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 September 30, 2015

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

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 and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes ☒   No ☐

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

Large accelerated filer ☐	Accelerated filer ☒
Non-accelerated filer ☐  (Do not check if a smaller reporting company)	Smaller reporting company ☐

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 October 30, 2015 was 7,482,008

TABLE OF CONTENTS

ePlus inc. AND SUBSIDIARIES

Part I. Financial Information:
Item 1.	Financial Statements
	Unaudited Condensed Consolidated Balance Sheets as of September 30, 2015 and March 31, 2015	5
	Unaudited Condensed Consolidated Statements of Operations for the Three and Six Months ended September 30, 2015 and 2014	6
	Unaudited Condensed Consolidated Statements of Comprehensive Income for the Three and Six Months ended September 30, 2015 and 2014	7
	Unaudited Condensed Consolidated Statements of Cash Flows for the Six Months ended September 30, 2015 and 2014	8
	Unaudited Condensed Consolidated Statements of Stockholders’ Equity for the Six Months ended September 30, 2015	10
	Notes to Unaudited Condensed Consolidated Financial Statements	11
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	24
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	38
Item 4.	Controls and Procedures	38
Part II. Other Information:
Item 1.	Legal Proceedings	39
Item 1A.	Risk Factors	39
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	40
Item 3.	Defaults Upon Senior Securities	40
Item 4.	Mine Safety Disclosures	40
Item 5.	Other Information	40
Item 6.	Exhibits	41
Signatures & Certifications		42

2

CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains certain statements that are, or may be deemed to be, “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, or “Exchange Act,” and are made in reliance upon the protections provided by such acts for forward-looking statements. Such statements are not based on historical fact, but are based upon numerous assumptions about future conditions that may not occur. Forward-looking statements are generally identifiable by use of forward-looking words such as “may,” “should,” “would,” “intend,” “estimate,” “will,” “potential,” “possible,” “could,” “believe,” “expect,” “intend,” “plan,” “anticipate,” “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:

· uncertainty and volatility in the global economy and financial markets;

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

· the creditworthiness of our customers and our ability to reserve adequately for credit losses;

· reduction of vendor incentives provided to us;

· we offer a comprehensive set of solutions— integrating information technology (IT) product sales, third-party software assurance and maintenance, our advanced professional and managed services, our proprietary software, and financing, and may encounter some of the challenges, risks, difficulties and uncertainties frequently faced by similar companies, such as:

o managing a diverse product set of solutions in highly competitive markets with a number of key vendors;

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

o adapting to meet changes in markets and competitive developments;

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

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

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

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

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

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

· future growth rates in our core businesses;

· failure to comply with public sector contracts or applicable laws;

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

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

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

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

· our contracts may not be adequate to protect us and our professional and liability insurance policies coverage may be insufficient to cover a claim;

· disruptions in our IT systems and data and audio communication networks;

· our ability to secure our and our customers’ electronic and other confidential information, and remain secure during a cyber-security attack;

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

3

· our ability to realize our investment in leased equipment;

· our ability to successfully integrate acquired businesses;

· the possibility of goodwill impairment charges in the future;

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

· exposure to changes in, interpretations of, or enforcement trends in legislation; and

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

We cannot be certain that our business strategy will be successful or that we will successfully address these and other challenges, risks and uncertainties. For a further list and description of various risks, relevant factors and uncertainties that could cause future results or events to differ materially from those expressed or implied in our forward-looking statements, see the Item 1A, “Risk Factors” and Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections contained elsewhere in this report, as well as other reports that we file with the Securities and Exchange Commission (“SEC”).

4

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

ePlus inc. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

	As of September 30, 2015			As of March 31, 2015
ASSETS	(in thousands, except per share data)
Current assets:
Cash and cash equivalents	$	62,842		$	76,175
Accounts receivable—trade, net		259,089			218,458
Accounts receivable—other, net		31,740			31,345
Inventories—net		18,773			19,835
Financing receivables—net, current		64,268			66,909
Deferred costs		9,087			20,499
Deferred tax assets		3,643			3,643
Other current assets		4,718			7,413
Total current assets		454,160			444,277
Financing receivables and operating leases—net		87,847			76,991
Property, equipment and other assets		8,969			9,480
Goodwill and other intangible assets		39,511			40,798
TOTAL ASSETS	$	590,487		$	571,546
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Current liabilities:
Accounts payable—equipment	$	11,369		$	20,330
Accounts payable—trade		46,707			46,090
Accounts payable—floor plan		127,053			99,418
Salaries and commissions payable		13,994			14,860
Deferred revenue		20,665			34,363
Recourse notes payable—current		1,204			889
Non-recourse notes payable—current		28,137			28,560
Other current liabilities		16,476			13,575
Total current liabilities		265,605			258,085
Recourse notes payable—long term		2,815			2,801
Non-recourse notes payable—long term		10,510			24,314
Deferred tax liability—long term		3,271			3,271
Other liabilities		3,277			3,813
TOTAL LIABILITIES		285,478			292,284
COMMITMENTS AND CONTINGENCIES  (Note 7)
STOCKHOLDERS' EQUITY
Preferred stock, $.01 per share par value; 2,000 shares authorized; none issued or outstanding		-			-
Common stock, $.01 per share par value; 25,000 shares authorized; 13,237 issued and 7,482 outstanding at September 30, 2015 and 13,114 issued and 7,389 outstanding at March 31, 2015		132			131
Additional paid-in capital		114,934			111,072
Treasury stock, at cost, 5,755 and 5,725 shares at September 30, 2015 and March 31, 2015, respectively		(120,654	)		(118,179	)
Retained earnings		310,970			286,477
Accumulated other comprehensive income—foreign currency translation adjustment		(373	)		(239	)
Total Stockholders' Equity		305,009			279,262
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	590,487		$	571,546

See Notes to Unaudited Condensed Consolidated Financial Statements.

5

ePlus inc. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

	Three Months Ended September 30,				Six Months Ended September 30,
	2015		2014		2015		2014
	(in thousands, except per share data)
Net sales	$	336,286	$	297,472	$	606,152	$	569,776
Cost of sales		264,365		233,548		475,101		449,413
Gross profit		71,921		63,924		131,051		120,363
Professional and other fees		1,513		1,577		3,031		3,410
Salaries and benefits		35,740		34,252		70,954		67,199
General and administrative expenses		7,585		7,158		14,364		13,431
Interest and financing costs		422		611		975		1,255
Operating expenses		45,260		43,598		89,324		85,295
Operating income		26,661		20,326		41,727		35,068
Other income		-		-		-		1,434
Earnings before tax		26,661		20,326		41,727		36,502
Provision for income taxes		10,982		8,374		17,234		15,073
Net earnings	$	15,679	$	11,952	$	24,493	$	21,429
Net earnings per common share—basic	$	2.16	$	1.63	$	3.38	$	2.88
Net earnings per common share—diluted	$	2.15	$	1.63	$	3.35	$	2.86
Weighted average common shares outstanding—basic		7,274		7,320		7,249		7,412
Weighted average common shares outstanding—diluted		7,297		7,345		7,310		7,461

See Notes to Unaudited Condensed Consolidated Financial Statements.

6

ePlus inc. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

	Three Months Ended September 30,						Six Months Ended September 30,
	2015			2014			2015			2014
	(amounts in thousands)
NET EARNINGS	$	15,679		$	11,952		$	24,493		$	21,429
OTHER COMPREHENSIVE INCOME, NET OF TAX:
Foreign currency translation adjustments		(177	)		(160	)		(134	)		(44	)
Other comprehensive income (loss)		(177	)		(160	)		(134	)		(44	)
TOTAL COMPREHENSIVE INCOME	$	15,502		$	11,792		$	24,359		$	21,385

See Notes to Unaudited Condensed Consolidated Financial Statements.

7

ePlus inc. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

	Six Months Ended September 30,
	2015			2014
	(in thousands)
Cash Flows From Operating Activities:
Net earnings	$	24,493		$	21,429
Adjustments to reconcile net earnings to net cash (used in) provided by operating activities:
Depreciation and amortization		8,503			7,631
Reserve for credit losses, inventory obsolescence and sales returns		(123	)		245
Share-based compensation expense		2,711			2,247
Excess tax benefit from share-based compensation		(1,151	)		(824	)
Payments from lessees directly to lenders—operating leases		(2,560	)		(4,445	)
Gain on disposal of property, equipment and operating lease equipment		(517	)		(2,120	)
Gain on sale of financing receivables		(3,991	)		(3,179	)
Gain on settlement		-			(1,434	)
Other		6			50
Changes in:
Accounts receivable—trade		(40,015	)		13,236
Accounts receivable—other		(2,270	)		(854	)
Inventories		538			(7,006	)
Financing receivables		(1,171	)		(14,187	)
Deferred costs, other intangible assets and other assets		11,035			1,333
Accounts payable—equipment		258			(162	)
Accounts payable—trade		(7,442	)		(29,315	)
Salaries and commissions payable, deferred revenue and other liabilities		(10,964	)		6,360
Net cash used in operating activities	$	(22,660	)	$	(10,995	)
Cash Flows From Investing Activities:
Maturities of supplemental benefit plan investments	$	-		$	2,544
Proceeds from sale of property, equipment and operating lease equipment		3,199			5,751
Purchases of property, equipment and operating lease equipment		(15,618	)		(1,919	)
Purchases of assets to be leased or financed		(9,363	)		(10,000	)
Issuance of financing receivables		(67,623	)		(51,163	)
Repayments of financing receivables		35,460			28,082
Proceeds from sale of financing receivables		26,021			12,341
Cash used in acquisitions, net of cash acquired		-			(7,818	)
Net cash used in investing activities	$	(27,924	)	$	(22,182	)

8

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - continued

	Six Months Ended September 30,
	2015			2014
	(in thousands)
Cash Flows From Financing Activities:
Borrowings of non-recourse and recourse notes payable	$	11,239		$	30,104
Repayments of non-recourse and recourse notes payable		(186	)		(802	)
Repurchase of common stock		(2,475	)		(34,782	)
Dividends paid		(80	)		(90	)
Excess tax benefit from share-based compensation		1,151			824
Net borrowings (repayments) on floor plan facility		27,635			20,694
Net cash provided by financing activities		37,284			15,948
Effect of exchange rate changes on cash		(33	)		(9	)
Net Decrease in Cash and Cash Equivalents		(13,333	)		(17,238	)
Cash and Cash Equivalents, Beginning of Period		76,175			80,179
Cash and Cash Equivalents, End of Period	$	62,842		$	62,941
Supplemental Disclosures of Cash Flow Information:
Cash paid for interest	$	50		$	128
Cash paid for income taxes	$	13,901		$	12,770
Schedule of Non-Cash Investing and Financing Activities:
Proceeds from sales of property, equipment and operating lease equipment	$	6,726		$	910
Purchase of property, equipment, and operating leases	$	(8,181	)	$	(335	)
Purchase of assets to be leased or financed included in accounts payable	$	(5,615	)	$	(18,578	)
Issuance of financing receivables	$	(76,876	)	$	-
Repayment of financing receivables	$	8,671		$	-
Proceeds from sale of financing receivables	$	58,520		$	47,213
Borrowing of recourse and nonrecourse notes payable	$	31,715		$	-
Repayments of non-recourse and recourse notes payable	$	(16,462	)	$	(19,171	)
Vesting of share-based compensation	$	7,687		$	6,407
Contingent consideration	$	-		$	1,960

See Notes to Unaudited Condensed Consolidated Financial Statements.

9

ePlus inc. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

	Common Stock					Additional Paid-In		Treasury			Retained		Accumulated Other Comprehensive
	Shares			Par Value		Capital		Stock			Earnings		Income			Total
	(in thousands)
Balance, April 1, 2015		7,389		$	131	$	111,072	$	(118,179	)	$	286,477	$	(239	)	$	279,262
Excess tax benefit of share- based compensation		-			-		1,151		-			-		-			1,151
Issuance of restricted stock awards		123			1		-		-			-		-			1
Share-based compensation		-			-		2,711		-			-		-			2,711
Repurchase of common stock		(30	)		-		-		(2,475	)		-		-			(2,475	)
Net earnings		-			-		-		-			24,493		-			24,493
Foreign currency translation adjustment		-			-		-		-			-		(134	)		(134	)
Balance, September 30, 2015		7,482		$	132	$	114,934	$	(120,654	)	$	310,970	$	(373	)	$	305,009

See Notes to Unaudited Condensed Consolidated Financial Statements.

10

ePlus inc. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION — Our company was founded in 1990 and is a Delaware corporation. ePlus inc. is sometimes referred to in this Quarterly Report on Form 10-Q as “we,” “our,” “us,” or “ePlus.” The unaudited condensed consolidated financial statements include the accounts of ePlus inc. and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.

INTERIM FINANCIAL STATEMENTS — The condensed consolidated financial statements for the three and six months ended September 30, 2015 and 2014 were prepared by us, without audit, 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 and six months ended September 30, 2015 and 2014 are not necessarily indicative of results that may be expected for any other interim period or for the full fiscal year ending March 31, 2016 or any other future period. These unaudited condensed consolidated financial statements do not include all disclosures required by the accounting principles generally accepted in the United States (“U.S. GAAP”) for annual financial statements. Our audited consolidated financial statements are contained in our annual report on Form 10-K for the year ended March 31, 2015 (“2015 Annual Report”), which should be read in conjunction with these interim condensed consolidated financial statements.

USE OF ESTIMATES — The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Estimates are used when accounting for items and matters including, but not limited to, revenue recognition, residual values, vendor consideration, lease classification, goodwill and intangibles, reserves for credit losses, inventory obsolescence, and the recognition and measurement of income tax assets and other provisions and contingencies. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results may differ from these estimates.

The notes to the consolidated financial statements contained in the 2015 Annual Report include additional discussion of the significant accounting policies and estimates used in the preparation of our consolidated financial statements. There have been no material changes to our significant accounting policies and estimates during the six months ended September 30, 2015.

CONCENTRATIONS OF RISK —A substantial portion of our sales of product and services are from sales of Cisco Systems, Hewlett-Packard, and NetApp products, which represented approximately 50%, 7% and 4%, and 50%, 8% and 4%, respectively, of our technology segment sales of product and services for the three and six months ended September 30, 2015, as compared to 56%, 8%, and 6%, and 52%, 8%, and 6%, respectively, of our technology segment sales of product and services for the three and six months ended September 30, 2014. Any changes in our vendors’ ability to provide products could have a material adverse effect on our business, results of operations and financial condition.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS NOT YET ADOPTED — In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers, which will supersede all current US GAAP on this topic. The principle of ASU 2014-09 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which entity expects to be entitled in exchange for those goods or services. In August 2015, the FASB deferred the effective date of this standard by one year. Including the one-year deferral, the new guidance becomes effective for us in our quarter ending June 30, 2018, and early adoption is permitted for us in our quarter ending June 30, 2017. The standard can be applied either retrospectively to each period presented or as a cumulative-effect adjustment as of the date of adoption. We are currently evaluating the impact it will have on our financial statements and disclosures and have not yet selected our planned transition approach.

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2. FINANCING RECEIVABLES AND OPERATING LEASES

Our financing receivables and operating leases consist of assets that we financed for our customers, which we manage as a portfolio of investments. Equipment financed for our customers are accounted for as investments in direct financing, sales-type or operating leases in accordance with Accounting Standards Codification (“ASC”) Topic 840, Leases. We also finance third-party software, maintenance, and services for our customers, which are classified as notes receivables. Our notes receivables are interest bearing and are often due over a period of time that corresponds with the terms of the leased products.

FINANCING RECEIVABLES—NET

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

September 30, 2015	Notes Receivables			Lease-Related Receivables			Total Financing Receivables
Minimum payments	$	61,555		$	67,238		$	128,793
Estimated unguaranteed residual value (1)		-			9,287			9,287
Initial direct costs, net of amortization (2)		431			536			967
Unearned income		-			(5,403	)		(5,403	)
Reserve for credit losses (3)		(3,584	)		(848	)		(4,432	)
Total, net	$	58,402		$	70,810		$	129,212
Reported as:
Current	$	30,811		$	33,457		$	64,268
Long-term		27,591			37,353			64,944
Total, net	$	58,402		$	70,810		$	129,212

(1) Includes estimated unguaranteed residual values of $4,216 thousand for direct financing leases, which have been sold and accounted for as sales under ASC Topic, Transfers and Servicing.

(2) Initial direct costs are shown net of amortization of $710 thousand.

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

March 31, 2015	Notes Receivables			Lease-Related Receivables			Total Financing Receivables
Minimum payments	$	59,943		$	66,415		$	126,358
Estimated unguaranteed residual value (1)		-			8,376			8,376
Initial direct costs, net of amortization (2)		429			495			924
Unearned income		-			(5,233	)		(5,233	)
Reserve for credit losses (3)		(3,573	)		(881	)		(4,454	)
Total, net	$	56,799		$	69,172		$	125,971
Reported as:
Current	$	33,484		$	33,425		$	66,909
Long-term		23,315			35,747			59,062
Total, net	$	56,799		$	69,172		$	125,971

(1) Includes estimated unguaranteed residual values of $3,977 thousand for direct financing leases which have been sold and accounted for as sales under ASC Topic, Transfers and Servicing.

(2) Initial direct costs are shown net of amortization of $647 thousand.

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

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OPERATING LEASES—NET

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

	September 30, 2015			March 31, 2015
Cost of equipment under operating leases	$	41,373		$	36,283
Accumulated depreciation		(18,470	)		(18,354	)
Investment in operating lease equipment—net (1)	$	22,903		$	17,929

(1) These totals include estimated unguaranteed residual values of $4,409 thousand and $4,340 thousand as of September 30, 2015 and March 31, 2015, respectively.

TRANSFERS OF FINANCIAL ASSETS

We enter into arrangements to transfer the contractual payments due under financing receivables and operating leases, which are accounted for as sales or secured borrowings in accordance with ASC Topic, Transfers and Servicing. For transfers accounted for as a secured borrowing, the corresponding investments serve as collateral for non-recourse notes payable. As of September 30, 2015 and March 31, 2015, we had financing receivables and operating leases of $46.5 million and $61.9 million, respectively, which were collateral for non-recourse notes payable. See Note 6, “Notes Payable and Credit Facility.”

For transfers accounted for as sales, we derecognize the carrying value of the asset transferred and recognize a net gain or loss on the sale, which is presented within net sales in the unaudited condensed consolidated statement of operations. During the three months ended September 30, 2015 and 2014, we recognized net gains of $2.5 million and $0.9 million, respectively. The fair value of assets received from these sales was $84.4 million and $37.6 million for the three months ended September 30, 2015 and 2014, respectively. During the six months ended September 30, 2015 and 2014, we recognized net gains of $4.0 million and $3.2 million, respectively. The fair value of assets received from these sales was $108.7 million and $93.8 million for the six months ended September 30, 2015 and 2014, respectively.

3. GOODWILL AND OTHER INTANGIBLE ASSETS

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

	September 30, 2015							March 31, 2015
	Gross Carrying Amount		Accumulated Amortization / Impairment Loss			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization / Impairment Loss			Net Carrying Amount
Goodwill	$	42,785	$	(8,673	)	$	34,112	$	42,785	$	(8,673	)	$	34,112
Customer relationships & other intangibles		11,778		(7,389	)		4,389		12,005		(6,560	)		5,445
Capitalized software development		2,693		(1,683	)		1,010		2,693		(1,452	)		1,241
Total	$	57,256	$	(17,745	)	$	39,511	$	57,483	$	(16,685	)	$	40,798

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. Customer relationships and capitalized software development costs are amortized over an estimated useful life, which is generally between 3 to 6 years.

We perform our goodwill impairment test annually during our third quarter of each year. For the year ended March 31, 2015, we performed a qualitative assessment and concluded that the fair value of our reporting units were, more likely than not, greater than their respective carrying amounts.

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All of our goodwill as of September 30, 2015 and March 31, 2015 is related to our technology segment. The following table summarizes the amount of goodwill allocated to our reporting units (in thousands):

Reporting Unit	September 30, 2015		March 31, 2015
Technology	$	33,023	$	33,023
Software Document Management		1,089		1,089

OTHER INTANGIBLE ASSETS

Total amortization expense for other intangible assets was $0.7 million and $0.6 million for the three months and $1.3 and $1.0 million for the six months ended September 30, 2015 and 2014, respectively.

4. RESERVES FOR CREDIT LOSSES

Activity in our reserves for credit losses for the six months ended September 30, 2015 and 2014 were as follows (in thousands):

	Accounts Receivable			Notes  Receivable		Lease-Related  Receivables			Total
Balance April 1, 2015	$	1,169		$	3,573	$	881		$	5,623
Provision for credit losses		46			11		(33	)		24
Write-offs and other		(119	)		-		-			(119	)
Balance September 30, 2015	$	1,096		$	3,584	$	848		$	5,528
	Accounts Receivable			Notes Receivable		Lease-Related  Receivables			Total
Balance April 1, 2014	$	1,364		$	3,364	$	1,024		$	5,752
Provision for credit losses		(99	)		309		11			221
Write-offs and other		(122	)		-		(31	)		(153	)
Balance September 30, 2014	$	1,143		$	3,673	$	1,004		$	5,820

Our reserves for credit losses and minimum payments associated with our notes receivables and lease-related receivables disaggregated on the basis of our impairment method were as follows (in thousands):

	September 30, 2015				March 31, 2015
	Notes Receivable		Lease- Related Receivables		Notes Receivable		Lease- Related Receivables
Reserves for credit losses:
Ending balance: collectively evaluated for impairment	$	384	$	725	$	440	$	740
Ending balance: individually evaluated for impairment		3,200		123		3,133		141
Ending balance	$	3,584	$	848	$	3,573	$	881
Minimum payments:
Ending balance: collectively evaluated for impairment	$	58,035	$	67,096	$	56,525	$	66,255
Ending balance: individually evaluated for impairment		3,520		142		3,418		160
Ending balance	$	61,555	$	67,238	$	59,943	$	66,415

The net credit exposure for the balance evaluated individually for impairment as of September 30, 2015 was $3.7 million, $3.2 million of which is related to one customer. During fiscal year 2012, we began selling and financing various products and services to a large law firm, which filed for bankruptcy in May 2012. As of September 30, 2015, we had $3.2 million of notes and lease-related receivables from this customer and total reserves for credit losses of $3.2 million, which represented our estimated probable loss. As of March 31, 2015, we had $3.2 million of notes and lease-related receivables from this customer and total reserves for credit losses of $3.2 million. The note and lease receivables associated with this customer are on non-accrual status.

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The age of the recorded minimum lease payments and net credit exposure associated with our investment in direct financing and sales-type leases that are past due disaggregated based on our internally assigned credit quality rating (“CQR”) were as follows as of September 30, 2015 and March 31, 2015 (in thousands):

	31-60 Days Past Due		61-90 Days Past Due		Greater than 90 Days Past Due		Total Past Due		Current		Unbilled Minimum Lease Payments		Total Minimum Lease Payments		Unearned Income			Non- Recourse Notes Payable			Net Credit Exposure
September 30, 2015
High CQR	$	131	$	83	$	186	$	400	$	193	$	47,143	$	47,736	$	(2,744	)	$	(10,664	)	$	34,328
Average CQR		3		-		102		105		64		19,191		19,360		(1,454	)		(6,077	)		11,829
Low CQR		-		-		142		142		-		-		142		(19	)		-			123
Total	$	134	$	83	$	430	$	647	$	257	$	66,334	$	67,238	$	(4,217	)	$	(16,741	)	$	46,280
March 31, 2015
High CQR	$	70	$	185	$	133	$	388	$	430	$	41,213	$	42,031	$	(2,340	)	$	(16,561	)	$	23,130
Average CQR		15		68		19		102		75		24,047		24,224		(1,742	)		(9,397	)		13,085
Low CQR		-		-		-		-		-		160		160		(19	)		-			141
Total	$	85	$	253	$	152	$	490	$	505	$	65,420	$	66,415	$	(4,101	)	$	(25,958	)	$	36,356

The age of the recorded notes receivable balance disaggregated based on our internally assigned CQR were as follows as September 30, 2015 and March 31, 2015 (in thousands):

	31-60 Days Past Due		61-90 Days Past Due		Greater than 90 Days Past Due		Total Past Due		Current		Unbilled Notes Receivable		Total Notes Receivable		Non- Recourse Notes Payable			Net Credit Exposure
September 30, 2015
High CQR	$	-	$	5	$	174	$	179	$	34	$	44,843	$	45,056	$	(25,890	)	$	19,166
Average CQR		6		6		118		130		202		12,647		12,979		(7,763	)		5,216
Low CQR		-		-		3,520		3,520		-		-		3,520		-			3,520
Total	$	6	$	11	$	3,812	$	3,829	$	236	$	57,490	$	61,555	$	(33,653	)	$	27,902
March 31, 2015
High CQR	$	338	$	260	$	161	$	759	$	2,455	$	35,996	$	39,210	$	(18,255	)	$	20,955
Average CQR		57		-		-		57		376		16,882		17,315		(11,665	)		5,650
Low CQR		-		-		656		656		-		2,762		3,418		-			3,418
Total	$	395	$	260	$	817	$	1,472	$	2,831	$	55,640	$	59,943	$	(29,920	)	$	30,023

We estimate losses on our net credit exposure to be between 0% - 5% for customers with highest CQR, as these customers are investment grade or the equivalent of investment grade. We estimate losses on our net credit exposure to be between 2% - 15% for customers with average CQR, and between 15% - 100% for customers with low CQR, which includes customers in bankruptcy.

