10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended June 30, 2023

OR

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

For the transition period from____ to ____.

Commission file number: 1-34167

ePlus inc.

(Exact name of registrant as specified in its charter)

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

13595 Dulles Technology Drive, Herndon, VA 20171-3413

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

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

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $.01 par value	PLUS	NASDAQ Global Select Market

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

Yes ☒   No ☐

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

Yes ☒   No ☐

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

Large accelerated filer ☒	Accelerated filer ☐
Non-accelerated filer ☐	Smaller reporting company ☐
	Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐  No ☒

The number of shares of common stock outstanding as of August 2, 2023, was 26,937,903.

TABLE OF CONTENTS

ePlus inc. AND SUBSIDIARIES

Part I. Financial Information:
Item 1.	Financial Statements
	Unaudited Consolidated Balance Sheets as of June 30, 2023, and March 31, 2023	5
	Unaudited Consolidated Statements of Operations for the Three Months Ended June 30, 2023, and 2022	6
	Unaudited Consolidated Statements of Comprehensive Income for the Three Months Ended June 30, 2023, and 2022	7
	Unaudited Consolidated Statements of Cash Flows for the Three Months Ended June 30, 2023, and 2022	8
	Unaudited Consolidated Statements of Stockholders’ Equity for the Three Months Ended June 30, 2023, and 2022	10
	Notes to Unaudited Consolidated Financial Statements	11
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	27
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	44
Item 4.	Controls and Procedures	44
Part II. Other Information:
Item 1.	Legal Proceedings	45
Item 1A.	Risk Factors	45
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	45
Item 3.	Defaults Upon Senior Securities	45
Item 4.	Mine Safety Disclosures	45
Item 5.	Other Information	46
Item 6.	Exhibits	46
Signatures		47

2

CAUTIONARY LANGUAGE ABOUT FORWARD-LOOKING STATEMENTS

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

• 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 Information Technology (“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;

• our dependence on key personnel to maintain certain customer relationships, and our ability to hire, train, and retain sufficient qualified personnel;

• maintaining and increasing advanced professional services by recruiting and retaining highly skilled, competent personnel, and vendor certifications;

• 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;

• ongoing remote work trends, and the increase in cybersecurity attacks that have occurred while employees work remotely;

• loss of our credit facility or credit lines with our vendors may restrict our current and future operations;

• 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;

• rising interest rates or the loss of key lenders or the constricting of credit markets;

• our ability to manage a diverse product set of solutions in highly competitive markets with a number of key vendors;

• 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 possibility of a reduction of vendor incentives provided to us;

• our dependency on continued innovations in hardware, software, and services offerings by our vendors and our ability to partner with them;

• 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;

• our ability to identify acquisition candidates, or perform sufficient due diligence prior to completing an acquisition, or failure to integrate a completed acquisition may affect our earnings;

• 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 our ability to increase prices 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 that may impact the arrangements that have pricing commitments over the term of the agreement;

• a natural disaster or other adverse event at one of our primary configuration centers, data centers, or a third-party provider location could negatively impact our business;

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

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• changes in the 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 ability to increase the total number of customers using integrated solutions by up-selling within our customer base and gaining new customers;

• our ability to increase 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;

• our ability to perform 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, we are subject to audit which we may not pass, and our professional and liability insurance policies coverage may be insufficient to cover a claim;

• failure to comply with public sector contracts, or applicable laws or regulations;

• our ability to maintain our proprietary software and update our technology infrastructure to remain competitive in the marketplace;

• fluctuations in foreign currency exchange rates may impact our results of operation and financial position; and

• 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, the costs associated with licensing required technology.

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

4

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

e Plus inc. AND SUBSIDIARIES

UNAUDITED CONSOLIDATED BALANCE SHEETS

(in thousands, except per share amounts)

	June 30, 2023			March 31, 2023
ASSETS
Current assets:
Cash and cash equivalents	$	101,574		$	103,093
Accounts receivable—trade, net		677,988			504,122
Accounts receivable—other, net		78,637			55,508
Inventories		244,331			243,286
Financing receivables—net, current		81,111			89,829
Deferred costs		45,408			44,191
Other current assets		47,084			55,101
Total current assets		1,276,133			1,095,130
Financing receivables and operating leases—net		120,664			84,417
Deferred tax asset		3,682			3,682
Property, equipment, and other assets		70,794			70,447
Goodwill		158,280			136,105
Other intangible assets—net		51,253			25,045
TOTAL ASSETS	$	1,680,806		$	1,414,826
LIABILITIES AND STOCKHOLDERS’ EQUITY
LIABILITIES
Current liabilities:
Accounts payable	$	351,384		$	220,159
Accounts payable—floor plan		182,859			134,615
Salaries and commissions payable		41,144			37,336
Deferred revenue		118,976			114,028
Recourse notes payable—current		58,115			5,997
Non-recourse notes payable—current		17,742			24,819
Other current liabilities		30,566			24,372
Total current liabilities		800,786			561,326
Non-recourse notes payable - long-term		5,005			9,522
Deferred tax liability		717			715
Other liabilities		61,007			60,998
TOTAL LIABILITIES		867,515			632,561
COMMITMENTS AND CONTINGENCIES (Note 9)
STOCKHOLDERS’ EQUITY
Preferred stock, $0.01 per share par value; 2,000 shares authorized; none outstanding		-			-
Common stock, $0.01 per share par value; 50,000 shares authorized; 26,947 outstanding at June 30, 2023 and 26,905 outstanding at March 31, 2023		274			272
Additional paid-in capital		170,904			167,303
Treasury stock, at cost, 408 shares at June 30, 2023 and 261 shares at March 31, 2023		(21,451	)		(14,080	)
Retained earnings		661,049			627,202
Accumulated other comprehensive income—foreign currency translation adjustment		2,515			1,568
Total Stockholders’ Equity		813,291			782,265
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	1,680,806		$	1,414,826

See Notes to Unaudited Consolidated Financial Statements.

5

ePlus inc. AND SUBSIDIARIES

UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts)

	Three Months Ended June 30,
	2023		2022
Net sales
Product	$	506,656	$	395,250
Services		67,519		63,109
Total		574,175		458,359
Cost of sales
Product		388,904		304,210
Services		42,998		40,626
Total		431,902		344,836
Gross profit		142,273		113,523
Selling, general, and administrative		90,298		76,767
Depreciation and amortization		4,792		3,210
Interest and financing costs		851		363
Operating expenses		95,941		80,340
Operating income		46,332		33,183
Other income (expense), net		190		(2,153	)
Earnings before tax		46,522		31,030
Provision for income taxes		12,675		8,691
Net earnings	$	33,847	$	22,339
Net earnings per common share—basic	$	1.27	$	0.84
Net earnings per common share—diluted	$	1.27	$	0.84
Weighted average common shares outstanding—basic		26,552		26,513
Weighted average common shares outstanding—diluted		26,648		26,685

See Notes to Unaudited Consolidated Financial Statements.

6

ePlus inc. AND SUBSIDIARIES

UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in thousands)

	Three Months Ended June 30,
	2023		2022
NET EARNINGS	$	33,847	$	22,339
OTHER COMPREHENSIVE INCOME, NET OF TAX:
Foreign currency translation adjustments		947		(1,339	)
Other comprehensive income (loss)		947		(1,339	)
TOTAL COMPREHENSIVE INCOME	$	34,794	$	21,000

See Notes to Unaudited Consolidated Financial Statements.

7

ePlus inc. AND SUBSIDIARIES

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

	Three Months Ended June 30,
	2023			2022
Cash flows from operating activities:
Net earnings	$	33,847		$	22,339
Adjustments to reconcile net earnings to net cash provided by (used in) operating activities:
Depreciation and amortization		5,755			4,472
Provision for credit losses		478			698
Share-based compensation expense		2,205			1,773
Gain on disposal of property, equipment, and operating lease equipment		(160	)		(224	)
Changes in:
Accounts receivable		(166,803	)		(53,556	)
Inventories-net		300			(92,678	)
Financing receivables—net		(42,071	)		(20,574	)
Deferred costs and other assets		8,303			(4,177	)
Accounts payable-trade		124,948			30,376
Salaries and commissions payable, deferred revenue, and other liabilities		12,298			8,608
Net cash used in operating activities		(20,900	)		(102,943	)
Cash flows from investing activities:
Proceeds from sale of property, equipment, and operating lease equipment		196			85
Purchases of property, equipment and operating lease equipment		(3,698	)		(1,777	)
Cash used in acquisitions, net of cash acquired		(59,595	)		-
Net cash used in investing activities		(63,097	)		(1,692	)
Cash flows from financing activities:
Borrowings of non-recourse and recourse notes payable		97,955			49,256
Repayments of non-recourse and recourse notes payable		(41,573	)		(3,645	)
Proceeds from issuance of common stock		1,398			-
Repurchase of common stock		(7,465	)		(7,224	)
Net borrowings (repayments) on floor plan facility		32,290			(7,276	)
Net cash provided by financing activities		82,605			31,111
Effect of exchange rate changes on cash		(127	)		1,634
Net decrease in cash and cash equivalents		(1,519	)		(71,890	)
Cash and cash equivalents, beginning of period		103,093			155,378
Cash and cash equivalents, end of period	$	101,574		$	83,488

8

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS - continued

(in thousands)

	Three Months Ended June 30,
	2023			2022
Supplemental disclosures of cash flow information:
Cash paid for interest	$	566		$	341
Cash paid for income taxes	$	3,605		$	7,532
Cash paid for amounts included in the measurement of lease liabilities	$	1,261		$	1,226
Schedule of non-cash investing and financing activities:
Proceeds from sale of property, equipment, and leased equipment	$	15		$	183
Purchases of property, equipment, and operating lease equipment	$	(200	)	$	(63	)
Borrowing of non-recourse and recourse notes payable	$	-		$	7,267
Vesting of share-based compensation	$	8,483		$	9,215
Repurchase of common stock	$	(28	)	$	-
New operating lease assets obtained in exchange for lease obligations	$	3,100		$	34

See Notes to Unaudited Consolidated Financial Statements.

9

ePlus inc. AND SUBSIDIARIES

UNAUDITED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(in thousands)

	Three Months Ended June 30, 2023
														Accumulated
						Additional								Other
	Common Stock					Paid-In			Treasury			Retained		Comprehensive
	Shares			Par Value		Capital			Stock			Earnings		Income		Total
Balance, March 31, 2023		26,905		$	272	$	167,303		$	(14,080	)	$	627,202	$	1,568	$	782,265
Issuance of restricted stock awards		153			2		(2	)		-			-		-		-
Issuance of common stock		36			-		1,398			-			-		-		1,398
Share-based compensation		-			-		2,205			-			-		-		2,205
Repurchase of common stock		(147	)		-		-			(7,371	)		-		-		(7,371	)
Net earnings		-			-		-			-			33,847		-		33,847
Foreign currency translation adjustment		-			-		-			-			-		947		947
Balance, June 30, 2023		26,947		$	274	$	170,904		$	(21,451	)	$	661,049	$	2,515	$	813,291

	Three Months Ended June 30, 2022
													Accumulated
						Additional							Other
	Common Stock					Paid-In		Treasury			Retained		Comprehensive
	Shares			Par Value		Capital		Stock			Earnings		Income			Total
Balance, March 31, 2022		26,886		$	270	$	159,480	$	(6,734	)	$	507,846	$	(124	)	$	660,738
Issuance of restricted stock awards		135			1		-		-			-		-			1
Share-based compensation		-			-		1,773		-			-		-			1,773
Repurchase of common stock		(128	)		-		-		(7,224	)		-		-			(7,224	)
Net earnings		-			-		-		-			22,339		-			22,339
Foreign currency translation adjustment		-			-		-		-			-		(1,339	)		(1,339	)
Balance, June 30, 2022		26,893		$	271	$	161,253	$	(13,958	)	$	530,185	$	(1,463	)	$	676,288

See Notes to Unaudited Consolidated Financial Statements.

10

ePlus inc. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

1. 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 IT solutions that enable organizations to optimize their IT environment and supply chain processes. We also provide consulting, professional services, managed services, and complete lifecycle management services including flexible financing solutions. We focus on selling to medium and large enterprises in the United States (“US”) and in select international markets including the United Kingdom (“UK”), the European Union (“EU”), India, Singapore, and Israel.

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. During the quarter ended June 30, 2023, we split our technology segment into new segments-- product, professional services, and managed services-- to provide our management the ability to better manage and allocate resources among the separate components of our technology business. Our professional services and managed services are a significant component of our growth and long-term strategic initiatives. Subsequently, we manage and report our operating results through four operating segments: product, professional services, managed services, and financing. For additional information, see Note 16, “Segment Reporting”.

INTERIM FINANCIAL STATEMENTS — The unaudited consolidated financial statements for the three months ended June 30, 2023, and 2022, 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, 2023, and 2022, are not necessarily indicative of results that may be expected for any other interim period or for the full fiscal year ended March 31, 2024, 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, 2023 (“2023 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 45% of our technology business net sales for the three months ended June 30, 2023, and 35% for the three months ended June 30, 2022.

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, 2023, except for the changes provided in Note 2, “Recent Accounting Pronouncements.”

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2. RECENT ACCOUNTING PRONOUNCEMENTS

RECENTLY ADOPTED ACCOUNTING PRONOUNCEMENTS— In September 2022, the Financial Accounting Standards Board (“FASB”) issued ASU 2022-04, Liabilities—Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations. This update requires buyers in a supplier finance program to disclose certain qualitative and quantitative information about the program. It is intended to provide information about an entity’s use of supplier finance programs and their effect on the entity’s working capital, liquidity, and cash flows. This update is effective for us beginning in the first quarter of our fiscal year ending March 31, 2024, except for a requirement to provide a roll forward of our obligations during the annual period, which is effective for us beginning in the first quarter of our fiscal year ending March 31, 2025. We adopted the standard during the first quarter of fiscal year ending March 31, 2024, as reflected in this Quarterly Report on Form 10-Q, except for the roll forward requirement, which will be adopted during the first quarter of fiscal year ending March 31, 2025. The adoption of the standard resulted in new disclosures only for amounts presented within Accounts payable – floor plan. For additional information on the new disclosures, see Note 8, “Notes Payable and Credit Facility”.

3. REVENUES

CONTRACT BALANCES

Accounts receivable – trade consists entirely of amounts due from contracts with customers. In addition, we had $58.5 million and $70.4 million of receivables from contracts with customers included within financing receivables as of June 30, 2023, and March 31, 2023, respectively. The following table provides the balance of contract liabilities from contracts with customers (in thousands):

	June 30, 2023		March 31, 2023
Current (included in deferred revenue)	$	118,646	$	113,713
Non-current (included in other liabilities)	$	48,390	$	47,217

Revenue recognized from the beginning contract liability balance was $30.9 million and $24.9 million for the three months ended June 30, 2023, and 2022, 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):

Remainder of the year ending March 31, 2024	$	55,368
Year ending March 31, 2025		34,042
Year ending March 31, 2026		16,872
Year ending March 31, 2027		5,298
Year ending March 31, 2028 and thereafter		2,357
Total remaining performance obligations	$	113,937

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.

4. 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. Occasionally, our leases provide the lessee a bargain purchase option.

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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, 2023, and 2022 (in thousands):

	Three months Ended June 30,
	2023		2022
Net sales	$	7,623	$	4,983
Cost of sales		7,391		4,067
Gross profit	$	232	$	916

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, 2023, and 2022 (in thousands):

	Three months Ended June 30,
	2023		2022
Interest income on sales-type leases	$	1,362	$	861
Lease income on operating leases	$	2,808	$	4,582

FINANCING RECEIVABLES—NET

The following tables provide a disaggregation of our financing receivables – net (in thousands):

	Notes			Lease			Financing
June 30, 2023	Receivable			Receivables			Receivables
Gross receivables	$	151,336		$	60,660		$	211,996
Unguaranteed residual value (1)		-			8,348			8,348
Unearned income		(14,278	)		(7,925	)		(22,203	)
Allowance for credit losses (2)		(696	)		(936	)		(1,632	)
Total, net	$	136,362		$	60,147		$	196,509
Reported as:
Current	$	49,674		$	31,437		$	81,111
Long-term		86,688			28,710			115,398
Total, net	$	136,362		$	60,147		$	196,509

(1) Includes unguaranteed residual values of $4,488 thousand that we retained after selling the related lease receivable.

(2) Refer to Note 7, “Allowance for Credit Losses” for details.

	Notes			Lease			Financing
March 31, 2023	Receivable			Receivables			Receivables
Gross receivables	$	117,008		$	60,157		$	177,165
Unguaranteed residual value (1)		-			8,161			8,161
Unearned income		(5,950	)		(8,050	)		(14,000	)
Allowance for credit losses (2)		(801	)		(981	)		(1,782	)
Total, net	$	110,257		$	59,287		$	169,544
Reported as:
Current	$	65,738		$	24,091		$	89,829
Long-term		44,519			35,196			79,715
Total, net	$	110,257		$	59,287		$	169,544

(1) Includes unguaranteed residual values of $4,222 thousand that we retained after selling the related lease receivable.

(2) Refer to Note 7, “Allowance for Credit Losses” for details.

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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):

	June 30,			March 31,
	2023			2023
Cost of equipment under operating leases	$	16,091		$	15,301
Accumulated depreciation		(10,825	)		(10,599	)
Investment in operating lease equipment—net (1)	$	5,266		$	4,702

(1) Amounts include estimated unguaranteed residual values of $1,873 thousand and $1,717 thousand as of June 30, 2023, and March 31, 2023, respectively.

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, 2023, and March 31, 2023, we had financing receivables of $22.0 million and $35.7 million, respectively, and operating leases of $2.1 million and $2.5 million, respectively, which were collateral for non-recourse notes payable. See Note 8, “Notes Payable and Credit Facility.”

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, 2023, and 2022, we recognized net gains of $1.3 million and $1.8 million, respectively, and total proceeds from these sales were $61.4 million and $52.5 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, 2023, and March 31, 2023, 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 in the event that the lessee elects to early terminate the lease. As of June 30, 2023, and March 31, 2023, our total potential liability that could result from these indemnities is immaterial.

5. LESSEE ACCOUNTING

We lease office space for periods up to six years and lease warehouse space for periods of up to 10 years, and we have some lease options that can be exercised to extend beyond those lease term limits. 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 $1.5 million and $1.3 million for the three months ended June 30, 2023, and June 30, 2022, respectively.

6. GOODWILL AND OTHER INTANGIBLE ASSETS

GOODWILL

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The following table summarizes the changes in the carrying amount of goodwill for the three months ended June 30, 2023 (in thousands):

	Technology Segment			Product			Professional Services			Managed Services			Total
Balance March 31, 2023
Goodwill	$	144,778		$	-			-			-			144,778
Accumulated impairment losses		(8,673	)		-			-			-			(8,673	)
Net carrying amount	$	136,105		$	-		$	-		$	-		$	136,105
Reporting unit change		(136,105	)		106,497			19,712			9,896			-
Acquisitions		-			19,672			2,456			-			22,128
Impairment losses		-			-			-			-			-
Foreign currency translations		-			37			7			3			47
Balance June 30, 2023
Goodwill	$	-		$	134,879		$	22,175		$	9,899		$	166,953
Accumulated impairment losses		-			(6,787	)		(1,256	)		(630	)		(8,673	)
Net carrying amount	$	-		$	128,092		$	20,919		$	9,269		$	158,280

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. As of March 31, 2023, our entire balance related to our technology segment, which we had also determined to be one reporting unit. During the first quarter ended June 30, 2023, we separated our technology segment into three different reporting units: product, professional services, and managed services. As such, we allocated our goodwill and impairment losses to the reporting units affected using a relative fair value.

The carrying value of goodwill was $158.3 million and $136.1 million as of June 30, 2023, and March 31, 2023, respectively. Our goodwill balance increased by $22.2 million over the three months ended June 30, 2023, due to $22.1 million in goodwill additions from our acquisition of Network Solutions Group (“NSG”), and from foreign currency translations of $0.1 million. Please refer to Note 15, “Business Combinations” for details of our acquisition.

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, 2022, we performed a quantitative assessment of goodwill and concluded that the fair value of our technology reporting unit exceeded its carrying value. Our conclusions would not be impacted by a ten percent change in our estimate of the fair value of the reporting unit.

OTHER INTANGIBLE ASSETS

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Our other intangible assets consist of the following on June 30, 2023, and March 31, 2023 (in thousands):

	June 30, 2023							March 31, 2023
	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Purchased intangibles	$	115,463	$	(64,897	)	$	50,566	$	85,449	$	(61,376	)	$	24,073
Capitalized software development		10,516		(9,829	)		687		10,516		(9,544	)		972
Total	$	125,979	$	(74,726	)	$	51,253	$	95,965	$	(70,920	)	$	25,045

Purchased intangibles, consisting mainly of customer relationships, 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 $3.5 million and $2.2 million for the three months ended June 30, 2023, and June 30, 2022, respectively.

7. ALLOWANCE FOR CREDIT LOSSES

The following table provides the activity in our allowance for credit losses for the three months ended June 30, 2023, and 2022 (in thousands):

	Accounts Receivable			Notes Receivable			Lease Receivables			Total
Balance April 1, 2023	$	2,572		$	801		$	981		$	4,354
Provision for credit losses		629			(106	)		(45	)		478
Write-offs and other		(13	)		1			-			(12	)
Balance June 30, 2023	$	3,188		$	696		$	936		$	4,820

	Accounts Receivable			Notes Receivable		Lease Receivables		Total
Balance April 1, 2022	$	2,411		$	708	$	681	$	3,800
Provision for credit losses		382			84		232		698
Write-offs and other		(65	)		-		-		(65	)
Balance June 30, 2022	$	2,728		$	792	$	913	$	4,433

We evaluate our customers using an internally assigned credit quality rating “CQR”. The CQR categories of our financing receivables are:

• High CQR: This rating includes accounts with excellent to good business credit, asset quality and capacity to meet financial obligations. Loss rates in this category are generally less than 1%.

• Average CQR: This rating includes accounts with average credit risk that are more susceptible to loss in the event of adverse business or economic conditions. Loss rates in this category are in the range of 1% to 8%.

• 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 greater than 8% and up to 100%.

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The following table provides the amortized cost basis of our financing receivables by CQR and by credit origination year as of June 30, 2023 (in thousands):

	Amortized cost basis by origination year ending March 31,
	2024		2023		2022		2021		2020		2019 and prior		Total		Transfers (2)			Net credit exposure
Notes receivable:
High CQR	$	67,836	$	36,270	$	13,539	$	3,428	$	142	$	1	$	121,216	$	(14,619	)	$	106,597
Average CQR		4,871		9,695		1,096		96		58		26		15,842		(2,068	)		13,774
Total	$	72,707	$	45,965	$	14,635	$	3,524	$	200	$	27	$	137,058	$	(16,687	)	$	120,371
Lease receivables:
High CQR	$	7,378	$	16,566	$	3,595	$	1,775	$	432	$	133	$	29,879	$	(1,665	)	$	28,214
Average CQR		6,218		16,547		3,316		572		63		-		26,716		(4,049	)		22,667
Total	$	13,596	$	33,113	$	6,911	$	2,347	$	495	$	133	$	56,595	$	(5,714	)	$	50,881
Total amortized cost (1)	$	86,303	$	79,078	$	21,546	$	5,871	$	695	$	160	$	193,653	$	(22,401	)	$	171,252

(1) Excludes unguaranteed residual values of $4,488 thousand that we retained after selling the related lease receivable.

(2) Transfers consist of receivables that have been transferred to third-party financial institutions on a non-recourse basis.

The following table provides the amortized cost basis of our financing receivables by CQR and by credit origination year as of March 31, 2023 (in thousands):

	Amortized cost basis by origination year ending March 31,
	2023		2022		2021		2020		2019		2018 and prior		Total		Transfers (2)			Net credit exposure
Notes receivable:
High CQR	$	72,155	$	11,378	$	11,267	$	370	$	30	$	-	$	95,200	$	(28,115	)	$	67,085
Average CQR		12,793		2,675		213		115		61		1		15,858		(1,432	)		14,426
Total	$	84,948	$	14,053	$	11,480	$	485	$	91	$	1	$	111,058	$	(29,547	)	$	81,511
Lease receivables:
High CQR	$	21,629	$	3,842	$	1,916	$	565	$	51	$	9	$	28,012	$	(1,437	)	$	26,575
Average CQR		23,796		3,430		770		35		3		-		28,034		(1,594	)		26,440
Total	$	45,425	$	7,272	$	2,686	$	600	$	54	$	9	$	56,046	$	(3,031	)	$	53,015
Total amortized cost (1)	$	130,373	$	21,325	$	14,166	$	1,085	$	145	$	10	$	167,104	$	(32,578	)	$	134,526

(1) Excludes unguaranteed residual values of $4,222 thousand that we retained after selling the related lease receivable.

(2) Transfers consist of receivables that have been transferred to third-party financial institutions on a non-recourse basis and receivables that are in the process of being transferred to third-party financial institutions.

