QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
|
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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Title of each class
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Trading Symbol(s)
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Name of each exchange on which registered
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|
|
|
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Accelerated filer ☐
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Non-accelerated filer ☐
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Smaller reporting company
|
Emerging growth company
|
Part I. Financial Information:
|
|||
Item 1.
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Financial Statements
|
||
5 |
|||
6 | |||
7 | |||
8 | |||
10 | |||
11 |
|||
Item 2.
|
24 |
||
Item 3.
|
39 |
||
Item 4.
|
39 |
||
Part II. Other Information:
|
|||
Item 1.
|
40 |
||
Item 1A.
|
40 |
||
Item 2.
|
40 |
||
Item 3.
|
40 |
||
Item 4.
|
40 |
||
Item 5.
|
41 |
||
Item 6.
|
41 |
||
42 |
•
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national and international political instability fostering uncertainty and volatility in the global economy including exposure to fluctuation in foreign currency rates, interest rates, and inflation, including
increases in our costs and price increases to our customers which may result in adverse changes in our gross profit;
|
•
|
significant and rapid inflation may cause price, wage, and interest rate increases, as well as increases in operating costs which may impact the arrangements that have pricing commitments over the term of the
agreement;
|
•
|
significant adverse changes in, reductions in, or loss of one or more of our larger volume customers or vendors;
|
•
|
supply chain issues, including a shortage of IT products, may increase our costs or cause a delay in fulfilling customer orders, or increase our need for working capital, or completing professional services, or
purchasing IT products or services needed to support our internal infrastructure or operations, resulting in an adverse impact on our financial results;
|
•
|
the duration and ongoing impact of the novel coronavirus (“COVID-19”) pandemic, including but not limited to the impact and severity of new variants, vaccine efficacy, and immunization rates, the closure of
non-essential business and other associated governmental containment actions, and the increase in cyber-security attacks that have occurred while employees work remotely;
|
•
|
maintaining and increasing advanced professional services by recruiting and retaining highly skilled, competent personnel, and vendor certifications;
|
•
|
our dependence on key personnel to maintain certain customer relationships, and our ability to hire, train, and retain sufficient qualified personnel;
|
•
|
our ability to secure our own and our customers’ electronic and other confidential information, while maintaining compliance with evolving data privacy and regulatory laws and regulations;
|
•
|
Our ability to remain secure during a cybersecurity attack, including both disruptions in our or our vendors’ IT systems and data and audio communication networks;
|
•
|
reliance on third-parties to perform some of our service obligations to our customers, and the reliance on a small number of key vendors in our supply chain with whom we do not have long-term supply agreements,
guaranteed price agreements, or assurance of stock availability;
|
•
|
the creditworthiness of our customers and our ability to reserve adequately for credit losses;
|
•
|
loss of our credit facility or credit lines with our vendors may restrict our current and future operations;
|
•
|
a possible decrease in the capital spending budgets of our customers or a decrease in purchases from us;
|
•
|
our ability to raise capital, maintain or increase as needed our lines of credit with vendors or floor planning facility, obtain debt for our financing transactions, or the effect of those changes on our common
stock price;
|
•
|
reduction of vendor incentives provided to us;
|
•
|
changes in the Information Technology (“IT”) industry and/or rapid changes in product offerings, including the proliferation of the cloud, infrastructure as a service (“IaaS”), software as a service (“SaaS”) and
platform as a service (“PaaS”);
|
•
|
our dependency on continued innovations in hardware, software, and services offerings by our vendors and our ability to partner with them;
|
•
|
future growth rates in our core businesses;
|
•
|
rising interest rates or the loss of key lenders or the constricting of credit markets;
|
•
|
adapting to meet changes in markets and competitive developments;
|
•
|
increasing the total number of customers using integrated solutions by up-selling within our customer base and gaining new customers;
|
•
|
managing a diverse product set of solutions in highly competitive markets with a number of key vendors;
|
•
|
increasing the total number of customers who use our managed services and professional services and continuing to enhance our managed services offerings to remain competitive in the marketplace;
|
•
|
performing professional and managed services competently;
|
•
|
our ability to implement comprehensive plans for the integration of sales forces, cost containment, asset rationalization, systems integration, and other key strategies;
|
•
|
exposure to changes in, interpretations of, or enforcement trends in, and customer and vendor actions in anticipation of or response to, legislation and regulatory matters;
|
•
|
domestic and international economic regulations uncertainty (e.g., tariffs, sanctions, and trade agreements);
|
•
|
our contracts may not be adequate to protect us, and we are subject to audit which we may not pass, and our professional and liability insurance policies coverage may be insufficient to cover a claim;
|
•
|
failure to comply with public sector contracts, or applicable laws or regulations;
|
•
|
maintaining our proprietary software and updating our technology infrastructure to remain competitive in the marketplace;
|
•
|
our ability to realize our investment in leased equipment;
|
•
|
our ability to successfully perform due diligence and integrate acquired businesses;
|
•
|
our ability to protect our intellectual property rights and successfully defend any challenges to the validity of our patents or allegations that we are infringing upon any third-party patents, and the costs
associated with those actions, and, when appropriate, license required technology.
|
June 30, 2022
|
March 31, 2022
|
|||||||
ASSETS
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$
|
|
$
|
|
||||
Accounts receivable—trade, net
|
|
|
||||||
Accounts receivable—other, net
|
|
|
||||||
Inventories
|
|
|
||||||
Financing receivables—net, current
|
|
|
||||||
Deferred costs
|
|
|
||||||
Other current assets
|
|
|
||||||
Total current assets
|
|
|
||||||
Financing receivables and operating leases—net
|
|
|
||||||
Deferred tax asset—net
|
|
|
||||||
Property, equipment, and other assets
|
|
|
||||||
Goodwill
|
|
|
||||||
Other intangible assets—net
|
|
|
||||||
TOTAL ASSETS
|
$
|
|
$
|
|
||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
||||||||
LIABILITIES
|
||||||||
Current liabilities:
|
||||||||
Accounts payable
|
$
|
|
$
|
|
||||
Accounts payable—floor plan
|
|
|
||||||
Salaries and commissions payable
|
|
|
||||||
Deferred revenue
|
|
|
||||||
Recourse notes payable—current
|
|
|
||||||
Non-recourse notes payable—current
|
|
|
||||||
Other current liabilities
|
|
|
||||||
Total current liabilities
|
|
|
||||||
Recourse notes payable - long-term
|
|
|
||||||
Non-recourse notes payable - long-term
|
|
|
||||||
Other liabilities
|
|
|
||||||
TOTAL LIABILITIES
|
|
|
||||||
COMMITMENTS AND CONTINGENCIES (Note 8)
|
||||||||
STOCKHOLDERS’ EQUITY
|
||||||||
Preferred stock, $
|
|
|
||||||
Common stock, $
|
|
|
||||||
Additional paid-in capital
|
|
|
||||||
Treasury stock, at cost,
|
(
|
)
|
(
|
)
|
||||
Retained earnings
|
|
|
||||||
Accumulated other comprehensive income—foreign currency translation adjustment
|
(
|
)
|
(
|
)
|
||||
Total Stockholders’ Equity
|
|
|
||||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
|
$
|
|
$
|
|
Three Months Ended June 30,
|
||||||||
2022
|
2021
|
|||||||
Net sales
|
||||||||
Product
|
$
|
|
$
|
|
||||
Services
|
|
|
||||||
Total
|
|
|
||||||
Cost of sales
|
||||||||
Product
|
|
|
||||||
Services
|
|
|
||||||
Total
|
|
|
||||||
Gross profit
|
|
|
||||||
Selling, general, and administrative
|
|
|
||||||
Depreciation and amortization
|
|
|
||||||
Interest and financing costs
|
|
|
||||||
Operating expenses
|
|
|
||||||
Operating income
|
|
|
||||||
Other income (expense)
|
(
|
)
|
|
|||||
Earnings before tax
|
|
|
||||||
Provision for income taxes
|
|
|
||||||
Net earnings
|
$
|
|
$
|
|
||||
Net earnings per common share—basic
|
$
|
|
$
|
|
||||
Net earnings per common share—diluted
|
$
|
|
$
|
|
||||
Weighted average common shares outstanding—basic
|
|
|
||||||
Weighted average common shares outstanding—diluted
|
|
|
Three Months Ended June 30,
|
||||||||
2022
|
2021
|
|||||||
NET EARNINGS
|
$
|
|
$
|
|
||||
OTHER COMPREHENSIVE INCOME, NET OF TAX:
|
||||||||
Foreign currency translation adjustments
|
(
|
)
|
|
|||||
Other comprehensive income (loss)
|
(
|
)
|
|
|||||
TOTAL COMPREHENSIVE INCOME
|
$
|
|
$
|
|
Three Months Ended June 30,
|
||||||||
2022
|
2021
|
|||||||
Cash flows from operating activities:
|
||||||||
Net earnings
|
$
|
|
$
|
|
||||
Adjustments to reconcile net earnings to net cash used in operating activities:
|
||||||||
Depreciation and amortization
|
|
|
||||||
Provision for credit losses
|
|
(
|
)
|
|||||
Share-based compensation expense
|
|
|
||||||
Payments from lessees directly to lenders—operating leases
|
|
(
|
)
|
|||||
Gain on disposal of property, equipment, and operaing lease equipment
|
(
|
)
|
(
|
)
|
||||
Changes in:
|
||||||||
Accounts receivable
|
(
|
)
|
(
|
)
|
||||
Inventories-net
|
(
|
)
|
(
|
)
|
||||
Financing receivables—net
|
(
|
)
|
|
|||||
Deferred costs and other assets
|
(
|
)
|
|
|||||
Accounts payable-trade
|
|
(
|
)
|
|||||
Salaries and commissions payable, deferred revenue, and other liabilities
|
|
(
|
)
|
|||||
Net cash used in operating activities
|
(
|
)
|
(
|
)
|
||||
Cash flows from investing activities:
|
||||||||
Proceeds from sale of property, equipment, and operating lease equipment
|
|
|
||||||
Purchases of property, equipment and operating lease equipment
|
(
|
)
|
(
|
)
|
||||
Net cash used in investing activities
|
(
|
)
|
(
|
)
|
||||
Cash flows from financing activities:
|
||||||||
Borrowings of non-recourse and recourse notes payable
|
|
|
||||||
Repayments of non-recourse and recourse notes payable
|
(
|
)
|
(
|
)
|
||||
Repurchase of common stock
|
(
|
)
|
(
|
)
|
||||
Net borrowings (repayments) on floor plan facility
|
(
|
)
|
|
|||||
Net cash provided by financing activities
|
|
|
||||||
Effect of exchange rate changes on cash
|
|
|
||||||
Net increase in cash and cash equivalents
|
(
|
)
|
(
|
)
|
||||
Cash and cash equivalents, beginning of period
|
|
|
||||||
Cash and cash equivalents, end of period
|
$
|
|
$
|
|
Three Months Ended June 30,
|
||||||||
2022
|
2021
|
|||||||
Supplemental disclosures of cash flow
information:
|
||||||||
Cash paid for interest
|
$
|
|
$
|
|
||||
Cash paid for income taxes
|
$
|
|
$
|
|
||||
Cash paid for amounts included in the measurement of lease liabilities
|
$
|
|
$
|
|
||||
Schedule of non-cash investing and
financing activities:
|
||||||||
Proceeds from sale of property, equipment, and leased equipment
|
$
|
|
$
|
|
||||
Purchases of property, equipment, and operating lease equipment
|
$
|
(
|
)
|
$
|
(
|
)
|
||
Borrowing of non-recourse and recourse notes payable
|
$
|
|
$
|
|
||||
Repayments of non-recourse and recourse notes payable
|
$
|
|
$
|
(
|
)
|
|||
Vesting of share-based compensation
|
$
|
|
$
|
|
||||
Repurchase of common stock
|
$ | $ | ( |
) | ||||
New operating lease assets obtained in exchange for lease obligations
|
$
|
|
$
|
|
Three Months Ended June 30,
2022
|
||||||||||||||||||||||||||||
Common Stock
|
Additional
Paid-In
|
Treasury
|
Retained
|
Accumulated
Other
Comprehensive
|
||||||||||||||||||||||||
Shares
|
Par Value
|
Capital
|
Stock
|
Earnings
|
Income
|
Total
|
||||||||||||||||||||||
Balance, March 31, 2022
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
$
|
(
|
)
|
$
|
|
|||||||||||||
Issuance of restricted stock awards
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Share-based compensation
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Repurchase of common stock
|
(
|
)
|
|
|
(
|
)
|
|
|
(
|
)
|
||||||||||||||||||
Net earnings
|
-
|
|
|
|
|
|
|
|||||||||||||||||||||
Foreign currency translation adjustment
|
-
|
|
|
|
|
(
|
)
|
(
|
)
|
|||||||||||||||||||
Balance, June 30, 2022
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
$
|
(
|
)
|
$
|
|
Three Months Ended June 30,
2021
|
||||||||||||||||||||||||||||
Common Stock
|
Additional
Paid-In
|
Treasury
|
Retained
|
Accumulated
Other
Comprehensive
|
||||||||||||||||||||||||
Shares
|
Par Value
|
Capital
|
Stock
|
Earnings
|
Income
|
Total
|
||||||||||||||||||||||
Balance, March 31, 2021
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
$
|
|
$
|
|
||||||||||||||
Issuance of restricted stock awards
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Share-based compensation
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Repurchase of common stock
|
(
|
)
|
|
|
(
|
)
|
|
|
(
|
)
|
||||||||||||||||||
Net earnings
|
-
|
|
|
|
|
|
|
|||||||||||||||||||||
Foreign currency translation adjustment
|
-
|
|
|
|
|
|
|
|||||||||||||||||||||
Balance, June 30, 2021
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
$
|
|
$
|
|
1.
