,034 thousand 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 $525 thousand.

(3) For details on reserve for credit losses, refer to Note 4, “Reserves for Credit Losses.”

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OPERATING LEASES—NET

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

	September 30, 2014			March 31, 2014
Cost of equipment under operating leases	$	31,072		$	40,513
Accumulated depreciation		(15,674	)		(20,525	)
Investment in operating lease equipment—net (1)	$	15,398		$	19,988

(1) These totals include estimated unguaranteed residual values of $3,842 thousand and $5,610 thousand as of September 30, 2014 and March 31, 2014, respectively.

TRANSFERS OF FINANCIAL ASSETS

We enter into arrangements to transfer the contractual payments due under financing receivables and operating leases, which are accounted for as sales or secured borrowings in accordance with Codification Topic, Transfers and Servicing. For transfers accounted for as a secured borrowing, the corresponding investments serve as collateral for non-recourse notes payable. As of September 30, 2014 and March 31, 2014, we had financing receivables and operating leases of $72.8 million and $72.3 million, respectively, that were collateral for non-recourse notes payable. See Note 6, “Notes Payable and Credit Facility.”

For transfers accounted for as sales, we derecognize the carrying value of the asset transferred and recognize a net gain or loss on the sale, which is presented within financing revenues in the unaudited condensed consolidated statement of operations. During the three months ended September 30, 2014 and 2013, we recognized net gains of $0.9 million and $1.2 million, respectively. The fair value of assets received from these sales was $37.6 million and $34.9 million for the three months ended September 30, 2014 and 2013, respectively. During the six months ended September 30, 2014 and 2013, we recognized net gains of $3.2 million and $5.6 million, respectively. The fair value of assets received from these sales was $93.8 million and $122.4 million for the six months ended September 30, 2014 and 2013, respectively.

3. GOODWILL AND OTHER INTANGIBLE ASSETS

Our goodwill and other intangible assets consist of the following (in thousands):

	September 30, 2014							March 31, 2014
	Gross Carrying Amount		Accumulated Amortization / Impairment Loss			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization / Impairment Loss			Net Carrying Amount
Goodwill	$	42,834	$	(8,673	)	$	34,161	$	38,243	$	(8,673	)	$	29,570
Customer relationships & other intangibles		11,923		(5,416	)		6,507		8,013		(4,671	)		3,342
Capitalized software development		2,668		(1,208	)		1,460		2,616		(945	)		1,671
Total	$	57,425	$	(15,297	)	$	42,128	$	48,872	$	(14,289	)	$	34,583

Goodwill represents the premium paid over the fair value of the net tangible and intangible assets we have acquired in business combinations. Customer relationships and capitalized software development costs are amortized over an estimated useful life, which is generally between 3 to 6 years.

All of our goodwill as of September 30, 2014 and March 31, 2014 related to our technology segment. We perform our goodwill impairment test annually during our third quarter of each year. For the year ended March 31, 2014, we performed a qualitative assessment and concluded that the fair value of our reporting units were, more likely than not, greater than their respective carrying amounts.

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The following table summarizes the amount of goodwill allocated to our reporting units (in thousands):

Reporting Unit	September 30, 2014		March 31, 2014
Technology	$	33,072	$	28,481
Software Document Management		1,089		1,089

OTHER INTANGIBLE ASSETS

Total amortization expense for other intangible assets was $0.6 million and $0.3 million for the three months and $1.0 million and $0.6 million for the six months ended September 30, 2014 and 2013, respectively.

4. RESERVES FOR CREDIT LOSSES

Activity in our reserves for credit losses for the six months ended September 30, 2014 and 2013 were as follows (in thousands):

	Accounts Receivable			Notes Receivable			Lease-Related Receivables			Total
Balance April 1, 2014	$	1,364		$	3,364		$	1,024		$	5,752
Provision for credit losses		(99	)		309			11			221
Write-offs and other		(122	)		-			(31	)		(153	)
Balance September 30, 2014	$	1,143		$	3,673		$	1,004		$	5,820
	Accounts Receivable			Notes Receivable			Lease-Related Receivables			Total
Balance April 1, 2013	$	1,147		$	3,137		$	845		$	5,129
Provision for credit losses		152			(14	)		53			191
Write-offs and other		(121	)		-			-			(121	)
Balance September 30, 2013	$	1,178		$	3,123		$	898		$	5,199

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, 2014				March 31, 2014
	Notes Receivable		Lease-Related Receivables		Notes Receivable		Lease-Related Receivables
Reserves for credit losses:
Ending balance: collectively evaluated for impairment	$	552	$	788	$	265	$	852
Ending balance: individually evaluated for impairment		3,121		216		3,099		172
Ending balance	$	3,673	$	1,004	$	3,364	$	1,024
Minimum payments:
Ending balance: collectively evaluated for impairment	$	56,292	$	86,086	$	39,869	$	81,114
Ending balance: individually evaluated for impairment		3,453		203		3,838		437
Ending balance	$	59,745	$	86,289	$	43,707	$	81,551

The net credit exposure for the notes receivable and lease related receivables evaluated individually for impairment as of September 30, 2014 was $3.6 million. As of September 30, 2014, we had $3.2 million of notes and lease-related receivables from one customer that filed for bankruptcy in May, 2012 and total reserves for credit losses of $3.2 million, which represents our estimated probable loss. As of March 31, 2014, we had $3.4 million of notes receivables from this customer and total reserves for credit losses of $3.1 million. 

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As of September 30, 2014, 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, 2014
High CQR	$	42	$	5	$	130	$	177	$	232	$	51,342	$	51,751	$	(2,828	)	$	(18,031	)	$	30,892
Average CQR		52		48		14		114		566		33,654		34,335		(2,704	)		(17,742	)		13,888
Low CQR		-		-		-		-		-		203		203		(19	)		-			184
Total		94		53		144		291		798		85,199		86,289		(5,551	)		(35,773	)		44,964
March 31, 2014
High CQR	$	194	$	35	$	106	$	335	$	502	$	42,159	$	42,996	$	(1,890	)	$	(17,406	)	$	23,700
Average CQR		33		57		18		108		86		37,924		38,118		(3,401	)		(20,709	)		14,008
Low CQR		-		-		61		61		-		376		437		(55	)		-			382
Total		227		92		185		504		588		80,459		81,551		(5,346	)		(38,115	)		38,090

As of September 30, 2014, the age of the recorded notes receivable balance disaggregated based on our internally assigned 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 Notes Receivable		Total Notes Receivable		Non-Recourse Notes Payable			Net Credit Exposure
September 30, 2014
High CQR	$	829	$	5	$	1,802	$	2,636	$	521	$	38,137	$	41,294	$	(23,463	)	$	17,831
Average CQR		171		-		-		171		281		14,546		14,998		(4,580	)		10,418
Low CQR		-		-		707		707		-		2,746		3,453		-			3,453
Total		1,000		5		2,509		3,514		802		55,429		59,745		(28,043	)		31,702
March 31, 2014
High CQR	$	-	$	205	$	148	$	353	$	2,317	$	30,249	$	32,919	$	(19,641	)	$	13,278
Average CQR		-		-		-		-		-		6,950		6,950		(3,491	)		3,459
Low CQR		-		-		791		791		-		3,047		3,838		-			3,838
Total		-		205		939		1,144		2,317		40,246		43,707		(23,132	)		20,575

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 25% - 100% for customers with low CQR, which includes customers in bankruptcy.

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5. PROPERTY, EQUIPMENT OTHER ASSETS AND LIABILITIES

Our property, equipment, other assets and liabilities consist of the following (in thousands):

	September 30, 2014		March 31, 2014
Other current assets:
Deposits & funds held in escrow	$	6,610	$	995
Prepaid assets		3,079		2,865
Supplemental benefit plan investments		-		2,544
Other		318		521
Total other current assets	$	10,007	$	6,925
Other assets:
Deferred costs	$	1,238	$	1,591
Property and equipment, net		4,636		4,293
Other		1,271		2,129
Other assets - long term	$	7,145	$	8,013

	September 30, 2014		March 31, 2014
Other current liabilities
Accrued expenses	$	10,192	$	5,322
Deferred compensation		222		2,544
Other		11,253		7,516
Total other current liabilities	$	21,667	$	15,382
Other liabilities
Deferred revenue	$	1,786	$	1,822
Other		1,013		-
Total other liabilities - long term	$	2,799	$	1,822

6. NOTES PAYABLE AND CREDIT FACILITY

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

	September 30, 2014		March 31, 2014
Recourse notes payable with interest rates ranging from 2.24% and 4.22% at September 30, 2014 and 2.24% and 4.84% at March 31, 2014.
Current	$	280	$	1,460
Long-term		2,576		2,100
Total recourse notes payable	$	2,856	$	3,560
Non-recourse notes payable secured by financing receivables and investments in operating leases with interest rates ranging from 2.00% to 10.00% at September 30, 2014 and ranging from 2.00% to 11.24% as of March 31, 2014.
Current	$	35,262	$	30,907
Long-term		30,018		34,421
Total non-recourse notes payable	$	65,280	$	65,328

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 customer under the leases or notes receivable that collateralize the notes payable.  The weighted average interest rate for our non-recourse notes payable was 3.31% and 3.46%, as of September 30, 2014 and March 31, 2014, respectively. The weighted average interest rate for our recourse notes payable was 2.93% and 3.85%, as of September 30, 2014 and March 31, 2014, respectively. Under recourse financing, in the event of a default by a customer, the lender has recourse to the customer, the assets serving as collateral, and us. Under non-recourse financing, in the event of a default by a customer, the lender generally only has recourse against the customer, and the assets serving as collateral, but not against us.

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In May 2014, we entered into an agreement to repurchase the rights, title, and interest to payments due under a financing agreement. This financing agreement was previously assigned to a third party financial institution and accounted for as a secured borrowing. In conjunction with the repurchase agreement, we recognized a gain of $1.4 million, which is presented within other income in our unaudited condensed consolidated statement of operations.

Our technology 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 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 $120.6 million and $93.4 million as of September 30, 2014 and March 31, 2014, respectively. Under the accounts receivable component, we had no outstanding balances as of September 30, 2014 and March 31, 2014.

As of March 31, 2014, the facility agreement had an aggregate limit of the two components of $175.0 million, and the accounts receivable component had a sub-limit of $30.0 million, which bears interest assessed at a rate of the One Month LIBOR plus two and one half percent. On July 31, 2014, ePlus Technology, inc. amended its credit facility with GECDF, which included an increase to the aggregate credit limit. As of September 30, 2014, the facility agreement had an aggregate limit of the two components of $225.0 million, and the accounts receivable component had a sub-limit of $30.0 million, which bears interest assessed at a rate of the One Month LIBOR plus two and one half percent.

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. We were in compliance with these covenants as of September 30, 2014. In addition, the facility limits the ability of ePlus Technology, inc. to transfer funds to its affiliates in the form of dividends, loans or advances. The facility also requires that financial statements of ePlus Technology, inc. 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, 2014 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 segment and as an operational function of our accounts payable process.

We have an agreement with First Virginia Community Bank to provide us with a $0.5 million credit facility, which matures on October 26, 2015. 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, 2014 and March 31, 2014, we had no outstanding balance on this credit facility.

Fair Value

As of September 30, 2014, the fair value of our long-term recourse and non-recourse notes payable approximated their carrying value.

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7. COMMITMENTS AND CONTINGENCIES

Legal Proceedings

On May 19, 2009, we filed a complaint (the “Lawson litigation”) 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. Lawson filed an appeal. On November 21, 2012, the United States Court of Appeals for the Federal Circuit (the “Appeals Court”) reversed in part, vacated in part, affirmed in part, and remanded. The Appeals Court upheld the finding that the patent claims were not invalid and upheld, in part, the finding of infringement. On June 11, 2013, consistent with the Appeals Court’s decision, the trial court issued an Order modifying the injunction so that it would continue in full effect with respect to those configurations of Lawson’s electronic procurement systems that the Appeals Court affirmed were infringing.

On August 16, 2013, the trial court issued an order finding, by clear and convincing evidence, that Lawson was in contempt of the trial court’s May 23, 2011, injunction, entering judgment in our favor in the amount of $18.2 million, and ordering that Lawson pay to the court a daily coercive fine. Lawson filed an appeal and posted a bond, and collection of the judgment and imposition of the coercive fine were stayed pending the appeal.

Patent litigation is extremely complex and issues regarding a patent’s validity can arise even subsequent to a patent’s issuance and a court’s enforcement thereof. On April 3, 2014, the United States Patent and Trademark Office issued a notice canceling the patent at issue in the Lawson litigation. On July 25, 2014, the Appeals Court issued an Opinion vacating the injunction and contempt order. We have filed a Petition for Rehearing, and are awaiting the court’s response.

These types of cases are complex in nature, are likely to have significant expenses associated with them, and we cannot predict when any litigation will be resolved, 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.

We filed a claim in a class action suit in the United States District Court for the Northern District of California which alleged that ten groups of companies conspired to fix, raise, maintain or stabilize prices of certain flat panels used in many flat screen televisions, monitors and notebook computers. The Claims Administrator found that we had a valid claim, and on August 6, 2014, issued to us a Notice of Claim Final Determination. On October 20, 2014, the court issued an order directing that approved claims be paid. On October 31, 2014, we received payment in the amount of $6.2 million, which will be recognized in our statement of operations as other income in our third quarter of fiscal 2015.

Other Matters

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, claims related to alleged violations of laws and regulations, and claims relating to alleged security or privacy breaches. 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.

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8. EARNINGS PER SHARE

Basic earnings per share is computed by dividing net earnings attributable to common shares by the weighted average number of common shares outstanding for the period. Diluted net earnings per share include the potential dilution of securities that could participate in our earnings, but not securities that are anti-dilutive. Unvested shares of restricted stock awards (“RSAs”), which contain non-forfeitable rights to dividends, whether paid or unpaid are considered participating securities because their holders have the right to participate in earnings with common stockholders. We use the two-class method to allocate net income between common shares and other participating securities. As of September 30, 2014, we no longer have any unvested shares of RSAs that contained non-forfeitable rights to dividends. In addition, we no longer grant RSAs that contain non-forfeitable rights to dividends.

The following table provides a reconciliation of the numerators and denominators used to calculate basic and diluted net earnings per common share as disclosed in our unaudited condensed consolidated statements of operations for the three and six months ended September 30, 2014 and September 30, 2013 (in thousands, except per share data).

	Three months ended September 30,				Six months ended September 30,
	2014		2013		2014		2013
Basic and diluted shares outstanding
Weighted average common shares outstanding — basic		7,320		7,976		7,412		7,945
Effect of dilutive shares		25		44		49		62
Weighted average common shares outstanding — diluted		7,345		8,020		7,461		8,007
Calculation of earnings per share - basic
Net earnings	$	11,952	$	8,591	$	21,429	$	16,441
Net earnings attributable to participating securities		-		66		55		192
Net earnings attributable to common shareholders	$	11,952	$	8,525	$	21,374	$	16,249
Earnings per share - basic	$	1.63	$	1.07	$	2.88	$	2.05
Calculation of earnings per share - diluted
Net earnings attributable to common shareholders— basic	$	11,952	$	8,525	$	21,374	$	16,249
Add: undistributed earnings attributable to participating securities		-		-		1		1
Net earnings attributable to common shareholders— diluted	$	11,952	$	8,525	$	21,375	$	16,250
Earnings per share - diluted	$	1.63	$	1.06	$	2.86	$	2.03

As of both September 30, 2013 and 2014, we had no unexercised stock options.

9. STOCKHOLDERS’ EQUITY

On June 12, 2014, our board of directors authorized the Company to repurchase up to 500,000 shares of its outstanding common stock over a 12-month period commencing June 16, 2014. 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. This new authorization replaces the company´s previous repurchase plan which was to expire on November 13, 2014. The previous plan, which commenced November 14, 2013, authorized the repurchase of up to 750,000 shares of ePlus´ outstanding common stock. Since commencement of the previous plan through its termination on June 12, 2014, we repurchased 687,488 shares.

During the six months ended September 30, 2014, we repurchased 651,019 shares of our outstanding common stock at an average cost of $50.31 per share for a total purchase price of $32.8 million under the share repurchase plans. We also purchased 35,158 shares of common stock at a value of $2.0 million to satisfy tax withholding obligations to the vesting of employees’ restricted stock.

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During the six months ended September 30, 2013, we repurchased 62,986 shares of our outstanding common stock under a share repurchase plan at the average cost of $53.92 per share for a total purchase price of $3.4 million. We purchased 42,073 shares of common stock at a value of $2.5 million to satisfy tax withholding obligations to the vesting of employees’ restricted stock.

Since the inception of our initial repurchase program on September 20, 2001 to September 30, 2014, we have repurchased 5.5 million shares of our outstanding common stock at an average cost of $19.65 per share for a total purchase price of $108.7 million.

10. SHARE-BASED COMPENSATION

Share-Based Plans

As of September 30, 2014 and March 31, 2014, we had share-based awards outstanding under the followingplans: (1) the 2008 Non-Employee Director Long-Term Incentive Plan (“2008 Director LTIP”), (2) the 2008 Employee Long-Term Incentive Plan (“2008 Employee LTIP”) and (3) the 2012 Employee Long-Term Incentive Plan ("2012 Employee LTIP"). All the share-based plans define fair market value as 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 2008 Director LTIP, the 2008 Employee LTIP, and the 2012 Employee LTIP discussed above, refer to our 2014 Annual Report.

Stock Option Activity

As of September 30, 2014 and 2013, we had no outstanding shares of stock options and there were no options granted or exercised during the six months ended September 30, 2014. During the six months ended September 30, 2013 there were no options granted and 40,000 options exercised.

Restricted Stock Activity

For the six months ended September 30, 2014, we granted 9,390 restricted shares under the 2008 Director LTIP, and 78,165 restricted shares under the 2012 Employee LTIP. For the six months ended September 30, 2013, we granted 8,520 restricted shares under the 2008 Director LTIP, and 77,115 restricted shares under the 2012 Employee LTIP. A summary of the restricted shares is as follows:

	Number of Shares			Weighted Average Grant-date Fair Value
Nonvested April 1, 2014		200,120		$	41.11
Granted		87,555		$	57.12
Vested		(111,296	)	$	35.57
Nonvested September 30, 2014		176,379		$	52.67

Upon each vesting period of the restricted stock awards, employees are subject to minimum tax withholding obligations. Under the 2008 Employee LTIP and 2012 Employee LTIP, we may purchase a sufficient number of shares due to the participant to satisfy their minimum tax withholding on employee stock awards.

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, which is based on historical experience. There are no additional conditions for vesting other than service conditions. During the three months ended September 30, 2014 and 2013, we recognized $1.2 million and $1.1 million, respectively, of total share-based compensation expense. During the six months ended September 30, 2014 and 2013, we recognized $2.2 million and $1.9 million, respectively, of total share-based compensation expense. Unrecognized compensation expense related to non-vested restricted stock was $7.9 million, which will be fully recognized over the next thirty-three months.

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We also provide our employees with a contributory 401(k) 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, 2014 and 2013, our estimated contribution expense for the plan was $302 thousand and $147 thousand, respectively.  For the six months ended September 30, 2014 and 2013, our estimated contribution expense was $623 thousand and $524 thousand, respectively.

11. INCOME TAXES

We recognize interest and penalties for uncertain tax positions. As of September 30, 2014, our gross liability related to uncertain tax positions was $149 thousand. At September 30, 2014, if the unrecognized tax benefits of $149 thousand were to be recognized, including the effect of interest, penalties and federal tax benefit, the impact would be $194 thousand. We also recognize accrued interest and penalties related to unrecognized tax benefits as a component of tax expense. We recorded interest expense of $1 thousand and $4 thousand for the three months ended September 30, 2014 and 2013, respectively and $2 thousand and $9 thousand for the six months ended September 30, 2014 and 2013, respectively. We did not recognize any additional penalties. We had $67 thousand and $206 thousand accrued for the payment of interest at September 30, 2014 and 2013, respectively.