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The following table provides an aging analysis of our financing receivables as of June 30, 2023 (in thousands):

	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	$	748	$	113	$	1,093	$	1,954	$	7,750	$	9,704	$	127,354	$	137,058
Lease receivables		250		367		902		1,519		3,771		5,290		51,305		56,595
Total	$	998	$	480	$	1,995	$	3,473	$	11,521	$	14,994	$	178,659	$	193,653

The following table provides an aging analysis of our financing receivables as of March 31, 2023 (in thousands):

	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	$	1,020	$	862	$	473	$	2,355	$	7,703	$	10,058	$	101,000	$	111,058
Lease receivables		1,068		463		864		2,395		5,413		7,808		48,238		56,046
Total	$	2,088	$	1,325	$	1,337	$	4,750	$	13,116	$	17,866	$	149,238	$	167,104

Our financial assets on nonaccrual status were not significant as of June 30, 2023, and March 31, 2023.

8. NOTES PAYABLE AND CREDIT FACILITY

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 business through a credit facility with Wells Fargo Commercial Distribution Finance, LLC (“WFCDF”). The WFCDF credit facility (the “WFCDF Credit Facility”) has a floor plan facility and a revolving credit facility.

On October 13, 2021, the Borrowers amended, restated, and replaced in entirety their then-existing credit agreements with WFCDF. On October 31, 2022, the Borrowers entered into the First Amendment to the credit agreement. Under this agreement and its amendment, the credit facility is provided by a syndicate of banks (collectively, the “Lenders”) for which WFCDF acts as administrative agent and consists of a discretionary senior secured floor plan facility in favor of the Borrowers.

On March 10, 2023, the Borrowers entered into a Second Amendment to the credit agreement that amended the credit agreement to increase the maximum aggregate amount of principal available under the floor plan facility to $500.0 million and increase the maximum aggregate amount of principal available under the Revolving Facility to $200.0 million.

Under the accounts payable floor plan facility, we had an outstanding balance of $182.9 million and $134.6 million as of June 30, 2023, and March 31, 2023, respectively. On our balance sheet, our liability under the accounts payable floor plan facility is presented as accounts payable – floor plan.

We use the floor plan to facilitate the purchase of inventory from designated suppliers. The Lenders pay our suppliers and provide us extended payment terms. We pay down the floor plan facility on three specified dates each month, generally 30-60 days from the invoice date. We do not incur any interest or other incremental expenses for the floor plan facility. We are not involved in establishing the terms or conditions of the arrangements between our suppliers and the Lenders.

Under the revolving credit facility, we had $52.0 million outstanding as of June 30, 2023, and no balance outstanding as of March 31, 2023. On our balance sheet, our liability under the revolving credit facility is presented as part of recourse notes payable – current.

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The fair value of the outstanding balances under the WFCDF Credit Facility were approximately equal to their carrying value as of June 30, 2023, and March 31, 2023.

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 Term SOFR Rate plus a Term SOFR Adjustment of 0.10% plus an Applicable Margin of 1.75%.

Our borrowings under the WFCDF Credit Facility are secured by the assets of the Borrowers. Additionally, the WFCDF Credit Facility requires a guaranty of $10.5 million by ePlus inc.

Under the 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, 2023, and March 31, 2023, their available borrowing met the thresholds such that there were no restrictions on their ability to pay dividends.

The WFCDF 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 the WFCDF Credit Facility at any time by providing a written termination notice to the other party no less than 90 days prior to such termination.

The loss of the WFCDF Credit Facility could have a material adverse effect on our future results as we currently rely on this facility and its components for daily working capital and liquidity for our technology business and as an operational function of our accounts payable process.

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, 2023, we had $58.1 million in recourse notes payable consisting of $52.0 million outstanding under our revolving WFCDF Credit Facility, $4.0 million arising from one installment payment arrangement within our technology business, and $2.1 million arising from borrowings that that were collateralized by financial receivables held by our financing segment. As of March 31, 2023, we had $6.0 million in recourse notes payable arising entirely from one installment payment arrangement within our technology business. 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, 2023, and March 31, 2023. The weighted average interest rate for our recourse notes payable in our financing segment was 6.27% as of June 30, 2023.

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, 2023, and March 31, 2023, we had $22.7 million and $34.3 million, respectively, of non-recourse borrowings that were collateralized by investments in notes and leases. Principal and interest payments are generally due periodically 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 5.22% and 5.01%, as of June 30, 2023, and March 31, 2023, respectively.

9. 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 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 our expectations, our financial condition and operating results for that period may be adversely affected. As of June 30, 2023, 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 us in the future, and these matters could relate to prior, current, or future transactions or events.

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10. 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, 2023, and 2022, respectively (in thousands, except per share data).

	Three Months Ended June 30,
	2023		2022
Net earnings attributable to common shareholders - basic and diluted	$	33,847	$	22,339
Basic and diluted common shares outstanding:
Weighted average common shares outstanding — basic		26,552		26,513
Effect of dilutive shares		96		172
Weighted average shares common outstanding — diluted		26,648		26,685
Earnings per common share - basic	$	1.27	$	0.84
Earnings per common share - diluted	$	1.27	$	0.84

11. STOCKHOLDERS’ EQUITY

SHARE REPURCHASE PLAN

On March 22, 2023, 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, 2023. 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. 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, 2023, we purchased 93,541 shares of our outstanding common stock at a value of $4.4 million under the share repurchase plan; we also purchased 53,945 shares of common stock at a value of $3.0 million to satisfy tax withholding obligations relating to the vesting of employees’ restricted stock.

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.

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12. SHARE-BASED COMPENSATION

SHARE-BASED PLANS

As of June 30, 2023, 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, 2023, we granted 862 shares under the 2017 Director LTIP, and 152,865 restricted shares under the 2021 Employee LTIP. 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.

The following table provides a summary of the non-vested restricted shares for the three months ended June 30, 2023:

	Number of Shares			Weighted Average Grant-date Fair Value
Nonvested April 1, 2023		314,860		$	49.57
Granted		153,727		$	55.88
Vested		(152,477	)	$	46.10
Forfeited		(961	)	$	54.89
Nonvested June 30, 2023		315,149		$	54.31

EMPLOYEE STOCK PURCHASE PLAN

On September 15, 2022, our stockholders approved the 2022 Employee Stock Purchase Plan (“ESPP”) through which eligible employees may purchase up to an aggregate of 2.50 million shares of our stock at 6-month intervals at a discount off the lesser of the closing market price on the first or the last trading day of each offering period. Our inaugural offering period under the ESPP was January 1, 2023, to June 30, 2023. During the three months ended June 30, 2023, we issued 36,697 shares at a price of $38.10 per share under the ESPP. As of June 30, 2023, there were 2.46 million shares remaining under the ESPP.

COMPENSATION EXPENSE

The following table provides a summary of our total share-based compensation expense, including for restricted stock awards and our ESPP, and the related income tax benefit for the three months ended June 30, 2023, and 2022 (in thousands):

	Three Months Ended June 30,
	2023			2022
Equity-based compensation expense	$	2,205		$	1,773
Income tax benefit		(600	)		(496	)

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We recognized the income tax benefit as a reduction to our provision for income taxes. As of June 30, 2023, the total unrecognized compensation expense related to non-vested restricted stock was $16.2 million, which is expected to be recognized over a weighted-average period of 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, 2023, and 2022, was $1.4 million and $1.1 million, respectively.

13. INCOME TAXES

Our provision for income tax expense was $12.7 million for the three months ended June 30, 2023, as compared to $8.7 million  for the same period in the prior year. Our effective income tax rate for the three months ended June 30, 2023, was 27.2%, compared to 28.0% for the same period in the prior year, primarily due to a lower state effective tax rate. The effective tax rate for the three months ended June 30, 2023, and June 30, 2022, differed from the US federal statutory rate of 21.0% primarily due to state and local income taxes.

14. FAIR VALUE OF FINANCIAL INSTRUMENTS

The following table summarizes the fair value hierarchy of our financial instruments as of June 30, 2023, and March 31, 2023 (in thousands):

			Fair Value Measurement Using
	Recorded Amount		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
June 30, 2023
Assets:
Money market funds	$	22,225	$	22,225	$	-	$	-
March 31, 2023
Assets:
Money market funds	$	8,880	$	8,880	$	-	$	-

15. BUSINESS COMBINATIONS

NETWORK SOLUTIONS GROUP (NSG)

On April 30, 2023, our subsidiary, ePlus Technology, inc., acquired certain assets and liabilities of NSG, formerly a business unit of CCI Systems, Inc., a Michigan-based provider of networking services and solutions. This acquisition will help drive additional growth for us in the service provider end-markets with enhanced engineering, sales, and services delivery capabilities specific to the industry.

Our preliminary sum for consideration transferred is $48.6 million consisting of $59.6 million paid in cash at closing minus $11.0 million that is due to us from the sellers based on adjustments to our determination of the total net assets delivered. Our preliminary allocation of the purchase consideration to the assets acquired and liabilities assumed is presented below (in thousands):

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	Acquisition Date Amount
Accounts receivable	$	20,419
Other assets		1,940
Identified intangible assets		29,960
Accounts payable and other liabilities		(24,758	)
Contract liabilities		(1,086	)
Total identifiable net assets		26,475
Goodwill		22,128
Total purchase consideration	$	48,603

The identified intangible assets of $30.0 million consists of customer relationships with an estimated useful life of seven years. The fair value of acquired receivables equals the gross contractual amounts receivable. We expect to collect all acquired receivables.

We recognized goodwill related to this transaction of $22.1 million, of which $19.7 million and $2.4 million were assigned to our product and professional services reporting units, respectively. The goodwill recognized in the acquisition is attributable to the acquired assembled workforce and expected synergies, none of which qualify for recognition as a separate intangible asset. The total amount of goodwill is expected to be deductible for tax purposes.

The amount of revenues and earnings of the acquiree since the acquisition date are not material. Likewise, the impact to the revenue and earnings of the combined entity for the current reporting period as though the acquisition date had been April 1, 2023, is not material.

16. SEGMENT REPORTING

Prior to the start of the fiscal year ending March 31, 2024, we had two segments: technology and financing. During the quarter ended June 30, 2023, we split our technology segment into new segments-- product, professional services, and managed services-- to provide our management the ability to better manage and allocate resources among the separate components of our technology business. Our professional services and managed services are a significant component of our growth and long-term strategic initiatives. Subsequently, we manage and report our operating results through four operating segments: product, professional services, managed services, and financing. Our product segment includes sales of IT products, third-party software, and third-party maintenance, software assurance, and other third-party services. Our professional services segment includes our advanced professional services, staff augmentation, project management services, cloud consulting services and security services. Our managed services segment includes our advanced managed services, service desk, storage-as-a-service, cloud hosted services, cloud managed services and managed security services. 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 within our technology business based on gross profit, while we measure our financing segment based on operating income. We do not present asset information for our reportable segments as we do not provide asset information to our chief operating decision maker (“CODM”).

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The following table provides reportable segment information for the three-month periods ended June 30, 2023, and 2022 (in thousands):

	Three Months Ended June 30,
	2023		2022
Net Sales
Product	$	498,166	$	385,676
Professional Services		35,556		37,168
Managed Services		31,963		25,941
Financing		8,490		9,574
Total		574,175		458,359
Gross Profit
Product		111,391		83,168
Professional Services		14,724		15,055
Managed Services		9,797		7,428
Financing		6,361		7,872
Total		142,273		113,523
Operating income
Technology Business		43,498		29,219
Financing		2,834		3,964
Total		46,332		33,183
Other income (expense), net		190		(2,153	)
Earnings before tax	$	46,522	$	31,030
Depreciation and amortization
Technology Business	$	4,764	$	3,182
Financing		28		28
Total	$	4,792	$	3,210
Interest and financing costs
Technology Business	$	550	$	138
Financing		301		225
Total	$	851	$	363
Selected Financial Data - Statement of Cash Flow
Purchases of property, equipment and operating lease equipment Technology Business	$	2,785	$	1,286
Financing		913		491
Total	$	3,698	$	1,777

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The following table provides a disaggregation of net sales by source and further disaggregates our revenue recognized from contracts with customers by timing and our position as principal or agent for the three-month period ended June 30, 2023 (in thousands):

	Three months ended June 30, 2023
	Product		Professional Services		Managed Services		Financing		Total
Net Sales
Contracts with customers	$	490,543	$	35,556	$	31,963	$	1,290	$	559,352
Financing and other		7,623		-		-		7,200		14,823
Total	$	498,166	$	35,556	$	31,963	$	8,490	$	574,175
Timing and position as principal or agent
Transferred at a point in time as principal	$	452,382	$	-	$	-	$	1,290	$	453,672
Transferred at a point in time as agent		38,161		-		-		-		38,161
Transferred over time as principal		-		35,556		31,963		-		67,519
Total revenue from contracts with customers	$	490,543	$	35,556	$	31,963	$	1,290	$	559,352

The following table provides a disaggregation of net sales by source and further disaggregates our revenue recognized from contracts with customers by timing and our position as principal or agent for the three-month period ended June 30, 2022 (in thousands):

	Three months ended June 30, 2022
	Product		Professional Services		Managed Services		Financing		Total
Net Sales
Contracts with customers	$	380,693	$	37,168	$	25,941	$	945	$	444,747
Financing and other		4,983		-		-		8,629		13,612
Total	$	385,676	$	37,168	$	25,941	$	9,574	$	458,359
Timing and position as principal or agent
Transferred at a point in time as principal	$	335,714	$	-	$	-	$	945	$	336,659
Transferred at a point in time as agent		44,979		-		-		-		44,979
Transferred over time as principal		-		37,168		25,941		-		63,109
Total revenue from contracts with customers	$	380,693	$	37,168	$	25,941	$	945	$	444,747

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TECHNOLOGY BUSINESS DISAGGREGATION OF REVENUE

The following table provides a disaggregation of our revenue from contracts with customers for our technology business by customer end market and by type (in thousands):

	Three Months Ended June 30,
	2023			2022
Customer end market:
Telecom, media & entertainment	$	141,335		$	128,277
SLED		109,405			64,602
Healthcare		86,656			68,512
Technology		73,403			69,862
Financial services		65,690			33,299
All others		89,196			84,233
Net sales		565,685			448,785
Less: revenue from financing and other		(7,623	)		(4,983	)
Total revenue from contracts with customers	$	558,062		$	443,802
Type:
Product
Networking	$	245,188		$	142,641
Cloud		172,044			164,733
Security		45,796			47,995
Collaboration		12,956			12,980
Other		22,182			17,327
Total product		498,166			385,676
Professional services		35,556			37,168
Managed services		31,963			25,941
Net sales		565,685			448,785
Less: revenue from financing and other		(7,623	)		(4,983	)
Total revenue from contracts with customers	$	558,062		$	443,802

We do not disaggregate sales by customer end market beyond the technology business level.

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 our revenues from contracts with customers within our financing segment is from the sales of off-lease equipment.

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Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This discussion is intended to further the reader’s understanding of our consolidated financial condition and results of operations. It should be read in conjunction with the unaudited consolidated financial statements included in this Quarterly Report on Form 10-Q and the audited consolidated financial statements included in our 2023 Annual Report. These historical financial statements may not be indicative of our future performance. This Management’s Discussion and Analysis of Financial Condition and Results of Operations may contain forward-looking statements, all of which are based on our current expectations and could be affected by the uncertainties and risks described in Part I, Item 1A, “Risk Factors,” in our 2023 Annual Report, as well as in our other filings with the SEC.

EXECUTIVE OVERVIEW

BUSINESS DESCRIPTION

We are a leading solutions provider in the areas of security, cloud, networking, collaboration, artificial intelligence, and emerging technologies to domestic and foreign organizations across all industry segments. We deliver actionable outcomes for organizations by using information technology (“IT”) and consulting solutions to drive business agility and innovation. Leveraging our engineering talent, we assess, plan, deliver, and secure solutions comprised of leading technologies and consumption models aligned with our customers’ needs. Our expertise and experience enable us to craft optimized solutions that take advantage of the cost, scale, and efficiency of private, public and hybrid cloud in an evolving market. As part of our solutions, we provide consulting, professional services, managed services, IT staff augmentation, and complete lifecycle management services in the areas of security, cloud, networking, collaboration, and emerging technologies. Additionally, we offer flexible financing for purchases from us and from third parties. We have been in the business of selling, leasing, financing, and managing IT and other assets for more than 30 years.

Our primary focus is to deliver integrated solutions that address our customers’ business needs, leveraging the appropriate technologies, both on-premises and in the cloud. Our approach is to lead with advisory consulting to understand our customers’ needs, and then design, deploy, and manage solutions aligned to their objectives. Underpinning the broader areas of cloud, security, networking, and collaboration are specific skills in orchestration and automation, application modernization, DevSecOps, zero-trust architectures, data management, data visualization, analytics, network modernization, edge compute and other advanced and emerging technologies. These solutions are comprised of class-leading technologies from partners such as Amazon Web Services, Arista Networks, Check Point, Cisco Systems, Citrix, Commvault, Crowdstrike, Deepwatch, Dell EMC, F5 Networks, Foresite, Fortinet, Gigamon, HPE, Juniper Networks, Lenovo, Microsoft, NetApp, Nutanix, NVIDIA, Oracle, Palo Alto Networks, Proficio, Pure Storage, Rubrik, Splunk, Varonis, and VMware, among many others. We are an authorized reseller of over 1,500 vendors, which enable us to provide our customers with new and evolving IT solutions. We possess top-level engineering certifications with a broad range of leading IT vendors that enable us to offer multi-vendor IT solutions that are optimized for each of our customers’ specific requirements. Our hosted, proprietary software solutions are focused on giving our customers more control over their IT supply chain, by automating and optimizing the procurement and management of their owned, leased, and consumption-based assets.

Our scale and financial resources have enabled us to continue investing in engineering and technology resources to stay at the forefront of technology trends. Our expertise in core and emerging technologies, buttressed by our robust portfolio of consulting, professional, and managed services, has enabled us to remain a trusted advisor for our customers. In addition, we offer a wide range of consumption options including leasing and financing for technology and other capital assets. We believe our lifecycle approach offering of integrated solutions, services and financing, asset management and our proprietary supply chain software, is unique in the industry. This broad portfolio enables us to deliver a customized customer experience that spans the continuum from fast delivery of competitively priced products and services to subsequent management and maintenance, and through to end-of-life disposal services. This approach permits us to deploy sophisticated solutions to enable our customers’ business outcomes.

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Our go-to-market strategy focuses primarily on diverse end-markets for middle market to large enterprises. We serve customers in markets including telecom, media and entertainment, technology, state and local government and educational institutions (“SLED”), healthcare, and financial services. We sell to customers in the United States (“US”), which account for most of our sales, and to customers in select international markets including the United Kingdom (“UK”), the European Union (“EU”), India, Singapore, and Israel. Our technology business segments accounted for 99% of our net sales and 94% of our operating income, while our financing segment accounted for 1% of our net sales and 6% of our operating income, for the three months ended June 30, 2023.

BUSINESS TRENDS

We believe the following key business trends are impacting our business performance and our ability to achieve business results:

• General economic concerns including inflation, rising interest rates, staffing shortages, remote work trends, 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 in the industry, we are experiencing ongoing supply constraints that have affected, and could continue to further affect, lead times for delivery of products, our having to carry more inventory for longer periods, the cost 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 service 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. Accordingly, inflation could 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, work from anywhere, 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 and maintain their desired outcome.

• 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, which may include invoicing over the term of the agreement.

• Rapid cloud adoption has led to customer challenges around increasing costs, security concerns, and skillset gaps. These challenges are consistent across all industries and sizes. We have developed a Cloud Managed Services portfolio to address these needs, allowing our clients to focus on driving business outcomes via optimized and secure cloud platforms.

KEY BUSINESS METRICS

Our management monitors several financial and non-financial measures and ratios on a regular basis to track the progress of our business. We believe that the most important of these measures and ratios include net sales, gross margin, operating income margin, net earnings, and net earnings per common share, in each case based on information prepared in accordance with US GAAP, as well as the non-GAAP financial measures and ratios, including Adjusted EBITDA, Adjusted EBITDA margin, Non-GAAP: Net earnings and Non-GAAP: Net earnings per common share. We use a variety of operating and other information to evaluate the operating performance of our business, develop financial forecasts, make strategic decisions, and prepare and approve annual budgets. We use Gross billings as an operational metric to assess the volume of transactions within our Technology business as well as to understand changes in our accounts receivable. We believe Gross billings will aid investors in the same manner.

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These key indicators include financial information that is prepared in accordance with US GAAP and presented in our consolidated financial statements, as well as non-GAAP and operational performance measurement tools. Generally, a non-GAAP financial measure is a numerical measure of a company’s performance or financial position that either excludes or includes amounts that are correspondingly not normally excluded or included in the most directly comparable measure calculated and presented in accordance with US GAAP. Our use of non-GAAP information as analytical tools has limitations, and you should not consider them in isolation or as substitutes for analysis of our financial results reported under GAAP, as these measures used by management may differ from similar measures used by other companies, even when similar terms are used to identify such measures.

Set forth in footnotes (1) and (2) of the tables that immediately follow this paragraph, we set forth our reasons for using and presenting Adjusted EBITDA, Adjusted EBITDA margin, Non-GAAP: Net earnings and Non-GAAP: Net earnings per common share-diluted in the tables and discussion that follow.

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The following table provides our key business metrics (in thousands, except per share amounts):

	Three Months Ended June 30,
Consolidated	2023			2022
Financial Metrics
Net sales	$	574,175		$	458,359
Gross profit	$	142,273		$	113,523
Gross margin		24.8	%		24.8	%
Operating income margin		8.1	%		7.2	%
Net earnings	$	33,847		$	22,339
Net earnings margin		5.9	%		4.9	%
Net earnings per common share - diluted	$	1.27		$	0.84
Non-GAAP Financial Metrics
Non-GAAP: Net earnings (1)	$	37,687		$	26,513
Non-GAAP: Net earnings per common share - diluted (1)	$	1.41		$	0.99
Adjusted EBITDA (2)	$	53,879		$	38,304
Adjusted EBITDA margin		9.4	%		8.4	%
Technology Business
Financial Metrics
Net sales	$	565,685		$	448,785
Gross profit	$	135,912		$	105,651
Gross margin		24.0	%		23.5	%
Operating income	$	43,498		$	29,219
Non-GAAP Financial Metric
Adjusted EBITDA (2)	$	50,949		$	34,254
Operational Metric
Gross billings (3)
Cloud	$	258,924		$	253,337
Networking		276,645			165,626
Security		147,343			145,349
Collaboration		22,161			34,775
Other		69,761			49,009
Product gross billings		774,834			648,096
Service gross billings		67,136			68,167
Total gross billings	$	841,970			716,263
Financing Segment
Financial Metrics
Net sales	$	8,490		$	9,574
Gross profit	$	6,361		$	7,872
Operating income	$	2,834		$	3,964
Non-GAAP Financial Metric
Adjusted EBITDA (2)	$	2,930		$	4,050

(1) Non-GAAP: Net earnings and Non-GAAP: Net earnings per common share – diluted are based on net earnings calculated in accordance with US GAAP, adjusted to exclude other (income) expense, share-based compensation, and acquisition and integration expenses, and the related tax effects.

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We use Non-GAAP: Net earnings and Non-GAAP: Net earnings per common share – diluted as supplemental measures of our performance to gain insight into our operating performance and performance trends. We believe that the exclusion of other income and acquisition-related amortization expense in calculating Non-GAAP: Net earnings and Non-GAAP: Net earnings per common share – diluted provides management and investors a useful measure for period-to-period comparisons of our business and operating results by excluding items that management believes are not reflective of our underlying operating performance. Accordingly, we believe that Non-GAAP: Net earnings and Non-GAAP: Net earnings per common share – diluted provide useful information to investors and others in understanding and evaluating our operating results. However, our use of non-GAAP information as analytical tools has limitations, and you should not consider them in isolation or as substitutes for analysis of our financial results as reported under US GAAP. In addition, other companies, including companies in our industry, might calculate similar Non-GAAP: Net earnings and Non-GAAP: Net earnings per common share – diluted or similarly titled measures differently, which may reduce their usefulness as comparative measures.

The following table provides our calculation of Non-GAAP: Net earnings and Non-GAAP: Net earnings per common share – diluted (in thousands, except per share amounts):

	Three Months Ended June 30,
	2023			2022
GAAP: Earnings before tax	$	46,522		$	31,030
Share based compensation		2,205			1,773
Acquisition related amortization expense		3,469			2,183
Other (income) expense		(190	)		2,153
Non-GAAP: Earnings before provision for income taxes		52,006			37,139
GAAP: Provision for income taxes		12,675			8,691
Share based compensation		607			508
Acquisition related amortization expense		952			617
Other (income) expense		(52	)		616
Tax benefit (expense) on restricted stock		137			194
Non-GAAP: Provision for income taxes		14,319			10,626
Non-GAAP: Net earnings	$	37,687		$	26,513

	Three Months Ended June 30,
	2023			2022
GAAP: Net earnings per common share - diluted	$	1.27		$	0.84
Share based compensation		0.06			0.04
Acquisition and integration expense		-			-
Acquisition related amortization expense		0.09			0.06
Other (income) expense		-			0.06
Tax benefit (expense) on restricted stock		(0.01	)		(0.01	)
Total non-GAAP adjustments - net of tax		0.14			0.15
Non-GAAP: Net earnings per common share - diluted	$	1.41		$	0.99

(2) We define Adjusted EBITDA as net earnings calculated in accordance with US 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 US 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. In the table below, we provide 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.

