8-K

United States

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): June 23, 2009 (June 17, 2009)

ePlus inc.

(Exact name of registrant as specified in its charter)

Delaware	1-34167	54-1817218
(State or other jurisdiction of incorporation or organization)	(Commission File Number)	(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

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2 below):

[] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
          

Item 1.01  Entry Into a Material Definitive Agreement

On June 18, 2009, ePlus inc. entered into Amendment #2 ("the Lease") to its office lease agreement with Norton  Building 1, LLC ("the  Landlord")  pursuant to which we will continue to lease 55,880 square feet for use as its principal headquarters. The property is located at 13595 Dulles Technology Drive, Herndon, Virginia.  The term of the Lease will begin January 1, 2010, and will continue for five years from such date.  In addition, we have the right to terminate the Lease on December 31, 2012 in the event that the facility no longer meets ePlus’ needs, by giving six months’ written notice, with no penalty fee.  The annual base rent, which includes an expenses factor, is $21.50 per square foot for the first year, with an annual rent escalation for operating cost increases plus 2.75% of the annual base rent, net of the expenses factor, for each year thereafter.

Norton Building 1, LLC is a limited liability company owned in part by Mr. Phillip G. Norton’s spouse and in part in trust for his children.  Mr. Norton is our Chairman of the Board, President, and Chief Executive Officer.  Mr. Norton has no managerial or executive role in Norton Building 1, LLC.  The Lease was approved by the Nominating and Corporate Governance Committee, in accordance with our Related Person Transaction Policy, and was subsequently approved by a majority of the board of directors, with Mr. Norton abstaining.

The foregoing description of the Lease is qualified in entirety by reference to Amendment #2 to the Lease, a copy of which is included  with this Current  Report on Form 8-K as Exhibit 10.1, and incorporated by reference.

Item 2.02.  Results of Operations and Financial Condition

On June 17, 2009, ePlus inc. announced by press release its results of operations for its fiscal fourth quarter and full fiscal year ended March 31,  2009.  A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

In accordance with General Instruction B.2 of Form 8-K, the information in Item 2.02 of this Current Report on Form 8-K and Exhibit 99.1, shall not be deemed to be "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, (the "Exchange Act"), or otherwise subject to the liabilities of that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

Item 9.01         Financial Statements and Exhibits

(d) The following exhibits are filed as part of this report:

Exhibit No.                            Description

10.1        Amendment #2 to Deed of Lease by and between ePlus inc. and Norton Building I, LLC, dated as of June 18, 2009.

99.1                                        Press release dated June 17, 2009 issued by ePlus inc.

SIGNATURE

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

 ePlus inc.

By: /s/ Elaine D. Marion 

 Elaine D. Marion

 Chief Financial Officer

Date: June 23, 2009

EX-10.1

AMENDMENT #2

TO

DEED OF LEASE

THIS AMENDMENT #2 TO LEASE AGREEMENT (the "Amendment #2") is made as of the 18th day of June 2009, by and between ePLUS, INC. ("Tenant"), and Norton Building 1 LLC ("Landlord").

WHEREAS, the Landlord is the owner of certain property, located in Fairfax County, Virginia, with a street address of 13595 Dulles Technology Drive, Herndon, Virginia (the "Property"), improved by a two-story office building located thereon (the "Building"); and,

WHEREAS, the Tenant and Landlord are parties to that certain LEASE AGREEMENT dated as of December 23, 2004 (the “Lease”) and AMENDMENT #1 dated as of July 1, 2007 (“Amendment #1”); and,

WHEREAS, the Tenant and Landlord desire to enter modify the Lease to provide for the occupancy of the entire Premises for an additional five (5) year term at its expiration on December 31, 2009, upon the terms and conditions more particularly set forth herein.

NOW, THEREFORE, the parties hereto, intending legally to be bound, hereby covenant and agree as set forth below:

1.   The capitalized terms contained in this Amendment #2 and not herein defined shall have the same meanings as ascribed to them in the Lease.

2.   Section 1.1(b) is modified to provide that Base Rent from and after January 1, 2010 shall be $21.50  per square foot, subject to adjustment for actual 2009 operating expenses as provided in Section 6 below and subject to annual increases as set forth in Section 3.22.