12. 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. The following table summarizes the fair value hierarchy of our financial instruments as of September 30, 2014 and March 31, 2014 (in thousands):

			Fair Value Measurement Using
	Recorded Amount		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Gains (Losses)
September 30, 2014:
Assets:
Money market funds	$	43,767	$	43,767	$	-	$	-	$	-
Liabilities:
Contingent consideration	$	1,960	$	-	$	-	$	1,960	$	-
March 31, 2014:
Assets:
Money market funds	$	54,267	$	54,267	$	-	$	-	$	-

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13. SEGMENT REPORTING

Our operations are conducted through two business segments. Our technology segment includes sales of information technology products, third-party software, third-party maintenance, advanced professional and managed services and our proprietary software to commercial, state and local governments, and government contractors. Our financing segment consists of the financing of IT equipment, software and related services to commercial, state and local governments, and government contractors. Our reportable segment information was as follows (in thousands):

	Three Months Ended
	September 30, 2014						September 30, 2013
	Technology		Financing		Total		Technology		Financing		Total
Sales of product and services	$	286,584	$	-	$	286,584	$	261,283	$	-	$	261,283
Financing revenue		-		9,059		9,059		-		8,001		8,001
Fee and other income		1,782		47		1,829		1,829		16		1,845
Total revenues		288,366		9,106		297,472		263,112		8,017		271,129
Cost of sales, product and services		230,742		-		230,742		214,854		-		214,854
Direct lease costs		-		2,806		2,806		-		3,495		3,495
Total cost of revenues		230,742		2,806		233,548		214,854		3,495		218,349
Professional and other fees		1,321		256		1,577		1,580		328		1,908
Salaries and benefits		31,963		2,289		34,252		27,244		2,441		29,685
General and administrative expenses		6,703		455		7,158		5,701		358		6,059
Interest and financing costs		19		592		611		26		407		433
Operating expenses		40,006		3,592		43,598		34,551		3,534		38,085
Operating income & earnings before provision for income taxes	$	17,618	$	2,708	$	20,326	$	13,707	$	988	$	14,695
Depreciation and amortization	$	1,081	$	2,709	$	3,790	$	592	$	3,060	$	3,652
Purchases of property, equipment and operating lease equipment	$	744	$	706	$	1,450	$	1,845	$	1,628	$	3,473
Total assets	$	341,893	$	222,553	$	564,446	$	269,149	$	196,152	$	465,301
	Six Months Ended
	September 30, 2014						September 30, 2013
	Technology		Financing		Total		Technology		Financing		Total
Sales of product and services	$	547,940	$	-	$	547,940	$	508,320	$	-	$	508,320
Financing revenue		-		17,933		17,933		-		18,761		18,761
Fee and other income		3,829		74		3,903		3,286		79		3,365
Total revenues		551,769		18,007		569,776		511,606		18,840		530,446
Cost of sales, product and services		443,650		-		443,650		418,184		-		418,184
Direct lease costs		-		5,763		5,763		-		6,748		6,748
Total cost of revenues		443,650		5,763		449,413		418,184		6,748		424,932
Professional and other fees		2,907		503		3,410		4,443		703		5,146
Salaries and benefits		62,633		4,566		67,199		55,142		5,225		60,367
General and administrative expenses		12,461		970		13,431		10,515		545		11,060
Interest and financing costs		58		1,197		1,255		46		847		893
Operating expenses		78,059		7,236		85,295		70,146		7,320		77,466
Operating income		30,060		5,008		35,068		23,276		4,772		28,048
Other income		-		1,434		1,434		-		-		-
Earnings before provision for income taxes	$	30,060	$	6,442	$	36,502	$	23,276	$	4,772	$	28,048
Depreciation and amortization	$	1,975	$	5,656	$	7,631	$	1,244	$	6,115	$	7,359
Purchases of property, equipment and operating lease equipment	$	1,086	$	833	$	1,919	$	3,071	$	3,688	$	6,759
Total assets	$	341,893	$	222,553	$	564,446	$	269,149	$	196,152	$	465,301

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14. BUSINESS COMBINATIONS

On August 18, 2014, our subsidiary, ePlus Technology, inc., acquired the operating assets and assumed certain liabilities of Granite Business Solutions, Inc. dba Evolve Technology Group (“Evolve”). Evolve is a provider of IT solutions in California, expanding ePlus’ presence in the western United States. Located in Sacramento, CA, Evolve provides information security, collaboration, virtualization and data center solutions to an established customer base of state, local and educational institutions, as well as commercial enterprises.

The total purchase price was $10.5 million, which consists of cash paid, amounts to be paid to Evolve upon collection of certain accounts receivable, and the fair value of contingent consideration. We estimated the fair value of the contingent consideration to be $2.0 million using a probability weighted cash flow methodology. The purchase price has been allocated to the assets acquired and liabilities assumed based on their estimated fair values on the transaction date, including identifiable intangible assets of $3.9 million related to customer relationships with an estimated useful life of 6 years, and other net assets of $0.6 million. We recognized goodwill related to this transaction of $4.6 million, which was assigned to our technology reporting unit. Goodwill associated with the acquisition is deductible for tax purposes.

On November 14, 2013, our subsidiary, ePlus Technology, inc., acquired the assets of AdviStor, Inc., a storage-focused solutions provider located in Pittsford, New York for $2.8 million in cash. The purchase price has been allocated to the assets acquired and liabilities assumed based on their estimated fair values on the transaction date, including identifiable intangible assets of $1.6 million related to customer relationships with an estimated useful life of 6 years, and other net assets of $0.4 million. We recognized goodwill related to this transaction of $0.9 million, which was assigned to our technology reporting unit. Goodwill associated with the acquisition is deductible for tax purposes.

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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, 2014 (“2014 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 2014 Annual Report.

EXECUTIVE OVERVIEW

Business Description

ePlus and its consolidated subsidiaries provide leading information technology (“IT”) products and services, flexible leasing and financing solutions, and enterprise supply management to enable our customers to optimize their IT infrastructure and supply chain processes.

We design, implement and provide IT solutions for our customers. We are focused primarily on specialized IT segments including data center infrastructure, networking, security, cloud and collaboration. Our solutions incorporate hardware and software products from multiple leading IT vendors, as well as third party services, maintenance and software assurance on the hardware and software products. As our customers’ IT requirements have grown increasingly complex, we have evolved our offerings by investing in our professional and managed services capabilities and by expanding our relationships with existing key vendors.

We continue to strengthen our relationships with vendors focused on emerging technologies, which have enabled us to provide our customers with new and evolving IT solutions. We are an authorized reseller of products and services from over 1,000 vendors including Check Point, Cisco Systems, EMC, Hewlett-Packard, McAfee, NetApp, Oracle, Palo Alto Networks and VMware, among many others. We possess top-level engineering certifications with a broad range of leading IT vendors that enable us to offer IT solutions that are optimized for each of our customers’ specific requirements. Our proprietary software solutions allow our customers to procure, control and automate their IT solutions environment.

We focus on middle market and large enterprises, and state and local government and educational institutions (“SLED”). The percentage of total sales of products and services revenue for the twelve months ended September 30, 2014 by customer end market include technology (21%), telecommunications, media and entertainment (18%), financial services (11%), healthcare (9%), and state and local government, and educational institutions (21%).

Our revenues are composed of sales of product and services, financing revenues and fee and other income. Our operations are conducted through two segments: technology and financing segment.

Financial Summary

During the three months ended September 30, 2014, total revenue increased 9.7% to $297.5 million and operating income increased 38.3% to $20.3 million over the same period for the prior fiscal year. During the six months ended September 30, 2014, total revenue increased 7.4% to $569.8 million and operating income increased 25.0% to $35.1 million as compared to the same period for the prior fiscal year. We believe that our growth outpaced the overall industry due to a gain in market share as we captured additional customer spend, and focused on faster growing segments within the market, such as virtualization, collaboration, and security. In addition, we added new customers as a result of our own organic sales and marketing efforts as well as through increased vendor referrals.

Net earnings for the quarter increased 39.1% to $12.0 million, as compared to the three months ended September 30, 2013 and for the current six months increased 30.3% to $21.4 million, as compared to the six months ended September 30, 2013. Diluted earnings per share increased 53.8% to $1.63, and 40.9% to $2.86 per share for the three and six months ended September 30, 2014, respectively, as compared to $1.06 and $2.03 per share for the three and six months ended September 30, 2013.

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Consolidated gross margins were 21.5% for the three months ended September 30, 2014, compared to 19.5% for the three months ended September 30, 2013. Consolidated gross margins were 21.1% for the six months ended September 30, 2014, compared to 19.9% for the same period for the prior fiscal year. Our gross margin for product and services was 19.5% and 19.0% during the three and six months ended September 30, 2014, respectively, compared to 17.8% and 17.7% during the three and six months ended September 30, 2013. The increase in gross margins was due to shifts in our product mix resulting from our continued focus on value added services for our customers, including the sale of third party maintenance agreements on core elements of our customers’ IT environment. Revenues on the sale of third party services, such as software assurances and maintenance, are recognized on a net basis.

Cash and cash equivalents decreased $17.2 million or 21.5% to $62.9 million at September 30, 2014 compared to March 31, 2014. The decrease in our cash and cash equivalents was due, in part, to share repurchases during the six months ended September 30, 2014 and the acquisition of Evolve. Share repurchases included 400,000 shares of our common stock for $19.0 million in connection with the public underwritten secondary offering by certain of our existing shareholders. During the six months ended September 30, 2014, we repurchased 651,019 shares of our common stock for a total purchase price of $32.8 million. Our cash on hand, funds generated from operations, amounts available under our credit facility and the possible monetization of our investment portfolio provide sufficient liquidity for our business.

Segment Overview

Technology Segment

The technology segment sells IT products, software, advance professional and managed services, and third party 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 segment also provides Internet-based business-to-business supply chain management solutions for information technology products. Our technology segment derives revenue from the sales of new equipment and service engagements. Customers who purchase IT equipment and services from us may have customer master agreements, or CMAs, with our company, which stipulate the terms and conditions of the relationship. Some CMAs contain pricing arrangements, and most contain mutual voluntary termination 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 state and local 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 Systems, Hewlett-Packard, and NetApp products, which represent approximately 56%, 8%, and 6%, and 52%, 8%, and 6% of sales of product and services, respectively, for the three and six months ended September 30, 2014 as compared to 47%, 11%, and 6%, and 51%, 10%, and 7%, of total revenues, respectively, for the three and six months ended September 30, 2013. Included in the sales of product and services are revenues derived from performing advanced professional and managed services that may be sold together with and integral to third-party products and software. Our advanced professional 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. Our managed services arrangements are for terms of one, two, or three year periods.

We endeavor to minimize the cost of sales in our technology segment through vendor consideration programs provided by vendors and other incentives provided by distributors. The programs we qualify for are generally set by our reseller authorization level with the vendor. 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 purchase 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. Certain of our sales qualify for incentives that are related to specific customers and products that they may purchase.

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We currently maintain the following authorization levels with our primary vendors:

Vendor	Vendor Authorization Level
Apple	Apple Authorized Corporate Reseller (National)
Cisco Systems	Cisco Gold DVAR (National)
	Master Cloud Builder Specialization
	Master Collaboration Specialization
	Master Security Specialization
	Master UC Specialization
	Cloud and  Managed Services Master Partner
	Cloud Services Reseller
	Flexpod Premium Partner
	ATP Cisco Enterprise Mobility Services Platform Reseller
	ATP Cisco Telepresence Video Master
	ATP Telehealth Reseller
	ATP Data Virtualization Reseller
	ATP Identity Services Engine
	ATP Physical Security
	Advanced Data Center Storage Networking
	Advanced Routing and Switching
	Advanced Wireless LAN
	Cisco Authorized SP Video Partner
Check Point Software Technologies Ltd.	Platinum Reseller
Citrix Systems, Inc.	Citrix Platinum Partner (National)
Dell	Premier Partner
EMC	EMC Velocity Gold Partner (National)
Hewlett Packard	Platinum - Converged Infrastructure Partner (National)
	Gold Storage / Networking / Server / ServiceOne Specialists
	Gold Cloud Builder Specialist
	QSA - IT Management Ops and Apps
	BCS Gold Specialist
	Autonomy IM Solutions – Data Protector
IBM	Premier IBM Business Partner (National)
Lenovo	Lenovo Premium (National)
McAfee, Inc.	Elite Reseller
Microsoft	Microsoft Gold (National)
NetApp	NetApp STAR Partner (National)
Oracle Gold Partner	Sun SPA Executive Partner (National)
	Sun National Strategic Data Center Authorized
Palo Alto Networks, Inc.	Platinum Reseller
NetApp	NetApp STAR Partner (National)
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 segment through hosting arrangements, sales of our Internet-based business-to-business supply chain management software and related maintenance, and agent fees received from various vendors.

Our revenues 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 condensed consolidated statements of operations under fee and other income.

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Financing Segment

The financing segment offers financing solutions to domestic governmental entities and corporations nationwide and in certain other countries. The financing segment derives revenue from leasing IT and medical equipment and the disposition of that equipment at the end of the lease. The financing segment also derives revenues from the financing of third-party software licenses, software assurance, maintenance and other services. Financing revenue generally falls into three categories: portfolio income, transactional gains and post-contract earnings.

· Portfolio income consists of interest income from financing receivables and rents due under operating leases;

· Transactional gains consist of net gains or losses on the sale of financial assets; and

· Post-contract earnings include month-to-month rents; early termination, prepayment, make-whole, or buyout fees; and net gains on the sale of off-lease (used) equipment.

The types of revenue and costs recognized for investments in leases are determined by each lease’s 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 enter into arrangements to transfer the contractual payments due under financing arrangements, which are accounted for as sales or secured borrowings in accordance with Codification Topic, Transfers and Servicing. For transfers accounted for as sales, we derecognize the carrying value of the asset transferred and recognize a net gain or loss on the sale, which is presented within financing revenues in the unaudited condensed consolidated statement of operations. For transfers accounted for as a secured borrowing, the corresponding investments serve as collateral for non-recourse notes payable. We classify the interest and financing costs associated with these borrowings as an operating expense, consistent with industry practice.

Our financing 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.

We also recognize revenue from events that occur after the initial sale of a financial asset and remarketing fees from certain residual value investments. 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.

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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 such estimates, we caution that future events rarely develop exactly as forecasted, and therefore, these estimates may require adjustment.

Our critical accounting estimates have not changed from those reported in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our 2014 Annual Report.

RESULTS OF OPERATIONS

The Three and Six Months Ended September 30, 2014 Compared to the Three and Six Months Ended September 30, 2013

Technology Segment

The results of operations for our technology segment for the three and six months ended September 30, 2014 and 2013 were as follows (dollars in thousands):

	Three Months Ended September 30,									Six Months Ended September 30,
	2014		2013		Change					2014		2013		Change
Sales of product and services	$	286,584	$	261,283	$	25,301		9.7	%	$	547,940	$	508,320	$	39,620		7.8	%
Fee and other income		1,782		1,829		(47	)	(2.6	%)		3,829		3,286		543		16.5	%
Total revenues		288,366		263,112		25,254		9.6	%		551,769		511,606		40,163		7.9	%
Cost of sales, product and services		230,742		214,854		15,888		7.4	%		443,650		418,184		25,466		6.1	%
Professional and other fees		1,321		1,580		(259	)	(16.4	%)		2,907		4,443		(1,536	)	(34.6	%)
Salaries and benefits		31,963		27,244		4,719		17.3	%		62,633		55,142		7,491		13.6	%
General and administrative		6,703		5,701		1,002		17.6	%		12,461		10,515		1,946		18.5	%
Interest and financing costs		19		26		(7	)	(26.9	%)		58		46		12		26.1	%
Operating expenses		40,006		34,551		5,455		15.8	%		78,059		70,146		7,913		11.3	%
Segment earnings	$	17,618	$	13,707	$	3,911		28.5	%	$	30,060	$	23,276	$	6,784		29.1	%

Total revenues: Total revenues during the three months ended September 30, 2014 were $288.4 million compared to $263.1 million during the three months ended September 30, 2013, an increase of 9.6%, which was due to increases in demand for our products and services. Total revenues increased 7.9% during the six months ended September 30, 2014 to $551.8 million compared to $511.6 million during the six months ended September 30, 2013. The increase in revenues for the current quarter and six month period was primarily from our large and middle market commercial customers.

Total sales of product and services before the adjustment to present third party services on a net basis, or gross revenues, for the three months ended September 30, 2014 were $392.2 million compared to $321.2 million during the three months ended September 30, 2013, an increase of 22.1% or $71.0 million. Total sales of product and services presented on a gross basis increased 14.9% or $93.3 million during the six months ended September 30, 2014 to $717.7 million compared to $624.4 million during the six months ended September 30, 2013.

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We experienced year over year increases in the sales of product and services for all the quarters ended from September 30, 2013 through September 30, 2014, as summarized below:

Quarter Ended	Sequential	Year over Year
September 30, 2014	9.7%	9.7%
June 30, 2014	4.8%	5.8%
March 31, 2014	(2.5%)	11.4%
December 31, 2013	(2.1%)	12.1%
September 30, 2013	5.8%	4.4%

We rely on our vendors to fulfill shipments to our customers. As of September 30, 2014, we had open orders of $89.8 million and deferred revenue of $24.2 million. As of September 30, 2013, we had open orders of $65.7 million and deferred revenues of $14.1 million.

Cost of sales, product and services: Our gross margin for product and services was 19.5% and 17.8% during the three months ended September 30, 2014 and 2013, respectively. Our gross margin for product and services was 19.0% and 17.7% during the six months ended September 30, 2014 and 2013, respectively. The increase in our gross margin was impacted by the increase in sales of third party software assurance, maintenance and services, which are presented on a net basis. The change in the amount of vendor incentives earned during the three and six months ended September 30, 2014 resulted in a 0.1% increase in gross margins 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.

Our gross margin on sales of product and services increased sequentially from 18.5% for the three months ended June 30, 2014 to 19.5% for the three months ended September 30, 2014. This increase was due to increases in sales of third party software assurance, maintenance and services, which are presented on a net basis. Also contributing to the gross margin increase was an increase in higher margin service revenues and vendor rebates earned during the three months ended September 30, 2014.

Operating expenses: Operating expenses were $40.0 million for the current quarter or 15.8% higher than the three months ended September 30, 2013. Operating expenses were $78.1 million, or 11.3%, higher than the six months ended September 30, 2013. These increases were due to increases in personnel, commissions, and general and administrative expenses.

Professional and other fees decreased $0.3 million, or 16.4%, to $1.3 million for the three months ended September 30, 2014, compared to $1.6 million during the three months ended September 30, 2013. This decrease was primarily due to a decrease of $0.3 in legal and other fees related to the patent infringement litigation. During the six months ended September 30, 2014, professional and other fees decreased $1.5 million, or 34.6%, to $2.9 million, compared to $4.4 million during the six months ended September 30, 2013. This decrease was primarily due to lower legal and other fees related to the patent infringement litigation, which were $1.3 million lower for the six months ended September 30, 2014 than in the prior year.

Salaries and benefits expense increased $4.7 million, or 17.3%, to $32.0 million during the three months ended September 30, 2014, compared to $27.2 million during the three months ended September 30, 2013, of which 57% was due to variable compensation as a result of the increase in gross profit.  For the six months ended September 30, 2014, salaries and benefits expense increased $7.5 million, or 13.6%, to $62.6 million, compared to $55.1 million during the six months ended September 30, 2013, of which 47% related to increases in variable compensation due to higher gross profit.  The remaining increases were from increases in the number of employees and related benefits. Our technology segment had 928 employees as of September 30, 2014, an increase of 47 from 881 at September 30, 2013. Most of the increase in personnel relates to sales and engineering positions due to both internal growth and the acquisition of Evolve, which added 24 new employees. We continue to invest in sales and engineering talent in order to expand our geographical presence in the continental U.S. as well as extend our advanced technology solutions offerings.