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5. PROPERTY, EQUIPMENT, OTHER ASSETS AND LIABILITIES

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

	September 30, 2015		March 31, 2015
Other current assets:
Deposits & funds held in escrow	$	916	$	4,281
Prepaid assets		3,120		2,652
Other		682		480
Total other current assets	$	4,718	$	7,413
Other assets:
Deferred costs	$	2,302	$	2,308
Property and equipment, net		5,957		6,127
Other		710		1,045
Total other assets - long term	$	8,969	$	9,480
	September 30, 2015		March 31, 2015
Other current liabilities:
Accrued expenses	$	6,590	$	5,302
Deferred compensation		-		222
Other		9,886		8,051
Total other current liabilities	$	16,476	$	13,575
Other liabilities:
Deferred revenue	$	2,382	$	2,923
Other		895		890
Total other liabilities - long term	$	3,277	$	3,813

6. NOTES PAYABLE AND CREDIT FACILITY

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

	September 30, 2015		March 31, 2015
Recourse notes payable with interest rates ranging from 2.24% and 4.13% at September 30, 2015 and ranging from 2.24% and 4.13% at March 31, 2015.
Current	$	1,204	$	889
Long-term		2,815		2,801
Total recourse notes payable	$	4,019	$	3,690
Non-recourse notes payable secured by financing receivables and investments in operating leases with interest rates ranging from 1.70% to 7.50% at September 30, 2015 and ranging from 1.70% to 10.00% as of March 31, 2015.
Current	$	28,137	$	28,560
Long-term		10,510		24,314
Total non-recourse notes payable	$	38,647	$	52,874

Principal and interest payments on the non-recourse notes payable are generally due monthly in amounts that are approximately equal to the total payments due from the customer under the leases or notes receivable that collateralize the notes payable. The weighted average interest rate for our non-recourse notes payable was 3.18% and 3.23%, as of September 30, 2015 and March 31, 2015, respectively. The weighted average interest rate for our recourse notes payable was 3.21% and 3.19%, as of September 30, 2015 and March 31, 2015, respectively. Under recourse financing, in the event of a default by a customer, the lender has recourse to the customer, the assets serving as collateral, and us. Under non-recourse financing, in the event of a default by a customer, the lender generally only has recourse against the customer, and the assets serving as collateral, but not against us.

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In May 2014, we entered into an agreement to repurchase the rights, title, and interest to payments due under a financing agreement. This financing agreement was previously assigned to a third party financial institution and accounted for as a secured borrowing. In conjunction with the repurchase agreement, we recognized a gain of $1.4 million in the six months ended September 30, 2014, which is presented within other income in our unaudited condensed consolidated statement of operations.

Our technology segment, through our subsidiary ePlus Technology, inc., finances its operations with funds generated from operations, and with a credit facility with GE Commercial Distribution Finance Corporation (“GECDF”). This facility provides short-term capital for our technology segment. There are two components of the GECDF credit facility: (1) a floor plan component and (2) an accounts receivable component. Under the floor plan component, we had outstanding balances of $127.1 million and $99.4 million as of September 30, 2015 and March 31, 2015, respectively. Under the accounts receivable component, we had no outstanding balances as of September 30, 2015 and March 31, 2015. As of September 30, 2015, the facility agreement had an aggregate limit of the two components of $250 million, and the accounts receivable component had a sub-limit of $30 million, which bears interest assessed at a rate of the One Month LIBOR plus two and one half percent.

The credit facility has full recourse to ePlus Technology, inc. and its subsidiary, ePlus Technology Services, inc., is secured by a blanket lien against all their assets, such as receivables and inventory. Availability under the facility may be limited by the asset value of equipment we purchase or accounts receivable, and may be further limited by certain covenants and terms and conditions of the facility. These covenants include but are not limited to a minimum excess availability of the facility and minimum earnings before interest, taxes, depreciation and amortization (“EBITDA”) of ePlus Technology, inc. and its subsidiary. We were in compliance with these covenants as of September 30, 2015. In addition, the facility restricts the ability of ePlus Technology, inc. and its subsidiaryto transfer funds to its affiliates in the form of dividends, loans or advances with certain exceptions for dividends to ePlus inc. The facility also requires that financial statements of ePlus Technology, inc. and its subsidiary be provided within 45 days of each quarter and 90 days of each fiscal year end and also includes that other operational reports be provided on a regular basis. Either party may terminate with 90 days’ advance notice. We are not, and do not believe that we are reasonably likely to be, in breach of the GECDF credit facility. In addition, we do not believe that the covenants of the GECDF credit facility materially limit our ability to undertake financing. In this regard, the covenants apply only to our subsidiary, ePlus Technology, inc. and its subsidiary.This credit facility is secured by the assets of ePlus Technology, inc. and its subsidiary, ePlus Technology Services, inc. and the guaranty as described below.

The facility provided by GECDF requires a guaranty of $10.5 million by ePlus inc. The guaranty requires ePlus inc. to deliver its annual audited financial statements by certain dates. We have delivered the annual audited financial statements for the year ended March 31, 2015, as required. The loss of the GECDF credit facility could have a material adverse effect on our future results as we currently rely on this facility and its components for daily working capital and liquidity for our technology segment and as an operational function of our accounts payable process.

Fair Value

As of September 30, 2015 and March 31, 2015, the fair value of our long-term recourse and non-recourse notes payable approximated their carrying value.

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7. COMMITMENTS AND CONTINGENCIES

Legal Proceedings

We were the plaintiff in a lawsuit in the United States District Court for the Eastern District of Virginia (“the Trial Court”) in which, on January 27, 2011, a jury unanimously found that Lawson Software, Inc. (“Lawson”) infringed certain ePlus patents. On August 16, 2013, the Trial Court found, by clear and convincing evidence, that Lawson was in contempt of the Trial Court’s May 23, 2011, injunction which restricted Lawson from taking certain actions that infringed one of our patents. Lawson appealed, and while the appeal was pending, on April 3, 2014, the United States Patent and Trademark Office issued a notice canceling the patent. On July 25, 2014, the United States Court of Appeals for the Federal Circuit (“the Appeals Court”) vacated the injunction and the contempt order. On June 18, 2015, the Appeals Court, in a 5-5 split opinion, denied our petition for rehearing. We intend to ask the United States Supreme Court to consider the case.

These types of cases are complex in nature, are likely to have significant expenses associated with them, and we cannot predict when any litigation will be resolved, whether we will be successful in any claim for monetary or equitable relief, whether any award ultimately received will exceed the costs incurred to pursue this matter, or how long it will take to bring any matter to resolution.

Other Matters

We may become party to various legal proceedings arising in the ordinary course of business including preference payment claims asserted in customer bankruptcy proceedings, claims of alleged infringement of patents, trademarks, copyrights and other intellectual property rights, claims of alleged non-compliance with contract provisions, employment related claims, claims by competitors, vendors or customers, claims related to alleged violations of laws and regulations, and claims relating to alleged security or privacy breaches. Although we do not expect that the outcome in any of these matters, individually or collectively, will have a material adverse effect on our financial condition or results of operations, litigation is inherently unpredictable. Therefore, judgments could be rendered or settlements entered that could adversely affect our results of operations or cash flows in a particular period. We provide for costs related to contingencies when a loss is probable and the amount is reasonably determinable.

8.EARNINGS PER SHARE

Basic earnings per share is computed by dividing net earnings attributable to common shares by the weighted average number of common shares outstanding for the period. Diluted net earnings per share include the potential dilution of securities that could participate in our earnings, but not securities that are anti-dilutive. In the past, certain unvested shares of restricted stock awards (“RSAs”) contained non-forfeitable rights to dividends, whether paid or unpaid. As a result, these RSAs were considered participating securities because their holders had the right to participate in earnings with common stockholders. We used the two-class method to allocate net income between common shares and other participating securities for the six months ended September 30, 2014. As of September 30, 2015, we had no unvested shares of RSAs that contained non-forfeitable rights to dividends. We no longer grant RSAs that contain non-forfeitable rights to dividends.

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The following table provides a reconciliation of the numerators and denominators used to calculate basic and diluted net earnings per common share for the three and six months ended September 30, 2015 and September 30, 2014 (in thousands, except per share data).

	Three months ended September 30,				Six months ended September 30,
	2015		2014		2015		2014
Basic and diluted common shares outstanding:
Weighted average common shares outstanding — basic		7,274		7,320		7,249		7,412
Effect of dilutive shares		23		25		61		49
Weighted average shares common outstanding — diluted		7,297		7,345		7,310		7,461
Calculation of earnings per common share - basic:
Net earnings	$	15,679	$	11,952	$	24,493	$	21,429
Net earnings attributable to participating securities		-		-		-		55
Net earnings attributable to common shareholders	$	15,679	$	11,952	$	24,493	$	21,374
Earnings per common share - basic	$	2.16	$	1.63	$	3.38	$	2.88
Calculation of earnings per common share - diluted:
Net earnings attributable to common shareholders— basic	$	15,679	$	11,952	$	24,493	$	21,374
Add: undistributed earnings attributable to participating securities		-		-		-		1
Net earnings attributable to common shareholders— diluted	$	15,679	$	11,952	$	24,493	$	21,375
Earnings per common share - diluted	$	2.15	$	1.63	$	3.35	$	2.86

As of September 30, 2015 and 2014, we did not have any unexercised stock options.

9. STOCKHOLDERS’ EQUITY

On August 13, 2015, our board of directors authorized the Company to repurchase up to 500,000 shares of its outstanding common stock over a 12-month period beginning on August 17, 2015 through August 16, 2016. The plan authorized purchases to 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 six months ended September 30, 2015, we did not purchase any shares of our outstanding common stock under the share repurchase plan; however, we did purchase 30,447 shares of common stock at a value of $2.5 million to satisfy tax withholding obligations relating to the vesting of employees’ restricted stock.

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

Since the inception of our initial repurchase program on September 20, 2001 to September 30, 2015, we have repurchased approximately 5.6 million shares of our outstanding common stock at an average cost of $20.00 per share for a total purchase price of $111.6 million.

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10. SHARE-BASED COMPENSATION

Share-Based Plans

As of September 30, 2015, we had share-based awards outstanding under the followingplans: (1) the 2008 Non-Employee Director Long-Term Incentive Plan (“2008 Director LTIP”), and (2) the 2012 Employee Long-Term Incentive Plan ("2012 Employee LTIP"). All the share-based plans define fair market value as the previous trading day's closing price when the grant date falls on a date the stock was not traded.

For a summary of descriptions and vesting periods of the 2008 Director LTIP, and the 2012 Employee LTIP discussed above, refer to our 2015 Annual Report.

Restricted Stock Activity

For the six months ended September 30, 2015, we granted 6,151 restricted shares under the 2008 Director LTIP, and 118,974 restricted shares under the 2012 Employee LTIP. For the six months ended September 30, 2014, we granted 9,390 restricted shares under the 2008 Director LTIP, and 78,165 restricted shares under the 2012 Employee LTIP. A summary of the restricted shares is as follows:

	Number of Shares			Weighted Average Grant- date Fair Value
Nonvested April 1, 2015		176,514		$	52.75
Granted		125,125		$	81.76
Vested		(94,625	)	$	48.75
Forfeited		(2,321	)	$	64.06
Nonvested September 30, 2015		204,693		$	72.21

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

Compensation Expense

We recognize compensation cost for awards of restricted stock with graded vesting on a straight line basis over the requisite service period and estimate the forfeiture rate to be zero, which is based on historical experience. There are no additional conditions for vesting other than service conditions. During the three months ended September 30, 2015 and 2014, we recognized $1.5 million and $1.2 million, respectively, of total share-based compensation expense. During the six months ended September 30, 2015 and 2014, we recognized $2.7 million and $2.2 million, respectively, of total share-based compensation expense. Unrecognized compensation expense related to non-vested restricted stock was $13.0 million as of September 30, 2015, which will be fully recognized over the next fifty-seven months.

We also provide our employees with a contributory 401(k) plan. Employer contribution percentages are determined by us and are discretionary each year. The employer contributions vest pro-ratably over a four-year service period by the employees, after which all employer contributions will be fully vested. For the three months ended September 30, 2015 and 2014, our estimated contribution expense for the plan was $0.4 million and $0.3 million, respectively. For the six months ended September 30, 2015 and 2014, our estimated contribution expense for the plan was $0.7 million and $0.6 million, respectively.

11. INCOME TAXES

We recognize interest and penalties for uncertain tax positions. As of September 30, 2015 our gross liability related to uncertain tax positions was $72 thousand. At September 30, 2015 if the unrecognized tax benefits of $72 thousand were to be recognized, including the effect of interest, penalties and federal tax benefit, the impact would be $102 thousand. We also recognize accrued interest and penalties related to unrecognized tax benefits as a component of tax expense. We did not recognize any additional penalties. We had $46 thousand and $67 thousand accrued for the payment of interest at September 30, 2015 and 2014, respectively

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12. FAIR VALUE OF FINANCIAL INSTRUMENTS

We account for the fair values of our assets and liabilities in accordance with ASC Topic 820, Fair Value Measurement and Disclosure. The following table summarizes the fair value hierarchy of our financial instruments as of September 30, 2015 and March 31, 2015 (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)
September 30, 2015:
Assets:
Money market funds	$	39,504	$	39,504	$	-	$	-
Liabilities:
Contingent consideration	$	2,145	$	-	$	-	$	2,145

			Fair Value Measurement Using
	Recorded Amount		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable I nputs (Level 2)		Significant Unobservable Inputs (Level 3)
March 31, 2015:
Assets:
Money market funds	$	25,004	$	25,004	$	-	$	-
Liabilities:
Contingent consideration	$	1,830	$	-	$	-	$	1,830

For the three and six months ended September 30, 2015, we recorded adjustments that increased the fair value of our liability for contingent consideration by $205 thousand and $315 thousand, respectively, and such adjustments were presented within general and administrative expenses in our unaudited condensed consolidated statement of operations. There was no adjustment in fair value recognized in either the three or the six months ended September 30, 2014.

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13. SEGMENT REPORTING

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

	Three Months Ended
	September 30, 2015						September 30, 2014
	Technology		Financing		Total		Technology		Financing		Total
Sales of product and services	$	324,259	$	-	$	324,259	$	286,584	$	-	$	286,584
Financing revenue		-		10,279		10,279		-		9,059		9,059
Fee and other income		1,721		27		1,748		1,782		47		1,829
Net sales		325,980		10,306		336,286		288,366		9,106		297,472
Cost of sales, product and services		261,208		-		261,208		230,742		-		230,742
Direct lease costs		-		3,157		3,157		-		2,806		2,806
Cost of sales		261,208		3,157		264,365		230,742		2,806		233,548
Professional and other fees		1,305		208		1,513		1,321		256		1,577
Salaries and benefits		33,476		2,264		35,740		31,963		2,289		34,252
General and administrative expenses		7,322		263		7,585		6,703		455		7,158
Interest and financing costs		22		400		422		19		592		611
Operating expenses		42,125		3,135		45,260		40,006		3,592		43,598
Earnings before provision for income taxes	$	22,647	$	4,014	$	26,661	$	17,618	$	2,708	$	20,326
Depreciation and amortization	$	1,229	$	3,039	$	4,268	$	1,081	$	2,709	$	3,790
Purchases of property, equipment and operating lease equipment	$	576	$	8,118	$	8,694	$	744	$	706	$	1,450
Total assets	$	379,378	$	211,109	$	590,487	$	341,893	$	222,553	$	564,446

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	Six Months Ended
	September 30, 2015						September 30, 2014
	Technology		Financing		Total		Technology		Financing		Total
Sales of product and services	$	583,955	$	-	$	583,955	$	547,940	$	-	$	547,940
Financing revenue		-		18,625		18,625		-		17,933		17,933
Fee and other income		3,532		40		3,572		3,829		74		3,903
Net sales		587,487		18,665		606,152		551,769		18,007		569,776
Cost of sales, product and services		468,926		-		468,926		443,650		-		443,650
Direct lease costs		-		6,175		6,175		-		5,763		5,763
Cost of sales		468,926		6,175		475,101		443,650		5,763		449,413
Professional and other fees		2,567		464		3,031		2,907		503		3,410
Salaries and benefits		66,428		4,526		70,954		62,633		4,566		67,199
General and administrative expenses		13,851		513		14,364		12,461		970		13,431
Interest and financing costs		41		934		975		58		1,197		1,255
Operating expenses		82,887		6,437		89,324		78,059		7,236		85,295
Operating income		35,674		6,053		41,727		30,060		5,008		35,068
Other income		-		-		-		-		1,434		1,434
Earnings before provision for income taxes	$	35,674	$	6,053	$	41,727	$	30,060	$	6,442	$	36,502
Depreciation and amortization	$	2,466	$	6,037	$	8,503	$	1,975	$	5,656	$	7,631
Purchases of property, equipment and operating lease equipment	$	1,194	$	14,424	$	15,618	$	1,086	$	833	$	1,919
Total assets	$	379,378	$	211,109	$	590,487	$	341,893	$	222,553	$	564,446

14. BUSINESS COMBINATIONS

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

The total purchase price was $10.5 million, which consists of cash paid, amounts to be paid to Evolve upon collection of certain accounts receivables, and the fair value of contingent consideration. We estimated the fair value of the contingent consideration to be $2.0 million as of the acquisition date using a Monte Carlo simulation model. The maximum payout for contingent consideration is $2.5 million over 3 years. The purchase price has been allocated to the assets acquired and liabilities assumed based on their estimated fair values on the transaction date, including identifiable intangible assets of $4.0 million related to customer relationships with an estimated useful life of 6 years, and other net assets of $0.6 million. We recognized goodwill related to this transaction of $4.5 million, which was assigned to our technology reporting unit. The goodwill recognized in the acquisition is attributable to the acquired assembled workforce, their presence in the western United States, and expected synergies, none of which qualify for recognition as a separate intangible asset. Goodwill associated with the acquisition is deductible for tax purposes.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

This discussion is intended to further the reader’s understanding of our consolidated financial condition and results of operations. It should be read in conjunction with the financial statements included in this quarterly report on Form 10-Q and our annual report on Form 10-K for the year ended March 31, 2015 (“2015 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 2015 Annual Report.

EXECUTIVE OVERVIEW

Business Description

We are a leading integrator of technology solutions for information technology (IT) lifecycle management. We enable organizations to optimize their IT infrastructure and supply chain processes by delivering world-class IT products from top vendors, providing a consultative approach to professional and managed services, and providing our proprietary software, as well as flexible financing solutions for all our offerings. We have been in the business of selling, leasing, financing, and managing information technology and other assets for more than 24 years and have been licensing our proprietary software for more than 15 years.

Our primary focus is to deliver integrated technology solutions for our customers’ data center, network, and collaboration needs, including hosted, on-premise, hybrid and cloud infrastructures. These solutions consist of services and products encompassing initial and periodic assessments, consultative engagements, architecture, design, and implementation of security, storage, cloud, mobility, hyper-converged infrastructure, and other advanced technologies. We design, implement and provide an array of IT solutions from multiple leading IT vendors. We are an authorized reseller from over 1,000 vendors including Check Point, Cisco Systems, Dell, EMC, FireEye, F5 Networks, Hewlett-Packard, Juniper, McAfee, NetApp, Nimble, Oracle, Palo Alto Networks, Pure Storage, and VMware, among many others. 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 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 assets.

Our scale and strong financial position have enabled us to invest in the engineering and technology resources required to deliver leading edge IT solutions. We believe we are a trusted IT advisor to our customers, delivering turn-key IT solutions that incorporate hardware, software, security and both managed and professional services. In addition, we offer a wide range of leasing and financing options for technology and other capital assets. We believe our offering of integrated IT products, services, financing, and our proprietary supply chain software, is unique in the industry. It allows us to offer a customer service strategy that spans the continuum from fast delivery of competitively priced products, services, subsequent management and upkeep, through to end-of-life disposal services. This selling approach also permits us to grow with our customers and solidify our relationships through hands-on engagement and understanding of their needs.

We focus exclusively on middle market and large enterprises. For the twelve months ended September 30, 2015, the percentage of revenue by customer end market within our technology segment include state and local government, and educational institutions, 23%; technology, 21%; telecommunications, media and entertainment, 17%; financial services, 10%; and healthcare, 10%. The majority of our sales were generated within the United States; however, we also have the ability to support our customers internationally.

Our revenues are composed of sales of product and services, financing revenues and fee and other income. Our operations are conducted through two segments: technology and financing. Our technology segment accounted for 97% of our net sales in both the three and six months ended September 30, 2015, and 85% of our operating income for both the three and six months ended September 30, 2015. The financing segment accounted for 3% of our net sales in both the three and six months ended September 30, 2015, and 15% of our operating income for both the three and six months ended September 30, 2015.

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Key Business Metrics

Our management monitors a number of financial and non-financial measures and ratios on a regular basis in order to track the progress of our business. We believe that the most important of these measures and ratios include gross margin, gross margin on product and services, operating income margin, net earnings, net earnings per common share, Adjusted EBITDA, Adjusted EBITDA margin, non-GAAP gross sales of product and services, non-GAAP gross cost of sales, product and services. 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. These key indicators include financial information that is prepared in accordance with GAAP and presented in our unaudited condensed consolidated financial statements as well as non-GAAP performance measurement tools.

A summary of these key indicators which are not included in our unaudited condensed consolidated financial statements is presented as follows, (in thousands):

	Three Months Ended September 30,									Six Months Ended September 30,
	2015			2014			Change			2015			2014			Change
Gross margin		21.4	%		21.5	%	(10 bps)				21.6	%		21.1	%	50 bps
Gross margin, product and services		19.4	%		19.5	%	(10 bps)				19.7	%		19.0	%	70 bps
Operating income margin		7.9	%		6.8	%	110 bps				6.9	%		6.2	%	70 bps
Non-GAAP gross sales of product and services (1)	$	431,096		$	392,238			9.9	%	$	763,404		$	717,696			6.4	%
Non-GAAP gross cost of sales, product and services (1)	$	368,045		$	336,396			9.4	%	$	648,375		$	613,406			5.7	%
Adjusted EBITDA (2)	$	27,861		$	21,376			30.3	%	$	44,135		$	36,989			19.3	%
Adjusted EBITDA margin (2)		8.3	%		7.2	%		110 bps			7.3	%		6.5	%		80 bps
Purchases of property and equipment used internally	$	576		$	744		$	(168	)	$	1,194		$	1,086		$	108
Purchases of equipment under operating leases		8,118			706			7,412			14,424			833			13,591
Total capital expenditures	$	8,694		$	1,450		$	7,244		$	15,618		$	1,919		$	13,699

 

(1) We define non-GAAP gross sales of product and services as our sales of product and services calculated in accordance with GAAP, adjusted to exclude the costs incurred related to sales of third party software assurance, maintenance and services. We define non-GAAP gross cost of sales, product and services as our cost of sales, product and services calculated in accordance with GAAP, adjusted to include the costs incurred related to sales of third party software assurance, maintenance and services. We provide below a reconciliation of non-GAAP gross sales of product and services to sales of product and services, which is the most closely comparable financial measure to this non-GAAP financial measure. We also provide below a reconciliation of non-GAAP gross cost of sales of product and services to cost of sales, product and services, which is the most closely comparable financial measure to this non-GAAP financial measure.

We use non-GAAP gross sales of product and services and non-GAAP gross cost of sales, product and services as supplemental measures of our performance to gain insight into the volume of business generated by our technology segment. Our use of non-GAAP gross sales of product and services and non-GAAP gross cost of sales, product and services 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 GAAP. In addition, other companies, including companies in our industry, might calculate non-GAAP gross sales of product and services and non-GAAP gross cost of sales, product and services or similarly titled measures differently, which may reduce their usefulness as comparative measures.