|
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
|
2. |
REVENUES
|
June 30, 2022
|
March 31, 2022
|
|||||||
Current (included in deferred revenue)
|
$
|
|
$
|
|
||||
Non-current (included in other liabilities)
|
$
|
|
$
|
|
|
$
|
|
||
|
|
|||
|
|
|||
|
|
|||
|
|
|||
Total remaining performance obligations
|
$
|
|
3. |
FINANCING RECEIVABLES AND OPERATING LEASES
|
Three months ended June 30,
|
||||||||
2022
|
2021
|
|||||||
Net sales
|
$
|
|
$
|
|
||||
Cost of sales
|
|
|
||||||
Gross profit
|
$
|
|
$
|
|
Three months ended June 30,
|
||||||||
2022
|
2021
|
|||||||
Interest income on sales-type leases
|
$
|
|
$
|
|
||||
Lease income on operating leases
|
$
|
|
$
|
|
June 30,
2022
|
Notes
Receivable
|
Lease
Receivables
|
Financing
Receivables
|
|||||||||
Gross receivables
|
$
|
|
$
|
|
$
|
|
||||||
Unguaranteed residual value (1)
|
|
|
|
|||||||||
Unearned income
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Allowance for credit losses (2)
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Total, net
|
$
|
|
$
|
|
$
|
|
||||||
Reported as:
|
||||||||||||
Current
|
$
|
|
$
|
|
$
|
|
||||||
Long-term
|
|
|
|
|||||||||
Total, net
|
$
|
|
$
|
|
$
|
|
(1) |
|
(2) |
|
March 31,
2022
|
Notes
Receivable
|
Lease
Receivables
|
Financing
Receivables
|
|||||||||
Gross receivables
|
$
|
|
$
|
|
$
|
|
||||||
Unguaranteed residual value (1)
|
|
|
|
|||||||||
Unearned income
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Allowance for credit losses (2)
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Total, net
|
$
|
|
$
|
|
$
|
|
||||||
Reported as:
|
||||||||||||
Current
|
$
|
|
$
|
|
$
|
|
||||||
Long-term
|
|
|
|
|||||||||
Total, net
|
$
|
|
$
|
|
$
|
|
(1) |
|
(2) |
|
June 30,
2022
|
March 31,
2022
|
|||||||
Cost of equipment under operating leases
|
$
|
|
$
|
|
||||
Accumulated depreciation
|
(
|
)
|
(
|
)
|
||||
Investment in operating lease equipment—net (1)
|
$
|
|
$
|
|
(1) |
|
4. |
LESSEE ACCOUNTING
|
5. |
GOODWILL AND OTHER INTANGIBLE ASSETS
|
Three months ended June 30, 2022
|
||||||||||||
Goodwill
|
Accumulated
Impairment
Loss
|
Net
Carrying
Amount
|
||||||||||
Beginning balance
|
$
|
|
$
|
(
|
)
|
$
|
|
|||||
Foreign currency translations
|
(
|
)
|
-
|
(
|
)
|
|||||||
Ending balance
|
$
|
|
$
|
(
|
)
|
$
|
|
June 30, 2022
|
March 31, 2022
|
|||||||||||||||||||||||
Gross
Carrying
Amount
|
Accumulated
Amortization
|
Net
Carrying
Amount
|
Gross
Carrying
Amount
|
Accumulated
Amortization
|
Net
Carrying
Amount
|
|||||||||||||||||||
Customer relationships & other intangibles
|
$
|
|
$
|
(
|
)
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
||||||||||
Capitalized software development
|
|
(
|
)
|
|
|
(
|
)
|
|
||||||||||||||||
Total
|
$
|
|
$
|
(
|
)
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
6. |
ALLOWANCE FOR CREDIT LOSSES
|
Accounts
Receivable
|
Notes
Receivable
|
Lease
Receivables
|
Total
|
|||||||||||||
Balance April 1, 2022
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Provision for credit losses
|
|
|
|
|
||||||||||||
Write-offs and other
|
(
|
)
|
|
|
(
|
)
|
||||||||||
Balance June 30,
2022
|
$
|
|
$
|
|
$
|
|
$
|
|
Accounts
Receivable
|
Notes
Receivable
|
Lease
Receivables
|
Total
|
|||||||||||||
Balance April 1, 2021
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Provision for credit losses
|
(
|
)
|
|
(
|
)
|
(
|
)
|
|||||||||
Write-offs and other
|
(
|
)
|
|
|
(
|
)
|
||||||||||
Balance June 30,
2021
|
$
|
|
$
|
|
$
|
|
$
|
|
•
|
High CQR: This rating includes accounts with excellent to good business credit, asset quality and
capacity to meet financial obligations. Loss rates in this category are generally less than
|
•
|
Average CQR: This rating includes accounts with average credit risk that are more susceptible to
loss in the event of adverse business or economic conditions. Loss rates in this category are generally in the range of
|
•
|
Low CQR: This rating includes accounts that have marginal credit risk such that the customer’s
ability to make repayment is impaired or may likely become impaired. The loss rates in this category in the normal course are generally in the range of
|
Amortized cost basis by origination year ending March 31,
|
||||||||||||||||||||||||||||||||||||
2023
|
2022
|
2021
|
2020
|
2019
|
2018
|
Total
|
Non-recourse
debt (2)
|
Net credit
exposure
|
||||||||||||||||||||||||||||
Notes receivable:
|
||||||||||||||||||||||||||||||||||||
High CQR
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
|||||||||||||||||
Average CQR
|
|
|
|
|
|
|
|
(
|
)
|
|
||||||||||||||||||||||||||
Low CQR
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Total
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
|||||||||||||||||
Lease receivables:
|
||||||||||||||||||||||||||||||||||||
High CQR
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
|||||||||||||||||
Average CQR
|
|
|
|
|
|
|
|
(
|
)
|
|
||||||||||||||||||||||||||
Low CQR
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Total
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
|||||||||||||||||
Total amortized cost (1)
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
(1) |
|
(2)
|
|
Amortized cost basis by origination year ending March 31,
|
||||||||||||||||||||||||||||||||||||
2022
|
2021
|
2020
|
2019
|
2018
|
2017
|
Total
|
Transfers
(2)
|
Net credit
exposure
|
||||||||||||||||||||||||||||
Notes receivable:
|
||||||||||||||||||||||||||||||||||||
High CQR
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$ |
||||||||||||||||||
Average CQR
|
|
|
|
|
|
|
|
(
|
)
|
|||||||||||||||||||||||||||
Low CQR
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||
Total
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$ |
||||||||||||||||||
Lease receivables:
|
||||||||||||||||||||||||||||||||||||
High CQR
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$ |
||||||||||||||||||
Average CQR
|
|
|
|
|
|
|
|
(
|
)
|
|||||||||||||||||||||||||||
Low CQR
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||
Total
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$ |
||||||||||||||||||
Total amortized cost (1)
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$ |
(1) |
|
(2)
|
|
31-60
Days Past
Due
|
61-90
Days Past
Due
|
> 90
Days Past
Due
|
Total
Past Due
|
Current
|
Total
Billed
|
Unbilled
|
Amortized
Cost
|
|||||||||||||||||||||||||
Notes receivable
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
Lease receivables
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Total
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
31-60
Days Past
Due
|
61-90
Days Past
Due
|
> 90
Days Past
Due
|
Total
Past Due
|
Current
|
Total
Billed
|
Unbilled
|
Amortized
Cost
|
|||||||||||||||||||||||||
Notes receivable
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
Lease receivables
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Total
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
7. |
CREDIT FACILITY AND NOTES PAYABLE
|
8. |
COMMITMENTS AND CONTINGENCIES
|
9. |
EARNINGS PER SHARE
|
Three Months Ended June 30,
|
||||||||
2022
|
2021
|
|||||||
Net earnings attributable to common shareholders - basic and diluted
|
$
|
|
$
|
|
||||
Basic and diluted common shares outstanding:
|
||||||||
Weighted average common shares outstanding — basic
|
|
|
||||||
Effect of dilutive shares
|
|
|
||||||
Weighted average shares common outstanding — diluted
|
|
|
||||||
Earnings per common share - basic
|
$
|
|
$
|
|
||||
Earnings per common share - diluted
|
$
|
|
$
|
|
10. |
STOCKHOLDERS’ EQUITY
|
11. |
SHARE-BASED COMPENSATION
|
Number of
Shares
|
Weighted Average
Grant-date Fair Value
|
|||||||
Nonvested April 1, 2022
|
|
$
|
|
|||||
Granted
|
|
$
|
|
|||||
Vested
|
(
|
)
|
$
|
|
||||
Forfeited | ( |
) | $ | |||||
Nonvested June 30,
2022
|
|
$
|
|
12. |
INCOME TAXES
|
13. |
FAIR VALUE OF FINANCIAL INSTRUMENTS
|
Fair Value Measurement Using
|
||||||||||||||||
Recorded
Amount
|
Quoted Prices in
Active Markets for
Identical Assets
(Level 1)
|
Significant Other
Observable Inputs
(Level 2)
|
Significant
Unobservable
Inputs
(Level 3)
|
|||||||||||||
June 30, 2022
|
||||||||||||||||
Assets:
|
||||||||||||||||
Money market funds
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
March 31, 2022
|
||||||||||||||||
Assets:
|
||||||||||||||||
Money market funds
|
$
|
|
$
|
|
$
|
|
$
|
|
14.
|
BUSINESS COMBINATIONS
|
15. |
SEGMENT REPORTING
|
Three Months Ended
|
||||||||||||||||||||||||
June 30, 2022
|
June 30, 2021
|
|||||||||||||||||||||||
Technology
|
Financing
|
Total
|
Technology
|
Financing
|
Total
|
|||||||||||||||||||
Net Sales
|
||||||||||||||||||||||||
Product
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||
Service
|
|
|
|
|
|
|
||||||||||||||||||
Total |
|
|
|
|
|
|
||||||||||||||||||
Cost of Sales
|
||||||||||||||||||||||||
Product
|
|
|
|
|
|
|
||||||||||||||||||
Service
|
|
|
|
|
|
|
||||||||||||||||||
Total |
|
|
|
|
|
|
||||||||||||||||||
Gross Profit
|
|
|
|
|
|
|
||||||||||||||||||
Selling, general, and administrative
|
|
|
|
|
|
|
||||||||||||||||||
Depreciation and amortization
|
|
|
|
|
|
|
||||||||||||||||||
Interest and financing costs
|
|
|
|
|
|
|
||||||||||||||||||
Operating expenses
|
|
|
|
|
|
|
||||||||||||||||||
Operating income
|
|
|
|
|
|
|
||||||||||||||||||
Other income (expense)
|
(
|
)
|
|
|||||||||||||||||||||
Earnings before tax
|
$
|
|
$
|
|
||||||||||||||||||||
Net Sales
|
||||||||||||||||||||||||
Contracts with customers
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||
Financing and other
|
|
|
|
|
|
|
||||||||||||||||||
Total
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||
Selected Financial Data - Statement of Cash Flow
|
||||||||||||||||||||||||
Depreciation and amortization
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||
Purchases of property, equipment and operating lease equipment
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||
Selected Financial Data - Balance Sheet
|
||||||||||||||||||||||||
Total assets
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
Three Months Ended June 30,
|
||||||||
2022
|
2021
|
|||||||
Customer end market:
|
||||||||
Telecom, Media & Entertainment
|
$
|
|
$
|
|
||||
Technology
|
|
|
||||||
Healthcare
|
|
|
||||||
State and local government and educational institutions
|
|
|
||||||
Financial Services
|
|
|
||||||
All others
|
|
|
||||||
Net sales
|
|
|
||||||
Less: Revenue from financing and other
|
(
|
)
|
(
|
)
|
||||
Revenue from contracts with customers
|
$
|
|
$
|
|
Three Months Ended June 30,
|
||||||||
2022
|
2021
|
|||||||
Vendor:
|
||||||||
Cisco Systems
|
$
|
|
$
|
|
||||
Dell EMC
|
|
|
||||||
Juniper Networks
|
|
|
||||||
NetApp
|
|
|
||||||
Arista Networks
|
|
|
||||||
All others
|
|
|
||||||
Net sales
|
|
|
||||||
Less: Revenue from financing and other
|
(
|
)
|
(
|
)
|
||||
Revenue from contracts with customers
|
$
|
|
$
|
|
Item 2. |
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULT OF OPERATIONS
|
• |
General economic concerns including inflation, rising interest rates, staffing shortages, COVID variants, and global unrest may impact our customers’ willingness to spend on technology and services.
|
• |
A worldwide shortage of certain IT products is resulting from, among other things, shortages in semiconductors and other product components. Like others, we are experiencing ongoing supply constraints that
have affected, and could continue to further affect, lead times for delivery of products, the costs of products, vendor return and cancellation policies, and our ability to meet customer demands. We continue to work closely with our
suppliers to further mitigate disruptions outside our control. Despite these actions, we believe extended lead times will likely persist for at least the next few quarters.