General and administrative expenses increased $1.0 million, or 17.6% during the three months ended September 30, 2014 over the same period for prior year. For the six months ended September 30, 2014, general and administrative expenses increased $1.9 million, or 18.5% over the same period for prior year. This increase was primarily due to increases in office locations and our sales force and engineering team as a result of our continued expansion efforts, which resulted in higher rent and travel expenses, depreciation and amortization expense, and an increase in software license expenses.

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Segment earnings: As a result of the foregoing, segment earnings was $17.6 million, an increase of $3.9 million, or 28.5% for the three months ended September 30, 2014, and segment earnings was $30.1 million, an increase of $6.8 million, or 29.1% for the six months ended September 30, 2014 over the same period for the prior year.

Financing Segment

The results of operations for our financing segment for the three and six months ended September 30, 2014 and 2013 were as follows (dollars in thousands):

	Three Months Ended September 30,									Six Months Ended September 30,
	2014		2013		Change					2014		2013		Change
Financing revenue	$	9,059	$	8,001	$	1,058		13.2	%	$	17,933	$	18,761	$	(828	)	(4.4	%)
Fee and other income		47		16		31		193.8	%		74		79		(5	)	(6.3	%)
Total revenues		9,106		8,017		1,089		13.6	%		18,007		18,840		(833	)	(4.4	%)
Direct lease costs		2,806		3,495		(689	)	(19.7	%)		5,763		6,748		(985	)	(14.6	%)
Professional and other fees		256		328		(72	)	(22.0	%)		503		703		(200	)	(28.4	%)
Salaries and benefits		2,289		2,441		(152	)	(6.2	%)		4,566		5,225		(659	)	(12.6	%)
General and administrative		455		358		97		27.1	%		970		545		425		78.0	%
Interest and financing costs		592		407		185		45.5	%		1,197		847		350		41.3	%
Operating expenses		3,592		3,534		58		1.6	%		7,236		7,320		(84	)	(1.1	%)
Operating income		2,708		988		1,720		174.1	%		5,008		4,772		236		4.9	%
Other income		-		-		-		0.0	%		1,434		-		1,434		0.0	%
Segment earnings	$	2,708	$	988	$	1,720		174.1	%	$	6,442	$	4,772	$	1,670		35.0	%

Total revenues: Total revenues increased by $1.1 million, or 13.6%, to $9.1 million for the three months ended September 30, 2014, as compared to the three months ended September 30, 2013 predominately due to higher post contract earnings from the sales of off-lease equipment and an increase in customer renewal rents; which were partially offset by lower transactional gains on the sale of financial assets. During the quarters ended September 30, 2014 and 2013, we recognized net gains on sales of financial assets of $0.9 million and $1.2 million, respectively, and the fair value of assets received from these sales were $37.6 million and $34.9 million, respectively. Post contract earnings increased $1.2 million to $3.4 million for the three months ended September 30, 2014 over the prior year period.

For the six months ended September 30, 2014, total revenues decreased by $0.8 million, or 4.4%, to $18.0 million, as compared to the six months ended September 30, 2013 due to lower transactional gains on the sale of financial assets; partially offset by higher post contract earnings due to an increase in customer renewal rents. During the six months ended September 30, 2014 and 2013, we recognized net gains on sales of financial assets of $3.2 million and $5.6 million, respectively, and the fair value of assets obtained from these sales were $93.8 million and $122.4 million, respectively. Post contract earnings increased $1.8 million to $5.5 million for the six months ended September 30, 2014 over the prior year period.

At September 30, 2014, we had $159.4 million of investments in financing receivables and operating leases, compared to $140.5 million as of September 30, 2013, an increase of $18.9 million or 13.4%.

Direct lease costs: Direct lease costs decreased $0.7 million, or 19.7%, to $2.8 million and decreased $1.0 million, or 14.6%, to $5.8 million for the three and six months ended September 30, 2014, respectively, mostly due to decreases in depreciation expense for equipment under operating leases as compared to the same periods for the prior year.

Operating expenses: For the three months ended September 30, 2014, operating expenses increased $0.1 million, or 1.6%. For the six months ended September 30, 2014, operating expenses decreased $0.1 million, or 1.1%. Salaries and benefits decreased $0.7 million, or 12.6% to $4.6 million due to a decrease in personnel within this segment. General and administrative expenses increased $0.4 million, due primarily to an increase in our reserve for credit losses. Interest and financing costs increased $0.2 million and $0.4 million, respectively, for the three month and six months over prior year periods due to an increase in total notes payable to $68.1 million as of September 30, 2014, an increase of $24.5 million or 56.0% compared to $43.7 million as of September 30, 2013. Our weighted average interest rate for non-recourse notes payable was 3.31% and 3.82%, as of September 30, 2014 and September 30, 2013, respectively.

Other income: In April 2014, we entered into an arrangement to repurchase the rights, title, and interest to payments due under a financing arrangement. This financing arrangement was previously assigned to a third party financial institution and accounted for as a secured borrowing. In conjunction with the repurchase agreement, we recognized a gain of $1.4 million, which is presented within other income in our unaudited condensed consolidated statement of operations.  There was no other income recognized in the three months ended September 30, 2014, or in the prior year.

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Segment earnings: As a result of the foregoing, earnings increased $1.7 million for both the three and six months ended September 30, 2014, respectively, over the prior year periods.

Consolidated

Income taxes: Our provision for income tax expense was $8.4 million and $15.1 million for the three and six months ended September 30, 2014 as compared to $6.1 million and $11.6 million for the same periods last year. Our effective income tax rates for the three and six months ended September 30, 2014 was 41.2% and 41.3%, as compared to 41.5% and 41.4% for the three and six months ended September 30, 2013.

Net earnings: The foregoing resulted in net earnings of $12.0 million for the three months ended September 30, 2014, an increase of 39.1%, as compared to $8.6 million during the three months ended September 30, 2013. For the six months ended September 30, 2014, net earnings was $21.4 million, an increase of 30.3%, as compared to $16.4 million for the six months ended September 30, 2013.

Basic and fully diluted earnings per common share were $1.63 for the three months ended September 30, 2014, as compared to $1.07 and $1.06, respectively, for the three months ended September 30, 2013. Basic and fully diluted earnings per common share were $2.88 and $2.86, respectively, for the six months ended September 30, 2014, as compared to $2.05 and $2.03, respectively, for the six months ended September 30, 2013.

Weighted average common shares outstanding used in the calculation of basic and diluted earnings per common share for the three months ended September 30, 2014 were 7.3 million. Weighted average common shares outstanding used in the calculation of basic and diluted earnings per common share for the three months ended September 30, 2013 were 8.0 million.

Weighted average common shares outstanding used in the calculation of basic and diluted earnings per common share for the six months ended September 30, 2014 were 7.4 million and 7.5 million, 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, 2013 were 7.9 million and 8.0 million, 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 or software that are financed for our customers, 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 segment, finances its operations with funds generated from operations, and with a credit facility with GE Commercial Distribution Finance, or GECDF, with an aggregate credit limit of $225 million. 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, 2014 or March 31, 2014, 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.

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Most customer payments in our technology 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 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 working capital generally fluctuates as a result of changes in demand for our products and services; however, specific changes in certain elements of working capital may not coincide with changes in other elements of our financial statements. For example, accounts receivable-trade may change by more or less than the change in our revenues, as there are variables impacting accounts receivable that may not impact revenues, such as the amount of third-party software assurance, maintenance and services invoiced, for which revenues are presented on a net basis, or significant changes in our deferred revenues.

We experience fluctuations in certain working capital accounts, which are primarily due to changes in the timing of purchases of equipment by our customers throughout the comparative periods. Our accounts receivable—trade decreased by $5.5 million, and inventories-net increased $8.2 million from March 31, 2014. We also experienced a decrease in accounts payable—trade of $28.8 million, which was offset by an increase in accounts payable—floor plan of $27.2 million. Our accounts payable—floor plan consists of purchases through the GECDF credit facility, which are generally paid within 30-60 days from the invoice date. We experience fluctuations in accounts payable—equipment due to timing of purchases of assets that will be leased or financed for our customers and accounts payable – equipment increased $15.0 million from March 31, 2014.

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,
	2014			2013
Net cash (used in) provided by operating activities	$	(10,995	)	$	5,561
Net cash used in investing activities		(22,182	)		(25,333	)
Net cash provided by financing activities		15,948			20,748
Effect of exchange rate changes on cash		(9	)		-
Net (decrease) increase in cash and cash equivalents	$	(17,238	)	$	976

Net cash used in operating activities. Cash used in operating activities totaled $11.0 million during the six months ended September 30, 2014. Net earnings adjusted for the impact of non-cash items was $19.6 million. Net changes in assets and liabilities resulted in a decrease of cash and cash equivalents of $30.6 million, primarily due to cash used for accounts payable—trade of $29.3 million, cash used for inventories and financing receivables, partially offset by changes in accounts receivable-trade, salaries and commissions payable, and deferred costs and other assets.

Cash provided by operating activities totaled $5.6 million during the six months ended September 30, 2013. Net earnings adjusted for the impact of non-cash items was $15.4 million.  Net changes in assets and liabilities resulted in a decrease of $9.8 million due to decreases in accounts receivable—trade of $12.9 million, offset by increases in accounts receivable—other of $4.1 million, inventories of $5.0 million and investment in direct financing and sales-type leases—net of $7.6 million, and decreases in salaries and commission payable, accrued expenses and other liabilities and deferred revenue of $8.4 million.

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Net cash used in investing activities. Cash used in investing activities was $22.2 million during the six months ended September 30, 2014. Cash used in investing activities during the six months ended September 30, 2014 was primarily driven by an issuance of financing receivables of $51.2 million, purchase of assets to be leased and property and equipment of $11.9 million, and cash used in acquisitions of $7.8 million, which was partially offset by cash proceeds from the sale of financing receivable of $12.3 million, the repayment of financing receivables of $28.1 million, and proceeds from sale of property, equipment and operating lease assets of $5.8 million.

Cash used in investing activities was $25.3 million during the six months ended September 30, 2013, which was primarily driven by issuance of notes receivable (net of issuance, proceeds from the sale on notes, and repayments) of $14.4 million, purchase of assets to be leased of $7.0 million, and purchases of property, equipment and operating lease equipment of $6.8 million.

Net cash provided by (used in) financing activities. Cash provided by financing activities of $15.9 million during the six months ended September 30, 2014 was due to net borrowings on the floor plan facility of $20.7 million and net borrowings of non-recourse and recourse notes payable of $29.3 million, partially offset by the repurchase of common stock of $34.8 million. In the prior year, cash provided by financing activities was $20.7 million during the six month period, which was due to net borrowings on the floor plan facility of $14.0 million and net borrowings of non-recourse and recourse notes payable of $11.6 million, partially offset by the purchase of treasury stock of $5.9 million.

Non-Cash Activities

We transfer financial assets to third-party financial institutions, some of which are accounted for as secured borrowings. As a condition to the agreement, certain financial institutions may request the customer remit their 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 customer will continue to make payments to us, and we will remit the payment to the financial institution. The economic impact to us under either structure is similar, in that the assigned contractual payments are paid by the customer and remitted to the lender to pay down the corresponding non-recourse notes payable. However, these 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 payments made by our customer to the trustee are excluded from our operating or investing 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 that the transfer of these payments is economically the same regardless of the structure of the payments, we evaluate our cash flows from operating, investing and financing activities as if the transfer had been structured without an intermediary.

The non-GAAP financial measure for our cash flows from operating activities is as follows (in thousands):

	Six Months Ended September 30,
	2014			2013
GAAP: net cash (used in) provided by operating activities	$	(10,995	)	$	5,561
Principal payments from customers directly to lenders		7,009			9,084
Non-GAAP: adjusted net cash provided by operating activities	$	(3,986	)	$	14,645

The non-GAAP financial measure for our cash flows from investing activities is as follows (in thousands):

	Six Months Ended September 30,
	2014			2013
GAAP: net cash used in investing activities	$	(22,182	)	$	(25,333	)
Principal payments from customers directly to lenders		12,162			631
Non-GAAP: adjusted net cash (used in) investing activities	$	(10,020	)	$	(24,702	)

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The non-GAAP financial measure for our cash flows from financing activities is as follows (in thousands):

	Six Months Ended September 30,
	2014			2013
GAAP: net cash  provided by financing activities	$	15,948		$	20,748
Principal payments from customers directly to lenders		(19,171	)		(9,715	)
Non-GAAP: adjusted net cash (used in) provided by financing activities	$	(3,223	)	$	11,033

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 provided by (used in) operating activities, cash provided by (used in) investing activities and cash provided by (used in) financing activities. These non-GAAP measures are unlikely to be comparable to non-GAAP information provided by other companies.

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 lease and financing activities has been provided by our cash and non-recourse borrowings. We monitor our exposure closely. Historically, we have obtained mostly 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, 2014, our non-recourse notes payable decreased 0.1% to $65.3 million, as compared to $65.3 million at March 31, 2014. Recourse notes payable decreased 19.8% to $2.9 million as of September 30, 2014 compared to $3.6 million as of March 31, 2014.

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 — ePlus Technology, inc.

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, 2014, the facility had an aggregate limit of the two components of $225.0 million with an accounts receivable sub-limit of $30.0 million.

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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. We were in compliance with these covenants as of September 30, 2014.  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 ePlus Technology, inc. be provided within 45 days of each quarter and 90 days of each fiscal year end and also requires other operational reports be provided on a regular basis. Either party may terminate the facility 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.

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 a certain date. We have delivered the annual audited financial statements for the year ended March 31, 2014, 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 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 sixty 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, 2014	Balance as of September 30, 2014	Maximum Credit Limit at March 31,2014	Balance as of March 31, 2014
$225,000	$120,631	$175,000	$93,416

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, 2014 or March 31, 2014, while the maximum credit limit was $30.0 million for both periods.

Credit Facility — General

First Virginia Community Bank provides us with a $0.5 million credit facility, which will mature on October 26, 2015. 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, 2014, we had no outstanding balance on this credit facility.

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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 material 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 financial condition or results of operations.

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, 2014, 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 and/or engineering 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. We may continue to use our internally generated funds to finance investments in leased assets or investments in notes receivables due from our customers. 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, 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 and the transfer of financial assets.  Sales of equipment and transfers of financial assets 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 2014 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.

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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. Changes in interest rates may affect our ability to fund or transfer our financing arrangements if the rate rises above the fixed rate of the instrument. Borrowings under the GECDF facility bear interest at a market-based variable rate. As of September 30, 2014, 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.

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, 2014.

Changes in Internal Controls

There have not been any changes in our internal control over financial reporting during the quarter ended September 30, 2014, 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.

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PART II.  OTHER INFORMATION

Item 1. Legal Proceedings

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. Lawson filed an appeal. On November 21, 2012, the United States Court of Appeals for the Federal Circuit (the “Appeals Court”) reversed in part, vacated in part, affirmed in part, and remanded. The Appeals Court upheld the finding that the patent claims were not invalid and upheld, in part, the finding of infringement. The Appeals Court remanded the case to the trial court for consideration of what changes, if any, are required to the terms of the injunction. Consistent with the Appeals Court’s decision, on June 11, 2013, the trial court issued an order modifying the injunction so that it would continue in full effect with respect to those configurations of Lawson’s electronic procurement systems that the Appeals Court affirmed were infringing.

On August 16, 2013, the trial court issued an order finding, by clear and convincing evidence, that Lawson was in contempt of the trial court’s May 23, 2011, injunction, entering judgment in our favor in the amount of $18.2 million, and ordering that Lawson pay to the court a daily coercive fine.  Lawson filed an appeal and posted a bond, and collection of the judgment and the imposition of the coercive fine were stayed pending the appeal.

Patent litigation is extremely complex and issues regarding a patent’s validity can arise even subsequent to a patent’s issuance and a court’s enforcement thereof.  On April 3, 2014, the United States Patent and Trademark Office issued a notice canceling the patent at issue in the Lawson litigation.  On July 25, 2014, the Appeals Court issued an Opinion vacating the injunction and contempt order. We have filed a Petition for Rehearing, and are awaiting the court’s response.

Court calendars and rulings are inherently unpredictable, and we cannot predict when any litigation will be resolved, or the outcome thereof.

Other Matters

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, claims related to alleged violations of laws and regulations, and claims relating to alleged security or privacy breaches. 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.

Item 1A. Risk Factors

There have not been any material changes in the risk factors previously disclosed in Part I, Item 1A of our 2014 Annual Report.

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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, 2014.

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, 2014 through April 30, 2014		414,013	$	47.78		414,013		200,572	(2)
May 1, 2014 through May 31, 2014		115,230	$	53.54		115,230		85,342	(3)
June 1, 2014 through June 15, 2014		22,830	$	55.69		22,830		62,512	(4)
June 16, 2014 through June 30, 2014		35,158	$	57.69		-		500,000	(5)
July 1, 2014 through July 31, 2014		25,740	$	55.67		25,740		474,260	(6)
August 1, 2014 through August 31, 2014		15,377	$	54.74		15,377		458,883	(7)
September 1, 2014 through September 30, 2014		57,829	$	56.34		57,829		401,054	(8)

The timing and expiration date of the current stock repurchase authorizations are included in Note 9, “Stockholders’ Equity” to our unaudited condensed consolidated financial statements included elsewhere in this report.

(1) All shares acquired were in open-market purchases, except for 35,158 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, 2014 had purchase limitations on the number of shares of up to 750,000 shares. As of April 30, 2014, the remaining authorized shares to be purchased were 200,572.

(3) The share purchase authorization in place for the month ended May 31, 2014 had purchase limitations on the number of shares of up to 750,000 shares. As of May 31, 2014, the remaining authorized shares to be purchased were 85,342.

(4) The share purchase authorization in place through June 15, 2014 had purchase limitations on the number of shares of up to 750,000 shares. As of June 15, 2014, the remaining authorized shares to be purchased were 62,512.

(5) On June 12, 2014, the board of directors authorized the Company to repurchase up to 500,000 shares of its outstanding common stock over a 12-month period commencing June 16, 2014. As of June 30, 2014, the remaining authorized shares to be purchased were 500,000.

(6) The share purchase authorization in place for the month ended July 31, 2014 had purchase limitations on the number of shares of up to 500,000 shares. As of July 31, 2014, the remaining authorized shares to be purchased were 474,260.

(7) The share purchase authorization in place for the month ended August 31, 2014 had purchase limitations on the number of shares of up to 500,000 shares. As of August 31, 2014, the remaining authorized shares to be purchased were 458,883.

(8) The share purchase authorization in place for the month ended September 30, 2014 had purchase limitations on the number of shares of up to 500,000 shares. As of September 30, 2014, the remaining authorized shares to be purchased were 401,054.

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	Amendment No. 1 to Amended and Restated Agreement for Wholesale Financing, dated July 31, 2014, between ePlus Technology, inc. and GE Commercial Distribution Finance Corporation.
10.2	Amendment No. 1 to Amended and Restated Agreement for Business Financing, dated July 31, 2014, between ePlus Technology, inc. and GE Commercial Distribution Finance Corporation.
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	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

40

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 5, 2014	/s/ PHILLIP G. NORTON
	By: Phillip G. Norton, Chairman of the Board,
	President and Chief Executive Officer
	(Principal Executive Officer)
Date: November 5, 2014	/s/ ELAINE D. MARION
	By: Elaine D. Marion
	Chief Financial Officer
	(Principal Financial Officer)

41

EX-10.1

EXHIBIT 10.1

AMENDMENT #1 TO AMENDED AND RESTATED AGREEMENT FOR WHOLESALE FINANCING

This Amendment is entered into by and between ePlusTechnology,inc.("Dealer") and GECommercialDistributionFinanceCorporation("CDF") and is to that certain Amended and Restated Agreement for Wholesale Financing dated July 23, 2012, as amended ("Agreement"). All terms defined in the Agreement which are not defined herein shall have the same meaning in this Amendment as in the Agreement.