3.   Section 1.1(d) is modified to provide for a new Expiration Date of December 31, 2014.

4.   Section 3.1 is modified to provide that the Base Rent as of January 1, 2010 shall be $100,118.33  per month subject to adjustment for actual 2009 operating expenses as provided in Section 6.

5.   The adjustment provided for in Section 3.4 of the Lease as modified by Section 5 of Amendment #1 is eliminated in its entirety, effective for periods on or after January 1, 2010.

6.   Tenant shall remain responsible for 100% of increases over Base Year Expenses in Utilities, operating charges, insurance and real estate taxes for all periods on or after January 1, 2010.  Base Year Expenses shall be modified for periods on and after January 1, 2010 to actual Utilities, operating charges, insurance and real estate taxes for calendar year 2009.  For purposes of Sections 2 and 4 above modified Base Year Expenses have been estimated at $9.52 per square foot.  Should actual Utilities, operating charges, insurance and real estate taxes for calendar year 2009 be more or less than $9.52 per square foot, Base Rent provided for in Section 2 above and monthly Base Rent provided for in Section 4 above shall be modified accordingly.  Such adjustment shall be determined on or before April 30, 2010.

7.   Section 3.2 of the Lease shall be modified to provide for annual increases of 2.75% on a Base Rent, net of expenses factor of $11.98 per square foot, beginning one year from the January 1, 2010 renewal commencement date.

8.    Section 3.4 of the Lease and Section 5 of Amendment #1 shall be deleted in their entirety for periods beginning on and after January 1, 2010.

9.   Section 18.18 of the Lease is deleted in its entirety.

10.   Section 2.4 of the Lease is replaced in its entirety by the following language:

“Early Termination Right.  Tenant may elect to terminate this Lease with respect to the entire Premises on December 31, 2012 by six (6) months prior written notice, if Tenant, in good faith, determines that the Premises are no longer physically suitable for its needs.  There shall be no penalty fee associated with such termination; however, Tenant shall be liable to Landlord for normal and reasonable restoration costs incurred by Landlord on account of damage to the Leased Premises, and for costs of any alterations needed to secure the surrendered space. These costs shall be paid by Tenant as Additional Rent, to be paid within 60 days after invoice therefore by Landlord.”

11.   Except as modified as provided in this Amendment all terms and conditions of the Lease as modified by Amendment #1 shall remain in full force and effect.

IN WITNESS WHEREOF, Landlord and Tenant have executed this Amendment #2 under seal on the day and year first above written.

TENANT:

ePlus

By:  /s/  Steven Mencarini                                          

Name:  Steven Mencarini                                                          

Title:  Senior Vice President                                                      

LANDLORD:

NORTON BUILDING 1, LLC

By:  /s/ Michael W. Scott                                               

Name:  Michael W. Scott

Title: Manager

EX-99.1

Contact:  Kleyton Parkhurst, SVP

 ePlus inc.

 investors@eplus.com

 703-984-8150

ePlus Reports Fiscal Year 2009 Financial Results

HERNDON, VA – June 17, 2009 – ePlus inc. (Nasdaq Global Market: PLUS), a leading provider of technology solutions, today announced financial results for its fiscal fourth quarter and full fiscal year ended March 31, 2009.  For the quarter, revenues totaled $134.2 million, a decrease of $53.0 million or 28.3%, as compared to $187.2 million in the fiscal fourth quarter of 2008.  Net earnings totaled $0.8 million, or $0.10 per diluted share, as compared to $2.7 million, or $0.32 per diluted share, in the fiscal fourth quarter of 2008.

For the year, revenues totaled $698.0 million, a decrease of $151.3 million or 17.8%, as compared to $849.3 million last fiscal year.  Net earnings totaled $12.8 million, or $1.52 per diluted share, as compared to $16.4 million, or $1.95 per diluted share last fiscal year.  Results for the year ended March 31, 2009 include a pre-tax goodwill impairment charge of $4.6 million related to the Company’s technology sales business segment.  The impairment is a non-cash charge to earnings, and  did not affect the Company's liquidity, cash flows from operating activities or covenants.  Excluding this impairment charge, non-GAAP net earnings totaled $15.5 million or $1.84 per diluted share.