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	Three Months Ended September 30,				Six Months Ended September 30,
	2015		2014		2015		2014
Sales of products and services	$	324,259	$	286,584	$	583,955	$	547,940
Costs incurred related to sales of third party software assurance, maintenance and services		106,837		105,654		179,449		169,756
Non-GAAP gross sales of products and services	$	431,096	$	392,238	$	763,404	$	717,696
Cost of sales, product and services	$	261,208	$	230,742	$	468,926	$	443,650
Costs incurred related to sales of third party software assurance, maintenance and services		106,837		105,654		179,449		169,756
Non-GAAP gross cost of sales, product and services	$	368,045	$	336,396	$	648,375	$	613,406

(2) We define Adjusted EBITDA as net earnings calculated in accordance with GAAP, adjusted for the following: interest expense, depreciation and amortization, provision for income taxes, and other income. We consider the interest on notes payable from our financing segment and depreciation expense presented within cost of sales, which includes depreciation on assets financed as operating leases, to be operating expenses. As such, they are not included in the amounts added back to net earnings in the Adjusted EBITDA calculation. We provide below a reconciliation of Adjusted EBITDA to net earnings, which is the most closely comparable financial measure to this non-GAAP financial measure. Adjusted EBITDA margin is our calculation of Adjusted EBITDA divided by net sales.

We use Adjusted EBITDA as a supplemental measure of our performance to gain insight into our operating performance. 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 core business and operating results by excluding items that are not comparable across reporting periods. 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 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.

	Three Months Ended September 30,				Six Months Ended September 30,
	2015		2014		2015		2014
Net earnings	$	15,679	$	11,952	$	24,493	$	21,429
Provision for income taxes		10,982		8,374		17,234		15,073
Depreciation and amortization		1,200		1,050		2,408		1,921
Less: Other income		-		-		-		1,434
Adjusted EBITDA	$	27,861	$	21,376	$	44,135	$	36,989

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Consolidated Results of Operations

During the three months ended September 30, 2015, net sales increased 13.0%, or $38.8 million to $336.3 million, compared to $297.5 million for the same period in the prior fiscal year. Sales of products and services rose 13.1% to $324.3 million, from $286.6 million in the prior year quarter ended September 30, 2014. The increase reflects a 9.9% increase in non-GAAP gross sales of product and services, increasing to $431.1 million from $392.2 million, as well as a higher proportion of sales from products, which is presented on a gross basis. The increase in net sales revenues was a result of an increase in demand from companies in the technology, health care industries, and state and local government and education (“SLED”) customers.

During the six months ended September 30, 2015, net sales increased 6.4%, or $36.4 million to $606.2 million, compared to $569.8 million for the same period in the prior fiscal year. Sales of product and services were $584.0 million for the six months ended September 30, 2015, compared to $547.9 million for the same period last year, an increase of 6.6%. Non-GAAP gross sales of product and services were $763.4 million compared to $717.7 million during the six months ended September 30, 2014, an increase of 6.4% or $45.7 million.

Consolidated gross profit rose 12.5% to $71.9 million, compared with $63.9 million in the second quarter of fiscal 2015. Consolidated gross margins were 21.4% for the three months ended September 30, 2015, compared to 21.5% for the three months ended September 30, 2014. Our gross margin for product and services was 19.4% during the three months ended September 30, 2015 compared to 19.5% during the three months ended September 30, 2014. The decrease in gross margins was due to shifts in our product revenue mix resulting from changes in demand from our customer base.

Consolidated gross profit rose 8.9% to $131.1 million, compared with $120.4 million in the first half of fiscal 2015. For the six months ended September 30, 2015, consolidated gross margins were 21.6%, compared to 21.1% for the six months ended September 30, 2014. Our gross margin for product and services was 19.7% during the six months ended September 30, 2015 compared to 19.0% during the same period last year. Contributing to our margins for both the three and six month periods was our continued focus on value added services for our customers, including the increase in sales of our professional and managed services. Vendor incentives earned as a percentage of sales of product and services for the three and six months ended September 30, 2015 declined 50 basis points and 40 basis points, respectively, from the prior periods.

Operating income for the quarter increased 31.2% to $26.7 million, as compared to $20.3 million for the three months ended September 30, 2014. Net earnings for the quarter increased 31.2% to $15.7 million, as compared to $12.0 million for the three months ended September 30, 2014. Operating income margin for the quarter increased 110 basis points to 7.9% for the three months ended September 30, 2015 from 6.8% for the prior year.

Operating income for the six months ended September 30, 2015 increased 19.0% to $41.7 million, as compared to $35.1 million for the six months ended September 30, 2014. For the six months ended September 30, 2015, the operating income margin increased 70 basis points to 6.9% from 6.2% for the same period in the prior year.

Consolidated net earnings for the three months ended September 30, 2015 were $15.7 million, and increase of 31.2%, or $3.7 million over the prior year's results. Net earnings for the six months ended September 30, 2015 increased 14.3% to $24.5 million, as compared to $21.4 million for the six months ended September 30, 2014, which included other income of $1.4 million related to a gain recognized on an arrangement we entered into to repurchase the rights, title, and interest to payments due under a financing arrangement. This financing arrangement was previously assigned to a third party financial institution and accounted for as a secured borrowing.

Adjusted EBITDA increased $6.5 million, or 30.3%, to $27.9 million and Adjusted EBITDA margin increased 110 basis points to 8.3% for the three months ended September 30, 2015, as compared to the prior period. Adjusted EBITDA for the six months ended September 30, 2015 increased $7.1 million, or 19.3%, to $44.1 million and Adjusted EBITDA margin increased 80 basis points to 7.3% compared to the prior year period of 6.5%.

Diluted earnings per share increased 31.9%, or $0.52 to $2.15 per share for the three months ended September 30, 2015, as compared to $1.63 per share for the three months ended September 30, 2014. Diluted earnings per share increased 17.1% to $3.35 per share for the six months ended September 30, 2015, as compared to $2.86 per share for the six months ended September 30, 2014.

Cash and cash equivalents decreased $13.3 million or 17.5% to $62.8 million at September 30, 2015 compared to March 31, 2015. Our cash on hand, funds generated from operations, amounts available under our credit facility and the possible monetization of our investment portfolio provide sufficient liquidity for our business.

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Segment Overview

Our operations are conducted through two segments: technology and financing.

Technology Segment

The technology segment sells IT equipment and software and related services primarily to corporate customers, state and local governments, and higher education institutions on a nationwide basis, with geographic concentrations relating to our physical locations. The technology segment also provides Internet-based business-to-business supply chain management solutions for information technology products.

Customers who purchase IT equipment and services from us may have customer master agreements, or CMAs, with our company, which stipulate the terms and conditions of the relationship. Some CMAs contain pricing arrangements, and most contain mutual voluntary termination clauses. Our other customers place orders using purchase orders without a CMA in place or with other documentation customary for the business. Often, our work with state and local governments is based on public bids and our written bid responses. 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 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 pricing received, funds provided for the marketing of these products and other special promotions. These authorization levels are achieved by us through purchase volume, certifications held by sales executives or engineers and/or contractual commitments by us. The authorization levels are costly to maintain and these programs continually change and, therefore, there is no guarantee of future reductions of costs provided by these vendor consideration programs.

Financing Segment

Our financing segment offers financing solutions to corporations, governmental entities, and educational institutions nationwide and also in Canada and Iceland. The financing segment derives revenue from leasing IT and medical equipment and the disposition of that equipment at the end of the lease. The financing segment also derives revenues from the financing of third-party software licenses, software assurance, maintenance and other services.

Financing revenue generally falls into 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; and

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

Our financing segment sells the equipment underlying a lease to the lessee or a third-party other than the lessee. These sales occur at the end of the lease term and revenues from the sales of such equipment are recognized at the date of sale. We also recognize revenue from events that occur after the initial sale of a financial asset and remarketing fees from certain residual value investments.

Fluctuations in Revenues

Our results of operations are susceptible to fluctuations for a number of reasons, including, without limitation, customer demand for our products and services, supplier costs, changes in vendor incentive programs, interest rate fluctuations, general economic conditions, and differences between estimated residual values and actual amounts realized related to the equipment we lease. Operating results could also fluctuate as a result of a sale prior to the expiration of the lease term to the lessee or to a third-party or from post-term events.

We expect to continue to expand by opening new sales locations and hiring additional staff for specific targeted market areas in the near future whenever we can find both experienced personnel and desirable geographic areas. These investments may reduce our results from operations in the short term.

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CRITICAL ACCOUNTING ESTIMATES

The preparation of financial statements in conformity with U.S. GAAP requires management to use judgment in the application of accounting policies, including making estimates and assumptions. If our judgment or interpretation of the facts and circumstances relating to various transactions had been different, or different assumptions were made, it is possible that alternative accounting policies would have been applied, resulting in a change in financial results. On an ongoing basis, we reevaluate our estimates, including those related to revenue recognition, residual values, vendor incentives, lease classification, goodwill and intangibles, reserves for credit losses and income taxes specifically relating to uncertain tax positions. We base estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. For all such estimates, we caution that future events rarely develop exactly as forecasted, and therefore, these estimates may require adjustment.

Our critical accounting estimates have not changed from those reported in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our 2015 Annual Report.

SEGMENT RESULTS OF OPERATIONS

The three and six months ended September 30, 2015 Compared to the three and six months ended September 30, 2014

Technology Segment

The results of operations for our technology segment for the three and six months ended September 30, 2015 and 2014 were as follows (dollars in thousands):

	Three Months Ended September 30,									Six Months Ended September 30,
	2015		2014		Change					2015		2014		Change
Sales of product and services	$	324,259	$	286,584	$	37,675		13.1	%	$	583,955	$	547,940	$	36,015		6.6	%
Fee and other income		1,721		1,782		(61	)	(3.4	%)		3,532		3,829		(297	)	(7.8	%)
Net sales		325,980		288,366		37,614		13.0	%		587,487		551,769		35,718		6.5	%
Cost of sales, product and services		261,208		230,742		30,466		13.2	%		468,926		443,650		25,276		5.7	%
Gross profit		64,772		57,624		7,148		12.4	%		118,561		108,119		10,442		9.7	%
Professional and other fees		1,305		1,321		(16	)	(1.2	%)		2,567		2,907		(340	)	(11.7	%)
Salaries and benefits		33,476		31,963		1,513		4.7	%		66,428		62,633		3,795		6.1	%
General and administrative		7,322		6,703		619		9.2	%		13,851		12,461		1,390		11.2	%
Interest and financing costs		22		19		3		15.8	%		41		58		(17	)	(29.3	%)
Operating expenses		42,125		40,006		2,119		5.3	%		82,887		78,059		4,828		6.2	%
Segment earnings	$	22,647	$	17,618	$	5,029		28.5	%	$	35,674	$	30,060	$	5,614		18.7	%

Net sales: Net sales for the three months ended September 30, 2015 were $326.0 million compared to $288.4 million during the three months ended September 30, 2014, an increase of 13.0%, or $37.6 million. Net sales for the six months ended September 30, 2015 were $587.5 million compared to $551.8 million during the six months ended September 30, 2014, an increase of 6.5%, or $35.7 million. The increase in net sales revenues was a result of an increase in demand from companies in the technology, health care, and SLED market segments.

Non-GAAP gross sales of product and services for the three months ended September 30, 2015 were $431.1 million compared to $392.2 million during the three months ended September 30, 2014, an increase of 9.9% or $38.9 million. Sales of product and services during the three months ended September 30, 2015 were $324.3 million compared to $286.6 million during the three months ended September 30, 2014, an increase of 13.1% or $37.7 million. This reflected a higher proportion of sales from products, which are presented on a gross basis.

Non-GAAP gross sales of product and services for the six months ended September 30, 2015 were $763.4 million compared to $717.7 million during the six months ended September 30, 2014, an increase of 6.4% or $45.7 million. Sales of product and services during the six months ended September 30, 2015 were $584.0 million compared to $547.9 million during the six months ended September 30, 2014, an increase of 6.6%.

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Summarized below are the sequential and year over year changes in net sales of product and services:

Quarter Ended	Sequential			Year over Year
September 30, 2015		24.9	%		13.1	%
June 30,2015		0.9	%		(0.6	%)
March 31, 2015		(13.0	%)		3.2	%
December 31, 2014		3.2	%		15.6	%
September 30, 2014		9.7	%		9.7	%

We rely on our vendors to fulfill a large majority of shipments to our customers. As of September 30, 2015, we had open orders of $73.9 million and deferred revenue of $22.6 million. As of September 30, 2014, we had open orders of $89.8 million and deferred revenues of $24.2 million.

Gross profit: Our gross margin for product and services was 19.4% during the three months ended September 30, 2015 compared to 19.5% during the three months ended September 30, 2014. The decrease in gross margins was due to shifts in our product revenue mix resulting from changes in demand from our customer base.

Our gross margin for product and services was 19.7% during the six months ended September 30, 2015 compared to 19.0% during the six months ended September 30, 2014. Contributing to our margins for both the three and six month periods was our continued focus on value added services for our customers, including the increase in sales of our professional and managed services. Vendor incentives earned as a percentage of sales of product and services for the three and six months ended September 30, 2015 declined 50 basis points and 40 basis points, respectively, from the prior year.

Operating expenses: Operating expenses were $42.1 million, an increase of $2.1 million or 5.3% higher for the current quarter compared to $40.0 million for the three months ended September 30, 2014. Operating expenses for the six months ended September 30, 2015 were $82.9 million compared to $78.1 million or 6.2% higher than the six months ended September 30, 2014.

Professional and other fees were $1.3 million for the three months ended September 30, 2015, and 2014. Professional and other fees for the six months ended September 30, 2015 were $2.6 million compared to $2.9 million or 11.7% lower than the six months ended September 30, 2014. The decrease for the six months ended September 30, 2015 was primarily due to a decrease in fees related to the secondary offering of common stock in the prior year.

Salaries and benefits increased $1.5 million, or 4.7%, to $33.5 million during the three months ended September 30, 2015, compared to $32.0 million during the three months ended September 30, 2014. For the six months ended September 30, 2015, salaries and benefits were $66.4 million compared to $62.6 million or 6.1% higher than the six months ended September 30, 2014. The increase in salaries and benefits is due to additional personnel and merit increases. Our technology segment had 945 employees as of September 30, 2015, an increase of 17 or 1.8% from 928 as of September 30, 2014, all of which were sales and engineering positions.

General and administrative expenses increased $0.6 million, or 9.2% during the three months ended September 30, 2015 over the same period for the prior year. During the six months ended September 30, 2015 general and administrative expenses increased $1.4 million, or 11.2% over the same period for the prior year. This increase was primarily due to incremental costs associated with the acquisition of Evolve and other costs related to the ongoing expansion of our business.

Segment earnings: As a result of the foregoing, segment earnings were $22.6 million, an increase of $5.0 million, or 28.5% for the three months ended September 30, 2015, and segment earnings were $35.7 million, an increase of $5.6 million, or 18.7% for the six months ended September 30, 2015, as compared to the same periods for the prior year.

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Financing Segment

The results of operations for our financing segment for the three and six months ended September 30, 2015 and 2014 were as follows (dollars in thousands):

	Three Months Ended September 30,									Six Months Ended September 30,
	2015		2014		Change					2015		2014		Change
Financing revenue	$	10,279	$	9,059	$	1,220		13.5	%	$	18,625	$	17,933	$	692		3.9	%
Fee and other income		27		47		(20	)	(42.6	%)		40		74		(34	)	(45.9	%)
Net sales		10,306		9,106		1,200		13.2	%		18,665		18,007		658		3.7	%
Direct lease costs		3,157		2,806		351		12.5	%		6,175		5,763		412		7.1	%
Gross profit		7,149		6,300		849		13.5	%		12,490		12,244		246		2.0	%
Professional and other fees		208		256		(48	)	(18.8	%)		464		503		(39	)	(7.8	%)
Salaries and benefits		2,264		2,289		(25	)	(1.1	%)		4,526		4,566		(40	)	(0.9	%)
General and administrative		263		455		(192	)	(42.2	%)		513		970		(457	)	(47.1	%)
Interest and financing costs		400		592		(192	)	(32.4	%)		934		1,197		(263	)	(22.0	%)
Operating expenses		3,135		3,592		(457	)	(12.7	%)		6,437		7,236		(799	)	(11.0	%)
Operating income		4,014		2,708		1,306		48.2	%		6,053		5,008		1,045		20.9	%
Other income		-		-		-		n/a			-		1,434		(1,434	)	n/a
Segment earnings	$	4,014	$	2,708	$	1,306		48.2	%	$	6,053	$	6,442	$	(389	)	(6.0	%)

Net sales: Net sales increased by $1.2 million, or 13.2%, to $10.3 million for the three months ended September 30, 2015, as compared to the three months ended September 30, 2014 due to higher transactional gains. During the quarters ended September 30, 2015 and 2014, we recognized net gains on sales of financial assets of $2.5 million and $0.9 million, respectively, and the fair value of assets received from these sales were $84.4 million and $37.6 million, respectively. Post contract earnings decreased $0.3 million to $3.2 million for the three months ended September 30, 2015 over the prior year.

For the six months ended September 30, 2015, net sales increased by $0.7 million, or 3.7%, to $18.7 million, as compared to the six months ended September 30, 2014 due to higher transactional gains. During the six months ended September 30, 2015 and 2014, we recognized net gains on sales of financial assets of $4.0 million and $3.2 million, respectively, and the fair value of assets received from these sales were $108.7 million and $93.8 million, respectively. Post contract earnings decreased $0.1 million to $5.4 million for the six months ended September 30, 2015 over the prior year.

At September 30, 2015, we had $152.1 million in financing receivables and operating leases, compared to $159.4 million as of September 30, 2014, a decrease of $7.3 million or 4.6%.

Gross profit: Gross profit increased $0.8 million due to higher transactional gains in the three months ended September 30, 2015 as compared to same period in the prior year. For the six months ended September 30, 2015 gross profit increased $0.2 million due to higher transactional gains being offset in part by lower post-contract earnings and increased depreciation expense related to operating leases as compared to the prior year period.

Operating expenses: For the three months ended September 30, 2015, operating expenses decreased $0.5 million, or 12.7%, which was due primarily to both lower interest and financing costs and additional reserves for credit losses recorded in the prior year stemming from an increase in our portfolio balance. Salaries and benefits remained consistent with the prior year. Our financing segment had 52 employees as of September 30, 2015 up from 51 employees as of September 30, 2014.

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For the six months ended September 30, 2015, operating expenses decreased $0.8 million, or 11.0%, which was due primarily to both lower interest and financing costs and additional reserves for credit losses recorded in the prior year stemming from an increase in our portfolio balance. Salaries and benefits remained consistent with prior year.

Interest and financing costs decreased $0.2 million and $0.3 million for the three and six months ended September 30, 2015, respectively, compared to the prior year periods due to a decrease in the average total notes payable outstanding and slightly lower interest rates for the three and six months ended September 30, 2015. Total notes payable were $42.7 million as of September 30, 2015, a decrease of $25.5 million or 37.4% compared to $68.1 million as of September 30, 2014. Our weighted average interest rate for non-recourse notes payable was 3.18% and 3.31%, as of September 30, 2015 and September 30, 2014, respectively.

Other income: During the six months ended September 30, 2014, we entered into an arrangement to repurchase the rights, title, and interest to payments due under a financing arrangement. This financing arrangement was previously assigned to a third party financial institution and accounted for as a secured borrowing. In conjunction with the repurchase agreement, we recognized a gain of $1.4 million.

Segment earnings: As a result of the foregoing, earnings increased $1.3 million and decreased $0.4 million for the three and six months ended September 30, 2015, respectively, over the prior year periods.

Consolidated

Income taxes: Our provision for income tax expense increased $2.6 million to $11.0 million for the three months ended September 30, 2015, and increased $2.2 million to $17.2 million for the six months ended September 30, 2015 as compared to the same periods last year. Our effective income tax rates for the three and six months ended September 30, 2015 were 41.2% and 41.3%, respectively. For the three and six months ended September 30, 2014, the effective income tax rates were also 41.2% and 41.3%, respectively.

Net earnings: The foregoing resulted in net earnings of $15.7 million for the three months ended September 30, 2015, an increase of 31.2%, as compared to $12.0 million during the three months ended September 30, 2014. Net earnings were $24.5 million for the six months ended September 30, 2015 an increase of 14.3%, as compared to $21.4 million during the six months ended September 30, 2014.

Basic and fully diluted earnings per common share were $2.16 and $2.15, for the three months ended September 30, 2015, an increase of 32.5% and 31.9% as compared to $1.63 and $1.63, respectively, for the three months ended September 30, 2014. For the six months ended September 30, 2015, basic and fully diluted earnings per common share were $3.38 and $3.35, an increase of 17.4% and 17.1% as compared to $2.88 and $2.86, respectively, for the three months ended September 30, 2014.

Weighted average common shares outstanding used in the calculation of basic and diluted earnings per common share for the three months ended September 30, 2015 was 7.3 million. Weighted average common shares outstanding used in the calculation of the basic and diluted earnings per common share for the three months ended September 30, 2014 was 7.3 million.

Weighted average common shares outstanding used in the calculation of basic and diluted earnings per common share for the six months ended September 30, 2015 were 7.2 million and 7.3 million, respectively. Weighted average common shares outstanding used in the calculation of the basic and diluted earnings per common share for the six months ended September 30, 2014 was 7.4 million and 7.5 million, respectively.

LIQUIDITY AND CAPITAL RESOURCES

Liquidity Overview

Our primary sources of liquidity have historically been cash and cash equivalents, internally generated funds from operations, and borrowings, both non-recourse and recourse. We have used those funds to meet our capital requirements, which have historically consisted primarily of working capital for operational needs, capital expenditures, purchases of equipment for lease, payments of principal and interest on indebtedness outstanding, acquisitions and the repurchase of shares of our common stock.

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Our subsidiary ePlus Technology, inc., part of our technology segment, finances its operations with funds generated from operations, and with a credit facility with GE Commercial Distribution Finance, or GECDF, with an aggregate credit limit of $250 million. There are two components of this facility: (1) a floor plan component; and (2) an accounts receivable component. After a customer places a purchase order with us and we have completed our credit check, we place an order for the equipment with one of our vendors. Generally, most purchase orders from us to our vendors are first financed under the floor plan component and reflected in “accounts payable—floor plan” in our condensed consolidated balance sheets. Payments on the floor plan component are due on three specified dates each month, generally 30-60 days from the invoice date. On the due date of the invoices financed by the floor plan component, the invoices are paid by the accounts receivable component of the credit facility. The balance of the accounts receivable component is then reduced by payments from our available cash. The outstanding balance under the accounts receivable component is recorded as recourse notes payable on our condensed consolidated balance sheets. There was no outstanding balance at September 30, 2015 or September 30, 2014, while the maximum credit limit was $30.0 million for both periods. The borrowings and repayments under the floor plan component are reflected as “net borrowings on floor plan facility” in the cash flows from financing activities section of our consolidated statements of cash flows.

Most customer payments in our technology segment are remitted to our lockboxes. Once payments are cleared, the monies in the lockbox accounts are automatically transferred to our operating account on a daily basis. On the due dates of the floor plan component, we make cash payments to GECDF. These payments from the accounts receivable component to the floor plan component and repayments from our cash are reflected as “net borrowings on floor plan facility” in the cash flows from financing activities section of our condensed consolidated statements of cash flows. We engage in this payment structure in order to minimize our interest expense and bank fees in connection with financing the operations of our technology segment.

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

Our ability to continue to fund our planned growth, both internally and externally, is dependent upon our ability to generate sufficient cash flow from operations or to obtain additional funds through equity or debt financing, or from other sources of financing, as may be required. While at this time we do not anticipate requiring any additional sources of financing to fund operations, if demand for IT products declines, our cash flows from operations may be substantially affected.

Cash Flows

The following table summarizes our sources and uses of cash over the periods indicated (in thousands):

	Six Months Ended September 30,
	2015			2014
Net cash used in operating activities	$	(22,660	)	$	(10,995	)
Net cash used in investing activities		(27,924	)		(22,182	)
Net cash provided by financing activities		37,284			15,948
Effect of exchange rate changes on cash		(33	)		(9	)
Net Decrease in Cash and Cash Equivalents	$	(13,333	)	$	(17,238	)

Cash flows from operating activities. Cash used in operating activities totaled $22.7 million during the six months ended September 30, 2015. Net earnings adjusted for the impact of non-cash items was $27.4 million. Net changes in assets and liabilities resulted in a decrease of cash and cash equivalents of $50.0 million, primarily due to additions to accounts receivables of $42.3 million, and reductions in salaries and commissions payable, deferred revenues and other liabilities of $11.0 million, partially offset by reductions in deferred cost, other intangible assets and other assets of $11.0 million.