WHEREAS, CDF and Dealer wish to amend the terms of the Agreement.

NOW THEREFORE, in consideration of the premises and of the mutual promises contained herein and in the Agreement, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

1. Section 2 of the Agreement is hereby deleted in its entirety and replaced with the following:

"2. CreditFacility. Subject to the terms of this Agreement, CDF agrees to provide to Dealer an inventory floorplan credit facility of TwoHundredTwenty-FiveMillionDollars($225,000,000.00); provided, however, that at no time will the principal amount outstanding under Dealer's inventory floorplan credit facility with CDF and Dealer's accounts receivable facility exceed, in the aggregate, TwoHundredTwenty-FiveMillionDollars($225,000,000.00). CDF's decision to advance funds will not be binding until the funds are actually advanced.

In addition, subject to the terms of the Amended and Restated Business Financing Agreement between CDF and Dealer dated July 23, 2012, as may be amended from time to time, CDF agrees to provide to Dealer an accounts receivable facility of ThirtyMillionDollars($30,000,000.00); provided, however, that at no time will the principal amount outstanding under the accounts receivable facility and Dealer's inventory floorplan credit facility with CDF exceed, in the aggregate, TwoHundredMillionTwenty-FiveDollars [sic]($225,000,000.00). CDF's decision to advance funds will not be binding until the funds are actually advanced."

2. Section 6 of the Agreement is hereby deleted in its entirety and replaced with the following:

6. NegativeCovenants. Dealer will not at any time (without CDF's prior written consent): (a) grant to or in favor of any Entity a security interest in or permit to exist a lien, claim or encumbrance in the Accounts which is superior to the interest of CDF; (b) other than in the ordinary course of its business and if material in nature, sell, lease or otherwise dispose of or transfer any of its assets; (c) merge or consolidate with another Entity unless Dealer is the surviving entity of such merger or consolidation and, after giving effect to such merger or consolidation, Dealer is in full compliance with all of the covenants contained in this Agreement and the Other Agreements; (d) acquire the assets or ownership interest of any other Entity unless after giving effect to such acquisition, Dealer is in full compliance with all of the covenants contained in this Agreement and the Other Agreements; (e) enter into any material transaction not in the ordinary course of business; (f) guarantee or indemnify or otherwise become in any way liable with respect to the obligations of any Entity, except by endorsement of instruments or items of payment for deposit to the general account of Dealer or which are transmitted or turned over to CDF on account of the Obligations; (g) redeem, retire, purchase or otherwise acquire, directly or indirectly, any of Dealer's capital stock; (h) make any change in Dealer's capital structure or in any of its business objectives or operations which would reasonably be expected to materially adversely affect the ability of Dealer to repay the Obligations; (i) make any distribution of Dealer's assets not in the ordinary course of business; (j) incur any debts outside of the ordinary course of business except renewals or extensions of existing debts and interest thereon; (k) make any loans, advances, contributions or payments of money or in goods to any affiliated entity other than inter-company payments in an amount not to exceed Thirty Million Dollars ($30,000,000.00) made in the ordinary course of business; provided however, that if after giving effect to such payments, Dealer is not in default under the terms and conditions of this Agreement, and Dealer's Available Borrowing is not less than Twenty Million Dollars ($20,000,000.00); (l) make any loans, advances, contributions or payments of money or in goods to any officer, director, stockholder, member or partner of Dealer (except for as disclosed in ePlus inc.'s public filings with the Securities and Exchange Commission); provided however, that if after giving effect to such payments, Dealer is not in default under the terms and conditions of this Agreement; (m) prior to sale by Dealer, move any Collateral financed by CDF out of the United States of America; or (n) store Collateral financed by CDF with any third party. Notwithstanding the foregoing subsections (k) and (l), Dealer, from time to time, may make a dividend to ePlus inc. if, after giving effect to such dividend, and as of the date of such dividend, (i) Dealer is not in default under the terms and conditions of this Agreement, (ii) Dealer's Available Borrowing is not less than Twenty Million Dollars ($20,000,000.00), and (iii) Dealer does not have any outstandings under its

Accounts Receivable Facility with CDF. For the purposes of this paragraph: "Available Borrowing" shall mean on receipt of each Schedule, CDF will credit Dealer with such amount as CDF may deem advisable up to the remainder of eighty-five percent (85%) of the net amount of all eligible Accounts, Eligible Cisco VIP Rebates, and Intercompany Lease Receivables listed in such Schedule up to a maximum of Four Million Dollars ($4,000,000) (the "Eligible Credit") minus the amount of Dealer's SPP Deficit under Dealer's Agreement for Wholesale Financing with CDF as in effect from time to time and minus the principal amount outstanding under Dealer's Accounts Receivable Facility."

Dealer waives notice of CDF's acceptance of this Amendment.

All other terms and provision of the Agreement, to the extent consistent with the foregoing, are hereby ratified and will remain unchanged and in full force and effect.

IN WITNESS WHEREOF, Dealer and CDF have executed this Amendment on this 31st day of July, 2014.

EPLUS TECHNOLOGY, INC.
By:	/s/ Elaine D. Marion
Print Name:	Elaine D. Marion
Title:	Chief Financial Officer
GE COMMERCIAL DISTRIBUTION FINANCE COPORATION
By:	/s/ Scott Hunt
Print Name:	Scott Hunt
Title:	Sr. Portfolio Manager

EX-10.2

EXHIBIT 10.2

AMENDMENT #1 TO AMENDED AND RESTATED BUSINESS FINANCING AGREEMENT

This Amendment is entered into by and between ePlusTechnology,inc.("Dealer") and GECommercialDistributionFinanceCorporation("CDF") and is to that certain Amended and Restated Business Financing Agreement dated July 23, 2012, as amended ("Agreement"). All terms defined in the Agreement which are not defined herein shall have the same meaning in this Amendment as in the Agreement.

WHEREAS, CDF and Dealer wish to amend the terms of the Agreement.

NOW THEREFORE, in consideration of the premises and of the mutual promises contained herein and in the Agreement, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

1. Section 2.1 of the Agreement is hereby deleted in its entirety and replaced with the following:

"2.1 AccountsReceivableFacility. Subject to the terms of this Agreement, CDF agrees to provide to Dealer an Accounts Receivable Facility of Thirty MillionDollars($30,000,000.00); provided, however, that at no time will the principal amount outstanding under the Accounts Receivable Facility and Dealer's inventory floorplan credit facility with CDF exceed, in the aggregate, TwoHundredTwenty-FiveMillionDollars($225,000,000.00). CDF's decision to advance funds will not be binding until the funds are actually advanced.

In addition, subject to the terms of the Amended and Restated Agreement for Wholesale Financing between CDF and Dealer dated July 23, 2012, as may be amended from time to time, CDF agrees to provide to Dealer an inventory floorplan credit facility of TwoHundredTwenty-FiveMillionDollars($225,000,000.00); provided, however, that at no time will the principal amount outstanding under Dealer's inventory floorplan credit facility with CDF and Dealer's Accounts Receivable Facility exceed, in the aggregate, TwoHundredTwenty-FiveMillionDollars($225,000,000.00). CDF's decision to advance funds will not be binding until the funds are actually advanced."

2. Section 3.7 of the Agreement is hereby deleted in its entirety and replaced with the following:

"3.7 Collections. Unless otherwise directed by CDF, to expedite collection of Accounts for the benefit of CDF, Dealer shall notify all of its obligors to make payment of the Accounts to one or more lock-boxes. The lock-box(es), and all accounts into which the proceeds of any such lock-box(es) are deposited, shall be established and maintained at banks selected by the Dealer and satisfactory to CDF in its sole discretion. Dealer shall issue to any such banks an irrevocable letter of instruction, in form and substance reasonably acceptable to CDF, directing such banks to deposit all payments or other remittances received in the lock-box to such account or accounts as CDF shall direct. At all times after either (i) a Default by Dealer, (ii) the principal amount outstanding under Dealer's Accounts Receivable Facility with CDF exceed, in the aggregate, Twenty Million Dollars ($20,000,000.00), or (iii) Dealer's Available Borrowing (as defined below) under Dealers Credit Facility with CDF is less than Twenty Million Dollars ($20,000,000.00), CDF may provide notice to such banks that thereafter all funds deposited in the lock-box or any such account immediately shall become the property of CDF, and any disbursements of the proceeds in the lock-box or any such account will only be made to CDF. Dealer shall obtain the agreement of such banks to waive any offset rights against the funds so deposited and otherwise establish CDF's control thereof as secured party under the Uniform Commercial Code. CDF assumes no responsibility for such lock-box arrangement, including, without limitation, any claim of accord and satisfaction or release with respect to deposits which any banks accept thereunder. All remittances which Dealer receives in payment of any Accounts, and the proceeds of any of the other Collateral, shall be immediately deposited in such accounts designated by CDF. All proceeds received or collected by CDF with respect to Accounts, and reserves and other property of Dealer in possession of CDF at any time or times hereafter, may be held by CDF without interest to Dealer until all Obligations are paid in full or applied by CDF on account of the Obligations. CDF may release to Dealer such portions of such reserves and proceeds as CDF may determine. Upon the occurrence and during the continuance of a Default, CDF may notify the obligors that the Accounts have been assigned to CDF, collect the Accounts directly in its own name and charge the collection costs and expenses, including attorneys' fees, to Dealer. CDF has no duty to protect, insure, collect or realize upon the Accounts to preserve rights in them."

3. Section 5.2 of the Agreement is hereby deleted in its entirety and replaced with the following:

"5.2 NegativeCovenants. Dealer will not at any time (without CDF's prior written consent): (a) grant to or in favor of any Entity a security interest in or permit to exist a lien, claim or encumbrance in the Accounts which is superior to the interest of CDF; (b) other than in the ordinary course of its business and if material in nature, sell, lease or otherwise dispose of or transfer any of its assets;

(c) merge or consolidate with another Entity unless Dealer is the surviving entity of such merger or consolidation and, after giving effect to such merger or consolidation, Dealer is in full compliance with all of the covenants contained in this Agreement and the Other Agreements; (d) acquire the assets or ownership interest of any other Entity unless after giving effect to such acquisition, Dealer is in full compliance with all of the covenants contained in this Agreement and the Other Agreements; (e) enter into any material transaction not in the ordinary course of business; (f) guarantee or indemnify or otherwise become in any way liable with respect to the obligations of any Entity, except by endorsement of instruments or items of payment for deposit to the general account of Dealer or which are transmitted or turned over to CDF on account of the Obligations; (g) redeem, retire, purchase or otherwise acquire, directly or indirectly, any of Dealer's capital stock; (h) make any change in Dealer's capital structure or in any of its business objectives or operations which would reasonably be expected to materially adversely affect the ability of Dealer to repay the Obligations; (i) make any distribution of Dealer's assets not in the ordinary course of business; (j) incur any debts outside of the ordinary course of business except renewals or extensions of existing debts and interest thereon; (k) make any loans, advances, contributions or payments of money or in goods to any affiliated entity other than inter-company payments in an amount not to exceed Thirty Million Dollars ($30,000,000.00) made in the ordinary course of business; provided however, that if after giving effect to such payments, Dealer is not in default under the terms and conditions of this Agreement, and Dealer's Available Borrowing is not less than Twenty Million Dollars ($20,000,000.00); (l) make any loans, advances, contributions or payments of money or in goods to any officer, director, stockholder, member or partner of Dealer (except for as disclosed in ePlus inc.'s public filings with the Securities and Exchange Commission); provided however, that if after giving effect to such payments, Dealer is not in default under the terms and conditions of this Agreement; (m) prior to sale by Dealer, move any Collateral financed by CDF out of the United States of America; or (n) store Collateral financed by CDF with any third party. Notwithstanding the foregoing subsection (k) and (l), Dealer, from time to time, may make a dividend to ePlus inc. if, after giving effect to such dividend, and as of the date of such dividend, (i) Dealer is not in default under the terms and conditions of this Agreement, (ii) Dealer's Available Borrowing is not less than Twenty Million Dollars ($20,000,000.00), and (iii) Dealer does not have any outstandings under its Accounts Receivable Facility with CDF. For the purposes of this paragraph: "Available Borrowing" shall mean on receipt of each Schedule, CDF will credit Dealer with such amount as CDF may deem advisable up to the remainder of eighty-five percent (85%) of the net amount of all eligible Accounts, Eligible Cisco VIP Rebates, and Intercompany Lease Receivables listed in such Schedule up to a maximum of Four Million Dollars ($4,000,000) (the "Eligible Credit") minus the amount of Dealer's SPP Deficit under Dealer's Agreement for Wholesale Financing with CDF as in effect from time to time and minus the principal amount outstanding under Dealer's Accounts Receivable Facility."

Dealer waives notice of CDF's acceptance of this Amendment.

All other terms and provision of the Agreement, to the extent consistent with the foregoing, are hereby ratified and will remain unchanged and in full force and effect.

IN WITNESS WHEREOF, Dealer and CDF have executed this Amendment on this 31st day of July, 2014.

EPLUS TECHNOLOGY, INC.
By:	/s/ Elaine D. Marion
Print Name:	Elaine D. Marion
Title:	Chief Financial Officer
GE COMMERCIAL DISTRIBUTION FINANCE COPORATION
By:	/s/ Scott Hunt
Print Name:	Scott Hunt
Title:	Sr. Portfolio Manager

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 5, 2014

/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 5, 2014

/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 ended September 30, 2014, 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 of ePlus inc.

Date: November 5, 2014

/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.

XML

COMMITMENTS AND CONTINGENCIES (Details) (USD $) In Millions, unless otherwise specified	6 Months Ended
	Sep. 30, 2014 Defendant	May 19, 2009 Defendant
Legal Proceedings [Abstract]
Number of defendants infringing patents		4
Number of defendants entered into agreement	3
Judgment amount	$ 18.2
Number of defendants alleged to conspire to fix, raise, maintain or stabilize prices	10
Anticipated settlement receivable	$ 6.2

XML

BUSINESS COMBINATIONS (Details) (USD $)			0 Months Ended		0 Months Ended		0 Months Ended
	Sep. 30, 2014	Mar. 31, 2014	Aug. 18, 2014 Evolve Technology Group [Member]	Aug. 18, 2014 Evolve Technology Group [Member]	Aug. 18, 2014 Evolve Technology Group [Member] Customer Relationships [Member]	Aug. 18, 2014 Evolve Technology Group [Member] Technology Reporting Unit [Member]	Nov. 14, 2013 AdviStor, Inc. [Member]	Nov. 14, 2013 AdviStor, Inc. [Member] Customer Relationships [Member]	Nov. 14, 2013 AdviStor, Inc. [Member] Technology Reporting Unit [Member]
Business Acquisition [Line Items]
Cash paid							$ 2,800,000
Identifiable intangible assets					3,900,000			1,600,000
Estimated useful life					6 years			6 years
Other net assets				600,000			400,000
Recognized goodwill related to acquisition	34,161,000	29,570,000				4,600,000			900,000
Purchase price			10,500,000
Fair value of contingent consideration				$ 2,000,000

XML

FINANCING RECEIVABLES AND OPERATING LEASES (Details) (USD $)	3 Months Ended			6 Months Ended
	Sep. 30, 2014		Sep. 30, 2013	Sep. 30, 2014		Sep. 30, 2013	Mar. 31, 2014		Mar. 31, 2013
Financing Receivable, Allowance for Credit Losses [Line Items]
Reserve for credit losses	$ (5,820,000)		$ (5,199,000)	$ (5,820,000)		$ (5,199,000)	$ (5,752,000)		$ (5,129,000)
Reported as [Abstract]
Estimated unguaranteed residual values for direct financing lease	3,287,000			3,287,000			3,034,000
Accumulated amortization of initial direct cost	548,000			548,000			525,000
Gain (Loss) on sale of financing receivables				3,200,000		5,600,000
Investment serving as collaterals for non-recourse notes payable	72,800,000			72,800,000			72,300,000
Proceeds from sale of financing receivables	37,600,000		34,900,000	93,800,000		122,400,000
Investment in operating lease equipment - net [Abstract]
Cost of equipment under operating lease	31,072,000			31,072,000			40,513,000
Accumulated depreciation	(15,674,000)			(15,674,000)			(20,525,000)
Investment in operating lease equipment - net	15,398,000	[1]		15,398,000	[1]		19,988,000	[1]
Unguaranteed residual value of operating lease equipment net	3,842,000			3,842,000			5,610,000
Notes Receivable [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Minimum payments	59,745,000			59,745,000			43,707,000
Estimated unguaranteed residual value	0	[2]		0	[2]		0	[3]
Initial direct costs, net of amortization	409,000	[4]		409,000	[4]		354,000	[5]
Unearned income	0			0			0
Reserve for credit losses	(3,673,000)	[6]	(3,123,000)	(3,673,000)	[6]	(3,123,000)	(3,364,000)	[6]	(3,137,000)
Total, net	56,481,000			56,481,000			40,697,000
Reported as [Abstract]
Current	27,043,000			27,043,000			22,109,000
Long-term	29,438,000			29,438,000			18,588,000
Total, net	56,481,000			56,481,000			40,697,000
Lease-Related Receivables [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Minimum payments	86,289,000			86,289,000			81,551,000
Estimated unguaranteed residual value	8,184,000	[2]		8,184,000	[2]		8,275,000	[3]
Initial direct costs, net of amortization	528,000	[4]		528,000	[4]		537,000	[5]
Unearned income	(6,444,000)			(6,444,000)			(6,285,000)
Reserve for credit losses	(1,004,000)	[6]	(898,000)	(1,004,000)	[6]	(898,000)	(1,024,000)	[6]	(845,000)
Total, net	87,553,000			87,553,000			83,054,000
Reported as [Abstract]
Current	37,606,000			37,606,000			35,640,000
Long-term	49,947,000			49,947,000			47,414,000
Total, net	87,553,000			87,553,000			83,054,000
Financing Receivable [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Minimum payments	146,034,000			146,034,000			125,258,000
Estimated unguaranteed residual value	8,184,000	[2]		8,184,000	[2]		8,275,000	[3]
Initial direct costs, net of amortization	937,000	[4]		937,000	[4]		891,000	[5]
Unearned income	(6,444,000)			(6,444,000)			(6,285,000)
Reserve for credit losses	(4,677,000)	[6]		(4,677,000)	[6]		(4,388,000)	[6]
Total, net	144,034,000			144,034,000			123,751,000
Reported as [Abstract]
Current	64,649,000			64,649,000			57,749,000
Long-term	79,385,000			79,385,000			66,002,000
Total, net	$ 144,034,000			$ 144,034,000			$ 123,751,000

[1] Includes estimated unguaranteed residual values of $5,672 thousand and $5,610 thousand as of June 30, 2014 and March 31, 2014, respectively.

[2] Includes estimated unguaranteed residual values of $3,287 thousand for direct financing leases, which have been sold and accounted for as sales under Codification Topic Transfers and Servicing.

[3] Includes estimated unguaranteed residual values of $3,034 thousand for direct financing leases, which have been sold and accounted for as sales under Codification Topic Transfers and Servicing.

[4] Initial direct costs are shown net of amortization of $548 thousand.

[5] Initial direct costs are shown net of amortization of $525 thousand.