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We use Adjusted EBITDA as a supplemental measure of our performance to gain insight into our operating performance and performance trends. We believe that the exclusion of other income in calculating Adjusted EBITDA and Adjusted EBITDA margin provides management and investors a useful measure for period-to-period comparisons of our business and operating results by excluding items that management believes are not reflective of our underlying operating performance. Accordingly, we believe that Adjusted EBITDA and Adjusted EBITDA margin provide useful information to investors and others in understanding and evaluating our operating results. However, our use of Adjusted EBITDA and Adjusted EBITDA margin as analytical tools has limitations, and you should not consider them in isolation or as substitutes for analysis of our financial results as reported under US GAAP. In addition, other companies, including companies in our industry, might calculate Adjusted EBITDA and Adjusted EBITDA margin or similarly titled measures differently, which may reduce their usefulness as comparative measures.

The following table provides our calculations of Adjusted EBITDA (in thousands):

	Three Months Ended June 30,
Consolidated	2023			2022
Net earnings	$	33,847		$	22,339
Provision for income taxes		12,675			8,691
Share based compensation		2,205			1,773
Interest and financing costs		550			138
Depreciation and amortization		4,792			3,210
Other income (expense)		(190	)		2,153
Adjusted EBITDA	$	53,879		$	38,304
Technology Business
Operating income	$	43,498		$	29,219
Depreciation and amortization		4,764			3,182
Share based compensation		2,137			1,715
Interest and financing costs		550			138
Adjusted EBITDA	$	50,949		$	34,254
Financing Segment
Operating income	$	2,834		$	3,964
Depreciation and amortization		28			28
Share based compensation		68			58
Adjusted EBITDA	$	2,930		$	4,050

(3) Gross billings are the total dollar value of customer purchases of goods and services including shipping charges during the period, net of customer returns and credit memos, sales, or other taxes. Gross billings includes the transaction values for certain sales transactions that are recognized on a net basis, and, therefore, includes amounts that will not be recognized as revenue.

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CONSOLIDATED RESULTS OF OPERATIONS

Net sales: Net sales for the three months ended June 30, 2023, increased 25.3% to $574.2 million, or an increase of $115.8 million compared to $458.4 million in the same three-month period in the prior year. The increase in net sales was driven by higher revenues from our technology business segments, offset by lower revenues from our financing segment. The increase in sales from the technology business segments was due to increases in both product and managed services sales, driven by increased demand from our customers, including customers from the Network Solutions Group (“NSG”) and Future Com acquisitions. These increases were offset by lower professional service sales due to lower staff augmentation revenues due to softer demand by our customers. The decline in revenues from our financing segment was due to lower transactional gains from the sale of financial assets and lower month-to-month rents.

Gross billings from our technology business segments for the three months ended June 30, 2023, increased by 17.6%, or $125.7 million, to $842.0 million compared to $716.3 million in the same three-month period in the prior year. Gross billings increased due to both organic customer demand as well as from the acquisitions of NSG and Future Com.

Gross profit: Gross profit for the three months ended June 30, 2023, increased 25.3%, to $142.3 million, compared to $113.5 million in the same three-month period in the prior year due to increased net sales volume. Overall, gross margins were consistent quarter over quarter as higher product margins in our technology business were offset by lower margins in our financing segment.

Operating expenses: Operating expenses for the three months ended June 30, 2023, increased $15.6 million, or 19.4%, to $95.9 million, as compared to $80.3 million for the same three-month period in the prior year. Our increase in operating expenses was primarily due to an increase of $12.1 million in salaries and benefits, mainly driven by an increase in headcount as well as higher variable compensation corresponding to the increase in gross profit. As of June 30, 2023, we had 1,853 employees, an increase of 13.2% from 1,637 as of June 30, 2022.

General and administrative expenses also increased $1.6 million for the three-months ended June 30, 2023, compared to the three months ended June 30, 2022, as we had higher software, subscription and maintenance fees and travel and entertainment costs. Travel and entertainment increased due to the return of in-person business meetings and events. In addition, we had higher professional fees, mainly driven by certain internal projects.

Depreciation and amortization increased $1.6 million for the three months ended June 30, 2023, compared to the three months ended June 30, 2022, due to increased amortization of intangible assets from the acquisition of NSG. Interest and financing costs increased $0.5 million for the three months ended June 30, 2023, compared to the same three-month period in the prior year due to higher outstanding borrowings. Offsetting these increases was a decrease of $0.2 million in provision for credit losses.

Operating income: As a result of the foregoing, operating income for the three months ended June 30, 2023, increased $13.1 million, or 39.6%, to $46.3 million, as compared to $33.2 million for the three months ended June 30, 2022, and operating margin increased by 90 basis points to 8.1%. The increase in operating income was due to increases from our technology business segments, which was offset by lower operating income from our financing segment.

Adjusted EBITDA for the three months ended June 30, 2023, was $53.9 million, an increase of $15.6 million, or 40.7%, compared to the same three-month period in the prior year. Adjusted EBITDA margin for the three months ended June 30, 2023, increased 100 basis points to 9.4%, as compared to the three months ended June 30, 2022, of 8.4%. The increase in Adjusted EBITDA was due to increases from our technology business, which was offset by lower Adjusted EBITDA from our financing segment.

Net earnings per common share diluted for the three months ended June 30, 2023, increased $0.43, or 51.2%, to $1.27 per share, as compared to $0.84 per share in the same three-month period in the prior year. Non-GAAP: Net earnings per common share diluted for the three months ended June 30, 2023, increased $0.42, or 42.4%, to $1.41 per share, as compared to $0.99 per share for the three months ended June 30, 2022.

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SEGMENT OVERVIEW

TECHNOLOGY BUSINESS SEGMENTS

Our technology business includes three segments: product, professional services and managed services as further discussed below.

• Product segment: Our product segment consists of the sale of third-party hardware, third-party perpetual and subscription software, and third-party maintenance, software assurance, and other third-party services. The product segment also includes internet-based business-to-business supply chain management solutions for IT products.

• Professional services segment: Our professional services segment includes our advanced professional services to our customers that are performed under time and materials, fixed fee, or milestone contracts. Professional services include cloud consulting, staff augmentation services, and project management services.

• Managed services segment: Our managed services segment includes our advanced managed services that include managing various aspects of our customers’ environments and are billed in regular intervals over a contract term, usually between three to five years. Managed services also include security solutions, storage-as-a-service, cloud hosted services, cloud managed services, and service desk.

This is the first quarterly period in which we are reporting these three separate segments within our technology business as we previously consolidated this information within a single technology segment. Based upon our current business and operations, we intend to continue reporting these three segments that will comprise our technology business.

Our technology business segments sell primarily to corporations, state and local governments, and higher education institutions. Customers of our technology business may have a customer master agreement (“CMA”) with our company, which stipulates the terms and conditions of the commercial relationship. Some CMAs contain pricing arrangements, and most contain mutual voluntary termination clauses. Our other customers place orders using purchase orders without a CMA in place or with other documentation customary for the business. Often, our work with state and local governments is based on public bids and our written bid responses. Our service engagements are generally governed by statements of work and are primarily fixed price (with allowance for changes); however, some service agreements are based on time and materials.

We endeavor to minimize the cost of sales in our product segment through incentive programs provided by vendors and distributors. The programs we qualify for are generally set by our reseller authorization level with the vendor. The authorization level we achieve and maintain governs the types of products we can resell as well as such items as variable discounts applied against the list price, funds provided for the marketing of these products and other special promotions. These authorization levels are achieved by us through purchase volume, certifications held by sales executives or engineers and/or contractual commitments by us. The authorization levels are costly to maintain, and these programs continually change; therefore, there is no guarantee of future reductions of costs provided by these vendor consideration programs.

FINANCING SEGMENT

Our financing segment offers financing solutions to corporations, government contractors, state and local governments, and educational institutions in the US, which accounts for most of our transactions, and to corporations in select international markets including Canada, the UK, and the EU. The financing segment derives revenue from leasing IT equipment, medical equipment, and other equipment, and the disposition of that equipment at the end of the lease. The financing segment also derives revenues from the financing of third-party software licenses, software assurance, maintenance, and other services.

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Financing revenue generally falls into the following three categories:

• Portfolio income: Interest income from financing receivables and rents due under operating leases.

• Transactional gains: Net gains or losses on the sale of financial assets.

• Post-contract earnings: Month-to-month rents; early termination, prepayment, make-whole, or buyout fees; and the sale of off-lease (used) equipment.

FLUCTUATIONS IN OPERATING RESULTS

Our operating results may fluctuate due to customer demand for our products and services, supplier costs, product availability, changes in vendor incentive programs, interest rate fluctuations, currency fluctuations, the timing of sales of financial assets, general economic conditions, and differences between estimated residual values and actual amounts realized for leased equipment. We expect to continue to expand by hiring additional staff for specific targeted market areas and roles whenever we can find both experienced personnel and desirable geographic areas over the longer term, which may impact our operating results.

SEGMENT RESULTS OF OPERATIONS

The three months ended June 30, 2023, compared to the three months ended June 30, 2022

TECHNOLOGY BUSINESS SEGMENTS

The results of operations for our technology business segments were as follows (dollars in thousands):

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	Three Months Ended June 30,
	2023			2022			Change			Percent Change
Financial Metrics
Net sales
Product	$	498,166		$	385,676		$	112,490			29.2	%
Professional Services		35,556			37,168			(1,612	)		(4.3	%)
Managed Services		31,963			25,941			6,022			23.2	%
Total		565,685			448,785			116,900			26.0	%
Gross Profit
Product		111,391			83,168			28,223			33.9	%
Professional Services		14,724			15,055			(331	)		(2.2	%)
Managed Services		9,797			7,428			2,369			31.9	%
Total		135,912			105,651			30,261			28.6	%
Selling, general, and administrative		87,100			73,112			13,988			19.1	%
Depreciation and amortization		4,764			3,182			1,582			49.7	%
Interest and financing costs		550			138			412			298.6	%
Operating expenses		92,414			76,432			15,982			20.9	%
Operating income	$	43,498		$	29,219		$	14,279			48.9	%
Key Metrics & Other Information
Gross billings	$	841,970		$	716,263		$	125,707			17.6	%
Adjusted EBITDA	$	50,949		$	34,254		$	16,695			48.7	%
Product margin		22.4	%		21.6	%
Professional service margin		41.4	%		40.5	%
Managed service margin		30.7	%		28.6	%
Net sales by customer end market:
Telecom, media & entertainment	$	141,335		$	128,277		$	13,058			10.2	%
SLED		109,405			64,602			44,803			69.4	%
Healthcare		86,656			68,512			18,144			26.5	%
Technology		73,403			69,862			3,541			5.1	%
Financial services		65,690			33,299			32,391			97.3	%
All others		89,196			84,233			4,963			5.9	%
Total	$	565,685		$	448,785		$	116,900			26.0	%
Net sales by type:
Networking	$	245,188		$	142,641		$	102,547			71.9	%
Cloud		172,044			164,733			7,311			4.4	%
Security		45,796			47,995			(2,199	)		(4.6	%)
Collaboration		12,956			12,980			(24	)		(0.2	%)
Other		22,182			17,327			4,855			28.0	%
Total Products		498,166			385,676			112,490			29.2	%
Professional services		35,556			37,168			(1,612	)		(4.3	%)
Managed services		31,963			25,941			6,022			23.2	%
Total	$	565,685		$	448,785		$	116,900			26.0	%

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Net sales: Net sales of the combined technology business for the three months ended June 30, 2023, increased compared to the three months ended June 30, 2022, driven by demand from customers in telecom, media, and entertainment, financial services, SLED, and healthcare industries.

Product segment sales for the three months ended June 30, 2023, increased compared to the same three-month period in the prior year due to higher sales of networking equipment and cloud products. These changes were driven by the timing of purchases by existing customers, which are determined by their buying cycles, and the timing of specific IT related initiatives. In addition, the increase in net product sales during this three-month period, was due to demand from customers from the NSG and Future Com acquisitions, which combined contributed $34.8 million to the increase in product net sales. Also contributing to the increase in product sales were improvements in the supply chain, particularly networking products.

Professional services segment sales for the three months ended June 30, 2023, decreased compared to the three months ended June 30, 2022, due to a decrease in staff augmentation revenue of $1.9 million primarily related to softer demand from customers. Offsetting this decline was higher project related services of $0.3 million.

Managed services segment sales for the three months ended June 30, 2023, increased compared to the three months ended June 30, 2022, due to ongoing expansion of these service offerings primarily related to ongoing growth in Enhanced Maintenance Support (“EMS”) and Security Operations Center (“SOC”) revenue.

Gross profit: Gross profit of the combined technology business segments for the three months ended June 30, 2023, increased compared to the three months ended June 30, 2022, due to the increase in product and managed service sales. Gross margin increased during this three-month period due to higher product, professional service, and managed service margins.

Product segment margin for the three months ended June 30, 2023, increased by 80 basis points from the same three-month period in the prior year as higher up-front margins were offset by lower vendor rebates and a lower proportion of sales of third-party maintenance, software assurance, subscriptions/SaaS licenses, and services, which was recognized on a net basis. The increase in margin was due to the timing of customer buying cycles and specific IT initiatives.

Professional services segment margins for the three months ended June 30, 2023, increased by 90 basis points from the same three-month period in the prior year primarily due to a shift in mix toward higher margin project-based services.

Managed services segment margins for the three months ended June 30, 2023, increased by 210 basis points from the same three-month period in the prior year due to improved margins as we continue to scale these service offerings.

Selling, general, and administrative: Selling, general, and administrative expenses for the three technology business segments for the three months ended June 30, 2023, increased compared to the three months ended June 30, 2022, mainly due to increases in salaries and benefits.

Salaries and benefits for the three months ended June 30, 2023, increased $12.4 million, or 20.1% to $74.1 million, as compared to $61.7 million for the same period in the prior year, due to an increase of $8.0 million in salaries and benefits, mainly driven by increased headcount, and an increase of $4.4 million in variable compensation because of the increase in gross profit. Our three technology business segments had an aggregate of 1,818 employees as of June 30, 2023, an increase of 216 from 1,602 as of June 30, 2022, of which 83 were from the acquisition of NSG. In total, we added 171 additional customer-facing employees for the three months ended June 30, 2023, compared to the same three-month period in the prior year, of which 84 were professional services and technical support personnel due to demand for our services.

General and administrative expenses for the three technology business segments for the three months ended June 30, 2023, increased $1.4 million, or 12.5%, to $12.5 million, as compared to $11.1 million for the same three-month period in the prior year, due to higher professional fees of $0.8 million, mainly driven by certain internal projects. In addition, we incurred higher travel and entertainment costs of $0.2 million due to the return of in-person business meetings and events.

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Provision for credit losses for the three technology business segments for the three months ended June 30, 2023, was $0.5 million, as compared to $0.3 million for the same three-month period in the prior year. Our higher provision for credit losses for the three months ended June 30, 2023, was due to changes in our net credit exposure.

Depreciation and amortization: Depreciation and amortization of the three technology business segments for the three months ended June 30, 2023, increased compared to the three months ended June 30, 2022, primarily due to more amortization from intangible assets acquired in the NSG acquisition.

Interest and financing costs: Interest and financing costs of the three technology business segments for the three months ended June 30, 2023, increased compared to the three months ended June 30, 2022, due to higher average borrowings outstanding and higher interest rates under our WFCDF Credit Facility.

FINANCING SEGEMENT

The results of operations for our financing segment were as follows (dollars in thousands):

	Three Months Ended June 30,
	2023		2022		Change			Percent Change
Financial Metrics
Portfolio earnings	$	3,073	$	2,673	$	400			15.0	%
Transactional gains		1,279		1,835		(556	)		(30.3	%)
Post-contract earnings		3,634		4,726		(1,092	)		(23.1	%)
Other		504		340		164			48.2	%
Net sales	$	8,490	$	9,574	$	(1,084	)		(11.3	%)
Gross profit		6,361		7,872		(1,511	)		(19.2	%)
Selling, general, and adminstrative		3,198		3,655		(457	)		(12.5	%)
Depreciation and amortization		28		28		-			0.0	%
Interest and financing costs		301		225		76			33.8	%
Operating expenses		3,527		3,908		(381	)		(9.7	%)
Operating income	$	2,834	$	3,964	$	(1,130	)		(28.5	%)
Key Metrics & Other Information
Adjusted EBITDA	$	2,930	$	4,050	$	(1,120	)		(27.7	%)

Net sales: Net sales for the three months ended June 30, 2023, decreased due to lower post-contract earnings and transactional gains. Post-contract earnings decreased due to lower month-to-month rents. Transactional gains decreased compared to the prior year due to lower margin from financial assets sold during the quarter. Total proceeds from sales of financing receivables were $61.4 million and $52.5 million for the three months ended June 30, 2023, and 2022, respectively.

Gross Profit: Gross profit for the three months ended June 30, 2023, decreased compared to the three months ended June 30, 2022, due to higher cost of sales on off-lease equipment and direct lease costs, which were offset slightly by lower depreciation expense from operating leases.

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Selling, general and administrative: Selling, general, and administrative expenses for the three months ended June 30, 2023, decreased compared to the three months ended June 30, 2022, due to reduced provision for credit losses because of changes in our net credit exposure. In addition, salaries and benefits decreased, mainly driven by a decrease in variable compensation due to the decline in gross profit. These decreases are offset by a slight increase in general and administrative costs due to the deployment of a hosted lease accounting software in August 2022, as we incurred higher professional fees following the implementation of this software platform, as well as higher software license and maintenance costs including amortization of the costs to implement the hosted software.

Interest and financing costs: Interest and financing costs for the three months ended June 30, 2023, increased slightly compared to the three months ended June 30, 2022, due to higher interest rates. As of June 30, 2023, our non-recourse notes payable decreased to $20.2 million from $26.4 million in the prior year. Our weighted average interest rate for non-recourse notes payable was 5.22% and 3.78% as of June 30, 2023, and 2022, respectively.

CONSOLIDATED

Other income (expense), net: Other income (expense), net, for the three months ended June 30, 2023, increased to $0.2 million, compared to a net expense of $2.2 million in the prior year. We incurred $0.4 million of interest and dividend income on investments, offset by foreign currency transaction losses of $0.2 million during the three months ended June 30, 2023, compared to foreign currency transaction losses of $2.2 million in the same three-month period in the prior year.

Provision for income taxes: Our provision for income tax expense was $12.7 million for the three months ended June 30, 2023, as compared to $8.7 million for the same three-month period in the prior year. Our effective tax rate for the three months ended June 30, 2023, was 27.2%, compared with 28.0% for the same period in the prior year. Our effective tax rate was lower for the three months ended June 30, 2023, as compared to the prior year, primarily due to a lower state effective tax rate.

Net earnings: Net earnings for the three months ended June 30, 2023, were $33.8 million, an increase of 51.5% or $11.5 million, as compared to $22.3 million in the prior year. The net earnings increase was due primarily to the increase in operating profits from our technology business.

Basic and fully diluted earnings per common share were both $1.27, for the three months ended June 30, 2023, an increase of 51.2% over the prior year. Basic and fully diluted earnings per common share were both $0.84, for the three months ended June 30, 2022.

Weighted average common shares outstanding used in the calculation of basic and diluted earnings per common share were both 26.6 million for the three months ended June 30, 2023. Weighted average common shares outstanding used in the calculation of basic and diluted earnings per common share were 26.5 million and 26.7 million, respectively, for the three months ended and June 30, 2022.

LIQUIDITY AND CAPITAL RESOURCES

LIQUIDITY OVERVIEW

We finance our operations through funds generated from operations and through borrowings. We use those funds to meet our capital requirements, which have historically consisted primarily of working capital for operational needs, capital expenditures, purchases of equipment for lease, payments of principal and interest on indebtedness outstanding, acquisitions and the repurchase of shares of our common stock.

Our borrowings in our technology business segments are through our WFCDF Credit Facility. Our borrowings in our financing segment are primarily through secured borrowings that involve transferring all or part of the contractual payments due to us to third-party financing institutions.

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

Our ability to continue to expand, both organically and through acquisitions, is dependent upon our ability to generate enough cash flow from operations or from borrowing or other sources of financing as may be required. While at this time we do not anticipate requiring any additional sources of financing to fund operations, if demand for IT products declines, or if our supply of products is delayed or interrupted, our cash flows from operations may be substantially affected.

CASH FLOWS

The following table summarizes our sources and uses of cash for the three months ended June 30, 2023, and 2022 (in thousands):

	Three Months Ended June 30,
	2023			2022
Net cash used in operating activities	$	(20,900	)	$	(102,943	)
Net cash used in investing activities		(63,097	)		(1,692	)
Net cash provided by (used in) financing activities		82,605			31,111
Effect of exchange rate changes on cash		(127	)		1,634
Net deccrease in cash and cash equivalents	$	(1,519	)	$	(71,890	)

Cash flows from operating activities: We used $20.9 million in operating activities during the three months ended June 30, 2023, compared to using $102.9 million for the three months ended June 30, 2022. See below for a breakdown of operating cash flows by segment (in thousands):

	Three Months Ended June 30,
	2023			2022
Technology business	$	(48,259	)	$	(104,645	)
Financing segment		27,359			1,702
Net cash used in operating activities	$	(20,900	)	$	(102,943	)

Technology business: For the three months ended June 30, 2023, our technology business used $48.3 million from operating activities primarily due to increases in our accounts receivable of $159.3 million, offset by an increase in accounts payable - trade of $60.2 million and net earnings. Further, we had net borrowings on the floor plan component of our credit facility of $32.3 million. We use this credit facility to manage working capital needs, however, we present changes in this balance as financing activity in our consolidated statement of cash flows.

For the three months ended June 30, 2022, our technology business used $104.6 million from operating activities primarily due to increases in our accounts receivable and inventories, offset by net earnings. Further, we had net repayments on the floor plan component of our credit facility of $7.3 million.

To manage our working capital, we monitor our cash conversion cycle for our technology business, which is defined as days sales outstanding (“DSO”) in accounts receivable plus days of supply in inventory (“DIO”) minus days of purchases outstanding in accounts payable (“DPO”).

The following table presents the components of the cash conversion cycle for our Technology business:

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	As of June 30,
	2023			2022
(DSO) Days sales outstanding (1)		62			59
(DIO) Days inventory outstanding (2)		32			30
(DPO) Days payable outstanding (3)		(46	)		(45	)
Cash conversion cycle		48			44

(1) Represents the rolling three-month average of the balance of trade accounts receivable-trade, net for our technology business at the end of the period divided by Gross billings for the same three-month period.

(2) Represents the rolling three-month average of the balance of inventory, net for our technology business at the end of the period divided by the direct cost of products and services billed to our customers 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 business at the end of the period divided by the direct cost of products and services billed to our customers for the same three-month period.

Our cash conversion cycle increased to 48 days as of June 30, 2023, as compared to 44 days as of June 30, 2022. Our standard payment term for customers is between 30-60 days; however, certain customer orders may be approved for extended payment terms. Our DPO increased 1 day as of June 30, 2023. Invoices processed through our credit facility, or the A/P-floor plan balance, are typically paid within 45-60 days from the invoice date, while A/P trade invoices are typically paid within 30-60 days from the invoice date. Our DSO increased 3 days to 62 days as of June 30, 2023, compared to June 30, 2022, reflecting higher sales to customers with terms greater than or equal to net 60 days. Our DIO increased to 32 days as of June 30, 2023, compared to 30 days as of June 30, 2022.

Financing segment: For the three months ended June 30, 2023, our financing segment provided $27.4 million from operating activities, primarily due to an increase in accounts payable-trade offset by increases in financing receivables-net. In the three months ended June 30, 2022, our financing segment provided $1.7 million from operating activities, primarily due to net earnings, decreases in accounts receivable, and increases in accounts payable-trade offset by increases in financing receivables-net.

Cash flows related to investing activities: For the three months ended June 30, 2023, we used $63.1 million from investing activities, consisting of $59.6 million for the acquisition of NSG, and $3.7 million for purchases of property, equipment and operating lease equipment offset by $0.2 million of proceeds from the sale of property, equipment, and operating lease equipment. For the three months ended June 30, 2022, we used $1.7 million from investing activities, consisting of $1.8 million for purchases of property, equipment and operating lease equipment offset by $0.1 million of proceeds from the sale of property, equipment, and operating lease equipment.

Cash flows from financing activities: For the three months ended June 30, 2023, cash provided by financing activities was $82.6 million, consisting of net borrowings of non-recourse and recourse notes payable of $56.4 million, net borrowings on the floor plan component of our credit facility of $32.3 million, and proceeds of issuance of common stock to employees under an employee stock purchase plan of $1.4 million, partially offset by $7.5 million in cash used to repurchase outstanding shares of our common stock. For the three months ended June 30, 2022, cash provided by financing activities was $31.1 million, consisting of net borrowings of non-recourse and recourse notes payable of $45.6 million, partially offset by $7.2 million in cash used to repurchase outstanding shares of our common stock and $7.3 million in net repayments on the floor plan component of our credit facility.

Our borrowing of recourse and non-recourse notes payable primarily arises from our financing segment when we transfer contractual payments due to us under lease and financing agreements to third-party financial institutions. When the transfers do not meet the requirements for a sale, the proceeds paid to us represent borrowings of non-recourse or recourse notes payable.

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Non-cash activities: We transfer contractual payments due to us under lease and financing agreements to third-party financial institutions. In certain assignment agreements, we may direct the third-party financial institution to pay some of the proceeds from the assignment directly to the vendor or vendors that have supplied the assets being leased or financed. In these situations, the portion of the proceeds paid directly to our vendors are non-cash transactions.