|
• |
We are experiencing increases in prices from our suppliers as well as rising wages and interest rates. We generally have been able to pass price increases to our customers. Our labor costs related to services
we perform will take longer to pass to customers that have services engagements where prices may be set. Our financing quotes are generally indexed to market changes to enable us to change rates from time of quote to funding. Financing
transactions funded with our cash flows, not debt, are subject to interest rate risk. If the market interest rate exceeds our internal rate of return, we may not fund the transaction to obtain the proceeds and lock in our profit on the
transaction. There can be no assurances that inflation will not have a material impact on our sales, gross profit, or operating costs in the future.
|
• |
Customers’ top focus areas include security, cloud solutions, hybrid work environments (work from home and return to office) as well as digital transformation and modernization. We have developed advisory
services, solutions, and professional and managed services to meet these priorities and help our customers attain their desired state.
|
• |
Modernizing legacy applications, data modernization, reducing operational complexity, securing workloads, the cost and performance of IT operations, and agility are changing the way companies are purchasing
and consuming technology. These are fueling deployments of solutions on cloud, managed services and hybrid platforms and licensing models.
|
Three Months Ended June 30,
|
||||||||
Consolidated
|
2022
|
2021
|
||||||
Net sales
|
$
|
458,359
|
$
|
416,649
|
||||
|
||||||||
Gross profit
|
$
|
113,523
|
$
|
105,512
|
||||
Gross margin
|
24.8
|
%
|
25.3
|
%
|
||||
Operating income margin
|
7.2
|
%
|
7.8
|
%
|
||||
|
||||||||
Net earnings
|
$
|
22,339
|
$
|
23,518
|
||||
Net earnings margin
|
4.9
|
%
|
5.6
|
%
|
||||
Net earnings per common share - diluted
|
$
|
0.84
|
$
|
0.87
|
||||
|
||||||||
Non-GAAP: Net earnings (1)
|
$
|
26,513
|
$
|
26,353
|
||||
Non-GAAP: Net earnings per common share - diluted (1)
|
$
|
0.99
|
$
|
0.98
|
||||
|
||||||||
Adjusted EBITDA (2)
|
$
|
38,304
|
$
|
38,272
|
||||
Adjusted EBITDA margin
|
8.4
|
%
|
9.2
|
%
|
||||
Technology Segment
|
||||||||
Net sales
|
$
|
448,785
|
$
|
400,358
|
||||
Adjusted gross billings (3)
|
$
|
701,943
|
$
|
633,007
|
||||
|
||||||||
Gross profit
|
$
|
105,651
|
$
|
95,433
|
||||
Gross margin
|
23.5
|
%
|
23.8
|
%
|
||||
|
||||||||
Operating income
|
$
|
29,219
|
$
|
25,223
|
||||
Adjusted EBITDA (2)
|
$
|
34,254
|
$
|
30,958
|
||||
|
||||||||
Financing Segment
|
||||||||
Net sales
|
$
|
9,574
|
$
|
16,291
|
||||
|
||||||||
Gross profit
|
$
|
7,872
|
$
|
10,079
|
||||
Operating income
|
$
|
3,964
|
$
|
7,229
|
||||
Adjusted EBITDA (2)
|
$
|
4,050
|
$
|
7,314
|
(1) |
Non-GAAP Net earnings and Non-GAAP Net earnings per common share – diluted is based on net earnings calculated in accordance with GAAP, adjusted to exclude other income (expense), share-based compensation, and acquisition and integration
expenses, and the related tax effects.
|
Three Months Ended June 30,
|
||||||||
2022
|
2021
|
|||||||
GAAP: Earnings before tax
|
$
|
31,030
|
$
|
32,575
|
||||
Share based compensation
|
1,773
|
1,735
|
||||||
Acquisition related amortization expense
|
2,183
|
2,696
|
||||||
Other (income) expense
|
2,153
|
(123
|
)
|
|||||
Non-GAAP: Earnings before provision for income taxes
|
37,139
|
36,883
|
||||||
GAAP: Provision for income taxes
|
8,691
|
9,057
|
||||||
Share based compensation
|
508
|
496
|
||||||
Acquisition related amortization expense
|
617
|
757
|
||||||
Other (income) expense
|
616
|
(35
|
)
|
|||||
Tax benefit on restricted stock
|
194
|
255
|
||||||
Non-GAAP: Provision for income taxes
|
10,626
|
10,530
|
||||||
Non-GAAP: Net earnings
|
$
|
26,513
|
$
|
26,353
|
Three Months Ended June 30,
|
||||||||
2022
|
2021
|
|||||||
GAAP: Net earnings per common share - diluted
|
$
|
0.84
|
$
|
0.87
|
||||
Share based compensation
|
0.04
|
0.05
|
||||||
Acquisition related amortization expense
|
0.06
|
0.07
|
||||||
Other (income) expense
|
0.06
|
-
|
||||||
Tax benefit on restricted stock
|
(0.01
|
)
|
(0.01
|
)
|
||||
Total non-GAAP adjustments - net of tax
|
0.15
|
0.11
|
||||||
Non-GAAP: Net earnings per common share - diluted
|
$
|
0.99
|
$
|
0.98
|
(2) |
We define Adjusted EBITDA as net earnings calculated in accordance with GAAP, adjusted for the following: interest expense, depreciation and amortization, share-based compensation, acquisition and integration expenses, provision for
income taxes, and other income. Segment Adjusted EBITDA is defined as operating income calculated in accordance with GAAP, adjusted for interest expense, share-based compensation, acquisition and integration expenses, and depreciation and
amortization. We consider the interest on notes payable from our financing segment and depreciation expense presented within cost of sales, which includes depreciation on assets financed as operating leases, to be operating expenses. As
such, they are not included in the amounts added back to net earnings in the Adjusted EBITDA calculation. We provide below a reconciliation of Adjusted EBITDA to net earnings, which is the most directly comparable financial measure to this
Non-GAAP financial measure. Adjusted EBITDA margin is our calculation of Adjusted EBITDA divided by net sales. The presentation of Adjusted EBITDA has been changed from prior period presentations to include adjustments for expenses related
to acquisitions such as legal, accounting, tax, and adjustments to the fair value of contingent purchase price consideration as well as stock compensation.
|
Three Months Ended June 30,
|
||||||||
Consolidated
|
2022
|
2021
|
||||||
Net earnings
|
$
|
22,339
|
$
|
23,518
|
||||
Provision for income taxes
|
8,691
|
9,057
|
||||||
Share based compensation
|
1,773
|
1,735
|
||||||
Interest and financing costs
|
138
|
159
|
||||||
Depreciation and amortization
|
3,210
|
3,926
|
||||||
Other income (expense)
|
2,153
|
(123
|
)
|
|||||
Adjusted EBITDA
|
$
|
38,304
|
$
|
38,272
|
||||
Technology Segment
|
||||||||
Operating income
|
$
|
29,219
|
$
|
25,223
|
||||
Depreciation and amortization
|
3,182
|
3,898
|
||||||
Share based compensation
|
1,715
|
1,678
|
||||||
Interest and financing costs
|
138
|
159
|
||||||
Adjusted EBITDA
|
$
|
34,254
|
$
|
30,958
|
||||
Financing Segment
|
||||||||
Operating income
|
$
|
3,964
|
$
|
7,229
|
||||
Depreciation and amortization
|
28
|
28
|
||||||
Share based compensation
|
58
|
57
|
||||||
Adjusted EBITDA
|
$
|
4,050
|
$
|
7,314
|
(3) |
We define Adjusted gross billings as our technology segment net sales calculated in accordance with US GAAP, adjusted to exclude the costs incurred related to sales of third-party maintenance,
software assurance, subscription/SaaS licenses, and services. We have provided below a reconciliation of Adjusted gross billings to technology segment net sales, which is the most directly comparable financial measure to this Non-GAAP
financial measure.
|
Three Months Ended June 30,
|
||||||||
2022
|
2021
|
|||||||
Technology segment net sales
|
$
|
448,785
|
$
|
400,358
|
||||
Costs incurred related to sales of third party maintenance, software assurance and subscription/SaaS licenses, and services
|
253,158
|
232,649
|
||||||
Adjusted gross billings
|
$
|
701,943
|
$
|
633,007
|
• |
Portfolio income: Interest income from financing receivables and rents due under operating leases
|
• |
Transactional gains: Net gains on the sale of financial assets
|
• |
Post-contract earnings: Month-to-month rents; early termination, prepayment, make-whole, or buyout fees; and sales of off-lease equipment.
|
Three Months Ended June 30,
|
Change
|
|||||||||||||||
2022
|
2021
|
|||||||||||||||
Net sales
|
||||||||||||||||
Product
|
$
|
385,676
|
$
|
344,766
|
$
|
40,910
|
11.9
|
%
|
||||||||
Services
|
63,109
|
55,592
|
7,517
|
13.5
|
%
|
|||||||||||
Total
|
448,785
|
400,358
|
48,427
|
12.1
|
%
|
|||||||||||
Cost of sales
|
||||||||||||||||
Product
|
302,508
|
271,015
|
31,493
|
11.6
|
%
|
|||||||||||
Services
|
40,626
|
33,910
|
6,716
|
19.8
|
%
|
|||||||||||
Total
|
343,134
|
304,925
|
38,209
|
12.5
|
%
|
|||||||||||
Gross profit
|
105,651
|
95,433
|
10,218
|
10.7
|
%
|
|||||||||||
Selling, general, and administrative
|
73,112
|
66,153
|
6,959
|
10.5
|
%
|
|||||||||||
Depreciation and amortization
|
3,182
|
3,898
|
(716
|
)
|
(18.4
|
%)
|
||||||||||
Interest and financing costs
|
138
|
159
|
(21
|
)
|
(13.2
|
%)
|
||||||||||
Operating expenses
|
76,432
|
70,210
|
6,222
|
8.9
|
%
|
|||||||||||
Operating income
|
$
|
29,219
|
$
|
25,223
|
$
|
3,996
|
15.8
|
%
|
||||||||
Adjusted gross billings
|
$
|
701,943
|
$
|
633,007
|
$
|
68,936
|
10.9
|
%
|
||||||||
Adjusted EBITDA
|
$
|
34,254
|
$
|
30,958
|
$
|
3,296
|
10.6
|
%
|
Twelve Months Ended June 30,
|
Change
|
|||||||||||
Net sales by customer end market:
|
2022
|
2021
|
||||||||||
Telecom, Media & Entertainment
|
29
|
%
|
27
|
%
|
2
|
%
|
||||||
Healthcare
|
16
|
%
|
13
|
%
|
3
|
%
|
||||||
Technology
|
14
|
%
|
16
|
%
|
(2
|
%)
|
||||||
SLED
|
14
|
%
|
15
|
%
|
(1
|
%)
|
||||||
Financial Services
|
9
|
%
|
12
|
%
|
(3
|
%)
|
||||||
All others
|
18
|
%
|
17
|
%
|
1
|
%
|
||||||
Total
|
100
|
%
|
100
|
%
|
Twelve Months Ended June 30,
|
Change
|
|||||||||||
Net sales by vendor:
|
2022
|
2021
|
||||||||||
Cisco Systems
|
37
|
%
|
37
|
%
|
0
|
%
|
||||||
Dell EMC
|
10
|
%
|
7
|
%
|
3
|
%
|
||||||
Juniper Networks
|
5
|
%
|
7
|
%
|
(2
|
%)
|
||||||
NetApp
|
5
|
%
|
3
|
%
|
2
|
%
|
||||||
Arista Networks
|
2
|
%
|
4
|
%
|
(2
|
%)
|
||||||
All others
|
41
|
%
|
42
|
%
|
(1
|
%)
|
||||||
Total
|
100
|
%
|
100
|
%
|
Three Months Ended June 30,
|
Change
|
|||||||||||||||
2022
|
2021
|
|||||||||||||||
Net sales
|
$
|
9,574
|
$
|
16,291
|
$
|
(6,717
|
)
|
(41.2
|
%)
|
|||||||
Cost of sales
|
1,702
|
6,212
|
(4,510
|
)
|
(72.6
|
%)
|
||||||||||
Gross profit
|
7,872
|
10,079
|
(2,207
|
)
|
(21.9
|
%)
|
||||||||||
Selling, general, and administrative
|
3,655
|
2,622
|
1,033
|
39.4
|
%
|
|||||||||||
Depreciation and amortization
|
28
|
28
|
-
|
0.0
|
%
|
|||||||||||
Interest and financing costs
|
225
|
200
|
25
|
12.5
|
%
|
|||||||||||
Operating expenses
|
3,908
|
2,850
|
1,058
|
37.1
|
%
|
|||||||||||
Operating income
|
$
|
3,964
|
$
|
7,229
|
$
|
(3,265
|
)
|
(45.2
|
%)
|
|||||||
Adjusted EBITDA
|
$
|
4,050
|
$
|
7,314
|
$
|
(3,264
|
)
|
(44.6
|
%)
|
Three Months Ended June 30,
|
||||||||
2022
|
2021
|
|||||||
Net cash used in operating activities
|
$
|
(102,943
|
)
|
$
|
(65,136
|
)
|
||
Net cash used in investing activities
|
(1,692
|
)
|
(6,151
|
)
|
||||
Net cash provided by financing activities
|
31,111
|
35,494
|
||||||
Effect of exchange rate changes on cash
|
1,634
|
71
|
||||||
Net decrease in cash and cash equivalents
|
$
|
(71,890
|
)
|
$
|
(35,722
|
)
|
Three Months Ended June 30,
|
||||||||
2022
|
2021
|
|||||||
Technology segment
|
$
|
(104,645
|
)
|
$
|
(65,980
|
)
|
||
Financing segment
|
1,702
|
844
|
||||||
Net cash provided by (used in) operating activities
|
$
|
(102,943
|
)
|
$
|
(65,136
|
)
|
As of June 30,
|
||||||||
2022
|
2021
|
|||||||
(DSO) Days sales outstanding (1)
|
61
|
61
|
||||||
(DIO) Days inventory outstanding (2)
|
30
|
13
|
||||||
(DPO) Days payable outstanding (3)
|
(45
|
)
|
(42
|
)
|
||||
Cash conversion cycle
|
46
|
32
|
(1) |
Represents the rolling three month average of the balance of trade accounts receivable-trade, net for our technology segment at the end of the period divided by adjusted gross billings for the same three month period.