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

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In order to manage our working capital, we monitor our cash conversion cycle for our Technology segment, 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 segment:

	As of September 30,
	2015			2014
Days sales outstanding (1)		47			48
Days inventory outstanding (2)		6			8
Days payable outstanding (3)		(41	)		(44	)
Cash conversion cycle		12			12

(1) Represents the rolling three-month average of the balance of trade accounts receivable-trade, net for our Technology segment at the end of the period divided by non-GAAP gross sales of product and services for the same three-month period.

(2) Represents the rolling three-month average of the balance of inventory, net for our Technology segment at the end of the period divided by non-GAAP gross cost of sales, product and services for the same three-month period.

(3) Represents the rolling three-month average of the combined balance of accounts payable-trade and accounts payable-floor plan for our Technology segment at the end of the period divided by non-GAAP gross cost of sales, product and services for the same three-month period.

Our standard payment term for customers is between 30-60 days; however, certain customers are approved for extended payment terms. Invoices processed through our credit facility, or the accounts payable—floor plan balance, are typically paid within 45-60 days from the invoice date, while accounts payable—trade invoices are typically paid within 30 days from the invoice date. Our cash conversion cycle was 12 days as of September 30, 2015 and 2014.

Cash flows related to investing activities. Cash used in investing activities was $27.9 million during the six months ended September 30, 2015, compared to cash used in investing activities of $22.2 million during the same period last year. Cash used in investing activities during the six months ended September 30, 2015 was primarily driven by issuance of financing receivables of $67.6 million, purchase of assets to be leased of $9.4 million and purchases of property, equipment, and operating lease equipment of $15.6 million, which was partially offset by cash proceeds from the repayment financing receivable of $35.5 million, the sale of financing receivables of $26.0 million, and proceeds from the sale of property, equipment and operating lease equipment of $3.2 million.

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

Cash flows from financing activities. Cash provided by financing activities was $37.3 million during the six months ended September 30, 2015, which was primarily due to net borrowings on the floor plan facility of $27.6 million and net borrowings of non-recourse and recourse notes payable of $11.1 million, which was partially offset by $2.5 million in cash used for the repurchase of common stock. During the six months ended September 30, 2014, cash provided by financing activities was $15.9 million, which was due to net borrowings on the floor plan facility of $20.7 million and net borrowings of non-recourse and recourse notes payable of $29.3 million, which was partially offset by the repurchase of treasury stock of $34.8 million.

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Non-Cash Activities

We assign contractual payments due under lease and financing agreements to third-party financial institutions, which are accounted for as non-recourse notes payable. As a condition to the assignment agreement, certain financial institutions may request that the customer remit their contractual payments to a trust; rather than to us, and the trust pays the financial institution. Alternatively, if the structure of the agreement does not require a trustee, the customer will continue to make payments to us, and we will remit the payment to the financial institution. The economic impact to us under either assignment structure is similar, in that the assigned contractual payments are paid by the customer and remitted to the lender to pay down the corresponding non-recourse notes payable. However, these assignment structures are classified differently within our consolidated statements of cash flows. More specifically, we are required to exclude non-cash transactions from our consolidated statement of cash flows, so certain contractual payments made by the customer to the trust are excluded from our operating cash receipts and the corresponding repayment of the non-recourse notes payable from the trust to the third-party financial institution are excluded from our cash flows from financing activities. Contractual payments received by the trust and paid to the lender on our behalf are disclosed as a non-cash financing activity.

Liquidity and Capital Resources

We may utilize non-recourse notes payable to finance approximately 80% to 100% of the purchase price of the assets being leased or financed by our customers. Any balance of the purchase price remaining after non-recourse funding and any upfront payments received from the customer (our equity investment in the equipment) must generally be financed by cash flows from our operations, the sale of the equipment leased to third parties, or other internal means. Although we expect that the credit quality of our 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.

The financing necessary to support our lease and financing activities has been provided by our cash and non-recourse borrowings. We monitor our exposure closely. Historically, we have obtained mostly non-recourse borrowings from third party banks and finance companies. We continue to be able to obtain financing through our traditional lending sources. Non-recourse financings are loans whose repayment is the responsibility of a specific customer, although we may make representations and warranties to the lender regarding the specific contract or have ongoing loan servicing obligations. Under a non-recourse loan, we borrow from a lender an amount based on the present value of the contractually committed lease payments under the lease at a fixed rate of interest, and the lender secures a lien on the financed assets. When the lender is fully repaid from the lease payments, the lien is released and all further rental or sale proceeds are ours. We are not liable for the repayment of non-recourse loans unless we breach our representations and warranties in the loan agreements. The lender assumes the credit risk of each lease, and the lender’s only recourse, upon default by the lessee, is against the lessee and the specific equipment under lease.

At September 30, 2015, our non-recourse notes payable decreased 26.9% to $38.6 million, as compared to $52.9 million at March 31, 2015. Recourse notes payable increased 8.9% to $4.0 million as of September 30, 2015 compared to $3.7 million as of March 31, 2015.

Whenever desirable, we arrange for equity investment financing, which includes selling lease payments, including the residual portions, to third parties and financing the equity investment on a non-recourse basis. We generally retain customer control and operational services, and have minimal residual risk. We usually reserve the right to share in remarketing proceeds of the equipment on a subordinated basis after the investor has received an agreed-to return on its investment.

Credit Facility — Technology

Our subsidiary, ePlus Technology, inc., has a financing facility from GECDF to finance its working capital requirements for inventories and accounts receivable. There are two components of this facility: (1) a floor plan component; and (2) an accounts receivable component. This facility has full recourse to ePlus Technology, inc. and its subsidiary ePlus Technology Services, inc. and is secured by a blanket lien against all their assets, such as chattel paper, receivables and inventory. As of September 30, 2015, the facility had an aggregate limit of the two components of $250.0 million with an accounts receivable sub-limit of $30.0 million.

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Availability under the facility may be limited by the asset value of equipment we purchase or accounts receivable, and may be further limited by certain covenants and terms and conditions of the facility. These covenants include but are not limited to a minimum excess availability of the facility and minimum earnings before interest, taxes, depreciation and amortization of ePlus Technology, inc. and its subsidiary. We were in compliance with these covenants as of September 30, 2015. Interest on the facility is assessed at a rate of the One Month LIBOR plus two and one half percent if the payments are not made on the three specified dates each month. The facility also requires that financial statements of ePlus Technology, inc. and its subsidiarybe provided within 45 days of each quarter and 90 days of each fiscal year end and also requires other operational reports be provided on a regular basis. Either party may terminate the facility with 90 days advance written notice.

We are not, and do not believe that we are reasonably likely to be, in breach of the GECDF credit facility. In addition, we do not believe that the covenants of the GECDF credit facility materially limit our ability to undertake financing. In this regard, the covenants apply only to our subsidiary, ePlus Technology, inc. and its subsidiary. This credit facility is secured by the assets of ePlus Technology, inc. and its subsidiary ePlus Technology Services, inc.and the guaranty as described below.

The facility provided by GECDF requires a guaranty of $10.5 million by ePlus inc. The guaranty requires ePlus inc. to deliver its annual audited financial statements by a certain date. We have delivered the annual audited financial statements for the year ended March 31, 2015, as required. The loss of the GECDF credit facility could have a material adverse effect on our future results as we currently rely on this facility and its components for daily working capital and liquidity for our technology segment and as an operational function of our accounts payable process.

Floor Plan Component

The traditional business of ePlus Technology, inc. and its subsidiaryas a seller of computer technology, related peripherals and software products, is in part financed through a floor plan component in which interest expense for the first thirty to sixty days, in general, is not charged. The floor plan liabilities are recorded as accounts payable—floor plan on our condensed consolidated balance sheets, as they are normally repaid within the fifteen to sixty-day time frame and represent assigned accounts payable originally generated with the manufacturer/distributor. In some cases we are able to pay invoices early and receive a discount, but if the fifteen to sixty-day obligation is not paid timely, interest is then assessed at stated contractual rates.

The respective floor plan component credit limits and actual outstanding balance payables for the dates indicated were as follows (in thousands):

Maximum Credit Limit at September 30, 2015	Balance as of September 30, 2015	Maximum Credit Limit at March 31,2015	Balance as of  March 31, 2015
$250,000	$127,053	$225,000	$99,418

Accounts Receivable Component

Included within the credit facility, ePlus Technology, inc. and its subsidiary have an accounts receivable component from GECDF, which has a revolving line of credit. On the due date of the invoices financed by the floor plan component, the invoices are paid by the accounts receivable component of the credit facility. The balance of the accounts receivable component is then reduced by payments from our available cash. The outstanding balance under the accounts receivable component is recorded as recourse notes payable on our consolidated balance sheets. There was no balance outstanding for the accounts receivable component at September 30, 2015 or March 31, 2015, while the maximum credit limit was $30.0 million for both periods.

Performance Guarantees

In the normal course of business, we may provide certain customers with performance guarantees, which are generally backed by surety bonds. In general, we would only be liable for the amount of these guarantees in the event of default in the performance of our obligations. We are in compliance with the 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 as defined in Item 303(a)(4)(ii) of Regulation S-K or other contractually narrow or limited purposes. As of September 30, 2015, we were not involved in any unconsolidated special purpose entity transactions.

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Adequacy of Capital Resources

The continued implementation of our business strategy will require a significant investment in both resources and managerial focus. In addition, we may selectively acquire other companies that have attractive customer relationships and skilled sales and/or engineering forces. We may also start offices in new geographic areas, which may require a significant investment of cash. We may also acquire technology companies to expand and enhance the platform of bundled solutions to provide additional functionality and value-added services. We may continue to use our internally generated funds to finance investments in leased assets or investments in notes receivables due from our customers. As a result, we may require additional financing to fund our strategy, implementation and potential future acquisitions, which may include additional debt and equity financing.

Inflation

For the periods presented herein, inflation has been relatively low and we believe that inflation has not had a material effect on our results of operations.

Potential Fluctuations in Quarterly Operating Results

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

Our quarterly results of operations are susceptible to fluctuations for a number of reasons, including, but not limited to, reduction in IT spending, any reduction of expected residual values related to the equipment under our leases, the timing and mix of specific transactions, the reduction of manufacturer incentive programs, and other factors. Quarterly operating results could also fluctuate as a result of our sale of equipment in our lease portfolio at the expiration of a lease term or prior to such expiration, to a lessee or to a third party and the transfer of financial assets. Sales of equipment and transfers of financial assets may have the effect of increasing revenues and net income during the quarter in which the sale occurs, and reducing revenues and net income otherwise expected in subsequent quarters. See Part I, Item 1A, “Risk Factors,” in our 2015 Annual Report.

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

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Item 3. Quantitative and Qualitative Disclosures About Market Risk

Although a portion of our liabilities are non-recourse, fixed-interest-rate instruments, we utilize our line of credit and other financing facilities which are subject to fluctuations in short-term interest rates. These instruments, which are denominated in U.S. dollars, were entered into for other than trading purposes and, with the exception of amounts drawn under the GECDF facility, bear interest at a fixed rate. Because the interest rate on these instruments is fixed, changes in interest rates will not directly impact our cash flows. Changes in interest rates may affect our ability to fund or transfer our financing arrangements if the rate rises above the fixed rate of the instrument. Borrowings under the GECDF facility bear interest at a market-based variable rate. As of September 30, 2015, the aggregate fair value of our non-recourse notes payable approximated their carrying value.

We have financed certain customer leases for equipment which is located in Canada and Iceland. As such, we have entered into lease contracts and non-recourse, fixed-interest-rate financing denominated in Canadian dollars and Icelandic krona. To date, our Canadian and Icelandic operations have been insignificant and we believe that potential fluctuations in currency exchange rates will not have a material effect on our financial position. We also transact business in other foreign currencies which are subject to fluctuations, however, the dollar volume of these transactions is immaterial.

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 time 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 September 30, 2015.

Changes in Internal Controls

There have not been any changes in our internal control over financial reporting during the quarter ended September 30, 2015, which have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Limitations on the Effectiveness of Controls

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

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PART II.  OTHER INFORMATION

Item 1. Legal Proceedings

We were the plaintiff in a lawsuit in the United States District Court for the Eastern District of Virginia (“the Trial Court”) in which, on January 27, 2011, a jury unanimously found that Lawson Software, Inc. (“Lawson”) infringed certain ePlus patents. On August 16, 2013, the Trial Court found, by clear and convincing evidence, that Lawson was in contempt of the Trial Court’s May 23, 2011, injunction which restricted Lawson from taking certain actions that infringed one our patents. Lawson appealed, and while the appeal was pending, on April 3, 2014, the United States Patent and Trademark Office issued a notice canceling the patent. On July 25, 2014, the Appeals Court vacated the injunction and the contempt order. On June 18, 2015, the Appeals Court, in a 5-5 split opinion, denied our petition for rehearing. We intend to ask the United States Supreme Court to consider the case.

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

Other Matters

We may become party to various legal proceedings arising in the ordinary course of business including preference payment claims asserted in customer bankruptcy proceedings, claims of alleged infringement of patents, trademarks, copyrights and other intellectual property rights, claims of alleged non-compliance with contract provisions, employment related claims, claims by competitors, vendors or customers, claims related to alleged violations of laws and regulations, and claims relating to alleged security or privacy breaches. Although we do not expect that the outcome in any of these matters, individually or collectively, will have a material adverse effect on our financial condition or results of operations, litigation is inherently unpredictable. Therefore, judgments could be rendered or settlements entered that could adversely affect our results of operations or cash flows in a particular period. We provide for costs related to contingencies when a loss is probable and the amount is reasonably determinable.

Item 1A. Risk Factors

There have not been any material changes in the risk factors previously disclosed in Part I, Item 1A of our 2015 Annual Report. 

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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

The following table provides information regarding our purchases of ePlus inc. common stock during the six months ended September 30, 2015.

Period	Total number of shares purchased (1)		Average price paid per share		Total number of shares purchased as part of publicly announced plans or programs		Maximum number (or approximate dollar value) of shares that may yet be purchased under the plans or programs
April 1, 2015 through April 30, 2015		-				-		351,960	(2)
May 1, 2015 through May 31, 2015		-				-		351,960	(3)
June 1, 2015 through June 15, 2015		18,284	$	82.63		-		351,960	(4)
June 16, 2015 through August 16, 2015		12,163	$	79.32		-		-	(5)
August 17, 2015 through August 31, 2015		-		n/a		-		500,000	(6)
September 1, 2015 through September 30, 2015		-		n/a		-		500,000	(7)

(1) All shares acquired were in open-market purchases, except for 30,447 shares, which were repurchased to satisfy tax withholding obligations that arose due to the vesting of shares of restricted stock.

(2) The share purchase authorization in place for the month ended April 30, 2015 had purchase limitations on the number of shares of up to 500,000 shares. As of April 30, 2015, the remaining authorized shares to be purchased were 351,960.

(3) The share purchase authorization in place for the month ended May 31, 2015 had purchase limitations on the number of shares of up to 500,000 shares. As of May 31, 2015, the remaining authorized shares to be purchased were 351,960.

(4) The share purchase authorization expired June 15, 2015 and had purchase limitations on the number of shares of up to 500,000 shares. As of June 15, 2015, the remaining number of authorized shares that could have been purchased was 351,960.

(5) There was no share purchase authorization plan in place from June 16, 2015 to August 16, 2015. The previous plan expired on June 15, 2015.

(6) On August 13, 2015, the board of directors authorized the company to repurchase up to 500,000 shares of its outstanding common stock commencing on August 17, 2015 through August 16, 2016. As of August 31, 2015, no stock purchases have been made under this authorization.

(7) The share purchase authorization in place for the month ended September 30, 2015 had purchase limitations on the number of shares of up to 500,000 shares. As of September 30, 2015, no stock purchases have been made under this authorization.

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

Item 3. Defaults Upon Senior Securities

Not Applicable.

Item 4. Mine Safety Disclosures

Not Applicable.

Item 5. Other Information

None.

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Item 6. Exhibits

10.1	Amendment No. 3 to Amended and Restated Agreement for Wholesale Financing, dated October 20, 2015, by and among ePlus Technology, inc. and its subsidary ePlus Technology Services, inc. and GE Commercial Distribution Finance Corporation.
10.2	Amendment No. 3 to Amended and Restated Agreement for Business Financing, dated October 20, 2015, by and among ePlus Technology, inc. and its subsidary ePlus Technology Services, inc. and GE Commercial Distribution Finance Corporation.
31.1	Certification of the Chief Executive Officer of ePlus inc. pursuant to the Securities Exchange Act Rules 13a-14(a) and 15d-14(a).
31.2	Certification of the Chief Financial Officer of ePlus inc. pursuant to the Securities Exchange Act Rules 13a-14(a) and 15d-14(a).
32	Certification of the Chief Executive Officer and Chief Financial Officer of ePlus inc. pursuant to 18 U.S.C. § 1350.
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

41

SIGNATURES

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

	ePlus inc.
Date: November 4, 2015	/s/ PHILLIP G. NORTON
	By: Phillip G. Norton, Chairman of the Board,
	President and Chief Executive Officer
	(Principal Executive Officer)
Date: November 4, 2015	/s/ ELAINE D. MARION
	By: Elaine D. Marion
	Chief Financial Officer
	(Principal Financial Officer)

42

EX-10.1

Exhibit 10.1

AMENDMENT #3 TO AMENDED AND RESTATED AGREEMENT FOR WHOLESALE FINANCING

This Amendment #3 to Amended and Restated Agreement for Wholesale Financing (“Amendment”) is entered into by and amongePlus Technology, inc. (“Technology”) and ePlus Technology Services, inc. (“Services”; and together with Technology, each sometimes referred to as a “Dealer”, and sometimes referred to collectively, jointly and severally, as “Dealer”) and GE Commercial Distribution Finance LLC (f/k/a GE Commercial Distribution Finance Corporation)("CDF") and is to that certain Amended and Restated Agreement for Wholesale Financing dated July 23, 2012, by and between Technology and CDF (as the same has been amended, restated, amended and restated, modified, extended, renewed substituted, and/or supplemented, the "Agreement"). All terms which are not defined herein shall have the same meaning in this Amendment as in the Agreement.

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

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

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

“This Amended and Restated Agreement for Wholesale Financing (“Agreement”) is made as of July, 23, 2012, by and among GE Commercial Distribution Finance LLC (f/k/a GE Commercial Distribution Finance Corporation) (“CDF”) and ePlus Technology, inc. (“Technology”) and ePlus Technology Services, inc. (“Services”; and together with Technology, each sometimes referred to as a “Dealer”, and sometimes referred to collectively, jointly and severally, as “Dealer”). This Agreement amends and restates in its entirety the following agreement between the parties or their predecessors: Agreement for Wholesale Financing dated August 31, 2000, and any and all amendments thereto.”

2. Section 4 of the Agreement is hereby deleted in its entirety and replaced with the following:

“Grant of Security Interest. To secure payment of each Dealer’s current and future debts to CDF, whether under this Agreement or any current or future guaranty or other agreement, each Dealer grants CDF a security interest in all of each Dealer’s inventory, equipment, fixtures, accounts, contract rights, chattel paper, security agreements, instruments, deposit accounts, reserves, documents, and general intangibles; and all judgments, claims, insurance policies, and payments owed or made to each Dealer thereon; all whether now owned or hereafter acquired, all attachments, accessories, accessions, returns, repossessions, exchanges, substitutions and replacements thereto, and all proceeds thereof. All such assets are collectively referred to herein as the “Collateral.”  All of such terms for which meanings are provided in the Uniform Commercial Code of the applicable state are used herein with such meanings. All Collateral financed by CDF, and all proceeds thereof, will be held in trust by each Dealer for CDF, with such proceeds being payable in accordance with Section 10 of the Agreement.”

3. The following shall be added to the Agreement as Section 30:

“30. Multiple Dealers; Joint and Several Liability.

(a) All advances by CDF to and all other Obligations, as defined below, of any Dealer shall constitute one general obligation of each Dealer. Notwithstanding anything herein to the contrary, each Dealer shall be primarily and jointly and severally liable for all Obligations of any Dealer to CDF. Notwithstanding the foregoing, if and to the extent a Dealer is deemed to be a guarantor of another Dealer hereunder, such Dealer’s liability for any credit extended to or for the benefit of such other Dealer shall be deemed to be a guaranty of payment and performance, and not merely a guaranty of collection. To the fullest extent permitted by law, each Dealer hereby waives promptness, diligence, notice of acceptance, and any other notices of any nature whatsoever with respect to any of the Obligations, and any requirement that CDF protect, secure, perfect or insure any security interest or lien or any property subject thereto or exhaust any right or take any action against any other Dealer, any Guarantor, as defined below, any other person or any Collateral. Each Dealer agrees that any rights of subrogation, indemnification, reimbursement or any similar rights it may have against any other Dealer with respect to its liability hereunder or otherwise, whether such rights arise under an express or implied contract or by operation of law, shall be subject, junior and subordinate in all respect to all Obligations of such Dealer to CDF and that the enforcement of such rights shall be stayed until such time as the Dealer shall have indefeasibly paid in full all of the Obligations and CDF shall be under no duty to extend credit to or for the benefit of any Dealer. The liability of each Dealer shall be absolute and unconditional irrespective of (i) any change in the time, manner or place of payment of, or in any other term of, any of the Obligations, or any other amendment or waiver of or any consent to departure from this Agreement or any other agreement between or among any Dealer and CDF, (ii) any exchange, release or non-perfection of any Collateral or any release or amendment or waiver of or consent to departure from any other guaranty or any release of any Guarantor or any other person liable in whole or in part for all or any of the Obligations, (iii) the disallowance or avoidance of all or any portion of CDF’s claim(s) for repayment of the Obligations of any Guarantor to CDF or of CDF’s interest in any security for such Obligations, or (iv) any other circumstance which might otherwise constitute a defense available to, or discharge of, a Dealer or a Guarantor or any other surety.

1

For the purposes of this Agreement, “Obligations” is defined as all liabilities and indebtedness now or hereafter arising, owing, due or payable from Dealer to CDF (and any of its subsidiaries and affiliates), including any third party claims against Dealer satisfied or acquired by CDF, whether primary or secondary, joint or several, direct, contingent, fixed or otherwise, and whether or not evidenced by instruments or evidences of indebtedness, and all covenants, agreements, warranties, duties and representations, whether such Obligations arise under this Agreement or any other agreements previously, now or hereafter executed by Dealer and delivered to CDF or by operation of law.

For the purposes of this Agreement, “Guarantor” is defined as a guarantor of any of the Obligations.

(b) Each Dealer (each, a “Principal”) hereby appoints each other Dealer (each, an “Agent”) as the Principal’s agent and attorney-in-fact (1) to take any action, (2) to execute any document or instrument, (3) to consent or agree to any amendment or other modification of this Agreement and/or any other agreements between or among any Dealer and CDF and/or any waiver of or departure from any of the terms hereof or thereof, (4) to perform any Obligation of the Principal, and (5) to give or receive any notice by or to any Dealer hereunder or thereunder; and in each case without regard to whether any such action is done in the name of an Agent or a Principal and, if done in the name of an Agent, without regard to whether such Agent’s capacity as agent or attorney-in-fact is so designated. Without limiting the generality of the foregoing, an Agent may request extensions of credit to or on behalf of any Dealer and/or incur any other Obligations for the account of any Dealer, and in any such event each Dealer shall be fully and jointly and severally bound by and liable for the actions of such Agent. CDF shall be entitled to rely absolutely and without duty of inquiry or investigation upon any agreement, request, communication or other notice given by an Agent under this Agreement and/or any other agreements between or among any Dealer and CDF (including without limitation, any request by an Agent to make credit extensions to or on behalf of itself and/or any Dealer) until three (3) Business Days after CDF shall have received written notice from each Principal of the revocation of this agency and power of attorney, which revocation shall constitute a Default.”

2

4. For the avoidance of doubt, each Dealer authorizes CDF to file financing statements describing CDF as “Secured Party,” Dealer as “Debtor” and indicating the Collateral.

5. For the avoidance of doubt, unless specifically otherwise provided in this Agreement, each reference to "Dealer" refers to each of Technology and Services individually and to Technology and Services collectively.