SECURED BORROWINGS – FINANCING SEGMENT

We may finance all or most of the cost of the assets that we finance for customers by transferring all or part of the contractual payments due to us to third-party financing institutions. When we account for the transfer as a secured borrowing, we recognize the proceeds as either recourse or non-recourse notes payable. Our customers are responsible for repaying the debt from a secured borrowing. The lender typically secures a lien on the financed assets at the time the financial assets are transferred and releases it upon collecting all the transferred payments. We are not liable for the repayment of non-recourse loans unless we breach our representations and warranties in the loan agreements. The lender assumes the credit risk and their only recourse, upon default by the customer, is against the customer and the specific equipment under lease. While we expect that the credit quality of our financing arrangements and our residual return history will continue to allow us to obtain such financing, such financing may not be available on acceptable terms, or at all. Interest rates have been rising and may continue to rise. To preserve our expected internal rate of return, we generally quote rates that are indexed. Some of our lenders will not commit to rates for a length of time, resulting in exposure to us if the rates rise and we cannot pass such exposure to the customer.

CREDIT FACILITY – TECHNOLOGY BUSINESS

We finance the operations of our subsidiaries ePlus Technology, inc., ePlus Technology Services, inc. and SLAIT Consulting, LLC (collectively, the “Borrowers”) in our technology business through a credit facility with WFCDF. The WFCDF Credit Facility has a floor plan facility and a revolving credit facility.

Please refer to Note 8 “Notes Payable and Credit Facility” to the accompanying Consolidated Financial Statements included in “Part I, Item 1. Financial Statements” for additional information concerning our WFCDF Credit Facility.

The loss of the WFCDF Credit Facility could have a material adverse effect on our future results as we currently rely on this facility and its components for daily working capital and liquidity for our technology business and as an operational function of our accounts payable process.

Floor plan facility: We finance most purchases of products for sale to our customers through the floor plan facility. Once our customer places a purchase order with us and we have approved their credit, we place an order for the desired products with one of our vendors. Our vendors are generally paid by the floor plan facility and our liability is reflected in “accounts payable—floor plan” in our consolidated balance sheets.

Most customer payments to us are remitted to our lockbox accounts. Once payments are cleared, the monies in the lockbox accounts are automatically and daily transferred to our operating account. We pay down the floor plan facility on three specified dates each month, generally 30-60 days from the invoice date. Our borrowings and repayments under the floor plan component are included in “net borrowings (repayments) on floor plan facility” within cash flows from the financing activities in our consolidated statements of cash flows.

As of June 30, 2023, and March 31, 2023, we had a maximum credit limit of $500.0 million, and an outstanding balance on the floor plan facility of $182.9 million and $134.6 million, respectively. On our balance sheet, our liability under the floor plan facility is presented as part of accounts payable – floor plan.

Revolving credit facility: The outstanding balance under the revolving credit facility is presented as part of recourse notes payable- current on our consolidated balance sheets. Our borrowings and repayments under the revolving credit facility are included in “borrowings of non-recourse and recourse notes payable” and “repayments of non-recourse and recourse notes payable,” respectively, within cash flows from the financing activities in our consolidated statements of cash flows.

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As of June 30, 2023, the outstanding balance under the revolving credit facility was $52.0 million. On our balance sheet, our liability under the revolving credit facility is presented as part of recourse notes payable – current. As of March 31, 2023, we did not have any outstanding balance under the revolving credit facility. The maximum credit limit under this facility was $200.0 million as of both June 30, 2023, and March 31, 2023.

PERFORMANCE GUARANTEES

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

OFF-BALANCE SHEET ARRANGEMENTS

As part of our ongoing business, we do not participate in transactions that generate relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities, which would have been established for the purpose of facilitating off-balance sheet arrangements, or other contractually narrow or limited purposes. As of June 30, 2023, we were not involved in any unconsolidated special purpose entity transactions.

ADEQUACY OF CAPITAL RESOURCES

The continued implementation of our business strategy will require a significant investment in both resources and managerial focus. In addition, we may selectively acquire other companies that have attractive customer relationships and skilled sales and/or engineering forces. We may also open facilities in new geographic areas, which may require a significant investment of cash. We may also acquire technology companies to expand and enhance our geographic footprint, or the platform of bundled solutions to provide additional functionality and value-added services. We may require additional capital due to increases in inventory to accommodate our customers’ IT installation schedules. We may continue to use our internally generated funds to finance investments in leased assets or investments in notes receivable due from our customers. These actions may result in increased working capital needs as the business expands. As a result, we may require additional financing to fund our strategy, implementation, potential future acquisitions, and working capital needs, which may include additional debt and equity financing. While the future is uncertain, we do not believe our WFCDF Credit Facility will be terminated by WFCDF or us. Additionally, while our lending partners in our financing segment have become more discerning in their approval processes, we currently have funding resources available for our transactions.

POTENTIAL FLUCTUATIONS IN QUARTERLY OPERATING RESULTS

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

Our quarterly results of operations are susceptible to fluctuations for a number of reasons, including, but not limited to currency fluctuations, reduction in IT spending, shortages of product from our vendors due to material shortages, any reduction of expected residual values related to the equipment under our leases, the timing and mix of specific transactions, the reduction of manufacturer incentive programs, and other factors. Quarterly operating results could also fluctuate as a result of our sale of equipment in our lease portfolio to a lessee or third-party at the expiration of a lease term or prior to such expiration, and the transfer of financial assets. Sales of equipment and transfers of financial assets may have the effect of increasing revenues and net income during the quarter in which the sale occurs and reducing revenues and net income otherwise expected in subsequent quarters. See Part I, Item 1A, “Risk Factors,” in our 2023 Annual Report, as supplemented in subsequently filed reports, and in Part II, Item 1A. “Risk Factors” in this Report.

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

CRITICAL ACCOUNTING ESTIMATES

As disclosed in Note 2, “Recent Accounting Pronouncements,” we adopted a new standard on accounting for contract assets and contract liabilities from contracts with customers in a business combination in the second quarter of our fiscal year 2023. Under this new standard, we apply Accounting Standards Codification Topic 606, Contracts with Customers, to recognize and measure contract assets and contract liabilities from contracts with customers. Other than this change, our critical accounting estimates have not changed from those reported in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our 2023 Annual Report.

Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Although a substantial portion of our liabilities are non-recourse, fixed-interest-rate instruments, we utilize lines of credit and other financing facilities that are subject to fluctuations in short-term interest rates. Our non-recourse instruments, which are denominated in US dollars, were entered for other than trading purposes and bear interest at a fixed rate. Because the interest rate on these instruments is fixed, changes in interest rates will not directly impact our cash flows. 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. Borrowings under the WFCDF Credit Facility bear interest at a market-based variable rate. As of June 30, 2023, the aggregate fair value of our recourse and non-recourse borrowings approximated their carrying value.

We have foreign currency exposure when transactions are not denominated in our subsidiaries’ functional currency, which include purchases and sales of the products and services we provide, as well as loans with other ePlus entities. Additionally, we lease assets in foreign countries, including Canada, the UK, and several other European countries. As a lessor, we lease assets for amounts denominated in British Pounds, Euros, and Canadian dollars. To date, foreign currency exposure associated with purchases and sales of the products and services we provide has not been significant. We have incurred foreign currency transaction gains and losses in certain foreign subsidiaries on US dollar denominated loans. Fluctuations in currency exchange rates may impact our results of operations and financial position.

Item 4. CONTROLS AND PROCEDURES

As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer (“CEO”) and our Chief Financial Officer (“CFO”), of the effectiveness of the design and operation of our disclosure controls and procedures, or “disclosure controls,” as defined in the Exchange Act Rule 13a-15(e). Disclosure controls are controls and procedures designed to reasonably ensure that information required to be disclosed in our reports filed under the Exchange Act, such as this Quarterly Report, is recorded, processed, summarized, and reported within the periods specified in the SEC’s rules and forms. Disclosure controls include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to our management, including our CEO and CFO, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure. Our disclosure controls include some, but not all, components of our internal control over financial reporting. Based upon that evaluation, our CEO and CFO concluded that our disclosure controls and procedures were effective as of June 30, 2023.

CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING

There have not been any changes in our internal control over financial reporting during the quarter ended June 30, 2023, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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LIMITATIONS AND EFFECTIVENESS OF CONTROLS

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

PART II. OTHER INFORMATION

Item 1. LEGAL PROCEEDINGS

Please refer to Note 9, “Commitment and Contingencies” to the accompanying Consolidated Financial Statements included in “Part I, Item 1. Financial Statements”.

Item 1A. RISK FACTORS

There has not been any material change in the risk factors disclosed in “Part I, Item 1A. Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended March 31, 2023.

Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

The following table provides information regarding our purchases of common stock during the three months ended June 30, 2023.

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 of shares that may yet be purchased under the plans or programs (2)
April 1, 2023 through April 30, 2023		40,180	$	48.14		40,180		957,320
May 1, 2023 through May 31, 2023		47,685	$	44.43		47,685		909,635
June 1, 2023 through June 30, 2023		59,621	$	55.64		5,676		994,324
Total		147,486				93,541

(1) All shares were acquired in open-market purchases, except for 53,945 shares, which were repurchased in June 2023 to satisfy tax withholding obligations that arose due to the vesting of shares of restricted stock.

(2) The amounts presented in this column are the remaining number of shares that may be repurchased after repurchases during the month. As of May 27, 2023, the authorization under the then-existing share repurchase plan expired. On March 22, 2023, 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, 2023.

The timing and expiration date of the current stock repurchase authorizations are included in Note 11, “Stockholders’ Equity” to our unaudited consolidated financial statements included elsewhere in this report.

Item 3. DEFAULTS UPON SENIOR SECURITIES

Not Applicable.

Item 4. MINE SAFETY DISCLOSURES

Not Applicable.

45

Item 5. OTHER INFORMATION

Insider Trading Arrangements and Policies

During the three months ended June 30, 2023, no director or officer of ePlus inc. adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.

Item 6. EXHIBITS

Exhibit Number	Exhibit Description
3.1	ePlus inc. Amended and Restated Certificate of Incorporation, as last amended November 9, 2021 (Incorporated herein by reference to Exhibit 3.1 to our Annual Report on Form 10-K for the period ended March 31, 2023).
3.2	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)
10.1	Form of Restricted Stock Award Agreement (for awards granted to U.S. employees under and subject to the provisions of the ePlus inc. 2021 Employee Long-Term Incentive Plan)
10.2	Form of Restricted Stock Award Agreement (for awards granted to U.K. employees under and subject to the provisions of the ePlus inc. 2021 Employee Long-Term Incentive Plan)
10.3	Form of Stock Agreement (for awards granted to non-employee directors under and subject to the provisions of the ePlus inc. 2017 Non-Employee Director Long-Term Incentive Plan)
31.1	Certification of the Chief Executive Officer of ePlus inc. pursuant to the Securities Exchange Act Rules 13a-14(a) and 15d-14(a).
31.2	Certification of the Chief Financial Officer of ePlus inc. pursuant to the Securities Exchange Act Rules 13a-14(a) and 15d-14(a).
32	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)

46

SIGNATURES

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

	ePlus inc.
Date:  August 7, 2023	/s/ MARK P. MARRON
	By: Mark P. Marron
	Chief Executive Officer and
	President
	(Principal Executive Officer)
Date:  August 7, 2023	/s/ ELAINE D. MARION
	By: Elaine D. Marion
	Chief Financial Officer
	(Principal Financial Officer)

47

EX-10.1

Exhibit 10.1

ePlus inc.

Restricted Stock Award Agreement

1. Restricted Stock Award – Terms and Conditions.  This Agreement confirms the grant under and subject to the provisions of the ePlus inc. 2021 EmployeeLong-Term Incentive Plan (the “Plan”) and the terms and conditions set forth herein (“Terms and Conditions”) to the above-named Participant of the number of a Restricted Stock award of such number of shares of common stock, $0.01 par value per share (the “Common Stock”), of the Company as set forth above. The Restricted stock is granted to Participant in consideration of the services to be rendered by Participant to the Company or its subsidiaries.  This Agreement merely evidences such grant, and does not constitute property of any nature or type or confer any additional rights. This grant is subject in all respects to the applicable terms of the Plan. A copy of the Plan (or related Prospectus delivered to you with this Agreement) may be obtained at no cost by contacting the HR Department at hr@eplus.com.

2. Restriction Period.  For purposes of this Agreement, the Restriction Period is the period beginning on the grant date and ending on vesting date(s) or, if earlier, upon termination of employment as the result of Participant’s death or Disability or upon a Change in Control, as defined in the Plan, provided Participant is in employment with the Company on the date of the Change in Control (the “Restriction Period”).  Upon termination of Participant’s employment for any other reason prior to the date that Participant becomes 100% vested in the Award, the unvested Shares shall be forfeited immediately and Participant shall have no right with respect to the unvested Shares.  No additional Shares shall vest after the date of termination of Participant’s employment.

3. Restrictions and Forfeiture. The Restricted Stock is granted to the Participant subject to the prohibitions on transfer set forth in Section 6 below, which shall lapse, if at all, upon the expiration of the Restriction Period as described in Section 7 below.

4. Rights During Restriction Period. During the Restriction Period, the Participant shall be the record owner of the Restricted Stock and may exercise full voting rights with respect to all Common Stock subject to the award.  The Restricted Stock shall accrue dividends that will be credited in the form of cash or securities, as applicable, to the Participant’s account, on the date the dividend is issued. At the end of the Restriction Period, all credited cash dividends or securities, as applicable, will be distributed to the Participant. If the number of outstanding shares of Common Stock is changed as a result of a stock dividend, stock split or the like, without additional consideration to the Company, the Restricted Stock subject to this award shall be adjusted to correspond to the change in the outstanding shares of the Company’s Common Stock.

5. Release of Award. Provided the award has not previously been forfeited, as soon as reasonably practicable following the expiration of the Restriction Period and the satisfaction of the applicable tax withholding obligations, the Company shall at its option, cause the Restricted Stock to which the Participant is entitled pursuant hereto (i) to be released without restriction on transfer by delivery to the custody of the Participant of a stock certificate in the name of the Participant or his or her designee, or (ii) to be credited without restriction on transfer to a book-entry account for the benefit of the Participant or his or her designee maintained by the Company’s stock administrator, stock transfer agent or its designee.

6. Prohibition Against Transfer.  Until the expiration of the Restriction Period, the award and the Restricted Stock subject to the award and the rights granted under the Terms and Conditions and this Agreement are not transferable except to family members or trusts by will or by the laws of descent and distribution, provided that the award and the Restricted Stock may not be so transferred to family members or trusts except as permitted by applicable law or regulations. Without limiting the generality of the foregoing, except as aforesaid, until the expiration of the Restriction Period, the award and shares of Restricted Stock may not be sold, exchanged, assigned, transferred, pledged, hypothecated, encumbered or otherwise disposed of, shall not be assignable by operation of law, and shall not be subject to execution, attachment, charge, alienation or similar process. Any attempt to effect any of the foregoing shall be wholly ineffective.

1

7. Forfeiture; Termination of Employment.  Shares of Restricted Stock that are included in this award shall be forfeited by the Participant upon the Participant’s termination of employment prior to vesting for any reason other than death or Disability, as defined in the Plan. All shares of Restricted Stock will immediately vest upon a Change in Control, as defined in the Plan, provided Participant is in employment with the Company on the date of the Change in Control.

8. Tax Withholding.  Participant shall be required to meet any applicable tax withholding obligations in accordance with the provisions of the Plan.  The Committee shall be authorized, in its sole discretion, to establish such rules and procedures relating to the use of Shares to satisfy any tax withholding obligations as it deems necessary and appropriate.  Notwithstanding any action the Company takes with respect to any or all income tax, social insurance, payroll tax, or other tax-related withholding, the ultimate liability for all tax-related items is and remains the Participant’s responsibility.

9. Tax Elections.  Participant acknowledges that Participant has considered the advisability of all tax elections in connection with the purchase of the Shares, including the making of an election under Section 83(b) under the Internal Revenue Code of 1986, as amended (“Code”); Participant further acknowledges that the Company has no responsibility for the making of such Section 83(b) election.  In the event Participant determines to make a Section 83(b) election, Participant agrees to timely provide a copy of the election to the Company as required under the Code.

10. Miscellaneous.  These Terms and Conditions and other portions of this Agreement: (a) shall be binding upon and inure to the benefit of any successor of the Company; (b) shall be governed by the laws of the State of Delaware and any applicable laws of the United States; and (c) except as permitted under Sections 7 and 8 of the Plan, may not be amended without the written consent of both the Company and the Participant.

11. No Agreement to Employ.  The Agreement shall not in any way interfere with or limit the right of the Company to terminate the Participant’s employment or service with the Company at any time, and no contract or right of employment shall be implied by the Terms and Conditions and this Agreement of which they form a part.

12. Incorporation of Plan Provisions.  The Terms and Conditions and this Agreement are made pursuant to the Plan, the provisions of which are hereby incorporated by reference (including without limitation, Section 6(g)(xii) of the Plan, such that the Participant may be subject to the forfeiture of the unvested portion of this Restricted Stock award and must return any vested shares already delivered pursuant to this Agreement in certain circumstances described in that section).  Capitalized terms not otherwise defined herein shall have the meanings set forth for such terms in the Plan.  In the event of a conflict between the terms of the Terms and Conditions and this Agreement, and the Plan, the terms of Plan shall govern.

13. Adjustment of Award.  In the event it is determined that the grant, vesting or Common Stock delivery or cash payment under an award of Restricted Stock was made based on incorrect financial results, the Compensation Committee of the Board of Directors will review such grant, vesting, delivery or payment.  If the amount of the grant, vesting, delivery or payment would have been lower had the level of achievement of applicable financial performance goals been calculated based on the correct financial results, the Compensation Committee may, in its sole discretion, adjust (i.e., lower) the amount of such grant, vesting, delivery or payment so that it reflects the amount that would have applied based on the correct financial results and, to the extent permitted by applicable law, require the reimbursement by the Participant of any amount delivered or paid to or received by the Participant with respect to such award. Additionally, Common Stock deliveries or cash payments under this Agreement are subject to recovery by the Company to the extent required by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 and the Sarbanes-Oxley Act of 2002 and any regulations promulgated thereunder.

2

14. Parachute Payments.  In the event that any payment or benefit received or to be received by the Participant under this Agreement or any other award under the Plan in connection with a Change in Control, as defined in the Plan, (collectively, the “Change in Control Payments”) would (i) constitute (together with other payments or benefits contingent on a Change in Control) a “parachute payment” within the meaning of Section 280G of the Code or any successor provision and (ii) but for this section, be subject to the excise tax imposed by Section 4999 of the Code or any successor provision (the “Excise Tax”), then the Participant shall receive:

(A) the full amount of such Change in Control Payments, or

(B) such lesser amount of such Change in Control Payments, which would result in no portion of such Change in Control Payments being subject to the Excise Tax,

whichever of the foregoing amounts, taking into account the applicable federal, state and local income taxes and the Excise Tax, results in the receipt by the Participant, on an after-tax basis, of the greatest amount of payments or benefits contingent on the Change in Control (including without limitation the Change in Control Payments), notwithstanding that all or some portion of such Change in Control Payments may be taxable under Section 4999 of the Code.

Any determination required under this section shall be made in writing by an independent public accounting firm or other independent third party selected by the Company (the “Accountants”), whose costs shall be paid by the Company and whose determination shall be conclusive and binding upon the Participant and the Company for all purposes.  For purposes of making the calculations required by this section, the Accountants may make reasonable assumptions concerning applicable taxes and may rely on reasonable, good faith interpretations concerning the application of Sections 280G and 4999 of the Code.  The Company and Participant shall furnish to the Accountants such information and documents as the Accountants may reasonably request in order to make a determination under this section.  In the event the Accountants determine the Change in Control Payments are to be reduced under (B) above, such reduction shall first be made as to any such Common Stock payment or benefit under any Plan awards in reverse chronological order of the grant date, then any such cash payment or benefit under any Plan awards in reverse chronological order of the grant date.

15. Committee Authority.  The Committee will have the power to interpret the Plan and this Award Agreement and to adopt such rules for the administration, interpretation and application of the Plan as are consistent therewith and to interpret or revoke any such rules (including, but not limited to, the determination of whether or not any Shares of Restricted Stock have vested). Any dispute regarding the interpretation of this Agreement or the Plan shall be submitted by the Participant or the Company to the Committee for review.  All actions taken and all interpretations and determinations made by the Committee in good faith will be final and binding upon Participant, the Company and all other interested persons.

16. Entire Agreement.  This Agreement and the Plan constitute the entire agreement between the parties with respect to the subject matter hereof and supersede all prior or contemporaneous written or oral agreements and understandings of the parties, either express or implied.

3

EX-10.2

Exhibit 10.2

ePlus inc.

Restricted Stock Award Agreement

1. Restricted Stock Award – Terms and Conditions.  This Agreement confirms the grant under and subject to the provisions of the ePlus inc. 2021 EmployeeLong-Term Incentive Plan (the “Plan”) and the terms and conditions set forth herein (“Terms and Conditions”) to the above-named Participant of the number of a Restricted Stock award of such number of shares of common stock, $0.01 par value per share (the “Common Stock”), of the Company as set forth above. The Restricted Stock is granted to Participant in consideration of the services to be rendered by Participant to the Company or its subsidiaries.  This Agreement merely evidences such grant, and does not constitute property of any nature or type or confer any additional rights. This grant is subject in all respects to the applicable terms of the Plan. A copy of the Plan (or related Prospectus delivered to you with this Agreement) may be obtained at no cost by contacting the HR Department at hr@eplus.com.

2. Restriction Period.  For purposes of this Agreement, the Restriction Period is the period beginning on the grant date and ending on vesting date(s) or, if earlier, upon termination of employment as the result of Participant’s death or Disability or upon a Change in Control, as defined in the Plan, provided Participant is in employment with the Company on the date of the Change in Control (the “Restriction Period”).  Upon termination of Participant’s employment for any other reason prior to the date that Participant becomes 100% vested in the Award, the unvested Shares shall be forfeited immediately and Participant shall have no right with respect to the unvested Shares.  No additional Shares shall vest after the date of termination of Participant’s employment.

3. Restrictions and Forfeiture. The Restricted Stock is granted to the Participant subject to the prohibitions on transfer set forth in Section 6 below, which shall lapse, if at all, upon the expiration of the Restriction Period as described in Section 7 below.

4. Rights During Restriction Period. During the Restriction Period, the Participant shall be the record owner of the Restricted Stock and may exercise full voting rights with respect to all Common Stock subject to the award.  The Restricted Stock shall accrue dividends that will be credited in the form of cash or securities, as applicable, to the Participant’s account, on the date the dividend is issued. At the end of the Restriction Period, all credited cash dividends or securities, as applicable, will be distributed to the Participant. If the number of outstanding shares of Common Stock is changed as a result of a stock dividend, stock split or the like, without additional consideration to the Company, the Restricted Stock subject to this award shall be adjusted to correspond to the change in the outstanding shares of the Company’s Common Stock.

5. Release of Award. Provided the award has not previously been forfeited, as soon as reasonably practicable following the expiration of the Restriction Period and the satisfaction of the applicable tax withholding obligations, the Company shall at its option, cause the Restricted Stock to which the Participant is entitled pursuant hereto (i) to be released without restriction on transfer by delivery to the custody of the Participant of a stock certificate in the name of the Participant or his or her designee, or (ii) to be credited without restriction on transfer to a book-entry account for the benefit of the Participant or his or her designee maintained by the Company’s stock administrator, stock transfer agent or its designee.

6. Prohibition Against Transfer.  Until the expiration of the Restriction Period, the award and the Restricted Stock subject to the award and the rights granted under the Terms and Conditions and this Agreement are not transferable except to family members or trusts by will or by the laws of descent and distribution, provided that the award and the Restricted Stock may not be so transferred to family members or trusts except as permitted by applicable law or regulations. Without limiting the generality of the foregoing, except as aforesaid, until the expiration of the Restriction Period, the award and shares of Restricted Stock may not be sold, exchanged, assigned, transferred, pledged, hypothecated, encumbered or otherwise disposed of, shall not be assignable by operation of law, and shall not be subject to execution, attachment, charge, alienation or similar process. Any attempt to effect any of the foregoing shall be wholly ineffective.

1

7. Forfeiture; Termination of Employment.  Shares of Restricted Stock that are included in this award shall be forfeited by the Participant upon the Participant’s termination of employment prior to vesting for any reason other than death or Disability, as defined in the Plan. All shares of Restricted Stock will immediately vest upon a Change in Control, as defined in the Plan, provided Participant is in employment with the Company on the date of the Change in Control.

8. Tax Withholding.  Participant shall be required to meet any applicable tax withholding obligations in accordance with the provisions of the Plan.  The Committee shall be authorized, in its sole discretion, to establish such rules and procedures relating to the use of Shares to satisfy any tax withholding obligations as it deems necessary and appropriate.  Notwithstanding any action the Company takes with respect to any or all income tax, national insurance contributions including primary class 1 (employee’s) national insurance contributions [and secondary class 1 (employer’s) national insurance contributions] or their equivalent in any jurisdiction, which may lawfully be recovered from the Participant, payroll tax, or other tax-related withholding, the ultimate liability for all tax-related items is and remains the Participant’s responsibility.