|
(2) |
Represents the rolling three month average of the balance of inventory, net for our technology segment at the end of the period divided by cost of adjusted gross billings for the same three month period.
|
(3) |
Represents the rolling three month average of the combined balance of accounts payable-trade and accounts payable-floor plan for our technology segment at the end of the period divided by cost of adjusted gross billings for the same
three month period.
|
Item 3. |
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
Item 4. |
CONTROLS AND PROCEDURES
|
Item 1. |
LEGAL PROCEEDINGS
|
Item 1A. |
RISK FACTORS
|
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, 2022 through April 30, 2022
|
34,961
|
$
|
56.02
|
34,961
|
737,049
|
(2
|
)
|
||||||||||||
May 1, 2022 through May 27, 2022
|
35,512
|
$
|
55.86
|
35,512
|
701,537
|
(3
|
)
|
||||||||||||
May 28, 2022 through May 31, 2022
|
-
|
$
|
-
|
-
|
1,000,000
|
(4
|
)
|
||||||||||||
June 1, 2022 through June 30, 2022
|
58,080
|
$
|
56.51
|
-
|
1,000,000
|
(5
|
)
|
(1) |
All shares acquired were in open-market purchases, except for 58,080 shares, which were repurchased in June 2022 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, 2022, had purchase limitations on the number of shares of up to 1,000,000 shares. As of April 30, 2022, the remaining authorized shares to be purchased were 737,049.
|
(3) |
As of May 27, 2022, the authorization under the then-existing share repurchase plan expired.
|
(4) |
On March 24, 2022, the board of directors authorized the company to repurchase up to 1,000,000 shares of our outstanding common stock commencing on May 28, 2022, and continuing to May 27, 2023. As of May 31, 2022, the remaining
authorized shares to be purchased were 1,000,000.
|
(5) |
The share purchase authorization in place for the month ended June 30, 2022, had purchase limitations on the number of shares of up to 1,000,000 shares. As of June 30, 2022, the remaining authorized shares to be purchased were 1,000,000.
|
Item 3. |
DEFAULTS UPON SENIOR SECURITIES
|
Item 5. |
OTHER INFORMATION
|
Item 6. |
EXHIBITS
|
Exhibit Number
|
Exhibit Description
|
|
ePlus inc. Amended and Restated Certificate of Incorporation, as last amended November 9, 2021 (Incorporated herein by reference to Exhibit 3.1 to our Quarterly Report on
Form 10-Q for the period ended December 31, 2021).
|
||
Amended and Restated Bylaws of ePlus inc., as of March 2, 2022. (Incorporated herein by reference to Exhibit 3.2 to our Annual Report on Form 10-K for the fiscal year
ended March 31, 2022)
|
||
Certification of the Chief Executive Officer of ePlus inc. pursuant to the Securities Exchange Act Rules 13a-14(a) and 15d-14(a).
|
||
Certification of the Chief Financial Officer of ePlus inc. pursuant to the Securities Exchange Act Rules 13a-14(a) and 15d-14(a).
|
||
Certification of the Chief Executive Officer and Chief Financial Officer of ePlus inc. pursuant to 18 U.S.C. § 1350.
|
||
101.INS
|
Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document)
|
|
101.SCH
|
Inline XBRL Taxonomy Extension Schema Document
|
|
101.CAL
|
Inline XBRL Taxonomy Extension Calculation Linkbase Document
|
|
101.DEF
|
Inline XBRL Taxonomy Extension Definition Linkbase Document
|
|
101.LAB
|
Inline XBRL Taxonomy Extension Label Linkbase Document
|
|
101.PRE
|
Inline XBRL Taxonomy Extension Presentation Linkbase Document
|
|
104
|
Cover Page Interactive Data File (embedded within the Exhibit 101 Inline XBRL document)
|
ePlus inc.
|
||
Date: August 3, 2022
|
/s/ MARK P. MARRON
|
|
By: Mark P. Marron
|
||
Chief Executive Officer and President
|
||
(Principal Executive Officer)
|
Date: August 3, 2022
|
/s/ ELAINE D. MARION
|
|
By: Elaine D. Marion
|
||
Chief Financial Officer
|
||
(Principal Financial Officer)
|
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.
|
/s/ MARK P. MARRON
|
|
Mark P. Marron
|
|
Chief Executive Officer and President
|
|
(Principal Executive Officer)
|
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.
|
/s/ ELAINE D. MARION
|
|
Elaine D. Marion
|
|
Chief Financial Officer
|
|
(Principal Financial Officer)
|
a) |
the Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
|
b) |
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of ePlus inc.
|
/s/ MARK P. MARRON
|
|
Mark P. Marron, Chief Executive Officer
and President
|
|
(Principal Executive Officer)
|
/s/ ELAINE D. MARION
|
|
Elaine D. Marion, Chief Financial Officer
|
|
(Principal Financial Officer)
|
UNAUDITED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares shares in Thousands |
Jun. 30, 2022 |
Mar. 31, 2022 |
---|---|---|
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 outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 50,000 | 50,000 |
Common stock, shares outstanding (in shares) | 26,893 | 26,886 |
Treasury stock, shares (in shares) | 258 | 130 |
UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
|
UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME [Abstract] | ||
NET EARNINGS | $ 22,339 | $ 23,518 |
OTHER COMPREHENSIVE INCOME, NET OF TAX: | ||
Foreign currency translation adjustments | (1,339) | 66 |
Other comprehensive income (loss) | (1,339) | 66 |
TOTAL COMPREHENSIVE INCOME | $ 21,000 | $ 23,584 |
UNAUDITED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) shares in Thousands, $ 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, 2021 | $ 145 | $ 152,366 | $ (75,372) | $ 484,616 | $ 655 | $ 562,410 |
Balance (in shares) at Mar. 31, 2021 | 27,006 | |||||
Issuance of restricted stock awards | $ 1 | 0 | 0 | 0 | 0 | 1 |
Issuance of restricted stock awards (in shares) | 156 | |||||
Share-based compensation | $ 0 | 1,735 | 0 | 0 | 0 | 1,735 |
Share-based compensation (in shares) | 0 | |||||
Repurchase of common stock | $ 0 | 0 | $ (4,111) | 0 | 0 | (4,111) |
Repurchase of common stock (in shares) | (90) | |||||
Net earnings | 0 | 0 | $ 0 | 23,518 | 0 | 23,518 |
Foreign currency translation adjustment | 0 | 0 | 0 | 0 | 66 | 66 |
Balance at Jun. 30, 2021 | $ 146 | 154,101 | (79,483) | 508,134 | 721 | 583,619 |
Balance (in shares) at Jun. 30, 2021 | 27,072 | |||||
Balance at Mar. 31, 2022 | $ 270 | 159,480 | (6,734) | 507,846 | (124) | $ 660,738 |
Balance (in shares) at Mar. 31, 2022 | 26,886 | 26,886 | ||||
Issuance of restricted stock awards | $ 1 | 0 | 0 | 0 | 0 | $ 1 |
Issuance of restricted stock awards (in shares) | 135 | |||||
Share-based compensation | $ 0 | 1,773 | 0 | 0 | 0 | 1,773 |
Share-based compensation (in shares) | 0 | |||||
Repurchase of common stock | $ 0 | 0 | $ (7,224) | 0 | 0 | (7,224) |
Repurchase of common stock (in shares) | (128) | |||||
Net earnings | 0 | 0 | $ 0 | 22,339 | 0 | 22,339 |
Foreign currency translation adjustment | 0 | 0 | 0 | 0 | (1,339) | (1,339) |
Balance at Jun. 30, 2022 | $ 271 | $ 161,253 | $ (13,958) | $ 530,185 | $ (1,463) | $ 676,288 |
Balance (in shares) at Jun. 30, 2022 | 26,893 | 26,893 |
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
3 Months Ended | ||
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Jun. 30, 2022 | |||
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |||
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
DESCRIPTION OF BUSINESS — 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.” ePlus inc. is a holding company that through its subsidiaries provides information technology solutions
that enable organizations to optimize their IT environment and supply chain processes. We also provide consulting, professional, and managed services and complete lifecycle management services including flexible financing solutions. We focus on
selling to medium and large enterprises in North America, the United Kingdom (“UK”), and other European countries.
BASIS OF PRESENTATION — The unaudited consolidated financial statements include the accounts of ePlus inc. and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. The accounts of businesses
acquired are included in the unaudited consolidated financial statements from the dates of acquisition.
INTERIM FINANCIAL STATEMENTS — The unaudited consolidated financial statements for the three months ended June 30, 2022, and 2021, were prepared by us and 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 months ended June 30, 2022, and 2021, are not necessarily indicative of results that may be expected for any other interim period or for the full fiscal year ended March 31, 2023, or any other future period. These unaudited consolidated
financial statements do not include all disclosures required by the accounting principles generally accepted in the United States (“US 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, 2022 (“2022 Annual Report”), which should be read in conjunction with these interim consolidated financial statements.
USE OF ESTIMATES — The preparation of financial statements in conformity with US GAAP requires
management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities as of 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 intangible assets, allowance 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.
CONCENTRATIONS OF RISK — A substantial portion of our sales are products from Cisco Systems, which were 35% of our technology segment’s net sales for the three months ended June 30, 2022, and 42%
for the three months ended June 30, 2021.
SIGNIFICANT ACCOUNTING POLICIES — The significant accounting policies used in preparing these Consolidated
Financial Statements were applied on a basis consistent with those reflected in our Consolidated Financial Statements for the year ended March 31, 2022.
STOCK
SPLIT — On December 13, 2021, we completed a two-for-one stock split in the form of a stock dividend. References made to outstanding
shares or per share amounts in the accompanying financial statements and disclosures have been retroactively adjusted for this stock split.
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REVENUES |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
REVENUES [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
REVENUES |
CONTRACT BALANCES
Accounts receivable – trade consists entirely of amounts due from contracts with customers. In addition, we
had $57.1 million and $47.5 million of receivables from contracts with customers included within financing
receivables as of June 30, 2022, and March 31, 2022, respectively. The following table provides the balance
of contract liabilities from contracts with customers (in thousands):
Revenue recognized from the beginning contract liability balance was $24.9
million and $21.5 million for the three months ended June 30, 2022, and 2021, respectively.
PERFORMANCE OBLIGATIONS
The following table includes revenue expected to be recognized in the future related to performance
obligations, primarily non-cancelable contracts for ePlus managed services, that are
unsatisfied or partially unsatisfied at the end of the reporting period (in thousands):
The table does not include the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less, and (ii) contracts where
we recognize revenue at the amount that we have the right to invoice for services performed.
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FINANCING RECEIVABLES AND OPERATING LEASES |
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FINANCING RECEIVABLES AND OPERATING LEASES [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FINANCING RECEIVABLES AND OPERATING LEASES |
Our financing receivables and operating leases consist primarily of leases of IT
and communication equipment and notes receivable from financing customer purchases of third-party software, maintenance, and services. Our leases often include
elections for the lessee to purchase the underlying asset at the end of the lease term. Often, our leases provide the lessee a bargain purchase option.
The following table provides the profit recognized for sales-type leases at their commencement date, including modifications that are recognized on a net
basis, for the three months ended June 30, 2022, and 2021 (in thousands):
The following table provides interest income in aggregate on our sales-type leases and lease income on our operating
leases for the three months ended June 30, 2022, and 2021 (in thousands):
FINANCING RECEIVABLES—NET
The following tables provide a disaggregation of our financing receivables – net
(in thousands):
OPERATING LEASES—NET
Operating leases—net represents leases that do not qualify as sales-type leases. The components of the operating leases—net are as follows (in thousands):
TRANSFERS OF FINANCIAL ASSETS
We enter into arrangements to transfer the contractual payments due under financing receivables and operating lease agreements, which are accounted for as
sales or secured borrowings.
For transfers accounted for as a secured borrowing, the corresponding investments serve as collateral for non-recourse notes payable. As of June 30, 2022, and
March 31, 2022, we had financing receivables of $29.0 million and $21.1 million, respectively, and operating leases of $1.8 million
and $2.0 million, respectively, which were collateral for non-recourse notes payable. See Note 7, “Credit Facility and Notes Payable.”