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

All other terms and provisions of the Agreement, to the extent not inconsistent with the foregoing, are ratified and remain unchanged and in full force and effect.

IN WITNESS WHEREOF, Dealer and CDF have executed this Amendment on this 20^th day of October, 2015.

EPLUS TECHNOLOGY, INC.		GE COMMERCIAL DISTRIBUTION FINANCE CORPORATION
By:	/s/ Elaine D. Marion	By:	/s/ Fahad Haroon
Print Name:	Elaine D. Marion, CFO	Print Name:	Fahad Haroon, Vice President
Date:	October 20, 2015	Date:	October 20, 2015

EPLUS TECHNOLOGY, INC.
By:	/s/ Elaine D. Marion
Print Name:	Elaine D. Marion, CFO
Date:	October 20, 2015

3

EX-10.2

Exhibit 10.2

AMENDMENT #3 TO AMENDED AND RESTATED BUSINESS FINANCING AGREEMENT

This Amendment #3 to Amended and Restated Business Financing Agreement (“Amendment”) is entered into by and amongePlus Technology, inc. (“Technology”) and ePlus Technology Services, inc. (“Services”; and together with Technology, each sometimes referred to as a “Dealer”, and sometimes referred to collectively, jointly and severally, as “Dealer”) and GE Commercial Distribution Finance LLC (f/k/a GE Commercial Distribution Finance Corporation)("CDF") and is to that certain Amended and Restated Business Financing Agreement dated July 23, 2012, by and between Technology and CDF (as the same has been amended, restated, amended and restated, modified, extended, renewed substituted, and/or supplemented, the "Agreement"). All terms which are not defined herein shall have the same meaning in this Amendment as in the Agreement.

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

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

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

“This Amended and Restated Business Finance Agreement (“Agreement”) is made as of July, 23, 2012, by and among GE Commercial Distribution Finance LLC (f/k/a GE Commercial Distribution Finance Corporation) (“CDF”) and ePlus Technology, inc. (“Technology”) and ePlus Technology Services, inc. (“Services”; and together with Technology, each sometimes referred to as a “Dealer”, and sometimes referred to collectively, jointly and severally, as “Dealer”). This Agreement amends and restates in its entirety the following agreement between the parties or their predecessors: Business Financing Agreement dated August 31, 2000, and any and all amendments thereto.”

2. Section 4 of the Agreement is hereby deleted in its entirety and replaced with the following:

“4. SECURITY COLLATERAL

4.1 Grant of Security Interest. To secure payment of each Dealer’s current and future Obligations and to secure each Dealer’s performance of all of the provisions under the Agreement and Other Agreements, each Dealer grants CDF a security interest in all of each Dealer’s inventory, equipment, fixtures, accounts, contract rights, chattel paper, security agreements, instruments, deposit accounts, reserves, documents, and general intangibles; and all judgments, claims, insurance policies, and payments owed or made to each Dealer thereon; all whether now owned or hereafter acquired, all attachments, accessories, accessions, returns, repossessions, exchanges, substitutions and replacements thereto, and all proceeds thereof. All such assets are collectively referred to herein as the “Collateral.” All of such terms for which meanings are provided in the Uniform Commercial Code of the applicable state are used herein with such meanings. Each Dealer covenants with CDF that CDF may realize upon all or part of any Collateral in any order it desires and any realization by any means upon any Collateral will not bar realization upon any other collateral. Each Dealer’s liability under the Agreement is direct and unconditional and will not be affected by the release or nonperfection of any security interest granted hereunder. All Collateral financed by CDF, and all proceeds thereof, will be held in trust by each Dealer for CDF, with such proceeds being payable in accordance with the Agreement.”

3. The following shall be added to the Agreement as Section 10:

“10. MULTIPLE DEALERS; JOINT AND SEVERAL LIABILITY

10.1 All advances by CDF to and all other Obligations of any Dealer shall constitute one general obligation of each Dealer. Notwithstanding anything herein to the contrary, each Dealer shall be primarily and jointly and severally liable for all Obligations of any Dealer to CDF. Notwithstanding the foregoing, if and to the extent a Dealer is deemed to be a guarantor of another Dealer hereunder, such Dealer’s liability for any credit extended to or for the benefit of such other Dealer shall be deemed to be a guaranty of payment and performance, and not merely a guaranty of collection. To the fullest extent permitted by law, each Dealer hereby waives promptness, diligence, notice of acceptance, and any other notices of any nature whatsoever with respect to any of the Obligations, and any requirement that CDF protect, secure, perfect or insure any security interest or lien or any property subject thereto or exhaust any right or take any action against any other Dealer, any Guarantor, any other person or any Collateral. Each Dealer agrees that any rights of subrogation, indemnification, reimbursement or any similar rights it may have against any other Dealer with respect to its liability hereunder or otherwise, whether such rights arise under an express or implied contract or by operation of law, shall be subject, junior and subordinate in all respect to all Obligations of such Dealer to CDF and that the enforcement of such rights shall be stayed until such time as the Dealer shall have indefeasibly paid in full all of the Obligations and CDF shall be under no duty to extend credit to or for the benefit of any Dealer. The liability of each Dealer shall be absolute and unconditional irrespective of (i) any change in the time, manner or place of payment of, or in any other term of, any of the Obligations, or any other amendment or waiver of or any consent to departure from this Agreement or any other agreement between or among any Dealer and CDF, (ii) any exchange, release or non-perfection of any Collateral or any release or amendment or waiver of or consent to departure from any other guaranty or any release of any Guarantor or any other person liable in whole or in part for all or any of the Obligations, (iii) the disallowance or avoidance of all or any portion of CDF’s claim(s) for repayment of the Obligations of any Guarantor to CDF or of CDF’s interest in any security for such Obligations, or (iv) any other circumstance which might otherwise constitute a defense available to, or discharge of, a Dealer or a Guarantor or any other surety.

1

10.2 Each Dealer (each, a “Principal”) hereby appoints each other Dealer (each, an “Agent”) as the Principal’s agent and attorney-in-fact (1) to take any action, (2) to execute any document or instrument, (3) to consent or agree to any amendment or other modification of this Agreement and/or any other agreements between or among any Dealer and CDF and/or any waiver of or departure from any of the terms hereof or thereof, (4) to perform any Obligation of the Principal, and (5) to give or receive any notice by or to any Dealer hereunder or thereunder; and in each case without regard to whether any such action is done in the name of an Agent or a Principal and, if done in the name of an Agent, without regard to whether such Agent’s capacity as agent or attorney-in-fact is so designated. Without limiting the generality of the foregoing, an Agent may request extensions of credit to or on behalf of any Dealer and/or incur any other Obligations for the account of any Dealer, and in any such event each Dealer shall be fully and jointly and severally bound by and liable for the actions of such Agent. CDF shall be entitled to rely absolutely and without duty of inquiry or investigation upon any agreement, request, communication or other notice given by an Agent under this Agreement and/or any other agreements between or among any Dealer and CDF (including without limitation, any request by an Agent to make credit extensions to or on behalf of itself and/or any Dealer) until three (3) Business Days after CDF shall have received written notice from each Principal of the revocation of this agency and power of attorney, which revocation shall constitute a Default.”

4. For the avoidance of doubt, each Dealer authorizes CDF to file financing statements describing CDF as “Secured Party,” Dealer as “Debtor” and indicating the Collateral.

5. For the avoidance of doubt, unless specifically otherwise provided in this Agreement, each reference to "Dealer" refers to each of Technology and Services individually and to Technology and Services collectively.

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

All other terms and provisions of the Agreement, to the extent not inconsistent with the foregoing, are ratified and remain unchanged and in full force and effect.

2

IN WITNESS WHEREOF, Dealer and CDF have executed this Amendment on this 20^th day of October, 2015.

EPLUS TECHNOLOGY, INC.		GE COMMERCIAL DISTRIBUTION FINANCE CORPORATION
By:	/s/ Elaine D. Marion	By:	/s/ Fahad Haroon
Print Name:	Elaine D. Marion, CFO	Print Name:	Fahad Haroon, Vice President
Date:	October 20, 2015	Date:	October 20, 2015

EPLUS TECHNOLOGY SERVICES, INC.
By:	/s/ Elaine D. Marion
Print Name:	Elaine D. Marion, CFO
Date:	October 20, 2015

3

EX-31.1

Exhibit 31.1

CERTIFICATION

I, Phillip G. Norton, certify that:

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

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

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

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

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

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

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

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

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

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

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

Date: November 4, 2015

/s/ PHILLIP G. NORTON

Phillip G. Norton

Chief Executive Officer

(Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Elaine D. Marion, certify that:

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

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

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

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

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

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

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

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

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

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

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

Date: November 4, 2015

/s/ ELAINE D. MARION

Elaine D. Marion

Chief Financial Officer

(Principal Financial Officer)

EX-32

Exhibit 32

CERTIFICATION

PURSUANT TO 18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO SECTION 906 OF THE

SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of ePlus inc. on Form 10-Q for the three months ended September 30, 2015, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), the undersigned hereby certify, pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that to the undersigned's best knowledge and belief:

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

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

Date: November 4, 2015

/s/ PHILLIP G. NORTON

Phillip G. Norton Chief Executive Officer

(Principal Executive Officer)

/s/ ELAINE D. MARION

Elaine D. Marion Chief Financial Officer

(Principal Financial Officer)

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

XML

EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Basic and diluted common shares outstanding [Abstract]
Weighted average common shares outstanding-basic (in shares)	7,274,000	7,320,000	7,249,000	7,412,000
Effect of dilutive shares (in shares)	23,000	25,000	61,000	49,000
Weighted average shares common outstanding-diluted (in shares)	7,297,000	7,345,000	7,310,000	7,461,000
Calculation of earnings per common share - basic [Abstract]
Net earnings	$ 15,679	$ 11,952	$ 24,493	$ 21,429
Net earnings attributable to participating securities	0	0	0	55
Net earnings attributable to common shareholders	$ 15,679	$ 11,952	$ 24,493	$ 21,374
Earnings per common share - basic (in dollars per share)	$ 2.16	$ 1.63	$ 3.38	$ 2.88
Calculation of earnings per common share - diluted [Abstract]
Net earnings attributable to common shareholders- basic	$ 15,679	$ 11,952	$ 24,493	$ 21,374
Add: undistributed earnings attributable to participating securities	0	0	0	1
Net earnings attributable to common shareholders- diluted	$ 15,679	$ 11,952	$ 24,493	$ 21,375
Earnings per common share - diluted (in dollars per share)	$ 2.15	$ 1.63	$ 3.35	$ 2.86
Unexercised stock options (in shares)	0	0	0	0

XML

FINANCING RECEIVABLES AND OPERATING LEASES (Details) - USD ($) $ in Thousands		3 Months Ended			6 Months Ended
		Sep. 30, 2015		Sep. 30, 2014	Sep. 30, 2015		Sep. 30, 2014	Mar. 31, 2015		Mar. 31, 2014
Financing Receivable, Allowance for Credit Losses [Line Items]
Reserve for credit losses		$ (5,528)		$ (5,820)	$ (5,528)		$ (5,820)	$ (5,623)		$ (5,752)
Reported as [Abstract]
Estimated unguaranteed residual values for direct financing lease		4,216			4,216			3,977
Accumulated amortization of initial direct cost		710			710			647
Financing receivables and operating leases					46,500		61,900
Gain on sale of financing receivables		2,500		900	4,000		3,200
Fair value of assets received from sale		84,400		37,600	108,700		93,800
Investment in operating lease equipment - net [Abstract]
Cost of equipment under operating lease		41,373			41,373			36,283
Accumulated depreciation		(18,470)			(18,470)			(18,354)
Investment in operating lease equipment - net	[1]	22,903			22,903			17,929
Unguaranteed residual value of operating lease equipment net		4,409			4,409			4,340
Notes Receivables [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Minimum payments		61,555			61,555			59,943
Estimated unguaranteed residual value		0	[2]		0	[2]		0	[3]
Initial direct costs, net of amortization		431	[4]		431	[4]		429	[5]
Unearned income		0			0			0
Reserve for credit losses		(3,584)		(3,673)	(3,584)		(3,673)	(3,573)		(3,364)
Total, net		58,402			58,402			56,799
Reported as [Abstract]
Current		30,811			30,811			33,484
Long-term		27,591			27,591			23,315
Total, net		58,402			58,402			56,799
Lease-Related Receivables [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Minimum payments		67,238			67,238			66,415
Estimated unguaranteed residual value		9,287	[2]		9,287	[2]		8,376	[3]
Initial direct costs, net of amortization		536	[4]		536	[4]		495	[5]
Unearned income		(5,403)			(5,403)			(5,233)
Reserve for credit losses		(848)		$ (1,004)	(848)		$ (1,004)	(881)		$ (1,024)
Total, net		70,810			70,810			69,172
Reported as [Abstract]
Current		33,457			33,457			33,425
Long-term		37,353			37,353			35,747
Total, net		70,810			70,810			69,172
Financing Receivables [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Minimum payments		128,793			128,793			126,358
Estimated unguaranteed residual value		9,287	[2]		9,287	[2]		8,376	[3]
Initial direct costs, net of amortization		967	[4]		967	[4]		924	[5]
Unearned income		(5,403)			(5,403)			(5,233)
Reserve for credit losses	[6]	(4,432)			(4,432)			(4,454)
Total, net		129,212			129,212			125,971
Reported as [Abstract]
Current		64,268			64,268			66,909
Long-term		64,944			64,944			59,062
Total, net		$ 129,212			$ 129,212			$ 125,971

[1] These totals include estimated unguaranteed residual values of $4,409 thousand and $4,340 thousand as of September 30, 2015 and March 31, 2015, respectively.

[2] Includes estimated unguaranteed residual values of $4,216 thousand for direct financing leases, which have been sold and accounted for as sales under ASC Topic, Transfers and Servicing.

[3] Includes estimated unguaranteed residual values of $3,977 thousand for direct financing leases which have been sold and accounted for as sales under Codification Topic, Transfers and Servicing.

[4] Initial direct costs are shown net of amortization of $710 thousand.

[5] Initial direct costs are shown net of amortization of $647 thousand.

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

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RESERVES FOR CREDIT LOSSES (Tables)

6 Months Ended

Sep. 30, 2015

RESERVES FOR CREDIT LOSSES [Abstract]

Activity in Reserves for Credit Losses

Activity in our reserves for credit losses for the six months ended September 30, 2015 and 2014 were as follows (in thousands):

	Accounts Receivable			Notes  Receivable		Lease-Related  Receivables			Total
Balance April 1, 2015	$	1,169		$	3,573	$	881		$	5,623
Provision for credit losses		46			11		(33	)		24
Write-offs and other		(119	)		-		-			(119	)
Balance September 30, 2015	$	1,096		$	3,584	$	848		$	5,528
	Accounts Receivable			Notes Receivable		Lease-Related  Receivables			Total
Balance April 1, 2014	$	1,364		$	3,364	$	1,024		$	5,752
Provision for credit losses		(99	)		309		11			221
Write-offs and other		(122	)		-		(31	)		(153	)
Balance September 30, 2014	$	1,143		$	3,673	$	1,004		$	5,820

Reserve for Credit Losses and Minimum Lease Payments Associated with Notes Receivable and Investment in Direct Financing and Sales-type Lease Balances Disaggregated on the Basis of Impairment Method

Our reserves for credit losses and minimum payments associated with our notes receivables and lease-related receivables disaggregated on the basis of our impairment method were as follows (in thousands):

	September 30, 2015				March 31, 2015
	Notes Receivable		Lease- Related Receivables		Notes Receivable		Lease- Related Receivables
Reserves for credit losses:
Ending balance: collectively evaluated for impairment	$	384	$	725	$	440	$	740
Ending balance: individually evaluated for impairment		3,200		123		3,133		141
Ending balance	$	3,584	$	848	$	3,573	$	881
Minimum payments:
Ending balance: collectively evaluated for impairment	$	58,035	$	67,096	$	56,525	$	66,255
Ending balance: individually evaluated for impairment		3,520		142		3,418		160
Ending balance	$	61,555	$	67,238	$	59,943	$	66,415

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

The age of the recorded minimum lease payments and net credit exposure associated with our investment in direct financing and sales-type leases that are past due disaggregated based on our internally assigned credit quality rating (“CQR”) were as follows as of September 30, 2015 and March 31, 2015 (in thousands):

	31-60 Days Past Due		61-90 Days Past Due		Greater than 90 Days Past Due		Total Past Due		Current		Unbilled Minimum Lease Payments		Total Minimum Lease Payments		Unearned Income			Non- Recourse Notes Payable			Net Credit Exposure
September 30, 2015
High CQR	$	131	$	83	$	186	$	400	$	193	$	47,143	$	47,736	$	(2,744	)	$	(10,664	)	$	34,328
Average CQR		3		-		102		105		64		19,191		19,360		(1,454	)		(6,077	)		11,829
Low CQR		-		-		142		142		-		-		142		(19	)		-			123
Total	$	134	$	83	$	430	$	647	$	257	$	66,334	$	67,238	$	(4,217	)	$	(16,741	)	$	46,280
March 31, 2015
High CQR	$	70	$	185	$	133	$	388	$	430	$	41,213	$	42,031	$	(2,340	)	$	(16,561	)	$	23,130
Average CQR		15		68		19		102		75		24,047		24,224		(1,742	)		(9,397	)		13,085
Low CQR		-		-		-		-		-		160		160		(19	)		-			141
Total	$	85	$	253	$	152	$	490	$	505	$	65,420	$	66,415	$	(4,101	)	$	(25,958	)	$	36,356

Balance Disaggregated Based on Internally Assigned CQR

The age of the recorded notes receivable balance disaggregated based on our internally assigned CQR were as follows as September 30, 2015 and March 31, 2015 (in thousands):

	31-60 Days Past Due		61-90 Days Past Due		Greater than 90 Days Past Due		Total Past Due		Current		Unbilled Notes Receivable		Total Notes Receivable		Non- Recourse Notes Payable			Net Credit Exposure
September 30, 2015
High CQR	$	-	$	5	$	174	$	179	$	34	$	44,843	$	45,056	$	(25,890	)	$	19,166
Average CQR		6		6		118		130		202		12,647		12,979		(7,763	)		5,216
Low CQR		-		-		3,520		3,520		-		-		3,520		-			3,520
Total	$	6	$	11	$	3,812	$	3,829	$	236	$	57,490	$	61,555	$	(33,653	)	$	27,902
March 31, 2015
High CQR	$	338	$	260	$	161	$	759	$	2,455	$	35,996	$	39,210	$	(18,255	)	$	20,955
Average CQR		57		-		-		57		376		16,882		17,315		(11,665	)		5,650
Low CQR		-		-		656		656		-		2,762		3,418		-			3,418
Total	$	395	$	260	$	817	$	1,472	$	2,831	$	55,640	$	59,943	$	(29,920	)	$	30,023

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INCOME TAXES (Details) - USD ($) $ in Thousands	Sep. 30, 2015	Sep. 30, 2014
INCOME TAXES [Abstract]
Gross liability related to uncertain tax positions	$ 72
Impact of recognizing the unrecognized tax benefit	102
Accrued interest on income taxes	$ 46	$ 67

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PROPERTY, EQUIPMENT OTHER ASSETS AND LIABILITIES (Details) - USD ($) $ in Thousands	Sep. 30, 2015	Mar. 31, 2015
Other current assets [Abstract]
Deposits & funds held in escrow	$ 916	$ 4,281
Prepaid assets	3,120	2,652
Other	682	480
Total other current assets	4,718	7,413
Other assets [Abstract]
Deferred costs	2,302	2,308
Property and equipment, net	5,957	6,127
Other	710	1,045
Total other assets - long term	8,969	9,480
Other current liabilities [Abstract]
Accrued expenses	6,590	5,302
Deferred compensation	0	222
Other	9,886	8,051
Total other current liabilities	16,476	13,575
Other liabilities [Abstract]
Deferred revenue	2,382	2,923
Other	895	890
Total other liabilities - long term	$ 3,277	$ 3,813

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FINANCING RECEIVABLES AND OPERATING LEASES

6 Months Ended

Sep. 30, 2015

FINANCING RECEIVABLES AND OPERATING LEASES [Abstract]

FINANCING RECEIVABLES AND OPERATING LEASES

2. FINANCING RECEIVABLES AND OPERATING LEASES

Our financing receivables and operating leases consist of assets that we financed for our customers, which we manage as a portfolio of investments. Equipment financed for our customers are accounted for as investments in direct financing, sales-type or operating leases in accordance with Accounting Standards Codification (“ASC”) Topic 840, Leases. We also finance third-party software, maintenance, and services for our customers, which are classified as notes receivables. Our notes receivables are interest bearing and are often due over a period of time that corresponds with the terms of the leased products.

FINANCING RECEIVABLES—NET

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

September 30, 2015	Notes Receivables			Lease-Related Receivables			Total Financing Receivables
Minimum payments	$	61,555		$	67,238		$	128,793
Estimated unguaranteed residual value (1)		-			9,287			9,287
Initial direct costs, net of amortization (2)		431			536			967
Unearned income		-			(5,403	)		(5,403	)
Reserve for credit losses (3)		(3,584	)		(848	)		(4,432	)
Total, net	$	58,402		$	70,810		$	129,212
Reported as:
Current	$	30,811		$	33,457		$	64,268
Long-term		27,591			37,353			64,944
Total, net	$	58,402		$	70,810		$	129,212

(1) Includes estimated unguaranteed residual values of $4,216 thousand for direct financing leases, which have been sold and accounted for as sales under ASC Topic, Transfers and Servicing.

(2) Initial direct costs are shown net of amortization of $710 thousand.

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

March 31, 2015	Notes Receivables			Lease-Related Receivables			Total Financing Receivables
Minimum payments	$	59,943		$	66,415		$	126,358
Estimated unguaranteed residual value (1)		-			8,376			8,376
Initial direct costs, net of amortization (2)		429			495			924
Unearned income		-			(5,233	)		(5,233	)
Reserve for credit losses (3)		(3,573	)		(881	)		(4,454	)
Total, net	$	56,799		$	69,172		$	125,971
Reported as:
Current	$	33,484		$	33,425		$	66,909
Long-term		23,315			35,747			59,062
Total, net	$	56,799		$	69,172		$	125,971

(1) Includes estimated unguaranteed residual values of $3,977 thousand for direct financing leases which have been sold and accounted for as sales under ASC Topic, Transfers and Servicing.

(2) Initial direct costs are shown net of amortization of $647 thousand.

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

OPERATING LEASES—NET

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

	September 30, 2015			March 31, 2015
Cost of equipment under operating leases	$	41,373		$	36,283
Accumulated depreciation		(18,470	)		(18,354	)
Investment in operating lease equipment—net (1)	$	22,903		$	17,929

(1) These totals include estimated unguaranteed residual values of $4,409 thousand and $4,340 thousand as of September 30, 2015 and March 31, 2015, respectively.

TRANSFERS OF FINANCIAL ASSETS

We enter into arrangements to transfer the contractual payments due under financing receivables and operating leases, which are accounted for as sales or secured borrowings in accordance with ASC Topic, Transfers and Servicing. For transfers accounted for as a secured borrowing, the corresponding investments serve as collateral for non-recourse notes payable. As of September 30, 2015 and March 31, 2015, we had financing receivables and operating leases of $46.5 million and $61.9 million, respectively, which were collateral for non-recourse notes payable. See Note 6, “Notes Payable and Credit Facility.”

For transfers accounted for as sales, we derecognize the carrying value of the asset transferred and recognize a net gain or loss on the sale, which is presented within net sales in the unaudited condensed consolidated statement of operations. During the three months ended September 30, 2015 and 2014, we recognized net gains of $2.5 million and $0.9 million, respectively. The fair value of assets received from these sales was $84.4 million and $37.6 million for the three months ended September 30, 2015 and 2014, respectively. During the six months ended September 30, 2015 and 2014, we recognized net gains of $4.0 million and $3.2 million, respectively. The fair value of assets received from these sales was $108.7 million and $93.8 million for the six months ended September 30, 2015 and 2014, respectively.