9. Tax Elections.  Participant acknowledges that Participant has considered the advisability of all tax elections in connection with the purchase of the Shares, including the making of an election under Section 431(1) of the Income Tax (Earnings & Pensions) Act 2003 in a form prescribed by HM Revenue & Customs pursuant to which the Participant elects to pay income tax (if any) on the amount equal to the difference between the unrestricted market value of the Restricted Stock and the consideration paid for them, and such election be entered into with Participant’s employing company no later than 14 days after the date on which the Participant has acquired Shares of Restricted Stock.

10. Miscellaneous.  These Terms and Conditions and other portions of this Agreement: (a) shall be binding upon and inure to the benefit of any successor of the Company; (b) shall be governed by the laws of the State of Delaware and any applicable laws of the United States; and (c) except as permitted under Sections 7 and 8 of the Plan, may not be amended without the written consent of both the Company and the Participant.

11. No Agreement to Employ.  The Agreement shall not in any way interfere with or limit the right of the Company to terminate the Participant’s employment or service with the Company at any time, and no contract or right of employment shall be implied by the Terms and Conditions and this Agreement of which they form a part.

12. Incorporation of Plan Provisions.  The Terms and Conditions and this Agreement are made pursuant to the Plan, the provisions of which are hereby incorporated by reference (including without limitation, Section 6(g)(xii) of the Plan, such that the Participant may be subject to the forfeiture of the unvested portion of this Restricted Stock award and must return any vested shares already delivered pursuant to this Agreement in certain circumstances described in that section).  Capitalized terms not otherwise defined herein shall have the meanings set forth for such terms in the Plan.  In the event of a conflict between the terms of the Terms and Conditions and this Agreement, and the Plan, the terms of Plan shall govern.

13. Adjustment of Award.  In the event it is determined that the grant, vesting or Common Stock delivery or cash payment under an award of Restricted Stock was made based on incorrect financial results, the Compensation Committee of the Board of Directors will review such grant, vesting, delivery or payment.  If the amount of the grant, vesting, delivery or payment would have been lower had the level of achievement of applicable financial performance goals been calculated based on the correct financial results, the Compensation Committee may, in its sole discretion, adjust (i.e., lower) the amount of such grant, vesting, delivery or payment so that it reflects the amount that would have applied based on the correct financial results and, to the extent permitted by applicable law, require the reimbursement by the Participant of any amount delivered or paid to or received by the Participant with respect to such award. Additionally, Common Stock deliveries or cash payments under this Agreement are subject to recovery by the Company to the extent required by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 and the Sarbanes-Oxley Act of 2002 and any regulations promulgated thereunder.

2

14. Parachute Payments.  In the event that any payment or benefit received or to be received by the Participant under this Agreement or any other award under the Plan in connection with a Change in Control, as defined in the Plan, (collectively, the “Change in Control Payments”) would (i) constitute (together with other payments or benefits contingent on a Change in Control) a “parachute payment” within the meaning of Section 280G of the Code or any successor provision and (ii) but for this section, be subject to the excise tax imposed by Section 4999 of the Code or any successor provision (the “Excise Tax”), then the Participant shall receive:

(A) the full amount of such Change in Control Payments, or

(B) such lesser amount of such Change in Control Payments, which would result in no portion of such Change in Control Payments being subject to the Excise Tax,

whichever of the foregoing amounts, taking into account the applicable federal, state and local income taxes and the Excise Tax, results in the receipt by the Participant, on an after-tax basis, of the greatest amount of payments or benefits contingent on the Change in Control (including without limitation the Change in Control Payments), notwithstanding that all or some portion of such Change in Control Payments may be taxable under Section 4999 of the Code.

Any determination required under this section shall be made in writing by an independent public accounting firm or other independent third party selected by the Company (the “Accountants”), whose costs shall be paid by the Company and whose determination shall be conclusive and binding upon the Participant and the Company for all purposes.  For purposes of making the calculations required by this section, the Accountants may make reasonable assumptions concerning applicable taxes and may rely on reasonable, good faith interpretations concerning the application of Sections 280G and 4999 of the Code.  The Company and Participant shall furnish to the Accountants such information and documents as the Accountants may reasonably request in order to make a determination under this section.  In the event the Accountants determine the Change in Control Payments are to be reduced under (B) above, such reduction shall first be made as to any such Common Stock payment or benefit under any Plan awards in reverse chronological order of the grant date, then any such cash payment or benefit under any Plan awards in reverse chronological order of the grant date.

15. Committee Authority.  The Committee will have the power to interpret the Plan and this Award Agreement and to adopt such rules for the administration, interpretation and application of the Plan as are consistent therewith and to interpret or revoke any such rules (including, but not limited to, the determination of whether or not any Shares of Restricted Stock have vested). Any dispute regarding the interpretation of this Agreement or the Plan shall be submitted by the Participant or the Company to the Committee for review.  All actions taken and all interpretations and determinations made by the Committee in good faith will be final and binding upon Participant, the Company and all other interested persons.

16. Entire Agreement.  This Agreement and the Plan constitute the entire agreement between the parties with respect to the subject matter hereof and supersede all prior or contemporaneous written or oral agreements and understandings of the parties, either express or implied.

3

EX-10.3

Exhibit 10.3

ePlus inc.

Stock Agreement

Recipient:	%%FIRST_NAME%-% %%MIDDLE_NAME%-%%%LAST_NAME%-%
Grant Number:	%%OPTION_NUMBER%-%
Date of Award:	%%OPTION_DATE%-%
Total Number of Shares:	%%TOTAL_SHARES_GRANTED%-%

1. Stock – Terms and Conditions.  This Agreement confirms the issuance under and subject to the provisions of the ePlus inc. 2017 Non-Employee Director Long-Term Incentive Plan (the “Plan”) and the terms and conditions set forth herein (“Terms and Conditions”) to the above-named participant of Stock in lieu of cash compensation of such number of shares of common stock, $0.01 par value per share (the “Common Stock”), of the Company as set forth above. This Agreement merely evidences such issuance of Stock, and does not constitute property of any nature or type or confer any additional rights. This issuance is subject in all respects to the applicable terms of the Plan. A copy of the Plan (or related Prospectus delivered to you with this Agreement) may be obtained at no cost by contacting the Corporate Secretary at 13595 Dulles Technology Drive, Herndon, Virginia 20171.

2. Restriction Period.  This Agreement reflects shares issued pursuant to the Recipient’s Stock Fee Election pursuant to Section 7(c) of the Plan. As more fully described in the Plan, the Shares are not subject to any Restriction Period.

3. Restrictions and Forfeiture. The Stock shall not be subject to restrictions or forfeiture.

4. Release of Stock. As soon as reasonably practicable following the issuance of the Stock,  the Company shall at its option, cause the Stock to which the participant is entitled pursuant hereto (i) to be released without restriction on transfer by delivery to the custody of the participant of a stock certificate in the name of the participant or his or her designee, or (ii) to be credited without restriction on transfer to a book-entry account for the benefit of the participant or his or her designee maintained by the Company’s stock transfer agent or its designee.

5. Taxes.  Recipient acknowledges that he or she will incur a tax liability for the year in which the Stock is received. The number of shares shall be determined by dividing the cash compensation deferred for a calendar quarter of service by the Fair Market Value on the date of grant (determined without regard to the restrictions applicable thereto) and the first trading day of the following calendar quarter shall be considered the grant date of the Restricted Stock Award.

6. Miscellaneous.  These Terms and Conditions and other portions of this Agreement: (a) shall be binding upon and inure to the benefit of any successor of the Company; (b) shall be governed by the laws of the State of Delaware and any applicable laws of the United States; and (c) except as permitted under Sections 9 and 11 of the Plan, may not be amended without the written consent of both the Company and Recipient. The issuance of the Stock shall not constitute or be evidence of any agreement or understanding, express or implied, that the Company will retain the director for any period of time, or at any particular rate of compensation.

7. Incorporation of Plan Provisions.  The Terms and Conditions and this Agreement are made pursuant to the Plan, the provisions of which are hereby incorporated by reference.  Capitalized terms not otherwise defined herein shall have the meanings set forth for such terms in the Plan.  In the event of a conflict between the terms of the Terms and Conditions and this Agreement, and the Plan, the terms of Plan shall govern, it being understood and mutually agreed that the Stock is not subject to forfeiture.

Quarterly Stock Agreement, for stock issued in lieu of cash pursuant to Section 7(c) of the

2017 Non-Employee Director LTIP.  Revised and approved by the Compensation Committee

On May 3, 2022, for awards granted on or after July 1, 2022_updated per NP for Oct 1, 2022.

8. Parachute Payments.  In the event that any payment or benefit received or to be received by the participant under this Agreement or any other award under the Plan in connection with a Change in Control, as defined in the Plan, (collectively, the “Change in Control Payments”) would (i) constitute (together with other payments or benefits contingent on a Change in Control) a “parachute payment” within the meaning of Section 280G of the Code or any successor provision and (ii) but for this section, be subject to the excise tax imposed by Section 4999 of the Code or any successor provision (the “Excise Tax”), then the participant shall receive:

(A) the full amount of such Change in Control Payments, or

(B) such lesser amount of such Change in Control Payments, which would result in no portion of such Change in Control Payments being subject to the Excise Tax,

whichever of the foregoing amounts, taking into account the applicable federal, state and local income taxes and the Excise Tax, results in the receipt by the participant, on an after-tax basis, of the greatest amount of payments or benefits contingent on the Change in Control (including without limitation the Change in Control Payments), notwithstanding that all or some portion of such Change in Control Payments may be taxable under Section 4999 of the Code.

Any determination required under this section shall be made in writing by an independent public accounting firm or other independent third party selected by the Company (the “Accountants”), whose costs shall be paid by the Company and whose determination shall be conclusive and binding upon the participant and the Company for all purposes.  For purposes of making the calculations required by this section, the Accountants may make reasonable assumptions concerning applicable taxes and may rely on reasonable, good faith interpretations concerning the application of Sections 280G and 4999 of the Code.  The Company and participant shall furnish to the Accountants such information and documents as the Accountants may reasonably request in order to make a determination under this section.  In the event the Accountants determine the Change in Control Payments are to be reduced under (B) above, such reduction shall first be made as to any such Common Stock payment or benefit under any Plan awards in reverse chronological order of the grant date, then any such cash payment or benefit under any Plan awards in reverse chronological order of the grant date.

EX-31.1

Exhibit 31.1

 CERTIFICATION

I, Mark P. Marron, certify that:

1. I have reviewed this quarterly report on Form 10-Q of ePlus inc.;

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

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

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

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

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

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

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

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

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

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

Date:  August 7, 2023

/s/ MARK P. MARRON

Mark P. Marron

Chief Executive Officer and President

(Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Elaine D. Marion, certify that:

1. I have reviewed this quarterly report on Form 10-Q of ePlus inc.;

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

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

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

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

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

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

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

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

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

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

Date:  August 7, 2023

/s/ ELAINE D. MARION

Elaine D. Marion

Chief Financial Officer

(Principal Financial Officer)

EX-32

Exhibit 32

CERTIFICATION

PURSUANT TO 18 USC. SECTION 1350

AS ADOPTED PURSUANT TO SECTION 906 OF THE

SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of ePlus inc. on Form 10-Q for the quarter ended June 30, 2023, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned hereby certify, pursuant to 18 USC. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that to the undersigned’s best knowledge and belief:

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

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

Date:  August 7, 2023

/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)

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

XML

Document and Entity Information - shares	3 Months Ended
	Jun. 30, 2023	Aug. 02, 2023
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Quarterly Report	true
Document Period End Date	Jun. 30, 2023
Current Fiscal Year End Date	--03-31
Document Fiscal Year Focus	2024
Document Fiscal Period Focus	Q1
Document Transition Report	false
Entity File Number	1-34167
Entity Registrant Name	ePlus inc.
Entity Central Index Key	0001022408
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	54-1817218
Entity Address, Address Line One	13595 Dulles Technology Drive
Entity Address, City or Town	Herndon
Entity Address, State or Province	VA
Entity Address, Postal Zip Code	20171-3413
City Area Code	703
Local Phone Number	984-8400
Title of 12(b) Security	Common Stock, $.01 par value
Trading Symbol	PLUS
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		26,937,903

XML

UNAUDITED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Jun. 30, 2023	Mar. 31, 2023
Current assets:
Cash and cash equivalents	$ 101,574	$ 103,093
Accounts receivable-trade, net	677,988	504,122
Accounts receivable-other, net	78,637	55,508
Inventories	244,331	243,286
Financing receivables-net, current	81,111	89,829
Deferred costs	45,408	44,191
Other current assets	47,084	55,101
Total current assets	1,276,133	1,095,130
Financing receivables and operating leases-net	120,664	84,417
Deferred tax asset	3,682	3,682
Property, equipment, and other assets	70,794	70,447
Goodwill	158,280	136,105
Other intangible assets-net	51,253	25,045
TOTAL ASSETS	1,680,806	1,414,826
Current liabilities:
Accounts payable	351,384	220,159
Accounts payable-floor plan	182,859	134,615
Salaries and commissions payable	41,144	37,336
Deferred revenue	118,976	114,028
Other current liabilities	30,566	24,372
Total current liabilities	800,786	561,326
Non-recourse notes payable - long-term	5,005	9,522
Deferred tax liability	717	715
Other liabilities	61,007	60,998
TOTAL LIABILITIES	867,515	632,561
COMMITMENTS AND CONTINGENCIES (Note 9)
STOCKHOLDERS' EQUITY
Preferred stock, $0.01 per share par value; 2,000 shares authorized; none outstanding	0	0
Common stock, $0.01 per share par value; 50,000 shares authorized; 26,947 outstanding at June 30, 2023 and 26,905 outstanding at March 31, 2023	274	272
Additional paid-in capital	170,904	167,303
Treasury stock, at cost, 408 shares at June 30, 2023 and 261 shares at March 31, 2023	(21,451)	(14,080)
Retained earnings	661,049	627,202
Accumulated other comprehensive income-foreign currency translation adjustment	2,515	1,568
Total Stockholders' Equity	813,291	782,265
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	1,680,806	1,414,826
Recourse [Member]
Current liabilities:
Notes payable-current	58,115	5,997
Non-recourse [Member]
Current liabilities:
Notes payable-current	$ 17,742	$ 24,819

XML

UNAUDITED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares shares in Thousands	Jun. 30, 2023	Mar. 31, 2023
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)	26,947	26,905
Treasury stock, shares (in shares)	408	261

XML

UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Net sales
Total	$ 574,175	$ 458,359
Cost of sales
Total	431,902	344,836
Gross profit	142,273	113,523
Selling, general, and administrative	90,298	76,767
Depreciation and amortization	4,792	3,210
Interest and financing costs	851	363
Operating expenses	95,941	80,340
Operating income	46,332	33,183
Other income (expense), net	190	(2,153)
Earnings before tax	46,522	31,030
Provision for income taxes	12,675	8,691
Net earnings	$ 33,847	$ 22,339
Net earnings per common share-basic (in dollars per share)	$ 1.27	$ 0.84
Net earnings per common share-diluted (in dollars per share)	$ 1.27	$ 0.84
Weighted average common shares outstanding-basic (in shares)	26,552	26,513
Weighted average common shares outstanding-diluted (in shares)	26,648	26,685
Product [Member]
Net sales
Total	$ 506,656	$ 395,250
Cost of sales
Total	388,904	304,210
Services [Member]
Net sales
Total	67,519	63,109
Cost of sales
Total	$ 42,998	$ 40,626

XML

UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands	3 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME [Abstract]
NET EARNINGS	$ 33,847	$ 22,339
OTHER COMPREHENSIVE INCOME, NET OF TAX:
Foreign currency translation adjustments	947	(1,339)
Other comprehensive income (loss)	947	(1,339)
TOTAL COMPREHENSIVE INCOME	$ 34,794	$ 21,000

XML

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	3 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Cash flows from operating activities:
Net earnings	$ 33,847	$ 22,339
Adjustments to reconcile net earnings to net cash provided by (used in) operating activities:
Depreciation and amortization	5,755	4,472
Provision for credit losses	478	698
Share-based compensation expense	2,205	1,773
Gain on disposal of property, equipment, and operating lease equipment	(160)	(224)
Changes in:
Accounts receivable	(166,803)	(53,556)
Inventories-net	300	(92,678)
Financing receivables-net	(42,071)	(20,574)
Deferred costs and other assets	8,303	(4,177)
Accounts payable-trade	124,948	30,376
Salaries and commissions payable, deferred revenue, and other liabilities	12,298	8,608
Net cash used in operating activities	(20,900)	(102,943)
Cash flows from investing activities:
Proceeds from sale of property, equipment, and operating lease equipment	196	85
Purchases of property, equipment and operating lease equipment	(3,698)	(1,777)
Cash used in acquisitions, net of cash acquired	(59,595)	0
Net cash used in investing activities	(63,097)	(1,692)
Cash flows from financing activities:
Borrowings of non-recourse and recourse notes payable	97,955	49,256
Repayments of non-recourse and recourse notes payable	(41,573)	(3,645)
Proceeds from issuance of common stock	1,398	0
Repurchase of common stock	(7,465)	(7,224)
Net borrowings (repayments) on floor plan facility	32,290	(7,276)
Net cash provided by financing activities	82,605	31,111
Effect of exchange rate changes on cash	(127)	1,634
Net decrease in cash and cash equivalents	(1,519)	(71,890)
Cash and cash equivalents, beginning of period	103,093	155,378
Cash and cash equivalents, end of period	101,574	83,488
Supplemental disclosures of cash flow information:
Cash paid for interest	566	341
Cash paid for income taxes	3,605	7,532
Cash paid for amounts included in the measurement of lease liabilities	1,261	1,226
Schedule of non-cash investing and financing activities:
Proceeds from sale of property, equipment, and leased equipment	15	183
Purchases of property, equipment, and operating lease equipment	(200)	(63)
Borrowing of non-recourse and recourse notes payable	0	7,267
Vesting of share-based compensation	8,483	9,215
Repurchase of common stock	(28)	0
New operating lease assets obtained in exchange for lease obligations	$ 3,100	$ 34

XML

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, 2022	$ 270	$ 159,480	$ (6,734)	$ 507,846	$ (124)	$ 660,738
Balance (in shares) at Mar. 31, 2022	26,886
Increase (Decrease) in Stockholders' Equity [Roll Forward]
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
Balance at Mar. 31, 2023	$ 272	167,303	(14,080)	627,202	1,568	$ 782,265
Balance (in shares) at Mar. 31, 2023	26,905					26,905
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of restricted stock awards	$ 2	(2)	0	0	0	$ 0
Issuance of restricted stock awards (in shares)	153
Issuance of common stock	$ 0	1,398	0	0	0	1,398
Issuance of common stock (in shares)	36
Share-based compensation	$ 0	2,205	0	0	0	2,205
Share-based compensation (in shares)	0
Repurchase of common stock	$ 0	0	$ (7,371)	0	0	(7,371)
Repurchase of common stock (in shares)			(147)
Net earnings	0	0	$ 0	33,847	0	33,847
Foreign currency translation adjustment	0	0	0	0	947	947
Balance at Jun. 30, 2023	$ 274	$ 170,904	$ (21,451)	$ 661,049	$ 2,515	$ 813,291
Balance (in shares) at Jun. 30, 2023	26,947					26,947

XML

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

3 Months Ended

Jun. 30, 2023

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract]

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

1. 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 IT solutions that enable organizations to optimize their IT environment and supply chain processes. We also provide consulting, professional services, managed services, and complete lifecycle management services including flexible financing solutions. We focus on selling to medium and large enterprises in the United States (“US”) and in select international markets including the United Kingdom (“UK”), the European Union (“EU”), India, Singapore, and Israel.

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. During the quarter ended June 30, 2023, we split our technology segment into new segments-- product, professional services, and managed services-- to provide our management the ability to better manage and allocate resources among the separate components of our technology business. Our professional services and managed services are a significant component of our growth and long-term strategic initiatives. Subsequently, we manage and report our operating results through four operating segments: product, professional services, managed services, and financing. For additional information, see Note 16, “Segment Reporting”.

INTERIM FINANCIAL STATEMENTS — The unaudited consolidated financial statements for the three months ended June 30, 2023, and 2022, 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, 2023, and 2022, are not necessarily indicative of results that may be expected for any other interim period or for the full fiscal year ended March 31, 2024, 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, 2023 (“2023 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 45% of our technology business net sales for the three months ended June 30, 2023, and 35% for the three months ended June 30, 2022.

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, 2023, except for the changes provided in Note 2, “Recent Accounting Pronouncements.”

XML

RECENT ACCOUNTING PRONOUNCEMENTS

3 Months Ended

Jun. 30, 2023

RECENT ACCOUNTING PRONOUNCEMENTS [Abstract]

RECENT ACCOUNTING PRONOUNCEMENTS

2. RECENT ACCOUNTING PRONOUNCEMENTS

RECENTLY ADOPTED ACCOUNTING PRONOUNCEMENTS— In September 2022, the Financial Accounting Standards Board (“FASB”) issued ASU 2022-04, Liabilities—Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations. This update requires buyers in a supplier finance program to disclose certain qualitative and quantitative information about the program. It is intended to provide information about an entity’s use of supplier finance programs and their effect on the entity’s working capital, liquidity, and cash flows. This update is effective for us beginning in the first quarter of our fiscal year ending March 31, 2024, except for a requirement to provide a roll forward of our obligations during the annual period, which is effective for us beginning in the first quarter of our fiscal year ending March 31, 2025. We adopted the standard during the first quarter of fiscal year ending March 31, 2024, as reflected in this Quarterly Report on Form 10-Q, except for the roll forward requirement, which will be adopted during the first quarter of fiscal year ending March 31, 2025. The adoption of the standard resulted in new disclosures only for amounts presented within Accounts payable – floor plan. For additional information on the new disclosures, see Note 8, “Notes Payable and Credit Facility”.

XML

REVENUES

3 Months Ended

Jun. 30, 2023

REVENUES [Abstract]

REVENUES

3. REVENUES

CONTRACT BALANCES

Accounts receivable – trade consists entirely of amounts due from contracts with customers. In addition, we had $58.5 million and $70.4 million of receivables from contracts with customers included within financing receivables as of June 30, 2023, and March 31, 2023, respectively. The following table provides the balance of contract liabilities from contracts with customers (in thousands):

	June 30, 2023		March 31, 2023
Current (included in deferred revenue)	$	118,646	$	113,713
Non-current (included in other liabilities)	$	48,390	$	47,217

Revenue recognized from the beginning contract liability balance was $30.9 million and $24.9 million for the three months ended June 30, 2023, and 2022, 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):

Remainder of the year ending March 31, 2024	$	55,368
Year ending March 31, 2025		34,042
Year ending March 31, 2026		16,872
Year ending March 31, 2027		5,298
Year ending March 31, 2028 and thereafter		2,357
Total remaining performance obligations	$	113,937

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

3 Months Ended

Jun. 30, 2023

FINANCING RECEIVABLES AND OPERATING LEASES [Abstract]

FINANCING RECEIVABLES AND OPERATING LEASES

4. 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. Occasionally, 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, 2023, and 2022 (in thousands):

	Three months Ended June 30,
	2023		2022
Net sales	$	7,623	$	4,983
Cost of sales		7,391		4,067
Gross profit	$	232	$	916

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, 2023, and 2022 (in thousands):

	Three months Ended June 30,
	2023		2022
Interest income on sales-type leases	$	1,362	$	861
Lease income on operating leases	$	2,808	$	4,582

FINANCING RECEIVABLES—NET

The following tables provide a disaggregation of our financing receivables – net (in thousands):

	Notes			Lease			Financing
June 30, 2023	Receivable			Receivables			Receivables
Gross receivables	$	151,336		$	60,660		$	211,996
Unguaranteed residual value (1)		-			8,348			8,348
Unearned income		(14,278	)		(7,925	)		(22,203	)
Allowance for credit losses (2)		(696	)		(936	)		(1,632	)
Total, net	$	136,362		$	60,147		$	196,509
Reported as:
Current	$	49,674		$	31,437		$	81,111
Long-term		86,688			28,710			115,398
Total, net	$	136,362		$	60,147		$	196,509

(1) Includes unguaranteed residual values of $4,488 thousand that we retained after selling the related lease receivable.

(2) Refer to Note 7, “Allowance for Credit Losses” for details.

	Notes			Lease			Financing
March 31, 2023	Receivable			Receivables			Receivables
Gross receivables	$	117,008		$	60,157		$	177,165
Unguaranteed residual value (1)		-			8,161			8,161
Unearned income		(5,950	)		(8,050	)		(14,000	)
Allowance for credit losses (2)		(801	)		(981	)		(1,782	)
Total, net	$	110,257		$	59,287		$	169,544
Reported as:
Current	$	65,738		$	24,091		$	89,829
Long-term		44,519			35,196			79,715
Total, net	$	110,257		$	59,287		$	169,544

(1) Includes unguaranteed residual values of $4,222 thousand that we retained after selling the related lease receivable.

(2) Refer to Note 7, “Allowance for Credit Losses” for details.

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):

	June 30,			March 31,
	2023			2023
Cost of equipment under operating leases	$	16,091		$	15,301
Accumulated depreciation		(10,825	)		(10,599	)
Investment in operating lease equipment—net (1)	$	5,266		$	4,702

(1) Amounts include estimated unguaranteed residual values of $1,873 thousand and $1,717 thousand as of June 30, 2023, and March 31, 2023, respectively.