For transfers accounted for as a sale, we derecognize the carrying value of the asset transferred plus any liability and recognize a net gain or loss on the
sale, which are presented within net sales in the consolidated statement of operations. During the three months ended June 30, 2022, and 2021, we recognized net gains of $1.8 million and $3.2 million, respectively, and total proceeds from these sales were $52.5 million and $75.3 million,
respectively.
When we retain servicing obligations in transfers accounted for as sales, we allocate a portion of the proceeds to deferred revenue, which is recognized as we
perform the services. As of June 30, 2022, and March 31, 2022, we had deferred revenue of $0.4 million and $0.5 million, respectively, for servicing obligations.
In a limited number of transfers accounted for as sales, we indemnified the
assignee if the lessee elects to early terminate the lease. As of June 30, 2022, and March 31, 2022, the total potential payments that could result from these indemnities is immaterial.
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LESSEE ACCOUNTING |
3 Months Ended | ||
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Jun. 30, 2022 | |||
LESSEE ACCOUNTING [Abstract] | |||
LESSEE ACCOUNTING |
We lease office space for periods up to six years. We
recognize our right-of-use assets as part of property, equipment, and other assets. We recognize the current and long-term portions of our lease liability as part of other current liabilities and other liabilities, respectively. We recognized rent
expense as part of selling, general and administrative expenses. We recognized rent expense of $1.3 million for both the three months
ended June 30, 2022, and June 30, 2021.
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GOODWILL AND OTHER INTANGIBLE ASSETS |
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GOODWILL AND OTHER INTANGIBLE ASSETS [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
GOODWILL AND OTHER INTANGIBLE ASSETS |
GOODWILL
The following table summarizes the changes in the carrying amount of goodwill for
the three months ended June 30, 2022 (in thousands):
Goodwill represents the premium paid over the fair value of the net tangible and
intangible assets that are individually identified and separately recognized in business combinations. Our entire balance as of June 30, 2022, relates to our technology segment, which we also determined to be one reporting unit. The change in our goodwill balance during the three
months ended June 30, 2022, is due solely to foreign currency translation.
We test goodwill for impairment on an annual basis, as of the first day of our
third fiscal quarter, and between annual tests if an event occurs, or circumstances change, that would more likely than not reduce the fair value of a reporting unit below its carrying value. In our annual test as of October 1, 2021, we
performed a qualitative assessment of goodwill and concluded that, more likely than not, the fair value of our technology reporting unit continued to substantially exceed its carrying value.
OTHER INTANGIBLE ASSETS
Our other intangible assets consist of the following on June 30, 2022, and March
31, 2022 (in thousands):
Customer relationships and other intangibles are generally amortized between 5 to 10 years. Capitalized software development is generally amortized over 5 years.
Total amortization expense for customer relationships and other intangible
assets was $2.2 million and $2.7 million for the three months ended June 30, 2022, and June 30, 2021,
respectively.
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ALLOWANCE FOR CREDIT LOSSES |
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ALLOWANCE FOR CREDIT LOSSES [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ALLOWANCE FOR CREDIT LOSSES |
The following table provides the activity in our allowance for credit losses for the three months ended June 30, 2022, and 2021 (in thousands):
We evaluate our customers using an
internally assigned credit quality rating “CQR”. The CQR categories of our financing receivables are:
The following table provides the amortized cost basis of our financing receivables by CQR and by credit origination year as of June 30, 2022 (in thousands):
The following table provides the amortized cost basis of our financing receivables by CQR and by credit origination year as of March 31, 2022 (in thousands):
The following table provides an aging analysis of our financing receivables as of June 30, 2022 (in thousands):
The following table provides an aging analysis of our financing receivables as of March 31, 2022 (in thousands):
Our financial assets on nonaccrual status were not significant as of June 30, 2022, and March 31, 2022.
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CREDIT FACILITY AND NOTES PAYABLE |
3 Months Ended | ||
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Jun. 30, 2022 | |||
CREDIT FACILITY AND NOTES PAYABLE [Abstract] | |||
CREDIT FACILITY AND NOTES PAYABLE |
CREDIT FACILITY
We finance the operations of our subsidiaries
ePlus Technology, inc., ePlus Technology Services, inc., and SLAIT Consulting, LLC (collectively, the “Borrowers”) in our technology segment through a credit facility with Wells Fargo Commercial Distribution Finance, LLC (“WFCDF”). The WFCDF credit
facility has a floor plan facility and a revolving credit facility.
Under the floor plan facility, we had an outstanding balance of $138.0 million and $145.3 million as of June 30, 2022, and March 31, 2022, respectively. On our balance sheet, our liability under the floor plan facility is presented as
accounts payable – floor plan.
Under the revolving credit facility, we had $40.0
million outstanding as of June 30, 2022, and no balance outstanding as of March 31, 2022. On our balance sheet, our liability under the
revolving credit facility is presented as part of recourse notes payable – current.
The
fair value of the outstanding balances under the WFCDF credit facility were approximately equal to their carrying value as of June 30, 2022, and March 31, 2022.
On
October 13, 2021, the Borrowers amended, restated, and replaced in entirety their then-existing credit agreements with WFCDF. The new credit facility is established by a syndicate of banks for which WFCDF acts as administrative agent and consists
of a discretionary senior secured floorplan facility in favor of the Borrowers in the aggregate principal amount of up to $375 million,
an increase from $275 million, together with a sublimit for a revolving credit facility for up to $100 million (collectively, the “2021 Credit Facility”).
The amount of principal
available is subject to a borrowing base determined by, among other things, the Borrowers’ accounts receivable and inventory, each pursuant to a formula and subject to certain reserves. Loans accrue interest at a rate per annum equal to LIBOR
plus 1.75%. The LIBOR rate is based upon one-month, three-month, six-month, and 12-month LIBOR periods, as selected by the Borrowers, and subject to a floor of 0.00%.
Our borrowings under the 2021 Credit Facility are secured by the assets of the Borrowers. Additionally, the 2021 Credit Facility requires a guaranty
of $10.5 million by ePlus inc.
Under the 2021 Credit Facility, and under the predecessor WFCDF credit facility, the Borrowers are restricted in their ability to pay dividends to ePlus inc. unless their available borrowing meets or met certain thresholds. As of June 30, 2022, and March 31, 2022, their available borrowing met the thresholds
such that there were no restrictions on their ability to pay dividends.
The 2021 Credit Facility has an initial one-year
term, which automatically renews for successive one-year terms thereafter. However, either the Borrowers or WFCDF may terminate by
providing a written termination notice to the other party no less than 90 days prior to such termination.
RECOURSE NOTES PAYABLE
Recourse notes payable consist of borrowings that, in the event of default, the lender has recourse against us. As of June 30, 2022, we had $51.4 million in recourse borrowings consisting of $40.0 million outstanding under
our revolving WFCDF credit facility, and $11.4 million arising from one installment payment arrangement within our technology segment. Our
payments under this installment agreement are due quarterly in amounts that are correlated to the payments due to us from a customer under a related notes receivable. We discounted our payments due under this installment agreement to calculate our
payable balance using an interest rate of 3.50% as of both June 30, 2022, and March 31, 2022.
NON-RECOURSE NOTES PAYABLE
Non-recourse notes payable
consists of borrowings that, 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. As of June 30, 2022, and March 31, 2022, we had $26.4 million and $21.2 million, respectively,
of non-recourse borrowings that were collateralized by investments in notes and leases. Principal and interest payments are generally due 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 3.78% and 3.59%, as of June 30, 2022, and March 31, 2022, respectively.
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COMMITMENTS AND CONTINGENCIES |
3 Months Ended | ||
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Jun. 30, 2022 | |||
COMMITMENTS AND CONTINGENCIES [Abstract] | |||
COMMITMENTS AND CONTINGENCIES |
LEGAL PROCEEDINGS
We are subject to various legal proceedings, as well as demands, claims and threatened litigation, that
arise in the normal course of our business and have not been fully resolved. The ultimate outcome of any litigation or any other legal dispute is uncertain. When a loss related to a legal proceeding or claim is probable and reasonably estimable,
we accrue our best estimate for the ultimate resolution of the matter. If one or more legal matters are resolved against us in a reporting period for amounts above management’s expectations, our financial condition and operating results for that
period could be adversely affected. As of June 30, 2022, we do not believe that there is a reasonable possibility that any material loss exceeding the amounts already recognized for these proceedings and matters, if any, has been incurred. Any
outcome, whether favorable or unfavorable, may materially and adversely affect us due to legal costs and expenses, diversion of management attention and other factors. We expense legal costs in the period incurred. We cannot assure that
additional contingencies of a legal nature or contingencies having legal aspects will not be asserted against the us in the future, and these matters could relate to prior, current, or future transactions or events.
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EARNINGS PER SHARE |
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EARNINGS PER SHARE [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
EARNINGS PER SHARE |
Basic earnings per share is calculated by dividing net earnings available to common shareholders by the basic weighted average number of shares of common
stock outstanding during each period. Diluted earnings per share is calculated by dividing net earnings available to common shareholders by the basic weighted average number of shares of common stock outstanding plus common stock equivalents during
each period.
The following table provides a reconciliation of the numerators and denominators used to calculate basic and diluted net income per common share as disclosed
on our unaudited consolidated statements of operations for the three months ended June 30, 2022, and 2021, respectively (in thousands, except per share data).
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STOCKHOLDERS' EQUITY |
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Jun. 30, 2022 | |||
STOCKHOLDERS' EQUITY [Abstract] | |||
STOCKHOLDERS' EQUITY |
SHARE REPURCHASE PLAN
On March 24, 2022, our board of directors authorized the repurchase of up to 1,000,000 shares of our
outstanding common stock, over a 12-month period beginning May 28, 2022. On March 18, 2021, our board of directors authorized the repurchase of up to 1,000,000 shares of our outstanding common stock, over a 12-month period beginning May 28, 2021. Under both authorized programs, purchases may be made from time to time in the open market, or in privately
negotiated transactions, subject to availability. Any repurchased shares will have the status of treasury shares and may be used, when needed, for general corporate purposes.
During the three months ended June 30, 2022, we
purchased 70,473 shares of our outstanding common stock at a value of $3.9 million under the share repurchase plan; we also purchased 58,080
shares of common stock at a value of $3.3 million to satisfy tax withholding obligations relating to the vesting of employees’ restricted
stock.
During the three months ended June 30, 2021, we
purchased 35,258 shares of our outstanding common stock at a value of $1.6 million under the share repurchase plan; we also purchased 55,430
shares of common stock at a value of $2.6 million to satisfy tax withholding obligations relating to the vesting of employees’ restricted
stock.
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SHARE-BASED COMPENSATION |
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Jun. 30, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SHARE-BASED COMPENSATION [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SHARE-BASED COMPENSATION |
SHARE-BASED PLANS
As
of June 30, 2022, we had share-based awards outstanding under the following plans: (1) the 2017 Non-Employee Director Long-Term Incentive Plan (“2017 Director LTIP”), (2) the 2012 Employee Long-Term Incentive Plan (“2012 Employee LTIP”), and (3)
the 2021 Employee Long-Term Incentive Plan (“2021 Employee LTIP”).
The
2021 Employee LTIP was approved by our shareholders on September 16, 2021, and became effective October 1, 2021. The 2021 Employee LTIP replaced the 2012 Employee LTIP that had previously been approved by our stockholders on September 13, 2012.
Beginning September 16, 2021, we permanently ceased issuing any additional shares under the 2012 Employee LTIP.
These share-based plans define fair market value as the closing sales price of a share of common stock as quoted on any established stock exchange for such date or the most
recent trading day preceding such date if there were no trades on such date.
RESTRICTED STOCK ACTIVITY
For the three months ended June 30, 2022, we granted 774 shares under the 2017 Director LTIP, and 138,643 restricted shares under the 2021 Employee LTIP. For the three months ended June 30, 2021, we granted 828 shares under the 2017 Director LTIP, and 155,722 restricted
shares under the 2012 Employee LTIP. A summary of our restricted stock activity, is as follows:
COMPENSATION EXPENSE
We recognize compensation cost for awards of restricted stock with graded vesting on a straight-line basis over the requisite service period. There are no additional
conditions for vesting other than service conditions. During the three
months ended June 30, 2022, and 2021, we recognized $1.8 million and $1.7 million of total share-based compensation expense, respectively. Unrecognized compensation expense related to unvested restricted stock was $14.9 million as of June 30, 2022, which will be fully recognized over the next 36
months.
We also provide our employees with a contributory 401(k) profit sharing plan, to which we may contribute
from time to time at our sole discretion. Employer contributions to the plan are always fully vested. Our estimated contribution expense to the plan for the three months ended June 30, 2022, and 2021, was $1.1 million and $0.8 million, respectively.
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INCOME TAXES |
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Jun. 30, 2022 | |||
INCOME TAXES [Abstract] | |||
INCOME TAXES |
Our provision for income tax expense was $8.7 million for the three months ended June 30, 2022,
as compared to $9.1 million for the same period in the prior year. Our effective income tax rate for the three months ended June 30,
2022, was 28.0%, comparable to 27.8%
for the same period in the prior year. The effective tax rate for the three months ended June 30, 2022, and June 30, 2021, differed from the US federal statutory rate of 21.0% primarily due to state and local income taxes and non-deductible executive compensation.