“IT spending has been very volatile in the past few months, and it is difficult to predict when IT spending will stabilize or increase,” said Phillip G. Norton, Chairman, President and Chief Executive Officer.  “We believe that ePlus has multiple advantages that will allow us to endure current economic challenges and be well positioned to capture growth when the economy rebounds.  These advantages include our strong balance sheet, a continued focus on advanced technologies that deliver high value to customers, software and supply chain processes that differentiate us from the competition, and leasing that facilitates customer spend to meet their IT needs within capital and budget constraints.  ePlus is helping our customers by providing real value in this marketplace.”

Fourth Quarter Results

Sales of product and services totaled $119.3 million, a decrease of $47.7 million or 28.6%, as compared to $167.0 million in the fiscal fourth quarter of 2008.  The decline in revenue was primarily attributable to the economic downturn, which led many customers to defer investments in technology equipment.  The gross margin percentage improved slightly to 13.1%, as compared to the same quarter last year.

Revenues generated from the combination of lease revenues, sales of leased equipment, fee and other income totaled $14.8 million, a decrease of  $5.3 million or 26.5%, as compared to $20.2 million in the fiscal fourth quarter of 2008.  This decline was largely a result of the Company’s decision to sell more of its leases in the prior year period, as part of a risk mitigation process conducted to diversify the portfolio by customer, equipment type and residual value.  As a result of fewer leases in the Company’s portfolio in the fiscal year, lease revenues decreased 11.7% to $10.3 million this quarter, representing approximately 8% of the total revenue mix.

Selling, general and administrative expenses, which includes professional and other fees, salaries and benefits, and general and administrative expenses, totaled $23.4 million, a decrease of $2.1 million or 8.1%, as compared to $25.4 million in the fiscal fourth quarter of 2008.  The decrease was primarily related to lower professional and other fees, as well as the Company’s increased focus on controlling spending, efforts to improve productivity and a reduction in depreciation resulting from a smaller portfolio of leases.  Salaries and benefits expenses increased due to the establishment of a telesales unit earlier this year and the employment of several former consultants as professional services staff.

Interest and financing costs totaling $1.5 million were unchanged from the fiscal fourth quarter of 2008.  Non-recourse notes payable totaled $85.0 million at March 31, 2009, a decrease of 9.4%, as compared to $93.8 million at March 31, 2008.  ePlus is not directly liable for its non-recourse debt, except under certain limited circumstances, as the loans are secured by equipment and assigned lease payments, which collateralizes the customers’ obligations.

As of March 31, 2009, cash and cash equivalents totaled $107.8 million.  At March 31, 2009, shareholders’ equity was $174.5 million and book value totaled $21.57 per share, compared to shareholders’ equity of $163.7 million and book value of $19.89 per share at March 31, 2008.

During the quarter, ePlus invested $1.4 million to repurchase an additional 133,791 shares of its common stock at an average cost of $10.64 per share  For the full year ended March 31, 2009, ePlus repurchased 436,664 shares of its outstanding common stock at an average cost of $9.95 per share for a total purchase price of $4.3 million.

Full Year Results

Sales of product and services totaled $636.1 million, a decrease of $95.5 million or 13.1%, as compared to $731.7 million last fiscal year.  The decrease in revenue was primarily attributable to the economic downturn, which has led many customers to defer investments in technology equipment.  Gross margin percentage improved to 13.9% as compared 11.8% recorded the prior fiscal year.

Revenues generated from the combination of lease revenues, sales of leased equipment, fee and other income totaled $61.9 million, a decrease of $55.8 million or 47.4%, as compared to $117.7 million last fiscal year.  The decrease in sales of leased equipment, which totaled $45.5 million last fiscal year, represented nearly three-quarters of the overall decline in revenues.  This decline was largely a result of the Company’s decision to sell more of its leases in the prior fiscal year, as part of a risk mitigation process conducted to diversify the portfolio by customer, equipment type and residual value.

Selling, general and administrative expenses totaled $98.9 million, a decrease of $2.3 million or 2.3%, as compared to $101.2 million last fiscal year.  The decrease resulted from lower professional and other fees, in addition to slightly lower general and administrative expenses, which more than offset an increase in salaries and benefits.  Salaries and benefits expense increased $4.1 million or 5.7% primarily due to staff additions the Company made earlier this year to support its long-term growth plans.  Professional and other fees decreased $5.7 million or 44.1% from heightened expense levels incurred last year from delayed SEC filings and other legal fees.