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, 2023, and March 31, 2023, we had financing receivables of $22.0 million and $35.7 million, respectively, and operating leases of $2.1 million and $2.5 million, respectively, which were collateral for non-recourse notes payable. See Note 8, “Notes Payable and Credit Facility.”

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, 2023, and 2022, we recognized net gains of $1.3 million and $1.8 million, respectively, and total proceeds from these sales were $61.4 million and $52.5 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, 2023, and March 31, 2023, 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 in the event that the lessee elects to early terminate the lease. As of June 30, 2023, and March 31, 2023, our total potential liability that could result from these indemnities is immaterial.

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LESSEE ACCOUNTING

3 Months Ended

Jun. 30, 2023

LESSEE ACCOUNTING [Abstract]

LESSEE ACCOUNTING

5. LESSEE ACCOUNTING

We lease office space for periods up to six years and lease warehouse space for periods of up to 10 years, and we have some lease options that can be exercised to extend beyond those lease term limits. 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 $1.5 million and $1.3 million for the three months ended June 30, 2023, and June 30, 2022, respectively.

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GOODWILL AND OTHER INTANGIBLE ASSETS

3 Months Ended

Jun. 30, 2023

GOODWILL AND OTHER INTANGIBLE ASSETS [Abstract]

GOODWILL AND OTHER INTANGIBLE ASSETS

6. 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, 2023 (in thousands):

	Technology Segment			Product			Professional Services			Managed Services			Total
Balance March 31, 2023
Goodwill	$	144,778		$	-			-			-			144,778
Accumulated impairment losses		(8,673	)		-			-			-			(8,673	)
Net carrying amount	$	136,105		$	-		$	-		$	-		$	136,105
Reporting unit change		(136,105	)		106,497			19,712			9,896			-
Acquisitions		-			19,672			2,456			-			22,128
Impairment losses		-			-			-			-			-
Foreign currency translations		-			37			7			3			47
Balance June 30, 2023
Goodwill	$	-		$	134,879		$	22,175		$	9,899		$	166,953
Accumulated impairment losses		-			(6,787	)		(1,256	)		(630	)		(8,673	)
Net carrying amount	$	-		$	128,092		$	20,919		$	9,269		$	158,280

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. As of March 31, 2023, our entire balance related to our technology segment, which we had also determined to be one reporting unit. During the first quarter ended June 30, 2023, we separated our technology segment into three different reporting units: product, professional services, and managed services. As such, we allocated our goodwill and impairment losses to the reporting units affected using a relative fair value.

The carrying value of goodwill was $158.3 million and $136.1 million as of June 30, 2023, and March 31, 2023, respectively. Our goodwill balance increased by $22.2 million over the three months ended June 30, 2023, due to $22.1 million in goodwill additions from our acquisition of Network Solutions Group (“NSG”), and from foreign currency translations of $0.1 million. Please refer to Note 15, “Business Combinations” for details of our acquisition.

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, 2022, we performed a quantitative assessment of goodwill and concluded that the fair value of our technology reporting unit exceeded its carrying value. Our conclusions would not be impacted by a ten percent change in our estimate of the fair value of the reporting unit.

OTHER INTANGIBLE ASSETS

Our other intangible assets consist of the following on June 30, 2023, and March 31, 2023 (in thousands):

	June 30, 2023							March 31, 2023
	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Purchased intangibles	$	115,463	$	(64,897	)	$	50,566	$	85,449	$	(61,376	)	$	24,073
Capitalized software development		10,516		(9,829	)		687		10,516		(9,544	)		972
Total	$	125,979	$	(74,726	)	$	51,253	$	95,965	$	(70,920	)	$	25,045

Purchased intangibles, consisting mainly of customer relationships, 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 $3.5 million and $2.2 million for the three months ended June 30, 2023, and June 30, 2022, respectively.

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ALLOWANCE FOR CREDIT LOSSES

3 Months Ended

Jun. 30, 2023

ALLOWANCE FOR CREDIT LOSSES [Abstract]

ALLOWANCE FOR CREDIT LOSSES

7. ALLOWANCE FOR CREDIT LOSSES

The following table provides the activity in our allowance for credit losses for the three months ended June 30, 2023, and 2022 (in thousands):

	Accounts Receivable			Notes Receivable			Lease Receivables			Total
Balance April 1, 2023	$	2,572		$	801		$	981		$	4,354
Provision for credit losses		629			(106	)		(45	)		478
Write-offs and other		(13	)		1			-			(12	)
Balance June 30, 2023	$	3,188		$	696		$	936		$	4,820

	Accounts Receivable			Notes Receivable		Lease Receivables		Total
Balance April 1, 2022	$	2,411		$	708	$	681	$	3,800
Provision for credit losses		382			84		232		698
Write-offs and other		(65	)		-		-		(65	)
Balance June 30, 2022	$	2,728		$	792	$	913	$	4,433

We evaluate our customers using an internally assigned credit quality rating “CQR”. The CQR categories of our financing receivables are:

• High CQR: This rating includes accounts with excellent to good business credit, asset quality and capacity to meet financial obligations. Loss rates in this category are generally less than 1%.

• Average CQR: This rating includes accounts with average credit risk that are more susceptible to loss in the event of adverse business or economic conditions. Loss rates in this category are in the range of 1% to 8%.

• 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 greater than 8% and up to 100%.

The following table provides the amortized cost basis of our financing receivables by CQR and by credit origination year as of June 30, 2023 (in thousands):

	Amortized cost basis by origination year ending March 31,
	2024		2023		2022		2021		2020		2019 and prior		Total		Transfers (2)			Net credit exposure
Notes receivable:
High CQR	$	67,836	$	36,270	$	13,539	$	3,428	$	142	$	1	$	121,216	$	(14,619	)	$	106,597
Average CQR		4,871		9,695		1,096		96		58		26		15,842		(2,068	)		13,774
Total	$	72,707	$	45,965	$	14,635	$	3,524	$	200	$	27	$	137,058	$	(16,687	)	$	120,371
Lease receivables:
High CQR	$	7,378	$	16,566	$	3,595	$	1,775	$	432	$	133	$	29,879	$	(1,665	)	$	28,214
Average CQR		6,218		16,547		3,316		572		63		-		26,716		(4,049	)		22,667
Total	$	13,596	$	33,113	$	6,911	$	2,347	$	495	$	133	$	56,595	$	(5,714	)	$	50,881
Total amortized cost (1)	$	86,303	$	79,078	$	21,546	$	5,871	$	695	$	160	$	193,653	$	(22,401	)	$	171,252

(1) Excludes unguaranteed residual values of $4,488 thousand that we retained after selling the related lease receivable.

(2) Transfers consist of receivables that have been transferred to third-party financial institutions on a non-recourse basis.

The following table provides the amortized cost basis of our financing receivables by CQR and by credit origination year as of March 31, 2023 (in thousands):

	Amortized cost basis by origination year ending March 31,
	2023		2022		2021		2020		2019		2018 and prior		Total		Transfers (2)			Net credit exposure
Notes receivable:
High CQR	$	72,155	$	11,378	$	11,267	$	370	$	30	$	-	$	95,200	$	(28,115	)	$	67,085
Average CQR		12,793		2,675		213		115		61		1		15,858		(1,432	)		14,426
Total	$	84,948	$	14,053	$	11,480	$	485	$	91	$	1	$	111,058	$	(29,547	)	$	81,511
Lease receivables:
High CQR	$	21,629	$	3,842	$	1,916	$	565	$	51	$	9	$	28,012	$	(1,437	)	$	26,575
Average CQR		23,796		3,430		770		35		3		-		28,034		(1,594	)		26,440
Total	$	45,425	$	7,272	$	2,686	$	600	$	54	$	9	$	56,046	$	(3,031	)	$	53,015
Total amortized cost (1)	$	130,373	$	21,325	$	14,166	$	1,085	$	145	$	10	$	167,104	$	(32,578	)	$	134,526

(1) Excludes unguaranteed residual values of $4,222 thousand that we retained after selling the related lease receivable.

(2) Transfers consist of receivables that have been transferred to third-party financial institutions on a non-recourse basis and receivables that are in the process of being transferred to third-party financial institutions.

The following table provides an aging analysis of our financing receivables as of June 30, 2023 (in thousands):

	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	$	748	$	113	$	1,093	$	1,954	$	7,750	$	9,704	$	127,354	$	137,058
Lease receivables		250		367		902		1,519		3,771		5,290		51,305		56,595
Total	$	998	$	480	$	1,995	$	3,473	$	11,521	$	14,994	$	178,659	$	193,653

The following table provides an aging analysis of our financing receivables as of March 31, 2023 (in thousands):

	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	$	1,020	$	862	$	473	$	2,355	$	7,703	$	10,058	$	101,000	$	111,058
Lease receivables		1,068		463		864		2,395		5,413		7,808		48,238		56,046
Total	$	2,088	$	1,325	$	1,337	$	4,750	$	13,116	$	17,866	$	149,238	$	167,104

Our financial assets on nonaccrual status were not significant as of June 30, 2023, and March 31, 2023.

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NOTES PAYABLE AND CREDIT FACILITY

3 Months Ended

Jun. 30, 2023

NOTES PAYABLE AND CREDIT FACILITY [Abstract]

CREDIT FACILITY AND NOTES PAYABLE

8. NOTES PAYABLE AND CREDIT FACILITY

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 business through a credit facility with Wells Fargo Commercial Distribution Finance, LLC (“WFCDF”). The WFCDF credit facility (the “WFCDF Credit Facility”) has a floor plan facility and a revolving credit facility.

On October 13, 2021, the Borrowers amended, restated, and replaced in entirety their then-existing credit agreements with WFCDF. On October 31, 2022, the Borrowers entered into the First Amendment to the credit agreement. Under this agreement and its amendment, the credit facility is provided by a syndicate of banks (collectively, the “Lenders”) for which WFCDF acts as administrative agent and consists of a discretionary senior secured floor plan facility in favor of the Borrowers.

On March 10, 2023, the Borrowers entered into a Second Amendment to the credit agreement that amended the credit agreement to increase the maximum aggregate amount of principal available under the floor plan facility to $500.0 million and increase the maximum aggregate amount of principal available under the Revolving Facility to $200.0 million.

Under the accounts payable floor plan facility, we had an outstanding balance of $182.9 million and $134.6 million as of June 30, 2023, and March 31, 2023, respectively. On our balance sheet, our liability under the accounts payable floor plan facility is presented as accounts payable – floor plan.

We use the floor plan to facilitate the purchase of inventory from designated suppliers. The Lenders pay our suppliers and provide us extended payment terms. We pay down the floor plan facility on three specified dates each month, generally 30-60 days from the invoice date. We do not incur any interest or other incremental expenses for the floor plan facility. We are not involved in establishing the terms or conditions of the arrangements between our suppliers and the Lenders.

Under the revolving credit facility, we had $52.0 million outstanding as of June 30, 2023, and no balance outstanding as of March 31, 2023. 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, 2023, and March 31, 2023.

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 Term SOFR Rate plus a Term SOFR Adjustment of 0.10% plus an Applicable Margin of 1.75%.

Our borrowings under the WFCDF Credit Facility are secured by the assets of the Borrowers. Additionally, the WFCDF Credit Facility requires a guaranty of $10.5 million by ePlus inc.

Under the 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, 2023, and March 31, 2023, their available borrowing met the thresholds such that there were no restrictions on their ability to pay dividends.

The WFCDF 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 the WFCDF Credit Facility at any time by providing a written termination notice to the other party no less than 90 days prior to such termination.

The loss of the WFCDF Credit Facility could have a material adverse effect on our future results as we currently rely on this facility and its components for daily working capital and liquidity for our technology business and as an operational function of our accounts payable process.

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, 2023, we had $58.1 million in recourse notes payable consisting of $52.0 million outstanding under our revolving WFCDF Credit Facility, $4.0 million arising from one installment payment arrangement within our technology business, and $2.1 million arising from borrowings that that were collateralized by financial receivables held by our financing segment. As of March 31, 2023, we had $6.0 million in recourse notes payable arising entirely from one installment payment arrangement within our technology business. 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, 2023, and March 31, 2023. The weighted average interest rate for our recourse notes payable in our financing segment was 6.27% as of June 30, 2023.

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, 2023, and March 31, 2023, we had $22.7 million and $34.3 million, respectively, of non-recourse borrowings that were collateralized by investments in notes and leases. Principal and interest payments are generally due periodically 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 5.22% and 5.01%, as of June 30, 2023, and March 31, 2023, respectively.

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COMMITMENTS AND CONTINGENCIES

3 Months Ended

Jun. 30, 2023

COMMITMENTS AND CONTINGENCIES [Abstract]

COMMITMENTS AND CONTINGENCIES

9. 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 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 our expectations, our financial condition and operating results for that period may be adversely affected. As of June 30, 2023, 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 us in the future, and these matters could relate to prior, current, or future transactions or events.

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EARNINGS PER SHARE

3 Months Ended

Jun. 30, 2023

EARNINGS PER SHARE [Abstract]

EARNINGS PER SHARE

10. 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, 2023, and 2022, respectively (in thousands, except per share data).

	Three Months Ended June 30,
	2023		2022
Net earnings attributable to common shareholders - basic and diluted	$	33,847	$	22,339
Basic and diluted common shares outstanding:
Weighted average common shares outstanding — basic		26,552		26,513
Effect of dilutive shares		96		172
Weighted average shares common outstanding — diluted		26,648		26,685
Earnings per common share - basic	$	1.27	$	0.84
Earnings per common share - diluted	$	1.27	$	0.84

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STOCKHOLDERS' EQUITY

3 Months Ended

Jun. 30, 2023

STOCKHOLDERS' EQUITY [Abstract]

STOCKHOLDERS' EQUITY

11. STOCKHOLDERS’ EQUITY

SHARE REPURCHASE PLAN

On March 22, 2023, 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, 2023. 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. 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, 2023, we purchased 93,541 shares of our outstanding common stock at a value of $4.4 million under the share repurchase plan; we also purchased 53,945 shares of common stock at a value of $3.0 million to satisfy tax withholding obligations relating to the vesting of employees’ restricted stock.

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.

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SHARE-BASED COMPENSATION

3 Months Ended

Jun. 30, 2023

SHARE-BASED COMPENSATION [Abstract]

SHARE-BASED COMPENSATION

12. SHARE-BASED COMPENSATION

SHARE-BASED PLANS

As of June 30, 2023, 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, 2023, we granted 862 shares under the 2017 Director LTIP, and 152,865 restricted shares under the 2021 Employee LTIP. 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.

The following table provides a summary of the non-vested restricted shares for the three months ended June 30, 2023:

	Number of Shares			Weighted Average Grant-date Fair Value
Nonvested April 1, 2023		314,860		$	49.57
Granted		153,727		$	55.88
Vested		(152,477	)	$	46.10
Forfeited		(961	)	$	54.89
Nonvested June 30, 2023		315,149		$	54.31

EMPLOYEE STOCK PURCHASE PLAN

On September 15, 2022, our stockholders approved the 2022 Employee Stock Purchase Plan (“ESPP”) through which eligible employees may purchase up to an aggregate of 2.50 million shares of our stock at 6-month intervals at a discount off the lesser of the closing market price on the first or the last trading day of each offering period. Our inaugural offering period under the ESPP was January 1, 2023, to June 30, 2023. During the three months ended June 30, 2023, we issued 36,697 shares at a price of $38.10 per share under the ESPP. As of June 30, 2023, there were 2.46 million shares remaining under the ESPP.

COMPENSATION EXPENSE

The following table provides a summary of our total share-based compensation expense, including for restricted stock awards and our ESPP, and the related income tax benefit for the three months ended June 30, 2023, and 2022 (in thousands):

	Three Months Ended June 30,
	2023			2022
Equity-based compensation expense	$	2,205		$	1,773
Income tax benefit		(600	)		(496	)

We recognized the income tax benefit as a reduction to our provision for income taxes. As of June 30, 2023, the total unrecognized compensation expense related to non-vested restricted stock was $16.2 million, which is expected to be recognized over a weighted-average period of 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, 2023, and 2022, was $1.4 million and $1.1 million, respectively.

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INCOME TAXES

3 Months Ended

Jun. 30, 2023

INCOME TAXES [Abstract]

INCOME TAXES

13. INCOME TAXES

Our provision for income tax expense was $12.7 million for the three months ended June 30, 2023, as compared to $8.7 million  for the same period in the prior year. Our effective income tax rate for the three months ended June 30, 2023, was 27.2%, compared to 28.0% for the same period in the prior year, primarily due to a lower state effective tax rate. The effective tax rate for the three months ended June 30, 2023, and June 30, 2022, differed from the US federal statutory rate of 21.0% primarily due to state and local income taxes.

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FAIR VALUE OF FINANCIAL INSTRUMENTS

3 Months Ended

Jun. 30, 2023

FAIR VALUE OF FINANCIAL INSTRUMENTS [Abstract]

FAIR VALUE OF FINANCIAL INSTRUMENTS

14. FAIR VALUE OF FINANCIAL INSTRUMENTS

The following table summarizes the fair value hierarchy of our financial instruments as of June 30, 2023, and March 31, 2023 (in thousands):

			Fair Value Measurement Using
	Recorded Amount		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
June 30, 2023
Assets:
Money market funds	$	22,225	$	22,225	$	-	$	-
March 31, 2023
Assets:
Money market funds	$	8,880	$	8,880	$	-	$	-

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BUSINESS COMBINATIONS

3 Months Ended

Jun. 30, 2023

BUSINESS COMBINATIONS [Abstract]

BUSINESS COMBINATIONS

15. BUSINESS COMBINATIONS

NETWORK SOLUTIONS GROUP (NSG)

On April 30, 2023, our subsidiary, ePlus Technology, inc., acquired certain assets and liabilities of NSG, formerly a business unit of CCI Systems, Inc., a Michigan-based provider of networking services and solutions. This acquisition will help drive additional growth for us in the service provider end-markets with enhanced engineering, sales, and services delivery capabilities specific to the industry.

Our preliminary sum for consideration transferred is $48.6 million consisting of $59.6 million paid in cash at closing minus $11.0 million that is due to us from the sellers based on adjustments to our determination of the total net assets delivered. Our preliminary allocation of the purchase consideration to the assets acquired and liabilities assumed is presented below (in thousands):

	Acquisition Date Amount
Accounts receivable	$	20,419
Other assets		1,940
Identified intangible assets		29,960
Accounts payable and other liabilities		(24,758	)
Contract liabilities		(1,086	)
Total identifiable net assets		26,475
Goodwill		22,128
Total purchase consideration	$	48,603

The identified intangible assets of $30.0 million consists of customer relationships with an estimated useful life of seven years. The fair value of acquired receivables equals the gross contractual amounts receivable. We expect to collect all acquired receivables.

We recognized goodwill related to this transaction of $22.1 million, of which $19.7 million and $2.4 million were assigned to our product and professional services reporting units, respectively. The goodwill recognized in the acquisition is attributable to the acquired assembled workforce and expected synergies, none of which qualify for recognition as a separate intangible asset. The total amount of goodwill is expected to be deductible for tax purposes.

The amount of revenues and earnings of the acquiree since the acquisition date are not material. Likewise, the impact to the revenue and earnings of the combined entity for the current reporting period as though the acquisition date had been April 1, 2023, is not material.

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SEGMENT REPORTING

3 Months Ended

Jun. 30, 2023

SEGMENT REPORTING [Abstract]

SEGMENT REPORTING

16. SEGMENT REPORTING

Prior to the start of the fiscal year ending March 31, 2024, we had two segments: technology and financing. During the quarter ended June 30, 2023, we split our technology segment into new segments-- product, professional services, and managed services-- to provide our management the ability to better manage and allocate resources among the separate components of our technology business. Our professional services and managed services are a significant component of our growth and long-term strategic initiatives. Subsequently, we manage and report our operating results through four operating segments: product, professional services, managed services, and financing. Our product segment includes sales of IT products, third-party software, and third-party maintenance, software assurance, and other third-party services. Our professional services segment includes our advanced professional services, staff augmentation, project management services, cloud consulting services and security services. Our managed services segment includes our advanced managed services, service desk, storage-as-a-service, cloud hosted services, cloud managed services and managed security services. 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 within our technology business based on gross profit, while we measure our financing segment based on operating income. We do not present asset information for our reportable segments as we do not provide asset information to our chief operating decision maker (“CODM”).

The following table provides reportable segment information for the three-month periods ended June 30, 2023, and 2022 (in thousands):

	Three Months Ended June 30,
	2023		2022
Net Sales
Product	$	498,166	$	385,676
Professional Services		35,556		37,168
Managed Services		31,963		25,941
Financing		8,490		9,574
Total		574,175		458,359
Gross Profit
Product		111,391		83,168
Professional Services		14,724		15,055
Managed Services		9,797		7,428
Financing		6,361		7,872
Total		142,273		113,523
Operating income
Technology Business		43,498		29,219
Financing		2,834		3,964
Total		46,332		33,183
Other income (expense), net		190		(2,153	)
Earnings before tax	$	46,522	$	31,030
Depreciation and amortization
Technology Business	$	4,764	$	3,182
Financing		28		28
Total	$	4,792	$	3,210
Interest and financing costs
Technology Business	$	550	$	138
Financing		301		225
Total	$	851	$	363
Selected Financial Data - Statement of Cash Flow
Purchases of property, equipment and operating lease equipment Technology Business	$	2,785	$	1,286
Financing		913		491
Total	$	3,698	$	1,777

The following table provides a disaggregation of net sales by source and further disaggregates our revenue recognized from contracts with customers by timing and our position as principal or agent for the three-month period ended June 30, 2023 (in thousands):

	Three months ended June 30, 2023
	Product		Professional Services		Managed Services		Financing		Total
Net Sales
Contracts with customers	$	490,543	$	35,556	$	31,963	$	1,290	$	559,352
Financing and other		7,623		-		-		7,200		14,823
Total	$	498,166	$	35,556	$	31,963	$	8,490	$	574,175
Timing and position as principal or agent
Transferred at a point in time as principal	$	452,382	$	-	$	-	$	1,290	$	453,672
Transferred at a point in time as agent		38,161		-		-		-		38,161
Transferred over time as principal		-		35,556		31,963		-		67,519
Total revenue from contracts with customers	$	490,543	$	35,556	$	31,963	$	1,290	$	559,352

The following table provides a disaggregation of net sales by source and further disaggregates our revenue recognized from contracts with customers by timing and our position as principal or agent for the three-month period ended June 30, 2022 (in thousands):

	Three months ended June 30, 2022
	Product		Professional Services		Managed Services		Financing		Total
Net Sales
Contracts with customers	$	380,693	$	37,168	$	25,941	$	945	$	444,747
Financing and other		4,983		-		-		8,629		13,612
Total	$	385,676	$	37,168	$	25,941	$	9,574	$	458,359
Timing and position as principal or agent
Transferred at a point in time as principal	$	335,714	$	-	$	-	$	945	$	336,659
Transferred at a point in time as agent		44,979		-		-		-		44,979
Transferred over time as principal		-		37,168		25,941		-		63,109
Total revenue from contracts with customers	$	380,693	$	37,168	$	25,941	$	945	$	444,747

TECHNOLOGY BUSINESS DISAGGREGATION OF REVENUE

The following table provides a disaggregation of our revenue from contracts with customers for our technology business by customer end market and by type (in thousands):

	Three Months Ended June 30,
	2023			2022
Customer end market:
Telecom, media & entertainment	$	141,335		$	128,277
SLED		109,405			64,602
Healthcare		86,656			68,512
Technology		73,403			69,862
Financial services		65,690			33,299
All others		89,196			84,233
Net sales		565,685			448,785
Less: revenue from financing and other		(7,623	)		(4,983	)
Total revenue from contracts with customers	$	558,062		$	443,802
Type:
Product
Networking	$	245,188		$	142,641
Cloud		172,044			164,733
Security		45,796			47,995
Collaboration		12,956			12,980
Other		22,182			17,327
Total product		498,166			385,676
Professional services		35,556			37,168
Managed services		31,963			25,941
Net sales		565,685			448,785
Less: revenue from financing and other		(7,623	)		(4,983	)
Total revenue from contracts with customers	$	558,062		$	443,802

We do not disaggregate sales by customer end market beyond the technology business level.

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 our revenues from contracts with customers within our financing segment is from the sales of off-lease equipment.

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Insider Trading Arrangements	3 Months Ended
	Jun. 30, 2023
Trading Arrangements, by Individual
Rule 10b5-1 Arrangement Adopted	false
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false

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ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

3 Months Ended

Jun. 30, 2023

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. During the quarter ended June 30, 2023, we split our technology segment into new segments-- product, professional services, and managed services-- to provide our management the ability to better manage and allocate resources among the separate components of our technology business. Our professional services and managed services are a significant component of our growth and long-term strategic initiatives. Subsequently, we manage and report our operating results through four operating segments: product, professional services, managed services, and financing. For additional information, see Note 16, “Segment Reporting”.

INTERIM FINANCIAL STATEMENTS

INTERIM FINANCIAL STATEMENTS — The unaudited consolidated financial statements for the three months ended June 30, 2023, and 2022, 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, 2023, and 2022, are not necessarily indicative of results that may be expected for any other interim period or for the full fiscal year ended March 31, 2024, 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, 2023 (“2023 Annual Report”), which should be read in conjunction with these interim consolidated financial statements.

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.