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

XML

RESERVES FOR CREDIT LOSSES (Tables)

6 Months Ended

Sep. 30, 2014

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, 2014 and 2013 were as follows (in thousands):

	Accounts Receivable			Notes Receivable			Lease-Related Receivables			Total
Balance April 1, 2014	$	1,364		$	3,364		$	1,024		$	5,752
Provision for credit losses		(99	)		309			11			221
Write-offs and other		(122	)		-			(31	)		(153	)
Balance September 30, 2014	$	1,143		$	3,673		$	1,004		$	5,820
	Accounts Receivable			Notes Receivable			Lease-Related Receivables			Total
Balance April 1, 2013	$	1,147		$	3,137		$	845		$	5,129
Provision for credit losses		152			(14	)		53			191
Write-offs and other		(121	)		-			-			(121	)
Balance September 30, 2013	$	1,178		$	3,123		$	898		$	5,199

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, 2014				March 31, 2014
	Notes Receivable		Lease-Related Receivables		Notes Receivable		Lease-Related Receivables
Reserves for credit losses:
Ending balance: collectively evaluated for impairment	$	552	$	788	$	265	$	852
Ending balance: individually evaluated for impairment		3,121		216		3,099		172
Ending balance	$	3,673	$	1,004	$	3,364	$	1,024
Minimum payments:
Ending balance: collectively evaluated for impairment	$	56,292	$	86,086	$	39,869	$	81,114
Ending balance: individually evaluated for impairment		3,453		203		3,838		437
Ending balance	$	59,745	$	86,289	$	43,707	$	81,551

Balance Disaggregated Based on Internally Assigned CQR

As of September 30, 2014, 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, 2014
High CQR	$	42	$	5	$	130	$	177	$	232	$	51,342	$	51,751	$	(2,828	)	$	(18,031	)	$	30,892
Average CQR		52		48		14		114		566		33,654		34,335		(2,704	)		(17,742	)		13,888
Low CQR		-		-		-		-		-		203		203		(19	)		-			184
Total		94		53		144		291		798		85,199		86,289		(5,551	)		(35,773	)		44,964
March 31, 2014
High CQR	$	194	$	35	$	106	$	335	$	502	$	42,159	$	42,996	$	(1,890	)	$	(17,406	)	$	23,700
Average CQR		33		57		18		108		86		37,924		38,118		(3,401	)		(20,709	)		14,008
Low CQR		-		-		61		61		-		376		437		(55	)		-			382
Total		227		92		185		504		588		80,459		81,551		(5,346	)		(38,115	)		38,090

Age of the Recorded Notes Receivable Balance Disaggregated Based on Internally Assigned CQR

As of September 30, 2014, the age of the recorded notes receivable balance disaggregated based on our internally assigned 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 Notes Receivable		Total Notes Receivable		Non-Recourse Notes Payable			Net Credit Exposure
September 30, 2014
High CQR	$	829	$	5	$	1,802	$	2,636	$	521	$	38,137	$	41,294	$	(23,463	)	$	17,831
Average CQR		171		-		-		171		281		14,546		14,998		(4,580	)		10,418
Low CQR		-		-		707		707		-		2,746		3,453		-			3,453
Total		1,000		5		2,509		3,514		802		55,429		59,745		(28,043	)		31,702
March 31, 2014
High CQR	$	-	$	205	$	148	$	353	$	2,317	$	30,249	$	32,919	$	(19,641	)	$	13,278
Average CQR		-		-		-		-		-		6,950		6,950		(3,491	)		3,459
Low CQR		-		-		791		791		-		3,047		3,838		-			3,838
Total		-		205		939		1,144		2,317		40,246		43,707		(23,132	)		20,575

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SHARE-BASED COMPENSATION (Details) (USD $)	3 Months Ended		6 Months Ended							6 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014 Restricted Stock [Member]	Sep. 30, 2014 Stock Options [Member]	Sep. 30, 2013 Stock Options [Member]	Jun. 30, 2014 Stock Options [Member]	Jun. 30, 2013 Stock Options [Member]	Sep. 30, 2014 2008 Director LTIP [Member] Restricted Stock [Member]	Sep. 30, 2013 2008 Director LTIP [Member] Restricted Stock [Member]	Sep. 30, 2014 2012 Employee LTIP [Member] Restricted Stock [Member]	Sep. 30, 2013 2012 Employee LTIP [Member] Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options outstanding (in shares)								0	0
Stock options granted to employees (in shares)						0	0
Options exercised (in shares)						0	40,000
Number of Shares [Rollforward]
Nonvested (in shares)					200,120
Granted (in shares)					87,555					9,390	8,520	78,165	77,115
Vested (in shares)					(111,296)
Nonvested (in shares)					176,379
Weighted Average Grant-date Fair Value [Rollforward]
Nonvested (in dollars per share)					$ 41.11
Granted (in dollars per share)					$ 57.12
Vested (in dollars per share)					$ 35.57
Nonvested (in dollars per share)					$ 52.67
Compensation Expense [Abstract]
Total share-based compensation expense	$ 1,200,000	$ 1,100,000	$ 2,200,000	$ 1,900,000
Unrecognized compensation expense	7,900,000		7,900,000
Unrecognized compensation expense, period for recognition (in months)			33 months
Period over which employer contribution is vested			4 years
Expenses for the plan	$ 302,000	$ 147,000	$ 623,000	$ 524,000

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PROPERTY, EQUIPMENT OTHER ASSETS AND LIABILITIES (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014	Mar. 31, 2014
Other current assets [Abstract]
Deposits & funds held in escrow	$ 6,610	$ 995
Prepaid assets	3,079	2,865
Supplemental benefit plan investments	0	2,544
Other	318	521
Total other current assets	10,007	6,925
Other assets [Abstract]
Deferred costs	1,238	1,591
Property and equipment - net	4,636	4,293
Other	1,271	2,129
Other assets - long term	7,145	8,013
Other current liabilities [Abstract]
Accrued expenses	10,192	5,322
Deferred compensation	222	2,544
Other	6,192	7,516
Total other current liabilities	21,667	15,382
Other liabilities [Abstract]
Deferred revenue	1,786	1,822
Other	1,013	0
Total other liabilities - long term	$ 2,799	$ 1,822

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FINANCING RECEIVABLES AND OPERATING LEASES

6 Months Ended

Sep. 30, 2014

FINANCING RECEIVABLES AND OPERATING LEASES [Abstract]

FINANCING RECEIVABLES AND OPERATING LEASES

2. FINANCING RECEIVABLES AND OPERATING LEASES

Our notes receivable, investments in leases, and leased equipment consist of assets that we financed for our customers, which we manage as a portfolio of investments. Our leases to our customers are accounted for as investments in direct financing, sales-type or operating leases in accordance with Codification Topic, Leases. We also finance third-party software, maintenance, and services for our customers, which are classified as notes receivables. Our notes receivables are interest bearing and are often due over a period of time that corresponds with the terms of the leased products.

FINANCING RECEIVABLES—NET

Our financing receivables, net consist of the following (in thousands):

September 30, 2014	Notes Receivables			Lease-Related Receivables			Total Financing Receivables
Minimum payments	$	59,745		$	86,289		$	146,034
Estimated unguaranteed residual value (1)		-			8,184			8,184
Initial direct costs, net of amortization (2)		409			528			937
Unearned income		-			(6,444	)		(6,444	)
Reserve for credit losses (3)		(3,673	)		(1,004	)		(4,677	)
Total, net	$	56,481		$	87,553		$	144,034
Reported as:
Current	$	27,043		$	37,606		$	64,649
Long-term		29,438			49,947			79,385
Total, net	$	56,481		$	87,553		$	144,034

(1) Includes estimated unguaranteed residual values of $3,287 thousand 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 $548 thousand.

(3) For details on reserve for credit losses, refer to Note 4, “Reserves for Credit Losses.”

March 31, 2014	Notes Receivables			Lease-Related Receivables			Total Financing Receivables
Minimum payments	$	43,707		$	81,551		$	125,258
Estimated unguaranteed residual value (1)		-			8,275			8,275
Initial direct costs, net of amortization (2)		354			537			891
Unearned income		-			(6,285	)		(6,285	)
Reserve for credit losses (3)		(3,364	)		(1,024	)		(4,388	)
Total, net	$	40,697		$	83,054		$	123,751
Reported as:
Current	$	22,109		$	35,640		$	57,749
Long-term		18,588			47,414			66,002
Total, net	$	40,697		$	83,054		$	123,751

(1) Includes estimated unguaranteed residual values of $3,034 thousand 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 $525 thousand.

(3) For details on reserve for credit losses, refer to Note 4, “Reserves for Credit Losses.”

OPERATING LEASES—NET

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

	September 30, 2014			March 31, 2014
Cost of equipment under operating leases	$	31,072		$	40,513
Accumulated depreciation		(15,674	)		(20,525	)
Investment in operating lease equipment—net (1)	$	15,398		$	19,988

(1) These totals include estimated unguaranteed residual values of $3,842 thousand and $5,610 thousand as of September 30, 2014 and March 31, 2014, respectively.

TRANSFERS OF FINANCIAL ASSETS

We enter into arrangements to transfer the contractual payments due under financing receivables and operating leases, which are accounted for as sales or secured borrowings in accordance with Codification Topic, Transfers and Servicing. For transfers accounted for as a secured borrowing, the corresponding investments serve as collateral for non-recourse notes payable. As of September 30, 2014 and March 31, 2014, we had financing receivables and operating leases of $72.8 million and $72.3 million, respectively, that were collateral for non-recourse notes payable. See Note 6, “Notes Payable and Credit Facility.”

For transfers accounted for as sales, we derecognize the carrying value of the asset transferred and recognize a net gain or loss on the sale, which is presented within financing revenues in the unaudited condensed consolidated statement of operations. During the three months ended September 30, 2014 and 2013, we recognized net gains of $0.9 million and $1.2 million, respectively. The fair value of assets received from these sales was $37.6 million and $34.9 million for the three months ended September 30, 2014 and 2013, respectively. During the six months ended September 30, 2014 and 2013, we recognized net gains of $3.2 million and $5.6 million, respectively. The fair value of assets received from these sales was $93.8 million and $122.4 million for the six months ended September 30, 2014 and 2013, respectively.

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INCOME TAXES (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
INCOME TAXES [Abstract]
Gross liability related to uncertain tax positions	$ 149		$ 149
Impact of recognizing the unrecognized tax benefit	194		194
Interest on income taxes expense included in statement of operation	1	4	2	9
Accrued interest on income taxes	$ 67	$ 206	$ 67	$ 206

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SHARE-BASED COMPENSATION (Tables)

6 Months Ended

Sep. 30, 2014

SHARE-BASED COMPENSATION [Abstract]

Summary of Nonvested Restricted Shares

A summary of the restricted shares is as follows:

	Number of Shares			Weighted Average Grant-date Fair Value
Nonvested April 1, 2014		200,120		$	41.11
Granted		87,555		$	57.12
Vested		(111,296	)	$	35.57
Nonvested September 30, 2014		176,379		$	52.67

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EARNINGS PER SHARE (Tables)

6 Months Ended

Sep. 30, 2014

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 in our unaudited condensed consolidated statements of operations for the three and six months ended September 30, 2014 and September 30, 2013 (in thousands, except per share data).

	Three months ended September 30,				Six months ended September 30,
	2014		2013		2014		2013
Basic and diluted shares outstanding
Weighted average common shares outstanding — basic		7,320		7,976		7,412		7,945
Effect of dilutive shares		25		44		49		62
Weighted average common shares outstanding — diluted		7,345		8,020		7,461		8,007
Calculation of earnings per share - basic
Net earnings	$	11,952	$	8,591	$	21,429	$	16,441
Net earnings attributable to participating securities		-		66		55		192
Net earnings attributable to common shareholders	$	11,952	$	8,525	$	21,374	$	16,249
Earnings per share - basic	$	1.63	$	1.07	$	2.88	$	2.05
Calculation of earnings per share - diluted
Net earnings attributable to common shareholders— basic	$	11,952	$	8,525	$	21,374	$	16,249
Add: undistributed earnings attributable to participating securities		-		-		1		1
Net earnings attributable to common shareholders— diluted	$	11,952	$	8,525	$	21,375	$	16,250
Earnings per share - diluted	$	1.63	$	1.06	$	2.86	$	2.03

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FAIR VALUE OF FINANCIAL INSTRUMENTS (Details) (USD $) In Thousands, unless otherwise specified	6 Months Ended	12 Months Ended
	Sep. 30, 2014	Mar. 31, 2014	Sep. 30, 2013
Assets :
Money market funds	$ 43,767	$ 54,267
Total Gains (Losses)	0	0
Liabilities :
Contingent consideration	1,960		0
Total Gains (Losses)	0
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member]
Assets :
Money market funds	43,767	54,267
Liabilities :
Contingent consideration	0
Significant Other Observable Inputs (Level 2) [Member]
Assets :
Money market funds	0	0
Liabilities :
Contingent consideration	0
Significant Unobservable Inputs (Level 3) [Member]
Assets :
Money market funds	0	0
Liabilities :
Contingent consideration	$ 1,960

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FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables)

6 Months Ended

Sep. 30, 2014

FAIR VALUE OF FINANCIAL INSTRUMENTS [Abstract]

Fair Value Hierarchy of Financial Instruments

The following table summarizes the fair value hierarchy of our financial instruments as of September 30, 2014 and March 31, 2014 (in thousands):

			Fair Value Measurement Using
	Recorded Amount		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Gains (Losses)
September 30, 2014:
Assets:
Money market funds	$	43,767	$	43,767	$	-	$	-	$	-
Liabilities:
Contingent consideration	$	1,960	$	-	$	-	$	1,960	$	-
March 31, 2014:
Assets:
Money market funds	$	54,267	$	54,267	$	-	$	-	$	-

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SEGMENT REPORTING (Tables)

6 Months Ended

Sep. 30, 2014

SEGMENT REPORTING [Abstract]

Segment Reporting Information, by Reportable Segment

Our reportable segment information was as follows (in thousands):

	Three Months Ended
	September 30, 2014						September 30, 2013
	Technology		Financing		Total		Technology		Financing		Total
Sales of product and services	$	286,584	$	-	$	286,584	$	261,283	$	-	$	261,283
Financing revenue		-		9,059		9,059		-		8,001		8,001
Fee and other income		1,782		47		1,829		1,829		16		1,845
Total revenues		288,366		9,106		297,472		263,112		8,017		271,129
Cost of sales, product and services		230,742		-		230,742		214,854		-		214,854
Direct lease costs		-		2,806		2,806		-		3,495		3,495
Total cost of revenues		230,742		2,806		233,548		214,854		3,495		218,349
Professional and other fees		1,321		256		1,577		1,580		328		1,908
Salaries and benefits		31,963		2,289		34,252		27,244		2,441		29,685
General and administrative expenses		6,703		455		7,158		5,701		358		6,059
Interest and financing costs		19		592		611		26		407		433
Operating expenses		40,006		3,592		43,598		34,551		3,534		38,085
Operating income & earnings before provision for income taxes	$	17,618	$	2,708	$	20,326	$	13,707	$	988	$	14,695
Depreciation and amortization	$	1,081	$	2,709	$	3,790	$	592	$	3,060	$	3,652
Purchases of property, equipment and operating lease equipment	$	744	$	706	$	1,450	$	1,845	$	1,628	$	3,473
Total assets	$	341,893	$	222,553	$	564,446	$	269,149	$	196,152	$	465,301
	Six Months Ended
	September 30, 2014						September 30, 2013
	Technology		Financing		Total		Technology		Financing		Total
Sales of product and services	$	547,940	$	-	$	547,940	$	508,320	$	-	$	508,320
Financing revenue		-		17,933		17,933		-		18,761		18,761
Fee and other income		3,829		74		3,903		3,286		79		3,365
Total revenues		551,769		18,007		569,776		511,606		18,840		530,446
Cost of sales, product and services		443,650		-		443,650		418,184		-		418,184
Direct lease costs		-		5,763		5,763		-		6,748		6,748
Total cost of revenues		443,650		5,763		449,413		418,184		6,748		424,932
Professional and other fees		2,907		503		3,410		4,443		703		5,146
Salaries and benefits		62,633		4,566		67,199		55,142		5,225		60,367
General and administrative expenses		12,461		970		13,431		10,515		545		11,060
Interest and financing costs		58		1,197		1,255		46		847		893
Operating expenses		78,059		7,236		85,295		70,146		7,320		77,466
Operating income		30,060		5,008		35,068		23,276		4,772		28,048
Other income		-		1,434		1,434		-		-		-
Earnings before provision for income taxes	$	30,060	$	6,442	$	36,502	$	23,276	$	4,772	$	28,048
Depreciation and amortization	$	1,975	$	5,656	$	7,631	$	1,244	$	6,115	$	7,359
Purchases of property, equipment and operating lease equipment	$	1,086	$	833	$	1,919	$	3,071	$	3,688	$	6,759
Total assets	$	341,893	$	222,553	$	564,446	$	269,149	$	196,152	$	465,301

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ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

6 Months Ended

Sep. 30, 2014

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, 2014 and 2013 are unaudited, but include all normal and recurring adjustments that, in the opinion of management, are necessary for a fair presentation of our financial position, results of operations, changes in comprehensive income and cash flows for such periods. Operating results for the three and six months ended September 30, 2014 and 2013 are not necessarily indicative of results that may be expected for any other interim period or for the full fiscal year ending March 31, 2015 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, 2014 (“2014 Annual Report”), 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. Estimates are used when accounting for items and matters including, but not limited to, revenue recognition, residual values, vendor consideration, lease classification, goodwill and intangibles, reserves for credit losses, inventory obsolescence, and the recognition and measurement of income tax assets and other provisions and contingencies. 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.

The notes to the consolidated financial statements contained in the 2014 Annual Report include additional discussion of the significant accounting policies and estimates used in the preparation of our consolidated financial statements. There have been no material changes to our significant accounting policies and estimates during the six months ended September 30, 2014.

CONCENTRATIONS OF RISK —A substantial portion of our sales of product and services are from sales of Cisco Systems, Hewlett-Packard, and NetApp products, which represented approximately 56%, 8% and 6%, and 52%, 8% and 6%, respectively, of our technology segment sales of product and services for the three and six months ended September 30, 2014, as compared to 47%, 11%, and 6%, and 51%, 10%, and 7% respectively, of our technology segment sales of product and services for the three and six months ended September 30, 2013. 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 ACCOUNTING PRONOUNCEMENTS NOT YET ADOPTED — In May 2014, FASB issued ASU 2014-09, which will update ASC topic Revenue from Contracts with Customers, which will replace all current US GAAP on this topic. The principle of ASU 2014-09 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which entity expects to be entitled in exchange for those goods or services. The effective date for ASU 2014-09 for us is for fiscal year beginning April 1, 2017. The standard can be applied either retrospectively to each period presented or as a cumulative-effect adjustment as of the date of adoption. We are currently evaluating the impact it will have on our financial statements and disclosures and have not yet selected our planned transition approach.