For the 2009 fiscal year, interest and financing costs declined 28.5%, to $5.8 million from $8.1 million recorded the prior fiscal year, as a result of lower overall non-recourse debt.

Percentage changes stated throughout this press release are calculated on rounded numbers from the Company’s financial statements (which are stated in thousands of dollars), not on the rounded numbers used herein.  Investors are encouraged to read the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2009.  Copies are available via the Company’s Web site at:  http://www.eplus.com, via the SEC’s website at: http://www.sec.gov, or by contacting the Company.

Conference Call Information

The Company will host a conference call at 11:00 a.m. Eastern on Thursday, June 18. To participate in the call, please dial 877-856-1960 (international participants may dial 719-325-4784) and reference access code 8754140.  A live webcast will be available via the Company’s investor relations Web site at: www.eplus.com.

A replay of the teleconference will be accessible through midnight Sunday, June 28th.  To access the replay, please call 719-457-0820 and reference access code 8754140.  The webcast will also remain available for replay via the Company’s investor relations Web site.

Use of Non-GAAP Financial Information

In this release, ePlus discloses non-GAAP measures of net earnings and earnings per share showing the effect of the goodwill impairment charge.  A “non-GAAP financial measure” is a numerical measure of a company’s historical or future financial performance, financial position or cash flows that excludes amounts, or is subject to adjustments that have the effect of excluding amounts, that are included in the most directly comparable measure calculated and presented in accordance with GAAP in the statement of income, balance sheet or statement of cash flows of the company; or includes amounts, or is subject to adjustments that have the effect of including amounts, that are excluded from the most directly comparable measure so calculated and presented.  ePlus uses the financial measures that are included in this news release in its internal evaluation and management of its business.  Management believes that these measures and the information they provide are useful to investors because they permit investors to view the Company’s performance using the same tools that ePlus uses and to better evaluate the Company’s ongoing business performance.  These measures should not be considered an alternative to measurements required by accounting principles generally accepted in the United States (GAAP), such as net income and earnings per share.  These non-GAAP measures are unlikely to be comparable to non-GAAP information provided by other companies. In accordance with SEC regulations, reconciliation of the ePlus GAAP information to the pro forma information is provided in the table below.  We will also make available on the investor relations page of our web site at www.eplus.com this press release, and a reconciliation of the difference between the GAAP and non-GAAP financial measures.

Forward-Looking Statements

Statements in this press release that are not historical facts 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 and Exchange Act of 1934, as amended.  Actual and anticipated future results may vary materially due to certain risks and uncertainties, including, without limitation, possible adverse effects resulting from the recent financial crisis in the credit markets and general slowdown of the U.S. economy such as our current and potential customers delaying or reducing technology purchases, increasing credit risk associated with our customers and vendors, reduction of vendor incentive programs, the possibility of additional goodwill impairment charges, and restrictions on our access to capital necessary to fund our operations; the demand for and acceptance of, our products and services; our ability to adapt our services to meet changes in market developments; the impact of competition in our markets; the possibility of defects in our products or catalog content data; our ability to hire and retain sufficient personnel; our ability to protect our intellectual property; a decrease in the capital spending budgets of our customers; our ability to consummate and integrate acquisitions; the creditworthiness of our customers; our ability to raise capital and obtain non-recourse financing for our transactions; our ability to reserve adequately for credit losses; and other risks or uncertainties detailed in our reports filed with the Securities and Exchange Commission.  All information set forth in this press release is current as of the date of this release and ePlus undertakes no duty or obligation to update this information.

About ePlus inc.

ePlus is a leading provider of technology solutions.  ePlus enables organizations to optimize their IT infrastructure and supply chain processes by delivering world-class IT products from top manufacturers, professional services, flexible lease financing, proprietary software, and patented business methods.  Founded in 1990, ePlus has more than 650 associates in 20+ locations serving more than 2,500 customers.  The Company is headquartered in Herndon, VA.  For more information, visit http://www.eplus.com, call 888-482-1122, or email info@eplus.com.