CONCENTRATIONS OF RISK

CONCENTRATIONS OF RISK — A substantial portion of our sales are products from Cisco Systems, which were 45% of our technology business net sales for the three months ended June 30, 2023, and 35% for the three months ended June 30, 2022.

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RECENT ACCOUNTING PRONOUNCEMENTS (Policies)

3 Months Ended

Jun. 30, 2023

RECENT ACCOUNTING PRONOUNCEMENTS [Abstract]

Recent Accounting Pronouncements

RECENTLY ADOPTED ACCOUNTING PRONOUNCEMENTS— In September 2022, the Financial Accounting Standards Board (“FASB”) issued ASU 2022-04, Liabilities—Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations. This update requires buyers in a supplier finance program to disclose certain qualitative and quantitative information about the program. It is intended to provide information about an entity’s use of supplier finance programs and their effect on the entity’s working capital, liquidity, and cash flows. This update is effective for us beginning in the first quarter of our fiscal year ending March 31, 2024, except for a requirement to provide a roll forward of our obligations during the annual period, which is effective for us beginning in the first quarter of our fiscal year ending March 31, 2025. We adopted the standard during the first quarter of fiscal year ending March 31, 2024, as reflected in this Quarterly Report on Form 10-Q, except for the roll forward requirement, which will be adopted during the first quarter of fiscal year ending March 31, 2025. The adoption of the standard resulted in new disclosures only for amounts presented within Accounts payable – floor plan. For additional information on the new disclosures, see Note 8, “Notes Payable and Credit Facility”.

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REVENUES (Tables)

3 Months Ended

Jun. 30, 2023

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 $58.5 million and $70.4 million of receivables from contracts with customers included within financing receivables as of June 30, 2023, and March 31, 2023, respectively. The following table provides the balance of contract liabilities from contracts with customers (in thousands):

	June 30, 2023		March 31, 2023
Current (included in deferred revenue)	$	118,646	$	113,713
Non-current (included in other liabilities)	$	48,390	$	47,217

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):

Remainder of the year ending March 31, 2024	$	55,368
Year ending March 31, 2025		34,042
Year ending March 31, 2026		16,872
Year ending March 31, 2027		5,298
Year ending March 31, 2028 and thereafter		2,357
Total remaining performance obligations	$	113,937

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FINANCING RECEIVABLES AND OPERATING LEASES (Tables)

3 Months Ended

Jun. 30, 2023

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, 2023, and 2022 (in thousands):

	Three months Ended June 30,
	2023		2022
Net sales	$	7,623	$	4,983
Cost of sales		7,391		4,067
Gross profit	$	232	$	916

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, 2023, and 2022 (in thousands):

	Three months Ended June 30,
	2023		2022
Interest income on sales-type leases	$	1,362	$	861
Lease income on operating leases	$	2,808	$	4,582

Notes Receivable Net and Investments in Leases

The following tables provide a disaggregation of our financing receivables – net (in thousands):

	Notes			Lease			Financing
June 30, 2023	Receivable			Receivables			Receivables
Gross receivables	$	151,336		$	60,660		$	211,996
Unguaranteed residual value (1)		-			8,348			8,348
Unearned income		(14,278	)		(7,925	)		(22,203	)
Allowance for credit losses (2)		(696	)		(936	)		(1,632	)
Total, net	$	136,362		$	60,147		$	196,509
Reported as:
Current	$	49,674		$	31,437		$	81,111
Long-term		86,688			28,710			115,398
Total, net	$	136,362		$	60,147		$	196,509

(1) Includes unguaranteed residual values of $4,488 thousand that we retained after selling the related lease receivable.

(2) Refer to Note 7, “Allowance for Credit Losses” for details.

	Notes			Lease			Financing
March 31, 2023	Receivable			Receivables			Receivables
Gross receivables	$	117,008		$	60,157		$	177,165
Unguaranteed residual value (1)		-			8,161			8,161
Unearned income		(5,950	)		(8,050	)		(14,000	)
Allowance for credit losses (2)		(801	)		(981	)		(1,782	)
Total, net	$	110,257		$	59,287		$	169,544
Reported as:
Current	$	65,738		$	24,091		$	89,829
Long-term		44,519			35,196			79,715
Total, net	$	110,257		$	59,287		$	169,544

(1) Includes unguaranteed residual values of $4,222 thousand that we retained after selling the related lease receivable.

(2) Refer to Note 7, “Allowance for Credit Losses” for details.

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):

	June 30,			March 31,
	2023			2023
Cost of equipment under operating leases	$	16,091		$	15,301
Accumulated depreciation		(10,825	)		(10,599	)
Investment in operating lease equipment—net (1)	$	5,266		$	4,702

(1) Amounts include estimated unguaranteed residual values of $1,873 thousand and $1,717 thousand as of June 30, 2023, and March 31, 2023, respectively.

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GOODWILL AND OTHER INTANGIBLE ASSETS (Tables)

3 Months Ended

Jun. 30, 2023

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, 2023 (in thousands):

	Technology Segment			Product			Professional Services			Managed Services			Total
Balance March 31, 2023
Goodwill	$	144,778		$	-			-			-			144,778
Accumulated impairment losses		(8,673	)		-			-			-			(8,673	)
Net carrying amount	$	136,105		$	-		$	-		$	-		$	136,105
Reporting unit change		(136,105	)		106,497			19,712			9,896			-
Acquisitions		-			19,672			2,456			-			22,128
Impairment losses		-			-			-			-			-
Foreign currency translations		-			37			7			3			47
Balance June 30, 2023
Goodwill	$	-		$	134,879		$	22,175		$	9,899		$	166,953
Accumulated impairment losses		-			(6,787	)		(1,256	)		(630	)		(8,673	)
Net carrying amount	$	-		$	128,092		$	20,919		$	9,269		$	158,280

Other Intangible Assets

Our other intangible assets consist of the following on June 30, 2023, and March 31, 2023 (in thousands):

	June 30, 2023							March 31, 2023
	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Purchased intangibles	$	115,463	$	(64,897	)	$	50,566	$	85,449	$	(61,376	)	$	24,073
Capitalized software development		10,516		(9,829	)		687		10,516		(9,544	)		972
Total	$	125,979	$	(74,726	)	$	51,253	$	95,965	$	(70,920	)	$	25,045

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ALLOWANCE FOR CREDIT LOSSES (Tables)

3 Months Ended

Jun. 30, 2023

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, 2023, and 2022 (in thousands):

	Accounts Receivable			Notes Receivable			Lease Receivables			Total
Balance April 1, 2023	$	2,572		$	801		$	981		$	4,354
Provision for credit losses		629			(106	)		(45	)		478
Write-offs and other		(13	)		1			-			(12	)
Balance June 30, 2023	$	3,188		$	696		$	936		$	4,820

	Accounts Receivable			Notes Receivable		Lease Receivables		Total
Balance April 1, 2022	$	2,411		$	708	$	681	$	3,800
Provision for credit losses		382			84		232		698
Write-offs and other		(65	)		-		-		(65	)
Balance June 30, 2022	$	2,728		$	792	$	913	$	4,433

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, 2023 (in thousands):

	Amortized cost basis by origination year ending March 31,
	2024		2023		2022		2021		2020		2019 and prior		Total		Transfers (2)			Net credit exposure
Notes receivable:
High CQR	$	67,836	$	36,270	$	13,539	$	3,428	$	142	$	1	$	121,216	$	(14,619	)	$	106,597
Average CQR		4,871		9,695		1,096		96		58		26		15,842		(2,068	)		13,774
Total	$	72,707	$	45,965	$	14,635	$	3,524	$	200	$	27	$	137,058	$	(16,687	)	$	120,371
Lease receivables:
High CQR	$	7,378	$	16,566	$	3,595	$	1,775	$	432	$	133	$	29,879	$	(1,665	)	$	28,214
Average CQR		6,218		16,547		3,316		572		63		-		26,716		(4,049	)		22,667
Total	$	13,596	$	33,113	$	6,911	$	2,347	$	495	$	133	$	56,595	$	(5,714	)	$	50,881
Total amortized cost (1)	$	86,303	$	79,078	$	21,546	$	5,871	$	695	$	160	$	193,653	$	(22,401	)	$	171,252

(1) Excludes unguaranteed residual values of $4,488 thousand that we retained after selling the related lease receivable.

(2) Transfers consist of receivables that have been transferred to third-party financial institutions on a non-recourse basis.

The following table provides the amortized cost basis of our financing receivables by CQR and by credit origination year as of March 31, 2023 (in thousands):

	Amortized cost basis by origination year ending March 31,
	2023		2022		2021		2020		2019		2018 and prior		Total		Transfers (2)			Net credit exposure
Notes receivable:
High CQR	$	72,155	$	11,378	$	11,267	$	370	$	30	$	-	$	95,200	$	(28,115	)	$	67,085
Average CQR		12,793		2,675		213		115		61		1		15,858		(1,432	)		14,426
Total	$	84,948	$	14,053	$	11,480	$	485	$	91	$	1	$	111,058	$	(29,547	)	$	81,511
Lease receivables:
High CQR	$	21,629	$	3,842	$	1,916	$	565	$	51	$	9	$	28,012	$	(1,437	)	$	26,575
Average CQR		23,796		3,430		770		35		3		-		28,034		(1,594	)		26,440
Total	$	45,425	$	7,272	$	2,686	$	600	$	54	$	9	$	56,046	$	(3,031	)	$	53,015
Total amortized cost (1)	$	130,373	$	21,325	$	14,166	$	1,085	$	145	$	10	$	167,104	$	(32,578	)	$	134,526

(1) Excludes unguaranteed residual values of $4,222 thousand that we retained after selling the related lease receivable.

(2) Transfers consist of receivables that have been transferred to third-party financial institutions on a non-recourse basis and receivables that are in the process of being transferred to third-party financial institutions.

Aging Analysis of Financing Receivables

The following table provides an aging analysis of our financing receivables as of June 30, 2023 (in thousands):

	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	$	748	$	113	$	1,093	$	1,954	$	7,750	$	9,704	$	127,354	$	137,058
Lease receivables		250		367		902		1,519		3,771		5,290		51,305		56,595
Total	$	998	$	480	$	1,995	$	3,473	$	11,521	$	14,994	$	178,659	$	193,653

The following table provides an aging analysis of our financing receivables as of March 31, 2023 (in thousands):

	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	$	1,020	$	862	$	473	$	2,355	$	7,703	$	10,058	$	101,000	$	111,058
Lease receivables		1,068		463		864		2,395		5,413		7,808		48,238		56,046
Total	$	2,088	$	1,325	$	1,337	$	4,750	$	13,116	$	17,866	$	149,238	$	167,104

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EARNINGS PER SHARE (Tables)

3 Months Ended

Jun. 30, 2023

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, 2023, and 2022, respectively (in thousands, except per share data).

	Three Months Ended June 30,
	2023		2022
Net earnings attributable to common shareholders - basic and diluted	$	33,847	$	22,339
Basic and diluted common shares outstanding:
Weighted average common shares outstanding — basic		26,552		26,513
Effect of dilutive shares		96		172
Weighted average shares common outstanding — diluted		26,648		26,685
Earnings per common share - basic	$	1.27	$	0.84
Earnings per common share - diluted	$	1.27	$	0.84

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SHARE-BASED COMPENSATION (Tables)

3 Months Ended

Jun. 30, 2023

SHARE-BASED COMPENSATION [Abstract]

Summary of Non-Vested Restricted Shares

The following table provides a summary of the non-vested restricted shares for the three months ended June 30, 2023:

	Number of Shares			Weighted Average Grant-date Fair Value
Nonvested April 1, 2023		314,860		$	49.57
Granted		153,727		$	55.88
Vested		(152,477	)	$	46.10
Forfeited		(961	)	$	54.89
Nonvested June 30, 2023		315,149		$	54.31

Summary of Share-Based Compensation Expenses

The following table provides a summary of our total share-based compensation expense, including for restricted stock awards and our ESPP, and the related income tax benefit for the three months ended June 30, 2023, and 2022 (in thousands):

	Three Months Ended June 30,
	2023			2022
Equity-based compensation expense	$	2,205		$	1,773
Income tax benefit		(600	)		(496	)

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FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables)

3 Months Ended

Jun. 30, 2023

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, 2023, and March 31, 2023 (in thousands):

			Fair Value Measurement Using
	Recorded Amount		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
June 30, 2023
Assets:
Money market funds	$	22,225	$	22,225	$	-	$	-
March 31, 2023
Assets:
Money market funds	$	8,880	$	8,880	$	-	$	-

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BUSINESS COMBINATIONS (Tables)

3 Months Ended

Jun. 30, 2023

BUSINESS COMBINATIONS [Abstract]

Allocation of Purchase Price Consideration to Assets Acquired and Liabilities Assumed

Our preliminary allocation of the purchase consideration to the assets acquired and liabilities assumed is presented below (in thousands):

	Acquisition Date Amount
Accounts receivable	$	20,419
Other assets		1,940
Identified intangible assets		29,960
Accounts payable and other liabilities		(24,758	)
Contract liabilities		(1,086	)
Total identifiable net assets		26,475
Goodwill		22,128
Total purchase consideration	$	48,603

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SEGMENT REPORTING (Tables)

3 Months Ended

Jun. 30, 2023

SEGMENT REPORTING [Abstract]

Segment Reporting Information, by Reportable Segment

The following table provides reportable segment information for the three-month periods ended June 30, 2023, and 2022 (in thousands):

	Three Months Ended June 30,
	2023		2022
Net Sales
Product	$	498,166	$	385,676
Professional Services		35,556		37,168
Managed Services		31,963		25,941
Financing		8,490		9,574
Total		574,175		458,359
Gross Profit
Product		111,391		83,168
Professional Services		14,724		15,055
Managed Services		9,797		7,428
Financing		6,361		7,872
Total		142,273		113,523
Operating income
Technology Business		43,498		29,219
Financing		2,834		3,964
Total		46,332		33,183
Other income (expense), net		190		(2,153	)
Earnings before tax	$	46,522	$	31,030
Depreciation and amortization
Technology Business	$	4,764	$	3,182
Financing		28		28
Total	$	4,792	$	3,210
Interest and financing costs
Technology Business	$	550	$	138
Financing		301		225
Total	$	851	$	363
Selected Financial Data - Statement of Cash Flow
Purchases of property, equipment and operating lease equipment Technology Business	$	2,785	$	1,286
Financing		913		491
Total	$	3,698	$	1,777

Disaggregation of Net Sales and Revenue Recognized from Contracts with Customers [Table Text Block]

The following table provides a disaggregation of net sales by source and further disaggregates our revenue recognized from contracts with customers by timing and our position as principal or agent for the three-month period ended June 30, 2023 (in thousands):

	Three months ended June 30, 2023
	Product		Professional Services		Managed Services		Financing		Total
Net Sales
Contracts with customers	$	490,543	$	35,556	$	31,963	$	1,290	$	559,352
Financing and other		7,623		-		-		7,200		14,823
Total	$	498,166	$	35,556	$	31,963	$	8,490	$	574,175
Timing and position as principal or agent
Transferred at a point in time as principal	$	452,382	$	-	$	-	$	1,290	$	453,672
Transferred at a point in time as agent		38,161		-		-		-		38,161
Transferred over time as principal		-		35,556		31,963		-		67,519
Total revenue from contracts with customers	$	490,543	$	35,556	$	31,963	$	1,290	$	559,352

The following table provides a disaggregation of net sales by source and further disaggregates our revenue recognized from contracts with customers by timing and our position as principal or agent for the three-month period ended June 30, 2022 (in thousands):

	Three months ended June 30, 2022
	Product		Professional Services		Managed Services		Financing		Total
Net Sales
Contracts with customers	$	380,693	$	37,168	$	25,941	$	945	$	444,747
Financing and other		4,983		-		-		8,629		13,612
Total	$	385,676	$	37,168	$	25,941	$	9,574	$	458,359
Timing and position as principal or agent
Transferred at a point in time as principal	$	335,714	$	-	$	-	$	945	$	336,659
Transferred at a point in time as agent		44,979		-		-		-		44,979
Transferred over time as principal		-		37,168		25,941		-		63,109
Total revenue from contracts with customers	$	380,693	$	37,168	$	25,941	$	945	$	444,747

Technology Segment Disaggregation of Revenue

The following table provides a disaggregation of our revenue from contracts with customers for our technology business by customer end market and by type (in thousands):

	Three Months Ended June 30,
	2023			2022
Customer end market:
Telecom, media & entertainment	$	141,335		$	128,277
SLED		109,405			64,602
Healthcare		86,656			68,512
Technology		73,403			69,862
Financial services		65,690			33,299
All others		89,196			84,233
Net sales		565,685			448,785
Less: revenue from financing and other		(7,623	)		(4,983	)
Total revenue from contracts with customers	$	558,062		$	443,802
Type:
Product
Networking	$	245,188		$	142,641
Cloud		172,044			164,733
Security		45,796			47,995
Collaboration		12,956			12,980
Other		22,182			17,327
Total product		498,166			385,676
Professional services		35,556			37,168
Managed services		31,963			25,941
Net sales		565,685			448,785
Less: revenue from financing and other		(7,623	)		(4,983	)
Total revenue from contracts with customers	$	558,062		$	443,802

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ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - Segment	3 Months Ended		12 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Mar. 31, 2023
Basis of Presentation [Abstract]
Number of operating segments	4		2
Net Sales [Member] | Product Concentration Risk [Member] | Cisco Systems [Member] | Technology Segment [Member]
Concentrations of Risk [Abstract]
Percentage of concentration risk	45.00%	35.00%

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REVENUES (Details) - USD ($) $ in Thousands	3 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Mar. 31, 2023
Contract with Customer, Asset and Liability [Abstract]
Accounts receivable - trade	$ 58,500		$ 70,400
Current (included in deferred revenue)	118,646		113,713
Non-current (included in other liabilities)	48,390		$ 47,217
Revenue recognized from the beginning contract liability	30,900	$ 24,900
Revenue, Performance Obligation Satisfied over Time [Abstract]
Remaining performance obligation	113,937
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-07-01
Revenue, Performance Obligation Satisfied over Time [Abstract]
Remaining performance obligation	$ 55,368
Expected timing of satisfaction, period	9 months
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-04-01
Revenue, Performance Obligation Satisfied over Time [Abstract]
Remaining performance obligation	$ 34,042
Expected timing of satisfaction, period	1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-04-01
Revenue, Performance Obligation Satisfied over Time [Abstract]
Remaining performance obligation	$ 16,872
Expected timing of satisfaction, period	1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2026-04-01
Revenue, Performance Obligation Satisfied over Time [Abstract]
Remaining performance obligation	$ 5,298
Expected timing of satisfaction, period	1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2027-04-01
Revenue, Performance Obligation Satisfied over Time [Abstract]
Remaining performance obligation	$ 2,357
Expected timing of satisfaction, period

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FINANCING RECEIVABLES AND OPERATING LEASES (Details) - USD ($) $ in Thousands		3 Months Ended
		Jun. 30, 2023		Jun. 30, 2022	Mar. 31, 2023		Mar. 31, 2022
Profit Recognized for Sales-type Leases [Abstract]
Net sales		$ 7,623		$ 4,983
Cost of sales		7,391		4,067
Gross profit		232		916
Interest Income on Sales-type Leases [Abstract]
Interest income on sales-type leases		1,362		861
Lease income on operating leases		2,808		4,582
Financing Receivables [Abstract]
Unguaranteed residual value		4,488			$ 4,222
Allowance for credit losses		(4,820)		(4,433)	(4,354)		$ (3,800)
Reported as [Abstract]
Current		81,111			89,829
Unguaranteed residual value for sales-type leases		4,488			4,222
Investment in operating lease equipment - net [Abstract]
Cost of equipment under operating leases		16,091			15,301
Accumulated depreciation		(10,825)			(10,599)
Investment in operating lease equipment-net	[1]	5,266			4,702
Unguaranteed residual value of operating lease equipment net		1,873			1,717
Transfers of Financial Assets [Abstract]
Gain on sale of financing receivables		1,300		1,800
Proceeds from sale of financing receivables		61,400		52,500
Deferred revenue for servicing obligation		400			500
Notes Payable [Member] | Asset Pledged as Collateral [Member] | Nonrecourse [Member]
Transfers of Financial Assets [Abstract]
Financing receivables		22,000			35,700
Operating leases		2,100			2,500
Notes Receivables [Member]
Financing Receivables [Abstract]
Gross receivables		151,336			117,008
Unguaranteed residual value		0	[2]		0	[3]
Unearned income		(14,278)			(5,950)
Allowance for credit losses		(696)	[4]	(792)	(801)	[4]	(708)
Total, net		136,362			110,257
Reported as [Abstract]
Current		49,674			65,738
Long-term		86,688			44,519
Total, net		136,362			110,257
Lease Receivables [Member]
Financing Receivables [Abstract]
Gross receivables		60,660			60,157
Unguaranteed residual value		8,348	[2]		8,161	[3]
Unearned income		(7,925)			(8,050)
Allowance for credit losses		(936)	[4]	$ (913)	(981)	[4]	$ (681)
Total, net		60,147			59,287
Reported as [Abstract]
Current		31,437			24,091
Long-term		28,710			35,196
Total, net		60,147			59,287
Financing Receivables [Member]
Financing Receivables [Abstract]
Gross receivables		211,996			177,165
Unguaranteed residual value		8,348	[2]		8,161	[3]
Unearned income		(22,203)			(14,000)
Allowance for credit losses	[4]	(1,632)			(1,782)
Total, net		196,509			169,544
Reported as [Abstract]
Current		81,111			89,829
Long-term		115,398			79,715
Total, net		$ 196,509			$ 169,544

[1] Amounts include estimated unguaranteed residual values of $1,873 thousand and $1,717 thousand as of June 30, 2023, and March 31, 2023, respectively.

[2] Includes unguaranteed residual values of $4,488 thousand that we retained after selling the related lease receivable.

[3] Includes unguaranteed residual values of $4,222 thousand that we retained after selling the related lease receivable.

[4] Refer to Note 7, “Allowance for Credit Losses” for details.

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LESSEE ACCOUNTING (Details) - USD ($) $ in Millions	3 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Lessee, Operating Lease [Abstract]
Rent expense	$ 1.5	$ 1.3
Office Building [Member] | Maximum [Member]
Lessee, Operating Lease [Abstract]
Operating lease term	6 years
Warehouse [Member] | Maximum [Member]
Lessee, Operating Lease [Abstract]
Operating lease term	10 years

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GOODWILL AND OTHER INTANGIBLE ASSETS, Goodwill (Details) $ in Thousands	3 Months Ended	12 Months Ended
	Jun. 30, 2023 USD ($) Unit	Mar. 31, 2023 USD ($) Unit
Goodwill [Roll Forward]
Goodwill	$ 144,778
Accumulated impairment losses	(8,673)
Net carrying amount	136,105
Reporting unit change	0
Acquisitions	22,128
Impairment losses	0
Foreign currency translations	47
Goodwill	166,953	$ 144,778
Accumulated impairment losses	(8,673)	(8,673)
Net carrying amount	158,280	136,105
Increase in goodwill	$ 22,200
Percentage change in the fair value	10.00%
Technology Segment [Member]
Goodwill [Roll Forward]
Goodwill	$ 144,778
Accumulated impairment losses	(8,673)
Net carrying amount	136,105
Reporting unit change	(136,105)
Acquisitions	0
Impairment losses	0
Foreign currency translations	0
Goodwill	0	144,778
Accumulated impairment losses	0	(8,673)
Net carrying amount	$ 0	$ 136,105
Number of reporting units | Unit	3	1
Product [Member]
Goodwill [Roll Forward]
Goodwill	$ 0
Accumulated impairment losses	0
Net carrying amount	0
Reporting unit change	106,497
Acquisitions	19,672
Impairment losses	0
Foreign currency translations	37
Goodwill	134,879	$ 0
Accumulated impairment losses	(6,787)	0
Net carrying amount	128,092	0
Professional Services [Member]
Goodwill [Roll Forward]
Goodwill	0
Accumulated impairment losses	0
Net carrying amount	0
Reporting unit change	19,712
Acquisitions	2,456
Impairment losses	0
Foreign currency translations	7
Goodwill	22,175	0
Accumulated impairment losses	(1,256)	0
Net carrying amount	20,919	0
Managed Services [Member]
Goodwill [Roll Forward]
Goodwill	0
Accumulated impairment losses	0
Net carrying amount	0
Reporting unit change	9,896
Acquisitions	0
Impairment losses	0
Foreign currency translations	3
Goodwill	9,899	0
Accumulated impairment losses	(630)	0
Net carrying amount	$ 9,269	$ 0

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GOODWILL AND OTHER INTANGIBLE ASSETS, Other Intangible Assets (Details) - USD ($) $ in Thousands	3 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Mar. 31, 2023
Other Intangible Assets [Abstract]
Gross carrying amount	$ 125,979		$ 95,965
Accumulated amortization	(74,726)		(70,920)
Net carrying amount	51,253		25,045
Purchased Intangibles [Member]
Other Intangible Assets [Abstract]
Gross carrying amount	115,463		85,449
Accumulated amortization	(64,897)		(61,376)
Net carrying amount	50,566		24,073
Total amortization expense	$ 3,500	$ 2,200
Purchased Intangibles [Member] | Minimum [Member]
Other Intangible Assets [Abstract]
Estimated useful life	5 years
Purchased Intangibles [Member] | Maximum [Member]
Other Intangible Assets [Abstract]
Estimated useful life	10 years
Capitalized Software Development [Member]
Other Intangible Assets [Abstract]
Gross carrying amount	$ 10,516		10,516
Accumulated amortization	(9,829)		(9,544)
Net carrying amount	$ 687		$ 972
Capitalized Software Development [Member] | Minimum [Member]
Other Intangible Assets [Abstract]
Estimated useful life	5 years

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ALLOWANCE FOR CREDIT LOSSES, Activity (Details) - USD ($) $ in Thousands	3 Months Ended
	Jun. 30, 2023		Jun. 30, 2022
Activity in reserves for credit losses [Roll Forward]
Balance	$ 4,354		$ 3,800
Provision for credit losses	478		698
Write-offs and other	(12)		(65)
Balance	4,820		4,433
Accounts Receivable [Member]
Activity in reserves for credit losses [Roll Forward]
Balance	2,572		2,411
Provision for credit losses	629		382
Write-offs and other	(13)		(65)
Balance	3,188		2,728
Notes Receivable [Member]
Activity in reserves for credit losses [Roll Forward]
Balance	801	[1]	708
Provision for credit losses	(106)		84
Write-offs and other	1		0
Balance	696	[1]	792
Lease Receivables [Member]
Activity in reserves for credit losses [Roll Forward]
Balance	981	[1]	681
Provision for credit losses	(45)		232
Write-offs and other	0		0
Balance	$ 936	[1]	$ 913

[1] Refer to Note 7, “Allowance for Credit Losses” for details.