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FAIR VALUE OF FINANCIAL INSTRUMENTS (Details) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Sep. 30, 2015	Sep. 30, 2015	Mar. 31, 2015
Assets [Abstract]
Money market funds	$ 39,504	$ 39,504	$ 25,004
Liabilities [Abstract]
Contingent consideration	2,145	2,145	1,830
Adjustment to fair value of contingent consideration	205	315
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member]
Assets [Abstract]
Money market funds	39,504	39,504	25,004
Liabilities [Abstract]
Contingent consideration	0	0	0
Significant Other Observable Inputs (Level 2) [Member]
Assets [Abstract]
Money market funds	0	0	0
Liabilities [Abstract]
Contingent consideration	0	0	0
Significant Unobservable Inputs (Level 3) [Member]
Assets [Abstract]
Money market funds	0	0	0
Liabilities [Abstract]
Contingent consideration	$ 2,145	$ 2,145	$ 1,830

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SHARE-BASED COMPENSATION (Tables)

6 Months Ended

Sep. 30, 2015

SHARE-BASED COMPENSATION [Abstract]

Summary of Nonvested Restricted Shares

A summary of the restricted shares is as follows:

	Number of Shares			Weighted Average Grant- date Fair Value
Nonvested April 1, 2015		176,514		$	52.75
Granted		125,125		$	81.76
Vested		(94,625	)	$	48.75
Forfeited		(2,321	)	$	64.06
Nonvested September 30, 2015		204,693		$	72.21

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EARNINGS PER SHARE (Tables)

6 Months Ended

Sep. 30, 2015

EARNINGS PER SHARE [Abstract]

Reconciliation of Numerators and Denominators Used to Calculate Basic and Diluted Earnings per Common Share

The following table provides a reconciliation of the numerators and denominators used to calculate basic and diluted net earnings per common share for the three and six months ended September 30, 2015 and September 30, 2014 (in thousands, except per share data).

	Three months ended September 30,				Six months ended September 30,
	2015		2014		2015		2014
Basic and diluted common shares outstanding:
Weighted average common shares outstanding — basic		7,274		7,320		7,249		7,412
Effect of dilutive shares		23		25		61		49
Weighted average shares common outstanding — diluted		7,297		7,345		7,310		7,461
Calculation of earnings per common share - basic:
Net earnings	$	15,679	$	11,952	$	24,493	$	21,429
Net earnings attributable to participating securities		-		-		-		55
Net earnings attributable to common shareholders	$	15,679	$	11,952	$	24,493	$	21,374
Earnings per common share - basic	$	2.16	$	1.63	$	3.38	$	2.88
Calculation of earnings per common share - diluted:
Net earnings attributable to common shareholders— basic	$	15,679	$	11,952	$	24,493	$	21,374
Add: undistributed earnings attributable to participating securities		-		-		-		1
Net earnings attributable to common shareholders— diluted	$	15,679	$	11,952	$	24,493	$	21,375
Earnings per common share - diluted	$	2.15	$	1.63	$	3.35	$	2.86

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SEGMENT REPORTING (Details) $ in Thousands	3 Months Ended		6 Months Ended
	Sep. 30, 2015 USD ($)	Sep. 30, 2014 USD ($)	Sep. 30, 2015 USD ($) Segment	Sep. 30, 2014 USD ($)	Mar. 31, 2015 USD ($)
SEGMENT REPORTING [Abstract]
Number of business segments | Segment			2
Segment Reporting Information [Line Items]
Sales of product and services	$ 324,259	$ 286,584	$ 583,955	$ 547,940
Financing revenues	10,279	9,059	18,625	17,933
Fee and other income	1,748	1,829	3,572	3,903
Net sales	336,286	297,472	606,152	569,776
Cost of sales, product and services	261,208	230,742	468,926	443,650
Direct lease costs	3,157	2,806	6,175	5,763
Cost of sales	264,365	233,548	475,101	449,413
Professional and other fees	1,513	1,577	3,031	3,410
Salaries and benefits	35,740	34,252	70,954	67,199
General and administrative expenses	7,585	7,158	14,364	13,431
Interest and financing costs	422	611	975	1,255
Operating expenses	45,260	43,598	89,324	85,295
Operating income	26,661	20,326	41,727	35,068
Other income	0	0	0	1,434
Earnings before tax	26,661	20,326	41,727	36,502
Depreciation and amortization	4,268	3,790	8,503	7,631
Purchases of property, equipment and operating lease equipment	8,694	1,450	15,618	1,919
Total assets	590,487	564,446	590,487	564,446	$ 571,546
Operating Segments [Member] | Technology [Member]
Segment Reporting Information [Line Items]
Sales of product and services	324,259	286,584	583,955	547,940
Financing revenues	0	0	0	0
Fee and other income	1,721	1,782	3,532	3,829
Net sales	325,980	288,366	587,487	551,769
Cost of sales, product and services	261,208	230,742	468,926	443,650
Direct lease costs	0	0	0	0
Cost of sales	261,208	230,742	468,926	443,650
Professional and other fees	1,305	1,321	2,567	2,907
Salaries and benefits	33,476	31,963	66,428	62,633
General and administrative expenses	7,322	6,703	13,851	12,461
Interest and financing costs	22	19	41	58
Operating expenses	42,125	40,006	82,887	78,059
Operating income			35,674	30,060
Other income			0	0
Earnings before tax	22,647	17,618	35,674	30,060
Depreciation and amortization	1,229	1,081	2,466	1,975
Purchases of property, equipment and operating lease equipment	576	744	1,194	1,086
Total assets	379,378	341,893	379,378	341,893
Operating Segments [Member] | Financing [Member]
Segment Reporting Information [Line Items]
Sales of product and services	0	0	0	0
Financing revenues	10,279	9,059	18,625	17,933
Fee and other income	27	47	40	74
Net sales	10,306	9,106	18,665	18,007
Cost of sales, product and services	0	0	0	0
Direct lease costs	3,157	2,806	6,175	5,763
Cost of sales	3,157	2,806	6,175	5,763
Professional and other fees	208	256	464	503
Salaries and benefits	2,264	2,289	4,526	4,566
General and administrative expenses	263	455	513	970
Interest and financing costs	400	592	934	1,197
Operating expenses	3,135	3,592	6,437	7,236
Operating income			6,053	5,008
Other income			0	1,434
Earnings before tax	4,014	2,708	6,053	6,442
Depreciation and amortization	3,039	2,709	6,037	5,656
Purchases of property, equipment and operating lease equipment	8,118	706	14,424	833
Total assets	$ 211,109	$ 222,553	$ 211,109	$ 222,553

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FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables)

6 Months Ended

Sep. 30, 2015

FAIR VALUE OF FINANCIAL INSTRUMENTS [Abstract]

Fair Value Hierarchy of Financial Instruments

The following table summarizes the fair value hierarchy of our financial instruments as of September 30, 2015 and March 31, 2015 (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)
September 30, 2015:
Assets:
Money market funds	$	39,504	$	39,504	$	-	$	-
Liabilities:
Contingent consideration	$	2,145	$	-	$	-	$	2,145

			Fair Value Measurement Using
	Recorded Amount		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable I nputs (Level 2)		Significant Unobservable Inputs (Level 3)
March 31, 2015:
Assets:
Money market funds	$	25,004	$	25,004	$	-	$	-
Liabilities:
Contingent consideration	$	1,830	$	-	$	-	$	1,830

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SEGMENT REPORTING (Tables)

6 Months Ended

Sep. 30, 2015

SEGMENT REPORTING [Abstract]

Segment Reporting Information, by Reportable Segment

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

	Three Months Ended
	September 30, 2015						September 30, 2014
	Technology		Financing		Total		Technology		Financing		Total
Sales of product and services	$	324,259	$	-	$	324,259	$	286,584	$	-	$	286,584
Financing revenue		-		10,279		10,279		-		9,059		9,059
Fee and other income		1,721		27		1,748		1,782		47		1,829
Net sales		325,980		10,306		336,286		288,366		9,106		297,472
Cost of sales, product and services		261,208		-		261,208		230,742		-		230,742
Direct lease costs		-		3,157		3,157		-		2,806		2,806
Cost of sales		261,208		3,157		264,365		230,742		2,806		233,548
Professional and other fees		1,305		208		1,513		1,321		256		1,577
Salaries and benefits		33,476		2,264		35,740		31,963		2,289		34,252
General and administrative expenses		7,322		263		7,585		6,703		455		7,158
Interest and financing costs		22		400		422		19		592		611
Operating expenses		42,125		3,135		45,260		40,006		3,592		43,598
Earnings before provision for income taxes	$	22,647	$	4,014	$	26,661	$	17,618	$	2,708	$	20,326
Depreciation and amortization	$	1,229	$	3,039	$	4,268	$	1,081	$	2,709	$	3,790
Purchases of property, equipment and operating lease equipment	$	576	$	8,118	$	8,694	$	744	$	706	$	1,450
Total assets	$	379,378	$	211,109	$	590,487	$	341,893	$	222,553	$	564,446

	Six Months Ended
	September 30, 2015						September 30, 2014
	Technology		Financing		Total		Technology		Financing		Total
Sales of product and services	$	583,955	$	-	$	583,955	$	547,940	$	-	$	547,940
Financing revenue		-		18,625		18,625		-		17,933		17,933
Fee and other income		3,532		40		3,572		3,829		74		3,903
Net sales		587,487		18,665		606,152		551,769		18,007		569,776
Cost of sales, product and services		468,926		-		468,926		443,650		-		443,650
Direct lease costs		-		6,175		6,175		-		5,763		5,763
Cost of sales		468,926		6,175		475,101		443,650		5,763		449,413
Professional and other fees		2,567		464		3,031		2,907		503		3,410
Salaries and benefits		66,428		4,526		70,954		62,633		4,566		67,199
General and administrative expenses		13,851		513		14,364		12,461		970		13,431
Interest and financing costs		41		934		975		58		1,197		1,255
Operating expenses		82,887		6,437		89,324		78,059		7,236		85,295
Operating income		35,674		6,053		41,727		30,060		5,008		35,068
Other income		-		-		-		-		1,434		1,434
Earnings before provision for income taxes	$	35,674	$	6,053	$	41,727	$	30,060	$	6,442	$	36,502
Depreciation and amortization	$	2,466	$	6,037	$	8,503	$	1,975	$	5,656	$	7,631
Purchases of property, equipment and operating lease equipment	$	1,194	$	14,424	$	15,618	$	1,086	$	833	$	1,919
Total assets	$	379,378	$	211,109	$	590,487	$	341,893	$	222,553	$	564,446

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ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

6 Months Ended

Sep. 30, 2015

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract]

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION — Our company was founded in 1990 and is a Delaware corporation. ePlus inc. is sometimes referred to in this Quarterly Report on Form 10-Q as “we,” “our,” “us,” or “ePlus.” The unaudited condensed consolidated financial statements include the accounts of ePlus inc. and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.

INTERIM FINANCIAL STATEMENTS — The condensed consolidated financial statements for the three and six months ended September 30, 2015 and 2014 were prepared by us, without audit, 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 and six months ended September 30, 2015 and 2014 are not necessarily indicative of results that may be expected for any other interim period or for the full fiscal year ending March 31, 2016 or any other future period. These unaudited condensed consolidated financial statements do not include all disclosures required by the accounting principles generally accepted in the United States (“U.S. GAAP”) for annual financial statements. Our audited consolidated financial statements are contained in our annual report on Form 10-K for the year ended March 31, 2015 (“2015 Annual Report”), which should be read in conjunction with these interim condensed consolidated financial statements.

USE OF ESTIMATES — The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Estimates are used when accounting for items and matters including, but not limited to, revenue recognition, residual values, vendor consideration, lease classification, goodwill and intangibles, reserves for credit losses, inventory obsolescence, and the recognition and measurement of income tax assets and other provisions and contingencies. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results may differ from these estimates.

The notes to the consolidated financial statements contained in the 2015 Annual Report include additional discussion of the significant accounting policies and estimates used in the preparation of our consolidated financial statements. There have been no material changes to our significant accounting policies and estimates during the six months ended September 30, 2015.

CONCENTRATIONS OF RISK —A substantial portion of our sales of product and services are from sales of Cisco Systems, Hewlett-Packard, and NetApp products, which represented approximately 50%, 7% and 4%, and 50%, 8% and 4%, respectively, of our technology segment sales of product and services for the three and six months ended September 30, 2015, as compared to 56%, 8%, and 6%, and 52%, 8%, and 6%, respectively, of our technology segment sales of product and services for the three and six months ended September 30, 2014. Any changes in our vendors’ ability to provide products could have a material adverse effect on our business, results of operations and financial condition.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS NOT YET ADOPTED — In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers, which will supersede all current US GAAP on this topic. The principle of ASU 2014-09 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which entity expects to be entitled in exchange for those goods or services. In August 2015, the FASB deferred the effective date of this standard by one year. Including the one-year deferral, the new guidance becomes effective for us in our quarter ending June 30, 2018, and early adoption is permitted for us in our quarter ending June 30, 2017. The standard can be applied either retrospectively to each period presented or as a cumulative-effect adjustment as of the date of adoption. We are currently evaluating the impact it will have on our financial statements and disclosures and have not yet selected our planned transition approach.

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ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - Sales Revenue, Goods and Services [Member]	3 Months Ended		6 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Cisco [Member]
CONCENTRATION OF RISK [Abstract]
Percentage of concentration risk	50.00%	56.00%	50.00%	52.00%
Hewlett Packard [Member]
CONCENTRATION OF RISK [Abstract]
Percentage of concentration risk	7.00%	8.00%	8.00%	8.00%
NetApp [Member]
CONCENTRATION OF RISK [Abstract]
Percentage of concentration risk	4.00%	6.00%	4.00%	6.00%

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STOCKHOLDERS' EQUITY (Details) - USD ($) $ / shares in Units, $ in Millions	6 Months Ended		168 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Aug. 13, 2015
STOCKHOLDERS' EQUITY [Abstract]
Authorized number of shares under stock repurchase program (in shares)	500,000		500,000	500,000
Common stock repurchased during the period (in shares)	0	651,019	5,600,000
Average cost of share repurchased (in dollars per share)		$ 50.31	$ 20.00
Common stock repurchased during the period		$ 32.8	$ 111.6
Shares repurchased to satisfy tax withholding obligation (in shares)	30,447	35,158
Value of Shares repurchased to satisfy tax withholding obligation	$ 2.5	$ 2.0

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UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Sep. 30, 2015	Mar. 31, 2015
Current assets:
Cash and cash equivalents	$ 62,842	$ 76,175
Accounts receivable-trade, net	259,089	218,458
Accounts receivable-other, net	31,740	31,345
Inventories-net	18,773	19,835
Financing receivables-net, current	64,268	66,909
Deferred costs	9,087	20,499
Deferred tax assets	3,643	3,643
Other current assets	4,718	7,413
Total current assets	454,160	444,277
Financing receivables and operating leases - net	87,847	76,991
Property, equipment and other assets	8,969	9,480
Goodwill and other intangible assets	39,511	40,798
TOTAL ASSETS	590,487	571,546
Current liabilities:
Accounts payable-equipment	11,369	20,330
Accounts payable-trade	46,707	46,090
Accounts payable-floor plan	127,053	99,418
Salaries and commissions payable	13,994	14,860
Deferred revenue	20,665	34,363
Recourse notes payable - current	1,204	889
Non-recourse notes payable - current	28,137	28,560
Other current liabilities	16,476	13,575
Total current liabilities	265,605	258,085
Recourse notes payable - long term	2,815	2,801
Non-recourse notes payable - long term	10,510	24,314
Deferred tax liability - long term	3,271	3,271
Other liabilities	3,277	3,813
TOTAL LIABILITIES	$ 285,478	$ 292,284
COMMITMENTS AND CONTINGENCIES (Note 7)
STOCKHOLDERS' EQUITY
Preferred stock, $.01 per share par value; 2,000 shares authorized; none issued or outstanding	$ 0	$ 0
Common stock, $.01 per share par value; 25,000 shares authorized; 13,237 issued and 7,482 outstanding at September 30, 2015 and 13,114 issued and 7,389 outstanding at March 31, 2015	132	131
Additional paid-in capital	114,934	111,072
Treasury stock, at cost, 5,755 and 5,725 shares at September 30, 2015 and March 31, 2015, respectively	(120,654)	(118,179)
Retained earnings	310,970	286,477
Accumulated other comprehensive income-foreign currency translation adjustment	(373)	(239)
Total Stockholders' Equity	305,009	279,262
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$ 590,487	$ 571,546

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BUSINESS COMBINATIONS (Details) - USD ($) $ in Thousands		6 Months Ended
	Aug. 18, 2014	Sep. 30, 2015	Mar. 31, 2015
Business Acquisition [Line Items]
Recognized goodwill related to acquisition		$ 34,112	$ 34,112
Evolve Technology Group [Member]
Business Acquisition [Line Items]
Purchase price	$ 10,500
Fair value of contingent consideration	2,000
Contingent consideration payout	2,500
Contingent consideration payout period		3 years
Other net assets	600
Evolve Technology Group [Member] | Customer Relationships [Member]
Business Acquisition [Line Items]
Identifiable intangible assets	4,000
Estimated useful life		6 years
Evolve Technology Group [Member] | Technology Reporting Unit [Member]
Business Acquisition [Line Items]
Recognized goodwill related to acquisition	$ 4,500

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UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	6 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Cash Flows From Operating Activities:
Net earnings	$ 24,493	$ 21,429
Adjustments to reconcile net earnings to net cash (used in) provided by operating activities:
Depreciation and amortization	8,503	7,631
Reserve for credit losses, inventory obsolescence and sales returns	(123)	245
Share-based compensation expense	2,711	2,247
Excess tax benefit from share-based compensation	(1,151)	(824)
Payments from lessees directly to lenders-operating leases	(2,560)	(4,445)
Gain on disposal of property, equipment and operating lease equipment	(517)	(2,120)
Gain on sale of financing receivables	(3,991)	(3,179)
Gain on settlement	0	(1,434)
Other	6	50
Changes in:
Accounts receivable - trade	(40,015)	13,236
Accounts receivable - other	(2,270)	(854)
Inventories	538	(7,006)
Financing receivables	(1,171)	(14,187)
Deferred costs, other intangible assets and other assets	11,035	1,333
Accounts payable-equipment	258	(162)
Accounts payable-trade	(7,442)	(29,315)
Salaries and commissions payable, deferred revenue and other liabilities	(10,964)	6,360
Net cash used in operating activities	(22,660)	(10,995)
Cash Flows From Investing Activities:
Maturities of supplemental benefit plan investments	0	2,544
Proceeds from sale of property, equipment and operating lease equipment	3,199	5,751
Purchases of property, equipment and operating lease equipment	(15,618)	(1,919)
Purchases of assets to be leased or financed	(9,363)	(10,000)
Issuance of financing receivables	(67,623)	(51,163)
Repayments of financing receivables	35,460	28,082
Proceeds from sale of financing receivables	26,021	12,341
Cash used in acquisitions, net of cash acquired	0	(7,818)
Net cash used in investing activities	(27,924)	(22,182)
Cash Flows From Financing Activities:
Borrowings of non-recourse and recourse notes payable	11,239	30,104
Repayments of non-recourse and recourse notes payable	(186)	(802)
Repurchase of common stock	(2,475)	(34,782)
Dividends paid	(80)	(90)
Excess tax benefit from share-based compensation	1,151	824
Net borrowings (repayments) on floor plan facility	27,635	20,694
Net cash provided by financing activities	37,284	15,948
Effect of exchange rate changes on cash	(33)	(9)
Net Decrease in Cash and Cash Equivalents	(13,333)	(17,238)
Cash and Cash Equivalents, Beginning of Period	76,175	80,179
Cash and Cash Equivalents, End of Period	62,842	62,941
Supplemental Disclosures of Cash Flow Information:
Cash paid for interest	50	128
Cash paid for income taxes	13,901	12,770
Schedule of Non-Cash Investing and Financing Activities:
Proceeds from sales of property, equipment and operating lease equipment	6,726	910
Purchase of property, equipment, and operating leases	(8,181)	(335)
Purchase of assets to be leased or financed included in accounts payable	(5,615)	(18,578)
Issuance of financing receivables	(76,876)	0
Repayment of financing receivables	8,671	0
Proceeds from sale of financing receivables	58,520	47,213
Borrowing of recourse and nonrecourse notes payable	31,715	0
Repayments of non-recourse and recourse notes payable	(16,462)	(19,171)
Vesting of share-based compensation	7,687	6,407
Contingent consideration	$ 0	$ 1,960

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RESERVES FOR CREDIT LOSSES (Details) - USD ($) $ in Thousands	6 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Mar. 31, 2015
Activity in reserves for credit losses [Roll Forward]
Balance	$ 5,623	$ 5,752
Provision for credit losses	24	221
Write-offs and other	(119)	(153)
Balance	5,528	5,820
Reserve for credit losses [Abstract]
Ending balance: individually evaluated for impairment			$ 3,700
Ending balance	5,623	5,752	5,528	$ 5,623
Accounts Receivable [Member]
Activity in reserves for credit losses [Roll Forward]
Balance	1,169	1,364
Provision for credit losses	46	(99)
Write-offs and other	(119)	(122)
Balance	1,096	1,143
Reserve for credit losses [Abstract]
Ending balance	1,169	1,364	1,096	1,169
Notes Receivable [Member]
Activity in reserves for credit losses [Roll Forward]
Balance	3,573	3,364
Provision for credit losses	11	309
Write-offs and other	0	0
Balance	3,584	3,673
Reserve for credit losses [Abstract]
Ending balance: collectively evaluated for impairment			384	440
Ending balance: individually evaluated for impairment			3,200	3,133
Ending balance	3,584	3,364	3,584	3,573
Minimum payments [Abstract]
Ending balance: collectively evaluated for impairment			58,035	56,525
Ending balance: individually evaluated for impairment			3,520	3,418
Ending balance			61,555	59,943
Lease-Related Receivables [Member]
Activity in reserves for credit losses [Roll Forward]
Balance	881	1,024
Provision for credit losses	(33)	11
Write-offs and other	0	(31)
Balance	848	1,004
Reserve for credit losses [Abstract]
Ending balance: collectively evaluated for impairment			725	740
Ending balance: individually evaluated for impairment			123	141
Ending balance	881	$ 1,024	848	881
Minimum payments [Abstract]
Ending balance: collectively evaluated for impairment			67,096	66,255
Ending balance: individually evaluated for impairment			142	160
Ending balance			67,238	66,415
Customer [Member]
Activity in reserves for credit losses [Roll Forward]
Balance	3,200
Balance	3,200
Reserve for credit losses [Abstract]
Ending balance: individually evaluated for impairment			3,200
Ending balance	$ 3,200		3,200	3,200
Minimum payments [Abstract]
Notes Receivable			$ 3,200	$ 3,200

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ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

6 Months Ended

Sep. 30, 2015

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract]

BASIS OF PRESENTATION

BASIS OF PRESENTATION — Our company was founded in 1990 and is a Delaware corporation. ePlus inc. is sometimes referred to in this Quarterly Report on Form 10-Q as “we,” “our,” “us,” or “ePlus.” The unaudited condensed consolidated financial statements include the accounts of ePlus inc. and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.

INTERIM FINANCIAL STATEMENTS

INTERIM FINANCIAL STATEMENTS — The condensed consolidated financial statements for the three and six months ended September 30, 2015 and 2014 were prepared by us, without audit, 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 and six months ended September 30, 2015 and 2014 are not necessarily indicative of results that may be expected for any other interim period or for the full fiscal year ending March 31, 2016 or any other future period. These unaudited condensed consolidated financial statements do not include all disclosures required by the accounting principles generally accepted in the United States (“U.S. GAAP”) for annual financial statements. Our audited consolidated financial statements are contained in our annual report on Form 10-K for the year ended March 31, 2015 (“2015 Annual Report”), which should be read in conjunction with these interim condensed consolidated financial statements.

USE OF ESTIMATES

USE OF ESTIMATES — The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Estimates are used when accounting for items and matters including, but not limited to, revenue recognition, residual values, vendor consideration, lease classification, goodwill and intangibles, reserves for credit losses, inventory obsolescence, and the recognition and measurement of income tax assets and other provisions and contingencies. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results may differ from these estimates.

The notes to the consolidated financial statements contained in the 2015 Annual Report include additional discussion of the significant accounting policies and estimates used in the preparation of our consolidated financial statements. There have been no material changes to our significant accounting policies and estimates during the six months ended September 30, 2015.

CONCENTRATIONS OF RISK

CONCENTRATIONS OF RISK —A substantial portion of our sales of product and services are from sales of Cisco Systems, Hewlett-Packard, and NetApp products, which represented approximately 50%, 7% and 4%, and 50%, 8% and 4%, respectively, of our technology segment sales of product and services for the three and six months ended September 30, 2015, as compared to 56%, 8%, and 6%, and 52%, 8%, and 6%, respectively, of our technology segment sales of product and services for the three and six months ended September 30, 2014. Any changes in our vendors’ ability to provide products could have a material adverse effect on our business, results of operations and financial condition.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS NOT YET ADOPTED

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS NOT YET ADOPTED — In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers, which will supersede all current US GAAP on this topic. The principle of ASU 2014-09 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which entity expects to be entitled in exchange for those goods or services. In August 2015, the FASB deferred the effective date of this standard by one year. Including the one-year deferral, the new guidance becomes effective for us in our quarter ending June 30, 2018, and early adoption is permitted for us in our quarter ending June 30, 2017. The standard can be applied either retrospectively to each period presented or as a cumulative-effect adjustment as of the date of adoption. We are currently evaluating the impact it will have on our financial statements and disclosures and have not yet selected our planned transition approach.