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FAIR VALUE OF FINANCIAL INSTRUMENTS |
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FAIR VALUE OF FINANCIAL INSTRUMENTS [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FAIR VALUE OF FINANCIAL INSTRUMENTS |
The following table summarizes the fair value hierarchy of our financial instruments as of June 30, 2022, and March 31, 2022 (in thousands):
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BUSINESS COMBINATIONS |
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Jun. 30, 2022 | |||
BUSINESS COMBINATIONS [Abstract] | |||
BUSINESS COMBINATIONS |
FUTURE COM
On July 15, 2022, our
subsidiary, ePlus Technology, inc., acquired certain assets and liabilities of Future Com, Ltd., a Texas-based provider of cyber security solutions, cloud security and security consulting services throughout the US. Our acquisition provides
access to enhanced engineering, sales, and services delivery capabilities in the South-Central US region, as well as bolstering the skills and expertise surrounding ePlus’ growing cyber security practice. Our preliminary total consideration
transferred was $13.0 million, which was paid in cash at closing. As of our filing date, our initial accounting for the business
combination is incomplete.
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SEGMENT REPORTING |
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SEGMENT REPORTING [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SEGMENT REPORTING |
Our operations are conducted through two
operating segments that are also both reportable segments. Our technology segment includes sales of IT products, third-party software, third-party maintenance, advanced professional and managed services, and our proprietary software to commercial
enterprises, state and local governments, and government contractors. Our financing segment consists of the financing of IT equipment, software, and related services to commercial enterprises, state and local governments, and government contractors. We
measure the performance of the segments based on operating income.
Our reportable segment information for the three month periods ended June 30, 2022, and 2021 are summarized in the following table (in thousands):
TECHNOLOGY SEGMENT DISAGGREGATION OF REVENUE
We analyze net sales for our technology segment by customer end market and by vendor, as opposed to discrete product and service categories, which are
summarized below (in thousands):
FINANCING SEGMENT DISAGGREGATION OF REVENUE
We analyze our revenues within our financing segment based on the nature of the arrangement. Our financing revenue generally consists of portfolio income, transactional gains, and post-contract earnings including
month-to-month rents and the sales of off-lease equipment. All of our revenues from contracts with customers within our financing segment is from the sales of off-lease equipment.
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ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) |
3 Months Ended |
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Jun. 30, 2022 | |
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |
BASIS OF PRESENTATION |
BASIS OF PRESENTATION — The unaudited consolidated financial statements include the accounts of ePlus inc. and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. The accounts of businesses
acquired are included in the unaudited consolidated financial statements from the dates of acquisition.
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INTERIM FINANCIAL STATEMENTS |
INTERIM FINANCIAL STATEMENTS — The unaudited consolidated financial statements for the three months ended June 30, 2022, and 2021, were prepared by us and 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 months ended June 30, 2022, and 2021, are not necessarily indicative of results that may be expected for any other interim period or for the full fiscal year ended March 31, 2023, or any other future period. These unaudited consolidated
financial statements do not include all disclosures required by the accounting principles generally accepted in the United States (“US 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, 2022 (“2022 Annual Report”), which should be read in conjunction with these interim consolidated financial statements.
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USE OF ESTIMATES |
USE OF ESTIMATES — The preparation of financial statements in conformity with US GAAP requires
management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities as of 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 intangible assets, allowance 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.
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CONCENTRATIONS OF RISK |
CONCENTRATIONS OF RISK — A substantial portion of our sales are products from Cisco Systems, which were 35% of our technology segment’s net sales for the three months ended June 30, 2022, and 42%
for the three months ended June 30, 2021.
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STOCK SPLIT |
STOCK
SPLIT — On December 13, 2021, we completed a two-for-one stock split in the form of a stock dividend. References made to outstanding
shares or per share amounts in the accompanying financial statements and disclosures have been retroactively adjusted for this stock split.
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REVENUES (Tables) |
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Jun. 30, 2022 | |||||||||||||||||||||||||||||||
REVENUES [Abstract] | |||||||||||||||||||||||||||||||
Balance of Receivables, Contract Assets, and Contract Liabilities |
Accounts receivable – trade consists entirely of amounts due from contracts with customers. In addition, we
had $57.1 million and $47.5 million of receivables from contracts with customers included within financing
receivables as of June 30, 2022, and March 31, 2022, respectively. The following table provides the balance
of contract liabilities from contracts with customers (in thousands):
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Remaining Performance Obligations |
The following table includes revenue expected to be recognized in the future related to performance
obligations, primarily non-cancelable contracts for ePlus managed services, that are
unsatisfied or partially unsatisfied at the end of the reporting period (in thousands):
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FINANCING RECEIVABLES AND OPERATING LEASES (Tables) |
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FINANCING RECEIVABLES AND OPERATING LEASES [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Sales-type Leases |
The following table provides the profit recognized for sales-type leases at their commencement date, including modifications that are recognized on a net
basis, for the three months ended June 30, 2022, and 2021 (in thousands):
The following table provides interest income in aggregate on our sales-type leases and lease income on our operating
leases for the three months ended June 30, 2022, and 2021 (in thousands):
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Notes Receivable Net and Investments in Leases |
The following tables provide a disaggregation of our financing receivables – net
(in thousands):
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Investment in Operating Lease Equipment - Net |
Operating leases—net represents leases that do not qualify as sales-type leases. The components of the operating leases—net are as follows (in thousands):
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GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
GOODWILL AND OTHER INTANGIBLE ASSETS [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Changes in Goodwill |
The following table summarizes the changes in the carrying amount of goodwill for
the three months ended June 30, 2022 (in thousands):
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Other Intangible Assets |
Our other intangible assets consist of the following on June 30, 2022, and March
31, 2022 (in thousands):
|
ALLOWANCE FOR CREDIT LOSSES (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ALLOWANCE FOR CREDIT LOSSES [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Activity in Reserves for Credit Losses |
The following table provides the activity in our allowance for credit losses for the three months ended June 30, 2022, and 2021 (in thousands):
|
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Amortized Cost Basis of Financing Receivables by Credit Quality Rating and Credit Origination Year |
The following table provides the amortized cost basis of our financing receivables by CQR and by credit origination year as of June 30, 2022 (in thousands):
The following table provides the amortized cost basis of our financing receivables by CQR and by credit origination year as of March 31, 2022 (in thousands):
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Aging Analysis of Financing Receivables |
The following table provides an aging analysis of our financing receivables as of June 30, 2022 (in thousands):
The following table provides an aging analysis of our financing receivables as of March 31, 2022 (in thousands):
|
EARNINGS PER SHARE (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 income per common share as disclosed
on our unaudited consolidated statements of operations for the three months ended June 30, 2022, and 2021, respectively (in thousands, except per share data).
|
SHARE-BASED COMPENSATION (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SHARE-BASED COMPENSATION [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Grants |
For the three months ended June 30, 2022, we granted 774 shares under the 2017 Director LTIP, and 138,643 restricted shares under the 2021 Employee LTIP. For the three months ended June 30, 2021, we granted 828 shares under the 2017 Director LTIP, and 155,722 restricted
shares under the 2012 Employee LTIP. A summary of our restricted stock activity, is as follows:
|
FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 June 30, 2022, and March 31, 2022 (in thousands):
|
SEGMENT REPORTING (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SEGMENT REPORTING [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting Information, by Reportable Segment |
Our reportable segment information for the three month periods ended June 30, 2022, and 2021 are summarized in the following table (in thousands):
|
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Technology Segment Disaggregation of Revenue |
We analyze net sales for our technology segment by customer end market and by vendor, as opposed to discrete product and service categories, which are
summarized below (in thousands):
|
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) |
3 Months Ended | ||
---|---|---|---|
Dec. 13, 2021 |
Jun. 30, 2022 |
Jun. 30, 2021 |
|
Stock Split [Abstract] | |||
Stock split, conversion ratio | 2 | ||
Net Sales [Member] | Product Concentration Risk [Member] | Cisco Systems [Member] | Technology Segment [Member] | |||
Concentration of risk [Abstract] | |||
Percentage of concentration risk | 35.00% | 42.00% |
LESSEE ACCOUNTING (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
|
Lessee, Operating Lease [Abstract] | ||
Rent expense | $ 1.3 | $ 1.3 |
Maximum [Member] | ||
Lessee, Operating Lease [Abstract] | ||
Operating lease term | 6 years |
GOODWILL AND OTHER INTANGIBLE ASSETS, Goodwill (Details) $ in Thousands |
3 Months Ended |
---|---|
Jun. 30, 2022
USD ($)
Unit
| |
Goodwill [Roll Forward] | |
Goodwill, Beginning Balance | $ 135,216 |
Goodwill, Impairment Loss, Beginning Balance | (8,673) |
Goodwill, Net Carrying Amount, Beginning Balance | 126,543 |
Foreign currency translations | (165) |
Goodwill, Ending Balance | 135,051 |
Goodwill, Impairment Loss, Ending Balance | (8,673) |
Goodwill, Net Carrying Amount, Ending Balance | $ 126,378 |
Number of reporting units | Unit | 1 |
GOODWILL AND OTHER INTANGIBLE ASSETS, Other Intangible Assets (Details) - USD ($) $ in Thousands |
3 Months Ended | ||
---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Mar. 31, 2022 |
|
Other Intangible Assets [Abstract] | |||
Gross carrying amount | $ 87,558 | $ 87,741 | |
Accumulated amortization | (62,790) | (60,491) | |
Net carrying amount | 24,768 | 27,250 | |
Customer Relationships and Other Intangibles [Member] | |||
Other Intangible Assets [Abstract] | |||