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ALLOWANCE FOR CREDIT LOSSES, Amortized Cost Basis (Details) - USD ($) $ in Thousands	3 Months Ended
	Jun. 30, 2023		Mar. 31, 2023
Credit Risk Profile, Segregated by Class [Abstract]
2024/2023	$ 86,303	[1]	$ 130,373	[2]
2023/2022	79,078	[1]	21,325	[2]
2022/2021	21,546	[1]	14,166	[2]
2021/2020	5,871	[1]	1,085	[2]
2020/2019	695	[1]	145	[2]
2019/2018 and prior	160	[1]	10	[2]
Total	193,653	[1]	167,104	[2]
Transfers	(22,401)	[1],[3]	(32,578)	[2],[4]
Net credit exposure	171,252	[1]	134,526
Unguaranteed residual value	$ 4,488		4,222
Minimum [Member]
Credit Risk Profile, Segregated by Class [Abstract]
Loss rate on credit quality rating	8.00%
Maximum [Member]
Credit Risk Profile, Segregated by Class [Abstract]
Loss rate on credit quality rating	100.00%
Notes Receivable [Member]
Credit Risk Profile, Segregated by Class [Abstract]
2024/2023	$ 72,707		84,948
2023/2022	45,965		14,053
2022/2021	14,635		11,480
2021/2020	3,524		485
2020/2019	200		91
2019/2018 and prior	27		1
Total	137,058		111,058
Transfers	(16,687)	[3]	(29,547)	[4]
Net credit exposure	120,371		81,511
Unguaranteed residual value	0	[5]	0	[6]
Lease Receivables [Member]
Credit Risk Profile, Segregated by Class [Abstract]
2024/2023	13,596		45,425
2023/2022	33,113		7,272
2022/2021	6,911		2,686
2021/2020	2,347		600
2020/2019	495		54
2019/2018 and prior	133		9
Total	56,595		56,046
Transfers	(5,714)	[3]	(3,031)	[4]
Net credit exposure	50,881		53,015
Unguaranteed residual value	$ 8,348	[5]	8,161	[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]
2024/2023	$ 67,836		72,155
2023/2022	36,270		11,378
2022/2021	13,539		11,267
2021/2020	3,428		370
2020/2019	142		30
2019/2018 and prior	1		0
Total	121,216		95,200
Transfers	(14,619)	[3]	(28,115)	[4]
Net credit exposure	106,597		67,085
High CQR [Member] | Lease Receivables [Member]
Credit Risk Profile, Segregated by Class [Abstract]
2024/2023	7,378		21,629
2023/2022	16,566		3,842
2022/2021	3,595		1,916
2021/2020	1,775		565
2020/2019	432		51
2019/2018 and prior	133		9
Total	29,879		28,012
Transfers	(1,665)	[3]	(1,437)	[4]
Net credit exposure	$ 28,214		26,575
Average CQR [Member] | Minimum [Member]
Credit Risk Profile, Segregated by Class [Abstract]
Loss rate on credit quality rating	1.00%
Average CQR [Member] | Maximum [Member]
Credit Risk Profile, Segregated by Class [Abstract]
Loss rate on credit quality rating	8.00%
Average CQR [Member] | Notes Receivable [Member]
Credit Risk Profile, Segregated by Class [Abstract]
2024/2023	$ 4,871		12,793
2023/2022	9,695		2,675
2022/2021	1,096		213
2021/2020	96		115
2020/2019	58		61
2019/2018 and prior	26		1
Total	15,842		15,858
Transfers	(2,068)	[3]	(1,432)	[4]
Net credit exposure	13,774		14,426
Average CQR [Member] | Lease Receivables [Member]
Credit Risk Profile, Segregated by Class [Abstract]
2024/2023	6,218		23,796
2023/2022	16,547		3,430
2022/2021	3,316		770
2021/2020	572		35
2020/2019	63		3
2019/2018 and prior	0		0
Total	26,716		28,034
Transfers	(4,049)	[3]	(1,594)	[4]
Net credit exposure	$ 22,667		$ 26,440

[1] Excludes unguaranteed residual values of $4,488 thousand that we retained after selling the related lease receivable.

[2] Excludes unguaranteed residual values of $4,222 thousand that we retained after selling the related lease receivable.

[3] Transfers consist of receivables that have been transferred to third-party financial institutions on a non-recourse basis.

[4] Transfers consist of receivables that have been transferred to third-party financial institutions on a non-recourse basis and receivables that are in the process of being transferred to third-party financial institutions.

[5] Includes unguaranteed residual values of $4,488 thousand that we retained after selling the related lease receivable.

[6] Includes unguaranteed residual values of $4,222 thousand that we retained after selling the related lease receivable.

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ALLOWANCE FOR CREDIT LOSSES, Aging Analysis (Details) - USD ($) $ in Thousands	Jun. 30, 2023		Mar. 31, 2023
Age of the Recorded Notes Receivable Balance Disaggregated Based on Internally Assigned CQR [Abstract]
Billed	$ 14,994		$ 17,866
Unbilled	178,659		149,238
Total	193,653	[1]	167,104	[2]
Notes Receivable [Member]
Age of the Recorded Notes Receivable Balance Disaggregated Based on Internally Assigned CQR [Abstract]
Billed	9,704		10,058
Unbilled	127,354		101,000
Total	137,058		111,058
Lease Receivables [Member]
Age of the Recorded Notes Receivable Balance Disaggregated Based on Internally Assigned CQR [Abstract]
Billed	5,290		7,808
Unbilled	51,305		48,238
Total	56,595		56,046
Past Due [Member]
Age of the Recorded Notes Receivable Balance Disaggregated Based on Internally Assigned CQR [Abstract]
Total	3,473		4,750
Past Due [Member] | Notes Receivable [Member]
Age of the Recorded Notes Receivable Balance Disaggregated Based on Internally Assigned CQR [Abstract]
Total	1,954		2,355
Past Due [Member] | Lease Receivables [Member]
Age of the Recorded Notes Receivable Balance Disaggregated Based on Internally Assigned CQR [Abstract]
Total	1,519		2,395
31 to 60 Days Past Due [Member]
Age of the Recorded Notes Receivable Balance Disaggregated Based on Internally Assigned CQR [Abstract]
Total	998		2,088
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	748		1,020
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	250		1,068
61 to 90 Days Past Due [Member]
Age of the Recorded Notes Receivable Balance Disaggregated Based on Internally Assigned CQR [Abstract]
Total	480		1,325
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	113		862
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	367		463
> 90 Days Past Due [Member]
Age of the Recorded Notes Receivable Balance Disaggregated Based on Internally Assigned CQR [Abstract]
Total	1,995		1,337
> 90 Days Past Due [Member] | Notes Receivable [Member]
Age of the Recorded Notes Receivable Balance Disaggregated Based on Internally Assigned CQR [Abstract]
Total	1,093		473
> 90 Days Past Due [Member] | Lease Receivables [Member]
Age of the Recorded Notes Receivable Balance Disaggregated Based on Internally Assigned CQR [Abstract]
Total	902		864
Current [Member]
Age of the Recorded Notes Receivable Balance Disaggregated Based on Internally Assigned CQR [Abstract]
Total	11,521		13,116
Current [Member] | Notes Receivable [Member]
Age of the Recorded Notes Receivable Balance Disaggregated Based on Internally Assigned CQR [Abstract]
Total	7,750		7,703
Current [Member] | Lease Receivables [Member]
Age of the Recorded Notes Receivable Balance Disaggregated Based on Internally Assigned CQR [Abstract]
Total	$ 3,771		$ 5,413

[1] Excludes unguaranteed residual values of $4,488 thousand that we retained after selling the related lease receivable.

[2] Excludes unguaranteed residual values of $4,222 thousand that we retained after selling the related lease receivable.

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NOTES PAYABLE AND CREDIT FACILITY (Details) $ in Millions	3 Months Ended
	Jun. 30, 2023 USD ($) Dates	Mar. 31, 2023 USD ($)	Mar. 10, 2023 USD ($)
Notes Payable [Member] | Recourse [Member]
Notes Payable [Abstract]
Long-term Debt	$ 58.1
Weighted average interest rate of notes	3.50%	3.50%
Notes Payable [Member] | Recourse [Member] | Financing Segment [Member]
Notes Payable [Abstract]
Weighted average interest rate of notes	6.27%
Notes Payable [Member] | Recourse [Member] | Note Payable One Installment Arrangement [Member]
Notes Payable [Abstract]
Long-term Debt	$ 4.0	$ 6.0
Notes Payable [Member] | Non-recourse [Member]
Notes Payable [Abstract]
Long-term Debt	$ 22.7	$ 34.3
Weighted average interest rate of notes	5.22%	5.01%
Floor Plan Facility [Member] | WFCDF Credit Facility [Member] | Minimum [Member]
Credit Facility [Abstract]
Debt instrument, term	30 days
Floor Plan Facility [Member] | WFCDF Credit Facility [Member] | Maximum [Member]
Credit Facility [Abstract]
Debt instrument, term	60 days
Revolving Credit Facility [Member] | Notes Payable [Member] | Recourse [Member] | WFCDF Credit Facility [Member]
Notes Payable [Abstract]
Long-term Debt	$ 52.0
Collateralized Borrowings [Member] | Notes Payable [Member] | Recourse [Member]
Notes Payable [Abstract]
Long-term Debt	2.1
WFCDF [Member] | WFCDF Credit Facility [Member]
Credit Facility [Abstract]
Guarantor obligations for credit facility, maximum	$ 10.5
Debt instrument, term	1 year
Renewal term	1 year
Period of notice required to terminate credit facility at year end	90 days
WFCDF [Member] | WFCDF Credit Facility [Member] | SOFR [Member]
Credit Facility [Abstract]
Basis spread on reference rate	1.75%
Debt instrument, interest rate adjustment	0.10%
WFCDF [Member] | Floor Plan Facility [Member] | WFCDF Credit Facility [Member]
Credit Facility [Abstract]
Maximum borrowing capacity under credit facility			$ 500.0
Amount outstanding under credit facility	$ 182.9	$ 134.6
Number of specified payment dates | Dates	3
WFCDF [Member] | Revolving Credit Facility [Member] | WFCDF Credit Facility [Member]
Credit Facility [Abstract]
Maximum borrowing capacity under credit facility			$ 200.0
Amount outstanding under credit facility	$ 52.0	$ 0.0

XML

EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Reconciliation of Numerators and Denominators Used to Calculate Basic and Diluted Earnings per Common Share [Abstract]
Net earnings attributable to common shareholders - basic and diluted	$ 33,847	$ 22,339
Basic and diluted common shares outstanding [Abstract]
Weighted average common shares outstanding - basic (in shares)	26,552	26,513
Effect of dilutive shares (in shares)	96	172
Weighted average shares common outstanding - diluted (in shares)	26,648	26,685
Earnings per common share - basic (in dollars per share)	$ 1.27	$ 0.84
Earnings per common share - diluted (in dollars per share)	$ 1.27	$ 0.84

XML

STOCKHOLDERS' EQUITY (Details) - USD ($) $ in Millions	3 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Mar. 22, 2023	Mar. 24, 2022
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)	93,541	70,473
Common stock repurchased during the period	$ 4.4	$ 3.9
Shares repurchased to satisfy tax withholding obligation (in shares)	53,945	58,080
Value of shares repurchased to satisfy tax withholding obligation	$ 3.0	$ 3.3

XML

SHARE-BASED COMPENSATION, Restricted Stock Activity (Details) - Restricted Stock [Member] - $ / shares	3 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Number of Shares [Roll Forward]
Nonvested at beginning of period (in shares)	314,860
Granted (in shares)	153,727
Vested (in shares)	(152,477)
Forfeited (in shares)	(961)
Nonvested at end of period (in shares)	315,149
Weighted Average Grant-date Fair Value [Roll Forward]
Nonvested at beginning of period (in dollars per share)	$ 49.57
Granted (in dollars per share)	55.88
Vested (in dollars per share)	46.1
Forfeited (in dollars per share)	54.89
Nonvested at end of period (in dollars per share)	$ 54.31
2017 Director LTIP [Member]
Number of Shares [Roll Forward]
Granted (in shares)	862	774
2021 Employee LTIP [Member]
Number of Shares [Roll Forward]
Granted (in shares)	152,865	138,643

XML

SHARE-BASED COMPENSATION, Employee Stock Purchase Plan (Details) - 2022 Employee Stock Purchase Plan [Member]	3 Months Ended
	Jun. 30, 2023 $ / shares shares
Employee Stock Purchase Plan [Abstract]
Aggregate number of shares that can be issued to participants (in shares)	2,500,000
Offering period	6 months
Number of shares issued under the plan (in shares)	36,697
Share issue price (in dollars per shares) | $ / shares	$ 38.1
Number of shares remaining under the plan (in shares)	2,460,000

XML

SHARE-BASED COMPENSATION, Compensation Expense (Details) - USD ($) $ in Thousands	3 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Compensation Expense [Abstract]
Equity-based compensation expense	$ 2,205	$ 1,773
Income tax benefit	(600)	(496)
401(k) Profit Sharing Plan [Abstract]
Contribution to profit sharing plan	1,400	$ 1,100
Restricted Stock [Member]
Compensation Expense [Abstract]
Unrecognized compensation expense	$ 16,200
Unrecognized compensation expense, period for recognition	36 months

XML

INCOME TAXES (Details) - USD ($) $ in Thousands	3 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
INCOME TAXES [Abstract]
Provision for income tax expense	$ 12,675	$ 8,691
Effective income tax rate	27.20%	28.00%
Statutory federal income tax rate	21.00%	21.00%

XML

FAIR VALUE OF FINANCIAL INSTRUMENTS (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Mar. 31, 2023
Assets [Abstract]
Money market funds	$ 22,225	$ 8,880
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member]
Assets [Abstract]
Money market funds	22,225	8,880
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

XML

BUSINESS COMBINATIONS (Details) - USD ($) $ in Thousands	Apr. 30, 2023	Jun. 30, 2023	Mar. 31, 2023
Allocation of Purchase Price Consideration to Assets Acquired and Liabilities Assumed [Abstract]
Goodwill		$ 158,280	$ 136,105
Product [Member]
Allocation of Purchase Price Consideration to Assets Acquired and Liabilities Assumed [Abstract]
Goodwill	$ 19,700
Professional Services [Member]
Allocation of Purchase Price Consideration to Assets Acquired and Liabilities Assumed [Abstract]
Goodwill	2,400
Network Solutions Group [Member]
Business Combination [Abstract]
Cash portion of the acquisition	59,600
Consideration payable	11,000
Allocation of Purchase Price Consideration to Assets Acquired and Liabilities Assumed [Abstract]
Accounts receivable	20,419
Other assets	1,940
Identified intangible assets	29,960
Accounts payable and other liabilities	(24,758)
Contract liabilities	(1,086)
Total identifiable net assets	26,475
Goodwill	22,128
Total purchase consideration	$ 48,603
Network Solutions Group [Member] | Customer Relationships [Member]
Allocation of Purchase Price Consideration to Assets Acquired and Liabilities Assumed [Abstract]
Estimated useful lives		7 years

XML

SEGMENT REPORTING, Reportable Segment Information (Details) $ in Thousands	3 Months Ended		12 Months Ended
	Jun. 30, 2023 USD ($) Segment	Jun. 30, 2022 USD ($)	Mar. 31, 2023 Segment
SEGMENT REPORTING [Abstract]
Number of business segments | Segment	4		2
Reportable Segment Information [Abstract]
Net sales	$ 574,175	$ 458,359
Gross profit	142,273	113,523
Operating income	46,332	33,183
Other income (expense), net	190	(2,153)
Earnings before tax	46,522	31,030
Depreciation and amortization	4,792	3,210
Interest and financing costs	851	363
Selected Financial Data - Statement of Cash Flow [Abstract]
Purchases of property, equipment and operating lease equipment	3,698	1,777
Technology Segment [Member]
Reportable Segment Information [Abstract]
Net sales	565,685	448,785
Product Segment [Member]
Reportable Segment Information [Abstract]
Net sales	498,166	385,676
Professional Services Segment [Member]
Reportable Segment Information [Abstract]
Net sales	35,556	37,168
Managed Services Segment [Member]
Reportable Segment Information [Abstract]
Net sales	31,963	25,941
Financing Segment [Member]
Reportable Segment Information [Abstract]
Net sales	8,490	9,574
Operating Segments [Member] | Technology Segment [Member]
Reportable Segment Information [Abstract]
Operating income	43,498	29,219
Depreciation and amortization	4,764	3,182
Interest and financing costs	550	138
Selected Financial Data - Statement of Cash Flow [Abstract]
Purchases of property, equipment and operating lease equipment	2,785	1,286
Operating Segments [Member] | Product Segment [Member]
Reportable Segment Information [Abstract]
Net sales	498,166	385,676
Gross profit	111,391	83,168
Operating Segments [Member] | Professional Services Segment [Member]
Reportable Segment Information [Abstract]
Net sales	35,556	37,168
Gross profit	14,724	15,055
Operating Segments [Member] | Managed Services Segment [Member]
Reportable Segment Information [Abstract]
Net sales	31,963	25,941
Gross profit	9,797	7,428
Operating Segments [Member] | Financing Segment [Member]
Reportable Segment Information [Abstract]
Net sales	8,490	9,574
Gross profit	6,361	7,872
Operating income	2,834	3,964
Depreciation and amortization	28	28
Interest and financing costs	301	225
Selected Financial Data - Statement of Cash Flow [Abstract]
Purchases of property, equipment and operating lease equipment	$ 913	$ 491

XML

SEGMENT REPORTING, Disaggregation of Net Sales and Revenue Recognized from Contracts with Customers (Details) - USD ($) $ in Thousands	3 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Net Sales [Abstract]
Revenue from contracts with customers	$ 559,352	$ 444,747
Financing and other	14,823	13,612
Net sales	574,175	458,359
Transferred at Point in Time [Member] | Sales Channel, Directly to Consumer [Member]
Net Sales [Abstract]
Revenue from contracts with customers	453,672	336,659
Transferred at Point in Time [Member] | Sales Channel, Through Intermediary [Member]
Net Sales [Abstract]
Revenue from contracts with customers	38,161	44,979
Transferred over Time [Member] | Sales Channel, Directly to Consumer [Member]
Net Sales [Abstract]
Revenue from contracts with customers	67,519	63,109
Technology Segment [Member]
Net Sales [Abstract]
Revenue from contracts with customers	558,062	443,802
Financing and other	7,623	4,983
Net sales	565,685	448,785
Product Segment [Member]
Net Sales [Abstract]
Revenue from contracts with customers	490,543	380,693
Financing and other	7,623	4,983
Net sales	498,166	385,676
Product Segment [Member] | Transferred at Point in Time [Member] | Sales Channel, Directly to Consumer [Member]
Net Sales [Abstract]
Revenue from contracts with customers	452,382	335,714
Product Segment [Member] | Transferred at Point in Time [Member] | Sales Channel, Through Intermediary [Member]
Net Sales [Abstract]
Revenue from contracts with customers	38,161	44,979
Product Segment [Member] | Transferred over Time [Member] | Sales Channel, Directly to Consumer [Member]
Net Sales [Abstract]
Revenue from contracts with customers	0	0
Professional Services Segment [Member]
Net Sales [Abstract]
Revenue from contracts with customers	35,556	37,168
Financing and other	0	0
Net sales	35,556	37,168
Professional Services Segment [Member] | Transferred at Point in Time [Member] | Sales Channel, Directly to Consumer [Member]
Net Sales [Abstract]
Revenue from contracts with customers	0	0
Professional Services Segment [Member] | Transferred at Point in Time [Member] | Sales Channel, Through Intermediary [Member]
Net Sales [Abstract]
Revenue from contracts with customers	0	0
Professional Services Segment [Member] | Transferred over Time [Member] | Sales Channel, Directly to Consumer [Member]
Net Sales [Abstract]
Revenue from contracts with customers	35,556	37,168
Managed Services Segment [Member]
Net Sales [Abstract]
Revenue from contracts with customers	31,963	25,941
Financing and other	0	0
Net sales	31,963	25,941
Managed Services Segment [Member] | Transferred at Point in Time [Member] | Sales Channel, Directly to Consumer [Member]
Net Sales [Abstract]
Revenue from contracts with customers	0	0
Managed Services Segment [Member] | Transferred at Point in Time [Member] | Sales Channel, Through Intermediary [Member]
Net Sales [Abstract]
Revenue from contracts with customers	0	0
Managed Services Segment [Member] | Transferred over Time [Member] | Sales Channel, Directly to Consumer [Member]
Net Sales [Abstract]
Revenue from contracts with customers	31,963	25,941
Financing Segment [Member]
Net Sales [Abstract]
Revenue from contracts with customers	1,290	945
Financing and other	7,200	8,629
Net sales	8,490	9,574
Financing Segment [Member] | Transferred at Point in Time [Member] | Sales Channel, Directly to Consumer [Member]
Net Sales [Abstract]
Revenue from contracts with customers	1,290	945
Financing Segment [Member] | Transferred at Point in Time [Member] | Sales Channel, Through Intermediary [Member]
Net Sales [Abstract]
Revenue from contracts with customers	0	0
Financing Segment [Member] | Transferred over Time [Member] | Sales Channel, Directly to Consumer [Member]
Net Sales [Abstract]
Revenue from contracts with customers	$ 0	$ 0

XML

SEGMENT REPORTING, Technology Segment Disaggregation of Revenue (Details) - USD ($) $ in Thousands	3 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Disaggregation of Revenue [Abstract]
Net sales	$ 574,175	$ 458,359
Less: Revenue from financing and other	(14,823)	(13,612)
Revenue from contracts with customers	559,352	444,747
Product [Member]
Disaggregation of Revenue [Abstract]
Net sales	506,656	395,250
Technology Segment [Member]
Disaggregation of Revenue [Abstract]
Net sales	565,685	448,785
Less: Revenue from financing and other	(7,623)	(4,983)
Revenue from contracts with customers	558,062	443,802
Technology Segment [Member] | Telecom, Media & Entertainment [Member]
Disaggregation of Revenue [Abstract]
Net sales	141,335	128,277
Technology Segment [Member] | SLED [Member]
Disaggregation of Revenue [Abstract]
Net sales	109,405	64,602
Technology Segment [Member] | Health Care [Member]
Disaggregation of Revenue [Abstract]
Net sales	86,656	68,512
Technology Segment [Member] | Technology [Member]
Disaggregation of Revenue [Abstract]
Net sales	73,403	69,862
Technology Segment [Member] | Financial Services [Member]
Disaggregation of Revenue [Abstract]
Net sales	65,690	33,299
Technology Segment [Member] | All Others [Member]
Disaggregation of Revenue [Abstract]
Net sales	89,196	84,233
Product Segment [Member]
Disaggregation of Revenue [Abstract]
Net sales	498,166	385,676
Less: Revenue from financing and other	(7,623)	(4,983)
Revenue from contracts with customers	490,543	380,693
Product Segment [Member] | Networking [Member]
Disaggregation of Revenue [Abstract]
Net sales	245,188	142,641
Product Segment [Member] | Cloud [Member]
Disaggregation of Revenue [Abstract]
Net sales	172,044	164,733
Product Segment [Member] | Security [Member]
Disaggregation of Revenue [Abstract]
Net sales	45,796	47,995
Product Segment [Member] | Collaboration [Member]
Disaggregation of Revenue [Abstract]
Net sales	12,956	12,980
Product Segment [Member] | Other [Member]
Disaggregation of Revenue [Abstract]
Net sales	22,182	17,327
Professional Services Segment [Member]
Disaggregation of Revenue [Abstract]
Net sales	35,556	37,168
Less: Revenue from financing and other	0	0
Revenue from contracts with customers	35,556	37,168
Managed Services Segment [Member]
Disaggregation of Revenue [Abstract]
Net sales	31,963	25,941
Less: Revenue from financing and other	0	0
Revenue from contracts with customers	$ 31,963	$ 25,941