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RESERVES FOR CREDIT LOSSES, CQR (Details) - USD ($) $ in Thousands	Sep. 30, 2015	Mar. 31, 2015
Financing Receivable, Recorded Investment [Line Items]
Non-Recourse Notes Payable	$ (250,000)
Investment in Direct Financing and Sales-type Leases that are Past Due [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Past Due	647	$ 490
Current	257	505
Unbilled Minimum Lease Payments	66,334	65,420
Total Minimum Lease Payments	67,238	66,415
Unearned Income	(4,217)	(4,101)
Non-Recourse Notes Payable	(16,741)	(25,958)
Net Credit Exposure	46,280	36,356
Notes Receivable [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Past Due	3,829	1,472
Current	236	2,831
Unbilled Minimum Lease Payments	57,490	55,640
Total Minimum Lease Payments	61,555	59,943
Non-Recourse Notes Payable	(33,653)	(29,920)
Net Credit Exposure	27,902	30,023
31 to 60 Days Past Due [Member] | Investment in Direct Financing and Sales-type Leases that are Past Due [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Past Due	134	85
31 to 60 Days Past Due [Member] | Notes Receivable [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Past Due	6	395
61 to 90 Days Past Due [Member] | Investment in Direct Financing and Sales-type Leases that are Past Due [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Past Due	83	253
61 to 90 Days Past Due [Member] | Notes Receivable [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Past Due	11	260
Greater than 90 Days Past Due [Member] | Investment in Direct Financing and Sales-type Leases that are Past Due [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Past Due	430	152
Greater than 90 Days Past Due [Member] | Notes Receivable [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Past Due	$ 3,812	817
High CQR [Member]
Financing Receivable, Recorded Investment [Line Items]
Losses on net credit exposure, lower limit	0.00%
Losses on net credit exposure, upper limit	5.00%
High CQR [Member] | Investment in Direct Financing and Sales-type Leases that are Past Due [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Past Due	$ 400	388
Current	193	430
Unbilled Minimum Lease Payments	47,143	41,213
Total Minimum Lease Payments	47,736	42,031
Unearned Income	(2,744)	(2,340)
Non-Recourse Notes Payable	(10,664)	(16,561)
Net Credit Exposure	34,328	23,130
High CQR [Member] | Notes Receivable [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Past Due	179	759
Current	34	2,455
Unbilled Minimum Lease Payments	44,843	35,996
Total Minimum Lease Payments	45,056	39,210
Non-Recourse Notes Payable	(25,890)	(18,255)
Net Credit Exposure	19,166	20,955
High CQR [Member] | 31 to 60 Days Past Due [Member] | Investment in Direct Financing and Sales-type Leases that are Past Due [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Past Due	131	70
High CQR [Member] | 31 to 60 Days Past Due [Member] | Notes Receivable [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Past Due	0	338
High CQR [Member] | 61 to 90 Days Past Due [Member] | Investment in Direct Financing and Sales-type Leases that are Past Due [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Past Due	83	185
High CQR [Member] | 61 to 90 Days Past Due [Member] | Notes Receivable [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Past Due	5	260
High CQR [Member] | Greater than 90 Days Past Due [Member] | Investment in Direct Financing and Sales-type Leases that are Past Due [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Past Due	186	133
High CQR [Member] | Greater than 90 Days Past Due [Member] | Notes Receivable [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Past Due	$ 174	161
Average CQR [Member]
Financing Receivable, Recorded Investment [Line Items]
Losses on net credit exposure, lower limit	2.00%
Losses on net credit exposure, upper limit	15.00%
Average CQR [Member] | Investment in Direct Financing and Sales-type Leases that are Past Due [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Past Due	$ 105	102
Current	64	75
Unbilled Minimum Lease Payments	19,191	24,047
Total Minimum Lease Payments	19,360	24,224
Unearned Income	(1,454)	(1,742)
Non-Recourse Notes Payable	(6,077)	(9,397)
Net Credit Exposure	11,829	13,085
Average CQR [Member] | Notes Receivable [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Past Due	130	57
Current	202	376
Unbilled Minimum Lease Payments	12,647	16,882
Total Minimum Lease Payments	12,979	17,315
Non-Recourse Notes Payable	(7,763)	(11,665)
Net Credit Exposure	5,216	5,650
Average CQR [Member] | 31 to 60 Days Past Due [Member] | Investment in Direct Financing and Sales-type Leases that are Past Due [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Past Due	3	15
Average CQR [Member] | 31 to 60 Days Past Due [Member] | Notes Receivable [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Past Due	6	57
Average CQR [Member] | 61 to 90 Days Past Due [Member] | Investment in Direct Financing and Sales-type Leases that are Past Due [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Past Due	0	68
Average CQR [Member] | 61 to 90 Days Past Due [Member] | Notes Receivable [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Past Due	6	0
Average CQR [Member] | Greater than 90 Days Past Due [Member] | Investment in Direct Financing and Sales-type Leases that are Past Due [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Past Due	102	19
Average CQR [Member] | Greater than 90 Days Past Due [Member] | Notes Receivable [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Past Due	$ 118	0
Low CQR [Member]
Financing Receivable, Recorded Investment [Line Items]
Losses on net credit exposure, lower limit	15.00%
Losses on net credit exposure, upper limit	100.00%
Low CQR [Member] | Investment in Direct Financing and Sales-type Leases that are Past Due [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Past Due	$ 142	0
Current	0	0
Unbilled Minimum Lease Payments	0	160
Total Minimum Lease Payments	142	160
Unearned Income	(19)	(19)
Non-Recourse Notes Payable	0	0
Net Credit Exposure	123	141
Low CQR [Member] | Notes Receivable [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Past Due	3,520	656
Current	0	0
Unbilled Minimum Lease Payments	0	2,762
Total Minimum Lease Payments	3,520	3,418
Non-Recourse Notes Payable	0	0
Net Credit Exposure	3,520	3,418
Low CQR [Member] | 31 to 60 Days Past Due [Member] | Investment in Direct Financing and Sales-type Leases that are Past Due [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Past Due	0	0
Low CQR [Member] | 31 to 60 Days Past Due [Member] | Notes Receivable [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Past Due	0	0
Low CQR [Member] | 61 to 90 Days Past Due [Member] | Investment in Direct Financing and Sales-type Leases that are Past Due [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Past Due	0	0
Low CQR [Member] | 61 to 90 Days Past Due [Member] | Notes Receivable [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Past Due	0	0
Low CQR [Member] | Greater than 90 Days Past Due [Member] | Investment in Direct Financing and Sales-type Leases that are Past Due [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Past Due	142	0
Low CQR [Member] | Greater than 90 Days Past Due [Member] | Notes Receivable [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Past Due	$ 3,520	$ 656

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GOODWILL AND OTHER INTANGIBLE ASSETS (Tables)

6 Months Ended

Sep. 30, 2015

GOODWILL AND OTHER INTANGIBLE ASSETS [Abstract]

Components of Goodwill and Other Intangible Assets

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

	September 30, 2015							March 31, 2015
	Gross Carrying Amount		Accumulated Amortization / Impairment Loss			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization / Impairment Loss			Net Carrying Amount
Goodwill	$	42,785	$	(8,673	)	$	34,112	$	42,785	$	(8,673	)	$	34,112
Customer relationships & other intangibles		11,778		(7,389	)		4,389		12,005		(6,560	)		5,445
Capitalized software development		2,693		(1,683	)		1,010		2,693		(1,452	)		1,241
Total	$	57,256	$	(17,745	)	$	39,511	$	57,483	$	(16,685	)	$	40,798

Summary of Goodwill Allocated to Reporting Units

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

Reporting Unit	September 30, 2015		March 31, 2015
Technology	$	33,023	$	33,023
Software Document Management		1,089		1,089

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UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - 6 months ended Sep. 30, 2015 - 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, 2015	$ 131	$ 111,072	$ (118,179)	$ 286,477	$ (239)	$ 279,262
Balance (in shares) at Mar. 31, 2015	7,389					7,389
Excess tax benefit of share based compensation	$ 0	1,151	0	0	0	$ 1,151
Issuance of restricted stock awards	$ 1	0	0	0	0	1
Issuance of restricted stock awards (in shares)	123
Share-based compensation	$ 0	2,711	0	0	0	2,711
Repurchase of common stock	$ 0	0	(2,475)	0	0	(2,475)
Repurchase of common stock (in shares)	(30)
Net earnings	$ 0	0	0	24,493	0	24,493
Foreign currency translation adjustment	0	0	0	0	(134)	(134)
Balance at Sep. 30, 2015	$ 132	$ 114,934	$ (120,654)	$ 310,970	$ (373)	$ 305,009
Balance (in shares) at Sep. 30, 2015	7,482					7,482

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UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares shares in Thousands	Sep. 30, 2015	Mar. 31, 2015
STOCKHOLDERS' EQUITY
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized (in shares)	2,000	2,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	25,000	25,000
Common stock, shares issued (in shares)	13,237	13,114
Common stock, shares outstanding (in shares)	7,482	7,389
Treasury stock, shares (in shares)	5,755	5,725

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SHARE-BASED COMPENSATION

6 Months Ended

Sep. 30, 2015

SHARE-BASED COMPENSATION [Abstract]

SHARE-BASED COMPENSATION

10. SHARE-BASED COMPENSATION

Share-Based Plans

As of September 30, 2015, we had share-based awards outstanding under the followingplans: (1) the 2008 Non-Employee Director Long-Term Incentive Plan (“2008 Director LTIP”), and (2) the 2012 Employee Long-Term Incentive Plan ("2012 Employee LTIP"). All the share-based plans define fair market value as the previous trading day's closing price when the grant date falls on a date the stock was not traded.

For a summary of descriptions and vesting periods of the 2008 Director LTIP, and the 2012 Employee LTIP discussed above, refer to our 2015 Annual Report.

Restricted Stock Activity

For the six months ended September 30, 2015, we granted 6,151 restricted shares under the 2008 Director LTIP, and 118,974 restricted shares under the 2012 Employee LTIP. For the six months ended September 30, 2014, we granted 9,390 restricted shares under the 2008 Director LTIP, and 78,165 restricted shares under the 2012 Employee LTIP. A summary of the restricted shares is as follows:

	Number of Shares			Weighted Average Grant- date Fair Value
Nonvested April 1, 2015		176,514		$	52.75
Granted		125,125		$	81.76
Vested		(94,625	)	$	48.75
Forfeited		(2,321	)	$	64.06
Nonvested September 30, 2015		204,693		$	72.21

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

Compensation Expense

We recognize compensation cost for awards of restricted stock with graded vesting on a straight line basis over the requisite service period and estimate the forfeiture rate to be zero, which is based on historical experience. There are no additional conditions for vesting other than service conditions. During the three months ended September 30, 2015 and 2014, we recognized $1.5 million and $1.2 million, respectively, of total share-based compensation expense. During the six months ended September 30, 2015 and 2014, we recognized $2.7 million and $2.2 million, respectively, of total share-based compensation expense. Unrecognized compensation expense related to non-vested restricted stock was $13.0 million as of September 30, 2015, which will be fully recognized over the next fifty-seven months.

We also provide our employees with a contributory 401(k) plan. Employer contribution percentages are determined by us and are discretionary each year. The employer contributions vest pro-ratably over a four-year service period by the employees, after which all employer contributions will be fully vested. For the three months ended September 30, 2015 and 2014, our estimated contribution expense for the plan was $0.4 million and $0.3 million, respectively. For the six months ended September 30, 2015 and 2014, our estimated contribution expense for the plan was $0.7 million and $0.6 million, respectively.

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Document and Entity Information - shares	6 Months Ended
	Sep. 30, 2015	Oct. 30, 2015
Document and Entity Information [Abstract]
Entity Registrant Name	EPLUS INC
Entity Central Index Key	0001022408
Current Fiscal Year End Date	--03-31
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		7,482,008
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	Q2
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2015

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INCOME TAXES

6 Months Ended

Sep. 30, 2015

INCOME TAXES [Abstract]

INCOME TAXES

11. INCOME TAXES

We recognize interest and penalties for uncertain tax positions. As of September 30, 2015 our gross liability related to uncertain tax positions was $72 thousand. At September 30, 2015 if the unrecognized tax benefits of $72 thousand were to be recognized, including the effect of interest, penalties and federal tax benefit, the impact would be $102 thousand. We also recognize accrued interest and penalties related to unrecognized tax benefits as a component of tax expense. We did not recognize any additional penalties. We had $46 thousand and $67 thousand accrued for the payment of interest at September 30, 2015 and 2014, respectively

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UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS [Abstract]
Net sales	$ 336,286	$ 297,472	$ 606,152	$ 569,776
Cost of sales	264,365	233,548	475,101	449,413
Gross profit	71,921	63,924	131,051	120,363
Professional and other fees	1,513	1,577	3,031	3,410
Salaries and benefits	35,740	34,252	70,954	67,199
General and administrative expenses	7,585	7,158	14,364	13,431
Interest and financing costs	422	611	975	1,255
Operating expenses	45,260	43,598	89,324	85,295
Operating income	26,661	20,326	41,727	35,068
Other income	0	0	0	1,434
Earnings before tax	26,661	20,326	41,727	36,502
Provision for income taxes	10,982	8,374	17,234	15,073
Net earnings	$ 15,679	$ 11,952	$ 24,493	$ 21,429
Net earnings per common share-basic (In dollars per share)	$ 2.16	$ 1.63	$ 3.38	$ 2.88
Net earnings per common share-diluted (In dollars per share)	$ 2.15	$ 1.63	$ 3.35	$ 2.86
Weighted average common shares outstanding-basic (In shares)	7,274	7,320	7,249	7,412
Weighted average common shares outstanding-diluted (In shares)	7,297	7,345	7,310	7,461

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PROPERTY, EQUIPMENT OTHER ASSETS AND LIABILITIES

6 Months Ended

Sep. 30, 2015

PROPERTY, EQUIPMENT OTHER ASSETS AND LIABILITIES [Abstract]

PROPERTY, EQUIPMENT OTHER ASSETS AND LIABILITIES

5. PROPERTY, EQUIPMENT, OTHER ASSETS AND LIABILITIES

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

	September 30, 2015		March 31, 2015
Other current assets:
Deposits & funds held in escrow	$	916	$	4,281
Prepaid assets		3,120		2,652
Other		682		480
Total other current assets	$	4,718	$	7,413
Other assets:
Deferred costs	$	2,302	$	2,308
Property and equipment, net		5,957		6,127
Other		710		1,045
Total other assets - long term	$	8,969	$	9,480
	September 30, 2015		March 31, 2015
Other current liabilities:
Accrued expenses	$	6,590	$	5,302
Deferred compensation		-		222
Other		9,886		8,051
Total other current liabilities	$	16,476	$	13,575
Other liabilities:
Deferred revenue	$	2,382	$	2,923
Other		895		890
Total other liabilities - long term	$	3,277	$	3,813

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RESERVES FOR CREDIT LOSSES

6 Months Ended

Sep. 30, 2015

RESERVES FOR CREDIT LOSSES [Abstract]

RESERVES FOR CREDIT LOSSES

4. RESERVES FOR CREDIT LOSSES

Activity in our reserves for credit losses for the six months ended September 30, 2015 and 2014 were as follows (in thousands):

	Accounts Receivable			Notes  Receivable		Lease-Related  Receivables			Total
Balance April 1, 2015	$	1,169		$	3,573	$	881		$	5,623
Provision for credit losses		46			11		(33	)		24
Write-offs and other		(119	)		-		-			(119	)
Balance September 30, 2015	$	1,096		$	3,584	$	848		$	5,528
	Accounts Receivable			Notes Receivable		Lease-Related  Receivables			Total
Balance April 1, 2014	$	1,364		$	3,364	$	1,024		$	5,752
Provision for credit losses		(99	)		309		11			221
Write-offs and other		(122	)		-		(31	)		(153	)
Balance September 30, 2014	$	1,143		$	3,673	$	1,004		$	5,820

Our reserves for credit losses and minimum payments associated with our notes receivables and lease-related receivables disaggregated on the basis of our impairment method were as follows (in thousands):

	September 30, 2015				March 31, 2015
	Notes Receivable		Lease- Related Receivables		Notes Receivable		Lease- Related Receivables
Reserves for credit losses:
Ending balance: collectively evaluated for impairment	$	384	$	725	$	440	$	740
Ending balance: individually evaluated for impairment		3,200		123		3,133		141
Ending balance	$	3,584	$	848	$	3,573	$	881
Minimum payments:
Ending balance: collectively evaluated for impairment	$	58,035	$	67,096	$	56,525	$	66,255
Ending balance: individually evaluated for impairment		3,520		142		3,418		160
Ending balance	$	61,555	$	67,238	$	59,943	$	66,415

The net credit exposure for the balance evaluated individually for impairment as of September 30, 2015 was $3.7 million, $3.2 million of which is related to one customer. During fiscal year 2012, we began selling and financing various products and services to a large law firm, which filed for bankruptcy in May 2012. As of September 30, 2015, we had $3.2 million of notes and lease-related receivables from this customer and total reserves for credit losses of $3.2 million, which represented our estimated probable loss. As of March 31, 2015, we had $3.2 million of notes and lease-related receivables from this customer and total reserves for credit losses of $3.2 million. The note and lease receivables associated with this customer are on non-accrual status.

The age of the recorded minimum lease payments and net credit exposure associated with our investment in direct financing and sales-type leases that are past due disaggregated based on our internally assigned credit quality rating (“CQR”) were as follows as of September 30, 2015 and March 31, 2015 (in thousands):

	31-60 Days Past Due		61-90 Days Past Due		Greater than 90 Days Past Due		Total Past Due		Current		Unbilled Minimum Lease Payments		Total Minimum Lease Payments		Unearned Income			Non- Recourse Notes Payable			Net Credit Exposure
September 30, 2015
High CQR	$	131	$	83	$	186	$	400	$	193	$	47,143	$	47,736	$	(2,744	)	$	(10,664	)	$	34,328
Average CQR		3		-		102		105		64		19,191		19,360		(1,454	)		(6,077	)		11,829
Low CQR		-		-		142		142		-		-		142		(19	)		-			123
Total	$	134	$	83	$	430	$	647	$	257	$	66,334	$	67,238	$	(4,217	)	$	(16,741	)	$	46,280
March 31, 2015
High CQR	$	70	$	185	$	133	$	388	$	430	$	41,213	$	42,031	$	(2,340	)	$	(16,561	)	$	23,130
Average CQR		15		68		19		102		75		24,047		24,224		(1,742	)		(9,397	)		13,085
Low CQR		-		-		-		-		-		160		160		(19	)		-			141
Total	$	85	$	253	$	152	$	490	$	505	$	65,420	$	66,415	$	(4,101	)	$	(25,958	)	$	36,356

The age of the recorded notes receivable balance disaggregated based on our internally assigned CQR were as follows as September 30, 2015 and March 31, 2015 (in thousands):

	31-60 Days Past Due		61-90 Days Past Due		Greater than 90 Days Past Due		Total Past Due		Current		Unbilled Notes Receivable		Total Notes Receivable		Non- Recourse Notes Payable			Net Credit Exposure
September 30, 2015
High CQR	$	-	$	5	$	174	$	179	$	34	$	44,843	$	45,056	$	(25,890	)	$	19,166
Average CQR		6		6		118		130		202		12,647		12,979		(7,763	)		5,216
Low CQR		-		-		3,520		3,520		-		-		3,520		-			3,520
Total	$	6	$	11	$	3,812	$	3,829	$	236	$	57,490	$	61,555	$	(33,653	)	$	27,902
March 31, 2015
High CQR	$	338	$	260	$	161	$	759	$	2,455	$	35,996	$	39,210	$	(18,255	)	$	20,955
Average CQR		57		-		-		57		376		16,882		17,315		(11,665	)		5,650
Low CQR		-		-		656		656		-		2,762		3,418		-			3,418
Total	$	395	$	260	$	817	$	1,472	$	2,831	$	55,640	$	59,943	$	(29,920	)	$	30,023

We estimate losses on our net credit exposure to be between 0% - 5% for customers with highest CQR, as these customers are investment grade or the equivalent of investment grade. We estimate losses on our net credit exposure to be between 2% - 15% for customers with average CQR, and between 15% - 100% for customers with low CQR, which includes customers in bankruptcy.

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FINANCING RECEIVABLES AND OPERATING LEASES (Tables)

6 Months Ended

Sep. 30, 2015

FINANCING RECEIVABLES AND OPERATING LEASES [Abstract]

Components of Notes Receivable Net and Investments in Leases

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

September 30, 2015	Notes Receivables			Lease-Related Receivables			Total Financing Receivables
Minimum payments	$	61,555		$	67,238		$	128,793
Estimated unguaranteed residual value (1)		-			9,287			9,287
Initial direct costs, net of amortization (2)		431			536			967
Unearned income		-			(5,403	)		(5,403	)
Reserve for credit losses (3)		(3,584	)		(848	)		(4,432	)
Total, net	$	58,402		$	70,810		$	129,212
Reported as:
Current	$	30,811		$	33,457		$	64,268
Long-term		27,591			37,353			64,944
Total, net	$	58,402		$	70,810		$	129,212

(1) Includes estimated unguaranteed residual values of $4,216 thousand for direct financing leases, which have been sold and accounted for as sales under ASC Topic, Transfers and Servicing.

(2) Initial direct costs are shown net of amortization of $710 thousand.

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

March 31, 2015	Notes Receivables			Lease-Related Receivables			Total Financing Receivables
Minimum payments	$	59,943		$	66,415		$	126,358
Estimated unguaranteed residual value (1)		-			8,376			8,376
Initial direct costs, net of amortization (2)		429			495			924
Unearned income		-			(5,233	)		(5,233	)
Reserve for credit losses (3)		(3,573	)		(881	)		(4,454	)
Total, net	$	56,799		$	69,172		$	125,971
Reported as:
Current	$	33,484		$	33,425		$	66,909
Long-term		23,315			35,747			59,062
Total, net	$	56,799		$	69,172		$	125,971

(1) Includes estimated unguaranteed residual values of $3,977 thousand for direct financing leases which have been sold and accounted for as sales under ASC Topic, Transfers and Servicing.

(2) Initial direct costs are shown net of amortization of $647 thousand.

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

Investment in Operating Lease Equipment - Net

The components of the operating leases—net are as follows (in thousands):

	September 30, 2015			March 31, 2015
Cost of equipment under operating leases	$	41,373		$	36,283
Accumulated depreciation		(18,470	)		(18,354	)
Investment in operating lease equipment—net (1)	$	22,903		$	17,929

(1) These totals include estimated unguaranteed residual values of $4,409 thousand and $4,340 thousand as of September 30, 2015 and March 31, 2015, respectively.

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FAIR VALUE OF FINANCIAL INSTRUMENTS

6 Months Ended

Sep. 30, 2015

FAIR VALUE OF FINANCIAL INSTRUMENTS [Abstract]

FAIR VALUE OF FINANCIAL INSTRUMENTS

12. FAIR VALUE OF FINANCIAL INSTRUMENTS

We account for the fair values of our assets and liabilities in accordance with ASC Topic 820, Fair Value Measurement and Disclosure. The following table summarizes the fair value hierarchy of our financial instruments as of September 30, 2015 and March 31, 2015 (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)
September 30, 2015:
Assets:
Money market funds	$	39,504	$	39,504	$	-	$	-
Liabilities:
Contingent consideration	$	2,145	$	-	$	-	$	2,145

			Fair Value Measurement Using
	Recorded Amount		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable I nputs (Level 2)		Significant Unobservable Inputs (Level 3)
March 31, 2015:
Assets:
Money market funds	$	25,004	$	25,004	$	-	$	-
Liabilities:
Contingent consideration	$	1,830	$	-	$	-	$	1,830

For the three and six months ended September 30, 2015, we recorded adjustments that increased the fair value of our liability for contingent consideration by $205 thousand and $315 thousand, respectively, and such adjustments were presented within general and administrative expenses in our unaudited condensed consolidated statement of operations. There was no adjustment in fair value recognized in either the three or the six months ended September 30, 2014.