Gross carrying amount | 77,041 | 77,224 | |
Accumulated amortization | (54,101) | (52,087) | |
Net carrying amount | 22,940 | 25,137 | |
Total amortization expense | $ 2,200 | $ 2,700 | |
Customer Relationships and Other Intangibles [Member] | Minimum [Member] | |||
Other Intangible Assets [Abstract] | |||
Estimated useful life | 5 years | ||
Customer Relationships and Other Intangibles [Member] | Maximum [Member] | |||
Other Intangible Assets [Abstract] | |||
Estimated useful life | 10 years | ||
Capitalized Software Development [Member] | |||
Other Intangible Assets [Abstract] | |||
Gross carrying amount | $ 10,517 | 10,517 | |
Accumulated amortization | (8,689) | (8,404) | |
Net carrying amount | $ 1,828 | $ 2,113 | |
Capitalized Software Development [Member] | Minimum [Member] | |||
Other Intangible Assets [Abstract] | |||
Estimated useful life | 5 years |
ALLOWANCE FOR CREDIT LOSSES, Activity (Details) - USD ($) $ in Thousands |
3 Months Ended | ||||
---|---|---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
||||
Activity in reserves for credit losses [Roll Forward] | |||||
Balance | $ 3,800 | $ 4,447 | |||
Provision for credit losses | 698 | (261) | |||
Write-offs and other | (65) | (22) | |||
Balance | 4,433 | 4,164 | |||
Accounts Receivable [Member] | |||||
Activity in reserves for credit losses [Roll Forward] | |||||
Balance | 2,411 | 2,064 | |||
Provision for credit losses | 382 | (40) | |||
Write-offs and other | (65) | (22) | |||
Balance | 2,728 | 2,002 | |||
Notes Receivable [Member] | |||||
Activity in reserves for credit losses [Roll Forward] | |||||
Balance | 708 | [1] | 1,212 | ||
Provision for credit losses | 84 | 77 | |||
Write-offs and other | 0 | 0 | |||
Balance | 792 | [1] | 1,289 | ||
Lease Receivables [Member] | |||||
Activity in reserves for credit losses [Roll Forward] | |||||
Balance | 681 | [1] | 1,171 | ||
Provision for credit losses | 232 | (298) | |||
Write-offs and other | 0 | 0 | |||
Balance | $ 913 | [1] | $ 873 | ||
|
ALLOWANCE FOR CREDIT LOSSES, Amortized Cost Basis (Details) - USD ($) $ in Thousands |
3 Months Ended | |||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2022 |
Mar. 31, 2022 |
|||||||||||||||
Credit Risk Profile, Segregated by Class [Abstract] | ||||||||||||||||
2023/2022 | $ 51,738 | [1] | $ 69,671 | [2] | ||||||||||||
2022/2021 | 44,231 | [1] | 39,075 | [2] | ||||||||||||
2021/2020 | 33,528 | [1] | 5,295 | [2] | ||||||||||||
2020/2019 | 3,997 | [1] | 1,507 | [2] | ||||||||||||
2019/2018 | 980 | [1] | 127 | [2] | ||||||||||||
2018/2017 | 91 | [1] | 15 | [2] | ||||||||||||
Total | 134,565 | [1] | 115,690 | [2] | ||||||||||||
Transfers | (36,330) | [1],[3] | (38,769) | [2],[4] | ||||||||||||
Net credit exposure | 98,235 | [1] | 76,921 | |||||||||||||
Unguaranteed residual value | 5,607 | 6,424 | ||||||||||||||
Notes Receivable [Member] | ||||||||||||||||
Credit Risk Profile, Segregated by Class [Abstract] | ||||||||||||||||
2023/2022 | 30,256 | 44,186 | ||||||||||||||
2022/2021 | 25,663 | 30,981 | ||||||||||||||
2021/2020 | 26,985 | 2,055 | ||||||||||||||
2020/2019 | 1,715 | 558 | ||||||||||||||
2019/2018 | 210 | 5 | ||||||||||||||
2018/2017 | 3 | 4 | ||||||||||||||
Total | 84,832 | 77,789 | ||||||||||||||
Transfers | (32,611) | [3] | (35,037) | [4] | ||||||||||||
Net credit exposure | 52,221 | 42,752 | ||||||||||||||
Unguaranteed residual value | 0 | [5] | 0 | [6] | ||||||||||||
Lease Receivables [Member] | ||||||||||||||||
Credit Risk Profile, Segregated by Class [Abstract] | ||||||||||||||||
2023/2022 | 21,482 | 25,485 | ||||||||||||||
2022/2021 | 18,568 | 8,094 | ||||||||||||||
2021/2020 | 6,543 | 3,240 | ||||||||||||||
2020/2019 | 2,282 | 949 | ||||||||||||||
2019/2018 | 770 | 122 | ||||||||||||||
2018/2017 | 88 | 11 | ||||||||||||||
Total | 49,733 | 37,901 | ||||||||||||||
Transfers | (3,719) | [3] | (3,732) | [4] | ||||||||||||
Net credit exposure | 46,014 | 34,169 | ||||||||||||||
Unguaranteed residual value | $ 9,233 | [5] | 9,141 | [6] | ||||||||||||
High CQR [Member] | Maximum [Member] | ||||||||||||||||
Credit Risk Profile, Segregated by Class [Abstract] | ||||||||||||||||
Loss rate on credit quality rating | 1.00% | |||||||||||||||
High CQR [Member] | Notes Receivable [Member] | ||||||||||||||||
Credit Risk Profile, Segregated by Class [Abstract] | ||||||||||||||||
2023/2022 | $ 22,785 | 35,264 | ||||||||||||||
2022/2021 | 18,879 | 28,005 | ||||||||||||||
2021/2020 | 24,314 | 1,297 | ||||||||||||||
2020/2019 | 969 | 345 | ||||||||||||||
2019/2018 | 158 | 2 | ||||||||||||||
2018/2017 | 3 | 4 | ||||||||||||||
Total | 67,108 | 64,917 | ||||||||||||||
Transfers | (24,331) | [3] | (30,274) | [4] | ||||||||||||
Net credit exposure | 42,777 | 34,643 | ||||||||||||||
High CQR [Member] | Lease Receivables [Member] | ||||||||||||||||
Credit Risk Profile, Segregated by Class [Abstract] | ||||||||||||||||
2023/2022 | 14,828 | 14,549 | ||||||||||||||
2022/2021 | 9,539 | 5,002 | ||||||||||||||
2021/2020 | 4,209 | 2,499 | ||||||||||||||
2020/2019 | 1,809 | 902 | ||||||||||||||
2019/2018 | 731 | 50 | ||||||||||||||
2018/2017 | 44 | 11 | ||||||||||||||
Total | 31,160 | 23,013 | ||||||||||||||
Transfers | (3,531) | [3] | (3,385) | [4] | ||||||||||||
Net credit exposure | $ 27,629 | 19,628 | ||||||||||||||
Average CQR [Member] | Minimum [Member] | ||||||||||||||||
Credit Risk Profile, Segregated by Class [Abstract] | ||||||||||||||||
Loss rate on credit quality rating | 2.00% | |||||||||||||||
Average CQR [Member] | Maximum [Member] | ||||||||||||||||
Credit Risk Profile, Segregated by Class [Abstract] | ||||||||||||||||
Loss rate on credit quality rating | 10.00% | |||||||||||||||
Average CQR [Member] | Notes Receivable [Member] | ||||||||||||||||
Credit Risk Profile, Segregated by Class [Abstract] | ||||||||||||||||
2023/2022 | $ 7,471 | 8,922 | ||||||||||||||
2022/2021 | 6,784 | 2,976 | ||||||||||||||
2021/2020 | 2,671 | 758 | ||||||||||||||
2020/2019 | 746 | 213 | ||||||||||||||
2019/2018 | 52 | 3 | ||||||||||||||
2018/2017 | 0 | 0 | ||||||||||||||
Total | 17,724 | 12,872 | ||||||||||||||
Transfers | (8,280) | [3] | (4,763) | [4] | ||||||||||||
Net credit exposure | 9,444 | 8,109 | ||||||||||||||
Average CQR [Member] | Lease Receivables [Member] | ||||||||||||||||
Credit Risk Profile, Segregated by Class [Abstract] | ||||||||||||||||
2023/2022 | 6,654 | 10,936 | ||||||||||||||
2022/2021 | 9,029 | 3,092 | ||||||||||||||
2021/2020 | 2,334 | 741 | ||||||||||||||
2020/2019 | 473 | 47 | ||||||||||||||
2019/2018 | 39 | 72 | ||||||||||||||
2018/2017 | 44 | 0 | ||||||||||||||
Total | 18,573 | 14,888 | ||||||||||||||
Transfers | (188) | [3] | (347) | [4] | ||||||||||||
Net credit exposure | $ 18,385 | 14,541 | ||||||||||||||
Low CQR [Member] | Minimum [Member] | ||||||||||||||||
Credit Risk Profile, Segregated by Class [Abstract] | ||||||||||||||||
Loss rate on credit quality rating | 10.00% | |||||||||||||||
Low CQR [Member] | Maximum [Member] | ||||||||||||||||
Credit Risk Profile, Segregated by Class [Abstract] | ||||||||||||||||
Loss rate on credit quality rating | 100.00% | |||||||||||||||
Low CQR [Member] | Notes Receivable [Member] | ||||||||||||||||
Credit Risk Profile, Segregated by Class [Abstract] | ||||||||||||||||
2023/2022 | $ 0 | 0 | ||||||||||||||
2022/2021 | 0 | 0 | ||||||||||||||
2021/2020 | 0 | 0 | ||||||||||||||
2020/2019 | 0 | 0 | ||||||||||||||
2019/2018 | 0 | 0 | ||||||||||||||
2018/2017 | 0 | 0 | ||||||||||||||
Total | 0 | 0 | ||||||||||||||
Transfers | 0 | [3] | 0 | [4] | ||||||||||||
Net credit exposure | 0 | 0 | ||||||||||||||
Low CQR [Member] | Lease Receivables [Member] | ||||||||||||||||
Credit Risk Profile, Segregated by Class [Abstract] | ||||||||||||||||
2023/2022 | 0 | 0 | ||||||||||||||
2022/2021 | 0 | 0 | ||||||||||||||
2021/2020 | 0 | 0 | ||||||||||||||
2020/2019 | 0 | 0 | ||||||||||||||
2019/2018 | 0 | 0 | ||||||||||||||
2018/2017 | 0 | 0 | ||||||||||||||
Total | 0 | 0 | ||||||||||||||
Transfers | 0 | [3] | 0 | [4] | ||||||||||||
Net credit exposure | $ 0 | $ 0 | ||||||||||||||
|
ALLOWANCE FOR CREDIT LOSSES, Aging Analysis (Details) - USD ($) $ in Thousands |
Jun. 30, 2022 |
Mar. 31, 2022 |
||||||
---|---|---|---|---|---|---|---|---|
Age of the Recorded Notes Receivable Balance Disaggregated Based on Internally Assigned CQR [Abstract] | ||||||||
Billed | $ 8,263 | $ 7,063 | ||||||
Unbilled | 126,302 | 108,627 | ||||||
Total | 134,565 | [1] | 115,690 | [2] | ||||
Notes Receivable [Member] | ||||||||
Age of the Recorded Notes Receivable Balance Disaggregated Based on Internally Assigned CQR [Abstract] | ||||||||
Billed | 6,413 | 5,554 | ||||||
Unbilled | 78,419 | 72,235 | ||||||
Total | 84,832 | 77,789 | ||||||
Lease Receivables [Member] | ||||||||
Age of the Recorded Notes Receivable Balance Disaggregated Based on Internally Assigned CQR [Abstract] | ||||||||
Billed | 1,850 | 1,509 | ||||||
Unbilled | 47,883 | 36,392 | ||||||
Total | 49,733 | 37,901 | ||||||
Past Due [Member] | ||||||||
Age of the Recorded Notes Receivable Balance Disaggregated Based on Internally Assigned CQR [Abstract] | ||||||||
Total | 1,735 | 1,117 | ||||||
Past Due [Member] | Notes Receivable [Member] | ||||||||
Age of the Recorded Notes Receivable Balance Disaggregated Based on Internally Assigned CQR [Abstract] | ||||||||
Total | 790 | 247 | ||||||
Past Due [Member] | Lease Receivables [Member] | ||||||||
Age of the Recorded Notes Receivable Balance Disaggregated Based on Internally Assigned CQR [Abstract] | ||||||||
Total | 945 | 870 | ||||||
31 to 60 Days Past Due [Member] | ||||||||
Age of the Recorded Notes Receivable Balance Disaggregated Based on Internally Assigned CQR [Abstract] | ||||||||
Total | 508 | 302 | ||||||
31 to 60 Days Past Due [Member] | Notes Receivable [Member] | ||||||||
Age of the Recorded Notes Receivable Balance Disaggregated Based on Internally Assigned CQR [Abstract] | ||||||||
Total | 268 | 187 | ||||||
31 to 60 Days Past Due [Member] | Lease Receivables [Member] | ||||||||
Age of the Recorded Notes Receivable Balance Disaggregated Based on Internally Assigned CQR [Abstract] | ||||||||
Total | 240 | 115 | ||||||
61 to 90 Days Past Due [Member] | ||||||||
Age of the Recorded Notes Receivable Balance Disaggregated Based on Internally Assigned CQR [Abstract] | ||||||||
Total | 579 | 362 | ||||||
61 to 90 Days Past Due [Member] | Notes Receivable [Member] | ||||||||
Age of the Recorded Notes Receivable Balance Disaggregated Based on Internally Assigned CQR [Abstract] | ||||||||
Total | 425 | 37 | ||||||
61 to 90 Days Past Due [Member] | Lease Receivables [Member] | ||||||||
Age of the Recorded Notes Receivable Balance Disaggregated Based on Internally Assigned CQR [Abstract] | ||||||||
Total | 154 | 325 | ||||||
> 90 Days Past Due [Member] | ||||||||
Age of the Recorded Notes Receivable Balance Disaggregated Based on Internally Assigned CQR [Abstract] | ||||||||
Total | 648 | 453 | ||||||
> 90 Days Past Due [Member] | Notes Receivable [Member] | ||||||||
Age of the Recorded Notes Receivable Balance Disaggregated Based on Internally Assigned CQR [Abstract] | ||||||||
Total | 97 | 23 | ||||||
> 90 Days Past Due [Member] | Lease Receivables [Member] | ||||||||
Age of the Recorded Notes Receivable Balance Disaggregated Based on Internally Assigned CQR [Abstract] | ||||||||
Total | 551 | 430 | ||||||
Current [Member] | ||||||||
Age of the Recorded Notes Receivable Balance Disaggregated Based on Internally Assigned CQR [Abstract] | ||||||||
Total | 6,528 | 5,946 | ||||||
Current [Member] | Notes Receivable [Member] | ||||||||
Age of the Recorded Notes Receivable Balance Disaggregated Based on Internally Assigned CQR [Abstract] | ||||||||
Total | 5,623 | 5,307 | ||||||
Current [Member] | Lease Receivables [Member] | ||||||||
Age of the Recorded Notes Receivable Balance Disaggregated Based on Internally Assigned CQR [Abstract] | ||||||||
Total | $ 905 | $ 639 | ||||||
|
CREDIT FACILITY AND NOTES PAYABLE (Details) - USD ($) $ in Millions |
3 Months Ended | |||
---|---|---|---|---|
Jun. 30, 2022 |
Mar. 31, 2022 |
Oct. 13, 2021 |
Sep. 30, 2021 |
|
Notes Payable [Member] | Recourse [Member] | ||||
Notes Payable [Abstract] | ||||
Long-term Debt | $ 51.4 | |||
Weighted average interest rate of notes | 3.50% | 3.50% | ||
Notes Payable [Member] | Recourse [Member] | Note Payable One Installment Arrangement [Member] | ||||
Notes Payable [Abstract] | ||||
Long-term Debt | $ 11.4 | |||
Notes Payable [Member] | Non-recourse [Member] | ||||
Notes Payable [Abstract] | ||||