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ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) (Sales Revenue, Goods and Services [Member])	3 Months Ended		6 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Cisco [Member]
CONCENTRATION OF RISK [Abstract]
Percentage of concentration risk (in hundredths)	56.00%	47.00%	52.00%	51.00%
Hewlett Packard [Member]
CONCENTRATION OF RISK [Abstract]
Percentage of concentration risk (in hundredths)	8.00%	11.00%	8.00%	10.00%
NetApp [Member]
CONCENTRATION OF RISK [Abstract]
Percentage of concentration risk (in hundredths)	6.00%	6.00%	6.00%	7.00%

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EARNINGS PER SHARE (Details) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Basic and diluted shares outstanding [Abstract]
Weighted average shares outstanding-basic (in shares)	7,320	7,976	7,412	7,945
Effect of dilutive shares (in shares)	25	44	49	62
Weighted average shares outstanding-diluted (in shares)	7,345	8,020	7,461	8,007
Calculation of earnings per share - basic [Abstract]
Net earnings	$ 11,952	$ 8,591	$ 21,429	$ 16,441
Net earnings attributable to participating securities	0	66	55	192
Net earnings attributable to common shareholders	11,952	8,525	21,374	16,249
Earnings per share - basic (in dollars per share)	$ 1.63	$ 1.07	$ 2.88	$ 2.05
Calculation of earnings per share - diluted [Abstract]
Net earnings attributable to common shareholders- basic	11,952	8,525	21,374	16,249
Add: undistributed earnings attributable to participating securities	0	0	1	1
Net earnings attributable to common shareholders- diluted	$ 11,952	$ 8,525	$ 21,375	$ 16,250
Earnings per share - diluted (in dollars per share)	$ 1.63	$ 1.06	$ 2.86	$ 2.03

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UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014	Mar. 31, 2014
Current assets:
Cash and cash equivalents	$ 62,941	$ 80,179
Accounts receivable-trade, net	205,852	211,314
Accounts receivable-other, net	33,083	31,902
Inventories-net	30,834	22,629
Financing receivables-net, current	64,649	57,749
Deferred costs	9,894	10,819
Deferred tax assets	3,130	3,742
Other current assets	10,007	6,925
Total current assets	420,390	425,259
Financing receivables and operating leases - net	94,783	85,990
Property, equipment and other assets	7,145	8,013
Goodwill and other intangible assets	42,128	34,583
TOTAL ASSETS	564,446	553,845
Current liabilities:
Accounts payable-equipment	21,788	6,772
Accounts payable-trade	33,164	61,940
Accounts payable-floor plan	120,631	93,416
Salaries and commissions payable	12,993	12,401
Deferred revenue	22,766	21,840
Recourse notes payable - current	280	1,460
Non-recourse notes payable - current	35,262	30,907
Other current liabilities	21,667	15,382
Total current liabilities	268,551	244,118
Recourse notes payable - long term	2,576	2,100
Non-recourse notes payable - long term	30,018	34,421
Deferred tax liability - long term	4,444	5,001
Other liabilities	2,799	1,822
TOTAL LIABILITIES	308,388	287,462
COMMITMENTS AND CONTINGENCIES (Note 7)
STOCKHOLDERS' EQUITY
Preferred stock, $.01 per share par value; 2,000 shares authorized; none issued or outstanding	0	0
Common stock, $.01 per share par value; 25,000 shares authorized; 13,113 issued and 7,437 outstanding at September 30, 2014 and 13,026 issued and 8,036 outstanding at March 31, 2014	131	130
Additional paid-in capital	108,995	105,924
Treasury stock, at cost, 5,677 and 4,990 shares, respectively	(115,276)	(80,494)
Retained earnings	262,066	240,637
Accumulated other comprehensive income-foreign currency translation adjustment	142	186
Total Stockholders' Equity	256,058	266,383
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$ 564,446	$ 553,845

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SEGMENT REPORTING (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014 Segment	Sep. 30, 2013	Jun. 30, 2014	Mar. 31, 2014	Jun. 30, 2013
SEGMENT REPORTING [Abstract]
Number of business segment			2
Segment Reporting Information [Line Items]
Sales of product and services	$ 286,584	$ 261,283	$ 547,940	$ 508,320
Financing revenues	9,059	8,001	17,933	18,761
Fee and other income	1,829	1,845	3,903	3,365
TOTAL REVENUES	297,472	271,129	569,776	530,446
Cost of sales, product and services	230,742	214,854	443,650	418,184
Direct lease costs	2,806	3,495	5,763	6,748
Cost of revenues	233,548	218,349	449,413	424,932
Professional and other fees	1,577	1,908	3,410	5,146
Salaries and benefits	34,252	29,685	67,199	60,367
General and administrative expenses	7,158	6,059	13,431	11,060
Interest and financing costs	611	433	1,255	893
Operating expenses	43,598	38,085	85,295	77,466
Operating income	20,326	14,695	35,068	28,048
Other income	0	0	1,434	0
EARNINGS BEFORE PROVISION FOR INCOME TAXES	20,326	14,695	36,502	28,048
Depreciation and amortization	3,790	3,652	7,631	7,359
Purchases of property, equipment and operating lease equipment	1,450	3,473	1,919	6,759
Total assets	564,446	465,301	564,446	465,301	564,446	553,845	465,301
Operating Segments [Member] | Technology [Member]
Segment Reporting Information [Line Items]
Sales of product and services	286,584	261,283	547,940	508,320
Financing revenues	0	0	0	0
Fee and other income	1,782	1,829	3,829	3,286
TOTAL REVENUES	288,366	263,112	551,769	511,606
Cost of sales, product and services	230,742	214,854	443,650	418,184
Direct lease costs	0	0	0	0
Cost of revenues	230,742	214,854	443,650	418,184
Professional and other fees	1,321	1,580	2,907	4,443
Salaries and benefits	31,963	27,244	62,633	55,142
General and administrative expenses	6,703	5,701	12,461	10,515
Interest and financing costs	19	26	58	46
Operating expenses	40,006	34,551	78,059	70,146
Operating income	17,618	13,707	30,060	23,276
Other income	0	0	0	0
EARNINGS BEFORE PROVISION FOR INCOME TAXES	17,618	13,707	30,060	23,276
Depreciation and amortization	1,081	592	1,975	1,244
Purchases of property, equipment and operating lease equipment	744	1,845	1,086	3,071
Total assets	341,893	269,149	341,893	269,149	341,893		269,149
Operating Segments [Member] | Financing [Member]
Segment Reporting Information [Line Items]
Sales of product and services	0	0	0	0
Financing revenues	9,059	8,001	17,933	18,761
Fee and other income	47	16	74	79
TOTAL REVENUES	9,106	8,017	18,007	18,840
Cost of sales, product and services	0	0	0	0
Direct lease costs	2,806	3,495	5,763	6,748
Cost of revenues	2,806	3,495	5,763	6,748
Professional and other fees	256	328	503	703
Salaries and benefits	2,289	2,441	4,566	5,225
General and administrative expenses	455	358	970	545
Interest and financing costs	592	407	1,197	847
Operating expenses	3,592	3,534	7,236	7,320
Operating income	2,708	988	5,008	4,772
Other income	0	0	1,434	0
EARNINGS BEFORE PROVISION FOR INCOME TAXES	2,708	988	6,442	4,772
Depreciation and amortization	2,709	3,060	5,656	6,115
Purchases of property, equipment and operating lease equipment	706	1,628	833	3,688
Total assets	$ 222,553	$ 196,152	$ 222,553	$ 196,152	$ 222,553		$ 196,152

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UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Sep. 30, 2014	Sep. 30, 2013
Cash Flows From Operating Activities:
Net earnings	$ 21,429	$ 16,441
Adjustments to reconcile net earnings to net cash (used in) provided by operating activities:
Depreciation and amortization	7,631	7,359
Provision for credit losses, inventory obsolescence and sales returns	245	211
Share-based compensation expense	2,247	1,954
Excess tax benefit from share-based compensation	(824)	(1,536)
Payments from lessees directly to lenders-operating leases	(4,445)	(4,062)
Gain on disposal of property, equipment and operating lease equipment	(2,120)	(1,001)
Gain on sale of financing receivables	(3,179)	(4,025)
Gain on settlement	(1,434)	0
Other	50	42
Changes in:
Accounts receivable - trade	13,236	12,897
Accounts receivable - other	(854)	(4,087)
Inventories	(7,006)	(5,043)
Financing receivables	(14,187)	(8,193)
Deferred costs, other intangible assets and other assets	1,333	1,513
Accounts payable-equipment	(162)	1,700
Accounts payable-trade	(29,315)	(222)
Salaries and commissions payable, deferred revenue and other liabilities	6,360	(8,387)
Net cash (used in) provided by operating activities	(10,995)	5,561
Cash Flows From Investing Activities:
Maturities of short-term investments	0	982
Proceeds from Sale of Held-to-maturity Securities	2,544	0
Proceeds from sale of property, equipment and operating lease equipment	5,751	1,929
Purchases of property, equipment and operating lease equipment	(1,919)	(6,759)
Purchases of assets to be leased or financed	(10,000)	(7,032)
Issuance of financing receivables	(51,163)	(45,847)
Repayments of financing receivables	28,082	16,031
Proceeds from sale of financing receivables	12,341	15,456
Premiums paid on life insurance	0	(93)
Cash used in acquisitions, net of cash acquired	(7,818)	0
Net cash used in investing activities	(22,182)	(25,333)
Cash Flows From Financing Activities:
Borrowings of non-recourse and recourse notes payable	30,104	12,779
Repayments of non-recourse and recourse notes payable	(802)	(1,135)
Repurchase of common stock	(34,782)	(5,901)
Dividends paid	(90)	(105)
Proceeds from issuance of capital stock through option exercise	0	559
Payments of contingent consideration	0	(1,027)
Excess tax benefit from share based compensation	824	1,536
Net borrowings (repayments) on floor plan facility	20,694	14,042
Net cash provided by financing activities	15,948	20,748
Effect of exchange rate changes on cash	(9)	0
Net Increase in Cash and Cash Equivalents	(17,238)	976
Cash and Cash Equivalents, Beginning of Period	80,179	52,720
Cash and Cash Equivalents, End of Period	62,941	53,696
Supplemental Disclosures of Cash Flow Information:
Cash paid for interest	128	15
Cash paid for income taxes	12,770	10,334
Schedule of Non-Cash Investing and Financing Activities:
Purchase of property and equipment included in accounts payable	232	71
Purchase of operating lease equipment included in accounts payable	103	241
Purchase of assets to be leased or financed included in accounts payable	18,578	10,664
Proceeds from sales of operating lease equipment included in accounts receivable	910	12
Repayments of non-recourse and recourse notes payable	19,171	9,715
Vesting of share-based compensation	6,407	7,769
Origination and concurrent sale of financing receivables	47,213	80,769
Contingent consideration	$ 1,960	$ 0

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RESERVES FOR CREDIT LOSSES (Details) (USD $)	6 Months Ended
	Sep. 30, 2014		Sep. 30, 2013	Mar. 31, 2014
Activity in reserves for credit losses [Roll Forward]
Balance	$ 5,752,000		$ 5,129,000
Provision for bad debts	221,000		191,000
Write-offs, net of recoveries	(153,000)		(121,000)
Balance	5,820,000		5,199,000
Reserve for credit losses: [Abstract]
Ending balance: individually evaluated for impairment	3,600,000
Accounts Receivable [Member]
Activity in reserves for credit losses [Roll Forward]
Balance	1,364,000		1,147,000
Provision for bad debts	(99,000)		152,000
Write-offs, net of recoveries	(122,000)		(121,000)
Balance	1,143,000		1,178,000
Notes Receivable [Member]
Activity in reserves for credit losses [Roll Forward]
Balance	3,364,000	[1]	3,137,000
Provision for bad debts	309,000		(14,000)
Write-offs, net of recoveries	0		0
Balance	3,673,000	[1]	3,123,000
Reserve for credit losses: [Abstract]
Ending balance: collectively evaluated for impairment	552,000			265,000
Ending balance: individually evaluated for impairment	3,121,000			3,099,000
Minimum lease payments: [Abstract]
Ending balance: collectively evaluated for impairment	56,292,000			39,869,000
Ending balance: individually evaluated for impairment	3,453,000			3,838,000
Ending balance	59,745,000			43,707,000
Lease-Related Receivables [Member]
Activity in reserves for credit losses [Roll Forward]
Balance	1,024,000	[1]	845,000
Provision for bad debts	11,000		53,000
Write-offs, net of recoveries	(31,000)		0
Balance	1,004,000	[1]	898,000
Reserve for credit losses: [Abstract]
Ending balance: collectively evaluated for impairment	788,000			852,000
Ending balance: individually evaluated for impairment	216,000			172,000
Minimum lease payments: [Abstract]
Ending balance: collectively evaluated for impairment	86,086,000			81,114,000
Ending balance: individually evaluated for impairment	203,000			437,000
Ending balance	86,289,000			81,551,000
Customer [Member]
Activity in reserves for credit losses [Roll Forward]
Balance				3,100,000
Balance	3,200,000			3,100,000
Reserve for credit losses: [Abstract]
Ending balance: individually evaluated for impairment	3,200,000
Minimum lease payments: [Abstract]
Notes Receivable	$ 3,200,000			$ 3,400,000

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

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ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

6 Months Ended

Sep. 30, 2014

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.

INTERIM FINANCIAL STATEMENTS

INTERIM FINANCIAL STATEMENTS — The condensed consolidated financial statements for the three and six months ended September 30, 2014 and 2013 are unaudited, but include all normal and recurring adjustments that, in the opinion of management, are necessary for a fair presentation of our financial position, results of operations, changes in comprehensive income and cash flows for such periods. Operating results for the three and six months ended September 30, 2014 and 2013 are not necessarily indicative of results that may be expected for any other interim period or for the full fiscal year ending March 31, 2015 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, 2014 (“2014 Annual Report”), which should be read in conjunction with these interim financial statements.

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. Estimates are used when accounting for items and matters including, but not limited to, revenue recognition, residual values, vendor consideration, lease classification, goodwill and intangibles, reserves for credit losses, inventory obsolescence, and the recognition and measurement of income tax assets and other provisions and contingencies. 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.

The notes to the consolidated financial statements contained in the 2014 Annual Report include additional discussion of the significant accounting policies and estimates used in the preparation of our consolidated financial statements. There have been no material changes to our significant accounting policies and estimates during the six months ended September 30, 2014.

CONCENTRATIONS OF RISK

CONCENTRATIONS OF RISK —A substantial portion of our sales of product and services are from sales of Cisco Systems, Hewlett-Packard, and NetApp products, which represented approximately 56%, 8% and 6%, and 52%, 8% and 6%, respectively, of our technology segment sales of product and services for the three and six months ended September 30, 2014, as compared to 47%, 11%, and 6%, and 51%, 10%, and 7% respectively, of our technology segment sales of product and services for the three and six months ended September 30, 2013. 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

RECENTLY ACCOUNTING PRONOUNCEMENTS NOT YET ADOPTED — In May 2014, FASB issued ASU 2014-09, which will update ASC topic Revenue from Contracts with Customers, which will replace all current US GAAP on this topic. The principle of ASU 2014-09 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which entity expects to be entitled in exchange for those goods or services. The effective date for ASU 2014-09 for us is for fiscal year beginning April 1, 2017. The standard can be applied either retrospectively to each period presented or as a cumulative-effect adjustment as of the date of adoption. We are currently evaluating the impact it will have on our financial statements and disclosures and have not yet selected our planned transition approach.

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RESERVES FOR CREDIT LOSSES, CQR (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014	Mar. 31, 2014
Investment in direct financing and sales-type leases that are past due [Member]
Financing Receivable, Recorded Investment [Line Items]
31-60 Days Past Due	$ 94	$ 227
61-90 Days Past Due	53	92
Greater Than 90 Days Past Due	144	185
Total Past Due	291	504
Current	798	588
Unbilled Minimum Lease Payments	85,199	80,459
Total Minimum Lease Payments	86,289	81,551
Unearned Income	(5,551)	(5,346)
Non-Recourse Notes Payable	(35,773)	(38,115)
Net Credit Exposure	44,964	38,090
Notes Receivable [Member]
Financing Receivable, Recorded Investment [Line Items]
31-60 Days Past Due	1,000	0
61-90 Days Past Due	5	205
Greater Than 90 Days Past Due	2,509	939
Total Past Due	3,514	1,144
Current	802	2,317
Unbilled Minimum Lease Payments	55,429	40,246
Total Minimum Lease Payments	59,745	43,707
Non-Recourse Notes Payable	(28,043)	(23,132)
Net Credit Exposure	31,702	20,575
High CQR [Member] | Investment in direct financing and sales-type leases that are past due [Member]
Financing Receivable, Recorded Investment [Line Items]
31-60 Days Past Due	42	194
61-90 Days Past Due	5	35
Greater Than 90 Days Past Due	130	106
Total Past Due	177	335
Current	232	502
Unbilled Minimum Lease Payments	51,342	42,159
Total Minimum Lease Payments	51,751	42,996
Unearned Income	(2,828)	(1,890)
Non-Recourse Notes Payable	(18,031)	(17,406)
Net Credit Exposure	30,892	23,700
High CQR [Member] | Notes Receivable [Member]
Financing Receivable, Recorded Investment [Line Items]
31-60 Days Past Due	829	0
61-90 Days Past Due	5	205
Greater Than 90 Days Past Due	1,802	148
Total Past Due	2,636	353
Current	521	2,317
Unbilled Minimum Lease Payments	38,137	30,249
Total Minimum Lease Payments	41,294	32,919
Non-Recourse Notes Payable	(23,463)	(19,641)
Net Credit Exposure	17,831	13,278
Average CQR [Member] | Investment in direct financing and sales-type leases that are past due [Member]
Financing Receivable, Recorded Investment [Line Items]
31-60 Days Past Due	52	33
61-90 Days Past Due	48	57
Greater Than 90 Days Past Due	14	18
Total Past Due	114	108
Current	566	86
Unbilled Minimum Lease Payments	33,654	37,924
Total Minimum Lease Payments	34,335	38,118
Unearned Income	(2,704)	(3,401)
Non-Recourse Notes Payable	(17,742)	(20,709)
Net Credit Exposure	13,888	14,008
Average CQR [Member] | Notes Receivable [Member]
Financing Receivable, Recorded Investment [Line Items]
31-60 Days Past Due	171	0
61-90 Days Past Due	0	0
Greater Than 90 Days Past Due	0	0
Total Past Due	171	0
Current	281	0
Unbilled Minimum Lease Payments	14,546	6,950
Total Minimum Lease Payments	14,998	6,950
Non-Recourse Notes Payable	(4,580)	(3,491)
Net Credit Exposure	10,418	3,459
Low CQR [Member] | Investment in direct financing and sales-type leases that are past due [Member]
Financing Receivable, Recorded Investment [Line Items]
31-60 Days Past Due	0	0
61-90 Days Past Due	0	0
Greater Than 90 Days Past Due	0	61
Total Past Due	0	61
Current	0	0
Unbilled Minimum Lease Payments	203	376
Total Minimum Lease Payments	203	437
Unearned Income	(19)	(55)
Non-Recourse Notes Payable	0	0
Net Credit Exposure	184	382
Low CQR [Member] | Notes Receivable [Member]
Financing Receivable, Recorded Investment [Line Items]
31-60 Days Past Due	0	0
61-90 Days Past Due	0	0
Greater Than 90 Days Past Due	707	791
Total Past Due	707	791
Current	0	0
Unbilled Minimum Lease Payments	2,746	3,047
Total Minimum Lease Payments	3,453	3,838
Non-Recourse Notes Payable	0	0
Net Credit Exposure	$ 3,453	$ 3,838

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GOODWILL AND OTHER INTANGIBLE ASSETS (Tables)

6 Months Ended

Sep. 30, 2014

GOODWILL AND OTHER INTANGIBLE ASSETS [Abstract]

Components of Goodwill and Other Intangible Assets

Our goodwill and other intangible assets consist of the following (in thousands):

	September 30, 2014							March 31, 2014
	Gross Carrying Amount		Accumulated Amortization / Impairment Loss			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization / Impairment Loss			Net Carrying Amount
Goodwill	$	42,834	$	(8,673	)	$	34,161	$	38,243	$	(8,673	)	$	29,570
Customer relationships & other intangibles		11,923		(5,416	)		6,507		8,013		(4,671	)		3,342
Capitalized software development		2,668		(1,208	)		1,460		2,616		(945	)		1,671
Total	$	57,425	$	(15,297	)	$	42,128	$	48,872	$	(14,289	)	$	34,583

Summary of Goodwill Allocated to Reporting Units

The following table summarizes the amount of goodwill allocated to our reporting units (in thousands):

Reporting Unit	September 30, 2014		March 31, 2014
Technology	$	33,072	$	28,481
Software Document Management		1,089		1,089

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UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (USD $) In Thousands	Common Stock [Member]	Additional Paid-in Capital [Member]	Treasury Stock [Member]	Retained Earnings [Member]	Accumulated Other Comprehensive Income [Member]	Total
Balance at Mar. 31, 2014	$ 130	$ 105,924	$ (80,494)	$ 240,637	$ 186	$ 266,383
Balance (in shares) at Mar. 31, 2014	8,036					8,036
Excess tax benefit of share based compensation	0	824	0	0	0	824
Issuance of restricted stock awards	1	0	0	0	0	1
Issuance of restricted stock awards (in shares)	88
Share-based compensation		2,247	0	0	0	2,247
Repurchase of common stock	0	0	(34,782)	0	0	(34,782)
Repurchase of common stock (in shares)	(686)
Net earnings	0	0	0	21,429	0	21,429
Foreign currency translation adjustment	0	0	0	0	(44)	(44)
Balance at Sep. 30, 2014	$ 131	$ 108,995	$ (115,276)	$ 262,066	$ 142	$ 256,058
Balance (in shares) at Sep. 30, 2014	7,437					7,437

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UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) In Thousands, except Per Share data, unless otherwise specified	Sep. 30, 2014	Mar. 31, 2014
STOCKHOLDERS' EQUITY
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized (in shares)	2,000	2,000
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	25,000
Common stock, shares issued (in shares)	13,113	13,026
Common stock, shares outstanding (in shares)	7,437	8,036
Treasury stock, shares (in shares)	5,677	4,990

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SHARE-BASED COMPENSATION

6 Months Ended

Sep. 30, 2014

SHARE-BASED COMPENSATION [Abstract]

SHARE-BASED COMPENSATION

10. SHARE-BASED COMPENSATION

Share-Based Plans

As of September 30, 2014 and March 31, 2014, we had share-based awards outstanding under the followingplans: (1) the 2008 Non-Employee Director Long-Term Incentive Plan (“2008 Director LTIP”), (2) the 2008 Employee Long-Term Incentive Plan (“2008 Employee LTIP”) and (3) the 2012 Employee Long-Term Incentive Plan ("2012 Employee LTIP"). All the share-based plans define fair market value as 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 2008 Director LTIP, the 2008 Employee LTIP, and the 2012 Employee LTIP discussed above, refer to our 2014 Annual Report.

