DISCONTINUED OPERATIONS

3 Months Ended

Jun. 30, 2025

DISCONTINUED OPERATIONS [Abstract]

DISCONTINUED OPERATIONS

4. DISCONTINUED OPERATIONS

On June 30, 2025, we completed the sale of HoldCo to Marlin Leasing Corporation pursuant to the Membership Interest Purchase Agreement dated June 20, 2025, thereby selling our domestic financing business. In the transaction, we received net cash proceeds of $156.7 million, consisting of cash proceeds of $180.1 million less cash transferred of $23.4 million, recognized a receivable of $7.8 million related to a post-closing adjustment process based on the book value of the assets associated with HoldCo and other adjustments, and recognized a contingent consideration asset of $13.5 million. See Note 13, “Fair Value of Financial Instruments” for a discussion of our contingent consideration asset. We incurred approximately $4.0 million in transaction costs during our quarter ended June 30, 2025, which are netted against the gain on sale of HoldCo before income taxes. In connection with the sale, we entered into a transition services agreement, pursuant to which ePlus and Marlin Leasing Corporation will provide certain transition services to each other after the sale.

The sale of our domestic financing business positions us going forward as a pure-play technology solutions provider and represents a strategic shift in our operations. Consequently, our financial statements present our financial results for all periods, and we are retrospectively presenting the results of our domestic financing business as discontinued operations.

The following table provides our operating results of discontinued operations for the three months ended June 30, 2025, and 2024 (in thousands):

	Three months ended June 30,
	2025		2024
Net sales	$	15,811	$	8,886
Cost of sales		1,734		1,279
Gross profit		14,077		7,607
Selling, general, and administrative		3,599		3,012
Interest and financing costs		450		585
Operating expenses		4,049		3,597
Operating income		10,028		4,010
Other income—net		211		362
Earnings before gain from sale and income taxes		10,239		4,372
Gain from sale of HoldCo before income taxes		4,368		-
Earnings before income taxes		14,607		4,372
Provision for income taxes		4,038		1,226
Earnings from discontinued operations, net of tax	$	10,569	$	3,146

The following table provides the major classes of assets and liabilities that are classified as discontinued operations as of March 31, 2025 (in thousands):

		March 31, 2025
ASSETS
Accounts receivable	$	34,610
Financing receivables—net, current		168,392
Other current assets		19,397
Current assets of discontinued operations	$	222,399
Financing receivables and operating leases—net	$	126,408
Other assets—long-term		7,427
Non-current assets of discontinued operations	$	133,835
LIABILITIES
Accounts payable	$	127,154
Salaries and commissions payable		2,812
Non-recourse notes payable—current		27,456
Other current liabilities		9,041
Current liabilities of discontinued operations	$	166,463
Non-recourse notes payable—long-term		11,317
Other liabilities—long-term		1,229
Non-current liabilities of discontinued operations	$	12,546