Long-term Debt | $ 26.4 | $ 21.2 | ||
Weighted average interest rate of notes | 3.78% | 3.59% | ||
Revolving Credit Facility [Member] | ||||
Credit Facility [Abstract] | ||||
Maximum borrowing capacity under credit facility | $ 100.0 | |||
Revolving Credit Facility [Member] | Notes Payable [Member] | Recourse [Member] | ||||
Notes Payable [Abstract] | ||||
Long-term Debt | $ 40.0 | |||
2021 Credit Facility [Member] | ||||
Credit Facility [Abstract] | ||||
Maximum borrowing capacity under credit facility | $ 375.0 | |||
Guarantor obligations for credit facility, maximum | $ 10.5 | |||
2021 Credit Facility [Member] | LIBOR [Member] | ||||
Credit Facility [Abstract] | ||||
Basis spread on reference rate | 1.75% | |||
Debt instrument term of variable rate | one-month, three-month, six-month, and 12-month | |||
Debt instrument floor rate | 0.00% | |||
WFCDF [Member] | Floor Plan Facility [Member] | ||||
Credit Facility [Abstract] | ||||
Amount outstanding under credit facility | $ 138.0 | $ 145.3 | ||
WFCDF [Member] | Revolving Credit Facility [Member] | ||||
Credit Facility [Abstract] | ||||
Amount outstanding under credit facility | $ 40.0 | $ 0.0 | ||
WFCDF [Member] | 2021 Credit Facility [Member] | ||||
Credit Facility [Abstract] | ||||
Maximum borrowing capacity under credit facility | $ 275.0 | |||
Initial term | 1 year | |||
Renewal term | 1 year | |||
Period of notice required to terminate credit facility at year end | 90 days |
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
3 Months Ended | |
---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
|
Earnings Per Share, Basic and Diluted [Abstract] | ||
Net earnings attributable to common shareholders - basic and diluted | $ 22,339 | $ 23,518 |
Basic and diluted common shares outstanding [Abstract] | ||
Weighted average common shares outstanding - basic (in shares) | 26,513 | 26,666 |
Effect of dilutive shares (in shares) | 172 | 216 |
Weighted average shares common outstanding - diluted (in shares) | 26,685 | 26,882 |
Earnings per common share - basic (in dollars per share) | $ 0.84 | $ 0.88 |
Earnings per common share - diluted (in dollars per share) | $ 0.84 | $ 0.87 |
STOCKHOLDERS' EQUITY (Details) - USD ($) $ in Millions |
3 Months Ended | |||
---|---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Mar. 24, 2022 |
Mar. 18, 2021 |
|
Share Repurchase Plan [Abstract] | ||||
Authorized number of shares under stock repurchase program (in shares) | 1,000,000 | 1,000,000 | ||
Common stock repurchased during the period (in shares) | 70,473 | 35,258 | ||
Common stock repurchased during the period | $ 3.9 | $ 1.6 | ||
Shares repurchased to satisfy tax withholding obligation (in shares) | 58,080 | 55,430 | ||
Value of shares repurchased to satisfy tax withholding obligation | $ 3.3 | $ 2.6 |
SHARE-BASED COMPENSATION, Restricted Stock Activity (Details) - Restricted Stock [Member] - $ / shares |
3 Months Ended | |
---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
|
Number of Shares [Roll Forward] | ||
Nonvested at beginning of period (in shares) | 343,806 | |
Granted (in shares) | 139,417 | |
Vested (in shares) | (163,034) | |
Forfeited (in shares) | (4,382) | |
Nonvested at end of period (in shares) | 315,807 | |
Weighted Average Grant-date Fair Value [Roll Forward] | ||
Nonvested at beginning of period (in dollars per share) | $ 41.01 | |
Granted (in dollars per share) | 58.51 | |
Vested (in dollars per share) | 39.25 | |
Forfeited (in dollars per share) | 40.77 | |
Nonvested at end of period (in dollars per share) | $ 49.65 | |
2017 Director LTIP [Member] | ||
Number of Shares [Roll Forward] | ||
Granted (in shares) | 774 | 828 |
2021 Employee LTIP [Member] | ||
Number of Shares [Roll Forward] | ||
Granted (in shares) | 138,643 | |
2012 Employee LTIP [Member] | ||
Number of Shares [Roll Forward] | ||
Granted (in shares) | 155,722 |
SHARE-BASED COMPENSATION, Compensation Expense (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
|
Compensation Expense [Abstract] | ||
Total share-based compensation expense | $ 1,773 | $ 1,735 |
401(k) Profit Sharing Plan [Abstract] | ||
Contribution to profit sharing plan | 1,100 | $ 800 |
Restricted Stock [Member] | ||
Compensation Expense [Abstract] | ||
Unrecognized compensation expense | $ 14,900 | |
Unrecognized compensation expense, period for recognition | 36 months |
INCOME TAXES (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
|
INCOME TAXES [Abstract] | ||
Provision for income tax expense | $ 8,691 | $ 9,057 |
Effective income tax rate | 28.00% | 27.80% |
U.S. federal statutory rate | 21.00% | 21.00% |
FAIR VALUE OF FINANCIAL INSTRUMENTS (Details) - USD ($) $ in Thousands |
Jun. 30, 2022 |
Mar. 31, 2022 |
---|---|---|
Assets [Abstract] | ||
Money market funds | $ 23,193 | $ 18,138 |
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | ||
Assets [Abstract] | ||
Money market funds | 23,193 | 18,138 |
Significant Other Observable Inputs (Level 2) [Member] | ||
Assets [Abstract] | ||
Money market funds | 0 | 0 |
Significant Unobservable Inputs (Level 3) [Member] | ||
Assets [Abstract] | ||
Money market funds | $ 0 | $ 0 |
BUSINESS COMBINATIONS (Details) $ in Millions |
Jul. 15, 2022
USD ($)
|
---|---|
Future Com [Member] | Subsequent Event [Member] | |
Business Combination [Abstract] | |
Consideration transferred | $ 13.0 |
SEGMENT REPORTING, Reportable Segment Information (Details) $ in Thousands |
3 Months Ended | ||
---|---|---|---|
Jun. 30, 2022
USD ($)
Segment
|
Jun. 30, 2021
USD ($)
|
Mar. 31, 2022
USD ($)
|
|
SEGMENT REPORTING [Abstract] | |||
Number of business segments | Segment | 2 | ||
Reportable Segment Information [Abstract] | |||
Net sales | $ 458,359 | $ 416,649 | |
Cost of Sales [Abstract] | |||
Cost of sales | 344,836 | 311,137 | |
Gross profit | 113,523 | 105,512 | |
Selling, general, and administrative | 76,767 | 68,775 | |
Depreciation and amortization | 3,210 | 3,926 | |
Interest and financing costs | 363 | 359 | |
Operating expenses | 80,340 | 73,060 | |
Operating income | 33,183 | 32,452 | |
Other income (expense) | (2,153) | 123 | |
Earnings before tax | 31,030 | 32,575 | |
Net Sales [Abstract] | |||
Contracts with customers | 444,747 | 401,959 | |
Financing and other | 13,612 | 14,690 | |
Net sales | 458,359 | 416,649 | |
Selected Financial Data - Statement of Cash Flow [Abstract] | |||
Depreciation and amortization | 4,472 | 6,082 | |
Purchases of property, equipment and operating lease equipment | 1,777 | 6,994 | |
Selected Financial Data - Balance Sheet [Abstract] | |||
Total assets | 1,256,150 | 1,077,416 | $ 1,166,203 |
Product [Member] | |||
Reportable Segment Information [Abstract] | |||
Net sales | 395,250 | 361,057 | |
Cost of Sales [Abstract] | |||
Cost of sales | 304,210 | 277,227 | |
Net Sales [Abstract] | |||
Net sales | 395,250 | 361,057 | |
Service [Member] | |||
Reportable Segment Information [Abstract] | |||
Net sales | 63,109 | 55,592 | |
Cost of Sales [Abstract] | |||
Cost of sales | 40,626 | 33,910 | |
Net Sales [Abstract] | |||
Net sales | 63,109 | 55,592 | |
Technology Segment [Member] | |||
Reportable Segment Information [Abstract] | |||
Net sales | 448,785 | 400,358 | |
Net Sales [Abstract] | |||
Contracts with customers | 443,802 | 396,541 | |
Financing and other | 4,983 | 3,817 | |
Net sales | 448,785 | 400,358 | |
Operating Segments [Member] | Technology Segment [Member] | |||
Reportable Segment Information [Abstract] | |||
Net sales | 448,785 | 400,358 | |
Cost of Sales [Abstract] | |||
Cost of sales | 343,134 | 304,925 | |
Gross profit | 105,651 | 95,433 | |
Selling, general, and administrative | 73,112 | 66,153 | |
Depreciation and amortization | 3,182 | 3,898 | |
Interest and financing costs | 138 | 159 | |
Operating expenses | 76,432 | 70,210 | |
Operating income | 29,219 | 25,223 | |
Net Sales [Abstract] | |||
Contracts with customers | 443,802 | 396,541 | |
Financing and other | 4,983 | 3,817 | |
Net sales | 448,785 | 400,358 | |
Selected Financial Data - Statement of Cash Flow [Abstract] | |||
Depreciation and amortization | 3,515 | 4,103 | |
Purchases of property, equipment and operating lease equipment | 1,286 | 1,307 | |
Selected Financial Data - Balance Sheet [Abstract] | |||
Total assets | 1,007,898 | 868,276 | |
Operating Segments [Member] | Technology Segment [Member] | Product [Member] | |||
Reportable Segment Information [Abstract] | |||
Net sales | 385,676 | 344,766 | |
Cost of Sales [Abstract] | |||
Cost of sales | 302,508 | 271,015 | |
Net Sales [Abstract] | |||
Net sales | 385,676 | 344,766 | |
Operating Segments [Member] | Technology Segment [Member] | Service [Member] | |||
Reportable Segment Information [Abstract] | |||
Net sales | 63,109 | 55,592 | |
Cost of Sales [Abstract] | |||
Cost of sales | 40,626 | 33,910 | |
Net Sales [Abstract] | |||
Net sales | 63,109 | 55,592 | |
Operating Segments [Member] | Financing Segment [Member] | |||
Reportable Segment Information [Abstract] | |||
Net sales | 9,574 | 16,291 | |
Cost of Sales [Abstract] | |||
Cost of sales | 1,702 | 6,212 | |
Gross profit | 7,872 | 10,079 | |
Selling, general, and administrative | 3,655 | 2,622 | |
Depreciation and amortization | 28 | 28 | |
Interest and financing costs | 225 | 200 | |
Operating expenses | 3,908 | 2,850 | |
Operating income | 3,964 | 7,229 | |
Net Sales [Abstract] | |||
Contracts with customers | 945 | 5,418 | |
Financing and other | 8,629 | 10,873 | |
Net sales | 9,574 | 16,291 | |
Selected Financial Data - Statement of Cash Flow [Abstract] | |||
Depreciation and amortization | 957 | 1,979 | |
Purchases of property, equipment and operating lease equipment | 491 | 5,687 | |
Selected Financial Data - Balance Sheet [Abstract] | |||
Total assets | 248,252 | 209,140 | |
Operating Segments [Member] | Financing Segment [Member] | Product [Member] | |||
Reportable Segment Information [Abstract] | |||
Net sales | 9,574 | 16,291 | |
Cost of Sales [Abstract] | |||
Cost of sales | 1,702 | 6,212 | |
Net Sales [Abstract] | |||
Net sales | 9,574 | 16,291 | |
Operating Segments [Member] | Financing Segment [Member] | Service [Member] | |||
Reportable Segment Information [Abstract] | |||
Net sales | 0 | 0 | |
Cost of Sales [Abstract] | |||
Cost of sales | 0 | 0 | |
Net Sales [Abstract] | |||
Net sales | $ 0 | $ 0 |
SEGMENT REPORTING, Technology Segment Disaggregation of Revenue (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
|
Disaggregation of Revenue [Abstract] | ||
Net sales | $ 458,359 | $ 416,649 |
Less: Revenue from financing and other | (13,612) | (14,690) |
Revenue from contracts with customers | 444,747 | 401,959 |
Technology Segment [Member] | ||
Disaggregation of Revenue [Abstract] | ||
Net sales | 448,785 | 400,358 |
Less: Revenue from financing and other | (4,983) | (3,817) |
Revenue from contracts with customers | 443,802 | 396,541 |
Technology Segment [Member] | Telecom, Media & Entertainment [Member] | ||
Disaggregation of Revenue [Abstract] | ||
Net sales | 128,277 | 112,192 |
Technology Segment [Member] | Technology [Member] | ||
Disaggregation of Revenue [Abstract] | ||
Net sales | 69,862 | 69,140 |
Technology Segment [Member] | State and Local Government and Educational Institutions [Member] | ||
Disaggregation of Revenue [Abstract] | ||
Net sales | 64,602 | 65,415 |
Technology Segment [Member] | Health Care [Member] | ||
Disaggregation of Revenue [Abstract] | ||
Net sales | 68,512 | 54,688 |
Technology Segment [Member] | Financial Services [Member] | ||
Disaggregation of Revenue [Abstract] | ||
Net sales | 33,299 | 30,011 |
Technology Segment [Member] | All Others [Member] | ||
Disaggregation of Revenue [Abstract] | ||
Net sales | 84,233 | 68,912 |
Technology Segment [Member] | Cisco Systems [Member] | ||
Disaggregation of Revenue [Abstract] | ||
Net sales | 156,878 | 166,902 |
Technology Segment [Member] | Dell EMC [Member] | ||
Disaggregation of Revenue [Abstract] | ||
Net sales | 61,873 | 26,340 |
Technology Segment [Member] | Juniper Networks [Member] | ||
Disaggregation of Revenue [Abstract] | ||
Net sales | 22,509 | 24,714 |
Technology Segment [Member] | NetApp [Member] | ||
Disaggregation of Revenue [Abstract] | ||
Net sales | 13,985 | 10,457 |
Technology Segment [Member] | Arista Networks [Member] | ||
Disaggregation of Revenue [Abstract] | ||
Net sales | 11,172 | 11,498 |
Technology Segment [Member] | All Others [Member] | ||
Disaggregation of Revenue [Abstract] | ||
Net sales | $ 182,368 | $ 160,447 |
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