Stock Option Activity

As of September 30, 2014 and 2013, we had no outstanding shares of stock options and there were no options granted or exercised during the six months ended September 30, 2014. During the six months ended September 30, 2013 there were no options granted and 40,000 options exercised.

Restricted Stock Activity

For the six months ended September 30, 2014, we granted 9,390 restricted shares under the 2008 Director LTIP, and 78,165 restricted shares under the 2012 Employee LTIP. For the six months ended September 30, 2013, we granted 8,520 restricted shares under the 2008 Director LTIP, and 77,115 restricted shares under the 2012 Employee LTIP. A summary of the restricted shares is as follows:

	Number of Shares			Weighted Average Grant-date Fair Value
Nonvested April 1, 2014		200,120		$	41.11
Granted		87,555		$	57.12
Vested		(111,296	)	$	35.57
Nonvested September 30, 2014		176,379		$	52.67

Upon each vesting period of the restricted stock awards, employees are subject to minimum tax withholding obligations. Under the 2008 Employee LTIP and 2012 Employee LTIP, we may purchase a sufficient number of shares due to the participant to satisfy their minimum tax withholding on employee stock awards.

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, which is based on historical experience. There are no additional conditions for vesting other than service conditions. During the three months ended September 30, 2014 and 2013, we recognized $1.2 million and $1.1 million, respectively, of total share-based compensation expense. During the six months ended September 30, 2014 and 2013, we recognized $2.2 million and $1.9 million, respectively, of total share-based compensation expense. Unrecognized compensation expense related to non-vested restricted stock was $7.9 million, which will be fully recognized over the next thirty-three months.

We also provide our employees with a contributory 401(k) 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, 2014 and 2013, our estimated contribution expense for the plan was $302 thousand and $147 thousand, respectively.  For the six months ended September 30, 2014 and 2013, our estimated contribution expense was $623 thousand and $524 thousand, respectively.

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Document and Entity Information	6 Months Ended
	Sep. 30, 2014	Oct. 31, 2014
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		7,420,000
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	Q2
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2014

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INCOME TAXES

6 Months Ended

Sep. 30, 2014

INCOME TAXES [Abstract]

INCOME TAXES

11. INCOME TAXES

We recognize interest and penalties for uncertain tax positions. As of September 30, 2014, our gross liability related to uncertain tax positions was $149 thousand. At September 30, 2014, if the unrecognized tax benefits of $149 thousand were to be recognized, including the effect of interest, penalties and federal tax benefit, the impact would be $194 thousand. We also recognize accrued interest and penalties related to unrecognized tax benefits as a component of tax expense. We recorded interest expense of $1 thousand and $4 thousand for the three months ended September 30, 2014 and 2013, respectively and $2 thousand and $9 thousand for the six months ended September 30, 2014 and 2013, respectively. We did not recognize any additional penalties. We had $67 thousand and $206 thousand accrued for the payment of interest at September 30, 2014 and 2013, respectively.

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UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS [Abstract]
Sales of product and services	$ 286,584	$ 261,283	$ 547,940	$ 508,320
Financing revenue	9,059	8,001	17,933	18,761
Fee and other income	1,829	1,845	3,903	3,365
TOTAL REVENUES	297,472	271,129	569,776	530,446
Cost of sales, product and services	230,742	214,854	443,650	418,184
Direct lease costs	2,806	3,495	5,763	6,748
Cost of revenues	233,548	218,349	449,413	424,932
Professional and other fees	1,577	1,908	3,410	5,146
Salaries and benefits	34,252	29,685	67,199	60,367
General and administrative expenses	7,158	6,059	13,431	11,060
Interest and financing costs	611	433	1,255	893
Operating expenses	43,598	38,085	85,295	77,466
OPERATING INCOME	20,326	14,695	35,068	28,048
Other income	0	0	1,434	0
EARNINGS BEFORE PROVISION FOR INCOME TAXES	20,326	14,695	36,502	28,048
PROVISION FOR INCOME TAXES	8,374	6,104	15,073	11,607
NET EARNINGS	$ 11,952	$ 8,591	$ 21,429	$ 16,441
NET EARNINGS PER COMMON SHARE-BASIC (In dollars per share)	$ 1.63	$ 1.07	$ 2.88	$ 2.05
NET EARNINGS PER COMMON SHARE-DILUTED (In dollars per share)	$ 1.63	$ 1.06	$ 2.86	$ 2.03
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING-BASIC (In shares)	7,320	7,976	7,412	7,945
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING-DILUTED (In shares)	7,345	8,020	7,461	8,007

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PROPERTY, EQUIPMENT OTHER ASSETS AND LIABILITIES

6 Months Ended

Sep. 30, 2014

PROPERTY, EQUIPMENT OTHER ASSETS AND LIABILITIES [Abstract]

PROPERTY, EQUIPMENT OTHER ASSETS AND LIABILITIES

5. PROPERTY, EQUIPMENT OTHER ASSETS AND LIABILITIES

Our property, equipment, other assets and liabilities consist of the following (in thousands):

	September 30, 2014		March 31, 2014
Other current assets:
Deposits & funds held in escrow	$	6,610	$	995
Prepaid assets		3,079		2,865
Supplemental benefit plan investments		-		2,544
Other		318		521
Total other current assets	$	10,007	$	6,925
Other assets:
Deferred costs	$	1,238	$	1,591
Property and equipment, net		4,636		4,293
Other		1,271		2,129
Other assets - long term	$	7,145	$	8,013

	September 30, 2014		March 31, 2014
Other current liabilities
Accrued expenses	$	10,192	$	5,322
Deferred compensation		222		2,544
Other		11,253		7,516
Total other current liabilities	$	21,667	$	15,382
Other liabilities
Deferred revenue	$	1,786	$	1,822
Other		1,013		-
Total other liabilities - long term	$	2,799	$	1,822

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RESERVES FOR CREDIT LOSSES

6 Months Ended

Sep. 30, 2014

RESERVES FOR CREDIT LOSSES [Abstract]

RESERVES FOR CREDIT LOSSES

4. RESERVES FOR CREDIT LOSSES

Activity in our reserves for credit losses for the six months ended September 30, 2014 and 2013 were as follows (in thousands):

	Accounts Receivable			Notes Receivable			Lease-Related Receivables			Total
Balance April 1, 2014	$	1,364		$	3,364		$	1,024		$	5,752
Provision for credit losses		(99	)		309			11			221
Write-offs and other		(122	)		-			(31	)		(153	)
Balance September 30, 2014	$	1,143		$	3,673		$	1,004		$	5,820
	Accounts Receivable			Notes Receivable			Lease-Related Receivables			Total
Balance April 1, 2013	$	1,147		$	3,137		$	845		$	5,129
Provision for credit losses		152			(14	)		53			191
Write-offs and other		(121	)		-			-			(121	)
Balance September 30, 2013	$	1,178		$	3,123		$	898		$	5,199

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, 2014				March 31, 2014
	Notes Receivable		Lease-Related Receivables		Notes Receivable		Lease-Related Receivables
Reserves for credit losses:
Ending balance: collectively evaluated for impairment	$	552	$	788	$	265	$	852
Ending balance: individually evaluated for impairment		3,121		216		3,099		172
Ending balance	$	3,673	$	1,004	$	3,364	$	1,024
Minimum payments:
Ending balance: collectively evaluated for impairment	$	56,292	$	86,086	$	39,869	$	81,114
Ending balance: individually evaluated for impairment		3,453		203		3,838		437
Ending balance	$	59,745	$	86,289	$	43,707	$	81,551

The net credit exposure for the notes receivable and lease related receivables evaluated individually for impairment as of September 30, 2014 was $3.6 million. As of September 30, 2014, we had $3.2 million of notes and lease-related receivables from one customer that filed for bankruptcy in May, 2012 and total reserves for credit losses of $3.2 million, which represents our estimated probable loss. As of March 31, 2014, we had $3.4 million of notes receivables from this customer and total reserves for credit losses of $3.1 million. 

As of September 30, 2014, 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, 2014
High CQR	$	42	$	5	$	130	$	177	$	232	$	51,342	$	51,751	$	(2,828	)	$	(18,031	)	$	30,892
Average CQR		52		48		14		114		566		33,654		34,335		(2,704	)		(17,742	)		13,888
Low CQR		-		-		-		-		-		203		203		(19	)		-			184
Total		94		53		144		291		798		85,199		86,289		(5,551	)		(35,773	)		44,964
March 31, 2014
High CQR	$	194	$	35	$	106	$	335	$	502	$	42,159	$	42,996	$	(1,890	)	$	(17,406	)	$	23,700
Average CQR		33		57		18		108		86		37,924		38,118		(3,401	)		(20,709	)		14,008
Low CQR		-		-		61		61		-		376		437		(55	)		-			382
Total		227		92		185		504		588		80,459		81,551		(5,346	)		(38,115	)		38,090

As of September 30, 2014, the age of the recorded notes receivable balance disaggregated based on our internally assigned 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 Notes Receivable		Total Notes Receivable		Non-Recourse Notes Payable			Net Credit Exposure
September 30, 2014
High CQR	$	829	$	5	$	1,802	$	2,636	$	521	$	38,137	$	41,294	$	(23,463	)	$	17,831
Average CQR		171		-		-		171		281		14,546		14,998		(4,580	)		10,418
Low CQR		-		-		707		707		-		2,746		3,453		-			3,453
Total		1,000		5		2,509		3,514		802		55,429		59,745		(28,043	)		31,702
March 31, 2014
High CQR	$	-	$	205	$	148	$	353	$	2,317	$	30,249	$	32,919	$	(19,641	)	$	13,278
Average CQR		-		-		-		-		-		6,950		6,950		(3,491	)		3,459
Low CQR		-		-		791		791		-		3,047		3,838		-			3,838
Total		-		205		939		1,144		2,317		40,246		43,707		(23,132	)		20,575

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 25% - 100% for customers with low CQR, which includes customers in bankruptcy.

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FINANCING RECEIVABLES AND OPERATING LEASES (Tables)

6 Months Ended

Sep. 30, 2014

FINANCING RECEIVABLES AND OPERATING LEASES [Abstract]

Components of Notes Receivable Net and Investments in Leases

Our financing receivables, net consist of the following (in thousands):

September 30, 2014	Notes Receivables			Lease-Related Receivables			Total Financing Receivables
Minimum payments	$	59,745		$	86,289		$	146,034
Estimated unguaranteed residual value (1)		-			8,184			8,184
Initial direct costs, net of amortization (2)		409			528			937
Unearned income		-			(6,444	)		(6,444	)
Reserve for credit losses (3)		(3,673	)		(1,004	)		(4,677	)
Total, net	$	56,481		$	87,553		$	144,034
Reported as:
Current	$	27,043		$	37,606		$	64,649
Long-term		29,438			49,947			79,385
Total, net	$	56,481		$	87,553		$	144,034

(1) Includes estimated unguaranteed residual values of $3,287 thousand 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 $548 thousand.

(3) For details on reserve for credit losses, refer to Note 4, “Reserves for Credit Losses.”

March 31, 2014	Notes Receivables			Lease-Related Receivables			Total Financing Receivables
Minimum payments	$	43,707		$	81,551		$	125,258
Estimated unguaranteed residual value (1)		-			8,275			8,275
Initial direct costs, net of amortization (2)		354			537			891
Unearned income		-			(6,285	)		(6,285	)
Reserve for credit losses (3)		(3,364	)		(1,024	)		(4,388	)
Total, net	$	40,697		$	83,054		$	123,751
Reported as:
Current	$	22,109		$	35,640		$	57,749
Long-term		18,588			47,414			66,002
Total, net	$	40,697		$	83,054		$	123,751

(1) Includes estimated unguaranteed residual values of $3,034 thousand 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 $525 thousand.

(3) For details on reserve for credit losses, refer to Note 4, “Reserves for Credit Losses.”

Investment in Operating Lease Equipment - Net

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

	September 30, 2014			March 31, 2014
Cost of equipment under operating leases	$	31,072		$	40,513
Accumulated depreciation		(15,674	)		(20,525	)
Investment in operating lease equipment—net (1)	$	15,398		$	19,988

(1) These totals include estimated unguaranteed residual values of $3,842 thousand and $5,610 thousand as of September 30, 2014 and March 31, 2014, respectively.

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FAIR VALUE OF FINANCIAL INSTRUMENTS

6 Months Ended

Sep. 30, 2014

FAIR VALUE OF FINANCIAL INSTRUMENTS [Abstract]

FAIR VALUE OF FINANCIAL INSTRUMENTS

12. 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. The following table summarizes the fair value hierarchy of our financial instruments as of September 30, 2014 and March 31, 2014 (in thousands):

			Fair Value Measurement Using
	Recorded Amount		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Gains (Losses)
September 30, 2014:
Assets:
Money market funds	$	43,767	$	43,767	$	-	$	-	$	-
Liabilities:
Contingent consideration	$	1,960	$	-	$	-	$	1,960	$	-
March 31, 2014:
Assets:
Money market funds	$	54,267	$	54,267	$	-	$	-	$	-

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EARNINGS PER SHARE

6 Months Ended

Sep. 30, 2014

EARNINGS PER SHARE [Abstract]

EARNINGS PER SHARE

8. EARNINGS PER SHARE

Basic earnings per share is computed by dividing net earnings attributable to common shares by the weighted average number of common shares outstanding for the period. Diluted net earnings per share include the potential dilution of securities that could participate in our earnings, but not securities that are anti-dilutive. Unvested shares of restricted stock awards (“RSAs”), which contain non-forfeitable rights to dividends, whether paid or unpaid are considered participating securities because their holders have the right to participate in earnings with common stockholders. We use the two-class method to allocate net income between common shares and other participating securities. As of September 30, 2014, we no longer have any unvested shares of RSAs that contained non-forfeitable rights to dividends. In addition, we no longer grant RSAs that contain non-forfeitable rights to dividends.

The following table provides a reconciliation of the numerators and denominators used to calculate basic and diluted net earnings per common share as disclosed in our unaudited condensed consolidated statements of operations for the three and six months ended September 30, 2014 and September 30, 2013 (in thousands, except per share data).

	Three months ended September 30,				Six months ended September 30,
	2014		2013		2014		2013
Basic and diluted shares outstanding
Weighted average common shares outstanding — basic		7,320		7,976		7,412		7,945
Effect of dilutive shares		25		44		49		62
Weighted average common shares outstanding — diluted		7,345		8,020		7,461		8,007
Calculation of earnings per share - basic
Net earnings	$	11,952	$	8,591	$	21,429	$	16,441
Net earnings attributable to participating securities		-		66		55		192
Net earnings attributable to common shareholders	$	11,952	$	8,525	$	21,374	$	16,249
Earnings per share - basic	$	1.63	$	1.07	$	2.88	$	2.05
Calculation of earnings per share - diluted
Net earnings attributable to common shareholders— basic	$	11,952	$	8,525	$	21,374	$	16,249
Add: undistributed earnings attributable to participating securities		-		-		1		1
Net earnings attributable to common shareholders— diluted	$	11,952	$	8,525	$	21,375	$	16,250
Earnings per share - diluted	$	1.63	$	1.06	$	2.86	$	2.03

As of both September 30, 2013 and 2014, we had no unexercised stock options.

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NOTES PAYABLE AND CREDIT FACILITY

6 Months Ended

Sep. 30, 2014

NOTES PAYABLE AND CREDIT FACILITY [Abstract]

NOTES PAYABLE AND CREDIT FACILITY

6. NOTES PAYABLE AND CREDIT FACILITY

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

	September 30, 2014		March 31, 2014
Recourse notes payable with interest rates ranging from 2.24% and 4.22% at September 30, 2014 and 2.24% and 4.84% at March 31, 2014.
Current	$	280	$	1,460
Long-term		2,576		2,100
Total recourse notes payable	$	2,856	$	3,560
Non-recourse notes payable secured by financing receivables and investments in operating leases with interest rates ranging from 2.00% to 10.00% at September 30, 2014 and ranging from 2.00% to 11.24% as of March 31, 2014.
Current	$	35,262	$	30,907
Long-term		30,018		34,421
Total non-recourse notes payable	$	65,280	$	65,328

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 customer under the leases or notes receivable that collateralize the notes payable.  The weighted average interest rate for our non-recourse notes payable was 3.31% and 3.46%, as of September 30, 2014 and March 31, 2014, respectively. The weighted average interest rate for our recourse notes payable was 2.93% and 3.85%, as of September 30, 2014 and March 31, 2014, respectively. Under recourse financing, in the event of a default by a customer, the lender has recourse to the customer, the assets serving as collateral, and us. Under non-recourse financing, in the event of a default by a customer, the lender generally only has recourse against the customer, and the assets serving as collateral, but not against us.

In May 2014, we entered into an agreement to repurchase the rights, title, and interest to payments due under a financing agreement. This financing agreement was previously assigned to a third party financial institution and accounted for as a secured borrowing. In conjunction with the repurchase agreement, we recognized a gain of $1.4 million, which is presented within other income in our unaudited condensed consolidated statement of operations.

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COMMITMENTS AND CONTINGENCIES

6 Months Ended

Sep. 30, 2014

COMMITMENTS AND CONTINGENCIES [Abstract]

COMMITMENTS AND CONTINGENCIES

7. COMMITMENTS AND CONTINGENCIES

Legal Proceedings

On May 19, 2009, we filed a complaint (the “Lawson litigation”) 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. Lawson filed an appeal. On November 21, 2012, the United States Court of Appeals for the Federal Circuit (the “Appeals Court”) reversed in part, vacated in part, affirmed in part, and remanded. The Appeals Court upheld the finding that the patent claims were not invalid and upheld, in part, the finding of infringement. On June 11, 2013, consistent with the Appeals Court’s decision, the trial court issued an Order modifying the injunction so that it would continue in full effect with respect to those configurations of Lawson’s electronic procurement systems that the Appeals Court affirmed were infringing.