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EARNINGS PER SHARE

6 Months Ended

Sep. 30, 2015

EARNINGS PER SHARE [Abstract]

EARNINGS PER SHARE

8.EARNINGS PER SHARE

Basic earnings per share is computed by dividing net earnings attributable to common shares by the weighted average number of common shares outstanding for the period. Diluted net earnings per share include the potential dilution of securities that could participate in our earnings, but not securities that are anti-dilutive. In the past, certain unvested shares of restricted stock awards (“RSAs”) contained non-forfeitable rights to dividends, whether paid or unpaid. As a result, these RSAs were considered participating securities because their holders had the right to participate in earnings with common stockholders. We used the two-class method to allocate net income between common shares and other participating securities for the six months ended September 30, 2014. As of September 30, 2015, we had no unvested shares of RSAs that contained non-forfeitable rights to dividends. We no longer grant RSAs that contain non-forfeitable rights to dividends.

The following table provides a reconciliation of the numerators and denominators used to calculate basic and diluted net earnings per common share for the three and six months ended September 30, 2015 and September 30, 2014 (in thousands, except per share data).

	Three months ended September 30,				Six months ended September 30,
	2015		2014		2015		2014
Basic and diluted common shares outstanding:
Weighted average common shares outstanding — basic		7,274		7,320		7,249		7,412
Effect of dilutive shares		23		25		61		49
Weighted average shares common outstanding — diluted		7,297		7,345		7,310		7,461
Calculation of earnings per common share - basic:
Net earnings	$	15,679	$	11,952	$	24,493	$	21,429
Net earnings attributable to participating securities		-		-		-		55
Net earnings attributable to common shareholders	$	15,679	$	11,952	$	24,493	$	21,374
Earnings per common share - basic	$	2.16	$	1.63	$	3.38	$	2.88
Calculation of earnings per common share - diluted:
Net earnings attributable to common shareholders— basic	$	15,679	$	11,952	$	24,493	$	21,374
Add: undistributed earnings attributable to participating securities		-		-		-		1
Net earnings attributable to common shareholders— diluted	$	15,679	$	11,952	$	24,493	$	21,375
Earnings per common share - diluted	$	2.15	$	1.63	$	3.35	$	2.86

As of September 30, 2015 and 2014, we did not have any unexercised stock options.

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NOTES PAYABLE AND CREDIT FACILITY

6 Months Ended

Sep. 30, 2015

NOTES PAYABLE AND CREDIT FACILITY [Abstract]

NOTES PAYABLE AND CREDIT FACILITY

6. NOTES PAYABLE AND CREDIT FACILITY

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

	September 30, 2015		March 31, 2015
Recourse notes payable with interest rates ranging from 2.24% and 4.13% at September 30, 2015 and ranging from 2.24% and 4.13% at March 31, 2015.
Current	$	1,204	$	889
Long-term		2,815		2,801
Total recourse notes payable	$	4,019	$	3,690
Non-recourse notes payable secured by financing receivables and investments in operating leases with interest rates ranging from 1.70% to 7.50% at September 30, 2015 and ranging from 1.70% to 10.00% as of March 31, 2015.
Current	$	28,137	$	28,560
Long-term		10,510		24,314
Total non-recourse notes payable	$	38,647	$	52,874

Principal and interest payments on the non-recourse notes payable are generally due monthly in amounts that are approximately equal to the total payments due from the customer under the leases or notes receivable that collateralize the notes payable. The weighted average interest rate for our non-recourse notes payable was 3.18% and 3.23%, as of September 30, 2015 and March 31, 2015, respectively. The weighted average interest rate for our recourse notes payable was 3.21% and 3.19%, as of September 30, 2015 and March 31, 2015, respectively. Under recourse financing, in the event of a default by a customer, the lender has recourse to the customer, the assets serving as collateral, and us. Under non-recourse financing, in the event of a default by a customer, the lender generally only has recourse against the customer, and the assets serving as collateral, but not against us.

In May 2014, we entered into an agreement to repurchase the rights, title, and interest to payments due under a financing agreement. This financing agreement was previously assigned to a third party financial institution and accounted for as a secured borrowing. In conjunction with the repurchase agreement, we recognized a gain of $1.4 million in the six months ended September 30, 2014, which is presented within other income in our unaudited condensed consolidated statement of operations.

Our technology segment, through our subsidiary ePlus Technology, inc., finances its operations with funds generated from operations, and with a credit facility with GE Commercial Distribution Finance Corporation (“GECDF”). This facility provides short-term capital for our technology segment. There are two components of the GECDF credit facility: (1) a floor plan component and (2) an accounts receivable component. Under the floor plan component, we had outstanding balances of $127.1 million and $99.4 million as of September 30, 2015 and March 31, 2015, respectively. Under the accounts receivable component, we had no outstanding balances as of September 30, 2015 and March 31, 2015. As of September 30, 2015, the facility agreement had an aggregate limit of the two components of $250 million, and the accounts receivable component had a sub-limit of $30 million, which bears interest assessed at a rate of the One Month LIBOR plus two and one half percent.

The credit facility has full recourse to ePlus Technology, inc. and its subsidiary, ePlus Technology Services, inc., is secured by a blanket lien against all their assets, such as receivables and inventory. Availability under the facility may be limited by the asset value of equipment we purchase or accounts receivable, and may be further limited by certain covenants and terms and conditions of the facility. These covenants include but are not limited to a minimum excess availability of the facility and minimum earnings before interest, taxes, depreciation and amortization (“EBITDA”) of ePlus Technology, inc. and its subsidiary. We were in compliance with these covenants as of September 30, 2015. In addition, the facility restricts the ability of ePlus Technology, inc. and its subsidiaryto transfer funds to its affiliates in the form of dividends, loans or advances with certain exceptions for dividends to ePlus inc. The facility also requires that financial statements of ePlus Technology, inc. and its subsidiary be provided within 45 days of each quarter and 90 days of each fiscal year end and also includes that other operational reports be provided on a regular basis. Either party may terminate with 90 days’ advance notice. We are not, and do not believe that we are reasonably likely to be, in breach of the GECDF credit facility. In addition, we do not believe that the covenants of the GECDF credit facility materially limit our ability to undertake financing. In this regard, the covenants apply only to our subsidiary, ePlus Technology, inc. and its subsidiary.This credit facility is secured by the assets of ePlus Technology, inc. and its subsidiary, ePlus Technology Services, inc. and the guaranty as described below.

The facility provided by GECDF requires a guaranty of $10.5 million by ePlus inc. The guaranty requires ePlus inc. to deliver its annual audited financial statements by certain dates. We have delivered the annual audited financial statements for the year ended March 31, 2015, as required. The loss of the GECDF credit facility could have a material adverse effect on our future results as we currently rely on this facility and its components for daily working capital and liquidity for our technology segment and as an operational function of our accounts payable process.

Fair Value

As of September 30, 2015 and March 31, 2015, the fair value of our long-term recourse and non-recourse notes payable approximated their carrying value.

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COMMITMENTS AND CONTINGENCIES

6 Months Ended

Sep. 30, 2015

COMMITMENTS AND CONTINGENCIES [Abstract]

COMMITMENTS AND CONTINGENCIES

7. COMMITMENTS AND CONTINGENCIES

Legal Proceedings

We were the plaintiff in a lawsuit in the United States District Court for the Eastern District of Virginia (“the Trial Court”) in which, on January 27, 2011, a jury unanimously found that Lawson Software, Inc. (“Lawson”) infringed certain ePlus patents. On August 16, 2013, the Trial Court found, by clear and convincing evidence, that Lawson was in contempt of the Trial Court’s May 23, 2011, injunction which restricted Lawson from taking certain actions that infringed one of our patents. Lawson appealed, and while the appeal was pending, on April 3, 2014, the United States Patent and Trademark Office issued a notice canceling the patent. On July 25, 2014, the United States Court of Appeals for the Federal Circuit (“the Appeals Court”) vacated the injunction and the contempt order. On June 18, 2015, the Appeals Court, in a 5-5 split opinion, denied our petition for rehearing. We intend to ask the United States Supreme Court to consider the case.

These types of cases are complex in nature, are likely to have significant expenses associated with them, and we cannot predict when any litigation will be resolved, whether we will be successful in any claim for monetary or equitable relief, whether any award ultimately received will exceed the costs incurred to pursue this matter, or how long it will take to bring any matter to resolution.

Other Matters

We may become party to various legal proceedings arising in the ordinary course of business including preference payment claims asserted in customer bankruptcy proceedings, claims of alleged infringement of patents, trademarks, copyrights and other intellectual property rights, claims of alleged non-compliance with contract provisions, employment related claims, claims by competitors, vendors or customers, claims related to alleged violations of laws and regulations, and claims relating to alleged security or privacy breaches. Although we do not expect that the outcome in any of these matters, individually or collectively, will have a material adverse effect on our financial condition or results of operations, litigation is inherently unpredictable. Therefore, judgments could be rendered or settlements entered that could adversely affect our results of operations or cash flows in a particular period. We provide for costs related to contingencies when a loss is probable and the amount is reasonably determinable.

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STOCKHOLDERS' EQUITY

6 Months Ended

Sep. 30, 2015

STOCKHOLDERS' EQUITY [Abstract]

STOCKHOLDERS' EQUITY

9. STOCKHOLDERS’ EQUITY

On August 13, 2015, our board of directors authorized the Company to repurchase up to 500,000 shares of its outstanding common stock over a 12-month period beginning on August 17, 2015 through August 16, 2016. The plan authorized purchases to 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 six months ended September 30, 2015, we did not purchase any shares of our outstanding common stock under the share repurchase plan; however, we did purchase 30,447 shares of common stock at a value of $2.5 million to satisfy tax withholding obligations relating to the vesting of employees’ restricted stock.

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

Since the inception of our initial repurchase program on September 20, 2001 to September 30, 2015, we have repurchased approximately 5.6 million shares of our outstanding common stock at an average cost of $20.00 per share for a total purchase price of $111.6 million.

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GOODWILL AND OTHER INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014	Mar. 31, 2015
GOODWILL AND OTHER INTANGIBLE ASSETS [Abstract]
Goodwill and other intangible assets, Gross carrying amount	$ 57,256		$ 57,256		$ 57,483
Goodwill and other intangible assets, Accumulated amortization	(17,745)		(17,745)		(16,685)
Goodwill and other intangible assets Net	39,511		39,511		40,798
Finite-Lived Intangible Assets [Line Items]
Total amortization expense	700	$ 600	1,300	$ 1,000
Goodwill [Line Items]
Goodwill Gross	42,785		42,785		42,785
Goodwill, Accumulated Amortization / Impairment Loss	(8,673)		(8,673)		(8,673)
Goodwill, Net Carrying Amount	34,112		34,112		34,112
Technology [Member]
Goodwill [Line Items]
Goodwill, Net Carrying Amount	33,023		33,023		33,023
Software Document Management [Member]
Goodwill [Line Items]
Goodwill, Net Carrying Amount	1,089		1,089		1,089
Customer Relationships & Other Intangibles [Member]
Finite-Lived Intangible Assets [Line Items]
Intangibles assets, Gross carrying amount	11,778		11,778		12,005
Intangibles Assets, Accumulated amortization / Impairment Loss	(7,389)		(7,389)		(6,560)
Intangible assets, Net Carrying Amount	4,389		$ 4,389		5,445
Customer Relationships & Other Intangibles [Member] | Minimum [Member]
Finite-Lived Intangible Assets [Line Items]
Estimated useful life			3 years
Customer Relationships & Other Intangibles [Member] | Maximum [Member]
Finite-Lived Intangible Assets [Line Items]
Estimated useful life			6 years
Capitalized Software Development [Member]
Finite-Lived Intangible Assets [Line Items]
Intangibles assets, Gross carrying amount	2,693		$ 2,693		2,693
Intangibles Assets, Accumulated amortization / Impairment Loss	(1,683)		(1,683)		(1,452)
Intangible assets, Net Carrying Amount	$ 1,010		$ 1,010		$ 1,241
Capitalized Software Development [Member] | Minimum [Member]
Finite-Lived Intangible Assets [Line Items]
Estimated useful life			3 years
Capitalized Software Development [Member] | Maximum [Member]
Finite-Lived Intangible Assets [Line Items]
Estimated useful life			6 years

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BUSINESS COMBINATIONS

6 Months Ended

Sep. 30, 2015

BUSINESS COMBINATIONS [Abstract]

BUSINESS COMBINATIONS

14. BUSINESS COMBINATIONS

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

The total purchase price was $10.5 million, which consists of cash paid, amounts to be paid to Evolve upon collection of certain accounts receivables, and the fair value of contingent consideration. We estimated the fair value of the contingent consideration to be $2.0 million as of the acquisition date using a Monte Carlo simulation model. The maximum payout for contingent consideration is $2.5 million over 3 years. The purchase price has been allocated to the assets acquired and liabilities assumed based on their estimated fair values on the transaction date, including identifiable intangible assets of $4.0 million related to customer relationships with an estimated useful life of 6 years, and other net assets of $0.6 million. We recognized goodwill related to this transaction of $4.5 million, which was assigned to our technology reporting unit. The goodwill recognized in the acquisition is attributable to the acquired assembled workforce, their presence in the western United States, and expected synergies, none of which qualify for recognition as a separate intangible asset. Goodwill associated with the acquisition is deductible for tax purposes.

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PROPERTY, EQUIPMENT OTHER ASSETS AND LIABILITIES (Tables)

6 Months Ended

Sep. 30, 2015

PROPERTY, EQUIPMENT OTHER ASSETS AND LIABILITIES [Abstract]

Property, equipment other assets and liabilities

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

	September 30, 2015		March 31, 2015
Other current assets:
Deposits & funds held in escrow	$	916	$	4,281
Prepaid assets		3,120		2,652
Other		682		480
Total other current assets	$	4,718	$	7,413
Other assets:
Deferred costs	$	2,302	$	2,308
Property and equipment, net		5,957		6,127
Other		710		1,045
Total other assets - long term	$	8,969	$	9,480
	September 30, 2015		March 31, 2015
Other current liabilities:
Accrued expenses	$	6,590	$	5,302
Deferred compensation		-		222
Other		9,886		8,051
Total other current liabilities	$	16,476	$	13,575
Other liabilities:
Deferred revenue	$	2,382	$	2,923
Other		895		890
Total other liabilities - long term	$	3,277	$	3,813

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SHARE-BASED COMPENSATION (Details) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended		6 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Compensation Expense [Abstract]
Total share-based compensation expense	$ 1.5	$ 1.2	$ 2.7	$ 2.2
401 (k) Profit Sharing Plan [Abstract]
Period over which employer contribution is vested			4 years
Contribution to profit sharing plan	$ 0.4	$ 0.3	$ 0.7	$ 0.6
Restricted Stock [Member]
Number of Shares [Rollforward]
Nonvested (in shares)			176,514
Granted (in shares)			125,125
Vested (in shares)			(94,625)
Forfeited (in shares)			(2,321)
Nonvested (in shares)	204,693		204,693
Weighted Average Grant-date Fair Value [Rollforward]
Nonvested (in dollars per share)			$ 52.75
Granted (in dollars per share)			81.76
Vested (in dollars per share)			48.75
Forfeited (in dollars per share)			64.06
Nonvested (in dollars per share)	$ 72.21		$ 72.21
Compensation Expense [Abstract]
Unrecognized compensation expense	$ 13.0		$ 13.0
Unrecognized compensation expense, period for recognition			57 months
2008 Director LTIP [Member] | Restricted Stock [Member]
Number of Shares [Rollforward]
Granted (in shares)			6,151	9,390
2012 Employee LTIP [Member] | Restricted Stock [Member]
Number of Shares [Rollforward]
Granted (in shares)			118,974	78,165

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UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME [Abstract]
NET EARNINGS	$ 15,679	$ 11,952	$ 24,493	$ 21,429
OTHER COMPREHENSIVE INCOME, NET OF TAX:
Foreign currency translation adjustments	(177)	(160)	(134)	(44)
Other comprehensive income (loss)	(177)	(160)	(134)	(44)
TOTAL COMPREHENSIVE INCOME	$ 15,502	$ 11,792	$ 24,359	$ 21,385

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GOODWILL AND OTHER INTANGIBLE ASSETS

6 Months Ended

Sep. 30, 2015

GOODWILL AND OTHER INTANGIBLE ASSETS [Abstract]

GOODWILL AND OTHER INTANGIBLE ASSETS

3. GOODWILL AND OTHER INTANGIBLE ASSETS

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

	September 30, 2015							March 31, 2015
	Gross Carrying Amount		Accumulated Amortization / Impairment Loss			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization / Impairment Loss			Net Carrying Amount
Goodwill	$	42,785	$	(8,673	)	$	34,112	$	42,785	$	(8,673	)	$	34,112
Customer relationships & other intangibles		11,778		(7,389	)		4,389		12,005		(6,560	)		5,445
Capitalized software development		2,693		(1,683	)		1,010		2,693		(1,452	)		1,241
Total	$	57,256	$	(17,745	)	$	39,511	$	57,483	$	(16,685	)	$	40,798

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. Customer relationships and capitalized software development costs are amortized over an estimated useful life, which is generally between 3 to 6 years.

We perform our goodwill impairment test annually during our third quarter of each year. For the year ended March 31, 2015, we performed a qualitative assessment and concluded that the fair value of our reporting units were, more likely than not, greater than their respective carrying amounts.

All of our goodwill as of September 30, 2015 and March 31, 2015 is related to our technology segment. The following table summarizes the amount of goodwill allocated to our reporting units (in thousands):

Reporting Unit	September 30, 2015		March 31, 2015
Technology	$	33,023	$	33,023
Software Document Management		1,089		1,089

OTHER INTANGIBLE ASSETS

Total amortization expense for other intangible assets was $0.7 million and $0.6 million for the three months and $1.3 and $1.0 million for the six months ended September 30, 2015 and 2014, respectively.

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NOTES PAYABLE AND CREDIT FACILITY (Tables)

6 Months Ended

Sep. 30, 2015

NOTES PAYABLE AND CREDIT FACILITY [Abstract]

Non-recourse and Recourse Obligations

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

	September 30, 2015		March 31, 2015
Recourse notes payable with interest rates ranging from 2.24% and 4.13% at September 30, 2015 and ranging from 2.24% and 4.13% at March 31, 2015.
Current	$	1,204	$	889
Long-term		2,815		2,801
Total recourse notes payable	$	4,019	$	3,690
Non-recourse notes payable secured by financing receivables and investments in operating leases with interest rates ranging from 1.70% to 7.50% at September 30, 2015 and ranging from 1.70% to 10.00% as of March 31, 2015.
Current	$	28,137	$	28,560
Long-term		10,510		24,314
Total non-recourse notes payable	$	38,647	$	52,874

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NOTES PAYABLE AND CREDIT FACILITY (Details) $ in Thousands	6 Months Ended		12 Months Ended
	Sep. 30, 2015 USD ($) Component	Sep. 30, 2014 USD ($)	Mar. 31, 2015 USD ($)
Recourse Notes Payable [Abstract]
Current	$ 1,204		$ 889
Long-term	2,815		2,801
Total recourse notes payable	4,019		3,690
Non-recourse Notes Payable Secured by Financing Receivables and Investments in Operating Leases [Abstract]
Current	28,137		28,560
Long-term	10,510		24,314
Total non-recourse notes payable	38,647		$ 52,874
Gain on repurchase agreement		$ 1,400
Maximum amount can be borrowed under credit facility	$ 250,000
Period of notice required to terminate credit facility at year end	90 days
Period of notice required to terminate credit facility at quarter end	45 days
GECDF [Member]
Non-recourse Notes Payable Secured by Financing Receivables and Investments in Operating Leases [Abstract]
Number of components under GECDF credit facility | Component	2
Reference rate of credit facility	One Month LIBOR		One Month LIBOR
Guarantor obligations for credit facility, maximum	$ 10,500
GECDF [Member] | One Month LIBOR [Member]
Non-recourse Notes Payable Secured by Financing Receivables and Investments in Operating Leases [Abstract]
Basis spread on reference rate	2.50%		2.50%
Account Receivable Component [Member]
Non-recourse Notes Payable Secured by Financing Receivables and Investments in Operating Leases [Abstract]
Maximum amount can be borrowed under credit facility	$ 30,000
Amount outstanding under credit facility	0		$ 0
Floor Plan Component [Member]
Non-recourse Notes Payable Secured by Financing Receivables and Investments in Operating Leases [Abstract]
Amount outstanding under credit facility	127,100		99,400
Recourse Note Payable [Member]
Recourse Notes Payable [Abstract]
Current	1,204		889
Long-term	$ 2,815		$ 2,801
Non-recourse Notes Payable Secured by Financing Receivables and Investments in Operating Leases [Abstract]
Interest rate of notes, minimum	2.24%		2.24%
Interest rate of notes, maximum	4.13%		4.13%
Weighted average interest rate of notes	3.21%		3.19%
Non-Recourse Note Payable [Member]
Non-recourse Notes Payable Secured by Financing Receivables and Investments in Operating Leases [Abstract]
Current	$ 28,137		$ 28,560
Long-term	$ 10,510		$ 24,314
Interest rate of notes, minimum	1.70%		1.70%
Interest rate of notes, maximum	7.50%		10.00%
Weighted average interest rate of notes	3.18%		3.23%

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SEGMENT REPORTING

6 Months Ended

Sep. 30, 2015

SEGMENT REPORTING [Abstract]

SEGMENT REPORTING

13. SEGMENT REPORTING

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

	Three Months Ended
	September 30, 2015						September 30, 2014
	Technology		Financing		Total		Technology		Financing		Total
Sales of product and services	$	324,259	$	-	$	324,259	$	286,584	$	-	$	286,584
Financing revenue		-		10,279		10,279		-		9,059		9,059
Fee and other income		1,721		27		1,748		1,782		47		1,829
Net sales		325,980		10,306		336,286		288,366		9,106		297,472
Cost of sales, product and services		261,208		-		261,208		230,742		-		230,742
Direct lease costs		-		3,157		3,157		-		2,806		2,806
Cost of sales		261,208		3,157		264,365		230,742		2,806		233,548
Professional and other fees		1,305		208		1,513		1,321		256		1,577
Salaries and benefits		33,476		2,264		35,740		31,963		2,289		34,252
General and administrative expenses		7,322		263		7,585		6,703		455		7,158
Interest and financing costs		22		400		422		19		592		611
Operating expenses		42,125		3,135		45,260		40,006		3,592		43,598
Earnings before provision for income taxes	$	22,647	$	4,014	$	26,661	$	17,618	$	2,708	$	20,326
Depreciation and amortization	$	1,229	$	3,039	$	4,268	$	1,081	$	2,709	$	3,790
Purchases of property, equipment and operating lease equipment	$	576	$	8,118	$	8,694	$	744	$	706	$	1,450
Total assets	$	379,378	$	211,109	$	590,487	$	341,893	$	222,553	$	564,446

	Six Months Ended
	September 30, 2015						September 30, 2014
	Technology		Financing		Total		Technology		Financing		Total
Sales of product and services	$	583,955	$	-	$	583,955	$	547,940	$	-	$	547,940
Financing revenue		-		18,625		18,625		-		17,933		17,933
Fee and other income		3,532		40		3,572		3,829		74		3,903
Net sales		587,487		18,665		606,152		551,769		18,007		569,776
Cost of sales, product and services		468,926		-		468,926		443,650		-		443,650
Direct lease costs		-		6,175		6,175		-		5,763		5,763
Cost of sales		468,926		6,175		475,101		443,650		5,763		449,413
Professional and other fees		2,567		464		3,031		2,907		503		3,410
Salaries and benefits		66,428		4,526		70,954		62,633		4,566		67,199
General and administrative expenses		13,851		513		14,364		12,461		970		13,431
Interest and financing costs		41		934		975		58		1,197		1,255
Operating expenses		82,887		6,437		89,324		78,059		7,236		85,295
Operating income		35,674		6,053		41,727		30,060		5,008		35,068
Other income		-		-		-		-		1,434		1,434
Earnings before provision for income taxes	$	35,674	$	6,053	$	41,727	$	30,060	$	6,442	$	36,502
Depreciation and amortization	$	2,466	$	6,037	$	8,503	$	1,975	$	5,656	$	7,631
Purchases of property, equipment and operating lease equipment	$	1,194	$	14,424	$	15,618	$	1,086	$	833	$	1,919
Total assets	$	379,378	$	211,109	$	590,487	$	341,893	$	222,553	$	564,446