ePlus® and ePlus products referenced herein are either registered trademarks or trademarks of ePlus inc. in the United States and/or other countries

ePlus inc. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
	As of	As of
	March 31, 2009	March 31, 2008
ASSETS	(in thousands)
Cash and cash equivalents	$107,788	$58,423
Accounts receivable—net	82,734	109,706
Notes receivable	2,632	726
Inventories—net	9,739	9,192
Investment in leases and leased equipment—net	119,256	157,382
Property and equipment—net	3,313	4,680
Other assets	16,809	13,514
Goodwill	21,601	26,125
TOTAL ASSETS	$363,872	$379,748
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Accounts payable—equipment	$2,904	$6,744
Accounts payable—trade	18,833	22,016
Accounts payable—floor plan	45,127	55,634
Salaries and commissions payable	4,586	4,789
Accrued expenses and other liabilities	29,002	30,372
Income taxes payable	912	-
Recourse notes payable	102	-
Non-recourse notes payable	84,977	93,814
Deferred tax liability	2,957	2,677
Total Liabilities	189,400	216,046
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY
Preferred stock, $.01 par value; 2,000,000 shares authorized; none issued or outstanding	-	-
Common stock, $.01 par value; 25,000,000 shares authorized; 11,504,167 issued and 8,088,513 outstanding at March 31, 2009 and 11,210,731 issued and 8,231,741 outstanding at March 31, 2008	115	112
Additional paid-in capital	80,055	77,287
Treasury stock, at cost, 3,415,654 and 2,978,990 shares, respectively	(37,229)	(32,884)
Retained earnings	131,452	118,623
Accumulated other comprehensive income—foreign currency translation adjustment	79	564
Total Stockholders' Equity	174,472	163,702
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$363,872	$379,748

ePlus inc. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
	Three Months Ended		Year Ended
	March 31,		March 31,
	2009	2008	2009	2008
	(in thousands, except for per share amounts)
REVENUES
Sales of product and services	$119,335	$167,026	$636,142	$731,654
Sales of leased equipment	1,186	4,949	4,633	45,493
	120,521	171,975	640,775	777,147
Lease revenues	10,286	11,649	44,483	55,459
Fee and other income	3,352	3,575	12,769	16,699
TOTAL REVENUES	134,159	187,199	698,027	849,305
COSTS AND EXPENSES
Cost of sales, product and services	103,680	145,191	548,035	645,393
Cost of leased equipment	1,113	4,783	4,373	43,702
	104,793	149,974	552,408	689,095
Direct lease costs	2,957	4,602	14,220	20,955
Professional and other fees	1,269	3,239	7,199	12,889
Salaries and benefits	18,671	18,314	76,380	72,285
General and administrative expenses	3,424	3,881	15,320	16,016
Impairment of goodwill	-	-	4,644	-
Interest and financing costs	1,501	1,533	5,808	8,123
TOTAL COSTS AND EXPENSES	132,615	181,543	675,979	819,363
EARNINGS BEFORE PROVISION FOR INCOME TAXES	1,544	5,656	22,048	29,942
PROVISION FOR INCOME TAXES	790	2,911	9,219	13,582
NET EARNINGS	$754	$2,745	$12,829	$16,360
NET EARNINGS PER COMMON SHARE - BASIC	$0.10	$0.34	$1.56	$1.99
NET EARNINGS PER COMMON SHARE - DILUTED	$0.10	$0.32	$1.52	$1.95
WEIGHTED AVERAGE SHARES OUTSTANDING - BASIC	8,059,518	8,231,741	8,219,318	8,231,741
WEIGHTED AVERAGE SHARES OUTSTANDING - DILUTED	8,256,718	8,396,712	8,453,333	8,378,683

RECONCILIATION OF NON-GAAP INFORMATION
		Year Ended
		March 31,
		2009	2008 [2]
	(in thousands, except per share amounts)
GAAP earnings before provision for income taxes as reported		$22,048	$29,942
Plus: Impairment of goodwill		4,644	-
Non-GAAP Earnings before provision for income taxes		26,692	29,942
Non-GAAP Provision for income taxes [1]		11,161	13,582
Non-GAAP proforma net earnings		$15,531	$16,360
GAAP net earnings per common share-diluted		$1.52	$1.95
Non-GAAP proforma net earnings per common share-diluted		$1.84	$1.95
WEIGHTED AVERAGE SHARES OUTSTANDING - BASIC		8,219,318	8,231,741
WEIGHTED AVERAGE SHARES OUTSTANDING - DILUTED		8,453,333	8,378,683
[1] Non-GAAP tax rate is calculated at the same tax rate as GAAP earnings
[2] Figures in the 2008 column are GAAP and provided for comparative purposes.