On August 16, 2013, the trial court issued an order finding, by clear and convincing evidence, that Lawson was in contempt of the trial court’s May 23, 2011, injunction, entering judgment in our favor in the amount of $18.2 million, and ordering that Lawson pay to the court a daily coercive fine. Lawson filed an appeal and posted a bond, and collection of the judgment and imposition of the coercive fine were stayed pending the appeal.

Patent litigation is extremely complex and issues regarding a patent’s validity can arise even subsequent to a patent’s issuance and a court’s enforcement thereof. On April 3, 2014, the United States Patent and Trademark Office issued a notice canceling the patent at issue in the Lawson litigation. On July 25, 2014, the Appeals Court issued an Opinion vacating the injunction and contempt order. We have filed a Petition for Rehearing, and are awaiting the court’s response.

These types of cases are complex in nature, are likely to have significant expenses associated with them, and we cannot predict when any litigation will be resolved, 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.

We filed a claim in a class action suit in the United States District Court for the Northern District of California which alleged that ten groups of companies conspired to fix, raise, maintain or stabilize prices of certain flat panels used in many flat screen televisions, monitors and notebook computers. The Claims Administrator found that we had a valid claim, and on August 6, 2014, issued to us a Notice of Claim Final Determination. On October 20, 2014, the court issued an order directing that approved claims be paid. On October 31, 2014, we received payment in the amount of $6.2 million, which will be recognized in our statement of operations as other income in our third quarter of fiscal 2015.

Other Matters

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, claims related to alleged violations of laws and regulations, and claims relating to alleged security or privacy breaches. 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.

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STOCKHOLDERS' EQUITY

6 Months Ended

Sep. 30, 2014

STOCKHOLDERS' EQUITY [Abstract]

STOCKHOLDERS' EQUITY

9. STOCKHOLDERS’ EQUITY

On June 12, 2014, our board of directors authorized the Company to repurchase up to 500,000 shares of its outstanding common stock over a 12-month period commencing June 16, 2014. 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. This new authorization replaces the company´s previous repurchase plan which was to expire on November 13, 2014. The previous plan, which commenced November 14, 2013, authorized the repurchase of up to 750,000 shares of ePlus´ outstanding common stock. Since commencement of the previous plan through its termination on June 12, 2014, we repurchased 687,488 shares.

During the six months ended September 30, 2014, we repurchased 651,019 shares of our outstanding common stock at an average cost of $50.31 per share for a total purchase price of $32.8 million under the share repurchase plans. We also purchased 35,158 shares of common stock at a value of $2.0 million to satisfy tax withholding obligations to the vesting of employees’ restricted stock.

During the six months ended September 30, 2013, we repurchased 62,986 shares of our outstanding common stock under a share repurchase plan at the average cost of $53.92 per share for a total purchase price of $3.4 million. We purchased 42,073 shares of common stock at a value of $2.5 million to satisfy tax withholding obligations to the vesting of employees’ restricted stock.

Since the inception of our initial repurchase program on September 20, 2001 to September 30, 2014, we have repurchased 5.5 million shares of our outstanding common stock at an average cost of $19.65 per share for a total purchase price of $108.7 million.

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GOODWILL AND OTHER INTANGIBLE ASSETS (Details) (USD $)	3 Months Ended		6 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013	Mar. 31, 2014
GOODWILL AND OTHER INTANGIBLE ASSETS [Abstract]
Goodwill and other intangible assets, Gross carrying amount	$ 57,425,000		$ 57,425,000		$ 48,872,000
Goodwill and other intangible assets, Accumulated amortization	(15,297,000)		(15,297,000)		(14,289,000)
Goodwill and other intangible assets Net	42,128,000		42,128,000		34,583,000
Finite-Lived Intangible Assets [Line Items]
Total amortization expense	400,000	300,000	700,000	600,000
Goodwill [Line Items]
Goodwill Gross	42,834,000		42,834,000		38,243,000
Goodwill, Accumulated Amortization / Impairment Loss	(8,673,000)		(8,673,000)		(8,673,000)
Goodwill, Net Carrying Amount	34,161,000		34,161,000		29,570,000
Technology [Member]
Goodwill [Line Items]
Goodwill, Net Carrying Amount	33,072,000		33,072,000		28,481,000
Software Document Management [Member]
Goodwill [Line Items]
Goodwill, Net Carrying Amount	1,089,000		1,089,000		1,089,000
Customer Relationships [Member]
Finite-Lived Intangible Assets [Line Items]
Intangibles assets, Gross carrying amount	11,923,000		11,923,000		8,013,000
Intangibles Assets, Accumulated amortization / Impairment Loss	(5,416,000)		(5,416,000)		(4,671,000)
Intangible assets, Net Carrying Amount	6,507,000		6,507,000		3,342,000
Customer Relationships [Member] | Minimum [Member]
Finite-Lived Intangible Assets [Line Items]
Estimated useful life			3 years
Customer Relationships [Member] | Maximum [Member]
Finite-Lived Intangible Assets [Line Items]
Estimated useful life			6 years
Capitalized Software Development [Member]
Finite-Lived Intangible Assets [Line Items]
Intangibles assets, Gross carrying amount	2,668,000		2,668,000		2,616,000
Intangibles Assets, Accumulated amortization / Impairment Loss	(1,208,000)		(1,208,000)		(945,000)
Intangible assets, Net Carrying Amount	$ 1,460,000		$ 1,460,000		$ 1,671,000
Capitalized Software Development [Member] | Minimum [Member]
Finite-Lived Intangible Assets [Line Items]
Estimated useful life			3 years
Capitalized Software Development [Member] | Maximum [Member]
Finite-Lived Intangible Assets [Line Items]
Estimated useful life			6 years

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BUSINESS COMBINATIONS

6 Months Ended

Sep. 30, 2014

BUSINESS COMBINATIONS [Abstract]

BUSINESS COMBINATIONS

14. BUSINESS COMBINATIONS

On August 18, 2014, our subsidiary, ePlus Technology, inc., acquired the operating assets and assumed certain liabilities of Granite Business Solutions, Inc. dba Evolve Technology Group (“Evolve”). Evolve is a provider of IT solutions in California, expanding ePlus’ presence in the western United States. Located in Sacramento, CA, Evolve provides information security, collaboration, virtualization and data center solutions to an established customer base of state, local and educational institutions, as well as commercial enterprises.

The total purchase price was $10.5 million, which consists of cash paid, amounts to be paid to Evolve upon collection of certain accounts receivable, and the fair value of contingent consideration. We estimated the fair value of the contingent consideration to be $2.0 million using a probability weighted cash flow methodology. The purchase price has been allocated to the assets acquired and liabilities assumed based on their estimated fair values on the transaction date, including identifiable intangible assets of $3.9 million related to customer relationships with an estimated useful life of 6 years, and other net assets of $0.6 million. We recognized goodwill related to this transaction of $4.6 million, which was assigned to our technology reporting unit. Goodwill associated with the acquisition is deductible for tax purposes.

On November 14, 2013, our subsidiary, ePlus Technology, inc., acquired the assets of AdviStor, Inc., a storage-focused solutions provider located in Pittsford, New York for $2.8 million in cash. The purchase price has been allocated to the assets acquired and liabilities assumed based on their estimated fair values on the transaction date, including identifiable intangible assets of $1.6 million related to customer relationships with an estimated useful life of 6 years, and other net assets of $0.4 million. We recognized goodwill related to this transaction of $0.9 million, which was assigned to our technology reporting unit. Goodwill associated with the acquisition is deductible for tax purposes.

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PROPERTY, EQUIPMENT OTHER ASSETS AND LIABILITIES (Tables)

6 Months Ended

Sep. 30, 2014

PROPERTY, EQUIPMENT OTHER ASSETS AND LIABILITIES [Abstract]

Property, equipment other assets and liabilities

Our property, equipment, other assets and liabilities consist of the following (in thousands):

	September 30, 2014		March 31, 2014
Other current assets:
Deposits & funds held in escrow	$	6,610	$	995
Prepaid assets		3,079		2,865
Supplemental benefit plan investments		-		2,544
Other		318		521
Total other current assets	$	10,007	$	6,925
Other assets:
Deferred costs	$	1,238	$	1,591
Property and equipment, net		4,636		4,293
Other		1,271		2,129
Other assets - long term	$	7,145	$	8,013

	September 30, 2014		March 31, 2014
Other current liabilities
Accrued expenses	$	10,192	$	5,322
Deferred compensation		222		2,544
Other		11,253		7,516
Total other current liabilities	$	21,667	$	15,382
Other liabilities
Deferred revenue	$	1,786	$	1,822
Other		1,013		-
Total other liabilities - long term	$	2,799	$	1,822

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STOCKHOLDERS' EQUITY (Details) (USD $) In Millions, except Share data, unless otherwise specified	6 Months Ended		7 Months Ended	156 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Jun. 12, 2014	Sep. 30, 2014	Nov. 14, 2013
STOCKHOLDERS' EQUITY [Abstract]
Authorized number of shares under stock repurchase program (in shares)			500,000		750,000
Common stock repurchased during the period (in shares)	651,019	62,986	687,488	5,500,000
Average cost of share repurchased (in dollars per share)	$ 50.31	$ 53.92		$ 19.65
Common stock repurchased during the period	$ 32.8	$ 3.4		$ 108.7
Shares repurchased to satisfy tax withholding obligation (in shares)	35,158	42,073
Value of Shares repurchased to satisfy tax withholding obligation	$ 2.0	$ 2.5

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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, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME [Abstract]
NET EARNINGS	$ 11,952	$ 8,591	$ 21,429	$ 16,441
OTHER COMPREHENSIVE INCOME, NET OF TAX:
Foreign currency translation adjustments	(160)	57	(44)	(37)
Other comprehensive income (loss)	(160)	57	(44)	(37)
TOTAL COMPREHENSIVE INCOME	$ 11,792	$ 8,648	$ 21,385	$ 16,404

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GOODWILL AND OTHER INTANGIBLE ASSETS

6 Months Ended

Sep. 30, 2014

GOODWILL AND OTHER INTANGIBLE ASSETS [Abstract]

GOODWILL AND OTHER INTANGIBLE ASSETS

3. GOODWILL AND OTHER INTANGIBLE ASSETS

Our goodwill and other intangible assets consist of the following (in thousands):

	September 30, 2014							March 31, 2014
	Gross Carrying Amount		Accumulated Amortization / Impairment Loss			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization / Impairment Loss			Net Carrying Amount
Goodwill	$	42,834	$	(8,673	)	$	34,161	$	38,243	$	(8,673	)	$	29,570
Customer relationships & other intangibles		11,923		(5,416	)		6,507		8,013		(4,671	)		3,342
Capitalized software development		2,668		(1,208	)		1,460		2,616		(945	)		1,671
Total	$	57,425	$	(15,297	)	$	42,128	$	48,872	$	(14,289	)	$	34,583

Goodwill represents the premium paid over the fair value of the net tangible and intangible assets we have acquired in business combinations. Customer relationships and capitalized software development costs are amortized over an estimated useful life, which is generally between 3 to 6 years.

All of our goodwill as of September 30, 2014 and March 31, 2014 related to our technology segment. We perform our goodwill impairment test annually during our third quarter of each year. For the year ended March 31, 2014, we performed a qualitative assessment and concluded that the fair value of our reporting units were, more likely than not, greater than their respective carrying amounts.

The following table summarizes the amount of goodwill allocated to our reporting units (in thousands):

Reporting Unit	September 30, 2014		March 31, 2014
Technology	$	33,072	$	28,481
Software Document Management		1,089		1,089

OTHER INTANGIBLE ASSETS

Total amortization expense for other intangible assets was $0.6 million and $0.3 million for the three months and $1.0 million and $0.6 million for the six months ended September 30, 2014 and 2013, respectively.

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NOTES PAYABLE AND CREDIT FACILITY (Tables)

6 Months Ended

Sep. 30, 2014

NOTES PAYABLE AND CREDIT FACILITY [Abstract]

Non-recourse and Recourse Obligations

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

	September 30, 2014		March 31, 2014
Recourse notes payable with interest rates ranging from 2.24% and 4.22% at September 30, 2014 and 2.24% and 4.84% at March 31, 2014.
Current	$	280	$	1,460
Long-term		2,576		2,100
Total recourse notes payable	$	2,856	$	3,560
Non-recourse notes payable secured by financing receivables and investments in operating leases with interest rates ranging from 2.00% to 10.00% at September 30, 2014 and ranging from 2.00% to 11.24% as of March 31, 2014.
Current	$	35,262	$	30,907
Long-term		30,018		34,421
Total non-recourse notes payable	$	65,280	$	65,328

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NOTES PAYABLE AND CREDIT FACILITY (Details) (USD $)	6 Months Ended	12 Months Ended
	Sep. 30, 2014 Component	Mar. 31, 2014
Recourse notes payable with interest rates ranging from 2.24% and 4.22% at September 30, 2014 and 2.24% and 4.84% at March 31, 2014.
Current	$ 280,000	$ 1,460,000
Long-term	2,576,000	2,100,000
Total recourse notes payable	2,856,000	3,560,000
Non-recourse notes payable secured by financing receivables and investments in operating leases with interest rates ranging from 2.00% to 10.00% at September 30, 2014 and ranging from 2.00% to 11.24% as of March 31, 2014.
Current	35,262,000	30,907,000
Long-term	30,018,000	34,421,000
Total non-recourse notes payable	65,280,000	65,328,000
Period of notice required to terminate credit facility at quarter end	45 days
Period of notice required to terminate credit facility at year end	90 days
GECDF [Member]
Non-recourse notes payable secured by financing receivables and investments in operating leases with interest rates ranging from 2.00% to 10.00% at September 30, 2014 and ranging from 2.00% to 11.24% as of March 31, 2014.
Number of components under GECDF credit facility	2
Reference rate of credit facility	One Month LIBOR	One Month LIBOR
Basis spread on reference rate (in hundredths)	2.50%	2.50%
Guarantor obligations for credit facility, maximum	10,500,000
First Commonwealth Bank of Virginia [Member]
Non-recourse notes payable secured by financing receivables and investments in operating leases with interest rates ranging from 2.00% to 10.00% at September 30, 2014 and ranging from 2.00% to 11.24% as of March 31, 2014.
Maximum amount can be borrowed under credit facility	500,000
Reference rate of credit facility	U.S. Prime Rate
Basis spread on reference rate (in hundredths)	1.00%
Amount outstanding under credit facility	0	0
Maturity date of credit facility	Oct. 27, 2015
Account receivable component [Member]
Non-recourse notes payable secured by financing receivables and investments in operating leases with interest rates ranging from 2.00% to 10.00% at September 30, 2014 and ranging from 2.00% to 11.24% as of March 31, 2014.
Maximum amount can be borrowed under credit facility	30,000,000	30,000,000
Amount outstanding under credit facility	0	0
Floor plan component [Member]
Non-recourse notes payable secured by financing receivables and investments in operating leases with interest rates ranging from 2.00% to 10.00% at September 30, 2014 and ranging from 2.00% to 11.24% as of March 31, 2014.
Maximum amount can be borrowed under credit facility	225,000,000	175,000,000
Amount outstanding under credit facility	$ 120,600,000	$ 93,400,000
Recourse Note Payable [Member]
Non-recourse notes payable secured by financing receivables and investments in operating leases with interest rates ranging from 2.00% to 10.00% at September 30, 2014 and ranging from 2.00% to 11.24% as of March 31, 2014.
Interest rate of notes, minimum (in hundredths)	2.24%	2.24%
Interest rate of notes, maximum (in hundredths)	4.22%	4.84%
Weighted average interest rate of notes (in hundredths)	2.93%	3.85%
Non-Recourse Note Payable [Member]
Non-recourse notes payable secured by financing receivables and investments in operating leases with interest rates ranging from 2.00% to 10.00% at September 30, 2014 and ranging from 2.00% to 11.24% as of March 31, 2014.
Interest rate of notes, minimum (in hundredths)	2.00%	2.00%
Interest rate of notes, maximum (in hundredths)	10.00%	11.24%
Weighted average interest rate of notes (in hundredths)	3.31%	3.46%

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SEGMENT REPORTING

6 Months Ended

Sep. 30, 2014

SEGMENT REPORTING [Abstract]

SEGMENT REPORTING

13. SEGMENT REPORTING

Our operations are conducted through two business segments. Our technology segment includes sales of information technology products, third-party software, third-party maintenance, advanced professional and managed services and our proprietary software to commercial, state and local governments, and government contractors. Our financing segment consists of the financing of IT equipment, software and related services to commercial, state and local governments, and government contractors. Our reportable segment information was as follows (in thousands):

	Three Months Ended
	September 30, 2014						September 30, 2013
	Technology		Financing		Total		Technology		Financing		Total
Sales of product and services	$	286,584	$	-	$	286,584	$	261,283	$	-	$	261,283
Financing revenue		-		9,059		9,059		-		8,001		8,001
Fee and other income		1,782		47		1,829		1,829		16		1,845
Total revenues		288,366		9,106		297,472		263,112		8,017		271,129
Cost of sales, product and services		230,742		-		230,742		214,854		-		214,854
Direct lease costs		-		2,806		2,806		-		3,495		3,495
Total cost of revenues		230,742		2,806		233,548		214,854		3,495		218,349
Professional and other fees		1,321		256		1,577		1,580		328		1,908
Salaries and benefits		31,963		2,289		34,252		27,244		2,441		29,685
General and administrative expenses		6,703		455		7,158		5,701		358		6,059
Interest and financing costs		19		592		611		26		407		433
Operating expenses		40,006		3,592		43,598		34,551		3,534		38,085
Operating income & earnings before provision for income taxes	$	17,618	$	2,708	$	20,326	$	13,707	$	988	$	14,695
Depreciation and amortization	$	1,081	$	2,709	$	3,790	$	592	$	3,060	$	3,652
Purchases of property, equipment and operating lease equipment	$	744	$	706	$	1,450	$	1,845	$	1,628	$	3,473
Total assets	$	341,893	$	222,553	$	564,446	$	269,149	$	196,152	$	465,301
	Six Months Ended
	September 30, 2014						September 30, 2013
	Technology		Financing		Total		Technology		Financing		Total
Sales of product and services	$	547,940	$	-	$	547,940	$	508,320	$	-	$	508,320
Financing revenue		-		17,933		17,933		-		18,761		18,761
Fee and other income		3,829		74		3,903		3,286		79		3,365
Total revenues		551,769		18,007		569,776		511,606		18,840		530,446
Cost of sales, product and services		443,650		-		443,650		418,184		-		418,184
Direct lease costs		-		5,763		5,763		-		6,748		6,748
Total cost of revenues		443,650		5,763		449,413		418,184		6,748		424,932
Professional and other fees		2,907		503		3,410		4,443		703		5,146
Salaries and benefits		62,633		4,566		67,199		55,142		5,225		60,367
General and administrative expenses		12,461		970		13,431		10,515		545		11,060
Interest and financing costs		58		1,197		1,255		46		847		893
Operating expenses		78,059		7,236		85,295		70,146		7,320		77,466
Operating income		30,060		5,008		35,068		23,276		4,772		28,048
Other income		-		1,434		1,434		-		-		-
Earnings before provision for income taxes	$	30,060	$	6,442	$	36,502	$	23,276	$	4,772	$	28,048
Depreciation and amortization	$	1,975	$	5,656	$	7,631	$	1,244	$	6,115	$	7,359
Purchases of property, equipment and operating lease equipment	$	1,086	$	833	$	1,919	$	3,071	$	3,688	$	6,759
Total assets	$	341,893	$	222,553	$	564,446	$	269,149	$	196,152	$	465,301